International Federation of Consulting Engineers

Collaboration in the Consulting Markets

Riga Conference, 24 May 2013

Enrico Vink, FIDIC MD

FIDIC Presentation

Founded in 1913

Headquarters in Geneva

Mission:Work closely with stakeholders to improve the business climate in which members operate and enable them to contribute to making the world a better place to live in, now and in the future

Vision: Enabling the development of a sustainable world, as the recognised global voice for the consulting engineering industry

Introduction to FIDIC

60,000 consulting firmsRepresenting 1.5 million CE professionals in 94 countries

Consulting Engineering Industry

• Consulting Engineering US$ 627 b

- Civil Engineering, Architecture & Engineering Services: 80% - Industrial Consultancy: 20%

• Supplied by CE Industry: 54%

• Industry staff : 1.5 million

• Consulting Firms: 60,000

• Construction Cost: US$ 6,300 b

Consulting Engineering Sector

Global characteristicsInternational market place for consulting engineering is becoming more competitive:

• export-led recovery in many countries has given rise to many new players seeking work

• firms are becoming more international and their workforces more multinational and mobile

• developing world is embracing knowledge intensive professional services by leveraging technology and offering low-cost solutions

Consulting Engineering Sector

Global characteristicsRole of Consulting Engineer becoming more critical:

• Life cycle costing strategy more common• Sustainability principles to apply to projects• Design assumptions require a new and more

comprehensive approach• Pending global shortage of skills

* Selection of Consultant critical

FIDIC Strategic Objectives

Be the authority on issues relating to Business Practice

Promote the development of a Global and viable consulting engineering industry

Represent globally the consulting engineering industry

Enhance the Image of consulting engineers

Support the development of Young Professionals

Promote Quality

Actively promote conformance to a code of Ethics and to Integrity

Promote commitment to Sustainable development

What FIDIC does

What FIDIC offers the industry

What are FIDIC’s governing principles

FIDIC Principles

Quality Services

Value for the clientCost efficiency Impartiality

Selection by Ability

Quality of proposals Skills and experience Fair remuneration

Sustainability

Long-term perspectiveRespect for the environmentProject-level focus

High StandardsPerformance Know howIntegrity

Best BracticeStandard contract documentsPolicies and guidelinesFair allocation of risks & responsibilities

Capacity BuildingInternational co-operationTraining and transfer of know-howManuals

FIDIC Activities

Annual Conferences

Provide a meeting place for clients,

contractors and consultants involved

in development

International Agencies

Keep the consulting engineering industry’s concerns on the agendaStrategic partnerships

LiaisonMaintain communication between

members, committees and other organisations

Publications

Establish best practice proceduresPublish contracts for the infrastructure industry

Training

Capacity building for the

consulting industry in both

developed and developing economies

www.FIDIC.orgDistribute updated information and services to members and society

Introduction to FIDIC

GAMA Group of Africa Member Associations

www.fidic.org.gama

ASPAC Asia-Pacific group

www.fidic.org.aspac

FEPAC Panamerican Federation of Consultants

www.fepac.org.br

EFCA European Federation of Engineering

Consultancy Associations

www.efcanet.org

Groups of Member Associations

Regional Federations

Introduction to FIDIC

EFCA 23 members

FEPAC 12 members

OTHER (Nth America, Gulf, Non EU Europe etc) 20 members

PROSPECTS 15 countries

GAMA 17 members

ASPAC 22 members

Membership Spread

Regional Cooperation

Procurement Dominates the FIDIC Agenda• MDBs & Bilateral Agencies• WTO GPA• Uncitral Model Procurement Law• EU Directives• National Country Systems

FIDIC Represents Global Best Practice• Supporting all Regional Groups, lobbying, resources etc• More national support & capacity building

Procurement & Business Practice - Policies

• Public Accountability?• Transparency?• Fitness for Purpose? • Economics & budgets?• Track record• On time delivery?• Qualifications?• CVs?

What Drives Procurement?

Procurement & Business Practice - Policies

What Should Drive Procurement?

• Value for money• Quality of solution• Environment• Millenium Development Goals• Capacity Building• Sustainability• Integrity

But, what is “QUALITY”?

Procurement & Business Practice

Quality Procurement

Procurement policies and practices seem back to front

Define clearly the desired outcomes (in human terms, not technical)

Determine how to achieve these outcomes

FIDIC’s PSM and SOW can assist

Best practice principles

Green procurementIntegritySustainabilitySocial accountabilityCapacity buildingPoverty Alleviation

Procurement & Business Practice - QBS

Quality Based Selection

Quality is paramount in the selection of consultants, and Quality Based Selection is the recommended method for procurement.The fees paid to a consultant are a small fraction of the total project life-cycle cost, and yet the consultant’s work is key to the project success.

