22 September 2010

Draft Guidance Note

For use of Standard Bidding Documents

(Works)

INTRODUCTION

This Guidance Note is intended to be used with the Standard Bidding Documents –Works
(SBD-W), issued by the NPTA in [April, 2009] for use in bidding proceedings for procurement
of works. For the purposes of understanding the notion of “works” in order to determine
whether this SBD applies, procuring entities should refer the definition of the term
“construction” in the Procurement Act, 2003 (hereinafter, “the Act”). This SBD-W may be used
in the open and the restricted variants of bidding, when the estimated value of the procurement
exceeds G $5 million.

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-W is intended for use of the bidding method for the procurement of larger works (above G
$5 million) than the smaller works for which the use of the bidding method with the SBD—
Smaller Works (SBD—SW) may be more appropriate (above G $800,000 up to G $5 million).
[add reference to SBD for RFQ for minor works].

This SBD-W is meant to be a versatile instrument, usable for contracting on a unit price
(admeasurement) basis, as well as on a lump sum basis. It may well be that many works in this
size range of contracts would be contracted on a unit-price basis. Nevertheless, the lump-sum
price option is provided for use in case that may be appropriate in some instances.

Ultimately, the choice between the lump sum and the unit price approach is dictated by the
nature of the object of the works being procured. The unit price approach is generally indicated
when the quantities of work and materials required to execute the works cannot be estimated in
advance, and possible design variations that may be needed cannot be predicted with sufficient
precision to bid on the basis of a lump sum price, or whether there is sufficient uncertainty such
that a unit-price approach provides a more realistic basis for pricing bids. Examples of works
for which the lump sum option is likely to be appropriate include building construction where
site conditions are well known, pipe-laying, power transmission towers, and recurrent
construction of small structures (e.g., bus shelters). In lump sum contracts, the concept of priced
“activity schedules” has been included, to enable payments to be made as “activities” or stages of
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the works are completed. It is also possible that payments would be made on the basis of
percentage completion of each activity.

The SBD--W 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).

A. PURPOSE OF STANDARD BIDDING DOCUMENTS

The purpose of the bidding documents includes:

(a) To provide bidders with the description of the works 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.

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

The Invitation for Bids (IFB) document as set forth in the SBD--W 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

In the first portion, at the top of the IFB, 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.
The source of financing for the procurement should also be identified.

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
works and their location.

Para. (2)

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.

Para. (3)

The date, 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. The amount of the required bid security should also be
entered into the indicated blank space.

Para. (4)

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

Para. (5)

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).

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C. INSTRUCTIONS TO BIDDERS (annex 2)

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) (Scope of Works)

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

Para. (2) (Eligible Bidders)

This provision lists various requirements prerequisite to eligibility for contract award.

Para. (3) (qualifications of bidders)

Para. (3.1) to the Qualification Information form (annex 9), in which bidders are instructed to
enter the requested qualification information.Para. (3.2) outlines basic requirements applicable to
bidders in the form of a joint venture or other such grouping or association.

Para. (3.3) is the place where the procuring entity enters the required volume of work the bidder
has had to have performed (3.3(a)).

Para. (6) (site visit)

The procuring entity should ensure that bidders have reasonable access for conducting site visits.
The pre-bid conference referred to in para. (8.2) should be scheduled once bidders have had an
opportunity to conduct site visits.

Para. (7) (contents of bidding documents)

This is a checklist of the required contents of the bidding documents useful not only for bidders,
but also for procuring entities, who can use it to make sure that the bidding documents provided
to bidders are complete. .

Para. (8) (clarification of bidding documents)

According to the Act (art. 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 seven day rule, which means that the procuring
entity will respond to requests for clarification received up to seven days prior to the deadline for
submission of bids.
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The reference to a pre-bid meeting in para. (8.2) is included in ITB in accordance with the Act,
which foresees such conferences (sec. 33.3). If such a conference is being held, details are to be
provided by the procuring entity in the BDS.

Para. (12) (bid price)

At various points in this paragraph, references to the Bill of Quantities should be replaced by the
procuring entity by reference to the Activity Schedule.

Para. (14) (Validity period of bids)

The procuring entity should fill in the duration of the required bid validity period in the BDS.

Para. 15 (bid security)

The Act (sec. 37) regulates the use of bid securities In para. (15.2) of the SBD, the procuring
entity should specify in the BDS the required amount of the bid security.

Para. (16) (alternative bids)

Para. (16.1) establishes the rule that alternative bids will be considered only if the submission of
alternative bids is permitted by the bidding documents. It also establishes procedures for
evaluating such bids.

