Clinic Design-Supply and Installation

OPCPR CLINICPROCUREMENT OF PLANT DESIGN SUPPLY AND INSTALLATIONSunil BhattacharyaJanuary 20101TOPICS FOR DISCUSSIONSWHAT DO WE UNDERSTAND BY PROCUREMENT OF PLANT DESIGN, SUPPLY, AND INSTALLATION UNDER BANK PROJECTS--SOME KEY CONCEPTSWHEN TO USE THIS TYPE OF CONTRACTSOME IMPORTANT AND SOME UNIQUE TERMS USED AND WHAT DO THEY MEANSINGLE AND TWO STAGE BIDDINGSTRUCTURE OF BIDDING DOCUMENT AND SOME IMPORTANT PROVISIONSIMPORTANT PROCUREMENT ASPECTSKEY DIFFERENCES FROM PROCUREMENT OF GOODS AND WORKSWATCH LIST TO AVOID COMMONLY ENCOUNTERED PROBLEMS

22 PROCUREMENT OF PLANT DESIGN-SUPPLY AND INSTALLATIONCONSTRUCTION OF A FACILITY THAT INCLUDES SPECIALLY ENGINEERED PLANTS AND EQUIPMENT INVOLVING THEIR DESIGN, SUPPLY, INSTALLATION AND COMMISSIONING AND AT TIMES CONSTRUCTION OF CIVIL WORKS UNDER A SINGLE RESPONSIBILITY CONTRACT

APPLICABLE BANK GUIDELINES: GUIDELINES PROCUREMENT UNDER IBRD LOANS AND IDA CREDITS OF MAY 2004-REVISED OCTOBER 2006

APPLICABLE SBDs ON BANKS WEBSITE FOR USE UNDER ICB: I) PLANT DESIGN, SUPPLY AND INSTALLATION OF APRIL 2008 FOR PROJECTS WITH PCN ON OR AFTER OCTOBER 15, 2006; AND II) SUPPLY AND INSTALLATION OF PLANT AND EQUIPMENT OF MAY 2005 REVISED JUNE 2007 FOR PROJECTS WITH PCN PRIOR TO OCTOBER 15, 2006 BOTH DOCUMENTS ARE NOT DESIGNED FOR TURNKEY TYPE OF CONTRACTS THAT ARE ACCEPTABLE UNDER BANK PROCUREMENT GUIDELINES

BANK NORMATIVE GUIDELINES ON FRAUD AND CORRUPTION IS APPLICABLE FOR PROJECTS WITH PCN ON OR AFTER OCTOBER 15, 2006

33TURNKEY CONTRACTS--KEY CONCEPT TURNKEY TYPE CONTRACT IS ONE WHERE A SINGLE ENTITY TAKES TOTAL RESPONSIBILITY TO PROVIDE A FULLY-EQUIPPED FACILITY READY FOR OPERATION AT THE TURN OF THE KEY AND PROVIDES KNOW-HOW, BASIC AND DETAILED DESIGN AND ENGINEERING, IS RESPONSIBLE FOR ALL PROCUREMENT, SUPPLY AND INSTALLATION OF PLANT AND EQUIPMENT AND CONSTRUCTION OF THE FACILITY INCLUDING ANY CIVIL WORKS UNDER ONE SINGLE RESPONSIBILITY CONTRACT--GENERALLY A LUMP-SUM CONTRACT WITH MUCH HIGHER RISKS BORNE BY CONTRACTORDEGREE OF EMPLOYERS INVOLVEMENT IN DESIGN AND ENGINEERING IS MINIMAL

44DESIGN SUPPLY AND INSTALLATION CONTRACTSKEY CONCEPTSEMPLOYER ESSENTIALLY REMAINS RESPONSIBLE FOR HIS DESIGN AND ENGINEERING PROVIDED FOR THE CONTRACT

EMPLOYER PROVIDES TECHNICAL SPECIFICATIONS AND DRAWINGS AS HE THINKS ARE ESSENTIAL FOR TECHNICAL AND PERFORMANCE CHARACTERISTICS AND REQUIREMENTS

CONTRACTOR TAKES RESPONSIBILITY FOR DESIGN, ENGINEERING, MANUFACTURE, INSTALLATION, CONSTRUCTION AND EACH ACTIVITY AS OFFERED BY HIM AND ACCEPTED IN THE CONTRACT THAT ARE REQUIRED TO COMPLETE THE FACILITY FOR THE PURPOSE INTENDED

55PLANT DESIGN-SUPPLY AND INSTALLATION-- KEY CONCEPTSCONTRACTOR HAS THE RIGHT TO DISCLAIM RESPONSIBILITY FOR THE DESIGN , DATA, DRAWING, SPECIFICATIONS GIVEN BY EMPLOYER

RESPONSIBILITIES OF EMPLOYER AND CONTRACTOR UNDER BOTH SBDs ARE NOT MATERIALLY DIFFERENT ALTHOUGH DETAILS OR EXTENT OF DESIGN, ENGINEERING AND SPECIFICATIONS PROVIDED BY THE EMPLOYER FOR EACH TYPE OF CONTRACT MAY VARY

66WHEN TO USEWHEN VALUE OF PLANT AND EQUIPMENT REPRESENTS MAJOR PROPORTION OF CONTRACT AMOUNT; AND

WHEN FACILITY CANNOT BE TAKEN OVER SAFELY WITHOUT TESTING, COMMISSIONING AND OTHER ELABORATE PROCEDURES BEFORE ACCEPTANCE

