"Standard Bidding Documents and General Conditions of Contract" PPA

አውስኮድ AWWCE
Training On
“Standard Bidding Documents and General

Conditions of Contract” PPA
for
Amhara Water Works Construction

Enterprise Engineers & Managers
9/7/2023 Ephrem Mesele (Chief Engineer) 1
Proclamation No. 430/2005
Determining procedures of public procurement and
establishing its supervisory agency; proclamation of the
FDRE
Objectives:
1. Economic & efficient use of public funds
2. Procurement of goods, works & services constitute a major
share of public expenditures
3. Public procurement must be carried out in a manner which
is not only economic and efficient but also fair, transparent
and non-discriminatory;
4. public procurement may also be instrumental to economic
development at regional and national levels in Ethiopia

Proclamation No. 430/2005 contd.
 Proclamation - applicable to all federal public
procurement
 PEs are responsible for the overall procurement process
and particularly for contract implementation
i.e. starting from procurement  signing of contracts 
ensuring the implementation of the awarded contract
in accordance with the terms & conditions of the
award
 PPA (under MoFED) – with powers and duties – such as
performance audits after the completion of the contracts;
administer & enforce compliance with all provisions of
the proclamation, regulations, and directives

Federal, Public Procurement Directive (MoFED) 2005
 When using open bidding, PEs shall use the standard
bidding documents (SBD) prepared by PPA [article 11]
 PEs shall include in the bid documents the general and
special conditions of contract which are an integral part of
the SBDs & issue the same to all bidders [art 11.7(1)]
 No modifications shall be made to general conditions of
contract, which is part of the SBD. However, modifications
can be made to the draft contract which embodies special
conditions [art 11.7(2)]
 Unless a contract has been signed b/n the PEs and the
supplier (contractor), a mere issuance of letter of award
(acceptance) doesn’t constitute a contract [art 11.7(3)]

Federal, Public Procurement Directive contd
Liquidated damages [art 11.7(5)]
The contract to contain provisions stipulating the following
1. contractor to pay 0.1% (1/1000) of the value of the
undelivered item for each day of delay – failing to
complete the works on the date specified in the contract
2. PEs have the right to terminate the contract if the penalty
exceeds 10% of the CP
3. if the delay in performing the contract affects its
activities, PEs may terminate the contract giving advance
notice without waiting the 10% limit
To be seen with the SBD, GCC and SCC

Performance security or bond [art 11.14 (2) & (5)]
 For every contract, PEs shall receive performance
security within 15 days & in an amount equal to 10% of CP
 It will be used to compensate damages suffered by PEs
due to failure by contractors to perform the contract
 If the damages exceed the amount of the performance
security  PEs shall have the right to claim the difference
from the supplier and vice versa
 For construction works, a conditional performance
security issued by a recognized insurance company is
acceptable

Payment Certificate for works [art 26]
1. 5% of the certificate amount shall be retained form
payment indicated in each payment certificate (PC)
2. half of the total retained to be released upon completion
of works & issuance of provisional acceptance certificate –
the other to be retained for one-year period of warrantee
(released upon submittal of unconditional guarantee)
3. Engineer to verify the PC prepared & submitted by the
contractor within 7 days of its receipt
4. PEs to effect the payment within 14 days of receipt of
the PC verified by the engineer

5. Engineer responsible for any additional payment requested
by the contractor due to failure to verify PCs – but liability up
to the service fee payable for the service
6. PEs responsible for any additional payment claimed by the
contractor in accordance with the contract due to failure to
effect payment 14 days without any good reason  see GCC
Conditions for use of direct procurement i.e. variations or
supplementary agreements [art 9.2(a)]
 when the contract price of the additional work doesn’t
exceed 25% of the value of the contract price &
 when the additional order is made within the validity
period of the original contract or within 6 months from the
date such contract has terminated
Technical Support for procurement of works [art 27]
 MoWUD is delegated to supervise and inspect
the execution of construction works
to ensure their conformity with the quality
standards, time limits and cost as provided in the
contract
 MoWUD to render technical support for
procurement of works upon request by PEs
 PEs may request MoWUD for the above

Advance Payment [art 28]
 Advance payment shall not exceed 30% of the
contract price; to be stated in the contract price
 Advance payment security to be submitted: certified
cheque/unconditional bank guarantee from a reputed
bank
but domestic contractors may submit unconditional,
irrevocable and payable on demand advance payment
security – conditional advance payment security issued
by a reputable bank  PE and contractor to conclude an
agreement on the use of the advance payment

Requirements of such agreement include the following:
1. It shall be deposited in a special bank account to be
opened for this purpose in the name of the contractor
2. It may only be drawn by signatures of the representative
of the PE and the contractor
3. Payment deposited in the bank account may only be
made upon the contractor submitting evidences showing
that the payment previously made is used for the
designated purpose
4. Advance payment shall not be used for the purchase of
machineries (i.e. only for mobilization)

Standard Bidding Document/SBD - PPA
 Following the above proclamation and directive, standard bidding
documents (SBD) has been issued the established supervisory agency,
public procurement agency (PPA)
 The Proclamation and Directives detail the rules and procedure and they
must be complied with at all times
Purpose of SBD –
to provide PEs with one standard draft containing basic contractual
provisions and safeguards which are required by the Government of the
FDRE in the execution of public procurement and the use of public funds

Standard Bidding Document/SBD - PPA
 PEs are responsible for the preparation and issue of the Bidding
Document and must use the appropriate SBD, as it is a mandatory
requirement for contracts to be funded by the Government of the FDRE
Scope and Value of Contract
SBD issued by PPA is suitable for a standard contract, where the works have
been fully designed by or for the PE (Employer), prior to bidding, and the
contractor will be responsible for construction only.

SBD/PPA scope contd.
 and it is suitable for works valued at up to US$10 million
 and it is not suitable for the following situations:
 complex works under US$10 million, such as large water treatment
plants;
 works over US$10 million;
 works designed by the contractor, including turnkey contracts
For any of these requirements, the PE should find an alternative, more
appropriate document, such as an appropriate FIDIC standard form of
contract

Structure of SBD/PPA
 The SBD divided into nine separate sections and a preface.
PEs are required to use all sections to produce an individual bidding
document for issue to bidders
 The Standard Bidding Document (SBD) comprises:
Preface
Part 1 Bidding Procedures
Section 1. Instructions to Bidders (ITB)
Section 2. Bid Data Sheet (BDS)
Section 3. Evaluation and Qualification Criteria (EQC)
Section 4. Bidding Forms
Section 5. Eligible Countries
Part 2 Schedule of Requirements
Section 6. Schedule of Requirements
Part 3 Contract
Section 7. General Conditions of Contract (GCC)
Section 8. Special Conditions of Contract (SCC)
Section 9. Contract Forms

General Conditions of contract – PPA 2006
Presented in five sections
A. General (clauses 1-26)
B. Time control (clauses 27-32)
C. Quality control (clauses 33-36)
D. Cost control (clauses 37-54)
E. Finishing of contract (clauses 55-62)

GCC – PPA 2006 A. General /sub clause 2.3 order of priority of contract documents
The documents forming the Contract shall be interpreted in the

following order of priority:
(1) Agreement,
(2) Letter of Acceptance,
(3) Contractor’s Bid,
(4) Special Conditions of Contract,
(5) General Conditions of Contract,
(6) Specifications,
(7) Drawings,
(8) Bill of Quantities or Activity Schedule, and
(9) Any other document listed in the Special Conditions of
Contract as forming part of the Contract.

GCC – PPA 2006 A. General /clause 10 – employer’s and contractor’s risks / sub-clause 12.1 –
contractors risks
o The Employer carries the risks which the

Contract states as Employer’s risks, and
o The Contractor carries the risks which the
Contract states as Contractor’s risks.
o Contractors risks are those risks which are not
employer’s risks
i.e. the risks of personal injury, death, and loss of
or damage to property (including, without
limitation, the Works, Plant, Materials, and
Equipment) are contractor’s risks (From the Starting
Date until the Defects Correction Certificate has been issued)

GCC – PPA 2006 A. General /clause 11 Employer’s risks
Unless otherwise specified in the SCC (from the Start Date until the Defects
Correction Certificate has been issued) the following are Employer’s risks:
• The risk of personal injury, death, or loss of or damage to
property, which are due to:
1. Use or occupation of the Site by the Works or for the
purpose of the Works, which is the unavoidable result of
the Works, or
2. Negligence, breach of statutory duty, or interference with
any legal right by the Employer or by any person
employed by or contracted to him except the Contractor.
• The risk of damage to the Works, Plant, Materials, and

Equipment to the extent that it is due to a fault of the
Employer or in the Employer’s design, or due to war or
radioactive contamination directly affecting the country
where the Works are to be executed.

