Evaluation criteria

You must give suppliers specific evaluation criteria they must meet if they are to 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 SME, 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 can be weighted to give more importance to some criteria. You should consider disclosing any weighting for the evaluation criteria or their relative importance. This will help suppliers to prepare their responses.

For covered procurements, you must indicate the importance of each criteria. You can do this, for example, by listing the criteria in order of importance.

Read more about covered procurements

How to use evaluation criteria

You should use your evaluation criteria to assess which bid or submission best meets your requirements and provides value for money.

For covered procurements, you should consider:

  • 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.

Even for non-covered procurements, you should consider evaluating suppliers using these criteria.

Supplier conduct

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.

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 to use in PBD 2017-07 Supplier Conduct.

Evaluation criteria to address government priorities

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

  • supporting SMEs and regional businesses
  • providing employment and business opportunities for Aboriginal people
  • supporting apprenticeships and trainees on construction projects.

These requirements also apply to covered procurements.

Goods and services

  • For contracts over $3 million. You must apply a minimum 15% of the non-price evaluation criteria to assessesing 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.
  • For 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.
  • For contracts over $10 million. You must require suppliers to include an Aboriginal Participation Plan in their tender responses and put in place evaluation criteria for assessing this.

The EPP Direction does not affect how a covered agency applies these criteria.

Read more about Aboriginal enterprises

Read more about Supporting SME and regional businesses

Construction contracts

  • Contracts over $1 million or directed primarily at Aboriginal communities. You must set a target to spend 1.5% of the contract 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 (projects over $1 million) or monthly (projects over $10 million) on implementing their plan.
  • Contracts under $10 million. You should include evaluation criteria that assess suppliers’ commitment to skills development through apprenticeships and training. You should also monitor this after awarding the contract and include reporting and compliance requirements in the contract.
  • Contracts over $10 million. You must set specific targets for hiring apprentices and trainees and include these in the tender requirements. You must evaluate suppliers’ capacity to meet these when you evaluate bids or submissions and award the contract. You must also make sure the successful supplier commits to quarterly reporting.
  • Contracts over $100 million. You must evaluate suppliers based on their demonstrated ability to work effectively with government. You must also evaluate their ability to support our skills and apprenticeship targets.

Related content

  • Select suppliers: Get an overview of your obligations when it comes to selecting suppliers.
  • Probity and fairness: Get an understanding of your obligations when it comes to probity and fairness.
  • Low value contracts: Read about the special rules that apply when selecting suppliers for low value contracts.
  • Supporting SMEs: Discover your special obligations to SMEs and regional businesses when selecting suppliers.
  • Australian Disability Enterprises: Find out about the special rules that apply if you select an Australian Disability Enterprise to carry out a procurement.
  • Aboriginal businesses: Read about the special rules concerning Aboriginal businesses.