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ASSIGNMENT No. 2

PROJECT MANAGEMENT

MBA-5539

Topic:

Contract and Procurement Management Techniques

Presented By: Azhar Hussain AD-514039

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ACKNOWLEDGEMENT

It is a pleasure to thank those who made this report possible such as my teacher (Sir Ahsan

Qureshi), who gave me the moral support and proper guidelines, I required and my friend M. Aftaab

Abbasi, who helped me with the research material and case study of the selected organization.

I also would like to make a special reference to my colleagues and key officials of the

organization, especially Mr. Azhar serving as Cost Controllers, under practical study who gave me

access to all record and policies.

Without their cooperation I could not have gotten such relevant data.

Azhar Hussain

AD-514039

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AN ABSTRACT

The project procurement management knowledge area includes processes that are used to manage

what to procure and when to procure it. Project procurement management begins at the point when the new

project is initiated and detailed decisions are starting to be made as to what portion of the project will be

performed with one's own staff, and what portion will be sent to another company for performance.

Every project involves commitments, and even though these may be "internal", i.e. not "arms-length"

and therefore not legally based, many of the principles still apply. The same is true even if those

commitments are purely informal. Come to think of it, the project itself is a commitment, a "contract",

between the project manager and the project's sponsor a commitment to deliver a product scope at the

required quality on time and within budget. The bottom line is that this subject is an inescapable topic in

project management.

Project Procurement Management contains following key areas, which are very useful in better

procurement management.

1. What to Procure

2. When to procure

3. Procurement Categories

4. Planning for the Procurement of Project Scope

5. Corporate Teaming Arrangements

6. Procurement Risks

7. Selection of Contract Types

8. The "Project Procurement Management Plan"

9. Planning for the Solicitations

10. Legal Aspects of Project Procurements

11. Solicitation of Seller Proposals

12. Source Selection and Contract Award

13. The Management of Project Procurements:

14. Closing out Project Procurements

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TABLE OF CONTENTS

TOPIC Page #

Introduction 5

Project Management: 5Contract 6

Procurement 6

Procurement Strategies 7

Procurement Planning 8

Procurement Steps 8

Project Procurement Process 9

Project Procurement Management 10

Techniques Of Procurement 12

Frontier Works Organization 13

Objective And Focus 14

Successful Projects Of The Organization 15Most Recent Completed Project Of FWO 19

Data Collection Methods 17

SWOT Analysis 20

Conclusion 22

Recommendations 22

References 23

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INTRODUCTION

PROJECT:

A group of elements, either human or nonhuman, that is organized and arranged in such a way that

the elements can act as a whole toward achieving some common goal or objective.

A Composite of equipment, skills and techniques capable of performing and supporting an

operational role. A complete system includes related facilities, equipment, material services, and personnel

required for its operation to the degree that it can be considered as a self-sufficient unit in its intended

operational and support environment.

One of the principal functioning entities comprising the project hardware within a project or

program. The meaning may vary to suit a particular project or program area. Ordinarily a system is the first

major subdivision of project work.

A project is within a program as an undertaking that has a scheduled beginning and end, and that

normally involves same primary purpose within specified cost.

PROJECT MANAGEMENT:

Project management is the discipline of planning, organizing, securing andmanaging resources tobring about the successful completion of specific engineering project goals and objectives. It is sometimes

conflated with program management, however technically that is actually a higher level construction: a

group of related and somehow interdependent engineering projects. A project is a temporary endeavor,

having a defined beginning and end (usually constrained by date, but can be by funding or deliverables),

undertaken to meet unique goals and objectives, usually to bring about beneficial change or added value.

The temporary nature of projects stands in contrast to business as usual (or operations), which are repetitive,

permanent or semi-permanent functional work to produce products or services. In practice, the management

of these two systems is often found to be quite different, and as such requires the development of distinct

technical skills and the adoption of separate management.

The primary challenge of project management is to achieve all of the engineering project goals and

objectives while honoring the preconceived project constraints. Typical constraints are scope, time, and

budget. The secondaryand more ambitiouschallenge is to optimize the allocation and integration of

inputs necessary to meet pre-defined objectives.

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CONTRACT

An agreement with specific terms between two or more persons or entities in which there is a

promise to do something in return for a valuable benefit known as consideration.

In law, a contract is a legally binding agreement between two or more parties which, if it contains the

elements of a valid legal agreement, is enforceable by law or by binding arbitration. A legally enforceable

contract is an exchange of promises with specific legal remedies for breach. These can include

compensatory remedy, whereby the defaulting party is required to pay monies that would otherwise have

been exchanged were the contract honoured, or an Equitable remedy such as Specific Performance, in which

the person who entered into the contract is required to carry out the specific action they have reneged upon.

