Tom Tieghe

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Best Value Contracting
Innovative Source Selections
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Public Works Contracting Key Goals
QualityCost ScheduleSafetyFair Process
2 Basic Choices Low-Bid v. Best Value
Go w/Low Bid Price Alone Take Chances
Or Use BVC, Price AND Qualifications
-- Get Best Project at Best Price
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Defining Best Value Contracting
Contracts Awarded to Firm Offering Best
Combination of Price Qualifications To
Achieve Best Overall Results
Performance Qualifications Rated Through RFP
Process GC Subs
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Growing Use of BVC Process
Federal State Counties
Cities Schools Universities
Stadiums Utilities
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Source Federal Procurement Data Center/MCAA/CLRC
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State BVC Initiatives

• DE, NJ, KY, DC, HI, NM
• AL, UT, GA, TX
• CO, PA

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New Jersey School Construction Act
BVC Mandated for 12 Billion Program
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QUESTIONS
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Mechanics of BVC Systems
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Factors Impacting Success
Project Team
Expertise
Schedule
Project Success
Technical Approach
VE/PBS/DB
Contract Warranties
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Step 1 RFP Designed Issued
Bidders Informed Contract Award Will be Based
on Price . . . AND

• Past Performance
• Management Plan
• Project Staffing
• MBE Participation
• General Pre-listed Subcontractors

Evaluation Factors Relative Weight Spelled Out
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Evaluation/Performance Factors

• Management Plan
• Mgt. Team
• Technical Approach
• QC/Safety Programs
• Subcontractor Lists
• Key Subs . . .
• Pre-Listing Subs

• Past Performance
• Quality/Cost/Schedule
• Law Compliance/Safety
• MBE Participation
• Project Staffing Plan
• Staffing Sources
• Craft Training
• Safety Training

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Step 2 Contractors Submit Price Proposals
Technical Proposals

• Firms Provide Performance Data/Technical Info
  to Agency
• Prelisting of Subcontractors (Curtails Bid
  Shopping)
• Data Collected Evaluated From Other Sources .
  . .

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Step 3 Proposal Evaluation/Source Selection
Process
1. Tech. Evaluation Teams Review All Data 2.
Technical Proposals Scored/Rated Per RFP Factors
3. Price Proposals Opened/Prices Scored 4.
Best Value Selection Per Formula/Process

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Sample BVC Scoring Matrix Max. Q Score
40/Max. Score 60
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BVC Price Scoring Formula

• Price 60 Points Technical 40
• Co A/Low Bid Price Score 60
• Co. As Bid x 60 Co. B Price Score
• Co. Bs Bid (e.g., 50, 55,
  59)

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Sample BVC Scoring Matrix Max. Q Score
40/Max. Score 60
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QUESTIONS
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Driving Forces of BVC
BVC v. Low Bid
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General Goals of Public Procurement
Open Competition Fair Process
Efficient Process (Min. Agg.) MaximumValue
BVC v. Low Bid
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Why Best Value Contracting?

• Flexibility Factors
• Failure of Low Bid
• Best Value Success

driving Factors
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The Flexibility FactorValue-Added
ItemsschedulewarrantiesEnergy-EfficiencyProje
ct Design
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Limitations of Low Bid

• Qualifications Score 0 -100

O 30 50 70 100
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Failures of Low Bid System

• Poor quality
• Schedule Delays
• Cost Over-runs
• Changes/Claims
• High Risks
• Hassles Headaces

Construction Failure High Price, Low Value --
Plus Major Aggravation
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Results of Best Value Systems
Better Quality Faster Schedule Reduced
Costs Less Protests
New Data From Owners
U.S. Navy/GSA/States
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Additional QUESTIONS?Contact National Energy
Management Institute703.739.7100
www.nemionline.org