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CONTENTS
The 2011 International Procurement Yearbook
3RD ANNUAL EDITION
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I N T E R N AT I O N A L I N C .
VI
VII
PREFACE
ABOUT THE FIRM
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Section 1
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GENERAL - GLOBAL CONSTRUCTION PROCUREMENT TOPICS
PURCHASE ORDERS & CONTRACTS
PURCHASING / PROCUREMENT AND CONTRACTING METHODS
VARIOUS EORMS OF CONSTRUCTION CONTRACTS
INVITATION TO BID / INSTRUCTIONS TO BIDDERS / BID PACKAGE DOCUMENTATION
CONTRACT ADMINISTRATION
ORGANIZATIONAL ISSUES / PRROCUREMENT ROLES AND RESPONSIBILITIES
QUALITY CONTROL (QC/QA), SAFETY, INSPECTION, EXPEDITING AND
TRANSPORTATION ACTIVITIES
INTERNATIONAL PROCURMENT ISSUES
SAMPLES OF INTERNATIONAL AND USA CONSTRUCTION / CONSULTING CONTRACTS
COUNTRY PROCUREMENT: DATA ON 125 COUNTRIES
GLOSSARY OF INTERNATIONAL PROCUREMENT TERMS
PROCUREMENT FORMS
GLOBAL CONSTRUCTION PROCUREMENT TOPICS
Trends and issues we will see in 2011 and beyond
Procurement / Project Delivery Methods and Issues
Recent History and the influence of World Events on Engineering and
Construction Costs in the last couple of decades
Project Execution
Conventional approach: / Concurrent / Overlapping approach / Fast track approach
Various Types of Construction Projects: How do Purchase Orders vary from Contracts Engineering, Procurement and Construction (EPC)
List of Data / Engineering Deliverables supplied to Vendor to obtain fixed price quote
The Importance of Front End Planning
Defining the Project and the CAPEX Project Life Cycle Process
Project Team and Selection of Professional Services
Global Construction Procurement Purchasing / Contracting Challenges to be faced in
the next couple of decades and beyond are as follows
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Compass International Consultants Inc.
Morrisville, Pennsylvania, USA
Section 2
PURCHASING / PROCUREMENT AND CONTRACTING
Facility Procurement Steps
Specifications
The Buy Out / Procurement Procedure
Purchase Orders
Contracts
Request for proposals (RFP)
The General Purchasing / Procurement Planning Process
Fundamentals of the Purchasing / Procurement / Contracting Plan
Establishing Potential Bidders List / Pre-Qualify Bidders and Recommend list of
Pre-approved EPC, A/E, CM firms, contractors and vendors
Prepare Invitation to Bid Packages, Purchase Orders, and Contracts / Sub-Contracts etc.
Evaluation and Award of Purchase Orders Construction Contracts / Sub-Contracts /
Service Contracts
Purchase Order / Construction Contract Administration
The Materials / Equipment Procurement / Purchasing Responsibility Matrix
Planning for Commodities - Bulk / Prefabricated / Consumable Materials
Major Equipment (Process – Production Equipment) Planning
Front End Quality Planning
Instituting a Quality Control Plan
Setting up and establishing an Inspection / expediting plan
Some major issues to keep in mind regarding Purchasing / Procurement and Contracting
Copyright © 2011 Compass International, Inc.
CONTENTS | III.
