Evaluation Criteria

Evaluation criteria are the benchmarks against which requests for proposals (RFPs) are measured. Evaluation criteria may include mandatory items only or a combination of mandatory and point-rated items.

Mandatory evaluation criteria identify the minimum requirements that are essential to the successful completion of work. These requirements are evaluated on a pass/fail basis. Bids that fail to meet the requirements are given no further consideration. Mandatory evaluation criteria must be designed so that a "meets" or "does not meet" response is easy to determine.

Point-rated evaluation criteria are used to determine the relative technical merit of each proposal and the best overall value to the Crown. Point-rated criteria identify value-added factors and provide a means to assess and distinguish one proposal from another. It is best to design a clear marking scale, such as "no demonstration – 5 points," "some demonstration – 10 points" or "full demonstration – 15 points" of the requirement with an associated score assigned to each mark equivalent.

For point-rated criteria, a specific pass mark can be set in order for a bid to be considered responsive. For example, if the point-rated criteria clearly demonstrate how effectively or efficiently a supplier can meet the project's requirements, it may be useful to consider a minimum pass rate of 70%, below which a bid is considered non‑responsive.

Future releases of the Statement of Work Builder will include sample evaluation criteria.

Evaluating the Bids

Technical proposals are evaluated by the project authority. The project authority should create a team of at least three people who understand the requirements and can evaluate the bids. To ensure the timely evaluation of project bids, the expected time and level of effort for the evaluation committee should be established and committed as soon as the bid closing date is known.

Committee members should work individually to evaluate the bids. Following the independent assessments, the evaluation committee should meet to agree on whether the suppliers meet the mandatory requirements and what scores will be assigned for the point-rated criteria.

Occasionally, a bid will fail to meet the mandatory criteria. In this situation, the evaluation committee needs to clearly document the reason for this failure. As this is generally the least time-consuming part of the evaluation, the process will be more efficient when all requirements are deemed mandatory.

Sometimes, the mandatory criteria may be so specific that only one or two suppliers are capable of meeting them. In this situation, selecting the winning bidder is based on the lowest price.

Appropriate documentation should be kept on file to support the evaluation committee's final scores. It should contain the list of bidders and the agreed-upon scores for each point-rated criterion. It should also indicate which parts of the proposals were considered in arriving at the final score. Finally, as evidence of their agreement, this document should be signed by all committee members.

Basis of Selection

Project authorities can choose one of four methods for selecting the winning bidder:

  1. Lowest evaluated price– Mandatory requirements only

    For situations where the mandatory requirements account for the entire scope of a project, bids are assessed against the mandatory criteria only, and compliant bids are then chosen against price. No point-rated criteria are used.

  2. Lowest evaluated price– Mandatory requirements and point-rated criteria

    Bids are first evaluated against the mandatory requirements; bids meeting the mandatory requirements are then assessed against the point-rated criteria. A minimum pass score is generally set for the point-rated criteria. Among those bids meeting the mandatory criteria and the minimum score for the point-rated criteria, the bid with the lowest price is selected.

  3. Lowest price per point

    Equal weighting is given to point-rated criteria and bid price. The bid with the lowest ratio of price to points is selected.

  4. Combination of technical merit and price

    Both point-rated criteria and price are incorporated into the evaluation, but one is given more weight. For example, for a project that requires specialized technical knowledge, the point-rated criteria may account for 80% of the bid evaluation, and the bid price, 20%.

Basis of Payment

Project authorities can choose one of three choices for the basis of payment:

  1. Firm price

    Under this arrangement, a price is not subject to adjustment; it is agreed upon in the contract. A firm price gives a profit incentive to the contractor for cost control because the contractor assumes full responsibility for all costs under or over the firm price. In addition, a firm price places a minimal administrative burden on both contracting parties.

    A firm price should be used where:

    • the statement of work is well defined and the risk in performing the work can be adequately estimated;
    • there is the greatest profit incentive for the contractor; and
    • there is a definite basis for acceptance or rejection of the work.

    Risk can arise when a requirement is not clearly defined. In this situation, misunderstanding between the project authority and the supplier about the level of effort may result in the firm price being lower than the actual cost. Contract amendments to incorporate follow-up work or design changes could then alter the overall cost of the project.

  2. Ceiling price

    A ceiling price is a maximum cost set by the supplier to limit the total value of the contract. The initial cost of the supplier's services may be significantly lower than the ceiling price, but using this basis of payment allows for flexibility if the scope of the project is expanded and a higher level of effort from the supplier is required.

  3. Subject to limitation of expenditure

    This is the most commonly used basis of payment. Though a ceiling price is a maximum price determined by the supplier, a limitation of expenditure is a maximum price established by the project authority. Like a ceiling price, a limitation of expenditure also allows for some flexibility when the scope of a project is not well defined, but the total cost of the project is better controlled by the project authority.

For the basis of payment, it is also important to consider the following:

Travel and living expenses – If travel and living costs are to be assumed by the project authority, the terms and conditions for the payment of those expenses should be specified. Travel and living expenses are subject to Treasury Board rates and conditions.

Overtime work – Generally, overtime is not paid by the project authority. If it is permitted, the terms and conditions for overtime work should be specified.

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: