Training Module On Project Management

Module 2.
4: Project Management
Contents
1.0 Introduction ......................................................................................1
1.1 Project Life Cycle...............................................................................1
1.1.1 The Project Initiation Phase ..........................................................1
1.1.2 The Project Planning Phase ...........................................................2
1.1.3 Execution and Controlling .............................................................3
1.1.4 Closure ......................................................................................3
1.2 Project Planning and Scheduling ..........................................................4
1.3 Bar Chart Gantt Schedule .................................................................5
1.4 Work Breakdown Structure .................................................................7
2.0 Network Analysis ............................................................................. 10

2.1 Network Techniques ........................................................................ 10
2.2 Evolution of Network Techniques ....................................................... 10
2.3 Types of Network ............................................................................ 10
2.3.1 AOA Network ............................................................................ 11
2.3.2 Rules for AOA Network ............................................................... 11
2.3.3 Calculating project time from AOA Network ................................... 12
2.3.4 Calculating Floats in AOA Network ............................................... 12
2.4 Network Analysis............................................................................. 14
3.0 PDM Network ................................................................................... 19

3.1 Type of Dependancies ...................................................................... 19
3.2 Precedence Network Calculations ....................................................... 20
3.3 PDM Example ................................................................................. 21
4.0 Resource Management ..................................................................... 22

4.1 Resource Loading ............................................................................ 22
4.2 Resource Levelling........................................................................... 22
4.3 Resource Leveling Example............................................................... 23
5.0 Project Time Management................................................................ 26

5.1 Reducing Project Duration ................................................................ 26
5.1.1 Adding resources....................................................................... 27
5.1.2 Outsourcing project Work ........................................................... 27
5.2 Scheduling overtime ........................................................................ 27
5.3 Crashing Project.............................................................................. 28
6.0 Earned Values .................................................................................. 31

6.1 Earned Value reporting .................................................................... 31
6.2 Earned Value Analysis ...................................................................... 31
6.3 Earned Value Example ..................................................................... 32
i
6.4 Practice Examples ........................................................................... 32
7.0 Project Scheduling through Software ............................................... 34

7.1 Live Example of Scheduling of Project Activities ................................... 45
8.0 Bid Process Management ................................................................. 51

8.1 Objectives of Bid process Management ............................................... 51
8.2 Invitation of Bids............................................................................. 51
8.3 Type of Bidding Process.................................................................... 52
8.3.1 Two-Stage Bidding process ......................................................... 52
8.4 Procurement Criteria of International ................................................. 53
8.4.1 Technical proposal Evaluation Sample .......................................... 54
8.4.2 Financial .................................................................................. 54
8.4.3 Final Ranking............................................................................ 55
8.4.4 Time Line for Bid Process Management ......................................... 55
8.5 Swiss Challenge System in Bidding Process ......................................... 56
8.5.1 Approach ................................................................................. 56
8.5.2 Indian Experience in Bidding process............................................ 56
8.6 Bid Structure and Evaluation............................................................. 57
8.7 Bid Design...................................................................................... 57
8.8 Prequalification and Short listing-Introduction ..................................... 57
8.9 Choosing the method of Award.......................................................... 58
8.10 Competitive Bidding ....................................................................... 58
8.11 Competitive Negotiations ................................................................ 59
8.11.1 Advantages of Competitive Bidding ............................................ 60
8.11.2 Limitations of Competitive Bidding ............................................. 60
8.12 Contracts won by Negotiation .......................................................... 61
8.13 Direct Negotiations and Unsolicited Proposals .................................... 61
List of Annexures
Annexure I: Sample Format for MOU

Annexure II: Selection of Consultants
ii
1.0 Introduction
Project management is an activity to ensure smooth implementation of any as per
its specification. The following sections detail out the key concept project
management.
1.1 Project Life Cycle

The Project Life Cycle refers to a logical sequence of activities to accomplish the
projects goals or objectives. Regardless of scope or complexity, any project goes
through a series of stages during its life. There is first an Initiation or Birth phase,
in which the outputs and critical success factors are defined, followed by a
Planning phase, characterized by breaking down the project into smaller
parts/tasks, an Execution phase, in which the project plan is executed, and lastly
a Closure or Exit phase, that marks the completion of the project.
Project activities must be grouped into phases because by doing so, the project
manager and the core team can efficiently plan and organize resources for each
activity, and also objectively measure achievement of goals and justify their
decisions to move ahead, correct, or terminate. It is of great importance to
organize project phases into industry-specific project cycles. Why? Not only
because each industry sector involves specific requirements, tasks, and
procedures when it comes to projects, but also because different have industry
sectors had different needs for life cycle management methodology. And paying
close attention to such details is the difference between doing things well and
excelling as project managers.
Diverse project management tools and methodologies prevail in the different

project cycle phases. Lets take a closer look at whats important in each one of
these stages:
1.1.1 The Project Initiation Phase

The project imitation phase is the first Project Phase and is usually represented
by the conceptualization of the project. The purpose of this phase is to specify
what the project should accomplish.
The basic processes of the Project Initiation Phase are: Creation of a Product
/Project Description Document. This is an informal, high-level statement
describing the characteristics of the product / project / process to be created.
1
Module 2.4: Project Management
A Project Feasibility Document
This identifies project constraints, alternatives and related assumptions applied to

the end product to be developed. Project feasibility is characterized by four basic
components:
Business Problem Description.

Approach Overview to be used to develop.
Potential Solutions of the problem.
Preliminary Recommendations.
B Development of Project Concept Document

It determines what is to be done? How will it be done? & why is it to be done?
Thus determining the business value achieved after project completion.
C Creation of Project Charter

Project Charter formally communicates the initiation of the project. It consists of
Project Scope, Project Authority and Critical Success Factors.
1.1.2 The Project Planning Phase

The Project Planning Phase follows the Project Initiation Phase and is the most
important phase in project management. The effort spent in planning can save
countless hours of confusion and rework in the subsequent phases.
A purpose of the Project Planning Phase

Establish Business Requirements.
Establish Cost, Schedule, List of Deliverables and Delivery Dates.
Establish Resource Plan.
Get Management Approval and proceed to next phases.
B The basic processes of the Project Planning Phase are:
Scope Planning: This specifies the in-scope requirements for the project.
Preparing the Work Breakdown Structure: This specifies the breakdown of
the project into tasks and sub-tasks.
Organizational Breakdown Structure: This specifies who all in the
organization need to be involved and referred for Project Completion.
Resource Planning: This specifies who will do what work at which time of the
project.
Project Schedule Development: This specifies the entire schedule of the
activities detailing their sequence of execution.
Budget Planning: This specifies the budgeted cost to be incurred in the
completion of the Project.
CEPT, Ahmedabad 2 JnNURM - Rapid Training Programme

Preparation of DPRs
Project Initiation Phase defines a few facilitating processes as well that are
required for successful Project Completion. These can be:
Procurement Planning: Planning for procurement of all resources (staff
and non-staff).
Communication Planning: Planning on the communication strategy with
all project stakeholders.
Quality Planning: Planning for Quality Assurance to be applied to the
Project.
Risk Management Planning: Charting the risks, contingency plan and
mitigation strategies.
Configuration Management Planning: Defines how the various project
artifacts will get stored.
Both the basic processes and facilitating processes produces a Project Plan.
1.1.3 Execution and Controlling

The most important issue in this phase is to ensure project activities are properly
executed and controlled. During the execution phase, the planned solution is
implemented to solve the problem specified in the project's requirements. In
product and system development, a design resulting in a specific set of product
requirements is created. This convergence is measured by prototypes, testing,
and reviews. As the execution phase progresses, groups across the organization
become more deeply involved in planning for the final testing, production, and
support. The most common tools or methodologies used in the execution phase
are an update of Risk Analysis and Score Cards, in addition to Business Plan and
Milestones Reviews.
1.1.4 Closure
In this last stage, the project manager must ensure that the project is brought to
its proper completion. The closure phase is characterized by a written formal
project review report containing the following components: a formal acceptance
of the final product by the client, Weighted Critical Measurements (matching the
initial requirements specified by the client with the final delivered product),
rewarding the team, a list of lessons learned, releasing project resources, and a
formal project closure notification to higher management. No special tool or
methodology is needed during the closure phase.

Preparation of DPRs
1.2 Project Planning and Scheduling

Scheduling is a process which tries to organize activities in logical sequence.
While it is not possible to know with certainty how long a project will take, there
are techniques that can increase your likelihood of being close. If you are close in
your planning and estimating, you can manage the project to achieve the
schedule by accelerating some efforts or modifying approaches to meet required
deadlines.
One key ingredient in the scheduling process is experience in the project area;
another is experience with scheduling in general. In every government
organization area there will be a body of knowledge that associates the
accomplishment of known work efforts with time duration. In some industries,
there are books recording industry standards for use by cost and schedule
estimators. Interviewing those who have had experience with similar projects is
the best way to determine how long things will really take.
When preparing a schedule estimate, consider that transition between activities

often takes time. Organizations or resources outside your direct control may not
share your sense of schedule urgency, and their work may take longer to
complete. Beware of all external dependency relationships. Uncertain resources of
talent, equipment, or data will likely result in extending the project schedule.
Following activities shows the lifecycle of the project development
Activities involved in the DPR

1. Project idea / kickoff meeting
2. Pre feasibility study of the project
3. Administrative approval of the project
4. Preparation of the DPR
5. Technical Sectioning the DPR
6. Implementation of the project
7. Overview of the project progress
8. Sending the Completion report of the project
The above rates are shown in a cyclic format in the following page.

Preparation of DPRs
Project Idea Pre-feasibility

study of the
project
Completion Administrative
Report approval
/Evaluation
Project Life Cycle
Review of the Preparation of

Progress DPR
Implementation Technical
of project Sanctioning
1.3 Bar Chart Gantt Schedule

Taking its name from early project management innovator Henry L. Gantt, the
basic Gantt chart or now one know it as Bar Chart is an easy way to document
schedules. It is a horizontal-bar schedule showing activity start, duration, and
completion. It shows the connection between events and the calendar, and
provides a graphical analogy of the activity duration.
The Gantt schedule can illustrate the relationship between work activities having
duration, events without duration that indicate a significant completion, and
milestones that represent major achievements or decision points. Various
comments can be used to communicate the progress of the project effort
compared to the baseline plan, as well to depict in a graphical way areas where
there are modified expectations from the baseline plan.
Once a Gantt schedule has been established for a project, progress should be
periodically plotted against the baseline schedule. If different functional areas are
involved in a project, each area may need its own detailed schedules to support
the project master schedule. In such cases it is important that working schedules
be linked to a common master schedule in a way that they can be easily updated.

