Work Preparation Guide
A Complete Instruction
For Implementing a Project
Work preparation in Saudi Arabia starts when the sewer contractor buy a tender and ends when he start the work. Usually, project preparation goes through several steps, as summarized below:
1) Buying the Tender Documents:
The work preparation starts when you buy the tender documents from the owner of the project, and probably from the (Procurement department). Besides that you must present the following official Certificates (CR, Contractor Classification, Chamber of Commerce and Tax Clearance).
To compete for a tender, you should obtain the following document:
The project value in the announced bids, determines the needed classification degree for the competing contractors. For example, in Saudi Arabia, the contractors can perform sewer projects according to their classification and the following values:
First-class: more than S.R. 420 Million ($ 112 million).
Second Class: up to S.R. 420 Million ($ 112 million).
Third-Class: up to S.R. 140 Million ($ 37 million).
Fourth Class: up to S.R. 42 Million ($ 11 million).
Fifth Class: up to S.R. 14 Million ($ 4 million).
Without a classification: up to S.R. 4.2 Million ($ 1.1 million only).
2) The Price of the Tender Documents
Tenders documents have a specific price according to the one who issued the tender (owner of the project).
3) How pricing the Tender fits with work preparation?
The estimating & Pricing department, start pricing the project until they reach to the desired profit margin. In this department, the staff must have a good experience in this field (Sewer projects pricing) and have the necessary tools and data to do the job well.
Pricing method varies depending on the nature of the project area (Rocky, Mountainous, Sandy, Muddy).
Note: Municipalities around the world differs in the way they deal with contractors. Some are flexible, and some are strict and tough.
The pricing team should price the project properly and competitively for two reasons:
First: Because if the price is higher than the sensible and logical price, then this will lead to lose the tender in front of other professional competitors in this field.
Second: Pricing the project at a lower price, will lead to make a loss that you will regret it later.
Following is an example for pricing:
Price: Higher than the logical price:
If the logical pricing for the bid is 1,000,000 dollars, and Your price was $ 3,000,000 "Thinking that you may win more," but the price of your competitors came between $ 1,000,001 and $ 2,999,999, that means you have "lost" the bid.
Price: Lower than the logical price (Underbidding)
While using the previous data, if your price was $ 750,000 "Trying to win the bid," and the price of your next competitor came $ 1,250,000, that means you lost the difference amount between $ 750,000 and $ 1,250,000, which is $ 500,000.
4) How bidding date fits with work preparation?
Bidding has a certain date and time for entering to it. So, ensure to have enough time to buy and study the tender documents to enable your estimating team to act in comfort without time being compressed, especially if there is more than one project in the pricing process.
5) How bid bond fits with work preparation?
This bond is required by the owner of the project from the bidders (Its purpose is to ensure the seriousness of all bidders, and the wining bidder will be committed to implementing the project).
The value of the Bid Bond is a percentage from the bidding value. This percentage varies from one country to another. Let's assume it was (1%) from the bidding amount, and If your bidding was for $ 4,000,000 then the value of it will be $ 40.000.
6) How bidding fits with work preparation?
At the specific date of bidding, you will prepare a letter addressed to the project owner mentioning your final price, and attaching all the pricing documents with the bid bond. After that, enclose all the documents in an envelope and seal it by red wax.
7) Opening Tenders:
Next day of the bidding date and in specific time, a committee responsible for examining the tenders will open all the bids and then announce names and prices of the competitors and declare the name of the winning bidder.
8) Notice of Award:
The owner of the project will send a "Notice of Award" to the winning contractor by the registered mail. Stating the project data and asking to sign the contract and to provide with that a final bank guarantee and the Insurance Policy.
9) How the final bank guarantee fits with work preparation?
The successful bidder must issue this guarantee from a local bank, and the value of it will be percentage of the project value. The percentage varies from one country to another. Let's assume it was (5%) from the project value. For example, if the value of the project is $ 4 million, then the value of it will be $ 200,000.
The goal from this guarantee is to ensure proper implementation of the project, which means that this guarantee will remain, in effect, until the final hand-over of the project but (including the warranty year).
10) The warranty Year:
After performing the project, the project manager will hand-over the project to the owner representative (initial hand-over). A period of time as a warranty for the performed work will be there, in case of any fault or damage happens during this period. Usually, this period will be one year. The contractor shall be responsible to reform the work without any refund. In case of refusal, the owner has the right to instruct the issuing bank to cash the performance bond, and to fix these faults on behalf of the contractor.
