Académique Documents
Professionnel Documents
Culture Documents
10
SANS 294:2004
ISBN 0-626-15684-X
Edition 1
SANS 294:2004
Edition 1
Table of changes
Change No.
Date
Scope
Abstract
Describes processes, methods and procedures for the establishment within an organization of a
procurement system that is fair, equitable, transparent, competitive and cost-effective.
Keywords
procurement, procurement documents, procurement policy, procurement procedures, procurement
strategy.
Acknowledgement
Standards South Africa wishes to acknowledge the valuable assistance derived from publications of
the Interministerial Task Team for Construction Industry Development (1999-2000) and the
Construction Industry Development Board (2002-2003). Standards South Africa also wishes to
acknowledge the valuable contribution of the Joint Structural Division of the South African Institution
of Civil Engineering and the Institution of Structural Engineers.
Foreword
This South African standard was approved by National Committee StanSA TC 5120.61,
Construction standards, in accordance with procedures of Standards South Africa, in compliance
with annex 3 of the WTO/TBT agreement.
Annexes E to J form an integral part of this standard. Annexes A to D are for information only.
Introduction
Procurement is by definition a process (i.e. a succession of logically related actions occurring or
performed in a definite manner) which culminates in the completion of a contract for the provision of
engineering and construction works, supplies, services or disposals. There is a finite range of
methods and procedures associated with the various procurement subprocesses. These can be
captured in a single standard for common and repeated use.
This standard describes the generic processes around which an organization can develop its
procurement system. It also describes standard methods and procedures which can, by reference,
be adopted by organizations into their procurement systems.
The processes, methods and procedures contained in this standard are based on the underlying
requirement for the procurement system to be fair, equitable, transparent, competitive and costeffective. Compliance with the requirements of this standard will also result in a procurement
system that is predictable and ensures equal treatment of tenderers.
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Contents
Page
Abstract
Keywords
Acknowledgement
Foreword
Introduction
1 Scope .....................................................................................................................................
3 Definitions ..............................................................................................................................
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SANS 294:2004
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1 Scope
This standard describes processes, methods and procedures for the establishment within an
organization of a procurement system that is fair, equitable, transparent, competitive and costeffective. This standard
a) describes generic procurement processes around which an organization may develop its
procurement system;
b) establishes minimum requirements for the conduct of an organizations employees, agents,
board members and office bearers when engaging in procurement;
c) establishes the framework for the development of an organizations procurement policy including
any preferential procurement policy;
d) establishes generic methods and procedures for procurements including those pertaining to
disposals; and
e) provides standard conditions of tender and conditions for the calling for expressions of interest.
2 Normative references
The following standards contain provisions which, through reference in this text, constitute
provisions of this standard. All standards are subject to revision and, since any reference to a
standard is deemed to be a reference to the latest edition of that standard, parties to agreements
based on this standard are encouraged to take steps to ensure the use of the most recent editions
of the standards indicated below. Information on currently valid national and international standards
can be obtained from Standards South Africa.
SANS 1914-1, Targeted construction procurement Part 1: Participation of targeted enterprises.
SANS 1914-2, Targeted construction procurement Part 2: Participation of targeted partners in
joint ventures.
SANS 1914-3, Targeted construction procurement Part 3: Participation of targeted enterprises
and targeted partners in joint ventures.
SANS 1914-4, Targeted construction procurement Part 4: Participation of targeted enterprises
and targeted labour (local resources).
SANS 1914-5, Targeted construction procurement Part 5: Participation of targeted labour.
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SANS 1914-6, Targeted construction procurement Part 6: Participation of targeted enterprises in
concession contracts.
SANS 10396, Implementing preferential construction procurement policies using targeted
procurement procedures.
SANS 10403, Formatting and compilation of construction procurement documents.
3 Definitions
For the purposes of this standard, the definitions given in SANS 10403 and the following definitions
apply:
3.1
adjudication
accelerated and cost-effective form of dispute resolution where, unlike other means of resolving
disputes involving a third-party intermediary, the outcome is a decision by a third party which is
binding on the parties in dispute and is final unless and until reviewed by either arbitration or
litigation
3.2
agent
natural or juristic person or partnership that is not an employee of the employer and that acts on the
employers behalf
3.3
arbitration
method of resolving disputes between two or more parties by reference to one or more persons
appointed for that purpose, in accordance with procedures laid down by law
3.4
bond
sum of money or securities submitted to the employer or placed in the hands of a third party to
guarantee completion of the work and recovery of the sums which the contractor would be
recognized as owing in terms of the contract
3.5
comparative offer
tenderers financial offer after the factors of non-firm prices, all unconditional discounts and any
other tendered parameters that will affect the value of the financial offer have been taken into
consideration
3.6
contracting strategy
strategy which is adopted to procure supplies, services, or engineering and construction works, to
hire or let anything, to undertake disposals or to operate a concession in the most advantageous
and cost-effective manner
3.7
corrupt practice
offering, giving, receiving or soliciting of anything of value to influence the action of the employer or
his staff or agents in the tender process
3.8
disposal
divestiture of assets, including intellectual property, and other rights and goodwill by any means,
including sale, rental, lease, license, tenancy, franchise, auction or any combination thereof
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3.9
expression of interest
request for tenderers to register their interest in undertaking a specific contract or to participate in a
project or programme and to submit their credentials so they may, in terms of the organizations
procurement procedures, be invited to submit a tender offer should they qualify or be selected to do
so
3.10
fraudulent practice
misrepresentation of the facts in order to influence the tender process or the award of a contract
arising from a tender offer to the detriment of the employer, including collusive practices intended to
establish prices at artificial levels
3.11
joint venture
grouping together of two or more tenderers who jointly and severally undertake to perform a
contract
3.12
litigation
system by which the advocates representing each side adduce arguments in a court of law to
persuade the tribunal (judge, jury or assessors) that they have the better legal case
3.13
mediation
form of dispute resolution involving a third-party intermediary that is intended to produce an
agreement or conciliation between the parties to a contract
3.14
method
documented, systematically ordered collection of rules or approaches
3.15
organization
company, firm, enterprise, association or other legal entity, whether incorporated or not, or a public
body
3.16
price
financial offer
3.17
price adjustment
specific method of calculating the amount to be added or to be deducted from the contract sum by
way of allowances for increases or decreases in the costs of labour, plant and materials occurring
during the performance of the contract, using a price variation formula
3.18
pricing strategy
strategy which is adopted to secure prices and to remunerate contractors in terms of the contract
3.19
principal
owner, director or office bearer
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3.20
procedure
formal steps to be taken in the performance of a specific task, which may be evoked in the course
of a process
3.21
process
succession of logically related actions occurring or performed in a definite manner which culminates
in the completion of a major deliverable or the attainment of a milestone
3.22
procurement
process which creates, manages and fulfils contracts relating to the provision of supplies, services,
engineering and construction works or disposals or any combination thereof
3.23
procurement procedure
selected procedure for a specific procurement
NOTE Specific procedures provided in terms of this standard may be described as negotiated, nominated,
qualified, open, quotation, proposal or shopping (see table 1).
3.24
procurement strategy
selected contracting, pricing and targeting strategy and procurement procedure for a particular
procurement
3.25
project
contract or a series of related contracts
3.26
quality
totality of features and characteristics of a product or service that bears on the ability of the product
or service to satisfy stated or implied needs
3.27
respondent
natural or juristic person or partnership that submits an expression of interest in response to an
invitation to do so
3.28
risk assessment
assessment performed when evaluating tender offers to determine the commercial and other risks
posed thereby
3.29
system
organized scheme or plan of action or an orderly or regular procedure or method
3.30
targeting strategy
approach which is adopted in procurement to implement a preferential procurement policy
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4.2.2 Organizations shall discipline their employees, agents, public office bearers or board
members who contravene the requirements of their code of conduct for procurement.
4.2.3 Organizations may place contractors or their principals (or both) who have engaged in
corrupt and fraudulent practices under restrictions from participating in the organizations
procurement for periods of time. Contractors and persons placed under restrictions shall be advised
of the restriction and the reason therefor.
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e) requirements for managing risks,
f) the grounds upon which the organization may in terms of 6.7.1(e) decline to enter into a
contract, if any,
NOTE Public bodies may regard not being in good standing, insofar as tax obligations or employment are
concerned, as being sufficient grounds to decline to enter into a contract.
h) the organizations procedures for placing contractors and persons under procurement
restrictions,
i)
advertising arrangements for the calling for tender submissions and expressions of interest,
j)
which standard forms of contract (see annex C) and industry standards are to be incorporated
by reference in procurement documents,
Designation
Description
Negotiated procedure
Nominated procedure
Tenderers that satisfy prescribed criteria are entered into an electronic database.
Tenderers are invited to submit tender offers based on search criteria and their
position in the database. Tenderers are repositioned in the database upon
appointment or upon submission of a tender offer.
Open procedure
Qualified procedure
A call for expressions of interest is advertised and thereafter only those tenderers who
have expressed interest, satisfy objective criteria and who are selected to submit
tender offers, are invited to do so.
Quotation procedure
Tender offers are solicited from not less than three tenderers in any manner the
organization chooses, subject to the procedures being fair, equitable, transparent,
competitive and cost-effective.
Tenderers submit technical and financial proposals in two envelopes. The financial
proposal is only opened should the technical proposal be found to be acceptable.
Non-financial proposals are called for. Tender offers are then invited from those
tenderers that submit acceptable proposals based on revised procurement
documents. Alternatively, a contract is negotiated with the tenderer scoring the highest
number of evaluation points.
Shopping procedure
Written or verbal offers are solicited in respect of readily available supplies obtained
from three sources. The supplies are purchased from the source providing the lowest
price once it is confirmed in writing.