II. | CONTENTS
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Section 3
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PURCHASING ACTIVITIES
Purchase Orders vs. Contracts
The Project Team / Organization
Home Office Procurement Group
The Four Step Purchasing – Procurement – Contracting process
Purchasing – Procurement – Contracting. Job descriptions
Purchasing – Procurement – Contracting Strategies
Proposals / Bids / Request for Proposals (RFP) / Tender Evaluations
Conclusion / Purchasing – Procurement – Contracting Tips
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Section 4
Section 5
CONSTRUCTION CONTRACTS & CONTRACT ADMINISTRATION
Five fundamental contract types
Fixed Price / Hard Money / Competitively Bid
Negotiated
Design-Build
Reimbursable Contracts / Cost-Plus / Pass through Contract
Schedule of Rates / Unit Price Contract
Request to bid letter / Request for proposal cover letter
Request for Quotation (RFQ)
Instructions to bidders
Bid opening / Analysis / Recommendation
International Construction Contracts
Sample contracts
Sample Design / Build Agreement related to Manufacturing Facility Expansion
Re-cap of main items
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Section 6
INTERNATIONAL PROCURMENT ISSUES
Globalization
Checklist of issues when working in an overseas country
Overseas Business Practices
Import Permits / Government Procedures
Currencies and Exchange Rates
Metric Considerations
Language Differences
Special Considerations for Working in Developing Countries
Final Thoughts on International Procurement
Copyright © 2011 Compass International, Inc.
Section 7
COUNTRY DATA & 2011 GENERAL NOTES
Afghanistan
Albania
Algeria
Angola
Argentina
Armenia
Australia
Austria
Azerbaijan
Bahrain
Bangladesh
Belarus
Belgium
Belize
Benin
Bhutan
Bolivia
Bosnia
Botswana
Brazil
Bulgaria
Burkina Faso
Burundi
Cambodia
Cameroon
Canada
Central African Republic
Chad
Chile
China
Colombia
Congo Democratic Republic
Costa Rica
Cote D’ Ivory
Croatia
Cuba
Cyprus
Czech Republic
Denmark
Dominican Republic
Ecuador
Egypt
El Salvador
Eritrea
Estonia
Ethiopia
Finland
France
Gabon
Gambia (The)
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QUALITY CONTROL (QC/QA), SAFETY, INSPECTION, EXPEDITING &
TRANSPORTATION ACTIVITIES
General standards / specifications
Quality Assurance/Quality Control Basic Steps
Submittals, Product Data and Shop Drawing
Issue and Approval of Shop Drawings and Samples
The shop drawing / submittals approval cycle
Expediting Checklist
Transportation Issues
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Georgia
Germany
Ghana
Greece
Guatemala
Guinea - Bissau
Guinea
Haiti
Honduras
Hong Kong
Hungary
India
Indonesia
Iran
Iraq
Israel
Italy
Jamaica
Japan
Jordan
Kazakhstan
Kenya
Kuwait
Laos
Lebanon
Libya
Madagascar
Malawi
Malaysia
Mali
Mexico
Mongolia
Morocco
Mozambique
Namibia
Nepal
Netherlands (The)
New Zealand
Nicaragua
Niger
Nigeria
Norway
Pakistan
Panama
Paraguay
Peru
Philippines
Poland
Portugal
Romania
Russia
Rwanda
Saudi Arabia
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Senegal
South Africa
South Korea
Spain
Sudan
Sweden
Switzerland
Syria
Tajikistan
Taiwan
Thailand
Togo
Tunisia
Turkey
Ukraine
United Kingdom
United States of America
Uzbekistan
Venezuela
Vietnam
Yemen
Zambia
International freight costs
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Section 8
GLOSSARY OF INERNATIONAL PROCUREMENT TERMS
AND PROCUREMENT RELATED FORMS
Copyright © 2011 Compass International, Inc.
SECTION 1 | 11.
10. | SECTION 1
ing / procurement methods can come back to haunt
an organization, they can cause delays, claims, back
charges, loss of profit and legal actions to name but
a few of the consequences.
Construction Procurement and Contracting
requires in depth front-end planning of the proposed
CAPEX project from the establishment of the initial
purchasing plan to the close-out of the CAPEX project and eventual handover to the end user.
