Transparent Procurement

Procedures & Evaluation and

comparison of Bids for Works

By

Syed Adil Gilani

Vice Chairman & CEO
Transparency International Pakistan

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 Evaluation and Comparison of Bids for Goods and
Works
Invitation of Tenders .
For competitive bidding, whether open or limited, the bidding documents shall
include the following, namely:-
(a) invitation to bid;
(b) instructions to bidders;
(c) form of bid;
(d) form of contract;
(e) general or special conditions of contract;
(f) specifications and drawings or performance criteria (where applicable);
(g) list of goods or bill of quantities (where applicable);
(h) delivery time or completion schedule;
(i) qualification criteria (where applicable);
(j) bid evaluation criteria;
(k) format of all securities required (where applicable);
(l) details of standards (if any) that are to be used in assessing the quality of goods,
works or services specified; and
(m) any other detail not inconsistent with these rules that the procuring agency
may deem necessary.
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 Evaluation and Comparison of
Bids for Goods and Works
Invitation of Tenders.
Use Standard Form of Bidding Documents issued by Pakistan
Engineering Council in August 2002, with amendments prescribed
by NACS 2002 & Public Procurement Rules, 2004.

1. Standard Guidelines for Evaluation of Bids for Procurement of

Works. Annexure VII
2. Standard forms of Biding Documents (Civil Works) Annexure VII
- Part I. General Conditions of Contracts.
- Part II Condition of Particular Applications.
- FIDIC conditions for works of civil engineering
constructions
( continued)

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 Use Standard Form of Bidding Documents issued by Pakistan
Engineering Council in August 2002, & World Bank SBD’s with
amendments prescribed by NACS 2002 & Public Procurement
Rules, 2004
3. Standard forms of tender documents for procurement of
works (Electrical and Mechanical)- Annexure IX
4. Escalation and Construction Contracts.- Annexure X

5. Standard Bidding Documents Supply and Installation of

Information Systems (Single-Stage Bidding)- Annexure
XI
6 Standard Bidding Documents Supply and Installation of
Information Systems (Two-Stage Bidding)- Annexure
XII
5. Standard Bidding Documents – Procurement of Plant &
Equipment. (Goods)- Annexure XIII

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 Amendments to be made in these PEC & World Bank
Documents incorporating NACS 2002 & Public
Procurement Rules, 2004 as given below

1. Integrity Pact.
IP to be included as prescribed in by PPRA in 2002 for all
Procurements of over Rs 10 million value

2. Allocation of Sub Criteria and Financial Evaluation.

Sub-criteria and their weighting determine the outcome of
the evaluation, they should be chosen considering the aspects
that are critical to the success of the assignment. Evaluation
criteria and sub-criteria, associated points, and the rating system
form an arithmetic model to assess the technical merit of the
proposals. It must be part of Bidding Documents
Failure to provide for an unambiguous evaluation criteria in the bidding
documents shall amount to mis-procurement
( continued)

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 Amendments to be made in these PEC & World Bank
Documents incorporating NACS 2002 & Public
Procurement Rules, 2004 as given below

3. Check for balanced bid prices, to evaluate determination of

enhancement of performance security.

Bill of Quantity (BOQ) Format requires change, to include breakdown

against each BOQ item cost of material, equipment, labour & overhead
costs.

4. Amendments in the Tender Documents for Civil Works

a In Standard Form of Bidding Documents Civil Works also the

Arithmetic Check and Correction of error should be included at the
preliminary checking stage.

b The IT.26 and IT. 27 Examination of Tenders and Determination of

Responsiveness may therefore be substituted with IT 24.1 a & b, 24.2
and 24.3 of the Tender Documents for Electrical and Mechanical
Works.
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 Amendments to be made in these PEC & World Bank
Documents incorporating NACS 2002 & Public
Procurement Rules, 2004 as given below

4. c The IT.18 Format and Signing of Tender. Wording of 18.6 is

substituted with new wording. 18.6.

“The tender shall contain no alterations, omissions or additions,

except to comply with instructions issued by the Employer, or as
are necessary to correct errors made by the bidder, in which case
such corrections shall be initialed by the person or persons signing
the tender”.

