1. Introduction
As part of the process 12.1 Plan Procurement Management, one of the outputs of the process that go into Procurement Documents like a Request for Information (RFI) or Request for Proposal (RFP) is the Source Selection Criteria. Often times these criteria are made into a checklist that is used as a “scoring sheet” to rate seller proposals.
The 5th Edition of the PMBOK® Guide lists the various criteria that are included as part of the Source (i.e., Supplier) Selection Criteria However, they are listed in apparently random, laundry-list fashion, and this post was designed to put some order into the list by arranging them by category.
2. Source Selection Criteria
These are the questions that should be asked by the organization requesting proposals from suppliers in order to rate or score those proposals. These questions make up the source selection criteria.
| Category | Criterion | Explanation | |
| 1. | Integration | Management approach | Does seller have, or can it develop, management processes and procedures to ensure a successful project? |
| 2. | Scope | Understanding of need | Does proposal address the Procurement Statement of Work (SOW)? |
| 3. | Time | Deadline | With what degree of confidence can the seller produce the product within the specified deadline? |
| 4. | Cost | Overall or life-cycle cost | What is the total cost of the procurement (purchase cost plus operating cost)? |
| 5.. | Financial capacity | Does seller have necessary financial resources? | |
| 6. | IP Rights | Does seller assert intellectual property rights in the product they produce for the project? | |
| 7. | Proprietary Rights | Does seller assert proprietary rights in the product they produce for the project? | |
| 8. | Quality | Technical approach | Can seller’s technical methodologies, techniques and solutions meet the technical requirements in the procurement documents? |
| 9. | Warranty | What will seller covered by warranty, and for what time period? | |
| 10. | Production capacity | Does seller have sufficient production capacity to meet potential future requirements? | |
| 11. | Human Resources | Technical capability | Does seller have technical knowledge and skills needed? |
| 12. | Risk | Risk response | How much risk is being assigned of transferred to the seller? How does the seller mitigate risk? |
| 13. | EEFs | Business type and size | Does seller’s enterprise meet a specific category of business (disadvantaged, etc.) defined by the organization or established as condition by government agency? |
| 14. | OPAs | Past performance | What is past performance of selected sellers? |
| 15. | References | Can seller provide references from prior customers verifying compliance with contractual requirements? |
One of the few knowledge areas represented in the list of categories that PMI did not include in the above list was that of the Time Management knowledge area, and so I added a crucial criterion for the selection of a seller that PMI left out, perhaps because it’s so obvious: the ability of the seller to meet any deadline specified by the organization.
This is a list of possible criteria that might be used in the case of a complex project. Of course, in the case of a simple project, where the product needed from the seller is readily available off the shelf from various sellers, the only criterion needed might be the cost.
These criteria are prepared in order to give an objective basis for choosing the seller in the next process, 12.2 Conduct Procurements. An outline of the inputs, tools & techniques, and outputs of that process is the subject of the next post.
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