EXAMPLES: DESIGN, SUPPLY AND INSTALLATION OF TURBINES, GENERATORS, BOILERS, SWITCHYARDS, PUMPING STATIONS, TELECOMMUNICATIONS, PROCESS AND TREATMENT PLANTS UNDER POWER, WATER, SEWERAGE, TELECOM AND SIMILAR PROJECTS TO BE PROVIDED UNDER SINGLE RESPONSIBILITY CONTRACT77UNCLEAR WHEN TO USE? WHICH DOCUMENT TO USE? WHAT PROCEDURE TO USE?CONSULT RPM OFFICE OR OTHER SENIOR PROCUREMENT STAFF AT EARLY STAGES OF DESIGNING PROCUREMENT ARRANGEMENTS FOR THE PROJECT AND BEFORE ADVISING BORROWERSCONTRACTS ARE GENERALLY COMPLEX AND LARGE VALUE --MORE THAN $ 10 MILLION REQUIRING ADDED ATTENTIONDEPENDING UPON SIZE, NATURE AND COMPLEXITY PREQUALIFICATION AND/OR SINGLE OR TWO STAGE BIDDING PROCEDURES MAY APPLY 88SOME IMPORTANT AND SOME UNIQUE TERMS USED AND WHAT DO THEY MEANPROJECT MANAGERFACILITYPLANTCONTRACTORS EQUIPMENTINSTALLATION SERVICESCOMPLETION PRE-COMMISSIONINGCOMMISSIONINGFUNCTIONAL GUARANTEE AND LIABILITYOPERATIONAL ACCEPTANCEDEFECT LIABILITY PERIOD99SINGLE AND TWO STAGE BIDDINGWHAT IS A SINGLE STAGE BIDDING? TECHNICAL AND PRICE BIDS ARE RECEIVED AT THE SAME TIME AND BOTH PUBLICLY OPENED IMMEDIATELY THEREAFTERWHEN AND WHY A SINGLE STAGE BIDDING IS USEFUL OR NOT SO USEFULUSEFUL IF PROCUREMENT IS LESS COMPLEX USEFUL IF EMPLOYER'S SPECIFICATIONS ARE CLEAR AND LESS POSSIBILITY OF BIDDERS TAKING EXCEPTIONS OR DEVIATIONS TO SPECIFICATIONS NOT SO USEFUL TO RESCUE A LOW BID FROM A QUALIFIED BIDDER IF IT DEVIATED AS AFTER PRICE BID OPENING NO CHANGES IN SUBSTANCE OR PRICE CAN BE PERMITTED ADVANTAGE---PROCESSING TIME MAY BE LESS1010SINGLE AND TWO STAGE BIDDINGWHAT IS A TWO STAGE BIDDING? TECHNICAL PROPOSALS AND PRICE BIDS ARE RECEIVED AT DIFFERENT TIMES AND BOTH PUBLICLY OPENED AT DIFFERENT TIMESAT FIRST STAGE UNPRICED TECHNICAL PROPOSALS ARE INVITED BASED ON CONCEPTUAL DESIGN OR PERFORMANCE SPECIFICATIONS AT THE SECOND STAGE FINAL TECHNICAL PROPOSALS AND PRICE BIDS ARE INVITED FROM THOSE THAT PASS THE FIRST STAGE EVALUATION CRITERIA AND AFTER OBTAINING TECHNICAL AND COMMERCIAL CLARIFICATIONS FROM THEM AS NECESSARY 1111SINGLE AND TWO STAGE BIDDINGWHEN AND WHY A TWO STAGE BIDDING IS USEFUL OR NOT SO USEFULUSEFUL FOR VERY COMPLEX PROCUREMENT OR OF SPECIAL NATURE USEFUL IF DUE TO COMPLEX NATURE IT IS UNDESIRABLE OR IMPRACTICAL TO PREPARE SPECIFICATIONS IN ADVANCEUSEFUL IF HIGH POSSIBILITY OF BIDDERS TAKING EXCEPTIONS OR DEVIATIONS TO BORROWERS SPECIFICATIONS OR MAY OFFER BETTER ALTERNATIVE SOLUTIONS OR SPECIFICATIONS THAT MEET REQUIRED PERFORMANCE AND FUNCTIONAL GUARANTEES USEFUL TO RESCUE A BID IF IT DEVIATED IN TECHNICAL SPECIFICATIONS AT THE FIRST STAGE BID BY SEEKING CLARIFICATIONS AND MODIFICATIONS AS THERE IS NO PRICES INFORMATION DISADVANTAGE---PROCESSING TIME MAY BE LONGER1212Two-Stage ProcedureEmployer issues bidding docs. including conceptual design and performance specificationsBidders asked to submit technical-only proposals

Employer evaluates technical proposals responsiveness to conceptual/performance specs.Employer also verifies bidders qualification

Bidders may be invited to discuss content of tech. proposals and tech./commercial changes required Employer prepares minutes of required changes and may amend bidding documents based on discussions

Bidders invited to submit 2nd stage bids including final technical proposals and priced bids

Employer evaluates 2nd stage bids per evaluation criteriaAward to qualified bidder with responsive, lowest evaluated 2nd stage bid

Invitation to 1st Stage BiddingEvaluation of Technical ProposalsClarification/Feedback Meeting with Qualified BiddersInvitation to 2nd Stage BiddingTechnical/Financial Evaluation and Award1313SINGLE AND TWO STAGE BIDDINGDONT BE CONFUSED---TWO STAGE BIDDING AND TWO ENVELOPE SYSTEMS ARE QUITE DIFFERENTIN TWO ENVELOPE SYSTEM TECHNICAL AND PRICE BIDS ARE RECEIVED AT THE SAME TIME BUT IN TWO SEPARATE SEALED ENVELOPESFIRST TECHNICAL BIDS ARE OPENED AND EVALUATED --PRICE BIDS OF ONLY THOSE THAT ARE QUALIFIED AND PASS THE TECHNICAL EVALUATION ARE OPENED FOR AWARD BASED ON LOWEST EVALUATED PRICE PRICE ENVELOPES OF THOSE THAT FAIL IN TECHNICAL EVALUATION ARE RETURNED UNOPENEDNOT A GOOD PRACTICENON-TRANSPARENT AND NOT RECOMMENDEDPROCUREMENT GUIDELINES PERMIT TWO STAGE BIDDING BUT DOES NOT MENTION ABOUT TWO ENVELOPE SYSTEM1414Structure of Bidding DocumentPART 1 Bidding ProceduresOPTION A: Single Stage BiddingSection I. Instructions to BiddersSection II. Bid Data SheetSection III. Evaluation and Qualification Criteria (Following Prequalification)Section III. Evaluation and Qualification Criteria (Without Prequalification)

