PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Procurement Management
Concept of Procurement (4 hours)
1.1 Definition
1.2 Difference between Public and Private Procurement
1 .3 Procurement of Works, Goods and Services, and Consulting Services
1.4 Procurement Cycle

Definition:
Procurement is a business management function that manages the entire process of acquisition of
the external resources in an efficient and economical manner.
Economical, efficient and quicker procurement:
 Improves profitability
 Captures large share of market
 Reduces time from design to market
 Improves customer satisfaction and competitive value
 Enables better products and services, faster and customer friendly channels of distribution and
mass customization

Public Procurement
Public procurement refers to the purchase by governments and state-owned enterprises of goods,
services and works. As public procurement accounts for a substantial portion of the taxpayers’
money, governments are expected to carry it out efficiently and with high standards of conduct in
order to ensure high quality of service delivery and safeguard the public interest.
Public organizations:
 Ministries
 Departments and officers under their jurisdiction
 Public enterprise
 Provincial and local level government
 Public sector companies
 Authorities
Public procurement refers to procurement of external resources needed by the central government
or state governments and the entities under their control.
Public procurement includes acquisitions of external resources using public funds. It also uses any
other source of funding, such as grants and gifts
The aims of procurement are the 5 R’s of procurement. They are:
 Right quality
 Right quantity
 Right price
 Right time and place
 Right source
The goal of public procurement is to award timely and cost-effective contracts to qualified
contractors, suppliers and service providers for the provision of goods, works and services to
support national and local government, and public services operations, in accordance with
principles and procedures established in the public procurement rules.

COMPILED/PREPARED BY: SUBASH BHATTARAI 1

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Difference between Public and Private Procurement

Public Procurement:
This is procurement that is completed within the context of not-for-profit organizations (NFP’s).
Also known as the public sector, the procurement that occurs in this context is typically government
affiliated, which can be central, state, or local.
Private Procurement:
This is procurement that is completed within the context of for-profit organizations (FP’s). Private
procurement happens within privately owned companies; also known as the private sector

The following seven principles differentiate between public procurement and private procurement.
 Transparency
 Responsiveness
 Professionalism
 Constitutional provision
 Multiplicity
 Public accountability
 Transactions

Principle of Procurement
The key principles related to procurement. These are: value of money, ethics, competition,
transparency and accountability.
1. Value for money
The most important and valuable principle of procurement is value of money. This is defined as
“the optimum combination of whole-life costs and quality or fitness for purpose to meet the user
requirement”. Quality standards are maintained by evaluating cost and benefits of whole life basis
including a judgment of risk to all stakeholders. In construction sector, value for money is very
important factor but difficult to maintain specially in public sector due to lack of universal
methodology to follow
The minimum value of cost should not be taken in value of money. But in some countries lowest
quoted price is prioritized than other criteria’s for example, technical capabilities, experience and
past performance records, qualifications of key personnel) in awarding contracts to respective
suppliers. The main barriers which lead to hamper the value for money are weak governing bodies,
traditions, improper plans, politics, and lack of awareness and training programmers
2. Ethics
Ethics is another important principle of procurement after value of money. It is a systematic
manner to construct sense of all individual and social moral experience with all human conduct
rules. Purchasing professional require higher standards of ethical conduct with professional
awareness other than professions.
3. Competition
Competition in procurement is a most essential part to maintain the quality, cost and time. The
competitive tendering is a critically secured in case of purchasing goods as well as services. In
competition process there is trustworthiness of the all bidders, prices are compared between the
bidders and finally most competitive and suitable bidder is awarded with the tender. The tender
notice is the most important source of information for all suppliers and bidders. The wrong data

COMPILED/PREPARED BY: SUBASH BHATTARAI 2

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

and lack of complete information in the tender notice create misunderstanding and increase cost.
So, qualitative information in notice is most essential part of tender. The procurement rules help
in creating competition in markets and improve quality.
4. Transparency
The function of transparency is a significant part of procurement and it shows openness. The
transparency helps to ensure accountability and reduce corruption and gives importance to
Organizations for Economic Cooperation and Development (OECD) and raise the objectives of
government as core governance value Government procurement is an area where corruption is
uncontrolled in most developing countries. Transparency requires governments to stick higher
standards of performance and ensuring that performance to be open to survey.
The transparency of the procedure used in awarding contracts and agreement to the supplier is
challenging due to interference created by officials and political parties. Construction procurement
also requires transparency in the public and private sector to provide a commitment for both
domestic and foreign investors where contract will be awarded in an honest and fair manner. The
lack of transparency regarding rules and practices can create a barrier to trade and affect foreign
suppliers than locals in other sectors as well. Transparency promotes trust and confidence between
stakeholders and judge the quality of government actions and decisions. Nowadays transparency
is an increasing demand worldwide and corruption is very strongly controlled in awarding
government contracts. Hence the transparency in procurement helps in corruption control.
5. Accountability
In both national and international levels, accountability is important for government procurement.
The national level public sector, managers should deal more competitive environment. The
complex competitive environment associated with risk may elevate accountability problems. The
main reason of accountability problem is due to unclear roles and responsibilities of the
participants in the process of procurement. The concept of accountability should apply both in
public and private sectors to provide better services. Procurement also includes other different
issues as well as “culture, leadership, management, economics, environmental, ethical and political
issues”.
6. Integrity
In public procurement, the principle of integrity is two-fold. There is the integrity of the
procurement process, and also the integrity of public procurement practitioners (the principal
guardians of the process).
Integrity translates to reliability. Bidders and all other stakeholders need to have assurance that
they can rely on any information disseminated by the procurement entity, formally or informally.
The integrity of the procurement process assures confidence in the public procurement process.
When solicitation documents are issued by the procurement entity, the information provided
should be reliable and free of uncertainty or predisposition.
When reviewing solicitation documents, prospective bidders should be able to determine their
interest and qualifications for the assignment. They also must be in a position to assess the need
for association with other bidders, and the type of association that they would be willing to engage
in given their qualifications and the requirements of the assignment in question.
Bidders should also have a clear understanding of the requirement, and know how they will be
evaluated. So the evaluation and selection criteria should be clearly expressed in the solicitation
document. These criteria should remain unchanged, unless there is a need to modify them. If
modification is required, the solicitation document should be amended (by addendum), published
and made available to all prospective bidders. Any changes in the bid/proposal submission date,

COMPILED/PREPARED BY: SUBASH BHATTARAI 3

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

should allow bidders sufficient time to adjust their bids/proposals accordingly to meet the new
deadline for submission of bids/proposals.
7. Economy
Synonymous with efficiency, value for money, and commercially reasonable price, the principle
of economy emphasizes the need to manage public funds with care and due diligence so that prices
paid for goods, services and works are acceptable and represent good value for the public funds
expended on them. Everyone associated with the public procurement process or directly
responsible for facilitating the acquisition of goods and services with public funds, should strive
to avoid fraud, waste and abuse of public resources; whether it is the result of over specifications
of required goods, paying unreasonably high prices for substandard goods, collusion with other
bidders, or other forms of unacceptable practices.
8. Openness
Public procurement requirements should be open to all qualified organizations and individuals.
The public should also have access to information pertaining to public procurement requirements.
Access to public procurement information is not absolute. Confidential and proprietary
information belonging to organizations and individuals participating in process should not be
available publicly, and the extent of their disclosure should be detailed in the procurement rules or
other relevant regulation. There are also procurement methods, such as restricted or selective
bidding, that limit the availability of solicitation documents to only those firms meeting certain
qualifications. The request for quotations (or shopping), and direct contracting (sole source) also
present certain limitations on competition given that the request for offers is limited to a certain
number and type of organizations or individuals. The evaluation of offers received is always kept
confidential until the evaluation panel reaches a final conclusion and after the evaluation report is
cleared by a designated approving authority. This would be defined in the procurement rules. Most
defense procurements are confidential, restricting relevant information to a “need-to-know” basis
only. Except for confidential defense procurements, the results of the public procurement process
should be published and made available on relevant websites. In addition, public procurement
information (except for confidential/proprietary information) should be open to all on a restricted
access basis.
9. Fairness
There are different interpretations of fairness in public procurement, so rather than define fairness
as treating all bidders equally, better to mention how fairness is achieved in public procurement.
To achieve fairness in the public procurement process:
 Decision–making and actions must be unbiased, and no preferential treatment should be
extended to individuals or organizations given that public procurement activities are
undertaken with public funds. • All offers must be considered on the basis of their compliance
with the stipulations of the solicitation documents, and offers should not be rejected for reasons
other than those specifically stated in the solicitation documents and the procurement rules.
 A contract should only be signed with the supplier, contractor or service provider whose offer
is compliant and best responds to the objectives of the requirement in terms of technical
capability and price.
 Suppliers, contractors or service providers should have the right to challenge the procurement
process whenever they feel they were unfairly treated or that the procuring entity failed to carry
out the procurement process in accordance with the public procurement rules. Such challenges
must be based on the solicitation documents and/or the public procurement rules.

COMPILED/PREPARED BY: SUBASH BHATTARAI 4

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Procurement of Works, Goods and Services, and Consulting Services

Works:
Works means all work associated with the construction, reconstructions, demolition, repair and
maintenance or renovation of a building or structure or and construction works such as railways,
roads, highways, site preparation, excavation, installation of equipment and materials, decoration
as well as services incidental to works, if the value of those services does not exceed that of the
works themselves”
Components of procurement of Works
 Construction works
 Purchase and supply of construction materials
 Equipment purchase and supply
 Consulting services
 Human resources
Goods:
Goods means raw materials, products and equipment and commodities in solid, liquid or gaseous
form, and electricity, as well as installation, insurance, transportation, maintenance or similar
obligations related to the supply of the goods if the value for such obligations does not exceed that
of the goods themselves.
Components of procurement of goods
 Substance or goods
 Goods and accessories (equipment, parts)
 Supply and installations of goods
 Installation consultancy, insurance, training etc.
 Technical manpower
Services:
Services, means any object of procurement other than works and goods, and are herein classified
as physical services assignments with measurable output and intellectual and professional services
assignments performed by consultants with outputs of advisory, design and transfer of know how
nature.
Consultant a variety of private entities, joint ventures or individuals that provides services pf and
advisory or professional nature. Consulting services covers range of services that are of an advisory
or professional nature and are provided by consultants.
Objectives of consulting services
 Solving specific problems
 Quality assurance
 Cost reasonableness technology transfer
 Technical know- how transfer
Type of consultants
 Individual consultant
 Firm or company of consultant
 Joint venture of consultants
 Non-governmental organizations
 International organizations

COMPILED/PREPARED BY: SUBASH BHATTARAI 5

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Public procurement steps for works, goods and services

Subject Goods Works Services
Procurement Preliminary Preliminary design, Preliminary
Initiation requirements, cost drawings, cost consulting
estimates estimates requirement
Final requirements, Deign, drawings, cost Technical consulting
technical estimates final and requirements, budget
specifications, cost approval allocation and
estimates approval approval
Bid evaluation criteria Bid evaluation and Preparation of Terms
and finalizing bidding bidding documents of reference, Proposal
documents preparation (either and Expression of
pre- or post- interest
qualification)
Approval of Bidding Approval of bidding Approval of TOR,
documents documents EOI and Proposals
documents
Notice and Invitation Bid invitations Pre-Q Notice or Post EOI publications
of Bids Q bid notice
Issuance of Bidding Issuance of Biding Issuance of TOR, EOI
Document Document and RFP documents
(which ever required)
Bid opening Receive of bids and Receive of bids and Receive of proposals
bid opening bid opening and bid opening
publically publically publically
Evaluation Determination of Determination of Evaluation of
Lowest Evaluated Lowest Evaluated technical proposal
Substantially Substantially and selection of best
responsive bids responsive bids consultant
(LESRB) (LESRB)
Issuance of Letter of Issuance of Letter of Opening of financial
intent to award the intent to award the proposal and
contract contract negotiation
Approval Contract agreement Contract agreement Contract agreement
Initiation of works Supply of goods Letter to contractor initiation of
for site mobilization consulting services
Installation and Work breakdown Start of assessment
services structure and start
Work completion Approval of goods Approval of works Approval for study

COMPILED/PREPARED BY: SUBASH BHATTARAI 6

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Procurement Cycle for goods

COMPILED/PREPARED BY: SUBASH BHATTARAI 7

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

COMPILED/PREPARED BY: SUBASH BHATTARAI 8

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Chapter 2:0
Procurement Planning (4 hours)
2.1 Plan and Planning
2.2 Need and importance of Procurement Planning
2.3 Master Procurement Plan
2.4 Planning and initiation of individual Requirements
2.5 Implementation Arrangements
Plan and Planning
Plan Procurement Management is the process of documenting project procurement decisions,
specifying the approach, and identifying potential sellers. The key benefit of this process is that it
determines whether to acquire outside support, and if so, what to acquire, how to acquire it, how
much is needed, and when to acquire it. The inputs, tools and techniques, and outputs of this
process are depicted in Figure below.