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4.4 Preferential procurement policy
4.4.1 General requirements
4.4.1.1 The organizations executive shall develop and document the organizations preferential
procurement policy (see annex D) which, as a minimum, shall establish
a) policy themes,
b) the specific goals, subject to the requirements of 4.4.1.2, that are to be pursued, such as those
pertaining to the promotion of the participation of targeted enterprises and targeted labour, job
creation, local economic development, business equity, sustainable development, quality
standards and environmental standards,
c) targeting strategies,
d) the means by which the goals are to be monitored for contract compliance, and
e) recording and reporting requirements.
NOTE When formulating specific goals, consideration should be given to measures to prevent fraudulent
practices, the application of sanctions as an instrument to promote compliance and the implementation of
supply side interventions (see SANS 10396).
4.4.1.2 Goals that are established in the preferential procurement policy shall be capable of being
measured, verified and audited and shall be achievable within the contract period, unless specific
arrangements are put in place to monitor and enforce compliance after the contract has been
completed, or shall be measured before the award of a contract and maintained for the duration of
the contract.
4.4.1.3 Goals shall not relate to compliance with laws as tenderers may not be rewarded for
complying with the law. They should rather be penalized for not doing so.
4.4.1.4 Preferential procurement policies shall, subject to prevailing legislation, be implemented by
using one or more of the following methods in accordance with the requirements of 4.4.2:
a) preferences at the short-listing stage;
b) accelerated rotation in an electronic database where the nominated procedure is used;
c) tender evaluation criteria; and
d) breaking down (unbundling) of projects into smaller contracts to facilitate the participation of
targeted enterprises.
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4.4.2.3 Accelerated rotations in databases shall be provided in accordance with the provisions of
SANS 10396. The formulation for accelerating work opportunities for targeted enterprises shall be
such that non-targeted enterprises obtain a reasonable opportunity to tender for work.
4.4.2.4 The breaking down of projects into smaller contracts shall only be undertaken when:
a) there is administrative capacity to administer the increased number of contracts that result from
the unbundling of the project; and
b) the unbundling does not result in an inappropriate division of responsibilities, increased
contractual risk, duplication of establishment charges and under-utilization of resources.
NOTE The use of some of the standards within the SANS 1914 series in accordance with the provisions of
SANS 10396 can generate significant levels of targeted enterprise participation on large contracts without
imposing an administrative burden or compromising the procurement in any way.
4.4.2.5 Tender evaluation points for preferences shall be granted using one of the following
methods:
a) award a fixed number of points for attaining a specific goal;
b) award a variable number of points in proportion to the degree to which a tenderer responds to a
particular goal (i.e. in proportion to the quantum of the goal offered); and
c) award points on a comparative basis in terms of which:
1) the best offer received scores the maximum number of allotted points;
2) the worst offer scores no points; and
3) the remaining offers are scored between the limits of (1) and (2).
NOTE 1 Methods (a) and (b) are objective and require no subjective judgements to be exercised in the
quantification of the preference. The evaluation in these methods merely needs to ascertain whether or not the
tenderer is eligible for a preference. Method (c), on the other hand, requires a somewhat subjective judgement
to arrive at the quantum of the preference unless tenderers are required to submit contract participation goals
in accordance with one of the parts of SANS 1914. Where this method is used and contract participation goals
are not offered, preferences should be evaluated by a panel comprising not less than three persons.
NOTE 2 The granting of too wide a range of preferences can lead to a situation whereby most tenderers
become eligible for the awarding of a preference. This can undermine the thrust and intent of preferences.
NOTE 3 As a general rule, the number of specific goals for which tender evaluation points are awarded
should be kept to a minimum in order to
a) ensure efficiency in administration and monitoring for compliance,
b) promote greater clarity of requirements in procurement documents, and
c) maintain focus on the primary policy objectives.
4.4.2.6 The targeting of enterprises and labour through tender evaluation criteria shall be in
accordance with the provisions of SANS 10396. Enterprise declaration affidavits (see SANS 10396)
or statements certified by an auditor should be used to determine the eligibility of tenderers for
preferences pertaining to the structure or the internal workings of the contracting entity.
4.4.2.7 Preferences awarded in respect of the structure of the contracting entity shall be subject to
the tenderer undertaking to maintain their structure within nominated requirements for the duration
of the contract and to limit the quantum of work subcontracted to firms not eligible for preferential
treatment.
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4.4.2.8 Preferences relating to the targeting of enterprises on the basis of geographic locations
shall be based on the conducting of business from premises located in defined geographic locations
as evidenced from indicators such as payment of rentals or bonds for premises and payment for
service charges, levies, rates and taxes to a local or regional authority.
4.4.2.9 Preferences relating to the targeting of labour on the basis of geographic locations shall be
based on residency as recognized by members of the community residing within that area.
4.4.2.10 The participation of
a) targeted enterprises shall be measured on the basis of payments made to such enterprises (see
SANS 10396),
b) targeted labour shall be measured on the basis of wages and allowance paid to such labour (see
SANS 10396), and
c) joint ventures involving targeted partners shall be measured on the basis of a balance between
the value of work for which the targeted partner is responsible and the resources provided by
such a partner (see SANS 10396).
4.4.2.11 Preferences relating to the participation of targeted enterprises and targeted labour shall
be based on the attainment of contract participation goals (percentage of the value of the contract
which represents the inputs of targeted enterprises and labour in the performance of the contract)
as measured in accordance with the relevant part of SANS 1914.
4.4.2.12 Goals relating to development issues that are unrelated to a specific contract such as to
the granting of bursaries, staff training, the provision of housing, education and transport to
members of staff and their dependents, donations to community organizations, etc., shall be based
on amounts paid and certified by auditors, and expressed as a percentage of audited turnover or
wage bills.
4.5.2 The software associated with an electronic database shall, as a minimum, be capable of
a) registering enterprises in an electronic database in categories of work and, where relevant, their
geographical location,
b) ranking registered enterprises in the database in terms of date of entry to the system and, where
applicable, their preferred status in terms of a preferential procurement policy,
c) selecting a limited number of enterprises (not less than five) to submit tender offers, based on
their rankings in the database and subject them to satisfying specific criteria such as locality,
services offered, and specialist capabilities,
d) repositioning enterprises (both successful and unsuccessful) in the database at new positions
dependent on their preferred enterprise status and, if relevant, on their record of previous tender
submissions,
e) preventing fraudulent manipulation of the database by persons in the employ of the organization
to secure nominations for registered enterprises, and
f) reporting on all procurement transactions.
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4.5.3 The successful tenderer shall, in the absence of any preferential procurement policy, be
repositioned as the last record in the database. Unsuccessful tenderers shall, in the absence of any
preferential procurement policy, be repositioned, depending upon their immediate tendering history,
as follows:
a) one third down from the first record in the database following their first unsuccessful tender in
three successive invitations to tender;
b) half way down from the first record in the database following their second unsuccessful tender in
three successive invitations to tender; and
c) as the last record in the database after their third unsuccessful tender in three successive
invitations to tender.
4.5.4 Advertisements for entry to the database shall be published annually in a manner that
enables a wide spectrum of respondents, who comply with the requirements of 6.7.1 in relation to
the category of work they wish to apply for entry to the database, to be advised of the procurement
opportunities presented thereby. Respondents shall be entered into the database whenever they
choose to submit an application which complies with the entry requirements. The organization shall
advise respondents in writing of the administrative action taken regarding their submission, i.e.
whether or not they have been entered, and if not, on what grounds.
4.5.5 An organizations entry requirements shall exclude enterprises who fail to comply with the
requirements of 6.7.1 from being registered in the electronic database.
4.5.6 The particulars of respondents shall be reconfirmed at intervals not exceeding two years.
The names of respondents who no longer comply with entry requirements shall be removed.
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5.1.2 Tender offers may not be solicited unless and until
a) the necessary resources to administer the contract or project have been obtained or put in place,
b) all the necessary organizational approvals for the project or contract have been obtained,
c) organizational approval has been obtained for the selected contract and pricing strategy, for the
procurement procedure, and where a preferential procurement policy is to be pursued, for the
targeting strategy,
d) all necessary feasibility studies and preliminary investigations, commensurate with the selected
contract strategy have been completed,
e) all the necessary and appropriate procurement documents have been prepared,
f) the need for the procurement, the financial and technical viability of the proposed procurement,
and the organizations firm intention of proceeding with the procurement is confirmed, and
g) the funding for or the arrangements for the financing of the contract or project are in place.
5.1.3 The organization shall keep written records of all decisions and determinations made in
accordance with 5.1.1 and 5.1.2 as well as the reasons and details relating thereto.
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f) the need and justification for the proposed disposal have been confirmed, and
g) the organizations firm intention of proceeding with the disposal has been established.
5.2.3 The organization shall make and keep records of all decisions made in respect of 5.2.1 and
5.2.2.
NOTE Transactions involving the disposal of fixed and moveable assets should realize market-related prices.
6.1 General
6.1.1 As a general rule, agents and contractors that are commissioned to prepare a scope of work
for a particular procurement shall be precluded from submitting tender offers for that procurement.
NOTE
Agents and contractors who prepare the scope of work for engineering and construction works
contracts where the design and build contracting strategy is adopted, may submit tender offers to perform such
work.
6.1.2 Tenderers may submit tenders as a joint venture, provided that, before the contract is
awarded to the joint venture, all the partners enter into a joint venture agreement which jointly and
severally binds the partners to perform the contract. However, where the qualified procedure is
used, short-listed respondents who elect to enter joint ventures after the short-listing stage shall, if
required in terms of the tender data, obtain the organizations permission to do so.
6.1.3 In the event that a tender is not awarded for reasons other than that all non-financial
proposals solicited in the proposal procedure fail to comply with the requirements, an organization
or its agents shall not call for fresh tenders covering substantially the same scope of work within six
months of the closing date of the original tender.
6.1.4 Any negotiations or discussions with respondents or tenderers shall be conducted in an
open, competitive, transparent and fair manner.
6.1.5 An organization shall be justified in rejecting all tender submissions only if such submissions
are non-responsive and are unsuitable either because they do not fully comply with requirements or
involve costs substantially higher than the budget.
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6.2.1.2 Any eligibility criteria introduced into the tender data shall not introduce criteria additional to
those listed in 6.7.1 and shall generally be based on the demonstration of the following, as
necessary:
a) professional and technical qualifications;
b) professional and technical competence;
c) financial resources;
d) equipment and other physical facilities;
e) managerial capacity, reliability, experience; and
f) reputation.
6.2.1.3 Calls for expressions of interest shall be prepared in accordance with the provisions of
annex G and incorporate, by reference, the standard conditions for the calling for expressions of
interest contained in annex H. Where submissions are used to establish a tenderers eligibility to
submit a tender offer, respondents shall be requested in such documents to demonstrate their
qualifications in relation to the appropriate requirements of 6.7.1.
6.2.1.4 Procurement documents shall be prepared in English, unless the organizations executive
directs that it may be prepared in another language.
6.2.1.5 The form of offer and acceptance given in I.1 and I.2 shall be incorporated into procurement
documents with minimal contract-specific amendments. The schedule of deviations provided in I.3
should only be provided where the organization requires an audit trail of the amendments to the
procurement document agreed to before the formation of a contract.
NOTE The form of offer and acceptance becomes an agreement when accepted unconditionally by both
parties.
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6.2.1.11 Contracts involving reimbursements on the basis of time and costs or on the basis of cost
plus a fee for profit and overheads shall be structured such that
a) expenditure can be readily audited,
b) reimbursable costs are at market or competitively tendered prices,
c) the end costs of the contract can be continuously tracked and reported on at regular intervals,
and
d) within a short time after the completion of the contract, the final contract amount is known and
can be settled.
6.2.1.12 Requirements for delivery periods that are incorporated into procurement documents shall
be consistent with the organizations reasonable needs and shall take into account factors such as
the complexity of the intended procurement and realistic time frames for completing the work.
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6.2.3.2 Quality may only be introduced into the evaluation of tender submissions where it is
required to achieve policy objectives in terms of an organizations procurement policy or it is
justifiable in terms of procurement outcomes (see figure 1).
NOTE 1 Figure 1 shows the relationship between price and quality and the nature of the procurement. The
scoring of quality is recommended only in respect of specialist work or in partnering approaches where the
price is dependent on the quality offered. The recommendations contained in figure 1 are particularly
appropriate for professional services a subcategory of procurement that demands that quality be considered
in the award of contracts.
NOTE 2 Preferences for quality should be provided to reward tenderers for achieving quality standards or
good performance on previous contracts performed for the organization or to encourage accreditation of
certification in best practices.
NOTE 3 The framing of quality criteria as eligibility criteria is a simple, yet effective, means of ensuring that
only those tenderers who are likely to deliver the required quality submit tenders and compete for the award of
a contract.
6.2.3.3 Quality measures shall not promote captive markets and should result in quality that is
appropriate to comply with user requirements as opposed to the best quality available.
6.2.3.4 Quality should be based on one or more of the criteria listed in table 2, appropriate to the
category of contract.
6.2.3.5 Social considerations, such as the composition of workforces in terms of race, gender or
disability, shall not be included in quality criteria.
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Increasing importance
of quality
QUALITY
Quality most
important
Eligibility criteria
Complex work
characterized by
requirements for
higher levels of skills,
greater resources or
not well-defined inputs
and outputs.
Quality least
important
Price least
important
Simple/straightforward/routine work
where the
tasks/activities are of a
straightforward nature
in terms of which inputs
are relatively well
known and outputs can
be readily defined.
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Price most
important
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Table 2 Quality criteria
1
Category of contract
Engineering and
construction works
Quality control practices and procedures which ensure compliance with stated employers
requirements
Availability of resources
Capacity to mobilize own and subcontracting resources
Availability of skills to manage and perform the contract (assigned personnel)
Quality achievements on previous contracts of a similar nature
Previous works of a similar nature
Life-cycle costs
Services (including
Response to (ability to relate to) the proposed scope of work/project design which
professional services) establishes the manner in which the respondent or tenderer intends to perform the contract
Adequacy of proposed work plan and proposed methodology
Organization, logistics and support resources
Availability of resources
Managerial ability appropriate to the size and nature of work
Control procedures
Qualifications and competence of the key staff (assigned personnel) in relation to the
scope of work
Demonstrated experience in comparable projects
Demonstrated experience with respect to specific aspects of the project
Experience (familiarity) in the region, or similar regions
Performance record in similar projects
Quality assurance systems which ensure compliance with stated employers requirements
Communication/facilitation skills
Sound knowledge of the employers policies or work procedures (or both)
Transfer of knowledge
Supplies
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c) serious damage to property or financial loss;
d) livestock or animal injury, suffering or death;
e) serious environmental damage or degradation; or
f) interruption of essential services.
6.3.1.3 Where the time frames are relaxed, the reason for doing so shall be recorded for audit
purposes.
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6.3.5 Qualified procedure
6.3.5.1 Procurement documents shall be prepared in accordance with the provisions of 6.2.
6.3.5.2 Expressions of interest shall be advertised for in accordance with the provisions of 6.4.1
and 6.4.3 and receipt of expressions of interest shall be closed not less than 10 working days from
the date of the advertisement.
6.3.5.3 Submissions shall be evaluated in the manner stated in the submission data. Such
evaluations shall not result in the exclusion of respondents who comply with the requirements of
6.7.1 and may include the evaluation of quality and preferences, if any, provided that respondents
scoring the highest scores are short-listed.
6.3.5.4 A short list of not less than five respondents shall be prepared.
6.3.5.5 All short-listed respondents shall be invited to submit tenders by a prescribed date. Where
quality is to be evaluated in the absence of the financial offer, one of the proposal procedures
contained in 6.3.7 or 6.3.8 shall be used.
6.3.5.6 All tenders received shall be evaluated in accordance with the provisions of 6.6 and the
contract shall be awarded in accordance with the provisions of 6.7.
6.3.5.7 The period between the calling for expressions of interest and the inviting of tender offers or
proposals shall not exceed 12 months. Where tender offers or proposals cannot be invited within
this period, fresh calls for expressions of interest shall be made.
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6.3.7.4 The remaining tender offers shall be evaluated in accordance with the provisions of 6.6, the
final contract shall be negotiated and the contract shall be awarded in accordance with the
provisions of 6.7.
6.3.7.5 Negotiations may include discussions on the scope of work, the methodology, staffing and
the terms of the contract. The discussions shall not substantially alter the original scope of work or
the terms of the contract to the extent that the quality of the final product, its cost, and the relevance
of the initial evaluation is affected. The scope of work of the preferred tenderer may be scaled down
to accommodate budgetary restraints.
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6.3.10.2 Where the auction procedure is utilized, the assets or items which are to be auctioned
should be displayed in public for a reasonable time before the date of the auction. The date shall be
advertised in accordance with the provisions of 6.4 at least five working days before the auction.
6.4 Advertisements
6.4.1 Advertisements shall be published in English, unless the organizations executive directs that
it be prepared in another language, in a manner that enables a wide spectrum of suitably qualified
and eligible tenderers to access the opportunities that are presented.
6.4.2 The notice and invitation to submit tender offers shall, as a minimum, contain the following
information, as appropriate:
a) the tender, project or contract reference number;
b) the title of the proposed contract or project;
c) a brief description of the supplies, services or engineering and construction works which are
required;
d) the closing date, place and time for submission of tenders;
e) the date and time of the compulsory site inspection or briefing session, if any; and
f) the time and place for collecting procurement documents.
6.4.3 The notice and invitation to submit expressions of interest shall include the following
information:
a) the tender, project or contract reference number, if applicable;
b) the title of the proposed contract or the project;
c) a brief description of the supplies, services or engineering and construction works which are
required;
d) the closing date, place and time for expressions of interest;
e) the objective selection criteria for short-listing firms to submit tender offers or entry to an
electronic database;
f) the date and time of the compulsory briefing session, if any; and
g) the time and place for collecting the procurement documentation.
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6.5.1.3 Those persons responsible for procuring on behalf of the organization shall, except in the
negotiated or disposal procedures, not contact individual tenderers who are submitting or likely to
submit tender offers before the receipt of tenders. Should it be necessary in exceptional
circumstances to do so, it shall be done in a manner which does not obligate the organization,
compromise the competitive position of others or give any unfair advantage to those who were
contacted.
6.5.1.4 Persons responsible for soliciting tender offers shall respond to any request by a tenderer
for clarification regarding the procurement documents within a reasonable time before the deadline
for the submission or extend the deadline in order to do so.
6.5.1.5 If for any reason those responsible for soliciting tender submissions before the deadline for
tender submissions, determine to modify the procurement documents, they shall do so by issuing
an addendum that shall be communicated to all prospective tenderers that have drawn procurement
documents only if such an addendum can be communicated in advance of the closing date and
tenderers can be given reasonable time to react to the contents of such an addendum. Should this
not be possible, the addendum shall either not be issued, or the closing date for tender offers or
expressions of interest shall be postponed to enable the addendum to be issued.
6.5.1.6 Minutes of any briefing meeting that might be convened shall be taken, recording all
requests for clarification received and responses thereto, without identifying the sources of the
requests. The minutes of such meetings shall be promptly distributed to those attending the
meetings and, if necessary, to all tenderers who draw procurement documents.
6.5.1.7 Where bills of quantities are utilized, tenderers shall be required to tender a sum for their
tender offer with or without provision for price adjustment. The tendered sum shall not be adjusted
for any arithmetical errors in computing amounts or carrying forward summated amounts; rather
rates or extensions shall be adjusted to arrive at the tendered sum.
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6.5.3 Opening of tender submissions
6.5.3.1 All tender submissions shall, unless there are justifiable reasons not to do so, be opened in
public, or in the presence of those tenderers who made submissions or their representatives,
immediately after the closing time for receipt of tender submissions. Where this is impossible,
arrangements shall be made to ensure that no further submissions are received and that such
submissions are not tampered with in any way before their opening. Such tender submissions
should be opened not more than one week after the closing time for tenders, in the presence of not
less than two persons representing the organization and one other person who is independent of
the organization, named in the procurement documents.
