By

Engr. M. Mazhar-ul-Islam
(Chief Executive Officer)

Pakistan Institute of Cost & Contracts
(PICC)
mazhar@picc.org.pk
www.picc.org.pk
Delayed completion & cost overrun in most of the contracts in
Pakistan
Unreasonable construction cost and inadequate cash flows
Cost and contracts are inter-related
Need for a single source data for all construction inputs
Unavailability of data prepared by third party
In the present globalized environment, online availability of such
data is vital to bring efficiency, productivity and transparency in
determining the right cost of the contracts
Pakistan Engineering Council (PEC) has taken an initiative &
created a success story of development, updating & maintaining
such data by creating Pakistan Institute of Cost & Contracts
(PICC) as its subsidiary.
PICC is a non-profit, research based institution
Prepares and update web based cost for all construction inputs
Dealing with matters related to engineering contracts
Prepare, update and maintain on PICC website the cost data base
for all construction inputs.
Country specific Schedule of Rates (SOR)
Country specific procurement documents
Guidelines for construction cost estimate
Uniform classification system for specs & BOQs
Training, workshops and courses on cost & Contracts
Research on cost & contract
PICC ORGANIZATION CHART
PICC cost data generally includes:
Unified Schedule of Rates (SoR)
Basic input rates (Materials, Manpower and Machinery)
Composite item Rates
Per unit rates of various facilities
Technical specifications
Model BOQ and Guidelines
Standard methods of measurements

Maintaining, monthly updating & progressively uploading on the
website the cost data, as per detail given below, for all the districts
of Pakistan including AJK and Gilgit-Baltistan:
About 3200 basic input rates
About 1400 composite item rates for concrete, brick masonry, Stone
masonry, Block masonry, steel bars, formwork, plastering, pile works,
Earthwork and road works etc
Presently about 550,000 data are being monthly updated which are to
be increased progressively
Per unit rates and rates for quality control tests
Comprehensive mechanism established for determining the
Transportation Charges for various types of terrain.
Technical Specifications for concrete, masonry works, piles and
water supply & sanitation are developed and uploaded on website
whereas for various other sections are under development.
Standard methods of measurements and Model BOQ & guidelines
have been developed in line with the international standards.

National Steering Committee review all PICC Cost Data periodically
before hosting.
National Conference of Construction Cost reviewed the PICC products
& give their concurrence.
Representative participants are:
University of Engineering & Technology Lahore
Chartered Quantity Surveyor
All Pakistan Contractors Association (APCA)
Association of Consulting Engineer Pakistan (ACEP)
Engineering-in Chiefs branch , GHQ
Contd

National Engineering Services Pakistan Pvt. Ltd. (NESPAK)
Pak PWD Department
WAPDA
P&D Government of Punjab
P&D Government of Baluchistan
National Highway Authority (NHA)
Irrigation Department Govt. of Punjab
Pakistan Standard and Quality Control Authority (PSQCA)
In the MoST Meeting Islamabad (10 April, 2010), The representative from
P&D Division, NHA, PAK PWD, MoST, NESPAK endorsed establishment
of PICC

a)Determination:
Rates are collected directly from suppliers / vendors and PICC Market
Surveyors from at least three sources for all Divisional HQ.
EXW rates from various geographical locations are also collected.
Transportation charges are applied on EXW rates where required.
If difference between above rates is more than 10%, process is repeated for
verification.
Average material rates are determined.
Divisional HQ rates are replicated in the districts under their jurisdiction or
based on the geographical locations.
Adjustment of any specific input rate in a particular area is made if there is
any special consideration by the Government.
B. Verification :
Verification through cross checking with the
manufactures /suppliers
Verification by comparing with the rates determined by
applying transportation charges
Verification through inter-city comparison
Verification by comparing of rates with the other
organizations data





Truck Capacity: Monthly Hired Truck of 10 Ton Capacity
Speed: For a distance of 1 Km the Average Speed is taken 10 Km/hr. An
increment of 0.5 Km/hr is considered for each Km upto a maximum
average speed of 30 Km/hr
Diesel & Oil Consumption: Diesel@3Km/ Liter & Engine oil@100Km/
Liter
Labor: 06 No. Laborers are considered for Loading, Unloading &
Stacking within 3/ 4 Hours for each Trip
Allowances For Katcha, Hilly & Hard Hilly Areas: An allowance for
Katcha & Hilly Areas is considered as 25% where as For hard Hilly area
as 40%
Toll Taxes: Toll Taxes are also included

A comprehensive mechanism is developed for determining transportation
charges in various types of terrain


Technical Specifications for concrete, masonry works,
piles and water supply & sanitation are developed and
uploaded on website whereas for various other sections
are under development

Preparation of budget cost estimates
Preparation of Engineers Estimates
Cost validation of PC-1 and third party cost validation
Reference data for resolution of contractual disputes
Reference data for price adjustment
Reference data for Bidders to prepare the bids
Verification for accuracy of project cost
Transparency in the estimates
Minimize malpractices and corruption
Quality construction
Timely completion
Effective contract administration
Minimizing cost overrun and financial loss to the National
exchequer during the currency of contracts
Facilitate Cost Plus project execution
SERVICES OFFERED BY PICC
No.
Description
Charges/Fees (Pak Rupees)
1

