Assessment of specific experience of the contractor through qualification criteria in bidding documents plays a crucial role in the selection of qualified contractor. Prevailing procurement Act and Regulation of the Government of Nepal requires that two items, i.e. projects of similar size and nature and production capacity of key activities of the contractor are examined under this criterion. Though, both the items have their own specific meanings, these are interpreted in many ways as per the evaluator of different public entities. This paper tries to define the meanings of both items and to briefly discuss about how these are interpreted in evaluation by public organizations in Nepal. For this, example of technical evaluation in irrigation project has been taken in this paper. It comes up with some suggestions to harmonize the meaning of these items and their interpretation during evaluation for the selection of qualified contractors.

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SPECIFIC EXPERIENCE CRITERIA IN CONTRACTOR SELECTION: SOME UNATTENDED ASPECTS
1
Ajay Adhikari2
ABSTRACT
Assessment of specific experience of the contractor through qualification criteria in bidding
documents plays a crucial role in the selection of qualified contractor. Prevailing procurement Act
and Regulation of the Government of Nepal requires that two items, i.e. projects of similar size
and nature and production capacity of key activities of the contractor are examined under this
criterion. Though, both the items have their own specific meanings, these are interpreted in many
ways as per the evaluator of different public entities. This paper tries to define the meanings of
both items and to briefly discuss about how these are interpreted in evaluation by public
organizations in Nepal. For this, example of technical evaluation in irrigation project has been
taken in this paper. It comes up with some suggestions to harmonize the meaning of these items
and their interpretation during evaluation for the selection of qualified contractors.
Keywords: Specific Experience Criteria, Project of Similar Size and Nature, Production Rate of
Key Activities (Key Production Rates).
INTRODUCTION
To get the construction project completed within stipulated quality, time and cost, it is most
essential that the work is contracted out to the capable contractor. Capability of contractors is
assessed during the procurement stage, which is based on the pre-set qualification criteria in
the bidding documents. In Nepal as per the prevailing rules, however, the contractor need not to
have any prior construction experience to take part in the procurement proceedings of works of
value up to NRs. 20 million. For more than NRs. 20 million, contractors should be qualified to
bid. Such qualifications are assessed as per the specific work experience criterion, besides
other criteria such as general construction experience, average annual turnover, cash flow
requirement and availability of personnel and equipment required for smooth execution of the
work (PPA, 2007).
Specific work experience criterion evaluates the qualification of the contractor using two items:
a) experience in the construction project of similar size and nature; and b) production capacity of
key construction activities (key production rate) (PPMO, 2014) and (PPMO, 2009). This criterion
plays significant role in selecting the qualified contractor. However, the author has observed that
its use in the selection of contractors in irrigation projects has not always been clear and
consistent. Many times, amendments to the specific experience mentioned in the bidding
documents are published. This has unnecessarily increased the number of bids submission
thereby increasing the time and resources employed in procurement proceedings. This paper
tries to briefly review the meaning and importance of two items under the specific work
experience criterion. It discusses on the practices of using it in irrigation projects in Nepal and
suggests some ways to using these items as per their essence. This paper comes up with the
conclusion that the qualitative and quantitative meaning of both the items, i.e. similar nature of
works and key production rate under the specific experience criterion have to be first well
understood and evaluated accordingly for the selection of qualified contractor.
METHODOLOGY OF THE STUDY
This study is based on the secondary and primary information. Meaning and importance of
similar nature of work and key production rate are defined first. Rates of some item works for the
1
Views expressed in this paper are personal.
2
Email: ajay3adhikari@gmail.com

