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Evaluation and Qualification Requirements. Evaluation & Qualification Requirements The success of procurement is measured by obtaining the goods, works,

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Presentation on theme: "Evaluation and Qualification Requirements. Evaluation & Qualification Requirements The success of procurement is measured by obtaining the goods, works,"— Presentation transcript:

1 Evaluation and Qualification Requirements

2 Evaluation & Qualification Requirements The success of procurement is measured by obtaining the goods, works, and physical services in a timely manner, at the required quality, and at the best (lowest) possible price the market can offer. To meet this objective, the procurement process conducted by the procuring entity should ensure that the contract is awarded to a bidder who: (i) is capable to perform the contract on time ; (ii) will provide the goods, works and services at the required quality (determination of the responsiveness of the bid) ; and (iii) at the best price conditions.

3 QUALIFICATION PROCEDURES PRE-QUALIFICATION FFIRST STEP IN PROCUREMENT PROCESS FAPPLICABLE TO LARGE AND COMPLEX CONTRACTS IN: ðCIVIL WORKS (e.g. dams, hydropower stations, power transmission lines, pipelines, roads, railways, ports, airports, water treatment plants, etc.) ðINFORMATION SYSTEMS (hardware + software) ðPRIVATE SECTOR PARTICIPATION (e.g. management contracts, BOT-BOO-BOOT, concession) FALL PRE-QUALIFIED CONTRACTORS ARE INVITED TO BID

4 QUALIFICATION PROCEDURES (contd) CLASSIFICATION FPRECONDITION FOR PARTICIPATION IN BIDDING FAPPLICABLE TO NATIONAL CONTRACTORS CLASSIFIED BY CATEGORIES OF WORKS IN ACCORDANCE WITH CONTRACT TYPE AND SIZE AND CONTRACTOR QUALIFICATION FONLY CONTRACTORS BELONGING TO CATEGORY/IES SPECIFIED IN INVITATION TO BID ARE ELIGIBLE TO PARTICIPATE

5 QUALIFICATION PROCEDURES (contd) POST-QUALIFICATION FLAST STEP IN BID EVALUATION PROCESS FAPPLICABLE TO ALL GOODS AND WORKS CONTRACTS FAWARD OF CONTRACT TO QUALIFIED BIDDER WITH LOWEST EVALUATED RESPONSIVE BID

6 QUALIFICATION PASS-FAIL CRITERIA (cont.d) 1. GENERAL EXPERIENCE FAVERAGE ANNUAL TURNOVER: MINIMUM 2 (1,5) OF AVERAGE ESTIMATED COST/YEAR IN LAST - (two to five) - YEARS

7 QUALIFICATION PASS-FAIL CRITERIA 2. SPECIALISED EXPERIENCE FSCOPE OF WORKS: SIMILAR TYPE & SIZE OF CONTRACTS SIMILAR CONDITIONS (e.g. climate) MINIMUM NUMBER - (one to three) - OF CONTRACTS DURING LAST - (five to ten) -YEARS

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12 QUALIFICATION PASS-FAIL CRITERIA (cont.d) 3. PERSONNEL QUALIFICATIONS FMANAGERIAL AND TECHNICAL KEY POSITIONS: ðMINIMUM NUMBER OF SIMILAR PROJECTS SUCCESSFULLY MANAGED BY THE INCUMBENT ðMINIMUM NUMBER OF YEARS OF EXPERIENCE (TOTAL AND IN POSITION)

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14 QUALIFICATION PASS-FAIL CRITERIA (cont.d) 4. FINANCIAL CAPABILITIES FPAST PERFORMANCES FLIABILITIES/ASSETS FCASH FLOW REQUIREMENT MINIMUM AMOUNT AVAILABLE FOR THE PERIOD IN MONTHS BEFORE PAYMENT IS RECEIVED BY CONTRACTOR e.g: CW/PS: $240 M. /48 MTHS = $5m*4 MTHS: $20M. IS: $12M./24 MTHS = $0.5m* 4 MTHS: $2M.

