ASIAN DEVELOPMENT BANK
CONTRACT
MANAGEMENT
GUIDANCE NOTE ON PROCUREMENT
DECEMBER
ASIAN DEVELOPMENT BANK
CONTRACT
MANAGEMENT
GUIDANCE NOTE ON PROCUREMENT
DECEMBER
Creative Commons Attribution-NonCommercial-NoDerivs .
IGO license (CC BY-NC-ND . IGO)
© Asian Development Bank
ADB Avenue, Mandaluyong City, Metro Manila, Philippines
Tel ; Fax
www.adb.org
Some rights reserved. Published in .
ISBN ---- (print); ---- (electronic)
Publication Stock No. TIM-
DOI: http://dx.doi.org/./TIM-
The views expressed in this publication are those of the authors and do not necessarily reflect
the views and policies of the Asian Development Bank (ADB) or its Board of Governors or
the governments they represent.
ADB does not guarantee the accuracy of the data included in this publication and accepts no
responsibility for any consequence of their use. The mention of specific companies or products
of manufacturers does notimply that they are endorsed or recommended by ADB in preference
to others of a similar nature that arenot mentioned.
By making any designation of or reference to a particular territory or geographic area, or by using
the term “country” in this document, ADB does not intend to make any judgments as to the legal
or other status of any territory or area.
This work is available under the Creative Commons Attribution-NonCommercial-NoDerivs .
IGO license (CC BY-NC-ND . IGO) http://creativecommons.org/licenses/by-nc-nd/./igo/.
By using the content ofthis publication, you agree to be bound by the terms of this license.
For attribution and permissions, pleaseread the provisions and terms of use at
https://www.adb.org/terms-useopenaccess.
This CC license does not apply to non-ADB copyright materials in this publication. If the material
is attributed to another source, please contact the copyright owner or publisher of that source
for permission to reproduce it. ADB cannot be held liable for any claims that arise as a result
of your use of the material.
Please contact pubsmarketing@adb.org if you have questions or comments with respect to
content, orifyouwish to obtain copyright permission for your intended use that does not fall
within these terms, orfor permission to use the ADB logo.
Corrigenda to ADB publications may be found at http://www.adb.org/publications/corrigenda.
Note:
In this publication, “” refers to United States dollars.
Printed on recycled paper
CONTENTS
About this Publication iv
Abbreviations vii
Executive Summary viii
I. Introduction
II. Objective and Benefits of Contract Management
III. The Contract Management Process
IV. Reporting to and Requesting No-Objection from ADB
V. Resources for Further Review
Appendixes
: Typical Contract Management Issues
: Example of A Risk Management Plan
: Manual on ContractManagement
: Example of Application oftheContract Management Plan
iv
List of Guidance Notes for the ADB Procurement
Policy and the Procurement Regulations
1. Value for Money
2. Procurement Risk Framework
3. Strategic Procurement Planning
4. Procurement Review
5. Alternative Procurement Arrangements
6. Open Competitive Bidding
7. Price Adjustment
8. Abnormally Low Bids
9. Domestic Preference
10. Prequalification
11. Subcontracting
12. Consulting Services Administered
byADB Borrowers
13. Nonconsulting Services Administered
by ADB Borrowers
14. High-Level Technology
15. Quality
16. Bidding-Related Complaints
17. Noncompliance in Procurement
18. Standstill Period
19. State-Owned Enterprises
20. E-Procurement
21. Framework Agreements for Consulting
Services
22. Public–Private Partnerships
23. Contract Management
24. Fragile, Conflict-Affected, andEmergency
Situations
25. Sustainable Public Procurement
26. Use of Merit Point Criteria for Bid Evaluation
ABOUT THIS PUBLICATION
In April , the Asian Development Bank (ADB) approved its new procurement
framework, the ADB Procurement Policy: Goods, Works, Nonconsulting and
Consulting Services (, as amended from time to time); and the Procurement
Regulations for ADB Borrowers: Goods, Works, Nonconsulting and Consulting
Services (, as amended from time to time). These replace the former Guidelines
on the Use of Consultants (, as amended from time to time) and Procurement
Guidelines (, as amended from time to time). The procurement policy and the
procurement regulations address the procurement activities of project executing
agencies and implementing agencies on projects financed in whole or in part by a
loan or grant from ADB, or by ADB-administered funds. ADB designed the
procurement policy to deliver significant benefits and flexibility throughout the
project procurement cycle, as well as to improve project delivery through a renewed
focus on the concepts of quality, value for money (VFM), and fitness for purpose.
This note is part of a series of guidance notes published by ADB in to
accompany the procurement policy and the procurement regulations.
Eachnote discusses a topical issue for borrowers (including grant recipients),
bidders, and civil society under the new framework (see list below). The guidance
notes cross reference each other frequently and should be read in conjunction.
Allreferences to “guidance notes” pertain to these notes. The notes may be
updated, replaced, or withdrawn from time to time.
About this Publication v
ADB procurement reforms intend to ensure VFM by improving flexibility, quality,
and eciency throughout the procurement cycle (see illustration below and the
Guidance Note on Value for Money). VFM is part of a holistic procurement structure
with three support pillars: eciency, quality, and flexibility. The two key principles of
transparency and fairness weave across all elements of the structure.
Time
Time is an important element of VFM. When a project is delivered promptly or when a
process is completed rapidly, greater value is created for all stakeholders. For example, a
road project completed early provides economic benefit, security, or other value to the
community it serves. It increases the return on investment to the executing agency and
accelerates the project and payment cycle to the successful bidder. Likewise, a project
delivered late loses significant value.
When considering VFM in the context of procurement, pay attention to anything
that (i)shortens the procurement cycle timeframe, or (ii) accelerates delivery of the
development project.
T
r
a
n
s
p
a
r
e
n
c
y
Value for Money
The effective, efficient, and economic use of resources, which
requires an evaluation of relevant costs and benefits along with an
assessment of risks, nonprice attributes, and/or total cost of ownership
as appropriate
Efficiency Quality Flexibility
• Decreased transaction
costs
• Increased skills
• Increased high-level
technology usage
• Improved
procurement planning
• Support and
encouragement
of e-procurement
systems
• Contract management
support
• Prompt resolution of
complaints
• Improved developing
member country
procurement process
• Improved
procurement planning
• Governance
• Contracts with clear
performance criteria
• Minimal number of
complaints
• Improved ADB
processes
• Open competitive
bidding
• Decentralization
• Accreditation
for alternative
procurement
arrangements
• Principles-based
decisions
• Improved
procurement planning
• Delegation
• Bids with weighted
proposal
criteria
F
a
i
r
n
e
s
s
About this Publicationvi
Objective
This guidance note is intended to assist readers by elaborating on and explaining
ADB’s 2017procurement policy and procurement regulations for borrowers
(including grantrecipients).
This note identifies additional information for the reader to consider when applying ADB’s
procurement policy and procurement regulations to their circumstances.
Living Document
This guidance note is intended to be a living document and will be revised as required.
Be sure to check the ADB Business Center website for the latest version and updates,
https://www.adb.org/business/main.
The Reader
In many circumstances, readers are expected to use this guidance note in a manner unique
to their needs. For consistency throughout the suite of guidance notes, the following
assumption is made about the reader:
The reader is a professional involved in activities financed in whole or in part by an ADB loan
or grant, or by ADB-administered funds.
FAQs
Frequently asked questions, clarifications, examples, additional information, links to training,
and other useful resources will be made available on the ADB website.
Be sure to check the ADB Business Center website for more information,
https://www.adb.org/business/main.
Legal and Order of Priority
This guidance note explains and elaborates on the provisions of the Procurement
Regulations for ADB Borrowers: Goods, Works, Nonconsulting and Consulting Services
(2017, as amended from time to time) applicable to executing (and implementing) agencies
under sovereign (including subsovereign) projects financed in whole or in part by an
investment loan from ADB (i.e., excluding ADB results- or policy-based loans),
ADB-financed grant (excluding ADB-administered technical assistance and staff
consultancies), or by ADB-administered funds.
In the event of any discrepancy between this guidance note and the procurement
regulations, the latter will prevail. The financing agreement governs the legal relationships
between the borrower and ADB. The rights and obligations between the borrower and the
provider of goods, works, or services are governed by the specific procurement document
issued by the borrower and by the contract signed between the borrower and the provider,
and not by this guidance note.
vii
ABBREVIATIONS
ADB — Asian Development Bank
APG — advance payment guarantee
CCP — community communication plan
CEMP — contractor’s environment management plan
CMP — contract management plan
CSPRA — country sector (agency) procurement risk assessment
DNP — defect notification period
EOT — extension of time
EMP — environment management plan
ENAA — Engineering Advancement Association of Japan
FIDIC — Fédération Internationale des Ingénieurs-Conseils
(International Federation of Consulting Engineers)
GCC — General Conditions of Contract
ESHS — environment, social, and health and safety
LARP — Land Acquisition and Resettlement Plan
LOA — Letter of Acceptance
MDB — multilateral development bank
PCC — Particular Conditions of Contract
PIU — project implementation unit
PMC — project management consultant
PMU — project management unit
PMO — project management oce
PPFD — Procurement, Portfolio and Financial Management Department
PPRA — project procurement risk assessment
RMG — Retention Money Guarantee
SPP — Strategic Procurement Planning
VFM — value for money
viii
EXECUTIVE SUMMARY
This Guidance Note on Contract Management explains the basic principles of
contract management and proposes a structured and step-by-step approach to
implement it. Recognizing the need to deliver value for money, the guidance note
emphasizes demonstrating the benefits of good contract management and how it
may be applied in operations financed by the Asian Development Bank (ADB).
How will this guidance note help the user?
Increase Eciency and Reduce Procurement Time
• Preparing, from the onset, a contract management strategy and mobilizing
the relevant resources for it.
• Supporting ongoing monitoring of the contractor’s performance.
• Operating a robust contract administration system, including maintaining a
robust record management system.
Reduce Risk
• Anticipating what could go wrong, e.g., payment delays, right of access to
site.
• Putting in place mitigation measures to address any identified risks.
• Managing the closure of the project, ensuring that no pending issues or
obligations remain unaddressed.
Deliver Value for Money
• Through the contractor meeting requirements of the project.
• Completing the project on time or earlier.
• Complying with applicable legislation.
I.Introduction
. The ADB procurement regulations recognize that one factor
contributing to achieving value for money (VFM) is eective contract
management. Contract management ensures that supplier, contractor, and/or
consultant deliverables are met as agreed under the contract.
. Contract management is the monitoring and control of contractor
performance to ensure optimal outcomes from a contract. It includes preparing
fit for purpose tools (mainly the Contract Management Plan), mobilizing relevant
human resources, monitoring progress toward delivery of contract deliverables,
managing payments, controlling variations, measuring contractor performance, and
closing out the contract.
. This guidance note provides operational level guidance for borrowers,
through their executing and implementing agencies, on how contract management
should be applied in ADB-financed projects involving the procurement of goods,
works, and services.
. This guidance note assists users with contract management in the
procurement cycle as shown in Figure . The activities relating to the borrower’s
contract management are determined by decisions taken at the strategic
procurement planning stage and will later be implemented from contract award to
contract closure, to ensure that contract obligations are met and deliver VFM.
. Appendix , the Manual on Contract Management, provides further
guidance at the operational level and is meant to be used hand in hand with
this guidance note. More particularly, the manual explains how executing and
implementing agencies can develop a proper CMP and how it can be used as an
operational tool to monitor the contractor or supplier’s performance—in other
words, to “manage the contract.” The manual is also expected to provide guidance
on a set of relevant indicators (contract dashboard) to be maintained at all times
throughout the life of each contract. This will allow the executing and implementing
agencies to take necessary measures to keep their projects on track.
Borrowers, through their executing agencies, and any other party to a financing agreement shall
always act in accordance with the highest standard of ethics during any procurement process
(including contract management) subject to the procurement regulations and any use of funds,
resources, assets, and authority by such parties shall be in accordance with ADB’s Anticorruption
Guidelines and Integrity Principles and Guidelines (both as amended from time to time).
Contract Management
. Figure illustrates when the various contract management activities take
place throughout the project cycle.
. This guidance note applies to contracts financed in whole or in part by ADB
loan or grant, or by ADB-administered funds, for the procurement of goods, works, or
services, including consulting services, to which the procurement regulations apply.
In this guidance note, the term “Contractor” will be used to collectively designate a works
contractor, a supplier of goods, a consultant or other service provider. The terms “borrower” and
“employer” are used interchangeably.
Figure : Contract Management within the ADB Procurement Cycle
Source: Asian Development Bank.
PROCUREMENT
CYCLE
F
a
i
r
n
e
s
s
V
a
l
u
e
f
o
r
M
o
n
e
y
Q
u
a
l
i
t
y
E
c
i
e
n
c
y
E
c
o
n
o
m
y
T
r
a
n
s
p
a
r
e
n
c
y
Project Conceptualization
Procurement Planning
Procurement Plan,
Project Procurement Risk
Assessment Rating,
Project Administration Manual
Transaction Technical Assistance,
Project Procurement
Risk Classification
Bidding Documents
Contract Award
Contract Management Plan
Feedback or Evaluation
Implementation and
Contract Management
Project Completion Report
Contract Close
Lessons Learned
Country Partnership
Strategy
Country and Sector/Agency
Procurement Risk Assessment
Bid Evaluation
Evaluation Reports
Bidding
Contract management
Introduction
Figure : Summary of Contract Management Activities Throughout
the Project Cycle
Source: Asian Development Bank.
Project Cycle
Phases
Strategic
Procurement Planning
Contract Management
Activities
1. Create/updater risk register
2. Define contract strategy, including
(choice of specification, pricing and
contract form).
3. Calibrate and set up the contract
management team
1. Prepare the CMP
2. Ensure that any Contractor
requirements relating to CMP are
included in the bidding document
3. Ensure that Site Supervision
Consultant TOR includes scope
relating to CMP
1. Borrower receives and analyzes the
monthly report
2. Borrower takes relevant corrective
measures (as needed) to keep
(or put back) project on track
During the 6 monthly project
review, the last 3 Monthly Reports
should be used to compare the
actual site conditions to the reports.
Borrowers submits CMP for
approval by ADB's before
contract award
Bidding
Bid Evaluation and
Contract Award
Contract
Implementation
Feedback or
Evaluation
II.Objective and Benefits
of Contract Management
A. Objective of Contract Management
. The aim of contract management is to ensure that all parties meet their
contractual obligations under each awarded contract financed in whole or in part
by ADB, or by ADB-administered funds. In order for this to be achieved, borrowers
must plan properly and deploy the right resources, tools, and techniques ensure this
is achieved.
B. Benefits of Contract Management
. Figure summarizes the benefits of good contract management.
Figure : Benefits of Good Contract Management
Source: Asian Development Bank.
Supplier Meets
Requirements
Environmental
and Social
Benefits
Value for
Money
Legislative
Compliance
Reputation
Health
and Safety
Probity
Lower Risks
Objective and Benefits of Contract Management
. Each of these benefits will impact on VFM, for two reasons:
(i) Contract management increases the likelihood that the contractor
will meet the project requirements, helping to realize the VFM
available at the time of contract award.
(ii) Contract management lowers risk in contract implementation,
improving the probability that the expected VFM will be achieved.
. In addition, more ecient and eective contract management promotes
increased and more timely loan disbursements. Conversely, poor contract
management can compromise portfolio performance and delay intended
development results. Appendix gives a list of typical contract management issues.
III.The Contract Management Process
. Figure describes the contract management process from the perspective
of the borrower, which comprises three stages: precontract award, contract
administration, and contract closure.
Contract “implementation” describes the
contractor’s work within the contract and occurs concurrently with the borrower’s
stage of contract administration (i.e., the borrower administers the contract while
the contractor implements it).
The terms “contract management” and “contract administration” are sometimes
interchangeably used in the literature on management topics. To avoid ambiguity, in this
guidance note, contract management is used as encompassing all stages and activities aiming at
the overall goal of ensuring optimal contract outcomes. Contract administration designates one
stage of those activities focusing on the day-to-day interactions with the contractor as required
under the contract.
Figure : The Borrower’s Contract Management Process
1. Develop risk assessment 1. Record management 1. Contract close-out
2. Post contract review
3. Filing contract records
2. Performance
management
5. Claim and dispute
management
3. Managing payment
4. Managing changes
2. Develop contract
management strategy
3. Develop contract
management plan
Precontract Award
A
B C
Contract
Administration
Contract Closure
Reporting to ADB
Source: Asian Development Bank.
The Contract Management Process
. These stages for the borrower follow a logical flow: the precontract award
stage is the design phase of contract management during which the strategy is defined;
the contract administration stage consists mainly in implementing this strategy by
performing a number of monitoring and control activities in interaction with the
contractor, starting from contract award; and the contract closure phase aims at
properly “exiting” the contract and drawing lessons for future projects. Each of these
stages is described below.
A. Pre-Contract Award
. Contract management needs to be considered early in the procurement
process for it to be eective. Its starting point lies in Strategic Procurement Planning
stage which should be formulated early on between the project conceptualization
and project preparation stages.
. Pre-contract award activities should include a risk assessment which will
translate, at contract level, some of the risks which were primarily identified at the
Country Partnership Strategy (CPS) stage through the Country/Sector Procurement
Risk Assessment (CSPRA) and later on, at the project conceptualization and
preparation phase through the Project Procurement Risk Assessment (PPRA)
,
which itself feeds into the risk assessment that is part of the strategic procurement
planning. Such risk assessment will lay the foundation of a contract strategy.
