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Old3044

USG Requests BAFO After Requesting Certified Cost or Pricing Data

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I'm wondering if any one else has any experience with this particular circumstance.  1). Our PCO requested certified cost or pricing data after submittal of our proposal.  2). Once the cost or pricing data had been reviewed, they then asked for a BAFO.  As a prior USG PCO, I had never seen source selection performed in this manner.

How do you present a lower "Best and Final" after you've just certified your costs?  The only thing I can think to adjust was the profit margin which was already extremely low.

My main concern was creating the appearance of "fluffing" our original price if a BAFO was significantly lower than the pricing to which we provided certified cost or pricing data.  It kind of felt like a trap.  Any insight/advice would be appreciated.

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You don't "certify your costs" when you execute a certificate of current cost or pricing data. You certify that the facts that formed the basis for your cost estimate are accurate, current, and complete. These facts can be used to make both optimistic or pessimistic estimates of future costs, depending on the judgment that you apply. You can re-estimate your costs to arrive at a more optimistic cost estimate in the BAFO, lower your profit, or both. This doesn't necessarily require you to recertify your cost or pricing data.

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This looks strange. One would generally certify the currency of the cost or pricing data after negotiating and agreeing upon a price. Did y'all negotiate and agree on a price before certifying ?  Did you even negotiate the price?? 

However, you also said that this is a "source selection" , which is a competitive acquisition process. See subpart 15.1  Competitive acquisitions are usually exempt from submission of "cost or pricing data" or "certifying" the accuracy of "cost or pricing data". 

Notes under 15.406-2 Certificate of Cost or Pricing, paragraph  (a):

"**Insert the day, month, and year when price negotiations were concluded and price agreement was reached or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price."

"***Insert the day, month, and year of signing, which should be as close as practicable to the date when the price negotiations were concluded and the contract price was agreed to..."

And 15.406 (d): "Possession of a Certificate of Current Cost or Pricing Data is not a substitute for examining and analyzing the contractor's proposal."

Finally the government requested a "best and final offer" after you supposedly certified the accuracy of the Cost or pricing data. 

I am confused as to what processes were used here and what the sequence of events was.

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11 hours ago, Don Mansfield said:

You don't "certify your costs" when you execute a certificate of current cost or pricing data. You certify that the facts that formed the basis for your cost estimate are accurate, current, and complete. These facts can be used to make both optimistic or pessimistic estimates of future costs, depending on the judgment that you apply. You can re-estimate your costs to arrive at a more optimistic cost estimate in the BAFO, lower your profit, or both. This doesn't necessarily require you to recertify your cost or pricing data.

Thanks for that, I'll review the applicable FAR and see if I interpret it the same way.  The USG has requested that we re-certify our cost and pricing data when we submit the BAFO.  

Joel, It was solicited publicly and we submitted our proposal.  About two months later, they requested the CoPD.  After another two weeks, they requested a BAFO with a "Cover Page in accordance with FAR 15.406-2 for Certified Cost and Pricing Data".   There was no negotiation unless you can consider their BAFO request a negotiation tactic.  The industry is small with well established competitors, the USG hasn't performed an actual negotiation in years.  

The contract is for non-commercial items for USG use only and at least three business concerns that regularly bid on these requirements.  I know the "reasonable expectation of competition" rule has been tossed out for fair and reasonable price determinations by the the FAR council but I have a hard time imagining that they only received one bid.  If they did receive more than one bid, why are they asking for certified CoPD then follow that up with a request for a BAFO that also needs to be certified?

I'm unsure if the application of FAR is changing and my approach is antiquated or if I'm dealing with inexperienced KOs that could possibly be educated.

 

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1 hour ago, Old3044 said:

Thanks for that, I'll review the applicable FAR and see if I interpret it the same way.  The USG has requested that we re-certify our cost and pricing data when we submit the BAFO.  

Joel, It was solicited publicly and we submitted our proposal.  About two months later, they requested the CoPD.  After another two weeks, they requested a BAFO with a "Cover Page in accordance with FAR 15.406-2 for Certified Cost and Pricing Data".   There was no negotiation unless you can consider their BAFO request a negotiation tactic.  The industry is small with well established competitors, the USG hasn't performed an actual negotiation in years.  

