Price | The Contracting Education Academy

November 15, 2018 By AMK

GAO reiterates that agencies must meaningfully consider price in ‘best value’ tradeoffs

In three related bid protest decisions made public in the last few weeks, the Government Accountability Office (GAO) reaffirmed the principle that agencies must meaningfully consider price when making best value tradeoff decisions.

GAO sustained the protests, stressing that merely paying lip service to price while selecting a more expensive, higher-rated offeror is not sufficient — agencies must provide a rational explanation for why they have decided to pay a premium for the awardee’s technical superiority.

In Solers, Inc., B-414672.3 et al.; Technatomy Corporation, B-414672.5; and OGSystems, LLC, B-414672.6 et al., three disappointed offerors challenged the Defense Information Systems Agency’s (DISA) award of Multiple Award Task Order contracts to 14 contractors as part of the Systems Engineering, Technology, and Innovation program.

The solicitation provided that DISA would make award on a best-value tradeoff basis considering price and four technical factors that, when combined, were significantly more important than price. The agency made award to the 14 highest rated proposals in the non-price factors, opining — without elaboration — that “the technical merit of those proposals justifies paying a price premium over lower-rated, lower-priced proposals.” Indeed, throughout the evaluation process, the agency repeatedly noted — again without elaboration — that the awardees’ proposals were worth a premium.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2018/11/hey-big-spender-gao-reiterates-that-agencies-must-meaningfully-consider-price-in-best-value-tradeoffs/

October 25, 2017 By AMK

GSA nominee wants competition at the task order level

Emily Murphy, the nominee to be the next administrator of the General Services Administration, sailed through her hearing last week, facing few tough questions about her plans to improve federal acquisition, and promising to address long-standing issues in the Public Building Service.

However, Murphy, a former staff member for the House Small Business and Armed Services committees, did offer some further insight into where she believes federal procurement needs to go in the short term.

“Competition and reducing waste, and increasing transparency were two of the four things I’m really hoping to work on at GSA,” Murphy told the Senate Homeland Security and Governmental Affairs Committee. “Within the Federal Acquisition Service, which does over $50 billion in contracts on behalf of other agencies each year, I’d like to work to make sure the ceiling prices that are being set for agencies are just the beginning. When we set a price on our GSA schedule contract it’s more or less like the rack rate on the back of a hotel room door, the most you will ever pay. We are trying to make sure GSA’s contracting officers and our policies support really vigorous competition at the task order level because that is the amount we actually are going to spend so we want to get the best deal there, the most competition we can there.”

Keep reading this article at: https://federalnewsradio.com/hearings-oversight/2017/10/gsa-nominee-wants-competition-at-the-task-order-level/

May 10, 2016 By AMK

Contracting groups blast ‘flawed’ approach to $17.5 billion Pentagon contract

Two industry groups who together represent a multitude of defense and IT contractors have taken issue with the Pentagon’s choice to source its $17.5 billion Encore III contract through the “lowest price, technically acceptable” selection process.

The Professional Services Council and the IT Alliance for the Public Sector outlined their concerns in a letter last week to Undersecretary of Defense Frank Kendall. The letter urged the Pentagon and its IT arm – the Defense Information Systems Agency – to change the procurement, which went out to bid in March.

The contract aims to deliver a slew of high-end IT services, including application development, cybersecurity and business process reengineering, which – as the letter notes – appears to contradict a memo Kendall released last March dictating proper use of LPTA.

Keep reading this article at: http://www.nextgov.com/defense/2016/05/contracting-groups-lpta-poor-choice-pentagons-175b-contract/128003

January 5, 2015 By AMK

DoD retreats on evaluation of price reasonableness

Just before the holidays, tthe Department of Defense (“DoD”) quietly withdrew its ill-received proposed rule on the evaluation of price reasonableness in commercial items acquisitions.

Cost and price analysis is part of a plan of total market surveillance designed to understand the relationship of market forces on the acquisition of technology, products and services.

Issued on August 3, 2015, the Proposed Rule purported to provide guidance for evaluating the reasonableness of prices using data other than certified cost or pricing data. As we previously reported, it fell short of this goal and, instead, increased confusion in the determination of price reasonableness for commercial goods that have been “offered for sale” but not sold. It also adopted open-ended data provisions that arguably permit the agency to request almost unlimited information to substantiate the reasonableness of prices.

The Proposed Rule elicited strong, negative comments from the defense industry and the American Bar Association’s Section of Public Contract Law. Many accused DoD of attempting to eliminate the commercial acquisition of items without prior commercial sales. In addition, Sen. John McCain (R-Ariz.), Chairman of the Senate Armed Services Committee issued a letter urging Secretary of Defense Ashton Carter to rethink the proposed rule as inconsistent with the Secretary’s efforts to court commercial contractors.

Keep reading this article at: http://www.insidegovernmentcontracts.com/2015/12/dod-retreats-on-evaluation-of-price-reasonableness/

In three related bid protest decisions made public in the last few weeks, the Government Accountability Office (GAO) reaffirmed the principle that agencies must meaningfully consider price when making best value tradeoff decisions.

Emily Murphy, the nominee to be the next administrator of the General Services Administration, sailed through her hearing last week, facing few tough questions about her plans to improve federal acquisition, and promising to address long-standing issues in the Public Building Service.

Two industry groups who together represent a multitude of defense and IT contractors have taken issue with the Pentagon’s choice to source its $17.5 billion Encore III contract through the “lowest price, technically acceptable” selection process.

Just before the holidays, tthe Department of Defense (“DoD”) quietly withdrew its ill-received proposed rule on the evaluation of price reasonableness in commercial items acquisitions.

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