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Home / Procurement / Evaluating Tenders & Pitfalls to Avoid

Evaluating Tenders & Pitfalls to Avoid

Evaluating tenders and making sure it’s a fair process is a rather complex process and the stakes are higher if the project is deemed high value or high profile.

Getting the tender evaluation wrong can invalidate your contract award (assuming you work in the public sector) private sector procurement has a degree of flexibility but still works within a governance process.

Selection Criteria focuses on the competency of the organisation (backwards looking) and Award Criteria focuses on the organisation’s ability to service the contract against the specification. (forward looking)

References, interviews and site visits may well not meet the requirements of the case law to be considered as valid and discrete award criteria. They should be assessed at selection stage but this can cause extra workload. In most situations, they may be more usefully employed as aids to evaluation provided that their use is transparent and equal treatment is facilitated.

Mandatory Pass/Fail Requirements.These are useful to knock out a large volume of bidders who may submit a tender but lack the ability to meet the award criteria. Though its useful to have an initial gateway for mandatory/pass/fail this should be proportionate to the requirement.

Minimum Standards

There is no prohibition on the use by a contracting authority of minimum standards at the evaluation stage;

Contracting authorities should consider upfront whether any minimum standards are best required at PQQ stage or as part of the tender stage;

If the minimum requirements truly relate to the tender, rather than the tenderer, the contracting authority should also consider at an early stage how it will deal with the situation that all bids fail to meet those minima;

It is unlikely to be acceptable for a contracting authority to waive its minimum requirements once tenders have been invited, in the interests of equal treatment; Subsequent waiving of minimum requirements is also unlikely to be in the interests of the contracting authority.

The well-known Lianakis case stresses the distinction between selection and award criteria, emphasising that award criteria must be used to look at the tender, not the tenderer and that (unless evaluating by reference to lowest price) award criteria should be used to identify the most economically advantageous tender.

Award based on Lowest Price

The Contracting Authority can if it wants, to make an award based on the lowest price.

If the price is abnormally low whether if this in the basis of a MEAT criteria or Price alone, you can request a price clarification to understand how this price is achievable. Regulation 30(7) is not exhaustive and a contracting authority is able to ask for procurement–specific information in order to obtain the fullest explanation possible. Such requests should be made in writing. Only after the contracting authority has taken account of the information provided and verified that, in light of such information, the bid (or those parts of the bid that it has investigated) remains abnormally low, can the contracting authority proceed to reject that bid.

Price can be calculated in various ways, read our post commercial score for more information or for a more in-depth explanation you can purchase our premium product for scoring price.

Declaring how tenders are evaluated

Typically I split Quality and Price into a weighted percentage and the Quality section is further broken down into a sub criteria. Weightings are scored at this level. Some procurement professionals like to add another layer of sub/sub criteria. It could be argued that this gives bidders more transparency about the scoring but I find it too granular and ties up the scoring down to specifics . If the sub criteria is intended to be scored then these need to be disclosed as an award criteria. If like me you prefer to use an evaluation context to interpret the meaning if the first level of sub criteria then this should be viewed as a tool to help interpretation rather than the award criteria in which it must be scored.

For complex procurements it may be worthwhile doing a trial exercise to model some of the weightings and insert some dummy scores to check whether if the weightings make sense.

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