Route 3 - Develop Documents - Selection, Award and Exclusion Criteria - Award Criteria

Route 3 - Develop Documents - Exclusion, Selection and Award Criteria - Award Criteria

Statutory Guidance has been published on Selection of Tenderers and Award of Contracts.

The distinction between selection and award criteria is crucially important. Selection criteria are focused on "the bidder" and award criteria are focused on "the bid”. The Procurement Officer must maintain a clear distinction between both throughout the procurement process. This means that issues/questions which are appropriate to the selection criteria must be addressed at the selection stage and cannot form part of the award stage (even if they were omitted from the selection stage in error) and vice versa.  However, you can apply different aspects at selection and award if relevant i.e. you can look at the bidder's general staffing in selection, and the qualifications and experience of those to be assigned to the contract at award if that is relevant.

Examples areas that are commonly known as "selection" and "award" criteria are listed in the table below:

Selection Criteria

Award Criteria

Technical and professional qualifications, capability including experience

Quality

Economic and financial standing

(Further examples provided below)

 
 
[For Care and Support Services, additional guidance on award criteria can be found in C&SS Award Criteria Guidance document.]
 
Although the selection and award criteria must be developed and managed quite separately, it is possible for Procurement Officers to conduct these stages simultaneously or in any order where the procedure allows.  For instance, when using an Open Procedure it may be desirable to assess the tenders (award stage) prior to checking minimum criteria are met when only a small number of bids have been received.  Where this is done you must still ensure that you verify the absence of grounds for exclusion and of fulfilment of the selection criteria.  This needs to be carried out in an impartial and transparent manner so that no contract is awarded to a bidder that should have been excluded or does not meet the selection criteria.

[For Care and Support Services, in accordance with regulation 76(9) of The Public Contracts (Scotland) Regulations 2015, an organisation may now also take account of some other issues when procuring these services including:

  • the quality of the service;

  • the continuity of the service;

  • the affordability of the service;

  • the availability and comprehensiveness of the service;

  • the accessibility of the service;

  • the needs of different types of service users;

  • the involvement of service users; and

  • innovation.

This is not an exhaustive list and there may be other considerations that an organisation may also take account of and which are relevant on a case-by-case basis.]

 

Publication of Criteria

Organisations are required by law to publish details of the criteria to be used to identify the supplier to whom the contract will be awarded. The Contract Notice (or the Prior Information Notice when it is used as a means of calling for competition, in so far as already known) must provide a brief description of criteria to be used for award of the contract. 

An Organisation must also specify in the relevant Procurement Documents the relative weighting which it will give to each of the criteria chosen to determine the most economically advantageous tender. It is best practice that respective weightings  are agreed by the UIG before the Contract Notice (or Prior Information Notice if used as a ‘call for competition’ if a sub-central organisation) is published and any documentation issued. If there is any doubt as to the level of detail that must be disclosed/published, you should seek specialist professional procurement or legal advice and guidance. A sub-central Organisation is any Organisation which does not belong to Central Government or National Health Services.

The agreed and advertised award criteria and weightings must not be changed once they have been notified to the tenderers.

 

Award Criteria

The Award Stage involves examination of the merits of the bids. This will identify which of the eligible tenderers will deliver best value for money for the organisation, based on the Most Economically Advantageous Tender, depending on the criteria agreed by the User Intelligence Group (UIG). In accordance with regulation 76(10) of The Public Contracts (Scotland) Regulations, contracts must be awarded on the basis of both quality and price. Your Organisation must not therefore use price only or cost only as the sole award criteria. Instead, your Organisation must identify the Most Economically Advantageous Tender on the basis of the Best Price Quality Ratio, which must be assessed on the basis of criteria linked to the subject matter of the contract and must include the price or cost using a cost effectiveness approach.  Award criteria must be considered and linked to the subject-matter of the contract where they relate to the goods or supplies to be provided under the contract in any respect and at any stage including factors which do not form part of their material substance. A cost effectiveness approach may include life cycle costing.

The Procurement Officer should work with the UIG to agree appropriate award criteria, based upon their knowledge of the goods or services to be procured and the critical aspects of the requirement as identified in the Specification.

The criteria identified must relate directly to the goods or services to be provided and not focus on the characteristics of the individual suppliers. Each award criterion should be clearly defined, so that there is a common understanding of what it means.

