Guidelines for Determining the Most Economically Advantageous Tender
On March 1, 2017, the new Public Procurement law came into force. Among the various innovations and improvements, as one of the novelties is the introduction of the ‘most economically advantageous tender’, as a priority principle and its extension.
So far, the contracting authority could choose whether the procurement result would be determined by the price criterion or whether the most economically advantageous tender would be selected. Often the lowest price criterion was used as an essential criterion in public procurement, which often also meant lower quality.
The Essentials of the New Regulation
The Public Procurement Law stipulates that contracting authorities will have to award the procurement contract to the most economically advantageous tender. The aim of the new regulation is to strike a balance between price/cost criteria and quality criteria.
The quality criteria according to the new regulation are wider. They include not only technical advantages, aesthetic and functional qualities, but also social and environmental protection requirements and innovative features. Another important addition is the introduction of the life-cycle costing concept, which involves evaluating not only the cost of purchasing a product but also, for example, the cost of its use and maintenance.
The new regulation has been introduced on the basis of the European Parliament and Council Directive no. 2014/24/EU ‘On Public Procurement and repealing Directive 2004/18/EC’, while the new Public Procurement Law regulates the issues concerned primarily in Articles 51 and 52.
Guidelines on Implementing the Regulation
In order to facilitate the implementation of the new regulation, the Partnership of Latvian Construction Entrepreneurs in cooperation with the Procurement Monitoring Bureau, the Latvian Association of Architects and with the Law firm ‘MPKV’ hasdeveloped the following guidelines:
- Criteria for Determining the Most Economically Advantageous Tender in Construction;
- Criteria for Determining the Most Economically Advantageous Tender in the Case of ‘Design and Build’.
The guidelines are intended to help public procurement client to implement the new regulation. The criteria contained in the guidelines are advisory. The specific criteria to be used by the contracting authority for a particular procurement are to be chosen by the contracting authority itself, taking into account the specific circumstances of the procurement.
The percentage of points indicated in the criteria is advisory. It should also be noted that the Criteria for Determining the Most Economically Advantageous Tender in the Case of ‘Design and Build’ also include all the criteria specified in the guidelines ‘Criteria for Determining the Most Economically Advantageous Tender in Construction’. Only the costs of construction work are assessed differently, and two other criteria are added – ‘the team’s current experience of cooperation’ and the use of ‘BIM system’.