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GSA IT 70 Price Proposal FACTS: Small Business withdrew its IT70 offer because the GSA KO refused to accept anything less than its lowest, historical cost plus fixed fee (CPFF) rate in the BOA negotiation. The Small Business does not have any past or current business with commercial customers, so all historical business is with the federal government under broad agency announcement (BAA) or Small Business Innovation Research (SBIR) CPFF contracts. The company does not have a history of time and material (T&M) or labor hour (LH) type contracts. The company develops its cost rates based on the actual salary of an employee combined with the DCAA-approved provisional billing rates (e.g. Overhead, G&A, etc.). Together the company combines the cost rate and the provisional billing rate to create a fully burdened rate. Taking the SW Engineer I category and using hypothetical rates, there could be a span of say $60 - $80 depending on the individual employee's salary and his/her fully burdened rate. For purposes of the GSA IT 70 submission, the company created a blended T&M rate based on its labor categories and historical fully burdened cost rates. However, the GSA KO said the only rate that would be accepted as the BOA negotiation would be its lowest, historical cost rate of say $60/hour. Issue/Concerns: If the company is only allowed to negotiate from its lowest cost rate, it will lose money on every task order. By the time of its first task order award, the lowest paid employee in the labor category has likely received a raise and/or the employee may have already left the company. Moreover, if the company is forced to start negotiations from its lowest cost rate, it will never have room to offer further discounts without taking recurring losses. Question: Why can't the company offer a fair and reasonable, blended T&M rate for SW Engineer I that represents the fully burdened cost rates that the company has charged? The company is not trying to hide its history and clearly shows its math on all its calculations. Moreover, to determine fair and reasonable pricing, the GSA contracting officer may consider many factors, including pricing on competitor contracts, historical pricing, and currently available pricing in other venues. When taken in its totality, the rates that the company proposes are in line and even well below its competitors in similar NAICS categories.
A single-award FSS BPA solicitation asks for both labor categories at the BPA level, discounted from offeror’s GSA FSS, and pricing for certain initial and sample BPA orders based on further discounts from the BPA level labor category rates. There are both fixed price and labor hour BPA orders. While some labor categories for the BPA level are suggested, offerors are free to add their own labor categories at the BPA level for their offers. So different offerors may have different BPA labor categories. The evaluation critera and award basis states that source selection will be conducted using best value trade-off of both price and non-price factors, and that price is less important than all technical factors combined excluding past performance. The methodology for price evaluation states that there will be an evaluation of the offeror’s ability to meet the requirements at a fair and reasonable price, and that as part of this evaluation the “overall BPA pricing” will be evaluated, including the initial and sample BPA orders. Further, the overall evaluated price of the BPA includes the combined total of the total evaluated price for each of the initial and sample BPA orders. Nothing else is explicitly stated regarding the price evaluation. If, as above, it is not explicitly stated in such a FSS BPA solicitation, can cost realism analysis still be performed as a form of cost analysis to eliminate risky offers? One can imagine a hypothetical offeror that prices BPA labor categories with a high price and provides very steep discounts for the initial and sample BPA orders in the solicitation. Then after the BPA contract is awarded to them, the contractor could offer lesser discounts for future BPA orders, making future BPA orders expensive. The fact that, as stated, overall BPA pricing will be evaluated, should discourage this. However, from a practical source selection perspective, it is unclear how this can be done. If, as above, the evaluation methodology only specifically calls out the construction of an “overall evaluated price” made up of the total evaluated prices of all the initial and sample BPA orders, then this does not address evaluation of BPA labor category pricing in a way that would single out the high BPA labor category pricing in such a particular hypothetical offer. Since offerors can add their own labor categories at the BPA level, a sum of all labor category rates wouldn't be comparable. Perhaps an average labor category rate at the BPA level could be comparable, but even that would not be useful as such a hypothetical offeror could add many of their own labor categories and many of these could be low, which would result in a low average rate, even though the most important and useful labor categories would have a high price. And this is perhaps irrelevant anyways since the evaluation methodology doesn’t discuss adding rates or averaging them at the BPA level, or how an evaluation of the "overall BPA pricing" would be weighed in consideration relative to the "overall evaluated price" that is composed of the BPA orders. In the case above, what other ways might there be to evaluate the “overall BPA pricing” and how could that be fit in to the overall price evaluation which includes the evaluation of an "overall evaluated price"?
Funny Quote at http://fcw.com/Articles/2014/05/27/Deltek-contractor-survey.aspx?Page=2. If growth is velocity (speed), then "shrinking growth" would be de-accelerating (slowing down). But what if growth is actually acceleration on the velocity/speed of the federal budget (with distance being the size of the national debt), how do you "de-accelerate" your acceleration (i.e. slow down your speeding up)? Does anyone want to draw a vector diagram? The article concludes on a hopeful note for federal budgets that "growth" will stop shrinking and start growing. But how does this help companies and agencies be "smarter" about decisions? Who defines the concept of smart? Is it relative? If the whole system one day crashes and burns, who will be smart enough to determine the cause of the crash?
Does anyone have any experience with providing the overall budget profile for a given procurement as part of the RFP? We typically give "plug numbers" for things such as ODCs, but this would be a "plug number" for the overall yearly budget profile for the effort. Offerors could deviate from it so long as it is supported in their proposal (e.g., they could propose lower). Please let me know.