Professional Diploma in Public
Procurement
Module PDP04
Public Procurement Operations
Presenter : Binu Malhotra
PROCUREMENT
PLANNING AND
OPERATIONS
The Procurement Process…
1. Review of
1. Needs and Budgets
4. Inventory and specifications
2. Requisition
Disposal Plan 2. Sourcing
3. Procurement Plan 3. Methods
4. Define Objectives 4. Bidding Documents
5. Specifications 5. Bid receipts
6. Evaluation
7. Contract Approval
1. Planning 2. Solicitation & 8. Contract Award
Contract Award
4. Assets 3. Contract
Disposal Management
1. Assets usage 1. Debriefing Bidders
2. Disposal 2. Contract Mgmt
3. Receipt & Inspection
4. Payment
5. Updating records
BIDDING
&
EVALUATION
SOME COMMON TERMS
RFI RFQ RFP
IFB NIT EOI SBD
Constituents of SBD…
IFB / NIT General Instructions to Bid Form
Bidders
Price Schedule Bank Guarantee form Bidder Information
for EMD/ Performance Form
Security
Special Instructions General & Special Contract Form
to Bidders Conditions of Contract
List of Requirements Technical specifications Inspection and
quality checks
Qualification criteria Evaluation criteria Eligibility criteria
Bid validity Pre-bid meeting Deadlines
Deposits
Earnest Money Deposit
- To be deposited along with the bid by the bidder. - Forfeited if the bidder refuses to accept the contract.
- Generally 1 – 2% of the estimated cost of the bid. - Refunded to bidders whose bids are unsuccessful
- Guarantee against the refusal to accept work after - Must remain valid until 45 days after the validity of the
the award bid
Performance Security
Must be obtained from the successful bidder to ensure due performance
To be deposited within stipulated time after the award of contract
Generally 10% of the contract value.
Should be valid until 60 days after the performance obligations
Returned without Interest after successful completion of contract.
Banker’s Cheque, A/C Payee Demand Draft, Fixed Deposit
Bid opening.. Imp aspects
• A Bid Opening Committee (BOC) is appointed by the
competent authority.
• The BOC should prepare a list of the representatives
attending the bid opening and obtain their signatures on the
same.
• All bids received on time should be opened in the presence of
the BOC and the bidders or their authorised representatives
at the prescribed time, date and place.
• No bid is rejected by the BOC at the bid opening stage.
• A bid received after the specified date and time for receipt of
bids should be treated as “late” bid and ignored.
Bid opening.. Imp aspects
• Ensure that all mandatory requirements (for example:
EMD, specific supporting documents and so on), as
specified in the bid-documents, are fulfilled.
• The Bid Opening Committee should announce the salient
features of the bids like description and specification of
the goods, quoted price, terms of delivery, delivery
period, discount if any, whether the EMD was furnished
or not and any other special feature of the bid for the
information of the representatives attending the bid
opening.
Bid Evaluation…. principles
• The entire process of bid evaluation and placement of
contract must be transparent.
• All bids are to be evaluated strictly on the basis of the terms
and conditions incorporated in the bid enquiry document.
• No new condition should be brought in while evaluating the
bids.
• The process must ensure that no bidder gets undue
advantage at the expense of other bidders and/or at the cost
of organisation.
Un-responsive Bids
• The bid is unsigned.
• The bidder is not eligible.
• The bid validity is shorter than the required period.
• The required EMD has not been provided.
• The bidder has not agreed to give the required Performance Security.
• The goods quoted do not meet the required specifications.
• The bidder has quoted for goods manufactured by a different firm
without the required authority letter from the proposed manufacturer.
• The bidder has not quoted for the entire requirement as specified in that
schedule.
• The bidder has not agreed to essential condition(s) having significant
bearing on the cost/utility/performance of the required goods. (E.g.,
warranty clause.)
Evaluation
Two Stage Single Two
with PQB Envelope Envelopes
How to check Price Reasonableness
• Estimated rate in the indent
• Last purchase price accepted as reasonable/workable during last purchase
• Prevailing market price ascertained through a market survey or published catalogues or
MRP printed on the item.
• Costing analysis based on costs of various components/raw materials of the item
• Price of a similar/nearly equivalent item
• Through Market Intelligence Cell (MIC) or External Expert Costing Agencies
• As a last resort, rough assessment from the opportunity cost of not using this item at all
✓ For metals and other minerals access [Link] or
[Link] (subscription required) or [Link]
✓ The World Economic Outlook – a monthly report from IMF, gives inputs on price
trends of different countries.
✓ The LME (London Metal Exchange) gives the price trends of nonferrous details.
✓ Various organisations/Chamber of Commerce also publish regular data on Price
Indices and Price Variations – which can be subscribed.
With
whom?
Counter Rare
offer
Negotiations exception
With due
approvals
The Purchase Agency inviting bids should
award the contract, subject to approval
from the Competent Authority, to the
bidder whose bid has been determined to
be substantially responsive and has been
determined to be the most favorable
evaluated bid, provided the bidder is
determined to be qualified to perform the
contract satisfactorily and the credentials
have been verified.
Rejection of Bids
The purchaser would be justified in
rejecting of all bids when none of the bids
are substantially responsive. It is also a
good practice to do rebidding if L1 bidder
withdraws the offer. However, lack of
competition should not be the sole
criterion, based on number of bids
received,
for rejection.
Public Procurement
Operations
Indian Railways
Research Designs and Standards
Organisation
Functions of Procurement Committee
Review the
grouping of
items/services
Review Prepare
bid/proposal Procurement
evaluations Plan
Procuring the
items/services
A Typical Procurement Cycle : Goods
Goods Advertisement inviting
Drafting Specifications, Bids (through sale of
(open tendering - approval of Budget Bidding Documents)
over INR 25 Lakh) 21 - 30 days
Opening of Tenders -
Evaluation and
verification of tender Issue Purchase Order/
selection of lowest
security - within 30 Contract
responsive tender
minutes of deadline
Normally takes 3 – 4 months
A Typical Procurement Cycle : Services
Generally takes 5 - 6 months
Advertisement
Drafting TORs & inviting Expression of
Services Interests (EoIs)
approval of Budget
14 days to submit
RFP issued to Evaluation of
Evaluation of EoIs
Agencies Technical Bids -
and short listing of
Financial Bids kept
Agencies 4 weeks to submit safely
Based on Evaluations Combined Scoring
opening of Financial and Negotiations on Award of Contract on
Bids of only those Technical Aspects successful
who score more than with Highest scoring Negotiations
minimum marks Bidder
All the procurements done by the
organization are subject to post audit by
internal audit, statutory audit and
various internal and external vigilance
agencies. Hence, all the documents
related to the procurement should be
filed and kept systematically and safely.
Files shall be properly numbered in
notes and correspondence side. The
period of retention of various types of
documents should be laid down
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