Ethiopian Roads Authority

Guideline No CL3
Pre-Award Review of
Project Status

Claims and Dispute Resolution Manual

June 2008
FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA
ETHIOPIAN ROADS AUTHORITY
CONTRACT ADMINISTRATION DIVISION

Pre-Award Review of Project Status

June 2008
 CONTENTS
1 INTRODUCTION .....................................................................................................1
2 TENDER PROCEDURES ........................................................................................1
3 APPOINTMENT OF THE ENGINEER .................................................................1
3.1 Survey Beacons......................................................................................................2
3.2 Land Acquisition ...................................................................................................2
3.3 Construction Programme.....................................................................................2
4 VALIDITY OF BIDS AND BID SECURITIES......................................................3
5 CONFIRMATION OF FUNDING...........................................................................4
6 CONTRACT AGREEMENT ...................................................................................4
7 CUSTOMS DUTIES..................................................................................................4
8 POSSESSION OF AND ACCESS TO THE SITE .................................................4
9 LETTER OF ACCEPTANCE..................................................................................4
10 BY-LAWS AND PERMITS......................................................................................4
11 PROJECT MANAGEMENT....................................................................................4
12 EQUIPMENT AND MATERIALS..........................................................................5
13 ADVANCE PAYMENT ............................................................................................5
14 FUNDING AGENCY APPROVAL .........................................................................5
15 GOVERNMENT BODIES, BUSINESSES, UTILITIES AND THE PUBLIC....5
16 INSURANCES ...........................................................................................................5
17 DISPUTE BOARD.....................................................................................................5
18 GENERAL..................................................................................................................5
 Ethiopian Roads Authority

Pre Award Review of Project Status

1 INTRODUCTION

After the decision has been made to award the tender to the successful bidder it is
advisable to take the opportunity to review the status of the project before the Letter of
Acceptance is issued.
Once the Letter of Acceptance is received by the successful bidder the Contract
commences and the successful bidder becomes the Contractor. The contract clock starts
ticking at the same time so it is necessary to consider the requirements of the contract to
ensure that all the necessary elements are in place, particularly those for which the
employer is responsible.
It is also the final opportunity to confirm that the successful bid complies in every way
with the requirements of the instructions to bidders.
Once the Letter of Acceptance is signed and issued to the successful bidder, the employer
and the contractor are both committed to carry out the responsibilities assigned to then
under the contract. This is the last opportunity to review the project before makign that
commitment.
2 TENDER PROCEDURES

As part of the tender assessment, all bids will have been checked for compliance with the
requirements of the bidding documents. The assessment of the successful bid should be
reviewed to ensure that it confirms that the bid conforms to all those requirements. At the
most basic level it should confirm that the bid was received not later than the time and date
for the submission of bids.
When bidders were prequalified, the assessment should confirm that the status of the
successful bidder has not changed significantly to the extent that he would no longer be
qualified to bid for the work.
If it has been necessary to clarify any issues with the bidder this should be stated in the
assessment and copies of any correspondence with the bidder should be attached as an
appendix.
If post tender, pre award negotiations were held this should be stated and minutes of the
negotiations attached as an appendix. If any of these negotiations resulted in amendments
to any of the documents forming the contract the minutes of negotiation should be included
in the Contract and the Form of Agreement and the appropriate clause of the Conditions of
Particular Application amended to include the minutes and to accord them the agreed
priority. Sub-Clause 5.2 of FIDIC IV and Sub-Clause 1.5 of FIDIC 1999 are the
appropriate clauses.
These issues are dealt with in greater detail in manuals and guidelines relating to
procurement.
3 APPOINTMENT OF THE ENGINEER

The engineer responsible for the supervision of the construction contract should be
appointed before the bidding documents are issued to bidders.

