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Business Opportunities Seminar

Procurement of Goods and Works

New Zealand October 2013

Presented By: Amr J. Qari, Procurement Specialist

Asian Development Bank

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Agenda

Bidding Dos and Don’ts

Bid Evaluation Fundamentals

ADB Disbursement Procedures

Q&A

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Bidding Dos and Don’ts

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Bidding Dos

Be compliant Submit a basic offer that complies with all terms and

conditions of the bidding document, even if some of these conditions appear irrelevant

No conditionalities Do not add any conditions. Conditionalities or

qualifications will lead to rejection

Get official clarification If any provisions of the bidding document are unclear or

unacceptable, submit an official inquiry to the EA before the bid closing date or such date as may be specified. A copy may also be submitted to ADB if appropriate

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Review evaluation and qualification criteria very carefully

Make final check of bid Amount, validity and text of Bid Security Signatures and power of attorney Joint venture agreement enclosed References enclosed Discounts in covering letter or

appropriate place as specified in the bidding document Marking of envelopes

Bidding Dos

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Be on time Submit bid within the stipulated deadline. Late bids will

not be accepted.

During bid opening ensure All relevant prices are read out All discounts are read out Presence and amount of bid security is read out No envelope remains unopened All the above is recorded correctly The record is signed by all bidders present and by

the buyer

Be Aware of Possible Extension There may be a request to extend the bid validity

period by several months, as in certain cases the evaluation of bids requires more time than originally expected.

Bidding Dos

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No Bid Security

Late Submission of Bid Security

Insufficient Amount of Bid Security

Lack of Supporting Documents

Missing Items, Incomplete Bids

Expiration and Extension of Bid Validity

Partial Quantities

Conditional Bids

Bidding Don'ts

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Bid Evaluation Fundamentals

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BID EVALUATION

Basics

Purpose Determine lowest evaluated substantially responsive bid Time Frame

The bid evaluation of bids and the award of contract should be completed before the expiration of the bid validity as stipulated in the bid documents

Confidentiality of Procedure

After opening of bids no information to non-authorized persons on:

Substance of bid Preliminary examination results and status Evaluation results and status Recommendation of award

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BID EVALUATION

Basics

Clarification and Alteration of Bids Only clarifications not changing the substance or

the price of the bid may be requested or accepted by the Borrower

Arithmetical Errors No cause for bid rejection. Can be corrected:

Discrepancy between Unit Price and Total Price Unit Price will prevail

Discrepancy between Total Bid Amount and Sum of Total Prices Total Prices will prevail

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BID EVALUATION

Basics Basis for Price for Comparison

Goods for Goods from outside

Includes cost of insurance and freight (CIF or CIP) Excludes custom duties or other taxes levied on

goods

for Goods from inside Includes ex-factory price (EXW) Excludes any sales or similar taxes levied on

goods

Related Services including all taxes and duties

Works Includes all taxes, duties and other levies

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BID EVALUATION

Basics Exchange Rates

For bid comparison use single currency as specified in bid documents (usually local currency or US$)

The rates to be used are the selling rates quoted by an official source (central bank, commercial bank, or internationally circulated newspaper)

Date of exchange rate to be specified in bidding documents shall be:

Not earlier than 28 days prior to the deadline for submission of bids

Not later than the original date for the expiry of bid validity

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Major Deviations

Has an effect on the validity of the bid; or

Has been specified in the bid documents as grounds for rejection of the bid; or

Is a deviation from the provisions of the bidding documents with effect on the bid price, but cannot be given a monetary value; or

Is a deviation from the minimum experience qualifications specified in the bidding documents; or

Is an unacceptable deviation from the specifications

Conditional bid

BID EVALUATION

Basics

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Minor Deviations

Has no effect on the validity of the bid; or

Has no effect on the price, quality or delivery of the goods or services offered; or

Has such effect, but the difference from commercial terms and technical specifications can be given a monetary value; or

Has not been specified in the bid documents as grounds for rejection, provided total amount of deviations does not exceed a previous determined percentage of the bid price (usually 15 per cent)

BID EVALUATION

Basics

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BID EVALUATION

Basics

Extension of Bid Validity

Considered in exceptional cases

When considered, all bidders should be asked

Bidders willing to extend bid validity

cannot modify substance of bid

must extend validity of bid security

Negotiation with Bidder

Negotiation to obtain more suitable offer from the lowest evaluated substantially responsive bidder should be considered only as last resort and after obtaining ADB approval

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BID EVALUATION

Basics

EA can reject all bids (after ADB’s prior approval) when:

All bids are substantially higher than budget

Lack of competition

None of the bids are responsive

After rejecting all bids, EA shall:

Examine reasons for failure to attract adequate number of responsive bids

Revise Specifications, Scope of Supply, or bidding conditions as necessary

Launch rebidding (after ADB’s prior approval) to obtain new bids from those who submitted bids earlier

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BID EVALUATION

Basics

Other factors to be considered

payment schedule delivery time operating costs efficiency and compatibility of the equipment availability of service and spare parts, and related

training safety, and environmental benefits

The factors other than price to be used for

determining the lowest evaluated bid shall, to the extent practicable, be expressed in monetary terms

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BID EVALUATION

Publication of Award of Contract

What

Name of each bidder

Bid prices as read out

Evaluated bid prices

Name of bidders whose bid was rejected and reasons

Name of winning bidder and price offered

Duration and summary scope of contract awarded

Where

English language newspaper or freely accessible web site

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BID EVALUATION

Debriefing

Bidders may request an explanation from the EA as to why their bids were not selected

The EA shall promptly provide an explanation, either in writing and/or in a debriefing meeting

at the option of the EA

The requesting bidder shall bear all the costs of attending such a debriefing

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ADB Disbursement Procedures

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Direct Payment Procedure used for payment of large civil works progress

payments, consultant’s fees, and importation of goods where not practical to open a letter of credit

Reimbursement Procedure used for payment of local currency costs, petty

purchases and small civil works payments

Commitment Procedure used extensively for financing import of goods

Imprest Fund Procedure used for payment of contractors’ bills and suppliers’

invoices in small amounts or numerous items of operating expenses

ADB Disbursement Procedures

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Q&A