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GUIDELINE FOR WORKS BIDDING AND CONTRACT TEMPLATES
Preamble: The aim is to provide guidance to contract officers and other specialists in
completing the standard WORKS templates by making recommendations and
highlighting potential risk areas. While completing the templates it is essential to be
assisted by the author of the technical specifications and/or the future supervising
engineer of the works. The ATHENA Financial Rules, including Part II (Rules on
Procurement) are the overarching regulation and supersede all forms of guidelines and
templates in case of conflicting instructions and interpretation or other inconsistencies.
All yellow fields throughout the templates are short instructions/guidelines to the
attention of the contracting officer who will complete and prepare the respective
documents tailored to the specific need of the project/works in question. The text
highlighted in yellow should be deleted before the bidding documents are released.
All parts in grey and/or [<between brackets>] should be completed/deleted by the
contract officer assisted by the author of the technical specifications.
Template 2.1.2: Works Procurement Notice:
This document contains a summary of the main features of the bidding dossier and to be
awarded contract as a result thereof. The Procurement Notice is the document that can
be used to be published in the Official Journal of the European Communities (Art.31 and
33, chapter IV, Part II of the ATHENA Financial Rules), for procedures exceeding the
“higher threshold” specified therein.
For procedures not exceeding the “higher threshold” it is recommended to publish the
Procurement Notice on the website where the bidding dossier will be eventually
published.
Further specific recommendations are covered in the part of this guideline dedicated to
the bidding dossier.
Template 212 B for printed advertisement (i.e. printed media) is a very compressed form
of the original procurement notice and merely refers to the address where the full
procurement notice and bidding dossier can be found.
Template 2.1.3: Works Bidding and Contract Template:
This dossier once completed will constitute the full bidding dossier comprising all legal,
administrative, technical and financial features. The dossier is composed of the following
parts:
Volume 1 (Template 213 A): Instructions to Bidders, forms to be completed by
the bidder and the evaluation grids including the selection criteria.
Volume 2 (Template 213 B): The Draft Contract with the Special Conditions and
General Conditions.
Volume 3 (Template 213 C): The Technical Specifications and Requirements.
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Volume 4 (Template 213 D): The Bill of Quantity (Financial Offer)
Volume 5 (Template 213 E): Drawings and Designs
Volume 1:
Instructions to Bidders, clause 2, timetable:
The minimum bidding time as defined in Part II of the ATHENA Financial Rules should
be followed. Furthermore it is recommended to assess the complexity of the project
subject to bid when defining the number of days between publication and bid
submission. A too short period may jeopardize the quality and quantity of the bids
received, potentially leading to non-compliant bids and/or a lack of bids which in both
cases may severely hamper genuine competition and/or appropriate contract
implementation. The impression of gaining time by reducing the bidding period is usually
by far exceeded by the time lost during the evaluation of ill-prepared bids and/or by
having to re-launch the bidding procedure and/or enter into a negotiated procedure.
It is recommended to have bidding periods of at least 60 calendar days for complex
construction works, and in any case never less than 30 to 40 calendar days for more
straightforward constructions (i.e. pre-fabricated)
The deadlines for clarifications should be proportional to the length of the bidding period,
i.e. 21 and 11 days for bidding periods of 2 months and 14 and 6 days when periods of
30-40 days.
Instructions to Bidders, clause 3.5, subcontracting:
In order to avoid the risk of having the contract implemented by a 3rd party (subcontractor) who is legally not bound to the Contracting Authority (sub-contractors are
only legally bound to their contractor if a contract exists not the Contracting Authority); it
is therefore strongly recommended to define an upper limit for sub-contracting when
awarding works contracts.
Likewise it is appropriate to leave a certain % eligible for sub-contracting as it is often
impossible and unlikely to have 100% carried out works and installation done by the
(main) Contractor.
A commonly used upper limit in the range of 25 to 30% is recommended.
The type of works subject of the contract shall influence the upper limit defined, i.e. when
beside construction a lot of installations (heating systems, AC, alternative power
supplies, extended access and security systems…) are to be fitted in the works, it may
be recommended to increase proportionally the upper subcontracting limit.
Subcontracting limits exceeding 50% may become a juridical hazard and should be
avoided.
Potential bidders do have the legal possibility to form a joint-venture/consortium where
contrary to sub-contracting the juridical and financial interests of the Contracting
Authority are better safeguarded considering that all members of a jointventure/consortium are equally legally bound to the Contracting Authority.
