Bid Evaluation on a Provincial Road
A provincial road development authority has four bids for resurfacing 18 km of road. The procurement committee uses a 70:30 technical-to-price weighting, a mandatory technical threshold of 70 points, and a mandatory completion period of 90 days. Bid A: LKR 92 million, technical 78, completion 90 days. Bid B: LKR 88 million, technical 64, completion 85 days. Bid C: LKR 96 million, technical 85, completion 90 days. Bid D: LKR 84 million, technical 72, completion 120 days. The financial score is calculated as (lowest responsive price ÷ bid price) × 100. The committee chair wants to award to D because it is cheapest, and the finance director prefers B to save LKR 8 million against C. The provincial audit office has flagged previous variations on this road, and the engineer's estimate is LKR 95 million.
1. Evaluate the bids. Show which are responsive and calculate the weighted scores for the responsive bids.
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Responsiveness first.
- Bid B: technical score 64, below the mandatory threshold of 70. It is non-responsive and cannot be scored, however cheap.
- Bid D: completion 120 days, against a mandatory 90 days. It is non-responsive. The chair's preference is therefore not available without changing the tender conditions, which would require a fresh process and would expose the authority to challenge.
- Bids A and C meet the threshold and the completion requirement.
Financial scores among responsive bids. Lowest responsive price is LKR 92 million (A).
- A: (92 ÷ 92) × 100 = 100.00
- C: (92 ÷ 96) × 100 = 95.83
Weighted scores (70% technical, 30% price).
- A: 0.70 × 78 + 0.30 × 100 = 54.60 + 30.00 = 84.60
- C: 0.70 × 85 + 0.30 × 95.83 = 59.50 + 28.75 = 88.25
Result. C is the highest-scoring responsive bid, despite being LKR 4 million more expensive than A. The 7-point technical advantage outweighs the price difference. Awarding to D on price alone would be unlawful on these criteria; even if D were scored, its weighted result would be 0.70 × 72 + 0.30 × 100 = 80.40, still below C.
2. How should the committee respond to the chair and the finance director?
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To the chair. Explain that price is only 30 per cent of the evaluation and that D failed a mandatory requirement. Mandatory requirements are not tradeable against price: accepting 120 days would change the service the authority is buying and would give other bidders grounds to complain. If the authority genuinely wants a longer completion period, the correct route is to re-tender with revised conditions, not to manipulate the evaluation.
To the finance director. B cannot be awarded because it failed the technical threshold of 70. Saving LKR 8 million against C is not a saving if the bid is non-responsive; it is a legal and delivery risk. The comparison should be between A and C, where the price gap is LKR 4 million and C's technical score is 7 points higher.
Audit context. Because previous variations on this road have been flagged, the committee should record the responsiveness findings and the score calculation in the evaluation report, and note that the lowest-priced compliant bid was A but the highest-scoring bid was C. That record is the best defence against a later challenge. It also shows that the committee did not simply default to the lowest price.
3. What conditions would you attach to the award to manage delivery and cost risk?
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Conditions.
- Performance security of an appropriate percentage of the contract price, valid through the defects liability period, with clear call conditions.
- Milestone payments tied to measured work, not to elapsed time, so that mobilisation advances are recovered and progress is verified before payment.
- A fixed completion date with liquidated damages, consistent with the 90-day requirement, and a programme of works showing plant, labour and material sources.
- A variation clause that requires prior written approval and a technical justification for any change in scope or quantity. Given the audit history, no variation should be approved by the same officer who certifies the work.
- Defects liability and retention, so that surface failures are remedied at the contractor's cost.
Reasoning. C is not the cheapest compliant bid, so the authority must justify the premium through technical quality and then protect that quality contractually. The conditions should target the specific risks on this road: previous variations, possible quantity re-measurement, and the temptation to recover a higher price through scope changes. A pre-award clarification meeting should confirm that C's technical score is supported by the resources it has actually committed.