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, where as 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 completed similar works as prescribed below in the last 7 years, ending last day of month previous to the one in which Tender is invited.
That means Tender is invited on 6th February 2019, The last day of previous month is January 31st, 2019. So Seven years reckoned is from 01.02.2012 to 31.01.2019
Various parameters for completing the similar works in the last 7 years as below.
Example:
If advertised value of Tender is Rs. 20 Crores, the tenderer is qualified in Technical eligibility criteria, if he executed in last seven years is
1. one work of Rs. 7 Crores, Second work of Rs. 7.5 Crores and 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 for fulfillment of technical eligibility criteria for different components.
What constitutes a separate component in a composite work shall be clearly pre-defined with 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.
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 Number of years prescribed for 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 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. Tender Opening date is 01.09.2018. Number of years to complete the work in that Tender is 4 years. Then Financial Eligibility is calculated as below:
2015-16 - Annual contractual turnover - 5 Crores
2015-16 - Annual contractual turnover - 8 Crores
2015-16 - Annual contractual turnover - 5 Crores
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Total 18 Crores
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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 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 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 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 commenced to be completed in next N years
Technical eligibility - Last 7 years ending last day of 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 of 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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