CE-898

Contract Management

TITELMASTERFORMAT DURCH KLICKEN BEARBEITEN

Lecture No. 04

Dr.-Ing Abdur Rehman Nasir

Assistant Professor
Department of CE&M
Dr.-Ing Abdur Rehman Nasir
Assistant Professor of Construction Engineering and Management
1
NIT (SCEE), NUST H-12, Islamabad 04.10.2019
NIT (SCEE), NUST H-12, Islamabad
CE-898
Contract Management

Topics to Cover
Prequalification
Standard procedures for prequalification of Contractors
Standard procedures for prequalification of Consultants

Annexures provided with this lecture

• PEC Standard procedures for prequalification of Constructors
• PEC Standard procedures for prequalification of Consultants

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 2
CE-898
Contract Management

What is prequalification?

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 3
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Contract Management

Prequalification
 Qualification in advance to take part in something. – Oxford Dictionary

 Preliminary stage in a bidding process where it is determined if an applicant

has the requisite resources and experience to complete the job as required. –
Businessdictionary

 to qualify beforehand (e.g. for a preliminary stage or shortlist) – Free Dictionary

 Pre-qualification is an assessment made by the Employer, of the appropriate

level of experience and capacity of firms expressing interest in undertaking a
particular contract, before inviting them to bid. – PEC
Dr.-Ing Abdur Rehman Nasir
Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 4
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Contract Management

Prequalification in construction industry

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 5
CE-898
Contract Management

Prequalification in construction industry

 In case of complex job or prestigious works where stakes are high,
“prequalification” system is adopted.
 This is necessary to involve only reliable, resourceful and efficient parties in
the bidding.
 The interested parties are asked to present documents for pre-qualification by
submitting proof of their merits on the basis of the criteria such as past
performance, financial soundness, technical competence, resourcefulness
pertaining to equipment and skilled manpower.
 Tenders are invited only from these prequalified firms.

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 6
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Contract Management

Aim of prequalification

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 7
CE-898
Contract Management

Aim of prequalification
 The basic aim of the prequalification is intended to eliminate, early in
procurement proceedings, Constructors that are not suitably qualified to
perform the Contract.

 Also some times Constructors are reluctant to participate in procurement

proceedings for high value Contracts, if the competitive field is too large and
where they run the risk of having to compete with unrealistic tenders
submitted by unqualified or disreputable Constructors.

 Pre-qualification is also helpful for providing a chance for selection of smaller

constructors under “Slice and Package” system of tendering.
Dr.-Ing Abdur Rehman Nasir
Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 8
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Contract Management

Prequalification is the basic tool to….

i. Encourage realistic bids by the Bidders because they know that they are
competing against qualified bidders who have cleared the minimum
competence criteria;
ii. Assess the interest of the prospective bidders in the bidding process;
iii. Make any adjustments/modifications in the bidding documents if a pointer is
available from the lack of interest by the prospective bidders applying for
prequalification;
iv. Reduce the effort and so the time in evaluation of bids from un-qualified
bidders;

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 9
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Contract Management

Prequalification is the basic tool to….

v. Help the bidders to evaluate and take stock of their capability and
consequently to form joint ventures with other firms;
vi. Reduce the problems associated with low priced bids from bidders of
doubtful capability and;
vii. Help the bidders who are insufficiently qualified to avoid the expense of
bidding.

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 10
CE-898
Contract Management

PEC Standard Procedure for

Prequalification of Contractors

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 11
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Contract Management

Invitation for Prequalification

i. Invitation for Prequalification Notice be advertised through on PEC & PPRA’s
Web site and other relevant/available forum for procurements estimated to
cost more than Rs. Forty Thousand (40,000/-) and also through press when
procurement is estimated to cost more than Rupees one million. The
invitation shall be open to all applicants licensed by PEC in the respective
category besides specific requirements of the User if included in the
document.
ii. Generally not less than six (6) weeks shall be provided for
preparation/submission of applications by the applicants. However for
large/complex projects the period may be extended upto twelve (12) weeks.
Dr.-Ing Abdur Rehman Nasir
Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 12
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Contract Management

Invitation for Prequalification

iii. It is preferable to package a project in such a way so as to allow medium
sized construction firms to bid. Also preference to provide benefit to local
construction Industry in Pakistan shall always be considered. Therefore the
Project, if it can be divided into packages, the User may do the same.
However Employer/User may decide the packages keeping in view of
interfacing and co-ordination problems as a result of smaller packaging of a
Project.

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 13
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Contract Management

Invitation for Prequalification

iv. Under para 7 of Invitation for Pre-qualification, minimum requirements have
to be specified.

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 14
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Contract Management

General prequalification guidelines by PEC

For guidance, the following may be considered; however the Employer/User can
fix his own criteria depending upon nature, size and requirements of the specific
projects.
S. No. Category Weightage
1 General Experience 35
2 Personnel Capabilities 15
3 Equipment Capabilities 20
4 Financial Soundness 30
Total 100

Note: Prequalification status shall be decided on the basis of Pass/Fail basis.