For further details on the conditions applying to joint-venture/consortium partners, subcontractors and general material suppliers for the works, refer to clause 3 and 4 of the
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Instructions to Bidders and article 7 of the General Conditions (Volume 2 of template 1
Works Bidding and Contract template).
Instructions to Bidders, clause 4, information/documents to be supplied by the bidders:
The information shall be provided through the respective documents included in Volume
1, section 4. Those documents and the information provided by the bidder shall be used
by the Contract Award Committee to assess the bidder’s juridical, technical and
economical standings and capacity, using the defined selection criteria.
The required supporting documents and selection criteria should always take account of
the particularities of the contract subject for bidding, the place of implementation, the
technical complexity of the project and the estimated value of the to be awarded
contract.
The aim of the selection criteria (financial/economical and professional/technical) are to
assure that the Contracting Authority will select the best possible bidder having sufficient
economical/financial and professional/technical capacity in order to minimize as much as
reasonably possible the juridical and financial risks while guaranteeing a successful
technically fit implementation.
The criteria should be precise, non-discriminatory and not prejudicial to fair competition.
All criteria specified in the bidding dossier must be applied as such and cannot in any
case be modified during the procedure. The technical evaluation will be based on the
evaluation grid published in the bidding dossier, which must not be modified in any way
during the evaluation process.
The access to credit/cash as required in sub-clause 4.1.2 should be for an amount
proportional to the monies needed to start the works in order to limit the risk of the
Contractor being fully dependant on advance payments and/or cash-flow in order to
proceed with the works.
The financial identification form as required in sub-clause 4.1.3 shall limit the risk that
payments are made to off-shore accounts and/or accounts not in the name of the
Contractor. Hence the importance to obtain financial identification forms signed by the
Contractor’s representative confirmed by the power of attorney and the bank in which
the account is held.
Instructions to Bidders, clause 7, site visits:
It is recommended to assess the real necessity of organizing a site visit, as this is
usually very costly for the bidders in particular when organized in remote places.
A site visit and in particular a mandatory site visit may have an impact on potential
bidder’s interest and capacity to participate and as such limit genuine competition.
It is recommended to limit the use of mandatory site visits, and instead assuring that the
technical specification provides all technical details needed in order to submit a complete
bid.
Site visits may however be essential when contracting design/built structures and/or
when existing structures need substantial rehabilitation and/or integration in an existing
structure.
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Instructions to Bidders, clause 16, bid guarantee:
The preparation of works bidding dossiers and the subsequent evaluation of bids
received is a usually lengthy and costly (i.e. technical experts to draft the technical
specifications and technical selection criteria) process for the Contracting Authority. It is
therefore recommended when appropriate, to request a bid guarantee as an
administrative condition for participation.
The maximum amount of such guarantees should not exceed 2% of the estimated
contract value.
A bid guarantee may be forfeited by the Contracting Authority in case a bidder withdraws
his bid after the submission deadline within the validity of his bid (90 days after
submission deadline).
Instructions to Bidders, clause 26, award criteria:
The award criteria chosen will define on which basis the bids will be evaluated and the
contract awarded. The choice of award criteria should be made during the bidding
dossier preparation phase and in any case before a procurement notice and bidding
dossier are being published. The award criteria used should be indicated in the
procurement notice (point 17), in the instruction to bidders (clause 12, 24, 25, 26) and
reflected through the technical evaluation grid used (Volume 1, section 5 of the bidding
dossier).
A works contract can be awarded based on (a) the lowest price while being fully
administratively and technically compliant or (b) “best value” for money, by selecting
the bid presenting the best technical quality weighted against the price offered on a 60
(technical)/40 (financial) ratio.
Depending on the award criteria used, the evaluation of the technical selection criteria
and the price shall differ and as such the technical evaluation grids shall be different.
(a) lowest price award:
The selection criteria defined in the procurement notice (point 16) and clause 4.2
of the instruction to bidders shall be defined as such that a Yes/No answer can
be given on each of them. A bid is considered fully technical compliant when all
selection criteria can be answered by yes, one no would make the bid technically
non-compliant and eliminated from further evaluation.
Of all bids being fully administratively and technically compliant the one offering
the lowest price is selected for contract award. In some instances other costs (i.e.
cost of maintenance, etc…) may be calculated when defining the lowest priced
bid, however this should be clearly indicated (including the calculation
mechanism) in the bidding documents (clause 26 and Volume 4) before being
published.
