Best value procurement
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Best value procurement (BVP) is a procurement method that looks at factors other than only price, such as quality and expertise, when selecting vendors or contractors.[1][2][3]
In a best value system, the value of procured goods or services can be simply described as a comparison of costs and benefits. A contractor or vendor is thus selected through a process of researching the vendors or contractors before a detailed project plan is made.[4]
Although BVP is a new procurement method, it does build on procuring and tendering according to the MEAT principle (most economically advantageous tender). The principle enables the contracting authority to take account of criteria that reflect qualitative, technical and sustainable aspects of the tender submission as well as price when reaching an award decision.[5]
The BVP approach is based on the conviction that minimizing risks or eliminating risks when allocated information is effectively used for a proper choice. This means the more information that is available and the better it is utilized, the better the future can be predicted and the fewer decisions or risks have to be made.[6]
BVP is based upon natural law. Rather than changing and manipulating people, one can understand the nature of transactions which then can be anticipated on using expertise to a maximum, with minimum risks and maximum value as a result.[7]
Typically values are assigned to factors such as price, past performance, schedule, and vision.[8]
These values are tabulated for each potential vendor or contractor and one will come out on top.[4]
Benefits of BVP
[edit]This system is claimed to be beneficial because it needs less decision-making, prepares for the future, and minimizes risk. Even if risks occur, they can be effectively controlled or managed.[8]
One of the most important aspects of best value procurement is looking at past performance. It has a vision and method for procuring and tendering in which the main focus is not price, but the performance of market parties.[6][9]
If a client is looking to build a five million dollar building, it is important to see if potential vendors have completed projects on such a scale. This will prevent clients from selecting vendors based on a low bid.
Best value procurement is allowed for US federal government projects under the Federal Acquisition Regulation and 10 USC § 2304.[10]
Uses of BVP Around the World
[edit]The BVP system was developed in the United States. This system has been practiced in many projects in the US as well as in other countries, such as the United Kingdom and the Netherlands.[11]
In the Netherlands, BVP is known as "prestatie inkoop," which translates as "performance procurement."[12]
Choosing factors for BVP
[edit]The process of choosing the factors to guide procurement toward best value has three stages: identifying the possibilities, choosing relevant factors, and assigning values, or "weights".[13]
References
[edit]- ^ "Best-Value Procurement Manual" (PDF). dot.state.mn.us. Minnesota Department of Transportation. 2013-05-02. Archived from the original (PDF) on 2017-08-29. Retrieved 2022-08-24.
- ^ Kelleher Jr., Thomas J.; Abernathy IV, Thomas E.; Bell Jr., Hubert J.; Reed, Steven L., eds. (2010). Smith, Currie & Hancock's Federal Government Construction Contracts: A Practical Guide for the Industry Professional. John Wiley & Sons. pp. 89–. ISBN 9780470539767.
- ^ The Facility Management Handbook Chapter 23: Operations and Maintenance–Contracting and Types of Contracts. AMACOM Div American Mgmt Assn. pp. 11–. ISBN 9780814430682.
- ^ a b "University of Alberta Transforms RFPs from Reactive to Proactive." Archived 2015-02-26 at the Wayback Machine The Legal Edge, n.d. Web. 30 Apr. 2013.
- ^ "Most economically advantageous tender (MEAT) | felp". www.felp.ac.uk. Retrieved 2018-05-29.
- ^ a b "The promise of Best Value Procurement: Governance and (in)stability of specifications within an innovative biogas project". Cleaner Production. October 2017 – via Science Direct.
- ^ Storteboom, Arnoud; Wondimu, Paulos; Lohne, Jardar; Lædre, Ola (2017-01-01). "Best Value Procurement - The Practical Approach In The Netherlands". Procedia Computer Science. 121: 398–406. doi:10.1016/j.procs.2017.11.054. ISSN 1877-0509.
- ^ a b "PBSRG | Performance Based Studies Research Group". pbsrg.com. Retrieved 2018-05-11.
- ^ "Journal for the Advancement of Performance Information & Value (JAPIV)." New CIB Encouraged Journal, n.d. Web. 30 Apr. 2013.
- ^ Kelleher, Thomas J. Jr.; LLP, Smith, Currie & Hancock (2009-01-27). Smith, Currie & Hancock's Common Sense Construction Law: A Practical Guide for the Construction Professional. John Wiley & Sons. pp. 63–. ISBN 9780470231364. Retrieved 26 May 2013.
{{cite book}}: CS1 maint: multiple names: authors list (link) - ^ "Best Value Europe". bestvalueeurope.com.
- ^ "Procurement Methodologies". simfoni.com.
- ^ "Best Value in Government Procurement" (PDF). nigp.org.