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Supplying Principles and Practices > USPS Supplying Practices Process Step 2: Evaluate Sources > Develop Proposal Evaluation Strategy
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
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.
It is essential to determine the measures of comparison that will be used for
the proposal. The proposal evaluation factors include:
• Objectives
• 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
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
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
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.
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.
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.
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.
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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