Most of the projects are failing due to improper plan and wrong estimate also fail to
implementation phase by human error. Procurement planning is depended on cost estimation of
project, specification of items, terms and conditions of bid documents, project schedule,
preparation of bidding document and selection of the procurement method. So, to avoid effect from
public procurement identification and formulation of the project on the basis of real need, well
preparation of procurement plan by skilled and experienced human resources.

Need and importance of Procurement Planning

Procurement planning is the process of deciding what to buy, when and from what source. During
the procurement planning process the procurement method is assigned and the expectations for
fulfillment of procurement requirements determined.

Procurement Planning is important because:

1. It helps to decide what to buy, when and from what sources.

COMPILED/PREPARED BY: SUBASH BHATTARAI 9

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

2. It allows planners to determine if expectations are realistic; particularly the expectations of the
requesting entities, which usually expect their requirements met on short notice and over a shorter
period than the application of the corresponding procurement method allows.
3. It is an opportunity for all stakeholders involved in the processes to meet in order to discuss
particular procurement requirements. These stakeholders could be the requesting entity, end users,
procurement department, technical experts, and even vendors to give relevant inputs on specific
requirements.
4. It permits the creation of a procurement strategy for procuring each requirement that will be
included in the procurement plan. Such strategy includes a market survey and determining the
applicable procurement method given the requirement and the circumstances.
5. Planners can estimate the time required to complete the procurement process and award contract
for each requirement. This is valuable information as it serves to confirm if the requirement can
be fulfilled within the period expected, or required, by the requesting entity.
6. The need for technical expertise to develop technical specifications and/or scope of work for
certain requirements can be assessed, especially where in-house technical capacity is not available
or is non-existent.
7. Planners can assess feasibility of combining or dividing procurement requirements into
different contract packages.
The Procurement Plan is the product of the procurement planning process. It can be developed for
a particular requirement, a specific project, or for a number of requirements for one or many
entities in the public or private sectors.

Vital questions asked when planning for procurement

COMPILED/PREPARED BY: SUBASH BHATTARAI 10

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Master procurement plan (MPP)

For a project to be operated for more than one year or procurement valued at an amount in excess
of one hundred million rupees master procurement plan shall be prepared
The master procurement plan shall contain following matters:
 Type, quantity and tentative estimated value of procurement
 Method of procurement
 Where procurement is broken up into lots or a package for maximizing
competition, provisions relating thereto,
 Tentative number of contracts to be made for the completion of overall
procurement proceedings and major activities that to such procurement
proceedings,
 Matters relating to prequalification proceedings, if required, for
procurement,
 Tentative time schedule for procurement proceedings,
 Such matters as may be determined from time to time by the PPMO to be
included in the master procurement plan
• MPP shall be approved by secretary of the public entity,
• MPP shall be updated in every financial year

Annual procurement plan (APP)

• If it is necessary to make procurement valued at an amount exceeding one million rupees
a year, annual procurement plan shall be prepared.
• In so preparing the procurement plan, it shall be prepared also based on the master
procurement plan, if any.
• APP shall be prepared along with estimated annual program and budget for the forthcoming
financial year, and shall be sent to following offices:
 Pertinent higher office
 Ministry of finance
 National planning commission (If required)
 Donor agency (Only if funded by donor)
• After receipt of approved annual program and budget, the APP shall be revised and shall
be sent to following offices:
 Pertinent higher office
 Treasury and account comptroller office
 Public procurement monitoring office
 Donor agency (Only if funded by donor)
• APP shall be approved by chief of public entity
• Following matters shall be set in APP:
o Description relating to the type of procurement,
o Possible package of procurement,
o Time schedule for procurement proceedings,
o Entering into contract
o Commencement of work and
o Completion of work
• While specifying time, following matters shall be taken into account:
 Minimum time required for stated activity as specified in PPA and PPR

COMPILED/PREPARED BY: SUBASH BHATTARAI 11

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 Time required for bidders to prepare tender

 Public holiday
 Work load and available manpower
 Time required to take concurrence from donors if required
• APP shall be revised in following situations:
 In case of non-availability of budget or delay for budget to be available
 If additional budget would be available
 If there is delay in approval from pertinent higher office
 If all bids have to be cancelled
 If program is revised
• while preparing APP it shall be ensured that adequate time is allocated for whole process
• Suggestion shall be taken and contribution shall be obtained from all concerned persons
within the organization as per requirement

The Procurement Plan is important because:

1. It lists all requirements expected to be procured over a period of time.
2. From it the procurement schedule is developed, which establishes the timelines for carrying out
each step in the procurement process up to contract award and the fulfillment of the requirement.
3. It allows for the consolidation of similar requirements under one contract or the division of a
requirement into several contract packages for economies of scale.
4. From the number of requirements on the procurement plan, the procuring entity can determine
beforehand any need for additional staffing, including external assistance for the purpose of
completing all procurement requirements listed on the procurement plan.
5. It allows for the monitoring of the procuring process to determine how actual performance
compares with planned activities, and thus to alert the pertinent departments and adjust the
procurement plan accordingly.
6. It enhances the transparency and predictability of the procurement process.

COMPILED/PREPARED BY: SUBASH BHATTARAI 12

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Chapter 3.0
Method & of Procurement (5 hours)
3.1 Open Competitive Bidding
3.2 limited Bidding
3.3 Sealed Quotations
3.4 Direct Procurement
3.5 Community Participation
3.6 Force Account

1. Sealed Competitive Bidding

A. National Competitive Bidding (NCB)
It is sometimes called as local competitive bidding. In this process all the eligible bidders are
invited to participate in bidding. For NCB, tender notice is to be published in national newspaper;
a period of at least 30 days shall be given. While stating the place from which the bidding
documents can be obtained, provision shall have to be made for obtaining such documents from
two or more than two public entities. NCB is necessary for public entity if estimated amount of
works greater that 20 lakhs or estimated goods is greater than 10 lakhs.
B. International Competitive Bidding (ICB)
If the amount of work is big and national/domestic contractors cannot perform the job, eligible
bidders are invited from all over the world. Such type of bidding is known as ICB. In this process,
tender notice shall be published in national newspaper in English language providing a period of
at least 45 days. Invitation to an international level bid shall be invited in any of the following
conditions:
 Where the goods or construction works as requisitioned by a Public Entity are not available
under competitive price from more than one construction entrepreneur or supplier within
the State of Nepal,
 Where no bid was submitted in response to invitation to national level bidding for the
procurement of goods, construction works or other services, and the same has to be
procured from abroad,
 Where under an agreement entered into with a donor party, foreign goods, or construction
works have to be procured from foreign assistance source,
 Where the Public Entity has certified that the goods or construction works, being of
complex and special nature, have to be procured through an international level bidding.

Case for NCB and ICB

• If cost estimates for works > 2 million to 100 million  NCB
• If cost estimates > 100 million to 500 million  ICB JV with National Bidders
• If Cost estimates > 500 million  ICB
2. Sealed Quotation
In the Public Procurement Act and Public Procurement Regulation, goods and other services
valuing up to one million Rupees and construction works valuing up to two million Rupees may
be procured by inviting a sealed quotation. Provision relating to Sealed Quotation is:
 Before inviting a sealed quotation, a form of sealed quotation stating clearly therein the
specifications, quality, quantity terms and conditions of supply and time and other necessary

COMPILED/PREPARED BY: SUBASH BHATTARAI 13

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

matters of the goods, construction work or other services to be procured shall have to be
prepared.
 In inviting a sealed quotation, a notice shall be published in a national or local level
newspaper by giving a period at least of fifteen days.
 The sealed quotation, once submitted, cannot be withdrawn or amended.
 The lowest evaluated sealed quotation falling within the cost estimate after fulfilling the
terms and conditions shall have to be approved.
3. Direct Procurement
Expendable or capital goods or consultancy services valuing up to three lakhs and construction
work valuing up to five lakhs Rupees may be directly procured. Provided that a construction work
under this Section cannot be directly procured from the same individual, firm, company or
organization more than one time in a fiscal year. But Nepali products goods valuing up to fifteen
hundred thousand Rupees may be directly procured.
Directly procurement can be done in the following conditions:
 If only one supplier or construction entrepreneur or consultant or service provider has the
technical efficiency or capacity to fulfill the procurement requirement,
 If only one supplier has the exclusive right to supply the goods to be procured and no other
appropriate alternative is available,
 If the service of a particular consultant with his unique qualifications is immediately needed
for the concerned work or where the service of same consultant is indispensable.

4. Works through Users Committee

Construction Works May be Caused to be Carried out by Users Committee or Beneficiary
Community. Cost estimate up to 10 million Rupees may be carried out or obtained from users
committee or beneficiary community. If economy, quality or sustainability is increased in having
a construction work carried out or obtaining services related thereto from the users committee or
beneficiary community or if the main objective of the project is to create employment and to have
the beneficiary community involved, such work may be caused to be carried by or such service
may be obtained from a users' committee or beneficiary community by fulfilling the procedure as
prescribed.

5. Works may be done by Force Account (Amanat)

"Force Account" means any construction work to be carried out by a Public Entity itself. It is the
execution of public works by using the resources of a public agency of the government, without
recourse to competitive bidding or negotiated contract. Works done by force account may apply
in following situation:
 The Size, nature and location of the works being unsuitable for competitive bidding.
 Works must be carried out without disrupting existing operations, by crews familiar with
those operations.
 When the implementing agency can bear the associated risks in a better way than the
contractor.
 No contractor is interested in carrying out the works.
 Emergencies.
 Institutional development

COMPILED/PREPARED BY: SUBASH BHATTARAI 14

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

6. Procurement under special Circumstances

 Emergency/special circumstances.
 It depends on contract amount.

7. Lump sum Method

• Works for which PQ is not required
• Cost estimates up to 2 Cr.
• Process as of NCB
• Bidders submit their price as a whole (% + or –of Cost Estimate) rather than unit rate
pricing.
• Not applicable for multi-year contract

8. CATALOGUE SHOPPING
• Feasible for procurement of Heavy Equipment, Vehicle, Tools, machines, X-Ray, MRI etc.
• Notice publication (7 to 15 days) targeting those companies readiness to supply
• Submission of catalogue or brochure including specification, quality and rate
• Bid security not required
• Shortlisting
• Request for financial proposal to shortlisted suppliers
• Evaluation and award
• Not applicable for multi-year project
9. Limited Tendering Method
• If the nature of work is unique and prospective bidder are limited (less than 3 numbers)
• 15 days bid notice or RFP
• Not Applicable for multi-year project
10. BUY BACK METHOD
• Feasible for goods
• Exchange of goods

COMPILED/PREPARED BY: SUBASH BHATTARAI 15

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

COMPILED/PREPARED BY: SUBASH BHATTARAI 16

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Chapter 4.0

Types of procurement
4.1 Unit Price Works (BOQ) contract
4.2 Lump Sum Contract
4.3 Cost Reimbursable Contract
4.4 Time and Material Contract
4.5 Design and Build Contract
4.6 BOOT, BOT Contract
Contract
According to Contract Act 2056 "Contract is an agreement between two or more than two persons
to do or not to do something, which can be enforceable by law". An Engineering Contract is a
mutual agreement negotiated between two parties for the purpose of undertaking, on a commercial
basis, certain clearly specified engineering work. The main objective entering to contract is to seek
legal action/remedies if any party breaches the contract.

"All contracts are agreements but all agreements are not contracts."
Agreement + legality = Contract
Agreement is the acceptance of the offer (proposal) with or without any condition. It may not have
legal obligation. But contract is an agreement concluded between two or more parties for
performing or not performing any work. The main objects or entering into contract is to seek legal
action/ remedies if any party breached the contract. An agreement is the consent between owner
and the contractor for a meaningful undertaking. It includes all the terms and reforms to executed
the job.

Elements of Contract
For a contract to be binding and enforceable by law, the following element must be present:
1. Offer and Acceptance
• If a person advances a proposal to a person, who gives his acceptance, contract exists. Offer
can be specific or general.
• If a person making proposal states that he should be given notice or acceptance of a
proposal within specified period, but doesn't receive such notice within such period then
no contract exists.
• If no time limit is specified in the proposal, then it must be accepted within reasonable
time.
• An offerer cannot bind the offeree by a stipulation that if the offerer is not given notice of
rejection then he shall be deemed to have accepted the offer.
• If the offerer dies or become insane (senseless) before his proposal is being accepted, then
no contract exists.
• If the offer gives his consent with revision then no contract exists.
• If the offerer offers proposal with condition to be fulfilled by the offeree before accepting
the proposal and the latter does not do so then no contract exists.
2. Consideration

COMPILED/PREPARED BY: SUBASH BHATTARAI 17

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

It is the cause, motive, price or impelling influence that induces a contracting party to enter into
contract. Consideration can be described as something of value that is exchanged by the
contracting parties.
3. Capacity to contract
For a contract to be legally binding and enforceable, all parties must be capable to enter into
contract. As per the contract act, the following persons are not capable of contract. Idiots,
drunkards, insane, and children below 16 years are not capable of signing contract.
4. Lawful purpose
Illegal contract are invalid. If two parties agree to perform a job, which is against the country
law, the contract is invalid.
5. Possibility of performance
Impossible contract is invalid. If two parties agree to build a house on air, which is impossible,
contract is invalid.
6. Free consent
Contract should not involve coercion, fraud, undue influence, deceit. Otherwise, contract is
invalid.
7. Certainty/ uncertainty
Contract which cannot be carried out because of various reasons (vague/ ambiguous etc.) are
not valid.
8. Legal Relationship
There should be a clear intention of parties to enter into contract i.e. all the necessary documents
should be fulfilled.
9. Written
Verbal agreement cannot be a contract.
10. Two or more competent parties
Contract is made between two or more parties.

Significance/ Importance of contracts

Contract is necessary:
 to make agreement legally enforceable
 to specify what the contractor must do and what the owner must pay
 to specify what will be done if either party fails to perform
 to specify the quantity and quality of work to be done
 to specify the time frame within which the work is to be completed and payment to be
made
 to set out in advance the courses of action that will be taken in different possible situations
 to define words and establish common meanings
 to specify what is and what is not included in contract
 to specify how the contract will be terminated
 to specify the responsibilities of the parties not just to each but also to third parties such as:
government, community in which work is to be done, workers, sub-contractors, material,
suppliers, unions etc

COMPILED/PREPARED BY: SUBASH BHATTARAI 18

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Types of Contract
Depending upon the magnitude and nature of the work, its special design needs, funding
requirements, complexities of the job and owner’s own preference, different types of contracts are
entered into. Contracts for any particular engineering project can be classified in the first instance
as either Main Contracts (sometimes referred to as Head Contracts) or Subcontracts.
The essential difference is that a Main Contract is directly between the Principle and a Main
Contractor, where as a Subcontract is between a Main Contractor and another contractor referred
to as a Subcontractor.

Engineering contracts, whether Main Contracts or Subcontracts, can further be classified in a

number of ways, each of which depends upon a particular characteristic or feature

(a) Unit- Price or Schedule of Rates Contracts

In this type of contract, the project is broken down into the work items that can be characterized
by units such as Cum, Sq.m, R.m, and Nos etc. The contractor quotes the price by units rather than
as a single total contract price. A guide quantity is given for each work item. Based on this guide
quantity, the contractor quotes a unit price for each item of the project work. The total price is
computed by multiplying the unit price by guide quantity and summing up the cost of whole the
items. The lowest reasonable bidder is determined and the contract is awarded.

In unit price contracts, the progress payments for the contractors are based on precise measurement
of the field quantities placed.

(b) Lump Sum or Stipulated Sum Contracts

This type of contract is the one in which the contractor based on the available complete set of plans
and specifications quotes one single price which covers all works and services required by the
contract plans and specifications. The lump sum price includes all direct costs of the contractor for
labor, machines, materials and indirect costs such as field and front office supervision, secretarial
support and equipment maintenance and support costs and also includes profit of the contractor.

(c) Cost plus Contracts

In a Cost plus Contract, the contractor is reimbursed the actual costs incurred in carrying out the
work under the Contract plus a fixed or variable fee to cover overhead costs and profit.
Four types of fee structure are common. They lead to the following cost plus types of
reimbursement schemes:
 Cost + Percent of Cost
 Cost+ Fixed Fee
 Cost + Fixed Fee +Profit Sharing
 Cost+ Sliding Fee

a. Cost + Percent of Cost

COMPILED/PREPARED BY: SUBASH BHATTARAI 19

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

This is the oldest form of fee structure. This form is very lucrative for the contractor but is subject
to abuse. There is little incentive to be efficient and economical in the construction of the project.
Just to the contrary, the larger the cost of the job, the higher the amount of fee that is paid by the
owner. If the cost of the job is Rs.40 million and fee is 2%, then the contractor’s fee is Rs.800,000.
If the cost increases to Rs.42 Million, the contractor’s fee increases by Rs 40,000

b. Cost+ Fixed Fee

In order to offset the abuse of cost plus percent approach, the fixed fee formula was developed. In
this form of contract, a fixed amount of fee is paid regardless of the fluctuation of the reimbursable
cost component. This is usually established as a percent of an originally estimated total cost figure.
The contractor’s fee is fixed and does not change due to variation of the project cost from the
original estimated cost. This form gives the contractor an incentive to get the job done as quickly
as possible in order to recover his fee over the shortest time frame. Because of the desire to move
the job as quickly as possible, however, the contractor may tend to use expensive reimbursable
materials and methods to expedite completion of the project.

c. Cost + Fixed- Fee +Profit Sharing

The fixed- fee plus profit sharing formula provides a reward to the contractor who controls costs,
keeping them at a minimum. In this formula, it is common to specify a target price for the total
contract. If the contractor brings the job in under the target, the savings are divided or shared
between owner and contractor. A common sharing formula provides that the contractor shares by
getting 25% of this under run of the target. If for instance, the target is Rs.10 Million and the
contractor completes the job in Rs9.5 Million, he receives a bonus of Rs.125,000.

d. Cost+ Sliding Fee

A variation of the profit sharing approach is the sliding fee, which not only provides a bonus for
underrun but also penalizes the contractor for overrunning the target value. The amount of fee
increases as the contractor falls below the target and decreases as he overruns the target value. One
formula for calculating the contractor’s fee based on sliding scale is,
Fee=R (2T-A)
Where,
T=Target price
R=Base percent value
A=Actual cost of the construction.

Advantages:
Advantages from Owner’s Position
 Permits reduction of design-construct time by utilizing phased construction.
 Quick reaction by the contractor to major design changes and minimizes the adversary
position.
 Opportunity to utilize contractor expertise during the design phase to help minimize overall
costs.
 The owner may participate fully in the management and control of the project. He may
participate in major decisions, or actually supply certain services or materials to the
contractors.

COMPILED/PREPARED BY: SUBASH BHATTARAI 20

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 The owner may achieve the advantage of eliminating marginal subcontractors as well as
achieving fixed prices for specialty work by letting a substantial portion of the work to
prequalified subcontractors.
Advantages from Contractor’s Position.
 Elimination of the risk inherent in fixed price contracting as a trade-off for a lower
guaranteed fee.
 The contractor is paid for the preparation of his initial planning, including development of
cost-estimates, schedule and other work plan items which he most absorb in competitively
bid contract.
 Opportunity to obtain future work from the owner due to harmonious relationship.
 Job site can be staffed and managed efficiently with owner’s cost.

Disadvantages:
Disadvantages from Owner’s Position:
 Cost plus fixed fee may not be the most economical in a competitive market.
 Disreputable, unskilled contractor can abuse this arrangement if the owner is not careful in
selection.
 Owner’s involvement is increased.
 Definition of reimbursable items of cost, particularly those for contractor’s tools and
equipment, overhead expenses etc. may be the sources of disputes

Disadvantages from Contractor’s Position:

 Fees may be minimal in comparison to profit potential in areas of known performance with
a favorable risk/reward ratio.
 Planning and control functions and assignment of personnel are made increasingly difficult
because of the simultaneous nature of construction and design.
 Contractor supervision and management may resent major decisions being made or
questioned by the client where they would normally have full responsibility.
 The contractor’s reputation may suffer in the event of significant delays, cost overruns or
personal clashes with owner personnel.

Time and material contract

• A time-and-materials contract may be used only when it is not possible at the time of
placing the contract to estimate accurately the extent or duration of the work or to anticipate
costs with any reasonable degree of confidence.
• Where the labor and materials required for the repair and maintenance of any construction
work can’t be predicted at the time of entering into a procurement contract, a time and
material contract can be entered into for procuring work by calculating labor on the basis
of time and materials on the basis of unit price.
• This contract shall clearly provide for payment as follows to the construction entrepreneur:
o Amount to be set by adding overheads and profits set forth in the approved cost
estimate to the amount by dividing the construction entrepreneur labor on the basis
of per unit time (day or hour or month)
o Amount paid for the materials used in the repair and maintenance subject to the
ceiling set forth in the procurement contract.

COMPILED/PREPARED BY: SUBASH BHATTARAI 21

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

• When using time and materials contracts, the following items could be negotiated:
o Labor Rate- Specifying a fixed rate for all labor including administrative personnel.
If you are using T&M on large projects, be sure to offer discounted labor rates to
reduce total project cost.
o Material Mark-Up- T&M contracts usually add between a 15 and 35 percent onto
material prices.
o Not-to-Exceed- The Time and Material not to exceed, is a contract in which the
contractor can bill the work being performed but there is a ceiling that could be
used as the maximum amount being charged by the contractor.
• This type of variation can be used to increase contractor’s efficiency and it assumes the
excessive costs. It also provides the owner with a ceiling that will guarantee that contractor
will not exceed from that ceiling.
o Maximum Labor Hours- In addition to the not-to-exceed condition, time and
material contracts, a maximum number of labor hours could be set. When the
contractors exceed a specified amount, those additional hours shall not be billed to
the other party. This avoids the “less efficiency = more money” issue of time and
materials contracts.
Time and Material Contracts Drawbacks
• Difficult to control cost - Contractor may try to show excessive expenditure of labors and
materials. So should be very careful while entering into contract
• Difficult to control time - Contractor may try lengthen the contract duration so as to claim
additional overhead and cost of labor. So this issue should be addressed while entering into
contract.
• Profit Limits- Some confidence customers will try to establish not to exceed conditions,
will try to reduce mark-up on materials and even negotiate reduced billable per hour rates.
• Ignored Market Prices- Sometimes companies will set lower prices, based on their internal
cost structure, than actual market rates or even vice-versa.
• Reduced Business- Customers are not used to work on time and material contract, so
finding new business opportunities, could be really challenging. Customers will likely
preferred fixed price contracts.
• Billing- Time and materials contracts should be structured in such way that the company
will be able to bill sufficient amount of money to cover fixed costs. When the billing hours
are reduced, fixed costs must also be reduced at the same rate as the billable hours.

COMPILED/PREPARED BY: SUBASH BHATTARAI 22

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Design and Build (D&B) Contract

Design and Build procurement works on the basis that the main contractor is responsible for
undertaking both the design and construction work on a project, for an agreed lump-sum price.
Design and build projects can vary depending on the extent of the contractor’s design
responsibility and how much initial design is included in the employer’s requirements.
Nevertheless, the level of design responsibility and input from the contractor is much greater on
design and build projects than a traditional contract with a contractor’s designed portion. The
employer has control over any design elements of the project that are included in their
requirements, but once the contract is let responsibility over design passes to the contractor, so the
employer has no direct control over the contractor’s detailed design. The contractor can carry out
the design in a number of ways. Often they will appoint their own consultants or use their own in-
house team.
• A single entity provides both design and construction of the project.
• The Design-Builder is obligated to meet the design criteria and performance requirements
specified in the bidding documents.
• On a design/build project the contractor and designer work together to serve the Owner on
cost, schedule and scope of work.
• Ability for fast track/phased construction.
• Three types of design-build entities
o Contractor Led (subcontract design or joint venture)
o Designer Led (subcontract construction or joint venture)
o A single firm with both capabilities internally

Why Design/Build?
• Ability for fast track/phased construction.
• Higher quality projects.
• Reduction of claims and litigation against owners.
• Identification of costs early.
• Better relations and communication, more Contractor involvement throughout the process.
The design-builder provides only the necessary documentation to build the project
efficiently.

COMPILED/PREPARED BY: SUBASH BHATTARAI 23

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Turn Key contract

A turnkey is a type of project that is constructed so that it could be sold to any buyer as a completed
product. Turnkey is often used to describe a home built on the developer's land with the developer's
financing ready for the customer to move in.It is just turn a key in the door. In turn key contract,
the contractor is entrusted to design, construct, commission & handover the project to the
employer. The employer will make the lump-sum payment to the contractor at the different stages
of work as per the agreement. This type of contract is useful when the work has to be completed
at a very short period. Whole risk is borne by the contractor.

Advantages:
 The responsibility for the contract lies with a single firm and the promoter is relieved from
responsibilities for the equipment or plant and performance.
 The project is put into operation more rapidly than other contracts.
 Minimal owner coordination is required between construction, design, and other project
elements. This can be of great benefit to an unknowledgeable owner.
 Considerable opportunity for construction expertise to be incorporated during the design
phase.
 Implementation of changes is simplified throughout the construction program.

Disadvantages:
 Usually no firm project cost is established until construction is well underway.
 If performed under a lump sum or guaranteed maximum price contract, overall quality and
performance may be subordinated to ensure profitability.
 Very few checks and balances and the owner is sometimes not advised or aware of design
or construction problems that may greatly affect cost or schedule.
 Due to minimal involvement of owner, the final result may not fully comply with
expectations.
 Successful integration of design and construction functions and avoidance of changes are
largely left up to the design construct firm.
(f) Build Own Operate Transfer (BOOT) Contract
Build–own–operate–transfer (BOOT) or Build–operate–transfer (BOT) or BOO (Build–Own–
Operate) is a form of project financing, wherein a private entity receives a concession from the
private or public sector to finance, design, construct, and operate a facility stated in the concession
contract. This enables the project proponent to recover its investment, operating and maintenance
expenses in the project. Due to the long-term nature of the arrangement, the fees are usually raised
during the concession period. The rate of increase is often tied to a combination of internal and
external variables, allowing the proponent to reach a satisfactory internal rate of return for its
investment.

The major components of a BOOT Project include:

Build: design, manage, project implementation, procurement, construct and finance
Own: own the asset for the concession period and the license for the equipment used.
Operate: manage and operate plant, carryout maintenance, deliver product or service and
receive off take Payments.
Transfer: handover plant in operating condition at the end of the concession period.

COMPILED/PREPARED BY: SUBASH BHATTARAI 24

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Advantages
 Promotion of private investment.
 Completion of projects on time without cost overruns.
 Good management and efficient operation.
 Transfer of new and advanced technology.
 Utilization of foreign companies’ resources.
 Additional financial sources for priority projects.
 No burden on public budget for infrastructure development.
 Positive effect on the credibility of the host country.
Disadvantages
 Availability of experienced developers and equity investors
 The ability of governments to provide necessary supports
 The workability of corporate and financial structures.
Comparison of Turn-key and BOOT Projects
 BOOT projects are contractor financed turnkey contracts.
 BOOT project strategies grew out of turnkey contracting.
 In conventional turnkey contracts, governments have attempted to shift the risk for the
project construction to the private sector while still bearing the risk of financing and
operating the project. In a concession project i.e. BOOT project, the major risks of finance
and operation, however, borne by the promoter.
 In turnkey contracts, feasibility studies are often carried out by the principal while in BOOT
project, the promoter will be responsible for feasibility studies.
 Commercialization of a turnkey contract is normally the responsibility of the principal,
who will often pay the contractor a mobilization fee and monthly payments for the work
carried out. In BOOT projects, the promoter will carry out commercialization.
 In turnkey contracts, operation of the facility is carried out by the principal after one or two
years of commissioning while in BOOT projects, the promoter will operate the facility over
the concession period before finally transferring the facility to the principal.

COMPILED/PREPARED BY: SUBASH BHATTARAI 25

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Chapter 5.0
Present Procurement Rules and Regulations (Procurement of Consulting
Services) (4 hour)
5.1 Advertising, EOI, TOR, and RFP Preparation
5.2 Technical and Financial Evaluation
5.3 Negotiation and Award of Contract
Consulting Services consist of activities of intellectual and advisory nature that does not lead to
measurable physical output and other than goods or civil works. Consulting service can be
procured by following method.

COMPILED/PREPARED BY: SUBASH BHATTARAI 26

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

i) Quality and Cost Based Selection (QCBS)

• It is a method where both quality (Technical Proposal) and Costs of consulting services are
considered
• Technical and Financial Proposals are submitted separately sealed in two envelopes and
then put in an outer sealed envelope

ii) Quality Based Selection (QBS)

• Appropriate for complex or highly specialized assignments for which it is difficult to define
precise TOR and required inputs from consultants
• Selection Procedure similar to QCBS except that Financial Proposal of the highest ranked
firm in Technical Proposal only is opened
• Negotiations with the consultant on the Financial Proposal and Contract

iii) Least Cost Based Selection

• More appropriate for assignments of a standard or routine nature, assignment small
• Financial Proposal of all consultants passing minimum in Technical Proposal opened

COMPILED/PREPARED BY: SUBASH BHATTARAI 27

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

iv) Fixed Budget Selection (FBS)

v) Consultants’ Qualifications Selection (CQS)
vi) Single-Source Selection (SSS)

Terms of Reference (TOR) Preparation

• The public entity shall, for the procurement of consultancy services, prepare TOR
indicating following matters:
 Background and objective of assignment to be performed by the consultant
 Scope of work of consultant and the assignment to be performed by the consultant
 Description of existing relevant studies and basic data, if any
 If the consultants is required to transfer knowledge or skill to public entity,
description thereof
 Payment
 If any training is to be provide, the number of employees to be trained
 Functions and qualifications of key personnel of the consultant and the estimated
time required for the assignment to be performed by the consultant
 Time for the commencement and completion of assignment by the consultant
 Description of information, physical facilities and equipment to be provided by the
public entity to the consultant
 Description of reports, data, designs, survey reports etc. to be submitted by the
consultant
Objectives
• Set boundaries of the services
• Context in which the TOR has been prepared
• What are inputs and outputs are required
Scope of TOR
• Boundaries of services
• Desired inputs/outputs
• Persons involved
• Delivery schedule
• Project administration
Factors to be considered
• Not to be too detailed to make inflexible
• Clear responsibility of client and consultants
• Consistent with budget

Expression of Interest (EOI)

It is the process of short listing of the consulting firms. The notice inviting the letters of intent shall
indicate the following matters:
(a) The name and address of the public entity,
(b) General description of the proposed assignment or project,
(c) The source of funding for the proposed assignment,
(d) The qualification of the consultant submitting the letter of intent,
(e) If the consultant submitting the letter of intent is a firm or company:
i. A profile of the firm or company,
ii. Status of joint venture,

COMPILED/PREPARED BY: SUBASH BHATTARAI 28

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

iii. Details of experience of similar assignments

iv. Bio-data of key human resources to be involved in the proposed assignment.
Request for Proposals (RFP)
After the preparation of a short list, Request for detailed proposals will be invited. The following
matters should be included;
(a) Letter of invitation to proposals,
(b) Requirement that the key human resources proposed by the proponent certify that their
respective updated bio-data are accurate and complete,
(c) Matter that financial proposals shall be opened only after the evaluation of technical
proposals,
(d) Minimum pass score to be obtained by the proponent on the technical proposal,
(e) Whether the proponent is allowed to propose a separate action plan of its own and human
resources for the concerned assignment,
(f) Whether the proponent is allowed to comment on the terms of reference, and
(g) Source of finance required for the proposed assignment.
A sample of EOI notice:
Expression of Interest (EOI)
For
Project Management, Design and Supervision Consultant
1. The Department under its regular program and budgetary arrangement has planned to execute
urban and environmental development and management works in the Kathmandu valley and
a part of such works will be implemented in the coming 3 years.
2. The Project Management, Design and Supervision Consultant (PMDSC) will be engaged to
provide support for overall planning, project management, detailed engineering design,
construction supervision, administration, monitoring and evaluation of the project
implemented. The scope of the consulting services is outlined in the EOI documents.
3. The Department now invites EOI from eligible consulting firms or JV/association to provide
the consulting service for the assignment over a period of 3 years from the 2069. The required
key persons and their input requirements are outlined in the EOI document.
4. The EOI document can be obtained from the office free of cost during office hours or may be
downloaded from the office website.
5. Interested eligible consultants may obtain further information from the office during office
hours.
6. Interested consultants may form a joint venture (JV) or an association for expressing interest.
When expressing interest, a JV or an association must nominate one firm as the lead firm to
execute the work and to communicate with the office as the authorized representative of the
JV or association.
7. The completed EOI document should be submitted by 12:00 hours on 31st day of the first date
of notice published. EOI arriving after the deadline will not be accepted. Should the last date
of submission fall on public holiday the next working day shall be considered as the last day.
8. The Request for Proposal (RFP) will be issued to the short-listed firms only.
The Project Manager

COMPILED/PREPARED BY: SUBASH BHATTARAI 29

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Types of contract for Consultancy Service

1) Time-based contract
If the period of consultancy service cannot be predicted such as supervision of construction work,
management of large professional organization or design of complex structure such as dam, tunnel,
a time based contract may be concluded for such work. This contract shall provide that the
consultant's fee shall be determined as follows:
 The amount to be found out by multiplying the rate of remuneration referred to in the
procurement contract by the time actually consumed by the consultant to do the work under
the procurement contract,
 Reimbursement amount of the actual miscellaneous expense as supported by the bill or
receipt.

2) Performance-based fee paying contract

Where a consultancy service is to be taken on the condition that the consultant shall be called to
do the work as and when required or that service fee shall be provided based on the work s/he has
completed, a performance based fee paying contract may be concluded. The service fee of such
consultant shall be as stated in the procurement contract.
3) Lump sum contract
In order to take consultancy services for a work clearly identified, having low risk to the consultant
and the quality of which can be easily measured such as feasibility study, project design, preparing
bidding documents, a lump sum contract may be concluded. This contract shall provide that the
consultant shall have to submit a report to the public entity within the specified time on concluding
a work having technical characteristics as referred to in the terms of reference and for that, s/he
will receive service fee.

4) Percentage based contract

A percentage based contract may be concluded to procure such service as inspection of goods,
architect's services, supervision or monitoring service or other services of similar nature. This
contract shall provide that payment to the consultant shall be made according to the percentage of
the estimated or actual cost of the concerned construction work or project or the cost of goods
purchased or inspected.

5) Indefinite service period contract

In order to take consultancy services required from time to time in respect of specific work such
as a consultant required to bring a construction work into operation, Adjudicator or an arbitrator
of a dispute relating to procurement contract, consultant for institutional reform or procurement,
technical trouble shooter. This contract shall have to provide the following matters:
• The consultant shall have to carry out the work referred to in the contract as and when
necessary for the Public Entity at the rate referred to in the procurement contract.
• Remuneration shall be paid on the basis of actual time consumed by the consultant to carry
out the work.

