Software Pricing during Recompete

[Guest jrt132]

Would an incumbent contractor be allowed to propose commercial software licenses to the Gov?t, at a discount from GSA pricing, during a re-competition, while proposing GSA pricing for the same licenses to other competitors in the acquisitions? To provide a little background, the current contract has a contractor providing proprietary commercial software and then development, integration, and sustainment of the software. The current contract is due for a re-competition and any party wishing to propose for the recomplete will be required to purchase software licenses and maintenance from the incumbent contractor as part of their proposal to the Government. As the incumbent, we have told the Government we would provide proposals for software licenses to all the prospective offerors utilizing our GSA pricing to keep the pricing fair for everyone. This was a major issue for the Gov?t because they believed the perceived ability to price some competitors out of the acquisition could provide grounds for protest.

I work for the incumbent and we are trying to assess how to handle RFPs coming from competitors on the acquisition while developing a proposal for the same effort. The overall cost of the licenses are small relative to the total acquisition, but we want to make sure we don?t break any rules or inadvertently supply grounds for a protest. A colleague and I think there isn?t much of an issue, but it doesn?t hurt to ask.

Thank you in advance for your responses.

[formerfed]

Why doesn't the government just acquire additional licenses and provide the software as GFP?

[Guest jrt132]

Why doesn't the government just acquire additional licenses and provide the software as GFP?

That is a great question and if I was the CO or on the Government team I would probably recommend that approach.

[Heretalearn]

Once again I'm not entirely sure I understand the question, but I'm going to give this a stab since no one else has yet. I'm sure someone more knowledgeable will correct me if I'm answering incorrectly or answering the wrong question. I'm assuming you're talking about a GSA Multiple Award Schedule.

You need to look at your Price Reduction clause and your Commercial Sales Practices Format. As I understand it, you can't give a commercial customer a discount in violation of these, even if the end result benefits the procuring agency. My company tried to negotiate the ability to give our GSA schedule rates to bidders for prime task orders only in instances where we would have provided services to them as a sub under the GSA task order for which they were competing. We attempted to incorporate this as an element of our Commercial Sales Practices Format. The CO found this to be unacceptable on the basis that GSA must receive our best price. Period.

Our schedule has one exception, in that the price reduction clause isn't triggered by lower-price commercial orders which exceed our schedule's Maximum Order provision.

I hope this helps, even if only to involve one of the members who REALLY knows what he/she's talking about.

[Whynot]

If I understand the question, the vendor (incumbent) wants to bid as a prime and at the same time also quote their SW to other bidders (competitors), and wants to know if they can price the SW in their bid differently (lower) than what they quote to other bidders. The GSA price has nothing to do with this question other than to establish a reasonable price to quote to the other bidders.

The answer is yes.

If the government thinks that this element of the bid gives the incumbent an unfair advantage, the government can neutralize or otherwise normalize the pricing of the SW in their evaluation.

[Guest jrt132]

If I understand the question, the vendor (incumbent) wants to bid as a prime and at the same time also quote their SW to other bidders (competitors), and wants to know if they can price the SW in their bid differently (lower) than what they quote to other bidders. The GSA price has nothing to do with this question other than to establish a reasonable price to quote to the other bidders.

The answer is yes.

If the government thinks that this element of the bid gives the incumbent an unfair advantage, the government can neutralize or otherwise normalize the pricing of the SW in their evaluation.

Whynot,

Your summary of my questions is correct and thank you for the simplification of the question. The only issue with your recommendation, first response too, is it relies on the Government. As the current prime contractor and hopefully the next prime contractor we are trying our best to comfort the Government for potential protest in the form unfair advantages. In our company, for example, see this situation posed above as a competitive advantage arising from being the incumbent and not a protest related issue.

Thanks