Definition
Price Scoring Model
The formula converting tendered prices into marks.
Price scoring is the method a buyer uses to convert bid prices into a numerical score that can be combined with quality marks under the price-quality ratio. Several formula types are used across UK public procurement, and the specific one applied should always be stated in the ITT.
Common price scoring formulas
One widely used approach is 'lowest price scores maximum', where the cheapest compliant bid receives full marks and other bids are scored proportionally lower based on how much higher their price is, using a formula such as (lowest price ÷ bid price) × maximum score.
Another common approach uses percentage-difference bands, scoring bids according to how far their price sits from the lowest, the average, or a target price, sometimes with diminishing returns beyond a certain percentage gap. Some buyers also score against a fixed budget or pre-set price ceiling rather than relative to other bids.
- Lowest price scores maximum, others scored proportionally
- Percentage-difference from lowest or average bid price
- Scoring against a target or ceiling price set in advance
- Whole-life cost formulas incorporating running or disposal costs
What this means for pricing strategy
Because formulas differ, the same bid price can score very differently depending on the mechanism used and how competitors price. Suppliers should read the exact formula in the ITT before finalising price, and, where permitted, model a few pricing scenarios against it to understand sensitivity rather than pricing purely against gut instinct or the previous contract value.
Frequently asked questions
- What does 'lowest price scores maximum' mean?
- It means the cheapest compliant bid automatically receives full marks for the price element, and every other bid is scored lower using a formula that compares its price to the lowest one submitted. A bid 10% higher than the lowest typically scores noticeably below maximum.
- Is the price scoring formula always disclosed before I submit?
- It should be, as part of the published evaluation methodology, since buyers are expected to set out how price will be assessed in advance. If it isn't clear, raise a clarification question before the submission deadline.
- Can I win a tender with a higher price than a competitor?
- Yes, if the price-quality ratio weights quality highly enough and your quality score is sufficiently stronger, the combined weighted score can still exceed a cheaper competitor's total, particularly under ratios such as 70:30 or 80:20 favouring quality.
Related terms