Ethiopian Business Development Services Network (EBDSN)

 Winning Tenders

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Participation on Tenders 


 
Bid
Announcements from a Marketing Perspective 
[top

From a marketing point of view, tendering is an efficient method to minimize the purchasing price and to create higher competition. Preparing tender documents for competitive government bids as well as every day non-competitive, non-government pitches take time. Some may be frustrated by the time it takes to prepare a tender document.

Bidding is never a simple or a straightforward task. The technique of the tender process has to be a vehicle to buy at a good price and with a high quality product or service in a fixed period of time. The formula for conducting successful tendering requires planning. When preparing a tender announcement document, the following issues have to be considered from the market point of view:

  • the type of product/service required;

  • the quantity needed; time schedule;

  • the stock level and the purpose of buying;

  • the situation of potential suppliers and the state of competition.
     

Contents of a Bid Notice  [top

Bid notice contains various issues on the following main topics:

  • authority in charge of tender (name and address);

  • scope of tender, short description of tender subject (product or service type, specification, quality and standard level);

  • bases for delivery (where to deliver, how to deliver);

  • bid documentation compulsory contents (form of bid bond, bank guarantee, evidence as to the conditions’ fulfilment);

  • conditions to be fulfilled by the bidder in order to be inserted into the potential suppliers or service providers list (registration with the concerned authority, all taxes or other enforced government taxation levied in accordance with legal requirements of the country, no measures implemented against the bidder);

  • date and hour of cut-off to submit the bid (the bid’s arrival at the latest time, address to submit the bid);

  • department and person responsible from whom to get tender documentation (time extent, day and time to get it, observance of the charge payment);

  • amount and manner of payment for tender documentation (bidder’s fee within the locality, bidder’s fee outside the locality);

  • dealing and marking of bidding documents;

  • bid opening date and manner of opening;

  • restrictions on the side of the tender authority;

  • criteria for bid evaluation (monetary investment, professional references, character and extension of participation).
     

Citing an Example of a Domestic Bid Announcement  [top

In case the source of funding for procuring the supply is from Ethiopia and the invitation is mainly for potential domestic bidders, bids are normally published in government newspapers. Hence, an example of a tender invitation, which was issued in the Ethiopian Herald, is demonstrated below. If the looms requested in the example below would be at a smaller scale so micro and small enterprises (MSEs) would be potential suppliers, it would be important to note the announcement carefully.

 

Example

Tender Invitation
No. KTSC-05/2003

 

Kombolcha Textile S.C. would like to invite eligible suppliers for the supply of 4 pcs. of weaving looms on tender basis.

The objective of purchasing 4 pcs. of looms is a pilot project to change the existing old versamat looms by better low cost weaving looms to produce both local and export products.

Bidders can obtain bid documents against non-refundable payment Birr 30 from the office of the Commercial Department of the Company, located near the Ministry of Defense, or from the head office of the Company (Kombolcha-Wollo). Bidders should submit their offer and technical specification sealed and separately within 30 days of the first announcement of this tender to the address of the company as indicated in the bid documents along with 1% bid bond in cash, C.P.O. or bank guarantee (insurance guarantee will not be considered).

The bid will be opened at the 5th day of the closing date of the bid at 7:0am in the presence of the bidders at Kombolcha, Wollo. The company has the right to reject partially or the whole of the tender.

 

Address:

Tel. 251-1-51-3797/511805, 251-3-510215/510103
Fax  251-1-511771, 251-3-510266

Kombolcha Textile Share Company

 

  Source:  The Ethiopian Herald, Wednesday 31 December 2003

 

Characteristic of an International Bid  [top

The nature of international bidding varies from domestic bidding. International bids require that a notice be placed in well-known magazines or daily newspapers and trade publications of wider international circulation. The time allowed for bidding on an international level is therefore much longer than that for domestic bidding. An example of an invitation to bid where the fund was partially or totally from the African Development Bank will be cited below:

 

Example

Invitation to Bid

Date 31 December 2003
Loan No. ADF/ETH/EDU-3/98/40
IFB No. ADF/NCB/BEN/01/2003

1. The Federal Democratic Republic of Ethiopia has received a loan from the African Development Fund in various currencies towards the cost of Education III project. It is intended that part of the proceeds of this loan will be applied to eligible payments under the loan agreement for the construction of two new primary schools in Metekel Zone for Eyaja and Albasa Village Primary Schools. Bidding is open to all bidders from eligible member countries as defined in the ADB's rules of procedures for the procurement of goods and works.

2. The Benishangul Gumuz Regional State Education Bureau now invites bids from eligible bidders for any or all of the lots described below. Bidders shall be in the category of GC/BC 7 and above, and who have renewed their license for the years 2003/2004.

3. Complete set of bidding document may be purchased at the Regional Works and Urban Development Bureau Engineering Department, P.O. Box 53. Tel. 07 - 75 03 98 / 75 03 95 upon submission of written request and non-refundable fee of Birr 150 or its equivalence in a freely convertible currency, for each lot. Interested eligible bidders may obtain further information and inspect the bidding documentation at the same address.

4. The provisions in the instructions to bidders and in the general condition of the contract are the provisions of the African Development Bank standard bidding documents: Procurements of small works.

5. Bids shall be valid for a period of 120 days opening and must be accompanied by a bid security, in the form of C.P.O. of at least 2% of the bid amount or its equivalent in a freely convertible currency, from a reputable bank and shall be delivered to the above office on or before Friday, Feb.13, 2004, 10:00am local time. They will be opened in the presence of the bidders or their respective representatives who wish to attend at Monday, Feb. 16, 2004, 4:00pm local time at the same address above.

6. The employer reserves the right to reject any or all bids.

 

Benishangul Gumuz Works
and Urban Development Bureau
P.O. Box 53, Assosa
Tel. 07-75 03 98, Assosa

 

   Source:  The Ethiopian Herald, Wednesday 31 December 2003

 
 

Rejection of Bids and Bid Extensions  [top

There can be various reasons for bid invitations to be cancelled or rejected after the announcement. Bid-inviting organizations put the statement that they have the right to reject part or all bids. Even after responses are delivered, rejections of some documents presented by suppliers are inevitable. Not all bidders can be winners.

Tender participants need to handle any potential buying objections in advance and try to turn those disapprovals and complaints into buying triggers. Some of the main reasons for rejecting are the following:

  • the bid did not meet the circumstances mentioned in the tender;

  • the license was not renewed or not valid any more;

  • the tax clearance certificate was not presented;

  • the renewal registration certificate on the specific products/services invited for bidding was not presented;

  • the technical data required were altered;

  • the budget allotted for the purchase was not compatible with
    the offer;

  • the document was not signed and sealed;

  • the bid received enclosed critical irregularities.

If the bid is rejected, the bidders are not allowed to compensation. For various reasons bid announcements are sometimes extended by the newscasters or announcers. The extensions are in relation to submission dead lines, and opening dates. In the issue of time addition some bidders are seen to complain but it is appropriate and can be done for various reasons. One example of bid extension will be shown below.

 

Example

Bid extension

As time extension for the bid submission date for furniture and fitting is required, the submission date, which was scheduled to be January 08, 2004 announced in The Ethiopian Herald Vol. LX-No. 076 on 9th December, 2003 and Vol. LX-No. 078 on 11th December 2003, is extended to January 15, 2004 on or before 9:00am local time. All other instructions and conditions remain enforcing.

Commercial Bank of Ethiopia

 

    Source: Ethiopian Herald, January 4, 2004

 
 

Micro and Small Enterprises' (MSEs) Role in Tender Issues/Subjects  [top

When micro and small enterprises (MSEs) are issuing tenders to buy raw materials, unique products, or expensive services, it is important to follow the bid procedure as well as all legal procedures. If MSEs are looking for suppliers of unique and upscale or high standard products, their buying announcements need to be strategic and be based on an intense bid program.

Like in any other business, participating in a tender requires planning. If invitations to tender do not contain all relevant information that enable the potential bidders to make a competitive offer at the first time, they may need to repeat the bidding exercise taking more time and cost resources.

