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Vern Edwards

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Posts posted by Vern Edwards


  1. Okay, one more. The first mention of "fair and reasonable price" by the Comptroller General was in a 1923 decision, 2 Comp. Gen. 503, Feb. 14, 1923. Capitalization as in original.

    Quote

    WHERE THE MINDS OF THE CONTRACTING PARTIES DO NOT MEET, THE ONE INTENDING THE PRICE STATED TO BE THE PRICE PER HUNDRED WHILE THE OTHER TREATS IT AS THE PRICE FOR THE ENTIRE LOT CONSISTING OF SEVERAL HUNDRED, NO CONTRACT RESULTS, BUT IF THE SUPPLIES ARE FURNISHED AND ACCEPTED, PAYMENT MAY BE MADE ON A QUANTUM VALEBAT BASIS, THE LOWEST BID SUBMITTED BEING PROPER FOR CONSIDERATION FOR THE PURPOSE. 26 COMP. DEC., 286, AFFIRMED.

    PHILADELPHIA ELECTRIC AND MANUFACTURING CO. APPLIED OCTOBER 13, 1922, FOR A REVIEW OF SETTLEMENT W-NO. 572,317 OF SEPTEMBER 21, 1922, WHEREIN ONLY $195.45 WAS ALLOWED ON ITS CLAIM FOR $514.65 ON ACCOUNT OF CROSSARMS FURNISHED FOR THE SIGNAL CORPS, UNITED STATES ARMY, UNDER PURCHASE ORDER NO. 101801, DATED APRIL 14, 1922, AN ERROR IN ITS PRICE AS BID BEING ALLEGED BY CLAIMANT.

    * .    * .    *

    BIDS HAD BEEN SOLICITED ON TWO ITEMS DESIGNATED AS ITEMS 10 AND 11. ITEM 10 WAS FOR 200 CROSSARMS 3 1/4 INCH BY 4 1/4 INCH BY 4 FEET LONG, AND ITEM 11 WAS FOR 500 LIKE CROSSARMS, 6 FEET LONG. OF THE 4-FOOT CROSSARMS 100 WERE TO BE DELIVERED AT SOUTH BROOKLYN, N.Y., AND 100 AT SAN FRANCISCO, CALIF. OF THE 6-FOOT CROSSARMS 200 WERE TO BE DELIVERED AT SOUTH BROOKLYN AND 300 AT SAN FRANCISCO.

    * .    * .    *

    THE GOVERNMENT RECEIVED 499 OF THE 500 CROSSARMS ORDERED AND, THERE BEING NO BINDING CONTRACT COVERING THE TRANSACTION, SHOULD PAY A FAIR AND REASONABLE PRICE THEREFOR. THE LOWEST BID SUBMITTED ON THIS LOT WAS 72 CENTS EACH OR $360 FOR THE ENTIRE LOT. THIS MAY BE ACCEPTED AS A FAIR AND REASONABLE PRICE. ACCORDINGLY CLAIMANT WAS ENTITLED TO $359.28 FOR THE 499 CROSSARMS DELIVERED.

    UPON A REVIEW OF THE MATTER A DIFFERENCE OF $163.83 IS CERTIFIED DUE CLAIMANT.

    Emphasis added.

    If being the lowest was good enough for the U.S. Comptroller General, despite the lack of any "technical evaluation"...


  2. I found this reference to fair and reasonable price in an opinion of the U.S. Attorney General dated April 9, 1937, entitled, "Right of Douglas Aircraft Co. To Contract Price For Airplanes Furnished Army", 39 Op. U.S. Atty Gen. 23:

    Quote

    Section 10 of the Air Corps Act, however, provides a different method for the procurement of aircraft from that provided by the general procurement statutes. The provisions of that section here pertinent are as follows:

    SEC. 10. (a) That in order to encourage the development of aviation and improve the efficiency of the Army and Navy aeronautical matériel the Secretary of War or the Secretary of the Navy, prior to the procurement of new designs of aircraft or aircraft parts or aeronautical accessories, shall, by advertisement for a period of thirty days in at least three of the leading aeronautical journals and in such other manner as he may deem advisable, invite the submission in competition, by sealed communications, of such designs of aircraft, aircraft parts, and aeronautical accessories, together with a statement of the price for which such designs in whole or in part will be sold to the Government.

    ‘(b) The aforesaid advertisement shall specify a sufficient time, not less than sixty days from the expiration of the advertising period, within which all such communications containing designs and prices therefor must be submitted, and all such communications received shall be carefully kept sealed in the War Department or the Navy Department, as the case may be, until the expiration of said specified time, and no designs mailed after that time shall be received or considered. Said advertisement shall state in general terms the kind of aircraft, parts, or accessories to be developed and the approximate number or quantity required, and the department concerned shall furnish to each applicant identical specific detailed information as to the conditions and requirements of the competition and as to the various features and characteristics to be developed, listing specifically the respective measures of merit, expressed in rates per centum, that shall be applied in determining the merits of the designs, and said measures of merit shall be adhered to throughout such competition. All designs received up to the time specified for submitting them shall then be referred to a board appointed for that purpose by the Secretary of the department concerned and shall be appraised by it as soon as practicable and report made to the Secretary as to the winner or winners of such competition. When said Secretary shall have approved the report of said board, he shall then fix a time and place for a public announcement of the results and notify each competitor thereof; but if said report shall be disapproved by said Secretary, the papers shall be returned to the board for revision or the competition be decided by the Secretary, in his discretion, and in any case the decision of the Secretary shall be final and conclusive. Such announcement shall include the percentages awarded to each of the several features or characteristics of the designs submitted by each competitor and the prices named by the competitors for their designs and the several features thereof if separable.

    ‘(c) Thereupon the said Secretary is authorized to contract with the winner or winners in such competition on such terms and conditions as he may deem most advantageous to the Government for furnishing or constructing all of each of the items, or all of any one or more of the several items of the aircraft, or parts, or accessories indicated in the advertisement, as the said Secretary shall find that in his judgment a winner is, or can within a reasonable time become, able and equipped to furnish or construct satisfactorily all or part, provided said Secretary and the winner shall be able to agree on a reasonable price. If the Secretary shall decide that a winner can not reasonably carry out and perform a contract for all or part of such aircraft, parts, or accessories, as above provided, then he is authorized to purchase the winning designs or any separable parts thereof if a fair and reasonable price can be agreed on with the winner, but not in excess of the price submitted with the designs.'

    Emphasis added. By the way, what we might see in that is the origin, or one of them, of the modern FAR Part 15 source selection process.


  3. 12 hours ago, Retreadfed said:

    If that is what a fair and reasonable price is, what is all this arguing about?  It seems as if folks here are looking for a "magic formula" to tell them what price is fair and reasonable., i.e., what they would be willing and able to pay for what they are buying.  Also, nobody other than Vern has defined what it is that they are talking about.  Is there a common understanding of what this term means in the FAR or are folks here making up their own definition as they go along without sharing that information?

    Above all, the question of the "fairness and reasonableness" of prices is about whether the price is too high for the taxpayers to pay. The earliest official use of the phrase "fair and reasonable price" that I have been able to find through quick research is in a decision of the U.S. Court of Claims, Parish v. U.S., 1 Ct. Cl. 57, Oct. 1, 1865, concerning the price paid for cavalry horses. I quote the entire decision here for your amusement:

    Quote

    Mr. A. L. MERRIMAN for claimant.

    Mr. J. J. WEED, Assistant Solicitor, for the government.

    Opinion

    PECK, J., delivered the opinion of the Court.

    The petitioner represents that in the month of September, 1861, he received an order from one McKinstry, chief quartermaster at the city of St. Louis, in the State of Missouri, as follows: “You are authorized to purchase for a regiment of cavalry, to be called the McKinstry Guard, to be raised in Central Illinois, eleven hundred and fifty-eight horses, at prices not to exceed $110 each. They must be rigidly inspected by a board appointed by the colonel of the regiment previous to being received. To be delivered at Peoria, Illinois.”

    That he purchased the horses at the price named, and they were delivered to and accepted by the proper officers, for which he received from the quartermaster of the regiment vouchers amounting in all to the sum of $127,380. That these vouchers were afterwards submitted to a commission held at St. Louis, appointed by the then commander of that military district, and presided over by the then Captain (now Major General) Philip Sheridan, which commission approved the vouchers, as did also the chief quartermaster of the military department at the time, who was General R. Allen.

    The prices charged for the horses, it is alleged, were reasonable, and were not above their general market value. These vouchers were transferred by petitioner to Messrs. Sturgis & Son, of Chicago, for collection, who presented them for payment at the office of the Quartermaster General, at Washington, and received thereon $105 per horse, making the sum of $121,590. That a deduction was made from the face of the vouchers without any just cause, pretence of fraud, or authority. By reason of which, petitioner claims that he has a right to recover the sum of $5,790, the amount deducted and withheld.

    The allegations of the petition are sustained by the evidence. The case, as presented, shows that the horses were purchased and accepted by the government. It is also shown that they were equal to the required standard.

    On the 13th of March, 1862, the Quartermaster General (M. C. Meigs) addressed the following letter to the Third Auditor: “The account of Joseph W. Parish (five enclosures) for 1,158 horses furnished the McKinstry Guard, and amounting to $114,180, having been examined and recommended for payment by the military commission at St. Louis, is respectfully referred to you for settlement in certificates of indebtedness.” On the 22d of the same month General Meigs also wrote to the same officer as follows: “I respectfully transmit herewith five accounts, in duplicate, in favor of J. W. Parish for 1,158 horses furnished the McKinstry Guard, (11th Illinois cavalry,) at $110 each. The accounts are approved, and payment in certificates of indebtedness is recommended.” On the 5th of April following, Quartermaster General Meigs again wrote to the Third Auditor as follows:

    “In transmitting, on the 22d of March last, with my approval, the five accounts in favor of Joseph W. Parish for 1,038 horses for the McKinstry Guards, at $110, I was governed by the action of a military commission approving those accounts, the authority under which the purchases were made, and the apparently reasonable price charged for the horses.

    “Since then, however, I have received the final report made by the Commission on War Claims, at St. Louis, a printed copy of which is herewith enclosed; wherein, on page 28, a special reference is made to Parish's claim. On account of the developments made by this commission, I now desire to withdraw my approval of Parish's account so far as the price charged is concerned, and recommend that said account be allowed to the extent of one hundred and five dollars for each horse, that being the price allowed in other cases by the Commission on Claims in the western department for cavalry horses, subject, however, to a reclamation of five dollars on each horse (120) charged for at $110 in the account referred to and paid by Major Miller.”

    The latter communication caused the Auditor to withhold from claimant the sum he now seeks to recover. Do the facts stated justify the retaining of the five dollars on each horse? We think they do not. Parish had already submitted his claim and vouchers to one commission, which had given an approval. By it the price paid for the horses had not been pronounced unreasonable, nor was any exception taken as to their quality.

    The subsequent report by another commission, (before which neither Parish nor his accounts appeared,) stating that $105 was a fair allowance for horses, does not authorize the government to deduct from the price it had agreed to pay Parish, since it nowhere appears that he had conducted himself in bad faith, or that the price he demanded was unreasonable. The special reference made to this claim by the second commission is not in this record, and we are not advised as to what it is.

    There is abundant proof to show that the horses were purchased by Parish in the expectation that he would receive the sum of $110 for them from the government, and that this was a fair and reasonable price.

    The refusal to pay the full price agreed upon is unauthorized, and does not seem to have any reason, but only caprice, for its foundation. Why the action of the second commission or its opinion is better or more to be trusted than that of the first, is not explained. The claimant submitted his vouchers to the commission presided over by General Sheridan, and they received its approval. It is not shown how or why they were considered by a second commission; nor was the claimant required by any law or reason that we know of to submit his vouchers to the gauntlet of all the commissions that might be devised for that or any other purpose; but, apart from all commissions of investigation, he may rely upon the rectitude of his conduct and his contract, exacting as much compliance as he gave, or upon the actual value of the property sold and delivered.

    There is no imputation upon the fairness of the conduct of the claimant, and he should recover.

    We direct a judgment in his favor for the sum of $5,790.

    Emphases added.


  4. For anyone mystified by, or curious about, data rights, the July 2018 issue of Briefing Papers, Second Series, is an absolutely must read primer.

