Kyambogo university

Bachelor of Engineering in Electrical

Engineering (BEE) Year 4 , SEMESTER I, 2023

TEEE4107: PROJECT PLANNING AND MANAGEMENT

LECTURE 7: Bidding and Bid Evaluation Process

• JULIUS PLUCKER
• 0705666065
• jpyazzi2@gmail.com
Bid Evaluation Process
• “Bid” is increasingly being used by the bidder (the supply side)
and the term “tender” used on the procurement side (the
buyer).
• Bid – an approach to a client in order to gain significant new or
repeat business.
• Definition of Bid Evaluation
• Bid evaluation is the organized process of examining and
comparing bids to select the best offer in an effort to acquire
goods, works and services necessary to achieve the goals of an
organization. The best offer recommended as a result of bid
evaluation is referred to as the lowest responsive evaluated
bid. It may also be called the most economically advantageous
tender (MEAT).
Bid Evaluation Process…….continued
• Bid evaluation is the responsibility of a body known as the
Bid Evaluation Panel. How this panel is called depends on
the organization.
• Most procurement Legal and Regulatory Frameworks
require it to be an ad-hoc body with at least three members
knowledgeable in Procurement, with technical expertise in
the specific item being procured and a representative of the
user entity.
• Prior to evaluation of bids, the evaluation criteria are
predefined and included in the bidding documents. The bid
evaluation panel evaluates bids based on the predefined
criteria only and recommends award to the lowest
responsive evaluated bid.
Lowest Responsive Evaluated Bid versus Lowest Priced
Bid
• A lowest responsive evaluated bid, as the phrase suggests,
is a bid that has been examined and determined to be
responsive to formal qualification requirements, evaluated
in detail, found to be compliant with pre-defined
evaluation criteria, and found to have the lowest price
after price evaluation and comparison.
• The lowest priced bid is the bid with the lowest price read-
out at the public bid opening event without being
evaluated.
• Therefore, the bid recommended for contract award may
not necessarily be the bid with the lowest read-out price.
Evaluation Criteria
• Evaluation criteria are the standards against which bids
are evaluated. Generally, evaluation criteria can be
categorized into three categories including (i) mandatory
criteria, (ii) weighted criteria and (iii) weighted criteria
with mandatory elements.
• Mandatory criteria are used in straightforward bid evaluation
methods where they are rated as pass/fail, responsive/non-
responsive or comply/non-comply.
• These are usually used in evaluation for goods procurement, but
may also be used for the procurement of services and
infrastructure works. The mandatory criteria are the first criteria
against which bids are evaluated in order to eliminate bids that
do not conform to these requirements.
• Weighted criteria are criteria which can be measured in terms
of degree of responsiveness. The scale used to measure the
degree of responsiveness depends on the procurement method
and category of procurement. Usually this applies to the
evaluation of services.
• Weighted criteria with mandatory elements are criteria that
have mandatory minimum requirements defined and are
measured above that minimum requirement. E.g A requirement
may be set for a consultant to be fluent in at least two
international languages and a rated score may be assigned for
persons with additional international language capabilities, if
the additional language adds value to the requirement.
Stages of the Bid Evaluation Process
• Bid Evaluation constitutes a major stage in the
procurement cycle which relates to;
• examination, comparison, assessment, ranking, selecting
and recommending of bids

Bid evaluation ought to achieve;

• high quality services and goods
• economy and efficiency
• promote fairness and transparency
• Equal opportunity for all eligible providers

Bid Evaluation is elaborated in;

• Section 71 of the PPDA Act (2003)
• The Local Governments (PPDA) Regulations, 2006
• Bid evaluation process can take four basic stages ig (1)
preliminary examination for responsiveness to formal
qualification requirements, (2) evaluation for compliance
with technical requirements, (3) price/financial
evaluation and (4) post qualification/due diligence.
Preliminary Examinations for Responsiveness to Formal Qualification
Requirements:
• To determine eligibility and administrative compliance on
pass/fail basis. During preliminary examination, bids are
examined to ensure they are from eligible companies or
countries, that the bid is submitted with all requirements.
Eligibility requirements
• A copy of the bidder’s trading license or equivalent
• A copy of the bidder’s certificate of registration or equivalent
• A copy of the bidder’s income tax clearance certificate or
equivalent,
• Bid securities (when required) are valid,
• Tax and other legal and commercial requirements are met.
• A copy of the bidder’s VAT registration or its equivalent
• A Statement that the bidder does not have a conflict of interest in the
subject of the procurement.
• Any other relevant documents or statements which shall be stated in the
solicitation documents.
• Accordingly, the CC is supposed to verify the accuracy, validity and authenticity of
the above documents stated.
Administrative Compliance
This is measured against the basic instructions and
requirements in the solicitation document that may include;
• Submission of a bid security, if required in the correct
form and amount
• Submission of the correct number of copies of the bid
• Submission of the bid in the required format
• Signature and authorisation of bids in accordance with
instructions in the solicitation document
• Signature of curriculum vitae, if required
• Correct bid validity; and Submission of any additional
documentation or samples required
• All bids that pass this stage qualify for technical
evaluation while determined non-responsive at this
stage are not considered for the next stage
Administrative Compliance ……….. ………
• Evaluation for Compliance with Technical Requirements:
At this stage, the panel evaluates for compliance with
specified quality (specifications). They also look at issues
such as the bidder’s experience, delivery schedule,
compliance with quantity specified, works schedule, after
sale services, warranty and other requirements specified
in the bidding documents. These are, however, not fixed
but predetermined based on the particular case.
Administrative Compliance……………………..
Technical evaluation requires;

