Bid Evaluation and Award Er. Hari P Dhakal 24 May 2017

Session Content Bid Opening Bid Evaluation Award of Contract

Procurement Flow Diagram Planning/Bid Packaging Prequalification Bidding Documents Opening of technical Bid Technical Bid Evaluation Opening of price Bid Price Bid Evaluation Award of Contract

Bid Opening: Public Opening of Bids Principles and Features: Bid received are opened publicly at the Time and Place indicated in the Bid Documents For fairness and transparency Bidders’ representative attendance encouraged Record of signature/initialed by the representatives of bidders present

Technical Bid Opening: Information to be read out Bidder’s name and address Presence/absence of Price Bid envelope Whether Bid Security submitted or not Authorized representative’s signature in Letter of Technical Bid Interlineations, erasures, overwriting corrections; details of corrected figures and whether signed by authorized representative Any other details as considered appropriate by office

Price Bid Opening: Information to be read out Following information: Bidder’s name and address Total bid price Amount or percentage of any discounts offered Offered price, if technical alternative proposed Authorized representative’s signature in Letter of Price Bid and Price schedule Interlineations, erasures, overwriting corrections; details of corrected figures and whether signed by authorized representative Remarks, if any; Rate analysis, if requested Any other details as considered appropriate by office

Record of Public Opening of Technical Bid Pursuant to the notice published on …., the following bids for the Contract no.:…..were received by bid closing date on ……… at …….. hrs. at …… (place) and were publicly opened on ……… at …….. hrs. at …… (place) in the presence of the following individuals S.N. Name of Bidder Bid Security Amount / Validity Price Proposal (Yes/No) Comments Bidder’s Signature

Bid Opening: Typical Problems Late bids Incomplete reading out information Omission to read out discounts offered Bid Withdrawal by Unauthorized person Bid modification within 24 hours prior to deadline for submission Note: There is no evaluation decision at bid opening

Bid Evaluation: Purpose Determination of the lowest evaluated and substantially responsive bid, qualified to perform the contract

Bid Evaluation Committee Bid evaluation committee comprise of: Chief of public entity or senior officer designated by him or her (technical employee, if possible) –Chairperson Chief of financial administration section of the concerned public entity – Member Technical expert, related to the subject matter (officer level, if possible) – Member Law officer of the public entity, if there is a position of law officer in the public entity - Member

Bid Evaluation Committee May invite expert from government or non-government sector with the approval of Chief of public entity May appoint a consultant subject to the approved program and budget in accordance with PPA/PPR, if required May form a sub-committee to assist it in the evaluation Chief of Procurement Committee shall act as the secretary of the Evaluation Committee

Bid Evaluation: Basics Time frame before the expiry of the bid validity as stipulated in the bid document within time frame prescribed by act/regulations Confidentiality of procedure: no information to non-authorized persons on Substance of bid Preliminary examination result and status Evaluation results and status Recommendation of award

Bid Evaluation: Basics Bids not considered for evaluation late bids not sealed bids withdrawn bids bids from disqualified bidders (if prequalification) bids from blacklisted bidders open price bid with technical proposal (two envelope bidding procedure) bids submitted by mutual collusion

Bid Evaluation: Steps Eligibility Completeness of bid Technical Aspects Commercial Aspects Financial Aspects Special Considerations

Bid Evaluation: Preliminary Examination Eligibility Completeness of bid

Preliminary Examination of Completeness of Technical Bid Purpose To ensure received bids are complete as required by bid documents Examines whether, required bid securities have been furnished; bid documents have been properly signed; power of attorney or any relevant document has been submitted; joint venture agreements submitted; documents for eligibility of bidders have been furnished; documents to assess the qualification of a bidder are provided whether bids are generally in order for further evaluation

Determination of Substantial Responsiveness of Technical Bid Purpose Elimination of bids which are not responsive to important requirements Examples failure to satisfy the bid validity period (shorter period) failure to satisfy eligibility requirements failure to submit acceptable bid security failure to sign the Technical Bid Form failure to meet critical delivery/construction schedule failure to meet major technical requirements Submissions of conditional bids

Determination of Substantial Responsiveness of Technical Bid Major Deviations Effect on validity of bid, Specified in the bid documents as grounds for rejection of the bid, A deviation from the provisions of the bidding documents with effect on the bid price, but cannot be given a monetary value, An unacceptable deviation from the specifications, Conditional bid