1515Structure of Bidding DocumentOPTION B: Two Stage BiddingSection I. Instructions to BiddersSection II. Bid Data SheetSection III. Evaluation and Qualification Criteria (Following Prequalification)Section III. Evaluation and Qualification Criteria (Without Prequalification)Section IV. Bidding FormsSection V. Eligible Countries

1616Structure of Bidding DocumentPART 2 Employers RequirementsSection VI. Employers RequirementsPART 3 Conditions of Contract and Contract FormsSection VII. General Conditions (GC)Section VIII. Particular ConditionsSection IX. - Contract FormsUsers Guide

1717INSTRUCTIONS TO BIDDERS-IMPORTANT PROVISIONSELIGIBLE BIDDERSCONFLICT OF INTEREST FRAUD AND CORRUPTION AND AUDIT RIGHTSCLARIFICATIONS-SITE VISITS-PRE-BID MEETINGSAMENDMENTS OF BIDDING DOCUMENTSALTERNATIVE BIDSDOCUMENTS ESTABLISHING CONFORMITY OF PLANT AND INSTALLATION SERVICESBID PRICES AND DISCOUNTS1818INSTRUCTIONS TO BIDDERS-IMPORTANT PROVISIONSCURRENCY OF BID AND PAYMENTBID VALIDITY AND BID SECURITYEVALUATION OF BIDS-TECHNICAL AND ECONOMICQUALIFICATION OF BIDDERSPERFORMANCE SECURITY 1919CONDITIONS OF CONTRACT-IMPORTANT PROVISIONSCONTRACTORS RESPONSIBILITYEMPLOYERS RESPONSIBILITYSECURITIESTAXES AND DUTIESINTELLECTUAL PROPERTYSUBCONTRACTINGPROCUREMENT CONTRACTORS PLANT EMPLOYER SUPPLIED PLANTCUSTOMS CLEARANCECOMPLETION OF FACILITIES

2020CONDITIONS OF CONTRACT-IMPORTANT PROVISIONSCOMMISSIONING AND OPERATIONAL ACCEPTANCEPARTIAL ACCEPTANCECOMPLETION TIME GUARANTEEDEFECT LIABILITYFUNCTIONAL GUARANTEESPATENT INDEMNITYLIMITATION OF LIABILITYLOSS OF OR DAMAGE TO PROPERTY; ACCIDENT, INJURY ETC.INSURANCE2121CONDITIONS OF CONTRACT-IMPORTANT PROVISIONSCHANGES IN FACILITIESSUSPENSIONTERMINATION-FOR EMPLOYERS CONVENIENCECONTRACTORS DEFAULTBY CONTRACTORASSIGNMENTEXPORT RESTRICTIONSDISPUTES AND ARBITRATIONDRBADJUDICATOR [BD FOR SUPPLY AND INSTALLATION] 2222IMPORTANT PROCUREMENT ASPECTSBORROWERS REQUIREMENTS AND PROCUREMENT STRATEGY-ARRANGEMENTSSPECIFICATIONS AND FUNCTIONAL GUARANTEESBIDDERS QUALIFICATIONS-PREQUALIFICATION PACKAGINGBID PRICES BID OPENING

2323IMPORTANT PROCUREMENT ASPECTSBID EVALUATIONSEQUENCE OF COMPLETION TAKING OVER AND OPERATIONAL ACCEPTANCE OF FACILITYPAYMENT TERMSBIDDERS COMPLAINTS

2424BORROWERS REQUIREMENTS AND PROCUREMENT STRATEGYARRANGEMENTSKEY FACTORS TO BE CONSIDERED AT PREPARATION AND APPRAISAL:BORROWERS NEED ASSESSMENT-FEASIBILITY STUDYSCOPE OF WORK GREEN FIELD OR UPGRADING OR REHABILITATION-IS INSTALLATION OR ONLY SUPERVISION OF INSTALLATION-SIZE-COST-NATURE-COMPLEXITY-REASONABLE COMPLETION TIME-NEED FOR EFFECTIVE COMPETITIONPAST EXPERIENCE OF IMPLEMENTING AGENCY IN HANDLING SUCH PROCUREMENTIN-HOUSE TECHNICAL EXPERTISE OF IMPLEMENTING AGENCY FOR PREPARATION OF SPECIFICATIONS, MANAGEMENT AND SUPERVISION OF CONTRACT-OPERATION OF THE PLANT-INSPECTION INCLUDING STAGE INSPECTION AT FACTORY OR NEED TO ENGAGE TECHNICAL EXPERT/FIRM NEED FOR TRAINING2525SPECIFICATIONS AND FUNCTIONAL GUARANTEESSOME IMPORTANT CONSIDERATIONS

SHOULD MEET PROJECT NEEDS

IS IT TOO DEMANDING OR REASONABLE HAS MARKET AVAILABILITY BEEN CHECKED?

IS IT TOO DETAILED DESIGN BASED-OR CONCEPTUAL OR PERFORMANCE BASED?

