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Procurement Perspectives: Assessment criteria a problem area for capital projects

0 32 Government

by Stephen Bauld

On major capital projects one of the problem areas in evaluation is the assessment of criteria. The specifications and evaluation criteria in any RFP should relate directly and significantly to the functional needs that a given contract is intended to address.
Procurement Perspectives: Assessment criteria a problem area for capital projects

However, even when all of the assessment criteria are pertinent to the procurement decision, the problem of too many assessment criteria may arise. A major capital project will often have so many different purposes and requirements that the list of specifications and minimum qualifications can be extreme.

The mere fact that a particular specification is mandatory does not mean that it requires a numerical weighting in the final assessment decision. On the contrary, mandatory criteria generally require no weighting. If they are not satisfied, then the bid is non-compliant.

Another method of reducing the number of assessment criteria to a manageable level is to group related criteria together and then give them a collective score based on the overall extent to which they address the municipality's need.

Some care is needed in doing this, however, in order to make sure that the process of evaluation conforms to the Ron Engineering line of case law, requiring that public tenders and RFPs be conducted in a manner that is fair.

Either the criteria upon which they are being assessed must be clear to the proponents, or it must be made very clear that the municipality is reserving a great deal of discretion as to the manner in which it carries out the evaluation.

The possibility of reserving discretion brings me to another problem area with respect to the evaluation, specifically that the criteria of assessment are so subjective that it is difficult to reconcile or justify the approach that evaluators have taken towards scoring.

Since the decision of the Supreme Court of Canada in MJB Enterprises v. Defense Construction (1951) Ltd., it has been that a purchasing authority may contract entirely around the duty of fairness by employing a properly worded contract. The basic rule is that reserved privileges and discretions must be clearly set out. Provided that they are stated in unambiguous terms, the court will give effect to them. Thus, in principle, it is possible to reserve virtually complete discretion over evaluation, if the municipality is of a mind to do so.

Nevertheless, although such broad discretion may be legally possible, there are a number of reasons why it may be ill-advised from a practical perspective. Possible problems include:

the reservation of too much discretion may prompt qualified bidders not to submit a proposal;

allowing the evaluators such a broad discretion may give them no guidance as to the priorities of the municipality, with the result that the purchase decision made may not reflect a true municipal need; and

even in the best of all possible worlds, over discretion can create a corporate government risk.

Given these concerns, it is clear that one needs to build a considerable measure of corporate control into the procurement process whenever the municipality itself wishes to retain overall discretion.

In other words, where discretion is great, the final purchase decision should require high-level approval.

As we are all aware these days, most evaluations of RFPs are carried out by committee, the members of which bring to the process a diversity of experience. The ordering (client) department will be represented as will the purchasing department; in some cases end users groups will also be represented and legal counsel may even be present to advise on possible legal issues or to interpret the meaning of documents.

Where the evaluators represent a cross-section of training and concern, it will often be discovered that at least some of them are not properly qualified to carry out an assessment.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com.

Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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