Bid Evaluation: Examine Responsiveness Unacceptable Deviations Late Bid Submission Ineligible Bidder Unsigned Bid Bid Validity not as Requested Unacceptable Bid Security Price Adjustment Vs. Fixed Price Unacceptable Alternate Design Non Conforming Time Phasing Unacceptable Subcontracting Qualification of Arbitration Rules, Location, etc. Deviations from Critical Provisions Applicable Law Taxes and Duties Defects Liability

Bid Evaluation: Examine Responsiveness Minor Deviations Has no effect on the validity of the bid, Has no effect on the price, quality and delivery of the goods offered, Has such effect, but can be given monetary value, Has not been specified in the bid documents as grounds for rejection, provided that amount of deviations is within 15%

Adequacy of technical proposal Evaluation of the Technical Proposal will include an assessment of the Bidder's technical capacity to mobilize key equipment and personnel for the contract consistent with its proposal regarding work methods, scheduling and material sourcing.

Evaluation of Qualification Check whether the bidder’s bid meets the specified qualification requirements: Eligibility Pending Litigation Financial Situation Historical Financial Performance Average Annual Construction Turnover Financial Resources

Evaluation of Qualification …contd Construction Experience General Construction Experience Contracts of Similar Size and Nature Construction Experience in Key Activities Personnel Equipment

Record of Public Opening of Price Bid Pursuant to the notice published on …., the following bids for the Contract no.…..the following bids were technically qualified and were publicly opened on ……… at …….. hrs. at …… (place) in the presence of the following individuals S.N. Name of Bidder Bid Price Discounts Comments Bidder’s Signature

Preliminary Examination of Completeness of Price Bid Purpose To ensure received price bids are complete as required by bid documents Examines whether, bid documents have been properly signed by authorized person; and whether bids are generally in order for further evaluation

Determination of Substantial Responsiveness of Price Bid Purpose Elimination of bids which are not responsive to important requirements Example failure to sign the price Bid Form Failure to bid for required scope of work check bid validity period

Prepare Table of Bid Prices Prepare a table showing the Bidders’ bid price, arithmetic correction (if any), bid price in a common currency (NRs.) No. Bidder’s Name Total Bid Price (NRs.) Arithmetic Corrections (NRs.) Corrected Bid Price (NRs.) 1 Bidder A 15,000,000.00 - 2 Bidder B 14,000,000.00 +500,000.00 14,900,000.00 3 Bidder C 19,050,000.00 -300,000.00 18,750,000.00

Bid Evaluation: Arithmetical Errors No cause for bid rejection. Can be corrected Discrepancy between figure and word - Word will prevail Discrepancy between Unit price and Total price - Unit price will prevail Discrepancy between Total Bid Amount and sum of Total Prices - Total Prices will prevail

Bid Evaluation: Currency Conversion Exchange rate (for ICB contracts) Source: Nepal Rastra Bank Date: 30 days prior to the bid submission deadline Selling exchange rate

Financial Adjustments of Bids Adjust bid prices to common basis for comparison to determine lowest evaluated bid Adjustments include: Adjustment for Completion Time Adjustment for Alternative Technical Solutions Quantifiable Nonconformities, Errors and Omissions If the total adjustment exceeds 15 percent of the bid price, the bid may be rejected as nonresponsive.

Other Adjustments Domestic Preference Purpose To provide margin of preference to domestically manufactured goods or domestic contractors (for ICB contracts, if provided in the bidding document) To allow domestic firms to compete with foreign firms on more equal footing

Other Adjustments Civil Works Responsive bids are to be classified into two categories : Category I Bids offered by eligible Domestic Contractors and Joint Ventures eligible for the Preference Category II Bids offered by other Contractors 48

Other Adjustments Civil Works Eligibility Criteria for Domestic Contractors Incorporated in Nepal Majority ownership by nationals of Nepal Will not subcontract to foreign contractors more than 50% of the total value of their work 46

Other Adjustments Civil Works Eligibility Criteria for Joint Ventures between Domestic and Foreign Firms The domestic partners are individually eligible according to the criteria stated above The domestic partner would not qualify for the works on technical or financial grounds without the participation the foreign partner The domestic partner will carry out at least 50% of the works measured in terms of value 46

