Tender Evaluation Phase:

Is made to determine and make award recommendation for the least evaluated bidder using
preliminary and detail evaluations. The recommended winner may or may not necessarily be
the lowest bidder. Factors such as technical qualification, completion time, commercial terms
of the offer, etc are used in determining the least evaluated bidder.
Preliminary Evaluations (often called Mandatory Criteria, Pass/Fail Gates, or
Conditions for Participation) are the initial, binary checks that a tender response must pass
before it is considered for the full, detailed technical and commercial evaluation.
Think of them as the bouncer at the door of a club. If you don't meet the basic entry
requirements (e.g., the right dress code, being on the guest list), you don't get in, no matter
how great you are.
The purpose is to quickly and efficiently filter out proposals that are:
 Non-compliant: They haven't followed the basic instructions.
 Ineligible: The bidder does not meet the fundamental legal or qualification
requirements.
 Unsuited: The bidder lacks the absolute minimum capability to perform the contract.
Treat Preliminary Evaluations with the utmost seriousness. They are the first and most
critical hurdle. A brilliant technical solution and a competitive price are completely worthless
if your proposal is disqualified at this first stage for a simple administrative error.
Eligibility Requirements: Tenders are subjected to eligibility qualifications before they enter
to bid and their respective evaluations. Most often sited issues considered in eligibility
requirements are
 These eligibility requirements together with basic alterations of the conditions of the tender
will be considered for responsiveness or not. If the bidder offer provided weighs a major
deviation from the tender condition, the tender will be considered non - responsive and could
not be further considered. But if it is minor deviation, either the procurement team use their
discretionary power to request clarification or the case will be recorded and taken up during
negotiation if the respective winner become the least evaluated tender. When the first
approach is chosen, the bidder is not allowed to change any information that can substantially
affect the tender evaluation. For guideline during tender evaluation; table - outlined when a
tender is considered major deviation or not.
A Major Deviation changes the fundamental rules of the game. It cannot be corrected or
waived without undermining the fairness and integrity of the entire tender process.
A Minor Deviation is a technicality or a minor oversight that doesn't harm the project's
objectives. The bid can often be clarified or accepted, sometimes with a simple written
confirmation from the bidder.
Major Deviations Minor Deviations
 Affecting the validity of the bid  Do not affect the triple constraints of the
 Rejection or Disqualifying conditions project
stated  Do not result in change of Bid Price
 Substantial effect on the Bid Price  Non conditional tenders

Arithmetic Review: Most tenders are often submitted hastily. As a result, tenders are not
arithmetic error free. If tenders are processed without arithmetic checks, on the first place
tenders are not evaluated on the bases of equal merits and if they become binding contracts
being over-sighted, they will be the cause for potential disputes. Therefore, it is a formal
evaluation process to review arithmetic’s before carrying out detail evaluations. Arithmetic
review can be done if and only when financial proposals are opened.
Detail Evaluations include Technical, Commercial and Financial Qualification requirements.
Evaluations at this stage should first and foremost critically see the technical and commercial
offers and establish system that can ensure common bases for comparison. Finally, the
financial offer will be updated using Absolute Results from Commercial comparisons
 Technical Requirements:
This is a pass/fail or minimum-score gate. The goal is to eliminate any bidder who does not
have the fundamental capability to perform the work.
 What is assessed: The bidder's proposed methodology, team qualifications,
experience, equipment, and quality/safety plans.
 The "Critical" Review: Evaluators don't just check boxes; they critically assess if
the proposal is realistic, efficient, and demonstrates a deep understanding of the
project's challenges.
 Outcome: Only bids that are deemed "technically compliant" or that score above a
minimum technical threshold (e.g., 70 out of 100 points) proceed to the next stage.
Technically weak bidders are rejected, and their financial offers are not even opened.
Example: For a dam construction project, a bidder might be rejected at this stage for
proposing an inexperienced project manager or an unsafe construction methodology, even if
their price is the lowest.
Commercial Evaluation: This includes Benefit Forgone due to Completion Time;
Additional Costs due to differences in Foreign Currency Exchange and Advance
Payment requirements; and Provisions of Domestic or Regional Preference Margins.

