Structured tendering process

A structured tendering process clarifies the various steps during a procurement process from preparing a tender to awarding a contract.  It should be a written account of instructions.

Tender: is a formal, structure invitation to contractors/consultants, to bid, to supply services. E.g. for the construction works.

Purpose and link to IQC

The development and use of a structured tendering process provide those responsible to manage tenders with guidance and information how to perform their tasks fair and consistently. Most organizations have guidelines for tendering and procurement, which need to be followed. Tendering processes for construction work are particularly vulnerable to unethical conduct, as large sums of money can be involved (TRANSPARENCY INTERNATIONAL 2010, p. 2). Tendering processes should therefore comprise a sound set of measures to ensure transparency, accountability and prevent of misconduct (OECD 2008, p. 8).

How to

1.   Define the type of tender procedure

You should define the type of tender procedure that you are going to use and documents the reasons why you chose a specific type. There are three main type of tender procedures (SmallBizConnect, NSW, Australia):

Open tendering: is an invitation to tender by public advertisement. There are no restrictions placed on who can submit a tender, however, suppliers are required to submit all required information and are evaluated against the stated selection criteria.

Select tendering: is only open to a select number of suppliers/constructors/consultants. The suppliers/constructors/consultants may be a short list sourced from an open tender or be a compilation of businesses that the organization has worked with previously.

Invited tendering: an organization contacts a select number of suppliers/constructors/consultants directly and requests them to perform the contract. It is generally used for specialist work, emergency situations or for low value and low risk options.

Note that the contract with the project funder/donor may oblige you to use a specific type of tender procedure.

2.   Set an invitation for bids

The invitation to tender shall include details of the requirements for the particular contract including:

1. a description of the services, supplies or works being procured;
2. a specification and instructions on whether any variants are permissible;
3. the CSO’s terms and conditions of contract;
4. the evaluation criteria;
5. pricing mechanism and instructions for completion;
6. form and content of method statements to be provided;
7. rules for submitting of tenders;
8. the CSO should provide reasonable access to project sites for visits by prospective bidders

3.   Compile the bids and document entries

Bids/proposals shall be submitted in accordance with requirements set out in the invitation to tender. Bids/proposals shall be kept in a safe place and remain unopened until the time and date specified for their opening. No bids/proposals received after the specified deadline for the tender shall be considered. Bids/proposals shall be opened by the designated person responsible for the tender. To reduce integrity risks it is advisable to have at least two people present during the opening and revision of bids.

4.   Evaluate the bids

The criteria on which tenders will be evaluated must be set out in the tender documents. All bids/proposals that were submitted must be evaluated and the evaluation results must be documented before sharing the results with the applicants. Evaluation should be done independently by at least two people for larger contracts (specify?) and should be reviewed by the administration and finance manager in any case. If tenders are to be evaluated on the basis of price, quality and preference, the evaluation criteria and methodology (including the price/quality percentage splits) must have been approved before the invitation to tender is issued.

5.   Clear successful bidders and award contracts

A contract may only be awarded by the manager/director or staff that is authorised to award contracts. Prior to awarding the contract it has to be ensured, that sufficient funds are available to sustain the contract.

Template

References & Further Readings

• ETHEKWINI Municipality n.y. Standard Operating Procedures
• EPA 2007 Guidance for Preparing Standard Operating Procedures
• GOVERNMENT OF UGANDA. Ministry of Water and Environment. Water and Sanitation Sector. District Implementation Manual (p. 74)