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Construction Law/Combining packages (after evaluation) to be awarded to the same consultant

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Question
Procurement of consultancy services,  following World Bank guidelines.  Three separate assignments (say A, B and C) of similar type for preparation of master plan and design of buildings etc. but in different locations for the same Client. Method of selection is QCBS. Contract form used Lump Sum. Completion period for all three packages is 9 months from the date of signing of contract.

Consultant X submitted proposals for all three packages. But they submitted same key experts (5 nos.) in all three proposals. Proposals for the three packages were evaluated individually and independently of each other. Consultant X is determined to be ranked no. 1 in all the three packages after the combined (technical+financial) evaluation.

When the consultant was invited for negotiation and asked to replace the key experts for the packages B and C, they expressed inability stating that their agreement on fees with the experts is for working in all projects. If experts are to be replaced it would involve extra cost. Rather they insisted that all three assignments be clubbed together and one contract signed. They will do the job within the time and for the same price. The client checked and confirmed that they have performed assignments in the past comparable/similar and even of greater amount than the cost of all three packages combined together. Please advise whether all the three packages clubbed together and a single contract can be signed. Thank you in advance.

Answer
Dear Tanka,

Thank you for your question.

The confirmation you have asked me to do is a unique one. The reason is that, the procurement strategy you have described has a definite target. It must have been either for Clients convenience and or for a great control over the cost monitoring and its technical coordination process as may be beneficial to the Client. If this is the case, i believe the decision to take in this circumstance will depend on many factors which are more of, business profitability and risk alleviating decisions. I figured out that the tender for the contract must have been a single contract for tender even though, it contain three separate packages. if this is so and it is the basis of the tender figures you have submitted for each of the packages under the single tender, then, if there is to be any variation at the negotiation stage which attempts to now make it 3 separate individual contracts with options of replacing the experts for each of the contracts (the 3 packages), then, the decision would be a business one, just as you have said, to have a change in the tendered figure more so where, the 3 packages now has to be undertaken by different expert. this would limit / reduce the turnover which would in turn, by economic of scale brings about increased cost. However, if the tendering company finds it good, for the survival of the company and the need to keep busy in business, he may choose to agree to maintain same prices (costs) irrespective of the turnover (or lesser amount resulting from individual packages tendered sum). If the company is quite busy and have more than enough jobs at hand that can keep them going for sometime, they may then insist on demanding for extra / increased cost.

The decision whether you can accept the Client's clubbing the three packages together and signed as a single contract is purely more oif "business / commercial decisions" as based on economic of scale, as the turnover gets higher, the rate or cost per unit / element / package reduces and vice versa.

I hope this clears your doubt.

Regards
Femi

Construction Law

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Femi Alofe

Expertise

I can answer all questions relating to the followings: 1. Contract Administration - variations, contract clauses interpretation, all post contract procedures, valuations and certificates questions, extension of time issues and prolongation cost matters. 2. Contract Practice - Any questions regarding forms of contract like JCT, FIDIC & other Bespoke forms. 3. Quantification, measurements and Estimating questions 4. Contracts and construction law questions and dispute resolutions problems. 5. All FIDIC Conditions of contracts

Experience

Out of my 24 years experience in construction industry, i have the following specific experience: 1. Contract Administration - 15 years in contract administration with over 10yrs in Managerial positions covering africa and the middleeast. 2. Contract Practice - 15 years experience with over 10yrs in Managerial and expert positions covering africa, north america and the middleeast. 3. All pre-contract procedures, Tendering, Quantification, measurements and Estimating questions - 20 years experience. 4. Contracts and construction law questions and dispute resolutions problems - 15 years experience with over 10yrs in Managerial and expert positions and 5 years expert witness and active practice in arbitration proceedings covering africa and the middleeast.

Organizations
1. FAIQS - Fellow, Australian Institute of Quantity Surveyors, Australia 2. FRICS - Fellow, Royal Institution of Chartered Surveyors, UK 3. CCP - Certified Cost Professional AACEI, USA 4. PQS - CIQS, CANADA 5. ACIArb. - CIArb, UK 6. MNIQS - NIQS, NIGERIA 7. RQS - QSRBN, NIGERIA

Publications
1. AACEI RP on Estimating, 2010

Education/Credentials
1. B.Tech (QS) 2. RICS professional course, CEM - UK 3. MSc , UK NARIC 4. Professional Doctorate ( to commence 2016)

Past/Present Clients
1. Larsen & Toubro Ltd, Dubai UAE 2. Larsen & Toubro (oman) LLC 3. Archi + Web consortium, Abuja Nigeria 4. George Dike & Associates, Minna Nigeria 5. Public works Authority (Ashghal), Doha Qatar

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