Evaluation of tenders

Resource type: Practice note

Jurisdictions: England, Wales
A note setting out the issues to consider when carrying out an evaluation of tenders for a
contract subject to the public procurement regime.
PLC Public Sector

Contents
Impact of the public procurement regime on evaluating tenders
Purpose of evaluation in the procurement process
The key to best practice evaluations
Selection and evaluation
Requirement to distinguish between selection and award criteria
Selection criteria
Award criteria
Low est price approach
Most economically advantageous tender (MEAT) approach
A balance between quality and cost
Possible criteria to assess quality
What is meant by criteria linked to the subject matter of the contract?
Evaluating past experience at tender stage
Allocation of weightings to award criteria
Advance disclosure of criteria and weightings
Disclosure of evaluation criteria for Part B or below threshold procurements
Use of "pass or fail" hurdles
Use of tie-breakers
Evaluation methods
Awarding a score for quality
Use of a scoring model to evaluate price
Scoring savings
Use of model answers
Abnormally low tenders
Evaluation of terms and conditions
Moderation of scores

Clarification if bid is unclear

Evaluation team
Conflicts of interest
Confidentiality of evaluation materials
Variant bids
Audit trail

Impact of the public procurement regime on evaluating tenders

Evaluation, the assessment of tenders against a contracting authority's requirements, is the most
important part of the procurement process. It is also the stage of the process which is most
frequently challenged.
The manner in which UK public sector bodies are able to procure goods, services or works is
determined by the Public Sector Procurement Directive (2004/18/EC) and Directive 2004/17/EC
(Utilities Directive), which have been implemented in the UK via the Public Contracts
Regulations 2006 (SI 2006/5) (PCR 2006), the Utilities Contracts Regulations 2006 (SI 2006/6)
and case law (see Practice note, Public procurement in the UK: Legal framework and Public
procurement case tracker).
The aim of the EU procurement regime is to create a single market by removing all
discrimination between bidders from different member states in the manner in which contracting
authorities award public contracts. The following key principles of the Treaty on the
Functioning of the European Union (TFEU) apply to all aspects of the procurement process,
including selection of bidders and evaluation of tenders:

Transparency: this is not simply about disclosure and openness but also the removal of
discretion and subjectivity. Evaluation must be based on objective criteria that are known to
bidders in advance.

Fairness: evaluation criteria and the evidence required from bidders must be actually and
demonstrably related to the subject matter of the contract and applied proportionately to the
stated objectives.

Equal treatment (or non-discrimination): all bidders and potential bidders must be
given the same opportunity, based on the same information and criteria, and evaluated in a nondiscriminatory manner.
These principles apply to all public contracts, including those which fall below the relevant
thresholds in the PCR 2006 where there is cross border interest in the contract.
In short, legal compliance requires the contracting authority to determine and disclose how it will
assess a winning bid before it receives any information from the bidders. The award criteria must
be formulated, in the contract documents or the contract notice, in such a way as to allow all

reasonably well-informed and normally diligent tenderers to interpret them in the same way (see
Legal update, Supreme Court ruling on application of "reasonably well-informed and normally
diligent" tenderer standard).
For further information on the obligations imposed by the public procurement regime, see:

Public procurement in the UK: a quick guide.

Practice note, Public procurement in the UK.

Part B, below threshold and other procurements outside the regulations.

Purpose of evaluation in the procurement process

The main aim of any effective tender evaluation should be to determine the tender which:

Best meets the needs of the public body.

Achieves value for money.

The evaluation should therefore identify the best available and affordable business solution,
within applicable legal constraints, through a robust and defensible award process.
The key to best practice evaluations

Whichever procurement procedure is chosen:

Start planning early: it is best practice to have considered the evaluation criteria at an
early stage of the project to ensure that the right result in achieved.

Test the evaluation process: identify any potential problems. The planning process will
normally include market consultation and running dummy scores through the proposed model.
Once the evaluation criteria are set, they must be adhered to. No adjustment of the criteria or
their weightings is permitted (see Use of scoring to evaluate tenders).

Advance disclosure: make the evaluation criteria known to bidders at the first
opportunity (see Advance disclosure of criteria and weightings). A distinction should be drawn
between:

criteria (the qualities or deliverables the public body wants to secure); and

evidence (the behaviours or characteristics that may support the authority's

judgement about the criteria).

Keep an audit trail: document the reasons for awarding scores to each bidder and,
where unusual, the reasons for choosing the criteria and weightings. Authorities must be able to
defend the award process (see Audit trail).

Selection and evaluation

Requirement to distinguish between selection and award criteria

Regulated contracts are procured through using one of the following procedures:

Open procedure

Restricted procedure

Competition dialogue procedure

Negotiated procedure
All these procedures, except the open procedure, permit the contracting authority to shortlist the
bidders against certain specified criteria (selection criteria) before inviting those shortlisted
bidders to submit tenders to be evaluated against the award criteria.

Selection criteria relate to the bidder and are used to assess the bidder's ability to
perform the proposed contract (for example, in terms of experience, economic standing and
qualifications) (see Selection criteria). Selection criteria may only be applied at the prequalification stage in order to short-list bidders to be invited to tender or participate in dialogue,
under the restricted and competitive dialogue procedures respectively. In an open procedure, the
contracting authority will usually evaluate the selection criteria and, if the bidder meets the
minimum requirements, will then move on to consider the rest of the tender. Selection criteria
may not be assessed during the award stage.

