What is value-based pricing?
Value-based pricing is where a contractor primarily bases its pricing on the perceived value the completed project will create for the owner. Value-based pricing is not best value procurement. Best value procurement is where an owner selects a contractor or vendor on evaluation criteria other than price alone, including schedule, experience, quality, diversity, and sustainability. But best value procurement evaluation techniques are a good way to evaluating competing bids for value-based pricing. This video reviews the benefits and disadvantages of value-based pricing.
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