. The contract strategy will then inform the contract management plan
(CMP) which will define activities and responsibilities to monitor the contractor’s
performance during contract implementation until contract closure. The CMP
shall be developed by the borrower at the time of preparation of the bidding
document. It shall subsequently be submitted to ADB for endorsement prior to
contract signature. It is a key tool of contract management which, during contract
implementation, should be updated on a monthly basis and be used to capture and
monitor all necessary information on physical progress, technical issues, financial
management, time management and other relevant aspects.
. Many of these activities require the contractor and the borrower to
perform certain assigned tasks. Some of these tasks may have a cost implication to
the contractor and/or borrower, and many will need to be specified in the contract
to ensure that the responsibility is a contractual obligation. Therefore, contract
management arrangements need to be considered at the time of development of
the proposed contract to inform bidders of contractor’s obligations and costs.
. Develop Risk Assessment
. To develop the contract and to prepare for its implementation, a risk
assessment should be conducted at an early stage of the procurement process
Further information on the general approach to risk management can be found in the Guidance
Note on Procurement Risk Framework. https://www.adb.org/sites/default/files/procurement-risk-
framework.pdf.
Contract Management
in the framework of the strategic procurement planning (SPP) stage, and more
particularly as part of the project procurement risk assessment (PPRA).
(i) Contract Risk Allocation
. The first aspect of the risk assessment is to define a contract risk
allocation. This involves determining the best risk allocation between the borrower
and the contractor.
The principle guiding this analysis should be that the party
in the best position to control and to manage the identified risk should bear
responsibility for that risk under the contract. A party being allocated a risk should
take all necessary preventive, mitigating, or corrective measures as deemed fit to
manage that risk, with the understanding that should the risk eventuate, this party
shall bear the financial consequences thereof (Box ).
. This contract risk allocation should be based on a technical analysis and
a proper market analysis. Borrowers should, however, resist the temptation to
“dump” all (or most) allocated risks to the contractor. An unfair or unbalanced risk
allocation is likely to discourage competition, drive prices up, and lay the ground
for disputes during contract implementation—all circumstances being prejudicial
to obtaining VFM.
. Risk allocation should subsequently be reflected in the draft contract so
that bidders are able to reflect the cost of their risk in their quoted price.
(ii) Risk Management Plan
. The second aspect of the risk assessment is intended to address the risks.
For the identified employer’s risks (e.g., delays in granting the contractor right of
This analysis may be fed by “high level” risks at country or sector level that are identified during
the project preparation phase (see the Guidance Note on Strategic Procurement Planning).
Box
Example of Contract Risk Allocation
The risks associated with the design of a complex water treatment plant, and
particularly the risk that the plant, once completed, be unfit for its intended purpose,
can be transferred to the contractor through the use of a design and build contract,
where the contractor holds ultimate responsibility for the design of the works based
on the employer’s requirements (preferably expressed in the form of performance
specifications). Under such contract, no specific design will be prescribed; instead,
thecontract will stipulate a set of performance specifications that are to be achieved
by the facility (e.g. maximum energy consumption, maximum chemicals consumption,
plant production in m
3
/day, chemical contents, noise and odor levels, etc.). It will be
contractor’s responsibility to select the design most suited to meet these specifications,
to develop it and later to implement the works accordingly so that so that performance
of the facility conforms to the prescribed targets. This type of contract usually provides
for performance damages to which the contractor will be liable in case the prescribed
specifications are not met.
Source: Asian Development Bank.
The Contract Management Process
Box
Example of Employer’s Risk Management
In some countries, it is a requirement that a state-specialized body approve detailed designs
before any work is carried out. This issue may be of particular importance in a design and
build contract, since untimely approval is likely to delay the works and give rise to a claim by
the contractor. The borrower will thus have to determine a way to “manage” such risk, which
could for instance involve the appointment of an officer dedicated to follow-up the approval
process in liaison with the contractor and the state-specialized body.
Source: Asian Development Bank.
access to the site, payment delays, etc.), an action plan needs to be prepared for their
mitigation (Box ). For each risk identified, the action plan should define, for each risk
identified, preventive, mitigating, or corrective measures, and the party responsible
for implementing these measures along with a time frame. The borrower should be
aware of the contractor’s risks, even if he bears no responsibility towards such risks,
and monitor their potential impact on the project.
. The consolidation of all such identified risks, including the associated
action plan, is usually referred to as the risk management plan (or contract
risk register). Itshould be managed throughout the contract implementation
period and updated as known risks change and new risks are identified. The risk
management plan is one component of the contract management plan.
. An example of a risk management plan is shown in Appendix .
. Develop the Contract Management Strategy
. The contract management strategy is the approach to be adopted to
enable the proper management of the contractor performance during contract
implementation. This involves:
(i) Calibrating the relevant resources needed to conduct contract
administration activities and to manage the risk management plan
(ii) Defining how the borrower and the contractor will communicate
during contract implementation (electronic communication tools,
meetings, performance monitoring and reporting, etc.).
. Similarly to the risk assessment referred to above, the assessment of the
necessary human resources will be addressed during the strategic procurement
planning (SPP) stage, and more particularly as part of the project procurement risk
assessment (PPRA).
(i) Calibrating Resources
. The borrower shall put in place a contract management team of the right
size and composition. This team may consist of a Project Management Unit (PMU)
or Project Implementation Unit (PIU) internal to the Implementation Agency. This
aspect is sometimes underestimated, with too much reliance on the works supervision
Contract Management
team on site. The size and composition of the borrower’s contract management
team should be commensurate to the scale and complexity of the project involved.
For example, an ordinary supply contract will not require the same resources as that
of a large-scale construction contract. The team should include skills in the relevant
technical field, contract management, and document administration (all the above
may be limited to one person for a small and/or simple project).
. According to its available resources and competence, the Implementation
Agency may wish to recruit an external project management consultant (PMC)
to assist and advise its contract management team. For high-value and complex
contracts, the Implementation Agency may also need to secure access to
specialized external advisory such as local law firms, specialized claim consultants
(including in delay analysis experts). Acquisition of other resources such as project
management and planning control software (e.g. Primavera) and document
management system may also be considered.
. The borrower’s contract management team should have access to the
appropriate level of decision makers in their organization, so that relevant decisions
can be made promptly. Delays in making contract-related decisions have the
potential to greatly increase the cost and slow the completion of construction
projects (e.g., the approval of a small contract variation, if delayed, can lead to the
incurrence of substantial additional costs and time delays, as the contractor is not
authorized quickly enough to implement the action required).
(ii) Communication Management
. It is important to define the manner in which the various stakeholders
will communicate during the contract implementation period. Several types
of meetings should be planned, each with representatives of dierent levels of
seniority, dierent agendas and frequencies, for instance:
(a) Weekly meetings between the supervision engineer and the
contractor to discuss and resolve day to day technical or
administrative issues;
(b) Monthly meetings between the Implementation Agency, the
engineer and the contractor to discuss more strategic issues
such as overall work progress, payment issues (payments
processed and planned), proposed variations or claims, etc.;
(c) Monthly or bi-monthly meetings between the engineer and
representatives of the employer to discuss any correctives/
remedial measures should be envisaged to maintain (or put
back) the project on track, as well as any issues regarding the
engineer’s contract itself;
(d) Quarterly meetings could also be planned with representatives
of the employer, other concerned government stakeholders
(line ministries) and representatives of the financiers
(ADBand others).
The Contract Management Process
. Prior to the contract commencement, all stakeholders should be informed
and agree to participate in such meetings, of which the time, place and format
should be clear to all participants.
. Develop Contract Management Plan
. The contract management plan (CMP) is the primary tool that manages
contractor performance. It is an internal document to the borrower and it is
not a contractual document. It comprises a set of documents, tables, graphs,
or flowcharts providing the relevant template that will be used to generate the
monthly project Progress Report with data from the site, designed to provide
all meaningful information on how the project is progressing. The CMP thus
constitutes the contract dashboard. It should enable the borrower to eectively
monitor the project, identify risks and take whatever mitigation or corrective
measures as may be required.
. The CMP should be developed during the pre-contract award stage,
which will make it a useful tool that will inform the borrower of the characteristics
of the contract, the issues to look out for during the contract implementation
phase, and the measures against which contractor performance will be gauged.
. The scope and content of a CMP should be commensurate to the
complexity, risk, and value of the contract, to ensure that the level of contract
performance monitoring and control are adequate.
. For simple and low value contracts, the CMP may be limited to more
succinct items, which in accordance with the procurement regulations, may only
include the following:
(i) key roles and responsibilities;
(ii) key contractual dates and delivery milestones;
(iii) budget and payment milestones; and
(iv) record-keeping requirements.
. For projects involving many contracts where it is not practical to have a
standalone CMP for each contract, it is suggested that one CMP can cover a group
of similar contracts of similar size. Individual CMPs ought to be prepared for large
contracts only. Executing agencies should engage with ADB in advance to discuss
the packaging of several contracts into a single contract management plan.
. A CMP example is shown in Appendix of this guidance note.
B. Contract Administration
Appendix , para , of the procurement regulations sets out the components that should be
included in any CMP for simple and lower-value contracts as well as for high-value, high-risk,
orcomplex contracts.
Contract Management
. Contract administration starts at contract award and continues
throughout the contract implementation period. It refers to the management of
the day-to-day practicalities and administrative requirements under the contract.
It also involves taking decisions and actions that may be necessary to maintain
or restore the project on track and that will be informed by the monthly progress
report (see Box below). Contract administration thus makes up the bulk of
contract management activities.
. Contract administration is aected by the decisions that are taken early
during the project preparation phase (comprehensiveness of project documents,
choice of contract, formulation of project teams, robust short-listing and tender,
etc.) The borrower’s team must therefore be mindful of contract management
requirements from the start of project design and preparation.
. Contract administration is usually the responsibility of an individual
designated by the borrower, or may be carried out by expert project management
consultants (PMC) engaged by the borrower, especially for large, complex projects.
. Contract administration typically involves:
(i) records management, including setting up and operating a records
management system to record correspondence, claims, meeting
minutes, performance reviews and other records as suggested below;
(ii) managing and tracking of payments to the contractor against
invoices and/or claims and the timeliness thereof;
(iii) managing progress (using scheduling tools) and performance;
(iv) conducting review meetings;
(v) managing changes, i.e., variations and projected costs against budget;
(vi) monitoring health and safety and, where applicable, security
arrangements,; and
(vii) managing claims and disputes
Box
Example of Decisions and Actions Guided by Contract Management
• formally put the contractor on notice to increase mobilization and/or issuing instruction
to accelerate the rate of progress to preserve the targeted completion date,
• expedite the land acquisition process if still behind schedule,
• mobilize specialized contractors tasked with relocating utilities that may, if not timely
removed from the site, cause delays for the main contractor,
• require other contractors employed by the employer to revise their schedule if some
unforeseen factors will disrupt the way contractors are supposed to intervene on the site,
• if nothing can be undertaken to eliminate or even to mitigate adverse external factors
(e.g.climatic conditions, ground conditions, etc.), simply making sure that necessary
funding will be secured in due time to cope with the likely cost consequences thereof
(variations to be instructed by the engineer or claims from the contractor
Source: Asian Development Bank.
The Contract Management Process
. Records Management
. Records management is an important part of contract administration.
Keycontract information should always be kept up to date in the records to provide
a comprehensive source of information.
. A non-exhaustive list of records that should be maintained and controlled
is presented in Box . It should be compiled to reflect the specific nature of the
contract in question.
. Good records management requires the maintenance of accurate
records (be it in digital format and/or paper format) that are accessible at all times.
Forprojects where many documents are generated, it may be necessary that this
function be dedicated to a document administrator. For certain projects, it may
also be necessary to use an electronic document management system (document
control system) that enables storage, reference, exchange, and retrieval of
documents through specificsoftware.
. Performance Management
. The procurement regulations require that the borrower proactively
monitor the performance and progress of awarded contracts and to provide timely
reports to ADB on performance and progress.
. For works contracts, the monthly progress report will provide the key data
to monitor progress. The monthly progress report, based on the template defined in
the CMP, will usually be prepared by the supervision engineer or other personnel of
the borrower (depending on the contract used), conducting regular site inspections
and tests (including tests on completion and, as applicable, tests after completion).
Box
Common Records to be Maintained through Records Management
• Key stakeholders
• Contract documents
• Insurance policies
• Bank guarantees and indemnities
• Permissions and approvals granted by the relevant authorities
• Plans and schedules
• Safety management plans
• Environmental management plans
• Variation schedules
• Project correspondence (in and out)
• Performance reviews (including contract performance reviews and reports)
• Meeting minutes
• Financial documents (interim payment certificates, invoices, purchase orders)
• Communications and claims and disputes
Source: Asian Development Bank.
Contract Management
Progress reports will be based on the contractor’s own progress reports together
with other elements such as safeguard monitoring reports. The monthly progress
report will typically include, among other elements:
(i) charts and detailed descriptions of progress (with relevant photographs);
(ii) safety statistics, including details of any hazardous incidents and
activities relating to environmental aspects and public relations; and
(iii) comparisons of actual and planned progress, with details of any
events or circumstances that may jeopardize the completion
under the contract, and the measures being (or to be) adopted to
overcome delays.
. Performance management also involves monitoring the contractor’s
obligation to implement actions agreed in the safeguard management plans
(environmental management plan including health and safety management plan).
Proper management of the contractor’s performance in this field can improve the
environmental and social benefits of a project.
. Performance monitoring and management is often performed via
scheduled contract review meetings between the borrower and the contractor.
The focus of review meetings should be balanced between backward looking
(e.g.,reviewing past performance) and forward looking (e.g., work planning,
continuous improvement initiatives). Best practice is to focus of the review
meeting on past performance and on forward looking items. Figure lists
typical items covered in reviewmeetings.
If the borrower is using the Multilateral Development Bank Harmonized Edition () of the
FIDIC Conditions of Contract for Construction, refer to sub-clause . (Progress Reports).
Figure : Balancing the Focus of Performance Review Meetings
Looking Back
Looking Forward
60%
40%
• Update on action items
• Performance feedback
(performance
indicators)
• Highlights and/or
lowlights
• What are the trends?
• What lessons have
been learned?
• Performance issues
and/or interventions
• Agree on new performance
improvement actions
• Transfer best practice and
discuss opportunities to
improve business delivery
Source: Asian Development Bank.
The Contract Management Process
. Managing Payments
. Payments must be carefully managed under the relevant contract
provisions. Proper management of payments means not only making (timely)
payments as and when required under the contract, but also monitoring actual
against forecast payments (retrospective view) and assessing payments that
will be due (prospectiveview). ADB encourages proactive and robust financial
management of contracts by its borrowers to improve loan disbursements planning
and overall performance of its loan portfolio.
. Managing Changes
. The borrower manages contract variations during implementation of
the contract. Ecient and eective management of the processing of contract
variations is one of the most critical parts of contract management.
. The contract should describe the process for initiating and getting
approval for variations. Such provisions should specify the scope of the engineer
(or contract manager or contract)’s authority to approve changes depending on
value and significance (in terms of quality, cost, and timing), and how initiation and
implementation of approved changes will take place.
. Contract variations will translate into a change in the quantity, nature or
sequence of the works, goods or services to be provided. They can be motivated by
the reassessment of the employer’s needs or as the response to unforeseen events
occurring at the site (e.g. discovery of unforeseeable ground conditions).
. In handling a variation claim, the borrower should
(i) assess the reasons for the variation, and whether this may show an
emerging or actual performance problem;
(ii) assess the impact of the variation on the contract deliverables;
(iii) determine the eect the variation will have on the overall contract
price and schedule; and
(iv) follow the terms and conditions stated in the contract for review and
approval of variations.
. Any significant variation or contract amendment should duly be reported
by the borrower to ADB in the periodic report, or separately if the impact on the
deliverables is significant. For contracts subject to prior review, the borrower shall
seek ADB’s no-objection where any modification would individually or in aggregate
increase the original contract price by more than (Appendix , para , of the
procurement regulations).
. Claim and Dispute Management
. When a matter cannot be resolved amicably and does crystallize into a
dispute, the parties should carefully comply with the dispute resolution mechanism
set forth in the contract. ADB’s preference is that borrowers use commercial
Contract Management
arbitration. For works contracts and supply and installation contracts, prior to
referring the dispute to arbitration, the matter should first be referred to a dispute
adjudication board or adjudicator designed to permit a speedier time bound and
on-site dispute settlement.
. Proper management of disputes is necessary, and the progress and
outcome of all significant disputes should be reported to ADB.
C. Contract Closure
. Contract Close Out
. The last stage of contract management is contract closure. Contract
closure is often overlooked or handled poorly, since the main deliverables have
been completed and parties to the contract focus on other priorities. However,
contract closure is important because it provides a clear end to the contract with
the contractor and minimizes the risks to the borrower of:
(i) potential contractual claims;
(ii) financial exposure; and
(iii) operational impact of a poor transition.
. Aside from termination, a contract closes when both parties have
discharged all their obligations. Where the contract is completed under its terms
and conditions, contract closure begins with:
(i) (i) the borrower confirming internally that the specified contract
deliverables have been completed and that there are no outstanding
matters or issues that remain unresolved; and
(ii) the borrower confirming to the contractor that the contract is
completed, apart from any agreed-upon, ongoing warranties
(orguarantees if applicable).
. After the parties agree that the contract has been completed, the closure
process (particularly for more complex works) typically requires the parties to:
(i) complete all administrative matters;
(ii) confirm that all the goods, services, and technical inputs have been
received, including as-built drawings for works, operating manuals,
user training, and warranties;
(iii) test / install / inspect / commission and hand over the works, goods,
and, where appropriate, services;
(iv) prepare a final defects list (“snag list”);
(v) determine the extent of any liquidated damages to be deducted from
the contract price (delay damages and/or performance damages);
(vi) prepare the completion certificate;
(vii) finalize payments;
(viii) during the liability period, follow-up remedial works on the defects list;
The Contract Management Process
(ix) record the date and details of the final inspection at the end of
the defect notification period and issuance of the performance
certificate (in accordance with the specific procedures provided for
in the contract);
(x) record the end of the retention and guarantee periods, and the date
of release of retention monies and/or guarantees;
(xi) handle warranties, indemnities, and insurance;
(xii) summarize any claims made against or received from the contractor
by the executing agency;
(xiii) record final contract payments, and reconcile all payments; and
(xiv) record any transfer of assets, asset verification, and disposals.