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17 5. EQUIPMENT CAPABILITIES FMINIMUM KEY EQUIPMENT LISTED QUALIFICATION PASS-FAIL CRITERIA (cont.d)

18 6. CONTRACT COMMITMENTS FCURRENT CONTRACTS COMMITMENTS & WORKS IN PROGRESS 7. LEGAL STATUS 8.LITIGATION 9.REFERENCES

19 PRE-QUALIFICATION FOR ICB F PRACTICE ð LARGE OR COMPLEX CIVIL WORKS ð CUSTOM DESIGNED EQUIPMENT ð INFORMATION SYSTEMS ð INDUSTRIAL PLANT ð PRIVATE SECTOR OPERATIONS ð SPECIALIZED SERVICES

20 PRE-QUALIFICATION FOR ICB (contd) F OBJECTIVE ð SAVES EXPENSE OF BIDDING FOR UNQUALIFIED BIDDERS ð IMPROVES INTEREST OF LEADING CONTRACTORS ð INDICATES INTEREST OF POTENTIAL CONTRACTORS ð ESTABLISHES ELIGIBILITY FOR DOMESTIC PREFERENCE (IF ANY) ð REDUCES POTENTIAL FOR CONTROVERSY

21 PRE-QUALIFICATION FOR ICB (contd) F INFORMATION PROVIDED ð DESCRIPTION OF WORKS, SIZE OR COST ð SCOPE OF CONTRACT ð SOURCE OF FINANCE, TERMS OF PAYMENT ð IMPLEMENTATION SCHEDULE ð ELIGIBILITY, LANGUAGE, PROCEDURES ð PRE-QUALIFICATION REQUIREMENTS

22 PRE-QUALIFICATION FOR ICB (contd) F INFORMATION REQUESTED ð MINIMUM NECESSARY ð AVOID CERTIFICATES ð USE STANDARD QUESTIONNAIRE F NUMBER PRE-QUALIFIED ð ALL FIRMS WHO MEET CRITERIA (NO MAXIMUM)

23 Bid Evaluation FOBJECTIVE ðSECURE GOODS/SERVICES AT MOST ECONOMICAL COST ðPRICE ONLY ONE FACTOR FOTHER FACTORS ðTIME OF DELIVERY/COMPLETION ðTERMS OF PAYMENT ðOPERATING COST ðEFFICIENCY AND COMPATIBILITY OF THE EQUIPMENT ðAVAILABILITY OF SERVICES AND SPARE PARTS ðRELATED TRAININIG ðENVIRONMENTAL BENEFITS ðOTHER FACTORS OTHER THAN PRICE TO BE USED FOR DETERMINING THE LEB SHALL BE TO THE EXTENT POSSIBLE EXPRESSED IN MONETARY TERMS, I.E RESALE VALUE.

24 F TIME OF DELIVERY ð EVALUATE LOSS OR GAIN BY LATE OR EARLY DELIVERY FPAYMENT TERMS ð EVALUATE VARIATIONS AT SPECIFIED INTEREST/DISCOUNT RATE Evaluation Methodology Commercial Features (contd)

25 Evaluation Methodology Technical Features FOPERATING COST FFUEL FTRAINING FMAINTENANCE COST FSTANDARDISATION FRESALE VALUE /DEPRECIATED COST FLIFE CYCLE COST FOWNERSHIP COST FCAPACITY FPRODUCTIVITY

26 Evaluation Methodology Minimum Technical Specifications PASS/FAIL CRITERIA FMINIMUM REQUIREMENT ðBELOW MINIMUM: REJECTED ðNO CREDIT FOR BETTER SPEC ðRESPONSIVE = LEB FMAXIMUM REQUIREMENT FRANGE PARAMETERS (MAX <>min)

