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4th Day Basic PPT

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Veluppillai Mohan

The document discusses bid evaluation objectives and process. It aims to identify: 1. The stages of bid evaluation including preliminary examination, detailed evaluation, and post-qualification to determine the lowest evaluated substantially responsive qualified bid. 2. The evaluation criteria used such as lowest quoted bid, lowest evaluated bid, and factors considered like price, delivery period, and life cycle costs. 3. The objectives of bid evaluation are to select the bid that results in the lowest actual expenditures for the employer while ensuring quality, compliance with requirements, and qualifications of the bidder.

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Bid EvaluationBid EvaluationEng. V.Mohan./ Project Director- CENTRAL EXPRESSWAY PROJECT-II, M.Sc(PPM, Turin, Italy), Dip.In Com.Com. Arb (ICLP),DIPPCA (SL), FCIHT(Lond), FIE(SL), B.Sc(Eng),MIE (SL) ROAD DEVELOPMENT AUTHORITY 3rd Floor, "Sethsiripaya ", Battaramulla, CO 10120, Sri Lanka,  Office :-+94112877708 - Extension -126 Mobile: +94-77 316 8726, +94 71 843 3070 Home ;+94112322070 Fax No.+94112877708 Email: nsvmohan@gmail.com 
Learning ObjectivesLearning Objectives 1.1. Understanding the objectives of the BidUnderstanding the objectives of the Bid EvaluationEvaluation 2.2. Identifying the Evaluation CriteriaIdentifying the Evaluation Criteria 3.3. Identifying the stages Of the BidIdentifying the stages Of the Bid EvaluationEvaluation 4.4. Identifying the Bid Evaluation FactorsIdentifying the Bid Evaluation Factors 5.5. Bid Evaluation ProcessBid Evaluation Process
Bid Evaluation Covers ;Bid Evaluation Covers ;  WorksWorks  GoodsGoods  Services other than Consultancy ServicesServices other than Consultancy Services
ObjectiveObjective  The Evaluated price should deflect theThe Evaluated price should deflect the comparison of actual expenditures to becomparison of actual expenditures to be incurred by Employerincurred by Employer
1.Understanding the Objectives1.Understanding the Objectives of the Bid Evaluationof the Bid Evaluation
Monday, November 30, 2015Monday, November 30, 2015 66 1.2 Objectives 1.2.1 The Procurement process should ensure: (a) maximizing economy, timeliness and quality in Procurement resulting in least cost together with the high quality; Procuring The Right  Quantity The Right Quality @ Right  Time By Right People Using Right Method from Right Person
2.Identifying Bid Evaluation2.Identifying Bid Evaluation CriteriaCriteria • Lowest Quoted BidLowest Quoted Bid • Lowest Evaluated BidLowest Evaluated Bid • Lowest Evaluated Responsive BidLowest Evaluated Responsive Bid • Lowest Evaluated Responsive and QualifiedLowest Evaluated Responsive and Qualified BidBid
3. Identifying Stages of Bid3. Identifying Stages of Bid EvaluationEvaluation  Bid OpeningBid Opening  Preliminary ExaminationPreliminary Examination  Detailed EvaluationDetailed Evaluation  Post-QualificationPost-Qualification  Award RecommendationAward Recommendation
4.Identifying Bid Evaluation4.Identifying Bid Evaluation FactorsFactors • Bid PriceBid Price • Delivery PeriodDelivery Period • Cost Of Spare Parts and afterCost Of Spare Parts and after sales servicessales services • Cost of MaintenanceCost of Maintenance • Operating CostOperating Cost
BID EVALUATIONBID EVALUATION PROCESSPROCESS
Monday, November 30, 2015Monday, November 30, 2015 1111 Evaluation Criteria 5.3.19 (a) The bidding documents shall also specify the relevant factors, in addition to price, to be considered in bid evaluation and the manner in which they will be applied for the purpose of determining the lowest evaluated bid. (b) Post qualification criteria should also be clearly stated in the Bidding documents.
What is the objectiveWhat is the objective of bid evaluation?of bid evaluation?
““Lowest Evaluated SubstantiallyLowest Evaluated Substantially Responsive qualified Bid”,Responsive qualified Bid”, TheObjectiveof Bid Evaluation is to determinethe among thebidssubmitted before thebid closing timeon thedate specified in thebidding documents.
Bid Validity PeriodBid Validity Period During Bid Validity PeriodDuring Bid Validity Period •Bids have to be evaluatedBids have to be evaluated •Clarifications Have to obtained fromClarifications Have to obtained from BiddersBidders •Approvals obtained from requiredApprovals obtained from required authoritiesauthorities •Award of ContractAward of Contract Therefore Bid Evaluation shall beTherefore Bid Evaluation shall be completed leaving enough time for othercompleted leaving enough time for other activitiesactivities
Four Stages of Bid EvaluationFour Stages of Bid Evaluation 1.1. Preliminary Examination of BidsPreliminary Examination of Bids ( Including determination of responsiveness)( Including determination of responsiveness) Object is to exclude ineligible, non-responsivenessObject is to exclude ineligible, non-responsiveness and incomplete bids from detailed Examination.and incomplete bids from detailed Examination. 2.2. Detailed Bid Evaluation andDetailed Bid Evaluation and comparison of bids.comparison of bids. objective is to determine the lowest evaluated bid fromobjective is to determine the lowest evaluated bid from the substantial responsiveness bidthe substantial responsiveness bid 3.3. Post Qualification.Post Qualification. Object is to verify the qualification and experience of theObject is to verify the qualification and experience of the lowest evaluated bidderlowest evaluated bidder 4.4. Bid Evaluation ReportBid Evaluation Report.. 1.1.
