Procurement of Works Krishna Raj Panta.

Procurement of Works Krishna Raj Panta

Topics of discussion Procurement Methods Bidding Procedure
Bid Document Preparation Bid Evaluation

Methods of Procurement
Open competitive bidding Limited bidding Sealed quotation Direct Procurement Community Participation Force account Emergency procurement Lump sum rate method Catalog Shopping Limited Bidding Buy Back Method

Open competitive bidding
International Competitive Bidding (ICB) An international competitive bidding shall be invited on any of the following conditions : Where the goods or construction works as requisitioned by a public entity are not available under competitive price from more than one construction entrepreneur or supplier within country. In making invitation to national tender for the procurement of goods, construction works or other services, no tender is submitted and same has to be procured aboard.

Open competitive bidding…
International Competitive Bidding (ICB) cont… Where foreign goods or construction works have to be procured from foreign assistance under an agreement enter into with a donor party. Where the public entity certifies the goods or construction works, being of complex and special type, have to be procured by means of an international tender. Notice on invitation to tender shall be published in English language an all tender or prequalification documents shall be published in English.

International Competitive Bidding (ICB) cont… In publishing a notice a period of at least 45 days shall be given Notice shall be published in daily newspaper of national circulation and it may also be published in any international communication media. Notice shall be placed in website of concerned entity or that of the Public procurement Monitoring Office (PPMO)

National Competitive Bidding (NCB) For any procurement having cost estimate more than 20 Lakh except medicine and medical equipments (for procurement more than 50 lakhs) for which ICB is not required, NCB shall be preferred. In publishing a notice a period of at least 30 days shall be given Notice shall be published in daily newspaper of national circulation. Notice shall be placed in website of concerned entity or that of the Public procurement Monitoring Office (PPMO)

Duration of Bid Invitation in case of re-bidding If procurement process is required to be cancelled and re- invitation of bidding is required, in publishing bid invitation notice for second time, a period of at least 15 days for NCB and 21 days for ICB shall be given, provided that no change is made in bid document. If procurement process is required to be cancelled in second time of bid invitation also, then bid invitation notice can be published third time with a period of at least 7 days for NCB after sufficient justification and with approval from pertinent higher level. If procurement process is failed in third time also and if procurement is emergency, procurement process can be completed using other procurement methods as per PPA.

Qualification Two forms of qualification (for procurement > 20 million in case of works except in exceptional situation) – prequalification and post- qualification – are used to ensure that bidders have adequate capability and resources to perform the particular contract satisfactorily taking into account their (1) experience record on works of similar nature and complexity, (2) financial capability, (3) personnel capability, (4) equipment capability and (5) litigation history Post qualification is carried out after bids are received as part of the bid evaluation process and it has the advantage of reducing the total procurement time by cutting out prequalification steps.

Prequalification Prequalification is carried out in advance of bidding to establish a list of capable firms to be invited to tender while ensuring that a proper level of competition is safeguard. In order to procure such construction work as determined to be large and complex by the PPMO from time to time or procure goods of high value such as industrial plants or identify qualified bidders, a public entity shall, prior to making invitation to tender, prepare prequalification documents and public invite to proposals for determination of prequalification.

Prequalification cont… Where a public entity considers appropriate may also determine prequalification for other procurement as well. Steps: Prepare prequalification documents. The documents shall set forth such qualification criteria required for prequalification and the method for preparation of offers and the manner for the submission of offers. Get the qualification criteria approved by department head The documents shall bear signature of chief of public entity or the employee designated by him and seal of office

Prequalification cont… Publish notice for offer on national newspaper and website of concerned entity or PPMO giving duration of submission at least 30 days for NCB and 45 days for ICB. Provide the prequalification documents to interested firms, person, organization or company by collecting a fee as follows: For procurement of million Nrs. 5000 For procurement of Million Nrs For procurement of greater than 250 Million Nrs Open the proposal and evaluate against evaluation criteria. Prepare a list of selected applicants and send to all applicants Provide reason of rejection to applicant who request to provide reason within 30 days after the notice.

