Introduction

Competition for procurement contracts is widely recognized to have a multidimensional nature. The buyer often cares about both the price and other non-monetary attributes, including various measures of quality. The typical mechanism that can be used in these circumstances is a scoring-based competitive bidding. In such a competitive bidding format, participants bid for price and non-price attributes (quality). The buyer then selects the winner using a scoring rule that weights price and quality, with the aim of achieving best value for money. Hence, scoring competitive bidding involves the choice of a scoring rule that allows the buyer to rank offers and to determine the final contractor. Scoring competitive bidding can be more costly to design and run than price-only mechanisms, since it requires the evaluation of potentially complex quality attributes. However, it also guarantees more flexibility when handling the trade-off between price and quality.

In this chapter we investigate several practical issues concerning scoring rules that should inform the choices of private and public procurers. First, we examine how the procurer should choose the scoring rule according to her preferences. This explains how to solve the possible tension between low prices and high quality. Second, we describe different scoring rules and we analyse their properties paying particular attention to features such as simplicity, predictability and ability to promote competition. We identify the settings where a particular scoring rule is likely to work better than others do, providing some practical conclusions.