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I don't think it would be in the "best interests of the Government" to let individual COs or contracting offices establish formulaic price preferences when placing orders against GSA FSS contracts. That's not the same as making an analytical best value decision based on proposal evaluations and comparisons.

If the only evaluation factors were price and socioeconomic status (currently permissible under FSS ordering procedures), it wouldn't be much different. The only difference is that you would be disclosing how much more you'd be willing to pay for a desired socioeconomic status in the solicitation.

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FAR 8.405-5( c) says:

"Ordering activities may consider socio-economic status when identifying contractor(s) for consideration or competition for award of an order or BPA."

FAR 8.405-5(d) then says:

"For orders exceeding the micro-purchase threshold ordering activities should give preference to the items of small business concerns when two or more items at the same delivered price will satisfy the requirement."

When I read those two adjacent paragraphs, I do not get the impression that a CO may declare an intention to pay a 6 premium in order to award to a small bisiness. Do you?

In my opinion, you have been attributing way too much weight to the first sentence and ignoring the second. It seems to me that the second sentence indicates that a formulaic 6 percent price evaluation preference is not consistent with established policy.

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As we discussed by phone, I think that FAR 8.405-5( d ) only makes sense if price were the only factor. If the evaluation factors were price and past performance, for example, it would be permissible to give preference to a large business with superior past performance even if both the large and a small business proposed the same delivered price.

As you suggested, I will contact GSA to get an interpretation of their acquisition letter. I will post what I find here.

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Good morning, Yesterday, i spoke at length with my contact at GSA. I wanted to get their take on a price preference. Ultimately he said, GSA had nothing supporting or discouraging what I was thinking. Because of the conversation I relaized GSA might not be a viable option. If I'm procuring on GSA chances are I'm going to be able to set-aside, 80% of the contractors on GSA are Small. On a set-aside, a Price Preference isn't going to be needed. So now i'm back to an Unrestricted solicitation in the Open Market.

Also because of the call, Initially I thought this would only benefit on an LPTA evaluation; a Trade Off also seems plausible. As everyone knows, within a TO you list various factors that are more important than price. What happens if I simply include Socio status as more important than price?? Within reason.

The reason I am belaboring this so much is that Small Businesses are a powerful tool to our economy. Collective SB's employ more people than collectivel LB's. The more SB's we have, the more people are employed, the more tax revenue into theTreasury! At that, I'll be the first to admit this sounds great on paper, but I haven't seen a silver bullet saying Yes or No to the Price Preference I'm thinking of.

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That's great Mom and apple pie. But is a 6 percent price premium a good idea when you don't have enough small businesses to warrant a set-aside and to ensure competition among small businesses?

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Yes! Remember, it's UP TO 6%. It won't necessarily be the full 6%. I can sleep at night allowing for this percentage. My issue still remains if it's formally frowned upon.

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Yes! Remember, it's UP TO 6%. It won't necessarily be the full 6%. I can sleep at night allowing for this percentage. My issue still remains if it's formally frowned upon.

Any frowns that count would be on grimaces seen at the GAO and / or COFC.

Issue a solicitation; see if you get a timely protest; await the decision.

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There are several seasoned people here who do not like your idea, me included, and we have looked everywhere we can think of in an attempt to find something that says you cannot do it. We have found nothing.

Get on with it.

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...and it's 6 percent because you spoke with somebody at the "FAR Counsel" who said that there is a 6% preference for domestic producers vs. non-domestic producers, which is something entirely different that a perceived price advantage for large business vs. small business. That is not any justification for what you are proposing to do. The 6% is to protect domestic producers. You don't have any data to justify what you want to do as a PERSONAL policy.

Geez, its no wonder our Government is in such deep trouble. Spendthrifts abound...

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...and it's 6 percent because you spoke with somebody at the "FAR Counsel" who said that there is a 6% preference for domestic producers vs. non-domestic producers, which is something entirely different that a perceived price advantage for large business vs. small business. That is not any justification for what you are proposing to do. The 6% is to protect domestic producers. You don't have any data to justify what you want to do as a PERSONAL policy.

Geez, its no wonder our Government is in such deep trouble. Spendthrifts abound...

Joel,

I think you may be judging too hastily. The 6% is not because he spoke with somebody at the FAR Council who said that there is a 6% preference for domestic producers vs. non-domestic producers, it's because FAR 25.105( B)(1) and (2) provide a 6% preference for a domestic small business vs. a domestic large business. Read Post #8 again, and FAR 25.105. You will likely still disagree with the approach, but at least do it acknowledging the actual rationale presented for using the 6% factor.