One stage bidding (NCB or ICB) The Single-Stage, One-Envelope bidding procedure is the default or main bidding procedure and is used in most of the procurement. Bidding Procedure Preparation of Bidding Document Invitation of Bid Sale of Bid documents Registration of Bids Opening of Bids Evaluation of bids Letter of intent Letter of Acceptance Contract agreement

Bidding Procedure… Bid invitation
For NCB or PQ proposal : Minimum 30 days For ICB or PQ Proposal : Minimum 45 days To be published in Web Site; For central level public entity, website of public entity or of Website PPMO For district level public entity website of public entity or website of PPMO

Bidding Procedure… Sale and registration of Bid
Shall issue the bidding documents only to qualified bidders where prequalification is used. Where post qualification is used, bidding documents shall be issued only to eligible bidders Bidding documents shall not be transferable to other firm and shall be submitted along with bid. Sale from two or more public entities Registration in one pubic entity E-Bidding also possible

Bidding Procedure… Price of Bidding Documents
2 million to 20 million Rupees : Rs 3000 > 20 million to 100 million Rupees : Rs 5000 > 100 million to 250 million Rupees : Rs 10000 > 250 million Rupees : Rs 20000

Bidding Procedure… Withdrawal and Modification of Bid
Within last submission date of bid in sealed envelop in case of bidder who submits bid electronically Within 24 hour before the last submission date for other bidders Withdrawal or modification can be done at one time only. Pre-bid meeting For NCB at least 10 days before of last submission date For ICB at least 15 days before of last submission date To be informed to bidders if any amendment within 5 days pre bid meeting

Bidding Procedure… Bid Security 2 to 3 % of estimated amount
Validity of bid security 30 days more than bid validity period Validity period of bid security to be extended if bid validity is extended Needs counter guarantee of commercial bank in Nepal for bid security of foreign bank Bid security will be forfeited if If requested for withdrawal or modification within the period of last bid submission date and last date of bid validity

Bidding Procedure… Bid Security cont…
If the bidder does not accept the correction of arithmetic error If the selected bidder rejects for agreement If the selected bidder fail to submit performance bond within due date of contract agreement If clarification submitted by bidder makes substantial change to the bid If the bidder violates the code of conduct as per clause 62 of PPA.

Bidding Procedure… Bid validity Period
Bid validity period is a period within which bidder’s rate are valid Contract agreement is done within bid validity period For bid having estimated cost within 100 million : 90 days For bid having estimated cost above 100 million : 120 days Period to be counted from last date of bid submission Can be increased with justified reasons Who agrees to extend bid validity shall extend validity of bid security also Bid bond amount shall be returned to bidder if he disagrees to extend bid validity

Bidding Procedure… Bid Opening
Immediately after last date and time of bid submission in presence of bidders as far as possible (Absence of bidders does not disturb the opening process) Then bid submitted electronically are opened first and then other bids are opened Before opening bid, envelop of letter of withdrawn or modified bid shall be opened and read Then remaining bids shall be opened and matters like bid security, discount if any etc. shall be read, noted and signed No bid shall be rejected at the time of opening

Bidding Procedure… Bid Evaluation Bid Evaluation Report
Selection for Award of Contract Does LEB meet each criterion; If not proceed to next Recommend bid for award. Selected bidder is the lowest technically responsive qualified bid. Performance security To be taken to ensure due performance of contract 5% Of Contract Value

Bidding Procedure… Performance security …
If bid price of the bidder selected for acceptance is up to 15 (fifteen) percent less than the approved cost estimate, the performance security amount shall be 5 (five) percent of the bid price. For the bid price less than 15 percent of the cost estimate, the performance security amount shall be determined as follows: Performance Security Amount = (0.85 × Cost Estimate – Bid Price) × % of Bid Price. The Bid Price and Cost Estimate shall be inclusive of Value Added Tax

Bidding Procedure… Contract award
Letter of intent is issued within seven days of bid selection & information should be given to other bidders also. If there is no complaint from other bidders within seven days, letter of acceptance is issued to notify the successful bidder to come with performance security for contract agreement within 15 days. If successful bidder fails to furnish the performance guarantee and to sign contract within 15 days, then his bid security shall be forfeited and bid of next lowest responsive bidder is accepted and called for agreement

Bidding Procedure… Contract award…
If lowest evaluated bidder does not sign the agreement, in addition to forfeiture of bid bond PPMO on the recommendation of PE blacklist the bidder. If any bidder requests for information on the reason for rejection of within 30 days of issuing of letter of intent, the public entity shall communicate such information to the bidder.

Bidding Procedure… Rejection of tender or cancellation of procurement proceedings Where non of the tenders is substantial responsive Where the bid price of the lowest evaluated substantially responsive bid is substantially higher than cost estimate Where the goods, construction works, consultancy service or other services as required are no longer required. No tender shall be rejected or re tendering shall be invited only by the reason that only a few tenders or only one tender is substantial responsive. A public entity shall communicate a notice along with the reason for the rejection of tenders or the cancellation of procurement proceedings to all bidders.