. Post-Contract Review
. Best practice contract closure includes a post-closure contract review and
reporting of the review findings to ADB, comprising the following items:
(i) safety and environmental performance, including details of any
significant incidents;
(ii) the financial outcome of the contract, i.e.,
(a) the initial accepted contract amount;
(b) the impact on the initial contract amount of changes to
quantities (for unit price contracts);
(c) price adjustments;
(d) exchange rate fluctuations (for contracts payable in one or
several foreign currencies); and
(e) the impact on the contract cost of variations, claims, and
disputes;
(iii) a comparison between the baseline program and actual/final time
schedule;
(iv) an overall performance evaluation based on the key performance
indicators; and
(v) any lessons learned and recommendations for future, similar projects.
. Filing of Contract Records
. The last task that needs to be carried out is the retention and secure filing
and storage of contract documentation and records (in physical and digital form).
Such records as the as-built documents may be necessary to allow future works to
be done either on or in interface with the project.
. For projects under post review procedure by ADB, another reason to keep
proper filing and securing of records is due to ADB’s right to conduct audits up to
years after the project closing date.
Depending on the nature of the document (contract, invoice, minutes, etc.) and the jurisdiction,
the minimum retention period for such records may be between and years.
IV.Reporting to and Requesting
No-Objection from ADB
. As per the procurement regulations, beyond preparing a CMP acceptable
to ADB prior to contract signing, borrowers should monitor the performance
and progress of contracts under the CMP and provide timely reports to ADB.
Reporting to ADB should be regarded as an ongoing activity throughout contract
implementation.
. As noted in paragraph ., for contracts subject to prior review,
theborrower shall seek ADB’s no-objection for any significant variation.
. Monthly progress reports will be reviewed by ADB as part of the project
review missions. The areas of particular attention will be the following:
(i) risk management;
(ii) progress monitoring and contractor performance evaluation
measurement;
(iii) financial management data;
(iv) instructed or agreed-on variations and contract amendments; and
(v) ongoing and settled claims and disputes.
Box
Summary of Borrower’s Responsibilities
• Planning contract management during the precontract award stage and incorporating contract
management requirements into the draft contract
• Developing a CMP prior to contract award
• Submitting a completed CMP to ADB prior to contract signing
• Implementing the CMP, to ensure that contract performance is satisfactory, appropriate
stakeholders are informed, and all contract requirements are met
• Submitting quarterly performance reports to ADB during contract implementation
• Requesting ADB’s no-objection where any modification would individually or in aggregate
increase the original contract price by over (for contracts subject to post review)
• Preparing and submitting postcontract closure performance report
Source: Asian Development Bank.
V.Resources for Further Review
. The following resources may be consulted for further information related
to contract management:
P. Bailly et al. . Procurement Principles and Management. th ed. UK: Pearson.
Corbett & Co. International Construction Lawyers. . FIDIC , A Practical
Legal Guide. Edinburg: Corbett & Co
R. D. Elsey. . Contract Management Guide. UK: Chartered Institute of
Procurement and Supply.
Government of the United Kingdom, Guidance by the National Audit Oce. .
Good Practice Contract Management. London.
J. A. Huse. . Understanding and Negotiating Turnkey and EPC Contracts. rd ed.
UK: Sweet & Maxwell.
A-V Jaeger and G-S Hök. . FIDIC—A Guide for Practitioners. Heidelberg:
Springer.
R. Knutson et al. . FIDIC—An Analysis of International Construction Contracts.
The Hague: Kluwer Law International.
P. Loots and D. Charrett. . Practical Guide to Engineering and Construction
Contracts. Australia: CCH Australia Limited.
K. Lysons and B. Farrington. . Procurement & Supply Chain Management. th ed.
UK: Pearson.
P. Marsh. . Study Guide: Project and Contract Management. UK: Chartered
Institute of Purchasing and Supply.
P. Marsh. . Contracting for Engineering and Construction Projects. th ed. UK:
Routledge–Gower Publishing.
Appendix : Typical Contract
Management Issues
A. Those with experience managing contracts will be aware of issues that
arise during the contract implementation phase from their own experience.
Anonexhaustive list of typical issues is given below as a prompt for consideration by
contract managers, and as inputs into the contract risk assessment. Riskmitigation
actions resulting from any of the issues identified in the risk assessment should be
included in the Risk Management Plan, which is part of the contract management
plan (CMP). TheManual on Contract Management has substantial information on
CMP, including a CMP template describing a contract’s contents, and suggests how
the collected information may be interpreted. However,this CMP template is not
a “one-size-fits-all” template and should be adapted to the needs of each contract
considering its size, risks, and complexity andcapacity constraints of executing
agencies and/or implementing agencies.
AA. For Works, Plant, and Related Services
(i) Misuse of mobilization advance by the contractor for purposes not
related to contract.
(ii) Delays in handing over possession of an encumbrance-free site.
(iii) Resettlement issues or local disturbances at site.
(iv) Non-submission of work program.
(v) Delay in submission of insurance documents.
(vi) Late or non-submission of a quality assurance plan.
(vii) The whole contract is unocially sold/sub-let to another unskilled
contractor who has no capacity to manage the contract.
(viii) Use of unauthorized sub-contractors.
(ix) Delay in procurement of construction materials by the contractor
due to non-availability of materials or a sudden increase in price of
materials in the market.
(x) Delay in mobilization of key personnel and equipment.
(xi) Poor quality or non-conformance of deliverables produced
bycontractor.
(xii) Lack of proper pre- or post-delivery inspection of goods.
(xiii) Non-payment by contractors to subcontractors or
materialsuppliers.
(xiv) Non-compliance with environmental protection measures and
safetyrules.
(xv) Non-submission of technical test reports.
Appendix 1
(xvi) Lack of communication, non-submission of monthly progress reports.
(xvii) Variations and extension of time are granted without justification.
(xviii) Disagreement on claims or rates of new items.
(xix) Incomplete or delayed submission/processing of contract
variationrequests.
(xx) Late processing of interim billing and final payments by theborrower.
(xxi) Delay in defects correction.
(xxii) Improper application of contractual-based termination provisions.
(xxiii) Delays in actioning dispute resolution mechanism (e.g., dispute
adjudication board).
AB. For Consulting Services
(i) Key personnel lack practical experience of the specific field of expertise.
(ii) Practical knowledge and experience of the consultants in the areas of
expertise are found to be not consistent as mentioned in their CVs.
(iii) The team leader fails to maintain good relations with the borrower
contract team, other ocials, or with the team members.
(iv) Delays in mobilization of the consultant team.
(v) Unjustified claims with time and/or cost impacts.
(vi) Frequent replacement of personnel.
(vii) Lack of capacity of the borrower to manage the consultant
performance and outputs and consultant’s delay in the timely
delivery of the agreed deliverables by increasing expert inputs, in
case of a time-based contract.
(viii) Substandard quality of deliverables.
(ix) Deviations from agreed terms of reference.
(x) Late processing of interim and final payments by the borrower.
(xi) Delays in actioning dispute resolution mechanisms.
Appendix : Example of A Risk
Management Plan
A. The table below gives an example of a risk management plan:
Risk Probability Impact Counter-Measure Timeline Responsible
Inexperienced
project team
High High • Training for all
team members
• Deploying
experienced
consultant
First quarter
after project
implementation
unit is
established
Borrower’s
Project
manager
Contractor not
experienced in
ADB projects
Medium High • Present all details
during kick-off
meeting(s)
• Request training of
Contractor’s staff
• Encourage
Contractor to
hire experienced
project manager
Contract
effectiveness
Borrower’s
Project
manager
Contractor’s
project
manager
Natural disaster Low High • Ensure that
all adequate
insurance policies
have been
contracted, paid,
and maintained
Contract
effectiveness,
then yearly
Contractor’s
Project
manager
Land acquisition
not fully
completed
in time to
handover the
construction
sites to the
Contractor
Medium High • Ensure advance
actions for
smooth handing
over of sites to
Contractors as
perschedule
• Ensure regular
meetings of
coordinating
/ steering
committee
for inter-
departmental
clearances
Prior to
contract award
and thereafter
continuous
until site is fully
handed over to
the Contractor
Borrower’s
project
manager
continued on next page
Appendix 2
Risk Probability Impact Counter-Measure Timeline Responsible
Low awareness
about
Construction/
Contractor’s
environmental
management
plan
Medium High • Make
environmental
management
plan as part of
thecontract
Prior to
tendering
Borrower’s
Procurement
team
Contract
rates become
unrealistic due to
high volatility of
market prices for
certain materials
Medium High • Carefully consider
risk to be borne
by employer by
introducing price
adjustment clause
irrespective of
the duration of
thecontract
Prior to
tendering
Borrower’s
Procurement
team
Single foreign
Contractor is
inexperienced in
the country
Low High • Engineer to closely
monitor the
material and other
sub-contracting
arrangements and
ensure qualified,
approved
sub-contractors
working on the site
Kick-off
meeting and
continuous
Borrower’s
Project
Manager and
Contractor’s
project
manager
Major partner
of joint venture
not participating
in contract
implementation
Medium High • Ensure
appropriate,
stringent clauses
in the contract
such as “project
manager and key
personnel must
befrom major
jointventure
partner and full
time on site”
Procurement
stage and
contract
signingstage
Borrower’s
Procurement
team and
project
manager
continued on next page
Appendix Table continued
Appendix 2
Risk Probability Impact Counter-Measure Timeline Responsible
Insufficient
cash flow of
the Contractor
affecting the
progress. Works
on hand of the
Contractor are
beyond the
capacity of the
Contractor to
simultaneously
perform on
commitments.
Medium High • Careful
assessment of
the capacity of
the Contractor to
mobilize financial
resources at the
procurement
stage. The current
contractual
commitments of
the Contractor
need to be
carefully examined
before awarding
the works.
Procurement
stage
Borrower’s
Procurement
team
Appendix Table continued
Appendix : Manual on
ContractManagement
OVERVIEW
A. In , the Asian Development Bank (ADB) adopted the new
Procurement Policy and the Procurement Regulations for ADB Borrowers,
whichare intended to improve business processes and change procurement from
arules-based to a principles-based approach.
A. The Procurement Policy is underpinned by the notion that to achieve
better outcomes, a stronger emphasis should be placed both on the upstream
and downstream phases and processes of a transaction. The upstream process
consists mainly of assessing the operating environment, risks, and market
conditions, to develop a procurement plan that will likely deliver the most value
for money (aprocess called strategic procurement planning). The downstream
process consists of ensuring that the services, goods, or works are delivered per
agreed specifications, schedule, and budget; in other words, ensuring that, once
selected, either the consultant, supplier or contractor will duly comply with its
contractual obligations so that the planned outcomes of the project will actually
be delivered. This process is called contract management and is the purpose of
thepresentmanual.
A. This Manual on Contract Management supplements the Guidance Note on
Contract Management and explains the purpose and recommended contents of a
CMP. It is meant to provide guidance at the operational level on use of the CMP for
monitoring the performance of the contractor
and for reporting to ADB.
A. The manual is intended mainly for ADB borrowers,
particularly
their executing agencies or implementing agencies acting as “the client” or
“theemployer” under the contracts with contractors. However, it should be
noted that the executing or implementing agency is not required to abolish its
own monitoring report or CMP form, if it is already using one, which covers the
necessary information described in this document.
The term “contractors” also includes suppliers of goods or providers of consultancy or
nonconsultancy services.
The term “borrowers” also includes the recipient of grants. It applies to sovereign as well as
nonsovereign operations.
Appendix 3
INTRODUCTION
A. The Procurement Regulations for ADB Borrowers (henceforth Procurement
Regulations) requires that a CMP acceptable to ADB should be developed
during contract creation; thus, it must be prepared at the time of bidding
document preparation and must be completed by the time of contract signing.
TheProcurement Regulations further recommend that the borrower monitor the
performance and progress of the contracts in accordance with the CMP, and to
provide timely reports to ADB.
A. These recommendations were further elaborated on in the Guidance
Note on Contract Management first issued in June
and subsequently updated
in December . In the Guidance Note, contract management is described as
a continuous process that can be described in three main phases: precontract
award activities, contract administration, and contract closure. In this context,
itcharacterizes the CMP as a fundamental tool for contract management, which
is developed as part of the precontract activities, and which should be used during
the entire contract administration phase. The present manual describes and
explains in detail the CMP’s structure, contents, and purpose.
I. What is A Contract Management Plan
and Why Use It?
A. The contract management plan (CMP) is a key tool that captures and
monitors all necessary information on a project’s physical progress, technical issues,
financial management, time management, safeguards, gender, and other relevant
aspects. Itisto be maintained on a monthly basis.
A. In more concrete terms, the CMP is a set of tables, schedules, graphs, and
photographs providing the guidance on content, procedures, and format to be used
in generating monthly project progress reports the purpose of which is to provide
all relevant information showing how the project is progressing. The CMP thus
constitutes the contract dashboard. It enables the employer to eectively monitor
the project; identify risks; and take whatever mitigation, preventive, or corrective
measures as may be required.
A. This manual provides a template for the CMP, describes its contents,
and suggests how the collected information may be interpreted. This template
was designed for use in works contracts (including Design and Build contracts
or Design–Build–Operate contracts), although it can be adapted as well for
consultancy or nonconsultancy services—to a lesser extent for supply contracts
due to the lesser interaction between the client and the supplier of goods.
See Appendix , paragraph of the Procurement Regulations for ADB Borrowers.
The Guidance Note on Contract Management was issued as part as a series of guidance notes to
elaborate on the Procurement Regulations.
Appendix 3
A. The proposed template cannot be considered as one-size-fits-all
and should be adapted to the needs of each contract considering its size, risks,
complexity, and capacity constraints of executing agencies and/or implementing
agencies. When used for a project that includes numerous contracts of similar
nature (for instance, the construction of schools grouped in several distinct batches
or lots), a CMP may be used at a “macro level.” This will aggregate the data of all
contracts into one single CMP, although convenient for reporting purpose, this
approach will not allow for the detection of issues aecting one particular contract.
II. Creating the Contract Management Plan
A. The CMP should be generated during the precontract award phase of the
contract management process (Figure A.) and should be updated thereafter in
the form of monthly progress reports throughout the implementation phase and
until contract closure.
A. The CMP should be based, among other elements, on the project
risk assessment relevant to the contract. Section of the CMP template
(riskmanagement plan) includes a risk management matrix that should be
monitored throughout contract implementation. The nature and type of risks
that should be incorporated in the risk management plan of the CMP should be
derived and cascaded from the risk analysis conducted at the time of the project
procurement risk analysis and strategic procurement planning analysis.
Figure A.: The Contract Management Process
ADB = Asian Development Bank.
Source: Asian Development Bank (Procurement, Portfolio and Financial Management Department).
Precontract
Award
Contract
Closure
Contract
Administration
Reporting to ADB
A
B
C
2. Performance
management
2. Develop contract
management strategy
3. Develop contract
management plan
5. Claim and dispute
management
1. Record management 1. Contract close-out
2. Post contract review
3. Filling contract records
1. Develop risk assessment
3. Managing payment
4. Managing changes
Appendix 3
A. As required by the Procurement Regulations, the CMP should be prepared
“during contract creation and completed by the time the contract is signed”, which
means, in practice, by the time the bidding document is prepared. The CMP should
thus be prepared by the executing agency or implementing agency (whichever
entity is responsible for preparing the bidding document), or perhaps by the
consultants engaged by them to prepare the bidding document.
A. The Procurement Regulations further require that the CMP be submitted
to ADB for clearance “at the time the contract is signed”, which in practice will
be after the bid evaluation is completed, and before (or at the same time as)
contract award. It shall be reviewed by an ADB project ocer from the operations
department, with the support of the Procurement, Portfolio and Financial
Management Department (PPFD) procurement specialist if needed.
III. Generating the Monthly Progress Report from the
Contract Management Plan
. Creation and Update of the Contract Management Plan
A. Once the CMP has been designed and approved and once the
contract becomes eective,
all relevant project data should be collected to
generate the monthly progress report, thus providing the implementing agency
(as“theEmployer”) with a tool to monitor the progress of the works or services;
inother words, “to manage the contract.”
A. The responsibility for generating the progress report should normally be
incumbent upon the supervision consultant designated as the “Project Manager”
or“Engineer” (hereinafter referred to as the Engineer). Aprimary source of
information should be the contractor’s progress report, which is usually submitted
on a monthly basis (Figure A.). Another source of information is the monitoring
reports prepared by the safeguard specialists or gender and/or social specialists who
are usually part of the supervision consultant’s team. These reports will cover the
monitoring of the environment management plan, including the health and safety
monitoring reports, and the social safeguards. The supervision consultant may also
have to collect information from the executing agency or implementing agency
with respect to obligations that are incumbent upon “the Client” or “the Employer,”
such as securing certain permits, processing the land acquisition and resettlement
plan, moving some utilities, etc.
Works contracts usually become eective upon the issuance of the letter of acceptance.
However, in some jurisdictions, the actual signature of a contract agreement may be required for
the contract to become eective.
Supervision
Consultant
Information
Contractor
Information
Monthly Report to
IA / ADB
Monthly Site Progress
Progress Report
Additional information
Safeguards reports, etc.
ADB = Asian Development Bank, IA = implementing agency.
Source: Asian Development Bank (Procurement, Portfolio and Financial Management Department).
