10.

TENDER PROCEDURE

S.Suresh
Senior Manager/ STC

The following Act and Regulations are to be kept handy when dealing with a tender process.

1. TNEB Regulations – 1991 and its amendments.

2. Tamil Nadu Transparency in Tender Act,1998 with T.N Transparency in Tender Rules,2000
3. Directions from the Full Board Meeting and BLTC Meeting.

The main activities in a tender process are:

 Preparation of Specification
 Inviting & opening a tender
 Scrutinizing the Tender
 Price bid opening after getting approval
 Evaluation of the Tender
 Placement of orders after getting approval
Preparation of specification
The process of preparation of a specification involves the following
- EMD to be fixed as per the rule
- BQR be defined such that it invites more bidders to the tender
- Existing commercial terms and conditions
- The technical terms to be defined to the latest technical developments
Earnest Money Deposit
The Earnest Money Deposit should be fixed not more than 1% of the Tender value.
Exemption from EMD
For exemption from paying the EMD the following conditions to be fulfilled.
1. For SSI Firms, Copy of Memorandum I & II should be furnished in the EMD Cover for the
SSI Firms within Tamilnadu limits, in which the Tendered Material with same rating or higher
rating should be mentioned in the Memorandum II.
2. For SSI firms of other States, Copy of Valid NSIC Certificate should be furnished in the
EMD Cover, in which the Tendered Material with same rating or higher rating should be
mentioned.
3. Their Plant & Machinery should be within Rs.5 Crores. Document regarding this should be
furnished. i.e. one of the schedule in the Balance Sheet.
4. In addition to the above, an undertaking in-lieu of EMD amount should be furnished in
Rs.80/- bond paper. ( All sheets should be duly signed by the authorized person)
Exemption from EMD for Non SSI Firms:
Other than SSI firms EMD is mandatory. However the firms can pay Permanent EMD once and claim
for exemption from paying the EMD subject to the following conditions. For claiming exemption from
paying EMD in case of non SSI firms a copy of Permanent EMD holder order should be furnished in the
EMD Cover.
The value of PEMD and the corresponding eligibility tender values:
EMD for Rs.10 Lakhs – Eligible to participate in the tenders of value upto 10 Crores.
For Rs.20 Lakhs - Eligible to participate in the tenders of value upto 50 Crores.
For Rs.50 Lakhs - Eligible to participate in the tenders of value above 50 Crores.
(Separate payment of PEMD is required for participating in TANGEDCO Tenders and TANTRANSCO
Tenders)

Things to be done when opening of Tender:

The opening authorities i.e. one Engineer and one Accounts personnel should sign in the Tender cover,
before opening. The opening authorities should sign in the EMD cover, before opening and should also

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 sign in the Price Bid cover before opening in the case of Single Part tender and in case of Two part
tender should sign with received on date dd/mm/yyyy and should be kept in safe custody.
After opening of EMD cover the opening authorities should sign (initials) in all the EMD documents
before reading out.

Bid Qualification Requirements:

In TNEB the pre-qualification requirement for participating in a tender is referred as BQR ie. Bid
Qualification Requirement.
All tender specifications should have BQR as per the Tamilnadu Transparency in Tender Rules 2000,
under clause 32.Pre-qualification procedure as mentioned below:
(1) The Tender Inviting Authority shall for reasons to be recorded in writing provide for pre-
qualification of tenderers on the basis of,-
(a) experience and past performance in the execution of similar contracts;
(b) capabilities of the tenderer with respect to personnel, equipment and construction or
manufacturing facilities;
(c) financial status and capacity
(2) Only the bids of pre-qualified bidders shall be considered for evaluation.

