EVALUATION GUIDE FOR PREQUALIFICATION AND BIDDING UNDER JBIC ODA LOANS Procurement of Goods and Services (except Consulting Services) Japan Bank for International Cooperation (JBIC) June 2000 (Amended in January 2007) i Preface This Evaluation Guide has been prepared by Japan Bank for International Cooperation, hereinafter and throughout these documents referred to as JBIC, for use by the Borrowers of JBIC ODA Loans (The term ―Borrower‖ as used in this document also refers to the Executing Agency of a project financed by JBIC ODA Loans.) in the evaluation of prequalifications and bids, in accordance with the provisions of Guidelines for Procurement under JBIC ODA Loans, dated October 1999 (hereinafter called Procurement Guidelines). This document is intended specifically for assisting the Borrowers in the evaluation of prequalifications and bids procured through International Competitive Bidding (ICB), as well as bids through Limited International Bidding (LIB). It should also prove useful, with appropriate modifications, to the Borrowers for bid evaluation under Local Competitive Bidding (LCB) procedures. Its use is encouraged as the procedures it incorporates have been developed through broad international experience and practice and it complies with Procurement Guidelines. In case of ambiguities or discrepancies between this Evaluation Guide and the provisions of the Loan Agreement or the provisions of the prequalification / bidding documents, the provisions of the Loan Agreement or the prequalification / bidding documents prevail over the Evaluation Guide. It should be noted that, in accordance with the conditions of the Loan Agreement, JBIC is authorized to publish a description of the contract, the names and nationalities of the bidders, the bid prices, the name and nationality of the contract awardee and the contract price. Permissions from the World Bank and the Asian Development Bank to use its standard evaluation forms and guides for prequalification and bidding as the bases for this Evaluation Guide is herewith acknowledged. All users are invited to submit comments on their experience with this Evaluation Guide to: Procurement Policy and Supervision Division Project Development Department Japan Bank for International Cooperation 4-1, Ohtemachi 1-chome, Chiyoda-ku, Tokyo 100-8144, Japan Telephone: +81 3 5218-9611 Facsimile: +81 3 5218-9640 URL: http://www.jbic.go.jp E-mail: firstname.lastname@example.org ii January 2007 amendment This amendment dated January 2007 has been made in light of the present operational policy of JBIC on the evaluation of prequalification and bid, and for clarity of the Evaluation Guide to promote a better understanding. In addition, Sample Forms for Prequalification Evaluation Report are incorporated and some editorial corrections are made. iii Table of Contents Preface ............................................................................................................................ i January 2007 amendment .............................................................................................. ii How to Use This Guide............................................................................................................ 1 Section I. Evaluation Principles ............................................................................................ 3 Section II. Prequalification Evaluation ................................................................................ 6 Section III. Bid Evaluation ................................................................................................. 11 GENERAL................................................................................................................... 11 BID EVALUATION PROCEDURE 1. Basic Information and Bidding Process................................................................... 13 2. Preliminary Examination of Bids ............................................................................ 15 3. Determination of Substantial Responsiveness ......................................................... 17 4. Detailed Examination of Bids.................................................................................. 20 5. Determination of Award .......................................................................................... 25 Annex I. Prequalification Evaluation Report Sample Forms........................................ 29 Table 1. Identification ................................................................................................. 34 Table 2. Prequalification Process ............................................................................... 35 Table 3. Preliminary Pass-Fail Examination of Applicant ......................................... 36 Table 4. Qualification Evaluation Summary .............................................................. 37 Table 5. Proposed Prequalification Decision ............................................................. 39 Annex I-1. Prequalification Evaluation Summary Checklist ........................................... 40 Annex II. Bid Evaluation Report Sample Forms............................................................. 41 Table 1. Identification ................................................................................................. 46 Table 2. Bidding Process ............................................................................................ 47 Table 3. Bid Submission and Opening ....................................................................... 48 Table 4. Bid Prices (as Read Out) .............................................................................. 49 Table 5. Preliminary Examination .............................................................................. 50 Table 6. Corrections and Unconditional Discounts .................................................... 51 Table 7. Exchange Rates ............................................................................................ 52 Table 8. Currency Conversion ................................................................................... 53 Table 9. Additions, Adjustments, and Priced Deviations ........................................... 54 Table 10. Proposed Contract Award........................................................................... 55 Annex II-1. Bid Opening Checklist ..................................................................................... 56 Annex II-2. Preliminary Examination ................................................................................ 57 Annex II-3. Bid Evaluation Summary Checklist ............................................................... 58 How to Use This Guide 1 How to Use This Guide 1. The evaluation guide and forms contained in this document provide typical organizational structures and step-by-step procedures for the evaluation of prequalification and bids solicited through ICB. In all instances, the procedures of prequalification and bidding, including evaluation, shall follow the Instructions to Applicants (ITA) for prequalification and the Instructions to Bidders (ITB) for bidding of the actual prequalification / bidding documents used. 2. JBIC issued Sample Prequalification Documents (SPD) and Sample Bidding Documents (SBD) which are encouraged to be used by the Borrowers in conducting Prequalification and ICB procedures under JBIC ODA loans. The following SPD and SBD are currently available1 (a) Prequalification (PQ) (b) Procurement of Goods (Goods) (c) Procurement of Civil Works (Works) (d) Procurement of Civil Works – Smaller Contracts (Small Works) (e) Supply and Installation of Plant and Equipment (Plant) 3. The guide and sample forms in this document are based on ITA in the SPD and ITB in the SBD. 4. Readers are expected to note that evaluation and the resulting report need not necessarily be lengthy. Procurement of ordinary goods can usually be quickly and easily evaluated. In general, the complexity of the evaluation lies with larger civil works and with the supply and installation of industrial plants and equipment. The Evaluation Report should accompany the forms, attached in Annex I and Annex II, but they may be modified to suit specific requirements of the prequalification / bidding documents. The report should include a number of attachments to explain details of the evaluation of prequalification and bid or to show specific controversial wording or numbers in an application and a bid. Cross- referencing should be used extensively, as well as references to relevant clauses in the prequalification / bidding documents. 5. If a large project is sliced into smaller similar contracts, applications and bids are offered on individual contracts (slices or lots) or on a group of similar contracts (packages). Award is made to the combination of bids offering the lowest cost to the Employer. 1 Sample Documents for Selection of Consultants is available for employment of consultants under JBIC ODA Loans. How to Use This Guide 2 6. The Borrowers are expected to study these guide and evaluation forms during project preparation, in order to properly assess the managerial and administrative capacity needed for evaluation of prequalification and bid. JBIC encourages the employment of experienced consultants to help in evaluations for complex contracts. The role of consultants for evaluation of prequalification and bidding is explained in this document. Cost for employing the consultant can be a part of JBIC ODA Loan funds, if agreed so in the Loan Agreement. Section I. Evaluation Principles 3 Section I. Evaluation Principles 1) Basic Principles The evaluation work must be strictly conducted on a basis of impartiality and fairness, with due attention to considerations of economy, efficiency, transparency and non-discrimination among eligible bidders, which are general principles laid down by Procurement Guidelines (Section 1.01(c)). 2) Evaluation The evaluation organizations are expected to be set up by the Organizations Borrower of JBIC ODA Loans. For example the organization may consist of three tiers: (1) a responsible Department or Unit in charge, at Executing Agency; (2) an authorized Evaluation Committee set up within or outside of Executing Agency; (3) a higher government authority, if necessary. However, it is noted that the establishment and authority of evaluation organizations must be in full accordance with laws and regulations of the Borrower country. It is desirable that the Borrower clearly specifies the roles and responsibilities for evaluation procedures, taken by each party of: the Executing Agency, the Evaluation Committee and the higher authority, and also of the consultant involved in the evaluation work. Members of the Evaluation Committee are to be selected in full accordance with laws and regulations of the Borrower country. The members usually include, but not limited to, the representative of Executing Agency, technical authority, and the consultant involved in the evaluation work is strongly recommended to be present in the evaluation process. 3) Role of When a consultant is employed for the purpose of assisting the Consultant Borrower in evaluation of prequalification and bid under projects financed by JBIC ODA Loans, the consultant is expected to support and assist the evaluation process, and the Borrower is required to maintain sufficient communication with the consultant, during evaluation procedure. The Evaluation Report prepared by the consultant must be fully understood by members of Executing Agency and Evaluation Committee, and a clarification can be made by the consultant to the Evaluation Committee members, if requested. For this Section I. Evaluation Principles 4 purpose, it is strongly recommended for the consultant to be present to the Evaluation Committee. In the case of difference of opinion, for evaluation results, between the Borrower and the consultant, a final evaluation report must clearly state those differences. The consultant is allowed to submit a copy of their evaluation report directly to JBIC (Guidelines for the Employment of Consultants under JBIC ODA Loans, Section 2.02(3)). 4) Record of It is desirable that the Borrower keeps a record of the Meeting Evaluation Committee Meeting for concluding the evaluation results and includes the record into the evaluation report. 5) Auditing In order to secure transparency in the procurement procedure under JBIC ODA Loans, it is desirable for the Borrower to adopt an authorized audit system, which enables to prove the fair and impartial procurement procedure, in accordance with the Procurement Guidelines as well as laws and regulations of the Borrower country. The auditing function can be provided by the Borrower’s authorized government agency or third party professional organizations. 6) Observation of The scheduled bid invitation date indicated on the Evaluation prequalification documents should be observed. The Schedule prequalification result must be informed to the Applicants within the number of days of the date of submission, as indicated on the ―Instructions to Applicants‖. The desirable prequalification evaluation period from deadline of proposal submission to authorization of evaluation result by the Borrower is within two to three months. The scheduled award date indicated on the bidding documents should also be observed, and any extension of bid validity should be avoided. The desirable evaluation period from tender opening to authorization of evaluation result by the Borrower is within two to three months at maximum, even in the case of very large sized projects. Section I. Evaluation Principles 5 Box 1 Involvement of Consultants In projects financed by JBIC ODA Loans, there have been cases in which the Borrower prepared their own Evaluation Reports, which were not necessarily in accordance with the Evaluation Reports prepared by the Consultants. In addition, there have been cases that the consultants were not allowed to be present in the Evaluation Committee Meetings organized by the Borrower, in which a conclusion different from the one that the consultant proposed is agreed. When there is a difference in evaluation conclusions between the Borrower and the consultant, JBIC requires clarification for reasons behind, which are to be carefully reviewed before concurrence is given to the contents of Evaluation Report. It is imperative for the consultants to be fully involved in the prequalification and bidding evaluation procedures. The Evaluation Report should thoroughly explain the difference in conclusion by the Borrower and the consultants, if any. Section II. Prequalification Evaluation 6 Section II. Prequalification Evaluation 1) Objectives of A prequalification procedure is, in principle, required for Prequalification selecting potential contractors and suppliers for large scale contracts or contracts with complex and highly specialized services under JBIC ODA Loans. (Procurement Guidelines Section 3.02) The objectives of prequalification are: - To ensure that invitations to bid are extended only to technically and financially qualified bidders, and to prevent unqualified bidders from winning the bid as a result of superficial evaluation; - To enable prospective bidders, who may be insufficiently qualified on their own, to avoid the expense of bidding; to give an incentive for these potential bidders to form a joint venture that may give them a better chance of success; and - To limit the number of bidders, in advance, to a manageable size for the Borrower in conducting bidding procedure and evaluation, when a large number of bidders are expected to participate. The prequalification procedure must be conducted strictly in order to secure quality in the procurement. 2) Eligibility The eligibility of the bidder is to be examined mainly on the following three points: - The bidder must be from eligible source country as stipulated in the Loan Agreement; - The bidder or any of its associates must be free from conflict of interest for the project (Procurement Guidelines Section 1.04); and - A firm shall submit only one bid either individually or as a partner in a joint venture. No firm can be a subcontractor while submitting a bid individually or as a partner of a joint venture in the same bidding process. A firm, if acting in the capacity of subcontractor in any bid, may participate in more than one bid, but only in that capacity. Section II. Prequalification Evaluation 7 3) Evaluation It is desirable that the Prequalification Criteria are prepared at Criteria of the same time as the Prequalification Documents are prepared. Prequalification The Criteria must be prepared before the closing date of prequalification submission at the latest, and the Criteria should not be changed during the Prequalification Evaluation process. The Prequalification Evaluation Criteria are required to be reviewed and concurred by JBIC, if it is stipulated so in the Loan Agreement. 4) Evaluation Stage-1, ―Preliminary Examination‖, is to assess the document Procedure formality required in the Prequalification Documents, for each bidder with pass-or-fail criteria. It is necessary to confirm one by one, whether the submitted documents and its format are in conformity with the requirement. In case of no submission or missing of any of required documents deemed as important, such Applicant is to be disqualified at this stage Stage-2, ―Qualification Evaluation‖ is to examine whether submitted documents comply with the qualification requirement by using pass-or-fail criteria. If the level of qualification requirement is too high, it tends to limit the number of bidders, and in the reverse case it tends to allow unqualified bidders to be passed through for the bidding. Thus the qualification requirement must be set up carefully for each project. In principle, an Applicant is to be disqualified if it does not satisfy any of the qualification requirements. The evaluation work must be done by following the criteria set up beforehand, and the method must be based on absolute evaluation, not by comparative evaluation. The following items are to be noted in setting up criteria and conducting evaluation. (1) General Experience The Prequalification Documents usually indicate the minimum qualification requirements for Annual turnover Successful project experience of similar nature and complexity (Annual production rate for the key construction activity; Project experience in the country concerned and in similar countries, if applicable) (2) Personnel Capabilities Experience of prime candidate and alternative for key Section II. Prequalification Evaluation 8 management and specialist positions (3) Equipment Capabilities Type, characteristics, minimum number and availability of key equipment (4) Financial Positions Cash flow capacity (Procurement Guidelines Annex I, Paragraph 4 (1)) Soundness of financial position (5) Litigation History Accurate information on any litigation or arbitration resulting from contracts completed or under execution (Procurement Guidelines, Annex I, Paragraph 5) 5) Evaluation of The evaluation for joint ventures and consortium is to be Joint-Venture, conducted based on Procurement Guidelines Annex I, Consortium and Paragraph 6. Subcontractors The subcontractors or suppliers/manufacturers in charge of major critical components in the contract shall be subject to evaluation. Joint ventures, consortium or sub-contracting arrangement for major critical component announced at the time of prequalification, shall not be changed in principle. The alteration is subject to approval by the Borrower prior to the deadline for submission of bids (Procurement Guidelines Annex I, Paragraph 6). 6) “Slice and In case of prequalification for ―slice and package‖ contracts, each Package” Applicant shall be prequalified for the maximum number and Contracts types of contracts for which the Applicant meets the appropriate Evaluation aggregate requirements of such contracts. (refer to How to Use This Guide 5. for ―slice and package‖). 7) Prequalification In principle, no bidder should be prequalified with with conditionality. Conditionality Section II. Prequalification Evaluation 9 8) Limiting the It is not permissible to set a limit on the number of successful Number of Applicants prior to the evaluation of prequalification. All Bidders Applicants meeting the prequalification criteria specified shall be allowed to bid. However, it is also important to set the criteria so that a reasonable number of Applicants, normally no more than ten, shall be qualified. Excessive number of Applicants taking part in the bid is not preferable, because it will increase the burden of the Borrower when evaluating the bid proposals. 