Here's the "Valuable Part" of Best Value

Bid Poker

High bid, low bid, right bid: every "Established Solution" has just one cost...
Once a "solution" is established within a set of plans & specs, its resulting "cost" is likewise established. Other than human error during the "take off" or applying "proprietary management techniques", the bid-price from all players in a given market-place will be about the same. This is why we dis-trust bids too far outside the median bid-price: "something must be wrong"

Contractors buy material, labor, and management for about the same cost in any given market, and as a result of market competition, all have about the same mark-up. Sure, some may have a slight advantage due to expertise, volume, or exclusivity on materials or labor. But those are fleeting in a competitive free market: the law of competition allows everyone to catch everyone.


Therefore and based on this presumption, the opportunity for influencing the "Project Price" resides only prior to establishing the "solution"; before fixing the materials, systems, assemblies, and constructability of the design. "Bidding" a set of plans & specs doesn't make the project outcome more valuable, it just makes the owner and designer believe that the price of the project is a fair-market-price.

Since value is the proportional relationship between benefit and price, and the benefit is established by the fixed solution (the design), then price must vary in order to change the measure of value in all "bid" scenarios. But since (as shown above) all prices are the same in a bid scenario, value remains fixed upon completing the design, with no opportunity to increase it.  Once the solution is set within Plans & Specs that guide the intended outcome, little can be done to improve value. What's worse, builder(s) can not influence the solution or resulting value, as they had no participation with the development.

"Low bid" quibbles over a few non-determinative dollars, and too often seems like a roll of the dice. I think this strategy is also known as "liar's Poker", and usually evokes phrases such as, "Boy, they left a lot on the table" or "They must be 'buying' work to keep folks busy". Everyone knows there's just one right price, otherwise what's the point for making such statements.

A CM approach does just about the same thing. It involves bidding (usually), and quickly establishes a path toward a fixed design solution. A natural result of only "one team" working the problem. As such, a bit of time is spent discussing alternatives. But as the cost clock is ticking, alternatives are quickly dismissed, with no true investment of thought or passion being applied. Again, a natural result of money and time. Besides we all think our idea is this best idea (I'm proof of that).

If the Owner wants real Value, where do they look?
The answer is apparent: Look to an appropriate integrated-team from the free market, constrained only by budget and time. This is the same way we buy other product outcomes; like cars, lasik, and dinner-out tonight. You wouldn't get a frozen 'McNugget' from McDonalds, and have the Four Seasons "bid" to cook it, would you? No more than you would have Dr. 'John Hopkins' diagnose your brain condition, and have Dr. Phil "out-bid" Dr. Ruth to perform the surgery.

Owners need to master the process of "Competitive Problem-Based Contracting" for an integrated-promise from a properly qualified team that makes decisions, acts with professionalism and authority, and is responsible and accountable for the project outcome.

Beginning with a fixed budget from the owner, we know that A&E's establish design. We know that the design establishes the solution. We know that the solution establishes the cost. We know that builders convert cost to a guaranteed price. So challenging  designers (design) and builders (cost) to propose multiple integrated "Team-Based" solutions (3 short-listed teams), within the constants of a "Problem-Based Contract", for evaluation by the owner, is the Valuable Part of a Best Value process.

That "Best Value" Recipe Again

• Begin with 1-Part: Owner's Problem-Based RFP
• Add 3-Parts: Qualified Teams Working the Problem (ripe, firm, but not too hard)
• Fold in 2-Parts: Stipend or Honorarium
• Let rise for 45 Days
• Yields 3- Independent Solutions or Approaches
• Let cool to room temperature during Evaluation Process
• Select 1 for Serving: based on Best Value Criteria (Using The "3PQueue", link to the film)
• Serve to Stakeholders with a Side of Incentives (future post)