Tendering and Contracts

7/31/2019 Tendering and Contracts

1/12

29/04/2012

1

Tendering & ContractsTendering & Contracts

MECH4205(5) - Engineering Management IISemester 2 Academic Year 2011 / 2012

Prepared byMr Bhoomitra Sharma TOOLSY

Fundamental Principle of PublicFundamental Principle of Publicbuyingbuying

Procurement of goods in Public Interest Efficiency, Economy, Transparency

Fair & Equitable treatment of suppliersPromotion of Competition


2/12

29/04/2012

2

Objectives of Public Procurement*Objectives of Public Procurement*

Value for money in procurement of goods, worksand services

Integrity avoiding corruption and conflicts of interest

Accountability Equal Opportunities and equal treatment for

providers

Fair treatment for providers Efficiency in the procurement process

* Sue Arrowsmith

Procurement processProcurement processProcurement decision

Preparation of RFP or Tender document

Internal validation

Publication of RFP

Await proposal

Receipt of proposals

Evaluation of best proposal or best b idder

Selection of best proposal or best bidder

Presentation by best bidders

Decision by soliciting company

Contract / Agreement finalisation & signature


3/12

29/04/2012

3

Types of TenderTypes of Tender

In broader terms there are three types of tender :Open TenderLimited TenderSingle Tender

Writing the BidWriting the Bid

The Basics: What / How / Who/ When / How Much?

Add Value: Demonstrate a clear understanding of the

specification Adds value and brings innovation to the

specification Explains why choose us?


4/12

29/04/2012

4

The tendering processThe tendering process

8

Two Stage TenderTwo Stage TenderContractContractNoticeNotice

Expression of Expression of InterestInterest

PrePre--QualifyingQualifyingStageStage

PQQ EvaluationPQQ Evaluation

TenderTenderEvaluationEvaluation

ContractContractAwardAward

Invitations toInvitations toTender issuedTender issued

Prepare Tender &Prepare Tender &SubmitSubmit


5/12

29/04/2012

5

Preparation of tender documentPreparation of tender documentGood tender document: Letter of invitation to tender Instruction to tender conditions of contract Schedule of Requirement Technical specification Special conditions of contract Bills of quantities / Price schedule Contract Form General information about site Form of tender

Receipt of tendersReceipt of tenders

Tenderers may visit the siteDouble clarificationAnnouncement of respective bids

Disqualified bids


6/12

29/04/2012

6

Evaluation of Evaluation of tendererstenderersTechnicalCommercialManagerialcontractual

EVALUATION PROCESSEVALUATION PROCESS -- micromicro

Tender is sealedTender documents must clearly specifyevaluation criteria.Two types of Bids: Technical Financial

Tender evaluation to be in accordance withevaluation criteria.


7/12

29/04/2012

7

How Tenders Are EvaluatedHow Tenders Are EvaluatedPublished evaluation criteria:

Best PriceMost Economically Advantageous Tender (MEAT)

Usually evaluated by a panel Scoring matrix used to objectify subjective

opinions

Scores are weighted Tendering rigorously controlled and audited


8/12

29/04/2012

8

ProposalProposalTechnicalFinancial

No of copies to be prepared as per the RFP

Technical proposalTechnical proposalExecutive summaryUnderstanding of RFP

Understanding of problems Analysis of situation

Project description

Project scope and objectives Approach, methodology, task breakdown and deliverable(s) by task Plan of work Facilities and Equipments Any special requirement of project in terms of , logistics and

permits Clarification of roles (service provider and client)

Team Team, team composition and CVs Past experience relevant to the project


9/12

29/04/2012

9

Financial proposalFinancial proposalServices being charged and provided (but notcharged)Labour / expertise cost and rates per dayCost of product or service (production anddelivery)Distribution and logistics charges

Administration feesContingency charges covering unforeseencircumstances

Building effectiveness of proposalsBuilding effectiveness of proposalsQuestions to be asked during Questions to be asked during preparation:preparation:

What does the solliciting organisation reallywant?

What is the problem that needs to be solved?What approaches to the solution will be viewedmost favourably?What approaches will be viewed unfavourably?What objections will our plan elicit?Can we accomplish the goals we propose?


10/12

29/04/2012

10

Preparation of proposalPreparation of proposalTendering / Bidder / Proposing organisation mayhave to research on soliciting organisation inareas: Problems Corporate culture and the resulting attitudes Current financial status Business goals

Self Self--check of proposalcheck of proposalWhat are the weaknesses of the plan from theclients point of view?How can we counter any weaknesses andclients potential objections?How can we make our plan appealing?How can we show that we understand theirneeds?How can we best present our capability to thisproject?What are our strengths?


11/12

29/04/2012

11

Self Self--check of proposalcheck of proposalFrom our knowledge of our organisation, whatare our weaknesses to complete the project asproposed?Do we need to modify our proposed plan toavoid misleading the client about our ability toperform certain tasks on time, as proposed, andat cost?Can we sell our idea without compromising theaccuracy of what we can actually do?

Must HavesMust HavesPricePeriod for Validity of OfferResponsive Offer from Responsible Offeror

Compliant with Request except forCertificationsRepresentations/WarrantiesWhat are they?Identification of Authorized NegotiatorsOthers?


12/12

29/04/2012

12

Nice to HavesNice to HavesAlternative OffersNegotiable Items You may be willing to eliminate these items Relationship to Price

OptionsNice to have and must haveprovisions can impact price

Functions of the ContractFunctions of the ContractRecord of the agreementDocument which frames and facilitatescontract administration activitiesRisk allocation among the partiesDefines Payment TermsPerformance Incentive to Contractor

Request for Tender Forms theFoundation For the contract

Documents

Tendering and Contracts