Evaluation of Bids and Contract Award Module 6: Session 7

1)Appreciate the significance of bid evaluation process in the procurement of road works and services 2)Discuss with the trainees the approach to bid evaluation and explain the process of selecting a best evaluated bidder 3)Appreciate the importance of understanding the evaluation criteria and taking advantage of it 4)Outline contract award process and the remedies of an aggrieved bidder Learning Objectives 2

 A Bid is an offer made by a potential supplier to provide works, services or supplies or a combination thereof in response to an invitation.  It may be accepted by the Employer or not  Bid evaluation is the successive activities a PE goes through in selecting the most responsive and best evaluated bid to accept.  It involves examination, evaluation, comparison and post–qualification of bids. Bid Evaluation 3

1)Evaluate the bids using the criteria stated in the solicitation documents. 2)Composed of 3-5 persons and each member independently evaluates and scores the bids. 3)Conduct evaluation meetings jointly and minutes are signed by all members present. 4)Make a report signed by all members to PDU of the process and award recommendation. The Evaluation Committees 4

 Should possess skills in procurement and contracting, financial management as well as experience and technical skills in the subject matter of procurement.  Have knowledge of the work of the user department.  Be independent, able to make sound judgment and be of integrity.  Sign a Code of Ethical Conduct in Business and declare that they have no conflict of interest  Reach a consensus on the committee recommendations Members of the Evaluation Committee 5

 Evaluation criteria to be made known to all bidders in the solicitation documents.  All bidders be assessed against the same criteria.  Equitable and fair assessment be applied to all.  Members of the EC to have no conflict of interest.  Confidentiality be maintained throughout until best evaluated bidder is communicated to all. Guiding Principles for Bid Evaluation 6

 Employer assesses the content of the bid to answer questions as to whether:  The bid conforms to all the terms, conditions and specification.  The bid is free from any material deviations, reservations or omissions. Does the bid for example:  Substantially affect the scope, quality or performance of works specified?  Substantially limit the right of the Employer or obligations of the Bidder?  Would rectification unfairly affect competitiveness of other Bidders? 7 Testing compliance and responsiveness

 The Employer may for a substantially compliant bid waive non conformity, omissions or error that are not material  Employer may request the Bidder to submit within a reasonable time information or documents to rectify non material anomaly not relating to price.  Employer may correct arithmetic error  The best evaluated bidder should accept the correction of errors 8 Waiver of non-conformity

 Examination of the legal documentation and other information submitted by the bidders to confirm eligibility of the Bidder or materials, equipment and services to be used on the contract.  Checking for capacity to contract, insolvency, bankruptcy and receivership  Business activities not suspended  Compliance to statutory obligations  Not having a conflict of interest with Employer and other bidders  The Bidder and subcontractors being eligible citizens and not disqualified by PPDA. 9 Preliminary Evaluation: Eligibility and Administrative Compliance

 Certificate of incorporation.  Valid trading license.  VAT registration certificate, if applicable  Income tax clearance certificate  Powers of attorney  Bid bond/security  Bond Validity Period  Audited financial statements  Certain declarations 10 Common Preliminary Evaluation Requirements

1)Submission of the bid in a required format 2)Delivery within required time 3)Correct bid Validity 4)Signature and authorisation of bids 5)Any additional documents included 6)Correct number of copies and envelopes (say 2 in 1) 7)Signature of documents Other Administrative Compliance checks 11

 Quality and cost based evaluation  Quality based selection  Fixed budget selection  Least cost selection  Technical compliance least cost selection 12 Common evaluation methods

 Considers first, the technical quality and second, cost of each bid.  There is a minimum technical qualifying mark, below which a bid is rejected.  The relative weighing of technical and cost element are decided in advance and overall outcome used for selection. Quality and Cost Based Selection 13

 Stage 1 1)Points are awarded to the technical quality of each bid using predetermined criteria 2)Bids which do not reach a predetermined minimum scores are rejected  Stage 2 1)Financial bids of technically accepted bids are opened and awarded a financial score based on the lowest bid. 2)The best evaluated bid is the one with the highest combined technical and financial score. Stages in a quality and cost based selection 14

