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Tender evaluation and award methodologies in public procurement
Södertörn University, Sweden.ORCID iD: 0000-0001-5026-9479
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.ORCID iD: 0000-0001-6094-9099
2011 (English)Report (Other academic)
Abstract [en]

The EU procurement directives stipulate that public contracts are awarded to the lowest bidder or to the bidder with the economically most advantageous offer; the latter requiring that a scoring rule must be specified. We provide a simple theoretical framework for tender evaluation and discuss the pros and cons of common scoring rules, e.g., highest quality (beauty contest) and price-and-quality-based evaluation. Some descriptive facts are presented for a sample of Swedish public procurements. We argue that the most common method, price-to-quality scoring, is flawed for several reasons. It is non-transparent, making accurate representation of the procurer’s preferences difficult. It is often open to strategic manipulation, due to dependence on irrelevant alternatives, and it is unreasonably non-linear in bid prices. We prefer quality-to-price scoring, where money values are assigned to different quality levels. When the costs of quality are relatively well-known, however, lowest price is the preferable award criteria.

Place, publisher, year, edition, pages
Umeå: Umeå University, 2011. , p. 36
Series
Umeå Economic Studies, ISSN 1403-4824 ; 821
Keywords [en]
Public Contracts, Public Procurement, Scoring Rules, Quality
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-219654OAI: oai:DiVA.org:umu-219654DiVA, id: diva2:1828784
Available from: 2024-01-17 Created: 2024-01-17 Last updated: 2024-01-18Bibliographically approved

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Bergman, MatsLundberg, Sofia

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf