Evaluating the Quotes and Selecting a Vendor

Evaluating the Quotes and Selecting a Vendor All evaluators are responsible for ensuring that the evaluation process is impartial, fair, and in accordance with MSH's policies and procedures and donor regulations. Prior to beginning the evaluation process, each evaluator must sign and date the MSH Conflict of Interest Certification Form which certifies that the individual has no conflict of interest with any of the vendors that submitted quotes. The Purchaser must evaluate the quotes in accordance with the evaluation criteria stated in the Request for Quotes (RFQ). If a quote contains an apparent mistake (such as a math error), the Purchaser should put any requests for clarification in writing to the vendor and request that the response be in writing and submitted by a specified deadline. The Purchaser selects a vendor in accordance with the Evaluation Criteria and documents the results on the Vendor Selection Form (VSF). Depending on the specifications included in the Request for Quotes (RFQ), it may be necessary to request that a subject matter specialist (with no conflict of interest) provide technical input (such as an IS/IT staff to review computer specifications). The subject matter expert would review only the detailed specifications in the quotes received to determine if they meet the technical specifications in the RFQ. The Evaluation Process The Purchaser evaluates the quotes using one of the following Evaluation Processes: A. Lowest Price Meeting Specifications Evaluation Process B. Best Value (Trade Off) Evaluation Process. A. Lowest Price Meeting Specifications Evaluation Process includes the following evaluation criteria: Using the Evaluation Criteria, the Purchaser selects the vendor. For the Meeting the Specifications Evaluation Process, the decision is based on the following criteria: a. Meeting all specifications b. Other Factors c. Price Let s go through the Lowest Price Meeting Specifications Evaluation Process. These are the Specifications for the Commercial Good: Specifications Request for Quotations Copier A. One ABC Brand Color copier OR EQUIVALENT with the following specifications: 51 pages per minute black & white; 20 pages per minute color Single pass duplexing document feeder Up to 5,000-sheet paper capacity/ Maximum paper weight 140 lb. index 1.5GB RAM/80 GB HDD Color Universal Send: Advanced Security PDF Feature Set: Scan to email desktop Scanning, faxing and OCR (optical character recognition) software. 1

B. Delivery Date The Copier must be received by July 1, 2010. C. Eligible Countries Quotes must identify the source, origin and nationality for the copier and maintenance services. (Source is where the copier is shipped from; origin is where the copier is manufactured; and nationality is the nationality of the supplier of the copier.) a. Geographic Code (Source, Origin and Nationality) Preference will be given to quotes which offer a copier that is made in and shipped from a county that is included in the list of eligible countries for Geo Code 000, from a vendor whose nationality is in a country within this Geo Code; and to quotes which offer a copier which is made in the United States and is available locally. The United States of America, the District of Columbia, and areas of U.S.-associated sovereignty, including commonwealths, territories and possessions are the eligible countries in Geographic Code 000. b. Local Procurement This project may also purchase locally available goods (commodities) of U.S. origin (made in the U.S.), which are otherwise eligible for financing; if the value of the transaction is estimated not to exceed the local currency equivalent of $100,000US (exclusive of transportation costs). c. Foreign Policy Restricted and OFAC Sanctioned Countries The copier may not be made in or shipped from any of the Foreign Policy Restricted and OFAC Sanctioned Countries as listed in the RFQ. This Project has a Geo Code 000 and includes the Local Procurement Clause. 1. Meeting the Specifications/Scope of Work The Purchaser reviews each vendors quote to determine if the specifications in the quotes meet the specifications in the RFQ, documenting the results on the Vendor Selection Form (VSF). Does each quote offer a commercial good and/or service that: a. Includes the specifications that were required in the RFQ? For example, if the copier specifications include 51 copies per minute; single pass duplexing document feeder; scanning, faxing and OCR software does each quote for the copier include these specifications? b. Can the vendor provide the commercial good and/or commercial service but the specified delivery date? A date of July 1, 2010 was stated in the specifications and the vendors must be able to provide the copier by that date in order to be considered to meet the specifications. c. Is not made in or shipped from a Foreign Policy Restricted Country, and is not from a supplier that is in a Foreign Policy Restricted Country. Quotes which do not meet this requirement cannot be the successful quote. If any of the quotes offers a copier with a source, origin or nationality from a Foreign Policy Restricted such as N. Korea, the quote cannot be selected. The current list of Foreign Policy Restricted Countries is: Cuba, Iran, Iraq, Laos, Libya, North Korea, and Syria. The list of countries can be found at: 22 CFR 228 (revised as of April 1, 2000) and the is the link: http://www.gpoaccess.gov/cfr/index.html d. Is not made in or shipped from an OFAC Sanctioned Country, and is not from a supplier that is not in an OFAC Sanctioned Country? Quotes which do not meet this requirement cannot be the successful quote. If any of the quotes offers a copier source, origin or nationality from a Foreign 2