Two Envelop System For procurement of construction work costing above 20 million. The bidders submit simultaneously two sealed envelopes, one containing the technical proposal and the other the price proposal. Initially, only the technical proposals are opened at the date and time advised in the bidding documents. The price proposals remain sealed and are held in custody by the Executing Agency. The technical proposals are evaluated by the Executing Agency. No amendments or changes to the technical proposals are permitted.

Two Envelop System The objective of the exercise is to allow the Executing Agency to evaluate the technical proposals without reference to price. Bids of bidders who do not conform to the specified requirements is rejected. Following approval of the technical evaluation, and at a date and time advised by the Executing Agency (7 days duration to be given after notice), the price proposals are opened in public. The price proposals of the technically responsive bidders are evaluated and, the award of contract is made to the lowest evaluated substantially responsive bidder. Financial proposal of bidders who fail in technical proposal shall be returned to concerned bidder without opening

Sealed Quotation Procurement of works up to 2 million except medicine and medical equipments (5 million) can be carried out adopting sealed quotation. Procedure Preparation of Sealed Quotation Document Invitation Notice in national or local newspaper with minimum period of 15 days Sale and registration of Bid :Same as open bidding Bid validity period : 45 day

Sealed Quotation Bid security : same as open bidding (validity 75 days) Withdrawal and Modification of Bid Not allowed Sale and registration of Bid Same as open bidding Bid Evaluation & Bid Evaluation Report Same as open bidding except if less than three sealed quotations are submitted, it shall be cancelled and re-notice is published. However for the second time less than three sealed quotations can be evaluated. Selection for Award of Contract

Sealed Quotation Price of Bidding Documents: Rs. 1000
Performance security Same as open bidding Contract award The public entity shall accept the sealed quotation within 15 days of opening. Notice is issued to selected bidder within seven days of acceptance of the sealed quotation. Notice is issued to other bidders also. The sealed quotation bidder who receives the notice shall enter into the procurement contract by furnishing the performance guarantee within seven days of date of receipt of such notice.

Direct Procurement Goods or Consultancy Services or Other services or construction work may be procured by means of direct procurement in the following circumstances: The value of miscellaneous procurement does not exceed the prescribed threshold. Medicine and medical equipments : Up to 20 Lakh Other procurement : Up to 5 Lakh In this situation quotation shall be demanded with at least three firms which are registered in the standing list of office. Only one supplier or construction entrepreneur or consultant or service provider has technical capacity or capability to fulfill the procurement requirement. (public notice to be published)

Direct Procurement cont…
Only one supplier has the exclusive right to supply the goods to be procured and there is no other suitable alternative . (to be purchased with authorized supplier and public notice to be published) Additional goods or services of proprietary nature within the prescribed threshold are to be procured from original supplier or consultant or service provider after it is established that if there is a change of supplier or consultant or service provider so as to replace or extend the existing goods or services or spare parts of installations, it will be difficult to replace or extend the existing goods or services in the public entity. Up to 30 % of the existing contract price Approval of one level higher authority for making procurement in this way. (Public notice to be published)

It is necessary to procure essential construction works, goods, consultancy services within the threshold as prescribed, which were not included in the initial contract because of unforeseeable reasons and have become necessary since the separation of such works, goods or services from the initial contract would be difficult for the technical or economic reason. The service of a particular consultant with any unique qualification is immediately required for the concerned task or it is indispensible to obtain service from the then consultant. (public notice to be published) Except miscellaneous procurement or procurement of proprietary nature, direct procurement is made according as the decision made by council of ministers.

Council of ministers decide according to the recommendation made by following committee. Chief secretary : Coordinator Secretary, ministry of finance : Member Secretary, concerned ministry : Member Financial Comptroller General : Member This provision is applicable only for pure governmental entity Except Pure governmental organization direct procurement is made according to decision made by highest executive body of concerned entity.

Approval of one level higher shall be obtained for making procurement of goods or service of proprietary nature. Goods manufactured in Nepal can be purchased directly up to 15 lakhs in published price Medical equipments can be purchased with manufacturer directly up to 20 lakhs in published price Goods produced in domestic industry can be purchased directly up to 25 lakh Hotel expenditure of VIP guests invited by Nepal government up to 50 lakh can be procured directly. Building maintenance of embassy situated in foreign countries can be procured directly up to 25 thousand US$.