The contract is for non-commercial items for USG use only and at least three business concerns that regularly bid on these requirements.  I know the "reasonable expectation of competition" rule has been tossed out for fair and reasonable price determinations by the the FAR council but I have a hard time imagining that they only received one bid.  If they did receive more than one bid, why are they asking for certified CoPD then follow that up with a request for a BAFO that also needs to be certified?

I'm unsure if the application of FAR is changing and my approach is antiquated or if I'm dealing with inexperienced KOs that could possibly be educated.

 

Ok, it’s for a non-commercial item or items. Is it an item(s) of supply ?

What information did you you initially submit with your “proposal” (using your term in your initial post)? Was it price only ? Or was it price(s) with technical information concerning the product(s), and/or concerning your qualifications and/or experience and/or past performance?

What was the stated basis of award?

For example, if both price and non-price information was required, did they identify the relative importance of cost and non-cost factors? 

For example, was it lowest -priced technically acceptable offer or something to that effect? Or was it just lowest price? Or did they state that both price and non-price would be used to determine the “best value” or something to that effect?

By the way, in your last post, you said that, after two months,  they asked for “COPD”, I take to mean cost or pricing data - not “certified cost or pricing data” at that point. I’m guessing that they wanted to see the basis of your pricing. Perhaps you were the only proposer. If not, then they should not have used the term “cost or pricing data” in the request for the breakdown or pricing data. If they asked for the basis of pricing then (normally) they should use it as part of a negotiation process. 

The scenario suggests that they evaluated your data and price as a sole proposer and may have concluded or may have been able to conclude that the price is fair and reasonable but want to solicit a “best and final offer” (a term that hasn’t been used in the FAR since 1997). 

If there was adequate competition from one or more of the three firms that usually provide this item(s), then -normally - “certified cost or pricing data” is not required and there is an exemption - the KO is not supposed to require it either.

I’m trying to determine the specific scenario before making specific conclusions.

Government agencies can often use incorrect terms and mix up procedures. 

 

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The above is based upon an assumption that this government agency and the procurement are subject to the Federal Acquisition Regulations... 

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9 minutes ago, joel hoffman said:

Ok, it’s for a non-commercial item. Is it an item of supply ?

What information did you you initially submit with your “proposal” (using your term in your initial post)? Was it price only ? Or was it Price(s) with technical information concerning the product(s), and/or concerning your qualifications and/or experience and/or past performance?

What was the stated basis of award?

For example, if both price and non-price information was required, did they identify the relative importance of cost and non-cost factors? 

For example, was it lowest -priced technically acceptable offer or something to that effect? Or was it just lowest price? Or did they state that both price and non-price would be used to determine the “best value” or something to that effect?

By the way, in your last post, you said that, after two months,  they asked for “COPD”, I take to mean cost or pricing data - not “certified cost or pricing data” at that point. I’m guessing that they wanted to see the basis of your pricing. Perhaps you were the only proposer. If not, then they should not have used the term “cost or pricing data” in the request for the breakdown or pricing data. 

The scenario suggests that they evaluated your data and price as a sole proposer and may have concluded that the price is fair and reasonable but want to solicit a “best and final offer” (a term that hasn’t been used in the FAR since 1997). 

If there was adequate competition from one or more of the three firms that usually provide this item(s), then -normally - “certified cost or pricing data” is not required and there is an exemption - the KO is not supposed to require it either.

I’m trying to determine the specific scenario before making specific conclusions.

Government agencies can often use incorrect terms and mix up procedures. 

 

It is a FAR acquisition for supplies, no "other transactional authority" (OTA) involved.  The solicitation was pretty standard and included past performance, price, technical approach with three sub categories, and all associated reps & certs.  Their eval criteria was "Best Value with LPTA" which I have only ever seen used on two separate occasions, this one included.  I always thought it was one or the other and combining Best Value with LPTA was contradictory.  I did mean certified cost or pricing data when referencing CoPD, that was a mistake by omission on my part.  

