100119 - Guide - Procurement of Consulting Eng Services in Construction Industry - Jan 2010

7/29/2019 100119 - Guide - Procurement of Consulting Eng Services in Construction Industry - Jan 2010

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PROCUREMENT OF

CONSULTING ENGINEERING SERVICES

IN THE CONSTRUCTION INDUSTRY

A Guide for

Consulting Engineering Firms

Published by CESA – Consulting Engineers South Africa

And



Endorsed by the CIDB – Construction Industry Development Board

August 2009



TABLE OF CONTENTS CHAPTER 1. INTRODUCTION .......................................................................................................................................... 4

CHAPTER 2. DEFINITIONS ............................................................................................................................................... 5

CHAPTER 3. PROJECT LIFE-CYCLE .............................................................................................................................. 8

3.1

Introduction ................................................................................................................... Error! Bookmark not defined.

3.2 Project life-cycle ............... ................ ................ ............... ................ ................ .................... ................ ................. ......... 8

CHAPTER 4. CONSULTING SERVICES ................ ................ ................. ................ ................. ................ ................... .... 10

CHAPTER 5. PROCUREMENT OF CONSULTING SERVICES ..................................................................................... 11

5.1 Legal Environment for Procurement of Consulting Engineering Services .................................................................. 11

5.2 objectives of procurement ................ ................ ................ ................ ................ ................ ................ ..................... ...... 13

5.3 Methods of Procurement ............................................................................................................................................ 14

5.4 CIDB’s Best Practice Guidelines: Competitive Selection ............................................................................................ 14

CHAPTER 6. SCOPE ....................................................................................................................................................... 16

6.1 planning, studies, investigations and assessments .................................................................................................... 16

6.2 SCOPE of services for normal project design stages ................................................................................................. 17

6.3 The Scope of Work ..................................................................................................................................................... 18

6.4

important considerations .............. ................ ................ ................ ............... ................ ................... ................ ............. 19

CHAPTER 7. TENDER DOCUMENTATION FOR CONSULTING ENGINEERING SERVICES ..................................... 21

7.1 Model for Uniformity .................................................................................................................................................... 21

7.2 Headings and Content of Component documents ........................................................Error! Bookmark not defined.

7.3 Guidelines for compiling the documentation ............................................................................................................... 21

7.4 Points to note ................................................................................................................Error! Bookmark not defined.

CHAPTER 8. VALUE – ADDED SERVICES ................................................................................................................... 22

8.1 The Concepts of Financial Offer and Quality .............................................................................................................. 22

8.2 The Concept of Value ................................................................................................................................................. 24

8.3 Guidelines for pricing of Tenders ................................................................................................................................ 24

8.4 The Relevance of a Benchmark ................................................................................................................................. 27

8.5 The Multiplier .............................................................................................................................................................. 27

8.6

The Concept of “Value Bidding” .................................................................................................................................. 28 8.7 Points to Note ............................................................................................................................................................. 28

CHAPTER 9. EVALUATION OF TENDERS .................................................................................................................... 29

9.1 CIDB’s Best Practice Guidelines: Evaluation of Tenders ........................................................................................... 29

9.2 Stating the Evaluation Criteria .................................................................................................................................... 29

9.3 Recommended Approach – Evaluating Quality with Financial Offer .......................................................................... 29

9.4 Points to Note ............................................................................................................................................................. 31

9.5 Tables for the evaluation of tenders ........................................................................................................................... 33

CHAPTER 10. PERFORMANCE MONITORING ............................................................................................................... 45

10.1 Communication and Liaison ....................................................................................................................................... 45

10.2 Suggested Performance Monitoring and Evaluation Process .................................................................................... 45

10.3 Points to Note ............................................................................................................................................................. 46



CHAPTER 1. INTRODUCTION

“Consulting Engineers South Africa” (CESA) was established in 1952 as the South African Association of

Consulting Engineers. Over the past six decades, as the construction industry and the consulting engineering

profession have evolved, a great many methods by which clients procured the services of consulting engineers

have been witnessed. This evolution continues today, having gained impetus as new democratic processes

have come to the fore in South Africa.

This Guide reflects what is considered best practice today for Consulting Engineers – to appropriately respond

to calls for consulting engineering services and to deliver these services in a true value–added context. It

incorporates the requirements of all applicable legislation including the Construction Sector Charter published

in terms of Section 9(1) of the BBBEE Act, 53 0f 2003.

The contents of this Guide focus on suggestions to Clients in requesting services and for Consulting Engineers in

framing their responses to these requests. This has been done in order to better inform the procurement

process.

The Guide has been prepared in collaboration with the Construction Industry Development Board (CIDB),

whose own numerous publications and notes towards attaining best practice in the construction industry, and

the procurement and use of professional service providers, are used as a framework. Wherever possible the

terminology used in the Guide has been aligned to reflect the terminology and methodology contained in the

CIDB documentation.

Subsequent to the abovementioned collaboration, the Guide has been formally recognised by the CIDB as

follows:

“The CIDB wishes to acknowledge CESA for its efforts in the development of this manual that serves to provide

guidelines to its members on construction procurement. We trust that this document will assist in providing

direction and understanding of government’s legislative requirements for infrastructure delivery to CESA

members, but is not a substitute for the CIDB construction procurement prescripts. The CIDB looks forward to

further cooperation with CESA in the search for best practice and innovative delivery models to improve the

rate of

growth

and

development

of

the

South

African

Construction

Industry.

”

In addition to the Introduction and definitions, this manual has been laid out in the same order as the typical

flow in the procurement process as follows:

CHAPTER 3. PROJECT LIFE‐CYCLE ‐An outline of the typical project life cycle as background.

CHAPTER 4. CONSULTING SERVICES ‐A description of typical consulting services that can be provided by

consulting engineers.

CHAPTER 5. PROCUREMENT OF CONSULTING SERVICES ‐ Legislation and objectives of procuring consulting

engineering services

CHAPTER 6. SCOPE ‐ An expanded description of various elements of scope.

CHAPTER 7. TENDER DOCUMENTATION FOR CONSULTING ENGINEERING SERVICES ‐ Guidelines for

preparing tender

documentation

for

CE

services.

CHAPTER 8. VALUE – ADDED SERVICES ‐ An expansion on the issues surrounding value that is obtained

through CE services and pricing for these services.

CHAPTER 9. EVALUATION OF TENDERS ‐ Guidelines on the evaluation of CE tenders for services.

CHAPTER 10. PERFORMANCE MONITORING ‐ Aspects related to monitoring CE services provision



CHAPTER 2. DEFINITIONS

Terminology used in this Manual has been chosen to reflect the terminology used by the CIDB, to facilitate

cross‐referencing

with

CIDB

documentation.

Some

of

the

more

important

changes

are

listed

below:

In

most

cases the definitions in this manual coincide with the definitions given in the latest Guideline Scope of Services

and Tariff of Fees for Persons Registered in terms of the Engineering Profession Act, 2000 (Act No. 46 of 2000),

as well as the Revised Standard for Uniformity in Construction Procurement, published in terms of the

Construction Industry Development, Board Act, 2000 (Act No. 38 of 2000)

(i) “Bid” see tender below.

(ii) “Building Project” means a project comprising building work, together with its associated

engineering work, where the engineer is subject to the authority of another professional acting as

the Principal Agent while financial and administrative matters are dealt with by another

professional.

(iii) “Client”, means any juristic person or organ of the State engaging a consulting engineer for

services on

a project.

(iv) “Construction monitoring” means the process of administering the construction contract and over‐

seeing and/or inspecting the works, to the extent of the consulting engineer’s engagement, for the

purpose of verification that the works are being completed in accordance with the requirements of

the contract that the designs are being correctly interpreted and that appropriate construction

techniques are being utilized. Construction monitoring, to whatever extent, shall not diminish the

contractor’s responsibility for executing and completing the works in accordance with his contract.

(v) “Construction industry”, the broad conglomeration of industries and sectors which add value in

the creation and maintenance of fixed assets within the built environment.

(vi) “Construction Procurement” means the invitation, tendering, award and carrying out of projects.

(vii)“Consulting engineer”, for purposes of these rules only, means any professional registered in terms

of the Act, or a juristic person who employs such professional, engaged by a client on a project;

(viii) “Contract”, means the formal agreement between the client and the consulting engineer also

called the Form of Agreement.

(ix) “Contract Data”, means the portion of the tender document that relates specifically to the

Contract in question and includes all the applicable conditions and related data in respect of

insurances, limits, durations and programme.

(x) “Contractor” means any person or a juristic person under contract to a client to perform the works

or part of it on a project, including a subcontractor under contract to such contractor;

(xi) “cost of the works” means the total final amount (or a fair estimate thereof), exclusive of value

added tax, certified or which would, normally, be certifiable for payment to contractors

(irrespective of

who

actually

carries

out

the

works)

in

respect

of

the

works

designed,

specified

or

administered by the consulting engineer, before deduction of liquidated damages or penalties,

including –

‐ Escalation, assuming continuity of the project through to final completion. Where delays occur in the

project cycle the client and consultant should come to an agreement on the escalation that will be

applicable to various stages of services.

‐ a pro‐rata portion of all preliminary and general items applicable to the Works;(irrespective of who

actually carries out the works) and



‐ the costs of new materials, goods or equipment, or a fair evaluation, of such material, goods or

equipment as if new whether supplied new or otherwise by, or to, the client and including the cost or a

fair evaluation of the cost of installation (the sourcing, inspection and testing of such will comprise

additional services by the consulting engineer);

(xii) “Electronic Engineering Services” means services related to the provision of electronic systems

and detailing the terminations, signals and interconnections of electronic components as distinct

from conventional

electrical

HV,

MV

and

LV

systems

and

related

reticulation.

(xiii) “Emerging Enterprise”, means and enterprise that is owned managed and controlled by previously

disadvantaged persons as defined in Government Gazette No 30692 1 February 2008.

(xiv) “Engineering and Construction Works Contract”, means a contract for the provision of a

combination of supplies and services, arranged for the development, extension, installation, repair,

maintenance, renewal, removal, renovation, alteration, dismantling or demolition of structures,

including building and engineering infrastructures

(xv) “Engineering Project” means a project of which the scope comprises mainly engineering work.

(xvi) “Expression of interest”, involves both a request for an Expression of Interest and the Consulting

Engineer’s response to the request. The request is for tenderers to register their interest in

undertaking a specific contract or to participate in a project or programme and to submit their

credentials so

they

may,

in

terms

of

the

organization's

procurement

procedures,

be

shortlisted

and

invited to submit a tender offer should they qualify or be selected to do so.

(xvii) “Financial Offer” see Tender Price.

(xviii) “Form of agreement”, means a standardised document setting out the formal agreement between

the client and the consulting engineer for the providing the scope of services for the specified

scope of works

(xix) “Form of offer and acceptance”, the documents that formalise the legal process of offer and

acceptance.

(xx) “Functionality” see quality.

(xxi) “list of returnable documents “ means the document that lists everything the employer requires a

tenderer to

submit

with

his

tender

submission

(xxii) “Normal services” means the typical services as set out be ECSA that should be provided on a

project and for which payment in terms of the ECSA guidelines tariffs should normally provide

adequate remuneration.

(xxiii) “Pricing instructions” the document that provides the criteria and assumptions which it will be

assumed in the contract, that the tenderer has taken into account when developing his prices, or

target, in the case of target cost contracts

(xxiv) “Principal Agent” means the Professional Service Provider appointed as such.

(xxv) “project” means any total scheme envisaged by a client, including all the works and services

concerned;

(xxvi) “Quality (functionality)”

the

totality

of

features

and

characteristics

of

a product

or

service

that

bear on its ability to satisfy stated or implied needs.

(xxvii) “Services Contract”, means a contract for the provision of labour or work, including knowledge‐

based expertise, carried out by hand, or with the assistance of equipment and plant

(xxviii) “Site information”, means the document that describes the site as at the time of tender, to enable

the tenderer to price his tender and to decide upon his method of working and programming.

(xxix) “Scope of Services” means the services which a consulting engineer must provide in relation to the

Scope of Work.



(xxx) “Scope of Work” means the portion of the works for which the consulting engineer is engaged.

(xxxi) “Stage” means one of six stages of the normal services set out below.

(xxxii) “The Act” means the Engineering Profession Act, 2000 (Act No. 46 of 2000);

(xxxiii) “Total annual cost of employment” means the total annual cost of employment as defined in

clause Error! Reference source not found.;

(xxxiv) “Submission data”, the document that establishes the respondent's obligations in submitting an

expression of interest and the employer's undertakings in the processing of the submission

(xxxv) “Supplies contract “ means a contract for the provision of materials or commodities made available

for purchase.

(xxxvi) “Tender data “, means the document that establishes the tenderer's obligations in submitting a

tender and the employer's undertakings in administering the tender process and evaluating tender

offers;

(xxxvii) “Tender notice and invitation to tender” means the document that alerts prospective Professional

Services Suppliers to the nature of the supplies, services and engineering and construction works

required by the employer and contains sufficient information to solicit comparable responses.

