Reverse Tendering Housing Department AP State Housing Corporation

Reverse Tendering Housing Department - AP State Housing Corporation 1

Procurement of Materials through Reverse Tender process Ø The Govt. have issued orders sanctioning 15, 10, 227 houses as approved in the cabinet vide G. O No. 8 dt. 02. 12. 2020 with a unit cost of Rs. 1. 80 lakhs and with a Project Cost of Rs. 27, 184. 09 Crs under PMAY-YSR Urban –BLC scheme. Ø On thorough study, feedback from districts and Mana Paalana- Mee Suchana it is observed that the eligible beneficiaries are unable to make initial investment for procurement of materials and construct the house to the prescribed stage to become eligible for getting payment since stage wise payments are being made only after reaching the stage (BL, RC etc. , ) thereby causing abnormal delay in completion of houses. Housing Department - AP State Housing Corporation 2

Procurement of Materials through Reverse Tender process Ø Large no. of houses sanctioned earlier are held up at various stages of construction and beneficiaries are also falling into debt trap , borrowing money from local money lenders for initial investment for procurement of materials, and hence proposed to procure qualitative construction materials and provide to beneficiaries. Housing Department - AP State Housing Corporation 3

Procurement of Materials through Reverse Tender process Ø One of the ways in reducing financial burden on beneficiaries is by way of procurement of cement by the department at reduced prices. All cement manufacturers were invited and negotiated at the highest level in the Govt. and finalized rates which were lowest and far below the market price and orders have been issued by Industries Dept. vide G. O Ms No. 32, dt. 13. 04. 2020. This has ensured getting of cement at lesser price than the market and also assured quality (PPCRs. 225/- per bag and OPC – Rs. 235/- per bag). Housing Department - AP State Housing Corporation 4

Procurement of Materials through Reverse Tender process Ø It is proposed to facilitate the beneficiary in getting all other construction materials such as Steel, Electrical items, Water supply & Sanitary items, RCC door & window frames, Doors & window shutters, Paints, Roofing materials viz. , Galvalume roofing sheet and MS angle sections at State level and RR/ CR stone, Fal-G/ CC/SC Blocks, 20 mm & 40 mm metal, burnt clay bricks, RCC well rings and covers, Jallies and planks, Kadapa Slabs at District level at reduced rates. Housing Department - AP State Housing Corporation 5

Procurement of Materials through Reverse Tender process Ø To obtain the lowest possible rates for supply of materials to beneficiaries, tenders have to be floated and the Reverse Tendering Process is to be followed wherever the Tender value is more than Rs. 1. 00 Crore. Further, according to Act, 34 of 2019 of Go. AP all the Tender Documents in respect of the projects which exceeds Rs. 100. 00 Crores are to be submitted for Judicial Preview. Housing Department - AP State Housing Corporation 6

Procurement of Materials through Reverse Tender process Ø Government, after careful examination, approved the following recommendations of the Board of Chief Engineers for implementation in the process of tender-cum-Reverse Auctioning process or Reverse Tendering process vide G. O. No. 67 dated 16. 08. 2019 of WATER RESOURCES (REFORMS) DEPARTMENT. Ø All bidders shall self-declare their details under each technical and financial criterion on the e-procurement platform along with an undertaking confirming their compliance with the technical and financial criterion prescribed in the bid document. Housing Department - AP State Housing Corporation 7

Procurement of Materials through Reverse Tender process Ø All bidders shall submit supporting documents for their submittals under each technical and financial criterion. In case of documents found to be defective, incorrect or forged and therefore claim of qualification is not supported, severe action including forfeiture of EMD shall be taken. Ø The existing online e-procurement system shall be revamped in a such a way that the system should be able to filter the qualified bidders and enable them to quote their price bids and also allow them to participate in e-auction process. Housing Department - AP State Housing Corporation 8

Procurement of Materials through Reverse Tender process Ø The threshold values of Technical and Financial qualification as prescribed by the department shall be displayed to the bidders on the screen of online e-procurement site. The bidders have to submit their details of qualification criterion in prescribed text boxes along with their self-declaration on the fulfillment of qualification criterion prescribed. The system automatically evaluates the qualification details uploaded by the bidders and enable the qualified bidders only to quote for their price bid in the prescribed box for the work. Housing Department - AP State Housing Corporation 9

Procurement of Materials through Reverse Tender process Ø All bidders satisfying pre-qualification criterion as per their submittals and self-declaration on e-procurement site shall quote their price offer Ø The Price bids of all the bidders shall be opened and the lowest quoted price bid among the qualified bidders in the tender process shall be determined. Ø To conduct the reverse tender process at least two bidders would be required. Ø The L 1 Price Offer (Initial) shall be the maximum allowable Bid price for the reverse tendering process. Housing Department - AP State Housing Corporation 10

Procurement of Materials through Reverse Tender process Ø Only one round of reverse tendering shall be carried out in which bidders can revise their bids multiple times within the time limits specified. Ø At the start of the Reverse Tendering process the Maximum Allowable Bid Price will be set and bidders shall submit their bids in an online platform. Ø Names of the bidders / vendors shall be anonymously masked in the Reverse Tendering process and vendors will be given suitable dummy names. Ø The initial period of the Reverse tendering process will start after 3 hours, following which there will be auto extensions of time by 15 minutes in case of any reduction in bids recorded in the prior 15 minutes. Housing Department - AP State Housing Corporation 11

Procurement of Materials through Reverse Tender process Ø Only the current L 1 bid shall be visible to all bidders who may revise their bids until the end of the process. Ø Decrements made in each subsequent bid shall not be less than 0. 5% of the IBM/ECV uploaded. Ø The L 1 bid may be determined following a period of inactivity of more than 15 minutes of reverse bidding after the initial 3 hour period after closure of the main bidding. Ø Following the determination of the L 1 bid, the L 1 bidder’s supporting documents under each technical and commercial criterion shall be verified. The reverse tendering process shall be on hold for a maximum period of 24 hours (1 day) while the L 1 bidder’s supporting documents are verified. Housing Department - AP State Housing Corporation 12

Procurement of Materials through Reverse Tender process Ø Upon successful verification of the L 1 bidder’s supporting documents, the reverse tendering process shall be closed declaring the L 1 bidder as “successful bidder” and the remaining bidders in the process shall be notified as “unsuccessful” and their respective EMDs shall be refunded. Ø In case there are discrepancies between the L 1 bidder’s declarations under the technical and financial criteria and the supporting documents submitted, the L 1 bidder shall be disqualified, his EMD shall be forfeited, he will be removed from the reverse tendering process and the remaining bidders shall be notified of the date and time when the reverse tendering process shall be resumed. Housing Department - AP State Housing Corporation 13

Procurement of Materials through Reverse Tender process Ø The reverse tendering process shall be resumed with the L 2 price as the Maximum Allowable Bid Price. Ø Only 15 minutes shall be initially allowed for the remaining bidders to revise their bids, subject to automatic extensions of 15 minutes in case of any reduction in bids recorded in the prior 15 minutes. Ø The reverse tendering process shall continue until the determination of a successful bidder. Ø The above procedure is made applicable for “works mode”, for Goods and products the following change is to be made. Housing Department - AP State Housing Corporation 14

Procurement of Materials through Reverse Tender process Ø After the pre-qualification, technical evaluation shall be done, financial bids of the technically qualified bidders shall only be opened and L 1 will be identified and placed reverse auction process. Ø The reverse auction process will be done as explained in the earlier slides and final L 1 bidder will be identified and the work will be awarded. Ø This process will enable the APSHCL to get lowest possible rates compared to market prices which will lessen financial burden on the beneficiaries. Housing Department - AP State Housing Corporation 15

Thank You Housing Department - AP State Housing Corporation 16