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The Importance of Non-Price Criteria in a Tender

November 9, 2022

In complex bidding it can be tempting to focus solely on price. However, it’s important to remember that price is not the only factor that evaluators take into account.  Non-price criteria – or quality requirements – are increasingly taken into consideration when contracts are awarded. In this article, we’ll take a look at some of the other factors that evaluators consider when they score your bid. By understanding how to address them in your submission, you’ll increase your probability of winning.

The economic impact of procurement is no longer limited to cost savings, but by measuring outcomes and impact over time. These measures can include human, social, economic or environmental considerations which is why it’s so important to focus on more than just price when you’re preparing your bid submission.

Tenders are typically evaluated using a scoring system, and broken down into sections with associated questions within them. Bidders need to score highly in each section to demonstrate the best value for money (the most advantageous combination of whole-life cost and quality to meet the customer’s requirements).  Evaluators assess value for money, or MEAT (most economical and advantageous tender) using a range of criteria relevant to their objectives, which covers both price and non-price criteria, as illustrated below.

Example of price and non-price tender evaluation criteria

Technical Ability

One of the most common non-price criteria that evaluators will consider is your technical ability. This includes factors such as your skills, experience and capacity to fulfil all the required areas of the contract.  If you’re bidding on a project or services contract that requires specific technical skills or knowledge, then you need to be able to demonstrate that you have what it takes to get the job done. The best way to do this is by providing evidence of success through case studies or testimonials from similar customers, projects and/or services.

Tips to demonstrate your technical capability and experience:

  • The overall amount of revenue generated by your company for similar work relative to the rest of the business.
  • The number of relevant or similar projects or services contracts completed, their total budget, resources allocated and time schedule or contract duration.
  • In addition to the number of qualifying projects or services contracts, the aggregated number (counting all projects or services contracts together) of users or population served, number of kilometres, regional or national reach and so on).

Past performance

For most projects or service contracts, evaluators will want to know if you’ve successfully delivered similar work before; who will be responsible for managing the work; and ensuring that it is completed on time and to the required standard. They’ll also want to see evidence of your team’s experience and qualifications, as well as any relevant industry accreditations. But past performance is not the same as corporate experience.  While corporate experience might outline what you have done before, past performance is a way for evaluators to assess risk against how well you know how to do the work, and how well you have done it previously. This is a non-price criteria that every bidder should proactively keep on top of with the contracts and delivery team.

Tips to demonstrate your past performance:

  • Create a repeatable format to continuously capture, monitor and update your past performance data (a table is an easy way to present lots of succinct data, and a project gantt can help you identify relevant projects or services to showcase)
  • Align your description of the past project/service description with the current tender opportunity
  • Include contract values and dates, outcomes/impact and lessons learned, key performance indicator results and/or value adds to demonstrate continuous improvement and approach risk management.

Methodology

To have a competitive bid, suppliers must develop their offers in response to the customer’s requirements.  Comparing bidder methodologies – or your approach to delivering the project or services – helps evaluators get insight into for whether a supplier really understands the customer’s business needs and concerns; whether they appreciate what’s involved in the scope of work; and whether the solution is feasible. The methodology you propose is also a good way to differentiate your systems and procedures, as well as the people who will be doing the work.

Tips to demonstrate your methodology:

  • Explain the structure of your work plan, the main steps in your approach, and the objectives and outputs/outcomes expected of each step.
  • Include a flow diagram that highlights activities in a sequence towards the final deliverable, including clear roles and responsibilities of team members (including sub-contractors or partners).
  • Address how you will control the delivery process and manage the associated risks including project governance lines of reporting (internal to your organisation, as well as with the customer).

Management systems

The management processes and procedures your company has in place should give evaluators insight into how best practice is achieved in relation to quality in all aspects of your service and service delivery.  Depending on the bid requirements, you might highlight your company systems in relation to: ethical business practices such as managing conflicts of interest; how you identify and manage project, contract and key person risks; how you manage project requirements such as the planning and management of human, physical and financial resources; your systems for environmental management; how you establish and maintain cooperative relationships and approach non-adversarial dispute resolution; as well as how you use technology to improve the customer experience.

Tips to demonstrate your management systems:

  • Management strategies your company uses to minimise risk in service delivery and contract management, including the basic framework or structure of your operational systems, policies and practices, and how performance is monitored and evaluated.
  • The quality, occupational health and safety and environment management systems you have in place that align to, meet or exceed International Standards (be sure to specifiy if they have been independently certified).
  • How the systems eliniate waste, re-work, duplication and non-value adding tasks on the one hand while achieving continuous improvement in methods, procedures, standards and efficiency on the other.

Social value

The social value of a project or service is the additional positive impact that it has on society beyond its direct economic value. In other words, social value takes into account the wider benefits to people and communities that a project or product delivers. With the Social Value Act coming into effect in the UK, and now widely adopted internationally, organizations will be required to consider non-price criteria such as social value when commissioning services. This means that contractors who can demonstrate added social value are more likely to be awarded contracts.

Tips to demonstrate social value:

  • Illustrate how your project or service will improve accessability (or reduce barriers to access); create jobs and/or have a positive impact on the local community.
  • Show how your project or service will help to improve local infrastructure across the entire lifecycle.
  • Outline how your project or service will benefit or reduce impact on the environment.

As we’ve seen, there are a number of different factors that evaluators will take into account when scoring your bid submission. The use of non-price selection criteria helps to ensure objectivity in assessing suppliers and also acts as a risk management tool by identifying any weaknesses that a certain contractor or proposal may have.

While price is certainly important, it’s not the only criteria that evaluators look at at. Make sure you take the time to understand all of the different criteria that could be used to score your bid and ensure that you address them all in your submission.

 

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