Preparing and evaluating tender documentation

Evaluate contract risk

What is Risk Management?
Risk Management has assumed greater prominence in recent years because prudent managers have
recognized the benefits of managing their own risk exposures rather than relying on insurance as the sole method
of protection.

The reason is simple ‐ applying Risk Management techniques can substantially reduce the cost of risk.
The Treasury Managed Fund is based on the principles of selfinsurance and as such, we place high priority on
the implementation of sound Risk Management practice.
The components of the Risk Management process include:
1. Identifying exposure to potential losses
2. Measuring the above losses
3. Examining feasible alternative techniques for dealing with the exposure
4. Selecting the most appropriate technique(s)
5. Implementing the chosen technique(s), and
6. Monitoring the results to ensure the program remains effective.
Risk Management is a proven, simple and efficient method of controlling exposure
to fortuitous risks, i.e. those risks which do not present an opportunity for speculative gain.
1. THE RISK MANAGEMENT PROCESS

Your Agency should identify and assess contracting risks before tendering, before you formulate the contract.
For operational risks, this should be before the contract starts, ideally by a join
Agency/contractor initiative required as part of contract conditions.
The Risk Management process can be briefly described as follows:

1. Establish the context

What is the strategic and operational role of contracting activities in delivering services and
products, and in meeting clear objectives and specific performance indicators?
What is the strategic and organizational role of contracting?
To find this, establish the following:
• Agency objectives (direction) and goals (target)
• Activities where contracting can optimize the attainment of those objectives and goals

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•How performance will be measured, i.e., create evaluation criteria and performance indicators,
and Define suitable definitions of risk levels, from low to high, according to possible risks in achieving those
objectives and goals. This in turn is achieved by defining rates of likelihood and consequences.

2. Identify the risks Identify short and long term risks in all business units and on an organization‐
wide level
3. Analyze risks Estimate the likelihood and reasonable consequences for each identified risk.
Considering the effectiveness of current controls postulate what could happen and how:
•What is the nature of the activity, the equipment and work methods required to do it? Who are the personnel
undertaking it? What other persons and their property and activities could be impacted by the activity?
• Look at experience via reviews, claims, incidents, records and so on
• Look at hidden threats, proposed activities and possible new circumstances

•Appoint a facilitator to extract ‘corporate knowledge’ using team‐based exercise estimate risk levels
Consider and record:

• Possible causes ‐ direct, underlying and system‐based

•The maximum reasonable consequence level. Consider effectiveness, cost and efficiency, health and safety,
liability, environment, property and reputation and image, and
• The likelihood of occurrence for that consequence level.
Determine existing controls to eliminate or reduce the likelihood and consequences, i.e., what procedures and
processes exist either to provide a defense against the occurrence, or reduce the adverse impacts if the situation
or event does occur? Establish a preliminary list of risks from highest to lowest risk level.
4. Evaluate and priorities risks

Determine risks that might need further treatment and the cost/benefit of doing so
Determine risks that might need further treatment:
• Compare risks with the evaluation criteria set in context
• Reconsider the appropriateness of the criteria with the preliminary list of risks and risk levels

• Re‐adjust risks and risk levels, paying particular attention to medium and high risks, and
• Propose which risks can be tolerated and which require more treatment to reduce the risk level.
5. Treat the risks Take action to reduce risks and record the level of risk retained

Monitoring, consultation and review occur continuously throughout the process.

Take action to reduce risks and record what level of risk is retained:
• Identify options to eliminate or reduce and/or transfer risks
• Determine the net benefit (i.e., cost/benefit) of the options
• Recommend the preferred option
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•Propose an all risks treatment plan (i.e., list all risks requiring treatment, the proposed treatment, estimated
budget, those responsible and realistic start and completion dates)
•Prepare specific implementation plans (i.e., the person responsible for each risk reviews and proposes how this
will be done), and
•Ensure that treatments are aligned with the Agency management system, i.e., all its processes and procedures
There are three underlying causes of the most common and major risks found in contracting.

Each requires careful management attention and planning. The underlying causes are where there is inadequate:
1. Scope
2. Choice of contractor (and subcontractors)/supplier, and
3. Monitoring and work review.
Scope problems arise from your Agency failing to specify what was needed to meet its
objectives. In this situation, ‘you got what you asked for’. Your Agency either omitted important needs or includ
ed unnecessary ones.
Choosing the right contractor/supplier involves finding one with the appropriate attitude, experience and skills
necessary to complete the work to a satisfactory level. The required skills and capabilities extend beyond technic
al aspects to professionalism, safety, communication, reporting, contingency planning, and
financial status and so on.
An effective evaluation and selection process is critical to choosing the right contractor
Choosing the cheapest contractor is a common reason for failed contracts. Often the cheapest initial bids win an
Agency’s tender without considering the full lifecycle cost and value for money. The most cost‐effective contrac
t is often not the cheapest since those suppliers have added quality assurance measures in place. You should also
consider fixed‐price contracts, which may be more expensive initially but save money in the long term.
Monitoring and reviewing contract performance is essential to ensure contract performance is
measured against your Agency’s expectations. Aim to identify problems early and re‐adjust plans so you can tak
e action to alter, rectify, or financially compensate for changes to the original contract arrangements. Prevent pro
blems and enhance contractor relationships with a timely, accurate and relevant monitoring system.

Contractors must provide evidence of commercial and statutory cover for pre‐approved insurances and limits.
Your Agency needs to have a right in both the commercial and insurance contracts to claim for major losses.
Contract terms need to ensure that your Agency approves proposed material changes to policies, limits and so
on. Insurance cover needs to consider the maximum reasonable loss for any one event and an indemnity limit to
at least match that loss.

1. Consult the Management team

 Building Team Trust and Cohesiveness
 Why Some Teams Succeed (and So Many Don’t)
 How Will You Make Your Team a Team?
 Make Your Good Team Great
 Team Camaraderie: Can You Have Too Much?
 Is You Rewarding Solo Performance at the Team’s Expense?
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 THE BALANCING ACT
Managers responsible for team performance often fall into one of two traps. Some continue to act like
traditional bosses, telling the team what to do and how to do it. Others think they’re “empowering” the
team by maintaining hands-of policy, neither approach works. The manager’s job, writes Hack man in
a study on teamwork, is to “maintain an appropriate balance of authority” between himself and the team.
EARNING TEAM SKILLS
Teams must be trained in teamwork: members often need help in skills such as listening, communicating
with different kinds of people, and staying focused on the task.

SIX FACTORS OF SUCCESSFUL TEAMS

What makes workplace teams work? Researchers and practitioners identify six factors:
1. A clear set of objectives, spelled out unambiguously by management.
2. Metrics allowing team members to assess their performance—and showing the connection between
the teams work and key business indicators.
3. Ongoing training—not a one-shot deal—in communication, group leadership, and other team skills.
4. Decision-making authority over how to reach goals. But managers may need to start slowly and
expand teams’ scope of authority over time.
5. Team-based rewards and evaluation, not individual incentives.
6. An open culture, with easy access to team specific information and to senior management.
Creating evaluation committees
The composition of the evaluation committee will depend largely on what is being
Purchased and the associated risks. For simple, routine purchases an evaluation panel of two, comprising
the purchasing officer and the end user, might suffice. However, for non‐routine, complex requirements i
t is critical that the evaluation panel has a skill mix that enables the key risks associated with the purchas
e to be assessed.
Specialist financial, technical and legal expertise might be needed. Ideally the proposed contract manage
r and an end user (who understands the operational implications of the tenders under consideration) shou
ld also be included on the panel.

