PROJECT PROCUREMENT AND TENDERING PCC 512

EVALUATION OF TENDERS
COMPLIANCE CHECK (1st step)
• Carried out prior to Multi-criteria evaluation.
• Done to verify that each bid conforms with the
requirements set out in the instructions to tenderers.
• Tenders failing to meet the requirements are normally
rejected at this stage.
• In some circumstances, a client may give bidders an
opportunity to correct minor errors or to supply the
missing documents.
COMPLIANCE CHECK
• Some of the points covered in Compliance check are
• Consistency with the authority’s instructions about the
submission and delivery of bids;
• Presence of all the required information;
• Conformity with instructions about structure, use of
templates, formatting, signing of documents etc.,;
• Conformation that there is no conflict of interest in
contracting the work;
• Inclusion of letters signed by all consortium members
confirming the association and the designation of a lead
company – if bidder is a consortium;
• Statement regarding content and extent of the proposed
subcontracting – where subcontracting is involved;
BASIS OF TENDER SELECTION
1. LOWEST VALUE (L1 Bidders):
i. typically adopted in row risk and service contracts.
2. MOST ECONOMICALLY ADVANTAGEOUS TENDER (Based on VFM –
Value for Money):
i. typically adopted in high risk projects like PPP, Turnkey etc.,
ii. Evaluated based on multiple criteria
iii. Criteria depends on the requirements of a contract
iv. Typically criteria varies from one contract to another as the requirements
are different from one case to another.
v. Examples of criteria – quality, technical merit, aesthetic and functional
characteristics, environmental characteristics, running cost, delivery date or
period, price etc.,
vi. In government projects, the criteria used are free from bias or
discrimination, permit objective assessment, are related to essential
features of the contract in question and generate an economic advantage
for the contracting authority (in other words; criteria devised by client
should conform to the project procurement guidelines).
vii. Criteria for evaluation will be decided by client and the same are indicated
in the contract notice or tender documents.
MULTI CRITERIA
BID EVALUATION
SYSTEM
TYPICAL EVALUATION TREE FOR PUBLIC
PROCUREMENT
METHOD OF EVALUATING BID
• Identification of the most economically advantageous
tender need to be auditable and objective (in public
works).
• Client employs a form of marking scheme (slide no. )in
which each bid is scored against the defined criteria,
which are weighted to reflect their degree of priority.
• Scoring sheets or evaluation matrices are used for
scoring.
• Also strengths and weaknesses of each bid are
documented in written statements.
• The bids are ranked in the order of their total scores.
METHOD OF EVALUATING BID
• Bid with the highest score is selected as the winning bid.
• If the evaluation is in two parts, the first one is
TECHNICAL BID and the second FINANCIAL BID – those
technical bids with total scores at or above a pre-set
threshold go forward to financial evaluation before
being given a final rank.
• The final rank is based on the combined weightage of
technical and financial scores.
• This final rank identifies the most economically
advantageous tender.
RELATIVE WEIGHTS DECISION
• Depends on nature of contract.
• Relative weight given to Technical and Financial scores
may follow a set formula ( eg. 70% for quality, 30% for
price) or it may be decided on a case-by-case basis.
• Strategic planning contract or feasibility study report or
DPR preparation or consultancy works = more
weightage for technical compared to price
• For routine, straightforward and repeat works, more
emphasis given for financial scores compared to
technical aspects.
 LETTER OF INTENT (LOI),
ISSUE OF WORK ORDER &
AWARD OF CONTRACT
LETTER OF INTENT (LOI)
• A Letter of Intent merely indicates a party’s intention to
enter into a contract with other party in future. It is
prelude to contract. However, a letter of intent may be
construed a letter of acceptance if such intention is
evident from its terms.

A SAMPLE FORMAT OF A LETTER OF INTENT

CPWD – SUBMISSION OF PERFORMANCE
GUARNATEE
RESPONSIVENESS OF BID
CPWD
CPWD
CPWD
GOVT OF AP– SIGNING OF CONTRACTS
PERFORMANCE SECURITY
PERFORMANCE SECURITY
WORK ORDER
• After the contracting agency accepts the offer and
submits necessary documents, a work order is issued
detailing the special terms and conditions, the mode of
payment, the payment of security deposit, the total
value of the contract, etc. In the work order, the
contractor is asked to enter into an agreement with the
owner and initiate the work.

SAMPLE WORK ORDER FROM CLIENT

• In “WORK ORDER” only clients’ signature will be there.

But in “AGREEMENT”, both parties sign will be there.
THANK YOU