5.3.

9 Tender bidding stages/ Bidding process

Invitation of open bids can be made by two process as:
a. Without pre-qualification (Post-Q)
b. with pre-qualification (Pre-Q)
Tender bidding stages shall be depend on four system/
options/method, which are of;
i. Single stage single envelop bidding system
ii. Single stage double envelop bidding system
iii. Two stage double bidding system
iv. Two stage bidding system
i. Single stage single envelop bidding system
• bidders submit bids in one envelop containing both
financial proposal (price) & technical proposal once at a
time (single stage)
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• bids are evaluated, & contract is awarded to the lowest
evaluated substantially response bidder.
• used in GoN & donor agencies; for post-Q.
ii. Single stage double envelop bidding system
• Bidders submit bids in two sealed envelops each
containing technical & financial proposal; enclosing
together in an outer sealed single envelop.
• initially only technical proposal are opened. But,
financial (price) proposal remain sealed (unopened).
• Technical proposals are evaluated by evaluation
committee. There is no any amendments or changes in
the technical proposals.
• to evaluate the technical proposals without any
reference to price.
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• Bidders whose technical proposal is qualified or attend
minimum pass marks meeting all technical criteria, than
only financial proposals are opened.
• The financial proposals of the technically responsive
bidders are evaluated; & the contract is awarded to the
lowest evaluated substantially responsive bidder.
• Bidders who are failed to qualify in technical proposal,
such bidders financial proposals are returned as
unopened conditions.
• Used in GoN, financed by Asian Development Bank; for
post-Q.
iii. Two stage double envelop bidding system
• Bidders submit simultaneously two sealed envelops
containing technical & financial proposal, enclosing
together in an outer sealed single envelop.
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• initially, only technical proposals are opened. But, the
financial (price) proposals remains sealed (unopened) in
custody by the executing agency.
• Technical proposals are evaluated by evaluation committee.
• seeing the technical proposals, the executing agency may
made amendments or changes in the technical proposals as
discussed with the bidders as well.
• due to change in the technical proposals as per project
requirements, the bidder are invited to submit supplementary
financial proposals based on the revised technical proposals.
• bidders are requested to prepare or adjust technical bid as
per technical standard required by the executing agency. Non
adjustment on technical proposal means such bidders may be
rejected for opening in financial proposals.
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• The original financial proposals & the supplementary
financial proposals are opened by the evaluation
committee.
• The award of contract is made to the lowest evaluated
substantially responsive bidder.
• used in procurement of machinery, equipment,
manufacturing plant in construction; for Post-Q.
iv. Two stage bidding system
• known as pre-qualification (Pre-Q).
• Bidders first submit only technical proposals in
accordance with project details, drawings & specification
as per pre-Q notice; but this stage no needs of financial
proposals (price).
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• Technical proposals are opened & evaluated by the
evaluation committee.
• bidders whose technical proposals conform technical
requirements of the executing agency, than only in the
second stage invite financial proposals giving sufficient
time to prepare financial proposals.
• Financial proposals are evaluated & award of contract
is made to the lowest evaluated substantially responsive
bidder.
• Initially first stage only technical proposals are invited,
bidders whose technical proposal meets all the
requirement of executing agency, than only in second
stage financial proposals are invited.
• Used in large & complex project.
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 5.3.10 Evaluation of tenders/bids
• to determine the lowest evaluated substantially (well to do)
responsive bid in accordance with the terms & conditions of
the bidding documents.
• Evaluation by the bid evaluation committee; or may be
tender opening committee established by the owner or
implementing agency as per format in the Standard Guide for
Bid Evaluation published by PPMO.
• The lowest evaluated substantially responsive bid should
subject to;
a. Qualified as technically, financially & commercially.
b. Bid contains no substantial deviations from the
specification.
c. evaluated bid is lowest within cost estimate (bid costing up
to 10% higher than the estimated cost may also be accepted
on approval of higher authority).
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d. If rate analysis submitted by the bidder is logical &
realistic; if necessary & needed.
e. The bid evaluation committee should prepared bid
evaluation report within 15 days from starting of bid
evaluation; & submit to the competent authority for further
considerations & actions.
f. If all the bid amount are higher than 10% of the estimated
amount such case as per PPR, rebidding should be done.
g. The competent authority; on recommendation of bid
evaluation committee approves the lowest evaluated
substantially responsive bid.
h. Not only lowest, but also substantially responsive bid
should be selected.
i. The comparative statement of bidders sheet is prepared
as:
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Ramesh Banstola 9
5.3.11 Reasons for Rejecting of bids in bid evaluation
are of;
a. Commercial b. Technical c. Financial
a. Commercial reasons
i. Not accordance as per bidding documents of bid
security & its validity period.
ii. not meeting critical path work schedule of bidders.
iii. not meeting minimum experience & financial
capability.
iv. conditional bids if any by bidders.
b. Technical reasons
i. Failure to bid required scope of work.
ii. failure to quote price in each items in BOQ.
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iii. Failure to satisfy in specification.
c. Financial reasons
i. non responsive bid with respect to cost estimate of
project work.
ii. the quoted price by bidders if required further
explanation; rate analysis submitted by the bidder is not
logical & realistic.
5.3.11 Selection of contractor/ Acceptance of tender
• on recommendation or after approval of the
recommendation done by bid evaluation committee; the
employer may issue letter of acceptance (LoA) to the
lowest evaluated substantially responsive bidder
(LESRB) accepting bid. This information is given to all
bidders through public notice in national news paper. 11
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• the bidding document normally provide 15 days from the date
of of issuance of letter of acceptance by the employer for
submission performance security & come to sign on the
contract agreement.
• If there is no any complains about selected bid to the
concerned parties or bidders; than after submission of
performance security, contractor enters into contract
agreement by signing in contract agreement by both parties, &
also given work order to execute the work, called as letter of
work order (LoW).
• if the selected lowest bidder refuse to accept contract
agreement, the second lowest bidder satisfying requirements
of contract documents can be selected & accept the tender or
bid.
• lowest bid is accepted due to the fear of Auditor General
Office of Nepal ( i.e. Mahalekha Parixyak).
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 5.3.12 Pre-qualification (Pre- Q) & Post –
qualification (Post-Q) of contractor
A. Pre-qualification (Pre- Q)
• is assessment (test) conducted by an implementing
agency (owner) to know basic suitability of firms to
carry out a particular contract prior to being invited to
submit a bid, is called pre-qualification.
• before inviting bids or in advance of bidding.
• to establish a list of capable firms or contractors to be
invited to bid to ensure proper level of competition is
safeguarded or take place.
• shortlisting/assessment of eligible bidder to avoid
crowding of bidder.
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• to know about
i. Experience record on works of similar nature & complexity
of works; = 0.8*V, where V= value of contract
ii. Financial capability (turnover) – i.e. known average annual
turnover (AAT) = 1.5*V/T where V = value of contract, T
= Time in yrs.
iii. Personnel capability ( human resources)
iv. Equipment capability
v. Litigation history (legal disputes)
• as per PPR-2064, above 2 crores estimated project cost, pre-
qualification can be done.
• time for prequalification as: minimum 30 days for NCB, &
minimum 45 days for ICB
• bidding in two stage; in first stage as pre-Q, & in the second
stage as post-Q, called as two stage bidding system.
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B. Post-qualification (Post-Q)
• used where no pre-Q has been carried out. Bids are invited
in single stage from contractor.
• after bids are received, an assessment or evaluation is
carried out about qualification of bidders after bidding, is
called as post-Q.
• financial proposal & technical proposal are invited only in
single stage.
• Competitive bidding with single stage single envelope
bidding system, single stage double envelope bidding system
two stage double envelope bidding system, are post-
qualification.
• Accept those financial proposals whose technical proposals
are qualified. The lowest evaluated substantially responsive
bidder is identified & then contract is awarded.