A chairperson responsible for managing the evaluation and decision‐making process should be appointed to
• Ensure all panel members are aware of their responsibilities,
• Including confidentiality;
• Ensure the security of tender documentation;
• Ensure that decisions are made in a timely manner;
• Manage communications between the evaluation panel and other
• Interested parties;
• Ensure that the evaluation panel has access to adequate resources;
• Prepare the final recommendation report.

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 Tender selection criteria
The use of appropriate, well‐defined selection criteria enables tenders to focus their submissions, thereby assistin
g public authorities to assess their relative strengths and weaknesses. The selection criteria should relate to the ke
y risks, critical success factors and major deliverable’s associated with the purchase. These criteria should then f
orm the basis of the key performance indicators (KPIs), against which the performance of the contractor will be
measured.
Generally the selection criteria will address the following broad areas:
o Compliance with the contractual terms and conditions;
o The technical merit of the goods or services offered;
o The capability of the tenderer to fulfill the specified requirements, including technical
and management competence;
o Financial viability, relevant skills, experience and availability of key personnel;
o Whole of life cycle costs;
o An assessment of the risks or constraints associated with each offer;
o Any wider benefits to the State (for example local employment opportunities).

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Prepare the tender documentation

TENDER PROCESS
Typically, the Tender Process involves three distinct phases:

TENDER PREPARATION TENDERING TENDER EVALUATION

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Definition of Terms
 GOODS
raw materials, products and equipment and commodities in solid, liquid or gaseous form, marketable software
and live animals as well as installation, transport, maintenance or similar obligations related to the supply of the
goods if their value does not exceed that of the goods themselves;
 SERVICES
Maintenance, security, janitorial, electricity, telecommunication and water supply services
 WORKS
Associated with construction, demolition, renovation of a building, road or structure and includes build-own-
operate, build-own-operate-transfer and build-operate-transfer contracts;
 CONSULTANCY SERVICES
Service of an intellectual and advisory nature provided by consultants using professional skills to study, design
& organize projects, advice clients, conduct training and transfer knowledge;
 PROCUREMENT
Obtaining goods, works, consultancy or other services through purchasing, hiring or obtaining by any other
contractual means;
 BIDDER
A natural or juridical person submitting a bid;
 BIDDING DOCUMENTS
Documents prepared by the public body as a basis for preparation of bids; which contains specification of the
desired object of procurement;
 BID PROPOSAL
Documents submitted by bidders to participate in a bid on the basis of the bid document prepared by a public
body in respect of that procurement;
 CANDIDATE
A natural or juridical person invited to take part in public procurement or seeking to be so invited

 PUBLIC BODY
A body which is partly or wholly financed by the Federal Government budget, higher education institutions and
public institutions of like manner;

 TECHNICAL SPECIFICATION
Documents describing the quality, type and standard with which the required goods, services, works or
consultancy services should comply;
 BID
A stage in the procurement process extending from advertisement of or invitation to bid up the signing of
contract;
 PROCUREMENT UNIT
A body responsible for the procurement with in public bodies;
 TOTAL PRICE
Payment made by public bodies in respect of a particular procurement which includes taxes and all other
incidental costs;
Qualification of Candidates
 Possess the necessary professional and technical qualifications and competence, financial resources,
equipment & other facilities, managerial capability, experience in the procurement object, reputation &
personnel to perform the contract;
 Have the legal capacity to enter into contract;
 They are not insolvent, bankrupt, have not been suspended, or not being subjected of legal proceedings;

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  They have a bank account;
The Public Body
 May require the candidates to provide appropriate documentary evidence or other information to vouch
the qualification of the candidate;
 Evaluates the qualifications of the candidate in accordance with the criteria set forth in the documents
referred;
 Can disqualify a candidate who submits a document containing false information for purposes of
qualification;
Grounds for Rejection of Bids, Proposal and Quotations by the Public Bodies
 There is a proof of error in the procurement proceeding which could affect the outcome of the bid;
 It is found out that the procurement process cannot enable the public body to look for a better technical or
economic advantage as a result of a change of work plan or another alternative representing a better
option;
 Bidders failed to meet the minimum criteria;
 Minimum price offered in the bid does not match with the market price;
 Price offered exceeds the budgetary allocation;
 It is proven that the bidding is not competitive as a result of connivance among the candidates;

Methods of procurement (types of tendering)

A. Open tender
Procedure for open tendering
 Advertisement
Invitation to bid shall be advertised at least once in a national newspaper of general circulation;
 Letter of intent (LOI)
 Issuance (sale) of bidding documents
Plans, technical specifications, instruction to bidders (ITB), information for bidders (IFB), terms of reference
(TOR), bill of quantities (BOQ), and bid form
 Submission and receipt of bids
 Opening of bids
 Examination and evaluation of bids
 Notification of award and signing of contract
The Invitation to Bid
Must contain the following:
 Name and address of the public office
 Brief description of the works
 Conditions (including the place) for obtaining the bidding documents
 Place and deadline for the submission of Bids
 Place and time for the opening of Bids
Bidding Documents
Must contain the following:
 Instructions for the preparation and submission of bids
 Information about the date, address and place of opening
 Bid forms and where applicable, forms of bid security
 Number of copies to be submitted with the original bid
 General and specific conditions of the contract
 Specification of requirements, including time limit for completion of the task
 Evidence to prove the bidder’s qualifications and its fiscal and legal standing
 The period during which the bid remains in force

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  Criteria for evaluation of bids and award of contract
 A reservation that the public body may reject all bids at any prior time to the notification of award
 The price adjustments that maybe made during contract implementation & the conditions and the manner
under which such price adjustments can be made
Instruction to Bidders (ITB)
Must contain the following:
 Description of works, including the full name & address of the public body and the source of funds
 Criteria that the bidders must submit value added tax registration certificate and other licenses
 Other instructions and documents required by the Proclamation and the Public Body.
Technical Specifications
Must be:
 Prepared in accordance with the need of the end user in such a manner that it allows a wider competition
among bidders.
 May incorporate standards set by Ethiopian Quality and Standard Authority or by other similar institutes?
 Shall form part of the bidding documents and shall be sufficiently detailed and comprehensive
BID FORM AND PRICE SCHEDULE
Must be:
 Prepared by the Public Body and be filled up the bidders.
 Must clearly indicate the price, tax and other issues related to price.
 Shall be such that enables the candidates to present clear proposal.
BID SECURITY
 Bid security is required to accompany the Bid;
 The amount of such Bid Security shall be sufficient to discourage irresponsible bidders
 Bid Security will be forfeited if a bidder withdraws his bid within the validity period;
 Bid Security will also be forfeited if the successful bidder repudiates the contract or fails to furnish
performance security, if so required;
 Bid Security shall range from 0.5% up to 2% of the total estimated contract price and shall not exceed
500,000.00 birr.
Submission and Receipt of Bids
 Bids shall be submitted in writing, signed and in a sealed envelope, to the place and before the deadline
stated in the invitation to bid;
 The public body shall give a receipt to the bidder including the time and date on which the bid document
was submitted, where it becomes impossible to put the bid document in a bid box due to its large size;
 A bid document received after the deadline for submission shall be returned unopened to the bidder;
Opening of Bids
 At the time stipulated in the bidding documents, the public body shall open all bids received before the
deadline;
 The name of the bidder and the total amount of each bid shall be read aloud and recorded and a copy of
the record shall be made available to any bidder on request;
 The envelope containing the price offered by the bidder shall be read after the evaluation of the technical
proposal where technical and financial proposals are submitted in two separate envelopes;
Examination and Evaluation of Bids
 Public body shall correct arithmetical errors that are discovered during the examination of bids. The
bidder shall be notified on such correction;
 The Bid will be regarded as responsive if only it conforms to salient requirements set forth in the bidding
documents;
 The successful bid shall be the bid that is found to be responsive to the technical requirements and with
the lowest evaluated price;