The tasks involved in construction procurement
and contracting include some or all of the following:
• Front-end procurement planning
• Contracting / Contract administration
• Contract law
• Forms of contract
• QA/QC issues
• Expediting
• Home Office or Field Construction purchasing
• Purchasing terms
• International contracting and purchasing
• Standardized procurement checklists and forms
A basic understanding of the above topics and
issues is required to be successful with Construction
Procurement and Contracting, all of the above topics
will be addressed in more detail in the following sections of this reference guide.
The term “construction procurement” refers to
the activity of: The (Buy-out / Purchasing / Procurement construction related materials, installation
labor, permanent equipment (pumps, chillers and
any other equipment) and any required professional
service (A/E and CM) required for the completion
of a construction project. The fundamental tasks of
construction procurement / purchasing / materials
management i.e., obtaining all required permanent
and temporary construction materials, installation labor, equipment, and professional services that meet
the CAPEX project specifications and construction
schedule dates are described below:
Purchase orders - in the procurement of goods
and services (vendors / suppliers) make certain the
following is performed:
• Review and audit of vendor / supplier quali-
Copyright © 2011 Compass International, Inc.
fications and financial ability to perform scope of
work.
• Ensure at least three qualified bids are received
for each future purchase.
• Evaluate and condition bids for missing or
overstated scope items.
• Instigate a QA/QC system
• Execute and issue of purchase order to vendor /
supplier.
• Put into operation effective communication
systems with all interrelated parties.
• Expedite and monitoring delivery of purchased
items.
• Visit vendor / supplier fabrication shop to inspect quality and work progress.
• Plan for cost effective transport from vendors
shop to jobsite including offloading and temporary
storage.
• Produce monthly purchase order status report.
• Perform vendor / supplier administration (payment, drawing, inspection reports, and all other
required documentation, i.e. O/M manuals).
• Monitor potential damage or loss of materials,
equipment, and services and co-ordinate with vendors / suppliers insurance companies.
• Negotiate with vendor / suppliers contractual
issues and make recommendations to senior management.
• Ensure commercial and technical requirements of purchase order are fully complied to, and
purchase order is closed out at completion of work /
delivery to site.
The following is a typical list of General Information, Data / Engineering Deliverables supplied
to Vendor to obtain fixed price / unit price quote:
(This information would be furnished to Vendor via
the use of a Purchase Requisition or Purchase Order
and other related instructions to bidder’s documentation, together with drawings, specifications, QA/QC
requirements, insurance requirements and sample
purchase orders outlining the terms and conditions
of the order.):
Construction Contracts - Obtain the best com-
General Information, Data / Engineering Deliverables
TYPICALLY SUPPLIED TO VENDOR TO OBTAIN FIXED PRICE / UNIT PRICE QUOTE
REFERENCE NO.
TASK / DESCRIPTION
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Owners Purchasing Agent / Contact person
Telephone / E Mail Address / Fax #
Contact for Technical Questions
Contact for Commercial Questions
Project Name / Location / Reference Number
General description of items required
FOB Point / Works Location
Item # / Cost Code
Quantity of materials / items needed (Tons, LF, #, etc.)
List of specifications, country codes and standards that materials / components will conform to
List of drawings that materials / equipment will correspond to / conform to
Date when materials / components must be delivered to site
Listing of QA/QC requirements that order will comply to
O/M documentation requirements
Submittals / Shop Drawings requirements
Special packing instructions
Purchase price, fixed price or unit price basis
Discount
VAT / GST Other Taxes included or excluded
Domestic Freight costs / Ocean Freight costs
Tariffs / Import duties
Customs requirements
Escalation / Increased cost formulae if applicable
Weight of order Pounds - Kg /
Size CF – M3
Inspection requirements
Insurance included or excluded
Shipper / Freight Forwarding Agent
Validity of proposal
Required warranty period (1 year or 2 years)
Transport / Freight Carrier Information
P.O. Terms and Conditions (Payment Terms)
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SECTION 2 | 23.
22. | SECTION 2
Facility Procurement Steps
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ACTION ITEM
GENERAL NOTES:
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Evaluate current production / future production needs
CAPEX funds, ROI.