If manufacturer of goods to be procured is only one in Nepal and there is not another alternative, chief of public entity can procure directly under following conditions: The manufacturer shall publish list of retail and dealer price in national newspaper The manufacturer shall give discount same as he gives to local dealer. PPMO can make inspection to such manufacturer regarding manufacturing cost. If PPMO founds abnormal manufacturing cost, it may blacklist the manufacturer. Procurement by one public entity with other public entity Procurement with international inter Government organization Medicine procurement with medicine manufacturer pre qualified by WHO if the pre qualified manufacturer is only one

Community Participation
This method is used for executing small labor intensive works where the objective is to: Provide employment and income directly to persons living in the project area. Increase the utilization of local know how, appropriate technologies and materials Hand over the completed works for operation and maintenance directly by persons living in the project area. When objective of project is to create employment which enhances the economy, quality or substantiality of beneficiary community then this method is used. Works up to 10 million (including VAT, contingencies & portion of community) may be carried out by community participation.

Force Account Procurement execution by force account means execution of public works using the resources of a public agency of the government, without recourse to competitive bidding. Use of force account may apply in the following situation: The size, nature and location of the works make it unsuitable to adopt competitive bidding, e.g. maintenance and repairs works and where the cost is difficult to estimate accurately. Work must be carried out without disrupting existing operation, by crews familiar with those operations. The risks of unavoidable work interruption are better borne by the than by a contractor. No contractor is interested in carrying out the work at a reasonable price.

Force Account cont… Emergencies needing prompt attention.
Institutional development e.g. training of maintenance crews. The implementing agency is responsible for management of the works and must assign sufficient staff for supervision. A public entity shall obtain prior approval of one level higher authority in order to procure a work through force account. While doing work through force account, the public entity shall procure the technical service and construction materials required for that work in accordance with the procedures of procurement of goods and services.

Emergency Procurement
In special circumstances, emergency procurement is carried out. Special Circumstances means a circumstance resulted from natural or divine calamity and sudden or unexpected special circumstance such as Draught No rainfall Deluge Earthquake Flood Landslide Firing War or internal conflict

Emergency Procurement…
Where the occurrence of special circumstance has created a situation in which, if a procurement is not made immediately, the public entity will sustain further loss, the Public Entity may procure or cause to be procured immediately. The chief of the Public Entity shall have to give information of the circumstances and the detailed description concerning the procurement to be made immediately to one level higher authority. Competition in procurement shall be made as far as possible. Records of procurements including justification of special circumstances shall be maintained. For procurement in special circumstances of amount more than one million , public notice shall be published and information shall be sent to PPMO.

Bid document Definition
Documents required to be submitted in response to an Invitation to bid. These include the prescribed bid form, drawings, specifications, time lines, charts, price breakdowns etc. Also called bidding document. Importance To minimize the confusion in decision making process during procurement proceedings including evaluation To make procurement proceedings easy, quick and effective To minimize the disputes during procurement proceedings and contract execution

Bid document preparation
During bid document preparation standard bid document shall be used Frequently used standard bid documents in Nepal Standard bid documents prepared by PPMO These documents are mostly used in procurement process especially when procurement is under the funding of government or procurement under donor funding when procurement is not so large. Other standard bid documents FIDIC documents Standard bid documents of donor agencies Used in large procurement; preferably ICB or when donor has condition to use their own documents.

Bid document preparation cont…

Standard bid documents issued by PPMO Procurement of goods (NCB) Procurement of goods (ICB) NCB works single stage two envelop for 20 million to 1 billion Procurement of Works for 2 million to 20 Million (NCB) Procurement of Works Single stage post qualification (ICB) Procurement of works ICB two envelop Procurement of works prequalification document EOI document for short listing of consultant Standard RFP for selection of consultants Lump-sum Standard RFP for selection of consultants time based

Contents of bidding documents Broadly there are three different parts in bidding documents: Bidding Procedures : Contained in standard form in standard bidding documents Requirements : Have to write (Not contained in SBD) Conditions of contract and contract forms : Contained in standard form in SBD Part I Bidding procedures Section1 - Instruction to Bidders (ITB) Section 2 - Bid Data Sheet (BDS) Section 3 - Evaluation and Qualification Criteria (EQC) Section 4 - Bidding Forms (BDF)

Part II Requirements Section 5 - Work Requirements (WRQ) Scope Specification Drawings Section 6 - Bill of quantities (BOQ) Part III Conditions of contract and contract forms : Section 7 - General Condition of Contract (GCC) Section 8 - Special Condition of Contract (SCC) Section 9 - Contract Forms (COF)

Part I : Bidding Procedures Section 1 - Instruction to bidders (ITB) This section specifies the procedures to be followed by Bidders in the preparation and submission of their Bids. Information is also provided on the submission, opening, and evaluation of bids and on the award of Contract.

