05a-Engineering Contracts in Pakistan- FIDIC and PEC

Lecture 5: “Engineering Contracts in PakistanFIDIC & PEC Contract Clauses ”

Prof. Rizwan Farooqui 1

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FIDIC

Federation Internationale Internationale des des Ingenieurs- Counseils

GCC PARTI: 1987 reprinted in 1992 with further amendments Pakistan Standard Conditions of Contract (Civil), 1st Edition reprinted in July 1993 Standard Bidding Documents finalized by WAPDA in 1987 for use on medium sized contracts National Highway Authority Contract No. 1, Indus Highway Project (N-55) (International Federation of Consulting Engineers)

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Background of the PEC Documents:  

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Asian Development Bank-Sample Bidding Documents World Bank Standard Bidding DocumentsProcurement of Works May 2005 (based on FIDIC 99 Second Edition) Harmonized with PPRA Rules, 2004 Notified by Planning Commission, PPRA and PEC as the only country document

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Salient Features of the PEC Documents:   

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Framework document including all ingredients Instruction to users for guidance The General Conditions of Contract and Particular Conditions of Contract prepared by the PEC (PEC varied FIDIC Provisions) should be retained as such. Any amendment in the Particular Conditions of Contract can be made by the users only as indicated by the PEC in Para E or within the Particular Conditions of Contract.

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1 Instructions to Bidders. 2. Bidding Data. 3. General Conditions of Contract, Part-I (GCC). 4. Particular Conditions of Contract, Part-II (PCC). 5. Specifications Specifications - Special Provis Provisions. ions. 6. Specifications Specifications - Technical Provisi Provisions. ons. 7. Form of Bid & Appendices to Bid. 8. Sample Bill of Quantities. 9. Form of Bid Security. 10. Form of Agreement. 11. Form of Performance Security/Bond & Mobilization Advance Guarantee/Bond. 12. Drawings.

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The user is required to prepare the following for completion of the Bidding Documents: (i) Particular Conditions of Contract. (ii) Specificat Specifications ions - Special Special Provisions. Provisions. (iii) Specifications - Technical Provisions. (iv) Bill of Quantities. (v) Drawings.

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Carefully read the Instructions as check list Part Part – I of GCC to remain remain unchan unchanged ged Amendments Amendments in Part Part – II are guide guided d Any amendment amendment in Part Part – II shall shall not alter the spirit of the documents All the spaces to be filled in and instructions within parenthesis to be deleted appropriately Instructions to Bidders and Bidding Data may not form part of the contract 7

Publication

in the newspapers, PEC & PPRA

Website. Time for preparation & submission of bids may range from 42 to 154 days depending on the size of the Works. Non-refundable fee of Bidding Documents should be nominal. Security, 1% to 3% of the Bid Price. Bid Security,

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Item – 2 calls for PEC PEC license license and pre-qualific pre-qualification ation / enlisting requirement (IB-3)  Blank spaces for the following to be filled by employer: Name of employer, funding detail, name of project and brief project descriptions Employer’s mailing address Bid Security amount; delivery address; hours and date; time for bid opening on same date 

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Bidding Data will not be part of the Contract and will cease to have effect once the contract is signed. The period of bid validity may range from 56 to 182 days depending upon the size of the Works, as decided by the Employer.

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No change required Notes on Bidding Data will be deleted Instructions in parenthesis only will be deleted In case of conflict , the information in Bidding Data will supersede those those of the Instructions to Bidders Documents comprising the bid are listed in IB-7 Other than ITB, GCC and Forms; all other items in IB-7 to be prepared/reviewed by the employer 24

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Instructions to fill Bidding Data are as under: 1.1 1. 1 Name Name and and addr addres ess s of of the the Empl Employ oyer er:: [Name of the Employer and his representative complete with address, tele, fax, etc.] 1.1 1. 1 Name Name of the the Pro Proje ject ct & Su Summ mmar ary y of of the the Works: [Insert brief summary, including relationship to other contracts under under the Project. If the Works are to be tendered in separate contracts, describe all the contracts.]

2.1

2.1 2. 1

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Name of the Borrower/Source of Financing/ Funding Agency: [Insert name of Borrower and statement of relationship relati onship with the Employer, Employer, if different from the Borrower Amou Amoun nt and and type of finan inanc cing ing :

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Time limit for clarification: [Minimum number of days to seek clarification by the prospective bidder may be inserted as 28 days.] 10.1 Bid language: [The same language in which the Bidding Documents are written. English, should be used in National/ International Competitive Bidding.] 8.1

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11.1(b)

Prequalification Information to be updated: [Indicate what items of information submitted with application for prequalific prequalification ation is to be update updated. d. It may include: Evidence of access to financial resources, works awarded during the interim period, availability of essential critical equipment etc.]

