1. WORLD BANK Evaluation Process (Goods/Works)

2. BID EVALUATION Objective Other factors
Secure goods/services at most economical cost
Price only one factor
Other factors
Commercial
Time of delivery/completion
Terms of payment
Terms of guarantee

3. BID EVALUATION Other factors (cont’d) Criteria Technical
Technical merits
Operating cost
Maintenance cost
Efficiency
Resale value
Criteria
Shall be stated in bid documents
Ideally all factors quantified in monetary terms

4. BID EVALUATION Bid opening Examination Cost comparison
Price
Price and commercial
Price, commercial and technical
Lowest evaluated bid
Post qualification
Award recommendation
Evaluation report
No objection

5. BID OPENING Public opening Minutes to be recorded
Rationale
Minutes to be recorded
Single stage - single envelope
Bid form
Technical data
Bid price schedule
Bid security

6. PRELIMINARY EXAMINATION
Clarification
Permissible and warranted
Cannot change substance of bid or price
Confidentiality
Important
Examination of bids
Is bid complete? Signed?
Is bid security attached?
Major deviations from bid conditions
Computational Errors
Figures/Words
Unit rate/Total
Misplacement of decimal point

7. PRELIMINARY EXAMINATION
Technical Assessment - substantial responsiveness
Detailed evaluation only for substantially responsive bids

8. DEVIATIONS Unacceptable Late bid Unsigned bid Inadequate bid security
Different prequalified firms and bidders
Different price conditions
Unacceptable alternative, timing and phasing
Unacceptable sub-contracting
Qualification of arbitration rules
Unacceptable applicable law

9. DEVIATIONS For Consideration Different payment terms
Alternative methods/bids
Minor omissions
Limitation of liabilities
Liquidated damages

10. COMPARISON OF BIDS CONVERSION TO COMMON CURRENCY
Object
To determine lowest evaluated bid on date specified
Bid price
Convert into amounts payable in each currency
Common currency
Borrower’s or any other currency
Exchange rates
Official source such as central bank
As on
Any specified date not earlier than 4 weeks prior to bid closing nor later than original date for expiry of bid validity
Date to be clearly specified in bid documents

11. EXAMPLE: CURRENCY CONVERSION (EQUIPMENT)
A B C
1. Evaluated Price US$6,300 DM15, Ll3, FF15,000
Converted to local currency pesos:
At exchange rate on date of bid opening , , ,000
Ranking
3. At exchange rate on date of decision , , ,800
Ranking
At exchange rate on date of , , ,000
expiry of bid validity
Ranking
At exchange rate on actual date of delivery , , , which is 6 months after expiry of original
validity period
Ranking

12. COMMERCIAL FEATURES Price Price adjustment over contract period
Adjust basic price for features, options, etc. To make bid prices comparable
Price adjustment over contract period
Ignore
Delivery point
Add local transportation

13. COMMERCIAL FEATURES Time of delivery Warranty Payment terms
Evaluate loss or gain by late or early delivery
Warranty
Evaluate variation
Payment terms
Evaluate variations at specified interest/discount rate

14. BID EVALUATION FOR URBAN BUSES
A B DOMESTIC BID FOREIGN BID
PRICE EX-WORKS/FOB PES900, DM100,000
OCEAN FREIGHT AND INSURANCE DM5,625
PRICE EXWORKS/CIF PORT OF ENTRY PES900, DM105,625
PRICE EXWORKS/CIF CONVERTED TO , , COMMON CURRENCY (USD)
INLAND TRANSPORTATION ,500
EVALUATED COST DELIVERED AT , , SITE

15. BID EVALUATION FOR URBAN BUSES (CONTD.)
A B DOMESTIC BID FOREIGN BID
PENALTY FOR DEVIATION IN PAYMENT TERMS
DELIVER/COMPLETION EVALUATION ,
WARRANTY
TOTAL EVALUATED COST , ,350
RANKING

16. EVALUATION CRITERIA TECHNICAL FEATURES
Operating cost
Fuel
Training
Maintenance cost
Standardization
Resale value/depreciated cost
Life cycle cost

