Chapter 10

PUBLIC PROCUREMENT
Public procurement involves the following
 Rules: PPR 2008 (CPTU, IMED)
 Types: Goods, Services, SITC, EPC, Turnkey
 Purchase: Cash. DPM, Quotation, RFQ, LTM, OTM, ITM
 Tender Invitation: Who?
 Tender Document: STD
 Stage: 1-1, 1-2, 2-2
 BOQ: Organization, PWD, Market, etc
 Tender Evaluation: General / Commercial, Technical, Financial
 Bidder: Single, JV, Consortium
 Selection: SSS, FBS, LCS, QCBS
 TS, NOA, PG, Contract, Work Order à Execution

10.1 Parties in Procurement Process

• Employer: The person or body that commissions the work
• Client’s Representative: The person appointed by the Employer to liaise with the
Design Team and Project Manager.
• Adjudicator: The person who gives rulings on Employer – Contractor disputes and is
preferably a different person to the Project Manager.
• Contractor: The firm that has been contracted to execute the Works
• Subcontractor: A firm that has a contract with the main Contractor to provide labor,
materials or products.
• Arbitrator:
• The Arbitrator is the person to whom the Employer and Contractor can refer
their disputes to and be bound by the Arbitrator’s decision.
• The Arbitrator cannot be the same person as the Project Manager.

10.2 Documents
Contract Documentation: Pre-qualification, Tender and Contract Documents collectively.
This term includes all documents prepared by the Design Team.

 Prequalification Documents: Prequalification documents exchanged between the

Employer / Designer and potential tenderers prior to selection of list of tenderers.
 Tender Documents: The Documents sent to the selected tenderers to enable them to
price the work. Also termed as “Invitation to Tender”.
 Instructions to Tenderers: The term is self-explanatory but only covers procedures up
to Acceptance of Tender. For this reason, it is not a Contract Document.
 Tender: The documents that have been completed by a tenderer and are then returned
to the Employer for consideration (Evaluation).
Bid: US equivalent to Tender. Normally not used in Contract documentation, since
contract documentation deals with written offer. The word ‘Bid’ in UK English tends
to be used to describe both verbal and written offers.
Offer: Another alternative to Tender not normally used in contract documentation for
the same reason as Bid

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  Bill Of Quantities: Price list used by Engineers and designers using Conditions and
Schedules
 Addenda: Changes to tender Documents after they have been sent to the tenderers and
prior to Acceptance.
 Variation Order: Project Manager’s order for alternations, additions and omissions to
the Works

10.3 Essential Elements of Tender Document

a) Instructions to Tenderer (ITT)
b) Tender Data Sheet (TDS)
c) General Conditions of Contract (GCC)
d) Particular Conditions of Contract (PCC)
e) Tender Form
f) Bill of Quantities (BOQ)
g) General Specification
h) Particular Specification
i) The Drawings

ITT: The purpose of this section is to instruct the tenderer or bidder about general rules and
regulation. It is almost same for all tender. It should not have any details, for example, here it
is said to deposit tender security, but the amount of tender security is not written here.

TDS: The ITT provides generalized information – the particular data (information) is
provided TDS. Here the amount of tender security is written (say, 2-3% of project cost).
Amount of required turnover that the tenderer is to fulfill is specifically mentioned.

GCC: It is almost same for all tender. Here general conditions are written only, not
particularly/specifically. Some items of GCC clause are-
▫ Definitions
▫ Arbitrators
▫ JVCA
▫ Risk
▫ Compensation Events
▫ Performance Security
▫ Required Equipments
▫ Key Personnel
▫ etc.
GCC clauses include:
• Performance Bond
• Advance payment to Contractor
• Multiple currencies
• Sectional completion
• Retention
• Bonus for early completion
• Delay damages (or Liquidated damages)
• Changes in the Law

PCC: It is specifically written to expand on GCC to suit particular project/situation. The

project specific information relevant to GCC is given here; say the amount of compensation,

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the performance security is written here. List and qualification of key personnel, any
modification to relevant GCC clauses are also specified here.

Tender Form: It varies from tender to tender.

BOQ: The objectives of BoQ are:

 To assist accurate preparation of tenders, by providing for measurement of
quantities on a uniform basis
 To provide a basis for the financial control of a project, in accordance with the
Conditions of Contract.
BOQ contains all items for works and supplies for construction, testing, commissioning to be
done by the contractor. It is used to calculate the contract price. The contractor is paid for
each item of work done at a rate as quoted in the BOQ. A BoQ is divided into individual
work items, each of which is given a quantity calculated by the Design Team. The tenderers
are instructed to quote a unit rate for each work item and multiply it by the estimated
quantity. When a work item is completed, actual quantities are measured and the Contractor
is paid according to the quoted unit rate. An example of one item of BOQ is given below.

Total
Rate in Rate in
SN Item Description UoM Qty Amount
figure word
(Tk.)
1 Providing and drawing of the following PVC m 100
insulated non-sheathed/ PVC insulated and
sheathed single core Eastern/ BRB/ Paradise
cables through the above mentioned pipe
including connection/ termination with
required size of cable socket etc. complete. in
all respect as per direction of E/C. The
Contractor has to show the original papers
of Manufactures of Eastern/ BRB/ Paradise
Cables which is purchased directly or through
Agent.

General Specifications: It contains general items of site facilities, safety and security
measures, environmental protection and disposal of wastes, preparing the site for work, etc.

Particular Specifications: It contains particular specification related to work such as

specification of material, specification of workmanship, specification of supplies,
specification for testing and quality control and so on. Each item should also contain the basis
of measurement and payment.