9) Review and The result of prequalification is subject to review and Concurrence by concurrence of JBIC, if stipulated so in the Loan Agreement. JBIC The Prequalification Evaluation Report will be submitted to JBIC with the authorized signature of the Borrower. Box 2 Contractors with Inadequate Capability for Implementation There have been cases in which the Borrower relaxed the evaluation criteria for prequalification and bidding with the intention to favor a particular contractor, resulting in awarding contractors with insufficient experience. Similarly, there have been cases in which subjective technical evaluation of contractors without sufficient implementation capability was conducted, simply because their price proposals were low. Since JBIC sets a basic policy to maintain non-discrimination among bidders, as stated in Procurement Guidelines, the details of the Evaluation Reports whose conclusion is to award bidders without sufficient capability will be strictly examined. When these types of evaluation take place, it tends to end up in a lengthy bid evaluation and delayed contract award. Furthermore, incapable contractors tend to have many troubles during implementation, due to lack of technical capability, poor site management and short of fund for implementation, etc. The Borrower finally tends to face with delay in implementation and increase in contract amount, which are neither efficient nor economical. Therefore, the prequalification and bid evaluation must be conducted carefully with due attention to specification and technical requirement in the bidding documents, and the Borrower should avoid evaluation which would result in selecting cheap but low quality bid. Section II. Prequalification Evaluation 10 Typical Prequalification Procedure for Contracts under JBIC ODA Loans Stage-1 Preliminary Examination (pass-or-fail) 1) Formality of Application 2) Completeness of Information 3) Eligibility of Application 4) Legal Status of Application No Satisfied? Yes Stage-2 Qualification Evaluation (pass-or-fail) 1) General Experience Annual Turnover Successful Project Experience of Similar Nature and Complexity - Annual Production Rate for the Key Construction Activity - Project Experience in the Country Concerned and in Similar Countries 2) Personnel Capabilities Experience of Prime Candidate and Alternative for Key Management and Specialist Positions 3) Equipment Capabilities Type, Characteristics, Minimum Number and Availability of Key Equipment 4) Financial Position Cash Flow Capacity Soundness of Financial Position 5) Litigation History Accurate Information on Any Litigation or Arbitration Resulting From Contracts Completed or Under Execution No Prequalified? Yes Selection of Prequalified Applicants Submission of Evaluation Report to JBIC Concurrence by JBIC? Disqualified Yes Determination of Prequalified Applicants Section III Bid Evaluation Guide 11 Section III. Bid Evaluation GENERAL 1. Purpose of Bid Evaluation The main purpose of bid evaluation is to determine the lowest evaluated substantially responsive bid among the bids submitted before the bid closing time on the date specified in the bidding documents. The lowest evaluated substantially responsive bid may or may not necessarily be the lowest priced bid. In order to determine accurately the lowest evaluated substantially responsive bid in accordance with the terms and conditions of the bidding documents, a systematic evaluation procedure designed to cover all aspects of the evaluation process should be followed. 2. Bidding Procedures under International Competitive Bidding JBIC has adopted three international bidding procedures which may be selected by the Borrower to suit the nature of the particular procurement: (1) Single-Stage: One-Envelope, (2) Single-Stage: Two-Envelope, and (3) Two-Stage. The use of Single-Stage: Two- Envelope and Two-Stage bidding procedures must be agreed upon by JBIC and the Borrower (Procurement Guidelines, Section 2.03). 1) Single-Stage: In the Single-Stage: One-Envelope bidding procedure, the bidders One-Envelope submit bids in one envelope containing both the price and the Bidding Procedure technical proposal, which are opened in public at the date and time advised in the bidding documents. The bids are evaluated and, following review and concurrence by JBIC, the contract is awarded to the lowest evaluated bidder. 2) Single-Stage: Single-Stage: Two-Envelope bidding procedure is applied in the Two-Envelope case of works, machinery and equipment for which complete Bidding Procedure technical specifications are prepared in advance. In the Single-Stage: Two-Envelope bidding procedure, the bidders submit simultaneously two sealed envelopes, one containing the technical proposal and the other the price proposal. Initially, only technical proposals are opened at the date and time advised in the bidding documents. The price proposals remain sealed and are held in custody by the Borrower. The technical proposals are evaluated by the Borrower, while no amendments or changes to the technical proposals are permitted. The objective of this exercise is to allow the Borrower to evaluate the Section III Bid Evaluation Guide 12 technical proposals without reference to price. Bids of bidders who do not conform to the specified technical requirements and/or are not acceptable in terms of performance, technical or service factors may be rejected, with the review and concurrence of JBIC. The technical evaluation result will be subject to review and concurrence by JBIC. Following the technical evaluation, the price proposals of the technically responsive bidders are opened in public, the price proposals are evaluated and, following review and concurrence by JBIC, the award of contract is made to the lowest evaluated bidder. The price proposals of the bidders whose technical proposals have been determined not to conform to the technical specifications shall promptly be returned unopened to the bidders concerned. (Procurement Guidelines, Section 2.03) 3) Two-Stage Two-Stage bidding procedure is applied in the case of turnkey Bidding contracts, contracts for large and complex plants or procurement Procedure of equipment, which is subject to rapid technological advances, for which it may be undesirable or impractical to prepare complete technical specifications in advance. In the Two-Stage bidding procedure the bidders first of all submit their technical proposals, on the basis of the minimum operating and performance requirements, but without prices. The technical proposals are opened at the date and time advised in the bidding documents. The technical proposals are evaluated by the Borrower and discussed with the bidders. Any deficiencies, irrelevant provisions and unsatisfactory technical features are pointed out to the bidders whose comments are carefully evaluated. The bidders are allowed to revise or adjust their technical proposals to meet the requirement of the Borrower. Bids of bidders who are unable to amend their technical bids so as to conform to the technical requirement may be rejected, with the review and concurrence of JBIC. After the evaluation of technical proposals and amended bidding documents, if any, being reviewed and concurred by JBIC, the second stage is to invite bidders to submit revised technical proposals and to submit price. The price proposals and revised technical proposals are opened in public at a date and time advised by the Borrower. The price proposals and revised technical proposals are evaluated and, following review and concurrence by JBIC, the award of contract is made to the lowest evaluated bidder. Section III Bid Evaluation Guide 13 BID EVALUATION PROCEDURE The evaluation procedure described below is generally adequate for an efficient evaluation of bids to determine the lowest evaluated substantially responsive bid in accordance with the terms, conditions and specifications stipulated in the bidding documents. Furthermore, the evaluation procedure, if strictly followed, will provide fairness to all bidders, as it will produce a transparent, fair and accurate outcome of the bidding. There are five stages in the bid evaluation process, which should be followed, in a logical sequence. These procedures are described based on Single-Stage: One-Envelope bidding, but they are also applicable for Single-Stage: Two-Envelope and Two-Stage bidding. See the previous part of Section III for difference in the procedures. A detailed report on the evaluation and comparison of bids setting for the specific reasons on which determination of the lowest evaluated bid was based shall be prepared by the Borrower (Procurement Guidelines, Section 5.08). Such report should include information and documentation to establish to the satisfaction of JBIC that principles pursuant to the Loan Agreement and Procurement Guidelines are satisfied in the bidding and bid evaluation process, and the proposed award of contract. Annex II is a set of tables recommended to be included in the bid evaluation report, which are in accordance with the following evaluation procedures. 1. Basic Information and Bidding Process 1) Identification, The basic information such as name of the Borrower, Executing Bidding Process, Agency, Project Name and other information to identify the bid and Bid must be filed. The Record of bidding process starting from Submission General Procurement Notice, Prequalification and contents of Bidding Documents are to be summarized, then information of Bid submission and Opening is to be recorded on the format. This information is necessary to monitor compliance with the Loan Agreement as well as Procurement Guidelines. (Annex II, Tables 1, 2 and 3) 2) Bid Opening2 All bids received prior to the deadline fixed for submissions shall be opened at the time, date and place specified in the bidding documents. All bidders that have submitted bids and their representatives shall be permitted to be present at the opening of bids, and all those present at the bid opening shall be required to sign the attendance sheet. 