3.2.3.3 Determining the contract award criteria

Home Page  <<  >>

The criteria based on which Contracting Authorities award public contracts are:

a)Exclusively the lowest price.

       This criterion is used by Contracting Authorities when the technical specifications are fully clear and fixed, and no variants are allowed. In this case, the contract is awarded to the tenderer who was not excluded from the tender procedure during the qualitative selection procedure and whose tender was not rejected in the technical evaluation stage (i.e. it was judged that it meets the technical specifications and other requirements laid down) and, in the financial offers evaluation stage, was established as the tender offering the most economical solution for the Contracting Authority.

b)The most economically advantageous tender.

       This criterion is used when the Contracting Authority wishes to ensure that the contract shall be awarded to the candidate economic operator whose tender offers the best value for money. In this case:

oContracting Authorities have the opportunity to determine the specifications for the contract placing greater emphasis on functional performance rather than on strict technical requirements.
oSubmission of variants may be allowed, provided that these meet the minimum requirements specified.
oDesirable specifications may also be determined, in addition to the mandatory requirements and specifications. Failure to meet the desirable specifications does not lead to the rejection of the tender; meeting them, however, may lead to an advantage in the evaluation procedure.

       When the contract is awarded to the most economically advantageous tender, the award takes place based on various criteria related to the scope of the specific contract, such as the quality, price, technical value, aesthetic and functional characteristics, environmental characteristics, operating cost, efficiency, after-sales support and technical assistance, delivery date and delivery or execution deadline.

 

Where the contract award criterion is the most economically advantageous tender, the Contracting Authority must specify in the tender documents the method for the evaluation of tenders, indicating the corresponding weighting factor which it assigns to each one of the criteria selected in each case.

To ensure respect of the principle of equal treatment in the procurement process and secure the necessary transparency so that every tenderer is aware of the criteria and methods to be applied for identifying the most economically advantageous tender, the weighting scheme of the award criteria must be included in the tender documents, so that the tenderers know it when preparing their tenders. Contracting Authorities may deviate from this rule only in fully justifiable cases which they must be able to substantiate, when this weighting cannot be established in advance, due mainly to the complexity of the contract. In these cases, they must state the decreasing order of significance of these criteria.

To determine the evaluation criteria when the contract award criterion is the most economically advantageous tender, Contracting Authorities should keep in mind the rules given in the table below:

 

DETERMINING THE EVALUATION CRITERIA

BASIC RULES

The list of criteria given in the Law is neither restrictive nor mandatory. Contracting Authorities should select these criteria (as well as their weighting or significance) according to the particular characteristics of each contract.

All evaluation criteria must be directly related to, and must concern, activities or supplies or works included in the contract scope (at least to the most important of these).

In the event of failure to foresee an important criterion, the Competent Body shall not be able, in conducting the evaluation procedure, to reward the tender which may be perceptibly better than the rest regarding the respective requirement.

All criteria must be established objectively and must as far as possible be measurable.

The tender documents must specify clearly the information that the tenderer must supply in order to support the evaluation procedure.

The selection and weighting of the evaluation criteria must conform to the key principles of Community law on public procurement.

The evaluation criteria and their relative significance must reflect the prioritisation of the requirements of the Contracting Authority and the degree of importance of each individual parameter under evaluation. In general terms, they should clarify the objectives of the contract and should not confuse the interested economic operators.

Indicative evaluation criteria

The criteria stated in the law are of a general nature and their application requires, in most cases, a thorough analysis.

The quality of a service or product, for example, can be judged more easily by determining individual criteria, the fulfilment of which (of all or of some of them) shall lead to a safer understanding of the level of quality of the service or product. Breaking down the criterion of quality to individual criteria (e.g. completeness, availability, reliability, flexibility, timeliness, security, accuracy, user-friendliness or usability) would facilitate the task of the body responsible for the evaluation of tenders, on the one hand, and would lead to safer choice of the best service from those offered or of the best product in terms of quality, on the other.

The technical value of the offered solution could be replaced with criteria referring to the methodology and support tools that the tenderer intends to apply in the implementation of the contract.

The environmental characteristics can be judged in terms of performance or functional requirements, provided that these have been laid down in detail in the Terms of Reference and are appropriate for determining the characteristics that form the contract scope.

In the case of public service contracts, the efficiency can be checked using various criteria referring e.g. to the breakdown of the project into individual work packages and deliverables, or to the definition of the contents of the individual deliverables, as well as to the proposed method for organising and coordinating the key experts and other staff of the tenderer who form the Project Team. In the case of public supply contracts, efficiency may be judged based on quantitatively identifiable data, such as the number of printouts of a printer under evaluation or the number of a computers network transactions over a specified period of time.