6.5.3.2 All tender submissions shall each be given a mark of authenticity upon opening and on
every page as proof that the tender submission was received before the closing time.
6.5.3.3 After opening each tender submission the person responsible for overseeing the opening of
tender submissions shall record for each tender offer, including all alternative tender offers, as
relevant
a) the name of the tenderer,
b) the total of prices,
c) contract data that have a bearing on the tendered price e.g. time for completion, settlement
discounts, price adjustment, and
d) preferences claimed (specific goals and evaluation points claimed).
NOTE Where contracts are not awarded in totality to a singe tenderer, the recording of the total of prices is
not required. Where defined portions of contracts may be awarded to multiple tenderers and such portions can
be readily totalled in the tender submission, those totals should be recorded.
6.5.3.4 The record outlined in 6.5.3.3 shall be made available to all interested persons upon
request.
6.5.3.5 Where a proposal procedure is followed, the procedures in 6.5.3.1 and 6.5.3.2 shall be
modified so that the technical proposals are opened as soon as is practical and the financial
proposals of responsive tenderers, if any, are opened only after the technical proposals have been
evaluated. Financial proposals from non-responsive tenders shall be returned unopened.
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c) conforms to all the terms, conditions, and specifications of the procurement documents without
material deviation or qualification which, in the organizations opinion, would
1) detrimentally affect the scope, quality, or performance of the works, services or supply
identified in the scope of work,
2) change the employer's or the tenderer's risks and responsibilities under the contract, or
3) affect the competitive position of other tenderers presenting responsive tenders, if it were to
be rectified.
6.6.2.2 Non-responsive tender submissions shall not be subsequently made responsive by
correction or withdrawal of the non-conforming deviation or reservation.
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Table 3 Standard tender evaluation methods
1
Method
Procedure
Method 1: Financial
offer
1) Rank tender offers from the most favourable to the least favourable comparative
offer.
2) Recommend highest ranked tenderer for the award of the contract.
Method 2:
Financial offer and
preferences
Method 3:
Financial offer and
quality
1) Score quality, rejecting all tender offers that fail to score the minimum number of
points for quality stated in the tender data, if any.
2) Score tender evaluation points for financial offer.
3) Calculate total tender evaluation points.
4) Rank tender offers from the highest number of tender evaluation points to the
lowest.
5) Recommend tenderer with the highest number of tender evaluation points for the
award of the contract.
Method 4:
Financial offer, quality
and preferences
1) Score quality, rejecting all tender offers that fail to score the minimum number of
points for quality stated in the tender data, if any.
2) Score tender evaluation points for financial offer.
3) Confirm that tenderers are eligible for the preferences claimed and if so, score
tender evaluation points for preferencing.
4) Calculate total tender evaluation points.
5) Rank tender offers from the highest number of tender evaluation points to the
lowest.
6) Recommend tenderer with the highest number of tender evaluation points for the
award of the contract.
The maximum score in respect of the financial offer, quality and preference, as relevant, shall be such that the
procurement remains fair, equitable, competitive and cost-effective.
6.6.4.4 Quality shall be scored for each of the criteria stated in the tender data. Each member of
the evaluation panel shall score each and every criterion independently. The scores shall thereafter
be averaged and retained for auditing purposes.
6.6.4.5 Preferences shall be scored using a method provided for in 4.4.2.5 as stated in the tender
data. Where preferences are evaluated using the method stated in 4.4.2.5(c), each member of the
evaluation panel shall score each preference. The scores shall thereafter be averaged and retained
for auditing purposes.
6.6.4.6 The reasonableness of comparative offers shall be judged. All tender offers with unrealistic
financial offers shall be rejected and the remaining comparative offers scored in accordance with
the following formula:
WF = W1 A
where
WF is the number of tender evaluation points awarded for the financial offer;
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W1 is the maximum possible number of tender evaluation points awarded for the financial
offer as stated in the tender data;
A
NOTE 1 The offer receiving the highest number of points for price should be realistically priced. Unrealistic
financial offers (i.e., where it is not economically possible to perform the contract at that price) distort the
scoring of price. In cases where a tenderer has tendered a favourable unrealistic financial offer, the evaluator
should ascertain whether or not there is a valid reason for the tender price being unrealistic. This will
necessitate that the tenderer be interviewed. If there is no valid reason, the tender offer should be eliminated
from further consideration.
NOTE 2 The use of a formula contained in table 4 will result in negative scores where the lowest price or
percentage commission/fee is less than half the offer under consideration or where the highest price or
discount is more than double the offer under consideration.
6.6.4.7 Financial offers, preferences and quality, as relevant, shall be scored to two decimal places.
Where two or more tender offers score an equal number of tender evaluation points, the tenderer
who is recommended for the award of the contract shall be the tenderer with the highest number of
a) preference points when method 2 or method 4 is used, and
b) quality points when method 3 is used.
Table 4 Formulae for comparing comparative offers (option 1)
1
Formula
Value of A
(1 +
(P Pm )
)
Pm
(1
(P Pm )
)
Pm
Formula
Value of A
P/Pm
Pm/P
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the next highest ranked tenderer or tenderer scoring the next highest points. The process shall be
repeated until a tenderer who complies with such requirements is identified.
NOTE In the nominated procedure, the admittance criteria should ensure that only tenderers who comply with
the requirements of 6.7.1 are entered into the electronic database, in which case the establishment of
compliance in accordance with the provisions of 6.6.3.1 is not necessary. In the qualified procedure and where
eligibility criteria are based on the provisions of 6.7.1, it might not be necessary to establish compliance in
accordance with the provisions of 6.6.5.1.
6.6.5.2 A risk analysis shall be performed on the tender submission of the highest ranked tenderer
or tenderer who scores the highest number of tender evaluation points and complies with the
provisions of 6.7.1 to ascertain if any of the following, as relevant, present an unacceptable
commercial risk to the organization:
a) unduly high or unduly low tendered rates or amounts in the tender offer;
b) contract data provided by the tenderer; or
c) the content of tender returnables which are to be included in the contract.
6.6.5.3 The tenderer shall be approached to amend any part of his tender submission that might, in
the opinion of the organization, present an unacceptable commercial risk, provided that such
negotiations do not affect the competitive position of the tenderer. Failure to make unacceptable
commercial risks acceptable to the organization might be sufficient grounds for the organization to
reject the tender.
6.6.5.4 Clarifications shall be obtained from a tenderer on any matter that could give rise to
ambiguity in a contract arising from the tender offer.
6.6.5.5 The reasons for overlooking or rejecting a tender offer shall be recorded for audit purposes.
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h) the cost estimate (budget) prepared ahead of the tender,
i) the parameters used for scoring tenderers and the score assigned to each tenderer in respect of
each component of the evaluation that is evaluated, and
j) the reasons for rejecting or overlooking a tenderer.
NOTE SANS 10396 contains an example of a tender evaluation report.
6.7.2 Contracts shall be signed as soon as possible after the contract is awarded by the person
authorized to do so in terms of the organizations procurement policy.
NOTE 1 It is sufficient to merely sign the acceptance portion of the form of offer and acceptance, where
provided, to accept the tender offer.
NOTE 2 The initialling of each page is not required to give effect to the contract. This practice might, however,
assist in identifying the contract between the parties during the discovery phase of litigation proceedings.
6.7.3 The final draft contract shall be prepared and issued to the successful tenderer for
acceptance as soon as possible after the date of the employer's signing of the form of offer and
acceptance, and where relevant, the signing of the schedule of deviations.
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6.7.4 The contract shall be compiled from the procurement documents issued to tenderers and the
returnable documents in accordance with the provisions of SANS 10403 and shall, as relevant, take
account of
a) addenda issued during the tender period,
b) the content of returnable documents, and
c) any revisions agreed between the employer and the successful tenderer.
6.7.5 After the successful tenderer has received the employer's notice of acceptance, all other
tenderers shall be notified that their tender offers have not been accepted by post, telefax or other
electronic method, or by publication of the name of the successful tenderer on a website or in an
accessible publication, as appropriate.
6.7.6 The details of every contract awarded shall be recorded. This record shall include
a) the contract reference number,
b) a description of the work,
c) the contract price,
d) preferences claimed,
e) tender evaluation points awarded,
f) the price of the tender offer used for comparative purposes where preferences were applied in
the evaluation of tenders, and
g) the name and address of the successful tenderer.
6.7.7 The following details of every contract that is awarded should be made known to interested
parties upon request after the successful tenderer has received the employers notice of
acceptance:
a) the contract reference number;
b) a description of the procurement;
c) the total contract price or price for a portion thereof, if relevant (see 6.5.3.3);
d) tender evaluation points awarded, if any; and
e) the name of the successful tenderer.
6.7.8 If the tenderer is unable, unwilling or fails to enter into the contract, the contract shall be
offered to the tenderer with the next highest number of tender evaluation points subject to the
provisions of 6.6.5, and so on until the contract is awarded; provided, however, that the
procurement remains cost-effective and such tender offers are still valid.
6.7.9 In situations where no contract is awarded, the organization shall review the procurement
requirements and procurement procedures and begin the procurement process again, unless there
are compelling reasons not to do so.
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6.8 Contract administration
6.8.1 Every tenderer awarded a contract shall complete that contract in accordance with its terms
and requirements. In the event that the organization determines that the contractors performance is
unsatisfactory due to circumstances within a contractor's control, the organization may take
whatever actions or impose whatever sanctions it deems appropriate in accordance with the
provisions of the contract.
6.8.2 The organization or its agents shall monitor the contractor's performance under the contract
to ensure that the requisite quality standards are attained and the requirements are satisfied, and
shall certify compliance upon completion of the contract.
6.8.3 Where, through unforeseeable circumstances, it is necessary to increase the quantum of
work or to perform additional work within the broad scope of the contract, the contractor may be
instructed to perform such work under the contract provided that the final contract amount is not
above the percentage contained in the organizations procurement policy, excluding any provision
for price adjustment, at the time that the contract is awarded. Work in excess of this limit shall not
be undertaken without the express permission of the organizations executive.
