WORKS PROCUREMTN

EVALUATION OF BIDS

By Frew Bekele

1
Contents
1. Introduction
2. Works Contracts
3. Bidding Documents
4. Evaluation And Qualification Criteria Framework
5. Evaluation Of Bids
6. Procurement Complaint

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 C. Contents of Each Section of BD

Section 2- BDS (PIT)

Supplements the ITB by specifying individual bidding
document;
All clauses refer to Section 1 and are prepared for each
specific contract;
The BDS will not be part of the resulting contract document;
Any change/qualification to be made to the standard ITB is
made here and it is wise to see it with care.
Any information in the BDS precedence over the one in ITB;

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A. Evaluation Procedure
i. Pre-Qualification

Submission of pre-qualification
document

Evaluation

Invitation for Bid

Bid Submission and Evaluation

Approval and award to the least

evaluated bidder
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A. Evaluation Procedure
ii. Modified Post-Qualification (two envelope)

Submission of P.Q. Application and

Financial Offer

Evaluation of P.Q. Application

Document

Opening & evaluation of Financial

offer of Post Qualified Bidders

Approval and award of the least

evaluated Bidder

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Evaluation Approval Procedure

Tender Analysis An Ad hoc committee

Committee (TAC) Comprise of three
professionals

Endorsement of
Standing committee
Evaluation by Contract
Award Committee

Approval of Evaluation
Report by the Director
General of ERA

No-objection from
financer incase of financed
projects

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Standard Bid Evaluation procedures and
principles

Bids are Evaluated based on the information/criteria

contained in the bidding document (BD);
Confidentiality of the process until the successful
bidder is notified;
Written clarification on ambiguities or inconsistency
may be requested;
No circumstances shall justify meetings or
conversation between the Employer and Bidders
during the bid evaluation process;
No changes in the bid price or substance are allowed

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 C. Sequences of bid evaluation

Bid opening
Preliminary examination
Determination of bid
responsiveness
Detail Evaluation

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 C. Sequences of bid evaluation
Bid opening

Opening shall be the same time with the deadline for receipt
of bids;
Date, time and place as announced in the BD;
Bids shall be opened in public;
Bidders names, offer amounts, Currency of bid, any
modification/alternative…are read aloud,
Bid security is checked & read;

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 C. Sequences of bid evaluation

Bid opening cont…

Any envelope containing Substitutions, Modifications, or
Withdrawals must be read out, recorded;
Bids received after the time stipulated will not be opened;
No bid should be rejected at the bid opening except those
received after the deadline;
All records of bid opening are reported as a minute of bid
opening.

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Bid Evaluation Committee
 A team of min. 3 experts (TAC) or a consultant
may carry out the tender evaluation;
 Qualified members preferably those who
participated in the preparation of BD;
 The competence and integrity of the members of
the TAC are crucial (specific knowledge)
 The members evaluate independently and discuss
on their findings

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 C. Sequences of bid evaluation

Preliminary examination
The purpose of preliminary examination is to eliminate any
bid from further and more complicated consideration if they
don't meet the minimum standard of acceptability – not
substantially responsive

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 C. Sequences of bid evaluation

Preliminary examination
Verification: Bids should be properly signed, sealed, valid,
Eligibility requirement;
Acceptable bid securities;
Bid should contain all required documents;
Changes should be initialed;
Bids should be complete;
The above are checks for substantial responsiveness. Bids
should not be rejected on trivial /minor deviations or
procedural ground.

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 C. Sequences of bid evaluation

Preliminary examination cont…

Examples of minor deviations

Failure to initial on few pages of supporting information;

Submitting less copies of BDs;
Not using the form supplied, but furnishing the required
information;
Missing of attaching existing documentations (without giving
any benefit to the bidder & without prejudice to the interest
of other bidders);
…etc

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 C. Sequences of bid evaluation
Preliminary examination cont…
Examples of Major deviations
Stipulating price adjustment in fixed price tenders
Proposing a different design or product that does not offer
equivalent performance/not meeting specifications
Programming of contract start-up, delivery, installation, or
construction that does not comply with required times
Subcontracting in a significantly different quantity or method
than that allowed
Declining to take vital responsibilities and liabilities, e.g.
performance guarantees and insurance coverage
Taking exception to critical provisions e.g. applicable law,
taxes and duties, and dispute resolution procedures; etc…

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 C. Sequences of bid evaluation

Determination of bid responsiveness

A substantially responsive Bid is one, which conforms to all the
terms, conditions, and specifications of the bidding
documents, without material deviation or reservation. A
material deviation or reservation is one ;

 (a) which affects in any substantial way the scope, quality, or

performance of the Works;
 (b) which limits in any substantial way, inconsistent with the
bidding documents, the Employer’s rights or the Bidder’s
obligations under the Contract; or
 (c) whose rectification would affect unfairly the competitive
position of other bidders presenting substantially responsive bids

