Procure:ment of Works

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized STANDARD PREQtUALIFICATION DOCUJ MENTS FILE COPY Report No.:11855 Type: (PUB) Title: PROCUREMENT OF WORKS: MAJOR EQ Author: Ext.: 0 Room: Dept.: BOOKSTORE APRIL 1993 Procure:ment of Works Major Equipment and Industrial Installations Public Disclosure Authorized Public Disclosure Authorized The World Bank Washington, D.C. April 1993 April193 L

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3 STANDARD PREQUALIFICATION DOCUMENT,S Procurement of Works Major Equipment and Industrial Installations The World Bank Washington, D.C. April 1993

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5 Standard Prequalification Documents iii Preface Procurement under projects financed by the International Bank for Reconstruction and Development (IBRD), the World Bank, is carried out in accordance with policies and procedures laid down in the IBRD Guidelines: Procurement under IBRD Loans and IDA Credits', hereinafter referred to as the Procurement Guidelines. ISince the procurement requirements of the IBRD and its affiliate, the International Development Association (IDA), are identical, this document can also be used for procurement of works under projects financed by IDA. However, when drafting prequalification documents modeled on these standards, care should be taken to substitute "IDA" for "IBRD" and "credit" for "loan", where appropriate. The Standard Prequalification Documents in this publication have been prepared for use by Borrowers in the procurement of works, industrial plant and heavy equipment through international competitive bidding 2. The procedures they present are based on good international practice, and they comply with the Procurement Guidelines, and the procedures recommended in Procurement Technical Note (PTN) No. 3.01, Qualification of Bidders. 2Note, however, that the text of the Standard Prequalification Documents refers only to "works" or construction contracts. This was necessary to simplify presentation. For industrial plant, heavy equipment, and other types of contract, the text should be adapted to the needs of the specific procurement. At the end of this book, an Annex presents two explanatory sections, first, "Why Prequalification?", which explains the reasons for following this procedure and its advantages, and gives general guidance to Employers and their consultants. It is followed by "Principles and Procedures", which gives the basis for seeking information from applicants, and the procedures for evaluation of their submissions. Additional information on procurement under IBRD- or IDA-assisted projects can be obtained from: Procurement Policy and Coordination Unit Operations Policy Department The World Bank 1818 H Street, N.W. Washington, D.C U.S.A.

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7 Standard Prequalification Documents v Table of Contents How to Use This Book vii Invitation for Prequalification I Instructions to Applicants 3 Letter of Application 15 General Information 19 General Experience Record 21 Joint Venture Summary 23 Particular Experience Record 25 Details of Contracts of Similar Nature and Complexity 27 Summary Sheet: Current Contract Commitments / Works in Progress 29 Personnel Capabilities 31 Candidate Summary 33 Equipment Capabilities 35 Financial Capability 37 Litigation History 39 Annex 41

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9 Standard Prequalification Documents vii How to Use This Book 1. These Standard Prequalification Documents are intended to guide prequalifying applicants wishing to bid for large building, civil engineering, large plant, heavy equipment, and certain types of supply and erect contracts under international competitive bidding procedures. They include a form for Invitation for Prequalification, Instructions to Applicants, and a Letter of Application and attached standard forms for applicants to complete. 2. To simplify presentation, the text of the documents has been written for construction contracts (the most common application of prequalification procedures). Care should be taken when preparing Prequalification Documents for issue in specific cases to ensure that the prequalification criteria are clear and explicit, and that they refer to the needs and characteristics of the specific procurement. Where appropriate, "works" should be substituted by, for example, "equipment" or "plant", as the case may be, and "contractor" by "supplier" or "manufacturer" for example. The following directions should be observed when using these Standard Prequalification Documents: * The forms will require adaptation to a greater or lesser degree to suit the requirements of each proposed bid. * Specific details, such as the names of the Borrower and the Executing Agency, and the addresses for inquiries and submission of applications, should be furnished in the spaces indicated by the italicized notes within brackets. * The italicized notes and footnotes in the Standard Prequalification Documents are not part of the text; they contain guidance and instructions for the user. They should not be incorporated in actual prequalification documents. * Where alternative clauses or texts are shown, the user should select those that best suit the particular contract and discard the alternative text that is not used. Where carets are shown (< and >), deletions of text, words, or letters may be in order.

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11 Standard Prequalification Documents 1 Invitation for Prequalification Date: [date of issuing notice] Contract No<s>.: I. The [name of the Bori-ower] has received <applied for> a loan <credit> from the International Bank of Reconstruction and Development 3, hereinafter referred to as the IBRD, in various currencies towards the cost of [name of the Pr-oject] and intends to apply a portion of the proceeds of this loan to eligible payments under the contract<s> for which this Invitation for Prequalification is issued. 4 3 Substitute "credit" jor "loan" and "IDA" for "IBRD", where appropriate, throughouthese documents. 4I 221n projects cofinanced with other agencies, it may he necessary to insert suitable text that refers to the applicable procurement procedures. This is particularly important where the allocation of funds from the various lenders is not well defined before the prequalification process begins. 2. The [name of the Executing Agency], hereinafter "the Employer"' intends to prequalify contractors <firms> for the following <works> <contracts> under this project: [general project description] 6 5 The Borrower and the Employer may be the same or different entities. The text of the Invitation for Prequalification and the text of the other documents herein must be footnoted to indicate which agency will act as the Employer after a contract is awarded. 6 Describe the Project in sufficient detail to identify the location, nature, and complexity of the works or contracts. The information should be prepared for each contract "slice", if more than one contract is to be let concurrently as a "slice and package" procurement, based upon the estimated cost and duration of each slice. The estimated cost should not be disclosed in this Invitation or in the Instructions to Applicants. 3. It is expected that Invitations to Bid will be made in [month and year]. 4. Prequalification is open to firms and voluntarily forned joint ventures from eligible source countries as defined in the Guidelines: Procurement under IBRD Loans and IDA Credits. <Applications may be made for prequalification for one or more of the above contracts.>

