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Bid evaluation shopping


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Bid evaluation shopping

  1. 1. NEEDS TO KNOW ON PUBLIC PROCUREMENT Priyantha weerasooriya. SSP/Director-Supplies. PHQ
  2. 2. Congratulations on Your success
  3. 3. Meaning of procurement Oxford Dic; The process of obtaining supplies, especially for Government or an organization
  4. 4. Previous Tender Guidelines in Sri Lanka  Guidelines on Government Tender Procedure  Separate Chapter for Foreign Funded Projects (2000)  Guidelines on Government Tender Procedures (Revised in 1997)  Issued a Separate book, with 60 Circulars to the tender procedure 1997 (2004)
  5. 5. 2006 -Pro Guideline and Manuals in Operation as at Today  Procurement Guideline and Manual Works and Goods 2006.  Selection and Employment of Consultants 2007  Procurement of Pharmaceuticals & Medicals & Medical Devices 2006
  6. 6. 1.4 ETHICS IN PROCUREMENT 1.4.1.Confidentiality 1.4.2.Corruption 1.4.3.Conflict of Interest 1.4.4.No gifts or inducement to be accepted
  7. 7. Objectives of Procurement  Value for Money Elements of VFM * Economy – Minimizing Cost of Resources * Efficiency - Maximum output against minimum input * Effectiveness - Relationship between intended results and actual results Public Procurement Involves * SUPPLIES * CONSTRUCTIONS * SERVICES (Over 80% Public Expenditure Goes Through Public Procurement) Procurement in Supplies should ensure * RIGHT QUALITY * RIGHT QUANTITY * RIIGHT TIME * RIGHT PRICE * RIGHT PLACE
  8. 8.  Transparency Accountability  Fairness  Efficiency  Equal Opportunity  Development of Local Business  Achievement of National Development Objectives
  9. 9. Important elements of the Procurement Process  Procurement Planning  Preparation of Bidding Document  Invitation to bid Closing  Bid Opening  Bid Evaluation  Award of Contract
  10. 10. LAWS APPLICABLE TO PROCUREMENT ACTIONS 1) Laws of Arbitration Act No. 11 of 1995 2) Laws of Contract 3)Bribery Act – Section 70. Any public servant who, with intent, to cause wrongful or unlawful loss to the Government, or to confer a wrongful or unlawful benefit, favour or advantage on himself or any person, or with knowledge, that any wrongful or unlawful loss will be caused to any person or to the Government, or that any wrongful or unlawful benefit, hall upon summary trial and conviction by a Magistrate be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding one hundred thousand rupees or to both such imprisonment and fine.
  11. 11. PROCUREMENT METHOD 3.1 International Competitive Bidding (ICB) 3.2 National Competitive Bidding (NCB) - Over 2M * Publish in a News Papers – 21 days * Bid Security required - for 119 days * Bid validity - for 91 days 3.3 Limited / Restricted International Competitive Bidding (LIB) and Limited / Restricted National Competitive Bidding (LNB) 3.4 Shopping - Below 2M • Five (5) quotations • Thru Registered Suppliers • Yellow Pages and Rainbow Pages
  12. 12. 3.5 Direct Contracting a) Direct contracting is a means of Procurement of Goods or Services or Works from a single supplier source. b) It entails no competition and shall be used only under exceptional circumstances c) This method is appropriate under the following circumstances i) When the prices or rates are fixed pursuant to legislation by regulatory bodies ii) Standardization of equipment, for compatibility with existing equipment, may justify additional purchases of the same type of Goods d) When direct contracting is used under any of the reasons above, the value of the Procurement shall be subjected to the upper limits given under Guideline 2.14. No government agency will qualify for automatic direct contract award unless the above requirements are satisfied 3.6 Repeat Orders 3.7 Force Account 3.8 Emergency Account
  13. 13. PROCUREMENT PLANNING “Good Start is half done:
  14. 14. WHAT IS STRATEGIC PROCUREMENT PLANNING? 4.1. Advance Procurement Action 4.2. Master Procurement Plan (MPP) 4.3. Total Cost Estimate * Preparation of procurement plan 1st stage of the procurement process * Define what actions to be taken to focus * List out various procurement under works, goods, services and consultancy
