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Decide your evaluation criteria​​

​Your evaluation criteria is the set of standards or tests that you'll judge proposals against, including preconditions, value for money, capability and capacity.

Preconditions

Preconditions, sometimes called pre-qualifying criteria, are prerequisite requirements that must be met or the offer will be rejected. They are either pass or fail.

Use preconditions sparingly and only for critical requirements that are essential to the deliverables.

A precondition could say that the supplier must:

  • hold a current New Zealand Medical Council practicing certificate
  • have professional indemnity insurance, or
  • accept the terms and conditions of contract.

Be explicit about what you require and word the precondition so it's easy to say whether the supplier meets or doesn't meet it. If you're worried about limiting competition through onerous preconditions, you could require that a supplier either meets the precondition now, or agrees to meet it before the contract begins.

Mandatory conditions

Mandatory conditions are the requirements or rules about the process of submitting a proposal. They are either pass or fail - any proposal that fails to meet the conditions can be rejected.

Mandatory conditions can include:

  • supplier name, address and contact details included
  • signed declaration of conflict of interest included.

You must highlight these conditions and provide clear guidance for suppliers on how to meet them.

Failure to meet all the conditions can result in an offer being automatically rejected, or you could allow discretion for minor failures that can be easily fixed (as long as you don't give the supplier an unfair advantage), e.g. providing five copies instead of six.

Qualitative criteria

Qualitative criteria assess the merits of each offer, including:

  • technical merit (or fit for purpose)
  • capability and capacity (of the supplier to deliver)
  • value for money (based on whole-of-life cost)
  • financial viability and risk assessment (this is assessed as part of your due diligence).

Technical merit - fit for purpose

Consider:

  • the degree to which services meet or exceed requirements
  • quality of services
  • degree of innovation
  • extent of risk.

Capability and capacity - supplier’s ability to deliver

Consider the provider or supplier's:

  • size, structure and type of organisation, number of employees, annual turnover
  • current commitments and availability to deliver on time
  • understanding of the requirements - methodology and approach to delivery
  • identification and management of risk in delivery
  • industry or quality awards
  • relevant licences and accreditations
  • cultural competency
  • willingness to co-operate, such as degree of acceptance of buyer’s conditions of contract
  • ability to offer products or services with low environmental impact or ability to reduce over life of contract such as carbon impact, approach to corporate social responsibility
  • financial soundness
  • IT capabilities, financial and project management systems and administrative support
  • track record in delivering similar services
  • relevant experience and qualifications of key personnel and/or key sub-contractors.

Past performance is a good indicator of capability and capacity to deliver – but you need to balance the importance of past performance as a criterion against the possibility that you might exclude new suppliers with an innovative solution.

If past performance is important, you can reserve the right in the RFP terms to consider information that's not included in the supplier's proposal. This means you can seek information from other agencies who have worked with a supplier.

Value for money - total cost

The principle of value for money does not necessarily mean selecting the lowest price, but rather the best possible outcome for the total cost of the goods or services.

Consider:

  • purchase price based on fee rates and/or price per unit
  • total cost of the service
  • fixed or variable pricing.

Prioritising your criteria

  • a simple ranking with the most important criterion ranked first, then the remainder listed in order of decreasing importance
  • ranking the criteria and then assigning a per cent weighting to each.

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