Eligibility Criteria in Works Tenders
Source: Clause 10 of Part I of GCC of Works, 2022 April
Three types
1. Technical Eligibility Criteria 2. Financial Eligibility Criteria 3. Bid Capacity
● The difference between the Technical Eligibility Criteria and Financial
Eligibility Criteria is, the former considers Similar works, whereas the latter
considers all works (incl: similar works)
● Bid capacity shows the Contractor's financial resources/capability of executing
the big projects i.e., valued Rs. 20 Crores and above if awarded.
● Up to Rs. 50 Lakhs work - Technical & Financial Eligibility Criteria is not
required.
Technical Eligibility Criteria
● The Tenderer must have successfully completed or substantially completed similar
works as prescribed below in the last 7 years, ending the last day of the month
previous to the one in which the Tender is invited.
● What is substantially completed?
Answer: Ongoing work in which payment is equal to or more than 90% of the present
contract value has been made to the Contractor in ongoing contract subject to:
A. Excluding the payment made for adjustment of PVC,if any,
B. No proceedings of termination of the contract on Contractor’s default have
been initiated
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C. The credentials have been issued not prior to 60 days of date of invitation of
the Present Tender.
● That means the Tender is invited on 6th February 2019, The last day of the previous
month is January 31st, 2019. So Seven years reckoned is from 01.02.2012 to
31.01.2019
● Various parameters for completing similar works in the last 7 years are as below.
No of similar works Percentage of the Advertised value of
each Tender
3 30 % and above
2 40% and above
1 60 % and above
Advertised value of work is Rs. 2 Crores
Example:
● If the advertised value of the Tender is Rs. 20 Crores, the tenderer is qualified in
Technical eligibility criteria, if he executed in the last seven years is
1. One work of Rs. 7 Crores, Second work of Rs. 7.5 Crores and the Third work is
Rs. 8 Crores (30 % of advertised work of Rs. 20 Crore is Rs.6.6 Crores)
OR
2. One work of Rs. 8.5 Crores and Second work of Rs. 10 Crores (40% of
advertised Work of Rs.20 Crores is Rs. 8 Crores)
OR
3. One work of Rs. 12 Crores above (60% of advertised work of Rs. 20 Crores is Rs.
12 Crores)
● The above percentages are applicable component-wise in Composite works
involving more than one department, i.e., Civil work, Electrical work, S&T work,
etc.
● Up to Rs. 50 Lakhs work - Technical & Financial Eligibility Criteria is not
required.
● Composite Works : Involving more than one distinct component (example: Civil,
S&T, Electrical, etc) - separate completed works of minimum required values
shall also be considered to fulfill technical eligibility criteria for different
components.
● What constitutes a separate component in a composite work shall be clearly
pre-defined with the estimated tender cost of it, as part of the tender documents
without any ambiguity.
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● Separate Component - Rs. 2 Crores - Any work or set of works shall be
considered to be a separate component, only when the cost of the component is
more than Rs. 2 Crores.
● Sub letting - Technical Eligibility:
❖ The subcontractor shall have successfully completed at least one work similar
to work proposed for sub contract, costing not less 35 % value of work to be
sublet, in the last 5 years, ending last day of month previous to the one in
which tender is invited through a Work Contract.
❖ For subletting of work costing up to Rs. 50 Lakh, no previous work experience
of sub contractor shall be asked for by the Railway.
Work Experience Certificate
➔ Not considered - By Private individual
➔ Considered - By Public Listed Company, subject to :
A. having average annual turnover of Rs. 500 Crores and above in the
last 3 financial years excluding current financial year
B. listed on NSE/BSE, incorporated or registered at least 5 years prior to
the date of closing tender,
C. Issue of such certificate by the Authorised person (behalf of Company)
D. Submission of a relevant copy of Work order, bill of quantities, bill wise
details of payment duly certified by CA, TDS certificates for all
payments received and copy of final/last bill paid by the company - By
the Contractor in support of his claim.
Financial Eligibility Criteria:
● The Tenderer must have “Minimum Average Annual Contractual Turn over
of V / N or V whichever is less ( ACS - Advanced Correction Slip 1 of
14.07.2022)
● V stands for Advertised Value of the Tender in Crores of Rupees.
● N stands for the Number of years prescribed for the completion of work for
which bids have been invited.
● Calculated as an Average of “Total Contractual payments in the previous 3
Financial Years, as per the audited Balance Sheets. If the Balance sheet of
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the previous year is yet to be prepared/audited, the audited balance sheet of
the Fourth previous year shall be considered.
