| Chapter IX: REQUEST FOR PROPOSAL |
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Rule
Rule 79: Request for Proposal
Rule 80: Project Scope
Rule 81: Evaluation Criteria
Rule 82: Schedule of Bid Process
Rule 83: Obtaining approval to proceed with issue of RFP
Rule 84: Data room
Rule 85: Site visit
Rule 86: Change in composition of consortium
Rule 87: Effectiveness of Bids
Rule 88: Opening of Bids
Rule 89: Evaluation of Bids
Rule 90: Prohibition of negotiations
Rule 91: Selection of the Preferred Bidder
Rule 92: Treatment of sole Bid
Rule 93: Treatment of two equal Bids
Rule 94: Treatment of speculative Bids
Rule 95: Contract finalization and award
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| Rule 79: Request for Proposal
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- The Project Officer shall prepare the RFP and the Draft Concession Agreement.
- The RFP shall formally solicit binding Final Offer from Bidders.
- The Project Officer shall adopt the Model Request for Proposal for PPP Projects dated November 30, 2007 issued by PF-II Section, Department of Expenditure, Ministry of Finance, as amended from time to time. The Contracting Authority shall deviate from the model documents referred in this sub-Rule only for the purpose of making the model documents suitable for a particular sector or PPP Project. All such deviations from the model tender documents shall be with the approval of PPPAC for Type I PPP Projects and relevant Approving Authority for Type II PPP Projects.
- The Request for Proposal shall necessarily have the following components:
- Feasibility Report/ Project Information Memorandum: This component of the RFP is directed towards providing such information to Bidders that is adequate for them to evaluate the PPP Project and estimate their Final Offer. Such information would include, but would not be limited to:
- Project objectives and rationale;
- Site details;
- Role of the Appropriate Government, key agency and stakeholders;
- Project scope in accordance with Rule 80: and
- Output specifications;
- Instruction to Bidders: This component of the RFP is directed towards defining the process of Bid submission and evaluation. This section shall include all procedures, terms and conditions which should be followed by the Bidders for submission of their Bids and which would be followed by the Contracting Authority in accepting and evaluating the Bids;
- The draft Concession Agreement which shall govern the contractual relations between the Concessionaire and Contracting Authority. The draft Concession Agreement shall contain rights and obligations of both the parties, definition of the subject matter of the agreement, payment terms, performance obligations, defaults and their consequences, events of termination and other ancillary clauses. The provisions of the draft Concession Agreement shall necessarily cover:
- Recitals- identifying the parties to the contract, offer and acceptance;
- Definitions- defining the key terms of the contract to ensure uniformity of usage and interpretation throughout the document;
- Scope of the PPP Project;
- Grant of concession, whereby the Contracting Authority grants the concession to the Concessionaire subject to the terms and conditions of the Concession Agreement;
- Conditions precedent;
- Obligations of the Concessionaire;
- Obligations of the Contracting Authority;
- Representations and warranties of both the parties;
- Form and value of Performance Security to be submitted by the Concessionaire;
- Matter related to the site;
- The construction of the facility including minimum technical requirements thereof, date for completion of construction etc.;
- Performance monitoring during construction including key performance indicators, monitoring responsibilities and related provisions;
- Completion of construction including provisions for testing, approval and certification;
- Change in scope during the contract period;
- Operation and maintenance of the facility and provision of service including minimum technical requirements;
- Performance monitoring during operations and maintenance including key performance indicators, monitoring and reporting responsibilities and related provisions;
- Appointment, role and functions, remuneration and reporting requirements of Independent Engineer;
- Financial close;
- Grant or revenue share/ premium;
- Payments by users, authority for tariff fixation, procedure of revision of tariff and related provisions;
- Collection of user charges, including allocation of the authority to collect and retain user charges;
- Financial aspects of the contract including escrow account, other payments between the parties to the contract;
- Maintenance of books of accounts and audit requirements;
- Insurance;
- Force Majeure definition, procedure for recognition under the contract, consequences and compensation on termination due to occurrence of Force Majeure events;
- Events of default and consequences of default;
- Termination of the contract and consequences of termination;
- Assignments and charges;
- Change in law including consequences for change in law;
- Liability and indemnity; and
- Dispute resolution.
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| Rule 80: Project Scope
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- The Contracting Authority shall set out the detailed description of the PPP Project and the project scope in the RFP.
- To the extent practicable, the description of the PPP Project and project scope shall be objective, functional and generic, and shall set out the relevant technical, quality and performance characteristics expected. There shall be no requirement for or reference to a particular trademark or trade name, patent, design or type, specific origin or producer unless there is no sufficiently precise or intelligible way of describing the characteristics of the project scope and specifications and provided that words such as or equivalent are included.
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| Rule 81: Evaluation Criteria
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- The Contracting Authority shall select a Preferred Bidder solely on the basis of highest or the lowest Final Offer, as specified in the RFP.
