Under QCBS, each bid gets a technical score and a financial score, and the two are combined using weights stated in the tender, such as 70:30. The lowest priced bid gets a financial score of 100 and every other bid scores in proportion to it. The highest combined score wins, so a stronger technical bid can beat a cheaper one.
What QCBS is and where it is used
Quality and Cost Based Selection (QCBS) is an evaluation method that rewards both quality and price. It is the standard method for consultancy assignments in central government, such as project management, design, feasibility studies and audits, and some departments use it for complex IT or technical services. The Ministry of Finance's manual for procurement of consultancy and other services describes it in detail, and state governments publish their own versions.
It differs from L1 evaluation, where every qualified bid is equal on quality and the lowest price wins. Under QCBS, the quality of your team, your experience and your methodology carry marks of their own.
Step 1: the technical score
The tender, usually called a request for proposal (RFP), lists technical criteria and the marks for each. Typical criteria are the firm's relevant experience, the qualifications of key personnel, the proposed methodology and work plan, and sometimes a presentation. The marks add up to 100.
The RFP also sets a minimum qualifying technical score. Proposals below it are rejected, and their financial bids are not opened. A threshold of 70 out of 100 is common, but always use the figure in your RFP. Some RFPs also normalise technical scores so that the best technical proposal gets 100 and the others are scaled to it.
Step 2: the financial score and normalisation
Only technically qualified bidders have their financial bids opened. The lowest evaluated price, written Fm, receives a financial score of 100. Every other bid is scored by this formula:
Financial score = 100 × Fm ÷ F, where F is that bidder's price.
A bid priced 25 percent above the lowest therefore scores 100 ÷ 1.25, which is 80. This proportional method is the one the central consultancy manual describes. Read your RFP's formula carefully, because a few tenders use a different scale.
Step 3: the combined score
The RFP states a technical weight and a financial weight that add up to one, for example 0.70 and 0.30. The combined score is:
Combined score = (technical score × technical weight) + (financial score × financial weight).
The bidder with the highest combined score is ranked first and invited to negotiate or sign. Splits of 70:30 and 80:20 are common in consultancy, but the RFP is the only authority.
A worked example
Take three firms bidding for a consultancy with a 70:30 split and a minimum technical score of 70. All three qualify.
- Firm A: technical 85, price ₹48 lakh. Financial score 100 × 40 ÷ 48 = 83.33. Combined (85 × 0.7) + (83.33 × 0.3) = 59.50 + 25.00 = 84.50.
- Firm B: technical 78, price ₹40 lakh, the lowest. Financial score 100. Combined (78 × 0.7) + (100 × 0.3) = 54.60 + 30.00 = 84.60.
- Firm C: technical 92, price ₹55 lakh. Financial score 100 × 40 ÷ 55 = 72.73. Combined (92 × 0.7) + (72.73 × 0.3) = 64.40 + 21.82 = 86.22.
What the example teaches
Firm C wins while quoting the highest price. Seven extra technical marks were worth more than a ₹15 lakh price gap. Firm B, the cheapest, finishes second, and Firm A loses to B by only 0.10 points.
Now ask what Firm A could have done. To beat C's 86.22, A needed a financial score above 89.07, which means a price below roughly ₹44.9 lakh (40 ÷ 0.8907). A cut of about ₹3 lakh would have won the job. Alternatively, three more technical marks at its original price would have lifted A to 86.60.
Change the weights to 80:20 and the gap widens: A scores 84.67, B 82.40 and C 88.15. The higher the technical weight, the less a price cut can buy. Model the stated weights for your own numbers before you fix a price, and use past award data to estimate where competitors will quote.
How to bid well under QCBS
A few habits matter more than anything else:
- Map every technical criterion to evidence. Marks are awarded for what you prove, not what you claim.
- Propose key personnel whose CVs match the stated qualifications exactly, with signed consent where required.
- Write a methodology specific to the assignment. Generic text scores poorly.
- Run the formula against two or three likely competitor prices before you decide your own.
- Do not chase the lowest price if your technical score is strong. You may be giving away margin for no gain.
Common questions
Does the lowest bidder win under QCBS?
Not necessarily. The lowest bidder gets the full financial score, but the winner is the bidder with the highest combined score. A stronger technical proposal can outweigh a higher price, as the worked example shows.
What is the usual technical to financial ratio?
Consultancy tenders commonly use 70:30 or 80:20. The exact ratio is set in each RFP, so always use the figure stated there.
What happens if my technical score is below the threshold?
Your financial bid is not opened and you are out of the evaluation. No price, however low, can rescue a proposal that fails the technical threshold.
Is QCBS used in GeM bids?
Most GeM bids are evaluated on L1, sometimes with a reverse auction. Some buyers run QCBS evaluation for services through GeM. The bid document states the method.