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COST MODELS

The architecture highlights the various effects of using “Cost” as an evaluation category and how the use of cost as an evaluation category may skew evaluation results; resulting in lesser qualified firms or proposals being selected. There are various cost models available in the system. They are: 

Competitive Range Analysis
This model disregards the cost related weights in computing overall score for initial criteria.

Least Cost Evaluation
This model eliminates proposals that do not meet criteria based on upset levels and then ranks the proposals based on cost. Lower the cost higher is the rank.

Greatest Benefit for Dollar Cost
In this model the initial overall score is calculated first, based on all except cost. Then the overall score is divided by the cost of each proposal. This value for each proposal is multiplied by a cost range (difference between highest cost and lowest cost). Then the proposals are ranked by Benefit for Dollar Cost.

Cost as an Evaluation Category
In this model the cost is taken as a factor in the scoring scheme.
For example: The lowest cost proposal gets all of 4 points. If the next proposal is 20% higher in cost than the lowest cost proposal then that proposal receives 20% less points i.e. 3.2 and so on. 
Finally the cost score is considered in calculating the overall score. 

Cost as a Subjective Criteria
In this model the cost criteria is treated as any other criteria where evaluators can assign scores per criteria. The overall score considers cost as any other criteria with appropriate weights. System does not compute the cost score as in Cost as and Evaluation Category instead uses evaluator scores as the basis.

The administrator or buyer is able to change cost models and view reports to understand vendor selection process under different cost models.

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