Introduction Examination of Tenders Irregularities of Tenders Post-Tender Query/Questionnaire Tender Interview Tender Evaluation Tender Report Q&A
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1 HKIS QSD PQSL Series 2015 Staw Wong BSc(Hons) LLB(Hons) MHKIS RPS(QS) MCECA Executive Director, Davis Langdon KPK, An AECOM Company
2 Agenda Introduction Examination of Tenders Irregularities of Tenders Post-Tender Query/Questionnaire Tender Interview Tender Evaluation Tender Report Q&A
3 Introduction Purposes of Tender Evaluation Select a competent contractor with best value Avoid ambiguities/risks brought to post-contract General Rules Conditions of Tender / Instructions to Tenderers Technical circulars
4 Introduction (Cont d) Relevant Technical Circulars WBTC No. 4/92 ETWB TC (Works) No. 41/2002 ETWB TC (Works) No. 8/2003 DB TC (Works) No. 3/2014 DB TC (Works) No. 4/2014 DB TC (Works) No. 8/2014
5 Introduction (Cont d) Key Words Confidentiality Safety Fairness Professional Judgment Best Practice
6 Examination of Tenders
7 Examination of Tenders Conditions of Tender / Instructions to Tenderers Number of shortlisted tenderers Normally 3 to 4 Don t jump straight to the lowest 3 or 4!! Initial Checks All addenda properly incorporated? Missing / Additional pages Amount(s) in FoT & Summary of BoQ/SoR Qualifications / Exclusions
8 Examination of Tenders (Cont d) Detailed Checks Form of Tender Arithmetical check Tender submissions Priced BoQ/SoR
9 Examination of Tenders (Cont d) Form of Tender Amounts in Words and Figures cf. Amount in Summary of BoQ/SoR Duly Completed? Name of tenderer Authorized signature Duly stamped and witnessed Business registration number and expiry date Contract Period (if applicable)
10 Examination of Tenders (Cont d) Arithmetical Check Casting of Cash Column Extension (Quantity x Rate) Carrying Totals to Summary Correctly Arithmetical Error Copying Error
11 Examination of Tenders (Cont d) Arithmetical Error Copying Error
12 Examination of Tenders (Cont d) Arithmetical Error Copying Error (Cont d)
13 Examination of Tenders (Cont d) Tender Submissions Price Submission FoT and BoQ/SoR Technical Submission Outline programme Method statement Organization Track record Site layout plan
14 Examination of Tenders (Cont d) Priced BoQ/SoR Unpriced Items Included Items Excluded Items Lump Sum Prices Pricing of the Preliminaries Consistency in Pricing Daywork %
15 Examination of Tenders (Cont d) Priced BoQ/SoR (Cont d) Unreasonably High / Low Quantities (SoR) Unreasonably High / Low Rates Front Loading Amendments to BoQ/SoR Descriptions Quantities Pre-priced rates / amounts
16 Irregularities of Tenders
17 Irregularities of Tenders Form of Tender Tender Submissions Qualifications / Exclusions Priced BoQ/SoR
18 Irregularities of Tenders (Cont d) Form of Tender Tender Sum Words in Form of Tender Figures in Form of Tender Total in Summary of BoQ/SoR
19 Irregularities of Tenders (Cont d) Form of Tender (Cont d) General Rules Words Figures Words Figures Summary of BoQ/SoR Either Words or Figures left blank or illegible Both Words or Figures left blank or illegible Rules for Remeasurement Contract
20 Irregularities of Tenders (Cont d) Form of Tender (Cont d) Others Name of tenderer Duly stamped and witnessed Authorized signature Business registration number and expiry date Contract Period (if applicable) Always Check Conditions of Tender!!