Contents of bidding documents cont… Section 2 - Bid data sheet (BDS) This section consists of provisions that are specific to each procurement and supplement the information or requirements included in Section I - Instructions to Bidders. Section 3 - Evaluation and qualification criteria (EQC) This section contains all the criteria that the employer shall use to evaluate bids and qualify Bidders if the bidding was preceded by post-qualification exercise. GoN/DP requires bidders to be qualified by meeting predefined, precise minimum requirements. The method sets pass-fail criteria, which, if not met by the bidder, results in disqualification.

Bid document preparation…
Section 4 - Bidding forms (BDF) This Section contains the forms which are to be completed by the Bidder and submitted as part of his Bid.

Part II : Requirements Section 5 - Work requirements (WRQ) This Section contains the Specification, the Drawings, and supplementary information that describe the Works to be procured. Contents of work requirements (WRQ) Scope of works, Specifications, Drawings, Supplementary information Section 6 - Bill of quantities (BOQ) Objectives To provide sufficient information on the quantities of Works to be performed to enable bids to be prepared efficiently and accurately; and

Bill of quantities (BOQ) cont… Objectives cont… When a Contract has been entered into, to provide a priced Bill of Quantities for use in the periodic valuation of Works executed. In order to attain these objectives, Works should be itemized in the Bill of Quantities in sufficient detail to distinguish between the different classes of Works, or between Works of the same nature carried out in different locations or in other circumstances which may give rise to different considerations of cost. Consistent with these requirements, the layout and content of the Bill of Quantities should be as simple and brief as possible.

Bid document preparation…
Part III : Conditions of contract and contract forms Section 7 – General conditions of contract (GCC) This Section includes the general clauses to be applied in all contracts.

Section 8 - Special conditions of contract (SCC) Special Conditions of Contract shall supplement the GCC. Whenever there is a conflict, the provisions in SCC shall prevail over those in the GCC. Section 9 - Contract forms (COF) This Section contains forms which, once completed, will form part of the Contract. Contents contract forms (COF) Letter of intent, Letter of acceptance, Contract agreement, Performance security, Advanced payment security

Steps in preparation of bidding documents Use appropriate standard bid documents Write appropriate matters as per direction in SBD in open spaces of cover page e.g. name of public entity, issued date, bid no. etc. Read carefully the directions to use SBD stated in the standard bidding documents. No change should be made to the wording of the Section 1, Instructions to Bidders (ITB) Any change if require to be made in ITB as per specific nature of procurement, change can be made in Bid Data Sheet (BDS) indicating specific clauses in ITB. Such type of changes can be incorporated simply by filling the open spaces in BDS.

Steps in preparation of bidding documents cont… Prepare evaluation and qualification criteria required for the procurement. While preparing evaluation and qualification criteria adopt appropriate reference of standard bidding document. The bids shall be evaluated as per criteria stated in standard bidding document. No criteria is allowed to develop during evaluation. Qualification criteria The purpose of qualification criteria is to inform the bidder how he/she will be qualified to participate in the particular procurement

Steps in preparation of bidding documents cont… Qualification criteria cont… The purpose of qualification criteria is to inform the bidder how he/she will be qualified to participate in the particular procurement. Qualification criteria depends on the type, size, nature and complexity of the procurement. Qualification criteria shall be developed in such a way that it should not limit the competition.

Developing evaluation & qualification criteria
Adequacy of Technical Proposal Multiple Contracts Experience Financial Situation Current Contract Commitments, Cash Flow Capacity, Equipment to be allocated, and Personnel to be fielded Completion Time Alternative Technical Solutions Quantifiable Nonconformities, Errors and Omissions PROJECT LAUNCH WORKSHOP – MODULE 9

Developing evaluation & qualification criteria
1. Eligibility Conflict of Interest Government-owned Entity UN Eligibility Other Eligibility Copy of Firm Registration Certificate Copy of Business Registration Certificate Copy of VAT and PAN Registration Certificate Copy of Tax Clearance Certificate/Tax return A written declaration stating s/he is not ineligible to bid PROJECT LAUNCH WORKSHOP – MODULE 9

