Bidding and Bid Evaluation
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Transcript of Bidding and Bid Evaluation
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Client’s Processes & Procedures
Bidding and Bid
Evaluation
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“… for every contract there is the optimum bidder who is not onlycapable of fullling the Clients’ reuirements in terms of time!uality and ris" but also in respect of cost is also willing and ableto submit a bid lower than any competitor# $ fundamental goal ofany competitive bidding system is to reveal the identity of thisoptimum bidder and determine the bid price#
“… too many clients are undiscriminating and still e
with cost! selecting designers and constructors almoon the basis of tendered price# his tendency is wideone of the greatest barriers to improvement# he pubecause of its need to interpret accountability in a rasense! is often viewed as a ma'or culprit in this resp
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Procurement )b'ectives
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he introduction of leading edge concepts! for e%ample! best pbenchmar"ing! total uality management and supply chain con
echnological comple%ity resulting in specialisation reuiring opurchase goods from those with specialist e%pertise*
Central & ,tate government policies & legislations*
-ncreasing recognition of the nite nature of resources*
-ncreasing proportion of revenue spent e%ternally*
.ewer but larger suppliers* and
-ncreasing environmental awareness#
Procurement / ,trategic -mportance
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Purpose of procurement 0 meet the user1s reuirem
2euirement 0 specic level of uality or standard oservice 3need! cost0e4ectiveness and a4ordability5
E%pressed in terms of output and performance 3to afavouritism5
,pecied by reference to recogni+ed standards! whrelevant! ma"ing provision for euivalents
To purchase the right quality of material, at the right in the right quantity, from the right source, at the righ price
Procurement ob'ectives
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imely delivery6completion Certainty of completion date and other time related
estimates
Early commencement of wor"6fabrication6manufact
:esign proposals to be submitted e%peditiously 2apid rectication of defects
ime6programme
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Certainty of cost estimates ;alue for money
Ease of accountability
Competition / lowest possible tender
)btaining cost certainty or reduction in ris" of costoverrun
2ealistic maintenance and running costs
Cost
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o supply the organi+ation with a steady
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o select the best suppliers in the mar"et# o help generate the e4ective development of new products#
o protect the company's cost structure#
o maintain the correct quality/value balance#
o monitor supply market trends#
o negotiate eectively in order to wor" with suppliers who will semutual benet through economically superior performance
$n alternative approach
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Competition Best value6value for money
;alue analysis6engineering
>egal obligations
Emerging procurement themes
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Procurement Policies
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?a"e or buy decision ma"ing
,ubcontracting 0 ability to do a 'ob* capacity! e%pertise! time!speciali+ation
Buying commodities
Capital goods
Purchasing for resale
Buying services
)utsourcing / core6 non0core activities
Buying internationally
Purchasing :ecision ?a"ing
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-n0house pro'ect – Be available full0time
– Be the single0point contact for the organi+ation
– $t the very least be able to answer all incoming uestions fully and promptly
– @nderstand and organi+e the internal decision0ma"ing processes reuired for
– 7ave the power to spea" and act for the organi+ation
– $ct in support of any e%ternal pro'ect leadership appointment
Pro'ect management
Consultant advisers
– Complementing s"ills available within the client organi+ation
– ,upplying impartial advice on the need 3or not as the case may be5 to build a
about building
Procurement ,ystems! Policies & ays
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:esign and Construct – esign and build
irect
!ompetitive
evelop and construct/manufacture " # stage
– $ackage deal " standardised/ semi standardised product
– %urnkey " single administrative entity
–$rivate &inance nitiative ($&) - he promoter designs! builds! nances the facility on behalf of the 3public5 client
– *uild-+wn-+perate-%ransfer (*++%) - private client provides and operatbehalf of a 3usually5 public client for a %ed term & then transfers 3B))! :B
– esign and manage " reuires specialist contractors 3Contractor! Consul
– ?aintenance & )peration / special cases
Procurement 2outes
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raditional .orm / ?easurement Criteria 3-tem 2ate>umpsum5
– ,euential :esign
– $ccelerated :esign
?anagement methods
–?anagement contracting
– Construction management
Prime cost contracting 0 single point of responsibility 3thePrime Contractor5 between the client and his sourced supply c
,eparate :esign and Construct
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$artnering
– )rgani+ations agree to wor" together for a period of time! perhaps unspecied! on a basis common ob'ectives thereby optimising each partner1s strengths
– partners still maintain a sense of independence with their own contractual arrangement anthat may or may not be based on a competitive6cost structure#
– involves a client buying a product 3the pro'ect5 through a procurement process that may informs 3traditional! negotiated price! design and build! management contracting etc#5# Partnadvantages! lies in attitudes and behaviours governing a commercial process#
lliancing
– ?ore all encompassing
– ;irtual company merger
– trustworthy! committed and world0class professional and competent rms 'oin with the owpro'ect
– 2is" and reward sharing
&ramework agreements
%erm contracting - e%ecuted over a given time period 3generally for repair
e-$rocurement
$lternatives
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$requalifying proposals - reuests for information! ustatements and capacity statements
nsolicited proposals - preliminary proposals! feasibildesign studies
nformal proposals - o4er letters and presentations
&ormal tenders - sealed bids! budgetary proposals! negtenders! open tenders! selective tendering and single ac
Bid Classication
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endering
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$chieve a better idea of the right price from a rangesuppliers and are better able to ma"e an informed 'udgement upon which to select#
,pecify closely what they need from the product anallow the manufacturers to interpret those needs anput a price against them#
=ains an ob'ective assessment! which they can revand audit#
=ain an understanding of the uality that the supplcan achieve and within what time0scale#
endering 0 advantages
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he cost and involvement of the client are high in producing the specicatdocuments#
.ully specied tender documents restricts value engineering6 innovation#
>oosely specied tender documents may result in diverse solutions varying
,uppliers could uote too high! too low leading to dispute or failure of suppsupport or maintenance5! supplier defunt#
he procedures for tendering are often slow# $cceleration results in low! po
>owest price0 lac" of performance and uality of supply#
endering procedures may be e%pensive to set up / tender charges
endering can be unsuitable for some types of contract6low value# .or e%aof the product or service reuired
Contractors declining tender to avoid alienating a client or consultant 0 throprice#
endering 0 :isadvantages
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)pen Closed
Degotiated
ypes of Bids
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-dentify the problem area and the possible reuirement
:evelop plans to provide the solution
$ssess potential solution providers 0 Preualication
:ecide upon the tendering method
Prepare tender documents! technical and commercial specicatio
-nvite suppliers to tender and issue tender documents 2eceive suppliers1 tenders and proposals
Evaluate the responses
Degotiate with the preferred supplier3s5
$ward the contract to the winning bidder
Bidding procedures 0 Phases
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.inancial standing and record 2ecent similar building e%perience / speed! costs! time
=eneral e%perience! s"ill and reputation in the area
$deuacy of technical and management structure for contype
Competence and resources wrt E7,
$pproach to uality assurance systems
$deuate capacity at the relevant time
Preualication
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,ingle stage tenders
wo stage tenders
.ormal presentations
$ward criteria
ender ,taging
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!ommitment Clients’ initiate pro'ects! set the style and tone and are essentia
.ole denition clients need to dene their own role and euip them to carryclient involvement in the design and management of pro'ects reuires appropriae%pertise#
.ealism priorities and e%pectations! for e%ample! time frame and price! shouldfair#
*rieng a clear brief is essential to establish e%actly what is reuired! includinservice! specication or product#
0egotiate a willingness to negotiate with consultants! contractors and supplie
1ariations2 restrict variations in design! specication or product to the eschanges are necessary a systematic approach is crucial#
!ommunication communicate e%pectations both internally and e%ternaa clear chain of communication and decision0ma"ing / avoid confusion byvia a single voice
=ood tendering Practices
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,elect advisers and consultants after careful consideration#
,elect an appropriate procurement methodology that best ts the pro'ect’s p
$dopt and adhere to fair tendering procedures that include
he publication of procurement contact points! ma"ing available as much infneed to respond to the bidding process*
– he preparation of appropriate tender documentation*
– he identication and selection of an appropriate number of suitable tenders*
– $n appropriate period of time for the preparation of tenders*
– $ method of dealing with errors within the tender documentation*
– $ consistent procedure for the submission and inspection of tenders*
–$ method for dealing with errors within tenders*
– he provision of feedbac" to all tenders on the outcome of bids promptly and! within the bcondentiality! to debrief winners and losers on reuest on the outcome of the bidding properformance on future occasions*
– he application of the highest professional standards in the management of contracts* and
– Procedures to respond to suggestions! enuiries and complaints* and
– Prompt payment procedures#
.air endering
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Bid Evaluation
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denition of the technical requirements2 product charactercost tolerances! ma"e or buy decisions! the demand for the comown products! the competitive environment in which the organisoperates#
assessment of potential suppliers2 technical support6bac" uavailability of nancial credit services! geographical pro%imity! thcompetence of the supplier in purchasing! manufacturing anddistribution! the supplier1s delivery record and the past uality o
rm1s performance bidding negotiations2 the characteristics of each individual o4
including the price! delivery! uality and the vendor rating reachduring the assessment of the supplier
Bid Evaluation Criteria :evelopment sta
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34eighted point plan5 !ategorical approach
5.isks, 1alue and 6ecurity7
– 1alue
– 6ecurity - .outine order products, $rocedural probleproducts, $erformance problem products, $oliticalproblem products
Evaluation ?ethods
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8eight2 the number of levels in the organisation 3its hierarchy5 that
in
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echnical Commercial
.inancial
Generally, in two/three envelope bids, Contractors who pass the technievaluation only, shall become eligible for Commercial/ and or Financial
Opening
Evaluation Criteria
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performance and productivity standards uality inspection reuirements operational and maintenance costs professional competence technical6professional support standardisation after0sales service cost and availability of spares and6or consumables provision of manuals and training sample testing warranties
echnical Criteria
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compliance with the invitation to tender including
– acceptance by the tenderer of the purchaser’s terms and conditions contract
– compliance with delivery reuirements
– compliance with tender validity period
– acceptance of payment arrangements
ownership e#g# in the case of a training course
length of time that product range6design will be on the ma
Commercial Criteria
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life cycle costing comparisons 3where appropriate5
uantiable nancial ris"s6 benets from technical eval
%ed or variable pricing
cost of components! spare parts! consumables and serv
nancial ualications to full the contract
$d'ustment for foreign currency and e%change ris"s
ris" analysis and nancial appraisal
cost of variations6additions to the product6service 3costchanging6addingL5
.inancial Criteria
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ppendices of lecture ! Bid " Bid #valuation$pdf
%age &&' of Commercial (anagement ! )avid *owe
Chapter +- Claims (anagement ! Construction Cost (anagethrough Case .tudies ! eith %otts
.urther reading