Public procurement rules in the European Union require that public contracting authorities must publish all tender evaluation criteria and its weights in advance. In order to define sound weights, the authors argue that the scoring rules for all evaluation criteria must be defined beforehand. Furthermore, the authors further argue that those scoring rules should also be published, in order to provide much more relevant and meaningful information for tenderers when preparing their tenders. Based on these evidences, the Portuguese Public Contracts Code compels public contracting authorities in Portugal to publish the comprehensive tender evaluation model in advance. This paper presents the Code, outlines the feasibility of establishing such a model in advance, addresses detailed instructions on how to go about in developing and applying it, and submits that existing European provisions on public procurement could yet go further in ensuring effective transparency, competition and best value for money tenders.
The publication of all contract award evaluation criteria and in particular its weights at the beginning of public procurement procedures, as currently required by Directive 2004/18/EC, is meaningless for tenderers when preparing their tenders (as presented in Section 3).
Furthermore, as discussed in this paper, that provision implies that, in order to enable the definition of accurate weights in a meaningful and technically sound manner, the scoring rules for each one of the evaluation criteria shall be defined beforehand. In this context, it must be referred that case-law on public procurement in Portugal (and other EU member states) has long acknowledged the obligation for the definition of the scoring rules before the tenders are known (albeit without imposing the need for its publication before).
Based on the literature (Bana e Costa et al., 2002 and Bana e Costa et al., 2008; Csaba, 2006, Pictet and Bollinger, 2003, Tavares, 2008 and Dini et al., 2006), this paper has outlined the feasibility of establishing, before the actual tenders features are known, a comprehensive, clear, objective and accurate tender evaluation model consistent with the “values” and real preferences of a CA (see Section 5). This evidence along with the authors’ long and successful experience in supporting Portuguese public bodies, with the application of tender evaluation models within their procurement procedures, culminated in their contribution in the preparation of the text of the Public Contracts Code which currently regulates public procurement in Portugal. Besides the evaluation criteria and its relative weights, this Code further requires that PCAs shall publish, at the beginning of public procurement procedures, the complete tender evaluation model by which tenders must be evaluated (see Section 4).
In the same way, the UNCITRAL Model Law on Procurement of Goods, Construction and Services (www.uncitral.org) which is currently being revised will incorporate similar provisions. Likewise the literature on public procurement (Asker and Cantillon, 2008 and Asker and Cantillon, 2009) has already stressed the advantages of announcing the CAs real preferences regarding performances and trade-offs. When these are revealed to the market in advance, a tenderer is able to better define his tendering strategy by comparing his monetary cost of improving a “quality” point against its monetary value (from the CAs point of view), and therefore he can optimally allocate his budget among all aspects of the contract submitted to competition (Dini et al., 2006). Moreover, less ambiguity reduces the premium risk which comes with uncertainty, and therefore the tenders’ price. In the end, all players (PCAs and tenderers) have the opportunity to create better “value for money” from their point of view. In other words, by exploring potential synergies and joint values, both sides stand to gain through the creation of a “larger pie”.
More transparency through a “Full, Open and Truthful Exchange” of values and preferences (Raiffa et al., 2007) not only increases public accountability but also its level of interest and ensures equal opportunities to compete for, promoting an environment of genuine market competition.
The obligation for a PCA to define and publish the tender evaluation model, before the tenders are known, creates an opportunity to improve communication, awareness (know-how), and the building of consensus within the PCA organisation towards a better understanding of the contract needs, justification for the award decision and, one hopes, satisfaction with the execution. Simply stated, with a better understanding of where the PCA wishes to go, more tenderers can make better tenders to help the PCA get there. Moreover, not only tenders can be made more effective, tenderers can make it with greater economy and efficiency.
Also of relevance, tender evaluation, by the evaluation committee, can also be made with greater economy, efficiency and effectiveness, by means of the improved comparability and coherence of the tenders as well as the greater “simplicity” and easiness of evaluation. Furthermore, discretionary behaviour of the evaluation committee is duly restricted to the PCAs preferences (the actual “decision-maker”), therefore minimizing the risk of abuse. Taken as a whole, these conditions reduce the potential risk for predictable irrationality (Ariely, 2008) and litigancy with tenderers.
Finally, the advantages derived from implementing tender evaluation models such as the ones presented on this paper are not restricted neither to tender evaluation nor to public procurement, indeed, they have been applied successfully in both tenderers assessment (e.g., on restricted procedures and pre-qualification systems) and private procurement.
Acknowledgements
The authors express their appreciation to the associate editor and two anonymous referees for their thorough and insightful comments on an earlier version of this paper. The first author also would like to thank António Mateus for his assistance in writing and editing this paper.