An agreement is said to be reached when an offer capable of immediate acceptance is met with a

"mirror image" acceptance (i.e., an unqualified acceptance). The parties must have the necessary capacity to

contract and the contract must not be either trifling, indeterminate, impossible, or illegal. Contract law is

based on the principle expressed in the Latin phrase pacta sunt servanda (usually translated "agreements are

to be kept", but more literally "pacts must be kept"). Breach of contract is recognized by the law and

remedies can be provided.

As long as the good or service provided is legal, any oral agreement between two parties can

constitute a binding legal contract. The practical limitation to this, however, is that generally only parties to

a written agreement have material evidence (the written contract itself) to prove the actual terms uttered at

the time the agreement was struck. In daily life, most contracts can be and are made orally, such as

purchasing a book or a sandwich. Sometimes written contracts are required by either the parties, or by

statutory law within various jurisdiction for certain types of agreement, for example when buying a house or

land.

PROCUREMENT

Procurement is the acquisition of appropriate goods and/or services at the best possible total cost of

ownership to meet the needs of the purchaser in terms of quality and quantity, time, and location.

Corporations and public bodies often define processes intended to promote fair and open competition for

their business while minimizing exposure to fraud and collusion.

Almost all purchasing decisions include factors such as delivery and handling, marginal benefit, and

price fluctuations. Procurement generally involves making buying decisions under conditions of scarcity. Ifgood data is available, it is good practice to make use of economic analysis methods such as cost-benefit

analysis orcost-utility analysis.

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An important distinction is made between analysis without riskand those with risk. Where risk is

involved, either in the costs or the benefits, the concept ofexpected value may be employed.

Direct procurement and indirect procurement

TYPES

Direct

procurementIndirect procurement

Raw material and

production goods

Maintenance, repair,

and operating supplies

Capital

goods and

services

F

E

A

T

UR

E

S

Quantity Large Low Low

Frequency High Relatively high Low

Value Industry specific Low High

Nature Operational Tactical Strategic

ExamplesCrude oil in

petroleum industryLubricants, spare parts

Machinery,

computers

Based on the consumption purposes of the acquired goods and services, procurement activities are

often split into two distinct categories. The first category being direct, production-related procurement and

the second being indirect, non-production-related procurement.

Direct procurement occurs in manufacturing settings only. It encompasses all items that are part of

finished products, such as raw material, components and parts. Direct procurement, which is the focus in

supply chain management, directly affects the production process of manufacturing firms. In contrast,

indirect procurement activities concern operating resources that a company purchases to enable its

operations. It comprises a wide variety of goods and services, from standardised low value items like office

supplies and machine lubricants to complex and costly products and services like heavy equipment and

consulting services.

PROCUREMENT STRATEGIES

There are two basic procurement strategies, by which an organization attatins its objectives;

1) Corporate Procurement Strategy: The relationship of sepecific procurement actions to

the corporate strategy. An example of this would be centeralized procurement.

2) Project Procurement Strategy: The relationship of specific procurement actions to the

operating environment of the project. An example of this would be when the project manager is

allowed to perform sole source procurement withorut necessarily involving the centralized

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procurement group, such as purchasing of a special chemical for an R&D project or hiring a

vehicle or Road Roller/Buldozer for a construction project.

Project procurement strategies can differ from corporate procurement stragegies because of constrainsts,

availability of critical resources, and specific customer requirements. Corporate strategies might promote

purchasing small quanities from several qualified vendors, whereas project strategies may dictate sole

source procurement.

PROCUREMENT PLANNING

Procurement planning usually involves the selection of one of the following as primary objective:

1. Procure all good/services from a single source.

2. Procure all good/services from multiple sources.3. Procure only a small portion of the goods/services..

4. Procure none of the good/services.

PROCUREMENT STEPS

Procurement life cycle in modern businesses usually consists of seven steps:

1. Information Gathering : If the potential customer does not already have an established

relationship with sales/ marketing functions of suppliers of needed products and services (P/S), it is

necessary to search for suppliers who can satisfy the requirements.

2. Supplier Contact : When one or more suitable suppliers have been identified, requests for

quotation, requests for proposals, requests for information orrequests for tendermay be advertised,

or direct contact may be made with the suppliers.

3. Background Review : References for product/service quality are consulted, and any

requirements for follow-up services including installation, maintenance, and warranty are

investigated. Samples of the P/S being considered may be examined, or trials undertaken.

