WM CPMM - 6 CPPMM

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MAY,2019
WM - 06
ECPMI ECPMMS : 2019

ETHIOPIAN CONSTRUCTION PROJECT MANAGEMENT
MANUALS SERIES:
CONSTRUCTION PROJECT PROCUREMENT
MANAGEMENT
WORKING MANUAL
© 2019 All Right Reserved

Ethiopian Construction Project Management Institute
ECPMI ECPMMS:2019
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ECPMI ECPMMS:2019
Construction Project Management Manuals Preparation Working

Groups on
" Construction Project Procurement Management"
Working Groups Chair

Asmerom Tadesse
Working Groups Coordinator

Abera Awgichew
Original Version Prepared By:

Hussien Sebri
Manual Quality Assurance and Validation Working Group Members
Wubishet Jekale Steering Committee Chair
Muluken Tilahun Project Coordinator
Denamo Addissie Technical Committee

Members
Asregidew Kassa
Tadesse Ayalew
Bekele Jebessa
Geremew Tarekegn
Release Version Prepared By:

Bekele Jebesa
© ECPMI 2019 All Right Reserved

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ECPMI ECPMMS:2019
TABLE OF CONTENTS
TABLE OF CONTENTS.............................................................................................................................. v
LIST OF FIGURES ..................................................................................................................................... vii
LIST OF TABLES....................................................................................................................................... vii
ABBREVIATIONS AND ACRONYMS .................................................................................................. viii
NATIONAL FOREWORD......................................................................................................................... xi
PREAMBLE ............................................................................................................................................... xv
SECTION 1: GENERAL ............................................................................................................................ 1
1.1. Introduction.......................................................................................................................................... 1
1.2. Document information ........................................................................................................................ 2
1.3. Scope and Application ......................................................................................................................... 3
1.4. Normative References.......................................................................................................................... 4
1.5. Purpose and / or Objectives ............................................................................................................... 5
1.6. Policies, Principles and Considerations ............................................................................................. 5
1.7. Terms and Definitions ......................................................................................................................... 8
1.8. CPPM High Process Map .................................................................................................................... 9
SECTION 2: PROCESS GROUPS...........................................................................................................10
2.1. Process group one: Plan Construction Procurement Management................................................12
2.1.1. Plan Construction Procurement Management: Inputs ...............................................................13
2.1.2. Plan Construction Materials Management: Mechanisms ...........................................................16
2.1.3. Plan Construction Materials Management: Constraints.............................................................18
2.1.4. Plan Construction Materials Management: Outputs ..................................................................18
2.1.5. Plan Procurement Management: Activities .................................................................................22
2.2. Process group two: Conduct Procurement Management ...............................................................23
2.2.1. Conduct Procurement Management: Inputs ...............................................................................24
2.2.2. Conduct Procurement Management: Mechanisms .....................................................................26
2.2.3. Conduct Procurement Management: Constraints ......................................................................33
2.2.4. Conduct Procurement Management: Outputs ............................................................................33
2.2.5. Conduct Procurement Management: Activities ..........................................................................34
2.3. Process group three: Administer and Control CP Procurement Management .............................35
2.3.1. Administer and Control CP Procurement Management: Inputs ...............................................36
2.3.2. Administer and Control CP Procurement Management: Mechanisms .....................................37
2.3.3. Administer and Control CP Procurement Management: Constraints .....................................45
2.3.4. Administer and Control CP Procurement Management: Outputs ............................................45
2.3.5. Control and Administer CP Procurement Management: Activities ..........................................47
2.4. Process group four: Close CP Procurement .....................................................................................48
2.4.1. Close Procurement Management: Inputs ....................................................................................49
2.4.2. Close CP Procurement Management: Mechanisms ....................................................................49
2.4.3. Close Procurement Management: Controls & Constraints ........................................................50
2.4.4. Close CP Procurement Management: Outputs ...........................................................................50
2.4.5. Close CP Procurement Management: Activities .........................................................................51
2.5. Procurement Management for Engineering Services .......................................................................52
2.5.1. Procurement methodologies.........................................................................................................52
2.5.2. Legal nature of consultant’s role for engineering services .........................................................52
2.5.3. Engineering Contract Administration .........................................................................................53

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2.5.4. Procurement Management for Works .........................................................................................57

2.5.5. Comparison Construction Implementation Methodologies ......................................................59
2.6. Contracts Administration ...................................................................................................................62
2.7. Procurement Recording and Information Management ..................................................................69
2.7.1. Procurement recording .................................................................................................................69
2.7.2. Procedures information management .........................................................................................69
SECTION 3: Manual Adjustment, Amendment and Revision ...........................................................71
3.1. Manual Adjustment ............................................................................................................................71
3.2. Manual Amendment...........................................................................................................................71
3.3. Manual Revision .................................................................................................................................71
Bibliography ...............................................................................................................................................72
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LIST OF FIGURES
FIGURE 1.1:CPPMM HIGH LEVEL PROCESS MAP .................................................................................. 9
FIGURE 2. 1: CONSTRUCTION PROCUREMENT MANAGEMENT PROCESSES .......................................... 11
FIGURE 2.2: IMCOS OR MODIFIED IDEFO ELEMENTS ........................................................................... 12
FIGURE 2. 3: IMCO OF PROCUREMENT MANAGEMENT PLAN .............................................................. 13
FIGURE 2. 4: CONTRACT TYPES, DEGREE OF PARTICIPATION, AND RISK TAKING................................. 16
FIGURE 2. 5 : IMCO DIAGRAM FOR CONDUCT CP PROCUREMENT ........................................................ 24
FIGURE 2.6: IMCO FOR ADMINISTER AND CONTROL CP PROCUREMENT ............................................. 36
FIGURE 2.7: IMCO FOR CLOSE CP PROCUREMENT................................................................................ 49
LIST OF TABLES
TABLE 1.1: CPPMM POLICY DOCUMENT................................................................................................ 5
TABLE 1. 2: CPPMM PRINCIPLES ............................................................................................................ 6
TABLE 2. 1: RELATIONSHIP BETWEEN PROCUREMENT KNOWLEDGE AREA AND PROCESS GROUPS ....... 11
TABLE 2. 2 : CHARACTERISTICS OF CONSTRUCTION METHODOLOGY ................................................... 59
TABLE 2.3: ADVANTAGES AND DISADVANTAGES OF THE CP IMPLEMENTATION METHODOLOGIES .... 60

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ABBREVIATIONS AND ACRONYMS

BD : Bidding Documents
BDS : Bidding Data Sheet
EOI : Expression of Interest
FDRE : Federal Democratic Republic of Ethiopia
Federal Public Procurement and Property Administration
: Agency
FPPPAA
GCC : General Conditions of Contract
GPN : General Procurement Notice
ICB : International Competitive Bidding
IFB : Invitation for Bids
IMCO : Inputs, mechanisms, controls/constraints and outputs
ITB : Invitation to Bidders
JV : Joint Venture
LOI : Letter of Invitation
MOFEC : Ministry of Finance and Economic Cooperation
NCB : National Competitive Bidding
PPA : Public Procurement and Property Administration Agency
RFQ : Request for Quotations
SCC : Special Conditions of Contract
SOW : Procurement Statement of Works
SPN : Specific Procurement Notice
TOR : Terms of Reference
VAT : Value Added Tax
WBS : Work Break down Structure
CP : Construction Project
CPPM : Construction Project Procurement Management
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NATIONAL FOREWORD
The proclamation to define the powers and duties of the executive organs of the Federal
Democratic Republic of Ethiopia Proclamation No 1097/2018 empowers the Ministry of Urban
Development and Construction (MUDC) to prepare and issue Standards for design and
construction works, and follow up and supervise their implementation.
This document forms a part of the CPMM Package that enlists Nineteen Manuals of which
Sixteen of them are Construction Project Management Manuals, two of them are general guides
(CPMM Organization and Setup and User Guide), and one of them is operational (Construction
Project Design Services) Manual. The CPMM package was developed with a clear view of the
integration of both the Project Management processes and knowledge areas so as to manage the
project as a holistic single entity. It is thus believed that the package will be instrumental in
creating modern and unified construction project management system in Ethiopian Construction
Industry.
The Ethiopian Construction Project Management Institute (ECPMI) has initiated and led the
overall development of the CPMM Package. The Ministry of Urban Development and
Construction would like to extend its appreciation to Construction Solutions PLC (Consol), and
Ethiopian Institute of Architecture, Building Construction and City Development (EiABC) who
contractually worked with ECPMI in the preparation of the original version of CPMM Package,
while the latter has validated and assured the quality of the original ones and produced the
released version the CPMM Package.
As the CPMM Package constitutes working manuals that are technical documents which, by
their nature, require periodic updating; revised editions will be issued by the Ministry from time
to time as appropriate. MUDC will establish Manuals Preparation and Revision Standing
Committee which collects feedbacks during the manual's three years operation period and
makes the required amendments and revisions accordingly.
The Ministry of Urban Development and Construction as mandated acknowledges this

document as a national resource tool and can serve as an acceptable working manual which
comprises a front cover, an inside front cover, a title page, National Foreword, Preamble, Table
of contents, pages 1 to 72 and a back cover.
Eng. Aisha Mohammed

Minister, MUDC
June 2019, Addis Ababa - Ethiopia

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PREAMBLE
Whereas; Ethiopia Construction Project Management Institute (ECPMI), to partially cater for the
deficiencies of project management practices in the Construction Industry; has envisioned the
development of Construction Project Management Manuals (CPMMs) which are Critically
Adapted, Practice Oriented, User Friendly and Responsive to Continuous Improvement that:
1. describe Specific, Supplemental and Standardized Knowledge and Practices that are
generally accepted as "good industry practices" on most construction projects most of the
time,
2. define the Conceptual, Applicable and Technological contents, processes and their What
and How elements sufficiently,
3. reflect the peculiar features of the Construction Industry in Ethiopia and can be
implemented by the resources in practice currently,
4. lay down the policies, principles, processes and procedures in order to effectively
discharge duties and responsibilities, and
5. can be applied to any project nationwide with minor and moderate modifications.
Whereas; ECPMI identifies and enlist Nineteen Manuals of which Sixteen of them are
Construction Project Management Manuals, two of them are general guides (CPMM
Organization and Setup and User Guide), and one of them is operational (Construction Project
Design Services) Manual.
Whereas; ECPMI as the mandated body, to foster the development of Proactive and System
based CPMMs policies and principles and application of modern Construction Project
Management in Ethiopia governed by fundamental and best practices, envisions to cause the
applications of these CPMMs in order to improve the performances of Construction Projects;
Whereas; CPMMs are one among the critical bases for Initiating, Planning, Implementation
including Changes Administration, Monitoring & Evaluation, and Closing of Construction
Projects along the Business ↔ Project ↔ Product Management linkages with respect to their (1)
General Requirements, (2) Process Groups, (3) High Level Process Map (4) Detail Processes, (5)
Procedures or Instructions, and (6) Auxiliary or Annex Documents;
ECPMI has therefore caused the development of one of these CPPMs; namely: “Construction
Project Procurement Management Manual (CPPMM)” as a framework to guide and govern
Construction Projects Procurement Management in line with the expected level of Construction
Projects Performances Worldwide with respect to planning, Conducting procurement,
administering CP procurement and Closing Procurement to ensure effective management of
Engineering procurements and other Resources by Balancing or Prioritizing Competing
Demands, Tailoring for specific situations, and Managing the relationships and
interdependencies.
ETHIOPIAN CONSTRUCTION PROJECT MANAGEMENT INSTITUTE

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1. SECTION 1: GENERAL
1.1. Introduction
The CPMMs are one among the focus areas and the cause for deficiencies in the expected
contributions of the Construction Industry in Ethiopia. ECPMI in collaboration with
Construction Solutions Plc. and the Construction Technology and Management Competence
Unit of the EIABC / AAU identified and developed the following nineteen CPM manuals under
three categories:
A. Construction Project Management Manuals

1. CP Integration Management Manual (CPCMMM);
2. CP Scope Management Manual (CPSMM);
3. CP Quality Management Manual (CPQMM);
4. CP Stakeholders Management Manual (CPSkMM);
5. CP Risk Management Manual (CPRMM);
6. CP Procurement Management Manual (CPPMM),
7. CP Communication Management Manual (CPCmMM);
8. CP Time Management Manual (CPTMM);
9. CP HRs Management Manual (CPHRMM);
10. CP Materials Management Manual (CPMMM);
11. CP Heavy Equipment Management Manual (CPHEMM);
12. CP Cost Management Manual (CPCMM);
13. CP Financial Management Manual (CPFMM);
14. CP Safety Management Manual (CPSfMM);
15. CP Environment Management Manual (CPEnMM); and
16. CP Claim Management Manual (CPClMM).
B. General Guiding Manuals
17. CP Organization and Setup Manual (CPOSM); and
18. CPMM User Guide.
C. Operation or Implementation based CPMMs
19. Construction Project Design Management Manual (CPDMM).
This Construction Procurement Management (CPPM) manual is prepared as part of Ethiopian

Construction Project Manuals series designed for the Ethiopian Construction Industry. It is
intended to provide information to project managers, project teams, and staff involved directly
or indirectly with construction project procurement management.
ECPMI ECPMMS:2019
1.2. Document information
Document name : Construction project Procurement management manual
Document number : ECPMI ECPMMS : WM - 06
Document availability : The hard copy of the document is available at the Ethiopian
Construction Project Management Institute (ECPMI) and the
electronic copy / form is located on the following websites
www.ecpmi.gov.et
Document owner : Ethiopian Construction Project Management Institute

(ECPMI)
Document sponsor : Ethiopian Construction Project Management Institute

(ECPMI)
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1.3. Scope and Application
Construction project procurement management is the process by which acquiring Services and
Works required from initiation of the process to closing. The organization can be either the buyer
or the seller of the Services or Works.
The manual scope includes the process for developing a detailed Procurement management for
construction project decisions. This document is applicable to all construction projects including
Services and Works Procurement.

