PROCUREMENT OF CONSULTING ENGINEERING SERVICES IN …
Transcript of PROCUREMENT OF CONSULTING ENGINEERING SERVICES IN …
PROCUREMENT OF
CONSULTING ENGINEERING SERVICES
IN THE CONSTRUCTION INDUSTRY
A Guide for
Consulting Engineering Firms
Published by CESA – Consulting Engineers South Africa
And
Endorsed by the CIDB – Construction Industry Development Board
August 2009
TABLE OF CONTENTS CHAPTER 1. INTRODUCTION .......................................................................................................................................... 4 CHAPTER 2. DEFINITIONS ............................................................................................................................................... 5 CHAPTER 3. PROJECT LIFE-CYCLE .............................................................................................................................. 8 3.1 Introduction ................................................................................................................... Error! Bookmark not defined. 3.2 Project life-cycle ............................................................................................................................................................ 8 CHAPTER 4. CONSULTING SERVICES ......................................................................................................................... 10 CHAPTER 5. PROCUREMENT OF CONSULTING SERVICES ..................................................................................... 11 5.1 Legal Environment for Procurement of Consulting Engineering Services .................................................................. 11 5.2 objectives of procurement ........................................................................................................................................... 13 5.3 Methods of Procurement ............................................................................................................................................ 14 5.4 CIDB’s Best Practice Guidelines: Competitive Selection ............................................................................................ 14 CHAPTER 6. SCOPE ....................................................................................................................................................... 16 6.1 planning, studies, investigations and assessments .................................................................................................... 16 6.2 SCOPE of services for normal project design stages ................................................................................................. 17 6.3 The Scope of Work ..................................................................................................................................................... 18 6.4 important considerations ............................................................................................................................................. 19 CHAPTER 7. TENDER DOCUMENTATION FOR CONSULTING ENGINEERING SERVICES ..................................... 21 7.1 Model for Uniformity .................................................................................................................................................... 21 7.2 Headings and Content of Component documents ........................................................ Error! Bookmark not defined. 7.3 Guidelines for compiling the documentation ............................................................................................................... 21 7.4 Points to note ................................................................................................................ Error! Bookmark not defined. CHAPTER 8. VALUE – ADDED SERVICES ................................................................................................................... 22 8.1 The Concepts of Financial Offer and Quality .............................................................................................................. 22 8.2 The Concept of Value ................................................................................................................................................. 24 8.3 Guidelines for pricing of Tenders ................................................................................................................................ 24 8.4 The Relevance of a Benchmark ................................................................................................................................. 27 8.5 The Multiplier .............................................................................................................................................................. 27 8.6 The Concept of “Value Bidding” .................................................................................................................................. 28 8.7 Points to Note ............................................................................................................................................................. 28 CHAPTER 9. EVALUATION OF TENDERS .................................................................................................................... 29 9.1 CIDB’s Best Practice Guidelines: Evaluation of Tenders ........................................................................................... 29 9.2 Stating the Evaluation Criteria .................................................................................................................................... 29 9.3 Recommended Approach – Evaluating Quality with Financial Offer .......................................................................... 29 9.4 Points to Note ............................................................................................................................................................. 31 9.5 Tables for the evaluation of tenders ........................................................................................................................... 33 CHAPTER 10. PERFORMANCE MONITORING ............................................................................................................... 45 10.1 Communication and Liaison ....................................................................................................................................... 45 10.2 Suggested Performance Monitoring and Evaluation Process .................................................................................... 45 10.3 Points to Note ............................................................................................................................................................. 46
CHAPTER 1. INTRODUCTION
“Consulting Engineers South Africa” (CESA) was established in 1952 as the South African Association of Consulting Engineers. Over the past six decades, as the construction industry and the consulting engineering profession have evolved, a great many methods by which clients procured the services of consulting engineers have been witnessed. This evolution continues today, having gained impetus as new democratic processes have come to the fore in South Africa.
This Guide reflects what is considered best practice today for Consulting Engineers – to appropriately respond to calls for consulting engineering services and to deliver these services in a true value–added context. It incorporates the requirements of all applicable legislation including the Construction Sector Charter published in terms of Section 9(1) of the BBBEE Act, 53 0f 2003.
The contents of this Guide focus on suggestions to Clients in requesting services and for Consulting Engineers in framing their responses to these requests. This has been done in order to better inform the procurement process.
The Guide has been prepared in collaboration with the Construction Industry Development Board (CIDB), whose own numerous publications and notes towards attaining best practice in the construction industry, and the procurement and use of professional service providers, are used as a framework. Wherever possible the terminology used in the Guide has been aligned to reflect the terminology and methodology contained in the CIDB documentation.
Subsequent to the abovementioned collaboration, the Guide has been formally recognised by the CIDB as follows:
“The CIDB wishes to acknowledge CESA for its efforts in the development of this manual that serves to provide guidelines to its members on construction procurement. We trust that this document will assist in providing direction and understanding of government’s legislative requirements for infrastructure delivery to CESA members, but is not a substitute for the CIDB construction procurement prescripts. The CIDB looks forward to further cooperation with CESA in the search for best practice and innovative delivery models to improve the rate of growth and development of the South African Construction Industry. ”
In addition to the Introduction and definitions, this manual has been laid out in the same order as the typical flow in the procurement process as follows:
CHAPTER 3. PROJECT LIFE‐CYCLE ‐An outline of the typical project life cycle as background.
CHAPTER 4. CONSULTING SERVICES ‐A description of typical consulting services that can be provided by consulting engineers.
CHAPTER 5. PROCUREMENT OF CONSULTING SERVICES ‐ Legislation and objectives of procuring consulting engineering services
CHAPTER 6. SCOPE ‐ An expanded description of various elements of scope.
CHAPTER 7. TENDER DOCUMENTATION FOR CONSULTING ENGINEERING SERVICES ‐ Guidelines for preparing tender documentation for CE services.
CHAPTER 8. VALUE – ADDED SERVICES ‐ An expansion on the issues surrounding value that is obtained through CE services and pricing for these services.
CHAPTER 9. EVALUATION OF TENDERS ‐ Guidelines on the evaluation of CE tenders for services.
CHAPTER 10. PERFORMANCE MONITORING ‐ Aspects related to monitoring CE services provision
CHAPTER 2. DEFINITIONS
Terminology used in this Manual has been chosen to reflect the terminology used by the CIDB, to facilitate cross‐referencing with CIDB documentation. Some of the more important changes are listed below: In most cases the definitions in this manual coincide with the definitions given in the latest Guideline Scope of Services and Tariff of Fees for Persons Registered in terms of the Engineering Profession Act, 2000 (Act No. 46 of 2000), as well as the Revised Standard for Uniformity in Construction Procurement, published in terms of the Construction Industry Development, Board Act, 2000 (Act No. 38 of 2000)
(i) “Bid” see tender below.
(ii) “Building Project” means a project comprising building work, together with its associated engineering work, where the engineer is subject to the authority of another professional acting as the Principal Agent while financial and administrative matters are dealt with by another professional.
(iii) “Client”, means any juristic person or organ of the State engaging a consulting engineer for services on a project.
(iv) “Construction monitoring” means the process of administering the construction contract and over‐seeing and/or inspecting the works, to the extent of the consulting engineer’s engagement, for the purpose of verification that the works are being completed in accordance with the requirements of the contract that the designs are being correctly interpreted and that appropriate construction techniques are being utilized. Construction monitoring, to whatever extent, shall not diminish the contractor’s responsibility for executing and completing the works in accordance with his contract.
(v) “Construction industry”, the broad conglomeration of industries and sectors which add value in the creation and maintenance of fixed assets within the built environment.
(vi) “Construction Procurement” means the invitation, tendering, award and carrying out of projects.
(vii) “Consulting engineer”, for purposes of these rules only, means any professional registered in terms of the Act, or a juristic person who employs such professional, engaged by a client on a project;
(viii) “Contract”, means the formal agreement between the client and the consulting engineer also called the Form of Agreement.
(ix) “Contract Data”, means the portion of the tender document that relates specifically to the Contract in question and includes all the applicable conditions and related data in respect of insurances, limits, durations and programme.
(x) “Contractor” means any person or a juristic person under contract to a client to perform the works or part of it on a project, including a subcontractor under contract to such contractor;
(xi) “cost of the works” means the total final amount (or a fair estimate thereof), exclusive of value added tax, certified or which would, normally, be certifiable for payment to contractors (irrespective of who actually carries out the works) in respect of the works designed, specified or administered by the consulting engineer, before deduction of liquidated damages or penalties, including –
‐ Escalation, assuming continuity of the project through to final completion. Where delays occur in the project cycle the client and consultant should come to an agreement on the escalation that will be applicable to various stages of services.
‐ a pro‐rata portion of all preliminary and general items applicable to the Works;(irrespective of who actually carries out the works) and
‐ the costs of new materials, goods or equipment, or a fair evaluation, of such material, goods or equipment as if new whether supplied new or otherwise by, or to, the client and including the cost or a fair evaluation of the cost of installation (the sourcing, inspection and testing of such will comprise additional services by the consulting engineer);
(xii) “Electronic Engineering Services” means services related to the provision of electronic systems and detailing the terminations, signals and interconnections of electronic components as distinct from conventional electrical HV, MV and LV systems and related reticulation.
(xiii) “Emerging Enterprise”, means and enterprise that is owned managed and controlled by previously disadvantaged persons as defined in Government Gazette No 30692 1 February 2008.
(xiv) “Engineering and Construction Works Contract”, means a contract for the provision of a combination of supplies and services, arranged for the development, extension, installation, repair, maintenance, renewal, removal, renovation, alteration, dismantling or demolition of structures, including building and engineering infrastructures
(xv) “Engineering Project” means a project of which the scope comprises mainly engineering work.
(xvi) “Expression of interest”, involves both a request for an Expression of Interest and the Consulting Engineer’s response to the request. The request is for tenderers to register their interest in undertaking a specific contract or to participate in a project or programme and to submit their credentials so they may, in terms of the organization's procurement procedures, be shortlisted and invited to submit a tender offer should they qualify or be selected to do so.
(xvii) “Financial Offer” see Tender Price.
(xviii) “Form of agreement”, means a standardised document setting out the formal agreement between the client and the consulting engineer for the providing the scope of services for the specified scope of works
(xix) “Form of offer and acceptance”, the documents that formalise the legal process of offer and acceptance.
(xx) “Functionality” see quality.
(xxi) “list of returnable documents “ means the document that lists everything the employer requires a tenderer to submit with his tender submission
(xxii) “Normal services” means the typical services as set out be ECSA that should be provided on a project and for which payment in terms of the ECSA guidelines tariffs should normally provide adequate remuneration.
(xxiii) “Pricing instructions” the document that provides the criteria and assumptions which it will be assumed in the contract, that the tenderer has taken into account when developing his prices, or target, in the case of target cost contracts
(xxiv) “Principal Agent” means the Professional Service Provider appointed as such.
(xxv) “project” means any total scheme envisaged by a client, including all the works and services concerned;
(xxvi) “Quality (functionality)” the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
(xxvii) “Services Contract”, means a contract for the provision of labour or work, including knowledge‐based expertise, carried out by hand, or with the assistance of equipment and plant
(xxviii) “Site information”, means the document that describes the site as at the time of tender, to enable the tenderer to price his tender and to decide upon his method of working and programming.
(xxix) “Scope of Services” means the services which a consulting engineer must provide in relation to the Scope of Work.
(xxx) “Scope of Work” means the portion of the works for which the consulting engineer is engaged.
(xxxi) “Stage” means one of six stages of the normal services set out below.
(xxxii) “The Act” means the Engineering Profession Act, 2000 (Act No. 46 of 2000);
(xxxiii) “Total annual cost of employment” means the total annual cost of employment as defined in clause Error! Reference source not found.;
(xxxiv) “Submission data”, the document that establishes the respondent's obligations in submitting an expression of interest and the employer's undertakings in the processing of the submission
(xxxv) “Supplies contract “ means a contract for the provision of materials or commodities made available for purchase.
(xxxvi) “Tender data “, means the document that establishes the tenderer's obligations in submitting a tender and the employer's undertakings in administering the tender process and evaluating tender offers;
(xxxvii) “Tender notice and invitation to tender” means the document that alerts prospective Professional Services Suppliers to the nature of the supplies, services and engineering and construction works required by the employer and contains sufficient information to solicit comparable responses.
(xxxviii) “Tender Price”, means the price submitted for the required services including all other payment conditions and related information in respect of costs and disbursements.
(xxxix) “Threshold”, means a monetary value of a procurement contract established in any legislation governing procurement or by the executive of an institution, below which a procedure may be used.
(xl) “Works” means the activities on a project for which contractors are under contract to the client to perform or are intended to be performed, including the supply of goods and equipment;
CHAPTER 3.
CHAPTER 3. PROJECT LIFE‐CYCLE
The construction industry within South Africa is a well‐established sector that has nationally delivered infrastructure of high standard on a par with the developed world. It is an efficient and effective ‘machine’ that delivers infrastructure at the right quality, within budget and deadline.
Its primary constraint has not been a lack of capacity and skills but rather a lack of investment by government and the private sector, as well as the complicated procurement regime resulting from a plethora of recent legislation.
The intention of this Manual is to generally guide clients and consulting engineers through this ‘minefield’ with regard to their role in the construction project life‐cycle and especially the associated procurement aspects.
3.1 PROJECT LIFE‐CYCLE
The project life cycle involves several elements as shown in the figure below.
Project Life Cycle
1 Identification
2 Definition
3 Feasibility
4 Concept & Viability
5 Design
6 Procure
7 Construct
8 Ops & Maint
The first 3 steps in the project life cycle are associated with identifying a potential project and defining and selecting the most appropriate feasible project that can meet the need.
The next 3 steps involve developing the project through to the final design stage and procuring a Contractor to construct the project.
Thereafter the project is constructed and handed over to the client who will have processes in place to operate and maintain the resulting facility.
3.1.1 Identification
The first step in the project life‐cycle is to identify the need to a project. This is normally the result of many planning, or operations and maintenance studies that show a need of one form or another that can be met through a construction project. This step in the project life cycle normally involves many processes that are initiated or carried out by the owner of infrastructure. Such processes may involve the appointment of specialist consulting engineers or other professional service providers who may assist in identifying the causes and potential solutions to problems and a range of potential projects that may solve the problem while at the same time not making an unnecessary impact on the physical and social environment and also ensuring reasonable project sustainability.
3.1.2 Definition
Once the potential projects have been identified they will need to be assessed through more detailed planning and investigation studies in order to define the project in more detail. Inappropriate solutions will be rejected and a short list of alternative solutions prepared.
3.1.3 Feasibility
Once the project has been defined the technical and financial feasibility will need to be determined and the definition may need to be adjusted to refine the project and select the most appropriate project option subject to technical and financial constraints.
3.1.4 Viability
Once the feasible project has been defined procurement of normal consulting engineers’ services or any other services associated with the design and project development can commence. The first stage of these services will be to develop the concept design in more detail and confirm its technical and financial viability in greater detail.
3.1.5 Design
Once the project concept has been finalised detailed design can commence which involves detailing all of the aspects of the project in sufficient detail to obtain competitive prices for construction.
3.1.6 Procurement
When the design is complete the necessary contract documents are prepared and tenders for construction are solicited. The tenders are evaluated and the Construction Contract is awarded to the wining tenderer.
3.1.7 Construction
Construction can now commence and proceeds until practical completion when the owner takes possession of the constructed project. The construction contract is finalised when the defects liability period has expired and all defects have been rectified.
3.1.8 Operations and Maintenance
The owner now proceeds with operation and maintenance of the project in accordance with nay manuals and guidelines that are provided and in accordance with the owner’s own processes and procedures.
CHAPTER 4. CONSULTING SERVICES
The services provided by consulting engineers and other professional services providers involve a myriad of services in a range of disciplines and fields. These include amongst others:
AGRICULTURAL ENGINEERING
CIVIL ENGINEERING SERVICES
CONSTRUCTION MANAGEMENT SERVICES
CONSTRUCTION PROJECT MANAGEMENT SERVICES
ELECTRICAL ENGINEERING
GEOTECHNICAL ENGINEERING
MECHANICAL ENGINEERING
STRUCTURAL ENGINEERING
TRANSPORTATION ENGINEERING
MISCELLANEOUS ENGINEERING SERVICES SUCH AS:
Railway Track design, Refueling systems, Materials Handling Systems, Special Structures, Asset Management Systems, Transaction Advisory Services, Acoustical engineering services, Building wet services, Cathodic protection, Fire protection and detection, Lightning protection, Contractual Advisory Services, Airport airside and landside developments
The provision of these services can deliver most value in the early steps of the project cycle and therefore functionality and quality of the proposed service is regarded as much more important than cost in steps 1 to 3 of the Project Cycle as shown above.
As the project becomes increasingly well defined the required consulting services become easier to define more precisely and the role of high level expertise reduces while that of more routine skills such as design detailing and correct and comprehensive contract documentation become more important. This is shown conceptually in the table below.
Step in Project Cycle Required expertise and potential for value
Identification Strategic concepts and lateral thinking to identify appropriate options.
Definition Operational and value options to define projects that are likely to be feasible and cost‐effective.
Feasibility Identification and elaboration of possible alternatives and cost‐effectiveness.
Concept and Viability Project optimisation subject to budget and environmental constraints.
Design Quick and effective design detailing and incorporation of latest appropriate technological developments.
Procurement Good contract documentation, accurate schedule of quantities and appropriate procurement options
Construction Conscientious construction administration and monitoring and effective handling of contractual issues
Operations and Maintenance Asset management and preventative maintenance
CHAPTER 5. PROCUREMENT OF CONSULTING SERVICES
Consulting Engineers form an important major pool of skilled technical resources in South Africa that help to ensure that design and construction of engineering works are of excellent quality and cost effective. A high standard of engineering and infrastructure development is vital to the country’s growth, progress and global competitiveness. Through National Treasury policy statements, Government recognises that “it is necessary that certain minimum requirements of quality and efficiency be achieved when appointing consultants”. At the same time a basic policy of competitive selection is to be maintained.
5.1 LEGAL ENVIRONMENT FOR PROCUREMENT OF CONSULTING ENGINEERING SERVICES
A universally accepted set of objectives or outcomes for a construction procurement system are those based on the Constitution of South Africa of 1996 (Act 108 of 1996) and which have been adopted by the International Organisation for Standardisation (ISO) in the development of the ISO 10845 series of standards for construction procurement.
Table 5‐1: Qualitative requirements (Pillars of Procurement)
System requirement
Qualitative description of requirement
Fair The process of offer and acceptance is conducted impartially without bias, and provides participating parties simultaneous and timely access to the same information. Terms and conditions for performing the work do not unfairly prejudice the interests of the parties.
Equitable The only grounds for not awarding a contract to a tenderer who complies with all requirements are restrictions from doing business with the organization, lack of capability or capacity, legal impediments and conflicts of interest.
Transparent The procurement process and criteria upon which decisions are to be made shall be publicized. Decisions (award and intermediate) are made publicly available together with reasons for those decisions. It is possible to verify that criteria were applied. The requirements of procurement documents are presented in a clear, unambiguous, comprehensive and understandable manner.
Competitive The system provides for appropriate levels of competition to ensure cost‐effective and best value outcomes.
Cost‐ effective The processes, procedures and methods are standardized with sufficient flexibility to attain best value outcomes in respect of quality, timing and price, and the least resources to effectively manage and control procurement processes.
Promotion of other objectives
The system may incorporate measures to promote objectives associated with a secondary procurement policy subject to qualified tenderers not being excluded and deliverables or preferencing criteria being measurable, quantifiable and monitored for compliance.
The procurement of consulting engineering services accordingly needs to maintain a balance between reasonable compensation which will ensure continued attractiveness and development of the profession on one hand, while ensuring competition on the other. In addition the Constitution of South Africa requires that government procurement systems must be Fair, Equitable, Transparent, Competitive and Cost Effective. A legislative framework exists to promote transformation in the new democracy of the country. The key Acts affecting procurement are:
Table 5‐2: Primary Legislation Regulating Procurement
Act Applicability What it does in respect of procurement Constitution of the Republic of South Africa, 1996 (Act No 108 of 1996)
All organs of state Provides procurement objectives and establishes government’s policy for preferencing. Establishes requirements for the award of contracts to be lawful, reasonable and procedurally fair.
Public Finance Management Act (Act 1 of 1999)
National and provincial departments and state owned enterprises
Establishes a regulatory framework for supply chain management which includes procurement within national and provincial departments and state owned enterprises.
Promotion of Administrative Justice Act (Act 3 of 2000)
All organs of state Establishes fair administrative procedures, permits those affected by unfair administrative action to request reasons for such administrative action within 90 days of, or when they became aware of, such actions and requires administrators to respond within 90 days of receipt of such requests. (Administrative actions are presumed to be have been taken without good cause where an administrator fails to respond within the prescribed period.) Provides for procedures for the judicial review of administrative actions and remedies in proceedings for judicial review including the prohibition of an administrator from acting in a particular manner, setting aside the administrative action, correcting the defective action and the ordering of the administrator to pay compensation.
The Promotion of Equality and the Prevention of Unfair Discrimination Act, 2000 (Act 4 of 2000)
The state and all persons (natural or juristic person)
Prohibits the state or any person from discriminating unfairly against any person on the grounds of race or gender through the denial of access to contractual opportunities for rendering services or by failing to take steps to reasonably accommodate the needs of such persons.
Preferential Procurement Policy Framework Act, 2000 (Act No 5 of 2000)
All organs of state (state owned enterprises) at discretion of Minister)
Establishes the manner in which preferential procurement policies are to be implemented
Construction Industry Development Board Act, 2000 (Act 38 of 2000)
All organs of state involved in procurement relating to the construction industry.
Establishes the means by which the Board can promote and implement policies, programmes and projects, including those aimed at procurement reform, standardisation and uniformity in procurement documentation, practices and procedures within the framework of the procurement policy of government, through the establishment of: • a national register of contractors (and if required, consultants
and suppliers) to manage public sector procurement risk and facilitate public procurement;
• a register of projects above a financial value with data relating to contracts awarded and completed and a best practice project assessment scheme;
• best practices Establishes a code of conduct for the parties engaged in construction procurement. Establishes a national register for Project Service Providers
Broad‐Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)
Procurement provisions apply to all organs of state.
Establishes a code of good practice and scorecard, provided for industry specific charters such as the Construction Industry Charter, to inform the: • development of qualification criteria for the issuing of licenses or concessions, the sale of state owned enterprises and for entering into partnerships with the private sector; and
• development and implementation of a preferential procurement policy.
Act Applicability What it does in respect of procurement Local Government: Municipal Finance Management Act, 2003 (Act No 56 of 2003)
Municipalities and municipal entities
Establishes a regulatory framework for supply chain management which includes procurement within municipalities and municipal entities.
Prevention and Combating of Corrupt Activities Act, 2004. (Act No. 12 of 2004).
Public and private sector Makes corruption and related activities an offence, establishes a Register in order to place certain restrictions on persons and enterprises convicted of corrupt activities relating to tenders and contracts; and places a duty on certain persons holding a position of authority to report certain corrupt transactions.
Construction Sector Charter (published in terms of Section 9(1) of BBBEE Act, 53 of 2003 (see above))
All stakeholders operating in the Construction Sector
Provides framework to address: • Broadbased black economic empowerment (ownership,
control, employment equity, skills development, procurement, enterprise development & corporate social investment)
• Enhancement of capacity • Increase in production It is mandatory for all stakeholders and is effective from 5 June 2009
It is compulsory for organs of state to comply with the principles of this legislation and to comply with the “Standard for Uniformity in Construction Procurement” (SFU) of the Construction Industry Development Board (CIDB).
The procedures of the CIDB in its SFU are generic and can be readily aligned with World Bank W70 and other international documents.
5.2 OBJECTIVES OF PROCUREMENT
The development of skilled Professional Services providers takes many years and significant effort by all involved in the industry. Therefore, the procurement of professional services should not be viewed as the purchase of a readily available commodity, but rather the engagement of skilled professionals who should act as trusted advisors in fulfilling the client’s project and other development objectives.
While services should be offered in a competitive manner, the primary purpose of the competitiveness should be to ensure long term value for money and not only short term low cost design. Such long term value does not only encompass value in the project under consideration but also value in developing and having skilled professionals available in the country to meet its needs rather than having to import all skilled services from external sources.
The procurement of professional services in a reasonably competitive manner has exercised the minds of many people over the years with no clear resolution in sight. The best method of procurement within a country is where the selection of the professional service provider is based purely on quality and this is followed with price negotiations to obtain fair value for money. This however, requires a knowledgeable client and mature consulting environment, neither of which exists in abundance in South Africa at the present time.
Therefore, procurement needs to be approached with care in a transparent manner that encourages professionals to develop and maintain the required skills and expertise. The current CIDB procurement guidelines can provide the necessary results provided the process is fair and transparent, as required by the CIDB code of conduct.
5.3 METHODS OF PROCUREMENT
Against this background, Consulting Engineering Services can be procured using one of the following methods as prescribed by the CIDB Standards for Uniformity (SFU):
Table 5‐3: Methods of Procurement
Method Description 1 Financial Offer 2 Financial Offer plus Quality (Functionality) 3 Financial Offer and Preference 4 Financial Offer plus Quality and Preference
For consulting engineering services, where cost effective and value–added performance is highly dependent upon innovativeness, expertise and competence, the inclusion of Quality in the criteria for selection is of paramount importance.
It is therefore recommended that in all but a small minority of cases as outlined in the SFU, Method 4 above should be used– i.e. Quality and Cost Based Selection (QCBS) with preferencing as dictated the State from time to time.
5.4 CIDB’S BEST PRACTICE GUIDELINES: COMPETITIVE SELECTION
It is further recommended that the CIDB’s Best Practice Guidelines as contained in the SFU, for competitive selection procedures and as described below, should be followed (mandatory for Public Bodies).
Table 5‐4: Procurement Methods: Competitive Selection Procedures
PP2A (Nominated procedure)
Tenderers that satisfy prescribed criteria are admitted to an electronic database. Tenderers are invited to submit tender offers based on search criteria and their position on the database. Tenderers are repositioned on the database upon appointment or upon the submission of a tender offer.
PP2B (Open procedure)
Tenderers may submit tender offers in response to an advertisement by the organisation to do so.
PP2C (Qualified procedure)
A call for expressions of interest is advertised and only those tenderers who have expressed interest, satisfy objective criteria and who are selected to submit tender offers, are invited to do so.
PP2D (Quotation procedure)
Tender offers are solicited from not less that three tenderers in any manner the organisation chooses, subject to the procedures being fair, equitable, transparent, competitive and cost effective.
PP2E (Proposal procedure)
Tenderers submit technical and financial proposals in two envelopes. The financial proposal is only opened should the technical proposal be found to be acceptable.