Para. (19) (deadline for submission of bids)

The procuring entity sets the deadline for submission of bids, pursuant to the Act (sec. 35 (1)).

Para. (21) (modifications and withdrawal of bids)

This provision explains 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. 14.1)).

Para. (22) (opening of bids)

In the BDS slot corresponding to ITB para. (22.1), the procuring entity should indicate the time,
date and place of the bid opening ceremony.

Para. (23) (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. (23.2)).
In fact, para. (23.3) authorizes rejection of a bid in such cases.

Para. (23.2) draws the important distinction that the procuring entity may, in writing only,
request a bidder to clarify its bid.
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Para. (24) (clarification of bids)

The bid clarification procedure referred to in para. (23.2) is elaborated in para. (24). That
clarification process should not involve negotiation or changing of the price or substance of the
bid.

Para. (25) (preliminary examination of bids)

The provision affirms a 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. This 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 contain some “minor deviations” may be deemed “substantially responsive”
(i.e., no “material deviations”);

(c) para. (25.2) sets forth a definition of the term “material deviation”.

Para. (26) (correction of arithmetical errors)

Para. (26), 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.

Para. (27) (evaluation and comparison of bids)

This provision affirms, in para. (27.1), that only bids deemed to be substantially responsive to the
requirements in the bidding documents may be evaluated in detail and considered for award. 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 forfeiture of the bid
security).

It should be noted that the Act (sec. 41) prohibits negotiation in the context of bidding
proceedings. The exception would be in the first stage of the two-stage tendering method (two-
stage bidding).

Para. (28) (award criteria)

Para. (28.1) establishes the principle that the award is to be made to the bidder that submitted the
“lowest evaluated bid”.

Para. (27) (evaluation and comparison of bids)

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Para. (27.3) establishes the important rule that additional positive credit will not be afforded to
bids that offer features and performance beyond that required by the bidding documents – unless
the bidding documents provide that such additional features or performance are being solicited
and will be assessed in the evaluation of bids.

Para. (28) (award criteria)

This provision affirm that the procuring entity will identify the lowest evaluated bid and that
award will be made to the bidder that submitted that bid.

Para. (29) (procuring entity’s right to accept or reject bids)

The purpose of para. (29) 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
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.
The provision of such information is referred to in para. 29.2.

Para. (30) (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. (30), 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. 30.4 affirms the right of an unsuiccessful bidder to request and obtain a debriefing from the
procuring entity to obtain an explanation of the grounds for the rejection of its bid. The
procuring entty should respond in writing, and without delay, to such a request.

Para. (32) (performance security)

Para. (32.1) refers to specifying in the BDS the amount of the performance security, if one is
required by the bidding documents.

Para. (34) (penalties)

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This provision in the ITB refers to the imposition of liquidated damages liability for delay in
contract implementation. That issue is dealt with principally in the General Conditions of
Contract (GCC) and in the Special Conditions of Contract (SCC).

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)

The procuiring entity must fill in the start date in the SCC slot corresponding to the definition of
the term “Start Date”. Other terms the definitions of which refer to the SCC include “Defects
Correction Period”, “Employer”, “Expected Period of Completion”, and “Works”.

Clause (3) (language and Law)

The corresponding BDS slot for ITB 3.1 would be used to designate applicable law and language
(which typically would be the laws of Guyana, and the English language).

Clause (16) (investigation and use of site)

In the SCC slot corresponding to clause 16.2, there is to be an indication of the time period for
giving the contractor access to the site.

Clause (20) (work execution schedule)

In clauses. (20.1) to (20.3), reference should be included in the corresponding slots in the SCC,
concerning the time schedule for execution of the works.

Clause (23 and 25.1) (identifying and correcting defects)

The duration of the defects correction period (i.e., defects liability period) should be specified in
the corresponding SCC slot.

Clause 30 (payments)

In the SCC slot corresponding to GCC Clause (30.1), the interest rate applicable to payments
delays is to be specified.

Clause (32) (liquidated damages)

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The reference in clause (32.1) to the SCC concerns the rate and overall ceiling amount for
payment of liquidated damages for delay.

Clause (34) (mobilization or advance payment)

The SCC slot corresponding to GCC Clause (34.1) is for indicating if an advance payment is to
be paid and, if so, the amount and time period of the payment.

Clause (35) (performance security)

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

The SCC slot corresponding to clause (35.2) allows the procuring entity to tailor the duration of
the validity period of the performance security to the applicable circumstances.

