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    US$ 34,300LC

    Dec 31, 2006

    C345

    Rs 3.45 mIB

    Dec 30, 2006

    D378

    US$ 39,000BG

    Dec 30, 2006

    E355

    Rs. 3.25 i-n

    BGDec 30, 2006

    F353

    3.53 (Only a photo copy of a

    BG, submitted with bid; the

    original received 2 days laterDec 30, 2006

    ens-tc. - )

    FT n m en nnn

    U,3,D -tZ-,OVVLk -

    ucc -) I , /-VVO

    H330

    Rs. 3.3 mBGDec. 2, 2006

    I348

    Rs. 3.5 rnBG

    Dec 29, 2006

    [Note: The official exchange rate on Sep 2, 2006 was 99.0 and on December 2, 2006was 100.0; 345199 = 3.484848; ; 3781199 = 3.818182; 423/99= 4.2727271

    Which of the above bid securities you consider as acceptable?

    BS 7

    An

    in

    9

    The TEC recommendation is that the 2nd lowest, "Bidder A ", be

    awarded since the bidder which submitted the lowest quotation did not

    submit the Bid Security.

    Can the bid "B" be accepted due to following reasons?

    1. The price difference between the lowest quotation and the

    2nd lowest is Rs.2,330,437.50, for printing of Booklets,which is a substantial.

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    eragency invited quotations from 7 bidders on National

    respect of Printing, Supply and Delivery of Bookletsbidding period of 7 days, there were only 3 responses

    as follows:

    Bidder Price

    Shopping basis

    (18,750 Nos).

    and bid prices

    as requested in the

    TheLetter

    A 5,455,312B 3,124,875C 5,462,859

    lowest bidder "B"'s did not submit a Bid Securityof Invitation.

    . subsequently sent a letter stating that, he could not send the

    Bank Guarantee and ready to do so now.

    3. The delivery period is 21 days which is considered as a very

    short period

    TECHNICAL COMPLIANCETC 1

    A supplier submitted a bid on a piece of equipment which he said fully

    met the bid specifications and attached a catalogue sheet to his bidsubmission. There was a discrepancy between the specifications detailed

    in the offer and the specifications printed on the catalogue sheet; those onthe latter did not meet the requirements laid out in the bid specifications

    whereas those stated in the bid complied. The PE disqualified the bid

    (which was the lowest price) on the grounds that the specifications were

    not met as evidenced by the catalogue sheet. The bidder argued that his

    did comply as lie had undertaken in his offer specifically to supply

    according to the technical specifications in the bid document and the

    catalogue sheet was only a reference material. Therefore, he said heshould be awarded the contract as the lowest evaluated bid.

    What should the Purchaser do?

    TC Z

    An implementation agency called for bids for a container crane with a

    minimum lifting capacity of 40.6 metric tons. A bidder quoted his price

    i iuf we standard container crane tie manufactures, which has an

    operating capacity of 40 metric tons. The executing agency decided to

    disqualify the bidder because it did not meet the minimum specified

    lifting capacity.

    Is the bid substantially responsive and acceptable?

    TC 3

    For a transmission line project, a PE invited bids for 100 km of aluminum

    core steel reinforced conductors.The bid specification stipulated,

    among other things, that the aluminum should be a minimum of 95%

    purity. When the bids were evaluated, the PE proposed award to the

    second lowest evaluatedbidder on the argument that he offered

    conductors with 97% purity, and the additional cost was more than

    balanced by the reduced losses in conduction. The bidding documents

    merely specified the minimum threshold for purity.

    10

    to deduct the value of these features from B's price. This deduction

    made B's bid lower than A's and the PE recommended that the contract

    be awarded to B.

    is this the correct treatment of the bid?

    TC 5

    A project included the procurement of 4wheel drive vehicles to be

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    How will you address this issue?