6.8.4 If, at any point during the term of a contract, it is terminated or cancelled by either the
contractor or the organization, a record of the reasons for this cancellation/termination shall be
made.
6.8.5 Upon completion of a contract, a record of the key performance indicators relating to time,
cost and the attainment of goals associated with a preferential procurement policy pertaining to that
contract should be made.
6.9.2 Mediation
6.9.2.1 The mediator shall be selected by agreement between the parties or, failing such
agreement, by a mutually agreed upon person. Mediation shall be conducted without legal
representation with the costs being borne equally by the parties.
6.9.2.2 The mediator shall convene a hearing of the parties and may hold separate discussions
with any party. The mediator shall assist the parties in reaching a mutually acceptable settlement of
their differences through means of reconciliation, interpretation, clarification, suggestion and advice.
The parties shall record such agreement in writing and thereafter they shall be bound by such
agreement.
6.9.2.3 The mediator shall be authorized to end the mediation process whenever, in his opinion,
further efforts at mediation would not contribute to a resolution of the dispute between the parties.
6.9.2.4 If either party is dissatisfied with the opinion expressed by the mediator or should the
mediation fail, then such party may require that the dispute be settled in terms of the contract.
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6.10 Departures
Departures may be made from the methods and procedures provided in 6.3 to 6.8 with the approval
of the organizations executive provided that the procurement remains
a) fair,
b) equitable,
c) transparent,
d) competitive, and
e) cost-effective.
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Annex A
(informative)
2
Principal activity
No.
Description
3
Related action
Award contract
Not all procurement systems will contain all the subactivities listed in table A.2. as an organizations
procurement policy may exclude certain options.
Organizations should designate and empower persons to make decisions whenever a procedural
milestone is attained.
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Table A.2 Subactivities and related principal actions
associated with each procurement activity
1
Procurement
activity
No.
Description
Establish
what is to be
procured
3
Subactivity
Description
1. Prepare broad scope of work for
procurement
Principal action
Develop a title for the procurement for the purpose
of project identification and a broad scope of work.
2. Estimate financial value of proposed Estimate the financial value of the proposed
procurement
contract for budgetary purposes, based on the
broad scope of work.
Decide on
procurement
strategies
3. Confirm that budgets are in place Designated persons make sure that finance is
available for the procurement to take place.
4. Invite contractors to submit tender
offers or expressions of interest
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Table A.2 (continued)
1
Procurement
activity
No.
3
36
Description
Subactivity
Description
Evaluate
tender offers
Principal action
Prepare evaluation report and make recommendations in respect of actions to be taken, depending
upon the procurement procedure that is adopted.
7. Confirm recommendation
contained in the tender
evaluation report
SANS 294:2004
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Table A.2 (concluded)
1
Procurement
activity
No.
5
Description
Award
contract
Administer
contracts
and confirm
compliance
with requirements
3
Subactivity
Description
Principal action
NOTE Subactivities in bold type represent control points, i.e. procedural milestones.
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Annex B
(informative)
B.1.2 Not all procurement procedures are appropriate to all categories and subcategories of
procurement. Best value should be the determinant in selecting a particular procurement procedure.
B.1.3 Figure B.1 shows the typical considerations associated with the selection of a specific
procurement procedure.
B.1.4 The World Bank, the World Trade Organization and the United Nations Commission on
International Trade Law promote a number of procurement procedures. The mapping between
these procedures and the approach advocated by this standard is described in table B.1.
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start
yes
Does the procurement involve very low price readily available
supplies?
Shopping
procedure
yes
Proposal
procedure
(optional)
yes
Qualified
procedure
(optional)
yes
Nominated
procedure
(optional)
yes
Is the estimated contract value less than a defined threshold?
Quotation
procedure
(optional)
yes
Negotiated
procedure
(optional)
Open procedure
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Table B.1 The relationship between international
procedures and those contained in this standard
1
Description
Standard tender
evaluation
method
(see table 3)
Tender data
Selective
tendering
procedure
Limited
tendering
procedure
Negotiated ,
qualified,
quotation, or
proposal
procedure
Tender data
shall state
Method 1, 2, 3 or 4, which
depending upon
method is to
the agreements
be used.
that are in place
Method 1, 2, 3 or 4,
depending upon
the agreements
that are in place
United Nations Commission on International Trade Law (UNCITRAL) Model Law on Procurement of Goods,
Construction and Services
Restricted
tendering
Method 1 or 2,
depending upon
preferencing
arrangements
Two-stage
tendering
Proposal
procedure using
the two-stage
system
Method 1, 2, 3 or 4,
depending upon
preferencing
arrangements
Request for
proposals
Modified
proposal
procedure using
the two-envelope
system
Method 3 or 4,
depending upon
preferencing
arrangements
Competitive
negotiation
Proposal
procedure using
the two-stage
system
Method 1 or 2,
depending upon
preferencing
arrangements
40
Tender data
shall state
which
method is to
be used.
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Table B.1 (continued)
2
Description
Standard tender
evaluation
method
(see table 3)
Tender data
United Nations Commission on International Trade Law (UNCITRAL) Model Law on Procurement of Goods,
Construction and Services
Prequalification
proceedings
In this procedure, tenderers are requested to prequalify. Tender offers are only solicited from prequalified tenderers.
Nominated or
qualified
procedure
Method 1, 2, 3 or 4,
depending upon
preferencing
arrangements
Request for
quotations
Quotation
procedure
Method 1
Singlesource
procurement
Selection
procedure
without
negotiation
(services
contract)
Nominated,
qualified, or open
proposal (twoenvelope)
procedure
Method 1 or 2,
depending upon
preferencing
arrangements
Selection
procedure
with
simultaneous
negotiations
(services
contract)
Method 3 or 4
depending upon
preferencing
arrangements
Selection
procedure
with
consecutive
negotiations
(services
contract)
The tender
data shall, in
addition to
stating which
method is to
be used,
state that all
the tenders
that fail to
achieve the
threshold
score for
quality will
be considered as
being nonresponsive.
The tender
data shall
state that
negotiations
will be entered into with
the tenderer
that has the
highest
score for
quality.
World Bank
International
competitive
bidding
Method 1 or 2,
depending upon
preferencing
arrangements
Two stage
(turnkey
contracts or
contracts for
large
complex
plants or
works of a
special
nature)
Method 1 or 2,
depending upon
preferencing
arrangements
Proposal
procedure using
two-stage
tendering system
Tender data
shall state
which
method is to
be used.
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Table B.1 (continued)
2
Description
Standard tender
evaluation
method
(see table 3)
Tender data
World Bank
Prequalification
of bidders
Method 1 or 2,
depending upon
preferencing
arrangements
Limited
international
bidding
In this procedure, the same is done as for international competitive bidding except that direct
invitations are made without open advertisement.
Nominated
procedure
Method 1 or 2,
depending upon
preferencing
arrangements
Shopping
Quotation
procedure
Method 1
Direct
contracting
Quality and
cost-based
selection
(QCBS)
(Consultants)
Tender data
shall state
which
method is to
be used.
Nominated or
qualified
b
procedure
Method 3 or 4,
depending upon
preferencing
arrangements
Tender data
shall state
which
method is to
be used.
Proposal
procedure either
using the twostage tendering
system or the
two-envelope
system
Method 3 or 4,
depending upon
preferencing
arrangements
Tender data
shall state
which
method is to
be used.
Proposal
procedure using
the two-envelope
c
system
Method 3 or 4,
depending upon
preferencing
arrangements
Tender data
shall state
which
method is to
be used and
make it an
obligation for
tenderers to
submit
tenders that
do not
exceed the
budget.
Selection
under a fixed
budget
(Consultants)
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Table B.1 (concluded)
2
Description
Standard tender
evaluation
method
(see table 3)
Tender data
World Bank
Least cost
In this procedure, a minimum qualifying mark for
Nominated or
selection
quality is established. Proposals are invited in two
qualified
(Consultants) envelopes from a short list. Technical envelopes
procedure
are opened first and evaluated. Those securing less
than the minimum are rejected, and the financial
envelopes of the rest are opened in public. The
tenderer with the lowest price is selected.
Selection
based on
consultants
qualifications
(Consultants)
Method 1 or 2,
depending upon
preferencing
arrangements
The tender
data shall, in
addition to
stating which
method is to
be used,
state that all
the tenders
that fail to
achieve the
threshold
score for
quality will
be considered as
being nonresponsive.
Select tenderer
from electronic
database or call
for expressions
of interest
Negotiated
a
procedure
The open procedure with eligibility criteria stated in the tender data can be used as an alternative.
The open, qualified or nominated procedure can also be used as price is not a factor.
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c) only one contractor has been identified as possessing the necessary experience and
qualifications or product for providing the required service, supplies or engineering and
construction works;
d) services and supplies have a very low ceiling value;
e) the service or engineering and construction works being procured are largely identical to works
previously executed by that contractor and it is not in the interest of the public or the organization
to solicit other tender offers; and
f) a professional service contract has a relatively low ceiling value, which can be based on time and
proven cost, in accordance with tariffs issued by statutory councils or national departments.
B.3.2 This procedure should not be used where the estimated contract value is above the
threshold amount. Fairness and cost-effectiveness on higher-value procurements is arguable,
particularly as the procedure solicits tenders from a restricted segment of the market and as such
does not allow those tenderers who are able to comply with requirements at more competitive
prices through alternative, innovative and specialist expertise or experience to do so. The procedure
furthermore does not encourage contractors to develop relationships with an organization and
reduces access to work opportunities. This can constrain or inhibit the growth of contractors.
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d) it is desirable, in a large programme, to link parcels of work to tenderers who have the
appropriate capacity and capability to compete against each other;
e) the time and cost required to examine and evaluate a large number of tender offers would be
disproportionate to the procurement; and
f) for practical reasons, it is necessary to limit the number of tender submissions that are received.
