A primer on bid management b2 b_egovernance_biswa.prakash@hotmail.com

BID PROCESS MANAGEMENT
SYSTEM
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Agenda
1. Fundamental of Bidding
2. Bidding Process
3. Evaluation criteria
4. Bid Evaluation Methodology
5. e-Auction process
6. Reverse auction
7. Swiss challenge method
9. Other general terms &
conditions
10. Govt. Procurement process
11. PSU Procurement process
12. Procurement process of
funding agency
13. Vendor Registration process

Fundamental of Bidding
 A Bid Management System, either manual or
electronic, is required to ensure an effective and
efficient process for:
a) the buyer wishing to source products or
services and
b) the seller wishing to bid to supply products
or services.

Govt. Procurement Process
 Covers the procurement of GOODS,WORKS
AND SERVICES by all Government Ministries,
Departments, Agencies, Statutory Corporations
and Public sector undertakings in the Center
and the States, Municipal Corporations and
other Local bodies and even by private sector
undertakings providing public service on
monopoly basis.

Objective of Govt. Procurement
Process
 TO PROCURE WORK, MATERIAL,
SERVICES OF THE SPECIFIED QUALITY
WITHIN THE SPECIFIED TIME AT THE
MOST COMPETITIVE PRICES IN A FAIR,
JUST & TRANSPARENT MANNER----

Stages in Govt. Procurement
Process
1. PRE-TENDER STAGE
2. TENDER STAGE
3. EXECUTION STAGE

Process
1. PRE-TENDER STAGE
i. Project Formulation
ii. Appointment of Consultants
iii. Preparation of Detailed Project Report
(Estimate, Design, etc.)

Process
2. TENDER STAGE
i. Preparation of Tender Documents
ii. Inviting & Opening of Tenders
iii. Prequalification
iv. Tender Evaluation &Award of Work

Process
3.EXECUTION STAGE
i. Agreement/Purchase Order
ii. Contract Performance
(A) Advance Payments
(B) Implementation Of Contract Provisions
(C ) Time And Cost Overrun
(D) Payments
(E) Quality Of Work/Inspection

Vendor Selection Process
 Selection and registration of firms/suppliers and their
evaluation must be clear and transparent.
 PQ evaluation criteria must be incorporated in the bid
documents in clear and unambiguous terms
 Prepare the PQ criteria specific to the requirement of the
work.
 Evaluate the bids exactly as per the notified criteria.

Vendor Selection Process
 Prequalification necessary to bring competent contractors into
competition with technical & financial capability required for
the particular procurement. To be done on the basis of :
 Experience and past performance on similar contracts
 Capabilities with respect to personnel, equipment and
manufacturing facilities
 Financial standing through latest Annual report
(balance sheet and P & L account) of last three years.

Bidding Process
• Single bid or two bid (for IT and
communications systems, turn key projects)
• Two bid system: techno-commercial and price
bids are called separately.
• The techno-commercial bid contains all terms
and conditions including commercial terms
except price.

Bidding Process
• Technical bids will be evaluated by Tender
Evaluation Committee
• Price bids of only technically acceptable offers are
to be opened to ensure an objective evaluation of
tenders.
• In case of two-stage two bid system,
price/commercial bids are called from only
technically acceptable vendors after technical
evaluation.

Bid Evaluation
Methodology There are two process used for awarding various e-governance
contracts (both Consulting and Software Implementation).
 QCBS (Quality cum Cost Basis) method gives
weightage to both quality and cost. The weights are usually
more for technical (or quality) and less for commercial (or
cost) aspects of the bid (usually 60:40 or 70:30 or
sometimes even 80:20).
 L1 gives the weightage to Commercial aspect of the bid
only where Bidder who quotes lowest wins the bid.