PP2F (Proposal procedure)
A two staged system: Non‐financial proposals are called for. Tender offers are then invited from those tenderers that submit acceptable proposals based on revised procurement documents. Alternatively a contract is negotiated with the tenderer scoring the highest number of evaluation points.
PP2G (Shopping procedure)
Written or verbal offers are solicited in respect of readily available supplies obtained from three sources. The supplies are purchased from the source providing the lowest Financial Offer once it is confirmed in writing.
5.4.1 Points to note:
Quoting CIDB Best Practice Guideline A7 (Table A1, SFU): “The procurement of professional services should result in the award of a professional service contract on the basis of demonstrated competence and qualifications for the type of services required, at fair and reasonable Financial Offers. Accordingly, the underlying principle is that professional service contracts are awarded to firms which have both the capacity and capability to provide the quality of the service at a reasonable Financial Offer and not necessarily to those that are the least costly. The Constitution requires that the procurement system be cost effective. This implies
that best value procurement outcomes in terms of quality, downstream and life cycle costs, timing and Financial Offer using the least amount of resources necessary to effectively manage and control the procurement process, should be strived for. Clearly selection on the basis of quality should not necessarily mean the best quality available but quality appropriate for the assignment”.
It should also be noted that drawing up tender documents that include Financial Offer and quality as bases for selection require that the scope or work and required services are adequately described so that comparable tenders are received. In addition, the process of preparing a tender can also take up a lot of time and effort on the part of the prospective tenderers. The cumulative total input cost of all tenderers can be considerable and in many cases for small projects can exceed the potential fee, with a negative effect on the finances of the service provider and on the overall economy of the project.
Therefore, as a guideline the potential fee to be earned by the consulting engineer on a project should preferably be 20 times greater than the cost of preparing an individual tender. In other words the cost to prepare a tender should not exceed approximately 5% of the potential fees to be earned. This makes economic sense when it is noted the fees earned must cover all staff costs involved in executing the assignment, plus overheads, expenses and profit. This means that tenders should not be solicited for small projects and where a consulting engineer is responsible for drawing up the contract documentation the following procedure should preferably be adopted:
Preferably consider grouping small projects together.
Requesting proposals for term contracts where the consulting engineer can support the client on a partnership basis for all small to medium projects over say a three year period. The advantage of this approach is that it assists with identification and implementation of projects over the three year period and also provides less cyclical and more effective employment of scarce engineering resources within the consulting engineering firm and the country.
Listing manuals and procedures as requirements so that long‐winded technical proposals are not required, only details of the proposed staffing and track record.
CHAPTER 6. SCOPE
The scope of services and scope of work for which a consulting engineer or any other professional service provider is appointed need to be clearly defined to ensure proper pricing and a clear and unambiguous understanding of what needs to be done.
It is important to distinguish between the scopes of services and the scope of work as set out in the definitions above. This is because in many instances the both elements are not set out explicitly in the tender documents resulting in uncertainty and inappropriate pricing and expectations. This is described in more detail below.
Besides describing the services, the scope should list the “Deliverables to be produced by the Consulting Engineer”, i.e. the products of the Consulting Engineer’s work, in form of studies, reports, designs, drawings and documents. In other words, the objective of the scope of services must be to reduce to a minimum the level of uncertainty concerning the services required, for which the Consulting Engineer must develop an understanding of what is required in order to submit a Financial Offer.
6.1 PLANNING, STUDIES, INVESTIGATIONS AND ASSESSMENTS
There are many steps related to identifying or defining and determining the overall feasibility of a project that need to be undertaken prior to appointing a consulting engineer for normal project services. In many instances, with well‐resourced clients, these identification and feasibility steps will be carried out internally as part of the client’s normal project identification and project definition processes. For example, within a road authority, roads requiring rehabilitation or resealing or complete reconstruction may have been identified and the projects defined as part of the road management system. In the case of a water authority, water demand or operational problems may result in the need for a new purification plant being identified and defined in broad terms.
As indicated earlier the first 3 steps of the project cycle involve planning and studies. The typical services relate to carrying out these studies and investigations as well as the preparation and submission of reports embodying preliminary proposals or initial feasibility studies and will normally be remunerated on a time and cost basis. The typical services will involve:
(i) Consultation with the client or client’s authorized representative.
(ii) Inspection of the site of the project.
(iii) Preliminary investigation, route location, planning and a level of design appropriate to allow decisions on feasibility.
(iv) Consultation with authorities having rights or powers of sanction as well as consultation with the public and stakeholder groups.
(v) Advice to the client as to regulatory and statutory requirements, including environmental management and the need for surveys, analyses, tests and site or other investigations, as well as approvals, where such are required for the completion of the report, and arranging for these to be carried out at the client’s expense.
(vi) Searching for, obtaining, investigating and collating available data, drawings and plans relating to the works.
(vii) Investigating financial and economic implications relating to the proposals or feasibility studies.
(viii) Clause (vii) does not normally apply to civil and structural services on Building Projects, where these services are provided by a Quantity Surveyor, except as far as the interpretation of cost figures the Engineer’s scope of work is concerned.
Deliverables will typically include:
Collation of information.
Reports on technical and financial feasibility and related implications.
List of consents and approvals.
Schedule of required surveys, tests, analyses, site and other investigations.
Once the project has been properly identified and its location, form, size and function are defined, then procurement can proceed for normal project services outlined below.
6.2 SCOPE OF SERVICES FOR NORMAL PROJECT DESIGN STAGES
After the Client has established the project definition and requirements, the execution of the assignment can be separated into six broad Stages. The 6 typical project design stages are shown in the figure below:
Project Design Stages
6 Close Out
5 Construction
4 Documentation and Procurement
3 Design Development
2 Concept & Viability
1 Inception
These individual stages are elaborated upon in more detail below:
Stage 1: Inception ‐ Establish client requirements and preferences, assess user needs and options, appointment of necessary consultants, establish the project brief including project objectives, priorities, constraints, assumptions aspirations and strategies
Stage 2: Concept Viability/ Preliminary Design ‐ Prepare and finalise the project concept in accordance with the brief, including project scope, scale, character, form and function, plus preliminary programme and viability of the project)
Stage 3: Design Development/ Detailed Design ‐ Develop the approved concept to finalise the design, outline specifications, cost plan, financial viability and programme for the project)
Stage 4: Documentation and Procurement ‐ Prepare procurement and construction documentation, confirm and implement the procurement strategies and procedures for effective and timeous procurement of necessary resources for execution of the project.
Stage 5: Contract Administration and Inspection ‐ Manage, administer and monitor the construction contracts and processes including preparation and coordination of procedures and documentation to facilitate practical completion of the works
Stage 6: Close‐out ‐ Fulfil and complete the project close‐out including necessary documentation to facilitate effective completion, handover and operation of the project)
More detailed examples of the scope of service pertinent to each Stage are contained in Appendix A. That Appendix also shows the typical scope of services associated with carrying out the duties of the Principal Consultant where it is appropriate to appoint the consulting engineer to carry out these duties.
6.3 THE SCOPE OF WORK
The scope of work is the portion of the works for which the consulting engineer is engaged or the document that specifies and describes the supplies, services, or engineering and construction works which are to be provided and any other requirements and constraints relating to the manner in which the contract work is to be performed.
For example a client wishing to construct a Casino complex consisting of three distinct components being the Building, a Parking Area and an access road, may appoint a consulting engineer to undertake Stages 3‐6 of the normal engineering services for the Parking Area. In this case the scope of services can be defined as set out in Appendix A while the scope of work may only involve the Parking Area. Some thought will have to go into preparing the scope of work as it interfaces with other works such as stormwater runoff from the building and the interface with the access road and gate house.
The scope of work for each service provider should be carefully determined to ensure that no overlaps and duplication in terms of scope of work exist. In some cases the consulting engineer will be required to appoint specialist sub‐consultants in which case the consulting engineer will ensure that no duplication in terms of scope occurs.
A few examples of scope of work are provided below for clarity.
6‐1: Examples of Scope of Work
Buildings The work in respect of site boundaries and fencing, foundations, electrical, air conditioning, wet services, fire protection, structural, roofing, waterproofing, stormwater, etc should be clearly allocated. If the design is to be undertaken by a multidisciplinary professional team (Architect, Quantity Surveyor, Engineer, etc.) the responsibilities of the consulting engineer in such a team must be clearly indicated.
Roads The beginning & end of the road should be indicated, whether the scope includes structures, hydrological analysis and drainage, stormwater, roadside furniture, pavement layerworks, traffic analyses, selection of borrow pits, road marking, signage etc. It should also be indicated who will be responsible for liaison with interested and affected parties and for ensuring public participation.
Structures The scope of work should be clearly indicated in respect of site investigations, foundations, interaction with other structures and facilities, design review, and similar.
Electrical The scope of work should be clear in respect of bulk services provision, power lines, substations, power connections and liaison with utilities, back up power, earthing, lightning protection, security services, access control, data and telephony, lighting, electrical reticulation and switchboards, etc.
Mechanical Clarify, if air conditioning, wet services, pumps, lifts, escalators, fire protection etc. are to be performed by one or more specialist engineers.
Dams The Scope of Services and Scope of Work should be described, in detail to enable tendering consultants to identify the level of accreditation of design staff to be identified. The Scope of Work should be clear in respect of geological and hydrological investigations to be undertaken prior to preliminary and detail design, plus the extent of design to be undertaken by contractors, and likewise the Scope of Work in the electrical and mechanical disciplines.
Municipal Services
The Scope of Services and Scope of Work should be clearly described for the consulting engineer to accurately identify the range of services to be designed by him (e.g. Roads, Stormwater Drainage, Sewerage, Water Supply, etc.) and which are to be designed by others, including the extent of simultaneous working and coordination required. The extent of construction to be undertaken by emerging contractors or using labour‐based methods should also be clear.
6.4 IMPORTANT CONSIDERATIONS
The anticipated Professional Services Providers Register to be published by the CIDB will have to be taken into account when compiling the Scope of Services.
The examples of Scope of Services provided in Appendix A, are comprehensive, but generic. Items should be extracted from the generic scope or modified in each stage of the project in which the Client requires services to be performed by the Consulting Engineer. These examples also show additional services where the client requires the Consulting Engineer to perform PA/PM duties in addition to the consulting engineering services (especially if the Consulting Engineer is the sole consultant). In such cases the selected duties from the PA/PM scope must be added to those of the Consulting Engineer, for the Consulting Engineer to act as Principal Consultant in addition to acting as Consulting Engineer.
If it is necessary for the Client’s Scope of Services to be more specific to the discipline(s) of the Consulting Engineer (e.g. Civil, Structural, Electrical or Mechanical) then suitable items should be added to the generic scope, either alongside the generic items or in place of them, as appropriate.
In the preparation of the Scope of Services a number of key factors, common to every Scope, need to be borne in mind and taken into account when framing the tasks required in each Stage:
Table 6‐2: Key Factors in Developing Scope
Obligations of the parties
The tasks required and listed by the Client should clearly all fall within the obligations of the Consulting Engineer (the successful tenderer). If a listed task falls within the Client’s obligations but requires a Consulting Engineer to perform it, it should be described as being “on behalf of the Client” to avoid implying it is solely the Consulting Engineer’s obligation and accord with the obligations of the parties as stated in the intended contract for the services
Health and Safety
Legislation such as the OHS Act lays down comprehensive actions to be taken by parties responsible for safety. This includes the Client, who may wish to delegate specific actions or tasks to the consulting engineer. Where this applies, this should be reflected in the Scope of Services.
Sustainability Environmentally sustainable design and energy efficiency are becoming a common underlying requirement in every project, with obligations on the Client and consulting engineer. The Client’s sustainability policy should be made known to the consulting engineer, who in turn should be tasked with advising the Client on the project sustainability and/or assisting to set sustainability targets.
Information available
The execution of the assignment will be based on information available at its commencement, which may have to be augmented in order to perform the services required. It is important that the extent of information available to the consulting engineer, and information yet to be obtained by him, be clearly identified at the outset, to avoid any misconceptions. Where the client is unable to define the scope accurately, for example if the assignment is an investigation or study whose nature and extent are unknown, then it is important to tell the tenderers what the client has allowed for, by way of budget or estimate of manhours
In all cases the Scope of Services must reflect the Client’s full intentions and be sufficiently described so as to enable the tendering Consulting Engineer to identify all the tasks required of him, in a manner which will enable him to estimate the times to be spent by his personnel allocated to each task and hence to quantify his tender.
Failure by the Client to prepare the Scope of Services in sufficient detail and with sufficient clarity will cause the tendering Consulting Engineer to make assumptions and/or misinterpret the Client’s requirements, and price unnecessarily for risks which could be avoided with a sufficiently detailed scope. Misinterpretation could result in the consultant pricing too low or too high. Either way, will not be in the interests of the Client, the Consulting Engineer, or the project.
CHAPTER 7. TENDER DOCUMENTATION
The purpose of this chapter is to guide consulting engineers and clients in the drawing up of documentation for the procurement of consulting engineering services in line with the principles and documentation of the CIDB. An aim of this guide is to achieve reasonable uniformity in respect of documentation and content in the interests of a more efficient industry.
7.1 MODEL FOR UNIFORMITY
The Construction Industry Development Board (CIDB) and in particular the SFU, has been in the forefront of initiatives for uniformity in procurement documentation and the guidelines which follow have drawn on the recommended sequences and standardised documents contained in the CIDB’s “Construction Procurement Toolbox”. These items have been adapted to be generic to consulting engineering services and to construction services and to be relevant to the compiler, be he/she client or consulting engineer.
