1 Bid evaluation - Works  Clarification of bids ( if necessary)  Determination of responsiveness “Substantial” responsiveness No material deviations  Correction of errors Figures / words Unit rate / total Misplacement of decimal point

2 Bid evaluation – Works (cont.)  Conversion to single currency Options  Any specified date not earlier than 4 weeks prior to bid closing not later than original date for expiry of bid validity  Date to be clearly specified in bid documents

3  Evaluation and comparison of bids Compare bids in single currency, after excluding provisional sums, contingency Add monetary cost of quantifiable variations* with implications Add value of benefits foregone for longer times of completion* * Only where applicable Bid evaluation – Works (cont.)

4 Adjust for “acceptable” quantifiable variations Preference for domestic bidders** 7 - 1/2% on the adjusted bid price **for eligible countries only Bid evaluation – Works (cont.)

5 Correction for error

6 Comparison of bid conversion to common currency  Object To determine lowest evaluated bid on date specified  Bid price Convert into amounts payable in each currency Pre-stated common currency Either borrower’s or any currency such as USD or €

7 Comparison of bid conversion to common currency (cont.)  Exchange rates at date specified Into local currency  Official source such as central or local commercial bank Into foreign common  Selling rates as published in specified international press for foreign component  Selling rates of central / local commercial bank for local component

8 Preference for domestic contractors  Borrower may grant margin of preference for comparison of bids With prior agreement of bank Include in loan / credit agreement For ICB only

9 Preference for domestic contractors (cont.) Requirements for eligibility for margin of preference (7.5%)  Applicable only for “domestic bidders” i.e. Individual firms 1. Registered in borrower country 2. Greater than 50% national ownership 3. Not more than 50% subcontracting to foreign firms  Joint-venture of domestic firms 1. As in 1 & 2 above 2. Joint venture registered in Borrower’s country

10 Preference for domestic contractors (cont.) Bidding documents to indicate preference, criteria and methodology for evaluation Bidder to furnish data to support eligibility as domestic contractor

11 Life cycle cost methods  Cost to own and operate item during its useful life Initial purchase price  Adjusted for extras, delivery, variations in payment terms, etc. *Value of adjustments added to bid price Operating cost during life of item  Fuel, spare parts, maintenance (x years) *Annual costs discounted to NPV Ownership cost during life of item  Economical useful life (x years) *Resale of scrap value discounted to NPV

12 Life cycle cost methods (cont.)  Efficiency cost method during its useful life Capitalize differences in efficiency in operation of items i.e. boiler, turbine, transformer, etc. during life  Productivity cost method Determine life cycle cost per unit of output for comparison purposes Life cycle cost of plant (x years) NPV divided by total unit output of plant

13  Productivity cost method Determine life cycle cost per unit of output for comparison purposes Life cycle cost of plant (x years) NPV divided by total unit output of plant Life cycle cost methods (cont.)

14 Post-qualification  Only for lowest evaluated responsive bidder  Criteria (update pre-qualification info) Capacity (new work commitments) Financial resources Management Critical equipment Current litigation

15 Bid evaluation - Report content  Identification of contract  Bidding process Pre-qualification / advertising amendments  Bid submission/opening Bidder identify prices/currencies

16 Bid evaluation - Report content (cont.)  Examination and evaluation Responsiveness / reasons for rejection Corrections Currency conversion / exchange rates Deviations / treatment / calculations  Proposed contract award  Standard format

17 Rejection of all bids  Permissible only on consultation with bank  Only if lowest bid exceeds estimate by substantial margin, or  If bids are not responsive, or  Lack of competition, if so  Review specifications and contract conditions before re-inviting bids

18 Award of contract  Selected bidder should not be required : To reduce price To undertake work not specified in the bidding document, or To modify the bid

19 Award of contract (cont.)  The employer should : Award the contract within the period of the validity of bids To the bidder whose bid has been determined to be the lowest evaluated bid, and Who meets the appropriate qualifying standards