BID EVALUATION PROCESS

1.1 Evaluation of Bid Procedures

Each Evaluation team for a SOE comprises two or three ZPA staff and a ZPA consultant. The evaluators studies the bid submitted and the prequalification material already on file. Each evaluator independently scores the bid against certain qualitative criteria and awards points on a form prepared for that purpose. After the individual qualitative evaluations are completed, the evaluation team members meet to arrive at a consensus qualitative score on each bid on each SOE. Being guided by Section 8 (2) (i) and (j) of the Act, and Statutory Instrument No.40 of 1993, the qualitative factors that are evaluated are as follows:

Competition (ensuring that monopolies are not created") Competitive environment

Business Plan (ability and commitment of buyers to develop the enterprise:) Capital expansion New technology/products/services

Improved operating capacity/efficiency/quality

Environmental impact

Employment expansion

Employee training and benefits

Export promotion

Import substitution

Foreign exchange generation

Open to offering of shares to public or employees Bidder's characteristics ("track record of buyers and their expertise in the type of enterprises on offer"0:

Managerial/technical/marketing expertise

Financial stability

Reputation and track record

Zambian nationality

Existing shareholders with pre-emptive rights

Management/employee buyout

The quantitative aspects of the bid, i.e the price offered, are evaluated by a designated team member. The offer is analyzed to determine if it is for shares or assets and if payment is to be in cash or deferred. If necessary, the offer is adjusted for the value of assets or liabilities not to be acquired, so that all bids are comparable to an offer for shares.

After verifying all the figures, the price data is used to calculate the net present value in Kwacha (or dollar equivalent).

1.2 Overall Review and Approval

After the scoring, ranking and evaluations are completed, the teams meet with a management review committee. The team leaders presents the results of the technical evaluation process. The review put all the bids for a particular SOE into perspective, highlights any extraordinary factors and identifies the outstanding bidders to be recommended to the Members of ZPA for negotiations. Finally, a Bid Evaluation Report is presented to the Members of ZPA seeking the "negotiating authority" that serves as a guide for the Negotiating Team in negotiations. The contents of the bid evaluation report are :

Executive summary

Introduction summarising evaluation procedure and methodology

Results of tender, ranking conclusions and recommendations

Evaluation of each bid

Description of bidder

Price evaluation

Qualitative evaluation

Rank of bid

Negotiating Authority

Back to ZPA Home Page | Go Back to Privatisation Program Menu | Back to Privatisation Stages 2.4