Best Value Analysis

I have participated in the process of awarding many contracts. Most times it is fairly straightforward and easy to identify the winner. Sometimes though it can be tough. I remember several years ago I performed a very complicated Best Value Analysis (BVA) in which I used the labor hours proposed and the cost to identify the average rates for each persons on the team. One bidder for that project only had a couple people and another proposed an army, so it was a complicated affair.

I recently finished another BVA and I am very happy with the process and formula I used to identify the best value. First, in the solicitation we were careful to identify that the award would be made based on Best Value and that the Technical review would be 65% of the score while cost would be 35%.

Then we completed the technical review, and let's just say that we hypothertically had:

• Offeror A - Technical 90 points - Cost $600K
• Offeror B - Technical 85 points - Cost $500K
• Offeror C - Technical 80 points - Cost $450K
• Offeror D - Technical 75 points - Cost $400K

Just for fun, take a second here and pick who you think the Best Value offeror will be.

In this hypothertical, let's set the Independent Government Cost Estimate to $350K. So everyone is over the IGCE. To get the cost into alignment that will allow me to integrate it with the technical I needed to figure out a way to get it to a 2-digit number that rewarded the offerors closer to the IGCE. I thought about a percentage of the IGCE, (proposed cost / IGCE) would work, but it went the wrong way. As costs got further away from the IGCE the score increased.

But if I took the inverse of that, then it worked well. As such I used the formula, 1 / (proposed cost / IGCE) = Cost Score

Using my examples above, I have:

• Offeror A - Technical 90 points - Cost Score 58
• Offeror B - Technical 85 points - Cost Score 70
• Offeror C - Technical 80 points - Cost Score 78
• Offeror D - Technical 75 points - Cost Score 88

With this I have all the invormation I need to combine my cost analysis and technical analysis to perform my best value analysis. The formula looks like:
(Technical x .65) + (Cost Score x .35) = combined score

When I do this I find that the offerors' final scores are:

• Offeror A - Technical 90 points - Cost Score 58 - Combined Score 78.8
• Offeror B - Technical 85 points - Cost Score 70 - Combined Score 79.75
• Offeror C - Technical 80 points - Cost Score 78 - Combined Score 79.3
• Offeror D - Technical 75 points - Cost Score 88 - Combined Score 79.55

Offeror B had the highest combined score, and is the Best Value.