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  The public body shall prepare an evaluation report, containing a summary of the examination and
evaluation of bids;
Notification of Award and Signing of Contract
 Prior to the expiry of the period of bid validity, the successful bidder must be notified and that its bid has
been accepted, the unsuccessful bidder shall likewise be informed;
 The existence of a contract shall be confirmed through the signature of a contract document incorporating
all agreements between the parties;
B. Request for Proposal
Used if Consultancy Services is required by the Agency
Can also be invoked if the proposal seeks to obtain consultancy services for which the component of the
service is more than 50% of the amount of the contract
Procedure for Request for Proposals
 An invitation shall be made on qualified candidates to submit an expression of interest;
 Request for proposals shall be addressed to not less than three (3) & not more than seven (7)
candidates selected by the public body;
 A request for proposal shall contain at least the following information;
 Name & address of the procuring entity;
 Description of the services required (TOR);
 A reminder that candidates must exclude themselves from procurement of goods & works in
connection with the consultancy agreement;
 Criteria for evaluating the proposals, the relative weight & the manner which they will applied;
 Place and deadline for the submission of proposals;
 Candidates shall be given adequate time to prepare their proposals which will determined by the
directive of the Minister;
 Negotiations might be made with the first ranked candidate with respect to the nature, volume &
organization of the services included in their proposals;
 Award shall be made to the candidate whose proposal is most advantageous, determined in
accordance with the criteria set forth;
C. TWO STAGE TENDERING
Conditions for Use of Two-Stage Bidding
Can engage on two-stage bidding when:
 It is not feasible to formulate detailed specifications for the goods or works & identify their
characteristics, in order to obtain the most satisfactory solution to the needs of the agency;
 The purpose is for research, experiment, study or development, except when it includes production of
goods in quantities sufficient to recover research & development costs;
 Bid proceedings are initiated but no bids are submitted or all bids are rejected due to unclear &
incomplete specifications;
 Because of the technical character of the required goods or works, or because of the nature of the
consultancy or other services it is necessary for the public body to negotiate with the suppliers;
Procedure for Two – Stage Bidding
 The solicitation documents shall call suppliers to submit the first stage of bidding tenders with the
ff requirements;
 Documents shall not contain a tender bid price;
 Solicitation of documents relating to the technical aspects, quality of goods, works or services;
 Solicitations of documents relating to their professional & technical competence and qualification
for suppliers;
 Identification of responsive bids by evaluating the proposals submitted by the bidders at the first
stage of the proceedings;
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  if there will be modification on the required specifications, it shall be communicated to the
responsible bidders for final submission;
 Submission of the second stage by the responsive bidders;
 A bidder not wishing to participate may withdraw from the proceeding;
 Documents on the second stage will contain the Bid Price;
 The public body shall evaluate the bids submitted at the second stage to ascertain the successful
bidder;
 The public body may engage negotiation with the first ranking bidder concerning any aspect of
its bid, except price;
D. RESTRICTED TENDERING
Conditions for Use of Restricted Tendering
Can engage on restricted tendering only when:
 The required object of procurement is available only on limited suppliers;
 The cost of procurement does not exceed the threshold specified in the directive issued by the Minister,
or;
 A repeated advertisement of the invitation to bid fails to attract bidders in respect of a procurement
subject to the directive to be issued by the Minister;
Procedure for Restricted Tendering
Restricted Tendering Procedures are the same as those applied in open tendering, except that :
 The invitation to bid will be sent only to the limited available suppliers;
 Invitation to bid shall as far as possible be sent to limited suppliers chosen from among those
registered in the suppliers list on the basis of the ff ;
 Any selection shall allow opportunities for suppliers on the list;
 Number of suppliers shall be sufficient to ensure effective competition;
 Number of suppliers shall not be less than five (5) competitors;
 The time allowed for preparation of bids shall not be less than the minimum number of days
stated, but if all bidders have submitted their; bids before the closing date, the public body may
open the bids ahead of schedule by giving the bidders prior notice;
 The public body shall determine whether it is necessary to require the candidates to submit a bid
security;

E. REQUEST FOR QUOTATION

Conditions for Use of Request for Quotation
Can engage on request for quotation procurement if:
 The Minister issued a directive to allow the method;
 The goods are readily available or works or services has an established market;
 The estimated value of the contract does not exceed the amount stated in the procurement directive that is
issued by the Minister;
Procedure for Request of Quotations
 Public bodies shall request quotations from as many candidates as practicable (but with a
minimum of three), if possible from among those registered in the supplier’s list;
 Public bodies shall not repeatedly invite the same suppliers to submit their quotations (equal
opportunities to all candidates engaged in the business);
 Request shall contain a clear statement of requirements as to quality, quantity, terms & time of
delivery of the goods, work, consultancy or other services;
 Public bodies shall give adequate time to candidates to prepare their quotations;
 A purchase order shall be placed with the candidates who meets the requirements of the public
body;
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 F. DIRECT PROCUREMENT
Conditions for Use of Direct Procurement
An engage on direct procurement if :
 There is an absence of competition since the goods, works, consultancy or other required services can
only be provided by one candidate due to technical reasons;
 In the case additional deliveries of goods by the original supplier which are intended as parts or
replacement of existing supplies, services or installation;
 There is an additional work, which were not included in the initial contract due to unforeseen
circumstances;
 It is within the limits defined in the procurement directives for the continuation of consultant services,
where the original contract has been satisfactorily performed & the continuation is likely to lead to gains
in economy & efficiency;
 The head of the public body has determined that there is a need due to pressing emergency which would
create serious problems & therefore injurious to the performance of the public body;
 Where situations arise in which shopping becomes necessary to meet the special procurement needs of
public bodies;
 For purchase of goods made under exceptionally advantageous conditions which only arise in the very
short term;

Procedure for Direct Procurement

 The public body shall prepare a description of its needs and any special requirements as to
quality, quantity, terms, time of delivery, and shall be free to negotiate on price and conditions of
offer with the sole candidate;
 The salient points to focus on the negotiation of the contract shall be approved by the head of the
public body concerned and communicated to the negotiators;

Tendering
It is highly desirable when inviting competitive offers from a number of bidders that the tender received should
be based as far as possible on equal terms and conditions and presented in a standardized manner. In this way
evaluation and comparison between the tenders received can be made more simply and accurately with less risk
of misunderstandings, errors and omissions.

The Tender is the most important single document submitted by the bidder. It is here that each bidder confirms
that he has read and understood the requirements of the tender documents and based on such requirements, it is
here that the bidder states his tender sum for undertaking and fulfilling all his obligations under the contract. It is
therefore essential for the Employer that all Tenders received are stated in identical terms and thus it is necessary
for the Employer, when inviting tenders, to provide bidders with a standard form of tender which each bidder is
required to complete and sign.

