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Robert Fergerstrom
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Rowan Kyle
Supporting Procurement Specialist
Reviewed By
Tony Porter
Highway Specialist
Telephone:
Facsimile:
Date:
Reference:
Status:
December 08
8-00719.0A / A61NC
Final V.3
Contents
1
Introduction.......................................................................................................................... 7
2.1 Summary Discussion on Contractor Capacity ............................................................... 7
Recommended Procedure for Joint Inspections Prior to Network Hand Back. ............ 29
5.1 Proposed Procedure ................................................................................................... 29
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ii
Executive Summary
1.1
Introduction
1.2
1.3
(i)
The World Bank Sample Bidding Documents will provide only a basis for the final contract
structure however it is anticipated that a number of amendments will be necessary to
reflect both the specific and unique needs of this pilot and to incorporate the
recommendations of this report.
(ii)
The reviews of Contractor Capacity undertaken under Task A4 indicate that the
Contracting Industry within the State and nationally has the capabilities to undertake the
scope of work required.
Assets to be Included
(iii)
It is recommended that the majority of the assets within the road RoW and administered
by the PRBDB, the PWD and the Forest Department are included in the pilot OPRC, with
the only exclusions being the structural repairs to bridges, large culverts or retaining
structures and the maintenance of traffic lights and street lights.
(iv)
The policy for the maintenance of network sections that are currently under construction
or maintenance through the PMGSY or NABARD schemes requires further consideration
from both an administrational and legal perspective. However handing over the
maintenance of these sections of the network to the OPRC contractor at the
commencement of the OPRC pilot or as soon as current construction work has been
completed is considered to be preferred option.
(v)
Where existing asset inventories are incomplete, the OPRC Contractor will be required to
record and update the existing inventory or populate a new inventory (where none exists)
and submit this information to the Client within a reasonable time frame from the
commencement of the contract. On-going auditing of the accuracy and completeness of
this data is strongly recommended.
(vi)
The verification of all existing inventory data and the collection of new inventory data in
the field should be linked to GPS coordinates at the time of data collection.
All of the current Output and Performance based Road Contracts (OPRC) that Opus
2
International Group are aware of have specified minimum annual quantities (m ) of
pavement rehabilitation and surfacing renewal as the basis for managing the risk of
unintended pavement asset consumption. This concept is also provided for within the
World Banks Sample Bidding Documents for OPRC.
(viii)
While further international research into alternative ways of measuring and managing this
risk will be on-going, there is presently still insufficient confidence over the use of
condition measures or pavement strength assessment tools to allow us to recommend
them as the only mechanism for ensuring unintended consumption has not occurred.
i. It is therefore recommended that both field observations and HDM modelling outputs
2
be used to determine a minimum annual quantity (m ) of surfacing renewal and
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1.4
(ix)
(x)
(xi)
The application of Durability Performance Measures and Road User Service and Comfort
Measures can be expected to control pavement repair and construction workmanship
issues.
The requirement for the Contractor to develop and operate a defects recording system is
to be monitored by the Client through regular joint inspections.
(xiii)
This list is to form the basis of formal inspections of the network and the identification of
any uncompleted work at 1 year and at 6 months from the due date for the end of the
contract. In addition a further joint inspection is recommended at 2 months from the expiry
of the maintenance defects period.
(xiv)
We will ensure the contract documents also require the Client and the outgoing and
incoming Contractors to complete a joint inspection within two weeks of taking possession
of the network. This requirement will then avoid the potential for a dispute between the
new Contractor and Client over the quality of repairs and/or condition of the network
presented by the out-going Contractor.
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The preferred alternative would be for the Contractor to obtain a Performance Guarantee
(Performance Bond) to a value that would provide the same level of security to the Client
as retentions would but with a reduced potential for financial hardship and
administrational complexity than that associated with retentions. This performance
guarantee would have three components:
i. Construction Guarantee:
This bond needs to cover the estimated value of all of the planned upgradation works
during the term of the OPRC pilot. It is recommended that 50% of the bond is
released following completion of all of the planned upgradation works and the
balance upon acceptance of all post construction inspection and subsequent
pavement deflection testing.
ii. Operation and Maintenance Guarantee:
This bond needs to cover the risk of inadequate maintenance or re-work arising from
poor pavement rehabilitation construction or maintenance activities. The value of this
guarantee would be expected to be to the same value as the estimated aggregated
sum of the retentions plus another 10% to allow for the risk associated with a fixed
value based upon the contract estimate rather than on a percentage of actual physical
works claims which may include the value of any additional services. However it is
recommended that this value be reviewed on a 2 yearly basis and if necessary the
value amended in line with the actual contract value and to ensure its value is
sufficient to cover the full cost of repairing any defective workmanship and backlog of
uncompleted maintenance. This bond would be released at the end of the contract
term.
iii. Pre-transfer Guarantee:
This bond would need to be provided by the OPRC Contractor at 3 years from the end
of the contract duration and must remain valid for 2 years after the end of the
contract. This bond is to ensure that the Contractor complies with his obligation to
carry out the required level of maintenance right through to the end of the full contract
term. It should be for an amount equivalent to the average annual cost of the
maintenance activities (including pavement rehabilitation) completed over the
previous 7 years. This bond would be called in by the Client in the event that the
average number of Durability and Road User and Comfort Performance Measure
Non-conformances over the last 3 years of the contract exceeded the average annual
number of non-conformances for the previous 7 years by more than 5%.
(xvi)
Interviews held with Contractors during the preparation of the report on Contractor
Capacity under Task A4 indicated that the Contracting Industry was familiar with the use
of Performance Bonds and they did not foresee any problems with the application of this
to the OPRC pilot format.
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Compliance Framework
(xvii) It is recommended that a Contract Management Board (CMB) comprising an Executive
committee of senior management personnel from both the Contractors and Client
organisation is established. This Board would meet at regular (at least 6 monthly)
intervals to review performance, and who would have the authority to agree necessary
actions to address any issues threatening the successful outcome of the OPRC pilot.
(xviii) To facilitate and maximise the involvement of the communities being served by the OPRC
network, it is recommended that CMB be responsible for developing a communication
strategy for consulting with the heads of the village or townships (Sapanch) within the
OPRC network on a regular basis. This would then provide a forum for specific concerns
relating to the way the network was being operated and maintained to be raised and if
necessary addressed by the Contractor.
(xix)
It is proposed that the contract performance system is divided into three key groups being
Management Performance Measures, Road User Service and Comfort Performance
Measurers and Durability Performance Measures.
(xx)
(xxi)
The following table outlines how the proposed payment adjustment regime will
accumulate points based upon the NCs recorded and how these will then result in the
applied payment reductions.
Item
Repeat NonConformance
Report
Failure to
identify and
record defects
Road User
Service and
Comfort
Performance
Measures
breached
Durability
Performance
Measures
breached
Standard
NC Multiplication Factor
Weighting
Sub-weighting
Consecutive
nonConformance Reports relating
to the same occurrence in a
rolling 3 month period
Inspection and recording
regimes as set out in the
maintenance specifications
and any amendments agree to
by the CMB
Any one of the RPMs set out
in the maintenance
specifications and any
amendments agree to by the
CMB
Any one of the performance
measures set out in the
maintenance specifications
and any amendments agree to
by the CMB
1, 2
1,2,3
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No. of Months
Notes
Sub -weighting
increased in the
last year of the
Contract
Sub-weighting
increased
progressively
during the last
year of the
Contract
Sub-weighting
relates to the
number of full
calendar months
DPM is breached.
Standard
NC Multiplication Factor
Management
Performance
Measures
breached
Aggregate NonConformance
Report Score for
the Month
No. Weeks
Notes
Sub-weighting
relates to the
number of Weeks
(7 days) the MPM
is breached. Part
weeks would be
countered as a
full week.
(xxii)
Given the uncertainty surrounding the sensitivity of this proposed scoring mechanism on
the local network it will be necessary to carry out a series of tests on representative
sections to see how difficult it would be to trigger a payment reduction. The final score
may then need to be adjusted to provide a fair balance between acceptable levels of nonconformance and the Contractors risk.
