Evaluation factors for source selections determine who wins the job. Companies that don't address the required factors in their bid document may be eliminated from the competition even if they're otherwise qualified to perform the job. The buyer’s list of factors specifies selection criteria used for evaluation of each bid. To be selected, companies bidding for work under a source selection must show how they meet or exceed the factors’ minimum requirements. Under federal government procurements, bidders must be informed of significant evaluation factors and their level of importance.
Source selection evaluation factors define important elements critical to a project's success and determine bidders' capability to do the job. U.S. Department of Defense guidelines for source selections define evaluation factors as discriminators tied to significant proposal requirements. When a buyer provides evaluation factors, each bidding company's answers are used to decide which bid offers the best value.
United States Code requires the evaluation of the bid price in all federal procurements, and bidders may learn how much value the buyer places on the cost as a part of the evaluation factors. In some cases, buyers what's more important: the lowest cost or a particular design feature. A source selection awarded on the basis of low cost may also require bidders to provide a description of a technically acceptable product before being selected. When the buyer's looking for the best value, it might make a trade-off during the evaluation, allowing a higher award cost in exchange for a technical design offering desired features.
According to Federal Acquisition Regulation 15.304(c)(2), all federal procurements must evaluate the quality of the product or service in a source selection, by looking at the bidders' past performance or by requiring each company to explain its technical and management experience. Evaluation factors may ask bidders to provide personnel qualifications to support a company’s capability to perform the work. Company proposal development teams use quality-related factors to determine what technical information to provide.
Risk and Other Factors
The buyer can also evaluate the risk of choosing a particular bid. Risk may be reviewed as a standalone factor or in conjunction with the technical design. If the project buyer is concerned with possible performance risk, bid instructions may request submission of a risk-mitigation plan for evaluation. Other source selection factors evaluate use of subcontractors, compliance with small business development plans or timelines associated with contract performance.
Documentation of Use
Evaluation factors for source selections are included in pre-award source selection plans, bid documents and award documents reflecting the decision of the selection officials. For Department of Defense source selections, a Source Selection Decision Document summarizes a best value award selection.