5 Considerations to Make Besides Price in a Best Value Procurement
As procurements become more complex, Best Value Procurement contracting has become increasingly popular amongst state, local, and educational organizations. Lowest responsible bidder contracting may save governments money in the short-term, but best value contracting accounts for long-term cost-savers created by niche expertise, durability, sustainability, and more.
To then execute these requests for proposals well, procurement professionals need a reliable and accessible way to evaluate suppliers on these non-price considerations. Past performance in these areas has always been the best indicator of future success. But in the traditional RFP process, that key reference check step comes at the very end.
Access to peer reviews at the beginning of one’s supplier research process gives key insights before the invitation to take place in the RFP even occurs. By browsing candid reviews of specific suppliers, you can see how well-matched a supplier’s strengths are to your specific contract needs.
We’ve gathered real supplier reviews that reflect key considerations other than price. What non-price factors are important to your government?
1. Are there terms and conditions you need to adhere to?
Perhaps your agency has strict delivery windows for essential goods, or a sustainability metric you need to adhere to. The future ‘cost’ of delayed access to generators during an emergency or poor air quality is paid for upfront by awarding the contract to a reliable supplier.
Peer reviews can give insight into the supplier’s ability to meet personalized expectations, like in this reviewer’s yearly medical supply bid:
Our yearly medical supply bid has terms and conditions that cover pricing and delivery, and [the supplier] makes sure they comply during the contract period. Deliveries are within 5-7 days of ordering. We have had no issues with invoicing, nor with anything else. They are a very good company to work with.
2. Would your project benefit from any niche specialties?
Especially for a complex procurement – building a new transit system, for instance – selecting a vendor with niche expertise in that area can save a ton of headache and cost in the long run. If they have a proven track record in that area, they’ll be able to anticipate challenges that could save thousands or even millions in future repairs and delayed timelines.
This reviewer shares how supplier’s sustainability expertise has allowed them to successfully implement new green measures:
Recently we have begun to implement sustainability measures and I am blown away by [this supplier's] program. They have totally set the bar for all other major resellers. They make 'going green' so EASY!
3. What are the opportunity costs of not going with a higher priced supplier?
In procurement, opportunity cost accounts for the loss of a potential gain that would have accompanied choosing another supplier. If we had selected a better food vendor, would more students have enrolled in the public university? If we had paid more for the IT provider that worked faster, could our employees get more work done and create more value for the agency?
This reviewer shares how the amount of value this food provider creates is worth the added expense:
[The supplier] has spent countless hours with us and our end-users to make sure we can get everything we need on the contract, and they have even added products for us when we needed them to meet certain specs. I would highly recommend. They are slightly more expensive than some other distributors, but the value for that spend is much better.
4. What is the value of your time (and how much of it will this supplier require)?
As the saying goes, time is money. When researching a supplier for a best value contract, it’s important to factor in accountability and how much time your team will need to spend managing the contract. A vendor who is less expensive, but less reliable, may actually cost you more in the long run versus a more expensive vendor that requires minimal managing.
For this reviewer, that loss of time was also accompanied with poor response time for service outages:
The service is habitually slow and always goes out. I have spoken with customer service on numerous occasions and all they would tell me is that the outages will last weeks.
5. How will this contract grow with us in the future?
While accounting for the durability of an office pen may not be worth your time, understanding how long you can expect student desks to last when purchasing for an entire school district just might be. Durability may cost more now, but it’ll create more room in the agency’s budget for years to come.
This reviewer shares:
They have all the supplies I need. If they don’t have it in stock, they can usually get it for me anyway. Their products are of commercial quality, and they last longer than the same products from other vendors.
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Published on Dec 10, 2020