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Selecting the Optimum Proposal

Posted 4/17/2018

When evaluating responses to RFPs, evaluators will want to avoid getting trapped into selecting a less than optimum proposal just because that proponent tried to buy the work by offering a low price.

Most, if not all, RFP’s will contain the standard “privilege” clause concerning not necessarily accepting the lowest priced or any proposal. To be fair to all proponents, the evaluation must demonstrate why the lowest price proposal is not acceptable.

There are a number of ways to do this and your selection of method(s) must be clearly stated in the request document and adhered to in the evaluation.

A common method is to set a threshold value that must be achieved by each criterion or a minimum total value of all non-priced criteria. Because this method could be considered partly subjective, evaluators must clearly state why one proponent was scored higher or lower than other proponents. That reasoning should be evident in the proposals received.

Another method is to score pricing on a “price per point” scale calculated based on price offered/total of non-price points which determines price per point awarded. Price points are then determined by the formula lowest price per point divided by proponent’s price per point X maximum points allocated for price. Contrast this with the standard price relationship formula of lowest price/price offered X maximum points for price. The price per point formula will place greater emphasis on the scoring of non-priced criteria.

So why would you select a price per point method of evaluating price:

·        You have a variety of non-priced criteria to be evaluated;

·        The procurement scope of work is difficult to specify clearly or there are a variety of possible solutions that could work but vary in competencies; and

·        The optimum solution is likely to be more costly than other solutions.

Just for fun build a spreadsheet and try different scenarios or contact me directly for a sample workbook to play with.