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11.1(c)

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Furnish Technical Proposal: [The bidder to submit a technical proposal in sufficient detail to demonstrate the adequacy of the bid in meeting requirements for timely completion of the Works.] Works.] Currencies of Bid and Payment:

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Period of Bid validity: [Insert number of days after the deadline for Bid submission. Normally the validity period should not exceed 182 days.] 15.1 15.1 Amou Amount nt of Bid Bid Se Secu curi rity ty:: [This amount should be the same as also al so quoted in the Invitation for Bids. A fixed sum is advisable with 1 to 3% of engineers estimate] 14.1

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Venue, Venue, time, and a nd date of the Pre-Bid meeting: [Insert address of venue, or indicate that the meeting will not take place. The meeting should take place not later than four weeks before the deadline for Bid submission. It should take place concurrently with the Site visit, if any(see any (see Sub-Clause IB-6).] 18.4 18.4 Numbe Numberr of copie copies s of the the Bid Bid to be comp complet leted ed and returned: [Usually one original and two copies] 17.1

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19.2 19.2(a (a))

Empl Employ oyer er's 's addr addres ess s for for the the purp purpos ose e of of Bid submission: [Should match the receiving address provided in the Invitation for Bids.]

19.2 19.2(b (b))

Name ame and and Numb Numbe er of the the Con ontr trac act: t: [Name and Contract Number, if any]

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20.1 20.1(a (a))

23.1

Dea eadl dlin ine e for for sub submiss missio ion n of of bid bids s: [The time and date should be the same as that given in the Invitation for Bids] Venue, time, and date of Bid opening: [Date should be the same as that given for the deadline in Invitation for Bids but time for opening of bids shall be at least thirty minutes after the time for the deadline for submission of bids]. 33

32.1 32.1 Stan Standa dard rd form form and and amou amount nt of Performance Security acceptable to the Employer: [Select the kind of Performance Performance Security (bank guarantee and / or insurance bond), and indicate the amount. An amount equal to 10 percent of the Contract Price is commonly specified for bank guarantees, which %age should match with that stipulated in Appendix-A Appendix-A to Bid] 34

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1. Form of Bid - only Bid Reference Reference to be provided provided by Employer 2. All other blank spaces shall be fill ed by the Bidder 3. The amount of the Liquidated Damages for each day of delay i n

completion of the whole of the Works, or if applicable for any Section thereof, thereof, shall be a sum equal to 10 % of the likely cost of the Works divided by one-fourth of the number of days specified as completion time. 4. Bidder must sign and stamp Form of Bid appropriately

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1.

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5.

GC 23.2; ��. 500,000

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GC 43.1 & 48.2, 36.4

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�) A�� L�� D�� = ��. �� 10% �� C�� L�� A��. �) A�� B�� = ��. �� 5% �� C�� L�� A��. A��.

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GC 47.3

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GC 47.3; 364

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GC 60.2

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Stamp “Not Used” if no foreign currency payment foreseen If F.C payment foreseen, blank spaces in Appendix-B Appendix-B to be filled in by Bidder (IB-13.1) Exchange Rate TT&OD Selling Rates published or authorized by SBP 28 days prior to Bid (IB-13.2) Percentage and type of F.C without Provisional Sums Equivalent Rupees on the Exchange Rate 39

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Data to be filled in accordingly Modify sub-clauses 72.2 & 72.3 of GCC in PCC accordingly if, exchange exchange rate for payment is different and payment of Provisional sums in F.C

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To be filled in by Employer Employer may add/delete/modify elements according to project need Federal Federal Bureau of Statistics indices apply where, available PICC Construction Cost Data will be referred in updated PEC documents Appendix-C Appendix-C should be read with Formula under sub-clause 70.1 PCC Weightages eightages or coefficien coefficients ts to be prepared prepared on rate analysis for project to project 41

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Price Adjustment apply for any a ny contract having Contract Price more than the ceiling amount for a C-5 License. Only contracts having duration of six months or or more should be liable to price adjustment. Employer to determine the weightage of Fixed Portion considering only those cost elements having cost impact of seven (7) percent or more on his specific project. A bidder can submit weightages and source of indices if they differ with Appendix-C; subject to approval by Engineer [70.1(c) PCC] 42

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Given bills are example only PICC (Pakistan Institute of Cost & Contracts) provided latest formats to include a General/ preliminary Chapter. Employer should prepare various bills leaving blank spaces for rates and totals (refer to examples) Reasonable accuracy in quantity estimate required to avoid cost overruns, Price Adjustment accuracy etc. 43

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Construction Schedule to be provided by the bidder in prescribed manner Completion by parts/section shall be distinctly identified by separate Schedule Sheets to be attached as necessary Sub-clauses 43.1 & 48 of GCC to be referred Clause 43.1: completion part or whole of the works within scheduled time (Clause-48) or extended time (Clause-44) 44

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Bidder to submit these information Organization chart of personnel for various activities Mobilization Plan/Facilities be provided Method of executing the work etc

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To be filled in by Bidder In three categories - owned - To be be purchas purchased ed - To be arrange arranged d on Lease

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To be submitted by Bidder Sub-clause 34(labor, staff, camp by Contractor at his own cost and responsibility) of GCC apply Site Preparation Provision of services Construction facilities Construction equipment assembly Security Services etc