(xxiii) It is recommended that the PRBDB appoints an independent auditor who would
undertake regular reviews of the Contractors performance and would nominate the
randomly selected sections of the network to be audited by the Contractor. It is
understood that this role will be a requirement of the Consultant yet to be selected
through Part E of the T.O.R.
(xxiv) The Contractor will be required to establish and operate a monthly operational compliance
system using their own auditor, but who is independent from the operational team to
establish conformance with the specified performance measurers and contract outputs.
(xxv) The Client is to be given the ability through the contract to also instigate a Project Audit
Team. The Project Audit Team would typically consist of representatives of the Client
(and Consultant if appointed) and the Contractor. The Project Audit Team would
undertake a joint audit of the network from time to time to gauge how well the OPRC pilot
is meeting the principal objectives and whether there are aspects of the contract that
should be presented to the CMB for consideration.
(xxvi) It is recommended that regular (monthly) assessment of the Contractors performance be
undertaken and scored against predefined and agreed criteria by the Client. The criteria
would be jointly developed between the Contractor and the Client as soon as possible
after the award of the Contract, along with an agreed weighted scoring system. The
achievement of a minimum monthly performance score would then form one of the
MPMs in the Conformance Schedule. This would provide both a formal means of
communication between the Contractor and the Client and an opportunity for the Client to
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maps of the proposed pilot networks, GPS locations, relevant photographs and the
network video taken during the roughness survey
an outline of the tender evaluation criteria and procedures that are proposed.
(xxx) To quantify the value of the quality attributes submitted by the Tenderers to the Client it is
recommended that score applied to each tender by the Tender Evaluation Team (TET) be
separated into Price and a Non-Price (Quality) components. These two components will
be assigned on an agreed weighting, e.g. Price 60%, Non-Price 40% that will provide an
acceptable balance of risk between quality expectations and the price paid.
(xxxi) Clearly identified non-price quality attributes, that the Tenderers must provide (separately
from their Price) for evaluation by the TET, will form a component to the evaluation and
selection process. These attributes would be assigned weightings to reflect the value of
their contribution to the overall non price score.
(xxxii) The scores applied to the non-price attributes from all of the Tenderers submissions
would be used to assign a monetary value or premium that reflects the additional value of
the respective Tenderers quality to the PRBDB and the GoP.
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Introduction
Task A6: Development of contract format in the Terms of Reference of the Punjab State Road
Sector Project Loan # 4843 IN Consultancy Services and Project Preparatory Studies for Package
II (Phase II) requires the Consultant to study and recommend an appropriate format for the Pilot
performance based contracts. The following are considered to be essential elements in the
consideration of the final contract format:
Recognises the current state of the maintenance contracting industry in the Punjab and does
not overstretch their capabilities
Provides an appropriate mix of input, output and outcome components, reflective of the road
sections selected and the assets to be included
Maximises the potential for success, without making the project so easy that no real learning
takes place
Provides as much flexibility as possible to allow the contract to evolve over time in response to
changes and the lessons learnt.
The World Banks sample bidding document Procurement of Works and Services under Output
and Performance Based Road Contracts is expected to provide a basis for structuring the final
contract documents. However we anticipate that there will also be a significant quantity of
amendments and additions to this document that will be necessary to reflect the specific and unique
needs of this pilot and to incorporate the recommended contract format options presented in this
report.
Amendments to the initial Technical proposal submitted by Opus have been indicated under those
sections where these were proposed and agreed to by both parties during the negotiation process.
The overall format of this report has been aligned with the section headings and outputs defined in
the ToR. It is therefore advisable that readers not familiar with this reference the Task description
before reviewing the report further.
2.1
There was already a reasonably well developed awareness over the aspects of performance
based contracts
The industry already had the resources and experience to construct much of the required
pavement and surfacing works to a reasonably good standard (within the context of the current
delivery model)
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The industry understood the risk transfer that was embodied in the OPRC approach and
appeared willing to carry a fair proportion of this
There was strong desire by the Industry to be empowered through the OPRC concept and they
were willing to look for innovations where these could result in better outcomes.
These aspects strongly suggest that the implementation of the OPRC pilot should not have to face
the associated difficulties of having to establish both resource capacity or construction skills while
also having to adjust to the performance based contracting environment.
Consequently there is sufficient confidence to move beyond the basic concepts embodied in the
sample bidding documents in an effort to incorporate some of the more recent performance based
contract developments. The principal aims of introducing these concepts will be to:
Ensure the contracts are well tailored to the unique characteristics of the Indian environment
along with providing a fair basis and price for achieving the desired outcomes
Ensure that there is a fair level of risk transfer, and especially over the aspect of residual road
condition
Manage service level creep thereby avoiding the risk that, over time, the costs become
unaffordable or the service levels begin to be out of context with those in place on other
networks within the State
Maximise the value for money being achieved through the performance based philosophy by
ensuring high compliance achievement and good quality control
Ensure there is sufficient flexibility is built into the contracts to cater for inevitable changes and
refinements that will occur over their duration.
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Task A6: Extent of the assets, in addition to the pavement, that are to be maintained
24.
Issue to be addressed in the study include the extent of the assets, in addition to the
pavement, that is to be maintained under the contract, for example, in addition to the pavements
should the contract include the management and maintenance of all:
Signage
Delineation
Lighting
Vegetation
Slopes
Retaining Structures
Drainage Works
Bridge Structure
Opus has pioneered the development of OPRC-based contracts, including the provision of
specialist input to World Banks Sample Bidding Documents In addition, Opus has had roles in the
supervision and execution of many forms of term maintenance contract, which has given our key
personnel significant insight into approaches that meet agency expectations but are also highly
deliverable in a practical sense. This makes Opus uniquely qualified to produce documents that fully
reflect the requirements in the Punjab situation. Consideration would also be given to the
requirement for joint PRBDB/Contractor management structures (e.g. performance boards) in the
OPRC document(s) that would provide a governance role and potentially enable a speedy resolution
to any disputes, along with the role of external advisors that may add value over the duration of the
contract.
As required by the TOR, aspects to be covered include:
Signage, delineation, lighting, vegetation, rest areas, slopes, retaining structures, drainage
works, bridges, road right of way
Risk profile issues
Boundary between policing/enforcement and operational requirements
Proposed performance criteria (refer also Task A1)
Long-term asset performance measures
Road User Service and Comfort performance measures
Management performance measures
In addressing these issues, the Opus Team will pay special attention to the following aspects:
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The scope of infrastructure assets that will fall under the OPRC umbrella; selecting the
assets to be managed under a performance-based regime will be a function of:
(i)
the potential benefits of the OPRC approach to the GoP and PRBDB (i.e. as compared with
the resources required to administer such a contract)
(ii)
(iii)
what is practically viable in terms of both the OPRC and the remaining network
(iv)
Balancing the level of contractual risk embodied in the contract form at a level that meets the
performance expectations of the PRBDB, whilst acknowledging the learning curve of the
contractor
The extent of knowledge held about the nature / quantity of the asset
The extent of knowledge held over the condition of the asset and its future maintenance needs
The level of risk associated with the transfer of the maintenance responsibility to the Contractor
(this aspect will considered in more detail within Task A8 report on Risk Allocation)
The ability of the Contracting Industry to manage this risk and to complete the work required.
Within the limitations imposed by the above bullet points, it is none the less desirable to have as
many of the networks assets included as possible. This desire was also stated during the OPRC
1
Consultation Workshop #1 and included in the summary from Groups B and B1. It is considered
that this will:
Maximise the efficiency of the overall management of the network as there are fewer separate
contracts which then have to be administered outside the OPRC, and reduces the number of
obstacles to communication between various parties responsible for their maintenance.
The above workshop also identified reluctance by the Contracting Industry to carry the responsibility
for managing the Right of Way, as they considered the difficulties in dealing with adjacent
landowners would be too great. None the less it is recommended that the OPRC Contractor does
carry some limited responsibility for ensuring the RoW remains free of obstacles or impediments to
the unrestricted movement of vehicles and pedestrians. To this extent the Contractor should feel
1
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10
The preliminary findings of the legal review have also been captured under the respective sections
of this report.
3.1
Asset Type
Data
Confidence
Grading
B/C*
D
C
C
C
D**
B*
C
B*
B*
C
C
Medium
Low
Low
High
Medium
Low
Medium
Medium
Medium
Medium
Medium
High
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Only routine maintenance repairs
Yes
Limited level of management
Grade
Label
Description
Accuracy
A
B
C
D
Good
Adequate
Poor
Non Existent
5%
15%
30%
50%
Refer attached Draft Preliminary Report on Legal Issues Raised on the Procurement of Works under OPRC.
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All available and current pavement deflection information should be provided to the
Contractor to assist him with the identification where weaker pavement sections exist that
may require rehabilitation during the term of the contract.
The maintenance of the sections within the pilot area that have been recently reconstructed
under either the PMGSY or NABARD schemes, and are still under maintenance by the
respective Contractor must be clarified. The lack of routine maintenance within these
sections as a result of insufficient funding or enforcement has the potential to create a
problem of in-consistent Levels of Service within the OPRC network. This outcome then runs
the risk of compromising the pilots objective of improving the condition of the network from
the road users perspective.
Options for mitigating this risk are to:
(i)
Exclude these sections from the OPRC pilot, and then through a series of Separable
Portions add them progressively as their maintenance periods expire. During this
phase it would be necessary to enforce the existing maintenance requirements for
these previously constructed sections through to the expiry of the maintenance period
before formally handing these over to the OPRC Contractor. This option runs the risk
of the respective PMGSY or NAMBARD Contractor still avoiding the required
maintenance inputs; especially where they consider a lack of payment for this is
probable. Where this may occur, the OPRC Contractor will also have to manage the
risk of pricing in the cost of a potential backlog of uncompleted maintenance work,
unless this catch-up maintenance work can be agreed as a variation to the LS. If this
option is pursued then enabling the OPRC Contractor to claim a variation for any
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Seek through mutual agreement with the respective PMGSY (if applicable link roads
are included) or NABARD Contractors to an early termination of any outstanding
maintenance periods, thereby enabling the future maintenance of these sections to be
the responsibility of the OPRC Contractor from the start of the pilot. This would enable
the OPRC Contactor to more easily price this work into the Lump Sum and would
avoid the risk of potentially expensive variations having to be negotiated post contract
award. This option is preferred to i) above as it also presents less risk of variable
Levels of Service across the pilot network.
Option (ii) is therefore considered preferable on the basis that any administrational,
contractual and legal issues can be easily resolved.
3.1.2 Signage
The quantity of existing signage within the proposed networks is not extensive, but it is
expected that there will be opportunities under this pilot for the OPRC Contractor to install
additional signage to address identified safety concerns or improve the level of information
provided to road users.
The risk in transferring the maintenance of the signage to the Contractor will be the
uncertainty surrounding level of damage arising from accidents and deliberate vandalism or
theft requiring sign cleaning and replacement. In addition this work is unlikely to have been
undertaken by those Contractors specialising in pavement and surfacing work, and therefore
they are likely to subcontract this out to others who specialise in both sign fabrication and
installation.
However as the existing numbers are relatively low, then the overall extent and cost for this
work is not expected to be large unless there is a significant differential between the existing
and specified standard for signage on the network. To manage this risk it is proposed to
have the Tenderers specify unit rates for the supply and installation of a range of standard
signs in a separate schedule from the OPRC Lump Sum. The OPRC Contractor would then
be required to prepare a schedule of the additional signage required to bring the network up
to the minimum standard and following the Clients approval, he would then undertake this
work and would be paid (at his nominated unit rates) for this work as a variation.
The OPRC Contractor would only be required to include in his price the installation of
replacement or renewed signage and any additional signage specifically identified as being
necessary to achieve the recommended level of Safety Improvements.
The maintenance of all signage within the road Right of Way is therefore recommended.
This component of the contract should also include:
(i)
(ii)
(iii)
(iv)
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As part of maintaining this asset, it is recommended the OPRC Contractor should also
undertake an initial verification of the signage stock records and update the existing signs
inventory within the first 6 months of the OPRC pilot commencing. He should then remain
responsible for regular (monthly) inventory updates where new signs have been installed, or
existing signage has been upgraded or installed.
Maintenance is to include all separate supporting structures such as poles, gantries and
foundation elements.
3.1.3 Delineation and Pavement Marking
The Contractor will need to include in his price only the cost of maintaining the current
quantity of pavement markings to the specified performance standard.
However where there is a significant difference between the existing delineation, and the
standard required by the PWD/PRBDB then again the Contractor would be required to
complete an inspection of the network and provide a schedule of additional pavement
marking and delineation that would be completed as a variation following the Clients
acceptance.
In addition any further delineation recommended as being necessary to meet identified and
specified safety improvements will have to be included under the LS.
Although performance based methods based upon inspection and measured retroreflectively exist, it is recommended that the following input based approach be adopted:
The OPRC Contractor be responsible for the inspection and reporting on the condition of
all pavement markings once annually
Any specific areas of high wear or loss identified either from the Contractors audit or that
of the Independent Auditor are remarked within the prescribed response time. An NC
would only be registered where there was failure to achieve either the annual remark
programme or the response time criteria for addressing identified areas of high wear.
Performance criteria would be based simply upon being clearly visible during daylight
hours and for a prescribed minimum distance at night time under full headlights.
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14
existing and new pavement markings, including those identifying the location of
underground utility services
(ii)
(iii)
(iv)
painted timber rails or similar structures where these are used primarily for delineation
As part of maintaining this asset, it is recommended the OPRC Contractor should also
undertake an initial verification of the delineation inventory records and update the existing
inventory within the first 6 months of the OPRC pilot commencing. He should then remain
responsible for regular (monthly) inventory updates where new markings or delineation have
been installed, or existing markings have been upgraded, installed or removed.
3.1.4 Lighting / Traffic Lights
Currently the lighting within the network is administered by the PSEB. The maintenance of
street lights is considered to be a specialist activity and if included it is highly likely the work
will be sub-contracted out as a result.
Although it would be possible to have performance based specifications based on luminosity
prepared, most contracts specifications simply require the Contractor to intervene to replace
bulbs and light support columns when damaged, as it perceived the extra work involved in
further compliance measurement does return sufficient benefits.
As result of the specialist nature of this work, and limited, if any, benefit to the PWD/PRBDB
in transferring the risk of their maintenance to the OPRC Contractor it is recommended that
this asset is not included under this pilot.
However the Contractor should still have role in observing and reporting any lighting
outages, especially where these may present a potential safety hazard to road users. In
addition, where additional lighting needs to be installed for identified safety improvements,
then the OPRC Contractor will need to liaise with the contractors responsible for its
installation to ensure that there is no conflict with the operation of the RoW or other assets
under their control.
3.1.5 Vegetation Control
The maintenance of the vegetation on the verges and intersections is principally required for
safety (maintenance of sight distance) and to ensure there is no obstruction to drainage from
the sealed pavement surface or within other drainage facilities. However there may also be
an additional side benefit of providing improved accessibly to the network shoulders for
pedestrian traffic.
In addition the control of vegetation around drainage facilities is required to ensure the free
and unobstructed flow of water.
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Vegetation on all verges and shoulders including the trimming of any branches
overhanging into the carriageway envelop or obscuring site distance or sign visibility
(ii)
The trimming or removal of all shrubs or saplings from within the envelop
(iii)
The control of vegetation around all signs, guardrails, side delineation posts, culvert
inlets and outlets, the sealed pavement surface, kerb and channel, centre median and
bridge structures
(iv)
The removal of any fallen tree and tree branches from the RoW.
It is also recommended that a very low weighting applied to any observed first time nonconformances to reflect the difficulty often experienced by Contractors in achieving full
compliance across the whole of the network at all times. However any repeat NCs resulting
from the Contractors failure to respond to the initial observation should be weighted much
higher.
It is also likely that the Contractor will be required to maintain a minimum level of vegetation
cover on areas that might otherwise be prone to erosion or scour such as steep drain inverts
or batter slopes. In these situations it would expected that the Contractor may have to carry
out some re-vegetation to replace dead vegetation inadvertently killed off by sprays or new
shoulder construction.
In some situations it may not be practical for the Contractor to use herbicides for control
(e.g. the close proximity of side drains to crops) and therefore the Contractor will be required
to include in his price for a higher level of manual labour for vegetation removal to maintain
the required standards.
