Академический Документы
Профессиональный Документы
Культура Документы
© Mauro Mancini
AGENDA
• Introduction
• Buy and Sell process
• Bidding costs and resources
• Marketing Phase
• Bid no Bid Decision
• Proposal Preparation Phases
• Contract
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Introduction
• Marketing Phase
Feasibility Study
• Competitive bidding Phase
Contract
• Project execution Phase
Provisional acceptance
• Operating Phase (warranty period)
Final acceptance
• Operating Phase
Dismission
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© Mauro Mancini
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Buy and Sell Process
• Marketing Manager
• Proposal Manager
• Project Manager
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Bidding Resources
Supportive Engineerin
activities g
resources resources
Economic
estimate
resources
Manageme
nt
resources
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Bidding Resources
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Bidding Resources
Engineerin
g resources
• Base Engineering
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Bidding Resources
Economic
estimate
resources
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Bidding Resources
Supportive
• Programming activities
• Insurance and Finance Study resources
• Local taxation study
• Legal agreement discipline
• Legal consultancy
• Procurement
• Customer relationships during sales activities
• Proposal writing
• Customer negotiating
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Bidding Costs
Site External Negotiating
Costs Costs costs
Technical, The most difficult to
Society staff administrativ
(direct and quantify. Refer to
e, legal, and staff expenses to
indirect) financial satisfy costumer
consultancy negotiating
Indirect costs: requirements
reworking, Particular
travels, parts of the
Very changeable
phone, fax, offer
because is not
computers,etc developed by
possible to forecast
. third pary
customer
requirements to
Commercial negotiate nor to
costs of know how many
different people will be
nature involved
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Marketing Phase
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• STRATEGIC FACTORS
• ECONOMIC FACTORS
• CONTINGENT FACTORS
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Bid no Bid Decision
STRATEGIC FACTORS
1. The firm operates within the same market in which the “call for
tenders” is published
2. The firm does not operate on the same market in which the
“call for tenders” is published.
Evaluate:
• market potential and its development in mid-term
• market profitability its forecast in mid-term
• political, economic, financial and social stability
• entrance barrier existence due to legislation, to the
international alliances, to the prevalent financial flows,
to the product flowing market
• firm interest to invest and risk for entering into a new
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market
STRATEGIC FACTORS
Product has a strategic role Firm decides to participate to the
competition due to the following:
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Bid no Bid Decision
ECONOMIC FACTORS
• “Call for tenders” published in a country in which the firm is already
present. Firm decide to participate:
• to defend and consolidate that market
• to convert the investment already done and the
knowledge already acquired to enter
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ECONOMIC FACTORS
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Bid no Bid Decision
CONTINGENT FACTORS:
1. Order portfolio size (reduced or satisfactory)
2. Facilitated credits
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Proposal Preparation Phase – Contractor point of
view
Pre-qualitfication
phase (tendering)
• Bid strategy
Planning phase • Strategy definition
• Resource estimation
Organizational • Program editing preparation
phase • Bid budget definition
• Collaborative agreement establishment
• Pre-project editing
Elaboration phase • Technical and Commercial proposal first draft
preparation
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Proposal Preparation Phase
CONTRACTOR POINT OF VIEW
6. Revision and Approval phase
• Technical and commercial documents revision
• Estimates cash flow and risk profile evaluation
• Prices and negotiating margins approval
• Alterations agreed implementation
7. Final editing phase
• Alterations agreed during approval phase are inserted in technical
and commercial proposals
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Pre-qualification Phase
• With this phase the “competitive bidding” officially begins
• The customer sends a questionnaire to a group of companies
“Contractors” that could be qualified to formulate, in a following
phase, an offer to realize the project at the required conditions
Objective
Tender s
Documen
t
Pre-
Tender
Meertings
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Pre-qualification Phase
Objectives
CUSTOMER OBJECTIVES
• Pre-qualify a number of societies able to execute project/plant at the
required conditions of time and cost
• Receive data proper and real as inputs to the feasibility study and the
budget determination
• Start to establish a competitive relationship among the bidders and
verify the upper limit of request to insert in tender documents
