Procurement of Consulting Engineering Services - Cesa

Best Practice Procurementof Engineering ServicesPort Elizabeth14 April 2011Godfrey RAMALISAWally MAYNEIvor EVANS

Introduction (cont‟d)Issues Facing the Sector - CESAIndustry and Society under distressThe lack of technical managementcapacityDelayed paymentFew work opportunitiesLower marginsLack of infrastructure maintenanceBribery and corruptionInexperienced officials andconsultantsPoorly defined scope of works andservicesPoor procurement practices(deviations)Inappropriate constructionprocurement models

Introduction (cont‟d)Issues Facing the Sector – Engineers Australia10 - Root Cause of Construction Industry Decline1. Inadequate project briefs 6. Inexperienced client projectcoordinators2. Lack of integration 7. Poor appreciation of optimiseddesign3. Devalued professional ethics andstandards8. Lack of skilled and experiencedpeople4. Lowest bid selection strategy 9. Poor use of technology5. Poor management processes 10.Lack of open communicationBy Engineers Australia,2004

Introduction (cont‟d)Issues Facing the Sector - cidbDesignProcurementConstructionCorruption• Inadequatedetails andspecification• Poor designcoordination• Emphasis ontime andbudget• Shortenedproject periods• Lack ofprequalification• Competitivetendering• Awards ofcontractsprimarily onprice• Skills shortage• Insufficientworkforcetraining• Lack ofmanagementcommitment• Lack of strictquality control• Corruption• Corruption• Corruption• Corruption

Introduction (cont‟d)Issues Facing the Sector - cidbSurvey:Barriers to Construction QualityParticipants:1. Public clients2. Designers3. Project managers4. ContractorsPoor site managementLack of contractor quality expertiseCorruptionInadequate resourcing by contractorsLack of understanding of qualityLevel of subcontractingInadequate informationDetailFocus on cost by contractorsPoor constructability

Introduction (cont‟d)Issues Facing the Sector – MDB‟s• General observation that the quality of the constructedproject has been deteriorating• This observation is confirmed by the MultilateralDevelopment Banks (MDB‟s)project managers, executing agencies and internationalconsultants• It is also perceived that good international consultantsare losing interest in MDB-funded projectsWhy has the quality of the constructed project deteriorated?

Introduction (cont‟d)Issues - Causes of Deterioration in Quality1. Procurement of CE services based on PRICE- A major cause is the diminished quality of design- Lower quality design results when engineeringservices are procured as a commodity- The procurement of engineering services in which costis a factor (QCBS) promotes engineering services ascommodity servicesOther factors contribute as well, including:2. Corruption3. Incompetent contractors4. Poor project management5. Lack of resources to manage contractors

Introduction (cont‟d)The Issues – Procurement Indaba 2008• Similar concern where raisedOutcomes• Write simplified step-by-step Best Practice Guideline Manual,drawn in collaboration with the cidb• National roll-out• and revised with inputs from 2010 Roadshow

Introduction (cont‟d)Objectives1. To inform and capacitate clients and consulting engineerson procurement best practice2. Instigate delivery of consulting engineering services in truevalue–added context3. Instigate compliance to the requirements of procurementcontracts ito CIDB & Treasury legislation4. To provide CE‟s and clients a platform to makesuggestions to the best practice procurement guidelinemanual.

Introduction (cont‟d)Our MissionCreate a conducive sustainable procurement environment to enhancedinfrastructure delivery.Ensure that the right firm(s) are appointed for the right jobAppointment at a reasonable level of compensationEnsure continued existence and development of firm(s) and industryServe the best interests of public

Introduction (cont‟d)Best Interest of the PublicCost effective, Reasonable feeMoney spent on projects once,no rebuildingSafe, User friendly,Reliable, Useable and AppropriateInfrastructure

Introduction (cont‟d)•"Yes We Can“ - DeliverWorkingTogetherPartneringTogetherWalkingTogetherSharingKnowledge

Introduction (cont‟d)Outline - CESA Guideline Manual/BriefingChapter 1.Chapter 2.Chapter 3.Chapter 4.Chapter 5.Chapter 6.Chapter 7.Chapter 8.Project Life-cycleConsulting Engineering ServicesProcurement of Consulting ServicesScope - expanded description of elements of scopeTender Documentation for CESValue – Added Services – value of additional CESEvaluation of tendersPerformance monitoring – Suggested framework for CPE.

Consequences:Appointingthe wrong firmforthe right job‟

Example: Wrong Firm„House & Bridge‟ Consulting EngineersSpecialist in portable house and bridgesDesign & ConstructionAssignment: Three relatively easy questions.Question # 1:How much does a house weigh?Question # 2:How much weight can a rural two-lane bridgeHold???

Unskilled firm for the right job“… a house becomes a bridge”

Incompetent firm for the right job“… a bridge that cannot be used”

Inappropriate Engineering Consultant for the right job“… delivers a useless house ”

Unqualified firm for the right jobQuestion # 3Would this be covered byPI,Home insurance,car insurance,or,Does it come under the roadside accident fund ???---------------------------------------------------------------------------------------------------------------We can all relate to this, e.g.Nov09: “40 000 defective RDP houses to beflattened and rebuilt at a cost > R1-billion”.Feb2011: rebuild about 50000 low-costhouses - thousands more than expected.“… delivers questions rather than intended product”

Inexperienced firm for the right jobWe can relate to this: R4 million bridge swallows a taxi!“… waste of Tax Payers Money” and indeed COUNTER REVOLUTIONAY !!!

“I told you to use Quality Principles to build this Bridge”Solution:Using Quality Principles- Appointing - Designing -Executing ProjectsOperations and Maintenance

Right firm for theright jobSession1

SESSION 11.1 Consulting Engineers South Africa1.2 Consulting Engineering Industry1.3 The Foothold – Definitions1.4 The Project Life-Cycle1.5 Overview of Consulting Services

1.1 Consulting Engineers South Africa (CESA)

Consulting Engineers South AfricaHistory (see page 1)• South African Association of ConsultingEngineers (SAACE) founded in 1952• Original membership 30 individuals• August 2008 - SAACE transformed toConsulting Engineers South Africa (CESA)• Consists of 480 private CE firms – stillgrowing• Employing more than 22 000 people

Consulting Engineers South AfricaRole of CESAPromote interests of Members and Clients by:• Regular liaison meetings• Engineering comment on legislation etc• Advisory Notes for Members and Clients• New/revised contracts/forms of agreement• Guidelines on professional practice matters• A peer review and quality management programme• Seminars, workshops and conferences• FIDIC (International Federation of CE Associations)