Figure A.: Contract Management—Source of Information
Appendix 3
A. As required by the Procurement Regulations, the CMP should be prepared
“during contract creation and completed by the time the contract is signed”, which
means, in practice, by the time the bidding document is prepared. The CMP should
thus be prepared by the executing agency or implementing agency (whichever
entity is responsible for preparing the bidding document), or perhaps by the
consultants engaged by them to prepare the bidding document.
A. The Procurement Regulations further require that the CMP be submitted
to ADB for clearance “at the time the contract is signed”, which in practice will
be after the bid evaluation is completed, and before (or at the same time as)
contract award. It shall be reviewed by an ADB project ocer from the operations
department, with the support of the Procurement, Portfolio and Financial
Management Department (PPFD) procurement specialist if needed.
III. Generating the Monthly Progress Report from the
Contract Management Plan
. Creation and Update of the Contract Management Plan
A. Once the CMP has been designed and approved and once the
contract becomes eective,
all relevant project data should be collected to
generate the monthly progress report, thus providing the implementing agency
(as“theEmployer”) with a tool to monitor the progress of the works or services;
inother words, “to manage the contract.”
A. The responsibility for generating the progress report should normally be
incumbent upon the supervision consultant designated as the “Project Manager”
or“Engineer” (hereinafter referred to as the Engineer). Aprimary source of
information should be the contractor’s progress report, which is usually submitted
on a monthly basis (Figure A.). Another source of information is the monitoring
reports prepared by the safeguard specialists or gender and/or social specialists who
are usually part of the supervision consultant’s team. These reports will cover the
monitoring of the environment management plan, including the health and safety
monitoring reports, and the social safeguards. The supervision consultant may also
have to collect information from the executing agency or implementing agency
with respect to obligations that are incumbent upon “the Client” or “the Employer,”
such as securing certain permits, processing the land acquisition and resettlement
plan, moving some utilities, etc.
Works contracts usually become eective upon the issuance of the letter of acceptance.
However, in some jurisdictions, the actual signature of a contract agreement may be required for
the contract to become eective.
Supervision
Consultant
Information
Contractor
Information
Monthly Report to
IA / ADB
Monthly Site Progress
Progress Report
Additional information
Safeguards reports, etc.
ADB = Asian Development Bank, IA = implementing agency.
Source: Asian Development Bank (Procurement, Portfolio and Financial Management Department).
Figure A.: Contract Management—Source of Information
A. It is therefore important that the terms of reference of the supervision
consultant specifically include the responsibility of gathering the relevant
information to generate the monthly progress report.
. Application of the Contract Management Plan
A. The CMP and the monthly progress reports generated therefrom
should be a primary tool in the hand of the project management oce (PMO)
or project implementation unit (PIU), or other entity in charge of the project
As per Reporting Format
(Contract Management Plan)
Frequency
Figure A.: Updating the Contract Management Plan
ADB = Asian Development Bank.
Source: Asian Development Bank (Procurement, Portfolio and Financial Management Department).
Appendix 3
within the implementing agency. The progress report, which is usually updated
monthly, provides all relevant information on how the project is progressing and
where potential risks may be. Itthus informs any decision needed to be taken to
implement mitigating, preventive, or corrective measures.
A. For instance, the lack of physical progress (lag between planned and
actual progress) reported in the monthly progress report may be ascribable to
several factors:
(i) the Contractor, because (for instance) it did not mobilize sucient
resources, or because these resources are not properly used for the
contract;
(ii) the Employer, because (for instance) unencumbered access to site
could not be granted to the Contractor or because other contractors
employed by the employer hamper progress; and
(iii) other factors external to the Contractor or the Employer, such as
exceptionally adverse climatic conditions or unforeseeable ground
conditions delaying the contractor.
A. Irrespective of how the contract allocates risks and which party should
eventually be liable for the consequences of such risks (in terms of time and cost), the
implementing agency should proactively manage such risks, and where possible and
relevant, take preventive or corrective measures. This may for instance consist of
(i) formally putting the Contractor on notice to increase mobilization
and/or issuing instruction to accelerate the rate of progress;
(ii) expediting the land acquisition process if still behind schedule;
(iii) reorganizing or rescheduling the way other contractors using the site
should intervene; or
(iv) if nothing can be undertaken to eliminate or even to mitigate
adverse external factors (e.g., climatic conditions, ground conditions,
etc.), simply making sure that necessary funding will be secured
in due time to cope with the likely consequences (variations to be
instructed or claims from the Contractor).
A. Moreover, the monthly progress report may be used to complement
the progress reports that the executing agency has to provide ADB as part of the
loan or grant covenant. This could be useful where specific circumstances relating
to a given contract will generate some issues in term of loan implementation
(e.g.,lackof progress or delay, significant claims or disputes).
A. The use of the CMP and the monthly progress reports generated
therefrom should not however be seen as creating new and additional reporting
requirements for the executing agency. From the executing agency’s perspective,
the CMP and monthly progress report are tools for managing Contractors’
performance. Regardless of the scope and extent of reporting requirements to
ADB, to meet the loan or grant covenant, their use should thus be considered as
best practice for contract management.
Appendix 3
IV. Description of the Contract Management Plan
A. While there could be many other formats and layouts, the proposed CMP
template in this manual reflects the most common type of data usually collected
to ensure a robust “management of the contract”, thus can be considered to reflect
best practice.
A. The CMP template is mostly appropriate for infrastructure works
contracts. It can be adapted or simplified for monitoring contracts for consultancy
or nonconsultancy services, and to some extent the supply of goods. For goods
supply contracts, since the performance of the supplier will be measured largely
on the achievement of one sole milestone, which is the actual delivery of goods,
the key aspect of “program monitoring” (described section of the CMP) can be
significantly simplified.
A. As mentioned in chapter , it should also be noted that the proposed
template should not be considered as one-size-fits-all but tailored to the actual
needs and characteristics of the actual contract to be monitored. The scope and
content of a CMP should be commensurate to the complexity, risk, and value of
thecontract.
A. For simple and low-value contracts, the CMP may be limited to more
succinct items, which in accordance with the procurement regulations, may only
include the following:
(i) key roles and responsibilities,
(ii) key contractual dates and delivery milestones,
(iii) budget and payment milestones (including bank guarantees), and
(iv) record-keeping requirements.
A. For simple and low-value contracts, the CMP may cover only five
sections, as shown in Box A.. The five sections listed below are extracted from
the sections recommended for a full-fledged CMP, which is described in detail in
subchapter..
Appendix 3
Box A.
Elements of a Contract Management Plan for Simple
and Low-Value Contracts
Source: Asian Development Bank.
Part A: Monthly Progress Report
Project Background
Executive Summary
Monthly Progress Update
• Section : Program Monitoring
• Section : Financial Management
• Section : Environment, Social, Health and Safety, Security-Related Obligations
• Section : Completion of Work and Contract Closure Activities
• Section : Recent Photographs of Site Activities
Part B: Contract Key Data and Information
Contract Details
Communication and Report
Bank Securities and Insurances
. Contract Management Plan Structure
A. The proposed CMP template contains two main parts:
• Part A: Monthly Progress Report
• Part B: Contract Key Data and Information
Part A: Monthly Progress Report
Project Background
A. The project background is meant to provide key factual and descriptive
(and thus nonvariable) elements of the contract. It is usually laid on a one-page
schedule so as to give a “project at a glance” view of the contract. This description
will usually contain the following elements:
(i) Project rationale, project funding, including loan or grant number,
title and closing date of the loan or grant
(ii) Contract scope (only a brief description, maximum of paragraph)
(iii) Contract type
(iv) Key procurement milestones (bid submission date, date of
contractaward)
(v) Parties to the contract (Employer and Contractor’s name)
(vi) Contract amount, amounts to be paid in various currencies
(vii) Key contract milestones (contract signature date, commencement
date, and expected completion date)
(viii) Time for completion
(ix) Consultant’s name and project management consultant’s name
(if applicable)
Appendix 3
Executive Summary
A. The executive summary provides the key conclusions tailored for decision
makers. Typically, the executive summary is a few paragraphs that briefly set out the
key issues together with recommendations for actions to be taken relating to the
reporting period. The following topics may be covered:
(i) cash flow utilization: actual versus planned;
(ii) physical progress: main progress activities during the month vs
planned milestones;
(iii) main risks, challenges, and issues encountered during the month; and
(iv) main mitigation, preventive, or corrective measures envisaged and
person(s) responsible to carry out such measures.
A. For a project comprising multiple contracts managed by one or several
implementing agencies, themselves reporting to the same executing agency,
acollation of the executive summaries of each progress report, can serve as the
high-level portfolio reporting for submission to the executing agency.
Monthly Progress Update
A. This is the core and dynamic part of the progress report. A large part of the
information needed should be present in the Contractor’s monthly report from which
the Engineer can extract information to generate the progress report. Theupdate is
divided into sections, which are described in detail in subchapter ..
Part B: Contract Key Data and Information
A. This descriptive part of the CMP contains all reference data and
information that are in principle invariant over the contract life, such as relevant
contract details, key points of contract, description of bank guarantees, and
insurances submitted by the Contractor. part B is divided into three sections,
whichare described in subchapter..
. Description of the Monthly Progress Update
A. The project monthly update can be divided into the following sections:
(i) Section : Permits, Licenses, and Approvals
(ii) Section : Contract Start-Up Activities and Submittals
(iii) Section : Risk Management
(iv) Section : Program Monitoring
(v) Section : Change Management
(vi) Section : Financial Management
(vii) Section : Disputes
(viii) Section : Environment, Social, Health and Safety, Security-Related
Obligations
(ix) Section : Completion of Work and Contract Closure Activities
(x) Section : Recent Photographs of Site Activities
Appendix 3
.. Section : Permits, Licenses and Approvals
A. This section lists all permits, licenses, and approvals that should be obtained,
either by the Employer or the Contractor before all or part of the works can start
(or shortly after). This may include (i) planning; (ii) zoning or building permits;
(iii)registration with the local engineering or contractor council; (iv)utilities removal or
relocation; (v) tax registration, for the purpose of setting up the Contractor’s in-country
subsidiary or branch oce; and (vi) customs or tax exemptions. The final list should be
determined at the strategic procurement planning (SPP) stage.
Table A.: List of Permits, Licences, and Approvals
Application
Type
Relevant
Law or
Regulation
Responsible
Party
Approving
Authority
Due/
Planned
Date
Actual
Date
Validity
Period
Current
Status
Comment
[Employer]
[Contractor]
A. Some of these permits, licenses, and approvals should be obtained by the
Employer, others by the Contractor. It is therefore important to keep track of these
permits to make sure that they are secured in due time.
A. Typically, when they are the responsibility of the Employer (e.g., customs
duties exemptions), failure to timely obtain such permits, licenses, or approvals
will entitle the Contractor to claim compensation for cost and/or time extension.
Besides, implementing agencies should be aware that even when the Contractor
is responsible for obtaining such permits, licenses, or approvals, the contract may
stipulate that the Employer should be responsible for providing assistance to the
Contractor in obtaining them, and failure to provide such assistance may thus also
be grounds for a Contractor’s claim.
A. Therefore, keeping track of the process for securing all such permits,
licenses, or approvals, and the recording of any variance between due dates, and
actual dates and their reasons, will be key to avoiding or at least limiting administrative
impediments to the proper progress of the works. If needed, additional resources within
the implementing agency, or possibly assistance from another government entity or
department, should be considered for troubleshooting.
.. Section : Contract Start-Up Activities and Submittals
A. This section contains three tables listing all activities that should take
place from the issuance of the letter of acceptance by the Employer to the selected
bidder until days after the commencement date (or such other period that
Appendix 3
the contract may specify). The contract typically sets out a number of critical
obligations for the parties during this period:
• Land Acquisition and Resettlement Plan (LARP) activities (in case of
sectional approach),
• contract start-up activities, and
• mobilization activities.
A. Each of these activities is critical for the proper start of the project and
corresponds to specific obligations of either party (as well as the Engineer) under
the contract.
A. As per ADB guidelines and procedures, the LARP should be implemented
before the commencement of the works. However, for “linear” projects, such as
road construction and/or rehabilitation, installation of power transmission lines, or
water distribution networks, it may be dicult to have the LARP fully implemented
before the commencement of works. The LARP may thus be processed in
sections
and the corresponding site areas may be handed over to the Contractor
section by section.
A. Under such scenario, if the works start on some sections while others are
still not yet under the full control of the Employer, it is crucial that the remaining LARP
processing activities be monitored very carefully. The “sectional” handover of the site
to the Contractor would also need to be carefully described in the contract, with the
understanding that noncompliance with the agreed milestones for site access would
likely result in claims for extension of time and additional payment.
A. It is therefore advisable for the implementing agency to have dedicated
sta responsible for monitoring the due process of the LARP activities.
Table A.: Land Acquisition and Resettlement Plan Processing
(for sectional approach)
Section
Definition
Implementation
Status / Payment
of Compensation
to Affected
Persons
Clearance of LARP
ComplianceReport
CommentsDue Date Actual Date
LARP = land acquisition and resettlement plan.
The word “section” is used in this context to describe the various parts in which the LARP may be
processed. It is not to be confused with the concept of “Section” used in the FIDIC contract to
describe “a part of Works specified in the Contract Data as a Section (if any).”
Appendix 3
Table A.: Contract Start-Up Activities
Clause Action Responsible
Due
Date
Actual
Date Comment
Residual Tender Stage Actions
ITB
.
Issuance of letter of acceptance Employer
ITB
.
Return bid security to Contractor Employer
ITB
.
Contract agreement signature Employer
and
Contractor
Contract Requirements
GCC
.
Provision of performance
security
Contractor Include
expiry
date of the
performance
security
GCC
.
Evidence of the employer’s
financial arrangements
Employer
GCC
.
Effective access to and
possession of the site
Employer
GCC
.
Provision of APG Contractor Include
expiry date
ofthe APG
GCC
.
and
.
Submission and certification of
application for advance payment
Contractor
GCC
.
Payment of advance payment Employer
PCC
.
Preparation and submission
of the construction and/or
Contractor’s environmental
management plan, including
thehealth and safety
management plan
Contractor
GCC
.
Notice of commencement date Engineer
Contract Activities Required Within Days of Commencement Date
GCC
.
Submission of detailed program Contractor
continued on next page
Appendix 3
Clause Action Responsible
Due
Date
Actual
Date Comment
GCC
.
Provision of insurances (See
Section )
Contractor
GCC
.
Appointment of dispute board
and signing of the Dispute
Agreement(s) by the parties
Employer
and
Contractor
[Insert any other start-up related
obligations added for the particular
contract]
ADB = Asian Development Bank, APG = advance payment guarantee, FIDIC = Fédération
Internationale des Ingénieurs-Conseils (International Federation of Consulting Engineers),
GCC = General Conditions of Contract, ITB = Instructions to Bidders, PCC = Particular
Conditions of Contract.
Note: All ITB clause numbers refer o Section 1 of the ADB Standard Bidding Document in the
User’s Guide to Procurement of Works (June 2018). GCC or PCC clause numbers refer to FIDIC
Contract MDB Harmonized Edition (June 2010).
Sources: ADB. User’s Guide to Procurement of Works (June 2018). Manila; International Federation
of Consulting Engineers. 2010. FIDIC Contract MDB Harmonized Edition (June 2010). Geneva.
A. All the activities above are usually embedded in various instructions
to bidders (forthe first three items) or contract provisions (for all the others),
which provide the specific timeframe for the responsible party (e.g., submission
of the performance security). Noncompliance with any of these obligations
in the prescribed timeframe will usually give entitlement to the other party for
some remedies: extension of time; additional cost (e.g., in case of failure to grant
full access and unobstructed possession of the site); or financial charges (e.g., in
case of delayed payment of the advance payment) for the Contractor. In certain
(extreme) situations, it can lead to contract termination for cause, triggered
either by the Contractor (e.g.,in case of nonsubmission by the Employer of its
financial arrangements) or by the Employer (e.g., in case of nonsubmission of the
performance security).
A. It is therefore self-evident that these activities require the closest
monitoring by the implementing agency. It also follows that careful record keeping
should be observed at all times to maintain access to all the corresponding
documentation (letter of acceptance, performance security, advance payment
bank guarantee, notice of commencement of works, etc.).
Table A. continued
Appendix 3
Table A.: Mobilization Activities
Clause Action Reference
Scheduled
Date
Actual
Date Variance
./. Establishment of site
boundaries, compound, offices
etc.
Program
.../. Mobilization of Contractor’s
equipment
Program
.../. Mobilization of Contractor’s
personnel
Program
ADB = Asian Development Bank, FIDIC = Fédération Internationale des Ingénieurs-Conseils
(International Federation of Consulting Engineers), GCC = General Conditions of Contract,
ITB = Instructions to Bidders, PCC = Particular Conditions of Contract.
Note: All ITB references correspond to Section 1 of ADB Standard Bidding Document for
Works (June 2018) and GCC/PCC clause numbers refer to FIDIC Contract MDB Harmonized
Edition (June 2010).
Source: International Federation of Consulting Engineers. 2010. FIDIC Contract MDB
Harmonized Edition (June 2010). Geneva.
A. The above activities are incumbent upon the Contractor and should be
carefully monitored by the Engineer. Although the mobilization of the Contractor
is expected to commence as soon as practicable after the issuance of the letter
acceptance, the Contractor will usually wait to receive the advance payment in order to
limit its financialexposure.
A. The Contractor‘s timely mobilization is entirely the Contractor’s
responsibilities as part of the site organization, and more generally, its methods
statement. Moreover, the Contractor will have to reflect its mobilization (particular
in terms of personnel and equipment) in its baseline program.