The procurement of services takes place within the process of offer and acceptance which results in a contract being entered into. Procurement documents provide tenderers with the necessary inputs to allow them to complete their tender submissions. These submissions are in turn inputs into the contract to be concluded following acceptance of a tender offer. Uniformity in the documentation is based on the principle that there be a complete separation in the component documents making up the tender enquiry – namely, conditions of tender, conditions of contract, specifications or scope and methods of measurement and payment. This allows for instance, different contract conditions, or also payment conditions to be used without affecting the remaining component documents.
7.2 GUIDELINES FOR COMPILING THE DOCUMENTATION
A full listing in a standard sequence taken from Section 4 of the SFU is attached as Appendix B. It should be noted that in all Professional Service provider documentation, quality or functionality should play a prominent role.
The completion of tender enquiry documentation which is complete and appropriate to its purpose is critical to the project’s success, in terms of efficiency and cost effectiveness of the procurement process.
It recommended the references below be consulted for further information regarding procurement documentation:
(i) Standard Professional Services Contract by CIDB, NEC, etc
(ii) Revised Standard for Uniformity in Construction Procurement (SFU)
(iii) CIDB Construction Procurement Best Practice Guideline C3 – Adjudication
(iv) CIDB Professional Services Contract
(v) PROCSA Form of Agreement
CHAPTER 8. VALUE – ADDED SERVICES
The purpose of this chapter is to guide the consulting engineer towards an appropriate and effective method of determining the Financial Offer to be quoted in his tender.
Through emphasis on clarity of the client’s requirements to be priced for and the “value” to the client of the services being offered, the consulting engineer will be better equipped to demonstrate when and how acceptance of his Financial Offer will give the most value to the client.
Clearly, acceptance of the lowest financial offer quoted will deny the client the opportunity of assessing the value added to the project through other offers.
8.1 THE CONCEPTS OF FINANCIAL OFFER AND QUALITY
In accordance with the Constitution a procurement process shall be Fair, Transparent, Competitive and Cost effective. Consulting Engineers are accustomed to tendering under competitive conditions with submission of a tender Financial Offer, but unlike products or goods which are well known and well defined in terms of size and quality, tendering for delivery of professional services involves intangibles, in form of activities and deliverables which are specific to the project and need to be carefully described in the Scope of Services and Scope of Work.
Even when this is accepted, the tendency is often for clients to rely on the Financial Offer alone, neglecting quality (Treasury uses “functionality” and CIDB uses “quality”), and award contracts to the tenderers with the lowest Financial Offer. Clients need to remember that they are not procuring “products” from consulting engineers, but “services” to develop or produce a product, in form of the project. Such projects invariably have costs associated with them which go far beyond the purchase price – such as operating, maintenance, or other life cycle costs.
The methods which only use the financial offer as a basis for evaluating tenders for professional services is not appropriate for consulting engineering services as it encourages shortcuts and cannot be used where there are no clear and binding specifications for the quality of the work to be provided. It inevitably leads to poorer quality services with resulting higher life cycle costs.
It is also not sufficient to ask for a tender based on a price alone and then to assume that professionals will deliver a quality service because they are “professionals”. It is well known that remuneration systems should reward desirable performance. Therefore, if the desirable performance is a low price then this will be delivered, but always with a concomitant reduction in quality. Examples of this would be to design a building by only analysing the most critical elements and copying the result to all less critical elements, or in the case of a road neither optimising the alignment nor maximising the use of available materials and instead adopting the simplest alignment from the point of view of design and using only commercially available materials for the pavement.
If the Scope could be defined accurately and the quality specified for every item in the schedule, such as in a conventional construction contract, then competition based on price alone will be acceptable. However, this is difficult to achieve in a request for professional services in the construction industry in view of the uncertainties associated with the Scope during the project development process.
The tender Financial Offer must therefore reflect a reasonable effort to be expected from the consulting engineer to optimise all such costs. This is seldom, if ever, reflected in the lowest Financial Offer received for services as described above. The words quoted by John Ruskin are as relevant today as they were over a hundred years ago:
“It is unwise to pay too much, but it is worse to pay too little. When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the thing you bought it to do.”
To put the matter in perspective, if one considers the total life‐cycle costs of a project as 100%, this will comprise:
Life-cycle Costs
Engineering costs 1 – 2% Construction Costs 6 – 18% Operation and Maintenance 80 – 93%
Note: the Consulting Engineer’s fee can be of the order of 10% of project cost, but this will be less than 2% of total life‐cycle costs. This 2% can dictate the outcome of 98% of the total costs!
While one should not necessarily always accept the lowest Financial Offer, accepting a higher Financial Offer must also has limits. Consider the graph in Fig. 1 below:
Figure 8‐1: Price – Quality Curve
0
2
4
6
8
10
4 5 6 7 8 9 10
Qua
lity
Price
A
C
B
There is a direct relationship between Financial Offer and Quality or Effort, but it is not a linear one.
At “A” The pressure on the financial offer with no quality emphasis will generate less engineering effort. This will result in sub‐optimal designs and higher life‐cycle costs. Put simply, the client “gets what he pays for”.
At “B” the consultant has no constraints whatsoever on his engineering input and this can result in maximum quality and minimum life‐cycle costs. However the price for this will come at a premium. Note that the graph is asymptotic towards B, ie significant further increases in financial offer will not render significantly better quality or lower life‐cycle costs. In other words, focus on quality alone can result in waste.
The optimum position to be targeted is at “C”, where engineering input is not constrained by lowest price considerations alone, and it is recognised that consideration of quality will allow the tendering consulting engineer to offer the client the full benefit of his experience, calibre of staff, soundness of methodology, innovation and enterprise.
In the context therefore of professional consulting engineering services the concept of “financial offer” is inextricably linked to that of “quality” of the service. Together these aspects determine the “Value” contained in and around the tender financial offer. Also refer Practice Note 8, version 2, SFU, as clients may wish to make multidisciplinary appointment.
8.2 THE CONCEPT OF VALUE
Accepting that the procurement of the services is done in a manner which is fair, transparent, competitive and cost effective, the client or employing authority needs the assurance that the services being procured for the financial offer tendered will be commercially viable; in other words, the services will add sufficient value to the intended project to justify the award of a contract at the tendered Financial Offer.
This introduces the concept of the “Value” of the services offered in the consulting engineer’s tender, which has many interpretations in the context of consulting engineering services and can best be expressed as “the optimum combination of financial offer and quality”. “Value” should:
secure for the client value‐for‐money services,
achieve minimum life cycle costs (i.e. long term value for money) and
should ensure that the project will fulfil its intended purpose.
Adequate opportunity must be given in the procurement process to enable the consulting engineer to show convincingly that:
value‐for‐money services are offered
minimum life cycle costs are critical to the success of the project and
the Financial Offer will demonstrate the value of the inputs which are offered.
In summary, the Client must receive value for the money he will pay, and the consulting engineer must be paid adequately for the value he will provide
It follows therefore that Value is a factor which should be quantified in the consideration of tenders by clients and employing authorities. This too is open to various interpretations; however the most straightforward method to quantify Value is the determination of the Tender Score in terms of Preference, Quality and Financial Offer being individually assessed and then scored in a manner appropriate to the nature, size, and complexity of the project. This is described more fully in CHAPTER 9.
8.3 GUIDELINES FOR PRICING OF TENDERS
The success of a project depends at the outset upon the acceptance by the client or employing authority and the consulting engineer of the Financial Offer tendered and the contractual conditions attached thereto. The consulting engineer needs to be sure his interests are protected and the client comfortable with the financial arrangements in the contract. Without these there will be no basis upon which good relations between the parties – essential for a smooth‐running contract and a successful project – can be built.
This section is devoted to assisting the consulting engineer to realistically and appropriately develop the tender Financial Offer, while at the same time providing a useful indication to the client of the financial commitments and risks facing the consulting engineer. For the consulting engineer there are essentially three “golden rules” to be followed:
8.3.1 Golden Rule No 1 ‐ Know the project requirements
It can safely be stated that in the procurement of consulting engineering services, no two projects are exactly the same, i.e. each project is unique. Therefore the offer of services to execute the assignment must be tailored to suit the project. This is where the consulting engineer can demonstrate his understanding of the project requirements and differentiate his services such that the client can accept his financial offer with confidence and with knowledge of the value to be added.
Central to understanding the requirements of the project is a clear and unambiguous Scope to be supplied by the client. These terms must state all the client’s requirements for the project including scope of services, scope of work, deliverables, standards and constraints. The Scope must be sufficient for the consulting
engineer to identify all the task areas and sub‐tasks required, in order to price realistically for them, with minimum assumptions, with clear understanding of the risks, and without any omissions.
If the client is using a procurement system based on prequalification and shortlisting of tenderers, a call for Expressions of Interest will be followed by requesting priced proposals (tenders) from the shortlisted firms. The prequalification criteria will not be project‐specific and only request details of similar experience and capacity in order to select pre‐qualified tenderers. Thereafter a request for proposals including a clear scope will be issued for pricing.
Procedures whereby a client uses a generic set of criteria or blanket functionality requirements to admit potential tenderers to a standing list or panel and thereafter invite only priced proposals as and when the Scope can be detailed are also acceptable for smaller, repetitive projects.
The consulting engineer should demonstrate his knowledge of, and familiarity with the project and its technology, through selection of staff ideally suited to the tasks and by displaying the necessary track record. Where required, the consulting engineer can also expand upon the value to be added through a write up of methodology or plan of work indicating innovative techniques, value‐added procedures and optimal use of resources. It is vital for the consulting engineer to give these aspects close attention, since this is where evaluation of the tender on grounds of quality will focus. The consulting engineer would be wise to take carefully the client’s quality evaluation criteria for the project into account, towards maximising his quality score.
Lastly, if the Scope unclear in any area, the consulting engineer is advised to seek clarity from the client. Clarification opportunities are frequently given in the tender period, but if not, the rule should be “if in doubt – ask!”
8.3.2 Golden Rule No 2 ‐ Know your costs involved
The approach most frequently used to determine the financial offer is termed Cost‐Based Pricing. Crucial to this exercise is a clear understanding of the costs involved. The generation of an accurate manpower schedule or resources programme is ideal, but it will fail as a basis for financial offer determination if correct costs are not known. The following items should be considered, in a “zero‐based” budget approach:
For consulting engineers, costs generally comprise two components – Staff Costs, and Company Overhead. Together these add up to the total costs of operating the firm. Staff Costs must include the person’s total remuneration (“cost to company”). A multiplier is then applied to cater for all Company Overhead costs, including cost of unproductive (unbillable) time. The value of the multiplier for office‐based staff, excluding unproductive time, is typically of the order of 2, i.e. total costs = Staff costs x 2. The overhead multiplier should however be checked at regular intervals within the firm. To these total costs can then be added a percentage for profit, selected for the tender. The total of these “costs plus profit” per annum divided by the number of productive billable hours per year will give the chargeable hourly rate for the person concerned.
Note that office‐based staff usually attracts a higher overhead than site‐based staff.
A useful guide to the value of the multiplier is the historic “cents per hour per hundred Rand of salary” method recommended to determine hourly based Time Charges by consulting engineers. Depending on the person’s seniority/responsibility in the firm these ranged from 16.5c, 17.5c to 22 “cents per hour for each R100 or part thereof of annual salary plus bonus” of the person (for the latest figures kindly refer to Clause 4.4 of the ‘Guideline Scope of Services and Tariff of Fees for Persons registered in terms of the Engineering Profession Act, 2000’ available on the ECSA website at http://www.ecsa.co.za/documents/20090101_TimebasedFees.pdf). It is emphasised that this is a comparative guide – there is no substitute for knowing one’s own true costs.
If contract staff, not in‐house, or subconsultants are proposed, their total cost to the company should be determined plus a markup for administration and profit. Again an hourly rate should be arrived at.
Reimbursable expenses need to be estimated for the above resources, in form of travelling, accommodation, printing/reproduction, communications and similar costs, based on the tasks involved, the scheduled manpower and the programme.
The cost of special services such as surveys, investigations and tests should be estimated and itemised, to be included if necessary in the tender Financial Offer.
It is important in this phase to comply with three key requirements, which at first glance appear conflicting:
Ensure nothing is omitted,
Offer only what is asked for
Adequately assess the influence of factors beyond one’s control.
For this purpose the tasks can be broken down by:
function (e.g. technical, administrative) or
stage (inception, concept & viability, design development, etc.) or
activity (meetings, design, checking, training,) as best suits the tender.
8.3.3 Golden Rule No 3 ‐ Know the Client’s situation
The consulting engineer who has mastered a knowledge of the project and knowledge of his costs may consider it irrelevant to “know the client”. In reality this is not so; no two clients can be said to be identical in all respects – there will be differences in structure, strategies, resources, policies, and procedures for procuring consulting engineering services.
It is therefore valuable for the consulting engineer to know the client insofar as this can affect the manner in which he performs his assignment. For example, the following typical aspects within the client’s ambit need to be considered:
Capability to produce, and adhere to, a clear and sufficient Scope
Ability to fund, or to timeously procure funding for the project
Adequate resources to administer the contract
History of payment of fee invoices on time
Sufficient technical capability for reviews and to grant approvals
Need to be offered training or mentoring
Experience in frequent use of consulting engineering services
Ability to responsibly evaluate and award consulting (and construction) contracts
These aspects can materially influence the level of Financial Offer to be aimed at in the tender concerned and the consulting engineer tendering will need to make adjustments for items such as the following:
Profit markup
Pricing for contingencies or risk
Pricing for work not called for but necessary, in expectation of not done by client
Pricing for unrealistically tight (or slack) deadlines
Pricing for work assumed, but not confirmed required
Adding a margin in lieu of qualifying the tender
Provision for productivity delays to be expected in executing the work for the client
The aspects above are discussed further below
8.4 PRICE BENCHMARKS
A benchmark is useful for both the Client , who needs to have a yardstick against which to compare all tender Financial Offers received and so test these against a norm, and also for the Consulting Engineer, who seeks an indication as to the adequacy of his Financial Offer for the project services. For this purpose it is beneficial to both parties to use a “benchmark” for evaluating the Financial Offer.