    See: "Taking The Mystery Our Of Data Rights" by W. Jay DeVecchio, a partner in Morrison & Foerster LLP.

    Only ten pages long, with extensive notes. Concise! Clear! Beautiful!!

    A MUST READ!

    I am so happy!

     


  5. 19 minutes ago, joel hoffman said:

    The higher priced offers weren’t in line for award, so they aren’t interested parties in an award protest.

    Unless they are protesting the conduct of the process and they would be in line for award if the protest were sustained. The No. 2 might protest that the No.1 was improperly determined to be technically acceptable.

    Arrrgggh! Why am I still reading this?


  6. 6 hours ago, dak9204 said:

    Could anyone point me in the direction of a court decision or FAR Council notice about contracting officers including clauses that should not have been included in a prime contract? 

    Yes. See, for example, Johnson Management Group GFC, Inc. v. Martinez, 308 F.3d 1245 (Fed. Cir. 2002) (CO not authorized to include special clause); Charles Beseler Co., ASBCA 22669, 78-2 BCA ¶ 13,483 (CO improperly included clause prohibited by regulation); and Guard-All of America, ASBCA 22167, 80-2 BCA ¶ 14462 (CO arbitrarily, capriciously, and by abuse of discretion included short-form termination clause). There are several such decisions.


  7. So, Jamaal, do you agree that a CO, when determining the fairness and reasonableness of the technically acceptable lowest price, can use comparisons with the prices in proposals that were not evaluated for technical acceptability, as long as the CO is open minded and judicious when making that determination and can explain the basis for his or her judgment, perhaps supplementing those comparisons with other price info when appropriate?

    Yes or no.


  8. 5 hours ago, Jamaal Valentine said:

    FAR instructs us to use sound business judgment. The Contract Pricing Reference Guide, referenced in FAR Subpart 15.4, states not to use unacceptable offers in comparisons and GAO doesn't appear to support comparing pricing to unacceptable offers (Lifecycle Construction Services, LLC, B-406907, September 27, 2012).

    @Jamaal Valentine Jamaal, you have misread the Lifecycle Construction Services decision. In that case the government determined that the protester's pricing coefficient was unrealistically low based on a comparison to the median proposed coefficient, which was determined on the basis of proposed coefficients that were too high. Lifecycle was a case of faulty price realism analysis, not faulty reasonableness analysis.

    Quote

    Rather than relying on the government’s estimate, the contracting specialist calculated the median of all 15 offerors’ coefficients for the Fort Bragg location, asserting that the median price was a better representation of “the cost the government can expect to pay for construction services.” Id. at 3 The median coefficient for Fort Bragg was materially higher than the government estimate, and resulted in Lifecycle’s Fort Bragg coefficient (which was [Deleted], as shown above) being evaluated as [Deleted] lower than the median. Id. Since Lifecycle and one other offeror submitted a coefficient for Fort Bragg that was more than 15 percent below the median, the contracting specialist concluded that those firms’ prices were “excessively low and may indicate a lack of understanding of the requirements.” Id. Four other offerors' coefficients were deemed excessively high. The analyst therefore concluded that only nine firms (not including Lifecycle) had submitted reasonable and realistic prices. Id. at 4.

    On February 24, the source selection official prepared a source selection decision document, which reflected a price analysis similar to that discussed above. After comparing Lifecycle’s proposed coefficients to the government estimates, the source selection official concluded that “fair market pricing” would be established by comparison to the median of the 15 coefficients proposed for the combined Fort Bragg/Pope Air Force Base locations; that coefficient was [Deleted]. AR, Tab G, Source Selection Decision, at 3-4. In this regard, the source selection official noted that a “specialty” contract had recently been awarded to a firm that proposed a coefficient of [Deleted], and that the firm had failed to successfully perform that contract. Id. He also stated that he was aware that two successful contractors at Fort Bragg had coefficients of [Deleted] and [Deleted]. Id. Based on those considerations, the source selection official concluded that the coefficients proposed by Lifecycle and a second firm reflected a lack of understanding of the work, which meant that the firms “would not be able to execute task orders at the prices proposed.” Accordingly, Lifecycle’s proposal was not further considered for award. Id.