(xxxviii) “Tender Price”,

means

the

price

submitted

for

the

required

services

including

all

other

payment

conditions and related information in respect of costs and disbursements.

(xxxix) “Threshold”, means a monetary value of a procurement contract established in any legislation

governing procurement or by the executive of an institution, below which a procedure may be

used.

(xl) “Works” means the activities on a project for which contractors are under contract to the client to

perform or are intended to be performed, including the supply of goods and equipment;



CHAPTER 3.

CHAPTER 3. PROJECT LIFE‐CYCLE

The construction

industry

within

South

Africa

is

a well

‐established

sector

that

has

nationally

delivered

infrastructure of high standard on a par with the developed world. It is an efficient and effective ‘machine’ that

delivers infrastructure at the right quality, within budget and deadline.

Its primary constraint has not been a lack of capacity and skills but rather a lack of investment by government

and the private sector, as well as the complicated procurement regime resulting from a plethora of recent

legislation.

The intention of this Manual is to generally guide clients and consulting engineers through this ‘minefield’ with

regard to their role in the construction project life‐cycle and especially the associated procurement aspects.

3.1 PROJECT LIFE‐CYCLE

The project life cycle involves several elements as shown in the figure below.

Project Life Cycle1

Identification

2 Definition

3 Feasibility

4 Concept & Viability

5 Design

6 Procure

7 Construct

8 Ops & Maint

The first 3 steps in the project life cycle are associated with identifying a potential project and defining and

selecting the most appropriate feasible project that can meet the need.

The next 3 steps involve developing the project through to the final design stage and procuring a Contractor to

construct the project.

Thereafter the project is constructed and handed over to the client who will have processes in place to operate

and maintain the resulting facility.



3.1.1 Identification

The first step in the project life‐cycle is to identify the need to a project. This is normally the result of many

planning, or operations and maintenance studies that show a need of one form or another that can be met

through a construction project. This step in the project life cycle normally involves many processes that are

initiated or carried out by the owner of infrastructure. Such processes may involve the appointment of

specialist consulting engineers or other professional service providers who may assist in identifying the causes

and potential solutions to problems and a range of potential projects that may solve the problem while at the

same time not making an unnecessary impact on the physical and social environment and also ensuring

reasonable project sustainability.

3.1.2 Definition

Once the potential projects have been identified they will need to be assessed through more detailed planning

and investigation studies in order to define the project in more detail. Inappropriate solutions will be rejected

and a short list of alternative solutions prepared.

3.1.3 Feasibility

Once the project has been defined the technical and financial feasibility will need to be determined and the

definition may need to be adjusted to refine the project and select the most appropriate project option subject

to technical

and

financial

constraints.

3.1.4 Viability

Once the feasible project has been defined procurement of normal consulting engineers’ services or any other

services associated with the design and project development can commence. The first stage of these services

will be to develop the concept design in more detail and confirm its technical and financial viability in greater

detail.

3.1.5 Design

Once the project concept has been finalised detailed design can commence which involves detailing all of the

aspects of the project in sufficient detail to obtain competitive prices for construction.

3.1.6 Procurement

When the design is complete the necessary contract documents are prepared and tenders for construction are

solicited. The tenders are evaluated and the Construction Contract is awarded to the wining tenderer.

3.1.7 Construction

Construction can now commence and proceeds until practical completion when the owner takes possession of

the constructed project. The construction contract is finalised when the defects liability period has expired and

all defects have been rectified.

3.1.8 Operations and Maintenance

The owner now proceeds with operation and maintenance of the project in accordance with nay manuals and

guidelines that are provided and in accordance with the owner’s own processes and procedures.



CHAPTER 4. CONSULTING SERVICES

The services provided by consulting engineers and other professional services providers involve a myriad of

services in a range of disciplines and fields. These include amongst others:

AGRICULTURAL ENGINEERING

CIVIL ENGINEERING SERVICES

CONSTRUCTION MANAGEMENT SERVICES

CONSTRUCTION PROJECT MANAGEMENT SERVICES

ELECTRICAL ENGINEERING

GEOTECHNICAL ENGINEERING

MECHANICAL ENGINEERING

STRUCTURAL ENGINEERING

TRANSPORTATION ENGINEERING

MISCELLANEOUS ENGINEERING SERVICES SUCH AS:

Railway Track design, Refueling systems, Materials Handling Systems, Special Structures, Asset

Management Systems, Transaction Advisory Services, Acoustical engineering services, Building wet

services, Cathodic protection, Fire protection and detection, Lightning protection, Contractual

Advisory Services, Airport airside and landside developments

The provision of these services can deliver most value in the early steps of the project cycle and therefore

functionality and quality of the proposed service is regarded as much more important than cost in steps 1 to 3

of the Project Cycle as shown above.

As the project becomes increasingly well defined the required consulting services become easier to define

more precisely

and

the

role

of

high

level

expertise

reduces

while

that

of

more

routine

skills

such

as

design

detailing and correct and comprehensive contract documentation become more important. This is shown

conceptually in the table below.

Step in Project Cycle Required expertise and potential for value

Identification Strategic concepts and lateral thinking to identify appropriate options.

Definition Operational and value options to define projects that are likely to be

feasible and cost‐effective.

Feasibility Identification and elaboration of possible alternatives and cost‐

effectiveness.

Concept and

Viability

Project

optimisation

subject

to

budget

and

environmental

constraints.

Design Quick and effective design detailing and incorporation of latest

appropriate technological developments.

Procurement Good contract documentation, accurate schedule of quantities and

appropriate procurement options

Construction Conscientious construction administration and monitoring and effective

handling of contractual issues

Operations and Maintenance Asset management and preventative maintenance



CHAPTER 5. PROCUREMENT OF CONSULTING SERVICES

Consulting Engineers form an important major pool of skilled technical resources in South Africa that help to

ensure that

design

and

construction

of

engineering

works

are

of

excellent

quality

and

cost

effective.

A

high

standard of engineering and infrastructure development is vital to the country’s growth, progress and global

competitiveness. Through National Treasury policy statements, Government recognises that “it is necessary

that certain minimum requirements of quality and efficiency be achieved when appointing consultants”. At the

same time a basic policy of competitive selection is to be maintained.

5.1 LEGAL ENVIRONMENT FOR PROCUREMENT OF CONSULTING ENGINEERING SERVICES

A universally accepted set of objectives or outcomes for a construction procurement system are those based

on the Constitution of South Africa of 1996 (Act 108 of 1996) and which have been adopted by the

International Organisation for Standardisation (ISO) in the development of the ISO 10845 series of standards

for construction procurement.

Table 5‐1: Qualitative requirements (Pillars of Procurement)

System

requirement

Qualitative description of requirement

Fair The process of offer and acceptance is conducted impartially without bias, and provides

participating parties simultaneous and timely access to the same information.

Terms and conditions for performing the work do not unfairly prejudice the interests of the

parties.

Equitable The only grounds for not awarding a contract to a tenderer who complies with all

requirements are restrictions from doing business with the organization, lack of capability or

capacity, legal impediments and conflicts of interest.

Transparent The procurement process and criteria upon which decisions are to be made shall be

publicized. Decisions (award and intermediate) are made publicly available together with

reasons 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.

Competitive The system provides for appropriate levels of competition to ensure cost‐effective and best

value outcomes.

Cost‐ effective The processes, procedures and methods are standardized with sufficient flexibility to attain

best value outcomes in respect of quality, timing and price, and the least resources to

effectively manage and control procurement processes.

Promotion of

other

objectives

The system may incorporate measures to promote objectives associated with a secondary

procurement policy subject to qualified tenderers not being excluded and deliverables or

preferencing criteria being measurable, quantifiable and monitored for compliance.

The procurement of consulting engineering services accordingly needs to maintain a balance between

reasonable

compensation

which

will

ensure

continued

attractiveness

and

development

of

the

profession

on

one hand, while ensuring competition on the other. In addition the Constitution of South Africa requires that

government procurement systems must be Fair, Equitable, Transparent, Competitive and Cost Effective. A

legislative framework exists to promote transformation in the new democracy of the country. The key Acts

affecting procurement are:



Table 5‐2: Primary Legislation Regulating Procurement

Act Applicability What it does in respect of procurement

Constitution of the

Republic of South

Africa, 1996

(Act

No

108 of 1996)

All organs of state Provides procurement objectives and establishes government’s

policy for preferencing.

Establishes requirements

for

the

award

of

contracts

to

be

lawful,

reasonable and procedurally fair.

Public Finance

Management Act (Act 1

of 1999)

National and provincial

departments and state

owned enterprises

Establishes a regulatory framework for supply chain management

which includes procurement within national and provincial

departments and state owned enterprises.

Promotion of

Administrative Justice

Act (Act 3 of 2000)

All organs of state Establishes fair administrative procedures, permits those affected

by unfair administrative action to request reasons for such

administrative action within 90 days of, or when they became

aware of, such actions and requires administrators to respond

within 90 days of receipt of such requests. (Administrative actions

are presumed to be have been taken without good cause where an

administrator fails to respond within the prescribed period.)

Provides for procedures for the judicial review of administrative

actions and remedies in proceedings for judicial review including

the prohibition of an administrator from acting in a particular manner, setting aside the administrative action, correcting the

defective action and the ordering of the administrator to pay

compensation.

The Promotion of

Equality and the

Prevention of Unfair

Discrimination Act,

2000 (Act 4 of 2000)

The state and all persons

(natural or juristic

person)

Prohibits the state or any person from discriminating unfairly

against any person on the grounds of race or gender through the

denial of access to contractual opportunities for rendering services

or by failing to take steps to reasonably accommodate the needs of

such persons.

Preferential

Procurement Policy

Framework Act, 2000

(Act No 5 of 2000)

All organs of state (state

owned enterprises) at

discretion of Minister)

Establishes the manner in which preferential procurement policies

are to be implemented

Construction Industry

Development Board

Act, 2000 (Act 38 of

2000)

All organs

of

state

involved in procurement

relating to the

construction industry.

Establishes the

means

by

which

the

Board

can

promote

and

implement policies, programmes and projects, including those

aimed at procurement reform, standardisation and uniformity in

procurement documentation, practices and procedures within the

framework of the procurement policy of government, through the

establishment of:

• a national register of contractors (and if required, consultants

and suppliers) to manage public sector procurement risk and

facilitate public procurement;

• a register of projects above a financial value with data relating

to contracts awarded and completed and a best practice

project assessment scheme;

• best practices

Establishes a code of conduct for the parties engaged in

construction procurement.

Establishes a national register for Project Service Providers

Broad‐Based Black

Economic

Empowerment Act,

2003 (Act No. 53 of

2003)

Procurement provisions

apply to all organs of

state.

Establishes a code of good practice and scorecard, provided for

industry specific charters such as the Construction Industry Charter,

to inform the:

• development of qualification criteria for the issuing of licenses or

concessions, the sale of state owned enterprises and for

entering into partnerships with the private sector; and

• development and implementation of a preferential procurement

policy.



Act Applicability What it does in respect of procurement

Local Government:

Municipal Finance

Management Act, 2003

(Act No 56 of 2003)

Municipalities and

municipal entities

Establishes a regulatory framework for supply chain management

which includes procurement within municipalities and municipal

entities.

Prevention and

Combating

of

Corrupt

Activities Act, 2004.

(Act No. 12 of 2004).

Public and private sector Makes corruption and related activities an offence, establishes a

Register

in

order

to

place

certain

restrictions

on

persons

and

enterprises convicted of corrupt activities relating to tenders and

contracts; and places a duty on certain persons holding a position

of authority to report certain corrupt transactions.

Construction Sector

Charter

(published in terms of

Section 9(1) of BBBEE

Act, 53 of 2003 (see

above))

All stakeholders

operating in the

Construction Sector

Provides framework to address:

• Broadbased black economic empowerment (ownership,

control, employment equity, skills development,

procurement, enterprise development & corporate social

investment)

• Enhancement of capacity

• Increase in production

It is mandatory for all stakeholders and is effective from 5 June

2009

It is

compulsory

for

organs

of

state

to

comply

with

the

principles

of

this

legislation

and

to

comply

with

the

“Standard for Uniformity in Construction Procurement” (SFU) of the Construction Industry Development Board

(CIDB).

The procedures of the CIDB in its SFU are generic and can be readily aligned with World Bank W70 and other

international documents.

5.2 OBJECTIVES OF PROCUREMENT

The development of skilled Professional Services providers takes many years and significant effort by all

involved in the industry. Therefore, the procurement of professional services should not be viewed as the

purchase of a readily available commodity, but rather the engagement of skilled professionals who should act

as trusted advisors in fulfilling the client’s project and other development objectives.

While services

should

be

offered

in

a competitive

manner,

the

primary

purpose

of

the

competitiveness

should

be to ensure long term value for money and not only short term low cost design. Such long term value does

not only encompass value in the project under consideration but also value in developing and having skilled

professionals available in the country to meet its needs rather than having to import all skilled services from

external sources.

The procurement of professional services in a reasonably competitive manner has exercised the minds of many

people over the years with no clear resolution in sight. The best method of procurement within a country is

where the selection of the professional service provider is based purely on quality and this is followed with

price negotiations to obtain fair value for money. This however, requires a knowledgeable client and mature

consulting environment, neither of which exists in abundance in South Africa at the present time.

