Bid EvaluationBid EvaluationEng. V.Mohan./Project Director-

CENTRAL EXPRESSWAY PROJECT-II,M.Sc(PPM, Turin, Italy), Dip.In Com.Com. Arb (ICLP),DIPPCA (SL), FCIHT(Lond), FIE(SL), B.Sc(Eng),MIE (SL)

ROAD DEVELOPMENT AUTHORITY 3rd Floor, "Sethsiripaya ", Battaramulla, CO 10120, Sri Lanka, 

Office :-+94112877708 - Extension -126Mobile: +94-77 316 8726, +94 71 843 3070 Home ;+94112322070 Fax No.+94112877708

Email: nsvmohan@gmail.com 

Learning ObjectivesLearning Objectives

1.1. Understanding the objectives of the Bid Understanding the objectives of the Bid EvaluationEvaluation

2.2. Identifying the Evaluation Criteria Identifying the Evaluation Criteria

3.3. Identifying the stages Of the Bid Identifying the stages Of the Bid EvaluationEvaluation

4.4. Identifying the Bid Evaluation FactorsIdentifying the Bid Evaluation Factors

5.5. Bid Evaluation ProcessBid Evaluation Process

Bid Evaluation Covers ;Bid Evaluation Covers ;

WorksWorksGoods Goods Services other than Consultancy ServicesServices other than Consultancy Services

ObjectiveObjective

The Evaluated price should deflect the The Evaluated price should deflect the comparison of actual expenditures to be comparison of actual expenditures to be incurred by Employerincurred by Employer

1.Understanding the Objectives 1.Understanding the Objectives of the Bid Evaluationof the Bid Evaluation

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1.2

Objectives

1.2.1 The Procurement process should ensure:

(a) maximizing economy, timeliness and quality in

Procurement resulting in least cost together with the high quality;

ProcuringThe Right Quantity

The Right Quality

@ Right Time

By Right People

Using Right Method

from Right Person

2.Identifying Bid Evaluation 2.Identifying Bid Evaluation Criteria Criteria

• Lowest Quoted BidLowest Quoted Bid• Lowest Evaluated BidLowest Evaluated Bid• Lowest Evaluated Responsive BidLowest Evaluated Responsive Bid• Lowest Evaluated Responsive and Qualified Lowest Evaluated Responsive and Qualified

Bid Bid

3. Identifying Stages of Bid 3. Identifying Stages of Bid EvaluationEvaluation

Bid OpeningBid OpeningPreliminary Examination Preliminary Examination Detailed EvaluationDetailed EvaluationPost-Qualification Post-Qualification Award Recommendation Award Recommendation

4.Identifying Bid Evaluation 4.Identifying Bid Evaluation FactorsFactors

• Bid PriceBid Price• Delivery PeriodDelivery Period• Cost Of Spare Parts and after Cost Of Spare Parts and after

sales servicessales services• Cost of MaintenanceCost of Maintenance• Operating Cost Operating Cost

BID EVALUATIONBID EVALUATIONPROCESSPROCESS

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Evaluation Criteria

5.3.19 (a) The bidding documents shall also specify the

relevant factors, in addition to price, to be considered in bid evaluation and the manner in which they will be applied for the purpose of determining the

lowest evaluated bid.

(b) Post qualification criteria should also be

clearly stated in the Bidding documents.

What is the objective What is the objective of bid evaluation? of bid evaluation?

““Lowest Evaluated Substantially Lowest Evaluated Substantially Responsive qualified Bid”,Responsive qualified Bid”,

The Objective of Bid Evaluation is to determine the

among the bids submitted before the bid closing time on the date

specified in the bidding documents.

Bid Validity PeriodBid Validity PeriodDuring Bid Validity Period During Bid Validity Period

•Bids have to be evaluatedBids have to be evaluated•Clarifications Have to obtained from Clarifications Have to obtained from BiddersBidders•Approvals obtained from required Approvals obtained from required authoritiesauthorities•Award of ContractAward of Contract

Therefore Bid Evaluation shall be Therefore Bid Evaluation shall be completed leaving enough time for other completed leaving enough time for other activities activities

Four Stages of Bid EvaluationFour Stages of Bid Evaluation 1.1. Preliminary Examination of Bids Preliminary Examination of Bids

( Including determination of responsiveness) ( Including determination of responsiveness) Object is to exclude ineligible, non-responsiveness Object is to exclude ineligible, non-responsiveness and incomplete bids from detailed Examination. and incomplete bids from detailed Examination.

