Options for Evaluating Design-Builder Proposals - Design-Build for Water and Wastewater Projects - page 218

Table 17-5. Quantitative cost-technical tradeoff award algorithm

Incremental
Price Increase

Incremental
Score Increase Proposer Price Proposal Technical Score

Team A $4.0 M 300 -- --

Team B $4.3 M 400 +8% +33%

Team C $4.4 M 405 +3% +1%

In this example, Team B would have been selected, because the incremental score
increase of 33 percent was high relative to a small price increase of 8 percent.

Qualitative Cost-Technical Tradeoff

The qualitative cost-technical tradeoff method uses a qualitative ranking of proposals
based on a comparative analysis of items that can be similar to those in the quantitative
methods previously discussed. The project is awarded based on which proposer offers
the best-value for the proposed scope. This award algorithm is allowed by federal agen-
cies under the Federal Acquisition Regulation (FAR). The award decision consists of an
evaluation, comparative analysis, and tradeoff process. This method relies primarily on
the judgment of the procurement official to compare the advantages offered by the dif-
ferent technical and price proposals. The ultimate award decision must represent rational
and independent judgment, must be based on a comparative analysis of the proposals, and
must be consistent with the solicitation evaluation criteria (US Army 2001).

Fixed Price-Best Proposal

The fixed price-best proposal system is sometimes called Design-to-Cost. In this approach,
the owner establishes a maximum price or a fixed price for the project, and the design-
builder develops a technical proposal based on that price. The proposers submit a
statement with their technical proposal that they agree to perform the work within the
specified price. The award is based only on the evaluation of the technical proposals. The
design-builder with the best technical proposal is awarded the project.

SUMMARY OF EVALUATION METHODS

The wide variety of methods available can appear to make the design of a procurement
approach complex; however, when the owner considers which approaches align with the
individual project goals and project characteristics, the choice is often obvious. When
selecting a procurement approach, the owner must first consider the project goals and
then consider the characteristics of the owner, project, and market.
The procurement system design must consider evaluation criteria, evaluation rat-
ing systems, and award algorithms. Project goals drive the procurement system selection.
Owner, project, and market characteristics influence the evaluation criteria. For example,
when the owner wishes to select the team with the greatest potential for success and the