Unit FourteenBidding

Learning Objectives

To know what is a BidTo know the general procedures of

BiddingTo learn the writing strategy in Bidding

General View Bidding (Tendering), as one special trade form, is

widely used in international trade nowadays, especially for government construction projects or purchase of goods in large quantity. The trading process involved in bidding is quite different from other trade forms. For construction projects or large deals, contractors or suppliers are often requested to send their quotations on specified conditions within a

period of time.

General View1.Bid After the bidders agree to submit the Bids, there is still a long

way to go. The bidders need to prepare for bids. During the period of time, they attend the pre-bid meeting to clarify all the particulars. The bidders are advised to visit and examine the Site of the Works and the surroundings and to obtain for himself on his own responsibility, all information that may be an important factor in pricing and necessary for preparing the bids and entering into a contract. Preparation for documents comprising the Bid is also a complicated process.

The price of goods or service is not quoted by the seller, but decided by choosing the most advantageous one from

the offers of bidders. The successful bidder will be awarded part or whole of the tender. Thus, for bidders, it is always a difficult task to offer a low price to win the bid and still earn a profit.

General ViewBid Bond Bank Guarantee Form; Performance Bond (Performance Security); Documents Establishing Bidder’s Qualifications; Trading Company’s or Agent’s Qualification Statement; Manufacturer’s Qualification Statement Or Letter of Authority from Manufacturer; Letter of Statement Concerning Qualification; Certificate; Employees of the Company. Among which, the bidder shall furnish, as part for his bid, a bid security in (USD) in an amount of not less than x% of the Bid Sum. The Bid security shall be in the form of a certified cheque, a bank draft,

General Viewan irrevocable letter of credit or a guarantee from or a bond issued by an insurance company or bonding company likewise located. Bids must be submitted before the prescribed deadline, otherwise they will be returned unopened. When the bid is developed, it shall be submitted.

General View2 、 The general procedures of bidding 1) Preparation of bidding documents 2) Publicizing the Invitation for Bids 3) Preparation of Bids 4) Submission of Bids 5) Opening and Evaluation of Bids 6) Award

General View1) Preparation of bidding documentsBidding agent or the seller prepares a complete set of bidding documents, which include:（ 1 ） Invitation for Bids:（ 2 ） Instructions to bidders;（ 3 ） Schedule of Requirements;（ 4 ） Conditions of Contract;（ 5 ） Contract Form.Attachments, enclosed with the documents, include:

① Bid Form;② Bid Schedule of Prices;

General View③ Sheet of Component Parts;④ Specification Deviation Form;⑤ Bid Bond Form for Bid Security;⑥ Form for Performance Bond / Performance Security;⑦ Qualification Documents;⑧ Detailed Account of Spare Parts, Special Instruments

and Attachments;⑨ Technical Staff.

General View2) Publicizing the Invitation for Bids International bids can generally be divided into two kinds:

Open Bids or Unlimited Competitive Bids: The invitation for bids is publicized through proper media (newspaper, magazine, etc.) to inform all prospective bidders. All those who are willing to participate in the bids are welcome to submit their bids. Selected Bids or Limited Competitive Bids: The invitation for bids is only distributed to a limited or selected number of prospective bidders. Usually, a pre-qualification is involved to determine those potential bidders.

General View3) Preparation of Bids It is quite important that prospective bidders should have a pre-bid evaluation before they decided whether to participate in the bid or not. Once the decision is made, bidders must be careful in preparing the bid according to the requirements. Usually, a bidder needs to fill in the pre-qualification form, study the bidding documents, get a L/G and secure the necessary funds.

General ViewThe bid mainly contains the following:① Bid Form;② Bid Bond Bank Guarantee Form;③ Performance Bond / Performance Security;④ Documents Establishing Bidder’s Qualifications;⑤ Trading Company’s or Agent’s Qualification Statement;⑥ Manufacturer’s Qualification Statement Or Letter of Authority from

Manufacturer;⑦ Letter of Statement Concerning Qualification;

⑧ Certificate;⑨ Employees of the Company.