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 C. Sequences of bid evaluation

Detailed Examination of Bids

 Correction for Errors;
 Corrections for Provisional Sums;
 Modifications and Discounts;
 Evaluation currency;
 Application of Domestic Preference;
 Alternative Bids
 Priced deviations;

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 C. Sequences of bid evaluation

Detailed Examination of Bids cont…

Correction of arithmetic error

Check for consistency of stated quantities and prices;
The quantities should be as stated in the BD;
Check for total bid price & for any discrepancy;
The bidder must accept such arithmetic corrections;

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 Corrections and
Unconditional Discounts
Bidder Read-out Bid Price(s) Corrections Corrected
Unconditional Corrected/Discou
Bid Price(s)
Discounts2 nted Bid Price(s)
Currency(ie Amount(s Computation Provision Percen Amount(s
s) ) al Errors1 al Sums t )
(a) (b) (c) (d) (e) (f) = (c) + (g) (h) (i) = (f) – (h)
(d) - (e)

etc.

Note: Only bids accepted for preliminary examination (Table 5, column g) should be included in this and
subsequent tables. Columns a, b, and c are from Table 4 (columns a, d, and e, respectively).
1
Corrections in column d may be positive or negative.
2
If the discount is offered as a percent, column h is normally the product of the amounts in columns f and
g. Refer to para. 6(c). If the discount is provided as an amount, it is entered directly in column h. A price
increase is a negative discount.
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 C. Sequences of bid evaluation

Detailed Examination of Bids cont…

Conversion to common currency

 Convert to Borrower country’s currency at the selling rate
(for comparison purpose only);
 Reference date for currency conversions & source to be
used are indicated in BDS.

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 Conversion to common
currency
Bidde Corrected/Discou Payment Composition1 Exchang Amounts Exchang Evaluation
r nted e in e Currency

Bid Price Currency Percent Amount Rate Currency Rate for Bid Total3
(in specified of of Total in Used by of Evaluatio Prices
currency) Payment Bid Evaluatio Bidder Payment
1
n2
n
Currency
(a) (b) (c) (d) (e) = (b) (f) (g) = (e) (h) (i) = (g) (j)
x (d) x (f) x (h)

etc.

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 Domestic Preference for
domestic bidders
allows a 7½ percent margin of preference for
domestic bidders.
Sub clause 32.3 states that a domestic bidder
is one that meets the following criteria:
 for an individual firm:
(i) is registered in the country of the Employer;
(ii) has more than 50 percent ownership by nationals of the country of the
Employer;
(iii) Does not subcontract more than 10 percent of the Contract Price,
excluding Provisional Sums, to foreign contractors.

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 Domestic Preference for
domestic bidders
for a joint venture (JV) of domestic firms:

(i) individual member firms shall satisfy Sub-Paragraphs 32.3 (a) (i) and
(a) (ii) above;

(ii) the JV shall be registered in the country of the Employer;

(iii) the JV shall not subcontract more than 10 percent of the Contract
Price, excluding Provisional Sums, to foreign firms.

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Domestic Preference for
domestic bidders

Total Evaluation
Corrected/ Domestic
Currency Preference (7½ Total
Bidder Discounted Bid Preference
(converted in to %) Comparison Price
Price Group
Single Currency)
(a) (b) (d) (e ) (f) (g) = (e) + (f)

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 C. Sequences of bid evaluation

Detailed Examination of Bids cont…

Application of qualification/evaluation criteria
Strictly apply only the evaluation and qualification criteria
specified in the BD;
In the case of Post qualification of bidders, the criteria for
post qualification should be clearly set out in the BD;
If the lowest evaluated bidder fails to meet minimum
qualification requirements, the bid is rejected and the next
lowest evaluated bidder is subject to post qualification. (in
case of one envelope system). Otherwise; will be rejected
before opening of the financial bid

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 C. Sequences of bid evaluation

Detailed Examination of Bids cont…

Comparison of bids
After all arithmetic corrections and conversion to common
currency is made, bids are compared:
 To determine the lowest evaluated bidder;
 With the engineer’s/Employer’s estimate;

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Preparation of evaluation
report
It Is Good Practice To have “Table of
Contents”
Bid Evaluation Summary Checklist
The Report should record all necessary
information including:
 Background of the project and financing;
 Bid opening events & minute;

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Preparation of evaluation
report
The report covers among other things
 Key dates and steps in the bidding process
 Bid prices, corrections, discounts & currency
conversion
 Deviations
 Domestic preference
 Qualification results
 Clarification process
 Name of bidders rejected & the reasons
 Proposed contract award

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D. Common mistakes during Bid
evaluation

