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Tendering and Awarding the Contract

64. Overview of the Phase

Generally, there are four main stages into which any tender process may be divided.

  • Pre-qualification (in open tenders with a pre-qualification stage) or short listing (in a process with a short listing or pre-selection of candidates).
  • Bid period – from launching through bid submission or reception (in open tenders without pre-qualification) or from invitation to offer (or to negotiate) through bid submission in other processes.
  • Bid evaluation (including qualifications in a one-stage open tender) and award — the procuring agency receives, analyzes/assesses, evaluates, and selects a winner (usually named the preferred bidder)[3].
  • Contract signature (from decision to award to the signing of the contract) — financial close may occur at the end of this period or at a later time after contract signature.

The actual outline of the process and a more detailed description of the phases will vary depending on the tender process type (see appendix A to chapter 4).

At one extreme of the spectrum of tender process types is the one-stage open tender: the RFP is issued together with the RFQ. Here the qualification criteria are published in the same package of documents, and at the same time as the evaluation criteria and the requirements to propose, together with the proposed PPP contract. Submission of qualifications is concurrent with the submission of the proposals.

In this process, the stages or periods may be described as follows.

  • Tender advertising and issuance.
  • Bid preparation (from RFP launch to proposal submission).
  • Evaluation of qualifications and proposals (from bid submission/reception to award).
  • Award.
  • Contract signature (from award to signing of the contract).
  • Financial close.

The main variation of the open tender process is the two-stage open tender with pre-qualification. This is where the pass/fail test of qualifications is done in a previous stage and the RFP is issued, or candidates are invited to propose, only after the qualification process has finished. Figure 6.2 illustrates the one- and two-stage open tender processes.


FIGURE 6.2: Open Tender: One- and Two-Stage Processes


Note: RFQ= Request for Qualification; SoQ=Submission of Qualification.

At the other extreme of the spectrum of variations, there are various interaction or dialogue processes. Any interactive process is very different to the standard open tender process structure. The RFP is discussed or clarified through interaction during the bid preparation stage, or there may even be dialogue to define the contract solution through the dialogue stage (competitive dialogue in the European Union [EU]). This type of process has the following stages or sub-periods.

  • Qualification preparation (up to submission of qualifications).
  • Evaluation of qualifications and selection of short-listed candidates.
  • Dialogue/interactions, bid preparation, and bid submission: from invitation to engage in dialogue (or to engage in an interactive processes) to proposal submission.
  • Evaluation of proposals (from bid submission to award decision).
  • Contract signature (from award to signing of the contract).

Dialogue and interactive processes work best in mature PPP markets and may be difficult to implement in some developing countries.

Figure 6.3 illustrates the competitive dialogue type of process used in the EU. The main difference between this and the highly interactive process used in Australia and New Zealand is that in the former, the RFP and the contract may evolve progressively through the dialogue process, whereas in the latter the interaction focuses less on changing the RFP or the contract, and more on enabling bidders to progressively develop their bids, receiving feedback from the government as they do so.


FIGURE 6.3: Dialogue or Interactive Process: EU Competitive Dialogue


Note: RFQ= Request for Qualification; SoQ=Submission of Qualification.

The main difference in terms of management and process between open tender types of process and those involving a dialogue or structured interaction resides in the dialogue or interaction phase. The other challenges of the tender in terms of process and management are the same as in other procurement methods. In this context, in all of them the authority will have to qualify and evaluate offers to select the awardee and subsequently manage the contract signature process.

The subsequent contents of this chapter introduce issues regarding the management of the bidding stage (sections 5 to 7), and specifically the interactions in dialogue or interactive processes (section 8).

The rest of the chapter then explains the main actions to be undertaken by the authority to handle the key milestones that are common for any tender type: the process of evaluating and selecting the awardee, including negotiating with a preferred bidder if the PPP framework allows for this (sections 9 to 11), and taking the project through to a successful execution of the contract (section 12), and financial close (section 13).


[3] Negotiation is a variation that may be present in any of these processes, and several proposals are sometimes considered before a final proposal is requested in some processes.

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