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					   “Property may be destroyed and money may lose its
    purchasing power; but character, health, knowledge and
    good judgment will always be in demand under all
    conditions.” Roger Babson

   “Men use care in purchasing a horse, and are neglectful in
    choosing friends” John Muir.

   Purchasing power is a license to purchase power.” Raoul
    Vaneigem

   “Excellence in any department can be attained only by the
    labor of a lifetime; it is not to be purchased at a lesser
    price.” Samuel Johnson

   The friendship that can cease has never been real.” St.
    Jerome

   “Sell not virtue to purchase wealth, nor liberty to
    purchase power.” Benjamin Franklin



   Passion can never purchase what true love
    desires: true intimacy, self-giving, and
    commitment”

   “Experts agree that the best type of
    computer for your individual needs is one
    that comes on the market about two days
    after you actually purchase some other
    computer.” Dave Barry

   I saw a boy of the crew purchasing javelins
    of them with bits of platters and broken
    glass. Cristopher Columbus
        Procurement Management
   Procurement is acquisition of goods and
    services.

   Project Procurement Management includes
    the contract management and change
    control processes required to administer
    contracts or purchase orders issued by
    authorized project team members.
        Procurement Cycle
   Plan Purchases and Acquisitions.
    Determining what to purchase or acquire and
    determining when and how.
    • Purchase of equipment
    • Procurement of works
    • Procurement of supplies etc


   Plan Contracting – documenting products,
    services, and results requirements and
    identifying potential sellers.
    • Developing the requisite documents
    • Specification
    • No and make etc.
   Request Seller Responses.
    • obtaining information, quotations, bids, offers ,or
        proposals, as appropriate.
    •   Inviting bids
    •   Inviting quotations
    •   Request for Proposals ( RPFs)
    •   Expression of Interest ( EOI) etc.


   Select Sellers.
    • Reviewing offers, choosing among potential
      sellers, and negotiating a written contract with
      each seller.
    • Tender/bids opening
    • Evaluation and Assessment of bids
    • Negotiation if required and allowed
    • Selection of the seller/contractor
   Contract Administration –
    • Managing the contract and relationship between the
      buyer and seller.
    • Reviewing and documenting how a seller is performing
      or has performed to establish required corrective
      actions
    • Provide a basis for future relationships with the seller,
    • Managing contract-related changes and, when
      appropriate,
    • Managing the contractual relationship with the outside
      buyer.
    • Contract Agreement


   Contract Closure –
    • completing and settling each contract, including the
      resolution of any open items,
    • Closing each contract applicable to the project or a
      project phase.
            Procurement Planning
• Make-or-Buy Analysis
• Whether a particular product or service can be
  produced by the project team or can be
  purchased.

• Expert Judgment
• Expert purchasing judgment can also be used to
  develop or modify the criteria that will be used to
  evaluate offers or proposals made by sellers.

• Contract Types
• Different types of contracts are more or less
  appropriate for Different types of purchases.
      Fixed-price or lump-sum contracts.
      Cost-reimbursable contracts.( cost Plus)
      Time and Material (T&M) contracts.
   Fixed Price contracts
         Fixed price or lump sum
         Cost price with re-determination
         Fixed price plus incentive fee.
         Fixed price plus economic price adjustment
         Fixed price with successive targets incentives
         Fixed price for service material and labor at cost.
         Time and material labor hours only.

   Others methods:
         Turnkey
         Bonus - Penalty
         Joint venture
         Combination of the above
         BOOT ( Build Operate Own and Transfer
         BOT ( Build Operate and Transfer)
         Build Lease and Transfer ( BLT)
        Plan Contracting: Outputs
   Procurement Documents
    • Procurement documents are used to seek
      proposals from prospective sellers.
    • A term such as bid, tender, or quotation is
      generally used when the seller selection decision
      will be based on price (as when buying commercial
      or standard items),
    • A term such as proposal is generally used when
      other considerations, such as technical skills or
      technical approach, are paramount.

   Evaluation Criteria
    • Evaluation criteria are developed and used to rate
      or score proposals. They can be objective or
      subjective Evaluation criteria are often included as
      part of the procurement documents.
   Other Selection criteria
    Understanding of need. How well does the seller’s proposal
     address the contract statement of work?

    • Overall or life-cycle cost. Will the selected seller produce
      the lowest total cost (purchase cost plus operating cost)?

    • Technical capability.

    • Management approach.

    • Technical approach.

    • Financial capacity. Does the seller have, or can the seller
      reasonably be expected to obtain, the necessary financial
      resources?

    • Production capacity and interest. Does the seller have the
      capacity and interest to meet potential future requirements?
   •
   Business size and type.

    References. Can the seller provide references from prior
    customers verifying the seller’s work experience and compliance
    with contractual requirements?


   Intellectual property rights. Does the seller assert
    intellectual property rights in the work processes or services
    they will use or in the products they will produce for the project?

   Proprietary rights. Does the seller assert proprietary rights in
    the work processes or services they will use or in the products
    they will produce for the project?
Request Seller Responses: Tools and Techniques

    Bidder Conferences
     • Meetings with prospective sellers prior to preparation of a
       bid or proposal.
     • To have a clear, common understanding of the
       procurement
     • All potential sellers are given equal standing during this
       initial buyer and seller interaction to produce the best bid.


