Best-Value Contracting

Best-value contracting is a procurement process allows owners to consider other factors in addition to price in the award and execution of construction contracts. These key factors can be considered in the evaluation and selection process to minimize impacts and enhance the long-term performance and value of construction.

Traditionally, price has been the sole factor considered in selection of construction contractors by state departments of transportation. Best-value procurement allows other factors, such as qualifications, schedule, quality, and performance-based criteria, to be used in evaluation and selection. MnDOT and the FHWA do not consider the use of A+B, lane rental, or incentive/disincentives as best-value.

MnDOT currently has best-value authority for design-bid-build and design-build projects.

When to use best-value contracting

Useful when a project has unique objectives or challenges that may be difficult to meet using traditional low-bid procurement
Price must always be a factor in selection

Benefits

Can be useful to have Bidders identify risks and mitigation strategies Ideal for projects that significantly affect traveling public
Useful with pre-qualification of workforce or key leadership positions
First cost can be lowered through Contractor innovation

Drawbacks

Cannot guarantee the success of a project
Should not be used as a vehicle for restricting competition or applying arbitrary or unreasonable discretion in the selection of contractors
Will not resolve existing administration problems or remedy unclear specifications
May take longer than a traditional low-bid process, depending on how much time is provided to prepare proposals
May require additional agency effort for the preparation of bid documents and evaluation of proposals
May increase the costs to the industry to prepare and submit bids for the project
May increase the project cost if selection is based on higher quality or an increased effort by the contractor

Get started

Read our innovative contracting guidelines (Word)
Best Value Guide (Word)
Interested in using best-value contracting?: Email Kevin Kosobud