.. Section : Risk Management
... Identifying Risks
A. The identification and management of risks should be a continuous process
throughout the procurement process, starting from the country or sector procurement
risk assessment (CSPRA) at the country partnership strategy (CPS) stage; to the project
procurement risk assessment (PPRA) at the project conceptualization and planning
stages; and finally, to the project implementation phase.
Under certain forms of contract such as the FIDIC MDB Harmonized Edition (June ),
the payment of the advance payment is a condition precedent to the notification of the
commencement date, which means that the Contractor is likely to delay its mobilization until
that time.
Further reference on the general approach to risk management can be found in ADB.
Guidance Note on Procurement Risk Framework. Manila. https://www.adb.org/sites/default/files/
procurement-risk-framework.pdf.
Appendix 3
A. The risk management approach contained in the CMP (and if needed,
reflected and commented later in each progress report) is thus the outcome of this
global process. The risks identified at this stage are primarily those derived from the
PPRA as cascaded into the strategic procurement planning process. Additionalrisks
may nonetheless be identified at this stage depending on the project detailed
engineering design or on the particular circumstances arising at the time of contract
preparation or negotiation.
A. A typology of all such risks sorted by the various stages of the project
implementation is presented in Box A..
Box A.
Categories of Risks in Project Implementation
Cross-cutting risks throughout the whole contract life
• Insolvency risk of the Contractor
• Legal risk (contract interpretation difficulties and/or contract provisions inconsistent with
applicable national laws)
• Dispute risks between the parties
• Risk of personal injury to people and/or physical damage or loss to the works or to third
party property
• Insurable risks
• Risk of contract administration
• Changes in law and regulations
• Permits and authorizations
• Contractor’s nonexcusable delay
Risks pertaining to the contract procurement period
• Rushed procurement process
• Capacity of the bid evaluation team
Risks pertaining to the design period
• Input data and site condition risks
Risks pertaining to the construction period
• Input data and site conditions risks
• Weather risks
• Land clearance for access to the site
Risks pertaining to the operation period (if applicable)
• Nonperforming facility and/or failure to reach production output
• Availability and suitability of inputs from the Employer (e.g., water, power, personnel,etc.)
• Early failure of main equipment
Source: Asian Development Bank (Procurement, Portfolio and Financial Management Department).
Appendix 3
... Contract Risk Management Plan
A. Risk analysis has three steps: risk identification, risk assessment, and risk
mitigation. These are consolidated in a contract risk management plan, also called
contract risk register.
Risk Identification
A. Following the typology as suggested in Box A., the identified risks can be
monitored through the contract risk register or risk matrix, which is used as a live
project management and decision-making support tool. The register should be
updated every time risk mitigation measures are implemented, until such time that
the level of residual risk is considered as acceptable by the implementing agency.
This matrix should be used during contract implementation to make sure that risks
remain monitored and controlled. Box A. shows the dierent fields
recommended in a contract risk matrix.
Risk Assessment
The risk scoring system and associated color code can be based on the following
matrix (Table A.):
Box A.
Contract Risk Register
Risk reference
• Risk category (cross-cutting risk, Procurement risk, Design risk, etc.)
• Risk name
• Date identified
• Risk owner, i.e., the person or entity in charge of managing that risk
Risk details
• Risk description
• Risk potential cause
• Risk impact if it occurs
Risk assessment
• Risk probability of occurrence score, split into five levels, from Very Low (VL) to
VeryHigh (VH), or to
• Risk impact score split into five levels, from VL to VH, or to
• Risk score, being the multiplication of probability score by impact score, i.e., ranging from
to ; the higher the score, the higher the need to mitigate the risk
Source: Asian Development Bank (Procurement, Portfolio and Financial Management Department).
Appendix 3
Table A.: Risk Rating Matrix
Risk Consequence
Insignificant Minor Moderate Major Severe
1 2 3 4 5
Risk Likelihood
Almost Certain
1
Medium Medium High Extreme Extreme
Likely
2
Medium Medium High High Extreme
Possible
3
Low Medium Medium High High
Unlikely
4
Low Low Medium Medium High
Rare
5
Low Low Low Medium Medium
Source: Asian Development Bank (Procurement, Portfolio and Financial Management Department).
A. Alternatively, a more elementary approach could be to describe risk level
simply color codes: green for low risk, orange for medium risk, and red for high or
extreme risk (Table A.).
Table A.: Risk Rating Key
Extreme
High
Medium
Low
Source: Asian Development Bank (Procurement, Portfolio and Financial Management Department).
Risk Mitigation
A. Risk mitigation encompasses the following:
(i) Mitigation measure
(ii) Mitigation owner, i.e., the one in charge of implementing the risk
mitigation measure
(iii) Due date for implementation of the risk mitigation measure
(iv) Residual risk score, upon risk mitigation measure implementation
A. Upon implementation of the risk mitigation measure, the risk owner shall
decide whether to declare the status of the residual risk as either of the following:
(i) Live. Residual risk level is not acceptable; further mitigation
measures are required and/or mitigation measures are in progress.
(ii) Closed. Residual risk is marginal; risk is no longer an issue, and
nofurther action is required.
Appendix 3
(iii) Accepted. Residual risk cannot be further reduced under reasonable
terms; residual risks are accepted as such, and no further risk
mitigation but only risk is monitoring required.
A. It should be noted that the above addresses risks that have direct cost
and time implications. There might be other characteristics of risk that do not
necessarily translate into direct cost and time impact, such as reputational risks.
Theimplementing agency shall assess such kind of risks by using the same risk
matrix but defining risk impact score using terms other than direct time and
monetary costs.
A. The above risk analysis is illustrated through an example of a risk
management plan in Appendix of this guidance note.
.. Section : Program Monitoring
A. This section is a key part of the progress report, which should provide
a reliable picture of the progress achieved at a given month versus the planned
progress. The source of information is the time schedule, as updated monthly,
which the Contractor will submit to the supervision engineer as part of its own
monthly progress report. The contents, format, and sometimes the software will
typically be described in the contract specifications.
A. It is suggested that a “Level ” schedule be laid out in this section,
i.e.,a high and/or medium level integrated project schedule for the entire
project timeframe that is used for high-level internal and external management.
Thisschedule shows the project milestones of engineering, procurement,
construction, and start-up activities by network logic; and identifies critical
paths, key deliverables divided by units, and system facilities including key critical
activities, units, or systems.
A. This schedule may be illustrated by the following items:
(i) Tabular form of progress – planned dates, actual dates, variances
(ii) Graphical form – line graph illustrating actual verses planned
progress
(iii) Pie chart – overall progress (), time elapsed, time remaining
(iv) One month look ahead table with target dates
(v) A short paragraph commenting on the critical path and the progress
recorded to date.
A. A sample of level and level program and illustrative charts and
commentary is shown in Box A..
Box A.
Sample Level I and Level Programs
Sample level 1 program
Sample level 2 program
Source: Tensix Consulting. Reporting Schedule Progress in Primavera P6. https://tensix.
com/2020/03/reporting-schedule-progress-in-primavera-p6/.
Appendix 3
(iii) Accepted. Residual risk cannot be further reduced under reasonable
terms; residual risks are accepted as such, and no further risk
mitigation but only risk is monitoring required.
A. It should be noted that the above addresses risks that have direct cost
and time implications. There might be other characteristics of risk that do not
necessarily translate into direct cost and time impact, such as reputational risks.
Theimplementing agency shall assess such kind of risks by using the same risk
matrix but defining risk impact score using terms other than direct time and
monetary costs.
A. The above risk analysis is illustrated through an example of a risk
management plan in Appendix of this guidance note.
4.2.4 Section 4: Program Monitoring
A. This section is a key part of the progress report, which should provide
a reliable picture of the progress achieved at a given month versus the planned
progress. The source of information is the time schedule, as updated monthly,
which the Contractor will submit to the supervision engineer as part of its own
monthly progress report. The contents, format, and sometimes the software will
typically be described in the contract specifications.
A. It is suggested that a “Level ” schedule be laid out in this section,
i.e.,a high and/or medium level integrated project schedule for the entire
project timeframe that is used for high-level internal and external management.
Thisschedule shows the project milestones of engineering, procurement,
construction, and start-up activities by network logic; and identifies critical
paths, key deliverables divided by units, and system facilities including key critical
activities, units, or systems.
A. This schedule may be illustrated by the following items:
(i) Tabular form of progress – planned dates, actual dates, variances
(ii) Graphical form – line graph illustrating actual verses planned
progress
(iii) Pie chart – overall progress (), time elapsed, time remaining
(iv) One month look ahead table with target dates
(v) A short paragraph commenting on the critical path and the progress
recorded to date.
A. A sample of level and level program and illustrative charts and
commentary is shown in Box A..
Box A3.4
Sample Level I and Level 2 Programs
Sample level 1 program
Sample level 2 program
Source: Tensix Consulting. Reporting Schedule Progress in Primavera P6. https://tensix.
com/2020/03/reporting-schedule-progress-in-primavera-p6/.
It will be up to the Engineer to extract the relevant information from the Contractor’s
monthly time schedule to provide a meaningful picture of the situation.
4.2.5 Section 5: Change Management
A. Considering that contracts, especially in the construction industry, are
implemented in an environment of risks of various nature (see section above),
it is almost inevitable that changes will have to be accommodated so that the
contract can reach successful completion. It could even be said that without
changes, no contract will survive. It is thus essential that procedures be in place
to manage such changes. Achange may be initiated by the Employer, which is a
“variation”; or by the Contractor, which is a “claim”.
Claims may, however, also be initiated by the Employer, usually in response to noncompliance
by the Contractor of some of its obligations (e.g., failure to complete the works or services as per
the agreed time for completion, giving entitlement for delay damages for the employer subject to
making a claim).
Appendix 3
... Variations
A. A variation is usually a change to works or services that is instructed to the
Contractor. The scope of a variation is described in the FIDIC MDB Harmonised
Edition (June) form of contract, as follows:
(i) changes to the quantities of any item of work included in the
Contract (however, such changes do not necessarily constitute
aVariation);
(ii) changes to the quality and other characteristics of any item of work;
(iii) changes to the levels, positions, and/or dimensions of any part of
theWorks;
(iv) omission of any work unless it is to be carried out by others;
(v) any additional work, Plant, Materials, or services necessary for the
Permanent Works, including any associated Tests on Completion,
boreholes, and other testing and exploratory work; or
(vi) changes to the sequence or timing of the execution of the Works.
A. Implementing agencies should however be aware that notwithstanding
the requirement to obtain a no objection from ADB—either on a prior review
or postreview (sampling) basis—there are limits as to the scope of a variation,
although it is usually accepted that a variation should generally not “stray” outside
the contract original scope.
.... Process for Approval of Variation
A. Under construction contracts, variations are instructed by the Engineer
to the Contractor. Variation procedures vary wildly from one form of contract to
another. FIDIC forms of contract provide for a very prescriptive approach where
no prior agreement of the Contractor is required (although the Engineer may also
request a proposal to the Contractor prior to issuing the instruction to vary) and
where, subject to limited ground for objecting, “the Contractor shall execute and be
bound by each Variation” (footnote ). The Engineering Advancement Association
of Japan (ENAA) form of contract provides for a more “amicable” approach
where a proposal for variation must first be requested from the Contractor, with
an agreement to be reached on the price of making such proposal, and where
“Uponreceipt of the Change Proposal, the Employer and the Contractor shall mutually
agree upon all matters therein contained”.
A. It would therefore be useful that the CMP include, as reference
information, a diagram that illustrates in a graphic way all steps that are necessary
for issuing a variation under the contract, including securing a no-objection from
ADB, either on a prior review or postreview (sampling) basis.
Per FIDIC Contract MDB Harmonized Edition (June ), sub-clause . [Right to Vary].
Per ENAA form of International Contract for Process Plant Construction, sub-clause .
[Changes Originating from Employer].
Appendix 3
A. Finally, executing and implementing agencies should bear in mind that
for ADB-funded projects, for contracts subject to prior review, variations should
be submitted to ADB for no-objection. No-objection shall be issued by a dierent
level of authority within ADB whether the variation represents more than of
the accepted contract amount but less than million (in the aggregate with all
previous variations), or above million. A memo shall be submitted to ADB
setting out the rationale for the variation, the basis of its valuation, and the possible
impact on the time for completion. The executing and/or implementing agency
will have to agree with ADB on the funding of the variation, which may involve
reallocation of provision of price and/or quantity contingency under the loan
agreement, as well an extension of the loan closing date if required.
.... Variation Register
A. Sound contract management practice dictates that variations are kept
track of and monitored on a monthly basis. Since variations will usually impact the
final contract price, the cost consequences of variations, and the funding thereof,
should be monitored closely.
A. It is recommended that the responsibility for monitoring variations
shouldbe clearly established within the organization of the implementing agency
(orthePMU). TableA. shows what information the Variation Register
shouldinclude.
... Claims
A. Although claims may be initiated by either party, contrary to variations
that are usually the prerogative of the Employer, Contractors’ claims may be
considered as an equivalent recourse provided to the Contractor to initiate changes
that it considers necessary due to changed circumstances and risks.
A. Unless they are misused by a Contractor, claims should not necessarily be
considered as an act of hostility toward the Employer.
Table A.: Variation Register
Variation
Ref
Variation
Description
Date
Instruction
Issued
Estimated
Variation
Cost
Prior
Contract
Price
Estimated
Contract
Price
Current
Status
[insert] [insert text] [dd/mm/yy]
Appendix 3
.... Process for Claim Submission
andClaimDetermination
A. The claim process relies on strict processes. For the Contractor, the claim
process is usually a multitier process including, depending on the form of contract,
early warning notice and/or notice of claim, and submission of detailed and
substantiated claim. Each of these steps are usually framed within strict time limits,
noncompliance with which will elicit claim rejection. Under the FIDIC and ENAA
forms of contract, the notice of claim should be served “as soon as practicable, and
not later than days after the Contractor became aware, or should have become
aware, of the event or circumstance.
”
A. For his or her part, the Engineer is also bound to a strict timeframe for
conducting analysis and determination of the claim. It is worth underlining that
under most common forms of construction contracts such as FIDIC and ENAA,
the Engineer is empowered to perform certain determination and/or certifier
functions under the contract which requires a certain degree of impartiality
andfairness.
A. As for variations, it would be useful if the CMP includes a diagram of all
steps needed for claim submission and claim determination under the contract.
Under FIDIC First Edition (), sub-clause . [Contractor’s Claims]; FIDIC Second
Edition(), sub-clause .. [Notice of Claim]; and ENAA form of International Contract
forProcess Plant Construction, sub-clause . [Contractor’s Claims.]
<
DAYS
<
DAYS
<
DAYS
Event or
circumstance
Notice
of claim
Account of
fully detailed
claim
Response of
the Engineer
on the
principle
Engineer’s
initiative
Contractor’s
initiative
The Engineer
certifies
amount in
IPC
TIMEBAR
Sample of a Claim Process under FIDIC MDB Harmonized Edition
FIDIC = Fédération Internationale des Ingénieurs-Conseils (International Federation of Consulting
Engineers), IPC = interim payment certificate.
Appendix 3
.... Process for Claim Submission
andClaimDetermination
A. The claim process relies on strict processes. For the Contractor, the claim
process is usually a multitier process including, depending on the form of contract,
early warning notice and/or notice of claim, and submission of detailed and
substantiated claim. Each of these steps are usually framed within strict time limits,
noncompliance with which will elicit claim rejection. Under the FIDIC and ENAA
forms of contract, the notice of claim should be served “as soon as practicable, and
not later than days after the Contractor became aware, or should have become
aware, of the event or circumstance.
”
A. For his or her part, the Engineer is also bound to a strict timeframe for
conducting analysis and determination of the claim. It is worth underlining that
under most common forms of construction contracts such as FIDIC and ENAA,
the Engineer is empowered to perform certain determination and/or certifier
functions under the contract which requires a certain degree of impartiality
andfairness.
A. As for variations, it would be useful if the CMP includes a diagram of all
steps needed for claim submission and claim determination under the contract.
Under FIDIC First Edition (), sub-clause . [Contractor’s Claims]; FIDIC Second
Edition(), sub-clause .. [Notice of Claim]; and ENAA form of International Contract
forProcess Plant Construction, sub-clause . [Contractor’s Claims.]
<
DAYS
<
DAYS
<
DAYS
Event or
circumstance
Notice
of claim
Account of
fully detailed
claim
Response of
the Engineer
on the
principle
Engineer’s
initiative
Contractor’s
initiative
The Engineer
certifies
amount in
IPC
TIMEBAR
Sample of a Claim Process under FIDIC MDB Harmonized Edition
FIDIC = Fédération Internationale des Ingénieurs-Conseils (International Federation of Consulting
Engineers), IPC = interim payment certificate.
A. Unlike variations, claims – or more exactly the determination thereof by
the Engineer- do not require ADB’s no-objection since ADB, not being a party to
the contract, has no role in the claim process. Executing/implementing agencies
are nonetheless encouraged to engage with ADB to assess the potential impacts of
claim on the contract funding. In that respect, as for variations, claims may involve
reallocation of provision of price/quantity contingency under the loan agreement,
as well an extension of the loan closing date if required.
Appendix 3
.... Claim Register
A. Since claims, as for variations, are likely to have an impact the final
contract price, the cost consequences of claims and the funding thereof should be
monitored closely.
A. It is recommended that the responsibility for monitoring variations
should be clearly established within the organization of the implementing agency
(orthePMU).
A. The table below shows what information the Claim Register show include:
Table A.: Claim Register
Claim
Ref Description
Claimed
Amount
Submission
of Notice of
Claim
Submission
of fully
detailed claim
Status
toDate
Amount
Certified
[insert]
Causal event,
EOT claimed,
Cost/Profit
claimed
[Amount] [dd/mm/yy] [dd/mm/yy]
[e.g. in
progress
/ agreed /
rejected]
[Amount]
EOT = extension of time.