B.5.2 The strength of the procedure lies in the elimination of unlikely candidates for the award of
the contract from the outset and to limit the number of tender submissions that require evaluation.
Tenderers, particularly in high-value tenders or high-input tenders, e.g. design and build, are more
willing to submit competitive tenders in the knowledge that there are a limited number of
competitors. In some large programmes, this procedure can be used to identify, at an early stage,
those firms that are interested in tendering. Firms can be pre-qualified to undertake work
commensurate with their capacity and capabilities and be invited in relatively small numbers to
submit tenders for work that is within the scope of their capacity and capabilities, in such a manner
that all pre-qualified tenderers have an equal opportunity to access work opportunities.
B.5.3 The weakness of this procedure lies in the considerable administrative cost and time taken
to short-list tenderers, particularly where short listing is based on a points scoring system.
B.5.4 It should be noted, however, that it is possible to pre-qualify tenderers in an open procedure
should eligibility criteria be established in the tender data. Where this is done, only eligible (prequalified) tenderers would be permitted to submit tenders and evaluators would confirm eligibility to
submit a tender before the evaluation of a tender.
B.7.1.2 The danger in this approach is that quality is scored on a comparative basis. Where
tenderers are not given an indication of the project budget or the man-hours considered appropriate
to execute the scope of work, there is a danger that a proposal that complies with the minimum
requirements with a moderate price is unfairly compared against a proposal that provides "all the
bells and whistles" with an unacceptably high price and is eliminated from consideration. It is
therefore recommended that where this procedure is used, the project budget or the estimated time
inputs are indicated to tenderers so that proposals can be compared with each other.
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B.8 Shopping
This procedure should only be used in respect of very low-value purchases. It provides a simple
means of obtaining off-the-shelf items. The requirement for the obtaining of a written offer provides
an audit trail.
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Annex C
(informative)
C.1.2 Choosing the right form of contract is a strategic decision that an organization should make.
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C.2.2.2 The form of contract selected for this kind of service should contain provisions which
reflect the desirable criteria outlined below.
The contract should
a) contain a specific undertaking by the parties to deal fairly with one another and with subconsultants, in an atmosphere of mutual trust and cooperation;
b) provide for firm duties of teamwork, with shared financial motivation to pursue those objectives;
(These should involve a general presumption to achieve "win-win" solutions to problems that
might arise during the course of the contract term.)
c) assign clear duties and responsibilities to the parties, which can be integrated with various
professional service requirements, associated with as wide a range of professional services as
possible;
d) contain terms and conditions which are suitable for a wide spectrum of professional service
requirements;
e) provide a choice of pricing strategies which includes a lump sum, a percentage of project cost,
time and expenses, and a term contract using a price list;
f) empower the employer to sanction replacements of key people accepted at the contract
formation stage and to monitor quality of service through a quality management system;
g) obligate the parties to provide an early warning of events likely to lead to additional cost and
time;
h) contain flexible options for the transfer of rights from the consultant to the employer;
i) provide for payment times of 30 d or less, with interest payable on late payments at rates of
interest sufficiently high to deter late payment;
j) use clear and unambiguous language, not contain unnecessarily complex provisions and
provide guidance notes where necessary; and
k) include pricing schedules illustrating the different pricing strategies that are likely to be used.
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c) change terminology, e.g. the use of "plans" instead of "design and programmes", and "access to
site of work" instead of "possession of the site";
d) provide the employer with the option to take over the contractors equipment used for the
services at the end of the contract term;
e) prescribe the forms of subcontract that may be used;
f) require prompt correction of non-compliance, with an obligation to correct defects whether
notified or not;
g) limit the contractors liability for damage to the employers property; and
h) establish the insurance arrangements when working on the property of others.
C.2.4.2 Supplies for provision on a local, off-the-shelf basis may be covered by a simple one page
order form and may be administered using one of the e-commerce systems now being introduced
by many procurement offices.
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C.2.5 Engineering and construction works contracts
C.2.5.1 Engineering and construction works contracts should at least meet the following criteria:
a) They should not contain unreasonable provisions which could unfairly prejudice the interests
of any party.
b) The conditions of tender should be completely separate from the conditions of contract and
should permit the utilization of standard formats.
c) They should not be tailor-made to suit particular technical specifications, or methods of
measurement and evaluation.
d) They should provide for an interrelated management system, which clearly defines the roles
and duties of all persons involved.
e) The employers representative identified in the contract should be fully empowered to act on
the employers behalf.
f) They should permit the appropriate allocation of risks for individual projects, with each risk
being allocated to the party best able to manage, estimate and carry it.
g) They should clearly set out the period within which interim payments shall be made to all
participants, failing which they will have the automatic right to compensation by the payment
of interest at a sufficiently high rate to deter slow payment.
h) They should provide reasonable flexibility to accommodate both public body and private
industry administrative practices. Such flexibility would permit, within limits, the selection of
different periods allowed for payment, levels of surety, retention percentages, penalties,
defects correction periods, limitations of liability for latent defects and contract insurance
provisions.
i) They should stipulate formal contractual relationships between the contractor and all
subcontractors, whether nominated, selected or domestic, which provide for fair and
equitable conditions of subcontract.
j) They should encourage the role players to take all possible steps to avoid conflict, whilst
providing for speedy dispute resolution by a pre-determined impartial dispute resolution
procedure, should conflict arise.
k) They should contain provisions, which are not prejudicial to either party, for both interim and
final dispute resolution by an independent person.
C.2.5.2 In addition, it is recommended that engineering and construction works contracts also
meet the following criteria:
a) They should be suitable to use, across the full range and scope of engineering and building
disciplines and commonly encountered strategies by any employer. (This could be achieved
by an interlocking multi-discipline family of separate forms, each suitable for a different
procurement route, or through the use of options within a single multi-discipline form, which
covers the full range of procurement routes.)
b) They should encourage cooperative attitudes with shared financial motivation to meet such
obligations. This should result in a general objective to achieve "win-win" solutions to
problems which might arise during the course of the project.
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c) They should permit and encourage the application of the techniques of partnering between
the employer and contractor in a manner that preserves contractual protection of rights.
d) They should use clear and unambiguous language, not be unnecessarily complex, and
contain guidance notes where necessary.
e) They should encourage the employer to take all reasonable steps to avoid changes to preplanned scopes of work. However, where variations do occur, the contract should allow for
these to be priced in advance of implementation.
f) They should contain appropriate provisions for assessing interim payments by methods other
than monthly evaluation only.
g) They should provide for design to be carried out by either party to any predetermined extent.
h) They should provide for standard subcontract agreements and other related documents
which are compatible with main contracts.
i) They should contain appropriate provisions to enable work which cannot be adequately
described or specified at the time tenders are called for, to be readily executed and paid for
when such work can be adequately specified.
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Table C.1 Descriptions of commonly encountered contracting strategies
1
Contracting strategy
Description
Batch order
Construction management
Similar to a management contract, except that the trade contracts are between
the employer and the various trade contractors.
The contractor undertakes most of the design and all construction in accordance
with the employer's brief and his detailed tender submission, usually for a lump
sum price.
Similar to design and build, except that the employer issues a concept design on
which tenders are based.
Design by employer
The contractor undertakes only construction on the basis of full designs issued
by the employer.
Management contract
Term
Single purchase
2
Description
Activity schedules
The contractor undertakes to break the scope of work down into activities and
price each activity as a lump sum, which he is paid on completion of the activity.
The total of the activity prices is the lump sum price for the contract work.
Bill of quantities
The contractor is paid an amount for the item of work in the bill which is the rate
for the work multiplied by the quantity completed.
Cost reimbursable
The contractor is paid an agreed percentage fee to cover his overheads and
profit and is reimbursed at market-related rates for predefined cost items.
Percentage fee
Based on the estimated or actual project construction cost or the cost of goods
inspected or procured.
Price list
Quantity discount
The price of the supplies reduces in accordance with the quantity that is
purchased.
The retainer fees are fixed and the success fee is usually based on a percentage
of the sale price or the assets.
Target price
The contractor is paid for work done on a cost-reimbursable basis and the
difference between the final cost of the works and a target price agreed at the
conclusion of the contract is shared between the contractor and the employer in
accordance with a pre-agreed formula.
Time based
Payment is based on agreed hourly, weekly or monthly rates for staff named in
the contract and on agreed rates and reimbursable items. Typically, a ceiling
amount is provided for.
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Table C.3 Commonly encountered combinations of
contracting and pricing strategies
1
Category and
subcategory
Contracting strategy
Pricing strategy
Engineering and
construction works
Construction management
Design and build
Design by employer
Develop and construct
Management contract
Activity schedules
Bill of quantities
Cost reimbursable
Target cost
Services
Single purchase
Term
Activity schedules
Percentage fee
Indefinite delivery contract (price agreement)
Price list
Retainer or contingency fee (or both)
Time based
Supplies
Single purchase
Batch order
Term
Price list
Quantity discounts
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Annex D
(informative)
D.1.2 SANS 10396 establishes the principles and considerations which should be taken into
account in the development of a preferential procurement policy. The targeted procurement
procedures set out in SANS 10396 provide a framework within which
a) goals can be set, monitored and evaluated, both at a project and programme level,
b) access to markets can be provided for target groups,
c) incentives can be provided for contractors to satisfy the objectives of an organizations
preferential procurement policy in the performance of the contract, and
d) the participation of targeted enterprises and targeted labour can be secured.
An organizations preferential procurement policy should establish a broad framework for
preferencing and not contain detailed implementation procedures. It should, as indicated in the
example below, allow those responsible for implementation to decide on the exact definitions of the
target groups, the appropriate targeting strategies and the allocation of points for preferences to
achieve the best outcomes in particular procurements.
Figure D.1 shows the recommended approach to establishing and implementing preferential
procurement policies.
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Policy
formulation
and annual
review
Recommendation 1
Continue without
modifications or with
modifications to
targeting strategies.
Recommendation 2
Modify policy.
Policy implementation
Recommendation 4
Introduce supply side measures to
overcome identified constraints.
Recommendation 3
Abandon policy/declare that policy intent
has been met.
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D.2.2 Evaluation
Any evaluation of the degree of success achieved in providing social and economic deliverables is
dependent on effective monitoring. Evaluation is an ongoing process and should not be deferred.
This is necessary to ensure that any inadequate provision of deliverables is detected at an early
enough stage to remedy the situation. Targeted procurement procedures contained in SANS 10396
facilitate this.
The following data should, as a minimum, be gathered for evaluation purposes:
a) the financial offer of the lowest acceptable tender used for the scoring of evaluation points for
price; and
b) the financial offer of the successful tenderer and details pertaining to the specific goals for which
a preference is granted.
A set of indices for a particular programme to evaluate the range of socio-economic objectives
associated with a preferential procurement policy should be developed in line with SANS 10396.
Key performance
indicators:
Target:
Direct impact of
procurement policy:
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Indirect effects of
procurement policy:
Strategy for
implementation:
Target groups:
Actions:
Targeting strategies:
Data capture:
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Evaluation:
( A B)
(B C )
where
A
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Annex E
(normative)
Tender data
SANS 10403 defines tender data as a "document that establishes the tenderers obligations in
submitting a tender and the employers undertakings in administering the tender process and
evaluating tender offers".
This annex provides generic tender data which shall be used in all procurement conducted in
accordance with the provisions of this standard.
The tender data contained in columns 1 and 2 of table E.1 shall, as appropriate, be included in
procurement documents.
Table E.1 Tender data to be included in procurement documents
1
Subclause
Recommended wording
Guidance notes
The employer is . . . . . . . . . . . . . . . . . . . . . . . . . . .
Enter data
F.1.2
Enter data
..............................................................................................................
Tel: .............................................
Fax: ............................................
E-mail: ..................................................................................................
F.2.1
Only those tenderers who satisfy the following eligibility criteria are
eligible to submit tenders:
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Table E.1 (continued)
1
Subclause
Recommended wording
Guidance notes
F.2.7
If not a requirement,
replace with "There are
no compulsory or
clarification meetings."
Fax: ............................................
Omit if not a
requirement
....................................................
F.2.13
....................................................
F.2.13.3
F.2.13.5
F.2.15
................... hours on
60
.......................... (day)
......................... (date)
F.2.15
If telegraphic, telex,
facsimile or e-mailed
tender offers will be
accepted, delete the
word "not" from this
sentence
F.2.16
F.2.19
Access shall be provided for the following inspections, tests and analysis: State requirements
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Table E.1 (continued)
1
Subclause
Recommended wording
Guidance notes
F.2.22
Return all retained tender documents within 28 d after the expiry of the
validity period.
Omit if not a
requirement
F.2.23
..............................................................................................................
..............................................................................................................
..............................................................................................................
F.3.4
The time and location for opening of the tender offers are:
Time .........................
.............................. on
......................... (date)
Location: ...............................................................................................
F.3.11
F.3.11
The quality criteria and maximum score in respect of each of the criteria
are as follows:
Description of quality criteria
and subcriteria
Maximum number
of tender
evaluation points
F.3.11
Omit if method 1 or 2
applies or if there is no
minimum number of
points for quality
Omit item if method 1
applies.
Enter the required
information (see table 3)
F.3.11
F.3.11
Omit if method 1 or 3
applies.
Enter in the maximum
number of evaluation
points for preference.
Adjust wording to text as
required
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Table E.1 (concluded)
1
Subclause
Recommended wording
Guidance notes
F.3.13.1
F.3.18
.........................................................................................................
.........................................................................................................
.........................................................................................................
Tenderers may not form any joint ventures without the permission of the
employer.
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Annex F
(normative)
F.1.3 Interpretation
F.1.3.1 The tender data and additional requirements contained in the tender schedules that are
included in the returnable documents are deemed to be part of the conditions of tender.
F.1.3.2 The conditions of tender, the tender data and tender schedules which are only required for
tender evaluation purposes, shall not form part of any contract arising from the invitation to tender.
F.1.5.2 After the cancellation of a tender process or the rejection of all tender offers the employer
may abandon the proposed procurement and re-issue a similar tender notice and invitation to
tender not less than six months after the closing date for tender offers or have it performed in
another manner at any time.
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F.2.2 Cost of tendering
Accept that the employer will not compensate the tenderer for any costs incurred in the preparation
and submission of a tender offer, including the costs of any testing necessary to demonstrate that
aspects of the offer comply with requirements.
F.2.9 Insurance
Be aware that the extent of insurance to be provided by the employer (if any) might not be for the
full cover required in terms of the conditions of contract identified in the contract data. The tenderer
is advised to seek qualified advice regarding insurance.
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F.2.10.2 Show VAT payable by the employer separately as an addition to the tendered total of the
prices.
F.2.10.3 Provide rates and prices that are fixed for the duration of the contract and not subject to
adjustment except as provided for in the conditions of contract identified in the contract data.
F.2.10.4 State the rates and prices in Rand unless instructed otherwise in the tender data. The
conditions of contract identified in the contract data may provide for part payment in other
currencies.
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F.2.13.7 Seal the original tender offer and copy packages together in an outer package that states
on the outside only the employer's address and identification details as stated in the tender data.
F.2.13.8 Accept that the employer will not assume any responsibility for the misplacement or
premature opening of the tender offer if the outer package is not sealed and marked as stated.
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F.2.20 Submit securities, bonds, policies, etc.
If requested, submit for the employers acceptance before formation of the contract, all securities,
bonds, guarantees, policies and certificates of insurance required in terms of the conditions of
contract identified in the contract data.
F.2.23 Certificates
Include in the tender submission or provide the employer with any certificates as stated in the
tender data.
F.3.4.2 Announce at the public meeting held immediately after the opening of tender submissions,
at a venue indicated in the tender data, the name of each tenderer whose tender offer is opened,
the total of his prices, preferences claimed and time for completion, if any, for the main tender offer
only.
F.3.4.3 Make available the name of each tenderer whose tender offer is opened, the total of his
prices, if applicable, preferences claimed and time for completion (if any) for the main tender offer
only.
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F.3.5 Two-envelope system
F.3.5.1 Where stated in the tender data that a two-envelope system is to be followed, open only
the technical proposal of valid tenders in the presence of tenderers agents who choose to attend at
the time and place stated in the tender data and announce the name of each tenderer whose
technical proposal is opened.
F.3.5.2 Evaluate the quality of the technical proposals offered by tenderers, then advise tenderers
who remain in contention for the award of the contract of the time and place when the financial
proposals will be opened. Open only the financial proposals of tenderers who score in the quality
evaluation more than the minimum number of points for quality stated in the tender data, and
announce the score obtained for the technical proposals and the total price and any preferences
claimed. Return unopened financial proposals to tenderers whose technical proposals failed to
achieve the minimum number of points for quality.
F.3.6 Non-disclosure
Do not disclose to tenderers, or to any other person not officially concerned with such processes,
information relating to the evaluation and comparison of tender offers, the final evaluation price and
recommendations for the award of a contract, until after the award of the contract to the successful
tenderer.
F.3.8.2 A responsive tender is one that conforms to all the items, conditions, and specifications of
the tender documents without material deviation or qualification. A material deviation or qualification
is one which, in the employer's opinion, would
a) detrimentally affect the scope, quality, or performance of the works, services or supply identified
in the scope of work,
b) change the employer's or the tenderer's risks and responsibilities under the contract, or
c) affect the competitive position of other tenderers presenting responsive tenders, if it were to be
rectified.
F.3.8.3
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F.3.9 Arithmetical errors
F.3.9.1 Check responsive tender offers for arithmetical errors, correcting them in the following
manner:
a) Where there is a discrepancy between the amounts in figures and in words, the amount in words
shall govern.
b) If a bill of quantities (or schedule of quantities or schedule of rates) applies and there is an error
in the line item total resulting from the product of the unit rate and the quantity, the line item total
shall govern and the rate shall be corrected. Where there is an obviously gross misplacement of
the decimal point in the unit rate, the line item total as quoted shall govern, and the unit rate shall
be corrected.
c) Where there is an error in the total of the prices, either as a result of other corrections required by
this checking process or in the tenderer's addition of prices, the total of the prices shall govern
and the tenderer will be asked to revise selected item prices (and their rates if a bill of quantities
applies) to achieve the tendered total of the prices.
F.3.9.2 Consider the rejection of a tender offer if the tenderer does not correct or accept the
correction of his arithmetical errors in the manner described in F.3.9.1.
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F.3.11.4 Method 3: In the case of a financial offer and quality:
a) Score quality, rejecting all tender offers that fail to score the minimum number of points for quality
stated in the tender data, if any.
b) Score tender evaluation points for each financial offer.
c) Calculate the total tender evaluation points.
d) Rank tender offers from the highest number of tender evaluation points to the lowest.
e) Recommend tenderer with the highest number of tender evaluation points for the award of the
contract, unless there are compelling and justifiable reasons not to do so.
F.3.11.6 Score financial offers, preferences and quality, as relevant, to two decimal places.
F.3.11.6.1 Scoring financial offers
Score the financial offers of the remaining responsive tender offers using the following formula:
NFO = W1 A
where
NFO is the number of tender evaluation points awarded for the financial offer;
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W1
is the maximum possible number of tender evaluation points awarded for the financial
offer as stated in the tender data;
is the number calculated using the formula and option described in table F.1 as stated in
the tender data.
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Table F.1 Formulae for calculating the value of A
Formula
Option 1
Option 2
(1 +
(P Pm )
)
Pm
P/Pm
(1
(P Pm )
)
Pm
Pm/P
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F.3.16 Issue final contract
Prepare and issue the final draft of contract documents to the successful tenderer for acceptance as
soon as possible after the date of the employer's signing of the form of offer and acceptance
(including the schedule of deviations, if any). Only those documents that the conditions of tender
require the tenderer to submit, after acceptance by the employer, shall be included.
