General Guide To Tendering &

THE BASICS OF Bidding Processes

TENDERING & BIDDING By: Moatasem Mabrouk

2015
1
CONTENT

Introduction
Terms & Definitions
Tender Process Map
Bidding Process Map
Proposal Evaluation

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INTRODUCTION

Procurement is the acquisition of goods, services or works from an external source. It is favorable that the goods,
services or works are appropriate and that they are procured at the best possible cost to meet the needs of the
acquirer in terms of quality and quantity, time, and location. Corporations and public bodies often define processes
intended to promote fair and open competition for their business while minimizing exposure to fraud and
collusion.
Procurement vs. acquisition: procurement is the act of buying goods and services for an organization. And,
acquisition is the conceptualization, initiation, design, development, test, contracting, production, deployment,
Logistics Support (LS), modification, supplies, or services (including construction) to satisfy organization needs.
Acquisition is therefore a much wider concept than procurement, covering the whole life cycle of acquired
systems. Multiple acquisition models exist, one of which is provided in the following section.
Following slide shall describe some procurement methods

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INTRODUCTION

Open Tendering: Open tendering is shorthand for Two Stage Tendering: a two stage process which is
competitive bidding. It allows companies to bid on suitable for large scale projects in which the supplier
goods in an open competition or open solicitation gets involved in the design phase, method statement
manner. and pricing. This phase enable the client to evaluate
more and select best bidder out of the 1 st stage who will
Restricted Tendering: Unlike open tendering, restricted award the contract of this phase.
tendering only places a limit on the amount of request
for tenders that can be sent by a supplier or service Request for Quotations: This procurement method is
provider. used for small-valued goods or services. Request for
quotation is by far the least complex procurement
Request for Proposals (RFP): Request for Proposal is a method available.
term that is used all across the business world. Client
receives RFP’s from potential clients all the time when a Single-Source: is a non-competitive method that should
client is seeking a new suppliers. only be used under specific circumstances. Single source
procurement occurs when the procuring entity intends
to acquire goods or services from a sole provider

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INTRODUCTION

Some Benefits of Tendering & Bidding Process:- Applications:-

 Enhance Competition between suppliers, Organizations tends to call for tender due to different
 Cost optimization and value of sale enhancement, reasons that might be vary from entity to another,
below are sample of reasons for using bidding &
 Transparency of acquisition process, tendering process:-
 Open vacancies for new market competitors and  Legal & Legislation requirements,
entrepreneurs,
 New product/service acquisition,
 Minimize potentials for conflict of interest,
 Large scale acquisition [exceed the limits defined in
 Give more space for negotiation, the organization’s policies],
 Assure subjectivity and accuracy of acquisition.  Special requirement acquisition,
 Cost optimization and value of sale enhancement

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TERMS & DEFINITIONS

Tender – The term “tender” is often used interchangeably to the term bid. However, “Bid” is increasingly being used by the bidder
(the supply side) and the term “tender” used on the procurement side (the buyer).
Bid – an approach to a client in order to gain significant new or repeat business..
Proposal – The proposal is a written offer from a seller to a prospective buyer. It is a critical step in the complex sales process
Business profile, or corporate credentials – A business profile or corporate credentials is a promotional or marketing tool that
presents a snapshot of your company. It essentially serves as a resume for your business.
Capability statement – Similar to above but is usually tailored to the audience or the contract requirements, and describes the
business’ capabilities and experience, including who you are, what you do, and how you are different from your competitors.

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TERMS & DEFINITIONS

ASL – Approved Supplier List RFD – request for documentation

EOI – expression of interest: a business expression indicating an RFI – request for information: is a standard business process
intent to bid whose purpose is to collect written information about the
IFB – Invitation for bids: is an invitation to contractors or capabilities of various suppliers. Normally it follows a format
equipment suppliers, through a bidding process, to submit a that can be used for comparative purposes.
proposal on a specific project to be realized or product or service RFO – request for offers
to be furnished RFP – request for proposal
ITT – Invitation to tender: is a special procedure for generating RFQ – request for quotation or request for qualifications
competing offers from different bidders looking to obtain an
award of business activity in works, supply, or service contracts. RFN – request for negotiation
PQQ – pre-qualification questionnaire: a series of questions for RFS – request for services
potential tenderers to answer regarding their level of
experience, capacity and financial standing.
ITV – Invitation to vendors
RFA – request for applications

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TENDER PROCESS

Pre-Tender Tender Evaluation

• Tender Opening
• CFT / CFB
• Tender
• EOI • Tender Evaluation
• Tender • Tender
• Tender
Documents Addendums Interviews
• Close Tender
• Tender
Recommendati
on

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BIDDING PROCESS

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EVALUATION OF BIDS

Opening of Bids Examination of Bids

Requests for
Clarification

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Evaluation &
EVALUATION OF BIDS

Opening of Bids Bids which are the subject of a withdrawal notice must
The opening of bids should take place immediately after not be opened and must be returned unopened to the
the deadline for submission in the presence of bidders’ respective bidders.
representatives who wish to attend. All bids and modifications received prior to the deadline
Bids, modifications and withdrawals received after the must be opened next.
deadline must not be opened. No bid shall be rejected or an opinion/judgment voiced
The outer envelope of these late bids and modifications as to its responsiveness at the bid opening, except for
should be opened first and the names of the bidders late bids.
submitting late bids or modifications read out and Immediately after the opening of bids, all bids which
recorded. The inner envelopes of all late submissions were opened must be stored safely and confidentially
must be returned unopened to the respective bidders. and be made available only to those directly involved in
Withdrawal notices received prior to the deadline should the evaluation process.
be opened next and read out and recorded.