1.1. PreliminaryPreliminary Examination of Bids.Examination of Bids.  Determination of SubstantialDetermination of Substantial Responsiveness of TendersResponsiveness of Tenders  The purpose is to select bids whichThe purpose is to select bids which meets the minimum standards, spelledmeets the minimum standards, spelled out in the bidding docsout in the bidding docs  It saves us from taking all the bidsIt saves us from taking all the bids through the complicated and timethrough the complicated and time consuming detail evaluation processconsuming detail evaluation process  Reasonable judgment has to be appliedReasonable judgment has to be applied to avoid the risk of rejecting bids onto avoid the risk of rejecting bids on
Preliminary Examination A substantially responsive Bid is one:  which conforms to all the terms, conditions, and specifications of the bidding documents, without material deviation or reservation.    If a Bid is not substantially responsive:  it will be rejected by the Employer, and may not subsequently be made responsive by correction or withdrawal of the nonconforming deviation or reservation.   
The purpose of this examination is to eliminate any bid from further and more complicated consideration if it does not meet the minimum standards of acceptability as set out in the bidding documents and therefore not substantially responsive.
Preliminary Examination  is Prior to the detailed evaluation of Bids, Employer will determine whether each Bid:  1.meets the eligibility criteria defined in the Bidding document;  2.has been properly signed; 3.is accompanied by the required securities; and 4.is substantially responsive to the requirements of the bidding documents. 
COLLECTION OFTENDERCOLLECTION OFTENDER INFORMATIONINFORMATION  1. Collect the Basic Data1. Collect the Basic Data  2. Record of TenderOpening2. Record of TenderOpening  3. Preliminary Examination for3. Preliminary Examination for Complete of Tenders.Complete of Tenders.
DETERMINATION OFDETERMINATION OF SUBSTANTIAL RESPONSIVENESS OFSUBSTANTIAL RESPONSIVENESS OF TENDERSTENDERS There are foursteps in determining the substantialThere are foursteps in determining the substantial responsiveness of tenders. These are:responsiveness of tenders. These are: 1.1. Preparation of Table of Tenderers and TenderPrices.Preparation of Table of Tenderers and TenderPrices. 2.2. Substantial Responsiveness to Commercial TermsSubstantial Responsiveness to Commercial Terms and Conditions.and Conditions. 3.3. Substantial Responsiveness to TechnicalSubstantial Responsiveness to Technical Requirements.Requirements. 4.4. Preparation of Table of Substantive ResponsivenessPreparation of Table of Substantive Responsiveness of Tendersof Tenders
Stage -1 To ascertain whether the: The bidder is eligible Bid is signed  Bid security  Bid is containing all required critical documents. bid is complete and quote for all items
1.Eligibility 1.Eligibility   Black ListedBlack Listed  ICTAD grading for Local Contracts ICTAD grading for Local Contracts   Member Country Member Country  2.2. Authority to SignAuthority to Sign The bids shall be signed by the person authorized to The bids shall be signed by the person authorized to  do so.do so.   3.Purpose of Bid Security 3.Purpose of Bid Security  Bidder will not withdraw /modify his bids during the Bidder will not withdraw /modify his bids during the  validity period validity period  Bidder will agree to do changes in the price due to Bidder will agree to do changes in the price due to  arithmetical correction arithmetical correction  The bidder will not refuse to sign contract when to do The bidder will not refuse to sign contract when to do 
Stage IIStage II Ascertaining the DeviationAscertaining the Deviation MinorMinor Major Major  Debatable Debatable 
What is Deviation ?What is Deviation ?  It is very difficult to find a bid which isIt is very difficult to find a bid which is complying with the requirements of thecomplying with the requirements of the bidding in every respect.bidding in every respect.  Deviation from any provisions of the biddingDeviation from any provisions of the bidding documents is a common feature in many Bids.documents is a common feature in many Bids.  So we should identify and classify them asSo we should identify and classify them as Minor or majorMinor or major  some are difficult to put into one of the abovesome are difficult to put into one of the above classification and categorized as Debatableclassification and categorized as Debatable and with deeper analysis they are categorizedand with deeper analysis they are categorized as Minor or Major.as Minor or Major.
Major Deviations     The bid in a result of finding of “non responsiveness” and consequent rejection is called as Major or Material Deviation.  The Major Deviation would be one which either, (a). Has an effect on the validity of the bids: or (b) Has been specified in the bidding documents as grounds for rejection of the bid: or (c) Has an effect in substantial way to the scope, quality, functionality or performance; or (d) Will limit in any substantial way the PE’s rights or bidders obligations: or (e) Is a deviation from the terms or the technical specifications in the bidding Document whose effect on the bid price is substantial but cannot be given a Monetary value.
Material Deviation  A material deviation or reservation is one:  which limits in any substantial way the scope, quality, or performance of the Works;  which limits in any substantial way, inconsistent with bidding documents, the Employer's rights or the bidder's obligations under the Contract;  whose rectification would affect unfairly the competitive position of other bidders presenting substantially responsive bids;  a Bid which proposes and alternative;
Minor deviation • The sum of the bid price and the total of adjustments made for deviations and other evaluation factors specified in the bidding documents is the “evaluated bid price”. • considered as “substantially responsive” and are, therefore, evaluated and considered for contract award by determining any financial value of each deviation and adding to the bid price.