Award criteria relate to the tender and are used to identify the tender that is the cheapest
or the most economically advantageous (for example, in terms of price, technical specifications
and project management proposals) (see Award criteria).
In simple terms, selection criteria aims to establish "can they do it?" and award criteria "how will
they do it?".
In Case 31/87, Gebroeders Beentjes v the Netherlands [1988] ECR 4635, the European Court
of Justice (ECJ) clarified that the examination of a bidders suitability (i.e. the application of the

selection criteria) and the award of the contract are two separate processes, although they may be
carried out simultaneously. In Lianakis v Dimos Alexandroupolis (Case C-532/06), the ECJ held
that the contracting authority was wrong to assess the bidders experience at award stage (see
paragraphs 29-32 of the judgment):
although (...) Article 36(1) of Directive 92/50 does not set out an exhaustive list of the criteria
which may be chosen by the contracting authorities, and therefore leaves it open to the
authorities awarding contracts to select the criteria on which they propose to base their award of
the contract, their choice is nevertheless limited to criteria aimed at identifying the tender which
is economically the most advantageous () award criteria do not include criteria that are not
aimed at identifying the tender which is economically the most advantageous, but are instead
essentially linked to the evaluation of the tenderers ability to perform the contract in question (..)
in a tendering procedure, a contracting authority is precluded by Articles 23(1), 32 and 36(1) of
Directive 92/50 from taking into account as award criteria rather than as qualitative selection
criteria the tenderers experience, manpower and equipment, or their ability to perform the
contract by the anticipated deadline.
For further details of the ECJ's ruling, see Legal update, ECJ ruling on award criteria under
public procurement rules.
Selection criteria

There are only three selection criteria permitted by the PCR 2006:

Exclusion or rejection: bidders must be disqualified on certain grounds, for example,

money laundering, bankruptcy and certain criminal offences, and may be disqualified on certain
other grounds, for example professional misconduct (regulation 23). However, even where
exclusion is expressed to be mandatory, a contracting authority can still permit that bidder to
proceed if it is satisfied that overriding requirements in the general interest apply. The prequalification questionnaire (PQQ) should list these grounds and require bidders to confirm
whether any apply. If they do, bidders should be invited to offer an explanation. For more
information, see Practice note, Debarment from public contracts and the Bribery Act 2010.

Economic and financial standing: bidders may be eliminated if they do not meet the
minimum financial thresholds set out in the PQQ (regulation 24). Contracting authorities usually
set the threshold test with reference to the bidder's turnover, that is, that the contract value should
not exceed a specified percentage of the bidder's turnover. It is important to ensure that the
threshold is proportionate in each case, rather than using the same threshold for each
procurement, so that bidders are not unnecessarily excluded from participation. The contracting
authority may also consider the bidders general financial standing (see Opinion, Do credit
checks and the public procurement regime add up?).

Technical and professional ability: the PQQ may specify minimum technical standards,
skill levels and experience but only as relevant to the purpose, nature, quantity or importance of
the contract (regulation 25). Regulation 25(2) sets out what information may be required from

bidders and taken into consideration for this purpose. This information relates to the bidder and
not to any potential solution they may be able to offer.
Technical and professional ability is often assessed by asking bidders to submit details of
comparable projects. If using this approach, it is important to provide some context to the
information which is being elicited, for example, minimum thresholds, scope, value or relating
the projects to the subject of the contract, so that bidders and evaluators are clear what
information should be provided and how it will be evaluated (see Legal update, Northern Ireland
High Court sets aside contract award decisions due to errors in applying selection criteria).
Applying selection criteria to sub-contractors
Where the bidder intends to sub-contract the work, it may also be appropriate to check that the
sub-contractors meet the mandatory requirements, depending on the scale and nature of the subcontract. In Easycoach v Ltd Department for Regional Development [2012] NIQB 10, the
contracting authority required the bidders to demonstrate they held a bus operators licence. In
evaluating whether the bidder in question met that requirement, the panel did not have access to
the part of the bidder's tender which revealed that it intended to use sub-contractors. It therefore
could not sensibly or knowledgeably evaluate whether the tender met that mandatory
requirement (see Legal update, Northern Ireland High Court sets aside contract award decisions
due to errors in applying selection criteria).
For further guidance on the selection stage, see Practice notes:

Public procurement in the UK: PQQ stage: selecting the bidders (not open procedure).

Pre-qualification questionnaire.
Award criteria

The setting of evaluation (that is, award) criteria is not as prescriptive. Subject to the
requirements of regulation 30 of the PCR 2006, the criteria set out the basis on which the
contract will be awarded by measuring value for money. Value for money cannot be an award
criteria in itself, it is the constituent parts of a bid that will establish whether the bid represents
value for money.
When carrying out a procurement, a public body can award a contract on the basis of:

Lowest price only (see below). This is not permitted, however, if the contract is being
awarded using the competitive dialogue procedure.
The MEAT approach (see below).
The evaluation approach must be decided and disclosed at the outset.

Lowest price approach

If the lowest price approach is used, the contract will be awarded to the cheapest bid. No
assessment is made of the quality of the bid. The lowest price approach is generally only suitable
for simple procurements for short-term, low-level services or goods of a standard specification,
such as some stationery or linen.
This approach may also be useful in the procurement of a clearly-specified product, service or
works, which has sufficient mandatory aspects that would allow a simple choice on the basis of
lowest price.

Most economically advantageous tender (MEAT) approach

A balance between quality and cost

Once an authority has determined that it is appropriate to use the MEAT approach to evaluate the
tenders for its procurement, it needs to decide the weighting split between quality and price (or
cost). In a MEAT evaluation, the quality and price scores are converted into percentages in
accordance with the pre-set weightings to create a combined score that should identify the
successful bidder.
There are no fixed or generally recommended splits as the impact of the split will depend on the
scoring methodology and various other factors. This is a matter for each public body to decide
having considered the requirements of each individual procurement. For example:

A very restricted budget combined with a clear and detailed statement of requirements
may be more suitable to a higher price weighting. However, it is meaningless to simply allocate,
for example 60% to price and 40% to quality. The authority should consider running some
dummy scores through its model to ensure that the 60/40 (or other ratio) will deliver an
appropriate result, see Use of a scoring model to evaluate the financial element.

Where the level of service to be delivered is key to the public body, such as many
consultancy services, it is likely that quality would have the higher weighting.

Where thresholds are used, the ratio may change. For example, if bidders are required to
meet a minimum threshold in the quality criteria, cost may attract a higher weighting as any poor
quality bids can be rejected as non-compliant (see Legal update, Northern Irish High Court
dismisses procurement appeal by Irish Waste).