The applicant must secure at least 50% score in each category.
Dr.-Ing Abdur Rehman Nasir
Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 15
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Contract Management

General prequalification guidelines by PEC – General experience

(a) General Experience
Credit Marks for experience shall be awarded on the basis of following qualifications:
Sr. No. Description Max. Points
i) Projects of similar nature and complexity
completed over latest 10 years. 15

ii) Projects of similar nature and complexity in hand

during last 10 years. 10

iii) Experience of Works related to project but not

basic part. 5
iv) Status of enlistment with Government Organizations
and other agencies. 5
Sub-total: 35

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 16
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Contract Management

General prequalification guidelines by PEC – Personal capabilities

(b) Personnel Capabilities
Credit Marks shall be awarded under this category using the following criteria:

Sr. No. Description Maximum Points

i) Graduate Engineers Registered with PEC
a) Number of Engineers 6
b) Experience of Engineers in number of years 3

ii) Number of Diploma Engineers in Employment of the Firm

a) Number of Engineers 4
b) Experience of Engineers in number of Years. 2

Sub-total: 15
Dr.-Ing Abdur Rehman Nasir
Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 17
CE-898
Contract Management

General prequalification guidelines by PEC – Equipment capabilities

(c) Equipment Capabilities
Credit Marks shall be granted on the basis of the following criteria for various kinds of equipment
relevant for the Project:

Sr. No. Equipment Type and Characteristics Max. Marks

1. List of relevant equipment Assign Marks
2.
3.
4.
5.
6.
7.
8.
9.
10.
Sub-total: 20

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 18
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Contract Management

General prequalification guidelines by PEC – Financial soundness

(d) Financial Position
Credit Marks shall be awarded on the basis of the following criteria:

Sr. No. Description Max. Marks

i) Available Bank Credit Line 5
ii) Working Capital in last 3 years. 5
iii) Registration with Income Tax Department 5
iv) Litigation History where decision went against
the Firm. 5
v) Blacklisting from any Agency 5
vi) Valid License for other related items of Work 5
Sub-total: 30
Dr.-Ing Abdur Rehman Nasir
Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 19
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Contract Management

Examples of Prequalification notice

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 20
CE-898
Contract Management

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 21
CE-898
Contract Management

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 22
CE-898
Contract Management

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 23
CE-898
Contract Management

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 24
CE-898
Contract Management

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 25
CE-898
Contract Management

Prequalification of Consultants

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 26
CE-898
Contract Management

Prequalification of Consultants
Importance & Philosophy
 Prequalification of Consultants is an important step in the selection process to
ensure high quality proposals for a meaningful proposal evaluation in shorter
time for grading of firms in order to have an ultimate selection of suitable
consultants.
 It may be remembered that registration of firms in general terms is not a
substitute for Prequalification before inclusion in the shortlist.
 The qualifications and experience of the qualifying consultant should be such
as to reflect its previous association with such kind of project(s) and capability
to handle the project with dexterity.
Dr.-Ing Abdur Rehman Nasir
Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 27
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Contract Management

Why prequalify consultants?

Prequalification and short-listing of Consulting Firms from the long-list has
following inherent benefits not only for the client formations but also for the
consulting profession and the consultants themselves:

• Encourages consultants to prepare high quality proposals.

• Increases the possibility of selecting most suitable consultants.
• Facilitates a closer and meaningful evaluation of Technical Proposals.
• Reduces time for evaluation of proposals.

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 28
CE-898
Contract Management

Why prequalify consultants?

• Reduces the chances for extraneous influences.
• Reduces the cost of business development of consulting houses which is part
of consultants’ overhead costs and ultimately chargeable to the clients.

Cost of business development: the costs a business incurs from researching, growing and introducing a new
product or service

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 29
CE-898
Contract Management

Notice for prequalification

 The PEC Bye-Laws require the client formations to ensure equal and unbiased
opportunity to all the eligible firms i.e. the ones registered/licensed by the PEC
to practice engineering profession in Pakistan.

 The Notice must be publicly notified along with scope of work of the project
for which the services of a consultant are required.

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 30
CE-898
Contract Management

Notice for prequalification

In addition to the previous, the client formations may also seek their Expression
of Interest (EOI) from the following:
 Firms which have previously satisfactorily performed similar services for the client on
a similar project.
 Firms having already applied to the client and communicated their EOI prior to
issuance of public notification.
 Firms which have been involved in an earlier activity on the project e.g. feasibility
studies before services are to be procured for detailed design and other activities
that follow.
 Firms selected on the basis of data on consultants obtained from the PEC’s Data
base.
Dr.-Ing Abdur Rehman Nasir
Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 31
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Contract Management

Evaluation criteria
 There are two essential elements for judging the capability of any firm to
perform credibly on a given project.
 These are its previous experience on similar projects and its professional staff
having the specific expertise to meet its obligations during the assignment.
 It is essential that appropriate importance / weightage is assigned to each
item.
 It is recommended that it should be assigned in the following ratio:-
− Experience of the firm .. .. .. .. .. .. 30 percent points
− Quality of its Personnel’s expertise .. .. .. .. 70 percent points
Dr.-Ing Abdur Rehman Nasir
Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 32
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Contract Management

Evaluation criteria
 The committee constituted to compile the shortlist should also decide about
the threshold minimum score for the firms below which limit they would not
be considered for prequalification and inclusion in the shortlist.

 The threshold should be fixed at minimum of 60% of the total points.

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 33
CE-898
Contract Management

Examples of Prequalification notice

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 34
CE-898
Contract Management

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 35
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Contract Management

Thank You!

Any queries??

Dr.-Ing Abdur Rehman Nasir

Assistant Professor of Construction Engineering and Management 04.10.2019
NIT (SCEE), NUST H-12, Islamabad 36