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NATIONAL ELECTRIC POWER REGULATORY AUTHORITY
NOTIFICATION
Islamabad, the / 7 day of May 2017 5So (L)
S.R.O 350 (I)/2017 In exercise of the pow.er confen-ed by Section 7(2) of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997), the National Electric Power Regulatory Authority, in order to bring transparency for selection of Engineering Procurement Construction Contractor by Independent Power Producers, hereby notifies the following guidelines, namely.
PART - I
'I'itle, Cornmencernent, Applicability and Definitions
1. Title and Cornmcncemente. — (1) 'These guidelines may be called the National Electric Power Regulatory Authority (Selection of Engineering, Procurement and Construction Contractor by Independent Power Producers) Guidelines, 2017.
(2) These guidelines shall in force at once.
2. Applicability. "Ihese guidelines shall be applicable to power projects being implemented under the NEP RA Interim Power Procurement (Procedures and Standards) Regulations, 2005 and a Cost-I) lus 'l'ariff, that intend to award EPC Contracts for whole or part of the power project.
3. Definitions ( l ) In these guidelines unlcss there is anything repugnant in the subject or context,-
"Act" Ineans the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997);
(b) "Alternate Bid" Ineans the opiional bid that a bidder may subinit based on improved dcsign than the one specified in the feasibility study;
(c) "Authority" shall bear the Ineaning ascribcd thereto in the Act;
(d) "Conflict of Interest" shall bear the meaning ascribed under sub clause (2) of clause 5 of these guidelines;
(e) "Cost Plus Tariff' Ineans a tariff based on the estimated costs of the power project or part(s) thereof) and a profit margin duly approved by the Authority;
(f). "EPC Contract" or "Contract" means the engineering procurement and construction contract duly executcd by the IPP with the prospective bidder;
(g) "EPC Contractor" means a bidder who has been awarded an EPC Contract;
(h) "Independent Consultant" means an engineering consultant or firm that is registered with the Pakistan Engineering Council (PEC) and is not an affiliate of, or have any coinmercial relationship with, a Company;
(i). "Independent Power Producer" or "IPI)" or "Cornpany" means a person carrying out the bidding proccss for selection of an EPC Contractor;
(j) "Primary Bid" means the bid made by a bidder that is based on the design and pararneters given in the approvcd bankablc feasibility study;
(k) "Relevant Agency" means any Govemmcnt functionary or agency responsible for processing and/or execution of a power project and shall include K-Electric; and
(l) "Request for Proposal" or "RFP 't Ineans a document prepared by a Company in accordance with clause 6 of these guidelines.
(2) Words and expressions uscd but not defincd in these guidelines shall have the smne meaning as in the Act and rules and regulations made thereunder.
(3) Words imparting the singular shall include the plural and vice versa.
PART II
Advertisement
4. Advertisement.— (l) Advertiselnents for the tendering process shall be widely circulated and published
(a) in four national newspapers and two international newspapers of repute; and
(b) on thc website(s) of the Company and the Relevant Agency; and
(c) on two international tendering websites.
(2) At least fifteen (15) working G•-.ys shall be given to bidders for collection of documents following the date of the advert.:selnent.
(3) The time required for subinission of bids by the bidders shall be in conformity with the nature, scope and Inagnitude of the project, H,'ith a minimum of two (02) months being provided to bidders for site visits, bid clarification meetings and preparation of bids.
PART III
Eligible Bidders and Request for Proposal
5. Eligible Bidders.— ( l) A bidder shall be -
(a) a firm, coinpany or body corporate;
(b) a private or state-owned entity; or
(c) any conibination of such entities in the form of a joint venture.
(2) A bidder shall not have a Conflict of Interest and any bidder having a Conflict of Interest shall be disqualified.
Explanation: In this sub-clause, a bidder is considered to have a Conflict of Interest for the purpose of the bidding process, if the bidder:
(i) directly or indirectlycontrolled by or is under conunon control with another bidder;
(ii) has a cornmercial relationship with another bidder or the Independent Consultant, directly or through common third parties, that puts it in a position to influence the bid of another bidder or influence the decisions of the Company regarding the bidding process; or
(iii) has a conunercial relationship with the professional staff of the project implelnenting agency who are directly involved in the preparation of the bidding the Contract or the bid evaluation process of the Contract;
(3) A bidder, either individually or as part of a joint venture, shall not participate as a bidder or as part of a joint venture in Inore than one bid and such participation shall result in the disqualification of all bids in which the bidder is involved.
