Question 1 -Enumerate the characteristics and legal issues of LSTK EPC. Ans.

: Turnkey contracts: Lump-sum turnkey (LSTK) EPC contracting is now popular world-wide as a project delivery system for large process and power facilities. Examples are steel mills, LNG facilities, petroleum and petrochemical facilities and power plants. It is also being adopted for large infrastructure developments such as airports, water treatment facilities and telecommunication systems. While the term LSTK implies a fixed price for the whole contract, you must understand that several variations of the EPC mode of contracting are in vogue. The contract price issue can however vary from fixed price to a hybrid price. LSTK EPC contracts offer the following benefits: It fulfils the primary expectation of a single point of responsibility (SPR) for all facets of project. You (owner) can transfer more risk to the EPC contractor, understanding that this risk allocation carries a higher price tag. Examples of some risks that can transferred to contractor in a EPC contract are: Contractor should account for existing site conditions (including subsurface conditions). o Even risk for some force-majeure conditions can be transferred to contractor. If the scope of the contract is well defined, the potential for significant changes is very low. Without the risk of significant changes, the schedule for performing the work is unlikely to change. In this case, a fixed-price contract is usually the best approach. o

The drawbacks of the LSTK EPC contract are: It provides less incentive for a contractor to minimize schedule duration than in the case for reimbursable contracts. Fixed-price suppliers and contractors often minimize quality management activities in order to reduce costs.

Renegotiations of the price might delay the schedule as the fixed-price contractors are reluctant to proceed with any work associated with a change request before resolving the cost of the change.

Question 2 - Explain the steps that you should follow while evaluating the bids document. Ans.: Constructing an Evaluation: To evaluate the bids you receive, you must construct an evaluation. You decide what factors you want to consider in your evaluation and how important each factor is to you. You can use as few or as many evaluation factors as you like, and you can assign percentages or points to the factors you use to reflect their relative importance. However, you must include the price of the eligible products and services as a factor and that factor must be weighted more heavily than any other single factor. Preparing a Bid Evaluation Matrix provider. You can receive services: Under tariff or on a month-to-month basis: Services such as basic telephone service or Internet access may not require a contract. Remember, however, that you must post an FCC Form 470 and open a competitive bidding process for these services each year. Under a contract: Tariffed or month-to-month services provided under a contract are considered to be contracted services. Also, internal connections and basic maintenance products and services are generally provided under a contract. If helps you evaluate bids and also provides documentation of the process you followed to select your service

you post an FCC Form 470 and sign a multi-year contract resulting from that posting, you do not have to post an FCC Form 470 or open a competitive bidding process again for the life of that contract. Contracts: If you intend to receive services under contract, remember that that contract must have been preceded by the filing of an FCC Form 470 (NOTE: If you have an existing contract that was not signed as a result of posting an FCC Form 470, you can post an FCC Form 470 for the next funding year and consider your existing contract as a bid response. Remember, however, that you must evaluate any other bids received as well, and your existing contract may not be the most cost-effective solution.). The entity that filed the FCC Form 470 must also have followed the Schools and Libraries Programs competitive bidding rules and all applicable state and local contract and procurement rules and regulations. You can sign a contract, which may be for one or more years and may include the option of voluntary extensions.

If you are eligible, you can purchase services from a state master contract. If you are eligible to purchase from a state master contract but that contract will expire before or during the upcoming funding year, you and your state should follow the guidance for state replacement contracts.

Question 3 -Explain the Plan Procurement process with its inputs and the tools and techniques used Ans.: Project Procurement Management is the effective acquisition of goods and services from outside the performing organization to gain the maximum benefit for the organization in context to a project. In addition to that project procurement management also helps in maintaining good buyer-seller relationship. An effective project management passes through six phases for its implementation.

These are:

Procurement Planning: Find the requirements for what to purchase and when to purchase.

Solicitation Planning: This includes proper documentation of product requirements and identification of potential resources.

Solicitation: This is the process of obtaining the best possible quotations; bids, offers, or proposals suited to the project requirements.

Source Selection: Choosing the best offer and seller within the available options.

Contract Administration: Managing and maintaining a good relationship between the buyer and the seller.

Contract Close-out: Final completion and closure of the contract, with the integration of some resolutions if required for any item. These processes run under a close interaction with each other as well as

with the other knowledge areas to get the desired output. Let us discuss all the processes involved in project procurement planning in brief:

Question 4 - Write a note on Request for Quote (RFQ). Ans.: The RFQ process is a business flow comprised of many stages or states that trading partners must pass through as they negotiate. The final state in a successful negotiation is a contract or order, as specified by the buyer.

