PWD Vol-2, Chapter-9, Step 7 Page 9-19

Step 7. Award of Contract

Step 7.1 Pre-Award Discussions and Letter of Acceptance

After approval of the recommendation of the Bid Evaluation Committee, the Employer may issue the Letter of Acceptance (LOA) to the lowest evaluated responsive bidder without further delay if there is no need to clarify any points in the bid. Alternatively, the Employer may require discussions with the lowest evaluated bidder in order to agree on any deviations which may have arisen before issuing the LOA. The discussions should be recorded and the minutes attached to the LOA.

If agreement with the lowest evaluated responsive bidder cannot be reached then normal course of action will be for the bid security of the bidder to be forfeited and for the Employer to seek agreement with the second lowest evaluated bidder under FAR Rule 77(3).

In case of second lowest evaluated responsive bidder also failing to conclude the agreement, his bid security shall also be forfeited under FAR Rule 77(3).

If the bid price of third lowest evaluated responsive bid does not exceed the amount of the lowest evaluated bid and the amount of Bid Securities forfeited from first and second lowest bidders, the contract may be awarded to the third lowest bidder with the recommendations of the Bid Evaluation Committee under FAR Rule 77(3).

If the agreement does not take place with the third lowest bidder, his Bid Security shall be forfeited and bids shall be re-invited under FAR Rule 77(3).

The Bid Security of all bidders except the three bidders quoting the lowest bids may be released or returned under FAR Rule 77(4).

Step 7.2 Provision of Performance Security

The bidding documents normally provide 14 days from the date of issuance of the LOA by the Employer for the submission of the Performance Security. If the bidder fails to furnish the Performance Security and sign the contract, the Bid Security shall be forfeited. And second lowest evaluated responsive bidder shall be awarded the contract. Upon submission of the Performance Security, by the second lowest bidder, a contract shall be concluded with this bidder under FAR Rule 77(3).

Step 7.3 Contract Agreement

The Project Manager shall ensure that all provisions in the bidding documents and any additional provisions agreed upon with the bidder are complied with before signing the Agreement.
The issuing of a LOA in Step 7.1 is normally considered sufficient to establish a legally binding contract, with the implementing agency as the Employer and the successful bidder as the Contractor. The Employer may issue a letter instructing the Contractor to commence work, in advance of the signing of the Agreement provided that the Contractor has submitted the necessary securities and insurances. Construction administration procedures from this point are described in Chapter 11.

Step 7.4 Notification to Unsuccessful Bidders
Upon acceptance of a bid, a comparative table of the bids shall be prepared and flashed stating names and addresses of the bidders, amount of corrected total bid prices and quoted bid prices and the rationales (basis) of acceptance of the bid.

PPA 2007; Chapter 3, Section 27

27. Acceptance of Bid and Procurement Contract:

(1) The Public Entity shall select for acceptance only the lowest evaluated substantially responsive bid in accordance with Section 25.

(2) Within seven days of the selection of the bid pursuant to Sub-section (1), the Public Entity shall serve a notice of the intent of acceptance of his or her bid to the concerned bidder. Information regarding the name, address of the bidder whose bid has been so selected and the price of the bid shall also be communicated to the other bidders.

(3) If no bidder makes an application pursuant to Section 47 within a period of seven days of providing the notice under Sub-section (2), the bid of the bidder selected pursuant to Sub-section (1) shall be accepted and a notice shall be communicated to the bidder to furnish the performance security to conclude the procurement contract within fifteen days.

(4) The concerned bidder shall have to furnish the performance security and sign the procurement contract under Section 52 within the period set forth in Sub-section (3).

(5) If the bidder fails to furnish the performance security and sign the procurement contract within the period under Sub-section (3), the bid security of that bidder shall be forfeited, and the bid of the other immediately next lowest evaluated substantially responsive bidder shall be accepted and the procurement contract concluded.

(6) If even the bidder under Sub-section (5) fails to furnish the performance security and sign the procurement contract, the bid of the other immediately next lowest evaluated substantially responsive bidder, respectively, shall be accepted, and a notice shall be served to that bidder for concluding the procurement contract pursuant to this Section.