An appropriate benchmark is the Guideline Scope of Services and Tariff of Fees prepared by the Engineering Council of South Africa (ECSA) and published annually in the Government Gazette. This has for many years been used to calculate a recommended fee which is equitable in normal circumstances, using a recognised scope of services in various stages and engineering disciplines.
The fee calculation is based on a percentage of the cost of the project (which is not a ‘ceiling fee’); the lower the project cost the higher the percentage, and vice versa. Furthermore the ECSA percentage‐based fees can be adjusted by recommended factors to cater for complexity of the work, for partial services, and for high material cost relative to engineering effort, e.g. railways and certain types of road. The ECSA recommendations also include hourly rates for work done on a “Time and Cost” basis, for various levels of engineering practitioner.
The ECSA benchmark is most effective when determined for the estimated or given cost of the project in question, to give a “Benchmark/Yardstick Fee”. This can be then further adjusted up or down with a multiplier to take into account the particular project circumstances as seen by the tendering consulting engineer, and so give a ”Yardstick Fee” appropriate to the tender Financial Offer being quoted by him.
8.5 BENCHMARK MULTIPLIERS
Typical circumstances for which a multiplier can be used in answering typical circumstantial questions are given below:
The multiplier should be at the Consulting Engineer’s discretion, say in the range 0.60 to 1.60 as follows:
Multiplier Circumstances 0.6 – 1.0 “favourable” circumstances 1.0 ”normal” or “reasonable” circumstances; 1.0 – 1.6 “negative” circumstances
Typical questions to be asked by the Consulting Engineer are:
Is Scope complete and clear?
Is the client well versed in procuring consulting engineering services?
Does client have adequate resources for competent tender evaluation?
Does the consulting engineer have a record of successful projects with the client?
Can hours be saved from earlier similar work done or previous experience?
Is staff proposed reasonably priced, ideally suited to the project and able to meet the task durations assumed?
Is the consulting engineer better placed than most for specialist services?
Is the project location clearly advantageous for the consulting engineer?
Will the risks perceived be easy to manage or be very difficult to handle?
Is the level of complexity of the project normal or will it be very complex?
Does the consulting engineer have a low order book and need the work?
Will the project start date and duration require tender Financial Offer adjustment, if no provision for escalation?
By selecting and applying a suitable multiplier for each circumstance, a particular “Adjusted Benchmark” fee can be determined for each case. The average of the sum of all the particular fees used can give an indication of the “Yardstick Fee” for the tender being submitted by the consulting engineer.
8.6 THE CONCEPT OF “VALUE BIDDING”
Value Bidding, developed in the USA, represents an unusual treatment of competitive bidding theory which refocuses the traditional bidding model from fee‐based selection criteria to one with value‐based selection criteria.
The system uses an established market research methodology, “conjoint analysis”, to establish the probability of winning, considering client priorities, competitors’ attributes and market conditions. The resulting analytical model enables engineers to analyse market conditions, client preferences, track competitors, while maximising the probability of winning, thereby maximising profit and optimising Financial Offer.
The model relies heavily on assumptions and requires a dedicated effort to apply it. Its greatest value probably lies in pricing consulting services for large and complex projects. A reference on the subject is given at end of this chapter.
8.7 POINTS TO NOTE
Understanding how a tender Financial Offer is made up is of benefit to both client and consulting engineer.
Clients need to be made aware of the “Value” offered by tenderers in terms of a combination of quality and Financial Offer.
The definition of Scope of Services which is appropriate for the project and sufficient to tender upon are in the client’s and consulting engineer interest. If professional assistance is required to achieve this, the engagement of a consulting engineer by the client is advised.
To submit a fair Financial Offer, the consulting engineer needs to know:
the project
his costs and
the client.
This applies especially if the Scope is vague in the risks to be assumed.
Prequalification to a consultants’ panel using generic criteria followed by pricing only from panel members will only ensure value for the client when a proper definition of Scope accompanies the RFP.
The use of a recognised “Benchmark” as a yardstick, against which both client and consulting engineer can evaluate the Financial Offer, is considered essential. The ECSA recommended guideline fees as gazetted should be used for this purpose.
There is no such thing as a “discounted fee” – rather a benchmark fee adjusted up or down for various project‐specific circumstances relating to the scope of services to be offered.
(i) Reference: “Addressing Pricing: Value Bidding for Engineers and Consultants” by C S Sturts and F H Griffis. Journal of Construction Engineering and Management, ASCE, June 2005.
CHAPTER 9. EVALUATION OF TENDERS
This chapter sets out recommended steps to be taken in framing enquiry documents suited to evaluation, and steps to evaluate tenders, with Quality consideration being an essential part of the evaluation process (as taken from the SFU).
9.1 METHOD
A standardised method for Evaluation of Tenders, again following the CIDB documentation (Table 2, SFU), is mandatory. The method that is generally appropriate for consulting engineering services is Method 4 that is outlined below:
Method 4: Financial Offer plus Quality and Preference
Score Quality, rejecting all offers that fail to score minimum points for quality, stated in Tender Data
Score tender evaluation points for financial offer.
Confirm tenders eligible for preferences claimed and if so score tender evaluation points for preferencing
Calculate total tender points
Rank tender offers from highest number of tender evaluation points to lowest
Recommend tender with highest tender evaluation points for award unless compelling reasons not to do so
9.2 EVALUATION CRITERIA
It is essential for the enquiry documents to state clearly the evaluation criteria and scoring systems that will be used in the tender adjudication process. If the tender document states that a criterion will be used to evaluate the tenders then clarity must be provided on exactly how that criterion will be adjudicated and weighted relative to other criteria.
Section 4.4.3 of the SFU, Tender Data, requires the Client to provide information, usually in the Tender Data section of the documents, on the following items:
The method to be used in evaluation of tenders
The weighting between financial offer (W1), quality (W2) and preference (NP)
Quantified descriptions of the preferences, including conditions associated with granting of preferences, and the manner in which preferences will be scored. It is recommended that clients and consulting engineers in the construction sector make use of the Construction Scorecard as contained in the Construction Industry Charter, which was promulgated on 5 June 2009.
Details of the quality criteria and sub‐criteria which are to be evaluated, and the manner in which quality is to be scored
To ensure a fair, equitable transparent and cost effective procurement system, the:
quality of the outputs or deliverables of the service must satisfy client requirements and expectations
service must come with the reasonable skill and care that is normally used by professionals providing such services and
advice is independent of any affiliation, economic or otherwise, which may cause conflicts between the service provider’s interests and those of the client.
9.3 RECOMMENDED APPROACH
For Consulting Engineering services, the nature of the project can influence the criteria selected for Quality. For example, for “Repeat” or Straightforward” projects, the work can probably be carried out by less well qualified and less experienced staff while quality in terms of cost‐effective design will still be important.
Therefore, the Quality criteria will lean towards the firm’s previous experience and cost effective design capabilities. In the case of feasibility studies or other projects requiring strategic and complex or innovative thought processes and designs, the staff qualifications and experience as well as the firms experience and capacity to undertake the work will all be very important.
Similarly, the weighting of the Quality relative to the Financial Offer may be less for simple projects than for more complex projects.
It is recommended that all tenders for engineering services contain a minimum number of quality points to qualify to have the tender evaluated any further and that all tenderers that do not meet the minimum offer be excluded from further evaluation and informed as such.
Overall, the relationship between Financial Offer and Quality plus Preferences is also dependent on the value of the project as specified in the Preferential Procurement Framework Act. By way of example, for consulting assignments valued at less than R500 000 or R1 million, a ratio of 80:20 is mandatory; for higher value assignments, the mandatory ratio is 90:10.
These aspects are illustrated by means of the tables below which are based on recommendations in the CIDB publications referenced at end of this chapter concerning Evaluation of Quality in Tender Submissions, but with certain differences as follows.
The differences relate to the Scoring against the Ratings, Very Good/ Good/ Satisfactory/ Poor being 100/90/70/40 by the CIDB, but 100/70/50/0 in this CESA Guide.
This is firstly because the “Poor” rating implies the offer is “unsatisfactory”. The descriptions of “Poor” also state inter alia “the technical approach and/or methodology is unlikely to satisfy project objectives or requirements….etc.” On these grounds CESA recommends the tender should not be awarded the contract because it will not meet the client’s requirements. Hence a zero is used.
Secondly, “Good” and “Satisfactory” mean nearly the same in terms of acceptability, so the rating for “Good” is decreased from 90 to 70. At the same time this sets “Very Good” at 100 apart from the other criteria, which is appropriate because this is within the bounds of excellence.
Finally, it is important to note that the actual result of applying the stated weighting of Quality relative to the Financial Offer also depends on the relative values of the two criteria. For example, if all quality scoring is in a very narrow range of – say – 80 to 85 and the financial scoring gives a much higher range of say 50% to 100% then the financial scoring will far outweigh quality even with a high relative weighting for quality.
Clearly it is essential for reviewers to have had experience in such evaluations. If the necessary resources do not exist within the client organisation, specialists or other consulting engineers not connected with the tender should be retained to assist with evaluations.
9.4 PROCEDURE
The first step in the evaluation procedure is to evaluate the score the quality offered by prospective tenderers using 3 quality reviewers and adjusting these scores if required due to major scoring differences as shown in Table 9‐6.
The next step is to reject all tenders that do not make the minimum quality score and inform them of this fact in writing.
The third step is to inform all qualified tenderers of the time and date when the Financial Offers will be opened and to announce these offers at that meeting.
The next step is to calculate the final evaluation score in line with the CIDB SFU as summarised below for Method 4 and Option 2 evaluations.
The following definitions and formulas apply:
NEV = Total evaluated score.
Nm = Score for Price.
NQ = Score for Quality.
NP = Score for Preferencing.
W1 = Weight assigned to price.
W2 = Weight assigned to quality.
NP = Score for Preferencing.
And
Nm = W1 * Pm /P where Pm is the lowest price received from qualified tenderers and P is the tender under consideration. (calculated to 2 decimal places)
NQ = W2 * S/Ms where MS is the maximum possible quality score and S is the quality score for the tender under consideration. This formula simplifies to:
NQ = S if W2 and Ms are the same as suggested in the tables below.
And
NEV = Nm + NQ + NP
Finally rank tender offers from the highest number of tender evaluation points to the lowest and award the work to the tenderer scoring the highest number of tender evaluation points, unless there are compelling and justifiable reasons not to do so.
9.5 POINTS TO NOTE
It is recommended that only a few appropriate criteria be selected for judging a consulting engineer to limit duplication ie select mutually exclusive criteria.
The involvements of women and black persons should not be evaluated in the form of quality in public contracts. This must be addressed in the preferencing points allocated.
The indicators in Tables below which are used to score tendered offer against Quality criteria illustrate the attributes of the consulting engineer which will bring enhanced value to the client’s project.
References:
(i) CIDB Best Practice Guideline No. A4, Evaluating Quality in Tender Submissions
(ii) CIDB Inform Practice Note No. 9, Evaluation of Quality in Tender Submissions
9.6 TABLES FOR THE EVALUATION OF TENDERS
9‐1: Nature of Projects
This table gives guidelines for determining the nature of the project. Five project types, Feasibility Studies & Investigations, Innovative, Complex, Straightforward and Repeat projects are defined in the table. The Descriptions show that for all except Repeat projects, the experience and capability of the tenderer will be key.
Nature of Project Description Feasibility studies and investigations
These projects may be large or small and require specialised skills depending on the nature of the study / investigations. While some of the inputs may be readily identifiable or known, this may not be true of the outputs. These projects may require skills other than normal engineering such as economics, environmental, sociological etc. The deliverable is most probably a report with recommendations on the way forward.
Innovative projects Innovative projects may also be large or small and require a very high degree of specialised skills or knowledge in a specific field. The work will be technically complex and will call for considerable innovation, creativity, expertise and / or skills. The need for specialist advice may often only be identified by the already appointed consulting engineer once a project has commenced and a client should respect his consulting engineer's advice in this regard. Some examples of specialist assignments are certain geotechnical investigations, forensic engineering, mediations, etc.
Complex projects Complex projects may also be small or large but are of such a nature that they require a higher level of technical skills and greater resources. Both inputs and outputs may not be readily identifiable or known. These projects may require skills other than normal engineering, such as management, policy and social development, strategic planning and research. The consulting engineer must be able to present a high level of technical skills and resource for the particular application.
Straightforward projects These are projects where the tasks are of a straightforward nature involving mainly standard technologies, in terms of which inputs are relatively well known and outputs can be readily defined. Larger projects may require the consulting engineer to have a greater capacity and resources to undertake the work.
Repeat projects These are projects where the tasks are also of a straightforward nature involving mainly routine and periodic maintenance activities typical to a Client’s obligation to maintain assets that require inputs from Professional Service Providers. These projects may entail the appointment of a PSP for a fixed term period.