After-sales service and technical assistance, in the case of contracts that foresee such an obligation, may be checked using various criteria referring to the service/support methodology that the tenderer intends to apply, the geographical coverage of the network of associates the tenderer may be required to have available if the technical service is to be provided to Contracting Authority units located in various cities, or to the method used to organise the technical service and assistance procedure.

Understanding the requirements of the contract is also a decisive criterion, especially in the case of complicated contracts for complex projects, where successful implementation of the project depends greatly on the candidates ability to understand the objectives and specify ways in which to address potential risks.

The implementation schedule presented in the tender (with indication of the critical milestones) is also a criterion whose effective use ensures selection of a competent contractor who has understood the requirements of the Contracting Authority, especially in cases where the interim critical milestones of the contract scope under implementation are not fully and precisely in full detail in the tender documents.

Finally, the aesthetic and functional characteristics of the offered solutions can be evaluated by determining individual criteria whose degree of fulfilment specifies the respective degree of fulfilment of both the mandatory and desirable requirements of the Contracting Authority, as these have been determined in the Terms of Reference and the Technical Specifications contained in the tender documents.

It must be pointed out that the general or specific professional experience of the tenderer or of the staff members who  participate in the proposed Project Team may, under the Community as well as under the National Law, be evaluated only as a qualitative selection criterion and not as a contract award criterion.

In all cases, but primarily in public service contracts involving intellectual products, the evaluation of tenders relies on the specialised technical knowledge and sound judgement of the evaluators whom the Contracting Authority appoints the competent evaluation body. Irrespective of their intentions, however, the members of this body may, either intentionally or unintentionally, form a wrong or subjective judgement. Therefore, the adoption of the evaluation system which is the most appropriate for each particular case, and the definition of criteria which are as clearly formulated, objective and measurable as possible, is a prerequisite for proper completion of the evaluation procedures.

To determine the evaluation criteria which are appropriate in each case and their weighting scheme, the authors of the tender documents could adopt the practice outlined below, which is considered in terms of methodology to be suitable for use as the basis for evaluating the tenders and for awarding the contract to the tender which is actually the most advantageous for the Contracting Authority.

First step:Completion of a table questionnaire, an indicative example of which is given below, in collaboration with the Head of the competent Department of the Contracting Authority, the officials who participated in the evaluation strategy definition for the particular project and/or those having an in-depth knowledge of the requirements of the Contracting Authority and/or the participants in the preparation of the Technical Specifications and Terms of Reference and/or Contracting Authority staff who shall benefit from the implementation of the contract.
Second step:Processing of the information in the questionnaire, selection of suitable evaluation criteria and ranking of the criteria selected in decreasing order of significance.
Third step:Weighting of the criteria using corresponding weighting factors.

 

SELECTING THE EVALUATION CRITERIA

Is the contract a complex contract with a complicated scope and many different activities?

YES

NO

If the answer is “yes”, the methodology proposed for implementation of the project and the method proposed for organising the implementation of the individual activities must be evaluated.

Does successful implementation of the project depend significantly on the candidates ability to understand the objectives and specify the ways in which to address potential risks?

YES

NO

 

If the answer is “yes”, the tenderers understanding of the requirements of the contract, as inferred from any specific references (if such references are requested) or generally from the way in which the tenderer has conceived the solution and has put together his tender, must be evaluated.

Which of the activities included in the contract scope are the most significant in relation to the requirements and objectives of the Contracting Authority?

Note: The notion of significant activity includes all services, deliverables or works whose successful implementation is considered by the Contracting Authority to be a condition for deeming that the execution of the contract is successful.

Activity 1

Activity 2

Activity 3

Activity 4

........

........

........

........

........

For each significant activity, note the degree to which the activity is fully specified in the Terms of Reference or in the Technical Specifications.

Select for evaluation those activities which are not fully specified and for which there is room for development in more detail or for further analysis by the tenderers in their tenders.

For each one of the activities selected in this way, choose individual characteristics whose evaluation you consider necessary (e.g. availability, reliability, innovation, user-friendliness etc.).

Is implementation of the contract scope in the shortest time possible of interest to the Contracting Authority?

YES

NO

If the answer is “yes”, the proposed reduced implementation time should be evaluated, provided that the possibility of achieving this reduction is documented in the tender.

In all cases (i.e. regardless of whether the answer is “yes” or “no”), it is advisable to evaluate the proposed implementation schedule as to the feasibility of its being met based on the proposed implementation methodology, and/or as to the planning for any individual deliveries required.

Does the contract provide for technical assistance or for the obligation for technical service after the implementation of the project?

