Best value procurement is a concept that takes into consideration a range of factors other than just price when awarding a contract Philip Salmeri told attendees at WEDA XXII.
A CPCM (Certified Public Contract Manager) and fellow of the National Contract Management Association Salmeri is a long-time practitioner and advocate of this method which he likens to making personal purchases. You don’t necessarily buy the cheapest car he said. Many other factors such as safety gas mileage and longevity take precedence and cost might be a lower priority.
It is a sophisticated complex approach to making an award decision and the challenges are to make sure the solicitation is open and fair and that the most important considerations are given proper weighting. Sometimes cost will be the most important factor he said while other times technical approach quality of equipment past performance or management might carry more weight.
The best value procurement idea has gained ascendancy as a result of the acquisition reform initiatives instituted by the Clinton administration. The military services have used it extensively and have extended its use since then though it had its genesis in the 1970’s in research and development.
Some Corps of Engineers districts are considering using the concept and at least one dredging contract has been awarded using this approach.
The bid solicitation will include a technical evaluation plan that sets the rules as to how the decision will be made said Salmeri. This ensures that all offerors know how each factor will be weighed in making the award. A technical evaluation team then evaluates the bids and then compares the conclusions. The Government then compares the competitors’ technical conclusions. The next phase then evaluates the price or cost proposal and determines if the technical differences are worth the cost differences and makes the award on this cost benefit tradeoff analysis. Conforming to the requirements of the RFP may not be sufficient to win an award. It depends on the competition.
The goal of the process is to make the best business decisions ensuring that the contractor will be able to perform the contract well Salmeri said.
The talk drew avid interest from listeners and one dredging contractor was enthusiastic in his approval. Right now all you need is a low bid and the equipment to be a Corps contractor he said. He felt that best value procurement would be a fairer process for long term dredging companies with high standards.
Philip Salmeri has more than 25 years of government contracting experience with the Navy and the Air Force as a negotiator contracting officer branch head program manager and source selection official. He has written and conducted an approved source selection course for the FAA’s Acquisition Management System (AMS) and presents seminars and workshops on acquisition reform and doing things smarter and faster. He is the author of Negotiations – Strategies Tactics and Countermoves.