.. Section : Financial Management
... Payment approval; process flow
A. Financial management is perhaps the most fundamental contract
management process since it covers the main obligation of the Employer towards
its Contractor: paying the amount due under the contract—and more particular,
paying in due time. Usually, payment applications will have to be checked and
certified for payment by the Engineer. Besides, for contracts financed by ADB and,
as the case maybe, other co-financiers, this process will imply timely submission to
ADB of payments certificates or approved invoices. Due time allowance must be
made to enable payments to be made as per stipulated timeframe for payment.
A. It is thus recommended that the CMP include, as reference information,
the payment approval flowchart, showing all participants to the process
(theContractor, the Engineer, PMU, implementing agency contract and/or
financedepartment, ADB).
Appendix 3
... Payment Schedule
A. Sound contract management practice dictates to keep track and to
monitor on a monthly basis the payment made to the Contractor. Monitoring
payments can be recorded and monitored in a simple table as shown here below:
Table A.: Payment Schedule
Payment
Type
Application
[currency]
Application
Date
Certification
Date
(as per Contract)
Certification
Date
(Actual)
Amount
Paid
[currency]
Payment
Date
[e.g. Advance
Payment]
[Amount] dd/mm/yyyy dd/mm/yyyy dd/mm/yyyy [Amount] dd/mm/yyyy
[e.g. Interim
Payment No.]
[e.g. Interim
Payment No.X]
Total payment
to date
XXXX XXXX
... Evolution of the estimated contract price
A. Most contracts, especially construction contracts, provide for
various mechanisms to adjust the final contract price in response to changing
circumstances. The most common mechanisms are:
• Remeasurement of actual quantities under unit-price contracts;
• Price adjustment formulae for account for inflation;
• Variations (instructed by the Engineer);
• Claims (by either parties); and
• Disputes settlement.
ADB recommends that for contracts the duration of which is expected over months contain a
price adjustment clause to address the risk inflation.
Appendix 3
A. The contract final price will therefore be usually dierent from the
accepted contract amount that the parties have agreed on the date of signing, as
illustrated below:
A. It is therefore of the utmost importance to keep track and make
assessment of the final contract price, at all times, in order to ensure that the
financial resources will be sucient. This implies monitoring contingency
provisions that may have been budgeted (provision for change in quantities and
change in prices) for the project funding. This is one of the key elements that
should be reported to ADB in order, as may be required, to adjust the funding
arrangement (e.g. reallocating funds from one category to another). Monitoring the
evolution of the estimated contract final price can be monitored in a simple table as
shown here below:
Table A.: Evolution of Estimated Contract Price
Date
(month)
Accepted
Contract
Amount
Impactof
Remeasurement
Impactof
Variation
and Claims
Impact of other
adjustment
[e.g. changein
legislation]
Impactof
Disputes
Estimated
contract
price to
date
Month [Amount] [Amount] [Amount] [Amount] [Amount] [Amount]
Month
………
Month n
Appendix 3
... Comparison of progress versus payments
A. Monitoring payments must also be made against time so as to get a
notion of whether the contract is on-track. A basic approach “percentage of total
payment made vs percentage of total time elapsed” may give a first approximation
of what is the contract progress. This may be reflected graphically with two curves:
theplanned disbursement curve (“S” shape curve) together with the curve of
actual payments (cumulated), as shown below:
A. This simple approach may however be misleading if the actual (physical)
progress does not reflect the actual payments made to date: this may be the case
for instance because the remeasured quantities have been significantly in excess
of the estimated quantities as per the bills of quantities or because of unexpected
conditions (e.g. underground soil condition) which led to claims and, consequently,
to an increase in cost.
A. A more sophisticated approach called Earned Value analysis is therefore
recommended to obtain a more realistic picture of the actual progress. Under this
approach, a third curve is added in the above graph representing the budgeted cost
of works performed (also called the “earned value”). This can be calculated based
on the assessment of the physical progress achieved at a given point in time such
as the length of a road section completed, or the completion of a special milestone
(e.g., installation of generator in a power generation project), and by assessing the
“budgeted cost” of such milestone using the baseline payment curve.
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
Payment versus Time
Planned Payments Actual Payments
Appendix 3
A. As shown in the graph below, three parameters will then be assessed:
• BCWS: Budgeted cost of work scheduled (Planned Value or Planned
Payments)
• BCWP: Budgeted cost of work performed (Earned Value)
• ACWP: Actual cost of work performed (Actual Cost or Actual Payments)
.. Section : Disputes
A. Good contract management may prevent, or at least limit, the occurrence
of disputes. Some disputes may however be inevitable and therefore require
a careful management considering the cost and time impact they will have on
theproject.
A. Depending on the form of contract used, several dispute settlement
mechanisms are possible:
• dispute adjudication board (or dispute review board),
• judiciary court system versus arbitration procedure,
• alternative dispute resolution procedures such as mediation or
expertdetermination.
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
Earned Value Analysis
Planned Payments Actual Payments Earned Value
Appendix 3
A. ADB funded works contracts provide for three-tier dispute resolution
system such as illustrated below:
A. Obviously, disputes management requires close involvement of the
implementation agency at all stages considering the cost and potential financial
outcome. Simple tables such as shown below can be used to monitor the process.
... Disputes referred to the Dispute Board
Table A.: Matters referred to the Dispute Board
Referral
Ref
Referral
Date
Description of the
Dispute
Current Status of
DB Procedure
Decision
Date
Dissatisfaction
Notice (if any)
[insert ref] [dd/mm/yy] Causal event, EOT
claimed, Cost/Profit
claimed
[dd/mm/yy] [dd/mm/yy]
EOT = extension of time.
Appendix 3
... Disputes Referred to Arbitration
Table A.: Disputes Referred to Arbitration
Referral
Ref
Referral
Date
Description of the
Dispute
Current
Status
Decision
Date
Decision
Date
[insert ref] [dd/mm/yy] Causal event, EOT
Cost/Profit in dispute
[dd/mm/yy]
EOT = extension of time.
A. Among the cases usually referred to arbitration are disputes concerning
contract termination. The cases are particularly prone to costly and protracted
arbitration procedures. Executing/implementing agencies considering
terminating a contract should bear in mind that for ADB-financed projects,
ADB no-objection should be granted before triggering termination. A memo
should be submitted to ADB explaining the facts and contractual grounds for
termination; Executing/implementing agencies should also comment on the way
for completing the works covering mainly the issues of valuation of remaining
works, procurement arrangements for selecting a new contractor, impact on
funding arrangement and loan closing date.
.. Section : Environment, Social, Health and Safety,
and Security-Related Obligations
A. Environment, social, and health and safety (ESHS) safeguards, as well as
security management (if applicable in the country) are important contractor obligations
that need to be carefully monitored. Although, they may not necessarily impact on
the cost, time and quality of the works, proper compliance with these obligations lies
at the heart of ADB’s mandate. In addition to the obvious potential damage or harm
to the environment, the local population and to workers on site, itmust be stressed
that compliance is required in line with legal covenants and ADB Safeguards Policy
Statement (). Noncompliance with any of these obligations carry considerable
reputational risks to the implementing and executing agencies as well as to ADB.
A. There are two primary sources of information for such data: (i) the
Contractor’s monthly progress report; it is therefore important to make sure that,
atbidding document preparation stage, the corresponding reporting obligations are
duly stipulated in the works contract,
(ii) the reports that should be prepared by
the Engineer’s safeguards team and other experts (social and/or gender specialists).
Under FIDIC Contract MDB Harmonized Edition (June ), sub-clause .; FIDIC Second
Edition (), sub-clause .; and ENAA form of International Contract for Process Plant
Construction, sub-clause ..
Appendix 3
Both sources of information such be reconciled and synthesized by the Engineer
inthe progress report.
A. The tables below show the suggested format to be used in the CMP as
atemplate (tobe updated in each progress report):
Table A.: CEMP Activity Monitoring
Description of CEMP Activities
Corresponding
Submittal
Due /
Planned
Date
Actual
Date
Received
COVID Management Plan (re PCC .)
The Contractor shall take adequate safety and
precautionary measures to keep workers and
their families, visitors and people in contact, safe
from the possible infection; provide adequate
and appropriate PPE including facial covers to
the workers, hand sanitizers, washing facilities
in the office and residences; strictly follow the
Government imposed temporary or permanent
rules. It is recommended to follow the Guidance
Memorandum FIDIC COVID -: On-site working
and project team organization
HIV/AIDS prevention activities (re PCC .)
The Contractor shall conduct health and safety
programs for workers employed under the project
and shall include information on the trafficking
of women and the risk of sexually transmitted
diseases, including HIV/AIDs in such programs
Respectful Work Environment (re PCC .)
The Contractor shall conduct training programs
for its employees and Subcontractors to raise
awareness on and prevent any form of bullying,
discrimination, misconduct, and harassment
including sexual harassment, and to promote a
respectful work environment. The Contractor shall
keep an up-to-date record of its employees and
Subcontractors who have attended and completed
such training programs and provide such records
to the Employer or the Engineer at their first
written request
CEMP = contractor’s environmental management plan, PCC = Particular Conditions of
Contract, PPE = personal protective equipment, FIDIC = Fédération Internationale des
Ingénieurs-Conseils (International Federation of Consulting Engineers).
Note: PCC clause numbers refer to FIDIC Contract MDB Harmonized Edition (June 2010).
Sources: ADB. User’s Guide to Procurement of Works (June 2018). Manila; International Federation
of Consulting Engineers. 2010. FIDIC Contract MDB Harmonized Edition (June 2010). Geneva.
Appendix 3
Table A.: Social Safeguard Monitoring
Description of Social Safeguard
Activities
Corresponding
Submittal
Due/Planned
Date
Actual Date
Received
Compensation of temporary
impacts (structures, trees, income)
duringconstruction.
Unanticipated impacts during
construction (i.e., additional land
requirements, unidentified land/assets
owners, land borrowing, etc.)
Table A.: Health and Safety Monitoring
Health and Safety Activities
(including mobilization of resources)
described in the H&S Plan
Corresponding
Submittal
Due/Planned
Date
Actual Date
Received
Approval of Site-Specific Health
and Safety Plan
Activities described in the H&S Plan
[e.g., toolbox briefing/training/audit of
PPEs/audits of worker’s permits validity
for specialized or high risk work activities]
H&S = health and safety, PPE = personal protective equipment.
A. It is expected that the submittals on Health and Safety include,
as a minimum, tabular reports such as shown in the table below listing all
significant incidents or accidents which occurred on site including any corrective
measuresdecided.
On-Site Health and Safety Statistics
Current period
Average daily manpower (including Subs)
[Number-
Reporting Period]
[Number – Total in
Contract to date] [Comments]
Lost Time Injury (LTIn)
Lost Time Injury Frequency Rate (LTIFRn)
First Aid Injury (FAI n)
Medical Treatment Injury (MTIn)
Significant Near Misses (SNMn)
Total Recordable Injury Frequency Rate
(TRIFRn)
Appendix 3
On-Site Health and Safety Statistics
Current period
Average daily manpower (including Subs)
[Number-
Reporting Period]
[Number – Total in
Contract to date] [Comments]
Contract period to date
Average daily manpower (including Subs)
Lost Time Injury (LTI)
Lost Time Injury Frequency Rate (LTIFR)
First Aid Injury (FAI)
Medical Treatment Injury (MTI)
Significant Near Misses (SNM)
Total recordable Injury Frequency Rate
(TRIFR)
LTI = number of work-related injuries or disease that result in a fatality, permanent disability or
time lost from work. It could be as little as one day or shift (excluding the day of the incident).
LTIFR = number of lost-time injuries (LTIs) within a given accounting period, relative to the
totalnumber of hours worked in that period. The formula measures the number of LTIs per
million hours worked during an accounting period and is as follows:
FAI = number of injuries that requires a single first aid treatment and a follow up visit for
subsequent observation involving only minor injuries, and for which the person would typically
return immediately to their normal activities.
MTI = number of injuries or disease that resulted in a certain level of treatment given by a
physician or other medical personnel under standing orders of a physician other than on-site
first aid treatment.
SNM = number of unplanned events that did not result in injury, illness, or damage – but had
the potential to do so (i.e. ‘Close-Call’, ‘Nearly a Collision’, ‘Near Hit’).
TRIFR = number of injuries (excluding fatalities) requiring medical treatment per million hours
worked within an organization. The formula is as follows:
(Number of recordable injuries in accounting period) / (Number of hours worked by all staff
inthe same accounting period) x 1,000,000.
Appendix 3
A. Although most forms of contract provide for security measures to be taken
by the Contractor for the site operation
(fencing, lighting, signage), in some specific
countries the prevailing political situation and/or social instability mandates that specific
(and additional) security measures to be taken by the Contractor on site. Thismay
include designing specific operational procedures related to crisis management,
mobilizing dedicated personnel, and hiring specialized experts.
A. Best practice suggests that the ability of consultants, suppliers, or
contractors to deal with such specific security issues be evaluated as part of the
qualification process and that the cost of the security arrangements be part of the
bills of quantities (under the general items bill) or schedule of prices so that their
reasonableness be ascertained.
A. During contract implementation, all agreed security arrangements should
be carefully monitored to make sure that no human lives or property be put at
uncontrolled risks.
A. The tables below show the suggested format to be used in the CMP as a
template (tobe updated in each progress report):
Table A.: Security Monitoring
Evolution of the
security situation
in the project area
Security resources
Incidents
reported during
previous month Comments
As planned in
Security Plan
Actual on
Site
LARP = land acquisition and resettlement plan
Under FIDIC Contract MDB Harmonized Edition (June ), sub-clause .; FIDIC Second
Edition (), sub-clause .; and ENAA form of International Contract for Process Plant
Construction, sub-clause ..
Appendix 3
.. Section : Completion of work and contract closure activities
A. Good contract management mandates that not only the implementation
phase of the contract be monitored, but also that the “clean” and proper closure
contract be managed. This is important for both parties
• The Contractor will seek to receive from the Employer a statement that,
apart ongoing warranties (if applicable), all of its obligations have been
completed in accordance with the contract (the performance certificate).
The Contractor will also have to report to its bank(s) that outstanding
guarantees (performance guarantee, retention guarantee or others) were
returned so that they can be written o the books. The Contractor will have
to report to its insurers that the periods of coverage for the various policies
issued have lapsed (contractor’s all risks, workmen’s compensation and
employer’s liability, third party liability, professional indemnity, etc.).
• The Employer (implementing agency) will must ensure that all defects notified
at the taking over (snag list) and during the defect notification period were duly
remedied, all operation and maintenance manuals (if applicable) and as-built
drawings and documents were submitted in full and proper order, all due
payments were eected in line with the Contractor’s final statement and that
proper discharge therefor was given by the Contractor.
A. It must be ensured that no outstanding claims or disputes remain
unattended and that all such matters be closed.
A. Contracts usually provide for detailed procedures to be complied with
at taking over and at the contract closure, i.e., at the end of the defect notification
period. The following is a non-exhaustive list of activities, stated in the contract,
that are required to be undertaken precedent to contract closure.
Table A.: Contract Closure Activities
Clause Action Responsible
Due
Date
Actual
Date
GCC Test on Completion Contractor
GCC . Application for a taking over certificate Contractor
GCC . Issuance of the Taking Over Certificate Engineer
GCC . Certification of payment/return of
of the retention Money
Engineer
GCC . (If used) issuance of a Retention Money
Guarantee (RMG) for the release of the
second half of the retention.
Contractor
GCC
.
Statement at Completion Contractor
continued on next page
Appendix 3
Clause Action Responsible
Due
Date
Actual
Date
GCC . Notification of Defects Employer ……………
……………
GCC . Remedying of Defects Contractor ……………. …………….
GCC . End of Defects Notification Period
(DNP) and extension thereof (if
applicable)
Employer
GCC . Issuance of Performance Certificate Employer
GCC . Clearance of Site Contractor
GCC . Return of Performance Security Employer
GCC . Payment of outstanding balance of
Retention Money
Engineer
GCC . (if an RMG is used): Return of the RMG Employer
GCC . Application for Final Payment Certificate Contractor
GCC. Issuance of Final Payment Certificate Engineer
GCC = General Conditions of Contract, RMG = retention money guarantee, DNP = defect
notification period.
Note: GCC clause numbers refer to FIDIC Contract MDB Harmonized Edition (June 2010)
Source: International Federation of Consulting Engineers. 2010. FIDIC Contract MDB Harmonized
Edition (June 2010). Geneva.
A. Finally, contract closure activities will rely on a robust document
management system allowing to retrieve any contract documents (notably as-built
drawings and/or asset condition survey report after construction) for future use
such as preparation of other projects.
.. Section : Recent Photographs of Site Activities
and Quality Observations
A. This section is self-explanatory. A number of photographs or video
footage (ifavailable) should be selected to illustrate the progress of the works and
any technical problem that may need graphically described.
A. Depending on the size and complexity of the works, up to photographs
should suce for this purpose.
A. It would be advisable to record all nonconformities, corrective, and/or
preventive measures during construction. This would allow identification of
systemic errors and gaps in the execution of certain tasks, design flaws, etc.
Table A. continued
Appendix 3
. Description of Part B (Contract Key Data) of the Contract
Management Plan
A. This is the descriptive (or static) part of the CMP. It contains all
descriptive elements of the contract which will normally not vary over the duration
of the contract, or perhaps only in limited circumstances (e.g. replacement of
one key stakeholder such as the Engineer or the Contractor’s representative).
Theseelements will nonetheless provide a useful source of reference information.
