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Goods: Evaluation and Award( Technical Evaluation) Problem Instructions for the Learner Purpose: Bidding documents should set out in clear and unambiguous terms the evaluation factors and how those factors would be applied in the evaluation of bids. In theory, therefore, if the bidding documents have been carefully prepared, clear and unambiguous evaluation of the bids and the eventual award should be straightforward. In practice, however, the process may not be so neat or straightforward. The purpose of this activity is to expose you to a real-life situation in which the evaluation turns out to be far from straightforward and to give you practice in analyzing such situations and in reaching logical and defensible decisions. Level of Difficulty: Moderate Working Time: Group work: 40 minutes; presentation and discussions: 40 minutes Background: This activity relates to a major nationwide procurement of snow clearing equipment. The estimated cost of the contract for the 300 units to be procured is about US$25 million equivalenta sizable procurement! The National Highway Authority (the client) has decided to evaluate the bids and to make the contract award on the basis of bids being responsive to minimum technical specifications (pass-fail) and then the make selection of the bid with the lowest evaluated price. Snow plows Technical Specifications Load capacity: 8 tons(sand) Minimum 300 HP SAE; at sea level 3000 RPM Water-cooled diesel engine Electric starter 24-volt electric system 5-speed transmission Dual drive-rear axle and tandem axle-dual rear wheels Power steering Heavy duty springs and shocks Bed-hardened steel-V-shaped for delivery of deicing materials to rotary distribution unit at rear of bed Angle blade minimum 3.5 meters length, hydraulically operated from cab, minimum 1 meter high curved from bottom to top(concave) Truck body and engine: standard current production model for a minimum of one year Two-way radio Standard heated cab Bids were received on time, were opened, and are being evaluated to determine the lowest evaluated bid. The three lowest priced bids are the only serious ones that should be considered because the other bids are significantly higher in price and probably would be out of contention. The three lowest priced bids based on technical and price evaluations are as follows: Met minimum technical Specs A B Bidder Technical evaluation Load capacity: 8 tons Min 300 HP Water-cooled diesel engine Electric starter 24-volt system 5-speed transmission Dual drive- rear and tandem axles Power steering Heavy duty springs and shocks Bed-hardened steel-v-shaped Angle blade 3.5 meters long, 1 meter high Truck body and engine standard Two-way radio Standard heated cab yes no* yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yea yes yes yes yes yes yes yea yes no** yes yes yes yes * Offered 296 HP ** Offered stainless steel 314, which is a superior rust resistant steel Evaluated bid price(millions) A B C Bid prices converted to U.S. dollars for bid comparison purposes 24.8 25.0 24.4 Lowest evaluated bid 1 2 Reject Bid C was rejected because it did not meet minimum HP requirements. The lowest evaluated bid was submitted by bidder A which the National Highway Authority selected for contract award. Bidder C immediately lodged a protest with the minister to whom the Highway Authority reports. Bidder C argued that no difference can be technically determined in the performance between 296 and 300 HP. Second, the stainless bed offered in the bid is equivalent to hardened steel; plus stainless steel has the added benefit of being resistant to corrosion from salt and other ice melting chemicals. Bidder C pointed out to the minister that the its bid was US$400,000 lower than bidder A's bid and that the government would be overpaying for the trucks if the contract were awarded to bidder A. Assignment: You are the Chief Procurement Officer of the Highway Authority. You have been called into the minister's office, and the minister has advised you of bidder Cs protest. This is obviously not a trivial matter. There is a large contract at stake as well as a cost saving to be considered. The minister asked you to review the specifications, the bidding documents, the evaluation of the bids, and the selection of the lowest evaluated bid, and to advise him as how to proceed with bidder C's claim. The minister requires your recommendation as whether to stay with the original evaluation and the proposed award of contract or if a revision in the evaluation of the bid is called for. The minister made it clear that the decision has to be completely defensible. Please consider the positions of the ministry, all three of the bidders, and yourself. You are now required, with your evaluation team, to review the recommendation for contract award, to prepare a definite position, and to defend your position