3.2.2 Determining the Contract Scope

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The scope of the contract, which had been outlined in broad terms at the project inception phase (a project being an integrated intervention which will very likely be implemented through more than one contracts), should at the present stage be specified in more detail, through the development of the Terms of Reference and the Technical Specifications (Annex II of the Tender Documents).

Chapter 1 of the Guide has provided detailed guidelines to assist Contracting Authorities in the organisation of the activities of the project initiation phase, which is the first phase in the lifecycle of a project. During this phase:

The opportunity or problem has been identified, the Business Case (specifying and evaluating the alternative ways to take advantage of the opportunity or deal with the problem) has been developed, and the best solution has been selected.
The key elements of the project have been identified and the Project Fiche (outlining the objectives, individual activities, organisation method, budget, breakdown into individual contracts, risks, and constraints and assumptions for project implementation) has been prepared.

Thus, the components and information of the Project Fiche are the baseline data for determining the contract scope.

In the case of projects which will be implemented through a single contract (instructions on how to split the project into individual contracts are given in paragraph 2.8.7 of Chapter 2) or through a number of contracts which nevertheless are similar in nature, many of the data required for developing the Terms of Reference have been already included in the Project Fiche. In contrast, in the case of projects which will be implemented through a number of contracts whose scope is different, the present stage takes on particular importance, as it is during this stage that the scope of the individual contracts must be determined.

The following two examples can be mentioned as two extreme instances:

Example 1

The overall project refers to the supply of a large quantity of similar products, judged necessary for satisfying the respective needs of the Contracting Authority over the next four years. The Contracting Authority decides to implement the project through two separate contracts, each one with a duration of two years. In this case, the two separate contracts are identical in scope indeed, their scope is also that of the overall project.

Example 2

The overall project involves a large-scale construction operation. The Contracting Authority has decided to implement the project through the following seven individual contracts:

1.Development of the concept design.
2.Development of the preliminary design and of the environmental impacts study.
3.Development of the detailed design.
4.Execution of construction works.
5.Supply of materials and equipment necessary for the implementation of the project.
6.Project management services.
7.Project inspection and audit services.

In this case, the individual contracts vary greatly in terms of their scope, and the information contained in the Project Fiche is clearly not enough, as it serves only as the starting point for determining the scope of the individual contracts.

The Contracting Authority should establish a list of the possible sources of information (other than the Project Fiche which, as already mentioned, is the basic source of information) which may help it determine the contract scope.

The Table below lists the possible sources (documents or persons) from which useful information may be drawn:

 

SOURCES FROM WHICH INFORMATION MAY BE DRAWN TO HELP DETERMINE THE CONTRACT SCOPE

Similar or related contracts which are in progress or have been completed

Business plans and strategic goals of the Contracting Authority

Administration officials of the Contracting Authority

Officials of other Contracting Authorities which have implemented similar or related contracts

Users or beneficiaries of the results of the contract

Experts specialised in the scope of the contract

Independent consultants

Commercial unions or Chambers

Interested entities

Table 3-11: Possible sources from which information may be drawn to help determine the contract scope

 

In particular, all individual elements which will allow economic operators to form a complete picture of the scope expected to be implemented by the contract in question and thus prepare competitive tenders and identify the best solutions for the project, must be analysed and detailed in this stage.

Regardless of the order and manner in which they appear in Annex II “Terms of Reference Technical Specifications”, the various information to be brought together in order for the contract scope to be determined can be classified in the following categories:

Analysis and description in more detail of the contents of the contract
Special Requirements Technical specifications
Implementation environment

Analytically, each one of the above categories includes the following:

Analysis and description in more detail of the contents of the contract. The information in this category refers to the following:
The overall objective, specific objectives and expected results of the contract.
The required contract activities and the resources needed for them, such as personnel, materials, equipment, intangible resources (implementation methods, implementation management organisation and operations, funding etc.), as well as any special requirements which the Contracting Authority may place on the Contractor regarding the implementation of the contract.
The prerequisites, constraints, assumptions and risks in connection with the implementation of the contract.
Special requirements Technical specifications. The information in this category refers to special requirements regarding the nature, quality, performance, operation etc. of the activities required to implement the contract, and to the resources (materials, equipment, methods etc.) and/or expected results (and deliverables) of the contract.

       This information constitutes the so-called “Technical Specifications” of the contract.

       The term “Technical Specifications” is often used to refer collectively to the description of the results or activities or resources needed for the contract and to the special requirements regarding their quality, performance etc. The proposed separation of these two components, however, will allow the Procurement Team to better identify them.

Implementation environment. The information in this category does not refer directly to the contract, but refers instead to the broader environment within which the contract shall be implemented, such as general information about the Beneficiary Country, the Contracting Authority, the relevant country background and the current state of affairs in the relevant sector, as well as references to other relevant programmes or actions.

The paragraphs that follow provide clarifications on the contents of the Terms of Reference and the Technical Specifications of a contract, together with guidelines on how to develop them.


© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
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