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Methods of Procurement
Methods of Procurement
• Open competitive bidding
• Limited bidding
• Sealed quotation
• Direct Procurement
• Community Participation
• Force account
• Emergency procurement
• Lump sum rate method
• Catalog Shopping
• Limited Bidding
• Buy Back Method
Open competitive bidding
Prequalification cont…
• Where a public entity considers appropriate may also determine
prequalification for other procurement as well.
Steps:
• Prepare prequalification documents. The documents shall set forth
such qualification criteria required for prequalification and the
method for preparation of offers and the manner for the submission
of offers.
• Get the qualification criteria approved by department head
• The documents shall bear signature of chief of public entity or the
employee designated by him and seal of office
Open competitive bidding cont…
Prequalification cont…
• Publish notice for offer on national newspaper and website of
concerned entity or PPMO giving duration of submission at least 30
days for NCB and 45 days for ICB.
• Provide the prequalification documents to interested firms, person,
organization or company by collecting a fee as follows:
For procurement of 20-100 million Nrs. 5000
For procurement of 100-250 Million Nrs. 10000
For procurement of greater than 250 Million Nrs. 15000
• Open the proposal and evaluate against evaluation criteria.
• Prepare a list of selected applicants and send to all applicants
• Provide reason of rejection to applicant who request to provide
reason within 30 days after the notice.
Open competitive bidding cont…
One stage bidding (NCB or ICB)
• The Single-Stage, One-Envelope bidding procedure is the default
or main bidding procedure and is used in most of the procurement.
Bidding Procedure
• Preparation of Bidding Document
• Invitation of Bid
• Sale of Bid documents
• Registration of Bids
• Opening of Bids
• Evaluation of bids
• Letter of intent
• Letter of Acceptance
• Contract agreement
Bidding Procedure…
Preparation of Bidding Document
(Detail of bid preparation will be discussed later)
Bid invitation
• For NCB or PQ proposal : Minimum 30 days
• For ICB or PQ Proposal : Minimum 45 days
• To be published in Web Site;
For central level public entity, website of public entity or of
Website PPMO
For district level public entity website of public entity or
website of PPMO
www.ppmo.gov.np
(Detail on tender notice will be discussed later)
Bidding Procedure…
Bid Opening
• Immediately after last date and time of bid submission in
presence of bidders as far as possible (Absence of bidders does
not disturb the opening process)
• Then bid submitted electronically are opened first and then
other bids are opened
• Before opening bid, envelop of letter of withdrawn or modified
bid shall be opened and read
• Then remaining bids shall be opened and matters like bid
security, discount if any etc. shall be read, noted and signed
• No bid shall be rejected at the time of opening
Bidding Procedure…
Bid Evaluation
(Detail of bid evaluation will be discussed later)
Bid Evaluation Report
(Detail of bid evaluation will be discussed later)
Selection for Award of Contract
• Does LEB meet each criterion; If not proceed to next
• Recommend bid for award.
Selected bidder is the lowest technically responsive qualified bid.
Performance security
• To be taken to ensure due performance of contract
• 5% Of Contract Value
Bidding Procedure…
Performance security …
• If bid price of the bidder selected for acceptance is up to 15
(fifteen) percent less than the approved cost estimate, the
performance security amount shall be 5 (five) percent of the bid
price.
• For the bid price less than 15 percent of the cost estimate, the
performance security amount shall be determined as follows:
Performance Security Amount = (0.85 × Cost Estimate –
Bid Price) × 0.5 + 5% of Bid Price.
• The Bid Price and Cost Estimate shall be inclusive of Value
Added Tax
Bidding Procedure…
Contract award
• Letter of intent is issued within seven days of bid selection &
information should be given to other bidders also.
• If there is no complaint from other bidders within seven days, letter
of acceptance is issued to notify the successful bidder to come with
performance security for contract agreement within 15 days.
• If successful bidder fails to furnish the performance guarantee and
to sign contract within 15 days, then his bid security shall be
forfeited and bid of next lowest responsive bidder is accepted and
called for agreement
Bidding Procedure…
Contract award…
• If lowest evaluated bidder does not sign the agreement, in
addition to forfeiture of bid bond PPMO on the recommendation
of PE blacklist the bidder.
• If any bidder requests for information on the reason for rejection
of within 30 days of issuing of letter of intent, the public entity
shall communicate such information to the bidder.
Bidding Procedure…
Rejection of tender or cancellation of procurement
proceedings
• Where non of the tenders is substantial responsive
• Where the bid price of the lowest evaluated substantially
responsive bid is substantially higher than cost estimate
• Where the goods, construction works, consultancy service or
other services as required are no longer required.
No tender shall be rejected or re tendering shall be invited only
by the reason that only a few tenders or only one tender is
substantial responsive.
A public entity shall communicate a notice along with the reason
for the rejection of tenders or the cancellation of procurement
proceedings to all bidders.
Bidding Procedure…
If any bidder within 30 days of communication of such notice
requests for information of the rejection of all the tenders or
cancellation of the procurement proceedings, the public entity shall
communicate such information to the bidder.
• While making re-invitation to tender because of non-submission of
any tender upon invitation to tender or cancellation of all the
tenders, the reason for such rejection of tenders or the cancellation
of the tender proceedings shall be appraised and necessary
modification shall also be made in the tender documents, technical
specification, cost estimate and conditions of procurement contract.
• Where any bidder is proved to have submitted tender consequent
upon mutual collusion, such tenders shall be cancelled.
Bidding Procedure…
42
Two Envelop System
• The objective of the exercise is to allow the Executing Agency to
evaluate the technical proposals without reference to price.
• Bids of bidders who do not conform to the specified requirements is
rejected.
• Following approval of the technical evaluation, and at a date and
time advised by the Executing Agency (7 days duration to be given
after notice), the price proposals are opened in public.
• The price proposals of the technically responsive bidders are
evaluated and, the award of contract is made to the lowest evaluated
substantially responsive bidder.
• Financial proposal of bidders who fail in technical proposal shall be
returned to concerned bidder without opening
43
Sealed Quotation
• Buyback method…
After getting the price proposal of new machinery
equipment, agreement is made on price obtained by
deducting the price of old machinery equipment from
price of new.
Quality to be approved by authorized organization
Can be procured only after taking the consent of
Department Head.
Not allowed in multiyear contract.
Situations not necessary to follow PPA