PROCUREMENT MANUAL FOR GOODS 2016...Procurement Manual for Goods 1.4. Review and interpretation of the Manual 1.4.1.This Manual shall be reviewed once in every three years and, if

CONSTRUCTION DEVELOPMENT CORPORATION LIMITED

PROCUREMENT MANUAL FORGOODS 2016

FOREWORD

The erstwhile Mechanical Division of the Department of Roads was delinkedin July 2006 from the Ministry of Works and Human Settlement (MoWHS) tofunction as a self-sustaining commercial unit under the Ministry.Subsequently, on 7th December 2009, Construction DevelopmentCorporation Limited (CDCL) was incorporated under the Companies Act ofthe Kingdom of Bhutan 2000, becoming the full-fledged state-ownedenterprise under the Ministry of Finance.

In January 2015, CDCL was brought under the sole ownership of DrukHolding and Investment Limited (DHI). Since then, a huge transformationtook place with the introduction of series of company policy documents.Further, the amalgamation of DHI-INFRA and CDCL in October 2016 hasincreased the size of the company as well as its mandate.

Prior to 2009, the core business was to carry out repair, maintenance andfabrication works and hiring out its fleet of construction machinery. Sinceits incorporation, its business has diversified into the construction sectorwith major projects in roads and bridges. CDCL also initiated operator’straining in heavy equipment and machineries in collaboration with theDepartment of Labour under the Ministry of Labour and Human Resourcethat has been very successful and similar training is still continued.Besides, building capacity in hydropower constructions becomes one of thecore mandates. In the recent times, CDCL has not only set benchmarks interms of maintaining quality, timely completion and use of the state-of-arttechnology but more importantly CDCL has managed to fulfill theGovernment’s wish to deploy 100 percent Bhutanese in the constructionsite.

CDCL had its own procurement manual revised in 2013. It covers all threetypes of procurement rules in a single manual. Besides, so much changehas taken place over the years in terms of its core business. CDCL not onlyprocures goods, works and services, but it takes up projects from otheragencies either through open tender or direct approach. In this case, theprojects have to be delivered as per the agreed timeline and following anormal procurement method would become a bottleneck. Therefore, uniqueprovisions are provided in this manual to fast-track procurement processand enable timely completion of the contract works.

2Construction Development

Corporation Limited

The Procurement Manual for Goods was developed by DHI Consultants inclose consultation with CDCL Management. It was carried out through acomplete review of the existing policies, guidelines, systems andprocedures within the DHI Companies as well as international best practicesto meet the requirements of CDCL commensurate with its mandates.

The Manual was approved by the Board during the 42nd Board Meeting heldon 23rd December 2016 and this Manual shall come into immediate effect.

All Offices under CDCL are expected to strictly comply with the principles,guidelines and procedures of this Procurement Manual for Goods.

(Phuntsho Gyeltshen)

Chief Executive Officer


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AMENDMENT RECORD

Amendment No. Amendment Date Details of Amendment


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Procurement Manual for Goods

Table of ContentsFOREWORD..............................................................................2

AMENDMENT RECORD...............................................................3

CHAPTER 1: INTRODUCTION.......................................................7

1.1. Preamble...........................................................................................71.2. Objective...........................................................................................71.3. Scope and applicability of the Manual...............................................81.4. Review and interpretation of the Manual...........................................81.5. Ethical Standards in Procurement......................................................91.6. Conflict of Interest...........................................................................101.7. Confidentiality.................................................................................111.8. Definitions and Acronyms................................................................11

CHAPTER 2: PROCUREMENT RESPONSIBILITY AND BUDGETING

..............................................................................................16

2.1. Responsibility for procurement........................................................162.2. Procurement Budgeting...................................................................16

CHAPTER 3: REGISTRATION AND QUALIFICATION OF BIDDERS....17

3.1. General............................................................................................173.2. Creation of Registration System......................................................173.3. Eligibility criteria for registration.....................................................183.4. Qualification criteria for registration................................................193.5. General Suitability...........................................................................193.6. Financial Capacity............................................................................193.7. Technical Capacity...........................................................................20

CHAPTER 4: METHODS OF PROCUREMENT AND MODES OF

TENDERING.............................................................................21

4.1. Procurement methods.....................................................................214.2. Open Bidding...................................................................................214.3. Limited Bidding................................................................................214.4. Limited Enquiry...............................................................................224.5. Direct Contracting...........................................................................224.6. Framework Contracting...................................................................244.7. Spot Purchase..................................................................................244.8. Procurement during Disaster and Exigency.....................................254.9. Intra-DHI Companies Contracting....................................................254.10. Threshold limits for determination of methods of procurement......254.11. Modes of tendering..........................................................................26

CHAPTER 5: ORGANIZATION OF PROCUREMENT.........................30

5.1. Tender Committee...........................................................................305.2. Composition and Level....................................................................30


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5.3. Role of the Tender committee..........................................................325.4. Tender Opening Committee.............................................................325.5. Role of Tender Opening Committee.................................................325.6. Role of Tender Evaluation Committee..............................................33

CHAPTER 6: BIDDING DOCUMENTS...........................................35

6.1. Bidding documents..........................................................................356.2. Essential conditions to be incorporated in the bidding documents. 36

6.2.1. Eligibility and qualification criteria for bidders........................366.2.2. Bid validity...............................................................................366.2.3. Bid Security.............................................................................376.2.4. Performance Security..............................................................386.2.5. Advance in Supply Contracts...................................................396.2.6. Standards................................................................................396.2.7. Quantities................................................................................396.2.8. Subsidiaries, Joint Ventures and Subcontractors.....................406.2.9. Use of Brand Names................................................................406.2.10..............................................................Delivery Time and place

416.2.11.................................................................Shipping and Delivery

416.2.12............................................................................Currency of Bid

416.2.13..................................................................................Price of Bid

426.2.14..................................................Terms and methods of payment

426.2.15...........................................................................Alternative Bids

436.2.16.........................................................................Price Adjustment

436.2.17..............................................................................Force Majeure

436.2.18....................................................................Liquidated Damages

446.2.19...........................................................................Warranty Period

446.2.20................................................................Settlement of disputes

446.3. Bid Submission Form and price schedule........................................456.4. Clarification on bidding documents.................................................456.5. Amendment of bidding documents.................................................456.6. Cancellation of Bid...........................................................................46

CHAPTER 7: BIDDING PROCESS................................................47

7.1. General............................................................................................477.2. Confidentiality of bids and proceedings..........................................477.3. Invitation of bids..............................................................................477.4. Submission and receipt of bids........................................................487.5. Minimum time limit for bid submission............................................49


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7.6. Language of bid...............................................................................50

CHAPTER 8: THE EVALUATION OF BIDS AND AWARD OF

CONTRACT..............................................................................51

8.1. Bid Opening.....................................................................................518.2. Minimum number of bids.................................................................528.3. Modification and withdrawal of bid..................................................538.4. Evaluation and comparison of bids..................................................538.5. Test, quality assurance and inspections..........................................558.6. Treatment of abnormally low or high bid.........................................558.7. Post Tender Negotiations.................................................................568.8. Award of contract............................................................................578.9. Variation in contract........................................................................598.10. Contract amendment......................................................................598.11. Contract monitoring........................................................................598.12. Fraud & Corruption..........................................................................59

APPENDIX...............................................................................60

Appendix - I: Procurement for Projects Related Goods..............................60Appendix - II: Tender Committee and Evaluation Committee Declaration Form 63Appendix - III: INCOTERMS 2010...............................................................64Appendix – IV: Bid Register Format...........................................................67Appendix - V: Record of Bid Opening........................................................68Appendix - VI: Sample Evaluation Report..................................................71

ANNEXURES............................................................................78

Annexure-I: Determination table of responsiveness.................................78Annexure-II: Comparative statement of offers..........................................79


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CHAPTER 1: INTRODUCTION

1.1. Preamble

1.1.1. In order to achieve the best value for money in the procurementof goods, it is essential to procure the right goods at the righttime and at a right price by giving fair and equal opportunities toall the bidders and by conducting the procurement process in afair and transparent manner. Therefore, a well-documented policyguideline is required to ensure that procurement is made in awell-coordinated manner with a systematic and uniform decisionmaking process.

1.1.2.Construction Development Corporation Ltd (CDCL) is a companywholly owned by the Druk Holding and Investments Limited(DHI). As per section 1.1.2.4 of the Procurement Rules andRegulations 2009 of the Ministry of Finance, RGoB, companies,financial institutions, and trust funds fully or partly owned by theRGoB are allowed to adopt separate rules and regulations for themanagement of their procurement, provided such rules arewithin the broad principles of MoF procurement rules andapproved by the respective Boards of Directors or Trustees.

1.1.3.This Procurement Manual (hereinafter referred to as the Manual)has been prepared based on the broad principles and guidelinesof the RGoB rules and regulations.

1.1.4.Therefore, CDCL, in pursuance to the approval accorded by itsBoard of Directors prescribes this Manual for the procurement ofGoods.

1.2. Objective

1.2.1.The purpose of this Manual is:

a) To achieve economy and efficiency through an informedprocurement procedure thereby ensuring costeffectiveness and the best value for the money.

b) To ensure fair and equal access to the informationrequired for the bidding process among all bidders.


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c) To ensure fairness, objectivity and transparency ofprocurement through the application of standardprocurement procedures.

d) To achieve uniformity and standardization inprocurement of Goods.

e) To achieve the best value for money and effectivecompetition in the procurement of goods.

f) To ensure effective procurement in the shortest possibletime through a reliable supplier.

1.2.2.However, the rights & obligations of CDCL and the suppliers areto be governed by the bidding documents, and by the contractsigned by the two parties.

1.2.3.This Manual shall serve as a policy and procedure guide for theofficials of CDCL involved in the procurement process. It shall bemandatory to follow the provisions of the manual and anydeviation or relaxation, only with respect to procedural aspectsfor a particular procurement case, may be permissible with theapproval of the Board.

1.3. Scope and applicability of the Manual

1.3.1.This Manual shall apply to procurement of all Goods except asotherwise specified in Appendix I.

1.3.2.This Manual may not apply to procurement of Goods for thefollowing:

a) Where the procurement of Goods has been assigned toanother RGoB/DHI agency, including deposit works,provided that the entrusted agency is guided by theprovisions of its own procurement system.

b) When the Board specifies a specific procurement processfor certain Goods in view of the basic security interests ofthe country/CDCL or the requirements of special securitymeasures in particular Goods.

c) Procurement of goods which are mandatorily channelizedthrough agencies specified by the Government.

d) Where the procurement is of goods for projects funded byexternal assistance and where the relevant financingagreement provides for adherence to specificprocurement procedure of the donor/funding agency.

e) Where CDCL partners with international/domestic firm(s) toform a Joint Venture (JV) to undertake a project and theprocurement of goods required for the project is governedby the Joint Venture (JV) agreement.


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1.4. Review and interpretation of the Manual

1.4.1.This Manual shall be reviewed once in every three years and, ifnecessary, it shall be amended. Changes may be required bychanges in policy, rules and guidelines issued by relevantauthorities.

1.4.2.Changes to any policy provision of this Manual, before or afterthe review, shall be incorporated only with the approval of theBoard of Directors. Modifications to any procedural aspects for aparticular procurement case may be approved by the Board.

1.4.3.Proposals in this regard shall be forwarded to the Head of theDepartment who will be the Nodal Officer for obtaining approvalof the Board. An updated version, incorporating all amendmentsto the Manual, shall be compiled by the Procurement unit andcirculated after completion of the review as per clause 1.4.1above.

1.4.4.Head of the Department of Corporate Services shall be the firstlevel of authority with regard to interpretation of any provisionsof this Manual. In case of any unresolved issues, the same will bereferred to the CDCL’s Executive Committee and then to theBoard, if required.

1.5. Ethical Standards in Procurement

1.5.1.Staff must adhere to the ethical standards and responsibilitiesthat apply to procurement activities in order to protect theintegrity, fairness and transparency of the procurement process.

1.5.2.Procurement Staff shall adhere to Chapter 11: Code ofConduct and Work Ethics of the Internal Service Rule and theclauses most relevant to procurement activities which are but notlimited to:

a) Accomplish and discharge their duties and responsibilitiesprudently and diligently to the best of their professionalknowledge, skills and abilities in order to meet the time,quality and productivity standards of work.

b) Strive to maintain the highest standards of integrity, honesty,fortitude, selflessness, loyalty, right attitude, right aptitude,patriotism and endeavor to maintain professional excellencein the service of the company and to upkeep the CDCL's publicimage as a respectable high performance company.

c) Engage faithfully in activities that are consistent with theirofficial responsibilities and authority and which do not damagethe business interests of CDCL.


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d) Utilize time, supplies, equipment and office facilities with duecaution, care and honesty solely for the benefit of CDCL.

e) Avoid all forms of discrimination, never giving nor receivingspecial favours or privileges which might adversely affect theway in which the work is performed.

f) Do not misuse their official position and authority.

g) Do not take additional compensation in the form of fee, gift,reward, gratuity, expenses, etc., that could result in real orperceived preferential treatment, impediment of CDCL’sefficiency or economy, loss of complete independence andimpartiality, decision making outside official channels,disclosure or use of confidential information acquired throughemployment.

1.5.3.Other conducts that procurement staff shall prohibit are:

a) Shall not intentionally alter, destroy, falsify or misplace orrender any official document, record or file entrusted to themby virtue of their functions, which document, record or file isintended to be kept as part of the records of CDCL.

b) Shall neither offer nor promise any favour, gift, remunerationor any other personal benefit to any third party with a view tocausing him or her to perform, fail to perform or delay theperformance of any official act.

c) Shall neither seek nor accept any favour, gift, remuneration orany other personal benefit from any third party in exchangefor performing, failing to perform or delaying the performanceof any official act.

d) Shall not accept any honour, decoration, favour, gift orremuneration from any Supplier. If refusal of an unanticipatedhonour, decoration, favour or gift would cause embarrassmentto CDCL, the staff member may receive it on behalf of CDCLand then report and entrust it to the CEO, who will eitherretain it for CDCL or arrange for its disposal for the benefit ofCDCL or for a charitable purpose.

1.6. Conflict of Interest

1.6.1.Procurement staff’s private interests, such as outside professionalrelationships or personal financial assets, shall not interfere orappear to interfere with the performance of his or herprofessional functions or obligations.

1.6.2.Procurement staff shall not use CDCL assets, including human,financial and material assets, office or knowledge gained from


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official functions for private gain or to prejudice the position ofsomeone that does not favour where a staff is seen to benefit,directly or indirectly, or allow a third party, including family,friends or someone they favour, to benefit from the staffdecisions.

1.6.3.Procurement staff shall prohibit from any involvement in aprocurement action with a Supplier in which they have a financialinterest. In cases where a conflict of interest could occur, suchconflict should be reported to the CEO, who should review thefacts and decide whether the staff member should carry out theprocurement activity.

1.7. Confidentiality

1.7.1.Procurement related documents or information that are part ofthe procurement process, which are not publicly available,leading to place a supplier or a bidder at a disadvantage, provideunfair advantage to a supplier or adversely reflect upon thereputation and integrity of the company shall be consideredconfidential.

1.7.2.Procurement staff shall not allow a Supplier access to confidentialinformation on a particular supply, which may provide unfairadvantage to the supplier over other suppliers.

1.8. Definitions and Acronyms

1.8.1.For the purpose of this Manual, the following words and phrasesare defined as following:

(1) Administrative approval: The formal acceptance of theproposal for procurement of goods by the CompetentAuthority, for which preliminary estimate has been madeand submitted along with the proposal. The administrativeapproval shall lapse if the procurement action is notcommenced within a period of twelve months.“Administrative sanction” is synonymous.

