There is an ongoing debate among procurement professionals about the change in the New Procurement Bill to the basis of assessing competitive tenders from Most Economically Advantageous Tenders (MEAT) to the Most Advantageous Tenders (MAT).
Is there a do-nothing option?
At first glance, some of you may say there is little difference. In many cases, this is likely to be true. This is because the Most Economically Advantageous Tenders (MEAT) can also be the Most Advantageous Tenders (MAT), and often is.
However, the shift to MAT is about enabling contracting authorities to take advantage of the freedom to award tenders on other evaluation criteria beyond purely economic advantage. This will support the Government in delivering its policies around generating greater social value, the environment and climate change, attracting local suppliers, and buying from small and medium-sized (SME) suppliers.
Under the 2015 regulations, the Most Economically Advantageous Tenders shall be identified on the basis of the price or cost, using a cost-effectiveness approach, such as life-cycle costing in accordance with Regulation 68. This may include the best price-quality ratio, which shall be assessed on the basis of criteria such as qualitative, environmental, and/or social aspects, linked to the subject-matter of the public contract in question. Some have argued that the disadvantages of MEAT is that the methodology could restrict the assessment of social and environmental considerations.
Under MAT, it is not mandatory to select the most economically advantageous tender. Price, therefore, would not have to be taken into consideration under the new “MAT” approach. However, this is only likely in practice to be relevant in exceptional circumstances. Price in some form is very likely to form part of the award criteria in most procurement processes. Therefore, as far as compliance with the New Bill is concerned, there is a “do-nothing” option. However this may amount to a lost opportunity.
Taking advantage of MAT
Doing nothing is not in the spirit of the new Bill and certainly not in-flow with the Government’s vision for the future of public procurement.
Procurement teams are most likely going to need to make a shift from MEAT to MAT in situations where:
- Contracting Authorities are looking to deliver greater social value and develop local niche markets. In such cases, removing or limiting the impact of price in a tender assessment and prioritising other criteria like localisation requirements will give teams more opportunity in relation to meeting these procurement aims.
- There is a desire to counter the potential bias towards larger suppliers that tend to be able to compete better on price (benefiting from economies of scale) than smaller organisations. MAT tender assessment should allow smaller players to be more successful where tenders are assessed based on the most advantageous offer beyond competitive pricing.
- Precise measurement of value in financial terms may be difficult, but there are other clear measures of the wider value that is desired from tenders.
How do procurement teams make the shift?
For many contracting authorities, the challenge will be in developing the necessary wider criteria for MAT assessments that can withstand scrutiny and be trusted by contracting authorities and the supplier markets.
Using price as one of the key determinants for awarding tenders is universally accepted and relatively easy to apply across a range of tenders. It is also embedded in procurement processes and it will require some degree of culture change to adjust to alternative assessment approaches.
Using other criteria as required for MAT assessments will also require organisations to establish various reliable measures of value for the various criteria.
In order to make the shift, procurement teams should:
- Assess their procurement pipeline for 2024 to determine which procurements will benefit from MAT tendering assessments.
- Develop frameworks for assessing tenders on the basis of MAT and ensure that such frameworks are robust enough to hold up to challenge and scrutiny.
- Develop guidance to support the use of MAT assessments for their organisations.
- Consider obtaining specialist advice around the risks involved in applying different criteria for assessment when using MAT.
What about the rest of the organisation? Staff who want to take advantage of MAT-based procurement should work with procurement teams to develop tender documentation to ensure there is good correlation between the tender specification and requirements, business needs, benefits, and the criteria included in the MAT assessments.
What should be on your organisation’s to-do list
Procurement leads in organisations should work with their leadership teams to:
- Assess the opportunities involved in applying MAT and where necessary, update their procurement strategies accordingly.
- Develop an action plan for moving from MEAT to MAT including, commissioning the development of assessment frameworks, processes, and associated templates to capture data and information for MAT assessments.
- Implement governance and assurance mechanisms to sign-off on adopting MAT assessments in larger, high-risk, and high-value procurements.
Our feeling is that the move from MEAT to MAT will in most procurements have little impact, however time will tell if contracting authorities take the opportunity to use MAT to procure for greater social value.
In2 the bargain 