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Annex G
(normative)
2
Contents
Number
Heading
3
Function and broad outline of contents
Proposal procedures
E1.1
E1.2
Submission data
Returnable documents
E2.1
E2.2
Submission schedules
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Table G.2 Submission data to be included in procurement documents
1
Subclause
Recommended wording
Guidance notes
The conditions for the calling for expressions of interest are the standard
conditions for calling for expressions of interest as contained in annex H
of SANS 294:2004.
Enter data
H.1.2
Submission procedures
Invitation and notice for submissions of expressions of interest
Submission data
Returnable documents
List of returnable documents
Submission schedules
H.1.4
Address: ...............................................................................................
..............................................................................................................
Tel: .............................................
Fax: ............................................
E-mail: ..................................................................................................
H.2.1
Only those respondents who satisfy the following eligibility criteria are
eligible to submit expressions of interest:
..............................................................................................................
H.2.5
Fax: ............................................
E-mail: ..................................................................................................
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Table G.2 (concluded)
1
Subclause
Recommended wording
Guidance notes
H.2.7
.......................... (day)
H.2.9
If telegraphic, telex,
facsimile or e-mailed
tender offers are
acceptable, delete the
word "not" from this
sentence
H.3.3
H.3.9
..............................................................................................................
.........................................................................................................
.........................................................................................................
.........................................................................................................
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Annex H
(normative)
H.1.3 Interpretation
The submission data and additional requirements contained in the submission schedules that are
included in the returnable documents are deemed to be part of the conditions for the calling for
expressions of interest.
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H.2.4 Acknowledge addenda
Acknowledge receipt of addenda to the submission documents, which the employer may issue, and
if necessary apply for an extension to the closing time stated in the submission data, in order to take
the addenda into account.
H.2.7.2 Seal the original and each copy of the submission as separate packages marking the
packages as "ORIGINAL" and "COPY". Each package shall state on the outside the employer's
address and identification details stated in the submission data, as well as the respondent's name
and contact address.
H.2.7.3 Accept that the employer will not assume any responsibility for the misplacement or
premature opening of the submission if the outer package is not sealed and marked as stated.
Ensure that the employer receives the submissions at the address specified in the
submission data not later than the closing time stated in the submission data. Proof of posting shall
not be accepted as proof of delivery. The employer shall not accept submissions submitted by
telegraph, telex, facsimile or e-mail, unless stated otherwise in the submission data.
H.2.9.2 Accept that, if the employer extends the closing time stated in the submission data for any
reason, the requirements of the conditions for expressions of interest apply equally to the extended
deadline.
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H.2.11 Provide other material
Provide, on request by the employer, any other material that has a bearing on the submission or the
respondents commercial position. Should the respondent not provide the material, or a satisfactory
reason as to why it cannot be provided, by the time for submission stated in the employers request,
the employer may regard the submission as being non-responsive.
H.3.5 Non-disclosure
Do not disclose to respondents, or to any other person not officially concerned with such processes,
information relating to the evaluation and comparison of submissions until after the evaluation
process is complete.
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H.3.8 Non-responsive submissions
Reject all non-responsive submissions.
H.3.9.2 Notify the respondents of the outcome of the evaluation process within two weeks of the
evaluation report being accepted by the employer.
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Annex I
(normative)
......................................................................
..........................................................
Name(s)
......................................................................
..........................................................
Capacity
......................................................................
..........................................................
......................................................................
Date ...........................................
I.2 Acceptance
By signing this part of this form of offer and acceptance, the employer accepts the tenderers offer.
In consideration thereof, the employer shall pay the contractor the amount due in accordance with
the conditions of contract identified in the contract data. Acceptance of the tenderers offer shall
form an agreement between the employer and the tenderer upon the terms and conditions
contained in this agreement and in the contract that is the subject of this agreement.
The terms of the contract are contained in
Part 1: Agreements and contract data (which include this agreement)
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Part 2: Pricing data
Part 3: Scope of work
Part 4: Site information
and drawings and documents or parts thereof, which may be incorporated by reference into parts 1
to 4 above.
Deviations from and amendments to the documents listed in the tender data and any addenda
thereto, as listed in the tender schedules, as well as any changes to the terms of the offer agreed by
the tenderer and the employer during this process of offer and acceptance, are contained in the
schedule of deviations attached to and forming part of this agreement. No amendments to or
deviations from said documents are valid unless contained in this schedule, which shall be signed
by the authorized representative(s) of both parties.
The tenderer shall, within two weeks of receiving a completed copy of this agreement (including the
schedule of deviations, if any), contact the employers agent (whose details are given in the contract
data) to arrange the delivery of any bonds, guarantees, proof of insurance and any other
documentation to be provided in terms of the conditions of contract identified in the contract data
on, or just after, the date on which this agreement comes into effect. Failure to fulfil any of the
obligations in accordance with those terms shall constitute a repudiation of this agreement.
Notwithstanding anything contained herein, this agreement comes into effect on the date when the
tenderer receives one fully completed original copy of this document, including the schedule of
deviations (if any). Unless the tenderer (now contractor), within 5 d of the date of such receipt,
notifies the employer in writing of any reason why he cannot accept the contents of this agreement,
this agreement shall constitute a binding contract between the parties.
Signature(s)
......................................................................
..........................................................
Name(s)
......................................................................
..........................................................
Capacity
......................................................................
..........................................................
......................................................................
Date ...........................................
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Any change or addition to the tender documents arising from the above agreements and recorded
here, shall also be incorporated into the final draft of the contract.
1. Subject __________________________________________________________________
Details _____________________________________________________________________
2. Subject __________________________________________________________________
Details _____________________________________________________________________
3. Subject __________________________________________________________________
Details _____________________________________________________________________
4. Subject __________________________________________________________________
Details _____________________________________________________________________
5. Subject __________________________________________________________________
Details _____________________________________________________________________
6. Subject __________________________________________________________________
Details _____________________________________________________________________
By the duly authorized representatives signing this schedule of deviations, the employer and the
tenderer agree to and accept the foregoing schedule of deviations as the only deviations from and
amendments to the documents listed in the tender data and addenda thereto as listed in the tender
schedules, as well as any confirmation, clarification or changes to the terms of the offer agreed by
the tenderer and the employer during this process of offer and acceptance.
It is expressly agreed that no other matter whether in writing, oral communication or implied during
the period between the issue of the tender documents and the receipt by the tenderer of a
completed signed copy of this agreement shall have any meaning or effect in the contract between
the parties arising from this agreement.
For the tenderer:
Signature(s)
.............................................................
..................................................
Name(s)
.............................................................
..................................................
Capacity
.............................................................
..................................................
................................................................................................................
(Name and address of organization)
Name and signature
of witness
.............................................................
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For the employer:
Signature(s)
.............................................................
..................................................
Name(s)
.............................................................
..................................................
Capacity
.............................................................
..................................................
................................................................................................................
(Name and address of organization)
Name and signature
of witness
.............................................................
Date ....................................
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Annex J
(normative)
Adjudication shall be applied to all categories of construction contracts (viz. engineering and
construction works, services and supplies), at both prime and subcontract level, and shall be a
mandatory requirement for the settlement of disputes before the completion of a contract.
J.2 There shall be no restriction on the issues arising from, or in connection with, the contract
capable of being referred to adjudication.
J.3
Adjudicators shall settle the dispute as independent adjudicators and not as arbitrators. Their
decision shall be enforceable as a matter of contractual obligation between the parties and not as
an arbitral award.
J.4
Adjudicators shall answer the questions put to them, provide written reasons for their decision,
base their decisions on the subject of the dispute and only the dispute at hand and should avoid the
conducting of hearings to resolve disputes.
J.5
Adjudication shall be conducted with no bias or apparent bias i.e. in a manner which favours
or seems to favour one party or in a manner which is seen as supporting one party to the detriment
of another. The adjudicator shall be impartial, act independently and not have, or appear to have, a
personal relationship with any of the parties or an interest in the outcome of the adjudication.
J.6
Each party shall be given a reasonable opportunity to state his case without a hearing, i.e. he
shall have a reasonable opportunity to present his case, know what the case against him is and be
in possession of all the evidence and information adduced against it or obtained by the adjudicator.
J.7 The adjudicator shall, as a general rule, communicate in writing simultaneously with both
parties, not offer advice, not accept telephone calls from the parties, not argue the case for one of
the parties, ensure that any information which is relied upon is known to both parties and that each
party has had an opportunity to respond to the information.
J.8
The party requesting adjudication shall submit the dispute for resolution within the time period
specified in the contract of becoming aware of it, failing which that party forfeits the right to dispute
the matter.
J.9
The decision of the adjudicator shall be implemented immediately, whether or not the dispute
is to be referred for final resolution to arbitration or litigation.
J.10 The adjudicator shall have the right, after notifying the parties, to retain legal and technical
experts to assist in areas in which the adjudicator does not possess the necessary expertise.
J.11 The adjudicator may be named in the contract or appointed by agreement between the
parties by means of a procedure agreed to at the time of signing of the contract.
J.12 The adjudicator shall comply with the rules of adjudication provided for in the contract, and in
the agreement covering the adjudicators appointment, but in all other respects may determine the
procedures and conduct of the adjudication, save for the conducting of hearings where this is
unavoidable.
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J.13
NOTE Whilst it is expected that the adjudicator will ask for more information (in writing) for clarification and
understanding and ask questions about what the parties have submitted, any form of hearing should be
discouraged. Hearings can seriously disadvantage those not proficient at adducing argument in front of
experienced dispute resolution specialists and there is always a tendency for those more experienced to use
gamesmanship to influence the adjudicator and introduce additional information that deflects from the real
issues under dispute.
J.14 The rules of adjudication shall be very brief so as to avoid disputes and delaying tactics
about the rules, but should include strict time periods for the actions within the adjudication process.
J.15
As a general rule
J.16
Final resolution of the dispute shall only be referred to arbitration or litigation after a "cooling
down" period of at least 28 d has lapsed.
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Bibliography
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