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8/2/2019 PPS1 Module 9 (c)
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1
MODULE 9 (c)
Procurement of InfrastructureContracts
8/2/2019 PPS1 Module 9 (c)
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MODULE 9(c) OBJECTIVES
To enable the participants to:
1. understand the scope, standards and outputs of detailed engineering – including surveys, plans, specifications, drawings, value engineering,quantity and cost estimates, and PERT/CPM;
2. screen and ascertain the adequacy of detailed engineering outputs as basicinputs for the preparation of BDs.
3. have the skills and knowledge required to manage the procurement processand the resulting contracts for infrastructure projects; and
4. gain basic hands-on skills to apply the principles, rules and procedures inthe steps in the procurement of infrastructure contracts – from preparationand review of BDs to contract approval and administration.
8/2/2019 PPS1 Module 9 (c)
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MODULE 9(c) SCHEDULE
Day 1: Review of Modules 5-7 and Detailed Engineering:Lecture-Discussion and Group Workshop
Day 2: Preliminary Examination and Detailed Evaluation of Bids:Case Studies and Group Workshop
Day 3: Post-Qualification and Award: Case Studies and GroupWorkshop
Day 4: Contract Perfection and Applications of Contract
Conditions: Case Studies and Group Workshop
Day 5: Design-Build, Integration and Examination
8/2/2019 PPS1 Module 9 (c)
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DAY 1 SESSION 1 OBJECTIVES
To enable the participants to:
1. review the principles, procedures and rules in the
procurement of infrastructure contracts (Modules 5-7); and
2. gain a basic understanding of the scope of the initialaspects of detailed engineering – from design standards upto preparation of technical specifications – and determine
the adequacy or suitability of their outputs for use as inputsin preparing the BDs.
8/2/2019 PPS1 Module 9 (c)
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OUTLINE OF SESSION 1
1. Review of Modules 5 to 7
2. Detailed Engineering2.1 DE as Prerequisite to Bidding
2.2 Scope of DE
2.3 Discussion of DE activities up to Specifications
8/2/2019 PPS1 Module 9 (c)
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1-A. REVIEW OF MODULE 5
Module 5: Preparation of Bidding Documents
Purpose of BDs
DE as Inputs to BDs
Contents of BDs
8/2/2019 PPS1 Module 9 (c)
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PREPARATION OF BIDDING DOCUMENTS
(BDs) –
1/8
Purpose of BDs – to define:
• Scope of work, approved budget, duration, outputs of the contract
• Minimum legal, technical and financial requirements to be eligible to bid• Documents and other requirements that bidder must include in his bid.
• Process and rules for submission and receipt of bids, evaluation of bids,post-qualification, and award of contract.
• Terms and conditions of contract.
Detailed Engineering (DE) as Pre-Requisite to BDs• Certification that DE has been done per requirements/ standards.
8/2/2019 PPS1 Module 9 (c)
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PREPARATION OF BDs – 2/8
Summary of Contents of BDs for Infra Projects:• Part I
Sec. I - Invitation to Apply for Eligibility and to Bid (IAEB)
Sec. II - Eligibility Requirements (ER)
• Part II Sec. I - Instructions to Bidders (ITB), incldg Docs comprising bid
Sec. II - Bid Data Sheet (BDS)
Sec. III - General Conditions of Contract (GCC)
Sec. IV - Special Conditions of Contract (SCC)
Sec. V - Specifications Sec. VI - Drawings
Sec. VII - Bill of Quantities (BOQ)
Sec. VIII- Forms
8/2/2019 PPS1 Module 9 (c)
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PREPARATION OF BDs – 3/8
Part I, Sec. I – Invitation (IAEB)
Part I, Sec. II – Eligibility Requirements (ER)
• A. Eligibility Criteria• B. Prior Registration with Agency with Electronic Registry
• C. Submission of Letter of Intent (LOI)
• D. Eligibility Screening/Check
8/2/2019 PPS1 Module 9 (c)
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PREPARATION OF BDs – 4/8
Part II, Sec. I – Instructions to Bidders (ITB)
• A. Scope of Bid (ITB 1)
• B. Pre-Bid Conference (ITB 5)
• C. Contents of BDs (ITB 6)
• D. Documents to comprise the Bid (ITB 10)