Good criteria will ensure that responses from suppliers clearly address the most critical aspects of the specification and allow the evaluation panel to make a fair and equal comparison of the bids received.  Award criteria must ensure the possibility of effective competition and be accompanied by specifications that allow the information provided by bidders to be verified during their award criteria assessment. Some examples of award criteria are given below:

  • Quality/Technical Merit - Is the product or service proposed fit for purpose? How well does it perform?
  • Design, functional characteristics and aesthetics - How should the product look and feel? How easy is it to use?
  • Community Benefits – Consideration of community benefit requirements required for contracts valued equal to or greater than £4M, recommended for use below this threshold.
  • Sustainable Procurement - e.g. social, economic and environmental considerations and fair work practices, see Statutory Guidance.
  • Innovation, where appropriate - e.g. new or novel concept?
  • Maintenance, ongoing technical support or after sales service - What support is required and available?
  • Delivery or period of completion - the guaranteed turnaround time from order to delivery or provision of service
  • Price - The whole life cost including the initial purchase price, operating costs, consumables and disposal costs. How cost effective will the goods/service prove to be?
  • Life Cycle Costing –  this may be considered for use where additional environmental costs can be attributed to the products or services that you are purchasing such as the cost of carbon emissions from machinery being bought
  • Labels – does the product or service you seek have specific social or environmental characteristics that would be verified by a label such as Fairtrade (please note that equivalent labels or other proof must also be accepted)?
  • Test reports and certification may be requested – note that equivalents from other member states must be accepted.
  • Organisations may also evaluate the organisation, qualification and experience of staff where the quality of staff assigned can have a significant impact on the level of performance of the contract. However, where this option is taken, such matters must not also be assessed at the selection stage of the procurement process.

 

Fair Work Practices

Your Organisation must have regard to the guidance published by the Scottish Ministers under the Guidance under the Procurement Reform (Scotland) Act 2014 on “Addressing Fair Work Practices” for the award of contracts. The guidance provides that a Procurement Officer should consider the relevance and proportionality to the contract of fair work practices for its inclusion in the award criteria while ensuring the appropriate balance between quality and cost of the contract.  Fair work practices will be particularly relevant to consider where the quality of the services or goods to be delivered is directly affected by the quality of the workforce engaged in the contract. 

In deciding whether or not fair work practices are relevant to the quality delivered under a contract, Procurement Officers should consider all relevant factors and be able to justify their inclusion in any decision making process.  For a relevant contract Purchasing Officers should consider whether:

  • There is any previous experience of poor quality practices, including pay and conditions, impacting on the quality of the contract to be delivered;
  • There is any history of low pay or unequal pay in that sector;
  • There is a risk that staff working on the contract might be subject to exploitative practices e.g. through the inappropriate use of zero hours contracts, through unnecessary distancing of the employer-worker relationship e.g. by use of any “umbrella company”, and through pay and hours arrangements that deny workers stability of employment or hours of work e.g. by failing to pay wages for travel time within the working day, such as in the care at home sector;
  • There is evidence that working conditions are making recruitment and retention problematic;
  • Contractors are seeking to cut their costs through driving down staff terms and conditions, including pay;
  • Workers will be required to interact directly with the Organisation’s employees and/or members of the public and whether they will spend any time on the organisation’s premises

In any of these situations, fair work practices are likely to be relevant considerations for the contract in question.  However this is not an exhaustive list and other factors may be relevant, depending on the specifics of an individual contract. Fair work practices should be  conducted in a proportionate, objective, transparent and a non-discriminatory manner in recognition that responses may describe different approaches to fair work practices depending on the size and status of the bidders. An example of a fair work practices Invitation to Tender question can be found in Annex A  of the Addressing Fair Work Practices Statutory Guidance, including the Living Wage, in Procurement.  Further information to consider can be found in Fair Work Practices Considerations.

 

Fair and Ethically Traded Goods

Award criteria can also relate to the supply or use of ethically or fairly traded products. Criteria and conditions relating to trading and its conditions can refer to the fact that the product concerned is of fair trade origin, including requirements to pay a minimum price and price premium to producers. Furthermore, environmental considerations can include the delivery, packaging and disposal of products and when looking at contracts with a service element, this can refer to waste minimisation or resource efficiency.  It is important to note however, that this excludes criteria and conditions relating to a bidder’s general corporate social responsibility policy.

 

Price / Quality Ratios

You may find it useful to refer to the Strategic Positioning Action Plans to help decide the appropriate price/quality ratio to apply.

The table below provides some suggested criteria and ratios depending on the nature of the commodity/service being procured:

Commodity/Service Type

Description

Suggested Price/Quality Ratio

Routine

  • Low Value/High Volume
  • Many Existing Alternatives

80:20

Leverage

  • High spend area
  • Many Sources of Supply
  • Commercial involvement can influence price

60:40

Strategic

  • Strategic to Operations
  • Few Sources of Supply
  • Large Spend Area
  • Specification may be complex

60:40; 50:50; 40:60

Bottleneck

  • Few Sources of Supply and alternatives available
  • Complex specifications
  • If supply fails, impact on organisation could be significant

40:60; 10:90

 

Scoring Methodology for Award Stage Evaluation

The Procurement Officer should ensure that a robust methodology is developed to assist with the evaluation process.

