presentation by construction association of bhutan

Presentation Presentation by by

Construction Association of BhutanConstruction Association of Bhutan

Construction Association of Bhutan Construction Association of Bhutan April 22, 2023April 22, 2023

Summary of PointsSummary of Points1.1. Publication of BSRPublication of BSR2.2. Allocation of Contract durationsAllocation of Contract durations3.3. Departmental Execution of Works Departmental Execution of Works 4.4. Publication of Construction Cost IndicesPublication of Construction Cost Indices5.5. Tendering Issues Tendering Issues 6.6. Cost of Tender Documents Cost of Tender Documents 7.7. Informing the bidders in case of re-Informing the bidders in case of re-

tenderingtendering8.8. Compensation for cancellation of work Compensation for cancellation of work

awardaward


1. Publication of BSR1. Publication of BSR

Problem Statement : Problem Statement :

BSR is published only after few years time. BSR is published only after few years time.

Un-realistic rates in the BSR Un-realistic rates in the BSR

Cost index calculation is not carried out properly and on Cost index calculation is not carried out properly and on a project specific basis. Rather some fixed cost index is a project specific basis. Rather some fixed cost index is used all year around. used all year around.


1. Publication of BSR1. Publication of BSRSubmissionSubmission: :

BSR may be published annually BSR may be published annually

Instead of three base towns, Phuntsholing, Instead of three base towns, Phuntsholing, Samdrupjongkhar and Gelephu, the rates be may be Samdrupjongkhar and Gelephu, the rates be may be published for Phuntsholing, Thimphu, Bumthang and published for Phuntsholing, Thimphu, Bumthang and Trashigang. Trashigang.

The work of compilation and publication of BSR may be The work of compilation and publication of BSR may be tendered out to the private sector and accordingly tendered out to the private sector and accordingly approved by the government.approved by the government.


2.2. Allocation of Contract Allocation of Contract Duration Duration


Contract durations are fixed on an arbitrary basis Contract durations are fixed on an arbitrary basis

Some contractors are provided with very relaxed Some contractors are provided with very relaxed Contract durations while the contract durations of some Contract durations while the contract durations of some contractors are un-reasonably constricted. contractors are un-reasonably constricted.

Various factors affecting the implementation are not Various factors affecting the implementation are not considered while framing the contract durationsconsidered while framing the contract durations


2. Allocation of Contract durations 2. Allocation of Contract durations SubmissionSubmission: : The following factors needs to be considered while allocating The following factors needs to be considered while allocating contract durations :contract durations :

climatic conditions of project site (conditions during climatic conditions of project site (conditions during rainy season and winter season)rainy season and winter season) project location (remoteness, transportation of materials)project location (remoteness, transportation of materials)Availability of materials (materials availability in third Availability of materials (materials availability in third countries)countries)Complexity of project (installation of heating system etc,)Complexity of project (installation of heating system etc,) Mobilization of resourcesMobilization of resources


3. Department Execution of Works 3. Department Execution of Works


Dzongkahgs executing farm road constructions Dzongkahgs executing farm road constructions

Field Divisions of Department of Roads are executing Field Divisions of Department of Roads are executing rehabilitation works departmentally. rehabilitation works departmentally.

Contractors mostly at Class C and Petty are under-Contractors mostly at Class C and Petty are under-absorbed. absorbed.


3. Department Execution of Works 3. Department Execution of Works

Submission:Submission:

CAB would like to request the government to contract out CAB would like to request the government to contract out all works to the private sector.all works to the private sector.


4. Publication of Construction 4. Publication of Construction Cost Indices Cost Indices


Bhutan doesn't have our own cost indices to calculate Bhutan doesn't have our own cost indices to calculate cost escalation cost escalation

Some projects use Whole Sale Price Index of India which Some projects use Whole Sale Price Index of India which may not reflect the Bhutanese Scenario. may not reflect the Bhutanese Scenario.


4. Publication of Construction 4. Publication of Construction Cost Indices Cost Indices

SubmissionSubmission : :

The government need to mandate one relevant The government need to mandate one relevant organization to compile construction cost indices on a organization to compile construction cost indices on a monthly basis. monthly basis.


5. Tendering issues 5. Tendering issues

Problem Statement: Problem Statement: Un-uniform application of rules as listed below:Un-uniform application of rules as listed below:

Bid is not opened in case of single bidder Bid is not opened in case of single bidder Bids are rejected for simple reasonsBids are rejected for simple reasons Qualification criteria applied for works up to Nu. 5 Qualification criteria applied for works up to Nu. 5

million. million. Extra criteria are set such as requirement of proprietor Extra criteria are set such as requirement of proprietor

to be present at the bid opening. to be present at the bid opening.


6. Cost of Tender Documents 6. Cost of Tender Documents

Problem StatementProblem Statement::

Different agencies are setting varying cost of tender Different agencies are setting varying cost of tender documents documents

Some procuring agencies are setting un-reasonably high Some procuring agencies are setting un-reasonably high cost of tender documents (as high as Nu. 20,000.00) cost of tender documents (as high as Nu. 20,000.00)


6. Cost of Tender Documents 6. Cost of Tender Documents

Submission :Submission :

To have a uniformity in setting cost of tender documents.To have a uniformity in setting cost of tender documents.

To charge minimal cost covering for petty expenses To charge minimal cost covering for petty expenses


7. Informing Bidders while re-7. Informing Bidders while re-tendering tendering


Re-tendering is often imitated by procuring agenciesRe-tendering is often imitated by procuring agencies

Bidders are not informed after a decision has been made Bidders are not informed after a decision has been made to re-tender.to re-tender.


7. Informing Bidders while re-7. Informing Bidders while re-tendering tendering


Bidders may be informed right after a decision has been Bidders may be informed right after a decision has been made by the tender committee to re-tender. made by the tender committee to re-tender.

This would enable the bidders to collect their bid security This would enable the bidders to collect their bid security and prepare accordingly for the next biding. and prepare accordingly for the next biding.


8. Compensation for Cancellation 8. Compensation for Cancellation of work of work


Sometimes work award is cancelled due to inability to Sometimes work award is cancelled due to inability to secure funds for the work secure funds for the work

It becomes a case of complete lapses of the client. It becomes a case of complete lapses of the client.


8. Compensation for cancellation 8. Compensation for cancellation of work of work


Bidding may be initiated only after securing the funding.Bidding may be initiated only after securing the funding.

The winning bidder needs to be fairly compensated in The winning bidder needs to be fairly compensated in case of cancellation of work award. case of cancellation of work award.


Tashi Delek!Tashi Delek!

presentation by construction association of bhutan

Documents

bhutan doesnt

cost escalation

relaxed contract durations

fixed cost index

bsr cost index calculation

publication of bsrsubmission

project specific basis

unrealistic rates