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Review the need to build / expand / renovate.
Can company afford this expenditure?
Does this make economic sense?
Identify business / manufacturing problems
and issues.
Formal decision to build / expand.
Assign in-house team.
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Select primary advisor(s).
Develop Scope of Work.
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Complete Front End Study.
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Determine Procurement options.
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Complete detailed design and construction work.
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Project start up and close out activities.
contracting costs is a significant means to reducing
costs. The objective of this database is assisting the
reader in this effort. Purchasing or Procurement, as
it is many times referred to, is the acquirement of
materials, equipment, supplies and services and the
setting up of mutually agreeable terms and conditions, linking contractually the seller and the purchaser. Purchasing or Procurement is an essential
operation of any engineering or construction-related
establishment. The purchasing or procurement
organization is charged with the challenge of getting a hold of the “correct” appropriate quantity and
quality of materials, equipment, and services at the
place of construction, at the time they are required,
at a cost that is in line with the approved project
financial expenditure plan. As was indicated earlier, a purchase order is many times used to obtain
/ procure basic materials and equipment; it can also
be used to procure (office cleaners, security guards,
Copyright © 2011 Compass International, Inc.
as complex manufacturing / packaging equipment or
perhaps a jacketed reactor or the like.
Standard Specifications – generic construction
specifications, these are widely used throughout the
construction industry; they have been developed
over many years. Many large Owner and Engineering firms and Construction companies have developed their own in-house specifications that work
for their construction and procurement applications.
There are a number of “canned” applications out
in the marketplace. For example, the Construction Specification Institute (CSI) specifications are
widely respected and used throughout the North
American construction industry.
Customized Specifications – made to order
construction specifications (as a rule needed for
somewhat complicated / complex items of manufacturing / production related equipment / engineered
item – such as control valves). Specifications that
call for much more specific / exacting requirements
than is the case with generic construction specifications, this may be related to materials of construction, operating performance, testing, installation
and assembly. Examples of this could be a complex compressor / heat exchanger, operating under
high temperature and pressure, the compressor or
heat exchanger may be the key major equipment
component(s) item that the manufacturing / operating facility relies on. If this component failed, the
total facility would go down.
The following is a checklist of issues / topics
that need to be well thought-out and addressed when
compiling a “specification” related to a Manufacturing / Process Equipment / Engineered Component
(for perhaps a rather complicated / complex item).
1. Scope of supply / description of number
of equipment items to be purchased together with
pumps, tanks, piping and electrical components.
2. Manufacturing / Production rate required.
3. Plot plans / sketches and general description
of where equipment will be located.
4. Operating Conditions (Pressure / Temperature / 24/7 / Batch / Continuous).
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Yes or No.
If yes: Select Owners representative, provide outline of duties
and responsibilities.
Program Manager, Construction Manager / Project Advisor.
Conduct detailed review of current facilities / operations.
Develop a program that meets or enhances future growth
plans.
Establish, production choices, cost and schedule criteria,
perform ROI economic and risk analysis.
Owner self performs the EPC effort using third party
consultants and specialized sub-contractors. Design / Build,
GMP, Turnkey, A/E design with lump sum construction bids,
negotiated contracts or CM approach.
Decide on construction approach, Conventional Concurrent /
Overlapping or Fast track approach.
Execute and complete program.
office furniture, office supplies, the rental of cranes
etc.). A contractor / sub-contractor will use a purchase order to purchase stone, hardcore, ready mixed
concrete, insulation, siding, lumber, nails and other
bulk / commodity type supplies etc. The contractor
/ sub-contractor will many times issue “standard”
(their own contracts with their specific terms and
conditions) contracts for certain items of work that
they don’t typically self perform. An example of this
could be waterproofing, roofing, painting, mechanical and electrical work.
SPECIFICATIONS:
There are in essence, two types of specifications,
standard – generic specifications (off the shelf) type
and customized / modified – i.e. made to order / custom-made specifications, the latter is usually needed
for somewhat complicated / complex items of
manufacturing / production related equipment, such
5. Materials of construction.
6. Required controls / local instrumentation and
integration.
7. Codes and standards that need to be conformed to.
8. Required utilities needed (water, steam, compressed air, power and waste).
9. Installation Procedures.
10. Maintenance issues.
11. Recommended Spare Parts.
12. Testing requirements / Witness Testing /
NDT Issues.
13. Operating /Maintenance procedures and
manuals.
14. Warranty issues.
15. Required submittals, Shop Drawings / Cut
Sheets.
16. Vendor Assistance and Support.
17. Shipping location and transportation instructions.
18. Required Mill Certificates.
THE BUY OUT / PROCUREMENT PROCEDURE
Procurement can be separated into two main types:
(1) Purchase Orders: Prepared for goods and
services, i.e. ready-mixed concrete, pipe, pipe fittings, 200 feet of timber, 50 sheets of plywood, 10
doors, a number of pumps etc., a vendor provides
50 cubic yards of ready-mixed concrete, or a specific pump or vessel and delivers it to the site for
an agreed price in a stipulated time frame, that is
spelled out in the purchase order. A purchase order
many times is the most trouble-free procurement
document to prepare (it may be a one or at most a
two page pre-printed document with the terms and
conditions – printed and spelled out on the back of
the purchase order).
(2) Contracts / Sub-Contracts: A construction
contract is much more complex, it involves installation labor, construction equipment, jobsite trailers,
coordination with other trades / contractors, the contractor needs to buy a bunch of materials and equipment, the construction workers need to be insured,
Copyright © 2011 Compass International, Inc.
SECTION 7
102. | SECTION 6
with international purchasing should be aware of
potential logistic problems and delays that occur in
some developing countries. Some of these problems
could be lack of adequate roads or transport services,
small or unsuitable port facilities, customs officials
that are looking for problems, antiquated telecommunications, and lack of qualified material management type personnel, obtaining local government
permits to name but a few. The information that is
gained from the above list should assist the front-end
purchasing effort and should hopefully minimize
any major problem areas that could possibly arise.
U.S. GOVERNMENT / GENERAL
INFORMATION SOURCES
The following are U.S. government agencies that
can provide general information related to trading
and exporting with other overseas countries. The
U.S. Department of Commerce serves to promote
U.S. organizations trading overseas and has some
of the most detailed information available on the
subject of exporting or operating in a foreign country. The data and programs that will be useful to
U.S. based construction-related organizations are
kept up to date in the Department’s International
Trade Administration (ITA), of which the subdivision called the U.S. and Foreign Commercial Service (US&FCS) has a database of overseas contacts.
Communicating with one of the 60-plus Department
of Commerce district offices around the country can
provide construction-related organizations with data
about any overseas country.
The address of this organization is:
U.S. Department of Commerce
1401 Constitution Ave., NW
Washington, DC 20230
Main Telephone Number: (202) 482-2000
Four other useful sources of information related
to overseas construction are:
Copyright © 2011 Compass International, Inc.
The Agency for International Aid; coordinates
the U.S. foreign economic assistance programs to
over 70 less developed countries of the world. The
address of this agency is:
U.S. Agency for International Development
Ronald Reagan Building
Washington, D.C. 20523-1000
Telephone (202) 712-4810:
Country Procurement Data
LISTING OF VARIOUS COUNTRIES
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The World Bank located in Washington, DC.