Best practice principles

Purchasers are dictated by so-called “objective” criteria.They fear “subjective” assessments of the “softer” criteria.QBS allows a focus on the “softer” issues:- sustainability, integrity, training.

How can the industry assist?

Procurement & Business Practice - QBS

Life-Cycle Cost and Impact on Project Success

The procurement phase has the greatest impact on the life-cycle cost of the project, yet it is the least costly component.

Procurement & Business - FIDIC

Quality of Construction Informed PurchaserConsultant Selection Tendering Procedures Conflict of Interest Scope of Services DefinitionsReviewing the Work of Others Project DeliveryHIV-AIDS Consultants in Design-Build & PFIProvision of OMS ServicesProject Cost EstimatesQuality Management Risk ManagementProject Sustainability ManagementProfessional Liability InsuranceInsurance of Large ProjectsDispute Resolution

To be the Authority on Procurement and Business Practice

Procurement & Business Practice - Policies

The role of the consulting engineer in design-build

The role of the consulting engineer during the execution of a project

Selection, engagement and remuneration of consulting engineers

Projects in which consultants have a financial interest other than a normal fee

Transfer of technology

Consulting engineers and the environment

Guarantees, bonds and retentions

HIV-AIDS in the construction sector

Consulting engineers and the environment

The consulting engineer in turnkey projects

Professional risk and responsibility

Alternative dispute resolution

Quality management

Quality of Construction

Business Integrity

Policy Statements and Resources

Informed purchaser

Collateral warranties

Contingent legal fees

The expert witness

Limitation of liability

Transfer of technology

Conflict of Interest

Informed purchaser

Business Integrity

Site safety

Copyright

Procurement & Business Practice - Sustainability

Project SustainabilityManagement

Guide to the principles of sustainable projects using recognised indicators

State of the World

Tools to define priorities and make informed decisions on:- Economic factors- Social factors- Environmental factors- Comprehensive guide to

rating systems

Professional Services Agreements

FIDIC publishes model agreements for professionals services:

- Client/Consultant- Joint Venture- Sub-Consultant- Representative

Works Contracts – Rainbow Collection

FIDIC publishes internationally recognised forms of contract for infrastructure works.

More than 40,000 copies supplied each year

FIDIC Contracts - MDB Harmonised Construction Contract

Since May 2005Multilateral Development Banks use the FIDIC MDB

Harmonised

Construction Contract

Adopted by bilateral development agencies (Australia, France, Japan, Korea, …)MDB Supplement to Contracts Guide available

Procurement & Business Practice - Capacity Building

Business Practice Training Manual

- Training modules with resource kits- Applicable in developed and developing countries

International Training Programme

- Events co-organised with Member Associations- Based on Guide to Practice manuals

Accredited Trainer Development Programme

- Trainers available locally and international- International standards

Training Suppliers

- Recognised Training Centres: China, India, Jordan- Accredited Training Suppliers

Procurement & Business Practice - Training Modules

- The consulting industry- Organising a consulting firm- Administration of the firm’s activities- Business development- Human Resources Management- Financial Management- Client relationships and communications- Project execution- Risk Management- Quality Management- Business Integrity Management- Performance Management

Each module specifies:- Content- Resources- Case studies

Training Modules

Global Outlook and Trends - 1

Global Characteristics• population growth

• 7 billion today• 8 billion by 2040• more need for basic infrastructure

Global problems• warming/climate change• water scarcity & energy shortages• transport pressures• pressure of urbanisation

Emerging Regions & Hot Spots

Regions• Developing Countries and Emerging Economies• Significant opportunities in Africa, South America and Asia

Hot Spots• Energy, Mining, Water, Transport, (Urban Planning)• Most international projects with multiple players• Cross border activity increasing

Market Conclusion

In the current economic context Consulting Engineers can provide:

• Innovative solutions to global challenges, working closely with governments and multilateral institutions in defining new foundations for economic growth.

• Knowledge-based and technology-driven industry, playing a key role in making globalisation work for everyone.

• Share international best practices, and enhance collaboration in all regions

Market Conclusion

In the current economic context Consulting Engineers can:

• Standardise best practices;

• Differentiate skills and experience;

• Partner to influence debate on investment, procurement, sustainability and integrity;

• Speak out and tell their story

• Attend THE Major Event in 2013………

FIDIC World Consulting Engineering Conference

Quality of Life – Our Responsibility

International Federation of Consulting Engineers

President Geoff French, UK

President Elect Pablo Bueno, Spain

Secretariat FIDICWorld Trade Center 2Geneva AirportBox 311 CH-1215 Geneva 15 Switzerland Tel: +41 22 799 49 00Fax: +41 22 799 49 01

fidic@fidic.org www.fidic.org

Managing

Director Enrico Vink