http://www.eib.org/epec/g2g/iii-procurement/index.

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Procurement notice
Publication of the public procurement notice marks the start of the formal procurement process. The
Authority must comply with all requirements related to the publication of notices in the Official Journal
of the European Union (OJEU). It is good practice to also publish the procurement notice in one or
more international periodicals. The OJEU notice is followed by a questionnaire to enable interested
companies to demonstrate their qualifications (also known as the submission of an expression of
interest).

Prequalification
The wording of the brief project description contained in the OJEU notice should be broad enough for it
not to need to be subsequently changed (which might then require the procurement process to start
all over again). The purpose of prequalification is to include only those bidders that appear to be
capable of carrying out the PPP project in an adequate manner.
Typically, interested parties that respond to an initial notice are sent a short statement of information
about the project and instructions or a questionnaire. These form the basis of a qualification
submission that such parties must make to demonstrate their ability to implement the project.
The invitation to prequalify (or prequalification questionnaire, as it may be called) should contain at
least the following:

the broader context of the project;

an overview of the project, including the intended allocation of major risks and envisaged
responsibilities of each party;

a list and summary of the major studies that will be made available to bidders concerning
the project;

the intended procurement process;

the qualifications that companies can put forward (e.g. parent or subsidiary companies
qualifications);

the criteria and tests that will be used to evaluate the prequalification statement (but not
necessarily the precise details to be used in any scoring or ranking since that could lead to
some manipulation by the candidates); and

a timetable.

It is standard practice for the Authoritys legal advisers to draft both the PPP procurement notice and
the prequalification questionnaire.

Pre-qualification is a process whereby a loan officer takes information from a borrower and makes
a tentative assessment of how much the lending institution is willing to lend them.

Shortlisting
The purpose of shortlisting is to reduce the number of bidders to generally between three and five.
Bidding for a PPP project, especially a complex one, is a costly undertaking for a bidder. Evaluating
bids is also a time-consuming exercise for the Authority and its advisers. The aim of the bidding
process is to maximize competition, not the number of bidders. Just as the presence of too few
bidders results in poor competition, the presence of too many bidders on the shortlist may reduce the
interest of some in participating and cause good bidders to drop out.
In some cases the public sector has sought to encourage candidates to bid by agreeing in advance to
make a payment to each losing bidder that would partially reimburse it for the costs of bid
preparation. Such payment could be made from money that the Authority would receive from the
winning bidder (once again, specified in advance). The size of the payment has to be calibrated to
discourage frivolous bids. Practice varies widely between countries. The Authority should ask their
advisers about current market practice in the relevant sector and jurisdiction.
In evaluating the qualification submission, the Authority will focus on the technical capability, business
capability and financial position of the potential bidders. In line with EU public procurement legislation,
these capacities must be, in principle, demonstrated jointly, rather than individually, by the members
of a consortium.
The prequalification submission will usually be required to describe the following:

the business activities of the consortium (e.g. how many projects of a similar nature, the
consortium has implemented over a specified number of years);

financial information (e.g. thresholds involving turnover and net worth);

legal information about the PPP consortium, including any relevant litigation involving the
companies; and

the quality of personnel to be involved in the project.

The first step of the prequalification and shortlisting process is often to determine which consortia
have passed the thresholds in all the relevant respects (i.e. pass/fail tests). Most of the criteria (e.g.
company revenue) are expressed in terms of clear and objective thresholds. If this results in a number
of consortia that exceed the maximum number pre-specified for the shortlist, then a systematic and
predetermined process for scoring or ranking should be used to narrow down the list to arrive at a
shortlist.
Sometimes shortlisting is done partly on the basis of responses that are submitted to a set of openended questions about how the companies would address certain key issues if they were to win the
PPP contract. For example, in the competitive dialogue procedure, initial shortlisting can be based
partly on an assessment of the outline or indicative solutions given by the candidates.
At the end of the process, a well-substantiated prequalification report should be prepared to provide a
good audit trail. Unsuccessful bidders should be debriefed.

Business Development

Pre-Qualification Form

(On Success)

3 Type of Contractor

Pure Contracting

An independent contractor is a natural person, business, or corporation that

provides goods or services to another entity under terms specified in a contract or within
a verbal agreement. Unlike an employee, an independent contractor does not work regularly
for an employer but works as and when required, during which time he or she may be
subject to law of agency. Independent contractors are usually paid on a freelance basis.
Contractors often work through a limited company or franchise, which they themselves own,
or may work through an umbrella company.
In the United States, any company or organization engaged in a trade or business that pays
more than $600 to an independent contractor in one year is required to report this to
the Internal Revenue Service (IRS) as well as to the contractor, using form 1099-MISC. This
form is merely a report of the money paid; independent contractors do not have income
taxes withheld like regular employees.

Contracting with Turnkey

A turnkey or a turnkey project (also spelled turn-key) is a type of project that is

constructed so that it could be sold to any buyer as a completed product. This is contrasted
with build to order, where the constructor builds an item to the buyer's exact specifications,
or when an incomplete product is sold with the assumption that the buyer would complete it
Turnkey refers to something that is ready for immediate use, generally used in the sale or
supply of goods or services. The word is a reference to the fact that the customer, upon
receiving the product, just needs to turn the ignition key to make it operational. Turnkey is
often used to describe a home built on the developer's land with the developer's financing
ready for the customer to move in. If a contractor builds a "turnkey home" they frame the
structure and finish the interior. Everything is completed down to the cabinets and carpet.
"Turnkey" is commonly used in the construction industry, for instance, in which it refers to the

bundling of materials and labour by sub-contractors. 'Turnkey' is also commonly used

in motorsports to describe a car being sold with drivetrain (engine, transmission, etc.) to
contrast with a vehicle sold without one so that other components may be re-used.
Similarly, this term may be used to advertise the sale of an established business, including
all the equipment necessary to run it, or by a business-to-business supplier providing
complete packages for business start-up. An example would be the creation of a "turnkey
hospital" which would be building a complete medical centre with installed medical
equipment.

Design & Build with Turnkey

Designbuild (or design/build, and abbreviated DB or D/B accordingly) is a project

delivery system used in the construction industry. It is a method to deliver a project in which
the design and construction services are contracted by a single entity known as the design
builder or designbuild contractor. In contrast to "designbidbuild" (or "designtender"),
designbuild relies on a single point of responsibility contract and is used to minimize risks
for the project owner and to reduce the delivery schedule by overlapping the design phase
and construction phase of a project. "DB with its single point responsibility carries the
clearest contractual remedies for the clients because the DB contractor will be responsible
for all of the work on the project, regardless of the nature of the fault"
The traditional approach for construction projects consists of the appointment of a designer
on one side, and the appointment of a contractor on the other side. The designbuild
procurement route changes the traditional sequence of work. It answers the client's wishes
for a single point of responsibility in an attempt to reduce risks and overall costs. It is now
commonly used in many countries and forms of contracts are widely available.
Designbuild is sometimes compared to the "master builder" approach, one of the oldest
forms of construction procedure. Comparing designbuild to the traditional method of
procurement, the authors of "Design-build Contracting Handbook" noted that: from a
historical perspective the so-called traditional approach is actually a very recent concept,
only being in use approximately 150 years. In contrast, the designbuild conceptalso
known as the "master builder" concepthas been reported as being in use for over four
millennia."
Although the Design-Build Institute of America (DBIA) takes the position that designbuild
can be led by a contractor, a designer, a developer or a joint venture, as long as a the
designbuild entity holds a single contract for both design and construction, some architects
have suggested that architect-led designbuild is a specific approach to designbuild.