2.2. Detailed Bid Evaluation and Detailed Bid Evaluation and comparison of bids.comparison of bids.

objective is to determine the lowest evaluated bid from objective is to determine the lowest evaluated bid from the substantial responsiveness bidthe substantial responsiveness bid

3.3. Post Qualification.Post Qualification. Object is to verify the qualification and experience of the Object is to verify the qualification and experience of the

lowest evaluated bidderlowest evaluated bidder4.4. Bid Evaluation ReportBid Evaluation Report ..

1.1.

1.1. Preliminary Preliminary Examination of Bids.Examination of Bids.

Determination of Substantial Determination of Substantial Responsiveness of Tenders Responsiveness of Tenders

The purpose is to select bids which The purpose is to select bids which meets the minimum standards, spelled meets the minimum standards, spelled out in the bidding docsout in the bidding docs

It saves us from taking all the bids It saves us from taking all the bids through the complicated and time through the complicated and time consuming detail evaluation processconsuming detail evaluation process

Reasonable judgment has to be applied Reasonable judgment has to be applied to avoid the risk of rejecting bids on to avoid the risk of rejecting bids on trivial grounds trivial grounds

Preliminary ExaminationA substantially responsive Bid is one: 

which conforms to all the terms, conditions, and specifications of the bidding documents, without

material deviation or reservation.   

If a Bid is not substantially responsive: it will be rejected by the Employer, and may not

subsequently be made responsive by correction or withdrawal of the nonconforming deviation or

reservation.  

The purpose of this examination is to eliminate any bid from further and more complicated consideration if it does not meet the minimum standards of acceptability as set out in the bidding documents and therefore not substantially responsive.

Preliminary Examination  is Prior to the detailed evaluation of Bids, Employer will determine whether each Bid: 1.meets the eligibility criteria defined in the Bidding document; 2.has been properly signed; 3.is accompanied by the required securities; and 4.is substantially responsive to the requirements of the bidding documents. 

COLLECTION OF TENDER COLLECTION OF TENDER INFORMATIONINFORMATION

1. Collect the Basic Data1. Collect the Basic Data

2. Record of Tender Opening2. Record of Tender Opening

3. Preliminary Examination for 3. Preliminary Examination for Complete of Tenders. Complete of Tenders.

DETERMINATION OF DETERMINATION OF SUBSTANTIAL RESPONSIVENESS OF SUBSTANTIAL RESPONSIVENESS OF

TENDERSTENDERSThere are four steps in determining the substantial There are four steps in determining the substantial

responsiveness of tenders. These are:responsiveness of tenders. These are:1.1. Preparation of Table of Tenderers and Tender Prices.Preparation of Table of Tenderers and Tender Prices.2.2. Substantial Responsiveness to Commercial Terms Substantial Responsiveness to Commercial Terms

and Conditions.and Conditions.3.3. Substantial Responsiveness to Technical Substantial Responsiveness to Technical

Requirements.Requirements.4.4. Preparation of Table of Substantive Responsiveness Preparation of Table of Substantive Responsiveness

of Tenders of Tenders

Stage -1To ascertain whether the:

The bidder is eligible

Bid is signed Bid security

Bid is containing all required critical documents.

bid is complete and quote for all items

1.Eligibility 1.Eligibility  Black ListedBlack Listed ICTAD grading for Local Contracts ICTAD grading for Local Contracts  Member Country Member Country 

2.2. Authority to SignAuthority to SignThe bids shall be signed by the person authorized to The bids shall be signed by the person authorized to do so.do so.

  3.Purpose of Bid Security 3.Purpose of Bid Security Bidder will not withdraw /modify his bids during the Bidder will not withdraw /modify his bids during the validity period validity period Bidder will agree to do changes in the price due to Bidder will agree to do changes in the price due to arithmetical correction arithmetical correction The bidder will not refuse to sign contract when to do The bidder will not refuse to sign contract when to do so with submission of PS  so with submission of PS  

Stage IIStage II

Ascertaining the DeviationAscertaining the Deviation

MinorMinor

Major Major 

Debatable Debatable 

What is Deviation ?What is Deviation ? It is very difficult to find a bid which is It is very difficult to find a bid which is

complying with the requirements of the complying with the requirements of the bidding in every respect. bidding in every respect.

Deviation from any provisions of the bidding Deviation from any provisions of the bidding documents is a common feature in many Bids. documents is a common feature in many Bids.

So we should identify and classify them as So we should identify and classify them as Minor or majorMinor or major

some are difficult to put into one of the above some are difficult to put into one of the above classification and categorized as Debatable classification and categorized as Debatable and with deeper analysis they are categorized and with deeper analysis they are categorized as Minor or Major. as Minor or Major.

Major Deviations

  

The bid in a result of finding of “non responsiveness” and consequent rejection is called as Major or Material Deviation.

The Major Deviation would be one which either,

(a). Has an effect on the validity of the bids: or(b) Has been specified in the bidding documents

as grounds for rejection of the bid: or(c) Has an effect in substantial way to the scope,

quality, functionality or performance; or(d) Will limit in any substantial way the PE’s

rights or bidders obligations: or(e) Is a deviation from the terms or the technical

specifications in the bidding Document whose effect on the bid price is substantial but cannot be given a Monetary value.

Material Deviation

A material deviation or reservation is one: which limits in any substantial way the

scope, quality, or performance of the Works; which limits in any substantial way,

inconsistent with bidding documents, the Employer's rights or the bidder's obligations under the Contract;

whose rectification would affect unfairly the competitive position of other bidders presenting substantially responsive bids;

a Bid which proposes and alternative;

Minor deviation

• The sum of the bid price and the total of adjustments made for deviations and other evaluation factors specified in the bidding documents is the “evaluated bid price”.

• considered as “substantially responsive” and are, therefore, evaluated and considered for contract award by determining any financial value of each deviation and adding to the bid price.

Minor deviationMinor deviationwould be one which eithera. Has no effect on the validity of the bid; orb. Has no effect in substantial way to the

scope, quality, functionality or performance; or

c. Will not limit in any substantial way the PE’s rights or bidders obligations: or

d. Has such effect but the difference from the commercial terms or technical Specifications in the bidding documents is such that it can be given a monetary Value; or

e. Has not been specified in the bidding documents as grounds for rejection of the bid, provided that the total amount of adjustments for such deviations does not exceed a previously determined percentage of the bid price.

Debatable DeviationsDebatable Deviations Requesting different amount of advance Requesting different amount of advance

and other payment terms and other payment terms (including (including liquidated damages and retention): liquidated damages and retention):

Late RecoveryLate Recovery Recovery up to last BillRecovery up to last Bill RetentionRetention Liquidated DamagesLiquidated Damages Proposed changes in construction period Proposed changes in construction period

which is not criticalwhich is not critical: : Omissions of minor works or items Omissions of minor works or items

included in the scope of workincluded in the scope of work

Completeness of bids: Procedural Deviations in submission of bids. Bid Security.Lack of supporting Documents:Fixed price against variable priceTechnical Specifications: Subcontracting:Alternative bids: Conditional bidsAlternative BidsTime of CompletionDebatable Deviations

Ways of treating most frequent deviations:

Most Frequent Deviations Most Frequent Deviations Conflicting ClausesConflicting ClausesSome items are not pricedSome items are not pricedMarking of envelopsMarking of envelopsLesser periods /Lesser amounts Lesser periods /Lesser amounts Lack of supporting documents Lack of supporting documents Conditional BidsConditional BidsAlternativebidsAlternativebids

Stage 2Stage 2

DETAILED EVALUATION OF TENDER

1.Technical Analysis; 2.Commercial Analysis;

and 3.Financial Analysis.

Objectives

To determine the cost that PE will incur if the contract is awarded to each of the bid which was

determined as a substantial responsive bid .This stage, bids are compared with each other for the purpose of comparison and to determine

the lowest evaluated cost that will be incurred by the PE from the substantially responsive bids

received.

