Contractor-selection process

Third Set of Locks Project

j

Alberto Alemán Zubieta

Administrator
Panama Canal Authority
July 2009
 Outline

Expansion Program components and preparations.

Overview of the contracting process.
Organization for the evaluation of proposals.
Selection p
process.
Allocated funds and contracting regulations.
Sequence of events
events.
Expansion Program
components and
preparations
ti
 14 M m3
Expansion Program
components

Post-Panamax locks on Raising of the Gatun Lake Deepening g and

the Atlantic side maximum
i operational
ti l level
l l widening of the
Atlantic entrance
access channel

Deepening of the Culebra

26.7 m 27.1 m Cut navigational channel

3.7 M m3

Deepening of the Gatun

Lake navigational channel 4.1 M m3

Post-Panamax locks on 9.1 M m3

the Pacific side Deepening and
widening of the Pacific
entrance
t access
46 M m3 channel

Access channel to the Pacific-side post-Panamax locks

 Retention of financial and legal advisors

New York, USA

25 July 2008

Mizuho
•Financial

Shearman & Sterling

•Financial ~ legal

Mayer Brown
•Legal
 Integrated program administration

Working together since 15 August 2007

 Financial administration
Financing for the program was secured on 9 December 2008.
The fi
Th financing
i will
ill cover $2
$2.3
3 billi
billion out off the
h program’s
’ $5
$5.25
25 billion
billi
estimated budget, allocated as follows:
FINANCING European Investment Bank (EIB) $ 500 M
Japan Bank for International Cooperation (JBIC) $ 800 M
Interamerican Development Bank (IDB) $ 400 M
International Finance Corporation (IFC) $ 300 M
Andean Development Corporation (CAF) $ 300 M
Subtotal: $2.3 B

To be funded by the ACP: $ 2.95 B

Total: $ 5.250 B

The negotiated financing structure includes very favorable provisions for the
ACP, including a 20-year amortization period and a 10-year grace period.
Overview of the
contracting
process
 Contractor-selection process overview

For the lock contract, the ACP is using a non-negotiated

best value process and a pre
pre-qualifying
qualifying tendering
process.
The best value weighting
g g is 55% for the technical
proposal and 45% for the price proposal.
The contract will be awarded to the tenderer:
whose proposal complies with all of the requirements,
whose proposal obtains the best score after the weighting for
both the technical and price proposal and
who has not experienced a substantial change in composition
and conditions since the pre-qualification.
pre-qualification
 Contracting process timeline for
lock design and construction

Draft issue of the

Terms of Reference Proposal
21-DEC-07 evaluation advisors
identified
9-FEB-09
Short list
selection Homologation New date
Request
q for 14-DEC-07 of the Terms of for last individual
Qualifications Reference meeting with the Opening of
issued 26-MAR-08 consortia price
27-AUG-07 Receipt of 16-JAN-09 proposals
Qualifications JULY-09
Designation of the
15-NOV-07 Individual Final Terms Technical
meetings with of Reference Evaluation Board
the consortia issued Receipt of
Preview 29-JAN-08 proposals
conference 18-APR-08
3 MAR 09
3-MAR-09
13-SEP-07

AGO SEP OCT NOV DIC ENE FEB MAR ABR MAY JUN JUL AGO SEP OCT NOV DIC ENE FEB MAR APR MAY JUN JUL AGO SEP

2007 2008 2009

14 months
Pre q alification
Pre-qualification
Pre-qualified consortia
Consortium Members Designers Gate Manufacturers
ACS Servicios, Comunicaciones y Energía, S.L. (leader) Sener Ingeniería y Sistemas

Acciona Infraestructuras, S.A. Haskoning Nederland BV

ACS Servicios, Comunicaciones y
C.A.N.A.L. Fomento de Construcciones y Contratas, S.A. Mott Macdonald Limited
Energía, S.L.
Hochtief Construction AG Hochtief Consult

Constructoras ICA S.A. de C.V.

Bouygues Travaux Publics (leader)

Bilfinger Berger

VINCI
C Co
Construction
st uct o GGrands
a ds Projets
ojets
Atlántico- Construcoes e Comercio Camargo Correa S.A.
ALSTOM Hydro
Pacífico de AECOM (leader)
Energia Brasil
Construtora Andrade Gutierrez S.A.
Panamá
Construtora Queiroz Galvao S.A.

