Tender Evaluation Criteria – Explained

Last updated: Dec 17, 2021 @ 11:16 am

Understanding the differences between stage 1 and stage 2 tender evaluation criteria is a key part of being successful in tendering for contracts.

Fortunately, the PQQ and tender documents should include information on how the buyer will assess your submissions. (If this information is not released by the buyer – ask for it through a clarification, it is a key piece of information you need to tender well).

To understand how the tender evaluation criteria changes between PQQ and subsequent stages, let’s break each stage down…

The PQQ

The PQQ is an initial evaluation by the client to make sure you can deliver the works, before inviting you to tender at stage two.

To complete this evaluation, the client will assess a range of information you must provide and/or confirm, including:

• Administrative Information (e.g. Insurance levels)
• Economic and Financial Standing (e.g. your company turnover levels)
• Equal Opportunities
• Environmental commitments
• Health and Safety procedures
• Quality Assurance processes
• Technical Capabilities
• Customer Care standards
• Service Levels
• References

Each of these criteria will be evaluated according to how important they are to the buyer:

Pass / Fail

This is used by the client to check you meet a minimum standard. Examples include having relevant accreditations e.g. ISO 9001 Quality standards.

It is normal for Pass/Fail evaluations to also be assessed through self-certification by companies completing the PQQ.

Self-Certification

PQQs contain something called Mandatory and Discretionary Exclusions. This is where you will self-certify that your company meets certain requirements ensuring you can deliver the contract.

This usually includes evaluation of your company and personal track record across a number of factors:

• Participation in a criminal organisation
• Corruption
• Fraud
• Terrorist Offences
• Breach of environmental obligations
• Money Laundering
• Child Labour or any other form of trafficking
• Breach of tax obligations
• Bankruptcy or insolvency
• Breach of labour law obligations
• Misconduct
• Entering into agreements to distort competition
• Breach of social obligations
• Conflicts of Interest/Participation in the procurement process
• Misrepresentation and/or influencing procurement decisions

Weighted Scoring

Sometimes the client will score your response to specific questions at the PQQ stage. This will be bespoke to the client and their needs and will change from one PQQ to the next.

This can be influenced by past experiences of the buyer and/or give an indication of their priorities for the contract.

For example, Council X has recently implemented a new green procurement policy. They are likely to place extra importance on your environmental policy and waste and recycling procedures. Council Y might be all about social inclusion, so they’re more concerned about how you will employ local people. Council Z might have had their fingers burnt by a company going bust on them mid-contract, so will attach more importance – and weighting – to your evidence of financial stability and sustainability.

Evaluation Criteria

PQQs will provide a guide or an explanation of how they are marked. For example:

“Section 2 – Grounds for mandatory exclusion

You will be excluded from the procurement process if there is evidence of convictions relating to specific criminal offences including, but not limited to, bribery, corruption, conspiracy, terrorism, fraud and money laundering, or if you have been the subject of a binding legal decision which found a breach of legal obligations to pay tax or social security obligations (except where this is disproportionate e.g. only minor amounts involved).

If you have answered “yes” to question 2.2 on the non-payment of taxes or social security contributions, and have not paid or entered into a binding arrangement to pay the full amount, you may still avoid exclusion if only minor tax or social security contributions are unpaid or if you have not yet had time to fulfil your obligations since learning of the exact amount due.  If your organisation is in that position please provide details using a separate Appendix. You may contact the authority for advice before completing this form.”

The ITT

It is important to remember that if your PQQ submission passes the evaluation criteria and you get shortlisted to ITT; the client believes you are capable of delivering the works.

The ITT stage is your chance to demonstrate how you will deliver them.

Every buyer organisation is different and their requirements will change from tender to tender. To fully prepare yourself you need to understand the tender evaluation methods and criteria the buyer will use to evaluate your bid.

Tenders tend to be evaluated upon a mix of price and quality. This is known as the Most Economically Advantageous Tender – MEAT. For more information, check out our Tender VLE video here:  Sourcing the MEAT.

When considering the Price and Quality submissions:

1. Price is your charge for providing the works/service/goods
2. Quality relates to your written response to information questions.

Depending on the client’s priorities, they will give evaluation weightings to both the price submission and the quality response. This too will vary from tender to tender.

Below is an example of tender evaluation criteria:

Top Tip: If you don’t get this breakdown as part of the tender documents, ALWAYS ask for it. It is not an unreasonable request to make and it’s really helpful to guide your response.

An ITT may give you the option to carry out site visits if tendering for large-scale public-sector contracts. They are often used within the Construction, Logistics and Facilities Industries. Site visits can have numerous benefits for your tender response.

It’s an obvious analogy: The bigger tenders are – the more effort that is required from both the supplier and buyer. We’ve been to hundreds of site visits and buyer presentations to know that this is a crucial part of tenders and how they are developed.

