EZK81

That's a really helpful example, thank you! I wish our potential customer had been so transparent about their realism analysis...

Since the government provided a "competitive price range," my original assumption was that they had done an independent estimate and that prices below the low end of the range would not pass a realism evaluation. Otherwise, why provide a low end for an LPTA RFQ? Why not just provide a budget/ceiling, or nothing at all? The winning bid was about 18% lower than the low end of their competitive range and 28% below the high end. This was a staffing contract with labor categories and productive work hours prescribed, so the fully burdened rate was the only variable (i.e., the discounted FSS rate). The proposal was only past performance and pricing so there was no methodology to evaluate, and they did not ask for resumes or letters of commitment. I can easily see how bidding a rate that is 18-28% less than the IGE could be considered unrealistic or a high level of risk. The awardee has to find and maintain staff over 5 years at that low price point, with little to no annual escalation--without providing a plan for doing so. But obviously I'm wrong, since that wasn't the government's finding. ¯\_(ツ)_/¯

But this does not preclude a price being unrealistic if it is too steeply discounted, correct?

To provide some additional context in light of the reasonableness/realism point, I looked at the evaluation factors again. Here is the language from the price evaluation factor (emphasis added). It does in fact say "realistic," but it is couched in terms of the Offeror's GSA Schedule. Since discounts are expected/encouraged, I'm not sure what that means in terms of "unrealistically low pricing." (Note that the priced units on Schedule B were hours; therefore a reduction of the level of effort could not be used to lower the total price.) "The Government considers price an important factor in selecting the successful contractor. The contractor’s proposed pricing will be evaluated against the Government’s estimated level of effort. Unrealistically high or low pricing will be considered indicative of a lack of understanding of the complexity and risk associated with the work to be performed. "The Government expects to receive price competition through the receipt of multiple quotes. Contractors shall propose fixed hourly rates that are in accordance with its GSA schedule pricing; however, discounts are strongly encouraged. The contractor’s total price in RFQ Attachments, will automatically be computed. "The Government will evaluate price quotes for award purposes by calculating the sum of the base and all option periods to determine a total proposed price. Evaluation of options does not obligate the Government to exercise the options. "The Government will evaluate Cost/Price to ensure it is complete, reasonable and realistic by verifying that all prices/labor rates and cost to the Government are in accordance with the offeror’s GSA contract. Discounts offered by each offeror to its rates will be evaluated. Each offeror’s level of effort and mix of labor proposed will be evaluated to determine that the total price proposed is fair and reasonable. "The Government intends to award a contract on lowest price technically acceptable (LPTA) proposal for Budget Analyst Support Services."

That's an extremely helpful citation, thank you. I had mistakenly been conflating reasonableness and realism. (I do mostly NASA proposals, and they very often conduct realism analysis.) It feels like playing Price is Right... We initially had determined a lower price, but increased it because we thought our bid would be deemed non-compliant if it didn't fit into their range. Looking back, that was obviously a bad decision. But sometimes it is so hard to know how to interpret seemingly conflicting direction in the RFQ. I've been a professional proposal manager for 20 years, and some COs still find novel ways to confound me!

The term "competitive price range" was only used in the amendment on SAM.gov. Interestingly, there was a nearly identical procurement from the same contracting office going on simultaneously, and they also provided a competitive price range for that one on SAM and had a BAFO round (but did not amend the SOW at any point). We have not received a notification about the second one yet. It makes sense that the competitive range was not supplied as a requirement. But I have to wonder if it was meant to be an internal piece of data only. I do not think it provided a benefit to Offerors in preparing their offers, and it doesn't seem likely it would have increased price competitiveness for the Government during the BAFO round. It was simply confusing. If other small businesses like ours read it the same way and tried to ensure their offers were within the provided range, the government would likely have received mostly similar prices with one or a few outliers, one of which won the award. I'm obviously frustrated about the loss, but generally confused overall (and worried we'll face the same result on the other similar procurement). Thank you both for your insights. If possible, I'll report back if I find out anything in the debrief.

This is from Amendment 5 out of 6. Amendment 6 revised the SOW to remove 1 FTE, issued a new Schedule B, and extended the due date for the BAFO. "This change is hereby issued to Solicitation No. [number and name]... for the following: "(1) Revise the Competitive Price Range: $[xxxxxx] to $[xxxxxx]. "Best & Final proposal to be issued by [due date] to: [email address of CO] "End of Change"

Hi everyone - thanks in advance for your help. I have found this forum to be an incredibly valuable resource. I work for a federal contractor, and I am looking for clarification on an LPTA situation I've never encountered before. My firm bid on an LPTA RFQ for services. In an amendment, the contracting office provided a "competitive price range" for the Base Year total and requested a BAFO proposal. We submitted a bid that was about a dollar inside the lower range figure for the Base Year, with modest escalation in the outyears. We received a notice of an unsuccessful bid, and the letter provided the award amount for all 5 years. On average across 5 years, their price was about 18% lower than the low end of the competitive range. The RFQ prescribed hours for each year, so outyear pricing could only go down by lowering hourly rates--not impossible, but highly unlikely. If they bid within the competitive range for the Base Year, the option years would have had to be reduced 22% on average. I need to request a debrief, but I want to word it intelligently. I can't find anything in the FAR that helps me understand this situation. So a couple questions: 1) I've never seen a contracting office provide a competitive price range on an LPTA procurement. Is this a done thing? 2) Are they allowed to award outside that range, once it is formally provided as an amendment to the RFQ? 3) If yes, how can they justify price reasonableness on a bid lower then their established competitive range? Thank you again!