Best Value Selection in Construction Procurement: Balancing Cost and Project Outcomes

For project owners, selecting the right contractor is rarely as simple as choosing the lowest price. Budget constraints matter, but so do factors like project complexity, risk management and long-term performance. Some projects demand an approach that goes beyond cost alone — one that accounts for technical expertise, innovative solutions and overall project delivery strategy. That’s where best value selection comes in.

Best value selection is a bidding method that considers both cost and qualitative factors when awarding a contract. In recent years, procurement methods have shifted to reflect this, especially for collaborative delivery models.

This article explores how best value selection is shaping procurement decisions, the challenges that come with it and the key considerations for structuring the selection process so that it delivers the best overall project value.

What is best value selection?

Unlike traditional low-bid selection, which prioritizes the lowest price, best value selection allows owners to evaluate a combination of criteria that contribute to overall project success.

While best value selection gives owners more flexibility to align selection criteria with project goals, it also raises important questions: How should qualitative and cost factors be balanced? What safeguards help deliver a fair selection process? And how can owners avoid common pitfalls that lead to unintended low-bid outcomes?

There is no single way to apply best value selection, as each owner defines it based on their project needs and priorities. Some heavily emphasize technical proposals and qualifications, while others place more weight on cost. The balance between these factors varies, but best value selection almost always includes a combination of:

• Qualifications: Experience, past performance and team expertise
• Price: Competitive cost considerations without defaulting to the lowest bid
• Innovation: Creative problem-solving, risk management, project approach and efficiency improvements
• Schedule: Commitments to meeting or exceeding project timelines

Whether the focus is long-term maintenance, construction safety or accelerated delivery, the right selection criteria help balance cost considerations without compromising quality or performance.

Best Value Selection vs. Low Bid

Unlike lowest-bid procurement, which awards contracts based solely on price, best value selection gives owners the flexibility to consider additional factors that impact overall project success. Many owners turn to this method when they want to prioritize elements like innovation, schedule efficiency or long-term operations and maintenance, rather than selecting a contractor based purely on cost.

Scoring methods for best value selection vary. Some owners assign a majority of points to technical proposals — for example, 900 points for qualifications and project approach and only 100 points for price. Others determine best value by subtracting the technical score from the price, so that qualifications play a significant role in contractor selection. The weighting of these factors depends on the project type and the owner’s priorities.

Best value selection is particularly useful for projects where cost alone doesn’t reflect the true value of the contractor. It allows owners to evaluate how a team will deliver a project — not just how much it will cost — resulting in better alignment with project goals and a greater likelihood of long-term success.

Challenges and Subjectivity in Best Value Selection

While best value selection provides flexibility in contractor evaluation, the process isn’t without challenges. Subjectivity in scoring can influence outcomes, especially when selection committee members have prior experience — positive or negative — with certain contractors. Even when clear scoring criteria are in place, personal biases can still affect evaluations, sometimes making it apparent that a selection was made based on preference rather than objective scoring.

Public owners are required to follow a fair and transparent selection process, but this can still be difficult to enforce. Scoring methods vary, with some owners using point-based systems, others relying on adjectival ratings and some employing simple checklists. To reduce bias, some owners delay reviewing price proposals until after technical scoring is complete, preventing evaluators from adjusting scores to justify a particular selection. However, even with these safeguards, inconsistencies still arise.

In some cases, scoring irregularities stand out — such as when a contractor consistently receives mid-range scores from most evaluators but is given an unusually low score by one individual. While best value selection is designed to balance cost and quality, maintaining fairness requires clear guidelines, well-defined scoring methodologies and careful oversight of the evaluation process.

The Evolution of Best Value Selection and Emerging Trends

Best value selection has evolved alongside broader shifts in project delivery methods. Lump sum design-bid-build has traditionally been the most common delivery method, emphasizing the lowest cost rather than best value selection.

Many owners are shifting toward more collaborative approaches like progressive design-build, construction manager/general contractor (CMGC) or construction manager at risk (CMAR). These methods allow for earlier contractor involvement, giving teams more opportunity to refine designs, address risks and improve overall project outcomes before cost is negotiated and construction begins.

This shift is largely driven by owners seeking greater collaboration and flexibility. By engaging contractors earlier in the process, owners can incorporate innovation, optimize schedules and mitigate risks before they become costly issues. Best value selection supports this approach by allowing owners to prioritize experience, technical expertise and project approach over cost alone.

