Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement

J. L. Fuentes-Bargues; C. González-Gaya

doi:doi:10.11648/j.ijebo.20130101.11

| Peer-Reviewed

Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement

J. L. Fuentes-Bargues, C. González-Gaya

Published in International Journal of Economic Behavior and Organization (Volume 1, Issue 1)

Received: 15 January 2013 Accepted: Published: 20 February 2013

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

Public works procurement regulates two award procedures from within the same criteria: either the price or a variety of different conditions. Although the question of price may not seem the most important factor to be considered, it is imperative to always be aware of it when bearing in mind the award criteria. Economic scoring formulae (ESF) are numerous and each agency has the authority to determine which will be used for each of their bids, making this article a comparative analysis of all the options. The results show that most formulas give the highest score to the most economic bidder, it is necessary to eliminate the use of formulas that give the highest score to the offers which are closest to the average of all bids submitted. One should always opt for formulas with moderate or strong scoring gradients across various stages or phases, thereby giving more weight to economic analysis, as set out in the various administrative clauses.

Published in	International Journal of Economic Behavior and Organization (Volume 1, Issue 1)
DOI	10.11648/j.ijebo.20130101.11
Page(s)	1-12
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Procurement, Economic Scoring Formulae, Construction, Project Management, Bids

References

[1]	Rothkopf, M.H. "A model of rational competitive bidding". Management Science. 15(7), p.362-373, 1969. DOI: 10.1287/mnsc.15.7.362.
[2]	Näykki, P. "On optimal bidding strategies". Management Science. 23 (2), p. 687-705, 1976. DOI: 10.1287/mnsc.23.2.198.
[3]	Naoum, S.G. "Critical analysis of time and cost of management and traditional contracts". Journal of Construction Engineering and Management. 120 (4), p. 687-705, 1994. DOI: 10.1061/(ASCE)0733-9364(1994)120:4(687).
[4]	Rothkopf, M.H. and Harstad, R.M. "Modeling competitive bidding: a critical essay". Management Science. 40(3), p. 364-384, 1994. DOI: 10.1287/mnsc.40.3.364.
[5]	Jennings, E. and Holt, G.D. "Prequalification and multi-criteria selection – a measure of contractor´s opinion". Construction Management and Economics. 16(6), p.651-660, 1998. DOI: 10.1080/014461998371944.
[6]	Kumaraswamy, M.M. and Walker, D.H.T. "Multiple performance criteria for evaluating construction contractors". Procurement Systems – A guide to Best Practice in Construction, London: E & F N Spon, 1999, p 228-251.
[7]	Wong, C.H., Holt, G.D. and Harris, P. "Multi-criteria selection o lowest price? Investigation of UK construction clients` tender evaluation preferences". Engineering, Construction and Architectural Management. 8(4), p.257-271, 2001. DOI: 10.1108/eb021187.
[8]	Shen, L.Y., Li, Q.M., Drew, D. and Shen, Q.P. "Awarding construction contracts on multicriteria basis in China". Journal of Construction Engineering and Management. 130 (3), p.204-209, 2004. DOI: 10.1061/(ASCE)0733-9364(2004) 130:3 (385).
[9]	Waara F. and Bröchner J. "Price and Nonprice Criteria for Contractor Selection". Journal of Construction Engineering and Management. 132(8), p. 797-804, 2006. DOI: 10.1061/(ASCE)0733-9364(2006)132:8(797).
[10]	Lam, K.C., Ng, S.T., Tiesong, H., Skitmore, M., and Cheung, S.O. "Decision support system for contractor pre-qualification-artificial neural network model" Engineering Construction and Architectural Management. 7 (3), p. 251-266, 2000. DOI: 10.1108/eb021150.
[11]	Bendaña, R., Del Caño, A. and De la Cruz, P. "Contractor selection: fuzzy control approach". Canadian Journal of Civil Engineering, 35 (5), p. 473-486, 2008. DOI: 10.1139/l07-127.
[12]	Nieto-Morote, A. and Ruz-Vila, F. "A fuzzy multi-criteria decision-making model for construction contractor prequalification". Automation in Construction. 25, p. 8-19, 2012. DOI: 10.1016/j.autcon.2012.04.004.
[13]	Pastor-Ferrando, J.P., Aragonés-Beltrán, P., Hospitaler-Pérez, A. and García-Melón, M. "An ANP and AHP based approach for weighting criteria in public works bidding". Journal of the Operational Research Society. 61, p. 905-916, 2010. DOI: 10.1057/jors.2010.13.
[14]	Tone, K. "A slacks-based measure of super-efficency in data envelopment analysis". European Journal of Operational Research. 143 (1), p. 32-41, 2002. DOI: 10.1016/S0377-2217(01)00324-1.
[15]	Falagario, M., Sciancalepore, F., Costantino, N. and Pietroforte, R. "Using a DEA-cross efficiency approach in public procurement tenders" European Journal of Operational Research. 218 (2), p. 523-530, 2012. DOI: 10.1016/j.ejor.2011.10.031.
[16]	Crowley, L.G. and Hancher, D.E. "Risk assessment of competitive procurement". Journal of Construction Engineering and Management. 121(2), p. 230-237, 1995. DOI: 10.1061/(ASCE)0733-9364(1995)121:2(230).
[17]	Tan, Y.T., Shen, L.Y. and Khalid, A.G. "An examination of the factors affecting contractor´s competition strategy: a Hong Kong study". International Journal of Project Organisation and Management. 1, p. 4-23, 2008. DOI: 10.1504/IJPOM.2008.020026.
[18]	Oo, B., Drew, D.R. and Runeson, G. "Competitor analysis in construction bidding". Construction Management and Economics. 28(12), p. 1321-1329, 2010. DOI: 10.1080/ 01446193.2010.520721.
[19]	Mohamed-Khaled, A., Khoury-Shafik, S. and Hafez-Sherif, M. "Contractor´s decision for bid profit reduction within opportunistic bidding behaviour of claims recovery". International Journal of Project Management. 29, p. 93-107, 2011. DOI: 10.106/j.ijproman.2009.12.003.
[20]	Ballesteros-Pérez, P., González-Cruz, M.C. and Pastor-Ferrando, J.P. "Analysis of construction projects by means of value curves". International Journal of Project Management. 28(7), p. 719-731, 2010. DOI: 10.1016/ j.ijproman.2009.11.003.
[21]	Ballesteros-Pérez, P., González-Cruz, M.C., Pastor-Ferrando, J.P. and Fernández-Diego, M. "The iso-Score Curve Graph. A new tool for competitive bidding". Automation in Construction. Vol 22, p. 481-490, 2012. DOI: 10.1016/j.autcon.2011.11.007.
[22]	European Union. Directiva 2004/18/CE del Parlamento Europeo y del Consejo, de 31 de Marzo de 2004, sobre coordinación de los procedimientos de adjudicación de los contratos públicos de obras, de suministro y de servicios. Diario Oficial de la Unión Europea, 30 de Abril de 2004, L 134 p.114-240.
[23]	Spain. Real Decreto Legislativo 3/2011, de 14 de Noviembre, por el que se aprueba el texto refundido de la Ley de Contratos del Sector Público. Boletín Oficial del Estado, 16 de Noviembre de 2011, núm. 276, p.117729-117914.
[24]	De Hoyos-Maroto, B. "Criterios de selección y criterios de adjudicación en la contratación administrativa: problemas de delimitación". Cuenta con el IGAE. 11, p.30-36, 2005.
[25]	Fueyo-Bros, M. "Criterios objetivos de valoración versus objetivos de los criterios de adjudicación". El Consultor de los Ayuntamientos y de los Juzgados. 15-16, p. 2196-2280, 2010.
[26]	Watt, D.J., Kayis, B. and Willey, K. "The relative importance of tender evaluation and contractor selection criteria". International Journal of Project Management. 28(1), p. 51-60, 2010. DOI: 10.1016/j.ijproman.2009.04.003.
[27]	ABSAC. Report 28/95, de 14 de Octubre de 1995. Interpretación y aplicación que debe darse a lo previsto en el artículo 87 de la Ley de Contratos de las Administraciones Públicas, referido a los criterios para la adjudicación del concurso.
[28]	Ballesteros-Moffa L.A. "La selección del contratista en el Sector Público: Criterios reglados y discrecionales en la valoración de las ofertas". Revista de Administración Pública. 180, p. 21-57, 2009.
[29]	ABSAC. Report 27/98, de 11 de Noviembre de 1998. Ponderación del criterio del precio en concursos.
[30]	European Comission. Report 23/12/1997 en relación al procedimiento de adjudicación de un contrato de consultoría y asistencia del Gobierno español..

