By Dr Carlos Bugeja – Partner
Governments often need to purchase services and products from the private market. This cannot be done freely and haphazardly – there are rules that ensure transparency and cost-effective purchasing. Many of these rules are not a local creation, but are transposed from EU rules and monitored by the EU.
One of the ways the governments evaluates tenders is through the criterion of the best price-quality ratio, better known as BPQR.
This criterion, replacing the earlier MEAT (most economically advantageous tender) ensures that the contracting authority reach a harmonious balance between quality and price. The idea is that when a purchasing need arises, those entrusted with adjudicating offers (‘tenders’) have at their disposal a proper standard and system to be used in order to fairly assess each offer and decide in a transparent manner.
As well explained in the PUBLIC PROCUREMENT GUIDANCE FOR PRACTITIONERS (February 2018), a document issued by the European Commission:
“The purpose of the best price-quality ratio is to identify the tender that offers the best value for money. It must be assessed on the basis of criteria linked to the subject matter of the public contract in question. These criteria may include qualitative, environmental and/or social aspects.”
It was stated in the Procurement Policy Note #25 Award criteria with respect to Security, Cleaning, Clerical and Care Worker Services Contracts (Date issued: 25th April 2016), that:
“Best Price Quality Ratio (BPQR): this is the award criteria most commonly known, to date, as the Most Economically Advantageous Tender (MEAT). Through these criteria, the Contract Authority may establish the best value for money by optimizing a combination between the various cost-related and non-cost related criteria that together meet the Contracting Authority’s requirements.”
The purpose of the BPQR is to identify the tender that offers best value-for money. The concept of value-for-money recognises that goods, works and services are not homogeneous and that they differ in quality, durability, longevity, availability and other terms of sale. The point of seeking value-for-money is that Contracting Authorities should aim to procure the optimum combination of features that satisfy their needs. Some tenders may given a greater weighting to price, and others may give a larger importance to quality. So it is not rare that a tender is adjudicated on the basis of a point system based on a number of criteria (or check marks), which are then weighted according to the percentages established from the very beginning. For instance, the points awarded for the price would be then given a 60% weighting whereas the technical offer would be weighted down to 40%. This is done for all offers, and automatically, a ‘recommended bidder’ emerges.
There are many ways how to operate a BPQR Tender, and this is one example for illustration purposes where the technical score has been given a weighting of 40% and the price offered has being given a 60% weighting.
In this example, one can see that despite the fact that the tender would have given prioritization to the price (through its higher weighting), Tenderer A’s offer was not sufficiently cheaper to justify the lower quality offered. Despite Tenderer B having a slightly higher price, he still had enough superior quality to edge Tenderer A’s cheaper offer.
This system is considered better than the ‘lowest-price’ criterion since ideally, a government contract would not be a mere reverse auction with no regard for the quality of the goods or services. That would cause ‘a race to the bottom’, and inevitably, more cost in the long run. Conversely, adjudication on the sole basis of quality without regard to the price can be a costly affair, as well as an avenue for abuse.
The Best Price-Quality Ratio is a happy medium which guarantees objectivity and transparency.
The Public Contracts Review Board (PCRB) has said time and time again that (see Case 1390 – ROCA/A/T5/2019) “…the BPQR system of assessing a particular offer is the most objective method of filtering offers and arrives at the most advantageous one. It added in Case 1290 – CT2091/18 “…the “Best Price Quality Ratio” is the most objective form of assessment of an offer, in that, it suppresses the incidence of subjectivity, so that each offer is assessed on the quality of service or works being proposed by the Bidder, apart from the fact that each evaluator is individually allocating marks on established criteria, so that the median result is as fair and objective, as one would expect.”
Truth be told, contracting authority are still today given ample discretion in choosing which criterion to adopt in tender documents. And while BPQR is encouraged, so far there are no rules obliging a contracting authority to always choose this criterion over the others. But many are adopting the sensible stance to prioritise transparency and objectivity above everything else, and most tenders are today using the BPQR criterion.
Disclaimer: This article is not to be considered as legal advice, and is not to be acted on as such. Should you require further information or legal assistance, please do not hesitate to contact us on firstname.lastname@example.org.‘