Therefore, procurement needs to be approached with care in a transparent manner that encourages

professionals to develop and maintain the required skills and expertise. The current CIDB procurement

guidelines can

provide

the

necessary

results

provided

the

process

is

fair

and

transparent,

as

required

by

the

CIDB code of conduct.



5.3 METHODS OF PROCUREMENT

Against this background, Consulting Engineering Services can be procured using one of the following methods as

prescribed by the CIDB Standards for Uniformity (SFU):

Table 5‐3: Methods of Procurement

Method Description

1 Financial Offer

2 Financial Offer plus Quality (Functionality)

3 Financial Offer and Preference

4 Financial Offer plus Quality and Preference

For consulting engineering services, where cost effective and value–added performance is highly dependent

upon innovativeness, expertise and competence, the inclusion of Quality in the criteria for selection is of

paramount importance.

It is therefore recommended that in all but a small minority of cases as outlined in the SFU, Method 4 above

should be used– i.e. Quality and Cost Based Selection (QCBS) with preferencing as dictated the State from time

to time.

5.4 CIDB’S BEST PRACTICE GUIDELINES: COMPETITIVE SELECTION

It is further recommended that the CIDB’s Best Practice Guidelines as contained in the SFU, for competitive

selection procedures and as described below, should be followed (mandatory for Public Bodies).

Table 5‐4: Procurement Methods: Competitive Selection Procedures

PP2A (Nominated

procedure)

Tenderers that satisfy prescribed criteria are admitted to an electronic database. Tenderers

are invited to submit tender offers based on search criteria and their position on the

database. Tenderers are repositioned on the database upon appointment or upon the

submission of a tender offer.

PP2B (Open

procedure)

Tenderers may submit tender offers in response to an advertisement by the organisation to

do so.

PP2C (Qualified

procedure)

A call for expressions of interest is advertised and only those tenderers who have expressed

interest, satisfy objective criteria and who are selected to submit tender offers, are invited to

do so.

PP2D (Quotation

procedure)

Tender offers are solicited from not less that three tenderers in any manner the organisation

chooses, subject to the procedures being fair, equitable, transparent, competitive and cost

effective.

PP2E (Proposal

procedure)

Tenderers submit technical and financial proposals in two envelopes. The financial proposal

is only opened should the technical proposal be found to be acceptable.

PP2F (Proposal

procedure)

A two staged system: Non‐financial proposals are called for. Tender offers are then invited

from those tenderers that submit acceptable proposals based on revised procurement

documents. Alternatively a contract is negotiated with the tenderer scoring the highest

number of evaluation points.

PP2G (Shopping

procedure)

Written or verbal offers are solicited in respect of readily available supplies obtained from

three sources.

The

supplies

are

purchased

from

the

source

providing

the

lowest

Financial

Offer once it is confirmed in writing.

5.4.1 Points to note:

Quoting CIDB Best Practice Guideline A7 (Table A1, SFU): “The procurement of professional services should

result in the award of a professional service contract on the basis of demonstrated competence and

qualifications for the type of services required, at fair and reasonable Financial Offers. Accordingly, the

underlying principle is that professional service contracts are awarded to firms which have both the capacity

and capability to provide the quality of the service at a reasonable Financial Offer and not necessarily to those

that are the least costly. The Constitution requires that the procurement system be cost effective. This implies



that best value procurement outcomes in terms of quality, downstream and life cycle costs, timing and

Financial Offer using the least amount of resources necessary to effectively manage and control the

procurement process, should be strived for. Clearly selection on the basis of quality should not necessarily

mean the best quality available but quality appropriate for the assignment”.

It should also be noted that drawing up tender documents that include Financial Offer and quality as bases for

selection require that the scope or work and required services are adequately described so that comparable

tenders are

received.

In

addition,

the

process

of

preparing

a tender

can

also

take

up

a lot

of

time

and

effort

on

the part of the prospective tenderers. The cumulative total input cost of all tenderers can be considerable and

in many cases for small projects can exceed the potential fee, with a negative effect on the finances of the

service provider and on the overall economy of the project.

Therefore, as a guideline the potential fee to be earned by the consulting engineer on a project should

preferably be 20 times greater than the cost of preparing an individual tender. In other words the cost to

prepare a tender should not exceed approximately 5% of the potential fees to be earned. This makes economic

sense when it is noted the fees earned must cover all staff costs involved in executing the assignment, plus

overheads, expenses and profit. This means that tenders should not be solicited for small projects and where a

consulting engineer is responsible for drawing up the contract documentation the following procedure should

preferably be adopted:

Preferably

consider

grouping

small

projects

together.

Requesting proposals for term contracts where the consulting engineer can support the client on a

partnership basis for all small to medium projects over say a three year period. The advantage of this

approach is that it assists with identification and implementation of projects over the three year

period and also provides less cyclical and more effective employment of scarce engineering resources

within the consulting engineering firm and the country.

Listing manuals and procedures as requirements so that long‐winded technical proposals are not

required, only details of the proposed staffing and track record.



CHAPTER 6. SCOPE

The scope of services and scope of work for which a consulting engineer or any other professional service

provider is appointed need to be clearly defined to ensure proper pricing and a clear and unambiguous

understanding of what needs to be done.

It is important to distinguish between the scopes of services and the scope of work as set out in the definitions

above. This is because in many instances the both elements are not set out explicitly in the tender documents

resulting in uncertainty and inappropriate pricing and expectations. This is described in more detail below.

Besides describing the services, the scope should list the “Deliverables to be produced by the Consulting

Engineer”, i.e. the products of the Consulting Engineer’s work, in form of studies, reports, designs, drawings

and documents. In other words, the objective of the scope of services must be to reduce to a minimum the

level of uncertainty concerning the services required, for which the Consulting Engineer must develop an

understanding of what is required in order to submit a Financial Offer.

6.1 PLANNING, STUDIES, INVESTIGATIONS AND ASSESSMENTS

There are many steps related to identifying or defining and determining the overall feasibility of a project that

need to be undertaken prior to appointing a consulting engineer for normal project services. In many

instances, with well‐resourced clients, these identification and feasibility steps will be carried out internally as

part of the client’s normal project identification and project definition processes. For example, within a road

authority, roads requiring rehabilitation or resealing or complete reconstruction may have been identified and

the projects defined as part of the road management system. In the case of a water authority, water demand

or operational problems may result in the need for a new purification plant being identified and defined in

broad terms.

As indicated earlier the first 3 steps of the project cycle involve planning and studies. The typical services relate

to carrying out these studies and investigations as well as the preparation and submission of reports

embodying preliminary proposals or initial feasibility studies and will normally be remunerated on a time and

cost basis. The typical services will involve:

(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 design appropriate to allow

decisions on feasibility.

(iv) Consultation with authorities having rights or powers of sanction as well as consultation with the

public and stakeholder groups.

(v) Advice to the client as to regulatory and statutory requirements, including environmental

management and the need for surveys, analyses, tests and site or other investigations, as well as

approvals, where such are required for the completion of the report, and arranging for these to be

carried out at 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 the proposals or feasibility studies.

(viii) Clause (vii) does not normally apply to civil and structural services on Building Projects, where

these services are provided by a Quantity Surveyor, except as far as the interpretation of cost

figures the Engineer’s scope of work is concerned.

Deliverables will typically include:



Collation of information.

Reports on technical and financial feasibility and related implications.

List of consents and approvals.

Schedule of required surveys, tests, analyses, site and other investigations.

Once the

project

has

been

properly

identified

and

its

location,

form,

size

and

function

are

defined,

then

procurement can proceed for normal project services outlined below.

6.2 SCOPE OF SERVICES FOR NORMAL PROJECT DESIGN STAGES

After the Client has established the project definition and requirements, the execution of the assignment can

be separated into six broad Stages. The 6 typical project design stages are shown in the figure below:

Project Design Stages

6 Close Out

5 Construction

4 Documentation and Procurement

3 Design Development

2 Concept & Viability

1 Inception

These individual stages are elaborated upon in more detail below:

Stage 1: Inception ‐ Establish client requirements and preferences, assess user needs and options, appointment

of necessary consultants, establish the project brief including project objectives, priorities, constraints,

assumptions aspirations and strategies

Stage 2: Concept Viability/ Preliminary Design ‐ Prepare and finalise the project concept in accordance with

the brief,

including

project

scope,

scale,

character,

form

and

function,

plus

preliminary

programme

and

viability

of the project)

Stage 3: Design Development/ Detailed Design ‐ Develop the approved concept to finalise the design, outline

specifications, cost plan, financial viability and programme for the project)

Stage 4: Documentation and Procurement ‐ Prepare procurement and construction documentation, confirm

and implement the procurement strategies and procedures for effective and timeous procurement of

necessary resources for execution of the project.



Stage 5: Contract Administration and Inspection ‐ Manage, administer and monitor the construction contracts

and processes including preparation and coordination of procedures and documentation to facilitate practical

completion of the works

Stage 6: Close‐out ‐ Fulfil and complete the project close‐out including necessary documentation to facilitate

effective completion, handover and operation of the project)

More detailed

examples

of

the

scope

of

service

pertinent

to

each

Stage

are

contained

in

Appendix

A.

That

Appendix also shows the typical scope of services associated with carrying out the duties of the Principal

Consultant where it is appropriate to appoint the consulting engineer to carry out these duties.

6.3 THE SCOPE OF WORK

The scope of work is the portion of the works for which the consulting engineer is engaged or the document

that specifies and describes the supplies, services, or engineering and construction works which are to be

provided and any other requirements and constraints relating to the manner in which the contract work is to

be performed.

For example a client wishing to construct a Casino complex consisting of three distinct components being the

Building, a Parking Area and an access road, may appoint a consulting engineer to undertake Stages 3‐6 of the

normal engineering services for the Parking Area. In this case the scope of services can be defined as set out in

Appendix A

while

the

scope

of

work

may

only

involve

the

Parking

Area.

Some

thought

will

have

to

go

into

preparing the scope of work as it interfaces with other works such as stormwater runoff from the building and

the interface with the access road and gate house.

The scope of work for each service provider should be carefully determined to ensure that no overlaps and

duplication in terms of scope of work exist. In some cases the consulting engineer will be required to appoint

specialist sub‐consultants in which case the consulting engineer will ensure that no duplication in terms of

scope occurs.



A few examples of scope of work are provided below for clarity.

6‐1: Examples of Scope of Work

Buildings

The work

in

respect

of

site

boundaries

and

fencing,

foundations,

electrical,

air

conditioning, wet services, fire protection, structural, roofing, waterproofing,

stormwater, etc should be clearly allocated. If the design is to be undertaken by a

multidisciplinary professional team (Architect, Quantity Surveyor, Engineer, etc.) the

responsibilities of the consulting engineer in such a team must be clearly indicated.

Roads The beginning & end of the road should be indicated, whether the scope includes

structures, hydrological analysis and drainage, stormwater, roadside furniture,

pavement layerworks, traffic analyses, selection of borrow pits, road marking, signage

etc. It should also be indicated who will be responsible for liaison with interested and

affected parties and for ensuring public participation.

Structures The scope of work should be clearly indicated in respect of site investigations,

foundations,

interaction

with

other

structures

and

facilities,

design

review,

and

similar.

Electrical 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.

Mechanical Clarify, if air conditioning, wet services, pumps, lifts, escalators, fire protection etc.

are to be performed by one or more specialist engineers.

Dams The Scope of Services and Scope of Work should be described, in detail to enable

tendering consultants to identify the level of accreditation of design staff to be

identified. The Scope of Work should be clear in respect of geological and

hydrological investigations

to

be

undertaken

prior

to

preliminary

and

detail

design,

plus the extent of design to be undertaken by contractors, and likewise the Scope of

Work in the electrical and mechanical disciplines.

Municipal

Services

The Scope of Services and Scope of Work should be clearly described for the

consulting 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 be

designed by others, including the extent of simultaneous working and coordination

required. The extent of construction to be undertaken by emerging contractors or

using labour‐based methods should also be clear.

6.4 IMPORTANT CONSIDERATIONS

The

anticipated

Professional

Services

Providers

Register

to

be

published

by

the

CIDB

will

have

to

be

taken

into

account when compiling the Scope of Services.

The examples of Scope of Services provided in Appendix A, are comprehensive, but generic. Items should be

extracted from the generic scope or modified in each stage of the project in which the Client requires services

to be performed by the Consulting Engineer. These examples also show additional services where the client

requires the Consulting Engineer to perform PA/PM duties in addition to the consulting engineering services

(especially if the Consulting Engineer is the sole consultant). In such cases the selected duties from the PA/PM

scope must be added to those of the Consulting Engineer, for the Consulting Engineer to act as Principal

Consultant in addition to acting as Consulting Engineer.



If it is necessary for the Client’s Scope of Services to be more specific to the discipline(s) of the Consulting

Engineer (e.g. Civil, Structural, Electrical or Mechanical) then suitable items should be added to the generic

scope, either alongside the generic items or in place of them, as appropriate.

In the preparation of the Scope of Services a number of key factors, common to every Scope, need to be borne

in mind and taken into account when framing the tasks required in each Stage:

Table 6‐2:

Key

Factors

in

Developing

Scope

Obligations of

the parties

The tasks required and listed by the Client should clearly all fall within the obligations

of the Consulting Engineer (the successful tenderer). If a listed task falls within the

Client’s obligations 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 obligation and accord with the obligations of the parties as

stated in the intended contract for the services

Health and

Safety

Legislation such as the OHS Act lays down comprehensive actions to be taken by

parties responsible for safety. This includes the Client, who may wish to delegate

specific actions or tasks to the consulting engineer. Where this applies, this should be

reflected in the Scope of Services.

Sustainability Environmentally sustainable design and energy efficiency are becoming a common

underlying requirement in every project, with obligations on the Client and consulting

engineer. The Client’s sustainability policy should be made known to the consulting

engineer, who in turn should be tasked with advising the Client on the project

sustainability and/or assisting to set sustainability targets.

Information

available

The execution of the assignment will be based on information available at its

commencement, which may have to be augmented in order to perform the services

required. It is important that the extent of information available to the consulting

engineer, and information yet to be obtained by him, be clearly identified at the

outset, to avoid any misconceptions. Where the client is unable to define the scope

accurately, for example if the assignment is an investigation or study whose nature

and

extent

are

unknown,

then

it

is

important

to

tell

the

tenderers

what

the

client

has

allowed for, by way of budget or estimate of manhours

In all cases the Scope of Services must reflect the Client’s full intentions and be sufficiently described so as to

enable the tendering Consulting Engineer to identify all the tasks required of him, in a manner which will

enable him to estimate the times to be spent by his personnel allocated to each task and hence to quantify his

tender.

Failure by the Client to prepare the Scope of Services in sufficient detail and with sufficient clarity will cause the

tendering Consulting Engineer to make assumptions and/or misinterpret the Client’s requirements, and price

unnecessarily for risks which could be avoided with a sufficiently detailed scope. Misinterpretation could result

in the consultant pricing too low or too high. Either way, will not be in the interests of the Client, the Consulting

Engineer, or the project.



CHAPTER 7. TENDER DOCUMENTATION

The purpose of this chapter is to guide consulting engineers and clients in the drawing up of documentation for

the procurement

of

consulting

engineering

services

in

line

with

the

principles

and

documentation

of

the

CIDB.

An aim of this guide is to achieve reasonable uniformity in respect of documentation and content in the

interests of a more efficient industry.

7.1 MODEL FOR UNIFORMITY

The Construction Industry Development Board (CIDB) and in particular the SFU, has been in the forefront of

initiatives for uniformity in procurement documentation and the guidelines which follow have drawn on the

recommended sequences and standardised documents contained in the CIDB’s “Construction Procurement

Toolbox”. These items have been adapted to be generic to consulting engineering services and to construction

services and to be relevant to the compiler, be he/she client or consulting engineer.

The procurement of services takes place within the process of offer and acceptance which results in a contract

being

entered

into.

Procurement

documents

provide

tenderers

with

the

necessary

inputs

to

allow

them

to

complete their tender submissions. These submissions are in turn inputs into the contract to be concluded

following acceptance of a tender offer. Uniformity in the documentation is based on the principle that there be

a complete separation in the component documents making up the tender enquiry – namely, conditions of

tender, conditions of contract, specifications or scope and methods of measurement and payment. This allows

for instance, different contract conditions, or also payment conditions to be used without affecting the

remaining component documents.

7.2 GUIDELINES FOR COMPILING THE DOCUMENTATION

A full listing in a standard sequence taken from Section 4 of the SFU is attached as Appendix B. It should be

noted that in all Professional Service provider documentation, quality or functionality should play a prominent

role.

The completion

of

tender

enquiry

documentation

which

is

complete

and

appropriate

to

its

purpose

is

critical

to

the project’s success, in terms of efficiency and cost effectiveness of the procurement process.

It recommended the references below be consulted for further information regarding procurement

documentation:

(i) Standard Professional Services Contract by CIDB, NEC, etc

(ii) Revised Standard for Uniformity in Construction Procurement (SFU)

(iii) CIDB Construction Procurement Best Practice Guideline C3 – Adjudication

(iv) CIDB Professional Services Contract

(v) PROCSA Form of Agreement



CHAPTER 8. VALUE – ADDED SERVICES

The purpose of this chapter is to guide the consulting engineer towards an appropriate and effective method of

determining the Financial Offer to be quoted in his tender.

Through emphasis on clarity of the client’s requirements to be priced for and the “value” to the client of the

services being offered, the consulting engineer will be better equipped to demonstrate when and how

acceptance of his Financial Offer will give the most value to the client.

Clearly, acceptance of the lowest financial offer quoted will deny the client the opportunity of assessing the

value added to the project through other offers.

8.1 THE CONCEPTS OF FINANCIAL OFFER AND QUALITY

In accordance with the Constitution a procurement process shall be Fair, Transparent, Competitive and Cost

effective. Consulting Engineers are accustomed to tendering under competitive conditions with submission of a

tender Financial Offer, but unlike products or goods which are well known and well defined in terms of size and

quality, tendering for delivery of professional services involves intangibles, in form of activities and deliverables

which are specific to the project and need to be carefully described in the Scope of Services and Scope of Work.

Even when this is accepted, the tendency is often for clients to rely on the Financial Offer alone, neglecting

quality (Treasury uses “functionality” and CIDB uses “quality”), and award contracts to the tenderers with the

lowest Financial Offer. Clients need to remember that they are not procuring “products” from consulting

engineers, but “services” to develop or produce a product, in form of the project. Such projects invariably have

costs associated with them which go far beyond the purchase price – such as operating, maintenance, or other

life cycle costs.

The methods which only use the financial offer as a basis for evaluating tenders for professional services is not

appropriate for consulting engineering services as it encourages shortcuts and cannot be used where there are

no clear and binding specifications for the quality of the work to be provided. It inevitably leads to poorer

quality services with resulting higher life cycle costs.

It is also not sufficient to ask for a tender based on a price alone and then to assume that professionals will

deliver a quality

service

because

they

are

“professionals”.

It

is

well

known

that

remuneration

systems

should

reward desirable performance. Therefore, if the desirable performance is a low price then this will be

delivered, but always with a concomitant reduction in quality. Examples of this would be to design a building

by only analysing the most critical elements and copying the result to all less critical elements, or in the case of

a road neither optimising the alignment nor maximising the use of available materials and instead adopting the

simplest alignment from the point of view of design and using only commercially available materials for the

pavement.

If the Scope could be defined accurately and the quality specified for every item in the schedule, such as in a

conventional construction contract, then competition based on price alone will be acceptable. However, this is

difficult to achieve in a request for professional services in the construction industry in view of the

uncertainties associated with the Scope during the project development process.

The tender Financial Offer must therefore reflect a reasonable effort to be expected from the consulting

engineer to optimise all such costs. This is seldom, if ever, reflected in the lowest Financial Offer received for

services as described above. The words quoted by John Ruskin are as relevant today as they were over a

hundred years ago:

“It is unwise to pay too much, but it is worse to pay too little. When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the thing you bought it to do.” To put the matter in perspective, if one considers the total life‐cycle costs of a project as 100%, this will

comprise:

Life-cycle Costs



Engineering costs 1 – 2%

Construction Costs 6 – 18%

Operation and Maintenance 80 – 93%

Note: the Consulting Engineer’s fee can be of the order of 10% of project cost, but this will be less than 2% of

total life‐cycle costs. This 2% can dictate the outcome of 98% of the total costs!

While one

should

not

necessarily

always

accept

the

lowest

Financial

Offer,

accepting

a higher

Financial

Offer

must also has limits. Consider the graph in Fig. 1 below:

Figure 8‐1: Price – Quality Curve

0

2

4

6

8

10

4 5 6 7 8 9 10

Q u a l i t y

Price

A

C

B

There is a direct relationship between Financial Offer and Quality or Effort, but it is not a linear one.

At “A” The pressure on the financial offer with no quality emphasis will generate less engineering effort. This

will result in sub‐optimal designs and higher life‐cycle costs. Put simply, the client “gets what he pays for”.

At “B” the consultant has no constraints whatsoever on his engineering input and this can result in maximum

quality and minimum life‐cycle costs. However the price for this will come at a premium. Note that the graph is

asymptotic towards B, ie significant further increases in financial offer will not render significantly better quality

or

lower

life‐

cycle

costs.

In

other

words,

focus

on

quality

alone

can

result

in

waste.

The optimum position to be targeted is at “C”, where engineering input is not constrained by lowest price

considerations alone, and it is recognised that consideration of quality will allow the tendering consulting

engineer to offer the client the full benefit of his experience, calibre of staff, soundness of methodology,

innovation and enterprise.

In the context therefore of professional consulting engineering services the concept of “financial offer” is

inextricably linked to that of “quality” of the service. Together these aspects determine the “Value” contained

in and around the tender financial offer. Also refer Practice Note 8, version 2, SFU, as clients may wish to make

multidisciplinary appointment.



8.2 THE CONCEPT OF VALUE

Accepting that the procurement of the services is done in a manner which is fair, transparent, competitive and

cost effective, the client or employing authority needs the assurance that the services being procured for the

financial offer tendered will be commercially viable; in other words, the services will add sufficient value to the

intended project

to

justify

the

award

of

a contract

at

the

tendered

Financial

Offer.

This introduces the concept of the “Value” of the services offered in the consulting engineer’s tender, which

has many interpretations in the context of consulting engineering services and can best be expressed as “the

optimum combination of financial offer and quality”. “Value” should:

secure for the client value‐for‐money services,

achieve minimum life cycle costs (i.e. long term value for money) and

should ensure that the project will fulfil its intended purpose.

Adequate opportunity must be given in the procurement process to enable the consulting engineer to show

convincingly that:

value

‐for

‐money

services

are

offered

minimum life cycle costs are critical to the success of the project and

the Financial Offer will demonstrate the value of the inputs which are offered.

In summary, the Client must receive value for the money he will pay, and the consulting engineer must be paid

adequately for the value he will provide

It follows therefore that Value is a factor which should be quantified in the consideration of tenders by clients

and employing authorities. This too is open to various interpretations; however the most straightforward

method to quantify Value is the determination of the Tender Score in terms of Preference, Quality and

Financial Offer being individually assessed and then scored in a manner appropriate to the nature, size, and

complexity of the project. This is described more fully in CHAPTER 9.

8.3 GUIDELINES FOR

PRICING

OF

TENDERS

The success of a project depends at the outset upon the acceptance by the client or employing authority and

the consulting engineer of the Financial Offer tendered and the contractual conditions attached thereto. The

consulting engineer needs to be sure his interests are protected and the client comfortable with the financial

arrangements in the contract. Without these there will be no basis upon which good relations between the

parties – essential for a smooth‐running contract and a successful project – can be built.

This section is devoted to assisting the consulting engineer to realistically and appropriately develop the tender

Financial Offer, while at the same time providing a useful indication to the client of the financial commitments

and risks facing the consulting engineer. For the consulting engineer there are essentially three “golden rules”

to be followed:

8.3.1 Golden Rule No 1 ‐ Know the project requirements

It can safely be stated that in the procurement of consulting engineering services, no two projects are exactly

the same, i.e. each project is unique. Therefore the offer of services to execute the assignment must be tailored

to suit the project. This is where the consulting engineer can demonstrate his understanding of the project

requirements and differentiate his services such that the client can accept his financial offer with confidence

and with knowledge of the value to be added.

Central to understanding the requirements of the project is a clear and unambiguous Scope to be supplied by

the client. These terms must state all the client’s requirements for the project including scope of services,

scope of work, deliverables, standards and constraints. The Scope must be sufficient for the consulting



engineer to identify all the task areas and sub‐tasks required, in order to price realistically for them, with

minimum assumptions, with clear understanding of the risks, and without any omissions.

If the client is using a procurement system based on prequalification and shortlisting of tenderers, a call for

Expressions of Interest will be followed by requesting priced proposals (tenders) from the shortlisted firms.

The prequalification criteria will not be project‐specific and only request details of similar experience and

capacity in order to select pre‐qualified tenderers. Thereafter a request for proposals including a clear scope

will be

issued

for

pricing.

Procedures whereby a client uses a generic set of criteria or blanket functionality requirements to admit

potential tenderers to a standing list or panel and thereafter invite only priced proposals as and when the

Scope can be detailed are also acceptable for smaller, repetitive projects.

The consulting engineer should demonstrate his knowledge of, and familiarity with the project and its

technology, through selection of staff ideally suited to the tasks and by displaying the necessary track record.

Where required, the consulting engineer can also expand upon the value to be added through a write up of

methodology or plan of work indicating innovative techniques, value‐added procedures and optimal use of

resources. It is vital for the consulting engineer to give these aspects close attention, since this is where

evaluation of the tender on grounds of quality will focus. The consulting engineer would be wise to take

carefully the client’s quality evaluation criteria for the project into account, towards maximising his quality

score.

