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Guide on Bid EvaluationThis guide is intended to provide guidance to borrowers on bid evaluation procedures and how to prepare a bidevaluation report to be submitted to ADB, in connection with the procurement of contracts financed in wholeor in part by an ADB loan or grant, or by ADB-administered funds.About the Asian Development BankADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countriesreduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remainshome to a large share of the world’s poor. ADB is committed to reducing poverty through inclusive economicgrowth, environmentally sustainable growth, and regional integration.Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helpingits developing member countries are policy dialogue, loans, equity investments, guarantees, grants, andtechnical assistance.GUIDE ON BID EVALUATIONJune 2018ASIAN DEVELOPMENT BANK6 ADB Avenue, Mandaluyong City1550 Metro Manila, Philippineswww.adb.orgASIAN DEVELOPMENT BANK
GUIDE ON BID EVALUATIONJune 2018ASIAN DEVELOPMENT BANK
Creative Commons Creative Commons Attribution-NonCommercial-NoDerivs 3.0 IGO license(CC BY-NC-ND 3.0 IGO) 2018 Asian Development Bank6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, PhilippinesTel 63 2 632 4444; Fax 63 2 636 2444www.adb.orgSome rights reserved. Published in 2018.ISBN 978-92-9261-266-5 (print), 978-92-9261-267-2 (electronic)Publication Stock No. TIM189440-2DOI: http://dx.doi.org/10.22617/TIM189440-2The views expressed in this publication are those of the authors and do not necessarily reflect the views and policiesof the Asian Development Bank (ADB) or its Board of Governors or the governments they represent.ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for anyconsequence of their use. The mention of specific companies or products of manufacturers does not imply that theyare endorsed or recommended by ADB in preference to others of a similar nature that are not mentioned.By making any designation of or reference to a particular territory or geographic area, or by using the term “country”in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area.This work is available under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 IGO license(CC BY-NC-ND 3.0 IGO) go/. By using the content of thispublication, you agree to be bound by the terms of this license. For attribution and permissions, please read theprovisions and terms of use at https://www.adb.org/terms-use#openaccess.This CC license does not apply to non-ADB copyright materials in this publication. If the material is attributedto another source, please contact the copyright owner or publisher of that source for permission to reproduce it.ADB cannot be held liable for any claims that arise as a result of your use of the material.Please contact [email protected] if you have questions or comments with respect to content, or if you wishto obtain copyright permission for your intended use that does not fall within these terms, or for permission to usethe ADB logo.Notes:In this publication, “ ” refers to United States dollars.Corrigenda to ADB publications may be found at http://www.adb.org/publications/corrigenda.Printed on recycled paper
iiiContentsPreface vPart 1Bid Evaluation Procedure and Reporting 1Section 1: General 2A. Introduction 2B. Purpose of Bid Evaluation 3C. Principles in Bid Evaluation 3D. ADB’s Bidding Procedures under Competitive Bidding 5Section 2: Bid Evaluation Procedure 7A. Step 1: Opening and Preliminary Examination of Bids 71. Basic Data 72. Record of Bid Opening.73. Preliminary Examination of Bids.84. Clarifications, Deviations, Reservations, and Omissions 8B. Step 2: Determination of Substantial Responsiveness of Bids 91. Substantial Responsiveness to Commercial Terms and Conditions 92. S ubstantial Responsiveness to Technical Requirements in Procurement of Goods andProcurement of Plant (Supply Component) 103. S ubstantial Responsiveness to Technical Requirements in Procurement of Works andProcurement of Plant (Adequacy of Technical Proposal) 114. Preparation of Table of Substantive Responsiveness of Bids 115. Substantial Responsiveness of Bidders under a Two-Envelope Bidding Procedure 126. Substantial Responsiveness of Bidders under a Two-Stage Bidding Procedure 12C. Step 3: Detailed Evaluation of Price Bids 131. Preparation of Table of Bid Prices .132. Determination of Number of Bids for Detailed Evaluation .143. Detailed Evaluation of Price Bids 144. Financial Adjustment of Bid Prices (Commercial Aspects).155. Financial Adjustment of Bid Prices (Technical Aspects).166. Detailed Evaluation of Bids for a Civil Works Contract 187. Application of Domestic Preference Scheme 208. The Lowest Evaluated Substantially Responsive Bid 219. Abnormally Low Bids 21
