Best-Value Buys

January 1995

Best-Value Buys

Instead of awarding contracts solely on the basis of low price, agencies in recent years have considered other factors such as past performance, management capabilities and technical superiority. Such "best-value" source selections, which were heartily endorsed by the National Performance Review, are reserved for procurements of complex systems for which there are no defined solutions-not for straight commodity buys.

"Best-value procurements that rely on functional specifications instead of detailed task descriptions or equipment specifications give federal agencies the opportunity to buy innovative solutions," says Olga Grkavac, acting president of the Information Technology Association of America. Many of the federal best-value procurements to date have been for computers and telecommunications systems and services.

The Federal Acquisition Streamlining Act requires agencies to disclose all significant factors by which they select offerors. They are also allowed to apply greater weight to factors other than cost, as long as they disclose the degree to which they are doing so. RFPs can state that certain factors will be considered "significantly more important" or "approximately equal in importance" to other factors.

Another provision allows civilian agencies to award contracts to bidders other than the lowest one without having to have discussions with offerors.

Some critics charge that best-value procurements are difficult to evaluate and force agencies to use unreasonable amounts of discretion. Government executives must weigh benefits and decide which factors are more important. "The government should have the means to ensure that it gets the greatest value for the dollar, but [that type of] buying requires that evaluation criteria be clear and that procurement personnel be properly trained," says David Cooper, director of Acquisition Policy, Technology and Competitiveness issues at GAO's National Security and International Affairs division.

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