1. What most economically advantageous means
Three approaches fall within the concept, and they are used very unevenly. Price remains the most common.
| Approach | Content | Use in construction |
|---|---|---|
| Price only | simplest | the most common |
| Price with quality criteria | weighted | moderate |
| Life cycle cost | includes operating and maintenance cost | most apt, least used |
The third is the most apt in construction and the least used, because it requires more preparation. The reason it is apt is simple: the cost of a building does not end at the occupancy permit, which is the subject of a separate guide on construction costs.
2. The new reverse procedure option
September adds one voluntary option.
The amendments create a new, voluntary option for an authority to run what is termed a full reverse procedure in order to identify the most economically advantageous tender. Whether to use it is the authority's call.
A reverse procedure means, broadly, that tenders are evaluated before tenderers' qualification and exclusion grounds are checked. The advantage is in time: only the tenderer whose tender proves best is checked.
Voluntary means the authority decides, and practice in using it will develop after entry into force. Its precise content, conditions and limits must be checked against the adopted text of the law, since the sources describe the option in general terms.
3. Why price alone is risky in construction
Four reasons, the last of which is the longest running and the least often taken into account. It concerns maintenance cost.
The quality of construction work is not measurable at the moment of tender, unlike in a supplies procurement where the product exists. Quality only emerges during the works.
A low price may conceal missing work, which is covered in the article on abnormally low tenders. The gap surfaces later as variations.
Construction time and site organisation affect the client's costs without appearing in the tender price. Delay carries its own cost.
Later maintenance cost depends on choices made, and price competition pushes those choices towards the cheapest. The cheaper solution costs more in use.
Using price alone is nevertheless legitimate where the technical specification is precise enough for quality to be secured by it. The problem is not the price criterion but a vague specification combined with a price criterion.
4. How to set criteria
Four rules, where criteria other than price are used. They keep the evaluation transparent.
| Rule | Why | Difficulty in construction |
|---|---|---|
| Criteria linked to the subject matter | statutory requirement | easy |
| Criteria measurable, not evaluative | to avoid challenge | hardest |
| Weightings known in advance in the documents | transparency | easy |
| Evaluation capable of being reasoned afterwards | reviewability | moderate |
The second rule is hardest in construction, because quality is difficult to measure before the work is done. The practical answer is to measure what is measurable: the proposed programme, the experience of the team, or technical performance figures, rather than quality in general.
5. A simpler alternative to complex criteria
One route is used too little: put quality into the technical specification rather than into the award criteria. The requirement then becomes a condition of compliance.
That way every tenderer offers the same quality and competes on price. It requires a precise specification, which is the authority's work, and that work has to be done in any case.
The worst combination is the opposite: a vague specification together with quality criteria produces the poorest outcome, because tenders are not comparable and the evaluation is challengeable. A vagueness in the specification is not cured by an award criterion; it merely moves the problem to a later and more contestable stage.
In summary, and four practical rules
The most economically advantageous tender may be identified by price alone, by price with quality criteria, or by life cycle cost, the last being the most apt in construction and the least used. Price alone is legitimate where the technical specification secures quality; what is risky is a vague specification, whatever the criterion. September adds a voluntary full reverse procedure, in which tenders are evaluated before the tenderer is checked.
Four rules: consider life cycle cost where the building has a long service life. Use measurable criteria rather than a general quality assessment. Put quality into the specification where possible, not into the criteria. Watch how the reverse procedure comes to be used after September.
This article serves professional orientation at the date of checking. It does not replace the Public Procurement Act or information published by the Ministry of Finance.