COMPILED/PREPARED BY: SUBASH BHATTARAI 30

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Chapter 6.0
Present Procurement Rules and Regulations (Procurement of Works and
Goods). (6 hour)
6.1 Bid Document Preparation including Technical Specification, Evaluation
Criteria
6.2 Sale/issue of Bid Documents, Pre-bid Conference, Bid Opening, Bid
Examination, Bid Evaluation and Award of Contract
6.3 Nepal Specific Contract Management
Bid Document Preparation
• PPMO has prepared a Sample Standard Bidding Document
• This SBD can be used in one’s purpose

SBD Document has following sections

1. Guidance notes
2. Invitation for bids
3. Instruction to bidders
4. Bid data sheet
5. Evaluation and qualification criteria
6. Bidding forms
7. Technical requirements of works (Specifications)
8. Bill of quantities
9. General conditions of contract
10. Special conditions of contract
11. Contract forms

Bidding document / Tender document

Bidding Document is a document prepared by the concerned firm making invitation to bid for
submission by bidders by filling up the price or rate. This includes instructions to bidders,
specifications, drawing, design, terms of reference, schedule of work, evaluation criteria, bill of
quantities, conditions of contract and similar other documents. Matters to be stated in Bidding
Documents:
 Instruction to bidders (ITB)
 Tender notice
 Bid data sheet
 Plan, drawing of the proposed work,
 Bill of quantities
 Quantity of goods
 work to be done by the bidder
 Time of supplying goods, completing construction work
 Provision regarding warranty and repair and maintenance
 Type and quantity of necessary training and supervision to be provided by the bidder

COMPILED/PREPARED BY: SUBASH BHATTARAI 31

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 Provision that the goods or spare parts to be supplied must be new and original
 Source of financing required for proposed procurement.

Tender Notice
Tender notice is the information inviting bids from competent contractors. It should be widely
published in important daily newspaper.
When all the preliminaries i.e. development of project have been completed and owner has decided
to proceed with the work, tenders are invited. Legally this is an attempt to ascertain if an offer can
be received from interested contractors to execute the work in the estimated limit of time and
finance.

Detail information in Tender Notice

 The name and address of the Public Entity inviting bid
 Nature of work and its location
 The place of delivery of the goods to be supplied, the services to be delivered and the
construction work to be performed
 The amount of bid security and validity period of the bid
 Date, time and place where and when the tender document is available
 Cost of tender document
 The place, manner, deadline for the submission of the bidding documents
 Provision of e-bidding and its process
 The place, date and time for the opening of bids
 Expected date of acceptance of successful bids etc.
In publishing a notice for invitation of national level bidding, a period of at least 30 days shall be
given and at least 45 days shall be given in the case of international level bidding. The bidding
documents shall have to be made for obtaining from two or more than two public entities.
In making procurement through an international level bidding, the Public Entity may give domestic
preference to the Nepalese entrepreneurs and businesspersons as prescribed, and where domestic
preference is to be so given, that matter shall be set forth in the notice on invitation to bid and the
bidding documents.

Allowable and restrictions in bidding document

Descriptions Section Public Entity Bidders

Guidance Notes Allowed Not- Allowed

Invitation for bids Allowed Not- Allowed

Instruction to bidders Section 1 Not- Allowed Not- Allowed

COMPILED/PREPARED BY: SUBASH BHATTARAI 32

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Bid data sheet Section 2 Allowed Not- Allowed

Evaluation and qualification Section 3 Allowed Not- Allowed

criteria
Bidding forms Section 4 Allowed Allowed to fill

Technical requirements of works Section 5 Allowed Not- Allowed

(Specifications)

Bill of quantities Section 6 Allowed Not- Allowed

General conditions of contract Section 7 Not- Allowed Not- Allowed

Special conditions of contract Section 8 Allowed Not- Allowed

Contract forms Section 9 Allowed Not- Allowed

Evaluation and Qualification Criteria

Refer: Evaluation and Qualification Criteria of 1S2E Bidding documents

COMPILED/PREPARED BY: SUBASH BHATTARAI 33

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Earnest money/ bid bond/ bid security

It is the amount of money deposited while bidding a tender as a guarantee of the party's willingness
of carrying out the work awarded to him. Bidder shall have to submit the bid along with bid
security of 2 to 3 % of the estimated amount of the bid in cash or a bid security, of equivalent to
that amount, issued by a commercial bank. This is refunded to unsuccessful bidder. If a successful
bidder fails to carry out the contract, this amount is forfeited.

Pre-bid Meeting
In case of big projects and complex works pre-tender meeting should be conducted to cause
appraisal of the project: appreciate the views of prospective bidders, their comments and
suggestions are given cognizance.
The tendered should also make use of the opportunity and put forth their viewpoints of tender after
thorough study of tender conditions and site conditions/ deficiencies, which cause difficulties in
quoting/ execution. Many times the tenders do not use this facility and grumble afterwards that the
tender has one-sided conditions. The questions and the replies should from part and parcel of the
tender. Employers should not hesitate to relax some of their rigid conditions to get a better offer.
These are the pointers for proactive and effective dealing.
In the meeting, a bidder may raise any question or curiosity concerning procurement proceedings
to the Public Entity and such Entity shall be required to make available as soon as possible the
answer to such question or curiosity without divulging the source of questioners and the minute of
the meeting to all bidders.
Opening and Evaluation of Bids
A Public Entity shall have to open a bid in the presence of the bidder or his/her representative.
Provided that there shall be no constraint for opening bid only for the reason of absence of bidder
or his/her representative.
Preliminary Examinations of Bids
The purpose is to identify and reject bids that are complete as required by the bidding documents
before further detailed evaluation. The principal areas to be covered are: Verification of signature,
registration, J/V agreement; Eligibility of bidders; Bid Security; Completeness and qualifications.

The purpose of the bid evaluation process is to determine the lowest evaluated substantially
responsive bid in accordance with the terms and conditions of the bidding documents. The Bid
Evaluation Committee established by the implementing agency shall evaluate bids. Evaluation of
bids shall be on the basis of the information in the bids alone.
In evaluating and comparing a bid, comparison shall have to be made by fixing the quoted price
excluding Value Added Tax. The evaluation committee shall have to evaluate the bid included for
evaluation in accordance with the criteria and method set forth in the bidding documents of such
bid. While evaluating a bid, the technical, commercial and financial aspect of such a bid shall be
evaluated.
 If any arithmetical error is found in a bid, the Public Entity may correct such an error, and
where, in making such correction, there exists a discrepancy between unit rate and total
amount, the unit rate shall prevail, and the total amount shall be corrected as per the same
rate.
 Where there is a discrepancy between figures and words in a bid submitted by a bidder, the
amount in words shall prevail.

COMPILED/PREPARED BY: SUBASH BHATTARAI 34

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 Where on examination, the qualification of the bidder of the bid having the lowest bid price
is in conformity with the qualification evaluation criteria set forth in the bidding
documents, such bid shall be the Lowest Evaluated Substantively Responsive Bid. The
Public Entity shall select for acceptance only the lowest evaluated substantially responsive
bid.
 Within seven days of the selection of the bid, the Public Entity shall serve a notice of the
intent of acceptance of his or her bid to the concerned bidder.
Determination of Substantial Responsiveness of Bids
A bid is considered substantially responsive if it does not contain any major deviations from the
bidding documents or conditions which cannot be determined reasonably in terms of monetary
value for financial adjustment. The purpose is to reject bids which are not substantially responsive
to major commercial and technical requirements.
Commercial reasons for rejecting bids are:
 Bid security/bid validity period not in accordance with bidding documents.
 Inability to meet critical work schedule.
 Failure to comply with minimum experience/ financial capability.
 Conditional bids.
Technical reasons for rejecting bids are
 Failure to bid for the required scope of work.
 Failure to quote for each item in BoQ.
 Failure to satisfy major requirements in the Specifications.
Detail evaluations of Bids
The detailed evaluation shall be based on the evaluation criteria as specified in the bidding
documents. The purpose is to determine the evaluated cost of each bid. The basis for award of
contract shall be the bidder with the lowest evaluated substantially responsive bid subject to:
 If bidders are pre-qualified,
 If the bid contains no substantial deviations from the specifications (Technical
Responsiveness),
 If the lowest evaluated cost is well within the cost estimate
 If rate analysis submitted by the bidder is logical and realistic.
Bid Evaluation report
The bid evaluations Committee shall prepare a Bid Evaluation Report, within 15 days of starting
of bid evaluation, in the format contained in the Standard Guide for Bid Evaluation and submit to
the Competent Authority for further considerations and actions. If there is no donor involvement
or the donor does not require no objection, the Project Manager or Competent Authority may enter
into negotiation/agreement process.
Award of Contract

Letter of Intent to Accept the Bid/ Contract

Within 7 days of the approval of the recommendations of the Bid Evaluation Committee, the
Employer may issue the letter of intent to accept the lowest evaluated responsive bidder. This
information is to be given to all bidders through public notice in newspaper. If no other bidders /
concerned persons submitted any complain about this selection, the contract is awarded to the
selected bidder and called for agreement with required performance bond within 15 days.
Sample Notice of Intend to award contract

COMPILED/PREPARED BY: SUBASH BHATTARAI 35

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Af]fnkq :jLs[t ug]{ cfzosf] ;"rgf

-k|yd k6s k|sflzt ldlt M@)^(.#.^ sf] uf]/vfkqdf_
o; sfof{noaf6 ldlt @)^(–)@–)! sf] uf]/vfkqdf k|yd k6s k|sflzt Af]fnkq sf] ;"rgf cg';f/ 7]Ssf
g+=- BASP-004/068-69 sf] nflu btf{ x'g cfPsf Af]fnkqx? dWo] Plal; sG;6«S;g sDkgL, k|f=ln= sf]
saf]n c+s ?= %),!%,!&,@*).)) -d'=c= s/ afx]s_ sf] Af]fnkq d"Nof+sg ;ldltaf6 :jLs[tLsf] nflu l;kmfl/z
eP cg';f/ :jLs[t ug]{ lg0f{o ePsf]n] ;fj{hlgs vl/b P]g @)^# sf] bkmf @& sf] pkbkmf -@_ adf]lhd ;f]lx
P]gsf] bkmf & sf] k|of]hgfy{ ;DalGwt ;a}sf] hfgsf/Lsf] nflu of] ;"rgf k|sflzt ul/Psf] 5 .
– cfof]hgf k|d'v

Performance Security
It is the amount of money deposited by a successful bidder as a security for satisfactory
performance. In Nepal, security deposit is equal to 5% of contract amount for Nepalese firm where
as it is 10% of contract amount for foreign contractor. This is refunded after completion of Defect
Liability Period (maintenance period). If the work is unsatisfactory or contractor fails to perform
his duty, this fund is forfeited.
It is the amount of money deposited by a successful bidder as a security for satisfactory
performance.
• In general 5% of bid price (upto15% below than estimated price)
• If LESRB’s price is below than 15% of estimated price then,
• P.S = (0.85*EP-BP)*0.5 + 5% of Bid Price
If bids are excessively low, front loaded etc. extra 8% of Bid price is demanded from bidder. After
analyzing rate analysis of bidder

Contract Agreement
The project Manager/Division Chief shall ensure that all provisions in the bidding documents and
any additional provisions agreed upon with the bidder are complied with before signing the
agreement.
A contract may consist of number of document which contain collectively all the essentials of
contract and which are usually linked together by cross-reference. Engineering contract document
usually contains the following:
 Tender notice
 Instruction to bidders (General rules and direction for the use of the contractors)
 Letters of submission of tender
 Letter of acceptance of tender
 The addenda- The final contract is obviously subject to the addition, or alternations agreed
to by parties and such it is necessary that the correspondence exchanged and conditions
modified. This is called addenda. They are also made part of the contract document.
 Form of contract
 Condition of contract
- Special conditions of contract (SCC)
- General conditions of contract (GCC)
 Schedule A - Showing the details of materials if any, to be supplied by the owner to the
contractor.
 Schedule B - BOQ

COMPILED/PREPARED BY: SUBASH BHATTARAI 36

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 Specification
 Drawings
Priority of Document
The documents forming the Contract shall be interpreted in the following order of priority:
(1) Contract Agreement,
(2) Letter of Acceptance,
(3) Contractor’s bid,
(4) Special Conditions of Contract,
(5) General Conditions of Contract,
(6) Specifications,
(7) Drawings,
(8) Bill of Quantities
(9) Addenda
Factors to be considered in preparing the contract document
 The contract must be fair
 Contract must be clear
 Contract language must be consistent
 No repetition (say it once, say it in proper place)
 Use each part of contract for its proper purpose
 Contract information must be retrievable
 Use foresight (try to foresee any possible area of confusion and clear them up in advance)
 If you want it get it in the contract

COMPILED/PREPARED BY: SUBASH BHATTARAI 37

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Chapter 7.0
Contract Management (5 hours)
7.1 Dispute: Causes and Resolutions
7.2 Extension of Contract
7.3 Termination of Contract
7.4 Closing of Contract
Claims and Dispute Resolution
What is claim?
In simple contractual terms it is a request for reimbursement of cost and / or time from one party
to another.
A formal contract procedure used to review contract disputes between the contracting parties. The
claim process is identified in the contract provisions which describes the steps to be taken to protest
an initial decision over the merits of a change order proposal.

What is dispute?
Unsettled claims in construction leads to dispute.

Claim issues which generally turns to disputes in construction

Owner and Designer Initiated Changes
The most common types of owner and designer initiated changes that tend to result in disputes
include:
 Numerous last minute addenda during bid period.
 Delay in access to the site.
 Delay in furnishing approved for construction
 Design drawings or clarifications.
 Delay in furnishing owner-furnished items.
 Defects in plans or specifications including errors and omissions.
 Major design changes.
 Scope additions.
 Scope deletions.
 Schedule improvement directives.
 Acceleration directives.
 Suspension of work.
 Interference by owner or his designated representative.
 Nonperformance by owner.
 Termination of contract.
 Equivocal or conflicting contract clauses.

Contractor Initiated Changes

The most common types of contractor initiated changes that tend to result in disputes include:
 Failure to start work as planned.
 Failure to supply a sufficient work force.
 Contractor performance failure.

COMPILED/PREPARED BY: SUBASH BHATTARAI 38

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 Subcontractor performance failure.

 Supplier performance failure.
 Installation of defective work.
 Poor workmanship.
 Schedule delay.
 subcontractor schedule delay
Other
The most common types of changes resulting in disputes due to acts or omissions of third parties,
differing site conditions or other circumstances not caused by either party to the contract include:
 Unforeseen changed physical site, underground or other conditions.
 Other unforeseen site conditions.
 Unusual weather or other natural event.
 Regulatory agency change.
 Change in law.
 Labor disputes.
 Third-party interference.
 Third-party nonperformance

Claim Management flow chart

COMPILED/PREPARED BY: SUBASH BHATTARAI 39

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Achieving a common understanding lead to settlement and achieving no understanding lead to

Disputes
Dispute Resolution in Nepal
Section 58 of PPA: mechanism for dispute settlement
Amicable Settlement
Any dispute arising between the public entity and the construction entrepreneur, supplier, service
provider or consultant in connection with the implementation of the procurement contract shall be
settled amicably.
If dispute is not settled by amicably then there is the provisions for arbitration (PPA section 58
1(a)
Dispute resolution through Arbitration
Arbitration is a process to resolve disputes between contracting parties based on a contract
agreement. It is supported by law. Arbitration is initiated when one party gives notice to the other.
The parties then appoint independent person as an arbitrator to resolve disputes. The decision by
the arbitrator called an award is legal and binding. In Nepal NEPCA does the ad-hoc procedures
of arbitration. Arbitrator is usually a lawyer. In Nepal there is an arbitration act 2055 B.S
Advantages/ Features of Arbitration
 Neutrality
 Expertise
 Flexible procedures
 Appeal is limited
 Confidentiality
 Binding internationally

Previously (before first amendment of PPA in 2073 B.S)

The procurement contract may provide that disputes relating to construction work shall be resolved
as follows:
 By an adjudicator (contract amount up to 100 Million NRS)
 By a three member dispute resolution board/committee (Greater than 100 Million NRS)
 By arbitration: The provision that if a party is not satisfied with the decision made by
adjudicator or dispute resolution committee, such dispute shall be resolved through
arbitrator
Dispute Resolution through Adjudication
Adjudication is a new way of resolving disputes in construction contracts. Adjudication does not
necessarily achieve final settlement of dispute because either of the parties has right to have the
same dispute heard afresh in court or where the contract specifies arbitration.
Advantages of adjudication
 The disputing parties has right to choose a learned adjudicator having expertise in subject
related to dispute
 Adjudicator imposes a fair and impartial decision like arbitrator or judge
 It is faster than arbitration or litigation, it could be within 28 days
 Disputes can be resolved while works are still in progress
 Better understanding of facts and figures through site investigations and studies
 Amicable settlement can be done after adjudication award
 Adjudication is private and confidential

COMPILED/PREPARED BY: SUBASH BHATTARAI 40

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

In international practice dispute are resolved by the following techniques

Disputes are inevitable in construction projects. Skills in dispute resolution should be part of the
resources of any professional in a managerial position. There are various dispute resolution
mechanisms and procedures such as litigation, negotiation, meditation, expert determination,
arbitration and adjudication. With consideration to the main features and characteristics it can be
determined which dispute resolution strategy should be adopted after deliberation of the nature of
the dispute.
Expert Determination
Expert determination is often used to resolve issues or disputes of a specialist nature, such as
construction, and is one of the most informal systems of dispute resolution. Expert determination
is often used when there is a valuation dispute. If an expert is to be used to determine the dispute,
the parties will agree this by contract and will agree that the expert determination will be binding.
Benefits of Expert Determination
It is an economic way of finally resolving valuation disputes.
It is less expensive and a quicker and a less formal method of dispute resolution.
Disadvantages of Expert Determination
The use of experts is much less tied to legal processes and therefore it is more difficult to challenge
the decision of an expert.
An expert’s report cannot generally be enforced without further court or arbitration proceedings.
Litigation
Whilst there are many methods of ADR, court proceedings are still one of the most common forms
of resolving disputes within the construction industry.
Advantages of Litigation
 The claim process will be managed by a judge throughout.
 Complex issues can be dealt with.
 The parties will obtain a binding and enforceable decision.
Disadvantages of Litigation
 It is often a slow process.
 It is likely to be the most expensive way of resolving a dispute.
 The proceedings will be in public and are therefore not confidential, except in certain very
limited circumstances.
Mediation
To mediate means to act as a peacemaker between disputants. It is essentially an informal process
in which the parties are assisted by one or more neutral third parties in their efforts towards
settlement. Mediators do not judge or arbitrate the dispute. They advise and consult impartially
with the parties to assist in bringing about a mutually agreeable solution to the problem. A mediator
does not impose a decision on the parties in dispute, but assist them to reach their own settlement
Benefits of Mediation
 The mediator will be an independent person, who will not make a decision, judge or
advice, but will facilitate discussions between the parties, with the aim of resolving the
dispute. Mediators are generally highly experienced in the area of the dispute.
 It can help maintain a business relationship.
 It is relatively quick, with mediations usually lasting 1-2 days.

COMPILED/PREPARED BY: SUBASH BHATTARAI 41

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 It is usually considerably less costly than litigation.

 Everything that happens in a mediation is confidential.
 A mediator will encourage the parties to find a solution to the dispute which will suit
both the parties’ needs.
 Disadvantages of Mediation
 In some cases there may be a concern that, during mediation, parties may disclose an
important aspect of their argument or commercial position, which (despite the
confidential nature of mediation) could benefit the other party if the matter went to trial.
 If the parties do not come to an agreement, the dispute will remain unresolved and the
cost of mediation will have been wasted.

Extension of Time
Provisions of PPA &PPR
 The Contractor to give notice at least 7 days prior to intended completion date
 Analysis of situation (reasons of delay) by employer
 The employer shall give extension of time (EOT) if a Compensation Event occurs
Authority to extend time
 Up to six month by tender approving authority
 Above six month by head of department
Priced acceleration proposal from contractor
 Only if there is provision in bidding document & EOT have to be awarded
 If accepted, they are incorporated in contract & treated as variation

As per GCC, provision related to time extension as:

 The Project Manager shall extend the Intended Completion Date if a Compensation Event
occurs or a Variation is issued which makes it impossible for Completion to be achieved
by the Intended Completion Date without the Contractor taking steps to accelerate the
remaining work, which would cause the Contractor to incur additional cost.
 The Project Manager shall decide whether and by how much to extend the Intended
Completion Date within 21 days of the Contractor asking the Project Manager for a decision
upon the effect of a Compensation Event or Variation and submitting full supporting
information at least 7 days prior to the intended completion date. If the Contractor has failed
to give early warning of a delay or has failed to cooperate in dealing with a delay, the delay
by this failure shall not be considered in assessing the new Intended Completion Date.

Similarly, in case of accelerating the project following provisions are mentioned in GCC
 When the Employer wants the Contractor to finish before the Intended Completion Date,
the Project Manager shall obtain priced proposals for achieving the necessary acceleration
from the Contractor. If the Employer accepts these proposals, the Intended Completion
Date shall be adjusted accordingly and confirmed by both the Employer and the Contractor.
 If the Contractor’s priced proposals for acceleration are accepted by the Employer, they are
incorporated in the Contract Price and treated as a Variation.

COMPILED/PREPARED BY: SUBASH BHATTARAI 42

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Time extension for the contractor is made upon analysis the delays.
Delay can be analyzed as follows:
Delay Analysis
Construction projects tend to be one-offs. A project team comes together to create a unique
development on a particular site under circumstances that will never be repeated.
They are very complex, requiring the co-ordination of permissions,
people, goods, plant and materials. Construction can begin despite many ‘unknown’ matters such
as incomplete design information, uncertain site conditions, suppliers, and so on. As a consequence
delays are common.
In Modernizing Construction: Various reports shows that maximum numbers of
government construction projects were delivered late.
Delays might be caused by:
 The uniqueness of the project.
 Speed of decision making.
 Poor or unrealistic scheduling.
 Poor communication.
 Lack of information.
 Labor productivity.
 Availability of resources.
 Adversarial relationships.
 Third party dependencies.
 Lack of finance.
 Availability of the site.
 Site conditions.
 Weather.
Delays can be minimized by:
 Detailed site investigations.
 Careful monitoring and regular meetings.
 Effective site management.
 Collaborative working and effective coordination.
 Careful scheduling.
 Full commitment to the project by all parties.

Types of delay
Very broadly, there are two types of delay
 Delays in activities for which there is programme float available (i.e. they can be delayed
without impacting on the completion date).
 Delays that will impact on the completion date.
Construction contracts tend provide for four categories of delay:
 Delays resulting from neutral causes.
 Delays that are the fault of the client.
 Delays that are the fault of the contractor (culpable delay).
 Concurrent delays.

COMPILED/PREPARED BY: SUBASH BHATTARAI 43

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Delays resulting from neutral causes

Neutral events (which may be 'relevant events'), which are not the fault of either party might entitle
the contractor to an extension of time. Typically, this might include:
 Exceptionally adverse weather.
 Civil commotion or terrorism.
 Statutory undertaker’s work.
 Force majeure (such as a war or an epidemic).
 A specified peril such as flood.
 National strikes.
 Changes in statutory requirements.
 Delays in receiving permissions that the contractor has taken reasonable steps to avoid.
This does not necessarily entitle the contractor to claim loss and expense.

Delays that are the fault of the client

Where the progress of the works is materially affected by a matters for which the client is
responsible, the contractor may be entitled to claim direct loss and expense incurred. Such matters
might include:
 The client instructing variations in the works.
 Failure by the consultant team to provide information.
 Delay on the part of a nominated sub-contractor.
 Failure by the client to supply materials or goods.
 Delay in giving the contractor possession of the site.
These matters (described in some contracts as 'relevant matters') may also constitute 'relevant
events' allowing the contractor to claim an extension of time, however a relevant matter need not
necessarily result in a delay to the completion date, and so claims for loss and expense
and claims for extensions of time do not necessarily always run together.

