Hilario P. Martinez presents a proposal for a quality-oriented public bidding system that prioritizes quality over cost using a multi-level evaluation framework. The document critiques current bidding practices and advocates for a three-envelope system that balances technical proposals, financial bids, and timelines. It emphasizes the need for comprehensive criteria that enhance transparency and fairness in public sector procurement, ultimately aiming for better project outcomes.

1. Hilario P. Martinez 1
HPM

2. Preference
for Quality
over Cost
3-tier Proposed Changes to Public
Bidding System
Point Score-
based Multi-
Level Criteria
& Evaluation
System
Hilario P. Martinez 2
Two &Three-
Envelope
Public
Bidding
System

3. Value of Project vs Cost of Project
Premises Hilario P. Martinez 3

4. Purpose of Projects in the Public
Sector
Premises Hilario P. Martinez 4

5. Factors that Influence the drafting of
T.O.R. for Projects in the Public Sector
Technology
Trend
Recognized
Industry
Standard
Political
Policy
Decisions
Professionals’
Prescription
Need-
Based
Studies
Proponent-
Prescribed
Specifications
TOR – Terms of Reference
(Project Specifications)
Premises Hilario P. Martinez 5
NO
STRATEGIC
PLAN???

6. Vendors’ Common Expectations
Premises Hilario P. Martinez 6

7. The Prevailing Public Bidding Policy
2 to 3 Dimension Criteria
They are
contradicting
each other!
Just pick
one!
Moron!
Situationer Hilario P. Martinez 7
?

8. Is PRICE the appropriate reference
factor in Public Bidding?
… IS ALMOST
ALWAYS
INCORRECT!
… QUALITY
NOT EVEN
AT PAR!
… IT IS
“INVITING”
FRAUDULENCE
Situationer Hilario P. Martinez 8

9. Applying the range of definition of a
“disadvantageous” for tender bids
… cheap &
sub-par too!
… plus being unfair
to the taxpayers
Situationer Hilario P. Martinez 9

10. The Repercussion of Agency Alignment
on Cost and Quality to Public Service
Extreme
focus on
Cost
Extreme
focus on
Quality
Situationer Hilario P. Martinez 10
An Agency is Out of Balance
due to extreme focus on COST
and is in danger of losing
service quality because of
heavy cost-cutting
An Agency is Out of Balance due
to extreme focus on QUALITY
and is in danger of over-
spending to deliver higher levels
of service than are needed
GOVERNMENT
A G E N C Y

11. Project Implementation Problems
Situationer Hilario P. Martinez 11

12. PRE-BIDDING REQUIREMENTS
Hilario P. Martinez 12

13. Monitoring and Accreditation
A n n u a l
Performance
CONTRACTORS
SERVICE
PROVIDERS
CONTRACTING
GOVERNMENT
AGENCIES
REGULATORY
AGENCY
Hilario P. Martinez 13Pre-Bidding

14. CORRECT
APPROPRIATION
REALISTIC
TIMELINE
APPROPRIATE
TECHNOLOGY
& RESOURCES
WELL-DEFINED
OUTPUT
Creating a Responsive T.O.R.
T.O.R.
Hilario P. Martinez 14Pre-Bidding

15. Pre-Qualification Requirements
Financially
Healthy
Recognized by
Industry
Respectable
Track
Record
Technology
Capable
Hilario P. Martinez 15Pre-Bidding

16. TECHNICAL EVALUATION
Contracting Parties’ Responsibility
PROPONENT AGENCY’S
CONCERN
CONTRACTORS’/BIDDERS’
CONCERN
BID PROPOSAL
FORMULATION
Hilario P. Martinez 16Pre-Bidding

17. Constituting the Bids and Award
Committee
Pre-Bidding Hilario P. Martinez 17
B.A.C.
MEMBERS
Bids and Award
Committee
Bid Acceptance and Awarding
Technical
Evaluation Group
Bid Evaluation and Rating
Contract
Negotiation Team
Project Legalities and
Expectations
RESULTS
(5) (3)

18. PREFERENCE FOR QUALITY OF
TECHNICAL PROPOSAL
As Reflected in a 2-Envelope and 3-Envelope Public Bidding System
Quality Hilario P. Martinez 18

19. Quality-bias Public Bidding System
Option 1:
2 Envelope System
Option 2:
3 Envelope System
Quality Hilario P. Martinez 19
For Projects with a duration
of six months or less
For Projects with a
duration over six months

