Professional Documents
Culture Documents
ECM 621 :
Construction Project Engineering and Administration
3
Single Stage – Single Envelop Bidding
• In the Single Stage bidding procedure, the Bidders
submit bids in one envelope containing both the
financial proposal and the technical proposal, which
are opened in public at the date and time advised in
the bidding documents.
• The bids are evaluated and, (following approval by
the Donor Agency, if required) the contract is
awarded to the lowest evaluated substantially
responsive Bidder
4
Two-Envelope, Single Stage Bidding
(Not Applicable in PPA)
• Bidders submit simultaneously two sealed envelopes, one containing
the technical proposal and the other the financial proposal.
• Initially, only the technical proposals are opened.
• The financial proposals remain sealed
• The technical proposals are evaluated by the Executing Agency.
• No amendments or changes to the technical proposals are permitted.
• The objective of the exercise is to allow the Executing Agency to
evaluate the technical proposals without reference to price.
• Bids of Bidders who do not confirm to the specified requirements may
be rejected as deficient bids
• Following approval of the technical evaluation the financial proposals
are opened in public.
• The financial proposals of the technically responsive Bidders are
evaluated and the award of contract is made to the lowest evaluated
substantially responsive Bidder. 5
Two-Envelope, Two Stage Bidding
• Bidders submit simultaneously two sealed envelopes- technical
proposal and financial proposal.
• Initially, only the technical proposals are opened
• The financial proposals remain sealed and are held in custody by the
Executing Agency.
• The technical proposals are evaluated and, if the Executing Agency
requires amendments or changes to the technical proposals, such
amendments and changes are discussed with the Bidders.
• Following discussion of the amendments and changes to the technical
proposals, the Bidders are invited to submit supplementary financial
proposals based on the revised technical proposals.
• The supplementary financial proposals should only contain the changes
in price resulting from the changes in the technical proposals.
• Supplementary financial proposals which contain changes other than
those discussed during technical evaluation will result in rejection of
the bids.
6
Two-Envelope, Two Stage Bidding
• The objective of the exercise is to ensure that all technical proposals
conform to the same acceptable technical standard and meet the
technical requirements of the Executing Agency.
• Bids of Bidders who are unable or not prepared to amend their technical
bids so as to conform to the technical standard required by the
Executing Agency may be rejected as deficient bids.
• After the evaluation of technical proposals, the second stage is to invite
Bidders to the opening of the financial proposals.
• The original financial proposals and the supplementary financial
proposals are opened in public at a date and time advised by the
Executing Agency.
• The financial proposals and the supplementary financial proposals are
evaluated and the award of contract is made to the lowest evaluated
substantially responsive Bidder.
7
Two Stage Bidding
• Bidders first submit technical proposals in accordance with the
specifications, but without prices.
• The technical proposals are opened and evaluated by the
Executing Agency and discussed with the Bidders.
• Any deficiencies, extraneous provisions and unsatisfactory
technical features are pointed out to the Bidders whose comments
are carefully evaluated.
• The Bidders are allowed to revise or adjust their technical
proposals to meet the requirements of the Executing Agency.
• The objective of the exercise is to ensure that all technical
proposals conform to the same acceptable technical standard and
meet the technical requirements of the Executing Agency.
• Bids of Bidders who are unable or not prepared to amend their
technical bids so as to conform to the technical standard required
by the Executing Agency may be rejected as deficient bids. 8
Two Stage Bidding
• After the evaluation of technical proposals has been approved, the
second stage is to invite Bidders to submit revised technical
proposals and to submit financial proposals based on the revised
and agreed-upon technical proposals.
• The financial proposals and revised technical proposals are
opened in public at a date and time advised by the Executing
Agency.
• In setting the date, the Executing Agency should allow sufficient
time for Bidders to prepare financial proposals and incorporate
the changes required in the technical proposals.
• The financial proposals and revised technical proposals are
evaluated and the award of contract is made to the lowest
evaluated substantially responsive Bidder.
9
Bidding Procedures Under Competitive Bidding
• The Single Stage bidding procedure is the main bidding procedure used
by GoN and by the Donor Agencies.
• The Two Envelope (Single Stage) bidding procedure allows bids to be
evaluated on purely technical and commercial grounds without
reference to price and is commonly used in civil works contracts in
projects funded by the Asian Development Bank.
• The Two Envelope (Two Stage) bidding procedure should be used for
procurement where alternative technical proposals are possible such as
for certain types of machinery or equipment or manufacturing plant.
• The Two Stage bidding procedure may be adopted in large and complex
contracts where technically unequal proposals are likely to be
encountered or where the Executing Agency is aware of its options in
the market, but for a given set of performance requirements there are
two or more equally acceptable technical solutions available to the
Executing Agency.
