Someone asked me to help them interpret the evaluation criteria for a US Government RFP. The evaluation criteria was very typical and worth discussing. I'd like to see if anyone agrees, disagrees, or can share insights on the conclusions I drew.
Here's what the evaluation criteria said:
Factor 1, Technical Approach, is significantly more important than Factor 2, Past Performance. The factor for Past Performance is significantly more important than Factor 3, Management Plan. The factor for Management Plan is significantly more important than Factor 4, Price. The Technical, Past Performance, and Management Plan factors, when combined, are significantly more important than Price.
The first thing I did was convert the criteria to numbers:
Tech+PP+MP > Price, therefore Tech+PP+MP = 60%, Price = 40%The result is the following estimate weighting:
Tech > PP > MP = 60%, therefore Tech = 30%, PP = 20%, MP = 10%
Tech: 30%Keep in mind that the numbers are guesses that could be off by a substantial amount, so take them conceptually and not precisely.
You'd never realize it from the convoluted language in the RFP, but price ends up being the most important section. It's just not the whole story.
You can have a lot of fun playing with the numbers and it's an exerciworth the exercise. For example, if you score all of the tech/pp/mp point and only 80% of the price points, your total is 92%. If the lowest price scores all of the price points and 90% of the tech/pp/mp points, they'd have 94%. If they only score 80% of tech/pp/mp then they'd have 88%. The result is that you can win without having the lowest price, but you need to go all out on the proposal to get the maximum score on tech/pp/mp and probably come in second on price.
But it also shows that you can win if you don't have the best past performance, provided that you have a good price and tech/mp score. Likewise, weakness in the tech/mp can be made up for with strong pp and the best price.
If the difference in tech/pp/mp scores between the first and second place bidders is within 10%, then a 10-15% difference in the price score will determine the winner. What ultimately decides the importance of price is the difference between the tech/pp/mp scores.
The difference in tech/pp/mp scores is determined by how they award the points during the evaluation. If they point score individual requirements, then who knows where they'll end up? But if, as is common, they use adjectives such as "good, acceptable, marginal, unacceptable" and apply them to the sections as a whole, there's a good chance the difference in scores will be close. The top two will usually all be acceptable, and the difference will be determined by how many "goods" they each get. With a limited number of factors in the evaluation criteria, the difference may be just one or two translating into just a few points. In which case, the actual win or loss will come down to price.
When you are outside the evaluation process, it may look like "all they care about is price." But the truth may be that they're just following a formula, and the formula makes the other factors "significantly more important than price."
If you know the formula and you know their procurement procedures (usually published) you may be able to anticipate their scoring. If your market will likely produce several strong bids, and the scores will be narrow, price will be more important. But if your tech/pp/mp score will be substantially higher than your competitors, price will not be as important. But you'll probably still need to keep your score within 10-20% of the lowest price. So how much price differential translates into a difference of 10-20% in evaluation score? I'll leave that as a homework assignment for you to research and discover since it may be different for every customer and possibly every bid.
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