Andrew Millross examines a proposal in the Green Paper: Transforming public procurement to change the basis of contract awards from “most economically advantageous tender” (MEAT) to “most advantageous tender” (MAT).
A very similar term, “most favourable tender” was considered in the case of Beentjes*. The court regarded this as permitted only to the extent that it required the contracting authority to determine the most economically advantageous tender “based on objective criteria” and without any “element of arbitrary choice”. In effect the court was saying that it did not see much difference between the phrase “most advantageous tender” and “most economically advantageous tender”, and both had to be determined according to objective criteria set out in the procurement documents.
The objective of this proposed change seems to be to get away from the perceived restrictions (from the use of the word “economically”) that prevent contracting authorities having regard to appropriate considerations. It is clear, though, that these restrictions are more perceived than real. There are plenty of opportunities to take non-financial considerations into account in procurement and plenty of encouragement not to tender based on the lowest price. It is usually perceived budgetary pressures, rather than the procurement rules, that lead to price featuring too strongly in tender evaluation processes.
The removal of the word “economically” from the test would potentially give a contracting authority the ability to ignore price altogether and determine “advantage” based on totally different considerations and without regard to price. It also opens up the prospect of evaluating price according to how close a tenderer’s price is to the average of prices tendered or to a pre-defined price determined by the contracting authority. However, this leads to questions in relation to value for money if a contracting authority chooses a more expensive (but otherwise equivalent quality) tender simply because it is closer to the average tendered price than a cheaper price.
If the objective of this change is simply to allow a greater range of non-price considerations to be evaluated, then we wonder whether it would be better to use a completely different term altogether. The concept of “value for money” is generally well understood. There are explicit obligations on contracting authorities to secure value for money. As well as a “money” aspect, the phrase includes a “value” aspect. This can be drawn widely and include value in terms of climate change, economic and social development. We would therefore encourage the Government to adopt a new test along these lines which does not bring with it the “baggage” of the EU phraseology.
*Gebroeders Beentjes BV v. State of the Netherlands Case 31/87
See Andrew's earlier articles on the Green Paper