A Practical Guide with Simple Examples
Under PPR 2025, the exact weighted formula for price reasonableness is officially defined in the rules issued by the Bangladesh Public Procurement Authority.
The objective is clear:
Ensure fair, transparent, and value-based procurement instead of blindly selecting the lowest bidder.
Let’s break it down in a simple and practical way.
1️⃣ Price Reasonableness – Weighted Average Approach
Under PPR 2025, price reasonableness is assessed using a weighted average method that considers three key elements:
Official Cost Estimate (Estimate)
Average of Responsive (Valid) Bids
Prevailing Market Price Data
Conceptual Structure of the Formula
While the exact weights are specified in the regulation, the general structure looks like this:
Evaluated Benchmark Price (EBP) =
(Weight₁ × Official Estimate)
(Weight₂ × Average of Valid Bids)
(Weight₃ × Market Price)
The submitted bid is then compared with this benchmark to determine whether it is:
✅ Reasonable
⚠️ Abnormally Low
⚠️ Abnormally High
⚠️ Note: The example weights below are for illustration only. Always refer to the official rule for actual percentages.
📌 Example Scenario (Works Contract)
Suppose:
Official Estimate = BDT 100 lakh
Valid Bids = 92, 95, 105, 110 lakh
Average of Valid Bids = (92+95+105+110)/4 = 100.5 lakh
Market Price Assessment = 98 lakh
Assume Example Weights (Illustrative Only):
40% Official Estimate
40% Average Bid
20% Market Price
🧮 Step 1: Calculate Benchmark Price
Benchmark Price =
(100 × 40%) + (100.5 × 40%) + (98 × 20%)
= 40 + 40.2 + 19.6
= 99.8 lakh
👉 The reasonable price benchmark becomes approximately BDT 100 lakh.
📌 Step 2: Compare Individual Bids
95 lakh → Close to benchmark → Likely acceptable
92 lakh → Slightly lower → May require justification
110 lakh → Higher → May be considered expensive
This method prevents unrealistic low bidding and protects public funds from overpricing.
2️⃣ Weighted Criteria in Quality + Price Evaluation
Weighted criteria are also used when procurement is based on Quality and Cost Based Selection (QCBS) — not price only.
📌 Example: Goods Procurement (Quality + Price Method)
Suppose evaluation is based on:
Technical Quality = 70%
Financial Price = 30%
Total Score = 100%
🔹 Step 1: Technical Evaluation (70%)
| Bidder | Technical Score (out of 100) |
|---|---|
| A | 85 |
| B | 90 |
| C | 80 |
Apply 70% weight:
A = 85 × 70% = 59.5
B = 90 × 70% = 63
C = 80 × 70% = 56
🔹 Step 2: Financial Evaluation (30%)
Prices:
A = 95 lakh
B = 100 lakh
C = 90 lakh
Lowest price gets full 30 marks.
C (90) = 30
A = (90 / 95) × 30 = 28.42
B = (90 / 100) × 30 = 27
🔹 Step 3: Final Combined Score
| Bidder | Technical (70%) | Financial (30%) | Total |
|---|---|---|---|
| A | 59.5 | 28.42 | 87.92 |
| B | 63 | 27 | 90 |
| C | 56 | 30 | 86 |
🏆 Winner: Bidder B (Total Score = 90)
Even though Bidder B was not the lowest price, it offered the best overall value.
🎯 Key Takeaways from PPR 2025
✔️ Lowest price is no longer the only deciding factor
✔️ Data-driven benchmarking improves fairness
✔️ Market intelligence plays a role
✔️ Quality and value for money are prioritized
✔️ Abnormally low bids can be identified systematically
PPR 2025 clearly moves Bangladesh procurement toward a balanced, transparent, and value-based system.
If you work in procurement, evaluation committees, or bid preparation — understanding weighted evaluation is now essential.
