Transparent Procurement

Procedures & Evaluation and

comparison of Bids for Works

By

Syed Adil Gilani

Vice Chairman & CEO
Transparency International Pakistan
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Evaluation and Comparison of Bids for

For competitive bidding, whether open or limited, the bidding

documents shall
include the
following,
namely:Goods
and
Works
(a)
invitation to bid;
(b)
instructions to bidders;
Invitation of Tenders
(c)
form of bid;
(d)
form of contract;
(e)
general or special conditions of contract;
(f)
specifications and drawings or performance criteria
(where applicable);
(g)
list of goods or bill of quantities (where applicable);
(h)
delivery time or completion schedule;
(i)
qualification criteria (where applicable);
(j)
bid evaluation criteria;
(k)
format of all securities required (where applicable);
(l)
details of standards (if any) that are to be used in
assessing the quality of goods, works or services specified; and
(m)
other detail not inconsistent with these rules that the
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procuring agency may deem necessary.

Evaluation and
Comparison of Bids for
Invitation of Tenders.
Goods and Works
Use Standard Form of Bidding Documents issued by
Pakistan Engineering Council in August 2002, with
amendments prescribed by NACS 2002 & Public
Procurement Rules, 2004.

1. Standard Guidelines for Evaluation of Bids for

Procurement of Works. Annexure VII
2. Standard forms of Biding Documents (Civil Works)
Annexure VII
- Part I. General Conditions of Contracts.
- Part II
Condition of Particular Applications.
FIDIC conditions for works of civil
engineering
constructions

( continued)

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Use Standard Form of Bidding Documents issued

by Pakistan Engineering Council in August 2002,
& World Bank SBDs with amendments
prescribed by NACS 2002 & Public Procurement
Rules, 2004
3.
Standard forms of tender documents for
procurement of
works (Electrical and
Mechanical)- Annexure IX
4.
Escalation and Construction Contracts.Annexure X
5.
Standard Bidding Documents Supply and
Installation of
Information Systems (Single-Stage
Bidding)- Annexure
XI
6
Standard Bidding Documents Supply and
Installation of
Information Systems (TwoStage Bidding)- Annexure
XII
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5.
Standard Bidding Documents

Amendments to be made in these PEC &

World Bank Documents incorporating
NACS 2002 & Public Procurement Rules,
2004 as given below
1.

Integrity Pact.
IP to be included as prescribed in by PPRA
in 2002 for all
Procurements of over Rs 10
million value
2.
Allocation of Sub Criteria and Financial
Evaluation.
Sub-criteria and their weighting determine
the outcome of
the evaluation, they should be
chosen considering the aspects that are critical to
the success of the assignment. Evaluation criteria
and sub-criteria, associated points, and
the
rating system form an arithmetic model to assess
the
technical merit of the proposals. It must be
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part of Bidding
Documents

Amendments to be made in these PEC &

World Bank Documents incorporating
NACS 2002 & Public Procurement Rules,
2004 as given below
3. Check for balanced bid prices, to evaluate
determination of enhancement of performance
security.
Bill of Quantity (BOQ) Format requires change, to
include breakdown against each BOQ item cost of
material, equipment,
labour & overhead costs.
4. Amendments in the Tender Documents for Civil Works

a In Standard Form of Bidding Documents Civil

Works also the Arithmetic Check and Correction of
error should be included at the preliminary checking
stage.
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b TI The
IT.26 and IT. 27 Examination of Tenders and

Amendments to be made in these PEC &

World Bank Documents incorporating
NACS 2002 & Public Procurement Rules,
2004 as given below
4. c The IT.18 Format and Signing of Tender. Wording
of 18.6 is
substituted with new wording. 18.6.
The tender shall contain no alterations,
omissions or additions, except to comply with
instructions issued by the Employer, or as
are
necessary to correct errors made by the bidder, in
which case such corrections shall be initialed by the
person or persons signing
the tender.
The Correction shall be made by striking a line
over the wrong
amount, and writing the correct
amount separately. The use of
White Fluid for
correction of error is not allowed. The Correction
shall
be made by striking a line over the wrong
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Amendments to be made in these PEC & World

Bank Documents incorporating NACS 2002 &
Public Procurement Rules, 2004 as given below
5. Amendments in the Tender Documents for Electrical and
Mechanical Works.
The PEC Standard Form of Tender
Documents for Procurement of Works ( Electrical &
Mechanical) includes following clause.26.2 Evaluation and
Comparison of Tenders substituted with new wording.
18.6.
Commercial Evaluation
It will be examined in detail whether the tenders comply with
the commercial/ contractual conditions of the Tender
Documents. It is expected that no major
deviation/stipulation shall be taken by the bidders. However
there is no information on the procedure of commercial
evaluation. The procedure for commercial evaluation has to
be defined in the Tender Documents for transparent
evaluation. For this purpose following Clause is to be
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included
in the Tender Documents for Electrical &

