1. Bidding and Tendering Principles
Procurement
Bidding and Tendering
Principles

2. Procurement Definition
Procurement is the acquisition of goods and/or services at the best possible total cost of ownership, in the right quantity and quality, at the right time, in the right place for the direct benefit or use of governments, corporations, or individuals, generally via a contract.
Almost all purchasing decisions include factors like delivery and handling, marginal benefit, and price fluctuations. Procurement generally involves making buying decisions under conditions of scarcity. If good data is available it is good practice to make use of economic analysis methods such as cost-benefit analysis or cost-utility analysis.
An important distinction is between analyses made without risk and those with risk. Where risk is involved, either in the costs or the benefits, the concept of expected value should be employed.
(Source: Wikipedia)

3. Forms of Procurement International Competitive Bidding
Limited International Bidding
National Competitive Bidding
Shopping
Direct Contracting
Force Account
Procurement from Specialized Agencies
Procurement Agents
Inspection Agents
Procurement in Loans to Financial Intermediaries
Procurement under BOO / BOT / BOOT, Concessions and Similar Private Sector Arrangements
Performance Based Procurement
Procurement under Loans Guaranteed by Financing Institution
Community Participation in Procurement
Procurement under Disaster and Emergency Assistance

4. Procurement Principles
Source of Procurement
Economy and Efficiency
Fairness
Transparency
Promotion of Domestic Industries

5. Documents Governing Procurement
Procurement Law (RA 9184, EO 109 [2002])
Financing Agreement (ADB/WB/IMF etc.)
Procurement Guidelines (NEDA, Financing Institution
Standard Bidding Documents
Handbooks and Guides

6. Procurement Principles Eligibility
Limitation for Participation
Ideally only by bidders' capability to fulfill the contract
Exceptions
(especially for projects funded by development banks/agencies)
Compliance with UN Security Council decision
Conflict of interest
Government owned enterprises
Declaration of ineligibility by Financing Institution (e.g. WB, ADB)

7. Procurement Plan (RA 9184 IRR)
All procurement should be within approved budget and should be meticulously and judiciously planned;
An Annual Procurement Plan shall be prepared by a government procuring entity. No government procurement shall be undertaken unless it is in accordance with an approved APP;
Each project component shall have a Project Procurement Management Plan, which is incorporated in the APP. PPMPs and APPs shall be regularly updated

8. Procurement Plan Bid Package Content of Bid Package Timing of
Delivery
Competitive
Aspects
Bid Package
Location
Market
Practices
Institutional
Capability

9. Sample Procurement Flow Chart
Bid Packaging
Prequalification
Bidding Documents
Bid Opening
Bid Evaluation
Award of Contract

10. Procurement Examples: International Competitive Bidding
Essentials of ICB
Threshold
Contracts valued in excess of US$ 1,000,000 (in case of ADB and World Bank financed projects)
Value for Money
For Borrower, wide range of choices in bid selection from among competing suppliers / contractors
Fairness, Transparency
For prospective bidders from eligible source countries, adequate, fair and equal opportunities

11. International Competitive Bidding Type and Size of Contracts
Type: Supply, Design-Supply-Install (Turnkey), Works
Size: Dependent on magnitude, nature and location of project
Payment: Unit Price, Lump Sum, Combination
Slicing: A bid may consist of multiple contracts (slices)
Procedure: Single/Two-Stage, One/Two-Envelope 13

12. International Competitive Bidding Typical Time Requirements-4 -3 -2 -1 1 2 3 4 5 6 7 8 9 10 11
Bid Packaging
Preparation of PQ Document
Prequalification
Preparation of Bidding Document
Bidding
Award

13. International Competitive Bidding Advertisement and Notification
Invitation for Bids or Prequalification to be published
. . . by Financing Agency in its web site, and
. . . by Government in English language newspapers of national circulation, or
. . . internationally known and freely accessible website
In case of Prequalification
Invitation for Bids will be send to prequalified bidders only 13

14. International Competitive Bidding Prequalification
Purpose
to ensure that bids are submitted only by firms that have the necessary qualifications in terms of
Eligibility
Experience
Financial Capacity
Pending Litigation
to undertake the work for which bids are to be invited.
Prequalification process usually used for
Large complex works contracts
Turnkey contracts
Contracts for fabrication of custom designed plant and equipment
Specialized service contracts
Complex IT contracts

15. International Competitive Bidding Prequalification
Benefits
For User
Protection from unqualified bids
Simplifies and expedites bid evaluation
Permits more objective assessment of bidder qualifications
Provides indication on number of firms interested to bid
For Bidder
Protects unqualified firms from cost of bidding
Assures bids will not be rejected on qualification grounds

16. International Competitive Bidding Bidding Documents
Bidding Documents shall :
Comply with requirements of the prevailing laws and/or Procurement Guidelines of the Financing Agency
Comply with agreed modifications or departures from the Guidelines
Comply with the format of the appropriate Standard Bidding Documents (SBDs) 13

17. International Competitive Bidding Bidding Documents
Part I: Bidding Procedures
Section 1 Instruction to Bidders
Section 2 Bid Data Sheet
Section 3 Evaluation and Qualification Criteria
Section 4 Bidding Forms
Section 5 Eligible Countries
Part II: Requirements
Section 6 Supply or Works Requirements
Part III: Conditions of Contract & Contract Forms
Section 7 General Conditions of Contract
Section 8 Particular Conditions of Contract
Section 9 Contract Forms

18. International Competitive Bidding Bidding Procedures (used for ADB-financed projects)
Single-Stage: One-Envelope
Single-Stage: Two-Envelope
Two-Stage: Two-Envelope
Two Stage

19. Bidding Procedures Single-Stage: One-Envelope
ADB
Approval
Deadline
STOP
Technical
Proposal
Technical
Proposal
Financial
Technical
Financial
Financial
Proposal
Preparation
Evaluation

20. Bidding Procedures Single-Stage: Two-Envelope
ADB
Approval
ADB
Approval
Deadline
Technical
Proposal
STOP
Financial
Proposal
Technical
Proposal
Technical
Financial
Proposal
Financial
Financial
Preparation
Evaluation 1
Evaluation 2

21. Bidding Procedures: Two-Stage: Two-Envelope
ADB
Approval
ADB
Approval
Deadline
Deadline
Technical
Proposal
Technical
Proposal
Revised Technical
Suppl. Financial
Revised Techn.
Proposal
Revised Techn.
Proposal
Suppl. Financial
STOP
STOP
Financial
Proposal
Financial
Proposal
Financial
Financial
Preparation 1
Evaluation 1
Preparation 2
Evaluation 2

22. Bidding Procedures: Two Stage
ADB
Approval
ADB
Approval
Deadline
Deadline
STOP
STOP
Technical
Proposal
Technical
Proposal
Revised Technical
Financial
Revised
Technical Proposal
Proposal
Revised
Technical Proposal
Financial
Proposal
Preparation 1
Evaluation 1
Preparation 2
Evaluation 2

23. Steps in Selection of Consultants
Competitive Selection
Project preparation (TOR, budget, etc)
Advertisement
Submission of Expressions of Interest
Shortlisting and Invitation (RFP)
Submission of Proposals
Evaluation and Ranking of Technical Proposals
Opening of Financial Proposals
Evaluation of Financial Proposals and Final Ranking
Contract Negotiations and Awarding

24. Procurement Issues Misprocurement
If Procurement is not carried out as agreed
declare misprocurement
cancel corresponding portion of financing (for projects funded by multilateral development banks)
exercise other remedies
If appropriate, may permit rebidding

25. Procurement Issues Fraud and Corruption
Corrupt Practice
the offering, giving receiving, or soliciting, directly or indirectly, of any thing of value to influence the action of any party in the procurement process or the execution of a contract
Fraudulent Practice
a misrepresentation or omission of facts in order to influence a procurement process or the execution of a contract
Collusive Practice
a scheme or arrangement between two or more bidders, with or without the knowledge of the Borrower, designed to influence the action of any party in a procurement process or the execution of a contract
Coercive Practice
the harming or threatening to harm, directly or indirectly, persons, or their property to influence their participation in a procurement process, or affect the execution of a contract

26. How to prepare responsive bids ?
(General Tips for Proposal Tendering)

27. How to Prepare Responsive Bids ?
Be compliant!
Submit a basic offer that complies with all terms and conditions of the bidding document, even if some of these conditions appear irrelevant
Don’t qualify!
Do not add any conditions. Conditionalities or qualifications will lead to rejection
Get official clarification!
Submit an official inquiry to the procuring entity if any provisions of the bidding document are unclear or unacceptable before the bid closing date or such date as may be specified.

28. How to Prepare Responsive Bids ?
Be aware of bid evaluation criteria!
Check if other factors besides price, such as delivery periods, efficiency, operating & maintenance costs, will be considered in the bid evaluation. These factors must be specified in the bidding document to be applied.
Be clear with alternatives!
Submit alternatives only if explicitly allowed in the bidding document. Alternative proposal, if allowed, should be submitted in addition to the compliant proposal. The proposed alternatives and corresponding changes in bid price should be clearly indicated. Only the alternative proposal submitted by the bidder with the lowest evaluated and substantially responsive compliant bid can be considered, unless otherwise provided in the bidding documents.

29. How to Prepare Responsive Bids ?
Ensure bid is complete !
Check if the bid complies with all the requirements of the bidding document such as bid security, power of attorney, additional documents such as test certificates and technical brochures. Incomplete Bids may be rejected.
Make final check of bid !
Amount, validity and text of Bid Security
Signatures and power of attorney
Joint venture agreement enclosed
References enclosed
Discounts in covering letter or appropraiate place as specified in the bidding document
Marking of envelopes

30. How to Prepare Responsive Bids ?
Be on time !
Submit bid within the stipulated deadline. Late bids will not be accepted.
During opening ensure !
All relevant prices are read out
All discounts are read out
Presence and amount of bid security is read out
No envelope remains unopened
All the above is recorded correctly
The record is signed by all bidders present and by the buyer
Be Aware of Possible Extension !
There may be a request to extend the bid validity period by several months, as in certain cases the evaluation of bids requires more time than originally expected.

31. Thank You