(b) “best value” for money award:
The selection criteria defined in the procurement notice (point 16) and clause 4.2
of the instruction to bidders shall be evaluated by applying a score to each of
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them and up to a maximum as defined in the technical evaluation grid (Volume 1,
section 5 of the bidding dossier). Bids obtaining an average score (average of the
scores of each evaluation member) of less than 80 points shall be considered as
technical non compliant and not evaluated further. In this case, 80 points
represents the lower threshold under which the Contract Award Committee
considers that the bidder does not guarantee and demonstrate to have the
professional and technical capacity to execute the works within the requirements
of the technical specifications.
Bidders obtaining an average score of at least 80 points shall be evaluated
further and their respective technical score defined.
Subsequently the financial score is defined and eventually weighted against the
technical score on a respectively 40/60 basis. The bid obtaining the highest
overall score is selected for contract award.
The full calculation method of the technical, financial and overall scores is
outlined in template 2b- Works Contract Award Committee Report.
Whether the “best value” or lowest price award method is used, particular attention
should be given to the following advantages and disadvantages of each method while
selecting one of them;
(a) Lowest price award procedure:
Advantages: Straightforward and easier evaluation of the selection criteria where
a clear cut decision (yes/no basis) can be made by the contract award committee
members with shorter evaluation processes as a result thereof.
Award results are easier to communicate and understand by the unsuccessful
bidders, hence a usually much lower level of complaints arising from the award
decision that can potentially delay the start of the contract.
Gives more guarantees of obtaining the lowest possible price as bidders will stick
to the minimum technical requirements defined in the bidding dossier.
Disadvantages: No credit given for better technical proposals, as only the price
will separate the technically compliant bids. Selection criteria can only be
formulated in a way that a Y/N answer can be given; this may be very difficult in
complex works contracts involving extensive after-works maintenance and/or
substantial designs and structural conception before construction.
(b) “Best value” award procedure:
Advantages: The emphasize of the award is on the technical quality of the bid
proposal, and is particularly suited when awarding large and complex design/built
contracts where substantial numbers of expert engineers are to be provided by
the contractor, or when a substantial quantity of ancillary services are involved in
the works project (i.e. geological surveys, conceptual designs in a turn/key
project, complex post construction maintenance, etc…).
Disadvantages: Very complex and long bid evaluations, requiring engineering
experts acquainted with that sort of bid evaluation. Required expertise for drafting
the technical selection criteria and assign a balanced maximum score distribution
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among them. High costs for preparing bidding dossiers and evaluating bids (need
of short term experts). More time needed for the preparation and evaluation of
respectively the bidding documents and the bids; substantially jeopardizing the
operational capacity of having the contract implemented in short delays while
meeting minimum technical quality requirements.
Higher risk of complaints arising from the award, as “scores” may be interpreted
as more subjective than a yes/no basis. Higher prices considering that the focus
of bidders is the quality and innovation of their technical proposal rather than the
price.
It is recommended to use the lowest price award procedure when launching works
bidding procedures, save in exceptional cases where the “best value” award
procedure would be more effective and efficient as outlined in the above
observations.
The Contracting Authority may consider linking the use of the “best value” award
procedure to the approval of a specific derogation before the Contract Officer embarks
on such procedure. Such derogation would be conditional to at least the availability of
the requisite expertise and due to the complexity of the contract at stake.
Instructions to Bidders, clause 28, performance guarantee:
The performance guarantee in accordance with Article 18 of the ATHENA Financial
Rules is set at 10% of the Contract Price including contingencies, if any.
It should in any case never be less than 5%; the required % between 5 and 10 should be
indicated in clause 12 of the Procurement Notice (template 0.), clause 28 of the
Instruction to Bidders and Article 13 of the Special Conditions of the Contract.
The performance guarantee should be received by the Contracting Authority on the day
of Contract signature the latest, and return the bid guarantee in exchange.
It is recommended to foresee a validity covering the defect liability period until final
acceptance instead of upholding the 10% final payment. This will avoid to carry-over due
payments through several budget years (i.e. the defect liability period is usually 365 days
after provisional acceptance of the works). In this case the performance guarantee
should always be 10% as this corresponds to the final payment level.
Instructions to Bidders, Section 2, 3 and 4; documents to be completed by the bidder:
The Bid Submission Form (section 2) represents the legal document engaging the
bidder to the acceptance of the bidding conditions and content of the bid he has
submitted.
The other documents to be completed by the bidder shall be used by the Contract Award
Committee to assess compliance with the eligibility and selection criteria (i.e.
administrative, economical/financial standings and professional/technical capacity)
specified in the instructions to bidders and the evaluation grids (section 5).