4. Negotiation : Negotiations are undertaken, and price, availability, and customization possibilities

are established. Delivery schedules are negotiated, and a contract to acquire the P/S is completed.

5. Fulfillment : Supplier preparation, expediting, shipment, delivery, and payment for the P/S are

completed, based on contract terms. Installation and training may also be included.

6. Consumption, maintenance, and disposal : During this phase, the company evaluates the

performance of the P/S and any accompanying service support, as they are consumed.7. Renewal : When the P/S has been consumed and/or disposed of, the contract expires, or the product

or service is to be re-ordered, company experience with the P/S is reviewed. If the P/S is to be re-

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ordered, the company determines whether to consider other suppliers or to continue with the same

supplier.

JUST IN TIME

Another common procurement issue is the timing of purchases. Just-in-time is a system of timing the

purchases of consumables so as to keep inventory costs low. Just-in-time is commonly used by Japanese

companies but widely adopted by many global manufacturers from the 1990s onwards. Typically a

framework agreement setting terms and price is created between a supplier and purchaser, and specific

orders are then called-offas required.

PROJECT PROCUREMENT PROCESS

A Procurement Management Process, or Procurement Process, is a method by which items are

purchased from external suppliers. The procurement management process involves managing the ordering,

receipt, review and approval of items from suppliers. A procurement process also specifies how the supplier

relationships will be managed, to ensure a high level of service is received. This is a critical task in

Procurement Management. In essence, the procurement process helps you "get what you have paid for

Procurement Management process will help us to purchase goods and services from external

suppliers. It gives us a complete procurement process and procurement procedures, which explain step-by-

step, how to purchase from suppliers.

Procuring goods and services from external suppliers can be a critical path for many projects. Often,

the performance of the supplier will reflect on the performance of the overall project team. It's therefore

crucial that you manage your suppliers performance carefully, to ensure that they produce deliverables

which meet your expectations.

We need to implement a Procurement Process any time we want to buy items from external

suppliers. By using this Procurement Management Process, we can ensure that the items provided meet our

need. It also helps we manage the supplier relationship, ensuring that any issues are resolved quickly. By

implementing a Procurement Process, we can ensure to get the maximum value from our supplier

relationship.

Project Procurement Management

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1. Procurement Management involves getting work done by people outside the project team. Project

Procurement Management includes administering contracts and change control process to manage

contracts or purchase orders. The knowledge area of Project Procurement Management consists of

the following processes -

Procurement Management Processes

Process Project Phase Key DeliverablesPlan Procurements Planning Procurement Management Plan

Conduct Procurements Execution Selected Sellers, Procurement contract award

Administer Procurements Monitoring and Controlling Change requests

Close Procurements Closure Closed procurements

2. The Plan Procurement process involves build versus buy decisions. The Inputs, Tools and

Techniques, and Outputs of Plan Procurement process are listed in the table below.

Plan Procurement process

Inputs Tools and Techniques OutputsScope baseline Make-or-buy analysis Procurement management plan

Requirements documentation Expert judgment Procurement statements of work

Teaming agreements Contract types Make-or-buy decisions

Risk register Procurement documents

Risk-related contract decisions Source selection criteria

Activity resource requirements Change requests

Project schedule

Activity cost estimates

Cost performance baseline

Enterprise environmental factors

Organizational process assets

3. A contract is a formal agreement. It is a legal document biding to both seller and buyer. Changes to

contract must be in writing and formally controlled. Most Governments back all contracts by

providing a court system.

4. The process of Conduct Procurement involves receiving seller responses, selecting a seller, and

awarding a contract. During this process bids or proposals from sellers are evaluated, and one ormore seller is selected to execute the work.

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Conduct Procurement process

Inputs Tools and Techniques Outputs

Project Management Plan Bidder conferences Selected sellers

Procurement documents Proposal evaluation techniques Procurement contract award

Source Selection criteria Independent estimates Resource calendars

Qualified seller list Expert judgment Change requests

Seller proposals Advertising Project management plan updates

Project documents Internet search Project document updates

Make-or-buy decisions Procurement negotiations

Teaming agreements

Organizational process assets

5. Sole Source refers to a market condition in which only one qualified seller exists in the market.

Single Source refers to a market condition in which the company prefers to contract with only one

seller.

Oligopoly refers to a market condition where very few sellers exist, and the action of one seller will

have impact on other seller prizes.

6. Bidder conferences are meetings between buyer and sellers before the bid are submitted. The

conference is used by buyers to provide consistent information to all sellers.