Policy Restricted or OFAC Sanctioned Country such as N. Korea, the quote cannot be selected.. These lists change frequently and therefore the list of OFAC-sanctioned countries must always be checked before making any purchase. The list can be found at: http://www.treas.gov/offices/enforcement/ofac/programs/. The current list of OFAC Sanctioned Countries as of April 18, 2010 is: Balkans, Belarus, Burma (Myanmar), Cote d Ivoire, Cuba, Democratic Republic of the Congo, Iran, Iraq, Lebanon, Liberia (Former Liberian Regime of Charles Taylor), North Korea, Somalia, Sudan, Syria, and Zimbabwe. e. Meets the requirements of the applicable Geographic Code (Geo Code)? Reminder: Goods must be made in and shipped from a country in the list of eligible countries for the applicable Geo Code, and from a vendor with a nationality in the list of eligible countries for that Geo Code. The Geographic (Geo) Code for this Procurement is Geo Code 000 which means the Purchaser cannot purchase a copier for this project unless it is made in and shipped from a country in the list of eligible countries under Geo Code 000, and from a vendor with a nationality in the list of eligible countries under Geo Code 000, without prior written approval from USAID. The United States of America, the District of Columbia, and areas of U.S.-associated sovereignty, including commonwealths, territories and possessions are the eligible countries in Geographic Code 000. So determine if the copiers are made in and shipped from the US? Is the nationality of the vendor US? All contracts and agreements include a clause or section that provides the authorized three-digit geographic code (Geo Code) which specifies the source, origin, or nationality requirements that apply to the procurement of commercial goods and/or commercial services. Note: The source and origin of a commodity and the nationality of the supplier must be in a country or countries in the authorized geographic code. Below is information on the possible Geo Codes for projects: Geographic Code Code 000 -- The United States: Code 899 -- Free World: Code 935 -- Special Free World Code 941 -- Selected Free World: Other 3 digit codes Includes The United States of America, any State(s) of the United States, the District of Columbia, and areas of U.S.-associated sovereignty, including commonwealths, territories and possessions. Any area or country, except the cooperating country itself and the following foreign policy restricted countries: Cuba, Iraq, Iran, Laos, Libya, North Korea, and Syria. Any area or country in the Free World, including the cooperating country. Free World does not include the foreign policy excluded countries. The United States and any independent country (except foreign policy restricted countries) except the cooperating country itself and the following: Albania, Andorra, Angola, Armenia, Austria, Australia, Azerbaijan, Bahamas, Bahrain, Belgium, Bosnia and Herzegovina, Bulgaria, Belarus, Canada, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Gabon, Georgia, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Italy, Japan, Kazakhstan, Kuwait, Kyrgyzstan, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia,* Malta, Moldova, Monaco, Mongolia, Montenegro*, Netherlands, New Zealand, Norway, People's Republic of China, Poland, Portugal, Qatar, Romania, Russia, San Marino, Saudi Arabia, Serbia*, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, Taiwan*, Tajikistan, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, Uzbekistan, and Vatican City. *Has the status of a ``Geopolitical Entity'', rather than an independent country. Often the cooperating country is listed by its name and 3-digit code in the geographic codes clause of the contract. Contact the Corporate Contract Office if you need assistance in deciphering a code. 3

What if the quotes do not meet the Geo Code requirements? In this case, the vendors that submitted quotes are local their nationality is not in the U.S. However, they are offering copiers made in the U.S. for under $100,000. Local Procurement Clause If the Contract or Cooperative Agreement through which the Project is funded contains the Local Procurement Clause, the Purchaser must next check to see if the quotes meet the requirements of this Clause. Source and Origin Regulations Apply to Following Type of Cost Direct Costs (including subcontracts and consultants) Local Procurement Clause Local procurement (transactions made in the cooperating country usually using cooperating country currency) which are: 1. Locally available commodities of U.S. origin, which are otherwise eligible for financing, if the value of the transaction is estimated not to exceed the local currency equivalent of $100,000 (exclusive of transportation costs). 2. Commodities of Geographic Code 935 origin if the value of the transaction does not exceed $5,000. 3. Professional services contracts estimated not to exceed the local currency equivalent of $250,000. 4..The following commodities and services which are only available locally: a. Utilities, including fuel for heating and cooking, waste disposal and trash collection; b. Communications--telephone, telex, facsimile, postal and courier services; c. Rental costs for housing and office space; d. Petroleum, oils and lubricants for operating vehicles and equipment; e. Newspapers, periodicals and books published in the cooperating country; f. Other commodities and services (and related expenses) that, by their nature or as a practical matter, can only be acquired, performed, or incurred in the cooperating country, e.g., vehicle maintenance, hotel accommodations, etc.. If the Local Procurement Clause is applicable, does any of the quotes meet those requirements? The Local Procurement Clause allows the purchase of locally available commodities of U.S. origin, which are otherwise eligible for financing, if the value of the transaction is estimated not to exceed the local currency equivalent of $100,000 (exclusive of transportation costs.) All three quotes offer copiers made in the U.S., with a transaction (Purchase Order) price under $20,000, and available locally. The commodities are otherwise eligible because they are not ineligible goods (see the Restricted and Ineligible Goods (Commodities) List). If the total transaction for each copier was less than $5,000, copiers of 935 origin made in the Free World could be purchased without USAID prior approval. If none of the quotes meets the Geo Code requirements and the Local Procurement Clause is not applicable or the quotes do not meet one of the Local Procurement Clause exceptions, a USAID 4

waiver may be needed. If some of the quotes meet the Geo Code requirements and others don t, the ones that meet the requirements would be considered to better meet the qualifications than those that would require a waiver. Document on the Vendor Selection form compliance with the Geo Code or the Local Procurement Clause (if applicable) for each quote. Record on the Vendor Selection Form the results of this evaluation meeting the specifications. 2. Price The Purchaser lists each vendor s quoted price in the Price Analysis section of the Vendor Selection Form. Determine which of the quotes that quote meet the all specifications has the lowest price. Rank the quotes in order of lowest price meeting all the specifications. 3. Select a Quote Select the quote that meets the all specifications and offers the lowest price. 4. Past Performance For the quote selected, the Purchaser contacts the companies provided by the vendor in the Past Performance References section of the quote submitted by the vendor. The Purchaser asks the company references each of the questions on the Past Performance Reference Check form, and documents the company s responses on the form and then uses the information provided by the vendor s references to determine if the vendor has acceptable past performance. The Purchaser checks off the appropriate box on the Past Performance Reference Form Acceptable Past Performance or Unacceptable Past Performance. Note: If two of the quotes are very close when ranked, the Purchaser can check the past performance for the two that are close and use the Past Performance References as part of the decision-making as to which vendor is the best choice. 5. Eligibility to Receive Federal Funds If the procurement is in the ordinary course of business, the Purchaser conducts an EPLS check for the selected vendor, prints the results and attaches the printout to the VSF. If there are any possible matches, the Purchaser sends a request for Verification to FedCheck@MSH.org. If the procurement is not in the ordinary course of business, the Purchaser sends a request for Verification to FedCheck@MSH.org to ensure the vendor is eligible to receive Federal funds. If a Verification is requested, the Purchaser must wait for the results before entering into a Purchase Order with the vendor. SUMMARY If the vendor meets all the specifications and submitted the lowest price and has acceptable past performance and is eligible to receive Federal funds (no matches on EPLS), then the Purchaser selects that vendor. If the vendor meets the specifications and offers the lowest price and has unacceptable past performance or is not eligible to receive Federal funds, the Purchaser cannot enter into a Purchaser Order with this vendor and must return to the Vendor Selection Form, choose the vendor that meets the specifications and offers the next best price, and repeat steps 3 and 4 above until the Purchaser selects the vendor. 5

Now let s go through a Best Value (Trade Off) Evaluation Process with the following specifications and Other Factors. Specifications Request for Quotations Copier A. One ABC Brand Color copier OR EQUIVALENT with the following specifications: 51 pages per minute black & white; 20 pages per minute color Single pass duplexing document feeder Up to 5,000-sheet paper capacity/ Maximum paper weight 140 lb. index 1.5GB RAM/80 GB HDD Color Universal Send: Advanced Security PDF Feature Set: Scan to email desktop Scanning, faxing and OCR (optical character recognition) software. B. Delivery Date The Copier must be received by July 1, 2010. C. Eligible Countries Quotes must identify the source, origin and nationality for the copier and maintenance services. (Source is where the copier is shipped from; origin is where the copier is manufactured; and nationality is the nationality of the supplier of the copier.) Other Factors a. Geographic Code (Source, Origin and Nationality) Preference will be given to quotes which offer a copier that is made in and shipped from a county that is included in the list of eligible countries for Geo Code 000, from a vendor whose nationality is in a country within this Geo Code; and to quotes which offer a copier which is made in the United States and is available locally. The United States of America, the District of Columbia, and areas of U.S.-associated sovereignty, including commonwealths, territories and possessions are the eligible countries in Geographic Code 000. b. Local Procurement This project may also purchase locally available goods (commodities) of U.S. origin (made in the U.S.), which are otherwise eligible for financing; if the value of the transaction is estimated not to exceed the local currency equivalent of $100,000US (exclusive of transportation costs). c. Foreign Policy Restricted and OFAC Sanctioned Countries The copier may not be made in or shipped from any of the Foreign Policy Restricted and OFAC Sanctioned Countries as listed in the RFQ. This Project has a Geo Code 000 and includes the Local Procurement Clause. A. Warranty Quotes must include a one-year warranty covering labor and materials for repairs. B. Technical Capability a. Training Services The successful vendor shall conduct training session on the use and features of the copier with the Office Manager and the Receptionist. 6

