3. The stage after selecting the preferred bidder covers the period running up to financial close and contract signature. This stage, which can be relatively lengthy (4 - 12 months), is used to finalise the detailed drafting of the contract schedules that specify the operation of the service and define the nature of the asset proposed in the preferred bid. Also, if the bidder is proposing to obtain third party finance it is at this stage that the detailed work is done to close the bankability of the deal - a process known as "due diligence". It should be realised however that this stage is not the time for substantive negotiations over the requirement, commercial terms, price or any other material issues. It is therefore important that the project team should not down-select to the preferred bidder if it can be anticipated that :
• an adjustment to the current position on risk transfer is required;
• a price reassessment is likely;
• there is a need to change any of the key contract terms.
4. If it is envisaged that significant changes in any of these respects is likely to occur, or that a change is needed to the proposal on the table to make the deal acceptable to the Authority, then there is a clear indication that premature selection of the preferred bidder is being proposed. This may involve a breach of EC procurement rules as these lay down the criteria for contract award. Should the selection of the preferred bidder occur before the proposal is sufficiently mature and clear then there is clearly a danger that further detailed consideration of these issues may change the basis upon which the bid was originally selected and/or give the preferred bidder an opportunity to make changes not afforded to other bidders The EC procurement rules impose the following as the criteria for contract award:
• the lowest price, or;
• the offer which is the most economically advantageous.
5. For the majority of MOD projects the latter criterion applies, in which case the MOD may use criteria, which is important to the particular project, such as: the period for completion or delivery, quality, aesthetic and functional characteristics, technical merit, after sales service, technical assistance, price and the 8 "pre-requisites" referred to in Paragraph 8 below for contract award. It is important that the contract notice or contract documentation clearly sets out the evaluation criteria and their relative importance to the same level of detail as will be utilised by the evaluation team. If the MOD fails to state the criteria or such criteria is not sufficiently clear it will only be able to award the contract on the basis of lowest price.