Guidance for public sector bid evaluation

15 July 2010
The Procurement Lawyers’ Association has published a paper looking at the issues that come up for public sector bodies when evaluating tenders. The aim is to clarify some areas of legal uncertainty in relation to evaluation and to assist in the development of best practice. The paper discusses matters such as: lawfully establishing and applying evaluation criteria; what can be taken into account by authorities in considering which tender is the most economically advantageous; evaluating of pricing proposals; and risk adjustment. Given the importance of transparency in ensuring fairness in public procurement, it also considers what information should be disclosed to bidders. The themes explored in the paper are not only of interest to buyers, but also to all suppliers to the public sector. Those bidding for public contracts will find insights into the way in which buyers must evaluate bids before choosing whom to award the contract to. Vendors will find it interesting to note when tenders are evaluated on purely a “lowest price” basis, the public sector purchaser may only consider the prices set out in the tenders and cannot consider the actual costs that it will incur (which may include other factors such as costs associated with the Transfer of Undertakings (Protection of Employment) Regulations). If the purchaser wishes to take account of how affordable the bids are, it needs to tell bidders in advance and not simply indicate that it is looking for “lowest price”. Abnormally low bids may be rejected, but the buyer must allow the tenderer to provide explanations as to the facts behind its bid before it does so. For tenders where the public sector purchaser is seeking the “most economically advantageous tender” (aka the Meat), the purchaser does not have a completely free choice as regards the criteria it may select as the basis for its award. Those criteria must be linked to the subject matter of the contract. When evaluating tenders, the purchaser may not take into account whether a bidder has (sufficient) experience to provide the works, services or supplies – this may only be considered at the pre-qualification stage. Any business bidding for public sector contracts will also find it useful to understand what must be disclosed by the purchaser to suppliers to help them to formulate a bid. The starting point is the award criteria must always be disclosed, together with any weightings if possible, but if it is not possible to allocate weightings, then in descending order of importance. If the award criteria are to be divided into sub-criteria and knowledge of those could affect the preparation of a tender, then they must also be disclosed. Similarly, any marking scheme or methodology which will be used and which could affect the preparation of a tender should also be made known to bidders in advance of bid preparation. * Rosemary Choueka is partner, head of EU, competition and legal, at LG and is on the Procurement Lawyers' Association steering committee
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