Actually the usual tender document consists of a number of different documents, of which the following forms
the essential elements:

 Bidding Information:
 Invitation to bid,
 Instruction to bidders,
 Bid form including Bill of Quantities
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 Addenda (Bid amendment)

 Contractual Information:
 Agreement form
 Standard or General Conditions of Contract
 Particular or Special Conditions of Contract
 Technical Specifications & Methods of Measurement
 Drawings
 Appendix to Construction Agreement

Bidding Information: This is part of a tender document, where bidders are required to respond (provide their offer, data,
information) in accordance with the inquiry of the documents within the bidding period. This section of the document
comprises:

I) Invitation to Bid: this is an announcement or a call of bidders to participate in the bid. It contains a short brief
description of the project and forward information to bidders such that they can eventually reach a decision on
whether to purchase the full bid document and participate in the bid. The invitation to bid shall contain, as a
minimum:
 The name and address of the Client,
 A brief description of the project ( type, size and location) including desired time for completion,
 The means and conditions for obtaining the bid documents and the place from which they may be obtained,
 The place and deadline for the submission of bids,
 The place and time for opening of bids,
ii) Instruction to Bidders: This is a separate document in the tender to furnish instruction to bidders on the
preparation and submission of the bids. Although it may repeat some of the information in the invitation to bid,
the instructions are mostly concerned with the following:
 Instructions about filling out the bid form,
 Bid due date,
 Location to deliver the bid,
 Examination and evaluation of bids
 Method of awarding the contract
 Bid security information,
 Conditions to become non-responsive to the bid
iii) Bid Form: The bid form is the document upon which the bidder submits its offer such as financial, technical
and legal requirements of the bid. The form is usually prepared by the designers with blanks left to be filled out
by the bidder. This makes the bids more easily comparable. Items may include some or all of the following:
 Name of Contractor,
 Unit prices for the bill of quantities,
 Basic price index
 Tender sum both in numbers and in words,
 Technical information such as key staff to be deployed, equipments to be availed, past experiences, etc
 Legal status of the company: proprietorship, corporation, partnership,
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 Financial status of the company
 Key subcontractors
 Time required for the job by the contractor,
 Signature, title and date.

iv) Addenda: After the documents are issued but before the bids are due, changes often need to be made. The
most common reason is the need to correct simple mistakes in the bidding documents. Contractors dig deeply
into the documents and can spot things missed by the drafter or specification writer or designer. This may
generate additional requests that need to be included in the bid documents.

Contractual Information: These are documents included in the tender document to furnish bidders with full and
detailed information of the project for application after winning the contract. The bidder should utilize such
information to provide a fair and reasonable offer to the bidding document. This section of the document
comprises:
i) Agreement Form: It serves the purpose of presenting a condensation of the contract elements, stating the work
to be done and the price to be paid and providing suitable places for signature and seal of the parties. The
following provisions are common to most agreement forms:
 Identification and full address of the signing parties,
 short description of the project and the work,
 Date of commencement and signature,
 Completion time of the project,
 The contract price,
 Enumeration of contract documents constituting the entire agreement.

ii) Standard or General Conditions of Contract: The purpose of the general conditions is to establish the legal
responsibilities, authority and rights of all parties involved in the project in normal procedure of the work, in
case of disputes, hazards etc. Although the owner can devise his own general conditions, most prefer to use a
standard version. This version is understood by all parties, includes tested language and can be revised as
needed. For example the FIDIC Conditions of Contract, The Standard Conditions of Contract by the Ministry of
Works and Urban Development, 1994 etc.
iii) Particular or Special Conditions of Contract: Having similar performance with that of the general
conditions, however more specific and relevant to a particular project. It is a supplementary and modified section
of the general conditions of contract. Special conditions include additional owner requirements such as parking,
use of toilet facilities and working in occupied spaces, etc.
iv) Technical Specifications & Methods of Measurement: These are written descriptions of the quality of the
project. They detail the materials, equipment and workmanship to be incorporated into the project. v) Drawings:
These are intended to describe the size and dimensional requirements of the project. Many professionals are
involved in developing drawings. These include the architectural, structural, sanitary, mechanical, electrical,
topographic survey, land profile, and detailing.
vi) Appendix to Construction Agreement: Comprises tabulated and narrative information of the project such as
amount and liquidated damages, interest rates, completion time, amounts of bond and insurances, defects liability
period, retention, progress payments, advance payment, etc. Some of this information might be left blank to be
filled by the contractor or might be readily provided by the client

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 3.1.1 Qualification of Bidders: Before a contractor is awarded a contract, it should likely be put through a
qualification and selection process on order to arrive at the best advantage to the client in both price
and efficiency. The following chart depicts the available options in bid qualification procedure
 Drawings and specifications
Specifications are the most reliable method of describing requirements. Specifications play an important
role in the search for the right quality and the right value. They also assist in resolving the conflicts, which might
arise later on. In construction projects, engineering drawings and prints are used while describing the
specifications.

Specifications must have following essential features:

1. It should be as simple as possible and easy to understand.

2. It should be exact.
3. It should be capable of verification.
Types of specifications

Generally the following major specifications categories are common.

Material and work man ship specification:- this form of specification includes the description of the scope of
the work, the general and specific requirements that are necessary, for the execution of the work, materials
requirements, construction details, and a method of measurement and payment for completed works.

Material specification:- for some items may focus on the physical and or chemical properties that can also be
cross checked by tests. For other the performance characteristics may be governing factors, in some cases a
composition of the two types may be also applicable. In preparing material specifications the following need to
be considered.

- Physical properties, such as strength, dualities, hardness, and elasticity

- Chemical composition
- Electrical and thermal acoustical properties
- Appearance including color, texture, patterns and finishes
Workman ship specification: - these types of specification indicate the desired result that need to be
achieved in the works so that the contractor has the option of selecting the construction methods, to
achieve the stated results.
Material procurement specification: - these types of specifications describe the requirements of
materials, works for repetitive items, such as the provision of steel bridges in long highways. This work

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as it tends to be repetitive gives the contractor time to procure ahead of time and arrange his method of
works. By separating the specification for these items from the major works it creates clarities and
convenience.
Performance specifications: - such types of specifications define the performance requirements for
machinery and plants operating equipments. This allows the advance manufacture and procurement of
such equipment, or the purchase of standard brands.
Objectives of specification writing
The objective of good specification writing is to transmit the requirements of the work in a clear and
unambiguous manner. There for in the process of writing good specifications one must focus on the
following key elements
 Clarity
 Simplicity
 Precision/ completeness
 Quantification
 Use of tolerances
 Brevity
To define the standards that must be achieved in a work a specification need to be written in a
clear language which is direct, straight forward and logical manner using simple and
unambiguous language, in a manner, which conveys meaning intent and requirements. One
should also aim to use the most definitive and precise words possible, keeping the specification as
short as is practically possible.
In writing specification it is usually a good practice to ask “what exactly is the contractor required
to do? Does this statement describe the works we want him to do completely and wholly?”