“The Correction shall be made by striking a line over the wrong

amount, and writing the correct amount separately. The use of
White Fluid for correction of error is not allowed. The Correction
shall be made by striking a line over the wrong amount, and
writing the correct amount separately”
( continued)

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 Amendments to be made in these PEC & World Bank Documents
incorporating NACS 2002 & Public Procurement Rules, 2004 as
given below

5. Amendments in the Tender Documents for Electrical and Mechanical Works.

The PEC Standard Form of Tender Documents for Procurement of
Works ( Electrical & Mechanical) includes following clause.26.2 Evaluation
and Comparison of Tenders substituted with new wording. 18.6.

Commercial Evaluation

It will be examined in detail whether the tenders comply with the commercial/
contractual conditions of the Tender Documents. It is expected that no major
deviation/stipulation shall be taken by the bidders. However there is no
information on the procedure of commercial evaluation. The procedure for
commercial evaluation has to be defined in the Tender Documents for
transparent evaluation. For this purpose following Clause is to be included in
the Tender Documents for Electrical & Mechanical Works. This clause has
been borrowed from the “Standard Bidding Documents for the Supply and
Installation of Plant and Equipment” prepared by the World Bank, issued in
November 1997, Revised January 1999 and March 2002.
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 Evaluation

General

Regardless of how well the other steps in the

procurement process are conducted, if bids are
not evaluated correctly and fairly, the process
has failed. Unfortunately, bid evaluation is the
step that is most easily manipulated if one
wants to favor a particular bidder.

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 Evaluation
(h) “lowest evaluated bid” means,-
(i) a bid most closely conforming to evaluation criteria and other conditions
specified in the bidding document; and
(ii) having lowest evaluated cost;

The basic sequence for bid evaluation is the same for all goods and works,
and consists of the following steps

 Preliminary examination;
 Determination of bid responsiveness;
 Correction of arithmetic errors;
 Conversion to common currency;
 Quantification of omissions and deviations;
 Application of evaluation criteria;
 Comparison of bids; and
 Preparation of evaluation report.

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 Bid Evaluation Committee and its duties
In order to examine and evaluate bids, the Procuring Agency must appoint a
Bid Evaluation Committee comprising of minimum three odd number
members.

• The Bid Evaluation Committee is responsible for the evaluation and

comparison of the bids received and for the preparation of the Bid Evaluation
Report.
• No evaluation criteria shall be used for evaluation of bids that had not been
specified in the bidding documents.

• Preliminary Examination

• Correction of Arithmetic Errors

• Application of Evaluation Criteria

• Responsiveness Check

• Conversion to Common Currency

• Evaluation of Bids on the Basis of Price Only (continued)

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 Bid Evaluation Committee and its duties

• Price Adjustment

• Delivery Schedules

• Cost of Spare Parts

• Evaluation on the Basis of Life Cycle Cost

• Deviations from the Requirements of Bidding Documents

• Commercial Aspects

• Technical Aspects

• Quantification of Omissions and Deviations

• SAMPLE BID EVALUATION REPORT FOR SIMPLE EQUIPMENT

(continued)
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 Bid Evaluation Committee and its duties
List of Attachments to the Bid Evaluation Report

1. Copy of Bid Invitation

2. Pre-bid meeting minutes
3. Copy of bidding document and amendments, if any
4. Minutes of bid opening (process verbal)
5. Table of bid prices received- bidder, nationality, bid price as
read out, bid price in common currency
6. List of bids rejected during preliminary examination with brief
reasons
7. Evaluation and comparison table of substantially responsive bids
with all adjustments and preference margin, if applied
8. Contract information sheet of the selected bid.
9. Announcement of evaluation reports.- Procuring agencies shall
announce the results of bid evaluation in the form of a report
giving justification for acceptance or rejection of bids at least ten
days prior to the award of procurement contract. (continued)
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 A Bid is Not Responsive If;
1. It is received after the time and date fixed for its receipt,
2. Fails to Sign the Integrity Pact.
3. It is submitted through fax, telex, telegram or e-mail.
4. It is not accompanied with the specified Bid Security.
5. It is unsigned.
6. Its validity is less than specified.
7. It is submitted for incomplete Scope of Work.
8. It indicates completion date later than specified.
9. It indicates that prices quoted are not firm during currency of the contract

