Professional Documents
Culture Documents
Procurement Management: Xiangjun LI
Procurement Management: Xiangjun LI
Xiangjun LI
Xiangjun_jinan@126.com
Reference
2
Method of procurement
• International competitive bidding
• Issue bids for advertisement in an acceptable
international language and award contracts to the
lowest acceptable bids, subject to certain
considerations for qualitative judgment.
• Provide all eligible bidders with timely and
adequate notification of a borrower’s
requirement and an equal opportunity to bid for
the required goods, works, and non-consulting
services. 3
Method of procurement
• Limited international bidding
• Direct invitation , without open advertisement
• An appropriate method of procurement, only a
limited number of suppliers or other exceptional
reason
• Borrowers shall seek bids from a list of potential
suppliers broad enough to assure competitive
price
4
Method of procurement
• National competitive bidding
• The most appropriated method
• Public procurement in the country of the
borrower
• Unlikely to attract foreign competition
5
Method of procurement
• Shopping
• Based on comparing price quotations
obtained from several suppliers with a
minimum of three
• Procuring limited quantities of readily
available off-the-shelf goods or standard
specification commodities of small value,
or simple civil works of small value
6
Method of procurement
• Framework agreement
• A long term agreement with suppliers, or
contractor, or service provider.
• Set the basic terms for business relationship,
serving as a prelude to a signed contract or a
shared approach to a specified objective.
• Formal agreement and provides the necessary
context to establish a relationship, but can be
modified with terms being added or deleted at a
later date. 7
Method of procurement
• Direct contracting
• Contracting without competition
• Most appropriate in the case of single
source
• Other circumstances, include extend an
existing contract, or natural disaster, or
emergency situation.
8
International Competitive Bidding
9
International Competitive Bidding
11
International Competitive Bidding
• Prequalification of bidders
• Necessary for large and complex works
• Ensure that invitation to bid are extended
only to those who have adequate
capabilities and resources.
• Prequalification shall be based on entirely
upon the capabilities and resources of
prospective eligible bidders to perform the
particular conditions satisfactorily. 12
International Competitive Bidding
• Prequalification of bidders
• Prequalification documents including:
General and specific experience
Capability of construction
15
International Competitive Bidding
• Bidding documents
• Documents generally include:
Invitation to bid
Form of contract
Conditions of contract
• Bidding documents
• The bidding documents for works may
indicate the estimated total cost of the
contract, but shall not indicated the
borrower’s cost estimated such as priced
bill of quantities.
18
International Competitive Bidding
• Validity bid
• A period specified in the bidding
documents
• Shall be sufficient for the borrower to
complete the comparison and evaluation of
bids
• Contract can be awarded in the period.
19
International Competitive Bidding
• Bid security
• Borrower have the option of requiring a
bid security.
• The amount and form shall be specified in
the bidding documents.
• Remain valid for a period sufficient to
provide reasonable time for the borrower
to act if the security to be called.
20
International Competitive Bidding
• Bid security
• Bid security shall be released to
unsuccessful bidders once the contract has
been signed.
• Declaration can replace bid security.
21
International Competitive Bidding
• Clarity of bidding documents
• Bidding documents shall be so worded to
permit and encourage international
competition.
• Bidding documents shall set forth clearly
and precisely the work to be carried out.
• Bidding documents shall be specified any
factors .
22
International Competitive Bidding
• Clarity of bidding documents
• All prospective bidders shall be provided the
same information.
• A pre-bid conference may be arranged whereby
potential bidders may meet with borrower
representative to seek clarification.
• All modification of bidding documents, shall be
send to each recipient of the original bidding
documents and all bidders on record in sufficient
time before the deadline for receipt of bids. 23
International Competitive Bidding
24
International Competitive Bidding
• Pricing
• Bid for goods shall be invited on basis of
CIP for all goods manufactured abroad and
to be imported.
• Bid for goods manufactured in the
borrower’s country shall be invited on the
basis of EXW plus cost of island
transportation and insurance to the place of
destination. 25
International Competitive Bidding
• Price adjustment
• Bid price will be fixed or price adjustment
will be made to reflect any changes in
major price components of the contract.
• Price adjustment provisions are necessary
in contract which extend 18 months.
• Contract of shorter duration may also
include a similar provision for price
adjustment when future local or foreign
inflation is expected to be high. 26
International Competitive Bidding
• Price adjustment
• Price shall be adjusted by the use of
prescribed formula.
27
International Competitive Bidding
• Conditions of contract
• Clearly define the scope of the work
• The goods to be supplied
• The service to be provide
• The right and obligation
• The function and authority of engineer
• A balanced risk allocation and liabilities
29
International Competitive Bidding
• Performance security
• Security in an amount sufficient to protect the
borrower in case of breach of contract by the
contractor.
• The amount of security depend on the type of
security furnished and on the nature and
magnitude of the works or facilities.
• A portion of this security shall extend sufficiently
beyond the date of completion of the works or
facilities to cover the defect liability. 30
International Competitive Bidding
• Performance security
• In contract for supply of goods the need for
performance security depend on the market
conditions and commercial practice for the
particular kind of goods.
31
International Competitive Bidding
• Retention money
• Contract for works may provide for a
percentage of each periodic payment to be
held as retention money until final
acceptance.
• Contractor may be allowed to replace
retention money with an equivalent
security in the form of a bank security or
guarantee after provisional acceptance. 32
International Competitive Bidding
33
International Competitive Bidding
• Force majeure
• Force majeure should defined in the
conditions of contract
• Not be considered a default
34
International Competitive Bidding
• Time for preparation of bids
• The time allowed for the preparation and
submission of bids shall be determined with due
consideration of the particular circumstance of
the project and magnitude and complexity of the
contract.
• Generally, not less than 6 weeks.
• Large work or complex item of equipment are
involved, period shall be not less than 12 weeks.
35
International Competitive Bidding
36
International Competitive Bidding
37
International Competitive Bidding
• Clarifications and alterations of bids
• Bidders shall not to be requested or
permitted to alter their bids.
• The borrower shall ask the bidders for
clarification needed to evaluation their bids
but shall not ask or permit bidders to
change the substance or price of their bids
after the bid opening.
38
International Competitive Bidding
• Confidentiality
• Information relating to the examination,
clarification, and evaluation of bids and
recommendations concerning award shall
not be disclosed to bidders or other
persons.
39
International Competitive Bidding
• Examination of bids
• The bids shall meet the eligibility
requirement
• Have been properly signed
• Are accompanied by the require securities
or required declaration signed
• Are substantially responsive to the bidding
documents
• Are otherwise generally in order. 40
International Competitive Bidding
42
International Competitive Bidding
• Extension of validity of bids
• Borrower shall complete the evaluation of
bid and the award of contract within the
initial period of bid validity.
• An extension of bid validity, shall be
requested in writing from all bidders
before the expiration date.
• Bidders shall not be requested or be
permitted to change the quoted price or
other conditions of their bid. 43
International Competitive Bidding
44
International Competitive Bidding
• Postqualification of bidders
• If the bidders have not been prequalified,
borrower shall determine whether the
bidder whose bid has been determined to
offer the lowest evaluated cost has the
capability and resource to effective carry
out the contract as offered in the bid.
• The criteria to be meet shall be setting out
in the bidding documents. 45
International Competitive Bidding
• Award of contract
• Borrower shall award of contract, within
the period of validity of bid.
• Bid has been determined:
• To be substantially responsive to the
bidding documents
• To offer the lowest evaluated cost
46
Thanks !
Keep Connecting In The Future
47