The competitive tendering process
The main objective of the tendering process is to ensure the “best fit” supplier is selected to supply goods and/or services to the customer which offers best value for money. Such a supplier is likely to be sound commercially, technically competent, financially sound and perceived as best for the task
The task of the Tender Evaluation exercise is to select the bid or tender which will give the best value for money at best overall cost. This will most likely result from balancing cost, quality, delivery, performance and risk. The necessary criteria used in making this decision will include:
- Technical compliance
- Capacity and capability of the bidder
- Quality offered
- Prices/costs of alternative bids
The pre-qualification stage entails what is known either as Supplier Questionnaire (SQ) or Pre-Qualification Questionnaire (PQQ).
This a method adopted by prospective suppliers to ascertain that only those who meet specific criteria, and have the necessary capabilities, are considered for inclusion in a list of invitees to bid. It is a recognised means of limiting the size of a tender/bid list should there be the likelihood of more bids than it is reasonably acceptable to handle (it’s a shortlisting exercise).
Normal areas evaluated at SQ stage relate to experience of the service or equipment, the capacity to supply, the quality available, the financial stability and competence, Health & Safety compliance and the environmental commitment of the company.
The bid evaluation team, now assess all components of all tenders/bids.
First evaluation stage: Is the bid document compliant and are all parts completed?
Second evaluation stage: Compare and assess all parts, to identify the best value for money bid overall.
The buyers evaluation team will comprise of people with different skill sets. For example, a financial expert, a technical expert, a purchasing expert, an HR advisor and, if necessary, a commercial or legal expert. It is also common in NHS and Social Housing tenders to have patients/residents on the panel.
The evaluation process follows a defined pattern to ensure all bids are dealt with in exactly the same way. The methods for comparison have to be fair, thorough and demonstrably so, should inspection take place.
Tenders can be evaluated in different ways, the most common UK method for evaluating bids is the MEAT method (Most Economically Advantageous Tender) This is when PRICE and TECHNICAL/QUALITY are weighted to reflect how important they are to the buyer. Depending on what the buyer is purchasing the criteria could be 60% PRICE – 40% QUALITY, giving a total of 100%. This will vary bid to bid, so it is vital you understand this weighting as it is telling you what is important to the buyer.
When the QUALITY/TECHNICAL sections of the tenders are evaluated, each tender is given a score based on the responses provided within the required method statements. Scoring is per method statement/section and generally the highest marks are awarded for EXCEEDING the buyers specification/requirements and proving it.
Scores are allocated to the PRICING in a number of methods, but one common method is:
Score = Price in tender being evaluated / Lowest Price submitted X the % allocated to Price (e.g. 60%)
Klick Business Solutions can explain the evaluation process to you on a bid per bid basis and help you score the highest marks in the Quality/Technical sections of the bid. We understand how bids are evaluated and we compile our responses to ensure we are providing what the buyer has requested and proving it.