How do you establish award criteria?

Award criteria are the specific conditions and evaluation aspects used to evaluate and select bids for a tender. Establishing clear and objective award criteria is crucial for a transparent and fair procurement process. They help the contracting authority evaluate tenders in a structured manner and select the tender that best meets the requirements. For companies participating in tenders, a good understanding of the award criteria is essential to align their bid with the contracting authority's expectations.

Why are award criteria important?

Award criteria form the basis of the evaluation process in a tender. They give bidders clarity about what is expected of them and provide the contracting authority with an objective framework for comparing tenders. Careful drafting of award criteria ensures that the tender offering the most value is selected. These criteria can include price, quality, sustainability, risk management, and other relevant factors that contribute to the success of the contract.

Benefits of well-drafted award criteria:

• Objectivity and transparency: Clear award criteria ensure a fair and transparent evaluation process, where tenders are evaluated in a consistent manner.
• Better quality of tenders: By clearly communicating what is important, award criteria encourage bidders to better align their offers with the contracting authority's requirements.
• Targeted Selection: Award criteria help select the tender that offers the most value, rather than just the lowest price. This often aligns with an EMVI(Most Economically Advantageous Tender) approach.
• Reducing risks: By paying attention to risk management in the award criteria, contracting authorities can ensure that risks are better managed and project implementation runs more smoothly.

How do you establish award criteria?

1. Define the objectives of the procurement:

Start by determining the objectives of the procurement. What does the contracting authority want to achieve? This can range from obtaining the best value for money to selecting a party that excels in innovation or sustainability. The award criteria should align with these objectives.

2. Choose between price and quality:

Decide whether to focus on lowest price, best quality, or a combination of both. In many cases, an EMVI methodology is used that assesses both price and quality. Determine which quality aspects you want to evaluate, such as technical specifications, references, or sustainability.

3. Identify relevant quality criteria:

Determine which aspects of quality are important to the contract. These may include aspects such as technical performance, innovation, risk management, planning, and customer satisfaction. Make sure these criteria are clear and measurable so bidders know how to score on them.

4. Assign weighting factors:

Determine the relative weight of each award criterion. How important is price relative to quality? Which quality criteria carry the most weight? By assigning weighting factors, you can set priorities and give bidders clear direction for their offer.

5. Make the criteria measurable and objective:

Make sure each award criterion is measurable and objective. Avoid vague terms and make sure evaluators have clear guidance for scoring tenders. This can be done, for example, by setting specific requirements for references, performance or sustainability certifications.

6. Use sub-criteria where appropriate:

If some criteria are complex or broad, consider using sub-criteria. This can help better assess specific parts of a criterion and makes the assessment process more detailed and accurate.

7. Align with stakeholders:

Discuss the proposed award criteria with internal stakeholders, such as project managers, technical experts, and legal advisors. This ensures that the criteria align well with needs and expectations within the organization and that they are achievable.

8. Test criteria in advance:

Conduct a pilot evaluation to test whether the award criteria are effective and lead to the desired outcome. This can help identify weaknesses in the criteria and make adjustments before the tender is formally published.

Example of award criteria and weighting factors:

• Price (40%): Score based on the total cost of the offer, with the lowest bid receiving the maximum score.
• Quality of the plan of action (30%): Assessment of the feasibility, approach and methodology as described in the plan of action.
• Risk Management (20%): Evaluation of the risk analysis and proposed risk management measures, as described in the risk management plan.
• Sustainability (10%): Assessment of the sustainability of the solution offered, including the use of environmentally friendly materials and processes.

Common mistakes in creating award criteria

• Too much focus on price: A one-sided focus on price can come at the expense of quality and can lead to poor project results. Ensure a good balance between price and quality.
• Vague or non-measurable criteria: Vague award criteria lead to subjective judgments and can cause conflicts. Make sure criteria are clear, objective and measurable.
• Lack of alignment with stakeholders: Without alignment with internal stakeholders, criteria can be misaligned, leading to unrealistic or impractical expectations.
• No weighting of criteria: The absence of weighting factors can lead to confusion and an inconsistent assessment process. Make sure all criteria are weighted according to their importance.

Conclusion: How do you set award criteria and why are they important?

Establishing award criteria is a critical part of the procurement process. By formulating clear, measurable and well-weighted criteria, you ensure a transparent evaluation process that selects the right party for the contract. Award criteria help bidders better align their offers with the contracting authority's expectations and goals, leading to better project outcomes and a fairer process.