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Cewheaton

Can Gov ask for detailed pricing of a subcontractor's proposal under a competition?

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I had a competitive RFP out to sever vendors being scored as a best value competition. After the down select was completed and we were moving toward award, my customer (Gov) delayed award stating that not enough information was provided to them (gov) to analyze the vendor's costs, which is resulting in a delay in award.  They wanted a material BOM and other cost detail. They are also requiring us to provide corrective action???

My question - when having a competition, isn't having several responses to an RFP equate to price reasonableness when using a Best value score card? Can a customer request this additional information after the down select to analyze the vendor's costs?

If our customer expected this kind of information, then shouldn't they have requested this in the beginning in the RFP to us as the Prime Contractor? And, if that was the case, we could have made this competition a sealed bid, having the vendor provide sanitized copies of their proposals sent directly to our customer while providing us with the un-santized copy for our score card review.

Appreciate everyone's input.

 

Thank you,

 

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Maybe the Government thought it would be able to establish price reasonableness, but is now unable to do so?

Maybe the solicitation calls for a cost (or price) realism evaluation?

There may be other reasons where the Government would ask for additional data.  But you don’t have to respond if you think the data request is too burdensome or intrusive, and you are willing to risk not being considered further.  

I do not understand your reference to corrective action.  

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Cewheaton , are you the prime on an already awarded contract? If so, what type of contract is it (e.g., fixed price, cost reimbursement, etc.) and what type of action is it (e.g., buyout for a subcontract, subcontracting for a change or other modification, etc.)?

”Vendor” implies buying materials or equipment... If so, is it for commercial equipment   You said “BOM”   Bill of materials?  “Other costs”? 

I can’t tell what the context of your situation is. Thanks 

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4 hours ago, Cewheaton said:

My question - when having a competition, isn't having several responses to an RFP equate to price reasonableness

Yes, in general, having competitive bids from suppliers is considered adequate price competition and provides an exception to those suppliers providing cost or pricing data. Are you required to provide cost or pricing data to your customer? What specifically did the government state was deficient in your process that needed corrective action? Did your company clearly price a BOM?   

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27 minutes ago, Neil Roberts said:

 

Yes, in general, having competitive bids from suppliers is considered adequate price competition and provides an exception to those suppliers providing cost or pricing data. Are you required to provide cost or pricing data to your customer? What specifically did the government state was deficient in your process that needed corrective action? Did your company clearly price a BOM?   

 Neil, I don’t think that the OP mentioned “cost or pricing data“ At any rate if the customer is questioning the  reasonableness of a subcontract it could request data other than cost or pricing data.  I think we need some clarification of the context of the question and situation. 

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Hmmmm, Bob addressed this I believe:

"Format for writing Questions

Write your issue, scenario, or facts in the first part of your post.  If your background is long, break up your thoughts with paragraphs.  If you use an acronym that others may not recognize, like ADHD, write it like this Attention Deficit Hyperactivity Disorder (ADHD). You don't have to worry about the FAR or DFARS because this is a contracting forum.  Make sure you identify any regulation, law, etc. by citation.  After you've written your facts, then write your  questions in a new section below the facts.  To distinguish one question from another, use the indent with the numbers in the bar at the top of the typing area.  Click it with your mouse and the number will appear.  Write your first question and, if you have more questions, hit the enter button and the number 2 will appear.  If you have more questions, repeat."

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On 8/5/2019 at 7:23 AM, Cewheaton said:

I had a competitive RFP out to sever vendors being scored as a best value competition. After the down select was completed and we were moving toward award, my customer (Gov) delayed award stating that not enough information was provided to them (gov) to analyze the vendor's costs, which is resulting in a delay in award.  They wanted a material BOM and other cost detail. They are also requiring us to provide corrective action???

My question - when having a competition, isn't having several responses to an RFP equate to price reasonableness when using a Best value score card? Can a customer request this additional information after the down select to analyze the vendor's costs?

If our customer expected this kind of information, then shouldn't they have requested this in the beginning in the RFP to us as the Prime Contractor? And, if that was the case, we could have made this competition a sealed bid, having the vendor provide sanitized copies of their proposals sent directly to our customer while providing us with the un-santized copy for our score card review.

Appreciate everyone's input.

 

Thank you,

 

How does one appreciate everyone’s input if they won’t respond to requests for clarification? 

Drive by questioner, it appears. 

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On ‎8‎/‎5‎/‎2019 at 5:23 AM, Cewheaton said:

I had a competitive RFP out to sever[al] vendors being scored as a best value competition. After the down select was completed and we were moving toward award, my customer (Gov) delayed award stating that not enough information was provided to them (gov) to analyze the vendor's costs, which is resulting in a delay in award.  They wanted a material BOM and other cost detail. They are also requiring us to provide corrective action???

...

If our customer expected this kind of information, then shouldn't they have requested this in the beginning in the RFP to us as the Prime Contractor? And, if that was the case, we could have made this competition a sealed bid, having the vendor provide sanitized copies of their proposals sent directly to our customer while providing us with the un-santized copy for our score card review.

