Chapter 5:Tender Evaluation-NCB

 Evaluating and comparing bids.

 Evaluation is a process that enables the selection of the bid
that best satisfies the requirements of the procuring entity
 The process involves the assessment of the nature, value and

significance of the goods, works or services being procured.

 Key evaluation process
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Determine evaluation criteria

Include criteria in bid

document

Set up evaluation committee

Evaluating the proposal using the

criteria(detail and preliminary
Preparing the evaluation report, including a
recommendation for award

Approval and award

 Evaluation Criteria
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 Evaluation criteria are the standards and measures used to

determine how satisfactorily a proposal has addressed the
requirements identified in the bidding document.
 They also play a major role in identifying the best overall cost-
effective solution to the requirements of the procurement.
 Once basic evaluation criteria are identified for a procurement
activity, the procuring entity must decide which criteria will be
mandatory and which will be weighted.
 Criteria must be clearly indicated in SBD
 Characteristics of Effective Evaluation Criteria
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➢ Objective - not subject to diverging interpretation

➢ Realistic - given the contract nature and/or value
➢ Measurable - use of measurable criteria to simplify evaluation
➢ Economical to use – their application does not consume an
unreasonable amount of time or resources
➢ Justifiable - make sense, can be justified based on common sense,
technical and legal basis
 The Evaluation Committee
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 The composition and mandate of the evaluation committee is critical to

an effective procurement process.
 Experience in the following areas is often required to effectively
evaluate the proposals:
 ➢ Technical knowledge of the subject matter being procured
 ➢ Applicable law
 ➢ The procurement process
 Under no circumstances should new or revised evaluation criteria be
introduced during the evaluation of bids.
 Evaluating and comparing bids.
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 Preliminary evaluation.
 detailed evaluation is done when prerequisites and essential requirements
fulfilled .
 No Public Body may put a bid for detailed evaluation under the following
conditions:
 a) Where the bid does not meet the minimum quality and other essential
requirements, is found to be non responsive;
 b) Where the bidder is not willing to accept corrections of Arithmetical errors .
 c) Where the bidder does not furnish the bid security
 d) Where the bidder does not produce evidence of facts that need to be
proven in connection with the procurement.
 Bid Evaluation
Major Deviations
 Has an effect on the validity of the bid
 Has been specified in the bid documents as grounds for rejection of the bid
 Is a deviation from the minimum qualification requirements specified in the
bidding documents
 Is an unacceptable deviation from the specifications
 Conditional bid
Minor Deviations
 Has no effect on the validity of the bid
 Has no effect on the price, quality or delivery of the goods or services
offered
 Has not been specified in the bid documents as grounds for rejection
 Cont..
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 Evaluating bids and selecting the successful bidder.

 Conduct detailed evaluation of bids on the basis of the requirements
set forth in SBD
 Criteria not stated in SBD never used for evaluation.
 Conduct the evaluation by either of the following methods;
 a) one envelope, by selecting the bidder offering the lowest evaluated
bid from among bidders submitting responsive technical proposals.
 b) two envelopes, by selecting the bidder scoring the highest point in
the total sum of results of the technical and financial evaluation
conducted
 Tender Evaluation cont..
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 Evaluating bids and selecting the successful bidder.

 Where bidders get equal merit points, preference shall be given to local
products .
 Bidders invited to submit final proposals in accordance with requirements
stated in SBD
 The number of evaluation criteria shall not be more than three
 The criteria shall be stated in the bid data sheet of the bidding document.
 The final proposals as far as possible, be opened and read out in their
presence.
 bidder submitting the better proposal shall be declared the successful bidder.
 Tender Evaluation cont..
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 Evaluating bids and selecting the successful bidder.

 evaluation should be completed before the expiration of price
validity period, if not shall require the bidders to extend it
 Where an invitation to bid attracts only one bidder, the Public
Body may sign contract with that bidder if the proposal is
satisfactory and the price offered less than the market price ;
make sure that content SBD is restrictive
 Cont..
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 Preference.
 with the exception of RFQ and direct procurements, preference shall be granted
 The margin of preference shall be as follows:
 a) drugs or pharmaceutical or medical equipments =25%, where no less than 35%
of the total value of such products is added in Ethiopia.
 b) for procurement of other products 15%,
 c) For construction and consultancy services 7.5. %
 The following conditions must be satisfied to qualify for preference:
 a) The company has to be incorporated in Ethiopia;
 b) >50% capital stock has to be held by Ethiopian;
 Tender Evaluation cont..
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 Preference.
 c) >50% members of the board have to be Ethiopian nationals;
 d) >= 50% of the key staff has to be Ethiopian Nationals.
 For small and micro enterprises established under the relevant law,
 a) 3% when compete with local suppliers.
 b) For ICB , only the preference granted to local companies
 c) security: bid, performance , advance payment guarantee, a letter of
guarantee written by body organizing SME shall be accepted.
 d) They shall be entitled to obtain bidding documents free of charge by
producing their certificate of registration.
 Tender Evaluation cont..
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 Disqualification of bidders.
 A Public Body may disqualify a bidder for any of the following reasons:
 a) Where a bidder offers to supply originating from non eligible
country .
 b) Where the bidder commits an act of violating legal provisions
 d) Where the bidder is debarred by a decision of the Agency
 e) Where it is proved that the bidder involved in bribe and fraud
 Tender Evaluation cont..
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 Approving bids.
 The procurement unit or adhoc committee formed to conduct evaluation of bids
 shall complete the evaluation and submit the result together with its
recommendation, to the PEC, within the bid validity period .
 PEC shall examine the evaluation report in light of the procurement rules and
SBD requirements :
 a) Approve the evaluation and authorize the procurement to Proceed;
 b) Reject the report and order re-evaluation. it shall state the reason
 Tender Evaluation cont..
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 Announcing the successful bidder.