Preparation of DPRs
Each activity or event on the schedule should have a responsible individual

assigned, so there is clear ownership and so schedule status can be updated
without a lot of argument. Here one should know meaning for two words
activity and event.
Activity- An activity is a part of the project denoted by an arrow on the

network. The tail of the arrow indicates the start of the activity whereas the head
indicates the end of the activity.
Event Event is the stage or point where all previous jobs merging in it, are
completed and jobs bursting out, are still to be completed.
B
e.g. A C
1 2
D
Here 1 and 2 denotes the event form where the activities A, B, C, D can merge of
burst out Scheduling process needs duration of the activity.
Table 1.1: Activities for a project with duration

No. Activity Duration (day)
1 Project idea / kickoff meeting 07
2 Pre feasibility study of the project 30
3 Administrative approval of the project 15
4 Preparation of the DPR 35
5 Sanctioning the DPR 15
6 Implementation of the project 180
7 Overview of the project progress 25
8 Sending the completion report of the project 07
But for scheduling these tasks each should have start date and completion date.
So, all the duration of above activities should be specified by start date and end
date presented in table 1.2.
Table 1.2: Activities for a project with time schedule
Duration Start Completion
No Activity
(Day) Date Date
1 Project idea / kickoff meeting 07 1-1-07 7-1-07
2 Pre feasibility study of the project 30 8-1-07 6-2-07
3 Administrative approval of the 15 7-2-07 22-2-07
project
4 Preparation of the DPR 35 23-2-07 30-3-07
5 Sanctioning the DPR 15 31-3-07 14-4-07
6 Implementation of the project 180 15-4-07 14-10-07
7 Review of the project progress 35 22-4-07 26-10-07
22-5-07 26-5-07
22-6-07 26-6-07
22-7-07 26-7-07
22-8-07 26-8-07
22-9-07 26-9-07
8 Sending the completion report of the 07 15-10-07 20-10-07
project

Preparation of DPRs
These activities can be explained by bar chart also and presented in table 1.3.
Table 1.3: Bar Chart of a project progress

N Activity Jan 07 Feb 07 March 07 April 07 Oct. 07
o
1 7 8 5 6 7 2 2 2 2 3 3 1 1 1 1 1 1 1 2
1 2 3 9 0 1 3 4 5 3 4 5 9 0
1 Project idea /
2 Pre feasibility
3 Administrative
4 Preparation of
5 Sanctioning
6 Implementation
7 Review of the
8 Sending the
In any government organization the progress of the project is being explained be

the bar chart. Above shown bar chart has been drawn manually. One can use
software like Microsoft Project to draw the bar chart which is very easy to use.
1.4 Work Breakdown Structure

A Work Breakdown Structure is a results-oriented family tree that captures all the
work of a project in an organized way. It is often portrayed graphically as a
hierarchical tree; however, it can also be a tabular list of "element" categories
and tasks or the indented task list that appears in your Gantt chart schedule.
As a very simple example, above project activities can be done as Work

Breakdown Structure (WBS).
Large, complex projects are organized and comprehended by breaking them into
progressively smaller pieces until they are a collection of defined "work packages"
that may include a number of tasks. The Work Breakdown Structure (WBS) is
used to provide the framework for organizing and managing the work.
In planning a project, it is normal to find oneself momentarily overwhelmed and

confused, when one begins to grasp the details and scope of even a modest size
project. This results from one person trying to understand the details of work
that will be performed by a number of people over a period of time. The way to
get beyond being overwhelmed and confused is to break the project into pieces,
organize the pieces in a logical way using a WBS, and then get help from the rest
of your project team.

Preparation of DPRs
Project
Level-1
Level-2
Project Preparation Sanctioning Implementation

Feasibility Administrative Review
Idea of DPR DPR of DPR Completion
study approval
Level -3
Project Preparation of Sanctioning Implementation

Feasibility Administrative Review
Idea DPR DPR of DPR Completion
study approval
Kickoff Reconnaissance Collection of Detailed Study Bidding Quality Physical checking
meeting and traffic feasibility report topographical &Scrutiny procedure control by of completed
Estimate and other data survey third party work
Circulate Preliminary Forwarding the Detailed Soil Discussion Evaluation of Progress Cooperation
minutes of design file Investigation with the tender report stipulated time
meeting Institute preparation limit against
actual completion
time
Discussion Approximate Discussion Socioeconomic Compliance Awarding the Review Arbitrations
meet Cost Estimation survey work to Meeting
Successor
Decision Feasibility Decision Primary Survey Decision Mobilizations Completions
Report Report
Evaluation If Yes Secondary Survey Land Execution of work
acquisition
If Yes Detailed If Yes
Engineering
design
Cost-estimation
Compilation of
Report
Chart 1: Sample WBS Structure

Preparation of DPRs
Taking a case of Rajkot DPR, individual component of the WBS can be explained
as in table 1.4 below.
Table 1.4: Detailed Activity Schedule of Water Supply Project

Sanction Date &
Sr. Sanctioned Cost
Name of Project Tentative Completion
No. (Rs. in Crore)
Time
27 /03/2006 &
1 ESR & GSR at ward No.6 6.75
Dec. 2006
27 /03/2006 &
Dec. 2006
27 /03/2006 &
Dec. 2006
27 /03/2006 &
4 New Head works at Raiyadhar 31.20
Dec. 2008
27 /03/2006 &
5 Water supply scheme based on Nyari reservoir 7.41
Sep. 2006
27 /03/2006 &
6 Water supply scheme based on Bhadar reservoir 24.70
July 2007
27 /03/2006 &
7 GSR at Sojitra ward -12 0.16
April 2006
GSR & Pumping machinery at Bajarangwadi at ward 27 /03/2006 &
8 0.90
no.14 Sept. 2006
27 /03/2006 &
9 GSR & Rising main at Dudhsagar 1.64
June 2006
Scheduling for all these projects can be explained by bar chart also which is
shown below in table 1.5.
Table 1.5: Scheduling for Water Supply Project
Details 2005 2006 2007 2008

Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
ESR & GSR at ward No.6

Completed

Completed
New Head works at
Raiyadhar
Water supply scheme
based on Nyari reservoir Completed
Water supply scheme
based on Bhadar
GSR at Sojitra ward -12
Completed
GSR & Pumping machinery
at Bajarangwadi at ward Complete
No.14
GSR & Rising main at

Dudhsagar Completed

Preparation of DPRs
2.0 Network Analysis
2.1 Network Techniques
To achieve the objectives of project management network techniques is widely

used. It is commonly known as PERT (Programmed Evaluation and Review
Technique), CPM (Critical Path Method).
PERT is used in Research type of projects whereas CPM is used in all of non-
research type projects.
2.2 Evolution of Network Techniques
By the end of 18th century, the decision-making process was mainly depended on
the managerial capabilities, experiences and academic background of managers.
In the early stage of 19th century, the pioneers of scientific management started
developing the scientific management techniques. During World War I, Henry L.
Gantt developed Gantt Chart for production scheduling which was later on
modified to bar chart for the purpose of project and production scheduling.
The network techniques of PERT and CPM were concurrently developed in 1957.
In the beginning, CPM was used for planning and scheduling of constructional
projects. It was also used for scheduling the maintenance shutdown. The
construction industry in general and the petro-chemical industry in particular
were the major areas of CPM applications.
PERT was developed by US Navy for scheduling the research and development
work for the Polaris Fleet Ballistic Missiles Programmed whose activities were
subject to a considerable degree of uncertainty. Initially, this technique was
named as Programmed Evaluation and Review Technique after 1958, this
technique was used by Russian Scientists for the utilization and management of
their huge ammunition. But after 1960, this technique came up as a revolutionary
technique for the purpose of decision-making.
With the passage of time, PERT and CPM applications started over-lapping and
now they are used almost as single technique and the difference between the two
is only of the historical and academic interest.
2.3 Types of Network
1. AOA Network: Activity on Arrow Network

2. PDM/AON Network: Precedence Diagram Method / Activity on Node
Network

Preparation of DPRs
2.3.1 AOA Network
a)
A B C
1 2 3 4
Above diagram represents a project with three activities A, B, C

Activity B can start after activity A is completed
Activity C can start after activity B is completed
Finish
b) Node
A D F
1 4 5 6
Starting
Node B
C E
2 3
2.3.2 Rules for AOA Network

1. There should be only one start node and only one finish node
2. At the starting node no activity enters but many can start
3. At the finish node many activities can merge but no activity start
4. At intermediate node many activities can merge and many activities can
start
5. Two nodes should not be connected with two different activities
1 2
A THIS IS WRONG
B
1) In above case an extra activity (known as Dummy Activity) is added to
correct the network
A
1 3
C
B Dummy Activity
(It has zero
2 duration)

Preparation of DPRs
2) An Event is said to be completed when all activities ending at that event

are completed
2.3.3 Calculating project time from AOA Network
Example 1:
0 10 20
A D
1 3 4
8 10
4 C
B
2
6
Total project time is 20

Event (2) will be completed after 6 days, event (3) will be completed after
10 days (Refer rule no 6 of network) & event no (4) will be completed
after 20 days.
2.3.4 Calculating Floats in AOA Network
i j
Di,j
Li Ei Lj Ej
Total float of Activity i, j = Lj Ei - Di,j

Free Float of Activity i, j = Ej - Ei Di,j
Interfering Float of i, j = Total Float Free Float = Lj Ej
Ei = Early Start Time from Event i

Li = Late Finish Time of Event i
Ej = Early Start Time from Event j
Lj = Late Finish Time of Event j
Di,j = Duration of Activity i, j

Preparation of DPRs
1 3 4
A D
0 0 8 10 10 10 20 20
4 C
6 B
6 6
Note: At event (3) activities A & C will end.

Activity A will be completed after 8 days & activity C will be completed after 10
days & hence as per rule 6 of network 10 is entered as finish time of event (3)
Project time is 20 days.
Above process is called forward pass of AOA network

Now we will take 20 as the latest finish time of event 4, and calculate latest finish
time of other events
For example latest finish of event (3)

= 20 {Lj of Event (4)} 10 {Duration of Activity D}
= 10
Float Calculations (Refer Formula)

Total Float of A = 10-8-0 = 2
Free Float of A = 10-8-0 = 2
Other Floats are tabulated below:

Activity Total Float Free Float Interfering Float
A 2 2 0
B 0 0 0
C 0 0 0
D 0 0 0
Critical Activity: When total Float of activity is zero, the activity is critical.
Non- Critical Activity: When the total float of an activity is greater than zero,
the activity is non-critical.
Path joining Critical activities is called Critical Path
There can be more than one Critical Path in a project
Delay in Critical activities will delay the project
Floats when utilized, do not delay the project

Preparation of DPRs
2.4 Network Analysis
2 D 3 F 5
4 4 7 11 11 9 20 20
E 5 H 6
B 4
1 A 4 G 8
0 0 8 16 16 10 26 26
0 26
16
C 3
K 3
6 J 7
11 3 12 23 15
Table 2.1: Float Example

ID Name Duration Total Float Free Float Intefering Float
1 A 8 8 8 0
2 B 4 0 0 0
3 C 3 8 0 8
4 D 7 0 0 0
5 E 5 0 0 0
6 F 9 0 0 0
7 G 10 0 0 0
8 H 6 0 0 0
9 J 12 8 0 8
10 K 3 8 8 0

Preparation of DPRs

Preparation of DPRs

Preparation of DPRs
Cumulative cost for Early Start schedule and Late Start schedule. Cost per day is
assumed to be 10 units of currency.
Activity /Day Cumulative Cost
Days
Early Late Early Start Late Start
1 3 1 30 10
2 3 1 60 20
3 3 1 90 30
4 3 1 120 40
5 3 1 150 50
6 3 1 180 60
7 3 1 210 70
8 3 1 240 80
9 2 3 260 110
10 2 3 280 140
11 2 3 300 170
12 3 4 330 210
13 3 4 360 250
14 3 4 390 290
15 3 4 420 330
16 3 4 450 370
17 3 3 480 400
18 3 3 510 430
19 2 3 530 460
20 2 3 550 490
21 2 3 570 520
22 2 3 590 55
23 2 3 610 580
24 2 3 630 610
25 2 3 650 640
26 2 3 670 670

