Selection of key subcontractors on a program is very important and many times can make the difference between program success and failure.  One approach that I have used to ensure the selected subcontractor is a good choice is a BVA (Best Value Assessment) process. The process starts with an RFP (Request For Proposal) that is sent to candidate qualified subcontractors.  The process is a combination of objective and subjective judgments.

So what is the BVA process? The following example will describe it and explain how it is used.

THE BVA PROCESS
The BVA process is a technical assessment and rating of candidate subcontractors based on their proposals received in response to the RFP.  The proposed prices are intentionally not made known to the BVA team so as not to bias their opinions.  Pricing and strategic marketing strategy is established by management and is applied with the BVA in the final down select to the winning subcontractor.  The BVA process comprises: team selection; proposal review; fact finding; subcontractor facility visit; BVA grading; recommendation for subcontractor selection.

BVA STORY AND EXAMPLE
I was the technical project manager for a major missile launcher subcontract.  It was a build to print contract which meant we were looking for a subcontractor with excellent manufacturing capability for this type military product.  The missile launcher comprised two major components, the Base and the Mount.  It was my responsibility to work with our subcontracts group to find and select the best subcontractor for the contract.

SUBCONTRACTOR BACKGROUNDS
The first subcontractor was a Greek company that built and tested the Base for the Launcher for my company about 9 years ago and did a very good job.  Another company (not one of our subcontractors) built and tested the Mount for the launcher.  The Greek company also integrated the Base and Mount, tested the Launcher Assembly, and shipped it to the final destination.  They had designed, built, certified and tested the tooling (welding and assembly tools) for the Base and the Launcher Assembly.  They also generated and the TDP (Technical Data Package) for the Base and Launcher Assembly approved which were approved by my company.  Since they still had the tooling and TDP, they could be ready for manufacturing in a few months after contract award.  Their proposal was judged by the team to be very good.

The second subcontractor was a Turkish company which was under contract to my company for another product.  They were doing a good job for us.  They had an excellent manufacturing capability based on their performance for my company on the other program.  However, their proposal was judged by the team to be very poorly written and which meant we had a lot of fact finding questions to fully understand it.  They did not have any existing tooling which meant it would take them 10-12 months to design, build, test, and certify it.  They had no existing TDP.

The third subcontractor was a USA company with a long history of providing military mobile equipment to the US Government.  They did not have any launcher experience but was under contract 9 years earlier with my company to deliver the missile Canisters for the Launcher and performed well on that program.  Their proposal was excellent and an onsite visit demonstrated an excellent structural welding experience and capability.  Because they did not have tooling or a TDP, the time required to start manufacturing would be similar to the Turkish subcontractor.

TEAM SELECTION
The BVA team comprised: subcontractor administrator; technical contract manager; quality manager; welding SME (subject matter expert); IPT (integrated project team) lead; materials engineer; and manufacturing engineer.  The team was involved in: the subcontractor proposal review; proposal fact finding; subcontractor facility visits; the BVA rating meeting; and the subcontractor down select meeting.

PROPOSAL REVIEW/FACT FINDING/FACILITY VISIT
The first task for the team was to review the proposals in preparation for fact finding.  The purpose of fact finding is to assess the basis of the proposals, identify questions for the subcontractor to answer, to understand the basis of the proposal and to determine if it meets the requirements.  After the list of fact finding questions were compiled for each proposal, they were discussed with the applicable subcontractor via telecom.  A follow up visit to each subcontractor facility by the team was made to meet the personnel, tour the facility, and audit their quality, management, and other processes.  Now we had all of the information needed to perform the BVA rating for each subcontractor and make a final recommendation to management.

BVA TOOL
Table 1 shows the BVA tool.  It was an Excel file tailored for the specific subcontract and program.  The team decided the topics and their weight that were entered into the tool. The idea was to select the most major topics that may impact the success or failure of the subcontract.  Ratings were made by the team based on consensus by all members.  The highest score determined which company would be recommended to management by the team.  Table 2 shows the rating comments for each topic. The tables show the Greek company was rated the best and ultimately recommended to management by the team.   Management made a decision based on the BVA rating, proposed pricing and strategic marketing plans to award the subcontract to the Greek company. The BVA team supported management in their decision process. The Greek company performed excellently delivering the first article unit ahead of schedule and specification compliant. They went on to complete the contract on time.

Table 1-BVA Tool Showing Subcontractor Rating

Table 2-BVA Tool Rating Comments For Each Topic

 SUMMARY
The BVA tool proved to be valuable and on target in selecting the best subcontractor for the program.   My suggestions to mitigate subcontractor selection risks are as follows:

1. Create and use a BVA tool.
2. Form a team comprised of stakeholders to conduct the technical candidate subcontractor assessments and down select to the best choice.
3. Conduct a thorough review of the proposals.
4. Perform a detail and in depth fact finding effort.
5. Visit each facility to assess the potential subcontractor’s personnel, processes, facility, and make/buy plan and quality capabilities to perform on your contract.
6. Conduct a BVA rating meeting with all team members to rate and determine the best choice technically.
7. Ensure team ratings are based on consensus ( do not have to agree –just can live with it)
8. Support management in their decision to select the best value subcontractor to be awarded a contract based on price, strategic marketing, and BVA results.

Bio:

John earned a BS in Mechanical Engineering and MS in Engineering Management from Northeastern University. He has a total of 44 years’ experience, 30 years with DOD Companies. He is a member of PMI (project Management Institute). John has managed numerous firm fixed price and cost plus large high technical development programs worth in excessive of $100M.  He has extensive subcontract management experience domestically and foreign.  John has held a number of positions over his career including: Director of Programs; Director of Operations;  Program Manager; Project Engineer; Engineering Manager; and Design Engineer. His technical design areas of experience include: radar; mobile tactical communication systems; cryogenics; electronic packaging; material handling; antennas; x-ray technology; underwater vehicles; welding; structural analysis; and thermal analysis.  He has experience in the following areas: design; manufacturing; test; integration; selloff; subcontract management; contracts; risk and opportunity management; and quality control.  John is a certified six sigma specialist, certified level 2 EVM (earned value management) specialist; certified CAM (cost control manager).