(7) If, within thirty days of the communication of the notice as referred to in Sub-section (2), any bidder whose bid has been rejected requests for grounds for the rejection of its bid, the Public Entity shall have to communicate such information to that bidder.

SBD (for medium contract and for construction of bridge) Section III Heading F Award of Contract clause 31 to 40

F. Award of Contract

31. Award Criteria and Intention to Award

31.1 Subject to Clause 32, the Employer will select and award the Contract to the Bidder whose bid has been determined to be substantially responsive to the Bidding documents and who has offered the lowest evaluated Bid Price, provided that such Bidder has been determined to be (a) eligible in accordance with the provisions of Clause 3 and (b) qualified in accordance with the provisions of Clause 4.

31.2 The Employer shall notify it’s intention to award the Contract to the selected bidder in accordance with Sub-Clause 31.1 within 7 days of selection of his bid. Further, the employer shall also provide information regarding the name, address and the contract amount of the successful bidder to all the bidders who participated in the bid.

31.3 Any Bidder who is not satisfied with the procurement process or Employer’s decision provided as per Sub - Clause 31.2 and believes that the Employer has committed an error or breach of duty which has or will result in loss to the bidder then the bidder may give an application for review of the decision to the Employer with reference to the error or breach of duty committed by the Employer. The review application should be given within 7 days of receipt of information regarding the issue of letter by the Employer notifying it’s intention to award the contract to the successful bidder.

31.4 If the review application is not received by the Employer pursuant to Sub-Clause 31.3 then the bid of the Bidder selected as per Sub-Clause 31.1 shall be accepted by the Employer.

32. Employer’s Right to Accept any Bid and to Reject any or all Bids

32.1 Notwithstanding Clause 31, the Employer reserves the right to accept or reject any bid, and to cancel the Bidding process and reject all Bids, at any time prior to the award of Contract, without thereby incurring any liability to the affected Bidder or Bidders or any obligation to inform the affected Bidder or Bidders of the grounds for the Employer’s action.

33. Notification of Award and Signing of Agreement

33.1 The Bidder whose bid has been accepted in accordance with Sub- Clause 31.4 will be notified of the award by the Employer prior to expiration of the bid validity period by facsimile confirmed by registered letter. This letter (hereinafter and in the General Conditions of Contract called the “Letter of Acceptance”) will state the sum that the Employer will pay the Contractor in consideration of the execution, completion and maintenance of the Works by the Contractor as prescribed by the Contract (hereinafter and in the Contract called the “Contract Price”).

33.2 The notification of award will constitute the formation of the Contract, subject to the Bidder furnishing the Performance Security in accordance with Clause 34 and signing the Agreement in accordance with Sub-Clause33.3.

33.3 The Agreement will incorporate all agreements between the Employer and the successful Bidder. It will be signed by the Employer and sent to the successful Bidder with the notification of award along with the Letter of Acceptance. Within 15 days of receipt, the successful Bidder shall sign the Agreement and deliver it to the Employer.

33.4 Upon the furnishing by the successful Bidder of the Performance Security, the Employer will promptly notify the other Bidders that their Bids have been unsuccessful.

34. Performance Security

34.1 Within 15 days after receipt of the Letter of Acceptance, the successful Bidder shall deliver to the Employer a Performance Security in the amount stipulated in the SCC and in the form stipulated in the Bidding Data, denominated in the type and proportions of currencies in the Letter of Acceptance and in accordance with the General Conditions of Contract.

34.2 If the Performance Security is provided by the successful Bidder in the form of a bank guarantee, it shall be issued, at the Bidder’s option, either (a) by a bank located in Nepal acceptable to the Employer or (b) a foreign bank through a correspondent bank located in Nepal.

34.3 [The Employer may use his own Performance Security form provided it conforms to prevailing laws and regulations]. 34.4 Failure of the successful Bidder to comply with the requirements of Sub-Clause 34.1 and Sub-Clause 29.4 shall constitute sufficient grounds for cancellation of the award and forfeiture of the Bid Security.

35. Advance Payment and Security

35.1 The Employer shall make an Advance Payment on the Contract Price as stipulated in the General Conditions of Contract, subject to a maximum amount¹⁷ as stated in the Bidding Data.