In some circumstances, it might also be appropriate to have a specific weighting for legal
considerations. However, unless the competitive dialogue procedure is used, the public authority
can determine the contract terms at the outset and refuse to negotiate them with individual
bidders. Where the authority is contracting on its standard terms, it should ensure they are

reasonable. Where amendments to the terms are permitted, the contracting authority must
determine how these are to be evaluated, and any impact of the suggested change on the other
criteria, for example cost, must also be considered.
Although the quality/ cost ratio is at the discretion of the contracting authority, there may be
circumstances in which the ratio must be justified. In Traffic Signs & Equipment Ltd v
Department for Regional Development [2011] NIQB 25, the contracting authority used a 40:60
quality/ price ratio when previously it had used a 20:80 ratio. The change meant that the claimant
did not win contracts it otherwise would have won under the old system. It argued, among other
things, that the introduction of a mandatory international standard in the industry meant that
there was a reduced need for a qualitative assessment. The court agreed that, in such
circumstances, the contracting authority was obliged to explain and justify the 40:60 split. The
fact that it hadnt meant it was in breach of its obligations of objectivity and transparency (see
Legal update, Northern Ireland High Court ruling on price/quality split in evaluation of tenders).
Possible criteria to assess quality

Regulation 30 (2) PCR 2006 provides: A contracting authority shall use criteria linked to the
subject matter of the contract to determine that an offer is the most economically advantageous,
including:

Quality

Price

Technical merit

Aesthetic and functional characteristics

Environmental characteristics

Running costs

Cost effectiveness

After sales service

Technical assistance

Delivery date and delivery period and period of completion.

The examples given tend to suggest goods contracts. However, other criteria may be used, for
example, for a services contract:

Agility and ability to respond to contingencies

Customer care policies

Continuous improvement

Performance standards, quality control, self monitoring and complaints.

What is meant by criteria linked to the subject matter of the contract?

Evaluation criteria must be directly related and proportionate to the contracting authority's
requirements. The extent to which an authority can assess bids against criteria, or impose
contract conditions, which relate to environmental or social matters has been considered on
several occasions by the courts.
The case law has confirmed that requirements (whether in award criteria or contract conditions)
which go beyond a proportionate reflection of the authority's legitimate requirements in
connection with the contract are likely to be unlawful. Hence requirements which are applied to
economic operators' business activities as a whole, as opposed to the service, goods or works to
be supplied under the contract, run a high risk of being unlawful.
For more information, see Practice note, Sustainable procurement.
Evaluating past experience at tender stage

As stated above, the Lianakis judgment makes it clear that contracting authorities should not
evaluate matters at award stage which properly fall to be considered at selection stage. This
includes the bidders technical and professional ability. Since Lianakis, the courts have followed
this approach (see Legal update, General Court annuls Commission procurement decision).
However, this causes difficulties at award stage when no further distinction can be made between
a bidder which has excellent credentials, and one which is merely adequate.
Case law is now refining this basic principle to reflect how information about a bidders
technical and professional expertise can be considered differently at the two stages of the
process.
The decision in J Varney & Sons Waste Management Ltd v Hertfordshire County Council [2010]
EWHC 1404 (QB) suggests that there is some scope to revert to selection criteria at award stage.
In this instance, the judge held that it could be lawful to require information about the financial
standing of bidders (a selection criteria) at the award stage if the council in question had
disclosed in advance in the ITT that an assessment of the risk of non-performance because of
lack of financial stability was one of the matters which it would be taking into account in
determining which tenders were economically most advantageous (see Legal update, High Court
dismisses claim for damages for breach of procurement rules). While the Court of Appeal
rejected an appeal against the High Court's decision in Varney, it should be noted that this part of
the decision was not appealed (see Legal update, Court of Appeal dismisses appeal about
Hertfordshire County Council waste recycling contracts procurement).

In Case T 447/10, Evropaki Dynamiki Proigmena Systimata Tilepikoinonion Pliroforikis kai

Tilematikis AE v Court of Justice of European Union, a case concerning the procurement by the
ECJ of IT services, the ECJ had asked bidders to submit the CVs of 34 members of staff in order
to assess whether the bidders were capable of making available to it a team for all the services,
having the minimum technical skills, as well as the bidders' capacity to make available additional
persons having those skills in order to meet any additional needs. A disappointed bidder claimed,
among other things, that this amounted to the unlawful use of selection criteria at award stage.
The General Court, rejecting that part of the claim, held that:
a criterion based on the technical skills and professional experience of the members of a team
which a tenderer proposes for performance of a framework contract may, in certain situations,
constitute an award criterion. Award criteria are not necessarily all required to be quantitative. In
a case where a framework contract relates to services of a highly technical nature and the precise
subject-matter of the services to be provided must be determined progressively as performance
of that contract proceeds, the technical skills and professional experience of the members of the
team proposed are liable to have an impact upon the quality of the services rendered under the
contract. In such a situation, the technical skills and professional experience may therefore
determine the technical value of a bidder's tender and, consequently, its economic value.
in this tender the examination of the curricula vitae during the selection phase was designed to
assess the tenderers' ability to perform the contract. However, the evaluation of the curricula
vitae during the award phase was different to that conducted at the selection phase. The ECJ did
not merely examine whether the curricula vitae displayed the minimum characteristics required,
but sought to evaluate the technical quality and merit of the proposed team. This was intended to
identify which of the contracts was most economically advantageous. With regard to the nature
of the contract, the technical quality and professional experience of the proposed team had an
impact on the technical value of the tender and so on its economic value.
For more information, see Legal update, General Court annuls ECJ procurement decision for
lack of reasoning.

Allocation of weightings to award criteria

The criteria chosen should be allotted weightings to reflect what is most important in any
particular procurement. Weightings may be exact percentages or a specified range, where this is
appropriate in view of the subject matter. The criteria and weightings must be disclosed in the
contract documents (Regulation 30(3), PCR 2006).
Each broad criterion should ideally be broken down to set out what it is that the public body is
looking for to ensure consistent scoring is applied.

