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Tendering process, Bid Evaluation & Award Process

brief description of Tendering process, bid evaluation & award process

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Tendering process, Bid Evaluation & Award Process

  1. 1. Tendering, Bid Evaluation & Award Process Knowledge sharing by : Prateek Kashyap (With co-participation of Vipul Singhal)
  2. 2. We need to implement; BUT HOW????, That’s a Project !!!!!
  3. 3. What is a Project? Projects is a temporary rather than permanent social systems or work systems that are constituted by teams within or across organizations to accomplish particular tasks under time constraints. OR A Project is a temporary endeavor undertaken to accomplish a unique product or service OR In simple words it’s a collection of activities which needs to be performed in certain defined constraints by a team to realize the need.
  4. 4. Attributes of a Project  Unique purpose  Temporary  Requires resources  Should have a primary sponsor and/or customer  Involve uncertainty
  5. 5. Steps in a Project  Step 1 : Realization of need  Step 2 : Planning for its fulfillment  Step 3 : Decision to produce or Procure  Step 4 : Procurement  Step 5 : Execution / Commissioning  Step 6 : Verify fulfillment of parameters  Step 7 : Handover for Operations
  6. 6. Who are the Stakeholders of Project? Stakeholders are people or entities who have a say in implementation of the project and they get affected w.r.t. Project’s success or failure. They are :  Employer - Those who are implementing  Contractor - Those who are to supply, construct/ erect & commission the project equipment or provide respective services  Consultant - or Engineers who specify, quantify, select and supervise the supply, construction/erection, commissioning & Handover of Project for Operations  Financial Institute - Those who are lending money for project
  7. 7. What is Procurement ? Procurement is the acquisition of goods, services or works from an outside external source. It is favorable that the goods, services or works are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location. What is the Requirement ?  May be for Equipment / Machinery  May be for Technology / Consultancy  May be for Execution / Services / or for Safety / Quality
  8. 8. What are the Methods for Procurement ? • Agreement • Purchase order • Rate contract • Auction • Tender • Acquisition
  9. 9. What is a Tender ? A written invitation sent to potential suppliers of a good or service to inform them about the information required for the buyer to choose among them. Its Objective • To Ensure Best Fit Supplier is selected to Supply Goods/ Services to customer which offers best value of money • Selection process should be business ethics driven- Fair Practice • More options • Equal opportunity
  10. 10. Routes to be followed for Tendering Depends primarily on the Statutory Norms or the Financial Institutes . • ICB : International Competitive Bidding • LICB : Limited International Competitive Bidding • NCB : National Competitive Bidding
  11. 11. The Tendering Process Step 1 : NIT – Notice Inviting Tender (Advertisement, Post , Email.. ) Step 2 : EOI- Expression of Interest by respective Bidders Step 3 : Tender document Floating/ Selling Step 4 : Pre Bid Meeting Step 5 : Bid Submission- In Single Phase or Two Phases Step 6 : Bid Opening – In Single Phase or Two Phases Step 7 : Bid Evaluation Step 8 : Post Bid Meeting Step 9 : Report Formation Step 10 : Award of Contract
  12. 12. Contents of NIT (Notice Inviting Tender) • Brief Project Particulars • Brief Requirement of Tender • Eligibility Criteria – Technical & Financial • Duration & Place of sale of tender document • Price of tender document • Contact Information • Probable amount of Contract (Primarily in Govt. Tenders) • Earnest Money amount • Work completion period • Bid submission period Sample NIT- Pvt. NIT-Govt.
  13. 13. Advertising the NIT Depending on the the need of the Route of tendering, the NIT needs to be advertised or circulated through & to : • All Embassies ( ICB/ LICB route to be followed) • Major newspapers (ICB/ LICB/ NCB route to be followed) • Web portals (ICB/ LICB/ NCB route to be followed) The NIT may be brief from publishing point of view as an advertisement. The detailed NIT in this case is given upon receiving EOI (Expression of Interest) from the prospective Bidder
  14. 14. EOI - Expression of interest Interested Bidders shall show their Interest in executing the Tender/ submitting the Bid and ask for the Complete Tender documents Followed by purchase of the tender documents
  15. 15. Tendering type based on mode of submission Manual tendering- Paper type submission E Tendering- E-submission (E Bidding)
  16. 16. Contents of Tender Document Section I : NIT/ IFB (Invitation For Bids) Section II : ITB (Instruction To Bidders) Section III : GCC (General Conditions of Contract) Section IV : SCC (Special Conditions of Contract) Section V : SOR (Schedule of Requirement) Section VI : Technical Specification Section VII : Various Bid Forms
  17. 17. Constituents of Bid Forms in Tender document • Bid Security Form, • Contract Form, • Performance Security Form, • Financial Capability Form, • Technical Capability Form, • Manufacturer Authorization Form, • Advance bank Guarantee Form, • Completion certificate Form, • Deviation Statement Form, • Places of Tests & Inspection Form….
  18. 18. The Pre Bid Meeting Subsequent to the purchase of Tender Document, the prospective Bidders, Employer and Consultants meet for discussions with following objectives : • Provide clarification to the Bidders- Technical or Commercial • Communicate any additional information in Project • Do necessary revision in the tender documents as per industry feedback • Ensure minimum deviations • Critical points to explained and discussed The Minutes of Pre Bid Meeting are recorded and it may be followed by an Amendment or Addendum to the Tender documents
  19. 19. The Bid Submission/ Tender Submission Subsequent to the Pre Bid Meeting, the Bids are prepared and submitted in the prescribed time and form, duly sealed. The Bid submission could be of following forms Two Stage Bidding : First Techno commercial part & then Price part Single stage Bidding : Comprehensive Bid is submitted