b. Maintenance Services Quotes must include a maintenance services plan for four years. c. Installation Properly install in copier in the designated place on the first floor no later than July 1, 2010. The Evaluation Criteria for this example are: 1. Meeting all specifications 2. Price 3. Past Performance 4. Other Factors a. Technical Capability Installation and Training Services b. Warranty c. Maintenance Agreement Criteria 1, 3 and 4, when combined, are more important than price. If Criteria 1, 3 and 4, when combined are very close, then price will be the determining factor. Reminder: This Project has a Geo Code 000 and includes the Local Procurement Clause. B. Best Value (Trade Off) Evaluation Process 1. Meeting the Specifications/Scope of Work The Purchaser follows Step 1 as described in the Meeting the Specifications Evaluation Process above. He/she determines which quotes meet the specifications and documents the results on the Vendor Selection Form. For this example, all three quotes meet the specifications. 2. Other Factors The Purchaser reviews each vendors quote to determine if the quotes meet the requirements of the Other Factors specified in the RFQ. For example, if the Other Factors include o o o Technical Capability - Installation and Training Services Warranty Maintenance Agreement The Purchaser must determine which quotes meet these criteria, looking at each Other Factor. Does the quote include Installation and Training Services and do the services comply with the requirements in the RFQ? Does each quote include a one-year warranty? Is there a four-year Maintenance Agreement in each quote? The Purchaser then ranks the quotes based on how well they meet these criteria. 7

For this example, all of the quotes offer the same installation services, warranty and maintenance services, and all can meet the delivery date required. However, Quote A offers 5 hours of training for MSH staff and Quotes B and C offer 2 hours each. This quote would be ranked higher than the others for the Other Factors. 3. Price The Purchaser lists each vendor s quote on the Vendor Selection Form (VSF), and list the quoted price in the Price Analysis section of the Vendor Selection Form. Determine which quote has the lowest price. Based on the comparison below, Quote B offers the lowest price, with Quote A second lowest, and Quote C the highest. PRICE ANALYSIS Vendor A Vendor B Vendor C Name Vendor A Vendor B Vendor C Contact Joe Smith John Doe Jane Crane E-mail and/or Phone# jsmith@att.net jdoe@vendorb.com jcrane@vc.com PRICE QUOTED $ 14,600 $ 13,900 $ 14,900 OTHER COSTS installation training $ 750 1,250 $ 700 1,200 $ 800 1,700 TOTAL PRICE $ 16,600 $ 15,800 $ 17,400 Meets Specs/SOW Yes No Yes No Yes No Meets Other Factor #1 Yes No Yes No Yes No Meets Other Factor #2 Yes No Yes No Yes No Meets Other Factor #4 Yes No Yes No Yes No RANK for lowest price 1 to 5 (1 = lowest) 2 (5% higher than B) 1 (Lowest) 3 (10% higher than B) 4. Select the Vendor In this example, in the evaluation of the quotes against the Other Factors, the Purchaser determined that Quote A would be ranked higher than the other quotes because it offers more training services. The quote that offers the lowest price is Quote B. The Purchaser must now decide if the Quote A, which is ranked higher, is the Best Value for MSH is the additional price worth the Trade Off? Quote A is priced lower than Quote C. Since Quote C was ranked lower than Quote A and it has a higher price, it would not offer the best value to MSH. Quote A is priced 5% higher than Quote B. However, Quote A is ranked higher because it offers more training services. Is Quote A worth the difference in price? The Evaluation Criteria stated that Criteria 1, 2 and 4, when combined, are more important than price. If Criteria 1, 2 and 4, when combined are very close, then price will be the determining factor. 8

The Purchaser must determine if the extra training services are worth the 5% increase in price for MSH. If it is, then Quote A offers the Best Value to MSH. If not, then the Purchaser will choose Quote B, because B offers the lowest price. The Purchaser selects the quote that offers the best value to MSH and continues through the next steps to verify acceptable Past Performance, and to determine if the vendor is eligible to receive Federal funds. 9