Which approach is best for your bid?
Our recently released whitepaper on bid scoring was our most popular so far. It seems that many government, education, and private companies want to better understand bid scoring methodologies and how they can be applied to their needs. This article provides an overview of the seven most common bid methodologies. More detail of how to use them are included in The Complete Guide to Team Bid Evaluation.
Why Score Bids?
Many products and services sourced by public agencies involve complex technical requirements. To ensure a fair process and to select the best option for the organization, bid submissions are evaluated by teams. With multiple evaluators assessing numerous criteria, it’s critically important to pick the best way to conduct evaluations.
Fortunately, numerous evaluation methods have been developed, and the right one for your organization will depend on your project and specific needs.
The most common methods of evaluation take into account both cost and technical requirements. Criteria are established based on these, and in most cases, a score and weight are attached to each criterion.
Here are the most common methods used by private and government entities to evaluate proposals.
- Basic Scoring – In this method, each criterion is given a score, generally from 1-10. However, each criterion is given the same weight, which implies they are all equally important. This is generally not the case when evaluating proposals.
- Combination – This method gives a weight for each criterion by assigning it its own scoring scale. One criteria might have a maximum score of 10 and another might have a maximum score of 15. While this method allows the various criteria to be weighted differently, they are each measured on a different scale, which can become confusing.
- Distinct Weightings – This method allows each criterion to be measured on the same scale. Each also has a weight by which the score is multiplied to give it a total weighted score. This makes scoring easy and ensures that the most important criteria are given greater consideration.
- Hierarchical Structures – The bigger and more complex an RFP is, the more detailed the evaluation method needs to be. When there are many criteria, a hierarchical structure makes it possible to group the criteria together into categories and subcategories. Each of these categories and subcategories will be assigned a score and a weight relevant to its importance to the organization and the project.
- Lowest Cost Compliant – When the technical aspect of the RFP is particularly critical, this method allows for the proposals to first be evaluated based on the technical requirements of the project. For a proposal to move beyond the first stage of evaluation, it must receive a minimum pass mark based on the sum of the weighted technical scores. Any proposals that make it past this stage will then be considered based on the cost. The lowest cost provider will be awarded the contract.
- Price/Cost Per Point – With this method, the proposals are again first evaluated based on the technical requirements, and then these technical scores are averaged. This results in a combined quality score. Next, the proposals are evaluated based on the cost/price per quality point. Generally, the provider who has met the minimum technical and quality criteria and offers the lowest cost will be awarded the contract.
- Best Value – With this method, the technical and cost criteria are each given a weight. For instance, cost might be 20 percent and technical 80 percent. This way, the technical criteria are given considerably more weight than the cost, which is the best scenario when dealing with products and services that are more complex in nature.
Ultimately, you will need to determine which method is best suited to the complexity of the project and the RFP. By defining the criteria ahead of time and giving each a score and a weight, you have the greatest chance of selecting the best supplier.
For a more in-depth discussion of bid scoring, download The Complete Guide to Team Bid Evaluation.