• The Tendering process covers the following areas:

– Preparation of Bid Documents
– Specification and Scope of Work
– Terms of Reference (TOR)
– Request for Proposal (RFP)
– Invitation for Bid (IFB) Documents (Bid Solicitation)
– Advertising and Transparency
– Bid Evaluation and Contracting

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Specification and Scope of Work
– Describes clearly the items to be procured
– Specify quantity
– Specify quality (e.g. Brand name and specification to be detailed)
– Terms of Reference (TOR)
– The terms of Reference will contain the following requirement
(i) Background information
(ii) The objectives of the project
(iii) Scope of work to be carried out

(iv) Inputs

(v) Expected output (Deliverable)

(vi) Minimum qualification
(vii) Reporting
(viii) Duration
(ix) Client responsibility
Invitation for Bid (IFB)
• It is a letter sent to contractors who have made pre- qualification requirements. Asking the company to
formally bid for the contract.
• The IFB will include the following:
(i) Letter of Invitation
(ii) Instruction to consultants
(iii) Technical proposal
(iv) Financial Proposal
(v) Terms of Reference
(vi) Standard forms of collection.
Advertising and Transparency
It is mandatory for a contract above 1 Million to be advertised in National Newspaper or Federal Tender
Journal and at least 3 companies must have quoted before the contract can be awarded.
The choice of the winning companies must be at arms length
I.e. not related to the people making the choice and satisfy all other conditions.
Bid Evaluation and Contracting
This involves:
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 Bid opening
Public opening of bid before representatives of contractors presents public Announcement of quoted
price at the bid opening venue.
Signing of the bid form by contractors representative

TENDERING CODES AND PRACTICE

The New South Wales Government has a long term commitment to reform the construction industry within New
South Wales. This commitment embraces a wide range of initiatives covering tendering ethics; best practice;
workplace reform; industrial relations; occupational health, safety and rehabilitation; environmental
management; legislative and administrative reform; law enforcement and industry consultation.

This Code of Practice and the Code of Tendering apply to all Government building, construction, maintenance
and material supply contracts, consultant commissions and government funded projects and sites. This includes
projects involving private sector participation in the provision of the State’s assets, for example by way of
Build/Own/Operate (BOO) schemes and similar arrangements.

The Codes establish the principles and standards of behavior which must be observed by any contractor,
subcontractor, consultant and supplier wishing to do business with the Government, or working on projects to
which the Codes apply, including those with private sector funding.

The Codes also outline what is expected of public sector clients in their dealings with the industry and what is
expected of employer and industry associations and unions operating in the construction industry.

The Codes, as part of the overall strategy, aim to increase industry competitiveness, cooperation and
productivity, and should be seen as a suitable benchmark for all participants in the construction industry. The
Government will be strongly promoting the widespread adoption of the Codes.

The Implementation Guidelines expand on key aspects of the Codes and should be read together with the Code
of Practice and the Code of Tendering.

‘Award’ legally enforceable determination made by the Australian and/or NSW Industrial Relations
Commission containing the minimum terms and conditions of employment to be met by the relevant employer.

‘Affirmative Action’ policy that is intended to redress discriminatory practices, especially in regard to
employment. The policy is commonly used as a means of redressing gender-bias, sexual preference, disability,
or racial discrimination.

‘Client(s)’ parties receiving tenders, including councils and county councils.

‘Consultant’ professional or organization providing design, management, cost or other services for a Principal,
contractor, subcontractor, consultant, client or supplier.

‘Construction industry’ includes all organized activities concerned with demolition, building, landscaping,
maintenance, civil engineering, process engineering, mining and heavy engineering.

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‘Contractor’ individual or organization responsible for the performance of the work specified under a contract.

‘Employer Association’ association whose membership generally consists of employers who operate in the
construction or related industries and which is registered under the Australian and/or NSW Industrial Relations
Acts.

‘Enterprise Agreement’ agreement applying to an enterprise or bargaining unit which has been given legal
force under the Australian and/or NSW Industrial Relations Acts.

‘Fairness’ means objective, reasonable and even-handed. Being fair does not mean satisfying everyone. It can
be unfortunate, but not unfair, that people may be adversely affected by decisions.

‘Industry Association’ organization representing the professional and/or trade or commercial interests of
members in the construction or related industries.

‘Industry Code of Practice’ Code, which has been approved by the Minister for Industrial

Relations, and is a practical guide to achieving the standard of health and safety required by the Occupational
Health and Safety Act, 1983 (and Regulations) for a particular area of work.

‘Over award payment’ payment and/or benefit including superannuation above that set out in the relevant
award and/or legislation.

‘Principal’ the person, entity or organization responsible for contracting with a contractor or consultant for the
carrying out of the work for the carrying out of work.

‘Site Allowance’ award made by the NSW Industrial Relations Commission to provide compensation to affected
employees engaged at a particular work site if they encounter conditions so far removed from the type of
conditions ordinarily experienced on construction sites as to warrant extra compensation.

‘Service Provider’ includes: contractors, subcontractors, consultants and suppliers.

‘Subcontractor’ party that provides a service and/ or product to a contractor and/or subcontractor or client.

‘Supplier’ party that provides a product and/or service to a client.

‘Tenders’ prices, bids, quotations and consultant proposals.

‘Tenderers’ parties submitting tenders.

‘Union’ organization of employees working in the construction or related industries and which is registered
under the Australian and/or NSW Industrial Relations Acts, and includes the Labor Council of New South Wales
as the State’s peak council for employees.

‘Value for money’ is determined by considering all the factors which are relevant to a particular purpose, for
example: experience, quality, reliability, timeliness, and service, initial and ongoing costs, are all factors which
can make a significant impact on benefits and costs. Value for money does not automatically mean the ‘lowest
price’. It is important to be clear about how value for money will be determined in any particular set of
circumstances prior to assessing bids.
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2. Roles

Good working relationships between clients and service providers (contractors, subcontractors, consultants,
suppliers and their respective employees and applicable unions) will be built on trust and cooperation rather than
mistrust and confrontation.

This means that government agencies will look to service providers who are able to work in a cooperative
environment.

2.1 Government Agencies as Clients

Government agencies, their employees and/or agents will observe the following standards of behavior:

 comply with the principles, ethics and procedures in the Code of Practice and the Code of Tendering
 adopt a cooperative (nonadversarial) approach in all business dealings including contract management
 ensure timeliness in all transactions
 maintain confidentiality, particularly in connection with commercial issues
 promote and strive to achieve best practice
 establish internal mechanisms to deal with transgressions from this Code or the Code of Tendering.
2.2 Contractors, Subcontractors, Consultants, Suppliers

All service providers are required to:

 Adopt a cooperative (non adversarial) approach which must extend to all relationships in all
combinations, and at all levels. For example, between: client, contractor, and consultant; contractor,
subcontractor, consultant and supplier; subcontractor, subcontractor, supplier; employer, employees and
applicable unions, etc.
 improve skills, financial planning, management and business efficiency
 maintain high standards in OHS&R and environmental management
 manage day to day industrial relations and ensure that employees are treated fairly and equitably
 strive to achieve international best practice
 comply with the ethics and procedures outlined in the Code of Tendering
 operate within the law and comply with the standards of behaviour in this Code, and
 establish internal mechanisms to deal with transgressions from this Code or the Code of Tendering
 Comply with obligations in the Occupational Health and Safety Act 1983 (and Regulations) as well as
the relevant safety procedures in industry codes of practice, applicable awards and/or enterprise or project
agreements.
2.3 Employer and Industry Associations

All employer and industry associations are required to:

 communicate honestly with government agencies, unions and other industry participants
 cooperate with the government, contractors, subcontractors, consultants, suppliers and unions in industry
reform aimed at improving: relationships, efficiency, productivity, OHS&R performance, and
competitiveness in the construction industry
 encourage compliance by members with this Code and the Code of Tendering
 promote to members compliance with the provisions of applicable awards and/or enterprise or project
agreements, dispute settlement procedures, all orders, formal directions and decisions of any court of
competent jurisdiction and all other legislative obligations relating to employment

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  operate within the law and comply with the standards of behaviour in this Code and the Code of
Tendering
 establish internal mechanisms to deal with transgressions from this Code and the Code of Tendering, and
 adopt and promote a cooperative (non adversarial) approach.
3. Tendering Ethics

On government projects the adoption of the highest ethical principles is required by all parties at all levels of the
project. Parties include government agencies, their agents, contractors, subcontractors, consultants and suppliers.