If it is not possible, on objective grounds, to provide weightings for the award criteria, it is
permissible to indicate the criteria in descending order of importance (regulation 30(5), PCR
2006), but this is unlikely to be the case in most procurements.
Example evaluation criteria showing weightings and ranges:

Quality: 60% made up of:

Cost: 40%, made up of:

Technical merit

[30%] OR
[20-30%]

Contract price

[20%] OR
[20-30%]

Mobilisation plan

[20%] OR
[20-30%]

Contract management costs

[10%] OR
[5-10%]

Business
continuity/ agility

[5%] OR [510%]

Contracting authority's contributions (for example,

contractor's use of authority assets)

[10%] OR
[5-10%]

Service
improvement

[5%] OR [510%]

Advance disclosure of criteria and weightings

Case law has examined the extent to which advance disclosure of criteria and weightings is
required.
In Lettings International Ltd v London Borough of Newham [2008] EWHC 1583 (QB) the High
Court held that the weighting of sub-criteria should also be disclosed, where known (see Legal
update, Court of Appeal allows interim injunction to prevent award of contracts).
However, arguably Lettings goes beyond what is required in EU law.
In Case C-331/04, ATI EAC Srl e Viaggi di Maio Snc and others v ATCV Venezia SpA and others,
one of the award criterion (organisational procedures) was allocated a maximum of 25 possible
points. The contract documents set out five factors that would be taken into account in the
assessment of this criterion. After the bids had been submitted and opened, the jury responsible
for assessing the bids decided to split the 25 maximum points for this criterion between the five
specified factors (giving between 8 to 2 points for each factor).

The ECJ held that it was for the national court to determine whether:

In all the circumstances of the case, the decision to apply such weighting altered the
criteria for the award of the contract set out in the contract documents or the contract notice.

The decision contains elements which, if they had been known at the time that the tenders
were prepared, could have affected that preparation.

The decision to apply the weighting was adopted on the basis of matters which were
likely to give rise to discrimination against one of the bidders.
If each of these questions can be answered in the negative, then the Directives do not preclude
the contracting authority from attaching specific weight to the subheadings of an award criterion,
which were defined in advance, by dividing among those headings the points allocated for that
criterion by the contracting authority in the contract documents or the contract notice (see Legal
update, ECJ ruling on weighting of award criteria).
This ruling was followed by the Court of Appeal in J Varney & Sons Waste Management Ltd v
Hertfordshire County Council [2011] EWCA Civ 708, (see Legal update, Court of Appeal
dismisses appeal about Hertfordshire County Council waste recycling contracts procurement).
The OGC's procurement policy note on the selection and award stages of a public procurement
reaffirmed the need to disclose award criteria, weightings and scoring to bidders as early as
practicable in the procurement process and no later than the invitation to tender stage. For further
information, see Legal update, OGC publishes procurement policy note on selection and award.
Disclosure of evaluation criteria for Part B or below threshold procurements

The EC Treaty principles may require disclosure of criteria and weightings for procurements that
are not covered in whole or part by the PCR 2006 (see Practice note, Part B, below threshold
and other procurements outside the regulations).
On 18 November 2010, the ECJ partially upheld an action brought by the European Commission
alleging that Ireland had breached its obligations in relation to the procurement of translation
services. The relevant services were "Part B" services that are not subject to the full application
of Directive 2004/18. The ECJ concluded that Ireland did not breach the principle of equal
treatment and the consequent obligation of transparency by setting the weighting attributable to
stated award criteria only after the bids were submitted. However, the modification of the award
criteria weightings after an initial review of the bids did amount to a breach of the principles of
equal treatment and transparency. For more information, see Legal update, ECJ rules that
Ireland breached principles of equal treatment and transparency by altering weighting of award
criteria.
The following conclusions can therefore be drawn in respect of contracts which are not subject to
the full regime:

The contracting authority is not legally obliged to disclose evaluation criteria.

It is advisable to disclose evaluation criteria to comply with the EC Treaty principles as

well as to elicit appropriately tailored bids.

Weightings should not be allocated or changed after tenders have been reviewed.
Aside from the procurement rules, tendering procedures for Part B services have also been
challenged in judicial review. In Law Society of England and Wales v Legal Services
Commission [2010] EWHC 2550 the High Court found that the Legal Services Commission's
tender for the award of contracts for family legal aid services was unlawful for irrationality.
Despite having widely consulted on changes to the system, including on its selection criteria for
successful firms, when it issued its tender additional criteria, notably a requirement to hold an
accreditation, was included. As firms were unable to obtain this accreditation within the 8 week
tender window, many firms failed to win any work (see Legal update, Judgment on errors in
tender procedure held by Legal Services Commission).
Use of "pass or fail" hurdles

If some aspects of the requirements are fundamental, a contracting authority may want to
include:

Mandatory requirements that must be met in order for a bid to be compliant; or

Mandatory hurdles, i.e minimum scores which must be achieved in respect of certain or
all criteria.
Failure to achieve these mandatory requirements or hurdles will result in a non compliant bid.
For example, for a transport contract, the successful bus service operator must have appropriate
licences in place or a particular aspect of the service must be to a specified ISO standard, as
certified by a particular authority. These mandatory requirements, and the consequences of
failing to evidence compliance to the required level, should be set out clearly in the tender
documents (see Legal update, Court of Appeal dismisses appeal against striking out of public
procurement claim).
A scoring hurdle can be used where only bids which score a specified minimum on clearly
identified and specified key aspects would be considered, for example, using the 0 to 5 scoring
system, a contracting authority could specify that only those bids scoring a minimum of 3 in
certain requirements will be considered. This avoids the risk of a winner which scored very
highly in one or more areas but very poorly in another. However, contracting authorities should
be wary of adopting this approach for criteria which are less important to it, for risk that an
otherwise strong bid is excluded on minor grounds.
In Irish Waste Services Ltd v Northern Ireland Water Ltd & Ors [2013] NIQB 41 the High Court
of Justice in Northern Ireland ruled that contracting authorities may reject and not evaluate the

remainder of a tender where it has failed to meet its stated minimum thresholds. The case was
brought under the Utilities Contracts Regulations 2006, but may be of wider application (see
Legal update, Northern Irish High Court dismisses procurement appeal by Irish Waste).
Use of tie-breakers

Nobody ever expects a tie, but this can happen. Consider building in potential tie-breakers into
the evaluation model and disclosing to bidders upfront how such a mechanism may be used if
there is a tie. For example, this may be by:

Setting additional questions to be answered.