    The source selection official determined that three of those eight (shown above as Offerors B, C, and D) had proposed coefficients that were more than 15 percent higher than the median coefficient, and concluded that they reflected “unreasonable pricing.” Id. at 6. He then selected the five remaining proposals for award. Id. at 6-7.

    *     *     *

    In reviewing protests challenging price realism evaluations, our focus is on whether the agency acted reasonably and in a manner consistent with the terms of the solicitation. Nova Techs., B-405982.2, May 16, 2012, 2012 CPD ¶ 172 at 9.

    Based on our review of the record here, we conclude that the Corps unreasonably rejected Lifecycle’s proposal. We reach this conclusion, first, because the median was materially higher than the government estimate due to the inclusion of proposed prices that the agency, itself, determined were unacceptable, ineligible for award, and/or unreasonably high. That is, while the contracting officer and the source selection official assert that the median represented the “fair market pricing,” they also acknowledge that three of the price coefficients used to establish that benchmark were, themselves, unreasonably high, and several others were proposed by offerors/proposals that were determined to be unacceptable or ineligible for award. Accordingly, in our view, the median could not reasonably be relied upon as a valid benchmark for comparison. Further, even if the agency’s calculation of the median had been rational, the agency comparison to that benchmark did not consider the coefficients proposed for 12 of the 14 locations identified in the RFP. Nothing in the RFP advised offerors that the prices proposed for the locations other than the Fort Bragg/Pope Air Force Base area would not be meaningfully considered.

    Footnotes omitted.

    Price realism and price reasonableness are very different determinations. I do not interpret Lifecycle to stand for the simple proposition that you cannot determine price reasonableness by comparing a propose price to the prices of unacceptable proposals, and as far as I can see no commentator has interpreted the decision in that way. I know that in a couple of sentences the GAO seems to say that, but you have reading that decision too broadly.

    It is true that the CPRG, Vol. 1, says that a CO should not use the prices of unacceptable proposals as a basis for comparison, but that guidance is not regulatory and is much too simplistic to be applied as you demand. It is true that you have to use sound business judgment, but as I have explained, sound judgment requires that you think more deeply.


  9. 7 minutes ago, Don Mansfield said:

    Vern seemed to be hanging his hat on FAR 15.404-1(b)(2)(i) in his scenario and I wanted to know if it was because he thought he had adequate price competition or because of some other reason.

    This thread has gotten so long that I don't remember when and where I quoted FAR 15.404-1(b)(2)(i), but I do remember quoting it.

    There are two sentences in the subparagraph, I was thinking of the first, even though I quoted both. Apples are a commercial item. I would not look to see if I had adequate price competition because that concept and that rule do not apply to commercial items, so I would not know or care whether I'd had it. I do not see the second sentence as being inextricably linked to the first. I see the second sentence as saying nothing more than that if you have adequate price competition you can ordinarily rely on its existence to establish fairness and reasonableness of price. I don't read it to indicate in any way that the absence of adequate price competition means that competition was not effective in producing fair and reasonable prices.

    The mere fact that something is mentioned in a regulation does mean it is pertinent to the issue at hand.


  10. 8 minutes ago, Don Mansfield said:

    So I ask again, did you get adequate price competition in your scenario?

    And I'm telling you, again, that adequate price competition is irrelevant. See FAR 15.404-1(b)(2)(I):

    Quote

    (2) The Government may use various price analysis techniques and procedures to ensure a fair and reasonable price. Examples of such techniques include, but are not limited to, the following:

    (i) Comparison of proposed prices received in response to the solicitation. Normally, adequate price competition establishes a fair and reasonable price (see 15.403-1(c)(1)(i)).

    Two sentences in (i). The first provides an example of a pricing techniques. The second makes an assertion: "NORMALLY, adequate price competition establishes a fair and reasonable price." The two together do not say that you can establish fairness and reasonableness through comparison of proposed prices ONLY IF you got adequate price competition.

     


  11. 49 minutes ago, Don Mansfield said:

    Is comparison of proposed prices the only basis for establishing price reasonableness? Or are there others?

    Did you get adequate price competition?

