Procurement method significantly affects your bidding strategy. Understanding whether a project uses low bid or best value evaluation helps you allocate resources, price competitively, and maximize your chances of winning.
Understanding Procurement Methods
Low Bid (Sealed Bidding)
In low-bid procurement, the contract is awarded to the lowest responsive, responsible bidder.
Key Characteristics:
- Price is the primary selection factor
- Technical evaluation is pass/fail
- Award to lowest priced qualified bidder
- Minimal negotiation opportunity
- Common for straightforward construction
When Used:
- Clear, detailed specifications
- Established methods of construction
- Multiple qualified bidders expected
- Price is primary concern
Best Value Procurement
Best value considers factors beyond price to determine the most advantageous proposal.
Key Characteristics:
- Multiple evaluation criteria
- Technical quality weighted against price
- May include interviews/presentations
- Negotiation is common
- Used for complex projects
When Used:
- Complex or specialized projects
- Quality/experience critical
- Innovation desired
- Life-cycle costs important
Comparison of Methods
| Factor | Low Bid | Best Value | |--------|---------|------------| | Primary focus | Lowest price | Overall value | | Evaluation complexity | Simple | Complex | | Proposal effort | Minimal | Significant | | Contractor differentiation | Limited | High | | Award predictability | High | Lower | | Negotiation | None | Common | | Post-award disputes | Lower | Lower (if done well) |
Low Bid Strategy
Keys to Winning Low Bid Projects
1. Accurate Estimating
- Thorough quantity takeoff
- Current pricing from subs/suppliers
- Realistic productivity rates
- Appropriate contingencies
2. Competitive Subcontractor Coverage
- Maximum subcontractor solicitation
- Complete bid day coverage
- Alternative subcontractor options
- Scope leveling accuracy
3. Efficient Operations
- Low overhead structure
- Efficient project delivery
- Strong subcontractor relationships
- Equipment cost advantages
4. Strategic Pricing
- Know your costs precisely
- Understand market pricing
- Balance volume vs. margin
- Consider project risks
Common Low Bid Mistakes
1. Bid Shopping
- Unethical practice
- Damages relationships
- Long-term consequences
- Often prohibited
2. Scope Gaps
- Missing specification requirements
- Uncoordinated subcontractor scopes
- Ambiguous bid inclusions/exclusions
- Claims potential
3. Underpricing
- "Buying" work at losses
- Unsustainable practice
- Leads to claims or default
- Damages reputation
Best Value Strategy
Understanding Evaluation Criteria
Common Evaluation Factors:
| Factor | Typical Weight | What's Evaluated | |--------|---------------|------------------| | Technical approach | 25-40% | Methodology, innovation | | Past performance | 20-35% | Experience, references | | Key personnel | 15-25% | Qualifications, experience | | Management plan | 10-20% | Schedule, quality, safety | | Price | 20-40% | Cost proposal |
Maximizing Technical Score
1. Demonstrate Understanding
- Show you understand the project
- Address specific challenges
- Reference site visit observations
- Connect approach to requirements
2. Highlight Relevant Experience
- Match experience to evaluation criteria
- Quantify results achieved
- Use similar project examples
- Include strong references
3. Present Strong Personnel
- Key staff with relevant credentials
- Clear roles and responsibilities
- Demonstrated team continuity
- Backup personnel identified
4. Develop Compelling Approach
- Innovative solutions
- Risk mitigation strategies
- Schedule optimization
- Quality assurance plans
Pricing Strategy in Best Value
Understanding Tradeoffs:
Best value procurement allows trading technical merit for price. A higher-priced proposal can win if technical advantages justify the cost difference.
Pricing Considerations:
| Strategy | When Appropriate | |----------|------------------| | Price competitive | Strong technical position | | Price aggressive | Need to offset technical weakness | | Price premium | Significant technical advantages |
Decision Framework:
- Assess your technical strength
- Understand evaluation weights
- Estimate competitor positions
- Price accordingly
Federal Procurement Approaches
Sealed Bidding (FAR Part 14)
Federal sealed bidding requirements:
- Publicized solicitation
- Time for bid preparation
- Public bid opening
- Award without discussions
Award Basis:
- Responsive to all material terms
- Responsible contractor determination
- Lowest evaluated price
Negotiated Procurement (FAR Part 15)
Federal best value approaches:
1. Tradeoff Process
- Technical quality vs. price
- Higher price may be justified
- Evaluation documented
- Negotiation common
2. Lowest Price Technically Acceptable (LPTA)
- Technical is pass/fail
- Award to lowest price acceptable
- Less common for construction
- Hybrid approach
State and Local Variations
State Procurement
States vary in their approaches:
Common Patterns:
- Traditional low bid for most construction
- Best value for design-build
- Qualifications-based for A/E services
- Alternative delivery methods growing
Examples:
| State | Primary Method | Best Value Authority | |-------|---------------|---------------------| | California | Low bid | Limited (design-build) | | Texas | Low bid | Expanding authority | | Florida | Low bid | Available for some | | New York | Low bid | Growing use |
Local Government
Municipalities often have:
- More flexibility than states
- Lower thresholds for formal bids
- Growing alternative delivery use
- Qualifications-based options
Alternative Delivery Methods
Design-Build
Often uses best value selection:
- Combined design and construction
- Technical proposals evaluated
- Price may be secondary
- Interview common
Construction Manager at Risk (CMAR)
Typically qualifications-based:
- Selected on qualifications/approach
- GMP negotiated after selection
- Fee competition common
- Relationship emphasis
Job Order Contracting (JOC)
Best value typical:
- Technical approach evaluated
- Coefficient pricing
- Multiple award common
- Task order competition
Competitive Positioning
Assessing Your Strengths
For Low Bid:
- Cost structure efficiency
- Estimating accuracy
- Subcontractor relationships
- Project delivery efficiency
For Best Value:
- Relevant experience
- Technical capabilities
- Key personnel quality
- Past performance record
Choosing Where to Compete
| Strength | Pursue | |----------|--------| | Strong technical, premium pricing | Best value projects | | Efficient, competitive pricing | Low bid projects | | Balanced | Either, strategy-dependent |
Improving Competitive Position
For Low Bid:
- Reduce overhead costs
- Improve estimating accuracy
- Develop subcontractor networks
- Increase productivity
For Best Value:
- Build relevant experience
- Develop technical expertise
- Hire strong personnel
- Document past performance
Evaluation Process Details
Low Bid Evaluation
Responsiveness Check:
- All required documents submitted
- Forms properly completed
- No material deviations
- Bid security adequate
Responsibility Determination:
- Financial capability
- Technical capability
- Past performance acceptable
- No debarment issues
Best Value Evaluation
Proposal Review:
- Technical evaluation team
- Scoring against criteria
- Written evaluations
- Competitive range determination
Discussions (if held):
- Clarification questions
- Deficiency identification
- Proposal improvement opportunity
- Final proposal revisions
Source Selection:
- Technical and price analysis
- Best value determination
- Award recommendation
- Documentation of decision
Common Evaluation Pitfalls
For Owners
- Poorly defined criteria
- Inconsistent evaluation
- Inadequate documentation
- Protest-vulnerable process
For Contractors
- Not understanding evaluation criteria
- Weak proposal writing
- Poor interview performance
- Mispricing based on method
Winning Strategies by Method
Low Bid Success Factors
- Know your costs - Accurate estimating
- Maximize coverage - Complete subcontractor bids
- Be responsive - Meet all requirements
- Price right - Competitive but sustainable
- Perform well - Build reputation for responsibility
Best Value Success Factors
- Understand criteria - Focus on what's evaluated
- Tell your story - Compelling narrative
- Prove experience - Relevant past performance
- Present well - Strong interviews
- Price strategically - Balance technical and price
Next Steps
Ready to improve your procurement strategy?
- Analyze your wins - What procurement types do you win?
- Assess capabilities - Where are you strongest?
- Target appropriately - Pursue matching opportunities
- Develop weaknesses - Build capability gaps
- Track results - Measure and improve
Related Articles
- How to Write Winning Construction Bid Proposals
- Bid/No-Bid Decision Making Framework
- Pre-Qualification Requirements for Government Contracts
Frequently Asked Questions
Which method gives better outcomes? Both methods can produce good outcomes when applied appropriately. Low bid works for straightforward projects; best value suits complex or quality-critical work.
Can I negotiate on low-bid projects? Generally no. Low bid procurement specifically excludes negotiation. What you submit is what you're bound to.
How do I know which method a project uses? The solicitation will specify. Look for language like "award to lowest responsible bidder" (low bid) or "best value evaluation factors" (best value).
Should I pursue projects using methods I don't usually win? Consider developing capability in both methods. Focusing only on one limits opportunities. Track results and adjust strategy.
Is LPTA best value or low bid? LPTA (Lowest Price Technically Acceptable) is a hybrid. Technical is pass/fail (like low bid), but within a best value procurement framework.
