Estimating and Costing in

Civil Engineering.
Module 1
“Detailed method of estimation”

COURSE INSTRUCTOR: ENGR. RAHAT ULLAH

(5TH SEMESTER, CE-2016)
Bidding and bid evaluation
WHAT IS A BID
 A bid is an offer to pay a particular amount of money for something
that is being sold in the form of goods or services.
 A tender is a request by, for example, a company or government
department(s) seeking supplier(s) of goods or services.
 The tender documentation will set out the requirements, timeline,
criteria, etc, and will often include a response template and a draft
agreement/contract.
 A bid is a potential supplier’s response to a tender.
 It must answer all questions asked in the tender documentation and
must include all information requested, including proposed costing,
if required.
Bid evaluation
 Bid evaluation is the process that takes place after the tender
submission deadline. It involves the opening and examining of the
bids to identify the preferred supplier(s) for the project.
 Negotiations may then be entered into with one or more suppliers,
and the successful supplier is awarded the contract.
 pre-qualification process may be carried out before bids are invited
to reduce the number of potential tenders to those that are
genuinely appropriate for the project, i-e potential bidders.
 bid evaluation will be carried out in accordance with evaluation
criteria or a selection methodology specified in the invitation to
tender.
…continued
 An initial review of the offers received is generally undertaken to
determine their responsiveness and conformity to the conditions in
the invitation to tender documents.
 A more detailed evaluation of compliant bids may then be
undertaken against a number of pass/fail criteria.
 A technical determination should be made to ascertain whether
the bidder’s technical solution is feasible, appropriate and
deliverable within certain requirements, i.e. safety and costs etc.
 There are a number of bases upon which a preferred bidder can be
identified:
 Lowest price.
 Most economically advantageous tender (MEAT).
 Mean value.
 Exclusion of the extremes.
…continued
 Lowest priced tender may not result in the best value tender being
selected as there is a tendency under such systems for tenderers to
submit low prices and then to find ways to charge more once the
contract has been secured.
 Assessments that identify the tender that best meets the client’s
needs and offers the best value for money can be more beneficial
in the long run.
 This is sometimes referred to as the ‘most economically
advantageous tender’ (MEAT) approach as opposed to the lowest-
price approach.
…continued
Typically, assessments might consider some of the following criteria:
 Price.
 Relevant experience.
 Understanding of the requirements.
 Past performance.
 Technical skills.
 Resource availability.
 Management skills and systems.
 Proposed methodology (this might include mobilization plans,
design proposals, and non-compliant proposals if these have been
allowed).
 Compliance with the requirements set out in the invitation to tender.
…continued
 The criteria are then weighted to reflect how important they are to
the client. It is normal to give price a weighting of at least 60%, with
the remaining percentage allocated to the other criteria, giving a
total of 100%.
 It is good practice to make the criteria and weightings known to
tenderers in the invitation to tender.
 Two-stage tendering is used to allow early appointment of a
contractor, prior to the completion of all the information required to
enable them to offer a fixed price.
 In the first stage, a limited appointment is agreed allowing the
contractor to begin work and in the second stage a fixed price is
negotiated for the contract.
 It can be used to appoint the main contractor early or as a
mechanism for early appointment of a specialist contractor such as
a cladding contractor.
The tendering process
 Step 1 : NIT – Notice Inviting Tender (Advertisement, Post , Email.. )
 Step 2 : EOI- Expression of Interest by respective Bidders
 Step 3 : Tender document Floating/ Selling
 Step 4 : Pre Bid Meeting
 Step 5 : Bid Submission- In Single Phase or Two Phases
 Step 6 : Bid Opening – In Single Phase or Two Phases
 Step 7 : Bid Evaluation
 Step 8 : Post Bid Meeting
 Step 9 : Report Formation
 Step 10 : Award of Contract
Notice inviting tender
Contents of NIT (Notice Inviting Tender)
• Brief Project Particulars
• Brief Requirement of Tender
• Eligibility Criteria – Technical & Financial
• Duration & Place of sale of tender document
• Price of tender document
• Contact Information
• Probable amount of Contract (Primarily in Govt. Tenders)
• Earnest Money amount
• Work completion period
• Bid submission period
Advertising the NIT
 Depending on the the need of the Route of tendering, the NIT
needs
 to be advertised or circulated through & to :
• All Embassies ( ICB/ LICB route to be followed)
• Major newspapers (ICB/ LICB/ NCB route to be followed)
• Web portals (ICB/ LICB/ NCB route to be followed)
 The NIT may be brief from publishing point of view as an
advertisement.
 The detailed NIT in this case is given upon receiving EOI (Expression
of Interest) from the prospective Bidder
EOI - Expression of interest

 Interested Bidders shall show their Interest in executing the

 Tender/ submitting the Bid and ask for the Complete Tender
documents
 Followed by purchase of the tender documents
The Pre Bid Meeting
 Subsequent to the purchase of Tender Document, the prospective
 Bidders, Employer and Consultants meet for discussions with following
 objectives :
 • Provide clarification to the Bidders- Technical or Commercial
 • Communicate any additional information in Project
 • Do necessary revision in the tender documents as per industry
 feedback
 • Ensure minimum deviations
 • Critical points to explained and discussed
 The Minutes of Pre Bid Meeting are recorded and it may be followed by
an
 Amendment or Addendum to the Tender documents
Tendering type based on mode of
submission
 Manual tendering- Paper type submission
 E Tendering- E-submission (E Bidding)
Contents of bidding Document
1. Instructions to Bidders.
2. Bidding Data.
3. General Conditions of Contract, Part-I (GCC).
4. Particular Conditions of Contract, Part-II (PCC).
5. Specifications - Special Provisions.
6. Specifications - Technical Provisions.
7. Form of Bid & Appendices to Bid.
8. Sample Bill of Quantities.
9. Form of Bid Security.
10. Form of Agreement.
11. Form of Performance Security/Bond & Mobilization Advance
Guarantee/Bond.
12. Drawings.
The Bid Submission/ Tender
Submission
 Subsequent to the Pre Bid Meeting, the Bids are prepared and
submitted in
 the prescribed time and form, duly sealed.
 The Bid submission could be of following forms
 Two Stage Bidding : First Techno commercial part & then Price part
 Single stage Bidding : Comprehensive Bid is submitted
The Bid Opening / Tender Opening
 Tender Board ( consisting of representative of Employer -Chairman/
 Board Member/ CEO/ CE; Consultant, Financial Institute) meets on
the
 nominated day and time to open these Sealed bids ( Generally few
 hours after last time of Bid submission date). Late Bids are not
 supposed to be entertained. Usually Following steps are followed:
 Step 1 : Introduction of the Participants and announcement of the
 Bidders. Followed by Attendance marking.
 Step 2 : Declaration of Sufficiency of the Bid Bond
 Step 3 : Declaration of Guaranteed Technical Particulars
 Step 4 : Declaration of the Bid Price if it’s a Single Stage Bid
Elements of Bid Evaluation
 The most important elements that figure in the bid evaluation process
are essential part of the ITB. These elements have to be considered and
accorded appropriate weightage to determine the LOWEST
EVALUATED RESPONSIVE BIDDER (LERB) for award of contract.
These elements generally include:-
 Deadline for submission (date, time and place), handling of bids
received after deadline.
 Eligibility of Bidders in the light of the PEC Bye-Laws, i.e, holding a current
valid license to practice as constructor.
 Qualification of the Bidder i.e,
 Review of updated information on the sub-elements for prequalification to
establish continued status as at the time of pre-qualification, or
 Assessment of qualification of the Bidder from data provided for post-
qualification.
…continued
 Completeness of bid i.e, provision of all the essential information in
response to bidding documents/any Addendum, if issued.
 Clear information about Foreign Exchange Currency(FEC)
requirements, if needed.
 Validity of the bid viz-a-viz the requirements of the bid documents in
terms of time.
 Provision of Bid Security requirements in the specified format from an
acceptable source and in the requisite amount fixed in the ITB/Bid
Data Sheet.
 The acceptability of bid in terms of its validity due to its signing by the
duly authorized representative and inclusion of Letter of Authority.
 Conformance of bid to technical and commercial requirements of the
bid documents.
 Precise, clear and unambiguous provisions for handling variations from
the above requirements.
ESSENTIAL STEPS / STAGES OF
EVALUATION
 three important stages of bid evaluation are listed as follows:-
i) Preliminary Examination to include:-
1. Does the bidder hold a valid license from the PEC and fall within the
category allowed to participate for the size of the project?
2. Has the bid been properly signed by the authorized person(s) and the
authorization is available/bonafide?
3. Is the bid accompanied by the rquired securities i.e. the amount is
adequate as by an acceptable source?
4. Does the bid generally and substantially meet the requirements of the
bid documents?
5. Does the bid have adequate provision for clarifications, if required for
substantiation of any elements desired by the Employer?
…continued
ii. Check for arithmetic errors and acceptance of corrections by the
bidders.
iii. Evaluation/Comparison of bids
1. Determination of the evaluated bid price for each bid by making any
adjustments, as required which may include:-
2. Application of unconditional discounts/conditional discounts.
3. Making correction of errors.
4. Excluding Provisional Sums & Contingencies.
5. Determination/making adjustments for minor (acceptable) deviations
on technical/commercial grounds.
6. Making adjustments for varying time for completion offered by the
bidders, if acceptable.
7. Consideration of the effect of any loading of bid
Award Process
 • Based on Evaluation report & recommendation of Assessment Panel a “ Best
Fit Bidder” or successful is declared.
 • A Letter of Award is Issued to the Successful Bidder.
 • The Bidder is asked to submit a Contract Performance Guarantee which could
be in form of a Bank Guarantee, Demand Draft, Cash or a Fixed Deposit Receipt
 • A contract between Bidder & Employer is drafted as per International
Contract Laws.
 • Contractual Obligations & Rights are being drafted / incorporated in the
contract
 • Technical Obligations are clearly stated
 • Quality Obligations are clearly stated
 • Completion Schedule is clearly stated
 • Payment schedules are clearly stated
 • The contract is signed and moved for implementation
Contract document’s Broad
features
 Work of tender/contract is mentioned
 Date of signing is mentioned
 Parties are mentioned
 Scope of the contractor is mentioned
 Contract price is mentioned
 Documents of reference and their order of precedence is mentioned
 Time schedule is mentioned
 Payment terms is mentioned
 Other conditions of contract- technical & commercial are referred.
 Duly signed/stamped by the authorized representatives in presence of
witness
THANK YOU