Where any trees are required to be removed for planned upgradation works, the OPRC
Contractor should also be responsible for the identification of the trees and seeking approval
from the Forest Department sufficiently in advance of the works to prevent any unnecessary
delay.
3.1.6 Heavy Vehicle Rest Stops
These facilities do not currently exist within the pilot network. Existing roadside dhabas (tea
houses) currently provide an alternative service, but these may currently lack the necessary
parking spaces for heavy vehicles to avoid potential obstruction to other road users.
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The construction and maintenance of any new access from the roadway, pavements
and surfacing within the parking area
(ii)
(iii)
Removal of litter and detritus from within the parking area and its immediate
surrounds
Any additional improvement works subsequently identified would be treated a variation to the
contract.
3.1.7 Slopes and Shoulders
A large percentage of the networks carriageway earth shoulders slope down to side drains
or shallower surface water channels. On bridge approaches these side slopes may be
steeper and extend down into river or irrigation canal channels.
These supporting shoulders and slopes are prone to erosion as a result of vehicle, stock and
pedestrian traffic as well as runoff from adjacent sealed surfaces. Where shoulders remain
well vegetated the risk of scour damage is reduced.
It is recommended that the OPRC Contractor be given the responsibility for the maintenance
and repair to all new and existing carriageway formation slopes and shoulders including:
(i)
The repair and re-vegetation of all scour and erosion channels, with special attention
given to those shoulders and slopes constructed as part of completed upgradation
works.
(ii)
(iii)
The repair of any shoulder edge wear or rutting resulting in a drop-off from the sealed
carriageway surface
(iv)
The removal of any build-up in material on the shoulder impeding the free flow of
drainage water away from the sealed carriageway.
Extensive damage to these slopes and shoulders arising from unforeseen events, including
the heavy rainfall events or actions of adjacent landowners, would be excluded and
managed under the Emergency Works provisions once a pre-determined limit of expenditure
within the LS per event had been exceeded by the Contractor.
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(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Extensive damage to these structures arising from unforeseen events, including the heavy
rainfall events, would be excluded and managed under the Emergency Works provisions
once a pre-determined limit of expenditure within the LS per event had been exceeded by
the Contractor.
As part of maintaining this asset, it is recommended the OPRC Contractor should also
undertake an initial verification of all of the existing retaining structures to confirm and
update the existing inventory information database within 6 months of the OPRC Contract
commencing.
3.1.9 Drainage Facilities
The network will contain an extensive quantity of drainage facilities necessary to the long
term stability of the formation and pavement. The adequate maintenance of these facilities is
seen as the key to maximising the lifecycle of both the pavement and surfacing throughout
the network.
The lack of adequate drainage within a number of the urban zones is considered to be the
primary reason for the very poor condition of the adjacent pavement sections. In rural zones,
excessive and prolonged ponding of drainage water either as result of monsoon rains or the
ponding of irrigation water is also expected to contribute to the short pavement lifecycles.
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All culvert structures including those under entranceways and side roads
(ii)
All surface water channels and side drains within the RoW
(iii)
The identification and reporting of any drainage impediments beyond the RoW (i.e.
across private property) adversely impacting upon the maintenance of adequate
drainage from the RoW.
(iv)
(v)
All drainage ports and associated discharge structures on all bridges, retaining
structures and subsurface drainage pipes.
As part of maintaining this asset, it is recommended the OPRC Contractor should also
undertake an initial verification of all of the existing drainage structures to confirm and
update the existing inventory information database within 6 months of the OPRC Contract
commencing. The entire network should also be inspected at least once during the first 12
months during the monsoon season to specifically re-confirm areas of surface flooding
arising from insufficient road culvert and/or side drain capacity.
Where this inspection identifies structural defects necessitating either significant repair or
replacement is going to be necessary during the term of the OPRC then the Contractor will
be required to prepare a justification report, a programme (timing) for this and a price.
Following acceptance of this the Contractor would then undertake this work as a variation to
the contract.
Information from the Phase I feasibility reports and from field observations suggest that
there is likely to be a significant backlog of routine drainage maintenance work the OPRC
will need to price for.
It is therefore recommended that the tender documents stress the importance of a careful
and detailed network inspection that will need to be undertaken by all Tenderers so that they
can appraise and evaluate the extent of this work against the prescribed level of service
requirements. The time to be provided to the Contractor to address this backlog is
anticipated to be quite extensive and this phase will need to be recognised in the time frame
provided before any performance measure based payment reduction mechanism is applied.
While routine maintenance needs (i.e. cleaning, vegetation removal etc) can be reasonably
assessed through visual inspection, significant restrictions in terms of drainage capacity (i.e.
side drain or culvert water way area limitations) can not be readily determined unless
observed during high or extreme rainfall conditions. Where such restrictions are known to
the PRBDB or the PWD as a result of historical flooding events, and it would be reasonable
to have any improvement works included within the OPRC LS, then these sites should be
brought to the attention of the Tenderers during the pre-tender workshops and the tender
documents.
However it is anticipated that there will be a number of instances where the extent of the
drainage limitations is not well understood or the corrective work requires planning (including
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(ii)
(iii)
(iv)
(v)
The repainting of steel handrails and other specified structural steel work
(vi)
The repair of any abutment or pier erosion and scour directly as a result from runoff
from the carriageway or adjacent land
(vii)
The re-levelling of the pavement and abutment interface to maintain a smooth ride on
and off the bridge deck.
(viii)
The removal of flood debris from the bridge piers, abutments or substructure following
a flood event.
(ix)
The observation and reporting to the Client of any significant damage to the bridge
structure as a result of vehicle impact, vehicle overloading or flood damage.
(ii)
The repair of the bridge structural elements such as deck, beams, bearings, piers or
piles.
(iii)
The repair of major scour resulting directly from river or canal flows.
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While pricing for the quantity of any existing backlog of repairs will be relatively straight
forward, Tenderers may find it more difficult to determine the extent and cost of future
maintenance repairs over the duration of the contract. It is recommended that the PRBDB
make available any are historical expenditure figures that may exist to assist with this.
An alternative option would be to include this item under the Emergency Works section of
the contract with the Client carrying the risk beyond a pre-defined annual expenditure value.
3.1.12 Protection and Maintenance of Road Right of Way
The comments from the Contracting Industry during the Industry Consultation Workshop # 1
suggested they were uncomfortable with the role of formally policing the RoW protection.
The Draft Preliminary Report on the Legal Review has commented at some length on this
particular aspect. In particular this report highlighted the risk of public disorder arising from
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Observation and reporting to the Client the development of unapproved access to the
road corridor to or from adjacent private land
(ii)
Observation and regular reporting to the Client and the CMB on any unauthorised
encroachment or occupation of the RoW, who can either individually or jointly raise
this issue with the local Police. Communication via the identified Sapanch (village
head) may further assist in expediting a resolution.
(iii)
License approval by the Client for any commercial activity with the potential to
adversely impact upon the operation or maintenance of the RoW should only be
granted after consultation with the OPRC Contractor.
(iv)
(v)
The reporting of incidents, the physical closure (with barriers) and signing of partial or
total road closures.
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(ii)
This approach is expected to favour the Contractor during periods of benign weather
when they would be paid a component for Emergency Works in the LS but will not be
required to carry out any work. This in turn will enable the Contractor to build-up a
contingency fund (if they choose to) over time and will enable him to better manage
his cash-flow in completing low level Emergency Works activities.
(iii)
Only once the annual value of Emergency Works has been exceeded, would the
Contractor then be paid from the Provisional Sum item using the unit rates for
applicable work included in the Contractors BoQ, and as set out in the Sample
Bidding documents.
(iv)
The impact of escalation on the value of the Emergency Works completed by the
Contractor needs to be recognised. Over time the actual quantity of work to be carried
by the Contractor before becoming the Clients risk will diminish as a result of price
escalation, and this aspect needs to be addressed in the Contract to avoid the
proportion of risk carried by the Client increasing over its duration.
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The contract documents will make it mandatory that the verification of existing
inventory data and the collection of new inventory data in the field by the Contractor
include the geo-referencing of the assets by GPS at the same time.
