# Criteria to assess Tenders and Quotations – Use of Weighted points system

23/03/2024

The weighted points system is a sophisticated and fair method for evaluating tenders and quotations, ensuring that decisions are based not only on price but on a comprehensive assessment of several critical factors. This system assigns specific weights to each criterion based on its importance to the project’s success.

• Step 1: Identify Evaluation Criteria

First, determine the criteria that are crucial for the project’s success. These might include price, quality, delivery time, service support, technical capabilities, sustainability practices, and innovation. The selection of criteria should align with the project’s objectives and organizational values.

• Step 2: Assign Weights to Each Criterion

Each criterion is assigned a weight reflecting its importance relative to the others. The weights are typically expressed as percentages, and the total of all weights should equal 100%. For instance, price might be assigned 30%, quality 25%, delivery time 20%, and so on.

• Step 3: Score Each Tender or Quotation

Evaluate each tender or quotation against the defined criteria. Assign scores to each based on how well they meet each criterion. The scoring scale can be 1 to 10, 1 to 5, or any other consistent scale that suits the organization’s assessment process.

• Step 4: Calculate Weighted Scores

Multiply the score received by each tender or quotation for each criterion by the weight assigned to that criterion. This gives you the weighted score for each criterion for each tender or quotation.

• Step 5: Sum the Weighted Scores

Add up the weighted scores for each tender or quotation across all criteria. This total weighted score provides a numerical value reflecting the overall suitability of each tender or quotation based on the predefined weights and scores.

• Step 6: Make the Decision

The tender or quotation with the highest total weighted score is generally considered the most favorable option. However, decision-makers should also consider any qualitative factors that might not be fully captured by the scoring system before making a final decision.

Example

Assume you have three criteria: Price (weight 50%), Quality (weight 30%), and Delivery Time (weight 20%). A tender scores 8 on Price, 7 on Quality, and 9 on Delivery Time. The weighted score calculation would be as follows:

• Price: 8 (score) * 0.5 (weight) = 4.0
• Quality: 7 (score) * 0.3 (weight) = 2.1
• Delivery Time: 9 (score) * 0.2 (weight) = 1.8
• Total weighted score = 4.0 + 2.1 + 1.8 = 7.9

By calculating the total weighted score for each tender or quotation in the same way, you can compare them objectively based on the predefined criteria and weights.

• Multi-faceted Evaluation:

It allows for a comprehensive assessment of tenders or quotations by considering multiple evaluation criteria beyond just price. This ensures a more balanced and thorough decision-making process.

• Objectivity and Fairness:

By assigning specific weights to each criterion based on its importance, the system reduces subjectivity in the evaluation process. This helps ensure that all vendors are assessed fairly and consistently.

• Flexibility:

The system is adaptable to various procurement scenarios by allowing the weights and criteria to be tailored to the specific needs and priorities of the project or organization.

• Transparency:

The criteria and their respective weights are defined in advance and made known to all stakeholders, including vendors. This transparency helps build trust in the procurement process and can reduce disputes or disagreements about the outcome.

• Decision-making Support:

It provides a clear, quantifiable basis for comparison between different tenders or quotations, facilitating easier decision-making. Decision-makers can justify their choices with concrete, numerical data.

• Prioritization of Strategic Objectives:

By assigning higher weights to the criteria that align closely with the organization’s strategic objectives or the project’s critical success factors, the system ensures that selections support overarching goals.

• Encourages Comprehensive Vendor Efforts:

Knowing that the selection process considers various factors beyond price encourages vendors to improve across all areas—quality, innovation, sustainability, etc.—to score higher overall.

• Enhanced Risk Management:

By including criteria such as vendor reliability, financial stability, and risk mitigation capabilities in the evaluation, the system helps identify and select vendors that pose the lowest risk to the project or organization.

• Improved Vendor Performance and Relationship:

The detailed feedback that can be provided based on the weighted evaluation encourages vendors to understand where they stand and how they can improve, potentially leading to better performance and stronger vendor-buyer relationships over time.

• Evidence-Based Procurement:

The methodical nature of the weighted points system ensures that procurement decisions are evidence-based, reducing the likelihood of impulsive or poorly thought-out choices.