Consulting Engineers South Africa - contdProfessionalism and Integrity of Members:1. In general:• ECSA registers professional individual engineers,technologists etc• CESA „registers‟professional Consulting Engr Firms2. Credibility of applicants• In business > 12 months• Nominated & Seconded by CESA member firms3. Ongoing requirements• Subject to CESA Code of Conduct (includes BIMS)• Ownership/principals > 50% Pr Engrs/Techno‟s• Primary work (Consulting Engineering)• QMS in place• Developing Integrity Pact (see Appendix A)

Consulting Engineering Industry1.2 Consulting Engineering Industry• Consulting Engineering Industry Overview• Construction Industry – Enabler & Regulator

Consulting Engineering Industry OverviewThe birth (see page 5)• ‟Engineer‟ first appeared in 15 th Century - in the military• „Non-military engineers‟ in civilian capacity– hence „civil engineers‟• Associations formed to exchange experiences – improve status• Engineering formalised as profession‣ safeguard health & welfare of public‣ prevent unqualified people from selling engineering services• Associations formed to promote learning and the profession• Sanitation voted greatest medical advance since 1840 – BMJ• Improved transportation increased world trade volumes by 800 xover last 100 years

Consulting Engineering Industry OverviewThe order today• Non-reservation of engineering work – tenderpreneurs• Tendering process – Price >>> Quality, engineering as commodity• Ignorance – competence/value of CEs unrecognised• Contractors & CEs - world class – Soccer World Cup infrastructure• CEs Environment‣ corruption‣ non-technical managers – 5 year contracts – deployment‣ poor schooling – maths/ science‣ silo effect, non – integration• Engineering need recognised by President eg „30 000 engineers by 2014‟

Consulting Engineering Industry OverviewThe future• Competitive tendering here to stay – not to drive professional fees down• Struggle continues‣ professionalism – modern, faster ECSA registration,‣ reservation of engineering work – CBE - approve ECSA IDoEW‣ service delivery - use of appropriate procurement methods• Up “Change there with isother uponprofessionals us; there is(doctors, no futurelawyer, in theCA, status etc) quo; industrymust adapt. --- Firms must grow in capability and scope ofservices to meet the client demands. We must move „up thefood chain‟ to a new set of value-added services for our clients.”FIDIC Report Engineering Our Future

The World without Engineers

The World without Engineers

Construction Industry Enabler and RegulatorThe Construction Industry Development Board (see page 3)Established by and gets its mandate from the CIDB Act (38 of 2000)Aims:• Promote sustainable growth - construction industry - sustainableparticipation of emerging sector• Promote improved performance & best practice - public andprivate sector clients, contractors and other participants• Promote - procurement & delivery management - uniformapplication of policy - all spheres of government - uniform andethical standards - guided by a Code of Conduct• Establish registers - tool - systematically regulate & monitor theperformance of industry and stakeholders‣ Register of Contractors(RoC)‣ Register of Projects (RoP)‣ Register of Prof Service Providers (RoPSP)

Construction Industry Enabler and RegulatorRegister of Prof Service Providers (RoPSP)Size of firm&No. of registeredpersonsEmpowermentDatabaseSize / Value ofcompleted projects&Financial RecordsExperience/Performance Evaluation

Construction Industry Enablerand RegulatorCode of Conduct establishes certain standards ofbehaviour…• Behave equitably, honestly and transparently.• Discharge duties and obligations timeously and with integrity.• Comply with all applicable legislation and associated regulations• Satisfy all requirements established in procurement documents• Avoid conflict of interest• Not maliciously injure/ attempt to injure the reputation of 3 rdparty

Construction Industry Enabler and RegulatorMonitoring role - CIDB can:• Conduct investigations• Sanction offenders• Suspend offenders from the CIDB RoC• Issue fines to Employers up to R100 000• Intergovernmental Relations Framework Act – liaises with:‣ Treasury‣ Public Protector‣ Auditor GeneralCIDB documentation/prescripts• Standard of Uniformity (SFU)• Code of Conduct• Practice notes/ Legislation(see Appendix I – useful websites)

1.3 The Foothold – Definitions (see page 9)

Consulting Engineering - definitionsConformity of Terminology• Terminology in Manual aligned with‣ CIDB documentation‣ ECSA Guideline Scope of Services & Tariff of Fees‣ CIDB‟s Revised SFU in Construction ProcurementExamples• Bid = Tender• Client = he/she who engages the Consulting Engineer (CE)• Construction Monitoring = admin of Construction Contract forverification only – new term• Contract = Agreement between Client and CE• Contractor = not the CE• Engineering & Construction Works contract = includesconstruction, repair, maintenance, alteration, demolition etc ofbuilding and engineering infrastructures

Consulting Engineering - definitionsNoteworthy Examples (cont‟d)• Normal Services = Typical services as in ECSA guideline tariffs• Quality = “Totality of features of a service that bears on its ability tosatisfy stated or implied needs”• Scope of Services = Services undertaken by the CE in relation tothe Scope of Work• Scope of Work = Portion of the Works for which the CE is engaged• Tender Price = Price submitted including all payment conditions,costs and disbursements• Threshold = Monetary value of procurement contract above or belowwhich a given procedure may be used

1.4 The Project Life Cycle (see page 11)

The Project Life Cycle9Disposal /Renewal1Identification2Definition8Operations &Maintenance3Feasibility7Construct4Concept &Viability6Procure5Design

The Project Life CycleThe Project Life Cycle (cont‟d)Steps 1 to 3 : Identification, Definition, Feasibility• Identifying the potential project – often by Owner, Specialist assistance• And defining the best project to meet the need• Reject unsuitable solutions, shortlist suitable alternatives• Select the best project, based on technical and financial feasibility• Asset management planningSteps 4, 5, 6 : Concept & Viability, Design, Procure• Developing the project through all concept and viability stages, confirmviability• Detail design of the project to procure construction• Design can be a maintenance/operation assignment• Procuring a contractor to construct – proper tender/contractdocuments, proper evaluation of tenders

The Project Life CycleThe Project Life Cycle (cont‟d)Steps 7, 8, 9: Construct, Operate and Maintain, Disposal/ Renew• Construction:‣From site handover to when Owner takes possession of theconstructed project‣Final handover after Defects Liability Period expired and defectsrectified• Operation and Maintenance:‣Usually by Owner - According to manuals and own procedures‣O & M - May be contracted out• Disposal/Renewal:‣Actions at end of Operations & Maintenance period‣Close down or renew facility etc for another periodNote: CE may be appointed for any one, or all, of the steps 1 to 9

1.5Overview of Consulting EngineeringServices (see page 13)

Overview of Consulting Engineering ServicesTown planningStructuralQuantity SurveyingProject ManagementMiningMechanicalMarineInformation Systems /…HydraulicsGISIndustrial Process / ChemicalGeotechnicalFacilitiesEnvironmentalElectrical / ElectronicCivilMechanical building ServicesArchitectureAgricultural0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Percentage shareWaterTransportationEnergyMining/QuarryingEducationHealthTourismHousingCommercialAgricultureOtherOverview of Consulting Engineering Services40.00%Economic Sectors35.00%30.00%25.00%20.00%15.00%Dec-08 Jun-09 Dec-09 Jun-1010.00%5.00%0.00%