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Joel,

I think you may be judging too hastily. The 6% is not because he spoke with somebody at the FAR Council who said that there is a 6% preference for domestic producers vs. non-domestic producers, it's because FAR 25.105( B)(1) and (2) provide a 6% preference for a domestic small business vs. a domestic large business. Read Post #8 again, and FAR 25.105. You will likely still disagree with the approach, but at least do it acknowledging the actual rationale presented for using the 6% factor.

Ok, sorry - my bad. But its still not a direct comparison between domestic large and small business firms. You compare the lowest domestic offer with the lowest offer, if that offer doesnt qualify as a domestic offer.

Yes - domestic small businesses get a better preference vs. a non-qualifying offer than a large business would - but only if they are the lowest domestic offer that isnt the lowest overall offer. The domestic small business doesn't displace a large business offer in the price comparison with the non-qualifying offer. Am I correct in my reading of 25.105? Thus, under 25.105, a domestic small business doesnt bump a domestic large business offer that was lower, right?

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Navy_Contracting_4,

FAR 25 gives a higher preference to doemstic small vs. non-domestic than it does to domestic large vs. non-domestic (increasing the non-domestic price by 12% vs. 6%). It does not establish a 6% preference between domestic small and domestic large businesses.

gmdubya,

If you intend to award using the LPTA method, you have concluded that best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price--how would a higher priced small business then become the best value?

If you intend to award using the trade-off method, the perceived benefits of the higher priced proposal have to merit the additional cost.

As has been stated numerous times before, you have no basis for determining that your 6% premium is warranted (or that an award to a small business would result in greater tax revenue in an amount greater than that premium than would an award to a large business ).

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If agencies have to furlough government employees because of the deficit/budget crisis, I have a nominee for the first round of layoffs, and for the second and third.

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Navy_Contracting_4,

FAR 25 gives a higher preference to doemstic small vs. non-domestic than it does to domestic large vs. non-domestic (increasing the non-domestic price by 12% vs. 6%). It does not establish a 6% preference between domestic small and domestic large businesses.

wifcon1,

A distinction I overlooked in my haste to respond to Mr. Hoffman. How ironic that I responded too hastily while criticizing someone else for responding too hastily. Mea culpa. Thank you for the correction.

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If you intend to award using the LPTA method, you have concluded that best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price--how would a higher priced small business then become the best value?

Because the "evaluated price" of the large business would be the proposed price + 6%.

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I do not know if I count as seasoned but I do have to say that I am thoroughly confused by the scenario that has been put forth and in the end firmly question the approach as it seems that to satisfy mom and apple pie that the answer after all the churn on this thread should be - DO A SMALL BUSINESS SET ASIDE(ref: FAR 19.502-2)!

Why?

gmdubya post #3 where it is stated "I'm looking at situations that haven't uncovered any (maybe one is out there, but wasn't found) or only 1 Small Business." Then gmdubya post #29 where it is stated - "Because of the conversation I relaized GSA might not be a viable option. If I'm procuring on GSA chances are I'm going to be able to set-aside, 80% of the contractors on GSA are Small." For this reason I am lead to the conclusion that gmdubya's reasoning to pose the question was based on a faulty premise that went out the door with post #29.

As to the idea of preference if in fact it was found that through specific market research that could determine a reasonable expectation that offers will not be obtained from at least two responsible small business concerns and award would not be made at fair market prices the idea of a preference is still not reachable based on “the best interests of the Government”.

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Don, going back to your post #22, I don't think 15 U.S.C. 644(a) gives individual contracting officers or even individual contracting activities authority to use such a price evaluation preference. Note that it says "small-business concerns within the meaning of this chapter shall receive any award or contract or any part thereof . . . as to which it is determined by the Administration and the contracting procurement or disposal agency . . . to be in the interest of assuring that a fair proportion of the total purchases and contracts for property and services for the Government in each industry category are placed with small-business concerns." To me, this indicates that whatever process is used to award contracts to small businesses must be established by the SBA and procuring agency, not individual contracting officers or offices.

As to what playing field gmdubya is trying to level, congress has already determined how the procurement playing field is to be leveled by mandating full and open competition, unless another process is authorized by law. Further, the procedures to be followed in awarding contracts using full and open competition are those set forth in the FAR. In this regard, I do not see anything in the FAR that permits proposals to be evaluated differently for different classes of offerors unless such differing treatment is specifically authorized by law or a properly promulgated regulation such as the requirement to have a small business subcontracting plan.

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