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EVALUATION OF BIDS

Preliminary Examination of Bids The evaluation committee must decide which

deviations (including omissions and variations) or
Each bid will be examined to determine if it: reservations identified at this point are material and
 is properly signed and accompanied by a power of attorney; therefore the relevant bids should be declared as not
substantially responsive. If a bid is not substantially
 is accompanied by the required bid security;
responsive, it should be rejected and cannot be made
 is complete and generally in order (if not, any omission must responsive by correction or withdrawal of the
be noted); nonconforming deviation or reservation.
 is substantially responsive to the bidding documents (if not,
At the end of this stage, the committee should be
any deviations, omissions or variations must be noted);
agreed on:
 is free of computational errors (any such errors must be
 those bids which are substantially nonresponsive and should
noted); and
not be considered further; and
 requires any clarifications (any such clarification must be
 any clarification which should be requested from bidders.
noted).
The outcome of the examination should be
summarized

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EVALUATION OF BIDS

Requests for Clarification:

All requests for clarification must be made in writing, and the response must also be given in writing.
A log of all requests for clarification and responses must be kept.
Requests for clarification can be sought at any time, up to the contract award decision.

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EVALUATION OF BIDS

Evaluation and Comparison of Bids The detailed evaluation of a bid involves first checking
Bids which have not been declared substantially that the technical characteristics, functional
nonresponsive will then have to be evaluated in depth. performance and commercial conditions of the bid are in
Before a bid can be evaluated the following must be accordance with the bid requirements.
done: The next step is to apply the evaluation criteria specified
 computational errors must be corrected in accordance with in the bidding documents and adjust each bid as
the relevant provision in the instructions to bidders; appropriate using the evaluation criteria. Only the
 bid prices must be converted to a common currency in criteria specified in the bid document can be applied. No
accordance with the relevant provision in the instructions to new criteria must be introduced at evaluation,
bidders; and the specified criteria must be applied wherever
 adjustments should be made for any obvious omissions, appropriate. Specified criteria cannot be waived during
deviations or variations which are not considered to be evaluation.
material and which can be quantified;
.
 the adjusted bid price resulting from the above would
constitute the basis for the subsequent evaluation and
comparison of bids.

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EVALUATION OF BIDS

Evaluation and Comparison of Bids The adjusted bid price of each bidder will require
Where there are a large number of bids to be evaluated adjustment in accordance with the evaluation criteria in
(over six) and the spread of bid prices is relatively wide, the bidding documents, in the manner and details
it is not necessary, in the first instance, to evaluate all specified therein, to arrive at the evaluated bid price.
bids in detail. One can usually determine, from the The evaluated bid prices are compared and ranked in
specified evaluation criteria, the range of bid prices ascending order to determine the bidder with the lowest
relative to the lowest bid price which stand a reliable evaluated price.
chance of being the lowest evaluated bid. In such cases
it is recommended that, in the first instance, only those
bids within this range should be subjected to a detailed
evaluation. If the lowest priced bid is rejected during
evaluation, the range must be predetermined, and all
bids in the revised range must be subject to a detailed
evaluation.

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EVALUATION OF BIDS

Post-qualification A positive determination is a prerequisite for the award

A successful bidder must be qualified to satisfactorily of the contract to the bidder.
perform the contract. A negative determination must result in rejection of the
Therefore, it must be determined whether the bidder bid; in which event, the committee must proceed to the
offering the lowest evaluated bid is so qualified. next lowest evaluated bid to make a similar
determination of the bidder’s capabilities to perform the
If bidders were prequalified prior to bidding, then a contract satisfactorily
simple check should be made to determine that the
lowest evaluated bidder still satisfies the qualifying
requirements specified for prequalification.
If no prequalification was done, then it must be
determined that the lowest evaluated bidder has the
relevant previous experience, and financial, technical
and production capability and capacity to perform the
contract. This must be based on the qualifying criteria
specified in the bidding documents.

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EVALUATION OF BIDS

Award Recommendation

The successful bidder whose bid has been determined to be substantially responsive and has been determined to
be the lowest evaluated bidder and who has been determined to be qualified to perform the contract satisfactorily,
must be recommended for award of the contract.

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EVALUATION OF BIDS

Bid Evaluation Report  comparison of bids

A bid evaluation report with the award recommendation  lowest evaluated responsive bid
must be prepared.  post-qualification
The bid evaluation report should reflect the logical  award recommendation
sequence of the bid evaluation process in the following
manner: The bid evaluation should be prepared in the format
outlined in the Model Bid
 receipt and opening of bids
Evaluation Report in the manner and detail outlined
 examination of bids therein, including all forms and annexes.
 substantially nonresponsive bids
 correction of arithmetic errors
 currency conversion
 adjustment for nonmaterial deviations
 bids subject to detailed evaluation
 evaluation of bids

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EVALUATION OF BIDS

Notification of Award
When the award recommendation has been approved, a notification of award (letter of acceptance) should be sent
out immediately to the successful bidder.
Negotiations must not be held with the successful bidder with the intention of getting a reduction in price or a
change in the scope of the contract.
Negotiations are only allowed under exceptional circumstances and with the Bank’s prior concurrence.

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THANK YOU …
References

"Definition of bidding in English". Oxford. Retrieved 29 March 2014.

"Bidding at Auctions". Auction Bidding. Retrieved 31 March 2015.

"Bidding Terminology". Auctions UK. Gauk Auctions. Retrieved 31 March 2015.

Evaluation of tenders and preferred bidder selection

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