27 Life Cycle Cost Methods F COST TO OWN AND OPERATE ITEM DURING ITS USEFUL LIFE ð INITIAL PURCHASE PRICE { ADJUSTED FOR EXTRAS, DELIVERY, VARIATIONS IN PAYMENT TERM, ETC. VALUE FOR ADJUSTMENTS ADDED TO BID PRICE ð OPERATING COST DURING LIFE OF ITEM { FUEL, SPARE PARTS, MAINTENANCE (X YEARS) ANNUAL COST DISCOUNTED TO NPV ð OWNERSHIP COST DURING LIFE OF ITEM { ECONOMICAL USEFUL LIFE (X YEARS) RESALE OR SCRAP VALUE DISCOUNTED TO NPV

28 Life Cycle Cost Methods (contd) FEFFICIENCY COST METHOD ðCAPITALIZE DIFFERENCES IN EFFICIENCY IN OPERATION OF ITEMS i.e. BOILER, TURBINE, TRANSFORMER, ETC. DURING LIFE FPRODUCTIVITY COST METHOD ðDETERMINE LIFE CYCLE COST PER UNIT OF OUTPUT FOR COMPARISON PURPOSES {LIFE CYCLE COST OF PLANT (x YEARS) NPV DIVIDED BY TOTAL UNIT OUTPUT OF PLANT

29 On Life Cycle Cost Basis ALL FIGURES IN USD A B TOTAL EVALUATED INITIAL COST 46,400 44,350 (without preference) FUEL COST FOR 8 YEARS 1 45,000 46,000 MAINTENANCE COST FOR 8 YEARS 34,000 28,000 MINUS DEPRECIATED COST/ RESALE VALUE -2,000 -5,000 LIFE CYCLE COST130,400113,350 RANKING DISCOUNTED TO PRESENT VALUE

30 Bid Evaluation Using Life Cycle Costing for Procurement of 100 Urban Buses RELEVANT PART OF THE BID EVALUATION CLAUSES IN THE BIDDING DOCUMENTS THE EVALUATION AND COMPARISON OF BIDS SHALL BE BASED ON THE LIFE CYCLE COST FOR THE VEHICLES DURING THE FIRST 6 YEARS, WORKED OUT IN THE FOLLOWING MANNER F INITIAL PRICE ðCIF PRICE QUOTED FOR BUSES OFFERED FROM ABROAD ðEX-FACTORY/EX-SHOWROOM PRICE FOR VEHICLES OFFERED FROM WITHIN THE COUNTRY

31 Bid Evaluation Using Life Cycle Costing for Procurement of 100 Urban Buses (contd) FOPERATING AND MAINTENANCE COSTS ðFUEL COSTS SHALL BE COMPUTED ON THE BASIS OF 100,000 KM OF OPERATION PER YEAR AT A FUEL PRICE OF 0.80 USD PER LITER, DISCOUNTED TO NET PRESENT VALUE AT A DISCOUNT RATE OF 10%

32 Bid Evaluation Using Life Cycle Costing for Procurement of 100 Urban Buses (contd) FOPERATING AND MAINTENANCE COSTS ðSPARE PARTS COST SHALL BE BASED ON 100,000 KM PER YEAR OF OPERATION, BASED ON THE GUARANTEED FIGURES PROVIDED BY THE BIDDER FOR EACH YEAR, DISCOUNTED TO NET PRESENT VALUES AT A DISCOUNT RATE OF 10 PERCENT ðIF GUARANTEED FIGURES ARE NOT PROVIDED, PURCHASER MAY USE ESTIMATED FIGURES BASED ON PAST EXPERIENCE, IF AVAILABLE

33 Bid Evaluation Using Life Cycle Costing for Procurement of 100 Urban Buses (contd) FDEPRECIATED COST ðPURCHASER SHALL ESTIMATE THE DEPRECIATED COST OF THE VEHICLE OFFERED BASED ON THE GUARANTEED LIFE PRIOR TO THE FIRST MAJOR OVERHAUL, OR BASED ON PAST EXPERIENCE, BUT IN NO CASE MORE THAN 8 YEARS. FBIDDERS SHALL FURNISH ALL THE DATA REQUIRED FOR THE ABOVE COMPUTATIONS AS FURTHER OUTLINED UNDER CLAUSE OF THE TECHNICAL SPECIFICATIONS

