26 October 2010

Draft Guidance Note

For use of Standard Bidding Documents – Goods

(Value above G$5 M)

INTRODUCTION

This Guidance Note is intended to be used with the Standard Bidding Documents – Goods and
Related Services (value above G$5 M) (SBD -- G), issued by the NPTA in [October, 2010] for
use in bidding proceedings for procurement of goods contracts. For the purposes of
understanding the notion of “goods” in order to determine whether this SBD applies, procuring
entities should refer the definition of the term “goods” in the Procurement Act, 2003 (hereinafter,
“the Act”). This SBD -- G may be used in the open and the restricted variants of bidding.

The use of the bidding method of procurement is mandated by the Procurement Act (sec. 25),
which provides that bidding is the method normally to be used, unless some other method of
procurement is justified in accordance with the conditions for use of those other methods. This
SBD -- G (value above G$5 M) is intended for use of the bidding method for the procurement of
supply contracts larger than the small supply contracts for which the SBD — Small Goods (SBD
— Goods 0.8 to 5 M -- shopping) may be more appropriate.

The SBD -- G is a standard document and should not be modified. Procuring entities should
only fill in the information specific to a particular procurement in the blank spaces indicated in
the document.

How standard bidding documents work

It is important to understand from the outset how the information provided in the bidding
documents is arranged when standard bidding documents (SBD’s) are being used. As described
below, some parts of the SBD documentation are always the same (i.e., always contain the same
text), while certain other parts of the SBD’s contain slots where information particular to each
procurement. The Instructions to Bidders (ITB) are standard, which means that the ITB
document does not change from one proceeding to the next; the ITB always remains the same.
Certain specific aspects of the ITB that do need to be filled in with information specific to each
procurement proceeding are entered in a form referred to as the Bid Data Sheet (BDS). Along
the same lines, the General Conditions of Contract (GCC) contain basic contract conditions that
remain the same from one procurement transaction to the next, while specific aspects that
potentially do change from one case to the next are stipulated in the Special Conditions of
Contract (SCC).
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A. PURPOSE OF STANDARD BIDDING DOCUMENTS

The purpose of the bidding documents includes:

(a) To provide bidders with the description of the goods being procured so as to enable them
to submit responsive and competitive quotations;

(b) To solicit bids;

(c) To inform bidders of the rules applicable to the bidding process, including the
requirements applicable to the submission of bids, any applicable qualification and
eligibility requirements, and the criteria to be used in evaluating and ranking bids for the
purposes of determining the winner;

(d) To inform bidders of the applicable contract conditions.

It should be noted that the preparation of the bidding documents may be subject to approval
under the applicable rules and procedures.

B. INVITATION FOR BIDS (IFB) (Annex 1)

The Invitation for Bids (IFB) document as set forth in the SBD -- G package is the invitation
document used by the procuring entity to solicit bids for the works being procured. Highlighted
below are its key aspects and purposes, and considerations that the procuring entity may need to
take into account in filling in the IFB form in actual proceedings.

Identifier

On the upper right-hand corner, the procuring entity should fill in the date of the Invitation,
which, in the case of publication, should be the same date as the date of publication.

Each IFB should be assigned a unique identification number, which should correspond to the
identification number of the procurement proceeding to which the IFB corresponds. That
number should also be filled in.

Para. (1)

The name of the procuring entity should be inserted here, along with a brief description of the
goods to be procured, and their quantity.

Para. (2)

Here the procuring entity should fill in the required timing of the delivery.
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Para. (3)

Here the fee being charged for the bidding documents – if any is charged – should be indicated,
along with the coordinates of the procuring entity where the bidding documents may be obtained.
Any fee charged should be kept to a minimum, reflecting only the cost of reproduction and
distribution of the bidding documents.

Para. (4)

The deadline date and time, and place for submission of bids should be filled in here, in
accordance with sec. 35 of the Act. In setting the deadline, the procuring entity should ensure
that bidders are provided sufficient time for the preparation and submission of bids, taking into
account that procurement of larger works is involved.

If the procuring entity decides to impose a bid-security requirement, the required amount of the
security should be mentioned in para. (4). An alternative reference to a bid securing declaration
is mentioned in footnote 1, in the event that the procuring entity would require bidders to sign a
bid-securing declaration instead of requiring them to submit bid securities. It should be noted
that the imposition of a requirement that bidders sign a bid securing declaration is an alternative
to a bid security requirement. The purpose of the bid securing declaration is to allow procuring
entities to have some assurance that bidders will be serious about their obligations related to
participation in procurement proceeding, without imposing a bid security requirement that may
pose an obstacle to participation and curtail competition. Thus, bidders should not be required to
submit a signed bid securing declaration and a bid security.

The form for the bid securing declaration is provided in Annex 11a, and the form for the bid
security is in annex 11b.

Para. (5)

Pursuant to sec. 35 of the Act, the procuring entity should indicate the minimum validity period
of bids.

Para. (6)

Here the procuring entity should specify the date, time, and location of the bid-opening
ceremony. In line with best practice, bids should be opened immediately upon expiry of the
deadline for submission of bids (or at most an hour or so later if necessary for logistical reasons).

Para. (6) also give notice that participating bidders are allowed to attend the bid opening
ceremony, in line with the Act (sec. 38(2)).

C. INSTRUCTIONS TO BIDDERS (annex 2)

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As noted in the Introduction to these Guidance Notes, the Instructions to Bidders (ITB) are a
standard bidding document, in that the ITB do not change from one procurement proceeding to
the next. Details with respect to certain issues addressed in the ITB are specified in the Bid Data
Sheet (BDS).

Para. 1 (Description of the Procurement)

Para. 1 refers to the identification of the procuring entity in the BDS, and to the description of the
goods being procured set forth in the Schedule of Requirements.

The procuring entity should specify the required delivery date(s) in the Schedule of
Requirements.

Para. (2) (Eligibility and qualifications of Bidders)

Para. 2.1 requires the procuring entity to list in the corresponding slot in the BDS the required
eligibility and qualification requirements. This provision lists various requirements prerequisite
to eligibility for contract award. It should be noted that the basic parameters for setting
eligibility and qualification requirements are set in the Act (sec. 5).

In accordance with the Act (in particular sec. 5(1) and (2)), the procuring entity should specify in
the Qualification Information Form (Annex No. 8), the qualification information and supporting
document required to be submitted by bidders.

Para. (3) (clarification of bidding documents)

According to the Act (sec. 33.(1)), the procuring entity is responsible for responding to requests
for clarification of the bidding documents, in time for bidders to take the clarification into
account in preparing and submitting their bids. That includes having to circulate the response to
all participating bidders (to whom the procuring entity provided the bidding documents for the
proceedings). The ITB provide a generous ten day rule, which means that the procuring entity
will respond to requests for clarification received up to ten days prior to the deadline for
submission of bids.

Para. (6) (bid price)

In the BDS slot corresponding to para. (6), the procuring entity should specify the basis for
pricing of bids, to ensure that bids reflect the cost components involved. This may be done, for
example, by reference to one or the other of the INCOTERMS.

Para. (6.2) provides that prices are to be fixed for the duration of the contract.

Para. (8) (Bid Security or Bid Securing Declaration)

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This ITB provision requires that bidders submit a bid security. The details of the bid security
requirement are to be specified by the procuring entity in the corresponding slot in the BDS.
Alternatively, is so indicated in the BDS, the procuring entity may require bidders to submit,
instead of a bid security, a signed bid securing declaration.

Para. (9) (bid-validity period)

The procuring entity should indicate in the BDS the required minimum bid-validity period.

Para. (10) (format, signing and submission of bid)

If the procuring entity requires more than two copies of the bid (to be submitted (in addition to
the original), as provided in ITB 10.1, that should be indicated in the corresponding slot in the
BDS. Otherwise that row in the BDS should be deleted.

Para. (10.4) contains a reference to the date and time for the bid opening ceremony, which
should be indicated by the bidder on the outer and inner envelops containing the bid. The date
and time should be specified in the BDS.

Para. (11) (deadline for submission of bids)

The procuring entity should indicate in the corresponding BDS slot the deadline date and time
for the submission of bids, pursuant to the Act (sec. 35 (1)).

Para. (12) (modifications and withdrawal of bids)

This provision explain the consequences of a withdrawal or modification of a bid by the bidder
during the bid validity period (see para. (21.4), which contains a reference to the bid validity
period specified in the BDS (sec. 9)).

Para. (13) (opening of bids)

In the BDS slot corresponding to para. (13.1), the procuring entity should indicate the date, time
and place for the opening of bids. In accordance with the Act (sec. 38(1)), the time for bid
opening should coincide with the deadline for submission of bids.

Para. (14) (evaluation of bids)

This is a very important part of the ITB because it describes certain key steps and principles of
the evaluation of bids. Those include, in particular, the procedure for clarification of bids (but
without negotiation of the price or other substantive aspects, para. (14.1)), the core notion of the
“substantial responsiveness” of bids (para. (14.2)), and the related procedure for dealing with
minor deviations in bids (para. (14.3)).