A. It is suggested that this part be structured in three sections:
• Section : Contracts details,
• Section : Communications and Reporting
• Section : Securities and Insurances
A. Each of these sections is generally self-explanatory as is shown
here-below. Securities and Insurance may be monitored as part of the Contract
Start-up Activities (Partof the Monthly progress report) since these must
be submitted at the early stage of the contract (before or shortly after the
commencement date). However, once duly submitted and verified, these items
will remain under the custody of the employer (implementing agency) and, except
for renewal and extension, will remain unchanged until the end of the defect
notification period and the release of the performance certificate
A. The tables hereinafter show the format that may be used for these elements:
.. Section : Contract Details
Table A.: Contract Details and Key Dates
Employer name
Contractor name
Contract title
Contract Number
Accepted Contract Amount (Currency/ies)
Date of Issuance of Letter of Acceptance
Commencement Date
Under the FIDIC contract MDB Harmonized Edition (June ), changes may however
occur to the performance security during the contract implementation period since the
contract conditions (sub-clause .) provide that its amount should be increased or decreased
whenever the contract price increase or decrease by more than due to a change in cost
(priceadjustment), change in legislation or a variation.
continued on next page
Appendix 3
Sections (Yes/No).
If yes provide details.
Time for Completion (days)
Defects Notification Period (days)
Location of the Site
ADB loan number and title
ADB Loan Effectiveness Date [insert effectiveness date of ADB loan/grant]
ADB Loan Closing Date [insert closing date of ADB loan/grant]
ADB = Asian Development Bank
.. Section : Communications and Reporting
... Key Points of Contact
A. The following table lists the main points of contact under the Contract
Table A.: Contact Details
Ref Name Title Position Phone Email
Executing Agency:
[INSERT NAME]
. Employer
.
Implementing Agency
[INSERT NAME] and PMU
.
.
Contractor:
[INSERT NAME]
. Contractor’s
Representative
. H&S Officer
Engineer [inset relevant position depending on contract terms]: [INSERT NAME]
. Engineer’s
Representative
. Other personnel
(specify
delegated
authority)
Table A. continued
continued on next page
Appendix 3
Ref Name Title Position Phone Email
ADB:
[INSERT ADB HQ or other ADB office overseeing project]
. Project Team
Lead
. Other officers
(specify their
role)
Dispute Board Members
.
.
.
Other
[e.g. Co-financing Partners etc]
.
.
H&S = health and safety, ADB = Asian Development Bank, HQ = headquarters.
... Meeting Schedule
Table A.: Meeting Schedule
Meeting Chair
1
Attendees
25
Frequency
Last
meeting
Next
meeting
Executive meeting [e.g. ] [e.g. , , , , etc.] [e.g. every six
months or as
required]
[insert date] [insert date]
Management
meeting
[e.g. every quarter or
as required]
[insert date] [insert date]
Operations meeting [e.g. every month] [insert date] [insert date]
Site Meetings [insert date] [insert date]
Community /
stakeholder meeting
[e.g. as per
project’s CCP]
[e.g. as per project’s
CCP]
[insert date] [insert date]
ADB Oversight
meeting
[e.g. every Quarter] [insert date] [insert date]
ADB = Asian Development Bank, CCP = community communication plan
Numbers inserted refer to individuals started in Table . above.
Table A. continued
Appendix 3
A. A summary list of items that may be discussed at the meetings stated
above is contained in AppendixB. All meetings to be documented with minutes
shared to all attendees.
... Reporting
Table A.: Reporting Schedule
Report Type Circulation
1
Responsible Frequency
Last Report
(due date)
Last Report
(date issued)
Next Report
(due date)
[Construction
progress report]
[e.g. , , , ,
etc.]
[Contractor] [e.g.
monthly]
[insert date] [insert date] [insert date]
[progress report] [IA/PMU] [insert date] [insert date] [insert date]
[Semi-annual
Safeguards
Monitoring
Report]
[IA/PMU] [insert date] [insert date] [insert date]
.. Section : Securities and Insurances
... Bank Guarantees / Securities
Table A.: Guarantees and Security – Main Details
Security type
Advance
Payment
Guarantee
Performance
Security
Retention
Guarantee
(if applicable)
Contract Clause, if relevant . . –
Name of Bank
Correspondent Bank,
ifapplicable
Amount of security
[currency]
Date to be received
[dd/mm/yyyy] [dd/mm/yyyy] [dd/mm/yyyy]
Date actually received
[dd/mm/yyyy] [dd/mm/yyyy] [dd/mm/yyyy]
Expiry date
[dd/mm/yyyy] [dd/mm/yyyy] [dd/mm/yyyy]
Date days prior to expiry
[dd/mm/yyyy] [dd/mm/yyyy] [dd/mm/yyyy]
Appendix 3
... Insurances
Table A.: Insurance details
Insurance type
Works and
Contractor’s
Equipment
Third Party
Insurance
Contractors
Personnel
Contract Clause . . .
Insurer
Policy no.
Amount of Insurance
Date to be received
[dd/mm/yy] [dd/mm/yy] [dd/mm/yy]
Date actually received [dd/mm/yy] [dd/mm/yy] [dd/mm/yy]
Expiry date [dd/mm/yy] [dd/mm/yy] [dd/mm/yy]
Appendix 3
V. CMP IMPLEMENTATION NOTES
A. This section provides guidance for setting out the actual contract
management plan (CMP) and maintaining it throughout the life of a specific
project. It provides information on where to collect the relevant information and
how to use it.
A. It is the Engineer and/or Project Manager’s responsibility to obtain the
necessary data (each month) from the Contractor, Consultants, and Employer
and to submit the report to the Employer. The instructions below explain what is
expected in each section, followed by an illustrative case of a monthly contract
management plan.
PART A
. Project Background and Key Data
[Most of this information will not change throughout the project’s life cycle. Insert once
and do not change unless necessary. Add further items if you think it is required.]
PROJECT NUMBER AND TITLE
CONTRACT SCOPE
CONTRACT TYPE
EMPLOYER
MAIN CONTRACTOR
ENGINEER / PROJECT MANAGER
CONTRACT AMOUNT
COMPLETION DATE
CONTRACT SIGNING DATE
COMMENCEMENT DATE
. Executive Summary
[This part should be updated monthly and only contain major items. Examples follow:]
• Cash-Flow: actual versus planned
• Physical progress: describe main progress activities during the month
• Describe main risks/challenges/issues encountered during the month.
Especially those connected to the critical path.
Appendix 3
. Monthly Project Update
.. Permits, Licenses and Approvals
[List all Permits, Licenses, and Approvals and update each month if required. These should be
country-specific requirements such as development consent/environmental license, certificate
for imported materials and equipment, materials permit, quarry permit, water discharge
permit etc].
.. Contract Start-up Activities and Submittals
a. LARP Processing
A. This table only needs to be completed if a sectional approach is being
utilized.
Section
Definition
Implementation
status
Clearance of LARP
Compliancereport
CommentsDue Date Actual Date
LARP = land acquisition and resettlement plan.
b. General start up activities
A. The items below are only examples and additional items may be needed
to be added and/or deleted depending on the particular project.
Clause Action Responsible
Due
Date
Actual
Date Comments
Residual Tender Stage Actions
ITB . Issuance of Letter of Acceptance
(LoA)
Employer
ITB . Return Bid Security to Contractor Employer
ITB . Contract Agreement Signature Employer and
Contractor
Contract Requirements
GCC . Provision of Performance Security Contractor
GCC . Evidence of the Employer’s Financial
Arrangements
Employer
GCC . Effective Access to and Possession
of the Site
Employer
GCC . Provision of Advance Payment
Guarantee
Contractor
Appendix 3
Clause Action Responsible
Due
Date
Actual
Date Comments
GCC .
and .
Submission and certification of
application for Advance Payment
Contractor
GCC . Payment of Advance Payment Employer
PCC . Preparation and submission of
the Contractor’s Environmental
Management Plan
Contractor
GCC . Commencement Date Engineer
Contract Activities required within days of Commencement Date
GCC . Submission of Detailed Program Contractor
GCC . Provision of Insurances
(See Section )
Contractor
GCC . Appointment of Dispute Board
and signature of the Dispute
Agreement(s) by the parties
Employer and
Contractor
ITB = instructions to bidders, GCC = General Conditions of Contract, PCC = Particular Conditions
of Contract.
Note: GCC clause numbers refer to FIDIC Contract MDB Harmonized Edition (June 2010).
Sources: ADB. User’s Guide to Procurement of Works (June 2018). Manila; International Federation
of Consulting Engineers. 2010. FIDIC Contract MDB Harmonized Edition (June 2010). Geneva.
c. Mobilization Activities
The items below are only examples and additional items may need to be added or
deleted depending on the particular project.
Clause Action Reference
Scheduled
Date
Actual
Date Variance
GCC
./.
Establishment of Site boundaries,
compound, offices etc.
Program
GCC
.../.
Mobilization of Contractor’s
Equipment
Program
GCC
.../.
Mobilization of Contractors
Personnel
Program
GCC = General Conditions of Contract.
Note: GCC clause numbers refer to FIDIC Contract MDB Harmonized Edition (June 2010).
Source: International Federation of Consulting Engineers. 2010. FIDIC Contract MDB Harmonized
Edition (June 2010). Geneva.
Appendix 3
.. Risk Management
A. This table is updated monthly and should only contain risks that are
considered high and would have a serious impact on the project. This is a very
important part of the report and all major risks should be stated and have proposed
mitigation measures. A description of how to categorize risk has been included in
Appendix A. Please note that a full project risk register should be attached to the
CMP as an appendix.
.. Program Monitoring
A. This Sub-Chapter is updated monthly and should contain the items
below. If the program is experiencing delays, then this needs to be highlighted and
mitigation measures stated.
• Level * program
• Tabular form of progress – planned dates, actual dates, variances
• Graphical form – line graph illustrating actual verses planned progress
• Pie chart – overall progress (), time elapsed, time remaining
• One month look ahead table with target dates
• Short paragraph on critical path
* A Level Schedule is a high-level integrated project schedule for the
entire project time frame that is used for high level internal and external
management This schedule shows the project milestones of engineering,
procurement, construction, and start-up activities.
.. Variations and Claims
A. These tables are to be updated monthly and contain all claims and
variations submitted.
.. Financial Management
a. Payment Schedule
A. This table records all payments related to the contract – including
contractor, PMC, consultants, etc.
Evolution of the Estimated Contract Price
A. This table records the impacts of variations, claims, disputes, etc. It shows
why the contract cost has increased or decreased.
Comparison of Progress versus Planned Payments
[Insert a graph illustrating the dierence between planned payments (cashflow) and actual
payments. If there is a significant dierence, then a comment should be made explaining why.]
Appendix 3
b. Earned Value
[Insert a graph that illustrates the Earned Value. If there is a significant dierence, then a
comment should be made explaining why.]
.. Disputes
[Insert any information relating to disputes in these two tables.]
.. Environment, Social, Health and Safety, and Security-
Related Obligations
a. CEMP activity Monitoring
Record all CEMP activities in this table.
Description of CEMP Activities
Corresponding
Submittal
Due / Planned
Date
Actual Date
Received
CEMP = contractor’s environmental management plan.
b. Social Safeguards monitoring
[Record all Social Safeguards monitoring activities in this table.]
Description of Social Safeguard
Activities
Corresponding
Submittal
Due / Planned
Date
Actual Date
Received
COVID Management Plan (re PCC .)
HIV/AIDS prevention activities (re PCC .)
Respectful Work Environment (re PCC .)
PCC = particular conditions of contract.
Note: PCC clause numbers refer to FIDIC Contract MDB Harmonized Edition (June 2010).
Source: International Federation of Consulting Engineers. 2010. FIDIC Contract MDB Harmonized
Edition (June 2010). Geneva.
c. Health and Safety Monitoring
[Record all Health and Safety monitoring activities in this table.]
A. The information is to be added exactly as per the table. No deviation
ispermitted.
Appendix 3
Health and Safety Accidents Reports on Site
Current period
Average daily manpower (including Subs)
Lost Time Injury (LTIn)
Lost Time Injury Frequency Rate (LTIFRn)
First Aid Injury (FAI n)
Medical Treatment Injury (MTIn)
Significant Near Misses (SNMn)
Total Recordable Injury Frequency Rate (TRIFRn)
Contract period to date
Average daily manpower (including Subs)
Lost Time Injury (LTI)
Lost Time Injury Frequency Rate (LTIFR)
First Aid Injury (FAI)
Medical Treatment Injury (MTI)
Significant Near Misses (SNM)
Total recordable Injury Frequency Rate (TRIFR)
LTI = number of work-related injuries or disease that result in a fatality, permanent disability or
time lost from work. It could be as little as one day or shift (excluding the day of the incident).
LTIFR = number of lost-time injuries (LTIs) within a given accounting period, relative to the
totalnumber of hours worked in that period. The formula measures the number of LTIs per
million hours worked during an accounting period and is as follows:
(Number of LTIs in accounting period) / (Total hours worked in accounting period)x 1,000,000
FAI = number of injury that requires a single first aid treatment and a follow up visit for
subsequent observation involving only minor injuries, and for which the person would typically
return immediately to their normal activities.
MTI = number of injuries or disease that resulted in a certain level of treatment given by a
physician or other medical personnel under standing orders of a physician other than on-site
first aid treatment.
SNM = number of unplanned events that did not result in injury, illness, or damage – but had
the potential to do so (i.e. ‘Close-Call’, ‘Nearly a Collision’, ‘Near Hit’).
TRIFR = number of injuries (excluding fatalities) requiring medical treatment per million hours
worked within an organization. The formula is as follows:
(Number of recordable injuries in accounting period) / (Number of hours worked by all staff in
the same accounting period) x 1,000,000.
Appendix 3
d. Security Monitoring
[Record all Security monitoring activities in this table]
.. Completion of Work and Contract Closure Activities
A. The following is a non-exhaustive list of activities, stated in the Contract,
that are required to be undertaken precedent to Contract Closure. Additional items
may need to be added / deleted depending on the particular project.
Clause Action Responsible Due Date Actual Date
GCC Test on Completion Contractor
GCC . Application for a taking over certificate Contractor
GCC . Issuance of the Taking Over Certificate Engineer
GCC . Certification of payment/return of
ofthe retention Money
Engineer
GCC . (If used) issuance of a Retention Money
Guarantee (RMG) for the release of the
second half of the retention.
Contractor
GCC . Statement at Completion Contractor
GCC . Notification of Defects Employer ……………
……………
……………
GCC . Remedying of Defects Contractor …………….
…….………
….…………
…………….
…….………
….…………
GCC . End of Defects Notification Period (DNP)
and extension thereof (if applicable)
Employer
GCC . Issuance of Performance Certificate Employer
GCC . Clearance of Site Contractor
GCC . Return of Performance Security Employer
GCC . Payment of outstanding balance of
Retention Money
Engineer
GCC . (if an RMG is used): Return of the RMG Employer
GCC . Application for Final Payment Certificate Contractor
GCC. Issuance of Final Payment Certificate Engineer
GCC = General Conditions of Contract, DNP = defect notification period, RMG = retention
money guarantee.
Note: GCC clause numbers refer to FIDIC Contract MDB Harmonized Edition (June 2010).
Source: International Federation of Consulting Engineers. 2010. FIDIC Contract MDB Harmonized
Edition (June 2010). Geneva.
Appendix 3
.. Site Photographs
A. Only add photos taken in period that the report covers.
PART B
A. A majority (but not all) of part B can be completed once and would not
needupdating.
. CONTRACT DETAILS
Only update when required.
. COMMUNICATIONS AND REPORTING
a. Key Points of Contact
(i) Only update when required.
b. Meeting Schedule
(ii) Once agreed, only update when required.
c. Reporting
(iii) Once agreed, only update when required.
. SECURITIES AND INSURANCES
a. Bank Guarantees / Securities
Record all guarantees and security information in this table.
b. Insurances
Record all insurances in this table.
Appendix : Example of Application
oftheContract Management Plan
A. This is a fictional report based on a fictional project in a fictional location.
Itis intended as an illustration of the format and presentation of contents in a
contract management plan.
SCHOOL PROJECT
MONTHLY PROGRESS REPORT
Reporting Period: – MAY
• Located inside the
Tarouk neighborhood
• The school will
open in September
and offer an
American curriculum
from gradeto to
,students
• The facilities will
includeseparate
campuses for
foundation, primary,
and secondary students,
as well as swimming
pools, an auditorium,
and sophisticated
laboratories
(photo by Glen Harris/Turnkey Project Management).
Appendix 4
PART A
. Project Key Data
FORMAL PROJECT NAME ADB School
PROJECT SUMMARY The project aims to provide education to the
children of Tarouk and involves construction of a
school complex. The school complex is located
inside the Tarouk development at the East end
of Messa Street. The school will typically be built
as a G structure, with the building system
consisting of ………...
CONTRACT SCOPE Design and build for , students
CONTRACT TYPE Design and Build
EMPLOYER Department of Education, Hopeland
MAIN CONTRACTOR Perry Mason, Contractor LTD
DESIGN CONSULTANT XYZ Architects
PROJECT MANAGEMENT COMPANY Turner & Turner
CONTRACT AMOUNT Million
PLANNED COMPLETION DATE September
CONTRACT SIGNING DATE June
COMMENCEMENT DATE August
. Executive Summary
A. The project is currently days in delay and complete
(i) The Contractor forecasts that the construction completion will be
in early November and will submit a recovery program at the
end of June , which will entail options on how to complete
the project as per the original competition date. The project made
good progress in May , with all the key items listed in the
April-month look ahead being completed.
(ii) The major challenges encountered centered on obtaining necessary
permits from the municipality that were required to complete pours
in Blocks B and C. A meeting between the Contractor, project
management consultant (PMC), municipality resolved this issue and
no delay was encountered.
(iii) The project is currently forecast as being overbudget by million.
