Best Value: Making Sure Your Proposal Reflects Best Value, Not Just Lowest Price
For some people, the lowest price is the best value. After all, if your options include buying a suit for $100, buying a suit for $600, or buying a suit for $1,000, isn’t the $100 suit the very best value? Of course, in reality, the “best value” determination depends on what you are planning to do with the suit. If you are planning a one time use for the suit, the $100 suit may indeed be the best value. However, if you are investing in a suit as a foundation for a professional wardrobe, the more expensive suits might make more sense. Considerations might include the quality of the fabric, the type of thread used for stitching, whether there is a single or double hem, etc. If you are planning on wearing the suit once a week for the next year, the $600 suit is likely a better value, even though it is not the lowest price.
Understanding Best Value in Government Contracting
Best value determinations allow consideration of non-cost factors. These might include past performance, one’s reliability, proposals that include risk aversion or risk minimization, as well as innovation. These factors may be weighed equally against price, or they may be even more important than price. Best value considerations allow the government flexibility to consider intangibles beyond both price and the highest technical rating. In other words, a best value determination requires a tradeoff, where a higher price may be justified but the other factors an offeror brings to the table.
Understanding Lowest Price Technically Acceptable
In lowest price technically acceptable (LPTA) contracts, the first evaluation is on price. Next, the government reviews the proposal to ensure it is “technically acceptable.” In other words, the question is not “How good is this suit?” the question is, “Is this a suit?” If the answer is, “Yes, this is a suit, and we are looking for someone to make us a suit,” then the lowest bidder for making the suit wins the contract. There are no bonus points for innovation, such as a pop of color in the suit. The government gives no consideration to the past performance of each suit maker, to see who has delivered on time and as promised, and who has not. No time is spent debating the merits of the quality of the fabric or the durability of the thread.
Show Off Your Strengths
When submitting a best value proposal, play to your strengths. If the proposal calls for a project manager with a minimum of 5 years of experience, and your proposed project manager has 12 years of experience and a Ph.D., take a sentence or two to explain how this has added value. Carefully consider your past performance submissions. Make sure they reflect similar work, or are of a similar size, if that is required. If you have a project that was completed ahead of schedule, or faced and overcame an unexpected challenge, highlight those accomplishments. None of this matters in a LPTA contract, but, in a best value award, these achievements and skills could make all the difference.
Don’t Forget About Price
Added value is important, but not if your price is one and a half times that of the next lowest offeror. Agencies are permitted to select a proposal with a higher price, but they are required to document how or why the higher price is justified. This is a best value trade off analysis. Price is always a factor. The question is, do “the perceived benefits of the higher priced proposal” merit the additional cost? FAR 15.101-1.
Common Protest Grounds in Best Value Determinations
When best value awards are protested, there are two common themes typically. These include:
- The agency failed to recognize the technical superiority of the protestor’s proposal; or
- The agency overvalued the non-price factors of the awardee’s proposal.
You don’t have any control over how the agency evaluates your competition. You do, however, have control over how you present your own non-price factors, in particular your technical skills, innovation, reliability, abilities, and past performance.
While the government is mindful of the costs to the American people, in a best value determination, the bigger pictures is as important or more important than price. While experience, innovation, and reliability may be difficult to quantify, the potential for a successful contract is an important consideration.