10
Submission/Receiving/ Opening the Bids
11
Bid Submission
• Bidders submitting bids by mail or by hand shall enclose the
original and each copy of the Bid, including alternative bids, if
permitted in accordance with ITB 13, in separate sealed envelopes,
duly marking the envelopes as “ORIGINAL”, “ALTERNATIVE” and
“COPY.” These envelopes containing the original and the copies shall
then be enclosed in one single envelope. The rest of the procedure
shall be in accordance with ITB sub-Clauses 22.2 and 22.3.(ITB 21,
Procurement of Works, Small Contracts, User’s Guide, ADB)
•ITB 20-24 of PPMO SBD 2014
Clause 59 PPR
• Opening in the Presence of Bidders
• Separate Late, Withdrawal, Modified and Normal Bids
• Late Bids to be Returned Unopened
• Firstly Open Withdrawal Envelope, Then Modified and then
Normal Bids
• Prepare Minutes of Bid Opening
• No Decision as to the Acceptance or Rejection of Any Bid
Shall be Taken or Announced in the Bid Opening Session.
Bid Evaluation
Purpose of Bid Evaluation
• The main purpose of bid evaluation is to determine the
lowest evaluated substantially responsive bid among
the bids submitted before the bid closing time on the
date specified in the bidding documents.
• The lowest evaluated substantially responsive bid may
or may not necessarily be the lowest priced bid.
• In order to determine accurately the lowest evaluated
substantially responsive bid in accordance with the
terms and conditions of the bidding documents, a
logical systematic evaluation procedure designed to
cover all aspects of the evaluation process should be
followed.
Principles In Bid Evaluation
• a) Confidentiality of Procedures
– After the public opening of bids, no information relating to the
examination, clarification and evaluation of bids, and
recommendations concerning awards, shall be communicated to any
person not officially concerned with these procedures until the
announcement of the award of the contract to the successful Bidder
has been made.
• b) Clarifications and Alterations of Bids
– No Bidder will be permitted to alter its bid after the bids have been
opened. Only clarifications, which do not change the substance or
price of the bid, may be requested or accepted by the Executing
Agency. Any response to an inquiry of the Executing Agency which
leads to a change in the bid price shall be considered as an alteration
and shall not be considered in the bid evaluation. The records of all
clarifications sought and received must be kept by the Executing
Agency. 19
Principles In Bid Evaluation
• c) Rejection of Bids
– All valid bids received shall be evaluated in accordance with the
terms and conditions of the bidding documents and only those bids
which do not substantially meet the specifications or the bidding
requirements may be rejected.
• d) Extension of Bid Validity Period
– The validity of bids may only be extended in exceptional
circumstances.
– If an extension of bid validity is considered necessary, all those who
submitted bids shall be asked to extend the validity of their bids.
– The bid securities of Bidders who do not extend the validity of their
bids shall be returned to them promptly.
20
Principles In Bid Evaluation
• e) Rejection of All Bids
• The rejection of all bids is justified when the bids submitted are not
substantially responsive or where none of the bids received meets the
specifications or where there is evidence of lack of competition.
• The rejection of all bids and call for new bids solely for reason of high
price is not justified and is generally not accepted by Donor Agencies.
• Where all bid prices have substantially exceeded the cost estimate, the
Executing Agency may, instead of calling for new bids, negotiate with
the lowest evaluated Bidder for a reduction of the bid price only. But
No provision of Negotiation in PPA/PPR in Work Contract
• If no satisfactory contract can be concluded, rebidding should be
initiated with appropriate modification of the scope of the contract.
21
Bid Evaluation Committee
PPA Clause 71
Public Entity to constitute an Evaluation Committee
for examination and evaluation of Pre-qualifications,
Tenders, Consulting Service Expression of Interest
and Proposals and Sealed Quotations
Bid Evaluation Committee
• Financial Capability
• Specific Experience
–At Least 2 Works of Similar Nature and Complexity
• Equipment Requirement
Currency Conversion
As of Pre-informed Date
Unbalanced Bids
Higher Unit Prices for Earlier Works - Front
Loading
Higher Unit Rates for Underestimated Work Items
Bid Evaluation …contd
Technical Aspect
• Scope of Supply of Goods or Works
• Major Technical Specifications for All Key
Items Being Procured
• Duration of warranty period
• If Any Difference in Bid Requirement and
Proposed Bid
Bid Evaluation (clause 63 PPR)
Commercial Aspect
• Delivery/Completion Period; Payment
Terms; Liquidated Damages; Bonus
• Guarantee Obligations; Liability of Bidder
• Any new condition inserted by the bidder
• If Any Difference in Bid Requirement and
Proposed Bid
Bid Evaluation (clause 64 PPR)
Financial Aspect
• Inland Transport Cost; Technical Features
• No Cost Benefit Shall be Afforded for Exceeding
the Minimum, Whenever Only a Minimum Rating
or Capacity or Output etc., is Specified in the
Bidding Documents
• Domestic Preference
• Suppliers' Recommended Spare Parts Should Not
be Considered in Bid Evaluation
Bid Evaluation (clause 65 PPR)
Detailed Evaluation
• Consistency of Work Plans and Schedules with the
Requirements in the Bidding Documents
• Reasonableness and Reliability of Unit Rates
Quoted for BOQ Items
• Identification of Unbalanced Bids (High Rates for
Earlier Work and Underestimated Items)
• In Such Case Request Clarification, If Satisfactory
Award With Additional Security
Bid Evaluation???