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Volume 2:
The contract supplemented in superseding order by the Special and General Conditions,
Technical Specification, Bill of Quantity and original bidding conditions specifies all legal,
administrative, technical and financial conditions under which the contract will be
implemented and completed.
The General Conditions should always remain unchanged and only be completed and/or
exceptionally amended through the Special Conditions.
The Special Conditions should always be completed (text highlighted in grey) when the
bidding dossier is being drafted before its release and tailored in accordance with the
type of project subject to the bidding procedure. The input of the Contracting Authority’s
technical experts is essential. Special Conditions should not include any technical
requirements as those should be outlined exclusively in the Technical Specifications of
the Contract.
It is not recommended to invalidate or amend the General Conditions, if this would be
needed, it shall be done through the Special Conditions by numbering the concerned
article and precisely indicate what is being changed and/or suppressed.
If there is a need to add Special Conditions not covered by the Contract, General
Conditions, Technical Specification or Bill of Quantity; it should be specified at the end
using article 60 and should exclusively cover legal, administrative or financial aspects
and not technical requirements.
Special Conditions always supersede General Conditions in case of inconsistency.
Volume 3 to 5:
Technical Specifications (Volume 3) shall be drafted in accordance with Article 22 of the
ATHENA Financial Rules.
It is the utmost important for the Contracting Authority to have or to contract qualified
technical experts to draft the Technical Specifications, define the professional and
technical selection criteria, participate in the Contract Award Committee evaluation and
eventually act as supervising engineer during the contract implementation phase.
Ill prepared Technical Specifications due to a lack of available qualified experts shall
substantially jeopardize the sound implementation of the contract within the foreseen
delays and purpose. Furthermore, the expected costs may significantly increase as a
result of vaguely defined or incomplete Technical Specifications.
The Bill of Quantity (financial proposal, Volume 4) shall quantify and specify the
complete works by referring to the corresponding numbering and narrative in the
Technical specifications. This shall be done by the Contracting Authority’s staff drafting
the Technical Specifications (i.e. technical expert).
The bidder shall have only to complete the unit prices and totals.
The exact % level of contingency shall be specified in the Bill of Quantity by the
Contracting Authority before releasing the bidding dossier. Usual contingency levels
used for construction works are between 5 and 15%. The use of contingency is
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regulated by the General Conditions of the Contract and their payment is not due if not
used.
Drawings (Volume 5) cannot always be attached to the bidding dossier in particular
when the full dossier is published electronically. It is therefore important to mention and
include drawing being essential to submit a complete bid. In case drawings cannot be
attached, the location where they can be consulted by the potential bidders should be
clearly indicated.
Templates 2.1.4.A and 2.1.4.B : Works Bid Opening and Contract Award
Committee Reports:
The reception, opening and evaluation of bid shall be done in accordance with Article 37,
38, and 39 of the ATHENA Financial Rules.
The voting members of the Contract Award Committee shall be appointed by the
Contracting Authority’s Authorizing Officer. All members should have sufficient
administrative and technical expertise to evaluate the bids for the concerned project.
Before starting the evaluation, each member should have read and understood the main
features of the bidding dossier.
The chairman of the evaluation committee shall verify that all participants understand the
main features of the dossier and in particular the selection criteria and award method.
The deliberations of the Contract Award Committee should remain confidential and the
submitted bids should be secured during the full duration of the evaluation.
During the opening session the total price offered shall be written in the opening report
(template 214 A) unless the award mechanism is based on “best value” for money in
which case the envelope containing the financial offer is only opened after the technical
evaluation has been completed and only of those bids that are considered technically
compliant. As such the voting members may not be influenced by the offered price when
scoring the technical merits of the offers under the “best value” for money award
procedure.
Clarifications can be required by the chairman of the Contract Award Committee during
the evaluation. However for the sake of equal treatment of bids, clarifications should not
seek to alter the submitted bid and ask for missing documents.
The evaluation of bids follows respectively the different stages of the proceeding: i.e.
reception of bids, opening, formal compliance, administrative compliance, technical
compliance, financial evaluation and recommendation for award. The evaluation shall
take place stage by stage and bids declared non-compliant during a given stage should
not be evaluated further and/or made compliant again unless a misinterpretation or
mistake has occurred. This means that a bid eliminated at the administrative stage shall
not be evaluated technically.