(2) Affiliate: A company in which another company hasminority interest, or, which is related to another company insome way.

(3) Authorized Signatory: Officer of the company with powerof attorney who signs the contract agreement related to thesupply of goods or other transactions related to theprocurement of goods

(4) Award of contract: The decision of CDCL to enter into acontract with a supplier for delivery of specified goods which


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has been conveyed to the supplier through a letter ofAcceptance and/or signing of a contract.

(5) Bhutan Schedule of Rates (BSR): A publication deliveredby Ministry of Work and Human Settlement prescribing ratesfor works by individual components, the quality, quantity,and scope of which is governed by the Specifications forBuilding and Road Works “SBRW”. It is designed primarily asa tool for estimation of construction project costs.

(6) Bid: An offer to supply goods in accordance with the termsand conditions set out in the bid documents inviting suchoffers. The term “tender” is synonymous with the term “bid”.

(7) Bid security: A security, serving as a guarantee that the Bidshall remain valid until the expiry of the bid validity period,delivered along with the Bid by a Bidder in a form and inaccordance with the terms and conditions specified in thedocument inviting the Bid which is enforceable in Bhutan.The terms “bid bond”, “bid guarantee, and “earnest money”are synonymous in terms of their effect and purpose.

(8) Bidder: An eligible individual or legal entity that participatesin a competitive procurement process defined by thisManual.

(9) Bidding documents: The set of documents sold or issuedby CDCL to potential bidders in which the specifications,terms and conditions of the proposed procurement areprescribed. The terms “bidding documents”, “tenderdocuments” and “bid documents” are synonymous.

(10) Bid Opening Committee: A committee that has theresponsibility of opening the bid and record the documentssubmitted along with the bid in the record format and handover to the Evaluation Committee.

(11) Bill of Quantities (BOQ): Summary of the units and unitprices of the items proposed under the contract.

(12) Board of Directors or Board: Directors collectivelyacting as the Board of directors of CDCL.

(13) CDCL: Construction Development Corporation Limited. Theterms “procuring agency” and “Company” are synonymous.

(14) CEC: CDCL’s Executive Committee

(15) Chief Executive Officer: A full-time executive appointedby the Board in general meeting to manage the day-to-dayaffairs of CDCL or as otherwise determined by the Board, orthe Articles, or shareholders in general meeting.

(16) Coercive practice: Impairing or harming, or threateningto impair or harm, directly or indirectly, any party or theproperty of the party to influence improperly the actions of aparty in connection with the procurement process.


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(17) Collusive practice: An arrangement between two or moreparties designed to achieve an improper purpose, includinginfluencing improperly the actions of a party.

(18) Competent Authority: An authority who has power toexercise or to discharge any duty or function under thisProcurement Manual or under the DoP of CDCL.

(19) Competitive bidding: The process whereby bidderscompete for the supply of goods under the procurementprocedures set out in this Manual.

(20) Conclusion of contract: The point at which a contract forthe supply of services is executed between CDCL and thesupplier and considered to be legally binding in accordancewith the Laws of the Kingdom.

(21) Contract: A legally binding agreement in writing enteredinto between CDCL and the supplier on acceptable termsand conditions and which are in compliance with all therelevant provisions of the laws of the Kingdom of Bhutan.

(22) Contractor: An individual or a legal entity entering into acontract to execute works, supplies or services.

(23) Corrupt practice: The offering, giving, receiving, orsoliciting, directly or indirectly, anything of value to influenceimproperly the actions of another party.

(24) Delegation of Power (DoP): A set of authority delegatedto various positions in CDCL.

(25) Eligible bidder: A bidder who is (a) authorized to conductbusiness in Bhutan, and (b) otherwise complies with therequirements of the bidding documents.

(26) DHI Companies: All DHI portfolio companies.

(27) Exigency: A compelling and emergent need that will eitherdelay project delivery resulting in penalty or loss of time, orthat will lead to serious damage or injury to property orpersons, if not addressed immediately.

(28) Engineer: A person or a consulting firm appointed byCDCL to act as an engineer for the purposes of the contractand named as such in the special conditions of contract.

(29) Finance and Investment Division: The unit under theDepartment of Corporate Services who is responsible forfinance and accounts functions.

(30) Firm Fixed Price: Procurement of goods and services onthe basis of reasonably definite functional or detailedspecification when fair and reasonable prices can bedetermined at the outset.

(31) Framework contract: Framework contracting also knownas Rate contacting is a contract awarded in accordance with


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the procurement procedures set out herein whereby CDCLand the supplier agree to the terms and conditions, inparticular the price, which shall apply to the supply ofdesignated materials as and when required for a maximumperiod of one (1) year.

(32) Fraudulent practice: Any act or omission, including amisrepresentation, suppression of facts or disclosure ofincomplete facts that knowingly or recklessly misleads, orattempts to mislead, a party to obtain a financial or otherbenefit or to avoid an obligation or to influence theprocurement process.

(33) Goods: Any object in solid, liquid or gaseous form that hasan economic utility or value, which can be exchanged ortraded.

(34) Government agency: An entity of the RGoB whose sourceof funding is the RGoB.

(35) Honours or gifts: Tokens of commemorative or honorarycharacter, such as scrolls, certificates, trophies or otheritems of essentially nominal monetary value received fromgovernment or non-governmental agency, university orprofessional bodies. Attendance to functions such asmeetings, conferences, dinners and receptions shall not beconsidered as a receipt of a favour, gift or remuneration.

(36) Invitation of Bids: A document published or notified byCDCL, which informs the potential bidders that it intends toprocure goods. The term “Notice Inviting Tender (NIT)” issynonymous.

(37) Incoterms: International commercial trade terms oftenforming part of a contract for sale of goods and published bythe International Chamber of Commerce.

(38) Joint Venture (JV): An association of legal entities/persons that pool their resources and skills to undertake alarge or complex contract in the role of “Supplier,” with alllegal entities/ persons (partners in the JV) being legallyliable, jointly and severally, for the execution of the contract.

(39) Lead Agency: A DHI portfolio company which leads theprocurement process after entering into an agreement withCDCL to carry out a procurement action.

(40) Legal entity: A commercial firm, company or otherincorporated body recognized by the laws of the Kingdom oran association of such bodies such as joint ventures.

(41) Liquidated Damages: The amounts which contractoragrees to pay as damages, if the party breaches anobligation (such as delay in delivery).


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(42) Lowest evaluated bid: The bid which offers the bestvalue for money, evaluated on the basis of various objectivecriterions set out in the bidding document. It does notnecessarily mean the “lowest quoted price”.

(43) Nominated subcontractor: A supplier approved by CDCL,based on the request of the supplier in terms of theprovisions of the contract, to provide a pre-specified item inthe price schedule and nominated as subcontractor to themain supplier for such purpose.

(44) OEM: Original Equipment Manufacturer

(45) Performance Security: A financial instrument that servesas a source of compensation for a Supplier’s failure to fulfilthe terms of a Contract.

(46) Prequalification: An assessment with made by CDCL ofthe appropriate level of experience and capacity of potentialbidders expressing interest in undertaking a particularcontract before inviting them to bid.

(47) Price schedule: Summary of the quantities, measurementunit and unit prices of the items to be procured under thecontract. The term “Bill of Quantities” is synonymous.

(48) Procurement: The activity of purchase of goods by CDCL.

(49) Procurement procedure: Process of procuring goods asoutlined in this Manual.

(50) Procurement Unit: The Procurement Unit under theDepartment of Corporate Services unless specifiedotherwise.

(51) Procurement Staffs: Managers, Procurement Officers,Procurement Assistants and other staff members under theProcurement Unit authorized to carry out procurementfunctions.

(52) Project: Any temporary or time-bounded construction orengineering related activity, such as construction of newroad, bridge, launching – de-launching of bridges etc. and asspecified in the Articles of Incorporation, managed by aProject Implementation team and resulting in deployment ofmanpower, materials, time and budget.

(53) Project Team Leader: The focal person who is the headof the Project Implementation Team responsible for overallplanning, directing and supervising project activities. ProjectTeam Leader can be Project Director, Project Manager orProject Engineer.

(54) Proof of receipt: Acknowledgement received in writing.

(55) Proprietary item: Any item that is exclusively owned byan individual or a legal entity under a trademark/patent or


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that has an intellectual property rights or exclusive legalright to manufacture, license, sell or perform.

(56) Requisitioner: An official who is responsible fordeveloping a description of requirements and submitting it toa Procurement Unit on time for procurement.

(57) Risk Vulnerability: The extent of the risk exposure of theCompany to the goods. Goods which are critical to the coreoperation of the company and are difficult to source andhave high risk vulnerability.

(58) Standardization: Procurement on an exclusive basis of asingle brand of product or service or from a sole sourceprovider e.g. IT equipment.

(59) SBD: Standard Bidding Document.

(60) Supplier: An individual or a legal entity entering into acontract with CDCL for the supply of goods.

(61) Tender committee: Committee collectively acting as aTender Committee that has the responsibility of supervisingand ensuring that the procurement procedures outlined inthis Manual are followed by the officials who are involved inthe procurement process.

(62) Tender Evaluation Committee: A committee that hasthe responsibility of evaluation of the bid opened by theOpening Committee and present to the Tender Committee.

(63) Threshold value: Monetary value, expressed in Ngultrum,for determining the specific procurement procedure requiredto be followed for any procurement.

CHAPTER 2: PROCUREMENT RESPONSIBILITY AND BUDGETING

2.1. Responsibility for procurement

2.1.1. All procurement of goods including sundry items (i.e. stationery,furniture, fixtures), including goods required for Projects shall becarried out by the Procurement Unit under the Department ofCorporate Services.

2.1.2. Projects and Regional Offices shall procure goods on a local basiswithin the authority and delegation of power vested in them.


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2.2. Procurement Budgeting

2.2.1. In order to ensure planned procurement and to avoid repetitiveemergency purchases, CDCL shall assess the materialrequirement for the next year in advance and make necessarybudgetary provisions in the Budget, which shall be approved bythe Board. Further administrative approval from the Board shallnot be required once the Board has approved the Budget.However, administrative approval from the Competent Authorityas per DoP shall be required for new goods/supplies not includedin the Budget, and for any deviation from the approved budgetfor ongoing goods/supplies.

2.2.2. Procurement budgeting shall be done keeping in view theprescribed inventory norms, budget provision, stock position,consumption pattern, quantity expected to be received duringthe year against pending orders and in consultation with therespective officers for requirements received from them.

2.2.3.


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CHAPTER 3: REGISTRATION AND QUALIFICATIONOF BIDDERS

3.1. General

2.2.4. The purpose of the Registration System is to limit theprocurement time needed due to the repeated qualification ofbidders for similar procurements and to ensure a continued poolof suitably qualified suppliers. It is a system of generalprequalification signifying the capability of a bidder to handle aparticular type of contract and volume of contract. This processcan be adopted for items for which repetitive procurement isneeded and where specifications are standardized. It shall bemade clear in the notification for registration of suppliers thatregistration by itself does not guarantee that contract for supplyof goods would be awarded to the registered supplier.

2.2.5. The process of registration shall only be applicable for domesticbidders. For international bidders, CDCL shall develop andmaintain a database of probable bidders for each type of supplycontracts.

2.2.6. Bidders who are not registered in accordance with the proceduresset out in this chapter will be required to demonstrate theirqualifications to CDCL while participating in the procurementprocedure.

2.3. Creation of Registration System

2.3.1. CDCL shall establish Lists of Registered Suppliers, hereinaftercalled Register for items for which repetitive procurement ismade or for such items for which only limited sources of supplyare available.

2.3.2. The opening of invitation for enrolling in the Register shall benotified by CDCL in a mass circulated newspaper within thecountry or outside the country depending upon the nature ofsupply and availability of prospective suppliers on an annualbasis. The notification shall also be displayed on the website ofCDCL.

2.3.3. The intending suppliers shall be offered an opportunity for aspecified time initially to apply for admission in the Register. Suchapplications shall be in writing and complete with all necessaryinformation and supporting documents as prescribed by CDCL inthe notification. The Applicant is solely responsible for thepreparation and submission of its applications. Any cost orexpenses incurred by the Applicants in connection with thepreparation or delivery of applications shall be solely at the costof Applicant.


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2.3.4. The written application may be followed by further clarifications/discussions between the applicants and the authorizedrepresentatives of CDCL to clarify and/or supplement theinformation contained in the original application.

2.3.5. The evaluation of suitability of the applicants shall be made inaccordance with the eligibility and qualification criteria set out inclause 3.3 and 3.4.

2.3.6. Following evaluation and approval, CDCL shall establish a List ofRegistered Suppliers for specific items.

2.3.7. Requests for admission to the Register may thereafter be madeat any time, but shall only be reviewed on a yearly basis. CDCLshall have the right to de-list any of the suppliers based on itsresponses to the tender invitations and performance in respect ofcontracts awarded. Such de-listing of suppliers shall be approvedby the Corporate Level Tender Committee.

2.3.8. A flow chart of the registration procedure is shown in the figurebelow:

2.4. Eligibility criteria for registration

2.4.1. CDCL may deny the registration of a supplier for reasons directlyrelated to its capability and availability of resources tosuccessfully perform the contract.

2.4.2. The supplier shall be eligible to get registered if he holds a legallicense, where required, from the authorities responsible forgranting such license under the laws of Kingdom of Bhutan tosupply goods and meet the eligibility criterion and qualificationcriterion prescribed in the notification for registration.


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2.4.3. Supplier shall be ineligible for registration, if:

a) S/he does not hold a legal license issued by an authorityresponsible for granting such license under the laws of theKingdom of Bhutan to supply goods.

b) S/he is debarred from participation in any publicprocurement by any Competent Authority as per law.

c) S/he is insolvent or is in receivership or is bankrupt or is inthe process of being wound up, or have entered into anarrangement with creditors.

d) His/Her affairs are being administered by a court, judicialofficer or by an appointed liquidator.

e) S/he has suspended business or is not in any analogoussituation arising from similar procedures under the laws andregulations of the country of establishment.

f) S/he has been found guilty of professional misconduct by arecognized tribunal or professional body or any Governmentauthority or judiciary.

g) S/he has not fulfilled obligations with regard to thepayments of taxes, social security or other payments due inaccordance with the laws of the country in which he isestablished or of the Kingdom of Bhutan.

h) S/he has performed poorly in previous contracts.

2.4.4. A firm which has been engaged by CDCL to provide consultingservices for the preparation or implementation of a project, andany of its affiliates, shall be disqualified from registration andaccordingly from providing goods resulting from or directlyrelated to the firm’s consulting services for such preparation orimplementation. This provision does not apply to the firms(consultants, contractors, or suppliers), which together areperforming the supplier’s obligations under a turnkey or designand build contract.

2.5. Qualification criteria for registration

2.5.1. All suppliers shall be given equal opportunity of submittingapplication for registration. It shall be ensured that unqualifiedsuppliers, who do not have the requisite technical and financialcapabilities to execute the contract, are not registered. If anysupplier is excluded from the registration, the reason for suchexclusion shall be intimated to the supplier.

2.5.2. CDCL shall state in the invitation for registration if anypreferences would be applicable to any specific class of suppliers.In addition to clause 3.3 the selection criteria may be applied onany or all of the selection criteria listed below.


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2.5.3. Different qualification criteria may be prescribed for registrationof suppliers for different items of goods keeping in view thenature of goods.