Clause (40) (termination)

Clause (40.1(b)) should be specified in the SCC, concerning the duration of a suspension before
the right to terminate is triggered.

Clause (40.1(d)) should be specified in the SCC, concerning the duration of a payment delay
before the right to terminate is triggered.

Clause (40.1(g)) should be specified in the SCC, concerning the duration of a contractor’s delay
before the right to terminate is triggered.

Clause (41) (payment upon termination)

In the SCC slot corresponding to GCC Clause (41.1), the procuring entity should insert the
applicable percentage to be applied to the value of uncompleted work, as a way to be used to
calculate the extra costs to the procuring entity resulting from the termination.

F. 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 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-W in the blank
form of the SCC.

G. DRAWINGS AND OTHER TECHNICAL DESCRIPTIONS (annex 6)

In this portion of the bidding documents, the procuring entity should include the technical
specifications, plans and drawing describing the work to be carried out under the contract. The
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procuring entity should note that technical specifications, drawings and other descriptions should
be prepared in accordance with the relevant provision of 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.

H. BILL OF QUANTITIES (annex 7)

The notes in the SBD-W on the preparation of the Bill of Quantities are meant for use by the
procuring entity and are not intended to be retained in the bidding documents as provided to
bidders.

Reference is made in the notes (para. 3) to the possibility of the inclusion of Provisional Sums
that may be included pursuant to the direction of the procuring entity (e.g., to pay for
subcontractors nominated by the procuring entity). That note also directs the procuring entity,
when provisional sums are used, to indicate in the SCC the manner in which they will be used
and the person authorized to decide how they will be used.

I. TECHNICAL SPECIFICATIONS (annex 8)

As affirmed in the notes in Annex 8, technical specifications and other types of technical
descriptions of the works being procured should be formulated in a manner that fosters rather
than unnecessarily restricting competition, in line with the basic principles et down in the Act
(sec. 13). The notes in Annex 8 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.

J. QUALIFICATION INFORMATION (annex 9)

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 9 complements and supplements the
information referred to in sec. 3.1 of the ITB.

Some of the information to be specified in Annex 9 will be measured against the minimum levels
specified in the ITB (3.1) (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.

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Given the relatively larger size of the contracts for which this SBD-W is to be used, the
assessment of qualifications in such proceedings might be carried out using the prequalification
rather than the post-qualification method of assessing qualifications of bidders. In such a case, it
is during the prequalification proceedings that the qualifications and eligibility of all bidders are
assessed, and only bidders deemed qualified are permitted to solicit bids. Emphasis would
therefore not be placed on collection of qualification information with the submission of bids
since qualification assessment had been already applied at the outset of the proceedings.

K. CONTRACTOR’S BID (annex 10)

The Bid Form is the form on which each bidder formally states and signs his commitment, if
selected for contract award, to provide the works 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 the Works”, should be filled in by the
procuring entity before distribution of the bidding documents to bidders.

It should be noted that the Contractor’s Bid form contains a paragraph concerning the
appointment of an Adjudicator. That paragraph should not be retained where no Adjudicator is
appointed.

L. CONTRACT FORM (annex 11)

The Contract for Works Form is the contract form the successful bidder will sign following
receipt of the letter of acceptance from the procuring entity.. Also included in the package are a
Work Order form, to be used for ordering changed quantities of work under the contract (see
GCC clause 28.3 and 28.4), and a Settlement form, to be used for calculating progress payments.

M. BID SECURITY (annex 12)

Annex 12 provides a template for the issuance of bid securities, which reflects the relevant
provisions in the Act (sec.37). In addition, the template makes a specific reference to forfeiture
of the bid security in the case where a bidder refuses to accept the correction by the procuring
entity of an arithmetical error in the bid pursuant to the Act (sec.39(5)(b)).

The procuring entity should note that the required validity period of the bid security should be set
so as to extend beyond the expiry of the bid validity period (see ITB 15.1).

N. PERFORMANCE GUARANTEE (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.

O. BANK GUARANTEE FOR ADVANCE PAYMENT (annex 14)

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If an advance payment is being offered, the bidding documents should include the form for the
advance payment guarantee to be furnished as a condition for the advance payment to be made.

P. LETTER OF ACCEPTANCE (annex 15)

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 16)

Annex 16 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.

R. EVALUATION CRITERIA

On this form, the procuring entity should fill in the the number of points assigned to various
aspects of the required qualification profile. The form is to be used for determining which
bidders meets the minimum required qualification. The minimum required qualification score
must be indicated in the bidding documents.

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