2 PRESENTION OUTLINE Introduction: Problems to be circumvented Keeping in mind what is to make a good contactThe List of Tender DocumentsArrangement of SectionsSome of the Important ClausesTechnical SpecificationsSchedule of RequirementsPrice Schedule (s)Standard Forms
3 DEFINITIONS“Standard” means a level of quality or excellence that is accepted as the norm or by which actual attainments are judged“Tender” means an offer in writing by a tenderer to supply at a price goods, services or works, pursuant to an invitation to tender by a procuring entity“Tender Documents” means the documents provided by the procuring entity to tenderers as a basis for preparation of their tenders“Standard Tender Documents” means the documents prepared in a level of quality determined by PPOA, and distributed to PE’s for the purpose of customization and providing them to tenderers as a basis for preparation of their tenders
4 STANDARD TENDER DOCUMENTS Why Standard Documents?Applicable LawTo avoid misinterpretation of obligationsSuppliers Bidding StrategySupplier proposing a low price only to win the contract and seek variances once the contact is signedChange of ownership of managementThe company sold to a third partyThe level of trust and or evaluated capability may changeChanged circumstancesExample: Drastic economic changes beyond the control of the parties.
5 Why Standard Documents? Currency fluctuationMay affect cash flow of the partiesMay result to non-performanceDelaysThe supplier not able to avail goodsIn time at required place.DominancePurchaser or supplier dictating terms to either party. Incomplete or incorrect specificationsLanguageParties all thinking erroneously that they understand what was intended.
6 What to keep in mind Know what you what to obtain and what to avoid Know what your option are when things go wrong.Know your suppliersSeek references if you do know themCreate a win-win situation by envisaging a longer term relationshipDo not allow someone to promise what you suspect cannot be accomplished.E.g.: Allowing unverified qualification or capabilityAvoiding ambiguous termsAmbiguity leads to misinterpretations and disagreements
7 Keeping technology in mind What to Keep in mindKeeping technology in mindLeave your options open as much and as long as possibleKeeps industrial and intellectual property in mindE.g. ensuring that knowledge developed in programs remain the property of the company.Or you are accorded protection by the supplier acting as an agent against prosecution by patent right holderHave a clear dispute resolution clause to let all parties know the procedures for getting relief or remedy if something goes wrong. Part of risk management
8 Thinking of consequences of that termination What to Keep in mindHaving clear termination clauseThinking of consequences of that terminationE.g. return of proprietary documentationAvoid clauses that foresee termination by agreement.
9 Standard Tender Documents Standard tender document for design construction, supply, installation, testing commissioning and handing over of plant/project (turnkey project.)Standard tender document for supply installation and commissioning of plant and equipment.Standard tender document for prequalification of procurement candidates/suppliers.Standard tender document for procurement of works (Roads, Bridges, Water and other Civil Engineering works).Standard tender document for procurement of works (small works)
10 THE PUBLIC PROCUREMENT PROCESS 6. Standard tender document for procurement of Works (Buildings and associated civil engineering Works)7. Standard tender document for procurement of works. (Electrical and mechanical works)8. Standard tender document for procurement of goods. Standard tender document for procurement of insurance servicesStandard tender document for procurement of services
11 THE PUBLIC PROCUREMENT PROCESS Standard tender document for letting, leasing, licensing, tenancy, franchise and management contracting.Standard request for proposals (RFP) (Selection of consultants)Standard tender document for Request for Proposals (RFP) (selection of individual professional consultantsStandard tender document for sale of boarded stores and equipment.The standard tender documents are usually customized by purchasers.
12 ARRANGEMENT OF SECTIONS General arrangement of the standard tender documents:The cover (To be customized by Procuring entities(Introduction (Information to PEs about the document)Section I: Invitation to tenderSection II: Instructions to tenderersSection III – General conditions of contractSection IV – Special conditions of contract
13 ARRANGEMENT OF SECTIONS Section V – Technical Specifications/Scope of Works /TORSection VI – Schedule of Requirements-Section VII- Price ScheduleSection VIII –Standard Forms
14 Section I: Invitation to Tender Instruction to bidders on procedures for submission of bidsDesirable goods or works to be procuredCriteria for evaluation of bidsDefinitions of conditions of the proposed contractClear information to enable tender decide to tender or not.Any other tender requirements.
