Presentation on Locks Contractor Selection Process Panama Canal

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					Contractor-selection process
Third Set of Locks Project

  Alberto Alemán Zubieta
    Panama Canal Authority
         July 2009

Expansion Program components and preparations.
Overview of the contracting process.
Organization for the evaluation of proposals.
Selection process.
Allocated funds and contracting regulations.
Sequence of events
Expansion Program
  components and
                                                                                   14 M m3
           Expansion Program

 Post-Panamax locks on                             Raising of the Gatun Lake                   g
                                                                                     Deepening and
    the Atlantic side                                 i            ti l l l
                                                   maximum operational level         widening of the
                                                                                    Atlantic entrance
                                                                                    access channel

                                                                                                        Deepening of the Culebra
                                                             26.7 m     27.1 m                          Cut navigational channel

                                                                                                        3.7 M m3

                Deepening of the Gatun
               Lake navigational channel                                                                        4.1 M m3

                                                                Post-Panamax locks on                                      9.1 M m3
                                                                   the Pacific side                              Deepening and
                                                                                                             widening of the Pacific
                                                                                                                entrance access
                      46 M m3                                                                                       channel

Access channel to the Pacific-side post-Panamax locks
               Retention of financial and legal advisors

New York, USA
25 July 2008


  Shearman & Sterling
  •Financial ~ legal

  Mayer Brown
           Integrated program administration

Working together since 15 August 2007
                          Financial administration
    Financing for the program was secured on 9 December 2008.
The financing will cover $2 3 billi
Th fi     i    ill                         f h          ’ $5.25 billi
                         $2.3 billion out of the program’s $5 25 billion
estimated budget, allocated as follows:
                       FINANCING             European Investment Bank (EIB)                       $ 500 M
                                             Japan Bank for International Cooperation (JBIC)      $ 800 M
                                              Interamerican Development Bank (IDB)                $ 400 M
                                             International Finance Corporation (IFC)              $ 300 M
                                             Andean Development Corporation (CAF)                 $ 300 M
                                                                                   Subtotal:       $2.3 B

                                                           To be funded by the ACP:               $ 2.95 B

                                                                                       Total:   $ 5.250 B

        The negotiated financing structure includes very favorable provisions for the
        ACP, including a 20-year amortization period and a 10-year grace period.
Overview of the
 Contractor-selection process overview

For the lock contract, the ACP is using a non-negotiated
best value process and a pre qualifying tendering
                  g    g
The best value weighting is 55% for the technical
proposal and 45% for the price proposal.
The contract will be awarded to the tenderer:
  whose proposal complies with all of the requirements,
  whose proposal obtains the best score after the weighting for
  both the technical and price proposal and
  who has not experienced a substantial change in composition
  and conditions since the pre-qualification.
                                      Contracting process timeline for
                                       lock design and construction

                                     Draft issue of the
                                    Terms of Reference                                                                                    Proposal
                                        21-DEC-07                                                                                    evaluation advisors
                              Short list
                              selection               Homologation                                                            New date
 Request for
   q                         14-DEC-07                of the Terms of                                                    for last individual
Qualifications                                           Reference                                                       meeting with the                            Opening of
   issued                                               26-MAR-08                                                             consortia                                price
 27-AUG-07          Receipt of                                                                                               16-JAN-09                               proposals
                   Qualifications                                                                                                                                     JULY-09
                                                                                             Designation of the
                    15-NOV-07                 Individual         Final Terms                     Technical
                                           meetings with        of Reference                 Evaluation Board
                                           the consortia           issued                                                                 Receipt of
        Preview                              29-JAN-08                                                                                    proposals
       conference                                                18-APR-08
                                                                                                                                          3 MAR 09

AGO    SEP       OCT   NOV      DIC      ENE    FEB       MAR   ABR     MAY    JUN   JUL    AGO   SEP     OCT     NOV   DIC    ENE     FEB     MAR     APR   MAY    JUN    JUL    AGO   SEP

