9.4  Qualitative and broader value for money considerations

Assessing the private bids against the PSC provides a quantitative answer to the value for money question. However a complete value for money assessment requires consideration of qualitative factors along with the quantitative assessment. Therefore, identifying the best outcome requires a flexible valuation process and, therefore, the consideration of the qualitative factors associated with the bidders' Proposals that have not been explicitly valued. Figure 9-1 shows how this process should proceed.

Figure 9-1  Evaluating bids: a fully informed process

These two tests can be considered concurrently, although the initial quantitative assessment should generally be performed first. The complete evaluation process needs to be completed during the bidding process and project finalisation review stages outlined in Section 9.

Qualitative factors are particularly important where the lowest private bids are close to the PSC. However, this is usually resolved through a Best and Final Offer (BAFO) process.

Where value for money decisions reflect the consideration of qualitative factors, these must be fully documented to leave a verifiable decision trail which can be used by parties involved in the decision-making process. To this end, it is important that the procurement team constructs a list of all qualitative factors at an early stage. This may be developed in conjunction with the PSC, to identify costs that could not be meaningfully quantified in the PSC. (For further discussion on bid evaluation and the value for money assessment, see relevant chapters of the Practitioners' Guide.)

As discussed in the Practitioners' Guide, consideration of these factors should take account of whether the costs and risks apply only to the particular project or whether they should more appropriately be accounted for against projects generally.