11/18/2019
Tender Evaluation
This set of slides assume that selective tendering is used © TI Lam
1
11/18/2019
Receiving Tenders
• Before tender closing time, set up Tender Opening Committee
(follow organisational guidelines as to membership and declaration
of possible conflict of interest)
• Collect all sealed tenders, ensuring no missed out submissions
- check Tender Return Box, or
- check Tender Return Record if a
counter was set up for receiving
- check e-tendering portal, if any
• Collate with the tender invitation list and declined tenders, if any
• Ensure all tender envelope seals are intact
• Late tenders are to be declined to ensure fairness
2
11/18/2019
Receiving Tenders
• Arrange tender opening meeting as soon as possible
after tender closing (and after technical evaluation if two-
envelope system is adopted)
• Being witnessed by Tender Opening Committee
members, tender envelopes are opened and the tender
amounts recorded immediately in a schedule to be
signed by all present.
• Chairman may need to remind members of the need for
confidentiality
• Pass on all documents to the agreed party for
examination of returned tenders
3
11/18/2019
Schedule for Recording Returned Tenders
Schedule of Tenders Received for
______________________________________________________________________________Tender closed on:_______________________
No. Name of Tenderer Conforming Tender Alternative Tender Remarks
(in ascending order based on Amount Amount
conforming tender amount)
HK$ (if required)
HK$
Declined Tender NIL NIL
(fill in date of notification rec’d)
Date of Tender Opening:_______________ Venue of Tender Opening: _______________ Party/Staff examining tenders__________________
Witnessed by:
1. Name:_____________________ Signature:_________________ ; 3. Name:__________________ Signature:__________________
2. Name:_____________________ Signature:_________________ ; 4. Name:__________________ Signature:__________________
4
11/18/2019
Formula Approach
(for public works)
A combined price and performance
(overall) score
the lowest tender price among the tenderer’s
= 60 x those conforming tenders + 40 x performance score
the highest
the tender price of the tenderer
performance score
among those
conforming
tenders
The “performance score” means the performance rating held in the DEVB’s Contractors’
Performance Index System (CMIS) on the original date set for the return of tenders.
It takes into account the past performance of the contractor.
5
11/18/2019
Marking Scheme Approach
(two-envelope, not pre-qualified public works)
Criterion
1 Applicant’s experience 0-20
2 Applicant’s past performance (e.g. quality, claim attitudes, safety 18-35
record, pollution control, illegal labour offences, etc.)
3 Applicant’s technical resources (managerial/technical staff, plant, etc) 5-40
4 Applicant’s proposal to carry out the project 30-60
[e.g. Outline programme
Outline schematic design and construction method
Quality plan, safety plan, environmental plan, etc.
Method statement to overcome site difficulties
Life cycle cost reduction
Productivity enhancement proposal
Risk management approach
Capital cost reduction strategy]
100
6
11/18/2019
Checking Returned Tenders
• Check eligibility of tenderers
• All necessary documents received in good order:
-Technical proposal (prior examination by technical staff if a two-
envelope system is adopted) and compliance with tender conditions
-Form of Tender duly completed and signed;
-Priced BQ or Schedule of Quantities and Rates (including summary);
-Addenda incorporated;
-Schedule of Materials and Equipment completed;
-Covering letter, if any (check for any qualifications or list of documents
mentioned therein)
- Daywork rates and fluctuation adjustment table (if required)
• Request outstanding information from tenderers (with record and fairness in mind
to all tenderers). Alteration normally NOT allowed.
• Reject tender qualifications, or if necessary, consult client.
7
11/18/2019
Arithmetical Checks
• Ensure all pages are incorporated
• All multiplications, additions, and transferring to collections and
summaries, noting any blank items
• Keeping the amount in the Form of Tender (“A”) as correct, record
any excess or shortfall in the final summary as an arithmetic
adjustment to align with “A”.
• Obtain written confirmation from the tenderer(s) concerned that
they are prepared to abide by their tender(s) despite the errors.
• In the post-contract stage, follow guidelines in the Conditions of
Tender or published protocol* in the public sector to handle the
adjustment percentage in the valuation of variations (to be spelt out
in the Tender Report)
[*Environment, Transport and Works Bureau
Technical Circular (Works) No. 41/2002: Correction Rules for Tender Errors, HKSAR Gov’t]
8
11/18/2019
Unit Rate Checking
Check for abnormal pricing: excessively high (especially for early works) or low
Check for inconsistent pricing: e.g., opposite to size or quality progression;
same rate for different units of measurement
Check for missing unit rate or missing extension.
The above also applies to lump sum insertions (e.g. in prelim section).
If Prime Cost sums are involved, check profit and attendance allowances.
9
11/18/2019
Reporting on Tenders
Include the following basic information:
• Brief description of the nature and scope of works
• Date of calling tender (including any extension
granted)
• Date of tender closing
• Details of addenda/clarifications issued
• Tenderers list
• List of tenders received and declined
10
11/18/2019
Reporting on Tenders
Comment the three lowest tenders on the following:
• General pricing levels (vs. current market norm)
• Any unrealistic/abnormal pricing and implications
• Comparisons of work sections and major unit rates
• Effects of major errors and adjustments (together with confirmations
received from tenderers)
• Any qualification issues needing further consideration
• Any justification of not recommending the lowest tender, if appropriate
Reconcile with the latest estimate/budget/cost plan with reasons
Include other consultants’ input (e.g. on equipment offered), if available.
Recommend which tender to accept after ranking them. If all tenders
received are not acceptable, recommend further action.
11
11/18/2019
Action after reporting
• Upon client’s instruction, arrange tender interviews as necessary (usually
with the recommended tenderer, and for private sector only), avoiding
tenderers meeting each other if more than one is invited.
• During tender interviews, record and subsequently confirm all negotiation
results in writing
• Possible negotiation: date for possession, works programme,
final price (between client and contractor), etc.
• Maintain fairness to all tenderers in the entire process
• Do not inform any tenderer of success or failure until after a firm decision
by client is made.
• Upon client instruction, inform unsuccessful tenderers
• Help to draft the Letter of Acceptance/Award, if needed, highlighting all
changes since tenders are received.
12
11/18/2019
References
Seeley, I.H. (1997) Quantity Surveying Practice, 2nd ed., Basingstoke:
Macmillan
Dev. Bureau No. 8/2014 – Examination of tenders and submission of
tender reports
Dev. Bureau No. 4/2014- Tender Evaluation Methods for Works
Contracts
ETWB No. 3/2007 – Contractors’ performance index system
13