Evaluation
General
Regardless of how well the other
steps in the procurement process are
conducted, if bids are not evaluated
correctly and fairly, the process has
failed. Unfortunately, bid evaluation
is the step that is most easily
manipulated if one wants to favor a
particular bidder.
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Evaluation
(h)

lowest evaluated bid means,-

(i) a bid most closely conforming to evaluation criteria and

other conditions specified in the bidding document; and
(ii) having lowest evaluated cost;

The basic sequence for bid evaluation is the same for all
goods and works, and consists of the following steps

Preliminary examination;
Determination of bid responsiveness;
Correction of arithmetic errors;
Conversion to common currency;
Quantification of omissions and deviations;
Application of evaluation criteria;
Comparison of bids; and
Preparation of evaluation report.

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Bid Evaluation Committee and its duties

In order to examine and evaluate bids, the Procuring
Agency must appoint a Bid Evaluation Committee
comprising of minimum three odd number members.
The Bid Evaluation Committee is responsible for the
evaluation and comparison of the bids received and for the
preparation of the Bid Evaluation Report.
No evaluation criteria shall be used for evaluation of bids
that had not been specified in the bidding documents.
Preliminary Examination
Correction of Arithmetic Errors
Application of Evaluation Criteria
Responsiveness Check
Conversion to Common Currency
Evaluation of Bids on the Basis of Price Only
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(continued)

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Bid Evaluation Committee and its duties

Price Adjustment
Delivery Schedules
Cost of Spare Parts
Evaluation on the Basis of Life Cycle Cost
Deviations from the Requirements of Bidding Documents
Commercial Aspects
Technical Aspects
Quantification of Omissions and Deviations
SAMPLE
BID
EQUIPMENT
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EVALUATION

REPORT

FOR

SIMPLE

(continued)
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Bid Evaluation Committee and its duties

List of Attachments to the Bid Evaluation Report
1. Copy of Bid Invitation
2. Pre-bid meeting minutes
3. Copy of bidding document and amendments, if
any
4. Minutes of bid opening (process verbal)
5. Table of bid prices received- bidder, nationality,
bid price as read out, bid price in common
currency
6. List of bids rejected during preliminary
examination with
brief reasons
7. Evaluation and comparison table of substantially
responsive bids with all adjustments and
preference margin, if applied
8. Contract information sheet of the selected bid.
9. Announcement of evaluation reports.- Procuring
agencies
shall announce the results of bid
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1.
2.
3.
4.
5.
6.
7.
8.
9.

A Bid is Not Responsive If;

It is received after the time and date fixed for its receipt,
Fails to Sign the Integrity Pact.
It is submitted through fax, telex, telegram or e-mail.
It is not accompanied with the specified Bid Security.
It is unsigned.
Its validity is less than specified.
It is submitted for incomplete Scope of Work.
It indicates completion date later than specified.
It indicates that prices quoted are not firm during currency of the contract

except those prices where escalation/adjustments are permitted in the

Conditions of Contracts.
10. It indicates that material to be supplied does not meet the eligibility
requirements.
11. It indicates that Bid Prices do not include the amount of taxes & duties.
12. If Bidder refuses to accept the arithmetic corrections.
13. It
is
materially
and
substantially
different
from
the
Conditions/ Specifications of Bidding Documents.
10. It provides Sub-contracting, contrary to conditions specified in the
Bidding
11. Documents. It fails to comply Mile-Stones/critical dates specified
in
Bidding Documents.
12. The
bidder
is not valid license holder of the PEC.
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GENERAL PROVISIONS
2.
Definitions.- (1) In these rules, unless there
is anything repugnant in the subject or context, (a)
bid means a tender, or an offer, in response
to an invitation, by a person, consultant, firm,
company or an organization expressing his or its
willingness to undertake a specified task at a price;
(b)
bidder means a person who submits a bid;
(c)
competitive bidding means a procedure
leading to the award of a contract whereby all the
interested persons, firms, companies or
organizations may bid for the contract and includes
both national competitive bidding and international
competitive bidding;
d)
contractor means a person, consultant,
firm, company or an organization who undertakes to
supply goods, services or works;

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Evaluation of bids for works contracts is more

Evaluation
Comparison
complex than and
the evaluation
of bidsof
forBids
goods.for
To make the evaluation process easier and
Works
transparent, it is essential for the Procuring
Agency set out in bidding documents, well
defined evaluation criteria and carry out the
evaluation process in a transparent manner. If
the evaluation criteria is not well defined,
Bidders may be reluctant to submit bids. The
evaluation of works contracts involves price and
nonprice factors, depending on the form of
works contract being procured. The selection of
bids in for a works contract involves two steps
after the preliminary examination to determine
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responsiveness. The first being the selection to