12 2 Invitation for Prequalification 5. Eligible applicants may obtain the prequalification documents by calling, writing, faxing, or telexing: [name of the Employer and full address, including telephone, fax, and telex numbers, where the documents may be obtained]. 6. The request must clearly state "Request for Prequalification Documents for [name of the Project]. The documents are available for a nonrefundable fee of [amount and currency, and its equivalent in an internationally-traded currency, e.g., U.S. dollars] 7. The [name of the Employer] will promptly dispatch the documents by registered airmail, but under no circumstances will it be held responsible for late delivery or loss of the documents so mailed. j The fee chargeable should only be nominal, to cover reproduction and mailing costs only.l 7. A minimum requirement for qualification will be to have successfully carried out [minimum essential experience requirements, in accordance with the Instructions to Applicants]. 8. Submissions of Applications for Prequalification must be received in sealed envelopes, which must be either delivered by hand or by registered mail, to: [address] not later than: [date] 8 and be clearly marked "Application to Prequalify for [name of the Project and the contract name(s) and number(s)]". 8 The time allowed for preparation of the prequalification submission should be sufficient for applicants to gather all the information required, preferably 60 days, but in any case not less than 45 days, after the later of the date when the documents are available or the last date of the advertisement. This period may be longer for very large projects, where time should be allowed for the formation of joint ventures and assembly of the necessary resources. 9. The [name of the Employer] reserves the right to accept or reject late applications. 10. Applicants will be advised, in due course, of the results of their applications. Only firms and joint ventures prequalified under this procedure will be invited to bid.

13 Standard Prequalification Documents 3 [name of the Project] Instructions to Applicants [name of the Employer and/or Borrower] Date: [date of issuing notice] Contract No<s>.: 1. Scope of Bid 1.1 The [name of the Executing Agency and statement of its relationship with the Borrower] 9, hereinafter "the Employer", has received <applied for> a loan <credit> from the International Bank of Reconstruction and Development" 0, hereinafter referred to as the IBRD, toward the cost of [name of the Project] and intends to apply a portion of the proceeds of this loan to eligible payments under the contract<s> for which this Invitation for Prequalification is issued." Payments by the IBRD will be made only at the request of [name of the Bolrower] and upon approval by the IBRD and will be subject in all respects to the terms and conditions of the Loan Agreement. No party other than [name of the Borrower] shall derive any rights from the Loan Agreement or have any right to the loan proceeds. 9 The Borrower and the Employer may be the same or different entities. The text of the Invitation for Prequalification and the text of the other documents herein must be footnoted to indicate which agency will act as the Employer after a contract is awarded. 10 Substitute "credit" for "loan" and "IDA" for "IBRD", where appropriate, throughout these documents. In projects cofinanced with other agencies, it may he necessary to insert suitable text referring to the procurement procedures that will apply. This is particularly important where the allocation of funds from the various lenders is not well defined before the prequalification process begins.

14 4 Instructions to Applicants 1.2 The Employer intends to prequalify contractors for the following <works> <contracts> under the Project: [general description of the Project] 1 2. <Applications may be made to prequalify for one or more of the above contracts.> It is expected that Invitations to Bid will be made in [month and year]. 12 Describe the Project in sufficient detail to identify the location, nature and complexity of the works or contracts. The information should he prepared for each contract "slice", if more than one contract is to be let concurrently as a "slice and package" procurement, based upon the estimated cost and duration of each slice. The estimated cost should not be disclosed in these Instructions or in the Invitation for Prequalification. 1.3 Prequalification is open to firms and voluntarily formed joint ventures from eligible source countries as defined in the Procurement Guidelines. Domestic contractors may apply for qualification independently or in joint venture with foreign contractors. 1.4 General information on the climate, hydrology, topography, access to site, transportation and communications facilities, medical facilities, Project layout, expected construction period, facilities, and services provided by the Employer, and [other relevant data] is attached on a separate sheet. The contract will be a <unit price> <lump sum> <turnkey> contract. The bidding documents will be modelled on the IBRD Sample Bidding Documents for <Procurement of Works> <Procurement of Works (Smaller Contracts)> <Turnkey Contracts>, including their currency and securities provisions.

15 Standard Prequalification Documents 5 2. Submission 2.1 Submission of applications for prequalification must be received in of sealed envelopes, which must be either delivered by hand or by Applications registered mail, at [address] not later than [date] 13 and be clearly marked "Application to Prequalify for [names of the Project and contract(s), and any applicable number(s)]". The Employer reserves the right to accept or reject late applications. 13 The time allowedfor preparation of the prequalification submission should be sufficient for applicants to gather all the information required, preferably 60 days, but in any case not less than 45 days, after the later of the date when the documents are available, or the date of the advertisement. This period may be longer for very large projects, where time should be allowed for the formation oj joint ventures and assembly of the necessary resources. 2.2 The name and mailing address of the Applicant shall be clearly marked on the envelope. 2.3 All the information requested for prequalification shall be answered in the [name of the language] 4 language by foreign applicants and joint ventures including foreign firms. Where information is provided in another language this shall be accompanied by a translation of its pertinent parts into [same language]. This translation will govern and be used for interpreting the information. Submissions by domestic firms applying on their own may be written in [local language]. 14 The language to be used shall be that in which the prequalification documents are written. English, French, or Spanish should be used in International Competitive Bidding. 2.4 Failure to provide information which is essential to evaluate the Applicant's qualifications, or to provide timely clarification or substantiation of the information supplied may result in disqualification of the Applicant.

