1. February 27 - March 3, 2006, Zagreb, Croatia.
WORLD BANK
EVALUATION GOODS
Seminar on Procurement of Goods, Works and Consultancy Contracts financed from World Bank Loans and IDA Credits,
February 27 - March 3, 2006, Zagreb, Croatia.

2. BID EVALUATION OBJECTIVE 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 TECHNICAL
TECHNICAL MERITS, CAPACITY, PRODUCTIVITY
OPERATING COST
MAINTENANCE COST
EFFICIENCY
RESALE VALUE
CRITERIA
SHALL BE STATED IN BID DOCUMENTS
IDEALLY ALL FACTORS QUANTIFIED IN MONETARY TERMS

4. EVALUATION STEPS BID OPENING EXAMINATION COST COMPARISON PRICE
PRICE AND COMMERCIAL
PRICE, COMMERCIAL AND TECHNICAL
LOWEST EVALUATED BID
POST QUALIFICATION
AWARD RECOMMENDATION
EVALUATION REPORT
NO OBJECTION
DEVIATIONS

5. BID OPENING PUBLIC OPENING RATIONALE AND MERITS MINUTES TO BE RECORDED
SINGLE ENVELOPE - SINGLE STAGE
BID FORM
TECHNICAL DATA
BID PRICE SCHEDULE
BID SECURITY

6. BID OPENING TWO STAGE BIDDING INDUSTRIAL PROJECTS - COMPLEX EQUIPMENT
PROJECTS WITH DIFFERENT TECHNICAL SOLUTIONS
FIRST STAGE
INVITE TECHNICAL PROPOSALS
DISCUSS AND FINALIZE TECHNICAL SPECS
SECOND STAGE
INVITE PRICE BIDS ON REVISED SPECS

7. 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?
COMPUTATIONAL ERRORS
MAJOR DEVIATIONS FROM BID CONDITIONS

8. PRELIMINARY EXAMINATION
TECHNICAL SCRUTINY - SUBSTANTIAL RESPONSIVENESS
DETAILED EVALUATION ONLY FOR SUBSTANTIALLY RESPONSIVE BIDS

9. DEVIATIONS UNACCEPTABLE LATE BID UNSIGNED BID INADEQUATE BID SECURITY
DIFFERENT PREQUALIFIED FIRMS AND BIDDERS
DIFFERENT PRICE CONDITIONS
UNACCEPTABLE ALTERNATIVE, TIMING AND PHASING

10. DEVIATIONS UNACCEPTABLE SUB-CONTRACTING
QUALIFICATION OF ARBITRATION RULES
UNACCEPTABLE APPLICABLE LAW

11. DEVIATIONS FOR CONSIDERATION DIFFERENT PAYMENT TERMS
ALTERNATIVE METHODS/BIDS
MINOR OMISSIONS
LIMITATION OF LIABILITIES
LIQUIDATED DAMAGES

12. 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 CURRENCY SUCH AS USD OR EURO
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

13. EXAMPLE: CURRENCY CONVERSION (EQUIPMENT)
A B C
1. EVALUATED US$6, EURO15, L3, FF15,000
CONVERTED TO LOCAL CURRENCY PESOS AT EXCHANGE RATE ON DATE OF BID 63, , ,000 OPENING
RANKING AT EXCHANGE RATE ON DATE OF , , , DECISION
RANKING AT EXCHANGE RATE ON DATE OF , , , EXPIRY OF BID VALIDITY
RANKING AT EXCHANGE RATE ON ACTUAL DATE , , , OF DECISION WHICH IS 6 MONTHS AFTER EXPIRY OF ORIGINAL VALIDITY PERIOD
RANKING

14. COMMERCIAL FEATURES PRICE
ADJUST BASIC PRICE FOR FEATURES, OPTIONS, ETC. TO MAKE BID PRICES COMPARABLE
PRICE ADJUSTMENT OVER CONTRACT PERIOD
IGNORE
DELIVERY POINT
ADD LOCAL TRANSPORTATION

15. COMMERCIAL FEATURES TIME OF DELIVERY
EVALUATE LOSS OR GAIN BY LATE OR EARLY DELIVERY
WARRANTY
EVALUATE VARIATION
PAYMENT TERMS
EVALUATE VARIATIONS AT SPECIFIED INTEREST/DISCOUNT RATE

