Cost was one of four bid evaluation criteria

2.12  Six bidders submitted initial bids in March 2000 for two deep tube contracts on the basis of a fixed Infrastructure Service Charge and target performance levels. The initial evaluation resulted in two bidders being short-listed in July 2000 for each infrastructure contract (Figure 5). In November 2000, the short-listed bidders made best and final offer submissions (BAFOs). London Underground evaluated these bids against four sets of criteria:

■  technical (including asset management and safety);

■  organisational (including impact on LUL costs);

■  legal/commercial (evaluating contract qualifications); and

■  financial (over 7½ and 30 years).

London Underground compared bid profiles against its expectations of the necessary long term spending strategy. Bidders' proposals were tested for internal consistency, informed by a simulation model developed with PA Consulting (see Appendix 2). Using the model to identify key assumptions and sensitivities led to bid evaluation adjustments, when judged that a bidder had submitted a low bid price expecting to revise its prices upwards following the first periodic review after 7½ years.

2.13  Specified qualities sought in a long term partner were: ability to deliver the required performance; asset stewardship, including evidence of safety and environmental competence; stewardship of staff transferred from LUL; acceptance of the principles of partnership; and value for money. As part of the latter, London Underground evaluated the present cost of the payment streams for each bid, and separately estimated the present value of non-cash benefits relating to performance at £2,100 million (see Part 4).