 Benefit Forgone due to Completion Time

When tenders are offered with different completion times, comparisons are made to
determine the benefit forgone taking into account the least acceptable completion time as a
basis for competitions. The Benefit Forgone (BF) due to additional completion time can be
computed using the following expressions:
BF = (FV – TO) / (1 + i)n; FV = TO (1 + i)n
TO = Tender Offer after Arithmetic Check; n = Completion time in days
i = Discount Rate = 0.05 % per day = 1.5 % per month; FV = Future Value
Core Concept: Time is Money
The fundamental idea is that a project finished later has less economic value to the client than
the same project finished earlier. The "Benefit Forgone" (BF) is the financial quantification
of that lost value.
 Why is earlier completion better? The client can start using the asset (a road, a
factory, a building) sooner, generating revenue, reducing costs, or providing public
benefits earlier.
  The "Discount Rate" (i): This is the rate used to calculate the present value of future
money. It reflects the client's cost of capital or the rate of return they could expect
elsewhere. A rate of 0.05% per day (which compounds to about 1.5% per month) is
typical for large projects where delays are very costly.

The Methodology in Practice

The process involves comparing all bidders against a common baseline.
Step 1: Establish the Baseline
The "least acceptable completion time" (or sometimes the fastest offered time) is set as the
baseline. Let's call this baseline period n base.
Step 2: Calculate the Future Value (FV) of Each Tender
This calculates what the tender offer would be worth at the end of the project's lifespan, if the
money were invested instead.
 Formula: FV = TO * (1 + i)^n
 TO (Tender Offer): The bidder's corrected price after arithmetic check.
 i (Discount Rate): 0.05% per day (0.0005 as a decimal).
 n (Completion Time): The number of days the bidder proposes.
Step 3: Calculate the Benefit Forgone (BF) for Each Bidder
This is the most important step. It brings the Future Value of a delayed tender back to the
baseline completion date, showing the effective cost of the delay.
Formula: BF = (FV - TO) / (1 + i)^n
A more intuitive and standard financial formula used for this is:
Adjusted Price = TO * (1 + i)^(n_bidder - n_baseline)
This second formula directly adjusts the tender price to reflect the delay compared to the
baseline.

