Tendering, Bid Evaluation &

Award Process

Engr. Salman Mayo,

XEN (MECH) HPTI Mangla,
MS MECH. (DESIGN), UET LAHORE.
Pho ne # 0300-7576603
0320-7576603
Email: sulman60@gmail.com
Sequence/ Outline / Agenda of Presentation

 What is Management/ Principals /PMBOK

Project, attributes, steps &stakeholders
Procurement, purchase and methods
What are tenders?
Glossary of terms
 Nature of Bidding Documents
Tender process
Incoterms
Bid Evaluation
Contract Award / Process
Conclusion
Before we start

3
 The Blind Men/Women and the Elephant

 Strong opinions
 Each is partly right
 All were wrong
 Not one of them saw the elephant
 The moral of the story from a project
management perspective…
 Many experience or read about an aspect or element
of project management and think they know it ALL
Accidental Project Managers are out there in great numbers

4
Sources of Project Activities: Brainstorming
What is Management ?
Management comprises:
 planning,
organizing,
staffing,
leading or directing,
 controlling an organization or initiative
to accomplish a goal.
Resourcing
Management defined (POCCC)

Planning
Organizing
Commanding
Coordinating
Controlling
4 Types of Management

The four most common types of managers are :

1. first-line managers,
2. middle managers,
3. top-level managers,
4. team leaders
Administrative Management
 General administrative theorists
Writers who developed general theories of what
managers do and what constitutes good
management practice
 Henri Fayol (France) *FOYALISM*
Fourteen Principles of Management:
Fundamental or universal principles of
management practice
 Max Weber (Germany)
Bureaucracy: Ideal type of organization
characterized by division of labor, a clearly
defined hierarchy, detailed rules and
regulations, and impersonal relationships
Weber’s Ideal Bureaucracy

 Division of Labor
 Authority Hierarchy
 Formal Selection
 Formal Rules and Regulations
 Impersonality
 Career Orientation
Types of Power in Organizations

Coercive power Power based on fear.

Reward power Power based on the ability to distribute

something that others value.

Legitimate power Power based on one’s position in the

formal hierarchy.

Expert power Power based on one’s expertise,

special skill, or knowledge.

Referent power Power based on identification with a

person who has desirable resources or
personal traits.
Project Management Body of Knowledge (PMBOK)

The Project Management Body of Knowledge (PMBOK)

is a set of standard terminology and guidelines (a body of
knowledge) for project management.
 A Guide to the Project Management Body of
Knowledge (PMBOK Guide), a book whose seventh edition
was released in 2021.
Earlier versions of the PMBOK Guide were recognized as
standards by the American National Standards Institute (ANSI)
which assigns standards in the United States (ANSI/PMI 99-
001-2008)
 Institute of Electrical and Electronics Engineers (IEEE 1490-
2011).
Timeline of PMBOK
Year Title Revision summary

Published in 1996 by the Project Management

1996 PMBOK Guide Institute (PMI),

The second edition (published as the 2000

2000 PMBOK Guide, 2000 Edition Edition) added new material reflecting the
growth of practices.
The third edition (2004) was a significant edit
2004 PMBOK Guide, Third Edition from the earlier editions, changing criteria for
inclusion from "generally accepted" practice to
"generally recognized as good practice".
2008 PMBOK Guide, Fourth Edition[4]
2013 PMBOK Guide, Fifth Edition[6]
The sixth edition (September 2017) added
2017 PMBOK Guide, Sixth Edition several topics and included agile practices for the
first time.
The seventh edition (2021) presents major
2021 PMBOK Guide, Seventh Edition structural changes, such as replacing the 10
knowledge areas with 12 principles and including
agile practices more comprehensively.
Process Groups of PMBOK

The five process groups are:

Initiating:.
Planning:
Executing:
Monitoring and Controlling:
Closing:
What Is a Project?
A temporary endeavor undertaken to
“

create a unique product or service.”*

Te rm Me a n s th a t a P ro je c t
temporary Has a beginning and end
endeavor Involves effort, work
to create Has an intention to produce something
(project "deliverables"
unique One of a kind, rather than a collection of
identical items
product Tangible objects, but could include things like
computer software, film or stage works
service Might include the establishment of a day-care
center, for instance, but not its daily
operations.
*2000 PMBOK Guide (p. 4).
We need to implement; BUT HOW????,
That’s a Project !!!!!
What is a Project?

