1

Bid evaluation - Works Clarification of bids (if necessary)

Determination of responsiveness “Substantial” responsiveness No material deviations

Correction of errors Figures / words Unit rate / total Misplacement of decimal point

2

Bid evaluation – Works (cont.)

Conversion to single currency Options

Any specified datenot earlier than 4 weeksprior to bid closingnot later than original datefor expiry of bid validity

Date to be clearly specifiedin bid documents

3

Evaluation and comparison of bids Compare bids in single currency,

after excluding provisional sums,contingency

Add monetary cost ofquantifiable variations* with implications

Add value of benefits foregonefor longer times of completion*

* Only where applicable

Bid evaluation – Works (cont.)

4

Adjust for“acceptable” quantifiablevariations

Preference fordomestic bidders**

7 - 1/2% on the adjusted bid price ** for eligible countries only

Bid evaluation – Works (cont.)

5

Correction for errorI TEM DESCRI PTION UNIT Q.TY UNIT RATE AMOUNT

2.06

EXAMPLE A

Excavate, transport, compact, …

cu.m

100,000

4.00

40,000

2.06

EXAMPLE B

Excavate, transport, compact, …

cu.m

100,000

400

400,000

NOTE: Engineer’s estimate included a unit rate of 3.80 x cu.m for item 2.06. The unit rates of other bidders ranged from 3.50 to 4.20 x cu.m

6

Comparison of bid conversion to common currency

Object To determine lowest evaluated bid

on date specified

Bid price Convert into amounts

payable in each currency Pre-stated common currency Either borrower’s or

any currency such as USD or €

7

Comparison of bid conversion to common currency (cont.)

Exchange rates at date specified Into local currency

Official source such as central or local commercial bank

Into foreign common Selling rates as

published inspecified

international pressfor foreign component

Selling rates of central / local commercial bank for local component

8

Preference fordomestic contractors Borrower may grant margin of

preference for comparison of bids

With prior agreement of bank Include in loan / credit agreement For ICB only

9

Preference fordomestic contractors (cont.)

Requirements for eligibility formargin of preference (7.5%)

Applicable only for “domestic bidders” i.e. Individual firms

1. Registered in borrower country

2. Greater than 50% national ownership

3. Not more than 50% subcontracting to foreign firms

Joint-venture of domestic firms

1. As in 1 & 2 above

2. Joint venture registered in Borrower’s country

10

Preference fordomestic contractors (cont.)

Bidding documents to indicate preference, criteria and methodology for evaluation

Bidder to furnish data to supporteligibility as domestic contractor

11

Life cycle cost methods

Cost to own and operate itemduring its useful life

Initial purchase price Adjusted for extras, delivery,

variations in payment terms, etc.* Value of adjustments added to bid price

Operating cost during life of item Fuel, spare parts, maintenance

(x years)* Annual costs discounted to NPV

Ownership cost during life of item Economical useful life (x years)

* Resale of scrap value discounted to NPV

12

Life cycle cost methods (cont.)

Efficiency cost method during its useful life

Capitalize differences in efficiency in operation of items i.e. boiler, turbine, transformer, etc. during life

Productivity cost method Determine life cycle cost per

unit of output for comparison purposes

Life cycle cost of plant (x years) NPV divided bytotal unit output of plant

13

Productivity cost method Determine life cycle cost per

unit of output forcomparison purposes

Life cycle cost of plant (x years) NPV divided bytotal unit output of plant

Life cycle cost methods (cont.)

14

Post-qualification Only for lowest

evaluated responsive bidder Criteria

(update pre-qualification info) Capacity (new work

commitments) Financial resources Management Critical equipment Current litigation

15

Bid evaluation - Report content

Identification of contract Bidding process

Pre-qualification / advertising amendments

Bid submission/opening Bidder identify

prices/currencies

16

Bid evaluation - Report content (cont.)

Examination and evaluation Responsiveness /

reasons for rejection Corrections Currency conversion /

exchange rates Deviations / treatment /

calculations

Proposed contract award Standard format

17

Rejection of all bids

Permissible onlyon consultation with bank

Only if lowest bid exceedsestimate by substantial margin, or

If bids are not responsive, or

Lack of competition, if so

Review specifications and contract conditions before re-inviting bids

18

Award of contract

Selected bidder should notbe required :

To reduce price To undertake work not

specified inthe bidding document,

or To modify the bid

19

Award of contract (cont.)

The employer should : Award the contract within

the period of the validity of bids To the bidder whose bid has been

determined to bethe lowest evaluated bid, and

Who meets the appropriate qualifying standards