Claims and Dispute Resolution Manual Guideline No. CL3 1

 Ethiopian Roads Authority

This is necessary because bidders are disqualified if they have an association with the
engineer and they cannot be aware of this if the engineer is not identified in the bidding
documents.
In addition, the engineer can provide assistance in performing the analysis and assessment
of tenders.
3.1 Survey Beacons
It is usually a requirement of the service contract between the employer and the engineer
that the engineer checks the presence and accuracy of the coordinates of all survey beacons
that are provided for the use of the contractor. Under Sub-Clause 17.1 of FIDIC IV and
Sub-Clause 4.7 of FIDIC 1999 the employer is responsible for the accuracy of the original
points, lines and levels of reference supplied to the contractor.
It is a necessary precaution for the engineer to confirm the accuracy of this information
before the contractor requires to use the data. Although the information should have been
determined accurately by the design contractor and checked by a selective audit, it is
possible that original beacons may have been disturbed or damaged in the period between
the acceptance of the design contract outputs and the commencement of the construction
contract.
It will take the engineer some time to confirm the coordinates of the survey beacons and
this should be taken into account when the commencement date of the service contract is
decided. It is frequently necessary for the engineer’s service contract to commence two or
three months before the construction contract in order to allow sufficient time for the
engineer to complete the necessary preliminary work.
If there is concern that the engineer may be appointed but that the construction contract
may not proceed for any reason, this can be allowed for in the service contract by
structuring it to comprise two or three phases, some of which are conditional upon the
award of the construction contract.
3.2 Land Acquisition
The design contractor should have been required to prepare a land acquisition plan as
described in Guideline CL1.
Under the service contract the engineer is responsible for reviewing the plan to incorporate
any changes that have taken place since it was prepared. This is essential to ensure that the
construction contract is not delayed because the employer is unable to give possession of
site with the notice to commence as required by the contract.
Thus the engineer’s service contract should start sufficiently in advance of the construction
contract to allow the identification of any changed requirements for land acquisition as
well as to allow sufficient time for the employer to complete the necessary compensation
activities.
3.3 Construction Programme
The extent of the survey work and the review of the land acquisition to be carried out by
the engineer before the commencement of the construction contract may be limited.
The employer is obliged to give possession of the site, with the notice to commence, of as
much of the site as is required by the contract. This may be limited by provisions inserted
Claims and Dispute Resolution Manual Guideline No. CL3 2
 Ethiopian Roads Authority

into the contract by the employer. For example, the contract may state that the contractor
will be granted possession of site in 30 km lengths every three months starting at
Km0+000 and proceeding sequentially.
Similarly the contractor’s programme may define the sections of the site of which he
requires possession and the times at which possession is needed. The programme should
recognise any provisions made by the employer in the appendix to tender or elsewhere in
the contract.
Thus it may be necessary for the engineer to complete preliminary work on only a
restricted section of the site before the notice to commence can be issued. The work on
other sections of the site can be completed before it becomes necessary to give possession
of site to the contractor.
Even if the amount of work to be completed by the engineer is limited as described, it
remains necessary to ensure that enough time is allowed for all procedures to be completed
before starting the construction contract. The most time consuming task is likely to be the
finalisation of land acquisition and compensation.
The contractor’s programme may include a period of mobilisation before the start of
construction activities. However, the mobilisation period only starts at the commencement
date of the contract and the employer is obliged to give possession of at least part of the
site when the notice to commence is issued. This may only require a portion of the site to
be immediately available for the contractor, but it must still be clear of any problems
relating to ownership.
It may also be the case that the contractor intends to carry out survey work over part or all
of the site in order to prepare cross sections for approval before he is in a position to start
construction work. This would make it necessary for the engineer to have confirmed the
coordinated of all the survey beacons.
Thus the timing of the appointment of the engineer must be considered in the light of the
provisions of the contract and the work to be carried out under his service contract.
4 VALIDITY OF BIDS AND BID SECURITIES

The validities of bids and bid securities should be reviewed to ensure that they remain
valid for a time sufficient to formalise the contract with the successful bidder and to
receive the performance guarantee from the contractor. Unless otherwise provided for in
the contract, the contractor must provide the performance security to the employer within
28 days of receiving the Letter of Acceptance. Thus the bid security of bidders should
extend beyond this date.
Under the provisions of the General Conditions of Contract, the employer is not
empowered to withdraw the award of the contract if the contractor fails to provide the
performance security within the specified period. This measure may be available to the
employer under the instructions to bidders but these do not form part of the contract. The
contract and the provisions of the Conditions of Contract come into force on the date on
which the contractor receives the Letter of Acceptance.
If the employer wishes to retain the condition stated in the instructions to bidders it must
also be included in the Conditions of Particular Application.