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50 minutes ago, Old3044 said:

Their eval criteria was "Best Value with LPTA" which I have only ever seen used on two separate occasions, this one included.  I always thought it was one or the other and combining Best Value with LPTA was contradictory.  

Take a look at FAR 15.101.  “Best value” isn’t a method.  You’re confusing best value with trade off. It’s a common mistake so don’t feel bad.

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Just now, formerfed said:

Take a look at FAR 15.101.  “Best value” isn’t a method.  You’re confusing best value with trade off. It’s a common mistake so don’t feel bad.

"Best Value" is a common colloquialism utilized by many KOs, so much so that it is being used in their solicitations.  It may not appear in FAR 15.101, but it is being used in practical application when developing the solicitation's narrative for evaluation criteria.

It's their term from the solicitation, not mine.  I feel like if I pointed this out to them, they'd think I was being a smartypants.

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1 hour ago, Old3044 said:

It is a FAR acquisition for supplies, no "other transactional authority" (OTA) involved.  The solicitation was pretty standard and included past performance, price, technical approach with three sub categories, and all associated reps & certs.  Their eval criteria was "Best Value with LPTA" which I have only ever seen used on two separate occasions, this one included.  I always thought it was one or the other and combining Best Value with LPTA was contradictory.  I did mean certified cost or pricing data when referencing CoPD, that was a mistake by omission on my part.  

Ok, so it is a low price technically acceptable, best value acquisition. I can only surmise that you might be the only proposer, so they are using some (bastardized) process to either determine or to document that they are receiving a fair and reasonable price. However it would be dangerous to conclude that you were the only proposer, so there may be other competitors. My question to you and to the government would be what date would you use on a “certificate of current cost or pricing”? If they asked you for a best and final offer with your certificate of current cost or pricing data, there could’ve been no agreement (or for that matter, no practical utility for the certificate) as of the date of the BAFO.

My advice to you at this point would be, if you want the business, assume that there is competition and give them your best price.

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As an aside, even at the point  when they first asked for “certified cost or pricing data” ,   It would be unnecessary and useless to actually certify that data at that point in the acquisition if both parties follow the instructions for the certificate. The certification is generally supposed to be based upon and be provided after agreement on the contract price. I may be wrong here. If someone else disagrees,  they can explain why.

Unless the government is totally inept, my guess is that you are the only offeror or proposer but they don’t want you to know that - But it would be unwise for you to assume that without further knowledge of the competition.

it may be wise just to do what they say to do. I would probably date a certificate as of the date you submit your ”BAFO”.

If there is in fact competition, I don’t think certificate of current cost or pricing would be enforceable. If you are the only proposer, and if it is Somehow enforceable, it may well be in your best interests to use a Date that is as early as possible.

Since they are only asking for a cover sheet with the certificate, not new COPD, what “data”are you certifying with a “Best and Final Offer”? 

Sheesh! 

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Question for contracting officers in the room: When you request a Best and Final Offer, do you have an expectation that the offeror(s) will come back with lower pricing? What happens if they simply respond with "no change from prior"? What happens if they increase their offers?

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Joel, I'm as confused by their approach as you are.  I really appreciate the insight, at the very least it confirmed that I'm not nuts for thinking this is odd and unusual.  Your responses were well thought out and helpful.  I've got a bit of reading to do with all you've provided and I'll definitely be back with the next perplexing amalgamation of regs and eval criteria!

The procurement offices have shifted their methodologies over the past year and it feels like they are doing whatever they want with little regard for actual FAR.

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For a competitive LPTA acquisition, there is no requirement for certified cost or pricing data -- indeed, cost or pricing data are not allowed in such a case.  FAR 15.403-1(c)(1).

There can be no certificate unless there is supporting data.  Did you submit cost or pricing data as part of your proposal?  Afterwards?