Minor deviationMinor deviation would be one which either a. Has no effect on the validity of the bid; or b. Has no effect in substantial way to the scope, quality, functionality or performance; or c. Will not limit in any substantial way the PE’s rights or bidders obligations: or d. Has such effect but the difference from the commercial terms or technical Specifications in the bidding documents is such that it can be given a monetary Value; or e. Has not been specified in the bidding documents as grounds for rejection of the bid, provided that the total amount of adjustments for such deviations does not exceed a previously determined percentage of the bid price.
Debatable DeviationsDebatable Deviations  Requesting different amount of advanceRequesting different amount of advance and other payment termsand other payment terms (including(including liquidated damages and retention):liquidated damages and retention):  Late RecoveryLate Recovery  Recovery up to last BillRecovery up to last Bill  RetentionRetention  Liquidated DamagesLiquidated Damages  Proposed changes in construction periodProposed changes in construction period which is not criticalwhich is not critical::  Omissions of minor works or itemsOmissions of minor works or items included in the scope of workincluded in the scope of work
Completeness of bids: Procedural Deviations in submission of bids.  Bid Security. Lack of supporting Documents: Fixed price against variable price Technical Specifications: Subcontracting :Alternative bids: Conditional bids Alternative Bids Time of Completion Debatable Deviations Ways of treating most frequent deviations:
Most Frequent DeviationsMost Frequent Deviations Conflicting ClausesConflicting Clauses Some items are not pricedSome items are not priced Marking of envelopsMarking of envelops Lesser periods /Lesser amountsLesser periods /Lesser amounts Lack of supporting documentsLack of supporting documents Conditional BidsConditional Bids AlternativebidsAlternativebids 
Stage 2Stage 2  DETAILEDEVALUATION OF TENDER 1.Technical Analysis; 2.Commercial Analysis; and 3.Financial Analysis.
Objectives To determine the cost that PEwill incurif the contract is awarded to each of the bid which was determined as a substantial responsive bid . This stage, bids are compared with each other forthe purpose of comparison and to determine the lowest evaluated cost that will be incurred by the PEfrom the substantially responsive bids received.
It is again emphasized that PEshould only use the evaluation criteria disclosed in the bidding document. Most frequently used evaluation criteria is given below. The PEmay use other appropriate criteria fora particularprocurement and disclosed such factors togetherwith the evaluation methodology in the bidding document: Principles and Methodologies
Detailed Bid Evaluation – Principles and Methodologies ThePE may used other appropriatecriteriafor aparticular procurement and disclosed such factor together with theevaluation methodology in thebidding document  ExcludeVAT, contingenciesand provisional sum amounts  Correction of arithmetical errors  Application of applicablediscount  Adjustmentsfor acceptabledepartures  Adjustmentsfor delivery period  Adjustmentsto bid pricesfor omissions  Adjustmentsfor inland transportation  AlternateBids  Conversion to common currency  Domestic preference  Reassessranking order  Examinefor unbalancebidding  After salesservice  Clarificationsduring evaluation  Operational costs and life cycle costing
Clarifications during evaluation:Clarifications during evaluation:  if the Bid is any doubt about the intent ofif the Bid is any doubt about the intent of the bidder. Modifications of thethe bidder. Modifications of the substances of the bid by a bidder are,substances of the bid by a bidder are,  however, not allowed. Any change inhowever, not allowed. Any change in price, delivery terms, conditions ofprice, delivery terms, conditions of contract or change of specificationscontract or change of specifications proposed by the bidder is considered asproposed by the bidder is considered as substantive.substantive.  modifications. The PE should not changemodifications. The PE should not change any of the commercial terms or technicalany of the commercial terms or technical specifications as a result of clarifications.specifications as a result of clarifications.
DETAILED EVALUATIONDETAILED EVALUATION Check for arithmetical errors & correctErrors will be corrected by the Employer as follows: (a) where there is a discrepancy between the amounts in figures and in words, the amount in words will govern; (b) where there is a discrepancy between unit rate and line item total, resulting from multiplying unit rate by quantity, unit rate as quoted will govern.
(c) unless this sub-clause is modified in Bidding Data and if the bid price decreases by the above procedure, the amount stated in the Form of Bid shall be adjusted with the concurrence of the bidder and shall be considered as binding upon the bidder;
(d) where there is a discrepancy between unit rate and line item total, resulting from multiplying unit rate by quantity, unit rate as quoted will govern, unless there is an obviously gross misplacement of decimal point in unit rate, in which case line item total as quoted will govern, and unit rate will be corrected; 
Check for omissions Apply discounts if any Convert to common currency Responsive to commercial & technical conditions assess monetary implications of acceptable deviations and other matters Apply domestic preference if applicable Reassess the ranking order of bids
Summary of Evaluation ProcessSummary of Evaluation Process 1.1. PlanningPlanning 2.2. Scrutiny of BidsScrutiny of Bids 3.3. AssessmentAssessment 4.4. EvaluationEvaluation  Life –Cycle CostingLife –Cycle Costing  Matrix AnalysisMatrix Analysis  SelectionSelection  Negotiation IssuesNegotiation Issues
Commercial Analysis of Substantial Responsiveness of Tenders. Technical Analysis of Substantial Responsiveness of Tenders. Financial Analysis of Substantial Responsiveness of Tenders. Detailed Evaluation of Substantially Responsive Tenders
 COMMERCIALANALYSISCOMMERCIALANALYSIS The Table forCommercial Terms should list all theThe Table forCommercial Terms should list all the important commercial conditions specified in theimportant commercial conditions specified in the tendering documents such as:tendering documents such as: • The tendersecurity amount and validity period; • Terms of payment; • Liquidated damages etc.; and • Any deviations from requirements of the tendering documents. Further, it should be stated whethera financial adjustment to the tenderis considered necessary as a consequence of any minordeviation
TECHNICALANALYSISTECHNICALANALYSIS The Table of Technical Requirements should set out:The Table of Technical Requirements should set out:  The scope of supply,  Delivery orwork schedule,  The important technical specifications of all majoritems of equipment and material (e.g., plant rating, capacity, speed, voltage and pressure, operating temperature, etc.),  The performance characteristics (e.g., plant efficiency, fuel consumption, losses, etc.), and  Warranty period.
FINANCIALANAYLSISFINANCIALANAYLSIS Financial Adjustment of TenderPrices (Commercial Aspects). • Tenderprice comparison is usually the final and most critical step in the tenderevaluation process. To do this properly, a clearunderstanding of the basic principles forcomparison is vital: • The tenderprices should be adjusted forthe purpose of tendercomparison forthose deviations which are permissible and which can be “translated” fairly into monetary values.
 FINANCIALADJUSTMENTS OFTENDERFINANCIALADJUSTMENTS OFTENDER PRICES (COMMERCIALASPECTS)PRICES (COMMERCIALASPECTS)  Adjustments foracceptable departuresAdjustments foracceptable departures  Adjustment forDeviation from the TermsAdjustment forDeviation from the Terms of Payment.of Payment.  Adjustment forDeviation from theAdjustment forDeviation from the Delivery Schedule orCompletion:Delivery Schedule orCompletion:  Adjustments forDeviation fromAdjustments forDeviation from provisions forpayment of Duties andprovisions forpayment of Duties and taxes (in Civil Works contract)taxes (in Civil Works contract)
•FINANCIALADJUSTMENTS OFTENDERPRICES (TECHNICALASPECTS)  Adjustment forCompleteness in Scope of Supply  Adjustment forTechnical Compliance  Adjustment forSpecified Technical Evaluation Factors  Adjustment forSpare Parts  Aftersales Services  Maximum Amount of Adjustment fordeviation  Adjustment forCost of Inland Transportation to the Project Site –INCOTERMS
Financial AdjustmentsFinancial Adjustments Domestic PreferenceDomestic Preference ( if applicable)( if applicable)
Objectives To determine the cost that PE will incur if the contract is awarded to each of the bid which was determined as a substantial responsive bid . This stage, bids are compared with each other for the purpose of comparison and to determine the lowest evaluated cost that will be incurred by the PE from the substantially responsive bids received.
It is again emphasized that PE should only use the evaluation criteria disclosed in the bidding document. Most frequently used evaluation criteria is given below. The PE may use other appropriate criteria for a particular procurement and disclosed such factors together with the evaluation methodology in the bidding document: Principles and Methodologies
Principles and MethodologiesPrinciples and Methodologies  Exclude VAT, contingencies andExclude VAT, contingencies and provisional sum amountsprovisional sum amounts  Correction of arithmetical errorsCorrection of arithmetical errors  Application of discountApplication of discount  Adjustment for omissionsAdjustment for omissions  Adjustments for acceptable departuresAdjustments for acceptable departures  Conversion to common currencyConversion to common currency  Domestic preference;Domestic preference;  Examination for unbalanced bidding;Examination for unbalanced bidding;  Comparison with engineers estimateComparison with engineers estimate  Rejection of all bidsRejection of all bids  Clarifications during evaluationClarifications during evaluation  Alternate Bids.Alternate Bids.
3. Post3. Post qualificationqualification
Post qualificationPost qualification  Post qualification is suitable for use in thePost qualification is suitable for use in the procurement of works contracts, whichprocurement of works contracts, which are not complicated where pre-are not complicated where pre- qualification does not offer muchqualification does not offer much advantage.advantage.  Post -qualification is a distinct step in bidPost -qualification is a distinct step in bid evaluation.evaluation.
Post qualificationPost qualification  Post –qualification determines that bidder, whoPost –qualification determines that bidder, who has submitted the lowest substantiallyhas submitted the lowest substantially responsive bid, has the capability and theresponsive bid, has the capability and the capacity to perform the job.capacity to perform the job.  If the bidder has not demonstrated his capacityIf the bidder has not demonstrated his capacity and capability he is rejected and next bidder isand capability he is rejected and next bidder is considered.considered.
Post -qualificationPost -qualification  Post –qualification criteria shall be clearly spelled out in the bidding documents  Relevant forms & questionnaires shall be included in the bidding documents to extract data in a uniform mater.  The PE can use the data it gathered in addition to the data submitted by the bidder
Post –qualification CriteriaPost –qualification Criteria 1.1. Average AnnualAverage Annual Construction turn-overConstruction turn-over 2.2. Availability of liquid assetsAvailability of liquid assets supplemented by projectsupplemented by project specific lines of Creditspecific lines of Credit 3.3. Experience in similarExperience in similar projectsprojects 4.4. Necessary Equipment.Necessary Equipment. 5.5. PersonnelPersonnel 6.6. Production rates of key itemsProduction rates of key items
4. Bid Evaluation4. Bid Evaluation ReportReport
Bid Evaluation ReportBid Evaluation Report  After the completion of the evaluationAfter the completion of the evaluation process the PE should prepare a bidprocess the PE should prepare a bid evaluation report setting out process ofevaluation report setting out process of evaluation. The PE shall use standardevaluation. The PE shall use standard forms available for the purpose.forms available for the purpose.  In addition the evaluation report shouldIn addition the evaluation report should include narrative section in which anyinclude narrative section in which any Information not suitable for presentationInformation not suitable for presentation in the form of tables, together with anyin the form of tables, together with any Supplementary information necessary forSupplementary information necessary for a complete understanding of all thea complete understanding of all the factors considered during bid evaluation.factors considered during bid evaluation.
