Choosing the most economically advantageous tender using a multi-criteria decision analysis approach

Abstract

Purpose

The purpose of this paper is to propose and test a multi-criteria decision analysis (MCDA) approach based on an additive value function (AVF) to select the most economically advantageous tender under European Union public procurement regulations.

Design/methodology/approach

A case study in which the AVF tender evaluation model is constructed by the procurement personnel and the results of the original, real-life public procurement evaluation model are compared to those discovered by the MCDA approach.

Findings

The AVF model captures the preferences of the procurement authority in a more reliable and transparent manner than commonly used evaluation models based on scoring formulas.

Practical implications

While commonly used in public procurement, relative scoring formulas can neither present the preferences of a procurement unit accurately nor do they enable bidders to draft bids according to these preferences. The proposed MCDA approach can achieve both.

Originality/value

The contribution of this paper is threefold. First, the successful construction of the AVF model with procurement personnel is introduced. Second, the model is used in an actual, real-life case. Third, a thoughtful comparison of features, structures and results of the AVF model and the evaluation model using scoring formulas is presented.

Citation

Lehtonen, J.-M. and Virtanen, K. (2022), "Choosing the most economically advantageous tender using a multi-criteria decision analysis approach", Journal of Public Procurement, Vol. 22 No. 2, pp. 164-179. https://doi.org/10.1108/JOPP-06-2021-0040