CE-441B

PROBLEM 1 BIDDING
Consider a project whose estimated cost is RS. 1,00,000.The details
of the financial bids submitted by four bidder are given below

S.NO Bidder Financial bid ( in

thousands, INR)
1 A 95
2 B 87
3 C 64
4 D 76
Case 1
Evaluation Criteria
 Award to lowest bidder

Project is awarded to C being the lowest

bidder.
Case 2 -Technical Scores
to be considered.
S.NO Bidder Financial bid ( Score of a
in thousands, technical bid (
INR) out of 100)
1 A 95 80
2 B 87 75
3 C 64 45
4 D 76 60

Evaluation Criteria-
1) Technical Score should be greater than 50.
2) For technically qualified bidders- cost only criteria.
 Bidder C disqualified.
 A,B,C qualifies on technical terms- now cost

only criteria.
 A > B > D

 D selected being the lowest bidder.

ALTERNATIVE SCENARIO
 EVALUATION CRITERIA
 Technical score must be greater than 50.
 Job awarded to bidder having maximum

composite score incorporating equal weights

of technical and financial scores.
Contd..
 C disqualified having technical score less
than 50.
 Now for others Financial scores need to work

out.
 For that, award 100 score to least bid and

scoring others relative to that.

Contd..
S.NO Bidder Financial Score of a Financial Composit
bid ( in technical score e Score
thousands bid ( out
, INR) of 100)
1 A 95 80 75 77.5
2 B 87 75 86 81
3 C 64 45 - -
4 D 76 60 100 80

For B Financial score= 100-[(87-76)/76*100]= 85.52

composite score = 0.5*75+0.5*85.2 = 80.26

B is awarded the bid having highest composite score.

Another Alternative
 EVALUATION CRITERIA
 Technical score must be greater than 50.
 Job awarded to bidder having maximum

composite score incorporating 80% weights

of technical and 20% of financial scores.
Contd..
S.NO Bidder Financial Score of a Financial Composit
bid ( in technical score e Score
thousands bid ( out
, INR) of 100)
1 A 95 80 75 79
2 B 87 75 86 77.2
3 C 64 45 - -
4 D 76 60 100 68

For B, Composite Score= 0.8*75+0.2*86 =77.2

A is awarded the bid having highest composite score

Another possible criteria
 In any case, the call may be cancelled if the
award price deviates more than 20% from the
estimated costs.

S.NO Bidder Financial bid ( in Status based on

thousands, INR) this criteria
1 A 95 Safe
2 B 87 Safe
3 C 64 Cancelled*
4 D 76 Cancelled*

*Situation Specific