Projects is a temporary rather than permanent social systems or work

systems that are constituted by teams within or across organizations to
accomplish particular tasks under time constraints.
OR
A Project is a temporary endeavor undertaken to accomplish a unique
product
or service

PMBOK
OR
In simple words it’s a collection of activities which needs to be performed in
certain defined constraints by a team to realize the need.
What is Project Management?

The application of
knowledge,
 skills,
 tools,
and techniques
to project activities in
order to meet project
requirements
Attributes of a Project

 Unique purpose
 Temporary
 Requires resources
 Should have a primary sponsor
and/or customer
 Involve uncertainty
Steps in a Project
 Step 1 : Realization of need

 Step 2 : Planning for its fulfillment

 Step 3 : Decision to produce or Procure

 Step 4 : Procurement

 Step 5 : Execution / Commissioning

 Step 6 : Verify fulfillment of parameters

 Step 7 : Handover for Operations

Who are the Stakeholders of Project?
Stakeholders are people or entities who have a say in implementation of the
project and they get affected w.r.t. Project’s success or failure.
They are :
 Employer - Those who are implementing
 Contractor -Those who are to supply, construct/ erect &
commission the project equipment or provide
respective services

 Consultant - or Engineers who specify, quantify, select and

supervise the supply, construction/erection,
commissioning & Handover of Project for Operations

 Financial Institute - Those who are lending money for project

What is Procurement ?

 Procurement is the acquisition of goods, services or works from an

outside external source.
 It is favorable that the goods, services or works are appropriate and
that they are procured at the best possible cost to meet the needs of
the purchaser in terms of quality and quantity, time, and location.
What is the Requirement ?
 May be for Equipment / Machinery

 May be for Technology / Consultancy

 May be for Execution / Services / or for Safety / Quality

What are the Methods for Procurement ?

• Agreement The six procurement methods are

• Purchase order i. open tendering,
ii. restricted tendering,
• Rate contract iii. request for proposal,
• Auction iv. two-stage bidding,
v. quotations,
• Tender vi. and single-source procurement
• Acquisition
What is a Tender ?
A written invitation sent to potential suppliers of a good or service to inform
them about the information required for the buyer to choose among them.
Tender request documents;
 also referred to as invitations to tender,
Requests for Tender(RTF),
Requests for Proposal (RFP) etc

Its Objective
• To Ensure Best Fit Supplier is selected to Supply Goods/ Services to
customer which offers best value of money

• Selection process should be business ethics driven- Fair Practice

• More options

• Equal opportunity
Routes to be followed for Tendering
Depends primarily on the Statutory Norms or the Financial
Institutes .
• ICB : International Competitive Bidding

• LICB : Limited International Competitive Bidding

• NCB : National Competitive Bidding

Tenders can be issued through:

 Expressions of interest (EOI) - used to shortlist potential suppliers

before seeking detailed offers.
 Request for information (RFI) - used in the planning stage to assist
in defining the project, however, not used to select suppliers.
 Request for proposal (RFP) - used where the project requirements
have been defined, but an innovative or flexible solution is needed.
 Request for quotation (RFQ) - invites businesses to provide a quote
for the provision of specific goods or services.
 Request for tender (RFT) - an invitation to tender by public
advertisement open to all suppliers.
Glossary of Terms

FIDIC, French word, International Federation of

Consulting Engineers
ENAA, Engineering Advancement Association of
Japan
MDB, Multilateral Development Banks
Bid ; means an offer in response to an invitation
by a person or firm expressing his willingness to
undertake a specified task at a bid price
Bidder; means a person who submits bid
Contract; means an agreement enforceable by
law between two or more than two parties
Glossary of Terms

Contractor; means a person, firm or company who

undertakes to supply of goods, services or works
Bidding documents; means, the documents issued by the
procuring agency to the prospective bidders, containing a
set of conditions and requirements of works / goods
required to completed/supplied
Bid security; means, security provided by the bidder as a
guarantee to his bid/ offer. Normally 1 % to 5 % of the bid
price.
Bid validity; means, the period given by the bidder for
which his offer is valid. Normally 56 to 182 days.
Glossary of terms

