Procurement and Contract

Management

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 1.2 Contract and procurement management basics
Procurement and Contract Management involves three
major processes:
• Contract Planning,
• Procurement Management and,
• Contract Management which in turn consists of the
following

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 1.2.1 Contract Planning
Procurement and Contract Management
processes shall be based upon the approved
contract planning provisions; that is,
the contract delivery system,
the procurement method and
contract types decided upon.
With Provisions for alterations b/c to
meet regulatory requirements such as:
Ethical, Economical, HSE and
Transparent.
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 1.2.1 Contract Planning
The approved contract provisions can only be
changed following the change process stated in
the contract planning document and if and only
if:
the Environment and Context considered
are not correctly analyzed or changed,
their application can remarkably affect
the objective of the project, and
procurement management process
justifies change of the Contract Types.
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 1.2.2 Procurement Management
Procurement Management is a process of
selecting individuals or organizations to carry
out the intended services and / or works.
It is based on provisions made on contract
planning phase. It involves
the preparation of procurement
documents
invitation and submission of tender
proposals
Opening and Evaluation of tenders
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 1.2.3 Contract Management

Contract Management: is a process of

reaching contractual agreement for
implementation,
its administration and
finally concluding the contract.
It is based on provisions made on
contract planning phase.

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 3. Procurement Management
3.1 Introduction and purpose
Procurement is a process used to select the
lowest competitive and qualified bidder for
procuring services or works or goods from
potential competitors based on reasonable
relevant criteria.
Physical infrastructures are cost extensive
and appropriate savings obtained through
competition are the main factor behind the
procurement process
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 3.1 Introduction and purpose
 it desirable to regulate procurement of goods,
construction and services so as to promote the
objectives of:
Maximizing economy and efficiency in
procurement;
Fostering and encouraging participation in
procurement proceedings by suppliers and
contractors,
Promoting competition among suppliers and
contractors for the supply of the goods,
construction or services to be procured;
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 3.1 Introduction and purpose
Providing for the fair and equitable
treatment of all suppliers and contractors;
Promoting the integrity of, and fairness
and public confidence in, the procurement
process; and
Achieving transparency in the procedures
relating to procurement,

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 3.1 Introduction and purpose
An effective and efficient procurement method
ensures the following rights called the "Five
Rights". These are
The Right Quality,(technical expectation
and economic consideration-using
specification)
The Right Quantity, (Take-off-Sheet
Measurements and Resources Allocations)

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 3.1 Introduction and purpose

The Right Cost / Price /,(quality related

and the right cost is nearby cost, achieved
mainly through competition)
The Right Counterpart (to guarantee that
the parties shall be fit to the job) and
The Right Time. (scheduling with regard
to right timing is essential)

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 3.1 Introduction and purpose
The purposes of a Procurement Management
System can be summarized into two major
points:
To satisfy the need for economy and
efficiency,
To provide equal opportunity to
competitive bidders.
The successful achievement of these purposes
requires the following seven characteristics

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 3.1 Introduction and purpose
Figure : Seven Characteristics of Tendering

Notice of
Advertisement

Avoidance of Proof of
Subjectivity Competition

Characteristics
of tendering

Accessibility Impartiality

Formality Neutrality

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 Characteristics of Tendering
Notice of advertisement:
Through an official newspaper, mass media,
and notice boards etc. which can enable the
advertisement to reach wide range of
competitors.
Proof of Competition:
tenders should be unlimited competition,
unless otherwise conditions such as
complexity and specialisation of projects
require restriction to open competition.