3.1 Ethical principles

The ethical principles which must be observed are:

 all aspects of the tendering process must be conducted with honesty and fairness at all levels of the
industry
 parties must conform to all legal obligations
 parties must not seek or submit tenders without a firm intention to proceed
 parties must not engage in any practice which gives one party an improper advantage over another
 tenderers must not engage in any form of collusive practice and must be prepared to attest to their probity
 conditions of tendering must be the same for each tenderer on any particular project
 clients must clearly specify their requirements in the tender documents and indicate criteria for
evaluation
 evaluation of tenders must be based on the conditions of tendering and evaluation criteria defined in the
tender documents
 the confidentially of all information provided in the course of tendering must be preserved*
 any party with a conflict of interest must declare that interest as soon as the conflict is known to that
party.*
Application of the Code

The Code of Tendering and the Code of Practice apply to all Government building, construction, maintenance
and materials supply contracts, consultant commissions and government funded projects and sites within the
construction industry. These Codes place obligations that must be met by all parties seeking tenders and those
tendering for work on Government related projects or sites, including those with private sector funding.

Tender documents

Documentation should be reasonably complete so as to reflect the procurement strategy.

Clients should have regard to the costs to the construction industry and the community at large of tender
preparation.

The tender documents:-

 must clearly define the contractual obligations of the parties

 must provide full details of all work covered by the tender
 must draw attention to any special conditions or obligations under the contract which depart from the
client’s normal practice
 must designate any supporting information required from tenderers
 must nominate a person for the provision of additional information

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 Pre-contract documentation, like tendering documents
Tender Documents

Table provides a brief description of each of these documents.

Document Type Brief Description Document Type Brief Description

Notice to Tenderers This document contains a Project Summary, a listing of Tender

Documents, key dates, validity period, contact details, number of
copies required and details of tender submission location and
timing.

Conditions of Tendering This document details the overall Tender Process including the
Delivery Method, Probity issues, Communication issues, the
Criteria for Selection and the Evaluation Process. The Criteria
for Selection is dealt with separately in Section 5.4.

Tender Form & These documents request specific information from the
Tenderers concerning the works. For example, Tenders are
Schedules generally required to provide an overall cost, a breakdown of
this cost, a program, details of manpower, plant and equipment,
personnel, subcontractors and methodologies. The

Tender Form is a formal statement of the Tenderer’s offer to

supply services in accordance with the Tender Documents.

Conditions of Contract This document contains the General Conditions of Contract

which sets out the contractual basis for carrying out the works.
In addition, the Special Conditions are sometimes included
which are unique to the client and/or project.

Specification Depending on the type of Delivery Method chosen, this

document may be a Project Brief or a detailed Specification of
the works. These documents set out the performance and
technical criteria for the project.

Drawings The number and standard of drawings provided is dependent on

the chosen Delivery Method.

Additional Information Additional information concerning the project may include

Environmental Impact Study (EIS) Reports, EIS Working Papers
and other documents relevant to the development of the project.

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In the preparation of the Tender Documents, it is recommended that the Client ensures that: The level of Tender
Documentation is commensurate with the chosen Delivery Method.

• The Tender Documents provide full details of all work to be covered by the tender and all known information
for the Tenderers to assess the project risks.

• The Tender Documents are drafted in a clear and concise manner without unnecessary repetition and terms and
phrases used throughout the documents should have consistent meanings.

• The Tender Documents should include copies of any Client procedures, standards or guidelines that the
Tenderer is required to comply with.

• The Tender Documents do not contain any poorly worded or ambiguous statements that may lead to prolonged
disputes during construction (or implementation).

• The Tender Documents state whether the Client will be providing an “in house” tender price as part of the
tender process. In particular, public companies need to have regard to the requirements of the Corporations Law
in relation to this practice.

• The Tender Documents clearly state the communication protocols such as the documents which should or may
be submitted in electronic form. They should also state the Client Contact person responsible for dealing with
issues arising from the tender and for arranging site visits and inspections. This person needs to be fully familiar
with all tender documentation and readily available for answering enquiries during the tender period. It is
recommended that this person is also experienced in contractual matters and probity requirements.

• The Tender Documents clearly state the number of copies of the tenders required.

• The Tender Documents clearly state the method and time of lodgment of tenders, acknowledgement of
Tenderer submissions and the tender validity period.

• The Tender Documents clearly state the Criteria for Selection, including reference to certain criteria that the
Client considers are most important, the Evaluation Process and Selection Process.

• The Tender Documents contain a returnable covering sheet highlighting all main sections of the documents so
that Tenderers can formally acknowledge its receipt in writing. These covering sheets should be returned by the
Tenderers within 3 business days of receipt.

• The Tender Documents clearly specify the contractual obligations of the parties with appropriate allocation of
risks. For guidance it is suggested that risk be generally allocated to the party where that risk is within the party’s
control to manage.

• The Tender Documents clearly identify Special Conditions of Contract that are unique to the Client or project.
This is particularly important if these conditions depart from a Client’s normal practice.

• Any special Conditions of Contract stipulated by third parties as part of an environmental approval process
should be specified (i.e. or part of an environmental impact approval or development application process).

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• The Tender Documents clearly specify any arrangement for the notation of agreements from the client and
include the relevant agreements, subject to normal confidentiality requirements, in the Tender Documentation.

• The Tender Documents should also clearly specify that documents are required to be completed and lodged as
the Tender, and these should normally be described as the Tender Form & Schedules as indicated in Table.
While not a prerequisite, it may be appropriate that the Tender Documents provide an opportunity for Tenderers
to offer alternate tenders, provided that a conforming Tender is also provided. The conditions under which
alternative proposals are to be submitted are to be clearly stated. The alternative may involve some innovation
and may result in better “value for money” for the Client.

In regard to confidentiality obligations described in the Tender Documents, these should not be such that they
unreasonably constrain the Tenderer from taking the steps required to prepare its tender, such as consulting with
third party legal, financial and technical advisers and with prospective partners and subcontractors.

Manage development of human and physical costs

 Determining and monitoring current equipment, labor and materials charge-out rates.
 Comparing rates of elements of the work with relevant existing records of costs
 Allocating staffs the tender preparation process, supervise to ensure appropriate rates are applied to the bill of
quantities, and monitor the calculation for preliminaries, overheads and all supplementary costs.
 Managing and supervising staffs’ development of the project schedule.
Project Cost Management

A subset of project management that includes the processes required to ensure that the project is completed
within the approved budget. It consists of resource planning, cost estimating, cost budgeting, and cost
control.

Project Cost Management

The process of placing responsibility on the designers and implementers to perform within established budgets.
Actual and budget project costs are compared. Two principles apply: (1) There must be a basis for comparison;
and (2) Only future costs can be controlled.

Cost

The monetary value or price of a project activity or component that includes the monetary worth of the resources
required to perform and complete the activity or component, or to produce the component. A specific cost can be
composed of a combination of cost components, including direct labor hours, other direct costs, indirect labor
hours, other indirect costs, and purchased price. (However, in the earned value management methodology, in
some instances, the term cost can represent only labor hours without conversion to monetary worth.)

Cost/Benefit

A criterion for comparing programs, projects, and alternatives when benefits or a given objective.

Cost Budgeting

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The process of aggregating the estimated cost estimates of individual activities or work packages to establish a
cost baseline.

Cost Control

The process of influencing the factors that creates variances, and controlling changes to the project budget.

