Technical and Price Bid in Public Procurement

Generally, in Public Procurement, the bids are submitted as Technical Bids and Price Bids. In Nepal, we have both single stage single envelope and single stage two envelope. In single stage single envelope the Technical and Price Bid are submitted in the single envelope and are evaluated accordingly. In single stage two envelope system two envelope or files are prepared one for Technical and other for Financial Bid. First the evaluation of Technical Bid is completed and the only Price Bid of the bidder/s who pass the technical criteria is opened and further financial evaluation is done.

This process ensure fairness, transparency and selection based on the technical and financial competence of the firm.

Fig: Technical and price bid image created by ChatGPT

Technical Bid:

A technical bid is the non-financial proposal submitted by the bidder. It helps the employer understand who the bidder is, whether the bidder is legally eligible to participate in the bidding process, whether the bidder is qualified and experienced enough to execute the project, bidders plan to complete the task through work methods, equipment, personnel, schedule and any other information provided by the bidder.

Documents in included in the Technical Bid (As per Standard Bidding Document of Nepal):

• Letter of Technical Bid
• Bid Security (Bank Guarantee)
• Alternative Technical Bid (If permitted)
• Firm/Company Registration Certificate
• VAT and PAN Registration Certificated
• Business Registration Certificate
• Tax Clearance Certificate or Tax Return Submission Evidence of Tax Time Extension
• Power of Attorney (Authorization to sign the bid)
• Bank voucher for purchase of Bid Document 
• Documents providing experience and qualification 
• Technical Proposal (Work Methodology, equipment, manpower, schedule, etc;)
• Joint Venture Agreement or Letter of Intent (if applicable)
• List of Subcontractors (If allowed)
• Any other document required by the Employer

The technical bid shows the capacity and competence to perform the task of the bidder. The Technical Bid must not contain any financial or price information. If price details are found inside the Technical Bid, the bid may be rejected as non-responsive. Also, all required documents must be submitted properly. Missing or incomplete documents may lead to rejection.

Price Bid:

A Price Bid is the financial proposal of the bidder. It shows the amount the bidder is quoting to complete the project. Only bidders who pass the Technical Evaluation stage will have their Price Bid opened. The Price Bid focuses purely on financial aspects.

Documents included in Price Bid

As per the Standard Bidding Document (SBD), the Price Bid generally includes:

• Letter of Price Bid
• Completed Bill of Quantities (BOQ)
• Alternative Price Bid (if allowed)
• Table of Price Adjustment (if applicable)
• Any additional document required by the Employer

The total bid price must be clearly mentioned in the Letter of Price Bid. If the total price is not mentioned, the bid may be rejected.

Important Instructions from Information To Bidders (ITB)

While preparing bids, bidders must carefully follow the instructions mentioned in the bidding document. Some key points are:

A. No Mixing of Technical and Price Bids. 

Technical and Price Bids must be submitted separately. Mixing financial information in the Technical Bid may lead to disqualification.

B. Bid Security is Mandatory

• Bid Security must be submitted in original form.
• In case of e-submission, a scanned copy must be uploaded.
• Details of the scanned copy and original must match.
• The validity period must meet the requirement mentioned in the Bid Data Sheet (BDS).
• If Bid Security is missing, invalid, or insufficient, the bid will be rejected.

C. Use of Standard Forms

• Letters of Technical and Price Bid must follow the format given in the bidding document (Section IV – Bidding Forms).
• No alteration in text is allowed.
• All blank spaces must be properly filled.

D. Authenticity of Documents

The bidder is fully responsible for the authenticity of submitted documents. Submission of false information or misleading documents may result in:

• Rejection of the bid
• Disqualification
• Blacklisting under public procurement law

In public procurement, both Technical and Price Bids are equally important. The Technical Bid proves that the bidder is capable and the Price Bid shows how much the bidder's proposed price for the particular project. 

Even a small mistake, such as missing documents, improper bid security, or including price in the Technical Bid, can lead to rejection. Therefore, bidders must carefully read the bidding document and submit all required documents properly and honestly.