     • Advertising

     • Develop Qualified Sellers List
     • Qualified sellers lists can be developed from the
       organizational assets if such lists or information are
       readily available. Whether or not that data is available,
       the project team can also develop its own sources.
                        Select Sellers
   Selection decision process:
     • cost can be the primary determinant for an off-the-shelf item,
     • Proposals are often separated into technical (approach) and
       commercial (price) sections, with each evaluated separately.

    • Multiple sources could be required for critical products,
      services, and results to mitigate risks that can be associated
      with issues such as delivery schedules and quality
      requirements.

    • Select a single seller that will be asked to sign a standard
      contract.

    • Establish a negotiating sequence by ranking all proposals by
      the weighed evaluation scores assigned to each proposal.

    • On major procurement items, the overall process of
      requesting responses from sellers and evaluating sellers’
      responses can be repeated.

    • A short list of qualified sellers can be established based on a
      preliminary proposal. A more detailed evaluation can then be
      conducted based on a more detailed and comprehensive
      proposal that is requested from the sellers on the short list.
        Select Seller Techniques
   Weighting System
   Independent Estimates
   Screening System
   Contract Negotiation
   Seller Rating Systems
   Expert Judgment
Contract
• A contract is awarded to each selected seller.
•The contract can be in the form of a complex
document or a simple purchase order.
• Regardless of the document’s complexity, a
contract is a mutually binding legal agreement
that obligates the seller to provide the specified
products, services, or results, and obligates the
buyer to pay the seller.
    Contract Administration: Tools and Techniques

   Contract Change Control System
   A contract change control system defines
    the process by which the contract can be
    modified.
   Buyer-Conducted Performance
    Review
   Inspections and Audits
   Performance Reporting
             Contract Closure
   The Contract Closure process supports
    the Close procurement process since it
    involves verification that all work and
    deliverables were acceptable.
   Contract Closure: Tools and Techniques
    • Procurement Audits
    • A procurement audit is a structured review
      of the procurement process from the Plan
      Purchases and Acquisitions process
    • Records Management System
     Procedures of Open competitive Bidding under
                   PPRA Rules 2004.
                          One Envelope Procedure
   Each bid shall comprise one single envelopes containing,
    separately, financial proposal and technical proposal (if any)
    • Open competitive      bidding   procedure   used   for   most   of   the
      procurement.

    • where the scope and technical specification of the procurements are
      very clear and unambiguous.

    • For projects of repetitive nature and where a pool of registered
      contractors with the departments is available sometimes.

    •    In this procurement mode, the financially lowest bid is generally
        selected.

    •    Such procurements become victim of low bidder dilemma as the
        bidding firms.

    •    Poor history of successful procurements by this method.

    • Preferred for small and clear procurements.
       Two Envelops Procedure
i)    The bid shall comprise a single
      package containing two separate
      envelopes. Each envelope shall
      contain separately the financial
      proposal     and     the   technical
      proposal:
ii)   The envelopes shall be marked as
      “FINANCIAL PROPOSAL”            and
      “TECHNICLA PROPOSAL” in bold
      and    legible   letters to   avoid
      confusion.
     Two Stage Bidding Procedure
First Stage (Tech Proposal )
i) The bidders shall submit, according to the
    required specifications, a technical proposal
    without price,

i)    The technical proposal shall be evaluated in
      accordance with the specified evaluation criteria
      and may be discussed with the bidders regarding
      any deficiencies and unsatisfactory    technical
      features.
                      Continued
iii)   After such discussions, all the bidders shall be
       permitted to revise their respective technical
       proposals to meet the requirements of the procuring
       agency;

iii)   The procuring agency may delete, modify or add
       any aspect of the technical           requirements or
       evaluation criteria, or it may add new requirements
       or criteria not inconsistent with these rules.
                    Continued
   Such    revisions,   deletions,   modifications or
    additions are communicated to all the bidders
    equally at the time of invitation to submit final
    bids, and that sufficient time is allowed to the
    bidders to prepare their revised bids:

   Such allowance of time shall not be less than
    fifteen days in the case of national competitive
    bidding and thirty days in the case of international
    competitive bidding;
                Continued
v)   Those bidders not willing to
     conform their respective bids to the
     procuring       agency’s      technical
     requirements may be allowed to
     withdraw from the bidding without
     forfeiture of their bid security.
       Second stage (Revised Tech Proposal)

i)   The     bidders,    whose   technical
     proposals or bids have not been
     rejected and who are willing, to
     conform their bids to the revised
     technical requirements shall be
     invited    to    submit   a   revised
     technical proposal along with the
     financial proposal.
                  Continued
ii)    The revised technical proposal and the
       financial proposal shall be opened at a
       time date and venue announced and
       communicated      to  the   bidders   in
       advance; and
iii)   The revised technical proposal and the
       financial proposal shall be evaluated in
       the manner prescribed above. The bid
       found to be the lowest evaluated bid
       shall be accepted.
 Best for projects of technical nature.
 Where the firm’s capacity to deal with the complexity of
  the project is critical to the successful implementation of
  the project

 The scaling of technical and financial score depends on
  the nature of the project and relevant importance of the
  of each major criteria

 Typical range from 50:50 to 70:30 for technical: financial
  respectively.