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To be submitted by the bidder Name of sub-contractors for each part of the work Profile of the sub-contractors to be submitted PEC license for the sub-contractors to be provided where applicable

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To be submitted by the bidder Quarterly estimates based on his Programme of works Rates in BOQS In Pakistani Rupees

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To be submitted by bidder for Supervisory staff Labor

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To be signed and stamped by the bidder Name of the bidder is to be filled in in Made mandatory under Prime Minister’s directive and PPRA Rules Punitive action against non-compliance stipulated under Clause 74.1 PCC

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Bid Security IB-15 Form of Performance Security Insurance guarantee for Bid and Performance to be tailored accordingly Form of Contract Agreement Mobilization Advance Guarantee

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FIDIC Conditions of Contract 

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FIDIC- Federation Federation Internationale des IngenieursCounseils (International Federation of Consulting Engineers) Head Quarters based in Geneva Currently 75 countries are members of FIDIC In Pakistan ACEP is the member of FIDIC FIDIC documents can be accessed through FIDIC website Original FIDIC document require to be attached with FIDIC documents 53

FIDIC Conditions of Contract FIDIC GCC cannot be changed but a provision in GCC can be amended in PCC  PEC Bidding/ Contract documents is based on FIDIC 1987 (fourth edition) reprinted in 1992.  PEC obtained permission from FIDIC Geneva for incorporating FIDIC COC in PEC Documents  FIDIC 1987 reprinted in 1992 contains 72 Clauses and 194 Sub-Clauses FIDIC 1999 contains 20 Clauses Clauses and 163 subsub- Clauses  FIDIC  Addition of Dispute Board in FIDIC 1999 is one of the added feature 

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FIDIC Conditions of Contract  

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PEC while updated their Bidding documents incorporated some of the FIDIC 1999 provisions in PCC In PEC Bidding Documents Notified in 2002 there were three parts of the Condition of Contracts but in 2008 it contain only 2 parts GCC & PCC PEC varied required GCC Clauses in PCC which are Notified as Country Regulation and left a few items identified in the document for the users to make change.

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FIDIC Conditions of Contract: 20 Clauses          

General provisions The employer The engineer The contractor Nominated subcontractors Staff and labor Plant, materials and workmanship Commencement, delays and suspension Tests on completion Employer’s taking over 56

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FIDIC Conditions of Contract: 20 Clauses          

Defects liability Measurements and evaluation Variation and adjustments Contract price and payment Termination by employer Suspension and termination by contractor Risk and responsibility Insurance Force majeure Claims, disputes and arbitration 57

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Change in GCC Guided in “Instructions to User of the Documents” and space/instructions provided in PCC In the PCC following are the spaces/instructions: 1.1(a)(i)Name and address of Employer 1.1(a)(iv)Name and address of o f the Engineer 2.1(b) Employer may further vary Engineer’ E ngineer’s s duties and authorities requiring employer’s approval 5.2(k)“any other” document document in priority of Contract Documents 58

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14.1 14.1 Employ Employer er to select select approp appropriat riate e (Bar chart chart)) 

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the Employer should specify the form in which the Programme is to be submitted by the Bidder, e.g., critical path network, simple bar chart or PERT. PERT.

21.1 Employer Employer may vary Insurance Insurance sub-claus sub-clause e 21.1(b) 54.3 54.3 Cust Custom oms s clea cleara ranc nce e - empl employ oyer er may may vary vary 60.12Financial Assistance to Contractor – Employer to select one of the three alternatives and delete the two 67.3 67.3 Arbi Arbitr trati ation on – plac place e of arbi arbitr trat ation ion to to be provided

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68.2 68.2 Notice Notice to Employ Employer er and Engine Engineer er – Names Names and addresses of Employer and the Engineer to be provided 70.1 70.1(b (b)) Pric Price e adju adjust stme ment nt form formul ula a – Ac Actu tual al formula to be prepared 73.2 73.2 Custo Customs ms Duty Duty & Taxes axes – Employ Employer er may may incorporate the provisions

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It can include information about:  Location of project  Site of works  Datum levels  Climate / Data  Utilities  Geology, Hydrology  Extent of work

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Description of Works Shop drawings Right to change Contractor’s responsibility Quality of Materials Use of Standards / Specifications Quality Control (QC) and Quality Assurance A ssurance (QA) Contract close-up

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Inspection / Tests Contract Schedule Layout of works / surveys Access to site Facilities by contractors Facilities by employer Environmental protection Lump Sum price breakdown Measurement / payment 63

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Specification shall be generic and shall not include references to brand names, model mo del numbers, catalogue numbers or similar classifications. General items Care and handling of water including dewatering Earthwork Sand and aggregates Cement Concrete in general Blinding concrete Reinforced concrete Reinforcement 64

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Stone pitching Canal lining Bored cast-in-situ RC piles Brickwork in general Gate equipment Miscellaneous works Reinforced Reinforced cement concrete railing Drainage under concrete lining of canal

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QUESTIONS?

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05a-Engineering Contracts in Pakistan- FIDIC and PEC

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