Earnest Money Deposit
 To safeguard the interest of Dept. (withdrawal /
alter the bid by bidder)
 Exemption – Regd. With Central Purchase
Organization / National Small Industries
Corporation
 EMD - 2 % to 5% of estimated value
 Can be DD/Banker Cheque /BG
 Unsuccessful bidders EMD should be returned
/refunded at the earliest.

Performance Security
 From the successful bidders
 Amount – 5% to 10%
 DD
 Should be valid for 60 days beyond the date of
completion of all the contractual obligations of
the supplier including warranty
 Bid Security should be refunded on receipt of
Performance Security

e-Auction
 e-Auction is introduced to negotiate terms of
contract between suppliers and buyers mainly in
the industrial sector.
 The electronic auction (e-Auction) is an e-
business between auctioneers and bidders, which
takes place on an electronic marketplace.
 It is an electronic commerce which occurs
business to business (B2B), business to
consumer (B2C), or consumer-to-consumer
(C2C)

Reverse Auction
 The two major types of the electronic auction
are forward auction in which several buyers bid for
one seller's goods and reverse auction in which
several sellers bid for one buyer's order.
 Reverse auctions are the other major form of
auctions. In a reverse auction, a single buyer makes
potential sellers aware of their intent to buy a
specified good or service
 During the course of the actual reverse auction event,
the sellers bid against one another to secure the
buyer’s business, driving the price to be paid for the
item downward. Thus, the winning bidder is the seller
who offers the lowest price.

Reverse Auction
 Reverse auctions are most typically used for
procurement by private companies, public
sector agencies, and non-profit organizations.

Swiss Challenge Method
 Swiss Challenge System is a new bidding process to help
private sector initiative in core sector projects. It's an offer
made by the original proponent to the government
ensuring his process to be best (in terms of effectiveness
including both the factors cost and time) by his initiative
as a result of his own innovative approach or on the
demand of the government to perform certain task.
 The Swiss challenge system, like the bonus system, further
allows third parties to make better offers (challenges) for a
project during a designated period with simple objective
to discourage frivolous project, or to avoid exaggerated
project development costs. Then accordingly, the original
proponent gets the right to counter-match any superior
offers given by the third party.

Working of Swiss Challenge
Method
 The system basically works on two different patterns, its
up to the Government to decide as to which one they
want to adopt. The two main ways are as follows:
 The Government can either purchase the intellectual
property rights for a project concept from the
proponent or then award the project through a
competitive bidding process in which no bidder has a
predefined advantage.
 The Government can offer the original proponent an
advantage in a competitive bidding process. In this case
the government should create rewards that satisfy the
original proponent while still allowing a truly
competitive process.

General Evaluation
Criteria
 Satisfaction of Conditions specific to the contract
 Sample Testing
 Capacity Evaluation.
 Turnover
 Statutory documentation
 Arrival at Outcome Price of the bid
 Determination of L-1, L-2, L-3……
 Determining Reasonableness of the L-1 Rates
 Recommendation for Negotiation (if require)

General Evaluation
Criteria
 Financial and Technical sanction of competent
authority is available.
 Adequate and wide publicity is given. Advertisement is
posted on website and tender documents are available
for downloading.
 Convenient tender receiving/opening time and address
of the tender receiving officials/tender box are
properly notified.
 In the case of limited tender, panel is prepared in a
transparent manner clearly publishing the eligibility
criteria. The panel is updated regularly.
 Pre-qualification criteria are properly defined/ notified.

General Evaluation
Criteria
 Short listed firms/consultants are fulfilling the eligibility
criteria. There is no deviation from notified criteria
during evaluation.
 Experience certificates submitted have been duly
verified.
 Tenders/bids are opened in the presence of
bidders/their authorised representative.
 Corrections/omissions/additions etc., in price bid are
properly numbered and attested and accounted page –
wise. Tender summary note/ Tender opening register is
scrupulously maintained.
 Conditions having financial implications are not altered
after opening of the price bids.

A primer on bid management b2 b_egovernance_biswa.prakash@hotmail.com

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