Buyer can negotiate percentage price adjustment or fixed price negotiation over products or categories. The different types of negotiation are as follows:

Percentage price adjustment on a category found in the catalog. Percentage price adjustment on an item found in the catalog. Fixed price negotiation on an item found in the catalog. Percentage price adjustment on a package found in the catalog. Fixed price negotiation on a package found in the catalog. Percentage price adjustment on a product found in the catalog. Fixed price on a product found in the catalog. Percentage price adjustment on a dynamic kit. Fixed price negotiation on a dynamic kit. Fixed price negotiation on a made-to-order item.

Features:

Single seller RFQ is the RFQ process in a single-seller environment, where the buyer is looking for either better pricing on products, or needs products different from those described in the online catalog. Special Bid RFQ is the RFQ process for price negotiation only.

Question 5 - Explain the guidelines for conducting a competitive negotiation. Ans.: 1. It is observed that the Tender Accepting Authorities of Government Departments, State Government Undertakings, Local Authorities, Autonomous bodies and Corporations established by or under law and owned and controlled by the Government, sometimes negotiate with the lowest tenderer, before passing order accepting the tender in terms of Sub Para 3 under Section 13 of the KTPP Act 2. It has to be recognized that: Negotiations even with the lowest tenderer defeats the very ethics of competitive tendering and should not be resorted solely for the purpose of reduction of rates; Negotiations very often leads to delay in award of the contracts; and Negotiations opens up opportunities for corruptive practices.

3. After careful consideration of the practices being followed, in the various organizations the following Guidelines are issued for conducting negotiations, if needed be, in respect of Works Contracts. 4. In respect of Procurement of Goods, since there are no Schedule of Rates and rates for equipment/goods satisfying the minimum functional requirements vary widely, depending upon the quality, specifications of the material input, award should generally be made to the tenderer who is technically and commercially responsive and meets the stipulated qualification criteria and who is determined to perform the contract satisfactorily. 5. The above instructions are applicable only to Works/Goods tenders received against notice inviting competitive tenders and not for Consultancy Proposals, for which separate instructions would follow. It is also not applicable for tenders invited to fix rate contracts. 6. Procurement Entities shall ensure that the above Guidelines are followed strictly. It may be noted that any violation of the KTPP Act 1999 and Rules 2000 attracts the penal provision under Section 23 of the Act.

Question 6 - Write a note on International arbitration institutions. Ans.: International arbitration is a leading method for resolving disputes arising from international commercial agreements and other international relationships. As with arbitration generally, international arbitration is a creation of contract, i.e., the parties' decision to submit disputes to binding resolution by one or more arbitrators selected by or on behalf of the parties and applying adjudicatory procedures, usually by including a provision for the arbitration of future disputes in their contract.

Main Features of International Arbitration International arbitration has enjoyed growing popularity with business and other users over the past 50 years. There are a number of reasons that parties elect to have their international disputes resolved through arbitration. These include the desire to avoid the uncertainties and local practices associated with litigation in national courts, the desire to obtain a quicker,

more efficient decision, the relative enforceability of arbitration agreements and arbitral awards (as contrasted with forum selection clauses and national court judgments), the commercial expertise of arbitrators, the parties' freedom to select and design the arbitral procedures, confidentiality and other benefits. International arbitration is sometimes described as a hybrid form of dispute resolution, which permits parties broad flexibility in designing arbitral procedures. As one example, consider the International Bar Association (IBA)'s Rules on the Taking of Evidence in International Commercial Arbitration, revised in 2010. These rules adopt neither the common law jurisdictions' broad disclosure procedures (Discovery), nor follow fully the civil law in eliminating entirely the ability to engage in some disclosure-related practices. The IBA Rules blend common and civil systems so that parties may narrowly tailor disclosure to the agreement's particular subject matter. Rules of evidence represents just one example of the different practice that applies to international arbitration, and which distinguishes it from provincial forms of arbitration rooted in the procedures of a particular legal system. There are a variety of approaches to international arbitration at the national level, even where model laws have been adopted. These approaches can be further impacted by arbitral rules that may be agreed between the parties. Similarly, international arbitral practice has given rise to its own noncountry-specific standards of ethical conduct which are believed to apply in international proceedings and, more to the point, to the arbitrators who are appointed to conduct them.