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 Characteristics of Tendering
Neutrality: care shall be taken When
The specifications are prepared
To avoid preference to limited
alternatives
The bidding documents (contract conditions)
shall be balanced
 Not to cause disruption of the task to be
accomplished.
Accessibility:
The place where bid documents are purchased
shall be clearly indicated
The place, dates and time for submission shall
15
be notified
 Characteristics of Tendering
Impartiality: During tendering if clarification is
requested, do so accordingly to all bidders
Often Pre-Bid Submission Meeting is used for
this purpose.
Negotiation is not allowed during tender
period.
Formality: Strict adherence to formality shall be
taken to all tenders like
the submission & opening of bids (place, date
and time)
rejection of late and non-responsive bids
the bid security condition shall also be a
16 formality to all tenders
 Characteristics of Tendering
Avoidance of subjectivity:
Criteria for evaluation shall be strictly
set out in the instruction to bidders’
part of the bidding document and all
evaluations shall be carried out
accordingly.

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 3.1.2 Procurement cycle
Let us discuss procurement from where to where.

It include the time frame between the

identification of requirement and the ultimate
award of contract.
The followings are fundamental steps, to
accomplish the ultimate goal of procurement
cycle.

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 3.1.2 Procurement cycle
A. Requirement identification
The procurement cycle begins with
identification of need which creates a
requirement.
 E.g. a need to cross a body of water
creates a requirement to build a
bridge.
Budget allocation and fund availability are
determined before submission of
requirements.
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 3.1.2 Procurement cycle
B. Procurement Planning:
once requirements are defined and approved,
procurement planning begins. At this phase
determine the following;
i. What is needed, when and what is the
relationship to other requirement?
ii. Is the requirement dependent or
independent of other requirements?
iii. if dependent, what is the relationship to
other dependent requirement

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 3.1.2 Procurement cycle
B. Procurement Planning CONT…
i. When is the dead line to fulfilling the
requirement.
ii. Is there sufficient time to fulfill the
requirement given the project schedule.

All requirements should ideally appear on the

procurement plan

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 3.1.2 Procurement cycle
C. Procurement requisition processing:
The first step here is to determine what the
requesting entity wants. This is done by reviewing
specification or description of goods or services or
works required.

D. Determine procurement method:

One must determine the appropriate procurement
method to fulfill the requesting entity's need in most
expeditious and cost-effective manner.

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 3.1.2 Procurement cycle
E. Prepare and publish bidding document:
 Bidding process to begin after procurement
method determined
F. Pre-bid / meeting and site visit:
 Pre-bid meetings are held alone or in conjunction
with a site visit.
 Pre-bid meetings are held primarily for complex
requirements.
 The purpose of pre-bid meeting is to clarify the
bid documents.
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 3.1.2 Procurement cycle
G. Bid submission and opening:
During the opening event the following needs to be
determined
Is the bid received in a sealed envelope?
Is the bid form completed and signed?
Is the bid received on or before the
submission date and time?
Is there a power of attorney mandating the
authorized representative to sign the bid?
Is the bid security ( if any) in the form and
amount stipulated in the bidding document?
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 3.1.2 Procurement cycle
H. Bid evaluation: before the bid evaluation takes place,
an evaluation panel is formed and approved.
 Initial examination is done during the bid opening:
circumstances that could lead to the rejection of bid at
this stage are
Compliance of documents received with the
submission requirements.
Late bids
 Preliminary examination of the bid
The responsiveness of the bid to the bid
documents
 Detailed examination of the bid
Price comparison is done to determine the lowest
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qualified and responsive bidder
 3.1.2 Procurement cycle
I. Award recommendation:
the contract award recommendation resulting from
evaluation of bids lead to a request for clearance/
no-objection to award contract.
If no-objection, the contract award
recommendation will be published and noticed.
If there is any claim received, it will be
reviewed and investigated to determine validity.
A valid claim may result in suspension of the
intent to award, in order to undertake detail
investigation which could lead to re-evaluation
of bids or cancellation of the evaluation process.
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 3.1.2 Procurement cycle
J. Contract negotiation:
 Contract for goods or works procurement are not a
usually negotiated except under special
circumstances the details of which must be
specifically stipulated in the bidding document.
K. Contract award:
 For goods and works procurement, contract award
takes place with the notification of the responsive
bidder with lowest evaluated price.
 Such notification is done by the way of a formal
letter of acceptance.
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 3.1.2 Procurement cycle
Post contract award considerations:
After contract signing, unsuccessful
bidders have the right to request
debriefing by the procurement entity.
The debrief can be done orally or in
writing.

