Assignment 4: Technical and Cost or Price Evaluations and Price Reasonableness
When a technical evaluation is use their source selection process for evaluation and best value to trade-off in the technical proposals, the government contract law only allows for reasonable technical proposal and best value trade-off decisions. This occurs during the final stages of a negotiated procurement by comparing the competing proposal to each other. When the Agency receives initial proposals, it will examine each proposal to the actual solicitation requirements. Then after the Agency establishes a competitive range, the final bids are typically compared to each other. Keep everything within close parameters to each other for complete fairness. Price reasonableness has nothing to do with low prices. Instead, it focuses on prices being too high. The government can assess price reasonableness by several methods the most popular is comparing your bid prices to the prices of other bidders or comparing your prices to an independent government cost estimate. Handling of Contractors Proposals. All evaluators must be aware of the sensitive nature of the Contractor's proposal. The proposal can be used by the Contractor's competitors to gain a significant edge in competitive acquisitions. Accordingly, only those Government personnel with an absolute need to know should be given access to the contractor's cost and pricing data.
The importance of integrity and fairness.
One of the common problems with contracting agencies in bid protest litigation is that they tend to believe that the record as they document them is conclusive. This frankly is not so. What matters is whether, given the facts in the record, the actions and documented justifications in the source selection process were reasonable and rationale. Everyone understands that the contracting agencies have substantial power and discretion. However, checks and balances regulate the system of government. The federal procurement system has had a bid protest process since the 1920s (Greenwalt, W. 2013). While enabling bidders to challenge government procurement decisions has long helped deter corrupt and capricious actions by federal officials, several new factors are undermining its overall benefit.
b. the factors used to determine the competitive range.
The bid protest process exacerbates the impact of these changes by serving as a key mechanism for enforcing procurement rules. Government contractors who have an inherent incentive to do whatever it takes to win contracts now have more incentives than ever to protest the procurement process. The process is essentially the same no matter what method of contracting is used in awarding schedules, simplified acquisition, sealed bidding, negotiation, or "fair opportunity" under a multiple award delivery or task order contract. When planning a competitive acquisition, agency acquisition personnel must design a process for getting information about the alternatives, assessing each alternative, and comparing the alternatives to determine which is best. In developing their process, it must consider the objectives for process quality, schedule, and other costs. Must consider all attributes of a good decision at the time available to make its decision and the human and technological resources/equipment at their disposal (Edwards, V. 2003). They also should want to economize on the demands made on the competing firms, to not make government business unattractive to the best firms by making it too costly and time-consuming.
Create an outline of the final technical evaluation report
This process model has a couple key characteristics; that is every competitor is required to submit a complete proposal at the outset of the competition which addresses all the evaluation factors for award and the agency conducts negotiations with more than one firm. The significance of these two characteristics lies in the effect that they have on the amount of information that a competitor must prepare and submit and that an agency must process to make a source selection decision, and on the time and resources required to prepare and process that information (Edwards, V. 2003). Then, source all information processing costs is conducting negotiations and discussions with more than one firm. Although the FAR permits agencies to award contracts based on initial offers without negotiations, agencies sometimes establish a competitive range consisting of more than one competitor, negotiate with them all, and then solicit competitive final proposal revisions. The Evaluation summary outline typically contain three sections: Tables, Narrative Summaries, and proposed System Layouts. The technical evaluation report puts the consensus view of the panel into a formal structure. This report includes a section that describes the purpose of the report, details about the review panel itself and an explanation of methodology. The report typically includes a discussion of whether or which product, system, processes, or proposal meets the specification the organization sets out, as well as any ambiguities or deficiencies with substantive explanations. The report should also include a section of recommendations or conclusions (D - Sample Technical Evaluation Committee Memo (MS Word) | U.S. Agency for International Development, n.d.). For example, such a section might suggest seeking additional information from a vendor or manufacturer.
Determine the factors to consider when evaluating price reasonableness.
A fair and reasonable price determination is an assessment by the Government that an offeror’s proposed price for a supply or service can be considered fair and reasonable on the basis of applying one or more price analysis techniques. The concept of a fair and reasonable price has elsewhere been described as the price that a prudent businessperson would pay for an item or service under competitive market conditions, given a reasonable knowledge of the marketplace. Regardless of the precise definition, the FAR clearly establishes the need for determining a price to be fair and reasonable price before a Government contracting officer or ordering officer may award contracts or place orders ("Methods to Determine Price Reasonableness : Purchasing: Loyola University Chicago," n.d.). When determining price reasoning analysis should be conducted. In performing a price analysis, that is, determining a price to be fair and reasonable without examining the individual components of the price, a buyer has a wide selection of methods. Which method is used and its suitability depends on the facts or information of the individual purchase. What follows is a listing of the most common methods or criteria used to determine a price fair and reasonable by price analysis. When two or more acceptable offers are received and the lowest price is selected, the price of the lowest offered can be concluded to be fair and reasonable. Also, it’s smart to conduct where an item has an established market price, verification of an equal or lower price also establishes the price to be fair and reasonable. If the buyer has a history of the purchase of the item over several years, this information considering inflation factors, can be used to determine a price fair and reasonable.
With historical pricing, it’s appropriate that documentation must support summary.
Determine which price analysis method would fit best in this scenario.
Comparison to a similar item often an item is very like a commercial one, but has added features that are required. If the one can provide the price of the base item, by a catalog, and then state the costs of the additional features, the buyer can then find the price reasonable based on these two factors. Differences should be detailed and priced. The reasonableness of the extra cost can be a checked item against other purchases that had the extras or some of them. Also, the question of price reasonableness being reasonable is really an inappropriate question since it only looks at the high side of pricing and doesn’t examine the question of pricing being so low that it jeopardizes contract performance. Looking at the low side of pricing is the realm of cost realism in this scenario. Making sure to read your next RFP carefully to understand which tests the government intends to apply. You may be surprised to find that low price has no floor.
Reference:
Edward V., 2003: Competitive Processes in Government Contracting: The FAR Part 15 Process
Model and Process Inefficiency. (n.d.). Retrieved from http://www.wifcon.com/anal/analcomproc.htm
D - Sample Technical Evaluation Committee Memo (MS Word) | U.S. Agency for International Development. (n.d.). Retrieved from https://www.usaid.gov/documents/1883/d-sample-technicalevaluation-committee-memo-ms-word
Methods to Determine Price Reasonableness : Purchasing: Loyola University Chicago. (n.d.). Retrieved from http://luc.edu/purchasing/price_reasonableness.shtml
William G., 2013: The Lunacy of 'Fairness' in Government Contracting - WSJ. (n.d.). Retrieved from http://www.wsj.com/articles/SB10001424052702304626104579123810694636126
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