Overview of Consulting Engineering ServicesValue of Services1. Early project stages:• Services deliver most value• Functionality & quality of the proposed service more important thanCost (Steps 1 to 3)2. After project is well defined:• Services are easier to determine• Role of high level expertise reduces as project develops• Efficient more routine tasks more important• Correct/comprehensive contract documentation is vital

Overview of Consulting Engineering ServicesRequired Expertise and Value over Project Life CycleStep in Project Life CycleIdentificationDefinitionFeasibilityConcept and ViabilityDesignProcurementConstructionOperations and MaintenanceRequired expertise and potential for valueStrategic concepts and lateral thinking to identify appropriate options.Operational and value options to define projects that are likely to befeasible and cost-effective.Identification and elaboration of possible alternatives and costeffectiveness.Project optimisation subject to budget and environmental constraints.Quick and effective design detailing and incorporation of latestappropriate technological developments.Good contract documentation, accurate schedule of quantities andappropriate procurement optionsConscientious construction administration and monitoring and effectivehandling of contractual issuesAsset management and preventative maintenance

Q&A - Session 2

SESSION 22.1 How to Procure Engineering Services

Procurement of Consulting Engineering ServicesProcurement ≈ TenderingCompetitive tenderinghere to stayLowerExpertiseTendering of professionalengineering services isuniqueServices cannot beawarded based onprice/lowest price onlyLowDevelopmentLowestPriceLessOptimizationSuperior qualificationsand experience forms theparamount basis forselecting CEPoor Quality /OutcomePoorPerformance

Procurement of Consulting Engineering ServicesImportant that Government recognises:• CE‟s are an important pool of expertise & skilled resources• High standard of engineering & Infrastructure dev vital for growth• National Treasury policy statement:“It is necessary that certain minimum standards of quality andefficiency be achieved when appointing consultants”• Need to maintain a basic policy of competitive selectionLegal Environment for consulting engineering services:• Constitution of South Africa• System is to be Fair, Equitable, Transparent, Competitive, Costeffective• Adopted by ISO in ISO 10845 series for construction procurement

Procurement of Consulting Engineering ServicesTABLE : PILLARS OF PROCUREMENTSystemrequirementFairEquitableTransparentCompetitiveCost- effectivePromotion ofotherobjectivesQualitative description of requirementThe process of offer and acceptance is conducted impartially without bias, and providesparticipating parties simultaneous and timely access to the same information.Terms and conditions for performing the work do not unfairly prejudice the interests of theparties.The only grounds for not awarding a contract to a tenderer who complies with allrequirements are restrictions from doing business with the organization, lack of capability orcapacity, legal impediments and conflicts of interest.The procurement process and criteria upon which decisions are to be made shall bepublicized. Decisions (award and intermediate) are made publicly available together withreasons for those decisions. It is possible to verify that criteria were applied.The requirements of procurement documents are presented in a clear, unambiguous,comprehensive and understandable manner.The system provides for appropriate levels of competition to ensure cost-effective and bestvalue outcomes.The processes, procedures and methods are standardized with sufficient flexibility to attainbest value outcomes in respect of quality, timing and price, and the least resources toeffectively manage and control procurement processes.The system may incorporate measures to promote objectives associated with a secondaryprocurement policy subject to qualified tenderers not being excluded and deliverables orpreferencing criteria being measurable, quantifiable and monitored for compliance.

Procurement of Consulting Engineering ServicesProcurement - Need to maintain a reasonable Balance betweenCompetition & CompensationCompetitionCompensation

Procurement of Consulting Engineering ServicesPrimary Legislation Regulating Procurement - Refer to Table 3.2, page 11Constitution of the Republic of South Africa (Act No. 108 of 1996) - Section217 states that government procurement systems must be Fair, Equitable,Transparent, Competitive and Cost EffectiveFair, Transparent, Competitive, Cost EffectiveEquitablePublic FinanceManagement Act(Act No. 1 of1999)Municipal FinanceManagement Act(Act No. 56 of2003)ConstructionIndustryDevelopmentBoard Act (ActNo. 38 of 2000)PreferentialProcurementPolicy FrameworkAct (Act No. 5 of2000)Broad BasedBlack EconomicEmpowermentAct (Act No. 53 of2004)PFMA MFMA CIDB PPPFA BBBEEPublic SectorClientsPublic SectorClientsPublic andPrivate SectorClientsPublic SectorClientsPublic andPrivate SectorClientsCompliance with CIDB‟s “Standard for Uniformity in Construction Procurement” (SFU) –compulsory for organs of state

Procurement of Consulting Engineering ServicesObjectives of Procurement• Procurement - engaging skilled professionals – not a commodity• Aim of competitiveness - ensure LT value not ST low-cost design• Transparency – encourage development & maint. of skills & expertise• CIDB Guidelines can provide the necessary resultsMethods of Procurement1. Financial Offer2. Financial Offer plus Preference3. Financial Offer plus Quality (Functionality)4. Financial Offer plus Quality plus Preference• Prescribed by CIDB Standard for Uniformity (SFU)• Services must provide cost-effective & value-added performance• Depends on innovativeness, expertise and competence• Inclusion of Quality is essential

Procurement of Consulting Engineering ServicesCIDB : Recommends - QCBSQuality and Cost-Based Selection(QCBS) – Method 4• Accords with CIDB‟s SFU (Standardfor Uniformity)• Based on CIDB‟s Best PracticeGuidelines for Competitive Selection• CIDB states - Method 4 applies in allbut small minority of cases• Method 4 is mandatory for publicbodiesFIDIC: Recommends - QBSQuality -based Selection (QBS)• An owner identifies the generalscope of work and develops aselection schedule.• A request for qualifications is issued.• Statements of qualifications areevaluated.• A short-list of qualified firms to beinterviewed is determined.• Interviews are conducted and thefirms are ranked.• The owner invites the highest rankedfirm to assist in defining a detailedscope of work

Procurement of Consulting Engineering Services„Spanner in the Works‟ (see Appendix B)• the KwaZulu Natal High Court, Pietermaritzburg, case no 10878/2009ruled that Quality score cannot be combined with Price & Preference• relegates functionality/ Quality to a pre-qualification criteria (using aminimum threshold).• Thus, rendering „CIDB Method 4‟ to be invalid.• The incorporation of quality-based principles in the execution of projects isessential to the achievement of the stated goal.‣ A reversal of the trend of diminished quality outcomes on projects.‣ This reversal can be accomplished by reverting to Best ProcurementPrinciples – Quality Based Selection.