2.6. General Suitability

2.6.1. CDCL may require the party to furnish evidence establishing thatnone of the conditions enlisted under clause 3.3, which debarsuppliers from registration, applies to it. The evidence can besubmitted by means considered appropriate for the country ofestablishment of the applicant.

2.7. Financial Capacity

2.7.1. CDCL may require the suppliers to furnish evidence of theirfinancial capacity to fulfil the requirement of the supply of goods,including a tax clearance certificate from the tax authority of therespective country, the Department of Revenue and Customs incase of Bhutanese suppliers/bidders.

2.8. Technical Capacity

2.8.1. Evidence of party’s technical ability may be furnished by any ofthe following means:

a) A description of the quality management process ofmanufacturer.

b) The supplier shall furnish documentary evidence thatthe goods offered have been in production.

c) The supplier shall furnish a performance certificate fromthe users for satisfactory performance of the goods forwhich registration is sought prior to the date ofapplication for registration.

d) The supplier shall furnish details of manufacturingcapacity and the quantity, which can be supplied onannual basis.


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CHAPTER 4: METHODS OF PROCUREMENT AND MODES OF TENDERING

4.1. Procurement methods

2.8.2. CDCL shall follow any one or a combination of the followingprocurement method depending on need, including thecomplexity and value of contracts:

a) Open Bidding.

b) Limited Bidding.

c) Limited Enquiry.

d) Direct Contracting.

e) Framework Contracting.

f) Spot Purchase.

g) Procurement during disasters and exigencies.

h) Intra-DHI Contracting.

2.9. Open Bidding

2.9.1. CDCL’s primary method of procurement shall be Open Bidding,unless the use of another procurement method specified inclause 4.1.1 is justified as per the estimated value of theprocurement or the exigency of the procurement. Open bidding isencouraged, as it promotes cost-minimization through thecompetition principle.


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2.9.2. Under this method, all prospective suppliers who are capable ofproviding the required goods and have eligibility for entering intoa contract will be given an equal opportunity to submit bidsfollowing a notification.

2.9.3. Under this method, modes of communication as specified inclause 7.3.1. shall be used.

2.1. Limited Bidding

2.1.1.This method may be used under circumstances, where openbidding is not appropriate and limited bidding is considered moreappropriate. This method may be used under any of the followingsituations:

a) When the estimated value of the contract does not exceedthe threshold value as prescribed in clause 4.10.1 forlimited bidding.

b) When the available time for receipt of goods is insufficientto follow the Open Bidding procedure.

c) Where the number of qualified suppliers or manufacturersfor a particular item is limited or a prequalificationprocedure has been adopted as per provisions of Chapter3.

d) In the case of exigencies.

2.1.2.Under the Limited Bidding process, CDCL shall ensure that bidsare sent to a minimum number of three (3) registered bidders toensure competitive prices. In absence of the list of registeredbidders, the names and number of bidders to be selected for thepurpose of limited tendering shall be approved by an authoritycompetent to approve the bidding documents for the relevantprocurement. These names and numbers shall be selectedaccording to previous participation of the bidders in the similarprocurement, as well as any other available information withCDCL.

2.1.3. If, for reasons of exigency or any other valid reason, limitedbidding is to be resorted to, for threshold value exceeding theceiling as prescribed for limited bidding, justification and thereasons thereof, will be recorded in writing and approval of theaward approving authority, as defined in the DoP, with respect tolimited bidding for the estimated value of the particularprocurement case, will be obtained.

2.10.Limited Enquiry

2.1.4.This method allows CDCL to compare prices solicited from atleast three registered bidders and award the contract to one ofthem. This method may be used:


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a) Where the estimated value of the contract doesn’texceed the threshold as prescribed in clause 4.10.1 forthis method.

b) In the absence of sufficient (less than three) number ofbids in response to Limited Bidding method carried outearlier.

2.1.5.The following procedure shall be followed to use this method:a) Bids are invited from at least three bidders providing

the specifications and the terms and conditions.

b) The offers are evaluated and compared and thecontract awarded.

2.2. Direct Contracting

2.10.1. Contracting without competition is known as DirectContracting. This method allows negotiating the terms andconditions directly with a particular supplier.

2.10.2. This form of procurement may be utilized by CDCL onlyunder the following circumstances:

a) The required equipment is proprietary and obtainable onlyfrom one source.

b) Where additional items are required under an existingcontract, and that the unit price to be paid is not more thanthe original price. The repeat order shall be placed within ayear from the placing of the original order and if the valueof the additional supplies does not exceed 20% of theoriginal contract value.

c) For the purpose of standardization of equipment or spareparts where such standardization should be compatiblewith existing equipment. Under such situation, the priceshall be reasonable, or the advantage of another make orsource of equipment shall be considered before selectingthe direct contracting method of procurement.

d) For the procurement of additional supplies intended aspartial replacement, repair of equipment, supplies incontinuation of an existing procurement contract where achange in supplier would oblige CDCL to acquire materialhaving different technical characteristics would result inincompatibility or technical difficulty in operation andmaintenance of disproportionate additional cost.

e) When, for reasons of exigency brought about byunforeseeable events the minimum time limits involved inthe Open or Limited Bidding method cannot be followed.


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f)In exceptional cases, such as in response to natural disasters.

g) In the case of purchases to be made for the purpose of dayto day administration or under special circumstances, orwhere the value of procurement do not justify the Open/Limited tendering process.

h) In case of procurement of spare parts and materials directlyfrom the approved manufacturers or their suppliers forproprietary equipment. For suppliers or dealers, certificateof origin of parts or dealership certificates are necessary.

i)In case there is no other manufacturer/authorized dealer ofequipment, which has technological/competitive advantageover other equipment and which CDCL intends to purchase.

j)When construction materials such as concrete/hollow blocks,steel, pre-fabricated/fabricated products and any otherlocally produced/manufactured construction materials areavailable in the market.

2.10.3. The following procedure shall be followed for directcontracting:

a) A quotation shall be invited from one supplier, indicatingthe specifications sought and terms and conditions ofsupply.

b) Request for quotation shall indicate the description andquantity of the goods, as well as delivery (or completion)time and place.

c) Negotiations shall be held with the supplier to settle on thefinal price. Further, reasonability of the final settled priceshall be ensured by benchmarking the settled price to theprice of similar goods purchased recently, by conductingonline/offline research on price of the good.

2.11.Framework Contracting

2.11.1. This method of procurement may be used for the supply ofdesignated items e.g. stationery, electrical and hardware items,vehicle tires, stock maintained inventory items, etc., over a givenperiod of time. Under this method, CDCL and the Supplier agreeto the terms and conditions and in particular the price for anagreed time period not exceeding one (1) year. The contractperiod may be extended but not beyond 50% of the duration ofthe original contract period, except in the case of specializeditems where longer duration is found beneficial to CDCL with theapproval from CEO. The CEO in such cases shall be determinedby taking into account the original value of the frameworkcontract plus the estimated value for the extended period. Aframework contract is in the nature of a standing offer from theSupplier. The contract comes into force only when a formal orderis placed. Under this method supplies may be ordered under the


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contract at different intervals depending upon the requirementswithout further Competitive Bidding.

2.11.2. The procurement method (i.e. open, limited tender) to befollowed for this procurement shall be based on the thresholdlimit as specified in clause 4.10.1.

2.11.3. While seeking response for the framework contract fromprospective bidders, the bid document shall provide theminimum guaranteed value of the supplies, which will beawarded to the bidder. If order for the minimum guaranteedvalue of supplies is not given in the specified period of time, thesupplier, at his discretion, may agree for extension of thecontract for the remaining value at the same rates, but he shallnot be eligible for any financial compensation for such non-compliance of the provisions of the contract by the owner. Thequantum of the value of the supply guaranteed shall bedetermined based on the nature of supply and past experiencewith reference to requirement of such items/ materials.

2.12.Spot Purchase

2.12.1. In case of items of less value or it is not possible to followthe methods of procurement specified above in view of theconstraint of time. For this procurement method, the thresholdvalue as specified in clause 4.10.1 shall apply.

2.12.2. For such purchases, the procurement staff or authorizedofficial, after exercising his/her judgement as to the quality andprice of the goods, shall obtain price quotes via phone, e-mail,fax or in person. The request for quotations from suppliers shallcover all aspects of the purchase (price, quality, quantity,delivery time, etc.). In order to ensure economy, efficiency andfair market prices, the procurement staff or authorized officialshall assess which quotation offers best value for money andrecord the assessment in a written note to the procurement file,stating that he/she has in good faith obtained such value.

2.13.Procurement during Disaster and Exigency

2.13.1. CDCL may be allowed to exercise greater flexibility whileprocuring goods during a disaster or an exigency. Under thesecircumstances, the open bidding process may be relaxed infavour of limited bidding or direct contracting process as may befeasible considering the value of the procurement and nature ofthe exigency. The minimum bidding period may also be relaxedby a competent authority. The authority for accordingadministrative approval for procurement during disaster andemergency shall be as per DOP.


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2.13.2. Prior to awarding a contract on an exigency basis, theProcurement staff should consider whether the requirement couldbe split and a certain portion procured on an exigency basis andthe remainder through competitive bidding, provided it does notthreaten or seriously impinge operational requirements.

2.13.3. In normal circumstances, exigency would not be anacceptable rationale for waiver of competitive bidding, when thesituation is the result of undue or unjustified delay or omission onthe part of the Procurement Unit or the management. However,due to natural disasters, loss of life or serious injury to persons orif a significant loss of property is imminent CDCL shall proceedwith the procurement on an urgent basis without delay with theapproval from the CEO.

2.14. Intra-DHI Companies Contracting

2.2.1.CDCL may enter into cooperation with other DHI Company (ies)to achieve economies of scale and other benefits. In this methodCDCL may elect to have one company lead the procurementprocess (the “Lead Agency”), and the Lead Agency will followtheir procurement manual.

2.2.2.This method may be used when the tender committeedetermines that CDCL lacks the relevant expertise in procuringthe type of goods being sought, and the other DHI Company(s)has such expertise with the anticipated result that CDCL wouldsave time and administrative costs.

2.2.3.This method may be used only when CDCL and the other DHIcompany(s) enter into cooperation through a Memorandum ofUnderstanding or when a policy directive to use such method hasbeen issued by DHI.

2.15.Threshold limits for determination of methods of procurement

2.15.1. The threshold value refers to the estimated value of thecontract, including all applicable taxes and duties and shalldetermine the method of procurement. The estimated value ofcontracts shall be the one prepared by the Procurement Unitin collaboration with the user department. The thresholdlevels for application of a relevant procurement method shallbe as follows:

Particular OpenTender

LimitedTender

LimitedEnquiry

SpotQuotation


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Goods Above Nu.3 Million

Nu. 1 Million toNu. 3 Million

Below Nu. 1Million

Below Nu.100,000/-

Minimumtime limits

for thesubmission

of bids

28 days 14 days 7 days -

2.15.2. The submission days shall be counted as continuous days,inclusive of any public holidays in between.

2.15.3. The threshold values shall be reviewed every third year and ifnecessary revised with the approval of the Board.

2.15.4. Procurement of goods shall not be split with the sole objectiveof avoiding the application of a particular procurementmethod.

2.15.5. Notwithstanding the provisions under clause 2.15.4 procurement of goods can be split into a series of separatelots for awarding of contracts wherever such a provision hasbeen made in the bid documents. Under such circumstances,the total value of all such lots shall be taken into account forthe purposes of the thresholds limits and determining therelevant procurement method to be applied.

2.3. Modes of tendering

2.15.6. CDCL shall follow one of two modes of procuring work asexplained below. The mode of tendering would be decided bythe Tender Committee depending upon the requirement ofindividual procurement. The two modes of tendering are:

a) Single stage process.b) Two-stage process

2.15.7. Single Stage Process: Where Technical Bid and Price Bid areinvited together at the same time, it is called a Single StageProcess. There are two types of Single Stage Processes - (i)Single Stage Single Envelope and (ii) Single Stage TwoEnvelopes. This can be adopted in Open Bidding as well asLimited Bidding methods.

2.15.7.1.Single Stage Process – Single Envelope : This process shallbe the normal procurement mode adopted. Both the technicaland financial proposals shall be submitted in one sealedenvelope together and shall be accordingly opened publicly atthe date, time and place mentioned in the bidding document.This mode of tendering may be adopted where the cycle timefor procurement is shorter and specification of the item to be


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procured are standard and there is no need to modify suchspecification based on the response from the bidders.

2.15.7.2.Single Stage Process –Two Envelope: Two Envelopemethod should be adopted where the proposed purchaserequires a higher level of technical competence and therefore,there is a need to satisfy whether the bidders are qualified toperform the contract. The technical and financial proposalshall be enclosed in two separate sealed inner envelopes andwhich shall be further enclosed in a sealed single outerenvelope. Only, the Technical proposal will be opened first,publicly at the date, time and place mentioned in the biddingdocument and the financial proposal shall remain unopenedand sealed. Only those bidders whose bids are technicallyqualified and found responsive will be invited to witness theopening of the financial proposal at the date, time and placementioned in the invitation letter. The financial proposals ofthe bidders whose technical proposal are not qualified shall bereturned unopened immediately after completion of technicalevaluation. The following flow diagram shows the Single Stage– Two Enveloped process of tendering:

2.15.8. Two Stage Process: The Two-Stage Process may be adoptedunder the following conditions:

a) In large and complex contracts where technically unequalproposals are likely to be encountered.

b) Where CDCL is aware of its options in the market, but for agiven set of performance requirements, there are two ormore equally acceptable technical solutions available to it.


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c) Where CDCL is unable to set the specifications precisely inadvance and needs to obtain the input from experiencedbidders in order to finalize the scope of the purchase andset the specifications in a way, which guarantees the bestand most appropriate outcome.

2.15.8.1.The two stage process shall be conducted as follows:

a) In the first stage of the process, bidders shall be invited tosubmit only their Technical Proposals along with the BidSecurity. As a part of the Technical Proposal, the biddersshall be asked to submit documentary evidence in a formatto be prescribed in the Instructions to Bidders, establishingthe bidder’s qualifications to perform the contract.

b) The Technical Proposals shall be reviewed to determinetheir responsiveness to the requirements.

c) During the review of Technical Proposals, CDCL shalldetermine to its satisfaction whether the bidders arequalified to perform the contract satisfactorily. Anaffirmative determination shall be a prerequisite for furtherconsideration of the Technical Proposal. A Negativedetermination shall result in the disqualification of the bid.

d) The un-priced substantially responsive Technical Proposalsshall be examined and discussed with the bidders to arriveat a most suitable technical solution.

e) Following discussions between CDCL and the responsivebidders, the bidders may revise or adjust their proposals tobetter meet CDCL’s requirements. The Technical Proposalsof bidders who are unable or unwilling to amend theirproposals so as to conform to the agreed technicalstandard may be rejected by CDCL.

f) In the second stage, the responsive bidders shall beprovided the addenda of the agreed technical changesbased on which they shall submit their revised TechnicalProposals and their Financial Proposals. Bidders shall begiven sufficient time to calculate the prices to be offered.

g) At a date and time fixed by CDCL and advised to thebidders, the revised Technical Proposals and the FinancialProposals shall be opened in public as per clause 8.1.

h) The revised Technical Proposals and the Financial Proposalsshall be evaluated and the award of contract shall be madeto the lowest evaluated bidder as per clause 8.1.5.

