The evaluation process and criteria should be transparent. Transparency is achieved by supplying as much information about the process as possible, and by drawing up procedures that explicitly ensure that all parties are treated equally. Nevertheless, confidentiality during a bid process is also needed so as not to compromise the legitimate commercial interests of the parties.
Bids are typically evaluated in two broad categories: technical and financial. The relative importance of each should reflect the importance in achieving the specified objectives. The project objectives, project design, information in the bid documents, and evaluation criteria should also be consistent.
A first decision point is whether the technical evaluation will be on a pass-fail basis (with the deciding evaluation reserved for the financial) or whether both the technical and financial information will be evaluated and assigned weighted scores:
• Decision 1: Weighted technical and financial or pass/fail technical?
- If weighted, what will the weights be?
- If pass/fail, what will the minimum qualifying technical score be?
• Decision 2: How to divide points between technical categories and subcategories.
The technical and financial responses are presented in separate envelopes to ensure a discrete evaluation of each component. There are four variations on how the technical response might be presented
• Option 1: Contains legal certification and bid bond. These are confirmed, financial envelopes are opened, and contract awarded to lowest price bid.
• Option 2: Contains technical and financial information used to substitute prequalification. Financial envelopes of surviving bidders are opened, and contract awarded to lowest price bid.
• Option 3: Contains technical proposal, which is scored as pass or fail. Passing bidders' financial envelopes are opened and contract awarded to lowest price bid.
• Option 4: Contains technical proposal, which is numerically scored. Contract awarded to best weighted average technical/financial score.
Likewise, there are four typical variations on the possible presentation of the financial response:
• Option 1: Bids based on price of shares or assets being sold;
• Option 2: Bids based on up-front payment combined with future concession fees;
• Option 3: Bids based on future tariff; and
• Option 4: Bids are for service fee-with or without incentive component.