Best Value Procurement Over Lowest Bid - Here’s Why

When it comes to procurement, the lowest bid has long been the go-to. It’s simple, it’s fast, and—on paper—it looks like you’re saving money. But here’s the thing: cheapest doesn’t always mean best.

Enter Best Value Procurement—a smarter, more strategic way to source goods and services. Instead of zeroing in on price alone, BVP considers the whole picture: quality, performance, risk, and long-term value.

So, why are more organizations ditching the race to the bottom and embracing best value? In this article, we’ll break down exactly why Best Value Procurement beats the lowest bid—every time. Whether you're in the public or private sector, it's time to rethink how you buy.

Key Takeaways

• Best Value Procurement (BVP) emphasizes overall performance and value, prioritizing quality and lifecycle costs over the lowest bid.
• Key components of BVP include tailored evaluation criteria, relative importance of factors, and proactive risk management to ensure the highest value project outcomes.
• Implementing BVP requires alignment with organizational goals, effective training for procurement teams, and a focus on continuous improvement to maximize procurement efficiency and effectiveness.

What is Best Value Procurement?

Best Value Procurement (BVP) is a modern procurement method that shifts the focus from the lowest price to overall performance and value. Unlike traditional procurement approaches, which prioritize cost reduction, BVP focuses on overall value and performance. It’s not just about how much something costs upfront—it's about what you're getting in return over the full lifecycle of a project. Will the vendor deliver quality? Are they reliable? Can they reduce risk or bring innovation to the table? These are the kinds of questions BVP is designed to answer.

At the heart of this approach is something called the MEAT principle—short for Most Economically Advantageous Tender. MEAT means looking at the full picture: quality, technical ability, experience, delivery timelines, sustainability, and yes—price too. But price is just one piece of the puzzle, not the whole story.

What makes BVP stand out is how holistically it evaluates suppliers. Instead of awarding contracts based on the lowest number, it digs deeper—into past performance, technical expertise, and strategic project plans. It’s about selecting partners who can deliver real value, not just short-term savings.

And here’s the kicker: BVP doesn’t just help you get better results—it also supports long-term sustainability goals. It’s a smarter, more future-focused way to buy, especially in today’s fast-changing, quality-driven market.

Best Value vs. Low Bid Procurement

Low bid procurement has been the go-to method for decades. It’s simple: get three quotes, pick the cheapest, done. And in theory, it sounds efficient and cost-effective. But in reality? It often leads to shortcuts, delays, and unexpected costs down the road.

Here’s where Best Value Procurement (BVP) comes in as a smarter alternative.

The Low Bid Approach:

• Prioritizes the lowest upfront cost
• Often ignores quality, performance, or long-term impact
• Can lead to change orders, delays, or rework
• Encourages vendors to cut corners to stay competitive

You save money on paper—but that savings can disappear fast if the vendor underdelivers, misses deadlines, or needs constant oversight.

The Best Value Approach:

• Evaluates total value over the project lifecycle
• Considers technical capability, past performance, and risk
• Encourages innovation and long-term thinking
• Reduces costly surprises by focusing on quality from the start

Instead of asking “Who’s the cheapest?” BVP asks “Who can deliver the most value for our investment?” It’s a shift from short-term savings to long-term success—and it pays off.

So while Low Bid Procurement might win on day 1, Best Value Procurement wins in the long run—with better outcomes, fewer headaches, and stronger partnerships.

Key Components of Best Value Criteria

Best Value Procurement’s success relies on key components: evaluation criteria, relative importance of factors, and risk management. Together, these elements form a robust framework that allows effective vendor assessment, ensuring procurement decisions lead to the highest value and project success.

Evaluation Criteria

Best Value Procurement uses a layered scoring system to quantify evaluation criteria. This system prioritizes factors beyond price, like technical merit, assessed by how well a proposal meets predefined requirements and standards. It ensures vendors are evaluated based on their ability to deliver high-quality outcomes.

Expertise and past performance of suppliers are critical metrics in BVP. These factors influence future performance assessments, ensuring vendors with a proven track record are more likely to be selected. A detailed project plan is evaluated for feasibility and clarity, ensuring vendors provide a clear strategy for project execution and performance information.