2.15.8.2.The following flow diagram shows the Two Stage process oftendering:


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CHAPTER 5: ORGANIZATION OF PROCUREMENT

5.1. Tender Committee

2.15.9. CDCL shall have a Tender Committee (TC), whose compositionis defined under clause 5.2. As the Tender Committee, it shallalso be responsible for ensuring that procurements areconducted properly and as per procedures defined in thisManual.

2.15.10. Whenever necessary, the TC shall appoint a Tender OpeningCommittee and a Tender Evaluation Committee for thepurpose of opening and evaluation of bids respectively. CDCLshall ensure that no member of the Tender Committee has anyconflict of Interest with any of the participating bidders. If anyconflict of interest arises, the same member shall excuse fromthe committee in writing. The committee shall sign adeclaration as per the Appendix – II after opening of the bids.

2.15.11. A minimum quorum of more than 50% members of the TC isrequired to convene the award meeting.

2.15.12. All members of the Tender Committee shall give priority to thework in the committees over their routine work. The membersof Tender Committee should be such who are conversant withthe procurement procedures as per this Manual.

2.15.13. The decision of the Tender Committee shall be throughconsensus. Any difference of opinion should be discussed andcleared and a consensus should be reached. In spites ofdiscussions and efforts if consensus is not achieved thedifference of opinion shall be recorded in writing.

2.15.14. No member of a Tender Committee shall communicate anyinformation on the proceedings of bid opening or award to anyoutside party or bidder, except as may be required by law.

2.15.15. Proper minutes and records of the deliberations and decisionsof the Tender Committee and the reasons for any decision oraction shall be maintained and duly signed by all members.The Tender Committee may meet afterwards as perrequirement if any issues need to be discussed relating to thetender but in no case after issue of the letter of award to thesupplier.

2.16.Composition and Level

2.16.1. CDCL shall have four levels of Tender Committees for theprocurement as per threshold limits specified in the DoP:


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2.16.2. Board Level Tender Committee

The Board Level Tender Committee shall be composed of:

i) Minimum two (2) board directors; the Chairperson of theCommittee shall be appointed by the Chairman of theBoard

ii) Chief Executive Officeriii) Head of the Concerned Departmentiv) Head of Finance & Investment Division

2.16.3. The Board level Tender Committee shall be responsible forprocurement whose estimated value exceeds Nu. 20 (twenty)million as per DOP.

2.16.4. Corporate Level Tender Committee

The Corporate Level Tender Committee shall be composed of:

i) Chief Executive Officer as the chairmanii) Head of the concerned Departmentiii) Head of Finance and Investment Division iv) Any other official appointed by the CEO

2.16.5. The Corporate Level Tender Committee shall be responsiblefor procurement up to estimated value of Nu 20 (Twenty)million per case as per DOP.

2.16.6. Department Level Tender Committee

The Departmental Level Tender Committee shall becomposed of:

i) Director of concerned Department as chairmanii) Head, Finance & Investment Division/Sectioniii) Head of the Division/Sectioniv) Project Manager/ Project Team Leaderv) Any other official appointed by the CEO

2.16.7. The Department Level Tender Committee shall be responsible

for procurement up to estimated value of Nu 1 (One) millionper case of goods as per DOP.

2.16.8. The Field Level Tender Committee

The Field Level Tender Committee shall be composed of:

Regions ProjectsRegional Manager as Project Team Leader as


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Chairman ChairmanManager, Administration &Finance

Works supervisor

Dy. Manager, Fleet Section Project AccountantDy. Manager, Workshop Section

In-charge, Store/fleet

2.16.9. The Field level Tender Committee shall be responsible for procurement up to estimated value of Nu 250,000 (Two hundred fifty thousand only) per case as per DOP.

2.17.Role of the Tender committee

2.1.1. The primary function of the Tender Committee shall be to:

a) Ensure that the interest of CDCL pertaining to optimumutilization of company’s funds through properprocurement norms leading to profit maximization,income generation and securing best value for money ofquality goods.

b) Ensure that procurements are conducted properly andas per procedures defined in this Manual.

c) Ensure the selection of all contractors and suppliers ismade on sound, transparent, fair and cost-effectivebases.

d) Ensure that the bidding documents have been preparedand issued in accordance with this Manual.

e) Ensure that potential bidders have been given sufficientand equal time and opportunity for the submission ofthe bids.

f) Ensure that there have been no breaches of theprovisions under this Manual.

g) Appoint appropriate Tender Opening and EvaluationCommittee.

h) Satisfy itself that the work done by the EvaluationCommittee has been carried out timely and diligentlywith due regard to the propriety and regularity ofprescribed procedures.

i) Award the supply of goods to the successful bidder afterthe submission of the evaluation report by theEvaluation Committee.

j) Decide whether bidding should be re-tendered orcancelled, for recorded pertinent reasons, within theirauthority.

k) Act as an Appellate Body for issues raised by external parties arising from procurement activities.

2.2. Tender Opening Committee


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2.2.1.Tender opening is a fairly routine procedure where all the bidsreceived are open in fair, transparent and professional manner.Tender opening does not require the full quorum of the TenderCommittee. The composition of the Tender Opening Committeeshall be appointed by respective Tender Committee and will havea Minimum of four members.

2.3. Role of Tender Opening Committee

2.17.1. The primary function of the Tender Opening Committee shallbe to:

a) Ensure that all bids received within the time and datespecified in the bidding documents are opened at the time,date and place of opening stipulated in the biddingdocuments.

b) Check and ensure that the submitted bids arecomprehensive and complete in terms of all requirementsof the bidding documents.

c) Examine the conditions of the envelopes, ensure that thereis no tempering or any other untoward action on theenvelopes i.e. the envelopes are acceptable and to sign onthe envelopes.

d) Decide to cancel or proceed in the event that an envelopeof the original bid document(s) is found to have beentampered with or opened prior to its meeting.

e) Examine and sign on all tender documents submitted by the bidders.

2.18.Role of Tender Evaluation Committee

2.18.1. Soon after the opening of bids, a Tender Evaluation Committee(hereafter referred to as the Evaluation Committee), whoseprimary responsibility shall be to evaluate the bids and tomake recommendations for award of contract, shall beformed. The composition of the Tender Evaluation Committeeshall be appointed by Tender Committee and will have aminimum of four members.

2.18.2. The members of Evaluation Committee shall declare thatthere is no conflict of interest. If any conflict of interest arises,the same member shall excuse from the committee in writingand a new member shall be nominated. No member of theTender Committee can be a part of the Evaluation Committeefor a particular procurement case. The committee shall sign adeclaration as per the Appendix –II after opening of the bids.


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2.18.3. The Chairman, Tender Committee shall appoint one of themembers as the Head of the Evaluation Committee. TheProcurement representative of the Evaluation Committee shallreceive the complete bid documents, which shall be securelystored in safe custody for further evaluation.

2.18.4. The Evaluation Committee shall evaluate the bids usingcriterion and methodologies defined in the Bidding Documentsrelevant to the procurement case.

2.18.5. The Evaluation Committee may seek clarification from thebidders if required for the purpose of bid evaluation but shallensure that no change in prices or substance of the bid aresought, offered, or permitted.

2.18.6. The Evaluation Committee shall ensure that no clarification isaccepted or considered that are not in response to a requestby the Evaluation Committee.

2.18.7. Proper minutes and records of the deliberations andrecommendations of the Evaluation Committee shall bemaintained and shall be duly signed by all members.

2.18.8. No member of the Evaluation Committee shall communicateor disclose any information on the proceedings of the bidexamination, evaluation, comparison and recommendation ofcontract award to bidders or any other persons not officiallyconcerned with such process.

2.18.9. The Evaluation Committee shall be responsible to deal withany representation from the bidders in connection to thetender evaluation and recommendation.

2.18.10. After submission of the evaluation report by the EvaluationCommittee, as per the authority defined in the DoP, theTender Committee shall satisfy itself that the work done by theEvaluation Committee has been carried out timely anddiligently with due regard to the propriety and regularity ofprescribed procedures.

2.18.11. For an evaluation report to be submitted to the Board LevelTender Committee, it should be first presented to theCorporate Level Tender Committee and recommendationthereof should be submitted with the evaluation report. Insuch cases, endorsement of the CEO would be required on thereport prepared and submitted by the Evaluation Committee.

2.18.12. Evaluation Committee shall be the custodian of the tender tillthe evaluations of the tenders are fully completed. Thereafter,proper handing taking of the tender documents should bedone by the Chairman of the committee with the ProcurementUnit who will then forward the report to the Tender Committee.


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CHAPTER 6: BIDDING DOCUMENTS

2.19.Bidding documents

2.19.1. The purpose of bidding documents is to help the bidder inarriving at an informed decision on whether or not to submit abid, and to enable bidders to prepare responsive bids. Thesedocuments shall explain in detail the requirements of CDCLregarding the supply of goods under bid, the instructions andconditions of bidding and the provisions of the proposedcontract.

2.19.2. For each category of supplies, CDCL shall prepare SBDs and getthe same approved from the CEO. The SBDs so approved by theCEO shall be used for invitation of bids for the relevant supplies.Customization of bidding document for a specific package, basedon SBD, shall be approved by tender inviting authority. Nochanges in the principle SBD provisions shall be permitted.Whenever any need arises to make any change in a SBD inrespect of any specific supplies, such changes may be approvedby the CEO.

2.19.3. Bidding documents shall set forth as clearly and preciselypossible goods to be supplied, the place of delivery, the schedulefor delivery, minimum performance requirements, warranty andmaintenance requirements, as well as any other pertinent termsand conditions. The bidding documents shall define the tests,standards and methods that will be employed to judge theconformity of goods as delivered, with specifications. Drawingsshall be consistent with the text of the specifications.

2.19.4. The bidding documents shall specify factors, which will be takeninto account in evaluating bids, and how such factors will bequantified or otherwise evaluated. If bids based on alternativedesigns, materials, completion schedules, payment terms, etc.,are permitted, conditions for their acceptability and the methodof their evaluation shall be explicitly stated in the biddingdocuments.

2.19.5. In order to avoid confusion and the partial comparison of bids,the bidding documents shall make clear treatment of taxes,customs and relevant duties for bidders’ setting of bid prices. Inaddition, treatment of those factors shall be clearly stipulated inthe evaluation methods.


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2.19.6. While the details and complexity of a bidding document varydepending upon the kind of goods to be procured and the size ofcontract, and method of procurement adopted, they shall includebut not be limited to the documents listed below.

a) Invitation for Bids.

b) Instruction to Bidders.

c) Integrity Pact.

d) General Conditions of Contract.

e) Special Conditions of Contract.

f) Technical Specifications.

g) Drawings.

h) Bid Submission Form and Price Schedule.

i) Bid Security form.

j) Contract form.

k) Performance Security form.

l) Bank Guarantee for Advance Payment.

m)Manufacturer’s Authorization form.

2.19.7. The cost of the bidding documents should be nominal andadequate to cover the cost of reproduction and postage. It shouldnot be so high as to discourage bona fide bidders.

2.19.8. The bidding documents can be made available through the CDCLweb site and shall be made secure to avoid any modifications tothe bidding documents without restricting the access of biddersto the bidding documents. Bidding documents must be providedin print form to bidders who request them. A master copy shallbe retained in print form, suitably authenticated by signature andstamp of the officer in-charge of the procurement.

2.19.9. Bidding documents downloaded from the CDCL website shall befree of cost and bidders need not pay any money fordownloading the documents.

2.20. Essential conditions to be incorporated in the bidding documents

2.20.1. Eligibility and qualification criteria for bidders

2.20.1.1.Eligibility and qualification criteria for bidders shall be specifiedin the bidding documents as per the merit of the particular case


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of procurement. Broadly these criteria shall be in line with clause3.3 and 3.4 (eligibility and qualification criteria for registration).

2.20.2. Bid validity

2.20.2.1.Realistic validity period (minimum 60 days) of the bid shall bespecified. The bidding documents shall mention the exact datetill which the bid shall remain valid. Bidders shall be required tosubmit bid valid for a period specified in the bidding documentswhich shall be sufficient to enable CDCL to complete thecomparison and evaluation of bids, and obtain all necessaryapprovals so that contract can be awarded within that period.

2.20.2.2.If CDCL sees that it is not possible to complete the bid evaluationand award of contract within given period of validity due toreasons beyond its reasonable control, it may solicit biddersconsent to an extension of bid validity period. Under suchcircumstances:

a) The request and the responses thereto shall be made inwriting, by fax, or by email to all participating bidders.

b) A bidder agreeing to the extension request shall also agreeto an extension of the validity of the bid security. Theperiod of the validity of the bid securities shall be suitablyextended accordingly. Such a bidder shall not be requiredto or permitted to modify its bid.

c) A bidder may refuse the request to extend the bid validitywhich would lead to his disqualification without forfeitinghis bid security. In such a case the bid shall not be furtherconsidered for evaluation and award.

2.20.3. Bid Security

2.20.3.1.Bid security or earnest money shall usually be required, but theyshall not be set so high so as to discourage bidders. The amountof bid security shall be calculated at one - two percent (1%-2%)of the estimated cost of procurement. The calculated amount(rounded in the multiple of Nu 1000) and currency/currencies ofbid security shall be as specified in the bidding document.

2.20.3.2.The bid security shall be in the form of unconditional bankguarantee/Banker’s Cheque/ Cash Warrant/ Demand Draft or asspecified in the bidding documents and shall be enforceable inany Bank in Bhutan.

2.20.3.3.The bid security shall remain valid for a period of thirty (30) daysbeyond the validity period for the bids, in order to provide


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reasonable time for CDCL to act if the security is to be called.The bidding documents shall mention the exact date till whichthe bid security shall remain valid.

2.20.3.4.For all tendering modes and methods, bid security shall besubmitted by bidders in a separate envelope, which should beopened prior to the opening of the technical and financial bid. Inabsence of bid security, technical and financial bids will bereturned unopened if specified in the bidding documents.

2.20.3.5.The bid security may be forfeited:

a) If a bidder withdraws its bid during the period of bidvalidity specified by the bidder.

b) If a bidder does not accept the arithmetical corrections ofits bid price.

c) In the case of successful bidder, if the bidder fails to:

i) Sign the contract within the prescribed time.

ii) Furnish the performance security within theprescribed time.

d) As per conditions specified in the tender document.

2.20.3.6.After the award of contract, the bid security of all theunsuccessful bidders, shall be returned within fifteen (15)working days of the award of contract. In case of single stage –two-envelope mode of tendering, bid security of non-responsivebids shall be returned immediately after the evaluation report isaccepted by the competent authority.

2.20.3.7.The bid security of the successful bidder shall be returnedimmediately after the submission of the performance security bythe successful bidder to whom the contract is awarded.

2.20.4. Performance Security

2.20.4.1.CDCL shall require the supplier to submit a Performance Securityprior to the signing of the contract which is enforceable in anyBank in Bhutan. The amount of Performance Security shall be tenpercent (10%) of the contract amount.

2.20.4.2.The Performance Security shall be valid until the completion ofthe warranty period under the contract and for any extensionthereto. It shall serve as a guarantee that the supplier willperform his contractual obligations under the contract till thewarranty period. In the event the supplier fails to perform


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contractual obligations under the contract the contract shall beterminated and the performance security forfeited. ThePerformance Security shall be denominated in the currency/currencies specified in the bid documents and shall be in theform of unconditional bank guarantee/ Cash warrant/ Demanddraft.

2.20.4.3.The Performance Security shall be discharged and returned tothe supplier within thirty (30) days of expiration of the warrantyperiod. If the supplier fails to remedy any reported defect withinwarranty period, CDCL shall be entitled to either encash theperformance security or to remedy the defect at the expense ofthe supplier.