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1.4. Normative References
Document Number Document Title
ISO 21500 Guidance on project management,
PMBOK Construction Extension to the PMBoK® Guide, 2016
FPPAA procurement Federal Public Procurement and Property Administration Agency;

documents full documents can be located at www.ppa.gov.et
PMBoK Construction Extension to the PMBoK® Guide Third edition,2017

ECPMI ECPMMS:2019
1.5. Purpose and / or Objectives
The purpose of this manual is to describe and document procurement process and procedures
for an effective construction project management and to ensure that budget/funds are used for
the intended purpose, with due considerations to quality, economy and efficiency of the project
and to underline the principles of economy, efficiency, transparency, equal opportunity and
competitive procedures during procurement management.
1.6. Policies, Principles and Considerations
1.6.1. CPPMM Policies

The following elements, namely the; (1) purpose, (2) scope, (3) responsible party, (4) policy
statements, (5) outcomes, and (6) goals constitute the CPPMM Policy document and are
described below (Table 1.1).
Purpose: The main purpose of preparing this policy document is to create guidance
that should be followed during the use of CPPMM processes, procedures and
instructions in order to determine learning inputs for continuous improvement.
Scope: This policy will be applicable mainly to practitioners involved in:
1. Construction Project Communication Management for: (a) Construction
Management Services, (b) Construction Design Services, (C) Construction
Works, (d) Construction Works Quality Assurance and Contract Administration
Services, (e) Construction Design Services and Works, and (f) Construction
Design Reviews, Quality Assurance and Contract Administration Services
2. Construction Industry Stakeholders (Mainly the Employer, the Consultants and
the Contractors), and
3. Construction Projects undertaken or to be undertaken based on the DBB or DB
delivery methods.
Responsible Bodies: The Responsible bodies for regulating and improving the
CPCMM are:
1. ECPMI for Regulating the application of the CPPMM
2. CoTM Competence Unit of the EiABC for monitoring the implementation
and continuously improving the CPCMM based on the forthcoming Contract
Policy Statements: This CPPMM policy document is to ensure achievements
regarding successful completion of the CPPM process ; such that the:
 CPPM is properly planned
 CPPM Conducted based standard template and procedures
 Proper Engineering procurement management is ensured
 the Contract administration of engineering services are implemented
Table 1.1: CPPMM Policy Document

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1.6.2. CPPMM Principles
The following constitute the CPPMM principles and are described below (Table 1.2).
Principles: The main principles of this Manual are:

Continuously improving the CPPMM System, Knowledge, Skill and Attitude led
Planning, Implementation, Monitoring & Evaluation
Monitoring & evaluation mainly focusing on leading indicators, preventive
approaches and the developments of CPPM and CP Documents that guide, integrate
and optimize the subsequent BOKs management for learning cycle
Rely on the following seven major bases iteratively when required:
CPPMM Outcome Document considering the Project Business Case
CPPMM Plan considering CPPMM Processes, Resources Requirements and Timings
CPPMM and CP Documents Requirements considering CPM Requirements
CPPMM and/ or CP Charter, Implementation and Deliverable Documents to guide
CPM implementation and performance management
CPPMM and /or CP Performance Documents to gauge performances
CPPMM Integrated Change Control Document to ensure only necessary changes be
authorized
CPPMM and / or CPM Document Updates for continuous CPM improvement
Business and Project Management Teams collaborative Partnership ensures or will
have higher likelihood to successfully align the Product - Project requirements; hence
the Business Case and the CPPMM and / or CP Documents.
Continuously develop the capability of CI human resource for CPPMM including
(availing) necessary facilities
Mutually explanatory with the other BoK manuals, guidelines & strategies
Learning then Accountability
Table 1. 2: CPPMM Principles

1.6.3. CPPMM Considerations
CPPMM considers the following basic elements, namely:
a. the Project Business Case as Front - End Planning bases,

b. the Construction Project Management (CPM) Process Groups (Construction Design
Services and / or Works Process Groups) as the Subjects whose CP Cost management to be
managed,
c.the four processes of the CPPM described in section two below,
d. the IMCO relationships; namely:
1) Input: terms that refer to any item in the form of information or documents or
resources, whether internal or external to the CPPM processes, that triggers a CPPM
process group and required before that process group proceeds which may be an output
from a predecessor process group including the Organization Process Assets;
2) Mechanisms including Tools, Techniques and Competencies: Something tangible;
such as tools, techniques and competencies, used in performing an activity in the CPPM
process groups to plan, Estimate, manage, aggregate and control the CPPM and CP
Documents called Outputs;

ECPMI ECPMMS:2019
Tools include Templates
Techniques are terms that refer to a defined systematic procedure that may use one or
more tools to perform an activity in a process.
Competencies are clusters of CPPM related knowledge, performance or experience and

personal characteristics of the project management teams and the project manager such
as abilities, knowledge, skills, attitudes, behaviours and personality that affect a major
part of the CPPM job and its performance which can be measured against well-accepted
standards that are often termed as "Good Industry Practices" or "Norms" and can be
improved via training and development.
3) Constraints: terms that refer to limiting or dictating factors that affect the
implementations of CPPM process groups or the actions of the CPPM Team such as
Enterprise Environment Factors, Project Documents including Risk or Lesson Learned
Registers, Agreements, etc.; and
4) Outputs: terms that refer to products, services, documents as results generated by the
CPPM process groups which may be an input to a successor process group.

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1.7. Terms and Definitions
For the purpose of this manual the following definitions shall apply.
An employee of the client providing the function of contracting

authority / procuring entity responsible for the award and the
Contracting officer : day-to-day administration of the contract and ensuring the
integrity of the contracting process and that contracting
procedures are followed.
Any person designated to manage the various facets of contracts

Contract to ensure the contractor’s overall performance is in accordance
:
Administrator with the contractual commitments and obligations to the
contracting authority / procuring entity are fulfilled.
an employee providing the functions of design management, a

broad and comprehensive role that includes quality assurance
Design Manager :
services and requires a clear understanding of project
objectives/constraints.
Any person with delegated authority to enter into and administer

Procurement contracts and make written determination with respect thereto.
:
Officer The team includes an authorized representative acting within the
limits of authority.
An employee responsible for the day-to-day management of the

Project Manager :
project.
Individuals / groups with a vested interest in the success of the
Stakeholders :
contract.
is the technical description of the project, including project name,

project description, project background, exiting documentation,
Terms of
: project objectives, required services, project budget and the
Reference (TOR)
scheduled milestones, and any other relevant specific
requirements.
Individuals or groups who will ultimately be using or may be

User/End User :
benefiting from the contract.

ECPMI ECPMMS:2019
1.8. CPPM High Process Map
CPPMM high level process map mainly involves the development of the following four major
outcomes or deliverables; namely:
1. Plan CP procurement
2. Conduct CP procurement
3. Administer/Control procurement
4. Close procurement through the following high level CPPM process map (Figure 1.1)
constituting four major process groups.
Start
Plan CP Procurement
management
Control and Monitor CPP

Conduct CP Procurement
Administer CP Procurement
Close CP Procurement
END
END
Figure 1.1:CPPMM High Level Process Map

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2. SECTION 2: PROCESS GROUPS

Construction project procurement management is the process by which acquiring Services and
Works required from initiation of the process to closing. The organization can be either the buyer
or the seller of the Services or Works.
When the organization is the buyer, the construction project procurement management includes
contract management and change control processes required to develop and administer contracts
issued by designated project team members.
When the organization is the seller, construction project procurement management includes
controlling the follow-up and management of the tender process and, in case contract is awarded
to the organization, the contract entered into; and execution and administering the contractual
obligations placed on the project team through the contract.
The construction project procurement management process for consulting services is designed to
obtain a consultant which will deliver the best or optimum quality at reasonable prices.
Sometimes it may entirely focus on best quality. The process involves waiting time for the
Consultants to look at the needs of the project and to respond accordingly. The process can thus,
take from one month to three months to respond for this type of procurement. The project
manager needs to be involved in the entire process of procurement management and he also
needs to plan for the amount of time the procurement may requires.
Procurement Management Competencies
The project manager and project team are required to have the required skills and competency
levels to execute the procurement process. The purpose of the competencies is to frame
expectation within procurement roles and help identify skills, development opportunities and
career paths. The following are the major categories of skills and competencies required for a
Procurement Manager/Expert.
a) Compiler:-follows procedures and encourages others to as well

b) Result seeker:-meets deadlines, identifies actions and achieves goals
c) Innovator:-thinks creatively, anticipates changes, produces solutions
d) Functional Expert:-has knowledge of processes and products
e) Adapter:-stays calm under pressure and handles criticism well
f) Influencer:-relates to people, builds relationships, effectively presents arguments
The skills required from a procurement expert/manager are speaking/language, critical thinking,
active listening, persuasion, negotiation, reading comprehension, judgment and decision
making, complex problem solving, writing, active learning, time management, dependability,
attention to detail, analytical thinking, integrity, flexibility, stress tolerance, self-control,
persistence and concern for others.

ECPMI ECPMMS:2019
The project procurement management processes involve activities from preparation of

procurement plan to control and close out of procurement. It also includes contract negotiation,
contract award, and contract signing and contract administration.
Conduct CP Administer/
Plan CP Close
procurement Control
procurement procurement
procurement
Figure 2. 1: Construction Procurement Management Processes
 Plan Procurement Management; The process of documenting project procurement

decisions, specifying the approach & strategy, and identifying potential
consultants/contractors.
 Conduct Procurement; The process of approaching and selecting
consultants/contractors, and contract award process.
 Control Procurement; The process of administering procurement contracts, monitoring
contract performance and making changes and adjustments as appropriate.
 Close Procurements; The process of completing each project procurement.
When the organization is service provider the above project procurement management
processes involves activities from client solicitation, preparation of proposal based on buyer
requirements and contract award. It also includes contract negotiation, contract signing and
contract administration.
Ethiopian Construction Project Management Institute manuals are divided into seventeen
knowledge areas and one additional subject (Organizational set-up) is added to supplement the
construction project management. The knowledge areas consist of processes applicable to
construction projects. The Procurement management processes are defined in terms of purpose,
description and primary inputs, mechanisms, control/constraints and outputs in sections herein
below, and are interdependent.
Procurement management
The procurement management knowledge area includes the processes required to plan, conduct,
control and close procurement.
Table 2. 1: Relationship between procurement knowledge area and process groups
Knowledge Process groups

areas
Initiating Planning Implementing Controlling Closing
Procurement  Plan  Conduct  Administer/control  Close

procurement procurement procurement procurement

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The relationship between each process is mapped, employing IMCO diagram technique, in
Figure 2.3.
Constraints
Processes /
Inputs Functions
Out puts
Mechanism
s
Figure 2.2: IMCOs or Modified IDEFo Elements
2.1. Process Group One: Plan Construction Procurement Management
Plan Procurement is a process of identifying which project needs will be best met through
procuring Services or Works and what to procure will be identified together with an
arrangement of resources to undertake the procurement. Plan procurement shall be undertaken
during scope definition phases and involves thorough consideration of whether or not to
procure, how to procure, what to procure, how much to procure and when to procure.
This process involves the preparation of the documents needed to support invitations. Bids and
proposals are received from prospective proponents detailing how much needs can be met.
Procurement strategy is a key factor in determining the most appropriate procurement method
given the complexity and monetary value of the requirement, and market availability. The
procurement strategy shall be developed in conjunction with planning the ‘when’.
The strategy that is developed has to take into consideration the various procurement principles;
primarily, quality, economy and efficiency. Consideration needs to always be given to whatever
savings (or economies of scale) that can be achieved by strategically planning how procurements
shall be carried out over the period covered by the procurement plan. This might entail
consulting with the various requesting entities to determine if there are any extenuating
circumstances that warrant making their procurement in a special manner and in any way
different from the rest of the planned procurements of similar items.
Requesting entities should also be involved and consulted on whatever decisions are to made in
the planning and strategy phase, in order to obtain their agreement and to avoid planning their
requirements in such a manner that could be counterproductive to their operations.
The Inputs, Mechanisms (Tools & Techniques & competencies), Controls / Constraints and
Outputs [IMCO] for plan procurement process is depicted in Figure 2.3 below.

ECPMI ECPMMS:2019
Constraints
 Procurement legislations
 Procurement guidelines or directives
 Organizational guidelines or directives
 Enterprise environmental factors
 required delivery dates
 Available skills
 Resources
 Attitude
 Lack of experience
 Organizational process assets

 Requirements definition
 Scope statement Procurement  Project documents updates
 Project description
 Risk register and management plan Management
 Activity resources requirements
 Project schedule
 Preliminary cost estimate
 Stakeholder register
 Procurement management plan
 Contract types
 Statement of work
 Procurement documents
 Procurement decisions
 Change request process
Competencies  Project document updates
Figure 2. 3: IMCO of Procurement Management Plan
2.1.1. Plan Construction Procurement Management: Inputs
i.) Project scope statement
The scope statement clearly specifies what the project shall deliver. Scope statement includes the
list of deliverables, and acceptance criteria, as well as important information regarding technical
issues or concerns in connection with the project.
ii.) Work breakdown structure (WBS)
The work breakdown structure (WBS) and related detailed statements of work provides an
identification of the deliverables and a description of the work for each WBS component
required to produce each deliverable.
iii.) Project description

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Description of the project and technical issues must be included materials.
iv.) Activity Resource Requirements
The list of resources required for each activity for the project. This will be the basis for
preparation of procurement documents, procurement method selection and selection criteria.
v.) Project Schedule
Project schedule includes information on timelines to be met for the project schedule, lead times
and market delivery periods.
vi.) Preliminary Cost Estimates
Cost estimate shall be developed by the procuring entity and will be used for budgetary and
evaluation of bid prices.
vii.)Stakeholder Register
The stakeholder register gives details and interest of the project participants and this will help to
consider their importance and influence on the procurement management. Refer Stakeholders
Management Manual for details.
viii.) Organization Environmental Factors
These are market conditions, availability and type of products and services on the market,
supplier’s performance and reputation, and any special local requirements and conditions which
will help design the procurement strategy and method.
ix.) Organizational Process Assets
Organizational process asset Includes management systems that are essential in developing the
procurement management plan and selecting the contractual relationships to be used. The
processes and procedures for conducting work available to project team with the organization in
which the project is being conducted, such as standard process, policies, product life cycle,
quality, standardized guidelines, templates, performance measurement criteria.
x.) Project Delivery Methods (Contract Types)
The Knowledge of major kinds of project delivery methods / contract types helps to choose the
one that creates the most fair and workable deal for an organization and the
Consultant/Contractor.
Generally, project delivery approaches are classified as traditional, integrated and turnkey based
on the general approach for delivering the project.
 Traditional; the design-bid-build (D-B-B) project delivery is considered to be the

traditional approach. This traditional delivery method relies upon a construction design

ECPMI ECPMMS:2019
that is essentially complete, and contractor solicitations are performed by way of

competitive bidding. Figure 2.3 illustrates this contractual arrangement.
 Integrated Project Delivery and Turnkey Approaches; integrated and turnkey project
delivery methods integrate people, systems, business structures, and practices most often
into a single construction project contract process. List of integrated project delivery and
turnkey approaches are provided below.
Design-build (DB): The responsibility for both design and construction

responsibility emanates from single source selection; generally the Contractor will
assume both responsibilities.
Design-build-operate-maintain-(transfer) (DBOM). This method encompasses the

design-build method with the added feature of time-scaled functions for
operating and maintaining the product after construction is completed.
Engineering-procurement-construction (EPC): The EPC project delivery method

has emerged as a preferred choice for many industries and is most often used for
processing or equipment- driven projects, such as oil refineries, mining plants, or
electrical energy production.
Construction management (CM): The CM organization, under contact with the

owner, sometimes known as the professional services contractor, manages the
overall functions of the project including designing, bidding, purchasing, and
construction, and can execute the delivery of construction “at-risk” or as an
agency (CM at-fee).
Public-private partnership (PPP): This alternative delivery method is a form of

alliance or partnership and is best used when owner financing is limited or
sometimes non-existent.