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Objective of Pre-Q/Advantage of Pre-Q
i. Reduces the problem associated with low priced bidding
trends & pattern.
ii. Save bidding expenses of unqualified bidder.
iii. Avoid possibility of rejecting tender due to lack of
capability of contractor.
iv. Well qualified firms can quote their own rate with real
competition.
v. improve interest in construction of leading potential
contractor.
vi. Selection of only experienced & qualified contractors.
vii. Reduces time to evaluate the bids from unqualified
contractors.
viii. Encourage local firms/bidders to join in joint venture for
resources & work experiences.
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Steps for Pre-Q
are of,
i. Preparation of pre-Q documents for technical proposal.
ii. invitation for pre-qualification
iii. submission of pre-Q documents by the interested bidders.
iv. opening, evaluation & analysis of pre-Q documents.
v. selection & approval of prequalified bidder list.
vi. notification to applicants and invitation for financial bid.
Letter of work order (LoW)/Work order
• is the instruction or order given by the client to execute/
start of work to the selected contractor.
• after submission of performance security & insurances (if
any) by the selected contractor, signing of the contract take
place.
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After signing on the agreement between selected
contractor & employer, the employer issue a letter, called
“notice to proceed to commence work”, known as work
order.
• date of notice to proceed to work (work order) is taken
as reference date from which the beginning of the
project (i.e. starting date for work execution) is counted.
• Also provide mobilization amount not exceeding more
than 20% of the bidding amount as per PPR-2064 for
construction site establishment.
• Instruction to take over the possession of construction
site & take the work in hand.