    See FAR 15.404-1(b):

    Quote

    (2) The Government may use various price analysis techniques and procedures to ensure a fair and reasonable price. Examples of such techniques include, but are not limited to, the following:

    (i) Comparison of proposed prices received in response to the solicitation. Normally, adequate price competition establishes a fair and reasonable price (see 15.403-1(c)(1)(i)).

    (ii) Comparison of the proposed prices to historical prices paid, whether by the Government or other than the Government, for the same or similar items. This method may be used for commercial items including those “of a type” or requiring minor modifications.

    (A) The prior price must be a valid basis for comparison. If there has been a significant time lapse between the last acquisition and the present one, if the terms and conditions of the acquisition are significantly different, or if the reasonableness of the prior price is uncertain, then the prior price may not be a valid basis for comparison.

    (B) The prior price must be adjusted to account for materially differing terms and conditions, quantities and market and economic factors. For similar items, the contracting officer must also adjust the prior price to account for material differences between the similar item and the item being procured.

    (C) Expert technical advice should be obtained when analyzing similar items, or commercial items that are “of a type” or requiring minor modifications, to ascertain the magnitude of changes required and to assist in pricing the required changes

    (iii) Use of parametric estimating methods/application of rough yardsticks (such as dollars per pound or per horsepower, or other units) to highlight significant inconsistencies that warrant additional pricing inquiry.

    (iv) Comparison with competitive published price lists, published market prices of commodities, similar indexes, and discount or rebate arrangements.

    (v) Comparison of proposed prices with independent Government cost estimates.

    (vi) Comparison of proposed prices with prices obtained through market research for the same or similar items.

    (vii) Analysis of data other than certified cost or pricing data (as defined at 2.101) provided by the offeror.

    (3) The first two techniques at 15.404-1(b)(2) are the preferred techniques. However, if the contracting officer determines that information on competitive proposed prices or previous contract prices is not available or is insufficient to determine that the price is fair and reasonable, the contracting officer may use any of the remaining techniques as appropriate to the circumstances applicable to the acquisition.

    (4) Value analysis can give insight into the relative worth of a product and the Government may use it in conjunction with the price analysis techniques listed in paragraph (b)(2) of this section.

    Adequate price competition is irrelevant. I'm buying apples, a commercial item. The market for fruits is pretty large. And I live in Washington state. Everybody here knows the prices of apples. And cherries. And pears. And grapes. And watermelon. I can detrermine fairness and reasonableness through pleasure analysis.

    Besides, we don't have to evaluate the other offers to know whether they're for apples. We can do a quick look to see that. We just don't have to evaluate them for whether they're acceptable apples.


  12. 11 minutes ago, Don Mansfield said:

    The problem I have with this approach is that you don't know if you would be making an apples-to-apples comparison. You have received several offers to provide apples. You have confirmed that one such offer is for something that meets the criteria for being an apple. You don't know if the other offers are for things that meet the criteria for being apples. You have no evidence that they meet the criteria for being apples, but you also have no evidence that they don't. You're comparing apples to something in a quantum superposition of being both apples and not apples. Why would it be reasonable to assume that they are apples? Because you asked for apples and received several offers to provide apples?

    So what is the possibility? That if I knew that the others, or some of them, weren't for apples I might think that there might be a better price out there for apples than the low one I got? Well, no one offered that price. What am I supposed to do, embark on an endless quest for the offer that might exist but that I didn't get? How long am I going to look for that offer while the guys are out in the boonies are waiting for fresh fruit? Spoken like a true desk ranger.

    I conducted a competition for apples. I got an offer for apples that was lower than all the others. All the other offers I got were higher. I don't give a damn if they were for apples or coconuts. I announced a contest, I specified the rules, I conducted the contest in accordance with the rules, Game over.

    Now, apples are an easy one to solve, because there's a public market for apples and I can call around. If the low price is too high I can cancel the solicitation and start over after I figure out what I did wrong the first time.

    Quantum superposition my tookus.


  13. 2 hours ago, Jamaal Valentine said:

    I am more concerned about someone comparing prices to offers which they have not evaluated nor determined are suitable for comparison.

