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Services Contracts
Guidance for Evaluation Teams on The Evaluation of Tenders
ă Issued by ProjecTeam Ltd T: 0161-766-8709 F: 0161-766-8709 E-mail: mdrake@projecteam.co.uk www.projecteam.co.uk
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1. Introduction
1.1 These Guidance Notes have been drafted for contract awards that need to comply with the rules for competitive tendering under the EC Services Directive (Council Directive 92/50/EEC) implemented in the UK by the Public Services Contracts Regulations 1993 (SI 1993/3228). Where those rules do not apply, we would still recommend adherence to the procedures set out in the Guidance, as a matter of good practice.
1.2 The evaluation of tenders must only deal with issues that come under Part 5 of SI 1993/3228. The suitability of tenderers to undertake the work should have been dealt with at the pre-qualification stage under Part 4 of the Regulations. Issues such as track record and financial stability are therefore not issues that should concern the bid evaluation, unless there is reason to believe that circumstances have changed or you have been misled at the tenderer selection stage. Before being put to the expense of tendering, the tenderer has the right to know that, subject to his proposals on service delivery, pricing and other contract related issues being acceptable, he would be considered suitable as a contractor.
1.3 Non-compliant bids should only come into consideration after the evaluation of compliant bids has identified a front runner against which it can be compared. A non-compliant bid can be dismissed for many reasons (for example, that the idea is considered unworkable; it is below an acceptable standard; it offers no advantage to the Specification as issued; or it involves unacceptable risks). A non-compliant bid should not be accepted if the other tenderers could equally well have priced the proposal had they known that it would be given consideration. If this was the case, it would call into question the wording of the original Specification and the other tenderers should be invited to submit their corresponding offer. Unique copyright protected solutions could provide grounds for a non-compliant bid that could be considered, assuming there are cost advantages or quality of service benefits at no additional cost.
2. The
Tender Opening
2.1 A sealed bid tender opening procedure must be established and a Tender Opening Panel appointed. Each member of the Panel must be present at the meeting where the tenders are opened.
2.2 At least one member of the Panel should also be a member of the tender Evaluation Team.
2.3 If the designated Authority’s Representative is known, he / she should also be a member of the Panel in order that they have a full understanding of the basis on which the contract was let.
2.4 A sample “Tender Opening Record Form” is contained in Appendix A. Before commencement of the tender opening, the Panel should prepare a checklist of the documents that should have been returned by the tenderer and the places where the tenderer has been required to insert information. The comments column can be used to highlight any shortcomings in the returned tender.
2.5 The tenderer is entitled to submit alternative proposals unless the OJEC advertisement stated otherwise. CUP GN59C (Model Invitation to Tender) sets out the position in this regard in Document 1 paragraph 21.
2.6 Each member of the Panel must initial each page of tenders received. This is necessary in order that there can be no doubt with regard to which pages formed part of the tender submission.
3. The Evaluation Process
3.1 The Evaluation Team and the evaluation criteria must both be established before the return of tender date.
3.2 If the designated Authority’s Representative is known, he / she should also be a member of the Evaluation Team.
3.3 The Team needs to have, or be able to call upon, a wide range of expertise including Financial, Contracts, User, Personnel and Legal.
3.4 The evaluation should be considered in two parts, financial and service delivery.
3.5 It is recommended that those dealing with the service delivery issues should not be aware of the pricing information. It therefore follows that they should not also be members of the Tender Opening Panel. The reason being that they will do their job objectively if they do not know which tenderers are the front runners on pricing.
3.6 In formulating the evaluation strategy the Evaluation Team need to take into account the Tender Board reporting requirements. An example of how to meet this requirement can be obtained by reading the “Guidance for Tender Board Members and Evaluation Teams on Tender Board Procedures” issued under separate cover.
3.7 In compliance with SI 1993/3228 regulation 21, the tender evaluation criteria must be stated in the OJEC advertisement or in the Invitation to Tender. CUP GN59C sets out examples of detailed evaluation criteria in Document 1 paragraph 18. The process must therefore be based on the declared criteria.
3.8 As stated under 1.2 above, SI 1993/3228 Part 4 issues can only be taken into account to the extent that information comes to light that establishes that the pre-qualification team have been misled regarding a tenderer’s suitability or there has been a change of circumstances that makes the tenderer no longer suitable. The change of circumstances would need to be clear cut and capable of explanation at a de-briefing if this was a factor in the tenderer not being selected. The following issues are examples of subjects that should not form part of the bid evaluation, other than in the review context stated:
Ř Size of the contract in relation to other contracts undertaken by the tenderer
Ř Conflict with other contracts held by the tenderer
Ř Financial stability
Ř Track record
Ř Company Training Policies
Ř Staff turnover
3.9 The non financial issues such as the evaluation criteria (as in CUP GN59C Document 1 paragraph 18) and information requested from the tenderer (as in CUP GN59C Document 4) will be evaluated by the relevant technical experts on the Evaluation Team.
Financial
Evaluation
3.10 The financial specialist can be expected to look at issues such as :
Ř Tender equalisation relating to the cost of servicing the In-House Team (training, payroll, personnel etc.)
Ř Tender equalisation in terms of accommodation space used (see CUP GN 59C Document 2, Part 2)
Ř Tender equalisation in terms of the GAD certification (where TUPE is applicable)
Ř Sensitivity analysis (rates with volume banding would be an example)
Ř Tenderer’s financial standing (only applicable if there has been a long time lapse since pre-qualification or there has been a change of circumstances)
3.11 The evaluation process is all about scoring the information contained within the tender. An elaborate scoring system may be needed so as to demonstrate that objective criteria have been applied fairly to all tenders. This is likely to involve a process of “extrapolation” – an assessment or calculation made on the basis of known facts or values, to estimate unknown facts or values.