Preparation of DPRs

Preparation of DPRs
3.0 PDM Network
AOA network has limitations in planning. It assumes that all preceeding activites
must be 100 percentage complete to start the new activity. This results in
inefficient project planning. PDM network overcomes above limitation.
3.1 Type of Dependancies
(1) Finish to Start
A n
B
Lag
Activity B can start after n days (units) from finish of activity A. n is called the
lage after finish of A
(2) Start to Start
A B
Activity B starts n days (units) after start of activity A
(3) Finish to Finish
A B
Activity B must finish n days ( units ) after the finish of activity A
(4) Start to Finish

n
A B
Activity b must finish n days (units) after the start of the activity A

Preparation of DPRs
3.2 Precedence Network Calculations
ES Dur. EF ES: Earliest Start

EF: Earliest Finish
Activity ID
LS: Latest Start
LS TF LF LF: Latest Finish
Finish to Start:
Late Finish A 10 5 15 28 5 33 EST B

13
= 45-13 A B = 15 + 13
= 32 27 32 45 50 = 28
Start to Start:
10
LS of A 10 5 15 20 5 25 EST B
= 45-10 A B = 10 + 10
=35 35 40 45 50 = 20
Finish to Finish:
8
Late Finish A 10 5 15 18 5 23 EFT of B
= 50-8 A B = 15 + 8
=42 45 50 = 23
37 42
Start to Finish:
16
LST of A 10 5 15 21 5 26 EFT of B
= 50-16 A B = 10 + 16
=34 34 39 45 50 = 26

Preparation of DPRs
3.3 PDM Example
PDM NETwork

Preparation of DPRs
4.0 Resource Management
4.1 Resource Loading
One of the problems o dangers inherent in scheduling of the project is that they
often do not address the issues of resource utilization and availability .schedules
tends to focus primarily on time rather than on both time and resources, which
includes people. An important measure of a project managers success is how well
he or she balances the trade offs among performance, time and cost. During a
period of crisis, it is occasionally possible to add additional resources such as
additional staff-to a project at little or no cost. Most of the time, however
resolving performance, time, and cost trade off entails additional costs to the
organization. The project managers goal must be to achieve project success
without increasing the cost or time required to complete the project .the key to
accomplishing this goal is effectively managing human resources on the project.
Once people are assigned to projects, there are two techniques available to the
project managers that help them to use project staff most effectively: resource
loading and resource levelling .Resource loading refers to the amount of
individual resources an existing schedule requires during specific time periods.
Resource loading helps project managers develop a general understanding of the
demand of a project will make on the organizations resources ,as well as on
individual peoples schedule .project manager often use histograms, to depict
period by-period variations in resource loading .A histogram can be very helpful
in determining staffing needs or in identifying staffing problems.
A Resource histogram can also show when work is being over allocated to a
certain person or group. Over allocation means more resources than area
available are assigned to perform work at given time.
4.2 Resource Levelling
Resource levelling is a technique for resolving resource conflicts by delaying tasks

.it is a form of network analysis in which resource management concerns drive
scheduling decisions ( start and finish dates) .The main purpose of resource
levelling is smoother distribution of resource usage .Project managers examine
the network diagrams fro areas of slack or float ,and to identify resource conflicts
.For example ,you can sometimes remove over allocations by delaying non-critical
tasks, which does not result in an overall schedule delay. Other times you will
need to delay the project completion date to reduce or remove over allocation.

Preparation of DPRs
Over allocation is one type of resource conflict. If certain resource is over

allocated, the project manager can change the schedule to remove resource over
allocation. If a certain resource is under allocated the project manager can
change the schedule to try to improve the use of the resources. Resource
levelling, therefore, aims to minimize period by period variations in resource
loading by shifting tasks within their slack allowances.
4.3 Resource Leveling Example

Resource per
Activity ID Name Duration Predecessor
Day
1 A 4 - 9
2 B 2 - 3
3 C 2 - 6
4 D 2 - 4
5 E 3 B 8
6 F 2 C 7
7 G 3 D, F 2
8 H 4 E, G 1
`
Before Levelling

Preparation of DPRs
After Levelling
Bar chart generated by MS Project

Preparation of DPRs
Resource Histogram before levelling
Bar Chart generated after levelling

Preparation of DPRs
Resource histogram after levelling
5.0 Project Time Management
5.1 Reducing Project Duration

In recent years emphasis on time to- market has taken on new importance
because of intense global competition and rapid technological advances. The
market imposes a project duration date. For example, a rule of thumb for
moderater to high- technology ferms is that a 6 month delay in bringing a
product to market can result in a gross profit, loss or market share of about
30%.in these cases, high-technology firms typically assume that the time
ssavings and avoidance of lost profits are worth any additional cost to reduce
time without any formal analysis. It is interesting to observe how more serious
analysis occurs in reception periods when cash flows are tight.
Incentive contracts in partnering arrangements can make reduction of project

time regarding usually for both the project contractor and owner. For example, a
contractor finished a bridge across a lake eighteen months early and received
more than $6 million for the early completion. The availability of the bridge to the
surrounding community eighteen months early to reduce traffic gridlock make the

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incentive cost to the community seen small to users.In another example, in a

partnering continuous improvement arrangement, the joint effort of the owner
and contractor resulted in early completion of a river lock and a 50/50 split of the
savings to the owner and contractor.
Another reason for reducing project time occurs when unforeseen delays for
example, adverse wheather design flaws and equipment breakdown a cause
substantial delays midway in the project. Getting back on schedule usually
requires compressing the time on some of the remaining critical activities the
additional costs of getting back on schedule need to be complied with the cost of
being late.
Sometimes very high overhead or good will costs are recognized before the
project begins. In these cases it is prudent to examine direct costs of shortening
the critical path versus the overhead end /or goodwill cost savings.usually there
area opportunities to shorten a few critical activites at less than the daily
overhead rate or perceived goodwill cost.under specific conditions (which are not
rare) , huge saving are possible with little risk.
Managers have several effective methods for crashing specific projects activities
when resources are not constrained. Several of these are summarized below :
5.1.1 Adding resources

The most common method for shortening project time is toa assign addition staff
and equipment to activities.there are limits , however , as to how much speed
can be gained by adding staff. Doubeling the size of the work force will not
necessarily reduce completion time by half.
5.1.2 Outsourcing project Work

A common method for shortening the project time is to subcontract an
activity.The subcontract may have access to superior technology or expertise that
will accelerate the completion of the activity.
5.2 Scheduling overtime

The easiest way to add more labor to a project is not to add more people, but to
schedule overtime. If a team works 50 hours a week instead of 40, it might
accomplish 25 percent more .By scheduling over time you avoid the additional
costs of coordination and communication encountered when new people are
added. If people involved are salaried workers. There may be no real additional
cost for the extra work. Another advantage is that there are fewer distraction
when people work outside normal hours.

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Overtime has disadvantages. First, hourly workers are typically paid time and a
half for overtime and double time for weekends and holidays. Sustained overtime
work by salaried employees may incur intangible costs such as divorce,and
turnover.
5.3 Crashing Project

In order to reduce the project time, the duration of critical activities have
to be reduced (by increasing resources etc.)
The reduction in duration will generally increase the cost of the project
Terminology:
NT = Normal Time (duration) of Activity

NC = Crash Time (duration) of Activity
CT = Cost of Activity at NT
CC = Cost of activity at Nc
Cost Slope = Tan = CC- NC/ NT-CT
In order to curtail the duration of the activity, cost slope values have to be
viewed carefully.
Least cost slope activity must be curtailed first and so on
If more than one critical path is generated after Crashing then duration of
activities on all paths have to be curtailed. The following example will explain
the technique of Crashing.
Normal Crash
Activity Predecessor Cost Slope
Duration Duration
A 3 1 - 500
B 7 3 A 100
C 4 2 A 400
D 5 2 c 200

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Normal cost of project = Rs. 10,000

Cost of overheads per day = Rs. 200/day
OH Cost = 12 X 200 = Rs. 2400/-
Total cost = Normal cost + OH Cost
= Rs. 10,000 + Rs. 2,400
= Rs. 12,400 (Before crashing)
Normal Time:
Step (1)
Since D has lease cost slope, it will be crashed by 2 days
Cost of crashing = 2 X 200 = 400
Reduction of OH = 2 X 200 = 400
Hence there will be no extra cost if the project time is reduced to 10 days
Step (2)
Now there are two critical paths viz: A B & A C- D

To curtail one day the options are
Crash - A - 500
Crash - B+C - 500
Crash - B+D - 300
Last option is least expensive so B & D will be curtailed by one day each
Extra cost of crashing = 100 (B) + 200 (D) = 300
Saving in O.H. = 1 X 200 = 200
Hence the project cost will increase by Rs. 100/-

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Step (3)
Option for crashing are:

A - 500
B+C - 500
B+D - 300
Since D is fully crashed last option cant be used. Hence A is the least
expensive option.
Crash A by 2 days
Extra cost of crashing = 2 X 500 = 1000
Saving in O.H. = 2 X 200 = 400
Therefore, Net extra Cost = Rs. 600/-
Step (4)
At this stage:
A is fully crashed
D is fully crashed
B is crashed by 1 day (can be crashed by 3 days)
C not crashed (can be crashed by 2 days)
The only option left for crashing is B + C

Activities B & C will be curtailed by 2 days
Extra cost of crashing = 2 X 500 = 1000
Saving in O.H. = 2 X 200 = 400
Net Extra Cost = Rs. 600/-
Project duration is now 5 days

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Saving Extra Cost Net Extra

Duration Step Total cost
OH of Crashing Cost
(12) - - - - 12400
(10) Step (1) 400 400 - 12400
(9) Step (2) 200 300 100 12500
(7) Step (3) 400 800 600 13100
(5) Step (4) 400 1000 600 13700
6.0 Earned Values
6.1 Earned Value reporting
In the mid stream project evaluation, the conventional method of variance

analysis does not indicate the clear picture about project completion time or cost.
To avoid this shortfall, Earned value analysis isdone . It helps in
forecasting the time and cost in respect of the remaining part of the
execution of the project.
Given a cost performance baseline, project managers and their teams can
determine how well the project is meeting scope, time and cost goals by
entering actual information and then comparing it with the baseline.
A baseline is the original project plan plus approved changes.
Actual information includes actual dates of start/end of each activities and
the actual costs pertaining to these activities.
6.2 Earned Value Analysis
1. BCWS: Budgeted cost of work scheduled

2. BCWP: Budged cost of work performed
3. ACWP: Actual cost of work performed
4. CPI: Cost performance index = BCWP/ACWP
5. SPI: Scheduled Performance Indx = BCWP/BCWS
6. ECC: Estimated cost at Completion = Planned cost (BAC)/CPI
7. ETC: Estimated to to complete= Planned duration/SPI
8. SV: Scheduled Variance = BCWP BCWS
9. CV: Cost Variance = BCWP ACWP

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6.3 Earned Value Example
Packing meters to be installed = 1000

Estimated cost of project = 200,000
Planned duration = 40 Days
Budgeted cost/day = 200,000/40 = 5,000
Planned work = 1,000/40 = 25 meter/day
Budgeted cost per unit = 200,000/1,000 = 200
At the end of 18th day 400 meter are installed.