Lastly, if the Scope unclear in any area, the consulting engineer is advised to seek clarity from the client.

Clarification opportunities are frequently given in the tender period, but if not, the rule should be “if in doubt –

ask!”

8.3.2 Golden Rule No 2 ‐ Know your costs involved

The approach most frequently used to determine the financial offer is termed Cost‐Based Pricing. Crucial to

this exercise is a clear understanding of the costs involved. The generation of an accurate manpower schedule

or resources programme is ideal, but it will fail as a basis for financial offer determination if correct costs are

not known. The following items should be considered, in a “zero‐based” budget approach:

For consulting engineers, costs generally comprise two components – Staff Costs, and Company

Overhead. Together these add up to the total costs of operating the firm. Staff Costs must include the

person’s total

remuneration

(“cost

to

company”).

A

multiplier

is

then

applied

to

cater

for

all

Company

Overhead costs, including cost of unproductive (unbillable) time. The value of the multiplier for office‐

based staff, excluding unproductive time, is typically of the order of 2, i.e. total costs = Staff costs x 2.

The overhead multiplier should however be checked at regular intervals within the firm. To these total

costs can then be added a percentage for profit, selected for the tender. The total of these “costs plus

profit” per annum divided by the number of productive billable hours per year will give the chargeable

hourly rate for the person concerned.

Note that office‐based staff usually attracts a higher overhead than site‐based staff.

A useful guide to the value of the multiplier is the historic “cents per hour per hundred Rand of salary”

method recommended to determine hourly based Time Charges by consulting engineers. Depending

on the person’s seniority/responsibility in the firm these ranged from 16.5c, 17.5c to 22 “cents per

hour for

each

R100

or

part

thereof

of

annual

salary

plus

bonus”

of

the

person

(for

the

latest

figures

kindly refer to Clause 4.4 of the ‘Guideline Scope of Services and Tariff of Fees for Persons registered

in terms of the Engineering Profession Act, 2000’ available on the ECSA website at

http://www.ecsa.co.za/documents/20090101_TimebasedFees.pdf). It is emphasised that this is a

comparative guide – there is no substitute for knowing one’s own true costs.

If contract staff, not in‐house, or subconsultants are proposed, their total cost to the company should

be determined plus a markup for administration and profit. Again an hourly rate should be arrived at.



Reimbursable expenses need to be estimated for the above resources, in form of travelling,

accommodation, printing/reproduction, communications and similar costs, based on the tasks

involved, the scheduled manpower and the programme.

The cost of special services such as surveys, investigations and tests should be estimated and itemised,

to be included if necessary in the tender Financial Offer.

It is

important

in

this

phase

to

comply

with

three

key

requirements,

which

at

first

glance

appear

conflicting:

Ensure nothing is omitted,

Offer only what is asked for

Adequately assess the influence of factors beyond one’s control.

For this purpose the tasks can be broken down by:

function (e.g. technical, administrative) or

stage (inception, concept & viability, design development, etc.) or

activity (meetings, design, checking, training,) as best suits the tender.

8.3.3 Golden Rule No 3 ‐ Know the Client’s situation

The consulting engineer who has mastered a knowledge of the project and knowledge of his costs may consider

it irrelevant to “know the client”. In reality this is not so; no two clients can be said to be identical in all respects

– there will be differences in structure, strategies, resources, policies, and procedures for procuring consulting

engineering services.

It is therefore valuable for the consulting engineer to know the client insofar as this can affect the manner in

which he performs his assignment. For example, the following typical aspects within the client’s ambit need to

be considered:

Capability to produce, and adhere to, a clear and sufficient Scope

Ability to fund, or to timeously procure funding for the project

Adequate resources to administer the contract

History of payment of fee invoices on time

Sufficient technical capability for reviews and to grant approvals

Need to be offered training or mentoring

Experience in frequent use of consulting engineering services

Ability to responsibly evaluate and award consulting (and construction) contracts

These aspects can materially influence the level of Financial Offer to be aimed at in the tender concerned and

the consulting engineer tendering will need to make adjustments for items such as the following:

Profit markup

Pricing for

contingencies

or

risk

Pricing for work not called for but necessary, in expectation of not done by client

Pricing for unrealistically tight (or slack) deadlines

Pricing for work assumed, but not confirmed required

Adding a margin in lieu of qualifying the tender

Provision for productivity delays to be expected in executing the work for the client

The aspects above are discussed further below



8.4 PRICE BENCHMARKS

A benchmark is useful for both the Client , who needs to have a yardstick against which to compare all tender

Financial Offers received and so test these against a norm, and also for the Consulting Engineer, who seeks an

indication as to the adequacy of his Financial Offer for the project services. For this purpose it is beneficial to

both parties to use a “benchmark” for evaluating the Financial Offer.

An appropriate

benchmark

is

the

Guideline

Scope

of

Services

and

Tariff

of

Fees

prepared

by

the

Engineering

Council of South Africa (ECSA) and published annually in the Government Gazette. This has for many years

been used to calculate a recommended fee which is equitable in normal circumstances, using a recognised

scope of services in various stages and engineering disciplines.

The fee calculation is based on a percentage of the cost of the project (which is not a ‘ceiling fee’); the lower

the project cost the higher the percentage, and vice versa. Furthermore the ECSA percentage‐based fees can

be adjusted by recommended factors to cater for complexity of the work, for partial services, and for high

material cost relative to engineering effort, e.g. railways and certain types of road. The ECSA recommendations

also include hourly rates for work done on a “Time and Cost” basis, for various levels of engineering

practitioner.

The ECSA benchmark is most effective when determined for the estimated or given cost of the project in

question, to give a “Benchmark/Yardstick Fee”. This can be then further adjusted up or down with a multiplier

to take into account the particular project circumstances as seen by the tendering consulting engineer, and so

give a ”Yardstick Fee” appropriate to the tender Financial Offer being quoted by him.

8.5 BENCHMARK MULTIPLIERS

Typical circumstances for which a multiplier can be used in answering typical circumstantial questions are given

below:

The multiplier should be at the Consulting Engineer’s discretion, say in the range 0.60 to 1.60 as follows:

Multiplier Circumstances

0.6 – 1.0 “favourable” circumstances

1.0 ”normal” or “reasonable” circumstances;

1.0 – 1.6 “negative” circumstances

Typical questions to be asked by the Consulting Engineer are:

Is Scope complete and clear?

Is the client well versed in procuring consulting engineering services?

Does client have adequate resources for competent tender evaluation?

Does the consulting engineer have a record of successful projects with the client?

Can hours be saved from earlier similar work done or previous experience?

Is staff proposed reasonably priced, ideally suited to the project and able to meet the task durations

assumed?

Is

the

consulting

engineer

better

placed

than

most

for

specialist

services?

Is the project location clearly advantageous for the consulting engineer?

Will the risks perceived be easy to manage or be very difficult to handle?

Is the 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 the project start date and duration require tender Financial Offer adjustment, if no provision for

escalation?



By selecting and applying a suitable multiplier for each circumstance, a particular “Adjusted Benchmark” fee

can be determined for each case. The average of the sum of all the particular fees used can give an indication of

the “Yardstick Fee” for the tender being submitted by the consulting engineer.

8.6 THE CONCEPT OF “VALUE BIDDING”

Value Bidding, developed in the USA, represents an unusual treatment of competitive bidding theory which

refocuses the traditional bidding model from fee‐based selection criteria to one with value‐based selection

criteria.

The system uses an established market research methodology, “conjoint analysis”, to establish the probability

of winning, considering client priorities, competitors’ attributes and market conditions. The resulting analytical

model enables engineers to analyse market conditions, client preferences, track competitors, while maximising

the probability of winning, thereby maximising profit and optimising Financial Offer.

The model relies heavily on assumptions and requires a dedicated effort to apply it. Its greatest value probably

lies in pricing consulting services for large and complex projects. A reference on the subject is given at end of this

chapter.

8.7 POINTS TO NOTE

Understanding how

a tender

Financial

Offer

is

made

up

is

of

benefit

to

both

client

and

consulting

engineer.

Clients need to be made aware of the “Value” offered by tenderers in terms of a combination of quality and

Financial Offer.

The definition of Scope of Services which is appropriate for the project and sufficient to tender upon are in the

client’s and consulting engineer interest. If professional assistance is required to achieve this, the engagement

of a consulting engineer by the client is advised.

To submit a fair Financial Offer, the consulting engineer needs to know:

the project

his costs and

the

client.

This applies especially if the Scope is vague in the risks to be assumed.

Prequalification to a consultants’ panel using generic criteria followed by pricing only from panel members will

only ensure value for the client when a proper definition of Scope accompanies the RFP.

The use of a recognised “Benchmark” as a yardstick, against which both client and consulting engineer can

evaluate the Financial Offer, is considered essential. The ECSA recommended guideline fees as gazetted should

be used for this purpose.

There is no such thing as a “discounted fee” – rather a benchmark fee adjusted up or down for various project‐

specific circumstances relating to the scope of services to be offered.

(i) Reference: “Addressing Pricing: Value Bidding for Engineers and Consultants” by C S Sturts and F H

Griffis. Journal

of

Construction

Engineering

and

Management,

ASCE,

June

2005.



CHAPTER 9. EVALUATION OF TENDERS

This chapter sets out recommended steps to be taken in framing enquiry documents suited to evaluation, and

steps to evaluate tenders, with Quality consideration being an essential part of the evaluation process (as taken

from the SFU).

9.1 METHOD

A standardised method for Evaluation of Tenders, again following the CIDB documentation (Table 2, SFU), is

mandatory. The method that is generally appropriate for consulting engineering services is Method 4 that is

outlined below:

Method 4:

Financial

Offer plus

Quality and

Preference

Score Quality, rejecting all offers that fail to score minimum points for quality, stated in Tender Data

Score tender evaluation points for financial offer.

Confirm tenders eligible for preferences claimed and if so score tender evaluation points for

preferencing

Calculate total tender points

Rank tender offers from highest number of tender evaluation points to lowest

Recommend tender with highest tender evaluation points for award unless compelling reasons not

to do so

9.2 EVALUATION CRITERIA

It is essential for the enquiry documents to state clearly the evaluation criteria and scoring systems that will be

used in the tender adjudication process. If the tender document states that a criterion will be used to evaluate

the tenders then clarity must be provided on exactly how that criterion will be adjudicated and weighted

relative to other criteria.

Section 4.4.3 of the SFU, Tender Data, requires the Client to provide information, usually in the Tender Data

section of the documents, on the following items:

The

method

to

be

used

in

evaluation

of

tenders

The weighting between financial offer (W1), quality (W2) and preference (NP)

Quantified descriptions of the preferences, including conditions associated with granting of

preferences, and the manner in which preferences will be scored. It is recommended that clients and

consulting engineers in the construction sector make use of the Construction Scorecard as contained

in the Construction Industry Charter, which was promulgated on 5 June 2009.

Details of the quality criteria and sub‐criteria which are to be evaluated, and the manner in which

quality is to be scored

To ensure a fair, equitable transparent and cost effective procurement system, the:

quality of the outputs or deliverables of the service must satisfy client requirements and expectations

service must

come

with

the

reasonable

skill

and

care

that

is

normally

used

by

professionals

providing

such services and

advice is independent of any affiliation, economic or otherwise, which may cause conflicts between

the service provider’s interests and those of the client.

9.3 RECOMMENDED APPROACH

For Consulting Engineering services, the nature of the project can influence the criteria selected for Quality.

For example, for “Repeat” or Straightforward” projects, the work can probably be carried out by less well

qualified and less experienced staff while quality in terms of cost‐effective design will still be important.



Therefore, the Quality criteria will lean towards the firm’s previous experience and cost effective design

capabilities. In the case of feasibility studies or other projects requiring strategic and complex or innovative

thought processes and designs, the staff qualifications and experience as well as the firms experience and

capacity to undertake the work will all be very important.

Similarly, the weighting of the Quality relative to the Financial Offer may be less for simple projects than for

more complex projects.

It is recommended that all tenders for engineering services contain a minimum number of quality points to

qualify to have the tender evaluated any further and that all tenderers that do not meet the minimum offer be

excluded from further evaluation and informed as such.

Overall, the relationship between Financial Offer and Quality plus Preferences is also dependent on the value of

the project as specified in the Preferential Procurement Framework Act. By way of example, for consulting

assignments valued at less than R500 000 or R1 million, a ratio of 80:20 is mandatory; for higher value

assignments, the mandatory ratio is 90:10.

These aspects are illustrated by means of the tables below which are based on recommendations in the CIDB

publications referenced at end of this chapter concerning Evaluation of Quality in Tender Submissions, but with

certain differences as follows.

The

differences

relate

to

the

Scoring

against

the

Ratings,

Very

Good/

Good/

Satisfactory/

Poor

being

100/90/70/40 by the CIDB, but 100/70/50/0 in this CESA Guide.

This is firstly because the “Poor” rating implies the offer is “unsatisfactory”. The descriptions of “Poor”

also state inter alia “the technical approach and/or methodology is unlikely to satisfy project

objectives or requirements….etc.” On these grounds CESA recommends the tender should not be

awarded the contract because it will not meet the client’s requirements. Hence a zero is used.