7. The process of Administer Procurement involves managing procurement relationships and ensuringthe seller performance meets the procurement requirements.

Administer Procurement process


Procurement documents Contract change control system Procurement documentation

Project management plan Procurement performance reviews Organizational assets updates

Contract Inspection and audits Change requests

Performance reports Performance reporting Project management plan updates

Approved change requests Payment systems

Work performance information Claims administrationRecords management system

8. Contract can be used as a risk management tool, as in transferring risk.

9. Centralized Contracting refers to a separate contracting office that handles contracts for all

projects. In De-centralized Contracting a contract administrator is assigned for each project.

10. Force majeure is a powerful and unexpected event, such as hurricane or other disaster.

11. Privity is contractual information between customer and vendor.

12. The process of Close Procurement involves completing each procurement. The process involves

verifying that all planned work as per the contract has been completed.

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Close Procurement process


Project management plan Procurement audits Closed procurements

Procurement documentation Negotiated settlements Organizational process updates

Records management system

TECHNIQUES OF PROCUREMENT:

Following are the techniques, which can be useful for efficient and economical procurement:

1. Multiple Sources : Multiple Sources are useful for timely and economical completion of

the project, because when we have a lot of procurement sources, risk of delay in delivery and

over pricing will automatically decrease.2. Advertisement In Appropriat Media: Procrument advertisement in appropriate in

appropriate media is very useful in economical procurement due to competition. But not to

advertise minor things in media, these things should be purchased from the nearby market,

their advertisement will result in high cost.

3. Contract should be according to requirement; Contract must be according to the

requirement and specification of the project, otherwise it will be useless.

4. Never compromise on quality: Quality always count in the procurement. Insufficientquality will suffer the quality and scope of the contract, which will be harmful in the long

run.

5. Centeral Procuremen: Centeral procurement is always useful to reduce the cost. It is

also useful to complete the project in specified time.

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PRACTICAL STUDY OF THE ORGANIZATION

Frontier Works Organisation

Frontier Works Organisation (also known as FWO) is a construction andmilitary

engineeringbranch of thePakistani Army that was created in 1966. It is the part of the Pakistan Army Corps

of Engineers and it has credited to build numerous bridges, roads, tunnels, airfields and dams in Pakistan. It

is currently led byMajor-GeneralNajeeb-Ullah Khan. A popularly known unit, the FWO has credited to

design and constructed the Karakoram Highway as well as building numerous civil and military

infrastructure for the Government of Pakistan and the Pakistani Armed Forces.

Frontier Works Organization (FWO)

Active 1966-Present

Country Pakistan

Branch Pakistan Army

Type Civil, Construction, Combat, Structural, and Military engineering

Role Civil and Military Construction operations and projects

Part of Pakistan Army Corps of Engineers and Military Engineering Service

Nickname (FWO)

Anniversaries Defence Day

Equipment Engineering vehicles

EngagementsIndo-Pakistani War of 1971, Chagai Nuclear Testing, Operation Parakram, War

in North-West Pakistan, Attabad Lake OperationCommanders

Colonel

Commandant of the

Corps of Engineers

Major-GeneralAsif Ali, (Acting) Engineer-in-ChiefPA.

Corps Commander

of the FWOMajor-GeneralNajeeb-Ullah Khan, Directorate-General PA.

Notable

commandersBrigadier-GeneralMuhammad Sarfraz

Aircraft flown

Transport Bell 206 Jet Ranger

One of the leading Organization which has performed well in the past doing good in the present and

aiming excellence in Future. As FWO is world famous for its construction of Bridges, Roads, Highways and

Other all kinds of Huge construction, one of the example must always be wisper which is the construction of

Karakorum Highway also known as Shahra-e-Karakorum between Pakistan and China which was the first

assignment of this organisation. FWO is also divided in many groups that are led by a brigadier/Brigadier-

General who is the commanding officer of that FWO group.

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OBJECTIVES AND FOCUS

The FWO is issued its code of ethics and objectives.

1. Survey, soil investigation for roads, airfields, dams, bridges, tunnels and mining etc.

2. Technical planning including preparation/vetting of designs.

3. Preparation/conclusion of contracts.

4. Planning / procurement of stores, equipment and plant.

5. Coordination / supervision of works.

6. Quality control and monitoring of projects.

7. Financial management of projects including budgeting and costing.

8. Repair of equipment / plant.

9. Logistic support to all units in the form of bulk supplies of rations, Petrol, Oil and

Lubrications, construction materials, stores.

