Tendering, Evaluation and Acceptance

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Definitions

Tender Process

Tender procedures must be clearly set out and recorded to ensure evidence of full compliance with the Code. Care should be taken regarding the receipt, recording, assessment, confidentiality etc. of all communications including verbal, written and electronic methods. Audits may be undertaken at any stage of the tender process by internal or external auditors such as the Victorian Auditor General's Office or the Ombudsman.

Stages

The standard tender process consists of 4 main stages

  • Pre-Tender,
  • Tender,
  • Evaluation and
  • Award

As shown in the following Table 1 ‘Stages of the Tender Process' the key components of each stage are listed, together with the typical responsibilities for each component.

Note: In a two stage tender process, the tender and evaluation processes are effectively repeated for both EOI and detailed RFT.

Selection Panel

An important early stage of the tender process is the formation of a tender Selection Panel (SP). The SP (usually at least 3 members) is drawn from members of the PCG including an Agency and Departmental and consultants representative e.g. Principal Consultant and/or the Quantity Surveyor.

The SP appoints a Chair and also nominates a single point of contact for the information of all tenderers. The nominated contact person shall record all communications regarding the tender process, control site visits and contact with the Agency on-site personnel, respond to tenderers seeking clarification, issue addenda if required, arrange SP meetings, interviews and ensure the steps in the process are followed.

The SP responsibilities include:

  • Tender behaviour abides with relevant legislation and the Code,
  • Declare and manage any potential conflicts of interest,
  • Ensure probity, ensure confidentiality and maintain an audit trail
  • Facilitate any necessary inspections, briefings or site inductions provided for prospective tenderers.

Table 1 - Stages of the Tender Process

1 Pre-Tender Stage

 

  • Appoint the Tender SP (and check for conflicts of interest and confidentiality. If necessary prepare probity plan, seek a briefing from a Probity Advisor) (PCG)
  • Obtain and retain certification regarding confidentiality and conflict of interest from SP members (PM)
  • Confirm selected tendering method(PCG/Department to approve)
  • Check & sign-off drawings and specifications and confirm consistency with brief (Consultant/PM)
  • Confirm suitable preliminaries have been inserted into the documents to reflect any special requirements (Consultant/QS/PM)
  • Include tender requirements/rules such as VIIP, AUSFTA, Bank Guarantees, Liquidated Damages, and any schedules or other submissions to be included with the tender and any necessary references to web documents. (SP/ Consultant/Client Agency/PM)
  • Check Market conditions (QS)
  • Confirm pre-tender estimate (Cost Plan D) is within the approved budget (QS)
  • Confirm packages to be tendered (Consultant/PM)
  • Prepare tender evaluation Key Selection Criteria and their respective weightings (SP)

 

2 Tender Stage (may be 2 part depending on selected tendering method)

 

  • Select an appropriate tender period; advertising date; tender validity period; and closing location, date and time (PM/QS/SP)
  • Assemble and check tender documents including where applicable, contract and special conditions, drawings, specifications, Bill of Quantities if applicable, provisional sums (Consultant/PM)
  • Nominate a contact person for queries during the tender period. In some situations, prospective tenderers may need to attend organised site visits and client and consultant briefings. (SP)
  • In a 2 stage tender process,
  • o The EOI stage will be simpler and reference some requirements only.
  • o The RFT stage will include full documentation and call for detailed submissions including price and program details (Consultant/PM)
  • Arrange to advertise tender (PM). In some instances this may be assigned to the Construction Manager depending on the method of procurement selected.
  • Manage queries and the issue of any necessary addenda during the tender period, and if appropriate issue an extension to the tender date (SP).
  • Close tenders at the time and date specified in the tender documents. Where tenders close within the department's system, the submissions shall be forwarded to the SP members by the department's representative attending the tender opening (PM)

 

3 Evaluation Stage

 

  • List and record tenders ensuring confidentially of tender submissions and manage documentation security (SP)
  • Assess tenders for conformance with tender requirements and reject late or non-conforming tenders (SP)
  • Apply key selection criteria and agreed weightings to conforming tenders and identify the best value tender as the preferred tender (SP)
  • Clarify any uncertain aspects of the preferred tender (SP nominated contact person)
  • Undertake referee checks (SP)
  • Negotiate any variations to the tender documents, such as options and resolve any conditional statements (SP)
  • If successful negotiations can not be reached with the preferred tenderer, consider the next best value tender (SP)
  • Re-confirm budget is available to proceed
  • Prepare and sign off the tender evaluation and recommendation report (SP), note All Tender SP members are to sign-off on the preferred tenderer as the Recommended Tenderer (SP).

