Bid Evaluation and Award in Asset Recycling

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On this page: Find Find details on bid evaluation and award for an asset recycling transaction. Read more below, or visit the Guidelines for Implementing Asset Recycling Transactions section and Content Outline, or Download the Full Report.
Bid submissions will be evaluated against the following considerations:
Assessment of the financial proposition in each bid is a key component of the evaluation. Depending on the transaction, financial considerations (highest bid or highest net financial benefit) may be the sole evaluation criteria. In this case, bids that qualify based on technical parameters are assessed individually and compared to one another. In other cases, the financial considerations are only one element of a balanced holistic evaluation process. Non-financial aspects of a proposal are allotted certain weightage based on the specific requirements of the operational and performance aspects of the asset. Weighted scores are computed for all the bids to calculate an overall score comprising of both the financial and technical scores. The submission of a weighted technical and financial score is used to arrive at the ranking of bidders. Where the successful bidder is to pay the Relevant Authority an upfront concession fee for the right to manage and operate the underlying asset, this amount will be the main subject of the evaluation. However, given the long-term nature of such an arrangement, it is important that the Relevant Authority reviews bidders’ proposals to ensure that matters like service quality and financial sustainability can be maintained over the term of the project. The financial model provided by bidders should be reviewed to assess the financial sustainability of the bidder’s proposal. Sensitivity should be conducted to ensure minimum service standards and any future capital investments can be sustainably met over the project term. The financial evaluation of bids requires a well-structured approach and careful consideration of the risks to the Relevant Authority. Bids can easily be misinterpreted due to risks not adequately identified which can lead to the Relevant Authority being exposed during final negotiations. The financial evaluation process should focus on each element of the financial template (such as forecasted costs, financing structure etc.) and assess the reasonableness of each major driver. The outcome of this detailed review will enable the procurement team to have an opinion on: Evaluation of issues concerned with non-financial matters are potentially more difficult to deal with than financial issues. This reflects the more subjective nature of the evaluation of areas such as service delivery and maintenance and operations of the infrastructure. The key principle that shall be applied in evaluating the non-financial components of bids is to focus on the outputs being sought by the bid process, rather than inputs, and examine the risks to the Relevant Authority over the life of the project, rather than focusing on the short-term. For example, the infrastructure evaluation should consider the ability of a bidder to improve the operational and financial performance of the infrastructure asset over the life of the contract and innovations and efficiencies that can be implemented to increase service quality or capacity or to provide enhancements to the asset to become a green infrastructure asset. The bids will be reviewed against criteria such as technical capabilities, service quality innovations, approach to routine and lifecycle maintenance, and environmental considerations. The weighting accorded to each criterion should be determined prior to the evaluation process. Bids can be analysed, differentiated and ranked against the following: Integrating climate resilience generally incurs an additional cost for potential bidders, both in developing their proposals and potentially in the final cost of the project. This could put them at a competitive disadvantage relative to the bidders that choose not to integrate this factor if the benefits of increased resilience are not fully considered in the procurement process. [OEDC, 2017]. Bidders’ proposal for the Asset should be evaluated qualitatively and quantitatively (when possible) in terms of the following aspects: Ensure that the process of evaluating tenders accounts for resilience benefits, including by considering net benefits over the life of the asset, rather than the term of the contract [OECD, 2018]. Service delivery is at the heart of the evaluation. The key questions to be answered are whether the infrastructure asset will be operated satisfactorily, remain available reliably throughout the duration of the project term and whether it will deliver services to the required specifications. The scope of service delivery will vary considerably between different assets. Consequently, there will be a need to have, in the evaluation team (the tender committee), both experience in the particular area of service delivery and also a readiness to accept new approaches. A variety of techniques of evaluation could be employed across the range of projects. Primarily the need is to evaluate three (3) non-financial aspects of the bids – (a) the service that is offered; (b) the capability of an operator to deliver that service, and (c) the reliability of delivery over time. These are outlined below: After the evaluation process is concluded, the tender committee will present the findings in an evaluation report. The report should follow the agreed evaluation methodology and criteria outlined in the RfP. The evaluation report should provide a ranking of the bidders and recommend the preferred bidder. If several sub-tender committee teams are involved (e.g. technical, financial etc.), the report will provide a joint view from these evaluation teams. The report will discuss rankings within each area of evaluation, the weighted average ranking and the basis of the team’s agreement on the preferred bidder. The evaluation report will focus on determining the following: Based on the evaluation reports, the bidders should be ranked, and a single preferred bidder should be identified. The ranking should be made in accordance with the evaluation criteria described in the RfP document and should be prepared in a format that promotes transparency in the bidding process. Moreover, if any aspects of the bid submission were technically non-compliant with the RfP, the ranking documentation should note the non-compliance and whether the non-compliance was being waived as immaterial. Contents of the ranking documentation should ordinarily include the numerical point scores and any qualitative comments for each evaluation category. Raw numerical point scores should be presented before any weighting or adjustment in accordance with the evaluation procedure, and any weighting should be made in the manner agreed as part of the evaluation methodology. Criteria and/or methodology should not be altered at this stage, as doing so can suggest bias in favour of one bidder. The ranking and score of the bidders should be publicly announced. The background documentation and evaluation reports should be kept confidential in the first instance but should be retained in the event that the tender results are challenged and/or the process is subject to third party evaluation or investigation. Following the evaluation report, the finalization of the selection of the preferred bidder will commence. If a single bidder cannot be identified after evaluation, the Relevant Authority should consider shortlisting the top two ranking bidders and undertaking a structured negotiation/optimisation process, where a greater level of interaction is required, to address the outstanding issues.Financial Considerations
Technical Evaluation
Climate Resilience, Environmental, and Social Evaluation
Service Delivery Evaluation
Evaluation Reports
Rank Bidders
Select Preferred Bidder
Related Content
The Guidelines have not been prepared with any specific transaction in mind and are meant to serve only as general guidance. It is therefore critical that the Guidelines be reviewed and adapted for specific transactions To find more, visit the Guidelines to Implementing Asset Recycling Transactions Section Overview and Content Outline, or Download the Full Report.