  15. 15. * Identify by which each one of these works goods and services are required to use * Decide contents of individual procurement packages * Identify the relationship between each such items * Determine the method of procurement * Determine the procurement lead-time for each package and schedule, target date for each event * Prepare a bar chart and / or table or list identifying the above dates for each bid package to assist in procurement monitoring
  17. 17. STANDARD BIDDING DOCUMENT FOR PROCUREMENT OF GOODS FORMAT * Invitation for Bids (IFB) * Instructions to Bidders (ITB) * Bid Data Sheet * Evaluation and Qualification Criteria * Bidding Forms * Schedule of Requirements (SOR) * General Condition of Contract (GCC) * Special Conditions of Contract (SCC) * Contract Forms * Specifications * Price Schedule
  18. 18. INSTRUCTIONS TO BIDDERS  General - Scope of Bid - Source of Funds - Ethic, Fraud and Corruption - Eligible Bidders - Eligible Goods & related services  Contents of Bidding Documents - Sections of Bidding Documents - Clarification of Bidding Documents - Amendment of Bidding Documents  Preparation of Bids - Cost of Bidding - Language of Bidding Document - Comprising the Bid - Bid Submission Forms and Price Schedule - Alternative Bids - Bid Prices and Discounts
  19. 19. - Currencies of Bids - Documents Establishing the Eligibility of the bidder - Documents Establishing the conformity of the goods and related services - Documents Establishing the qualifications of the Bidder - Period of Validity of Bids - Bid Security - Format and Signing of Bids  Submission & Opening of Bids - Submission, Sealing and Marking of Bids - Deadline for submission of Bids - Late Bids - Withdrawals and modification of Bids - Bid Opening
  20. 20.  Evaluation and Comparison of Bids - Examination of Terms & conditions: Technical Evaluation - Conversion to Single Currency - Domestic Preference - Evaluation of Bids - Comparison of Bids - Post Qualification of the Bidder - Purchaser’s Right Accept any Bid, and to reject any or all Bids  Award of Contract - Award Criteria - Purchaser's right to vary Quantities at time of award - Notification of Award - Signing of Contract - Performance Security
  21. 21. ROLE IN BIDDING DOCUMENTS  Lay down rules of the Competition * How to price * How to prepare and submit bids * What will be the selection criteria * What will be the qualification criteria  Scope of the obligation * Technical Specifications * Bill of Quantities * Delivery / Completion Time * Warranty / Service obligations  Conditions of Contract * Payment Terms * Price Adjustments * Liability * Insurance * Dispute Resolution
  22. 22. BIDDING DATA SHEET  General  Contents of Bidding Documents  Preparation of Bids  Submission and Opening of Bids  Evaluation and Comparison of Bids
  23. 23. EVALUATION AND QUALIFICATION CRITERIA  Evaluation Criteria  Evaluation Criteria (Methodology)  Multiple Contracts  Domestic Preference  Post Qualification Requirement
  24. 24. BIDDING FORMS  Bid Submission Form  Price Schedule  Price and completion Schedule – Related Services  Bid Security (Guarantee)  Bid – Security Declaration  Manufacturer’s Authorization
  25. 25. SCHEDULE OF REQUIREMENTS  List of Goods and Delivery Schedule  List of Related Services and completion Schedule  Technical Specification  Drawings  Inspection and Tests
  26. 26. GENERAL CONDITIONS OF CONTRACT * Definitions * Contract Documents * Fraud and Corruption * Interpretation * Language * Joint Venture, Consortium or Association * Eligibility * Notices * Governing Law * Settlement of Disputes * Scope of Supply * Delivery and Documents * Supplier’s Responsibilities * Contract Price * Terms of Payments * Taxes and Duties
  27. 27. * Performance Security * Copyright * Confidential Information * Subcontracting * Specification and Standards * Packing and Documents * Insurance * Transportation * Inspection and Tests * Liquidated Damages * Warranty * Patent Indemnity * Limitation of Liability * Changes in Laws and Regulations * Force Majeure * Change Orders and Contract Amendments * Extensions of Time * Termination * Assignment