3.12 Thus it will be necessary to determine the values to be set against hourly rates or individually priced items. These rates must be extrapolated in order that high rates will have an impact in comparing the tenders. A hypothetical model or series of models could be constructed and applied to each tender. The alternative is to put approximate values against each item in the tender document and indicate that the resultant sum is considered to be a Provisional Sum. An argument against doing this is that if the contractor is informed of this calculation, he is likely to assume that the contract budget includes this money and is therefore available to be spent.
3.13 One critical issue is the extent to which additional points scored might convert into additional monies that will be paid under the contract. This is the most difficult area to address. It is assumed in this context that the tenderer with the lower score and cost is capable of doing the work and can meet the Specification requirements. A number of factors could be considered, which may vary for individual contracts:
Ř The quality of the submission and resultant confidence level in the tenderer as reflected in the scoring (eg. strength of the management team and the level of resources)
Ř Any perceived difference between the tenderers as to the likely cost of managing the contract
Ř The criticality of the service (confidence in hand-over arrangements would be a factor)
Ř Audit accountability for any additional monies that would have to be paid
There are no fixed rules, there is however a duty of care to the lower priced tenderer who has been through all the expense of tendering. The award prices are likely to be published, therefore unsuccessful tenderers will become aware of the additional money to be paid. They will therefore need to be satisfied in their own minds that the process was fair and that reasons given at the de-briefing for not being successful can be understood even if not agreed.
3.14 The evaluation process should avoid giving additional marks for ‘extras’ within the tender above the level of the Specification if these marks seek to justify additional cost. The reason being that the other tenderers have not been given the chance to price these unknown additions and they have a right to assume that the Specification is comprehensive. However if a tenderer is offering to do more work at no additional cost, then at award the Specification should be enhanced to reflect the agreed improvement.
Service Delivery and other Contract Issues
3.15 In order to produce a meaningful evaluation, the headings against which a judgement is to be made need to be identified. Having identified the heading, a scoring system needs to recognise that some issues are more important and that they should be weighted accordingly. In addition to the relative importance of each heading, there needs to be a scoring system that reflects the extent to which the tenderer has complied with the requirement. The following table provides numerical values to reflect the extent of compliance.
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COMPLIANCE SCORING
CRITERIA |
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0 |
SHOW STOPPER – CANNOT AWARD IF NOT REMOVED FROM THIS STATUS |
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1 |
UNACCEPTABLE – BELOW MINIMUM REQUIREMENTS, BUT NOT IN ITSELF A SHOW STOPPER |
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2 |
MEETS THE SPECIFICATION REQUIREMENTS |
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3 |
PROVIDES ADDED VALUE |
3.16.1 As previously mentioned, CUP GN59C includes two places where the tenderer is required to provide information which should be evaluated and scored, these can be found in Document 1 paragraph 18 and Document 4. The following table, using headings from Document 1 paragraph 18, illustrates how weighted headings and compliance status are jointly used to establish a comparative score.
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TENDER
SUBMISSION SCORE SHEET
Sheet of |
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Project: Tenderer: Panel Member: |
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Subject |
Compliance Score |
Weighting |
Weighted Score |
Comments |
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Understanding of the requirement |
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5 |
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Resource level & quality |
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4 |
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Suitability of
sub-contractor (if not known at pre-qualification stage) |
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4 |
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Confidence in method statement |
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4 |
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Quality Plan |
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4 |
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Confidence in ability to deal with Variations and response to change |
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3 |
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Ideas for improving the service |
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3 |
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Understanding of handover issues |
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3 |
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3.17 The subject headings are bound to vary for each project. As an example there might also be a score for the overall quality of the tender submission, which is often a reflection of the tendering company’s level of interest in the project. A very poor submission could never be given a Compliance Score of 0 because whilst it is an indication of the company’s ability to deal with administration it is not in itself a showstopper. On the other hand if the tender submission clearly demonstrated that the tenderer has no idea with regard to the “understanding of the requirement” there would be no point in awarding them the contract, a Compliance Score of 0 would be appropriate under that subject heading.
RESTRICTED COMMERCIAL -
TENDER OPENING RECORD FORM - TENDER
REFERENCE [ ]
TENDER RETURN DATE: /
/ 2002 TENDER OPENING DATE /
/ 2002 TIME: :
hrs.
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NAME OF
TENDERER |
TENDERED PRICE |
No. of AMENDMENTS ACKNOWLEGED* |
No. of TENDERER
QUALIFICATIONS LISTED** |
ALL DOC.S RETURNED |
ALL SCHEDULES COMPLETED |
ANY ALTERNATIVE PROPOSALS*** |
COMMENTS |
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Chairperson: [ ] Position: [ ] Signed: Date: / /
Panel Member: [ ] Position: [ ] Signed: Date: / /
Panel Member: [ ] Position: [ ] Signed: Date: / /
Panel Member: [ ] Position: [ ] Signed: Date: / /
The form should be reviewed for suitability for each project.
* The Form of Tender enclosed with the ITT should have a space for the tenderer to state the number of Amendments to the Invitation to Tender the tendered sum takes into account. In CUP GN 59C the acknowledgement is contained in the opening paragraph.
** The ITT document should provide a place for the tenderer to insert any proposed Amendments to the proposed contract. In CUP GN 59C this has been done in Document 4, Part 2.
*** Subject to the submission of a compliant bid, the tenderer may submit a non-compliant bid. CUP GN 59C Document 1 paragraph 21 relates.
ă Issued by ProjecTeam Ltd Tel:
0161-766-8709 Fax: 0161-766-6620
E-mail:
mdrake@projecteam.co.uk
www.projecteam.co.uk