1. IAEA International Atomic Energy Agency Standards and practices related to Construction Procurement John H. Moore Nuclear Power Engineering Section j.h.moore@iaea.org VIE2012/9002/01 Meeting March 23-26, 2015 Hanoi, Vietnam

2. IAEA Topics to be covered ISO 10845 – Construction procurement Industrial safety Other useful standards FIDIC & NEC3 Contract standards Bank and other financial organization standards BS8903 on sustainable procurement

3. IAEA WHAT IS ISO 10845?

4. IAEA ISO 10845 Construction procurement Issued 2010/2011; Based on original South African procurement standards (team lead was S. African); Especially relevant for developing countries; Can be use in procurement documents using international forms of contract (e.g. FIDIC, NEC3); Describes processes, methods & procedures for creating a fair, equitable, transparent, competitive, & cost-effective procurement system.

5. IAEA Underlying principles guiding work Fair: Impartial and providing simultaneous and timely information, not prejudicing interests of the parties. Equitable: Non-award to a compliant bidder only if there are restrictions from doing business, incapability or incapacity, legality, conflicts of interest. Transparent: Procurement process and criteria for each project/programme to be publicised; decisions publicly available with reasons, and verifiable. Competitive: System provides for appropriate competition to ensure cost-effective and best value outcomes. Cost-effective: Processes standardized with flexibility to attain best value in respect of quality, timing and price. Promotion of other objectives such as use of SMEs, local job creation and local economic development, ensuring criteria is measurable, quantifiable and monitored.

6. IAEA ISO 10845 Construction Procurement Eight parts: Part 1: Processes, methods & procedures Part 2: Formatting & compilation of procurement documentation Part 3: Standard conditions of tender Part 4: Standard conditions for calling for expressions of interest Part 5: Participation of targeted enterprises Part 6: Participation of targeted partners in joint ventures Part 7: Participation of local enterprises and labour Part 8: Participation of targeted labour.

7. IAEA ISO 10845-1:2010 (Part 1) Describes generic procurement processes; Establishes basic requirements for conduct of employer's employees, agents, board members & office bearers when engaging in procurement; Establishes framework for development of employer's procurement policy, including any secondary procurement policy; Establishes generic methods & procedures for procurements, including those pertaining to disposals and electronic communications.

8. IAEA ISO 10845-1 Procurement process Preparing for procurement Procurement documentation Solicitation of tenders (basic procedures, competitive selection, negotiated procedures, competitive negotiation, framework agreements etc.) Advertisements Tender processes and procedures (deposits, receipts, contact protocols, opening, evaluation methods, etc.) Award of contracts Contact administration Dispute resolution Unsolicited proposals Departures from established methods

9. IAEA ISO 10845-2:2011 (Part 2) Formatting and compilation of proc. documentation Applied in procurement documents which make use of international forms of contract (e.g.FIDIC, NEC3); Provides sample document framework & content: Documents related to the call for expressions of interest (notice and invitation to submit, submission data, returnable doc’s, schedule, indicative scope of work); Documents related to the tender (procedures, returnable doc.’s); Documents related to the contract (agreements, contract data, pricing assumptions, pricing schedules; scope of work, site information); Annexes provide sample divisions, tables of contents etc.

10. IAEA ISO 10845-3:2011 (Part 3): Standard Conditions of Tender Contains standard conditions of tender (binding on employer and tenderer). Establishes what a tenderer must do to submit a compliant tender, makes evaluation criteria known to tenderers, and establishes the manner in which the procuring entity conducts the processes of offer and acceptance, and provides feedback to tenderers on process outcomes.

11. IAEA ISO 10845-3:2011 (Part 3): Standard Conditions of Tender (cont.’d) Documents methodology for scoring tenders (applying tender evaluation points) depending on criteria chosen: Financial offer Financial offer and quality Financial offer and preferences Financial offer, quality, and preferences Annex provides step by step instructions for evaluation process.

12. IAEA ISO 10845-4:2011 (Part 4) standard conditions for calling for expressions of interest Contains standard conditions for calling for expressions of interest. Includes requirements for respondents to submit compliant submissions, makes evaluation criteria known, and the manner in which the procuring entity conducts the process of calling for expressions of interest and evaluates submissions. Annex provides sample submission data layout/format.

13. IAEA ISO 10845-5/6/7/8:2011 (Parts 5 - 8): Participation of targetted or local enterprises, partners, and labour Ways to establish key performance indicators (KPIs) to measure contract outcomes in relation to engagement of targetted enterprises, joint venture partners, local resources & local labour & to establish a target level or minimum performance criteria for a contractor to achieve or exceed. These enable procurement systems to respond to sustainable development in a meaningful and measureable way.