Evaluation and Qualification: Eligibility
Criteria Compliance Requirement Requirement Single Entity Joint Venture All Partners Combined Each Partner One Partner Conflict of Interest No conflicts of interest in accordance with ITB Sub-Clause 4.3. must meet requirement existing or intended JV must meet requirement not applicable Government-owned Entity Applicant required to meet conditions of ITB Sub-Clause 4.5. PROJECT LAUNCH WORKSHOP – MODULE 9

Evaluation and Qualification: Eligibility
Criteria Compliance Requirement Requirement Single Entity Joint Venture All Partners Combined Each Partner One Partner UN Eligibility Not having been declared ineligible based on a United Nations resolution or Employer’s country law, as described in ITB Sub-Clause 4.8. must meet requirement existing or intended JV must meet requirement not applicable PROJECT LAUNCH WORKSHOP – MODULE 9

Evaluation and qualification criteria cont…
Pending Litigation Financial Situation Historical Financial Performance Average Annual Construction Turnover Financial Resources Experience General Construction Experience Specific Construction Experience Contract of Similar Size and Nature Construction Experience in Key Activities Personnel Equipment PROJECT LAUNCH WORKSHOP – MODULE 9

Compliance Requirement
Pending Litigation Criteria Compliance Requirement Requirement Single Entity Joint Venture All Partners Combined Each Partner One Partner Pending Litigation All pending litigation shall be treated as resolved against the Applicant and so shall in total not represent more than …..……. percent of the Applicant’s net worth. must meet requirement by itself or as partner to past or existing JV not applicable must meet requirement by itself or as partner to past or existing JV not applicable Range is 50 to 100% PROJECT LAUNCH WORKSHOP – MODULE 9

Financial Situation Criteria Compliance Requirement Requirement Single Entity Joint Venture All Partners Combined Each Partner One Partner Historical Financial Performance Submission of audited balance sheets and income statements, for the last …… years to demonstrate the current soundness of the applicants financial position. As a minimum, a Bidder's net worth calculated as the difference between total assets and total liabilities should be positive. must meet requiremen t not applicable must meet requirement not applicable Range is 3 to 5 Years PROJECT LAUNCH WORKSHOP – MODULE 9

Financial Situation Criteria Compliance Requirement Requirement Single Entity Joint Venture All Partners Combined Each Partner One Partner Average Annual Construction Turnover Minimum average annual construction turnover of NRs. …………………., calculated as total certified payments received for construction contracts in progress or completed, within best three years out of last ten years.. must meet requirement must meet of the requirement 25% 40% Value is 1 to 1.5 times V/T, where V is Estimated Cost and T is Contract Duration in Years. T is take 1 if it is less than 1 year, PROJECT LAUNCH WORKSHOP – MODULE 9

Financial Situation Criteria Compliance Requirement Requirement Single Entity Joint Venture All Partners Combined Each Partner One Partner Financial Resources Using Forms FIN – 3 and FIN in Section 4 (Bidding Forms) the Bidder must demonstrate access to, or availability of, financial resources such as liquid assets, unencumbered real assets, lines of credit, and other financial means, other than any contractual advance payments to meet: the following cash-flow requirement NRs ………..…………….., and the overall cash flow requirements for this contract and its current works commitment. must meet requirement must meet of the requirement 25% 40% Not to Exceed Cash Flow requirement for six month based on Straight Line Projection. Range is generally 4 to 6 month. The financial resources shall be adequate to cover his bid price and current work commitments, e.g., [(7) x Working Capital + Lines of Credit] – 40% (Current Contract Commitments)  Bid Price PROJECT LAUNCH WORKSHOP – MODULE 9

Experience Criteria Compliance Requirement Requirement Single Entity Joint Venture All Partners Combined Each Partner One Partner General Construction Experience Experience under construction contracts in the role of contractor, subcontractor, or management contractor for at least the last ……. years prior to the applications submission deadline. must meet requiremen t not applicable not applicable Time Period is normally 5 Years or more, BUT may be reduced to 3 Years, according to nature of the works. PROJECT LAUNCH WORKSHOP – MODULE 9

Experience Criteria Compliance Requirement Requirement Single Entity Joint Venture All Partners Combined Each Partner One Partner Specific Construction Experience: Contracts of Similar Size and Nature Participation as Prime contractor, management contractor, or subcontractor, in at least ….…. contracts within the last ten (10) years, each with a value of at least NRs ….…………... that have been successfully or are substantially completed and that are similar to the proposed works. The similarity shall be based on the physical size, complexity, methods, technology or other characteristics as described in Section 5, Works Requirements. must meet requirement not applicable Generally 1 to 2 Contracts Usually 80% of the Estimated value of the Contract PROJECT LAUNCH WORKSHOP – MODULE 9

