1. NEEDS TO KNOW ON
PUBLIC PROCUREMENT
Priyantha weerasooriya.
SSP/Director-Supplies.
PHQ

2. Congratulations on
Your success

3. Meaning of procurement
Oxford Dic; The process of obtaining
supplies, especially for Government or
an organization

4. Previous Tender Guidelines
in Sri Lanka
 Guidelines on Government Tender Procedure
 Separate Chapter for Foreign Funded Projects (2000)
 Guidelines on Government Tender Procedures (Revised in 1997)
 Issued a Separate book, with 60 Circulars to the tender procedure 1997 (2004)

5. 2006 -Pro Guideline and Manuals
in Operation as at Today
 Procurement Guideline and Manual Works
and Goods 2006.
 Selection and Employment of Consultants
2007
 Procurement of Pharmaceuticals &
Medicals & Medical Devices 2006

6. 1.4 ETHICS IN PROCUREMENT
1.4.1.Confidentiality
1.4.2.Corruption
1.4.3.Conflict of Interest
1.4.4.No gifts or inducement to be accepted

7. Objectives of Procurement
 Value for Money
Elements of VFM
* Economy – Minimizing Cost of Resources
* Efficiency - Maximum output against minimum input
* Effectiveness - Relationship between intended results and actual results
Public Procurement Involves
* SUPPLIES
* CONSTRUCTIONS
* SERVICES
(Over 80% Public Expenditure Goes Through Public Procurement)
Procurement in Supplies should ensure
* RIGHT QUALITY
* RIGHT QUANTITY
* RIIGHT TIME
* RIGHT PRICE
* RIGHT PLACE

8.  Transparency Accountability
 Fairness
 Efficiency
 Equal Opportunity
 Development of Local Business
 Achievement of National Development
Objectives

9. Important elements of the
Procurement Process
 Procurement Planning
 Preparation of Bidding Document
 Invitation to bid Closing
 Bid Opening
 Bid Evaluation
 Award of Contract

10. LAWS APPLICABLE TO PROCUREMENT
ACTIONS
1) Laws of Arbitration Act No. 11 of 1995
2) Laws of Contract
3)Bribery Act – Section 70. Any public servant who, with intent, to cause wrongful or
unlawful loss to the
Government, or to confer a wrongful or unlawful benefit, favour or advantage on
himself or any person, or with knowledge, that any wrongful or unlawful loss will be
caused to any person or to the Government, or that any wrongful or unlawful benefit,
hall upon summary trial and
conviction by a Magistrate be liable to imprisonment for a term not exceeding ten
years or to a fine not exceeding one hundred thousand rupees or to both such
imprisonment and fine.

11. PROCUREMENT METHOD
3.1 International Competitive Bidding (ICB)
3.2 National Competitive Bidding (NCB) - Over 2M
* Publish in a News Papers – 21 days
* Bid Security required - for 119 days
* Bid validity - for 91 days
3.3 Limited / Restricted International Competitive Bidding
(LIB) and Limited / Restricted National Competitive
Bidding (LNB)
3.4 Shopping - Below 2M
• Five (5) quotations
• Thru Registered Suppliers
• Yellow Pages and Rainbow Pages

12. 3.5 Direct Contracting
a) Direct contracting is a means of Procurement of Goods or Services or Works from
a single supplier source.
b) It entails no competition and shall be used only under exceptional circumstances
c) This method is appropriate under the following circumstances
i) When the prices or rates are fixed pursuant to legislation by regulatory bodies
ii) Standardization of equipment, for compatibility with existing equipment, may
justify additional purchases of the same type of Goods
d) When direct contracting is used under any of the reasons above, the value of the
Procurement shall be subjected to the upper limits given under Guideline 2.14. No
government agency will qualify for automatic direct contract award unless the above
requirements are satisfied
3.6 Repeat Orders
3.7 Force Account
3.8 Emergency Account

13. PROCUREMENT PLANNING
“Good Start is half done:

14. WHAT IS STRATEGIC PROCUREMENT PLANNING?
4.1. Advance Procurement Action
4.2. Master Procurement Plan (MPP)
4.3. Total Cost Estimate
* Preparation of procurement plan 1st stage of
the procurement process
* Define what actions to be taken to focus
* List out various procurement under works,
goods, services and consultancy

15. * Identify by which each one of these works
goods and services are required to use
* Decide contents of individual procurement packages
* Identify the relationship between each such items
* Determine the method of procurement
* Determine the procurement lead-time for each
package and schedule, target date for each event
* Prepare a bar chart and / or table or list identifying
the above dates for each bid package to assist in
procurement monitoring

