Price analysis can be considered a stage of bid evaluation depending on the provisions of a legal and regulatory framework. It is an assessment of the evaluated price of a responsive bid to ascertain that it is not unreasonably high nor unreasonably low, but fair enough to the procuring entity and the supplier. In the Millennium Challenge Corporation (MCC) Program Procurement Guidelines (PPG) and the accompanying MCC Procurement Guidance Note: Price-Reasonableness Analysis (MCC-PGN-PRA) used by Millennium Challenge Accounts (MCAs) around the world, price analysis is a mandatory requirement during bid evaluation. After bid evaluation, the Procurement Agent does a price reasonableness analysis to determine if the price is reasonable. The price reasonableness analysis may be included in the evaluation report or documented separately and referenced in the evaluation report. The unreasonableness of an evaluated bid price could be described as unreasonably high or unreasonably low. If the price reasonableness analysis proves that the price of the lowest evaluated bid is unreasonable, the bid is rejected.
1. What is bid validity?
When a bidder submits a bid or proposal in response to an invitation for bids or a request for proposals, they need to commit to their bid (this is done on the bid or proposal submission form) and also to how long the bid/proposal can be considered effective (this is what is commonly called the bid or proposal validity period). For the sake of simplicity and to avoid unnecessary repetition, we will refer from this point forward only to “bid validity”, but it must be understood that we are referring to the validity of a bidder’s offer, be it a bid or a proposal.
[Read more…] about Understanding Bid Validity and the Bid Validity Period
As the field of Procurement is still evolving and scholars don’t seem to subscribe to universal definition of concepts such as what constitute the procurement cycle, this article does not make reference to any textbook or academic publication. It is based on years of experience from practicing Public and Project Procurement and takes into consideration bid evaluation procedures and practices applicable under several Public and Project Procurement legal and regulatory frameworks.
Definition of Bid Evaluation
Bid evaluation is the organized process of examining and comparing bids to select the best offer in an effort to acquire goods, works and services necessary to achieve the goals of an organization. The best offer recommended as a result of bid evaluation is referred to as the lowest responsive evaluated bid. It may also be called the most economically advantageous tender (MEAT).
[Read more…] about The Bid Evaluation Process
Although an initial review of the offers received is done at the bid opening event, a preliminary examination of the offers is done at the beginning of the evaluation process to determine, the responsiveness of the offers to the solicitation documents. After that, a detailed examination is done only of the offers that complied with (were responsive to) the requirements of the solicitation documents.
In the case of solicitations for goods and works procurement, after confirming compliance with the technical requirements, a comparison of the proposed price is made, and the offer that is technically compliant, and with the lowest evaluated bid price, is the one that is recommended for contract award.
When evaluating consultants, individuals or firms, the technical qualifications are also initially assessed. For individual consultant selection, once the technical qualifications are determined, the consultant obtaining the highest technical score above the minimum technical qualifying mark is requested to submit a financial offer and to negotiate a contract libido-portugal.com/.
In the case of consulting firms, depending on the procurement method, the selection could be similar to that of individual consultants (as indicated above) or the final selection could be determined by scoring and assigning weights to both the technical and financial evaluation. The highest ranked consultant resulting from the sum of the combined technical and financial scores would be recommended for invitation to negotiate the contract.
The result of the bid or proposal evaluation process is dependent on the procurement method and the procedures for determining the selected supplier, contractor or service provider that will be recommended for negotiations and/or contract award.
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Is it possible to guarantee quality based on documentation received in response to an invitation for bids?
While preparing to brief an evaluation panel, the chair reserved for me was a bit wobbly so I decided not to sit on it. Comments were made about the quality of the chair because it had been purchased a year ago, and there had been problems with the furniture from a particular supplier.
One of my colleagues raised an interesting question: Is it possible to guarantee quality goods during the bid evaluation process based only on documentation received from bidders?
The truth is, quality cannot be determined solely based on documents received in response to an invitation for bids. And the buyer has the right to verify information submitted by bidders at any staged in the bid evaluation process.
The evaluation and selection process is designed to review bids using stipulated evaluation criteria to determine to what extent bids received meet the technical requirements stipulated in the bidding documents cz-lekarna.com.
The evaluation panel concludes the evaluation process with a recommendation. If the recommendation is to award a contract and it is approved, a contract is signed with the recommended firm.
Goods may be inspected prior to shipment and also during the receiving process. These inspections are for the purpose of confirming quality and detecting any defects or damage to the goods. If any defects or damage is detected, a remedy can be sought based on the terms and conditions of the contract.
Also, after goods have been inspected and received, any defects covered under the warranty agreed in the contract would necessarily be the responsibility of the supplier with which the contract was signed, and in some cases the manufacturer if clearly stipulated in the contract.
Warranties and guaranties are mechanisms available in procurement to assure quality or to seek remedy. They are established for a period of time after receiving the goods, and have stipulated conditions under which either can be put to use if the product is found defective for reasons stipulated in contract.
So, although it’s not possible to determine quality solely based on the content of bids received in response to invitation for bids, appropriate mechanisms must be put in place to insure that the quality is verified prior to contract award, during the receiving process and after contract award.
How about you? What are your thoughts on this? Leave a comment.
Before beginning the evaluation of offers (bids/proposals) received, an evaluation panel should be formed and approved. Ideally, procurement practitioners should advise, oversee the evaluation process and assist with the drafting of the evaluation report, but they should not be members of the evaluation panel. Procurement practitioners cannot be expected to be technical experts on all requirements, but to have an in-depth knowledge of the procurement aspect of the requirement; additionally, it is healthy to practice separation of functions in order to prevent any one entity or individual from exercising control over the entire procurement process.
Membership of the evaluation panel should be determined based on the qualifications of each prospective member. Evaluation panel members should preferably have knowledge and related experience, and at least one member should have participated in the drafting of the terms of reference or technical specifications and/or other technical documents required for inclusion in the solicitation documents. The number of evaluation panel members should be at least three, excluding any observers and technical experts invited as advisors on the technical aspects of the requirement.
Conflict of interest is a serious concern that must be considered before beginning the evaluation process sverige-ed.com. All prospective members of the evaluation panel should sign a confidentiality and non-disclosure agreement wherein they are expected to declare absence of any family or business ties with firms and/or individuals to be evaluated. Additionally, after the names of the firms and/or individuals to be evaluated are made known to the evaluators, all panel members are expected to declare any potential or actual conflict of interest that may exists due to any past or present relationship that they may have or may have had with any of the firms and/or individuals to be evaluated, that may impede their ability to impartially evaluate any of the offers received.
Any other considerations to bear in mind? Leave a comment.