• E. Bid prices (ITB 11)
• F. Bid validity (ITB 13)
• G. Bid Security (ITB 14)
• H. Receipt of Bids (ITB 18)
• I. Modification and Withdrawal of Bids (ITB 20)
8/2/2019 PPS1 Module 9 (c)
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PREPARATION OF BDs – 5/8
• J. Opening and Preliminary Examination of Bids (ITB 21)
• K. Detailed Evaluation of Bids (ITB 23)
• L. Post-Qualification of Bidder with LCB (ITB 25)
• M. Right of Procuring Entity to reject bids (ITB 26)
• N. Award Criteria (ITB 27)
• O. Notice of Award (ITB 28)
• P. Performance Security (ITB 30)
• Q. Documents comprising the Contract (DPWH-ITB 30)
• R. Signing and approval of the Contract (ITB 29)
• S. Notice to Proceed (ITB 31)
8/2/2019 PPS1 Module 9 (c)
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PREPARATION OF BDs – 6/8
Part II, Sec. II – Bid Data Sheet (BDS)Contract-specific information for ITB:
A. Name of Procuring Entity
B. Contract ID and name
C. ABC and funding sourceD. Date, time, and venue of Pre-Bid Conference
E. Procuring Entity’s address
F. Minimum work experience requirements of key personnel
G. Minimum equipment requirements
H. Validity period of bidsI. Validity period of bid security
J. Address and deadline for receipt of bids
K. Place, date, and time for opening of bids
8/2/2019 PPS1 Module 9 (c)
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PREPARATION OF BDs – 7/8
Part II, Sec. III – Gen. Conditions of Contract (GCC)
Part II, Sec. IV – Special Conditions of Contract (SCC)
Part II, Sec. V – Specifications
Part II, Sec. VI – Drawings
Part II, Sec. VII – Bill of Quantities (BOQ)
Pay Total
Item No. Description Unit Quantity Unit Price Price
(1) (2) (3) (4) (5) (6)=(4)x(5)
• PE shall specify data for Col. (1) to (4)
• Bidders shall fill in unit and total bid prices in Col. (5) and (6)
Part II, Sec. VIII – Forms
8/2/2019 PPS1 Module 9 (c)
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PREPARATION OF BDs – 8/8
Standard Bidding Documents (SBDs):• Philippine Bidding Documents – harmonized between GOP and ODA
agencies (ADB, WB, JBIC) – for national competitive bidding (NCB)• SBDs customized to agency – e.g., DPWH SBDs
BDs are for a particular contract, which shall adopt the SBDsbut with contract-specific info in:• IAEB Specs• BDS Drawings• SCC BOQ
SBDs and BDs should be downloadable at agency website.
FIDIC Conditions of Contract – for international competitivebidding (ICB)
8/2/2019 PPS1 Module 9 (c)
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1-B. REVIEW OF MODULE 6
Module 6: Evaluation of Bids
Eligibility Screening
Preliminary Examination of Bids
Detailed Evaluation of Bids
8/2/2019 PPS1 Module 9 (c)
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RECEIPT OF LOI AND CONDUCT OFELIGIBILITY CHECK – 1/6
Eligibility criteria:
Registered with agency w/ electronic registry (e.g., DPWH)
Legal requirements:
Citizenship: Filipino citizens/proprietors, or 75% Filipino ownedpartnerships/corporations/JV, or CDA-registered coops*
PCAB license for allowable range of contract cost, effective 01 July 2009*:
Small A ------ up to P 0.5 M Medium B --- up to P 200.0 M
Small B ------ up to P 15.0 M Large A ------ up to P 300.0 M
Medium A --- up to P 100.0 M Large B ------ no limit
Mayor’s business permit/city or municipal license* BIR tax clearance
Non-inclusion in blacklist
* Proposed in new IRR
8/2/2019 PPS1 Module 9 (c)
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RECEIPT OF LOI AND CONDUCT OFELIGIBILITY CHECK – 2/6
Technical requirements:
Work experience - Completed similar project >= 50% of ABC*
Financial requirements: either:
NFCC must = at least ABC*NFCC = [(current assets – current liabilities) K] - value of all outstanding
works under on-going and unstarted awarded contracts coincidingwith the subject contract,
where K = 10 if contract duration is 1 yr or less, 15 if duration is > 1 yr upto 2 yrs, 20 if duration is > 2 yrs
Credit line commitment must = at least 10% of ABC* Cash deposit certificate must = at least 10% of ABC
*Proposed in new IRR
8/2/2019 PPS1 Module 9 (c)
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RECEIPT OF LOI AND CONDUCT OFELIGIBILITY CHECK – 3/6
Documents needed for eligibility check:• Class “A” documents Legal documents:
1. DTI or SEC registration.*
2. Mayor’s permit/municipal license.* 3. TIN.
4. Bidder’s statement that it is not blacklisted.
5. Other licenses required by the entity.
6. Tax clearance
7. Tax returns filed and paid thru EFPS
8. Certificate of PhilGEPS registration. Technical documents
1. Bidder’s statement of on-going, completed and awarded but unstarted contracts –
with value of work, CPES, etc.*
* Proposed in new IRR
8/2/2019 PPS1 Module 9 (c)
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RECEIPT OF LOI AND CONDUCT OFELIGIBILITY CHECK – 4/6
Documents needed for eligibility check: Technical documents (cont’d)
2. PCAB license for the type and cost of the contract to be bid.*
3. Statement of availability of (a) key personnel and (b) equipment (owned/
leased/under purchase) for construction. Financial documents:
1. Audited financial statements, received by BIR.*
2. Bidder’s computation of NFCC or credit line commitment or cash depositcertificate.*
• Class “B” documents
1. Joint venture agreement, in case of JV. Each JV member shall submit requiredeligibility documents.*
2. Letter authorizing BAC to verify documents.
* Proposed in new IRR
8/2/2019 PPS1 Module 9 (c)
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RECEIPT OF LOI AND CONDUCT OF
ELIGIBILITY CHECK - 5/6
Submission of LOI for Eligibility
Contractor may download LOI form from agency website, or
obtain hard copy from BAC.
Contractor submits accomplished LOI (with CRC in the case of DPWH).
Content of LOI:
LOI indicates:
Contractor’s intention to apply for eligibility
If found eligible, commitment to submit a bid and purchase BDs. LOI shall state:
Bidder has key personnel.
It has equipment available if awarded the contract.
It is not in the government blacklist.
8/2/2019 PPS1 Module 9 (c)
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RECEIPT OF LOI AND CONDUCT OFELIGIBILITY CHECK - 6/6
It is not within relationships prohibited by Sec. 47 of RA 9184.
If its NFCC is less than ABC, it is submitting a credit line commitment orcash deposit certificate = 10% of ABC.
In the case of DPWH, it has updated its Contractor’s Info (CI) in theregistry of contractors, including status of on-going projects.
If necessary, it is nominating sub-contractors for specified parts of theworks.
In the case of a JV, it is submitting its JV agreement and special JV licensefrom PCAB.
Determination of eligibility
Processing of LOIs/eligibility documents to ascertain
eligible/ineligible contractors.
8/2/2019 PPS1 Module 9 (c)
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RECEIPT AND OPENING OF TECH. ANDFIN. ENVELOPES AND PREL EXAM – 1/5
Components of Bid Technical Proposal
Financial Proposal
Contents of Technical Proposal1. Bid Security*
2. Authority of signing official*
3. Construction schedule and S-curve
4. Construction methods
5. Organizational chart for the contract*6. Contractor’s certification on key personnel for the contract (vs. min.
experience requirements)** Proposed in new IRR
8/2/2019 PPS1 Module 9 (c)
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RECEIPT AND OPENING OF TECH. ANDFIN. ENVELOPES AND PREL EXAM – 2/5
7. Manpower utilization schedule
8. List of equipment pledged to the contract (vs. min. reqts)*
9. Equipment utilization schedule.
10. Affidavit of site inspection.11. Credit line commitment/cash deposit cert (10% of ABC).
12. Construction safety and health program of contractor.
13. Affidavit of compliance with labor laws and standards.*
14. Affidavit of compliance with contractor’s responsibilities under IRR
Sec. 17.7.1.*15. Affidavit of compliance w/ Disclosure provision under IRR Sec. 47.*
16. Other requirements specified in ITB.
* Proposed in new IRR
8/2/2019 PPS1 Module 9 (c)
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RECEIPT AND OPENING OF TECH. ANDFIN. ENVELOPES AND PREL. EXAM – 3/5
Contents of Financial Proposal1. Bid prices in the BOQ.*
2. Detailed estimates.*
3. Cash flow and payments schedule.*
Bid SecurityForm Min. amount
Cash, certified check, cashier’s check,
manager’s check, bank draft, L/C ------------ 1.0% of ABC
Bank guarantee --------------------------------- 1.5% of ABC Surety bond ------------------------------------- 2.5% of ABC
Foreign government guarantee -------------- 100.0% of ABC
* Proposed in new IRR
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RECEIPT AND OPENING OF TECH. ANDFIN. ENVELOPES AND PREL. EXAM – 4/5
Validity Period for Bids and Bids Security
• Reasonable period as indicated in the BDs.
• Not exceeding 120 days.
Period for Receipt of Bids
Max period from 1st day of
ABC advt of IAEB to bid opening
P 50 M and below 36 calendar days
Above P 50 M 50 calendar days
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RECEIPT AND OPENING OF TECH. ANDFIN. ENVELOPES AND PREL. EXAM – 5/5
Preliminary Examination of Bids
Check Tech. Proposal vs. checklist to determine the presence
(pass) or absence (fail) of required documents. If Tech. Proposal passes, check Fin. Proposal vs. checklist to
determine the presence or absence of required documents.