10. Medical support to all units including evacuation of casualties by helicopter and provision of

facilities for major surgery and treatment of serious medical / dental cases.

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SUCCESSFUL PROJECTS OF THE ORGANIZATION:

Karakoram Highway Project: In the late 1960s, the Government of Pakistan and

Government of China under the existinggeopoliticalcompulsions to establish a road link with China. The

task was assigned to Pakistan Army in the view of the sensitive nature of the project but more so because ofthe difficulty of working in inaccessible remote areas. The army using its Corps of Engineers had already

worked in 1959 in connecting Gilgit with Pakistan through the Indus Valley Road and hence had the

necessary infrastructure already present in the area.

In the summer of 1966, a special military organisation was created by the Pakistan Army Corps of

Engineers for the construction of 805-kilometre long Karakoram Highway Road (commonly called KKH).

The funding was provided by the Ministry of Communications which exercised their control over the

gigantic project on behalf of Government of Pakistan. Thus was born the Organisation known as FWO

which later on in collaboration with the Chinese military engineers undertook this gigantic task.

Projects with Pakistan Atomic Energy Commission: The FWO began working with Pakistan

Atomic Energy Commission (PAEC) in the December of 1985. The FWO completed the engineering

design in 1986 and constructed the Uranium mining facility at Baghalchur in February 1987. The

construction ofKhushab Nuclear Complexbegan in somewhere in 1986, the FWO joined PAEC in 1987.

The FWO started to established a Army Bridge Camp/Base Depotnear at the Khushab, and has completed

the project under one month.

Thereafter in 1986, the FWO constructed the nuclear dump waste management plant at the

Baghalchur Facility under the code name, Baghalchur Project. The Baghalchur Project was completed in

January 1989. The same year and month, the FWO was assigned to build to build a Excavation building at

the Khushab Reactor, the work was completed in May 1989. In November, 1988, The FWO also build and

construct the Additional Link Road under the codename "Phase- lV Base Depot Khushab". The project was

completed in May 1991. In October 1990, the FWO was assigned a task to constructed a Plutonium mining

facility near at Punjab. The FWO completed the survey and feasibility studies which took three months[1].

FWO completed the construction of the mining facility in Thola Dagar, Punjab, under the codename Mining

Operation in Tholadogar in October 1991. The last reported work with PAEC was in 25 May 1998 when

FWO along side with another specialised military unitSpecial Development Works (SDW), and the Pakistan

Army Corps of Engineers (PACE), supervised the underground tunnelswhich was constructed by the SDW

and FWO in the late 1980s. The military scientists and engineers of the Corps of Engineers, FWO, andSDW were also present during thenuclear test at Kharan Desert, codenameChagai-II.

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Work with Military Engineering Service: In February 1982, the FWO performed its work

with Pakistan Army's engineering corps, Military Engineering Services (MES). The project-director was

noted military engineer then-Brigadier-GeneralZahid Ali Akbar. The FWO designed and constructed the

road and a bridge to connect Kahuta to Khan Research Laboratories (KRL) (then-known as Engineering

Research Laboratories (ERL) under the codename "Road KAK Bridge to KRL". The work was done in

September 1983.

Military Projects : The FWO has performed its record-breaking performance for the

establishment of military infrastructure forPakistani Armed Forces. The FWO, along with Army Corps of

Engineers, has designed and built numerous army airfields, military airport, military bases, and other

necessary infrastructure for thePakistan Armed Forces.

Pakistan Air Force : From January 1981 to April 2000, FWO has supervised and completed

twenty-nine military projects which also includes Peshawar Runway, Recarpeting ofPAF Base Mianwali,

PAF Base Rafiqui, PAF Base Minhas, Murid Airbase, Risalpur Airbase, and the emergency repair of the

Gilgit Airport. It has also constructed the Gujranwala Air Field and Skardu Airport.

Pakistan Army: Despite Army Corps of Engineers to supervise the military projects of Pakistan Army.

The FWO has gained significant experience while working closely with Military Engineering Service and

Army Corps of Engineers. From April 1986 till May 2000, the FWO had participated with Corps of

Engineers and Military Engineering Services in thirty-seven different projects.

Pakistan Navy: FWO has supervised and constructed the military infrastructure for the Pakistan

Navy, particularly the Gwadar port. In 1980, the contract was awarded to FWO to design, build, and

constructed the Gwadar International Airport. The work was done in 1984 and it was inaugurated the same

year. In 1984, FWO installed the Generator Room at Gwadaras well as it completed the constructed of the

Taxiway at the P.N.S. Mehran, the naval base of the Naval Air Arm in 1991. The same year, the FWO

design and constructed the Kalmat Naval Base's naval command office near at theKhor Kalmat.

Civilian projects: The Frontier Works Organisation has been heavily awarded contracts by the

Pakistan's provincial as well as the Pakistan's federal Government. During 1970s, the FWO had collaborated

and constructed twenty-seven projects for the National Highway Authority. Having a rich experience to the

field of constructions of the road, the FWO was awarded a contract by the Government of Balochistan in

1985 to constructed the road, under the codename Road Liari Ormara Phase-I. The Balochistan

Government continued to work with FWO and, from the period 1985 to 1992, the road project was

completed into nine different levels.

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http://en.wikipedia.org/wiki/Pakistan_Armyhttp://en.wikipedia.org/wiki/Military_Engineering_Servicehttp://en.wikipedia.org/wiki/Military_Engineering_Servicehttp://en.wikipedia.org/wiki/Military_engineerhttp://en.wikipedia.org/wiki/Brigadier-Generalhttp://en.wikipedia.org/wiki/Zahid_Ali_Akbarhttp://en.wikipedia.org/wiki/Zahid_Ali_Akbarhttp://en.wikipedia.org/wiki/Bridgehttp://en.wikipedia.org/wiki/Kahutahttp://en.wikipedia.org/wiki/Khan_Research_Laboratorieshttp://en.wikipedia.org/wiki/Engineering_Research_Laboratorieshttp://en.wikipedia.org/wiki/Engineering_Research_Laboratorieshttp://en.wikipedia.org/wiki/Pakistani_Armed_Forceshttp://en.wikipedia.org/wiki/Pakistan_Armed_Forceshttp://en.wikipedia.org/wiki/Pakistan_Armed_Forceshttp://en.wikipedia.org/wiki/Twenty-ninehttp://en.wikipedia.org/wiki/Peshawar_Flying_Clubhttp://en.wikipedia.org/wiki/PAF_Base_Mianwalihttp://en.wikipedia.org/wiki/PAF_Base_Rafiquihttp://en.wikipedia.org/wiki/PAF_Base_Minhashttp://en.wikipedia.org/wiki/Murid_Airbasehttp://en.wikipedia.org/wiki/Murid_Airbasehttp://en.wikipedia.org/wiki/Risalpur_Airbasehttp://en.wikipedia.org/wiki/Risalpur_Airbasehttp://en.wikipedia.org/wiki/Gilgit_Airporthttp://en.wikipedia.org/wiki/Skardu_Airporthttp://en.wikipedia.org/wiki/Pakistan_Navyhttp://en.wikipedia.org/wiki/Pakistan_Navyhttp://en.wikipedia.org/wiki/Gwadar_porthttp://en.wikipedia.org/wiki/Gwadar_International_Airporthttp://en.wikipedia.org/wiki/Gwadarhttp://en.wikipedia.org/wiki/Taxiwayhttp://en.wikipedia.org/wiki/P.N.S._Mehranhttp://en.wikipedia.org/wiki/Pakistan_Naval_Air_Armhttp://en.wikipedia.org/w/index.php?title=Kalmat_Naval_Base&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Kalmat_Naval_Base&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Khor_Kalmat&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Khor_Kalmat&action=edit&redlink=1http://en.wikipedia.org/wiki/National_Highway_Authority_(Pakistan)http://en.wikipedia.org/wiki/Government_of_Balochistanhttp://en.wikipedia.org/wiki/Pakistan_Armyhttp://en.wikipedia.org/wiki/Military_Engineering_Servicehttp://en.wikipedia.org/wiki/Military_engineerhttp://en.wikipedia.org/wiki/Brigadier-Generalhttp://en.wikipedia.org/wiki/Zahid_Ali_Akbarhttp://en.wikipedia.org/wiki/Bridgehttp://en.wikipedia.org/wiki/Kahutahttp://en.wikipedia.org/wiki/Khan_Research_Laboratorieshttp://en.wikipedia.org/wiki/Engineering_Research_Laboratorieshttp://en.wikipedia.org/wiki/Engineering_Research_Laboratorieshttp://en.wikipedia.org/wiki/Pakistani_Armed_Forceshttp://en.wikipedia.org/wiki/Pakistan_Armed_Forceshttp://en.wikipedia.org/wiki/Twenty-ninehttp://en.wikipedia.org/wiki/Peshawar_Flying_Clubhttp://en.wikipedia.org/wiki/PAF_Base_Mianwalihttp://en.wikipedia.org/wiki/PAF_Base_Rafiquihttp://en.wikipedia.org/wiki/PAF_Base_Minhashttp://en.wikipedia.org/wiki/Murid_Airbasehttp://en.wikipedia.org/wiki/Risalpur_Airbasehttp://en.wikipedia.org/wiki/Gilgit_Airporthttp://en.wikipedia.org/wiki/Skardu_Airporthttp://en.wikipedia.org/wiki/Pakistan_Navyhttp://en.wikipedia.org/wiki/Pakistan_Navyhttp://en.wikipedia.org/wiki/Gwadar_porthttp://en.wikipedia.org/wiki/Gwadar_International_Airporthttp://en.wikipedia.org/wiki/Gwadarhttp://en.wikipedia.org/wiki/Taxiwayhttp://en.wikipedia.org/wiki/P.N.S._Mehranhttp://en.wikipedia.org/wiki/Pakistan_Naval_Air_Armhttp://en.wikipedia.org/w/index.php?title=Kalmat_Naval_Base&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Khor_Kalmat&action=edit&redlink=1http://en.wikipedia.org/wiki/National_Highway_Authority_(Pakistan)http://en.wikipedia.org/wiki/Government_of_Balochistan