             2007                                                                2008                                                                        2009

                                                                                           14 months
      Pre q alification
Pre-qualified consortia
  Consortium                               Members                                   Designers               Gate Manufacturers
               ACS Servicios, Comunicaciones y Energía, S.L. (leader)   Sener Ingeniería y Sistemas

               Acciona Infraestructuras, S.A.                           Haskoning Nederland BV
                                                                                                        ACS Servicios, Comunicaciones y
C.A.N.A.L.     Fomento de Construcciones y Contratas, S.A.              Mott Macdonald Limited
                                                                                                        Energía, S.L.
               Hochtief Construction AG                                 Hochtief Consult

               Constructoras ICA S.A. de C.V.

               Bouygues Travaux Publics (leader)

               Bilfinger Berger

                  C Construction Grands ojets
               VINCI Co st uct o G a ds Projets
Atlántico-     Construcoes e Comercio Camargo Correa S.A.
                                                                                                        ALSTOM Hydro
Pacífico de                                                             AECOM (leader)
                                                                                                        Energia Brasil
               Construtora Andrade Gutierrez S.A.
               Construtora Queiroz Galvao S.A.

               ALSTOM Hydro Energia Brasil

               BARDELLA Ind. Mecánicas

Bechtel,       Bechtel International, Inc. (leader)
Taisei,                                                                 Bechtel International, Inc.
               T i i Corporation
               Taisei C     ti                                                                          W h     Shi    d
                                                                                                        Wuchang Shipyard
Mitsubishi                                                              (leader)

Corporation    Mitsubishi Corporation

               Sacyr Vallehermoso S.A. (leader)                         Montgomery Watson Harza (MWH)
Grupo Unidos   I
               Impregilo S.p.A.
                     il S A
por el Canal   Jan de Nul n.v.                                          IV-Groep
                                                                                                        Heerema Fabrication Group

               Constructora Urbana, S.A.                                Tetra Tech
                         Informational meetings
   Site visits
   Pre-bid conferences:
        26 March 2008
        30 October 2008
   49 individual meetings
Organization for the
      evaluation of
                                            Key participants

There were six key participants in the evaluation process.
      The ACP Contracting Officer coordinated the entire contractor-
      selection process.
      The Technical Evaluation Board scored the technical proposals.
      ACP and international experts provided technical advisory
      services to the Technical Evaluation Board.
      Th ACP I
      The          t General verifyied the process.
             Inspector G   l    if i d th
      An external auditor (Deloitte) under contract with ACP audited the
      process to certify that it was duly executed.
      A notary public acted as a witness to attest to the developments
      and certify the key milestones of the process.
          ACP organizational structure for
the evaluation of proposals and contractor selection
                                                                            Board of Directors

                                    Inspector General

                                                        Executive VP,
                                                                                               Corporate Management
                                                  Engineering and Programs
                                                    g       g         g

                                                                                                                        Provides th range of the
                                                                                                VP and Ethics Officer
                                                   Management Department


                                                                                                                            allocat funds
         delegated by the AD

       ntract award au

                                      Executive Manager,            Executive Manager, Locks
                                    Contracts Administration            Projects Division
                                             (IAC)                            (IAE)

                                      Contracting Offi
                                      C t     ti Officer,
                                          Contracts                     Cost Estimating
                                        Management                           Team

      Technical                                           Price Proposal
   Evaluation Board                                      Validation Board
  Technical Evaluation Board
Integrated by 15 senior, permanent engineers
from ACP work force.
Organized in three groups composed of five
members each.
Initiated preparatory work in September 2008.
   pp       y
Supported by over 50 ACP and contracted
technical experts.
Dedicated, uninterrupted work under supervision
 f h C         i Offi
of the Contracting Officer.
Work was conducted in a separate building and
following special security measures.
           Expert advisors