    TC 4

    The bidding documents for some process equipment included a capacity

    and performance specifications. During the evaluation process, the PE

    found that the two lowest responsive bids (from Firms A and B) met all

    the technical requirement but that the second lowest bidder (Firm B)had included some features which the PE considered non-essential and

    over and above those called for in the specification. The PE proceeded

    Type 4 wheel drive

    Fuel Diesel

    Engine 175HP at 4500 RMP

    Wheel Base 21 feet 6 inches

    Suspension Heavy Duty

    Fuel Tank 70 liters

    Ground Clearance 15 cms.

    Transmission Standard Shift

    Eight bids were received with the required bid security and required

    documents. The PE, as a result of bid evaluation, rejected all but the

    highest bid on the basis that the, failed to comply with one or more of

    the technical specifications listed above.

    Question:

    a) Do these specifications meet the concept of good equipment

    specs?

    b) What should the bidders have done when they received the

    bidding documents?

    c) If you had received a query from the bidders, what would youhave done?

    d) If you had to r1pnr thic hid wcu!d yc~u 4Z:vz scn', ' ,Lc

    no objection to issue the bid documents?

    TC 6

    In an agricultural project in Latin America, the PE invited bids for a plant

    for producingsugar cane juice from sugar cane. In the detailed

    specifications, it was stated that the cane should be crushed using steel

    rollers powered by an A.C. electric motor operating at 220 volts SO

    cycles; there should be three stages of rollers. The first stage with

    rollers diameter of 200 cm rotating at 5 rpm and the second stage with

    rollers of 100 cm rotating at 25 rpm and the final stage with rollers of 10

    cm diameter rotating at 100 rpm.

    Four bids were received. In the evaluation, the PE rejected the lowest

    bid from Australia and proposed award to the second lowest bid from

    Brazil. The Australian bidder protested claiming that he had offered a

    well proven machine widely used all over Asia. Bank queried the PE who

    11

    BID COMPARISIONBC 1

    1. The five bids for construction of the hospital, clinic and powerhousewere after technical evaluation:

    US$

    Foreign Company 1 1,820,000

    Foreign Company 2 1,890,000

    Local/Foreign 3 1,970,000

    Foreign Company 4 2,247,000

    Foreign Company 5 2,647,000

    2. The Government's estimate for the work was US$1,200,000. The

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    ecause use on y wo s ages o s ee ro ers ns ea o ree an wdifferent diameters and speed, and hence, failed to comply with the bid

    specification. Moreover, the PE had no prior experience with such a

    machine.

    Question: How do you analyse ?

    low bid is therefore 50% higher than had been expected. At least

    three alternatives are open to the Government as to what should bedone in this case:

    (a) Reject all bids and call for new bids;

    (b) Award the contract to the low bidder but cut down the work

    called for in the contract, to somewhere nearer US $1,200,000;or

    (c) Reject all bids and enter into negotiations with the low bidder

    or a few low bidders to find out why they have come in so high

    and try to alleviate that problem.

    3. Keeping in mind (i) the time delay and additional cost in going out

    for new bids, (ii) the technical difficulties in "redesigning" the

    project so an award could be made on a slimmed down basis, (iii)

    the lack of competition in awarding the contract according to the

    "new" design, and (iv) the possibilities for unfair pressure on

    bidders, and the potential for lack of competition in a negotiation

    situation:

    (a) Which of the three courses set out above would you follow,

    and why?

    (b) If you chose (a) above what steps would you take to

    expedite the new bidding? and

    (c) If you chose course (c) above which company or companies

    would you invite to enter into negotiations, and why?

    BC 2:The biddin documents re uire that the bid should be valid for a eriod

    12

    B

    26 MNone

    26 M

    C24 M

    5 9/o discount if awarded

    within 90 days22.8 M

    D27 M

    10 % discount with a

    modification letter

    submitted along with the

    bid.24.3 M

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    Discountof 90 days from the deadline for submission of bids. Five bids have been

    received by the Agency. Some of the bidders offered discounts in

    different manner as follows.