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MOST RECENT COMPLETED PROJECT OF FWO

Project Repair & Reconstruction of Wah Cant Roads

Project Manager Col: Abdul Wahid Khan

Time Allotted One year

Starting Time January 2008

Total Tender Cost 100 million

Client Military Engineering Services (Army)Completed in: December 2008

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Contractors and Suppliers of the Project:

Following are the main contractors, who participated during the reconstruction of the roads.

1. Pakistan State Oil (POL Contractor)

2. Fauji Cement (Cement Contractor)

3. Fecto Cement (Cement Contractor)

4. Ittehad Steel Mills Islamabad. (Iron Roll Suppliers)

5. Fazal Khan Steel mills Peshawar (Iron Roll Suppliers)

6. Khan Associated Taxila (Heavy Equipment Suppliers)

7. Jadoon Enterprisers Taxila (Heavy Equipment Suppliers)

8. Bashi Khan Suppliers Taxila (Construction material Suppliers)

9. Husnain Associates Rawalpindi (Construction material supolirs)

10. Crescent Enterprisers Lahore (General Order Suppliers)

11. Lal Khan Peshawar (Labour Suppliers)

Clauses of the Contract

Following are the main information provided in the Contract:

1. Contract #

2. Purchaser and his Agent (Signing Authority)

3. Seller and his Agent (Signing Authority)

4. Consignee Address

5. Detail of Store/Supply (Scope of the Contract)

6. Warning

Following are the main clauses of the contract:

1. Terms and Date of Delivery

2. Maker Name and Brand

3. Country of origin

4. Despatch Instruction

5. Packing and marking Instruction

6. Inspection Authority

7. Inspection Place

8. Checking of Store by Consignee

9. Terms of Payment

10. Duties and Taxes (Applicable or Not Applicable)

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11. Organization Guarantee

12. Suppliers Warranty/Guarantee

13. Advance sample (if required)

14. Price Reduction (If Store found insufficient)

15. Liquidated Damages (in case of Late Delivery)

16. Secrecy

17. Failure and Termination

18. No Demand Certificate (NDC)

19. Force Majeure

20. Litigation (In case of any dispute)

21. Signatures of both the parties

The project has been completed in stipulated time by the Frontier Works Organization(FWO) and a profit of Rs. 12 million has been earned by the organization. It means that it is a successful

project of the organization as the work done has been much appreciated by Military Engineer Services and

the Stake Holder, such as public of the area and the Chairman Wah Industries also much satisfied by the

work done. We have studied the project of the organization and the stake holders, and according to our

viewpoint following are the main reasons and techniques which are caused its successful completion.

TECHNIQUES USED IN THE PROJECT

Following are the techniques which are used to complete the task with in the cost.

1) Proper Estimation of the cost of the project

2) Effective gross work before bidding of the contract

3) Sub contracts are allotted contracts by the organization after generating proper competition

among the contractors.

4) Timely payment to the contractors5) Track Record of payment to the contractors

6) Hiring of the local contractors

7) Hiring of the Local Labour

8) Centralized procurement methods

9) No payment for rainy days to the Equipment Suppliers and Labour

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Following are the techniques which are used to complete the task with in the allotted time.

1) Use of multiple sources/contractors for the delivery of construction materials & machinery

2) Order for supply was given to the contractor well in time

3) In case of late supply, liquidated damages were imposed on the contractor according to the

contract.

4) In case of any delay in delivery of construction material & machinery, It was taken from Central

Procurement Office or nearby project.

5) Continuous Working except rainy days

6) Strict Control in the organization, as its employees are strictly handled if any lapse found at their

end.

Following are the techniques which are used to complete the task with in the scope.

1) Organization works according to the instructions of the client.2) Client was invited to inspect the sight periodically

3) Construction material inspected before and after delivery

4) Strict Control

5) Commitment of the Engineers

6) Bonous is given to the Engineers and other staff for successful completion.

DATA COLLECTION METHODS

Data has been collected by the following methods:

1. Data about the selected organization has been collected by:

a. Holding meeting with the officers of concerned organization,

b. By visiting the website of the organization.

2. However some of the included/related material has been downloaded from the internet.

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SWOT ANALYSIS

Strengths:

Following are the strengths of FWO.

1. Directors and engineers of FWO are highly educated very professional.

2. Staff is qualified, experienced and well trained.

3. Huge Financial sources as it are backed by Pak Army.

4. Widely spread network around the country.

5. A huge and well trained work force is also the strength.

6. Deadlines are not assigned to actions

Weaknesses:

Following are the weaknesses of FWO.

1. Some of officers and officials are Corrupt and dishonest, as they are used to receive gifts from the

contractors, in order to allot them contract.

2. Honest workers are not encouraged.

3. Random changes are made in the policies

4. Lower level management and staff workers are not allowed to participate in the future planning.

5. Process of orders is very formal and lengthy.

6. A lot of cost is incurred on outstation visits.

7. Directors and Supervisors are biased, as they have grudges for their colleagues.

Opportunities:

1. Innovations in Technology: Technology is innovating very quickly, which obsoletes old machines,

and new machines take their place. Organization can use Internet instead of other types of media to

reduce their cost.

2. Financial Resources: FWO has a lot of financial sources which can be used to purchase own

machinery to reduce the cost.

3. Huge work force can be utilized betterly to enhance the business and profit of the Organization.

4. Natural Disasters are also creating opportunity for the Organization

Threats:

1. Political instability of the country is very dangerous for the progress of the Organization.

2. Economic instability of the country as the Government Works are closed due to nonpayment.

3. Increasing construction costs.

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4. Load shedding also creating problems for the Organization because due to load shedding, fuel prices

are continuously increasing.

5. Threats from the terrorists frequently.

6. Lack of safety measure in the country.

7. Less Bonuses for the Staff

CONCLUSION

I got a lot of experience from FWO. The organization is on the way of progress. It has been

performing very well for many years. The management is professionally qualifies and experienced. The

Organization motivates their employees by providing different incentives. The organization should have to

satisfy the demands of the farmers.

I conclude that FWO is a fine organization. However, It is not providing desired result for the donors.

It has some positive points as well as some drawbacks. It tries to collect maximum data by the help of

efficient staff, who work day and nights for improvement of the quality of Research.

RECOMMENDATIONS:

For the improvement of the system of FWO, the following measures may be considered and

implemented on top priority basis:

1. The system may be free from any pressure. Political, bureaucratic, influential etc.

interference may not be allowed.

2. Honest workers may be encouraged by promotions, increments and other monetary rewards.

3. Corrupt and dishonest workers should be shunted out removed/punished in accordance with

rules and laws of the organisation.

4. The post for the Head of the Organisation may be a tenure post at least for Five Years so thathe can work, perform and progress without fear and favour of various groups. He can be

removed before his tenure in case of any mishap or contrary performance rendered by him

according to the laws and rules after providing him all opportunities of his innocence etc.

5. Payment should be timely, easy, adequate and accessible. Any delay in the payment will

cause loss to the contractors, and officers concerned may be taken responsible and punished

accordingly.

6. Contacts of th officers may be frequently maintained.

7. Service spirit may be inculcated rather to rule the employees.

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8. They would be more productive, cooperative, punctual and earners if they use their energies,

time and money in the proper way for the development of their own and others farms or

fields. The proper utilization of the borrowed money will bring good fortunes for them by

increasing more yields and earn more income through their continuous efforts, self education,

helpful behaviour of FWO Officers etc.

9. FWO should try to take big contracts, such as DHA and Motorway

10. Follow through on commitments made.

REFERENCES

1. Wikipedia/Organization/128987.com

2. FWO.com.pk

3. Class lecture

4. Article on FWO written by Professor Imran Hashmi (Dean of Faculty, University of

Agriculture Faisalabad)

5. Self efforts

neat-project

Documents