except those prices where escalation/adjustments are permitted in the

Conditions of Contracts.
10. It indicates that material to be supplied does not meet the eligibility
requirements.
11. It indicates that Bid Prices do not include the amount of taxes & duties.
12. If Bidder refuses to accept the arithmetic corrections.
13. It is materially and substantially different from the
Conditions/ Specifications of Bidding Documents.
10. It provides Sub-contracting, contrary to conditions specified in the
Bidding
11. Documents. It fails to comply Mile-Stones/critical dates specified
in Bidding Documents.
12.CEO
The bidder is not valid license holder of the PEC.
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 GENERAL PROVISIONS
– 2. Definitions.- (1) In these rules, unless there is anything
repugnant in the subject or context,-
– (a) “bid” means a tender, or an offer, in response to an
invitation, by a person, consultant, firm, company or an
organization expressing his or its willingness to undertake a
specified task at a price;
– (b) “bidder” means a person who submits a bid;
– (c) “competitive bidding” means a procedure leading to
the award of a contract whereby all the interested persons,
firms, companies or organizations may bid for the contract and
includes both national competitive bidding and international
competitive bidding;
d) “contractor” means a person, consultant, firm,
company or an organization who undertakes to supply goods,
services or works;

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 Evaluation and Comparison of Bids for Works

Evaluation of bids for works contracts is more complex than

the evaluation of bids for goods. To make the evaluation
process easier and transparent, it is essential for the Procuring
Agency set out in bidding documents, well defined evaluation
criteria and carry out the evaluation process in a transparent
manner. If the evaluation criteria is not well defined, Bidders
may be reluctant to submit bids. The evaluation of works
contracts involves price and nonprice factors, depending on
the form of works contract being procured. The selection of
bids in for a works contract involves two steps after the
preliminary examination to determine responsiveness. The
first being the selection to determine whether Bidders
demonstrate relevant experience in the undertaking the works
being procured and the second step is based on price.
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(continued)
 Evaluation and Comparison of Bids for Works

Evaluation of bids for works contracts is more complex than

the evaluation of bids for goods. To make the evaluation
process easier and transparent, it is essential for the Procuring
Agency set out in bidding documents, well defined evaluation
criteria and carry out the evaluation process in a transparent
manner. If the evaluation criteria is not well defined, Bidders
may be reluctant to submit bids. The evaluation of works
contracts involves price and nonprice factors, depending on
the form of works contract being procured. The selection of
bids in for a works contract involves two steps after the
preliminary examination to determine responsiveness. The
first being the selection to determine whether Bidders
demonstrate relevant experience in the undertaking the works
being procured and the second step is based on price.
CEO TI Pakistan (continued) 17
 Evaluation and Comparison of Bids for Works

Evaluation of Deviations in Bids for Works Contracts.

Bidders for works contracts often qualify or condition their

bids in some way, creating problems for Procuring Agency
staff who must decide whether a bid is substantially
responsive to the bidding documents and, if so, how
deviations from the bidding conditions should be handled in
the evaluation of bids. Clear unambiguous bidding documents
prepared by experienced staff of the Procuring Agency result
in fewer qualifications by bidders. Pre-bid conferences during
the bidding period should also be convened to clarify any
serious ambiguities and discrepancies in the documents.
(continued)

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 Evaluation and Comparison of Bids for Works

Evaluation of Deviations in Bids for Works Contracts.

Deviations may include exceptions, exclusions,

qualifications, conditions, stated assumptions, alternative
proposals (when not specifically solicited) and other changes
to the requirements of bidding documents. Their degree of
acceptability and impact on bid comparison will vary; some
may be clearly unacceptable; some that are acceptable may be
quantifiable in monetary terms; others may not be
quantifiable but may still affect the competitive position of
other bidders. (continued)

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 Evaluation of Deviations in Bids for Works Contracts.