14. IAEA Provides method for documenting target goals, acceptable methods of achieving that goal, verification measures, credits to be achieved, plans to be prepared etc. Recommends participation be measured and evaluated in monetary terms (more easily verified/audited); Strategies can provide tender evaluation points as part of selection or financial incentives during contract execution for successful results. ISO 10845-5/6/7/8:2011 (Parts 5 - 8): Participation of targetted or local enterprises, partners, and labour

15. IAEA ISO 10845-5/6/7/8:2011 (Parts 5 - 8) (cont.’d) Helps address the problem of how to integrate national participation goals into a contract framework.

16. IAEA ISO 10845-7 example Assume contract value of 100 000 M₫ Tender weighting %’s established in BIS: Targetted labour group #1: 1.5% Targetted labour group #2: 1.2% Targetted enterprises: 1.0% Targetted suppliers*: 0.6% Targetted manufacturers0.8% Total evaluation %:5.2% of evaluation points * the standard reduces credit for targetted suppliers by 50% due to it being “generally easier for suppliers to achieve participation levels”

17. IAEA ISO 10845-7 example (cont.’d) Bidders provide with their offers specific contract participation values. For example Bidder 1 can promise to: employ workers from target group 1 with wages of 5000 M₫ ; employ workers from target group 2 with wages of 4000 M₫; subcontract to targetted enterprises for 6000 M₫; purchase goods from targetted suppliers worth 4000 M₫; Purchase good from targetted manufacturers worth 1000 M₫. Value of targetted participation is thus: 5000+4000+6000+4000 x.5 +1000= 18000 M₫ (18% of contract value) This amount (or the specific sub-items) can be compared between bids, and incentives and penalties included in the contract to track actual progress.

18. IAEA INDUSTRIAL SAFETY

19. IAEA International Labour Office (ILO) ILO Code of Practice on Safety and Health in Construction approved 1992. Guidelines on Occupational Health and Safety Management Systems approved 2001 (ILO OSH 2001). Provide minimum requirements for OSH programmes worldwide; Nuclear programmes generally have higher expectations (public interest/license to operate, linkages to nuclear safety culture); Public has difficulty distinguishing between nuclear and non-nuclear incidents at a nuclear site! Safer projects are generally better planned and managed; greater chance of being on time and on budget.

20. IAEA Industrial safety and contracts Contract terms and conditions should clearly document safety parameters (performance, behaviour expectations, key personnel capability), and clearly define contractor safety responsibilities and expectations; Bid evaluation and contract monitoring should include evaluation (and monitoring) of contractor safety performance; NP-T-3.21 will provide some guidance on intelligent customer role and purchasing of services. IAEA document on OSH management for NPPs is under preparation.

21. IAEA OTHER USEFUL STANDARDS

22. IAEA International contract standards Help make contract terms & conditions more acceptable to international corporations. Examples include: FIDIC (www.fidic.org)www.fidic.org NEC3 (www.neccontract.com)www.neccontract.com Provide model contract terms and conditions, including methods and timelines for dispute resolution (e.g. Dispute Adjudication Boards).

23. IAEA Bank and other financial organization contract standards Examples: World Bank Standard Bidding Document “Procurement of Goods” 1 Provides sample bidding procedures, supply requirements, general and special conditions of contracts, contract forms, and invitation for bids form. Asian Development Bank (ADB) Procurement guidelines 2 Specifies preference for international competitive bidding, but provides details on limited international and/or national competitive bidding, shopping, direct contracting (single source), BOO/BOT/BOOT, and other processes. Details bidding process steps. 1 http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/PROCUREMENT/0,,contentM DK:20060840~pagePK:84269~piPK:60001558~theSitePK:84266,00.html http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/PROCUREMENT/0,,contentM DK:20060840~pagePK:84269~piPK:60001558~theSitePK:84266,00.html 2 http://www.adb.org/documents/procurement-guidelines http://www.adb.org/documents/procurement-guidelines

24. IAEA BS 8903:2010 Principles and framework for procuring sustainably First standard for sustainable procurement Launched 2010; covers how sustainable procurement principles & practices can be embedded across an organization and its supply chains. May include establishing objectives, targets & action plans to maximize positive impacts of procurement and minimize negative impacts.

25. IAEA COMMENTS/QUESTIONS? Thank You for Your Participation 25 IAEA Nuclear Energy News available at : @IAEANE