2 See Procurement Guidelines, Section 5.02. The record should be sent promptly to JBIC after bid opening. Section III Bid Evaluation Guide 14 A record of bid opening is prepared for prompt transmittal to JBIC, in accordance with Procurement Guidelines (Section 5.02). The copies should be sent to all bidders. To assist in carrying out the opening and preparing of the record, a checklist is provided in Annex II-1. The checklist should be filled out for each bid during the actual reading out at the meeting. The reading should be from the original version of each bid, and the actual amounts and other key details read out should be circled for later verification. If bids are expressed in multiple currencies, the amount expressed in each currency should be recorded. Any envelopes containing modifications, or withdrawals must be subject to the same level of scrutiny, including the reading out of critical details, such as price changes. Failure to read out such information and include it in the written record may result in denial of its inclusion in bid evaluation. If a bid has been withdrawn by cable, it should nonetheless be read out and should not be returned to the bidder until the authenticity of the withdrawal notice has been confirmed. Bids received after the deadline for receipt of bids should be rejected as stated in Procurement Guidelines (Section 5.02). Such bids shall be returned unopened to the bidder. A summary of the read-out bid prices, bid security, name of representatives of bidders and their signature should be provided in Annex II, Table 4. 3) Bid Validity The duration of the validity of each bid should be the one specified in the ITB and should be confirmed in the signed (form of) bid. If exceptional circumstances occur in which award cannot be made within the validity period, extensions in writing should be requested of bidders, in accordance with the ITB. Extensions to the validity of bid security should also be requested of bidders. The Borrower is advised to consult with JBIC before requesting such extension. Note any extensions in Annex II, Table 3. 4) Principles of After the public opening of bids, information relating to the Evaluation examination, clarification, and evaluation of bids shall not be disclosed to bidders or other persons not officially concerned with this process until the successful bidder is notified of the award of contract (Procurement Guidelines, Section 5.04). No bidder Section III Bid Evaluation Guide 15 shall be requested or permitted to alter its bid after the bids have been opened. Only clarifications not changing the substance of the bid are acceptable. The Borrower may ask any bidder for a clarification of the bid, but shall not permit any bidder to change the substance or price of the bid (Procurement Guidelines, Section 5.03). 5) Rejection of Bids Bidding documents usually provide that the Borrower may reject all bids. However, all bids shall not be rejected solely for the purpose of obtaining lower prices on the same specifications, except in cases where the lowest evaluated bid substantially exceeds the cost estimates. Rejection of all bids may also be justified when (a) no bid is substantially responsive to the bidding documents or (b) there is a lack of competition. If all bids are rejected, the Borrower shall review and consider either revision of the specifications or modification of the project, before inviting new bids. (Procurement Guidelines, Section 5.10) 2. Preliminary Examination of Bids The purpose of Preliminary Examination is to confirm whether the bids received were complete as required by the bidding documents before conducting further detailed evaluation. An examination must be made on whether the required securities have been provided, whether documents have been properly signed and whether the bids are otherwise generally in order. If a bid does not substantially conform to the specifications, or contains inadmissible reservations or is otherwise not substantially responsive to the bidding documents, it shall be rejected. A preliminary examination shall then be made to evaluate each responsive bid and to enable bids to be compared (Procurement Guidelines, Section 5.05). The following items should be carefully examined. 1) Verification Verification is required toward deficiencies that, if accepted, would provide unfair advantages to the bidder. The points to be covered by verification are (i) whether bid documents have been properly signed or not; (ii) whether power of attorney for the authorized person has been submitted or not; (iii) whether joint venture agreements, if required, are submitted or not; (iv) whether documents, required to assess the post qualification of a bidder with respect to its financial and technical capability to undertake the contract, have been provided or not. All copies of the bid Section III Bid Evaluation Guide 16 should be compared with the original and corrected accordingly, if necessary. Thereafter, the original should be kept in a safe location, and only copies should be used in evaluation. 2) Eligibility The bidder must be a national from or a juridical person incorporated and registered in eligible source countries as defined in the relevant Loan Agreement. All partners to a joint venture shall be from an eligible source country. Bidders shall declare the percentage of combined costs of goods and services procured from eligible source countries and show that their bids are in accordance with Procurement Guidelines (Section 1.04(a)), unless a different arrangement is clearly made in the relevant Loan Agreement. If prequalification has taken place, only bids from prequalified bidders can be considered. A bidder (including all members of a joint venture and subcontractors) may be disqualified if affiliated with a firm that has provided related consulting services on the project in accordance with Procurement Guidelines (Section 1.04(b) and (c)). 3) Bid Security The bidding documents generally require submission of a bid security. The bid security must conform to the requirements of the ITB, and it must be accompanied with the bid. If the bid security is issued as a bank guarantee, it must be consistent with the wording of the bid security form provided in the bidding documents. Furthermore, securities for an amount smaller or for a period shorter than the one specified in the ITB are not acceptable. The security for a bid submitted by a joint venture should be in the name of the joint venture. 4) Completeness of Unless the bidding documents have specifically allowed partial Bid bids—permitting bidders to quote for only selected items or for only partial quantities of a particular item—bids not offering all of the required items should ordinarily be considered nonresponsive. However, under civil works contracts, missing prices for occasional work items are considered to be included in prices for closely related items elsewhere. If any erasures, interlineations, additions, or other changes have been made, they should be initialed by the bidder. They may be acceptable if they are corrective, editorial, or explanatory. If they are not, they should be treated as deviations and should be analyzed in the next step for Substantial Responsiveness. Missing pages in the original copy of the bid may be a cause for rejection of the bid, as Section III Bid Evaluation Guide 17 may contradictions in model numbers or other designations of critical supply items. 3. Determination of Substantial Responsiveness The scrutiny of bids for substantial responsiveness to the provisions of the bidding documents is one of the most important aspects of the evaluation of bids. A bid is considered substantially responsive if it does not contain any ―Major Deviations‖ from the bidding documents or conditions which cannot be determined reasonably in terms of monetary value for financial adjustment. The purpose of this exercise is to reject bids which are not substantially responsive to major commercial and technical requirements. 1) Substantial All bids must be checked for substantial responsiveness to the Responsiveness commercial terms and conditions of the bidding documents. to Commercial Examples of nonconformity to commercial terms and conditions, Terms and which are justifiable grounds for rejection of a bid are discussed Conditions below: (a) failure to sign the Bid Form and Price Schedules by the authorized person or persons; (b) failure to satisfy eligibility requirements, (e.g., bidder or contractor are not from an eligible source countries, as defined in the Loan Agreement); (c) failure to submit a bid security as specified in the bidding documents; (d) failure to satisfy the bid validity period (e.g., the bid validity period is shorter than specified in the bidding documents); (e) inability to meet the critical delivery schedule or work schedule clearly specified in the bidding documents, where such schedule is a crucial condition with which bidders must comply; (f) failure to comply with minimum experience criteria as specified in the bidding documents; Section III Bid Evaluation Guide 18 (g) conditional bids, i.e., conditions in a bid which limit the bidder’s responsibility to accept an award (e.g., acceptance of the award is subject to government’s approval for export, prior sale or availability of critical material available in the market, or a bid submitted with a price escalation condition when a fixed price bid is specified, or qualifications to the Conditions of Contract); (h) inability to accept the price adjustment formulae of the bidding documents; (i) failure to submit major supporting documents required by the bidding documents to determine substantial responsiveness of a bid. 2) Substantial All bids must be checked for substantial responsiveness to the Responsiveness technical requirements of the bidding documents. Example of to Technical nonconformity to technical requirements, which are justifiable Requirements grounds for rejection of a bid are as follows: (a) failure to bid for the required scope of work (e.g., for the entire civil works or a complete package or a complete schedule) as instructed in the bidding documents and where failure to do so has been indicated as unacceptable; (b) failure to quote for a major item in the package; (c) failure to meet major technical requirements (e.g., offering completely different types of equipment or materials from the types specified, plant capacity well below the minimum specified, equipment not able to perform the basic functions for which it is intended, etc). (d) presentation of absolutely unrealistic and inadequate implementation plans and schedules regarding performance, technical or service factors (refer to 7) Adjustment, 4. Detailed Examination of Bids for examples of performance, technical or services factors.). If alternative bids are acceptable, the bidding documents shall specify the conditions governing such bids. The methodology of Section III Bid Evaluation Guide 19 bid evaluation and comparison for alternative bids should be specified clearly in the bidding documents and these alternative bids should be included in the bid evaluation and evaluated as specified in the bidding documents. Where bidding