36. Additional Securities

36.1 The Contractor shall provide additional Performance Security pursuant to Sub-clause 29.4. Failure to do so shall result in forfeiture of the Bid Security and award of the Contract to the next lowest evaluated substantially responsive Bidder.

37.Adjudicator/ Dispute Resolution Board

37.1 If any dispute arises between the Employer and the Contractor in connection with the execution of the Contract, the parties shall attempt to settle such dispute amicably. If the parties fail to resolve the dispute amicably then the dispute may be referred to the Adjudicator or Dispute Resolution Board (DRB) as specified in the Bidding Data by either party in writing.

37.2 If Adjudicator is specified pursuant Sub-Clause 37.1,he Employer proposes the person named in the Bidding Data to be appointed as Adjudicator under the Contract, at the hourly fee as specified in Bidding Data plus reimbursable expenses. If the Bidder disagrees with this proposal, the Bidder should so state in his Bid. If, in the Letter of Acceptance, the Employer does not agree on the appointment of the Adjudicator, the Employer will request the Appointing Authority designated in the SCC pursuant to Clause 24.1 of the General Conditions of Contract (GCC), to appoint the Adjudicator.

38. Corrupt or Fraudulent Practices

38.1 The GoN requires that the Employer as well as Bidders observe the highest standard of ethics during the procurement and execution of contracts. In pursuance of this policy, the GoN:

a. defines, for the purposes of this provision, the terms set forth below as follows:

i. “corrupt practice” means the offering, giving, receiving or soliciting of any thing of value to influence the action of a public official in the procurement process or in contract execution; and
ii. “fraudulent practice” means a misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the Employer, and includes collusive practice among Bidders (prior to or after bid submission) designed to establish Bid Prices at artificial non-competitive levels and to deprive the Employer of the benefits of free and open competition;

b. will reject a proposal for award if it determines that the Bidder recommended for award has engaged in corrupt or fraudulent practices in competing for the contract in question; and
c. will declare a firm ineligible for a stated period of time, to be awarded a GoN funded contract if it at any time determines that the firm has engaged in corrupt or fraudulent practices in competing for, or in executing, a GoN -funded contract.

39. Conduct of Bidders

39.1 The Bidder shall be responsible to fulfill his obligations as per the requirement of the Contract Agreement, Bidding documents, GoN’s Procurement Act and Regulations.

39.2 The Bidder shall not carry out or cause to carryout the following acts with an intention to influence the implementation of the procurement process or the procurement agreement :

a) give or propose improper inducement directly or indirectly,
b) distortion or misrepresentation of facts
c) engaging or being involved in corrupt or fraudulent practice
d) interference in participation of other prospective bidders.
e) coercion or threatening directly or indirectly to cause harm to the person or the property of any person to be involved in the procurement proceedings,
f) collusive practice among bidders before or after submission of bids for distribution of works among bidders or fixing artificial/uncompetitive bid price with an intention to deprive the Employer the benefit of open competitive bid price]
g) contacting the Employer wit an intention to influence the Employer with regards to the bid or interference of any kind in examination and evaluation of the bids during the period after opening of bids up to the notification of award of contract

 

40. Blacklisting Bidder

40.1 Without prejudice to any other right of the Employer under this contract, GoN, Public Procurement Monitoring Office may blacklist a bidder for his conduct up to three years on the following grounds and seriousness of the act committed by the bidder:

a) if it is proved that the bidder committed acts pursuant to the clause 39.2,
b) if the bidder fails to sign an agreement pursuant to clause 28.4,
c) if it is proved later that the bidder/contractor has committed substantial defect in implementation of the contract or has not substantially fulfilled his obligations under the contract or the completed work is not of the specified quality as per the contract ,
d) if convicted by a court of law in a criminal offence which disqualifies the bidder from participating in the contract.
e) if it is proved that the contract agreement signed by the bidder was based on false or misrepresentation of bidder’s qualification information
f) other acts mentioned in the Bidding Data

 

40.2 A firm declared blacklisted and ineligible by the GON and or concerned Donor Agency in case of donor funded project shall be ineligible to bid for a contract during the period of time determined by the PPMO and or the concerned donor agency.

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¹⁷ This amount is 20 percent of the Contract Price as specified in PPR 2007.