There will often be advantages in using Framework Contracts. Suppliers will already have been assessed for quality, service, competitiveness and financial stability, and equitable conditions of contract may also have been agreed.
All bids for Framework or other contracts must be evaluated on commercial and technical grounds and should define award criteria appropriate to the purchase. The basic criterion is:
- "lowest price"; or
- "most economically advantageous" offer (where considerations other than price also apply).
If the last criterion is adopted, it must be further defined by reference to further criteria. These criteria should refer only to relevant considerations. These may include price, service, quality of goods, running costs, technical merit, previous experience, delivery date, cost effectiveness, quality, relevant environmental considerations, aesthetic and functional characteristics (including security and control features), safety, after-sales services, technical assistance and any other relevant matters.
For simple purchases the lowest bid may be the criterion. Normally though, the supplier selected which offers the best value for money in meeting the tender requirements. Best value should be determined by reference to Whole Life Costing, in other words, taking into account all direct and indirect costs of ownership, such as:
- pre-purchase costs, including research and evaluation
- purchase costs, including installation and training
- cost/impact on the University's infrastructure
- order processing costs
- running costs, including maintenance, power and training
- health and safety requirements and
- disposal costs and/or residual value.
The model Competitive Proposal and Invitation to Tender suggest some award criteria. Do not adopt these without thought. Choose criteria which meet the particular purchasing need and will lead to selection of the most competitive offer meeting the actual business objectives. The model documentation also suggests weightings. These can help give suppliers a better idea of the business objectives (for example the relative importance of price and quality - but be careful not to weight quality in such a way that a more expensive offering is accepted than is necessary). Note especially that criteria and weightings published in invitations must be followed. Award criteria, any sub-criteria which will be used and also weightings must be included in EU Invitations to Tender.
Stockholding costs, covering finance, damage, deterioration, theft or obsolescence, may add to the purchase cost as much as 25 - 40%. Smaller and more frequent deliveries are often more cost-effective than bulk ordering, even allowing for price discounts, but it is worth noting that many consortia agreements are at fixed prices, irrespective of delivery quantity.
Processing costs are also significant, having been estimated at £70 for a complete purchase cycle. It often makes sense to consolidate requirements and place one order with one supplier for a range of products and for multiple deliveries.
Unsuccessful bidders should be notified and thanked for their participation, and where applicable advised that they will be considered for future tenders. Template letters are available from Procurement Services website. Please refer to Advertising in the Official Journal of the European Communities (OJEC) for the process for awarding EU contracts.