Price Enumeration and Probabilistic Evaluation in System Acquisition; Journal article

摘要

A number of environmental uncertainties in system acquisition can lead to situations where exact requirements are difficult to estimate. The uncertainties are often disregarded in favor of a simple point estimate. This point estimate, or Best Estimated Quantity (BEQ), is then used in the Request for Proposals (RFP) and subsequent source selection, with the evaluation conducted at the BEQ price using deterministic techniques. An alternative approach is presented for BEQ and deterministic price evaluation. The approach involves the solicitation of a range of bid prices for all potential quantities in lieu of a BEQ, with a complementary probabilistic analysis technique in lieu of a deterministic price evaluation. The probabilistic approach is then used to evaluate the range of bid prices and make an award decision. The methodology is presented in the context of an actual case study in which it was implemented in 1996.