Only the passing Tech. and Fin. Proposals will proceed to thedetailed bids evaluation.
8/2/2019 PPS1 Module 9 (c)
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DETAILED EVALUATION OF BIDS –
1/2
Purpose of Bid Evaluation
To determine the Lowest Calculated Bid (LCB).
Criteria for Evaluation
• Bid must be complete: all required items in the BDs, including payitems in the BOQ, must be priced.
• Bid shall be corrected for arithmetical errors, inconsistencies,omissions and allowed discounts, to arrive at the calculated bids.
• Bids are deemed to include all taxes.
8/2/2019 PPS1 Module 9 (c)
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DETAILED EVALUATION OF BIDS – 2/2
• In case of discrepancies:
Bid prices in words shall prevail over figures.
Unit prices applied to quantities per item shall prevail over total prices.
Actual sum of prices of component items shall prevail over stated total.
Unit cost in the BOQ shall prevail over detailed estimates.
• Any total calculated bid exceeding ABC shall be disqualified.
• Rank the total calculated bids from the lowest to the highest.
• The lowest is the LCB.
8/2/2019 PPS1 Module 9 (c)
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POST-QUALIFICATION OF BIDDER WITH LCB
Procedure• Verification and validation of info in the bidder’s:
Contractor’s Information (in case of DPWH Registry)
Letter of Intent Technical Proposal
Financial Proposal
• Ascertaining bidder’s (incl. sub-contractors’) compliance with: Legal requirements – incl. licenses, permits, blacklist
Technical requirements – incl. no slippage of >15% or unsatisfactory
performance in any on-going project. Financial requirements – incl. any changes in NFCC.
If bidder passes the post-qualification requirements, BAC declares it asthe bidder with the LCRB.
8/2/2019 PPS1 Module 9 (c)
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AWARD OF CONTRACT
Procedure
• BAC issues Resolution of Award to Bidder with LCRB, based
on Bid Evaluation Report and Post-Qualification Report.• HOPE approves Resolution.
• BAC prepares Notice of Award (NOA), HOPE signs it, BACissues NOA to winning bidder and posts it at website.
8/2/2019 PPS1 Module 9 (c)
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1-C. REVIEW OF MODULE 7
Module 7: Contract Administration for Works
Finalizing and Approval of Contracts
Contract Implementation vs. GCC and SCC
8/2/2019 PPS1 Module 9 (c)
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FINALIZING AND APPROVAL OFCONTRACT - 1/3
Contract Documents
A. Contract Proper
1. Contract Agreement (use standard form in SBDs) – by PE
2. Documents forming part of the Contract Agreement:
a. Bidding Documents for the Contract – by PE
(1) GCC (5) IAEB
(2) SCC (6) ITB
(3) Drawings/Plans (7) BDS
(4) Specs (8) Bid Bulletins (Addenda)b. Contractor’s calculated bid in the Bid form, including Tech and
Financial Proposals –by PE
c. Contractor’s LOI (and CI from the DPWH Registry) –by PE
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FINALIZING AND APPROVAL OFCONTRACT - 2/3
d. NOA with the contractor’s conforme – by Contractor
e. Performance Security as required - by Contractor
f. Credit line or cash deposit certificate at least equal to 10% of thetotal Contract price - by Contractor
g. PERT/CPM diagram and bar chart with S-curve - by Contractor
Note: Contractor shall submit docs d to g within 10 days from NOA.
B. Supporting Documents
1. Approved Program of Work
2. Obligation Request
3. Abstract of Bids as Calculated
4. Approved BAC Resolution declaring the LCRB and recommendingaward
8/2/2019 PPS1 Module 9 (c)
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FINALIZING AND APPROVAL OFCONTRACT - 3/3
Performance SecurityCash, certified check, cashier’s/
manager’s check, bank draft ------------ 5% of Contract Price
Irrevocable letter of credit ----------------- 5% of Contract PriceBank guarantee ----------------------------- 10% of Contract PriceSurety bond---------------------------------- 30% of Contract PriceForeign government guarantee ---------- 100% of Contract Price
Contract Signing• Within 10 days from NOA.
Contract Approval• Within 5/15/25 days.
Notice to Proceed• Within 2/3/7 days.
8/2/2019 PPS1 Module 9 (c)
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CONTRACT ADMINISTRATION - 1/7
GCC – Some important provisions Procuring Entity’s obligations (GCC 5)
Deliver ROW and government-furnished materials/equipment/plans
Contractor’s obligations (GCC 6)
Carry out works per contract, including start and completion dates, keypersonnel, etc.