ivCONTENTSD. Step 4: Confirmation of Qualifications and Recommendation for Contract Award 221. Evaluation of Qualifications 222. Multiple Contract Evaluation 223. Award of Contract 22Section 3: Preparation of Bid Evaluation Report.24A. Single-Stage: One-Envelope Bidding Procedure 24B. Single-Stage: Two-Envelope Bidding Procedure 26C. Two-Stage and Two-Stage: Two-Envelope Bidding Procedures 26Appendixes 271Basic Data Sheet. 282Record of Bid Opening. 303(A) Table of Substantial Responsiveness of Bids (Commercial Terms)—Supply Contract. 333(B) Table of Substantial Responsiveness of Bids (Commercial Terms)—Civil Works. 353(C) Table of Substantial Responsiveness of Bids (Commercial Terms)—Plant Design–Supply–Installation 374Table of Substantial Responsiveness of Bids (Technical Requirements)—Supply Contract. 395(A) Table of Salient Features of Bids (Commercial Terms and Conditions)—Supply Contract. 405(B) Table of Salient Features of Bids (Commercial Terms and Conditions)—Civil Works. 425(C) Table of Salient Features of Bids (Commercial Terms and Conditions)—Plant Design–Supply–Installation 435A-1 Table of Salient Features of Bids (Technical Requirements)—Supply Contract 446(A) Table of Bid Prices (Supply Contract) 456(B) Table of Bid Prices (Civil Works Contract) 466(C) Table of Bid Prices (Plant Contract).477(A) Table of Bid Price Adjustment (Supply Contract) 487(B) Table of Bid Price Adjustment (Civil Works Contract) 497(C) Table of Bid Price Adjustment (Plant Design–Supply–Installation) 518Part 2Evaluation of Bidders’ Qualifications. 54Examples of Bid Evaluation 55Example 1: Supply Contract 56Example 2: Civil Works Contract. 86Example 3: Design, Supply, and Installation Contract.119
vPrefaceThe principles and procedures outlined in this Guide on Bid Evaluation (hereinafter referred to as “the Guide”)are as prescribed by the Procurement Guidelines (2015, as amended from time to time) (“Guidelines”) and theProcurement Regulations for ADB Borrowers: Goods, Works, Nonconsulting and Consulting Services (2017, asamended from time to time) (“Regulations”); 1 and are applicable to the procurement of goods (“Goods” whichincludes related services2); works (“Works”) and plant design, supply, and installation (”Plant”) that are financed inwhole or in part by an Asian Development Bank (ADB) loan or grant or by ADB-administered funds. In accordancewith the Guidelines/Regulations, ADB requires its borrowers or recipients of grants (hereinafter referred to as“Borrowers”) or their Project Executing Agencies (“Executing Agencies”) to submit a “Bid Evaluation Report” forADB’s approval prior to award of contract in case the contract is subject to ADB prior review.3Bid Evaluation Reports prepared by Borrowers, Executing Agencies, and their consultants (“Consultants”) inresponse to ADB’s requirements have often been inadequate in form and substance; in many cases, ADB principlesand procedures for procurement have not been fully met or, in some instances, violated. In such cases, it becomesnecessary for ADB to obtain additional information or to request clarifications and additional analyses after thereceipt and initial review of the report.Such delays have frequently necessitated requests to bidders for extension of the bid validity period; however, if thebidder that has submitted the lowest evaluated bid price does not wish to comply with that request, it would leadto the award of the contract to another bidder. This consequence is highly undesirable, not only for the ExecutingAgency which has to pay a higher price than necessary for the implementation of a project, but also for bidderswho are forced to maintain their bid validity for an unreasonable period of time or, after incurring the expenses ofbidding, to withdraw from the competition. Finally, such developments are undesirable from an operational pointof view since ADB is responsible, under the terms of its Charter, to ensure that projects which it finances are carriedout with due regard to “economy and efficiency.” Losing the opportunity to award a contract on time to the lowestevaluated substantially responsive bidder is neither economical nor efficient.Given the difficulties inherent in the evaluation process and in the preparation of complete, accurate, andconcise Bid Evaluation Reports, the Guide has been written to provide Borrowers, Executing Agencies, and theirConsultants with guidance on bid evaluation procedures and on the format of the report to be submitted to ADB.Part 1 of the Guide sets out a systematic step-by-step bid evaluation procedure covering all relevant factors whichmust be taken into account in determining the lowest evaluated substantially responsive bid in accordance withthe terms and conditions of the bidding document. It also illustrates how the report to ADB should be put togetherusing the tables of analysis prepared during the evaluation process.Part 2 of