Jump to content


Photo

Price Reasonableness Determination


  • Please log in to reply
9 replies to this topic

#1 AgencySpecialist

AgencySpecialist

    Copper Member

  • Members
  • PipPip
  • 16 posts

Posted 15 September 2011 - 08:26 AM

Scenario:

A large, IDIQ contract for IT products and services, with multiple awardees.

The awardees then compete for user agency orders via the Fair Opportunity process, using bundled pricing, where price is a significant evaluation factor.

Later, the selected contractor must then submit a contract modification to the umbrella contract to the agency holding the umbrella contract, for any individual
line items included in the bundled proposal to the user agency, but not already included on the umbrella contract.

Assumption - there is a need to do a price reasonableness examination on the individual line items since they were not submitted individually to the user agency for evaluation - the user agency only looked at bundled pricing, i.e. - does the Fair Opportunity process meet the same definition of competition as a negotiated procurement...not certain.

Thoughts, comments, suggestions all appreciated.

#2 Oyster

Oyster

    Copper Member

  • Members
  • PipPip
  • 31 posts

Posted 15 September 2011 - 03:22 PM

I don't understand the question. Could you rephrase/clarify?

#3 Vern Edwards

Vern Edwards

    Platinum Member

  • Members
  • PipPipPipPipPipPip
  • 4,470 posts
  • Gender:Male
  • Location:Portland, Oregon

Posted 15 September 2011 - 10:15 PM

[D]oes the Fair Opportunity process meet the same definition of competition as a negotiated procurement...not certain.

Thoughts, comments, suggestions all appreciated.

You haven't received many responses because your post is written confusingly. I'll take a shot.

The FAR uses the term competition mainly in three ways, two of which are specific and involve official definitions, and one of which is not informal and does not involve any official definition.

1. "Full and open competition," or "other than full and open competition." This has to do with whether and to what extent the government gave responsible firms a chance to compete, but has nothing to do with whether anyone actually competed. See the official definition in FAR 2.101. This use does not apply to the fair opportunity process. See FAR 16.505(b)(1)(ii).

2. Adequate price competition." This use has to do with whether firms actually contended with one another for the contract or were expected to do so. See the explanation/definition in FAR 15.403-1( c)(1). This use might apply to the fair opportunity process if the CO is required to get certified cost or pricing data. See FAR 16.505(b)(3).

3. "Competition" or "Competitive." This use is informal and non-technical. It means something like "get proposals from more than one awardee/contractor" or "give all awardees/contractors a chance to submit a proposal." This use does apply to the fair opportunity process. See FAR 16.505(b)(1)(ii)(A).

I don't know if that explanation will help you, but it was the best that I could do on the basis of how your post was written.

#4 AgencySpecialist

AgencySpecialist

    Copper Member

  • Members
  • PipPip
  • 16 posts

Posted 26 October 2011 - 08:07 AM

You haven't received many responses because your post is written confusingly. I'll take a shot.

The FAR uses the term competition mainly in three ways, two of which are specific and involve official definitions, and one of which is not informal and does not involve any official definition.

1. "Full and open competition," or "other than full and open competition." This has to do with whether and to what extent the government gave responsible firms a chance to compete, but has nothing to do with whether anyone actually competed. See the official definition in FAR 2.101. This use does not apply to the fair opportunity process. See FAR 16.505(B)(1)(ii).

2. Adequate price competition." This use has to do with whether firms actually contended with one another for the contract or were expected to do so. See the explanation/definition in FAR 15.403-1( c)(1). This use might apply to the fair opportunity process if the CO is required to get certified cost or pricing data. See FAR 16.505(B)(3).

3. "Competition" or "Competitive." This use is informal and non-technical. It means something like "get proposals from more than one awardee/contractor" or "give all awardees/contractors a chance to submit a proposal." This use does apply to the fair opportunity process. See FAR 16.505(B)(1)(ii)(A).

I don't know if that explanation will help you, but it was the best that I could do on the basis of how your post was written.



#5 AgencySpecialist

AgencySpecialist

    Copper Member

  • Members
  • PipPip
  • 16 posts

Posted 26 October 2011 - 08:24 AM

I apologize for any confusion. Please allow me to clarify.


