A Better BVA

A while back I wrote about how to conduct an objective Best Value Analysis. One of my friends quickly caught the flaw in my formula and called me on it. In that example, and in the real case that it was based on, all of the proposals were over the Independent Government Cost Estimate. But it breaks down if one or more proposals are under the IGCE.

I am working on another big round of proposals so it was time to consider this formula once again so that I don't have to try to figure out the process in the middle of proposal review. Thus below i will walk you through my new formula with the goal of making the award of a contract as transparent and fair as possible. But you might have to grab a cup of coffee because it is somewhat tedious.

First, you have to make sure that you are in a BVA type of solicitation. Your solicitation must include the language of "...price and non-price factors..." If you have that language then you are working on a best value award. I would recommend language similar to this in the solicitation:

Award will be made by using price and non-price factors. Those factors will be 70% based on technical merits and 30% based on price.

When we come out of the Technical Evaluation we will have something like this:

• Company - Technical Score
• ABC - 90
• DEF - 85
• GHI - 80
• JKL - 75
• MNO - 72

Then the cost side of the proposal is revealed and we learn how much each of these will cost:

• Company - Tech - Cost
• ABC - 90 - $500,000
• DEF - 85 - $420,000
• GHI - 80 - $385,000
• JKL - 75 - $370,000
• MNO - 72 - $280,000

The next step in the process is to identify the Price Factor score. For our purposes let's say the IGCE is $380,000. As you can see, 2 offerors are below the IGCE, so I have evolved the formula to accommodate. The first part remains the same:

If the proposed cost is higher than the IGCE:
1 ÷ ( Cost ÷ IGCE) = Price Factor

If the proposed cost is lower than the IGCE:
IGCE – Cost = x
IGCE + x = y
1 ÷ ( y ÷ IGCE) = Price Factor

• Company - Tech - Cost - Price Factor
• ABC - 90 - $500,000 - 76
• DEF - 85 - $420,000 - 90
• GHI - 80 - $385,000 - 99
• JKL - 75 - $370,000 - 97
• MNO - 72 - $280,000 - 79

So now let's integrate those Tech Scores and Price Factors to figure out the Composite Score and identify the best value to the government.

• Company - Formula - Calculations - Composite Score
• ABC - (90 x .7) + (76 x .3) = (63) + (22.8) = 85.8
• DEF - (85 x .7) + (90 x .3) = (59.5) + (27) = 86.5
• GHI - (80 x .7) + (99 x .3) = (56) + (29.7) = 85.7
• JKL - (75 x .7) + (97 x .3) = (52.5) + (29.1) = 81.6
• MNO - (72 x .7) + (79 x .3) = (50.4) + (23.7) = 74.1

As you can see, DEF would win in this scenario presenting the Best Value to the government.

What do you think?