In contrast, if micro and small enterprises are ready to participate as suppliers or service providers in a tender, they need to take the opportunity to clearly reply to the potential buyers’ requirements and supply professional bidding documents.

In the event where competition is severe bidders need to be tactical in their presentation and responses. In general, they need to quote prices so as to convince prospective buyers that they will receive a good return on their investment.
 

A winning Bidding Document (bid responding)  [top

If a tender participant wants to succeed in a tender, following the below listed tips could help:

  • plan for a serious participation and not for a half-hearted parttaking;

  • understanding the priorities of buyers is an important factor to consider before writing the proposal;

  • study the demand level of the item/service required to be procured;

  • the structure and words of the document to be presented has to be sellable and persuasive to prospective buyers;

  • set pricing strategies that will impress potential clients for getting exceptional value for the money they pay;

  • the delivery time of services is an important aspect; express it in a very appealing manner;

  • find out about prospective buyers’ vital requirements;

  • learn competitors’ way of participation (if beneficial) and make use of it;

  • in the event where technical involvement is required during and after supplying, impress your prospective buyers by highly-skilled professionals;

  • clearly emphasize your strengths;

  • safely underplay any inadequacies of your business;

  • look into how to outline your document and make it persuasive, readable and comprehensive in order to establish a good thought and feeling;

  • make your outline as persuasive as possible in order that the offer is perceived feasible and valuable by the decision makers;

  • plan in advance how to adjust your offer according to the request and requirements of the tender provider if asked at any time;

  • find out what your competitors are doing and use the information and records to stand out against them;

  • find out about the prospective buyers’ techniques for comparing different offers;

  • in the event you have to justify your outline and demonstrate your products, set strategies on how to present yourself.
     

Bid Formats  [top

There are various bid forms that are important in a tender procedure. Some of the main forms are the following:

Invitation to tender: Invitations to bid are published for a minimum duration. They should be published at least twice in one consecutive week in The Ethiopian Herald and/or Addis Zeman or other public media.

Instruction to bidders: every instruction should include:

  • the methodology of evaluating the bids including the evaluation criteria;

  • an indication of what the bidders should include in their offer: type of item, name of the producer, country of origin, model number and year of manufacture;

  • the information that a Certificate of Registration in the supplier’s list is required;

  • the information that bidders must indicate their name, signatures and addresses;

  • an indication that the bidders shall not alter or amend and that they shall not withdraw their tender after the opening ceremony;

  • an indication that bidders, who attempt to influence the tender shall be disqualified from that contract, future Government contracts and shall forfeit its bid security;

  • the place and the time where bidding documents will be presented to the public and an indication that the samples shall be returned to unsuccessful bidders;

  • the time and place of delivery of proposals;

  • the validity date of the tender;

  • an indication of bid and performance securities required;

  • the date and time of the closing deadline for bids and the opening of the bids;

  • the indication that bidders must observe the country's laws against fraud and corruption (including bribery) during the procurement process.

Contract forms: With this form the purchaser and the supplier agree on specific conditions. The points for agreement include for example the product type and technical specification, price tables, general circumstances for pertaining the agreement, delivery schedules or governing law.

Bid form: The points that are included in such form are total price, guarantee of money for x % of the contract value for the due performance of the contract, agreement on not accepting any other bid after the signing of this contract.

Price schedule: This form takes care of issues concerning the description of the item, its quantity, country of origin, unit price, and total price.

Performance security form: This document is usually used as a guarantee by institutions like banks and insurance companies on behalf of the supplier. It fixes payments in case of default by the suppliers or service providers.

Bid security form: This form is used to guarantee payment in order to enable a bidder to participate in a tender invitation. It refers to situations where the bidder fails to comply with the tender requirements except in the case of force majeure. It specifies clearly the guarantee validity date.

Manufacturer's authorization form: This document is meant to contain issues like authorization of manufacturers to their agents and warranting for the supply of goods. This manufacturer’s form is mostly required to be stated on the letterhead of the manufacturers and be signed and sealed by them.

Payment for Bidding Documents

Bidding documents may be sold to any interested bidder upon the submission of a written application and a non-refundable fee.

 

For more details on Tenders
refer to the Tender Guide

 

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