Walk-through Example
Let's assume three bidders for a project where the client's baseline completion time is 300
days.
 Discount Rate (i): 0.05% per day (0.0005)
 Baseline Time (n_base): 300 days
Bidder Tender Offer (TO) Completion Time (n)
A $1,000,000 300 days (Baseline)
Bidder Tender Offer (TO) Completion Time (n)
B $980,000 330 days
C $1,050,000 270 days
Evaluation:
1. Bidder A (Baseline):
o Their price is the reference. No time adjustment is needed.
o Adjusted Price = $1,000,000
2. Bidder B (Delayed Completion):
o They are 30 days slower than the baseline (330 - 300 = 30).
Using the intuitive formula:
Adjusted Price = $980,000 * (1 + 0.0005)^(30)
Adjusted Price = $980,000 * (1.015113)
Adjusted Price ≈ $994,810
o Interpretation: Although Bidder B's initial price is $20,000 lower, the 30-day
delay costs the client an additional $14,810 in lost benefits (opportunity cost).
Their true evaluated price is $994,810.
3. Bidder C (Faster Completion):
They are 30 days faster than the baseline (270 - 300 = -30).
Adjusted Price = $1,050,000 * (1 + 0.0005) ^ (-30)
Adjusted Price = $1,050,000 * (0.985111)
Adjusted Price ≈ $1,034,367
o Interpretation: Bidder C's faster completion is a benefit gained. It effectively
reduces their high initial price. Their true evaluated price is $1,034,367.
Final Tender Ranking
Bidder Initial Price Adjusted Price (with Time) Rank
A $1,000,000 $1,000,000 2
B $980,000 $994,810 3
C $1,050,000 $1,034,367 1
Surprising Result: After the time adjustment, Bidder C, who had the highest initial price,
becomes the most economically advantageous offer due to their significantly faster
completion time.
o Foreign Currency Exchange requirements
When tenders have provisions to quote different currencies, their comparison will be made
based on determining their effects due to the additional cost incurred fro variations in
currency exchange requirements. It is then recommended to convert all tender prices into one
currency; often the Financiers’ or other widely used and accepted Currency called Common
Currency. For currency conversion, selling rates of Bank published by an official source and
applicable for transactions shall be used
Additional cost due to Foreign Currency Exchange requirements can then be determined
using selling rates at
 15 days prior to tender submission date
 Tender Opening Date
 Decision for Award or Expiry of Tender Validity date
Example Scenario: Road Construction in Addis Ababa
 Client: Ethiopian Roads Authority (ERA)
 Tender Submission Deadline: October 30, 2023
 Tender Opening Date: October 31, 2023
 Tender Validity Period: 120 days (Expires on February 27, 2024)
 Award Decision Date: January 15, 2024
 Bidder: "Global Construct PLC"
 Bid Price in Foreign Currency: $1,000,000 USD
 Currency of Bid Evaluation: Ethiopian Birr (ETB)
Date 1: 15 Days Prior to Tender Submission Date
 Calculation Date: October 15, 2023
 Logic: This is the rate the bidder likely used to prepare their cost estimates and their
internal financial calculations. It represents the market condition when they decided
on their price.
 Hypothetical Selling Rate: 1 USD = 55.00 ETB
 Converted Bid Price: $1,000,000 × 55.00 = ETB 55,000,000
Date 2: Tender Opening Date
 Calculation Date: October 31, 2023
 Logic: This reflects the exchange rate on the day the financial bids are officially
unsealed and become public to the evaluation committee. It shows the currency value
at the formal start of the evaluation.
  Hypothetical Selling Rate: 1 USD = 56.50 ETB (The Birr has weakened)
 Converted Bid Price: $1,000,000 × 56.50 = ETB 56,500,000
Date 3: Decision for Award Date / Expiry of Tender Validity
 Calculation Date: January 15, 2024 (Award Decision)
 Logic: This is the most important rate. It reflects the current cost to the government
at the time they are ready to sign the contract. If the Birr has weakened significantly,
the government will need to spend more Birr to buy the dollars needed to pay the
contractor. This "additional cost" is now a real liability.
 Hypothetical Selling Rate: 1 USD = 58.00 ETB (The Birr has weakened further)
 Converted Bid Price: $1,000,000 × 58.00 = ETB 58,000,000

Determining the "Additional Cost" and Final Evaluated Price

The "Additional Cost" is the difference between the price using the final rate (Date 3) and the
price using the initial baseline rate.
Which baseline rate is used (Date 1 or Date 2) will be explicitly stated in the tender
documents. Common practice is to use the Tender Opening Date (Date 2) as the baseline.
Let's assume the tender document states:
"Bids will be converted to ETB using the selling rate on the Tender Opening Date. Any
exchange rate fluctuation up to the Decision for Award date will be calculated as an
additional cost."
Calculation:
 Baseline Price (Tender Opening Date): ETB 56,500,000
 Current Price (Award Date): ETB 58,000,000
 Additional Cost due to Forex: ETB 58,000,000 - ETB 56,500,000 = ETB 1,500,000
Final Evaluated Price for Global Construct PLC:
The client will take the bidder's original price and add the additional cost to determine the
true financial impact.
Final Evaluated Price = ETB 56,500,000 + ETB 1,500,000 = ETB 58,000,000
This ETB 58,000,000 is the figure used to compare against other bidders.
Why is This Done? (The Implication)
1. Protects the Client's Budget: The Ethiopian government budgets in Birr. This
process ensures they are comparing tenders based on the current real cost, not a
historical, outdated exchange rate.
 2. Ensures Fairness: All bidders are adjusted to the same "current cost" basis,
regardless of when they submitted their bid. A bidder who submitted early is not
penalized if the Birr weakens later.
3. Reflects Economic Reality: In an economy with a depreciating currency, this method
prevents the award of a contract that is financially unsustainable for the client from
the outset.
o Advance Payment
When different amounts of advance payment are requested as part of the tender offer, one
could not directly evaluate the tender price and determine the lowest evaluated bidder. This
violates the principle of competition on the same bases. Therefore, the evaluation should take
minimum advance payment request as a basis and consider others for additional cost incurred
due to different mobilization advance requirements.

