Best Value Tradeoff Analysis Guide 2025: Win Government Contracts
Master best value tradeoff procurements. Learn how agencies evaluate price vs. technical merit, how to position your proposal, and strategies for competing on value not just price.
Quick Answer: What is Best Value Tradeoff?
Best value tradeoff allows the government to pay more for a higher-rated proposal if the premium is worth it. Unlike LPTA (Lowest Price Technically Acceptable), agencies can select a more expensive offeror if their technical approach, experience, or innovation justifies the cost. Your goal: demonstrate value that exceeds your price premium.
What is Tradeoff Analysis?
Tradeoff analysis is a source selection method under FAR 15.101-1:
How Tradeoff Works
Step 1: Evaluate Technical Factors
Each proposal is rated on non-price factors (technical approach, past performance, management, etc.) using adjectival ratings or point scores.
Step 2: Evaluate Price
Prices are analyzed for reasonableness, realism (for cost-reimbursement), and balance. Price is typically not scored but compared.
Step 3: Compare Value
The Source Selection Authority (SSA) determines if technical advantages are worth paying more for compared to lower-priced alternatives.
Step 4: Document Rationale
If selecting other than lowest price, the SSA must document why the technical superiority justifies the price premium.
Key Principle
The government is not required to select the lowest price or highest-rated proposal. They must select the best value — the optimal combination of price and non-price factors that meets their needs.
Tradeoff vs. LPTA
Tradeoff Analysis
- ✓ Higher-priced proposal can win
- ✓ Technical quality matters significantly
- ✓ Innovation and creativity rewarded
- ✓ Past performance heavily weighted
- ✓ More complex evaluation process
- ✓ Best for complex requirements
LPTA (Lowest Price)
- • Lowest acceptable price wins
- • Technical is pass/fail
- • No benefit to exceeding requirements
- • Past performance is go/no-go
- • Simpler, faster evaluation
- • Best for commoditized requirements
How to Tell Which Method Applies
Check Section M (Evaluation Criteria) of the RFP:
- • Tradeoff language: “Technical factors are more important than price”
- • Tradeoff language: “May pay a price premium for technical superiority”
- • LPTA language: “Award to lowest-priced technically acceptable”
Common Evaluation Factors
Understanding what agencies value helps you craft a winning proposal:
Typical Factor Weighting
Read the Relative Importance
RFPs state how factors rank against each other. Common statements: “Technical factors are significantly more important than price” or “Technical and price are approximately equal in importance.” This tells you how aggressively to pursue technical excellence vs. price competition.
Proposal Strategy for Tradeoff
Maximize Discriminators
Identify what sets you apart from competitors. Your unique capabilities, experience, or approach should be prominently featured and clearly connected to evaluation criteria.
Document Strengths Explicitly
Do not assume evaluators will recognize your strengths. Use explicit language: “This approach provides the benefit of...” Make it easy for evaluators to write positive findings.
Address Weaknesses Proactively
If you have potential weaknesses (small business size, limited past performance), address them head-on with mitigation strategies. Do not let evaluators discover problems without seeing your solutions.
Quantify Value
Help the SSA justify paying more for your proposal. Quantify benefits: faster delivery, reduced risk, cost savings over contract life, or performance improvements.
Writing for Evaluators
Weak Statement
“We have extensive experience in similar projects.”
Strong Statement
“Our team has completed 12 projects of similar scope and complexity for DoD clients, all rated Exceptional in CPARS, demonstrating proven capability to meet your mission requirements.”
Pricing Strategy for Tradeoff
Your price must be reasonable but need not be the lowest:
When to Price Higher
- ✓ Technical factors outweigh price
- ✓ You have clear discriminators
- ✓ Your solution provides measurable value
- ✓ Competition is limited
- ✓ Strong incumbent or past performance
When to Price Competitively
- • Price is equal to or more important than technical
- • Many qualified competitors
- • Limited differentiation opportunity
- • Agency has tight budget constraints
- • You need the win for strategic reasons
The Sweet Spot
Research suggests that for tradeoff procurements where technical is more important than price, a proposal can typically be 10-15% higher than the lowest offeror and still win if technical superiority justifies the premium. Beyond 20%, the SSA needs compelling justification.
Common Pitfalls
Strategic Mistakes
- ✗ Pricing for LPTA when it is tradeoff
- ✗ Not creating clear discriminators
- ✗ Assuming price always wins
- ✗ Ignoring relative importance statements
- ✗ Not quantifying your value
Proposal Mistakes
- ✗ Generic, non-specific responses
- ✗ Not mapping to evaluation criteria
- ✗ Burying strengths in dense text
- ✗ Failing to mitigate weaknesses
- ✗ Omitting benefits and outcomes
The Biggest Mistake
Assuming that if your price is lowest, you will win. In tradeoff procurements, a technically marginal proposal at any price may be considered higher risk than a strong proposal at a premium price. The SSA can choose to pay more for confidence.
Frequently Asked Questions
Can I be the highest price and still win?
Yes, if your technical proposal is sufficiently superior and the SSA determines the premium is justified. However, the further you are from the lowest price, the stronger your technical differentiation must be.
How do I know what competitors will price?
Research previous awards, check USAspending.gov for similar contracts, review FPDS data, and use industry knowledge. Competitive intelligence helps you position appropriately without racing to the bottom.
What if technical factors are “equal” to price?
When technical and price are equal, price becomes more important as a discriminator. You still want strong technical scores, but pricing closer to competitive levels is wise unless you have clear superiority.
Can I protest if a higher-priced competitor wins?
Yes, but you must show the SSA's tradeoff decision was unreasonable. If the agency properly documented that the winner's technical advantages justified the price premium, protests are difficult to win.
Find the Right Opportunities
BidFinds helps you identify contracts where your strengths create winning value propositions. Compete where you can win.
Start Finding Bids→Ready to Find Your Next Contract?
Get instant access to thousands of government construction bids with our AI-powered platform.
Get Started