Performance security ; means, the guarantee submitted by

the successful bidder within 28 days of award of Contract.
Normally, its value is 10% of the Contract Price
Bid Price, the total price offered by the bidder for
completion of the works/ supply of the goods
Contract Price; means, the price at which the contract is
awarded i.e. payable amount for execution of the works
Letter of Acceptance (LOA)
Contract Agreement
Instructions to Bidders( ITB)
Glossary of Terms

General Conditions of Contract (GCC)

Particular Conditions of Contract (PCC)

Employer’s Requirements (ER)

FOB [ Free on Board]

CIF [ Cost, Insurance and Freight]

DDP [Delivered Duty Paid]

Standard Forms of Bidding Documents

 WB/ADB, SBD, Procurement of Plant, Goods

(Multilateral Development Bank Harmonized
/ENAA based)
 PEC Bidding Documents, FIDIC 1987 based
Revised on June 2007:
34

Relevant PPRA rules included

Integrity Pact added under PMs directive
Reduced project value from Rs. 50 million to Rs. 25 million
Changed the word Tender to Bid
Harmonized the Documents with PPRA
Purpose of the Documents:
35

Increasing uniformity and productivity

Equitability among the contracting parties
Ensuring quality construction
Minimizing malpractices in award and execution
Timely completion of the projects
Avoidance of cost overruns
Growth of construction and consultancy sectors
Compliance of international standards and WTO provisions
 Structure of the Documents:
Instructions to Users of the Documents
36
Invitation for Bids
Instructions to Bidders
Bidding Data
General Conditions of Contract, Part I – (GCC)
Particular Conditions of Contract, Part II - (PCC)
Specifications - Special Provisions
 Specifications - Technical Provisions
 Form of Bid & Appendices to Bid
 Sample Bill of Quantities/List of material
 Form of Bid Security
 Form of Agreement
 Form of Performance Security/Bond & Mobilization
Advance Guarantee/Bond
 Drawings
FIDIC

New model includes:

1. Small Contracts (Green Book) 2017

2. Large Contracts
 Plant & Design-Build (Yellow) 2017
 Civil Works (Red Book) 2017
 EPC/ Turn Key (Silver Book) 2017
FIDIC Books
Selection of types of Bidding Documents

On Basis of size

 On Basis of Services

 On basis of size

1. Small sized Contracts

o PEC Less than Rs. 25 M

o WB Less than US$ 10 M

o ADB Less than US$ 5 M

Selection of types of Bidding Documents

2. Large sized Contracts

o PEC More than Rs. 25 M
o WB More than US$ 10 M
o ADB More than US$ 5 M
Selection of type of Bidding Documents

 On Basis of Services
1.Procurement of Works
2. Procurement of Goods
Selection of Bidding Procedure

1. Single Stage one Envelope

-Technical and Financial bids are
combined

2. Single Stage Two Envelope

 Technical bid (separate envelope)
 Financial bid (separate envelope)
Selection of Bidding Procedure

3. Two Stage Bidding Procedure

1st Stage
 Bidders are invited to submit their Technical

proposals only
 Technical proposals are reviewed and substantially

Technical proposals are discussed with bidders

2nd Stage
 Bidders resubmit their revised Technical proposal

along with Financial proposal

 Award is made to lowest evaluated responsive bidder
 PEC Standard Form of Bidding
Documents for E & M Works
Instructions to Bidders
Form Bid and Schedule of Bid
Preamble to Schedule of Prices
Schedule of Prices
Preamble to Conditions of Contract
General Conditions of Contract
Particular Conditions of Contract  26.3(iv) [deviation in Payment
Standard Forms
Employer Requirements/ Technical
Specifications
Instructions to Bidders
 Employer shall fill in the blank
spaces
 1.2 [ loan/credit/ PSDP]
 13.4 (a) [ Bidder’s experience]
 15.1 [Bid Security percentage
ranging from 1% to 5% of Bid
Price]
 16.1 [56 to 182 days Bid Validity
]
Schedule]
 26.3(v) [ Delivery]
PEC Standard Form of Bidding
Documents for E & M Works
Form of Bid and Schedules to Bid

 Form of Bid [ Letter of Offer]

 Schedule A to Bid: Specific Works Data
 Schedule B to Bid: Work to be Performed by subcontractors
 Schedule C to Bid: Proposed Programme of Works
 Schedule D to Bid: Deviations from Technical Provisions
 Schedule E to Bid: Deviations from Contractual Conditions
 Schedule F to Bid: Method of Performing Works
 Schedule G to Bid: Proposed Organization
 Schedule H to Bid: Integrity Pact
 PEC Standard Form of Bidding
Documents for E & M Works

Schedule of Prices
 Supply of Plant
 Erection, testing & commissioning
 Spare parts [Mandatory]
 Recommended Spare parts [ Optional]
 Provisional Sum

Preamble to Conditions of Contract General Conditions of Contract

 Commencement Date  FIDIC 1987[ Shall not be
 DPL(Designated Place) changed
 Time for Completion
 Delay in completion
 Terms of Payment
 Disputes and Arbitration [ Applicable, Procedural
Law, Place]
The Tendering Process
Step 1 : Invitation to Tenders – Notice Inviting Tender
(Advertisement, Post , Email.. )

Step 2 : EOI- Expression of Interest by respective Bidders

Step 3 : Tender document Floating/ Selling

Step 4 : Pre Bid Meeting

Step 5 : Bid Submission- In Single Phase or Two Phases

Step 6 : Bid Opening – In Single Phase or Two Phases

Step 7 : Bid Evaluation

Step 8 : Post Bid Meeting

Step 9 : Report Formation

Step 10 : Award of Contract

EOI - Expression of interest

Interested Bidders shall show their Interest in executing the

Tender/ submitting the Bid and ask for the Complete Tender
documents

Followed by purchase of the tender documents

Tendering type based on mode of submission

Manual tendering- Paper type submission

E Tendering- E-submission (E Bidding)

Contents of Tender Document

Section I : NIT/ IFB (Invitation For Bids)

Section II : ITB (Instruction To Bidders)

Section III : GCC (General Conditions of Contract)

Section IV : SCC (Special Conditions of Contract)

Section V : SOR (Schedule of Requirement)

Section VI : Technical Specification

Section VII : Various Bid Forms

Constituents of Bid Forms in Tender document
• Bid Security Form,
• Contract Form,
• Performance Security Form,
• Financial Capability Form,
• Technical Capability Form,
• Manufacturer Authorization Form,
• Advance bank Guarantee Form,
• Completion certificate Form,
• Deviation Statement Form,
• Places of Tests & Inspection Form….
The Pre Bid Meeting
Subsequent to the purchase of Tender Document, the prospective
Bidders, Employer and Consultants meet for discussions with
following objectives :
• Provide clarification to the Bidders- Technical or Commercial
• Communicate any additional information in Project
• Do necessary revision in the tender documents as per industry
feedback
• Ensure minimum deviations
• Critical points to explained and discussed

The Minutes of Pre Bid Meeting are recorded and it may be followed
by an
Amendment or Addendum to the Tender documents
The Bid Submission/ Tender Submission
Subsequent to the Pre Bid Meeting, the Bids are prepared and submitted in
the prescribed time and form, duly sealed.

The Bid submission could be of following forms

Two Stage Bidding : First Techno commercial part & then Price

part Single stage Bidding : Comprehensive Bid is submitted

The Bid Submission/ Tender Submission
The Bid Opening / Tender Opening

Tender Board ( consisting of representative of Employer -Chairman/

Board Member/ CEO/ CE; Consultant, Financial Institute) meets on the
nominated day and time to open these Sealed bids ( Generally few
hours after last time of Bid submission date). Late Bids are not
supposed to be entertained. Usually Following steps are followed:

Step 1 : Introduction of the Participants and announcement of the

Bidders. Followed by Attendance marking.