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4.1
Introduction
The requirements for this section of the Contract Format report are outlined within the following
paragraph:
End of contract residual road condition. To ensure that the road is returned in a fit
condition for service that will not require major capital maintenance immediately following the
end of the contract, the Consultant shall specify separate residual life for each element of the
project road. The Consultant shall review, as part of this assignment, the impact of the
contract on asset value up to the end of the contract and should advise the Client on the
inclusion of additional measures during the contract period to achieve the minimum required
asset value at the end of the contract.
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To provide the members of the Government of Punjab (GoP), Public Works Department
(PWD), and the PRBDB a level of background information on the performance based
contracts, included some of those in the overseas study tour, thereby enabling them to ask
more focussed questions relating to this particular component during the tour.
Briefly outline the other currently available means of determining residual pavement
condition (life).
This report was prepared and submitted to the PRBDB in August 2008 and included the following
summarises and recommendations:
All of the OPRCs currently in operation and known to Opus utilise the requirement for the
Contractor to complete specified annual quantities (defined as m2 of either surfacing renewal
or pavement rehabilitation) as the basis for managing the risk of pavement asset
consumption. These annual quantities will only be broadly specified (i.e. pavement
rehabilitation or surfacing renewal) and will not stipulate the nature of the design other than
the rehabilitation must achieve a minimum acceptable lifecycle.
While further research into alternative ways of measuring and managing this risk will be ongoing, there is presently still insufficient confidence over the use of condition measures or
pavement strength assessment tools as the only mechanism for ensuring unintended
consumption has not occurred.
It is recommended that the Client undertakes an annual network wide deflection survey. This
information can then be analysed and over time should permit an average target value to be
calculated that would then assist both the PRBDB and the OPRC Contractor in determining the
impact that routine maintenance work and completed pavement improvement work (upgradation
and rehabilitation) is likely to have on the network end of contract road condition. In future contracts
this information could then be relied upon to a greater extent in measuring network residual
condition.
In addition other performance based road maintenance contracts have
importance of condition measures such as roughness, rutting and
maintaining adequate pavement repair and construction workmanship.
attention being applied to the way repairs and construction joints are
significant increase in the level of peak roughness being recorded.
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From both field observations and HDM modelling outputs that the contract documents
specify a minimum annual quantity (m2) of surfacing renewal and pavement rehabilitation
that must be undertaken by the Contractor. It will remain the responsibility of the Contractor
to identify the location of this work along with the detail of the proposed design.
As the level and detail of the background information and pavement performance history will
still be limited at the commencement of the OPRC pilot, it is recommended that the contract
permit regular reviews of the annual quantities combined with remodelling of the network as
the data sets become more robust and complete. These reviews should be undertaken
initially at a 3 yearly interval until it is agreed by the CMB that there is an acceptable degree
of stability in the Forward Work Programme.
The Contractor will be required to provide verification that his proposed pavement design is
in line with the IRC design methods, has allowed for defined overload conditions and that
through a rational design process will achieve a minimum defined design life of at least 15
years before the next rehabilitation will be required. This verification would have to be signed
off by the Contractors nominated pavement design Engineer before this would be accepted
by the Client.
Define the mechanism permitting substitution between surfacing renewal and rehabilitation
quantities to occur to account for the level of variability that is likely to occur between years.
The extent of any substitution within any one year should be limited to 20% of the specified
annual quantities. The Contractor will be required to submit and if necessary negotiate with
2
the Client on a schedule of unit rates (cost per m ) for routine surfacing renewal and
pavement rehabilitation options. For example where the Contractor verifies the need to do
less pavement rehabilitation in a particular year than that specified, then the reduced area of
this would be valued at the agreed rate for the work and an equivalent value (based again on
the agreed rate) of surfacing renewal approved by the CMB to keep the LS intact. It would
necessary for the negotiation of these rates to be initially based upon known current market
rates for this work. It would be Contractors responsibility to demonstrate why these rates
can not be applied to the OPRC works.
125,000m
2
870Rs/m
2
300,000m
2
350Rs/m
2
Contractor verifies that only 115,500m of rehabilitation is required for the year.
2
2
Therefore 8,265,000Rs ((9,500m x 870Rs/m ) are available for additional surfacing renewal.
2
2
This would equate to an additional 23,614m (8,265,000/350Rs/m ) of 40mm AC overlay that
would have to be undertaken by the Contractor in place of the substituted rehabilitation.
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Set appropriate Levels of Service for other Durability Performance Measures to ensure both
the integrity of the pavement is maintained and repair or construction workmanship is given
sufficient emphasis.
4.2
The ToR required consideration be given to the residual life for each element of the project road
and not just the pavement.
To develop an increased level of understanding over the base condition and expected lifecycle of
other road assets such as drainage facilities, bridges or signage, the following approach is
recommended:
Prioritise those assets that have the greatest potential for high future renewal costs, e.g.
Large culvert structures rather than all culverts
Survey all the high risk assets and rate their current condition on a scale ranging from very
good to unacceptable
Where sufficient information exists over the age of the assets to calculate the rate of
deterioration, then use this to develop a Forward Work Programme for asset replacement.
Where this information does not exists then a risk based approach can be applied estimate
what future replacement needs and costs may be.
As the pavement and surfacing comprise the largest proportion of the networks asset value it is
appropriate that this is given the highest level of priority. However as the accuracy and
completeness of inventory data improves over time it is recommended that the steps outlined above
are undertaken and form a requirement of the Part E ToR when this is prepared.
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The development of this procedure is outlined under the following Terms of Reference Section:
26.
The Consultant shall also specify a procedure for arrangements in the contract for detailed
joint inspections about 1 year prior to hand back of the roads to be carried out by the Agency
and the Contractor. In these inspections likely works needed are noted and remedial action
is expected to be taken in accordance with an agreed program. For compliance of the
agreed program, another inspection shall be carried out no later than six months prior to the
end of the contract. A similar procedure covering all elements of the project road may be
specified prior to the end of the contract to ensure work has been carried out in accordance
with the agreed program and to assess any other works needed to achieve the required
standard at contract termination.
5.1
Proposed Procedure
Part of the requirement of the Contractors own quality assurance system will be the development
and operation of a maintenance defects list that must record all known defects identified by the
Contractor from his routine network inspections. This list must be complete and comprehensive at
the end of each inspection cycle.
It recommended that it be a requirement in the Contract that the Clients representative will join the
Contractor for these inspections at least initially once every 3 months. This inspection will focus
specifically on the identification and recording of maintenance defects. This will permit on-going
verification by the client that this procedure is both in place, and is rigorous in ensuring that all
observable defects are being picked up and recorded. If a high degree of compliance is confirmed
on two 6 monthly inspections then it may be appropriate to relax these joint inspections to once
every 12 months.
This list will then form the basis of identifying any outstanding defects during both interim joint
inspections as well as the detailed joint inspections to be programmed at 1 year prior to hand back,
at 6 months prior to hand back and within 2 months of the expiry of any defined maintenance
defects liability period.
At each of these inspections the list of defects, and any others identified during the joint inspections,
will include the nature of the remedial work and the time frame for their correction jointly agreed and
recorded. Any outstanding defects will need to be corrected to the satisfaction of the Client and the
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In subsequent contract documents it will be desirable to also require the (incoming) Contractor to
undertake a joint inspection with the Client and outgoing Contractor within two weeks of taking
possession of the network. This requirement will then avoid the potential for a dispute between the
new Contractor and Client over the quality of repairs and/or condition of the network which, if this
was to occur, may result in the incoming Contractor seeking a variation to correct claiming that the
out-going Contractor should have rectified prior to the network being handed back. The release of
the Pre-Transfer Guarantee will be made conditional on the out-going Contractor (if there is a
change) to undertake this joint inspection within the required time frame.
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The development of the contract Clauses providing for a performance guarantee is outlined in the
following Terms of Reference section:
27.
In addition to the standard performance guarantee, the Consultant shall also suggest a
financial arrangement such as retention money or depositing a suitable percentage of the
amount of agreed remedial works in escrow account which the department may utilise if the
Contractor fails to complete the work.