- The criterion specified in the RFP may be:
- grant sought,
- expected revenue,
- tariff,
- present value of lifecycle cost,
- period of the concession,
- upfront premium,
- equity stake,
- extent/share of subsidized facilities to the Contracting Authority;
- revenue share
- The RFP shall clearly and specifically define the form and content of the Final Offer and state that Preferred Bidder shall be selected on the basis of the most advantageous Final Offer.
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| Rule 82: Schedule of Bid Process
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The following minimum periods shall be followed by the Contracting Authority while
determining the schedule of the RFP Stage:
- The Due Date shall be no later than 6 (six) weeks from the date of advertisement/notification of the RFP;
- The pre-Bid meeting shall be held not less than 3 (three) weeks before the Due Date;
- The clarifications on the queries of Bidders shall be issued not less than 2 (two) weeks before the Due Date; and
- Corrigenda or notifications of amendments in RFP or Draft Concession Agreement shall be issued not less than 2 (two) weeks before the Due Date.
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| Rule 83: Obtaining approval to proceed with issue of RFP
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- Prior to the issuance of the RFP and the Concession Agreement to all Bidders, the Contracting Authority shall obtain an approval:
- from PPPAC, as per Guidelines for Formulation, Appraisal and Approval of Central Sector Public Private Partnership Projects , notified by the Ministry of Finance, Department of Economic Affairs vide OM No. 1/5/2005 PPP dated January 12, 2006 and as suitably amended from time to time, for Type I PPP Projects; and
- from the Approving Authority before issuing the RFP and the Draft Concession Agreement in the case of Type II PPP Projects.
- In case of all Type I PPP Projects, the Contract Authority:
- shall obtain approval of the Approving Authority upon receiving approval from PPPAC; and
- may invite Bids upon approval of PPPAC and pending approval of the Approving Authority. In such an event, the Due Date shall be only after receipt of the final approval from the Approving Authority.
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| Rule 84: Data room
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- The Contracting Authority shall maintain a data room where project-specific information shall be kept.
- All Bidders shall be allowed to access the data room during reasonable working hours. The data room will be maintained by the Contracting Authority until the completion of the RFP Stage.
- The data room shall be maintained in a single location, for a limited period of time, where the Bidders shall be permitted only to review such documents, which otherwise are not allowed to be distributed.
- The location and rules for accessing the data room should be stated in the RFP.
- The Contracting Authority may also provide a virtual data room through a secure website where project-specific information can be accessed online by authorised viewers.
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| Rule 85: Site visit
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- If the PPP Project involves important site-related issues, a site visit shall be organised early in the RFP Stage.
- All Bidders shall be invited to undertake the site visit.
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| Rule 86: Change in composition of consortium
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- Where the Bidder is a consortium, change in the composition of a consortium may be permitted by the Contracting Authority prior to the Due Date, only where:
- The application for such change is made no later than 15 (fifteen) days prior to the Due Date;
- The lead member of the consortium remains unchanged;
- The substitute is at least equal, in terms of technical capacity, to the consortium member who is sought to be substituted and the modified consortium continues to meet the pre-qualification and short-listing criteria for the Tender Proceedings;
- The new member(s) expressly adopt(s) the Responses already made on behalf of the consortium as if party to it originally, and
- The new member(s) does not have a Conflict of Interest in terms of Rule 41:.
- Approval for change in the composition of a consortium shall be at the sole discretion of the Contracting Authority and shall be communicated by the Contracting Authority to the Bidder in writing.
- The modified/ reconstituted consortium shall submit a revised joint bidding agreement before the Due Date.
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| Rule 87: Effectiveness of Bids
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- Bids shall be in effect during the period of time specified in the RFP.
- Prior to the expiry of the period of effectiveness of Bids, the Contracting Authority may request Bidders to extend the period for an additional specified period of time. A Bidder may refuse the request without forfeiting its Bid Security.
- If a Bidder agrees to extend the period of effectiveness of its Bid, the Contracting Authority shall procure an extension of the period of effectiveness of Bid security as provided by such Bidder or call for new Bid security for the additional specified period of time.
- If a Bidder has not extended the Bid Security, or has not provided a fresh Bid Security, it shall be considered as refusal of the request to extend the period of effectiveness of its Bid.
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| Rule 88: Opening of Bids
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- Subject to sub-Rule (2) of Rule 88:, the Contracting Authority shall open the Bids on the Due Date, and at the time and place and in the manner and procedure specified in the RFP in the presence of Applicants who choose to attend.
- The Contracting Authority may in exceptional circumstances defer the date for opening of the bids and record in writing the reasons therefor.
- Until the opening of the Bids, the Project Officer shall ensure that the Bids and Final Offer remain unopened and are stored in secure location.
- All Bidders who have submitted Bids, or their representatives, shall be permitted by the Contracting Authority to participate in the opening of Bids.
