Discusses pricing formula and other fees, value-added tax (VAT), etc
Last Published: 9/5/2018

As noted in ADB’s new procurement policy:

  • Pricing for Goods and Works: Bids for goods shall be invited based on Cost, Insurance and Freight (CIF), or Carriage and Insurance Paid To (CIP) for all goods offered from abroad, and Ex Works (EXW) for locally available or manufactured or assembled goods, including those previously imported. In supply and installation contracts, the bidder shall be required to provide a separate quotation for each of the product and service required. ‘In turnkey contracts, the bidder shall be required to quote the price of the installed plant at site, including all costs for supply of equipment, marine and local transportation and insurance, installation and commissioning, as well as associated works and all other services included in the scope of contract such as design, maintenance and operation. Unless otherwise specified in the bidding documents, the turnkey price shall include all duties, taxes, and other levies.’ For civil works contracts, bidders shall generally be required to quote unit prices or lump sum prices of the works, including all duties, taxes and other levies.
  • Price Adjustment (https://www.adb.org/sites/default/files/procurement-price-adjustment.pdf): The bidding documents shall clearly indicate whether price adjustments are permitted in the event of inflation or of major cost changes of the contract components, e.g., labor, equipment, and materials. The price changes shall be based on adjustments in the cost of the major components of the contract. If used, the bidding documents shall provide for the method of adjustment formula or formulae. The comparison of bid prices shall be carried out on the basis of base price only.
  • Pricing for Consulting Services: For time–based consulting contracts, payments are linked to inputs, and bidders will be required to quote prices based on the identified inputs like monthly rates for personnel mentioned in the contract, and other actual expenses. In other cases, pricing may be agreed on alternative bases such as lump sum fees; agreed remuneration rates for experts typically payable on the basis of the time inputs actually provided in the case of indefinite delivery (price agreement) contracts; percentage payments based on performance triggered on the achievement of selected milestones; or a success fee (normally expressed as a percentage of the sale price of the assets) for retainer or contingency (success) fee contracts.

ADB’s Institutional procurement: For ADB’s own procurement for its headquarters and resident mission offices, contractors must always remember that bid price shall include, among others, (i) labor costs; (ii) transportation costs; (iii) administrative, supervision and overhead expenses; (iv) profit; and (v) incidental expenses for the provision of the required services. The bid price offered in the Bid Form will be flat rates for full execution of the services in every respect.

The price of goods shall constitute full compensation to the supplier, including all costs, fees and other charges of any kind incurred by the supplier.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.