Thank youThank you

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4th Day Basic PPT

  • 1. Bid EvaluationBid EvaluationEng. V.Mohan./ Project Director- CENTRAL EXPRESSWAY PROJECT-II, M.Sc(PPM, Turin, Italy), Dip.In Com.Com. Arb (ICLP),DIPPCA (SL), FCIHT(Lond), FIE(SL), B.Sc(Eng),MIE (SL) ROAD DEVELOPMENT AUTHORITY 3rd Floor, "Sethsiripaya ", Battaramulla, CO 10120, Sri Lanka,  Office :-+94112877708 - Extension -126 Mobile: +94-77 316 8726, +94 71 843 3070 Home ;+94112322070 Fax No.+94112877708 Email: nsvmohan@gmail.com 
  • 2. Learning ObjectivesLearning Objectives 1.1. Understanding the objectives of the BidUnderstanding the objectives of the Bid EvaluationEvaluation 2.2. Identifying the Evaluation CriteriaIdentifying the Evaluation Criteria 3.3. Identifying the stages Of the BidIdentifying the stages Of the Bid EvaluationEvaluation 4.4. Identifying the Bid Evaluation FactorsIdentifying the Bid Evaluation Factors 5.5. Bid Evaluation ProcessBid Evaluation Process
  • 3. Bid Evaluation Covers ;Bid Evaluation Covers ;  WorksWorks  GoodsGoods  Services other than Consultancy ServicesServices other than Consultancy Services
  • 4. ObjectiveObjective  The Evaluated price should deflect theThe Evaluated price should deflect the comparison of actual expenditures to becomparison of actual expenditures to be incurred by Employerincurred by Employer
  • 5. 1.Understanding the Objectives1.Understanding the Objectives of the Bid Evaluationof the Bid Evaluation
  • 6. Monday, November 30, 2015Monday, November 30, 2015 66 1.2 Objectives 1.2.1 The Procurement process should ensure: (a) maximizing economy, timeliness and quality in Procurement resulting in least cost together with the high quality; Procuring The Right  Quantity The Right Quality @ Right  Time By Right People Using Right Method from Right Person
  • 7. 2.Identifying Bid Evaluation2.Identifying Bid Evaluation CriteriaCriteria • Lowest Quoted BidLowest Quoted Bid • Lowest Evaluated BidLowest Evaluated Bid • Lowest Evaluated Responsive BidLowest Evaluated Responsive Bid • Lowest Evaluated Responsive and QualifiedLowest Evaluated Responsive and Qualified BidBid
  • 8. 3. Identifying Stages of Bid3. Identifying Stages of Bid EvaluationEvaluation  Bid OpeningBid Opening  Preliminary ExaminationPreliminary Examination  Detailed EvaluationDetailed Evaluation  Post-QualificationPost-Qualification  Award RecommendationAward Recommendation
  • 9. 4.Identifying Bid Evaluation4.Identifying Bid Evaluation FactorsFactors • Bid PriceBid Price • Delivery PeriodDelivery Period • Cost Of Spare Parts and afterCost Of Spare Parts and after sales servicessales services • Cost of MaintenanceCost of Maintenance • Operating CostOperating Cost
  • 11. Monday, November 30, 2015Monday, November 30, 2015 1111 Evaluation Criteria 5.3.19 (a) The bidding documents shall also specify the relevant factors, in addition to price, to be considered in bid evaluation and the manner in which they will be applied for the purpose of determining the lowest evaluated bid. (b) Post qualification criteria should also be clearly stated in the Bidding documents.
  • 12. What is the objectiveWhat is the objective of bid evaluation?of bid evaluation?
  • 13. ““Lowest Evaluated SubstantiallyLowest Evaluated Substantially Responsive qualified Bid”,Responsive qualified Bid”, TheObjectiveof Bid Evaluation is to determinethe among thebidssubmitted before thebid closing timeon thedate specified in thebidding documents.
  • 14. Bid Validity PeriodBid Validity Period During Bid Validity PeriodDuring Bid Validity Period •Bids have to be evaluatedBids have to be evaluated •Clarifications Have to obtained fromClarifications Have to obtained from BiddersBidders •Approvals obtained from requiredApprovals obtained from required authoritiesauthorities •Award of ContractAward of Contract Therefore Bid Evaluation shall beTherefore Bid Evaluation shall be completed leaving enough time for othercompleted leaving enough time for other activitiesactivities
  • 15. Four Stages of Bid EvaluationFour Stages of Bid Evaluation 1.1. Preliminary Examination of BidsPreliminary Examination of Bids ( Including determination of responsiveness)( Including determination of responsiveness) Object is to exclude ineligible, non-responsivenessObject is to exclude ineligible, non-responsiveness and incomplete bids from detailed Examination.and incomplete bids from detailed Examination. 2.2. Detailed Bid Evaluation andDetailed Bid Evaluation and comparison of bids.comparison of bids. objective is to determine the lowest evaluated bid fromobjective is to determine the lowest evaluated bid from the substantial responsiveness bidthe substantial responsiveness bid 3.3. Post Qualification.Post Qualification. Object is to verify the qualification and experience of theObject is to verify the qualification and experience of the lowest evaluated bidderlowest evaluated bidder 4.4. Bid Evaluation ReportBid Evaluation Report.. 1.1.