Despite the OP's lack of participation, I'm interested in this scenario. I'm guessing (without a lot to go on) that this has something to do with advance consent. If so, the CO may well be justified in requesting detailed subK information (see, e.g., FAR 44.202-2(a)(8)). As many know better than I do, the consent requirements may apply in many subK award scenarios, depending on factors such as whether the contractor has an approved purchasing system, proposed subK type, and dollar value. ("The contracting officer may require consent to subcontract if the contracting officer has determined that an individual consent action is required to protect the Government adequately because of the subcontract type, complexity, or value, or because the subcontract needs special surveillance.") Anyway, just guessing here -- but it would make the OP make more sense (to me, anyway).

The other interesting aspect of this scenario is the apparent desire of the prime contractor to prevent the government customer from seeing the subK's detailed proposal. Why? What is the contractor hiding? What is the subK hiding?

I get the feeling that, if this is really a consent to subcontract situation, the CO may be on to something fishy in this particular proposed subK award.

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5 hours ago, here_2_help said:

Despite the OP's lack of participation, I'm interested in this scenario. I'm guessing (without a lot to go on) that this has something to do with advance consent. If so, the CO may well be justified in requesting detailed subK information (see, e.g., FAR 44.202-2(a)(8)). As many know better than I do, the consent requirements may apply in many subK award scenarios, depending on factors such as whether the contractor has an approved purchasing system, proposed subK type, and dollar value. ("The contracting officer may require consent to subcontract if the contracting officer has determined that an individual consent action is required to protect the Government adequately because of the subcontract type, complexity, or value, or because the subcontract needs special surveillance.") Anyway, just guessing here -- but it would make the OP make more sense (to me, anyway).

The other interesting aspect of this scenario is the apparent desire of the prime contractor to prevent the government customer from seeing the subK's detailed proposal. Why? What is the contractor hiding? What is the subK hiding?

I get the feeling that, if this is really a consent to subcontract situation, the CO may be on to something fishy in this particular proposed subK award.

You may be right, H2H. Might be something fishy or might be just an amount that appears to be very high, regardless of whether or not there was some price competition.

At any rate, I don’t agree with the generalized statement: 

“Yes, in general, having competitive bids from suppliers is considered adequate price competition”. 

For instance, If all prices are seemingly high, there may be something wrong with the competition or the scope, description or something else...

 

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1 hour ago, joel hoffman said:

You may be right, H2H. Might be something fishy or might be just an amount that appears to be very high, regardless of whether or not there was some price competition.

At any rate, I don’t agree with the generalized statement: 

“Yes, in general, having competitive bids from suppliers is considered adequate price competition”. 

For instance, If all prices are seemingly high, there may be something wrong with the competition or the scope, description or something else...

 

For clarity on "adequate price competition" I suggest a read of FAR 15.403-1(c) and 15.403-3(b).

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15.403-1(c) (1)(i) Concerns adequate price competition, specifically with regard to an exception to providing “certified cost or pricing data.”  This at least implies that the pricing action exceeds the [formerly named] TINA threshold. 

 

Quote

...and (C) There is no finding that the price of the otherwise successful offeror is unreasonable. Any finding that the price is unreasonable must be supported by a statement of the facts and approved at a level above the contracting officer. 

Quote

 

15.403-3

...(b) Adequate price competition. When adequate price competition exists (see 15.403-1(c)(1)), generally no additional data are necessary to determine the reasonableness of price. However, if there are unusual circumstances where it is concluded that additional data are necessary to determine the reasonableness of price, the contracting officer shall, to the maximum extent practicable, obtain the additional data from sources other than the offeror. In addition, the contracting officer should request data to determine the cost realism of competing offers or to evaluate competing approaches

 

 

Note that adequate price completion doesn’t exist under 15.403-1(c) (1)(i) if the government finds that the price is unreasonable. And if it is concluded that additional data are necessary to determine the reasonableness of price under 15.403-3(b), the government might request other than cost or pricing data to determine the reasonableness of the price.

In addition for competing offers under 14.403-(b), the government should request additional information to determine cost realism (generally cost contracts) or to evaluate competing approaches. 

I’m not sure that “clarity” is the appropriate term associated with the above language. Is it “clear” that said language concerns any level of pricing or is it “clear” that it concerns just those pricing actions above the [formerly named] TINA thresholds? 

Look -  If the government feels that the proposed subcontract price appears to be unreasonably high or unrealistically low, it can ask for additional information, if necessary to obtain from the concerned firm(s), to evaluate, competition or no competition.

It should be apparent that the government would likely have some independent basis to question the proposed prices or quantities or what is being priced/proposed (e.g., does the product or subcontract meet the technical requirements/scope of the solicitation? Do the types and quantities of materials meet the requirement - e.g., “BOM/other costs”? )  in such cases. 

Thus,  I have reservations with the term “generally” - especially when we don’t know the context of the question or situation.  

There can be no “clear” answer to an unclear question or undefined scenario. 

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13 hours ago, joel hoffman said:

There can be no “clear” answer to an unclear question or undefined scenario.

Agreed.  There are so many unanswered questions here that any attempted answer will be based on pure speculation.  I can see some scenarios where the government is clearly wrong and others where the government is acting properly.  Thus, to me the answer to the original question is it depends on what the facts are.

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Give Cewheaton a bit of time.  OP posted early morning Monday.  May be on travel, vacation etc.  If there is nothin from Cewheaton by Tuesday of next week . . . .

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This Topic is closed in accordance with Rule 15:

15.  If the original poster abandons the original post for a significant period of time, the topic may be removed or closed.

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