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The basic principle governing the evaluation of bids, i.e., that bids that are “substantially
responsive” to the requirements in the bidding documents may be considered for award, is an
approach referred to in the Act (sec. 39(4)(c)).

There are several key steps to be taken by the procuring entity here, including:

(a) in the preliminary examination of bids (before the detailed evaluation of bids), the
procuring entity identifies the bids that are substantially responsive;

(b) bids that may contain some “minor deviations” may be deemed “substantially
responsive” (i.e., no “material deviations”).

Para. (14.4), in line with the corresponding provision in the Act (sec. 39(4)(b)), provides the
procuring entity with the task of rectifying arithmetical errors appearing on the face of a bid. It
should be noted that, while the procuring entity does not make such corrections in consultation
with the concerned bidder, it must notify the concerned bidder as he must be given the
opportunity to accept the correction (or reject it, under possible pain of enforcement of the Bid
Securing Declaration, if applicable).

Para. (15) (confidentiality)

This provision affirms the principle of confidentiality in the bid evaluation process, including the
rule that bidders should not try to exert influence on the bid evaluation and award.

Para. (16) (award criteria)

The procuring entity should specify the applicable bid evaluation criteria in the bidding
documents (in the Evaluation and Qualification Criteria form) para. (16.1), in line with the
notion that the contract should be awarded to the “lowest evaluated bid”.

In the Evaluation and Qualification Criteria form, price preference in accordance with the Act
(sec. 39.6) is to be specified, as to its applicability and, if applicable, the scope and rate, and
other information that should be disclosed to bidders concerning quantifcation of minor
deviations in monetary terms, and quantification of any other evaluation criteria in monetary
terms .

Para. (17) (variations in quantity)

The BDS should indicate the possible range of quantity variation that the procuring entity may
require at the time of entry into effect of the contract.

Para. (18) (procuring entity’s right to accept or reject bids)

The purpose of para. (18) is to inform bidders that the procuring entity retains the right to reject
any and all bids, and also to cancel the procurement proceedings, steps that are authorized by the

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Act (sec. 40). It is important for the procuring entity to bear in mind the distinction between
rejection of all bids and cancellation of the procurement proceedings. In the case of rejection of
all bids, the fact patterns is that no responsive bids were submitted, including the possibility that
there was no bid priced within the available budget. By contrast, cancellation of the procurement
proceedings is done on public interest grounds not based on the responsiveness of bids or other
grounds of that nature, but rather on extraneous circumstances such as the loss of the necessary
budget allocation or a change in the programmatic or operational needs of the public purchaser.

It should be noted that the Act requires the procuring entity to respond to a request from a bidder
as to the grounds for the rejection of all bids or the cancellation of the procurement proceeding.

Para. (19) (notification of award)

The procuring entity has certain obligatory steps to take regarding notification of the award
decision and formation of the contract with the winning bidder. Those steps, which are outlined
in para. (19), and flow from the relevant provisions in the Act (sec. 42), involve notification to
the successful bidder, contract signature procedures (and performance security submission), as
well as notification to the unsuccessful bidders.

Para. (20) (signing of contract and performance security)

In the BDS slot corresponding to ITB para. (20.2), the procuring entity should specify whether
or not any performance security requirement is applicable, and, if so, the amount of the security,
and other requirements, including its form and validity period. Procuring entities should note
that there are many cases of low-value procurement in which imposition of a performance
security is not necessarily warranted.

Para. (21) (settlement of disputes)

The procuring entity uses this provision in the ITB and the BDS to specify the applicable means
of contract dispute settlement.

Para. (22) (corrupt and fraudulent practices)

This provision establishes the sanction of rejection of a bid and debarment on the grounds of
misconduct in the competition for the awrd of the procurement contract.

Para. 23 (compliance with fiscal obligations)

This provision in the ITB requires bidders to submit certificates of compliance with GRA and
NIS obligations. This requirement should also mentioned in the BDS (5.1).

Para. 24 (defects liability)

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The procuring entity should indicate in the corresponding BDS slot the duration of the defects
liability period (also known in practice by terms such as “warranty” in the context of
procurement of goods). This should also be clearly indicated in the procurement contract
concluded with the winning bidder.

D. BID DATA SHEET (annex 3)

As noted above, the Bid Data Sheet (BDS) is the attachment to the Instructions to Bidders (ITB)
where the procuring entity should fill in various aspects of the ITB that are specific to the
particular procurement proceeding at hand. Thus, the content of the BDS is variable from one
procurement proceeding to the next. The information to be specified has been noted above, in
the notes on the ITB, and is also indicated in the SBD-W in the blank form of the BDS.

