No, I haven’t decided to become a butcher and I’m certainly not horsing around! But I am frequently asked what does ‘MEAT’ stand for in the context of a tender. To answer the question, it stands for ‘Most Economically Advantageous Tender”. So, that’s answered that one – a nice, short blog post for this week!
OK, let’s put it into context. There are different ways to evaluate tenders, namely ‘MEAT’, as above, or based solely on price. So, let’s take two different scenarios:
Buyer 1 is looking to purchase 10 white Ford Transit 260 SWB Low Roof 2.2TDCi 140PS Panel Vans. (No, I never knew there were so many different variants of the transit van – their price list runs to 25 pages!). They have a list on the road price, excluding VAT of £20,916 as at today’s prices.
Buyer 2 is a Housing Association looking to provide 10 replacement roof coverings, not exceeding two storeys in height, including all tiles, tile laths and felt to match those of existing properties. Also included should be renewal of guttering, fascias, soffits and associated eaves guards, along with the renewal of lead flashings to chimneys.
So, which option would those two buyers select to evaluate tender responses?
Buyer 1 will probably be aware that there are several hundred Ford Commercial Dealers, any one of which could, theoretically, supply the vehicles. Whichever supplier is chosen, the vehicles will be identical, as they are being supplied to factory specification. Clearly there may be differences in the level of service provided, but these will be minimal as the buyer is focused on the initial transaction. Buyer 1 then, could legitimately opt to purchase solely on price. Which dealer will provide the most competitive purchase price for the transaction?
Buyer 2 is also anxious to secure a good price, but recognises that there are more variables in their transaction. A lower price could be delivered by a contractor who supplies lower quality materials, who does not have robust health and safety policies in place, who does not train their staff, who does not have appropriate management reporting systems in place, who does not make provision for the disposal of waste in an environmentally friendly manner and who does not have systems in place to monitor the work to ensure it is completed within the timescales. So, for Buyer 2, purchasing on price alone is very dangerous. For them, using the Most Economically Advantageous Tender option is more sensible. The evaluation will then take into account:
- health & safety processes to be used in the delivery of the contract
- experience of the company in delivering similar activity
- track record of delivery
- training and skills of the people they propose to use to deliver the contract
- identification and use of subcontractors (and their quality assurance), for example scaffolding erectors
- references relating to similar works undertaken
So in this scenario, a buyer may attach 50% of the overall score to the price, with the remaining 50% covering all other aspects detailed. To purchase on price alone could lead to problems later on, which is something all buyers are anxious to avoid.
So, next time you look at an opportunity and it will be evaluated using the MEAT methodology, hopefully it will make a little more sense!