BID PROCESS MANAGEMENT SYSTEM

PRESENTED BY:

BISWA PRAKASH NAYKTWEET @SMYLINGASSASIN

LINKEDIN @ LINK

Agenda 1. Fundamental of Bidding

2. Bidding Process

3. Evaluation criteria

4. Bid Evaluation

Methodology

5. e-Auction process

6. Reverse auction

7. Swiss challenge method

8. EMD/Bank Guarantee

9. Other general terms &

conditions

10. Govt. Procurement

process

11. PSU Procurement

process

12. Procurement process of

funding agency

13. Vendor Registration

process

14.

Fundamental of Bidding

A Bid Management System, either manual or electronic, is required to ensure an effective and efficient process for:a) the buyer wishing to source products or services and b) the seller wishing to bid to supply products or services.

Govt. Procurement Process

Covers the procurement of GOODS,WORKS AND SERVICES by all Government Ministries, Departments, Agencies, Statutory Corporations and Public sector undertakings in the Center and the States, Municipal Corporations and other Local bodies and even by private sector undertakings providing public service on monopoly basis.

Objective of Govt. Procurement Process

TO PROCURE WORK, MATERIAL, SERVICES OF THE SPECIFIED QUALITY WITHIN THE SPECIFIED TIME AT THE MOST COMPETITIVE PRICES IN A FAIR, JUST & TRANSPARENT MANNER----

Stages in Govt. Procurement Process

1. PRE-TENDER STAGE

2. TENDER STAGE

3. EXECUTION STAGE

Stages in Govt. Procurement Process

1. PRE-TENDER STAGE

i. Project Formulationii. Appointment of Consultants iii. Preparation of Detailed Project Report (Estimate, Design, etc.)

Stages in Govt. Procurement Process

2. TENDER STAGE

i. Preparation of Tender Documents

ii. Inviting & Opening of Tenders iii. Prequalification iv. Tender Evaluation &Award of

Work

Stages in Govt. Procurement Process

3.EXECUTION STAGEi. Agreement/Purchase Orderii. Contract Performance

(A) Advance Payments (B) Implementation Of Contract

Provisions(C ) Time And Cost Overrun(D) Payments

(E) Quality Of Work/Inspection

Vendor Selection Process Selection and registration of firms/suppliers

and their evaluation must be clear and transparent.

PQ evaluation criteria must be incorporated in the bid documents in clear and unambiguous terms

Prepare the PQ criteria specific to the requirement of the work.

Evaluate the bids exactly as per the notified criteria.

Vendor Selection Process Prequalification necessary to bring competent

contractors into competition with technical & financial capability required for the particular procurement. To be done on the basis of : Experience and past performance on

similar contracts Capabilities with respect to personnel,

equipment and manufacturing facilities Financial standing through latest Annual

report (balance sheet and P & L account) of last three years.

Bidding Process

• Single bid or two bid (for IT and communications systems, turn key projects)

• Two bid system: techno-commercial and price bids are called separately.

• The techno-commercial bid contains all terms and conditions including commercial terms except price.

Bidding Process

• Technical bids will be evaluated by Tender Evaluation Committee

• Price bids of only technically acceptable offers are to be opened to ensure an objective evaluation of tenders.

• In case of two-stage two bid system, price/commercial bids are called from only technically acceptable vendors after technical evaluation.

Bid Evaluation Methodology There are two process used for awarding

various e-governance contracts (both Consulting and Software Implementation). QCBS (Quality cum Cost Basis) method

gives weightage to both quality and cost. The weights are usually more for technical (or quality) and less for commercial (or cost) aspects of the bid (usually 60:40 or 70:30 or sometimes even 80:20).

L1 gives the weightage to Commercial aspect of the bid only where Bidder who quotes lowest wins the bid.

Earnest Money Deposit

To safeguard the interest of Dept. (withdrawal / alter the bid by bidder)

Exemption – Regd. With Central Purchase Organization / National Small Industries Corporation

EMD - 2 % to 5% of estimated value Can be DD/Banker Cheque /BG Unsuccessful bidders EMD should be

returned /refunded at the earliest.

Performance Security

From the successful bidders Amount – 5% to 10% DD Should be valid for 60 days beyond

the date of completion of all the contractual obligations of the supplier including warranty

Bid Security should be refunded on receipt of Performance Security

e-Auction

e-Auction is introduced to negotiate terms of contract between suppliers and buyers mainly in the industrial sector.

The electronic auction (e-Auction) is an e-business between auctioneers and bidders, which takes place on an electronic marketplace.

It is an electronic commerce which occurs business to business (B2B), business to consumer (B2C), or consumer-to-consumer (C2C)

Reverse Auction The two major types of the electronic

auction are forward auction in which several buyers bid for one seller's goods and reverse auction in which several sellers bid for one buyer's order.

Reverse auctions are the other major form of auctions. In a reverse auction, a single buyer makes potential sellers aware of their intent to buy a specified good or service

During the course of the actual reverse auction event, the sellers bid against one another to secure the buyer’s business, driving the price to be paid for the item downward. Thus, the winning bidder is the seller who offers the lowest price.

Reverse Auction Reverse auctions are most typically

used for procurement by private companies, public sector agencies, and non-profit organizations.

Swiss Challenge Method Swiss Challenge System is a new bidding

process to help private sector initiative in core sector projects. It's an offer made by the original proponent to the government ensuring his process to be best (in terms of effectiveness including both the factors cost and time) by his initiative as a result of his own innovative approach or on the demand of the government to perform certain task.

The Swiss challenge system, like the bonus system, further allows third parties to make better offers (challenges) for a project during a designated period with simple objective to discourage frivolous project, or to avoid exaggerated project development costs. Then accordingly, the original proponent gets the right to counter-match any superior offers given by the third party.

Working of Swiss Challenge Method

The system basically works on two different patterns, its up to the Government to decide as to which one they want to adopt. The two main ways are as follows: The Government can either purchase the

intellectual property rights for a project concept from the proponent or then award the project through a competitive bidding process in which no bidder has a predefined advantage.

The Government can offer the original proponent an advantage in a competitive bidding process. In this case the government should create rewards that satisfy the original proponent while still allowing a truly competitive process.

General Evaluation Criteria Satisfaction of Conditions specific to the

contract Sample Testing Capacity Evaluation. Turnover Statutory documentation Arrival at Outcome Price of the bid Determination of L-1, L-2, L-3…… Determining Reasonableness of the L-1 Rates Recommendation for Negotiation (if require)

General Evaluation Criteria

Financial and Technical sanction of competent authority is available.

Adequate and wide publicity is given. Advertisement is posted on website and tender documents are available for downloading.

Convenient tender receiving/opening time and address of the tender receiving officials/tender box are properly notified.

In the case of limited tender, panel is prepared in a transparent manner clearly publishing the eligibility criteria. The panel is updated regularly.

Pre-qualification criteria are properly defined/ notified.

General Evaluation Criteria

Short listed firms/consultants are fulfilling the eligibility criteria. There is no deviation from notified criteria during evaluation.

Experience certificates submitted have been duly verified.

Tenders/bids are opened in the presence of bidders/their authorised representative.

Corrections/omissions/additions etc., in price bid are properly numbered and attested and accounted page –wise. Tender summary note/ Tender opening register is scrupulously maintained.

Conditions having financial implications are not altered after opening of the price bids.