The price/commercial evaluation of tenders should be completed by the procurement officer.
To enable an easier comparison, you should include a price schedule (or use the commercial envelope if PCS-Tender is being used). This should include a breakdown of the product/service areas for tenderers to complete.
The evaluation should identify and compare all the costs and benefits which can be quantified in monetary terms.
You may consider including a 'whole-life costing' approach. This would account of all aspects of cost from cradle to grave (acquisition, operation, ownership and disposal).
Higher value or complex procurements may require the use of investment appraisal techniques (such as discounted cash flow calculations). In all cases the data to be provided by tenderers and the method for price evaluation should be defined within the Invitation to Tender (ITT) documentation.
Where life cycle costing has been detailed in the specification; the evaluation must take into account all of the identifiable costs attributable to a product or service from:
- its acquisition
- through use,
- maintenance and
- end of life (recycling/disposal).
These can be direct costs like scheduled maintenance and energy used through the life of a road sweeping vehicle. This also includes less apparent external environmental costs such as the cost of emissions of greenhouse gases based on the energy use of the road sweeper.
The use of life cycle costing can support your organisation in meeting the requirements of the Sustainable Procurement Duty.
You may find the Supplier Cost Drivers Checklist useful when developing a pricing schedule.