Procurement of Consulting Engineering ServicesCompetitive Selection ProceduresPP2A (Nominatedprocedure)PP2B (Openprocedure)PP2C (Qualifiedprocedure)PP2D (Quotationprocedure)PP2E (Proposalprocedure)PP2F (Proposalprocedure)PP2G (Shoppingprocedure)Tenderers that satisfy prescribed criteria are admitted to an electronic database. Tenderersare invited to submit tender offers based on search criteria and their position on thedatabase. Tenderers are repositioned on the database upon appointment or upon thesubmission of a tender offer.Tenderers may submit tender offers in response to an advertisement by the organisation todo so.A call for expressions of interest is advertised and only those tenderers who have expressedinterest, satisfy objective criteria and who are selected to submit tender offers, are invited todo so.Tender offers are solicited from not less that three tenderers in any manner the organisationchooses, subject to the procedures being fair, equitable, transparent, competitive and costeffective.Tenderers submit technical and financial proposals in two envelopes. The financial proposalis only opened should the technical proposal be found to be acceptable.A two staged system: Non-financial proposals are called for. Tender offers are then invitedfrom those tenderers that submit acceptable proposals based on revised procurementdocuments. Alternatively a contract is negotiated with the tenderer scoring the highestnumber of evaluation points.Written or verbal offers are solicited in respect of readily available supplies obtained fromthree sources. The supplies are purchased from the source providing the lowest FinancialOffer once it is confirmed in writing.

Procurement of Consulting Engineering ServicesPoints to Note:1. Quoting from CIDB Best Practice Guideline A7 - Procurement ofprofessional services should be undertaken on:• demonstrated competence & qualifications (for services required)• capacity & capability (to provide the quality of the service)• fair & reasonable Financial Offers (not only least cost)2. Constitution requires procurement to be cost effective & have bestvalue outcomes in terms of:• quality,• downstream & life cycle costs,• timing• financial Offer• least resources to manage & control procurement process.3. Selection on basis of quality – does not necessarily mean the bestquality available but quality appropriate for the assignment.

Procurement of Consulting Engineering ServicesPoints to Note (cont‟d):4. Calling for/ preparation of Tenders:• Scope of Work and Services (SOWS):‣ fully describe SOWS - comparable tenders are received‣ fully describe SOWS - reduce time & effort for tender preparation• Total Input Cost:‣ can be considerable - small projects can be > potential fee & jeopardise finances of the service provider overall economy of the project.• Guideline:• CE‟s potential fee should be 20 times > cost of preparing tender• alternatively, cost to prepare tender should not > 5% of potential CE fee• potential CE fee has to cover - Staff costs, overheads, expenses and profit• tenders should not be solicited for small projects,

Procurement of Consulting Engineering Services4. Calling for/ preparation of Tenders (cont‟d):The following procedure should preferably adopted by client or CE (as agentof client)• Consider grouping small projects together (see Appendix C – frameworkagreements) to reduce number of contractual relationships and complexity• Request proposals for term contracts - where consulting engineer cansupport the client on a partnership basis for all small to medium projectsover a longer period (see Appendix C – term contracts)• Listing manuals and procedures as requirements so lengthy technicalproposals are not required (only proposed staffing & track record)(see Appendix D - useful procurement cycle checklist)(see also Appendix E – good comparison of international best practice)

Q&ATeaBreakSession 3

Scope of Services & Tender DocumentationSESSION 3Scope of ServicesTenderDocumentation

3.1 Scope of Services

Scope of ServicesDefinition• Scope of Services = “Services which a CE must provide in relationto scope of Work”• Must be clearly defined to ensure proper pricing and clear andunambiguous understanding by tenderer• In many instances this is lacking – uncertainty and unrealisticpricing result• Recommended listing deliverables to be produced by the CE, i.e.products of his work (studies, reports, designs, drawings, etc)

Scope of ServicesScope of Services: Planning Studies, Investigations and Assessments(i) Consultation with the client or client‟s authorized representative.(ii) Inspection of the site of the project.(iii) Preliminary investigation, route location, planning and a level of designappropriate to allow decisions on feasibility.(iv) Consultation with authorities having rights or powers of sanction as wellas consultation with the public and stakeholder groups.(v) Advice to the client as to regulatory and statutory requirements, includingenvironmental management and the need for surveys, analyses, tests andsite or other investigations, as well as approvals, where such are requiredfor the completion of the report, and arranging for these to be carried outat the client‟s expense.(vi) Searching for, obtaining, investigating and collating available data,drawings and plans relating to the works.(vii) Investigating financial and economic implications relating to theproposals or feasibility studies.

Scope of ServicesScope of Services: Normal Project Delivery Stages1. Inception2. Concept & Viability / Preliminary Design3. Design Development/ Detailed Design4. Documentation and Procurement5. Construction6. Close Out

Scope of ServicesDetailed examples (see Appendix F)• Refer to Appendix F, Numerous Normal Services tasks under Stages 1 - 6• Includes Activities/Deliverables• Recommended as a reference or checklist per stagePrincipal Consultant• Refer to Appendix F, Additional Services to Normal Services• Includes Activities/Deliverables• Recommended as a reference or checklist per stage

Scope of ServicesKey Factors common to every scope, in Developing the Scope of Services• Obligations of the Parties• Health and Safety• Sustainability• Information available• Scope must reflect Client‟s intentions to enable tenderers to identify tasksand estimate times to be spent by personnel, and hence to quantify andprice the tenderFailure to prepare Scope of Services in sufficient detail• Tenderer has to make assumptions• Misinterpret Client‟s requirements• Price unnecessarily for Risks• Resultant prices too low or too high• Fails the interests of Client, Consulting Engineer and Project

Scope of ServicesKey Factors in Developing Scope ServicesObligations ofthepartiesHealth andSafetySustainabilityInformationavailableThe tasks required and listed by the Client should clearly all fall within the obligations of theConsulting Engineer (the successful tenderer). If a listed task falls within the Client’sobligations but requires a Consulting Engineer to perform it, it should be described as being“on behalf of the Client” to avoid implying it is solely the Consulting Engineer’s obligationand accord with the obligations of the parties as stated in the intended contract for theservicesLegislation such as the OHS Act lays down comprehensive actions to be taken by partiesresponsible for safety. This includes the Client, who may wish to delegate specific actions ortasks to an OHS practitioner. The previous practice where the Client simply nominated theConsulting Engineer as the Safety Agent is no longer permitted due to conflict of interest.Environmentally sustainable design and energy efficiency are becoming a commonunderlying requirement in every project, with obligations on the Client and consultingengineer. The Client’s sustainability policy should be made known to theconsulting engineer, who in turn should be tasked with advising the Client on the projectsustainability and/or assisting to set sustainability targets.The execution of the assignment will be based on information available at itscommencement, which may have to be augmented in order to perform the servicesrequired. It is important that the extent of information available to theconsulting engineer, and information yet to be obtained by him, be clearly identified at theoutset, to avoid any misconceptions. Where the client is unable to define the scopeaccurately, for example if the assignment is an investigation or study whosenature and extent are unknown, then it is important to tell the tenderers what theclient has allowed for, by way of budget or estimate of manhours