  • 16. 1.1. PreliminaryPreliminary Examination of Bids.Examination of Bids.  Determination of SubstantialDetermination of Substantial Responsiveness of TendersResponsiveness of Tenders  The purpose is to select bids whichThe purpose is to select bids which meets the minimum standards, spelledmeets the minimum standards, spelled out in the bidding docsout in the bidding docs  It saves us from taking all the bidsIt saves us from taking all the bids through the complicated and timethrough the complicated and time consuming detail evaluation processconsuming detail evaluation process  Reasonable judgment has to be appliedReasonable judgment has to be applied to avoid the risk of rejecting bids onto avoid the risk of rejecting bids on
  • 17. Preliminary Examination A substantially responsive Bid is one:  which conforms to all the terms, conditions, and specifications of the bidding documents, without material deviation or reservation.    If a Bid is not substantially responsive:  it will be rejected by the Employer, and may not subsequently be made responsive by correction or withdrawal of the nonconforming deviation or reservation.   
  • 18. The purpose of this examination is to eliminate any bid from further and more complicated consideration if it does not meet the minimum standards of acceptability as set out in the bidding documents and therefore not substantially responsive.
  • 19. Preliminary Examination  is Prior to the detailed evaluation of Bids, Employer will determine whether each Bid:  1.meets the eligibility criteria defined in the Bidding document;  2.has been properly signed; 3.is accompanied by the required securities; and 4.is substantially responsive to the requirements of the bidding documents. 
  • 20. COLLECTION OFTENDERCOLLECTION OFTENDER INFORMATIONINFORMATION  1. Collect the Basic Data1. Collect the Basic Data  2. Record of TenderOpening2. Record of TenderOpening  3. Preliminary Examination for3. Preliminary Examination for Complete of Tenders.Complete of Tenders.
  • 21. DETERMINATION OFDETERMINATION OF SUBSTANTIAL RESPONSIVENESS OFSUBSTANTIAL RESPONSIVENESS OF TENDERSTENDERS There are foursteps in determining the substantialThere are foursteps in determining the substantial responsiveness of tenders. These are:responsiveness of tenders. These are: 1.1. Preparation of Table of Tenderers and TenderPrices.Preparation of Table of Tenderers and TenderPrices. 2.2. Substantial Responsiveness to Commercial TermsSubstantial Responsiveness to Commercial Terms and Conditions.and Conditions. 3.3. Substantial Responsiveness to TechnicalSubstantial Responsiveness to Technical Requirements.Requirements. 4.4. Preparation of Table of Substantive ResponsivenessPreparation of Table of Substantive Responsiveness of Tendersof Tenders
  • 22. Stage -1 To ascertain whether the: The bidder is eligible Bid is signed  Bid security  Bid is containing all required critical documents. bid is complete and quote for all items
  • 23. 1.Eligibility 1.Eligibility   Black ListedBlack Listed  ICTAD grading for Local Contracts ICTAD grading for Local Contracts   Member Country Member Country  2.2. Authority to SignAuthority to Sign The bids shall be signed by the person authorized to The bids shall be signed by the person authorized to  do so.do so.   3.Purpose of Bid Security 3.Purpose of Bid Security  Bidder will not withdraw /modify his bids during the Bidder will not withdraw /modify his bids during the  validity period validity period  Bidder will agree to do changes in the price due to Bidder will agree to do changes in the price due to  arithmetical correction arithmetical correction  The bidder will not refuse to sign contract when to do The bidder will not refuse to sign contract when to do 
  • 25. What is Deviation ?What is Deviation ?  It is very difficult to find a bid which isIt is very difficult to find a bid which is complying with the requirements of thecomplying with the requirements of the bidding in every respect.bidding in every respect.  Deviation from any provisions of the biddingDeviation from any provisions of the bidding documents is a common feature in many Bids.documents is a common feature in many Bids.  So we should identify and classify them asSo we should identify and classify them as Minor or majorMinor or major  some are difficult to put into one of the abovesome are difficult to put into one of the above classification and categorized as Debatableclassification and categorized as Debatable and with deeper analysis they are categorizedand with deeper analysis they are categorized as Minor or Major.as Minor or Major.
  • 26. Major Deviations     The bid in a result of finding of “non responsiveness” and consequent rejection is called as Major or Material Deviation.  The Major Deviation would be one which either, (a). Has an effect on the validity of the bids: or (b) Has been specified in the bidding documents as grounds for rejection of the bid: or (c) Has an effect in substantial way to the scope, quality, functionality or performance; or (d) Will limit in any substantial way the PE’s rights or bidders obligations: or (e) Is a deviation from the terms or the technical specifications in the bidding Document whose effect on the bid price is substantial but cannot be given a Monetary value.
  • 27. Material Deviation  A material deviation or reservation is one:  which limits in any substantial way the scope, quality, or performance of the Works;  which limits in any substantial way, inconsistent with bidding documents, the Employer's rights or the bidder's obligations under the Contract;  whose rectification would affect unfairly the competitive position of other bidders presenting substantially responsive bids;  a Bid which proposes and alternative;
  • 28. Minor deviation • The sum of the bid price and the total of adjustments made for deviations and other evaluation factors specified in the bidding documents is the “evaluated bid price”. • considered as “substantially responsive” and are, therefore, evaluated and considered for contract award by determining any financial value of each deviation and adding to the bid price.
  • 29. Minor deviationMinor deviation would be one which either a. Has no effect on the validity of the bid; or b. Has no effect in substantial way to the scope, quality, functionality or performance; or c. Will not limit in any substantial way the PE’s rights or bidders obligations: or d. Has such effect but the difference from the commercial terms or technical Specifications in the bidding documents is such that it can be given a monetary Value; or e. Has not been specified in the bidding documents as grounds for rejection of the bid, provided that the total amount of adjustments for such deviations does not exceed a previously determined percentage of the bid price.