The World Bank
1818 H Street, NW
Washington, DC 20433 USA
Telephone: (202) 473-1000
Fax: (202) 477-6391
The Overseas Private Investment Corporation
(O.P.I.C.) promotes U.S. private investments in a
number of the less developed nations. The address
of this organization is:
Overseas Private Investment Corporation
Information Officer, Office of External Affairs
1100 New York Avenue, NW
Washington, D.C. 20527
Telephone: (202) 336-8400
The Export-Import Bank of the United States
provides assistance in financing exports of U.S.
companies. The address of this organization is:
The Export-Import Bank of the United States
811 Vermont Avenue, N.W.
Washington, DC 20571
Telephone: (202) 565-3946 (EXIM) or
(800) 565-3946 (EXIM)
General 2011 Notes
NOTE
SPECIFIC DATA AND INFORMATION
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Type of Government:
Capital City of Country / Population:
Major Cities:
Population of Country:
Area of Country:
2011 Gross Domestic Product of Country (GDP):
2011 GDP per Head:
2011 Inflation Rate (Average of consumer and construction inflation):
Time EST (Eastern USA Time – New York City):
Current VAT / GSA / TVA / IVA Tax Rate (The highest rate – usually there are 2 or 3 lower rates are utilized by tax
authorities for minor items):
Country exchange rate V’s US $ August 13th, 2010:
Freight - percentage of FOB Equipment / Material cost, for ocean freight from USA to specified country, consider
adding 2 - 3% for transporting from ex-works to US sea port / Typical number of ocean freight days from US East or
West Coast port to specific country.
Local Freight in foreign country:
Government website:
Import duties / tariffs of FOB Equipment / Material costs expressed as a percentage:
Note A refers to http://www.ita.doc.gov or http://www.usitc.gov or various embassy trade desks for exact value.
Note B http://ec.europa.eu or http://www.usitc.gov or various embassy trade desks.
Electricity used in country:
Telephone dialing code:
Professional Staff - Architect / Engineering / Accountant / Purchasing Agent etc. - hourly billing rates in US dollars
(note these are lower end rates, rates in capital and or major cities can be as much as 50% more):
Billing rate for Skilled worker working on facilities designed to local – indigenous standards and specifications (note
these are lower end rates, rates in major cities can be as much as 20% - 40% more):
Un-Skilled worker working on facility designed to local / indigenous standards (note these are lower end rates, rates
in major cities can be as much as 50% more):
Local Worker Productivity V’s USA Gulf Coast (Houston, Texas = 1.00):
Local Location Factor V’s USA Gulf Coast:
The above location factor represents a North American / Western European Manufacturing company completing a
facility in this country for the first time (a first time CAPEX project – the engineering / procurement / construction
endeavor will initially experience a steep learning curve as the project navigates its way through local import
regulations and various local / national permitting issues):
** Reduce above location factor by 0.03-0.09 points if the Owner and the selected EPC firm engineering,
procuring and constructing the facility has built or has existing operating facilities / operating units already in
country that have gone through this initial learning curve):
Use higher factor for more sophisticated facilities.
Local Bulk Material Factor V’s USA Gulf Coast (does not include cable, instrumentation devices):
Major Sea Ports:
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SECTION 7 | 111.
110. | SECTION 7
AUSTRALIA
Australia is the largest island in the world; eighty
percent of the country is semi arid desert. Australia was established with the migration of European
pioneers in the last one hundred and fifty years.
Australia’s economy is now focused on Asia (China
and India).
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Copyright © 2011 Compass International, Inc.
Type of Government: Democratic Republic
Capital: Canberra 360,000
Major Cities: Sydney, Melbourne, Brisbane,
Adelaide, Perth
Population: 21.25 million
Area: 7,682,300 sq km
GDP: $865 billion
GDP per Head: $39,600
Inflation Rate: 3.0% - 4.5%
Time: + 15 EST
VAT / Sale Tax: 10%
Exchange Rate: 1.12 A$
Freight from USA: 8.5 – 10.5 / 28 days
Local freight: 2% - 3% of material / equipment
purchase price
Government website: http://www.australia.gov.au
Import duties: Refer to website mentioned above
under General Notes and www.customs.gov.au
Electricity: 240 v – 50 Hz
Telephone code: 61
Professional Architect / Engineer / Accountant /
Purchasing Agent etc: $75 - $125
Skilled Worker rate: $35 - $39
Unskilled worker rate: $30 - $32
Worker Productivity vs. USA Gulf Coast
(Houston = 1.00): 1.05 – 1.50
Location Factor vs. USA Gulf Coast
(Houston = 1.00):1.01
Local Bulk Material Factor vs. USA Gulf Coast
(Houston = 1.00): 1.05
Major Sea Ports: Melbourne, Sydney, Fremantle
AUSTRIA
Austria is located in the center of Europe; it is landlocked and shares a border with Germany, Switzerland, The Czech Republic and other Slavic nations
in the east: Austria has high rugged mountains and
forests. It has an extremely skilled and productive
labor force.
