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Proposal Evaluation


Alternate Definition

Proposal evaluation is the assessment of a proposal to determine the offeror’s ability to successfully perform the prospective contract. It is also used to determine a fair and reasonable price for the contract requirement.

General Information

To conduct an effective evaluation, the proposal evaluation criteria must be clearly identified and defined in the request for proposal (RFP). Proposal evaluations must be conducted so the Government can select the proposal providing the best value to the Government. Best value can be determined using one of two methods: lowest price, technically acceptable or tradeoff. Proposal evaluation is also conducted for sole source acquisitions as part of agency preparations to assist agencies prepare for negotiations with suppliers.


Lowest Price, Technically Acceptable (LPTA). Award will be made to the offeror whose price is lowest among all proposals that were deemed to be technically acceptable.


  • LPTA does not permit trade-offs between price/cost and technical factors.
  • Determining best value using the LPTA method is appropriate when the requirement is not complex and the technical and performance risks are minimal. LPTA is suitable for acquisitions where service, supply, or equipment requirements are well defined and there is little difference among competing products or services.
  • The evaluation factors and significant subfactors that establish the requirements of acceptability must be set forth in the solicitation. The solicitation must specify that award will be based on the lowest evaluated price of proposals meeting or exceeding the acceptability standards for non-cost factors (FAR 15.101-2).
  • If factors such as labor mix and level of effort are important evaluation factors, the RFP must require that these areas be clearly quantified and addressed in the proposal.
  • LPTA is not appropriate for cost type contracts.


Tradeoff. The tradeoff method is used when it is in the Government’s best interest to consider award to other than lowest priced offeror, or to other than the offeror given the highest ratings for technical, management, past performance, or other non-cost/price factors. Under the tradeoff approach, the Government evaluates both cost/price and other performance factors. Award is made to the offeror whose proposal offers the best value to the government, considering trade-offs between price/cost and the other factors. All evaluation factors and significant subfactors that will affect contract award and their relative importance must be clearly stated in the solicitation. The solicitation must state whether all evaluation factors other than cost or price, when combined, are significantly more important than, approximately equal to, or significantly less important than cost or price (FAR 15.101-1). The two types of tradeoff methods are "subjective tradeoff" and "value adjusted total evaluated price" (VATEP). The differences between the two techniques are covered in Appendix B of the DoD Source Selection Procedures.


Sole Source. For non-competitive acquisitions, sole source proposals are evaluated for determination of a fair and reasonable price and for analysis of factors such as cost elements, technical and management approach, and adequacy of the terms and conditions of the prospective contract.


Proposal Evaluation Stages


  • Stage One – Planning. This stage includes establishing the evaluation criteria for award and submitting the evaluation criteria to the source selection authority for approval.
  • Stage Two – Forming The Evaluation Team. This stage includes: i) determining the specific teaming approach to be used; ii) nominating team members and selecting supporting contractor personnel; iii) briefing panel members on their responsibilities; iv) distributing documents and instructions to be used during the proposal evaluation; and v) convening the evaluation panel.
  • Stage Three – Conducting The Evaluation. This stage is tailored based on whether the tradeoff, LPTA, or sole-source approach is used.


Successful proposal evaluation depends on:


  • Appropriate, well-defined evaluation criteria
  • Evaluation rating standards that are understood and applied consistently among evaluators and among all proposals being evaluated
  • A careful review of the language in each proposal to ascertain how the offeror will meet the requirements of the RFP and to identify assumptions and statements that may indicate increased cost/price and/or risk to the Government.
  • Fully documented evaluation findings