34 Bid Evaluation Using Life Cycle Costing for Procurement of 100 Urban Buses (contd) ALL FIGURES IN 000 USD A C 1.INITIAL COST BID PRICE EX-FACTORY/CIF 65,000 70,000 EVALUATION ADJUSTMENT FOR DELIVERY SCHEDULE 6, EVALUATION ADJUSTMENT FOR VARIATION IN PAYMENT TERMS--- 1,000 TOTAL 71,000 71,000 2.OPERATING AND MAINTENANCE COSTS FUEL - GUARANTEED COST (AVERAGE) FOR EACH YEAR (8,000) (6,000) NPV FOR 6 YEARS 34,840 26,130 SPARES - GUARANTEED COST (AVERAGE) FOR EACH YEAR (5,000) (4,000) NPV FOR 6 YEARS 21,775 17,420 TOTAL 56,615 43,550 3.DEPRECIATED VALUE (DEDUCT) LIFE (6 YRS) (8 YRS) DEPRECIATED VALUE 0 12,500 4.TOTAL LIFE CYCLE COST 127, ,050 RANKING 2 1

35 Bid Evaluation Using Life Cycle Costing for Oil Palm Plant RELEVANT PART OF THE BID EVALUATION CLAUSES IN THE BIDDING DOCUMENTS FTHE EVALUATION AND COMPARISON OF RESPONSIVE BIDS SHALL BE BASED ON THE TOTAL LIFE CYCLE COST FOR SIX YEARS, PER UNIT OF OUTPUT FTHE LIFE CYCLE COST SHALL BE THE SUM OF THE INITIAL PURCHASE PRICE OF THE PLANT AND THE COST OF OPERATION IN ELECTRIC ENERGY FOR SIX YEARS OF OPERATION AT A UNIT COST OF US$ 0.10 PER KWH, DISCOUNTED TO PRESENT VALUE AT 12%

36 Bid Evaluation Using Life Cycle Costing for Oil Palm Plant (contd) BID EVALUATION AND COMPARISON ALL FIGURES IN 000 USD A C 1.INITIAL COST 9,500 10,300 2.OPERATING COST PER YEAR (1,200) (1,000) OPERATING COST FOR 6 YEARS NPV AT 12%4,9334,111 3.TOTAL LIFE CYCLE COST 14,433 14,411 4.OUTPUT PER YEAR (TONS) 3,600 4,000 5.EVALUATED COST PER TON OF OUTPUT RANKING 2 1 *A:12 MILLION PER KWH *B:10 MILLION PER KWH

37 Evaluation Methodology Merit Point System (NOT recommended by the World Bank ) FALLOCATE WEIGHTS TO DIFFERENT TECHNICAL FEATURES FESTABLISH RELATIONSHIP BETWEEN QUALITY AND PRICE FSELECT BID WITH ðHIGHEST NO. OF POINTS or ðLOWEST PRICE PER POINT FADVANTAGE: SIMPLE FDISADVANTAGE: SUBJECTIVE ASSIGNMENT OF POINTS

38 Evaluation Methodology Merit Point System (contd) (NOT recommended by the World Bank ) FPOINT WEIGHTAGES TYPICAL ðEQUIPMENT PRICE65-70 ðSPARE PARTS ðTECHNICAL FEATURES ðAFTER SALES SERVICE ðSTANDARDIZATION TOTAL 100 F BIDDING DOCUMENTS ð SPECIFIES POINT WEIGHTAGE

39 Evaluation Methodology Multiple Lots LOTS INCLUDE ALL ITEMS FINCOMPLETE LOTS ð> 10% REJECTED ð< 10% PRICE TO BE ADJUSTED FEVALUATION OF EACH LOT (1, 2, …) FROM EACH BIDDER (A, B, C, …) FCOST OF ALL COMBINATIONS OF LOTS ðA(1) + B(2) + C(3) ðA(1+2) + B(3) ðA(1+2+3) FLOWEST EVALUATED COST COMBINATION


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