  • 30. Debatable DeviationsDebatable Deviations  Requesting different amount of advanceRequesting different amount of advance and other payment termsand other payment terms (including(including liquidated damages and retention):liquidated damages and retention):  Late RecoveryLate Recovery  Recovery up to last BillRecovery up to last Bill  RetentionRetention  Liquidated DamagesLiquidated Damages  Proposed changes in construction periodProposed changes in construction period which is not criticalwhich is not critical::  Omissions of minor works or itemsOmissions of minor works or items included in the scope of workincluded in the scope of work
  • 31. Completeness of bids: Procedural Deviations in submission of bids.  Bid Security. Lack of supporting Documents: Fixed price against variable price Technical Specifications: Subcontracting :Alternative bids: Conditional bids Alternative Bids Time of Completion Debatable Deviations Ways of treating most frequent deviations:
  • 32. Most Frequent DeviationsMost Frequent Deviations Conflicting ClausesConflicting Clauses Some items are not pricedSome items are not priced Marking of envelopsMarking of envelops Lesser periods /Lesser amountsLesser periods /Lesser amounts Lack of supporting documentsLack of supporting documents Conditional BidsConditional Bids AlternativebidsAlternativebids 
  • 33. Stage 2Stage 2  DETAILEDEVALUATION OF TENDER 1.Technical Analysis; 2.Commercial Analysis; and 3.Financial Analysis.
  • 34. Objectives To determine the cost that PEwill incurif the contract is awarded to each of the bid which was determined as a substantial responsive bid . This stage, bids are compared with each other forthe purpose of comparison and to determine the lowest evaluated cost that will be incurred by the PEfrom the substantially responsive bids received.
  • 35. It is again emphasized that PEshould only use the evaluation criteria disclosed in the bidding document. Most frequently used evaluation criteria is given below. The PEmay use other appropriate criteria fora particularprocurement and disclosed such factors togetherwith the evaluation methodology in the bidding document: Principles and Methodologies
  • 36. Detailed Bid Evaluation – Principles and Methodologies ThePE may used other appropriatecriteriafor aparticular procurement and disclosed such factor together with theevaluation methodology in thebidding document  ExcludeVAT, contingenciesand provisional sum amounts  Correction of arithmetical errors  Application of applicablediscount  Adjustmentsfor acceptabledepartures  Adjustmentsfor delivery period  Adjustmentsto bid pricesfor omissions  Adjustmentsfor inland transportation  AlternateBids  Conversion to common currency  Domestic preference  Reassessranking order  Examinefor unbalancebidding  After salesservice  Clarificationsduring evaluation  Operational costs and life cycle costing
  • 37. Clarifications during evaluation:Clarifications during evaluation:  if the Bid is any doubt about the intent ofif the Bid is any doubt about the intent of the bidder. Modifications of thethe bidder. Modifications of the substances of the bid by a bidder are,substances of the bid by a bidder are,  however, not allowed. Any change inhowever, not allowed. Any change in price, delivery terms, conditions ofprice, delivery terms, conditions of contract or change of specificationscontract or change of specifications proposed by the bidder is considered asproposed by the bidder is considered as substantive.substantive.  modifications. The PE should not changemodifications. The PE should not change any of the commercial terms or technicalany of the commercial terms or technical specifications as a result of clarifications.specifications as a result of clarifications.
  • 38. DETAILED EVALUATIONDETAILED EVALUATION Check for arithmetical errors & correctErrors will be corrected by the Employer as follows: (a) where there is a discrepancy between the amounts in figures and in words, the amount in words will govern; (b) where there is a discrepancy between unit rate and line item total, resulting from multiplying unit rate by quantity, unit rate as quoted will govern.
  • 39. (c) unless this sub-clause is modified in Bidding Data and if the bid price decreases by the above procedure, the amount stated in the Form of Bid shall be adjusted with the concurrence of the bidder and shall be considered as binding upon the bidder;
  • 40. (d) where there is a discrepancy between unit rate and line item total, resulting from multiplying unit rate by quantity, unit rate as quoted will govern, unless there is an obviously gross misplacement of decimal point in unit rate, in which case line item total as quoted will govern, and unit rate will be corrected; 
  • 41. Check for omissions Apply discounts if any Convert to common currency Responsive to commercial & technical conditions assess monetary implications of acceptable deviations and other matters Apply domestic preference if applicable Reassess the ranking order of bids
  • 42. Summary of Evaluation ProcessSummary of Evaluation Process 1.1. PlanningPlanning 2.2. Scrutiny of BidsScrutiny of Bids 3.3. AssessmentAssessment 4.4. EvaluationEvaluation  Life –Cycle CostingLife –Cycle Costing  Matrix AnalysisMatrix Analysis  SelectionSelection  Negotiation IssuesNegotiation Issues
  • 43. Commercial Analysis of Substantial Responsiveness of Tenders. Technical Analysis of Substantial Responsiveness of Tenders. Financial Analysis of Substantial Responsiveness of Tenders. Detailed Evaluation of Substantially Responsive Tenders
  • 44.  COMMERCIALANALYSISCOMMERCIALANALYSIS The Table forCommercial Terms should list all theThe Table forCommercial Terms should list all the important commercial conditions specified in theimportant commercial conditions specified in the tendering documents such as:tendering documents such as: • The tendersecurity amount and validity period; • Terms of payment; • Liquidated damages etc.; and • Any deviations from requirements of the tendering documents. Further, it should be stated whethera financial adjustment to the tenderis considered necessary as a consequence of any minordeviation
  • 45. TECHNICALANALYSISTECHNICALANALYSIS The Table of Technical Requirements should set out:The Table of Technical Requirements should set out:  The scope of supply,  Delivery orwork schedule,  The important technical specifications of all majoritems of equipment and material (e.g., plant rating, capacity, speed, voltage and pressure, operating temperature, etc.),  The performance characteristics (e.g., plant efficiency, fuel consumption, losses, etc.), and  Warranty period.
