Best-Value Based on Performance

Author(s): Magdy Abdelrahman

Report Date: September 2008

Report Number:   2008-40

Report/Product:  http://www.lrrb.org/pdf/200840.pdf (1.65MB)

Abstract:
The Best-Value procurement strategy is gaining interest from federal and state agencies. The strategy increases the value added to the project for each dollar added. This report discusses a new concept of Best-Value, that is; a rational and flexible model based on expected performance. The model flexibility is obvious in the selection of parameters, to be included in the contractor selection process, and in the determination of the parameter’s weights. The model rationality will be achieved through relating all awarded score to the agency’s expected performance. The establishment of the Best-Value model calls the past record of the contractor work for the agency as an indicator of qualification trend. Contractor Best-Value will be the base in selecting the most appropriate contractor that has the best qualifications for a given project. Data are collected from groups of experts in the Minnesota Department of Transportation and processed through the analytic hierarchy process (AHP) to establish the parameter weights. While this research assists DOTs in selecting the best contractor, the shared results are relevant to both academics and practitioners. A computer software “MnCAST” has been developed to help implementing the developed Best-Value system.