15 Section II: Instructions to Bidders Important clauses:Eligible TendererEligible goodsCost of tenderingContents of tender documentClarification of tender documentsAmendment of tender document
16 Section II: Instructions to Bidders cont’d Language of tenderDocuments compromising of tenderInstruction on how to complete Tender formsTender prices( with or excluding TAX, Incoterms)Tender currencies (Multi-currency or single Currency
17 Section II: Instructions to Bidders Cont’d Tenderer’s qualificationsTender security/tender securing declarationValidity of tenderFormat of signing of contractSealing and marking of tendersDeadline for submission of tenderNotification and withdrawal of tenderOpening of tendersClarification of tenders
18 Section II: Instructions to Bidders Evaluation of Tenders and Award of contractPreliminary examinationTechnical EvaluationFinancial EvaluationConversions to single currency ( for multiple-currency tenders)Award of contract and Communication to biddersSigning of contract
19 Section II: Instructions to Bidders Procuring entity’s right to vary quantityProcuring entity's right to accept or reject any or all tendersPerformance Security.Caution on corrupt or fraudulent practices (Declaration form to be completed)
20 Section III :General Conditions of Contract Not be amended-Clarification under Special Conditions of Contract sectionDefinitions (terms and Acronyms)Applicable law, Country of origin and StandardsPatent right (Contractor to indemnify PE against third party claims of infringement)Inspection and tests and Insurance( can be clarified through INCOTERMS)
21 Section III :General Conditions of Contract Payments (terms and duration e.t.c) and Prices (include issues regarding conditions for variations, adjustments)Assignments to other parties ( no assigning of obligation without PEs consent)Sub-contracts( conditions for engagements) and Termination of contract
22 Section III :General Conditions Of Contract cont’d Liquidated damagesResolution of disputesGoverning LanguageForce majoure
23 Section IV: Special Conditions of Contract To be prepared by the procuring entityShould not contradict the general conditions of contractsThey complement the general conditions of contractsThe General and Special conditions of contract will become the conditions of the contract when it is finally signed
24 Section V-Technical Specifications To include but not limited to;Scope of works .Bill of Materials. Quantities( for works or services as appropriate)Terms of Reference (for Request for Proposals)Drawings( for works)Testing /Inspection (works and goods)Standards (National/International)Accepted Quality LevelsNote: Specifications to be performance based preferably (No restrictive titles)
25 Section VI – Schedule of Requirements Brief Description of RequirementsQuantity( may be as and when required or fixed)Delivery Schedule (shipment) e.g. selected Incoterms.Note: The starting delivery date will be specifiedThat date should either be the date of the contract award or date of contract signatureOr the date of opening of letter of creditOr the date of confirmation of Letter of Credit
26 Section VII-Price Schedule (s) Contains:ItemDescriptionCountry of OriginQuantityUnit PriceTotal AmountINCOTERM e.g. CIF,CFR,EXW, e.t.c
27 Section VIII – Standard Forms Form of tenderConfidential Business Questionnaire FormTender Security FormContract FormPerformance Security formBank Guarantee for Advance paymentManufacturer’s Authorization formDeclaration form
28 BENEFITS OF STD’sPromotes harmonization and standardization of procurement practicesFacilitates a uniform understanding among practitioners and end-users of the their rights and obligationsPromotes increased capacity by promulgating best practices and facilitating predictability in procurement proceedingsEnhances and promotes transparency
29 BENEFITS OF STD’sClarity of tender requirements-provides information that enables procuring entities to achieve value for money in a procurement processHelps to avoid/minimizes cost overruns/variation ordersAvoids/minimizes disputes in Contract Administration -delayed projectsFlexibility -Allows PE to customize the bid documents and state all conditions of the tenderHelps to minimize risk in public procurementEnsures award to lowest evaluated bidder