Rejecting proposals/bid during opening (Conducting

evaluation during bid opening);
Using criteria which is not communicated to bidders in the
bidding document
Rejecting proposals/bid on trivial procedural ground
Arithmetic checking using bidders quantity
Currency conversion using inappropriate exchange rate
Discount application
Eligibility or Exclusion for domestic preferences

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 E. Common mistakes of bidders

Missed to enclose the bid submission forms

Lack to indicate the bid validity period
Using unapproved format for bid security
Missed to signed and stamp the document
Missed to attached appropriate power of attorney
Missed to attached the required attachments
Providing incomplete information
Using other standard bidding documents as well as clauses
than the specific project
Deviation from the scope, and
others

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8. Questions for discussions
1. A bidder has arrived a minute after
the deadline for submission. Will the
bid be accepted?
2. The bidders bid validity period has
been found 2 days short of the
specified 120 days. Is it minor or
major deviation?

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9. Questions for discussions
3. In ICB bid, A bidder has not submitted
Renewed license. Will it be reason for
rejection? Why?
4. After bids were submitted, A bid
opening was postponed due to
unavailability of majority of the tender
committee. Is there any problem with
this? why
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Questions for discussions
5. The bidder has forgotten to include his
renewed trade license in his bid:
1. Is it minor or major deviation?
2. The bidder was requested to submit the
missed document and submitted the
license which has been renewed after the
dead line for bid submission. Will you
reject the bidders bid?

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Questions for discussions
6. List some of examples of major
deviations in bids;
7. A bidder has written in his bid the
following: “We would like an increase
in the amount of mobilization
advance”. Can this be considered as
deviation?

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 Questions for discussions
8. A bid document was found that the bidding
form was not signed, but the bidder’s
stamp is there. Is it material deviation?
9. The client has varied the quantity of items
to be purchase by more than 15% during
award. What technical & procedural
problems does this involve?

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 10.Cases for discussions
Cases 1:
During the bid evaluation of an ICB major works contract ( in which
only 4 bidders were shortlisted through prequalification process and
only 2 submitted their bids), a major unbalanced rate to one work
item was discovered in the bid of the lowest bidder. The procuring
entity has requested the bidder for clarifications and breakdowns of
the very exaggerated rate. The bidder had submitted his breakdowns
and during reviewing the submitted breakdowns, the client learned
that the bidder has made mistakes in the unit of measurement of the
work item whose rate was exaggerated. Correcting the unit of
measurement from LM to CM , as it is in the BD, would reduce the
price offered by about USD 6 Million. The client has made no change
to the breakdown except the unit of measurement and considered this
as “correction of arithmetic errors discovered by the client during the
evaluation of the bids, in accordance with ITB clause 31”. And
recommended the award with the corrected Price.
 Is this arithmetic corrections?
 Is the process fair, transparent, and acceptable??

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 Cases 2
EXCEPTIONALLY LOW BID
The six low bids for a road civil works contract have produced the following results after
evaluation: €
Bid A (Foreign) 4,880,243
Bid B (Local) 6,547,576
Bid C (JV Foreign) 6,841,782
Bid D (Local) 7,449,621
Bid E (JV Foreign/Local) 7,810,934
Bid F (Foreign) 8,075,122
The Employer’s estimate was €6,650,000. All of the above firms were pre-qualified.

If the lending institution financing this project required the contract to be awarded to the
bidder who was the “lowest evaluated, and met the appropriate standards of capability and
financial responsibility” it would appear that Firm A should be awarded the contract.

Questions:
(a) On the basis of the information above, what possible objections would you raise to an
award to Firm A?
(b) If Firm A is awarded the contract, should the Performance Security be increased above
the stated 10%?

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 CASE NO. 3
QUALIFIED BID
The following conforming bids are received on a construction project:
A €m98 B €m100 C €m102

The bid validity period is 90 days.

B offers a price reduction of 5% (i.e. a bid of €95 million) if the bid evaluation can be completed
and the notification of award made within 60 days, because he is already mobilized on a
nearby site with construction nearing completion, and has his labor force waiting.

Question 1:
Can the Employer consider B’s alternative offer?

Question 2:
What if (A) had made a similar offer?

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 CASE NO 4: QUANTIFIABLE QUALIFICATION
Bids were received on a works contract in a remote area. The bidding documents stated: “There is a Class
3 public road providing access to the site.” [Road transport regulations in the country stated that Class 3
roads were designed to carry 10 ton axle loading.]
The low bidder, in the amount of €100M, qualified his bid as follows: “My bid is based on the assumption
that the State or Employer, in order to provide access to the site, will strengthen any weak bridges as
necessary to carry my heavy equipment, which has maximum axle loading of 10 tons.”