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Figure 2. 4: Contract Types, Degree of Participation, and Risk Taking
(Source: PMBOK 2016, construction edition)
xi.) Contract Risk Allocation
Generally, in the Ethiopian Construction Industry, Works contracts based on the contract types
are categorized as lump sum or fixed price and unit price or re-measurable contracts; whilst
Consultancy Contracts are classified as Lump sum or Time-based contracts. Only the contract
types that are common to Ethiopian construction industry are discussed. Annex 2 provides the
details for most common types of construction contracts.
Fixed-price or lump-sum contracts: Work is performed and paid for based on a

fixed value or lump-sum price according to the contract. These contracts are
suitable for projects that are sufficiently defined, which allows for an estimate of
the total project cost. This contract shall be used when the risk needs to be
transferred to the builder and the owner wants to avoid change orders for
unspecified work.
Unit-rate (price) or re-measurable contracts: Work is performed and paid for

based on a fixed amount (unit rate) for each unit of work. These contracts are
suitable for projects where the types of items are known, but not necessarily the
quantity of units. Contracts can be written that combine the unit price and lump-
sum method of payment.
2.1.2. Plan Construction Materials Management: Mechanisms
i.) A make-or-buy analysis
The make or buy decision involves whether to carry out the required services in-house or to

ECPMI ECPMMS:2019
procure it from a third party. The outcome of this analysis should be a decision that maximizes
the long-term economic advantages for an organization. There are a number of factors to be
considered when making this decision, includes the following:
 Capacity. Does the organization have sufficient capacity to deliver the services
by the project team? Alternatively, is the supplier reliable enough to carry out
quality services in a timely manner?
 Bottleneck. Will shifting the services to a consultant ease the burden on the
organization's bottleneck operation? If so, this can be a good reason to outsource.
 Strategic importance. How important is the service to the corporate strategy? If it
is very important, then it could make more sense that the organization carry out
the services, in order to maintain complete control over it. Conversely, something
having little importance can more easily be shifted to a supplier.
 Available contract types. The risk allocation in the available contract types is
also important in this analysis.
 Cost. Which alternative presents the lowest total out-of-pocket cost?
ii.) Expert Judgment
Experts are treated as assets in any organization and provide inputs to planning and estimating
any activity as their opinions are considered to be crucial. The experts can be stakeholders or
customers. Expert Judgment is one of the best accepted approaches and most useful too during
the planning phases of many activities. The expert judgment would be crucial in selecting the
contract strategy and also which method of procurement to use.
iii.) Market Assessment
It includes the identification, interest and availability of service providers, their technical
capability and financial capacity, and price trends. The extent of a market assessment depends
on, and is determined by, the degree of complexity and monetary value of the requirement. A
market study can be done using the online review and/or by soliciting information potential
suppliers, consultants or service providers, conferences etc. It can be done in-house, or by hiring
a specialized firm to carry-out the study.
It is very useful to develop a template for recording and filing the results of a market study, and
for future use when procuring similar services or works from similar market.
iv.) Meetings
Research alone may not provide specific information to formulate a procurement strategy
without additional information interchange meetings with potential bidders. By collaborating
with potential bidders, the organization purchasing the material or service may benefit while the
supplier can influence a mutually beneficial approach or product.

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v.) Competencies
The competencies required for a Procurement Manager/Expert Compiler, Result seeker, Innovator,
Functional Expert Adapter and Influencer.
The skills required from a procurement expert/manager are speaking/language, critical thinking,
active listening, persuasion, negotiation, reading comprehension, judgment and decision
making, complex problem solving, writing, active learning, time management, dependability,
attention to detail, analytical thinking, integrity, flexibility, stress tolerance, self-control,
persistence and concern for others.
2.1.3. Plan Construction Materials Management: Constraints
Controls are items that must be employed to ensure the plan procurement management process
achieve the procurement objectives and be executed in accordance with the regulations and
guidelines. The plan procurement is mainly controlled by
 Organization process assets
 required delivery dates;
 available skilled resources;
 enterprise environmental factors;
 attitude of stakeholders;
 organizational process assets;
 lack of experience;
 lack of relevant input data
2.1.4. Plan Construction Materials Management: Outputs
i.) Procurement management plan
The document describes how items will be procured during the project and the approach to be
used from initiation and development of procurement documents to contract closure. Specific
areas to describe include:
Procurement process: - This section provides a brief overview of the process requirements
necessary to manage procurement of the identified needs. It should include:
 Procurement process flowchart

 Initiating a request
 Procurement standard documents
 Development of requirements (technical, timing, quality, constraints)
 Request for approval
 Procuring body

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 Contract management responsibility

 Contract closure requirements
 Any constraints and assumptions that could affect planned procurements;
 Information on lead times to purchase certain items from sellers and considering the
extra time needed to procure these items with the development of the project
schedule
Roles and responsibilities: This section describes the various roles on the project that has
some connection to procurement. This section should describe who can request outside
resources, which can approve the requests, any secondary approvers, etc.
Identified procurement needs: This section details the services identified for outside
procurement. Each listed item should include a justification statement explaining why this
should be an outside purchase if there is the possibility of inside sourcing (make vs. buy
decision).
Timing: This section will describe the timeframe that resources are needed. This will provide
a better sense for when the procurement process needs to be started for each item.
Change review and approval process: Describe how changes are made to procurement
documents to ensure the changes are valid, understood and approved by the appropriate
people.
ii.) Procurement Statement of Work/TOR
The work to be done on procurement is called procurement statement of work. The procurement
statement of work must be clear, complete and as concise as possible. It should also describe the
work and activities that the seller is required to complete. The activities also include meetings,
reports and communications. The statement of work (SOW) for CP procurement is developed
from the project scope baseline and defines only that portion of the project scope that is to be
included within the related contract. The procurement SOW describes the procurement item in
sufficient detail to allow prospective sellers to determine if they are capable of providing the
products, services, or results. Sufficient detail can vary based on the nature of the item, the needs
of the buyer, or the expected contract form. Information included in a SOW can include objective
and scope of the service, tasks to be carried out, outputs/deliverables, reporting requirements,
data and services to be provided by the purchaser, number and qualification of key staff position
requirements, period of performance, work location, and other requirements.
The procurement SOW includes a description of any collateral services required, such as
performance reporting or post-project operational support for the procured item. In some
application areas, there are specific content and format requirements for a procurement SOW.
Each individual procurement item requires a SOW; however, multiple products or services can
be grouped as one procurement item within a single SOW.

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The procurement SOW can be revised and refined as required as it moves through the
procurement process until incorporated into a signed agreement.
iii.) Procurement documents
Procurement documents are used to solicit proposals/bids from prospective sellers/proponents.

Terms such as bid, tender, or quotation are generally used when the seller selection decision will
be based on price (as when buying commercial or standard items or works), while a term such as
proposal is generally used when other considerations, such as technical capability or technical
approach are paramount. Common terms are in use for different types of procurement
documents and may include request for quotation (RFQ), bidding documents for Procurement of
Works and request for proposal (RFP) for Procurement of Services. Specific procurement
terminology used may vary by industry and location of the procurement.
The buyer structures procurement documents to facilitate an accurate and complete response
from each prospective Consultant/Contractor and to facilitate easy evaluation of the responses.
These documents include a description of the desired form of the response, the relevant
procurement statement of work (SOW) and any required contractual provisions.
With government contracting, some or all of the content and structure of procurement
documents is normally defined by regulation.
The Public Property and Procurement Administration Agency of Ministry of Finance and
Economic Development of FDRE has issued Standard Bidding Documents (SBDs) and Request
for Proposals for use by public entities. The SBDs are located at www.ppa.gov.et
The complexity and level of detail of the procurement documents should be consistent with the
value of, and risks associated with the planned procurement. Procurement documents are
required to be sufficient to ensure consistent, appropriate responses, in some cases they may
need also to be flexible enough to allow consideration of any seller suggestions for better ways to
satisfy the same requirements
Issuing a procurement request to potential sellers to submit a proposal or bid is normally done in
accordance with the policies of the buyer’s organization, which can include publication of the
request in public newspapers, in trade journals, in public registries, or on the internet.
iv.) Evaluation/ Selection criteria
Source selection criteria are often included as a part of the procurement documents. Such criteria
are developed and used to rate or score seller proposals, and can be objective or subjective.
Selection criteria may be limited to only the purchase price if the procurement item is readily
available from a number of acceptable sellers. Purchase price in this context includes both the
cost of the item and all ancillary expenses such as delivery.

ECPMI ECPMMS:2019
Other selection criteria can be identified and documented to support an assessment for more
complex services. Some possible source selection criteria are:
Technical capability: - Does the seller have, or can the seller be reasonably expected to
acquire, the technical skills and knowledge needed. Has the company the type of experts
needed to deliver/carry out the services?
Technical approach: - Do the Firm’s proposed technical methodologies, techniques,

solutions, and services meet the procurement documents requirements or are they likely
to provide more or less than the expected results?
Past performance of the Consultant: - Does the Firm have experience of carrying out
similar assignment in the past? Has it delivered such assignment with good
performance?
References: - Can the Firm provide references from prior customers verifying its work
experience and compliance with contractual requirements?
v.) Make-or-Buy decisions
A make-or-buy analysis results in a decision of whether particular work can best be

accomplished by the project team or needs to be purchased from outside sources. If the decision
is to make the item, then the procurement plan may define processes and agreements internal to
the organization. A buy decision drives a similar process of reaching agreement with a supplier
for the product or services. The make-or-buy decisions will be linked into the Estimate Activity
Resources and Development of Schedule processes.
vi.) Change requests
A decision that involves procuring Services or Works may require a change request. Other
decisions during procurement planning can also create the need for additional change requests.
Change requests are processed for review and disposition through the Perform Integrated
Change Control process. (Refer Construction Project Scope Management Manual for details).
Changes to the project management plan and other components may result in change requests
that impact procurement actions.
vii.)Project document updates
Project documents that may be updated include:
 Requirements documentation,
 Requirements traceability matrix, and
 Risk register.

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2.1.5. Plan Procurement Management: Activities
The instructions below provide the activities that shall be carried out for plan procurement
management:
a) Identify need
b) Build procurement team
c) Develop specifications / terms of reference / statement of works (scope of Work)
d) Define or Determine method of procurement
e) Perform market research
f) Determine contract type
g) Finalize specifications/terms of references/statement of works (scope of work)
h) Develop bid/proposal evaluation strategy

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2.2. Process Group Two: Conduct Procurement Management
Conduct Procurement is a process of obtaining and selecting Consultants/Contractors, and

awarding a contract. The key benefit of this process is that it provides alignment of internal and
external stakeholder expectations through established agreements.
Conduct Procurement process includes the following: -
For Works (Construction Services)
 Preparation of Specification, Scope and requirements

 Preparation of Bidding Document(BD)
 Invitation for submission of Prequalification Applications
 Receipt and Evaluation of Prequalification Applications
 Invitation for submission of Bids and Issuing BDs
 Tender management
 Opening and evaluation Bids
 Notification of Bid evaluation result
 Complaint handling
 Pre-Contract award Discussion
 Contract signing
 Contract management
For Consulting Services (Services)
 Preparation of Terms of reference

 Advertising Request for Expression of Interest
 Short listing
 Preparation of Request for Proposal (RFP)
 Invitation for submission of Proposals and Issuing RFPs
 Tender management
 Opening and evaluation of Technical proposals
 Notification of Technical evaluation result
 Complaint handling
 Opening and Evaluation of Financial Proposals
 Notification of Final Evaluation Result
 Complaint Handling
 Contract Negotiation
 Contract signing
 Contract management
The Inputs, Mechanisms (Tools & Techniques & competencies), Constraints and Outputs [IMCO]
for conduct procurement process is shown in Figure 2.5 below.

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Constraints
 Available skilled resources
 Attitude of stakeholders
 Lack of experience
Inputs
Outputs
 Procurement management plan
 Cost estimate (budget)  Procurement documents
 Procurement procedures and Conduct CP  Awarded bidder
processes
 Annual procurement plan Procurement Plan CP  Contract agreements
 Resource calendars
 Request for proposals
 Project specifications  Change request
 Stakeholders commitments  Project management plan updates
 Procurement documents
 Evaluation criteria
Mechanisms
Tools and Techniques

Competencies Tools and
Techniques
Figure 2. 5 : IMCO diagram for conduct CP procurement
2.2.1. Conduct Procurement Management: Inputs
i.) Procurement Management Plan
Refer to Section 2.1.1 for Procurement Management Plan.
ii.) Cost Estimate (Budget)
Preparation of a well-thought-through cost estimate is essential if realistic budgetary resources

are to be earmarked. The cost estimate shall be prepared by either purchaser’s own staff or an
individual or a consulting firm based on pre-performed design exercise and market analysis. In
Case of Design, Bid and Build Contracts (traditional delivery method), the BOQ with Method of
Measurement and Payment, the project Specification, Drawings and Contract provisions should
be the basis of the cost estimate. Accordingly, Direct Costs (Labor, Material & Equipment) be
established vis-à-vis market base prices; and Indirect Costs (Overhead, Quality control, supervision
costs, insurance financial charges, profits, risks etc.) be established based on specific company
experience, project type, complexity and trend.
In Case of Design and Build Contracts (integrated type of contract delivery method) where the
Purchaser has not prepared detail BOQ, the cost estimate must be based on a preliminary or

ECPMI ECPMMS:2019
concept design and quantity estimated from the basic design.
In Case of Consulting Services, the cost estimate shall be based on the purchaser’s assessment of
the resources needed to carry out the assignment: experts’ time, logistical support, and physical
inputs (for example, vehicles, laboratory equipment). Costs shall be divided into two broad
categories: (a) fee or remuneration (according to the type of contract used), and (b) direct
expenses and reimbursable items. The RFP shall indicate the estimated level of experts’ time
inputs or the estimated total cost of the contract (budget).
iii.) Procurement Procedures and Processes
Experts should be familiar with the different process and procedures to be followed in a specific
contract to be procured. The procedures to be followed shall be legislated by law, and/or
commercial practices of an entity. Below is the process to be followed to conduct procurement.
iv.) Annual Procurement Plan
Annual Procurement Plan shall be published on Purchaser’s website, on Newspapers and Notice
Boards at the beginning of each Fiscal year. The Procurement Plan shall be prepared and should
be posted on a website by the relevant procurement focal person in the procuring entity.
v.) General Procurement Notice (GPN)
In case of Projects/Programs financed by donors like World Bank, African Development Bank, a
General Procurement Notice (GPN) should be published on UNDB website. The GPN describes
the objective of the program, the scope of procurement, and the name and address of the person
to be contacted for additional information regarding the announcement. The Procurement unit is
responsible for updating the GPN as needed. Only after the GPN is published, the “Specific
Procurement Notices” (SPN) for works respectively shall be posted.
After preparation of the procurement plan, the Procurement process follows with the
preparation of the bidding documents. Among other information, which must appear in the
documents, it is particularly important to ensure that information on technical and functional
specifications are complete and sufficiently detailed, and that it accurately reflects the needs of
the end-users. Technical specifications must be drawn by a competent technical authority or
person, with advice and external technical assistance if required. The solicitation can be either of
the two types:
 International Competitive Bidding (ICB)

 National Competitive Bidding (NCB)
The different types of procurement methods for Procurement of Works are
 Open Tendering
 Selective Tendering

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 Request for Quotation

 Restricted Tendering / Limited Tendering
 Direct Award
2.2.2. Conduct Procurement Management: Mechanisms
Conducting procurement management process involves issuing invitations and bidding

documents/RFPs (procurement documents) to contractors/consultants, process of answering
queries and clarification requests, issuing amendments to procurement documents issued if
required, receiving bidders’ bids/proposals, evaluating the bidders’ bids/proposals and
awarding contract to the selected bidder and signing of contract. Below are ways and process
that should be carried out during conducting procurement
i.) Pre-Bid/Proposal meetings
The pre- bid meeting is an opportunity for the purchaser to discover anything missing or unclear
in the procurement documents. It is a meeting between the buyer and all prospective sellers
prior to submittal of a bid or proposal. They are used to ensure that all prospective sellers have a
clear and common understanding of the procurement requirements, and that no bidders receive
preferential treatment. To be fair, purchasers should take great care to ensure that all prospective
sellers hear every question from any individual prospective seller and every answer from the
buyer. Typically, fairness is addressed by techniques such as collecting questions from bidders or
arranging field visits in advance of the bidder conference.
 Clarification to BDs/RFPs and Amendments
The organization may not necessarily use pre-proposal conferences in all tenders. In such cases
the bidders will be given chance to request in writing for any irregularities in the bidding
document or issues which need clarification. The organization has to give response in writing
and the response shall be distributed to all bidders at the same time. By way of clarification to
the questions raised by bidders or due to other necessity or requirement of change in the bidding
document, the organization will issue Amendments to the bidding document.
 Receipt and Opening of Bids
The purchaser shall allow enough time for the bidders to prepare their bids. The time allowed
shall depend on the assignment, but normally shall not be less than two weeks or more than
three months (for example, for assignments requiring establishment of a sophisticated
methodology, preparation of a multidisciplinary master plan). During this interval, the firms
may request clarifications about the information provided in the BD. The procurement unit shall
provide these clarifications in writing and copy them to all bidders on the pre-qualification list or
the list of bidders that purchased the BD. If necessary, the Procurement unit shall extend the
deadline for submission of Bids. No amendments to the technical or financial bid shall be
accepted after the deadline, although amended bids may be submitted before such deadline. A
committee of officials drawn by purchaser from the relevant departments (technical, finance, legal,
as appropriate), shall open all bids received by the deadline for the submission of proposals/bids