Secondly, “Good” and “Satisfactory” mean nearly the same in terms of acceptability, so the rating for

“Good” is decreased from 90 to 70. At the same time this sets “Very Good” at 100 apart from the

other criteria, which is appropriate because this is within the bounds of excellence.

Finally, it is important to note that the actual result of applying the stated weighting of Quality relative

to the Financial Offer also depends on the relative values of the two criteria. For example, if all quality

scoring is

in

a very

narrow

range

of

–

say

–

80

to

85

and

the

financial

scoring

gives

a much

higher

range

of say 50% to 100% then the financial scoring will far outweigh quality even with a high relative

weighting for quality.

Clearly it is essential for reviewers to have had experience in such evaluations. If the necessary resources do

not exist within the client organisation, specialists or other consulting engineers not connected with the tender

should be retained to assist with evaluations.



9.4 PROCEDURE

The first step in the evaluation procedure is to evaluate the score the quality offered by prospective tenderers

using 3 quality reviewers and adjusting these scores if required due to major scoring differences as shown in

Table 9‐6.

The next step is to reject all tenders that do not make the minimum quality score and inform them of this fact

in writing.

The third step is to inform all qualified tenderers of the time and date when the Financial Offers will be opened

and to announce these offers at that meeting.

The next step is to calculate the final evaluation score in line with the CIDB SFU as summarised below for

Method 4 and Option 2 evaluations.

The following definitions and formulas apply:

NEV = Total evaluated score.

Nm = Score for Price.

NQ = Score for Quality.

NP = Score for Preferencing.

W1 = Weight assigned to price.

W2 = Weight assigned to quality.

NP = Score for Preferencing.

And

Nm = W1 * Pm /P where Pm is the lowest price received from qualified tenderers and P is the tender

under consideration. (calculated to 2 decimal places)

NQ = W2 * S/Ms where MS is the maximum possible quality score and S is the quality score for the

tender under

consideration.

This

formula

simplifies

to:

NQ = S if W2 and Ms are the same as suggested in the tables below.

And

NEV = Nm + NQ + NP

Finally rank tender offers from the highest number of tender evaluation points to the lowest and award the

work to the tenderer scoring the highest number of tender evaluation points, unless there are compelling and

justifiable reasons not to do so.

9.5 POINTS TO NOTE

It is recommended that only a few appropriate criteria be selected for judging a consulting engineer to limit

duplication ie select mutually exclusive criteria.

The involvements of women and black persons should not be evaluated in the form of quality in public

contracts. This must be addressed in the preferencing points allocated.

The indicators in Tables below which are used to score tendered offer against Quality criteria illustrate the

attributes of the consulting engineer which will bring enhanced value to the client’s project.

References:

(i) CIDB Best Practice Guideline No. A4, Evaluating Quality in Tender Submissions



(ii) CIDB Inform Practice Note No. 9, Evaluation of Quality in Tender Submissions



9‐2: Quality Criteria and Points Scale ‐ 20 Points for Preference

This table shows an example of Quality Criteria and Points Scale for small projects, using a Quality plus Financial Offer / Preference ratio 80

complex

the

project,

the

higher

the

proportion

of

points

for

Quality.

Also,

of

the

9

Quality

Criteria,

it

is

recommended

that

not

more

than

5type, be selected to avoid double counting from overlap between the 9 criteria. Within the 5 selected criteria, the allocation of points can b

client’s weighting to each criterion, but always totalling the maximum Points for Quality for that project type.

Quality Criteria Feasibility studies

& investigations Innovative Projects

Complex

Projects

Straight‐f

Proje

Maximum Points for BBBEE 20 20 20 20

Maximum points for Quality & Financial Offer 80 80 80 80

Maximum Points for Financial Offer 15 15 20 40

Maximum points for Quality 65 65 60 40

1 Adequacy

of

proposed

work

plan

and

methodology

10

10

10

5

2 Qualifications & Competence of key staff in relation to

the scope of work 20 20 15 10

3 Demonstrated experience (past performance) in

comparable projects 10 10 10 10

4 Approach proposed to attain the employer's stated

objectives 10 10 10

5 Demonstrated experience with respect to specific

aspects of the project 15 15 10

6 Sound knowledge of the employer's policies or work

procedures (or both)

7 QA systems which ensure compliance with employer's

stated requirements 5 5

8 Organisation, logistics and support resources 10

9 Demonstrable managerial ability appropriate to size &

nature of the work



9‐3: Quality Criteria and Points Scale ‐ 10 Points for Preference

This table indicates an example of the Quality Criteria and Points Scale for large projects.. Note the 90:10 Quality plus Price / Preference rat

for

Quality

and

selection

of

Quality

Criteria

are

similar

to

the

above

Table.

Quality Criteria Feasibility studies

& investigations

Innovative

Projects

Complex

Projects

Straight‐fo

Projec

Maximum Points for BBBEE 10 10 10 10

Maximum points for Quality & Price 90 90 90 90

Maximum Points for Price 20 20 20 40

Maximum points for Quality 70 70 70 50

1 Adequacy of proposed work plan and methodology 10 10 10 10

2 Qualifications

&

Competence

of

key

staff

in

relation

to

the scope of work 20

20

20

10

3 Demonstrated experience (past performance) in

comparable projects 20 20 20 10

4 Approach proposed to attain the employer's stated

objectives 10 10

5 Demonstrated experience with respect to specific

aspects of the project 10 10 10

6 Sound knowledge of the employer's policies or work

procedures (or both)

7 QA systems which ensure compliance with employer's

stated requirements

10 10

8 Organisation, logistics and support resources 10

9 Demonstrable managerial ability appropriate to size &

nature of the work



Criteria Rating Scoring Evaluation Indicators

4

Approach proposed

to

attain the employer's

stated objectives

Very Good 100 An innovative approach is presented that illustrates the tendere

be relevant and meet the client's objectives in all aspects

Good

70

The approach

presented

illustrates

that

the

tenderer

will

adopt

a

client's objectives

Satisfactory 50 The tenderer proposes a generic approach that will meet the clie

Poor 0

The approach presented does not meet the client's expectations

objectives of the project being fully realised

5

Demonstrated

experience with respect

to specific aspects of

the

project

Very Good 100 Key staff have outstanding experience in specific aspects of the p

components of the assignment in the SOW

Good 70

Key staff have adequate experience in specific aspects of the pro


Satisfactory 50

Key staff have reasonable experience in specific aspects of the p

components of

the

assignment

in

the

SOW

Poor 0

Key staff have limited experience in specific aspects of the proje


6

Sound knowledge of

the employer's policies

or work procedures (or

both)

Very Good 100 The tenderer has outstanding knowledge of the employer's polic

Good 70 The tenderer has adequate knowledge of the employer's policies

Satisfactory 50 The tenderer has reasonable knowledge of the employer's polici

Poor 0 The tenderer has limited knowledge of the employer's policies a

7

Quality assurance

systems which ensure

compliance with stated

employer's

requirements

Very Good 100 The tenderer is certified to maintain an internationally accepted

Good

70

The tenderer's quality assurance system meets the quality assura

employer for

the

project

Satisfactory 50 The tenderer employs a reasonable quality assurance system

Poor 0 The tenderer does not have a quality assurance system



Criteria Rating Scoring Evaluation Indicators

8

Organisation, logistics

and support resources

Very Good 100 The tenderer convincingly illustrates that extensive organisation

will be available for execution of the project

Good

70

The tenderer

convincingly

illustrates

that

sufficient

organisationa

will be available for execution of the project

Satisfactory 50

The tenderer reasonably well illustrates that sufficient organisat

resources will be available for execution of the project

Poor 0

The tenderer fails to illustrate that sufficient organisational, logis

be available for execution of the project

9

Demonstrable

managerial ability

appropriate

to

the

size

and nature of the work

Very Good 100 The tenderer illustrates extensive knowledge and experience in t

projects of similar size and complexity

Good 70

The tenderer illustrates adequate knowledge and experience in t


Satisfactory 50 The

tenderer

illustrates

reasonable

knowledge

and

experience

in


Poor 0

The tenderer illustrates limited knowledge and experience in the




9‐5: Examples of Qualification and Competence of Key Staff

This refers specifically to the Quality criterion no. 2, “Qualifications and competence of Key Staff (assigned personnel). It is completed by th

and

indicates,

for

six

typical

staff

positions,

the

Preferred

and

Minimum

points

required

for

each

of

six

attributes

of

qualifications

and

expeshown for each project type described in Table 6.6.1 in the example at top of the table.)

Nature of project

Requ’d

for

project

Qualification Years experience

after qualification

Professional

registration

Years experience

after registration

Invo

com

– st

past

Y/N Pref Min O f f e r

Pref Min O f f e r

Pref O f f e r

Pref Min O f f e r

P

P r o j e c t L e a d e r

Feasibility studies

& investigation

Y Deg Deg 15 10 Y 10 7

Innovative

Projects

Y Deg Deg 15 10 Y 10 7

Complex

Projects

Y Deg Tech 10 8 Y 5 3

Straight forward

Projects

Y Deg Tech 8 5 N N/A N/A

Repeat

Projects

Y Deg Tech 5 5 N N/A N/A



Nature of project

Requ’d

for

project


after qualification

Professional

registration

Years experience

after registration

Invo

com

– st

past


Pref Min O f f e r

Pref O f f e r

Pref Min O f f e r

P

D e

s i g n E n g i n e e r

Feasibility studies

& investigation

Innovative

Projects

Complex

Projects

Straight forward

Projects

Repeat

Projects

M a t e r i a l s E n

g i n e e r

Feasibility studies

& investigation

Innovative

Projects

Complex

Projects

Straight forward

Projects

Repeat

Projects



Nature of project

Requ’d

for

project


after qualification

Professional

registration

Years experience

after registration

Invo

com

– st

past


Pref Min O f f e r

Pref O f f e r

Pref Min O f f e r

P

C o n

t r a c t s E n g i n e e r

Feasibility studies

& investigation

Innovative

Projects

Complex

Projects

Straight forward

Projects

Repeat

Projects

R e s i d e n t E n

g i n e e r

Feasibility studies

& investigation

Innovative

Projects

Complex

Projects

Straight forward

Projects

Repeat

Projects



Nature of project

Requ’d

for

project


after qualification

Professional

registration

Years experience

after registration

Invo

com

– st

past


Pref Min O f f e r

Pref O f f e r

Pref Min O f f e r

P

A s s t R

e s i d e n t E n g i n e e r

Feasibility studies

& investigation

Innovative

Projects

Complex

Projects

Straight forward

Projects

Repeat

Projects



CHAPTER 10. PERFORMANCE MONITORING

Since its establishment in 1952, the S.A. Association of Consulting Engineers (today known as Consulting

Engineers South Africa – CESA) has been committed to upholding and advancing the standard of services

offered by its member firms. It is currently a requirement that every member firm shall have its own Quality

Management System

(QMS)

which

complies

with

the

international

standard

for

quality

ISO

9001:

2008.

Many

firms have obtained ISO certification of compliance with the standard, including CESA itself.

To strengthen the integrity of members and combat fraudulent practices in the Construction Sector, CESA has

recently introduced the Business Integrity Management System (BIMS) into its Code of Conduct, to which

members are required to adhere.

Clients and employing authorities frequently wish to know that the performance of consulting engineers

employed by them do indeed meet the CESA standards. CESA encourages the use of a performance evaluation

mechanism by clients as this can indicate to the client whether his choice of consulting engineer was correct.

Some clients maintain a database recording the performance of their consulting engineers, which assists them

in their selection processes. With feedback from the client monitoring the consulting engineer’s performance,

evaluations can enhance the standard of services in the industry in the longer term.

The focus

of

this

chapter

is

on

the

presentation

of

a suggested

standard

evaluation

system,

which

can

be

used

or adapted by clients to monitor a consulting engineer’s performance to meet the objectives above.

10.1 COMMUNICATION AND LIAISON

If the consulting engineer is to provide the client with the standard of service required then it is essential that

there be good and ongoing communication between the parties. This process should begin at the award of the

contract to the successful tendering consulting engineer. At this time the brief to the consulting engineer must

be confirmed by the client, with confirmation of the requirements given in the tender Scope or if these are to

be modified, with negotiation and contractual agreement on the terms of the contract.

The Scope must inter alia include items such as all technical requirements, financial conditions, budget

constraints, programme requirements and approval processes. The consulting engineer is advised to prepare

his

own

list

of

questions

beforehand,

towards

ensuring

a

brief

which

is

complete.

The

need

for

a

comprehensive brief appropriate to the project cannot be overstated – it will form the basis of the working

relationship between the parties and minimise the risk of misunderstandings which can lead to problems or

disputes later.

The client should also advise the consulting engineer of his intention to monitor the latter’s performance. It is

highly likely that the consulting engineer’s own quality management system requires completion by the client

of a “Client’s Satisfaction Questionnaire” during and/or at end of the assignment. In such cases it is desirable

for the parties to collaborate on the framework of the evaluation system so that it meets the requirements of

both parties.

