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Develop Proposal Evaluation Strategy

The proposal evaluation strategy defines the overall approach for evaluating submitted responses to the request for proposals (RFP). The proposal evaluation strategy:

Forms the general framework to establish the value sought in the purchase

Sets the direction for the overall evaluation process

Specifies the priorities for the project and its critical success factors

Defines the processes and proposal evaluation factors used to assess supplier proposals

The proposal evaluation strategy shapes the project; it sets the direction of supplier selection and the subsequent contract. Supplier proposals are rejected or selected based on the evaluation. A detailed evaluation strategy, based on relevant key proposal evaluation factors, is needed to understand a supplier's proposal and assess what the impact would be on the Postal Service if the supplier is awarded a contract. Including inappropriate proposal evaluation factors in the proposal evaluation strategy will cause problems during actual proposal evaluation.

The Client and Contracting Officer develop the proposal evaluation strategy, which should include the following:

Best value definition

Proposal evaluation factors

Proposal evaluation process

Best Value Definition

Defining best value is the process of establishing quality, prices, and availability that provide the best overall benefit to the Postal Service. Obtaining best value is the goal of every Postal Service supplying activity and the basis for award of Postal Service contracts. In order to develop the proposal evaluation factors, a definition of best value for a particular purchase should be established before the solicitation process.

A best value definition is made by the Purchase/SCM Team, subject to applicable review and approval by the Client and the Contracting Officer, and considers market research, purchase planning, and price analysis.

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Proposal Evaluation Factors

It is essential to determine the measures of comparison that will be used for the proposal. The proposal evaluation factors include:


Critical success factors

Priorities of the requirements

The proposal evaluation strategy must be consistent with the objectives (e.g., best value, supply base optimization) of the Postal Service, the critical success factors (e.g., technical factors, timing, and resources) of the project, and the sourcing strategy. The proposal evaluation strategy must also reflect the priorities of the requirements.

The list of relevant proposal evaluation factors, and the associated weighting factors, will vary by product or service and must address all areas that will be considered in determining best value. Proposal evaluation factors must be determined by the Purchase/SCM Team before issuing the request for proposals (RFP). Risk of successful performance should almost always be considered as a performance evaluation factor. It may be included as a separate proposal evaluation factor or as an element of other factors. The Proposal Evaluation Team uses the evaluation factors to evaluate proposals.

Proposal evaluation factors may include:

Supplier's understanding of the requirement

Supplier's superiority of technical approach

Supplier's assumptions

Supplier's managerial and organizational descriptions (including, where appropriate, its subcontractor plans)

Supplier's personnel and resources available for the project

Supplier's delivery and scheduling

Supplier's experience (i.e., relevant past performance) and capabilities (includes scope of services, maintenance, ability/experience of supplier's organization with similar agreements, customer liaison, financial)

Supplier's financial information

Other supplier information, such as information attained in a supplier survey that contains referral list of customers, number of employees, credit references, and compliance violation history (if any).

RFPs must include a description of the proposal evaluation factors, how they will be evaluated, and the relevant importance of price or total cost to the factors. Suppliers must also be made aware that best value to the Postal Service will be the basis for selection. Proposal evaluation factors play two roles: 1) They help clarify the Postal Service's objectives for a particular purchase; and 2) They help suppliers develop their proposals.

The proper weighting of the proposal evaluation factors is essential to effective evaluation; proposal evaluation factors should represent the elements that are critical to the purchase's success. Using too many proposal evaluation factors should be avoided because it can unintentionally level evaluation scores (as when high scores for less significant proposal evaluation factors offset low scores for more important proposal evaluation factors).

Many forms of scoring systems, from qualitative to quantitative, are suitable for proposal evaluation; however, some are more suitable than others, depending on the situation. The selected scoring system should be simple and practical.

When developing the proposal evaluation strategy, the following activities must be completed:

Identify the stakeholders (Purchase/SCM Team, Proposal Evaluation Team members)

Define roles (who determines proposal evaluation factors, who performs evaluation)

Define guidance for evaluators evaluating the proposal (weighting factors, scoring system)

Define process for communications with potential suppliers, including briefing and debriefing

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Proposal Evaluation Process

The proposal evaluation process depends on the scope and complexity of the project; large-scale projects may require an in-depth strategy range, whereas smaller projects may need less. The following will have to be established to develop the proposal evaluation strategy:

Decision-making process

Financial, quality, risk assessments

How supplier assessment will be conducted

How supplier will present proposal (oral or written)

Procedures to be adopted for the proposal evaluation

Schedule for evaluation

Quadrant Approach

A quadrant approach classifies Postal Service purchases into four categories, depending on their impact on the Postal Service core competencies (noncore versus core) and complexities (standard versus custom). Depending on the quadrant, the proposal evaluation strategy will be structured differently (examples of this are illustrated in Figure 2.11).

Figure 2.11

Quadrant Approach

Figure 2.11 drawing showing four quadrants for figure 2.9

Quadrant I: Custom/Noncore Purchase

The strategic approach regarding Quadrant I requires supply continuity, which can be achieved through managing the supply base and standardization. Proposal evaluation factors and weighting factors should emphasize selecting standard products and low-cost providers.

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Quadrant II: Custom/Core Purchase

The strategic approach for Quadrant II is striving for high-value-added relationships with suppliers, which can be achieved by increasing the role of selected suppliers in supply chain activities. Proposal evaluation factors and their relative importance should emphasize the suppliers' commitment to innovation (processes, features, and/or attributes) and market leaders with established positions and demonstrated competitive advantages in their products and services, because these are differentiating aspects.

Quadrant III: Standard/Noncore Purchase

The strategic approach regarding Quadrant III requires simplifying the purchase process, achieved by reducing effort and associated costs. Proposal evaluation factors and weighting factors should emphasize lowest-cost solutions, because the Postal Service will have little brand preference for the products and services in this quadrant and can choose from many options and many sources.

Quadrant IV: Standard/Core Purchase

The strategic approach regarding Quadrant IV calls for maximizing commercial advantage. This can be achieved by concentrating and centralizing business by aggregating organizational spend. The emphasis of the proposal evaluation factors and weighting factors should be on products or services at the leading edge of capabilities and innovation.

Other Topics Considered

Form Proposal Evaluation Team topic, Perform Solicitation-Related Activities task, Process Step 2: Evaluate Sources

Implement Proposal Evaluation Strategy topic, Evaluate Proposals task, Process Step 2: Evaluate Sources

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