    Name

    OriginalBid Price

    Condition

    Bid price if Discount is

    considered

    A25 M

    6 % discount if awardedwithin 60 days

    23.5 M

    E25.8 M

    12% discount with a letter,

    registered on the day

    before the submission of

    bid but Purchaser receive

    one day after bid close22.7 M

    Agency processed the evaluation expeditiously within 30 days of bid9 1

    opening and determined the bidder E at a contract price of 22.7 M as the

    lowest responsive after taking into account the discount of 12 % along

    with the discounts offered by other bidders.

    a) Is the decision of the Agency Correct?

    b) Which of the above bids that you consider as substantial

    responsive?

    c) What is your recommendation for the award of contract?

    BC 3:

    LoadingThe bid documents for water pipe and fittings containedalternate

    f...-Ccncrctc ai-id st&z::P;Ytf, '1111JUJIfir, the requirements

    for internal and external coating. Six bids were received, of which the

    three lowest were close, varying from (local currency units) 5.3 million of5.6 million, as follows:

    Bidder No.1(steel pipe) 5.3 million

    Bidder No.2(steel pipe) 5.5 million

    Bidder No.3(Concrete pipe) 5.6 million

    During evaluation, the Executing Agency decided that cathodic

    protection should be provided if steel pipe were selected.

    It, therefore, adjusted the bids for steel pipe by adding to the bid price

    13

    After adjustment of the bid prices quoted by bidders Nos.1 and 2 for

    steel pipes, Bid No.3 became the lowest evaluated bid. The Executing

    Agency, accordingly, proposed award of the contract to Bidder NO 3.

    Questions:

    Do you agree with the evaluation of bids by the Executing Agency?

    If not, which bidder should be awarded the contract?

    Assuming that cathodic protection of steel pipe was needed, how

    should the Executing Agency proceed to procure it?

    POST QUALLIFICCATIONPOQ 1:

    The PIU using NCB method issued standard BD for works for patching

    potholes and repairs for an urban road with an estimated value of about

    $200,000. Evaluation of bids was to be based on a post qualification

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    documents neither required cathodic protection to be included in the

    prices quoted for steel pipe nor stated that it would be used as a factor

    in the evaluation of bids.

    The Executing Agency based its decision on the statement in the bid

    documentsthat "to determine the lowest responsive bid, operation and

    maintenance

    costs will also be considered".

    process of the bids using the standard criteria provided in the Bank BD

    for small works. By bid closing date, five bids were received and the

    lowest priced bid was lacking data on audited financial statements. You

    are the chairman of the evaluation committee.

    Should this bidder be recommended for award of the contract

    POO.2:

    On an NCB procurement, for the procurement of civil works for the

    reinforcement of river embankments, estimated to cost US$3.3 million,

    the Employer received a complaint from a bidder, ANDERSON, that it

    had submitted the lowest-priced bid but that the TEC had rejected itsbid incorrectly.

    Upon reviewing the bid evaluation report prepared by the TEC, the PC

    f3ur,d ANDERSON ;idd, indeed, submiiied me iowest-priced bid but

    that the TEC had rejected its bid on the grounds that ANDERSON did not

    possess the required experience, as defined in the bidding documents,

    namely that "bidders should have completed at least two contracts of

    similar nature and complexity in the past five years".

    In its bid, Anderson provided a list of the following contractsto

    demonstrate its past experience:

    Name of ContractContract

    Year of

    Price (m)Completion

    Civil Works for the Reinforcement of RiverUS$4.0

    2002

    Embankments

    14

    on ANDERSON - BOB's experience in attempting to demonstrate its own

    experience. In its letter of complaint, ANDERSON protested that,

    because it fully owns ANDERSON - BOB, its experience should be

    counted as ANDERSON's experience and that ANDERSON should,

    therefore, be awarded the contract.

    Question

    '

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    Civil Works for the Reinforcement of RiverUS$4.5

    2003

    Embankments

    However, ANDERSON's bid indicated that the two contracts cited had, in

    fact, been performed by a company, ANDERSON -BOB, which is a

    company wholly owned by ANDERSON, although it is a separate legal

    entity.