The technical experts assisting the
Technical Evaluation Board included:
  ACP experts who worked on the Expansion
  P                l d i th d       l      t f th
  Program proposal and in the development of the
  terms of reference of the Request for Proposals
  CH2M Hill resident advisors from the program-
  management team for the Expansion Program.
  Contracted international e perts

All experts signed a confidentiality
          t d             fli t f i t  t
agreement and a non-conflict-of-interest
     Role of the external auditor
       and Inspector General
Reviewed the evaluation plan and the execution of the
evaluation process.
Verified and audited the contractor-selection process.
Made pertinent recommendations to the Contracting
Officer as necessary during the selection process.
Reviewed the final report of the evaluation process in
order to certify the compliance of the evaluation with the
process and the results.
Issuance of a declaration that the evaluation was
performed in compliance with the established process.
 Principles guiding the contractor-
          selection process
 The contractor evaluation and selection
  process was designed to be:
   Fair, impartial, transparent and holistic.
   Complete and in full compliance with the
    requirements and criteria established in
    the Request for Proposals.
   Timely and uninterrupted .
         y              p
   Executed and supported by experts in
    all required areas.
   Confidential.
                 Receipt of proposals
   The           l
    Th proposals were received i d
    during a public ceremony in
    ACP installations on 3 March
   The ACP Contracting Officer
    presided over the proposal
    receipt process.
   The ACP Inspector General
    verified the proposal-receipt
   A team from the external
    auditor (Deloitte) verified the
    proposal-receipt process.
   The           l
    Th proposals were not    t
    opened in public.
          Receipt of proposals (continued)
   The price proposals were
    sealed and stored in a vault of
    the National Bank of Panama.
   A notary public certified that
    the envelopes containing the
    price proposals were closed
    and sealed and that the
    envelope containing the
    amount of funds allocated by
    the ACP was kept under
    custody until it was deposited
    in a vault at a nearby branch
    of the National Bank of
    Panama for safekeeping.
      Opening of the technical proposals
   All technical proposals were opened in private by the
    Contracting Officer and his team of specialists. This act
    was attended by:
     representatives of ACP Office of Inspector General,
     Deloitte auditors and
     A notary p
             y public.
   The Contracting Officer prepared the minutes, which
    were signed by all of the witnesses.
   There was a verification to determine that a Tender
    Security was included in each proposal, as well as a
    review of the Tender Documents by an ACP legal team.
             Three of the four pre-qualified consortia submitted proposals
                                 during the ceremony.

      Consortia                                    Members                                    Designers              Gates manufacturers

                       ACS Servicios, Comunicaciones y Energía, S.L. (leader)   Sener Ingeniería y Sistemas

                       Acciona Infraestructuras, S.A.                           Haskoning Nederland BV
                                                                                                              ACS Servicios, Comunicaciones y
                                                                                                              Energía, S.L.
                       Fomento de Construcciones y Contratas, S.A.              Mott Macdonald Limited

                       Hochtief Construction AG                                 Hochtief Consult
                       Constructoras ICA S.A. de C.V.

                       Bechtel Internacional, Inc. (leader)

Bechtel, Taisei,
Bechtel Taisei                                                                           Internacional Inc
                                                                                Bechtel Internacional, Inc.
                       Taisei Corporation                                                                     Wuchang Shipyard
Mitsubishi Corporation                                                          (leader)