16. PREPARATION OF BIDDING
DOCUMENTS

17. STANDARD BIDDING DOCUMENT FOR
PROCUREMENT OF GOODS
FORMAT
* Invitation for Bids (IFB)
* Instructions to Bidders (ITB)
* Bid Data Sheet
* Evaluation and Qualification Criteria
* Bidding Forms
* Schedule of Requirements (SOR)
* General Condition of Contract (GCC)
* Special Conditions of Contract (SCC)
* Contract Forms
* Specifications
* Price Schedule

18. INSTRUCTIONS TO BIDDERS
 General - Scope of Bid
- Source of Funds
- Ethic, Fraud and Corruption
- Eligible Bidders
- Eligible Goods & related services
 Contents of Bidding Documents
- Sections of Bidding Documents
- Clarification of Bidding Documents
- Amendment of Bidding Documents
 Preparation of Bids
- Cost of Bidding
- Language of Bidding Document
- Comprising the Bid
- Bid Submission Forms and Price Schedule
- Alternative Bids
- Bid Prices and Discounts

19. - Currencies of Bids
- Documents Establishing the Eligibility of the bidder
- Documents Establishing the conformity of the goods
and related services
- Documents Establishing the qualifications of the
Bidder
- Period of Validity of Bids
- Bid Security
- Format and Signing of Bids
 Submission & Opening of Bids
- Submission, Sealing and Marking of Bids
- Deadline for submission of Bids
- Late Bids
- Withdrawals and modification of Bids
- Bid Opening

20.  Evaluation and Comparison of Bids
- Examination of Terms & conditions: Technical
Evaluation
- Conversion to Single Currency
- Domestic Preference
- Evaluation of Bids
- Comparison of Bids
- Post Qualification of the Bidder
- Purchaser’s Right Accept any Bid, and to reject any
or all Bids
 Award of Contract
- Award Criteria
- Purchaser's right to vary Quantities at time of award
- Notification of Award
- Signing of Contract
- Performance Security

21. ROLE IN BIDDING DOCUMENTS
 Lay down rules of the Competition
* How to price
* How to prepare and submit bids
* What will be the selection criteria
* What will be the qualification criteria
 Scope of the obligation
* Technical Specifications
* Bill of Quantities
* Delivery / Completion Time
* Warranty / Service obligations
 Conditions of Contract
* Payment Terms
* Price Adjustments
* Liability
* Insurance
* Dispute Resolution

22. BIDDING DATA SHEET
 General
 Contents of Bidding Documents
 Preparation of Bids
 Submission and Opening of Bids
 Evaluation and Comparison of Bids

23. EVALUATION AND QUALIFICATION CRITERIA
 Evaluation Criteria
 Evaluation Criteria (Methodology)
 Multiple Contracts
 Domestic Preference
 Post Qualification Requirement

24. BIDDING FORMS
 Bid Submission Form
 Price Schedule
 Price and completion Schedule – Related
Services
 Bid Security (Guarantee)
 Bid – Security Declaration
 Manufacturer’s Authorization

25. SCHEDULE OF REQUIREMENTS
 List of Goods and Delivery Schedule
 List of Related Services and completion
Schedule
 Technical Specification
 Drawings
 Inspection and Tests

26. GENERAL CONDITIONS OF CONTRACT
* Definitions
* Contract Documents
* Fraud and Corruption
* Interpretation
* Language
* Joint Venture, Consortium or Association
* Eligibility
* Notices
* Governing Law
* Settlement of Disputes
* Scope of Supply
* Delivery and Documents
* Supplier’s Responsibilities
* Contract Price
* Terms of Payments
* Taxes and Duties

27. * Performance Security
* Copyright
* Confidential Information
* Subcontracting
* Specification and Standards
* Packing and Documents
* Insurance
* Transportation
* Inspection and Tests
* Liquidated Damages
* Warranty
* Patent Indemnity
* Limitation of Liability
* Changes in Laws and Regulations
* Force Majeure
* Change Orders and Contract Amendments
* Extensions of Time
* Termination
* Assignment

28. CONTRACT DATA
Contract Data shall supplement and /
or amend the condition of contract
(CC). Whenever there is a conflict, the
provisions contract data shall prevail
over those in the contract condition

29. CONTRACT FORMS
* Contract Agreement
* Performance Security
* Bank Guarantee for
Advance Payment

30. NPA APPROVED STANDARD BIDDING DOCUMENTS
PUBLICATION NUMBER TITLE
ICTAD /SBD/01 Shopping Procedure
ICTAD/SBD/02 NCB
ICTAD/SBD/03 MINER CONTRACTS
ICTAD/SBD/04 DESIGN AND BUILD

