ART - Price-Quality Ratios In Value-For-Money Awards 2015

The purpose of this article is to propose a formula for public procurement practitioners to calculate price-quality ratios for incoming tenders. The suggested formula is quality divided by price (Q/P), which is considered to be the simplest, fairest, and most direct method. This formula eliminates the need for converting prices into points and ensures that value-for-money is calculated as the literal value-for-money, rather than a complicated or skewed calculation. Q/P produces independent results for each tender, so no tender is penalized for its position on the price curve. It also allows for the rejection of operators with poor price-quality ratios. The article provides clear steps for buyers to implement the Q/P formula, including determining the baseline quality score and dividing each tender's total quality score by its own price. The tender with the highest figure, representing the most value for money or quality per dollar, is the winner. The article acknowledges the inspiration from the European Court of Auditors in developing this solution.