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Author's profile photo Mohammed Anzy S

Bidding process in Public Sector Enterprises – Part 1

Bidding process is one of the key activities in any public sector procurements. Most of the public sector enterprises go for different flavors of  bidding process which are very difficult to incorporate  in the existing procurement systems. This blog is a humble attempt  to point out the different envelope bidding processes exist in different markets especially in India and ADB supported countries.    Envelope concept dates back to the olden days when the bids are submitted in a sealed envelope , which will be opened under the supervision of the authorized procurement officials. There are different types of envelope systems exist eg. Single envelope , two envelope etc. We will see each of them in detail. Single envelope bidding ( Single stage )    In this type of bidding , the bidder submits the quotation in a single envelope. The purchaser opens the bids (Envelopes ) and  accepts or rejects according to whether the bid satisfies the requirements or not. This is  mostly the case when only a price bid is involved in the bidding process. Two envelope bidding ( Single Stage )    Two envelope bidding is mostly used when there is a component , other than the price , associated in the bidding process. Mostly the other component will be a technical feasibility or technical proposal. So in this case  rather than putting both documents together, the price and the technical proposal, the bidder submits two sealed envelopes .One envelope will carry the price related information and the other will talk about the technical proposal. The main goal of this is to allow purchaser to evaluate these two entities differently. In most of the public sector enterprises , the price bid evaluation will be done by one team and the technical bid evaluation will be done by an expert technical team. This separation , allows the firms to evaluate the bids more efficiently without any malpractices. To add more effectiveness , the opening dates and times of these envelopes will be separate. In most of the cases , technical envelopes are opened first and price bids of those who passed the technical evaluation only will be considered for the price evaluation . Two envelope bidding ( Two stage )The difference in the two stage bidding is that , the technical bid submission and price bid submission happens at two points of time. More clearly, in the first stage one envelope is submitted and it is evaluated and then the selected bidders will be asked to submit the second envelope. This is one strategy followed in most of the public sector companies in the Asia , especially in the Indian sub continent. In the technical evaluation process , the bidders are given an opportunity to make necessary changes in the submitted technical proposals so that it could qualify as a successful technical proposal .In the second stage , those who are qualified in the technical evaluation will be asked to submit the price bids and will be evaluated later. The final award of contract  will happen based on the combined score a bidder has obtained for their price as well as technical bids.    More information about the envelope bidding can be found here

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      Author's profile photo Former Member
      Former Member

      The blog is very good and it is an entry point for beginners to know the types of bidding process.


      Author's profile photo Mohammed Anzy S
      Mohammed Anzy S
      Blog Post Author
      Thanks bala, i just wanted to cover the basics first and then move to the technical details...


      Author's profile photo Sai R. Pampana
      Sai R. Pampana
      Hi anzyy,

      Can u explain in detail how to map in to SRM 5.0 system.

      Best Regards,

      Author's profile photo Andreas Muno
      Andreas Muno
      Hi Mohammed and all,
      Industry Solution Management of SAP Procurement for Public Sector has addressed the Two-Envelope Bidding Process you described. It will be part of the Public Tendering scenario of this solution. Please refer to the solution map for further information on Procurement for Public Sector. As for availability please refer to SAP Public Sector sales representatives.
      Best regards, Andreas
      Author's profile photo Sai R. Pampana
      Sai R. Pampana
      well awareness with the Business Process.