Cost Estimate Validation

Process (CEVP) Using input from various disciplinary experts, costs associated with potential risks to a project
are assessed and the probability of delivering a project at a given cost and by a given date is determined.

Cost Estimating

The process of developing an approximation of the cost of the resources needed to complete project activities.

Cost Management Plan

The document that sets out the format and establishes the activities and criteria for planning, structuring, and
controlling the project costs. A cost management plan can be formal or informal, highly detailed or broadly
framed, based on the requirements of the project stakeholders. The cost management plan is contained in, or is a
subsidiary plan of, the project management plan.

Cost Performance Index (CPI).

A measurement of cost efficiency on a project. It is the ratio of earned value (EV) to actual cost (AC). CPI = EV
divided by AC. A value equal to or greater than one indicates a favorable condition, and a value less than one
indicates an unfavorable condition.

Direct Costs

The costs directly attributed to a work-scope, such as labor, material, equipment, and subcontracts, but not the
cost of operations overhead and the labor, material, equipment, and subcontracts expended in support of the
undertaking. Direct Costs, Hard Costs, and Construction Costs are synonymous.

Direct Labor Costs

Costs accruing from expended labor excluding the bonus portion of overtime, insurances, and payroll taxes.

Direct Material Costs

Costs accruing from material acquisition, including purchase price, freight, and taxes.

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Prepare complete tender documentation and operating margins
 Reviewing and assessing quotes of subcontractors to ensure there are no variations to the tender.
 Making sure the availability of plants and equipments
Tender document

Technical bid
Name of work: appointment of consultant for project

Management consultancy services for various

Functional/facility buildings at ipr/fcipt

Campus

Tender notice no: ipr/tn/civil/pmc/1/2007

Issued to : ________________________________________

Address : ________________________________________

Phone no : ________________________________________

Issued on : ________________________________________

Issued by : ________________________________________

Last date for submission : 08-02-2007 up to 1:00 pm.

Technical / commercial terms

Tender notice no. Ipr/tn/civil/pmc/1/2007 (two parts tender)

Appointment of consultant for project management consultancy services

For various functional/facility buildings at ipr/fcipt campus at Gandhi nagar

Institute invites sealed tenders in “two part” for appointment of consultant for providing

Project management consultancy (pmc) services relating to project supervision and quality

Assurance, etc., for the various building works of institute as detailed in the tender document.

The tender document can be viewed and downloaded from our website

Www.ipr.res.in/purchasetenders.html. The hard copy of the same shall be available from

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16-01-2007 to 31-01-2007 during 10.00 am. To 5.00 pm. On working days (Monday to

Friday) on payment of rs 100/- (non-refundable) by pay order or demand draft in favour of

"Institute for plasma research” payable at Ahmadabad from the project administrator at the above address.
The bid shall have to be submitted duly filled and signed at the above

Mentioned address. The bidders who has downloaded the document from website should

Attach ,along with the bid document , a pay order or demand draft of rs. 100/- ( non

Refundable) in favour of “institute for plasma research” payable at ahmendabad

The offers should be submitted in two sealed covers one superscribed “technical bid” and

Other “price bid”. Both covers shall be put in another sealed cover super scribing the envelope

With “tender for project management consultancy services, notice no. And due date”. The

Last date of submission of bid is 8-02-2007 on or before 1.00 pm. The technical bid will be

Opened at 2.30 pm. On the same day in the presence of attending tenderers or their authorized

Representatives.

After opening of technical bid, the capability and suitability of the bidders shall be evaluated

And price bid of the qualified bidders shall only be opened in the presence of the attending
Bidders. The date of opening of price bid will be informed to the qualified bidders.

Following are the qualifying criteria:

1) The firm / company should have full-fledged establishment /office in Ahmadabad

Or gandhinagar and facilities like telephone, computers, printers, fax, e-mail

Facilities & soft wares like ms office, ms project, AutoCAD etc.

2) The firm / company should have a minimum of 5 years standing i.e. Established at

Least on or before 1-1-2002

3) the firm / company should have rendered services pertaining to construction

Management & supervision for civil, electrical, havoc, interior & mechanical

Works for government / semi government/reputed corporate clients

4) Should have rendered pmc services for at least one project costing not less than

Rs.400 lakhs including civil , electrical, hvac, mechanical & interior during

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Pervious 5 years for government / semi government/reputed corporate clients

Instructions to the tenderers

1. The tenderers should submit the entire documents (technical bid and price bid) with all

The pages of document duly signed.

2. The offers should be submitted in two sealed covers one super scribed “ technical bid”

And other “price bid”. Both covers shall be put in another sealed cover super scribing the

Envelope with “tender for project management consultancy services, notice no. And due

Date”.

3. If any clarification is required should be obtained before filling tender document

4. If any discrepancy is there between figures and words for quoted percentage, the quoted

Percentage in words will be considered as correct.

5. The tenderers who do not fulfill all or any of the tender conditions or if the tender is

Incomplete in any respect, will be summarily rejected.

6. The institute is not bound to accept the lowest tender.

7. The director, institute for plasma research reserves the right to accept or reject the tenders

In full or part without assigning any reason thereof.

Details required to be submitted with technical bid for

Appointment of project management consultancy (pmc)

Rvices for various functional/facility buildings at ipr/fcipt

Campus

Me of the firm :

Office set up of the firm

1.1 office address :

……………………………………………

……………………………………………

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1.2 year of establishment :

1.3 phone no. & contact person

With designation : shri………………………………………..

…………………………………………….

Ph no……………………………………..

Fax no…………………………………….

E-mail……………………………………..

1.4 details of branch offices if any:………………………………………….

………………………………………….

………………………………………….

1.5 organizational setup of the firm

Total staff strength both technical

And administration with their name, age

Qualification and experience : ……………………………………………

1.6 details of office equipments

1.7 details of computerizations in

The office and soft wares

Adopted : …………………………………………..

…………………………………………..

2. Details of sister concerns : ………………………………………….

3. Details of works carried out and on hand for which they have provided services as

Project management consultant in last five years with details such as name of work,

Year of completion, client name and address, cost of work, time period of construction,

Nature of work, etc., :…………………………………………..

3.1 Any other detail you would like to intimate in support of your application

for appointment : …………………………………………

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 Signature of the authorized

Person with seal of the firm

(Note: attach separate sheet for furnishing information in case the space in the format is

Insufficient)

Evaluate tender documentation prior to submission

Guide to tender evaluation

1. Introduction

The purpose of evaluation is to identify which bid in a process offers the most economically advantageous
proposal based on the criteria specified in the invitation of tender or quote document.

2. Pre Qualification Questionnaires

A Pre Qualification Questionnaire (PQQ) is used to identify a short-list of suitable companies to invite
to tender in the restricted, competitive dialogue and negotiated procedures. The questionnaire should
only seek to identify the relevant capacity (financial and resources), experience and expertise of the
company. It must not be used to evaluate possible solutions that the company may offer and any
criteria used at the pre-qualification stage should not be used again or revisited when evaluating the
invitation to tender.
Many elements are Pass / Fail during PQQ stage and may require input from specialist officers such as
Finance to undertake a financial assessment of bidders to be shortlisted.
Where sections of the PQQ are to be scored in order to rank bidders, the process detailed within this
toolkit for applying weightings and scoring structures can be applied.
If references are required these must be obtained at PQQ stage as once a company is short listed, you
can no longer assess their performance in this way.

When using an open tender procedure, the questions normally asked at PQQ, should be asked as part
of the invitation to tender. The evaluation of the tenders should be undertaken in the same manner as a
restricted procedure, first assessing the capability and capacity of all bidders (stage 1) to identify any
which can be eliminated on that basis and to produce a short list to assess at stage 2.