2.20.4.4. Failure of the successful bidder to submit the abovementioned performance security or sign the contract shallconstitute sufficient grounds for the annulment of the award andforfeiture of the bid security. In that event, CDCL may award thecontract to the next lowest evaluated bidder whose offer issubstantially responsive and is determined by CDCL to be qualifiedto perform the contract satisfactorily or call for fresh bids.

2.20.5. Advance in Supply Contracts

2.20.5.1.CDCL may provide for payment of interest free mobilizationadvance of a maximum ten percent (10%) of the contract priceon request from the supplier along with submission of anunconditional bank guarantee for an equivalent amount ofadvance requested in accordance with the contract agreement.

2.20.5.2.The terms and conditions of recovery of mobilization advanceand return of the bank guarantee shall be specified in the SBD.

2.20.6. Standards

2.20.6.1.The Standards and Technical specification quoted in biddingdocuments shall be such that it promotes the maximum possiblecompetition, while ensuring the critical performance or otherrequirements for the goods under procurement. The standardsmust be defined, by reference to internationally acceptedstandards, with which the equipment or materials orworkmanship shall comply, where such standards exist, andreference to national standards (such as those set BhutanStandards Bureau for different sectors, goods, and materials)where such international standard do not exist or are


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inappropriate. The equipment or material meeting otherstandards, which are equivalent or superior quality orperformance, will also be accepted. Suitable provisions in thisregard should be made in the bidding documents.

2.20.7. Quantities

2.20.7.1.When the exact quantity of an item is not known, the biddingdocument shall indicate an estimated quantity, but state thatCDCL reserves the right to increase or decrease the indicatedquantity by a certain percentage, usually not exceeding 25% ofthe indicated quantity.

2.20.7.2.If the foreseen deviation is potentially higher than 25%, thebidding document shall specify a minimum quantity with optionsto acquire additional quantities at the CDCL’s discretion, up to amaximum quantity. Such SBD shall specify a definite terminationdate for any resulting contract, normally within the fiscal periodfor which the CDCL has obligated budget.

2.20.7.3.Bidding document for an open-ended quantity should contain areservation clause stating that CDCL shall have the right tocancel any resulting contract at any time, upon reasonableadvance notice and without penalties, whether any items or anyitems over an agreed minimum have been ordered.

2.20.8. Subsidiaries, Joint Ventures and Subcontractors

2.20.8.1.The SBDs shall require the invited suppliers to indicate in theirresponses whether any goods are to be provided by a subsidiaryor a related entity. If a subsidiary or related entity is involved inthe provision of the goods both the supplier and its subsidiary orrelated entity must accept the terms and conditions of theContract.

2.20.8.2.Any such entity (ies) that are part of the invited suppliers shall berequired to sign both the bid or proposal and any resultingcontract with CDCL. The same rule shall apply to parties formingor having a Joint Venture to perform a contract. All the parties tothe Joint Venture shall sign the relevant documents if it is set upas a separate legal entity.

2.20.8.3.The SBDs shall stipulate that the invited supplier must identifyany subcontractors that will be material to the Supplier’sperformance of the Contract. However, any individual engagedby a Supplier as an “independent consultant” need not beidentified as such, unless he/she will be the sole or lead person


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on the project or otherwise will play a significant role in theexecution of the supply.

2.20.8.4.The use of subcontractors does not relieve the Supplier withwhom CDCL has a Contract of its responsibility to fulfill the termsand conditions of the Contract.

2.20.8.5.CDCL shall reserve the right to obtain from the subcontractorsthe same level of information as from the prime contractor forthe sake of due diligence (security, capacity, financial strength,etc.). However, it must be clear that CDCL will not have anyliability with any subcontractors.

2.20.9. Use of Brand Names

2.20.9.1.Specification shall be based on relevant characteristics and/orperformance requirements. References to brand names,catalogue numbers, or similar classifications shall not be madenormally except in cases where it is absolutely essential thatsuch references be made.

2.20.9.2.If it is necessary to quote a brand name or catalog number of aparticular manufacturer to clarify an otherwise incompletespecifications, the words “or equivalent or higher” may be addedafter such reference. The specification shall permit theacceptance of offers for goods which have similar characteristicsand which provide performance at least substantially equivalentto those specified.

2.20.10. Delivery Time and place

2.20.10.1. The bidding documents shall state the delivery date, the placeof delivery, delivery terms for goods as per the InternationalChamber of Commerce (ICC) INCOTERM 2010 for delivery ofgoods, other delivery conditions, if any, and, to the extentpossible, the preferred method of delivery of the required goods.If the bidding documents state a specific date for delivery of thegoods, suppliers may be invited to quote the best alternativedelivery terms, including schedules for partial shipments ofgoods.

2.20.10.2. Where there is an urgent requirement for the goods, thebidding documents shall state that an offer of early delivery willbe an important factor in the evaluation of bids or proposals.


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2.20.11. Shipping and Delivery

2.20.11.1. Internationally recognized contract terms, especially theInternational Chamber of Commerce (ICC) INCOTERM 2010(Appendix - III) shall be referred to and appropriate mode oftransportation and delivery of goods shall be mentioned in thebidding document.

2.20.11.2. Bidding documents may also state the type and terms ofinsurance coverage to be made by a supplier if such insurancecoverage is deemed to be necessary for the delivery of a good.

2.20.12. Currency of Bid

2.20.12.1. Bidding documents shall state clearly the currency/ currenciesof bid applicable in which bidders are to state their prices and inwhich the contract price will be paid. Bid price is the sum of allpayments in various currencies required by the bidder. For thepurpose of comparing prices, all bid prices shall be converted toa single currency selected. The rates of exchange to be used forconversion shall be the reference rates on the date of bidopening or next preceding date if rate of exchange for the dateof bid opening is not available. The reference exchange rateprevailing at that date as posted by the Royal Monetary Authorityof Bhutan shall be used for the conversion of prices.

2.20.13. Price of Bid

2.20.13.1. Payment of the contracts price shall be made in the currencyor currencies in which the bid price is expressed in the bid of thesuccessful bidder, except where a different arrangement isclearly justified and specified in the bidding documents. All pricesshall be invited on the basis of CIF or CIP or EXW as specified inthe bidding documents.

2.20.14. Terms and methods of payment

2.20.14.1. All bills and invoices shall be paid within one month of receiptof such bills/ invoices, provided that the bills/ invoices arecompliant with all the requirements of CDCL. Incomplete/ non-compliant bills to be returned immediately to Suppliers. Suchprovision shall be incorporated in the contract documents unlessagreed otherwise.

2.20.14.2. The prices in a contract shall be on a fixed basis with thefollowing exceptions:


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a) CDCL may prescribe conditions relating to price adjustmentsdue to difference/deficiencies in qualities within tolerablelimits determined by it.

b) For contracts having delivery schedule more than 18months, the bidders may not be able to quote the fixedprices. Variations in the cost of material and labour based onspecified indices shall be permitted as per clause 6.2.16.

c) Increase or decrease in duties, taxes and levies payable bythe supplier as a result of government orders after the date,thirty (30) days prior to the deadline for submission of bids.

2.20.14.3. The increase or decrease as specified in clause 6.2.16 shall bepayable/ adjustable to/ from the supplier in respect of thematerials purchased after the date of effect of the governmentorder on submission of satisfactory documentary evidence.

2.20.14.4. The method of payments shall be specified in the biddingdocuments, which may include advance payments, interimprogress payments and final payment as relevant for a particularprocurement.

2.20.14.5. Bidding documents shall specify the arrangements for anysecurity required for advance payments. Also, the biddingdocuments shall specify the payment method and terms offered,and whether alternative payment methods and terms will beallowed.

2.20.15. Alternative Bids

2.20.15.1. The bidding documents shall clearly indicate when bidders areallowed to submit alternative bids, how alternative bids shouldbe submitted, how bid prices should be offered and the basis onwhich alternative bid shall be evaluated.

2.20.16. Price Adjustment

2.20.16.1. The bidding document shall clearly indicate whether priceadjustments are allowed in the event changes occur in majorcost components of the contract such as labour, equipment, andmaterials, over which the supplier has no control. Priceadjustment provisions are not necessary for simple supplycontracts involving short period. However, for contracts with longdelivery periods (beyond 18 months), price adjustmentprovisions shall be provided. For certain type of equipment wherenormal commercial practice requires bidders to submit firmprices regardless of the delivery time, price adjustmentsprovisions are not needed. However, contracts which contain a


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large commodity component whose price may vary sharply in theshort term shall contain a price adjustment clause that protectsCDCL/ supplier from losses in case of any abrupt changes inprice.

2.20.16.2. The amount of price adjustments shall be based on changesin the cost of the major components of the contract. If used, themethod of adjustment indicated in the bidding documents shallprovide for adjustments calculated using a price adjustmentsformula or formulae. The comparison of bid prices shall becarried out on the basis of base price only. The price adjustmentformula shall also provide for a maximum ceiling of twentypercent (20%) over the contract price up to which the priceadjustment can be paid.

2.20.16.3. Where the prices are subject to adjustments, provisionsrelating to the possibility and method of price adjustments maybe prescribed and included in the SBD.

2.20.16.4. Price adjustment shall be based on a base index available onthe reference date. Base index shall be from the date starting 30days prior to the bid opening date until the expiry of two-third(⅔) period of scheduled delivery date or actual delivery date,whichever is earlier. Base index shall be payable not later thanscheduled delivery date. In case scheduled delivery date isdelayed for reasons attributable to CDCL, base index shall beallowed after approval of Competent Authority as per DoP.

2.20.17. Force Majeure

2.20.17.1. The bidding documents shall clearly state the force majeureclause, that, in the event, any delay by the supplier in performinghis obligations under the contract is caused by force majeure,including but not limited to war, civil insurrection, fire, floods,epidemics, earthquakes, quarantine restrictions and freightembargoes, such delay may be excused and the period of suchdelay may be added to the time of performance of obligationdelayed. If a force majeure situation arises, the supplier/biddershall notify CDCL in writing of such conditions and the causethereof along with documentary or pictorial evidence acceptableto CDCL. Unless otherwise directed by CDCL in writing, thesupplier/ bidder shall continue to perform its obligation.

2.20.18. Liquidated Damages

2.20.18.1. Liquidated damages shall not be less than point zero fivepercent (0.05%) and should not be more than zero point one


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percent (0.1%) for every day of delay (as specified in the biddingdocuments) on the total value of supplies delayed beyond thescheduled delivery period.

2.20.18.2. The total amount of liquidated damages shall not exceed tenpercent (10%) of the Contract Price.

2.20.19. Warranty Period

2.20.19.1. The warranty period for items procured shall usually be for aperiod of one year but in certain cases may be for a period of 18months from the day of supply/commission of items. Theoperational warranty for specific equipment (for whichmanufacturer’s warranty period shall be applicable), however,can be fixed for period more than the aforesaid period.

2.20.20. Settlement of disputes

2.20.20.1. The mechanisms for dispute resolution, intended to regulateevents following the breach of a contract by one of the parties,shall be prescribed in the bidding document. This will include:

a) The language and interpretation of the contract: Wheremore than one language is used, reference must be made inthe bidding document to the language which would governthe interpretation of the contract.

b) The governing law and forum of dispute resolution: Forcontracts to be performed in Bhutan, the governing law shallbe the law of Bhutan and the forum for mediation/ arbitrationshall be as specified in the bidding documents.

c) A clause requiring the parties to attempt to reach anamicable settlement before turning to the courts or othertribunals.

2.21.Bid Submission Form and price schedule

2.21.1. The Bid Submission Form shall be a letter addressed to CDCLwith the bidder’s commitment to accept and comply with theprovisions of bidding documents/ contracts, which are binding onthem, and abide by the bid validity date and provideperformance guarantees, if required, on award of contract. Thebidder shall fill the Bid Submission Form and sign. Non-compliance would be treated as bidder not accepting the termsand conditions of the bid documents and addenda issuedthereafter, the bid shall then be rejected.


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2.21.2. A price schedule form, to enable the bidder to indicate thedescription, quantity, unit of quantity, unit price and total pricesof the goods as well as information on the country of origin,taxes and duties payable shall be provided with the biddocuments.

2.21.3. The prospective bidders shall be instructed to include or mentionin the price schedule about any discount that may be offered bythem on the quoted prices. The presence of alternate bids, if any,shall also be mentioned.

2.22.Clarification on bidding documents

2.22.1. The Invitation for Bid shall mention that if bidder requires furtherbid clarification, the same shall be submitted in writing beforethe last date of bid clarification submission. CDCL shall respondto all the bidders who have acquired the bidding documents,including a description of the enquiry without identifying thesource, as an amendment to the bidding document. Any bidclarification inquiry received after the last date of bid clarificationwill not be responded.

2.22.2. CDCL shall conduct pre-bid meeting only if necessary to clarifydoubts and concerns of the bidders prior to submission of bids.Minutes of the pre-bid meeting shall be circulated to all bidderswho have purchased bidding documents. Non-attendance in thepre-bid meeting, if conducted, shall not be a reason fordisqualification of bidders.

2.23.Amendment of bidding documents

2.23.1. CDCL reserves the right to amend or modify bidding documentsfor any reason by issue of addendum either on its own initiativeor in response to a clarification request from bidders who havepurchased the bid documents prior to a predetermined date ordeadline for submission of bids. All bidders who have purchasedthe document shall be notified of the amendment in writingwhich shall be the part of bidding documents and shall bebinding on them.

2.23.2. For the information of those prospective bidders who may havedownloaded the bidding documents from the web site, thecorrigendum to the bidding documents will also be published onthe web site. It will be the responsibility of such bidders toregularly visit the website for any amendment to the biddingdocuments until the last date of bid submission. A suitable clause


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in the Invitation to Bids originally published on the website maybe included to this effect making it very clear that CDCL shall inno way be responsible for any ignorance of the bidder about theamendment to the bidding documents.

2.23.3. Depending on the nature of amendment issued, CDCL can alsoextend the deadline for submission of bid to allow the biddersreasonable time for taking the addendum into account inpreparations of their bids.

2.24.Cancellation of Bid

3.1.1. To the extent possible, CDCL shall avoid cancelling a bid, unlessthe bid is unnecessary or will not give satisfactory results.Cancellation would be justified, only if the requested goods areno longer needed, the requirements have substantially changed,funding is no longer available or the continuation of the biddingprocess is no longer in the best interest of CDCL.

3.1.2. If it becomes necessary to cancel the bid prior to the closing datefor submissions, the Procurement Unit shall promptly notify allinvited Suppliers in writing that the bid has been cancelled.

3.1.3. The notification shall be transmitted in such a manner that itreaches the suppliers as quickly as possible by use of e-mail, TVannouncement, facsimile or other means of expedited delivery.

3.1.4. The Procurement Unit shall evaluate whether or not the Suppliersshould be asked to return the bid documents, taking intoconsideration the confidential and sensitive nature of thedocuments.

3.1.5. If Procurement Unit determines that the bidding documentsshould be returned, he/she must then notify all invited Suppliersin writing to do so and instruct them not to retain any copies.


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CHAPTER 7: BIDDING PROCESS

7.1. General

2.24.1. Depending on the urgency for the items to be procured, quantityand value of the procurement and the method to be adopted forprocurement, the bidding process can vary from makingreasonable enquiries in the local market to observance ofelaborate procedure in the cases of open bidding or internationalprocurements. The steps required to be followed and thedocumentation prescribed under this chapter is aimed to coverthe bidding process under the Open Bidding method. Reasonablysimplified form of open bidding process may however be followedin other procurement methods too as shall be detailed in theSBD.