It is again emphasized that PE should only use the evaluation criteria disclosed in the bidding document. Most frequently used evaluation

criteria is given below. The PE may use other appropriate criteria for a particular procurement

and disclosed such factors together with the evaluation methodology in the bidding document:

Principles and Methodologies

Detailed Bid Evaluation – Principles and MethodologiesThe PE may used other appropriate criteria for a particular procurement and

disclosed such factor together with the evaluation methodology in the bidding document

Exclude VAT, contingencies and provisional sum amounts Correction of arithmetical errors

Application of applicable discount

Adjustments for acceptable departures Adjustments for delivery period

Adjustments to bid prices for omissions

Adjustments for inland transportation

Alternate Bids

Conversion to common currency Domestic preference

Reassess ranking order Examine for unbalance bidding

After sales service Clarifications during evaluation

Operational costs and life cycle costing

Clarifications during evaluation:Clarifications during evaluation: if the Bid is any doubt about the intent of if the Bid is any doubt about the intent of

the bidder. Modifications of the the bidder. Modifications of the substances of the bid by a bidder are,substances of the bid by a bidder are,

however, not allowed. Any change in however, not allowed. Any change in price, delivery terms, conditions of price, delivery terms, conditions of contract or change of specifications contract or change of specifications proposed by the bidder is considered as proposed by the bidder is considered as substantive.substantive.

modifications. The PE should not change modifications. The PE should not change any of the commercial terms or technical any of the commercial terms or technical specifications as a result of clarifications. specifications as a result of clarifications.

DETAILED EVALUATION DETAILED EVALUATION Check for arithmetical errors &

correct Errors will be corrected by the Employer as follows:

(a) where there is a discrepancy between the amounts in figures and in words, the amount in words will govern;

(b) where there is a discrepancy between unit rate and line item total, resulting from multiplying unit rate by quantity, unit rate as quoted will govern.

(c) unless this sub-clause is modified in Bidding Data and if the bid price decreases by the above procedure, the amount stated in the Form of Bid shall be adjusted with the concurrence of the bidder and shall be considered as binding upon the bidder;

(d) where there is a discrepancy between unit rate and line item total, resulting from multiplying unit rate by quantity, unit rate as quoted will govern, unless there is an obviously gross misplacement of decimal point in unit rate, in which case line item total as quoted will govern, and unit rate will be corrected;

Check for omissions

Apply discounts if any

Convert to common currency

Responsive to commercial & technical conditions

assess monetary implications of acceptable deviations and other matters

Apply domestic preference if applicableReassess the ranking order of bids

Summary of Evaluation ProcessSummary of Evaluation Process

1.1. PlanningPlanning2.2. Scrutiny of BidsScrutiny of Bids3.3. AssessmentAssessment4.4. EvaluationEvaluation

Life –Cycle CostingLife –Cycle Costing Matrix AnalysisMatrix Analysis SelectionSelection Negotiation IssuesNegotiation Issues

Commercial Analysis of Substantial Responsiveness of Tenders.

Technical Analysis of Substantial Responsiveness of Tenders.

Financial Analysis of Substantial Responsiveness of Tenders.

Detailed Evaluation of Substantially Responsive Tenders

COMMERCIAL ANALYSISCOMMERCIAL ANALYSISThe Table for Commercial Terms should list all the The Table for Commercial Terms should list all the important commercial conditions specified in the important commercial conditions specified in the tendering documents such as:tendering documents such as:• The tender security amount and validity

period;

• Terms of payment;• Liquidated damages etc.; and

• Any deviations from requirements of the tendering documents.

Further, it should be stated whether a financial adjustment to the tender is considered necessary

as a consequence of any minor deviation

TECHNICAL ANALYSISTECHNICAL ANALYSIS

The Table of Technical Requirements should set out:The Table of Technical Requirements should set out:

The scope of supply,

Delivery or work schedule, The important technical specifications of

all major items of equipment and material (e.g., plant rating, capacity, speed, voltage and

pressure, operating temperature, etc.), The performance characteristics (e.g., plant

efficiency, fuel consumption, losses, etc.), and

Warranty period.

FINANCIAL ANAYLSIS FINANCIAL ANAYLSIS Financial Adjustment of Tender Prices (Commercial

Aspects).

• Tender price comparison is usually the final and most critical step in the tender evaluation process. To do this properly, a clear understanding of the

basic principles for comparison is vital:

• The tender prices should be adjusted for the purpose of tender comparison for those

deviations which are permissible and which can be “translated” fairly into monetary values.