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 3.2 Procurement Methods

Procurement types can be classified based on the things

to be procured and the way how they are procured. There
are five bases for classifying procurement methods.
These are:
Bases Things Bidders Geographica Procurement Procurement
procured coverage l coverage awareness steps
Types Goods Competitiv International General PN Single
e
Services Negotiated Regional Specific PN Two stage

Works National Pre-

Qualification
Local Post-
Qualification

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 3.2.1 Things to be Procured
(Goods Vs Services Vs Works)
Depending on the delivery system chosen during the
contract planning phase, mixed types of procurement
types can be adopted
Procurement of Goods: Physical resources such as
Materials and Equipments
Procurement of Services: often termed as consultancy
services procurement. These include services like
feasibility studies,
design and contract administration of projects,
Construction management consultancy services,
research or study based consultancy services, etc.
Procurement of Works: the procurement of contractors
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to carryout the actual physical infrastructures.
 3.2.2 Bidders’ Coverage
(Competitive Vs Negotiated Tendering)
Competitive Tendering: selection of better and capable
winning bidder among the various eligible firms. it can
either be Open or Limited Competitive Bidding in the
form their invitations.
Open competitive bidding allows all eligible
bidders to participate.
Limited competitive bidding allows a number
of selected firms only.
The major difference between open and
limited competitive bidding is the addition of
qualifying criteria beyond eligibility.
Limited Competitive Bidding is often used when the
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nature and urgency of the work justifies to do so
 3.2.2 Bidders’ Coverage
(Competitive Vs Negotiated Tendering)

Some of the qualifying criteria used for Limited

Competitive Bidding are (usually short listing is
done based on):
the firms past performance,
work load at present,
presence of a firm in the vicinity of the
projects,
knowledge of similar type of works before and
financial and technical capabilities of the
firms
Usually in Limited Competitive Bidding, cost of
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projects might be higher than expected
 3.2.2 Bidders’ Coverage
(Competitive Vs Negotiated Tendering)
Negotiated Tendering: Under certain circumstances,
The nomination of this direct invitation is usually
based on
good performance,
contact with the Project Owner,
for supplementary agreements, etc.
 This kind of tendering is exceptionally exercised when
the project under consideration is very urgent or
needs special skill whereby the required skill is rarely
available.
 The main disadvantage of this type of tendering is that
the price offered can usually be higher than the
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competitive bidding.
 3.2.3 Geographical Coverage
(International Vs Regional Vs National Vs Local
Tendering)
These types of procurements are generally caused by
three major factors. These are
Local Capacity,
Financial Sources ( dictate regional or
international)
Globalization (globalization and principles of Free
Trade and Trade Liberalization also encourages
international tendering)
In practice, Preference Margins in the range of 7.5%
are applied to local, national or regional tenderers,
which imply tender offers higher than 7.5 % will be
34 given preference to encourage local participation.
 3.2.4 Procurement Awareness
(General and Specific Procurement Tendering)
Following requirement like proof of competition
and increase accessibility,

General Procurement Notice (GPN) is made

during projects planning phase and
it is only interests of the bidders are
aroused because sufficient tender
documents are not available.

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 3.2.4 Procurement Awareness
(General and Specific Procurement Tendering)
This approach is used:
The Project Owners to
identify interested bidders to issue
Invitations by letters and save time;
identify bidders relevant for the
procurement required;
protect loss of cost in preparing lots of
tender documents.

