A Comparative Study of Formulas for Choosing the Economically Most Advantageous Tender

PS Stilger; J Siderius; Erik van Raaij

doi:10.1108/JOPP-17-01-2017-B004

A Comparative Study of Formulas for Choosing the Economically Most Advantageous Tender

PS Stilger, J Siderius, Erik van Raaij

Department of Technology and Operations Management

Research output: Contribution to journal › Article › Academic › peer-review

19 Citations (Scopus)

207 Downloads (Pure)

Abstract

Choosing the best bid is a central step in any tendering process. If the award criterion is the economically most advantageous tender (EMAT), this involves scoring bids on price and quality and ranking them. Scores are calculated using a bid evaluation formula that takes as inputs price and quality, and their respective weights. The choice of formula critically affects which bid wins. We study 38 such formulas and discuss several of their aspects, such as how much the outcome of a tender depends on which formula is being used, relative versus absolute scoring, ranking paradox, isoutility curves, protection against a winner with an extremely high price, and how a formula reflects the weights of price and quality. Based on these analyses, we summarize the (dis)advantages and risks of certain formulas and provide associated warnings when applying certain formulas in practice.

Original language	English
Pages (from-to)	89-125
Number of pages	37
Journal	Journal of Public Procurement
Volume	17
Issue number	1
DOIs	https://doi.org/10.1108/JOPP-17-01-2017-B004
Publication status	Published - 2017

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A Comparative Study of Formulas for Choosing the Economically Most Advantageous Tender

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