alternate bid

Definition
Bid that states an amount which may be added to or subtracted from the quoted price if alternate
methods and materials are chosen.

Read more: http://www.businessdictionary.com/definition/alternate-bid.html#ixzz33sdWOtK5



performance bond
A written guaranty from a third party guarantor (usually a bank or an insurance company)
submitted to a principal (client or customer) by a contractor on winning the bid. A performance
bond ensures payment of a sum (not exceeding a stated maximum) of money in case the
contractor fails in the full performance of the contract.
Performance bonds usually cover 100 percent of the contract price and replace the bid bonds on
award of the contract. Unlike a fidelity bond, a performance bond is not an insurance policy and
(if cashed by the principal) the payment amount is recovered by the guarantor from the
contractor. Also called standby letter of credit, contract performance bond.

Read more: http://www.businessdictionary.com/definition/performance-
bond.html#ixzz33sdiZOsx


Bid bond
A bid bond is issued as part of a supply bidding process by the contractor to the project owner,
to in hopes guarantee that the winning bidder will undertake the contract under the terms at
which they bid.
[1]

The cash deposit is subject to full or partial forfeiture if the winning contractor fails to either
execute the contract or provide the required performance and/or payment bonds.
[2]
The bid bond
assures and guarantees that should the bidder be successful, the bidder will execute the contract
and provide the required surety bonds.
A Bid Bond of amount not above 10% of the contract order total amount is deposited when a
contractor, or the supplier, is bidding on a tendered contract.
The Bid Bond prequalifies the principal and provides the necessary security to the owner or
general contractor, or oblige, guaranteeing that the principal will enter into the contract, if it is
awarded.
A Bid Bond guarantees that the oblige will be paid the difference between the principal's
tender price and the next closest tender price. This action is only triggered should the principal
be awarded the contract but fails to enter into the contract, as agreed, with the obligee. The bid
bond penalty is generally ten percent of the bidder's tender price. Contractors prefer the use of
Bid Bonds because they are a less expensive option and they do not tie up cash or bank credit
lines during the bidding process. Owners and general contractors also use Bid Bonds because
they establish and confirm that the bidding contractor or supplier is qualified to undertake the
project.

bid evaluation
After the submission deadline, the process of opening, examining, and evaluating bids to
determine the bidders' responsibility, responsiveness, and other factors associated with selection
of a bid for contract award.

Read more: http://www.businessdictionary.com/definition/bid-evaluation.html#ixzz33sfVOvud


LOWEST EVALUATED BIDDER
As per definition provided in R2(3)/97/2005, the "lowest evaluated cost" means the price
offered by a supplier, service provider, or contractor that is found to be the lowest after
consideration of all relevant factors and the calculation of any weighting for these factors,
provided that such factors have been specified in the tender documents. It can be deduced
from the definition that the lowest evaluated bidder is the bidder whose bid has been
evaluated and found offer lowest cost as well as meet all terms and conditions stipulated in
the bid documents.

Hussein, from the definition it is clear that not only price is considered in obtaining bidder
with lowest cost but also terms and conditions stipulated in the bid documents. In evaluation
process, basically there are three stages of evaluation [1] preliminary examination result is
the substantially responsive bids, [2] detailed evaluation result is the lowest evaluated
bidder and [3] post-qualification (due diligence) successful bidder with capacity and
capability to execute the contract. Therefore, stage 1 & 2 result to lowest evaluated bidder
before subjected to post-qualification.