2.24.2. CDCL shall ensure that technical and administrative approvalsare obtained and fund requirement are approved and securedprior to tendering or award of additional goods under an alreadyawarded contract.

2.24.3. CDCL shall ensure that foreign exchange requirements areapproved and secured from the concerned government agencyviz. Ministry of Finance or the Royal Monetary Authority beforeinitiating the tendering in case of international tenders.

2.24.4. Procurements funded through foreign grants, Loans, Privateequity may require adherence to procurement procedures, if any,prescribed in the relevant agreements.

2.25.Confidentiality of bids and proceedings

2.25.1. Except as may be required by law, no information after the publicopening relating to the examination, clarification, evaluation andrecommendation concerning awards shall be communicated tobidders or any person not officially concerned with this processuntil the contract has been awarded.

2.26. Invitation of bids

2.26.1. In all cases of Open Bidding, Invitations to Bid shall be advertisedin at least one newspaper of national repute having masscirculation and shall also be advertised in CDCL web site or otherrelevant websites. In case of international tenders, invitation tobid may be advertised in international newspapers/ publications/websites. In the Limited Bidding method, the invitations for bids


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shall be sent by registered post or any other means of delivery,as long as it is ensured that the documents are dispatched at thesame time to the potential bidders. In the Direct Contractingmethod, CDCL may directly approach, in writing, the bidder fromwhom it intends to solicit quotation.

2.26.2. The advertisement should include all necessary information asbelow:

a) The identity of CDCL (e.g. Concerned Division/ Unit, CDCL,Thimphu).

b) Scope of supply of goods.

c) Period for execution of supplies (e.g. twelve months).

d) Address for obtaining the bidding documents, furtherinformation (e.g. concerned officer, Procurement Unit,CDCL, Thimphu).

e) Cost of bidding documents (e.g. non-refundable Nu. 2000,available on all working days from …..to …….).

f) Earnest Money deposit (e.g. Nu. 200,000.00 in the form ofBank guarantee or Bank Draft, in favor of CEO, CDCL,Thimphu; No cash is acceptable)

g) Procedural requirements (written application, attested copyof Trade license/ regulatory license, signing of IntegrityPact, etc).

h) Final date and time for submission of bids and opening ofbids and venue (e.g. September 30, 2012, 1500 hours andopened at 1530 hours in CDCL offices).

i) Address where the bid is to be submitted (e.g. Concernedofficer, Procurement Unit, CDCL, Thimphu, Bhutan).

j) CDCL reserves the right to cancel/withdraw the invitationfor bids.

2.26.3. CDCL may publish an abridged Invitation to Bid in newspaperswith only key details and indicating that the detailed Invitation toBid has been uploaded in CDCL’s website to reduce the cost ofpublication.

2.27.Submission and receipt of bids

2.27.1. The Bid prepared by the bidder shall comprise of:

a) Original and copies of the Bid Submission Form and theappropriate price schedules furnished in the biddingdocuments.


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b) Documentary evidence establishing that the bidder iseligible to bid.

c) Documentary evidence establishing that the bidder isqualified to perform the contract.

d) Bid security submitted in separate envelope.

e) Power of attorney.

2.27.2. Bidders shall be permitted to submit bids by registered post orcourier or by hand. The bidders shall be advised, that the bidsshall be delivered in an envelope sealed with adhesive tape orother sealant, which will prevent reopening addressed to theappropriate addressee and shall be marked “Confidential”,“Name of the Supply”, “Tender Number”, and the words “DO NOTOPEN BEFORE the specified date, month and time”. The nameand address of the bidder shall be written on the inner envelopeto enable return of the bid unopened in case it is declared“LATE”.

2.27.3. If the bids are required to be submitted in more than one copy,the specific number of copies to be submitted shall be mentionedin the bidding documents. The bidders shall be advised in suchcases to mark the outer envelope of the original documents as“ORIGINAL” and the envelopes of the others as “COPY”. The biddocument marked as “ORIGINAL” shall be opened in presence ofthe bidder and retained by CDCL in safe custody. The documentmarked “COPY” shall be used for evaluation purpose. In case ofdiscrepancy the original copy shall be referred and in case of anydispute regarding the bid document, the ORIGINAL shall prevail.

2.27.4. Bidders shall be advised on the last date, time and place bywhich the bids would have to be submitted in the Invitation toBid. Bids shall be received up to the time limit specified in thebidding document or up to the date and time specified in anyaddendum. An official delegated by CDCL shall receive thesealed bids and keep in a safe custody.

2.27.5. Bids receipt shall be registered in the bid receipt register(Appendix – IV) and accordingly serial number corresponding tothat in the register shall be entered on the sealed envelope alongwith time, date and signature of the authorized official. Sealedenvelope should also be checked if the document is properlysealed, accordingly remarks shall be made in the register. Biddersubmitting the bid in person shall also sign with full details onthe register and accept the observation made by the official. Bidsreceived by post will also be entered in this register.


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2.27.6. Where an official is made responsible for receiving the bids, theofficial shall ensure that the bids submitted are safely andconfidentially stored. The official responsible for receiving thebids shall issue a receipt to the bidder/ authorized representativeof the bidder and mark the bids received with serial number andenter the receipt of bids in a bid register (Appendix – IV).

2.28.Minimum time limit for bid submission

2.28.1. The time allowed for the preparation and submission of bids shallbe determined with due consideration of the particularcircumstances relating to the manufacture, and supply of thegoods and the magnitude and complexity of the contract. It is ofsignificant importance to allow enough time between the invitingof bids and the submission deadline. This is essential not only forsecuring proper competition and cost minimization, but to allowbidders to analyze bid documents carefully and prepare wellconsidered bids, thus leading to the avoidance of subsequentproblems, such as numerous clarifications, confusion andarbitrary evaluation, dispute during the execution, or otherundesirable situations. It should be emphasized that securinghigh quality bids through sufficient preparation time results in ashortened total period of procurement in the long run.

2.28.2. Where complex items of equipment are involved, a longer periodmay be necessary to enable bidders to conduct investigationsbefore submitting bids.

2.28.3. Bid preparation requiring pre-bid meeting would require longertime for bid submission.

2.28.4. The following minimum time limits shall be observed:

OpenBidding

LimitedBidding

LimitedEnquiry

DirectContracting

From the day thebids are madeavailable

28 days 14 days 7 days By mutualagreement

2.28.5. The days shall be counted as continuous days, inclusive of anypublic holidays in between.

2.28.6. In case of re-tender, a shorter time limit may be provided.

2.28.7. In case if the bid submission fall under non-working day then thenext working day shall be the effective bid submission day.


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2.29.Language of bid

2.29.1. The Bid, and all correspondence and documents related to thebid shall be in English. Additional documents provided by thebidder related to the bid shall be in English and should betranslated in English if the language is foreign. The Englishtranslation shall prevail on the interpretation.


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CHAPTER 8: THE EVALUATION OF BIDS AND AWARD OF CONTRACT

8.1. Bid Opening

2.29.2. Bidders or their authorized representatives shall be allowed toattend the bid opening. Bidders who chose to attend shall signthe attendance sheet provided in the record of bid opening(Appendix - V) with their name, firm name and phone number.Bidders who chose to attend the opening shall not be allowed tospeak on matters related to the bid until and unless approachedby the committee members or by seeking permission from theChairperson by raising hand. Bidders who have any complainwith regard to the bid opening shall describe the nature of theircomplaints in the section provided in the Record of Bid OpeningForm (Appendix - V ) and sign.

2.29.3. All members of the Tender Opening Committee, including theChairperson shall examine the conditions of the envelope andannounce the observation and minute accordingly in the bidopening report. All members shall sign on the envelopes as anevidence to state that envelope was received sealed and ontime. In the event that an envelope of the original bid documentis found to have been tampered with or opened, the committeeshall examine and investigate the nature of tampering oropening of the envelope and such bids shall be either rejected orconsidered for evaluation as per the discretion of the committeebased on the merits of each case.

2.29.4. All bids are to be opened in full public view in presence ofrepresentatives attending the bid opening.

2.29.5. The Chairperson of the Tender Opening Committee or therepresentative of the committee shall publicly announce thefollowing in the bid opening for the bidders to note:

a) The Name of the bidder,

b) The total price offered,

c) The presence or absence of bid security and its amount,

d) Alternative bids, if any,

e) Discounts offered, if any,

f) Any other requirements as per the bid documents.


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2.29.6. The members of the Tender Opening Committee opening the bidshall sign on all pages of the Bid Submission Form, priceschedules, bill of quantities, any discounts offered, andforwarding letter of the bidder. The committee shall also initial allcorrections, overwriting and irregularities in bid documents.

2.29.7. The bidder’s representatives will be required to inform thecommittee during the announcement itself if any information ismissed or not declared.

2.29.8. Record of bid opening (Appendix - V) shall be prepared before theclosing of bid opening session and shall be signed by allmembers of the Tender Committee and bidders’ representative.

2.29.9. All original copies of the bids, which are recorded in the bidopening, shall be properly handled and kept in a secure place forfuture reference in case of any disputes.

2.30.Minimum number of bids

2.30.1. If the number of bid received in response to any invitation oftender is less than the minimum number prescribed i.e. if thenumber of bids received is either one or two, the TenderCommittee shall have the discretion to open or not to open thebid/bids. Such discretion to open the bid may be justified byrecording the circumstances and situations for having exercisedthe discretion.

2.30.2. Before opening the bids, the Tender Committee may also decideto extend the bid opening date based on responses received vis-à-vis the number of bidders who had purchased the document orto whom tender enquires were sent.

2.30.3. If the bid/bids are found to be technically responsive by theEvaluation Committee, the Tender Committee may negotiate thebid price with the approval of Competent Authority, if considerednecessary, keeping in view the bid price and the estimatedvalue.

2.30.4. Even when only one bid is submitted, the bidding process maybe considered valid, if:

a) The invitation for bid was satisfactorily advertised.

b) Prices are reasonable compared to estimated value.

c) The project is on high priority and time is critical.

2.30.5. If none of the received bids are found responsive or the bidprices are abnormally high or low (as defined under clause 8.6


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below), then CDCL may reject all bids and re-tender or follow thebidding procedures as considered appropriate by the competentauthority keeping in view the circumstances of each case. CDCLhowever, shall visit the conditions of bid rejection andaccordingly take appropriate steps to modify the terms andconditions, scope of purchase, qualifying requirements, scheduleof delivery etc.

2.31.Modification and withdrawal of bid

2.31.1. The bidder, on submission of written application, may modify orwithdraw its bid after the bid’s submission prior to the deadlinefor submission of bid as prescribed in the bid documents. Thebidder on re-submission shall write on the inner and outerenvelope additionally marked as “MODIFICATION” or“WITHDRAWAL”, as appropriate. CDCL shall accept the bid(modified bid) as per the bid submission schedule as indicated inthe bid documents and not thereafter. Bids once withdrawn shallnot be accepted.

2.31.2. No bid may be withdrawn in the interval between the deadlinefor submission of bids and the expiration of the period of bidvalidity specified in the bid document, neither any modificationwill be accepted.

2.32.Evaluation and comparison of bids

2.32.1. The purpose of bid evaluation is to determine which of the bidsreceived are responsive and thereafter compare the responsivebids against each other to select the lowest evaluated bid.

2.32.2. The evaluation criteria must be exhaustive, fair, measurable andclear to ensure that the best value method used during theevaluation process i.e., technical, financial, etc. is thorough,complete and robust. It is of key importance that the criteriadefined in Standard bidding documents remain consistent duringthe whole process to prevent the perception of changing the rulein the middle of the game.

2.32.3. Bid evaluation shall be consistent with the terms and conditionsset forth in the bidding documents. The bidding documents shallspecify provisions for adjustments of a bid price to correct anyerrors in computation. The bid price read out at the bid openingshall be adjusted to correct any arithmetical errors. If there is adiscrepancy between the unit price and the total price per itemthat is obtained by multiplying the unit price and quantity, theunit price shall prevail. If there is a discrepancy between the totalbid price and the sum of the total price per item, the sum of the


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total price per item shall prevail. If the bidder does not acceptthe corrected amount of bid, its bid will be rejected, and the bidsecurity shall be forfeited.

2.32.4. In addition to the price, the evaluation process shall considerfactors from the following non-exclusive list, as appropriate and iflaid down in the bidding documents. Such criteria shall beexpressed in monetary value where applicable.

a) Preferential treatment for goods of Bhutanese origin, if laiddown in the bidding documents.

b) Date of completion of delivery of goods.

c) Cost of transport.

d) Running cost and cost effectiveness.

e) After-sales service, availability of spare parts and technicalassistance.

f) Commitments with regard to spare parts, security ofsupplies and the prices thereof.

g) Quality and technical merit of the supplies.

2.32.5. CDCL shall identify the various terms and conditions of thebidding documents on which the bidders would not be permittedto take any deviations from the bidding conditions. The bidderswould be required to submit a declaration to confirm that theyhave not taken any deviations on such specified biddingconditions. The aforesaid declaration shall be submitted alongwith the bid and kept in the envelope in which the bid security iskept. In case of non-submission of such declaration the bid shallnot be opened and returned to the bidder unopened.

2.32.6. CDCL shall adopt and implement a robust tender evaluationsystem. In order to have an efficient, effective, and transparentsystem, CDCL shall visit best practices in existing tenderevaluation systems and devise its own evaluation system. CDCLmay also consider either a wholesale or partial, adoption of thePoint Based Evaluation System promulgated by the RGoB.

2.32.7. Price adjustment provisions applicable to the period ofimplementation of the contract shall not be taken into account inthe evaluation as a definite numerical value at the evaluationstage. However whether the prices shall be subject to escalationor not and if subject to escalation then the price variationformula shall form part of the bid documents.

2.32.8. The documents, which are part of statutory requirement, shouldbe made mandatory in the Bidding Document. If any license or


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clearance documents specified in the Bidding Document arefound to be missing, the bids shall be rejected unless specifiedotherwise in the bidding document.

2.32.9. The authenticity of all financial guarantees submitted by thebidders shall be verified with the respective financial institutionsfor their validity.

2.32.10. For the purpose of evaluation, adjustments shall be made for anyquantifiable non-material deviations or reservations. Asubstantially responsive bid is one which confirm to all the termsand conditions of the bidding documents without materialdeviation. A bid determined as not substantially responsive willbe rejected and may not subsequently be made responsive bythe bidder by correction of the non-conformity. A materialdeviation or reservation shall be as below:

a) What affects in any substantial way the scope, quality orperformance of the goods under bid.

b) What limits in any substantial way and is inconsistent withthe bidding documents, CDCL’s rights or the bidder’sobligations under the contract.

c) Whose rectification would affect unfairly the competitiveposition of other bidders presenting responsive bids.

2.32.11. The detailed evaluation procedure, based on the method ofprocurement and estimated value of the contract shall be givenin the Standard Bidding Document.

2.32.12. A detailed report on the evaluation and comparison of bidssetting forth the specific reason on which determination of thelowest evaluated bid was based shall be prepared. Theevaluation report shall be exhaustive and shall include all detailsgiven in the sample format of the Evaluation Report as given inAppendix - VI. Any deviation from the bid documents andinformation missing shall be recorded. All communicationsrelated to evaluation and comparison shall also be recorded. Theevaluation and comparison report shall be signed by all themembers of the Committee before being presented withrecommendations to the Tender Committee.

