This article has been written by Harshit Shekhar, pursuing a Certificate Course in Government Contracts, Tender Management and Regulations from LawSikho.
In today’s era of rapidly evolving economy & trade, business houses look for opportunities to benefit from. The government structure provides a platform to MSMEs, individuals, different business groups to capitalize on the projects or services required, thereby creating employment and fulfilment of responsibilities that the government bears. Government projects are a big source of surplus generation as well as for the future of firms/ business houses.
From acknowledging an invitation to a tender & winning a tender bid, it requires certain guidelines & specifications to be met. A person or a business house filing a bid for the tender should keep in mind that there is bound to be a cut-throat competition. Right from the scope & obligations of the bidder as well as understanding the eligibility condition, these primary objectives form an important criterion for the selection of a tender bid. One has to keep in mind the layout & specifications that are to be adhered to in a tender bidding document.
Factors to look out for
It is also essential to keep in mind the method of evaluation of the bid of the bidder. Whether there shall be a third party evaluation or some other evaluation method would be adopted. At times the notice inviting the bid involves a section that talks about instructions to the bidder that is to be followed for successful completion of the project as well as the methods to file the tender. A bidder in order to prepare a tender winning bid must always pay attention to those particulars. Being the fundamental rubric, the fulfilment of these terms and conditions become vital. Before a bid is submitted for the purpose of winning the tender, it is essential to go through the qualifications and other terms and conditions set under the notice inviting bid, which is generally issued by the department, for the purpose of tendering.
Generally, the rubric of a notice inviting bid would be as follows:
- Name and type of project for which the bid is called for.
- Bid security or the Earnest money that has to be deposited.
- Tender fee.
- Period of completion of the tender.
- Approximate value of the project.
- Date and time of opening of the bid.
- Date and time of closing of bid submission.
- Date and time of opening and closing of technical bid.
- Date and time of opening and Closing of financial bids are generally provided post completion of technical bids.
- Qualification criteria shall be prescribed under the notice inviting bid, soliciting eligible bidders to bid.
These aspects are essential to further proceed towards the bidding process. Technical criteria, as well as financial criteria, are two major eligibility heads. Unless a business firm does not possess technical eligibility to pursue the project, it is futile to proceed further. This aspect is highlighted through the notice inviting bid.
Another crucial factor is that the bidder is not supposed to draft and submit another bidding document in toto. In cases where online procurement is being facilitated, the bidder just has to mention his consent over the described criteria and information uploaded in the CPPP or such an e-procurement portal. If the bidder therein, refuses to pursue the bidding process, he/she cannot further take up the bidding process later.
Further, the bidders have to prepare and annex the following documents, along-with precursory information and specifics of the mapping of the project according to them:
- Original documents of the bidder, indicating place of business and their legal status.
- Previous experience(s) with similar project(s).
- Certificate of completion of previous projects by valid and legitimate authorities supervising the project.
- Financial reports and Audit reports.
- Certificate by bank certifying the credit of the bidder on financial front.
- Undertaking that the bidder has agreed with the terms and conditions of the tender and the project flashed therein along with the set standard.
The factor that initiates the tendering process notices inviting tender. Once a notification has been issued, next is the process of identifying the documents which are required for the project inviting tender. Documentation of all the facts needs to be kept up-to-date. From finances to investments & cost incurred regarding the project has to be documented and included in the contract & the tender documents as well.
There are two sets of criteria that the bid has to qualify, in order to procure the tender, in case of two-stage bidding. These are:
- Technical bid
- Financial bid
In cases of one stage bidding/single-stage bidding, it is just the technical criteria or the stipulated criteria of the tender that the bidder has to qualify. Where both these bids are necessary, therein it becomes vital that terms and conditions of invitation documents are duly observed. In case of a bid failing to adhere to the standards, then the officer opening and evaluating the bid has to provide a reason in writing for its rejection to the bidder. It is a practice that the authority reserves the right to accept or reject bids. It also holds the authority to cancel the bidding process altogether. The only prerequisite is that such cancellation has to be done prior to the award of the contract.
A technical bid is evaluated by the stipulated authorities seeking bidders. If in case, the technical bid is satisfactory as per the required standard, and then financial bids are assessed. If financial bids are satisfactory, the bidder who quotes the lowest bid price is provided with the tender.
Bidding for a tender is important for firms that undertake PPP activities. Compliance with statutory, regulatory and procedural aspects of the bidding process with due diligence is essential for bidders to keep winning the targeted tenders. This furthers their business portfolio and generates monetary support as well as keeps the business moving. Completion of a tender is a bonus that adds to the firm’s or the person’s profile, that later on in their next project plays a crucial role in the eyes of stakeholders.
- Notice Inviting Tender; DMRC/O&M/TR/AGM/Pulley ATD/ETR0042016; http://www.delhimetrorail.com/otherdocuments/920/ETR0032016_NIT.pdf
- Instructions for Online Bid Submissions, file:///D:/Instructions_To_Bidder_for_Online_Bid_Submission.pdf
- Revision of Manual for Procurement of Works, 2019, Public Procurement Division, Department of Expenditure, Ministry of Finance, Government of India; https://www.doe.gov.in/sites/default/files/Revision%20of%20Manual%20for%20Procurement%20of%20Works%202019.pdf
- Sidhartha S. Padhi, Pratap K.J. Mohapatra, Centralized bid evaluation for awarding of construction projects – A case of India government, International Journal of Project Management, Volume 28, Issue 3, 2010, Pages 275-284, ISSN 0263-7863, https://doi.org/10.1016/j.ijproman.2009.06.001.
- Lakshya Kumar, Apurva Jindal, Nagendra R. Velaga, Financial risk assessment and modelling of PPP based Indian highway infrastructure projects, Transport Policy, Volume 62, 2018, Pages 2-11, ISSN 0967-070X, https://doi.org/10.1016/j.tranpol.2017.03.010.
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