Eligibility Criteria in Works Tenders
Source: Para 10 of Part I of GCC of Works, 2022 April
Three types
1. Technical Eligibility Criteria 2. Financial Eligibility Criteria 3. Bid Capacity
Difference between the Technical Eligibility Criteria and Financial Eligibility Criteria is, the former considers Similar works, whereas the latter considers all works (incl: similar works)
Bid capacity shows the Contractor's financial resources/capability of executing the big projects i.e., valued Rs. 20 Crores and above if awarded.
Technical Eligibility Criteria
The Tenderer must have successfully completed or substantially completed similar works as prescribed below in the last 7 years, ending the last day of the month previous to the one in which the Tender is invited.
What is substantially completed?
Answer: Ongoing work in which payment is equal to or more than 90% of the present contract value has been made to the Contractor in ongoing contract subject to:
Excluding the payment made for adjustment of PVC,if any,
No proceedings of termination of the contract on Contractor’s default have been initiated
The credentials have been issued not prior to 60 days of date of invitation of the Present Tender.
That means the Tender is invited on 6th February 2019, The last day of the previous month is January 31st, 2019. So Seven years reckoned is from 01.02.2012 to 31.01.2019
Various parameters for completing similar works in the last 7 years as below.
Example:
If the advertised value of the Tender is Rs. 20 Crores, the tenderer is qualified in Technical eligibility criteria, if he executed in the last seven years is
1. One work of Rs. 7 Crores, Second work of Rs. 7.5 Crores and the Third work is Rs. 8 Crores (30 % of advertised work of Rs. 20 Crore is Rs.6.6 Crores)
OR
2. One work of Rs. 8.5 Crores and Second work of Rs. 10 Crores (40% of advertised Work of Rs.20 Crores is Rs. 8 Crores)
OR
3. One work of Rs. 12 Crores above (60% of advertised work of Rs. 20 Crores is Rs. 12 Crores)
The above percentages are applicable to component-wise in Composite works involving more than one department, i.e., Civil work, Electrical work, S&T work, etc.
Up to Rs. 50 Lakhs work - Technical & Financial Eligibility Criteria is not required.
Composite Works : Involving more than one distinct component (example: Civil, S&T, Electrical, etc) - separate completed works of minimum required values shall also be considered to fulfill technical eligibility criteria for different components.
What constitutes a separate component in a composite work shall be clearly pre-defined with the estimated tender cost of it, as part of the tender documents without any ambiguity.
Sub letting - Technical Eligibility:
The sub contractor shall have successfully completed at least one work similar to work proposed for sub contract, costing not less 35 % value of work to be sublet, in the last 5 years, ending last day of month previous to the one in which tender is invited through a Work Contract.
For subletting of work costing up to Rs. 50 Lakh, no previous work experience of sub contractor shall be asked for by the Railway.
Work Experience Certificate
Not considered - By Private individual
Considered - By Public Listed Company, subject to :
having average annual turnover of Rs. 500 Crores and above in the last 3 financial years excluding current financial year
listed on NSE/BSE, incorporated or registered at least 5 years prior to the date of closing tender,
Issue of such certificate by the Authorised person (behalf of Company)
Submission of a relevant copy of Work order, bill of quantities, bill wise details of payment duly certified by CA, TDS certificates for all payments received and copy of final/last bill paid by the company - By the Contractor in support of his claim.
Financial Eligibility Criteria:
The Tenderer must have “Minimum Average Annual Contractual Turn over of V / N or V whichever is less ( ACS - Advanced Correction Slip 1 of 14.07.2022)
V stands for Advertised Value of the Tender in Crores of Rupees.
N stands for the Number of years prescribed for the completion of work for which bids have been invited.
Calculated as an Average of “Total Contractual payments in the previous 3 Financial Years, as per the audited Balance Sheets. If the Balance sheet of the previous year is yet to be prepared/audited, the audited balance sheet of the Fourth previous year shall be considered.
Example: Advertised Tender value is Rs. 20 Crores. The Tender Opening date is 01.09.2018. The number of years to complete the work in that Tender is 4 years. The Financial Eligibility is calculated as below:
2015-16 - Annual contractual turnover - 5 Crores
2016-17 - Annual contractual turnover - 8 Crores
2017-18 - Annual contractual turnover - 5 Crores
—----------
Total 18 Crores
—---------
Average of 3 previous years - 18/3 = 6 Crores
Average Annual Contractual turnover of V/N or V whichever is less
V/N = 20 Crores / 4 = Rs. 5 Crores or V i.e., 20 Crores whichever is less.
Hence Rs. 5 Crores should be the minimum
Hence in the above example, the contractor has fulfilled the Financial Eligibility criteria.
The Tenderer should submit the copies of Audited Balance sheets duly certified by CA (Chartered Accountant) or a certificate from CA duly supported by the Audited Balance Sheets.
Up to Rs. 50 Lakhs work - Technical & Financial Eligibility Criteria is not required.
BID CAPACITY
Required for works costing Rs. 20 Crores and above only
Available Bid Capacity should be equal or more than the Advertised value of Tender
Available Bid Capacity formula = (AxNx2) minus 0.33 x N x B
A = Payment received in any one Financial Year - Maximum value of works completed as well as Works in Progress executed and payment received during the last 3 Financial Years or current year (up to date of opening the Tender ).
N = Number of Years prescribed for completion of work for which Bids / Tenders have been received.
B = Existing commitments & balance amount of ongoing works & works awarded, but yet to start with the Tenderer to be completed in next "N" years.
Example :
Date of opening of Tender: 15th Feb, 2019
Advertised value of Tender : Rs. 100 Crores
N = 3 years
Maximum value of completed works and Works in progress of Contractor ' Ramesh' is as follows.
Therefore, ”A” of Contractor Ramesh is Rs. 25 Crores (which is maximum in any financial year of the above period)
B = value of existing commitments & balance amount of ongoing works with the Tenderer Ramesh to be completed in next "N" years.
Therefore Contractor Ramesh's B = Rs. 15 Crores
Finally A = Rs. 25 Crores, N = 3 years B = Rs. 15 Crores
Available Bid Capacity of Contractor Ramesh is (AxNx2) Minus 0.33 x N x B
= ( Rs.25 Crores x 3 years x 2) minus 0.33 x 3 x 15 Crores.
Rs.150 Crores minus Rs.15 Crores = Rs. 135 Crores
Hence Contractor Ramesh is qualified to bid the works of value up to Rs. 135 Crores.
Key points for MCQ:
Eligibility criteria - 3 Types A. Technical eligibility criteria B. Financial eligibility criteria & C. Bid Capacity
Up to Rs. 50 Lakhs - Technical & Financial not required
Up to Rs. 20 Crores - Bid Capacity is not required
Bid Capacity formulae: (A x N x 2) minus 0.33 x N x B
“A” stands for Payment received in any one Financial year (out of last 3 Financial years or current year (up to the date of opening the tender)
“N” stands for Number of years prescribed for completion of the Work
“B” stands for Existing commitments & Balance amount of ongoing works & works awarded, but yet to commence to be completed in the next N years
Technical eligibility - Last 7 years ending the last day of the previous month to the one in which the Tender is invited.
Technical eligibility: 3 works - 30% and above, 2 works - 40% and above, 1 work - 60% and above
Subletting of work costing up to Rs. 50 Lakhs - Previous experience as Sub Contractor is not required.
Financial eligibility - Minimum average annual turnover of V / N or V whichever is less. V stands for Advertised Value of the Tender and N stands for Number of years prescribed for completion of the work for which bids have been invited.
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