Performance Security (GCC 7) Guarantee faithful performance of contractor’s obligations
Form and amount of security.
Sub-contracting (GCC 8)
Not more than 50%, by eligible sub-contractors nominated in LOI. Liquidated damages (GCC 9)
Failure to complete works within contract time, incl. approved extns.
Formula based on opportunity cost of uncompleted portions of works.
CONTRACT ADMINISTRATION 2/7Procurement Professionalization Project
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CONTRACT ADMINISTRATION - 2/7
Defects Liability PeriodUnder Performance Security
Warranty PeriodUnder Warranty Security
ProjectCompletion
Final Acceptance
1 year 2/5/15
years
• Contractor assumes full
responsibility except thoseoccasioned by force majeure
• Repair within 90 days.
• Contractor shall be responsible forstructural defects except those caused
by third parties or force majeure.• Contractor is required to put up awarranty security, the form of whichshall be specified by the BAC.
GCC- Some important provisions• Warranty Security (GCC 12)
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CONTRACT ADMINISTRATION - 3/7
GCC – Some important provisions (cont’d)
Warranty Security (GCC 12) – cont’d
Cash deposit/cash bond/L/C ----------------- 5% of contract price
Bank guarantee -------------------------------- 10% of contract price Surety bond ------------------------------------ 30% of contract price
CARI (GCC 14)
Proportional to accomplished portions of the work.
Termination (GCC 15-18)
Entity may terminate for: contractor’s default (e.g., 15% slippage),insolvency, unlawful acts, breach of contract.
Contractor may terminate for: govt’s failure to deliver ROW/materials, breachof contract (e.g., non-payment within 84 days), adverse peace and order.
8/2/2019 PPS1 Module 9 (c)
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CONTRACT ADMINISTRATION - 4/7
GCC – Some important provisions (cont’d)
Resolution of disputes (GCC 20)
Per RA 9285.
Correction of defects (GCC 36)
Before end of defects liability period.
Advance payment (GCC 38)
15% max in lump sum, or ½ upon NTP and ½ upon mobilization, coveredby Performance Security, recouped from progress payments.
Monthly statements of work accomplished or progress billings (GCC
40/DPWH-GCC 41) To cover cumulative value of work accomplished.
Monthly certificates & progress payment (GCC 39/DPWH-GCC 42)
Certified by entity’s rep, net of previous payment, retention, etc.
8/2/2019 PPS1 Module 9 (c)
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CONTRACT ADMINISTRATION - 5/7
GCC – Some important provisions (cont’d)
• Retention (GCC 41)
To cover uncorrected defects and third party liabilities.
10% on progress payment.
• Variation orders (VOs) (GCC 42) Cumulative VOs not > 10% of original contract price; or another contract
HOPE may authorize VO beyond 10%, but not > 20%, with sanctions ondesigner/official responsible.
• Suspension of work (GCC 44)
Entity may suspend for: force majeure, contractor’s failure to correctbad/unsafe conditions or carry out valid orders, changes in plans.
Contractor may suspend for: non-delivery of gov’t materials, non-paymentof contractor within 45 days, adverse peace and order.
8/2/2019 PPS1 Module 9 (c)
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CONTRACT ADMINISTRATION - 6/7
GCC – Some important provisions (cont’d)
• Time extension (GCC 46)
Only when activities fall along the critical path of approved PERT/CPM.
Not for unfavorable weather or reasons already factored in the contract
duration, or inexcusable failure of contractor to provide eqpt/materials.• Price Adjustment (GCC 47)
No contract price adjustment or escalation, except for extraordinarycircumstances determined by NEDA and approved by GPPB.
Extraordinary circumstances under Civil Code:
a. Ordinary fortuitous events – typhoons, flooding, vehicular accidents, etcb. Extraordinary inflation or deflation – at least 2 standard deviations.
c. Extraordinary fortuitous events – fire, war, pestilence, earthquake, etc.
Use of parametric formulae and price indices.
8/2/2019 PPS1 Module 9 (c)
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CONTRACT ADMINISTRATION - 7/7
SCC – Some important provisions
• Intended completion date (GCC 1.17)
• Procuring Entity (GCC 1.22)
• Procuring Entity’s Representative (GCC 1.23)
• Start date (GCC 1.28)
• Description of the works (GCC 1.31)
• Dates of delivery of the works (GCC 5.1)
• Contractor’s key personnel (GCC 6.5)
•
Site investigation reports (GCC 10.1)• Type of structure and warranty period (GCC 12.3)
• Date of submission of as-built drawings (GCC 50.1)
• Amt to be w/held for failure to submit as-built drawings (GCC 50.2)
8/2/2019 PPS1 Module 9 (c)
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2. DETAILED ENGINEERING – 1/15
2.1 Detailed engineering (DE) as prerequisite to biddingand award (Sec. 7 and 17.6 and Annex A of IRR):
• Based on feasibility or preliminary engineering study.