Step 2 : Declaration of Sufficiency of the Bid Bond

Step 3 : Declaration of Guaranteed Technical Particulars

Step 4 : Declaration of the Bid Price if it’s a Single Stage Bid

The Bid Opening / Tender Opening
The Bid Evaluation

Generally the bid evaluation process involves a team of experts or panels

which is lead at the front by a single person who is responsible for
interdepartmental/interdisciplinary coordination as well as coordination with the
stake holders to and Bidders . He may be known as Project Coordinator or
Project Manager. His objectives are:
• The Bid is thoroughly evaluated by the respective Technical, Legal,
Commercial &Financial experts
• Proper flow of communication to & from bidders (queries & replies)

• All aspects of bids are evaluated

• Every Bidder gets a fair chance of winning the contract

The Bid Evaluation

The Evaluation of the bid has following parts:

• Technical Evaluation

• Commercial Evaluation

• Capacity Evaluation
The Bid Evaluation- Technical
• The equipment /system & manufacturer being offered by the bidder is to be
evaluated for its conformance with the tender technical specification
• The Guaranteed Technical particulars are to meet the minimum Tender
requirement.
• Any alternative technology or material grade offered by the bidder
needs to
be verified.
• Any price implication on the project w.r.t. technical parameters to be verified
and respective loading on the price to be proposed.
• The feedback of working of the equipment supplied by the bidders in other
projects to be evaluated
• The factory load of the bidder or its major supplier should be evaluated
The Bid Evaluation- Technical (-Score method)
The Bid Evaluation- (-Weighted Score method)
The Bid Evaluation- Commercial
• The Bid Forms are duly filled and signed

• The declared Deviations on the Commercial part are to be evaluated

• All costs are properly covered in the offered prices

• Bid price is in specified currency or the listed conversion rate at the time of
price bid opening are to be considered.
• Any price variation/escalation formulae are correct and is justified

• Details of any extra costs ( such as Delivery cost , shipping cost, custom
charges, insurance, documentation , testing & inspection) are identified
• Cost of Spares if mentioned extra is identified

• Any other indirect commercial deviations are identified

The Bid Evaluation- Capacity
• The Bidder has sound financial condition

• The Bidder has sufficient funds to procure raw material and process so that
positive cash flow is maintained up to delivery of equipment
• The Bidder is not under litigation or any act resulting in bank corruptly

• The Bidder’s financial has sufficient immunity from market economy trend

• Will there be any cost resulting from loss of economy of scale

• If offer is for Services , then check should be done if resultant staff savings
or reduction in support services fully accounted for

• Has the cost of any long term agreement been included ?

• In case of Foreign Bidder, geo-Political scenario to be evaluated.

Post Bid Meeting
• During Bid Evaluation , Bid Evaluation committee witness that submitted Bid
has several variation with the Technical Specification of the Tender.
• It is therefore difficult for the Committee to Compare the Bids .

• A Post Bid Meeting is organized with separate Bidders individually to bring

them to a common Platform and negotiate on the Technical Specs wherever
appropriate
• Once the Technical part is freezed out , Bidders are asked to again submit
their Commercial Bid ( after taking into consideration the cost of technical
changes) .
Post Bid Meeting
Evaluation Report
• Before Release of Order/ award of contract , an evaluation report is being
generated for the purpose of Office records or for future reference.
• This report contains basic details such as

 Description of Contract

 Type of Tender

 Closing date of Tender

 Details of Tender Received

 Technical Compliance of tenders

 Analysis of Lowest 3 tenders

 Performance records of Lowest 3 tenders

 Recommendation of Assessment Panel

Award Process

• Based on Evaluation report & recommendation of Assessment Panel a “ Best Fit Bidder”
or successful is declared.
• A Letter of Award is Issued to the Successful Bidder.
• The Bidder is asked to submit a Contract Performance Guarantee which could be in
form of a Bank Guarantee, Demand Draft, Cash or a Fixed Deposit Receipt
• A contract between Bidder & Employer is drafted as per International Contract Laws.
• Contractual Obligations & Rights are being drafted / incorporated in the contract
• Technical Obligations are clearly stated
• Quality Obligations are clearly stated
• Completion Schedule is clearly stated
• Payment schedules are clearly stated
• The contract is signed and moved for implementation
Contract document’s Broad features
• Work of tender/contract is mentioned

• Date of signing is mentioned

• Parties are mentioned

• Scope of the contractor is mentioned

• Contract price is mentioned

• Documents of reference and their order of precedence is mentioned

• Time schedule is mentioned

• Payment terms is mentioned

• Other conditions of contract- technical & commercial are referred.

• Duly signed/stamped by the authorized representatives in presence of

witness
Thanks