Source selection criteria
“Source Selection Criteria” is an output for the process “Plan Procurement management”.
Source selection criteria are often included as a part of the procurement documents. Such criteria are developed and used to rate or score seller proposals, and can be objective or subjective.
Selection criteria may be limited to only the purchase price if the procurement item is readily available from a number of acceptable sellers. Purchase price in this context includes both the cost of the item and all ancillary expenses such as delivery.
Other selection criteria can be identified and documented to support an assessment for more complex products,
services, or results. Some possible source selection criteria are: – U nderstanding of need. How well does the seller?s proposal address the procurement statement of
work? – Overall or life-cycle cost. Will the selected seller produce the lowest total cost of ownership (purchase
cost plus operating cost)? – Technical capability. Does the seller have, or can the seller be reasonably expected to acquire, the
technical skills and knowledge needed? – Risk. How much risk is embedded in the statement of work, how much risk will be assigned to the
selected seller and how does the seller mitigate risk? – Management approach. Does the seller have, or can the seller be reasonably expected to develop,
management processes and procedures to ensure a successful project? – Technical approach. Do the seller?s proposed technical methodologies, techniques, solutions, and services meet the procurement documents requirements or are they likely to provide more or less than
the expected results?
– Warranty. What does the seller propose to warrant for the final product, and through what time period? – Financial capacity. Does the seller have, or can the seller reasonably be expected to obtain, the necessary
financial resources? – Production capacity and interest. Does the seller have the capacity and interest to meet potential
future requirements? – Business size and type. Does the seller?s enterprise meet a specific category of business such as small business (disadvantaged, specific programs, etc.) as defined by the organization or established by
governmental agency and set forth as a condition of the agreement award?
– Past performance of sellers. What has been the past experience with selected sellers? – References. Can the seller provide references from prior customers verifying the seller?s work experience
and compliance with contractual requirements? – Intellectual property rights. Does the seller assert intellectual property rights in the work processes or
services they will use or in the products they will produce for the project? – Proprietary rights. Does the seller assert proprietary rights in the work processes or services they will use or in the products they will produce for the project?
“Source Selection Criteria” is an input for the process “Conduct Procurements “.
Source selection criteria can include information on the supplier?s required capabilities, capacity, delivery dates, product cost, life-cycle cost, technical expertise, and the approach to the contract.
This definition was found in the PMBOK V5
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