Buyer presentations are delivered usually halfway through the Tender exercise. They provide all tenderers and suppliers with the opportunity to get to know the buyer’s environment and culture. They can also provide a more detailed outlook on the requirements at hand.

The buyer invites all suppliers to a site visit, which may include a group tour or a group presentation. This is to provide suppliers with a better opportunity to comprehend what’s expected of them during delivery and with developing their tender response.

3 ways site visits can benefit you

We’ve provided our top 3 benefits in attending a buyer presentation or site visit:

1. Gain new information –sometimes it takes more than a specification document to truly understand what’s expected – especially in a large, multi-million-pound contract that spans multiple regions. As you can expect, with undergoing these types of visits, online clarification questions are often decreased as all aspects will be clarified on the day. Yes – the buyer should make this public to all tenderers, but we’ve found that you’ll tend to grasp more out of the day rather than on a paper-reflected document. Whole conversations aren’t recorded and provided, so there will always be something (possibly crucial) that may be missed on paper, but clear on the day.
2. Introduce yourself –  getting your face in front of the buyer(s) allows you to introduce yourself to them. It also allows you to display strong professionalism, knowledge and decorum. This will stick in their minds. If you send your administrator on the day who’s clueless about your operations – and this is clearly projected – the buyer will consider your organisation less committed to the project. You don’t want to be remembered for that. Choose your most knowledgeable staff to attend who you know will act professionally. They can then come back with a steered view of how better to develop your tender response. Hopefully, they’ll also leave a lasting impression on the buyer.

3. To stay ahead of your competitors – now we aren’t one for shaming our competitors – no matter how subtle. If you attend grouped discussions you’ll see exactly who your competition is. This provides in many ways a more competitive tender process as you should be trying to enhance your response based on advantages over your counterparts. For example: If Company X is present and they deliver a certain way – you can always state how your delivery model provides much more added value to the buyer. Don’t go naming and shaming in your response – keep it classy and always have the buyer’s needs in mind!

These are just some of the things that make attendance at a site visit crucial when developing your tender response.

Price / Quality split.

The price/quality split is the first thing to look at when you’re considering responding to a tender. How it is evaluated gives you an immediate guide to how the procurement process is being viewed by the customer. This can inform your decision to bid or not to bid.

The example above shows an evaluation ratio of Price: 30% / Quality: 70%. This means the quality of the service or product being delivered is more important than price.

If the weightings were swapped over, a price ratio of 70% means your quote should be as lean as possible.  If it is not, you don’t stand a chance of being successfully evaluated.

Price

Pricing your tender normally involves completing an Excel spreadsheet and breaking your pricing into:

• Monthly / Annual costs
• Itemised Costs per unit
• Costs Excluding VAT
• Annual Inflationary increases
• Total Cost excluding VAT

The buyer will breakdown the criteria for how your price will be evaluated. Typically the price is evaluated on the total cost. Taking the example above this means:

• Lowest price gets the maximum score i.e. the full 30% weighting.
• Highest price gets the lowest score
• Prices within these two will score relatively according to how far they are to the lowest price

To give an example using the evaluation criteria example above:

• The lowest price submitted is £100,000. This is awarded 30%
• The next price submitted is £150,000. This is awarded 20%.
• The highest price submitted is £200,000. This is awarded 15%.

Quality

Tender evaluation criteria for quality will often be split into categories (see example above). These can each have a weighting applied according to how important they are for the buyer. Sometimes each Quality evaluation category is broken down into individual weightings for each question.

In the above example, ‘Technical’ has the highest potential score. ‘Capability’ and ‘Resources’ are two questions within that section, each worth 10%. With the highest evaluation weighting, these are therefore the most important to the buyer.

Within the ITT documents, the buyer will explain how each quality response will be evaluated. It will look something like this:

Achieving top Marks

Sometimes the scores vary between 0-10 or 0-5 but there will usually be at least 5 separate marks available for each response.

The differences between the top score and the lower criteria shows you what to write to achieve each mark. In this evaluation example you need to:

• Exceed their requirements,
• Add value and
• Provide improvements through Innovation

Similarly, you can look at what to avoid doing which would result in a poor evaluation.

Many evaluation methodologies ask you to evidence your statements, backing up how you say you will deliver the contract. To be meet the high scoring criteria, having good evidence is key.

Conclusion

Using the Tender Evaluation Criteria provided by the buyer, you will have a good understanding of the tender evaluation process.  Use it to help create your tender responses for every question and you will maximise your chances of getting a high-quality score.

If you feel you need some support or more information about your PQQ or ITT response processes or how to write winning bids, contact our Bid Writers for specialist advice. Or visit our free virtual learning environment TENDER VLE.

Find more helpful tips and advice in our blogs. We cover topics including:

• How to win a tender
• What is a Bid Writer?
• The tendering process
• Writing winning bids
• 7 tips for tendering for contracts
• Tips for bid management
• Bid writing services
• The types of tendering procedures
• Writing bids
• Bid writing consultants
• Submitting a tender response
• And many more.