Selection criteria are focused on "the bidder" and award criteria are focused on "the bid”.

Selection criteria assess things like the bidders economic standing or technical qualifications whereas award criteria are concerned with how they will deliver the contract.

You should maintain a clear distinction between both throughout the procurement process and you should note that you cannot use the same criteria at both selection and award stage.

You should assess the financial standing of bidders to ensure that they are financially stable enough to carry out the contract. In order to assess this you may ask for information such as financial ratios or turnover information from the bidders. 

In all cases, care should be taken not to set minimum standards that are too high and/or which might exclude capable suppliers, especially SMEs and newly formed companies. 

For lower-risk procurement exercises (for example: where there are numerous suppliers capable of carrying out the contract; no time constraints; payment is only to be made after the work completed) you should consider whether it is necessary to set any selection criteria relating to economic and financial standing

Turnover

The Procurement (Scotland) Regulations 2015 state that you must not ask bidders to have a minimum turnover which exceeds twice the estimated contract value. This helps to remove obstacles to SME involvement in public procurement.

However, you can ask in certain duly justified circumstances for a higher turnover such as high-risk contracts or where the timely and correct performance of the contract is crucial.

Accounts

You may require bidders to provide annual account information.  For example showing the ratio between assets and liabilities. The PCS SPD module includes a list of commonly used financial ratios for you to pick from.

You can only exclude bidders on the basis of ratios identified in the Contract Notice so you should ensure that they are accurate and relevant.

You should also consider that not all bidders have an audited set of accounts.  As a result you must determine, on a case by case basis, what is essential information.  This should be specified in the contract notice.

Insurance Levels

It might be appropriate for bidders to have an appropriate level of insurance in place to carry out the contract.  This must be relevant and proportionate to the value of the contract and the level of risk.

The bidder is not required to have the relevant insurance in place at the time of bidding.  They only need to confirm that they would be willing to obtain the required insurance level(s) if successful in winning the contract.  You must check that any such commitment has been put in place at the Contract Award stage.

You should consider what is required on a case-by-case basis. You must specify what insurance level(s) are required in the contract notice or in the PCS SPD module.

Note - it is a legal requirement that all companies (excluding sole traders) hold Employer’s (Compulsory) Liability Insurance of £5M as a minimum

To assess the bidders capability you can ask them to provide relevant examples of previous work to demonstrate that they have sufficient  experience to deliver the contract. For goods and services, the examples provided by bidders must only be from the previous three years.  The examples requested should be relevant and proportionate to the procurement exercise.

You should be careful when creating the technical and professional ability minimum requirements to not exclude bidders who can demonstrate  they have the capacity and capability to deliver the contract, but may not have delivered exactly the same goods or services previously. This will ensure opportunities are provided to bidders to access new markets or provide innovative solutions, no matter their size or status.

Remember that bidders do not need to submit examples from their existing organisation to meet the selection criteria.  They can submit relevant examples which they worked on in previous employment to demonstrate their previous experience.  This is particularly helpful to new businesses. 

It is also acceptable for bidders to rely on other parties for certain parts of the selection criteria, for example, they may rely on a sub-contractor for experience in a certain area.

Qualifications

Depending on the requirement, it can be more appropriate to evaluate qualifications as part of the award criteria.

If you do decide to evaluate qualifications as part of the selection stage, you should ensure the required qualifications are set upfront and clearly stated in the Contract Notice (or PCS SPD module).

Use of References 

Buyers may request references from bidders in order to review previous experience. If the bidder is unable to provide the reference required, it may provide other evidence which you consider appropriate.

Depending on the nature of the contract, you may require the bidder to confirm they comply with certain quality management standards or hold specific certificates.

You should ensure that any minimum standards are proportionate to the contract and are not set too high. 

For example, if you require BS EN ISO 9001 you should accept any accredited independent third party certificate of compliance in accordance with the relevant requirements.  You should also accept other examples of equivalent measures provided by the bidder which proves the proposed measures comply with the required standards e.g. documented quality management policies and procedures.

Health and Safety Legislation

The degree to which health and safety requirements are required will vary according to the procurement exercise.  Any measure you take must be relevant, proportionate (not set too high), and be stated in the Contract Notice.  You must not select any bidders if they do not meet the stated health and safety legislation minimum requirements.

You should put in place on going monitoring procedures throughout the duration of the contracts to ensure compliance with health and safety requirements.  Within the SPD, this should be specified as part of the quality management section.

Further help in setting these standards can be found in the Standardised Statements.

Depending on the nature of the contract, you may require the bidder to confirm that they comply with certain environmental management legislation.

You should ensure that any minimum standards are proportionate to the contract and are not overly onerous.

For example if you require BS EN ISO 14001 you should accept any accredited independent third party certificate of compliance in accordance with the relevant requirements.  You should also accept other examples of equivalent measures provided by the bidder which proves the proposed measures comply with the required standards e.g. documented environmental management policies and procedures.

Further help in setting these standards can be found in the Standardised Statements.

Organisations must publish details of the evaluation criteria to be used to either:

• select the bidders to be invited to bid for the contract or
• identify the supplier to whom the contract will be awarded.

It is best practice that evaluation criteria and respective weightings for both selection and award stages are agreed by the User Intelligence Group (UIG) before the Contract Notice is published and any documentation issued.

The evaluation criteria will comprise of (depending upon the stage of the competition):

• The selection or award criteria;
• Sub-criteria;
• Weightings;
• Minimum standards;
• Pass marks (if any) etc.

If there is any doubt as to the level of detail that must be disclosed/published, you should seek specialist professional procurement or legal advice and guidance.

The agreed and advertised selection and award criteria and weightings must not be changed once they have been notified to the tenderers.

Evaluation criteria should be published under II.2.9 (Information about the limits on the number of candidates to be invited) of the Contract Notice or II.2.14 (Additional Information) of the Social and other Specific Services Contract Notice (if you decide to advertise your C&SS requirements)  This allows bidders to see how their responses will be evaluated.  

If the online PCS SPD Module is used, the scoring methodology needs to be detailed in the module.  This does not need to be included in the Contract Notice.

If you are unable to publish these criteria in the Contract Notice or within the SPD Module, as an absolute minimum, you must state them in the Procurement Documents.

You must consider if bidders may use a supply chain to deliver the requirements, and if so, the Single Procurement Document (SPD) question 4C.4 and its standardised statement should be included in your selection criteria.

Adding this will require bidders to provide evidence of:

• their standard payment terms;

• their payment performance in line with those terms; and 

• an improvement plan, if necessary, detailing timely remedies to achieve good payment performance.

For examples of payment performance evidence and improvement plan guidance please reference the prompt payment page.
 

Selection criteria applied to individual procurement processes must be relevant and proportionate to the subject matter of the contract.

It is possible that selection criteria may address social issues by applying relevant criteria in respect of the technical and professional ability of those involved in the performance of the contract. For example, where high volumes of workers are involved, a public body may ask for evidence of capacity and capability to recruit and retain staff in a fair way or ask for evidence of staff development practices.

It may be more appropriate to include Fair Work practices in the award criteria.  This will encourage bidders to explain how existing or new Fair Work practices will positively impact on the way the contract is performed.

The Fair Work First in Procurement guidance will help you consider how to structure and adapt a Fair Work practices criterion to the needs of the contract.

You may choose to use the SPD for selection without amending the questions, and it is a matter of best practice to do so.

The evaluation criteria should be published under II.2.14 (Additional Information) of the Social and other Specific Services Contract Notice (if you decide to advertise your C&SS requirements) to allow bidders to clearly see how their responses will be evaluated. 

For the Restricted Procedure, the Competitive Procedure with Negotiation, Competitive Dialogue Procedure and Innovation Partnerships you may limit the number of candidates invited to participate at the tender stage, or to engage in dialogue with. This can only be done if the Contract Notice and relevant Procurement Documents specify:

• your intent to limit the number of bidders and the minimum number and (if applicable) the maximum number of bidders you intend to invite to the tender stage; and
• the objective and non-discriminatory criteria or rules to be used.

The Organisation should invite a sufficient number of bidders to generate competition.  In limiting the number of bidders who will proceed through to the tender stage, the minimum number of qualified bidders should be as follows:

• Restricted Procedure – where an above threshold advert is required, the minimum number of bidders should be five.  In other cases three or four may be regarded as sufficient;
• Competitive Procedure with Negotiation, Competitive Dialogue Procedure and Innovation Partnership procedure – the minimum number of bidders should be three.

These must be bidders who requested to participate and meet the minimum requirements set out in the Selection Criteria. However, where the number of bidders who meet the selection criteria is less than the minimum number listed above, the Organisation may continue the procedure with the lesser number or discontinue the procedure.

Where an above threshold advertisement is required (this will be for all procedures other than negotiated procedure without prior publication), Contract Notices should be used to advertise all procurement procedures. 

The PIN is published before the start of the procurement process. The PIN allows potential bidders to prepare themselves to bid in time for the contract's announcement. It can also be used by any buying organisation to reduce procurement timescales (if certain criteria can be met).

It is best practice that evaluation criteria for both selection and award stages are agreed, along with respective weightings, by the UIG before the Contract Notice is published and any documentation issued. The evaluation criteria will comprise of the selection or award criteria (depending upon the stage of the competition), sub-criteria, weightings, minimum standards, pass marks (if any) etc.

If there is any doubt as to the level of detail that must be disclosed/published, you should seek specialist professional procurement or legal advice and guidance.

The agreed and advertised selection and award criteria and weightings must not be changed once they have been notified to the tenderers.

Sub-Central Organisations must not use a PIN as a call for competition.