ECPMI ECPMMS:2019
at the designated place stipulated in the BD irrespective of the number of proposals/bids

received by such deadline. At the opening of technical proposals, in the presence of bidders
wishing to attend, the bid opening committee shall neither reject nor discuss the merits of any
proposals/bids.
All bids received after the deadline shall be declared late and rejected and promptly returned
unopened. The committee shall read aloud the names of the bidders that submitted bid, Bid
price, Validity period of the bid, the bid security amount, bid security validity period, and any
other information deemed appropriate.
 Clarification or Alteration of Bids
Except as otherwise provided in this manual in line with the public procurement proclamation
and directive, bidders, shall neither be requested nor permitted to alter their proposals in any
way after the deadline for the submission of bids. While evaluating bids, the technical evaluation
committee shall conduct the evaluation solely on the basis of the submitted bids, and shall not
ask bidders for clarifications, except for perfunctory queries.
ii.) Evaluation of Bids/Proposals (Consideration of Quality and Cost

 Evaluation of Bids for Works
 Evaluation of Bids for Works can be based on rated criteria or lowest evaluated bid.
 Evaluation of the proposals
The evaluation of the proposals for consultancy services involving technical and financial
proposals shall be carried out in two stages: first the quality (technical), and then the cost
(financial or commercial). Evaluators of technical proposals shall not have access to the financial
proposals until the technical evaluation is concluded. Financial proposals shall be opened only
thereafter. The evaluation shall be carried out in full conformity with the provisions of the RFP.
 Evaluation of Quality (technical)
Given the need for high quality services, the quality of the evaluation of technical proposals is
paramount. The purchaser shall evaluate each technical proposal. Commonly an evaluation
committee consisting of at least 3 (three) experts and not more than 5(five) members including
qualified specialists in the sector of the assignment under consideration take part. Each member
of the committee shall not be in a conflict of interest situation as per the provisions outlined in
this manual, and certify to that effect before participating in the evaluation.
The technical evaluation shall take into account the criteria and sub criteria indicated below as
reflected in the RFP.
The technical evaluation committee shall evaluate each proposal on the basis of its
responsiveness to the requirements of the RFP. A proposal shall be considered as noncompliance
and shall be rejected at this stage if it fails to comply with important aspects described in the

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RFP. Technical proposals containing any material financial information shall be declared
nonresponsive.
The members of the evaluation committee shall evaluate proposals in accordance with the
evaluation criteria specified in the RFP, independently of each other, and without any external
influence from any person or entity. A proposal shall be rejected if it fails to achieve the overall
minimum technical score specified in the RFP. At the end of the evaluation process, the technical
evaluation committee shall prepare a Technical Evaluation Report using standard form of
evaluation report or another report or another acceptable form. The report shall substantiate the
results of the evaluation and justify the total technical scores assigned to each proposal by
describing the relative strengths and weaknesses of the proposals. Large differences in the
individual scores given to a proposal for the same criterion or sub-criterion by different members
shall be addressed and a justification be provided in the technical evaluation report. All records
relating to the evaluation, such as individual score sheets shall be retained.
 Opening of Financial Proposals and Evaluation of Cost
After the Technical Evaluation Report is completed, the purchaser shall inform consultants
whose proposals did not meet the minimum qualifying technical score or were considered
nonresponsive to the RFP and TOR that their financial proposals will be returned unopened after
the signature of the contract. In addition, the purchaser shall inform each of the above
consultants of their overall technical score as well as scores obtained for each criterion and sub-
criterion if any. The purchaser shall simultaneously notify the consultants that have secured the
minimum overall technical score of the date, time, and place set for opening the financial
proposals. The opening date shall be set allowing sufficient time for consultants to make
arrangements to attend the opening of the financial proposals. The financial proposals shall be
opened in the presence of representatives of the consultants who choose to attend (in person or
online). The name of the consultant, the technical scores, including the break-down by criterion,
and the offered total prices shall be read aloud (and posted online when electronic submission of
proposals is used) and recorded when the financial proposals are opened.
The purchaser shall then evaluate and compare the financial proposals in accordance with the
following procedures. Prices shall be converted to a single currency as stated in the RFP (for
international competitive bidding). The purchaser shall make this conversion by using the selling
(exchange) rates for those currencies quoted by an official source (such as the Commercial Bank)
or by an internationally circulated newspaper for similar transactions. The RFP shall specify the
source of the exchange rate to be used and the date of that exchange rate, provided that the date
shall not be earlier than four weeks prior to the deadline for submission of proposals (usually 28
days), nor later than the original date of expiration of the period of validity of the proposal. For a
time-based contract, any arithmetical errors shall be corrected, and prices shall be adjusted if
they fail to reflect all inputs that are included in the respective technical proposals. For a lump-
sum contract, the consultant is deemed to have included all prices in its financial proposal.
The offered total price shall include all consultants’ remuneration and other expenses such as
travel, translation, report printing, or secretarial expenses. The proposal with the lowest offered

ECPMI ECPMMS:2019
total price may be given a financial score of 100 (one hundred) and other proposals given
financial scores that are inversely proportional to their prices. Alternatively, a directly
proportional or other methodology may be used in allocating the scores to the financial
proposals. The methodology to be used shall be described in the RFP.
 Combined Quality and Cost Evaluation
The total score shall be obtained by weighting the quality and cost scores and adding them. The
weight for the “cost” shall be chosen, taking into account the complexity of the assignment and
the relative importance of quality. Except indicated differently, the weight for cost shall normally
be 20 (twenty) points out of a total score of 100 (one hundred). The proposed weightings for
quality and cost shall be specified in the RFP. The firm obtaining the highest total score shall be
invited for negotiations.
vi.) Advertising for Submission of Prequalification Applications/EOIs
If Works are of complex nature, the purchaser is advised to carry out pre-qualification of bidders.
To obtain qualified Bidders, the purchaser may advertise an invitation for Pre-Qualification of
Bidders on the National Newspapers and/or Internationally accessible media. If there is a
requirement based on the ruling procurement procedure. The information on the Pre-
Qualification Document requested should enable the buyer to make decision or judgment on the
firm’s suitability.
In case of Consulting Services to obtain expressions of interest (EOIs), the purchaser shall
advertise a request for expressions of interest (REOI) for each contract for consulting firms on the
National Newspapers and/or Internationally accessible media. If there is a requirement based
on the ruling procurement procedure, a list of expected consulting assignments may need to be
included in the General Procurement Notice. The information on the EOI requested shall be the
minimum required to make a judgment on the firm’s suitability and not be so complex as to
discourage consultants from expressing interest. REOIs shall at a minimum include the following
information applicable to the assignment: required qualifications and experience of the firm, but
not individual experts’ bio data; short-listing criteria, required outputs and duration of the
assignment; and conflict of interest provisions. No less than 14 (fourteen) days from date of
posting on international or national media, shall be provided for responses, before preparation of
the short list. The late submission of a response to an REOI shall not be a cause for its rejection
unless the purchaser has already prepared a short list, based on received EOIs, that meets the
conditions set.
To initiate the process, invitation to bids will be made either through direct communication or
through open advertisement. An advertisement is placed in newspapers, magazines, internet,
etc. to attract sellers. Depending on the procurement rules and methods to be followed, the
advertisement could be posted through local and /or international media.
 Direct/Restricted Invitation

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Restricted Bidding
In case the Organization, based on the rules and procedures it is bind to, it may consider
restricted tendering method of procurement in line with Article 49.3 of The Public
Procurement Proclamation and Article 23 of the Public Procurement Directive, it may
solicit proposals from limited number of firms.
Single Source Procurement
Single Source Procurement method, is the process by which the organization will directly
solicit bid from a single supplier/bidder. The Procedures and conditions for this
procurement method shall be in line with Article 51 and 52 of the Procurement
Proclamation and Article 25 of the Public Procurement Directive.
vii.) Negotiations and the Award of Contract
In case of procurement of Works, negotiations on price are not permitted except in direct award
contracts. Pre-contract award discussions on non-material technical issues might be conducted if
necessary.
Negotiations for consultancy services shall include discussions on the TOR, the methodology,
purchaser unit’s inputs, and special conditions of the contract. These discussions shall not
substantially alter the original scope of services under the TOR or the terms of the contract, the
quality of the final product, its price, and the relevance of the initial evaluation be affected. Major
reductions in work inputs should not be made solely to meet the estimated cost or available
budget. The final TOR and the agreed methodology shall be incorporated in the “Description of
Services” which shall form part of the contract.
The selected firm should not be allowed to substitute key experts, unless both parties agree that
undue delays in the selection process make such substitution unavoidable or that such changes
are critical to meet the objectives of the assignment. If this is not the case and if it is established
that key experts were included in the proposal without confirming their availability, the firm
may be disqualified and the process continued with the next ranked firm. The key experts
proposed for substitution shall have qualifications equal to or better than the key experts initially
proposed.
Financial negotiations shall include clarification of the consultants’ tax liability in the project
coordination unit/procurement unit’s country (if any) and how this tax liability has been or
would be reflected in the contract. Payments under lump-sum contracts are based on the
delivery of outputs (or products), hence the offered price shall include all costs (experts’ time,
overhead, travel, hotel, etc.). Consequently, if the selection method for a lump-sum contract
included cost as a factor in evaluation, the offered price shall not be negotiated.
In the case of time-based contracts, payment is based on inputs (experts’ time and reimbursable)
and the offered price shall include experts’ rates and an estimation of the amount of
reimbursable. When the selection method includes cost as a factor in evaluation, negotiations of

ECPMI ECPMMS:2019
experts’ rates shall not take place, except in special circumstances, like for example, experts’ rates
offered are much higher than typically charged rates by consultants for similar contracts;
Consequently, the prohibition of negotiation does not preclude the right of the purchaser to ask
for clarifications, and, if the fees are very high, to ask for their change. Reimbursable are to be
paid on actual expenses incurred at cost upon presentation of receipts and therefore are not
subject to negotiations. However, if the purchaser wants to define ceilings for unit prices of
certain reimbursable (like travel or hotel rates), they should indicate the maximum levels of those
rates in the RFP or define a per diem in the RFP.
If the negotiations with the highest ranked consultant fail, purchaser shall inform the concerned
consultant in writing of all pending issues and disagreements, and provide them a final
opportunity to respond in writing. Contract negotiations shall not be terminated only for budget
considerations. If there is still disagreement, purchaser shall inform the consultant in writing of
its intention to terminate negotiations. Negotiations may then be terminated and the next ranked
consultant invited for negotiations. Once negotiations have commenced with the next ranked
firm, the purchaser shall not reopen the earlier negotiations. After negotiations are successfully
completed, the purchaser shall promptly notify other firms on the short list that they were
unsuccessful.
Notification of Award
According to the public procurement directive, procuring entities/project manager shall

announce the result of a bid evaluation to all bidders. The information to be disclosed to the
unsuccessful bidders shall be the reason why each of them did not succeed in their bid and the
identity of the successful bidder.
A letter of award to be sent by the procuring entity /project manager to a successful bidder shall
not constitute a contract between the prospective successful bidder and the procuring entity. A
contract shall be deemed to have been concluded between the procuring entity and the
successful bidder only where a contract containing detailed provisions governing the execution
of the procurement is signed.
A letter of contract award to be sent to a successful bidder shall contain the following
information
a) That the procuring entity has accepted his proposal/bid;

b) The total combined score and contract price/bid price;
Where the successful bidder cannot or is unwilling to sign a contract, the procuring entity
may either declare the bidder submitting the second most preferred bid the successful
bidder or invite such bidder to sign a contract or advertise the bid afresh by assessing the
benefit of the two options.
The procuring entity shall return to the bidders their bid security on the following
conditions:

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o If the successful bidder has signed contract and furnished the required contract
security;
o If the bid validity period initially offered by a bidder not willing to extend such
period has expired or if a bidder is unsuccessful.
Complaints on tendering processes
Subject to the provision of Article 43 of Procurement Directive, a bidder aggrieved or is likely to be

aggrieved on account of a purchaser inviting a bid not complying with the provisions of the
proclamation or the public procurement directive in conducting a bid proceeding may present
complaint to the head of the purchaser or to the secretariat to have the bid proceeding reviewed
or investigated.
Procedure for review of complaints presented to the head of the purchaser.
Before procurement contract is signed:
a) the purchaser conducting bid proceedings shall wait for seven (7) working days after disclosing
the result of the bid evaluation or after responding to a complaint, to give bidders time to present
complaint, if any, against the conduct of the bid proceeding or against the decision of the
purchaser on such complaint
b) a bidder aggrieved in connection with a procurement proceeding shall within five (5) working
days of when he became aware of or should have been aware of the reason giving rise to the
grievance, may submit his complaint to the head of the purchaser. A complaint submitted to the
Purchaser thereafter may not be entertained.
c) Unless the complaint is resolved by mutual agreement of the bidder that submitted it and the
purchaser conducting the procurement, the head of the Public Body shall give decision on the
complaint in writhing within ten working days from the date of submission of the complaint
Pursuant to Article 74/3 of the Proclamation.
d) The purchaser shall give to the complainant a copy of the decision within five (5) working days
from the date in which the decision was made
Confidentiality
Information relating to evaluation of bids and recommendations for award shall not be
disclosed to the consultants who submitted the proposals or to other persons not officially
concerned with the process, until the publication of the award of contract unless it is provided in
this Public Procurement Directive.
Competencies
Refer section 2.1.2 for competencies

ECPMI ECPMMS:2019
2.2.3. Conduct Procurement Management: Constraints
Refer section 2.1.3 of plan procurement for controls and constraints
2.2.4. Conduct Procurement Management: Outputs

i.) Awarded Bidder
The recommended bidder for award is the one that have been judged to be responsive to the
bidding documents in a competitive range based upon the outcome of the bid evaluation, and
subject to contract negotiation and subsequent signature.
ii.) Contract Agreements
A procurement agreement includes terms and conditions, and may incorporate other items that
the buyer specifies regarding what the seller is to perform or provide. It is the project
management team’s responsibility to make certain that all agreements meet the specific needs of
the project while adhering to organizational procurement policies. Depending upon the
application area, an agreement can also be called an understanding, a contract, a subcontract, etc.
Regardless of the document’s complexity, a contract is a mutually binding legal agreement that
obligates the seller to provide the specified products, services, or results, and obligates the buyer
to compensate the seller. A contract is a legal relationship subject to remedy in the courts. The
major components in an agreement document will vary, but may include the following:
• Agreement,
• Conditions of Contract which includes,
• Period of performance,
• Roles and responsibilities,
• Contractor/supplier’s place of performance,
• Payment terms,
• Warranty,
• Limitation of liability,
• Fees and retainer,
• Insurance and performance bonds,
• Change request handling, and
• Termination clause and alternative dispute resolution (ADR) mechanisms. The
ADR method can be decided in advance as a part of the procurement award.
• Completed Schedule of requirements
(Priced BOQ, employer’s requirement, Specifications, etc)
• Bidder’s offer,
• Schedule baseline,
• Performance reporting
iii.) Resource calendars

