Tender evaluation criteria

Know how to provide suppliers with the evaluation criteria they need so they can be successful in tendering for government work.
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What you need to know
  1. You must include evaluation criteria in the tender documents.
  2. Evaluation criteria are used to identify the supplier that can fulfil the procurement contract and provide the best value for money. At times, you may need to exclude suppliers who’ve engaged in certain conduct.
  3. You must sometimes also include criteria that support government priorities such as small to medium enterprises (SMEs), regional and Aboriginal businesses.
  4. For construction contracts, you may need to consider a suppliers’ commitment to training staff and engaging apprentices.

Include evaluation criteria in tender documents

Whenever you go to market, your tender documents should include the criteria you’ll use to evaluate supplier submissions.

Evaluation criteria help you assess which bid or submission best meets your requirements and provides value for money.

Including your evaluation criteria in your tender documentation helps suppliers determine and prepare their best responses.

Additionally, evaluation criteria can be weighted based on their relative importance.

For general procurement tenders, including evaluation criteria in your tender documentation is optional. 

Covered procurements should indicate weighted criteria

Procurements that are subject to the Enforceable procurement provisions (PBD 2019-05) are called covered procurements.

For covered procurements, you must indicate the relative importance (or weight) of your evaluation criteria. 

A simple way to indicate weighted criteria is to list each criterion in its order of importance.

Read more about enforceable procurement provisions.

Know which evaluation criteria to include

Covered procurements should include these evaluation criteria:

  • financial and non-financial costs and benefits of making the procurement
  • the quality and quantity of goods or services
  • whether the goods or services are fit for purpose
  • the supplier’s relevant experience and performance history
  • the whole-of-life costs of the goods or services, and
  • the environmental sustainability of the goods or services.

For general procurements, you can determine your evaluation criteria independently. However, this list gives you a good grounding for any procurements, and is a recommended starting point.

Communicate supplier obligations to your bidders

You must tell every bidder of their obligations under the:

You must also require prospective suppliers to provide information about any findings of dishonest, unfair, unconscionable, corrupt or illegal conduct against the business, their directors or managers.

Exclude suppliers who don't meet standards

You may exclude a supplier where you have a reasonable belief that the supplier, their directors or managers:

  • are bankrupt or insolvent
  • have made one or more false declarations
  • have failed to perform in any substantive matter under a prior contract
  • have been found by ICAC or an equivalent body in Australia to have engaged in corrupt conduct within the past 10 years
  • have failed to pay taxes
  • have been convicted of an offence punishable by more than 2 years’ jail, or a fine of more than $200,000
  • have been convicted of professional misconduct or unprofessional conduct within any jurisdiction in Australia.

For construction contracts, you must include criteria covering adverse actual or reputational risks that arise from supplier conduct.

You can find the wording you need in PBD 2017-07 Conduct by suppliers.

Add evaluation criteria for high-value contracts

For some high-value procurements, you must include additional criteria that support NSW Government priorities. This includes:

  • supporting small to medium enterprises (SMEs) and regional businesses
  • providing employment and business opportunities for Aboriginal people
  • supporting apprenticeships and trainees on construction projects.

Understand the thresholds for government contracts

The following contract thresholds (or maximum contract values, MCVs) apply:

  • Goods and services contracts under $3 million. You can include a non-price evaluation criterion to assess how SME suppliers will support the government’s economic, ethical, environmental and social priorities.
  • Goods and services contracts over $3 million. You must apply a minimum 15% of the non-price evaluation criteria to assess how suppliers will support the government’s economic, ethical, environmental and social priorities. You must allocate at least 10% (ie 2/3 of the 15%) to SME participation.
  • All contracts over $7.5 million (goods and services contracts and construction contracts). You must set a target to spend 1.5% of the project value on supporting Aboriginal participation. You should also set higher goals where possible. You must require prospective suppliers to submit an Aboriginal Participation Plan in their tender response and make sure the successful supplier implements their plan. This includes making make sure suppliers report quarterly on implementing their plan.

The Enforceable procurement provisions (PBD 2019-05). establishes the thresholds for covered procurements, but it does not indicate how covered agencies apply these criteria. If you need more information or advice, contact NSW Procurement via our details on this site.

Read more about enforceable procurement provisions.

Read more about supporting Aboriginal businesses.

Read more about supporting SME and regional businesses.