16. BID EVALUATION FOR URBAN BUSES
A B DOMESTIC BID FOREIGN BID
PRICE EX-FACTORY/FOB PES900, EURO100,000
OCEAN FREIGHT AND INSURANCE EURO5,625
PRICE EXFACT./CIF PORT OF ENTRY PES900, EURO105,625
PRICE EXFACT./CIF CONVERTED TO 45, , COMMON CURRENCY (USD)
INLAND TRANSPORTATION ,500
EVALUATED COST DELIVERED AT , , SITE

17. BID EVALUATION FOR URBAN BUSES
A B DOMESTIC BID FOREIGN BID
PENALTY FOR DEVIATION IN PAYMENT TERMS
DELIVER/COMPLETION EVALUATION ,
WARRANTY
TOTAL EVALUATED COST , ,350
PRICE PREFERENCE (15% OF CIF) ,337
EVALUATED COST WITH PREFERENCE , ,687
RANKING

18. EVALUATION CRITERIA TECHNICAL FEATURES
OPERATING COST
FUEL
TRAINING
MAINTENANCE COST
STANDARDIZATION
RESALE VALUE/DEPRECIATED COST
LIFE CYCLE COST
OWNERSHIP COST
CAPACITY
PRODUCTIVITY

19. ON “LIFE CYCLE COST” BASIS
TOTAL EVALUATED INITIAL COST 46, ,350 (without preference)
FUEL COST FOR 8 YEARS 52, ,000 (discounted to present value)
MAINTENANCE COST FOR 8 YEARS 34, ,000
MINUS DEPRECIATED COST/ RESALE VALUE 2, ,000
LIFE CYCLE COST , ,350
DOMESTIC PREFERENCE , (15% OF CIF)
EVALUATED COST WITH PREFERENCE , ,687
RANKING

20. LIFE CYCLE COST METHODS
COST TO OWN AND OPERATE ITEM DURING ITS USEFUL LIFE
INITIAL PURCHASE PRICE
ADJUSTED FOR EXTRAS, DELIVERY, VARIATIONS IN PAYMENT TERM, ETC.
VALUE OF ADJUSTMENTS ADDED TO BID PRICE
OPERATING COST DURING LIFE OF ITEM
FUEL, SPAREPARTS, MAINTENANCE, (X YEARS)
ANNUAL COSTS DISCOUNTED TO NPV
OWNERSHIP COST DURING LIFE OF ITEM
ECONOMICAL USEFUL LIFE (X YEARS)
RESALE OR SCRAP VALUE DISCOUNTED TO NPV

21. LIFE CYCLE COST METHODS
EFFICIENCY COST METHOD
CAPITALIZE DIFFERENCES IN EFFICIENCY IN OPERATION OF ITEMS, i.e. Boiler, Turbine, Transformer, etc., DURING LIFE
PRODUCTIVITY COST METHOD
DETERMINE 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

22. 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-FACTORY/EX-SHOWROOM PRICE FOR VEHICLES OFFERED FROM WITHIN THE COUNTRY
2. OPERATING AND MAINTENANCE COSTS
2.1 FUEL 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 PERCENT

23. BID EVALUATION USING LIFE CYCLE COSTING FOR PROCUREMENT OF 100 HIGHWAY TRUCKS
2.2 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 BASED ON PAST EXPERIENCE IF AVAILABLE.
3. DEPRECIATED COST
3.1 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. AS FURTHER OUTLINED UNDER CLAUSE OF THE TECHNICAL SPECIFICATIONS

24. BID EVALUATION USING LIFE CYCLE COSTING 100 HIGHWAY TRUCKS
A B USD USD
1. INITIAL COSTS
BID PRICE EX-FACTORY/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

