Buying/Tendering authority releases the tender notice by publishing it on their official websites and/or via local/national newspapers. All the interested bidders/contractors submit their technical and commercial proposals along with the pre-qualification bid. Once the bidders/contractors have submitted their bid proposals in response to the tender notice released by the tendering authority, within the allowed timelines; that is when the tender evaluation begins.
Stages of tender evaluation
Pre-qualification: A team of qualified and relevant members of the buying/tendering authority form the tender evaluation committee. On the pre-informed location, date and time; the pre-qualification bids are opened in front of the bidders representatives.
During the pre-qualification, a checklist is used to select the bidders whose technical/financial bids will be opened at a later date as per the tender notice/schedule.
A pre-qualification checklist used by the tender evaluation committee majorly covers the following details along with supporting documents of same:
- Annual audit reports of last 3 – 5 years
- Relevant license to carry out the project in given region/territory
- Necessary background infrastructure requirement to run the project
- Necessary industry certifications
- Important mandatory documents like PAN/TIN number, sales tax/VAT/registration certificates etc..
- EMD – Earnest money deposit enclosed
The tender evaluation committee examines the pre-qualification bids to check if they are complete, whether the required documents are signed properly, is the required EMD enclosed, have all the necessary supporting documents been shared or not. Any bid that does not meet the minimum levels or non-responsive on certain criteria specifically asked in the bidding document, will be rejected by the tendering authority without any prior intimation to the bidder.
Evaluation of technical bids: The successful bidders from the pre-qualification, will now be evaluated on the technical aspects in response to the requirements put out in the bidding document. Tendering authority uses point based system between 0 to 10 (with 0 being the lowest and 10 being the highest), to rate each of bidders on lines of below mentioned criteria:
- Bidding organization’s capability in terms of compliance checks, current licences and relevant certificates etc.
- Relevant experience
- Past performance in the same field
- Relevant resources/manpower availability for the project
- Requirement understanding, and solution design as per technical specification
In a simple assessment during the technical evaluation, a certain score between 0 to 10 is given for each of the criterion, which is multiplied with its weightage, and simply added in the end for final score. There are certain tender notices though, where complex assessment is done during the evaluation process. There are additional criteria that are put out, which have nothing to do the simple scoring methods.
So, it’s the method adopted by the tendering authority during the time of bid evaluation, to arrive at the final shortlisted bidder/contractor. Depending on the type of project that buying/tendering authority is releasing as tender notice, they decide on the tender evaluation method.
The tendering authority decides the cut-off %, and the bidders who score more than that cut off %, only those will be considered for the financial bid evaluation. Once the tendering authority has completed the evaluation of the technical bids, they invite those bidders who have made above the cut off % in technical bids.
Evaluation of financial bid: In the financial bid evaluation, the lowest commercial bid is designated as L1, second lowest as L2 and so on.
Let’s take a calculation example to understand the scoring for L1, L2 & L3 bidders.
Suppose the L1 will get 75 points.
Then L2 score would be calculated as below:
L2=75-(75/L1*(L2-L1))
Likewise, L3 score would be calculated below:
L3=75-(75/L1*(L3-L1))
& so on.
Finally the total points scored = Technical bid evaluation point + Financial bid evaluation point
Shortlisted bidder & deciding award of contract: Once the bidder/contractor has been shortlisted, they are then called for further negotiation and project implementation related discussion. During these discussions, buying authority and the bidder both get a chance to clarify their doubts or discuss about the project implementation details, product design details, cost negotiation etc. Majorly the discussion is driven by the administrator, there could be other key people from finance or project delivery team who could be involved for query clarifications. Once both the parties have come to a stage of final clarity, a final contract document or Letter of Award (LOA) is issued to the bidder.
Post this, the tender evaluation is complete and the result is announced. At this stage, all the participating authorities are notified about the details of the contract awarded. This is done either on the buying authorities website, or they may send intimation to all participating bidders. Participating bidders who got rejected, can go back to the buying authority asking for the details of their score and information on which all criteria did they lack in because of which they got rejected.
Hope this blog helped your SME get detailed understanding of the tender evaluation method. BidAssist team would be more than happy to connect with you and help you further in this regard or help you with any other queries regarding government tenders.
Reach out to us on 1800 102 9586 or you may write to us @ contact@bidassist.com