Evaluation of bids, Financial Management

Assignment Help:

Evaluation of  bids and determination of the lowest  evaluated responsive and qualified bidder

You learnt how to receive and open bids in the previous sub section. Here you will learn the criteria that you should consider while evaluating the bids.

After opening the sealed bids as per procedure outlined above, you have to evaluate the bids as per procedure given in the Instructions to Bidder (ITB) of the bid document.

You may do the evaluation yourselves or take the assistance of a Technical Evaluation Committee (TEC) as per requirements of the procuring organisation.

You    should    carry   out    initial    examination    to    determine    substantial responsiveness by taking the factors such as:

  • Whether the bidder meets the eligibility criteria laid down by you in the bid document.
  • Check whether the critical documents such as Bid Form, Price Schedule and so on have been duly signed by the bidder.
  • Whether the requisite bid security of stipulated amount, form and validity has been furnished.
  • Whether the bid security, if furnished in the form of bank guarantee, is conditional or otherwise.
  • Check whether the bid is valid for the required period.
  • Check whether the bidder (if he is not a manufacturer) has furnished the Manufacturer's Authorisation in the stipulated form.
  • Check whether the bidder has any reservations to crucial clauses of conditions of contract such as warranty, security deposit, force majeure, AMC, and so on.
  • Check whether the bid is substantially responsive to the specifications required.

After the initial examination and preparation of a list of responsive bidders, you should take up detailed evaluation of these bids. The evaluation is done as per the evaluation criteria stipulated in the bid document.

The bid costs are worked out by following the steps:

  • The bid price should be corrected for any arithmetical errors.
  • In case of discrepancy between the prices quoted in words and figures, the prices in words must be considered.
  • If there is discrepancy in the computed total amount for an item, the quoted rate should be considered and the total amount must be corrected.
  • The bid price should be adjusted for deviations in the commercial conditions such as delivery schedule, minor variations in payment terms and other variations as stipulated in the bid document. These variations are quantifiable but deemed to be non-material in the context of the particular bid - to the extent stipulated in the bid documents.
  • Compute the present value of the future Average Manufacturing Cost (AMC) payments at the specified discount rate and add to the cost of the equipment if stipulated in the bid document.
  • Include all central duties such as custom duty, central excise duty, local taxes, VAT, or ST as per stipulations in the bid document.
  • In case of purchase of equipment, the operation and maintenance cost, cost of spares for appropriate period, after sales service facilities and other factors and method of quantification as specified in the bid document should be evaluated and added to the equipment cost.
  • The cost of incidental services such as installation of equipment, training of personnel, providing operation manuals, and so on should be verified.

After arriving at the evaluated costs of each of the responsive bidder, we should select the bid with the lowest evaluated cost.

You should then check whether the lowest evaluated responsive bidder, as selected above, meets the specified minimum qualification criteria. If the criteria meet, then you can award the contract. If not, check for the second lowest evaluated bidder and see if he meets the specified minimum qualification criteria. If the criteria meet, then you can award the contract to the second lowest evaluated bidder.

An evaluation report must be prepared with detailing the entire process of evaluation and selection of the lowest evaluated responsive bidder, which has met the specified minimum qualification criteria.


Related Discussions:- Evaluation of bids

Funds management, who are the participants in the hedge funds industries

who are the participants in the hedge funds industries

Explain payback period of CHROMEX PLC, CHROMEX PLC Payback period ...

CHROMEX PLC Payback period Payback period must be based on cash flows that is the cash generated from operations and the capital invested by Chromex. Profit is different f

Brixton plans to sell the applicable computer, Brixton Products is consider...

Brixton Products is considering the purchase of a new $520,000 computer-based entry order system.  The cost of the system will be depreciated on a straight-line basis over its five

Historical look at the treasury yield curve, The minimum interest rate ...

The minimum interest rate which investors demand for non-treasury securities is represented by the yield offered on the treasury securities. This is why market particip

Available bid capacity for a bidder, A vailable bid capacity We saw th...

A vailable bid capacity We saw the criterion that qualifies the bidder. Now we will learn about the bid capacity. There are chances that a bidder might acquire more contrac

What do you mean by equity, Q. What do you mean by Equity? Equity - Res...

Q. What do you mean by Equity? Equity - Residual INTEREST in ASSETS of an entity which remains after deducting its LIABILITIES. Additionally, amount of a business' total assets

Structure and participation of hedge funds, Structure and Participation of ...

Structure and Participation of Hedge Funds: The typical structure for a Hedge Fund is to facilitate the tax concerns of investors and fund managers. Basically, there are two or

Price-output determination under monopoly, The potato chip industry in the ...

The potato chip industry in the Northwest in 2007 was competitively structured and in long-run competitive equilibrium; firms were earning a normal rate of return and were competin

On-the-run treasury issues, On-the-run treasury issues are the most r...

On-the-run treasury issues are the most recently auctioned issues of a given maturity. They include Treasury bills of 3-month, 6-month and 1-year maturity;  treas

APR and EAR, Assume a bank charges a 15.5% APR (annual percentage rate) on ...

Assume a bank charges a 15.5% APR (annual percentage rate) on credit card holder compounds quarterly. What EAR (effective annual rate) is the bank is charging? What if they change

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd