Understanding Tender Capacity: The Formula That Quietly Disqualifies Bidders
Tender Capacity is one of the most misunderstood financial criteria in Bangladesh's e-GP system. Many contractors meet every other requirement — turnover, liquid assets, experience — yet still get marked non-responsive because they miscalculated their Tender Capacity.
The reason is simple: most bidders look at the impressive first half of the formula and forget the part that subtracts their existing workload. This guide breaks the formula down in plain language, with worked examples, so you never make that mistake again.
The Formula
Under the Standard Tender Document, Assessed Tender Capacity is calculated as:
Assessed Tender Capacity = (A × N × 1.25) − B
Let us define each term clearly:
- A = The maximum value of construction works performed in any one year during the last five years.
- N = The completion time of the proposed work, in years.
- 1.25 = A fixed multiplier set by the rules.
- B = The value of existing commitments and works to be completed during the next N years.
The most important term here is B — and it is the one bidders forget.
Note: If N is less than 12 months, N is counted as 1 (one).
Why B Matters So Much
Think of it this way. The first part (A × N × 1.25) measures how much work you are theoretically capable of taking on. But you cannot use 100% of that capacity if you are already busy with other projects.
B is your existing workload. Subtracting it gives your real, available capacity for this new tender. This is the same principle as net available liquid assets — what matters is not your total capacity on paper, but how much is actually free.
A bidder who forgets to subtract B will overstate their capacity, and during evaluation the committee will recalculate it correctly — often pushing the bidder below the required threshold.
Worked Example 1: A Contractor With No Other Work
Suppose:
- A = Tk. 2,00,00,000 (your best single-year construction value in the last 5 years)
- N = 2 years (the proposed work will take 2 years)
- B = Tk. 0 (you have no ongoing commitments)
Calculation:
- A × N × 1.25 = 2,00,00,000 × 2 × 1.25 = Tk. 5,00,00,000
- Minus B (0) = Tk. 5,00,00,000
If the tender requires a minimum Tender Capacity of Tk. 1,15,00,000, this bidder qualifies comfortably.
Worked Example 2: The Same Contractor With Ongoing Work
Now suppose the same contractor already has Tk. 3,50,00,000 worth of work in hand to be completed over the next 2 years.
- A × N × 1.25 = Tk. 5,00,00,000 (same as before)
- Minus B (3,50,00,000) = Tk. 1,50,00,000
The bidder still qualifies against a Tk. 1,15,00,000 requirement — but only just. Notice how the available capacity dropped from Tk. 5 crore to Tk. 1.5 crore once existing work was counted. If their ongoing commitments were a little higher, they would fail.
This is exactly why honest, accurate entry of B is critical.
Common Mistakes to Avoid
The most frequent errors bidders make with Tender Capacity:
- Forgetting B entirely and submitting only A × N × 1.25.
- Using the wrong A — using an average instead of the maximum single-year value, or vice versa.
- Miscounting N — using months instead of years, or forgetting the "less than 12 months counts as 1" rule.
- Outdated commitments — not updating B as old projects finish and new ones start.
Let the Tool Do the Math
Calculating this by hand for every tender, while also tracking your changing commitments, is tedious and error-prone. A small mistake in B can cost you the bid.
eGPTenderHub calculates your Tender Capacity automatically. Enter your figures once in your company profile — including your existing commitments — and the AI applies the formula correctly for every tender, showing your true available capacity against the requirement.
Stop guessing your numbers. Check your real Tender Capacity in seconds at egptenderhub.com.