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OCR for page 190
H-1 APPENDIX H Training Tool Overview Background and Industry Trends Methods Implementation Procurement Methods Fixed-Price Best-Value Sole Source Sealed Bidding Selection Price Price and Other Key Qualification Considerations Considerations Considerations Historically Public Sector Historically Public Sector - Typically Fixed-Price Typically Negotiated - Open Bidding Prequalification Processes -

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H-2 Best-Value Definition A procurement process where price and other key factors are considered in the evaluation and selection process to enhance the long-term performance and value of construction. Industry and Legislative Trends Private Sector Negotiated Procurements FAR Part 15 Contracting By Negotiation Revised ABA Model Procurement Code (MPC 2000)

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H-3 Industry and Legislative Trends (cont'd) Various State Statutes Addressing Best-Value Federal Agency Best-Value Procurement Experience Navy Army U.S. Postal Service Veterans Administration Federal Bureau of Prisons Use in Highway Industry 41 transportation agencies surveyed 27 had experience with best-value procurement 2 planning to use it

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H-4 Perceived Best-Value Advantages Reduction in cost growth Fewer life-cycle costs Time savings Innovation Quality Reduced procurement risk Best-Value Concepts Project Goals Evaluation Plan Best-Value Evaluation Best-Value Criteria Parameters Best-Value Best-Value Evaluation Award Rating Systems Algorithms

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H-5 The Best-Value Parameters Best-Value = A.x + B.x + P.x + Q.x + C.x Where: A = Cost B = Time P = Performance & Qualifications Q = Quality Management C = Construction Alternates x = Weighting Case Study Results Evaluation Criteria BV # of Contracts Parameter Used (50) Price Evaluation A.0 42 Project Schedule Evaluation B.0 19 Financial & Bonding Requirements P.0 35 Past Experience/Performance P.1 44 Safety Record (or plan) P.1 25 Key Personnel & Qualifications P.2 41 Utilization of Small Business P.3 30 Subcontractor Evaluation/Plan P.3 29 Management/Organization Plan P.4 31 Quality Management Q.4 27 Proposed Design Alternate D.0 26 Technical Proposal Responsiveness D.1 37 Environmental Considerations D.1 25

OCR for page 190
H-6 Best-Value Evaluation Rating Systems Satisficing Modified Adjectival Direct Point (Go/No Go) Satisficing Rating Scoring Simple Complex . Quick Requires Analysis . Bimodal Outcome Array of Outcomes . Assessment Accuracy not Critical Assessment Accuracy Critical . Best-Value Award Algorithms Fixed-Price Best-Value Sole Source Sealed Bidding Selection Price and Other Key Price Considerations Qualification Considerations Considerations Fixed Price - Best Proposal Meets Adjusted Weighted Technical Bid Criteria Criteria - Low Bid Adjusted Technical Tradeoffs Score Quantitative Qualitative Cost Cost

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H-7 Best-Value Framework One-Step Best-Value Procurement No benefit to using competitive screening system Select parameters that align with project goals Associate parameters with Select rating evaluation criteria (scoring) that add value to system/award project algorithm

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H-8 Two-Step Best-Value Procurement Step 1 Evaluation of performance/qualification parameter Similar to current administrative prequalification processes but more detailed Step 2 Evaluation of alternates, quality, cost, and schedule Same process as One-Step Best-Value Best-Value Project Screening & Selection Select projects with characteristics that provide significant benefit from using an alternative form of procurement. Once identified, develop the evaluation plan to confirm that the benefits are real, the negative impacts are minimal, and the risks are manageable.

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H-9 Best-Value Project Screening & Selection Tied to SHA Project Goals & Evaluation Criteria Project Characteristics Complexity Specialized expertise needed Opportunities for innovation Cost savings Quality enhancements Time savings Procurement Risk Best-Value Project Screening & Selection Tools Is the Are the process in SHA's and Industry's place to measure Is enabling experience levels best-value legislation in adequate? effectiveness? place? Can Will Is adequate measurable procurement staff available value be added affect small or to perform using disadvantaged evaluation? best-value? business?

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H-10 Implementation Examples of Selection Process Strategies to Implement Best-Value Procurement Example 1 Meets Technical Criteria - Low Bid Any selection process where the eventual award will be determined by the lowest priced, fully qualified and/or responsive bidder.

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H-11 Example 2 Value Unit Price (Weighted Criteria) The technical proposal and price proposal are evaluated individually. A weight is assigned to price and each of the technical evaluation factors, and the sum of these values becomes the total score. Example 3 Qualitative Cost - Technical Tradeoff Tradeoff analysis of price and technical or non-cost factors to arrive at best-value decision.

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H-12 Strategies to Implement Legislative Guidelines Model Specifications Agency Champion Industry Collaboration Pilot Projects Model Legislation Guide Spec Model Legislation ABA Model Procurement Code FAR Part 15-Contracting By Negotiation Flexibility in Procurement Approach Acceptable to project conditions Appropriate weighting of price and technical factors

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H-13 Model Specifications AASHTO Format: General Information, Definitions, and Terms Proposal Requirements and Conditions Award and Execution