documents are silent in respect of the alternative bids, often, some bidders submit alternative bids in addition to their main bids. In such a case, bid evaluation should be among main bids only to determine the lowest evaluated bidder. If the alternative bid of the lowest evaluated bidder is considered more advantageous than its main bid, such an alternative bid may be accepted. Bids that offer deviations may be considered substantially responsive if the deviations, which are classified as minor deviations, would be acceptable in the eventual contract. The nature of such deviations varies from contract to contract and depends on the specific requirements, materials or civil works. Minor deviations that will affect the cost should be expressed in monetary terms and added to the evaluated bid price during detailed examination. Other minor deviations that will not have any effect on price or quality of the goods, civil works and other services offered may be accepted for evaluation purposes without price adjustments. The results of preliminary examination, including substantial responsiveness, should be presented in Annex II, Table 5. For a bid failed in the preliminary examination including substantial responsiveness, the reasons must be clearly explained in footnotes or in an attachment, as necessary. An example is shown in Annex II-2. The Borrower may find it useful to include additional tables for itemization of responsiveness to a list of technical or commercial specifications. These should be attached to Annex II, Table 5. Section III Bid Evaluation Guide 20 Box 3 Determination of Number of Bids for Detailed Evaluation After determination of the substantially responsive bids and the nonresponsive bids, a decision must be made as to how many of the remaining substantially responsive bids should be further evaluated in detail to determine the lowest evaluated bid. An examination of the number of bids remaining valid and the spread of bid prices may help determine the course of action. Where, for example, a fairly large number of substantially responsive bids remain and some of the bid prices are clustered around the lowest, the lower priced bids in the cluster, irrespective of the number, should be further evaluated. Where there is no cluster of lower priced bids, experience shows that detailed evaluation of the three lowest priced substantially responsive bids is generally adequate. The governing principle is that no bid should be excluded from further detailed evaluation if there exists a possibility that, as a result of various financial adjustments, it could become the lowest evaluated bid. Therefore, detailed evaluation should include all substantially responsive bids, which have a reasonable chance of becoming the lowest evaluated bid. 4. Detailed Examination of Bids Only those bids surviving preliminary examination and determined to be substantially responsive need to be examined in this phase. 1) Corrections for Any arithmetic errors must be rectified, as being described in the Errors ITB. The read-out bid prices and their corrections should be noted in Annex II, Table 6, column (d). The corrections are considered binding on the bidder. Unusual or large corrections that could affect the comparative ranking of bids should be explained in footnotes. 2) Corrections for Bids may contain provisional sums set by the Borrower for Provisional contingencies or for nominated subcontractors, etc. As these Sums sums are the same for all bids, they should be subtracted from the read-out prices in Annex II, Table 6, column (e) to allow for a proper comparison of bids in subsequent steps. However, those Section III Bid Evaluation Guide 21 provisional sums set aside for Daywork, 3 where priced competitively, should not be included in the deductions. 3) Modifications In accordance with the ITB, bidders are allowed to submit, prior to and Discounts bid opening, modifications to their original bid. The impact of modifications should be fully reflected in the examination and evaluation of the bids. These modifications may include either increases or discounts to the bid amounts that reflect last-minute business decisions. Accordingly, the original bid prices should be modified at this point in the evaluation. Discounts offered in accordance with the ITB that are conditional on the simultaneous award of other contracts or lots of the contract package (cross- discounts) shall not be incorporated until the completion of all other evaluation steps. The effect of unconditional discounts (or alternatively, increases) should be shown as in Annex II, Table 6 column (g) and (h). Any discount expressed in percent must be applied to the appropriate base specified in the bid (i.e., check to see if it applies to any provisional sums). 4) Currency The remaining bids as corrected for arithmetic errors and as Conversion adjusted for discounts shall be converted to a single currency selected by the Borrower and stated in ITB. The exchange rates to be used in the calculations must be specified in ITB and are to be listed in Annex II, Table 7. The conversion to a single currency should be shown in Annex II, Table 8. (Procurement Guidelines, Section 4.10 ) 5) Additions and (a) Additions Analysis of Prices Omissions to the bid should be compensated for by adding the estimated costs for remedying the deficiency. Where items missing in some bids are present in others, an average of quoted prices could be used to compare competitors’ bids. Alternatively, external sources, such as published price lists, freight tariff schedules, etc., may be appropriate. The cost determined should be expressed in the evaluation currency and shown in Annex II, Table 9, column (c). However, under civil works contracts, missing prices for occasional work items are considered to be included in prices for closely related items elsewhere. 3 Refers to unforeseen work. For details, see SBD (Civil Works). Section III Bid Evaluation Guide 22 (b) Analysis of Prices Analysis of unit rates and prices provided by bidders, which are generally components of the Bill of Quantities for civil work contracts, is carried out to verify that the rates and/or prices are not seriously unbalanced4 in relation to or substantially below the cost estimate. After evaluation of the price analyses, the Borrower may require that the amount of the performance security be increased at the expense of the successful bidder to a level sufficient to protect the Borrower against financial loss in the event of default of the contractor. 6) Priced As discussed under Determination of Substantial Responsiveness, Deviations bids with minor deviations may be considered substantially responsive if their further consideration assigns a monetary cost or penalty to the bid for the purpose of bid comparison, as described in the followings: (i) Requests for deviations that are expressed by the bidder in vague terms, such as ―we would like an increase in the amount of mobilization advance‖ or ―we wish to discuss changes in the completion schedule‖ should ordinarily be ignored in bid evaluation. However, a categorical statement by the bidders taking exception to a requirement in the bidding documents should be treated as a deviation; (ii) If a bid requires a faster payment stream than specified in the bidding documents, the penalty is based on the prospective benefit to the bidder. This situation assumes use of a discounted cash flow using the prevailing commercial interest rates for the currencies of the bid, unless the ITB foresees the eventuality and specifies a rate; (iii) If a bid provides for a delivery or completion that is beyond the date specified in the bidding documents but that is nonetheless technically acceptable to the Borrower, the time advantage given should be assessed a penalty specified in the 4 An ―unbalanced‖ or ―frontloaded‖ bid is one in which some prices are relatively high and others low in relation to the Engineer’s estimate of the cost of work to be performed. The imbalance may be due to error or misconception by the bidder, but more often it is due to the bidder’s attempt to increase its cash flow over the early part of the contract, or to increase profits by inflating the unit rates of the items which it feels will be used more than scheduled. Section III Bid Evaluation Guide 23 ITB or, if one is not provided, based on the rate of liquidated damages specified in the bidding documents. The deviations should be priced in the evaluation currency in Annex II, Table 9, column (d). 7) Adjustments The bid evaluation may take into account of performance, technical or service factors. The Borrower shall examine plans and schedules of these factors to determine whether they are acceptable or not. These factors shall comprehensively be well arranged for smooth and prompt project implementation. For example: For plant and equipment contract (see SBD (Plant), ITB 25.3); - Time schedule (program of performance) - Operating and maintenance costs - Functional Guarantee of the facilities - Work, services, facilities, etc., to be provided by the Borrower For goods contract; - Delivery Schedule - Operating Costs - Functional Guarantee of Goods - Local Handling and Transportation In case some factors can be converted to monetary terms, the methodology used in evaluation of these factors should be precisely described in the bid evaluation report and should be fully consistent with the ITB provisions. Bonuses and additional credits that reduce the evaluated bid price will not be given in the bid evaluation for features that exceed the requirements stated in the bidding documents, unless specifically provided for in the ITB. The value of adjustments will be expressed in terms of cost, for all works, plant and equipment and most goods contracts, and should be shown in Annex II, Table 9, column (e) and expressed in the evaluation currency. 