Issue Date: 
Monday, October 26, 2015

3 unforgivable mistakes when responding to a Bid

We had the privilege to be part of an Evaluation committee for a Government Entity that put out an Invitation to Bid. The Bid was for a fairly technical service and therefor the response to the bid was poor. In fact there were only ten responses to the Invitation to Bid.

Upon opening and evaluating these bid responses the importance of a proper understanding of tender or bid responses was obvious. The basic mistakes that were made are unforgivable. These were amateur mistakes made by so-called experts in the tender environment, and making them could lead to the immediate disqualification of your bid response.

During the evaluation of the abovementioned bid responses these three unforgivable mistakes were made :

  • No bid price - if you do not provide a price for the product or service that you are going to supply then you will be disqualified. Government uses the Preferential Point System to determine a winning bid and the two pillars of the Preference Point System is Price and B-BBEE - not providing a price is detrimental to your bid response.
  • Bid price is too high or too low - it might sound absurd that having the highest or the lowest bid price can disqualify you but if the average price of all the responses are R24,000,000-00 and your price is R2,500,000-00 or R70,000-00 then there is obviously something wrong. When responding to a tender familiarise yourself with exactly what the Purchaser wants to procure and at what cost.
  • Correct Compulsory Documents - when responding to a bid ensure that you have attached all the Compulsory documents that the Government Entity has requested. There are reasons why they want to see your B-BBEE certificate or the Annual Financial Statements. Ignoring the request for Compulsory documents can lead to your bid response being disqualified.

The effect of these three mistakes made by the responders to the bid evaluated was that five of the ten bids were disqualified. The responders of this bid had a one out of ten chance to be successful but instead they got instantly disqualified.

The one common element we see when evaluating bid responses is that people who complete the bid responses are careless by not reading the bid document carefully to ensure that nothing is omitted.

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Brand new Preferential Procurement Regulations 2017 for Tenders

The brand new Preferential Procurement Regulations 2017, has been finalized and was gazetted on 20 January 2017. There are some interesting changes and challenges that we will discuss during the coming months. This is the official media release from National Treasury:

The regulations were initially promulgated in 2001 and revised in 2011 thus making this the second revision since the initial promulgation.

The revision of the Preferential Procurement Regulations of 2011 was largely influenced by the need... Read More

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