Delays that are the fault of the contractor

Where a delay which impacts on the completion date is caused by the contractor,
the contractor will be liable to pay liquidated and ascertained damages (LADs) to the client.
 The Contractor shall pay liquidated damages to the Employer at the rate per day 0.05% of
contracted price for each day that the Completion Date is later than the Intended Completion
Date. The total amount of liquidated damages shall not exceed the amount equal to 10 % of
total contracted price. The Employer may deduct liquidated damages from payments due to
the Contractor. Payment of liquidated damages shall not affect the Contractor’s liabilities.
 If the Intended Completion Date is extended after liquidated damages have been paid, the
Project Manager shall correct any overpayment of liquidated damages by the Contractor by
adjusting the next payment certificate. The Contractor shall be paid interest on the
overpayment, calculated from the date of payment to the date of repayment, at the specified
rates.

COMPILED/PREPARED BY: SUBASH BHATTARAI 44

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Concurrent delay
Concurrent delay refers to the complex situation where more than one event impacts on
the completion date at the same time, but where not all of those events would entitle the contractor
to claim an extension of time or loss and expense.
Some form of apportionment is likely here, however such situations are complex and each case
will tend to have circumstances that are unique in some way. What is clear is that it is important
for both parties to ensure they keep good records to demonstrate that the event did actually occur
and that it did impact on the completion date.
If it is possible to carry out a critical path analysis that demonstrates the effect of events on
the completion date, then this is beneficial, however, in the absence of such information it is likely
that the courts will take a ‘common sense’ approach.

Compensation events
NEC contracts deal with these issues under the single heading ‘compensation events’. They do not
treat compensation events as an allocation of blame, but rather an allocation of risk. Any risk that
is not specifically identified as being attributed to the client is borne by the contractor.

Early warning
When it becomes reasonably apparent that there is a delay, or that there is likely to be a delay that
could merit an extension of time, the contractor must give written notice to the contract
administrator identifying the relevant event that has caused the delay.
On NEC contracts both parties must give early warning of anything that may delay the works.
They should then hold an early warning meeting to discuss how to avoid or mitigate impacts on
the project.

Mitigation and acceleration

The contractor is generally required to try to prevent or mitigate delay, even where the fault is not
their own.
If there is nonetheless a delay, the client may wish to instruct acceleration of the works.
An acceleration agreement can be used as a “wrap up” agreement expunging all
outstanding claims for extensions of time and loss and expense.
Measures taken to accelerate the works might include
 Additional resources of manpower, plant and materials directly employed or subcontracted.
 Revised methodologies including off-site prefabrication, extra scaffolding, temporary
weatherproofing and so on.
 Proposals for phased completion.
 Increasing working hours on and off site, including weekends, holidays, night working and shift
working.
 Additional supervision.
 Changes to the design or specification (for example standardisation replacing bespoke
solutions)
 Reduction in scope (for example transferring work to a separate post-contract agreement for
occupational works).

COMPILED/PREPARED BY: SUBASH BHATTARAI 45

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Termination of Contract
According to GCC of SBD, Nepal
The Employer may terminate the Contract at any time if the contractor;
 Does not commence the work as per the Contract,
 Abandons the work without completing,
 Fails to achieve progress as per the Contract.

The Employer or the Contractor may terminate the Contract if the other party causes a fundamental
breach of the Contract. Fundamental breaches of Contract shall include, but shall not be limited to,
the following:
 The Contractor uses the advance payment for matters other than the contractual
obligations,
 The Contractor stops work for 30 days when no stoppage of work is shown on the current
Program and the stoppage has not been authorized by the Project Manager;
 the Project Manager instructs the Contractor to delay the progress of the Works, and the
instruction is not withdrawn within 30 days;
 The Employer or the Contractor is made bankrupt or goes into liquidation other than for a
reconstruction or amalgamation.
 A payment certified by the Project Manager is not paid by the Employer to the Contractor
within 90 days of the date of the Project Manager’s certificate;
 The Project Manager gives Notice that failure to correct a particular Defect is a fundamental
breach of Contract and the Contractor fails to correct it within a reasonable period of time
determined by the Project Manager;
 The Project Manager gives two consecutive Notices to update the Program and accelerate
the works to ensure compliance and the Contractor fails to update the Program and
demonstrate acceleration of the works within a reasonable period of time determined by
the Project Manager;
 The Contractor does not maintain a Security, which is required;
 The Contractor has delayed the completion of the Works by the number of days for which
the maximum amount of liquidated damages can be paid
 If the Contractor, in the judgment of the Employer has engaged in corrupt or fraudulent
practices in competing for or in executing the Contract.
When either party to the Contract gives notice of a breach of Contract to the Project Manager for
a cause other than those listed above, the Project Manager shall decide whether the breach is
fundamental or not.
Notwithstanding the above, the Employer may terminate the Contract for convenience.
If the Contract is terminated, the Contractor shall stop work immediately, make the Site safe and
secure, and leave the Site as soon as reasonably possible.

COMPILED/PREPARED BY: SUBASH BHATTARAI 46

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Closing of Contract
Closing contract means execution of various activities just before ending the contract after the
project is completed. Major steps to be followed for closing contract are:
 Preparation of snag list (or punch list) of activities
 Achieving substantial completion
 Issuing taking over certificate (Starts defect liability period)
 Completion of activities in punch list
 Inspect and verify that the outstanding works have been satisfactorily completed
 Remedy detected defects
 Final taking-over of project at end of defects liability period
 Issuance of defects liability certificate
 Final statement submittal after issuance of defects liability certificate
 Submission of recorded drawings (as built drawing, maintenance manuals & Warranties)
 Final payment
 Work completion report
 Final acceptance of work
 Issuing of work completion certificate
 Final Report
Substantial completion
 This term substantial completion, if used on the project, should be defined in the contract
specifications. Generally, it represents the recognition that the project is “substantially
completed” except for certain minor punch list items which do not hamper the use of the
facility.
 Substantial Completion is defined as the scope of work that is required by the Contract that
has been completed except for work having a Contract price of less than 1 percent of the
adjusted total contract price, or substantially all of the work has been completed and opened
to public use except for minor incomplete or unsatisfactory work items that do not
materially impair the usefulness of the work required by the Contract.
 When the Contractor reaches “substantial completion”, the Contractor will request a semi-
final inspection of the work. The PM will inspect the work and inform the Contractor:
 If the Project is “substantially complete”, the PM shall immediately prepare a written
declaration to that effect and transmit this to the Contractor, along with a Punch List.
 If the Project is not “substantially complete”, the PM shall inform the Contractor that the
project is not “substantially complete”. The written notification (normally within 21 days
after receipt of the Contractor’s certification of “substantial completion”) shall list
outstanding or incomplete work items remaining that demonstrates the project is not
“substantially complete”.
 If the authority fails to respond by presentation of a written declaration or itemized list
within specified time, then the contractor’s certification shall take effect as the authority’s
declaration that the work has been “substantially completed”.
Taking over certificate
• When it is declared that work is substantially completed, a written commitment is taken
from contractor to complete any outstanding work in punch list in defect liability period
and taking over certificate is issued.
• Issuing of taking over certificate implies:

COMPILED/PREPARED BY: SUBASH BHATTARAI 47

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 The work is completed to the satisfaction of authority

 Transfer of insurance and care of work to employer

Issuance of defect liability certificate

• Defect liability period (DLP) starts from the date of completion of the works certified.
• When defect liability certificate is issued, it should be understood that the contract is
effectively completed.
• It is issued after completion of defect liability period. Before issuing defect liability
certificate, the contractor shall:
 Complete the outstanding work on the date stated in taking over certificate
 Rectify all kind of defects
• If the contractor fails to rectify defects and complete the outstanding works, the job is
carried out by employer using fund of performance security and retention money.
Final payment
• Once work completed is accepted by the public entity, final payment shall be made in
accordance with terms of contract.
• In making final payment, performance security and 50 % of retention money shall be
returned after expiry of defect liability period. The remaining 50 % of retention money
shall be returned upon submission of evidence issued by the concerned Inland Revenue
office that income returns have been submitted.
Work completion report
• No later than 30 days after completion of a construction work the contractor shall submit
an as built drawing of the work.
• After expiry of DLP, following the completion of construction work, the chief of public
entity shall have a technical employee to examine and inspect whether the construction
work is in compliance with agreement or not.
• The technical employee shall submit a report to chief of public entity.
• The concerned public entity shall submit the as build design and the submitted work
completion certificate to tender approving authority, and to the one level higher authority
if chief and chief of PE is same person.
• After examining the work by technical expert if required, such authority shall accept work
within 45 days of submission of the report

COMPILED/PREPARED BY: SUBASH BHATTARAI 48

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Chapter 8.0 Introduction to guidelines

8.1 FIDIC Documents
8.2 ADB Guidelines
8.3 WB Guidelines
8.4 Other Donor Guidelines
Refer slides

COMPILED/PREPARED BY: SUBASH BHATTARAI 49

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Chapter 9.0
Technical Audit (5 hours)
9.1 Concept of Technical Audit
9.2 Status of Technical Audit in Nepal
9.3 Technical Audit Process
9.4 Performance Evaluation

A project audit is an independent assessment of any aspects of the project that is worrying a project
management team.
Project auditing can be defined as the process of detailed inspection of the management of
a project, its methodology, its techniques, its procedures, its documents, its properties, its budgets,
its expenses and its level of completion

A project audit is a key step in the process of closing a project. This audit evaluates the total project
processes and outcomes.

The life cycle of an audit contains six phases: audit initiation, project baseline definition,
establishing a database, preliminary project analysis, preparing final report and terminating the
project.
Goal of a project audit

COMPILED/PREPARED BY: SUBASH BHATTARAI 50

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 The main goal of an audit is to inspect and evaluate the current state of project realization,
find out to what extent it complied with defined criteria for project success and identify
opportunities for improving the project realization and management.
 This inspection can be performed after the project completion or after the end of one
project realization stage, or it can be performed during the project realization.
Benefit of Project Audits
 Project audits can help identify when a project is about to go off-course. In addition, a
project audit can provide the following benefits:
 Improve project performance.
 Increase customer and stakeholder satisfaction.
 Save costs.
 Control scope and avoid scope creep.
 Provide early problem diagnostics.
 Clarify performance/cost/schedule relationships.
 Identify future opportunities for improvement.
 Evaluate performance of the project team.
 Inform client of project status/prospects.
 Reconfirm feasibility of/commitment to project.
Need of project Audit
 Audits can be triggered when:
 Situations come about which do not give a clear picture of the happenings on a
project.
 A doubt arises on whether the project deliverables are being achieved.
 Technical gap seem to be apparent.
 The progress on the project is vastly in variance with the project plan.
 There are doubts about the organization of the project and its ability to produce
results.
 A need for technical changes is felt, to see whether they conform to best practices
in the industry.
 Needs to pinpoint defects and suggest the best methods to move forward to proper
implementation.
 Projects that have a number of milestones and deliverables are best audited at
regular intervals.
 Existing documents and data would have to be studied.
 Key team members would have to be interviewed to understand the processes
which they have followed for execution of the project.
 When audit completed reports would have to be prepared which would give a
summary, the background that initiated, and risks identified.
 It must also lay down clearly the effects of the risks perceived and their likely
outcome on the project in case they are ignored.

Types of Audit
 Finance and account audits area associated with detecting fraudulent, which in fact is one
facet of auditing. Auditing has many important uses, from validating he honesty and
fairness of financial statements to providing a critical basis for management decisions.

