The path to contract award – Part Two

See Part 1

The story continues…..

A rooster woke me up at dawn. I immediately got out of bed and prepared for the second day of our evaluation exercise.

I called Diana, the receptionist who told me that breakfast would be served down stairs, adjacent to the lounge. I followed Diana’s instructions and found my colleagues having breakfast.

“Are you having a good morning, Malcolm?” I inquired.

“I must have heard a lot of wine last night,” He responded. “I will have to spend the rest of the day detoxing.’ he added.

When I had finished serving my glass of milk, I sat near Malcolm and our discussion resumed…

3.4 Team selection, venue and method adopted for the evaluation

The client assembled a team of six individuals to take part in the evaluation of the bids. I was nominated by the team of consultants to assist the entity with the evaluation process. The client’s team comprised two senior directors, two middle managers and two junior officers. At the time, I did not bother to ask how competent they were but the team seemed to comprise a good mix of youth and experience.

We were booked into a venue like this one and given one week to complete the evaluation process,  which was carried out in two stages.

1. Stage one – the preliminary evaluation and
2. Stage two – the post-qualification evaluation

In the preliminary stage, the bids that did not meet the set criteria of technical requirements were eliminated. In the post-qualification stage, the bids that passed the preliminary evaluation stage were carried forward and considered for further scrutiny.

At the post-qualification stage, a bid with the lowest price is given first priority. Should the lowest-priced bid fail to pass any of the evaluation criteria at the post-qualification, the bid is disqualified and the evaluators proceed to the next lowest-priced bidder.

3.5 The preliminary evaluation stage

We all took turns to look through each bid and after two days, we convened a meeting to agree on the firms to eliminate from the first stage of the evaluation exercise.

Out of the seven firms that had expressed interest in executing the works, the client’s team unanimously agreed that only three bids should be carried forward for further scrutiny at the second stage (the post qualification stage). These were (i) CGV, (ii) SG and (iii) AWE. In descending order of price, the ranking was as follows.

1. AWE – US$ 750
2. CGV – US$ 748
3. SG – US$ 690

Before we commenced the post qualification stage, I sensed that there was a lot of divergent opinion about some of the firms that had been dropped at stage one. In my position, I could only advise because ultimately, the client picks their preferred service provider.

Before we commenced the post qualification stage, I sensed that there was a lot of divergent opinion about some of the firms that had been dropped at stage one. In my position, I could only advise because ultimately, the client picks their preferred service provider

At some point, one member of the evaluation team proposed that the list of three firms be increased to four. His reasons were that the next firm in line was an experienced company and they should not be eliminated simply because they had missed certain key documentation in their bid; arguing that work is not done by documents but by machines and human beings.

Even though this was a good suggestion, it would mean that the evaluation team would virtually have to waive certain criteria for all the firms under consideration at the preliminary stage and this was not possible.

This divergence of opinion delayed the start of the second stage of the evaluation process by approximately three days.

3.6 The post-qualification evaluation stage

At this stage of the evaluation, the stakes were higher. We began our evaluation on the lowest-priced bid i.e. SG.

Post-qualification evaluation for SG

SG met all the evaluation criteria and a final bid evaluation report was prepared (in their favour) for submission to the development partner. I got to learn that before this report was formally submitted to the development partner, the Project Lead at the financing agency received an anonymous phone call informing them that the bidder about to be awarded the contract had misrepresented their specific and general construction management experience.

I got to learn that before this report was formally submitted to the development partner, the Project Lead at the financing agency received an anonymous phone call informing them that the bidder about to be awarded the contract had misrepresented their specific and general construction management experience

While the client was concluding a due-diligence exercise on SG, the development partners received a hard copy of another anonymous communication (communicating the same matter as had the phone call). The client’s due diligence on SG was sanctioned to confirm whether the company had carried out the construction works that they had stated in their bid.

I did not participate in the due diligence exercise but I was privy to the findings from the team that carried out the assignment. It turned out that SG had misrepresented their specific and general construction management experience, and they were disqualified.

It turned out that SG had misrepresented their specific and general construction management experience, and they were disqualified

We proceeded to evaluate the next lowest priced bid, CGV, but by this point we had to check out of the hotel and re-constitute ourselves at a different location to continue with the exercise.