ALSTOM Hydro Energia Brasil

BARDELLA Ind. Mecánicas

Bechtel, Bechtel International, Inc. (leader)

Taisei, Bechtel International, Inc.
T i i Corporation
Taisei C ti W h
Wuchang Shipyard
Shi d
Mitsubishi (leader)

Corporation Mitsubishi Corporation

Sacyr Vallehermoso S.A. (leader) Montgomery Watson Harza (MWH)

Grupo Unidos I
Impregilo
il S.p.A.
S A
(leader)
por el Canal Jan de Nul n.v. IV-Groep
Heerema Fabrication Group

(GUPC)
Constructora Urbana, S.A. Tetra Tech
 Informational meetings
 Site visits
 Pre-bid conferences:
 26 March 2008
 30 October 2008
 49 individual meetings
Organization
g for the
evaluation of
proposals
 Key participants

There were six key participants in the evaluation process.

The ACP Contracting Officer coordinated the entire contractor-
selection process.
The Technical Evaluation Board scored the technical proposals.
ACP and international experts provided technical advisory
services to the Technical Evaluation Board.
Th ACP IInspector
The t G Generall verifyied
if i d the
th process.
An external auditor (Deloitte) under contract with ACP audited the
process to certify that it was duly executed.
A notary public acted as a witness to attest to the developments
and certify the key milestones of the process.
 ACP organizational structure for
the evaluation of proposals and contractor selection
Board of Directors

Inspector General
(IG)
Administrator
(AD)

Executive VP,
Corporate Management
Engineering
g g and Programs
g

he range of the
e
VP and Ethics Officer
Management Department
(OA)
uthorization

(IA)

allocatted funds
y the AD
ntract award au

Provides th
delegated by

Executive Manager, Executive Manager, Locks

Contracts Administration Projects Division
(IAC) (IAE)
Con

Contracting
C t ti Offi
Officer,
Construction
Contracts Cost Estimating
Management Team
Branch
(IACC)

Technical Price Proposal

Evaluation Board Validation Board
 Technical Evaluation Board
Integrated by 15 senior, permanent engineers
from ACP work force.
Organized in three groups composed of five
members each.
Initiated preparatory work in September 2008.
Supported
pp by
y over 50 ACP and contracted
technical experts.
Dedicated, uninterrupted work under supervision
off the
h Contracting
C i Officer.
Offi
Work was conducted in a separate building and
following special security measures.
measures
 Expert
p advisors

The technical experts assisting the

Technical Evaluation Board included:
ACP experts who worked on the Expansion
P
Program proposall and
d in
i the
th development
d l t off the
th
terms of reference of the Request for Proposals
(RFP).
CH2M Hill resident advisors from the program-
management team for the Expansion Program.
Contracted international e
experts.
perts

All experts signed a confidentiality

agreementt andd a non-conflict-of-interest
fli t f i t t
statement.
 Role of the external auditor
and Inspector General
Reviewed the evaluation p
plan and the execution of the
evaluation process.
Verified and audited the contractor-selection process.
Made pertinent recommendations to the Contracting
Officer as necessary during the selection process.
Reviewed the final report of the evaluation process in
order to certify the compliance of the evaluation with the
process and the results.
Issuance of a declaration that the evaluation was
performed in compliance with the established process.
S
Selection
process
 Principles guiding the contractor-
selection process
 The contractor evaluation and selection
process was designed to be:
 Fair, impartial, transparent and holistic.
 Complete and in full compliance with the
requirements and criteria established in
the Request for Proposals.
 Timely
y and uninterrupted
p .
 Executed and supported by experts in
all required areas.
 Confidential.
 Receipt of proposals
 Th proposals
The l were received
i d
during a public ceremony in
ACP installations on 3 March
2009.
 The ACP Contracting Officer
presided over the proposal
proposal-
receipt process.
 The ACP Inspector General
verified the proposal-receipt
process.
 A team from the external
auditor (Deloitte) verified the
proposal-receipt process.
 Th proposals
The l were nott
opened in public.
 Receipt of proposals (continued)
 The price proposals were
sealed and stored in a vault of
the National Bank of Panama.
Panama
 A notary public certified that
the envelopes containing the
price proposals were closed
and sealed and that the
envelope containing the
amount of funds allocated by
the ACP was kept under
custody until it was deposited
in a vault at a nearby branch
of the National Bank of
Panama for safekeeping.
 Opening of the technical proposals
 All technical proposals were opened in private by the
Contracting Officer and his team of specialists. This act
was attended by:
 representatives of ACP Office of Inspector General,
 Deloitte auditors and
 A notary
yppublic.
 The Contracting Officer prepared the minutes, which
were signed by all of the witnesses.
 There was a verification to determine that a Tender
Security was included in each proposal, as well as a
review of the Tender Documents by an ACP legal team.
team
 Three of the four pre-qualified consortia submitted proposals
during the ceremony.

