12.4.1 Inputs to Source Selection

.1 Proposals. Proposals are described in Section 12.3.3.1.

.2 Evaluation criteria. Evaluation criteria may include samples of the suppliers previously produced products/services for the purpose of providing a way to evaluate their capabilities and quality of products. They also may includea review of the supplier´s history with the contracting organization. Evaluation criteria are described in Section 12.2.3.2.

.3 Organizational policies. Organizations involved in the project procurement typically have formal policies that affect the evaluation of proposals.

12.4.2 Tools and Techniques for Source Selection

.1 Contract negotiation. Contract negotiation involves clarification and mutual agreement on the structure and requirements of the contract prior to the signing of the contract. To the extent possible, final contract language should reflect all agreements reached. Subjects covered generally include, but are not limited to, responsibilities and authorities, applicable terms and law, technical and business management approaches, contract financing, and price.
  For complex procurement items, contract negotiation may be an independent process with inputs (e.g., an issues or open items list) and outputs (e.g., memorandum of understanding) of its own.

.2 Weighting system. A weighting system is a method for quantifying qualitative data to minimize the effect of personal prejudice on source selection. Most such systems involve (1) assigning a numerical weight to each of the evaluation criteria, (2) rating the prospective sellers on each criterion, (3) multiplying the weight by the rating, and (4) totaling the resultant products to compute an overall score.

.3 Screening system. A screening system involves establishing minimum requirements of performance for one or more of the evaluation criteria. For example, a prospective seller might be required to propose a project manager who has specific qualifications—for example, a (PMP®)—before the remainder of their proposal would be considered.

.4 Independent estimates. For many procurement items, the procuring organization may prepare its own estimates as a check on proposed pricing. Significant differences from these estimates may be an indication that the SOW was not adequate, or that the prospective seller either misunderstood or failed to respond fully to the SOW. Independent estimates are often referred to as should cost estimates.

12.4.2 Outputs from Source Selection

.1 Contract. A contract is a mutually binding agreement that obligates the seller to provide the specified product and obligates the buyer to pay for it. A contract is a legal relationship subject to remedy in the courts . The agreement may be simple or complex, usually (but not always) reflecting the simplicity or complexity of the product. Contracts may be called, among other names, a contract, an agreement, a subcontract, a purchase order, or a memorandum of understanding. Most organizations have documented policies and procedures defining who can sign such agreements on behalf of the organization, typically called a delegation of procurement authority.
  Although all project documents are subject to some form of review and approval, the legally binding nature of a contract usually means that it will be subjected to a more extensive approval process. In all cases, a primary focus of the review and approval process should be to ensure that the contract language describes a product or service that will satisfy the identified need. In the case of major projects undertaken by public agencies, the review process may even include public review of the agreement.