Relative Importance of Factors

In BVP, key factors are weighted differently based on the project’s goals and requirements. This weighting reflects the importance of each sole factor to the project’s success. For instance, technical capabilities might be prioritized for a complexity engineering project, while cost-efficiency is critical for budget-sensitive initiatives.

The prioritization of factors in evaluations can reflect specific needs and risks associated with the procurement. Tailoring evaluation criteria to the project’s unique challenges ensures the selected vendor aligns closely with strategic objectives and delivers the highest value.

Risk Management

Risk management is a key component of Best Value Procurement. Identifying potential risks occur early allows organizations to develop effective mitigation strategies, enhancing project outcomes and reducing uncertainties.

Developing effective risk mitigation strategies throughout the procurement process ensures potential issues are managed proactively. This approach minimizes risk and supports the project’s best interest, leading to more successful and predictable outcomes.

The Process of Best Value Procurement

The Best Value Procurement process involves critical phases, including preparing solicitation documents, proposal submission and review, and the award decision. Each phase ensures procurement decisions are based on comprehensive evaluations, leading to the selection of vendors offering the highest value.

Solicitation Documents

Solicitation documents are vital in the BVP process. These documents define the framework for proposals and help vendors understand project expectations. They must clearly outline the project’s scope and requirements to ensure all vendors align with the project’s needs, serving as a living document throughout the process.

The relative importance of evaluation criteria must be clearly communicated to aid in vendor comparison. These documents typically include administrative details regarding procurement rules and programmatic descriptions outlining specific needs and objective services defined from bidders.

Proposal Submission and Review

During proposal submission, providing adequate time for bidders to prepare their proposals is essential. This period is usually recommended to be at least two months, allowing vendors to develop comprehensive and competitive submissions.

An evaluation committee assesses proposals using predefined selection criteria to determine the best value. The review process involves comparing submissions against the solicitation criteria and each other to identify strengths and weaknesses, ensuring the best vendor is selected.

Award Decision

The award decision process evaluates proposals based on best value criteria rather than solely considering the lowest cost. This comprehensive assessment ensures a contract award through a process of awarding contracts based on a balance of quality, cost, and other relevant factors, leading to more effective procurement outcomes.

Prioritizing value over price enhances overall procurement effectiveness. Award decisions are based on both price and non-price factors outlined in the solicitation, ensuring the selected vendor offers the highest overall value in pricing.

Benefits of Best Value Procurement

Best Value Procurement offers significant benefits, including enhanced quality control, promotion of innovation, and long-term value and cost efficiency. Incorporating a combination of price, competitive pricing, and non-price evaluation factors ensures procurement decisions lead to superior project outcomes and stakeholder satisfaction.

Enhanced Quality Control

Best Value Procurement ensures high-quality execution by focusing on performance rather than just compliance. This approach results in fewer issues and higher quality deliverables.

Successful BVP applications in construction have shown improved quality outcomes and lower incident rates during project execution. Emphasizing quality control through BVP fosters long-term project success and stakeholder satisfaction.

Promoting Innovation

Best Value Procurement incentivizes vendors to propose innovative solutions, fostering creativity and continuous improvement. Encouraging vendors to introduce creative solutions enhances the overall effectiveness of project delivery, leading to better outcomes and increased efficiency.

Valuing innovation in BVP drives continuous improvement and expands possibilities. This paradigm shift from traditional methods promotes a competition environment where vendors strive to outdo each other with innovative solutions, benefiting the projects and organizations involved.

Long-Term Value and Cost Efficiency

Best Value Procurement prioritizes long-term benefits over immediate total cost reductions, increasing overall efficiency. Assessing long-term benefits ensures better resource allocation and improved project success over time.

For instance, constructing a new educational facility using the Best Value procurement model resulted in a 15% reduction in overall project cost and time compared to traditional methods. This focus on long-term value and cost efficiency shows how BVP can lead to significant benefits and greater value for organizations and utilize the advantages of modern procurement strategies.

Case Studies of Successful Best Value Procurements

Real-world examples of successful Best Value Procurements highlight the approach’s effectiveness across various industries. With $6.5 billion worth of projects procured using the Best Value Approach and successful implementations in 41 industries, BVP has proven to be an efficient means to achieve project goals and enhance quality.