Actual cost at the end of 18th day = 100,000 (ACWP)
BCWS = 18 X 5,000 = 90,000
BCWP = 400 X 200 = 80,000
Scheduled Variance = BCWP BCWS = 80,000-90,000 = -10,000
Cost Variance = BCWP ACWP = 80,000-100,000 = -20,000
CPI = BCWP/ACWP = 80,000/100,000 = 0.8 (approx.)
SPI = BCWP/BCWS = 80,000/90,000 = 0.9 (approx.)
ECC = Estimated cost at completion= 200,000/CPI = 200,000/0.8=250,000
Estimated Time to Complete = 40/0.90 = 44.4 say 45 days
6.4 Practice Examples
Draw network diagram and precedence diagram for the following projects:
Calculate all floats and tabulate results
Draw bar char for both projects
Example 1:
Activity
Activity ID Predecessors Duration
Description
1 A - 3
11 B A 5
21 C - 4
31 D C 2
41 E B, D 4
51 F E 3
61 G B 4
71 H F,G 2

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Example 2:
Activity
Activity ID Predecessors Duration
Description
1 A - 1
2 B - 2
3 C B 3
4 D A 5
5 E B 2
6 F A 4
7 G A 3
8 H D 2
9 J C 6
10 K J 3
11 L K 2
12 M F 5
Example 3:
Activity Duration Successor
D 3 E,G,J
E 8 F
F 10 M
G 2 H
H 6 I
I 3 M
J 3 K
K 4 L
L 6 M
M 2 -
a) Find the project duration

b) Draw revised network if activities H & K require equipment X and only one
equipment is available. Also calculate project duration for alternate
networks.
Example 4: In the given project only three resources are available. Reschedule
the project by resource leveling.
Activity Duration Predecessor Resources

A 1 - 2
B 2 - 1
C 2 - 1
D 1 A 1
E 3 B 1
F 2 C 1
G 1 D 1

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7.0 Project Scheduling through Software

The following action provides a step-by-step approach while scheduling project
activities to software such as MS project.
j Blank Project Sheet
Inserting the Values
Task Name
Duration Start Time
Finish Time
Predecessor

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Inserting the Values
Task Name
Duration Start Time
Finish Time
Predecessor
Gantt Chart Automatically prepared by MSP

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To insert new columns of:
Free clack
Total slack
Right Click on Predecessor Column
Insert Column

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Specify the Column Fields
Specifying the column fields
Final Values with Total Slack & Free Slack
Final Values with Total slack & Free Slack

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Formatting the Bar Chart

Viewing name of activity on the bar
Viewing Total Slack in the Bar Chart
Steps
Format Bar
Format Bar Window appears
g
Insert the Field to be displayed from the drop down of Resource name
n the bar
Bar Chart
Formatted Bar Chart

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Checking the Project Statistics & Other Information
Steps:
Project Project Information
Statistics
Viewing the Detailed

Grantt Charts
Steps
View- More Views
Select Detail
Gantt Chart
Apply

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Detailed Gantt Chart
This chart shows the critical paths of the project and the floats available in the
activities
To View only the Critical Path
y
Steps:
Project Filter
for:Critical
Critical

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Customizing the Calendar

Steps:
Tools Change Working Time
This gives default calendar
For a new calendar new
Supply the name
Select create a new base calendar

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Giving working & Non-working days

Steps: Select the dates select default working or non-working time respective
to what is required
Inserting Column fields not in

the default list
Insert Column
Field Name Text
Right click on column
Customize Fields
Rename the Column
Supply the value list of the
column

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Sheet after inserting values

Insert the respective values from the value drop down list
To Filter on Phase wise

Project Filet for
more filters new
supply values in
the field name,
test and values

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The Filtered activities for Phase 1
Grouping the Activities

Project Group By More Groups
New
Supply the respective values

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Agency wise grouped activities
7.1 Live Example of Scheduling of Project Activities

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ACTIVITY ENTRY
RESOURCE ENTRY: RESOURCE SHEET

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RESOURCE GRAPH
BAR CHART

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BAR FORMATING
REPORT GENERATION

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PROJECT SUMMARY REPORT

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NETWORK DIAGRAM GENERATION

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8.0 Bid Process Management
The main purpose of bid process management is to identify and select a suitable
delivery partner for any activity or a project. This is one of the most important
aspects of any project lifecycle as the quality of outputs is grossly dependent on
it.
Over the years the process of bid management has undergone many refinements
as the natures of services as well as the requirements of delivery partners have
become more and more complex. Thus, it is important to have adequate clarity
on nature; scale and quality of services are being sought from a delivery partner.
Often, it is assumed that the bid process management is an end of project
activity and time line for the same do not reflect adequately in the project
schedule.
8.1 Objectives of Bid process Management

The main objectives of the Bid process management are:
Choose suitable partner on best possible terms
Choose partner with skills, experience and resources
Secure desired service improvement & efficiency
In todays world, the bid process management has emerged as one of the main
activities of project management and adequate importance is attached while
scheduling of the project itself. Due to rapid increase in the project complexities,
a delivery partner can be sought right at the beginning or at any stages of
project. Based on the involvement a project partner may be classified as under:
Owners Consultants
Programme / Process / Project Management
Activity Consultants
Piece-meal Constructions
EPC/Turnkey
BOT/BOOT/BOO etc
8.2 Invitation of Bids

NITs (Notice Inviting Tenders)
LCB Local Competitive Bids (Procurement at the local level)
NCB National ( Invitation to National Players)
GCB/ICB- Global / International ( Invitation to International Market)

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8.3 Type of Bidding Process

Single Sealed Tender Type (fill the blanks)
Sealed Single Bid,
Two Stage System (RFQ & RFP),
EOI+ RFQ+RFP
PQ +Two Bids / EOI + Two Bids
Swiss Challenge (Unsolicited)
8.3.1 Two-Stage Bidding process

The first stage of bidding involve Request for Qualification (RFQ) containing
qualifying criteria for selection of bidders to participate in the second stage.
The second stage of bidding invite Request for Proposals (RFP) from the
qualified bidders which will further be evaluated.
A. Request for Quotation (RFQ)
i) Request for quotation can be divided in following sections.
Section 1 - Letter of Invitation

Section 2 - Instructions to Consultants (including Data Sheet)
Section 3 - Technical Proposal - Standard Forms
Section 4 - Financial Proposal - Standard Forms
Section 5 - Terms of Reference
Section 6 - Standard Forms of Contract
ii) RFQ should include following
Overview of the Bidders Business

Details of Manpower, Infrastructure, Equipments etc
Audited Balance Sheets (3 to 5yrs)
Solvency Certificate
Other Registration details
Documentary Proof of Similar Services along with the completion
certificates
A. Request for Proposals
1. Technical Proposals
1. Many governments adopted a two-stage process (either in the place of or

in addition to a prequalification round) whereby bidders present separate
technical proposals containing business and investment plans.
2. These proposals are evaluated before proceeding to the financial offers.
3. Often the evaluation is conducted on a pass/no pass basis - that is, only

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those bidders that pass the technical evaluation proceed to the financial
evaluation.
4. The winning bidder is then selected on the basis of the best financial
proposal from among those who passed the technical evaluation
Technical proposal should include
1. Technical Proposal Submission Form

2. Consultants Organization and Experience
a. Consultants Organization
b. Consultants Experience
3. Comments or Suggestions on the Terms of Reference
4. On the Terms of Reference
5. Description of the Approach, Methodology and Work Plan for Performing
the Assignment
6. Team Composition and Task Assignments
7. Curriculum Vitae (CV) for Proposed Professional Staff
8. Staffing Schedule
9. Work Schedule
2. Financial Proposals
There are many different options for structuring financial proposals. Some of the
more common options include bidding on:
a) The highest price or highest concession fee (one-time or annual) paid to
the government
b) The lowest cost to the government for constructing or operating facilities
or services
c) The largest amount of new investment to be undertaken by the operator
d) The lowest tariff to be charged to consumers
e) The lowest net present value of the future revenue stream to the
developer from the service or project
f) The lowest subsidy that the government must provide to the winning
bidder to operate a loss-making service
g) Others: maximum extent of new service coverage promised or the
minimum length of the concession period.
8.4 Procurement Criteria of International

The Bid process management in India, over the years has enrioned due to
implementation of projects, funded by the intermediate agencies. It is, therefore
important to take note of their procurement lines. A sample criteria is elaborated
in the following sections.

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8.4.1 Technical proposal Evaluation Sample

Points
(i) Specific experience of the Consultants relevant to the assignment: [10]

(ii) Adequacy of the proposed methodology and work plan in responding
to the Terms of Reference:
a) Technical approach and methodology [20]
b) Work plan [05]
c) Organization and staffing [05]
Total points for criterion (ii): [30]
(iii) Key professional staff qualifications and competence for the
assignment:
a) Team Leader (15)
b) Environmental Specialist (10)
c) Social Development Specialist (10)
d) Infrastructure Specialist (05)
e) Contract Management Specialist (05)
f) Consultation Specialist (05)
iv Local Participation (10)
Total points for criterion (iii, iv): (60)
The evaluation committee shall evaluate the Technical Proposals on the basis of
their responsiveness to the Terms of Reference, applying the evaluation criteria,
sub criteria, and point system specified in the Data Sheet. Each responsive
Proposal will be given a technical score (St) Minimum Technical Score 75%
A Proposal shall be rejected at this stage if it does not respond to important
aspects of the RFP, and particularly the Terms of Reference or if it fails to achieve
the minimum technical score indicated in the Data Sheet.
8.4.2 Financial
Table 8.1: Breakdown of Remuneration
Sl. Remuneration
Name Position Input Amount
No. Currency Rate
Foreign Staff (in
case of foreign
firms)
Local Staff
Consultants
Grand Total

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Table 8.2: Criteria of Technical Proposal

[Indicate
[Indicate
Unit Foreign
No Description1 Unit Quantity Local
Cost2 Currency #
Currency]3
1]3
a Per diem allowances Day
b Air Travel From to 4 Trip
Miscellaneous travel
c Trip
expenses
Communication costs
d between [Insert place]
and [Insert place]
Drafting, reproduction of
e
reports
Equipment, instruments,
f
materials, supplies, etc.
Use of computers,
g
software
h Local transportation costs
i Office rent
Total Costs
8.4.3 Final Ranking

h) The formula for determining the financial scores is the following:
i) [Sf = 100 x Fm / F, in which Sf is the financial score, Fm is the lowest
price and F the price of the proposal under consideration.]
j) The weights given to the Technical and Financial Proposals are:
k) T = 0.8, and
l) F = 0.2
8.4.4 Time Line for Bid Process Management

It is important to built-in adequate time line or Bid Process Management in over
all project schedules. The following table indicates the time frame for a medium
Scale Project (table 9).

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Table 8.3: Time line An Example

Activity Date
Notice for EoI for Sasan/ Mundra 31-1-06/ 1-2-06
Submission of EoI for Sasan/ Mundra 28-Feb-2006
Issue of RFQ Documents for Sasan/ Mundra 31-Mar-2006
Submission of Bids (RFQ) 01-June-2006
Issue of RFP Documents 15-June-2006
Submission of Bids (RFP) 15-Nov-2006
Selection of Developer/ Transfer of SPV 31-Dec-2006
8.5 Swiss Challenge System in Bidding Process
Swiss Challenge System is a new bidding process to help private sector initiative
in core sector projects.
It's an offer made by the original proponent to the government ensuring

his process to be best (in terms of effectiveness including both the factors
cost and time) by his initiative as a result of his own innovative approach
or on the demand of the government to perform certain task.
The Swiss challenge system, like the bonus system, further allows third
parties to make better offers (challenges) for a project during a designated
period with simple objective to discourage frivolous project, or to avoid
exaggerated project development costs.
Then accordingly, the original proponent gets the right to counter-match
any superior offers given by the third party.
Countries like Philippines, South Korea, Chillie have strong experience of
this mode
8.5.1 Approach
1. The government can either purchase the intellectual property rights for a
project concept from the proponent or then award the project through a
competitive bidding process in which no bidder has a predefined advantage.
2. The government can offer the original proponent an advantage in a
competitive bidding process. In this case the government should create rewards
that satisfy the original proponent while still allowing a truly competitive process.
8.5.2 Indian Experience in Bidding process
Madhya Pradesh & Chattishgarh governments have decided to adopt the "Swiss
challenge system" in infrastructure creation. Under which initially only the
projects relating to the state Public Works Department (PWD) will be within the

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ambit of the system.
The Andhra Pradesh government is also going to adopt the Swiss Challenge
method for selection of a developer for the Outer Ring Road (ORR) project of
Hyderabad. Wherein, the criteria being kept as whichever company or consortium
pitches for less land will emerge as the successful bidder.
The Uttaranchal government has also decided to develop the Sitarganj industrial
estate in the state with private sector participation on a Swiss Challenge
Approach basis.
Major Controversy in Karnataka for Bangalore-Mysore Infrastructure Corridor

Project
8.6 Bid Structure and Evaluation
It is often difficult to evaluate and compare proposals from different bidders. In

designing the bid evaluation process, the following must be considered:
1. Whether to have a two-stage process involving the sequential evaluation
of technical and financial proposals
2. How to assess whether a technical proposal is fully responsive to the
specified requirements
3. How offers should be evaluated and compared
8.7 Bid Design

Apart from the structure of the bid, bidding rules and procedures should also be
designed to ensure transparency and economically efficient outcomes.
These include:
Whether to use a reserve price and whether to announce it
Whether and when to use sealed bids rather than open bids
Whether to have a single round or multiple rounds of bidding
Whether to have simultaneous or sequential bidding (in cases where
several concessions with interdependent values are being awarded)
Whether to require bid bonds and activity rules
Whether bidders should be remunerated for a portion of their bid costs
8.8 Prequalification and Short listing-Introduction
When awarding concessions for the provision of a monopolistic infrastructure

service, the government usually wants to ensure that the winning consortium has
the technical and financial capacity to operate the concession successfully
The government does not want to award it to an operator that offers the best

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deal on paper but later fails to deliver what was promised. One way to reduce this
problem is to design the concession contract so that it is attractive only to
operators who are confident that they can operate the business successfully. This
can be done by writing a contract that imposes stiff penalties for poor future
performance and requiring firms to post a bond sufficient to pay the penalties
The success of a concession depends not only on getting the provisions of the
contract right, but also on designing an appropriate method for awarding the
concession. These include:
1. Whether to use competitive bidding (or some other method) to award the
concession
2. Whether to have a prequalification process for interested bidders
3. How to structure and evaluate bids
4. Whether to have sealed or voice bids
5. Whether to have single or multiple bidding rounds
The design of the bidding and award procedures can have a significant impact on
the economic efficiency and transparency of the concession.
8.9 Choosing the method of Award
The Method of Award can be broadly grouped into three categories:

1. Competitive bidding
2. Direct negotiations and unsolicited bids
3. Competitive negotiations
These methods constitute a continuum, and any award process is likely to

incorporate elements of competition and negotiation at various stages.
8.10 Competitive Bidding
Public notification of the government's intent to award a concession for a private

infrastructure project or service, generally including a request for expressions of
interest
Distribution of information memoranda, bidding documents, and related draft
contracts to potential bidders
A formal process for pre-qualifying potential bidders
A formal public process for presenting proposals, evaluating proposals, and
selecting the winner.
Competitive bidding is favoured because:

a) It ensures transparency in the contract award
b) It provides a market mechanism for selecting the best proposal and

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typically results in lower costs, and it stimulates interest among a broader

range of potential investors
Competitive bidding is easiest to design and implement when:
The product or service required is fairly standard

The technical parameters can be defined with reasonable certainty in the
bidding documents
There is limited scope for innovation and creativity on the part of an
operator
8.11 Competitive Negotiations
It may also be possible to combine elements of competitive bidding with direct

negotiation to promote transparency, while preserving the innovative or
proprietary aspects of developers' proposals. A competitive process solicits
proposals in response to broad output specifications
Their negotiations are undertaken directly with one or more developers.
Competition would be used to narrow the number of potential developers, and
negotiations would be used to work out detailed terms and conditions of the
contract.
The government would have fallback bidders if negotiations with the preferred
bidder failed.
Alternatively, simultaneously negotiations with several developers to further

enhance the competitive aspects of negotiated transactions can be undertaken.
Under this method the government specifies its objectives and solicits proposals
from private operators through a Request for Proposals (RFP).The government
then reviews the proposals, selects those that are deemed technically responsive
to the RFP, and negotiates the contract terms with the selected bidders
The process may involve simultaneous negotiations with several bidders with the
objective of awarding the contract
This competitive negotiation approach is well suited to projects in which:

a) There is scope for innovation and different approaches by developers,
and authorities hope to elicit imaginative proposals for projects
b) It would be difficult to secure financing on the basis of standardized
contract documents
In these circumstances simultaneous negotiations with several pre qualified

bidders may be the preferred approach for awarding one or several projects.

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8.11.1 Advantages of Competitive Bidding

Transparency. Transparent competitive bidding can withstand public
scrutiny, avoiding accusations of corruption.
Lower tariffs. Competitive bidding can attract several qualified bidders.
The competitive process obtains the lowest tariff a private company can
charge while achieving its objectives.
Better information. Competitive bidders can produce up-to-date
information on the condition and value of the assets.
Curbing monopolies. In many infrastructure projects, a monopoly is
unavoidable-for example, water distribution. If contracts are awarded on
the basis of the lowest tariff, a company cannot exploit its monopoly to
impose high prices.
8.11.2 Limitations of Competitive Bidding

Urgency: When the need for infrastructure facilities is urgent, governments often
resort to direct negotiation of contracts with the private sector.
Lack of legal and institutional support: For competitive bidding to work, there
should be a strong commitment from the host government, and an established
legal structure for private sector participation. Competitive bidding is not a
realistic option for countries without a track record.
High cost of bid preparation: The high cost of preparing a competitive bid (2-10
percent of total project costs) could deter some good firms from participating.
The usual solutions don't suit all developing countries. Some developing countries
cannot afford to absorb any of the bidding costs.
Not suitable for small contracts: Competitive bidding for small concessions
might not justify the transaction costs.
May restrict innovation: Proposals must be very specific, or they cannot be
compared. However, excessive standardization can eliminate new technology that
could produce better quality or lower tariffs.
Lowest bidder may default: Sometimes the lowest bidder under estimates
costs and cannot meet obligations. This can lead to substantial renegotiations of
terms.
When are Negotiated Contracts Acceptable:
When more information is required. Sometimes governments cannot specify

the terms for competitive bidding, because they lack certain knowledge. Then it's
best to negotiate with developers that are willing to risk developing a proposed
project.
For unique and innovative proposals. Negotiated contracts are appropriate for
developers with unique, unsolicited proposals that present a new solution

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to a problem. Competitive tendering would discourage private firms from

developing their ideas.
8.12 Contracts won by Negotiation
Whenever a private sector infrastructure project that has not been awarded
through competitive bidding, following precautions may be taken during Project
funding.
Goods and services required by the project must be competitively bid:
When a concession-type contract has been won through negotiation, it must be
insisted that competitive bidding is used for goods and services required by the
project.
Scrutinize the project: The project sponsor must agree to a rigorous technical
and economic review of the project by the lender. Compare the project with
similar, competitively bid projects elsewhere, to make sure the project cost is
competitive.
Review the negotiated tariff: Submit the negotiated tariff to a rigorous,
independent review to determine its market competitiveness. The review by a
credible third party such as ADB creates transparency and promotes lender
confidence.
8.13 Direct Negotiations and Unsolicited Proposals
Under direct negotiations, the project idea generally originates with a private
sector sponsor, rather than with the government. A developer or operator seeks
to negotiate directly with a government on terms and conditions for an
infrastructure project. There may be circumstances in which a full-blown
competitive bidding process may not yield the best result for consumers:
a) Projects in smaller municipalities, where it may be too costly to

arrange a competitive bidding process or where it may be difficult
to attract developers and operators
b) Emergencies and natural disasters, in which major projects or
repairs must be completed rapidly
c) Projects involving proprietary or innovative technology
In countries without a track record or a proven legal and regulatory framework

for private concessions, governments may choose to enter direct negotiations for
some initial projects on a pilot basis in order to gain experience and build a record
with investors.
In general, in cases where competitive bidding is not used, some degree of
competition should be introduced into the process or otherwise replicate
competitive forces, in order to ensure both transparency and economically

Preparation of DPRs
efficient outcomes. These could include:

Using external advisers and consultants to assist the government in
assessing proposals
Benchmarking against the cost of similar projects
Announcing the proposed project terms and conditions
Allowing other developers an opportunity to better the terms within a
specified period
Establishing an independent advisory panel to review the proposed
transaction
Periodic rebidding of the concession would also help ensure longer-term
economic efficiency in cases where the initial concession was directly
negotiated

Preparation of DPRs
Annex I:
Sample Format for MOU
AGREEMENT
The Client and the Infrastructure Consultant are hereinafter collectively referred to as
Parties and individually as Party.
WHEREAS:
A. The Client is a company inter alia engaged in the business of Real Estate Development
and is in the process of establishing an integrated township at Batanagar, West Bengal
with special structures for public utilities, schools, hospitals, residential premises,
community services and commercial buildings.
B. The Client is desirous of appointing a firm of repute and of international standards

engaged in the business of providing engineering services for the proposed integrated
township at Batanagar, West Bengal and has approached the Infrastructure Consultant.
C. The Infrastructure Consultant has agreed to provide the engineering services in relation
to the proposed integrated township at batanagar, West Bengal, upon the terms and
conditions set out herein below.
NOW IT IS AGREED BETWEEN THE PARTIES AS UNDER:
1. SCOPE OF WORK
Site, hereby, shall mean the plan area of the proposed buildings and the immediate site
context on all its peripheral edges.
For the allocated site parcel, the Infrastructure Consultant shall provide the following services
(hereinafter referred to as Services), strictly in accordance with the terms and conditions of
this Agreement and instructions received from the Client form time to time:
INFRASTRUCTURE RELATED SERVICES
1.1 Taking Client's instructions and preparation of design brief.

1.2 Site evaluation, analysis and impact of existing and/ or proposed
development on its immediate environs.
1.3 Study the existing services like Electric Network, Water Distribution Network,
Sewage Network, Storm Water Network, Ponds, STP, and prepare scheme
to use these networks during construction stage.
1.4 Identifying the water source, pump house, WTP, Water Supply and
distribution Network.
1.5 Storm water disposal and rain water collection.
1.6 Rain water harvesting
1.7 Sewage collection and disposal.
1.8 Waste water treatment and recycling.
1.9 Identifying the source of Electric supply, Switch yard location and design,
Electric power distribution network.
1.10 Fire protection and detection system and Tele communication network etc.

