Exercise: BID EVALUATION

Procurement of 100 Urban Buses

Extract from Bid Data Sheet

1. Domestic Preference: Not Applicable

2. Currency Conversion: Currency chosen for the purpose of converting to a common currency:
US Dollars
Source of Exchange Rate: Financial Times of London
Date of Exchange Rate: at Bid Opening Date
3. Criteria for bid evaluation: Purchase price plus adjustments for a) Delivery Dates, b) Cost of
spares parts for initial 4 years, c) Fuel costs for initial 4 years and d) Capacity.
a) Delivery: According to the Schedule of Requirements, the buses shall be delivered from 6
to 12 months from the date of opening the Letter of Credit. Any deliveries within this period
are acceptable to the Purchaser. Partial shipments within that period are permitted. Bids
offering earlier shipments will not be given any credit and bids offering delivery later than 12
months shall be treated as “non-responsive”. Within the acceptable range of 6-12 months, an
adjustment of US$3,000 per bus/per month will be added to the bid price for evaluation
purpose only.
(b) Cost of spares parts: Bidders shall quote for the requirements (as listed by the Purchaser)
for the first 4 years of operation
(c) Fuel Operating costs: Fuel costs shall be evaluated for 4 years assuming that the bus will
operate for 20,000 km per year at fuel cost of US$1 per liter. A 8% discount factor will be
applied in the calculation of the NPV of fuel consumption over the 4 year period. Bidders shall
state the guaranteed fuel consumption per 100 km in their bids.
(d) Capacity: The minimum capacity shall be 60; for each additional passenger, the bidder will
get a credit as a bid evaluation adjustment of US$ 5,000.
The Exchange Rates announced by the Financial Times of London on the bid opening date were as
follows:
1 Euro = 1.2 USD, 1 USD= 100 Yen
Four bids were received who quoted the following bid prices, delivery terms, fuel consumption,
and capacity figures.
 Evaluation Bidder A Bidder B Bidder C Bidder D
Parameter
CIP price/bus 41,500 USD 36,700 Euro 42,000 USD 4,300,000 Yen
Delivery Dates 9 months 5 months 50 buses in 6 20 buses per
as of date of LC months month from the
opening 50 buses in 9 6th month
months
Guaranteed fuel 38 34 32 36
consumption
per 100 km (in
liters)
Spare parts for 9,500 USD 6,700 Euro 4,000 USD 1,000,000 Yen
first 4 years
Maximum 60 62 64 62
passengers

You are requested to conduct the bid evaluation exercise, assuming that all four bids are fully
responsive, and select the winning bidder in accordance with the stipulated evaluation criteria.
NB: Net Present Value of a future cost = this future cost divided by (1+0.08) for the first year and
for every subsequent year the latter bracket is multiplied by itself the corresponding number of
times according to the number of discount years (the 0.08 inside the parenthesis is the 8%
discount rate).