UNDERSTANDING THE IMPORTANCE TENDER

DOCUMENTS

PRESENTION OUTLINE

Introduction: Problems to be circumvented Keeping in mind what is to make a good

contact The List of Tender Documents Arrangement of Sections Some of the Important Clauses Technical Specifications Schedule of Requirements Price Schedule (s) Standard Forms

DEFINITIONSDEFINITIONS

“Standard” means a level of quality or excellence that is accepted as the norm or by which actual attainments are judged

“Tender” means an offer in writing by a tenderer to supply at a price goods, services or works, pursuant to an invitation to tender by a procuring entity

“Tender Documents” means the documents provided by the procuring entity to tenderers as a basis for preparation of their tenders

“Standard Tender Documents” means the documents prepared in a level of quality determined by PPOA, and distributed to PE’s for the purpose of customization and providing them to tenderers as a basis for preparation of their tenders

STANDARD TENDER DOCUMENTS

Why Standard Documents? Applicable Law

To avoid misinterpretation of obligations Suppliers Bidding Strategy

Supplier proposing a low price only to win the contract and seek variances once the contact is signed

Change of ownership of management The company sold to a third party The level of trust and or evaluated capability

may change Changed circumstances

Example: Drastic economic changes beyond the control of the parties.

Why Standard Documents? Currency fluctuation

May affect cash flow of the parties May result to non-performance

Delays The supplier not able to avail goods In time at required place.

Dominance Purchaser or supplier dictating terms to either party.

Incomplete or incorrect specifications Language

Parties all thinking erroneously that they understand what was intended.

What to keep in mind

Know what you what to obtain and what to avoid Know what your option are when things go wrong. Know your suppliers

Seek references if you do know them Create a win-win situation by envisaging a longer

term relationship Do not allow someone to promise what you

suspect cannot be accomplished. E.g.: Allowing unverified qualification or capability

Avoiding ambiguous terms Ambiguity leads to misinterpretations and

disagreements

What to Keep in mind

Keeping technology in mind Leave your options open as much and as long as

possible Keeps industrial and intellectual property in mind

E.g. ensuring that knowledge developed in programs remain the property of the company.

Or you are accorded protection by the supplier acting as an agent against prosecution by patent right holder

Have a clear dispute resolution clause to let all parties know the procedures for getting relief or remedy if something goes wrong. Part of risk management

What to Keep in mind

Having clear termination clause Thinking of consequences of that

terminationoE.g. return of proprietary

documentation Avoid clauses that foresee termination

by agreement.

Standard Tender Documents

1. Standard tender document for design construction, supply, installation, testing commissioning and handing over of plant/project (turnkey project.)

2. Standard tender document for supply installation and commissioning of plant and equipment.

3. Standard tender document for prequalification of procurement candidates/suppliers.

4. Standard tender document for procurement of works (Roads, Bridges, Water and other Civil Engineering works).

5. Standard tender document for procurement of works (small works)

THE PUBLIC PROCUREMENT PROCESS

6. Standard tender document for procurement

of Works (Buildings and associated civil engineering Works)

7. Standard tender document for procurement of works. (Electrical and mechanical works)

8. Standard tender document for procurement of goods. Standard tender document for procurement of insurance services

9. Standard tender document for procurement of services

THE PUBLIC PROCUREMENT PROCESS

9. Standard tender document for letting, leasing, licensing, tenancy, franchise and management contracting.

10. Standard request for proposals (RFP) (Selection of consultants)

11. Standard tender document for Request for Proposals (RFP) (selection of individual professional consultants

12. Standard tender document for sale of boarded stores and equipment.

The standard tender documents are usually customized by purchasers.

ARRANGEMENT OF SECTIONS

General arrangement of the standard tender documents:The cover (To be customized by Procuring entities(Introduction (Information to PEs about the document)Section I: Invitation to tender Section II: Instructions to tenderersSection III – General conditions of contractSection IV – Special conditions of contract

ARRANGEMENT OF SECTIONS

Section V – Technical Specifications/Scope of Works /TOR

Section VI – Schedule of Requirements -Section VII- Price Schedule Section VIII –Standard Forms

Section I: Invitation to Tender

Instruction to bidders on procedures for submission of bids

Desirable goods or works to be procured

Criteria for evaluation of bidsDefinitions of conditions of the

proposed contractClear information to enable tender

decide to tender or not.Any other tender requirements.

