In the world of business, many organizations and companies request for proposals from various entities in order to select the bid that fits the needs of the business. Since businesses rely on different suppliers to provide them with goods, products, works, and services needed by the business, selecting the right bidder is important. In order to help the business with the selection process, a bid evaluation is necessary. What is an evaluation? An evaluation is a process of assessing something in order to determine the value or worth.

There are various types of evaluation methods and criteria that are used to effectively perform or conduct an evaluation. An evaluation is especially important in businesses mainly for the purpose of improvement. Below, you will be able to read about a bid evaluation, the benefits that it provides to the business, the things to consider when evaluating a bid, as well as the evaluation methods that you can use to conduct an effective bid evaluation. Samples and templates are also available should you need help in formatting and creating your document.

What Is a Bid Evaluation?

A bid evaluation is a process of assessing and examining a bid or proposal from various entities in order to determine the responsiveness, responsibility, and other considerations that will help the business select the right entity to provide them with goods, products, services, and other needs of the business. A bid evaluation is an essential process in every business to be able to determine whether a particular entity has the qualifications and resources that the company requires. After a bid evaluation has been performed and the business has selected the right bidder, a negotiation is done and a contract is created and signed by both parties.

Benefits of a Bid Evaluation

To help you further understand the benefits of conducting a bid evaluation, we have listed below a few of the benefits of a bid evaluation. The benefits are as follows:

  • A bid evaluation is beneficial for the business especially in the bid selection process, specifically when purchasing products, services, or materials.
  • A bid evaluation ensures that the business follows the right method, as well as using the various criteria that will help them make a decision that will benefit the business.
  • A bid evaluation allows the business to have all the necessary documentation as well as the information needed to get to a decision when selecting a bid.


Things to Consider When Evaluating a Bid

There are certain factors or considerations that a business will need to take into account in order to conduct an effective bid evaluation. The factors that one needs to consider are as follows:

  • Cost:
    • The cost of the products, goods, and services are one of the most important factors that one needs to consider when evaluating a bid. The cost also includes the delivery of the goods or products, the installation, transportation costs, and so on. It is important to understand the costs involved in the transaction.
  • Quality:
    • The quality is one of the most important factors to consider during a bid evaluation. An evaluation of the various goods, works, and services are essential in order to determine whether the quality meets the requirements of the business or organization.
  • Risk:
    • The risks involved should also be taken into account to be able to determine whether these risks can be prevented or avoided.
  • Sustainability:
    • Another factor that should be considered is the sustainability, specifically whether a bidder can sustain the business’s objectives and needs considering the economic, environmental, and social changes that can happen. This is important to ensure that the entity can adapt to various changes during the transaction.


Common Methods for Bid Evaluations

There are many different methods that can be used when conducting an evaluation. Depending on the type of bid, selecting the right method is important in order to have a fair process during the bid evaluation. Here are some of the most common methods that are used by businesses and organizations when conducting a bid evaluation.

  • Basic Scoring Method: In a basic scoring method, each of the criterion used to evaluate is provided a score, which typically ranges from 1–10.
  • Distinct Weightings Method: In this type of method, the criterion is measured based on a similar scale, which also has a given weight. This is multiplied by the given score in order to come up with the total weighted score. This method ensures the criteria with the most importance are given a higher consideration than those that are not.
  • Price/Cost Per Point Method: In a price/cost per point method, the bid proposals are evaluated based on the technical requirements of the business. The scores are then averaged to come up with the combined quality score. The cost/price per quality point is then identified through the proposal evaluation. The bidder that meets the technical as well as the quality criteria of the business and the one that has the lowest cost is awarded the bid contract.


The information that we have provided above will be useful in helping you when conducting or performing a bid evaluation for your business. Furthermore, the evaluation samples and templates available on our website will be useful to you should you need other types of evaluation forms. The evaluation forms available for download on our website include an employee performance evaluation form, product evaluation form, training evaluation form, and more. You can also browse through our website for other templates and samples.

Related Posts