Choosing the most economically advantageous tender using a multi-criteria decision analysis approach. Issue 2 (10th March 2022)

• Record Type: Journal Article
• Authors: Lehtonen, Juha-Matti; Virtanen, Kai
• Is Part Of: Journal of public procurement. Volume 22:Issue 2(2022)
• Page Start: 164
• Page End: 179
• Publication Date: 2022-03-10
• Subjects: Procurement -- Purchasing -- Award criteria -- Multi-criteria decision analysis; Government purchasing -- Periodicals; Government purchasing; Periodicals; 352.53
• DOI: 10.1108/JOPP-06-2021-0040
• Languages: English
• ISSNs: 1535-0118

Abstract

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.