Plan Contracting: Tools and Techniques

.5 Seller Rating Systems Seller rating systems are developed by many organizations and use information such as the seller’s past performance, quality ratings, delivery performance, and contractual compliance. The seller performance evaluation documentation generated during the Contract Administration process for previous sellers is one source of relevant information. These rating systems are used in addition to the proposal evaluations screening system to select sellers. .6 Expert Judgment Expert judgment is used in evaluating seller proposals. The evaluation of proposals is accomplished by a multi-discipline review team with expertise in each of the areas covered by the procurement documents and proposed contract. This can include expertise from functional disciplines, such as contracts, legal, finance, accounting, engineering, design, research, development, sales, and manufacturing. .7 Proposal Evaluation Techniques Many different techniques can be used to rate and score proposals, but all will use some expert judgment and some form of evaluation criteria Section 12.2.3.2. The evaluation criteria can involve both objective and subjective components. Evaluation criteria, when used for a formalized proposal evaluation, are usually assigned predefined weightings with respect to each other. The proposal evaluation then uses inputs from multiple reviewers that are obtained during the Select Sellers process, and any significant differences in scoring are resolved. An overall assessment and comparison of all proposals can then be developed using a weighting system that determines the total weighted score for each proposal. These proposal evaluation techniques also can employ a screening system and use data from a seller rating system. 12

12.4.3 Select Sellers: Outputs

.1 Selected Sellers The sellers selected are those sellers who have been judged to be in a competitive range based upon the outcome of the proposal or bid evaluation, and who have negotiated a draft contract, which will be the actual contract when an award is made. .2 Contract A contract is awarded to each selected seller. The contract can be in the form of a complex document or a simple purchase order. Regardless of the document’s complexity, a contract is a mutually binding legal agreement that obligates the seller to provide the specified products, services, or results, and obligates the buyer to pay the seller. A contract is a legal relationship subject to remedy in the courts. The major components in a contract document generally include, but are not limited to, section headings, statement of work, schedule, period of performance, roles and responsibilities, pricing and payment, inflation adjustments, acceptance criteria, warranty, product support, limitation of liability, fees, retainage, penalties, incentives, insurance, performance bonds, subcontractor approval, change request handling, and a termination and disputes resolution mechanism. A Guide to the Project Management Body of Knowledge PMBOK ® Guide Third Edition 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA 289