• How much can the Client afford (or what is his budget)?
22.8.3 Best Value at Budget Price
In this system, which is also commonly used, the technical offers are divided into
three categories according to threshold marks, Pa and Pb, where Pa > Pb:
(1) Category A: bidders scoring more than Pa marks.
(2) Category B: bidders scoring between Pb and Pa marks.
(3) Category C: bidders scoring less than Pb marks.
Usually, the Client Budget price is also indicated, which means that bidders are
already given a price indication.
The financial offers for those bidders falling in Category A are then opened. The
offer most approaching the budget price (or lowest one) is accepted by the Client.
If there are no bidders falling in Category A, the process is repeated for those
bidders falling in Category B.
The bidders in Category C are deemed not to have met the basic (technical)
requirements of the ToR and therefore the financial offers are not opened.
This system in a way avoids always choosing the lowest bidder as being the only
reason for its choice. There is an appreciation of the technical proposal put forward.
The snag with the system, however, arises when the Tender Appraisal Committee
selects only one offer for Category A. Or, if no bidder is suitable for Category A,
only one offer falls in Category B. Then, this offer will get selected. While this may
be genuine, there is too often the impression that there may have been some
collusion somewhere.
22.8.4 Best Value With Weightage
22.8.4.1 Typical Tendering Terms
Many Funding agencies (World Bank, ADB, etc.,) recommend, in some cases, the
use of weightages when selecting consultants.
A typical clause in a Terms of Reference (ToR) for Consultancy offers reads as
follows:
A two-stage procedure will be adopted for evaluating the proposals, with the technical
evaluation being completed prior to any financial proposals being opened and compared.
Technical proposals will be evaluated using the following criteria:
The weightage given to the technical and financial proposals would be 70 (seventy) and
30 (thirty) per cent respectively. Only technical proposals from Firms scoring 70%
or more marks will be considered responsive and their price envelopes will be
opened and compared as mentioned below.
22.8 Project Implementation
643
22.8.3 Best Value at Budget Price
In this system, which is also commonly used, the technical offers are divided into
three categories according to threshold marks, Pa and Pb, where Pa > Pb:
(1) Category A: bidders scoring more than Pa marks.
(2) Category B: bidders scoring between Pb and Pa marks.
(3) Category C: bidders scoring less than Pb marks.
Usually, the Client Budget price is also indicated, which means that bidders are
already given a price indication.
The financial offers for those bidders falling in Category A are then opened. The
offer most approaching the budget price (or lowest one) is accepted by the Client.
If there are no bidders falling in Category A, the process is repeated for those
bidders falling in Category B.
The bidders in Category C are deemed not to have met the basic (technical)
requirements of the ToR and therefore the financial offers are not opened.
This system in a way avoids always choosing the lowest bidder as being the only
reason for its choice. There is an appreciation of the technical proposal put forward.
The snag with the system, however, arises when the Tender Appraisal Committee
selects only one offer for Category A. Or, if no bidder is suitable for Category A,
only one offer falls in Category B. Then, this offer will get selected. While this may
be genuine, there is too often the impression that there may have been some
collusion somewhere.
22.8.4 Best Value With Weightage
22.8.4.1 Typical Tendering Terms
Many Funding agencies (World Bank, ADB, etc.,) recommend, in some cases, the
use of weightages when selecting consultants.
A typical clause in a Terms of Reference (ToR) for Consultancy offers reads as
follows:
A two-stage procedure will be adopted for evaluating the proposals, with the technical
evaluation being completed prior to any financial proposals being opened and compared.
Technical proposals will be evaluated using the following criteria:
The weightage given to the technical and financial proposals would be 70 (seventy) and
30 (thirty) per cent respectively. Only technical proposals from Firms scoring 70%
or more marks will be considered responsive and their price envelopes will be
opened and compared as mentioned below.
22.8 Project Implementation
643