● Example: Advertised Tender value is Rs. 20 Crores. The Tender Opening
date is 01.09.2018. The number of years to complete the work in that
Tender is 4 years. The Financial Eligibility is calculated as below:
➔ 2015-16 - Annual contractual turnover - 5 Crores
➔ 2016-17 - Annual contractual turnover - 8 Crores
➔ 2017-18 - Annual contractual turnover - 2 Crores
—----------
Total 18 Crores
—---------
Average of 3 previous years - 18/3 = 6 Crores
Average Annual Contractual turnover of V/N or V whichever is less
V/N = 20 Crores / 4 = Rs. 5 Crores or V i.e., 20 Crores whichever is less.
Hence Rs. 5 Crores should be the minimum
Hence in the above example, the contractor has fulfilled the Financial Eligibility
criteria.
● The Tenderer should submit the copies of Audited Balance sheets duly
certified by CA (Chartered Accountant) or a certificate from CA duly
supported by the Audited Balance Sheets.
● Up to Rs. 50 Lakhs work - Technical & Financial Eligibility Criteria is not
required.
BID CAPACITY
● Required for works costing Rs. 20 Crores and above only
● Available Bid Capacity should be equal to or more than the Advertised value
of Tender
● Available Bid Capacity formula = (AxNx2) minus 0.33 x N x B
● A = Payment received in any one Financial Year - Maximum value of
works completed as well as Works in Progress executed and payment
received during the last 3 Financial Years or current year (up to date of
opening the Tender ).
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● N = Number of Years prescribed for completion of work for which Bids /
Tenders have been received.
● B = Existing commitments & balance amount of ongoing works & works
awarded, but yet to start with the Tenderer to be completed in next "N"
years.
Example :
1. Date of opening of Tender: 15th Feb, 2019
2. Advertised value of Tender : Rs. 100 Crores
3. N = 3 years
4. Maximum value of completed works and Works in progress of Contractor '
Ramesh' is as follows.
Year Completed works (Rs) Works in progress (Rs)
2018-19 (up to 15.02.2019) 15 Crores 5 Crores
2017-18 10 Crores Nil
2016-17 25 Crores Nil
2015-16 5 Crores Nil
● Therefore, ”A” of Contractor Ramesh is Rs. 25 Crores (which is maximum in
any financial year of the above period)
● B = value of existing commitments & balance amount of ongoing works with
the Tenderer Ramesh to be completed in next "N" years.
Year Existing commitments & Balance amount of ongoing works
2019-20 Rs. 5 Crores
2020-21 Rs. 7 Crores
2021-22 Rs. 3 Crores
Total Rs. 15 Crores
● Therefore Contractor Ramesh's B = Rs. 15 Crores
● Finally A = Rs. 25 Crores, N = 3 years B = Rs. 15 Crores
● Available Bid Capacity of Contractor Ramesh is (AxNx2) Minus 0.33 x N x B
● = ( Rs.25 Crores x 3 years x 2) minus 0.33 x 3 x 15 Crores.
● Rs.150 Crores minus Rs.15 Crores = Rs. 135 Crores
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● Hence Contractor Ramesh is qualified to bid the works of value up to Rs. 135
Crores. Because his Bid capacity i.e., Rs. 135 Crores is more than the
advertised value of the Tender i.e., Rs.100 Crores.
Key points for MCQ:
1. Eligibility criteria - 3 Types A. Technical eligibility criteria B. Financial eligibility
criteria & C. Bid Capacity
2. Up to Rs. 50 Lakhs - Technical & Financial not required
3. Up to Rs. 20 Crores - Bid Capacity is not required
4. Bid Capacity formulae: (A x N x 2) minus 0.33 x N x B
5. “A” stands for Maximum Payment received in any one Financial year (out of
last 3 Financial years or current year (up to the date of opening the tender)
6. “N” stands for Number of years prescribed for completion of the Work
7. “B” stands for Existing commitments & Balance amount of ongoing works &
works awarded, but yet to commence to be completed in the next N years
8. Technical eligibility - Last 7 years ending the last day of the previous
month to the one in which the Tender is invited.
9. Technical eligibility: 3 works - 30% and above, 2 works - 40% and above,
1 work - 60% and above
10.Subletting of work costing up to Rs. 50 Lakhs - Previous experience as Sub
Contractor is not required.
11.Financial eligibility - Minimum average annual turnover of V / N or V
whichever is less. V stands for Advertised Value of the Tender and N stands
for Number of years prescribed for completion of the work for which bids have
been invited.
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