Re-valuing (up or down) previously specified points.

Re-opening certain parts of the tender to be re-evaluated in writing or through a

presentation.
A tie does not have to be an exact tie but a statistical tie (that is, a tie within acceptable margins
of error) making it difficult, if not impossible, to differentiate between two or more bids.
The Commission Interpretative Communication on social considerations (see Interpretative
Communication of The Commission on the Community law applicable to public procurement
and the possibilities for integrating social considerations into public procurement, 15 October
2001) provides guidance that where a contracting authority is left with two equally economically
advantageous tenders at the award stage, it can then apply additional social (or environmental)
award criteria to differentiate between them, provided this additional criteria is disclosed. For
more information, see Practice note, Sustainable procurement.

Evaluation methods
Authorities also need to consider what methods they will use to evaluate the award criteria and
set these out in the tender documents so that all bidders have a fair and equal opportunity of
presenting the authority with the appropriate information. Possible methods include:

Written tender (for example a response as to how the bidder will meet each of the
requirements of the specification).

Method statements (as above, but the questions will generally be on thematic lines and
one question may cover a number of requirements).

Presentations or interviews (typically used to demonstrate a product, for example a

software solution. Interviews may also be used to assess softer criteria, for example
communication skills and working with the authority, or, in a social or health care context, its

service users (see Ask the team: How can a contracting authority take account of service user
choice in a procurement process?).

References (as these refer to past experience they should generally be taken at PQQ
stage, though they may be used at award stage to support the bidder's proposal for the tendered
service).

Site visits (these may or may not refer to past experience. If they evidence how the bidder
is delivering services to current customers, they should generally be evaluated at PQQ stage.
However, they may be used at award stage to support the bidder's proposal for the tendered
service).

Sample products.
Authorities will need to decide what percentage of the overall scores each of the criteria carry
and how these will be built into an evaluation. For example, an interview or presentation could
be used to assess a different part of the technical requirements from the written tender or it might
be a means of adjusting the written tender scores. In any event, presentations must be scored as
part of the quality or price evaluation, not added to the final overall quality or price marks as this
could distort the evaluation process.
If interviews or presentations are used, all bidders for a regulated contract must be invited to
participate. Unless the competitive dialogue procedure is used, there is no scope to reduce the
number of bidders during the tender stage. For more information, see Ask the team: Can a
contracting authority invite only the top scoring bidders in a tender process to interview or must
it invite all bidders?
Where the questions, presentations, or other evaluation methods are not equally weighted, this
should be disclosed to bidders. For example, quality is assessed as follows:

Quality: 60%, made up of:

Technical merit

30%

Mobilisation plan

20%

Business continuity/ agility

5%

Service improvement

5%

If there are 3 questions to assess Technical Merit, and 3 questions to assess Service
Improvement, those questions will not have equal weighting overall because those criterion are
weighted differently (see Legal update, High Court rules that Leeds City Council is liable for
damages for breach of public procurement rules).
Awarding a score for quality

One of the easiest ways to ensure that evaluation of quality is done consistently is to mark all
questions out of a set figure (for example, five) and apply the relevant weighting for that
particular criteria to obtain a score. For example:

Scor
e

Criteria for awarding score

Completely fails to meet required standard or does not provide a proposal.

Proposal significantly fails to meet the standards required, contains significant shortcomings
and/or is inconsistent with other proposals.

Proposal falls short of achieving expected standard in a number of identifiable respects.

Proposal meets the required standard in most material respects, but is lacking or inconsistent in
others.

Proposal meets the required standard in all material respects.

Proposal meets the required standard in all material respects and exceeds some or all of the
major requirements.

If this model is used, a bidder meeting the specification in full will only score 4 out of 5 (or 80%)
for each assessed requirement. By allowing the fifth mark (20%) for added value the public body
is leaving some scope for the bidders to improve on the specification and demonstrate to the
authority what else they can provide. In such cases, the tender documents should specify that
bidders are expected not only to meet the required standard but to exceed them, if they are to
obtain the maximum available score (see Legal update, High Court rules that Leeds City
Council is liable for damages for breach of public procurement rules). However, the authority
does not want to award the extra 20% for additions that are no use to it. Therefore, and to avoid
any suggestion of a lack of transparency, it should consider providing some guidance as to the
added benefits it has in mind.
Alternatively, a scoring system which permits a range of marks within each description could
encourage more thoughtful marking. For example:

Scor
e

Classification

Definition

No response (complete
noncompliance)

No response at all or insufficient information provided in the

response such that the solution is totally unassessable and/or
incomprehensible.

1-2

Unsatisfactory response
(potential for some
compliance but very
major areas of weakness)

Substantially unacceptable submission which fails in several

significant areas to set out a solution that addresses and meets the
requirements: little or no detail may (and, where evidence is
required or necessary, no evidence) have been provided to support
and demonstrate that the tenderer will be able to provide the
services and/or considerable reservations as to the tenderer's
proposals in respect of relevant ability, understanding, expertise,
skills and/or resources to deliver the requirements.
Would represent a very high risk solution for the contracting
authority

3-4

Partially acceptable
response (one or more
areas of major weakness)

Weak submission which does not set out a solution that fully
addresses and meets the requirements: response may be basic/
minimal with little or no detail (and, where evidence is required or
necessary, with insufficient evidence) provided to support the
solution and demonstrate that the tenderer will be able to provide
the services and/or some reservations as to the tenderers solution
in respect of relevant ability, understanding, expertise, skills and/or
resources to deliver the requirements.

May represent a high risk solution for the contracting authority.