Criteria Maximum Score (%) Actual Score (%) Specific experience of the firm10 Tools and equipment30 Qualifications and competence of key personnel 40 Transfer of knowledge10 Local participation10 Total Score100 % Example of a typical technical criteria rating system for works 15

Examples of a Quality and Cost best evaluated bidder Scoring technical and financial evaluation (Minimum Technical score 75%) BidderTech score Financial Bid (shs) Financial score A86%110m91% B90%135m74% C78%100m100% D72%120mNot opened Best weighted evaluated bidder (Technical 70%, financial 30%) BidderTech score Fin. score Weighted A86x0.7091x B90x0.7074x C78x x DDropped 16

 Sometimes the weighted average of technical and financial bids approach is used to select the BEB  Sometimes every compliant and responsive bid is assessed as a pass and the lowest bidder selected as the BEB  Simply the BEB is selected by comparing all compliant bids using the methodology and criteria stated in the bid documents 17 Best Evaluated Bidder

 This is the process where the Employer verifies whether the BEB is qualified to perform the contract  Post-qualification is done only where no prequalification was conducted  Such verification may involve a request for clarification of information included in the bid document  It will also include due diligence of documents and other information provided by the bidder  Where the BEB is found wanting, then the Employer will proceed to the next best evaluated bidder. 18 Post-qualification

 Notice of the Best Evaluated Bidder must be publicly displayed stating the following:  Procurement Reference  Subject of procurement  Name of Best Evaluated Bidder  Total contract price  Date of display  It is copied to all the bidders who participated  Display is for a specified period as per PPDA  Dissatisfied bidders may lodge complaints for administrative review within that period. Publication of BEB 19

 A contract is awarded by the Contracts Committee to the bidder whose tender has been determined to:  be substantially responsive to the bid documents  offers the best evaluated bid and has been post-qualified and recommended by the EC  Options for the Contracts Committee:  Accept recommendation to award  Reject recommendation with reasons  Accept recommendation subject to some adjustments Award of Contract 20

 The employer (the Contracts Committee) has the right to accept any bid or to reject any bid or even to reject all bids!  A Letter of Bid Acceptance (LBA) by the employer notifies the successful bidder that their bid is accepted  The LBA states the consideration the Employer will pay to the Contractor on execution of works  Prior to the signing of a formal contract the LBA constitutes a binding contract.  A contractor must sign and return a contract agreement within 21 days of receipt. 21 Bid Acceptance

 A dissatisfied bidder may, by payment of a fee, lodge a complaint for any omission or breach.  A request for an administrative review must be in writing to the accounting officer within 15 days when the bidder became aware of the incident  A copy must be provided to the PPDA  If no decision is made within 15 days from submission or if the bidder is dissatisfied with decision of the AO, the bidder may apply to PPDA for an administrative review.  Application must be within 10 days. Rights of a dissatisfied bidder 22

 The details of the procurement  Details of the act, regulation or guideline  Explanation of how the rule is breached  Dates of the breach and names of the public officers responsible  Documentary support  Any other relevant information 23 Information to be submitted by the aggrieved applicant

 Suspends the procurement process and informs the Contracts Committee  Institutes an investigation and reviews information  Submitted by applicant, from staff of the PDE and from other bidders  Issues a decision within 15 days of receipt of the complaint stating:  Whether to uphold or reject the complaint  Reasons for the decision  Any corrective measures taken 24 Response by the AO

 If escalated to PPDA, it will review information provided by the bidder and from the PDE.  The tender council carries out an administrative review and reports to PPDA and Solicitor General for final decision.  Decision must be delivered by PPDA within 21 days stating:  Whether application is upheld or rejected  Reasons for the decision  Any corrective measures taken. 25 Response of PPDA

 Outline the major areas to consider in evaluating a road works bid. For each suggest what you would do to maximize your scores using the Quality and Cost- Based Selection (QCBS) Method 26 Discussion Session

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Criteria Maximum Score (%) Actual Score (%) Specific experience of the firm10 Tools and equipment30 Qualifications and competence of key personnel 40 Transfer of knowledge10 Local participation10 Total Score100 % Example of a typical technical criteria rating system for works 28