Experience Criteria Compliance Requirement Requirement Single Entity Joint Venture All Partners Combined Each Partner One Partner Specific Construction Experience: Construction Experience in Key Activities For the above or other contracts executed during the period stipulated in 2.4.2(a) above, a minimum construction experience in the following key activities: must meet all requirement s all requirements not applicable PROJECT LAUNCH WORKSHOP – MODULE 9

Personnel Equipment No. Position Total Work Experience [years]
In Similar Works [years] 1 A …… 2 B 3 C Equipment No. Equipment Type and Characteristics Minimum Number Required 1 X …… 2 Y 3 Z PROJECT LAUNCH WORKSHOP – MODULE 9

General conditions of contract shall not be changed in standard bidding document Change in general conditions of contract according as specific contract shall be made in specific conditions of contract. Put contract forms same as standard bidding document. Approval of cost estimate Up to 10 million = Gazetted 3rd class chief of office Up to 50 million = Gazetted 2nd class chief of office Up to 100 million = Gazetted 1st class chief of office Above 100 million = Department head Approval of bidding document Chief of public entity shall approve the bidding documents after preparation.

Bid Evaluation Principles of bid evaluation
Evaluation of bids must be consistent with the terms and conditions stipulated in the bidding documents. Fair, accurate and transparent evaluation of bids is one of the most important aspects of procurement. PPA & PPR objectives of economy, efficiency and fairness among bidders should have been met.

Purpose of Bid Evaluation
To determine the lowest evaluated substantially responsive bid among the bids submitted on or before the bid closing date and time specified in the bidding documents. The lowest evaluated substantially responsive bid may or may not necessarily be the lowest priced bid. To determine accurately the lowest evaluated substantially responsive bid in accordance with the terms and conditions of the bidding documents, a logical systematic evaluation procedure designed to cover all aspects of the evaluation process should be followed.

Principles in Bid Evaluation
Confidentiality of Procedures Clarifications and Alterations of Bids Rejection of Bids Extension of Bid Validity Period Rejection of All Bids Currency of Bid Evaluation Provisional Sums for Contingencies Provisional Sums for Dayworks Other Provisional Sums

Bid Evaluation Procedure
Four distinct stages in the bid evaluation process which should be followed in a logical sequence. Stage 1: Collection of information Stage 2: Determination of substantial responsiveness of bids Stage 3: Detailed evaluation of bids Stage 4: determination of the lowest evaluated substantially responsive bid

Collection of information
Basic Data Project Title: Loan Number (If any): Bid or Contract Title: Bid or Contract Number: Estimated Value or Engineer’s Estimate: Date Invitation For Bids Issued: Method Of Procurement:

Collection of information cont...
1) Basic Data cont… Bid Closing Date And Time: Bid Opening Date And Time: Number Of Bids Received: Bid Validity Expires On: Bid Security Validity Expires On: Date For Determining Applicable Exchange Rates: Exchange Rates For Evaluation:

Collection of information cont...
2. Record of Bid Opening Shall be opened at the time, date and place specified in the bidding documents Bidders that have submitted bids shall be invited Those present at the bid opening shall be required to sign the attendance sheet The bid prices including alternative bids if any, and the presence or absence of the requisite bid security read out. Discounts offered, modifications, withdrawals & other information if any should also be recorded

Preliminary Examination
2. Table of Examination for Completeness of Bids Documents regarding eligibility of bidder Required copies of bid Form of bid Priced Bill of Quantities Bid Security (amount and validity period) Schedule of Particular Information Drawings and Documents (to be submitted) Joint Venture Agreement etc. Power of Attorney submitted or not Bid Form properly signed or not

Substantial responsiveness of bid
Considered substantially responsive if it does not contain any “Major Deviations” from the bidding documents or conditions A major deviation is one which has an effect on the validity of the bid; or (b) has been specified in the bidding documents as grounds for rejection of the bid; or (c) is a deviation from the commercial terms or the technical specifications in the bidding documents whose effect on the bid price is substantial but cannot be given a monetary value.

