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Invariably, price is not the only criterion for winning a bid

Oct 24, 2009 Letters

Dear Editor,
Recently, there were several publications in the local newspapers about the public procurement process and how contracts are awarded.
Judging from these publications it appears that some contractors, and others, believe that contracts should be awarded to the bidder with the lowest price, while others believe that contracts should be awarded to the bidder with the price closest to the engineer’s estimate. What those persons do not realise is that the client looks for the best value, not necessarily the lowest or the price closest to the engineer’s estimate.
Generally, in a procurement process, bidders are expected to meet certain stated requirements, which are used as the criteria for evaluating the bids. Bidders are, therefore, expected to submit sufficient, relevant information from which a determination will be made as to whether or not they meet those requirements.
Very often bidders ignore some or all of the requirements and just concentrate on offering the lowest possible price for their goods or services. A bidding process may have:
(i) a financial requirement to ensure that the bidder have sufficient access to funds to successfully complete the contract;
(ii) (ii) equipment and skill requirements to ensure that the bidder has the capacity to perform the contract;
(iii) (iii) an experience criteria to ensure that the bidder has successfully performed similar contracts in the past; (iv) strict specifications in the case of procurement for goods; and others.
Bidders are expected to meet the stated requirements even before their prices are considered and compared. In other words, a bidder’s price is irrelevant if he does not meet the requirements, even if his price is the lowest or closest the engineer’s estimate.
As such, bidders should pay special attention to the bidding requirements when participating in a bidding process. If a bidder can not meet all the requirements, that bidder should consider partnering with another contractor/supplier in order to do so. They can submit a bid as a joint venture.
The next time a bidder complaints that his bid had the lowest price and he was not awarded the contract, ask him if he met all the requirements. Invariably, price is not the only criterion for winning a bid. Using price as the only criteria could result in the wrong contractor/supplier being selected, which could have serious repercussions in terms of the project quality, time and budget.
Horace Williams
Electrical Engineer

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