5-6

Satisfactory and
acceptable response
(substantial compliance
with no major concerns)

Submission sets out a solution that largely addresses and meets

the requirements, with some detail (or, where evidence is required
or necessary, some relevant evidence) provided to support the
solution; minor reservations or weakness in a few areas of the
solution in respect of relevant ability, understanding, expertise,
skills and/or resources to deliver the requirements.
Medium, acceptable risk solution to the contracting authority.

7-8

Fully satisfactory /very

good response (fully
compliant with
requirements).

Submission sets out a robust solution that fully addresses and

meets the requirements, with full details (and, where evidence is
required or necessary, full and relevant evidence) provided to
support the solution; provides full confidence as to the relevant
ability, understanding, expertise, skills and/or resources to deliver
the requirements.
Low/No risk solution for the contracting authority.

9-10

Outstanding response
(fully compliant, with
some areas exceeding
requirements)

Submission sets out a robust solution (as for a 7-8 score above)
and, in addition, provides or proposes additional value and/or
elements of the solution which exceed the requirements in
substance and outcomes in a manner acceptable to the contracting
authority; provides full confidence as to the relevant ability,
understanding, expertise, skills and/or resources not only to deliver
the requirements, but also exceed it as described.
Low/No risk solution for the contracting authority.

Use of a scoring model to evaluate price

In most procurements, the financial element of the evaluation consists of an assessment of the
bidders tendered price. This may be presented as a unit price, an annual price, or a price for the
life of the contract.
In some, usually more complex procurements, additional factors will be considered, such as the
cost to the authority of that bidder winning the contract. This could include costs such as contract
management, transition costs and costs of the contracting authoritys staff or assets to support the
delivery of the contract, which may vary from bidder to bidder, depending on their solutions.
Where several contracts are being tendered together, the financial assessment may also take into
account any savings where one bidder wins more than one contract.

Turning prices into scores can be challenging. A number of approaches may be used to evaluate
the financial element of a tender, but in no case should a simple aggregation be used as this
almost always distorts the price scores.
A scoring model (no matter how simple) to create some sort of comparable figure across bids
should always be used. The two most common methods of evaluating price are to:

Award 100% to the cheapest bid, then compare that lowest figure as a percentage of the
other bids. (See the following two worked examples.)

Disclose a threshold price to bidders, which scores zero, and all bids under that threshold
are scored comparatively, inverting the model below. For example, if the threshold is 100, a bid
of 60 would score 40 (as 60 is 40% of 100) and a bid of 70, 30. Bids above the threshold
would be non compliant, or would incur minus marks.

Outsourcing contract
Formula:
(Lowest price / price you are evaluating) x 100 = price score for that bidder
Bids
The bids are based on a fixed price per annum.
You have three bids:
Bidder A: 1.2 million.
Bidder B: 950,000.
Bidder C: 1.5 million.
Scores
Following the above formula, the results are:
Bidder B: 100% (as it is the lowest bid).
Bidder A: 79% ((950,000 / 1.2 million) x 100).
Bidder C: 63% ((950,000 / 1.5 million) x 100).

Domiciliary care contract

Formula:
(Lowest price / price you are evaluating) x 100 = price score for that bidder
Bids
The bids are based on hourly rates with no fixed or estimated number of hours required and therefore
no overall price. However, the same formula can be used by applying it to the hourly rate quoted.
You have three bids:
Bidder A: 16.
Bidder B: 18.
Bidder C: 17.50.
Scores
Following the above formula, the results are:
Bidder A: 100% (as it is the lowest bid).
Bidder C: 91.4% ((16 / 17.50) x 100).
Bidder B: 88.8% ((16 / 18) x 100).

Note that the difference between the bids in the domiciliary care contract is very small and
therefore the pricing evaluation for that contract will have very little impact on the outcome.
Quality could therefore become the decisive factor, which, unless a price ceiling is used, is more
likely to advantage a more expensive tender. If both these tenders specified a division of 60:40 in
respect of quality and price, pricing would be more important in the outsourcing contract because
pricing is not so uniform in this type of service. These examples illustrate the importance of
working through some examples based on the sorts of bids which are likely to be received before
deciding on the appropriate quality/price weighting. Weightings cannot be altered later.
In Case T 461/08 - Evropaki Dynamiki Proigmena Systimata Tilepikoinonion Pliroforikis kai
Tilematikis AE v European Commission, judgment of 20 September 2011, the General Court held
that the European Investment Bank was in breach of the principles of non-discrimination and
equal treatment when it sought to alter its 75:25 quality/ price split when, following evaluation of
the tenders, it became clear that by attributing only 25% of the marks to the financial evaluation,
that part was essentially neutralised (see Legal update, General Court annuls procurement
decision of the European Investment Bank).

Contracting authorities should disclose their intended scoring methodology to bidders in

advance.
Scoring savings

An alternative to scoring price is to award marks for the savings that bidders' propose on the
current cost of the services.
In the following example, the cost of the current service is 1m. The contracting authority has
carried out market testing which has shown that it is able to achieve savings of at least 10% on
this service. In its procurement, the contracting authority has imposed a mandatory price ceiling
of 10% less than the current cost to it of receiving the services, i.e. 900,000. Bids which exceed
the 900,000 cap will be rejected as non-compliant. Bids which demonstrate additional savings
will score additional points, up to a maximum of an overall 20% saving:

Score (out of 10)

Submitted price ()

Equivalent percentage saving

10

800,000

20%

810,000

19%

820,000

18%

830,000

17%

840,000

16%

850,000

15%

860,000

14%

870,000

13%

880,000

12%

890,000

11%

900,000

10%

Use of model answers

It is relatively common for contracting authorities to provide their evaluators with model answers
to assist with their scoring. However, contracting authorities must ensure that these do not
introduce new, undisclosed criteria. The model answers must respond to the relevant
questions in a manner which would be reasonably foreseeable by a reasonably informed
and normally diligent bidder (see Legal updates, High Court rules that Leeds City Council is
liable for damages for breach of public procurement rules which discusses this point and High
Court ruling on grant of injunction in public procurement action).
Abnormally low tenders

A contracting authority may reject a tender which is abnormally low, provided it has:

Requested an explanation in writing of those parts of the tender which it considers

contribute to the offer being abnormally low.

