2.2.4 Define bid evaluation criteria

Either at this stage or, at the latest, at the beginning of the procurement phase, a tender evaluation committee should be established. The composition of the committee will often be prescribed by national law. The role of the evaluation committee is to oversee the procurement process and take (or recommend) key decisions, such as decisions about the shortlist and the preferred bidder. The tender evaluation committee will generally be advised and supported by experienced and specialised consultants (often the transaction team of advisers).

The EU procurement regime allows some flexibility regarding the criteria that can be used to evaluate bids and select the preferred bidder. The broad aim is to select the "most economically advantageous tender".

The choice of criteria for scoring and ranking alternative competing bids is a key decision in procuring a PPP. The objective is to tailor the PPP contract award criteria to the particular project and contract terms to achieve the best possible results (value for money).  Guidance 49

Failure to apply award criteria properly can be a source of challenge to the procurement. The Authorities should, there-fore, always take appropriate advice before the bid evaluation criteria are finalised.

As a rule, award criteria (and the weighting to be applied to each criterion) should be specified in advance. This may be problematic in the case of a competitive dialogue procedure, where detailed award criteria are rarely known in advance. In this instance, EU law allows the criteria to be listed in decreasing order of importance. In either case, the award criteria must appear in the contract notice or supporting descriptive document and may not be changed during the award procedure.

Some examples of criteria include:

•  the lowest tariffs, service fee or level of grant or subsidy;

•  the largest payments to the Authority (upfront or periodic);

•  the shortest duration of the PPP contract; and

•  the best promised performance, expressed as key objective indicators year by year.

There are a number of examples of imaginative use of award criteria to achieve particular objectives. For example, Chile uses the "least present value of revenue" criterion for toll motorways. In this case, the concession ends once the PPP Company has received cumulative revenue whose net present value equals the value it has bid. This is a way of combining a criterion based on the lowest remuneration with a mechanism for allocating traffic risk to the public sector.  Guidance 50