KnowledgeEuropean public tender
Best price-quality ratio (BPKV): why 70/30 does not mean what you think
Almost every European public tender is awarded on the best price-quality ratio. The instructions then say, for example: quality 70%, price 30%. Many bidders read that as: quality is what counts here. That can be true, but often it is not. What really decides is the scoring underneath.
Written by the Atvalio editorial team: people who spent years bidding on tenders themselves. About us
The common models
How the buyer weighs price against quality is set out in the instructions to bidders. You will mostly come across these three.
- Most commonPoints modelPrice and each quality question get a maximum number of points. The bid with the most points in total wins. This is where you see the familiar splits like 50/50 or 70/30.
- In eurosValue-based awardYour quality is converted into an amount deducted from your price. The lowest price after deduction wins. You see straight away what a better score is worth in money.
- Fixed priceBudget modelThe price is fixed or capped. Bidders only compete on quality.
In the points model, the price formula matters too. With a relative formula, your price score depends on the lowest price of all bidders. With an absolute formula, the buyer works from fixed amounts stated in the documents, regardless of what others offer. PIANOo, the Dutch government’s procurement expertise centre, recommends the absolute form to buyers.
Why the percentages say little
It is not the split that decides, but how many points you lose per step.
A 70/30 split only tells you how many points are available. It says nothing about how large the differences between bidders turn out to be. For that, look at two things.
- How fast do you lose points on price?Does being 10% more expensive cost you two points or twenty? That depends entirely on the price formula.
- How big is one step on quality?An evaluation panel usually scores on a scale, such as insufficient, sufficient, good and excellent. The points between two steps decide what a better score is worth.
Example 1: 30% more expensive and still winning
A fictional tender with 70% quality and 30% price. Quality consists of two questions worth 35 points each, scored in steps of a quarter (0, 25, 50, 75 or 100%). Price uses a relative formula: the lowest price gets 30 points, the others proportionally fewer.
| Points | |
|---|---|
| Bidder A, price €1,000,000 | 30.0 for price |
| Bidder B, price €1,300,000 (30% more expensive) | 23.1 for price |
| A’s lead on price | 6.9 |
| One step up on one quality question | 8.75 |
Price points = 30 × lowest price / own price. Fictional example.
If A and B score the same otherwise, but B gets one step higher on one of the two questions, say good instead of sufficient, B wins. Despite a price that is 30% higher. In this model, one better score makes up for a price difference of just over 40%.
With 50/50 and the same structure it is less extreme, but still large. One step on one question then makes up for a price difference of about 14%.
Example 2: 70% quality, yet price decides
It can also work out exactly the other way. The same 70/30 split, but now with a steep price formula.
| Points | |
|---|---|
| Price formula | Lowest price 30 points, 10% or more above it 0 points |
| Every percent more expensive | 3 points less |
| One step up on one quality question | 8.75 |
| Price difference that step makes up for | about 3% |
Fictional example.
On paper, quality carries a lot of weight here. In practice, price decides as soon as quality scores are close. And that happens often: when a panel rates most bids as good, the differences on quality become small. PIANOo warns buyers about this itself: quality then in fact counts for much less than the weighting suggests.
What do you do with this?
- Work out the exchange rateHow many points does one percent more expensive cost? How many points does one step up on each quality question earn? Then you know what a better score is worth in price. Work it out with the calculator.
- Choose where to spend your timeWill a sharper price earn more than better writing, or the other way round? In many tenders, answering one question better is the cheapest way to win.
- Find the question with the most points per stepNot every question is worth the same. Give most attention to the one where a step up earns the most.
- Ask about what is unclearIs the formula or the scale unclear, or does it work out strangely? Ask about it in the clarification round.
Know the sums behind the percentages, and you know where to win.
HOW ATVALIO HELPS
Atvalio reads the scoring method from the instructions and lays it out for you: the model, the price formula, the scale and the points per quality question, with the page it comes from. You see at a glance where the most points are. Atvalio then writes a first draft per criterion based on what your company can do, and a simulated panel reads along to show strengths and weaknesses. You decide your price, and you submit.
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