9‐2: Quality Criteria and Points Scale ‐ 20 Points for Preference
This table shows an example of Quality Criteria and Points Scale for small projects, using a Quality plus Financial Offer / Preference ratio 80:20. Note that the more complex the project, the higher the proportion of points for Quality. Also, of the 9 Quality Criteria, it is recommended that not more than 5 criteria, suited to the project type, be selected to avoid double counting from overlap between the 9 criteria. Within the 5 selected criteria, the allocation of points can be varied as shown to give the client’s weighting to each criterion, but always totalling the maximum Points for Quality for that project type.
Quality Criteria Feasibility studies & investigations
Innovative Projects Complex
Projects Straight‐forward
Projects Repeat Projects
Maximum Points for BBBEE 20 20 20 20 20
Maximum points for Quality & Financial Offer 80 80 80 80 80
Maximum Points for Financial Offer 15 15 20 40 40
Maximum points for Quality 65 65 60 40 40
1 Adequacy of proposed work plan and methodology 10 10 10 5 5
2 Qualifications & Competence of key staff in relation to the scope of work
20 20 15 10 10
3 Demonstrated experience (past performance) in comparable projects
10 10 10 10 15
4 Approach proposed to attain the employer's stated objectives
10 10 10
5 Demonstrated experience with respect to specific aspects of the project
15 15 10
6 Sound knowledge of the employer's policies or work procedures (or both)
7 QA systems which ensure compliance with employer's stated requirements
5 5
8 Organisation, logistics and support resources 10 5
9 Demonstrable managerial ability appropriate to size & nature of the work
5
9‐3: Quality Criteria and Points Scale ‐ 10 Points for Preference
This table indicates an example of the Quality Criteria and Points Scale for large projects.. Note the 90:10 Quality plus Price / Preference ratio. The allocation of points for Quality and selection of Quality Criteria are similar to the above Table.
Quality Criteria Feasibility studies & investigations
Innovative Projects
Complex
Projects Straight‐forward
Projects Repeat Projects
Maximum Points for BBBEE 10 10 10 10 10
Maximum points for Quality & Price 90 90 90 90 90
Maximum Points for Price 20 20 20 40 45
Maximum points for Quality 70 70 70 50 45
1 Adequacy of proposed work plan and methodology 10 10 10 10 5
2 Qualifications & Competence of key staff in relation to the scope of work
20 20 20 10 10
3 Demonstrated experience (past performance) in comparable projects
20 20 20 10 15
4 Approach proposed to attain the employer's stated objectives
10 10
5 Demonstrated experience with respect to specific aspects of the project
10 10 10
6 Sound knowledge of the employer's policies or work procedures (or both)
7 QA systems which ensure compliance with employer's stated requirements
10 10
8 Organisation, logistics and support resources 10 10
9 Demonstrable managerial ability appropriate to size & nature of the work
5
9‐4: Indicators to be used when Scoring Tenderers on Quality Criteria
This table shows how the nine Quality Criteria shown in these example tables can be rated. Four ratings for scoring, Poor, Satisfactory, Good and Very Good are used and a description of each of these ratings for each of the nine Quality Criteria is presented. Here it will be noted a score of zero is recommended against a “Poor” rating. For the nine Quality Criteria the Evaluation Indicators use descriptors such as “unlikely to satisfy project requirements”, key staff not adequately qualified”, limited experience”, “limited knowledge”, “does not have a Q.A. system”’ and similar, which justifies the unacceptability of the criterion concerned.
Criteria Rating Scoring Evaluation Indicators
1 Adequacy of proposed
work plan and proposed methodology
Very Good 100 The important issues are approached in an innovative and efficient way, indicating that the tenderer has outstanding knowledge of state‐of‐the‐art approaches
Good 70 The approach is specifically tailored to address the specific project objectives and methodology and is sufficiently flexible to accommodate changes that may occur during execution
Satisfactory 50 The approach is generic and not tailored to address the specific project objectives and methodology. The approach does not adequately deal with the critical characteristics of the project
Poor 0 The technical approach and/or methodology is poor / is unlikely to satisfy project objectives or requirements. The tenderer has misunderstood certain aspects of the scope of work and does not deal with the critical aspects of the project
2
Qualifications and competence of the key
staff (assigned personnel) in relation to the scope of work
Very Good 100 The tenderer demonstrates that key staff are exceptionally well qualified and competent in the application of their skills that relate to the scope of the project
Good 70 The tenderer demonstrates that key staff are adequately qualified and competent in the application of their skills that relate to the scope of the project
Satisfactory 50 The tenderer demonstrates that key staff are reasonably well qualified and competent in the application of their skills that relate to the scope of the project
Poor 0 The tenderer was not able to demonstrate that key staff are reasonably well qualified and competent in the application of their skills that relate to the scope of the project
3
Demonstrated experience
(past performance) in comparable projects
Very Good 100 Key staff have outstanding experience in comparable projects
Good 70 Key staff have adequate experience in comparable projects
Satisfactory 50 Key staff have reasonable experience in comparable projects
Poor 0 Key staff have limited experience in comparable projects
Criteria Rating Scoring Evaluation Indicators
4 Approach proposed to attain the employer's stated objectives
Very Good 100 An innovative approach is presented that illustrates the tenderer's approach has been tailored to be relevant and meet the client's objectives in all aspects
Good 70 The approach presented illustrates that the tenderer will adopt an approach that meets the client's objectives
Satisfactory 50 The tenderer proposes a generic approach that will meet the client's objectives in most aspects
Poor 0 The approach presented does not meet the client's expectations and will not result in the objectives of the project being fully realised
5
Demonstrated experience with respect to specific aspects of
the project
Very Good 100 Key staff have outstanding experience in specific aspects of the project that were defined as key components of the assignment in the SOW
Good 70 Key staff have adequate experience in specific aspects of the project that were defined as key components of the assignment in the SOW
Satisfactory 50 Key staff have reasonable experience in specific aspects of the project that were defined as key components of the assignment in the SOW
Poor 0 Key staff have limited experience in specific aspects of the project that were defined as key components of the assignment in the SOW
6
Sound knowledge of the employer's policies or work procedures (or
both)
Very Good 100 The tenderer has outstanding knowledge of the employer's policies and work procedures
Good 70 The tenderer has adequate knowledge of the employer's policies and work procedures
Satisfactory 50 The tenderer has reasonable knowledge of the employer's policies and work procedures
Poor 0 The tenderer has limited knowledge of the employer's policies and work procedures
7
Quality assurance systems which ensure compliance with stated
employer's requirements
Very Good 100 The tenderer is certified to maintain an internationally accepted quality assurance system
Good 70 The tenderer's quality assurance system meets the quality assurance requirements set by the employer for the project
Satisfactory 50 The tenderer employs a reasonable quality assurance system
Poor 0 The tenderer does not have a quality assurance system
Criteria Rating Scoring Evaluation Indicators
8 Organisation, logistics and support resources
Very Good 100 The tenderer convincingly illustrates that extensive organisational, logistic and support resources will be available for execution of the project
Good 70 The tenderer convincingly illustrates that sufficient organisational, logistic and support resources will be available for execution of the project
Satisfactory 50 The tenderer reasonably well illustrates that sufficient organisational, logistic and support resources will be available for execution of the project
Poor 0 The tenderer fails to illustrate that sufficient organisational, logistic and support resources will be available for execution of the project
9
Demonstrable managerial ability
appropriate to the size and nature of the work
Very Good 100 The tenderer illustrates extensive knowledge and experience in the project management of projects of similar size and complexity
Good 70 The tenderer illustrates adequate knowledge and experience in the project management of projects of similar size and complexity
Satisfactory 50 The tenderer illustrates reasonable knowledge and experience in the project management of projects of similar size and complexity
Poor 0 The tenderer illustrates limited knowledge and experience in the project management of projects of similar size and complexity
9‐5: Examples of Qualification and Competence of Key Staff
This refers specifically to the Quality criterion no. 2, “Qualifications and competence of Key Staff (assigned personnel). It is completed by the client when issuing tenders for the project, and indicates, for six typical staff positions, the Preferred and Minimum points required for each of six attributes of qualifications and experience. In addition suggested points values are shown for each project type described in Table 6.6.1 in the example at top of the table.)
Nature of project
Requ’d for project
Qualification Years experience after qualification
Professional registration
Years experience after registration
Involvement in comparable projects – state number in past ten years
Project value of comparable projects in past six years – state R’000
Y/N Pref Min
Offer
Pref Min
Offer
Pref
Offer
Pref Min
Offer
Pref Min
Offer
Pref Min
Offer
Project Leade
r
Feasibility studies & investigation
Y Deg Deg 15 10 Y 10 7 5 3 ?
Innovative Projects
Y Deg Deg 15 10 Y 10 7 3 1 ? ?
Complex Projects
Y Deg Tech 10 8 Y 5 3 5 2 ? ?
Straight forward Projects
Y Deg Tech 8 5 N N/A N/A 5 2 ? ?
Repeat Projects
Y Deg Tech 5 5 N N/A N/A 5 2 ? ?
Nature of project
Requ’d for project
Qualification Years experience after qualification
Professional registration
Years experience after registration
Involvement in comparable projects – state number in past ten years
Project value of comparable projects in past six years – state R’000
Y/N Pref Min
Offer
Pref Min
Offer
Pref
Offer
Pref Min
Offer
Pref Min
Offer
Pref Min
Offer
Design En
gine
er
Feasibility studies & investigation
Innovative Projects
Complex Projects
Straight forward Projects
Repeat Projects
Materials Engineer
Feasibility studies & investigation
Innovative Projects
Complex Projects
Straight forward Projects
Repeat Projects
Nature of project
Requ’d for project
Qualification Years experience after qualification
Professional registration
Years experience after registration
Involvement in comparable projects – state number in past ten years
Project value of comparable projects in past six years – state R’000
Y/N Pref Min
Offer
Pref Min
Offer
Pref
Offer
Pref Min
Offer
Pref Min
Offer
Pref Min
Offer
Contracts En
gine
er
Feasibility studies & investigation
Innovative Projects
Complex Projects
Straight forward Projects
Repeat Projects
Reside
nt Engineer
Feasibility studies & investigation
Innovative Projects
Complex Projects
Straight forward Projects
Repeat Projects
Nature of project
Requ’d for project
Qualification Years experience after qualification
Professional registration
Years experience after registration
Involvement in comparable projects – state number in past ten years
Project value of comparable projects in past six years – state R’000
Y/N Pref Min
Offer
Pref Min
Offer
Pref
Offer
Pref Min
Offer
Pref Min
Offer
Pref Min
Offer
Asst Re
side
nt Engineer
Feasibility studies & investigation
Innovative Projects
Complex Projects
Straight forward Projects
Repeat Projects
9‐6: Assessment Example: Complex Project. Bid Value In The 90:10 Points System Range
This table represents a worked example for a Complex project, in the 90:10 Points System range taken from Table 9‐3, showing the evaluation results of 3 Reviewers, using the same 5 of the 9 Quality Criteria, and the same weightings, as in Table 9‐3. The Ratings between Reviewers should not differ by more than one step from each other. In the Initial Assessment however, in Quality Criterion 1, Reviewer 3’s rating of “Poor” differs markedly from “Good” and “Very Good” of Reviewers 1 and 2. Similarly, in Quality Criterion 3, Reviewer 2’s rating of “Satisfactory” differs markedly from “Very Good” of Reviewers 1 and 3. Because of these “outliers” tabled by Reviewer’s 3 and 2, such significant deviations merit discussion and further consideration by the Reviewers, towards increased consensus. The second sheet of this table shows this has been done. Although some Ratings changed in the re‐assessment, there were finally no outliers.
Initial Assessment of Quality Criteria Weight Reviewer 1 Reviewer 2 Reviewer 3 Average
Score Points for Quality Rating Score Rating Score Rating Score
1 Adequacy of proposed work plan & proposed methodology 10 VG 100 G 70 P 0 56.67 5.7
2 Qualifications and competence of key staff (assigned personnel) in relation to the scope of work
20 G 70 S 50 G 70 63.33 12.6
3 Demonstrated experience (past performance) in comparable projects 20 VG 100 S 50 VG 100 83.33 16.7
5 Demonstrated experience with respect to specific aspects of the project
10 S 50 P 0 S 50 33.33 3.3
7 QA systems which ensure compliance with stated employer's requirements
10 P 0 S 50 P 0 16.67 1.7
Maximum points for Quality 70.0 Points for Quality of tenderer under consideration 40
Final Assessment of Quality Criteria (after panel discussion)
Weight Reviewer 1 Reviewer 2 Reviewer 3 Average
Score Points for Quality Rating Score Rating Score Rating Score
1 Adequacy of proposed work plan & proposed methodology 10 VG 100 G 70 G 70 80.0 8.0
2 Qualifications and competence of key staff (assigned personnel) in relation to the scope of work
20 G 70 S 50 G 70 63.33 12.6
3 Demonstrated experience (past performance) in comparable projects 20 G 70 S 50 G 70 63.33 12.7
5 Demonstrated experience with respect to specific aspects of the project
10 S 50 P 0 S 50 33.33 3.3
7 QA systems which ensure compliance with stated employer's requirements
10 P 0 S 50 P 0 16.67 1.7
Maximum points for Quality 70.0 Points for Quality of tenderer under consideration 37.3
CHAPTER 10. PERFORMANCE MONITORING
Since its establishment in 1952, the S.A. Association of Consulting Engineers (today known as Consulting Engineers South Africa – CESA) has been committed to upholding and advancing the standard of services offered by its member firms. It is currently a requirement that every member firm shall have its own Quality Management System (QMS) which complies with the international standard for quality ISO 9001: 2008. Many firms have obtained ISO certification of compliance with the standard, including CESA itself.
