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Prequalification in civil engineering

Prequalification

It is to make an evaluation of capacity of an organization. Organization includes:

1. Clients (Who pays)


2. Consultant (who appointed by the client to do the design and supervise the
construction work.)
3. Contractor (Who builds)

Leading clients in Government sector

In Government sector leading clients are:

 WAPDA (Water and Power Development Authority)


 NHA (National Highway Authority)
 Pakistan Railways
 Irrigation and power department
 Communication and works department (C & W)

Leading clients in Private sector

In private sector leading clients are:

 Bahria Developer
 Eden Developers
 Tricon developers (Real estate developers, Tricon village)
 Atlas Honda
 Coca Cola
 Suzuki
 Pepsi
 Nishat Mills
 KFC

Leading consultants

Leading consultants are:

 NESPAK
 ACE (Allied Consultant Engineering)
 AAA consultants
 REC (Republic Engineering Consultant)
 NDC (National Development Consultants)
 Noor Durrani Associates
Leading contractors

Leading contractors are:

 Descon
 Izhar Group
 Banu Mukhtar
 Habib Rafique
 SKB Engineering
 FWO

Examples of Projects

Construction of Islamabad to Peshawar Motorway (M-1)

 Client NHA
 Consultant Pakistan motorway consultants(National Highway Authority has
appointed Pakistan Motorway Consultants comprising of M/s Engineering Consultants,
M/s A.A. Associates, M/s Engineering Associates, M/s Snowy Mountain Engineering
Corporation and M/s Lois Berger Int. for providing design review and construction
supervision services for the project.)
 Contractor Pakistan motorway contractor

Construction of Pace tower in Gulberg

 Client Pace Pakistan


 Consultant Noor Durrani
 Contractor Pace Paksitan

Construction of flyover on Mughal Pura Canal Crossing

 Client C&W
 Consultant NESPAK
 Contractor FWO

Joint Venture or Consortium

If the services required in construction projects is more than the capacity of one single
organization, then often more than one organization combine to undertake the design,
supervision or construction of the project.

Example: Benazir Bhutto international airport (IKAN & Hussnain cotex)

Verification of the company

 Prequalification of “Design Consultant” is by client.


 Prequalification of “Contractor” is by client and Design Consultant.
 Prequalification of “Supervision Consultant” is also by client and Design consultant.
Note: Major Authority and decision stands with the client.

Criteria’s of Prequalification

An organization has to undergo through two phases of prequalification:

1. Technical ability
2. Financial ability

1-Technical ability

Major requirements in technical ability evaluation are:

 Registration of company with PEC.


 Registration of company with government and private client.
 List of Past projects.
 List of present projects in hand.
 List of technical staff.
 List of registered office with telephone, fax and e-mail addresses.
 List of equipment and machinery (for contractor only)

2-Financial ability

Major requirements in financial ability evaluation are:

 Bank reference certificate for successful maintenance of accounts.


 Latest bank statement.
 Income tax registration certificate.
 Sales tax registration certificate.
 National tax number (NTN)
 Litigation or arbitration certificate.
 List of costs of Past and Present major projects.

Notes: In short duration project we check financial ability.


In Intermediate duration project we check 50% FA & 50% TA.
In long duration project we check Technical ability.
Client always give the prequalification notice in newspaper in form of advertisement.

Assignment
a) Required to collect any Prequalification notice from any newspaper for design
consultant, contractor and supervision consultant.
b) Bring tender notice.
Tendering process in Civil engineering
Tendering Process:

A Tender Process is a method by which suppliers are selected for the provision of products and
services to an organization. The process involves creating a suite of Tender Documents to manage
the supplier selection process. The Tender Documents help the organization to select the best
possible supplier available.

Tender means to offer or present something formerly.

Definition: A written offer to contract goods or services, at a specified cost or rate. (i-e a bid)

Example of tender notice

Steps involved in tendering process

 After the prequalification of selected companies, these companies are brought in stage
of tendering. Only prequalified company can enter the tender notice.
 For tendering minimum 3 companies are required.