Other Adjustments Civil Works Procedure Determine lowest evaluated bid from each Category Compare lowest bids from each category If lowest bid is from Category I, award contract If lowest bid is from Category II add percentage specified and compare it with lowest bid from Category I, award contract to lowest 49

Other Adjustments Example Civil Works Category A Category B BID PRICE 10,000 9,900 COMPARE 10,000 9,900 AWARD BID PRICE 9,000 9,500 COMPARE 9,000 x 1.075 = 9,675 9,500 AWARD What if 9,000 x 1.075 = 9,675 9,750 AWARD

Bid Evaluation: Extension of Bid Validity Extension of bid validity is considered in exceptional cases When considered, all bidders should be asked Bidders willing to extend bid validity Cannot modify substance of bid Must extend validity of bid security

Bid Evaluation: Multiple Contracts If a bidder submits several successful (lowest evaluated substantially responsive) bids, the evaluation will also include an assessment of the Bidder's capacity to meet the aggregated requirements of: Experience Financial situation Current contract commitments, Cash flow capacity, Equipment to be allocated, and Personnel to be fielded.

Bid Evaluation - Multiple Contracts: Discounts Before Discounts Package  Bidder A Bidder B Bidder C Ranking without discount Remarks Package 1 80 70 60 A offered a discount of 20% if awarded both Package 1 and 3. Package 2 no bid submitted 40 55 B offered a discount of 10% if awarded all Packages Package 3 50 42 C offered no discount

Bid Evaluation – multiple contracts: Discounts Least Cost Combination After Discounts (in brackets)   Bidder A Bidder B Bidder C Ranking without discount Package 1 80 (64) 70(63) 60 Package 2 no bid submitted 40(36) 55 Package 3 40(32) 50(45) 42 Combination 1: 60 (from Bidder C) + 40 (from Bidder B before discount) + 40 (from Bidder A before discount) = 140 Combination 2: 64 (from Bidder A after discount) + 40 (from Bidder B before discount) + 32 (from Bidder A after discount) = 136 Combination 3: 63+36+45 (all three offers from Bidder B after discount) = 144

Technical Bid Evaluation Report Introduction General; Submission of Bids; Opening of Technical Bids; Basic Data; Bid Evaluation Committee Examination For Completeness Of Technical Bids Determination Of Substantive Responsiveness Of technical Bids 61

Financial Bid Evaluation Report Introduction General; Opening of Price Bids; Updated Basic Data; Bid Evaluation Committee Examination for Completeness of Price Bids Determination of Substantive Responsiveness of Price Bids Preparation of Table of Bid prices of Qualified responsive Bidders 61

Financial Bid Evaluation Report Detailed Evaluation of PRICE BIDS Bids Considered for Detailed Evaluation Financial Adjustments: Adjustment for Terms of Payment Adjustment for Completion Time Adjustment for Technical Alternatives Quantifiable Nonconformities, Errors and Omissions 61

Financial Bid Evaluation Report Detailed Evaluation OF Price Bids Other Adjustments of price bids Multiple Package Discounts Domestic preference Determination of evaluated lowest qualified substantially responsive Bidder Comparison lowest bid prices with updated estimate to determine any seriously unbalanced or front loaded Bids Examination of detail price analysis from bidder for seriously unbalanced or front loaded bids or substantially below estimates Recommendation for award of Contract 61

Bid Evaluation Report: Basic Data Sheet Project Name; Contract No. Estimated value Date of invitation for bids issued Bid Closing Date and Time Number of Bids received Bid Validity Expiry date Bid Security Expiry Date Date of Exchange rates specified for evaluation Exchange rates on such date

BID EVALUATION: Typical Problems Failure to submit or late submission of bid security Insufficient amount of bid security Short bid security validity period Lack of supporting documents Missing items, incomplete bids Delayed evaluation resulting in withdrawal of some bids Expiration and extension of bid validity Partial quantities Conditional bids 63

Bid Evaluation: Award of Contract Letter of Intention (LOI) To lowest evaluated responsive qualified bidder Bid Amount of the bidder to whom LOI is being given LOI copied to other bidders Response/protest period

Bid Evaluation: Award of Contract Letter of Acceptance (LOA) To the successful bidder Performance security (normal and additional, if required) to be specified in the LOA

Bid Evaluation: Award of Contract Signing of Contract Contract documents with all appendices Performance Security Work program

THANK YOU ! ANY Further QUERIES ? 11/8/2018 50 50