To strengthen the integrity of members and combat fraudulent practices in the Construction Sector, CESA has recently introduced the Business Integrity Management System (BIMS) into its Code of Conduct, to which members are required to adhere.
Clients and employing authorities frequently wish to know that the performance of consulting engineers employed by them do indeed meet the CESA standards. CESA encourages the use of a performance evaluation mechanism by clients as this can indicate to the client whether his choice of consulting engineer was correct. Some clients maintain a database recording the performance of their consulting engineers, which assists them in their selection processes. With feedback from the client monitoring the consulting engineer’s performance, evaluations can enhance the standard of services in the industry in the longer term.
The focus of this chapter is on the presentation of a suggested standard evaluation system, which can be used or adapted by clients to monitor a consulting engineer’s performance to meet the objectives above.
10.1 COMMUNICATION AND LIAISON
If the consulting engineer is to provide the client with the standard of service required then it is essential that there be good and ongoing communication between the parties. This process should begin at the award of the contract to the successful tendering consulting engineer. At this time the brief to the consulting engineer must be confirmed by the client, with confirmation of the requirements given in the tender Scope or if these are to be modified, with negotiation and contractual agreement on the terms of the contract.
The Scope must inter alia include items such as all technical requirements, financial conditions, budget constraints, programme requirements and approval processes. The consulting engineer is advised to prepare his own list of questions beforehand, towards ensuring a brief which is complete. The need for a comprehensive brief appropriate to the project cannot be overstated – it will form the basis of the working relationship between the parties and minimise the risk of misunderstandings which can lead to problems or disputes later.
The client should also advise the consulting engineer of his intention to monitor the latter’s performance. It is highly likely that the consulting engineer’s own quality management system requires completion by the client of a “Client’s Satisfaction Questionnaire” during and/or at end of the assignment. In such cases it is desirable for the parties to collaborate on the framework of the evaluation system so that it meets the requirements of both parties.
Where the client finds serious or repetitive cases of inadequate performance or transgressions of the CESA Code of Conduct by a member firm, this should be reported to the Executive Director of CESA who will investigate the matter and take action against the member if necessary. Alternatively, complaints against individuals (not firms) registered with the Engineering Council of South Africa may be lodged by the client with ECSA.
Clearly, the implementation of a process of regular performance monitoring should avoid the need for such drastic steps.
10.2 SUGGESTED PERFORMANCE MONITORING AND EVALUATION PROCESS
The process suggested is based on the client’s consideration of key activities by the consulting engineer and using a scorecard system to evaluate the consulting engineer’s performance.
The scoring system uses categories of evaluation that have been found through research to be important to clients and uses selected sub‐categories as shown in the table below. Clients could modify or add sub‐categories to suite their own particular needs, if required and still divided by the total maximum possible score to come up with a comparable percentage final rating.
10.3 POINTS TO NOTE
Strictly speaking this chapter on monitoring the performance of consulting engineers is not part of the procurement process. It is however relevant to include it as a sequel to procurement, because arising from the emphasis on quality in the evaluation of tenders submitted by consulting engineers, the monitoring of their performance will assist to ensure that the highest standards of quality are maintained, with the facility of client feedback giving ongoing opportunity for improvement in the quality of services.
The recommended methods for monitoring described above thus represent an initiative of CESA – Consulting Engineers South Africa, delivered in the interests of the procurement of professional services by the client body.
10‐1: Evaluation Scorecard
Note 1 Consider each element of quality below and rate performance against the criteria listed. Intermediate scores can also be given. 2 Circle the scores selected and add them together. Calculate an overall Percentage Score by multiplying the Total Score achieved by 100/1170 or by 100/ 1440 if Section 6 is applicable
Item Description Merit Rating
Very Poor
Improvement required
Satisfactory/ Good
Above Average
Excellent
1
Quality of Design 1.1 Creativity/ Innovation and Appropriateness/
Environmental issues 10 30 50 70 90
1.2 Understanding Client & Legal Requirements 10 30 50 70 90 1.3 Documentation and Drawings 10 30 50 70 90
2 Adherence to Time Constraints
2.1 Completion of Work Stages 10 30 50 70 90 2.2 Response to Queries 10 30 50 70 90
3 Recognition of Cost
3.1 In Designs 10 30 50 70 90 3.2 Protecting Client Interests 10 30 50 70 90
4
Project Administration 4.1 Record Keeping 10 30 50 70 90 4.2 Legal and Financial 10 30 50 70 90 4.3 Programme 10 30 50 70 90
5
Communication and Interfaces 5.1 Jurisdictions 10 30 50 70 90 5.2 Client, other Consultants and Contractors 10 30 50 70 90 5.3 Managing Investigations, Monitoring & Testing 10 30 50 70 90
6
Construction and Post‐Construction 6.1 Monitoring during construction 10 30 50 70 90 6.2 Documentation and ‘As‐Built Drawings’ 10 30 50 70 90 6.3 Oversight during maintenance period 10 30 50 70 90
TOTAL SCORE PERCENT SCORE (Total Score x 100/1170 or 100/1440)
APPENDIX A
EXAMPLE SCOPE OF SERVICES
STAGES TYPICALLY INCLUDED AS NORMAL SERVICES
DURING THE EXECUTION OF A PROJECT STAGE 1. Inception
Establish client requirements and preferences, assess user needs and options, appointment of necessary consultants, establish the project brief including project objectives, priorities, constraints, assumptions aspirations and strategies
Typical activities Typical deliverables
(i) Assist in developing a clear project brief
(ii) Attend project initiation meetings
(iii) Advise on procurement policy for the project
(iv) Advise on the rights, constraints, consents and approvals
(v) Define the scope of services and scope of work required
(vi) Conclude the terms of the agreement with the client.
(vii) Inspect the site and advise on the necessary surveys, analyses, tests and site or other investigations where such information will be required for Stage 2 including the availability and location of infrastructure and services
(viii) Determine the availability of data, drawings and plans relating to the project
(ix) Advise on criteria that could influence the project life cycle cost significantly (financial design criteria)
(x) Provide necessary information within the agreed scope of the project to other consultants involved
• Agreed scope of services and scope of work
• Signed agreement • Report on project, site and functional
requirements • Schedule of required surveys, tests,
analyses, site and other investigations • Schedule of consents and approvals
STAGE 2. Concept and Viability / Preliminary Design
Prepare and finalise the project concept in accordance with the brief, including project scope, scale, character, form and function, plus preliminary programme and viability of the project)
Typical activities Typical deliverables
(i) Agree documentation programme with principal consultant and other consultants involved
(ii) Attend design and consultants’ meetings
(iii) Establish the concept design criteria
(iv) Prepare initial concept design and related documentation
(v) Advise the client regarding further surveys, analyses, tests and investigations which may be required Establish regulatory authorities’ requirements and incorporate into the design
(vi) Refine and assess the concept design to ensure conformance with all regulatory requirements and consents
(vii) Establish access, utilities, services and connections required for the design
(viii) Coordinate design interfaces with other consultants involved
(ix) Prepare process designs (where required), preliminary designs, and related documentation for approval by authorities and client and suitable for costing
(x) Provide cost estimates and life cycle costs as required
(xi) Liaise, co‐operate and provide necessary information to the client, principal consultant and other consultants involved
• Concept design • Schedule of required surveys, tests and other
investigations and related reports • Schedule of required surveys, tests and other
investigations and related reports • Process design • Preliminary design • Cost estimates as required
Note:
In the event that the consultant, who undertakes Stage 1 or Stages 1 & 2, is not appointed for the remaining Stages, the deliverables emanating from Stages 1 & 2 should be made available to the consultant appointed to undertake the remaining Stages.
STAGE 3. Design Development / Detail Design
Develop the approved concept to finalise the design, outline specifications, cost plan, financial viability and programme for the project)
Typical activities Typical deliverables
(i) Review documentation programme with principal consultant and other consultants involved
(ii) Attend design and consultants’ meetings
(iii) Incorporate client’s and authorities’ detailed requirements into the design
(iv) Incorporate other consultant’s designs and requirements into the design
(v) Prepare design development drawings including draft technical details and specifications
(vi) Review and evaluate design and outline specification and exercise cost control
(vii) Prepare detailed estimates of construction cost
(viii) Liaise, co‐operate and provide necessary information to the principal consultant and other consultants involved.
(ix) Submit the necessary design documentation to local and other authorities for approval
• Design development drawings • Outline specifications • Local and other authority submission
drawings and reports • Detailed estimates of construction costs
STAGE 4. Documentation and Procurement
Prepare procurement and construction documentation, confirm and implement the procurement strategies and procedures for effective and timeous procurement of necessary resources for execution of the project.
Typical activities Typical deliverables
(i) Attend design and consultants’ meetings
(ii) Prepare specifications and preambles for the works
(iii) Accommodate services design
(iv) Check cost estimates and adjust designs and documents if necessary to remain within budget
(v) Formulate the procurement strategy for contractors or assist the principal consultant where relevant
(vi) Prepare documentation for contractor procurement
(vii) Review designs, drawings and schedules for compliance with approved budget
(viii) Assist in calling for tenders and/or negotiation of prices and/or assist the principal consultant where relevant
(ix) Liaise, co‐operate and provide necessary information to the principal consultant and the other consultants as required
(x) Assist in the evaluation of tenders
(xi) Assist with the preparation of contract documentation for signature
(xii) Assess samples and products for compliance and design intent
• Specifications • Services co‐ordination • Working drawings. • Budget construction cost • Tender documentation • Tender evaluation report • Tender recommendations • Priced contract documentation
STAGE 5. Contract Administration and Inspection
Manage, administer and monitor the construction contracts and processes including preparation and coordination of procedures and documentation to facilitate practical completion of the works
Typical activities Typical deliverables
(i) Attend site handover
(ii) Issue construction documentation in accordance with the documentation schedule including, in the case of structural engineering, reinforcing bending schedules and detailing and specifications of structural steel sections and connections
(iii) Carry out contract administration procedures in terms of the contract
(iv) Prepare schedules of predicted cash flow
(v) Prepare pro‐active estimates of proposed variations for client decision making
(vi) Attend regular site, technical and progress meetings
(vii) Inspect works for conformity to contract documentation
(viii) Adjudicate and resolve financial claims by contractor(s)
(ix) Assist in the resolution of contractual claims by the contractor
(x) Establish and maintain a financial control system.
(xi) Clarify details and descriptions during construction as required
(xii) Prepare valuations for payment certificates to be issued by the principal agent
(xiii) Witness and review of all tests and mock ups carried out both on and off site
(xiv) Witness and review of all tests and mock ups carried out both on and off site
(xv) Check and approve contractor drawings for design intent
(xvi) Update and issue drawings register.
(xvii) Issue contract instructions as and when required
(xviii) Review and comment on operation and maintenance manuals, guarantee certificates and warranties
(xix) Inspect the works and issue practical completion and defects lists
(xx) Assist in obtaining statutory certificates
• Schedules of predicted cash flow • Construction documentation • Drawing register • Estimates for proposed variations • Contract instructions • Financial control reports • Valuations for payment certificates • Progressive and draft final account(s) • Practical completion and defects list • Electrical Certificate of Compliance • Where a quantity surveyor is included in the
project team in building works, activities (iv), (v), (viii), (x) and (xii) and related deliverables will not be required from the engineer.
STAGE 6. Close‐Out
Fulfil and complete the project close‐out including necessary documentation to facilitate effective completion, handover and operation of the project)
Typical activities Typical deliverables
(i) Inspect and verify the rectification of defects
(ii) Receive, comment and approve relevant payment valuations and completion certificates
(iii) Prepare and/ or procure operations and maintenance manuals, guarantees and warranties
(iv) Prepare and/ or procure as‐built drawings and documentation
(v) Conclude the final accounts where relevant.
• Valuations for payment certificates • Works and final completion lists • Operations and maintenance manuals,
guarantees and warranties • Operations and maintenance manuals,
guarantees and warranties • As‐built drawings and documentation • Final accounts
ADDITIONAL SERVICES AS PRINCIPAL CONSULTANT The Consulting Engineer generally has the resources and capability to act as Principal Consultant to the Client in addition to the consulting engineering function and is frequently appointed as such. In such a case some or all of the following services will need to be added.
STAGE 1. Inception as Principal Consultant
Typical activities Typical deliverables
(v) Assist in developing a clear project brief.
(vi) Attend project initiation meetings.
(vii) Advise on procurement policy for the project.
(viii) Advise on the rights, constraints, consents and approval
(ix) Define the scope of services and scope work required.
(x) Conclude the terms of the agreement with the client.
