L1, evaluation and negotiation

The portal publishes the financial opening and your name is at the top. Congratulations, and slow down: L1L1 (lowest bidder)The bidder with the lowest evaluated price among those who qualified technically. L2 is the next, and so on. Under the KTPP Act the department may negotiate only with L1.Read in the glossary → is a ranking, not a contract. Between this moment and the Letter of AcceptanceLOA (Letter of Acceptance)The letter telling you your bid has been accepted. From here you have a fixed number of days to pay the security deposit and sign the agreement.Read in the glossary → the department does four things, and any of them can take weeks.

1. The arithmetic check

The evaluator recomputes your bid. In an item-rate tender, unit rate times quantity for every line, then the total; if the total you wrote disagrees, the unit rates prevail and the total is corrected. In a percentage-rate tender there is little to check. You are asked to accept the corrected figure; refusing forfeits the EMD (Module 4). Check your own arithmetic before you submit and this stage is a formality.

2. Reasonableness

The evaluator compares L1 with the estimate. Below or at the estimate: acceptable as a rule, with attention to bids far below it (unbalanced rates, additional security). Above the estimate: the department has three options, in order: negotiate with L1, accept the premium with the sanction of a higher authority if the excess is within the limits delegated to it, or reject all bids and retender. Modest premiums on works where the SR has fallen behind material prices are often accepted; large premiums usually mean a retender.

3. Negotiation

Section 13 of the KTPP Act allows negotiation only with the lowest tenderer, and in practice only to bring the price down. You receive a letter or a portal notice inviting you to a negotiation on a date; you attend (or reply in writing) and either agree to a reduced rate, hold your price, or offer something in between. Three things to remember:

• You may say no. Holding your price is not a withdrawal; the EMD is safe. The department then accepts, or rejects all bids.
• Your costing is your defence. A contractor who can show the bitumen quotation behind the premium negotiates from strength.
• Nobody else is in the room. L2 cannot be invited to undercut you. The pressure is only the threat of a retender, which costs the department months.

4. Scrutiny and sanction

Works above ₹5 crore in PWD and the irrigation departments, and ₹1 crore elsewhere, go to a Tender Scrutiny CommitteeTender Scrutiny CommitteeA committee that reviews larger tenders before award: above ₹5 crore in PWD and irrigation departments, above ₹1 crore elsewhere. Adds weeks between closing and award.Read in the glossary → that reviews the process and the price before acceptance. Every work also needs the acceptance of an authority with the financial power for that value: the Executive Engineer for small works, the Superintending or Chief Engineer, the government for the largest. Each signature is time.

Single bids and too few bids

If yours was the only bid, the department will usually retender rather than accept a single tenderSingle tenderOnly one bid was received. Departments usually retender rather than award on a single bid, unless the rules allow it and the price is reasonable.Read in the glossary →, unless it is a second call or the rules allow acceptance and the price is reasonable. The same often happens with two bids. It is disappointing to be L1 of one; it is also information: the next call is likely to close with you and one other, and you can price accordingly.

What to do while you wait

• Line up the security deposit and, if the tender asks, the bank guarantee; the LOA gives you only days.
• Confirm the site engineer and the equipment you listed are available on the start date.
• Read the conditions of contract properly now: measurement, billing, escalation, LD, DLP. Module 5 walks through them.
• Keep bidding elsewhere; an L1 that becomes a retender should not have cost you a month of other tenders.