31. Questions?
Enjoy your Tea

32. ISSUANCE OF BIDDING
DOCUMENTS

33. * Should be made available during office hours
* At least up to one day prier to deadline of submission
of bids
* Availability for inspection, free of charge
* Cost of BDs should be reasonable
* Maintain good record keeping system
* BDs shall be issued as specified in the IFB

34. SUBMISSION OF BIDS

35. * Bids shall be received only at one
location
* Bids must be submitted only under
sealed cover.
* Clearly marked as “Original” or “Copy”
putting together in one envelop
* Late bids shall not be accepted
* Bids shall be received as specified in
the IFB

36. BID OPENING

37. * BOC shall comprise of minimum two members
* Open soon after the closing of bids
* Bids shall not be rejected at the bid opening
* Only “Original” shall be opened
* Late bids shall not be opened
* Withdrawals shall not opened (if not any doubt) –
withdrawal letter open first
* Modification should with original bid
* Attendance for bidders or his representatives
* Record Keeping is very important
* Original bids and records to be handed over to the
Chairperson of TEC
* Bids shall be opened as specified in the SBDs

38. NECESSITY
* IG Circular No. 2409/2012
Finance Circular No. 05/2012, dated
04.08.2011
* Delegation of financial Authorization
under FR 135
* For Goods, Works & Services

39. AUTHORITY FOR AWARD – SHOPPING
Authority GOSL Foreign Funded
MPC – Works inviting not less than 5 sealed quotation
form ICTAD registered contractors
Less than
Rs. 5m
Less than
Rs. 5m
MPC – Goods & Services inviting not less than 5 sealed
quotations from registered suppliers
Less than
Rs. 5m
Less than
Rs. 3m
PPC – Works inviting not less than 5 sealed quotation
from ICTACD registered contractors
Less than
Rs. 5m
Less than
Rs. 5m
PPC – Goods & Services inviting not less than 5 sealed
quotations from suppliers
Less than
Rs. 5m
Less than
Rs. 3m
MPC, DPC, PPC, - Goods & Services inviting not less than
3 quotations from registered suppliers
Less than
Rs. 5m
Less than
Rs. 1m
RPC – Works inviting not less than 5 sealed quotations
from ICTAD registered suppliers
Less than
Rs. 5m
Less than
Rs. 1m
RPC – Goods & Services inviting not less than 5 sealed
quotations from ICTAD registered suppliers
Less than
Rs. 5m
Less than
Rs. 500,000.00
CAO/HD/PD Works inviting not less than 3 sealed
quotations
Less than Rs. 500,000.00
CAO/HD/PD goods & Services inviting not less than 3
sealed quotations
Less than Rs. 250,000.00

40. Purpose of Bid evaluation
To determine the lowest evaluated
substantially responsive bid out of the
bid received.

41. Composition of TEC
1. No member should serve in both the PC & TEC.
2. Subject specialists
3. At least knowledgeable member on Procurement
procedure
4. In case of specific subject matters ,can oblation
expert advice from external members or
institutions
5. Can oblation assistance and expert advice from
consultants

42. Responsibilities of TEC
1. TEC members are jointly and severally responsible.
2. Within the minimum time period as agreed with PC
according to the PTS.
3. Evaluation should be made according to the approved
specifications and criteria
4. In case of CAPC & MPC, if any objection from any
bidder regarding the 10days prier to closing of bids ,
PE shall convey its decision to all the other bidders.
5. Revive and approve pre qualifications documents /
SBDs prepared by the PE.

43. Responsibilities of TEC Con…
6. To direct the PE to obtain clarifications from bidders in
writing if necessary.
7. T approve and issue addenda to the bidding
documents where necessary.
8. To agree upon the bid opening procedure.
9. To participate in negotiation , if directed by the PE.
10.The TEC may get assistance from external assistance .
11.Chairperson of the TEC or his nominee selected form
the TEC shall participate at the pre – bid conference.