Templates 2.1.5.A and 2.1.5.B : Works Letter of Award and Letter to Unsuccessful
Bidders:
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The letter of award shall be sent once the conclusion of the Contract Award Committee
has been endorsed by the Contracting Authority.
It is recommended to send the letter to unsuccessful bidders only after the Contract has
been signed by the successful bidder. As such the bid of the second best bidder remains
valid (within 90 days of bid submission) in case the best bidder withdraws his bid or fails
to sign the Contract.
Template 2.1.5.C : Works Award Notice:
To be published by the Contracting Authority after Contract award and in accordance
with Article 53 of the ATHENA Financial Rules.
Template 2.1.6 : Works Contract Modification:
Contracts may need to be modified during their duration if the circumstances affecting
project implementation have changed since the initial contract was signed. Contract
modifications must be formalized through a Contract Modification of the Contract in
accordance with the provisions of the General Conditions of the Contract. Such a
modification must be signed by the contracting parties.
General principles:
The following general principles should always be respected:
- No modification to the contract may alter the award conditions prevailing at the
time the contract was awarded. Following this logic, major changes, such as a
fundamental alteration of the Technical Specifications, cannot be made by
means of a Contract Modification.
- A request for contract modifications should not automatically be accepted by
the Contracting Authority. There must be justified reasons for modifying a
contract. The Contracting Authority must examine the reasons given and reject
requests which have little or no substantiation.
- Contracts can only be modified within the execution period of the contract. The
purpose of the Contract Modification must be closely connected with the nature
of the project covered by the initial contract.
- Requests for contract modifications must be made (by one contracting party to
the other) well in advance to allow for the Contract Modification to be signed by
both parties before the expiry of the execution period of the contract.
-Where the modification of the contract extends activities already under way,
such cases would usually fall under a negotiated procedure for which a duly
approved derogation in accordance with ATHENA Financial Rules (Part II, Article
6) should be obtained.
Preparing a Contract Modification:
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In preparing a Contract Modification, the Contracting Authority shall proceed as follows:
- Use template 4 for Contract Modifications; all references in the proposed
modification to article numbers and/or annexes to be modified must correspond
to those in the initial contract.
- Any modification increasing the total Contract Price must include a replacement
approved budgetary commitment.
- Include to the Contract file an explanatory note providing a technical and
financial justification and approved derogation, if any.
Template 2.1.7 : Assessment form for works contract
Template 2.1.8 : Negotiation Report:
Works contracts may be awarded by negotiated procedure with one or several bidders,
after derogation has been approved in accordance with ATHENA Financial Rules (Part
II, Article 6). (see Fiche 1.2.4)
In the following cases a negotiation with one bidder/contractor could be considered:
- for additional works not included in the initial contract which have, through
unforeseen circumstances, become necessary for carrying out the works
described therein and which have been awarded to the contractor already
carrying out the work.
economically separated from the
main contract without serious inconvenience to the Contracting Authority.
- where such works, although separable from the performance of the original
contract, are strictly necessary to its overall completion.
However the aggregate value of contract awarded for additional works, with the initial
contractor, must not exceed 50% of the value of the initial contract.
The Contracting Authority must prepare a Negotiation Report (Template 2.1.8) justifying
the manner in which the negotiations were conducted and the basis for the contract
award decision resulting from these negotiations. The Negotiation Report shall be
included in the contract file.
In the following cases a negotiation or competitive dialogue with several bidders could
be considered by the Contracting Authority:
-
In the case of particularly complex contracts where the Contracting Authority
is not objectively able to define the technical means capable of satisfying the
needs or objectives, or able to specify the legal or financial make-up of the
project, and where it considers that direct use of an open bidding procedure
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will not allow the contract to be awarded to the bidder offering best value for
money.
It may consider the use of the negotiated procedure not withstanding prior
approval in accordance with ATHENA Financial Rules. The procedure should
however only be considered in exceptional cases with all necessary
precaution.
Negotiation methodology with several candidates:
The Contracting Authority publishes a contract notice setting out the needs and
requirements. It opens a dialogue/negotiation with a minimum of 3 candidates which
meet minimum selection criteria. All aspects of the bid can be discussed during the
dialogue; however, the dialogue is conducted with each bidder individually on the basis
of their proposed solutions and ideas. The Contracting Authority, through its negotiation
team, has to ensure the equal treatment of participants as well as the confidentiality of
bids.
The contract shall be awarded to the bidder with the technically compliant bid being the
most economically advantageous; the sole award criterion is the “best value” for money.
The negotiation report (Template 2.1.8) shall contain all details of the negotiation
process.
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