The first stage in evaluation is to decide whether the deviations in a bid are so
material as to be unacceptable, and therefore are grounds for rejecting the bid.
Fairness to the other bidders is a prime consideration. A bidder’s deviation
which, in itself or by its withdrawal or rectification, would seriously affect the
competitive position of other bidders unless they were given the same
opportunity, would normally constitute grounds for rejection of the entire bid.
The following deviations (or some combination thereof) may result in
rejection of bids :
 bid submission by a legal entity or joint venture different from that which was
Prequalified (excepting when all members of the new joint venture were
Prequalified initially);
 the submission of a base bid subject to price adjustment when fixed price bids
were called for;
 the submission of a bid based on an entirely different alternative design where
such had not been requested nor expressly permitted;
 an inflexible time phasing of contract construction or performance not
conforming to prescribed critical key dates or “milestones” in a broader
construction program; and
 sub-contracting in a substantially different amount and manner than specified
 (continued)
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 Evaluation of Deviations in Bids for Works Contracts.

Deviations from the bidding requirements which do not appear at first sight so
serious as to provide immediate grounds for bid rejection maybe considered
further in the evaluation process. The following are examples of such
deviations.

 an amount of advance payment and other payment terms (including retention

money, guarantees, the details of price adjustment provision) differing from
the prescribed conditions;
 non-compliance with local regulations relating to labor, imports taxes, duties,
notarization, etc.;
 changes in specified methods of construction or execution (temporary works,
shift work by labor, etc.);
 subcontractors not meeting pre-specified requirements;
 omission (deliberate or unintentional) of minor works or items included in the
scope of work;
 non-acceptance of full liabilities (e.g. risks to third parties, nearby structures,
etc.);
 modification of, or a limit to the amount specified for liquidated damages; and
 proposed changes in standards or codes relating to materials, workmanship or
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design.
 Evaluation of Deviations in Bids for Works Contracts.

The details and implications of any deviations which are not explicit
should be clarified by the Engineer/Employer in discussion with
respective bidders without change in the substance or price of the bids.

Deviations or offers which are better than the requirements of the bid
specifications (e.g. higher quality materials and workmanship,
modified designs, shorter construction periods, etc.) should only be
regarded as benefits to the Employer and included in the evaluation if
specifically solicited in the bidding documents.

Deviations which are minor or non-quantifiable (e.g., changes in

subcontractors, access to site, land acquisition, sources of materials,
etc.) should be assessed in terms of their reasonableness for acceptance
or rejection taking into account fairness to other bidders and their
impact on the implementation of the contract.
(continued)

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 Evaluation of Deviations in Bids for Works Contracts.

The ranking order of bids should be determined using the

most probable monetary costs (or benefits) to the
Employer of all quantifiable deviations. The contract
should be proposed for award to the bidder submitting the
lowest ranked evaluated bid.

After selecting the lowest ranked evaluated bidder in the

manner described above, the Employer may accept the
qualified bid. Non-quantifiable deviations may be accepted
or rejected according to their reasonableness.

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 Rejection of All Bids
In some situations the Procuring Agency is permitted to reject all
bids submitted in response to an invitation for bids.
The Procuring Agency may reject all bids under the following
circumstances:
1. Where the price in the lowest evaluated bid exceeds the
Procuring Agency’s bid cost estimates by a substantial margin;
2. When all the bids received are not responsive to the
requirements in the bid documents; and
3. Where the Procuring Agency after receiving bids reasonably
concludes that there is lack of competition.

Where all the bids are rejected, the Procuring Agency should
review the bidding documents and make any appropriate
revisions. If substantial changes are made to the bidding
documents, the Procuring Agency should then invite new bids
CEOon the basis of the new bidding documents.
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 The Standard Bid Evaluation Report

