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

Juha Matti Lehtonen*, Kai Virtanen

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

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.

Original languageEnglish
Pages (from-to)164-179
JournalJournal of Public Procurement
Volume22
Issue number2
Early online date10 Mar 2022
DOIs
Publication statusPublished - 14 Apr 2022
MoE publication typeA1 Journal article-refereed

Keywords

  • Award criteria
  • Multi-criteria decision analysis
  • Procurement
  • Purchasing

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