the Guide consists of three examples of bid evaluation reports: one for a supply contract involving theprocurement of goods; one for a civil works contract; and one for a design, supply, and installation contract involvingthe procurement of plant, or equipment, and installation works under a single responsibility or turnkey contract.123The relevant project financing agreement indicates whether the Guidelines or Regulations apply.The term “Services” does not include consulting services which are of an intellectual and advisory nature requiring evaluation oftechnical proposals that offer tailored approaches, methodologies, and specially qualified experts.The project procurement plan specifies which contracts are subject to ADB prior review.
viPREFACEUse of the procedures proposed in the Guide are recommended. It is recognized that in some procurement casesit may be necessary to modify the procedures, including the tables of analysis, to suit the nature of the particularprocurement being undertaken.ADB hopes that the information provided in the Guide will be useful and will help to reduce or eliminate theproblems which have been encountered in the past. However, it should be noted that the purpose of the Guide isto provide assistance to Executing Agencies on bid evaluation reflecting the procurement principles and practicesembodied in the Guidelines/Regulations.In case of ambiguities or discrepancies between this Guide and the provisions of the financing agreement or theprovisions of the bidding document, the provisions of the bidding documents or financing agreement (in order ofpriority in the event of inconsistency) prevail over the Guide.Any additional information on procurement under projects financed in whole or in part by an ADB loan or grant orby ADB administered funds can be obtained fromProcurement, Portfolio and Financial Management Department (PPFD)Asian Development Bank6 ADB Avenue, Mandaluyong City1550 Metro Manila, PhilippinesE-mail: [email protected]: 63 2 632 4444Fax: 63 2 636 2444 [Attn: Director General, PPFD]www.adb.org
1PART 1Bid Evaluation Procedureand Reporting
2Section 1: GeneralA.Introduction1.1 Procurement under investment lending projects financed in whole or in part by an Asian DevelopmentBank (ADB) loan or grant or by ADB-administered funds must be carried out in accordance with thepolicy, principles, practices, and procedures laid down in the Procurement Guidelines (2015, as amendedfrom time to time) or the Procurement Regulations for ADB Borrowers: Goods, Works, Nonconsulting andConsulting Services (2017, as amended from time to time),1 hereinafter referred to as “the Guidelines/Regulations.” The policies applicable to procurement that have been incorporated in the Guidelines/Regulations are derived from the provisions of The Agreement Establishing the Asian Development Bank(“the Charter”). The Articles relating to procurement that are stipulated in the Charter are:(i)the proceeds of any loan shall be used only for procurement in member countries of goods andservices produced in member countries;2 and(ii)ADB shall ensure that the proceeds of any loan made by ADB are used only for the purpose forwhich it was approved, with due attention given to considerations of economy and efficiency.3The Guidelines/Regulations built upon these Articles to define six core principles to guide ADB’sprocurement procedures and requirements: economy, efficiency, fairness, transparency, quality, andvalue for money.41.2 All procurements financed or administered by ADB must conform to the above core principles set forthin the Charter and the Guidelines/Regulations. Further, ADB, being a public international, multilateraldevelopment finance institution, has an obligation to provide adequate, fair, and equal opportunity tosupply goods, works, and services under ADB-financed or administered projects to interested andeligible bidders. If any of these core principles are not followed in the procurement process, including bidevaluation and contract award, ADB may refuse to finance that particular procurement and cancel thecorresponding portion of the loan.1.31234Bidding documents approved for ADB-financed or administered procurements should include theprovisions necessary to satisfy ADB’s principles, practices and procedures. Evaluation of bids mustbe consistent with the terms and conditions stipulated in the bidding document. Fair, accurate, andtransparent evaluation of bids is one of the most important aspects of procurement. Also, ADB mustbe satisfied that its objectives of economy, efficiency, transparency, and fairness among bidders havebeen met.This does not apply to alternative procurement arrangements allowed under the Regulations.Article 14 (ix) of the Charter.Article 14 (xi) of the Charter.Quality and value for money are two new principles in the Regulations.
GENERALB.Purpose of Bid Evaluation1.4The main purpose of bid evaluation is to determine the lowest evaluated substantially responsive bidamong the bids submitted on or before the bid closing date and time specified in the bidding document.The lowest evaluated substantially responsive bid may or may not necessarily be the lowest priced bid. Inorder to determine accurately the lowest evaluated substantially responsive bid in accordance with theterms and conditions of the bidding document, a logical systematic evaluation procedure designed tocover all aspects of the evaluation process as described in the bidding document should be followed. There may be contracts requiring complex solutions with a combination of goods, works, or services, wherevalue for money may not be achieved by using “lowest evaluated bid” as the contract award criterion;rather, striking a balance between cost and quality may be necessary to meet intended developmenttargets. Bid evaluation for this type of contract may require different methods (e.g., using merit point orscoring systems), which are not covered in this Guide.5C.Principles in Bid Evaluation61.5There are certain principles and practices of ADB in a bid evaluation that must be clearly understood andobserved in the bid evaluation process.1.Prompt Public Bid OpeningThe time for bid opening shall be the same as for the deadline for bid submission or promptly thereafter.Preserving the integrity of bid submission is essential, which also promotes transparency at the very startof the bid evaluation process.2.Confidentiality of ProceduresAfter the public opening of bids, no information relating to the examination, clarification, and evaluationof bids, and recommendations concerning awards, shall be communicated to any person not officiallyconcerned with these procedures until the notification of the contract award has been made to thesuccessful bidder.3.Priority of DocumentsThe Guidelines/Regulations provide that the rights and obligations of the Executing Agency and thebidders offering to supply goods and perform the works for a particular procurement activity under aproject are governed by the bidding document, and not by the Guidelines/ Regulations or the financingagreement. After the issuance of the bidding document for a particular contract, the procurement processis directed by the provisions of that bidding document. Should any inconsistency arise for any specificprocurement between the bidding document and this Guide, the bidding document shall prevail.56Executing Agencies may refer to appropriate Guidance Notes or User’s Guides issued by ADB for different bid evaluationmethods.This generally applies for the default bidding procedure of “Single-Stage: One-Envelope” following postqualification, unlessotherwise specified. See Part D for other bidding procedures.3
4GUIDE ON BID EVALUATION4.Clarification and Modification of BidsNo bidder will be permitted to modify its bid after the bids have been opened.7 Only clarifications, whichdo not change the substance or price of the bid may be requested or accepted by the Executing Agency.The request for clarifications and the response by the bidder shall be in writing or by acceptable electronicmeans (such as facsimile or scanned documents sent through e-mail). Any response to an inquiry of theExecuting Agency which leads to a change in the bid price or in the substance of the bid shall be treatedas a modification and shall not be considered in the bid evaluation. The records of all clarifications soughtand received must be kept by the Executing Agency and attached to the bid evaluation report.5.Rejection of BidsAll valid bids received shall be evaluated in accordance with the criteria, methods, and proceduresprovided in the bidding document, and only those bids which do not substantially meet the specifications,bidder qualifications and other requirements of the bidding document may be rejected.6.Currency of Bid EvaluationBid prices expressed in different currencies shall be converted into a single currency for evaluation andcomparison purposes, using the selling exchange rates prescribed for similar transactions on the date andfrom an official source (such as the central bank) specified in the bidding document.7.Qualifications and Track Record of the BidderOnly the qualifications and