8) Domestic Some Borrowers wish to employ the so-called Preferential Margin / Preference Domestic Preference measures (to give preference to domestic companies in the Borrower’s country, a certain percentage for customs duties and so on is added to bid prices by foreign companies so that domestic companies are awarded the contract), when comparing bids, with a view to promoting (or giving preference to) domestic businesses, but this is not permitted by JBIC. Furthermore, it is not permitted to take indirect preferential measures favouring domestic Section III Bid Evaluation Guide 24 businesses, where, for example, more than a certain ratio of domestic production or specification of a domestic production ratio is required in the bidding. Box 4 Evaluation for Construction Methods, Implementation Schedule, Manpower and Equipment Allocation Inexperienced contractors tend to propose unrealistic construction method, schedule, and manpower and equipment allocation, due to lack of understanding for the required construction contents. The evaluation of those subjects is often difficult to be based on quantitative figures, but can be done on qualitative basis. However, such contractors often make irresponsible positive answer, in order to win the contract, even if the Borrower requests a clarification. It is obvious that the results of employing such contractors often end up in delay of construction and increase in the contract amount. A careful consideration is required in evaluating construction method, schedule and manpower/equipment allocation. It would be also effective to refer to the past construction performance of the contractor in question, in case of difficulty in judging its capability. Section III Bid Evaluation Guide 25 Box 5 Use of Merit Point System for Bid Evaluation Recently, there are some cases where Borrowers apply so-called ―Merit Point System‖ in bid evaluation, following relevant procurement practice of the Borrower’s country. The evaluation score under this system is a combined sum of technical and price evaluation by a given weight percentage for each part, e.g., 50% for technical and 50% for price, or 30% and 70%. The problem of this system is difficulty in making fair evaluation on technical part, since the methodology is not yet established to secure impartiality and objectivity. For procurement of goods and services, the technical part of evaluation should be by pass- or-fail method, where the purchaser must be on principle to clearly indicate the required technical specifications to bidders. The bidders are expected to offer the lowest price while satisfying the technical requirement given by the bidding documents. Under the Merit Point System, it seems there exists an ambiguity, for the technical requirement, and method of technical evaluation thus tends to be unclear and unfair to bidders. Furthermore, there is no established rule for the allocation of weights to price and non- price factors. Thus, JBIC considers that the Merit Point System is not desirable to be applied for bid evaluation under JBIC ODA Loans. 5. Determination of Award In the comparison of bids for most contracts procuring goods and services, except for consulting services, the corrected and discounted bid prices, together with adjustments for omissions, deviations, and specified evaluation factors, have been noted in Annex II, Table 9. The bidder with the lowest total is the lowest evaluated cost bidder at this stage, subject to: Application of any discounts, contingent on the simultaneous award of multiple contracts or lots; and Postqualification evaluation, or, if prequalification has occurred, confirmation of prequalification information. 1) Cross-Discounts These are conditional discounts offered in the event that more than one contract or lot will be awarded to the same bidder. Bid evaluation in such cases can be quite complicated. The sizes of cross-discounts offered by each bidder may vary with the potential number of contracts awarded. The ITB may also limit Section III Bid Evaluation Guide 26 the number or total value of awards to a bidder on the basis of its financial and technical capacity. 5 Thus, a bidder offering the lowest evaluated bid on a particular contract may be denied award because of such a restriction. The Borrower shall select the optimum combination of awards on the basis of least overall cost of the total contract package, consistent with the qualification criteria. Presentations of the calculations should be made on an attachment to the report, which should include the bid evaluation(s) for the other contracts, if they have been evaluated separately. 2) Qualification If prequalification was conducted, the bidder whose bid is the lowest evaluated should receive the award, unless the bidder’s qualifications have since materially deteriorated or the bidder has since received additional work that overstresses its capacity. The Borrower should satisfy itself fully on both accounts. The Borrower is recommended to request bidders to update information concerned as necessary. Where prequalification has not occurred, the prospective awardee should be subjected to postqualification, the procedures for which are described in the ITB in accordance with Procurement Guidelines (Section 5.07).6 If the lowest evaluated bidder fails in postqualification examination, its bid should be rejected, and the next ranked bidder should then be subject to postqualification examination. If successful, this bidder should receive the award, otherwise the process continues. The rejection of a bid for reasons of qualification requires substantial justification, which should be clearly documented in attachments to the report. A history of poor performance may be considered as a substantial justification. 3) Alternative Bids The ITB may request or allow the Borrower to accept alternative bids under the stipulation that only the alternative submitted by the lowest evaluated bidder and conforming to the bidding documents will be considered. 5 This restriction may originate with prequalification. 6 SPD provides useful information for postqualification evaluations. Section III Bid Evaluation Guide 27 Calculations for the evaluation of alternatives should be provided in an attachment to the report. 4) Proposed Award The amount of the proposed award shall be the bid price as submitted by the winning bidder and adjusted as described in the ITB for corrections, any discounts (including cross-discounts), and acceptance by the Borrower of alternative offers from the lowest evaluated bidder. Adjustments to the final price and scope of the contract to correct for acceptable omissions and quantity variations in the bid may be negotiated with the lowest evaluated bidder. Prior concurrence of JBIC with the proposed award is required before such negotiations may be started. Annex II, Table 10 should be filled out to establish the actual amount of the contract award. The Borrower may consider rejection of all bids, with prior concurrence by JBIC, if (a) none of the bids are found to be responsive, (b) bids are unreasonably high in price compared with earlier estimates, or (c) none of the bidders are qualified. (Procurement Guidelines, Section 5.10) 5) Report (i) Prior Review: The Borrower, if required in the Loan Agreement, Submission must submit the completed bid evaluation report containing the required summary to JBIC as soon as possible after the bid evaluation, preferably no later than one (1) month prior to the expiration of the bid validity period. The report should include the appropriate items listed in Annex II. The Borrower is encouraged to communicate as needed with JBIC about the evaluation of bids. However, JBIC will not participate in the evaluation itself. (ii) Other Instances: For bid evaluation reports not subject to prior review, the Borrower may award the contract upon completion of bid. Subsequent submission of the bid evaluation report to JBIC may be required after award, in order to review its compliance with Procurement Guidelines. The Borrower is advised to prepare the bid evaluation report in the same manner as they do when prior review is required. Section III Bid Evaluation Guide 28 6) Review of Bid Upon receipt by JBIC, all bid evaluations subject to prior review Evaluation will be reviewed. The Borrower may be requested to provide by JBIC additional information and justification for the proposed contract award. The Borrower also may be requested to contact bidders for necessary clarifications. When JBIC is satisfied with the evaluation of bids and the proposed award, a written notice of ―concurrence‖ will be issued by the JBIC official designated for such correspondence. For bid evaluation not subject to prior review, any doubts about the justification for award should be raised with JBIC prior to award signing. The Borrower should ensure that all correspondence received from bidders concerning evaluation has been taken into account. 7) Award of Promptly after executing a contract, the Borrower, if required in Contract the Loan Agreement, must submit to JBIC a duly certified copy of and the contract for JBIC’s review and concurrence. When JBIC Review of determines the contract to be consistent with the Loan Agreement, Contract a written notice of ―concurrence‖ will be issued by the JBIC by JBIC official designated for such correspondence. JBIC reserves the right to reject to finance contracts that have not been procured in accordance with the Loan Agreement.7 Bid securities of unsuccessful bidders should be returned promptly after award has been made. However, if contract effectiveness is contingent on the receipt of a performance security or other condition, the Borrower may consider seeking an appropriate extension of time for the bid validity and the accompanying bid security of other bidders. As mentioned in the Preface, JBIC is authorized to publish a description of the contract, the names and nationalities of the bidders, the bid prices, the name and nationality of the contract awardee and the contract price. Any further information on the bids or on their evaluation, including the bid evaluation report, is held in confidence by JBIC. In anticipation of any post reviews by JBIC, the Borrower should ensure that bidding and evaluation documents are to be securely stored. 7 If funds from the loan have already been disbursed, it must be reimbursed. Refer to Procurement Guidelines, Section 1.05. 29 Annex I. Prequalification Evaluation Report Sample Forms 30 Prequalification Evaluation Report Name of Project: Loan No.: Contract Name: Identification Number: Date of Submission to JBIC: 31 Introduction 1. This Annex is intended specifically to assist in reporting the results of the evaluation of the applications for prequalification. The Borrower should evaluate the applications received and prepare a detailed analysis of them. A summary report of this analysis should be submitted to JBIC for review; the summary should address each of the pass-fail criteria set in the prequalification documents. Disqualification of the Applicants who fail to meet the criteria should be explained. 