General View4) Submission of Bids It is vital for a bidder to deliver the bid at the appointed place on time. Late bids are always rejected and returned unopened.5) Opening and Evaluation of Bids The invitation for bids generally specifies the date, time and place for the opening. Then, the bids will be evaluated. The bidder evaluates and compares the tenders. The evaluation and comparison shall be based only on the “Basic” offer to determine the lowest evaluated bidder for award of the Contract.

General View6) Award After the evaluation, an award will be made to the bidder who offers the most favorable bid. The award is generally based on the price and the price-related factors included in the documents.

Guideline for writing3 、 the writing strategy in Bidding Essentially, the first step for bidding is to publicize or send the Invitation for Bids. Accurate information concerning bidding should be promptly presented to prospective

bidders. To ensure this, the Invitation for Bids always follow the fixed pattern. The Invitation for Bids contains four or five sections.

Guideline for writingPart I: The heading part includes name of tendering agent, its nationality and address, and relevant country; name of the project; Bid No. Loan No.. For example:

The People’s Republic of ChinaChina International Tendering Corporation

Notice of Invitation for BidXXX Project

（ Loan/Credit No: xxxBid No: xxx ）

Guideline for writingPart II This part introduces the specific project in bidding, including description of Works, and source of funds.For example: The People’s Republic of China has applied for a loan and credit from the World Bank towards the cost of XXX Project. It is intended that part of the proceeds of this loan and credit will be applied to eligible payment under various contracts for xxx. Tendering open to all bidders from eligible source countries as defined under

Guideline for writing

the “Guidelines for procurement” of the World Bank. XXX Company now invites sealed tenders from pre-qualified bidders for provision of the necessary labor, materials, equipment and services for the construction and completion of the project.

Guideline for writingPart III This part concerns the following issues: when and where Bid documents are available and the payment for them. For example: Pre-qualified bidders may obtain further information from xxx, and inspect the tender documents at the office of xxx. A complete set of tender documents may be obtained by any pre-qualified bidder for the cost of RMB xxx or US$ xxx on the submission of a written application to the above.

Guideline for writingPart IV This part contains the deadline for receipt of bids, amount of Bid Bond, and when and where Bids will be opened in public. Example 1: All tenders must be accompanied by a Tender Security in an acceptable form and must be delivered to XXX Company at the above-mentioned address on or before xxx. Tenders will be opened in the presence of those bidders’ representatives who choose to attend at xxx(time)

Guideline for writingExample 2:Example 2: All bids must be accompanied by a bid security of 2% of the bid price, and must be received by China National Industrial Machinery Import & Export Corp, at or before 10:00 a. m. (Beijing Time) on December 18, 2000. Bids will be opened by CMC in public at 10:00 a. m. (Beijing Time) on December 18, 2000 at the following address:The Negotiation BuildingErligou, XijiaoBeijing, ChinaBidder may send representative to attend the bid opening ceremony.

Guideline for writingPart V The ending part states the specific address of tendering agent and the person in charge ； zip code; telephone number and fax number. For example: Detailed address: The International Tendering Company of China National Instruments Import & Export Corporation Room 10529, Xiyuan Hotel （ Tower ）， Beijing Fax ： 8317359 Tel: (010) 8373388 ext. 10529, 8354506

Specimen- 1 （ Invitation for Bid ）The People’s Republic of China

China International Tendering CorporationNotice of Invitation for Bid①

XXX Project（ Loan/Credit No: xxx Bid No: xxx ）

The People’s Republic of China has applied for a loan and credit from the World Bank towards the cost of XXX Project. It is intended that part of the proceeds of this loan and credit will be applied to eligible payment under various contracts for xxx. Tendering open to all bidders from eligible source countries as defined under the “Guidelines for procurement” of the World Bank. XXX Company ②now invites sealed tenders from pre-qualified bidders for provision of the necessary labor, materials, equipment and services for the construction and completion of the project.③