It comprises 3 parts in civil engineering.

1. Tendering of design consultant


2. Tendering of contractor
3. Tendering of supervision consultant

1-Tendering of design consultant

Tendering of design consultant can be done immediately after prequalification of design


consultant. However, the tendering of contractor is impossible unless the design consultant
finished the preparation of tender document.

 The fee or charges of design consultant is either based on lump sum basis or %age against
the total cost of the project.
 In lump sum contract, design consultants are asked to submit a single lump sum cost for
the work and smallest bid is picked by the client.

Note: normally design consultant rate varies 2-8% of total cost of the projects.

The minimum design consultant fee asked or bid by the prequalified design consultant is selected
for the project and a formal contract is established between client and design consultant.
Vetting consultant

The vetting consultant is company involve in the project by client to check the work of design
consultant. It is the consultant who is checking the design consultant. (It is very rare)

2-Tendering of contractor

After the preparations of tender documents by design consultant and selection of contractor
through the prequalification process, the client or design consultant can start the tendering of
contractor.

Only the pre-qualified contractor is allowed to participate in tendering process. The client or
design consultant gives the advertisement with the title “Tender notice”. (Tender notice is a legal
requirement)

Tender Notice includes:

Tender Fee:

The client or design consultant is issuing the tender document through prequalified
contractor only after the payment of tender fee. A tender fee is a fee mutually agreed
between client and design consultant for the cost of printing of tender documents and to
hold the tendering process. Generally, more the cost of the project more is the tender
fee.

Date, time and place of opening of tender:

In tender notice advertisement, tender fee, tender submission time, time and date of
opening of tender, place of opening of tender and conditions for the contractor
participation are described.

Security deposit or Tender guarantee:

Registered contractors are usually required to submit a specific sum as security or earnest
money deposit to be adjusted against work done, normally in the form of Bank Guarantee
or Surety.

The contractors who are prequalified and interested to participate in tendering are
required to deposit 2-5% of the tender cost as tender guarantee. The tender security can
be in the form of demand draft (D.D) or insurance company guarantee. The tender
guarantee is required for the reason that the lowest tender should not withdraw from the
project.

The bank or insurance guarantee is a legal document on stamp paper with undertaking
by the bank that if contractor will not take the project than the bank will pay the client
the tender security. The tender security of a successful contractor remains with the client
and for others it is returned with 30-90 days after opening the tender.

The tender document should be properly sealed and submitted to client before the official tender
opening date.

The tender document submitted by each company is opened by client in presence of contractor
representative.

Any tender not accompanied by tender security will not be considered during tendering.

On the day of opening of tender only the cost highlighted on the summary page of BOQ is
announced and the unofficial lowest tender is selected.

Then the complete checking of BOQ is carried out based on the final analysis a comparative
statement of tendering contractor is established and the lowest company is selected for the
project.

Non Responsive Tender:

Any incomplete or error based tender is known as non responsive tender. If two tenders come
on the same price then they are allowed to retender their BOQ and who so ever is coming lowest
is selected for project.

3-Tendering for supervision consultant

If for a project the supervision cost of design consultant is more than the budget of client, or
design consultant don’t have in house supervision capability or if design consultant is overloaded
with no. of projects than in that case an independent supervision consultant has been engaged.

If design and supervision consultant are same than at the time of design tendering supervision
charges are also included. However if supervision consultant is separate then the supervision
charges can be asked in tendering process in any of the following modes:

1. Lump sum basis


2. Percentage against total cost of project
3. On monthly basis

Depending upon the requirement of project any of the above modes of tender fee is selected.
Only the prequalified design consultant can participate in the tender of supervision consultant.

The scope of services of supervision consultant is to:

Implement tender with respect to construction and to ensure the quality in scope, schedule
and budget of the project.

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