Case study:

The Central Water Authority (CWA) invited bids for supply of cold water meters. As the estimated cost was above the prescribed amount, the bidding documents and the procurement notice were cleared by the Central Procurement Board (CPB). After the opening of bids, the CPB appointed a Bid Evaluation Committee (BEC) to examine and evaluate the bids and to make suggestions for the award of contract. The CPB reviewed the suggestions of BEC and approved the award of contract to Bidder X.

The CWA proceeded with the notification of proposed award to the selected bidder for the value of Rs33, 580,000 and to the unsuccessful bidders. Dissatisfied with decision of the CWA to award the contract Bidder X, Bidder Y challenged the award. In response to the challenge, the CWA informed Bidder Y that Bidder X was being awarded the contract as it had submitted the lowest evaluated bid. Still not satisfied, Bidder Y filed an application for review at the Independent Review Panel (IRP) against the decision of the CWA.

In its application, Bidder Y stated:  “That Bidder X being a domestic company incorporated in April 2007 dealing in importation of wood and registered as such is not and is deemed not to be in line of business of supply of cold water meters and therefore Bidder Y contends that the CPB has taken in account irrelevant considerations and has disregarded appropriate matters whilst reading its decision to award the contract to the said timber Connections Ltd.”

The IRP found that the BEC had allocated full marks to the selected bidder for past experience of 5 years when it had been incorporated only a year ago and no evidence of past experience had been submitted. Moreover, non responsive bids were evaluated, while receptive bids were ignored.

The IRP recommended the review of the decision of the CWA intending to award the contract to Bidder X. Following the decision, the CWA referred the matter to the CPB. The latter informed the CWA that after review it has decided to maintain its approval for award of the contract to Bidder X on ground of value for money. Procurement experts argue that although value for money is a prime objective of a public procurement system, it shouldn’t be viewed in isolation. Based on the above case study, answer the following problems:

(a) What were the mistakes committed by the BEC and the CPB in the above case which led to the approval of award to a non responsive bidder and how could they have been avoided?

(b) Was it in order for the CPB to maintain its decision on ground of value for money? Give two reasons to support your opinion.