Tenders should be evaluated on the basis of the price or cost using a cost-effectiveness approach such as lifecycle costing.
Where contracting authorities assess costs using a life-cycle costing approach, they shall indicate in the procurement documents:
- the data to be provided by the tenderers, and
- the method which the contracting authority will use to determine the life-cycle costs on the basis of those data.
Lifecycle costing can include costs imputed to environmental externalities linked to the product, service or works during its lifecycle, provided their monetary value can be determined and verified. The method used for the assessment of costs imputed to environmental externalities shall fulfil all of the following conditions:
- it is based on objectively verifiable and non-discriminatory criteria and, in particular, where it has not been established for repeated or continuous application, it shall not unduly favour or disadvantage certain suppliers;
- It is accessible to all interested parties;
The data required can be provided with reasonable effort by normally diligent suppliers, including suppliers from third countries part to the Government Procurement Agreement or other internal agreements by which the UK is bound.