Cite This Article

Plain Text BibTeX RIS

APA Style

J. L. Fuentes-Bargues, C. González-Gaya. (2013). Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement. International Journal of Economic Behavior and Organization, 1(1), 1-12. https://doi.org/10.11648/j.ijebo.20130101.11

Copy | Download

ACS Style

J. L. Fuentes-Bargues; C. González-Gaya. Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement. Int. J. Econ. Behav. Organ. 2013, 1(1), 1-12. doi: 10.11648/j.ijebo.20130101.11

Copy | Download

AMA Style

J. L. Fuentes-Bargues, C. González-Gaya. Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement. Int J Econ Behav Organ. 2013;1(1):1-12. doi: 10.11648/j.ijebo.20130101.11

Copy | Download

@article{10.11648/j.ijebo.20130101.11,
  author = {J. L. Fuentes-Bargues and C. González-Gaya},
  title = {Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {1},
  number = {1},
  pages = {1-12},
  doi = {10.11648/j.ijebo.20130101.11},
  url = {https://doi.org/10.11648/j.ijebo.20130101.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20130101.11},
  abstract = {Public works procurement regulates two award procedures from within the same criteria: either the price or a variety of different conditions. Although the question of price may not seem the most important factor to be considered, it is imperative to always be aware of it when bearing in mind the award criteria. Economic scoring formulae (ESF) are numerous and each agency has the authority to determine which will be used for each of their bids, making this article a comparative analysis of all the options. The results show that most formulas give the highest score to the most economic bidder, it is necessary to eliminate the use of formulas that give the highest score to the offers which are closest to the average of all bids submitted. One should always opt for formulas with moderate or strong scoring gradients across various stages or phases, thereby giving more weight to economic analysis, as set out in the various administrative clauses.},
 year = {2013}
}

Copy | Download

TY - JOUR
T1 - Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement
AU - J. L. Fuentes-Bargues
AU - C. González-Gaya
Y1 - 2013/02/20
PY - 2013
N1 - https://doi.org/10.11648/j.ijebo.20130101.11
DO - 10.11648/j.ijebo.20130101.11
T2 - International Journal of Economic Behavior and Organization
JF - International Journal of Economic Behavior and Organization
JO - International Journal of Economic Behavior and Organization
SP - 1
EP - 12
PB - Science Publishing Group
SN - 2328-7616
UR - https://doi.org/10.11648/j.ijebo.20130101.11
AB - Public works procurement regulates two award procedures from within the same criteria: either the price or a variety of different conditions. Although the question of price may not seem the most important factor to be considered, it is imperative to always be aware of it when bearing in mind the award criteria. Economic scoring formulae (ESF) are numerous and each agency has the authority to determine which will be used for each of their bids, making this article a comparative analysis of all the options. The results show that most formulas give the highest score to the most economic bidder, it is necessary to eliminate the use of formulas that give the highest score to the offers which are closest to the average of all bids submitted. One should always opt for formulas with moderate or strong scoring gradients across various stages or phases, thereby giving more weight to economic analysis, as set out in the various administrative clauses.
VL - 1
IS - 1
ER -

Copy | Download

Author Information

J. L. Fuentes-Bargues

Dept. Proyectos de Ingeniería, Universidad Politécnica de Valencia, Valencia, Spain; Dept. Ingeniería Química, Universidad de Valencia, Valencia, Spain
C. González-Gaya

Dept. Ingeniería de Construcción y Fabricación, UNED, Madrid, Spain

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

J. L. Fuentes-Bargues, C. González-Gaya. (2013). Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement. International Journal of Economic Behavior and Organization, 1(1), 1-12. https://doi.org/10.11648/j.ijebo.20130101.11

Copy | Download

ACS Style

J. L. Fuentes-Bargues; C. González-Gaya. Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement. Int. J. Econ. Behav. Organ. 2013, 1(1), 1-12. doi: 10.11648/j.ijebo.20130101.11

Copy | Download

AMA Style

J. L. Fuentes-Bargues, C. González-Gaya. Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement. Int J Econ Behav Organ. 2013;1(1):1-12. doi: 10.11648/j.ijebo.20130101.11

Copy | Download

@article{10.11648/j.ijebo.20130101.11,
  author = {J. L. Fuentes-Bargues and C. González-Gaya},
  title = {Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {1},
  number = {1},
  pages = {1-12},
  doi = {10.11648/j.ijebo.20130101.11},
  url = {https://doi.org/10.11648/j.ijebo.20130101.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20130101.11},
  abstract = {Public works procurement regulates two award procedures from within the same criteria: either the price or a variety of different conditions. Although the question of price may not seem the most important factor to be considered, it is imperative to always be aware of it when bearing in mind the award criteria. Economic scoring formulae (ESF) are numerous and each agency has the authority to determine which will be used for each of their bids, making this article a comparative analysis of all the options. The results show that most formulas give the highest score to the most economic bidder, it is necessary to eliminate the use of formulas that give the highest score to the offers which are closest to the average of all bids submitted. One should always opt for formulas with moderate or strong scoring gradients across various stages or phases, thereby giving more weight to economic analysis, as set out in the various administrative clauses.},
 year = {2013}
}

Copy | Download