A resource calendar is a calendar that is used to reflect specific working hours, vacations, leaves
of absence, and planned personal time for individual resources. Resource calendars can be used

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for human resources as well as equipment. Resource calendars help organizations in their
resource planning. Organizations may also create shared resource calendars to manage a
resource pool. A resource pool makes it easier to administer people, or even equipment assigned
to tasks, in more than one project file. Using automation enables you to centralize resource
information, such as the resource name, calendar used, resource units, and cost rate tables.
Resource calendars are an important aspect of workforce planning.
Once a contract is in place the quantity and availability of contracted resources and those dates
on which each specific resource or resource group can be active or idle are documented.
iv.) Change requests
Change requests to the project management plan, its subsidiary plans, and other components are
processed for review and disposition through the Perform Integrated Change Control process.
v.) Project Management Plan updates
Elements of the project management plan that may be updated include:
 Cost baseline,
 Scope baseline,
 Schedule baseline,
 Communications management plan, and
 Procurement management plan.
vi.) Project documents updates
Project documents that may be updated include:

 Requirements documentation,
 Requirements traceability documentation
 Risk register, and
 Stakeholder registers
2.2.5. Conduct Procurement Management: Activities

The instructions below provide the activities that shall be carried out for conduct procurement
management:
a) Identify purchase type
b) Issue invitations
c) Prepare bid/proposal receiving protocol
d) Evaluate bids/proposals
e) Award bidders
f) Debrief and protest

ECPMI ECPMMS:2019
2.3. Process Group Three: Administer and Control CP Procurement Management
Administer / Control Procurements is the process of managing procurement relationships,

monitoring contract performance, and making changes and corrections to contracts as
appropriate. The key benefit of this process is that it ensures that both the seller’s and buyer’s
performance meet procurement requirements according to the terms of the contract agreement.
Both the buyer and the seller will administer/control the procurement contract for similar
purposes. Each are required to ensure that both parties meet their contractual obligations and
that their own legal rights are protected. The legal nature of the contractual relationship makes it
imperative that the project management team is aware of the legal implications of actions taken
when controlling any procurement. On larger projects with multiple providers, a key aspect of
contract administration is managing interfaces among the various providers.
Due to varying organizational structures, many organizations treat contract administration as an

administrative function separate from the project organization. While a procurement
administrator may be on the project team, this individual typically reports to a supervisor from a
different department. This is usually true if the performing organization is also the seller of the
project to an external customer.
Control Procurement includes application of the appropriate project management processes to

the contractual relationship(s) and integration of the outputs from these processes into the
overall management of the project. This integration will often occur at multiple levels when there
are multiple sellers and multiple products, services, or results involved. The project management
processes that are applied may include:
• Direct and Manage Project Work. Authorizing the work defined in the project manage
plan and approved changes to achieve the project’s objectives at the appropriate time.
• Control Quality. To inspect and verify the adequacy of the seller’s product.
• Perform Integrated Change Control. To assure that changes are properly approved and
that all those with a need to know are aware of such changes.
• Control risks. To ensure that risks are mitigated.
Control Procurement also has a financial management component that involves monitoring
payments to the seller. This ensures that payment terms defined within the contract are met and
that seller compensation is linked to seller progress, as defined in the contract. One of the
principal concerns when making payments to suppliers is that there is a close relationship of
payments made to the work accomplished.
The Control Procurement process reviews and documents how well a seller is performing or has
performed based on the contract and establishes corrective actions when needed. This
performance review may be used as a measure of the seller’s competency for performing similar
work on future projects. Similar evaluations are also carried out when it is necessary to confirm
that a seller is not meeting the seller’s contractual obligations and when the buyer contemplates

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ECPMI ECPMMS:2019
corrective actions. Control Procurements includes capturing the necessary details for managing
any early terminations of the contracted work (for cause, convenience, or default) in accordance
with the termination clause of the agreement. These details are used in the Close Procurement
process to terminate the agreement.
Agreements can be amended at any time prior to contract closure by mutual consent, in
accordance with the change control terms of the agreement. Such amendments are typically
captured in writing.
Outputs [IMCO] for control procurement (administer contract) process is shown in Figure 2.6
below.
Constraints
 Enterprise environmental factors-
required delivery dates
Inputs Outputs
 Project management plan  Procurement documentation/

Correspondence
 Procurement documents Administer and Control CP  Work performance information
 Agreements
 Change requests process Procurement  Contract change request
 Payment request
 Contract performance report  Project management plan updates
 Work performance data  Contract documents
 Organizational process assets  Organizational process asset updates
 invoices
Mechanisms
 Tools and Techniques

 Competencies
Figure 2.6: IMCO for Administer and control CP procurement
2.3.1. Administer and Control CP Procurement Management: Inputs
i.) Project Management Plan
The project management plan describes how the procurement processes will be managed from
developing procurement documentation through contract closure.
ii.) Procurement documents

ECPMI ECPMMS:2019
Procurement documents contain complete supporting records for administration of the

procurement processes; this includes procurement contract awards and the statement of work
(SOW).
iii.) Agreement
Agreements are understandings between parties, including understanding of the duties of each
party.
iv.) Approved change request
Approved change requests can include modifications to the terms and conditions of the contract,
including the procurement statement of work, pricing, and descriptions of the products, services,
or results to be provided. All procurement-related changes are formally documented in writing
and approved before being implemented through the Control Procurements process
v.) Work Performance reports
Seller performance-related documentation includes:

• Technical documentation. Seller-developed technical documentation and other
deliverable information are provided in accordance with the terms of the contract.
• Work performance information. The seller’s performance reports indicate which
deliverables have been completed and which have not.
vi.) Work Performance data
Work performance data includes (1) the extent to which quality standards are being satisfied, (2)
the costs that have been incurred or committed, and (3) identification of the seller invoices that
have been paid. All data are collected as part of project execution.
2.3.2. Administer and Control CP Procurement Management: Mechanisms
i.) Contract change control System
In A contract change control system defines the process by which the procurement can be
modified. It includes the paperwork, tracking systems, change order/instruction/proposal
procedures, dispute resolution procedures, and approval levels necessary for authorizing
changes. The contract change control system is integrated with the integrated change control
system.
The key focus here is to measure the impact of change on all project limitations. Changes to any
part of the project may be requested during the course of the project especially during the project
executing and monitoring and control phase. It is not necessary to execute all changes. In the
Perform Integrated Change Control, changes can be accepted or rejected after evaluation of their
impact.

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Whenever a change is requested, it is advisable to identify the impact of proposed change on

project cost, quality, risks, resources, scope, and also on customer satisfaction.
There are two pre-requisites to measure the impact of change:
• A realistic project management plan to be used as baseline

• A complete product and process scope (as applicable)
Since changes are inevitable, project manager should work to prevent the root causes of changes
whenever possible. Most cases indicate improper planning of the project results in change
requests. Although changes can happen, they are not encouraged and the handling of possible
changes must be planned, managed and controlled.
To control changes to the project, the project manager should:
• Identify all requirements at the earliest

• Comprehensively identify all the risks related to the project
• Establish time and cost factors
• Establish Change Management Process
• Follow the change management process
• Have required templates in place to create change requests
• Identify clear roles and responsibilities amongst stakeholders to approve changes
• If number of changes become disproportionate, re-evaluate the business case
• Consider terminating a project (if required) if the number of changes are disproportionate
• Ensure only approved changes are added to the baselines
Changes can have two categories: the one that impact the project management plan, baselines,
policies and procedures, charter, contract, or statement of work and the one that does not impact
any of this.
Successful management of contract and subcontract changes can reduce costs, timely completion
of work and services, increase performance results, and improve business relations.
ii.) Procurement Performance reporting / review
A procurement performance review is a structured review of the seller’s progress to deliver

project scope and quality, within cost and on schedule, as compared to the contract. It can
include a review of seller-prepared documentation and buyer inspections, as well as quality
audits conducted during seller’s execution of the work. The objective of a performance review is
to identify performance successes or failures, progress with respect to the procurement statement
of work, and contract noncompliance, which allow the buyer to quantify the seller’s
demonstrated ability or inability to perform work. Such reviews may take place as a part of
project status reviews, which would include key suppliers.
Reports required by the contract will assist the agency in monitoring the suppliers/contractor’s
general work effort, but cannot be relied upon to accurately measure contractor progress. The

ECPMI ECPMMS:2019
procuring entity would usually appoint staff members or, preferably a team of qualified
individuals, to take the responsibility of administering the contract. It is the responsibility of the
Contract Administrator to perform the obligations and duties of the procuring entity specified in
the contract and to ensure the contractors and service providers implement the contract in
accordance with its terms and conditions. Nonetheless, the contractor or services provider has
the primary responsibility to ensure that the works or services meet the required standards and
to advise on the need for any changes as a result of constraints faced during contract
implementation.
The person designated in the contract performs the key role in managing the contract and
monitoring the contractor’s performance.
Duties and Responsibilities
The duties and responsibilities of a contact person include:
 Ensure the contractor/consultant is performing Works as per the contract.

 Ensure the contractor’s/consultant’s personnel charged to the contract are engaged as
specified the contract.
 Accept and evaluate the quality of deliverables/products.
 Compare monies expended with percentage of completion.
 Perform administrative details concerned with the approval of subcontractors, etc.
 Alert appropriate agency personnel, including the contracting officer to any problems
that may have a negative effect on the project.
 Immediately alert and obtain guidance from the contracting officer and purchasing
agency counsel if contractor/consultant’s is not performing satisfactorily or if terms of
the contract are being violated.
 Conduct on-site visits to observe work in progress.
 Coordinate any appropriate contract amendments.
 Before final payment, measure the work performed against the work statement. If
performance does not meet contract requirements, it is incumbent upon the contact
person to identify deficiencies and to advise the contracting officer so remedial action
can be taken before final payment is made.
 Prepare a final evaluation of the contractor’s /consultant’s performance and place a
copy in the contract file for reference in future bidding
iii.) Monitoring Performance
A precursor to monitoring supplier performance is to ensure all procurement documents be

established with clear specifications that are comprehensive, measurable and enforceable.
Both the receiver/project manager and the purchaser have roles in monitoring supplier
performance and communicating/ escalating issues to their internal management team.
Monitoring is needed to ensure that the supplier is meeting the terms and conditions of the

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procurement documents. Monitoring will include, but not be limited to, items such as on time
delivery, responsiveness, completion of all requirements, and quality of supply or service
provided.
Monitoring the performance of the contractor is a key function of proper contract administration.
The purpose is to ensure that the contractor is performing all duties in accordance with the
contract and for the agency to be aware of and address any developing problems or issues.
Small or less complex contracts normally, require little, if any, monitoring. However, that does
not preclude the possibility of more detailed monitoring if deemed necessary by the agency.
Conversely, large contracts may need little monitoring if the items or services purchased are not
complex, and the agency is comfortable with the contractor’s performance and level of risk
associated with the contract.
Contract monitoring includes:
 Determining what to monitor and the type of monitoring.

 How to establish expectations so that individuals responsible for contract monitoring and
contractors understand what will be monitored and the criteria used to evaluate
contractor performance.
 How to use risk assessment to select which contractors should be reviewed, the level of
review for each contractor, and the subject matter to include in the review.
 How to use the results of monitoring review
Determining what to monitor
Consider the following questions when determining what to monitor:
• How will you know that the agency is receiving what is paid for?
• How will you know that the contractor is complying with the terms of the contract?
Review the statement of work and other contract terms, including contractor compliance
requirements. All of these requirements are deliverables that the contractor agreed to when the
contract was executed or the purchase order was issued. Design the monitoring program to
focus on items that are most important. Generally, this means to focus the monitoring on the
outcomes that result from the contract.
Consider the effect that the contract payment methodology has on what needs to be monitored.
For example, if payment is based on a firm fixed price (a specific amount of money for a unit of
service), it is not necessary to verify contractor’s expenses as they are not relevant to this type of
contract. Under a firm, fixed price contract, the agency should ensure that:
• The number of units billed is the same as the number of units received.
• The quantity and price agree with the contract amounts.
• The units meet or exceed the contract specifications.

ECPMI ECPMMS:2019
There are different types of monitoring:
Site Visits (full and limited scope)
– Full scope site visits are typically scheduled visits to the contractor’s /consultant’s place of
business. They are based on risk assessment and cover a broad range of contract compliance
and performance issues.
– Limited scope site visits typically focus on a particular problem. Examples of some typical
reasons for considering a limited scope site visit include, but are not limited to:
o Other contractors/consultants have experienced problems in a specific area and there
is an indication that this contractor/consultant might be experiencing the same
problem.
o Contractor/Consultant has provided a corrective action plan for a problem, but the
agency is not certain that the proposed solution will resolve the problem
More complex contracts and contracts that the agency perceives as having a higher degree of risk
may require both reviews and visits to the contractor’s/consultant’s facilities to ensure progress
is in accordance with the contract schedule. Site visits can be used to verify actual performance
against scheduled or reported performance. They can also ensure that the contractor/consultant
is dedicating sufficient resources and appropriate personnel to the contract. Site visits also
reinforce the importance of the contract to the contractor/consultant, as well as provide the
opportunity to enhance communication with the contractor/consultant.
To perform a site visit, the agency should develop a comprehensive and objective monitoring
checklist which:
– Focuses on the outcomes, but also includes compliance requirements. Monitoring criteria
should reference the applicable contract requirement.
– Assess contractor performance the same way. Are any errors considered minor or
inconsequential? If so, these must be outlined up front so that the contract is monitored
consistently. Clarify areas where monitors may exercise judgment
Desk Review
Typically, these are agency reviews of reports submitted by the contractor/consultant to the
entity. Entities should review the reports for the following;
– Compare the actual performance against the contract requirements. Is the

contractor/consultant performing in accordance with the contract requirements?
– Compare actual expenditures to the approved budget. Is the contractor/consultant
following their approved budget plan?
– Compare the current period to prior periods. Are there any unexplained trends? Is the
contractor/consultant performing work significantly different from the last period or the
last year?