track record of the Bidder itself are considered in the evaluation, and not thoseof the Bidder’s subsidiaries, parent entities, affiliates, or subcontractors, unless specifically permitted inthe bidding document. For certain key elements or activities of required experience the bidding documentmay allow the required experience to be met by specialist subcontractors/ manufacturers.8.Extension of Bid Validity PeriodThe Executing Agency shall make every effort to complete bid evaluation and contract award before theexpiration of bid validity. The validity of bids may only be extended in exceptional circumstances. If duringthe evaluation process an extension of bid validity is considered necessary, all those who submitted bidsthat have not otherwise been withdrawn shall be asked to extend the validity of their bids. Bidders whoare willing to extend the validity of their bids shall not be permitted to modify the substance or price oftheir bids. They must, however, be required to extend the validity of their bid securities or bid securingdeclaration. The bid securities of bidders who do not extend the validity of their bids shall be returned tothem promptly.9.Rejection of All BidsThe rejection of all bids is justified when the bids submitted are not substantially responsive or where noneof the bids received meet the specifications, bidder qualifications, and other requirements, or where thereis evidence of lack of competition. The rejection of all bids and calls for new bids solely for the reason ofhigh prices are not accepted by ADB. Where all bid prices have substantially exceeded the cost estimate,the Borrower may, instead of calling for new bids, and after consultation with ADB, negotiate with thelowest evaluated bidder for a reduction of the bid price. If no satisfactory contract can be concluded,rebidding should be initiated with appropriate modification of the scope of the contract.7This is true for the Single-Stage: One-Envelope and Single-Stage: Two-Envelope bidding procedures. In the Two-Stage andTwo-Stage: Two-Envelope bidding procedures, modifications may be requested by the Executing Agency for the second stage.
GENERALD.ADB’s Bidding Procedures under Competitive Bidding1.6ADB has adopted four competitive bidding procedures which may be selected by the Executing Agencyto suit the nature of the particular procurement: (i) Single-Stage: One-Envelope, (ii) Single-Stage: TwoEnvelope, (iii) Two-Stage, and (iv) Two-Stage: Two-Envelope. The procurement plan agreed by ADB shallspecify the bidding procedure to be followed for each contract financed in whole or in part by an ADB loanor grant or by ADB-administered funds.1.Single-Stage: One-Envelope Bidding ProcedureIn the Single-Stage: One-Envelope bidding procedure, bidders submit bids in one envelope containingboth the technical proposal and the price proposal, which are opened in public at the date and timeadvised in the bidding document. The bids are evaluated and the contract is awarded to the bidder whomeets eligibility and qualifications requirements and whose bid has been determined to be the lowestevaluated substantially responsive bid.2.Single-Stage: Two-Envelope Bidding ProcedureIn the Single-Stage: Two-Envelope bidding procedure, the bidders submit simultaneously two separatelysealed envelopes, one containing the technical bid and the other the price bid enclosed together in an outersingle envelope. Initially, only the technical bids are opened at the date and time advised in the biddingdocument. The price bids remain sealed and are held in custody by the Executing Agency. The technical bidsare evaluated by the Executing Agency. No amendments or changes to the technical bids are permitted. Theobjective of the exercise is to allow the Executing Agency to evaluate the technical bids without reference toprice. Bidders must also meet eligibility and qualifications requirements. Bids of bidders who do not conformto the specified requirements may be rejected as deficient or nonresponsive bids.Following the technical evaluation, the price bids of bidders that submitted substantially responsivetechnical bids are opened in public at a date and time a
Printed on recycled paper. Creative Commons Creative Commons Attribution-NonCommercial-NoDerivs 3.0 IGO license CC BY-NC-ND 3.0 IGO)( 2018 Asian Development Bank