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 5.3.13 Condition of Contract (CoC)
• contract is the legal agreement binding both owner &
contractor.
• for easy & smooth functioning of work, to minimize dispute
& keep both parties out of the courts for any legal action,
certain clauses, terms & conditions are set up in contract
agreement, such conditions are called condition of contract.
• document that spells out various clauses & conditions
between contract agreement signing parties (owner &
contractor) defining each obligations & responsibilities
related to execution of work as a whole , is called as
condition of contract document.
• for preparing CoC, legal advice of experienced lawyers
should be taken.
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• various version of condition of contract in standardize
documents for construction projects as;
a. ICE ( Institution of Civil Engineers, UK)
b. FIDIC (Federation Internationale Des Ingeneeurs
Councilis); French language; in English known as
International Federation of Consulting Engineers; form
in 1913AD
c. Funding agency as WB (World Bank); ADB (Asian
Development Bank)
d. GoN (Govt. of Nepal), DoR (Department of Road)
e. PPMO of Nepal (Public Procurement Monitoring
Office) in 2009.
• CoC consists of two parts, are of:
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a. Part I – General condition of Contract (GCC)
b. Part II – Condition of Particular Application or Special
Condition of Contract (CPA or SCC)
Condition of contract can be prepared or practiced under
the following groups or headings;
Part I – General Condition of Contract (GCC)
A: General
1. Definition- i.e. BOQ, project manager, owner,
contractor, defects, day works, completion date,
variation, specification.
2. Interpretation
3. Language & Law
4. Project Manager’s decisions
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5. Delegation – PM duties & responsibilities, delegation to
whom
6. Communication – method of communication i.e. writing
7. Subcontracting – employ of subcontractor or not.
8. Other contractors – as plumbing, electrical or others.
9. Personnel – Human resources personnel
10. Employer’s & contractor’s risk
11. Employer’s risk
12. Contractor’s risk
13. Insurance
14. Type of contract – turnkey, lump sum or item rate etc.
15. Queries about the contract data – any confusion explain by
PM
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16. Contractor to construct the works
17. The work to be completed by the intended completion date
18. Approval by the project Manager
19. Safety
20. Discoveries - (historical or ornamental property as
employer)
21. Possession of the site
22. Assess to the site
23. Instructions
24. Disputes
25. Procedure for disputes – provision of adjudicator,
arbitration method & settlement
26. Sufficiency of tender
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B. Time control
27. Program
28. Extension of the intended completion date
29. Acceleration
30. Delays ordered by the consultant
31. Management meetings
32. Early warning – for future events or threats.
C. Quality control
33. Identifying defects – checking & inspection of defects
34. Tests
35. Corrections of defects
36. Uncorrected defects after completion date
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D. Cost control
37. Bill of quantities
38. Changes in the quantities
39. Variations
40. Payments for Variations
41. Cash flow forecasts
42. Payment certificate
43. Payment – for advance payments, taxes, retention
44. Compensation events
45. Tax
46. Currencies
48. Retention Ramesh Banstola 25
49. Liquidated damages – not completion of work on time
50. Retention (for advance payment)
51. Securities
52. Days works
53. Cost of repairs
E. Finishing the contract
54. Completion – virtual completion, certificate
55. Taking over – left out from site
56. Final account
57. Operating & maintenance manuals
58. Termination – termination of contract, breaking of
contract
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59. Payment upon termination
60. Property – after termination of contract in between time
61. Release from performance- such as war, flooding
Part II – Special Condition of Contract (SCC)
Additional clauses, specific for special jobs; project or contract,
law of country, nature of work.
62. Safety, security & protection of environment – i.e. air,
water pollutions etc.
63. Local taxation
64. Value added tax
65. Income taxes on staff
66. Duties, taxes, and Royalties – local products & materials
taxes
67. Escalation Ramesh Banstola 27
Assignment- 7: Provide tender notice which published on
national any news paper of Nepal by cutting and paste on
the copy or can be in hand written format.

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