44. BID EVALUATION
EVALUATION CRITERIA
• Shall be stated in Bid Documents
• All factors quantified in Monitory terms
44

45. Stages of bid Evaluation
Bid Examination
Detailed Bid Evaluation
Post Qualification

46. EVALUATION PROCESS
Preliminary Examination
• Whether the required securities are furnished.
• Whether the bid documents are properly signed.
• Whether the power of attorney for the authorized
person is submitted
• Whether joint venture agreements are submitted ( If
necessary)
• Eligibility of bidders
• Whether the bid form was purchased from the
concerned office
• Whether the person or firm submitting the bid
purchased bid form
• Whether the bid is sealed
• Whether the local agent is declared (If necessary)
46

47. 47
Preliminary Examination

48. 48

49. Substantial Responsiveness
• Failure to sign the bid form
• Eligibility requirements
• Bid security as specified
• Inability to meet the critical delivery schedule
• Conditional bids
• Unavailability of major supporting documents
• Failure to bid for the required scope of work
• Failure to quote for a major items in the package
• Failure to meet major technical requirements –
E.g. required material , plant capacity.
49

50. Detailed bid evaluation
Step – by – step procedure to be followed:
1. Correction of arithmetical errors
2. Un balance Bids
3. Discounts if Any;
4. Evaluation of acceptable omissions
5. Conversion to common currency
6. Completion times
7. Adjustments for various minor deviations
8. Domestic preference
9. Substantially non-responsive bids
10.Performance or service factors will be taken in to account as a
adjustment.

51. CORRECTION OF ARITHMETICAL ERRORS
1. Where there is discrepancy between the amount in
figures and in word , the amount in words will govern
2. Unit rate and line items
3. Average unit cost for missing items
4. Estimated unit cost for underestimated items
Exclude VAT ,Contingencies &
Provisional sum

52. Unbalanced Bids
Examine whether the bid is substantially
balanced
Verify that prices are not so low
Higher unit price for earlier works
Higher unit rates for underestimated work
Items
>50% the average cost and where the total
amount involved >5% of the total bid
52

53. Unbalanced Bids
Large contracts – say exceeding 500Mn
Discount the Loaded Item
Discount the engineer estimated value
Add the deference between two NPVs to the
bidder value for the purpose of compression
53

54. Unbalanced Bids
Other contract – Say not exceeding 500Mn
Ask to provide rate analysis
If the bidder fail to justify ask additional bid
security to mitigate the risk
If the bidder refuse to provide such security bid
shall be rejected.
Add the deference between two NPVs to the
bidder value for the purpose of compression
54

55. Alternative bids
 If the bidders are permitted to submit alternative bids , it should
be mentioned in the bidding documents
 Shall be considered as a separate bid
 If the lowest evaluated bidder has submitted the alternative bid ,
then in can be opened.
 Ask to provide rate analysis
 If the bidder fail to justify ask additional bid security to mitigate
the risk
 If the bidder refuse to provide such security bid shall be rejected.
 If the alternate bid price lower than the original bid , then
alternate bid value should be the lowest evaluated price
55

56. APPLICABLE DISCOUNT
1. Prier to closing of bids
2. Ignore Conditional Discount
3. Should be declared before closing of bids.
4. As a % or lump-sum can be declared.
5. Exclude the provisional sum and contingencies when
the discount is offered as a %
6. When the discount is offered as a lump –sum ,can
distribute uniformly to all the line items excluding
Contingencies and provisional sum.

57. CONVERSION TO COMMON CURRENCY
• OBJECT
– To determine lowest evaluated bid on date of specified.
• BID PRICE
– Convert in to amount payable in each currency.
• COMMON CURRENCY
– Borrower’s or any currency
• EXCHANGE RATES
– Official source such as Central Bank
• AS ON
– Any specified date
– Date to be clearly specified in bid documents.
57

58. DOMESTIC PREFERENCE
• Guideline 7.9.6 shall be included in the bidding
documents
• Assembly ,Fabrication & possessing etc are
commercially recognized.
• Can not modify the mix of domestic and foreign
goods after bid opening.
• No margin of preference shall be applied to any
associated services or works included in the
package.
58

59. Detailed evaluation of bids
Financial adjustment for Bid Price (Commercial
Aspects)
1. Adjustment for Deviation from the terms of
payment
2. Adjustment for deviation from the delivery
schedule or completion
3. Adjustment for Deviation from provision for
payment of duties and taxes
59

60. Detailed evaluation of bids
Financial adjustment for Bid Price (Technical
Aspects)
1. Adjustment for completeness in scope of supply –
E.g. Missing Items
2. Adjustment for Technical compliance – E.g. Alloy
wheel vs Normal wheel
3. Adjustment for Inland Transportation
4. Adjustment for spare parts
5. Maximum amount of Adjustment for deviation
60

61. BID EVALUATION
Other factors
• Delivery Time /Completion time
• Payment terms
• Terms of Guarantee
• Training
61

62. BID EVALUATION
Other Factors
• Technical Capacity
• Operating Cost
• Maintenance Cost
• Efficiency
• Resale value
62
Life cycle Cost

63. 63

64. Thank You