3. Evaluation Criteria

Tenders should be assessed on the value for money they offer the authority that is, the optimum
balance of whole-life costs and benefits that meet the customer’s requirements. To achieve this, a
cost / quality ratio should be applied to the evaluation methodology to reflect the risk and value of the
contract. The following can be used as a guide:

4. Cost Criteria

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Costs should always be considered based on the whole life cost (WLC) involved with the goods /
works / services to be procured. Whole life costs comprise all costs to the Council of acquiring,
owning, maintaining and disposing of goods, services or works. If the duration of a contract is
unknown due to maintenance, licensing etc, assume the value of the contract at 48 months (4 years)
and structure the cost evaluation to consider costs for this period.
The list below provides an indication of the types of costs that may be include in whole life costs.
Those to be included will vary dependent on the goods / services / works being procured.

 Initial price  Energy / water

 Delivery and installation consumption
 Costs of operation  Depreciation
 In-house management  Disposal
resources  Environmental impact
 Consumables  Storage / retainer
 Spare parts  Upgrade
 Licenses  Staff
 Taxes  Re-procurement
 Maintenance

It is important that the pricing schedule allows and encourages bidders to include all whole life
costs associated with the project.

5. Quality Criteria

Quality Criteria should represent the key issues for consideration when assessing the suitability
of the bid proposal. The list below provides an indication of the types of criteria that may be
included. These will vary dependent on the goods / services / works being procured.

 Cost effectiveness
 Technical merit  After sales services
 Aesthetic and functional  Technical assistance
characteristics  Delivery date, delivery
 Environmental period and period of
characteristics completion
 Running costs

6. Key Principles of Evaluation

Fairness All tender or quote evaluations must be undertaken in a fair manner. This means each
bid deserves equal treatment and assessment and scores should be applied consistently.
Confidentiality all bids during a tender process are confidential and should not be discussed with
any person not involved in the evaluation process.

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Security All bid documentation must be stored securely during the evaluation period. Hard
copies should not be removed from Council premises or left on desks overnight. Any electronic
versions should be transferred using secure encryption methods.
Evaluation criteria Bids can only be assessed against the criteria issued in the invitation. Any
criteria not included in the invitation cannot be considered or scored at evaluation stage. Scores
cannot be awarded or withheld based on the structure of the bid and how ‘easy’ it is to assess.

Bid content Bids can only be assessed based on what information is provided with the
submission. Assumptions should not be made regarding proposals and prior knowledge of any
bidder cannot be taken into account. At Tender stage (or open stage 2) only the proposal can be
evaluated – not the company.
Scoring All bids must be scored based on their performance against a set scoring model which
must be included in the invitation document. Bids should not be compared with others to
determine scores.
7. Evaluation Panels
Evaluation panels should be identified prior to the issue of invitation documents to ensure that
the panel are engaged in the process and understand and agree with the evaluation criteria to be
applied.
The panel should be proportionate to the project and should include representation from the key
stakeholder areas. A panel should have a minimum of 2 members for smaller projects limited to
one area and a minimum of 3 members for larger projects or those affecting multiple areas /
teams. For larger projects, Project Managers may join the panel to evaluate or to facilitate the
process as appropriate. Evaluation panels should be kept consistent throughout the tender
process where possible.
Evaluation panel members have a responsibility to understand the specification and the
evaluation criteria as it relates to their area. Prior to the receipt of bids, the panel must decide
who will evaluate which sections. In most cases, all members will evaluate all sections to
provide a holistic view however in some circumstances, specific sections may be evaluated by
specialist areas e.g. eServices may evaluate technical responses. The panel must ensure that all
areas can be competently assessed by officers with suitable knowledge and understanding of the
respective area they are evaluating.
It is good practice to engage with stakeholders in developing a specification for major
procurements, which may include service users, citizens and elected members.
However, the evaluation process itself needs to ensure probity and compliance with procurement
legislation and case law. Tender evaluation is the application of a structured methodology for
identifying how well bidders propose to meet the identified criteria and therefore should be
undertaken by officers of the Council. The core evaluation team should be limited to those
officers directly involved in managing the procurement. In some limited cases it may be
appropriate to engage service users to provide feedback into the evaluation panel on certain
elements of bids, but this needs to be in a controlled manner in order to maintain objectivity.
Panel members must also ensure they understand the time commitment and resource they will be
required to contribute in order to evaluate the responses.
Where this is unclear, guidance should be sought from the lead project officer.
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 8. Evaluation Process

The following guidelines provide a framework that will be suitable for many tender evaluation
processes.
8.1. Prepare a structured scoring matrix to record scores and notes made by the evaluation panel
and distribute this electronically to all members of the evaluation panel. Templates are available
here. Users to provide feedback into the evaluation panel on certain elements of bids, but this
needs to be in a controlled manner in order to maintain objectivity. Panel members must also
ensure they understand the time commitment and resource they will be required to contribute in
order to evaluate the responses. Where this is unclear, guidance should be sought from the lead
project officer.
0 Significant indications that proposal lacks certain requirements in this area to
achieve the required standard of service delivery / information totally inadequate
Inadequate

1 Some concerns that proposal may lack certain requirements in this area to achieve
the required standard of service delivery
Concerns

2 Information indicating potential to deliver outcomes

Potential

3 Comprehensive and strong information indicating proposal capable of delivering

outcomes to required standard
Capable

8.2. In addition to awarding a score, panel members must write notes justifying the score they
have selected. Notes are used in the scoring moderation and to compile feedback for bidders,
which is a legal requirement. All notes may also be the subject of a future FOI request therefore
it is crucial that notes are maintained throughout and are considered, accurate and relate solely to
the relevant criteria.

8.3. Panel members should input their scores on their electronic scoring matrix and ensure they
take an electronic or printed copy to the moderation meeting.
8.4. The evaluation panel should convene and look at each response by each bidder for each
criterion. The panel should discuss their individual scores and reach agreement on a moderated
score and justifying comments, taking into account each panel members perspective. It is
important that scores are not formulated by taking an average of the individual scores as this does
not account for any panel members misunderstanding of the response or different perspectives of
the panel. An average score also does not enable meaningful notes to be made. A ‘moderated’
score sheet should be created at this meeting to provide a record of the scores awarded.
8.5. Eliminate any bidder which scores 0 on any single criteria.

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8.6. Prices should be added to the moderated score sheet and the overall marks calculated using
the process described in Appendix 1 to identify the highest scoring bidder.
9. Clarification
Where elements of a bid are unclear, you may need to seek clarification from the bidder. Where
this is done, ensure clarification is requested and returned in writing and you maintain a fair
approach to this with regards to all bidders.
You may decide to incorporate site visits to the supplier, or a customer of the supplier as part of
the evaluation process. Presentations or demonstrations may also be used in circumstances where
it is pertinent that the proposal is viewed i.e. systems procurement. Where such additional
clarification is undertaken, the following guidance must be adhered to:

 An agenda must be provided to the bidders stating what they will be expected to
demonstrate to you
 The evaluation panel should make notes and can ask clarification questions about what
they have been shown. Where any areas are not addressed by the bidders, further
questions cannot be asked by the panel to prompt responses.
 Scores can only be amended where areas are addressed in the clarification.
They can be increased or decreased accordingly. Where any areas are not addressed at a
clarification session, scores cannot be amended.
 Site visits cannot be used to assess the bidders capacity or capability in any way – they
must only focus on aspects of the bid submitted.

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