Section II: Instructions to Bidders

Important clauses:Eligible TendererEligible goodsCost of tenderingContents of tender documentClarification of tender documentsAmendment of tender document

Section II: Instructions to Bidders cont’d

Language of tenderDocuments compromising of tenderInstruction on how to complete

Tender formsTender prices( with or excluding

TAX, Incoterms)Tender currencies (Multi-currency or

single Currency

Section II: Instructions to Bidders Cont’d

Tenderer’s qualificationsTender security/tender securing

declarationValidity of tenderFormat of signing of contractSealing and marking of tendersDeadline for submission of tenderNotification and withdrawal of tenderOpening of tendersClarification of tenders

Section II: Instructions to Bidders

Evaluation of Tenders and Award of contract

Preliminary examination Technical Evaluation Financial Evaluation

Conversions to single currency ( for multiple-currency tenders)

Award of contract and Communication to bidders

Signing of contract

Section II: Instructions to Bidders

Procuring entity’s right to vary quantity

Procuring entity's right to accept or reject any or all tenders

Performance Security.Caution on corrupt or fraudulent

practices (Declaration form to be completed)

Section III :General Conditions of Contract

Not be amended-Clarification under Special Conditions of Contract section

Definitions (terms and Acronyms) Applicable law, Country of origin and

Standards Patent right (Contractor to indemnify PE

against third party claims of infringement) Inspection and tests and Insurance( can be

clarified through INCOTERMS)

Section III :General Conditions of Contract

Payments (terms and duration e.t.c) and Prices (include issues regarding conditions for variations, adjustments)

Assignments to other parties ( no assigning of obligation without PEs consent)

Sub-contracts( conditions for engagements) and Termination of contract

Section III :General Conditions Of Contract cont’d

Liquidated damagesResolution of disputesGoverning Language Force majoure

Section IV: Special Conditions of Contract

To be prepared by the procuring entityShould not contradict the general

conditions of contractsThey complement the general

conditions of contractsThe General and Special conditions

of contract will become the conditions of the contract when it is finally signed

Section V-Technical Specifications

To include but not limited to; Scope of works .Bill of Materials.

Quantities( for works or services as appropriate)

Terms of Reference (for Request for Proposals)

Drawings( for works) Testing /Inspection (works and goods) Standards (National/International) Accepted Quality Levels Note: Specifications to be performance based

preferably (No restrictive titles)

Section VI – Schedule of Requirements

Brief Description of Requirements Quantity( may be as and when required or

fixed) Delivery Schedule (shipment) e.g. selected

Incoterms. Note: The starting delivery date will be

specified That date should either be the date of the

contract award or date of contract signature Or the date of opening of letter of credit Or the date of confirmation of Letter of

Credit

Section VII-Price Schedule (s)

Contains:ItemDescriptionCountry of OriginQuantity Unit PriceTotal AmountINCOTERM e.g. CIF,CFR,EXW, e.t.c

Section VIII – Standard Forms

Form of tenderConfidential Business Questionnaire

FormTender Security FormContract FormPerformance Security formBank Guarantee for Advance

paymentManufacturer’s Authorization form Declaration form

BENEFITS OF STD’sBENEFITS OF STD’s

• Promotes harmonization and standardization of procurement practices

• Facilitates a uniform understanding among practitioners and end-users of the their rights and obligations

• Promotes increased capacity by promulgating best practices and facilitating predictability in procurement proceedings

• Enhances and promotes transparency

BENEFITS OF STD’sBENEFITS OF STD’s

• Clarity of tender requirements-provides information that enables procuring entities to achieve value for money in a procurement process

• Helps to avoid/minimizes cost overruns/variation orders

• Avoids/minimizes disputes in Contract Administration -delayed projects

• Flexibility -Allows PE to customize the bid documents and state all conditions of the tender

• Helps to minimize risk in public procurement

• Ensures award to lowest evaluated bidder