                       Mitsubishi Corporation

                       S     V ll h       S.A. (leader)
                       Sacyr Vallehermoso S A (l d )                            Montg. Watson Harza (MWH)
Grupo Unidos por el    Impregilo S.p.A.
                                                                                                              Heerema Fabrication Group
Canal                  Jan de Nul n.v.                                          IV-Groep
                       Constructora Urbana, S.A.                                Tetra Tech
            Evaluation methodology
   The proposals were evaluated with respect to three areas:
    1. Execution, construction, operations and maintenance plans.
    2 Electromechanical designs and controls
    2.                              controls.
    3. Design of the hydraulic system, gates and structures.
   Each of the three teams that formed the Technical Evaluation
    Board was i d
    B    d             d tl          ibl f        f th th
               independently responsible for one of the three
    evaluation elements.
    1. The three teams worked separately in order to prevent them from
       influencing each other.
    2. Each team assigned scores in its area of responsibility for
    3 The final score for each evaluation element resulted from a
       consensus among the team members.
   The Technical Evaluation Board was able to request advice and
      pp                y p            y    y
    support from as many experts as they may deemed necessary. y
   These experts did not assign scores, nor did they participate in
    the evaluation discussions or deliberations.
                       Evaluation and selection process
                                                                                                                                           Contracting Officer
                                                            Technical Evaluation                                  Process
                                                                                                                 certified by        Announces the public opening
                               Preliminary evaluation            Final evaluation                                                    of the price proposals through
Receipt of proposals                                                 (teams)                                      external
                                     (individual)                                                                                          an RFP amendment
                                      Team 1                         Team 1
                                                                                       Contracting Officer
                                      Team 2                         Team 2         tabulates technical scores
                                                                                                                                       Contracting Officer
                                                                                                                                   withdraws security deposit
                                      Team 3                         Team 3                                                        box containing envelopes
                                                                                                                                   with price proposals from
                                                                                                                                    National Bank of Panama

                                                      Inspector General and                                                     Price proposals opened during
                                                external auditor audit the process-                                                    a public ceremony
                                                                                                                                Technical              with price
                                                                                                                                 scores                proposals
                                                                                                                                disclosed             and amount
    Price proposals        Security deposit box                                                                                                       of allocated
  sealed and notarized       closed and key                                                                                                              funds
                               withdrawn                  Contracting Officer                                                                           opened d
                                                        took the security deposit
                                                               box to the
                                                        National Bank of Panama,                                                       Verification of
     Notary public          Inspector General               together with the                                                        compliance with the
                                                              notary public,                                                         requirements of the
                               Contracting                external auditor and                                                       Terms of Reference
    External auditor                                    consortia representatives

                                                                                                                                            Contract is
                                                                                                                                             awarded      26
                         3 March 2009
    Fields of expertise among those providing
       support for the technical evaluation

•   Dams                        •   Power distribution
•   Hydraulic systems           •   Project controls
•   Concrete                    •   Environment
•   Gates                       •   Design
•   Excavations                 •   Risk
•   Structures                  •   Cost control
•   Access channels
                                •   Programming
•                   y
    Communication systems
                                •   Q lit control
                                    Quality     t l
•   Valves
                                •   Public relations
•   Electromechanical systems
•   Maintenance                 •   Supply and logistics
•   Safety                      •   Training
•   Machinery-control systems
Ceremony for opening price proposals

   Once the technical evaluation process has concluded,
    the Contracting Officer will issue an amendment to the
    RFP communicating the date, time and place for the
    public ceremony to open the price proposals.
   During this public ceremony:
     the total scores assigned to the technical proposals
       ill b di l     d
      will be disclosed.
     the envelopes containing the price proposals and
                                      ACP allocated
      the envelope with the amount of ACP-allocated
      funds will be opened.
     the scores to determine the apparent best value
      proposal will be calculated automatically.
 funds and
   t    ti
                 Allocated funds
   Costs scenarios were developed by an ACP budget and
    financial analysts to come up with a range for the
    amount of funds to be allocated for the contract.
   The Administration determined the specific amount of
    the allocation.
   The amount is stored in a sealed envelope in the bank
    vault containing the price proposals from the tenderers.
   The price proposals and the allocated funds envelope
    will be opened in a public ceremony.
   If the price of the best value proposal does not exceed
    the amount of the allocation, the contract could be
    awarded within one to three days; however the
    Contracting Officer has until September to award the
S q
 of events
     Ceremony for opening the price proposals