(clause 26 PPR)
• Sub Contractor’s Experience – Approved?
• Annual Turnover (Best 3 Years) out of 10
Year, For NCB only?
• Liquid Asset/Line of Credit – Conditional?
• Turnover of Domestic Bidders to be Inflated
by NRB Index (Amount Excluding VAT)
Important Points
• No Preference for Any Bidder or Class of Bidders, Either for
Price or for the Other Terms and Conditions.
• All bids received should be opened and read out at the time of bid
opening which should be immediately after the deadline for
submission of bids. No bid should be rejected at bid opening
except for late bids, which shall be returned unopened to the
Bidder. Minutes of bid opening must be prepared.
• The Secretary of the Bid Evaluation Committee shall take
minutes of meetings of the Bid Evaluation Committee and
maintain a file of all matters considered by the Bid Evaluation
Committee
• Bid Evaluation Committee will formulate the procedure itself
• Bid Evaluation Committee will submit the Evaluation Report to
the Public Entity Chief
Contract Award
• Award Contract Within Bid Validity Period to the
Substantially Responsive Lowest Evaluated Bidder
– Letter of Intent to Successful Bidder, cl. 27.2 PPA
– Time for Complaint (7 days), cl 27.3, 47 PPA
– Letter of Acceptance
– Performance Security in Standard Format (Counter
Guaranteed, if from Foreign Bank) (Amount to be Increased
if Unbalanced Bid)
– Contract Agreement
– Notification to Unsuccessful Bidder
Methods of Procurement
42
Types of Contract
(Clause 22, Appendix 4 of the Regulation)
• Unit Rate Contract
• Lump-sum Contract
• Cost Reimbursable Contract
• Time and Material Rate Contract
• Design and Build Contract
• Management Contract
• Performance Based Maintenance Management
Contract
• Piecework Contract
43
Unit Rate Contract
44
Lump Sum Contract
45
Cost Reimbursement Contract
47
Design and Build Contract
48
Management Contract
49
Performance Based Maintenance
Management Contract
50
Piecework Contract
51
PPMO- Roles and Responsibilities
Office Establishment:
• Established as per the provision made in the new Public
Procurement law of Nepal.
• The Public Procurement Act, 2063 (B.S.) and Public
Procurement Regulation, 2064 (B.S.) have been
enforced on 2063/09/30 (B.S.) and 2064/5/03 (B.S.)
respectively.
• PPMO was established as the government agency on
2064/5/3 (B.S.) and is placed directly under the prime
minister.
• This organization has 51 staffs including the secretary as
head of this institution.
52
PPMO- Roles and Responsibilities
Vision:
• To ensure good governance in procurement system of
the Public Entity that is transparent efficient and free of
corruption using information and communications
technology also as a tool for implementation through
proper coordination within all Public Entitys improved
relations between the Government and its suppliers
contractors consultants and service providers and build
an atmosphere of trust and confidence between the
Government and the general public.
53
PPMO- Roles and Responsibilities
Mission:
• 1. To be the guiding body responsible for procurement
policy formulation and the implementation and
monitoring of effective public procurement system
• 2. Establish and maintain transparency, accountability,
effectiveness, efficiency and economy along-with non-
discrimination and equality in public procurement
proceedings of Nepal.
• 3. Achieve maximum benefits from the public
expenditure through economy and rational judgment.
54
PPMO- Roles and Responsibilities
• Functions:
• 1. Prepare public procurement policy and recommend measures of
implementation to the government for improvement and proper
functioning of the public procurement system.
• 2. Monitor the public procurement law implementation through visit and
documentation procedure.
• 3. Develop the indicators for the continuous monitoring of the public
procurement proceedings.
• 4.Advise on public procurement matters for public procurement
proceedings
• 5.Establish and maintain websites dedicated to public procurement
management
• 6.Develop and Issue the SBDs for Civil Works, Goods and Consultancy.
• 7.Issue manuals, directives, instructions and technical notes for
facilitating the procurement proceeding
55
PPMO- Roles and Responsibilities
• 8. Coordination in public procurement at all levels including conduction
of debarment proceedings,
• 9. Develop human resource and professionalism development plan for
public procurement, including by arranging training programs for public
officials and bidders concerning public procurement, and qualification
and certification, and career development schemes for public officials
involved in procurement,
• 10.Solicit the views of the business community as well as stake holders
thoughts on the effectiveness of the procurement system on a regular
basis through consultative bodies;
• 11. Planning and coordinate foreign technical assistance in the field of
public procurement,
• 12. Function as a secretariat of the Procurement Review Committee
(PRC), and
• 13.Present an annual report to GoN reporting on the overall functioning
of public procurement system.
56
Nepal Procurement Act, 2063 and
Nepal Procurement Regulation 2064
THANK YOU
57