16 6 Instructions to Applicants The following paragraph should only be used if a clarification meeting is planned. Such meetings should normally be called only for very large andlor complex contracts. 2.5 A clarification meeting will be held at [time, date, and place] at which prospective applicants may request clarification of the Project requirements and the criteria for qualification. The criteria outlined in the following paragraphs are typical of those used in works contracts. Different criteria should be devised for the prequalification of suppliers or manufacturers of equipment and industrial plant, for example. For the prequalification of contractors for contracts to be bid on a "slice and package" basis, capacity criteria should be established for the smallest "slice", a range of likely combination of slices, and the whole "package"; applicants should be classified in accordance with their capacities, in respect of the number of slices they can contract for, or the total package. 3. Qualification 3.1 Prequalification will be based on meeting all the following rninimum Criteria pass/fail criteria regarding the Applicant's general and particular experience, personnel and equipment capabilities, and financial position, as demonstrated by the Applicant's responses in the forms attached to the Letter of Application (specific requirements for joint ventures are given under paras. 4.1 and 4.2 below). The Employer reserves the right to waive minor deviations, if they do not materially affect the capability of an applicant to perform the contract. Subcontractors' experience and resources shall not be taken into account in determining the Applicant's compliance wvith the qualifying criteria." 5 15 Exceptions mnay be made when highly specialized inputs (essential for executi on of'the Contract but amounting to a relatively small pr-opolrtion of its total cost) aree requilredfi-om specialist subcontractors.

17 Standard Prequalification Documents General Experience. The Applicant shall meet the following minimum criteria: (a) average annual turnover (defined as billing for works in progress and completed) over the last five years of US$ 16 equivalent; and (b) successful experience as prime contractor in the execution of at least three projects' 7 of a nature and complexity comparable to the proposed contract within the last five years; this experience should include 18 16Usually not less than five times the estimated annual cash flow in the proposed contract or works. The coefficient may be smallerfor very large contracts. 17 This criterion must be made more rigorous in projects requiring consiaerable specialized experience (see Annex, para. 8). 18 Indicate an annual production rate for the key construction activity (or activities) in the proposed contract or works, e.g., "One million m 3 of rock placed in rockfill dams in one year". The annual rate should be a percentage (say 80 percent) of the expected peak r ate of construction for the key activity (or activities) in the contract or works. 3.3 Personnel Capabilities. The Applicant must have suitably qualified personnel to fill the following positions" 9. The Applicant will supply information on a prime candidate and an alternate for each position, both of whom should meet the experience requirements specified below: Position Total experience In similar works As manager of (years) (years). similar works (years) Project manager Altemate Other position ;... Altemate 19List only key management and specialist positions. Do not include all principals, head office personnel who are not key to the Project, and other nonspecialist personnel.

18 8 Instructions to Applicants 3.4 Equipment Capabilities. The Applicant should own, or have assured access to (through hire, lease, purchase agreement, availability of manufacturing capacity, or other means), the following key items of equipment in full working order, and must demonstrate that, based on known commitments, they will be available for use in the proposed contract 20. The Applicant may also list alternative equipment which he would propose for the Contract, together with an explanation of the proposal. Equipment type and characteristics 1. Minimum number required Para. 3.4 applies mainly to construction works. However, it may be adapted for some heavy engineering contracts, supply and erect, and other contracts requir-ing production capacity. Insert a list of the key equipment needs based on specific items or per formance criteria, as appropriate. The items listed shall be limited to major items of equipment crucial to the proper and timely execution of the contract, and which applicants may not readily be ahle to purchase, hire, or lease in the required time fi-ame. 3.5 Financial Position. The Applicant should demonstrate thatt he has access to, or has available, liquid assets, unencumbered real assets, lines of credit, and other financial means sufficient to meet the construction cash flow for a period of months, estimated as US$ equivalent 21, net of the Applicant's commitments for other contracts. 2 1 Calculate the cash flow for a number of months, determined as the total time needed by the Employer to pay a contractor' s invoice, allowing for (a) the time of construction, fi-om the beginning of the month invoiced; (b) the time needed by the Engineer to issue the monthly certificate; and (c) the time needed by the Employer to pay the amount certified. The assessment may be based on a straight line projection of the estimated cash flow requirement, neglecting the effect of any advance payments and retention monies. Where the prequalification refers to more than one contractlworks to be awarded on a "slice and package" basis, paras should be expanded to list the requirements for the smallest "slice", any combination of slices, and fbr the whole "package".

19 Standard Prequalification Documents The audited balance sheets 22 for the last five years should be submitted and must demonstrate the soundness of the Applicant's financial position, showing long-term profitability. Where necessary, the Employer will make inquiries with the Applicant's bankers. 22 Firms owned by individuals and partnerships may not be r equilred to maintain audited balance sheets by the laws of their countries of origin. In such cases, the audit requirement may be relaxed by the Employer. 3.7 Litigation History. The Applicant should provide accurate information on any litigation or arbitration resulting from contracts completed or under execution by him over the last five years. A consistent history of awards against the Applicant or any partner of a joint venture may result in failure of the application. 4. Joint 4.1 Joint ventures must comply with the following requirements: Ventures (a) Following are the minimum qualification requirements: (i) The lead partner shall meet not less than [determine and insert the appropriate percentage which, exceptfor very large projects, shall be not less than 40 percent] percent of all the qualifying criteria given in paras. 3.2 and 3.5 above Care should be exercised in drafting this requirement. In certain types of projects, joint ventures are formed by assembling the specialist skills of various contractors (e.g., civil, electrical, mechanical, and industrial). In such cases, the provisions referring to the lead partner and "other partners" (para. 4.1(ii)) must be tailored to the particular circumstances of the Project. (ii) The other partners shall meet not less than [determine and insert the appropriate percentage which, exceptjor veiy large projects, shall be not less than 25 percent] percent of all the qualifying criteria given in paras. 3.2 and 3.5 above. (iii) The joint venture must satisfy collectively the criteria of paras. 3.3, 3.4, and 3.5, for which purpose the relevant figures for each of the partners shall be added together to arrive at the joint venture's total capacity. Individual members must each satisfy the requirements of paras. 3.6 and 3.7 above.