E. GENERAL CONDITIONS OF CONTRACT (annex 4)

Clause (1) (definitions)

In the SCC slot corresponding to GCC clause (1.1(c)), the SCC should describe the goods being
procured under the contract.

The procuring entity should be identified in the SCC slot corresponding to GCC clause (1.1(f)).

Clause (1) introduces the acronyms “GCC” (referring to the term “General Conditions of
Contract”, and “SCC” (referring to the term “Special Conditions of Contract”.

Clause (3) (performance security)

The corresponding slot in the SCC is to specify whether a performance security is required to be
submitted by the winning bidder, and if so, the amount and acceptable forms of performance
security required to be submitted.

The SCC slot corresponding to clause (3) allows the procuring entity to tailor the duration of the
validity period of the performance security to the applicable circumstances. It should be ensured
that there is no conflict between any validity period mentioned in the SCC and in the form of the
performance security in the bidding documents.

Clause (4) (packing)

The procuring entity should use the corresponding slot in the SCC to specify any particular
packing and marking requirements.

Clause (5) (delivery, transportation)

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This provision calls for the SCC to specify the required delivery schedule, and refers to the
destination point named in the Schedule of Requirements. The SCC should also specify
documentation to be provided by the supplier, and the transportation related costs to be included
in the contract price, including the INCOTERM that may be specified.

Clause (6) (payment)

Clause (6.1) calls on the corresponding slot in the SCC to stipulate the form and timetable of
payment. In the SCC slot corresponding to clause (6.2), the interest rate applicable to late
payment should be specified.

Clause (7) (price)

The GCC require pricing on a fixed price basis; no price revision clause or formula is
contemplated here.

Clause (9) (delays in supplier’s performance and liquidated damages)

This provision reefers to the delivery time periods established in the Schedule of Requirements
and, in clause (9.2), calls on the liquidated damages amount, including the overall ceiling, to be
specified in the corresponding SCC slot.

Clause 11 (settlement of disputes)

This provision establishes a 21 day period during which the parties are to attempt to settle any
contract implementation dispute amicably, by negotiation. In accordance with clause (11.2), the
parties may opt for arbitration as the means for settlement of contract disputes – either by
specifying arbitration in the corresponding SCC slot, or agreeing to go the arbitration route at the
time a dispute arises. In the absence of an arbitration clause in the procurement contract (i.e., in
the SCC), or a separate arbitration agreement, adversarial settlement of contract disputes would
be through the courts.

Clause 13 (formal communication)

Clause 13.1 provides the general statement in the GCC that formal communication must be in
writing. . The parties should bear in mind that under legislation of Guyana (E-Commerce Bill
prepared by the Ministry of Tourism, Industry and Commerce ?) may be a legislatively
established principle that information generated, stored or transmitted in electronic form should
not be denied validity or evidential value on the sole ground of its electronic form and that
contract parties may agree to use such means of communication (by fax or by e-mail, or by any
means that leaves a record of the communication and its content).

Clause 14 (taxes and duties)

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While affirming the tax responsibility of the supplier, clause 14.1contains a proviso to the effect
that the allocation of responsibility for taxes, duties, etc. levied in Guyana may be affected by the
INCOTERM stipulated to be applicable as per the SCC.

Clause 15 (retention)

Any retention to be withheld from payments must be defined in the SCC..F.

G. SPECIAL CONDITIONS OF CONTRACT (annex 5)

As noted above, the Special Conditions of Contract (SCC) is the attachment to the General
Conditions of Contract (GCC) where the procuring entity should fill in various aspects of the
GCC that are specific to the particular procurement proceeding at hand. Thus, the content of the
SCC is to one extent or another variable from one procurement proceeding to the next. The
information to be specified has been noted above, in the notes on the GCC, and is also indicated
in the SBD--SG in the blank form of the SCC.

H. SCHEDULE OF REQUIREMENTS (annex 6)

In this portion of the bidding documents, the procuring entity should list and provide a brief
description of the goods that it is seeking to procure. The Schedule of Requirements also has
columns in which the procuring entity should indicate the required quantities and delivery
schedule. As noted in the instruction at the top of the form, the procuring entity should indicate
the date from which the delivery period begins to run.

It should be noted that the procuring entity may list separate items or lots in the Schedule of
Requirements.