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 3.2.4 Procurement Awareness
(General and Specific Procurement Tendering)
The Bidders to:
give sufficient time to assess the cost of the
project;
protect loss of cost only to participate; and
encourage competent bidders who wary about
low-balling to participate
There are two types of General Procurement Notice
based on their purpose why and when they are notified
The first type of GPN
When?-- announced as soon as the design is
started
Why?-- to create awareness and let bidders’
37 prior information about upcoming projects
 3.2.4 Procurement Awareness
(General and Specific Procurement Tendering)
The second type of GPN
When?--announced after financial sources are
determined
Why?--to determine interested bidders who
could be invited in the form of Limited
Competitive Tendering.
GPN covers
the Employer and its financiers for its
project;
Description of the project with its probable or
planed implementation time;
type of procurement method and address
38 where further information can be obtained.
 3.2.4 Procurement Awareness
(General and Specific Procurement Tendering)

Specific Procurement Notice (SPN)

is an Invitation for Tender or a Request for
Proposal when the project is ready for
implementation.
can be sent to those interested bidders
identified following GPN directly.
Otherwise, it should be advertise on the
bases of enlarging opportunities

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 3.2.5 Procurement Steps:
(Single Vs Two Staged and Pre-Vs Post-Qualification
Tendering)
Single or Two Staged Tendering: are related with
whether tender packaging for submission
separately and their evaluations are staged for a
single or two steps when invitations are made.

Pre-Qualification Tendering: It is a procedure in

which eligible bidders are invited to provide
evidence of their ability to perform the services
required by the employer.

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 Pre - qualification can be of two types
The first is Single stage tendering: when
companies are already considered qualified
during their licensing requirements.
(evaluation criteria become the low priced
bid)
The Second is when two staged tendering is
used to pre-qualify tenderers’ for their
technical competency. Once pre-qualify,
either the lowest priced or the lowest
evaluated bidder recommended for award.
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 3.2.5 Procurement Steps
The advantages of pre - qualification in procurement are:
To the employer To the Bidder
Protect the employer Saves bidders from the
against unqualified cost of preparing bids
bidders
Quicker Evaluation for Assure pre-qualified
only pre-qualified bidders bidders for their bid
considerations
Ensure award to least Reduce low balling
evaluated not lowest bidders from participation
bidder
Assess level of interest Make bidders to be better
shown by bidders planned
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Show competency &
 3.2.5 Procurement Steps

The following pre-qualification criteria's are often

used in determining the ability of the bidder to carry
out the works:
Experience and past performance,
Health, Safety and Environment Records, if
any,
Capability in respect of personnel and
equipment,
Organizational arrangement and facilities,
Financial Status, and
Schedule of Commitments.
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 Procedure
pre-qualification flow chart
Employer / Consultant Contractors
 
Procurement and Contract Strategy Delivery System
(Contract Planning Phase) Procurement Method Awareness on Future
Contract Type   Follow Up
Business and
Action Plan

Pre-qualification Documents Letter of Invitation

Tender Document Preparation Information about prequalification procedure Collect information about
Project Information the project and its location
Prequalification Application

Advertisement
Invitation To Project Scope, Location, Source of finance Check Eligibility
Check Competitive Advantage
Pre-qualify Issue, Submission and Opening dates of
Collect Information
Tenders
Tendering Instructions to pre-qualify and evaluation
 
Decide to participate
Phase criteria

Organization, Structure & Experience Request and Obtain Pre –

Issuance & Submission of Pre- Resources (Financial, Managerial, Technical, Qualification docs.
qualification docs. Labor, Plant, Stock, etc) Request & Obtain Clarifications
Tendering Current Commitments Complete and  Submit Docs and
Acknowledge Receipt Relevant Info.
Phase
Open Tender in the presence of relevant
attendee Attend Tender Opening
Opening & Analysis of Pre – Evaluate for Eligibility, Technical, Ceremony
Qualification Organizational , Financial Capability
Tender Evaluation Phase

Pre-qualified tenderers are selected Acknowledge & Confirm Intention

Winners are Notified to participate in succeeding
Selection and Notification of tender
Tenders
Tender Evaluation Phase
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List of qualified tenderers
 3.2.5 Procurement Steps
Post – qualification:
where Financial Evaluation is carried out first and rank
bidders on the basis of their offer for tender price.
That is, Technical Evaluation will be done after
the Financial Evaluation
The advantage of this approach is
not to lose the lowest financially evaluated
bidder &
to save time during technical evaluations.
However, Post qualification approaches often cause to
fix evaluators on financial results and be locked and
45
biased for successive technical evaluations.
 3.3 Procurement Management
Processes
Procurement Management process can be idealized
into three major processes. These include Preparation,
Tendering, and Evaluation Processes