Preparation of DPRs
2. SCHEDULE OF SERVICES
The Infrastructure Consultant shall after taking instructions from the Client, render the
following services:
CONCEPT DESIGN [STAGE 1]:

Description of Work
Ascertain Client's requirements, examine site constraints & potential; and prepare a
1.1
design brief for Client's approval.
1.2 Prepare report on site evaluation, state of existing services, if any; and analysis and
impact of existing and/ or proposed development on its immediate environs.
1.3 Prepare drawings and documents to enable the Client to get done the detailed
necessary surveys at the site of the project.
1.4 Prepare conceptual service design layout with reference to given program brief and
discussions with the Client.
1.5 Prepare rough estimate of cost based on area calculation sheet for the approval by the
Client.
Site Evaluation Report
Analysis of existing services indicative of its utility and operation during
the construction stage.
Analysis of existing Sewerage treatment plants and the proposal for its
augmentation.
Identification of source for electric supply and water supply indicative of
cost comparisons for chosen alternatives.
Conceptual Design/ Layout Plan
Schematic service layout diagrams on the master plan indicative of the
Deliverables source, distribution network and outlet points (Auto CAD).
Services corridor sections in integration with the transportation
network (Auto CAD).
Cost Comparisons wherever options proposed.
Block Estimates.
Note: The Infrastructure Consultant shall be liable to deliver to the Client

3 hard copy sets and soft copy (Drawings in AUTO CAD only,
wherever prescribed) for all the above-mentioned items.
PRELIMINARY DESIGN AND DRAWINGS [STAGE 2]:

Description of Work
Prepare preliminary infrastructure utility and operation plan report based on site
2.1 evaluation and status of existing services and analysis and impact of existing and/ or
proposed development on its immediate environs.
Modify the conceptual service drawings incorporating required changes and prepare the
2.2 preliminary drawings, sketches, sections, etc., for the Client's approval along with
preliminary estimate of cost on area basis.
Prepare preliminary services layout with area statement for installing services like Pump
2.3
House, WTP, STP, and Electric Switch Yard.

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Prepare a preliminary storm water management in response to the site gradation, site
2.4
development plan and site drainage.
Modify the services corridor sections in consultation with the Landscape Architect and
2.5
the Transportation Consultant appointed by the Client.
2.6 Prepare detailed cost estimate for the approval by the Client.
2.7 Prepare preliminary street lighting and landscape lighting plans.
Site Evaluation Report

Finalized infrastructure utility and operation scheme using existing site
services during the construction stage (Auto CAD).
Schematic design drawing for storm water collection, diversion and disposal
integrated with pond water management mechanism during the construction
stage (Auto CAD).
Conceptual Design/ Layout Plan
Conceptual service layout drawings with detailed design calculations (Auto
CAD).
Co-ordinated Service Drawings
Deliverables Primary road network and landscape drawings co-ordinated with the
preliminary service corridor drawings (Auto CAD).
Preliminary service layout drawings for delivering services like electric,
water supply, collection of sewage, storm water, telecommunication and fire
protection system integrated with the land parcel drawings provided by the
Architects appointed by the Client. (Auto CAD).
Rough Cost estimation statement inclusive of tentative, material
specifications.
Note: The Infrastructure Consultant shall be liable to deliver to the Client 3 hard
copy sets and soft copy (in AUTO CAD only wherever prescribed) for all the
above-mentioned items.
DRAWINGS FOR CLIENT'S/ STATUTORY APPROVALS [STAGE 3]
Description of Work
Prepare drawings necessary for Client's/ statutory approvals and ensure compliance
3.1 with codes, standards and legislation, as applicable and assist the Client in obtaining the
statutory approvals thereof, if required.
Prepare a schematic plan for services like electrical system, water supply, sewage,
3.2 storm water, fire, telecommunication duct bank system and street lighting in integration
with the transportation network.
3.3 Prepare a schematic design drawing for pump house and water distribution network.
3.4 Prepare schematic drawings and specifications of sewage collection network and STP.
Prepare a schematic design drawing for storm water collection, disposal and pond water
3.5
management.
3.6 Prepare schematic drawings for recycling waste water network.
3.7 Prepare schematic design and drawing for electric switchyard and distribution network.
3.8 Prepare schematic design and drawings for external street lighting.

Preparation of DPRs
Statutory Drawings :
Drawings necessary for Statutory approvals (Auto CAD).
Engineering Drawings :
Engineering service drawings for all services with detailed design
calculations (Auto CAD).
Co-ordinated Service Drawings :
Primary road network and landscape drawings co-ordinated with the
modified service corridor drawings (Auto CAD).
Deliverables
Modified service layout drawings for delivering services like electric, water
supply, collection of sewage, storm water, telecommunication and fire
protection system integrated with the land parcel drawings provided by the
Architects appointed by the Client. (Auto CAD).
Cost estimation statement inclusive of tentative material specifications,
structural and services cost.
WORKING DRAWINGS AND TENDER DOCUMENTS [STAGE 4]
Description of Work
Prepare service working drawings sufficient for execution of works, including preparation
4.1 of full-scale prototypes during or prior to Execution of Works, if necessary at the Clients
expense.
Prepare working drawings for services like electrical, water supply, sewage, storm
4.2
water, telecommunication and fire.
Prepare working drawings sufficient for installation of special lighting/ special design
4.3
features in consultation with the Landscape Consultant appointed by the Client.
4.4 Prepare schematic design sufficient to prepare tender drawings.
4.5 Tender Documents
a. Preparation of tender documents and special conditions of contract, if required.
b. Organising and conducting bidding process pre-qualification of contractors, invitation
of bids, providing clarifications for bidders.
c. Analysis of bids for review by the Client.
d. Preparation/ finalisation of contract documents.
4.6 Selection of Contractors/ Suppliers
a. Review and appoint suppliers and execution agency in consultation with the Client.
b. Finalise rates with suppliers and execution agency.
4.7 Prepare a detailed project schedule and phasing of each services to ensure timely
completion of the project in consultation with the Client.

Preparation of DPRs
Tender Drawings
Drawings for civil work for different services (Auto CAD).
Bill of Quantities and specifications for all service drawings.
Working Drawings and other Detail Drawings
Detail storm water management plan with respect to site grading and
contour plan (Auto CAD).
Detail plan at all scales demarcating sensitive areas to be protected
during construction: water bodies, nallah, embankment etc.
Detail service drawings: plans, site sections, part sections, elevations
and edge profiles (Auto CAD).
Deliverables
Detail service corridor drawings co-ordinated with the road network and
landscape drawings (Auto CAD).
Detail service layout drawings for delivering services like electric, water
supply, collection of sewage, storm water, telecommunication and fire
protection system co-ordinated with the land parcel drawings provided by
the Architects appointed by the Client. (Auto CAD).
Cost estimation statement inclusive of finalized material specifications,
Detailed project schedule with Detail phasing plan
Note: The Infrastructure Consultant shall be liable to deliver to the Client 8

hard copy sets and soft copy (in AUTO CAD only wherever prescribed)
for all the above-mentioned items.
CONSTRUCTION [STAGE 5]
Description of Work
5.1 Prepare and issue working drawings and details for proper execution of all service
works during construction.
5.2 Selection/ Design of electrical, water supply and plumbing fittings.
5.3 Approve samples of various elements and components.
5.4 Check and approve shop drawings submitted by the contractor/ vendors.
5.5 Visit the site of work, at intervals mutually agreed upon, to inspect and evaluate the
Construction Works and wherever necessary clarify any decision, offer interpretation of
the drawings/specifications, attend conferences and meetings to ensure that the project
proceeds generally in accordance with the conditions of contract and keep the Client
informed and render advice on actions, if required.
In order to ensure that the work at site proceeds in accordance with the contract
documents/ drawings and to exercise time and quality controls, the day-to-day
supervision will be carried out by a Construction Manager (Clerk of Works/ Site
5.6
Supervisor or Construction Management Agency in case of a large and complex
project), who shall work under the guidance and direction of the Infrastructure
Consultant and shall be appointed and paid by the Client.
5.7 Issue Certificate of Virtual Completion of works.

Preparation of DPRs
Working Drawings and other Detail Drawings

Detail service drawings: plans, sections, elevations and edge profiles (Auto
CAD).
Detail service corridor drawings co-ordinated with the road network and
landscape drawings (Auto CAD).
Detail service layout drawings for delivering services like electric, water
Deliverables supply, collection of sewage, storm water, telecommunication and fire
protection system co-ordinated with the land parcel drawings provided by
the Architects appointed by the Client. (Auto CAD).
Cost estimation statement inclusive of finalized material specifications,
Detailed project schedule with Detail phasing plan.
COMPLETION [STAGE 6]
Prepare and submit completion reports and drawings for the project as required and
6.1 assist the Client in obtaining "Completion/ Occupancy Certificate" from statutory
authorities, wherever required.
Issue two sets of as built drawings including services and structures in strict compliance
6.2
with the instructions received from the Client.
Assistance after Virtual Completion: The Infrastructure Consultant shall provide periodic
assistance for a period of 12 months post completion of the Services in accordance with
6.3
the terms and conditions of this Agreement, as may be deemed necessary by the
Client.
Completion reports and drawings left out in stage 5 (incl. soft copies)
Deliverables
Two sets of as-built service drawings (incl. soft copies)
3. PROFESSIONAL FEE
3.1 The client shall pay to the infrastructure consultant for rendering the above mentioned
services a lump sum fee of
3.2 As per the directive of Ministry of Finance, service tax will levied on the above fees
or any other tax as imposed by the State of Central Government, as applicable
at the time of billing. At present the service tax is @ 10.2%.
4. SCHEDULE OF PAYMENT
The Infrastructure Consultant shall be paid professional fee in the following stages consistent
with the work done
Stages Amount In Lacs (Inr)
On Appointment
Stage:1 Concept Design Stage
Stage:2 Preliminary Design & Drawing
Stage:3 Drawings for Clients/ Statutory Approval
Stage:4 Working Drawing and Tender Stage
Stage:5 Construction Stage (Paid every month in 60 equal
installments)
Stage:6 Completion of Project

Preparation of DPRs
5. REIMBURSABLE EXPENSES
The Client will reimburse the Infrastructure Consultant the following expenses incurred by him
for discharge of his obligations:
5.01. Actual cost of travel (to & fro), boarding & lodging and local transport for any visit
made by his staff to the site or such other place as may be necessary in connection
with the execution of work and in connection with the performance of duties referred
to in this agreement.
6. CLIENT'S ROLE AND RESPONSIBILITIES
The Client shall discharge all his obligations connected with the project and engagement of
the Infrastructure Consultant as follows:
6.01 To provide detailed requirements of the project.

6.02 To provide a site plan, to a suitable scale, showing boundaries, contours at suitable
intervals, existing physical features including any existing roads, paths, trees, existing
structures, existing service and utility lines and such lines to which the proposed
services can be connected. In case such information is not readily available, the
Client shall arrange for the survey/ collection of necessary information and pay for the
same.
6.03 To furnish reports on soil conditions and tests as required by the Infrastructure
Consultant or pay for the preparation of the same.
6.04 To furnish specific conditions/ statutory stipulations/ Codes of Practice/ Schedule of
rates, etc., desired to be followed.
6.05 To pay all the fees, levies, security deposits and expenses in respect of statutory
sanction.
6.06 To appoint a structural consultant to design all the civil, structural work related to
infrastructure services.
6.07 To give effect to the professional advice of the Infrastructure Consultant and cause no
changes in the drawings and documents without the consent of the Infrastructure
Consultant.
6.08 To honor Infrastructure Consultant's bills within one month of its submission.
6.09 To appoint a Construction Manager.
7. EXECUTION OF THE ASSIGNMENT
7.01 The Infrastructure Consultant shall keep the Client informed about the progress of
work in his office.
7.02 The Infrastructure Consultant shall co-ordinate and liaison with the necessary
government authority for obtaining statutory approvals.
7.03 The Infrastructure Consultant shall appoint specialised consultants in consultation
with the Client, if necessary.
7.04 The Infrastructure Consultant will advise the Client on the Time Schedule (Bar
Chart/ PERT/ CPM Network) prepared by the contractors for the completion of work,
if required.
7.05 The Infrastructure Consultant shall supply to the Client, free of cost, the above-
mentioned sets of drawings as part of deliverables for the different design
development stages.
7.06 The Infrastructure Consultant shall not make any deviations, alterations or omissions
from the approved drawings, involving financial implications without prior consent of
the Client.
7.07 Any professional services to be rendered by the Infrastructure Consultant at the
instance of the Client after the agreed project completion period shall be
compensated for on mutually agreed terms.
7.08 The Infrastructure Consultant shall exercise all reasonable skill, care and diligence in
the discharge of his duties and shall exercise such general superintendence and
inspection as may be necessary to ensure that works are being executed in

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accordance with the Conditions of Contract.

