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I posted this in the contract administration forum but had no response so I am trying here- I haven't seen this exact question before so here goes....I would for a contractor with GSA schedules and other government contracts. We are a wholly owned subsidiary of Parent, and Parent is owned by a holding company. Immediate parent has two divisions - we'll call them finance and nonsense. There is an effort to combine sales, marketing and delivery efforts of the finance division with my subsidiary because we do similar work, but there is no plan to legally change the structure. We will remain a wholly owned sub. Finance will remain a division - not a subsidiary - of our immediate parent. My questions are as follows: If we market and sell together under a "doing business as" name with no legal change to our corporate structure, do we run the risk of violating the price reduction clause of the false claims act? Suppose we have delivery people who go back and forth between the wholly owned sub and the division, but bill at different rates on different projects. Can a person in the division bill a division client at a rate less than the GSA rate? Does it depend on what their skillset, education and other labor category qualifications are? How similar does the work have to be to trigger the PRC? How similar does the division client need to be to sub's basis of award to trigger the PRC? In short ...can this allow the government to "pierce the corporate veil" and start looking at the books of the parent company when they are trying to determine a BOA or find a PRC violation? I read this on another thread relating to a similar situation: >>This is where GSA and the DOJ have a field day with the False Claims Act. If you withhold disclosure of a customer or group of customers that would have revealed a different BOA, then you can open yourself up to a FCA violation. Also, if you sell to a non-BOA and the price is lower than to your BOA and you did not disclose that information, you could be considered in violation of the FCA because the logic used is that if you had disclosed this other customer or category of customers, they would have been the BOA and not the one declared. << Is this something we need to worry about in the situation I described?
QUESTION: Can an agency just make award to the highest-rated, highest-priced proposal without explaining the "tradeoff"? I saw a recent GAO decision that makes me wonder about this. In Green Earthworks Construction, Inc., B-410724 et al., Feb. 2, 2015, the Air Force issued a solicitation for abatement services for hazardous materials. Here is the link to the GAO decision: http://www.gao.gov/assets/670/668348.pdf The RFP stated that there were only TWO EVALUATION FACTORS: PAST PERFORMANCE and PRICE. Although it did not use the phrase "Performance Price Tradeoff (PPT)," it appears that this was some variation on PPT. The proposals would be ranked from low to high for price. Price analysis would only be conducted on the "lowest-priced proposals." Next, the agency would evaluate for Past Performance. If the lowest-priced proposal also received a "Substantial Confidence" PP rating, then award would be made to that offeror, Otherwise, the PP assessment would continue, beginning with the next lowest-priced proposal, until an offeror with a substantial confidence rating was identified. If that didn't work out, then the SSA was to determine whether additional higher-priced groups of proposals should be considered and to then conduct a "best-value tradeoff." Green Earthworks challenged the source selection decision. GAO denied that challenge, finding that the awardee, All Phase, merited award under the stated terms of the solicitation: All Phase was the only proposal among the lowest-priced group that received a substantial confidence rating: Offeror A, Somewhat Relevant/Satisfactory PP, $2,450,362.00 Green Earthworks (Protester), Somewhat Relevant/Limited confidence PP, $2,487,585.86 All Phase (Awardee), Very Relevant/Substantial Confidence PP, $2,917,515.93 It appears that GAO is saying, no tradeoff was necessary because the RFP said that award would go to the proposal with Substantial Confidence. GAO wrote, "Additionally, to the extent the SSA made a tradeoff decision, we find the source selection decision here to be reasonable." Then GAO goes on to cite FAR 15.308 ("Source selection decisions must be documented, and include the rationale and any business judgments and tradeoffs made or relied upon by the SSA"). However, if you search for the RFP No. FA4620-14-R-B002, it actually shows the RFP was not done under FAR 15, but rather, it was a FAR Part 13 Simplified Acquisition. Link to the solicitation on FBO: https://www.fbo.gov/?s=opportunity&mode=form&id=cdce9fdbdd905d584d9fee2ea7911ba1&tab=core&_cview=1