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TYPES OF BIDDING IN GENERAL

What is Bid?
A Bid/quotation is written offer in response
to invitation to do a work or to provide a
material at a given price within a prescribed
period and under certain specific conditions.
The main types of bidding in general are as follows:
 Single-Stage: One Envelope
At this stage the bidders submit their bids in one
envelope consisting of technical and financial proposals. In this
case the bids are opened in public and are evaluated accordingly
as per procedures. The contract is awarded to the lowest
evaluated and substantially responsive bidder. (This is usually the
basis for procurement of works).

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Bidding Procedures Bidding Procedures

Single-Stage: One-Envelope (Default) Single-Stage: One-Envelope (Default)
Donor Agency
Deadline Approval
 Speed
STOP
PROS  Transparency
Technical
Proposal Technical
 Technical non-conformities weighed
Proposal against potential cost savings before bid
rejection
Technical

Financial
Proposal
Financial
Financial
 Risk that bid evaluation will be less
Proposal objective and ignore significant technical
CONS deviations
 Risk that lowest bidder will initiate
complaints/litigation if declared non-
responsive
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Bidding Procedures
TYPES OF BIDDING IN GENERAL Single-Stage: Two-Envelope
The main types of bidding in general are as follows:
Donor Donor
Deadline Agency Agency
Approval Approval
 Singe-Stage: Two Envelope Technical
STOP Proposal
The bidders submit their bids in two separate envelopes,
containing the technical and financial proposals. The procuring Financial
agency open the technical proposal first and after its evaluation Technical Proposal
Proposal
and approval, the financial proposal for qualified technical alone
Technical
is opened publicly. The contract is awarded to the lowest
evaluated bid on the basis of combined evaluation of technical
and financial proposals. (This is usually adopted for selection of
consultants). Financial
Proposal

Financial
Financial

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Bidding Procedures Bidding Procedures

Single-Stage: Two-Envelope Two Stage
Donor Donor
Deadline Agency Deadline Agency
Approval
 Price does not influence technical Approval

evaluation STOP STOP

PROS
 Reduced risk of complaints/litigation
from bidders Technical Technical Revised
Technical Proposal
Revised
Technical Proposal
Proposal Proposal

Financial Financial
Proposal Proposal

 Higher risk that financial proposal may be

CONS manipulated
 More time consuming because two sets of Revised Technical
approvals are required Technical
Financial

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Bidding Procedures
Two-Stage TYPES OF BIDDING IN GENERAL
Two-Stage: Two Envelope
At this stage both technical and financial bids are
Bid evaluation of first stage bids is not submitted separately as in the case of single-stage: two envelope
PROS hampered by time limitation since there is no type bid, the difference arises in the evaluation process which
price proposal consists of two stages. At the first stage, the technical proposal
is being evaluated and the bidders are asked to adjust technical
bids. At the later stage, the bidders are asked to submit
supplementary price bids containing changes in price based on
modified technical bids. After that the original and supplementary
If only one bidder remains after first stage price bids are opened in public. (This is adopted for complex
CONS evaluation, the bidding process has to be projects and were technically unequal proposals are likely to be
terminated because price proposal will not
be submitted under competitive pressure encountered or Executing Agency (EA) is aware of its options
available for equally acceptable solutions in the market).

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Bidding Procedures Bidding Procedures

Two-Stage: Two-Envelope Two-Stage: Two-Envelope
Donor Donor
Deadline Agency Deadline Agency
Approval Approval
Technical
STOP
Technical Revised Techn.
STOP
Revised Techn. If after first stage bid evaluation only one
Proposal Proposal Proposal Proposal
PROS bidder remains, bidding process can continue
Suppl. Financial Suppl. Financial because a competitive price bid was
Proposal Proposal submitted up front
Technical

Revised Technical

Financial Suppl. Financial If first stage bid evaluation takes too long,
Proposal CONS bid validity may expire and bidders may not
agree to extensions
Financial
Proposal

Financial Financial Financial

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Contract System Contract System

 Single contract  Separate contracts
◦ Owner contracts with prime contractor ◦ Owner contracts separately for:
◦ Prime contractor hires subcontractors and  General construction
material suppliers  Plumbing
◦ Subcontractors and suppliers are responsible  Heating
towards the prime contractor  Electrical
◦ Prime contractor is responsible directly to the  Sewage disposal
owner.  Specialties (Elevators, Lifts, Air conditioning)
 Etc.

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