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 3.3.1 Procurement Preparation
Procurement Team:
Ethiopian Procurement Regulation states
that a Procurement team consisting of a
minimum of three members shall be
established.
As Tender Evaluation is a joint
technical and commercial exercise,
the project owner shall consider that
the necessary experts shall be
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composed in the procurement team.
 Tender document
Tender Documents: are prepared to
Instruct bidders on the procedures for the
preparation and submissions of bids,
Inform prospective bidders about the
nature of things to be procured,
Inform bidders about the criteria for
evaluation and selection of the successful
bidder, and
lay down the contract conditions, delivery
system, procurement methods and contract
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types of the project.
 Tender document cont…
Tender documents include:
Form of Invitation to Tender or Request for
Proposals;
Instruction to Tenderers (Standard and / or
Particular information) or Terms of References;
Prequalification Documents if necessary;
Forms of Tender;
Forms of Contract Agreement;
General and Particular Conditions of Contract;
Bill of Quantities and Drawings ;
Technical Specifications & Methods of
Measurement;
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Other Forms, Formats and Schedules.
 Tender document cont…
Invitation for Tender (IFT): is a requisition
for interested bidders to participate for the
procurement of services / works / goods. It
shall be: 
in accordance with the approved
provisions of the contract planning
phase and applicable laws
made public through the wide covering
media, newsletter, notice boards, etc 
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 Tender document cont…
Usually Invitations for Tender include: 
Name and address of Institutions issuing
the invitation and Clarification if
requested,
Objective and Requirements of the
Invitations,
Stages and accordingly qualification terms
Brief descriptions of the project
Sources of Fund and Eligibility
requirements
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Completion time, if necessary
 Tender document cont…
Instruction to Bidder (ITB)
shall provide all the necessary
information to enable bidders to
prepare their offer in accordance with
the requirements of the Project Owners.
Whenever necessary, it will be
supplemented by particular information
which cannot be standardized or
generalized in the General ITB
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document
 Tender document cont…
The ITB document includes:

A. General parts: covering sources of fund,

description of the project, eligibility and
qualification requirements, and necessary
obligations concerning the cost of tendering,
site visits, etc.
B. Contents of Bidding Documents: Bidding
Documents, Written Questions / Clarification
of Bidding Documents, Modification to
Bidding Documents, Pre-Bid Conference and
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Site Visit.
 Tender document cont…
The ITB document includes:
C. Preparation of Bids) which states
Cost of Bidding, Language of Bid, Bid Prices and
Discounts, Currencies of Bid and Payment,
Professional Qualifications and Capability of the
Bidder
Technical Qualifications, Competence, and
Experience of the Bidder
Financial Standing of the Bidder, Joint Venture or
Consortium, Period of Validity of Bids, Bid
Security
Documents comprising and their precedence, form
54 of tender and appendix thereto requirements, and
 Tender document cont…
The ITB document includes:
D. Submission and Opening of Bids:
Sealing and Marking of Bids,
Deadline for Submission of Bids,
Late Bids,
Withdrawal, Substitution, and
Modification of Bids,
Bid Opening.

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Tender document cont…
The ITB document includes:
E. Evaluation and Comparison of Bids:
Confidentiality, Clarification of Bids,
Responsiveness of Bids, Nonconformities and
Omissions,
doubtful price quotations and errors in calculation,
Margin of Preference, Conversion to Single
Currency,
Preliminary Examination of Bids, Legal,
Professional, Technical, and Financial Admissibility
of Bid
Evaluation of Bids, Comparison of Bids, Post-
56 qualification Evaluation, Acceptance or Rejection of
 Tender document cont…
The ITB document includes:
F. Award of Contract:
Award Criteria
Announcing and Awarding of the
Successful Bidder
Signing of Contract
Performance Security