6.1
The following two options will be provided to the Contractors in the conditions of contract:
A stepped scale of specified retentions based upon a percentage of the physical works cost, for
example:
5% for the first 10 crore (100mRs)
2.5% for the next 30 crore (300mRs)
1.0% for any amount in excess of 40 crore (400mRs), with a maximum retention value of 5 crore
(50m Rs).
The final value will need to be sufficient to cover the risk of both defective work that remains
outstanding as well as any backlog of uncompleted routine maintenance work that would need
to be completed before any replacement Contractor could continue to maintain the network to
an adequate standard.
Over 10 years at the rates suggested above, the value of the retentions held
(including the lost opportunity cost to the Contractor from the monies retained) would
be significant and has the potential for creating financial hardship for the Contractor.
The level administration required by the Client to manage the retentions and their
subsequent release would be more complex than with bonds
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The financial model for the selected networks under a combined contract with a uniform
payment of 75cr per year would result in suggests that the maximum retention value of Rs
50m (5 crore) could be achieved after 3 years. This would equate to approximately 2% of the
average annual contract value.
Provided this value of retentions is adequate to cover the value of any substandard
construction or inadequate performance by the Contractor, then it is proposed that this sum
would be retained by the Client, along with any compound interest, until the end of the
contract duration. Upon the issue of the Taking Over certificate by the Engineer, 50% of
these retentions and interest would be released, and the balance paid upon the expiry of the
Defects Notification period.
6.1.2 Autonomous Un-conditional Performance Bank Guarantee (Bond)
The preferred alternative would be for the Contractor to obtain an un-conditional
Performance Guarantee (Performance Bond) to a value that would provide the same level of
security to the Client but with a reduced potential for financial hardship and administrational
complexity than that associated with retentions. This bond would need to be in place within a
specified period following after notification of contract award.
It is recommended that the following unconditional performance guarantees are provided by
the OPRC Contractor to cover the three distinct phases of the OPRC pilot contracts:
Construction Guarantee:
This bond needs to cover the estimated value of all of the planned upgradation works during
the term of the OPRC pilot. It is recommended that 50% of the bond is released following
completion of all of the planned upgradation works and the balance upon acceptance of all
post construction inspection and subsequent pavement deflection testing.
This bond needs to cover the risk of inadequate maintenance or re-work arising from poor
pavement rehabilitation construction or maintenance activities. The value of this guarantee
would be expected to be to the same value as the aggregated sum of the retentions (e.g. 5
crore) plus another 10% to allow for any risk associated with the bond being based upon
fixed value rather than on a percentage of actual physical works claims, which would include
any variations including emergency works. However it is recommended that this value be
reviewed on a 2 yearly basis and if necessary the value amended in line with the actual
contract value. This bond would be released at the end of the contract term.
Pre-transfer Guarantee:
This bond would need to be provided by the OPRC Contractor at 3 years from the end of the
contract duration and must remain valid for 2 years after the end of the contract. This bond is
to ensure that the Contractor complies with his obligation to carry out the required level of
maintenance right through to the end of the full contract term. It should be for an amount
4
Task B1 Draft Report on Review Suitability and Selection of the OPRC Pilot Areas
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6.2
Tender Bond:
It is recommended that a small Tender Bond be required from all Tenderers to
encourage their compliance with the tendering process. This bond would be released
at the time of financial closure of the bid.
6.3
General
Interviews held with Contractors during the preparation of the report on Contractor
5
Capacity under Task A4 indicated that the Contracting Industry was familiar with the
use of Performance Bonds and they did not foresee any problems with the
application of this to the OPRC pilot format.
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Compliance Framework
The requirement for developing a compliance framework is outlined in the following Terms of
Reference Clause:
28
The Consultant shall prepare a compliance framework for ensuring compliance of the
works, including the penalty regime that will prevail in the event of any non-compliance by
the Contractor. This will also include methods and systems involving public/road user
interactions related to road situation/condition.
There are four potentially inter-related mechanisms available for encouraging compliance with the
intent of the OPRC pilot:
Payment Penalties for Durability Performance Measure, Road User Service and Comfort
Performance Measure and Management Performance Measure Non-Compliance
Liquidated Damages for Late Completion of any Defined Separable Portions (e.g. Upgradation
Works or annual quantities of pavement rehabilitation and surfacing renewal)
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Contract Conditions: The Board would be able to make recommendations to modify the
existing conditions of contract. The Engineer to Contract would then make the final decision
and formalise the variation in writing.
Validating Major Non-conformance: The Board would confirm the validity of any major
non-conformances.
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Payment Penalties for Durability, Road User Service and Comfort and Management
Performance Measure Non-Conformance
The contract performance system will be divided into two key groups being office based
management criteria (Management Performance Measures) and field condition criteria (Road User
Service and Comfort Performance Measurer s and Durability Performance Measures). Further
detail of these service levels is outlined in the Task A1 report on Definition of Service Level
Classification.
7.2.1
7.2.2
7.2.3
7.2.4
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Scheduled
Independent and
Internal Audits
Management
Performance Measurers
Customer Relations
Quality Systems
Programme Delivery
Durability Performance
Measurers
Scheduled Annual
Surveys
Observation
Specified
Item
Monthly Reports
NC
NC
Limit of 30
Observation
NC
Specified
Item
$$$ Major
Penalty
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Item
Repeat NonConformance
Report
Failure to
identify and
record defects
Road User
Service and
Comfort
Performance
Measures
breached
Durability
Performance
Measures
breached
Management
Performance
Measures
breached
Standard
NC Multiplication Factor
Weighting
Sub-weighting
Consecutive
nonConformance Reports relating
to the same occurrence in a
rolling 3 month period
Inspection and recording
regimes as set out in the
maintenance specifications
and any amendments agree to
by the CMB
Any one of the RPMs set out
in the maintenance
specifications and any
amendments agree to by the
CMB
Any one of the performance
measures set out in the
maintenance specifications
and any amendments agree to
by the CMB
Any one of the performance
measures (including safety)
set out in the maintenance
specifications and any
amendments agree to by the
CMB
1,2
1,2,3
No. of Months
No. Days
Aggregate NonConformance
Report Score for
the Month
Notes
Sub -weighting
increased in the
last year of the
Contract
Sub-weighting
increased
progressively
during the last
year of the
Contract
Sub-weighting
relates to the
number of full
calendar months
DPM is breached.
Sub-weighting
relates to the
number of days
the MPM is
breached. Part
days would be
countered as a
full day.
It is recommended that the monthly LS maintenance fee payment to the Contractor comprise
a performance component set at a percentage of the overall maintenance fee sufficient to
encourage compliance but without being punitive. This performance fee would be paid until
there were more than 30 non-conformance points accumulated after which there would be
no payment made.
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Phase in Period
To assist the Contractor in adjusting his performance to match with the conformance
requirements, it is recommended that variable phase in period be applied for the three
forms of performance measures, during which there will be no performance payment
made to the Contractor, but the performance assessment undertaken as normal and the
score provided to the Contractor. This would allow time for the Contractor to adjust to the
conformance regime without threatening the continuance of the contract. For some of the
easier MPMs such as reporting etc, this phase in period may be as short as 3 months.
However for some of the more difficult DPMs, potentially requiring much more work to
undertaken to bring the network up to an acceptable standard, this period could be as long
as 2 years.
7.2.6
(iv)
(v)
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Independent Auditor
defines monthly random
audit sections and
undertakes independent
audits
Annual Survey of
Durabilty
Measurements
and Conformance
with Targets
Contractor's Auditor
carries out monthly audit
on MPM and RPM
conformances and
reports to the Client
7.2.7
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All non-conforming items must be clearly identified in the monthly Project Performance
Report.
g) Results from independent audits carried out by an Independent Auditor will be used to
validate the Contractors compliance results on a monthly basis.
Where possible, it is recommended that photographic examples of conforming or nonconforming work should be included in the contract specifications to assist the Contractor
and his Auditor in assessing compliance. This approach is likely to particularly useful in
defining what are conforming or non-conforming RPMs but where definitions can be
difficult or lengthy to specify in words.