Estimating
Engineering Estimating &
Preparation of BOQ
0.5 % of Total Estimated Cost
1.5 2 % of Total Estimated Cost
2
Trainings (QS, Cost Engineers on PICC
Website usage IT etc)
Rs. 2,000 Per Training for Non-Members
3
Special Training: Preparation of Rates
(Basic & Composite Items Usage IT)
Rs. 3,000 Per Trainee
4
Archived Data 10 Requests / Month Free for Members
and Rs. 500 for each Additional Request
5
Outsource Services: Rate Analysis
using PICC in-house Software
Negotiable
Passed by the Parliament on 29th December 2010
Provision for subsidiary of PEC under Article 3(XXXIV)
Establishing Standards for Engineering Contracts, Cost &
Services Article-7 (p)
Election for Chairman, Senior Vice Chairman, Four Vice
Chairman of provinces and 40 members
Representation for AJK, Gilgit, Baltistan and FATA
Voters included Registered Engineers and Professional
Engineers




No Post in an Engineering Organization other then an Engineer
Suo-Moto power given first time to PEC to deal with
professional misconduct of Engineers, Consultants.
Contractors & Engineering Organizations (Public or Private)
PEC Functions includes preparation of Bidding documents,
Contract Documents, Construction Cost Data, Arbitration and
related procedures
1. Standard Form of Bidding Documents (Civil Work)
2. Standard Form of Bidding Docs for Procurement of Works (E & M)
3. Standard Form of Bidding Documents for Procurement of Works
for Smaller Contracts
4. Standard Form of Contract for Engineering Consultancy Services
(Time Based Assignments)
5. Standard Form of Contract for Engineering Consultancy Services
(Lump Sum Assignment)
6. Standard Form of Contract for Engineering Consultancy Services
for Smaller Projects

(Contd)

7. Rules of Conciliation and Arbitration
8. Standard Procedure for Evaluation of Proposals for Procurement
of Engineering Services
9. Standard Procedure and Formula for Price Adjustment
10. Standard Procedure for Evaluation of Bids for Procurement of
Works
11. Standard Procedure for pre-qualification of constructors
12. Standard Procedure for pre-qualification of consultants
13. Standard Form of Bidding Documents for Procurement of Works
on B.O.T Basis

(Contd)
14. Standard Form of Bidding Documents for Procurement of Works
on Design-Build Basis
15. Standard Form of Bidding Documents for Procurement of Works
16. Standard Forms of joint Venture
17. Standard Forms of Bidding Document for Procurement of works
on EPC/Turnkey Basis
18. Standard Forms of Bidding Document for Procurement of Goods
& Services
19. Standard Forms of Bidding Document for Operation &
Maintenance works




Circulated to 75 selected Stakeholders
Approved by PEC Executive Committee
Vetted by Law Division
Approved by ECNEC on 28-2-2002
P&DD notified vide number 8(60)WR/PC/2002 dated 21-8-
2002
PEC notified vide S.R.O 628(I)/2003 dated 21.6.2003 & S.R.O
629(I)/2003 dated 26.6.2003


ECNEC approved these revised documents on 12-11-2007
P & D Division notified these revised documents vide No.
8(60)WR/PC/2008 dated 12 February, 2008
PPRA Notified vide SRO No 805(I/208) dated 11th July 2008
P&DD notified vide number 1(780)PP&H/PC/2007/Vol-II
dated 24.12.2009
Unified documents easy to comprehend by users
Provide pre-determined rules based on equitability
Minimize arbitrary decision by the parties
Increase efficiency and productivity
Minimize disputes- ensure transparency
Facilitate quality construction
Cut delay in project implementation
Develop capacity of Pakistani Constructors
Accelerate self-reliance in documentation


Over hundred (100) various form of contract was used by
different Govt./Autonomous/Private bodies
Main feature of these documents - one sided provisions in
favor of the Employer
Difficult to implement by contractor/consultants due to wide
diversity
Generally not based on International format of Engineering
Contract
Various funding agencies have their own documents
Planning Commission Directives 1989 & 1996
Draft sponsored by Organizations
Permission from FIDIC
Based on International Standards
Task groups for each document
Approval by Committee and Executive Committee
Review by Experts and Stake Holders
Feedback and Updating
Processing for Notification

Provide framework documents
Facilitate users productivity
Equitable documents between the parties
Prevent malpractices through unified Formats
International practice of modern contracts
Applicable for projects irrespective of financing
Self reliance in documentation
Compliance of Pakistani Laws
Protect Pakistani interests
Country specific provisions in ICB
Eligibility Clause requirement of PEC License
Qualification to suit domestic firms
Professional works by Professional
Arbitration under Arbitration Act 1940
Delayed payment compensation
Domestic preference
Compliance of Pakistani Laws
Use of Pakistani materials and services
Security from Insurance Co.
PICTURE OF PICC HEADQUARTER IN LAHORE
CEO PICC, ENGR. M. MAZHAR-UL-ISLAM, WITH SOME OF THE PICC STAFF MEMBERS AFTER
RECEIVING THE LUMINARIES OF THE LAND 2009 AWARD
WORKSHOP ON PEC CONTRACT/BIDDING DOCUMENTS. MINISTER OF HOUSING,
PLANNING & PUBLIC HEALTH, GOVT. OF AJK, SYED MURTAZA GILLANI ADDRESSING
THE WORKSHOP, ON THE RIGHT IS CEO PICC, ENGR. MAZHAR-UL-ISLAM WHO WAS
ALSO WORKSHOP MODERATOR
ADB DELEGATION VISIT TO PICC. PICTURE ABOVE (L-R): JEFF TAYLOR SR. PROCUREMENT
SPECIALIST ADB, HAMID SHARIF - PRINCIPAL DIRECTOR - CENTRAL OPERATIONS SERVICES OFFICE
(COSO), M. MAZHAR UL ISLAM CEO PICC, ALI FARHAD HAMEED MANAGER IT PICC, NAEEM ABBAS
PROCUREMENT SPECIALIST ADB, TERRY N. WOODS PROCUREMENT SPECIALIST/CONSULTANT ADB.