17. BID EVALUATION USING LIFE CYCLE COSTING FOR PROCUREMENT OF 100 HIGHWAY TRUCKS
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
1. Initial price
CIF price quoted for trucks offered from abroad
Ex-works/ex-showroom price for vehicles offered from within the country
2. Operating and maintenance costs
Fuel costs shall be computed on the basis of 100,000 km of operation per year at a fuel price of 0.80 US$ per liter, discounted to net present value at a discount rate of 10 percent

18. BID EVALUATION USING LIFE CYCLE COSTING FOR PROCUREMENT OF 100 HIGHWAY TRUCKS
Spare 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. If guaranteed figures are not provided purchaser may use estimated figures.
3. Depreciated cost
Purchaser 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
4. Bidders shall furnish all the data required for the above computations.

19. BID EVALUATION USING LIFE CYCLE COSTING 100 HIGHWAY TRUCKS
A B USD USD
1. INITIAL COSTS
BID PRICE EX-WORKS/CIF EVALUATION , ,000
ADJUSTMENT FOR DELIVERY SCHEDULE ,
EVALUATION ADJUSTMENT FOR VARIATION , IN PAYMENT TERMS
TOTAL , ,000
2. OPERATING AND MAINTENANCE COSTS:
FUEL - GUARANTEED COST FOR EACH YEAR (8,000) (6,000)
NPV FOR 6 YEARS , ,130
SPARES - GUARANTEED COST (AVERAGE) (5,000) (4,000)
NPV FOR 6 YEARS , ,420
TOTAL , ,550

20. BID EVALUATION USING LIFE CYCLE COSTING 100 HIGHWAY TRUCKS (CONTD.)
A B USD USD
3. DEPRECIATED VALUE
LIFE (6 YEARS) (6 YEARS)
DEPRECIATED VALUE ,500
4. TOTAL LIFE CYCLE COST , ,050
RANKING

21. BID EVALUATION WORKS Comparison of bids
Conversion to single currency, after excluding provisional sums, contingency
Adjust value of benefits gained or lost for completion period
Adjust for “acceptable” quantifiable variations

22. EXAMPLE: CURRENCY CONVERSION (CIVIL WORKS)
BID A BID B
1. BID AS SUBMITTED
BID PRICE IN LOCAL CURRENCY, PESOS P9,000, P10,000,000
FOREIGN CURRENCY COMPONENT AT
EXCHANGE RATE 28 DAYS PRIOR TO CLOSING
33.3% IN US$ % IN DM
2. EXCHANGE RATES
AS OF 28 DAYS PRIOR TO BID CLOSING US$1=P DM1=P50
ON DATE OF BID CLOSING US$1=P DM1=P55
ON DATE OF DECISION US$1=P DM1=P55
3. LOCAL CURRENCY COMPONENT P6,000, P6,000,000

23. EXAMPLE: CURRENCY CONVERSION (CIVIL WORKS)
BID A BID B
4. FOREIGN CURRENCY COMPONET US$30, DM80,000
FOREIGN CURRENCY COMPONENT
CONVERTED TO LOCAL CURRENCY
EQUIVALENT
A. 28 DAYS PRIOR TO BID CLOSING P3,000, P4,000, B. B. ON DATE OF BID CLOSING P3,600, P4,400, C. C. ON DATE OF DECISION P4,500, P4,400,000
TOTAL BID PRICE
A. AS OF 28 DAYS PRIOR TO BID CLOSING P9,000, P10,000,000
B. ON DATE OF BID CLOSING P9,600, P10,400,000 C. ON DATE OF DECISION P10,500, P10,400,000

24. EXAMPLE: BID EVALUATION FOR CONSTRUCTION OF HOSPITAL
A B
1. PRICE ,000, ,650, (IN LOCAL CURRENCY EQUIVALENT)
2. ADJUSTMENT FOR COMPLETION TIME , (AT 20% ANNUAL RATE OF RETURN)
3. ADJUSTMENT FOR 5% CEILING FOR , LIQUIDATED DAMAGE
4. ADJUSTMENT FOR PARKING LOT , OMITTED (FROM ORIGINAL ESTIMATE)
5. ADJUSTMENT FOR 20% OF , MOBILIZATION ADVANCES REQUESTED AS AGAINST 10% STIPULATED (AT 12% INTEREST RATE)
TOTAL ,702, ,215,000
RANKING

