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Procurement Perspectives: Guiding principles of the evaluation process

Stephen Bauld
Procurement Perspectives: Guiding principles of the evaluation process

There are many factors to consider in the evaluation process.

The issue is while the identifying evaluation criteria in relation to an RFP must be reasonably indicative of the criteria of assessment, they need not be exhaustive.

It is not necessary to delve into sub-criteria so long as they are reasonably related to those criteria that were expressly identified. The valuation process requires professional judgment drawing upon training and experience of the evaluators. The theoretical goals of the bid process itself can be summarized simply enough in the following two statements:

The process should be transparent. It should be possible for an objective third party to see how decisions were made.

The process should be fair. The bids should be evaluated on the criteria that were established when the bids were solicited, subject to such modifications as may have been properly brought to the notice of the bidders. Unless such fairness prevails, the municipality can have no certainty that the bids it is evaluating will offer the best possible combination of price and functionality.

A proper method of scoring must take into account the requirements and expectations of the ordering department within the municipality as well as the more formalistic and uniform expectations of the purchasing department itself.

Suppliers should also be consulted in the process of formulating performance evaluation criteria, to ensure the criteria selected are realistic. Important pervasive considerations include the following:

The criteria should have a bearing on the value to the customer (the municipality) of the supply that is being made. For instance, a timely supply of items that are consumed at a predictable rate in the ordinary course of municipal activity is clearly essential, since the value of supply is obviously adversely affected if the items in question are not there when required. On the other hand, while timeliness will always have some value, for other types of commodity, it is nowhere near as critical a consideration.

Appropriate weightings should be given (i.e., the weight given to each criteria should be relevant to the type of good or service that is being supplied). One should look at the most significant cost components for the item that is being supplied and identify a way of determining whether the supplier’s performance is driving those costs up or down.

The criteria that is to be measured should be one for which comparable data is relatively readily available.

It is better to measure a few select criteria well, than to measure a wide range of criteria poorly. The criteria selected must be understandable. A focus on a few critical considerations, which are tied to the municipality’s own strategic objectives, will lead to a system that is readily understandable and effective.

The results obtained through measurement should allow meaningful comparison of a supplier against its competitors and also against some overall standard of acceptability.

Unfortunately, often it is only during the process of bid evaluation that fundamental flaws will be discovered in the evaluation criteria.

This particular problem breaks down into four sub-classifications: important information was left out of the specifications; specifications are redundant; specifications included in the process prove to be irrelevant to functionality; and the criteria of assessment are far too detailed.

In general, bid evaluation relates to the award of very high (or low) grades to one bidder and exceptionally low (or high) to another.

The concern in such cases is the appearance of bias, an appearance that is likely to be confirmed if the person giving the scores concerned is unable to furnish a creditable basis for the scores given, when and if they are called into question.

Where a “must” system is employed, the high scoring bid will necessarily receive the full points available in any category.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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