EFFECTS OF EXPIRY OF BIDS IN PUBLIC TENDERS

PPDA BIDDERS’ CONVENTION
June 14, 2018

EFFECTS OF EXPIRY OF BIDS IN PUBLIC TENDERS

 

Do you what happens to the tender process where bids expire or where the Bid Security/Bid Securing Declarations expire?

 

The Public Procurement and Disposal of Public Assets Authority (PPDA) the regulator of public procurement has encountered a number of instances where this has happened from its investigations and during administrative review process, PPDA has noted that the procurement process collapses as a result of negligence by some government officials especially in the procurement and Disposal Units (PDU) s.

 

Such omissions have led to collapse of the procurement process due to lack of valid bids and bid securities and it has also led to deprivation of the right to apply for Administrative Review by bidders since they would be out of time and would not qualify as a bidder in the procurement process.

 

Recently, PPDA issued guidance to all accounting officers in central government entities (Ministries, departments and Agencies), and Local Government (districts and municipalities) on what to do to avoid a collapse of the procurement process.

The effect of a “collapsed” procurement is costly to the bidders, the government entities and the general public since it prolongs the procurement process through re-tendering and hence delayed service delivery.

Bid Validity refers to the “life” of a tender opportunity or offer and it stipulates the period within which the offer remains valid. The bid validity date is set by the different government agencies and is indicated in the bidding documents as one of the instructions to bidders.it takes into account the implementation of the various procurement processes such as evaluation of bids, complaints handling up to the contract award stage.

At least two (2) weeks before the expiry of the bids, PPDA guides that;

  • The government entities request all bidders to extend the bid validity period of their bids where circumstances arise that require the extension.
  • The request for extension should be in writing to all bidders who submitted bids and should specify the actual extension period, that is, date for which the bids should remain valid.
  • The extension of bid validity by the bidders should be on the letter head of the bidder clearly indicating that the bid has been extended to a specified date as requested by the Entity and should be signed by the authorized representative of the bidder.

A bid security is issued by a financial institution in the amount required in the bidding document as a commitment by the bidder that he/she will not withdraw from the procurement process.

Bid securities take the form of a bank guarantee, bank draft among others and are in the process of open domestic and open international bidding. Bid securities help to weed out unserious bidders who at times waste time and lead to delays in the procurement process.

For procurements under the restricted bidding methods, procurement for consultancy services and request for quotations methods of procurement, a Bid Securing Declaration is required.

A Bid Securing Declaration (BSD) is an undertaking between the bidder and government entity stipulating commitment by the bidder that it will not and where it does so, it would be black listed by PPDA.

While handling bid validity issues in tender opportunities that require bid security/bid Securing Declarations, government entities are also advised to request bidders to extend the bid security/Bid securing declaration to a specified date in the extension.

PDEs.

Government entities through their PDUs are advised to monitor and ensure that all bids and bid securities/Bid Securing Declarations are valid throughout the procurement process until contract award.