  28. 28. CONTRACT DATA Contract Data shall supplement and / or amend the condition of contract (CC). Whenever there is a conflict, the provisions contract data shall prevail over those in the contract condition
  29. 29. CONTRACT FORMS * Contract Agreement * Performance Security * Bank Guarantee for Advance Payment
  31. 31. Questions? Enjoy your Tea
  33. 33. * Should be made available during office hours * At least up to one day prier to deadline of submission of bids * Availability for inspection, free of charge * Cost of BDs should be reasonable * Maintain good record keeping system * BDs shall be issued as specified in the IFB
  35. 35. * Bids shall be received only at one location * Bids must be submitted only under sealed cover. * Clearly marked as “Original” or “Copy” putting together in one envelop * Late bids shall not be accepted * Bids shall be received as specified in the IFB
  36. 36. BID OPENING
  37. 37. * BOC shall comprise of minimum two members * Open soon after the closing of bids * Bids shall not be rejected at the bid opening * Only “Original” shall be opened * Late bids shall not be opened * Withdrawals shall not opened (if not any doubt) – withdrawal letter open first * Modification should with original bid * Attendance for bidders or his representatives * Record Keeping is very important * Original bids and records to be handed over to the Chairperson of TEC * Bids shall be opened as specified in the SBDs
  38. 38. NECESSITY * IG Circular No. 2409/2012 Finance Circular No. 05/2012, dated 04.08.2011 * Delegation of financial Authorization under FR 135 * For Goods, Works & Services
  39. 39. AUTHORITY FOR AWARD – SHOPPING Authority GOSL Foreign Funded MPC – Works inviting not less than 5 sealed quotation form ICTAD registered contractors Less than Rs. 5m Less than Rs. 5m MPC – Goods & Services inviting not less than 5 sealed quotations from registered suppliers Less than Rs. 5m Less than Rs. 3m PPC – Works inviting not less than 5 sealed quotation from ICTACD registered contractors Less than Rs. 5m Less than Rs. 5m PPC – Goods & Services inviting not less than 5 sealed quotations from suppliers Less than Rs. 5m Less than Rs. 3m MPC, DPC, PPC, - Goods & Services inviting not less than 3 quotations from registered suppliers Less than Rs. 5m Less than Rs. 1m RPC – Works inviting not less than 5 sealed quotations from ICTAD registered suppliers Less than Rs. 5m Less than Rs. 1m RPC – Goods & Services inviting not less than 5 sealed quotations from ICTAD registered suppliers Less than Rs. 5m Less than Rs. 500,000.00 CAO/HD/PD Works inviting not less than 3 sealed quotations Less than Rs. 500,000.00 CAO/HD/PD goods & Services inviting not less than 3 sealed quotations Less than Rs. 250,000.00
  40. 40. Purpose of Bid evaluation To determine the lowest evaluated substantially responsive bid out of the bid received.
  41. 41. Composition of TEC 1. No member should serve in both the PC & TEC. 2. Subject specialists 3. At least knowledgeable member on Procurement procedure 4. In case of specific subject matters ,can oblation expert advice from external members or institutions 5. Can oblation assistance and expert advice from consultants
  42. 42. Responsibilities of TEC 1. TEC members are jointly and severally responsible. 2. Within the minimum time period as agreed with PC according to the PTS. 3. Evaluation should be made according to the approved specifications and criteria 4. In case of CAPC & MPC, if any objection from any bidder regarding the 10days prier to closing of bids , PE shall convey its decision to all the other bidders. 5. Revive and approve pre qualifications documents / SBDs prepared by the PE.
  43. 43. Responsibilities of TEC Con… 6. To direct the PE to obtain clarifications from bidders in writing if necessary. 7. T approve and issue addenda to the bidding documents where necessary. 8. To agree upon the bid opening procedure. 9. To participate in negotiation , if directed by the PE. 10.The TEC may get assistance from external assistance . 11.Chairperson of the TEC or his nominee selected form the TEC shall participate at the pre – bid conference.
