Cost_Formula-reward_average_cost_for_RFP.docx

This document is a reference guide explaining cost formulas used in scoring methodologies for state and local contract opportunities, specifically addressing the Reward Average Cost and Reward Low Cost evaluation methods. The document provides detailed explanations and examples of how these formulas calculate point values for competing proposals. The Reward Low Cost methodology uses a straightforward equation where the lowest overall cost is divided by each proposal's cost to determine the percentage of available points awarded. No specific response dates, due dates, site visits, bidder meetings, award dates, or contract terms are outlined in this reference material, as the document serves as instructional content rather than a solicitation document.

The document illustrates the cost formula application through three proposal examples with costs of $100, $200, and $500 respectively, demonstrating how proposals receive point allocations based on their cost relative to the lowest bid. In this example, the lowest-cost proposal at $100 receives the maximum 30 points, while a $200 proposal receives 15 points (50% of 30), and a $500 proposal receives 6 points (20% of 30). No specific pricing terms, set-asides, incumbent information, funding sources, or amounts are detailed in this instructional document. This reference material is designed to assist bidders and evaluators in understanding how cost-based scoring mechanisms function within the proposal evaluation process.