• Sufficiently carried out and approved in accordance withthe standards and specs prescribed by the head of theprocuring entity, as certified by engineering/design office.
• In accordance with provisions in IRR Annex A.
• Exception is design-build scheme.
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44
TIPS: DETAILED ENGINEERING
Refer to model TOR for DE (e.g., DPWH).
Need for certification from design office that DE was done
according to standards, including Value Eng’g and Quality Assurance.
Rule-of-thumb: budget for DE is 3-6% of construction cost.
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2. DETAILED ENGINEERING – 2/15
2.2 Scope of detailed engineering
a. Setting of design standards
b. Conduct of surveys and investigations.
c. Conduct of design analyses and preparation of design plans.d. Preparation of contract plans.
e. Preparation of technical specs.
f. Preparation of quantity estimates.
g. Preparation of cost estimates and ABC.h. Preparation of program of work including PERT/CPM.
i. Determination of contract packages.
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DETAILED ENGINEERING – 3/15
j. Preparation of site/ROW and resettlement action plans and
schedule.
k. Preparation of utilities relocation plan.
l. Preparation of EIS.m. Preparation of min. requirements of safety and health
program.
n. Preparation of equipment requirements.
o. Conduct of value engineering studies.
p. Determination of contract time or duration.q. Determination of warranty period.
r. Preparation of Bidding Documents.
8/2/2019 PPS1 Module 9 (c)
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DETAILED ENGINEERING – 4/15
2.3 Discussion of DE Activities
a. Setting of design standards
In accordance with appropriate national/int’l standards and acceptedengineering design practices.
E.g., at DPWH, design standards shall be based on:
DPWH Design Guidelines, Criteria and Standards (Orange Book)
American Association of State Highway and Transportation Officials(AASHTO) for Highways and Bridges
American Concrete Institute (ACI) Standards
Technical Standards and Guidelines for Planning and Design of FloodControl, 2002, by Flood Control & Sabo Eng’g Center (FCSEC), DPWH
National Structural Code of the Philippines
Other relevant guidelines and standards
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DETAILED ENGINEERING – 5/15
a. Setting of design standards (cont’d)
For building projects, design shall comply with following laws,regulations and standards:
National Building Code (PD 1096) and its IRR. National Structural Code of the Philippines, Vol I – Bldgs, Towers, and
other Vertical Structures.
Local ordinances and regulations.
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DETAILED ENGINEERING – 6/15
b. Conduct of field surveys and investigations
• May include aerial, hydrographic, topographic, hydrologic, sub-surface, monumenting, geological, soils and materials, parcellary
and other surveys.• In accordance with agency guidelines, criteria, standards - e.g.,
DPWH Orange Book.
• Should provide input data for design and production of plans topermit quantity estimates with +/- 5 to 10% accuracy.
c. Design analyses and preparation of design plansand design reports
• Conform to national/international design guidelines, criteria,standards adopted by the agency.
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RED FLAGS: SURVEY DATA
Baseline field survey data - e.g., ground elevation/ cross- sections - are manipulated to overstate the quantities in the design – especially for earthworks.
No quality assurance to verify the integrity of the survey data.
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DETAILED ENGINEERING – 7/15
d. Preparation of contract plans/drawings
In accordance with agency guidelines and standards.
Incorporate at least the following: Site development plan.
Plans and profile sheets
Typical sections and details.
Structural plans at appropriate scales with details to set out and
complete the structure.
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RED FLAGS: PLANS/DRAWINGS
Plans are based on erroneous or manipulated data,thereby padding the quantities.
Major items are deliberately omitted in the design,necessitating variation orders during implementation.
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DETAILED ENGINEERING – 8/15
e. Preparation of technical specifications
• Use internationally/nationally accepted specs, e.g., DPWH Standard Specs forPublic Works & Highways, 1995/2004 (Blue Book)
Description of work Material requirements
Construction requirements
Measurements and payments
• Prepare Supplemental Specs for items not in Standard Specs.
DAY 1 SESSION 2 OBJECTIVES
Procurement Professionalization Project
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DAY 1 SESSION 2 OBJECTIVES
To enable the participants to:
1. gain a basic understanding of the scope of the other aspects
of detailed engineering – from quantity estimates topreparation of BDs, including specific guidelines for costestimates and ABC, and PERT/CPM.
