L1, QCBS and LCS: How the Evaluation Method Changes What You Should Quote

The evaluation method decides what your bid should optimise for. Bidders who discount as though every tender were L1 leave money behind on QCBS tenders, and bidders who invest in technical quality on an L1 tender spend effort that cannot be rewarded.

The three methods

L1, lowest cost. Among bids that qualify technically, the lowest evaluated price wins. Technical evaluation is pass or fail: exceeding the requirement earns nothing.

QCBS, quality and cost based selection. Technical proposals are scored, financial bids are scored, and the two are combined on weights stated in the notice. A higher technical score can beat a lower price.

LCS, least cost selection. A technical threshold is set. Among bids meeting it, the cheapest wins. Like L1, but with a quality floor that is higher than bare compliance.

The notice states which applies. See how to read a tender document.

What each rewards

Under L1, the only question after qualifying is price. Effort spent making a technical proposal excellent rather than compliant is effort that cannot score. Effort spent making sure the technical cover is *complete* is essential, because failing it means your price is never read. See single, two and three cover bidding.

The optimisation is: be certainly compliant, then be cheap.

Under QCBS, technical quality has cash value. How much depends on the weights. Where the notice gives technical a substantial weight, a strong technical proposal can carry a price premium.

The optimisation is: work out what a technical point is worth in price terms, then decide where to spend.

Working out what a point is worth

The arithmetic is worth doing rather than eyeballing.

Take the technical and financial weights from the notice. Understand how the financial score is computed, which is commonly the lowest bid receiving full marks and others scoring in proportion.

Then ask: if I score ten points more on technical, how much higher can my price be while keeping the same combined score? That number tells you whether investing in the technical proposal is worth it, and roughly how much.

On a tender where technical carries meaningful weight, the answer is often larger than bidders assume, and it changes the bid strategy from discounting to differentiating.

What the technical score is made of

QCBS notices set out the scoring criteria, typically covering firm experience, key personnel, methodology and approach, and sometimes local presence or past performance.

Two implications:

Scoring is against stated criteria, so a proposal should be written to address them explicitly and in their order. A brilliant proposal that does not map to the criteria scores poorly.

Personnel usually carry substantial weight, which means the CVs are a scoring document rather than an annexure. Named individuals with relevant, evidenced experience score; generic role descriptions do not.

Where this interacts with pricing

Under any method, the price has to cover the financing costs of a government contract: EMD held, guarantee commission and margin, retention, and the payment cycle.

What changes by method is how much room you have above cost. Under QCBS with a strong technical score, more. Under L1 against a field of competent bidders, less, and the discipline is to know your walk-away price and hold it.

Reverse auctions

Some tenders conclude with a reverse auction after financial opening. An auction converts even a QCBS-style process into a price contest at the end, so the walk-away price matters regardless of method.

Reading the field

Whichever method applies, past award data tells you what this buyer has accepted before. On L1 tenders that is close to a reserve price. On QCBS tenders it tells you whether the buyer actually uses the technical weighting or awards to the cheapest compliant bid in practice.

See reading award data before you bid and the intelligence module.