(4) Any person, company or body corporate that is ban-ed by any law in force in Pakistan or a decision of the federal government, provincial government, the Authority or any court shall be disqualified from bidding.
6. Request for Proposal. — ( l ) A detailed RFP document shall be prepared by the Company calling for bids, which shall include but not bc limited to the following information
(a) background infonnation;
(b) scope of work;
(c) technical specifications;
(d) prequalification criteria;
(e) instruction to bidders;
(f) timelines for deliverables;
(g) conditions of contract;
(h) penalties & incentives;
(i) evaluation criteria; and
(j) reference doculnents, for on which bids are to be based.
(2) All incentives being offered to power projects by the federal govermnent and the Authority including exelnption froln tax'cs and, in the case of hydropower projects, openers for cost escalation cement, labour, fuel and steel, must be clearly specified in the RFP and be made part of the EPC Contract.
PART - IV
Tendering Process and Price Negotiation
7. 'I'endering Process: (l ) Pre-qualification of bidders shall be conducted as the first step of the tendering process for selection of EPC Contractor.
(2) The pre-qualification criteria shall be based on:
(a) eligibility;
(b) history of non-perfornvancc;
(c) chronic litigation history;
(d) competence of staff and equipment;
(e) relevant experience; and
(f) financial capability.
(3) The evaluation for pre-qualification shall be calTied out by an Independent Consultant.
(4) At least two bidders must be Pre-qualified for the tendering process to proceed:
Provided that if only a single bidder is pre-qualified, it would require approval of the Relevant Agency to proceed further.
(5) A single-stage two envelope bidding procedure shall be adopted for selection of the EPC Contractor.
(6) Bids shall be received as a sin o !e package containing two envelopes titled "the Technical Proposal" and "the Financial Proposal" respectively.
(7) Initially, only the Technical Proposal shall be opened in the presence of authorized representatives of the bidders while the financial proposal shall be kept unopened until the evaluation of the technical bid is complete.
(8) The technical bid shall be evaluated by an Independent Consultant in a manner prescribed in advance, specifying points for cx'perience, equipment and staff, construction methodology etc, as well as the Ininilnun-l points required for technical qualification, without reference to the price.
(9) The technical bid evaluation shall ensure that the technical solution offered by a bidder is deliverable and robust and is based on reliable technologies while meeting all minimum technical requirenrnts.
(10) Any proposal not conforlning to the specified requirements/minimuln points earned shall stand disqualified.
The points/score of the technical bid shall be carried forward in the final evaluation score {Or selection of' the winning bid, which slvall be based on a cumulative score of the technical and financial bids.
(12) After evaluation of the technical bids, the financial bids of the bidders technically qualified under this clause 7 shall be opened the presence of authorized representatives of the pre-qualified bidders for evaluation.
(13) The scoring of the technical and financial bids would be done by an Independent Consultant in a manner prescribed in advance and broadly following the evaluation criteria specified in the Schedule annexed to these guidelines.
(14) The winning bid shall be the bid having the highest combined ranking which shall comprise 40% of the technical score and 60% of the financial score.
8. Price Negotiation with Selected Bidder. Price negotiation shall only be carried out with the winning bidder in an open and transparent manner.
PART - V
Change in Design/Value Engineering/Alternate Bid and Written Record
9. Change in Design/ Value Engineering/ Alternate Bid.— (l) Primary Bids shall bc bascd on the design specified in the feasibility study of the power project.
Provided that bidders may also submit an Alternate Bid based on improved design or better financial terms and such Alternate Bids cf winning bidder shall be opened for further evaluation and, if found to be technically viable and based on better financial terms, shall be considered for approval by the Relevant Agency, which shall be given in a timely manner.
(2) The feasibility study of the power project shall be provided to bidders as pan of the RFP and only the Bids shall be used for determining the winning bid.
(3) Any subscquent major change in design/value engineering after acceptance of a bid shall be approved by the Relevant Agency and any savings in costs as a result of the design change shall be accounted for by the Authority in the Cost-Plus Tariff.
10. Written Record.— The written record of all activities relating to prequalification and the tendering process, including bid evaluation and EPC Contract, shall be maintained by the Company and made available to Authority upon request.
