I saw a bid evaluation process recently for membrane equipment that I hadn’t seen in about 10 years. I thought this type of evaluation had seen its last days with the demise of the bids that only allowed the ‘big-three’ proprietary system suppliers (Pall, Memcor, Zenon). I guess there are some engineers/owners still living in the past who don’t realize that bidding processes of the old days are not relevant for evaluating between todays’ membrane system suppliers (MSSs).
This particular bid process required bidders to provide in
one envelope (#1) a technical proposal, including qualification and experience
criteria, and in the other envelope (#2) the pricing and other commercial
information. The owner and/or owner’s engineer would review the technical
proposal and select the best qualified submission and only open the pricing
proposal for that bidder. If the price met budget they would start negotiations
to award to that bidder without looking at pricing for any other bidders. Out
of the four MSSs invited to bid, one of these was one of the big-three
and would clearly have the most references and be chosen as having the best
score out of the technical proposals. So why would the other three bother
bidding? Maybe some would hope the favorite in the race did not turn up for
some reason?
In the old days, the big-three would bid nearly
everything to try get market share in a fast growing and evolving market. Well
hello, the MF/UF market is now quite mature, MSSs are often bidding with the same
membranes supplied by independent vendors and decisions on whether to bid or
not are based on whether the project can be profitable rather than buying
market share. So, if you don’t have an open and fair bidding process, there may
be only one bidder, which does not look good for the writer of the
specifications.
This bidding situation had the look of the engineer/owner really
wanting to select one manufacturer while keeping that manufacturer’s price
honest. As long as the price is within budget, that manufacturer’s price could
be higher than all others and the owner would never know. These days for MF/UF
system procurement it is common to see a prequalification stage where a short
list is made of manufacturers based on experience, company financial stability,
references, local service, etc and then these bidders have a competitive bid
based on price. That way the owner and engineer are happy with the quality of
the bidders and the owner gets the best price from these bidders.
Another bidding process that is a combination of the above
has a scoring matrix where price (or NPV) is say 40-60 points out of 100, with
the rest of the points spread across reference installations, local service
capabilities and other factors. This evaluated bid process can still allow the
engineer/owner to pick the MSS they prefer using the subjective scoring factors, as long as the pricing of the preferred vendor is not too high. But at least
all bidders will get their prices considered and therefore more MSS’s will
likely bid, even those scoring lower on the non-price factors. As Lloyd said
in Dumb and Dumber “So your saying there’s a chance”. I still think
this bid process is not ideal, but if it is an open bid with no favorite, I’ll
take this this type of evaluated bid over the two-envelope lucky draw...
Of course, if I am in the shoes of the preferred
manufacturer with the best experience, I’ll take the ol’ two envelope bid
process but sooner or later when this process yields only one bidder, somebody
will end up looking dumb…
The comments and opinions in this post are my own and not those of my employer.
