1 sec distribution field force overview distribution contractors day with saudi electricity company...
TRANSCRIPT
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SEC Distribution Field Force OverviewDistribution Contractors Day with Saudi Electricity Company
October 28th, 2015
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The contracting phase consistsof two main elements: tendering process and
contracting process
Prequalification Contracting Operation
Key
levers
1.1 Ceiling distribution & coverage assurance
2.1 General terms & conditions
Key
elements
1.2 Bidding mechanism 2.2 Performance management
1.3 Pricing mechanism 2.3 Others
1 .Tendering 2 .Contract1 2
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Key
Changes'
1. Prequalification model: new prequalification process and criteria to assess contractors
2. Coverage model: model will be used on office level to help match supply to demand in all offices across the Kingdom
3. Tendering strategy: will include the number of required contractors in each electricity department and how their ceilings will be defined
1. Pricing mechanism: reference prices along with an improved pricing mechanism are expected to yield more accurate prices
2. Contract ceiling: contract ceiling is distributed based on contractors’ work capacities, prequalification scores and bids
3. Awarding strategy: will determine who gets awarded a contract, and what their ceiling will be. If contractor refuses to sign, his ceiling is given to the next in line contractor (cascading)
1. Guarantees: Bid bonds are required from contractors. These are refundable unless contractor confirms intent to sign contract. Bank guarantees are 5% of contract ceiling.
2. Contract duration: new UR contract term is reduced to 2 years with 1 optional year
3. Payment terms: 50% payment upon completion of work is incorporated to allow better liquidity
4. KPIs: KPIs are integrated in the contract to objectively measure contractor's performance, and linked to SEC’s evaluation sheet
5. Incentives & penalties system: the building blocks for a future incentive & penalty system are put in place
Tendering Contracting2 3
A number of key recommendationsare implemented in Phase 1
Prequalification1
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PREQUALIFICATION TOOLS CONTRACTING & TENDERING TOOLS
12+ operational tools are developedto facilitate the operationalization of the new process
CONTRACTING GUIDE
UPDATED CONTRACT CLAUSES
KPI EVALUATION
PRICE UNIFORMIZATION
COVERAGE ANALYSIS
MODEL
VALUE ALLOCATION & COMMITMENT
INSTRUCTIONS FOR BIDDERS
WORK ORDER ALLOCATION
TOOL
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TenderingPrequal Contracting
Bids from last tendering process are entered
into model
Model applies appropriate inflation
factor
New price uniformization
methodology is applied to bids
Final historic reference prices are generated
Historic bids entered to be compared against new
contract bids
An inflation factor based on a detailed contractor cost model is applied to
historical bids
New contract bids are uniformized on a line item
level using a standard deviation methodology
Bids are compared to historic reference prices
and final prices are calculated
Initiation includes developing historicreference prices to gauge
contractor bids
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SEC WILL DETERMINE TOTAL COVERAGE REQUIRED IN EVERY OFFICE
…AND DISTRIBUTE IT ACCORDINGLY TO CONTRACTORS
0
100
200
300
400
Forecasted work value
Madinah Office
260
Total coverage required
391
Max. ceilings
Contractor A
Contractor B
Contractor C
Contractor D
391
Min. ceilings
Contractor A
Contractor B
Contractor CContractor D
156
Work Value (M SAR)
Note: This data pertains to the Madinah office onlySource: SEC data
Demand
EXAMPLE OF MADINAH OFFICE
Supply
x150% ~ x
40%
Contractors’ bids and prequal scoreswill be used in determining the
contract ceilings
TenderingPrequal Contracting
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CONTRACT SAFETY REQUIREMENTS ARE UPDATED TO INTEGRATE 5-STAR SYSTEM
TenderingPrequal Contracting
5 star safety system is now a mandatory system that all contactors
must abide by
CONTRACT SAFETY REQUIREMENTS ARE UPDATED TO INTEGRATE 5-STAR SYSTEM
• Safety KPIs are incorporate in contractor performance measurement:- Number of Type 1 (First Aid) Incidents per 1 M work- Number of Type 2,3,4 (Injury, Handicap, Death) Incidents per 1
M work- Percentage of times that work site complied with SEC safety
standards
• 12% of the points in the prequalification scoring pertains to safety record & HSE systems
• Safety performance averaged over the last three months will be reflected in work allocation through KPIs
• Contract addendum enforces the 5-star safety system in performance
• Safety systems will be checked in post-signing stage. Contract is subject to termination if standards are not met
• Non-compliance on safety requirements for trenches subject contractors to a penalty of 200 SAR
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Timely Work Performance
1. Percentage of WOs completed within time (count)
Total work orders completed on time compared to total number of WOs completed
2. Percentage of WOs completed within time (value)
Value of all work orders completed on time compared to all work value performed under URC
5. Average delay on delayed WOs (count) The average number of delayed days for all work orders that have delays
7. Density of contractor work Average work value for a given contractor's work orders
Safety Performance
9. Number of Type 1 (First Aid) Incidents per 1M SAR work
Number of type 1 incidents that happen with a given contractor compared to his value of work
10. Number of Type 2,3,4 (Injury, Handicap, Death) Incidents per 1M SAR work
Number of type 2, 3, 4 incidents that happen with a given contractor compared to his value of work
12. Percentage of times that work site complied with SEC safety standards
Number of contractor site visits that complied with SEC safety standards compared to total number of site visits
Collaboration & Responsiveness
18. Average number of days to accept work order Response time of contractor when a work order is issued
20. Number of emergency and maintenance rejected WOs* Number of emergency and maintenance rejected work orders in a given month
21. Number of construction rejected WOs Number of construction rejected work orders in a given month
CATEGORY KPI DESCRIPTION
TenderingPrequal Contracting
~10 KPIs were developed based oncurrent situation & best practices
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KPI DASHBOARD TO BE GENERATED MONTHLY…
…AND AUTOMATICALLY LINKED TO EVALUATION USING WEIGHTS
TenderingPrequal Contracting
New evaluation system will the building block for a future incentive & penalty scheme
We have developed a newdashboard for KPIs linked to the
standard evaluation form