Drawings: This portion contains drawing work. It gives detailing for the task.

10.3.1 Techniques for Specification Writing

A specification should state what an element of construction should consist of and how it
should be installed in sufficient detail so that it can be constructed. The reasons for
specification are:
• Putting too much notes on drawings may make it clumsy and unreadable.

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 • To describe workmanship or construction methods on a drawing is often more
difficult than describing the materials in a specification.

The procedure for preparation of Technical Specifications of goods and/or services includes
the following 5 rules.

Rule 1: A Procuring Entity shall at the time of describing requirements in respect of a

particular object of procurement provide, inter alia, the following information, namely -
a) Name or description of the Goods, Works or Services to be procured;
b) Quality of Goods, Works or Services;
c) Required performance Standards and life span;
d) Safety Standards and limits ;
e) Symbols, terminology to be used in packaging, marking and labeling of the goods to
be procured;
f) Processes and methods to be used in the production of the Goods to be procured,
where applicable; and
g) Test procedure, if any, for conformity assessment of Goods.

Rule 2: Technical Specifications prepared by Procuring Entities shall, where appropriate, be-
a) Expressed in terms of performance or output requirements, rather than specifications
linked directly to design or descriptive characteristics which may tend to limit
competition;
b) Based on international Standards, where such Standards exist, or otherwise
recognized national Standards or Codes or generic names.
c) Described in clear terms on the basis of international standards, if any, or national or
authorized national standards or code or generic name.

Rule 3: There shall be no reference, in technical specification of Goods, to a particular trade

mark or trade name, patent, design or type, named country of origin, producer or service
Supplier

Example 1: If a Procuring Entity is purchasing a 4WD vehicle, it is not permitted to simply

issue a Tender for a named vehicle, nor it is permitted to write a detailed technical
specification that is so directly linked to one specific manufacturer that other vehicle
manufacturers or their agents would be unable to tender because the specification.

Example 2: If a generator is to be purchased, the performance requirements should ideally be

expressed, for example, as follows:
 Electricity output to be generated per hour.
 Maximum volume of fuel to be consumed per kilowatt hour while in operation.
 Maximum noise level while in operation.

Rule 4: Notwithstanding anything contained in rule 3, if a Procuring Entity does not have
adequate technical expertise for preparing generalized technical specifications to make the
specifications fully understandable to Tenderers it can make a reference to a particular
branded product, but in such case shall add the words “or similar or equivalent” to the
specification.

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Rule 5: Procuring Entities shall, where possible, prepare the specifications in close
cooperation with the concerned user or beneficiary of the Goods or Works or Services, and
follow, among others, the Standards approved or published by -
o International Organization for Standardization (ISO)
o International Electrotechnical Commission (IEC)
o Standards determined by Bangladesh Standard and Testing Institute (BSTI) or any
other national or international institute

Quality of Good Specification

• Clarity: Use correct grammar and avoid ambiguity. Use the correct word to convey
exact meaning.
• Correctness: Present ideas and explanations accurately and precisely.
• Completeness: Do not leave out anything that is important.
• Conciseness: Eliminate unnecessary words, but not at the expense of clarity,
correctness or completeness.

Example: Specification of Multimedia Projector

Brand: Casio/Hitachi/Dell/Mitsubishi or equivalent
Model: To be mentioned
Country of Origin: Japan/USA/EU Countries or equivalent
Country of Assembling: To be mentioned
Features:
Type: Laser and LED Hybrid
Brightness: 2500 Lumens or higher
Resolution: 1024x768 color pixels (XGA) or better
Zoom: 1.5 x Manual (min)
Focus: Manual
Contrast ratio: 1800:1 or higher
Estimated Operating Life: Up to 20000 hr or higher
Weight: 8.6 lbs or less
Power supply: AC 220-240V, 50 Hz
Standard accessories: Remote control, RGB cable, Power cord, User manual, Carry Bag
Warranty: Three years (minimum)

10.4 Tender Evaluation

Tenders are evaluated by Tender Evaluation Committee (TEC). The roles of TEC are:
• Examine and evaluate the tenders received as per PPR 2008
• Check that all required documents are submitted
• Check that each tender meets the requirements of qualification criteria
• Check that each tender meets the specification
• Check arithmetic accuracy of BoQ
• Ask for clarification, if needed
• Prepare a list of Responsive, Non-Responsive and Rejected Tenders
• Recommend for award or retender as the case may be

TEC may constitute Technical Sub Committee (TSC) and takes its help in evaluation process.

Tender evaluation process has 3 stages: General or Commercial, Technical and Financial.
In each stage, there are preliminary and Detailed examinations of tenders.

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Preliminary Scrutiny
• Tender and goods are eligible
• Minimum general experience
• Minimum similar contract type experience
• Minimum liquid asset
• VAT & IT related certificate
• Valid trade license
• All pages duly signed
• Price schedule
• Tender validity period
• Completed tender submission sheet
• Tender security

Detailed Examinations
• Check for qualification and experience of key personnel.
• Check for adequacy of plants and equipments
• Check for general experience
• Check for similar contract type experience
• Check for bank certificate for liquid asset
• Check for annual average turnover from audit report
• Check for arithmetic correction of prices quoted
• Check for credit facility available

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 Pretender Meeting

Try next lowest

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 Contracting

Negotiate with the top ranking firm as to scope the services

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One stage: two envelope
(PPR Clause 68A-68D)

Two stage tender

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Other Methods

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