One other bidder made a similar qualification; the remaining six bidders had no comment on access.
A quantification of the qualification, i.e. for the Employer to arrange for repair of the bridges, amounts to €3
million, bringing the low bidder’s evaluated price to €103 million. The next low bidder (without qualification)
is €110 million.

Although originally designed for 10 ton axle loading, some bridges were now in poor condition. The timing
of the repair work might place the Employer at risk regarding claims from the Contractor for delay in
mobilization.

The Employer is faced with a number of alternatives:

1) ask the bidder to withdraw his qualification without any change in bid price;
2) reject the bid as non responsive (i.e. containing a material deviation) and award the contract to the
next low bidder at €110m;
3) accept the qualified bid in the amount of €100m (since it is the lowest evaluated at €103m), then
arrange for repair of the bridges himself, and risk claims from the Contractor subsequently for delay;
4) accept the qualified bid in the amount of €100m, then issue an extra works order after award of
contract for the contractor to do the work, or
5) somehow, without infringing the Rules, or the bidding conditions, or being unfair to other bidders, shift
the responsibility for bridge repair to the Bidder/Contractor before award of contract, albeit at
increased cost.

Question:
How would you proceed as Employer?

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 Exercise
Subsequent to ERA invitation to participate for ICB project of Azezo-Metema road
project three bidders have submitted their bid. During bid opening, it has been
noted that the JV of Bidder A-K has offered ETB 101 million while Bidder B offered
ETB 102 Million and Bidder C offered ETB 94.5 Million. The tender document of the
subject project specifies that domestic preference of 7.5% is applicable. There is no
arithmetic error and all bidders fulfill the qualification requirement. Detail of the
bidders is as shown below.

The JV of Bidder A-k is joint venture partner of local firm (wholly owned by locals
and the firm is registered in Ethiopia) and foreign Firm (wholly owned by foreigners
and the firm is registered outside Ethiopia) with 70 % local to 30 % foreign share, it
has quoted in one foreign and local currency and the quoted exchange rate is for 28
days prior to the bid submission.
Bidder B is a local firm wholly owned by locals, registered in Ethiopia and quoted in
ETB.
Bidder C is entirely owned by Chinese, it has quoted in two foreign and local
currencies and the quoted exchange rate is for 28 days prior to the bid submission.

You are required to identify the least evaluated bidder? Why? Give short report on
the analysis.

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6. Procurement complaint

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 A. Complaint Time

Complaints could be received at

different stages of the procurement
process:
 Bidding stage;
 Evaluation stage/before award;
 After Award of contract;

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 B. The right of complaint of a
candidate or a bidder

A candidate or a bidder aggrieved or is likely to be

aggrieved on account of a Public Body inviting a
bid not complying with the provisions of the
proclamation or the directive in conducting a bid
proceeding may present complaint to the head of the
Public Body or to the secretariat of the PPA Board to
have the bid proceeding reviewed or investigated.

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 C. Matters in respect of which
complaint may not be lodged
The selection of procurement method.
The selection of bidders for procurement to be made by
means of restricted tendering or request for quotation or on the
evaluation criteria set forth in the bidding document beforehand.
the preference given to Domestic firms
Decisions given to reject bids, bid documents or price
quotation pursuant to article 30 of the proclamation.
After 5 working days have elapsed from the date on which the
Public Body disclosed the result of a bid evaluation
No complaint presented to the board after 5 working days have
elapsed from the date on which the Public Body responded
to the complaint shall be accepted
no complaint shall be accepted after a contract was signed,
provided that such contract was signed after seven working
days from the result of the bid evaluation being disclosed

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D. Procedure for review of complaints

The Public Body conducting bid proceedings shall wait for

seven working days before contract signing or 5 days before
financial opening days after disclosing the result
A candidate or a bidder aggrieved in connection with a
procurement proceeding shall within 5 working days of when
he became aware of or should have been aware of the reason
giving rise to the grievance, may submit his complaint to
the head of the Public Body
Public Body shall give decision on the complaint in
writhing within ten working days from the date of
submission of the complaint
a procurement unit in a Public Body shall suspend a bid
proceeding if it ascertains that a complaint is presented

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D. Procedure for review of complaints
A bidder may submit a complaint to the board with in
five (5) working days of notification in writing of the decision
of the head of the Public Body on that complaint if the bidder is
not satisfied by the decision of the head of the Public Body or
where the head of the Public Body does not give decision on
such complaint within ten working days
The board shall give its decision in writing to the
complainant and the Public Body within fifteen (15)
working days of receipt of the Public Body’s statement of
response
The secretariat of the board shall send forthwith copies of the
decision of the board to the complainant and the Public Body
A candidate, bidder or supplier aggrieved by a decision of a
Public Body, the board or the Agency, may take the matter to
a competent court

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