A value engineering workshop is planned for June where all
parties can propose cost-cutting measures. All permits have now
been obtained.
Appendix 4
. Monthly Project Update
A.. Permits, Licenses, and Approvals
Application
Type
Relevant
Law or
Regulation
Responsible
Party
Approving
Authority
Due /
Planned
Date
Actual
Date
Current
Status /
Comment
Environmental
Consent
Resource
Management
Act
Employer Environment
Hopeland
// // Obtained
Temporary
Traffic
Management
Plan Approval
Local
Transport
Regulation
A
Contractor Hopeland
Transport
// // Obtained
Hoarding Permit Hopeland
Municipality
.
Contractor Hopeland
Municipality
// // Obtained
Soil Removal
Permit
Hopeland
Municipality
. B
Contractor Hopeland
Municipality
// // Obtained
Building Permit
Block B
Hopeland
Municipality
. B
Contractor Hopeland
Municipality
// Documents
resubmitted
to
municipality:
//
Expected
approval
//
.. Contract Start-Up Activities and Submittals
Table A.: Land Acquisition and Resettlement Plan Processing
Section
Definition
Implementation
Status
Clearance of LARP Compliance
Report
CommentsDue Date Actual Date
LARP = Land Acquisition and Resettlement Plan.
Note: To be prepared in case of sectional approach. Not Applicable for this project
Appendix 4
Table A.: General Start-Up Activities
Clause Action Responsible
Due
Date
Actual
Date Comments
Residual Tender Stage Actions
ITB . Issuance of letter of
acceptance
Employer // //
ITB . Return bid security to
Contractor
Employer // //
ITB . Contract agreement
signature
Employer
and
Contractor
// //
Contract requirements
GCC . Provision of performance
security
Contractor // //
GCC . Evidence of the
employer’s financial
arrangements
Employer // //
GCC . Effective access to and
possession of the site
Employer // //
GCC . Provision of advance
payment guarantee
Contractor // //
GCC .
and .
Submission and
certification of application
for advance payment
Contractor // //
GCC . Payment of advance
payment
Employer // //
PCC . Preparation and
submission of
the Contractor’s
environmental
management plan,
including health and
safety management plan
Contractor // //
GCC . Commencement date Engineer // //
Contract Activities Required Within Days of Commencement Date
GCC . Submission of detailed
program
Contractor // //
continued on next page
Appendix 4
Clause Action Responsible
Due
Date
Actual
Date Comments
GCC . Provision of insurances
(see section )
Contractor // //
GCC . Appointment of dispute
board and signature of
the dispute agreement(s)
by the parties
Employer
and
Contractor
// //
ITB = Instructions to Bidders, GCC = General Conditions of Contract, PCC = Particular
Conditions of Contract.
Note: All ITB clause numbers refer to Section 1 of the ADB Standard Bidding Document in the
User’s Guide to Procurement of Works (June 2018). GCC/PCC clause numbers refer to FIDIC
Contract MDB Harmonized Edition (June 2010).
Sources: ADB. User’s Guide to Procurement of Works (June 2018). Manila; International Federation
of Consulting Engineers. 2010. FIDIC Contract MDB Harmonized Edition (June 2010). Geneva.
Table A.: Mobilization Activities
Clause Action Reference
Scheduled
Date
Actual
Date Variance
GCC
./.
Establishment of site boundaries,
compound, offices etc.
Program // //
GCC
.../.
Mobilization of Contractor’s
equipment
Program // //
GCC
.../.
Mobilization of Contractor’s
personnel
Program // //
GCC = General Conditions of Contract.
Note: All GCC clause numbers refer to FIDIC Contract MDB Harmonized Edition (June 2010).
Source: International Federation of Consulting Engineers. 2010. FIDIC Contract MDB Harmonized
Edition (June 2010). Geneva.
Table A. continued
Appendix 4
.. Risk Management
A. The following section highlights the main risks related to this reporting
period. Two risks were identified in the project risk register and one risk is new.
Reference Risk Description
Risk
Level Mitigation Measure
Risk Owner
(person
responsible)
Building Permit Block B:
The Contractor has not
yet been able to obtain the
permit to pour the last slab.
It is now weeks overdue.
High Meeting has been
arranged (June )
with the municipality
to discuss what was
required to obtain
approval. Once permit is
obtained, the Contractor
will work night shifts to
make up the lost time
Contractor
New Façade Specifications:
Due to a change in fire
regulations, the façade
specification will need to be
changed. This could have
cost and time implications.
High Design consultant will
propose an updated
specification to the
Contractor. PMC will
request Employer
sign-off with respect to
aesthetics.
Design
Consultant
Level difference between
site and existing road.
The actual road height is
different from what is stated
on the municipal records.
This is delaying approval on
the final site access points.
High The Contractor will
request municipal
surveyor to check height
and update municipal
records.
Contractor
PMC project management consultant.
.. Program Monitoring
Commencement Date : August
Initial Contractual Completion Date: September
Time Elapsed: .
Planned Early: .
Planned Late: .
Actual Progress: .
Expected Completion Date: November
Variance to Completion: – days
Appendix 4
Table A.: Current Program vs Baseline Program Milestones
BCC = building completion certificate.
# Description
Recovery
Program
– Milestone
Completion
(a)
Updated
Program
– Rev 0.
Forecast
April 16
(b)
Updated
Program
– Rev 0.
Forecast
May 16
(c)
Variance
Total
(a-c)
Variance
Period
(b-c)
1 Issuance of Building Permit 27 Feb 2021 27 Feb 2021 27 Feb 2021 0 Days 0 Days
2
Completion of concrete for
superstructure
16 April 2021 23 April 2021 23 April 2021 –7 Days 0 Days
3
Completion of structural
steel for superstructure
30 April 2021 19 May 2021 29 May 2021 –29 Days –10 Days
4
Connection availability
for main services (water,
power, drainage)
1 June 2021 1 June 2021 1 June 2021 0 Days 0 Days
5 Wild air availability 15 June 2021 9 July 2021 12 July 2021 –27 Days –3 Days
6 Completion of lift works 27 June 2021 19 July 2021 29 May 2021 29 Days 51 Days
7 Completion of facade works 28 June 2021 24 July 2021 2 Aug 2021 –35 Days –9 Days
8
Temporary permanent
power
4 July 2021 26 July 2021 4 Aug 2021 –31 Days –9 Days
9
Completion of fine finishes
(after wild air)
27 July 2021 9 Aug 2021 23 Aug 2021 –27 Days –14 Days
10
Completion of external
works
18 July 2021 7 Aug 2021 22 Aug 2021 –35 Days –15 Days
11
Issuance of building
completion certificate
(BCC)
23 Aug 2021 14 Sept 2021 25 Sept 2021 –33 Days –11 Days
12
Completion of works and
handover to client
24 Aug 2021 15 Sept 2021 25 Sept 2021 –32 Days –10 Days
13 School opens 28 Aug 2021 19 Sept 2021 29 Sept 2021 –32 Days – 10 Days
Appendix 4 81
Figure A4.1: Earned Value Analysis for the Reporting Period
Appendix 4
Figure A.: Time Analysis Chart
Time Elapsed
Overall Progress
Time Remaining
.. Program Overview
A. The recovery program approved on May continues to reduce
delays (previously days in April). Given the current progress, the school will open
on time. As can be seen from the “OneMonth Look Ahead” chart, the delay is
targeted to decrease to days by the end of next month.
. Critical Path
A. The critical path is moving through the “wet” trades (plastering);
mechanical, electrical, and plumbing (MEP) trades; and finishes for the
second-floor block D. The local electricity authority inspection, power on,
andtesting and/or commissioning are also on the critical path.
Appendix 4
Table A.: One Month Look Ahead
Targets Target Date
Commencement of Landscaping Works
Transformer Delivery
Pump Room Works s Completion for Civil Defense
LV Cable Pulling – Site Wide
Completion of Infrastructure Works
EIFS Completion – All buildings
Block A, B, C & D Roof Civil & MEP Works Completion
Wild Air On
LV Works Inspection – local utility
Sports Block Façade Completion
1 June, 2021
2 June, 2021
11 June, 2021
11 June, 2021
12 June, 2021
12 June, 2021
15 June, 2021
18 June, 2021
20 June, 2021
20 June, 2021
25 June, 2021
25 June, 2021
Month
Contract Completion Date
Days to Completion
Variance Last Month
Target Variance
May 2021
24 August 2021
84
32
15
Appendix 4
.. Variations and Claims
Table A.: Variation Register
Variation
Ref
Variation
Description
Date
instruction
Issued
Estimated
Variation
Cost
Prior
Contract
Price
Estimated
Revised
Contract
Price
Current
Status
Table A.: Claim Register
Claim
Ref Description
Claimed
Amount
Submissionof
Notice of
Claim
Submission
of Fully
Detailed
Claim
Status to
Date
Amount
Certified
The Contractor
claims that
the site was
disrupted
between
and May
because the
Ministry of
Education
wanted to
organize a
site visit for
the UNESCO
envoy
EOT and
prolongation
cost: not yet
quantified at
the present
juncture
Notice of
claim was
submitted on
May
Not yet
received
Notice of
claim was
received
timely, the
Engineer is
monitoring
the
Contractor’s
records
Not yet
applicable
EOT = extension of time, UNESCO = united nations educational, scientific and cultural
organization.
Appendix 4
.. Financial Management
A. The project was budgeted to have incurred costs of million up until
the end of May . It has currently incurred costs of million. The payments
to date are outlined below.
Table A.: Schedule of Payments
Item Date Cost ($)
Advance Payment to Contractor January ,,
PMC monthly payment January ,
Design supervision monthly payment January ,
Geotechnical and Topography Survey January ,
PMC monthly payment February ,
Design supervision monthly payment February ,
Contractor payment February ,,
PMC monthly payment March ,
Design supervision monthly payment March ,
Contractor payment March ,,
PMC monthly payment April ,
Design supervision monthly payment April ,
Contractor payment April ,,
PMC monthly payment May ,
Design supervision monthly payment May ,
Contractor payment May ,,
Total ,,
PMC = Project Management Consultant.
Figure A.: Comparison of Actual and Planned Payments
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Jan-16 Feb-16 Mar-16 Apr-16 May-16
Actual Planned
Appendix 4
.. Disputes
A. There are no disputes to date.
.. Environment, Social Health and Safety, and Security-Related
Obligations
A. No particular noncompliance event has occurred on site in relation to
environment, social, health and safety, and security-related obligations.
A. There has been a local government environmental consent compliance
audit on site carried out with inspector Dr. Swampfield on May , wherein a
rating of .(very good) was received. The audit record is attached as Appendix .
A. There was one workplace incident involving concrete burn injury on
May . The concerned worker was given medical treatment at a nearby
clinic and was o-work for days before allowed to resume light activities on
site. Incident report with details on the event cause, actions, and lesson learned
was circulated to the site team on May , and a specific toolbox briefing on
concrete work safety was held on May .
A. In the upcoming month, the focus will be on the following:
(i) setting up the site to be ready for carrying out work in the monsoon
season, and
(ii) community liaison group meeting June .
Table A.: Contractor’s Environmental Management Plan Activity Monitoring
Description of Activities
Corresponding
Submittal
Due or
Planned Date
Actual Date
Received
Approval of the CEMP CEMP v. // //
General site kick start briefing and training Briefing record // //
HSE committee set up Site memo // //
HSE audit by project steering committee
(Month )
Audit record // //
HSE audit by project steering committee
(Month )
Audit record // //
Site shut down by Engineer due to utilities
work incident
Site memo – //
HSE audit by project steering committee
(Month )
Audit record // //
Site waste recycling and/or reuse training Training record // //
Safe utilities work training Training record -// -//
continued on next page
Appendix 4
Description of Activities
Corresponding
Submittal
Due or
Planned Date
Actual Date
Received
HSE audit by project steering committee
(Month )
Audit record // //
HSE audit by project steering committee
(Month )
Audit record // //
HSE audit by project steering committee
(Month )
Audit record // //
Worksite HSE audit by Hopeland
Worksafe
Audit record -// //
ADB safeguard site audit on HSE Audit record – //
HSE audit by project steering committee
(Month )
Audit record // //
Working at Height training Training record -//
Environmental audit by Hopeland
Environment
Audit record –// //
HSE audit by project steering committee
(Month )
Audit record // //
HSE audit by project steering committee
(Month )
Audit record // //
Environmental audit by Hopeland
Environment
Audit record –// //
ADB = Asian Development Bank, CEMP = contractor’s environmental, management plan,
HSE = health, safety, and environment.
Table A.: Social Safeguard Monitoring
Description of Social
SafeguardActivities
Corresponding
Submittal
Due / Planned
Date
Actual Date
Received
Community liaison group set up
Letter drop record
// //
Community liaison group meeting
Meeting record
// //
Community liaison group meeting
Meeting record
// //
Community liaison group meeting
Meeting record
// //
Table A. continued
Appendix 4
Table A.: Health and Safety Monitoring
Reporting Period
Cumulative/
Project Average
Average daily manpower (including Subs)
Lost Time Injury (LTIn)
Lost Time Injury Frequency Rate (LTIFRn) . .
First Aid Injury (FAI n)
Medical Treatment Injury (MTIn) ( were LTI)
Significant Near Misses (SNMn)
Total Recordable Injury Frequency Rate (TRIFRn) . .
LTI = number of work-related injuries or disease that result in a fatality, permanent disability or
time lost from work. It could be as little as one day or shift (excluding the day of the incident).
LTIFR = number of lost-time injuries (LTIs) within a given accounting period, relative to the
totalnumber of hours worked in that period. The formula measures the number of LTIs per
million hours worked during an accounting period and is as follows:
(Number of LTIs in accounting period) / (Total hours worked in accounting period)x 1,000,000
FAI = number of injury that requires a single first aid treatment and a follow up visit for
subsequent observation involving only minor injuries, and for which the person would typically
return immediately to their normal activities.
MTI = number of injuries or disease that resulted in a certain level of treatment given by a
physician or other medical personnel under standing orders of a physician other than on-site
first aid treatment.
SNM = number of unplanned events that did not result in injury, illness, or damage – but had
the potential to do so (i.e., ‘Close-Call’, ‘Nearly a Collision’, ‘Near Hit’).
TRIFR = number of injuries (excluding fatalities) requiring medical treatment per million hours
worked within an organization. The formula is as follows:
(Number of recordable injuries in accounting period) / (Number of hours worked by all staff in
the same accounting period) x 1,000,000
Table A.: Security Monitoring (if applicable)
Evolution of the
security situation
in the project area
Security resources
Incidents
reported during
previous month
Comments
As planned in
Security Plan
Actual on Site
N/A
Appendix 4
A. Site Photographs and Quality Observations
Sports Field Levelling
Block D –Ground Floor False Ceiling Works in Progress
(photo by Glen Harris/Turnkey Project Management).
(photo by Glen Harris/Turnkey Project Management).
Appendix 4
Block C –Auditorium Ceiling Works in Progress
Block C –Ground Floor Curtain Walls Completed
(photo by Glen Harris/Turnkey Project Management).
(photo by Glen Harris/Turnkey Project Management).
Appendix 4
Block B –Roof Ballast in Progress
Block A –Ground Floor Self Levelling Completed
No nonconformance and/or corrective action instruction issued by supervision
engineer to date.
(photo by Glen Harris/Turnkey Project Management).
(photo by Glen Harris/Turnkey Project Management).
Appendix 4
. Completion of Work and Contract Closure Activities
A. Not yet commenced.
PART B
. Contract Details
Table A.: Contract Details and Key Dates
Employer name Department of Education, Hopeland
Contractor name
Perry Mason Contractor LTD
Contract title
ADB School
Contract Number
CFR
Accepted Contract Amount (Currency) USD ,,
Date of Issuance of Letter of Acceptance June
Commencement Date August
Sections (Yes/No).
If yes provide details.
Time for Completion (days) Days
Defects Notification Period (days) Days
Location of the Site Tourak, Hopeland
ADB Loan Effectiveness Date
[insert effectiveness date of ADB loan/grant]
ADB Loan Closing Date
[insert closing date of ADB loan/grant]
ADB = Asian Development Bank.
Appendix 4
.. Communications and Reporting
Table A.: Contact Details
Ref Name Title Position Phone Email
Executing Agency:
[INSERT NAME]
Employer
Implementing Agency
[INSERT NAME] and PMU
Contractor:
[INSERT NAME]
Contractor’s Representative
H&S Officer
Engineer [inset relevant position depending on contract terms]:
[INSERT NAME]
Engineer’s Representative
Other personnel (specify delegated authority)
ADB:
[INSERT ADB HQ or other ADB office overseeing project]
Project Team Lead
Other officers (specify their role)
Dispute Board Members
Other
[e.g., Co-financing Partners etc]
PMU = project management unit, H&S = health and safety, ADB = Asian Development Bank,
HQ = headquarters.
Contract Management
Guidance Note on Procurement
This guidance note provides operational-level guidance for borrowers, through their
executing agencies, on how contract management should be applied in projects
during the procurement cycle for a contract financed in whole or in part by an ADB
loan or grant, or by ADB-administered funds, for the procurement of goods, works,
and services. Contract management encompasses three stages: preparation and
planning activities prior to contract award, contract administration during contract
implementation, and contract closure. Eective contract management ensures that
supplier, contractor, and/or consultant deliverables and obligations are met as agreed
under the contract. In addition, more ecient and eective contract management
promotes increased and more timely loan disbursements.
ASIAN DEVELOPMENT BANK
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
www.adb.org
About the Asian Development Bank
ADB is committed to achieving a prosperous inclusive resilient and sustainable
Asia and the Pacific while sustaining its eorts to eradicate extreme poverty
Established in it is owned by members— from the region Its main
instruments for helping its developing member countries are policy dialogue loans
equity investments guarantees grants and technical assistance