21 Irregularities of Tenders (Cont d) Tender Submissions Tender Addenda Acknowledged receipt? BoQ/SoR Other parts of tender documents Missing / Additional Pages Technical Submissions
22 Irregularities of Tenders (Cont d) Qualifications / Exclusions Excluded Items in BoQ/SoR Amendments to BoQ/SoR Cover Letter Technical Submissions Outline programme Standard terms
23 Irregularities of Tenders (Cont d) Qualifications / Exclusions (Cont d) Clarify Purpose Remind Tenderer of Consequences Request Unequivocal Withdrawal Proceed with caution in negotiation
24 Irregularities of Tenders (Cont d) Priced BoQ/SoR Arithmetical Errors Unauthorized Amendments Descriptions and/or quantities Provisional quantities Pre-priced rates / amounts Unreasonably High / Low Rates Front Loading
25 Irregularities of Tenders (Cont d) Priced BoQ/SoR (Cont d) Other Common Irregularities Lump sum price without breakdown Unpriced items Illegible rates Missing BoQ/SoR pages Addenda not incorporated in BoQ/SoR Percentage Adjustment Factor
26 Irregularities of Tenders (Cont d) Arithmetical Errors Error in Casting of Cash Columns Error in Extension in Cash Columns Error in Carrying Totals to Summary
27 Irregularities of Tenders (Cont d) Error in Casting of Cash Column
28 Irregularities of Tenders (Cont d) Error in Casting of Cash Column (Cont d)
29 Irregularities of Tenders (Cont d) Error in Extension
30 Irregularities of Tenders (Cont d) Error in Extension (Cont d)
31 Irregularities of Tenders (Cont d) Error in Extension (Cont d)
32 Irregularities of Tenders (Cont d) Error in Extension (Cont d)
33 Irregularities of Tenders (Cont d) Error in Extension (Cont d)
34 Irregularities of Tenders (Cont d) Error in Extension (Cont d)
35 Irregularities of Tenders (Cont d) Error in Extension (Cont d)
36 Irregularities of Tenders (Cont d) Error in Extension (Cont d)
37 Irregularities of Tenders (Cont d) Error in Extension (Cont d)
38 Irregularities of Tenders (Cont d) Error in Extension (Cont d)
39 Irregularities of Tenders (Cont d) Error in Extension (Cont d)
40 Irregularities of Tenders (Cont d) Error in Extension (Cont d) APPROACH 1 APPROACH 2 APPROACH 3 APPROACH 4
41 Irregularities of Tenders (Cont d) Correction of Error in Extension BoQ Alter either rate or extension (but NOT both) Remeasurement Tendered rates cannot be changed SoR Same as BoQ Both quantities and rates may be altered
42 Irregularities of Tenders (Cont d) Unauthorized Amendments to BoQ/SoR Descriptions and/or Quantities BoQ SoR Provisional Quantities Pre-priced rates / amounts
43 Irregularities of Tenders (Cont d) Amendments to Pre-Priced Items Provisional Sums If excluded / amended correct tender sum Prime Cost Sums If excluded / amended correct tender sum Profit and attendance? Prime Cost Rates If excluded / amended correct tender sum
44 Irregularities of Tenders (Cont d) Unreasonably High / Low Rates How to Judge? Compare amongst tender rates Compare rates from estimates or other projects Why Need to Spot? Unfavourable in variations Limited power to adjust incorrect rates in post- contract stage
45 Irregularities of Tenders (Cont d) Unreasonably High / Low Rates (Cont d) What to Do? Double check quantity in BoQ/SoR Check with designers on likelihood of changes Request confirmation that tenderer can comply with requirements (for low rates only) Communicate with tenderers Suggest reasonable rates for variations
46 Irregularities of Tenders (Cont d) Unreasonably High / Low Rates (Cont d) Agreement of Reasonable Rates Tender sum shall remain unchanged Provisional Quantities Provisional BoQ Refusal to Agree Reasonable Rates Confirm to abide by unreasonable rates Assess implication in tender report
47 Irregularities of Tenders (Cont d) Front Loading Cash Flow Unfavourable to Employer Abnormal Pricing Level Establishment cost of the preliminaries Trades with earlier completion (e.g. excavation) Reasonable Prices for Interim Payments Assess Implication in Tender Report
48 Irregularities of Tenders (Cont d) Other Common Irregularities Lump Sum Price without Breakdown Request submission of breakdown (or missing priced page) Check if rates (and quantities) are appropriate Check if total matches the lump sum Request to readjust if necessary If serious malpractice, consider disqualification
49 Irregularities of Tenders (Cont d) Other Common Irregularities (Cont d) Unpriced Items Request to confirm included elsewhere Request unit rate for variations if necessary Illegible Rates Divide inserted amount by quantity Request confirmation of the rate so derived
50 Irregularities of Tenders (Cont d) Other Common Irregularities (Cont d) Missing BoQ/SoR Pages Request to confirm included elsewhere Request submission of missing pages Request unit rate for variations if necessary Addenda not Incorporated in BoQ/SoR New item Revised quantity or description Deleted item
51 Irregularities of Tenders (Cont d) Percentage Adjustment Factor Adjustment Factor = Tendered Sum* Corrected Sum* Corrected Sum* * Exclude provisional sums, PC sums, PC rates and other pre-priced amounts * Profit and attendance? * Preliminaries?
