Assumes the owner's requirement is               Acknowledges that the owner may not have

perfectly known and the documents                perfectly communicated the requirement and the

perfectly communicate the requirement.          documents are not perfect.

Contractor bids on exactly what is in the         Contractors propose value added options that

documents.  Price is not aligned with               increase quality or minimize risk to align

owner's expectation on performance.               price with performance.

Supply chain (subcontractor) selection is         General contractor must align subcontractor

price based. Encourages bid shopping             price and performance to be successful.

after award.

Owner manages, directs and controls the         Contractor holds all parties, including owner,

work with no accountability when causing         accountable through contract and simple

risk. Owner causes most risk.                          reporting mechanism.

Price and performance out of alignment.            Price and performance is aligned according

Owner expects high performance but wants       to work plan developed by contractor.

the lowest price.

Owner subjectively rates contractor                   Contractor measures their own performance.

performance.

Best Value is a paradigm shift from traditional contracting in that it recognizes the vendor is the expert and the expert should have control of project delivery. To set the contractor up to be successful, risk management is emphasized as risk affects performance and ultimately customer satisfaction. A "risk" is anything that causes a deviation in cost, schedule or quality. Customer satisfaction is a rating on deviation from the owner's expectation. Price based systems rely on the Owner to manage risk, rather than the expert contractor. 

The PIPS selection process considers past performance, technical capability, risk management, value added proposals, interviews and price. With the exception of interviews, evaluation and scoring is conducted blind using non-subjective, dominant information. If there is no dominant differentiation between competitors, the low price is the best value. Preplanning is the last step before contract execution allowing the identified best value contractor to develop a work plan that clarifies "what is in" and "what is out" of the contract, and a risk management plan to define the impact if a risk actually occurs. These contract attachments, along with a simple weekly risk report, serves to hold the other parties - owner and architect - accountable to the contractor.

Using PIPS, the owner is able to identify the expert that can preplan the work, anticipate the risks and minimize them before they occur. Preplanning adds efficiency to project delivery. Rather than award at the low price and issue a 10 day notice to proceed, PIPS incorporates pre-planning to identify the risks, agree on a risk management plan and clarify scope, thereby minimize change orders, unnecessary transactions and decision making by the owner.