 

YES

NO

If the answer is “yes”, the way in which the tenderer intends to meet the specific obligation must be evaluated by determining individual criteria regarding e.g. the geographical coverage of the network of associates the tenderer may be required to have available if the technical service is to be provided to Contracting Authority units located in various cities, or to the method used to organise the technical service and assistance procedure.

Using presentations in the evaluation procedure

If the Contracting Authority considers that such a procedure is advisable, it may provide in the tender documents for the conduct by the tenderers of presentations of their tenders. It may also provide for visits by the competent body for the evaluation of tenders to the premises of third parties (e.g. where products which are the same or similar to those included in the scope of a public supply contract have been installed by the tenderer and are in operation).

It is obvious that the purpose of such procedures is to allow the evaluators to form a full picture, which will allow them to evaluate-mark fairly and objectively the submitted tenders, using the added knowledge which they gain during the presentations.

The procedure of presentations itself cannot be a criterion to which marks will be given, because it may be considered contrary to the key principle of transparency and/or equal treatment of the tenderers, as it cannot be checked.

 

Price as an Evaluation Criterion

In accordance with one of the key introductory remarks of Directive 18/2004, when the Contracting Authorities choose to award a contract to the most economically advantageous tender, they evaluate the tenders in order to determine which one offers the best value for money. In order to do this, they determine the economic and quality criteria which, taken as a whole, must make it possible to determine the most economically advantageous tender for the Contracting Authority.

It is evident that no procedure for selecting the most economically advantageous tender can take place without participation of the price as an evaluation criterion. For contracts for which the award criterion is the most economically advantageous tender, the price is one of the criteria used to evaluate the tenders and award the contract, in contrast to contracts for which the award criterion selected is the lowest price, where the price is the only criterion used to evaluate the tenders and award the contract.

In all cases, the key aim of the Contracting Authority should be to determine the best possible ratio (in other words, the ratio that serves the specific needs of the Contracting Authority) between the quality of the project to be implemented and the financial burden for its implementation, given that no contract can be considered advantageous if the expenditure for its implementation is disproportionate to its value or is prohibitive.

In all cases, the determination, in the tender documents, of the relative weight of the criterion of price in relation to the weight of the qualitative value of the tenders, must be in proportion to the specific scope of the contract and to the objectives which the Contracting Authority expects to achieve by its implementation.

In addition to determining the relevant weight of the criterion of price, and in order for the use of the criterion of price to adhere to the key principles of public procurement law and in particular to the principles of equal treatment and transparency, the Contracting Authority must lay down in the tender documents the rules which are required for correct application of the criterion, which, depending on the specific case, could be one or all of the following:

1.Where the tender documents allow economic operators to express the prices offered in some other currency, the method for the conversion of such currencies to Euro should also be specific (the model draft tender documents provide for their conversion using the foreign currency to Euro exchange rate (sale price), as given by the Central Bank on the closing date for the submission of tenders or as applicable on the working day which immediately precedes the closing date for the submission of tenders, if the latter is a bank holiday).
2.Where the scope of the project put out to tender includes as an option an activity for the maintenance of products, the price offered for maintenance must be taken into account for the purposes of the financial evaluation.
3.By analogy, where the scope of the project put out to tender includes as an option a technical or advisory support activity for a specific total number of person-months, it should be specified that the price offered for the services of the option shall be taken into account in the calculations for the purposes of the financial evaluation.
4.In the case of long-term contracts, where the tender documents allow tenderers to choose one between two or more payment methods (e.g. payment of the total price after the final acceptance of the project or payment of (on or more) interim advances), the method applied to compare the prices of tenders must be specified (e.g. by reduction of all individual prices payable to Net Present Value NPV).
5.In special cases of public supply contracts where the Contracting Authority estimates that the products offered may not be directly comparable (e.g. when, from similar products which are available in the market and meet the mandatory technical specifications, some can be used directly while others require special conditions or parts and the Contracting Authority should bear the cost of securing these), the tender documents must specify the procedure to be followed in order to render the tenders comparable (e.g. by adding to the price of the product requiring special conditions or parts, the average price which, in the estimate of the Contracting Authority, corresponds to securing the special conditions or to purchasing of the required parts).

In the above case, it is obviously not right to take into account again, in the financial evaluation stage, the elements of a tender which have already led to a lower mark during the qualitative evaluation of tenders. 

If the tender procedure may lead to the conclusion of more than one contracts with the Contracting Authority, i.e. when submission of tenders for a part of the project being put out to tender is allowed, the tender documents must provide that the financial evaluation procedure shall be separate, possibly with different rules, for each one of the individual parts of the project for which submission of tenders is allowed.


© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
Home Page | Government Web Portal | Disclaimer | Webmaster