4.2.4 Bid Evaluation

The aim of the evaluation is to determine which Bid delivers the best Value for Money and displays the greatest amount of technical competence and adherence to the stated specifications, while introducing a deal of innovation that maximises savings. The RfP must clearly specify the Bid evaluation mechanism that will be utilised by the PPP Project Team in evaluating the submitted bids. Specifically, the evaluation mechanism must outline whether:

Financial and technical proposals will be scored separately, and, if so, what the exact weightage given to each component in each proposal will be;

There will be a technical score Threshold to meet, following which the lowest price will automatically win;

The technical offers will be evaluated, and a Best and Final Offer ("BAFO") process followed wherein Bidders will be asked to price the best solution, with the "winning" Bidder receiving favourable scoring or,

The best technical solution will be re-Tendered through a competitive Bidding Process with the output specifications replaced entirely or to a certain degree, amongst various options.

Although detailed guidance on bidding and evaluation is provided in the following sections of this document, broadly, the following should be considered as part of the evaluation methodology:

Comparison of the Bid submitted to the PSC - although financial analysis would have revealed that procuring the project as a PPP results in Value for Money savings as compared to traditional procurement ("PSC"), the extent of the deviation must be observed and scored accordingly in order to reward lower pricing;

Compliance with stated requirements, adherence to the stated scope and output specifications, and provision of information as required by the RfP; and,

Response to the technical aspects, and commercial and financial information - including the accuracy of the financial model, a clear adherence to the stated model presentation guidelines, and a consideration of the requisite insurance programmes and taxes - as outlined in the RfP.

The evaluation methodology section outlined in the RfP should comprise of the following components:

An introduction section that summarises the evaluation criteria utilised, introduces important terms and their definitions, and specifies section-specific disqualification measures;

Procedure for technical envelope completeness and compliance check, which must be the first step followed during the evaluation process, in order to establish whether the Bidder has met the requisite minimum requirements, has complied with all formalities, and has included all documents as required by the RfP in respect of the technical envelope;

Detailed technical envelope evaluation section, which notes that the Technical Evaluation will focus on, amongst other issues, the following: project management strategy, organisation, and staffing; design solution; construction strategy and schedule; and, FM/O&M strategy and approach. In tabular form, this section must contain the criteria to be evaluated, the weightage granted to each criterion, the maximum raw score, and the maximum adjusted score that can be awarded. Following this, the inclusion of a technical scoring summary section is recommended, that grades scores in the following order: "outstanding", "very good", "good and/or satisfactory", "poor", "very poor", and "unacceptable and/or wholly unsatisfactory";

Detailed legal evaluation section, based on the evaluation conducted by the Legal Advisor of the mark-up of the Project Agreement included as part of the RfP, with proposals that are based entirely on the original form receiving a full 100 points. In tabular form, this section must contain the criteria to be evaluated as derived from the requisite agreements, the weightage, the maximum raw score, and the maximum adjusted score that can be awarded. The legal scoring guide must emphasise that the scoring is based on a sliding scale wherein lower scores correlate wholly with greater transfer of risk to the Government Entity as compared to the Risk Allocation in the PPP Agreement;

The Technical Envelope Score should be clearly mentioned, with a weightage assigned to the technical and legal evaluation scores. In addition, a minimum technical envelope Threshold, if applicable, should be stated;

Summarise the technical envelope evaluation phase and provide an indicative Timeline of when Bidders will be notified of their shortlisting;

Introduce the financial envelope evaluation section, noting that it would comprise of a price evaluation - viz., an evaluation of the Bid price proposed by the Bidder - and a commercial evaluation - viz., an evaluation of the commercial robustness and deliverability of the Proposal;

Procedure for financial envelope completeness and compliance check, in order to establish whether the Bidder has met the requisite minimum requirements, has complied with all formalities, and has included all documents as required by the RfP in respect of the financial envelope;

Detailed financial envelope evaluation, which notes that the evaluation will include a detailed analysis of the following commercial aspects, at a minimum: proposed financial structure, funding plan including the cost of funding, level of committed financing, completeness of term sheets, deliverability of the funding solution including the likelihood of securing finance within the Project implementation schedule, security requirements from lenders, and the timing and amount of equity funding. In tabular form, a commercial scoring guide with criteria such as funding strategy, debt strategy, equity strategy, overall quality of the financial model, deliverability of the solution within the cost, and taxation and accounting assumptions must be listed, along with their weightage, maximum raw score awarded, and maximum adjusted score awarded. A commercial scoring guide sorting the scoring in a manner similar to the technical scoring guide must be prepared;

A formula for price evaluation that takes into account the lowest price, which is assigned a score of 100, should be stated clearly; in addition, a formula for the financial envelope score should be prepared that takes into account the weightage for financial evaluation and the commercial and price scores. Based on the evaluation criteria determined by the Government Entity, the overall scoring formula must be clearly stated, emphasising that it is a summation of the technical and financial evaluation scores; and,

State the clarification procedure during evaluation in detail, including logistical and administrative details for submission, clarification meetings, and the procedure for the Government Entity to request clarifications on a proposal from a particular Bidder.

Figure 22: Illustrative Technical Evaluation and scoring criteria

Figure 23: Sample technical scoring summary