25. DOMESTIC PREFERENCE Goods Civil works
Only to locally manufactured goods which contain labor, raw materials and components accounting for at least more than 30% of the EXW price
Production facility to be used must be engaged in production of such goods at time of bid submission
Applicable import tariff or 15% of CIF whichever is less
Available for all borrowers
Civil works
Only to domestic contractors majority owned by nationals
Domestic contractor must not subcontract more than 10% of the contract price excluding provisional sum to foreign contractors
Must be register in the borrower country
Margin 7-1/2%
No domestic preference to joint venture of domestic and foreign contractor
Only for borrowers below US$755 per capita GNP (Year 2000)

26. DOMESTIC PREFERENCE (ILLUSTRATIONS) CASE 1 - PROCUREMENT OF VEHICLES
A1 B1 C1 C2 C3
PRICE EX-WORKS/CIF , , , , ,000
STEP 1
LOWEST BID IN EACH , , ,500
GROUP
RANKING
AWARD B1

27. DOMESTIC PREFERENCE (ILLUSTRATIONS) CASE 2 - PROCUREMENT OF VEHICLES
A1 B1 C1 C2 C3
PRICE EX-WORKS/CIF , , , , ,000
STEP 1
Lowest bid in each Group , , ,500
RANKING
Since LEB in group C
STEP 2
Lowest in group A and , , , , ,000
All in group C bids
Domestic Preference
Customs Duty or 15% of CIF
For group C

28. DOMESTIC PREFERENCE (ILLUSTRATIONS) CASE 2 - PROCUREMENT OF VEHICLES
A1 B1 C1 C2 C3
Customs Duty 30% of CIF , , ,800
so 15% of CIF
Total for Comparison , , , ,800
RANKING 1
Award A1

29. DOMESTIC PREFERENCE (ILLUSTRATIONS) CASE 3 - 1 PROCUREMENT OF VEHICLES
A1 B1 C1 C2 C3
PRICE EX-WORKS/CIF , , , , ,000
NVP of operating costs , ,000 5,000 8, ,500
Total Evaluated Cost , , , , ,500
STEP 1
Lowest bid in each Group , , ,000
RANKING
STEP 2
Group A and , , , ,500
All in group C

30. DOMESTIC PREFERENCE (ILLUSTRATIONS) CASE 3 – 1 PROCUREMENT OF VEHICLES
A1 B1 C1 C2 C3
Domestic Preference –
Customs Duty 30%, so
15% of CIF , , ,350
Total for Comparison , , , ,850
RANKING
Since the lowest is from
Group C, go back to Step 1
(To ascertain the lowest among
C without domestic preference
Margin
Award C1

31. DOMESTIC PREFERENCE (ILLUSTRATIONS) CASE 3 – 2 PROCUREMENT OF VEHICLES

32. DOMESTIC PREFERENCE (ILLUSTRATIONS) CASE 3 – 2 PROCUREMENT OF VEHICLES

33. POSTQUALIFICATION Only for selected bidder Criteria (goods) Capacity
Technical capability
Product reputation
Financial resources
Parts and service
Past performance

34. POSTQUALIFICATION Criteria (works)
Past experience (size/complexity)
Personnel resources
Equipment resources
Financial capacity
Litigation/arbitration history
If there was prequalification, confirm that bidder’s status is substantially the same as at prequalification

35. BID EVALUATION REPORT Content Reason for rejecting each bid
Received after bid opening
Incomplete
Non-Responsive
Commercial responsiveness
Delivery
Completion date
Payment terms
Warranty

36. BID EVALUATION REPORT Qualifications/alternatives Currency conversion
Errors (arithmetic)
Currency conversion
Include publication official exchange rates
Technical comparison
Each criteria listed and compared (attach table)
Responsive bid comparison
Selection of lowest evaluated bid
Postqualification of selected firm
Recommendation for contract award

37. AWARD CONTRACT Selected bidder should not be required To reduce price
To undertake work not specified in bidding document, or
To modify the bid