CONTRACTOR OBJECTIVES
• Obtain a pre-qualification highlighting to the lower limit proper
streghteness to preserve them for the bidding phase
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Pre-qualification Phase
Tender
Document
Tender Documents are emitted from the Customer and
from all the Contractors that have been pre-qualified
They indicates:
• Ways and data to present the offer
• Required validity for the offer
• Frame and content of the offer
• Type of quotation
• Summary of the scope of work
• Index of the annexes
• Guarantee required at the offer presentation (Bid Bond)
• Ways to require clarification to the Tender Documents
• Program for “Site Surveys” and “Meetings” with the Customer
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• When required are the first meeting between the Customer and the
Contractors
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Pre-qualification Phase Pre-
Tender
• Contractors ask clarification about the Tender DocumentsMeertings
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Planning Phase
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Planning Phase
BID STRATEGY DEFINITION
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Planning Phase
Identify the kind of Customer
INVESTING COSTUMER
• Receptive on realization matters
• It’s convenient to make an offer aimed to explain
Executive Conditions and to show Contractor capabilities
to execute the project within the contractual terms
OPERATING COSTUMER
• Receptive on technological and operating aspects of the
project
• It’s convenient to make an offer aimed to defines technical
characteristics of the plant and to show Contractor
capabilities to execute a plant easy to operate and with a
reduced maintenance required
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Planning Phase
Identify the “key points” to win the competition
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Planning Phase
Identify your Positioning in respect to the other Bidders
LEADER
• He/She knows the project can evaluate risks realistically
• He/She has experience on several similar projects can evaluate
costs with the lowest possible level of uncertainty (lowest
contingency)
• He/She is part of a more competitive market area can obtain less
costly supplies
• Has strategic alliances with Vendors and Subcontractors
OUTSIDER
• He/She does not have experience can’t evaluate risks properly
• He/She does not have experience on other similar projects can’t
have a low level of uncertainty in cost estimation (high contingency)
• He/She is not part of a competitive market area on average
supplies are more expensive
• He/She will choose Vendors and Subcontractors during execution
higher uncertainty and contingency costs
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Planning Phase
Considerations
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Planning Phase
PLANNING BASE DECISION
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Organizational Phase
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Organizational Phase
HUMAN RESOURCES
DEFINITION
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Organizational Phase
HUMAN RESOURCES ACCESS
CONFLICT
• Resources could be required from EXTERNAL
DEPARTMENTS in respect to the Commercial Direction
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Organizational Phase
PROPOSAL TEAM MAIN
FUNCTIONS
• Editing Coordinator
• Financial Coordinator
• Contract Negotiator
• Estimating Coordinator
• Project Engineering
• Construction Project Engineering
• Training Coordinator
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Organizational Phase
Organizational Phase
The Proposal Manager:
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Organizational Phase
COLLABORATIVE
AGREEMENTS
• Great works realization requires a great deal:
high risks + planning, technical, financial and
organizational engagements make a project
complex, so a single entrepreneur can’t face it
by him/herself
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Organizational Phase
COLLABORATIVE
AGREEMENTS
Typologies of collaborative agreements:
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Organizational Phase
SUBCONTRA
CTS
• Main contract and special conditions are part of the
subcontract.
• The same dynamics between main contractor and
subcontractor have to be applied to the subcontract works
when he/she apply to the main works
• Main contractor dynamics have to be applied to the
subcontract as if the main contractor were the client and the
subcontractor were the main contractor
• Main contractor payment influence subcontractor payments
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Organizational Phase
It has to include:
• Analytical costs to prepare the offer
• Follow-up costs (depending on following
adjustments)
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Elaboration Phase
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Elaboration Phase
PRE-PROJECT
PREPARATION
More detailed pre-project Less detailed pre-project
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Elaboration Phase
PRODUCT TO OFFER: TECHNICAL
OPTIONS
It is important to take into account the following:
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Elaboration Phase
TECHNICAL
OFFER
PART 1: TECHNICAL DESCRIPTION (what are it is sold)
E.g.