 For mega IT projects, where the technical expertise,
  global partnership and relevant experience of the firm
  are of paramount importance, the technical part can be
  given a score of 70 or even 80.
Technical Evaluation for ICT project at AIOU
Criteria   Nature of Firm            Offices  and      Methodology and   Experience of similar works    References.   Financial         Key personnel     Total Marks
           ( 10)                     Outreach          approach                                          ( 10)        soundness and     for the project   ( 100)
                                     ( 10)                   ( 20)                                                    bank references        ( 10)
                                                                                                                            ( 10)
                                                                         In hand       Completed
                                                                             (25)         ( 15)
Marks      Max                       Islamabad                           For     Min   For Min four    National: 05                     Team leader:      Obtained.
           Individual firm: 02       office: 05                          two similar   works: 05       Intn’l; 5      Balance sheets:   05
           Partnership:     03       Other:       01                     works: 10     Add 01 marks                   05                Core     team
           Company:         05       marks       per                     Add       2   for add work                   Income Stat:03    members: 10
           Add 1 mark per year       office max: 05                      marks per                                    Bank reference:
           since establishment Max                                       work.                                        02
           5 marks
       One Stage Two envelope
         bidding procedure:-
i)   The bid shall comprise a single package
     containing    two    separate     envelopes
     containing separately the financial proposal
     and the technical proposal;

i)   The envelopes shall be marked as
     “FINANCIAL PROPOSAL” and TECHNICAL
     PROPOSAL” in bold and legible letters to
     avoid confusion;
                     Continued
iii)   initially, only the envelope marked “TECHNICAL
       PROPOSAL” shall be opened;
iv)    The envelope marked as “FINANCIAL PROPOSAL”
       shall be retained in the custody of the procuring
       agency without being opened.
v)     The technical proposal shall be evaluated on the
       laid down criteria.
vi)    The financial bids of the firm fulfilling the criteria
       are opened and remaining are returned un-
       opened.
vii)   The lowest evaluated bid based on the technical
       and financial bids is approved.
     Performance Guarantee
   Where needed and clearly expressed
    in the bidding documents, the
    procuring agency shall require the
    successful bidder to furnish a
    performance guarantee which shall
    not exceed ten per cent of the
    contract amount.
Two Stage Bidding Procedure
       First Stage (Tech Proposal)
    •     The bidders shall submit, according to the
          required specifications, a technical proposal
          without price,
    •     The technical proposal shall be evaluated in
          accordance with the specified evaluation criteria
          and may be discussed with the bidders
          regarding any deficiencies and unsatisfactory
          technical features,
    •     After such discussions, all the bidders shall be
          permitted to revise their respective technical
          proposals to meet the requirements of the
          procuring agency;
    •     The procuring agency may delete, modify or add
          any aspect of the
• technical requirements or evaluation criteria, or it
  may add new requirements or criteria not
  inconsistent with these rules.

• Such revisions, deletions, modifications or
  additions are communicated to all the bidders
  equally at the time of invitation to submit final
  bids, and that sufficient time is allowed to the
  bidders to prepare their revised bids:

• Such allowance of time shall not be less than
  fifteen days in the case of national competitive
  bidding and thirty days in the case of international
  competitive bidding;

• Those bidders not willing to conform their
  respective bids to the procuring agency’s technical
  requirements may be allowed to withdraw from
  the bidding without forfeiture of their bid security.
             Second Stage:
   The bidders, whose technical proposals or bids
    have not been rejected and who are willing, to
    conform their bids to the revised technical
    requirements shall be invited to submit a
    revised technical proposal along with the
    financial proposal.

   The revised technical proposal and the
    financial proposal shall be opened at a time
    date and venue announced and communicated
    to the bidders in advance; and

   The revised technical proposal and the
    financial proposal shall be evaluated in the
    manner prescribed above. The bid found to be
    the lowest evaluated bid shall be accepted.
   Best for
    • Best suited for Large Civil Works
      projects, heavy equipment and
      complex projects
    • Where the available information and in-
      house expertise of the procuring agency
      is not enough to deal with.
    • The feedback of the firm may provide
      some additional information on the
      procurement.
    Construction of Academic complex
       at AIOU at PKR 200 Million
   Total application received: 60
   No of firm pre-qualified on the basis of technical evaluation: 15
   Tenders issued: 05
   Tenders received: 02
    The lowest bid was found technically and financially sound and
    was referred to PPRA for guidance.
   The PPRA authorities clarified that they are not vetting or
    verifying authorities
   For all procurements, PPRA Rules 2004 must be strictly followed.
   They further clarified that there is no bar of minimum 3 number
    of bidders required for any procurement.

   even one bid can be accepted if it is found reasonable and
    the PPRA rules are followed in true spirit.

   Procurement of 50 Million or more to be reported to NAB?
Thank You

				
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