Evaluating tenders and awarding contracts

Handbook for tHe Inter-amerIcan network on Government Procurement – 23 exAMPLeS Of brAzILIAn eCO-LAbeLS associação brasileira de Normas Técnicas http:www.abnt.org.br • The ABNT Eco-label certiies products based on their lifecycle environmental performance. • The label is granted by the Brazilian Organisation of technical Standards SustentaX http:www.selosusten tax.com.brselos.php the SustentaX label is based on the ISo 14024 and certiies that products, materials, equipment and services: • are sustainably provided; • comply with quality and safety standards; • are provided by socially and environmentally responsible suppliers.

3.5 Evaluating tenders and awarding contracts

the evaluation and award stage in- volves examining the bids proposed by the short-listed suppliers and selecting the one that ofers the best value-for-money across the product or service lifecycle. In many countries, tenders are evaluated and awarded based on the lowest price at the time of purchase. when implementing SPP however, tenders should be evaluated based on the most economically advanta- geous tender meat. the meat principle allows for these considerations of costs other than purchase price. It provides more scope for the inclusion of environmental and social criteria: • MEAT considers the full life- cycle of a product or service. this includes the full cost of acquisition including the raw materials, costs of operation, maintenance and management, and the waste and disposal costs; • MEAT allows procurers to con- sider qualitative factors if they can be assessed transparently. Many jurisdictions use scorecards and matrixes’ to determine the best value-for-money amongst the shortlisted bids. when implement- ing SPP, it is important to allocate a suiciently signiicant score to environmental and social perfor- mance, to signal to the market the demand for sustainable goods and services is sincere and long-term. only then will environmental and social performance become main- stream business priorities. Indeed, only then will suppliers understand that they will not win tenders unless they pay due regard to environ- mental and social attributes of their products and production processes. during the early implementation of SPP, lower scores can be awarded to sustainability performance. In time, as environmental and social performance moves into ‘additional’ criteria and subsequently, into the ‘mandatory’ criteria of technical speciications, the value of the scores can increase in tandem. Example: Award criteria for the procurement of printers TENdER A TENdER B financial criterion: lowest purchasing price 50 points uSd 10,000 50 points uSd 13,000 35 points financial criterion: operating cost 10 points 4 points 8 points environmental criterion: energy eiciency 20 points 10 points 20 points environmental criterion: use of recycled paper 10 points 5 points 10 points Social criterion: 5 of employees are from vulnerable groups 10 points 0 points 10 points Total 69 points 83 points 24 – Handbook for tHe Inter-amerIcan network on Government Procurement the example on the previous page illustrates how sustainability criteria can be used to evaluate a tender for the procurement of oice printers. the highest score possible is 100 points. In this sample tender evaluation, the inancial, environmental and social criteria are given diferent evaluation weightings, based on their relative importance for the procuring au- thority. note that price only counts for 50 per cent in the evaluation, so a more costly product that scores better on the social and environmen- tal criteria can still win. this simple example shows how sustainability can be integrated into the award criteria, and how it is a relatively straightforward approach that can be attempted even before writing environmental and social technical speciications.

3.6 Contract conditions winning bidders enter into service,