7.2.8
7.3
As it will be the responsibility to OPRC Contractor to achieve the contracted outputs and to ensure
construction quality, it would not appear necessary to define separable portions for planned
upgradation, rehabilitation or surfacing renewal work. However it is recommended that consideration
is given to the following aspects during contract document preparation:
Identify (from Task A8) periods of the year when the risk of construction failures resulting
from adverse climatic conditions (e.g. Monsoon rains, low daytime temperatures etc) is
expected to be too high.
Specify the requirements for increased construction quality control verification for all
pavement improvement and surfacing renewal works completed in the last two years of the
contract. This is considered necessary to manage the risk of premature failures soon after
the end of the contract maintenance defects period.
7.4
Consideration has been given to the option of transferring some components of the work between
adjacent contracts as a result of persistent non-conformance of one Contractor, as an alternative to
completely terminating the contract. However this compliance mechanism has not been considered
further at this time due to the following potential practical and contractual difficulties:
Changing resource demands as a result of increased or decreased work loads may present
significant difficulties to both Contractors
The scope and location of the changing work loads are unlikely to be fairly compensated
through any simple adjustment to the respective LS monthly payments
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The other mechanisms for encouraging Contractor compliance are expected to be simpler to
administer and effective in achieving the desired outcomes.
None the less it is recommended that some readily assessed measures of Contractor performance
(MPMs) be developed to enable a fair basis of comparison between respective contracts to be
derived and regularly reported. One of these should include the outcome of the Contractors
performance evaluation outlined in Section 7.5 below.
7.5
Ensuring as much consistency as possible of how the scores are derived and applied
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Contract Number:
OPRC 1
Appraisal Date:
Contract Value:
Region Office:
Contractor:
Appraisal By:
Contractors Manager:
Evaluation Status:
Criteria
Grade
Weakness
Strength
Management (20%)
Skill level and competency
N/A
Risk management
Responsiveness
Quality Assurance
N/A
N/A
N/A
N/A
N/A
N/A
10
N/A
10
N/A
10
N/A
N/A
10
N/A
10
N/A
N/A
N/A
20
40
60
80
100
Production (45%)
Contractors Programmes
Ability to meet programme
Achieves the specified standard
Defect management system
Achievement
Network Condition
Administration (15%)
Financial
Handling of variations
Reporting
Overall % Ratings
Brief Comment:
Overall Rating
%
(please tick one)
Unacceptable Performance
<36%
Below Average
36-47%
Average
48-57%
Above Average
58-72%
Good
73-87%
Excellent
88-100%
Signatures:
(Client Representative)
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(Contractor's Representative)
The development of tender evaluation procedures is outlined in Clause in the Terms of Reference:
29.
The tender evaluation procedures: The Consultant shall work with the GoP to develop an
evaluation procedure that meets the objectives of obtaining the best value for money over
the term of the contract, whilst at the same time provides flexibility to allow the bidders to
propose the services and risk allocation they consider to be best asset management
practices and also conforming to any legislative requirements that govern the letting of
contracts by the GoP.
Contractor Prequalification
8.1.1 Prequalification Needs Assessment
Prior to the development of any prequalification criteria, and subsequent to the outcomes of
the Industry Consultation Workshop #1, it is necessary to firstly consider whether the
development and implementation of a prequalification phase for these pilot contracts is
worthwhile.
The following are considered to be the risks and potential outcomes of not proceeding with a
Pre-qualification stage:
Too few tenders received to ensure truly competitive pricing for the work, and
exposing the Client and the World Bank to having to accept higher than necessary
prices for the work.
A large number of tenders received but with a wide range of experiences and
abilities, some being inadequate to meet the needs of the OPRC pilot.
Too many potential Tenderers from a wide spectrum of experiences and capabilities
(not necessarily road construction or maintenance related) has the potential to create
difficulties in effectively managing and running the Pre-bid workshop phase.
Feedback from the Industry Consultation Workshop #1 suggests that if the maximum
annual value of each contract is less than Rs 100 crore, then larger national or
international Contractors will be less interested in tendering. Based upon the
preliminary networks recommended under Task B1, it is reasonable to conclude that
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There is the risk that larger or lesser experienced Contractors will still wish to submit
a tender, in which case any that are considered by the TET as failing to meet the
non-price attribute requirements would then have to be excluded during the Tender
evaluation phase.
The need to reject tender submissions and exclude Tenderers from further
consideration even though they have put in significant effort during the tender
process. This may potentially expose the Tender Evaluation Team (TET) and the
tender process for evaluation to a greater risk of legal challenges by those who may
have been excluded.
The risk of this can be mitigated by firstly ensuring those Contractors attending future
Industry Consultation Workshops are provided with sufficient information and handouts so
that they are well aware of the scope and nature of the work.
The number of Contractors interviewed as part of completing Task A4, along with the
interest displayed by these Contractors and those who attended the Industry Consultation
Workshop, suggests that there was already a reasonably high level understanding of the
OPRC concepts. Further awareness raising workshops planned prior to the advertising of
the pilot contract(s), will assist further in ensuring competitive market prices are received.
Secondly it is felt that the risk of any potential legal challenge to the decision of the TET to
reject a Tenderers submission can be mitigated by ensuring the requirements of the Tender
documents are both clear and concise, along with the application of predetermined scoring
criteria which is to be also included in the Tender documents.
8.1.2 Recommendation on Prequalification
Even though the general level of awareness of the OPRC concept appears to be good at the
local Contracting Industry level, there is still a degree of uncertainty as to the final mix of
potential Tenderers.
As securing the right Tenderer is seen as one of the critical success factors to the pilot, it is
recommended that the following pre-qualification steps be implemented:
(i)
Through both public and appropriate Industry specific notices a request to register an
Expression of Interest (EOI) from those wishing to tender. Sufficient background
information will need to be provided to all those registering an interest to ensure they
understand the over concept and nature of the work involved. The EOI would require
the following information to be submitted back to PRBDB within a prescribed
timeframe:
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8.2
From the submitted EOIs the Client and Consultant would prepare a short list of
suitable Contractors who would be directly invited to tender for the OPRC pilot(s).
To assist with ensuring a high level of Industry awareness is achieved prior to the commencement
of the public tendering, it is recommended that the following packages of information be made
available to all workshop attendees and any other potential Contractors who are known to be
interested prior to final tender advertising:
Location and maps of the network(s)
A basic schedule, descriptions and specifications covering the scope work to be undertaken
An indicative programme and annual quantities of work that is to be completed
A summary draft of the contractual arrangements, payment mechanisms and sample bidding
documents
An overview of the roles of the various parties
An outline of the tender evaluation criteria and procedures
To quantify the value of the quality attributes submitted by the Tenderers to the Client it is
recommended that an evaluation procedure is developed that will:
Separate the total evaluation score applied to each tender by the Tender Evaluation Team
(TET) into Price and a Non-Price (Quality) components. These two components will be assigned
an agreed weighting, e.g. Price 60%, Non-Price 40%.
Clearly identify non-price quality attributes that the Tenders must provide (separately from their
Price) for evaluation by the TET. These attributes would be assigned weightings to reflect the
value of their contribution to the overall non price score. An example of these non-price
attributes would be:
(i)
(ii)
Track Record performance on these 5 projects including nominated referee contacts and
supporting letters
(iii)
(iv)
(v)
(vi)
Methodology
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Relevance (60%)
35 or less: Not Related
40, 45: Barely Related
50, 55: Related
60, 65, 70: Particularly Related
75, 80, 85: Very Related
90, 95, 100: Extremely Related
Currency (20%)
Scale (20%)
(% of estimate)
Project 1
Project 2
Project 3
Project 4
Project 5
Summary Rating
Tenderer:
Overall Relevant
Experience Rating
Performance
(includes Management, Production, Health & Safety and Administration)
35 or less: Unsatisfactory
40, 45: Needs Improvement
50, 55: Acceptable
60, 65, 70: Requirements Fully Met
75, 80, 85: Exceeds Requirements
90, 95, 100: Superlative
Project 1
Project 2
Project 3
Project 4
Project 5
Summary Rating
Tenderer:
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Key Personnel
Technical (30%)
Weighting %
Contract Manager
10
Contractors Representative
10
20
35 or less: Poor
40, 45: Below Average
50, 55: Average
60, 65, 70: Above Average
75, 80, 85: Good
90, 95, 100: Excellent
Rehabilitation)
field
supervisor
(Surfacing
20
Senior
field
Maintenance)
supervisor
(Routine
10
Senior
Renewal)
Environmental Personnel
10
10
Quality Manager
10
Summary Rating
Technical Skills Rating
Tenderer
Evaluators Comments (Continue on Separate Sheet if Necessary)
TET Note: Technical Skills relates to individuals, not the company, and should include technical skills of key
subcontractors if the positions listed are to be filled by subcontractors.