2626SPECIFICATIONS AND FUNCTIONAL GUARANTEESSOME IMPORTANT CONSIDERATIONS

DESIRABLE CHARACTERISTICS MAY INCLUDE E.G. MINIMUM GUARANTEED OUTPUT- PRODUCT QUALITY AND APPLICABLE STANDARDS-PLANT PERFORMANCE FACTORS -RELIABILITY-FUNCTIONAL GUARANTEES-PLANT AVAILABILITYOPERATIONAL FLEXIBILITY AND SUCH OTHER CRITERIA AS RELEVANT

2727SPECIFICATIONS AND FUNCTIONAL GUARANTEESSOME IMPORTANT CONSIDERATIONSDESIRABLE TO PROVIDE FOR COMPETITION BASED ON LIFE CYCLE COST AND TO SPECIFY RELATED TECHNICAL PARAMETERS E.G. ENGINEERING CALCULATION AND WHERE APPROPRIATE FORMULA TO DETERMINE MONETARY IMPACT FOR AN INCREASE OR DECREASE OF EFFICIENCY ABOVE OR BELOW THE MINIMUM REQUIRED OR IN COMPARISON WITH THE HIGHEST EFFICIENCY OFFERED BY ANY BIDDERDESIRABLE TO PROVIDE FUNCTIONAL GUARANTEES SUCH AS MINIMUM ACCEPTABLE PRODUCTION CAPACITY AND/OR MAXIMUM LEVELS OF CONSUMPTION OF RAW MATERIALS AND UTILITIES AND RESPECTIVE ENGINEERING CALCULATIONS FOR CLAIMING LIQUIDATED DAMAGES IN CASE OF FAILURE OF CONTRACTOR TO ACHIEVE CAPACITY SPECIFIED IN THE CONTRACTRATE OF LIQUIDATED DAMAGES SHOULD NOT BE LESS THAN THE RATE USED FOR PURPOSES OF BID EVALUATIONAGGREGATE LIQUIDATED DAMAGES GENERALLY MAY NOT EXCEED 10% OF THE TOTAL VALUE OF THE CONTRACT

2828LIFE CYCLE COST METHODSCOST TO OWN AND OPERATE ITEM DURING ITS USEFUL LIFEINITIAL PURCHASE PRICEADJUSTED FOR EXTRAS, DELIVERY, VARIATIONS IN PAYMENT TERM, ETC.VALUE OF ADJUSTMENTS ADDED TO BID PRICEOPERATING COST DURING LIFE OF ITEMFUEL, SPARE PARTS, MAINTENANCE, (X YEARS)ANNUAL COSTS DISCOUNTED TO NPVOWNERSHIP COST DURING LIFE OF ITEMECONOMICAL USEFUL LIFE (X YEARS)RESALE OR SCRAP VALUE DISCOUNTED TO NPV2929LIFE CYCLE COST METHODSEFFICIENCY COST METHODCAPITALIZE DIFFERENCES IN EFFICIENCY IN OPERATION OF ITEMS, i.e. Boiler, Turbine, Transformer, etc., DURING LIFEPRODUCTIVITY COST METHODDETERMINE LIFE CYCLE COST PER UNIT OF OUTPUT FOR COMPARISON PURPOSESLIFE CYCLE COST OF PLANT (X YEARS) NPV DIVIDED BY TOTAL UNIT OUTPUT OF PLANT

3030LIFE CYCLE COST METHODS EVALUATION USING LIFE CYCLE COSTING FOR THE PROCUREMENT OF A 500 MW COAL-FIRED POWER STATION BOILER COMPLEXBIDS WILL BE EVALUATED ON LIFE CYCLE PRINCIPLES BY EVALUATING THE INITIAL COST AND THE COST OF OPERATION OF THE PLANT OVER A PERIOD OF 20 YEARS. THE EVALUATION OF THE OPERATING COSTS WILL BE BASED ON THE CAPITALIZED COST FOR EACH PERCENT OF BOILER EFFICIENCY ABOVE THE MINIMUM ACCEPTABLE, AS SPECIFIED IN THE TECHNICAL SPECIFICATION, DISCOUNTED TO PRESENT VALUE AT A DISCOUNT RATE OF 10 PERCENT. THE EVALUATION WILL BE ON THE FOLLOWING NORMS:3131LIFE CYCLE COST METHODS EVALUATION USING LIFE CYCLE COSTING FOR THE PROCUREMENT OF A 500 MW COAL-FIRED POWER STATION BOILER COMPLEX1. BID PRICE FOR THE BOILER AND MANDATORY SPARES.2. PRICE FOR SPARES REQUIRED FOR THE FIRST FIVE YEARS OF OPERATIONS, CAPITALIZED TO PRESENT VALUE AT 10 PERCENT DISCOUNT.3. ADJUSTMENTS TO BID PRICE FOR OMISSIONS, DEVIATION AND EXCEPTIONS TO TECHNICAL AND COMMERCIAL CONDITIONS IN THE BIDDING DOCUMENTS.4. CAPITALIZED COST SAVINGS FOR BOILER EFFICIENCY AT THE RATE OF US$500,000 PER EACH 0.1 PERCENT ABOVE 80 PERCENT.5. CAPITALIZED COST FOR THE AUXILIARY POWER CONSUMPTION AT US$2,000 PER KW.