20 10 Instructions to Applicants (b) The formation of a joint venture after prequalification, and any change in a prequalified joint venture, will be subject to the written approval of the Employer prior to the deadline for submission of bids. Such approval may be denied if (i) partners withdraw from a joint venture and the remaining partners do not meet the qualifying requirements; (ii) the new partners to a joint venture are not qualified, individually or as another joint venture; or (iii) in the opinion of the Employer, a substantial reduction in competition may result. (c) Any bid shall be signed so as to legally bind all partners, jointly and severally, and any bid shall be submitted with a copy of the joint venture agreement providing the joint and several liability with respect to the contract. 4.2 The prequalification of a joint venture does not necessarily prequalify any of its partners individually or as a partner in any other joint venture or association. In case of dissolution of a joint venture, each one of the constituent firms may prequalify if they meet all the prequalification requirements, subject to the written approval of the Employer. 5. Public Sector 5.1 Majority publicly-owned enterprises domiciled in the host country may Companies be eligible to qualify if, in addition to meeting all the above requirements, they are also: (a) commercially-oriented legal entities distinct from the Employer, and are not a government department; (b) financially autonomous, as demonstrated by requirements in their constitutions to provide separate audited accounts and return on capital, powers to raise loans and obtain revenues through the sale of goods or services; and (c) managerially autonomous. 6. Conflict of 6.1 The Applicant (including all members of a joint venture) must not be Interest associated, nor have been associated in the past, with the consultant or any other entity that has prepared the design, specifications, and other prequalification and bidding documents for the Project, or that was proposed as Engineer for the Contract, over the last five years. Any such association may result in the disqualification of the Applicant.

21 Standard Prequalification Documents Updating 7.1 Bidders shall be required to update the financial information used for Prequalifica- prequalification at the time of submitting their bids, to confirm their tion continued compliance with the qualification criteria and verification Information of the information provided. A bid shall be rejected if the Applicant's qualification thresholds are no longer met at the time of bidding. If the 7% percent "works" preference for domestic bidders will apply in procurement for the Project, the following paragraphs should be inserted. These paragraphs may be used only where the domestic preference is expressly permitted by the Loan Agreement, at the request of the Borrower. Domestic preference is permitted only in countries with a per capita GNP below the threshold set by the International Economics Department (IEC) of IBRD. (The FY93 guideline, dated August 24, set the threshold at US$635, 1991 values. This figure is adjusted annually by IEC.) Do not use these paragraphs where the domestic preference does not apply, or for prequalification not involving works contracts. In cases where the domestic preference for "Goods" or the "Industrial Model" may apply, paras must be suitably reworded. 8. Domestic 8.1 A 71/2 percent margin of preference for domestic bidders will apply in Preference bid evaluation. At the time of inviting bids, prequalified bidders will be advised if they will, individually or as a joint venture, qualify for the domestic preference. 8.2 To qualify for the preference, individual firms must: (a) be registered in [name of the Borrower's country]; (b) have majority ownership by nationals of of the Borrower's country]; [name (c) not subcontract more than 50 percent of the value of the contract to foreign contractors; and (d) [The borrowing country and the Employer may add other criteria acceptable to IBRD. These additional criteria should not affect competition among potential bidders.] 8.3 Joint ventures between domestic and foreign firms shall be eligible for the margin of preference provided the domestic partner or partners: (a) individually satisfy the above criteria of eligibility for the preference;

22 12 Instructions to Applicants (b) demonstrate a beneficiary interest of no less than 50 percent in the joint venture, as demonstrated by the profit and loss sharing provisions, if any, of the joint venture agreement; (c) will, under the arrangements proposed, carry out at least 50 percent of the works measured in terms of value (always provided that the domestic partner or partners are qualified to carry out the amount of work, in accordance with the prequalification criteria), including any services provided by the partners and fees and expenses paid to the partners; and (d) [The borrowing country and the Employer may add other criteria acceptable to the IBRD. These additional criteria should not affect competition among potential bidders.] End of paragraphs applicable to domestic preference. Renumber subsequent sections if paras. 8.1, 8.2, and 8.3 are not used. 9. General 9.1 Only firms and joint ventures that have been prequalified under this procedure will be invited to bid. A qualified firm or a member of a qualified joint venture may participate in only one bid for the contract. If a firm submits more than one bid, singly or in joint venture, all bids including that party will be rejected. This rule will not apply in respect of bids which include specialist subcontractors who are used by more than one bidder. 9.2 Bidders will be required to provide bid security in the form of a bond, banker's guarantee, or other security acceptable to the Employer for an amount of 24, and the successful bidder will be required to provide performance security <and domestic preference security 2 5 >. Examples of acceptable forms will be supplied with the bidding documents. 24 lnsert either a minimum percentage of the bid price or a figure based on the Employer's cost estimate. The amount should be the equivalent of I percent of the estimated cost of the contract for very large contracts of over $100 million, ranging up to 3 percent for smaller contracts. 25 If applicable.