I am referring to a scenario where there was an initial competition for a large, Fixed Price, IDIQ type contract
for a wide range of IT products and services. The awarding agency made multiple awards. (Hereafter known as the "awarding agency")

The contract is intended to be wide in scope and to offer a dynamic "catalog" of ever changing products and service.
All federal agencies and certain other authorized users (hereafter called "user agencies') are allowed to issue orders against this IDIQ contract.

In many cases, the user agencies (for various reasons) do not order directly from the line items on the contract. They require customized solutions, often consisting of existing line items and new line items - not already on the contract.

In these cases, the user agencies are required to follow the FAR guidelines, using the Fair Opportunity process. Often, this includes the release of a SOW and subsequent competition among the contract holders. An awardee is then selected from this group.

The user agency issues a task order to the contractor. If that task order includes any line items not already on the contract, the awarded contractor must then submit a contract modification to the original awarding agency.

As backup support for the proposed contract modification, the contractor provides the awarding agency with a copy of its proposal to the user agency.

Question - does the awarding agency have an obligation to perform cost/price analysis on this proposal? this proposal that was already submitted to the user agency in a competitive environment?

Thank you.

#6 Vern Edwards

Vern Edwards

    Platinum Member

  • Members
  • PipPipPipPipPipPip
  • 4,470 posts
  • Gender:Male
  • Location:Portland, Oregon

Posted 26 October 2011 - 08:45 AM

It has been more than a month since I responded to your September 15 post. I am no longer interested. Maybe someone else will respond.

#7 ji20874

ji20874

    Gold Member

  • Members
  • PipPipPipPipPip
  • 531 posts
  • Gender:Male
  • Location:Vermont

Posted 26 October 2011 - 12:07 PM

AgencySpecialist, I don't understand either. If your question is whether some form of cost or price analysis is required, the answer is YES in my mind. Adequate price competition might establish price reasonableness, and your price analysis might be a comparison of the prices you received in the competive environment. One would reasonably expect this analysis to be done by "the using agency" before it issues the task order.

An after-the-fact cost or price analysis by "the awarding agency" makes no sense to me. The idea of modifying the parent IDIQ contract also doesn't make sense to me. I'm imagining a task order that is substantially premised on the contract's line items with the additional non-conforming work merely incidental -- a task order that was otherwise might be improperly issued as an improper avoidance of full and open competition.

#8 AgencySpecialist

AgencySpecialist

    Copper Member

  • Members
  • PipPip
  • 16 posts

Posted 27 October 2011 - 07:53 AM

AgencySpecialist, I don't understand either. If your question is whether some form of cost or price analysis is required, the answer is YES in my mind. Adequate price competition might establish price reasonableness, and your price analysis might be a comparison of the prices you received in the competive environment. One would reasonably expect this analysis to be done by "the using agency" before it issues the task order.

An after-the-fact cost or price analysis by "the awarding agency" makes no sense to me. The idea of modifying the parent IDIQ contract also doesn't make sense to me. I'm imagining a task order that is substantially premised on the contract's line items with the additional non-conforming work merely incidental -- a task order that was otherwise might be improperly issued as an improper avoidance of full and open competition.



#9 AgencySpecialist

AgencySpecialist

    Copper Member

  • Members
  • PipPip
  • 16 posts

Posted 27 October 2011 - 07:55 AM

Thank you again.

The fact that this scenario appears muddy just on the face of it suggests an unusual and unique contracting practice and perhaps that answers the question all by itself.

#10 AgencySpecialist

AgencySpecialist

    Copper Member

  • Members
  • PipPip
  • 16 posts

Posted 27 October 2011 - 08:01 AM

one last comment - the new work is most often not incidental and quite often substantial.

Perhaps the real question is whether the evaluation and selection process under the Fair Opportunity guidelines meets the same test as a full and open competition - in terms of price reasonableness determination. If you don't later modify the parent contract, those items are considered to be outside the contract and not billable using customized contract driven systems.

Again, I now realize how odd this looks to the rest of the contracting community.




0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users