3232LIFE CYCLE COST METHODS EVALUATION USING LIFE CYCLE COSTING FOR THE PROCUREMENT OF A 500 MW COAL-FIRED POWER STATION BOILER COMPLEXALL FIGURES IN USD (IN THOUSANDS) 1. INITIAL COSTS A CTOTAL QUOTED PRICE, INCLUDING 185,000 200,000 MANDATORY SPARES2. ADJUSTMENTS (A)FOR OMISSIONS IN MANDATORY 3,000--- SPARES (B)COMMERCIAL EXCEPTIONS 15,500 12,000 (delivery, payment terms) (C)TECHNICAL EXCEPTIONS 28,000 24,000 (omission of equipment, capacity shortage, etc.)INITIAL COST 231,500 236,0003333LIFE CYCLE COST METHODS EVALUATION USING LIFE CYCLE COSTING FOR THE PROCUREMENT OF A 500 MW COAL-FIRED POWER STATION BOILER COMPLEXALL FIGURES IN USD (IN THOUSANDS) 3. ADJUSTMENTS FOR A C FOLLOW-ON COSTS (A)CAPITALIZED COST OF SPARES40,000 28,000 FOR FIVE YEARS (B) CAPITALIZED COST SAVING-12,000 -18,000 FOR HIGHER EFFICIENCY( C) CAPITALIZED COST OF AUXILIARY 5,000 7,000 POWER CONSUMPTIONTOTAL ADJUSTMENT FOR 33,000 17,000FOLLOW-ON COST4. TOTAL EVALUATED COST ON 264,500 253,000 LCC PRINCIPLES RANKING 21

3434LIFE CYCLE COST METHODSBID EVALUATION USING LIFE CYCLE COSTINGOIL PALM PLANT

THE EVALUATION AND COMPARISON OF RESPONSIVE BIDS SHALL BE BASED ON THE TOTAL LIFE CYCLE COST FOR SIX YEARS, PER UNIT OF OUTPUT. THE LIFE CYCLE COST SHALL BE THE SUM OF THE INITIAL PURCHASE PRICE OF THE PLANT AND THE COST OF OPERATION IN ELECTRIC ENERGY FOR SIX YEARS OF OPERATION OF A UNIT COST OF US$0.10 PER KWH, DISCOUNTED TO PRESENT VALUE AT 12 PERCENT.

3535LIFE CYCLE COST METHODSBID EVALUATION AND COMPARISONALL FIGURES IN USD (IN THOUSANDS) A B1. INITIAL COST9,500 10,3002. OPERATING COST PER YEAR (1,200) (1,000)OPERATING COST FOR 6 YEARS 4,933 4,111 NPV AT 12 PERCENT3. TOTAL LIFE CYCLE COST 14,433 14,4114. OUTPUT PER YEAR (TONS) 3,600 4,0005. EVALUATED COST PER TON OF OUTPUT 4.01 3.606. RANKING 2 1 A-12 MILLION KWH @ .10 PER KWH B-10 MILLION KWH @ .10 PER KWH

3636BIDDERS QUALIFICATIONS-PREQUALIFICATION QUALIFICATION AND EXPERIENCE REQUIREMENTS WILL DEPEND ON NATURE AND COMPLEXITYSHOULD NOT BE SET TOO HIGH OR TOO MANY KEEP IN VIEW INDUSTRY PRACTICES FOR CONSTRUCTION OF REQUIRED FACILITIES IN DESIGNING MINIMUM QUALIFICATION CRITERIASPECIFY RELEVANT AND REASONABLE MINIMUM CRITERIA FOR BIDDERS TECHNICAL CAPABILITY, FINANCIAL RESOURCES AND PAST EXPERIENCE INCLUDING THAT REQUIRED FOR MANUFACTURERS AND SUBCONTRACTORS OF CRITICAL ITEMS INCLUDE STANDARD FORM OF MANUFACTURERS AUTHORIZATION (NOT IN SBD FOR S&I) 3737BIDDERS QUALIFICATIONS-PREQUALIFICATION DECIDE EARLY ON PREQUALIFICATION AT PREPARATION OR APPRAISAL GIVEN LARGE VALUE AND COMPLEXITY, COST OF PREPARING BIDS BEING HIGH, TO SOLICIT INTEREST OF QUALIFIED BIDDERS AND TO ASCERTAIN EXPECTED LEVEL OF COMPETITION, PREQUALIFICATION IS NORMALLY REQUIRED AND RECOMMENDEDIN CERTAIN CASES E.G. WHERE COST OF PREPARING BIDS IS NOT VERY HIGH OR OTHER JUSTIFIABLE REASONS E.G. URGENCY-- PREQUALIFICATION MAY BE OMITTED IN A TWO STAGE BIDDINGFOLLOW ALL STANDARD RULES AND PROCEDURES FOR PREQUALIFICATION AS PER GUIDELINES AND STANDARD PREQUALIFICATION DOCUMENT 3838BIDDERS QUALIFICATIONS-PREQUALIFICATION MAIN CRITERIAGENERAL EXPERIENCE SPECIFIC EXPERIENCE IN CONSTRUCTION OF SIMILAR FACILITIES HOW MANY AND HOW FAR BACK IN TIME HAVING SUCCESSFULLY COMPLETED? ANY OTHER SPECIFIC WORK EXPERIENCE UNIQUE TO PROCUREMENT IN QUESTIONMANUFACTURERS AUTHORIZATION FOR MAJOR ITEMS NOT MANUFACTURED BY CONTRACTOR AND/OR OTHER RELEVANT DOCUMENTS SUCH AS LICENSING AGREEMENTS WITH MANUFACTURERSMINIMUM QUALIFICATION REQUIREMENT FOR MAJOR ITEMS INCLUDING THOSE PERMITTED OR LIKELY TO BE OFFERED BY SUBCONTRACTORSIF LONG TERM OPERATION AND/OR MAINTENANCE SERVICES ARE REQUIRED THEN DEMONSTRATED EXPERIENCE FOR SUCH SERVICES OVER A PERIOD OF TIMEFINANCIAL RESOURCESAVERAGE CONSTRUCTION TURNOVER INCLUSIVE OF INSTALLATION AND OTHER SERVICES AND CASH FLOW PERSONNEL AND EQUIPMENT IS CHECKED AT PRICE BID STAGE