(xi) Advise on the necessary surveys, analyses, tests and site or other investigations where such information will be required for Stage 2 including the availability and location of infrastructure and services
(xii) Determine the extent of information, data, drawings and plans relating to the project available at commencement
(xiii) Provide necessary information within the agreed scope of the project to the other consultants
• Project brief • Agreed scope of work • Agreed services • Project procurement policy • Signed agreements • Integrated schedule of consents and
approvals • Project initiation programme • Record of all meetings
STAGE 2. Stage 2 ‐ Concept and Viability as Principal Consultant
Typical activities Typical deliverables
(i) Assist the client in the procurement of the other consultants
(ii) Advise the client on the requirement to appoint a health and safety consultant
(iii) Communicate the project brief to the other consultants and monitor the development of the concept and viability
(iv) Agree the format and procedures for cost control and reporting by the other consultants
(v) Prepare a documentation and indicative construction programme
(vi) Co‐ordinate the concept and viability documentation for presentation to the client for approval
(vii) Facilitate the approval of the concept and viability by the client
(viii) Facilitate the approval of the concept and viability by statutory authorities
• Signed consultant/client agreements • Indicative project documentation and
construction programme • Approval by client to proceed to Stage 3
STAGE 3. Design Development as Principal Consultant
Typical activities Typical deliverables
(i) Agree and implement communication processes and procedures for the design development of the project
(ii) Assist the client in the procurement of the necessary other consultants including the clear definition of their roles and responsibilities
(iii) Prepare, co‐ordinate, agree and monitor a detailed design and documentation programme
(iv) Conduct and record consultants’ and management meetings
(v) Facilitate input required by the health and safety consultant
(vi) Facilitate design reviews for compliance and cost control
(vii) Facilitate timeous technical co‐ordination
(viii) Facilitate client approval of all Stage 3 documentation
• Additional signed client/ consultant agreements
• Detailed design & documentation programme• Record of all meetings • Approval by client to proceed to Stage 4
STAGE 4. Tender Documentation and Construction Procurement as Principal Consultant
Typical activities Typical deliverables
(i) Recommend and agree the procurement strategy for contractors, subcontractors and suppliers with the client and other consultants
(ii) Prepare and agree the project procurement programme
(iii) Advise the client, in conjunction with the other consultants on the appropriate insurances
(iv) Co‐ordinate and monitor the preparation of the procurement documentation by the consultants in accordance with the project procurement programme
(v) Manage the procurement process and recommended contractors for approval by the client
(vi) Agree the format and procedures for monitoring and control by the cost consultants of the cost of the works
(vii) Co‐ordinate and assemble contract documentation for signature
• The procurement strategy • Procurement programme • Tender/contract conditions • Record of all meetings • Obtain approval by client of tender
recommendation(s) • Contract documentation for signature
STAGE 5. Contract Administration and Inspection as Principal Consultant
Typical activities Typical deliverables
(i) Arrange the site handover to the contractor
(ii) Establish the construction documentation issue process
(iii) Agree and monitor the issue and distribution of construction documentation
(iv) Instruct the contractor on behalf of the client to
(v) appoint subcontractors
(vi) Conduct and record regular site meetings
(vii) Monitor, review and approve the preparation of the construction programme by the contractor
(viii) Regularly monitor the performance of the contractor against the construction programme
(ix) Adjudicate entitlements that arise from changes required to the construction programme
(x) Receive, co‐ordinate and monitor approval of all contract documentation provided by the contractor(s)
(xi) Agree the quality assurance procedures and monitor the implementation thereof by the other consultants and contractors
(xii) Monitor the preparation and auditing of the contractor’s health and safety plan and approval thereof by the health and safety consultant
(xiii) Monitor the preparation of the environmental management plan by the environment consultant
(xiv) Establish procedures for monitoring scope and cost variations
(xv) Monitor, review, approve and issue certificates.
(xvi) Receive, review and adjudicate any contractual claims
(xvii) Monitor the preparation of financial control reports by other consultants
(xviii) Prepare and submit progress reports
(xix) Facilitate and expedite occupation certificates
(xx) Coordinate, monitor and issue the practical completion lists and the certificate of practical completion
• Signed contracts • Approved construction programme • Approved contractual claims • Construction documentation schedule • Payment certificates • Progress reports • Record of meetings • Certificate(s) of practical completion
STAGE 6. Close out as Principal Consultant
Typical activities Typical deliverables
(i) Co‐ordinate and monitor the rectification of defects
(ii) Manage the procurement of operations and maintenance manuals, guarantees and warranties.
(iii) Manage the preparation as‐built drawings and documentation
(iv) Manage the procurement of outstanding statutory certificates
(v) Monitor, review and issue payment certificates
(vi) Issue the completion certificates
(vii) Manage the agreement of the final accounts
(viii) Prepare and present the project closeout report
• Completion certificates • Record of necessary meetings • Project closeout report
APPENDIX B
CIDB TABLES TO ASSIST COMPILING TENDER DOCUMENTS
Table B‐1: Documents Relating to the Tender
T1 Tendering procedures
T1.1 Tender Notice and invitation to Tender
Alerts tenderers to the nature of services required by the client; should contain sufficient information to enable an appropriate response.
T1.2 Tender Data States applicable conditions of tender and establishes the rules applying from the time tenders are invited to the time a tender is awarded.
T2. Returnable documents
T2.1 List of Returnable documents
Ensures that everything the client requires a tenderer to submit with his tender is included in his tender submission.
T2.2 Returnable Schedules
Contains documents the tenderer is requested to complete for the purpose of evaluating tenders and other schedules which upon acceptance become part of the subsequent contract.
Table B‐2: Documents relating to the Form of Agreement
C1. Agreements and Contract Data
C1.1 Form of Offer and Acceptance
Formalises the legal process of offer and acceptance
C1.2 Contract Data States applicable conditions of contract and associated contract specific data, which collectively describe the risks, liabilities and obligations of the contracting parties and the procedures for administration of the contract. For consulting engineering services this would be an Agreement, as opposed to General Conditions of Contract used for construction services.
C2. Pricing Data
C2.1 Pricing Instructions Provides criteria and assumptions, which it will be assumed (in the contract) the tenderer has taken into account in developing his Financial Offers.
C2.2 Activity Schedule or Schedule of Tasks
Records the Financial Offers to provide the services, which are described elsewhere ‐ in the Scope section.
C3. Scope of Services and Scope of Work
C4. Site Information
This is generally not required in procurement of consulting engineering services, being applicable to construction services contracts only. However to ensure uniformity in tendering, available information on prior studies, existing services etc should be included.
Note: For ease of identification of the various sections each section should be colour coded with different coloured pages or separated with coloured paper as suggested by SANS 10403 (see tables below).
T1.1 ‐ Tender Notice & Invitation to Tender ‐ White forms
This is a statement alerting tenderers to the request for proposals which should include the closing date and delivery address for tenders as set by the client as well as any other references or markings to identify the tender.
It should be in a form which can be published as an advertisement to tenderers.
Note that the Public and Municipal Finance Management Acts require minimum periods between advertising and closing dates.
T1.2 ‐ Tender Data ‐ Pink forms
This establishes the rules to apply from the time tenders are invited to when they are awarded. The rules:
• bind client and tenderer to behave in a certain manner
• include requirements for a compliant tender,
• require provision of feedback on the outcomes of the process.
• state the tendering procedures to be observed
• state documentation to be submitted with tenders
• indicate how the client will conduct the process of evaluating tenders
• indicate that tender offers may only be evaluated in accordance with the evaluation criteria stipulated in the procurement documents.
For consulting engineering services Quality criteria used in evaluation of tender offers should form an integral part of the tender offer and hence the outcome of the procurement.
T2.1 ‐ List of Returnable Documents ‐ Yellow forms
This List is to ensure that everything the client requires a tenderer to submit with his tender is included. It indicates exactly what is wanted and is useful in determining at the outset if a tender is responsive to the client’s requirements.
It is costly and time consuming to prepare tenders; therefore only information which is essential for evaluation purposes of the tender concerned should be listed. It is always possible to obtain further information from short‐listed tenderers.
T2.2 ‐ Returnable Schedules ‐ Yellow forms
This section must contain documents which the tenderer must complete for the evaluation of tenders and other schedules which upon acceptance become part of the subsequent contract. The Municipal Finance Management Act specifically requires particulars concerning company details, tax clearance, and disclosure relating to individuals connected with the tenderer being in service of the state.
The inclusion of the CIDB‘s Compulsory Enterprise Questionnaire will enable these and other legal requirements to be satisfied.
C1.1 ‐ Form of Offer and Acceptance ‐ Yellow forms
This formalises the legal process of offer and acceptance and contains
• firstly the offer to provide the services for a Financial Offer,
• secondly the Client’s acceptance, thus creating a contract, and
• thirdly a schedule of deviations recording changes agreed between receipt of offer and award of contract.
The CIDB’s Standard for Uniformity in Construction Procurement provides wording for the Form of Offer and Acceptance to be used with the schedule of deviations. This schedule serves as a record of the outcomes of any negotiations between offer and acceptance. Note this applies only to deviations from the tender documents as issued by the client prior to closing date.
A tenderer’s covering letter should not be included, but any matter in such letter constituting a deviation and the subject of agreement reached during the offer/acceptance process, should be included, and any other matter arising from the process which is agreed by the parties as being an obligation of the contract, must be included.
The start date of the contract should be identified in this section, but this must be aligned with the contract start date defined in the Agreement, see Section C.1.2
C.1.2 ‐ Contract Data ‐ Yellow forms
Reference must be made here to the contract conditions in the Agreement applying to the services being procured. This should preferably be one of the standard industry agreements applicable to consulting engineering services, such as published by Consulting Engineers South Africa (CESA) or FIDIC, or the NEC.
Note that for consulting engineering services in South Africa, the CIDB Standard Professional Services Contract may also be employed. Note also that if a standard form of agreement is used it may be referenced, and need not be included in the contract documents.
The Contract Data must :
• Identify applicable standard of contract plus all contract‐specific variables appendices etc.
• be divided into two parts – Data provided by client and Data by the consulting engineer (if required)
• not provide for variations and additions which change the intended usage of the identified standard form of contract
• provide for Financial Offer adjustments (usually if the contract period exceeds one year)
• include interest on monies due to the consulting engineer, to deter late payment.
• where payment is on a basis of time + cost, or cost + a fee, include mechanisms to allow audit of costs and Financial Offers
• allow realistic delivery periods and time frames for completing the work
• provide for cost‐effective dispute resolution procedures, preferably through mediation, adjudication, or arbitration (with litigation as a last resort) The procedures advocated by the CIDB in its Construction Procurement Best Practices, or in the standard contract conditions of the bodies above, should be referred to in this regard.
C1.3 ‐ Form of Guarantee/ Securities ‐ White forms
For consulting engineering services a guarantee should not normally be required since the client’s interests can be protected by the Professional Indemnity Insurance policy of the consulting engineer. The client may however state the minimum level of professional indemnity insurance cover to be provided by the consulting engineer for the project in question.
C1.4 ‐ Adjudicator’s Contract – White forms
Dispute resolution by means of Adjudication is most frequently applied in construction contracts but Adjudication can be used in procurement of consulting engineering services, particularly for large, complex or multidiscipline assignments.
The adjudicator is appointed by both parties, who share the costs of adjudication, therefore the Adjudicator’s contract should be included in the contract document between client and consulting engineer. Adjudication can be done by an individual, or a single or three person Dispute Adjudication Board (DAB).
The formalities for appointing the Adjudicator or DAB should if possible be completed when the contract is signed. The actual appointment of the person(s) should preferably be done at start of the contract, for adjudication to be most effective, as opposed to waiting until a dispute manifests itself, then having to develop the contract and agree whom to appoint.
Typical forms of contract for the Adjudicator are to be found in CIDB Practice Guide No. C3, or in the documentation issued by the SAICE (GCC), FIDIC, JBCC, or NEC.
C.2.1 ‐ Pricing Data/ Instructions ‐ Yellow forms
The pricing data contains the pricing assumptions describing the criteria and assumptions which the tenderer has used in developing his Financial Offers.
The CIDB Standard Conditions of Tender address issues such as Taxes in rates, VAT, currencies, non‐erasable ink and correction of arithmetic errors.
For consulting engineering services the above requirements apply in principle; Pricing Data is defined in the CIDB Standard Professional Services Contract as data that establishes criteria and assumptions taken into account when developing the Contract Price and the record of the components that make up the Contract Price.
Other Professional Services Contracts provide for payment mechanisms according to the risk allocation options adopted by the client. For instance the NEC 3 Professional Services Contract allows risk allocation Options A, C, E, and G and the compiler is referred to the guidance notes and flow charts which accompany the NEC3 PSC for details.
The Councils for the various built environment professions are empowered through legislation to publish annually in the Gazette, after consultation, guideline professional fees. For consulting engineering services there are two documents of reference – the Guideline Scope of Services and Tariff of Fees for persons registered in terms of the Engineering Profession Act, 2000, and the Indicative Time Based Fee Rates.
In the context of tendering, consulting engineers are not bound by the gazetted fees and are free to Financial Offer for their services as they deem fit. The gazetted fees are nonetheless referred to, in order to provide a benchmark against which to compare tender Financial Offers received and to gauge the ”Value” of the Financial Offers..
C2.2 ‐ Activity/Work Schedule ‐ Yellow forms
For consulting engineering services this is generally in the form of activity schedules or schedules of tasks to be undertaken in each Stage of the assignment. The pricing data must reflect the selected pricing strategies. Commonly accounted strategies as described in the CIDB’s Compiler guidance notes of the Construction Procurement Toolbox can be used as a guide.
C3 ‐ Scope of Services/ Scope of Work ‐ Blue forms
As stated above, “Scope of Services” describes the types of services to be provided by a consulting engineer responsible for design and/or construction monitoring of the project being constructed. Where “Scope of Work” is used in context of consulting engineering services, this applies to the manner and extent to which the services are applied to the project in question.
The Scope of Services to be provided by a consulting engineer is described in detail in Chapter 3 of these Guidance Notes. This is based on nationally recognised stages of planning, design and construction of the project, with listing of key tasks required of the consulting engineer both as design professional and additionally as principal consultant of the client. For both cases, typical deliverables are also listed (also refer Section 4.4.7 of the SFU)
C4 ‐ Site Information ‐ Green forms
This section is used for engineering and construction works contracts only, and is compiled specifically for the project. Consequently it is not dealt with here (however to ensure uniformity in tendering, available information on prior studies, existing services etc should be included).