Pre-qualification Criteria in Service Contract
8.0 Brief Introduction:
An open tender was published for finalising a high value parallel service contract (60:40) to be executed at two different sites under a Common Project. The bidders were given opportunity to quote for executing the work at any one of the two sites or to quote for the total work at both sites.
Three Separate pre-qualification criteria (PQC) were defined for the Scope of Work (SOW) at individual sites as well as the total SOW at both sites. Some bidders quoted for total SOW and some bidders quoted for individual SOW. It was observed that the financial PQC were defined based on the average of cost estimate range of the respective SOW and contract period. Therefore, though the calculation of financial PQC w.r.t. average turnover and value wise past experience was in line with the procedure defined in purchase manual, logically it was not adequate. It was also noted that pre-qualification value of experience for total SOW for both sites was significantly higher than pre-qualification value of experience of individual SOW put together.
Also, the SOW was having requirement of many activities and materials but the PQC demanded experience of specified value in one of the major activities only with experience of other activity as “desirable”. This created ambiguity and made it difficult for the bidder to comply and thus adversely affected competitive bidding. The tender could not be processed further for price bid opening due to such complexities in terms and conditions.
As a systemic improvement in defining PQC for such service contracts,the following was suggested and the same was implemented through a memorandum from Functional Director concerned.
(i) The technical Pre-Qualification Criteria (PQC) must be in line with the overall technical requirements of the tender. Restricting the PQC to specific activity in the SOW of the tender may restrict competition especially in high value service contracts.
(ii) The technical PQC must not be defined using the vague terms like ‘Desirable’, ‘will be preferred’ etc.
(iii) The technical scrutiny of bids must be done strictly adhering to the PQC defined in the tender. Any kind of relaxation to the bidders at technical scrutiny stage should be strictly avoided.
(iv) The reason for rejection of any bidder must be communicated to him indicating the relevant clause in the tender. Any open issue related to techno-commercial acceptance/rejection of the bids must be resolved with respective bidder prior to putting up the proposal for price bid opening.
(v) Service work to be done in India by an Indian vendor may not be guaranteed for its workmanship based on the experience of its Parent overseas company. Suitable tender conditions should be incorporated for such service contracts to ensure compliance to service requirement.
8.3 Impact and Benefits:
With the implementation of the above mentioned Systemic improvement, it was ensured that the PQC defined be adequate and practical also in addition to complying with the Purchase Manual so that the technical as well as financial evaluation can be done smoothly without any ambiguity to the satisfaction of the bidders.