TY - JOUR
T1 - A Comparative Study of Formulas for Choosing the Economically Most Advantageous Tender
AU - Stilger, PS
AU - Siderius, J
AU - van Raaij, Erik
PY - 2017
Y1 - 2017
N2 - 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.
AB - 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.
U2 - 10.1108/JOPP-17-01-2017-B004
DO - 10.1108/JOPP-17-01-2017-B004
M3 - Article
SN - 1535-0118
VL - 17
SP - 89
EP - 125
JO - Journal of Public Procurement
JF - Journal of Public Procurement
IS - 1
ER -