    The TEC's bid evaluation report recorded that, because ANDERSON -

    BOB is a separate legal entity from ANDERSON. ANDERSON cannot rely

    POQ 3:An Agency invited bids for 100 PCs for supply to an education institution.

    ProcuremIn respect of post qualification criteria, bidding document required that

    ent ofthe bidder shall be original manufacturers and the PC offered shall be a

    Computermodel which is mass produced, has been previously supplied, and in use

    sin an Asian country, and has a proven experience of at least 24 months.

    Five bids were received. In its evaluation PE rejected iected bid K, L and M and

    recommended award to P on the grounds that Bid K was not submitted

    by a manufacturer, Bid L had not supplied in Asia and Bid M did not fulfill

    the minimum proven experience. Bidder M protested that the PC

    offered by him was indeed in proven service for 28 months on the date

    of evaluation even though it was in proven service for only 23 months

    on the date of bid opening.

    Bid K LKR 10. 5 m CIP Colombo

    Bid L LKR 10.9 m CIP Colombo

    Bid M LKR 10.7 m CIP Colombo

    Bid N LKR 11.8 m CIP Colombo

    Bid P LKR 11.3 m CIP Colombo

    To whom you will award the contract?

    CONTRACT AWARDCA 1:

    A number of responsive bids at reasonable prices from various supplierswere received through ICB. However, the PE found subsequently that he

    could buy the item tor which bids were caked from a iocal 1-11111 (wlmm

    had not bid) at a price lower than any of the bids received. The PE

    proposed to reject all bids and procure this item (without any change inthe specifications) through direct purchase from the local firm.

    Is this a good proposal? Is it acceptable under Procurement

    Guidelines?

    Analyse the case and give your recommendation for future

    CA 2:

    Government of Ruritania in July 2008, using NCB method issued Bank

    standard BD for small works for construction of a Teacher Training

    15

    CA 3:

    During a post audit for procurement for rehabilitation of 10 schools

    estimated at Rs 30 m the following was observed:

    Three bids received:

    Unbalanc

    ed Bid

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    Center estimated to cost about $150,000. By bid closing date, two bids

    were received and the lowest evaluated bidder had submitted a bid that

    was 40% less than the Engineer's estimate. You are the chairman of the

    evaluation committee. Should this bidder be recommended for award of

    the contract?Bid A: Rs 26 m

    Bid B: Rs. 27.4 m

    Bid C: Rs. 27.5 m

    All three bids were substantially responsive.

    In the BC)Q for Bid A, the unit price quoted for windows was

    substantially lower than the other three bids and the estimated cost of

    the Engineer

    The TEC was concerned about the low rate and worried about that

    Bidder A will not complete the work satisfactorily

    The TEC requested the bidder to substantiate the cost of replacing

    windows, giving the breakdown of labour and material.

    The breakdown rate was higher than that was in the bid

    TEC did not want to take a risk and awarded the contract to Bidder B at

    Rs. 27.4 m

    CONTRACT ADMINISTRATIONCAD 1:

    Pursuant to an ICB process, an Agency placed a contract on a supplier in

    IncotermGermany for laboratoryequipmentfor delivery CIF Incotermsat

    CU'10111'00 FOrL.

    Payment was to be made on the basis of a Letter of Credit on presentation

    of Clean Bill of Lading, and other documents. Goods were air-freighted

    and the bidder submitted the Airway Bill, country of origin certificate,

    invoice to the bank, which paid the contract price."The Agency refused

    to take delivery [since the equipment was no more required by him] and

    sued the bank for refund of the money since the LC did not permit airwaybill.

    Question - Is the bank right in having paid ?

    CAD 2:

    incoterms

    Messrs Lemunge & Sons, a Tanzanian construction company, has

    ordered from Fibro A/5, a Danish manufacturer of building materials,

    10 000 fiber boards of certain dimensions Ex Works Aalborg Denmark

    16