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Source Selection Criteria: Determining ‘Best Value’ in Federal Acquisition

Ben Allen, Vice President, Public Sector Solutions
March 21, 2024

In federal government acquisition, source selection refers to the comprehensive process of evaluating vendors to identify the supplier that aligns most closely with the government's needs. A well-defined source selection strategy is critical to the overall acquisition process. Planning for the eventual source selection should be done carefully during the initial requirements phase when the government is defining its acquisition plan.

[ Learn more in Acquisition Planning: The Government Leader's Guide. ]

Source selection is a heavily regulated and highly scrutinized undertaking, especially for complex acquisitions. A single misstep in source selection can result in a protest or overturned contract award and a delay in the delivery of goods or services. Therefore, it is important to evaluate suppliers in a fair, objective, and transparent manner.

Table of Contents

Top 3 source selection criteria.

Primary objective of the source selection process in federal procurements.

Optimizing the source selection process.

[ Find out how AI can improve your acquisition processes, including vendor evaluation. Download AI for Government Procurement: A Practical Guide. ]

Top 3 source selection criteria.

As set forth in the Federal Acquisition Regulation, or FAR, contracting is encouraged to seek the best overall value in negotiated acquisitions. This means considering both cost and non-cost factors to ensure the selected supplier offers the optimal combination of price, quality, and alignment with the government's mission and objectives.

Technical capability.

Technical capability encompasses a supplier's expertise, skills, and capacity to meet the specific requirements outlined in the procurement solicitation. Evaluating technical excellence ensures that the selected vendor possesses the necessary knowledge, resources, and acceptability standards to deliver a product or service that aligns with the government's complex and often specialized needs. The technical evaluation of a supplier includes their technical understanding, personnel qualifications, and past experience doing similar work.

In evaluating technical capabilities, the government is looking for  solutions that not only meet baseline requirements but also demonstrate innovation, efficiency, and compatibility with existing systems. A supplier's technical proficiency directly impacts the success and performance of the contracted work, contributing to the overall effectiveness and reliability of the government's operations. 

Past performance.

The consideration of a vendor's or supplier's past performance is a crucial element in the source selection decision process for government procurements. Past performance provides valuable insights into a supplier's track record, reliability, and ability to successfully fulfill contractual obligations. It assesses aspects such as adherence to deadlines, quality of goods or services, responsiveness, and compliance with specifications, and it is an important consideration in mitigation of risk. Past performance information may be obtained from government databases and other government entities, as well as nongovernment/private sector sources.

By examining the supplier's history of performance on similar contracts, the contracting officer gains a measure of confidence in the vendor's capability to deliver quality results and adhere to deadlines. For example, a demonstrated record of meeting or exceeding expectations in previous contracts enhances the government's confidence in the supplier's ability to perform reliably in the future. Conversely, unsuccessful contract performance can indicate vendors to avoid. Past performance serves as a valuable indicator of a supplier's credibility and competence, minimizing the potential for project disruptions or failures.


Cost plays a central role in the source selection decision because it determines the economic feasibility and efficiency of a procurement decision. The government aims to obtain the best value for taxpayer dollars, and evaluating cost proposals allows for a thorough assessment of the financial aspects of competing bids. 

Lowest price is not necessarily the deciding factor in awarding a contract. The contracting officer must inform bidders of all cost evaluation factors that will be considered in the evaluation, such as purchase cost, operating cost, shipping costs, installation costs, life expectancy, and so on. 

While cost is a critical factor, it is often—depending on the type of acquisition—balanced with other criteria, such as technical capabilities, past performance, and quality, to ensure a comprehensive evaluation. Striking the right balance is crucial to selecting a supplier that not only offers a competitive price but also meets the government's requirements for performance, reliability, and long-term value. Effectively incorporating cost considerations helps achieve an optimal balance between fiscal responsibility and the delivery of high-quality goods or services in government acquisitions.

[ Learn more about modernizing government acquisition. Get the eBook: Streamlining Government Procurement with a Modern Acquisition Management Solution. ]

Primary objective of the source selection process in federal procurements.

Source selection is a pivotal step in the federal acquisition process. Done properly, the evaluation process helps agencies meet important acquisition goals:

  • Fair and open competition among potential suppliers. This is crucial to promoting transparency and preventing favoritism, corruption, or other unethical practices. By allowing multiple qualified suppliers to compete, the government can select the best value solution for its needs.

  • Cost efficiency. Through a well-structured source selection process, the government aims to identify the most cost-effective solution that meets its requirements, optimizing the use of taxpayer dollars and maximizing the value derived from the procurement.

  • Quality and performance. By considering factors such as past performance, technical capabilities, and relevant experience, the government can award suppliers that are best suited to deliver a high-quality product or service.

  • Risk mitigation. Evaluating a supplier's financial stability, capacity to meet contract requirements, and ability to deliver on time and within budget allows the government to identify and mitigate risks associated with a particular vendor.  

  • Compliance with regulations. The federal acquisition process is subject to numerous laws, regulations, and policies. Government agencies need to adhere to fair procurement practices to avoid legal challenges or disputes.

  • Innovation and technological advancements. By considering factors such as technological advancements, research and development capabilities, and innovation in solutions, the government can choose suppliers that bring cutting-edge and efficient solutions to the table.

  • Accountability and documentation. A structured source selection decision-making process allows for proper documentation of the vendor evaluation process, which is essential for transparency, accountability, and potential audits. It helps to demonstrate that the award decision was made in accordance with applicable laws and regulations.

Optimizing the source selection process.

Conducting a structured, standardized, and documented process and following established regulations and guidelines in source selection helps agencies achieve fair and objective vendor evaluations.

But too often, procurement teams struggle with disparate systems and legacy technologies, all with a poor user experience. Processes are time-consuming, costly to manage, and rife with documents and manual labor, with disjointed collaboration happening across email, spreadsheets, and shared drives. Agencies have limited ability to handle this complexity, collaborate seamlessly across stakeholders, and provide real-time insights, often leading to inefficiencies, errors, and a lack of transparency in the decision-making process.

Appian developed the government Source Selection offering to provide a single solution for managing all processes, activities, and data in a compliant, consistent, secure, and reportable way. It easily integrates with any legacy environment, unifying processes, people, documents, security, and data. Equipped with powerful automation, workflow, and integration capabilities, Appian Source Selection enables procurement and acquisition teams to: 

  • Reduce time spent on tasks such as document creation and evaluations. 

  • Track and manage the process in real time.

  • Ensure adherence to defined source selection processes. 

  • Maximize security for sensitive documents. 

  • Reduce the procurement action lead time.

Watch the webinar and demo, Modernizing Federal Acquisitions with Government Source Selection. You’ll see how you can manage all source selection processes, activities, and data in a compliant, consistent, secure, and reportable way to avoid protested awards.