3939PACKAGINGIMPORTANT CONSIDERATIONSOTHER FINANCIERS-- PARALLEL OR JOINT FINANCING AGREE ON BIDDING AND REVIEW PROCEDURESTO THE EXTENT PRACTICAL PACKAGING SHOULD BE SUCH THAT MANUFACTURERS OF MAJOR PLANT AND EQUIPMENT FOR FACILITY WOULD BE ABLE TO PARTICIPATE BY OBTAINING ITEMS THEY DO NOT MANUFACTURE FROM OTHER SOURCES ESPECIALLY IF OUTSOURCED ITEMS DO NOT BELONG TO A DIFFERENT CLASS OF INDUSTRY WHERE A SEPARATE PACKING WOULD BE TECHNICALLY FEASIBLEVERY LARGE PACKAGES MAY REDUCE COMPETITION DUE TO CAPACITY LIMITATIONS

4040BID PRICESBID PRICES SHALL BE INVITED AS FOLLOWS: (SCHEDULES OF RATES AND PRICES IN SBD)SCHEDULE 1-CIP FOR PLANT AND MANDATORY SPARES SUPPLIED FROM ABROADSCHEDULE 2-EXW FOR PLANT AND MANDATORY SPARES SUPPLIED FROM WITHIN EMPLOYERS COUNTRYSCHEDULE 3-DESIGN SERVICES SCHEDULE 4-INSTALLATION AND OTHER SERVICES [OTHER SERVICES TO INCLUDE TRANSPORTATION, INSURANCE, TEMPORARY WORKS, OTHER CIVIL WORKS, OPERATION AND MAINTENANCE SERVICES, TRAINING, ETC. INCLUDING ALL TAXES AND DUTIES ON SUCH SERVICES]SCHEDULE 5-GRAND SUMMARY TOTAL OF SCHEDULES 1 TO 4SCHEDULE 6-BIDDERS RECOMMENDED SPARE PARTS [NOT TO BE INCLUDED FOR BID EVALUATION]4141BID OPENINGALL BID OPENING WHETHER SINGLE OR TWO STAGE BIDDING ARE PUBLIC BID OPENINGSTRICTLY FOLLOW THE RULES IN THE BIDDING DOCUMENTS AND OPEN BIDS ACCORDINGLY AT THE DESIGNATED PLACE AND AT THE SPECIFIED TIME AND DATEGOOD PRACTICE IS TO ALSO READ ALOUDOPERATING COSTS WHERE APPLICABLEFUNCTIONAL AND OTHER GUARANTEE PARAMETERS AND EFFICIENCIES OFFERED BY BIDDERS 4242BID EVALUATIONSINGLE STAGEDETERMINATION OF SUBSTANTIAL RESPONSIVENESS

NON-MATERIAL NON-CONFORMITIES

ARITHMETICAL CORRECTIONS

CONVERSION TO SINGLE CURRENCY (USUALLY USING DATE OF BID OPENING TO BE SPECIFIED IN BD) NO DOMESTIC PREFERENCE APPLIES

4343BID EVALUATION-CONTINUEDSINGLE STAGE BIDDING TECHNICAL EVALUATION MEETS MINIMUM ACCEPTABLE STANDARDS AND PARAMETERS OF BD?MEETS FUNCTIONAL GUARANTEES AS PER BD?SUITABILITY IN TERMS OF ENVIRONMENTAL AND CLIMATIC CONDITIONS SPECIFIED IN BD?IF THE BID DOES NOT MEET MINIMUM ACCEPTABLE STANDARDS OF COMPLETENESS, CONSISTENCY AND DETAILS AND SPECIFIED MINIMUM (OR MAXIMUM, IF APPLICABLE) REQUIREMENTS FOR FUNCTIONAL GUARANTEES THE BID WILL BE REJECTED AS NON-RESPONSIVE NO CLARIFICATIONS CAN BE ASKED OR PERMITTED THAT WILL CHANGE THE SUBSTANCE OR PRICE OF THE BIDALTERNATIVE BIDS IF ALLOWED IN BD IT WILL BE EVALUATED

4444BID EVALUATION-CONTINUEDSINGLE STAGEECONOMIC EVALUATION BID PRICE EXCLUDING PROVISIONAL SUM AND CONTINGENCY IN PRICE SCHEDULESADJUSTED FOR ARITHMETICAL CORRECTIONSADJUSTED FOR DISCOUNTSADJUSTMENT FOR QUANTIFIABLE NONMATERIAL NONCONFORMITIES CONVERSION TO SINGLE CURRENCYANY OTHER EVALUATION FACTORS AS PER SECTION III OF THE BDPRICE ADJUSTMENT AS ALLOWED UNDER PRICE ADJUSTMENT CLAUSE OF THE CONDITIONS OF CONTRACT IS NOT TAKEN INTO ACCOUNTAWARD WILL BE MADE TO THE LOWEST EVALUATED BIDDER DETERMINED QUALIFIED AS PER SPECIFIED CRITERIA4545BID EVALUATION-CONTINUEDTWO STAGE BIDDINGFIRST STAGE TECHNICAL EVALUATION CHECK FOR COMPLETENESS IF GENERALLY IN ORDERBIDS FOUND NON-RESPONSIVE OR NOT MEETING THE MINIMUM LEVELS OF PERFORMANCE OR OTHER CRITERIA OF THE BD WILL BE REJECTEDPRELIMINARY EXAMINATION OF ALTERNATIVE BIDSDETAILED TECHNICAL AND COMMERCIAL EVALUATION WILL BE CARRIED OUT FOR REMAINING BIDS THAT PASSED THE TEST OF SUBSTANTIAL RESPONSIVENESS