in front of the minister. Goods: Evaluation and Award( Technical Evaluation) Problem Instructions for the Learner Purpose: Bidding documents should set out in clear and unambiguous terms the evaluation factors and how those factors would be applied in the evaluation of bids. In theory, therefore, if the bidding documents have been carefully prepared, clear and unambiguous evaluation of the bids and the eventual award should be straightforward. In practice, however, the process may not be so neat or straightforward. The purpose of this activity is to expose you to a real-life situation in which the evaluation turns out to be far from straightforward and to give you practice in analyzing such situations and in reaching logical and defensible decisions. Level of Difficulty: Moderate Working Time: Group work: 40 minutes; presentation and discussions: 40 minutes Background: This activity relates to a major nationwide procurement of snow clearing equipment. The estimated cost of the contract for the 300 units to be procured is about US$25 million equivalenta sizable procurement! The National Highway Authority (the client) has decided to evaluate the bids and to make the contract award on the basis of bids being responsive to minimum technical specifications (pass-fail) and then the make selection of the bid with the lowest evaluated price. Snow plows Technical Specifications Load capacity: 8 tons(sand) Minimum 300 HP SAE; at sea level 3000 RPM Water-cooled diesel engine Electric starter 24-volt electric system 5-speed transmission Dual drive-rear axle and tandem axle-dual rear wheels Power steering Heavy duty springs and shocks Bed-hardened steel-V-shaped for delivery of deicing materials to rotary distribution unit at rear of bed Angle blade minimum 3.5 meters length, hydraulically operated from cab, minimum 1 meter high curved from bottom to top(concave) Truck body and engine: standard current production model for a minimum of one year Two-way radio Standard heated cab Bids were received on time, were opened, and are being evaluated to determine the lowest evaluated bid. The three lowest priced bids are the only serious ones that should be considered because the other bids are significantly higher in price and probably would be out of contention. The three lowest priced bids based on technical and price evaluations are as follows: Met minimum technical Specs A B Bidder Technical evaluation Load capacity: 8 tons Min 300 HP Water-cooled diesel engine Electric starter 24-volt system 5-speed transmission Dual drive- rear and tandem axles Power steering Heavy duty springs and shocks Bed-hardened steel-v-shaped Angle blade 3.5 meters long, 1 meter high Truck body and engine standard Two-way radio Standard heated cab yes no* yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yea yes yes yes yes yes yes yea yes no** yes yes yes yes * Offered 296 HP ** Offered stainless steel 314, which is a superior rust resistant steel Evaluated bid price(millions) A B C Bid prices converted to U.S. dollars for bid comparison purposes 24.8 25.0 24.4 Lowest evaluated bid 1 2 Reject Bid C was rejected because it did not meet minimum HP requirements. The lowest evaluated bid was submitted by bidder A which the National Highway Authority selected for contract award. Bidder C immediately lodged a protest with the minister to whom the Highway Authority reports. Bidder C argued that no difference can be technically determined in the performance between 296 and 300 HP. Second, the stainless bed offered in the bid is equivalent to hardened steel; plus stainless steel has the added benefit of being resistant to corrosion from salt and other ice melting chemicals. Bidder C pointed out to the minister that the its bid was US$400,000 lower than bidder A's bid and that the government would be overpaying for the trucks if the contract were awarded to bidder A. Assignment: You are the Chief Procurement Officer of the Highway Authority. You have been called into the minister's office, and the minister has advised you of bidder Cs protest. This is obviously not a trivial matter. There is a large contract at stake as well as a cost saving to be considered. The minister asked you to review the specifications, the bidding documents, the evaluation of the bids, and the selection of the lowest evaluated bid, and to advise him as how to proceed with bidder C's claim. The minister requires your recommendation as whether to stay with the original evaluation and the proposed award of contract or if a revision in the evaluation of the bid is called for. The minister made it clear that the decision has to be completely defensible. Please consider the positions of the ministry, all three of the bidders, and yourself. You are now required, with your evaluation team, to review the recommendation for contract award, to prepare a definite position, and to defend your position in front of the minister