Where the client finds serious or repetitive cases of inadequate performance or transgressions of the CESA

Code of Conduct by a member firm, this should be reported to the Executive Director of CESA who will

investigate the matter and take action against the member if necessary. Alternatively, complaints against

individuals (not

firms)

registered

with

the

Engineering

Council

of

South

Africa

may

be

lodged

by

the

client

with

ECSA.

Clearly, the implementation of a process of regular performance monitoring should avoid the need for such

drastic steps.

10.2 SUGGESTED PERFORMANCE MONITORING AND EVALUATION PROCESS

The process suggested is based on the client’s consideration of key activities by the consulting engineer and

using a scorecard system to evaluate the consulting engineer’s performance.



The scoring system uses categories of evaluation that have been found through research to be important to

clients and uses selected sub‐categories as shown in the table below. Clients could modify or add sub‐

categories to suite their own particular needs, if required and still divided by the total maximum possible score

to come up with a comparable percentage final rating.

10.3 POINTS TO NOTE

Strictly speaking this chapter on monitoring the performance of consulting engineers is not part of the procurement process. It is however relevant to include it as a sequel to procurement, because arising from the

emphasis on quality in the evaluation of tenders submitted by consulting engineers, the monitoring of their

performance will assist to ensure that the highest standards of quality are maintained, with the facility of client

feedback giving ongoing opportunity for improvement in the quality of services.

The recommended methods for monitoring described above thus represent an initiative of CESA – Consulting

Engineers South Africa, delivered in the interests of the procurement of professional services by the client

body.



10‐1: Evaluation Scorecard

Note 1 Consider each element of quality below and rate performance against the criteria listed. Intermediate scores ca

2 Circle the scores selected and add them together. Calculate an overall Percentage Score by multiplying the Tota

100/1170 or by 100/ 1440 if Section 6 is applicable

Item Description

Merit Rating

Very

Poor Improvement

required Satisfactory/

Good

1

Quality of Design

1.1 Creativity/ Innovation and Appropriateness/

Environmental issues 10 30 50

1.2 Understanding Client & Legal Requirements 10 30 50

1.3 Documentation and Drawings 10 30 50

2

Adherence to Time Constraints

2.1 Completion of Work Stages 10 30 50

2.2 Response to Queries 10 30 50

3

Recognition of Cost

3.1

In Designs

10

30

50

3.2 Protecting Client Interests 10 30 50

4

Project Administration

4.1 Record Keeping 10 30 50

4.2 Legal and Financial 10 30 50

4.3 Programme 10 30 50

5

Communication and Interfaces

5.1 Jurisdictions 10 30 50

5.2 Client, other Consultants and Contractors 10 30 50

5.3 Managing Investigations, Monitoring & Testing 10 30 50

6

Construction and Post‐Construction

6.1

Monitoring

during

construction

10

30

50

6.2 Documentation and ‘As‐Built Drawings’ 10 30 50

6.3 Oversight during maintenance period 10 30 50

TOTAL SCORE

PERCENT SCORE (Total Score x 100/1170 or 100/1440)



APPENDIX A

EXAMPLE SCOPE OF SERVICES



STAGES TYPICALLY INCLUDED AS NORMAL SERVICESDURING THE EXECUTION OF A PROJECT

STAGE 1. Inception

Establish

client

requirements

and

preferences,

assess

user

needs

and

options,

appointment

of

necessary

consultants, establish the project brief including project objectives, priorities, constraints, assumptions

aspirations and strategies

Typical activities Typical deliverables

(i) Assist in developing a clear project brief

(ii) Attend project initiation meetings

(iii) Advise on procurement policy for the project

(iv) Advise on the rights, constraints, consents and

approvals

(v) Define the scope of services and scope of work

required

(vi) Conclude the terms of the agreement with the client.

(vii) Inspect the site and advise on the necessary surveys,

analyses, tests and site or other investigations where

such information will be required for Stage 2 including

the availability and location of infrastructure and

services

(viii) Determine the availability of data, drawings and plans

relating to the project

(ix) Advise on criteria that could influence the project life

cycle cost

significantly

(financial

design

criteria)

(x) Provide necessary information within the agreed scope

of the project to other consultants involved

• Agreed scope of services and scope of

work

• Signed agreement

• Report on project, site and functional

requirements

• Schedule of required surveys, tests,

analyses, site and other investigations

• Schedule of consents and approvals



STAGE 2. Concept and Viability / Preliminary Design

Prepare and finalise the project concept in accordance with the brief, including project scope, scale, character, form

and function, plus preliminary programme and viability of the project)


(i) Agree documentation programme with principal

consultant and other consultants involved

(ii) Attend design and consultants’ meetings

(iii) Establish the concept design criteria

(iv) Prepare initial concept design and related documentation

(v) Advise the client regarding further surveys, analyses, tests

and investigations which may be required Establish

regulatory authorities’ requirements and incorporate into

the design

(vi) Refine and

assess

the

concept

design

to

ensure

conformance with all regulatory requirements and

consents

(vii) Establish access, utilities, services and connections

required for the design

(viii) Coordinate design interfaces with other consultants

involved

(ix) Prepare process designs (where required), preliminary

designs, and related documentation for approval by

authorities and client and suitable for costing

(x) Provide

cost

estimates

and

life

cycle

costs

as

required

(xi) Liaise, co‐operate and provide necessary information to

the client, principal consultant and other consultants

involved

• Concept design

• Schedule of required surveys, tests and other

investigations and related reports

• Schedule of required surveys, tests and other

investigations and related reports

• Process design

• Preliminary design

• Cost estimates as required

Note:

In the event that the consultant, who undertakes Stage 1 or Stages 1 & 2, is not appointed for the remaining

Stages, the deliverables emanating from Stages 1 & 2 should be made available to the consultant appointed

to undertake the remaining Stages.



STAGE 3. Design Development / Detail Design

Develop the approved concept to finalise the design, outline specifications, cost plan, financial viability and

programme for the project)


(i) Review documentation programme with principal

consultant and

other

consultants

involved

(ii) Attend design and consultants’ meetings

(iii) Incorporate client’s and authorities’ detailed

requirements into the design

(iv) Incorporate other consultant’s designs and requirements

into the design

(v) Prepare design development drawings including draft

technical details and specifications

(vi) Review and evaluate design and outline specification and

exercise cost control

(vii) Prepare detailed estimates of construction cost

(viii) Liaise, co‐operate and provide necessary information to

the principal consultant and other consultants involved.

(ix) Submit the necessary design documentation to local and

other authorities for approval

• Design development drawings

•

Outline specifications

• Local and other authority submission

drawings and reports

• Detailed estimates of construction costs



STAGE 4. Documentation and Procurement

Prepare procurement and construction documentation, confirm and implement the procurement strategies

and procedures for effective and timeous procurement of necessary resources for execution of the project.


(i) Attend design

and

consultants’

meetings

(ii) Prepare specifications and preambles for the works

(iii) Accommodate services design

(iv) Check cost estimates and adjust designs and

documents if necessary to remain within budget

(v) Formulate the procurement strategy for contractors or

assist the principal consultant where relevant

(vi) Prepare documentation for contractor procurement

(vii) Review designs, drawings and schedules for

compliance

with

approved

budget

(viii) Assist in calling for tenders and/or negotiation of

prices and/or assist the principal consultant where

relevant

(ix) Liaise, co‐operate and provide necessary information

to the principal consultant and the other consultants

as required

(x) Assist in the evaluation of tenders

(xi) Assist with the preparation of contract documentation

for signature

(xii) Assess samples and products for compliance and

design intent

•

Specifications

• Services co‐ordination

• Working drawings.

• Budget construction cost

• Tender documentation

• Tender evaluation report

• Tender recommendations

• Priced contract documentation



STAGE 5. Contract Administration and Inspection

Manage, administer and monitor the construction contracts and processes including preparation and coordination

of procedures and documentation to facilitate practical completion of the works


(i) Attend site handover

(ii) Issue construction documentation in accordance with the

documentation schedule including, in the case of

structural engineering, reinforcing bending schedules and

detailing and specifications of structural steel sections

and connections

(iii) Carry out contract administration procedures in terms of

the contract

(iv) Prepare schedules of predicted cash flow

(v) Prepare pro

‐active

estimates

of

proposed

variations

for

client decision making

(vi) Attend regular site, technical and progress meetings

(vii) Inspect works for conformity to contract documentation

(viii) Adjudicate and resolve financial claims by contractor(s)

(ix) Assist in the resolution of contractual claims by the

contractor

(x) Establish and maintain a financial control system.

(xi) Clarify details and descriptions during construction as

required

(xii) Prepare valuations for payment certificates to be issued

by the principal agent

(xiii) Witness and review of all tests and mock ups carried out

both on and off site

(xiv) Witness and review of all tests and mock ups carried out

both on and off site

(xv) Check and approve contractor drawings for design intent

(xvi) Update and issue drawings register.

(xvii) Issue contract instructions as and when required

(xviii) Review and

comment

on

operation

and

maintenance

manuals, guarantee certificates and warranties

(xix) Inspect the works and issue practical completion and

defects lists

(xx) Assist in obtaining statutory certificates

• Schedules of predicted cash flow

• Construction documentation

• Drawing register

• Estimates for proposed variations

• Contract instructions

• Financial control reports

• Valuations for payment certificates

• Progressive and draft final account(s)

• Practical completion and defects list

• Electrical Certificate of Compliance

• Where a quantity surveyor is included in the

project team in building works, activities (iv),

(v), (viii),

(x)

and

(xii)

and

related

deliverables

will not be required from the engineer.



STAGE 6. Close‐Out

Fulfil and complete the project close‐out including necessary documentation to facilitate effective completion,

handover and operation of the project)


(i) Inspect and verify the rectification of defects

(ii) Receive, comment and approve relevant payment

valuations and completion certificates

(iii) Prepare and/ or procure operations and maintenance

manuals, guarantees and warranties

(iv) Prepare and/ or procure as‐built drawings and

documentation

(v) Conclude the final accounts where relevant.

• Valuations for payment certificates

• Works and final completion lists

• Operations and maintenance manuals,

guarantees and warranties

• Operations and maintenance manuals,

guarantees and warranties

• As‐built drawings and documentation

• Final accounts



ADDITIONAL SERVICES AS PRINCIPAL CONSULTANT

The Consulting Engineer generally has the resources and capability to act as Principal Consultant to the Client

in addition to the consulting engineering function and is frequently appointed as such. In such a case some

or all of the following services will need to be added.

STAGE 1. Inception as Principal Consultant


(v) Assist in developing a clear project brief.

(vi) Attend project initiation meetings.

(vii) Advise on procurement policy for the project.

(viii) Advise on the rights, constraints, consents and approval

(ix) Define the scope of services and scope work required.

(x) Conclude the terms of the agreement with the client.

(xi) Advise on the necessary surveys, analyses, tests and site

or other

investigations

where

such

information

will

be

required for Stage 2 including the availability and location

of infrastructure and services

(xii) Determine the extent of information, data, drawings and

plans relating to the project available at commencement

(xiii) Provide necessary information within the agreed scope of

the project to the other consultants

• Project brief

• Agreed scope of work

• Agreed services

• Project procurement policy

• Signed agreements

• Integrated schedule of consents and

approvals

• Project initiation programme

• Record of all meetings



STAGE 2. Stage 2 ‐ Concept and Viability as Principal Consultant


(i) Assist the client in the procurement of the other

consultants

(ii) Advise the

client

on

the

requirement

to

appoint

a health

and safety consultant

(iii) Communicate the project brief to the other consultants

and monitor the development of the concept and viability

(iv) Agree the format and procedures for cost control and

reporting by the other consultants

(v) Prepare a documentation and indicative construction

programme

(vi) Co‐ordinate the concept and viability documentation for

presentation to the client for approval

(vii) Facilitate the

approval

of

the

concept

and

viability

by

the

client

(viii) Facilitate the approval of the concept and viability by

statutory authorities

• Signed consultant/client agreements

• Indicative project documentation and

construction programme

• Approval by

client

to

proceed

to

Stage

3

STAGE 3. Design Development as Principal Consultant


(i) Agree and implement communication processes and

procedures for the design development of the project

(ii) Assist the

client

in

the

procurement

of

the

necessary

other consultants including the clear definition of their

roles and responsibilities

(iii) Prepare, co‐ordinate, agree and monitor a detailed design

and documentation programme

(iv) Conduct and record consultants’ and management

meetings

(v) Facilitate input required by the health and safety

consultant

(vi) Facilitate design reviews for compliance and cost control

(vii) Facilitate timeous

technical

co

‐ordination

(viii) Facilitate client approval of all Stage 3 documentation

• Additional signed client/ consultant

agreements

• Detailed design & documentation programme

• Record of

all

meetings

• Approval by client to proceed to Stage 4



STAGE 4. Tender Documentation and Construction Procurement as Principal Consultant


(i) Recommend and agree the procurement strategy for

contractors, subcontractors and suppliers with the client

and other

consultants

(ii) Prepare and agree the project procurement programme

(iii) Advise the client, in conjunction with the other

consultants on the appropriate insurances

(iv) Co‐ordinate and monitor the preparation of the

procurement documentation by the consultants in

accordance with the project procurement programme

(v) Manage the procurement process and recommended

contractors for approval by the client

(vi) Agree the format and procedures for monitoring and

control by

the

cost

consultants

of

the

cost

of

the

works

(vii) Co‐ordinate and assemble contract documentation for

signature

• The procurement strategy

• Procurement programme

• Tender/contract conditions

• Record of

all

meetings

• Obtain approval by client of tender

recommendation(s)

• Contract documentation for signature



STAGE 5. Contract Administration and Inspection as Principal Consultant


(i) Arrange the site handover to the contractor

(ii) Establish the

construction

documentation

issue

process

(iii) Agree and monitor the issue and distribution of

construction documentation

(iv) Instruct the contractor on behalf of the client to

(v) appoint subcontractors

(vi) Conduct and record regular site meetings

(vii) Monitor, review and approve the preparation of the

construction programme by the contractor

(viii) Regularly monitor the performance of the contractor

against

the

construction

programme

(ix) Adjudicate entitlements that arise from changes required

to the construction programme

(x) Receive, co‐ordinate and monitor approval of all contract

documentation provided by the contractor(s)

(xi) Agree the quality assurance procedures and monitor the

implementation thereof by the other consultants and

contractors

(xii) Monitor the preparation and auditing of the contractor’s

health and safety plan and approval thereof by the health

and safety consultant

(xiii) Monitor the preparation of the environmental

management plan by the environment consultant

(xiv) Establish procedures for monitoring scope and cost

variations

(xv) Monitor, review, approve and issue certificates.