Possible responses:

  • We are surprised by your request for cost or pricing data, and a certificate of current cost or pricing data.  We understand that the Government is prohibited by statute from requesting cost or pricing data (or a certificate) if adequate price competition exists.  See FAR 15.403-1(b).  Please verify that you require us to submit cost or pricing data (and a certificate).  If so, we will submit a price revision in Table 15-2 format amenable to your request.  We will also submit a blank certificate, because one of the fill-ins is supposed to be the date when price negotiations are concluded and price agreement is reached.  We will provide a completed certificate when you tell us the date of your acceptance of our revised price.
  • Inasmuch as this was a competitive LPTA acquisition, we did not develop our prices in the Table 15-2 format.  This is a rather burdensome format, and it will take some time to complete it.  We cannot guarantee that the resulting price will match our already-offered-in-competition price.  Is it okay with you if our BAFO price, in Table 15-2 format, is higher than our already-offered-in-competition price?

I am not recommending any of these, as I do not know enough facts.  But they did come to my mind while reading the original posting and the thread of comments.

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1 hour ago, here_2_help said:

Question for contracting officers in the room: When you request a Best and Final Offer, do you have an expectation that the offeror(s) will come back with lower pricing? What happens if they simply respond with "no change from prior"? What happens if they increase their offers?

The truly best way, or perhaps professional way of addressing this is to conduct discussions on all the pertinent issues.  Hopefully that results in mutual agreements.  Then discussions are concluded with a request for final proposal revisions.  BAFO hasn’t been in the regulations for years. 

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1 hour ago, Old3044 said:

Joel, I'm as confused by their approach as you are.  I really appreciate the insight, at the very least it confirmed that I'm not nuts for thinking this is odd and unusual.  Your responses were well thought out and helpful.  I've got a bit of reading to do with all you've provided and I'll definitely be back with the next perplexing amalgamation of regs and eval criteria!

The procurement offices have shifted their methodologies over the past year and it feels like they are doing whatever they want with little regard for actual FAR.

Of course we don’t know the product, agency, market conditions or history of previous procurements. I do wonder if this is a new approach from an agency customer that you have previously dealt with.  

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Just now, joel hoffman said:

Of course we don’t know the product, agency, market conditions or history of previous procurements. I do wonder if this is a new approach from an agency customer that you have previously dealt with.  

Without being too specific, the office falls under the ACC.  We've been dealing with them for decades and the established methodologies seem to have left with the personnel who retired or were promoted.  This new batch of contracting specialists and officers seem unaware of what they have in their solicitations and contracts until it's pointed out to them.  My unsubstantiated opinion is that they are following boiler-plate, cook-book style formats without the understanding of the regulations or procurement-specific tailoring that I was trained to do.

 

Heck, they don't even complete fillable clauses when you request the information.  I requested that they complete the WAWF clause with the pertinent information, I was told that all the relevant information can be found on the first page of the contract so they didn't feel the need to complete it.  Which they never did. 

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When you say ACC, I presume you are talking about the Army Contracting Command.  If that is the case, is DFARS 252.215-7008 in the solicitation?

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1 hour ago, Retreadfed said:

When you say ACC, I presume you are talking about the Army Contracting Command.  If that is the case, is DFARS 252.215-7008 in the solicitation?

Good question. Note that the clause includes the KO notifying the offeror that it is the only offer.

From 252.215-7008: 

“(a) Cost or pricing data requirements. After initial submission of offers, if the Contracting Officer notifies the Offeror that only one offer was received, the Offeror agrees to - 

(1) Submit any additional cost or pricing data that is required in order to determine whether the price is fair and reasonable or to comply with the statutory requirement for certified cost or pricing data (10 U.S.C. 2306aand FAR 15.403-3); and

(2) Except as provided in paragraph (b) of this provision, if the acquisition exceeds the certified cost or pricing data threshold and an exception to the requirement for certified cost or pricing data at FAR 15.403-1(b)(2) through (5) does not apply, certify all cost or pricing data in accordance with paragraph (c) of DFARS provision 252.215-7010, Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data, of this solicitation.”

From 252.215-7010(c):

“(c) Requirements for certified cost or pricing data. If the Offeror is not granted an exception from the requirement to submit certified cost or pricing data, the following applies:

“(1) The Offeror shall prepare and submit certified cost or pricing data and supporting attachments in accordance with the instructions contained in Table 15-2 of FAR 15.408, which is incorporated by reference with the same force and effect as though it were inserted here in full text. The instructions in Table 15-2 are incorporated as a mandatory format to be used in any resultant contract, unless the Contracting Officer and the Offeror agree to a different format and change this provision to use  Alternate I.