2. Tables 1-5 should invariably accompany the summary, but they may be adapted to suit specific requirements of the prequalification documents. The summary should include a number of attachments and additional tables to explain details of the individual evaluation of Applicants who were not prequalified. References to pertinent clauses in the prequalification documents should be uses as necessary. 3. The summary should make special mention of Joint Venture Applicants in regard to the completeness of their documentation, eligibility requirements including sharing provision and liability of the JV partners. 4. In case the prequalification evaluation includes ―slice and package‖ requirements (refer to How to Use This Guide 5.), the summary should mention the procedure used in the evaluation and show the aggregate total of contract value for which Applicants are considered prequalified by the Borrower. 5. A checklist for the evaluation summary is presented in Annex I-1. 32 SAMPLE TABLE OF CONTENTS SUMMARY 1. INTRODUCTION 1.1 Prequalification Identification and Prequalification Evaluation Committee 1.2 Prequalification Process 2. PRELIMINARY EXAMINATION 2.1 Prequalification Documents 2.2 Verification 2.2.1 Authorized Sign 2.2.2 Power of Attorney for Authorized Person 2.2.3 Joint Venture Agreements 2.3 Completeness of Application 2.4 Eligibility 3. QUALIFICATION EVALUATION 3.1 General Experience 3.1.1 Annual Turnover 3.1.2 Successful Project Experience of Similar Nature and Complexity a) Annual Production Rate for the Key Construction Activity b) Project Experience in the Country Concerned and in Similar Countries 3.2 Personnel Capabilities 3.2.1 Experience of Prime Candidate and Alternative for Key Management and Specialist Positions 3.3 Equipment Capabilities 3.3.1 Type, Characteristics, Minimum Number and Availability of Key Equipment 3.4 Financial Position 3.4.1 Cash Flow Capacity 3.4.2 Soundness of Financial Position 3.5 Litigation History 3.5.1 Accurate Information on Any Litigation or Arbitration Resulting From Contracts Completed or Under Execution 4. PROPOSED PREQUALIFICATION DECISION 5. CONCLUSIONS 33 APPENDICES Table 1 Identification Table 2 Prequalification Process Table 3 Preliminary Pass-Fail Examination of Applicants Table 4 Qualification Evaluation Summary (Pass-Fail Criteria) Table 5 Proposed Prequalification Decision 34 SAMPLE FORMS Table 1. Identification 1.1 Name of Borrower 1.2 Loan Agreement (L/A) number 1.3 Date of effectiveness of L/A 1.4 Closing date of Application Submission (a) original (b) revised 1.5 Name of project 1.6 Executing Agency (or other organization responsible for purchase or employment) (a) name (b) address 1.7 Contract number (identification) 1.8 Contract type Lump-sum Unit-price Other 1.9 Contract description 1.10 Method of procurement (check one) ICB LIB Other 1.11 Fixed price contract Yes No 1.12 Cofinancing for the Contract, if any: (a) agency name (b) percent financed by agency 1.13 Bidding Procedures Single-Stage: One-Envelope Single-Stage: Two-Envelope Two-Stage 35 Table 2. Prequalification Process 2.1 Invitation for prequalification (a) first issue date (b) latest update (c) name of newspaper (d) date of copy sent to JBIC 2.2 Prequalification Document (a) title, publication date (b) date of JBIC’s concurrence, if necessary (c) date of issue to Applicants 2.3 Number of firms issued documents 2.4 Amendments to documents (if any) (a) list all issue dates 1. 2. 3. (b) date(s) of JBIC’s concurrence 1. 2. 3. 2.5 Applicants’ submission deadline (a) original date, time (b) extensions, if any 2.6 Number of applications submitted 36 Table 3. Preliminary Pass-Fail Examination of Applicant Name of Country1 Date of Completeness2, Eligibility4 JV Explanation6 Applicant Submission of Verification3 of Requirements5 Application Documentation 1. Place of incorporation and place of registration (for firms). 2. Completeness of documentation: Are the applications offering all of the items and essential information requested? Major deviations to the requirements such as no presentation of financial statements or balance sheets, or failure to present sufficient information on financial means to meet the specified cash requirements may be a basis for a ―fail‖ mark. 3. Verification: Attention should be directed toward deficiencies related to the validity of the application itself. For example: Is the letter properly signed? Are the applications of Joint Ventures signed by each partner in the joint venture? Has a copy of the JVA or Letter of Intent been signed by all JV partners and submitted with the application? 4. Eligibility: In addition to the eligibility of nationals from eligible source country as stipulated in the Loan Agreement, Applicants shall be eligible to participate in the bidding of the works in reference to the ―Fraud and Corruption‖ policy of JBIC. (See ITA 1.2 for details.) 5. JV requirements: Is the lead partner of the JV clearly identified and properly authorized? Are the JV’s sharing provisions in compliance with the minimum participation specified in ITA 5.1? Are all partners in the JV legally liable, jointly and severally, during bidding and execution of the contract? 6. If the application fails preliminary acceptance in one of the column topics, the reasons shall be clearly explained in this Explanation column or in an attachment, as necessary. 37 Table 4. Qualification Evaluation Summary (Pass-Fail Criteria) Qualification Topic Specified Criteria Application Explanations (as stated in ITA) 1 2 etc. General Experience Annual Turnover - ITA 4.3(a): * As prime contractor over the Average annual last years turnover * Minimum average turnover Amount US$ equivalent. US$ Successful Project Experience - ITA 4.3(b): * As prime contractor within Successful project the last years experience of similar * Experience includes nature and complexity execution of * Minimum annual production rate for the key construction activity (if applicable) * Project experience in the country concerned and in similar countries as required (if applicable) * Required number of projects Number Personnel Capabilities - ITA 4.4: * Position 1: Experience of prime - Required number of years Years candidate and of work experience alternative for key - Required number of years Years management and of similar work experience special positions etc. * Position 2: - Required number of years Years of work experience - Required number of years Years of similar work experience etc. Equipment Capabilities - ITA 4.5: Type, characteristics, Ownership of minimum number and equipment or the ability availability of key equipment to hire or lease required equipment needed to Minimum perform the works Type Number 1 Number 2 Number etc. 38 Table 4. Qualification Evaluation Summary (Pass-Fail Criteria) (cont’d) Qualification Topic Specified Criteria Application Explanations (as stated in ITA) 1 2 etc. Financial Position - ITA 4.6 * Construction cash flow for a Cash flow capacity period of months * Minimum required amount Amount US$ equivalent US$ - ITA 4.7 Sound financial statements for Pass-Fail Soundness of financial the last years position Litigation History - ITA 4.8 Accurate information on any Pass-Fail History of litigation or litigation or arbitration arbitration resulting from contracts completed or under execution over the last years Subcontracting - ITA 4.2 Required highly specialized Pass-Fail Specialist inputs (essential for execution subcontractors (if any) of the contract) 1. If the Applicant fails a specific criterion or if ―pass‖ has been given, accepting a minor deviation (ITA 4.1), the reasons shall be clearly explained in the Explanation column or in a separate attachment, as necessary. 39 Table 5. Proposed Prequalification Decision 1. Prequalified Applicants i) ii) iii) etc. 2. Rejected Applicants Reasons for rejection Applicant’s name i) ii) iii) etc. 40 Annex I-1. Prequalification Evaluation Summary Checklist 1. Attach Identification and Prequalification Process data (Tables 1, 2). 2. Provide a list of Applicants and place of incorporation and registration as well as the date of submission of their applications (first three columns of Table 3). 3. Provide details on eliminating any applications during preliminary examination (Table 3). Particular attention should be given to issues related to eligibility and JV requirements. 4. Attach copies of any letters to Applicants requesting clarifications or substantiation of information. Provide copy of responses. 5. Provide explanations for giving a ―fail‖ mark to an Applicant in any of the specified criteria (Table 4). If necessary, include a separate attachment with explanations. 6. Provide detailed reasons for rejecting an Applicant (Table 5). 41 Annex II. Bid Evaluation Report Sample Forms 42 Bid Evaluation Report and Recommendation for Award of Contract Name of Project: Loan No.: Contract Name: Identification Number: Date of Submission to JBIC: 43 Request for Review and Concurrence by JBIC If the contract is subject to prior review, the bid evaluation report should be attached with a letter of Request for Review and Concurrence by JBIC, in accordance with the form specified in the relevant Loan Agreement, if any, from the Borrower ministry, department, or agency responsible for communications with JBIC. The letter should highlight conclusions and offer any additional information that would help to expedite review by JBIC. In addition, any unresolved or potentially contentious issues should be highlighted. The letter should be sent to the responsible official of JBIC specified in the Loan Agreement. 44 SAMPLE TABLE OF CONTENTS SUMMARY 1. INTRODUCTION 1.1 Bid Identification and Bid Evaluation Committee 1.2 Bid Process 1.3 Bid Submission and Opening 2. PRELIMINARY EXAMINATION OF BIDS 2.1 Bid Documents 2.2 Verification 2.2.1 Authorized Sign 2.2.2 Power of Attorney for Authorized Person 2.2.3 Joint Venture Agreements 2.2.4 Qualification Information 2.3 Eligibility 2.4 Bid Security 2.5 Completeness of Bid 3. DETERMINATION OF SUBSTANTIAL RESPONSIVENESS 3.1 Substantial Responsiveness to Commercial Terms and Conditions 3.1.1 Authorized Sign to Bid Form and Price Schedules 3.1.2 Eligibility 3.1.3 Bid Security 3.1.4 Bid Validity 3.1.5 Time for Completion 3.1.6 Conditionality 3.1.7 Price Adjustment Formulae 3.1.8 Others 3.2 Substantial Responsiveness to Technical Requirements 3.2.1 Scope of Work 3.2.2 Quotation for Items in Package 3.2.3 Technical Requirements 3.2.4 Plans and Schedules of Performance, Technical or Service Factors [Example for Civil works] a) Construction Time Schedule and Sequence of Construction Activities b) Construction Method (Site Organization, Key Field Personnel, Construction Facilities) c) Quality Control System d) Labour and Materials (Subcontracting, Cash Flow) e) Safety Measures 45 3.2.5 Alternative Offers 3.2.6 Minor Deviations 4. DETAILED EXAMINATION OF BIDS 4.1 Corrections for Errors 4.2 Corrections for Provisional Sums 4.3 Modifications and Discounts 4.4 Currency Conversion 4.5 Additions and Analysis of Prices 4.5.1 Additions a) Omissions b) Missing Items in Bill of Quantities 4.5.2 Analysis of Prices: Examination of Unbalanced Prices 4.6 Priced Deviations 4.6.1 Categorical Statements by Bidders 4.6.2 Terms of Payment 4.6.3 Time for Completion 4.7 Adjustments 5. DETERMINATION OF AWARD 5.1 Cross-Discounts 5.2 Qualification 5.3 Alternative Bids 5.4 Proposed Award 6. CONCLUSIONS APPENDICES Table 1 Identification Table 2 Bidding Process Table 3 Bid Submission and Opening Table 4 Bid Prices (as Read Out) Table 5 Preliminary Examination Table 6 Corrections and Unconditional Discounts Table 7 Exchange Rates Table 8 Currency Conversion Table 9 Additions, Adjustments, and Priced Deviations Table 10 Proposed Contract Award 46 SAMPLE FORMS Table 1. Identification 1.1 Name of Borrower 1.2 Loan Agreement (L/A) number 1.3 Date of effectiveness of L/A 1.4 Closing date of Bid Submission (a) original (b) revised 1.5 Name of project 1.6 Executing Agency (or other organization responsible for purchase or employment) (a) name (b) address 1.7 Contract number (identification) 1.8 Contract type Lump-sum Unit-price Other 1.9 Contract description 1.10 Method of procurement (check one) ICB LIB Other 1.11 Fixed price contract Yes No 1.12 Cofinancing for the Contract, if any: (a) agency name (b) percent financed by agency 1.13 Bidding Procedures Single-Stage: One-Envelope Single-Stage: Two-Envelope Two-Stage 47 Table 2. Bidding Process 2.1 Invitation for Bids (a) first issue date (b) latest update (c) name of newspaper (d) date of copy sent to JBIC 2.2 Prequalification (if required) (a) number of firms prequalified (b) date of JBIC’s concurrence to evaluation result8 2.3 Bidding Document (a) title, publication date (b) date of JBIC’s concurrence, if necessary (c) date of issue to bidders 2.4 Number of firms issued documents 2.5 Amendments to documents (if any) (a) list all issue dates 1. 2. 3. (b) date(s) of JBIC’s concurrence 1. 2. 3. 2.6 Date of pre-bid conference (if any) 8 Cite the date for amendment and JBIC’s concurrence, if any. 48 Table 3. Bid Submission and Opening 3.1 Bid submission deadline (a) original date, time (b) extensions, if any 3.2 Bid opening date, time 3.3 Record of bid opening, date sent to JBIC 3.4 Number of bids submitted 3.5 Bid validity period (days or weeks) (a) originally specified (b) extensions, if any Note: Contracts under one-stage: two-envelope bidding and two-stage bidding will require the information requested for each stage to be filled out. 49 Table 4. Bid Prices (as Read Out) Bidder Identification Read-out Bid Price(s) Bid Security Modifications Name of Signature Amount or Comments1 Representative Name of City/State or Country Currency(ies) Amount(s) Bidder Province (a) (b) (c) (d) (e) (f) (g) (h) (i) etc. 1 Describe any modifications to the read-out bid, such as discounts offered, withdrawals, and alternative bids. Note also the absence of any required bid security or other critical items. Refer also to Section III, para. 1 herein. 50 Table 5. Preliminary Examination Bidder Verification1 Eligibility Bid Security Completeness Substantial Acceptance for of Bid Responsiveness Detailed Examination (a) (b) (c) (d) (e) (f) (g) etc. Note: For explanations of headings, see Section III, para. 2 herein. Additional columns may be needed, such as for responsiveness to technical conditions. See example in Annex II-2. 1 Verification: The points to be covered by verification are (i) whether bid documents have been properly signed or not; (ii) whether power of attorney for the authorized person has been submitted or not; (iii) whether joint venture agreements, if required, are submitted or not; (iv) whether documents, required to assess the post qualification of a bidder with respect to its financial and technical capability to undertake the contract, have been provided or not. 51 Table 6. Corrections and Unconditional Discounts Bidder Read-out Bid Price(s) Corrections Corrected Bid Unconditional Corrected/Discounted Price(s) Discounts2 Bid Price(s) Currency(ies) Amount(s) Computational Provisional Percent Amount(s) Errors1 Sums (a) (b) (c) (d) (e) (f) = (c) + (d) - (e) (g) (h) (i) = (f) – (h) etc. Note: Only bids accepted for preliminary examination (Table 5, column g) should be included in this and subsequent tables. Columns a, b, and c are from Table 4 (columns a, d, and e, respectively). 1 Corrections in column d may be positive or negative. 2 If the discount is offered as a percent, column h is normally the product of the amounts in columns f and g. Refer to Section III para. 4-3). If the discount is provided as an amount, it is entered directly in column h. A price increase is a negative discount. 52 Table 7. Exchange Rates Currency Used for Bid Evaluation: Effective Date of Exchange Rate: Authority or Publication Specified for Exchange Rate: Note: Attach copy of exchange rates provided by specified authority or publication. 53 Table 8. Currency Conversion Specify Evaluation Currency: Bidder Currency(ies) of Bid Corrected/Discounted Applicable Evaluation Currency Bid Price(s) Exchange Rate(s) Bid Price(s) Total Bid Price (a) (b) (c) (d) (e) = (c) x (d) (f) etc. 54 Table 9. Additions, Adjustments, and Priced Deviations Specify Evaluation Currency: Bidder Corrected/Discounted Additions2 Priced Deviations2 Adjustments2 Total Price Bid Price1 (a) (b) (c) (d) (e) (f) = (b) + (c) + (d) + (e) etc. 1 Column b is from either Table 8, column f. 2 Each insertion in columns c, d, or e should be footnoted and explained in adequate detail, accompanied by calculations. Refer to paras. 4-5), 4-6), and 4-7) respectively of Section III. 55 Table 10. Proposed Contract Award 1. Lowest evaluated responsive bidder (proposed for contract award). (a) name (b) address 2. If bid from joint venture, list all partners, nationalities, and estimated shares of contract. 3. Principle country(ies) of origin of goods/materials. 4. Estimated date (month, year) of contract signing. 5. Estimated delivery to project site/completion period. Currency(ies) Amount(s) 1 6. Bid Price(s) (Read-out) 7. Corrections for Errors2 8. Discounts3 9. Other Adjustments4 10. Proposed Award5 11. Disbursement Category6 1 From Table 6, columns b and c. 2 From Table 6, column d. 3 From Table 6, column h. Include any cross-discounts. See Section III, para. 5-1). 4 All adjustments should be explained in detail. 5 Sum of the prices in Items 6–9. 6 From the Loan Agreement. 56 Annex II-1. Bid Opening Checklist (To be filled out for each bid as it is read out) Contract Reference: Bid Opening Date: Time: Name of Bidder: (a) Is outer envelope of bid sealed? (b) Is bid form completed and signed? (c) Expiration date of bid: (d) Is documentary authority for signing enclosed? (e) Amount of bid security (if required): (state currency) (f) Describe any ―Withdrawal‖ or ―Modification‖ submitted (g) Describe any alternative bid made: (h) Describe any discounts or modifications offered: (i) Additional comments:9 (j) Name of bidder or representative present: (k) Total bid price: (list currencies and amounts or percentages)10 Signature of responsible official: Date: 9 Read out and record model numbers of equipment. 10 If bid is for a package of contracts, the price for each lot or item should be read out. 57 Annex II-2. Preliminary Examination Bidder Verification Eligibility Bid Security Completeness Substantial Acceptance for of Bid Responsiveness Detailed Examination Bidder A Yes Yes Yes Yes Yes Yes Bidder B No1 Yes Yes Yes Yes No Bidder C Yes Yes Yes Yes Yes Yes Bidder D Yes Yes No2 No3 Yes No Bidder E Yes No No4 Yes Yes No Bidder F Yes Yes Yes Yes Yes Yes Bidder G Yes Yes Yes Yes Yes Yes Bidder H Yes Yes Yes Yes Yes Yes 1 Joint venture agreement missing. 2 Bid security not in freely convertible currency. 3 Does not include cost for required disposal of hazardous wastes found at the site. 4 Required validity period of security not met (8 weeks instead of 12 weeks). 58 Annex II-3. Bid Evaluation Summary Checklist 1. Attach bid opening record, if not previously submitted (Section III, para. 1, 2). 2. Explain any inconsistencies between prices and modifications to prices read out at bid opening (and written into the record) and presented in Table 4. 3. Provide details on eliminating any bids during preliminary examination (Table 5). Copy select pages from bids, as desirable, to show examples of objectionable features. 4. If provisional sums in Table 6 vary among bidders, explain. Explain any substantial corrections for computational errors that may affect the ranking of bidders. 5. Provide a copy of the rates requested for Table 7 and used in Table 8. 6. The additions, adjustments, and priced deviations in Table 9 require detailed explanations where they may affect the ranking of bidders. 7. Explain any cross-discount (Section III, para. 5.1)) not read out and recorded at bid opening. In addition, attach copies of any evaluation reports for the other related contracts awarded to the same bidder. 8. Provide detailed reasons for refusing to award a contract to a party other than the lowest evaluated bidder (Section III, para. 5. 2)). 9. If an alternative bid is accepted, provide a detailed explanation of the reasons for its acceptance, addressing issues of timeliness, performance, and cost implications (Section III, para. 5. 3)). 10. An attachment to Table 10 should explain adjustments to the price provided on line 9, ―the Adjustment‖. Explain any changes to scope of bid and contract conditions. 11. Attach copies of any letters to bidders requesting clarifications. Provide copies of responses. 12. Submit bid evaluation with separate evaluation report from the consultant, if one was commissioned. 59 13. Ensure that the bid evaluation report is double-checked, paginated, and complete, and includes a letter of Request for Review and Concurrency by JBIC. JBIC will only review reports that are sent to it by the proper authorities. 14. Send by courier or by other swift means.