Does the Lowest Bid Price Evaluation Criterion Make for a More Efficient Public Procurement Selection Criterion? (Case of the Czech Republic)
Abstract
Through the institute of public procurement is allocated a considerable volume of financial resources. It is therefore in the interest of contracting entities to seek ways of how to achieve an efficient allocation of resources.
Some public contract awarding entities along with some public administration authorities in the Czech Republic believe that the use of a single evaluation criterion (the lowest bid price) results in a more efficient tender for a public contract. It was found that contracting entities in the Czech Republic strongly prefer to use the lowest bid price criterion.
Within the examined sample, 86.5% of public procurements were evaluated this way. Analysis of the examined sample of public contracts proved that the choice of an evaluation criterion, even preference of the lowest bid price criterion, does not have any obvious impact on the final cost of a public contract.
The study concludes that preferring the criterion of the lowest bid price within evaluation of public contracts characterised by their complexity (including public contracts for construction works and public service contracts) is inappropriate. Findings of the Supreme Audit Office related to inspection of public contracts indicate that when using the lowest bid price as an evaluation criterion, there may indeed be tendered a public contract with the lowest bid price, but not necessarily the best offer in terms of supplied quality.
It is therefore not appropriate to use the lowest bid price evaluation criterion to such an extent for the purposes of evaluating work and services. Any improvement to this situation requires a corresponding amendment to the Law on Public Contracts and mainly a radical change in the attitude of the Office for the Protection of Competition towards proposed changes, as indicated within conclusions and recommendations proposed by this study.