Based on the above, the BQR has been followed for larger quantity of procurement in general as
follows:
 Should possess ISI Certificate from BIS
 Past Experience – Should have supplied at least 25% of Tendered Qty. (Tendered material or
Higher Size or Higher Rating put together during the preceding 10 Years) & End User Certificate is
a must.
 Annual Turn Over – Should be at least 25% of the Tender Value in any one of the last 3 Year.
 Bidder should be a direct participant
 Technical – Type Test Certificate should be furnished from a Govt. recognized lab (Date of test
before 2/3/4/5 years as the case may be)
Note: The quantity of past experience and turnover may be varying case to case as proposed by the
Tender inviting authority and approval of competent authority.
New Entrant Clause:
The New entrant clause may be included in the BQR for the tender value above Rs.2 Crores. The
exemption for the New Entrant as follows:
 Past Experience – NIL or Less
 Annual Turnover – NIL or Less or both
 Eligible for Maximum 20 % of the Tendered quantity if Quoted L1
If the technical specification is to be modified fully, then a committee approved by the respective Director,
comprising of technical personnel, for preparing the technical specification and after preparation, that
should be approved by the competent authority before incorporation in the tender specification. If any slight
modification, then it has to be approved by the respective Director before incorporation in the tender
specification.
Notice for Inviting Tender:
The tender inviting notice for publishing in the News Papers should be given to the Civil Design
Department. As per the value of the tender, the publication in the Newspaper can be called for as per the
G.O.No.392, dt.18.08.2009.
The tender specification should be uploaded in our respective web sites and TN government website
(www.tn.gov.in)and in the State tender bulletin of Tamilnadu.
Kinds of Tender
1. Open Tender :
In Open Tender anyone can participate. The participant has to ensure that they fulfill the minimum
pre-qualification criteria specified in the tender document to qualify. If they do not meet the pre-
qualification criteria, their bid will be summarily rejected. It is necessary that open Tender is
advertised in newspaper. The Lowest Bidder or L1 generally wins the contract.

2. Limited Tender :
 Bid document should be sent to Regd. Suppliers by Speed Post/ Regd. Post/ Courier/ e-mail
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  No. of supplier firms in Ltd. Tender should be more than three
 No need for Web based publicity
3. Single Tender :
 If only a particular firm is the manufacturer
 Emergency need to procure from a particular source
 Technical reason to be recorded (standardization of machinery – HP, SONY etc.)
Note: Single response to an open bid can’t be termed as Single Tender

Types of Tender System:

1. Single Part: On the date of tender opening the Techno-commercial bid
and the Price bids will be opened and then evaluated for placing of
orders.

2. Two Part: On the date of tender opening, the Techno-commercial bid

only will be opened and after scrutinizing the tender offers and after
getting approval of committee the price bid will be opened.

Note: As per Clause 4.3 of Tender Regulations, 1991 wherever the estimated value of procurement
exceeds Rs.10 lakhs and estimated value of work contract exceeds Rs.25 lakhs, the P.O. Placing
Authorities has to necessarily float tenders under Two Part Tender System.
Period of Tender Notice:
 Minimum 15 days notice for Tender value of less than Rs.2 Crores.
 Minimum one month for Tender value of above Rs.2 Crores.
Note: First Extension may be given by the Inviting Authority and the second extension may be given by
the Committee only (for valid reasons specified in the Rules, 2000).
Clarification before Opening of Tender: If any clarification sought by the tenderer 48 Hours before
opening of Tender must be clarified and any clarifications given, that must be sent to the tenderers who
have bought the specification from us.
Tender Scrutinizing:
 Read the tender offer carefully page by page and paste flags wherever necessary.
 Verify the BQR conditions as stipulated in the Specification and prepare a statement.
 Examine the Type Test results and Genuine of the Certificate (if any doubt arises, call for the
original for comparison) or check the same with the field for technical feasibility.
 Make note of Deviation with respect to Commercial and Technical and clarify with the tenderer for
confirmation.
 Prepare the Price Bid Open Note for approval.
Preparation of Note seeking approval for the opening of Price Bid
 INTRODUCTION - Scope
 NEED - Requirement, Stock, Consumption, Pipe Line
 GENERAL - Budget Approval, Value
TENDER EVALUATION
 NIT, Dt. Opened, List of Tenderers
 EMD: List of qualified tenderers and proposed rejected tenderers with respect to EMD must
be discussed.
 BQR: List of qualified tenderers and proposed rejected tenderers with respect to BQR must
be discussed.(A table for BQR qualification/ non qualification must be prepared and put up
with the note as Annexure)
 COMMERCIAL EVALUATION – Validity (normally 180 days), Delivery, BG (SD cum
Performance), etc, must be discussed.
 TECHNICAL EVALUATION – Guaranteed Technical Particulars offered in tabular column as
Annexure and regard to testing of Samples must be discussed.
 DEVIATION – Commercial and Technical deviations with any clarification sought from the
tenderer must be discussed.
 RECOMMENDATION: Recommendation of the Tender Inviting Authority should be briefed.
 DECISION POINTS: Points could not be decided by the Tender Inviting Authority may be
discussed for taking decision by the committee.

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  REMARKS OF ACCTS & REPLY: The note should be sent to Accounts branch for remarks.
A reply should be furnished for every para of remark.
 TENDER SCRUTINIZING COMMITTEE: The all above must be approved by the TSC.
 COMPETANT AUTHORITY: The final note must be placed before Committee after getting
draft approval of the CMD for procurement of materials. (Competent Authority: upto 10
Crores – BLTC and above Rs.10 Crores – Full Board)
 APPROVAL PRAY: Final approval for List of opening of Tenderers and List of Rejection of
Tenderers.