7.09 No change shall be made in the approved drawings and specifications at site without
the consent of the Infrastructure Consultant.
7.10 The Infrastructure Consultants scope is limited to design all the services like
electrical, water supply, sewage, recycled water, storm water, street lighting for
external infrastructure work only, excluding the services within each land parcel but to
deliver the required services to the hook up point of each land parcel.
8. TIME SCHEDULE
The Infrastructure Consultant shall, in consultation with the Client, prepare a Time Schedule
in respect of various services to be rendered and discharge of Client's obligations.
9. INDEMNIFICATION
In the event that a claim or suit is brought against the Infrastructure Consultant or the
Consultants by any third party for damages arising from personal injury or property damage
caused wholly by the Client, or anyone employed by the Client, or anyone for whose acts the
Client may be held responsible, then the Client shall indemnify the Infrastructure Consultant
and fully reimburse any loss, damage or expenses, including the attorney's fees, which the
Infrastructure Consultant may incur in connection therewith.
10. FORCE MAJEURE
If the either Party is prevented from performing its obligation under this Agreement from
causes which are beyond its reasonable control, such as, but not limited to, strikes, labour
controversies, fires, Acts of God or elements, embargoes or governmental orders or
restrictions, such affected Party shall be excused for non-performance of its obligation during
the period such cause continues to exist, but if such cause continues to exist and prevents
performance by such affected Party of its obligation for more than six months, the other
unaffected Party shall have the right to forthwith terminate this Agreement effective upon
delivery to the affected Party of written notice of such termination.
11. CONFIDENTIALITY
The Infrastructure Consultant shall not disclose to any third part whatsoever, any matters in
relation to the Services / project under this Agreement or any matter, which may become
disadvantageous to the Clients business or in relation to its directors, employees, agents,
consultants, representatives and other matters which must be handled in a confidential
manner.
12. EMPLOYEES
(i) The Infrastructure Consultant shall be solely responsible for the employment of
individuals for the provisions of the Services in accordance with the terms and
conditions of this Agreement and for discharging all obligations to or in connection
with such employees. The Infrastructure Consultant shall have absolute freedom to
regulate its man-power requirements, their working hours, working days, discipline,
control and supervision, rate and payment of wages, terms of employment, providing
amenities and benefits that may be required under the law for the time being and
from time to time in force.
(ii) It is expressly agreed that all workers, contractors and employees providing the
Services in accordance with the terms and conditions of this Agreement shall always
be the employees of the Infrastructure Consultant and nothing herein shall be
deemed to constitute said workmen and staff as employees of the Client.
(iii) As and when this Agreement expires or is terminated, the employment of all such
workers, contractors and employees as engaged by the Infrastructure Consultant,
their wages, dues and all claims shall be the sole responsibility of the Infrastructure
Consultant. The Infrastructure Consultant shall at all times, hold the Client

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indemnified against any claim whatsoever that may be raised against the Client by
the workers, contractors and employees of the Infrastructure Consultant including on
account of accidents suffered by such workers, contractors and employees in
providing the Services in accordance with the terms and conditions of this
Agreement.
13. OWNERSHIP OF COPYRIGHT
The Infrastructure design is an intellectual property of the Infrastructure Consultant. The

drawings, specifications, documents and models as, instruments of service are the property of
the Infrastructure Consultant whether the project, for which they are made, is executed or not.
The Client shall retain copies of the Infrastructure Consultant's models, drawings,
specifications and other documents for his information and use in connection with the project.
These shall not be used for any other project by the Client or the Infrastructure Consultant or
any other person.
14. TERMINATION OF AGREEMENT
14.1 The Parties hereby agree that the term of this Agreement may be terminated:
(i) Mutually by the Parties, by serving a written notice of 60 days on the other
Party concerned.
(ii) By the Client, if the Infrastructure Consultant is in breach of any of its
obligations contained in this Agreement and the Infrastructure Consultant
fails to remedy such breach within a period of not less than 30 days after
receipt of notification from the Client in this respect, then the Client shall have
the right to forthwith terminate this Agreement.
(iii) By the Infrastructure Consultant by serving a written notice of 30 days on the
Client, only in the event the Client fails to make payment of the fees in
accordance with the terms of this Agreement for a continuous period of three
months.
14.2 In the event of termination of this Agreement in accordance with Clause 14.1, the
Client shall have the right to employ another Infrastructure Consultant to complete the
work, after making payment of the legitimate dues to the Infrastructure Consultant.
15. REPRESENTATIONS AND WARRANTIES
15.1 The Infrastructure Consultant hereby represents and warrants to the Client as follows:
(i) It is duly organised and validly existing under the laws of India, and has full power
and authority to enter into this Agreement and to perform its obligations under this
Agreement; and
(ii) The execution and delivery of this Agreement and the performance by it of its
obligations under this Agreement have been duly and validly authorised by all
necessary corporate actions on the part of it. This Agreement constitutes a legal,
valid and binding obligation of the Infrastructure Consultant enforceable against it in
accordance with its terms.
(iii) The execution, delivery and performance by the Infrastructure Consultant of this
Agreement and the acts and transactions contemplated hereby do not and will not,
with or without the giving of notice or lapse of time or both, violate, conflict with,
require any consent under or result in a breach of or default under:
(a) Applicable law; or
(b) Any order, judgment or decree applicable to it; or
(c) Any term, condition, covenant, undertaking, agreement or other instrument to
which it is a party or by which it is bound;
(iv) there are no legal, quasi-legal, administrative, arbitration, mediation, conciliation or
other proceedings, claims, actions, governmental investigations, orders, judgments or
decrees of any nature made, existing, or pending or, to its best knowledge,
threatened or anticipated, which may prejudicially affect the due performance or
enforceability of this Agreement or any obligation, act, omission or transactions
contemplated hereunder; and
(v) that it will comply with all applicable laws, regulatory requirements, standards,

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guidelines, codes of practice and specifications and instructions issued by the Client,
in connection with the performance of its obligations under this Agreement, and will
not do or permit anything to be done which might cause or otherwise result in a
breach of this Agreement or cause any detriment to the transactions herein
envisaged.
15.2 The Client hereby represents and warrants to the Infrastructure Consultant as follows:
(i) it is duly organised and validly existing under the laws of India, and has full power and
authority to enter into this Agreement and to perform its obligations under this
Agreement; and
(ii) the execution and delivery of this Agreement and the performance by it of its
obligations under this Agreement have been duly and validly authorised by all
necessary corporate actions on the part of it. This Agreement constitutes a legal,
valid and binding obligation of the Client enforceable against it in accordance with its
terms.
16. NOTICES
(i) Any notice pursuant to this Agreement shall be in writing signed by (or by some
person duly authorised by) the person giving it and may be served by leaving it or
sending it by facsimile, prepaid recorded delivery or registered post addressed as
follows (or to such other address as shall have been duly notified in accordance with
this Clause):
If to the Infrastructure Consultant:
The Director If to the Client:
(ii) All notices given in accordance with Sub-Clause (i) shall be deemed to have been
served as follows:
(A) if delivered by hand, at the time of delivery;

(B) if posted, at the expiration of 3 (three) days after the envelope containing the same was
delivered into the custody of the postal authorities; and
(C)if communicated by facsimile, on receipt of confirmation of successful transmission.
17. ARBITRATION
(i) In the event any dispute arises between the Parties out of or in connection with this
Agreement, including the validity thereof, the Parties hereto shall endeavour to settle
such dispute amicably in the first instance. The attempt to bring about an amicable
settlement shall be treated as having failed as soon as one of the Parties hereto, after
reasonable attempts, which shall continue for not less than 15 days, gives a notice to
this effect, to the other party in writing.
(ii) In case of such failure, the dispute shall be referred to a sole Arbitrator, who shall be
mutually appointed by the Parties. The Arbitration proceedings shall be governed by
the Arbitration and Conciliation Act, 1996 and shall be held in Kolkata.
(iii) The Parties submit to the jurisdiction of the courts at Kolkata.
18. MISCELLANEOUS
(i) This Agreement constitutes the entire agreement between the Parties and
supersedes any previous agreements between the Parties whether oral or in writing
regarding the subject matter hereof.
(ii) Nothing in this Agreement shall be deemed to constitute a partnership between the
Parties or constitute any party the agent of any other party for any purpose or entitle
any party to commit or bind any other party in any manner or give rise to fiduciary

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duties by one party in favour of any other.

(iii) This Agreement may be amended only by an instrument in writing signed by each
party to this Agreement.
(iv) If any provision embodied in this Agreement appears to be legally invalid or null, the
Parties will replace such provision, considering the nature and contents of this
Agreement, the way consensus is reached, the mutually known interests of both
Parties as well as the other relevant circumstances, by a provision which is not
unreasonably onerous to any party and approximates the meaning of the legally
invalid provision as closely as possible.
(v) The failure on the part of one party to exercise or enforce any rights resulting from
this Agreement shall not be a waiver of any such rights, nor shall any single or partial
exercise thereof operate so as to bar the later exercise or enforcement thereof.
(vi) This Agreement may be entered into in two or more counterparts each of which,
when executed and delivered, shall be an original, but all the counterparts shall
together constitute one and the same instrument.

