General Guide To Tendering &

THE BASICS OF Bidding Processes

TENDERING & BIDDING By: Moatasem Mabrouk

2015
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CONTENT

Introduction
Terms & Definitions
Tender Process Map
Bidding Process Map
Proposal Evaluation

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INTRODUCTION

Procurement is the acquisition of goods, services or works from an external source. It is favorable that the goods,
services or works are appropriate and that they are procured at the best possible cost to meet the needs of the
acquirer in terms of quality and quantity, time, and location. Corporations and public bodies often define
processes intended to promote fair and open competition for their business while minimizing exposure to fraud
and collusion.
Procurement vs. acquisition: procurement is the act of buying goods and services for an organization. And,
acquisition is the conceptualization, initiation, design, development, test, contracting, production, deployment,
Logistics Support (LS), modification, supplies, or services (including construction) to satisfy organization needs.
Acquisition is therefore a much wider concept than procurement, covering the whole life cycle of acquired
systems. Multiple acquisition models exist, one of which is provided in the following section.
Following slide shall describe some procurement methods

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INTRODUCTION

Open Tendering: Open tendering is shorthand for Two Stage Tendering: a two stage process which is
competitive bidding. It allows companies to bid on suitable for large scale projects in which the supplier
goods in an open competition or open solicitation gets involved in the design phase, method statement
manner. and pricing. This phase enable the client to evaluate
more and select best bidder out of the 1st stage who will
Restricted Tendering: Unlike open tendering, restricted award the contract of this phase.
tendering only places a limit on the amount of request
for tenders that can be sent by a supplier or service Request for Quotations: This procurement method is
provider. used for small-valued goods or services. Request for
quotation is by far the least complex procurement
Request for Proposals (RFP): Request for Proposal is a method available.
term that is used all across the business world. Client
receives RFPs from potential clients all the time when a Single-Source: is a non-competitive method that
client is seeking a new suppliers. should only be used under specific circumstances. Single
source procurement occurs when the procuring entity
intends to acquire goods or services from a sole provider

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INTRODUCTION
Some Benefits of Tendering & Bidding Process:-
Enhance Competition between suppliers,
Cost optimization and value of sale enhancement,
Transparency of acquisition process,
Open vacancies for new market competitors and
entrepreneurs,
Minimize potentials for conflict of interest,
Give more space for negotiation,
Assure subjectivity and accuracy of acquisition.
Applications:-
Organizations tends to call for tender due to different
reasons that might be vary from entity to another,
below are sample of reasons for using bidding &
tendering process:-
Legal & Legislation requirements,
New product/service acquisition,
Large scale acquisition [exceed the limits defined in
the organizations policies],
Special requirement acquisition,
Cost optimization and value of sale enhancement
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TERMS & DEFINITIONS

Tender The term tender is often used interchangeably to the term bid. However, Bid is increasingly being used by the bidder
(the supply side) and the term tender used on the procurement side (the buyer).
Bid an approach to a client in order to gain significant new or repeat business..
Proposal The proposal is a written offer from a seller to a prospective buyer. It is a critical step in the complex sales process
Business profile, or corporate credentials A business profile or corporate credentials is a promotional or marketing tool that
presents a snapshot of your company. It essentially serves as a resume for your business.
Capability statement Similar to above but is usually tailored to the audience or the contract requirements, and describes the
business capabilities and experience, including who you are, what you do, and how you are different from your competitors.

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TERMS & DEFINITIONS

ASL Approved Supplier List RFD request for documentation

EOI expression of interest: a business expression indicating an RFI request for information: is a standard business process
intent to bid whose purpose is to collect written information about the
IFB Invitation for bids: is an invitation to contractors or capabilities of various suppliers. Normally it follows a format
equipment suppliers, through a bidding process, to submit a that can be used for comparative purposes.
proposal on a specific project to be realized or product or service RFO request for offers
to be furnished RFP request for proposal
ITT Invitation to tender: is a special procedure for generating RFQ request for quotation or request for qualifications
competing offers from different bidders looking to obtain an
award of business activity in works, supply, or service contracts. RFN request for negotiation
PQQ pre-qualification questionnaire: a series of questions for RFS request for services
potential tenderers to answer regarding their level of
experience, capacity and financial standing.
ITV Invitation to vendors
RFA request for applications

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TENDER PROCESS

Pre-Tender Tender Evaluation Award &

Contract
EOI CFT / CFB Tender Opening Preffered Tender
Tender Tender Tender Evaluation
Documents Tender Tender Interviews
Addendums Tender
Close Tender Recommendation

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BIDDING PROCESS

Follow Up

Awarding
Bid Preparation
Opportunity Evaluation
Tender Announcement

PQQ Technical Pre-job Meetings & Interviews Award Letter/Note

EOI Financial Technical Offer Negotiations Contract Signature
RFI Approval Financial Offer Commencement
Contractual Terms
Review
Amendments &
Follow up
Documentation
Final Review
Approval
Submitting

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EVALUATION OF BIDS

Award Bid Evaluation

Opening of Bids
Recommendation Report

Examination of Notification of
Post-qualification
Bids Award

Evaluation &
Requests for
Comparison of
Clarification
bids

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EVALUATION OF BIDS

Opening of Bids Bids which are the subject of a withdrawal notice must
The opening of bids should take place immediately after not be opened and must be returned unopened to the
the deadline for submission in the presence of bidders respective bidders.
representatives who wish to attend. All bids and modifications received prior to the deadline
Bids, modifications and withdrawals received after the must be opened next.
deadline must not be opened. No bid shall be rejected or an opinion/judgment voiced
The outer envelope of these late bids and modifications as to its responsiveness at the bid opening, except for
should be opened first and the names of the bidders late bids.
submitting late bids or modifications read out and Immediately after the opening of bids, all bids which
recorded. The inner envelopes of all late submissions were opened must be stored safely and confidentially
must be returned unopened to the respective bidders. and be made available only to those directly involved in
Withdrawal notices received prior to the deadline the evaluation process.
should be opened next and read out and recorded.