GCC – PPA 2006 A. General / clause 11 Employer’s risks cont’d
 However (from the Completion Date until the Defects Correction Certificate has been
issued) the risk of loss of or damage to the Works,
Plant, and Materials is an Employer’s risk

except for losses or damages due to:
1. A Defect which existed on the Completion
Date,
2. An event occurring before the Completion
Date, which was not an Employer’s risk,
3. The activities of the Contractor on the Site
after the Completion Date

GCC – PPA 2006 A. General /clause 13 – Insurance
• The contractor shall provide (in joint names of the

employer and the contractor) insurance cover from
the Start Date to the end of the Defects Liability
Period, in the amounts and deductibles stated in the
SCC for the following events (which are due to the
contractor’s risks):
• Loss of or damage to the Works, Plant, and
Materials;
• Loss of or damage to Equipment;
• Loss of or damage to property (except the
Works, Plant, Materials, and Equipment) in
connection with the Contract; and
• Personal injury or death.
What about for the employer's risks??? Who insures for such???

GCC – PPA 2006 A. General /clause 13 – Insurance cont’d
Contractor fails to provide Employer may effect the

any of the policies and insurance which the
certificates required contractor should have
provided
the payment of the

premiums shall be a Employer then recovers the
debt due. premiums he has paid from
payments,
And if no payment is to be
made

GCC – PPA 2006 A. General /clause 14 – site investigation reports & clause 20 -
discoveries
.
Clause 14 – In preparing the Bid, the contractor shall rely
site
investigation
on any Site Investigation Reports referred to
reports in the Special Conditions of Contract,
supplemented by any information available
to the Bidder
Clause 20 - Anything of historical, other interest, of
discoveries
significant value unexpectedly discovered on the
Site shall be the property of the Employer.
The Contractor shall notify the Engineer of such
discoveries and carry out the Engineer’s
instructions for dealing with them.

GCC – PPA 2006 A. General /clause 21 – possession of site
Employer to give If possession of part of the

possession of site as site is not given by the
per the approved date in the approved
program program
Cost + time
(eng. to determine by
how much to increase
the contract price and by Compensation event!!!
how much the intended
completion date has to
be extended)

GCC – PPA 2006 A. General /clause 26 – Disputes
When either of a party

believes that decision given by the engineer is:
Disputes exists ……
1. Outside the authority given by the contract
2. Was wrongly taken
……how to be resolved????
Dispute should be referred

to the adjudicator within 14
Adjudicator should give
days of the notification of
decision within 28 days
the engineer’s decision
of receipt of a dispute
1. Either party may refer the decision of the adjudicator to arbitrator within 28 days
2. otherwise adjudicator decision will be binding
3. Then arbitration should be conducted in accordance with any published arbitration
procedure

GCC – PPA 2006 A. General /clause 27 – Replacement of adjudicator
1. Adjudicator resigns or dies

2. Both parties agree that the adjudicator is not A new adjudicator to be jointly
acting in accordance with the contract provisions appointed by both parties
A new adjudicator to be
If no agreement is reached b/n
designated by the appointing
Them within 30 days
authority at the request of
either party within 14 days
NB: Cost of adjudicator will be shared equally by the employer and contractor.
The appointed adjudicator shall be known and agreed upon prior to signing of the
contract.

GCC – PPA 2006 B. Time Control /clause 27 – Program
It should be updated showing the

actual progress achieved, the effect
Within time stated in SCC,
of the achieved progress on the
Contractor to submit a
remaining works, and including
Program showing the for approval
variations and compensation events
general methods, arrangements,
at intervals no longer that specified
Order & timing of works
in the SCC or at any time the cont.
considers necessary
Cont. does not submit the updated The eng may withhold an amount sated in the
program within this period SCC from next payment, and continues to
withhold until it is submitted
NB:
• The engineers approval of the program does not alter the obligations of the contractor.
• Submission and approval of the program will assist the extension of intended completion
period.