Government Contracts

The State of Alaska has successfully applied the Best Value procurement model, resulting in increased project completion rates and stakeholder satisfaction. Similarly, the Federal Aviation Administration adopted BVP to enhance project delivery and achieve better alignment with public sector standards, demonstrating this approach’s versatility and effectiveness in government contracts.

Government agencies increasingly adopt best value procurement to enhance project outcomes, focusing on quality and stakeholder satisfaction. Implementing BVP by these agencies has led to superior outcomes through improved quality control and project alignment, setting a benchmark for future government procurements.

Construction Projects

The Jomax Fire Station #7 project, procured using the Best Value Model, exemplifies successful BVP in construction. The City of Peoria’s Jomax Fire Station #7 won the 2007 FCM’s Station Style Gold Medal in Design Excellence, showcasing the high-quality and innovative design achieved through BVP.

Sustainable and green strategies and materials were used in the construction of Jomax Fire Station #7, highlighting BVP’s long-term value and environmental benefits. This project shows how BVP can lead to superior quality and service in construction.

Implementing Best Value Procurement in Your Organization

Implementing Best Value Procurement requires aligning procurement decisions with overarching goals, emphasizing training and development, and fostering continuous improvement.

Adopting BVP enhances procurement efficiency, achieves strategic objectives, and drives long-term success.

Aligning with Organizational Objectives

Best Value Procurement supports broader missions and goals by integrating procurement strategies with the organization’s strategic priorities. This alignment enhances the effectiveness of procurement efforts, ensuring resources are utilized effectively to achieve strategic goals.

Aligning BVP with long-term sustainability goals improves alignment between procurement activities and strategic objectives. This ensures procurement actions harmonize with the strategic aims of the organization, leading to enhanced organizational value and outcomes.

Training and Development

Effective training programs are critical for procurement teams to understand and implement Best Value Procurement strategies. These programs equip teams with the skills needed to maximize value in procurement decisions, ensuring successful BVP implementation.

Training programs should focus on understanding best value principles and effective implementation techniques. Educating procurement teams on BVP fosters a culture of innovation and continuous improvement, leading to better procurement outcomes.

Continuous Improvement

Regular assessments of procurement practices are essential for adapting to evolving organizational needs and maintaining high standards. Continuous improvement within BVP encourages ongoing assessment and refinement of practices, ensuring organizations adapt to changing requirements and maintain high quality and value.

Emphasizing continuous improvement supports technical merit, innovative solutions, and higher quality outcomes in procurement processes. This approach leads to long-term success and efficiency, ensuring that procurement practices remain effective and aligned with organizational goals.

Summary

Best Value Procurement offers a comprehensive approach to achieving superior procurement outcomes by focusing on performance, quality, and long-term value. By incorporating a combination of price and non-price evaluation factors, BVP ensures that procurement decisions lead to enhanced project efficiency and stakeholder satisfaction.

Embracing Best Value Procurement can transform your organization’s procurement process, yielding significant benefits and driving long-term success. By aligning procurement decisions with strategic objectives, investing in training and development, and fostering continuous improvement, organizations can maximize the value of their procurements and achieve sustainable success.

Frequently Asked Questions

1. What is the difference between best value procurement and low bid procurement?

The difference between best value procurement and low bid procurement lies in their evaluation criteria; low bid procurement focuses solely on the lowest cost, while best value procurement evaluates multiple factors, including quality and service, to determine the overall value of the bids. This approach allows for a more comprehensive assessment, ultimately benefiting the end user.

2. What are the disadvantages of best value procurement?

One significant disadvantage of best value procurement is the slower speed to market due to the thorough evaluation of bidders' qualifications beyond just price. This comprehensive assessment process can prolong decision-making and project initiation timelines.

3. What is Best Value Procurement?

Best Value Procurement (BVP) is an approach that emphasizes selecting vendors based on their performance, quality, and long-term value instead of merely the lowest cost. This method ensures that the selected vendors can deliver optimal results and sustainability for the project.

4. How does BVP differ from traditional procurement methods?

Best Value Procurement differs from traditional procurement methods by assessing vendors on quality, performance, and lifecycle costs rather than simply choosing the lowest bid. This comprehensive evaluation leads to better long-term value and efficiency in procurement decisions.

5. What are the key components of BVP?

The key components of BVP are evaluation criteria, relative importance of factors, and risk management, which collectively ensure procurement decisions maximize overall value.