Guidance for officers and members
Evaluating Tenders
The award of tenders on the basis of lowest price is often a
false economy. Tenders should be
assessed on the value for money they offer the
authority - that is the optimum balance of costs
and benefits that meets the client’s
requirement, including whole life costs such as
those in the table below.
Whole life costs
- Initial price
- Delivery and installation
- Operative resources
- In-house management resources
- Consumables
- Spare parts
- Licences
- Taxes
- Maintenance
- Energy consumption
- Depreciation
- Disposal
Evaluation of quality will entail the Client and Procurement
Unit in identifying the criteria against which they will evaluate
suppliers’ proposals, weighting these on the basis
of their relativeimportance and scoring them.
Quality criteria need to be carefully identified for each
procurement project. They will differ from project to project. The
Procurement Manager will discuss mechanisms and identify the best
balance of cost and quality in conjunction with the client.
Post-Tender Negotiation (PTN) is the process of
negotiating with a tenderer whose tender appears to offer best
value for money in order to obtain improved terms for the
authority. Information from these activities should be fed back
into the tender evaluation process.
PTN is only successful when it has:
• produced an outcome that is acceptable to both sides;
• been carried out efficiently and is not more resource
intensive than necessary;
• encouraged and supported a good working relationship between
the parties rather than reinforced adversarial relations. It should
be noted that where the procurement regulations apply
there are restrictions in the use of PTN for above-threshold
contracts under the open and restricted procedures. PTN should
therefore only be undertaken with advice from the
Procurement Unit.