23 Standard Prequalification Documents The Employer reserves the right to: (a) amend the scope and value of any contract<s> to be bid, in which event the contract<s> will only be bid among those prequalified bidders who meet the requirements of the contract<s> as amended; (b) reject or accept any application; and (c) cancel the prequalification process and reject all applications. The Employer shall neither be liable for any such actions nor be under any obligation to inform the Applicant of the grounds for them. 9.4 Applicants will be advised in writing by fax or telex, within [number, usually days] days of the date for submission of applications (para. 2.1 above), of the result of their application, and the names of the prequalified applicants, without assigning any reason for the Employer's decision.

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25 Standard Prequalification Documents 15 Letter of Application [letterhead paper of the Applicant, or partner responsible for a joint venture, including full postal address, telephone no., fax no., telex no., and cable address] Date:... To: [name and address of the Employer] Sirs, 1. Being duly authorized to represent and act on behalf of... (hereinafter "the Applicant"), and having reviewed and fully understood all the prequalification informnation provided, the undersigned hereby apply to be prequalified by yourselves as a bidder for the following contract<s> under the... [name of the Project] project: Contract number Contract name <Note: The Applicant is to delete, in ink, any contract for which he does not wish to prequalift, and sign and date the deletion.> *f the prequalification refers to only one contract, delete this note and spaces for additional contract references. I

26 16 Letter of Application 2. Attached to this letter are copies of original documents defining': (a) the Applicant's legal status; (b) the principal place of business; and (c) the place of incorporation (for applicants who are corporations); or the place of registration and the nationality of the owners (for applicants who are partnerships or individually-owned firms). 3. Your Agency and its authorized representatives are hereby authorized to conduct any inquiries or investigations to verify the statements, documents, and information submitted in connection with this application, and to seek clarification from our bankers and clients regarding any financial and technical aspects. This Letter of Application will also serve as authorization to any individual or authorized representative of any institution referred to in the supporting information, to provide such information deemed necessary and requested by yourselves to verify statements and information provided in this application, or with regard to the resources, experience, and competence of the Applicant. 4. Your Agency and its authorized representatives may contact the following persons for further information 2 : General and managerial inquiries Contact 1 Telephone 1 Contact 2 Telephone 2 Personnel inquiries Contact 1 Telephone 1 Contact 2 Telephone 2 For applications by joint ventures, all the information requested in the prequalification documents is to be provided for the joint venture, if it already exists, and for each party to the joint venture separately. The lead partner should be clearly identified. Each partner in the joint venture shall sign the letter. 2 Applications by joint ventures should provide on a separate sheet equivalent information for each party to the application.

27 Standard Prequalification Documents 17 Technical inquiries Contact 1 Telephone 1 Contact 2 Telephone 2 Financial inquiries Contact 1 Contact 2 Telephone 1 Telephone 2 5. This application is made in the full understanding that: (a) bids by prequalified applicants will be subject to verification of all information submitted for prequalification at the time of bidding; (b) your Agency reserves the right to: * amend the scope and value of any contracts bid under this project; in such event, bids will only be called from prequalified bidders who meet the revised requirements; and * reject or accept any application, cancel the prequalification process, and reject all applications, and (c) your Agency shall not be liable for any such actions and shall be under no obligation to inform the Applicant of the grounds for them. Applicants who are not entitled to domestic preference in bid evaluation should delete para. 6, initial the deletion, and renumber the subsequent paragraphs. 6. The undersigned confirm that the Applicant meets the eligibility requirements regarding domestic preference, and request any bid made be assessed on this basis.

28 18 Letter of Application Applicants who are not joint ventures should delete paras. 7 and 8 and initial the deletions. 7. Appended to this application, we give details of the participation of each party, including capital contribution and profit/loss agreements, to the joint venture or association. Wme also specify the financial commitment in terms of the percentage of the value of the <each> contract, and the responsibilities for execution of the <each> contract. 8. We confirm that in the event that we bid, that bid as well as any resulting contract will be: (a) signed so as to legally bind all partners, jointly and severally; and (b) submitted with a joint venture agreement providing the joint and several liability of all partners in the event the contract is awarded to us. 9. The undersigned declare that the statements made and the information provided in the duly completed application are complete, true, and correct in every detail. Signed Signed I... Name Name For and on behalf of (name of Applicant or lead partner of a joint venture) For and on behalf of (name of partner) Signed Signed..q i......i...i... ame Name For and on behalf of (name of partner) For and on behalf of (name of partner) Signed Signed......I...I... Name Name For and on behalf of (name of partner) For and on behalf of (name of partner)

29 Standard Prequalification Documents 19 APPLICATION FORM (1) PAGE _ OF PAGES General Information All individual firms and each partner of a joint venture applying for prequalification are requested to complete the information in this form. Nationality information to be provided for all owners or applicants who are partnerships or individually-owned firms. Where the Applicant proposes to use named subcontractors for critical components of the works, or for work contents in excess of 10 percent of the value of the whole works, the following information should also be supplied for the specialist subcontractor(s). 1. Name of firm 2. Head office address Telephone Contact 4. Fax Telex 5. Place of incorporation / registration Year of incorporation I registraton Name Nationality of owners' Nationality To be completed by all owners of partnerships or individually-owned firms.

