Wednesday, August 14, 2013

How Much Are Bidder Qualifications Worth?

The San Antonio Housing Authority (SAHA) recently paid $94,000 more for a construction project because they took the second lowest price, instead of the lowest price.  The second lowest price had better overall qualifications.

Best Value Selection:  SAHA defended their action stating that their evaluation process was not based on the awarding to the low bid, but they assigned points to the bidders based on other factors, including the following, that would ensure they obtained the best value contractor:
    • Oversight and Planning
    • Scheduling
    • Safety and Warranty
    • Price
    • Strength of Section 3 participation
    • Contractor's Women and Minority Business Enterprise plan
Different from Bidder Responsibility:  Rather than just evaluating the qualifications of the low bidder based on bidder responsibility criteria, SAHA assigns points to each of these criteria and then awards to the contractor with the highest number of points, even though their price might not be the lowest price.  

Protest:  SAHA's practice recently led to complaints being filed by a contractor whose bid was $94,000 lower than the bidder awarded the project.  According to SAHA, the protesting bidder's scores on the non-price related factors were not as high as the contractor's who was awarded the project.

What is permitted?  Not all agencies are authorized to conduct a best value selection process using a Request for Proposals for construction projects.

More information:  Click here for more details about the SAHA controversy.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

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