The Additional Cost due to differences in mobilization advance requirements can be

computed from the following expressions:

APAC = {(AP x TO) / 100} – PV; PV = A x PWF; A = {(20 / 100) x TO} / n; PWF =
{(1 + i)n – 1} / {i(1 + n)n}
AP = Advance Payment Requirement in %; TO = Tender Offer after Arithmetic Check;
i = Discount Rate = 0.04 % per day; n = Completion time in days
PWF = Present Worth Factor; PV = Present Value
Example
Imagine two bidders for a ETB 100 Million project:
 Bidder A: Price = ETB 100M, requests 10% advance payment (ETB 10M).
 Bidder B: Price = ETB 100M, requests 20% advance payment (ETB 20M).
While their prices are identical, Bidder B has a significant financial advantage. They get
twice as much interest-free money from the client at the start of the project. This extra cash
improves their cash flow and reduces their borrowing needs, which is a hidden financial
benefit.
Evaluating them based on price alone violates the principle of "common basis for
comparison."
The Solution: Quantifying the "Additional Cost"
The method you provided calculates the Advance Payment Additional Cost (APAC). This
is the financial cost to the client of providing a larger-than-minimum advance payment.
The logic is: The client's cost is the opportunity cost of parting with a larger sum of
money earlier. If the client didn't give this advance, they could have invested that money or
saved on interest.