Evaluation of bids for works contracts is more

Evaluation
and
of Bids
for
complex than
theComparison
evaluation of bids
for goods.
To make the evaluation process easier and
Works
transparent, it is essential for the Procuring
Agency set out in bidding documents, well
defined evaluation criteria and carry out the
evaluation process in a transparent manner. If
the evaluation criteria is not well defined,
Bidders may be reluctant to submit bids. The
evaluation of works contracts involves price and
nonprice factors, depending on the form of
works contract being procured. The selection of
bids in for a works contract involves two steps
after the preliminary examination to determine
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responsiveness. The first being the selection to

Evaluation of Deviations in Bids for Works

Evaluation and Comparison ofContracts.
Bids for

Works

Bidders for works contracts often qualify or

condition their bids in some way, creating
problems for Procuring Agency staff who must
decide whether a bid is substantially responsive
to the bidding documents and, if so, how
deviations from the bidding conditions should be
handled in the evaluation of bids. Clear
unambiguous bidding documents prepared by
experienced staff of the Procuring Agency result
in fewer qualifications by bidders. Pre-bid
conferences during the bidding period should
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also be convened to clarify any serious

Evaluation of Deviations in Bids for Works

Evaluation and Comparison ofContracts.
Bids for

Works

Deviations may include exceptions, exclusions,

qualifications, conditions, stated assumptions,
alternative proposals (when not specifically
solicited) and other changes to the requirements
of bidding documents. Their degree of
acceptability and impact on bid comparison will
vary; some may be clearly unacceptable; some
that are acceptable may be quantifiable in
monetary terms; others may not be quantifiable
but may still affect the competitive position of
other bidders.
(continued)

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Evaluation of Deviations in Bids for Works Contracts.

The first stage in evaluation is to decide whether the deviations
in a bid are so material as to be unacceptable, and therefore
are grounds for rejecting the bid. Fairness to the other
bidders is a prime consideration. A bidders deviation which,
in itself or by its withdrawal or rectification, would seriously
affect the competitive position of other bidders unless they
were given the same opportunity, would normally constitute
grounds for rejection of the entire bid. The following
deviations (or some combination thereof) may result in
rejection of bids :
bid submission by a legal entity or joint venture different from
that which was Prequalified (excepting when all members of
the new joint venture were Prequalified initially);
the submission of a base bid subject to price adjustment when
fixed price bids were called for;
the submission of a bid based on an entirely different
alternative design where such had not been requested nor
expressly permitted;
an inflexible time phasing of contract construction or
performance not conforming to prescribed critical key dates
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or milestones in a broader construction program; and

Evaluation of Deviations in Bids for Works Contracts.

Deviations from the bidding requirements which do not appear
at first sight so serious as to provide immediate grounds for
bid rejection maybe considered further in the evaluation
process. The following are examples of such deviations.
an amount of advance payment and other payment terms
(including retention money, guarantees, the details of price
adjustment provision) differing from the prescribed
conditions;
non-compliance with local regulations relating to labor,
imports taxes, duties, notarization, etc.;
changes in specified methods of construction or execution
(temporary works, shift work by labor, etc.);
subcontractors not meeting pre-specified requirements;
omission (deliberate or unintentional) of minor works or items
included in the scope of work;
non-acceptance of full liabilities (e.g. risks to third parties,
nearby structures, etc.);
modification of, or a limit to the amount specified for
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liquidated damages; and

Evaluation of Deviations in Bids for Works Contracts.

The details and implications of any deviations which are
not explicit should be clarified by the
Engineer/Employer in discussion with respective
bidders without change in the substance or price of the
bids.
Deviations or offers which are better than the
requirements of the bid specifications (e.g. higher
quality materials and workmanship, modified designs,
shorter construction periods, etc.) should only be
regarded as benefits to the Employer and included in
the evaluation if specifically solicited in the bidding
documents.
Deviations which are minor or non-quantifiable (e.g.,
changes in subcontractors, access to site, land
acquisition, sources of materials, etc.) should be
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assessed in terms of their reasonableness for

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Evaluation of Deviations in Bids for Works Contracts.