Post-qualification evaluation for CGV

Unknown to some of the members of the evaluation team was the significance of the disqualification of SG from further participation in the evaluation exercise. This decision set in motion a series of events that I will never forget.

Unknown to some of the members of the evaluation team was the significance of the disqualification of SG from further participation in the evaluation exercise. This decision set in motion a series of events that I will never forget

During our detailed evaluation of the bid for CGV, a harrowing string of anonymous letters were sent to the Chief Executive Officer of the entity and the Project Lead at the financing agency, insinuating that CGV did not have the competence to execute the scope of work.

‘From where do you think these anonymous letters came?’ I asked.

‘They must have come from an agent of SG,’ replied Malcolm.

A battle ensued between CGV and SG, each fighting the other and exposing all the dirt that they could each get their hands on.

“How did these companies get to learn what was going on. I thought the evaluation team was leak- proof?” I inquired.

“I was not surprised, and you should never be. The members on most evaluation teams (like you and I) are selected to take care of a number of interests. You can only suspect who has leaked the information but most of the times you cannot be absolutely sure,” Malcolm responded.

I was not surprised and you should never be. The members on most evaluation teams (like you and I) are selected to take care of a number of interests. You can only suspect who has leaked the information but most of the times you cannot be absolutely sure. 

Ignoring the anonymous letters, the client finalised what they thought was their final bid evaluation report (now in favour of CGV) and submitted it to the development partner. The development partner reviewed the report, found the client’s decision to award the contract to CGV a bit suspicious and verbally rejected the award decision.

The client tried to put up a defense in favour of CGV but it was clear that the development partner was unwilling to yield to the client’s award decision. At this stage of the evaluation process, it was about 8 months from the date of tender announcement and an award decision had not yet been reached.

From seven bidders, we were now down to one final bidder and the reality that a re-tender was eminent finally set in. Fearing the worst, my employer re-assigned me to a new assignment because my company realised it prudent for us not to take any further part in the evaluation process.

Fearing the worst, my employer re-assigned me to a new assignment because my company realised it prudent for us not to take any further part in the evaluation process

Post-qualification evaluation for AWE

Fortunately, AWE met all the evaluation criteria and after a successful due diligence exercise had been carried out by the client, the development partner approved the decision of the evaluation team to award the contract to AWE.

3.7 The contract award

Prior to contract signature, agents of SG had tried to ensure that the entire process collapses and a re-tender is announced. They lost that battle.

Ten months after the tender was announced, and when it was clear that a re-tender was not desirable for all parties involved, the contract was signed between AWE and the client in a closed-door ceremony.

We continued with our evaluation exercise and then broke off for lunch to resume our discussion.

When I was notified by the head of the evaluation team that the contract was awarded to AWE, I was relieved. From this experience, there are five important lessons to learn especially for a young man like you. They will be helpful in future.

I picked my notebook and began taking notes.

1. You have to undo the veil – The bid for SG was excellently prepared. At first glance, you could not detect that they had misrepresented their experience but thanks to a thorough due diligence exercise, they were eliminated from the evaluation.

   Also, beware that due diligence can reveal certain facts about your potential contractor that you might have not wished to know; complicating your award decision further.

2. A unanimous decision is not necessarily a right one – The decision to eliminate four companies at the preliminary evaluation stage was a very risky one. If the contract had not been awarded to AWE, a re-tender was eminent and we would not be able to reverse our earlier decision.

   Your aim should be to find a contractor with the best technically and financially responsive bid to execute the works, mindful of the fact that when this is not possible, a re-tender is eminent.

3. Conflict of opinion – Try to keep the evaluation committee as small as possible because the exercise can turn out to be a battle of opinions. Today, I still believe that we should have taken forward at least four companies to the post-qualification stage.

4. Finish off the evaluation process as quickly as possible – delays only create too much anxiety amongst the bidders.

5. It is crucial to build capacity for future decision-making – some entities include people like you on the evaluation teams as a means to build your capacity to be able to make certain key decisions in future. I would have been very unhappy if our own evaluation committee did not have a blend of experience. Count yourself amongst the fortunate.

Now, let us try to conclude this evaluation exercise. I hope you have learnt something and I believe that we will finally select a company to execute your project.

“Thank you, Malcolm”

“You are welcome, Cyrus”

The Builders’ Garage 2017. Permission to use this article or quotations from it is granted subject to appropriate credit being given to thebuildersgarage.com as the source.

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