When it comes to awarding healthcare contracts, you would be forgiven for believing that commissioners are always looking for the best price, especially in the context of increasingly tight public health budgets. So why does quality win over price? We look at weighting, ratios, legislative influence, and content.
At the broadest level, evaluation criteria tend to include the categories of ‘Quality’ (usually weighted around 60 – 70% of the score) and ‘Price’ (30 – 40% on average). Given that deviation from this split is unusual in public health contracts, it is a good indication of the emphasis on the quality portion in healthcare tenders nationally and, therefore, how much quality matters to commissioners.
Although price is certainly still a factor, by placing greater weight on Quality than financial components, commissioners prevent a race to the bottom in terms of price while boosting opportunities for tenderers to demonstrate their value and competency.
Even with individual weightings, Quality and Price are not separate. They work in tandem to create your overall score.
However, given that Quality is often weighted more heavily than pricing, the success of this section underpins the pricing component due to the Quality-to-Price ratio that commissioners consider during scoring to get more bang for their buck.
This means that, even when scoring maximum marks for price, an average score in the Quality section could easily cost you the contract.
Historically, public sector tenders seeking value for money have been known as the ‘Most Economically Advantageous Tender’ (MEAT). Tenderers may mistakenly assume that this means the cheapest financial packet. A change of wording in new legislation aims to correct these misinterpretations and demonstrate the importance of Quality elements.
The New Procurement Bill (expected to get royal assent over 2023 for implementation over 2024) replaces MEAT with the ‘Most Advantageous Tender’ (MAT). This seems like a minimal change at first glance, but it carries far-reaching implications.
Amending this phrasing, alongside giving commissioners more flexibility in defining their evaluation criteria, paves the way for higher weighting on Quality and social considerations. This may reflect anything that is important to the commissioner but could commonly include added value, community involvement or environmental initiatives. Consequently, we expect an even greater prioritisation of quality in the future.
While the pricing portion of a bid may allow you to show off your cost efficiencies to the commissioner, it does not tell them who you are. The Quality section allows you to showcase yourself as a provider, establish a memorable identity, push your unique selling points, and allow your win themes to shine through.
Likewise, while proper use of the Quality section is advantageous, failing to present yourself well will reduce your scores; the content and calibre of the writing must both be excellent. As such, since Quality usually has the highest weighting, poor written performance significantly limits chances of being awarded the contract.
While we certainly recommend that our clients be diligent with the pricing portion of bids, in our experience, quality is key.
If you’d like to know more – get in touch with us today.