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

26. RELEVANT PART OF THE BID EVALUATION CLAUSES IN THE BIDDING DOCUMENTS
EVALUATION USING LIFE CYCLE COSTING FOR THE PROCUREMENT OF A 500 MW COAL-FIRED POWER STATION BOILER COMPLEX
RELEVANT PART OF THE BID EVALUATION CLAUSES IN THE BIDDING DOCUMENTS
BIDS WILL BE EVALUATED ON LIFE CYCLE PRINCIPLES BY EVALUATING THE INITIAL COST AND THE COST OF OPERATION OF THE PLANT OVER A PERIOD OF 20 YEARS. THE EVALUATION OF THE OPERATING COSTS WILL BE BASED ON THE CAPITALIZED COST FOR EACH PERCENT OF BOILER EFFICIENCY ABOVE THE MINIMUM ACCEPTABLE, AS SPECIFIED IN THE TECHNICAL SPECIFICATION, DISCOUNTED TO PRESENT VALUE AT A DISCOUNT RATE OF 10 PERCENT. THE EVALUATION WILL BE ON THE FOLLOWING NORMS:

27. EVALUATION USING LIFE CYCLE COSTING FOR THE PROCUREMENT OF A 500 MW COAL-FIRED POWER STATION BOILER COMPLEX
1. BID PRICE FOR THE BOILER AND MANDATORY SPARES.
2. PRICE FOR SPARES REQUIRED FOR THE FIRST FIVE YEARS OF OPERATIONS, CAPITALIZED TO PRESENT VALUE AT PERCENT DISCOUNT.
3. ADJUSTMENTS TO BID PRICE FOR OMISSIONS, DEVIATIONS AND EXCEPTIONS TO TECHNICAL AND COMMERCIAL CONDITIONS IN THE BIDDING DOCUMENTS.
4. CAPITALIZED COST SAVINGS FOR BOILER EFFICIENCY AT THE RATE OF US$500,000 PER EACH 0.1 PERCENT ABOVE PERCENT.
5. CAPITALIZED COST FOR THE AUXILIARY POWER CONSUMPTION AT US$2,000 PER KW.

28. EVALUATION USING LIFE CYCLE COSTING FOR THE PROCUREMENT OF A 500 MW COAL-FIRED POWER STATION BOILER COMPLEX
ALL FIGURES IN USD (IN THOUSANDS)
1. INITIAL COSTS A C
TOTAL QUOTED PRICE, INCLUDING , , MANDATORY SPARES
2. ADJUSTMENTS
(A) FOR OMISSIONS IN MANDATORY 3, SPARES
(B) COMMERCIAL EXCEPTIONS 15, ,000 (delivery, payment terms)
(C) TECHNICAL EXCEPTIONS 28, ,000 (omission of equipment, capacity shortage, etc.)
INITIAL COST , ,000

29. EVALUATION USING LIFE CYCLE COSTING FOR THE PROCUREMENT OF A 500 MW COAL-FIRED POWER STATION BOILER COMPLEX
ALL FIGURES IN USD (IN THOUSANDS) ADJUSTMENTS FOR A C FOLLOW-ON COSTS
(A) CAPITALIZED COST OF SPARES 40, , FOR FIVE YEARS
(B) CAPITALIZED COST SAVING -12, , FOR HIGHER EFFICIENCY
(C) CAPITALIZED COST OF AUXILIARY 5, , POWER CONSUMPTION
TOTAL ADJUSTMENT FOR 33, ,000 FOLLOW-ON COST
4. TOTAL EVALUATED COST ON 264, , LCC PRINCIPLES RANKING

30. BID EVALUATION USING LIFE CYCLE COSTING OIL PALM PLANT
RELEVANT PART OF THE BID EVALUATION CLAUSES IN THE BIDDING DOCUMENTS:
THE EVALUATION AND COMPARISON OF RESPONSIVE BIDS SHALL BE BASED ON THE TOTAL LIFE CYCLE COST FOR SIX YEARS, PER UNIT OF OUTPUT. THE 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 OF A UNIT COST OF US$0.10 PER KWH, DISCOUNTED TO PRESENT VALUE AT 12 PERCENT.

31. BID EVALUATION USING LIFE CYCLE COSTING OIL PALM PLANT
BID EVALUATION AND COMPARISON
ALL FIGURES IN USD (IN THOUSANDS)
INITIAL COSTS A B
1. INITIAL COST , ,300
2. OPERATING COST PER YEAR (1,200) (1,000)
OPERATING COST FOR 6 YEARS , , NPV AT 12 PERCENT
3. TOTAL LIFE CYCLE COST , ,411
4. OUTPUT PER YEAR (TONS) , ,000
5. EVALUATED COST PER TON OF OUTPUT
6. RANKING
A-12 MILLION .10 PER KWH
B-10 MILLION .10 PER KWH