Construction Association of Bhutan

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• Presentation
• by
• Construction Association of Bhutan

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Summary of Points

• Publication of BSR
• Allocation of Contract durations
• Departmental Execution of Works
• Publication of Construction Cost Indices
• Tendering Issues
• Cost of Tender Documents
• Informing the bidders in case of re-tendering
• Compensation for cancellation of work award

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1. Publication of BSR

• Problem Statement
• BSR is published only after few years time.
• Un-realistic rates in the BSR
• Cost index calculation is not carried out
  properly and on a project specific basis. Rather
  some fixed cost index is used all year around.

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1. Publication of BSR

• Submission
• BSR may be published annually
• Instead of three base towns, Phuntsholing,
  Samdrupjongkhar and Gelephu, the rates be may be
  published for Phuntsholing, Thimphu, Bumthang and
  Trashigang.
• The work of compilation and publication of BSR
  may be tendered out to the private sector and
  accordingly approved by the government.

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2. Allocation of Contract Duration

• Problem Statement
• Contract durations are fixed on an arbitrary
  basis
• Some contractors are provided with very relaxed
  Contract durations while the contract durations
  of some contractors are un-reasonably
  constricted.
• Various factors affecting the implementation are
  not considered while framing the contract
  durations

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2. Allocation of Contract durations

• Submission
• The following factors needs to be considered
  while allocating contract durations
• climatic conditions of project site (conditions
  during rainy season and winter season)
• project location (remoteness, transportation of
  materials)
• Availability of materials (materials
  availability in third countries)
• Complexity of project (installation of heating
  system etc,)
• Mobilization of resources

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3. Department Execution of Works

• Problem Statement
• Dzongkahgs executing farm road constructions
• Field Divisions of Department of Roads are
  executing rehabilitation works departmentally.
• Contractors mostly at Class C and Petty are
  under-absorbed.

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3. Department Execution of Works

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

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4. Publication of Construction Cost Indices

• Problem Statement
• Bhutan doesn't have our own cost indices to
  calculate cost escalation
• Some projects use Whole Sale Price Index of India
  which may not reflect the Bhutanese Scenario.

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4. Publication of Construction Cost Indices

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

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5. Tendering issues

• Problem Statement
• Un-uniform application of rules as listed below
• Bid is not opened in case of single bidder
• Bids are rejected for simple reasons
• Qualification criteria applied for works up to
  Nu. 5 million.
• Extra criteria are set such as requirement of
  proprietor to be present at the bid opening.

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5. Tendering issues

• Problem Statement
• Un-uniform application of rules as listed below
• Bid is not opened in case of single bidder
• Bids are rejected for simple reasons
• Qualification criteria applied for works up to
  Nu. 5 million.
• Extra criteria are set such as requirement of
  proprietor to be present at the bid opening.

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6. Cost of Tender Documents

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

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6. Cost of Tender Documents

• Submission
• To have a uniformity in setting cost of tender
  documents.
• To charge minimal cost covering for petty
  expenses

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7. Informing Bidders while re-tendering

• Problem Statement
• Re-tendering is often imitated by procuring
  agencies
• Bidders are not informed after a decision has
  been made to re-tender.

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7. Informing Bidders while re-tendering

• Submission
• Bidders may be informed right after a decision
  has been made by the tender committee to
  re-tender.
• This would enable the bidders to collect their
  bid security and prepare accordingly for the
  next biding.

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8. Compensation for Cancellation of work

• Problem Statement
• Sometimes work award is cancelled due to
  inability to secure funds for the work
• It becomes a case of complete lapses of the
  client.

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8. Compensation for cancellation of work

• Submission
• Bidding may be initiated only after securing the
  funding.
• The winning bidder needs to be fairly compensated
  in case of cancellation of work award.

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Tashi Delek!