4. The procurement process
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(i.e. the costs of preparing and evaluating tenders). In the long run this can deter competition, because bidders will decide not to incur the costs of tender preparation if they think they are unlikely to be successful. The two-step process described above can be a useful approach for encouraging competition while minimising transaction costs. If the supply market is not well understood, releasing a copy of the RFT before the formal invitation and inviting comments can be very useful, as can the use of briefing sessions. The feedback received from this approach can be useful in refining the documents and developing a better understanding of delivery mechanisms and likely costs (market analysis/intelligence). Equally important is the opportunity for vendors to ask questions and receive responses after the RFT is released. All questions and answers asked by potential bidders should be released to all vendors, so that all parties are working with the same information.
Evaluation of tenders Tenders typically include a technical proposal and a cost proposal. The technical proposal outlines the asset or service to be delivered, while the cost proposal outlines the bidder’s proposed cost or price for providing the services or functions. Technical proposal The partner government should form a tender board to review the technical proposals received. Typically, the board will consist of three or more people, but should not be so large that decisions are prolonged. The board members should have the technical expertise to evaluate the proposal subject matter. Importantly, board members should be free from conflicts of interest – such as a financial, family or personal interest in potential bidders. The board members should also be required to identify any conflicts of interest which become apparent once the proposals are received. If a conflict of interest is identified, the affected board member should be replaced.
The evaluation of technical proposals should strictly follow the evaluation criteria identified in the RFT. Each board member should prepare a written report of their evaluation of each proposal, preferably using a standard form or template prepared pdg for this purpose. This helps to ensure consistent, objective evaluations. The evaluation formsPartnership forare Democratic usually kept after completion of the evaluationGovernance and contract award to record how the evaluation was conducted and justify the contractor’s selection. All bidders, both foreign and domestic, should be treated equally in the evaluation process. The technical evaluation is based on the combined evaluation of the board members. If no proposal is found to be technically acceptable, the official managing the procurement process may write to each bidder outlining the shortcomings in their proposal, and give them an opportunity to submit a revised proposal. The evaluation board can then review the revised proposal following the steps described above once again. Alternatively, the procurement official may re-tender a revised RFT which makes the partner government’s requirements clearer or more readily attainable. Cost proposal Submitted cost proposals are initially reviewed to ensure that they are fair and reasonable. Typically, this review is conducted by a different team of evaluators from the technical proposal, so that cost cannot influence the technical assessment. The assessment involves comparing the proposed prices proposed with the government’s own cost estimate for the required services. Proposals which are significantly higher or lower than the government’s estimate should be examined very closely before being evaluated. A cost proposal which appears unrealistically low may indicate that the bidder does not understand the requirements of the RFT, or has omitted some of the requirements in preparing their costs. The procurement official may ask the bidder to confirm, in writing, their understanding of the requirements, and give them an opportunity to revise their cost
OECD PDG HANDBOOK ON CONTRACTING OUT GOVERNMENT FUNCTIONS AND SERVICES IN POST-CONFLICT AND FRAGILE SITUATIONS © OECD 2010