2.33.Test, quality assurance and inspections

2.33.1. An inspection of bidders’ factories during the bid evaluation ifrequired may be carried out. CDCL shall notify in advance of thedate in writing on which the inspection will be made. The cost ofthe inspection shall be borne by CDCL. If the bidders have not


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been pre-qualified, CDCL shall determine whether the bidderwhose bid has been determined to offer the lowest evaluatedcost has the capability and resources to effectively carry out thecontract as offered in the bid. The bid documents shall specifywhat inspections and tests CDCL requires and the criteria to bemet. If the bidder does not meet them, the bid shall be rejected.In such an event, CDCL shall make a similar determination forthe next lowest evaluated bidder.

2.34.Treatment of abnormally low or high bid

2.34.1. When the prices in a particular bid appear abnormally low, CDCLshall revisit/ review its own estimated value. Based on therevised value, decision shall be taken to reject/ accept theabnormally low or high bids.

2.34.2. If CDCL decides to accept the abnormally low bid afterconsidering the above, the bidder shall be required to provideadditional differential security equivalent to the differencebetween the estimated amount and the quoted price in additionto the performance security. A clause to this effect should beincluded in the bidding documents.

2.34.3. If the prices of all the received bids are abnormally high thenCDCL may negotiate with the lowest evaluated bidder afterapproval of the Competent Authority. In case the negotiationfails, all bids may be rejected and re-tendering or Limited Biddingprocedure may be adopted as considered appropriate afterrevisiting the estimated value determined by CDCL.

2.35.Post Tender Negotiations

2.35.1. The following guidelines for post-tender negotiations are, hereby,prescribed:

2.35.1.1. In case of open bidding, no negotiations are permitted,irrespective of difference in the price of lowest recommendedbidder and the approved cost estimate, except as provided in theclauses below and clause 8.6 of the manual:

a) Single response in case of Open Tender shall be treated asSingle Tender for the purpose of negotiations and provisionsas applicable and as defined in clause 8.2.4.

2.35.1.2. In case of Limited Bidding, negotiations may be held by theProcurement Committee with the qualified and acceptable lowestbidder (L1) recommended by Evaluation Committee. However,such negotiations may be held not as a routine but as an


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exception only, in any of the following cases or combinationthereof:

a) In case of items with Limited Source of Supply: LimitedSource here would mean those cases where only one (1) bidhas been received against the Limited Bidding and in suchcase the provisions as applicable for Single Tenders in thematter of negotiations shall be applicable.

b) In case where the evaluated price of the recommended,qualified and acceptable lowest evaluated bidder (L1) ishigher than the approved Cost Estimate by up to 10% theTender Committee may consider placement of order withouthaving to Negotiate.

c) In case where the evaluated price of the recommended,qualified and acceptable lowest evaluated bidder (L1) ishigher than the approved Cost Estimate by 10% to 30%, theTender Committee may negotiate with L1 and place an orderif it is satisfied by the outcome of the Negotiation. If not itmay decide to retender the work.

d) In case of any other justifiable grounds recommended by theEvaluation Committee and approved by the TenderCommittee.

2.35.1.3. In case of Single Tender (Procurement against proprietaryitems or Procurement from OEM / OES or on account of urgency orfor any other reasons), the negotiations are permitted, ifconsidered necessary.

2.35.2. A counter offer by CDCL to any bidder will also tantamount tonegotiations and should be treated at par with negotiations.

2.35.3. Discussions with the bidders after opening of Technical Bid butbefore opening of Price Bid in Single Stage Two Envelope Biddingand Two Stage Bidding shall not be treated as negotiations.

2.36.Award of contract

2.36.1. CDCL shall award the contract, to the bidder whose bid has beendetermined to be the lowest evaluated bid based on the bidevaluation and who meets the standards of capability andfinancial resources specified in the bid documents. A bidder shallnot be required, as a condition of award, to undertakeresponsibilities for supply of goods or incur any other liability orresponsibility not stipulated in the bidding documents/contract.


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2.36.2. The award of a contract shall be notified to the successful bidderby a Letter of Acceptance (LoA) in writing by registered letter, orby fax, or scanned electronic documents that its bid has beenaccepted indicating the award price. Regardless of theform/method of communication employed, when a company isnotified that it has been awarded the contract by suchnotification, the LoA will constitute the formation of a contractuntil the contract has been effected.

2.36.3. CDCL shall ensure that award of contract is completed within theperiod of the validity of the bid. Failure of the successful bidderto accept the award/ sign the contract shall constitute sufficientgrounds for the annulment of the award and forfeiture of the bidsecurity.

2.36.4. The LoA shall include, among others, the following information:

a) The date of the award decision,

b) The contract price to be paid for the goods,

c) Requirement of performance security,

d) A copy of the contract form provided in the biddingdocument incorporating all agreements.

2.36.5. Where it is not possible for both the parties to sign the contractsimultaneously.

a) CDCL shall send to the successful bidder two original copies ofthe full contract together with the LoA signed by its dulyauthorized representative together with the dated signature.

b) The LoA shall indicate the deadline which shall normally benot more than thirty (30) days by which the successful biddermust accept the award and sign the contract.

c) The successful bidder, if he agrees to conclude the contract,shall sign and date all original copies of the contract and theletter of acceptance and return one copy of each to CDCLbefore the expiry of the deadline indicated in the LoA.

2.36.6. When a contract is awarded to a joint venture, it is “jointly andseverally” responsible for execution of the whole contract.Therefore, it is not acceptable to divide the scope of supply andto allow each member of the JV to separately make contracts fortheir respective portions of the supply. In case of bids submittedby Joint Venture, where permitted, one of the members of the JVshall be designated as lead partner and CDCL shall correspondwith such lead partner only in respect of all matters relating to


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the bid and award of contract. In such cases, the bidders shall berequired to submit a Joint Venture agreement along with the bid.

2.36.7. Several documents form the contract and are to be taken asmutually explanatory of one another. The contract:

a) The Contract Agreement.

b) Letter of Acceptance.

c) Bid and Appendix to bid.

d) Special Conditions of Contract.

e) General Conditions of Contract.

f) Specifications.

g) Drawings.

h) Bill of quantities/ Price Schedule.

i) Any other document forming part of the Contract.

2.36.8. Priority of these documents has to be listed in the biddingdocuments.

2.37.Variation in contract

2.37.1. Right of maximum variation by plus or minus (+/-) twentypercent (20%) of the total contract value shall be reserved byCDCL without any change in the unit price or other terms andconditions of the bid. A clause to this effect should be included inthe contract documents. The Competent Authority of CDCL inaccordance with the DoP shall approve the quantity variation. Noindividual limits for variation in case of individual items shall beincluded in the order.

2.37.2. However, the variation can also exceed 20% wherein one moreadditional unit exceeds 20% of the contract price. Provisions tothis effect should be incorporated in the bidding documents.

2.38.Contract amendment

2.38.1. After conclusion of the contract, any amendment in the contractterms/ conditions should be severely discouraged. However, inexceptional cases where the modification/ amendments areconsidered to be absolutely essential, the same should beallowed only after taking into account the financial implicationsfor the same. The approving authority for such contract


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amendment shall be the respective Tender Committee by mutualagreement from the other party.

2.39.Contract monitoring

2.39.1. Contract is a teamwork that includes both the bidder, and itssub-contractors, and CDCL. All the parties are required todiligently use their efforts to closely monitor the execution of thecontract as per the terms and conditions agreed. Follow upactions, wherever required should be taken promptly. Deliverycompliance including offering the stores for inspection in timeshould be monitored. Delivery period extension should begranted only on bonafide request and not in a routine and casualmanner. If the delay is attributed to the supplier, the LCamendment charges or any other cost should be borne by thesupplier/bidder besides payment of the liquidated damages, ifapplicable. For the extended period of delivery for reasonsattributable to the supplier the escalation charges should not bepayable to the supplier if the contract has price variation clause.

2.40.Fraud & Corruption2.40.1. The Anti Corruption Commission (ACC) of Bhutan requires that

CDCL, and the Bidders/ Suppliers/ Contractors observe thehighest standard of ethics during the procurement and executionof contracts. In conformance with ACC guidelines an IntegrityPact shall be signed by CDCL and the Bidders/ Suppliers/Contractors.


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Appendix

Appendix - I: Procurement for Projects Related Goods

1. Background and rationale

1.1 When CDCL secures a project, it has to execute it as per the termsand conditions, including the timeframe and the use of specificconstruction materials, it agrees to with the client.

1.2 The efficiency and delivery of the output based on targeted workcompletion schedule requires quick and real time mobilization ofrequired goods, materials and equipment. In such cases, it may bedifficult for CDCL to follow normal procurement methods, especiallyopen bidding, to source project related goods, materials andequipment.

1.3 Further, it is neither practical nor cost efficient to procureconstruction goods, materials and equipment in advance as it wouldimpact the cash flow of CDCL and lead to over stocking of unnecessarygoods.

1.4 Whereas procurement of regular goods, materials and equipment isplanned and budgeted in the beginning of a year, procurement ofprojects related goods, materials and equipment is done only after aproject is finalized, mainly using mobilization advances received fromclients.

2. Provision

2.1 Notwithstanding any other provisions in tis manual to the contrary,when CDCL executes projects as contractor for and on behalf of theclient, CDCL shall procure goods, material and equipment for suchprojects as per provisions outlines below:

a) Under this procurement method, CDCL may procureconstruction goods, materials and equipment required for aproject directly from manufacturers. However, if themanufacturer doesn’t supply particular goods, materials andequipment due to franchise-arrangement, CDCL may procurethe goods directly from authorized dealers or suppliers of suchgoods.

b) Wherever available and based on competitive prices, CDCLmay also procure construction goods, materials and


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equipment required for a project directly from DHI portfoliocompanies, state-owned enterprises or government agencies.

c) As CDCL could be executing several/different projects at agiven time, procurement of similar construction goods,materials and equipment for such projects shall be donetogether, as far as possible. This will not only provideadministrative efficiency of the procurement process, but willalso provide benefits of large-scale purchases.

3. Terms and conditions for use of this procurement method

3.1 While the provisions of this section are designed to facilitate timelyexecution of projects and to avoid delays in the procurement ofconstruction goods, materials and equipment, CDCL shall ensure thatbasic due diligence and transparency are always maintained in theprocurement of project related goods and materials.

3.2 While CDCL may find it inconvenient to use open bidding to sourceits project related goods and materials, CDCL shall always explore thepossibility of using the limited bidding process.

3.3 This procurement method may be used only to procure projectrelated goods, materials and equipment.

3.4 Procurement of non-project related equipment and machineriesshall follow the normal procurement methods.

3.5 CDCL shall maintain a database of information of all the keymanufacturers, dealers and suppliers of major construction goods andmaterials.

3.6 Wherever possible, CDCL shall enter into framework or rate contractwith key manufacturers, dealers and suppliers of construction goodsand materials on a periodic basis as per industry best practices.

3.7 Procurement under this method shall be organized as per theprovisions of chapter 5, except for the thresholds, which have beendefined below.

4. Threshold

4.1 The estimated value of the contract including all applicable taxesand duties shall determine the threshold value for the application ofthis procurement method.


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4.2 The procurement method detailed in this section shall be appliedonly to procure goods, materials and equipment up to 10% of theproject value for each occasion.

4.3The approving authority for the adoption of this procurement methodshall be as follows:

Threshold (Nu) Approving Authority

Up to 1 million Department Level Tender Committee

(DLTC)

Above 1 million - 20 millionCorporate Level Tender Committee

(CLTC)Above 20 million Board Level Tender Committee (BLTC)


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Appendix - II: Tender Committee and Evaluation Committee Declaration Form

(To be modified as applicable)

Name :Office :Designation :Contract Title:Contract Reference:

1. I, the undersigned …………..(Insert the name of the member)…………. appointed as member of the Tender Committee/ TenderEvaluation Committee for the above contract, fully understand the“commercial-in-confidence” nature of the proceedings of the procurementprocess and declare that I will not discuss any matters pertaining to theproceedings, including our recommendations with any party other thanthe other members of the Tender Committee and the Tender EvaluationCommittee appointed for this procurement and who are officially involvedin the process.

2. I, the undersigned declare that I am in no way linked, associated orinvolved with any of the potential bidders of the procurement underconsideration.

3. At the first instance when I come to know that participation of anybidder known to me may cause or may be interpreted as a conflict ofinterest, I will so inform to the appointing authority and request for areplacement.

4. I will maintain strict confidentiality of information throughout theprocurement process.

5. I will refrain from receiving any personal gain what so ever from anyaction related to this procurement.


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I am fully aware of the responsibilities of the Tender Committee/ TenderEvaluation Committee (Insert as applicable) and also the ethics ofProcurement.

NAME & Signature of the Member:Tender Committee/Tender Evaluation CommitteeDate:


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Appendix - III: INCOTERMS 2010

Background

The Incoterms® rules are an internationally recognized standard and areused worldwide in international and domestic contracts for the sale ofgoods. First published in 1936, Incoterms® rules provide internationallyaccepted definitions and rules of interpretation for most commoncommercial terms.

The rules have been developed and maintained by experts andpractitioners brought together by the International Chamber of Commerce(ICC) and have become the standard in international business rulessetting. They help traders avoid costly misunderstandings by clarifyingthe tasks, costs and risks involved in the delivery of goods from sellers tobuyers. Incoterms® rules are recognized by UNCITRAL as the globalstandard for the interpretation of the most common terms in foreigntrade.

Incoterms 2010

The number of Incoterms® rules has been reduced from 13 to 11. Thishas been achieved by substituting two new rules that may be usedirrespective of the agreed mode of transport – DAT, Delivered at Terminal,and DAP, Delivered at Place – for the Incoterms® 2000 rules DAF, DES,DEQ and DDU.

Under both new rules, delivery occurs at a named destination: in DAT, atthe buyer’s disposal unloaded from the arriving vehicle (as under theformer DEQ rule); in DAP, likewise at the buyer’s disposal, but ready forunloading (as under the former DAF, DES and DDU rules).

The new rules make the Incoterms® 2000 rules DES and DEQsuperfluous. The named terminal in DAT may well be in a port, and DATcan therefore safely be used in cases where the Incoterms® 2000 ruleDEQ once was. Likewise, the arriving “vehicle” under DAP may well be aship and the named place of destination may well be a port:consequently, DAP can safely be used in cases where the Incoterms®2000 rule DES once was. These new rules, like their predecessors, are“delivered”, with the seller bearing all the costs (other than those relatedto import clearance, where applicable) and risks involved in bringing thegoods to the named place of destination.

Classification of the 11 Incoterms® 2010 rules

The 11 Incoterms® 2010 rules are presented in two distinct classes:


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RULES FOR ANY MODE OR MODES OF TRANSPORT

EXW EX WORKS

FCA FREE CARRIER

CPT CARRIAGE PAID TO

CIP CARRIAGE AND INSURANCE PAID TO

DAT DELIVERED AT TERMINAL

DAP DELIVERED AT PLACE

DDP DELIVERED DUTY PAID

RULES FOR SEA AND INLAND WATERWAY TRANSPORT

FAS FREE ALONGSIDE SHIP

FOB FREE ON BOARD

CFR COST AND FREIGHT

CIF COST INSURANCE AND FREIGHT

The first class includes the seven Incoterms® 2010 rules that can be usedirrespective of the mode of transport selected and irrespective of whetherone or more than one mode of transport is employed. EXW, FCA, CPT, CIP,DAT, DAP and DDP belong to this class. They can be used even whenthere is no maritime transport at all. It is important to remember,however, that these rules can be used in cases where a ship is used forpart of the carriage.

