Best Value Contracting Adopted

The Assembly for the Matanuska-Susitna Borough recently awarded a contract using a procurement method new to the Borough yet recognized across the nation, especially with federal and state governments. It's called Best Value Contracting.

Russ Krafft, purchasing officer with the Borough, compares the process to a grocery shopper not always buying the brand with the lowest cost, but instead looking for the best value. "For years, spending wisely meant spending as little as possible, when it comes to public dollars," Krafft said. "But we're finding that the lowest bidder often ends up costing more through change-orders or work that doesn't last."

By contrast, Best Value Contracting awards projects to the contractor who offers the best combination of cost and skill, not just the lowest price. The Municipality of Anchorage and the state of Alaska procure contracts this way. Some ten states have passed Best Value laws, and federal agencies use Best Value Contracting for some 70 percent of federal construction. On Jan. 17, through Best Value Contracting, the Borough awarded a contract to Collins Construction Inc. for $3.3 million to build a ferry terminal at Port MacKenzie. Collins wasn't the lowest bidder.

The company's bid fell in the middle. Borough Mayor Tim Anderson sees the logic of Best Value Contracting. "What we're trying to do with Best Value Contracting is provide the residents of the Borough and taxpayers with the best product possible," Anderson said. Last October the Borough co-sponsored a conference on innovative reforms in public works contracting. Local attorney Helene Antel moderated. "Low bid was designed to protect against nepotism and favoritism," Antel said. "But it doesn't protect the public entity against having to rehire a contractor who performed unsatisfactorily over and over again," Antel said. "Rather than be a substitute for low bid, Best Value Contracting goes further. Price is still a factor, but it also looks at such things as their work history, their safety record, their history of change orders and delays," she said. Antel said Best Value Contracting is not based on gossip and rumor, but on criteria that can be quantified and measured.

She said the selection process is rigorous and ensures objectivity and fairness. For busy Borough project managers like Bob Bechtold, the new procurement tool means less oversight. Bechtold is managing three large projects, of which, the least expensive will cost $13 million. "Working with a quality firm could save up to a couple hundred hours of my time on a single project that otherwise would be spent on reviewing and inspection," Bechtold said. For more information contact Russ Krafft, purchasing officer, at 745-9639.