This is another innovation in the bidding process designed to improve quality in government projects.
It is probably reasonable to assert that everyone in the construction and development industries agrees that awarding projects to the low bidder is less than ideal.
Often a low bid is the result of poor estimating or the use of materials that only minimally meet specifications. Private owners are not obligated to accept the lowest bidder if they specify that other factors will be considered in awarding the contract.
This is not normally the case in government projects where cost considerations and transparency in the bidding process are considered essential. Pre-qualification of potential bidders is designed to ensure that bidders have the construction and financial expertise to manage a project. Unfortunately, the prequalification process is often cursory and does not achieve its goal.
Philadelphia has adopted “best value” procurement for complex projects. As Edward Seglias and Zachary D. Sanders explain in their article in Construction Law Now, “the City’s Procurement Commissioner can permit a City contract to be awarded pursuant to the ‘best value’ standard only after the City Department has made a detailed recommendation to the Procurement Commissioner.”
A scoring system is used to evaluate the relative merit of each bidder based upon both traditional and non-traditional criteria. Traditional criteria include the technical and management experience of the bidders. Non-traditional criteria include the value the bidders’ proposals will provide for minority groups and low-income neighborhoods. The bidders’ reputation for quality are a key consideration.
Philadelphia’s “best value” procurement procedures appear to be thorough and structured to ensure that the Procurement Commissioner receives the detailed information he or she requires to make an award.
Other governmental entities throughout the country will be following Philadelphia’s experiment. If it works well, it will be emulated.
“Best Value” Procurement Takes Hold in Philadelphia: What it Means for the Construction Industry, Edward Seglias and Zachary D. Sanders, Construction Law Now, January 22, 2108.