The ranking order of bids should be determined

using the most probable monetary costs (or
benefits) to the Employer of all quantifiable
deviations. The contract should be proposed
for award to the bidder submitting the lowest
ranked evaluated bid.
After selecting the lowest ranked evaluated
bidder in the manner described above, the
Employer may accept the qualified bid. Nonquantifiable deviations may be accepted or
rejected
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Rejection of All Bids

In some situations the Procuring Agency is permitted
to reject all bids submitted in response to an
invitation for bids.
The Procuring Agency may reject all bids under the
following circumstances:
1. Where the price in the lowest evaluated bid
exceeds the Procuring Agencys bid cost estimates
by a substantial margin;
2. When all the bids received are not responsive to
the requirements in the bid documents; and
3. Where the Procuring Agency after receiving bids
reasonably concludes that there is lack of
competition.
Where all the bids are rejected, the Procuring
Agency
should review the bidding documents and
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The Standard Bid Evaluation Report

After the completion of the evaluation process a bid
evaluation report shall be prepared setting out the
process by which the Bid Evaluation Committee
evaluated the bids received in response to the
procurement process. A Standard Bid Evaluation
Report format prepared by the PEC is available for
use by Procuring Agency.
This report covers
among other things:
key dates and steps in the bidding process;
bid prices, corrections, discounts and currency
conversions;
additions, adjustments and price deviations;
domestic preference if any;
technical evaluations if any;
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results;
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names of bidders rejected and reasons for

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ACCEPTANCE OF BIDS AND AWARD OF

38. Acceptance
of bids.- TheCONTRACTS
bidder with the lowest
PROCUREMENT

evaluated bid, if not in conflict with any other law,

rules, regulations or policy of the Federal
Government, shall be awarded the procurement
contract, within the original or extended period of
bid validity.
39. Performance guarantee.- Where needed and
clearly expressed in the bidding documents, the
procuring agency shall require the successful bidder
to furnish a performance guarantee which shall not
exceed ten per cent of the contract amount.
40. Limitation on negotiations.- Save as otherwise
provided there shall be no negotiations with the
bidder having submitted the lowest evaluated bid or
with any other bidder:

Provided that the extent of negotiation

permissible shall be subject to the regulations
issued by the Authority.
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TIME BASED PROCEDURE OF ROUTING THE CASES

Transparency
International Pakistan
Prequalification
and Tender
Documents to be ready in
45
days.
They should be ready by the time Administrative approval is received.
Timings for Tendering.
Prequalification in press
Receipt of Prequalification
Days
Prequalification Evaluation
Invitation of Tenders
Receipt of Tenders
Opening, Evaluation
Public Declaration of ER
Finalization of EV &
Approval of ER by Tender Committee
Approval of Competent Authority
Days
Award of Contract
Signing of Agreement
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Days.
15 W
7 Days

1 Day
15 W Days
7- 14Days
10 Days
6 Days
4

2 Days
14-28 Days
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MAINTENANCE OF RECORD AND

FREEDOM OF INFORMATION

46.
Record of procurement proceedings.- (1) All
procuring agencies shall maintain a record of their
respective procurement proceedings along with all
associated documentation for a minimum period of five
years.
(2) Such maintenance of record shall be subject to the
regulations framed in this regard from time to time.
47. Public access and transparency.- As soon as a
contract has been awarded the procuring agency shall
make all documents related to the evaluation of the bid
and award of contract public:

Provided that where the disclosure of any

information related to the award of a contract is of
proprietary nature or where the procuring agency is
convinced that such disclosure shall be against the
public interest, it can withhold only such information
from public disclosure subject to the prior approval of
the Authority.
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REDRESSAL OF GRIEVANCES AND

SETTLEMENT OF DISPUTES

48. Redressal of grievances by the procuring agency.- (1)

The procuring agency shall constitute a committee
comprising of odd number of persons, with proper powers
and authorizations, to address the complaints of bidders
that may occur prior to the entry into force of the
procurement contract.
(2) Any bidder feeling aggrieved by any act of the procuring
agency after the submission of his bid may lodge a written
complaint concerning his grievances not later than fifteen
days after the announcement of the bid evaluation report
under rule 35.
(3) The committee shall investigate and decide upon the
complaint within fifteen days of the receipt of the
complaint.
(4) Mere fact of lodging of a complaint shall not warrant
suspension of the procurement process.
(5) Any bidder not satisfied with the decision of the
committee of the procuring agency may lodge an appeal in
the relevant court of jurisdiction .
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REDRESSAL OF GRIEVANCES AND

49. Arbitration.(1) After coming
into force of the
SETTLEMENT
OF
DISPUTES
procurement contracts, disputes between the parties to

the contract shall be settled by arbitration.

(2) The procuring agencies shall provide for a method of
arbitration in the procurement contract, not
inconsistent with the laws of Pakistan.
50.
Mis-procurement.- Any unauthorized breach of
these rules shall amount to mis-procurement.
51. Overriding effect.- The provisions of these rules shall
have effect notwithstanding anything to the contrary
contained in any other rules concerning public
procurements:
Provided that the prevailing rules and procedures
will remain applicable only for the procurement of
goods, services and works for which notice for invitation
of bids had been issued prior to the commencement of
these rules unless the procuring agency deems it
appropriate to re-issue the notice for the said
procurement after commencement of these rules.
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