2. determine the adequacy or suitability of their outputs for
use in finalizing the BDs.
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DETAILED ENGINEERING – 9/15
f. Preparation of quantity estimates• Estimates with accuracy of +/- 5 to 10% of final quantities.
• Bill of Quantities (BOQ) is discussed below.
g. Preparation of cost estimates and ABC• Unit prices for work items based on market prices.
• ABC is discussed below.
h. Preparation of program of work
• Include estimates of work items, quantities and costs, andPERT/CPM diagram of project activities*.
*Refer to power point slides on PERT/CPM.
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DETAILED ENGINEERING – 10/15
i. Determination of contract packages
• Depends on kind and size of the project.
• Preferably small packages, without impairing tech. integrity.
• No splitting to circumvent laws and rules.
j. Preparation of ROW and resettlement plans
• Based on parcellary and socio-economic surveys.
• Land Acquisition and Resettlement Action Plans (LARAP)
should be prepared in coordination with LGUs/NHA.
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RED FLAGS: CONTRACT PACKAGES
Packages are too large vs. norms: limits participation to few big contractors.
Splitting to bring bidding to lower offices, where rigging is deemed easier to arrange.
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TIPS: ROW AND RESETTLEMENT PLAN
Refer to model LAPRAP document (DPWH) and RA 8794 and its IRR.
Check (a) land titles with RD, LRA, BL; (b) land prices vs.BIR zonal values and market prices; and (c) improvement costs vs. replacement costs.
Prepare resettlement plan with suitable site, compensation,and action program – in coordination with LGUs and NHA.
Ensure families are resettled before bidding.
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DETAILED ENGINEERING – 11/15
k. Preparation of utilities relocation plan• Include electric, water, sewerage, telephone, drainage, and other
utilities affected by the project.
l. Preparation of EIS• Done for a environmentally critical project or project in an
environmentally critical area as defined by DENR.
m. Preparation of minimum requirements for constructionsafety and health program• Conform to standards of DOLE.
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RED FLAG: EIS
Project is advertised even without ECC/CNC. This delays contract award/implementation.
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DETAILED ENGINEERING – 12/15
n. Preparation of equipment requirements
• Types, numbers and capacities of equipment based on:
Nature, volume, timeframe of works to be done.
Equipment productivity. Equipment cost (capital and O&M) per unit output.
• Utilization and operation of equipment for the works to conform withtechnical specs (e.g., DPWH Blue book).
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RED FLAG: EQUIPMENT REQUIREMENTS
Production and efficiency rates for major equipment are substantially understated vs. norms. These result in:
• Overstated equipment requirements.
• Inflated ABC.
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DETAILED ENGINEERING – 13/15
o. Conduct of value engineering (VE) studies*
• In DPWH, VE proposed for all projects costing => P50 M.
• VE will analyze alternative schemes of achieving projectobjectives to delete/reduce non-essential features and lessen life-cycle costs of the project, without sacrificing its structural qualityand integrity, while attaining its essential function, performanceand safety.
*Refer to power point slides on Value Engineering.
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RED FLAG: VALUE ENGINEERING
TOR for FS and DE does not include VE.
QA check shows VE was not adequately done according to standards, or not done all.
Consequently,
• Over-designed projects could not be checked.
• Opportunities for significant savings are missed.
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DETAILED ENGINEERING – 14/15
o. Contract time or duration
• Allow for rainy/unworkable days based on PAGASA records.
• Check if reasonable considering industry experience.
p. Warranty period
• 2/5/15 years depending on type of project.
• Included in conditions of contract (GCC and SCC).
q. Preparation on Bidding Documents (BDs)
• Discussed in Module 5.
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DETAILED ENGINEERING – 15/15
r. Design-build*
• As provided in Annex G, RA 9184 IRR: Agency sets design-construction performance specs, and contractor undertakes design
and construction.
• For fast-track projects, advanced technologies, small projects.
• Advantages: single responsibility, faster, promotes innovation andhigh quality, less administrative burden, firm costs, less collusion.
*Refer to power point slides on Design-Build.
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RED FLAG: CONTRACT DURATION
Contract duration is too long compared to industry practice and experience. This drives up the costs.
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BILL OF QUANTITIES (BOQ) – 1/2
Should be based on plans/drawings and specs, includingbreakdown into work/pay items.
Estimates of quantities with accuracy of +/- 5 to 10%.
Typical BOQ:
• Parts to be provided by the Procuring Entity: Pay items withcorresponding descriptions, units of measurement, and quantities.
• Parts to be provided by the bidder as its bid: Unit bid prices and totalbid prices corresponding to he pay items.
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BILL OF QUANTITIES (BOQ) – 2/2
BILL OF QUANTITIES - EXAMPLE
Part No. ________ Part Description: _________________________________
Columns (1 to (4) are to be filled up by the
Procuring Entity
Columns (5) and (6) are to be filled up by the
Bidder
Pay
Item
No.
Description Qty Unit Unit Bid Price
(Pesos)
Total bid Price
(Pesos)
(1) (2) (3) (4) (5) (6)103(2) Bridge excavation above
ordinary water level
471 cu. m In words: ___________
___________________
In figures: __________
In words: ___________
___________________
In figures: __________
404 Reinforcing steel 33,793 kg In words: ___________
___________________
In figures: __________
In words: ___________
___________________
In figures: __________405(1) Structural concrete 242 cu. m In words: ___________
___________________
In figures: __________
In words: ___________
___________________
In figures: __________
APPROVED BUDGET FOR THE
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APPROVED BUDGET FOR THECONTRACT (ABC) – 1/4
Factors to be considered in determining the ABC:a. Adequate DE with estimates within +/- 5 to 10% accuracy.
b. Compliance w/ standards and specs (e.g., DPWH Blue Book)
c. Use of appropriate construction methods.
d. Use of applicable const. industry norms and practices (e.g., production ratesfor equipment/labor; components of direct/indirect costs)
e. Use of feasible sources of construction materials.
f. Use of market prices of labor/materials/equipment, as-built costs
g. Reasonable risks and contingencies.
h. Inclusion of all relevant/legitimate costs of contractor.
i. Compliance with agency orders (e.g., DPWH DO 57). j. Rule-of- thumb or benchmark costs (ABC and major items) for similar works
k. Use of cost database, monitoring system, automated estimation if feasible.
l. Use of trained agency estimators and quantity surveyors.
APPROVED BUDGET FOR THE
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APPROVED BUDGET FOR THECONTRACT (ABC) – 2/4
Cost elements:
• Direct cost (DC)(1) Cost of materials – cost at source, hauling, handling, storage, wastage(2) Cost of labor- salaries/wages, fringe benefits (leaves, SSS,13th month
pay, etc.)(3) Cost of equipment – bare/operated rental rates (ACEL), mobilization/
demobilization
• Indirect cost (IC)(1) Overhead expenses – supervision, transport, office expenses, premiums on
Securities/CARI/warranty, cost of money - normally not > 5 to 10% of DC
(2) Contingencies - normally not > 0.5 to 2% of DC(3) Miscellaneous - lab tests, etc., normally not > 0.3 to 1% of DC(4) Profit per year - normally not > OCC*[(n+2)/12]*DC(5) VAT = 12%*(DC+IC for (1) to (4))
APPROVED BUDGET FOR THE
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APPROVED BUDGET FOR THECONTRACT (ABC) – 3/4
APPROVED BUDGET FOR THE CONTRACT – EXAMPLE
Construction of Modified Conventional Type Single Storey School Building
7m x 7 m floor area
Item No. Description Unit Quantity Estimated
Direct
Cost (EDC)
(1) (2) (3) (4) (5)
I Earthworks lot 1 4,892.50
II Soil Poisoning sq. m 59.5 3,272.50
III Reinforced Concrete
a. Concrete cu. m 9.84 37,432.50
b. Reinforcing Steel Bars kg 850.57 34,390.15
IV Masonry Works sq. m 72.50 22,138.90
V Fabricated Materials and Hardware lot 1 27,575.80
VI Cement Plaster Finish sq. m 154.00 17,089.00
VII Painting Works lot 1 16,135.00
VIII Roof Framing lot 1 58,571.54
IX Corrugated Metal Roofing lot 1 20,610.00
X Roof Insulation lot 1 13,525.00
Total
APPROVED BUDGET FOR THE
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APPROVED BUDGET FOR THECONTRACT (ABC) – 4/4
RED FLAGS: ESTIMATES AND ABC
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RED FLAGS: ESTIMATES AND ABC
ABC (total and unit prices) substantially exceed benchmark prices by 15-30%.
If no quality assurance is done, quantities could be bloated
using manipulated survey and design data – thus padding the ABC.
Equipment production/efficiency rates are understated; material sources are too far; wastage is too large; indirect
costs are unusually high – thus jacking up the prices. Agency has no trained estimators.
VAT is double counted, especially for input materials.
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Modes of Undertaking DE
• Performed in-house by procuring/end-user entity if it has thetechnical capacity to do so.
• Assigned to specialized government agency (usually through
Memo of Agreement) – e.g., DPWH – if the entity is notcapable by itself to do the DE.
• Outsourced to engineering design consultants, especially forlarge and complex projects.