The "designbuilder" is often a general contractor, but in many cases a project is led by a
design professional (architect, engineer, architectural technologist or other professional
designers). Some designbuild firms employ professionals from both the design and
construction sector. Where the designbuilder is a general contractor, the designers are
typically retained directly by the contractor. Partnership or a joint venture between a design
firm and a construction firm may be created on a long term basis or for one project only.
Until 1979, the AIA American Institute of Architects' code of ethics and professional conduct
prohibited their members from providing construction services. However today many
architects in the United States and elsewhere aspire to provide integrated design and
construction services, and one approach towards this goal is designbuild. The AIA has
acknowledged that designbuild is becoming one of the main approaches to construction. In
2003, the AIA endorsed "The architect's guide to designbuild services", which was written to
help their members acting as designbuild contractors. This publication gives guidance
through the different phases of the process: design services, contracts, management,
insurances, and finances
During the designbuild procedure, the contractor is deciding on design issues as well as
issues related to cost, profits and time exigencies. Whilst the traditional method of
construction procurement dissociates the designers from the contractors interests, design
build does not. On these grounds it is considered that the designbuild procedure is poorly
adapted to projects that require complex designs for technical, programmatic or aesthetic
purposes. If the designer/architect is 'kept' by the construction company, he probably will
never push the envelope as to what might be possible. A notable designbuild project that
received significant criticism, not only for excessive cost but for environmental issues, was
the Belmont Learning Center. The scandal involved alleged contaminated soil that caused
significant delays and massive cost overruns. In Los Angeles, District Attorney Steve Cooley,
who investigated the Los Angeles Unified School Districts Belmont project, produced a final
investigative report, released March 2003. This report concluded that the designbuild
process caused a number of issues relating to the Belmont scandal:

Designbuild does not make use of competitive bidding where prospective builders bid on
the same design.

Criteria to select contractor is subjective and difficult to evaluate and to justify later.

The design and price selected arouses public suspicion, true or not.

This can lead to loss of public confidence.

It concluded the designbuild approach and mixed-use concept together caused controversy,
uncertainty, and complexity of the Belmont project which helped increase the potential for project
failure.
While the Belmont investigation cleared the Los Angeles Unified School District of any criminal
wrongdoing, the task force recommends strict oversight, including written protocols, a vigorous
Office of the Inspector General, and other recommendations if it decides to continue to use the
designbuild approach.
During the period in question, the ex-Superintendent of LAUSD, Ramon C. Cortines, working
with the LAUSD Board of Education, whose president is Monica Garcia, actively tried to cut the
Office of Inspector General by 75% (compromising on 25%) and subsequently removed the
Inspector General Jerry Thornton after he produced critical audits that showed misuse of
construction funds.

Tender Provided by Client with BOQ

General Condition
Time Limit
Payment Terms
Completion Sequence

BOQ

A bill of quantities (BOQ) is a document used in tendering in the construction industry in

which materials, parts, and labor (and their costs) are itemized. It also (ideally) details the terms and
conditions of the construction or repair contract and itemizes all work to enable a contractor to price
the work for which he or she is bidding.
Bills of quantities are prepared by quantity surveyors and building estimators, and "Indeed the bill of
quantities was the reason to be for the development of quantity surveying as a separate profession."
COBRA the international operations or trades used in construction. As the rates for materials and
labour change due to inflation, these books are frequently republished.
The practice historically of estimating building costs in this way arose from non-contractual
measurements, taken off drawings to assist tenderers in quoting lump sum prices.
There are different styles of bills of quantities, mainly the Elemental BOQ and Trade Bills.

Rate Fill, Explanation, Meetings, Negotiation

Layouts
Rough Project Schedule

Confirmation (Work Given)

Compliances Document

Letter of Intent + Advance by Client

Work Order & Advance Purchase Order

(Work Order Contractor & PO Vendors)

Mobilization of Material

Project Execution Purchase Accounts Project Team as per Project Schedule + Payment by Client

SITC (Supply Installation Testing Commission)

Handover (Document, Demonstrate) + Payment by Client

Balance Payment
Retention 5% for 1 Year on Hold
DLP (Defect Liability Period)
Escalation Chart

Final Payment & Closure.