Cost Formula Documentation for RFP Evaluation

This document is an educational resource explaining cost formula methodologies used in request for proposal (RFP) evaluations by government agencies. The document details the "Reward Low Cost" and "Reward Average Cost" scoring methods, which are objective approaches to allocating points based on proposal costs relative to the lowest submitted bid. The "Reward Low Cost" formula divides the lowest overall cost by each individual proposal's cost and multiplies the result by the maximum available points in the cost evaluation category. The document provides illustrative examples demonstrating how three competing proposals with costs of $100, $200, and $500 would receive 30, 15, and 6 points respectively out of a possible 30 points, with the lowest-cost proposal receiving full points and subsequent proposals receiving proportionally reduced points based on their cost differential.

This cost formula methodology is applicable to the City of New Haven's procurement for Phase III environmental site investigation and Remedial Action Plan preparation for 0 Gibbs Street, where cost is weighted at 20 points out of the total evaluation score. Understanding these cost calculation methods is essential for bidders preparing proposals, as the scoring directly impacts competitive rankings. The transparent formula ensures that cost evaluations remain objective and mathematically consistent across all submissions, allowing proposers to understand how their pricing will be assessed relative to competing bids during the evaluation process conducted by the City of New Haven's Purchasing Agent.