  20. 20. The Bid Submission/ Tender Submission
  21. 21. The Bid Opening / Tender Opening Tender Board ( consisting of representative of Employer -Chairman/ Board Member/ CEO/ CE; Consultant, Financial Institute) meets on the nominated day and time to open these Sealed bids ( Generally few hours after last time of Bid submission date). Late Bids are not supposed to be entertained. Usually Following steps are followed: Step 1 : Introduction of the Participants and announcement of the Bidders. Followed by Attendance marking. Step 2 : Declaration of Sufficiency of the Bid Bond Step 3 : Declaration of Guaranteed Technical Particulars Step 4 : Declaration of the Bid Price if it’s a Single Stage Bid
  22. 22. The Bid Opening / Tender Opening
  23. 23. The Bid Evaluation Generally the bid evaluation process involves a team of experts or panels which is lead at the front by a single person who is responsible for interdepartmental/interdisciplinary coordination as well as coordination with the stake holders to and Bidders . He may be known as Project Coordinator or Project Manager. His objectives are: • The Bid is thoroughly evaluated by the respective Technical, Legal, Commercial &Financial experts • Proper flow of communication to & from bidders (queries & replies) • All aspects of bids are evaluated • Every Bidder gets a fair chance of winning the contract
  24. 24. The Bid Evaluation The Evaluation of the bid has following parts: • Technical Evaluation • Commercial Evaluation • Capacity Evaluation
  25. 25. The Bid Evaluation- Technical • The equipment /system & manufacturer being offered by the bidder is to be evaluated for its conformance with the tender technical specification • The Guaranteed Technical particulars are to meet the minimum Tender requirement. • Any alternative technology or material grade offered by the bidder needs to be verified. • Any price implication on the project w.r.t. technical parameters to be verified and respective loading on the price to be proposed. • The feedback of working of the equipment supplied by the bidders in other projects to be evaluated • The factory load of the bidder or its major supplier should be evaluated
  26. 26. The Bid Evaluation- Technical (-Score method)
  27. 27. The Bid Evaluation- (-Weighted Score method)
  28. 28. The Bid Evaluation- Commercial • The Bid Forms are duly filled and signed • The declared Deviations on the Commercial part are to be evaluated • All costs are properly covered in the offered prices • Bid price is in specified currency or the listed conversion rate at the time of price bid opening are to be considered. • Any price variation/escalation formulae are correct and is justified • Details of any extra costs ( such as Delivery cost , shipping cost, custom charges, insurance, documentation , testing & inspection) are identified • Cost of Spares if mentioned extra is identified • Any other indirect commercial deviations are identified
  29. 29. The Bid Evaluation- Capacity • The Bidder has sound financial condition • The Bidder has sufficient funds to procure raw material and process so that positive cash flow is maintained up to delivery of equipment • The Bidder is not under litigation or any act resulting in bank corruptly • The Bidder’s financial has sufficient immunity from market economy trend • Will there be any cost resulting from loss of economy of scale • If offer is for Services , then check should be done if resultant staff savings or reduction in support services fully accounted for • Has the cost of any long term agreement been included ? • In case of Foreign Bidder, geo-Political scenario to be evaluated.
  30. 30. Post Bid Meeting • During Bid Evaluation , Bid Evaluation committee witness that submitted Bid has several variation with the Technical Specification of the Tender. • It is therefore difficult for the Committee to Compare the Bids . • A Post Bid Meeting is organized with separate Bidders individually to bring them to a common Platform and negotiate on the Technical Specs wherever appropriate • Once the Technical part is freezed out , Bidders are asked to again submit their Commercial Bid ( after taking into consideration the cost of technical changes) .
  31. 31. Post Bid Meeting
  32. 32. Evaluation Report • Before Release of Order/ award of contract , an evaluation report is being generated for the purpose of Office records or for future reference. • This report contains basic details such as  Description of Contract  Type of Tender  Closing date of Tender  Details of Tender Received  Technical Compliance of tenders  Analysis of Lowest 3 tenders  Performance records of Lowest 3 tenders  Recommendation of Assessment Panel Sample Evaluation Simple format Evaluation- Technical Evaluation Commercial
  33. 33. Award Process • Based on Evaluation report & recommendation of Assessment Panel a “ Best Fit Bidder” or successful is declared. • A Letter of Award is Issued to the Successful Bidder. • The Bidder is asked to submit a Contract Performance Guarantee which could be in form of a Bank Guarantee, Demand Draft, Cash or a Fixed Deposit Receipt • A contract between Bidder & Employer is drafted as per International Contract Laws. • Contractual Obligations & Rights are being drafted / incorporated in the contract • Technical Obligations are clearly stated • Quality Obligations are clearly stated • Completion Schedule is clearly stated • Payment schedules are clearly stated • The contract is signed and moved for implementation
  34. 34. Contract document’s Broad features • Work of tender/contract is mentioned • Date of signing is mentioned • Parties are mentioned • Scope of the contractor is mentioned • Contract price is mentioned • Documents of reference and their order of precedence is mentioned • Time schedule is mentioned • Payment terms is mentioned • Other conditions of contract- technical & commercial are referred. • Duly signed/stamped by the authorized representatives in presence of witness Sample Contract 1 & 2
  35. 35. Thanks

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brief description of Tendering process, bid evaluation & award process

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