Best Value

1

• Best Value
• Public Works Procurement
• September 7, 2007

2
Existing Alternatives

• Design Bid Build
• General Contractor / Construction
  Manager (GC/CM)
• Design Build
• Job Order Contracting

3
Room for Improvement?

• JLARC Recommendations (2005)
• Finding 1
• Some agencies may be using GC/CM to overcome
  deficiencies in the Design-Bid-Build contracting
  method.
• Recommendation 1
• The Legislature, through the CPARB, should
  further analyze the implications of the low-bid
  requirement on capital construction projects.

4
Similar Trends Nationally

• Federal Executive Order (1994) establishing Best
  Value Procurement
• Place more emphasis on past contractor
  performance, and promote best value rather than
  simply low cost in selecting sources for supplies
  and services.

5
Similar Trends Nationally

• Who is using Best Value Procurement?
• Federal Government
• Several States
• Massachusetts
• California
• Florida
• Texas
• Minnesota
• And others
• Universities
• Private Companies

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What is a Best Value Procurement?

• Seeking Value
• Seeks to choose the provider offering the best
  combination of performance, qualifications, and
  price.
• Honoring the Public Trust
• Construction procurement should be consistent,
  open, competitive, and free of political
  influence.

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Best Value Procurement
II. Value Based
III. Negotiated-Bid
Best Value (selection based on qualifications,
past performance, and price) Less dependent on
detailed drawings and specs
Private Sector Process Owner selects
vendor Negotiates with vendor Vendor performs
Contractor minimizes risk
Performance
I. Price Based
IV. Unstable Market
Dependent on detailed drawings, specifications
and standards Requires high level of Management
Inspection
Owner minimizes risk
Price Competition
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Modifies DesignBidBuild Model

• Designer

Public Entity
Change in Selection Process Here
General Contractor
Sub-contractors
9
The BV Selection Process

• Establish a selection committee
• Issue a RFQ announcement
• Evaluate qualification submittals
• Establish a short-list
• Check references
• Conduct technical reviews
• Conduct interviews
• Receive Bids

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The BV Selection Process

• Two general approaches
• Trade-Off Analysis (more subjective)
• Formulaic Approach (more objective)
• Non-Price factors
• The RFQ submittal
• Reference checks
• Third party technical review
• The short-list interview

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Relative Importance of Price

• Three Categories
• Price is LESS important than the technical
  criteria
• Price is EQUAL in importance to the technical
  criteria
• Price is MORE important than the technical
  criteria

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Desired Results

• Better achieve project goals
• Budget
• Schedule
• Quality
• Lower the risk of construction claims
• Increase management efficiency

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Engineering and Architectural Services

• John Lynch
• 360 902-7227
• jlynch_at_ga.wa.gov