11) How the insurance policy fits with work preparation?
The regulations usually requests the contractor to secure the project against various risks like fire, explosions, landslides, storms and cyclone. The contractor duty is to secure his property through this policy such as site offices, materials, equipment and machinery.
The process begins by sending an application the insurer after attaching with it the following documents: Layout plan showing the elevations and distance to surrounding properties, scope of work, time schedules and a breakdown for the contract value.
The insurer takes your application and issues the policy after 2 or 3 days, the policy will state your company data, project information, nature of the work and risks being covered.
12) How issuing the advance payment fits with project preparation?
The project owner sometimes grants the contractor a portion of the project value as an advance payment. The amount will be deducted proportionally later as a percentage from the monthly bills.
Its role is to speed up the contractor work and help him to mobilize his tools and properties such as site offices, equipments and material.
If we assume that the project value is $ 4,000,000, and the percentage of it is (10%).then the advance payment amount is equal to (400,000 dollars).
13) Advance Payment Guarantee:
To receive the advance payment amount, you must provide a bank guarantee to the owner of the project covering the collected amount and valid throughout the project period.
14) Printing Letterhead Papers:
The owner of the project requests you to use special papers in any future correspondence for the project carrying your company logo, project name and number, CR number, telephone and fax number, address and capital.
15) Project Stamp:
You should prepare a special stamp carrying your company name and logo, project name and CR number to stamp any correspondence concerning the project.
16) Signing the Contract:
A date is set to sign the contract, in this date the owner of your company or any authorized staff can sign the contract. With that, you must provide the performance bond and the project insurance policy.
17) Receiving the Project Area:
Congratulation, now you are ready to receive the "project site" and start the work. A letter for that purpose is prepared by the owner of the project and signed later by the concerned parties.
18) Receiving the "Site office" area:
Usually, the owner of the project grants you a piece of land near the project area to install your site offices and mobilize your material and equipment.
19) Installing the Portables:
Now you have received the "site office" area. Go and buy the prefabricated offices which you will be using for the project staff (the project manager, site engineers). You need at least five furnished offices for the project manager, consultant, site engineers, secretary and a meeting room plus toilets and washrooms.
20) Water & Electricity Line Extension:
The project manager will send a request for the concerned authorities asking for a temporary water and electricity line extension for the use of site offices.
21) How "Time Schedules" fits with work preparation?
The approval of the schedule by the consultant is important matter, because it gives you a clear view about how to perform the project within the specified duration.
22) How the material approval fits with work preparation?
The project manager immediately seeks to get approval's letters from the consultant for the material he wants to use in the project. The supplier in return provides him with the necessary catalogs and specifications to enclose it with the request letter.
Note: Usually, the project owner gives out a list for the materials accepted by him for the use in his project mentioning in that suppliers name.
23) Storing the Material at the Job Site:
I assume that you are ready now to buy the material and store it at the job site to start the work. So often you will keep the heavy pipes directly to the job site and provide it on the lines which are prepared to be excavated to save the cost of transport, loading and unloading.
24) How the surveying work fits with work preparation?
This work lies on the shoulder of the surveyor to identify exact places of all scope of work, like the gravity network, lifting station, main force pipeline and purification station. Also, he defines main and substreets, bridges, railways and general services such as (Telephone lines, mobile lines, water, electricity and roads).
25) AutoCAD Draftsman:
After completing the surveying work, the surveyor passes the collected data to the AutoCAD draftsman, who draws the blueprints for the entire project.
26) How the blueprints approval fits with work preparation?
After preparing the blueprints, the draftsman prints it on A1 papers and gets it singed and stamped by the authorized person, afterwards it will be presented to the supervising authority to get it approved.
27) How issuing of work permits fits with work preparation?
The project manager role here, is to fill out a request for each party to get the necessary permissions to start the work. He will send these requests to the concerned parties such as (Tel. Companies, Cellular Phone Companies, Water Authority, Electricity Authority and Roads Authority) to get the necessary permits.
Note: These permits usually have a limited time. Therefore, you have to fill an application (Request for Permit) periodically and whenever there is a need for that.
28) Starting the Excavation Work:
After the contractor reviews the nature of the project. The supervising authority with the contractor representative decides where to start the excavating work at first.
Note: Some steps are done in parallel with other steps.
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