COMPILED/PREPARED BY: SUBASH BHATTARAI 51

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 External auditing is the verification process involving the independent appraisal of

financial accounts and statements.
 Internal audit is performed by the internal auditing staff of the organization itself to
ensure that its assets are properly safeguarded and its financial records reliably kept.
 Project audit is also one of the ways to evaluate the project.
 It provides opportunity to have an independent appraisal of where the project stands
in terms of efficiency and physical progress in light of the strategic objective, goal
of the project
 Social Audit
 Technical Audit
 Environmental Audit
Purpose of audits will be:
 Determining
 What is going right and why?
 What is going wrong and why?
 Identifying
 Forces and factors that have prevented or may prevent achieving cost,
schedule, technical performance goal
 Evaluating
 Efficacy of existing project management strategy including organizational
support, policies, procedures, practices, techniques, guidelines, action
plans, funding patterns, human and other resources utilization
 Providing opportunity
 To exchange ideas, information, problem, solutions and strategies
Depth of Audit
Planning & Design Procurement/ Implementation Impact of Project
Purchase

COMPILED/PREPARED BY: SUBASH BHATTARAI 52

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

• Need • Compliance • Timely • Reduction in

analysis & with completion operation cost
Demand Financial of project or
analysis Manual • Provision improvement
• Technical • Independent of liquidity in operation.
Specification evaluation damage in • Increase
preparation of received case of market share
and proposal. delay in • Improvement
authorization project in Key
• Quality completion. Performance
Assurance • Acceptance Indicator
and Test Report (KPI)s
Experience • Increase
of Supplier customer
required in loyalty or
the project decrease
customer
churn
• Increase
Revenue of the
company.

Life-cycle of Project Audit

 Project Audit Initiation
 Project Baseline Definition
 Establishing an Audit Database
 Preliminary Analysis of the Project
 Audit Report Preparation
 Project Audit Termination
Auditor’s responsibility
 General
 The auditor must maintain independence in mental attitude in all matters related to
the audit.
 The auditor must have adequate technical training & proficiency to perform the
audit.
 The auditor must exercise due professional care during the performance of the audit
and the preparation of the report.
 Standards of Field Work
 The auditor must adequately plan the work and must properly supervise any
assistants.

COMPILED/PREPARED BY: SUBASH BHATTARAI 53

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 The auditor must obtain a sufficient understanding of the entity and its environment,
including its internal control, to assess the risk of material misstatement of the
financial statements whether due to error or fraud, and to design the nature, timing,
and extent of further audit procedures.
 The auditor must obtain sufficient appropriate audit evidence by performing audit
procedures to afford a reasonable basis for an opinion regarding the financial
statements under audit.
 The auditor must assign qualified personal to the engagement.
 Standards of Reporting
 The auditor must state in the auditor's report whether the financial statements are
presented in accordance with generally accepted accounting principles.
 The auditor must identify in the auditor's report those circumstances in which such
principles have not been consistently observed in the current period in relation to
the preceding period.
 When the auditor determines that informative disclosures are not reasonably
adequate, the auditor must so state in the auditor's report.
 The auditor must either express an opinion regarding the financial statements, taken
as a whole, or state that an opinion cannot be expressed, in the auditor's report.
 In all cases where an auditor's name is associated with financial statements, the
auditor should clearly indicate the character of the auditor's work, if any, and the
degree of responsibility the auditor is taking, in the auditor's report.
 Taking into consideration the shift from the traditional assurance role toward more
proactive roles in projects. These roles are:
 The core roles: traditional assurance roles such as project reviews.
 Legitimate roles with safeguards: consulting and participative project roles that can
be performed by the internal auditor if certain preconditions are met.
 Roles that should not be undertaken by internal audit such as the management of
project related risks.
 Step of Project Audit
 Critically review project documents
 Interview project team and stakeholders – to gain insights project perceptions and
affairs
 Participate in some project activities – to gain an appreciation of project
opportunities and problem
 Prepare and submit audit report

Technical Audit
Technical Audit (TA) is an audit performed by an auditor, engineer or subject-matter
expert evaluates deficiencies or areas of improvement in a process, system or proposal. Technical
audit covers the technical aspects of the project implemented in the organization
 It is a tool to monitor in order to determine the overall (work/activities) performance of the
project.
 It help to maintain the construction work adherence to the appropriate quality,
sustainability of construction work, on schedule, in time correction of technical
deficiencies and defects if any.

COMPILED/PREPARED BY: SUBASH BHATTARAI 54

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 It target to achieve the economy, efficiency, transparency, accountability, zero tolerance

on corruption and increment in value for money.

Objectives of auditing
 The technical operations are being performed as per requirement.
 Sound framework of control is in place to sufficiently mitigate the potential risk.
 The procured technical equipment is technically suitable for the purpose.
 Authority and responsibility for operating activities are assigned properly.
 Information system is adequate to provide assurance of operating activities being
performed properly.

Technical Audit in Nepal

 In Nepal we don’t have long history on technical audit. However, in 2056 B.S amendment
on financial administration regulation (FAR) introduced the technical audit and its
management section at NPC
 World Bank had supported the ministry of physical planning and works for capacity
enhancement related activities and technical audit works from the public entity.
 To avoid the conflict of interest in technical audit within the same public entity, it has been
transferred to the National vigilance Centre (NVC) by Shrawan 1st 2060 B.S. however, in
2063 B.S as per PPA this responsibility has been assigned to PPMO but PPMO is only
responsible for Procurement related issues rather than technical audit of construction works.
So then after the responsibility has been transferred to NVC.
 In general, technical audit means regular monitoring and examination (continuous audit) of
construction works adherence to the sustainability, quality improvement, cost effectiveness,
schedule effectiveness.
 The regulation of NVC, project is defined as:
 Concept planning, feasibility study, DPR preparation
 Procurement of service, goods and construction materials.
 Procurement and construction of works
 Operation, maintenance of project, re-construction

Stages of technical audit

In general, technical audit shall be carried out it four different stages of the project
 Design phase
 In this phase technical audit regarding the effectiveness and relevancy of
conceptual study, feasibility study, work plan, data collection, site selection, cost
estimates etc. are examined

 Procurement phase
 In this phase technical audit regarding procurement plan, procurement strategies,
selection of procurement method, procurement process, use of PPA, PPR, PPMO
guidelines, preparation of bidding documents, bid or proposal evaluation, contract
agreement, effectiveness in implementation of agreement, timeliness, quality,
transparency, competitive process, accountability etc. are examined.

 Construction phase

COMPILED/PREPARED BY: SUBASH BHATTARAI 55

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

 In this phase technical audit regarding the use of technical norms, quality standards,
drawings and designs, cost estimates, work schedule, human resources of
contractor, material, fund mobilization, workmanship in terms of effectiveness in
cost , quality, time .

 Operation phase
 In this phase technical audit regarding sustainability, relevancy of design,
environmental study, effectiveness of cost and benefit analysis, effectiveness of
outcomes, operation cost, effectiveness of maintenance cost, participation for
people etc. are examined

Process of TA and Criteria to be a Technical Auditor

 In Nepal NVC usually schedules and defined the programmes related to TA.
 The project implemented by GON and Donor Agencies are taken for TA in sample basis
which shall be progammed by NVC.
 NVC mobilizes the third party consultant for the TA work.
 NVC prepares the standing list of third party consultant.
 NVC sets the criteria for Technical Auditor as:
 Bachelor in engineering + 10 years’ experience in relevant field
 Registered in Nepal engineering Council
 NVC manage the training programme for short listed TA
 NVC open for the proposal (technical and financial) submission from short listed TA and
select Lowest evaluated substantially responsible proponent.
 NVC prepare the TOR and undergoes the agreement with the selected consultant

TA shall examined the following during technical auditing

 Effectiveness of cost estimates, timeliness, quality, effectiveness and result including
following details
 Relevancy of design
 Possibility in getting proposed result
 Effectiveness and sustainability of project
 Relevancy of Conceptual study, feasibility study, procurement of services, works,
goods, quality standards
 Budgetary provisions and work plan
 Goal setting and objective setting
 Work schedule (start of activities and end of project)
 Progress of work schedule and use of work schedule
 Quality related issues and its handling
 Budgetary provision for operation and maintenance
 TA shall follows following Methodologies for above mentioned TOR

 Questionnaire and Document reviewing

 Examination
 Reporting
 Immediate communication

COMPILED/PREPARED BY: SUBASH BHATTARAI 56

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Effectiveness of Technical Audit

 TA is the based on auditing of technical aspects of infrastructure related projects. Engineers
and technical personnel from engineering filed are mobilized for the technical audit. Since
the scope of technical audit is vague in terms of various subject matter and monitoring and
evaluation aspect, time, cost and quality related parameters are under evaluated in general.
 Schedule for TA task is irrelevant in context of Nepal. Usually, TA are carried out in first
and second trimester but most of the infrastructure related projects are completed or about
to complete by the third trimester which leads to less number of project qualify for the
Technical Audit. Similarly, if TA is carried out in third trimester, it consequently impart in
the physical progress of the work (chances of being delay in work) which has been under
taken for Technical Audit.
 Similarly there seems some duplication in work of NVC and PPMO which misleads the
TA. There seems some conflict of interest in TA related works as most of the Technical
Auditor are from the retired HR of GoN ( Engineering Services)

Financial Audit
 A financial statement audit is conducted to provide an opinion whether the financial
statements (the information being verified) are stated in accordance with specified criteria.
 Normally, the criteria are international accounting standards, although auditors may
conduct audits of financial statements prepared using the cash basis or some other basis of
accounting appropriate for the organization.
 In providing an opinion whether financial statements are fairly stated in accordance with
accounting standards, the auditor gathers evidence to determine whether the statements
contain material errors or other misstatements.
 The audit opinion is intended to provide reasonable assurance, but not absolute assurance,
that the financial statements are presented fairly, in all material respects, and/or give a true
and fair view in accordance with the financial reporting framework.

Environmental Audit
 Environmental audit is a general term that can reflect various types of evaluations intended
to identify environmental compliance and management system implementation gaps, along
with related corrective actions.
 In this way they perform an analogous (similar) function to financial audits. There are
generally two different types of environmental audits: compliance (observance) audits and
management systems audits.

Social Audit
A social audit is a way of measuring, understanding, reporting and ultimately improving an
organization's social and ethical performance. A social audit helps to narrow gaps between
vision/goal and reality, between efficiency and effectiveness.

COMPILED/PREPARED BY: SUBASH BHATTARAI 57

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

Social auditing creates an impact upon governance. It values the voice of stakeholders, including
marginalized/poor groups whose voices are rarely heard. Social auditing is taken up for the purpose
of enhancing local governance, particularly for strengthening accountability and transparency in
local bodies.
The key difference between development and social audit is that a social audit focuses on the
neglected issue of social impacts, while a development audit has a broader focus including
environment and economic issues, such as the efficiency of a project or programme.
Objectives of social audit
 Assessing the physical and financial gaps between needs and resources available for local
development.
 Creating awareness among beneficiaries and providers of local social and productive
services.
 Increasing efficacy and effectiveness of local development programmes.
 Scrutiny of various policy decisions, keeping in view stakeholder interests and priorities,
particularly of rural poor.
 Estimation of the opportunity cost for stakeholders of not getting timely access to public
services.
Advantages of social audit
 Encourages local democracy.
 Encourages community participation.
 Benefits disadvantaged groups.
 Promotes collective decision making and sharing responsibilities.
 Develops human resources and social capital

COMPILED/PREPARED BY: SUBASH BHATTARAI 58

 PROCUREMENT MANAGEMENT- ELECTIVE –III (2018)

References

1. Subash K. Bhattarai, Santosh Kumar Shrestha & RK Shrestha ''A Text Book of Construction
management" Heritage Publishers and Distributors Pvt. Ltd., Bhotahity, Kathmandu.
2. Public Procurement Act (2063) and Regulation (2064)
3. Standard bidding documents (SBD) prepared by PPMO
4. Public Procurement Management in Nepal (Principles and Practices), By Ramesh Kumar Sharma
5. FIDC Documents
6. ADM procurement guidelines
7. WB procurement guidelines
8. Class lecture by: Er. Mani Ram Gelal (MSC CM, Nepal Engineering College)
9. Class lecture by : Er. Subash Bhattarai (MSC CM, Nepal Engineering College)
10. Class lecture by: Er. Padam Oli (Procurement management), LEC
11. Class lecture by: Er. R. Pokhrel (Procurement Mangement), HCOE

COMPILED/PREPARED BY: SUBASH BHATTARAI 59