1.       p               y                y            y
     The public ceremony will be officially initiated by the
     Contracting Officer.
2.   The sealed envelopes containing the price proposals
     and the amount of the allocated funds will be
     withdrawn from the National Bank of Panama and
     taken to the premises for the ceremony.
3.   The external auditor (Deloitte) will submit the
     results of his review of the proposal-evaluation
4.    h           b i d during the evaluation of the
     The scores obtained d i      h      l   i    f h
     technical proposals will be disclosed and displayed.
 Opening the price proposals (continued)
5.       The price proposals and allocation envelopes
         will be opened.
     –     The box containing the envelopes will be unlocked,
           and the envelopes removed.
     –     The envelopes containing the proposals will be
           inspected and opened.
     –     The price proposals will be read aloud by the
           Contracting Officer and displayed on a screen.
     –     The prices will be introduced into a speadsheet that
             ill  t      ti ll    f     th   l l ti          th
           will automatically perform the calculations once the
           last price is entered to determine the scores and
           immediately identify the apparent best-value proposal.
     –     The envelope containing the allocation amount will be
           inspected and opened, and the amount will be read
           aloud and displayed.
6.       Adjournment of the ceremony.
 Alternative steps in the event the price of the best-
value proposal exceeds the amount of allocated funds
   Base price of best-
    value proposal
  exceeds the amount
   of allocated funds

                t the
    ACP requests th
                           The new base price
  best-value tenderer to                                              The contract is
                               is within the
  reduce the total base                                                  awarded
                            allocated amount
  price of his proposal

                             The new base
                           price exceeds the
                           allocated amount

                           The base price of
   ACP requests new          the new best-
  base price proposals     value proposal is                          The contract is
   from all tenderers          within the                                awarded
                                                    The amount of
                                                     the allocation
                                                   Funds is raised    The contract is
                             The base price        to the cover the      awarded
                               of the new           base price for
                               best value            the new best-
                                proposal            value proposal
                              exceeds the
                                 ll   ti
                                                   The allocation
                                                cannot be increased        The contractor-
                                                 to cover the base        selection process
                                                 price for the new         is declared null
                                                best-value proposal            and void
        Processes before the work begins
 Notification of contract award
 End of notification period and          5 days
    first day for filing protests
   Period for filing protests            3 days
   Protest resolution (if there are
    any, the adjudication period          Up to 30 days
    will be suspended)
   Period for submittal of the           28 days
    performance and payment
   Signing of the contract (RFP)
   Order to proceed
   Start of the work                         y
                                           7 days
    Performance and payment bonds
         illi for    f          d      illi for       t
    $400 million f performance and $50 million f payment
   The surety insurer having one of the following
    acceptable bond issuance ratings:
    AM Best A - Category XV         Standard & Poors A-
    Moody s
    Moody’s A3                      Fitch A-
   The surety insurer must be licensed in the state of New
    York and must be listed and authorized to do business in
    the United Kingdom.
   The reinsurers for the issued bonds must meet the same
    requirements that are applicable for the surety insurer
    with respect to risk rating and authorization to carry out
    financing operations
                                         Contractor-selection timeline
                       Initial price proposal is within allocated amount
   score is
  displayed                  Notification
 and prices    Contract is   period ends.
 are opened     awarded.
                a a ded
  in public.
  The best-
     value                    First day to                     Submittal of     Contract
 proposal is                                 Last day to       performance    signing and        Start of
selected and                      file
                               p                 file          and payment     Notice to          work
  does not
 exceed the                                      t t
                                              protests *          bonds
                                                                  b d           Proceed
                                                                                P      d
 amount of
                         5 days        3 days         Up to 30 days                     7 days

                                         28 days
                         Information from the contractor-
                       selection process is made available to

 * If any protests are received, the Executive Manager of the Purchasing, Warehousing
 and Inventory Division has up to 30 days to issue the ruling and the award process will be
Contractor-selection process
Third Set of Locks Project

                             Alberto Alemán Zubieta
                              Panama Canal Authority
                                    July 2009

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