 

4 Contract Award Stage

 

  • Submit tender evaluation and recommendation report for approval (Selection Panel)
  • Obtain endorsement (PCG)
  • Obtain approval (Department Delegate with Authority)
  • Advise Principal of approval (Department)
  • Award contract (Principal)

 

The stages are for ‘normal' projects, using standard contract documents. The stages are equally applicable to Lump Sum and Construction Management tenders.

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Opening of Tenders and Approval to Accept a Tender

To ensure that proper recording of submitted tenders is carried out, the SP must adopt a formal procedure for the receipt and opening of tenders. If not using the department's formal tender closing process, tenders are to be closed in the Health Service/Agency offices with suitable facilities and processes.

The tender opening process requires that an opening panel of at least 2 persons should be constituted. One of these people must be an officer of the department or Agency with knowledge of probity and confidentiality. It is normal practice to have a tender box that can be secured (i.e. locked) available until tender close and only tenders received on time shall be considered for evaluation. Tenders for publicly funded projects shall not be received in consultant's offices.

The date and time for receipt of tenders should be at a predetermined place, time and day as required by the Code and the opening of tenders should record in order of opening the relevant tender summary details as listed below. Any tenders received after the nominated date and time shall be marked as such, shall remain unopened and shall be returned to the submitting party.

Tenders usually close at 2-00PM on a Thursday, which is not either side of a public holiday.

Tender Opening Summary Form

The tender brief should clearly specify the information required to be included in tenders. The following information shall be recorded on the tender opening summary form:

  • The full legal name of the tenderer
  • ACN / ABN of Tenderer
  • Building Practitioner Number
  • Tendered price

Note that where a tenderer provides an alternative tender, this should be included on a separate line of the Tender Opening Summary Form.

Tenders

The SP are to ensure that tenderers submit a tender price, which is fully conforming for all works described in the documentation and that there are no conditions, exclusions or exceptions.

Tenderers may offer alternative tender prices providing that a conforming tender is also submitted and all technical details of the alternative are provided including performance characteristics of proposed materials, timing, warranties and so forth.

Tenders must be provided on the approved document formats or in the manner set out in the tender EOI or RFT.

Under no circumstances will late tenders be considered.

Evaluation

Following the opening, a tender evaluation should be undertaken and a tender evaluation and recommendation report prepared by the SP with input from the Project Manager, Principal Consultant and Quantity Surveyor. Approval to accept a tender is based on the tender evaluation and recommendation report by the SP, and following endorsement by the PCG.

Negotiation

Where relevant, alternative options are deemed appropriate to consider, the tender provides for the inclusion or exclusion of separable works packages, the SP may:

  • Undertake negotiations with a schedule of amendments to the documents or tender to comply with the project budget
  • Record all negotiations to clearly illustrate how the final decision has been reached
  • The Code stipulates that negotiations must commence with the best value tender and be completed prior to going to next best value conforming tender if required.
  • Negotiation may include seeking comments or clarifications from the preferred tenderer regarding options or alternative proposals, where savings may be achieved, without affecting the facilities performance requirements.

It is important to retain records of the negotiations so that agreed changes be incorporated into the Contract and referenced during the Contract Administration stage of the project.

Consideration

The PCG will give due consideration to the tender evaluation and recommendation report from the SP and ensure all conditions of the Act, MDs, associated Guides, Practice Notes and the Code have been met.

Appointment

Upon endorsement of the SP tender evaluation and recommendation report by the PCG, the Health Service/Agency shall obtain departmental approval before any commitments are made, contracts are executed, letters sent, insurances and permits sought and works commence.

Notification

Following the SP report to the PCG (with representation from the Health Service/Agency and Department) endorsement the preferred tenderer can be notified of their preferred status. No letter of intent or letter of appointment shall be issued to the preferred tenderer until formal notice has been provided by the Minister or delegate to the Principal of the contract.

All unsuccessful tenderers should also be notified of the outcome following a letter of acceptance being issued. Unsuccessful tenderers should be provided with the contact details of a nominated representative of the SP who can provide feedback. All feedback provided should be positive and relate to the tenderer's own submission so as to assist the tenderer with future tenders. No reference should be made to other submissions, other than the name and amount of the successful tender.

The appointment of a contractor shall also be publicly notified, such as through the ‘Tenders Vic' web site.

For information relating to this page contact: Capital Projects and Service Planning, Ph: 61 3 9096 2030, capital@dhs.vic.gov.au
Site authorised by: Director, Capital Projects and Service Planning

Last Updated: 26 September, 2011
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