20. Instituting a Quality-Bias Public
Bidding System
Technical
Price
Bid Criteria
and
Evaluation
Templates
The greater weight for “Technical
Proposal” indicating preference to
QUALITY in relation to Cost as
provided for in the “Price Proposal”
NOTE:
Quality Hilario P. Martinez 20

21. Wishing for a Better Outcome?
A Project
design with
a superior
Quality,
completed
in the
shorter
Time and at
the lowest
possible
Cost?
Quality Hilario P. Martinez 21

22. Why not a 3-envelope system?
QUALITY
COST
IMPLEMEN-
TATION
SCHEDULE
(of Technical Proposal)
Primary Factor of
Reference and
Consideration
(Financial Component)
Maybe subject to limited
negotiation and
dependent on the
preferred Quality
specifications and
contending proximate
timeline
(Timeline)
Second Factor, maybe
subject to limited
negotiation, dependent
on preferred
specification of Quality
Quality Hilario P. Martinez 22

23. The Most Advantageous Bid is ≠ to the
Best Three
the
Higher,
the
Better
BEST TECHNICAL
PROPOSAL
the
Lower,
the
Better
BEST FINANCIAL
PROPOSAL
the
Shorter,
the
Better
BEST SCHEDULE
PROPOSAL
Multi-Level Hilario P. Martinez 23

24. Instituting a Quality-Bias Public
Bidding in a 3-Envelope System
Timeline
Proposal
Bid Criteria
and
Evaluation
Templates
Technical
Price
Time
The greater weight for “Technical
Proposal” indicating preference to
QUALITY in relation to Cost and
Timeline of a Tender Bid
NOTE:
Quality Hilario P. Martinez 24

25. Criteria for Bid Ratio Selection
Hilario P. Martinez 25
Project Concept requires the
application of the latest technology/
processes
Project Concept provides the
greatest magnitude of multiple-
sectoral beneficiaries
Project Concept requires the use of
appropriate technology /processes
and benefits selected sectors only
Two-
Envelope
Three-
EnvelopeS i g n i f i c a n c e

26. INTRODUCING A MULTIPLE-LEVEL
SCHEME TO DEFINE A SET OF
SPECIFICATIONS INTO A LOGICAL SET OF
Hilario P. Martinez 26

27. The Multiple-Level Project
Specification / Criteria
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
- - - > MACRO
--->
MICRO
D
E
T
A
I
L
E
D
 MINIMUM OF 4 LEVELS
 MAXIMUM OF 7
Multi-Level Hilario P. Martinez 27
APPLICABLE TO
ALL COMPONENTS
OF A TENDER BID

28. The Logic of
a Multiple
Level
Criteria
Requires the Proponent
to undertake serious
and comprehensive
research on target
project design.
Forces the Proponent to
be very detailed in
project specification.
Exact pressure on
interested contractors
/bidders to emphasize
on quality in formulating
their proposed project
design/solution
The same logic applies to other
criteria of the project design
(which may range from five [5] to
ten [10] sets of criteria)
NOTE : 1 - Other sub-criteria not presented in detail due to limited space; 2 – Nesting of
criteria level altered to save on space for clarity of illustration
Multi-Level Hilario P. Martinez 28

29. Exploding
the
Details of
Criteria
for a
Multi-
Level
Scheme
Multi-Level Hilario P. Martinez 29
100% 100% 100% 100% 100% 100% 100%

30. Pro-forma for Criteria Set in a
Multi-Level Environment
Multi-Level Hilario P. Martinez 30

31. Assignment of Points per Level
Multi-level Hilario P. Martinez 31

32. Prospective Weights of Criteria in a Multiple-
Level Scheme for a 2-Envelope Bidding System
(in percentages per level)
Rating Sample for Technical Rating Sample for Financial
Multi-Level Hilario P. Martinez 32
CRITERIACRITERIA
CRITERIACRITERIA

33. Weighted Value of Criteria of a Two-
Envelope Bidding in a Multi-Level System
100 100 100 100 100
Multi-Level Hilario P. Martinez 33
CRITERIACRITERIA
CRITERIACRITERIA

34. Prospective Weights of Criteria in a Multiple-
Level Scheme for a 3-Envelope Bidding System
(in percentages per level)
TECHNICAL FINANCIAL T I M E
1 0 0 %Level 1:
Multi-Level Hilario P. Martinez 34
CRITERIACRITERIA
CRITERIA
CRITERIA

35. Weighted Value of Criteria of a Three-
Envelope Bidding in a Multi-Level System
100 100 100 100 100
Multi-Llev Hilario P. Martinez 35
CRITERIACRITERIA
CRITERIACRITERIA