Consortia Members Designers Gates manufacturers

ACS Servicios, Comunicaciones y Energía, S.L. (leader) Sener Ingeniería y Sistemas

Acciona Infraestructuras, S.A. Haskoning Nederland BV

ACS Servicios, Comunicaciones y
C.A.N.A.L.
Energía, S.L.
Fomento de Construcciones y Contratas, S.A. Mott Macdonald Limited

Hochtief Construction AG Hochtief Consult

Constructoras ICA S.A. de C.V.

Bechtel Internacional, Inc. (leader)

Bechtel Taisei
Bechtel, Taisei, Bechtel Internacional,
Internacional Inc.
Inc
Taisei Corporation Wuchang Shipyard
Mitsubishi Corporation (leader)

Mitsubishi Corporation

S
Sacyr Vallehermoso
V ll h S
S.A.
A (l
(leader)
d ) Montg. Watson Harza (MWH)
(leader)
Grupo Unidos por el Impregilo S.p.A.
Heerema Fabrication Group
Canal Jan de Nul n.v. IV-Groep
Constructora Urbana, S.A. Tetra Tech
 Evaluation methodology
 The proposals were evaluated with respect to three areas:
1. Execution, construction, operations and maintenance plans.
2 Electromechanical designs and controls
2. controls.
3. Design of the hydraulic system, gates and structures.
 Each of the three teams that formed the Technical Evaluation
B
Boardd was iindependently
d d tl responsible
ibl for
f one off the
th three
th
evaluation elements.
1. The three teams worked separately in order to prevent them from
influencing each other.
other
2. Each team assigned scores in its area of responsibility for
evaluation.
3 The final score for each evaluation element resulted from a
3.
consensus among the team members.
 The Technical Evaluation Board was able to request advice and
pp
support from as manyy experts
p as they
y may
y deemed necessary.y
 These experts did not assign scores, nor did they participate in
the evaluation discussions or deliberations.
 Evaluation and selection process
Contracting Officer
Technical Evaluation Process
certified by Announces the public opening
Preliminary evaluation Final evaluation of the price proposals through
Receipt of proposals (teams) external
(individual) an RFP amendment
auditor
Team 1 Team 1
Contracting Officer
Team 2 Team 2 tabulates technical scores
Contracting Officer
withdraws security deposit
Team 3 Team 3 box containing envelopes
with price proposals from
National Bank of Panama

Inspector General and Price proposals opened during

external auditor audit the process- a public ceremony
Envelopes
Technical with price
scores proposals
disclosed and amount
Price proposals Security deposit box of allocated
sealed and notarized closed and key funds
withdrawn Contracting Officer opened d
took the security deposit
box to the
National Bank of Panama, Verification of
Notary public Inspector General together with the compliance with the
notary public, requirements of the
Contracting external auditor and Terms of Reference
External auditor consortia representatives
Officer

Contract is
awarded 26
3 March 2009
 Fields of expertise among those providing
support for the technical evaluation

• Dams • Power distribution

• Hydraulic systems • Project controls
• Concrete • Environment
• Gates • Design
• Excavations • Risk
• Structures • Cost control
• Access channels
• Programming
• Communication systems
y
• Q lit control
Quality t l
• Valves
• Public relations
• Electromechanical systems
• Maintenance • Supply and logistics
• Safety • Training
• Machinery-control systems
Ceremony for opening price proposals