Taking account of evidence submitted by the bidder in response to the request.

Subsequently verified the tender or parts of the tender being abnormally low with the
bidder.
(Regulation 30(6), PCR 2006).
Regulation 30(7), PCR 2006 provides a non-exhaustive list of the information that may be
requested from the bidder. A tender which is abnormally low due to the bidder receiving
unlawful state aid may be rejected in accordance with Regulation 30(8), PCR 2006.
In respect of Part B services contracts, ECJ has stated that, even where there is certain crossborder interest, it may be acceptable automatically to exclude tenders for being abnormally low

if there is an unduly large number of tenders and examination of all bids would exceed the
authority's administrative capacity and jeopardise implementation of the project (see Legal
update, ECJ ruling on treatment of abnormally low tenders).
For more information, see Opinion: Is a tender too good to be true? Check or you may be
injuncted and High Court ruling on grant of injunction in public procurement action.
Evaluation of terms and conditions

In most procurements, the contracting authority will specify the terms on which it is prepared to
contract. It is common to consult on these terms in advance to ensure they do not present any
difficulties to the market. Bids must therefore be made on the basis that no substantial
amendments to the terms and conditions are required. In those circumstances, a rejection of the
proposed terms and conditions will render the bid non-compliant.
However, sometimes requests to amend certain terms will arise during the process. In these
circumstances, the contracting authority may consider the request and decide whether a change
to the terms is necessary. Requests to change terms, and the contracting authority's response,
should be issued to all bidders through a clarification log. If the contracting authority decides to
issue a revised contract, it should consider whether any extension to the tender return date is
required.
For more complex procurements, such as those conducted under the competitive dialogue
procedure, it is usual for bidders to mark up the draft contract to reflect their solutions. Changes
to the terms which impact on the selection of the most economically advantageous tender, for
example because they could increase the contract price or otherwise impact on risk, should be
evaluated with the pricing evaluation.
Some risks may not be capable of consideration in the pricing evaluation, either because they do
not relate directly to cost, or because the model for evaluating price is not sufficiently
sophisticated to allow for adjustments for risk.
In those circumstances, it may be permissible to consider the legal evaluation as a separate
component. Such an assessment could consider the general balance of risks, such as proposed
changes to liability caps, indemnities, warranties, supply chain rights and termination rights, to
arrive at a score for the proposed changes.
Moderation of scores

As there is likely to be more than one evaluator, unless all members of the panel score the
tenders collectively, their scores should be moderated to produce a single agreed score for the
question or criterion in question. There are various approaches to moderating scores. A practical
approach is for all evaluators could score individually then submit their scores to a central
coordinator who highlights any differential in the scores. The panel members then meet to
discuss the differentials in the scores to try to address any disparity of views and arrive at an
agreed score.

Clarification if bid is unclear

Often, when evaluating a bid, a submission may be unclear or an evaluator may feel that they
need further information to enable them to evaluate the response properly. In this situation, the
public body must ensure that it is fair and treats all bidders equally in the way that it seeks to
clarify these matters. For example, if two bidders have both been vague in different ways about
the provision of a service, both should be asked to clarify their answers.
In Case C- 599/10 - SAG ELV Slovensko a.s., and others v rad pre verejn obstarvanie, the
ECJ set out the principles to be applied when dealing with an imprecise tender (paragraphs 3744):
To enable the contracting authority to require a tenderer whose tender it regards as imprecise or
as failing to meet the technical requirements of the tender specifications to provide clarification
in that regard would be to run the risk of making the contracting authority appear to have
negotiated with the tenderer on a confidential basis, in the event that that tenderer was finally
successful, to the detriment of the other tenderers and in breach of the principle of equal
treatment.
(..) it does not follow from Article 2 or from any other provision of Directive 2004/18, or from
the principle of equal treatment or the obligation of transparency, that, in such a situation, the
contracting authority is obliged to contact the tenderers concerned.
(..) Article 2 of that directive does not preclude, in particular, the correction or amplification of
details of a tender where appropriate, on an exceptional basis, particularly when it is clear that
they require mere clarification, or to correct obvious material errors, provided that such
amendment does not in reality lead to the submission of a new tender. (..)
In the exercise of the discretion thus enjoyed by the contracting authority, that authority must
treat the various tenderers equally and fairly, in such a way that a request for clarification does
not appear unduly to have favoured or disadvantaged the tenderer or tenderers to which the
request was addressed, once the procedure for selection of tenders has been completed and in the
light of its outcome.
(..) a request for clarification of a tender may be made only after the contracting authority has
looked at all the tenders (..)
Furthermore, that request must be sent in an equivalent manner to all undertakings which are in
the same situation, unless there is an objectively verifiable ground capable of justifying different
treatment of the tenderers in that regard, in particular where the tender must, in any event, in the
light of other factors, be rejected.
(..) In addition, that request must relate to all sections of the tender which are imprecise or which
do not meet the technical requirements of the tender specifications, without the contracting
authority being entitled to reject a tender because of the lack of clarity of a part thereof which
was not covered in that request.

For more information, see Legal update, ECJ judgment on ability of contracting authority to
seek clarification of tenders. See also, Northern Ireland High Court ruling on clarity of selection
criterion and missing information in tender.
Clarifications and responses on clarifications should always be in writing and made through one
channel, see Legal update, Northern Ireland High Court dismisses appeal against exclusion of
bidder.
It is a good idea to record the clarification questions and answers in a log which is regularly
circulated to all bidders. Statements made in clarification questions and answers which relate to
the performance of the contract should be incorporated into the final contract to ensure they are
binding.

Evaluation team
When preparing to issue a tender, public bodies need to establish who will be involved in the
evaluation of responses and ensure that there is sufficient capacity available to meet the required
timeframes.
For complex procurements, it is likely that a range of individuals from different disciplines will
need to be involved to evaluate the bids properly and it is likely to be a time-consuming task.
When using a team to evaluate bids, each member of the team should:

Be fully briefed about the evaluation methodology that is being used.

