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California2012

How does an RFP negotiation process actually work?

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So I posted another thread a few days ago on withdrawing a bid prior to award, but thought I should start a separate thread for this topic.

So in negotiated bids (RFPs), can any of you please share how this works in practice?  So the agency or client reaches out to a bunch of offerors who are in the competitive range and tries to get further price concessions?  Is that what's "negotiated"?  During this process, can an offeror actually choose to raise their price - let's say the offeror feels like their proposal is strong technically and warrants a price increase... can this be done, or are the only price revisions downwards?

 

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What can be negotiated?  Everything...pricing...type of contract....other terms and conditions....work requirements (SOW, PBWS, design specifications, etc.) but an agency will usually not negotiate terms and conditions required by policy or regulation.

Upward or downward price revisions?   Either can be negotiated.

Your questions will generate lots of other thoughts but the above are general thoughts to your two questions.

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Some precision in terms may be necessary, as there are all sorts of possible permutations and combinations.

Lane 1:  It the acquisition is conducted under FAR subpart 15.3, Source Selection, then "discussions" may occur.  Generally, discussions are negotiations in a competitive environment initiated by the Government with the intent of obtaining revisions in proposals.  If the Government opens discussions, then theoretically everything can be negotiated, even if the Government indicates it only want to discuss price -- maybe the Government sometimes wants broad negotiations, and maybe other times the Government wants narrow negotiations.  Yes, an offeror (in 15.3, it is an offeror) can revise its price upwards even when the Government is seeking a downward direction.  After discussions are completed, the Government will ask for final proposal revisions and will select the awardee based on those final proposal revisions.  An offeror may withdraw its offer at any time before acceptance.

Lane 2:  If the acquisition is conducted under FAR subpart 8.4, Federal Supply Schedules, the Government may ask for price discounts at any time.  These exchanges are not considered as discussions.  The quoter (in 8.4, it is a quoter) may or may not provide a discount, but it may not raise its price as a discount is always downwards and a raised price might be seen as a new (and unrequested) submission which might be rejected by the contracting officer.  A quoter may withdraw its quote at any time before the Government issues an order; however, in some situations the Government may issue an order unilaterally based on the schedule contract without first seeking a quote.

There are other lanes, each with its own rules.  You can read about them in the FAR (Federal Acquisition Regulation, codified at Title 48 of the Code of Federal Regulations).  The same question may result in different answers depending on the lane (or other particulars of the procurement).  This is why commenters here often ask questions of original posters to get additional information before answering the original question.  

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16 minutes ago, ji20874 said:

You can read about them in the FAR (Federal Acquisition Regulation, codified at Title 48 of the Code of Federal Regulations).

@California2012  Noting your other posts I would like to suggest an additional route.   Not only read the FAR but consider taking a class in the FAR.  See the Home Page header for WIFCON for a couple of entities that have links to their training websites.  Speaking for myself I am always willing to respond in the WIFCON Forum (obviously) but sometimes attempting to provide answers to questions that go to the very foundation of Federal government contracting suggest that some self study and education would be very beneficial.

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8 hours ago, California2012 said:

During this process, can an offeror actually choose to raise their price - let's say the offeror feels like their proposal is strong technically and warrants a price increase... can this be done

yes, but in 99% of cases, this would be a stupid move

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I’ve seen it happen in technical/price tradeoff process acquisitions.  The government conducts discussions on all aspects of offers to ensure the best possible solutions.  Offerors may be told of several technical weaknesses and improving them results in price/cost increases.  In the larger scheme of factor weights/importance, the offeror feels its worth it.

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Piggybacking on C Culham's suggestion, the Defense Logistics Agency administers the Procurement Technical Assistance Program, whose centers provide assistance through workshops, seminars, and individual counseling sessions.  It is available to assist companies that market products and services to all federal agencies.  See http://www.aptac-us.org. 

 

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