“(2) As soon as practicable after agreement on price, but before contract award (except for unpriced actions such as letter contracts), the Offeror shall submit a Certificate of Current Cost or Pricing Data, as prescribed by FAR 15.406-2.”

You don’t require the contractor to certify the COPD until after agreement on price. Regardless of whether the proposal data in Table 15-2 is identified as “certified Cost or pricing data”, it isn’t certified until after reaching the price agreement. 
 

You don’t require the offeror to certify the COPD THEN request a revised final offer or “BAFO”.

And to repeat,  the offeror only has to agree to provide cost or pricing data if the KO tells the offeror that it is the only offer received.

Sorry for the highlights. If and when I get to a computer, I will remove the text highlighting. 

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47 minutes ago, Retreadfed said:

When you say ACC, I presume you are talking about the Army Contracting Command.  If that is the case, is DFARS 252.215-7008 in the solicitation?

It is included by reference.  This is great.  Thank you for pointing that one out.  I must have overlooked it during my review.  I think I have what I need to address this with the PCO.  Once again, thank you all for the advice.  You guys have been outstanding.

 

Five stars all around.

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5 hours ago, joel hoffman said:

Unless the government is totally inept, my guess is that you are the only offeror or proposer but they don’t want you to know that

...or they would have told you that, as it is an implied requirement according to 252.215-008.

They likely don’t want you to know that you may have some pricing leverage. Of course, they wouldn’t necessarily have to accept a higher BAFO. Wh knows, they might then be forced to actually negotiate - God forbid !!!! Hah Hah! 

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Just now, joel hoffman said:

...or they would have told you that, as it is a requirement according to 252.215-008.

I'm not sure that they read the clauses that they include by reference.  I had them strike several that were inapplicable and they didn't argue.  It wouldn't surprise me at all that your original statement was accurate.

 

2 minutes ago, joel hoffman said:

Unless the government is totally inept, my guess is that you are the only offeror or proposer but they don’t want you to know that

 

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1 minute ago, Old3044 said:

I'm not sure that they read the clauses that they include by reference.  I had them strike several that were inapplicable and they didn't argue.  It wouldn't surprise me at all that your original statement was accurate.

 

 

We had the same thought at the same time. 😁

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3 hours ago, ji20874 said:

For a competitive LPTA acquisition, there is no requirement for certified cost or pricing data -- indeed, cost or pricing data are not allowed in such a case.  FAR 15.403-1(c)(1).

FAR 15.403-1(c)(1) doesn't say that there's no requirement for certified cost or pricing data when using LPTA. It explains the standard for adequate price competition, which is not dependent on any specific source selection process. Stating that you will use LPTA in the solicitation may or may not result in adequate price competition. Further, the contracting officer can't determine whether adequate price competition existed until after they've received responses. As such, an offeror would have no basis in claiming that the Govt. was prohibited from obtaining certified cost or pricing data because adequate price competition existed before they even submitted a response..

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4 minutes ago, Don Mansfield said:

FAR 15.403-1(c)(1) doesn't say that there's no requirement for certified cost or pricing data when using LPTA.

I spoke of competitive LPTA.  Cost or pricing data are prohibited in a competitive LPTA acquisition.

Using LPTA certainly suggests a belief that adequate price competition will be achieved.  If such an acquisition becomes noncompetitive, then cost or pricing data might be appropriate -- but then it wouldn't be an LPTA acquisition anymore.

You're right that FAR 15.403-1(c)(1) defines the standard for adequate price competition.  FAR 15.403-1(b) reaches to (c)(1) and prohibits cost or pricing data in a competitive LPTA acquisition, as I explained in a part of my posting that wasn't quoted.

The original posting and the thread seems to be based on a premise that this is a competitive acquisition.  A contracting officer need not ask for a BAFO in a noncompetitive acquisition.

Do you have anything to offer that might be germane to the discussion?

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