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31 Standard Prequalification Documents 21 APPLICATION FORM (2) PAGE _ OF PAGES General Experience Record Name of Applicant or partner of a joint venture All individual firms and all partners of a joint venture are requested to complete the information in this form. The information supplied should be the annual turnover of the Applicant (or each member of a joint venture), in terms of the amounts billed to clients for each year for work in progress or completed, converted to U.S. dollars at the rate of exchange at the end of the period reported. Use a separate sheet for each partner of a joint venture. Applicants should not be required to enclose testimonials, certificates, and publicity material with their applications; they will not be taken into account in the evaluation of qualifications. Annual tumover data (construction only) Year Turnover US$ equivalent

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33 Standard Prequalification Documents 23 APPLICATION FORM (2A) PAGE _ OF PAGES Joint Venture Summary Names of all partners of a joint venture 1. Lead partner 2. Partner 3. Partner 4. Partner 5. Partner 6. Partner Total value of annual construction turnover, in terms of work billed to clients, in US$ equivalent, converted at the rate of exchange at the end of the period reported: Annual turnover data (construction only; US$ equivalent) Partner 1. Lead partner 2. Partner Form 2 Year I Year 2 Year 3 Year 4 Year 5 page no. 3. Partner 4. Partner 5. Partner 6. Partner Totals

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35 Standard Prequalification Documents 25 APPLICATION FORM (3) PAGE OF PAGES Particular Experience Record Name of Applicant or partner of a joint venture To prequalify, the Applicant shall be required to pass the specified requirements applicable to this form, as set out in the "Prequalifcation Instructions to Applicants". On a separate page, using the format of Form (3A), each applicant or partner of a joint venture is requested to list all contracts of a value equivalent to USS... million, of a similar nature and complexity to the contract for which the Applicant wishes to qualify, undertaken during the last five years.' The value should be based on the currencies of the contracts converted into U.S. dollars, at the date of substantial completion, or for current contracts at the time of award. The information is to be summarized, using Form (3A), for each contract completed or under execution by the Applicant or by each partner of a joint venture. Where the Applicant proposes to use named subcontractors for critical components of the works, or for work contents in excess of 10 percent of the value of the whole works, the information in the following forms should also be supplied for each specialist subcontractor. IWhere applications are being invited for a number of contracts, suitable wording should be introduced, to allow applicants to apply for individual contracts or groups of contracts.

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37 Standard Prequalification Documents 27 APPLICATION FORM (3A) PAGE OF PAGES Details of Contracts of Similar Nature and Complexity Name of Applicant or partner of a joint venture Use a separate sheetfor each contract. 1. Number of contract Name of contract Country 2. Name of employer 3. Employer address 4. Nature of works and special features relevant to the contract for which the Applicant wishes to prequalify _.. _._ _ Contract role (check one) 0 Sole contractor 0 Subcontractor 0 Partner in a joint venture 6. Value of the total contract (in specified cunrencies at completion, or at date of award for current contracts). Currency Currency Curreicy 7. Equivalent value US$ 8. Date of award 9. Date of completon 10. Contract duraton (years and onffhs) 11. Specified requirements' - years months _ I Insert any specific criteria required for particular operations, such as annual volume of earthmoving, underground excavation, or placing concrete.

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39 Standard Prequalification Documents 29 APPLICATION FORM (4) PAGE OF PAGES Summary Sheet: Current Contract Commitments / Works in Progress Name of Applicant or partner of a joint venture Applicants and each partner to an application should provide information on their current commitments on all contracts that have been awarded, orfor which a letter of intent or acceptance has been received, orfor contracts approaching completion, but for which an unqualified, full completion certificate has yet to be issued Name of contract Value of outstanding Estimated,completion work (current US$ date equivalent)

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41 Standard Prequalification Documents 31 APPLICATION FORM (5) PAGE _ OF PAGES Personnel Capabilities Name of Applicant For specific positions essentid to contract implementation, applicants should provide the names of at least two candidates qualified to meet the specified requirements statedfor each position. The data on their experience should be supplied in separate sheets using one Form (5A) for each candidate. 1. TWie of position Name of prime candidate Name of altemate candidate 2. Tite of position Name of prime candidate Name of alternate candidate 3. Title of position Name of prime candidate Name of altemate candidate 4. Tite of position Name of prime candidate Name of altemate candidate

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43 Standard Prequalification Documents 33 APPLiCATION FORM (5A) PAGE _ OF PAGES Candidate Summary Name of Applicant Position Candidate 1. Name of candidate 2. Date of birth information 3. Professional qualifications Candidate 0 Prime 0 Altemate... Present employment 4. Name of employer Address of employer...._.._... =... Telephone Fax Job title of candidate Contact (manager / personnel officer) Telex Years with present employer Summarize professional experience over the last 20 years, in reverse chronological order. Indicate particular technical and managerial experience relevant to the Project. From To Company / Project / Position / Relevant technical and management experience I

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45 Standard Prequalification Documents 35 APPLICATION FORM (6) PAGE OF _ PAGES Equipment Capabilities Name of Applicant The Applicant shall provide adequate information to demonstrate clearly that it has the capability to meet the requirements for each and all items of equipment listed in the Instructions to Applicants. A separate Form (6) shall be prepared for each item of equipment listed in para. 3.4 of the Instructions to Applicants, or for alternative equipment proposed by the Applicant. Item of equipment Equipment 1. Name of manufacturer 2. Model and powe rating information 3. Capacity 4. Year of manufacture Current status 5. Current location 6. Details of current commitments...i... Source 7. Indicate source of the equipment O Owned 0 Rented 0 Leased 0 Specialiy manufactured Omit the following information for equipment owned by the Applicant or partner. Owner 8. Name of owner 9. Address of owner... Telephone Fax Contact name and tite itelex Agreements Details of rental / lease I manufacture agreements specific to the Project......

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47 Standard Prequalification Documents 37 APPLICATION FoRM (7) PAGE _ OF PAGES Financial Capability Name of Applicant or partner of a joint venture Applicants, including each partner of a joint venture, should providefinancial information to demonstrate that they meet the requirements stated in the Instructions to Applicants. Each applicant or partner of a joint venture must fill in this form. If necessary, use separate sheets to provide complete banker information. A copy of the audited balance sheets should be attached. Banker Name of banker Address of banker... I Telephone Contact name and title Summarize actual assets and liabilities in U.S. dollar equivalent (at the rates of exchange current at the end of each year) for the previous five years. Based upon known commitments, summarize projected assets and liabilities in U.S. dollar equivalentfor the next two years. Financial Actual: Projected: information in previous five years next two years US$ equivalent Total assets 2. Current assets 3. Total liabilities 4. Current liabilities 5. Profits before taxes 6. Profits after taxes

48 38 Financial Capability Specify proposed sources of financing to meet the cash flow demands of the Project, net of current commitments (Instructions to Applicants, para. 3.5). Source of financing 1. Amount (US$ equivalent) Attach auditedfinancial statementsfor the lastfive years (for the individual applicant or each partner of a joint venture). Firms owned by individuals, and partnerships, may submit their balance sheets certified by a registered accountant, and supported by copies of tax returns, if audits are not required by the laws of their countries of origin.

49 Standard Prequalification Documents 39 APPLICATION FORM (8) PAGE OF PAGES Litigation History Name of Applicant or partner of a joint venture Applicants, including each of the partners of a joint venture, should provide information on any history of litigation or arbitration resultingfrom contracts executed in the lastfive years or currently under execution (Instructions to Applicants, para. 3.7). A separate sheet should be usedfor each partner of a joint venture. Year Award FOR Name of client, cause of litigation, and matter in or AGAINST dispute Applicant Disputed amount (current value, US$ equivalent) I I I I......I I I I I I b#

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51 Standard Prequalification Documents 41 Annex Why Prequalification? Competitive Bidding for Construction Works 1. The successful execution of contracts for large buildings, civil engineering, supply and erect projects, and major, custom-made equipment requires that contracts are awarded to competent contractors, usually on the basis of competitive bidding procedures. Large contracts financed under loans from the IBRD (or IDA credits) are awarded, as a rule, through International Competitive Bidding (ICB). The Requirement for Prequalification of Bidders 2. This document relates specifically to the selection of competent bidders, prior to the issue of the invitations to bid, a procedure known as prequalification. The Procurement Guidelines recommend prequalification of contractors "for large or complex works and, exceptionally, for custom designed equipment and specialized services" (para ). Prequalification is also desirable in other circumstances, for example, in sector projects with a programmatic approach, and when a large number of contracts are let on a "slice and package" basis. 3. The qualification of a bidder is a separate process from the bid evaluation procedure, which concentrates on the price and merits of the bid itself. For further details of the bid evaluation procedure, refer to IBRD's Sample Bidding Documents-Procurement of Works (1991) or other relevant IBRD Sample Bidding Documents. Benefits of Prequalification 4. The prequalification process is of advantage to bidders and Borrowers' alike. 5. The prequalification process enables bidders who may be insufficiently qualified on their own to avoid the expense of bidding or to form a joint venture, which may give a better chance of success. The well-qualified firms may also price their bids with the knowledge that they will be competing with other qualified bidders meeting realistic minimum competence criteria. The assurance that inadequately qualified competitors will be excluded from bidding thus encourages leading contractors or suppliers to bid. I "Borrower" denotes an IBRD or IDA borrower or the executing agency delegated by the Borrower to execute the project.

52 42 Annex 6. Prequalification enables Borrowers to assess the interest generated by the project among qualified firms, and to make any necessary adjustments in the procurement process (including, in particular, the conditions of contract-sharing of risk, payment terms, liquidated damages, or completion times, which may be perceived as onerous by potential bidders) in the event that only a limited number of applications are received; to reduce the amount of work and time involved in evaluating bids from unqualified contractors or suppliers; to encourage local firms to form joint ventures with other local or international firms, thereby benefitting from their resources and experience; to assess the likelihood of contractors' or suppliers' eligibility for domestic preference in countries where this is applicable; and to reduce significantly, if not eliminate, problems associated with low prices submitted by bidders of doubtful capability. Basis for Prequalification 7. Under IBRD-financed projects, the loan recipient (the "Employer" in this document) is responsible for preparing the prequalification documents and evaluating the applicants. The prequalification documents should provide a clear basis upon which prospective bidders can be evaluated, following an objective process based on fair and transparent criteria. The documentation sought should always be relevant, clearly stated and, so that prospective bidders are not deterred, not impose an excessive burden of preparation or paperwork. 8. Prequalification should be denied only to those prospective bidders who do not meet the specified criteria. Thus, those who prepare prequalification documentation for a project are responsible for ensuring that the criteria are drawn in accordance with the realistic needs of the project and that the criteria are sufficiently stringent to assure that only properly qualified firms are included in the final list. Excessively "soft" criteria may result in an excess of unsuitably qualified applicants and may lead to (a) deterring the better qualified firms from bidding and (b) obtaining a low bid from a marginally qualified contractor or supplier. 9. IBRD does not accept blanket "black listing" of contractors or suppliers. In principle, a firm that did not perform well in a prior contract should be given a chance to mend its ways and improve its performance if it shows that it has corrected the problems that originally caused its prior poor performance. The evaluation of applicants for prequalification must therefore be based on the evidence submitted by the Applicant, and not on a black list, which may be based on out-of-date information or irrelevant data. Current poor performance may be a criterion for disqualifying an applicant if suitable steps are not being taken to correct it. Such action would have to be reviewed by IBRD on a case-by-case basis. 10. Since prequalification is a preliminary stage in the process of awarding a contract to a competent bidder, the Borrower must be able to verify the statements made by the applicants and to retain the right to solicit information from their past employers and financial institutions. Because there may be many applicants at the prequalification stage, the extent of verification should be limited to significant issues, with applicants being afforded the

53 Standard Prequalification Documents 43 benefit of reasonable doubt. In subsequent stages of the procurement process, such doubts may be investigated if they remain relevant. Principles and Procedures Eligibility to Prequalify 1 1. The prequalification process should not be used to limit the number of bidders, and all prequalified bidders must be permitted to bid. Some countries maintain registers of firms that meet preset qualification requirements. Such registers are not a substitute for the prequalification process under International Competitive Bidding. 12. Prequalification in IBRD-funded projects is open to contractors or suppliers, and joint ventures from eligible source countries, as defined in the Procurement Guidelines. Advertisement 13. The prequalification of bidders should be advertised following the procedures for Notification and Advertising specified in the Procurement Guidelines (paras. 2.8 and 2.9). Adequate time for response should be allowed. Prequalification Criteria to Be Preset 14. The Procurement Guidelines (para. 2.10) require that a clear statement of the requirements for qualification should be sent to all applicants who wish to be considered for prequalification. The Procurement Guidelines also require the Borrower, before prequalification is invited, to inform IBRD in detail of the procedure to be followed, and to introduce such modifications in the procedure as IBRD reasonably requests Hence, the specific criteria, and the prequalification document as a whole, must be considered with care as early as possible in the procurement process. However, the prequalification documents should be issued only at such time as the preparation of engineering designs and bid documents is well advanced, and the works are reasonably well defined. 2 To facilitate the process of review by Bank staff, IBRD borrowers should state if, and to what extent, these standard documents have been used in the preparation of the prequalification documents when these are submitted to the IBRD for review.

54 44 Annex Two-Envelope System 16. The evaluation of prequalification applications should precede the issue of invitations to bid. Procedures such as the "two-envelope system"-which entails submitting prequalification and bid documents at the same time, in separate envelopes-do not meet the requirements of the Procurement Guidelines and defeat one of the key objectives of prequalification-that of saving unqualified bidders the expense of bidding. The two-envelope system should not be used in International Competitive Bidding. Cofinanced Projects 17. Individual contracts may be financed jointly by the IBRD and other lenders, only if the colenders agree to apply the Procurement Guidelines. The procurement process is then the same as in any project funded by the IBRD alone. The procurement documents should state that IBRD procurement procedures will apply. 18. However, there is not always a full agreement among cofinanciers on the procurement procedures to be followed. In such cases, specific discrete contracts are procured, following the respective cofinanciers' rules, under "parallel cofinancing" arrangements. The prequalification documents must then address the requirements of the respective cofinanciers for the contracts they finance. 19. In some cases, the cofinancing arrangements (including the extent of the participation of the various colenders, the allocation of their funds to the various discrete elements of the project, and the extent to which joint cofinancing will apply) may not have been determined at the time of inviting firms for prequalification, and therefore the prequalification requirements for the various elements of the project would not be known. The prequalification documents should make the position clear to the applicants and allow for possible subdivision of the project into discrete elements for a potential parallel cofinancing arrangement. S,ee also Operations Policy Note 4.08, Procurement in Cofinanced Projects (to be replaced by Procurement Technical Note 1.5, same title). Multiple Contracts 20. Where a project may be divided into separate contracts (slices) that may be combined into groups of contracts (packages), applicants may be invited to prequalify for each specific contract separately, or for a package of contracts which are essentially of a similar type and size ("slice and package" procedure-see Procurement Guidelines, para. 2.5). Applicants should be asked to state for which "slices" or "packages" they wish to prequalify. Applicants may prequalify for a specific contract, any single contract, any combination of contracts, or the entire package.

55 Standard Prequalification Documents An applicant may be allowed to bid for any contract for which he is prequalified, and he may be awarded more than one, depending on his capacity to carry out a combination of contracts. In such cases, awards are made by the Borrower on the basis of the "slice and package" procedure, based on the least cost for the entire project. Subcontractors 22. The experience and financial resources of subcontractors may not be added to those of the Applicant for purposes of prequalification. In cases where a highly specialized process must be used, applicants should be required to specify the name and qualifications of such a subcontractor, if the particular process is not available in-house. Lack of such specialized support, essential in certain construction operations requiring, for example, chemical grouting or underwater repair work, could result in disqualification of the Applicant. Joint Ventures and Other Forms of Association 23. The IBRD encourages the formation of joint ventures of contractors or suppliers from the Borrower's country with foreign contractors or suppliers, but does not accept conditions for prequalification or bidding which make such joint ventures mandatory. 24. When two or more firms apply jointly for prequalification, special considerations must be met. The prequalification document must set out clearly the conditions applying to such joint ventures, whether existing or proposed; to any change in the membership of the joint ventures; or to the association of prequalified firms after prequalification. Each party of the joint venture must submit the complete documentation required of an individual firm applying for prequalification. 25. The requirements described for joint ventures apply to associations, partnerships, consortia, and other ventures in which firms associate with each other formally for the purpose of carrying out a contract jointly. Partners of a joint venture must confirm that, if prequalified, the joint venture bid will be submitted with a formal joint venture agreement and that all parties to that agreement will be legally bound jointly and severally for the bid and any consequent contract. The lead partner in the joint venture should also be designated, as well as the individual with overall responsibility for the joint application, who will be the principal contact for communications. The requirements do not apply to subcontract arrangements. 26. A firn may apply for prequalification both individually and as part of a joint venture. It will not, however, be permitted to bid for the same contract as an individual firm and as part of a joint venture. In the event that it bids for the same contract as an individual firm and as part of a joint venture, both or all bids by (or including) this firm will be rejected.