I. TECHNICAL SPECIFICATIONS (annex 7)

It should be noted that the formulation of the description of the goods that are the subject of the
procurement proceeding, as well as the formulation of any technical specifications included in
the bidding documents, are subject to the rules concerning description of goods in the Act (sec.
13). That provision calls for the use of formulations that are based on objective technical and
quality characteristics and to avoid unnecessarily narrowing the scope of competition, and the
use of standardized features, requirements, symbols and terminology relating to technical and
quality characteristics. The notes in Annex 7 are for the use of the procuring entity in drawing
up technical specifications and should not be retained in the bidding documents provided to
bidders.

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J. QUALIFICATION INFORMATION (annex 8a)

This is the form on which bidders should provide various information required by the procuring
entity in order to ascertain the eligibility and the qualifications of a bidder submitting a bid. The
information required from bidders pursuant to Annex 8 complements and supplements the
information referred to in sec. 2.1 of the ITB (as specified in the BDS).

Some of the information to be specified in Annex 8 will be measured against the minimum levels
specified in the BDS corresponding to ITB para. 2.1 (in particular, minimum annual turnover).

Procuring entities should note that the setting and assessment of eligibility and qualification
requirements for bidders are governed by the provisions of the Act (sec. 5 and 6). It is important
for procuring entities, in setting qualification requirements, to have in mind that those
qualification requirements should be appropriately proportional to the nature, complexity and
value of the contract being awarded. Excessive qualification requirements should not be applied,
as that curtails competition and hinders participation by small companies that may be perfectly
qualified to perform the contract in question.

K. SUPPLIER’S BID (annex 9a) AND PRICE SCHEDULE (annex 9b)

The Bid Form is the form on which each bidder formally states and signs his commitment, if
selected for contract award, to provide the goods that are the subject of the procurement, at the
price state in the respective bidder’s bid

The initial portion of the form, entitled “Description of Goods”, should be filled in by the
procuring entity before distribution of the bidding documents to bidders.

The Price Schedule (annex 9b) is the form on which the bidders provides a breakdown of its bid
price.

L. CONTRACT FORM (annex 10)

The Contract for Goods Form is the contract form the successful bidder will sign following
receipt of the letter of acceptance from the procuring entity.

M. BID SECURITY (annex 11a) BID SECURING DECLARATION (annex 11b)

Annex 11a sets forth the essential form and content of the bid security to be provided by bidders
pursuant to ITB 8.1 and the corresponding BDS stipulation.

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With a view to facilitating wider participation by small businesses and lowering transaction costs
and bid prices, this SBD—G provides, as a possible alternative to the imposition of a bid security
requirement, if so provided in the BDS (para. 8.1), the use of a Bid Securing Declaration, which
bidders would be required to sign and submit with their bids. In para. 2 of the form, the duration
of the debarment period should be filled in by the procuring entity as part of the bidding
document package provided to bidders so that they sign the Declaration knowing the duration of
the debarment period to which it refers.

N. MANUFACTURER’S AUTHORIZATION (annex 12)

In view of the relatively larger procurement for which the SBD – G is intended, it reflects a
possible requirement that each bidder submit a manufacturer’s authorization to the extent that the
bidder is not the manufacturer of the items proposed to be supplied (see BDS para. 5.1).

O. PERFORMANCE SECURITY (annex 13)

If a performance security is required to be provided by the winning bidder, the bidding

documents should include the form for the performance guarantee to be furnished.

P. LETTER OF ACCEPTANCE (annex 14)

This form is included in order to inform bidders of the type of letter of acceptance that will be
sent to the winning bidder, in accordance with the Act (sec. 42(1)). Pursuant to the requirement
in the Act (sec. 42(2)(a)) that the contract should be signed within a reasonable period of time
after issuance of the Letter of Acceptance, it is envisaged that the Letter of Acceptance, at the
time the procuring entity issues it, will indicate a specific deadline date for signature of the
contract by the winning bidder. If a performance security requirement is applicable, the letter of
acceptance should contain the reference to the requirement in the form as provided in the bidding
documents.

Q. POWER OF ATTORNEY (annex 15)

Annex 14 provides a form for the Power of Attorney required to be submitted by each bidder to
attest to the signature authority of the person signing the respective bid.

P. EVALUATION AND QUALIFICATION CRITERIA (annex …)

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This form lists various types of criteria to be applied in the evaluation and comparison of bids.
The procuring entity must indicate the weight to be be accorded to the various criteria by
specifying the maximum points to be accorded for each of the criteria. The procuring entity
must ensure that each and every one of the criteria to be applied in the evaluation of bids is listed
on this form as included in the bidding documents provided to bidders.

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