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Type of Government: Federal Republic
Capital: Wien / Vienna 1,900,000
Major Cities: Salzburg, Graz, Linz, Innsbruck
Population: 8.80 million
Area: 85,000 sq km
GDP: $360 billion
GDP per Head: $39,600
Inflation Rate: 1.5% - 2.5%
Time:+ 6 EST
VAT / Sale Tax: 20%
Exchange Rate: 0.78 Euros
Freight from USA: 7.5 – 9.5 / 30 days
Local freight: 2% - 3% of material / equipment
purchase price
Government website: http://www.bka.gv.at
Import duties: Refer to website mentioned above
under General Notes and www.bmf.gv.at/
Electricity: 230 v – 50 Hz
Telephone code: 43
Professional Architect / Engineer / Accountant /
Purchasing Agent etc: $80 - $110
Skilled Worker rate: $35 - $45
Unskilled worker rate: $22 - $30
Worker Productivity vs. USA Gulf Coast
(Houston = 1.00): 1.10 – 1.15
Location Factor vs. USA Gulf Coast
(Houston = 1.00): 1.04 - 1.08
Local Bulk Material Factor vs. USA Gulf Coast
(Houston = 1.00): 1.05
Major Sea Ports: Austria is landlocked most goods
are shipped via Germany and Italy.
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SECTION 7 | 181.
180. | SECTION 7
MADAGASCAR
Located off the East African coast. Madagascar is
the world’s fourth largest island. Madagascar was a
former French colony that received its independence
in the early 1960’s. Madagascar economy is based
on agriculture products, minerals, logging, fishing
and tourism.
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Type of Government: Antananarivo
Capital: Antananarivo 890,000
Major Cities: Toamasina, Toilara, Flanaratsoa
Population: 19.80 million
Area: 587,050 sq km
GDP: $6.40 billion
GDP per Head: $980
Inflation Rate: 7.5% - 10%
Time: + 8 EST
VAT / Sale Tax: 18%
Exchange Rate: 2,185 Ariay
Freight from USA: 8.5 – 11.5 / 37 days
Local freight: 2% - 3% of material / equipment
purchase price
Government website: www.madagascar.gov.mg
www.assemblee-nationale.mg/mg/accueil.php
Import duties: Refer to website mentioned above
under General Notes, note 15
Electricity: 220 v – 50 Hz
Telephone code:261
Professional Architect / Engineer / Accountant /
Purchasing Agent etc: $7 - $17
Skilled Worker rate: $3 - $6
Unskilled worker rate: $2 - $3
Worker Productivity vs. USA Gulf Coast
(Houston = 1.00): 1.85 – 2.70
Location Factor vs. USA Gulf Coast
(Houston = 1.00): 0.88 - 0.95
Local Bulk Material Factor vs. USA Gulf Coast
(Houston = 1.00): 0.80 – 0.90
Major Sea Ports: Toamasina, Toilara
Copyright © 2011 Compass International, Inc.
MALAWI
Located in Southern / Central Africa, lying to the
east of Zambia and to the west of Tanzania. Malawi
was an ex-British colony formally called Nyasaland,
it became independent in 1964. Malawi’s economy
is based on agriculture and minerals / ore mining.
