Why Union Construction
Best Value Contracting

Public works contracts in Wisconsin have historically been awarded on the basis of the lowest responsible bid. This requirement has often led to projects being done only on the basis of cost. This sounds good on paper, but in reality, it has led to sub-standard work being done on many projects. Because of this, many government agencies across the United States have begun to adopt alternative bidding procedures to improve the efficiency, quality and life-cycle costs of capital investments. Best Value Contracting is one of the most widely used alternative procedures and is gaining greater and greater acceptance as an alternative to lowest responsible bidding.

Best Value Contracting awards projects to contractors that meet the best combination of price and technical qualifications. This allows owners of projects to look beyond just price to make sure that the best contractor is awarded a project based on a number of factors that are not included on a price only comparison.

The use of Best Value Contracting, while rare in Wisconsin, is hardly new. In 2001, nearly 70% of federal construction spending was done with the use of BVC. Over 10 states have authorized the use of BVC, including New Jersey, which mandated that it be used for a new $12 billion school modernization program.

Projects using Best Value Contracting are conducted under standard Request for Proposal (RFP) criteria. It is subject to public advertising and open competition, just like traditional Lowest Responsible Bidder requirements. The RFP will list the technical evaluation criteria that will be used and identifies the points or weighting system that is used. Issues like staffing, training, safety history, apprenticeship, pension and health care provisions, and whether the bidder has complied with local, state and federal laws in the past are often used in the technical process. Price, of course, is also considered.

By emphasizing contractor performance as an issue as well as price, owners of projects get performance based accountability, as well as full and fair competition. This leads to reduced claims, protests and litigation, while promoting safety and skill training. For governments, it also allows for diversity initiatives to be included in the bid process. This allows governments to support positive societal impacts that benefit the community.

Public and private sector owners ought to consider the variety of options available when it comes to awarding contracts on construction projects. The traditional method of awarding contracts based on the lowest responsible bidder will work for many bids. However, in other cases, Best Value Contracting, Responsible Bidder options and Project Labor Agreements may provide an owner with the diversity of options that can guarantee the best value at the best price.