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| Rule 89: Evaluation of Bids
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- Evaluation of submitted Bids shall be carried out by the Tender Evaluation Team, assisted by the transaction advisor where necessary. The Bid evaluation shall follow the pre-determined criteria as specified in the RFP.
- The Independent Monitor shall be present for all Bid evaluation meetings and minutes of the proceedings of Bid evaluation shall be maintained as part of record of Tender Proceedings.
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| Rule 90: Prohibition of negotiations
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| No negotiations shall take place between the Contracting Authority and a Bidder with respect
to a Bid submitted by the Bidder. |
| Rule 91: Selection of the Preferred Bidder
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- All Bids adjudged responsive shall be ranked in accordance with the evaluation criteria specified in RFP and the first ranked Bidder shall be the Preferred Bidder.
- In the event that the first ranked Bidder withdraws or is not selected for any reason, in the first instance (the first round of bidding ), the Contracting Authority may invite all the remaining Bidders to revalidate or extend their respective Bid Security, as necessary, and match the Bid of the aforesaid first ranked Bidder (the second round of bidding ).
- If in the second round of bidding, only one Bidder matches the aforesaid first ranked Bidder, it shall be selected the Preferred Bidder. If two or more Bidders match the said first ranked Bidder in the second round of bidding, then the Bidder whose Bid was ranked higher as compared to other Bidder(s) in the first round of bidding shall be selected the Preferred Bidder. For example, if the third and fifth ranked Bidders in the first round of bidding offer to match the said first ranked Bidder in the second round of bidding, the said third rank Bidder shall be the Selected Bidder.
- In the event that no Bidder offers to match the said first ranked Bidder in the second round of bidding as specified under this Rule, the Contracting Authority may in its discretion, either initiate a new Tender Proceeding or abandon the PPP Project.
- The results of evaluation of Bids along with the report of Independent Monitor shall be submitted to the Approving Authority, or to such competent entity to which power for approval has been delegated specifically, for approval.
- The Preferred Bidder shall be notified by the Contracting Authority after obtaining approval of the Approving Authority or from such competent entity to which power for approval has been delegated specifically.
- Simultaneous with the receipt of approval of the Approving Authority, the Contracting Authority shall communicate to other Bidders about the selection of the Preferred Bidder, and its intention to execute the Concession Agreement with the Preferred Bidder.
- After selection, a letter of award (the Letter of Award ) shall be issued, in duplicate, by the Contracting Authority to the Preferred Bidder with the condition that the Preferred Bidder shall, within 7 (seven) days of the receipt of the LOA, sign and return a duplicate copy of the LOA in acknowledgement thereof.
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| Rule 92: Treatment of sole Bid
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- In case of the competitive bidding process resulting into a sole Bid, the Contracting Authority shall, either:
- accept the sole Bid, if the Tender Evaluation Committee is of the opinion that retendering will not yield more Bids and there is a clear value for money in accepting the sole Bid, or
- reject the sole Bid.
- In case the sole Bid is accepted, negotiation with the Bidder to ascertain better terms for the Contracting Authority may be undertaken provided these negotiations result in better terms for Contracting Authority than outlined in RFP document.
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| Rule 93: Treatment of two equal Bids
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In the event that two or more Bidders have quoted the same Final Offer, Contracting
Authority shall identify the Preferred Bidder by adopting one of the following approaches,
which shall be pre-specified in the Tender Documents:
- by taking in account the aggregate experience score of each such bidder from the RFQ Stage, wherein the Bidder with higher score shall be adjudged the Preferred Bidder; or2 2 At present model RFP provides for draw of lots, to be conducted, with prior notice, in the presence of the Tie Bidders who choose to attend.
- by asking the two Bidders to provide their best and final offer. The Bidder offering the most advantageous Final offer shall be adjudged the winner.
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| Rule 94: Treatment of speculative Bids
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- The Contracting Authority may reject a Bid if it has determined that the Final Offer in combination with other constituent elements of the submission is abnormally low or abnormally high in relation to the subject matter of the procurement and raises concerns with the Contracting Authority as to the ability of the Bidder that presented that submission to perform the PPP contract, provided that the Contracting Authority has:
- requested in writing from the Bidder details of the submission that gives rise to concerns as to the ability of the Bidder to perform the PPP contract; and
- taken account of any information provided by the Bidder following this request, and the information included in the submission, but continues, on the basis of all such information, to hold concerns.
- The decision of the Contracting Authority to reject a submission in accordance with this Rule and the reasons for that decision, and all communications with the Bidder under this Rule, shall be included in the record of the Tender Proceedings. The decision of the Contracting Authority and the reasons therefor shall be promptly communicated to the Bidder concerned.
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| Rule 95: Contract finalization and award
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- Subject to fulfilment by the Preferred Bidder of the requirements specified in the RFP and of the LOA, the Contracting Authority shall execute the Concession Agreement with the Preferred Bidder.
- Except as provided Rule 92:, the Contracting Authority shall not engage in negotiations on or modifications to the draft Concession Agreement as per the RFP.
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