FINANCIAL ADJUSTMENTS OF TENDER FINANCIAL ADJUSTMENTS OF TENDER PRICES (COMMERCIAL ASPECTS)PRICES (COMMERCIAL ASPECTS)

Adjustments for acceptable departuresAdjustments for acceptable departures Adjustment for Deviation from the Terms Adjustment for Deviation from the Terms of Payment.of Payment. Adjustment for Deviation from the Adjustment for Deviation from the Delivery Schedule or Completion:Delivery Schedule or Completion: Adjustments for Deviation from Adjustments for Deviation from provisions for payment of Duties and provisions for payment of Duties and taxes (in Civil Works contract)taxes (in Civil Works contract)

•FINANCIAL ADJUSTMENTS OF TENDER PRICES (TECHNICAL ASPECTS)

Adjustment for Completeness in Scope of Supply

Adjustment for Technical Compliance Adjustment for Specified Technical Evaluation

Factors Adjustment for Spare Parts

After sales Services Maximum Amount of Adjustment for deviation Adjustment for Cost of Inland Transportation

to the Project Site –INCOTERMS

Financial Adjustments Financial Adjustments

Domestic Preference Domestic Preference

( if applicable)( if applicable)

ObjectivesTo determine the cost that PE will incur if the contract is awarded to each of the bid which was determined as a substantial

responsive bid .This stage, bids are compared with each other for the purpose of comparison and to determine the lowest evaluated cost that will be incurred by the PE from the substantially responsive bids received.

It is again emphasized that PE should only use the evaluation criteria disclosed in the bidding document. Most frequently used evaluation criteria is given below. The PE may use other appropriate criteria for a particular procurement and disclosed such factors together with the evaluation methodology in the bidding document:

Principles and Methodologies

Principles and MethodologiesPrinciples and Methodologies Exclude VAT, contingencies and Exclude VAT, contingencies and

provisional sum amountsprovisional sum amounts Correction of arithmetical errorsCorrection of arithmetical errors Application of discountApplication of discount Adjustment for omissionsAdjustment for omissions Adjustments for acceptable departuresAdjustments for acceptable departures Conversion to common currencyConversion to common currency Domestic preference;Domestic preference; Examination for unbalanced bidding;Examination for unbalanced bidding; Comparison with engineers estimateComparison with engineers estimate Rejection of all bidsRejection of all bids Clarifications during evaluationClarifications during evaluation Alternate Bids.Alternate Bids.

3. Post 3. Post qualificationqualification

Post qualificationPost qualification

Post qualification is suitable for use in the Post qualification is suitable for use in the procurement of works contracts, which procurement of works contracts, which are not complicated where pre-are not complicated where pre-qualification does not offer much qualification does not offer much advantage.advantage.

Post -qualification is a distinct step in bid Post -qualification is a distinct step in bid evaluation.evaluation.

Post qualificationPost qualification

Post –qualification determines that bidder, who Post –qualification determines that bidder, who has submitted the lowest substantially has submitted the lowest substantially responsive bid, has the capability and the responsive bid, has the capability and the capacity to perform the job.capacity to perform the job.

If the bidder has not demonstrated his capacity If the bidder has not demonstrated his capacity and capability he is rejected and next bidder is and capability he is rejected and next bidder is considered.considered.

Post -qualificationPost -qualification Post –qualification criteria shall be

clearly spelled out in the bidding documents

Relevant forms & questionnaires shall be included in the bidding documents to extract data in a uniform mater.

The PE can use the data it gathered in addition to the data submitted by the bidder

Post –qualification CriteriaPost –qualification Criteria1.1. Average Annual Average Annual

Construction turn-overConstruction turn-over2.2. Availability of liquid assets Availability of liquid assets

supplemented by project supplemented by project specific lines of Creditspecific lines of Credit

3.3. Experience in similar Experience in similar projectsprojects

4.4. Necessary Equipment.Necessary Equipment.5.5. PersonnelPersonnel6.6. Production rates of key itemsProduction rates of key items

4. Bid Evaluation 4. Bid Evaluation ReportReport

Bid Evaluation ReportBid Evaluation Report After the completion of the evaluation After the completion of the evaluation

process the PE should prepare a bid process the PE should prepare a bid evaluation report setting out process of evaluation report setting out process of evaluation. The PE shall use standard evaluation. The PE shall use standard forms available for the purpose.forms available for the purpose.

In addition the evaluation report should In addition the evaluation report should include narrative section in which any include narrative section in which any Information not suitable for presentation Information not suitable for presentation in the form of tables, together with any in the form of tables, together with any Supplementary information necessary for Supplementary information necessary for a complete understanding of all the a complete understanding of all the factors considered during bid evaluation. factors considered during bid evaluation.

Thank youThank you