The issue is that the moment that you introduce too much discretion into the contract award process, it opens up the potential for shady dealings (giving the contract to your brother's company, etc), or even just the appearance of shady dealings. Suppose there is discretion involved, and one of the losing bidders finds out that the procurement manager's son-in-law has a financial stake in the company that wins the bid. Can you say "lawsuit"? Even the allegation of impropriety can ruin someone in that type of position.
Lowest bidder may attract the "you get what you pay for" contractors, but it's significantly harder to game the system to get contracts awarded to 'favourable parties'. That's the theory anyway.