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Annex II:
Selection of Consultants
During selecting process for selecting consultants the local authorities should
keep following things in mind:
Importance of the project for the local authority

Scale of the project
Quantum of work
Time available for the process to select consultants
Based on the above criteria following are the methods available for the selection
process:
Single-source selection
Selection from a list of pre-qualified consultants
Selection by Request for Qualification (RFQ)
Selection by Request for proposals (RFP)
Selection by combination of RFQ and RFP
Single-source selection
In this process the local authority selects a single consultant directly without any
process. Normally all local governments do not have the flexibility to use this
method of selection process. For a legal and political safety reasons, the local
authority using this method should document its reasons for doing so. Where a
local government has the flexibility to use such a selection process, it is
appropriate to do so under the following circumstances:
When a consultant, have a significant credentials and experience of working with

the same local authority in a similar nature of the project and successfully
completed work in short period of time or on a very limited budget
If a situation demands to have a local consultant, and there is only one who is
qualified
If the community requires the services of a consultant with a unique specialty
If there is not sufficient time to go through a formal selection process
There is an option in this method, if the consultant is awarded a project after a

competitive process a similar kind of work can be allotted to the same consultant
using an amendment to the earlier contract to retain the consultants services for
later stages of the project or a related project.
Selection from a List of Pre-qualified Candidates
This process is mainly suitable for selecting consultants for the small projects and
projects normally have standard methodology and processes. This process usually
involves the following steps:
Identification of consultant: The client should identify a small group of qualified

consultants (three to five) working in the similar field with similar kind of

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experience. This step needs enough research and knowledge about the project
and consultants working in the similar projects.
Invitation to the consultants: The selected consultants should be invited to

ascertain their availability and interest in the proposed project. Also consultants
should be called for an interview and submission of qualifications, approach and
methodology for the proposed project.
Selection of the consultant: The local authority should select one consultant
based on the selection criteria like overall experience, time available,
understanding of project objectives, relevance of education and experience of
probable staff, creativity exhibited by the consultant for the proposed project,
clarity and usefulness of the proposed methods and techniques, appropriateness
of this proposed project management structure, and the consultants familiarity
with the community.
Work plan/Costing: After selecting a consultant, the local authority should ask
for detailed work plan and cost information from the consultant.
Negotiations: Based on the work plan and cost information a contract between
the planning agency and the consultant should be negotiated.
Expression of interest (pre qualification)
A notice with detailed description of tasks to be performed, technical skill and

infrastructure desired and approximate area and location for which the Town
Planning scheme is to be prepared should be published in the local newspaper to
invite consultants for pre qualification stage.
Short listing consultants
Based on the pre-decided selection criteria the consultants should be ranked and
consultants getting marks more than the minimum marks desired by ULB should
be called for the next stage. The criteria like professional experience, experience
in the field of town planning scheme, no. of T. P. Schemes done, professional
expertise (e.g. urban planners, architects, engineers, survey staff available with
the firm), office infrastructure (e.g. computers, plotters, printers, software, total
station machines with the firm) should be considered while evaluation.
Terms of References for the selected consultants
A detailed Terms of Reference should be given to all pre-qualified consultants to

submit the financial and technical proposal for the next stage.
A detailed Term of reference should contain:
Brief description about the task
Scope of work - Stages like survey (survey specifications), mean levels, DILR
certification, CTP consultation, preparation of conceptual plan, preparation of
draft town planning scheme up to owners meeting, publication of the scheme,
submission to the state government and demarcation of roads and final plots
Time duration, schedule of payment time duration to perform each stage and
schedule of payment corresponding to each stage and deliverables

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Deliverables at each stage all documents and drawings to be delivered by the

consultant at each stage should be clearly given with the formats.
Proposal submission process (two envelop - technical and financial)
The method and criteria for evaluation should be clearly defined in the TOR and
weightage for the technical and financial proposals (e.g. 70%-30% or 60%-40%
or 50%-50% for technical - financial proposal) should be clearly mentioned based
on the minimum quality desired and financial status and funds available with the
local body for the project.
Evaluation of the technical bids
The evaluation committee should be appointed by the Client and each of its
members should individually evaluate all proposals on the basis of consultants
responsiveness to the Terms of Reference, applying the evaluation criteria, sub
criteria [(e.g. experience in preparing town planning scheme, no. of town
planning schemes done (up to publication stage), professional expertise (e.g.
urban planners, architects, engineers and survey staff), infrastructure (e.g.
computers, software, office space, plotters, total station machines), adequacy of
the proposed work plan and methodology in responding to the TOR (proposed
work plan and over all professional time)]. Marks should be given to the main and
sub criteria. Each responsive proposal should be given a technical score (St). A
proposal should be rejected at this stage if it does not respond to important
aspects of the Terms of Reference or if it fails to achieve the minimum technical
score set by the Urban Local Body to qualify for the next stage.
Short listing technically qualified consultants
All the consultants getting scores more than the minimum cutoff scores set by the
ULB should be selected for the next stage of financial evaluation.
Evaluation of financial bids
After evaluation of quality is completed, the Client should notify those consultants
whose proposals did not meet the minimum qualifying mark or considered non-
responsive to the Request for Proposal and Terms of Reference, their Financial
Proposals should be returned unopened after completing the selection process.
The Client should simultaneously notify the consultants that have secured the
minimum qualifying mark, indicating the date and time set for opening the
Financial Proposals. Financial bids should be opened in the presence of the
authorized representatives of all short listed consultants. The name of the
consultant, the quality scores, and the proposed prices should be read aloud and
recorded when the Financial Proposals are opened. The client should prepare
minutes of the public opening. The evaluation committee should determine
whether the Financial Proposals are complete, (i.e., whether they have cost all
items of the corresponding Technical Proposals, if not, the Client should cost them
and add to the initial price), any computational errors, and convert prices in
various currencies to the single currency specified.
Final selection of the consultant
The lowest Financial Proposal (Fm) should be given a financial score (SO of 100
points. The financial scores (Sf) of the other Financial Proposals should be
computed. Proposals should be ranked according to their combined technical (St)
and financial (Sf) scores using the weights (T = the weight given to the

Preparation of DPRs
Technical Proposal; P = the weight given to the Financial Proposal; T + P = 1) 5

= St x T% + Sf x P%. The firm achieving the highest combined technical /
financial score should be invited for negotiations.
Negotiations
Negotiations aims at reaching an agreement on all points and signing of

contracts. The contract should be awarded following the negotiations. After
negotiations are completed, the Client should promptly notify other consultants
on the shortlist that they were unsuccessful and return the Financial Proposals of
those consultants who did not pass the technical evaluation.
Agreement with the consultant
After negotiations with the consultants the urban local body and the consultant
should be enter in to formal agreement containing all the terms of reference and
terms, schedule of payments, penalty clauses, deliverables, time frame and other
important issues essential for the success of the project.
Issuing guidelines to the consultants
After making agreement with the consultant the client should give detailed
guidelines to the consultant. The detailed guidelines should contain:
Objectives, strategies and policies for particular scheme
Objectives for preparing particular scheme (e.g. for new development, heritage
and conservation, redevelopment or densification of the area, infrastructure
provision)
Deduction policy
Based on the requirement of land for provision of social and physical

infrastructure, policy for deducting land from private owned land should be
decided. Factors influencing the deduction policy are, existing and proposed roads
in the development plan (master plan), percentage developed (built) area, size of
the private plots within the scheme area, available Government land in the
scheme area and objectives of the scheme.
Graded deduction policy also can be suggested based on size of original plot (e.g.
for plot area 0-lOOm2 deduction @10%, for plot area 101-500 m2deduction
@20% and so on)
Minimum size of plots
Minimum size of final plot to be given should be decided by the urban local body
and clearly mentioned in the guideline.

Preparation of DPRs
Roads
Road network and road hierarchy considering Development Plan roads and
growth envisaged should be given to the consultant.
Location of plots for public utility
Location of plots for public utility and for sale by the Urban Local Body so that it
can generate maximum revenue to the ULB for the provision of infrastructure in
the scheme area.
Other urban design guidelines
FSI
Ground coverage
Margins
Building height
Activity and Time schedule
A detailed activity and time frame for each activity should be clearly mentioned in
the guidelines for proper monitoring and timely completion of the project.
Monitoring mechanism
A clear stage wise monitoring schedule and roles and responsibilities of the
monitoring agency should be mentioned in the guidelines to avoid conflicts and
duplication of work.
Quality norms
Quality norms for all the activities and deliverables for all the stages should be
clearly mentioned in the guidelines.
Communication Systems
Means and time schedule for communication e.g. progress report for every 15
days or meeting /discussion on specific day every month to discuss progress and
problems should be mentioned in the guidelines to avoid communication gaps
between client, consultant and other departments.
Submission schedule
Submission and deliverable schedule, keeping in mind all the legal stages of the
Town Planning Scheme as per the Act should be given in the guidelines.

Preparation of DPRs
References
Construction Scheduling with Primavera Project Planner by Leslie Feignbaum
Publisher: Prentice Hall
Managing with Microsoft Project by Lisa A. Bucki, Gary Chefetz Publisher:
Premier Press
Microsoft Project Bible by Elaine Marmel Publisher: Wiley Publishing, Inc
Microsoft Project for Dummies by Nancy Stevenson Publisher: Hungry Minds,
Inc
Step by Step Microsoft Project version 2002 by Carl Chatfield, Tomothy
Johnson Publisher: Microsoft Press
Construction scheduling with Primavera enterprise 1.2 by David A. Marchman
Trouble Shooting Microsoft Project by Bonnie Biatore
Microsoft Project inside Out by Teresa S. Stover
Special edition using Microsoft Project by Tim Pyron
Construction Scheduling with Primavera Project Planner by David A.
Marchman / Delmar Leaviy
Project Management Handbook by Uddesh Kohli & K K Chitkara Publisher:
Tata McGraw-Hill
Project Management by Jack R. Meredith & Samuel J. Mantel,Jr. Publisher:
Wiley India
Project Management by Clifford F.Gray & Erik W. Larson Publisher: Tata
McGraw-Hill
Project Management for Business & Technology by John M. Nicholas Publisher:
Eastern Economy Edition
PROJECTS by Prasanna Chandra Publisher: Tata McGraw-Hill
Project Planning And Control by Prof. N.P. Agarwal / Dr. B.K. Mishra Publisher:
Indus Valley Publications
A Management Guide To PERT/CPM by Jerome D. Wiest / Ferdinand K. Levy
Publisher: Eastern Economy Edition
Information Technology Project Management by KATHY SCHWALBE Publisher:
Thomson Course Technology
Information Technology Project Management by S,A,Kelkar Publisher: Eastern
Economy Edition
Microsoft project 2003 software

Preparation of DPRs

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Module 2.

2.0 Network Analysis ............................................................................. 10

3.0 PDM Network ................................................................................... 19

4.0 Resource Management ..................................................................... 22

5.0 Project Time Management................................................................ 26

6.0 Earned Values .................................................................................. 31

7.0 Project Scheduling through Software ............................................... 34

8.0 Bid Process Management ................................................................. 51

Annexure I: Sample Format for MOU

1.1 Project Life Cycle

Diverse project management tools and methodologies prevail in the different

1.1.1 The Project Initiation Phase

A Project Feasibility Document

This identifies project constraints, alternatives and related assumptions applied to

Business Problem Description.

B Development of Project Concept Document

C Creation of Project Charter

1.1.2 The Project Planning Phase

A purpose of the Project Planning Phase

B The basic processes of the Project Planning Phase are:

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1.1.3 Execution and Controlling

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1.2 Project Planning and Scheduling

When preparing a schedule estimate, consider that transition between activities

Activities involved in the DPR

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Project Idea Pre-feasibility

Project Life Cycle

Review of the Preparation of

1.3 Bar Chart Gantt Schedule

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Each activity or event on the schedule should have a responsible individual

Activity- An activity is a part of the project denoted by an arrow on the

Table 1.1: Activities for a project with duration

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Table 1.3: Bar Chart of a project progress

In any government organization the progress of the project is being explained be

1.4 Work Breakdown Structure

As a very simple example, above project activities can be done as Work

In planning a project, it is normal to find oneself momentarily overwhelmed and

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Project Preparation Sanctioning Implementation

Project Preparation of Sanctioning Implementation

Chart 1: Sample WBS Structure

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Table 1.4: Detailed Activity Schedule of Water Supply Project

Table 1.5: Scheduling for Water Supply Project

Details 2005 2006 2007 2008

ESR & GSR at ward No.6

ESR & GSR at ward No.17

GSR & Rising main at

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2.0 Network Analysis

2.1 Network Techniques

To achieve the objectives of project management network techniques is widely

2.2 Evolution of Network Techniques

2.3 Types of Network

1. AOA Network: Activity on Arrow Network

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2.3.1 AOA Network

Above diagram represents a project with three activities A, B, C

2.3.2 Rules for AOA Network