The procurement department of Horizon Hotels is working on construction of its newest hotel resort. Four tenders have been received by the depart- ment, which has evaluated these offers for quality based on a 100-point scale in which a company can earn at most 50 points for its method statement, at most 10 points for its environmental approach, and the remaining points from the quality and seniority of the company's project team. Thus, the procure- ment department is considering four companies for the construction contract: Office Redevelopment LLC bid \($4\) million for construction costs; \($200,000\) for preliminaries (setup costs); \($300,000\) for overhead and profits; design fees of 5% of construction costs and project risk fee of 1% of construction costs. In the quality evaluation, the Horizon procurement department awarded Office Redevelopment 45 points for the method statement, 9 points for the environmental approach, and 35 points for its project management team. Walters Construction bid \($3.8\) million for construction costs; \($250,000\) for preliminar- ies; \($200,000\) for overhead and profits; design fees of 4% of construction costs; and risk fee of 1.5% of construction costs. In the quality evaluation, the Horizon procure- ment department awarded Walters 45 points for the method statement, 10 points for the environmental approach, and 40 points for its project management team. Uspeshno Construction, bid \($3.6\) million for construction costs; \($300,000\) for prelimi- naries, \($150,000\) for overhead and profits; design fees of 7% of construction costs; and risk at 1% of construction costs. The Horizon procurement scored Uspeshno's bid at 42 for the method statement, 8 for environmental approach, and 32 for its project management team. Douglas Construction, bid \($4.2\) million for construction costs; \($200,000\) for prelimi- naries; \($200,000\) for overhead and profits; design fees of 4% of construction costs and risk 2% of construction costs. The Horizon procurement scored Douglas at 49 for the method statement, 9 for environmental approach, and 39 for its project management team.

Questions

1. Who would be awarded the contract if the evaluation basis were lowest price?

2. What is the price score for Walters Construction?

3. Which company has the best overall quality score and what is that score?

4. Which company does linear averaging suggest should be awarded the contract, if Horizon gives the categories of quality and price equal weight?

5. Which company does linear averaging suggest should be awarded the contract, if Horizon weights price at 20% and quality at 80%?