    @Jamaal Valentine

    Why "concerned"? Agencies have done that for decades when using sealed bidding, in which there is no nonprice technical evaluation at all. There is no reason to be "concerned" unless someone describes the use of a specific method for determining fairness and reasonableness that is patently irrational or otherwise unsound under specific circumstances.

    You are being very persistent at making a mountain out of a molehill with your "concern." I'm beginning to think that you don't understand the concept of fair and reasonable price. Each determination must be judged in its own circumstances and on own its merits. Your kind of foggy "concern" is what leads to general prohibitions against the use of methods that are perfectly reasonable when properly used.

    If someone wants to charge me less for something that I consider acceptable than for something that I haven't considered at all, and if acceptable is all I want, then why shouldn't I consider that to be a fair and reasonable price?


  14. 9 minutes ago, Jamaal Valentine said:

    I wonder what GAO would have decided if a prejudiced party specifically challenged the comparison of the market average concept. (The technical acceptability of some of the offer's was not evaluated - unknown; for competitive range purposes they were essentially treated as acceptable)

    A proposal might be technically unacceptable on grounds that have no bearing on price. The product of service offered might be perfectly acceptable, but the proposal is technically unacceptable on other grounds.

     


  15. P.S. Don't confuse "technically acceptable" as used in FAR 15.101-2 with acceptable as defined by the GAO or with the criterion for adequate price competition in FAR 15.403-1(c)(1)(i).

    The GAO says:

    Quote

    In a negotiated procurement, a proposal that fails to conform to the material terms and conditions of the solicitation is considered unacceptable and may not form the basis for award.

    See Distributed Solutions, Inc., B-416394, 2018 CPD ¶ 279. That's an explanation of the concept of legal acceptability, but that's not necessarily what "technically acceptable" might mean in any given instance.

    FAR does not define "technically acceptable," and agencies have defined it in various ways. It's possible for a proposal to be legally acceptable, but not "technically acceptable." It's also possible for a proposal to be "technically acceptable," but not legally acceptable. Agencies don't always do things in ways that make complete sense to us pedants.


  16. Here's how the CO determined price reasonableness in the decision I just cited:

    Quote

    EPA received proposals from ten offerors, including ER. The agency ranked the proposals from lowest-priced to highest-priced, and then conducted a price evaluation to assess the reasonableness of the prices submitted. Specifically, the agency compared the prices to the market average, as well as the independent government estimate....

    Footnote 2: The agency calculated the market average by adding the offerors' total proposed prices, and dividing the sum by the total number of proposals received. COS at 1; AR, Tab 4, Revised Price Evaluation, at 1.

     


  17. On 9/14/2018 at 9:50 AM, brent said:

    Awarding a competitive task order.  RFP stated that TO would go to LPTA and that only the lowest priced offer would be evaluated for TA (continuing until there is a TA offer, then stop).

    Can the lowest price be considered fair and reasonable when you do not know if the other offers are technically acceptable?

    Suppose that you conduct an LPTA process and you've used the technique described and discussed in "STREAMLINING SOURCE SELECTION: A Labor-Saving Approach To Lowest Price Technically Acceptable Source Selection," The Nash & Cibinic Report (May 2009):

    Quote

    We are always looking for ways to streamline the source selection process, and I recently received a question that reminded us of one interesting way to do so. The question was this: When using the “lowest price technically acceptable” approach to source selection described in Federal Acquisition Regulation 15.101-2, may an agency select the lowest priced technically acceptable offer without evaluating the technical acceptability of all proposals received? For example, if an agency receives 20 proposals, may it identify the proposal with the lowest price, evaluate that proposal's technical acceptability, and, if the proposal is technically acceptable, award the contract without evaluating the technical acceptability of the remaining proposals?

    We think the answer is yes, assuming that the agency is planning to award without discussions.

    Suppose that you are a contract specialist and you conduct such an LPTA. I am your contracting officer and the source selection authority, and you come to me and say:

    We got ten proposals. The lowest priced offeror is technically acceptable, so I recommend award to that firm. The price is $1,570,098.

    Being a pedant, and believing that managing is teaching, I askIs the price fair and reasonable?

    You say: Yes.

    I ask: How did you reach that conclusion?

    You say: Because it's lower than all the other prices.

    How should I respond to that?

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