Ideally consider the tenders separately before coming together to moderate their scores.
This approach ensures that the risk of potential bias is reduced as far as possible. As with all
public sector decision-making, due process must be followed.
In Healthcare At Home Ltd, v The Common Services Agency [2013] ScotCS CSIH_22, the
Scottish Court of Session held that in respect of a tender for a drug dispensing and nursing
service, it was not necessary for every member of the evaluation team to see the whole of the
tender. It was implicit in the ITT that sections might be scored individually (see Legal update,
Scottish Court of Session confirms no lack of clarity or error in award criteria in procurement
procedure).
It is established case law that the quality of the tenders must be assessed on the basis of the
tenders themselves and not on that of the experience acquired by the tenderers with the
contracting authority in connection with previous contracts (see Legal update, General Court
annuls procurement decision of EU body). Evaluators should therefore put out of their minds any
prior knowledge they might have of the bidders in question. Where an evaluator suspects that a
submission is not true, for example because their prior knowledge of the bidder does not support

the contents of the tender, the evaluator should seek clarification of the tender (see Clarification
if bid is unclear).
If, during a complex procurement, one of the evaluation team needs to be replaced, a thorough
and detailed briefing must be given to the new team member to ensure that they fully understand
the process that they are stepping into and the evaluation method being used. All of these must be
clearly documented.
Disgruntled parties can challenge evaluation decisions through judicial review on the grounds of
illegality, irrationality, procedural unfairness or legitimate expectation (see Topic, Judicial
Review).
Conflicts of interest

Regulation 4, PCR 2006 requires contracting authorities to

Treat economic operators equally and in a non-discriminatory way.

Act in a transparent way.

These principles apply to the whole of the tender process including evaluation. The contracting
authority should therefore take steps to manage conflicts of interest. Members of the panel
should therefore be required to disclose in advance any connections they have to bidders.
A number of cases have been brought against contracting authorities claiming injustice due to a
conflict of interest in the evaluation of tenders when a party who worked for one of the bidders
had also advised the contracting authority in respect of the tender in question, see Legal updates:

Ombudsman finds no breaches of duties of impartiality, independence, objectivity or

fairness in tender procedure.

Ombudsman finds maladministration due to apparent conflict of interest in tender

procedure.

Ombudsman recommends that Commission evaluate tender procedure.

Confidentiality of evaluation materials

Under regulation 43, PCR 2006, a contracting authority shall not disclose information forwarded
to it by an economic operator which the economic operator has reasonably designated as
confidential. Confidential information includes technical or trade secrets and the confidential
aspects of tenders.

Therefore, the public body should treat all bidder responses in a confidential manner during and
after the procurement process. This is particularly important where an incumbent supplier may
be bidding for a new contract and has access to the contracting authority's premises or systems.
In brief, the following points should be complied with:

All reasonable precautions must be taken to ensure that documentation from bidders and
the evaluation materials are kept secure at all times.
Only relevant personnel should be granted access to the materials.

Information received from bidders must not be passed to any third party other than the
agreed external advisors.

Copies of the information taken outside of the workplace must be subject to additional
care and no copies should be made on any personal IT apparatus.
These precautions are subject to any disclosure obligations the public body has under the
Freedom of Information Act 2000 (FOIA) (see Practice note, Freedom of information). However,
prior to disclosing any information obtained during the course of a procurement, the exemptions
in sections 41 (confidential information) and 43 (commercial interests) of FOIA should be
reviewed to see if they apply. The OGC has also provided guidance on what information relating
to a procurement is likely to be exempt from disclosure under FOIA, see OGC, FOI and Civil
Procurement guidance.
In relation to the duty on local authorities to disclose information relating to contracts under
section 15 of the Audit Act 1998, see Legal update, Court of Appeal rules that a company's
financial model and profit margin should not be disclosed.

Variant bids
A variant bid is where bidders have proposed an alternative solution to that set out by the public
body. Regulation 10, PCR 2006 permits a contracting authority to accept variant bids provided it
is using the MEAT approach and the contract notice expressly permits bidders to submit variants.
The contract documents must set out the minimum requirements to be met by the variants and
any specific requirements for the presentation of an tender which contains variants.
The contracting authority should also specify whether bidders must also submit a standard bid
alongside their variant bid.
Variant bids are useful because they allow bidders to suggest innovative ways of delivering the
public body's requirements, which may be beneficial. However, the authority should set out clear

parameters within which such variants may be made, that is, which areas may be varied. All
variant bids should be evaluated using the same criteria as the standard bids and compared on a
like-for-like basis. This can often be hard to achieve unless the parameters set are sufficiently
clear.
In Traunfellner GmbH v Osterreichische A Sfinag C-421/01, a case concerning a contract for the
repair of a road which specified that the road should be made of concrete, the ECJ held that it
was not sufficiently clear for the Austrian authority to permit a variant bid if it ensured the
performance of qualitatively equivalent work, wording deriving from a provision of Austrian
law. The Austrian authority should have specified in the contract documents the comparative
parameters by which such equivalence was to be assessed (see Legal update, Preliminary
reference on criteria for variant bids in a procurement procedure).
The public body does not have to accept a variant bid if it is the highest scoring response, so long
as it has reserved this right in advance. It is therefore essential to also set out in the tender
documents what discretion the public body may exercise in relation to variant bids.

Audit trail
Evaluation is an area that is seeing an increasing number of challenges in the courts from bidders
who are unhappy with the way in which public bodies have dealt with their bids. Bidders can
potentially claim not only their wasted tender costs but also potential loss of profit for the
contract. As recent cases have indicated, it is not even necessary for unsuccessful bidders to
prove that they would have been successful but for the evaluation errors. All they have to show is
that they have been denied a fair attempt at the tender (see Practice note, New remedies in public
procurement law).
As a result of this increased risk to the public body, it is vital that a clear audit trail of the entire
decision-making process throughout the evaluation process is maintained together with copies of
all tenders submitted.
For cases on evaluation, see Public procurement case tracker; Evaluation.