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Outline

• Definition

• Characteristics• Bidding methods

• Pros and cons

• Bidding procedure

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Definition

 – A commercial activity involving 2parties

Bid Solicitors

Bidder A

Bidder B

Bidder C

(Offer to buy G& S)

W i n n i n g  b i d d e r 

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Definition

The bid solicitor is the project owner, investor or legal representatives of project owners andinvestors to organize bidding

Bidders:

Contractor, supplier, or vendor who responds to

an invitation to bid

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Definition

 

Bids are documents prepared by bidders basedon the requirements of the bidding documents.

Content of bids is a basis for solicitors andcontractors to complete the contracts negotiatedafter the winning contractor announced

ICB means the procurement opportunity is opento any interested local or foreign contractor 

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Characteristics

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Characteristics

Consistency:

•  All decisions can not be changed after the deadline for submissionof bids

• The bidder's proposal will be sealed to until opening of the bid

Objectivity: To chose contractors, in addition to price, the bidsolicitor should consider other factors such as technicalfeatures, payment, the warranty….

 Accessibility: The bid solicitor create conditions for contractorseasily access to information

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BIDDING METHODS

Mostly focus on Procurement

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Prequalification of Bidders (Optional)

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Prequalification of Bidders

• No limits of prequalified bidders

• Based entirely upon the capability

and resources of prospective biddersto perform the particular contractsatisfactorily

•

All found capable of performing thework satisfactorily in accordance withthe approved prequalification criteriashall be prequalified and invited to

submit bids

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INTERNATIONALCOMPETITVE BIDDING

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Single-stage bidding

1. One-envelope bidding

•. main bidding procedure used for

most of the procurement financed•. One envelope contains both Price

Proposals and Technical Proposals

2.  Two-envelope bidding

•. allows bids to be evaluated on

purely technical, and administrative

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 Two-stage bidding

•  Two stage: Two-envelope biddingprocedure, used in case of Turnkeycontract and Alternative contract

•  Turnkey contract: the borrower mayremain responsible for the design and

engineering, and invite bids for a singleresponsibility contract for the supply andinstallation of all goods and works requiredfor the project component

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OTHER METHODS OFPROCUREMENT

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OTHER METHODS OFCONSTRUCTION

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Pros and cons• Pros

Buyers:

• Increase likelihood of finding the

most suitable partner 

• Reduce cost and avoid price

monopoly of bidders due to high

competitiveness

• Limit collusion through open &

transparent procedures

Bidders:

• Guarantee fair and chance for

all potential bidders

• Create incentive & pressure on

bidders to improve capacity &

• Cons

• Bribery & corruption

• “one off” bids, less intention of 

strengthening long-term ties =>

cut corners to increase profitability

& ensure that the bid remains

cost-effective

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Bidding procedure

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1. Preparation

• Notify about the bid

• Publish documents summarizing thebid

• Invite individuals, organizations to

apply for pre-qualification• Examine applications and select

qualified entities for the bid

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2. Invitation to bid

• Invitation for bids

• Interpretation to bidders•  Technical requirements

• Selection method (Selection of 

bidders)

• Other indications

* Clarification of bid invitation if 

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Important note!!!

Methods to guarantee bidders will notwithdraw

- Deposit (less than 3% of the bid)

- Bid securities

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3. Bid opening

• Open with the presence of bidders ortheir representatives

• Read out loud bidders along withtheir prices and any modifications

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4. Examination andevaluation of bids

• Eligibility requirements (technical,financial,…)

• Responsiveness to the biddingdocument

• Security requirements• Clarifications or alternatives of bids if 

allowed or necessary

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5. Award of contract

•  Award to thelowest evaluated

and substantiallyresponsive bid

• Prepare contractand sign contract

• Notify and return

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