Breaking Down the Formulas with an Example

Let's assume a tender with the following details:
 Discount Rate (i): 0.04% per day (0.0004)
 Baseline Advance: The minimum requested by any bidder is 10%.
 Completion Time (n): 500 days
Bidder X:
 Tender Offer (TO): ETB 80,000,000
 Advance Payment Request (AP): 10%
Bidder Y:
 Tender Offer (TO): ETB 78,000,000
 Advance Payment Request (AP): 20%
At first glance, Bidder Y is cheaper by ETB 2 Million. Let's see if that holds after the
advance payment adjustment.
Step 1: Establish the Baseline
The minimum advance requested is 10% (from Bidder X). This becomes the baseline. Any
advance above this will incur an "additional cost."
Step 2: Calculate the Present Value (PV) of the "Standard" Advance
The formulas define a "standard" advance repayment schedule. It assumes the advance is
recovered in equal installments over the project's duration.
Calculate Annual Recovery Amount (A):
A = {(20 / 100) x TO} / n
This formula seems to have a typo. It likely means the total advance is recovered over 'n'
days, not that 20% is used. A more standard approach is:
A = (Advance Amount) / n
Let's calculate the annual recovery for the baseline 10% advance:
Advance Amount = 10% of ETB 80,000,000 = ETB 8,000,000
A = 8,000,000 / 500 = ETB 16,000 per day
This is the theoretical daily amount being recovered from the contractor.
Calculate the Present Worth Factor (PWF):
PWF = {(1 + i)^n – 1} / {i(1 + i)^n}
This is the standard formula for the present value of an annuity.
i = 0.0004
n = 500
(1+i)^n = (1.0004)^500 ≈ 1.2214
PWF = (1.2214 - 1) / (0.0004 * 1.2214)
PWF = 0.2214 / 0.00048856 ≈ 453.08
Calculate the Present Value (PV):
PV = A x PWF
PV = 16,000 ETB/day * 453.08 days
PV ≈ ETB 7,249,280
This PV represents the value today of the stream of daily repayments for the 10% advance.
Notice it's slightly less than the ETB 8,000,000 advance because of the time value of money
(money today is worth more than money in the future).
Step 3: Calculate the Additional Cost for Bidder Y
Now we calculate the cost for Bidder Y, who asked for 20%.
Advance Payment Additional Cost (APAC) = {(AP x TO) / 100} – PV
1. For Bidder Y:
o AP = 20
o TO = ETB 78,000,000
o The first part of the formula is simply the advance amount: (20 * 78,000,000) /
100 = ETB 15,600,000
2. We need to calculate a NEW PV for Bidder Y.
o Advance Amount = 20% of ETB 78,000,000 = ETB 15,600,000
o A = 15,600,000 / 500 = ETB 31,200 per day
o PWF remains 453.08 (same 'i' and 'n')
New PV = 31,200 ETB/day * 453.08 days ≈ ETB 14,136,096
Calculate APAC for Bidder Y:
APAC = 15,600,000 - 14,136,096
APAC = ETB 1,463,904
Step 4: Adjust the Tender Prices and Compare
Bidder X Adjusted Price: ETB 80,000,000 (No extra cost, as they set the minimum advance)
 Bidder Y Adjusted Price: ETB 78,000,000 + ETB 1,463,904 = ETB 79,463,904
Final Evaluation Result
Bidder Initial Tender Offer Advance Request APAC Adjusted Price
X ETB 80,000,000 10% ETB 0 ETB 80,000,000
Y ETB 78,000,000 20% ETB 1,463,904 ETB 79,463,904
Conclusion: After a fair financial evaluation, Bidder Y is still the lowest evaluated bidder, but
their advantage is much smaller. The analysis correctly shows that their higher advance
request has a tangible cost to the client.

 Domestic and / or Regional Preference

Domestic or regional preference margin is a provision to give preference to local companies
even if their bid offer is not over by a percentage often equals 7.5 - 10 % for construction
works. This implies that domestic or regional companies can be awarded the tender even if
they are not lowest in tender price of the evaluated bidders using all the other criteria.
Domestic and/or Regional Preference is a policy where a government gives a price
advantage to local companies (or companies from a specific region) during the evaluation of
tenders.
The logic is that even if a local company's bid is slightly higher than an international
competitor, awarding the contract to them keeps money within the local economy, creates
jobs, and builds local capacity. The "price premium" is seen as an investment in national
development.

How It Works: The Price Margin

The tender documents will specify a preference margin, which is a percentage (e.g., 7.5% or
10% for construction). This margin is added to the price of non-preferred (usually foreign)
bidders for comparison purposes only.
The Rule:
A preferred (domestic/regional) bidder will be awarded the contract if their price is no more
than [Preference Margin] % higher than the lowest non-preferred bidder's price.
 Example.
Project: Construction of a Health Center
Tender Stipulation: 10% price preference for domestic contractors.
Bidders:
Bidder A (Foreign): "Global Builders Inc." → Price: ETB 90,000,000
Bidder B (Domestic): "Local Construct PLC" → Price: ETB 97,000,000
Bidder C (Domestic): "Ethio Engineers" → Price: ETB 100,000,000
Step 1: Identify the Lowest Non-Preferred Bidder
The non-preferred bidder is Bidder A (Foreign).
Lowest Non-Preferred Bid = ETB 90,000,000
Step 2: Calculate the Preference Margin (Hurdle Price)
This is the maximum price a domestic bidder can have to still win the contract.
Preference Margin = 10%
Hurdle Price = Lowest Non-Preferred Bid × (1 + Preference Margin)
Hurdle Price = ETB 90,000,000 × (1 + 0.10)
Hurdle Price = ETB 90,000,000 × 1.10 = ETB 99,000,000
Interpretation: For a domestic bidder to win, their price must be ETB 99,000,000 or
lower.
Step 3: Compare Domestic Bidders Against the Hurdle Price
Bidder B (Domestic): ETB 97,000,000
Is ETB 97,000,000 ≤ ETB 99,000,000? YES.
Bidder C (Domestic): ETB 100,000,000
Is ETB 100,000,000 ≤ ETB 99,000,000? NO.
Step 4: Award Decision
Bidder B is eligible for the preference.
Since Bidder B is a domestic company and their price is below the Hurdle Price, the contract
is awarded to Bidder B (Local Construct PLC) for ETB 97,000,000.
Even though the foreign bidder (A) offered a lower price (ETB 90M), the domestic bidder
(B) wins because their price was within the allowed 10% preference margin.