After the completion of the evaluation process a bid evaluation report

shall be prepared setting out the process by which the Bid
Evaluation Committee evaluated the bids received in response to
the procurement process. A Standard Bid Evaluation Report
format prepared by the PEC is available for use by Procuring
Agency. This report covers among other things:

 key dates and steps in the bidding process;

 bid prices, corrections, discounts and currency conversions;
 additions, adjustments and price deviations;
 domestic preference if any;
 technical evaluations if any;
 post qualification results;
 names of bidders rejected and reasons for rejection of bids; and
 the proposed contract award.
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 ACCEPTANCE OF BIDS AND AWARD OF PROCUREMENT
CONTRACTS
• 38. Acceptance of bids.- The bidder with the lowest evaluated
bid, if not in conflict with any other law, rules, regulations or
policy of the Federal Government, shall be awarded the
procurement contract, within the original or extended period
of bid validity.
• 39. Performance guarantee.- Where needed and clearly
expressed in the bidding documents, the procuring agency
shall require the successful bidder to furnish a performance
guarantee which shall not exceed ten per cent of the contract
amount.
• 40. Limitation on negotiations.- Save as otherwise provided
there shall be no negotiations with the bidder having
submitted the lowest evaluated bid or with any other bidder:
• Provided that the extent of negotiation permissible shall
be subject to the regulations issued by the Authority.

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 TIME BASED PROCEDURE OF ROUTING THE CASES
Transparency International Pakistan
Prequalification and Tender
Documents to be ready in 45 days.
They should be ready by the time Administrative approval is received.

Timings for Tendering.

Prequalification in press Days.
Receipt of Prequalification 15 W Days
Prequalification Evaluation 7 Days

Invitation of Tenders 1 Day

Receipt of Tenders 15 W Days
Opening, Evaluation 7- 14Days
Public Declaration of ER 10 Days
Finalization of EV & 6 Days
Approval of ER by Tender Committee
Approval of Competent Authority 4 Days
Award of Contract 2 Days
Signing of Agreement 14-28 Days
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 MAINTENANCE OF RECORD AND FREEDOM OF
INFORMATION

• 46. Record of procurement proceedings.- (1) All procuring

agencies shall maintain a record of their respective procurement
proceedings along with all associated documentation for a
minimum period of five years.
• (2) Such maintenance of record shall be subject to the
regulations framed in this regard from time to time.
• 47. Public access and transparency.- As soon as a contract has
been awarded the procuring agency shall make all documents
related to the evaluation of the bid and award of contract public:
• Provided that where the disclosure of any information related
to the award of a contract is of proprietary nature or where the
procuring agency is convinced that such disclosure shall be
against the public interest, it can withhold only such information
from public disclosure subject to the prior approval of the
Authority.
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 REDRESSAL OF GRIEVANCES AND
SETTLEMENT OF DISPUTES

• 48. Redressal of grievances by the procuring agency.- (1) The

procuring agency shall constitute a committee comprising of odd
number of persons, with proper powers and authorizations, to address
the complaints of bidders that may occur prior to the entry into force of
the procurement contract.
• (2) Any bidder feeling aggrieved by any act of the procuring agency
after the submission of his bid may lodge a written complaint
concerning his grievances not later than fifteen days after the
announcement of the bid evaluation report under rule 35.
• (3) The committee shall investigate and decide upon the complaint
within fifteen days of the receipt of the complaint.
• (4) Mere fact of lodging of a complaint shall not warrant suspension of
the procurement process.
• (5) Any bidder not satisfied with the decision of the committee of the
procuring agency may lodge an appeal in the relevant court of
jurisdiction.
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 REDRESSAL OF GRIEVANCES AND
SETTLEMENT OF DISPUTES
• 49. Arbitration.- (1) After coming into force of the procurement
contracts, disputes between the parties to the contract shall be settled by
arbitration.
• (2) The procuring agencies shall provide for a method of arbitration in
the procurement contract, not inconsistent with the laws of Pakistan.
• 50. Mis-procurement.- Any unauthorized breach of these rules shall
amount to mis-procurement.
• 51. Overriding effect.- The provisions of these rules shall have effect
notwithstanding anything to the contrary contained in any other rules
concerning public procurements:
• Provided that the prevailing rules and procedures will remain
applicable only for the procurement of goods, services and works for
which notice for invitation of bids had been issued prior to the
commencement of these rules unless the procuring agency deems it
appropriate to re-issue the notice for the said procurement after
commencement of these rules.

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