(Syed Safeer Hussain) 17/05/17
Registrar
Schedule
[See clause 7(13)]
EVALUATION CRITERIA
PART [A]
Evaluation of Technical Bid
Evaluation of Technical Bid
The technical proposals will be evaluated using the following criteria:
Criteria | Evaluation | Score |
(a) Contractor experience and capability | Experience of executing similar projects Past perfonnance with similar projects in Pakistan • Availability of necessary construction plant and equipment Qualified and experienced key construction and personnel Continuity and availability of personnel for the Project | 30 |
(b) Design experience and capability | Proven design experience with projects of comparable size Exannple of design procedure and methodology used for an EPC project in Pakistan Applicable experience of key design staff to be assigned to the Projcct. | 10 |
(c) Construction Planning and Methods | Well thought out project management plan structure which reflects the needs of the Contract - Clear and well defined procedures and interfaces.
- 'I'echnically simple yet effective and proven technology.
Selection of construction equipment which is balanced and robust and a ro riate to the | 20 |
| anticipated ground conditions. Methods for underground works and rate of construction. RCC construction Inethod and rate of construction. Sequencing and interfacing of civil works with equipment installations. Projcct site infrastructure plan suitable to meet the construction schedule, including site layout, pennancnt and tenlporary access roads and bridges, transport plan, concrete production, aggregates production, work and laydown areas, storage facilities, spoil areas, camps, power supply during construction, and other facilities as may be required. Contingency planning | |
(d) Electrical and mechanical equipment | Plant layout and suitability of equipment proposed. Description of Inajor electrical and mechanical equipment items and systems Procurement, delivery and transportation plan Training and O&M service plan | 15 |
(e) Construction Schedule | Realistic planning of facilities and sequencing of works. Sufficient detail provided for review of schedule, including (for example) average production rates of excavation, fill and concrete (m3 per hour) for each civil activity as appropriate. Realistic scl'leduling consistent with proposed construction Inethods. Identification of risk and allocation of float for risk areas. Proposed means of mitigating delays in the event that there are unforeseen events that impact on progress. • O ortunities for earl com letion of the Pro•ect | 20 |
| and technical feasibility. Capabilities for mitigation and management of risks to prevent delays and cost increases. | |
(f) Health, Safety and Environment | Demonstrates a corporate commitment to safety, proven solutions, safe working practices and culture, training and supervision. Draft site-specific health and safety plan • Acceptable safety statistics for at least one other hydropower nroject in Pakistan. Demonstrates an understanding of the key risks. provide adequate proposals for Inonitoring and nnanaging those risks and complying with the environmental requirements of the Contract. | 5 |
Total Technical Score | Max IOO |
Note: The above stated Evaluation Criteria for Tcchnical Bid is for a typical hydropower projcct; suitable project specific changes to the Criteria may be made for other projects
PART [B]
Evaluation of Financial Bid
The Financial Bids shall be evaluated as follows:
Criteria | Evaluation | Score |
(a) Bid Price | The Bid Price will be evaluated to determine the Evaluated Bid Score using the criteria defined in the notes below. | 70 |
(b) Reasonableness of pricing | The pricing structure will be reviewed. Higher marks will be awarded to Bidders with pricing consistent with the technical proposal | 5 |
(c) Financial Strength | Higher marks will be awarded for stronger balance sheet, greater financial resources, and larger annual tumover. | 10 |
| (d) Conditions of Contract/Dclivcrables | Lower nvarks will be awarded for exceptions to the Conditions of Contract/'Deliverables specified in the RFP | 15 |
| Total Financial Score | | Max IOO |
| | | | | |
Note: The Evaluated Bid Score shall be obtained by adjusting the Bid Price as follows:
1. The Bid Price will be adjusted for correction of arithlnetical enors
2. Price adjustinent will be Inade to account for any quantifiable material nonconformities and work, services, facilities, etc., to be provided by the Company.
3. The value of energy and capacity will be determined based on the Plant perfonnance/efficiency guaranteed in the Bid, i.e., Bids guaranteeing higher efficiency/capacity/energy shall earn higher marks
4. Differences in the scheduled for the COD will be valued.
5. The value of the cash flow proposed by the Bidder will be detennined by discounting payinents to present value as of the Contract Commencement Date. The cash flow shall include an allowance for interest during construction.
The Evaluated Bid Price shall be obtained by the sunmation of the effect of the above factors. The loxvcst Evaluated Bid Price will be awarded an Evaluated Bid Score of 70 points. Other Bids will be assigned points on a pro-rata basis as:
Lowest Evaluated Bid Price
Evaluated Bid Score = x 70
Evaluated Bid Price
Note: As specified in Chapter IV of these Guidelines, the weightage of Financial Score and the Technical Score should be 60% and 40% respectively; hence the Financial Score shall be multiplied by 0.60 and the Technical Score shall be multiplied by 0.40 to arrive at the Total Final Score that would be used to determine the winning bid.