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EVALUATION OF BIDS
Preliminary Examination of Bids
Each bid will be examined to determine if it:
is properly signed and accompanied by a power of attorney;
is accompanied by the required bid security;
is complete and generally in order (if not, any omission must
be noted);
is substantially responsive to the bidding documents (if not,
any deviations, omissions or variations must be noted);
is free of computational errors (any such errors must be
noted); and
requires any clarifications (any such clarification must be
noted).
The evaluation committee must decide which
deviations (including omissions and variations) or
reservations identified at this point are material and
therefore the relevant bids should be declared as not
substantially responsive. If a bid is not substantially
responsive, it should be rejected and cannot be made
responsive by correction or withdrawal of the
nonconforming deviation or reservation.
At the end of this stage, the committee should be
agreed on:
those bids which are substantially nonresponsive and should
not be considered further; and
any clarification which should be requested from bidders.
The outcome of the examination should be
summarized
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EVALUATION OF BIDS

Requests for Clarification:

All requests for clarification must be made in writing, and the response must also be given in writing.
A log of all requests for clarification and responses must be kept.
Requests for clarification can be sought at any time, up to the contract award decision.

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EVALUATION OF BIDS
Evaluation and Comparison of Bids
Bids which have not been declared substantially
nonresponsive will then have to be evaluated in depth.
Before a bid can be evaluated the following must be
done:
computational errors must be corrected in accordance with
the relevant provision in the instructions to bidders;
bid prices must be converted to a common currency in
accordance with the relevant provision in the instructions to
bidders;
adjustments should be made for any obvious omissions,
deviations or variations which are not considered to be
material and which can be quantified;
the adjusted bid price resulting from the above would
constitute the basis for the subsequent evaluation and
comparison of bids.
The detailed evaluation of a bid involves first checking
that the technical characteristics, functional
performance and commercial conditions of the bid are
in accordance with the bid requirements.
The next step is to apply the evaluation criteria specified
in the bidding documents and adjust each bid as
appropriate using the evaluation criteria. Only the
criteria specified in the bid document can be applied.
No new criteria must be introduced at evaluation,
and the specified criteria must be applied wherever
appropriate. Specified criteria cannot be waived during
evaluation.
.
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EVALUATION OF BIDS

Evaluation and Comparison of Bids The adjusted bid price of each bidder will require
Where there are a large number of bids to be evaluated adjustment in accordance with the evaluation criteria in
(over six) and the spread of bid prices is relatively wide, the bidding documents, in the manner and details
it is not necessary, in the first instance, to evaluate all specified therein, to arrive at the evaluated bid price.
bids in detail. One can usually determine, from the The evaluated bid prices are compared and ranked in
specified evaluation criteria, the range of bid prices ascending order to determine the bidder with the
relative to the lowest bid price which stand a reliable lowest evaluated price.
chance of being the lowest evaluated bid. In such cases
it is recommended that, in the first instance, only those
bids within this range should be subjected to a detailed
evaluation. If the lowest priced bid is rejected during
evaluation, the range must be predetermined, and all
bids in the revised range must be subject to a detailed
evaluation.

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EVALUATION OF BIDS

Post-qualification A positive determination is a prerequisite for the award

A successful bidder must be qualified to satisfactorily of the contract to the bidder.
perform the contract. A negative determination must result in rejection of the
Therefore, it must be determined whether the bidder bid; in which event, the committee must proceed to the
offering the lowest evaluated bid is so qualified. next lowest evaluated bid to make a similar
determination of the bidders capabilities to perform the
If bidders were prequalified prior to bidding, then a contract satisfactorily
simple check should be made to determine that the
lowest evaluated bidder still satisfies the qualifying
requirements specified for prequalification.
If no prequalification was done, then it must be
determined that the lowest evaluated bidder has the
relevant previous experience, and financial, technical
and production capability and capacity to perform the
contract. This must be based on the qualifying criteria
specified in the bidding documents.

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EVALUATION OF BIDS

Award Recommendation

The successful bidder whose bid has been determined to be substantially responsive and has been determined to
be the lowest evaluated bidder and who has been determined to be qualified to perform the contract
satisfactorily, must be recommended for award of the contract.

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EVALUATION OF BIDS

Bid Evaluation Report comparison of bids

A bid evaluation report with the award recommendation lowest evaluated responsive bid
must be prepared. post-qualification
The bid evaluation report should reflect the logical award recommendation
sequence of the bid evaluation process in the following
manner: The bid evaluation should be prepared in the format
outlined in the Model Bid
receipt and opening of bids
Evaluation Report in the manner and detail outlined
examination of bids therein, including all forms and annexes.
substantially nonresponsive bids
correction of arithmetic errors
currency conversion
adjustment for nonmaterial deviations
bids subject to detailed evaluation
evaluation of bids

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EVALUATION OF BIDS

Notification of Award
When the award recommendation has been approved, a notification of award (letter of acceptance) should be
sent out immediately to the successful bidder.
Negotiations must not be held with the successful bidder with the intention of getting a reduction in price or a
change in the scope of the contract.
Negotiations are only allowed under exceptional circumstances and with the Banks prior concurrence.

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THANK YOU
References

"Definition of bidding in English". Oxford. Retrieved 29 March 2014.

"Bidding at Auctions". Auction Bidding. Retrieved 31 March 2015.

"Bidding Terminology". Auctions UK. Gauk Auctions. Retrieved 31 March 2015.

Evaluation of tenders and preferred bidder selection

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