inst/strategy_description/monetising_non-cost_score.md

In lajh87/tessa: Tender Evaluation Strategy Scenario Analysis

This method requires a judgement to be made of how much you are willing to pay for each percentage increase in the non-cost score. This is found by undertaking multiple sensitivity tests of dummy tender data, in particular, considering the difference in cost between a tender that achieves a non-cost score considered just acceptable (say 60%) and a tender that achieves a perfect non-cost score (100%). In practise, it is suggested the Department might be willing to pay in the region of 20%-50% more for the highest quality proposal than an acceptable proposal, but it is not obvious it should pay more than this.

Value for money is given by:

$$Cost - (Q * WTP)$$

Where:

Q is the non-cost score

WTP is the amount (expressed in NPV terms) you would be willing to pay for a 1% increase in technical score")

lajh87/tessa documentation built on July 6, 2019, 12:06 a.m.