Best-Value Procurement Methods for Highway Construction Projects (2006) / Chapter Skim
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In essence, best-value procurement incorporates factors other than just price into the selection process to improve performance or achieve other specific project goals. Scope of Research NCHRP Project 10-61, Best-Value Procurement Methods for Highway Construction Projects, is designed to investigate best-value concepts currently in use in the construction industry, evaluate their relative effectiveness, and recommend a best-value system or systems that may be used in conjunction with a traditional design-bid-build delivery system for highway construction.
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Additionally, a national transportation agency survey was conducted to help define the state of best-value practice on highway construction projects. Finally, to benefit from the vast international experience with best-value procurement, results from the 2004 FHWA/AASHTO International Construction Management Scan research project were incorporated into this report.
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The competitive sealed bidding process can include multiple steps under certain circumstances, with the invitation for bids limited to those bidders whose initial submittals were determined to meet the owner's criteria. The Model Code also provides for a "competitive sealed proposal process" if owners determine competitive sealed bidding to be impracticable or not advantageous.
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Five best-value parameters and 27 evaluation criteria were initially identified in the literature and case studies. Four rating systems and seven award algorithms were also identified and defined.
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The research team then focused on refining the evaluation criteria and selection processes, and developing screening criteria to select appropriate projects for best-value procurement. The list of potential evaluation criteria was ultimately distilled to 14 based on relative frequency of use, potential for adding value to the process, and likelihood that use of a criterion would result in successful implementation.
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Case Study Population Best-Value Award Algorithms Final Best-Value Award Algorithm Categories Remarks Meets Technical Criteria-Low Bid Meets Technical Criteria-Low Bid or Low Cost Non-criteria evaluated using satisficing (go/no-go) system.
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Value Unit Price Cost Cost: A.0 X X X Time Schedule: B.0 X X X Qualifications Prequalification: P.0 X Past Project Performance: P.1 X X Key Personnel Experience: P.2 X X Subcontractor Information: P.3 X X Project Management Plans: P.4 X X Safety Record/Plan: P.5 X X X Quality Quality Management: Q.0 X X X Design Alternates Design with Proposed Alternate: D.0 X X Technical Proposal Responsiveness: D.1 X Environmental Considerations: D.2 X X Rating System Satisficing Adjectival or ModifiedSatisficing Direct Point Scoring
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BV Award Algorithm Selected Develop and publish Solicitation or RFP/RFQ No Yes Yes No Complex Simple Select Project BV Parameters & Evaluation Criteria Use Value Unit Price BV Award Algorithm Use Cost-Technical Tradeoff BV Award Algorithm Use Meets Technical Criteria -- Low-Bid BV Award Algorithm Use a one-step Procurement process Use a two-step Procurement process Figure S.2. Best-value (BV)
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The research has provided a flexible framework that can be tailored to a traditional procurement process or to a range of different procurement regulations. In this sense, best-value procurement is not designed to replace a low-bid system; a strict low-bid process will undoubtedly remain the norm, but agencies will have the option to incorporate additional factors in the selection process if deemed advisable -- in some cases using a competitive sealed bidding process that is essentially the same as low bid, and in other cases using a competitive sealed proposal process that offers a greater degree of flexibility to project owners to decide which proposal offers the greatest advantages.
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Refer to Chapter 3 of this report for further discussion regarding the Model Code and the issues likely to arise in the course of seeking new legislation. Step 3 -- Collaborate with industry in the implementation process The successful implementation of best-value procurement practices must include industry participation and comment; thus, it is prudent to reach out to owner and industry members affected by the change, explain the proposed changes, and obtain their insights, concerns, and ideas regarding the process.
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The project screening and selection tool developed for the implementation of best-value procurement can be used by state agencies to identify those projects that will make good pilot test beds and will furnish the project performance metrics that can be used to evaluate the results of the local pilot project program against a baseline of traditional projects. It is essential for the agency to maintain a long-term commitment, providing ongoing technical and troubleshooting support, and adjust and revise procedures as appropriate to overcome recognized problems and pave the way for more widespread implementation.
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S-12 Finally, the research team has recommended, as part of a long-term implementation strategy, that selected agencies champion the use of best-value procurement for pilot projects and use selected performance metrics to evaluate the results compared with similar projects using the traditional low-bid only procurement method.
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