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construction of the irrigation project will be analyzed to review the requirements to be asked
under the item “project of similar size and nature”. Furthermore, key activities to be included and
the method of calculation of their production capacity under the item “key production rate” will be
discussed. This study has been carried out based on the discussion with procurement/ contract
management experts and analysis and judgment made by the author from his personal
experience.
PROJECT OF SIMILAR SIZE AND NATURE
General Instruction to Applicants (GITA) Section 4.8 (a) of standard Prequalification document
(PPMO, 2009) states that “the applicant shall provide evidence that it has successfully
completed or substantially completed at least the number of contracts stated in the Particular
Instruction to Applicants (PITA), of contract amount, nature, complexity, and requiring
construction technology similar to the proposed contract, within the time specified in the PITA.
The works may have been executed by the applicant as a prime contractor or as management
contractor, or as member of a joint venture or as subcontractor with reference being submitted
to confirm satisfactory performance”.
Under this item of specific work experience criterion, two basic properties, i.e. (i) the
characteristic and (ii) the cost of the project completed by the contractor are evaluated. Here, we
first discuss the characteristics of the project and later, the cost of the project mentioned under
the evaluation criteria of the bidding documents.
While assessing the technical qualification, bidding document requires that the contractor has
successfully completed similar nature of work. Here, similar nature of work refers to the similarity
in the nature, size, locality and employed technology of the completed project to the project to
be constructed for which bid has been invited. In case of any irrigation project, nature in terms of
surface or ground water project, size in terms of design discharge & command area, locality in
terms of Terai, Hill and Mountain project and requiring construction technology for furrow,
boarder, micro irrigation or for tunnel works should be evaluated under this criterion. Almost all
bidding documents for the construction of irrigation project in Nepal states which resembles to
the features of the project to be developed. However, many times there are modifications in
those statements. For e.g., criterion specific to construction of irrigation project in initial bidding
documents is amended to construction of any civil engineering works. This kind of amendment
provides opportunity for all contractors to bid even if they had no previous experience at all of
the construction of irrigation project and discourages the qualified contractor to participate in
bidding process. Furthermore, it deprives the employer of the qualified contractor selection.
Therefore, some suggestions, as examples, are made here for the statement of similarity to be
written in the bidding documents in case of the selection of contractors in irrigation project
construction in the Table 1:
Table 1: Nature of the Project and Similarity to be defined in the Bidding Document
Nature of Irrigation Project Similarity to be defined in the Bidding Document3
Construction of head works Construction of irrigation project head works
Construction of bridge
Construction of cross drainage structures of irrigation
project
Construction of Canal Construction canal
Construction of embankment for guide bund, road, railway
3
Size of the project of experience should be based on size of project to be constructed. However, it is
suggested that the size of completed project should never be less than 25% of size of the project to be
developed.

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Nature of Irrigation Project Similarity to be defined in the Bidding Document3
Construction of cross
drainage structures
Construction of cross drainage structures of irrigation
projects
Construction of irrigation project head works
Construction of bridge
Construction of cross drainage structures of highway
project
All kind of irrigation project Above mentioned experience along with the experience in
similar terrain
It is required that such similarity of projects has to be approved by the head of department and
be circulated to the field offices. This eases the procurement proceedings in field offices where
capability of the personnel involved in public procurement is still questionable.
Another part of this item to be evaluated is contract amount. It requires that the completed
project of the contractor should be equal to or more than the amount as stated in the bidding
document. However, according to the definition of experience in similar nature and size of the
work, this is the technical criteria for contractor‟s selection. Applicant contractor must have
experience in the similar nature and size of the work, whatever the form of association to the
completed project. Since this is the technical qualification criteria, the term „contract amount’
here is inconsistent to the essence of this criterion. Contract amount does not necessarily reflect
the nature and size of the project, since cost of the project is substantially differed by the
geographical location. Furthermore, PITA 4.8 (a) of Standard Prequalification Document
(PPMO, 2009) has not mentioned anything about the value of similar contracts completed,
except the time period of completion. This argument about the value of work is further discussed
here based on the rate analyses of item works of irrigation projects in Terai, Hill and Mountain.
Here, Kapilvastu, Surkhet and Darchula are taken as representative districts of Terai, Hill and
Mountain, respectively.
*NRs. refers to Nepalese Rupees
Figure 1 Cement Concreting of Foundations (as per Rate Analysis Norms of Department of
Irrigation, Nepal, Item 7.2)
Figure 1 shows rates of PCC item of two different concrete mixes for foundation works. In case
of PCC 1:3:6, unit rate (Nepalese Rupees per m3
) in Hill is 37.12% more than that in Terai
whereas unit rate in Mountain is 33.06% more than that in Hill. Furthermore, In case of PCC
1:2:4, unit rate in Hill is 33.47% more than that in Terai whereas unit rate in Mountain is 35.97%
more than that in Hill. This shows that higher the location of the project with respect to the
6,121.07
7,240.38
8,393.50
9,663.75
11,168.68
13,139.58
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
PCC 1:3:6, NRs./m3 PCC 1:2:4, NRs./m3
Kapilvastu (Terai) Surkhet (Hill) Darchula (Mountain)