Malawi has a serious problem with AID’s / HIV.
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Type of Government: Republic
Capital: Lilongwe 425,000
Major Cities: Blantyre, Chipoka, Zomba
Population: 13.8 million
Area: 119,000 sq km
GDP: $3.7 billion
GDP per Head: $770
Inflation Rate: 7.5% - 10%
Time: + 7 EST
VAT / Sale Tax: 16.5%
Exchange Rate: 150.77 Kwacha
Freight from USA: 8.5 – 11.5 / 38 days
Local freight: 2% - 3% of material / equipment
purchase price
Government website: http://www.malawi.gov.mw
Import duties: Refer to website mentioned above
under General Notes, note 15
Electricity: 230 v – 50 Hz
Telephone code: 265
Professional Architect / Engineer / Accountant /
Purchasing Agent etc: $7 - $20
Skilled Worker rate: $3 - $6.50
Unskilled worker rate: $2 - $4
Worker Productivity vs. USA Gulf Coast
(Houston = 1.00): 1.95 – 2.65
Location Factor vs. USA Gulf Coast
(Houston = 1.00): 0.89 - 0.94
Local Bulk Material Factor vs. USA Gulf Coast
(Houston = 1.00): 0.80 – 0.90
Major Sea Ports: Malawi is landlocked; all goods are
transported through Mozambique and Tanzania.
Copyright © 2011 Compass International, Inc.
SECTION 8
Glossary of International
Procurement Terms
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• A.A.C.E.: American Association of Cost Engineers
• A.C.E.C.: American Consulting Engineering
Council
• Af.D.B.: The African Development Bank
• A.I.A.: American Institute of Architects
• A.N.S.I.: American National Standards Institute
• A.S.E.A.N.: The Association of South East
Asian Nations
• Absolute ownership: The owner(s) possesses
all right, title, and interest in the said property or
article
• Acceptable quantity level: Acceptable percentage of damage or defects in a lot
• Acceptance: A document on which the debtor
indicates by the word “accepted” his or her intention
to pay the debt
• Acceptance sampling: Examination of goods
and / or work completed
• Acknowledgment: A standard form used by a
vendor or supplier to confirm that the material/equipment has been received.
• Act of God: Danger beyond human control;
any accident produced by an unstoppable physical
cause, such as storm, hurricane, flood, earthquake,
or lightning. In no ways is the event connected with
negligence.
• Actual cost: The real cost incurred by a vendor
or contractor in performing the work.
• Actual weight: The gross shipping or transport
weight of an item.
• Addendum: A document used to modify or
change bid documents prior to receipt of bids. An
addendum is incorporated into the formal contract
between the contracting parties.
• Ad valorem: The total value of goods, equip-
ment or materials against which tariff rates are
levied.
• Advance against documents: A loan made on
the security of the documents covering shipment of
materials.
• Advertisement for bids: A published announcement of an owner’s desire to award a contract
for construction work to a contractor who submits a
valid proposal in accordance with the owner’s Insurance to Bidders. In its usual form, the advertisement
is published in news media (e.g., newspaper, magazine, trade publication) in order to attract qualified
contractors who are willing to prepare and submit
proposals for the completion of the project.
• Advice of shipment: A notice sent to the purchaser from the seller advising that the shipment has
been completed; usually contains details of packing,
routing, and expected time of arrival.
• Agency: Denotes a relationship or association
between two parties in which one is empowered to
perform certain functions or business actions for the
other party.
• Agency relationship: The relationship or association between a principal and an agent in a transaction:
• Agent: An agent is authorized by the principal
to act on the behalf. An agent’s activities generally
obligate the principal as though the principal had
acted directly.
• Aggregated shipments: An undefined number
of shipments from different supply points to a single
buyer consolidated and considered as a single consignment.
• Agreed valuation: A shipment’s agreed upon
value, used to obtain a specific insurance rating /
premium.
Copyright © 2011 Compass International, Inc.