Open and Award Tender

Open and Award Tender

In earlier article, we studied how procurement of goods and services is concerned with various types of tenders. In this article, we will go through the process of opening and awarding tender. 

Open and Award Tender

In a standard tender, a process is adopted to carry out all functions i.e.

(i) Estimation of Tender’s Value including Quantity and Amount (ii) Expression of Interest (EoI) (iii) Request for Proposal (RFP) (iv) Request for Quotation (RFQ) (v) Pre-bid Conference (PBC) (vi) Notice Inviting Tender (NIT) (vii) Approval of the Tender (viii) Publicity of the Tender (ix) Earnest Money Deposit (EMD) (x) Bid Evaluation (xi) Tender Opening Committee (ToC) - Technical (x) Approval to technically qualified Tenders (xi) Tender Opening Committee (ToC) - Financial (xii) Approval to financially qualified Tenders (xiii) Tender Evaluation Committee (TEC) (xiv) Approval to technically and financially qualified Tenders (xv) Purchase Order (xvi) Award of Contract (xvii) Performance Security Deposit (xviii) Agreement (xix) Refund of EMD (xx) Notice or Publicity about award of Tender (xi) Monitoring of Contract (xii) Evaluation of Contract

Let’s firstly know about the standard bid document:

Tender Document:

In order to realize the bids in proper format, the procuring authorities prepare a standard bid document known as tender document. It is provided as ‘Detailed Notice Inviting Tender’ i.e. DNIT. It contains instructions to the bidder regarding filling the tender form, terms and conditions of the contract, requirements of the procuring authorities, detailed specifications on which basis the delivered products or services will be evaluated, the form of contact, and other standard forms. The tender document must clearly specify the evaluation criteria of bids.

Earnest Money Deposit:

The provision of safeguarding the procuring authorities from the bidders, not seriously interested in providing goods and services, is Earnest Money Deposit known as EMD. The bidder after submitting the technical and financial envelope; cannot withdrawal or alter the bid. In case, it is done, the EMD is forfeited. The organizations registered with Central Purchase Organization or National Small Industries Corporation are exempt to deposit the EMD. The amount of EMD is refunded back the the bidders after the completion of process of awarding tender. The unsuccessful bidders are refunded bank and the successful bidder’s amount of EMD is adjusted in his payments.

How much EMD should be asked to deposit?

The amount of EMD depends upon the estimated value of the tender. It is from 2% to 5% of the estimated tender value. In Haryana State, the Government fixed the maximum ceiling for EMD i.e. 2 Lacs. The EMD is deposited through Demand Draft or Bankers’ Cheque or Bankers’ Guarantee.

Performance Security:

In order to safeguard the interests of the procuring authority, the successful bidder is asked to deposit performance security. The Performance Security is the amount which can be forfeited in case the bidder is not providing goods and services as per the terms of the contract.

How much Performance Security’s amount can be?

The performance security is from 5% to 10% of the tender value on which the successful bidder agreed to provide goods or services as per the terms and conditions of the contact. The amount is realized through Demand Draft. The performance security is refunded back after the full completion of the term of the contract, usually after 60 days beyond the date of completion of all contractural obligations of the supplier including warranties.

Evaluating Bids:

The bids are evaluated on the basis of the criteria provided in the tender document. In accordance with the time required to be taken for evaluation, the date of award of tender is specified accordingly in the tender document. The process of tender evaluation is very confidential until the award of the tender and such information cannot be disclosed even under ‘Right to Information (RTI) Act’ till the tender is awarded successfully. Two types of committees are formulated i.e. Tender Opening Committee and Tender Evaluation Committee.

(i) Technical Bid Evaluation:

The tender document comprises terms and conditions to give technical and commercial bids for the tender. The technical bid usually comprises the check list to evaluate the status of bidders in various terms. First of all, the technical envelope is opened and the technical check list is evaluated with the technical terms provided in the tender document.

The bidders will either qualify or not qualifying at technical terms. Those who are dis-qulalified are reject at this stage of evaluation. This is First stage of evaluating bids and the price or amount is silent. Without knowing how much the vendor or bidders are demanding for supplying products or rendering services, they are evaluated on Technical terms and conditions. In initial examination, the following factors are examined:

(a) Whether the tender meets the eligibility criteria detailed in Tender Document or not?(b) Whether all crucial documents duly siged and attested by the bidder, have been attached or not?(c) Whether amount of Earnest Money Deposit have been furnished in the bid documents or not?(d) Whether the tender satisfies all conditions provided in the tender document or not?(e) Sample is tested if required as per terms of conditions of the Tender(f) The bidder’s capacity is evaluated as per the requirements of providing goods and services(g) The bidder’s turnover is verified as per the terms provided in tender document(h) The statutory documents are verified like PAN Number, Registration Number, GST Number etc.

(ii) Financial Bid Evaluation:

Once a bidder qualifies in the technical stage of evaluation, his financial or commercial envelope is opened in second stage of evaluation known as Financial Bid Evaluation. The bidders who disqualify in the first round of technical bid evaluation are not provided opportunity to be evaluated in second round; in other words, their commercial envelopes will not be opened. The Financial Bid Evaluation covers:

(a) Arriving at outcome price of the bid(b) Determining the Lowest-1, Lowest-2, Lowest-3 Vendors of the Tender(c) Determining the reasonability of the rates quoted by Lowest -1.(d) Recommending for the Negotation (if required)

Copyright © 2019 Dr. Lalit Kumar. All rights reserved. 

You might also be interested in the following:

Types of Tenders in Government

Tender and Central Vigilance Commission

e-Procurement, Purchase Matters and Inventory Management

Procurement of Goods in Government

Inventory Management

Purchase Procedures including Government e-Marketplace and Combating Corruption