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– Compare what the current contractor/consultant is doing in comparison with other

contractors/consultants performing similar work.
Compare the report with what is known about the contractor’s/consultant’s operating
environment. Did adverse weather in the area recently increase the cost of construction supplies
or in the cause of a temporary reduction in services provided?
Expenditure Document Review
These are reviews of contractor/consultant invoices to determine if the rates and services are the
same as allowed by the contract. Determine if the supporting documents such as cost reports,
third party receipts for expenses, detailed client information, etc., adequately support the request
for payment. If the contractor/consultant consistently provides incorrect invoices and/or the
supporting document is insufficient to support the request, then additional monitoring such as
an on-site visit may be necessary.
Risk Assessment
Limited resources require the use of risk assessment because there is not sufficient time to
oversee all aspects of a contract. An effective risk assessment model will help focus monitoring
resources on contractors/consultants with the highest risk of noncompliance. First, identify risk
factors. Risk factors are indicators that assess the risk of the contract or project objectives not
being achieved. General risk factors may include:
• The contractor’s/consultant’s past performance (and past performance of similar

contractors/consultants);
• The cost of the contract;
• Factors from desk reviews, such as the variance between expected and actual
performance;
• Significant problems with payment requests;
• Results of previous monitoring visits;
• Results of monitoring visits completed by other agencies or divisions within the same
agency that contract with the same contractor/consultant;
• The length of time since the last monitoring visit; and
• How experienced the contractor/consultant is with the type of work to be performed.
Once the risk factors are identified, assign weights to each factor. Weights describe how
significant each factor is in identifying the contractors/consultants who should be monitored. In
case of administering a number of contractors/consultants, rating each contractor/consultant on
the risk elements will highly enhance the planning and execution of monitoring task.
It is important to note that the risk assessment is a dynamic process that should be updated
regularly to reflect the results of monitoring visits, reviews of payment vouchers, desk reviews,
etc. For example, if a contractor/consultant has fallen significantly behind schedule in delivering
Works/Services to the targeted population, the risk assessment should be updated to indicate
the elevated risk and this impacts how the contract is monitored in the future. Likewise, if a

ECPMI ECPMMS:2019
contractor/consultant is well ahead of schedule in delivering Works/Services to the targeted

population, the risk assessment should be updated to indicate the lower level of risk. Refer
Construction Projects Risk Management Manual for details.
Using monitoring review results
Monitoring reviews, audits and investigations should be routinely carried out to:
 Ensure corrective actions have been taken;

 Identify common problem areas that might require training; and
 Improve future contracts. Agencies should design a system that includes criteria and
defined follow up actions.
The goal of follow up should be to bring the contractor/consultant back into compliance with the
contract requirements. Follow up is essential as the problem will not correct itself simply by
identifying it and including it in the monitoring report.
Monitoring results should also be used to improve the contract requirements for future contracts.
If there are unnecessary restrictions or insufficient restrictions, this is the time to make a note of
the recommended changes so future contracts can incorporate the changes.
If a supplier (contractor/consultant) fails to meet a term or condition, immediate action must be

taken, but should be progressive as suggested below:
 Initially that action may involve contacting the supplier and asking them the reason
behind the failure. If the supplier provides a satisfactory response, the issue and the
response should be documented.
 If the supplier either fails to respond, provides an inadequate response, or continues to
have performance problems, continue to document the performance issue and issue a
Cure letter/Notice of default/ Notice of unsatisfactory performance requesting a formal
response as to root cause, and proposed corrective actions, including timing. This letter
should be issued by the respective Contracting Officer.
If a supplier’s (contractor’s /consultant’s) poor performance rises to the level that it is necessary
to cancel their contract for cause:
 A formal cancellation letter must be drafted by the agency Contracting Officer and
approved by the Office Head prior to issuance. The respective agency legal counsel and
claims advisor if any must approve termination and be copied on the letter.
 The approved cancellation letter may be emailed (with a receipt confirmation requested)
or faxed to the supplier. The letter must also be mailed, delivery receipt required. Copies
of the confirmation documents must be retained as part of the purchasing record..

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If several instances with this same supplier have occurred; or if any one event is significant
enough by itself, the Contracting Officer should give consideration to suspension or debarment
of the supplier.
iv.) Inspections and Audits
Inspections and audits required by the buyer and supported by the seller, as specified in the
procurement contract, can be conducted during execution of the project to verify compliance in
the seller’s work processes or deliverables. If authorized by contract, some inspection and audit
teams can include buyer procurement personnel.
The inspection and verification, prior to acceptance, should ensure as a minimum that:
i. The correct quantity has been received,

ii. The works or services meet the technical standards defined in the contract,
iii. Any variations to the contract are well documented and accounted for,
iv. The works or services have been delivered or completed on time, or that any
delay has been noted and appropriate actions taken as indicated in the contract,
and
v. All required manuals or documentation have been received.
v.) Performance reporting
Work performance data and reports supplied by sellers are evaluated against the agreement
requirements. Work performance information from this evaluation is then reported as
appropriate. Performance reporting provides management with information about how
effectively the seller is achieving the contractual objectives.
vi.) Payment Systems
Payments to the seller are typically processed by the accounts payable system of the buyer after
certification of satisfactory work by an authorized person on the project team. All payments
should be made and documented in strict accordance with the terms of the contract.
vii.) Claims Administration
Contested changes and potential constructive changes are those requested changes where the
buyer and seller cannot reach an agreement on compensation for the change or cannot agree that
a change has occurred. These contested changes are variously called claims, disputes, or appeals.
Claims are documented, processed, monitored, and managed throughout the contract life cycle,
usually in accordance with the terms of the contract. If the parties themselves do not resolve a
claim, it may have to be handled in accordance with alternative dispute resolution (ADR)
typically following procedures established in the contract. Settlement of all claims and disputes
through negotiation is the preferred method. Refer section 11.3.4 for details for claims
management processes.

ECPMI ECPMMS:2019
viii.) Records Management System
A records management system is used by the project manager to manage contract and
procurement documentation and records. It consists of a specific set of processes, related control
functions, and automation tools that are consolidated and combined as part of the project
management information system. The system contains a retrievable archive of contract
documents and correspondence.
Competencies
Refer section 2.1.2 for competencies.
2.3.3. Administer and Control CP Procurement Management: Constraints
Refer section 2.1.3 of plan procurement for controls and constraints.
2.3.4. Administer and Control CP Procurement Management: Outputs
i.) Work Performance Information
Work performance information provides a basis for identification of current or potential

problems to support later claims or new procurements. By reporting on the performance of a
contractor/consultant, the organization increases knowledge of the performance of the
procurement, which supports improved forecasting, risk management, and decision making.
Performance reports also assist in the event there is a dispute with the seller.
Work performance information includes reporting compliance of contracts, which provides

procuring organizations a mechanism to track specific deliverables expected and received from
sellers. Contract compliance reports support improved communications with
contractor/consultant so that potential issues are addressed promptly to the satisfaction of all
parties.
ii.) Change requests
Change requests to the project management plan, its subsidiary plans, and other components,
such as the cost baseline, schedule baseline, and procurement management plan, may result
from the Control Procurements process. Change requests are processed for review and approval
through the Perform Integrated Change Control process.
Requested but unresolved changes can include direction provided by the buyer or actions taken
by the seller, which the other party considers a constructive change to the contract. Since any of
these constructive changes may be disputed by one party and can lead to a claim against the
other party, such changes are uniquely identified and documented by project correspondence.
iii.) Project Management Plan updates

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An element of the project management plan that may be updated includes:
• Procurement management plan. The procurement management plan is updated to

reflect any approved change requests that affect procurement management, including
impacts to costs or schedules.
• Schedule baseline. If there are slippages that impact overall project performance, the
schedule baseline may need to be updated to reflect the current expectations.
• Cost baseline. If there are changes that impact overall project costs, the cost baseline
may need to be updated to reflect the current expectations.
iv.) Contract Documents
Contract / Project documents that may be updated includes
 Contract documentation. Contract documentation may include the contract with all
supporting schedules, requested unapproved contract changes, and approved change
requests.
 Procurement documentation. Procurement documentation also includes any seller-

developed technical documentation and other work performance information, such as
deliverables, seller performance reports and warranties, financial documents including
invoices and payment records, and the results of contract-related inspections.
v.) Organizational Process Asset updates
The Elements of the organizational process assets that may be updated includes:
• Correspondence. Contract terms and conditions often require written documentation of

certain aspects of buyer/seller communications, such as the need for warnings of
unsatisfactory performance and requests for contract changes or clarification. This can
include the reported results of buyer audits and inspections that indicate weaknesses the
seller needs to correct. In addition to specific contract requirements for documentation, a
complete and accurate written record of all written and oral contract communications, as
well as actions taken and decisions made, are maintained by both parties.
• Payment schedules and requests. All payments should be made in accordance with the
procurement contract terms and conditions.
• Seller performance evaluation documentation. Seller performance evaluation
documentation is prepared by the buyer. Such performance evaluations document the
seller’s ability to continue to perform work on the current contract, indicate if the seller
can be allowed to perform work on future projects, or rate how well the seller is
performing the project work. These documents may form the basis for early termination
of the seller’s contract or determine how contract penalties, fees, or incentives are
administered. The results of these performance evaluations can also be included in the
appropriate qualified seller lists

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2.3.5. Control and Administer CP Procurement Management: Activities
The instructions below provide the activities that shall be carried out for control/administer
procurement management:
a) Develop contract administration plan

b) Manage contract changes
c) Develop issue logs / Organize contract issues and disputes
d) Manage extension of time issues
e) Manage cost related maters
f) Identify issues as to suspension and debarment

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2.4. Process Group Four: Close CP Procurement
The Close Procurement process also involves administrative activities such as finalizing open
claims, updating records to reflect final results, and archiving such information for future use.
Close Procurement addresses each contract applicable to the project or a project phase. In
multiphase projects, the term of a contract may only be applicable to a given phase of the project.
In these cases, the Close Procurement process closes the procurement(s) applicable to that phase
of the project. Unresolved claims may be subject to litigation after closure. The contract terms
and conditions can prescribe specific procedures for agreement closure. The Close Procurement
process supports the Close Project process group by ensuring contractual agreements are
completed or terminated.
Close Procurement process involves product verification (was the work completed correctly?)
and administrative closeout (updating and archiving of records).
Early termination of a contract is a special case of procurement closure that can result from a
mutual agreement by both parties, from the default of one party, or for convenience of the buyer
if provided for in the contract. The rights and responsibilities of the parties in the event of an
early termination are contained in the termination clause of the contract. Based upon those
procurement terms and conditions, the buyer may have the right to terminate the whole contract
or a portion of the contract, at any time, for cause or convenience. However, based upon those
contract terms and conditions, the buyer may have to compensate the seller for seller’s
preparations and for any completed and accepted work related to the terminated part of the
contract.
Outputs [IMCO] for close procurement process is depicted in Figure 2.8 below.

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Constraints
Outputs
Inputs
Close CP  Contract file
  Formal acceptance and
Project management plan Procurement
update closure
 Contract documentation  Close files
 Organizational process
assets updates
Mechanisms
 Tools and Techniques

 Competencies
Figure 2.7: IMCO for Close CP procurement
2.4.1. Close Procurement Management: Inputs
i.) Project Management plan
The project management plan contains the procurement management plan, which provides the
details and guidelines for closing out procurements.
ii.) Contract documents
To close the contract, all contract documentation is collected, indexed, and filed. Information on
contract schedule, scope, quality, and cost performance along with all contract change
documentation, payment records, and inspection results are catalogued. This information can be
used for lessons learned information and as a basis for evaluating contractors for future
contracts.
2.4.2. Close CP Procurement Management: Mechanisms
i.) Procurement Audit

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A procurement audit is a structured review of the procurement process originating from the Plan
Procurement Management process through Control Procurements. The objective of a
procurement audit is to identify successes and failures that warrant recognition in the
preparation or administration of other procurement contracts on the project, or on other projects
within the performing organization.  
ii.) Procurement negotiation
In all procurement relationships, the final equitable settlement of all outstanding issues, claims,
and disputes by negotiation is a primary goal. Whenever settlement cannot be achieved through
direct negotiation, some form of alternative dispute resolution (ADR) including mediation or
arbitration may be explored. When all fails, litigation in the courts is the least desirable option.
iii.) Records Management System
A records management system is used by the project manager to manage contract and
procurement documentation and records. Contract documents and correspondence are archived
through the records management system as part of the Close Procurement process.
iv.) Competencies
Refer section 2.1.2 for competencies.
2.4.3. Close Procurement Management: Controls & Constraints
Refer section 2.1.3 of plan procurement for controls and constraints.
2.4.4. Close CP Procurement Management: Outputs
i.) Closed Procurements  
The buyer, usually through its authorized procurement administrator, provides the seller with
formal written notice that the contract has been completed. Requirements for formal
procurement closure are usually defined in the terms and conditions of the contract and are
included in the procurement management plan.
ii.) Organizational Process Assets update
Elements of the organizational process assets that may be updated includes
• Procurement file. A complete set of indexed contract documentation, including the

closed contract, is prepared for inclusion with the final project files.
• Deliverable acceptance. Documentation of formal acceptance of seller-provided
deliverables may be required to be retained by the organization. The Close Procurement
process ensures this documentation requirement is satisfied. Requirements for formal

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deliverable acceptance and how to address nonconforming deliverables are usually

defined in the agreement.
• Lessons learned documentation. Lessons learned, what has been experienced, and
process improvement recommendations, should be developed for the project file to
improve future procurements. In addition, performance evaluations document the
seller’s ability to continue to perform work on the current contract, indicate if the seller
can be allowed to perform work on future projects, or rate how well the seller is
performing the project work. These documents may form the basis for early termination
of the seller’s contract or determine how contract penalties, fees, or incentives are
administered. The results of these performance evaluations can also be included in the
appropriate qualified seller lists.
2.4.5. Close CP Procurement Management: Activities
The instructions below provide the activities that shall be carried out for close procurement
management:
a) Prepare contract completion report

b) Issue final payment / account report
c) Issue final taking over or performance certificate or approval or discharge
d) Prepare lessons learned review report

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2.5. Procurement Management for Engineering Services
2.5.1. Procurement methodologies
Engineering services contracts (design or construction supervision/contract administration) are

solicited through RFP (Request for Proposal) for competitive contracts. The main consideration
when choosing a selection method is the expected budget value for consultancy services. There
are, however, other factors that should be taken into account. These factors are project
complexity and specificity or time associated with a particular selection process.
It is the responsibility of the contracting authority / procuring entity to ensure that an

appropriate consultant selection mechanism is used. The criterion for choosing a selection
method shall be in accordance with the Federal Public Procurement proclamation and guidelines
(refer FPPPAA website; www.ppa.gov.et). In case of Projects/Programs financed by donors like
World Bank, African Development Bank, the financers procurement guidelines and other
requirements in conjunction with the country laws should be applied.
It is essential that the scope of the project and related professional inputs requirement,
milestones, deliverables, statement of works be determined before a request for consultant
services is processed (refer Plan Procurement process).
In the main, there are three tendering approaches:

 Open tendering: Where Expression of Interest (EOI) or Notice of Proposed Procurement
(NPP) is publicly advertised. Any eligible individual or firm can submit a proposal or
express interest to participate.
 Selective tendering: A two-stage process, implying two publications on the procurement,
where proponents first provide letters of interest or intent (expression of interest) and /
or a Statement of Qualification and at the second step, those who qualified at the first
stage are requested or invited to submit detailed proposals.
 Limited tendering: Limited tendering may only be used under specific conditions (i.e.
extreme urgency brought about by unforeseeable events). Once this method is found to
be justified, one or more proponents are invited to present proposal(s) (refer FPPPAA
website; www.ppa.gov.et).
2.5.2. Legal nature of consultant’s role for engineering services
Relation between owners/clients and the consultants under contract can be very complex.
Consultants often act as ‘agent’ on behalf of the owner/client, exercising authorities and entering
into bidding contracts.
It shall be identified from the Conditions of Contract for Works and consultant contracts that the
consultant is engaged to perform consultant services and that the consultant shall NOT be
regarded as an employee NOR an agent of the owner/client in some circumstances.