  44. 44. BID EVALUATION EVALUATION CRITERIA • Shall be stated in Bid Documents • All factors quantified in Monitory terms 44
  45. 45. Stages of bid Evaluation Bid Examination Detailed Bid Evaluation Post Qualification
  46. 46. EVALUATION PROCESS Preliminary Examination • Whether the required securities are furnished. • Whether the bid documents are properly signed. • Whether the power of attorney for the authorized person is submitted • Whether joint venture agreements are submitted ( If necessary) • Eligibility of bidders • Whether the bid form was purchased from the concerned office • Whether the person or firm submitting the bid purchased bid form • Whether the bid is sealed • Whether the local agent is declared (If necessary) 46
  47. 47. 47 Preliminary Examination
  48. 48. 48
  49. 49. Substantial Responsiveness • Failure to sign the bid form • Eligibility requirements • Bid security as specified • Inability to meet the critical delivery schedule • Conditional bids • Unavailability of major supporting documents • Failure to bid for the required scope of work • Failure to quote for a major items in the package • Failure to meet major technical requirements – E.g. required material , plant capacity. 49
  50. 50. Detailed bid evaluation Step – by – step procedure to be followed: 1. Correction of arithmetical errors 2. Un balance Bids 3. Discounts if Any; 4. Evaluation of acceptable omissions 5. Conversion to common currency 6. Completion times 7. Adjustments for various minor deviations 8. Domestic preference 9. Substantially non-responsive bids 10.Performance or service factors will be taken in to account as a adjustment.
  51. 51. CORRECTION OF ARITHMETICAL ERRORS 1. Where there is discrepancy between the amount in figures and in word , the amount in words will govern 2. Unit rate and line items 3. Average unit cost for missing items 4. Estimated unit cost for underestimated items Exclude VAT ,Contingencies & Provisional sum
  52. 52. Unbalanced Bids Examine whether the bid is substantially balanced Verify that prices are not so low Higher unit price for earlier works Higher unit rates for underestimated work Items >50% the average cost and where the total amount involved >5% of the total bid 52
  53. 53. Unbalanced Bids Large contracts – say exceeding 500Mn Discount the Loaded Item Discount the engineer estimated value Add the deference between two NPVs to the bidder value for the purpose of compression 53
  54. 54. Unbalanced Bids Other contract – Say not exceeding 500Mn Ask to provide rate analysis If the bidder fail to justify ask additional bid security to mitigate the risk If the bidder refuse to provide such security bid shall be rejected. Add the deference between two NPVs to the bidder value for the purpose of compression 54
  55. 55. Alternative bids  If the bidders are permitted to submit alternative bids , it should be mentioned in the bidding documents  Shall be considered as a separate bid  If the lowest evaluated bidder has submitted the alternative bid , then in can be opened.  Ask to provide rate analysis  If the bidder fail to justify ask additional bid security to mitigate the risk  If the bidder refuse to provide such security bid shall be rejected.  If the alternate bid price lower than the original bid , then alternate bid value should be the lowest evaluated price 55
  56. 56. APPLICABLE DISCOUNT 1. Prier to closing of bids 2. Ignore Conditional Discount 3. Should be declared before closing of bids. 4. As a % or lump-sum can be declared. 5. Exclude the provisional sum and contingencies when the discount is offered as a % 6. When the discount is offered as a lump –sum ,can distribute uniformly to all the line items excluding Contingencies and provisional sum.
  57. 57. CONVERSION TO COMMON CURRENCY • OBJECT – To determine lowest evaluated bid on date of specified. • BID PRICE – Convert in to amount payable in each currency. • COMMON CURRENCY – Borrower’s or any currency • EXCHANGE RATES – Official source such as Central Bank • AS ON – Any specified date – Date to be clearly specified in bid documents. 57
  58. 58. DOMESTIC PREFERENCE • Guideline 7.9.6 shall be included in the bidding documents • Assembly ,Fabrication & possessing etc are commercially recognized. • Can not modify the mix of domestic and foreign goods after bid opening. • No margin of preference shall be applied to any associated services or works included in the package. 58
  59. 59. Detailed evaluation of bids Financial adjustment for Bid Price (Commercial Aspects) 1. Adjustment for Deviation from the terms of payment 2. Adjustment for deviation from the delivery schedule or completion 3. Adjustment for Deviation from provision for payment of duties and taxes 59
  60. 60. Detailed evaluation of bids Financial adjustment for Bid Price (Technical Aspects) 1. Adjustment for completeness in scope of supply – E.g. Missing Items 2. Adjustment for Technical compliance – E.g. Alloy wheel vs Normal wheel 3. Adjustment for Inland Transportation 4. Adjustment for spare parts 5. Maximum amount of Adjustment for deviation 60
  61. 61. BID EVALUATION Other factors • Delivery Time /Completion time • Payment terms • Terms of Guarantee • Training 61
  62. 62. BID EVALUATION Other Factors • Technical Capacity • Operating Cost • Maintenance Cost • Efficiency • Resale value 62 Life cycle Cost
  63. 63. 63
  64. 64. Thank You