How tender evaluation process works?

If you’ve been reading our blogs, by now you would be well aware of the tender and bidding process. For example, how the bid proposal has to be submitted, what mistakes you must avoid in the tender submission process and much more.

Now let’s see what happens in the tender evaluation process stage. Further in this blog, we will give you a fair idea on how bids are evaluated and how the buyer decides to award the contract to a particular bidder.

Each tender evaluation process goes through broadly three stages –

1. Pre-qualification Stage
2. Technical Evaluation
3. Financial Evaluation

The bid evaluation method follows a process wherein a team whose expertise lies in technical, financial, legal and commercial aspects is responsible for evaluating bid submissions.

The evaluation panel takes up bids for evaluation in the pre-qualification round. In this round, a basic checklist is utilised to shortlist the eligible bidders. Those bidders who qualify the checklist, only their bids are opened at a later date. The pre-qualification checklist is the following:

·??????Yearly audit reports of the last three to five years

·??????Licenses such as ability to carry out business in the concerned region

·??????Industry certifications

·??????Documents such as GST certification

·??????Earnest Money Deposit (EMD): This is a deposit by the bidder to the buyer. All those interested bidders who are eligible to submit their proposals are required to deposit a certain amount as EMD.

Once the pre-qualification criteria are met, the qualified bidders will move to the next round which is the technical round. In this round, the scores are awarded on a scale of 1-10. The panel decides a certain cut off percentage, and only those who score above this percent are moved to the next round. In the technical round, the points taken into evaluation are relevant experience, availability of resources and manpower for the project, previous performance analysis, compliance checks and other requirements depending upon the project.

Once the technical round is completed, next is the financial round. In this round, the scoring is done based on bands. An example would be that the bidder with the lowest bid would be named L1 and the one with the second lowest would be named L2 and continued further.

In case L1 gets 50 points, then the L2 score will be calculated based on this formula: L2=50-(50/L1*(L2-L1)). Similarly, the L3 score would be based on L2’s points using this formula.

The final score for each bidder is defined by adding the technical and financial points. Post this scoring, the qualified bidders are called in for negotiation further. Based on discussions between the parties, the tender is awarded to the chosen bidder.

We understand that the tendering process, especially the evaluation process can be overwhelming even for those who are experienced in the tender industry, let alone the new bidders. Making Tender 247 your partner in the tendering process can make your journey smoother and successful.?