Bid Evaluation Process for Road Works and Services: Key Guidelines and Committees

Evaluation of Bids and Contract Award Module 6: Session 7

Learning Objectives 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 2

Bid Evaluation 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. 3

The Evaluation Committees 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. 4

Members of the Evaluation Committee 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 5

Guiding Principles for Bid Evaluation 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. 6

Testing compliance and responsiveness 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

Waiver of non-conformity 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

Preliminary Evaluation: Eligibility and Administrative Compliance 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

Common Preliminary Evaluation Requirements 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

Other Administrative Compliance checks 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 11

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

Quality and Cost Based Selection 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. 13

Stages in a quality and cost based selection 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. 14

Example of a typical technical criteria rating system for works Criteria Maximum Score (%) Actual Score (%) Specific experience of the firm 10 Tools and equipment 30 Qualifications and competence of key personnel Transfer of knowledge 40 10 Local participation 10 Total Score 100 % 15

Examples of a Quality and Cost best evaluated bidder Best weighted evaluated bidder (Technical 70%, financial 30%) Scoring technical and financial evaluation (Minimum Technical score 75%) Bidder Tech score Financial Bid (shs) Financial score Bidder Tech score Fin. score Weighted A 86% 110m 91% A 86x0.70 91x0.30 87.5 B 90% 135m 74% B 90x0.70 74x0.30 85.2 C 78% 100m 100% C 78x0.70 100x0.30 84.6 D Dropped D 72% 120m Not opened 16

Best Evaluated Bidder 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

Post-qualification 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

Publication of BEB 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. 19

Award of Contract 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 20

Bid Acceptance 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

Rights of a dissatisfied bidder 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. 22

Information to be submitted by the aggrieved applicant 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

Response by the AO 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 of PPDA 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

Discussion Session 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

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Example of a typical technical criteria rating system for works Criteria Maximum Score (%) Actual Score (%) Specific experience of the firm 10 Tools and equipment 30 Qualifications and competence of key personnel Transfer of knowledge 40 10 Local participation 10 Total Score 100 % 28