(xvi) Receive, review and adjudicate any contractual claims

(xvii) Monitor the preparation of financial control reports by

other consultants

(xviii) Prepare and submit progress reports

(xix) Facilitate and

expedite

occupation

certificates

(xx) Coordinate, monitor and issue the practical completion

lists and the certificate of practical completion

• Signed contracts

• Approved construction programme

• Approved contractual

claims

• Construction documentation schedule

• Payment certificates

• Progress reports

• Record of meetings

• Certificate(s) of practical completion



STAGE 6. Close out as Principal Consultant


(i) Co‐ordinate and monitor the rectification of defects

(ii) Manage the

procurement

of

operations

and

maintenance manuals, guarantees and warranties.

(iii) Manage the preparation as‐built drawings and

documentation

(iv) Manage the procurement of outstanding statutory

certificates

(v) Monitor, review and issue payment certificates

(vi) Issue the completion certificates

(vii) Manage the agreement of the final accounts

(viii) Prepare

and

present

the

project

closeout

report

• Completion certificates

• Record of necessary meetings

• Project closeout

report



APPENDIX B

CIDB TABLES TO ASSIST COMPILING TENDER DOCUMENTS



Table B‐1: Documents Relating to the Tender

T1 Tendering procedures

T1.1 Tender Notice and

invitation to Tender

Alerts tenderers to the nature of services required by the client; should

contain sufficient information to enable an appropriate response.

T1.2

Tender

Data

States

applicable

conditions

of

tender

and

establishes

the

rules

applying

from the time tenders are invited to the time a tender is awarded.

T2. Returnable documents

T2.1 List of Returnable

documents

Ensures that everything the client requires a tenderer to submit with his

tender is included in his tender submission.

T2.2 Returnable

Schedules

Contains documents the tenderer is requested to complete for the purpose

of evaluating tenders and other schedules which upon acceptance become

part of the subsequent contract.

Table B‐2: Documents relating to the Form of Agreement

C1.

Agreements

and

Contract

Data

C1.1 Form of Offer and

Acceptance

Formalises the legal process of offer and acceptance

C1.2 Contract Data States applicable conditions of contract and associated contract specific

data, which collectively describe the risks, liabilities and obligations of the

contracting parties and the procedures for administration of the contract.

For consulting engineering services this would be an Agreement, as opposed

to General Conditions of Contract used for construction services.

C2. Pricing Data

C2.1 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 Schedule

or Schedule of Tasks

Records the Financial Offers to provide the services, which are described

elsewhere ‐ in the Scope section.

C3. Scope of Services and Scope of Work

C4. Site Information

This is generally not required in procurement of consulting engineering services, being applicable to

construction services contracts only. However to ensure uniformity in tendering, available information

on prior studies, existing services etc should be included.

Note: For ease of identification of the various sections each section should be colour coded with different

coloured pages or separated with coloured paper as suggested by SANS 10403 (see tables below).



T1.1 ‐ Tender Notice & Invitation to Tender ‐ White forms

This is a statement alerting tenderers to the request for proposals which should include the closing

date and delivery address for tenders as set by the client as well as any other references or markings to

identify the tender.

It should

be

in

a form

which

can

be

published

as

an

advertisement

to

tenderers.

Note that the Public and Municipal Finance Management Acts require minimum periods between

advertising and closing dates.

T1.2 ‐ Tender Data ‐ Pink forms

This establishes the rules to apply from the time tenders are invited to when they are awarded. The

rules:

• bind client and tenderer to behave in a certain manner

• include requirements for a compliant tender,

• require provision of feedback on the outcomes of the process.

• state the

tendering

procedures

to

be

observed

• state documentation to be submitted with tenders

• indicate how the client will conduct the process of evaluating tenders

• indicate that tender offers may only be evaluated in accordance with the evaluation criteria

stipulated in the procurement documents.

For consulting engineering services Quality criteria used in evaluation of tender offers should form an

integral part of the tender offer and hence the outcome of the procurement.

T2.1 ‐ List of Returnable Documents ‐ Yellow forms

This List is to ensure that everything the client requires a tenderer to submit with his tender is

included. It

indicates

exactly

what

is

wanted

and

is

useful

in

determining

at

the

outset

if a tender

is

responsive to the client’s requirements.

It is costly and time consuming to prepare tenders; therefore only information which is essential for

evaluation purposes of the tender concerned should be listed. It is always possible to obtain further

information from short‐listed tenderers.

T2.2 ‐ Returnable Schedules ‐ Yellow forms

This section must contain documents which the tenderer must complete for the evaluation of tenders

and other schedules which upon acceptance become part of the subsequent contract. The Municipal

Finance Management Act specifically requires particulars concerning company details, tax clearance,

and disclosure relating to individuals connected with the tenderer being in service of the state.

The inclusion of the CIDB‘s Compulsory Enterprise Questionnaire will enable these and other legal

requirements to

be

satisfied.

C1.1 ‐ Form of Offer and Acceptance ‐ Yellow forms

This formalises the legal process of offer and acceptance and contains

• firstly the offer to provide the services for a Financial Offer,

• secondly the Client’s acceptance, thus creating a contract, and



• thirdly a schedule of deviations recording changes agreed between receipt of offer and award

of contract.

The CIDB’s Standard for Uniformity in Construction Procurement provides wording for the Form of

Offer and Acceptance to be used with the schedule of deviations. This schedule serves as a record of

the outcomes of any negotiations between offer and acceptance. Note this applies only to deviations

from the tender documents as issued by the client prior to closing date.

A tenderer’s covering letter should not be included, but any matter in such letter constituting a

deviation and

the

subject

of

agreement

reached

during

the

offer/acceptance

process,

should

be

included, and any other matter arising from the process which is agreed by the parties as being an

obligation of the contract, must be included.

The start date of the contract should be identified in this section, but this must be aligned with the

contract start date defined in the Agreement, see Section C.1.2

C.1.2 ‐ Contract Data ‐ Yellow forms

Reference must be made here to the contract conditions in the Agreement applying to the services

being procured. This should preferably be one of the standard industry agreements applicable to

consulting engineering services, such as published by Consulting Engineers South Africa (CESA) or

FIDIC, or the NEC.

Note that for consulting engineering services in South Africa, the CIDB Standard Professional Services

Contract may

also

be

employed.

Note

also

that

if a standard

form

of

agreement

is

used

it

may

be

referenced, and need not be included in the contract documents.

The Contract Data must :

• Identify applicable standard of contract plus all contract‐specific variables appendices etc.

• be divided into two parts – Data provided by client and Data by the consulting engineer (if

required)

• not provide for variations and additions which change the intended usage of the identified

standard form of contract

• provide for Financial Offer adjustments (usually if the contract period exceeds one year)

• include interest on monies due to the consulting engineer, to deter late payment.

• where payment is on a basis of time + cost, or cost + a fee, include mechanisms to allow audit

of costs and Financial Offers

• allow realistic delivery periods and time frames for completing the work

• provide for cost‐effective dispute resolution procedures, preferably through mediation,

adjudication, or arbitration (with litigation as a last resort) The procedures advocated by the

CIDB in its Construction Procurement Best Practices, or in the standard contract conditions of

the bodies above, should be referred to in this regard.

C1.3 ‐ Form of Guarantee/ Securities ‐ White forms

For consulting engineering services a guarantee should not normally be required since the client’s

interests can

be

protected

by

the

Professional

Indemnity

Insurance

policy

of

the

consulting

engineer.

The client may however state the minimum level of professional indemnity insurance cover to be

provided by the consulting engineer for the project in question.



C1.4 ‐ Adjudicator’s Contract – White forms

Dispute resolution by means of Adjudication is most frequently applied in construction contracts but

Adjudication can be used in procurement of consulting engineering services, particularly for large,

complex or multidiscipline assignments.

The adjudicator is appointed by both parties, who share the costs of adjudication, therefore the

Adjudicator’s

contract

should

be

included

in

the

contract

document

between

client

and

consulting

engineer. Adjudication can be done by an individual, or a single or three person Dispute Adjudication

Board (DAB).

The formalities for appointing the Adjudicator or DAB should if possible be completed when the

contract is signed. The actual appointment of the person(s) should preferably be done at start of the

contract, for adjudication to be most effective, as opposed to waiting until a dispute manifests itself,

then having to develop the contract and agree whom to appoint.

Typical forms of contract for the Adjudicator are to be found in CIDB Practice Guide No. C3, or in the

documentation issued by the SAICE (GCC), FIDIC, JBCC, or NEC.

C.2.1 ‐ Pricing Data/ Instructions ‐ Yellow forms

The pricing data contains the pricing assumptions describing the criteria and assumptions which the

tenderer

has

used

in

developing

his

Financial

Offers.

The CIDB Standard Conditions of Tender address issues such as Taxes in rates, VAT, currencies, non‐

erasable ink and correction of arithmetic errors.

For consulting engineering services the above requirements apply in principle; Pricing Data is defined

in the CIDB Standard Professional Services Contract as data that establishes criteria and assumptions

taken into account when developing the Contract Price and the record of the components that make

up the Contract Price.

Other Professional Services Contracts provide for payment mechanisms according to the risk allocation

options adopted by the client. For instance the NEC 3 Professional Services Contract allows risk

allocation Options A, C, E, and G and the compiler is referred to the guidance notes and flow charts

which accompany the NEC3 PSC for details.

The Councils for the various built environment professions are empowered through legislation to

publish annually

in

the

Gazette,

after

consultation,

guideline

professional

fees.

For

consulting

engineering services there are two documents of reference – the Guideline Scope of Services and Tariff

of Fees for persons registered in terms of the Engineering Profession Act, 2000, and the Indicative Time

Based Fee Rates.

In the context of tendering, consulting engineers are not bound by the gazetted fees and are free to

Financial Offer for their services as they deem fit. The gazetted fees are nonetheless referred to, in

order to provide a benchmark against which to compare tender Financial Offers received and to gauge

the ”Value” of the Financial Offers..

C2.2 ‐ Activity/Work Schedule ‐ Yellow forms

For consulting engineering services this is generally in the form of activity schedules or schedules of

tasks to be undertaken in each Stage of the assignment. The pricing data must reflect the selected

pricing strategies.

Commonly

accounted

strategies

as

described

in

the

CIDB’s

Compiler

guidance

notes

of the Construction Procurement Toolbox can be used as a guide.



C3 ‐ Scope of Services/ Scope of Work ‐ Blue forms

As stated above, “Scope of Services” describes the types of services to be provided by a consulting

engineer responsible for design and/or construction monitoring of the project being constructed.

Where “Scope of Work” is used in context of consulting engineering services, this applies to the

manner and extent to which the services are applied to the project in question.

The

Scope

of

Services

to

be

provided

by

a

consulting

engineer

is

described

in

detail

in

Chapter

3

of

these Guidance Notes. This is based on nationally recognised stages of planning, design and

construction of the project, with listing of key tasks required of the consulting engineer both as design

professional and additionally as principal consultant of the client. For both cases, typical deliverables

are also listed (also refer Section 4.4.7 of the SFU)

C4 ‐ Site Information ‐ Green forms

This section is used for engineering and construction works contracts only, and is compiled specifically

for the project. Consequently it is not dealt with here (however to ensure uniformity in tendering,

available information on prior studies, existing services etc should be included).

100119 - Guide - Procurement of Consulting Eng Services in Construction Industry - Jan 2010

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Transcript of 100119 - Guide - Procurement of Consulting Eng Services in Construction Industry - Jan 2010