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Basis for Contract Award
Under EU procurement law, there are two bases for the award of a contract which is subject to the Public Contracts Regulations 2006 (“the Regulations”). Contracts can be awarded on the basis of the contract which:
• is the most economically advantageous from the point of view of the Contracting Authority (“the Authority”)
• offers the lowest price Only the most straightforward of contracts will be awarded on the basis of lowest price. For the most part, Authorities elect to use the most economically advantageous tender (“MEAT”) as the basis for contract award because it allows them to take into account factors (for example, quality, environmental characteristics, etc) other than price. Note that where an Authority is using the Competitive Dialogue procedure, lowest price is not available; the contract can only be awarded on the basis of MEAT.
In order to enable an Authority to determine what constitutes the most economically advantageous tender, the Regulations permit the use of criteria such as “quality, price, technical merit, aesthetic and functional characteristics, environmental characteristics, running costs, cost effectiveness, after sales service, technical assistance, delivery date and delivery period and period of completion”. This is not an exhaustive list. However, the Regulations do make clear that any criteria used must be linked to the subject matter of the contract so Authorities do not have an entirely free hand when choosing criteria.
Weighting of Criteria
An Authority must also weight each criterion and set out the weightings in the OJEU notice or in the contract documents. In the case of the Competitive Dialogue procedure, the weightings should be set out in the OJEU notice or in the Descriptive Document. The weightings may be given by means of a range with the Authority specifying the minimum and maximum weighting. Where it is not objectively possible to weight the criteria, an Authority must set out the criteria in descending order of importance.
Sub-criteria are not explicitly dealt with in the Regulations. However, Authorities often use sub-criteria and sub-weightings when evaluating tenders, particularly where there are only two or three main criteria with significant percentage weightings (eg quality (60%) and price (40%)). Care needs to be taken when using sub-criteria and sub-weightings, and, importantly, there is case law to the effect that these should be disclosed to bidders. The reason for this is that it facilitates transparency and enables bidders to prepare their tenders in the full knowledge of what will be taken into account by the Authority in identifying the most economically advantageous offer.