Bid Evaluation Criteria

Bid evaluation criteria are the factors or specific areas a buyer uses to assess whether a supplier can provide the required goods, services or works. They also measure the value, quality or cost that comes with the offer. NATO describes them as measurable and verifiable components relating to potential suppliers and to the goods, services or works being bought, and as part of the requirement specification. See the NATO procurement manual.

The criteria are defined in the solicitation documents, so every bidder sees the same yardstick before preparing a response. Buyers use them in competitive procurement to decide whether bids are compliant and which offer gives the best result for the buying organization. The criteria say what is assessed. A separate evaluation method says how bids are assessed and selected.

Evaluation criteria and the method of selection

NATO guidance keeps the criteria distinct from the method. The criteria identify the areas of assessment, while the method explains how the assessment leads to an award. NATO lists several award approaches in its procurement procedure:

• Lowest price technically compliant: the award goes to the lowest-priced bid that satisfies all mandatory requirements.
• Lowest lifecycle cost: the award is based on cost across the life of the goods or services.
• Best price-quality ratio: a weighted assessment of price and non-price factors.
• Best value: the overall balance of technical merit, price, quality, lifecycle cost or other stated factors.

Mandatory and point-rated criteria in federal tenders

CanadaBuys explains that federal bids are normally assessed on technical merit and overall best value, following the selection method in the tender notice. The evaluation team must assess the technical bid against the evaluation criteria stated in that notice. The CanadaBuys guide to how bids are evaluated and selected identifies three approaches to technical evaluation:

• mandatory technical criteria only
• point-rated technical criteria only
• a combination of mandatory and point-rated criteria

Mandatory criteria are requirements a bid must satisfy to stay responsive. PSPC supplier guidance states that bidders must fulfill all mandatory criteria to move forward in the evaluation. Point-rated criteria are scored under a stated rating system, which lets the buyer rank bids by relative merit. PSPC also tells suppliers to review the evaluation criteria and the basis of selection when preparing a bid, and notes that a compliant bid does not by itself guarantee a contract. See the PSPC seminar notes on bidding opportunities.

In best-value procurements, Canadian public buyers may evaluate the technical aspects of otherwise compliant bids with a point system in addition to bid price, as described by Indigenous Services Canada.

Criteria in planning records and procurement oversight

Evaluation criteria are set before bids arrive. Government acquisition records list the development of the bid evaluation criteria, scoring grid, evaluation plan, scoring sheets and technical evaluation report as part of the work. The Library and Archives Canada acquisition services record shows where these documents sit in departmental procurement files.

The Office of the Procurement Ombudsman treats the development of mandatory and point-rated criteria, and the selection method, as elements of procurement review. It also describes the requirement to evaluate bids consistently with the planned approach. See the Procurement Ombudsman's 2023 review.

What bid evaluation criteria mean for a supplier

The criteria in the solicitation decide whether a bid is considered and how it is scored, so they should shape the response from the start. A supplier should:

• Read the evaluation criteria and the basis of selection in the tender notice.
• Demonstrate compliance with every mandatory criterion.
• Provide the evidence and explanations requested for each point-rated criterion.
• Follow the required response format and place information in the specified sections.
• Submit pricing and technical information as instructed.
• Avoid assuming that a technically compliant bid will win, because the award may depend on relative technical scores, price, weighted factors or another stated selection method.