Title: Bid Evaluation Tools

Identification: Overview of Solutions: Technical Description

Version: V.1
Date of Issue: June 2003
Current Status: Approved
Prepared By: Strand 4, Kirklees Metropolitan Council and iMPOWER

e-PROCUREMENT OVERVIEW

CONTROLLING BUYING

SOURCING MANAGING ORDERING PAYING

Terminology
Definition: bid evaluation tools help compare complex bids with different strengths and weaknesses by
enabling electronic evaluation of supplier responses to procurement requirements through automated
analysis and real-time collaboration among multiple evaluators.

Similar terms:
 Tender evaluation tools
 Evaluation tools
 Analysis tools

Why should I use bid evaluation tools?

Business benefits:
 Reduced time spent on tender evaluation
 Increased efficiency and productivity through greater collaboration among the people involved
in the evaluation process
 Better access to tender information
 Improved accuracy of complex tender evaluation
 Increased transparency of decision making
 Reduced risk of making a wrong decision
 Ease of analysis
 Easier to assess impact of some variable inputs and weightings

Bid evaluation tools are used to reduce the time necessary to evaluate submitted bids. They can be
used to increase the accuracy and transparency of the evaluation process and help with complex
decision-making.

They are particularly suitable for large procurement projects where incoming bids are complex and
highly differentiated and comparing like-for-like is difficult.

Automating the evaluation process – where the system compares the specifications of individual bids
against pre-populated criteria – significantly reduces the time needed to make a decision on a winning
bid.

Supplier relationships can be improved due to a shorter tendering cycle and increased trust in the
fairness of the outcome facilitated by increased transparency of the process backed up by an audit
trail.

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How are bid evaluation tools used?

Bid evaluation tools score suppliers’ bids for a specification of products or services required against
pre-populated evaluation criteria. This requires bids to be submitted in standardised electronic formats
and may require the bidder to input the bid data through an e-tendering or reverse auction interface
rather than submitting documentation via e-mail.

The main steps involved in using bid evaluation tools are:

1. Set up and configure the tool with criteria and

1. Configure evaluation tool weighting, vocabulary and any other parameters
specific to the tender.
2. Upload bid documentation received from suppliers. It is
beneficial if the tender specification clearly specifies
the format of the bid documentation and all the
2. Load bid data received bids use the standard format. More
specialised bid evaluation tools with optical character
recognition (OCR) will allow scanning of paper bids or
non-standard bids.
3. Run the tool to carry out the analysis of the uploaded
3. Run bid evaluation tool to bids.
analyse bids

4. Compare the results of the analysis. This may involve

multiple users (such as functional experts) who can
post their comments, which are recorded in the audit
4. Compare results of log. Advanced systems may do this completely
analysis
automatically using assessment engines. Such
systems will require a more complex set up.
5. Make an award decision, which then can be
5. Bid offering best value is
awarded contract
disseminated to all the tender participants.
6. In the case of bid evaluation tool being integrated with
buyer’s back office systems, the award automatically
becomes a commitment in the accounts and an order
Back Office System placed with the supplier.
6. Award becomes a
commitment in accounts
system

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Things to look out for and think about
Councils are looking for Best Value in their tendering process, which is not confined to the lowest price.
Evaluation tools allow for more detailed evaluation such as weighting of service level agreements and
suppliers’ previous performance.

Bid evaluation tools usually come in two configurations:

As part of a sourcing system

Some more sophisticated e-tender and reverse auction solutions include advanced evaluation
capabilities. These require upfront specification of bid documentation so that bids can be compared like
for like.

By creating standard formats with which suppliers must reply to invitations to tender (ITTs), and
ensuring tight specifications for suppliers to bid against, a council – even if using a manual evaluation
process – will find it much easier to compare tenders like for like.

Standalone bid evaluation systems

Stand alone bid evaluation systems tend to be highly sophisticated solutions which integrate with OCR
(Optical Character Recognition) scanning. This enables the processing of paper-based bids by parsing
text for pre-specified words and values. A comparison table or other representation of the information
can be generated to allow easy comparison of the competing bids.

This sophisticated system is most appropriate where there are a large number of bids submitted in
paper form or non-standard electronic format which would otherwise be very difficult to compare
manually. It can also be used in those situations where it is difficult to enforce or put in place a strict
specification in the ITT or insist on a standard format for bids sent by suppliers.

Features
Typical features for a bid evaluation system include a standard vocabulary repository, scoring criteria
and weighting, automated analysis of bids, audit trails and reporting. Internet connectivity allows for
real-time collaboration between multiple and geographically dispersed evaluators.

Some typical features to expect from a bid evaluation tool include:

 Electronic document management
 Concurrent and remote multi-user collaboration capability
 Enforcement of user and network security
 Data import/export facility
 Assessment scoring engine
 Evaluation report generation
 Audit log generation
 Management information and reporting

Other functionality may include:

 Optical Character Recognition (OCR) for scanning of paper documents
 On-line real-time collaboration
 Automated analysis
 Comparison tables
 Vocabulary repository

Integration Opportunities

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In general, bid evaluation tools come integrated as part of a sourcing package such as an e-tendering
tool or reverse auction system. Such systems can be integrated with back-office financial systems to
create commitments and orders for a winning bid.

Stand-alone bid evaluation tools may be integrated with e-tendering and reverse auction solutions. E-
tendering and reverse auction integration is usually based on uploading individual bid details into the
evaluation tool. The tool would preset with evaluation criteria and would then perform the analysis and
produce a final assessment report.

Effort and Cost

A sophisticated e-tendering or auction system which includes evaluation features may be offered either
as a hosted solution or with a licence. A hosted solution may provide more support from the service
provider which may be required if a tender is complex weighting of criteria is required.

A specialist stand-alone application including OCR software may need more configuration and systems
support.

Since mainly procurement and functional specialists use the evaluation tools, the impact on change
management and training is limited.

Given that the tool does the evaluation the need for specialist skills may be reduced as it becomes
easier for non specialists to understand the data produced

This document was produced on behalf of Kirklees Metropolitan Council by:

iMPOWER, 40a Dover Street, London, W1S 4NW
www.impower.co.uk

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