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 Approval of Tender Documents
Regulatory requirements enforced for:
Budgeting, Credit, Assistance and Grant
Policies;
Health, Safety and Environmental
Requirements;
Professional, Ethical and Legal
Requirements
demand checking, renewal and approvals of
Tender Documents. Checklist for review is
the best practice used for Tender Documents
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approval.
 3.3.2 Tendering Phase
Invitation:
Normally open tenders are floated for a period
between 21 to 45 days. Limited and Negotiated
tenders can be invited between 21 to 35 days. The
invitation to tender shall clearly state:

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 Clarifications
Can either be
requested by interested bidder or
carried out using a pre - tender
clarification meeting
In both cases issues clarified shall be sent
(written) to all bidders
The bidders shall submit their offer on or
before the submission date and time.
Late bids are automatically rejected.
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 Tender Opening
Bids shall be opened in public on the date,
at the time and place
Ethiopian practice in tender opening for
public construction projects is that
 Project Owner,
 Consultant ( if available) and
 Contractors (Who wish to attend)
 representatives from concerned public
agency ( if necessary)
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 Tender Opening
The following will be carried out during tender
opening:-
Tender Attendee members shall take their
place, be registered and shall sign to attest
their presence during opening
Tender box opened and checked for faulty
things,
Bids will be opened one after the other,
All necessary data which deem useful will be
read aloud and recorded at the opening of
bids.
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Tender committee members shall sign on the
 3.3.3 Tender Evaluation Phase
It is made to determine and make award
recommendation for the least evaluated bidder or
lowest bidder using preliminary and detail
evaluations.
The recommended winner may or may not
necessarily be the lowest bidder in case of least
evaluated bid.
Factors to be considered in determining the least
evaluated or lowest bidder are.

63 technical qualification,
 Preliminary Evaluations
Preliminary Evaluations are made for
Eligibility and Arithmetic Review requirements
Eligibility Requirements:
Most often sited issues considered in eligibility
requirements are:
Valid & Up to date Trade and Professional
License,
Valid & Up to date Membership to
Financier Organizations
Valid provision of Bid Security or Bond,
64
 Preliminary Evaluations cont…
Additionally, these requirements are also
accessed:
Completeness and submittals of all
required documents,
Turnover requirements fulfilled
Power of Attorney, Signature and Sealing
Requirements, and
Appropriate Invitation, Packaging and
Submission Requirements.
These eligibility requirements together with
65 basic alterations of the conditions of the
 Preliminary Evaluations cont…
For guideline during tender evaluation; outlined
when a tender is considered major deviation
(non-responsive) or not

Major Deviations Minor Deviations

Affecting the validity of Do not affect the triple
the bid constraints of the
project
Rejection or Disqualifying Do not result in change
conditions stated of Bid Price
Substantial effect on the Non conditional tenders
66 Bid Price
 Preliminary Evaluations cont…
Arithmetic Review:
Tenders are not arithmetic error free.
Therefore, it is a formal evaluation
process to review arithmetic before
carrying out detail evaluations.
Arithmetic review can be done if and only
when financial proposals are opened.

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 Detail Evaluations
Detail Evaluations include Technical, Commercial
and Financial Qualification requirements.
Technical requirements:
at this stage eligible bidders evidence of their
ability to perform the services required by the
employer is to be examined.( see pre-qualification
part )
Commercial Evaluation:
This includes
Benefit Forgone due to Completion Time;
Additional Costs due to differences in Foreign
68 Currency Exchange and Advance Payment
 Detail Evaluations Cont…
Benefit Forgone due to Completion Time:
When tenders are offered with different completion
times, comparisons are made to determine the benefit
forgone taking into account the least acceptable
completion time as a basis for competitions. The
Benefit Forgone (BF) due to additional
completion time can be computed using the
following expressions:
BF = (FV – TO) / (1 + i)n; FV = TO (1 + i)n
TO = Tender Offer after Arithmetic Check; n =
Completion time in days