If PCS-Tender is being used, the Procurement Officer should input the weightings in relation to the specified criteria. Please note that all sections should add up to 100 and all questions within each section should also add up to 100.

An example of scoring methodology is provided below and should be used when utilising PCS-Tender:

 0 

Unacceptable

Nil or inadequate response. Fails to demonstrate an ability to meet the requirement.

25

Poor

Response is partially relevant and poor. The response addresses some elements of the requirement but contains insufficient/limited detail or explanation to demonstrate how the requirement will be fulfilled.

50

Acceptable

Response is relevant and acceptable. The response addresses a broad understanding of the requirement but may lack details on how the requirement will be fulfilled in certain areas.

75

Good

Response is relevant and good. The response is sufficiently detailed to demonstrate a good understanding and provides details on how the requirements will be fulfilled.

100

Excellent

Response is completely relevant and excellent overall. The response is comprehensive, unambiguous and demonstrates a thorough understanding of the requirement and provides details of how the requirement will be met in full.

If the Procurement Officer is not utilising PCS-Tender for their procurement, an example of scoring methodology is provided below and should be used in conjunction with the Evaluation Matrix: this can be tailored to suit the specific requirements of your procurement exercise.

  0       

Unacceptable

Nil or inadequate response. Fails to demonstrate an ability to meet the requirement.

1

Poor

Response is partially relevant and poor. The response addresses some elements of the requirement but contains insufficient/limited detail or explanation to demonstrate how the requirement will be fulfilled.

2

Acceptable

Response is relevant and acceptable. The response addresses a broad understanding of the requirement but may lack details on how the requirement will be fulfilled in certain areas.

3

Good

Response is relevant and good. The response is sufficiently detailed to demonstrate a good understanding and provides details on how the requirements will be fulfilled.

4

Excellent

Response is completely relevant and excellent overall. The response is comprehensive, unambiguous and demonstrates a thorough understanding of the requirement and provides details of how the requirement will be met in full.

You can include special contract performance conditions as long as they are linked to the contract subject matter. Such conditions may cover economic, innovation-related, environmental, social or employment-related conditions.  If specific performance conditions are to be used they must be included in the Prior Information Notice or the Contract Notice and in the Procurement Documents.

At Award Stage Bidders may be requested to supply the names and professional qualifications of the staff involved in the performance of the contract.

A clearly documented process must be followed in order to ensure there are satisfactory responses from suppliers and no inconsistencies in the procurement process, which could ultimately result in a legal challenge. Any failure in this respect will leave the procurement suspect to audit scrutiny and legal challenge.

 

Contract Performance Requirements

Organisations are required by law to include such conditions relating to the performance of the contract as are reasonably necessary to ensure that the bidder which is awarded the contract complies with environmental, social and employment law in performing the contract, providing that these are linked to the subject matter of the contract, and are indicated in the call for competition or the procurement documents.  If specific performance conditions are to be used they must be included in the Prior Information Notice (where it is the call for competition) or the Contract Notice and in the Procurement Documents.

Bidders may be requested to state, in their tender or request to participate, the names and professional qualifications of the staff involved in the performance of the contract.

A clearly documented process must be followed throughout the award stage, as for the whole of the procurement process, in order to ensure there are no inconsistencies in the procurement process, which could ultimately result in a legal challenge.

 

General Principles

At the contract award stage you should ensure that the contract complies with the conditions, requirements and criteria set out in the Procurement Documents.  In addition, you may decide not to award a contract to the winning tenderer, if their bid does not comply with the applicable obligation in the fields of social, environmental and labout law, established by EU law, national law, collective agreements or by the international provisions including appliable collective agreements and the obligations set out in the Annex X of the 2014 Public Procurement EU Directives.

 

Variants

You may consider variants on the requirements as long as it has been specified in the Procurement Documents, together with the minimum requirements and how the variant will be evaluated. Variants cannot be considered unless this has been done and they meet the minimum requirements. All variant bids should be evaluated using the same criteria as the standard bids and compared on a like-for-like basis.

An organisation should also consider whether to allow potential service providers to set out options in relation to different TUPE scenarions within its tenders. If so, it should provide clear directions to tenderers to ensure that bids can be compared on a like-for-like basis.

As with all aspects of the procurement process, such decisions and actions must be made in line with your own organisation’s governance procedures and in any event, be in line with any stated intentions that were advertised in the relevant Procurement Documents.

Any documents you need are listed below:

C&SS Award Criteria Guidance (file type: docx)

Evaluation Matrix (file type: xlsm)

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