Opening of Price bids:

After obtaining the approval from the committee, the eligible tenderers are to be informed, and the
opening authorities should be signed in the unopened price bid covers before opening. All the price bid
documents should be initialed by the opening authorities before readout. Any ambiguity with numerals
and words of Price in the price bid schedule, the lowest of the two must be taken into account.

Difference of Rank and Evaluated Rank:

1. If all the tenderers are within Tamilnadu or if all the tenderers are outside Tamilnadu there is no
difference between Rank and Evaluated Rank.
2. If the tenderers are from both Tamilnadu and outside Tamilnadu, then the Rank and Evaluated
Rank must be decided after price preference as per below example:

Price bid Statement:

Sl.No Firm Ex-Works ED (12.5%) VAT/ CST F&I Total
Price in Rs. In Rs. (5% / 2%) In Rs. In Rs.
In Rs.
1 Tamil Nadu
90.00 11.25 5.06 10.00 116.31
Firm
2 Other
89.00 11.13 2.00 12.00 114.13
States Firm

Evaluated Price bid Statement:

Sl.No Firm Ex-Works ED VAT/ CST F&I Total in Rs. Evaluated
Price in (12.5%) (5%/2%) In Rs. (Excluding Rank
Rs. In Rs. In Rs. VAT for TN
Firm)

Tamil
1 Nadu 90.00 11.25 5.06 10.00 111.25 L1
Firm
Other
2 State 89.00 11.13 2.00 12.00 114.13 L2
Firm

By seeing the above the TN firm has become the Evaluated L1 Tenderer and all the consideration
regarding to the L1 tenderer should be passed to them.
Comparison: The present quoted rate should be compared to the latest PO placed on the tendered
material and the increase/ decrease with Raw materials price increase/ decrease and prepare a table.
Negotiation: A negotiation should be carried out in spite of increase/ decrease of the price with the raw
materials price decrease/ increase. The negotiation committee comprises of Tender Inviting Authority
(CE), Concerned SE and one Accounts Personnel.
Reasonableness of Negotiated Price: The proposed negotiated price should be compared to the price
of latest POs placed for the tendered material in the other states.
Quantity Allocation: !00% order should be made on L1 tenderer.
Evaluation and Award of tenders in Special Cases:
If the tender inviting authority decides for multiple sources of supply, then lowest tenderers listed in strict
ascending order and after matching of L1 value, the allocation can be made accordingly.
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 Note: The monthly manufacturing capacity of the L1 tenderer may be taken into account (from the NSIC
Certificate) while allocation of quantity with respect to the delivery schedule.

Preparation of Note for getting approval for the placement of Orders

 INTRODUCTION – Scope
 NEED - Requirement, Stock, Consumption, Pipe Line
 GENERAL - Budget Approval, Value
 OPENING OF PRICE BID - Dt. Opened, List of Tenderers
 PRICE EVALUATION – Rank, Evaluated Position of Rank, Comparison,
Negotiation, Reasonableness of Price, Qty. Allocation
 COMMERCIAL EVALUATION – Validity, Delivery, BG
 VENDOR RATING – Previous Supply, Performance
 RECOMMENDATION: Recommendation of the Tender Inviting Authority should be
briefed.
 REMARKS OF ACCTS & REPLY: The note should be sent to Accounts branch for
remarks. A reply should be furnished for every para of remark.
 TENDER SCRUTINIZING COMMITTEE: The all above must be approved by the
TSC.
 COMPETANT AUTHORITY: The final note must be placed before Committee after
getting draft approval of the CMD. (Competant Authority: upto 10 Crores – BLTC
and above Rs.10 Crores – Full Board) for procurement of materials.
 PRAY FOR APPROVAL: A tabular column with name of the firm, quantity, unit price,
Total Price and Total ordered Value should be furnished.

Preparation of Draft PO:

The Draft PO should be prepared in line with the Specification, without any addition or subtraction.
Perusal of Draft PO:
The Draft PO should be perused by the Tenderer and signature of the authorized person with seal
should be obtained in every page of the Draft PO.
Issue of PO:
After the perusal of the Draft PO, the detailed PO may be issued to the Tenderer with
acknowledgement.

(This article has been written with up to date amendments and revisions. Any future amendments/
instructions issued regarding tender have to be incorporated then and there)

The author can be reached at: 9443185432 / ssureshae@gmail.com

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