Getting the “Best Value” from Best-Value Procurements

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Getting the “Best Value” from Best-Value Procurements

Winter 2011

Transportation Sector Report

By Brandon J. Davis

Best-value procurements have proven to be a valuable tool for awarding design-build transportation projects. In contrast to low-bid procurements, best-value gives public owners the flexibility to choose what they will evaluate in a proposal. Public owners generally understand that best-value procurements can stimulate innovation and improve project performance over the long term. Nevertheless, owners don’t always get the most value possible because they don’t fully explore the options available to them in the process.

Determining Project-Related Goals: Before a public owner develops evaluation criteria, it should establish goals for the project, prioritize those goals and get buy-in from relevant parties. This will make the remainder of the evaluation process more effective.

Importance of Price vs. Other Factors: The first major decision owners typically make relates to the importance of price vs. all other factors. Generally the more weight an owner places on the price proposal, the greater the incentive for proposers to cut costs. In contrast, the more weight an owner allocates to all other evaluation factors, the proposer will be more likely to increase project quality and develop innovative solutions, which can be particularly beneficial for complex projects. Ultimately owners should look to the goals they set for the project to make this decision.

All Other Evaluation Factors: Design-build statutes often provide owners with latitude to determine what non-price proposal factors they will evaluate. Instead of being limited to evaluating proposed design concepts, owners can evaluate project schedules, aesthetics, project-management plans, maintenance of traffic, third-party impacts, quality-assurance and quality-control plans and a host of other items. Whether an owner should evaluate these items depends on the owner’s goals for the project. For example, if a proposed bridge will replace an existing bridge, expediting the opening of the new bridge may not be one of the owner’s main goals. As a result, the owner may not give the project schedule significant weight in the evaluation.

When deciding upon what factors to evaluate, public owners should determine if there are project-related costs they will incur or save that are not reflected in the price proposal. Similarly, owners may consider evaluating how the proposals will affect the owner-provided right of way for the project, which can significantly impact the owner’s project-related costs and savings.

Take Away: When owners set up best-value procurements, they should not simply follow precedent. Owners should spend time up front determining and prioritizing goals for the project and then fully explore what evaluation criteria and the weightings they could use to accomplish their goals. These steps will help ensure that owners get the most value possible out of their best-value procurements.

Brandon J. Davis is a Senior Associate in Nossaman LLP’S Infrastructure Practice Group in Los Angeles. He has experience as a key member of the legal team for the procurement and implementation of several high-profile design-build and public-private partnership projects, including the Port of Miami Tunnel and I-595 projects in Florida.