sellers praposals are evaluated based on the predifined criteria mention in evaluation criteria which gives the average

And the sources are selected based on the need of the buyer and qualification and eligibility of seller like,

understanding of need, risk, technical and management approch and so on

Source selection criteria is basic minimum criteria the sellers have to be fulfilled to get shortlisted. So this is the first step. e.g. Minimum 5 years of Industry experience, must be CMMi 5 compnay

Once you've shortlisted the sellers, you will run "Proposal Evaluation" on them, to decide which seller to award contract to.

Analogus example:

While buying a new flat, you would shortlist few flats on some criteria like should have good flat size (minimum 1100 sq ft), should have minimum 6 buildings in the society, should be in a good neibourhood.

Then, next, from among the shortlisted flat, you evaluate, which one is best.