• Conducted for the commercial responsiveness of the bid

• To the terms and conditions.

• The technical responsiveness of bids to the statement of requirements

• The bids must pass a minimum score to proceed to the next stage

• Under Technical compliance evaluation is on a pass/fail basis

• No credit given for exceeding the specification

• Merit point system is applicable under procurement of services

• Bids declared Compliant or Non Compliant- depending on the methodology

• Non Compliant Bids are rejected.

• Bids that do not comply with the technical requirements are not considered
for price/financial evaluation. Before price evaluation, all bids that are not
responsive would be listed and clear reasons recorded for their not being eligible for
further evaluation.
Price/Financial Evaluation: Conducted to assess the financial
offers/proposal.
• At this stage, the panel examines the offered price for
computational/ arithmetical errors and corrected.
• Depending on the procurement type (goods, services or
work), takes into consideration factors such as provisional
sums and discounts, Unconditional discounts considered &
calculated where applicable etc.
• Life cycle costing elements may be considered for specific
requirements.
• Where bids are priced in more than one currency, all
currencies are converted to a single currency for evaluation
based on exchange rate from a specified source, as stated in
the bidding documents. The corrected/evaluated prices are
then compared and bids ranked in order beginning with the
lowest responsive evaluated bid. A price reasonableness
analysis is also done to ascertain that the price of the
recommended bidder is fair given the prevailing market
conditions.
• Bids ranked according to total price
• Costs compared and BEB determined
• Most organizations do not see price reasonableness analysis
as a mandatory evaluation requirement, but it is implied
that it should be done.
Determination of the BEB
The Bid which scores highest according to the evaluation
method used from among those which are eligible,
compliant and substantially responsive shall be the best
evaluated.

• Post Qualification/Due Diligence: This activity is a

verification exercise on the capability of the best
evaluated bidder.
• It applies to the lowest responsive evaluated bid. For
some organizations, where prequalification of bidders
was done, verification is done on the lowest responsive
evaluated bidder to ascertain that such bidder still
complies with the prequalification requirements.
• Done to determine whether the bidder whose bid
emerged as the Best Evaluated has the capability and
resources to effectively carry out the contract.
• Where prequalification was not done, post qualification is
done based on criteria specified in the bidding
documents.
• Where there is no prequalification, this simple check is
done based on qualification criteria defined in the
• Evaluation Methodologies
• Quality and Cost Based Selection (QCBS)
• Quality Based Selection (QBS)
• Fixed Budget Selection (FBS)
• Least Cost Selection (LCS)
• Technical Compliance Selection (TCS)
Quality and Cost Best Selection
• The Technical Evaluation criteria and maximum score is stated in the
Bid document.
• There is a minimum technical qualifying mark, below which a bid
shall be rejected
• The relative weights are allocated to the technical and financial
components
• Example Of Technical Criteria – Rating System Under(QCBS)
• Specific experience of consultants
• Adequacy of the proposed methodology
• Qualifications and competence of key personnel
• Transfer of knowledge
• Local participation

TCS
• Bid submission method should be one stage single envelop, unless
stated in the SBD
• Bids shall be subjected to the three stages of evaluation.
Preliminary, technical &
financial requirements shall be evaluated on pass/fail basis
• TCS recommends the lowest priced bid which is substantially
responsive to the commercial and technical requirements of the
PDE
Challenges in Evaluation
• Maintaining confidentiality by members of EC
• Issues of conflict of interest and favoritism
• Awarding of marks /scoring is very subjective
• How to handle influence peddlers and directives?
• Lack of knowledge on how to effectively apply the
relevant methodology
• Errors may occur during the computations
• Bidders may complain about the arithmetical errors
corrected during evaluation
• Using alternative evaluation criteria other than the
communicated
END OF LECTURE 7

THANKS FOR LISTENING ATTENTIVELY