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​​Decide on your evaluation methodology

​You'll need to decide a rating scale to judge your criteria against, and an evaluation model to determine how you'll weight the criteria against each other.

1. Rating scale

Your rating scale tells the evaluation panel how to score criteria.

Use a 0-5 scale in most instances with the option of a 0-10 scale where you need more differentiation, eg:

Rating Definition Score
Excellent Exceeds the requirement. Exceptional demonstration by the supplier of the relevant ability, understanding, experience, skills, resource and quality measures required to provide the services. Response identifies factors that will offer potential added value, with supporting evidence. 5
Good Satisfies the requirement with minor additional benefits. Above average demonstration by the supplier of the relevant ability, understanding, experience, skills, resource and quality measures required to provide the services. Response identifies factors that will offer potential added value, with supporting evidence. 4
Acceptable Satisfies the requirement. Demonstration by the supplier of the relevant ability, understanding, experience, skills, resource, and quality measures required to provide the services, with supporting evidence. 3
Minor Reservations Satisfies the requirement with minor reservations. Some minor reservations of the supplier’s relevant ability, understanding, experience, skills, resource and quality measures required to provide the services, with little or no supporting evidence. 2
Serious Reservations Satisfies the requirement with major reservations. Considerable reservations of the supplier’s relevant ability, understanding, experience, skills, resource and quality measures required to provide the goods / services, with little or no supporting evidence. 1
Unacceptable Does not meet the requirement. Does not comply and/or insufficient information provided to demonstrate that the supplier has the ability, understanding, experience, skills, resource and quality measures required to provide the services, with little or no supporting evidence. 0

There are other kinds of rating scales you can use – see the three options in the section on How to score each submission in the template below.

2. Evaluation model

The evaluation model determines how you'll weight your evaluation criteria. There are five main ways to do this:

  • lowest price – if the procurement is very simple and price is the most important factor
  • simple score – if all the criteria have roughly the same degree of importance
  • weighted-attribute – if the criteria have different levels of importance
  • target price – if the scope of work is hard to define, or the budget is the main constraint
  • Brook's Law – if quality is the most important factor and price is not a key driver.

Lowest price

  1. Determine which offers meet the requirements.
  2. Look at the total price for each eligible offer.
  3. The lowest priced eligible offer is ranked first.

Use it when:

  • you're procuring goods rather than services
  • the strongest emphasis is on price and all of the criteria have the same importance.

This method is not recommended for complex procurements as it doesn't consider the relative importance of the criteria or judge value for money.

Simple score

  1. Score each offer against the criteria according to your rating scale.
  2. Add the total scores for each offer.
  3. The highest scored offer is ranked first on the merits.

Use it when:

  • the procurement is relatively simple
  • all of the criteria have roughly the same degree of importance
  • you're evaluating Registrations of Interest to select a shortlist as the first stage of a multi-stage process.

Weighted-attribute

This is the most common methodology used in public sector procurement.

  1. Start by ranking the criteria in order of importance.
  2. Decide a weighting for each — this is usually a percentage, with the total weightings for all criteria adding to 100%.
  3. Score each offer against the criteria and rating scale to obtain raw scores.
  4. Apply the weightings to the raw scores to obtain the weighted scores.
  5. Add the total weighted scores for each offer.
  6. The offer with the highest total weighted score is ranked first.

Example:

Criteria Weighting Raw Score
(out of 10)		 Weighted score
Criterion #1 40% 8 3.2
Criterion #2 35% 7 2.5
Criterion #3 25% 9 2.3
Total weighted score (out of 10) 8

Use it when:

  • criteria have different levels of importance
  • procuring goods or services.

You can treat price as one of your weighted criteria, or you can evaluate price separately.

If you treat price as a weighted criterion, make sure it’s weighted appropriately. There’s a risk that unrealistically low-priced offers achieve the highest overall weighted score, but the goods/services can’t be delivered within the quoted price.

If price is not a weighted criterion, price information is usually kept from the evaluation panel until after the evaluation on the merits and scoring is finalised. There are a few ways to evaluate price in this case.

Once you have a shortlist of offers that would fully deliver against the requirements, you can disclose the price for those offers to the evaluation panel. Invite the panel to discuss whether any differences in price are reflected in added value within the offers. Then ask them to reach a consensus on which offer represents best value for money.

Target price

The target price model is useful when the available budget is the main constraint, or when it's genuinely difficult to define the scope of the work in the specification of requirements – in this case, the agency is likely to receive a range of offers with prices that are hard to compare and might exceed the available budget.

One solution is to include the available budget (the ‘target price’) in the RFP as a guide for defining the scope of the services, and then invite suppliers to specify what they can do for that price.

The focus of the evaluation is then on the quality, quantity and outcomes of the services to be provided rather than price.

Use it when:

  • it is genuinely difficult to define the scope of the requirements, and
  • there is a fixed budget.

Brook’s Law (two envelope approach)

The Brooks’ Law model is useful where quality is the most important factor.

  1. Offers are evaluated on the merits without price being disclosed to the panel.
  2. Only those suppliers who are clearly able to fully deliver against the requirements are shortlisted.
  3. The highest-ranked supplier is invited to negotiate. At this point the price for this supplier is disclosed. All other prices remain unopened.
  4. If the negotiation is successful the supplier is awarded the contract.
  5. If no agreement is reached, the second ranked supplier is invited to negotiate. At this point the price for that supplier is disclosed. All other prices remain unopened. The process continues until a satisfactory agreement is negotiated.

Use it when:

  • the strongest emphasis is on quality rather than price.
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