A contractor can be eligible for such preference margin if and only if;
 Its legal constitution is in accordance with the Employers’ Country / Region
 It is registered according to rules and regulations of the Employers’ Country / Region
 It has proof that its majority of works are undertaken in the Employers’ Country / Region
 Its majority of capital shares are held by the Employers’ Country / Region nationals
 Its majority of the board of directors members are the Employers’ Country / Region nationals
 Its 50 % key personnel are nationals of the Employers’ Country / Region
 Its arrangement to execute the work should not involve major part of its work or net profit
other than the Employers’ Country / Region Nationals or Co - Companies
Financial Offer Comparison: After all commercial comparisons are considered on the same
bases; the Tender offer will be adjusted based on the Cost – Benefit principle which involves
adding costs and deducting benefits foregone. Besides, the preference margin will also be
deducted and Least evaluated Bidder is Determined. That is:

TO evaluated = (TO + BFCT – ACAP) at different dates for Currency Exchanges – Preference
Margin for Eligible Bidders

Rejection of All Tenders though is solely the power of the employer to decide, for the sake
of fairness it is recommended that such rights shall be exercised in the following cases:
 All Tenders are found non – responsive during the Preliminary evaluations
 Evidences of lack of competitions such as collusion among bidders, monopoly, etc
 Lowest responsive offer is found unreasonably high.

The following procedural Flow Chart (Figure …) is recommended for Tendering following
the Pre-Qualification procedural flow chart shown in section …
The formula TO_evaluated = (TO + BFCT – ACAP) at different dates for Currency
Exchanges – Preference Margin for Eligible Bidders combines all the financial
adjustments we've discussed.
Here’s what each component means:
 TO: Initial Tender Offer (after arithmetic check).
 BFCT: Benefit Forgone due to Completion Time. This is a cost to the client, so it is
added.
 ACAP: Advance Payment Additional Cost. This is also a cost to the client, so it is
added.
 Currency Exchange Adjustments: The "additional cost" due to forex fluctuation is
calculated and added at this stage.
  Preference Margin: A deduction from the price of eligible domestic/regional
bidders to make them more competitive.

Comprehensive Example: Building a Regional Library

Client: Oromia Regional Government
Preference Margin: 7.5% for domestic bidders.
Baseline Completion Time: 500 days.
Baseline Advance Payment: 10% (the minimum requested).
Let's evaluate two final bidders:
Bidder A (Foreign): "Global Construct"
 TO: ETB 95,000,000
 Completion Time: 550 days (50 days slower than baseline)
 Advance Request: 15%
 BFCT Calculated: ETB 2,400,000
 ACAP Calculated: ETB 1,100,000
 Forex Adjustment: ETB 0 (Price is in ETB or no fluctuation)
Bidder B (Domestic): "Oromia Builders"
 TO: ETB 98,000,000
 Completion Time: 480 days (20 days faster than baseline) → This is a benefit, so
BFCT is negative.
 Advance Request: 10% (the baseline)
 BFCT Calculated: -ETB 750,000 (a credit)
 ACAP Calculated: ETB 0 (uses baseline advance)
 Forex Adjustment: ETB 0

Step 1: Calculate the Adjusted Price Before Preference

We apply the core part of the formula: TO + BFCT + ACAP
 Bidder A (Foreign):
o Adjusted Price = 95,000,000 + 2,400,000 + 1,100,000
o Adjusted Price = ETB 98,500,000
 Bidder B (Domestic):
o Adjusted Price = 98,000,000 + (-750,000) + 0
o Adjusted Price = ETB 97,250,000
At this stage, Bidder B (Domestic) is the lower bidder.
Step 2: Apply the Preference Margin
The domestic bidder (B) gets a 7.5% price reduction for the final comparison. This reduction
is applied to their adjusted price.
 Preference Margin for Bidder B = 7.5% of ETB 97,250,000
o Preference Value = 0.075 * 97,250,000 = ETB 7,293,750
 Final Evaluated Price for Bidder B:
TO_evaluated = 97,250,000 - 7,293,750
TO_evaluated = ETB 89,956,250
Final Tender Comparison
Adjusted Price (after BFCT, Final Evaluated Price (after
Bidder Initial Price
ACAP) Preference)
ETB
A (Foreign) ETB 98,500,000 ETB 98,500,000
95,000,000
B ETB
ETB 97,250,000 ETB 89,956,250
(Domestic) 98,000,000
Award Decision: Bidder B (Oromia Builders) is determined to be the Lowest Evaluated
Bidder and wins the contract. Despite having a higher initial price, their faster completion
time and domestic preference margin made them the most advantageous.

Part 2: Rejection of All Tenders

This is a powerful right of the client ("the Employer"), but it must be used justly. The
recommended cases are:
1. All Tenders are Non-Responsive
 Explanation: If every single bid fails the preliminary (eligibility) check—for example,
all are missing the bid security, or none meet the mandatory experience criteria—then
there is no valid bid to consider.
 Example: A tender for a complex dam requires 5 similar projects. All 8 bidders only
have experience building small irrigation canals. All are declared non-responsive.
2. Evidence of Lack of Competition (Collusion/Cartel)
 Explanation: If there is strong evidence that bidders conspired to fix prices or rig the
bid, the entire process is corrupt and must be cancelled.
 Indicators:
 o Bidders have identical calculation errors.
o Bidders submit bids from the same IP address.
o An "losing" bidder inexplicably becomes a subcontractor to the "winning"
bidder.
o All bids are unreasonably high and show a similar pricing pattern.
3. Lowest Responsive Offer is Unreasonably High
 Explanation: The client has a budget. If the lowest valid bid significantly exceeds the
client's engineering cost estimate and available budget, it is not economical to
proceed.
 Example: The client's detailed cost estimate for a road is ETB 200 Million. The
lowest bid received is ETB 320 Million. This is a 60% overrun, indicating a possible
problem with the tender documents or market conditions. It is better to cancel, review
the design and requirements, and re-tender.
Summary Flowchart Concept
While I cannot draw a chart, the procedural flow would look like this:
1. Receive Tenders
2. Preliminary Evaluation (Eligibility)
No responsive bid? → REJECT ALL
3. Detailed Evaluation (Technical & Commercial)
Evidence of collusion? → REJECT ALL
4. Financial Evaluation & Adjustment
Apply BFCT, ACAP, Forex, etc.
Calculate Final Evaluated Price.
5. Award Recommendation
Is the lowest evaluated price reasonable/within budget?
No, it's unreasonably high? → REJECT ALL
Yes → AWARD TO LOWEST EVALUATED BIDDER
This structured approach ensures the final decision is transparent, fair, and delivers the best
value for the client.