• Technical description
• Offsite Utilities description
• Design Code description
• Plant Advices description
• Bulk Materials description
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Elaboration Phase
TECHNICAL OFFER
OBJECTIVES
Elaboration Phase
COMMERCIAL
OFFER
It is made up of:
• Introduction
• Brief description of the Project
• Scope and Limits of the Furniture
• Program and Time at Completion
• Mechanical and Functioning Guarantee
• Prices
• Payment Conditions
• Financing Proposal
• Contractual Conditions
• Offer Effectiveness
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Elaboration Phase
COMPETITIVE
FACTORS
The BID profile gathers the following contents:
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Elaboration Phase
CONTRACTOR
RISKS
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Elaboration Phase
MAIN RISKS
EVALUATION
Elaboration Phase
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Elaboration Phase
Three kinds of conditions that allow to face contract risks:
Elaboration Phase
CONTRACTOR
EXECUTIVE RISKS
• Economic Risk
• Legal/Customer Risk
• Political Risk
• Technical Risk
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Elaboration Phase
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Elaboration Phase
CONTRACTUAL
DEVIATIONS
• Deviations part of the offer attachments that,
referring to a contractual clause, express comments,
proposals, reserves
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Estimation Phase
COSTS
Costs are defined based on: DEFINITION
• Pre-project elaboration
• Computation and Estimations of material quantities/weights and
work amounts
• Costs from Material Offers/Site Construction Activities
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Revision and Approval Phase
PROPOSAL
REVISION
FIRST REVISION
• Clearness verification
• Content verification
• Correspondence, to strategies and to tender documents,
verification
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Revision and Approval Phase
FROM COST TO PRICE
• Firm Margin
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BID
APPROVAL
General and/or Commercial Directors make the final
approval limited to:
• Scope of Work
• Exclusions List
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Final Editing Phase
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Tips:
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THE CONTRACT
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The Contract
Marketing Phase
• Feasibility Study
Operating Phase
• Dismission
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The Contract
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The Contract
LUMP SUM
UNIT PRICE
REIMBURSABLE
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The Contract
No Escalation
CONTRACT
Lump Sum
Fixed Price Constant
Unit Price
Escalation
Decreasing
with quantity
Reimbursable Cost Plus Fee
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The Contract
TURN-KEY CONTRACT
MANAGEMENT CONTRACT
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The Contract
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Ct = F + E + (1 – b) (C – E)
P = F - b (C – E)
Ct = total cost for the client
E = estimated cost
C = actual cost
F = estimated contractor profit
P = actual contractor profit
b = risk share allocated to the contractor
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Contract – Risk Sharing
if b=0 Reimbursable contract:
Ct = F + C
P = Ct – C = F
If b=1 Lump Sum contract:
Ct = F + E
P = Ct – C = F + E – C
• The principle behind risk transfer is that each risk
should be allocated to whoever is better able to
manage it with the least cost possible
• A correct risk allocation should reduce the
probability of risk occurrence
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Contract Management
• Invoicing and payment progress
• Specifications interpretation
• Adherence to quality
• Warranties
• Change orders
• Claims
• Penalties and bonuses
• Additional contracts
• Resolution of disputes
• Contract closure
• Etc.
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Contract Management
OBJECTIVE: prevent possible claims fro counter-party
and project themselves damages coming from
possible claims
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Contract Management
FINAL APPROVAL
PROPOSAL
CONTRACT COMMISSIONING
DOWN PAYMENT WARRANTY
BID BOND
PERFORMANCE BOND
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Contract Management
CONTRACTUAL RISK AREAS
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Contract Management
CONTRACTUAL RISK AREAS
• taxes
• subcontracts assignment
• external events
• assurance needs
• arbitration
• bureaucracy in public offices
• penalties
• active/passive invoicing
• income/outcome
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