Scope of WorkDefinition• Not the same as Scope of Services of the Consulting Engineer• Scope of Work = portion of the Works for which the Consulting Engineer isengaged or the document which specifies and describes the supplies,services engineering and construction works to be provided (by theContractor) including special requirements, constraints etc.ExampleA client wishing to construct a Casino complex consisting of three distinctcomponents being the Building, a Parking Area and an access road, mayappoint a consulting engineer to undertake Stages 3-6 of the normalengineering services for the Parking Area.In this case the scope of services can be defined as set out in Appendix Fwhile the scope of work may only involve the Parking Area. Some thoughtwill have to go into preparing the scope of work as it interfaces with otherworks such as stormwater runoff from the building and the interface with theaccess road and gate house.

Scope of WorkPoints to Note• The scope of work for each service provider should be carefullydetermined to ensure that no overlaps and duplication in terms of scope ofwork exist.• In some cases the consulting engineer will be required toappoint specialist sub-consultants in which case the consulting engineerwill ensure that no duplication in terms of scope occurs.

Scope of WorkExamples of Scope of WorkBuildingsRoadsStructuresElectricalThe work in respect of site boundaries and fencing, foundations, electrical, airconditioning, wet services, fire protection, structural, roofing, waterproofing,stormwater, etc should be clearly allocated. If the design is to be undertaken by amultidisciplinary professional team (Architect, Quantity Surveyor, Engineer, etc.) theresponsibilities of the consulting engineer in such a team must be clearly indicated.The beginning & end of the road should be indicated, whether the scope includesstructures, hydrological analysis and drainage, stormwater, roadside furniture,pavement layerworks, traffic analyses, selection of borrow pits, road marking, signageetc. It should also be indicated who will be responsible for liaison with interested andaffected parties and for ensuring public participation.The scope of work should be clearly indicated in respect of site investigations,foundations, interaction with other structures and facilities, design review, andsimilar.The scope of work should be clear in respect of bulk services provision, power lines,substations, power connections and liaison with utilities, back up power, earthing,lightning protection, security services, access control, data and telephony, lighting,electrical reticulation and switchboards, etc.

Scope of WorkExamples of Scope of Work (cont‟d)MechanicalDamsMunicipalServicesClarify, if air conditioning, wet services, pumps, lifts, escalators, fire protection etc.are to be performed by one or more specialist engineers.The Scope of Services and Scope of Work should be described, in detail to enabletendering consultants to identify the level of accreditation of design staff to beidentified. The Scope of Work should be clear in respect of geological andhydrological investigations to be undertaken prior to preliminary and detail design,plus the extent of design to be undertaken by contractors, and likewise the Scope ofWork in the electrical and mechanical disciplines.The Scope of Services and Scope of Work should be clearly described for theconsulting engineer to accurately identify the range of services to be designed by him(e.g. Roads, Stormwater Drainage, Sewerage, Water Supply, etc.) and which are to bedesigned by others, including the extent of simultaneous working and coordinationrequired. The extent of construction to be undertaken by emerging contractors orusing labour-based methods should also be clear.

Scope of WorkFramework AgreementThe Framework Agreement is designed to allow the client to invite tendersfrom consulting engineers to carry out work on an “as instructed” basis over aset term. Generally The Framework Agreement is between two parties thatestablishes their terms for services over a set period of time, within a broadscope of work, without guaranteeing any quantum of services. The rationalebehind using such agreements is that it saves the client from having toprocure from the market each time a service, covered by the FrameworkAgreement, is required.Framework Agreements are only entered into with consulting engineers whohave the resources and capability to carry out the services envisaged andmust include the means by which the consulting engineer is remunerated forthe instructed work. Hence the evaluation of tenders for FrameworkAgreements must be based on quality as well as price – and not price alone.

Tender documentation3.2 Tender Documentation for ConsultingServices

Tender documentationTender DocumentationPurpose• In line with principles and documentation of the CIDB• To achieve uniformity, in interests of a more efficient industryModel for Uniformity• CIDB‟s “Construction Procurement Toolbox”• Process of Offer and Acceptance• Tenderers provide inputs to complete their submissions (offers)• These = inputs to the contract to be concluded after acceptance of offer• Separation of component documents• Complete enquiry documentation = critical to project‟s successCIDB tables to assist compiling documentation – see Appendix G

Tender documentationDocuments relating to the Tender (CIDB)Table B-1T1 Tendering proceduresT1.1 Tender Notice andinvitation to TenderAlerts tenderers to the nature of services required by the client; shouldcontain sufficient information to enable an appropriate response.T1.2 Tender Data States applicable conditions of tender and establishes the rules applyingfrom the time tenders are invited to the time a tender is awarded.T2. Returnable documentsT2.1 List of ReturnabledocumentsT2.2 ReturnableSchedulesEnsures that everything the client requires a tenderer to submit with histender is included in his tender submission.Contains documents the tenderer is requested to complete for the purposeof evaluating tenders and other schedules which upon acceptance becomepart of the subsequent contract.

Tender documentationDocuments relating to the Form of AgreementTable B-2C1. Agreements and Contract DataC1.1 Form of Offer andAcceptanceFormalises the legal process of offer and acceptanceC1.2 Contract Data States applicable conditions of contract and associated contract specificdata, which collectively describe the risks, liabilities and obligations of thecontracting parties and the procedures for administration of the contract.For consulting engineering services this would be an Agreement, as opposedto General Conditions of Contract used for construction services.C2. Pricing DataC2.1 Pricing Instructions Provides criteria and assumptions, which it will be assumed (in the contract)the tenderer has taken into account in developing his Financial Offers.C2.2 Activity Scheduleor Schedule of TasksC3. Scope of Services and Scope of WorkC4. Site InformationRecords the Financial Offers to provide the services, which are describedelsewhere - in the Scope section.This is generally not required in procurement of consulting engineering services, being applicable toconstruction services contracts only. However to ensure uniformity in tendering, available informationon prior studies, existing services etc should be included.

Tender documentationStandard Coloured Pages/Dividers• T1.1 Tender Notice and Invitation to Tender White• T1.2 Tender Data Pink• T2.1 List of Returnable Documents Yellow• T2.2 Returnable Schedules Yellow• C1.1 Form of Offer and Acceptance Yellow• C1.2 Contract Data Yellow• C1.3 Form of Guarantee/Securities White• C1.4 Adjudicator‟s contract White• C2.1 Pricing Data/Instructions Yellow• C2.2 Activity/Work Schedule Yellow• C3 Scope of Services and Scope of Work Blue• C4 Site inspection Green

Tender documentationProcurement References – see Appendix I• Revised Standard for Uniformity in Construction Procurement (SFU)• CIDB Construction Procurement Best Practice Guideline C3 –Adjudication• CIDB Professional Services Contract• FIDIC Client/ Consultant Model Services Agreement• Standard Professional Services Contract by NEC• Other:ooPROCSA Form of AgreementCESA Short Form of Agreement

Q&A LUNCH Session 4

SESSION 4 - Value-added Services

Value-added ServicesValue, Financial Offer, Quality• Acceptance of lowest price denies opportunity to assess value• Consulting Engineers are accustomed to tendering competitively• Professional services, unlike products, are not well defined• Requires careful descriptions in Scope of Services, Scope of Work• Still a tendency to rely on price, ignore quality (Treasury: Functionality)• Remuneration should reward desirable performanceWhat performance is achieved from the lowest price? (examples…..)• Typically, the cost of consultancy services for larger projects is less than 10%of capital cost of a construction project• And about 1% to 2% of the project‟s lifetime cost

Value-added Services The procurement of consulting engineering services has the greatest impacton the life-cycle cost of the project, yet it is the least costly componentRepresentation of typical Life Cycle Cost and Impact on Project SuccessLife-Cycle Cost5% 55% 40%Impact on Project Success60% 20% 20%Engineering Construction Operations & Maintenance

Value-added ServicesProject Life-Cycle Cost2%18%Consulting EngineerContractorOperation & Maintanance80%

QualityValue-added ServicesAppropriate level of Quality10B8C6A4204 5 6 7 8 9 10Price

Value-added ServicesThe Concept of “Value”“Value” should• secure for the client value-for-money services• achieve minimum life-cycle costs (long term value for money)• ensure the project will fulfill its intended purposeThe tender process must allow the tenderer to show that• value-for-money services are offered• minimum life-cycle costs are critical to the project‟s success• the Financial Offer will demonstrate the value of inputs offered• take Client‟s quality evaluation criteria into accountQuantifying “Value”• Needs to be a factor in considering tenders• Include in determination of tender score• Assess Preference, Quality, and Financial Offer (Price) individually• Consulting Engineer to tender accordingly

Value-added ServicesGuidelines for Pricing of Tenders – the “Golden Rules”• Project success relies on acceptance by client of the Consulting Engineer‟sfinancial offer and conditions or conditions of exclusions• Consulting Engineer needs to have his interests protected• Client needs to be comfortable with contract financial arrangements• “Golden Rules” apply to preparation of the financial offerGolden Rule No. 1 – Know the project requirements• No two projects the same – offer• Must be a clear and unambiguous Scope – clarify if necessary• Determine methodology, inc. innovation, value-adding procedures• Take Client‟s quality evaluation criteria into account

Value-added ServicesIllustration of Total CostsGolden Rule No.2 – Know your costs involvedUnbillable hoursAuditing & AccountingMarketingCompany OverheadsTransport equals Company OverheadsInterest & Finance chargesHead office charges Multiple of Staff Cost, plusMaintenance & DepreciationRates, Elec Water etc. added to Staff Costs Staff CostInsurancesRentals & Leasesi.e, Total CostsSkills leviesAllow ances Staff Cost divided by billable hoursOv ertimeSubscriptioms equals gives Rate / hourCo. Contrbns. Med-aidCo. Contrbns. Pension "Cost to Company", or, Add for ProfitUIFLeav e pay "Total Cost of Employment" gives Charge-out Rate / hourBonusesBasic Salary

Value-added ServicesGolden Rule No. 3 – Know the Client‟s situation• Able to produce and adhere to a clear and sufficient scope• Ability to fund or timeously secure funding for the project• Adequate resources to administer the contract• History of fees paid on time• Sufficient technical capability for reviews and approvals• Need for development (training, mentoring, etc)• Experience in using consulting engineering services• Able to responsibly evaluate & award consulting/construction contractsFinalising the Tender Price• Feedback from Golden Rule No 3 is to be considered where aspectswithin Client‟s ambit must be examined, for influence on level of thefinancial offer

Value-added ServicesAdjustments from Golden Rule No 3• Profit mark up• Pricing for contingencies or risk• Pricing work not called for but necessary (if not done by Client)• Pricing for unrealistically tight or slack deadlines• Pricing for work assumed but not required• Adding a margin in lieu of qualifying the tender• Provision for productivity delays to be expected in executing the work for theclientPrice Benchmarks• Important to test pricing against a norm and indicate adequacy of price• Appropriate Benchmark: ECSA Guideline Tariff of Fees – see Appendix H• Percentage of Project Cost (sliding scale) x Factor for Stage and Type• Also ECSA recommended hourly rates – arrive at “Benchmark Fee”• Adjust up or down for project concerned, with a Benchmark Multiplier, to get an“Adjusted Benchmark Fee” considering specific circumstances

Value-added ServicesBenchmark MultipliersMultiplierCircumstances0.6 – 1.0 “Favourable”1.0 “Normal” or “Reasonable”1.0 – 1.6 “Negative”Specific circumstances• Is scope complete and clear?• Is Client well versed in procuring consulting services?• Does Client have adequate resources for competent tender evaluation?• Does Consulting Engineer have a successful project record with the Client?• Can hours be saved from earlier similar work, or previous experience?• Is staff proposed well priced, ideally suited and competent for the project?• Is the Consulting Engineer better placed than most for specialist services?

Value-added ServicesSpecific circumstances (cont‟d)• Is project location advantageous for the Consulting Engineer?• Will the risks perceived be easy or difficult to handle?• Is level of complexity of the project normal or will it be very complex?• Will the risks perceived be easy or difficult to handle?• Is level of complexity of the project normal or will it be very complex?• Does the Consulting Engineer have a low order book and need the work?• Will start date and duration require price adjustment, if no escalation?

Value-added ServicesSpecific circumstancesBenchmarkMultipliers[ Favourable (0.6 – 1.0)/ Reasonable ( 1.0) / Negative (1.0 – 1.6)] F R NIs scope complete and clear? 1.0Informed client 0.9Previous appointments 1.2Savings – Previous experience 0.6Project location 1.0Staff – cost, suited & competent 0.8risks perceived be easy or difficult to handle? 1.3level of complexity of the project normal or will it be verycomplex?Does the Consulting Engineer have a low order book andneed the work?AVERAGE ( this example) 0.940.71.0

Value-added Services – Conclusion 1Adjusted Benchmark (“Yardstick”) Fee• Average of the sum of all the particular fees used• Still based of ECSA recommended fee scalesThere is no such thing as a “discounted” feeWarning:Firms that consistently quote large discounts on the ECSA feeguidelines have a high risk of inferior work and a high numberof PI claims – rendering them uninsurable

Value-added Services – Conclusion 2“ It is unwise to pay too much, but it is worse topay too little. When you pay too little, yousometimes lose everything because the thing youbought was incapable of doing the thing youbought it to do.”John Ruskin (1819 – 1900),Author & Scientist, Oxford University

Evaluation of TendersSession5

SESSION 5 - Evaluation of Tenders

Evaluation of TendersReferences• CIDB Best Practice Guideline No. A4 : Evaluating Quality in TenderSubmissions (guidelines)• CIDB Inform Practice Note No. 9 ; Evaluation of Quality in tenderSubmissions (overview)Evaluation of Tenders• Applies where Quality consideration is an essential part of theevaluation process – which should apply to the vast majority of tendersfor Consulting Engineering services• Procurement Method 4 generally appropriate for ConsultingEngineering services (Quality and Cost-Based Selection)

Evaluation of TendersMethod 4 – Financial Offer plus Quality plus Preference• Score Quality, rejecting all offers that fail to score minimum points forQuality, stated in Tender Data• Score tender evaluation points for Financial Offer• Confirm tenders eligible for preferences claimed and if so score tenderevaluation points for preferencing• Calculate total tender points• Rank tenders from highest number of tender evaluation points tolowest• Recommend Tender with highest tender evaluation points for award,unless compelling reasons not to do so

Evaluation of TendersEvaluation criteria• Essential that tender documents state evaluation criteria and scoringsystems to be used in tender adjudication• If a criterion is stated, clarity required how the criterion will be adjudicatedand weighted, relative to other criteria• CIDB Standard for Uniformity Sect. 4.4.3 calls for specific Tender Data:‣ Method to be used in evaluation‣ Weighting between Financial Offer (W1), Quality (W2), andPreference (W3)‣ Quantified descriptions of preferences incl. how granted and scored‣ Refer also to Construction Scorecard (Construction Sector Charter,Govt Gazette: Board Notice 862 of 2009)‣ Details of Quality Criteria and Sub-criteria and manner of scoring

Evaluation of TendersRecommended Approach(to be Fair, Equitable, Transparent, Cost-effective)• Quality of outputs/deliverables to satisfy client requirements• Service with reasonable skill and care of professionals• Advice independent of any affiliation causing conflict of interest• Repeat/straight forward projects : Cost-effective design important• Feasibilities, Complex projects : experience, expertise important• Weighting, Quality / Financial Offer is less for repeat type projects• All tenders to have a minimum number of Quality points, to proceed• Ratio Quality / Financial Offer plus Preferences depends on project value• Preferential Procurement Framework Act :‣ Assignments under R500k value, Ratio 80:20 mandatory‣ For higher value assignments, Ratio 90:10 mandatory‣ (Threshold as in Pref. Procurement Policy Framework Act Regs)Refer Tables based on CIDB references with certain CESA adjustments, pertaining toScoring against Ratings

Evaluation of TendersRecommended Detail Procedure1. Score Quality with 3 Quality reviewers, adjust if major scoringdifferences2. Reject tenders not attaining minimum Quality score, inform them inwriting3. Inform tenderers of time & date for opening Financial Offers andannounce these at the meeting4. Calculate Final Evaluation Scores according to CIDB Standards forUniformity5. Apply Definitions and formulae (see next slide)6. Mutually exclusive criteria recommended, to limit duplication7. Black persons are addressed in allocating Preferences8. Reviewers need to be experienced. If not available in the Client, thenspecialists or Consulting Engineers (unconnected with the tender)should be retained by the Client to assist with evaluations9. See recommended Tables and Examples

Evaluation of TendersDefinitions & formulae for Public Sector (Organs of State)Scoring financial offersN FO= W 1X A where,N FO= the percentage score achieved for financial offer,W 1= The percentage score given to financial offer and equals : (refer to Table 7-2or 7-3 for level of project percentage score according to the nature ofprojects)A = P M/PP m= the comparative offer of the most favourable tender offerP = the comparative offer of the tender offer under consideration.Scoring Quality (functionality)W Q = W 2 X S O /100 where,W Q = the percentage score achieved for quality,W 2 = the percentage score for quality, equals (100 – W 1 )S O = the score for quality allocated to the submission under consideration.

Evaluation of TendersDefinitions & formulae for Public Sector (Organs of State)Scoring preferencesN P = NOP X EP/100 where,N P = number of preference points achieved,NOP = maximum tender evaluation points provided forin the Regulations pertaining to the Preferential Procurement PolicyFramework Act (Act 5 of 2000) (100 - W 3 evaluation points),EP = the percentage of equity ownership by HDIs within the businessenterprise.

Evaluation of TendersDefinitions & formulae for Public Sector (Organs of State)Total scoreN T = W C + N P where,N T = Total score awarded to the tenderer under consideration (max 100).W C = Score for Quality and financial offer (max 90/80).N P = Score for Preferencing (max 10/20).W C = W 3 X [1 + (S - Sm)]S mW 3 = the number of tender evaluation points available for quality andfinancial offer and equals 90/80,S = the sum of percentage scores for quality and financial offer of thesubmission under consideration.S m = the sum of percentage scores for quality and financial offer of thesubmission scoring the highest number of points.

Evaluation of TendersDefinitions and formulae for Private SectorNev = Total evaluated scoreNm = Score for PriceNq = Score for QualityNp = Score for PreferencingW1 = Weight assigned to priceW2 = Weight assigned to qualityNm = W1 x Pm/PNq = W2 x S/MsNev = Nm + Nq +Npwhere Pm is lowest qualified tender pricereceived and P is tender price underconsideration (2 decimal places)where Ms is maximum possible quality scoreand where S is quality score for tender underconsiderationTenders ranked from highest to lowest Nevwith tender awarded to tenderer with highest Nev

Tables for Evaluation of TendersRecommended Tables for Evaluation of TendersTable 7-1 Nature of Projects (5 types are defined)1. Feasibility Studies and Investigations (require specialised skills; deliverable areport)2. Innovative Projects (require innovation, creativity, expertise and skills;specialist advice needed is often identified in the project)3. Complex Projects (require high level of technical skills and resources; mayrequire skills other than normal engineering)4. Straightforward Projects (comprise straight forward tasks with standardtechnologies; may need strong capacity and resources if project is large)5. Repeat Projects (Straightforward tasks with routine/periodic activities, egmaintenance to maintain Client‟s assetsThe Descriptions of each type show that the tenderer‟s experience andcapability are key, particularly in types 1 to 4

Tables for Evaluation of TendersTable 7-2 Quality Criteria and Points Scale for small projects1. Quality plus Financial Offer/Preference ratio 80:20 (i.e.. 20 points forBBBEE)2. Maximum points shown for 5 Project Types from Table 7-1 for BBBEE,Quality and Financial Offer, Financial Offer and Quality3. Higher points used for Quality in more complex projects and lower pointsfor Financial Offer4. 9 Quality Criteria listed, from Adequacy of work plan to Demonstrablemanagerial ability5. Quality maximum points from (2) allocated to 9 Quality criteria; allocationto 5 of the 9 Quality Criteria should suffice

Tables for Evaluation of TendersTable 7-3 Quality Criteria and Points Scale for large projects1. Quality plus Financial Offer/Preference ratio 90:10 (i.e.. 10 points forBBBEE)2. Maximum points shown for 5 Project Types from Table 7-1 for BBBEE,Quality and Financial Offer, Financial Offer and Quality3. Higher points used for Quality in more complex projects and lower pointsfor Financial Offer4. 9 Quality Criteria listed, from Adequacy of work plan to Demonstrablemanagerial ability5. Quality maximum points from (2) allocated to 9 Quality criteria; allocationto 5 of the 9 Quality Criteria should suffice6. Operation similar to Table 7-2

Tables for Evaluation of TendersTable 7-5 -“Qualification and Competence of Key Staff”1. To be completed by Client when issuing tenders2. Shows 6 x typical staff posts – Project Leader, Design Engineer,Materials Engineer, Contracts Engineer, Resident Engineer andAssistant Resident Engineer3. Shows 5 x Project types (Table 7-1) for each post4. Lists 6 x attributes for each post (qualification, experience thereafter ,registration, experience thereafter, involvement on comparableprojects (past 10 years), project values (past 6 years)5. Client able to list preferred and minimum attributes, Tenderer fills inthe Offer column6. Although Titles of Job posts state “Engineer”, Client may choose touse Registered Engineering Technologist or Registered EngineeringTechnician, depending on nature of project

Tables for Evaluation of TendersTable 7-6 Assessment example1. Shows a worked example for a complex project in the 90:10 pointssystem range with 5 of 9 x Quality Criteria addressed2. Weight assigned to each Quality Criterion addressed. Total =maximum points for Quality3. Rating indicators from Table 7-4 applied to each Quality Criterion by 3reviewers to give Reviewers‟ scores and average scores4. Weights applied to average scores to give points for Quality, withTotal = Points for Quality for tender under consideration5. Table shows 2 x sets of points for Quality results :‣ 1 st set : 2 outliers,‣ 2 nd set : no outliers,after a repeat review by the reviewers

Tables for Evaluation of TendersCESA recommended changes to CIDB Tables(in using Tables 7-1 to 7-6)• Table 7-4 Ratings, very good/good/satisfactory/poor; CIDB uses100/90/70/40. CESA recommend 100/70/50/0 because:‣Descriptors for Poor (0) confirm unsatisfactory, i.e. unacceptable‣Good/Satisfactory mean nearly the same; decrease Good to 70 tocompare with Very Good (100) ; decrease Satisfactory 70 to 50.• Actual application of weightings, Quality / Financial Offer depends onrelative value of the two criteria, e.g. Quality scoring 80 to 85 andFinancial scoring 50 to 100%, Financial scoring can outweigh Qualityscoring

Q&AComfort BreakSession 6PERFORMANCE

Lets talk about Performance

SESSION 66.1 Performance Monitoring – ConsultingServices

Performance MonitoringThis Section:1. Introduction2. Performance Quality Assurance3. Quality outcomes – BIMS4. Evaluation of CE‟s Performance process5. Principles of Performance Monitoring6. Consultant performance evaluation scorecard7. Points to Note

Performance MonitoringIntroduction (cont‟d) Performance Evaluation of CE‟s is crucial in upholding & advancingthe standards of service from Consultants Benefits of performance evaluation. The client will know the level of service being delivered ordelivered The client will get an indication as to whether his choice forconsultant was correct Ensures integrity of the QCBS process Assist in the pre-selection and bid evaluation raise the standard of consulting engineering industry

Performance MonitoringIntroduction(cont‟d) Other uses (by Client, CIDB, ECSA, NT, CESA, etc) Disciplinary action – warning Suspension of firm(s) registration Cancellation of registration Black listing the firm Black listing the professional

Performance MonitoringPerformance Quality Assurance CE have a Quality Management System ISO 9001 : 2008 QMS or ofsimilar levels ( a condition of CESA membership)That incorporates: Customer-focused leadership and organization Employee involvement A process and factual approach to decision making Continuous improvement Mutually beneficial supplier (sub-consultant) relationships ISO requires firms to conduct Client Satisfaction surveys, analyse toshow trends and confirm improvement.

Performance MonitoringPerformance Quality AssuranceOutcomes: Use Quality Principles in SelectionQualitySelectionFewerVariationOrdersQualityPlanningQualityProjectsLowerConstructionCostsSave TaxPayersMoneyQualitydesignsQualitydesignsLowerMaintenanceCostLower LifeCycle Costs‣ Quality in selection is in the owner's and public‟s best interest

Performance MonitoringQuality Outcomes AssuranceIntegrity Corruption undermines the achievement of a quality outcome, andthe practice of business integrity is crucial to fighting corruption. Business Integrity Management System(BIMS) is an extension ofquality management systems. CE have adopted the principles of a BIMS, Part of CESA membersCode of conduct

Performance MonitoringEvaluation of CE‟s Performance process NT assigns PM to CFO – suggest done with Project Manager or TownEngineer The process must commence from the time of appointment and mustcontinue until final completion of the project. Points to note: during the initial briefing of the consultant‣ The client must set a standard for performance and discuss theevaluation process, as well as describing the method of reportingrequired. Client should provide feedback, so that the consultant could improveif necessary

Performance MonitoringPrinciples of Performance Monitoring Criteria must relevant Criteria clearly defined to allow consistent application Confidential, conducted in rigorous and objective manner Conducted according to the Pillars of procurement and CIDB‟s Codeof Conduct• Fair, Transparent, Competitive, Cost Effective and equitable• Must not maliciously injure/ attempt to injure the reputation of 3 rdparty

PERFORMANCE MONITORINGGuide for Scoring– Engineering Consultant's Performance

PERFORMANCE MONITORINGCustomer Satisfaction Scorecard

Performance MonitoringProposed Performance Evaluation Scorecard

PERFORMANCE MONITORINGPoints to Note Attributes – choosing engineering consultants1. Technical competence2. Managerial ability3. Experience on similar projects4. Dedicated personnel available for the project‟s duration5. PROVEN PERFORMANCE6. Local and/or local knowledge7. Professional independence & integrity Conclusion - Turn to page 48

Q&AClosingremarksThankyou

This technical briefing has been presented in theinterests of a more efficient constructionindustry, enhanced through the use of moreeffective and uniform procurementCESA would like to thank –Consulting Engineers and their Clients for attending,and we wish you a safe onward journey