69 i = Discount Rate = 0.05 % per day = 1.5 % per month;
 Detail Evaluations Cont…
Additional cost due to
Foreign Currency Exchange requirements
When tenders have provisions to quote different
currencies, their comparison will be made based on
determining their effects due to the additional cost
incurred for variations in currency exchange
requirements.(convert all tender into one currency)

70
 Detail Evaluations Cont…
Advance Payment
When different amounts of advance payment
are requested as part of the tender offer, this
does not give the same basis for evaluation. so
that, there shall be the same basis for proof of
competition
Therefore, the evaluation should take
minimum advance payment request as a basis
and consider others for additional cost incurred
due to different mobilization advance
71 requirements.
 The Additional Cost due to differences in
mobilization advance requirements can be
computed from the following expressions:
APAC = {(AP x TO) / 100} – PV; PV = A x
PWF; A = {(AL%) x TO} / n; PWF = {(1
+ i)n – 1} / {i(1 + n)n}
AP = Advance Payment Requirement in %;
TO = Tender Offer after Arithmetic Check;
i = Discount Rate = 0.04 % per day; n =
Completion time in days
PWF = Present Worth Factor; PV = Present
72
Value
 Detail Evaluations Cont…
Domestic and / or Regional Preference
Domestic or regional preference margin is a
provision to give preference to local companies
even if their bid offer is not over by a percentage
often equals 7.5-10 % for construction works
A contractor can be eligible for such preference
margin if and only if;
Its legal constitution is in accordance with the
Employers’ Country / Region
It is registered according to rules and regulations
of the Employers’ Country / Region
73
 Detail Evaluations Cont…
A contractor eligible for preference margin if and only
if;
It has proof that its majority of works are undertaken
in the Employers’ Country / Region
Its majority of capital shares are held by the
Employers’ Country / Region nationals
Its majority of the board of directors members are
the Employers’ Country / Region nationals
Its 50 % key personnel are nationals of the
Employers’ Country / Region
Its arrangement to execute the work should not
involve major part of its work or net profit other
74 than the Employers’ Country / Region Nationals or
 Detail Evaluations Cont…
Financial Offer Comparison:
After all commercial comparisons are considered
on the same bases; the Tender offer will be
adjusted based on the Cost - Benefit principle
which involves adding costs and benefits
foregone. Besides, the preference margin will also
be added and Least evaluated Bidder is
Determined. That is:
TO evaluated = (TO + BFCT + ACAP + ACFE +/- PM)
Besides, Financial offers per groups of trades of
works are compared in order to evaluate whether
75 tenders are front loaded or not. Front loading often
 Rejection of All Tenders
Rejection of All Tenders is solely the power of the
employer to decide, for the sake of fairness. it is
recommended that such rights shall be exercised
in the following cases:
All Tenders are found non – responsive during
the Preliminary evaluations
Evidences of lack of competitions such as
collusion among bidders, monopoly, etc
Lowest responsive offer is found unreasonably
high.

76
 Local Practice
 Service Contract
Tender Evaluation committee is formed ( counterpart engineer and other

project engineers)
Bid document are evaluated

Technically

Ranking among competitors is done with respect to;-

- Site appreciation (camp site, material location)

- Methodology ( how to make surveying , design etc)

- Scheduling ( Activity scheduling, Manning schedule – man month

impute)
 - Staff – CV of staff is evaluated

- Comment on the TOR ( eg- man- month impute of

surveyor is not enough)

Then financial

Detail breakdown for remuneration ( salary and reimbursable

(secretarial, and transport and accommodation (housing and
allowance)

Then with 80% technical and 20% financially evaluate

  Works Contract

Tender Evaluation committee is formed ( counterpart engineer

and other project engineers)

Technically

Technical evaluation is made with respect to work

methodology, resources (equipment), and so on is done.

Financial
Those who has achieved more than 70% technically will be
called for financial evaluation.

 Locally completion time, advance payment request are not a

base for evaluation.
After the committee has made evaluation it shall be
presented by the team leader for the CAC ( Tender Award
Committee)