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altitude, higher will be the unit rate of item works. This shows that the unit rate of items of works
is higher in the mountains than in the hills and the Terai.
Figure 2 Cement Concreting of Superstructure (as per Rate Analysis Norms of Department
of Irrigation, Nepal, Item 7.4)
Same kind of rate analysis for item works has been carried out as shown in the Figure 2 for
cement concreting of superstructure, taking three concrete mixes, i.e. PCC 1:2:4, PCC 1:1.5:3,
PCC 1:1:2. Here, unit rate of PCC 1:2:4 in Hill is 42.68% more than that in Terai whereas unit
rate in mountain is 23.97% more than that in Hill. Similarly, unit rate of PCC 1:1.5:3 in Hill is
31.07% more than that in Terai whereas unit rate in mountain is 45.53% more than that in Hill.
Furthermore, unit rate of PCC 1:1:2 in Hill is 27.12% more than that in Terai whereas unit rate in
mountain is 42.29% more than that in Hill. Same conclusion as in the case of cement concreting
in foundation can be made here that the unit rate of items of works is more in the mountain
region than in the hills and the Terai.
Based on the unit rates of above work items, it is vividly clear that the costs of Terai, Hill and
Mountain irrigation projects with same nature, size and technology are different. As we move
from Terai through Hill and Mountain, rate of PCC is in increasing order. Such increment is due
mainly to increasing cost of the construction materials and labors as per the geographical
locations4
. If the value of completed work is taken in combination with the similar nature of work
criteria, Terai and/ or Hill irrigation project may be disqualified whereas hill and/ or Mountain
irrigation project is qualified even if projects‟ (located in Terai, Hill and Mountain) size, nature
and technology employed are same. Furthermore, assessing the financial management capacity
of the contractors through the cost of the completed project is not deemed appropriate, because
financial capacity is better evaluated through annual turnover, cash flow and bid capacity
criteria. It clearly shows that the contract amount makes the evaluation bias to the geographical
locations. To avoid this conflict, experience of the project in geographical location similar to the
project has to be included under this item. Geographical experience here assesses the
management capacity of the contractor in such locations. While doing so, some attributes of
geographical location have to be so signposted that the bidders get clear idea of this item of
evaluation criteria. Furthermore, value of the project has to be associated with experience of
similar geographical location to assure that such experience of the contractor is not of very small
value. For example, any contractor may have the experience of similar geographical location
with the project cost NRs. 2 million, whereas project to be constructed may be of value greater
than NRs. 1 billion. Therefore, the contract amount has to be so associated with geographical
4
Rates are presented in Annex 1
8,042.38 8,988.30
11,548.5411,474.75 11,780.75
14,680.7514,225.58
17,144.70
20,889.70
-
5,000
10,000
15,000
20,000
25,000
PCC 1:2:4, NRs./m3 PCC 1:1.5:3, NRs./m3 PCC 1:1:2, NRs./m3
Kapilvastu (Terai) Surkhet (Hill) Darchula (Mountain)

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location in a proper manner that technical qualification is only the governing factor thereby
fulfilling the essence of similar nature and size of the project criteria.
PRODUCTION RATES OF KEY ACTIVITIES
Key production rate, another item to be assessed under the specific experience criteria, is the
productivity as a ratio of output produced and with respect to time devoted for production.
According to the definition of (Hanna & Heale, 1994), number of units produced over a given
period of time divided by the number of man-hours to do so is the productivity. According to this
concept, key production rate refers to the managerial capacity of the contractor to accomplish a
job, provided the inputs are available5
. Input factors basically constitutes materials purchased,
equipment hired and labors employed to produce output in the form of products or structure in
case of construction industry. Evaluation criteria have been set in the standard procurement
documents of PPMO in Nepal which are modified in the bidding documents by the public entity
according to the need of the project.
Section 4.8 (b) of GITA of Standard PQ documents requires an experience of achieved
minimum monthly or annual working capacity in the form of production rates as specified in the
PITA of the same document. Many public entities have made decisions by allocating key
production capacity to the contractor as per their joint venture share in a completed project.
However, definition of key production rate emphasizes the need of managerial capacity of the
contractor to mobilize labor and equipment for the efficient use of other input factors of
production. Being a managerial capacity, key production rate has to be considered as a
qualitative capacity of the contractor. Therefore, experience of key production rate could not be
divided among each partner as per their share in case of joint venture agreement and has to be
taken 100% for all partners. This is substantiated by the decision made by the PPMO, dated 1
May 2014. Key production rate is significant item for the selection of contractor in countries like
Nepal, where performance of contractor with respect to completion time is not satisfactory.
Other issues under this criterion are the items for the evaluation of key production capacity of
the contractor to be included in bidding documents and method of calculation of key production
capacity of the contractor from the experience certificate submitted along with the bid.
In general, it is observed that a bidding document of the project involving reinforced concrete
structure demands for reinforcement in terms of tonnes/ month, which is calculated by dividing
total quantity of reinforcement to be used in the project by total project period. Here, we need to
understand that the key production rate is the capacity of the contractor for the production of
structure by using construction materials and not merely the capacity of supplying such material.
Keeping reinforcement item under the key production rate criterion only assesses the capacity of
the contractor of buying/ supplying reinforcement, which is not the essence of this criterion. So,
only those items which are produced by the contractor himself have to be included in this
criterion.
Furthermore, key production rate itself implies to the rate of production of part or whole of the
structure. Items to be produced/ constructed by the contractor are assessed here. In practice,
total quantity of the production of any item work is divided by the total project period in terms of
month to compute production rate of item work per month. Quantity and the project period as
per the estimate are used to mention required key production rates under evaluation criteria in
the bidding document. Similarly, to assess the production capacity of the contractor, total
quantity of the item work done is divided by the whole project period which is taken from the
project completion certificate issued by the employer. This method of computation implies that
the item work is executed throughout the project period, which is basically wrong. So,
requirement of key production rates in bidding documents should be calculated based on the
volume of item work and time to be devoted to execute it. Work schedule in this regard could be
5
Availability of the input factors is addressed in other clauses of contract document.

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very useful. Furthermore, project completion certificate issued in the name of the contractor
should clearly mention the volume of work executed along with the time period devoted for it.
CONCLUSION
Similar experience criterion has been proved to be very much useful in qualified contractor
selection so far. Under this, experience of the contractor in the project of similar size and nature
and production capacity of key construction activities are assessed as per the requirements
mentioned in the bidding documents. To maintain consistency in evaluation of similar nature of
work for the selection of qualified contractor, it would be very much necessary to list out what
kind of project experience a contractor should have to be qualified. Contract amount in case of
project of similar nature and size is not suitable as it is biased as per the geographical locations
of the project. Rather, it is suggested that criteria should include the experience of the contractor
in the project of similar size and nature on the one hand and on the other hand, experience in
any civil engineering project of appropriate value in the similar terrain. Furthermore, production
capacity in key construction activities should be evaluated on qualitative basis and not be
divided proportionately based on the joint venture share. It should always be kept in mind during
the preparation of bidding document that key production rates need the production capacity of
the contractor for the construction of new structure, but not supplying the construction material.
Hence, only the required items under this criterion should be kept in the bidding documents.
While calculating key production rate, either as a requirement of the new project or the
experience of the contractor, it should be based on the volume to be executed and actual time to
be devoted for this execution. Use of project schedule is of high importance in this regard. Both
criteria represent qualitative as well as quantitative assessment of the contractor. Thus,
straightforward valuation and quantification of such experience in a mechanical manner have to
be avoided, rather qualitative and quantitative assessments have to be carried out as explained
in this paper for the selection of the qualified contractor.

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REFERENCES
Hanna, A., & Heale, D. (1994). Factors affecting construction productivity: Newfoundland versus
rest of Canada. Canadian Journal of Civil Engineering, Vol. 21, 663-673.
PPA. (2007). Public Procurement Act. Kathmandu: Government of Nepal.
PPMO. (2009). Standard Prequalification Document. Kathmandu: Public Procurement
Monitoring Office.
PPMO. (2014). Standard Bidding Document (for above NRs. 6 million). Kathmandu: Public
Procurement Monitoring Office.

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ANNEX 1: RATES OF LABOR AND CONSTRUCTION MATERIAL AT DISTRICT HEADQUARTERS
S.N. Material/ Labor Unit
Unit Rate for FY 2071-72, NRs.
Remarks
Kapilvastu Surkhet Darchula
Materials
1 Cement 43 grade (Nepali Cement)* mt. 12,200.00 14,000.00 18,500.00
2 Aggregates (from Crusher)**
40 mm m3
1,587.94 2,300.00 3,600.00
20 mm m3
1,587.94 2,400.00 6,000.00
10 mm m3
1,411.50 2,600.00 7,000.00
3 Coarse Sand m3
710.21 2,750.00 2,444.00
Labor
4 Skilled Labor m-day 490.00 550.00 570.00
5 Unskilled Labor m-day 300.00 350.00 400.00
Notes:
* 43 grade Nepali Cement has been taken for analysis due to availability of only this rate in Darchula
district
** Crusher Aggregates has been taken for analysis due to availability of only this rate in Darchula
district