 Public Bodies shall announce the result of a bid evaluation to all bidders
 A letter of award to be sent to a successful bidder is shall not constitute a contract
 A letter of award shall contain the following information:
 a) That the Public Body has accepted his bid;
 b) The total contract price;
 c) amount of the performance security and the deadline for providing such security.
 What to do when the successful bidder is unwilling to sign a contract?
 bid security returned on the following conditions:
 a) If the successful bidder has signed contract and furnished contract security;
 b) If the bid validity period has expired or if a bidder is unsuccessful.
 Tender Evaluation cont..
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 Performance Security.
 Except for procurements by means of RFQ or procurement of rental
services, supplier require to furnish performance security.
 Winner has to provide performance security within 15 days from signing
a contract in the amount of at least 10% of the total contract price
 Where a supplier fails to discharge obligation Public Body shall exercise
its right over the security and demand or confiscate in whole such security.
 performance security shall be returned upon performance of the contract
 Tender Evaluation cont..
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 Acceptable Performance Security type:

 Unconditional bank guaranty, CPO, L/C

 conditional insurance bond for construction or manufacturers of

pharmaceutical products.
 professional indemnity insurance in respect of consultancy service for any
and possible default on the part of the consultant.
 For SME letter of guarantee is accepted

 d)national bank certificate: Enterprises engaged in insurance business may

use their reserve with the National Bank of Ethiopia as performance security
 Tender Evaluation cont..
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 Advance payment
 advance may be paid in an amount not exceeding 30% of the total contract price.
 Type: certified cheque or unconditional bank guarantee
 Domestic contractors and manufacturers of pharmaceutical products and medical
equipments may submit conditional advance payment insurance security .
 For SME and conditional guaranty issued for contractor special bank account created
which the advance payment may be deposited, which shall be withdrawn by join
signature .
 Any advance payment made shall be deducted from each payment
 Tender Evaluation cont..
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 Signing of Contract
 GCC and SCC are part of contract
 mere notification of award doesn’t constitute a contract
 The contract to be signed shall clearly state the obligations of the two parties
 Clearly state type, quality and quantity, the manner and schedule of delivery, the
unit and the total price to be paid and the terms and schedule of payment.
 Identifying the party responsible for incidental services (Transport, Insurance, transit
 Procedure for resolution of disputes .
 The conditions giving rise to forfeiture of performance security,
 The liability of the supplier for delay (0.1% of the value undelivered max=10%)
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 Proforma Invoice
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 Prepared based on the above purchase requisition

 RFQ evaluation
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 BDU, needs to purchase 10 industrial machines and issue an RFQ to three potential suppliers: Supplier A,
Supplier B, and Supplier C.

no Description Measur Q Supplier Supplier Supplier C

ement A B
1 Industrial machines Pcs 10 20,000 18,500 19,000
Evaluation 200,000 185,000 190,000

Summary and Decision: Supplier B selected(lowest price)

• Supplier A: Total price = 200,000
• Supplier B: Total price = 185,000
• Supplier C: Total price = 190,000
 Technical evaluation
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 ABC Manufacturing, needs to purchase 10 industrial machines and issue an

NCB , three suppliers participated : Supplier A, Supplier B, and Supplier C.
 Suppose share of technical proposal shall be 80%
 Pas mark is 70%
no Supplier A Supplier B Supplier C
Pts/100 70 80 90
pts/80 56 64 72
Financial evaluation
 Example: If the lowest cost financial proposal is say ETB 100,000 then
the financial points would be 100 (maximum). Financial scores would
then be: (lowest financial cost / proposal financial cost) x 100 x
weighting% = score , the share of technical proposal shall be 80%
and the remaining 20% shall be the share of financial proposal.

C
 Weighted score and winner
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no Supplier A Supplier B Supplier C

Financial pts 20 16.66 13.32

technical pts 56 64 72
Total 76 80.66 85.32

Winner=supplier C, award value =150,000 Birr

 Evaluation
 Assume that the PB received the following quotation .

Item Quantity Bidder A Bidder Bidder Bidder D

required B C
injera 75,000 10 20 30 40
onion 20,000kg 60 50 40 30
oil 5,000L 600 500 400 300
pasta 10,000kg 150 150 100 50

•Who was the lowest tender with lot evaluation?

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financial evaluation approval
To approve financial evaluation critically check the following
List of vender selected
Legal documents
Threshold
Price evaluation and market survey
Rebate
Athematic error
Vat free privilege
Preference for SME
Clarification, Modification, cancelation
Weighted average
Expert concluding remark