1. Prepare table of bidders and bid Prices Should be examined for arithmetical errors and the errors, if any, should be corrected as per the bidding documents. The bidders must accept the corrections of arithmetical errors. If a bidder refuses to accept the corrections of errors, its bid shall be rejected and its bid security shall be forfeited, Convert all bid prices to the specified currency for bid comparison. Use the rates of exchange as per provisions of the bidding documents. Arrange in the order of ascending price.

2. Responsiveness to commercial terms and conditions Failure to sign the bid form and price Schedules Failure to submit a bid security Failure to satisfy the bid validity period Inability to meet the critical schedule Failure to comply with minimum experience criteria Conditional bids limiting the bidder’s responsibility Inability to accept the price adjustment formulae Failure to submit major supporting documents

3. Substantial Responsiveness to Technical Requirements Failure to bid for the required scope of work (e.g., for the entire works or a complete package or a complete schedule) Failure to quote for a major item in the package (A major item is approximately 10 percent or more of the total bid price) Failure to meet major technical requirements Failure to submit type-test reports for critical equipment, as clearly specified in the bidding documents.

4. Preparation of Table of Substantive Responsiveness of Bids Table of Commercial Terms and Technical Requirements The responsiveness of each bid should be checked against major conditions for Commercial Technical Requirements Bids that fail to conform to any of the major conditions should be considered non-responsive Bidders may be requested to provide clarifications in writing, Not permitted to change the substance or price of their bids & record must be kept.

Detail evaluation of bid in practice
1. Number of Bids for Detailed Evaluation Should include all substantially responsive bids which have a reasonable chance of becoming the lowest evaluated bid. Where there is no cluster of lower priced bids, detailed evaluation of the three lowest priced substantially responsive bids is generally adequate. 2. Detail evaluation To be evaluated in detail for commercial terms and for technical requirements Compare each criteria against requirement and if deviation is large consider it as non responsive

Detail evaluation of bid Cont…
3. Financial Adjustment of Bid Prices The bid prices should be adjusted for the purpose of bid comparison for those deviations which are permissible and which can be “translated” fairly into monetary values. Adjustment for Deviation from the Terms of Payment Adjustment for Deviation from the Delivery Schedule or Completion Adjustment for Cost of Inland Transportation to the Project Site etc.

The price adjustment should be based on a reasonable estimate; generally average quoted price by the other responsive bidders. Maximum adjustment = 15 % as per PPA & PPR 3. Detailed Evaluation of Bids for a Civil Works Contract a) Plans and Schedules Submitted by bidders to show how they propose to perform the contract. Construction schedules, construction methods and approach, human resources and equipment schedules, contractor’s site organization etc.

(b) Analysis of Bill of Quantities and Unit Rates to examine whether the unit rates of the bid are balanced to verify whether the bid price is reasonable to verify whether the bill of quantities is complete to examine the completeness of unit rates (C) Unbalanced Bids Higher unit prices for earlier works Higher unit rates for underestimated work items 4. Determine lowest evaluated responsive bid

5. Evaluate technical and financial capability Major Qualification criteria Pending litigation, Turn Over, Net Worth, Cash flow, Experience etc. Prepare a table and compare against requirement as pass/fail criteria 6. Award of contract Lowest evaluated responsive bid with qualification 7. Issuing of letter of intent (7 days for complain) 8. Letter of acceptance (15 days for performance bond) 9. Contract Agreement

Evaluation Report After evaluation of bids, the bids shall be submitted for approval along with bid evaluation report The Evaluation Report should include the following in tabular and narrative form: Basic Data Sheet; A photocopy of the Invitation for Bids advertised The Record of Bid Opening including the attendance sheet of the representatives of bidders; Tables of Bidders including nationalities, and Bid Prices including discounts offered as submitted and as corrected for arithmetic errors;

Evaluation Report... Table of Substantive Responsiveness to technical and commercial terms Table on Qualifications Adjustment of price with respect to technical and commercial requirement with relevant clause Table of Bid Price Comparison with discount, correction and adjustment Records of discussions and/or copies of correspondence with bidders relating to clarifications of their bids; Recommendation for award of contract;

Evaluation... Authority to accept bid
Up to 30 million = Gazetted 3rd class chief of office Up to 70 million = Gazetted 2nd class chief of office Up to 150 million = Gazetted 1st class chief of office Above 150 million = Department head Bid evaluation committee Chief of public entity or senior officer designated by him/her : Member Chief of financial administration section : Member Technical expert related in the field : Member Law officer (if available) : Member

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Procurement of Works Krishna Raj Panta.

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Procurement of Works Krishna Raj Panta.

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