Tender Evaluation Criteria: A Practical Guide

Tender evaluation criteria are the cornerstone of transparent, fair, and accountable procurement. They define how bids are assessed, compared, and selected. This ensures decisions aren’t based on guesswork but on structured, documented judgment.

In public construction projects, these criteria must also meet strict policy and compliance obligations. Let’s talk about the key types of evaluation criteria, how to structure them, and how to apply them within a compliant and practical framework.

What are Tender Evaluation Criteria?

Tender evaluation criteria are the standards for assessing supplier or contractor submissions in a competitive procurement process. They help decision-makers evaluate not just the price of a bid, but its quality, capability, and strategic alignment. These criteria must be:

• Clearly defined and measurable
• Approved before the tender is released
• Used consistently and transparently

Evaluation criteria in Victoria must comply with rules set by the Victorian Government Purchasing Board (VGPB), Construction Supplier Register (CSR), and project-specific frameworks like the Fair Jobs Code or Value Creation and Capture (VCC).

Planning Your Tender Evaluation Criteria

Before construction tenders are released, evaluation criteria must be fully defined and documented in an Evaluation Plan. This plan ensures transparency and consistency throughout the procurement process. It must include:

• A list of all evaluation criteria, their weightings, and scoring methods
• Roles and responsibilities of each evaluation panel member
• The scoring process (individual, consensus, or comparative)
• Conflict of interest declarations from all evaluators
• Guidelines for managing non-compliance or anomalies

Evaluation criteria should also align with your project’s Business Case, Procurement Strategy, or Project Definition Report, especially for high-value or high-risk projects.

⚠️ Important Note: All evaluation panel members must also complete a Conflict of Interest and Confidentiality Declaration before participating. Any potential conflicts must be disclosed and managed appropriately to maintain fairness and probity.

3 Types of Tender Evaluation Criteria

Tender evaluation criteria are the rules for comparing bids during tender assessment. They fall into three main types: mandatory, weighted (non-price), and project-specific. Each type serves a different purpose and must be clearly defined before tenders are released.

1. Mandatory Evaluation Criteria

Mandatory criteria are fixed requirements set by laws, policies, or procurement rules. They often cover areas like Occupational Health and Safety (OHS), Industrial Relations (IR), and compliance with the Fair Jobs Code. These are pass/fail checks. If a supplier or contractor doesn’t meet them, their bid is excluded from further evaluation.

Common thresholds apply. For example, OHS criteria must be used for building works over $750,000, and construction services over $300,000. For contracts over $7.5 million, you may need to apply rules around Aboriginal participation or supplier conduct.

Failing to meet any mandatory requirement, such as not holding a required certificate or plan, makes a submission non-compliant.

2. Weighted (Non-Price) Evaluation Criteria

Weighted criteria assess the quality of a bid. These cover non-price factors like relevant experience, technical skills, project methodology, and management systems. Each is scored from 0 (poor) to 10 (excellent), then weighted based on how important it is to the project.

For example, you might assign 20% to experience, 15% to methodology, and 10% to management systems. The total weight of non-price criteria often ranges from 30% to 60%, depending on how much emphasis you want to place on quality versus cost.

Scoring must follow the plan. Overweighting “soft” criteria after bids are received can lead to compliance issues.

3. Project-Specific Evaluation Criteria

Project-specific criteria are tailored to the unique risks or needs of your project. These often go beyond standard templates and reflect things like site conditions, staging challenges, or innovation requirements.

You might evaluate how well a contractor plans for Indigenous participation, supports local jobs, or integrates sustainable design. If your project falls under the Value Creation and Capture Framework, you may also score bids based on how well they deliver long-term community or economic benefits. These criteria must be relevant, measurable, and clearly documented in your evaluation plan.

Sample Evaluation Criteria for Building Works and Services

Evaluation criteria must be relevant to the project, clearly defined, and easy to score. Below are commonly used criteria for construction tenders, along with real weighting ranges taken from government guidelines.

Relevant Experience (5–20%)

Assess the supplier’s past work on similar projects. Look at the size, complexity, and relevance of those projects. Give more weight to recent projects. You can ask for project descriptions, roles undertaken, values, and timelines.

Technical Skills (0–20%)

Evaluate the capability of the proposed team. Review qualifications, technical knowledge, and past performance. Tenderers should list key staff, their functions, and relevant experience. Attach resumes where needed.

Price and Lifecycle Cost (40–70%)

Compare total contract amount. This includes fixed and variable costs, maintenance, operations, and any special adjustments. Use a formula where the lowest price gets the highest score (e.g. 10 points), and others are scaled down accordingly.

Environmental Systems (0–20%)

Check for the contractor’s environmental management systems and sustainability practices. Look for ISO certifications, emissions control, or recycling processes. This may also include energy-efficient solutions or materials.

Program Delivery Method (0–20%)

Assess how the supplier plans to deliver the project. Review their proposed project delivery method, program of works, use of subcontracts, key milestones, and any innovative approaches. The more detailed and realistic the plan, the higher the score.

Scoring for each non-price criterion typically uses a 0 to 10 scale. Scores are then multiplied by their assigned weight to calculate the weighted score. Normalising may be used to compare scores fairly across bids

Tender Evaluation Criteria Example Table

💡Scoring Tip: Non-price criteria are scored 0 (poor) to 10 (excellent). Price is scored using a formula. The lowest price gets 10, others are scaled proportionally. All scores are weighted, then combined for a total out of 100.

Final Thoughts on the Evaluation Criteria

Getting tender evaluation criteria right means setting up your procurement for success. The right criteria help you choose the best contractor, reduce risk, and ensure every decision is backed by evidence.

Make your evaluation plan early. Define your rules. Score fairly. And document everything. When the process is fair, transparent, and defensible, it builds trust in the procurement and in the project itself.