Value for Money (VfM)
Contracts must not be awarded on the basis of lowest price only, and contract award criteria must be specifically designed to assess and award on the basis of VfM.The award stage will identify which of the eligible tenders will deliver best VfM. For Regulated Procurements this is established using the Most Economically Advantageous Tender (MEAT) criteria. It is Scottish Government policy that all Regulated Procurements are awarded based on MEAT, as well as a legal requirement for all contracts equal to or above the GPA threshold.
In addition to the quality of products and services, Procurement Officers and DPOs must also consider factors such as the Sustainable Procurement Duty (for more information please see the Sustainable Procurement section of this Manual). In this context, Whole Life Costing and Life Cycle Costing should also be considered.
Procurement Officers and DPOs must also be mindful of abnormally low tenders. Where a tender could be considered to be abnormally low, the price being proposed must be clarified by the Procurement Officer or DPO to ensure that it is valid and sustainable. For more information on abnormally low tenders please see the Procurement Journey for goods and services contracts, or for works contracts see the Client Guide which includes a tool to help identify potentially abnormally low tenders.
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