Request For Quotation (RFQ)

September 2021

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Outline:

1. Introduction
2. Appropriateness of RFQ
3. Threshold and Quotations
4. Form of request
5. Opening, Evaluation/Comparisons
and award
6. Purpose of Using the Proper
Formats
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 Introductory Messages to Procurement staff

1. Before initiating any procurement task, get to know the

terms of the agreement( Agreed project documents); - The
rules of the Game;
2. Make sure you have the approved PP before initiating the
procurement process;
3. Don’t make procurement decisions arbitrarily/don’t guess,
but consult;
4. Use the revised and appropriate RFQ Format
5. Use good practices;
6. Procurement Records are essential; proper record keeping
is a must;

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 1. Introduction
• Simple and rapid procurement method
• One of the least competitive procurement methods
• May be abused unless it is carried out
– in compliance with the legal agreements, and
– observing a minimum of formality in the process,
and
– with appropriate record keeping for verification and
audit.
• The Bank has discovered cases of abuse that have
concluded in declaration of mis-procurement.

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 2. Appropriateness of RFQ
• To procure small amounts of off-the-shelf goods or
standard specification commodities for which more
competitive methods are not justified on the basis of
cost or efficiency.
• In emergency projects or for urgent relief-type
operations including re-establishment of vital services
like utilities, communications, shelter, and vital supplies
which stem from disasters or conflict.
• Because of the risk of abuse in procurement under
shopping, the use of this method is restricted to cases
when the justification for it is beyond contention.
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 RFQ Key characteristics

Characteristics
Some or all of the following characteristics apply:
Examples
 low to medium value (Bank Guidance thresholds)  furniture
 requirements are simple and easy to specify, or off-the-shelf  laptops, computers
standard product or service  catering services
 there is a ready market with many suppliers  office maintenance
 transport services
 procurement decision is based on technically conforming lowest
 Small industrial
quotation materials
 Hand tools
 Small works contract
SLIDE 6
 Appropriate….
• Executing Agencies (EAs) may not use RFQ/shopping
only as an expedient to by-pass more competitive
methods or fraction of large procurements into smaller
ones solely to allow the use of shopping.
• When the nature of the specifications is complex or the
type of procurement requires an elaborate, detailed
evaluation system that needs substantial
documentation, a formal bidding process instead of
shopping is used. Shopping is not appropriate in these
cases, because it is a method that should not require
complex documentation or all the formalities of a
bidding process.
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 3. Thresholds and Quotation
• Threshold for shopping is less than $100,000****
• Compare at least three quotations to establish
reasonableness of price
• Comparison of two quotations is justified only when there is
evidence satisfactory to the Bank that there are only two
reliable sources of supply (national or foreign as the case
may be)
• To minimize the risk of getting only one or two quotations,
EAs are advised to initially request more than three
quotations.
• EAs may also at the time of the request, verify whether those
being invited will make an offer or not. 8
 4. Form of Requests
• The EA exercises due diligence to satisfy itself that the firms
invited to quote are reputable, well established, and are
suppliers of the goods or services being purchased as part of
their normal business.
• Mandatory to use the RFQ form Prepared for the Project
• In case the EAs receives unsolicited quotations, these may be
accepted after carrying out a similar due diligence exercise to
verify the nature and reputation of the firms.
• The EA requests quotations by letter, fax, telex, electronic
messaging, etc., (with proof of receipt and record keeping).
• Local advertisement to get quotations from the local
suppliers/labour contracts is also acceptable as far as the
requirement of minimum three quotations are compared 9
 Form of Requests …
• The request includes:
 the description of items, total quantity, unit of measurement,
etc. of the goods/works/NCs,
 Validity period of the quotation
 Quotation submission, closing and opening date, place and
time.
 Required information/documentation to award the contract.
 Specification/BoQ and Drawing
 Suppliers qualification
 delivery time and place, completion of works
 Evaluation and contract award process & criteria (item by item
or lot basis)
 Quotation with or w/out TAX, Any qualification criteria,
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 etc.
 Form of Requests …

• Suppliers submit their quotations in writing

• Bid or performance securities are not recommended.
• In case, if the EAs has not received at least three
quotations within the time set, it verifies with the
missing suppliers whether they intend to do so and how
soon. Unless there is extreme urgency, the client may
give a reasonable amount of additional time, say three
more days, to get additional quotations.

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 CLARITY OF RFQ
• RFQ documents should clearly and precisely indicate ;
– The work to be carried out / the goods to be supplied,
– Minimum performance/conformance requirement
– the place of delivery / installation /the location of work
– the schedule for delivery / completion, performance
– warranty / maintenance requirements, any pertinent terms
and conditions.
• specify any criteria and the relevant requirement - in addition to
price - that will be taken into consideration in the evaluation
process.
• Qualification Criteria: technical, Financial, Past Similar
experience, Staffing, Equipment, etc.
• All bidders shall be provided the same information, and assured
of equal opportunities to obtain additional information on a
timely basis.
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 STANDARDS & BRAND NAMES
• Standards and technical specifications quoted in the
RFQ shall promote the broadest possible competition.
• As far as possible indicate internationally accepted
standards such as those issued by the international
standards organisation/national standards.
• In indicating specifications, reference to brand names,
catalogue numbers or similar classifications shall be
avoided.
• If it is necessary to quote a brand name to clarify an
otherwise unclear specification, the words “or
equivalent” shall be added.