52 Irregularities of Tenders (Cont d) Percentage Adjustment Factor (Cont d) Trivial Adjustment Factor Request Confirmation of Corrections Show Adjustment Details in Letter of Intent
53 Post-Tender Query/Questionnaire
54 Post-Tender Query/Questionnaire Purposes Need for Chance to Clarify/Confirm Request Submissions Request Clarification / Confirmation Post-Tender Variations
55 Post-Tender Query/Questionnaire (Cont d) Pitfalls Manipulation of Supplementary Information Introduction of New Qualifications Unfairness to Conforming Tenderers Counter-Offer
56 Tender Interview
57 Tender Interview When? Why? How? When? Why? PTQ vs. tender interview Understand tenderer s proposal Raise in-depth queries Meet tenderer s proposed team Allow tenderers to raise questions
58 Tender Interview When? Why? How? (Cont d) How? Participants Order Agenda Confirmation
59 Tender Interview (Cont d) Agenda Introduction of Attendees Tenderer s Presentation Company profile Site organization and layout Proposed programme Method statement, etc.
60 Tender Interview (Cont d) Agenda (Cont d) Confirmation of Tender Price Employer s Clarification Project expectation or objectives Special terms or specification requirements Tenderer s Clarification Tender qualifications Arithmetical errors Unreasonable rates and prices, etc.
61 Tender Interview (Cont d) Agenda (Cont d) Additional or Varied Requirements (if any) Tenderer s Questions Any Other Business Time for Reply
62 Tender Evaluation
63 Tender Evaluation Evaluation Criteria Price Only Lowest-price compliant bid MEAT Approach Most Economically Advantageous Tender Combined scoring mechanism (price and technical) Two-enveloped system Establish Criteria before Invitation!
64 Tender Evaluation (Cont d) Calculation of Combined Score Lowest Tender Price Price Score = x A %* Tender Price of Tenderer Tenderer s Score Technical Score = x B %* Highest Score * A% + B% = 100% Simple Example Only Many Other Methods
65 Tender Evaluation (Cont d) Common Criteria for Technical Score Track Record Records of Safety, Convictions, etc. Resources (Staffing, Plant & Equipment) Technical Proposal Compliance of Requirements
66 Tender Report
67 Tender Report Brief History of Tendering Process Analysis of Tenders and Negotiations Conclusion with Recommendation Audit Trail for Selection Process
68 Tender Report (Cont d) Typical Sections Project Title and Reference Number Date and Confidential Mark Summary of Tender Sums Declining Tenders Validity Period Basis of Report
69 Tender Report (Cont d) Typical Sections (Cont d) Examination of Individual Tenders Report on Priced BoQ/SoR Submission compliance or outstanding Comparison of unit rates and/or quantities Any alternative tender and/or time proposed Qualification Reference to Others Input Conclusion and Recommendation
70 Tender Report (Cont d) Other Matters Contract Background / Scope Tender Evaluation Criteria Reconciliation Potential for Saving (if needed) Impact on PC Sum
71 Tender Report (Cont d) Other Matters (Cont d) Refusal to Agree Reasonable Rates Sensitivity analysis Front Loading Discounted cash flow based on programme Compare present values of tender prices Refusal to Abide by Tender Legal advice on possible remedies
72 Q&A
73 Thank You
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