At the same time, the criteria used in best value selection are evolving. While cost remains a factor, owners are placing increased emphasis on schedule efficiency, safety and long-term operational impact. For some projects, minimizing disruptions — such as reducing road closures or limiting downtime in critical facilities — carries more weight in the selection process than price alone. As best value selection continues to adapt, procurement strategies will likely place even greater focus on balancing immediate construction costs with long-term performance and risk management.

Strategies for Owners to Improve Best Value Selection Processes

A well-structured best value selection process helps owners select the right contractor while maintaining fairness and transparency. The following strategies can improve evaluation methods and help the process deliver the best overall project outcomes.

1. Define clear evaluation criteria and provide transparency.

When owners openly share how proposals will be scored — including the weighing of technical and cost factors — it reduces ambiguity and helps all bidders compete on a level playing field. Clearly defined criteria also minimize the risk of inconsistent scoring across selection committee members.

2. Balance price weighting to avoid a default low-bid outcome.

If cost carries too much influence in the scoring system, best value selection can unintentionally favor the lowest bid, defeating the purpose of a balanced evaluation. Some owners mitigate this by capping the number of points awarded for price or using a tiered scoring approach, where the lowest bid receives full price points and other bids receive a scaled percentage.

3. Use structured interviews or work sessions to assess collaboration skills.

Rather than relying solely on written proposals, some procurement teams engage shortlisted contractors in collaborative problem-solving exercises. These sessions allow owners to assess a contractor’s ability to communicate, collaborate and think strategically — critical factors that aren’t always evident on paper.

4. Set reasonable qualification requirements.

Rigid experience thresholds can unintentionally exclude qualified teams. For example, some owners require project leads to have managed a similar-sized project, even when the job itself may not justify such strict criteria. This can lead to firms listing key personnel who won’t actually work on the project just to meet requirements. By distinguishing between “must-have” and “nice-to-have” qualifications, owners can attract the right expertise without unnecessarily limiting competition.

5. Access and apply lessons learned from past projects.

Some past projects highlight the risks of a poorly structured best value selection process. For example, an upset amount can automatically disqualify any bid over a set price threshold. A contractor that bids just one dollar under the limit, could make them the only qualified bidder. As a result, technical proposals would never be evaluated, and the contract would be awarded based solely on price, which often results in project setbacks.

To avoid similar outcomes, owners should review past procurements to identify where scoring structures may have unintentionally favored cost over quality. By refining selection criteria based on real-world lessons, owners can create a more balanced and effective best value selection process.

How Owners Can Structure Scoring to Avoid Low-Bid Traps

To make sure best value selection does not default to a low-bid approach, owners need to carefully structure scoring criteria. The following strategies can help maintain a balance between price and technical considerations.

1. Limit price weighting to 10–30% of the total score.

Keeping price within this range prevents it from overshadowing qualifications and project approach. Lower percentages (closer to 10%) reduce the likelihood of selecting a contractor based primarily on cost, while still allowing price to factor into the decision.

2. Use graduated price scoring instead of all-or-nothing points.

A common issue with price scoring is that the lowest bid receives full points, while all others get significantly lower scores. A more effective approach is graduated scoring, where the second-lowest bid receives a percentage of the price points, and so on. This prevents drastic point differences between competitive bids and that technical proposals remain influential.

3. Pre-screen bidders with a Request for Qualifications.

A request for qualifications (RFQ) process helps owners shortlist only qualified contractors before moving into the bidding phase. This guarantees that all bidders meet baseline experience and performance requirements, reducing the risk of awarding a project to a firm that lacks the necessary expertise.

4. Define 'lowest responsible bidder' based on qualifications, not just price.

Some public projects require contracts to be awarded to the lowest responsible bidder, but how “responsible” is defined can vary. Owners can structure their criteria so that responsibility includes past performance, project approach and team qualifications—not just price. This approach allows for competitive pricing while assuring that the selected contractor is capable of delivering the project successfully.

By applying these strategies, owners can prevent best value selection from becoming a disguised low-bid process and instead create a framework that prioritizes both cost efficiency and project success.

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How Best Value Selection Shapes Project Success

Best value selection doesn’t just impact contractor selection — it impacts how a project is executed and delivered. A well-structured selection process helps set the foundation for collaboration, keeping owners and contractors aligned from the start. When the evaluation process prioritizes factors beyond cost, it increases the likelihood of selecting a team that can effectively manage risks, meet schedule demands and bring innovative solutions to the table.

Many owners are shifting toward more interactive selection methods, moving beyond traditional proposals and brief interviews. Workshops, working sessions and one-on-one meetings allow teams to engage in real-time problem-solving, offering a clearer picture of how they will work together throughout the duration of the project. By refining best value selection to focus on both qualifications and collaboration, owners can improve project outcomes and build stronger, more effective teams.

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