Implementation of PEC Standard Bidding/Contract Documents:

Introduction

Transparent bidding, evaluation, awards and execution of construction and consultancy contracts are dependent on bidding/contract documents prepared on just and equitable basis for stakeholders. Presently various Government departments, autonomous bodies etc. prepare their documents with the help of limited expertise available with them. Such documents are either one sided or fail to adequately safeguard public interest. Further, lack of uniformity in preparation of the documentation among various departments creates confusion for contractors/suppliers and leads to many malpractices and contractual disputes, resulting in high cost of construction.

Background

During 1989, Government of Pakistan desired that large contracts already awarded be reviewed and a mechanism evolved to improve the present system. Accordingly ECC of the Cabinet, after deliberation on a Summary dated 15th January, 1989, prepared by Finance Division, decided to constitute a Committee headed by Mr. A.G.N. Kazi, Deputy Chairman, Planning Commission to review the existing rules and procedures for award of large contracts and to suggest measures to prevent malpractices. The Committee prepared the report which was placed before the ECC on 22nd November, 1990 and was adopted with some modifications. One of its recommendations was to accelerate the work of reviewing the standard form of contract & supporting documents etc. by the committee headed by Secretary, Law & Justice.

Pakistan Engineering Council being the statutory regulatory body to regulate the engineering profession in Pakistan, was already involved in the exercise of preparation of standard documents through a Committee comprising relevant departments, agencies, consulting engineers and construction companies. As a consequence and receiving impetus from the decision of ECC, after extensive deliberations by the said Committee, a document namely, "PEC Standard Conditions of Contract" was formulated in 1992 which was in line with the findings/suggestions of AGN Kazi report.

Also in pursuance of a petition submitted to the President of Pakistan by the Chairman Contractors Association of Pakistan, a Committee headed by Deputy Chairman, Planning Commission was set up to probe into the problems of Construction Industry.

The terms of reference of the Committee were to review the document entitled Pakistan Standard Conditions of Contract prepared by Pakistan Engineering Council and the ECNEC Committee’s Report on the Impact of Measures taken in 1992 on Construction Industry.

The Committee submitted its report on 24th October, 1996 and adopted with some modifications/amendments Pakistan Standard Conditions of Contract as the Standard format for all departments involved in the execution of development works/projects in the country. These modifications/amendments were duly incorporated. However, inspite of various efforts launched by PEC, the said document could not be notified by the GoP for adoption by all government departments.

Development of Standard Documents

Later on PEC updated the said document by incorporating Instructions to Bidders and various Forms to make it a complete bidding document and renamed it as, "Standard Form of Bidding Document (Civil Works)". In addition, PEC also prepared other documents and has completed and updated a set of six documents (title with salient features follow) so far, involving all major stakeholders.

(1) STANDARD FORM OF BIDDING DOCUMENTS (Civil Works)
(to be used for construction contract over Rs. 25 Millions)

• Instructions to Users of the document guide step by step to fill in the gaps and make the document project specific.
• Invitation to Tenderers
• Instructions to Tenderers
• Used FIDIC Conditions of Contract (Part-I)
• PEC varied some FIDIC provisions mandatory for users (Part-IIA)
• Provisions kept for further changes by the user in Part-IIB.
• Escalation Formula as Approved by the GOP.
• Arbitration Provisions under the Arbitration Act 1940.
• Tendering Data to provide specific information. This will facilitate not making any changes in Instructions to Tenderers.
• Tender and Appendices provide formats and instructions to fill data such as Bill of Quantities, proposed Construction Schedule etc.
• Various Forms such as Tender Security, Performance Guarantee etc.
• Formats for complete bidding documents with the index for Specifications, Technical Provisions and Drawings to remind the user need of components to complete the documents.

(2) STANDARD FORM OF TENDER DOCUMENTS FOR PROCUREMENT OF WORKS (Electrical & Mechanical)
(to be used for E&M procurement contract over Rs. 25 Millions)

• Instructions to Users of the document guide step by step to fill up the gaps and make the document project specific.
• Invitation to Tenderers Instructions to Tenderers contains instructions to user in parenthesis where data is to be provided.
• Forms of Tender & Schedules to Tender.
• Schedule of Prices, generalized format.
• Provision to award Domestic Preference according to directive by GoP.
• Preamble to Conditions of Contract summarised need of specific data in the Contract.
• FIDIC General Conditions of Contract used.
• PEC varied GCC in Special Conditions of Contract which can not be altered.
• User (Employer) may vary Condition of Contract for special conditions of the project in Particular Conditions of Contract.
• Various Forms such as Tender Security, Performance Guarantee etc.
• Arbitration Provisions under the Arbitration Act 1940.
• Formats for complete bidding documents with the index for Specifications, Technical Provisions and Drawings to remind the user need of components to complete the documents.

(3) STANDARD FORM OF TENDER DOCUMENTS FOR PROCUREMENT OF WORKS (For Smaller Contracts)
(to be used for all type of procurement below Rs. 25 Millions)

(4) STANDARD FORM OF CONTRACT FOR ENGINEERING CONSULTANCY SERVICES (For Large Projects) – TIME BASED ASSIGNMENTS
(to be used for consultancy fee above Rs. 2 Millions)

(5) STANDARD FORM OF CONTRACT FOR ENGINEERING CONSULTANCY SERVICES (For Large Projects) – LUMP SUM ASSIGNMENTS
(to be used for consultancy fee above Rs. 2 Millions)

(6) STANDARD FORM OF CONTRACT FOR ENGINEERING CONSULTANCY SERVICES (For Smaller Projects)
(to be used for consultancy fee less than Rs. 2 Millions)