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 5. Bid Opening, Evaluation/Comparison of Bids

Bid opening
• Opening shall be on the same date of bid submission;
• Date, time and place as announced in the RFQ;
• Quotations shall be opened in public;
• Bidders names, offered amounts, Currency of bid, any discount are read aloud,
• Any envelope containing Substitutions, Modifications, or Withdrawals must be read
out and recorded;
• the reading should be from the original version of each bid;
• Quotations 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.
• Use the form in the Opening Minute to record readout price
 Eligibility

• Government Owned Enterprises (SoEs) should

satisfy the eligibility requirements
• Potential conflict of interest should also be
checked
• Temporary suspended or debarred bidders
• Bidders engaged in F&C
 Procedural Completeness

The following questions should be addressed:

• Has the bid signed? If a power of Attorney was stipulated has it been furnished?
• Changes should be initialed
• Have the administrative documents been submitted?
• Has the bid security been furnished in the required form and amount?
• Has the bidder quoted a price for all items included in a lot or package if the RFQ so
stipulated?
• Is the bid accompanied by documents establishing eligibility and conformity with
BDs ?
Judgment should be used in applying these tests and required to ensure fairness in the
process and avoid to eliminate a bid which otherwise would be quite competitive.
 Substantial Responsiveness

• BDs outline several procedures, conditions and requirements,

some of which are vital and some of which are not.
• Evaluation of commercial features, performance, efficiency,
productivity and technical features shall follow as per the
requirement in the RFQ.
• Bids with minor or non-substantial deviations in respect of
terms or conditions, or the technical specifications, should
not be eliminated
• A bid not substantially responsive, with material deviations to
the terms and conditions and specifications of the RFQ should
not be considered further
• In applying this test judgment is needed
 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/shelf documentations
(without giving any benefit to the bidder & without
prejudice to the interest of other bidders);
 Correction of arithmetic Errors

• Check for consistency of stated quantities and prices;

• The quantities should be as stated in the RFQ;
• Check for total bid price & for any discrepancy;
• If the quantity and the total price are given the arithmetic should
be checked and if there is a discrepancy the unit price shall govern
• The bidder must accept such arithmetic corrections; and
• After all arithmetic corrections, bids are compared to determine
the lowest evaluated bidder.
 Evaluation Points

• Compliance with technical specifications, relevant international

standards and technical norms.
• Compatibility with existing equipment and standardisation plans.
• Compliance with required delivery schedules.
• Examination / comparison of samples.
• Payment terms.
• Guarantees, availability of spare parts, after-sales services and
training (if applicable).
• Life-cycle aspects covering maintenance and operating costs.
• Capability, capacity, financial standing, past experience and
performance of the vendor and its local representative

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 Principles of evaluation
• Confidentiality of the process until the successful bidder is
notified;
• Written clarification on ambiguities or inconsistency may be
requested;
• No meetings or conversation between the Procuring Entities and
bidders during the bid evaluation process;
• No changes in the bid price or substance are allowed
 Most Advantageous Bid (MAB)

• The Implementing Agencies award the contract to the bidder

offering MAB in accordance the selection method.
• MAB is the bid that meets the qualification criteria and whose
bid has been determined to be:
– Substantially responsive to the RFBs documents and
– The lowest evaluated cost
 Comparison of Quotations
• Quotations are compared after adding the quoted price, cost of inland
transportation and insurance, if any, to the final destination.
• Comparison will be made on the corrected total price obtained by multiplying
unit price and total quantity.
• Evaluation the offer against the specification
• lowest evaluated priced offer is selected.
• May need to check the qualification and capability of the supplier*
• The Evaluation committee’s MoM and approval should contain all information
required for review.
• The Executing Agencies documents the award decision and its rationale and
keeps it for review and audit, as needed.
• The record contains also the RFQ issued, evidence for invitation issued to
suppliers, quotations received, comparison Table and MoM with award decision,
Purchase order/contract, inspection report, final acceptance, payment, etc. and
documents clearly that the award is based on sound economic criteria.
• See RFQ formats ***** 23
 6. Purpose of Using the Proper Formats

• What is the Purpose of using the

proper Formats?
– Provide same information to bidders;
– Standardize/Simplify the drafting of a specific RFQ;
– Minimize preparation time for Procurement Experts;
– Reduce Bidder’s time and effort in the preparation of Bids;
– Reduces chance of missing necessary information/ inclusion
of unnecessary information;
– Provides the basis, facilitates and simplify the evaluation
and the comparison of of bids;

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Thank you

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