GCC – PPA 2006 B. Time Control /clause 28 – Extension of the intended completion
period
Compensation event occurs or

Variation is issued Contractor to ask the eng for a decision upon
the effect of the compensation event/variation
+ submitting full supporting information
That makes impossible for completion

to be achieved by the intended
completion date with out taking steps Eng to decide within 21 days:
to accelerate the remaining works --- 1. Whether to extend the intended completion
causes the contractor to incur additional date
cost ------ acceleration 1. By how much to extend the “ “
NB: if contractor failed to give early warning of a delay or failed to cooperate in dealing with a
delay, the delay by this failure shall not be considered in assessing the new intended completion
date

GCC – PPA 2006 B. Time Control /clause 29 – Acceleration
Employer requires the contractor

to finish the works before the Priced proposals for achieving the necessary
intended completion date acceleration ---- submitted by the contractor
If employer accepts the proposal
New intended completion date will be adjusted --- confirmed by

both parties
& the new proposal will be treated as variation

GCC – PPA 2006 B. Time Control /clause 32 – early warning or notification
Contractor to warn the eng

1. Adversely affect the quality of works
at the earliest opportunity that may
2. Increase the contract price
of specific likely events or
3. Delay the execution of the works
circumstances
• making and considering proposals for how

Contractor to cooperate in the effect of such an event can be avoided
with the engineer •Carrying out of any resulting instruction by
the engineer

GCC – PPA 2006 C. Quality Control /clause 33 – 36
1. The engineer shall check the contractor’s work and notify the contractor of any
defects that are found.
2. The engineer may instruct the contractor to search for a defect and to uncover
and test any work that the engineer considers may have a eefect.
If the test is not specifies in the

contract, and if the test shows Compensation event
that it doesn’t have any defect
If the contractor has not corrected 1. Engineer will assess the cost of having
Any defect within the time specified the defects corrected
By the engineer’s notice 1. The contractor will pay this amount

GCC – PPA 2006 D. Cost Control /clause 38 – Change in the BoQ
If the final quantity of work done differs from

the quantity in the BoQ for a particular item by
more than 25% & Engineer shall adjust the rate
If the change exceeds 5% of the initial contract to allow for the change
price
If the initial contract price is exceeded

By more that 15%

GCC – PPA 2006 D. Cost Control /clause 40 – Payment for variation
A “Variation” is an instruction given by the Engineer, which varies the Works.
If the work in the variation corresponds to an item in the The rate in the BoQ shall be used
BoQ, and if the qty does not exceed the above limit to calculate the value of the
Or variation --- additional work
If the timing of its execution does not cause cost/unit qty
to change
1. If the unit qty changes The quotation of the contractor shall be in the
2. If the nature or timing of the works form of NEW RATES for the relevant items of
in the variation does not correspond work
with an item in the BoQ
Engineer may order the variation and make necessary changes to the contract price
BASED ON THE WNGINEERS OWN FORECAST OF THE EFFECTS OF THE VARIATION
ON THE CONTRACTORS COST,
for time – it is already a compensation event

GCC – PPA 2006 D. Cost Control /clause 42, 43 – Payment certificates & payments
Engineer to check the contractor’s monthly

Contractor to submit monthly statements and :
statements of the estimated value 1. To certify the amount to be paid, OR
of the works executed 2. To postpone the payment certification
till the requirement for the minimum
amount of interim payment is attained
1. Payments shall be adjusted for deductions of advance payments and retention

2. The employer shall pay the contractor the amount certified by the eng within 30 days of the date
each certificate.
But according to Federal, procurement directive; payment has to be certified by the eng within
seven days of receipt and is accountable for any claims concerning payment delays. The employer
shall then effect the payment within fourteen days.
If payment is delayed:
1. For less than 90 days, contractor shall be paid interest on late payments (at the prevailing
rate of interest for commercial borrowing)
2. For more than 90 days, contractor may terminate the contract at the default of the employer
(all losses and damages including profit loss will be compensated ?????)

FIDIC 1999 – Payment Procedure
Presented for comparison
Contractor submits Engineer issues Employer makes For each of

payment statement interim payment payment to the monthly
to the engineer certificate the contractor interim payments
<56 days For

final
payments
<28 days
<28 days <56 days
Contractor submits Employer issues

Contractor submits Employer makes
draft final statement final payment
final statement payment
to the engineer certificate

GCC – PPA 2006 D. Cost Control /clause 44 – Compensation events cont’d
The following are compensation events:

1. The employer does not give access to a part of the
site by the site possession date stated in the contractor’s
approved work program.
2. The employer modifies the schedule of other
contractors in a way that affects the work of the
contractor under the contract.
3. The engineer orders a delay or does not issue
drawings, specifications, or instructions required
for execution of the works on time.
4. The engineer instructs the contractor to uncover
or to carry out additional tests upon work which is
found to have no effects
9/7/2023 36
Ephrem Mesele (Cheif Enginner)
5. The engineer unreasonably does not approve a

subcontract to be let.
6. Ground conditions are substantially more adverse than
could reasonably have been assumed before issuance of
the Letter of Acceptance: from the information issued
to bidders (including the site investigation reports),
from information available publicly, and from a visual
inspection of the site.
7. The engineer gives an instruction for dealing with an
unforeseen condition, caused by the employer, or
additional work required for safety or other reasons.
9/7/2023 Ephrem Mesele (Cheif Enginner) 37

GCC – PPA 2006 D. Cost Control /clause 44 – Compensation events
8. Other contractors, public authorities, utilities, or

the employer do not work within the dates and
other constraints stated in the contract, and they
cause delay or extra cost to the contractor.
9. The advance payment is delayed.
10. The effects on the contractor of any of the
employer’s risks.
11. The engineer unreasonably delays issuing a
certificate of completion.
12. other compensation events described in the SCC
or determined by the engineer

If a compensation event:
1. Would cause additional cost Contract price shall be adjusted
2. Would prevent the work being AND/OR
completed before the intended Intended completion period shall be extended
completion date
Contractor to provide Engineer to adjust based on his

information demonstrating No agreement
forecast
the effects of the events
Engineer to assess &

adjust the contract price
For the above provision, the eng has determines or decides:

1. Whether and by how much the contract price shall be adjusted,
2. “ “ the intended completion date shall be extended
NB: contractor not entitled to compensation if the employer's interest is adversely affected by the
Contractor not having given early warnings, not cooperated with the engineer

GCC – PPA 2006 D. Cost Control /clause 47 – Price adjustment (fluctuation)
• If only provided in the SCC, prices can be adjusted for

fluctuations in the cost of inputs by the following formula:
Pn = a + b Ln + c En + d Mn + … (a+b+c+d+… = 1.00)
Lo Eo Mo
This formula applies both to the rise and fall of prices.
• Pn is adjustment multiplier;
• "a" is a fixed coefficient; - non-adjustable portion of
contractual payment
• "b”, "c", "d"... coefficients representing the estimated
proportion of each cost element;
• "Ln", "En" and "Mn"... current cost indices or reference prices
for period "n" – 28 days before PCn is submitted
• "Lo", "Eo" and "Mo"... base cost indices on the base date.
Amount to be added or deducted  (Pn+-1)*PCn

GCC – PPA 2006 D. Cost Control /clause 47 – Price adjustment cont’d
Base date – 28 days prior to the deadline of bid submission

Source of indices – submitted tabulation of weightings by the
contractor and approved by the engineer:
– should be appropriate for the purpose of the
work;
– should be related to the contractor’s proposed
source of supply or inputs
NB: price adjustment is recommended for contracts which provide

for time of completion exceeding 18 months.
Bidders are required to propose the weightings for each cost element
(labour, materials, equipments, etc)

GCC – PPA 2006 D. Cost Control /clause 48, 49 – Retention money, liquidated damages
.
Clause 48 – 1. Employer to retain from each payment due to
Retention the contractor, until the completion of the whole
money of the works --- the reduced by half
2. Normally 5% is to be stated in the SCC
3. The final half may be substituted with an “on
demand guarantee”
Clause 49- 1. Contractor to pay liquidated damages or
Liquidated employer to deduct
damages
2. The daily liquidated damages amount can be
0.05% to 1% of CP
3. The max limit can be 5% to 10% of CP ---- after
which the contract might be terminated

GCC – PPA 2006 F. Finishing of the Contract /clause 5-58 – by performance
Work completed
Eng to issue certificate of Takeover of the site
contract accomplished <7 days
completion by the employer
by both parries
Contractor to submit a Eng to certify final payment

detailed account of the total
amount before the end of
DLP
Eng to issue a schedule for
corrections and additions
<60days
Eng to decide the amount

payable and issues payment If unsatisfactory!!!!!
certificate

GCC – PPA 2006 F. Finishing of the Contract /clause 59 – breach by a party
The employer or the contractor may terminate the contract if the other party causes
fundamental breach of contracts stated below (but not limited to)
1. The contractor stops work for 28 days when no stoppage of work is
shown on the current program and the stoppage has not been
authorized by the Engineer;
2. The Engineer instructs the contractor to delay the progress of the
Works, and the instruction is not withdrawn within 28 days;
3. The employer or the contractor is made bankrupt or goes into
liquidation other than for a reconstruction or amalgamation;
4. A payment certified by the engineer is not paid by the employer to
the contractor within 90 days of the date of the engineer’s
certificate;

GCC – PPA 2006 F. Finishing of the Contract /clause 59 – breach cont’d
5. The engineer gives notice that failure to correct a particular defect
is a fundamental breach of contract and the contractor fails to
correct it within a reasonable period of time determined by the
engineer;
6. The contractor does not maintain a performance security,
7. The contractor has delayed the completion of the works by the
number of days for which the maximum amount of liquidated
damages can be paid, as defined in the SCC; and
8. If the contractor, in the judgment of the employer has engaged in
corrupt, fraudulent, collusive or coercive practices in competing
for or in executing the contract.
Notwithstanding the above provisions,
Employer may terminate the contract for convenience!!!!

GCC – PPA 2006 F. Finishing of the Contract /clause 60 – payment upon
termination
Eng to issue a certificate of the value of the work done &

materials ordered less advance payments
Fundamental breach of If the total amount due to the employer exceeds any
contract by the contractor payment due to the contractor ------- the difference shall be
dept payable by the contractor
If not the balance shall be paid to the contractor
Fundamental breach of contract Eng to issue a certificate for the value of work done,
by the employer OR materials ordered, and reasonable
Termination for convenience • Cost of removal of equipment
• Cost of return of persons
• Cost of protecting and securing the work
less advance payment

GCC – PPA 2006 F. Finishing of the Contract /clause 62 – release from
performance, force majeure
If a contract is frustrated by the

outbreak of war, or by any other Eng shall certify that “the contract has been
event outside the control of that frustrated “
party
Contractor receiving this CERTIFICATE

1. to be paid for all work carried out before
receiving the certificate
2. to be paid for any work carried out
afterwards to which a commitment was made

E-Mail: ephrem_mesele@yahoo.com

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አውስኮድ AWWCE

“Standard Bidding Documents and General

Amhara Water Works Construction

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The documents forming the Contract shall be interpreted in the

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o The Employer carries the risks which the

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• The risk of damage to the Works, Plant, Materials, and

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Plant, and Materials is an Employer’s risk

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• The contractor shall provide (in joint names of the

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Contractor fails to provide Employer may effect the

the payment of the

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Employer to give If possession of part of the

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When either of a party

Dispute should be referred

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1. Adjudicator resigns or dies

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It should be updated showing the

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Compensation event occurs or

That makes impossible for completion

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Employer requires the contractor

If employer accepts the proposal

New intended completion date will be adjusted --- confirmed by

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Contractor to warn the eng

• making and considering proposals for how

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If the test is not specifies in the

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If the final quantity of work done differs from

If the initial contract price is exceeded

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A “Variation” is an instruction given by the Engineer, which varies the Works.

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Engineer to check the contractor’s monthly

1. Payments shall be adjusted for deductions of advance payments and retention

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Contractor submits Engineer issues Employer makes For each of

<56 days For