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TyroneSlothrop

Evaluating a pricing at a BPA level when the evaluation methodology is not specific

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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"?

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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?...

See Goel Services, Inc. in association with Grunley Construction Co., Inc., GAO Dec. B-404168, 2011 CPD ¶ 59. January 12, 2012:

Before awarding a fixed-price contract, an agency is required to determine whether the price offered is fair and reasonable. FAR sect. 15.402(a). An agency's concern in making this determination in a fixed-price environment is primarily whether the offered prices are too high, as opposed to too low, because it is the contractor and not the government that bears the risk that an offeror's low price will not be adequate to meet the costs of performance. Sterling Servs., Inc., B–291625, B–291626, Jan. 14, 2003, 2003 CPD para. 26 at 3. An agency may, in its discretion, provide for a price realism analysis for the purpose of assessing whether an offeror's price is so low as to evince a lack of understanding of the contract requirements or for assessing risk inherent in an offeror's approach. METAG Insaat Ticaret A.S., B–401844, Dec. 4, 2009, 2010 CPD para. 86 at 6. However, offerors competing for award of a fixed-price contract must be given reasonable notice that a business decision to submit a low-priced proposal will be considered as reflecting on their understanding or risk associated with their proposal. Milani Contru., Inc., B–401942, Dec. 22, 2009, 2010 CPD para. 87 at 4; CSE Constr., B–291268.2, Dec. 16, 2002, 2002 CPD para. 207 at 4–5. Where a solicitation for a fixed-price contract omits a provision for realism but requests detailed cost or pricing information, we have found that an agency may properly consider whether an unreasonably low price poses proposal risk if the solicitation, if either the technical or price factors, provides for the evaluation of an offeror's understanding of the requirements. METAG Insaat Ticaret A.S. supra; SEEMA, Inc., B–277988, Dec. 18, 1997, 98–1 CPD para. 12 at 5. Conversely, where the solicitation lacks either a technical or price evaluation factor that provides for the offerors' understanding of the requirements, and the solicitation also does not require detailed cost or pricing information, then the agency may not consider whether unreasonably low prices pose proposal risk. Milani Constru., Inc., supra,; CSE Constr., supra.

As for "overall BPA pricing," I have no idea what the agency meant by that phrase. People who use phrases like "overall BPA pricing" and "overall evaluated price" without explaining what they mean are pests.

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I would venture to say that since this is a best value award and the award criteria is fairly murky, it seems likely to me that this is being aimed at a specific awardee. If there's an incumbent, that's a good place to start.

Good luck!

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I am thinking that Vern's quote is very appropriate in the case of the OP where it is stated that "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." along with noting that the solicitation is supposedly GSA FSS based.

The following quote as taken from GSA's FAQ might suggest that the solicitation is more closely associated with all the requirements of FAR Part 15 than FAR Subpart 8.4 thereby explaining why the pesky agency has stated "overall BPA pricing".

"In accordance with FAR 8.402(f), for administrative convenience, an ordering activity contracting officer can add items not on the GSA Schedule contract — i.e., open market items — to a GSA Schedule Blanket Purchase Agreement (BPA) or an individual task or delivery order only if:

  • All applicable acquisition regulations pertaining to the purchase of the items not on the GSA Schedule contract have been followed (e.g., publicizing (FAR Part 5), competition requirements (FAR Part 6), acquisition of commercial items (FAR Part 12), contracting methods (FAR Parts 13, 14, and 15), and small business programs (FAR Part 19);
  • The ordering activity contracting officer has determined the prices for the items not on the GSA Schedule contract are fair and reasonable;
  • The items are clearly labeled on the order as items not on the GSA Schedule contract; and
  • All clauses applicable to items not on the GSA Schedule contract are included in the order."

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