15 Days Online Workshop on

Contract Methodology, Managing Disputes & Avoiding Construction Claims

Day I (02 May 2021)

02 May Onwards for 15 days

Via Online Platform Zoom
Organizer : One door Solution Pvt. Ltd. , Gairigaun, Tinkune, KTM
Course Facilitator:
Er. Abhushan Neupane
MSc. (TIM), B.E (Civil)-TU
NEC No: 3173 “A” Civil
https://www.linkedin.com/in/abhushanneupane/
Viber/Whatsapp: +9779841615007
Email: abhushan.neupane2020@gmail.com
Course Objectives:
The participants will be acquainted with the following major areas of Procurement and Contract
management after successful completion of this course:

• Basics of Procurement Management

• Bidding Procedures
• How & why contracts are drafted?
• Main Contract Clauses
• Other documents and Negotiations
• Negotiation and Resolution of Disputes
 Introduction of Procurement
• Procure- Obtain (Oxford Dictionary)
• Procurement- Acquiring goods, works or
services by public entity according to this act
(Procurement Act, 2063)

• Procurement - Acquisition of goods, works

and/or services at the best possible total cost of
ownership in the right quantity and quality, at the
right time, in the right place for the direct benefit
or use of governments, corporations, or individuals,
generally via a contract.
 Procurement – Facts
• About two third of the development budget of the
Government is spent through public procurement
• Most countries in the World are doing their public
procurement under a Public Procurement Law
• Procurement was subjected to different applicable
Laws and to Financial Administration Regulation,
2056 in special in Nepal.
• Procurement Act 2063 and Rules 2064 guide
Public Procurement of Public entities in Nepal
 Features of Procurement Act, 2063
• Optimization and efficient management of public fund
• Optimum output and best value for money
• Promote fair and healthy competition
• Encourage participation by eligible and efficient
bidder
• Ensure transparent procurement process
• Build in accountability
• Provide equal and non-discriminatory access and
opportunity
• Reduce scope for corruption and abuse
Procurement Planning
“Failing to plan
is Planning to fail”
- Peter Drucker, Famous Management Guru, USA

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Introduction to Public Procurement in Nepal

• Nepal Procurement Act 2063

• Nepal Procurement Rules 2064
• Standard Bid Documents (Refer to www.ppmo.gov.np)
 Introduction to FIDIC RAINBOW SUITES

1. General Conditions •ADB Procurement Guidelines

2. Particular Conditions •WB Procurement Guidelines
3. Guide for Procurement/ Claims handling • JICA Procurement Guidelines
4. Appendix to Tender
Procurement Principles

There are 4 main principles:

1. Economy: Value for money - Finance Ministry’s
concern
2. Efficiency: quick procurement - Project’s concern,
but against the Fairness
3. Fairness: No discrimination – Bidders’ concern
4. Transparency: Bidders’ concern, Auditor’s concern

All of these 4 parameters should be met 100%, but in

practice it is not possible.

Attempt should be to be in the nearest of this, while

meeting the project’s objectives.
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Procurement Planning – benefits of slicing & Packaging

For large or multi-year projects, both of master & annual

proc. plans are prepared. Annual proc. plans are
prepared as per annual program & budget, but within
the framework of master proc. Plan.
Slicing & Packaging arrangement
• Slicing: Large project is sliced into smaller ones. Benefits are (1)
high competition as small contractors can participate, (2)
chances for small local contractors to grow, (3) short project
duration. Examples – long road projects, multi-dimensional
projects like Melamchi.
• Packaging: Small jobs can be joined in appropriate package to
attract big contractors to achieve economy.
Slicing & Packaging principle seems contradictory, but it is not
so. Why? Take case by case decision.

Note: Market study or knowledge of market is the key to

successful procurement. 10
Procurement Guidelines Followed in Nepal

Applicable Proc. GLs is stated in the Loan Agreements.

For purely GoN funded projects, applicable Proc.
GLs is of the GoN. 4 main Proc. GLs are in practice in
Nepal:
1. GoN – Public procurement Act, 2063; Public
procurement Regulations, 2064 & SBDs issued by
the PPMO.
2. World Bank (WB) – Procurement Guidelines &
Consultant Guidelines.
3. Asian Development Bank (ADB) – Same
4. JICA: Very different than ADB/WB - rebidding time =
only 15 minutes, 80% evaluation done during bid
opening, total bid price counts not item rates, item
rates are negotiated.

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What is prequalification of tender?
• This is the process of screening for potential contractors, vendors, or
suppliers. It is based on experience, managerial ability, financial
ability, reputation, as well as work history.
• The process helps to develop a list of qualified bidders who will
then receive the invitation-to-bid (ITB) documents
• Usually done for the Large projects whose technical specification
and other documents could not be fully prepared before bidding
process is commenced
• Post qualification is the analogy where, Technical and Financial
capabilities are evaluated after the bidding process is started
Invitation for Bids (IFB)
Assignments:
• List the main features identified in the IFB provided above
• Downloads:
• https://ppmo.gov.np/acts_and_regulations
• https://ppmo.gov.np/standard_bidding_consulting_documents
• https://www.adb.org/documents/procurement-guidelines
• http://dohslmd.gov.np/web/uploads/source/chapter4.pdf
• http://pubdocs.worldbank.org/en/178331533065871195/Procurement-Regul
ations.pdf
• https://www.slideserve.com/opa/training-public-procurement-management