Evaluation of bids, Financial Management

Evaluation of  bids and determination of the lowest  evaluated responsive and qualified bidder

You learnt how to receive and open bids in the previous sub section. Here you will learn the criteria that you should consider while evaluating the bids.

After opening the sealed bids as per procedure outlined above, you have to evaluate the bids as per procedure given in the Instructions to Bidder (ITB) of the bid document.

You may do the evaluation yourselves or take the assistance of a Technical Evaluation Committee (TEC) as per requirements of the procuring organisation.

You    should    carry   out    initial    examination    to    determine    substantial responsiveness by taking the factors such as:

  • Whether the bidder meets the eligibility criteria laid down by you in the bid document.
  • Check whether the critical documents such as Bid Form, Price Schedule and so on have been duly signed by the bidder.
  • Whether the requisite bid security of stipulated amount, form and validity has been furnished.
  • Whether the bid security, if furnished in the form of bank guarantee, is conditional or otherwise.
  • Check whether the bid is valid for the required period.
  • Check whether the bidder (if he is not a manufacturer) has furnished the Manufacturer's Authorisation in the stipulated form.
  • Check whether the bidder has any reservations to crucial clauses of conditions of contract such as warranty, security deposit, force majeure, AMC, and so on.
  • Check whether the bid is substantially responsive to the specifications required.

After the initial examination and preparation of a list of responsive bidders, you should take up detailed evaluation of these bids. The evaluation is done as per the evaluation criteria stipulated in the bid document.

The bid costs are worked out by following the steps:

  • The bid price should be corrected for any arithmetical errors.
  • In case of discrepancy between the prices quoted in words and figures, the prices in words must be considered.
  • If there is discrepancy in the computed total amount for an item, the quoted rate should be considered and the total amount must be corrected.
  • The bid price should be adjusted for deviations in the commercial conditions such as delivery schedule, minor variations in payment terms and other variations as stipulated in the bid document. These variations are quantifiable but deemed to be non-material in the context of the particular bid - to the extent stipulated in the bid documents.
  • Compute the present value of the future Average Manufacturing Cost (AMC) payments at the specified discount rate and add to the cost of the equipment if stipulated in the bid document.
  • Include all central duties such as custom duty, central excise duty, local taxes, VAT, or ST as per stipulations in the bid document.
  • In case of purchase of equipment, the operation and maintenance cost, cost of spares for appropriate period, after sales service facilities and other factors and method of quantification as specified in the bid document should be evaluated and added to the equipment cost.
  • The cost of incidental services such as installation of equipment, training of personnel, providing operation manuals, and so on should be verified.

After arriving at the evaluated costs of each of the responsive bidder, we should select the bid with the lowest evaluated cost.

You should then check whether the lowest evaluated responsive bidder, as selected above, meets the specified minimum qualification criteria. If the criteria meet, then you can award the contract. If not, check for the second lowest evaluated bidder and see if he meets the specified minimum qualification criteria. If the criteria meet, then you can award the contract to the second lowest evaluated bidder.

An evaluation report must be prepared with detailing the entire process of evaluation and selection of the lowest evaluated responsive bidder, which has met the specified minimum qualification criteria.

Posted Date: 9/28/2012 3:20:39 AM | Location : United States

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