Claims and Dispute Resolution Manual Guideline No. CL3 3

 Ethiopian Roads Authority

5 CONFIRMATION OF FUNDING

The employer should ensure that sufficient funds are available to pay the contract price
determined during the tender assessment. In addition, he should be satisfied that funds can
be made available to meet any contingencies that may arise.
The MDB Harmonised Edition of the FIDIC 1999 Conditions of Contract requires the
employer to provide to the contractor satisfactory evidence of the availability of funds
before the commencement date.
6 CONTRACT AGREEMENT

The employer should ensure that the contract agreement and documents are prepared,
collated and that the requisite number of copies has been prepared.
The documents should include any amendments necessitated by any agreements reached
during post tender and pre contract negotiations with the successful bidder. These may be
incorporated into the contract by the inclusion of the minutes of negotiation meetings as
part of the contract through the appropriate sub-clauses of the Conditions of Contract.
7 CUSTOMS DUTIES

Any negotiations with the government body responsible for the collection of import duties
and taxes should have been completed. If the contractor is to be exempted from customs
duties on equipment and spare parts imported temporarily into the country, the necessary
formalities must be completed.
8 POSSESSION OF AND ACCESS TO THE SITE

The employer must ensure that he has ownership of the permanent right of way and
temporary access to any other land required during the period of the contract. This should
be at least for the areas of the site and other lands of which possession must be given to the
contractor with the issue of the notice to commence.
Provisions should be in place to ensure that possession of other sections of the site will be
available to the contractor at the times required by the contract.
9 LETTER OF ACCEPTANCE

The Letter of Acceptance should be drafted and reviewed to ensure that it contains the
necessary information as it will form the basis of a binding contract with the contractor
until the contract agreement is signed.
10 BY-LAWS AND PERMITS

The employer must ensure that he has obtained any permits and licences for which the
contract makes him responsible. These might include such things as building permits, road
closures, authorities for compulsory purchase of land etc.
11 PROJECT MANAGEMENT

The employer must ensure that his personnel who will be responsible for monitoring the
contract and overseeing the performance of the engineer have been appointed and are
aware of the status of the project. He should also ensure that procedures are in place to
guarantee that responses to queries raised by the contractor or engineer are given within the
Claims and Dispute Resolution Manual Guideline No. CL3 4
 Ethiopian Roads Authority

time necessary to satisfy the provisions of the contract. This is particularly important if the
engineer is required to obtain the approval of the employer before exercising his authority
under the contract.
12 EQUIPMENT AND MATERIALS

If the employer has undertaken to make any equipment or materials available to the
contractor, whether as free issue or for payment, he should ensure that the items are readily
available and that procedures have been arranged to release them to the contractor at
appropriate times.
13 ADVANCE PAYMENT

If the contractor will be entitled to an advance payment, the employer should verify that
the funds will be available when required.
14 FUNDING AGENCY APPROVAL

If it is a condition of the loan, the employer must ensure that the funding agency has given
approval for the award of the contract to the recommended bidder for the amount of the
contract price.
15 GOVERNMENT BODIES, BUSINESSES, UTILITIES AND THE PUBLIC

The employer should ensure that notice of the works has been provided to other
government bodies or agencies as required by any regulation or as a courtesy. Advice
should also be given to any businesses that might be affected and by notices to the general
public. It may be appropriate to organise the distribution of leaflets to properties and
businesses along the route of the work, giving contact details for additional information.
16 INSURANCES

If the employer is to be responsible for the provision of any insurance in connection with
the project, he should make arrangements to establish the policies and pay the necessary
premiums.
17 DISPUTE BOARD

The employer should contact any people whom he proposes to nominate as members of the
dispute board in order to confirm that they will be available if agreement is reached with
the contractor on their nomination.
18 GENERAL

The items discussed in this guideline will require review for the majority of contracts
before the Letter of Acceptance is issued to the successful bidder. However, the list is not
exhaustive. Each project should be considered separately to ensure that any requirements
peculiar to that project are reviewed before awarding the contract.

Claims and Dispute Resolution Manual Guideline No. CL3 5