Cost_Formula-reward_average_cost_for_RFP.docx

This file contains a cost formula methodology document related to a Licensed Real Estate Broker procurement for the Fair Haven Homeownership Project in the City of New Haven, Connecticut. The document explains the scoring methodology used to evaluate cost proposals in the RFP process, specifically detailing how the "Reward Low Cost" approach calculates point values for competing bids. The project involves the rehabilitation of three 2-family structures located at 342, 346, and 350 Grand Avenue into affordable and workforce homeownership units (targeting households at 60%-100% of Area Median Income). The City of New Haven, in collaboration with Fair Haven Health Clinic, controls all three properties and has established a construction completion target of February 2027. The procurement seeks a licensed real estate broker to support this homeownership initiative on a primary commercial corridor.

The cost evaluation formula awards points based on the ratio of the lowest proposal cost to each individual proposal's cost, with the lowest-cost proposer receiving the maximum available points and all other proposers receiving proportionally fewer points calculated as a percentage of the total cost-related points available. For example, under this methodology, a proposal at twice the lowest cost would receive 50% of the maximum cost points, while a proposal at five times the lowest cost would receive only 20% of available points. This approach incentivizes cost competitiveness while maintaining a transparent, objective scoring mechanism that directly penalizes higher-cost submissions relative to the lowest bid received.