EVALUATION OF TENDERS: Examination of Lowest Tender: - Once the lowest tender has been identified, the PQS will

proceed to look at it in detail. - When examining, he will look for errors, anomalies or peculiarities, which make it unwise for the client to enter into a contractual relationship with the tenderer. - However, it should be made clear to tenderers, when tendering that the client does not bind himself to accept the lowest or any tender. - But contractors naturally expect that there will be sound reasons for rejecting the lowest tender. - Therefore the PQS must be able to provide those reasons in the event of the lowest tender not being accepted. (In Sri Lanka Evaluation of government tenders are done according to Government Procurement Guidelines - 2006 published by Ministry of Finance & Planning). - Why examine the tender in detail? 1. It is because any errors in the bills of quantities / schedules of rates should be identified and satisfactorily dealt with. 2. Otherwise, problems will almost certainly arise during the course of the contract and during the settlement of the final account. 3. To reveal whether an arithmetical error has occurred of such a magnitude that; It would not be wise to hold the contractor to the tender sum because he would then be working at a much-reduced profit. If such an error were in contractors favor, then it would be unfair to the client to have to pay more than the job was worth. - The things PQS will look for when examining tenders will be following kinds. o Arithmetical errors - occur in item extension e.g. a) multiplication errors quantity x rate b) errors in addition c) when transferring page totals to next page / to summaries. o Pricing errors these are patent errors not matters of opinion as to whether a rate is high or low. e.g. a) a patent error occurs where, in the transition from cube to superficial forms or vice versa. b) By an oversight, an item may not have been priced at all. c) Identical items in different sections of the bills may have been priced differently. o Pricing methods e.g. a) sometimes a tenderer will not price most, or any of the preliminaries, there value being included in some or all of the measured rates. b) some contractors may price all the measured items at net rates i.e. exclusive of any profit and overheads, and showing that as a lump sum on the general summary. c) a contractor may price those sections, which will largely be completed at early months at inflated rates, balancing these with low rates in the finishing sections. (Front Loading). o Basic price list The contract provisions may require the contractor to submit a list of basic prices of materials upon which his tender is based. This will be used in order to adjust the contract sum for any fluctuations in the costs of materials during the contact period / or to price any variations. The list should be scrutinized to ensure that the prices quoted are the current market prices, including delivery to the site. - Correction of errors o Errors should be corrected as follows: Where there is a discrepancy between the amounts in figures and in words, the amount in words will govern. Where there is a discrepancy between the unit rate and the line item total resulting from multiplying the unit rate by the quantity, The unit rate as quoted will govern. 1

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Unless there is an obviously gross misplacement of the decimal point in the unit rate, in which case the line item total as quoted will govern and the unit rate will be corrected. If the total bid price changed due to corrections of above mistakes, the corrected value should be taken as the tender value. If the tenderer does not agree for such adjustments, his bid should be rejected and his bid security will be forfeited. Reporting on Tenders: - The PQS must report to the Project Manager / Architect and the client as soon as his examination of the tender is complete. - The purpose of the report is to enable the client to decide whether to accept any of the tenders and, if so, which one. - The form of the report will vary according to the nature of the tender documents but usually will include following; o Copy of record of bid opening. o Table showing the bid prices as submitted and as corrected for arithmetical errors, including the extent of errors and inconsistencies in pricing and the action taken in regard to them. o Evidence that the bidders concerned have accepted corrections for arithmetical errors. o The opinion of the PQS as to the price level, i.e. that the tender is high, low or about the level expected. o The details of any qualifications to the tender. o The likely total cost of the project, if not a lump sum contract. o A recommendation as to acceptance or otherwise.