Don’t get sued – Public Procurement Lawyers issue evaluation guidance

The Procurement Lawyers' Association (I know what you're thinking -  bet they have wild parties!) have issued a very interesting document - "Issues in evaluating public sector tenders".

One particular area of uncertainty revolves around how one evaluates and scores 'price' (or 'whole life cost') as part of the evaluation.  What does a '50% weighting for price' mean unless you define how price will be scored?  It is a bit of a favourite topic for me - I wrote and article for Supply Management magazine a while ago on this and have updated it for the Dilf magazine in Denmark recently*.  I've also presented at a public sector workshop on this and been involved in a couple of pieces of work where supplier challenges based on evaluation processes featured.

The lawyers are a bit cautious in this area, their conclusion being

  • "There are different methods available to contracting authorities in order to evaluate price and different elements of pricing information that may be taken  into account. The public procurement Regulations do not prescribe any particular method.
  • Nevertheless, we would recommend that a contracting authority provides a comprehensive and clear description of the methodology it is seeking to adopt for the evaluation of bid pricing information and sets out in the tender documents any assumptions or models that it intends to use in the evaluation process that could have the effect of altering the bidder's approach to the pricing of its bid."

Do note the comment on page 8 (para 2.4.1) however about the issues with the 'standard differential' method.  Variants of this are widely used, but the lawyers comment here that the 'second and third methodologies are currently the subject of a challenge".  I understand that this may mean legal advice moving towards a 'fit to the budget' approach as they describe it or 'highest / lowest conceivable price' method as I somewhat clumsily called it in my article.

More when we have greater clarity perhaps on emerging case law, but if you are involved in public procurement, and you don't want to get challenged, I urge you to read this paper.  I suspect a reasonable proportion of public tenders are open to at least the possibility of  challenge based on 'unfair' evaluation processes or lack of full disclosure to bidders.

* email me if you would like a copy of my article;  psmith@procurementexcellence.com

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