Equipment (40%)
Personnel (60%)
(Equipment and Facilities)
35 or less: Poor
40, 45: Below Adequate
50, 55: Average
60, 65, 70: Above Average
75, 80, 85: Good
90, 95, 100: Excellent
35 or less: Poor
40, 45: Below Average
50, 55: Average
60, 65, 70: Above Average
75, 80, 85: Good
90, 95, 100: Excellent
Pavement Construction
Vegetation Control
Financial Management
Summary Rating
Tenderer:
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Programming (20%)
Financial
Management (20%)
35 or less: Poor
40, 45: Below Adequate
50, 55: Average
60, 65, 70: Above Average
75, 80, 85: Good
90, 95, 100: Excellent
35 or less: Poor
40, 45: Below Adequate
50, 55: Average
60, 65, 70: Above Average
75, 80, 85: Good
90, 95, 100: Excellent
35 or less: Poor
40, 45: Below Adequate
50, 55: Average
60, 65, 70: Above Average
75, 80, 85: Good
90, 95, 100: Excellent
35 or less: Poor
40, 45: Below Adequate
50, 55: Average
60, 65, 70: Above Average
75, 80, 85: Good
90, 95, 100: Excellent
35 or less: Poor
40, 45: Below Adequate
50, 55: Average
60, 65, 70: Above Average
75, 80, 85: Good
90, 95, 100: Excellent
Summary Rating
Management Skills Company Systems Rating Carried Forward
Management Skills Weighting will be 60% Personnel & 40% Company Systems
Tenderer:
Overall
Management Skills
Rating
(Weighting 10 %)
Standard
Weighting %
Factor
10
15
15
15
15
and
(100%)
35 or less: Poor
40, 45: Below Average
50, 55: Average
60, 65, 70: Above Average
75, 80, 85: Good
90, 95, 100: Excellent
Summary Rating
Tenderer
Methodology Rating
Note for TET: Methodology relates to the proposed method of carrying out the Contract Works, and should
include methodology of key subcontractors where work is to be carried out by subcontractors.
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Professional Services
$325,000,000.00
Remove Provisional Sums (or any other Schedule fixed amounts in the RFT) from the Tender Prices and
$15,000,000.00 Estimate
Evaluation Estimate
$310,000,000.00
Please fill in the green fields only
Date:
ENVELOPE 1 Non-Price Evaluation
Tenderer
Weighting
Tenderer B
Tenderer C
Tenderer B
Tenderer C
5%
Relevant Experience
80.0
69.0
72.0
4.00
3.45
3%
Track Record
72.0
71.0
60.0
2.16
2.13
1.80
10%
Resources
75.0
70.0
65.0
7.50
7.00
6.50
10%
Technical Skills
83.0
65.0
70.0
8.30
6.50
7.00
2%
Mangement Skills
81.0
75.0
70.0
1.62
1.50
1.40
10%
Methodology
78.0
70.0
65.0
7.80
7.00
6.50
31.38
27.58
26.80
31.38
27.58
26.80
60%
26.80
4.58
0.78
0.00
$23,663,333.33
$4,030,000.00
$0.00
$23,663,333.33
$4,030,000.00
$0.00
TET's agreement on the calculated or adjusted SQP and ATP, and calculations verified correct:
TET Signature
Date
Date
PRBDB
TET Name
ENVELOPE 2 Price Evaluation
Tender Price
Less all Schedule Fixed Amounts
3.60
PWD
Opus
Tenderer's Full Name
334,000,000.00
328,000,000.00
$15,000,000.00
322,000,000.00
Tenderer A
$15,000,000.00
$15,000,000.00
Tenderer B
Evaluation Price
$319,000,000.00 $313,000,000.00
$307,000,000.00
Tenderer C
$295,336,666.67 $308,970,000.00
$307,000,000.00
Lowest
Adjusted Evaluation Price is the Evaluation Price less the SQP and ATP. The preferred Tenderer is the Tenderer with the lowest Adjusted Evaluation Price
TET's agreement on the selection of the preferred tenderer and declaration that no conflicts of interest exist:
TET Signature
Date
PRBDB Director
Date
TET Name
The SQP for Tender A in this example has been calculated as follows:
Weighted Sum Indice for Tenderer A
=
31.38
((0.05x80)+(0.03x72)+(0.10x75)+(0.10x83) (0.02x81)+(0.10x78))
Weighted Sum Margin for Tenderer A
$23,663,333.33
In this example Tenderer A has submitted the highest tender price but has also received the highest
SQP value (which is then subtracted from the tendered price) and therefore has the lowest Adjusted
Evaluation Price. On this basis Tenderer A would therefore be awarded the contract.
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Contract Duration
There needs to be a balance between ensuring the Client does not feel un-necessarily bound by the
duration of the contract while at the same time the duration is long enough to provide the Contractor
with the confidence to invest in both plant and labour to the extent necessary to achieve the pilots
objectives.
In some cases road controlling agencies have perceived a risk that over the longer contract
durations (e.g. 10 years) they begin to feel that they have lost touch with the network and the
details of its operation. In addition to this there needs to be a high degree of stability over the level
of funding secured for the on-going maintenance inputs.
Long term LS performance contracts may also be perceived by some as being less flexible when it
comes to being able to accommodate inevitable changes in political directions or those brought
about by new legislation. From the Contractors view point this stability is probably seen as an
advantage and may work to the Clients long term benefit. The setting up of an effective CMB
combined with the opportunity for regular reviews over the way the contract is performing will
provide a mechanism to address any concern over the inflexible nature of the OPRC by either party.
The feedback received from the Contractors at the Industry Workshop No. 1 indicated a range in
duration from a minimum of 7 years to a maximum of 15 years. The assessment made, as part of
the legal review, of the implications of these contracts extending passed at least one electoral cycle
was that this should not create any undue difficulty, as these contracts are entered into by the
Government, and are therefore binding upon the State and not any particular elected party.
It is therefore recommended that, subject to agreement by the PRBDB, that the OPRC pilot contract
duration be assigned a maximum duration of 10 years. If a shorter duration is considered more
acceptable, then this should be no less than 7 years.
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10
The conceptual designs prepared for the sections of the network identified for planned upgradation
will contain sufficient information to enable the Tenderers to price on a per m2 basis for their
construction. It is expected that there would be a separate rate based on whether the upgradation
was from an existing width of 3.05m to 5.5m, from 5.5m to 7.0m or from 7.0m to 10.0m.
It may be appropriate to also identify standard construction features such as culvert extensions,
retaining walls and safety improvement features as separate items for pricing as well. The
Contractor would, when submitting his final design for these works, confirm the quantity of
2
upgradation area (m ) along with the number of additional features to be constructed at the
scheduled rates. However the contract documents will need to be very clear that apart from the
separately identified features that may be paid for at the tendered rates, all other risks associated
2
with the construction of these planned upgradations must be included in the Tenderers per m rate.
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11
Item Number
Issue
Comments
A
comprehensive
list
of
probable
Emergency
Works
Activities
and
associated unit rates developed under Task
C3. The annual value of Emergency Works
to be carried by the OPRC Contractor
needs to be determined.
Major
Non-Conformance
Score Field testing of the non-conformance
Triggering Payment Reduction
scores against prescribed performance
targets is necessary to determine an
acceptable tolerance level.
Payment
Details
Upgradation Works
9
for
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(ii)
(iii)
Task A2: Preliminary Report on Contract Format for Output and Performance
Based Contracts for Roads: Technical Proposal Discussion Offer Item 4
Concerning Task A2: Financial Models to be used for Payment August 2008
(iv)
Task B1: Draft Report on Review Suitability and Selection of the OPRC Pilot
Areas October 2008
(v)
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