36. TECHNICAL EVALUATION OF
QUALIFIED TENDER BIDS
Evaluation Hilario P. Martinez 36

37. The Multiple-Level Technical
Evaluation System (Roll-up Scoring)
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
= 100%
= 100%
= 100%
= 100%
= 100%
= 100%
100% =
Evaluation Hilario P. Martinez 37

38. Point Scoring System
(Applicable to any set of Criteria and to all Levels)
Fixed Score Points Relative Scoring
CRITERIA Rating:
The higher, the better
The lower, the better
The faster, the better
Benchmark = Highest Score
= 100%
Vendor 1 = Offer 1
Vendor 2 = Offer 2
· · ·
Vendor n = Offer n
Vendor Score =
Vendor Offer
Benchmark
Proponent Prescribed Calibration
(arranged by ascending/descending order):
Score 1 = Range 1 to Range 2
Score 2 = Range 3 to Range 4
Score 3 = Range 5 to Range 6
Score 4 = Range 7 to Range 8
Score 5 = Range 9 to Range 10
Highest Score = not greater than 100%
CRITERIA Rating:
Vendor’s Offer Score is
dependent on recognized/
respected Standard
Bidder Response
Evaluation Hilario P. Martinez 38

39. Bid Passing Rates for 2-Envelope
Evaluation Hilario P. Martinez 39
&
&
&
Ratio
Mid-Rate/Bid
Component
Passing
Rate

40. Bid Passing Rate for 3-Envelope
Evaluation Hilario P. Martinez 40
Ratio
Mid-Rate/Bid
Component
Passing
Rate

41. ENSURING
So what is the
Integrity make-up
of the Agency for?
Zones of Probabilities
Evaluation Hilario P. Martinez 41
FAIL ZONE PASS ZONE
0 50 85 100
FAIL ZONE PASS ZONE
0 50 85 100
NIL
PROBABILITY
ZONE
= Range of Normal Probabilities
= Range of Total Scores for
Candidate-Winning Bid/s
51 to 85

42. Probabilities for Tender Bids
Evaluation Hilario P. Martinez 42

43. Ranges of
Normal
Probabilities
of Results in a
Two-Envelope
System of
Public Bidding
Evaluation Hilario P. Martinez 43
LEGEND:
TP – Technical Proposal
FP – Financial Proposal
T – Total
Note:
• 15% Improbability factor have
been deducted from the
highest score for Technical and
Financial Proposals, resp.
• Subsequent scores are in
ranges (for simplicity of
illustration only) - WINNING SCORES ZONE

44. Ranges of
Normal
Probabilities
of Results in
a 3-Envelope
System of
Public
Bidding
Evaluation Hilario P. Martinez 44
LEGEND:
TP – Technical Proposal FP – Financial Proposal
TL – Time Line T – Total
Note:
• 15% Improbability factor have
been deducted from highest
score for Technical, Financial
and Timeline Proposals, resp.
• Subsequent scores are in
ranges (for simplicity of
illustration only)
- WINNING SCORES ZONE

45. Technical Evaluation Team
Evaluation Hilario P. Martinez 45
T.O.R.
Agency
Cost
Estimate
C O M M I T T E E
TENDER BIDS
Valid/Accepted
SCORE SHEETS
OFFICIAL

46. DETERMINING THE MOST
RESPONSIVE BID
Responsive Bid Hilario P. Martinez 46

47. Resultant Technical Evaluation
Committee Report
TEC report to
present the
score profile
of all
evaluated
BIDS
Report should also highlight:
Bid with the
highest
score in
Quality
(Best
Technical)
Bid with
highest
score in
Time
(Shortest
Timeline)
Bid with
highest
score in Cost
(Least
Project Cost)
Responsive Bid Hilario P. Martinez 47

48. Final Bidding Results
Responsive Bid Hilario P. Martinez 48

49. BID
with the
Highest Evaluated
SCORE
Process-based Conclusion
Responsive Bid Hilario P. Martinez 49

50. Defining a Responsive Contract
Responsive Bid Hilario P. Martinez 50
EVALUATION
WINNING
CONTRACTING PARTIES:
• Proponent Agency
• Winning Bidder

51. Assured Consistency and Compliance
Responsive Bid Hilario P. Martinez 51

52. PUBLIC SERVANTS
Complementary Measure:
Awareness of Assured
Apprehension and Penalty
Responsive Bid Hilario P. Martinez 52