  • 46. FINANCIALANAYLSISFINANCIALANAYLSIS Financial Adjustment of TenderPrices (Commercial Aspects). • Tenderprice comparison is usually the final and most critical step in the tenderevaluation process. To do this properly, a clearunderstanding of the basic principles forcomparison is vital: • The tenderprices should be adjusted forthe purpose of tendercomparison forthose deviations which are permissible and which can be “translated” fairly into monetary values.
  • 47.  FINANCIALADJUSTMENTS OFTENDERFINANCIALADJUSTMENTS OFTENDER PRICES (COMMERCIALASPECTS)PRICES (COMMERCIALASPECTS)  Adjustments foracceptable departuresAdjustments foracceptable departures  Adjustment forDeviation from the TermsAdjustment forDeviation from the Terms of Payment.of Payment.  Adjustment forDeviation from theAdjustment forDeviation from the Delivery Schedule orCompletion:Delivery Schedule orCompletion:  Adjustments forDeviation fromAdjustments forDeviation from provisions forpayment of Duties andprovisions forpayment of Duties and taxes (in Civil Works contract)taxes (in Civil Works contract)
  • 48. •FINANCIALADJUSTMENTS OFTENDERPRICES (TECHNICALASPECTS)  Adjustment forCompleteness in Scope of Supply  Adjustment forTechnical Compliance  Adjustment forSpecified Technical Evaluation Factors  Adjustment forSpare Parts  Aftersales Services  Maximum Amount of Adjustment fordeviation  Adjustment forCost of Inland Transportation to the Project Site –INCOTERMS
  • 49. Financial AdjustmentsFinancial Adjustments Domestic PreferenceDomestic Preference ( if applicable)( if applicable)
  • 50. Objectives To determine the cost that PE will incur if the contract is awarded to each of the bid which was determined as a substantial responsive bid . This stage, bids are compared with each other for the purpose of comparison and to determine the lowest evaluated cost that will be incurred by the PE from the substantially responsive bids received.
  • 51. It is again emphasized that PE should only use the evaluation criteria disclosed in the bidding document. Most frequently used evaluation criteria is given below. The PE may use other appropriate criteria for a particular procurement and disclosed such factors together with the evaluation methodology in the bidding document: Principles and Methodologies
  • 52. Principles and MethodologiesPrinciples and Methodologies  Exclude VAT, contingencies andExclude VAT, contingencies and provisional sum amountsprovisional sum amounts  Correction of arithmetical errorsCorrection of arithmetical errors  Application of discountApplication of discount  Adjustment for omissionsAdjustment for omissions  Adjustments for acceptable departuresAdjustments for acceptable departures  Conversion to common currencyConversion to common currency  Domestic preference;Domestic preference;  Examination for unbalanced bidding;Examination for unbalanced bidding;  Comparison with engineers estimateComparison with engineers estimate  Rejection of all bidsRejection of all bids  Clarifications during evaluationClarifications during evaluation  Alternate Bids.Alternate Bids.
  • 54. Post qualificationPost qualification  Post qualification is suitable for use in thePost qualification is suitable for use in the procurement of works contracts, whichprocurement of works contracts, which are not complicated where pre-are not complicated where pre- qualification does not offer muchqualification does not offer much advantage.advantage.  Post -qualification is a distinct step in bidPost -qualification is a distinct step in bid evaluation.evaluation.
  • 55. Post qualificationPost qualification  Post –qualification determines that bidder, whoPost –qualification determines that bidder, who has submitted the lowest substantiallyhas submitted the lowest substantially responsive bid, has the capability and theresponsive bid, has the capability and the capacity to perform the job.capacity to perform the job.  If the bidder has not demonstrated his capacityIf the bidder has not demonstrated his capacity and capability he is rejected and next bidder isand capability he is rejected and next bidder is considered.considered.
  • 56. Post -qualificationPost -qualification  Post –qualification criteria shall be clearly spelled out in the bidding documents  Relevant forms & questionnaires shall be included in the bidding documents to extract data in a uniform mater.  The PE can use the data it gathered in addition to the data submitted by the bidder
  • 57. Post –qualification CriteriaPost –qualification Criteria 1.1. Average AnnualAverage Annual Construction turn-overConstruction turn-over 2.2. Availability of liquid assetsAvailability of liquid assets supplemented by projectsupplemented by project specific lines of Creditspecific lines of Credit 3.3. Experience in similarExperience in similar projectsprojects 4.4. Necessary Equipment.Necessary Equipment. 5.5. PersonnelPersonnel 6.6. Production rates of key itemsProduction rates of key items
  • 58. 4. Bid Evaluation4. Bid Evaluation ReportReport
  • 59. Bid Evaluation ReportBid Evaluation Report  After the completion of the evaluationAfter the completion of the evaluation process the PE should prepare a bidprocess the PE should prepare a bid evaluation report setting out process ofevaluation report setting out process of evaluation. The PE shall use standardevaluation. The PE shall use standard forms available for the purpose.forms available for the purpose.  In addition the evaluation report shouldIn addition the evaluation report should include narrative section in which anyinclude narrative section in which any Information not suitable for presentationInformation not suitable for presentation in the form of tables, together with anyin the form of tables, together with any Supplementary information necessary forSupplementary information necessary for a complete understanding of all thea complete understanding of all the factors considered during bid evaluation.factors considered during bid evaluation.