4646BID EVALUATION-CONTINUEDTWO STAGE BIDDINGFIRST STAGE TECHNICAL EVALUATION CLARIFICATION OF FIRST STAGE TECHNICAL PROPOSALS EMPLOYER MAY HOLD CLARIFICATION MEETINGS WITH BIDDERS ONE ON ONE AND ALSO ASK IN WRITINGBIDDERS WILL BE INFORMED ANY AMENDMENTS OR CHANGES THAT THEY SHOULD MAKE IN THEIR TECHNICAL PROPOSALS AND ALSO ANY UNACCEPTABLE COMMERCIAL DEVIATIONS THAT SHOULD BE WITHDRAWN AT THE SECOND STAGE SUBMISSIONEMPLOYER MAY ISSUE AN AMENDMENT TO BD EMPLOYER WILL ISSUE TO EACH BIDDER A MEMORANDUM CHANGES REQUIRED PURSUANT TO FIRST STAGE EVALUATION GOOD PRACTICE IS THAT MEMORANDUM IS SIGNED BY BOTH PARTIES

4747BID EVALUATION-CONTINUEDTWO STAGE BIDDINGSECOND STAGE BID EVALUATION BID IS DETERMINE SUBSTANTIAL RESPONSIVE IF IT HAS PROPERLY INCORPORATED ALL MODIFICATIONS LISTED IN MEMORANDUM CHANGES REQUIRED PURSUANT TO FIRST STAGE EVALUATION WITHOUT ANY MATERIAL DEVIATIONS, RESERVATIONS OR OMISSIONS

SECOND STAGE BID CONTAINING TECHNICAL OR COMMERCIAL ALTERNATIVES NOT SUBMITTED AS PART OF FIRST STAGE TECHNICAL PROPOSAL WILL BE TREATED AS NON-RESPONSIVE

REST OF THE BID EVALUATION AND AWARD PROCEDURES IS SIMILAR TO SINGLE STAGE BIDDING

4848SEQUENCE OF COMPLETION TAKING OVER AND OPERATIONAL ACCEPTANCE OF FACILITYFLOW CHART (ATTACHED)PLANT PHYSICALLY AND STRUCTURALLY COMPLETEDPRE-COMMISSIONINGCOMPLETION CERTIFICATE IS ISSUEDEMPLOYER TAKES OVER AND RESPONSIBLE FOR CARE AND CUSTODYCOMMISSIONING AND/OR GUARANTEE TESTSOPERATIONAL ACCEPTANCEDEFECT LIABILITY PERIOD STARTS AT COMPLETION OF FACILITY4949

Flow Chart5050TERMS OF PAYMENT SUPPLY ITEMS10% ADVANCE80% UPON SHIPMENT(CIP)/DELIVERY TO CARRIER (EXW)5% ISSUE OF COMPLETION CERTIFICATE5% ISSUE OF OPERATIONAL ACCEPTANCE CERTIFICATEDESIGN SERVICES10% ADVANCE90% PRORATEINSTALLATION SERVICES10% ADVANCE80% UPON INSTALLATION WORK PERFORMED 5% ISSUE OF COMPLETION CERTIFICATE5% ISSUE OF OPERATION ACCEPTANCE CERTIFICATE

5151BIDDERS COMPLAINTSTAKE ALL COMPLAINTS SERIOUSLYENTER IN COMPLAINT DATA BASEREPORT TO RPM AND OPRC FOR CASES REQUIRING OPRC APPROVALOBTAIN BORROWERS CLARIFICATIONS AND ENSURE THAT BANKS NO-OBJECTION IS GIVEN ONLY AFTER ALL ISSUES RAISED HAVE BEEN ADDRESSED SATISFACTORILYREPORT TO RPM/INT IN CASES OF FRAUD OR CORRUPTION ALLEGATIONSBEFORE SUGGESTING DEBRIEFING CONSULT RPM5252Differences among Goods, Works and Design Supply & InstallationGoodsWorksDesign Supply and InstallSINGLE STAGE BIDDINGSINGLE STAGE BIDDING

SINGLE AND TWO-STAGE BIDDINGCONTRACT FOR SPECIFIC QUANTITY OF EACH ITEM CONTRACT FOR ESTIMATED QUANTITY OF EACH ITEM CONTRACT FOR SPECIFIC QUANTITY OF EACH ITEMCONTRACT DOES NOT PROVIDE FOR VARIATIONS IN QUANTITYCONTRACT PROVIDES FOR VARIATION IN QUANTITY WHICH IS COMMON (VARIATION ORDER) CONTRACT PROVIDES FOR CHANGES IN FACILITIESBID EVALUATION EXCLUDING TAXES AND DUTIES BID EVALUATION INCLUSIVE OF ALL TAXES AND DUTIESBID EVALUATION EXCLUDES TAXES AND DUTIES FOR SUPPLY ITEMS BUT INCLUDES FOR OTHER SERVICES5353Differences among Goods, Works and Design Supply & InstallationGoodsWorksDesign Supply and InstallTYPE OF CONTRACT CONTRACT FOR SALE

ADMEASUREMENT TYPE OF CONTRACT

MIX OF PROVISIONS OF BOTH GOODS AND WORKS

PRICE ADJUSTMENT CLAUSE EXCLUDES PAYMENT OF ADVANCEPRICE ADJUSTMENT CLAUSE APPLIES FOR TOTAL VALUE OF CONTRACT

PRICE ADJUSTMENT CLAUSE EXCLUDES ADVANCE PAYMENTS

COMMISSIONING IS NOT APPLICABLECOMMISSIONING IS NOT APPLICABLE COMMISSIONING REQUIRED BORROWERS MAY APPLY DOMESTIC PREFERENCE IN ICBELIGIBLE COUNTRIES MAY APPLY DOMESTIC PREFERENCE IN ICBDOMESTIC PREFERENCE IS NOT ALLOWED5454WATCH LIST TO AVOID COMMON PROBLEMSDO IMPLEMENTING AGENCIES HAVE REQUIRED TECHNICAL EXPERTISE I) TO PREPARE SPECIFICATIONS THAT WILL MEET THE PROJECT NEEDS AND ALSO ENSURE BROADEST POSSIBLE COMPETITION AND TO EVALUATE TECHNICAL PROPOSALS WHEN RECEIVED; AND II) FOR INSPECTION AND SUPERVISION OF CONTRACT DURING IMPLEMENTATION? IF NOT LET CONSULTANT (S) BE HIRED

DO BANK TASK TEAMS HAVE REQUIRED TECHNICAL EXPERTISE I)TO REVIEW WHETHER BORROWERS SPECIFICATIONS ARE CORRECT, REASONABLE, UNAMBIGUOUS, FREE FROM ANY BIASES AND WILL MEET PROJECT NEEDS; AND II) TO SUPERVISE TECHNICAL ASPECTS ARISING DURING BID EVALUATION AND CONTRACT IMPLEMENTATION? IF NOT ENGAGE EXTERNAL EXPERT

PLAN ADVANCE PROCUREMENT ACTION AND DECIDE EARLY ABOUT BIDDING STRATEGY PRIOR REVIEW MINUTES OF PRE-BID MEETINGS AND CLARIFICATIONS PROVIDED BY BORROWERS AT BID PREPARATION STAGE 5555WATCH LIST TO AVOID COMMON PROBLEMSTRAIN AND FAMILIARIZE BORROWER AND THEIR CONSULTANTS ABOUT BANK GUIDELINES AND BIDDING DOCUMENTSEMPLOYER SHOULD DESIGN SIMPLIFIED AND REASONABLE QUALIFICATION REQUIREMENTSPARTICULAR ATTENTION TO PRICE SCHEDULES ESPECIALLY OTHER SERVICES AND CIVIL WORKS TO BE QUOTED ON LUMP-SUM BASIS CAREFULLY REVIEW REASONS FOR REJECTION OF LOW BIDS IN A TWO STAGE BIDDING REVIEW CAREFULLY THE FIRST STAGE TECHNICAL EVALUATION REPORT AS MANY PROBLEMS ARISE DUE TO REJECTION OF POTENTIALLY RESPONSIVE BIDS BEFORE MOVING FROM FIRST STAGE TO THE SECOND STAGE ENSURE BORROWER HAS CONSIDERED AND OBTAINED CLARIFICATIONS ON ALL COMMERCIAL AND TECHNICAL ASPECTS OF THE BID AND EACH BIDDER WAS INFORMED BY MOU ALL COMMERCIAL RESERVATIONS THAT NEED TO BE WITHDRAWN AND AMENDMENTS TO MADE IN THEIR TECHNICAL SPECIFICATIONS WHILE SUBMITTING FINAL SECOND STAGE BID CONTAINING UPDATED TECHNICAL SPECIFICATIONS AND PRICE5656WATCH LIST TO AVOID COMMON PROBLEMSWATCH FOR INTERNAL INCONSISTENCIES IN TECHNICAL AND FINANCIAL PROPOSALS OF BIDDERSCAREFULLY CHECK OPERATIONAL AND MAINTENANCE COST AS THEY REPRESENT A SIGNIFICANT PROPORTION BY VALUE FOR EVALUATION PURPOSESCAREFULLY ADDRESS DEVIATIONS IN BIDS AS BIDDERS USE TRICKY LANGUAGES WHICH MAY HAVE DIFFERENT INTERPRETATIONS --CONSULT RPM AND LEGAL IF NECESSARYPRIOR REVIEW DRAFT CONTRACTS ESPECIALLY OF HIGH VALUE AND IF BID EVALUATION WAS COMPLEX AND BORROWERS PROPOSALS WERE QUESTIONED IN THE FIRST REVIEWCONTRACT SIGNED SHOULD BE CONSISTENT WITH BID SUBMITTED AND THE FORM OF CONTRACT ATTACHED TO THE BIDDING DOCUMENTBORROWERS TO BE CAREFUL IN TAKING OVER OF PLANT AFTER COMPLETION CERTIFICATE AND IF MAJOR DEFICIENCIES REMAIN COMPLETION CERTIFICATE SHOULD NOT BE ISSUED

5757WATCH LIST TO AVOID COMMON PROBLEMS ISSUES CONCERNING CONFLICT OF INTEREST AND ELIGIBILITY DO ARISE QUITE OFTEN AND SHOULD BE HANDLED WITH GREAT CARE --BEFORE CONCLUDING BANKS POSITION AT PRE-OR POST BID STAGE RPM/OPCPR OR OTHER SENIOR PROCUREMENT STAFF AND/OR LEGAL SHOULD BE CONSULTEDCONTRACT DISPUTE REVIEW MECHANISM SHOULD BE OPERATIONAL AS SOON AS POSSIBLE (DRB OR ADJUDICATOR)PROMPTLY REVIEW ALL ASPECTS OF ANY COMPLAINT FROM BIDDERS BORROWERS SHOULD USE BANKS SAMPLE EVALUATION FORM AND PROVIDE ANY ADDITIONAL INFORMATION AS APPROPRIATEBORROWERS SHOULD AVOID DELAYS IN BID EVALUATION AND AWARD OF CONTRACTS LIKEWISE BANK SHOULD REVIEW AND RESPOND PROMPTLY AS PER BANKS SERVICE STANDARDS

5858DESIGN, SUPPLY AND INSTALLATION THANK YOU FOR YOUR ATTENTIONSunil Bhattacharya5959