ECPMI ECPMMS:2019
An agent is “a person authorized by owner/client to act for, or in place of, the owner; one
entrusted with the contract and whose functions is to bring about, modify, affect, accept
performance of, or terminate contractual obligation between the owner, contractor and third
persons.”
In some instances, however, consultants may be perceived to be ‘agents’ of the owner/client, and
where their behaviours may be construed as such to be an ‘agent’ of through words or conduct.
The relationship of the owner/client and ‘agent’ can only be established with the consent
(expressed or implied) of the owner/client and the ‘agent’.
Contractors are not usually familiar with the consultant’s contract, and unless they receive notice
of specific limitations to the consultant’s authority or delegated power, it may be reasonable for
them to perceive the consultant as having the authority to do anything reasonably necessary to
carry out duties which they are expressly authorized to do so. This could lead to the consultant
being seen as ‘agent’ of the owner/client in some situations.
If the consultant was an ‘agent’, the consultant would be deemed to have the legal power to the
conditions of contract relationship with third parties (the contractor). In other words, should the
consultant instruct the contractor to do work not authorized by the owner/client, the latter could
be liable to pay that work.
In order to ensure that the consultant is NOT perceived as an agent or employee of the
owner/client, the Owner/Client should:
 At the pre-planning meeting: explain and emphasize the Conditions of Contract at the
initial meeting with the consultant,
 Make clear the exact nature of the consultant’s roles, responsibilities and authorities
 Ensure all communication flow be made through the consultant
 Where communication between the consultant and the contractor become contentious,
seek the assistance of Claims Expert to assist in resolving the situation
2.5.3. Engineering Contract Administration
i.) General
Contract administration is the process that begins from when the contract is awarded to until
when the services is completed and accepted or the contract terminated; payment has been
made; and disputes have been completely resolved.
The contract administration of Engineering Services is a primary part of the procurement process
that assures the project owner/client gets a quality product for what it has agreed and assures
that the users/stakeholders are satisfied with the final product (engineering services:
design/supervision).

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ii.) Purpose
The purpose of the engineering services contract administration is:
 Administer a contract which defines the need,

 Develop a means and method to meet the need,
 Ensure all contractual and legal requirements are met,
 Assessing any and all risks,
 Allocating necessary resources to ensure that the engineering service is executed in strict
conformance to all contract provisions
 Monitoring the actual contract and progress,
 Comparing measured performance to established standards,
 Open communication throughout the process
 Receive product and/or service that meet all requirements, and
 Documentation of all final results / deliverables (reports / designs / drawings
/specifications / tender documents, etc)
iii.) Focus
The focus of the engineering services contract administration is:
 Obtaining quality services that meet or exceed requirements (SOW) / terms of reference,
 Schedule-complete project on time,
 Budget-complete project within budget and
 Closeout-must be problem free
iv.) Influences
The following factors influence engineering services contract administration:
 Nature of the works, and

 Experience of the firm and commitment of the personnel involved
v.) Process
 Begin with post award orientation: either by conference / kick-off meeting, letter or some
other form of communication,
 Establish good communication process: helps both parties (owner/client and consultant)
to achieve a clear and mutual understanding of the requirements;
 the consultant is required to understand the roles and responsibilities of the owner/client
Project Manager who will administer the contract, and reduces future problems;
 Pre-construction meeting (kick-off meeting) with applicable program and contracting
officials prior to the post award orientation conference so that there is a clear
understanding of their specific responsibilities and restrictions in administering the
contract;

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 Discuss authority of the project owner’s personnel who will administer the contract,
quality control and testing, the specific contract deliverable requirements, special contract
provisions, etc.;
 Ensure there is an alternative dispute resolution technique in place – known as
"partnering" to help avoid future contract administration problems;
 To ensure that the end users are satisfied with the services being obtained under the
contract, obtain input directly from the customers through the use of customer
satisfaction surveys
vi.) Monitoring
Monitoring of engineering services contract administration involves:
 Develop a master schedule and a work breakdown structure (WBS) that incorporates
every important date or milestone in the contract,
 List contract deliverables and their evaluation criteria in details, with checklist for the
team who perform the tasks,
 Set a schedule and reminders for required reports, including the format and delivery
method,
 Ensure all communications flow from the consultant is directed through the Project
Manager to the contractor including any contract interruption, site requests or request for
changes or information. Consultants provide recommendations to the Project Manager,
so that the Project Manager can make an informed decision, however the Project Manager
remains the ultimate decision maker,
 Be familiar with contents of the RFP, contract, and review all change orders and
contemplate change order notices in detail,
 Attend all site meetings and review minutes for accuracy. When unable to attend site
meetings, review the minutes and discuss with the consultant.
 Exercise the right to override recommendations or decisions made by consultants and to
accept or reject work regardless of the consultant’s recommendation.
 Deal with issues promptly (when they arise). If any issue is of a specialist/technical
nature, seek advice from third parties. If there is conflicting advice, consult with various
professional and technical expertise from the industry.
 Reporting requirements (format, frequency, what information, how transmitted)
 For each party involved in the contract, document change orders and contract
modifications that require rescheduling of any deliverables.
 Ensure that expenses charged to the contract are allowable, allocable and reasonable.
 Give room for competing priorities
vii.)Payment / Invoice processing
 Establish clear roles and responsibilities of procurement, program, and finance officials
with regard to review and approval of contractor invoices and payments.

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 Ensure consistent review and approval of payments for contracts prior to disbursement.
 Arrange for sufficient guidance to Owner's Technical Representatives on how to conduct
payment or invoice reviews
 Establish sufficient policies and procedures on payment or invoice submission and
approval.
 Sufficient information on the payment or invoice for thorough review of claimed costs to
determine if they are allowable, allocable, and reasonable.
 Avoid delays in processing payment or invoice.
 Sufficient documentation, record keeping, and tracking of payment or invoice.
viii.) Claims
Claims in connection with engineering services contracts should be recognized timely and it
involves “timely” and “accurate” detection of the claim(s) in terms of the contract provisions and
requirements defined in the scope of services (terms of reference). The detection of the claims as
to the services comes from performance reviews, scope review, expenditure reviews, project
meetings, site visits etc.,
Notification of engineering service claim involves alerting the other party of a potential problem
in a manner that is non-adversarial. An initial letter of a claim notice to the other should be
concise, clear, simple, conciliatory, and cooperative. It should indicate the problem and alert the
other party of the potential increase in time or cost.
ix.) Extension of time
Engineering service providers expected to substantiate extension of time requests for events that
are considered to be owner’s/client’s risk events or beyond the control of both parties.
Engineering service providers /Consultants are responsible to provide detailed particular for the
reasons to request extension of time.
Owner/client must follow the approval process for extension of time for engineering service
contracts. The conditions of contract for client/ consultant services agreement should be strictly
adhered during processing of extension of time.
x.) Contract closeout
 Management attention to contract closeout.

 Ensure efficient Management Information Systems to monitor the contract closeout
process.
 Ensure efficient coordination between contracting activity, inspectors general, and audit
Agency.
 Control backlog of unscheduled audits.
 Ensure compliance with FPPAA Regulation provision for increase in contract price,
changes, other change Proposals submitted by contractors
 Avoiding Disputes in Contract Closeout – use “Partnering” from the start of project.

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 Closeout documentation.
2.5.4. Procurement Management for Works
i.) Procurement methodologies
The procurement methodology for Works (construction services) should be part of project
planning. It is particularly important that a bidding approach be established collectively by the
Project management and contracting teams early in a project’s development. Owners/clients or
procuring entity generally uses two distinct bidding approaches to solicit and evaluate offers
from bidders.
These are (1) Pre-qualification and then through an Invitation to Tender (ITT) and (2) Tenders.
Through an Invitation to Tender (ITT)
Pre-qualification can be used when there is a need to acquire complex or extended Works
(construction services). In Pre-qualification, owner/client is attempting to invite for Tender from
firms who are experienced. In this solicitation, owner/client is looking for expertise and quality
of construction services at the best possible price. It is therefore critical that the level of expertise
and quality of construction service required for each project first be determined, then clearly
communicated to proponents and, finally, properly evaluated by a knowledgeable and objective
owner/client selection team.
Tenders can be used when the scope of work to be delivered under the contract is fixed and
finite. Bidders are invited to submit their price for providing that Works (construction services).
The owner/client or procuring entity objective is to obtain the technical compliance and lowest
bid and lowest acceptance price for the work.
The most recommended method for Works procurement is acquiring using Tenders either
through public advertisement or source lists. The estimated cost of the construction work to be
tendered is the main consideration when determining whether to use public advertisement or a
source list.
Bid/Proposal class are used when there is a need to acquire complex or extended construction
services, usually through construction management or when only part of the required services,
as in Design-Build.
In bid calls, owner/client is looking for expertise and quality of services at the best possible
price. It is therefore critical that the level of expertise and quality of service required for each
project first be determined, then clearly communicated to proponents and, finally, properly
evaluated by a knowledgeable and objective owner selection team.
The different types of procurement methods for Procurement of Works are
 Open Tendering

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 Selective Tendering
 Request for Quotation
 Restricted Tendering / Limited Tendering
 Direct Award
ii.) Design and Construction Implementation Methodologies
There are four primary methodologies currently employed or practiced in the Ethiopian
construction industry for procurement of Works (construction services).
 Traditional delivery method

 Design-Bid-Build (D-B-B)
 Integrated and EPC turnkey delivery methods
 Design-Build (D-B)
 EPC Turnkey contract
 Design-Build-Maintain (D-B-M)
The selection of the best or optimum methodology is a key consideration for the owner/client.
The solicitation of one methodology over another should be carefully analysed by all
stakeholders during the development of the risk management plan in order to determine the
inherent risks, advantages and disadvantages associated with each methodology.
The selection of a particular methodology for the delivery of Works (construction services) is
based on an analysis of those risks identified in the risk management plan that may impact the
priority of the project during the project’s planning and implementation stages.
Owner/client must follow informed selection of the optimum or best approach based upon a
review of:
a) The complexity of the construction project (warehouse = low-range level; custom office
building = middle -range level; a laboratory facility = high-range level).
b) Priority of objectives (cost of project vs. time of delivery vs. quality of product delivered).
c) Degree of control sought on the project by the owner / client (design, quality of material
selections, etc.).
Below Table 2.2 depicts the characteristics of project delivery methods / contract
types/construction methodologies that are widely used in Ethiopian construction industry.

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Table 2. 2 : Characteristics of Construction Methodology
Construction Characteristics of Construction Methodology

Methodology
Design-Bid-Build [D-B-B] A design consultant is initially selected through a competitive

proposal process, to design the project and prepare design and
construction tender documents. Contractors subsequently submit
competitive tenders (bids) based on the scope of work outlined in
those bid documents and the successful contractor is awarded a
contract to construct the project. The owner/client maintains
maximum control of the final product (design, selections of
materials) through the design process.
Relative to the delivery time of other approaches, D-B-B is generally the

lengthiest methodology, as construction may only commence once the
entire design is complete.
Design-Build [DB] This methodology is another variation of D-B-B and is considered

a ‘fast-track’ and sometimes a ‘best-value’ procurement method. The
design consultant and the contractor are retained as a team.
Competitive bids provide an innovation industry-driven design
solution in response to the detailed employer’s requirements /
performance specifications that outline the owner’s/client’s need.
Engineering- The EPC project delivery method has emerged as a preferred

procurement- choice for many industries and is most often used for processing or
construction [EPC] equipment- driven projects, such as oil refineries, mining plants,
railway projects, or electrical energy production.
Design-build-maintain This method encompasses the design-build method with the

(DBM). added feature of time-scaled functions for operating and
maintaining the product after construction is completed.
2.5.5. Comparison Construction Implementation Methodologies
Below construction methodologies comparison table provides the perceived advantages and
disadvantages of the methodologies practiced in the Ethiopian construction industry.

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Table 2.3: advantages and disadvantages of the CP implementation methodologies

Construction Advantages Disadvantages Context
Methodology suitability
Design-Bid-  Opportunity to refine  Major effort required to  Suitable for

Build [D-B-B] design prior to define scope and design in mid to high
committed contract advance of established bids level
price and construction and costs complexity
 Established standard  Lengthy consultative projects where
contracts, risk development and approval priority of cost
management process and quality
mechanisms,  Sensitive to changes: Changes prevail over
familiarity in design made to design due to client time of delivery
and construction requests or unforeseen sit
industry condition during construction
 Owner/client has full or error /omission in the
control over design and design are expensive (may
construction incur time delays and
additional cost
Design-Build  Faster delivery time  Major effort required to  Suitable for
[DB] than D-B-B develop performance medium level
 provide an innovation specification prior to bids and complexity
industry-driven design thus establish cost projects where
solution  Owner/client has less control drivers are time
 Cost may be over design and construction and cost
established in bids  Sensitive to changes: changes
prior to award and to performance specification
commitment to due to client
construction requests/unforeseen sit
 Fewer client and conditions during
management resources construction are expensive
needed (may incur time delays)
 Bidding process is expensive
as honorarium need to be
paid (for building section in
Ethiopian construction
industry)
Engineering-  Contractor bears the  Cost- contractors will add a  Suitable for
procurement- risk of integrating the substantial risk premium to high level
construction performance of all the price complexity
[EPC] package’s contractors,  Control- the contractor projects where
including design controls the detailed design drivers are time
 The contractor bears and construction process and cost
supply chain solvency  Quality- the contractor will
risks aim for the minimum
 The transfer of other compliant standard
construction risks is  Bidder resistance- EPC has
maximized relative to been unpopular among some
other procurement contractors (though market
methods conditions are rapidly
 Remedies liability caps changing)
and bond amounts are  Duration- total construction
all sized relative to the time may be prolonged by
total cost of the Works required ……...EPC sequence

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Construction Advantages Disadvantages Context

Methodology suitability
and thus likely to cover  Capacity/Competition- few

a significant of the contractors have the balance
owner’s losses sheet capacity to accept (and
 Administrative bond) the risk of large projects
burdens on the owner on an EPC basis
are minimized  Claims- contractors are
 The documentation is motivated to make claims to
relatively simple and alleviate risk transfer
standardized  Caps- EPC risk transfer is in
 EPC procurement is reality limited by express
widely used and liability limits and by balance
understood and is the sheet and bonding limitations
most “bankable” of contractors
procurement method
Design-build-  Combines  Sub-contractors may be  Suitable for

maintain responsibility for brought into the project late in medium and
(DBM). functions that are the process high-level
usually disparate-  Need up-front program and complexity
design, construction, performance criteria’s projects where
and maintenance  Owner is pushed for early drivers are time
under a single entity decisions and cost
 Provides advantages  Major effort required to
for contractor to add develop performance
efficiencies specification prior to bids and
 Faster procurement thus establish cost
delivery time  Owner/client has less control
 provide an innovation over design and construction
industry-driven design  Sensitive to changes: changes
solution to performance specification
 Fewer client and due to client
management resources requests/unforeseen sit
needed conditions during
construction are expensive
(may incur time delays)

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2.6. Contracts Administration
General
Contract administration is the process that begins from when the contract is awarded to until
when the construction service is completed and accepted or the contract terminated; payment
has been made; and disputes have been completely resolved.
The contract administration of Works (Construction Service) is a primary part of the

procurement process that assures the project owner/client gets a quality product for what it has
agreed and assures that the users/stakeholders are satisfied with the final product (construction
services).
Purpose
The purposes of the construction services contract administration are:
 Administer a contract which defines the need,

 Develop a means and method to meet the need,
 Ensure all contractual and legal requirements are met,
 Assessing any and all risks,
 Allocating necessary resources to ensure that construction project is built in strict
conformance to all contract provisions
 Monitoring the actual contract and progress,
 Comparing measured performance to established standards,
 Open communication throughout the process
 Receive product and service that meet all requirements, and
 Documentation of all final results / deliverables
Focus
The focus of the construction services contract administration is:
 Obtaining quality product and services that meet or exceed contract specifications (SOW),
 Schedule-complete project on time,
 Budget-complete project within budget and
 Closeout-must be problem free
Influences
The following factors influence construction services contract administration:
 Nature of the works,

 Type of contract, and
 Experience and commitment of the personnel involved
Process

ECPMI ECPMMS:2019
 Begin with post award orientation: either by conference / kick-off meeting, letter or some
other form of communication,
 Establish good communication process: helps both parties (project owner and contractor)
to achieve a clear and mutual understanding of the contract requirements; & the
contractor to understand the roles and responsibilities of the Project Manager who will
administer the contract, and reduces future problems;
 Pre-construction meeting with applicable program and contracting officials prior to the
post award orientation conference so that there is a clear understanding of their specific
responsibilities and restrictions in administering the contract;
 Discuss authority of the project owner’s personnel who will administer the contract,
quality control and testing, the specific contract deliverable requirements, special contract
provisions, etc.;
 Ensure there is an alternative dispute resolution technique in place – known as
"partnering" to help avoid future contract administration problems;
 To ensure that the end users are satisfied with the product or service being obtained
under the contract, obtain input directly from the customers through the use of customer
satisfaction surveys.
2.6.1. Pre-construction start-up meetings
There is a need to ensure that construction briefing information and documentation being
provided to a construction contractor by the consultant/client at the initial pre-construction
meeting is recent, relevant and consistent, in order to safeguard the interests of the owner/client
and provide uniform direction to all project team members.
The pre-construction start-up meeting takes place following the award of a construction contract
and should not be confused with the tender review meeting (also called the pre-award meeting),
which takes place, as required, prior to the award of a contract. These tender review meetings
would be used to assess whether the contractor understands the technical requirements of the
project and/or identify any issues / requirements that are essential to the successful delivery of
the project.
The meeting should include the consultant, the client, the contractor and other third parties (as
appropriate).
2.6.2. Monitoring
Monitoring of construction services contract administration involves:
 Develop a master schedule and a work breakdown structure (WBS) that incorporates
every important date or milestone in the contract,
 List contract deliverables and their evaluation criteria in details, with checklist for the
team who perform the tasks,

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ECPMI ECPMMS:2019
 Set a schedule and reminders for required reports, including the format and delivery
method,
 Make it clear to all contractors and other consultants, the exact nature of the parties to the
contract roles, responsibilities and authorities;
 Ensure all communications flow from the consultant is directed through the Project
Manager to the contractor including any contract interruption, site requests or request for
changes or information. Consultants provide recommendations to the Project Manager,
so that the Project Manager can make an informed decision, however the Project Manager
remains the ultimate decision maker,
 Attend all site meetings and review minutes for accuracy. When unable to attend site
meetings, review the minutes and discuss with the consultant.
 Exercise the right to override recommendations or decisions made by consultant’s and to
accept or reject work regardless of the consultant’s recommendation.
 Deal with issues promptly (when they arise). If any issue is of a specialist/technical
nature, seek advice from third parties. If there is conflicting advice, consult with various
professional and technical expertises from the industry.
 Milestones: key dates, performance measures, deliverables;
 Administrative requirements (compliance, licenses, calibration certificats, etc)
 Communications (including regular meetings, discuss about progress, changes,
problems, performance, etc)
 Risk assessment and review
 Quality assurance
 For each party involved in the contract, document change orders and contract
modifications that require rescheduling of any deliverables.
 Ensure that expenses charged to the contract are allowable, allocable and reasonable.
 Give room for competing priorities
 Contract review (how will lesson learned be identified and communicated?)
2.6.3. Changes to quantity in definite quantity contracts [D-B-B]
 Must have provisions in the contract to manage changes in estimated quantity in the
contract,
 Check for the allowable increase in quantity in the contract (if any) or apply for change
request,
 Unit prices remain the same except as may provided in the contract to adjust rates.
2.6.4. Management of change order (variation)
A change is any situation in which work, authorized by the client, differs from the work
described in the original contract. In construction contracts these are called ‘change orders or
variation’.
Two types of changes:

ECPMI ECPMMS:2019
 Unilateral – Change Order (within the scope of contract)

 Bilateral: contract modification
They are normally associated with specific Conditions of Contract clauses in the contract and
allow the consultant or client to order additional work, make changes, etc. The fewer the number
of changes the greater the chance to manage the project cost within budget, reduce delays and
avoid claims. A continuous flow of change can:
 Disrupt the planning and scheduling of the work,

 Result in a request for extension of time,
 create administrative burden justifying, costing and negotiating changes,
 Create a need for increases in budget/funding and contract approvals, Give rise to delay
claims., etc
Changes are created by new client requirements. Poorly defined original client requirements,
miscellaneous items such as site conditions, errors in design etc. The decision to implement a
change is based on the necessity for the change, additional cost of the change in relation to the
budget, and the probable impact of the change on the job schedule.
The administrative process required for the approval and processing of change orders begins
with the identification of the need for a change, followed by the contactor’s quotation for the
change, and the review, negotiation, approval and payment of the change. A review of the
impact of a change on the project schedules must be conducted during the negotiation process
and included as part of the total cost of the change, thereby decreasing the chance of delays on
the project.
2.6.5. Payment / Invoice processing
 Establish clear roles and responsibilities of procurement, program, and finance officials
with regard to review and approval of contractor invoices and interim payment
certificates.
 Provide consistent review and approval of invoices and interim payment certificates
prior to disbursement,
 Payment schedules (how often, completion of deliverables, milestones, monthly, etc);
total contract amount, payment arrangements, who confirms invoices/ interim payment
certificates are correct, who authorizes payments;
 Prepare sufficient guidance to Owner's Technical Representatives on how to conduct
invoice/ interim payment certificates reviews
 Assess reasonableness of direct costs when approving additional costs or new rates when
required under the contracts.
 Establish sufficient policies and procedures on invoice/ interim payment certificates
submission and approval.
 Provide sufficient information on the interim payment certificates for thorough review of
claimed costs to determine if they are allowable, allocable, and reasonable.

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ECPMI ECPMMS:2019
 Avoid delays in processing vouchers.

 Establish sufficient documentation, record keeping, and tracking of invoices and
vouchers.
2.6.6. Price adjustments
 Contracts must have price adjustment provisions otherwise express mention be included
in the contract for contracts that are not subject to price adjustment,
 Contracts must be provided with base prices from accredited sources for price indices or
statistical offices. The base date must be clearly specified in the contract documents
(usually 28 days before the closing date of bids/tenders)
 Contracts must provide the mechanisms for computing of price adjustment. The
administration should strictly follow during application of price adjustments
 Contracts must provide the mechanisms to handle cases when sources cease to exist or
when contractor proposes to change the base sources of input materials or labor or
equipment.
2.6.7. Claims administration
Contested changes and potential constructive changes are those requested changes where the
buyer and seller cannot reach an agreement on compensation for the change or cannot agree that
a change has occurred. These contested changes are variously called claims, disputes, or appeals.
Claims are documented, processed, monitored, and managed throughout the contract life cycle,
usually in accordance with the terms of the contract. If the parties themselves do not resolve a
claim, it may have to be handled in accordance with alternative dispute resolution (ADR)
typically following procedures established in the contract. Settlement of all claims and disputes
through negotiation is the preferred method.
Claims management processes
i. Claim Identification
 Recognition and identification of change,
Construction claim recognition and identification involves “timely” and “accurate”
detection of a construction claim. The detection comes from performance reviews,
expenditure reviews, project meetings, site visits etc.,
 Notification of change,
Construction claim notification involves alerting the other party of a potential problem in
a manner that is non-adversarial. Time limit requirements are very crucial and critical.
An initial letter of a claim notice to the other should be concise, clear, simple, conciliatory,
and cooperative. It should indicate the problem and alert the other party of the
potential increase in time or cost. Time limit requirement are normally specified in the
contracts.
ii. Claim Quantification
 Systematic and accurate documentation of change,

ECPMI ECPMMS:2019
Records and documentation play a very important role in the settlement of contract
claims. Daily reports and records with sufficient details need to be given attention as
they are among the most important document on the projects.
 Analysis of time and cost impacts of change,
Using the different techniques available the cost and time impact of the change will be
calculated in this process (refer Construction Project Claim Management Manual)
 Pricing of change,
The purpose of this process is to give the other party in the contract a substantive
description and details of the extra costs incurred or to be incurred due to a contract
change. This detailed cost description is necessary for understanding, negotiating, and
justifying extra contract costs.
 Negotiation of claim
A structured and proper negotiation preparation includes (1) ascertaining that all
information is current and complete, (2) minimizing the scope of negotiation beforehand
so that insignificant points should not precipitate a violent argument and disrupt
progress, (3) knowing one’s weakness and trying to utilize weak points by conceding
them in return from the other party, (4) foreseeing problems, and (5) anticipating the
opposition’s next move. If an agreement cannot be reached and any party believes his
position is correct, he should propose an alternative dispute resolution method. If
this fails, the choice remaining is to implement the disputes resolution mechanism
or take the matter to court.
 Dispute resolution and settlement.
There are many options the employers and the contractors can select for settling any
dispute occurring in their project. Referring the matter to Dispute Review Expert/Board
(DRE/DRB) if such is the case in the contract is one way. If either party is dissatisfied
with the DRE/DRB decision, the case might be referred to arbitration after notice of
dissatisfaction is issued.
2.6.8. Extension of time on construction contracts
Clients usually adopt a generic quality assurance process for approval or rejection of extension of
time on construction contracts. Consultants are responsible to implement this process to ensure:
 Adherence to and consistent application if client regulations or requirements

 Safeguard the client interests
 Mitigate against risk and liability
 Application of contractual requirements
The consultant must follow the roles and responsibilities in the approval process for extension of
time on construction contracts. The request for extension of time can be made prior to, during, or
after the event has been determined that has caused delay or disruption that will prolong the
contract duration. The conditions of contract and consultant services contract must be followed
during processing of extension of time.

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ECPMI ECPMMS:2019
2.6.9. Contract closeout
 Make sure you have a procedure for closing a contract,

 Management attention to contract closeout,
 Conduct an exit interview with the contractor,
 Ensure efficient Management Information Systems to monitor the contract closeout
process,
 Ensure compliance with FPPAA Regulation provision for increase in contract price,
changes, other change Proposals submitted by contractors
 Avoiding Disputes in Contract Closeout – use “Partnering” from the start of project.
 Compile your lessons learned and best practices for the next contract
 Closeout documentation

ECPMI ECPMMS:2019
2.7. Procurement Recording and Information Management
2.7.1. Procurement recording
 A procuring entity shall keep all records of procurement for at least ten years after the
resulting contract was entered into or, if no contract resulted, after the procurement
proceedings were terminated.
 The following documents shall be treated as part of the procurement records-
a) where the procurement or the disposal requirement involves feasibility studies

and surveys directly carried out or accepted by the procuring entity in order to
prepare the tender documents, the reports and other documents resulting from
these studies and surveys;
b) All receipts for the sale of tender documents, request for clarifications and
clarifications issued by the procuring entity;
c) Records of any negotiations;
d) End of activity report as may be stipulated by the Authority.
e) The Authority may issue guidelines relating to the use, record management, filing
and storage of procurement documentation.
f) A procuring entity shall maintain an individual file for each procurement
requirement containing all information documents and communications relating
to that procurement proceeding and such file shall be marked with the relevant
procurement reference number.
2.7.2. Procedures information management
o The procurement Units of the procuring entities should have dedicated recording and
information management sections (registries) to store, retrieve and disseminate all
records and information relevant to procurements and disposals.
o The registry should be headed by Information and Documentation Officer who has
adequate education and experience on information and documentation management.
o The procurement registry should have a complete computer based database of the
name, description, date of creation, location, reference no. and other relevant details
of all the records and documentations.
o Procuring entities should implement a systematic information management system.
o The information Management System of should be supported by Information
Technology.
o The procuring entities should establish an Electronic Document Management System
(EDMS) which helps to store and retrieve all the procurement documentation.
o All the documents and correspondence including the original bids should be scanned
to the system as they come in.

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ECPMI ECPMMS:2019
The procurement unit should have a common network folder where reference materials
(including procurement laws, manuals, standard bidding documents, training materials,
reports, etc.) are shared among procurement staff.

ECPMI ECPMMS:2019
3. SECTION 3: Manual Adjustment, Amendment and Revision
3.1. Manual Adjustment
This CPPM Manual shall be adjusted to confirm to specific requirements of projects in line with
their contractual obligations
3.2. Manual Amendment
The CPPM Manual may be amended for errata and similar circumstances as and when
recognized.
The correction/improvement of this CPPM Manual shall be initiated by Manuals Preparation
and Revision Standing Committee based on the feedbacks collected during the manual's three
years operation period and decision made by the ECPMI.
3.3. Manual Revision
This CPPM Manual shall be revised every three years unless otherwise required due to special
circumstances.
The revision of this CPPM Manual shall be initiated by Manuals Preparation and Revision
Standing Committee based on the feedbacks collected during the manual's three years operation
period and decision made by the ECPMI.

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ECPMI ECPMMS:2019
Bibliography
[1.] Design – Build Institute of America (2015), choosing a project delivery method, A Design –
Build Institute of America Publication
[2.] Project Management Institute (PMI) (2016). Construction Extension to the Project
Management Body of Knowledge (PMBOK) Guide. Newtown Square, PA, USA: Project
Management Institute (PMI)
[3.] Project Management Institute (PMI) (2013). A Guide to the Project Management Body of
Knowledge (PMBOK) (5th edition). Newtown Square, PA, USA: Project Management
Institute (PMI)
[4.] International Project Management Association (2015). Individual Competence Baseline for
Project, Program, and Portfolio Management. 4th version, International Project
Management Association.
[5.] Real Property Branch, Procurement Management Manual (2011)
[6.] www.ppa.gov.et for préparations of the Project pre-qualification document or BD for the
contract.

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ECPMI ECPMMS : 2019

© 2019 All Right Reserved

ii © ECPMI 2019 – All rights reserved

Construction Project Management Manuals Preparation Working

Working Groups Chair

Working Groups Coordinator

Original Version Prepared By:

Manual Quality Assurance and Validation Working Group Members

Wubishet Jekale Steering Committee Chair

Muluken Tilahun Project Coordinator

Denamo Addissie Technical Committee

Release Version Prepared By:

© ECPMI 2019 All Right Reserved

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2.5.4. Procurement Management for Works .........................................................................................57

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ABBREVIATIONS AND ACRONYMS

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The Ministry of Urban Development and Construction as mandated acknowledges this

Eng. Aisha Mohammed

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xiv © ECPMI 2019 – All rights reserved

ETHIOPIAN CONSTRUCTION PROJECT MANAGEMENT INSTITUTE

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xvi © ECPMI 2019 – All rights reserved

A. Construction Project Management Manuals

This Construction Procurement Management (CPPM) manual is prepared as part of Ethiopian

1.2. Document information

Document name : Construction project Procurement management manual

Document number : ECPMI ECPMMS : WM - 06

Document owner : Ethiopian Construction Project Management Institute

Document sponsor : Ethiopian Construction Project Management Institute

2 © ECPMI 2019 – All rights reserved

1.3. Scope and Application

© ECPMI 2019 All Right Reserved

1.4. Normative References

Document Number Document Title

ISO 21500 Guidance on project management,

PMBOK Construction Extension to the PMBoK® Guide, 2016

FPPAA procurement Federal Public Procurement and Property Administration Agency;

PMBoK Construction Extension to the PMBoK® Guide Third edition,2017

4 © ECPMI 2019 – All rights reserved

1.5. Purpose and / or Objectives

1.6. Policies, Principles and Considerations

1.6.1. CPPMM Policies

Table 1.1: CPPMM Policy Document

© ECPMI 2019 All Right Reserved

1.6.2. CPPMM Principles

Principles: The main principles of this Manual are:

Table 1. 2: CPPMM Principles

CPPMM considers the following basic elements, namely:

a. the Project Business Case as Front - End Planning bases,

6 © ECPMI 2019 – All rights reserved