In the second class of Incoterms® 2010 rules, the point of delivery andthe place to which the goods are carried to the buyer are both ports,hence the label “sea and inland waterway” rules. FAS, FOB, CFR and CIFbelong to this class. Under the last three Incoterms rules, all mention ofthe ship’s rail as the point of delivery has been omitted in preference forthe goods being delivered when they are “on board” the vessel. This moreclosely reflects modern commercial reality and avoids the rather datedimage of the risk swinging to and fro across an imaginary perpendicularline.

Definitions

EXW: The seller makes the goods available at its premises. This termplaces the maximum obligation on the buyer and minimum obligations onthe seller. The Ex Works term is often used when making an initial


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quotation for the sale of goods without any costs included. EXW meansthat a seller has the goods ready for collection at his premises (works,factory, warehouse, plant) on the date agreed upon. The buyer pays alltransportation costs and also bears the risks for bringing the goods totheir final destination.

FCA: The seller hands over the goods, cleared for export, into the disposalof the first carrier (named by the buyer) at the named place. The sellerpays for carriage to the named point of delivery, and risk passes when thegoods are handed over to the first carrier.

CPT: The seller pays for carriage. The risk of loss or damage to the goodsoccurring after the delivery has been made to the carrier is transferredfrom seller to buyer. CIP – The seller has the same obligation as under CPT, but has theresponsibility of obtaining insurance against the buyer’s risk of loss ordamage of goods during carriage. Consequently, the seller contracts forinsurance and pays the insurance premium. The buyer should note,however, that under the CIP terms, the seller is required to obtaininsurance only on minimum cover.

DAT – Seller pays for carriage to the terminal, except for costs related toimport clearance, and assumes all risks up to the point that the goods areunloaded at the terminal. Terminal includes quay, warehouse, containeryard, road, rail or air terminal. Both parties should agree on the terminaland if possible a point within the terminal at which point the risk willtransfer from the seller to the buyer.

DAP – Seller pays for carriage to the named place, except for costsrelated to import clearance, and assumes all risks prior to the point thatthe goods are ready for unloading by the buyer.

DDP – Seller is responsible for delivering the goods to the named place inthe country of the buyer, and pays all costs in bringing the goods to thedestination including import duties and taxes. This term places themaximum obligations on the seller and minimum obligations on the buyer.

FAS – The seller must place the goods alongside the ship at the namedport. The seller must clear the goods for export. Suitable only for maritimetransport but NOT for multimodal sea transport in containers. This term istypically used for heavy-lift or bulk cargo.

FOB – The seller must load the goods on board the vessel nominated bythe buyer. Cost and risk are divided when the goods are actually on boardof the vessel. The seller must clear the goods for export. The buyer mustinstruct the seller the details of the vessel and the port where the goods


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are to be loaded, and there is no reference to, or provision for, the use ofa carrier or forwarder. CFR – Seller must pay the costs and freight to bring the goods to the portof destination. However, risk is transferred to the buyer once the goodsare loaded on the vessel (this rule is new!). Insurance for the goods is NOTincluded. This term is formerly known as CNF (C&F).CIF – Exactly the same as CFR except that the seller must in additionprocure and pay for the insurance.


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Appendix – IV: Bid Register Format


Sl.No.

Date ofBid

Receipt

Time ofBid

Receipt

Persondelivering the

bid (notapplicable incase of bidsreceived by

post)

Signatureof

authorized officialreceiving

bids

Signature ofthe

Representative of theBidder*

Remarks

Name ContactNo.


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Appendix - V: Record of Bid Opening


CONTRACT TITLE/No. :Bid No :Date of Tender Notification:Last date and time for bid submission (indicate amendment if any):

Place for submission of bid (indicate amendment if any):

1. The following bids were received on or before the deadline for submission of bids and were publicly opened on …….insert date……at ……….insert time…..at …….insert venue……

Sl#

Nameof

Bidder

Nationality

TotalQuoted

Bid Price

Discount/Rebates

BidSecurit

yAmoun

t

Validity ofBid

security

Remarks

12345678910

2. The following bidder’s official representative attended the public opening of bids:

Sl# Name ofrepresentati

ve

Name ofBidder

TelephoneNumber

Signature

123456789


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3. The following observations/complaints were received from the bidders during the opening of bids.

SL# Name of representative

Name of Bidder

Brief Description of Observations/Complaints

Signature of bidder’s representative

12345678910

CHAIRPERSON(Signature, Name, Designation)

Member MemberSignature, Name Signature, Name




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BID OPENING CHECK LIST (should be marked YES or NO)

Particulars Bidder1 Bidder2 Bidder3 Bidder4 Bidder5Have the bids been presented in the correct format?Are the envelopes properly sealed, unopened and addressed to theProcuring Agency?Are the original envelopes and copies properly marked?Are all the bid securities in order: form, amount, validity?Have the bidders used the prescribed formats for Bid Submission Form, price schedule and bill of quantities?Have all members ofthe bid opening committee seen andapproved the above and signed the documents?Has the record of bidopening been duly completed?

< Record of observations, if any>

<Each member of the committee for the Bid Opening must sign and add his/her name below>


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Appendix - VI: Sample Evaluation Report

(Evaluation Committee shall be eligible to modify the format asper requirement of the specific case)

EVALUATION REPORT FOR THE PROCUREMENT OF ……………………………… (insert name of goods)

1. Scope of procurement and estimated cost:

The goods covered under this bid are for the supply of …………..(insertname of goods) and estimated cost of the goods is Nu ……….

2. Bidding document:

a) Salient points of bidding document:b) Stipulated period of supply - (specify duration)c) Price adjustment – (specify whether price adjustment is applicable

or not)d) Pre-bid meeting - (specify date of pre-bid meeting, if any) e) Bid security f) Performance guaranteeg) Liquidated damagesh) Payment terms

3. Bid invitation process:

Bids were invited on (date of invitation) and notice was published in(insert media of invitation and date of publication). A copy of theinvitation to bid is enclosed in the bidding documents.

The bidding documents were made available for sale from (specify date)to (specify date). The date of bid opening was (specify date). Thus, aminimum bidding period of (specify number of days) days was provided.

The following prospective bidders purchased the bidding document (givethe list of prospective bidders who purchased the bidding document).

Pre-bid conference was held on (specify date if applicable). The copy ofrecord note of discussion of the pre-bid meeting and the addendum wassent immediately to all the bidders who had purchased the biddingdocument and was incorporated in the bidding documents.

4. Bid response:


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In all (insert number of bids) bids were received.

In time: (insert number)

Late: (insert number)

Total (insert number)

Name of bidders whose bids were received (insert list)

5. Bid opening:

The bids were opened on (insert date) at (insert time) in the (insertvenue) in the presence of the bidders and /or their authorizedrepresentatives. All the (insert number) bids received were opened one byone. The quoted bid price, bid securities furnished by the bidders anddiscounts offered by the bidders were read out at the meeting.

Table of Bid Prices as quoted by the bidders is as follows:

Sl.No

Name ofBidder/Company

Bid price(Nu)

Discount/Rebate Offered

Remarks

6. Evaluation Team

The evaluation team comprised of the following:

i.ii.iii.iv.

All the members of the evaluation team signed on the declaration formconfirming that they do not have any affiliation to any of the bidders thatcould influence their input into the evaluation process.

7. Clarifications obtained:

(Describe the type of clarifications sought from the bidders and mentionthe bidders’ name)


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8. Responsiveness of the Bids

a) Completeness and legal validity:

(specify the legal validity of bids for e.g. All bids are duly signed by thebidders or by persons holding proper power of attorney and hence arelegally valid. They have quoted for all the items and are thus complete,etc.)

b) Bid Validity:

As per the clause (insert clause no.) of Instructions to the Bidders, thebids shall remain valid for a period not less than (insert number of days)days after the deadline for the submission of the bid. The bids wereopened on (insert date) and hence the bids should be valid up to (insertdate). All the bidders have quoted the bid validity as prescribed in thebidding documents. (Indicate if there is any variation)

c) Bid Security:

As per Clause (insert clause no.) of the Instructions to the Bidders, the bidsecurity should be (insert amount) in the form of a Bank Guarantee or aDemand draft which shall be valid for 30 days after the date of expiry ofthe validity of the bid i.e. up to (specify date) and shall be enforceable inany bank in Bhutan. The bid securities furnished by the prospectivebidders are as follows:

Sl.No


Bid Securityamount(Nu.)

Bid Securitytype &issuingbank

Bid validity

(describe whether the bid securities are in the prescribed format and state whetherthey are valid or not. Give reasons for invalid bids)

d) Responsiveness to commercial conditions:


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The bidders have (state whether bidders have stipulated any conditions).They have (state whether the Bid Submission Form has been signed) thesupplier’s Bid Submission Form as well as bidding documents and hence itis taken that they are agreeable to the commercial conditions.

e) Bids rejected as non-responsive to the bidding documents:

Sl.No


Brief reasons for rejection

f) Sample responsiveness examination

SlNo.

Nameof

bidders

Eligibility

BidSecurit

y

Completeness of bid

Substantialresponsivenes

s

Acceptancefor detailedexamination

1 A NO1 YES YES NO NO2 B YES YES YES YES YES3 C YES YES NO4 NO NO4 D NO1 NO3 YES NO NO5 E YES YES YES YES YES6 F YES YES YES YES YES

i) Government owned enterprise and legally not autonomousii) Trade license not validiii) Bid security valid only for 91 daysiv) Rates not quoted for some unit items & power of Attorney not

submitted

g) Substantially responsive bids

In view of the above the bids of the following bidders are determined assubstantially responsive to the provisions of the bidding documents.

(list the substantially responsive bids)

h) Evaluation Criteria


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The evaluation was conducted in accordance with the criteria set out inthe Invitation for bids as summarized in below table (illustrative only):

Item

Condition Clause ref Requirement

1 Price basis – Firm or variable 2 Inclusive of taxes or duties34567

i) Arithmetical check:

All responsive bids were arithmetically checked. Arithmetical errors werefound in the price schedule of the bid submitted by the following bidders:

(specify bids in which arithmetical errors were found and details of errors)

Table of Bid Prices after the arithmetical check is as follows:

Sl.No


Correctedbid price

(Nu)

Discount/Rebate Offered

Finalbid

price(Nu)

Remarks

j) Deviations taken by the bidders:

i) Technical Conditions (specify the details of technical deviationstaken by each bidder with reference to the conditions specified inthe bidding documents, if required, separate statement can beenclosed)

ii) Commercial Conditions (specify the details of commercialdeviations taken by each bidder with reference to the conditionsspecified in the bidding documents, if required, separate statementcan be enclosed)

There are(specify any condition or deviation) which warrant loading of thebid prices. No other specific evaluation criteria have been stipulated in the


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bidding document. The loading of the prices is therefore (specify theloading factor, if none, specify as NIL).

k) Evaluation table showing ranking of the bids after loading, ifapplicable:

Rank Name ofBidder/Company

Bid price after loading,if applicable (Nu)

Remarks

123

(the bid ranking is done in ascending order of bid prices)

The comparative statement of the evaluation of bids is enclosed asAnnexure II.

As per Clause (insert clause no.) of the Instructions to the Bidders, inorder to qualify for supply of goods, the substantially responsive biddersshould meet the minimum qualifying criteria. Therefore the substantiallyresponsive lowest bids in the order of above ranking should be evaluatedagainst the following minimum qualifying criteria:

(The table below will be inserted only in such cases where minimumqualification criteria has been prescribed in the bidding documents)

l) Evaluation table of minimum qualification criteria(illustrative):

Sl.No.

Clauseref.

Minimum qualificationrequired*

Qualification ofthe Lowest

Bidder

Remarks

1 (insertclauseno.)

<specify the QRrequirements as specifiedin the bidding documents>e.g. Average annualturnover of goods suppliedin the last 3-5 years: Nu.

<specify thedetails given bythe bidder inthe bid>

Bidder<comply/do notcomply>withthis criteria

2 (insertclauseno.)

<specify the QRrequirements as specifiedin the bidding documents>

<specify thedetails given bythe bidder inthe bid>

Bidder<comply/do notcomply>withthis criteria

3 (insertclauseno.)

<specify the QRrequirements as specifiedin the bidding documents>

<specify thedetails given bythe bidder in

Bidder<comply/do notcomply>with


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the bid> this criteria456

Important Notes:

In the event the lowest bidder does not meet any of the minimumqualification criteria, similar table for the next lowest bidder to beinserted.

All document specified in the bidding documents need to be verified as aproof of minimum qualification criteria

Examples:Satisfactory completion of comparable supplies in past 5 years (Supplyorders and completion certificates to be attached).

Credit facilities- Closing cash and bank balances supported by audited financialstatements and bank statement for the last business year end and thecurrent overdraft facilities up to a maximum limit issued by a reputedfinancial institute to be taken into account.

[The above minimum qualification criteria shall apply to supplies wheresuch requirements has been prescribed in the bidding documents]

m) Evaluation Result:

The lowest evaluated responsive bidder(s) (insert name of bidders andtheir lowest evaluated prices for their respective items in case of morethan one items) are as follows:

Sl.No.

Name of the Bidder Particulars of the Item Total Bid Price

TOTAL VALUE OF PROCUREMENT

n) Recommendations


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1. 2. 3.

Signature of the Evaluation Committee Members

Enclosures:

Determination table of responsiveness (Annexure I)Comparative statement of offers (Annexure II)

Annexures

Annexure-I: Determination table of responsiveness

Bidder(a)

Verification

(b)

Eligibility(c)

BidSecurit

y(d)

Completeness of Bid

(e)

SubstantialResponsive

ness(f)

Acceptancefor

DetailedExaminatio

n(g)


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Annexure-II: Comparative statement of offers

The date for the exchange rate shall be [insert day, month and year]

[If domestic preference shall be a bid-evaluation factor, the methodology

for calculating the margin of preference and the criteria for its application

shall be as specified in Chapter 8 of this manual]

Bids will be evaluated lot by lot. If a Price Schedule shows items listed but

not priced, their prices shall be assumed to be included in the prices of

other items. An item not listed in the Price Schedule shall be assumed to

88

Bid prices expressed in different currencies shall be converted in: [insert the name of the currency]

The source of exchange rate shall be: [ insert the name of the source]

Domestic preference [insert “shall” or “shall not”] be a bid evaluation fac-tor.

Evaluation will be done for……..[Select Items or Lots]

Note:

[Select one of the two sample clauses below as appropriate

Bids will be evaluated for each item and the Contract will comprise theitem(s) awarded to the successful Bidder.

Or

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be not included in the bid, and provided that the bid is substantially

responsive, the average price of the item quoted by substantially

responsive bidders will be added to the bid price and the equivalent total

cost of the bid so determined will be used for price comparison.]

[insert any other specific criteria]

Bidders [insert “shall “or “shall not”] be allowed to quote separate prices for one or more lots.

89

The adjustments shall be determined using the following criteria:

a) Deviation in Delivery schedule: [insert Yes or No. If yes insert the adjustment factor]

b) Deviation in payment schedule: [insert Yes or No. If yes insert the adjustment factor]

c) The cost of major replacement components, mandatory spare parts, and service: [insert Yes or No. If yes, insert the Methodology and criteria]

d) The availability in the Purchaser’s Country of spare parts and after-sales services for the equipment offered in the bid [insert Yes or No, If yes, insert the Methodology and criteria]

e) The projected operating and maintenance costs during the life of the equipment [insert Yes or No, If yes, insert the Methodology and criteria]

f) The performance and productivity of the equipment offered; [Insert Yes or No. If yes, insert the Methodology and criteria]

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