Pre-qualified bidders may obtain further information from xxx, and inspect the tender documents at the office of xxx. A complete set ④of tender documents may be obtained by any pre-qualified bidder for the cost of RMB xxx or US$ xxx on the submission of a written application to the above. All tenders must be accompanied by a Tender Security in an acceptable form and must be delivered to XXX Company at the above-mentioned address on or before xxx. Tenders will be ⑤opened in the presence of those bidders’ representatives who choose to attend at xxx (time).The Pre-Tender meeting will be held on xxx at the following address: xxx.⑥

Specimen- 2 （ Invitation for Bid ）• UGANDA WILDLIFE AUTHORITY • HEADQUARTERS, PLOT 7 KIRA ROAD KAMWOKYA • P O Box 3530, Kampala Uganda • Invitation for Bids • Protected Areas Management & Sustainable Use Project (PAMSU) • Supply, Installation & Commissioning of Radio Communication Equipment for

Uganda Wildlife Authority Protected Areas. • Credit No. 3690 – UG. • 1. This invitation for bids follows the general procurement notice for this

project that appeared in the Development Business Magazine issue number 601 of February 2003.

• 2. The Government of the Republic of Uganda, represented by the Ministry of Tourism, Trade & Industry (MTTI) in particular the Uganda Wildlife Authority has received a credit from the International Development Association towards the cost of Protected Areas Management and Sustainable Use project, and it intends to apply part of the proceeds of this credit to payments under the contract for Supply, Installation and Commissioning of Radio Communication Equipment for Uganda Wildlife Authority Protected Areas.

• 3. The Executive Director, Uganda Wildlife Authority on behalf of the Permanent Secretary, Ministry of Tourism, Trade and Industry now invites sealed bids from eligible bidders for the Supply, Installation and Commissioning of Radio Communication Equipment for Uganda Wildlife Authority Protected Areas.

• 4. Bidding will be conducted through the International Competitive Bidding (ICB) procedures specified in the World Bank’s Guidelines - Procurement under IBRD Loans and IDA Credits, dated January 1995, revised January and August 1996, September 1997, and January 1999 and is open to all bidders from eligible source countries as defined in the guidelines.

• 5. Interested eligible bidders may obtain further information from and inspect the bidding documents at the addresses given below during working days from 0900 hrs to 1500 hrs.

• The Executive Director • Uganda Wildlife Authority Uganda Wildlife Authority HQs • Plot 7, Kira Road, Kamwokya • P.O. Box 3530, Kampala, Uganda • Tel: 346 287 / 346 288 / 346 651 • Fax: 346 287/346289 • Email: uwa@uwa.org.ug • 6. A complete set of bidding documents in English may be purchased by

interested bidders on the submission of a written application to the address below and upon payment of a non-refundable fee of US$ 100 (One hundred US Dollars) or its equivalent in a freely convertible currency, to cover cost of bid documents only). The method of payment will be by cash or Banker’s cheque to Address above.

• 7. Bids must be delivered to the address below at or before 13th September 2006 at 10.00 am. ， local time. All bids must be accompanied by a bid security of US$ 20,000= in form of a Bank Guarantee. Late bids will be rejected. Bids will be opened immediately thereafter in the presence of the bidders’ representatives who choose to attend, at 10.15 am local time at

• Office of the Executive Director • Uganda Wildlife Authority • Plot 7, Kira Road, Kamwokya • Kampala• Resource: http://www.uwa.or.ug

Specimen -3 (Giving up submitting a Bid by Fax)To: GALL Petroleum DevelopmentAttn: Mr. T. Smith or Head of Contract and SupplyFrom: David Wang. General ManagerDate: 05-20-2012Dear Sirs,Re: Invitation to tender-Tender No. WH-225 Tender Title: Supply of wellhead We apologize you for we’ll call off our intend to submit a tender to Tender No. WH-225 SUPPLY OF WELLHEAD on account of our equipment of wellhead was sold out recently.We apologize again for any inconvenience.

Yours Sincerely, David Wang

Specimen – 4 (Agreeing to submit a Bid by Fax)To: GALL Petroleum DevelopmentAttn: Mr. T. Smith / Head of Contract and SupplyFrom: Hubei Far East Oil Tools Ltd David Wang / General ManagerRe: INVITATION TO TENDER-TENDER NO. No. WH-225Date: 05-20-2012Dear Sirs,We acknowledge receipt of your Invitation to Tender Documents for the above and we agree to maintain confidentiality in regard to the Invitation to Tender and the contents thereof.We confirm we intend to submit a bona fide Tender in accordance with all your requirements by the date and time stated in your letter of Invitation to Tender.

Our details are given below:Name: Hubei Far East Oil Tools Ltd.Address: Wuhan Petroleum Supply Base D2-1Wuhan, Hubei 430000 PRCTel No.: (027) 85766320Fax No.: (027) 8576608Contact person: David Wang / General ManagerPlease accept our best wishes for quick and successful completion to your planed program.

Yours truthfully,David WangGeneral Manager

Specimen- 5 (Covering Letter for Submission of Bid)Dear _________,The following represents ________ (company’s) item by item response to IFB No. : _______.The response documents consist of the following:1 、 Bidding documents（ 1 ） Bid letter.（ 2 ） Copy of Bid Bond.（ 3 ） Priced Bill of Quantity.（ 4 ） Response to Bidding Requirements, terms and conditions,

and technical specification.2 、 Qualification Documents3 、 Item-priced Bill ________ (company) is pleased to participate in this bid and is

desirous to supply its superior product to you for ___________.

Specimen- 6 （ Bid Form ）Bid

To:In compliance with your invitation for bid No. _________ for __________ (goods to be supplied ) for the ____________ Project, the undersigned representative (full name and title), duly authorized to act in the name and for the account of the Bidder (name and address of the Bidder), hereby submit the following in one original and five copies.

⑴ Schedule of Prices; ⑵ Schedule of Requirement; ⑶ Specifications Compliance Form; ⑷ Qualification Documents;

⑸ Bid Security in the amount of ___________ issued by ____________ (name of the issuing bank); ⑹ All documents required in response to Clause 11 and 12 of the Instructions to Bidders.

By this letter, the undersigned representative hereby declares and agrees:a) That the total bid price for the supply and delivery of the

Goods specified in the Bidding Document is RMB ________ (in words) or US $ _________.

b) That the Bidder will take the responsibility and obligation for accomplishment of the Contract in accordance with all provisions of the Bidding Documents.

c) That the bidder has examined in detail all the Bidding Documents including amendments (if any) and all information furnished for reference as well as relevant attachments and that he is perfectly aware that he must renounce all right of invoking ambiguities or misunderstandings in his respect.

d) That his bid is valid for a period of sixty (60) calendar days from the date of bid opening.

e) That in the event the bid is withdrawn after the time and date set for bid opening, within the period of validity his bid security shall be forfeited by the Buyer.

f) That he agrees to furnish any other data or information pertinent to his Bid that might be requested by the Buyer.

g) That all official correspondence pertinent to this bid shall be addressed to:

ADDRESS: ___________TELEPHONE NO. ___________FAX NO. ___________NAME OF REPRESENTATIVE OF THE BIDDER:_______________ADDRESS: _______________OFFICIAL SEAL: _______________

Specimen- 7 （ Bid Bond ）Dear ________:Bid bond for Bid No. ________This bond is hereby issued to serve as the bid bond of _________ (company)

(hereinafter referred to as the Bidder) for Bid No. _______ for supply of ___________ (equipment) to ___________ (company).

The Bank of ________, as entrusted by _________ (bank), hereby unconditionally and irrevocably guarantees and bind itself, its successors and assigns to pay you immediately without recourse, the sum of US dollars…upon receipt of your written notification stating any of the following effects:

1. The Bidder has withdrawn his bid after submission of the bid and before the expiration of its validity period, or,

2. The bidder has failed to enter into contract with you after notification contracts awards, or,

3. The bidder, as successful bidder, has failed to establish an acceptable performance bond within ________ (number) calendar days after the effective date of the contract.

• It is fully understood that this guarantee takes effect from its issuing date and shall remain valid until ______ (date) and during the period of any extension thereof that may be agreed upon between you and the Bidder with notice to the surety, unless sooner terminated and / or released by you.

• Notwithstanding anything to the contrary, if the Bidder is awarded the contract, this guarantee shall remain in full force and effect after expiration of the above-mentioned period until the Bidder shall have entered into contract with you and furnished the necessary performance bond.

• Sincerely yours,

Specimen- 8 (Notice of Award)Awardee: Water Quality Systems, Inc.2928 Timberview Dr.Cincinnati, OH 45211-1919

Note: This awarded as a TOTAL SMALL BUSINESS SET- ASIDEAwarded $1,414,860.44 on 2008/04/01Contact: Deanna Kokocha, Contracting Specialist, Phone 937-522-4520, Fax null, Email:deanna.kokocha@wpafb.af.mil

Specimen- 9(Accept a Tender)September15, 2012

Dear Sirs,Thank you for submitting a bid for repair work to our four buildings. We were very impressed by the price and quality of your work, and your enthusiastic references clinched the deal.As a result, we have decided to award our repair contract to Oriental Building Services. As we discussed, you are to commence work on October 5 and complete as-needed work by January 10.

Enclosed is a check for $4,500. As our contract stipulates, you will receive an additional $5, 000 upon completion of the wall repairs and $35, 000 when the parapets have been rebuilt.I am looking forward to working with you in the months to come.

Sincerely,

Philip Yang

Specimen – 10 (Decline a Bid)September16, 2012

Dear Sirs,Thank you for the quotation you submitted to us for our bid for No.CT-608. We appreciate the time you took to participate in the bid and the thoroughness of your bid.However, we have decided to give this contract to The Capital Group Services. While your price was attractive and your references were good, The Capital Group Services’ larger staff enables it to better accommodate our tight schedule.We appreciate your interest and would welcome receiving your bid on future jobs.Sincerely,Philip Yang

KEY TO UNIT FOURTEEN

KEY TO UNIT FOURTEENI. Correct the mistake in each of the following questions. 1. Tenders will be opened in the presence of those tenderers’

representatives2. a tender security in USD in an amount of not less than 2% of the

Tender Sum.3. abroad to participate in the tender for the construction 4. All bid documents are required to be formally signed originals 5. The result of the tendering is that the contract is awarded to ABC

Corporation which made the second lowest bid, but not to XYZ Corporation

II. Translate into Chinese• 1. 希望投标者认真阅读投标文件包含的各项内容。投标者要承担因不遵守文件规定导致的风险。 不符合文件规定要求的标书将被拒绝。• 2. 投标者应随其标书提交一份美元投标保函，金额不少于投标价格的

2% 。• 3. 投标者用以兑换货币的汇率为提交标书最后日期前 xxx 天当天中国银行公布的官方卖出价。如果某种货币的汇率未公布，投标者应提供汇率并说明其来源。投标准备中使用的汇率适用于合同期的支付。• 4. 投标者在提交标书后可对其进行修改或撤消， 只要修改文件和撤标通知在提交标限前送达 xxx 。• 5. 在收到接受证书后 xxx 天内， 成功投标者应按合同条款想业主提交一份保函，保证将执行合同。保函可以使用投标文件中提供的格式，也可使用其他业主接受的格式。

III. Draft an ad inviting bids for a purchase with these particulars.• Harbor Administration• No. xxx Street• Tel• Fax• We invite bidders who are registered in the Administration of Industry & Commerce to

participate in the bid for the construction of a new harbor located at xxx. General terms and conditions together with the blue prints and technical requirements can be obtained from the Business Department of the Harbor Administration against payment of $ xxx for each copy.

• All offers are to be sent to the above department at No. xxx, xxx Street, xxx, marked with the name and number of the bid at or before 12.00 hours of Friday, 11 April, 2008.

• Offers should be accompanied by preliminary guarantee issued by Bank of xxx, equal to not less than 5 per cent of the value of the offer.

• Any offer submitted after the closing date of the bid, or which does not comply with the above terms, will not be accepted.

• This Administration does not bind itself to accept the lowest or any other offer.• Foreign companies who have no local agents shall be exempted from the conditions stated in

the first paragraph above.• Bid will be opened formally at 2: p.m., 8 October, 2008 at Wuhan xx hotel.