How Australian tenders are scored: weighted criteria
Every tender is a scoreboard. See how price points are calculated, how the buyer's specific goals add up to 20 or 10 points, and why the cheapest bid does not always win, with a worked example from the 2022 regulations.
Worked example with illustrative bids. Weightings vary per approach to market - always read the evaluation plan in the tender.
What you will learn
- How a tender is scored out of 100: price + criteria up to A$50 million, price + criteria above it
- How price points are worked out relative to the lowest acceptable bid
- How the buyer's specific goals add up to 20 or 10 points, and where they are stated
- Why 20 specific-goal points can offset a price gap of up to 25% (about 11% on price + criteria)
- A worked example with three bidders, where the cheapest bid does not win
Read the transcript+
Every government tender is a scoreboard. The evaluation plan in the approach to market sets the weightings - commonly eighty for price and twenty for quality criteria, or a seventy thirty split. There is no fixed national formula; the buyer states the split in the tender.
Price points are relative. The lowest conforming bid earns the best price score. Every other bid loses points in proportion to how much dearer it is.
Take three bidders. A bids one million dollars, the lowest, and earns the best price score. B bids five percent higher, so loses a few price points. C bids ten percent higher, and loses more.
Now add the quality criteria. The buyer must state them in the tender documents, with the weightings for each. Say A earns nothing on quality, B earns the full twenty, and C earns ten. B is not the cheapest, but B wins.
That is the rule to remember. A twenty per cent quality weighting can offset a real price gap. So answer every criterion you can, and never price below cost just to chase the price score.
In the Pricer, every tender shows its price and quality weightings, right beside your live estimate. Then you can choose a pricing posture that uses them, like compete on quality at a fair price.
Know the scoring before you price. Next, we'll look at how to read a tender pack for the requirements that decide the bid.