 Once the technical evaluation process has concluded,

the Contracting Officer will issue an amendment to the
RFP communicating the date, time and place for the
public ceremony to open the price proposals.
 During this public ceremony:
 the total scores assigned to the technical proposals
will
ill be
b disclosed.
di l d
 the envelopes containing the price proposals and
the envelope with the amount of ACP-allocated
ACP allocated
funds will be opened.
 the scores to determine the apparent best value
proposal will be calculated automatically.
 Allocated
funds and
contracting
t ti
regulations
 Allocated funds
 Costs scenarios were developed by an ACP budget and
financial analysts to come up with a range for the
amount of funds to be allocated for the contract.
contract
 The Administration determined the specific amount of
the allocation.
 The amount is stored in a sealed envelope in the bank
vault containing the price proposals from the tenderers.
 The price proposals and the allocated funds envelope
will be opened in a public ceremony.
 If the price of the best value proposal does not exceed
the amount of the allocation, the contract could be
awarded within one to three days; however
however, the
Contracting Officer has until September to award the
contract.
S q
Sequence
of events
 Ceremony for opening
g the price proposals

1. The p
public ceremony y will be officially
y initiated by
y the
Contracting Officer.
2. The sealed envelopes containing the price proposals
and the amount of the allocated funds will be
withdrawn from the National Bank of Panama and
taken to the premises for the ceremony.
3
3. The external auditor (Deloitte) will submit the
results of his review of the proposal-evaluation
process.
4. The
h scores obtained
b i dd during
i the
h evaluation
l i off the
h
technical proposals will be disclosed and displayed.
 Opening the price proposals (continued)
5. The price proposals and allocation envelopes
will be opened.
– The box containing the envelopes will be unlocked,
and the envelopes removed.
– The envelopes containing the proposals will be
inspected and opened.
– The price proposals will be read aloud by the
Contracting Officer and displayed on a screen.
– The prices will be introduced into a speadsheet that
will
ill automatically
t ti ll perform
f the
th calculations
l l ti once the
th
last price is entered to determine the scores and
immediately identify the apparent best-value proposal.
– The envelope containing the allocation amount will be
inspected and opened, and the amount will be read
aloud and displayed.
6. Adjournment of the ceremony.
 Alternative steps in the event the price of the best-
value proposal exceeds the amount of allocated funds
Base price of best-
value proposal
exceeds the amount
of allocated funds

ACP requestst th
the
The new base price
best-value tenderer to The contract is
is within the
reduce the total base awarded
allocated amount
price of his proposal

The new base

price exceeds the
allocated amount

The base price of

ACP requests new the new best-
base price proposals value proposal is The contract is
from all tenderers within the awarded
allocation
The amount of
the allocation
Funds is raised The contract is
The base price to the cover the awarded
of the new base price for
best value the new best-
proposal value proposal
exceeds the
allocation
ll ti
The allocation
cannot be increased The contractor-
to cover the base selection process
price for the new is declared null
best-value proposal and void
 Processes before the work begins
 Notification of contract award
 End of notification period and  5 days
first day for filing protests
 Period for filing protests  3 days
 Protest resolution (if there are
any, the adjudication period  Up to 30 days
will be suspended)
 Period for submittal of the  28 days
performance and payment
bonds
 Signing of the contract (RFP)
 Order to proceed
 Start of the work  7 days
y
 Performance and payment bonds
 $400 million
illi ffor performance
f and
d $50 million
illi ffor paymentt
 The surety insurer having one of the following
acceptable bond
bond-issuance
issuance ratings:
AM Best A - Category XV Standard & Poors A-
Moody’ss A3
Moody Fitch A-
 The surety insurer must be licensed in the state of New
York and must be listed and authorized to do business in
the United Kingdom.
 The reinsurers for the issued bonds must meet the same
requirements that are applicable for the surety insurer
with respect to risk rating and authorization to carry out
financing operations
operations.
 Contractor-selection timeline
Initial price proposal is within allocated amount
The
technical
score is
displayed Notification
and prices Contract is period ends.
are opened aawarded.
a ded
in public.
The best-
value First day to Submittal of Contract
proposal is Last day to performance signing and Start of
selected and file
protests
p file and payment Notice to work
does not
exceed the protests
t t * b d
bonds P
Proceedd
amount of
allocated
funds.
5 days 3 days Up to 30 days 7 days

28 days
Information from the contractor-
selection process is made available to
tenderers.

* If any protests are received, the Executive Manager of the Purchasing, Warehousing
and Inventory Division has up to 30 days to issue the ruling and the award process will be
suspended
Contractor-selection process
Third Set of Locks Project

Alberto Alemán Zubieta

Administrator
Panama Canal Authority
July 2009