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Supplier's guide to selling to the council

Evaluating tender applications

Once tender documents have been filled in by the tenderers and submitted before the deadline the evaluation process will take place. Use this page to understand how the evaluation process works.

How it works

We evaluate against a set criteria when evaluating tender applications. We also consider value for money, social value and complete thorough financial checks before offering an applicant a contract.

A panel made up of subject matter experts and those likely to make use of the contract will evaluate tender responses against the pre-determined list of factors, and make an assessment of both the quality and cost of the tendered response.  

The balance between quality and price will depend on the particular service area or product tendered for.

When evaluating an application, we consider the following criteria:

  • Product quality and range
  • Customer service standards
  • Supplier capacity to deliver the requirements
  • Whole life cost of the product

We consider value for money

We usually award contracts on the basis of value for money (often referred to as Most Economically Advantageous Tender or ‘MEAT’). This means that contracts will be awarded to organisations best able to meet our contract specification.

We consider social value

In accordance with the Social Value Act, we also consider the potential added social value of an application. This means that we will consider the added social benefits of choosing a particular application, ensuring that the community of Bath & North East Somerset will actively benefit from our procurement choices. 

Financial checks  

As part of our evaluation process, we also carry out financial checks on potential tenderers before we award a contract.  

Suppliers to the council must be in a sound financial position to provide the goods, works or service that we require. 

When undertaking the financial assessment, we look at the two most recent sets of the applicant's accounts [one if PAS91], which shows three years of financial information [two if PAS91], along with those of any parent company (if applicable and acting as guarantor).   

The financial assessment is conducted in two stages.  

Stage 1: meet 3 of 4 requirements

We have 4 key minimum requirements for financial considerations. If your organisation fails to meet 3 of the 4 requirements, your bid will be excluded from further consideration. You will not proceed to stage 2 of the Economic and Financial Standing assessment.

The 4 requirements are:

  1. The value of the contract must be no more than 51% of your annual turnover.
  2. The organisation must be financially strong enough to meet the payment schedule of its current assets.
  3. The organisation's account must not show continual losses.
  4. If the net worth of a tenderer is in a negative position, this will be deemed a fail.

Expand the links below for more detail on our requirements.

1. The value of the contract must not exceed 51% of your annual turnover
We calculate a contract limit, in accordance with regulation 16 (7) of the Regulations. The contract limit is the maximum contract value that a tenderer should be expected to tackle within its financial capacity. 
We calculate the contract limit, based on your organisation's turnover order to confirm whether the organisation is large enough to perform the contract. We calculate the contract limit by matching the organisation's most recent turnover figure with the annual contract value. 
If the annual contract value is more than 51% of the turnover figure used, it is unlikely that the tendering organisation alone, has adequate resources to perform the contract. 
By exception, the further full financial assessment may take place if a parent company guarantee or bond or deed should be obtained, provided the parent itself is suitable.
2. The organisation must be financially strong enough
The Acid Test Ratio is a measure of financial strength, which excludes stock so that only liquid assets are included. This addresses the question of whether the bidder has enough current liquid assets to meet the payment schedule of its current debts with a margin of safety for possible losses in current assets. There will be a minimum requirement for an acid ratio of 1 to score.
3. The organisation's account must not show continual losses
If a tenderer is showing continual losses in their accounts this will be deemed a fail.

Stage 2: Full financial assessment

If your tendering organisation passes at least 3 of the 4 key criteria, a full financial assessment will take place. 

The full financial assessment could include the following:

  • Selected ratio analysis of account figures
  • Any CCJ's you may have against you
  • Any adverse information on company directors
  • Commercial Delphi Score (risk rating)

We run an Experian check which provides averages for the industry, information on any County Court Judgements (CCJ), information on directors and a Commercial Delphi Score.

What is an Experian check?
An Experian check offers reports on an organisation or individual's financial history, their personal references, information on any County Court Judgements and potentially their activity on social media. This provides us with a reliable idea of an organisation or individual's financial status and character.

Measuring the results 

Each ratio and other criteria will carry a points score. 0 for a fail, and 1 for a pass. Points are tallied at the end of the assessment to give an overall score. The score is then matched to a predetermined risk based scoring model where tenderers will be assessed as low, medium or high risk.

Making the final decision

The final decision regarding the acceptability of your organisation’s financial standing relies on a degree of professional judgement from the council. If we decide that your financial standing is insecure, that you do not have the ability to perform the contract and your organisation represents an unacceptable risk to the council, then your organisation will be excluded from further consideration in this process.  

We inform applicants of our decision

You will be informed in writing of the outcome of your submission. Unsuccessful applicants will be provided with feedback about their bid. With careful consideration for commercial confidentiality, the Responsible Officer will inform you of which areas of your tender were strongest and where there may be room for improvement and development.  

Though it is not common, during the tender evaluation stage we may invite you to give a presentation, attend an interview or a site visit may be arranged as part of your submission. Not all applications require this. If we do decide to request a presentation or interview, you will be informed with plenty of notice and the process is only for clarification purposes.