On Thursday May 20, 2020, the US Federal Contractor Registration (USFCR) Academy is hosting a free, live webinar on writing a price proposal. Sign up here to reserve a spot and learn more about price proposals with this blog post.
Pricing is an important part of winning a federal contract. The government, like any buyer, wants to get a good deal for the purchased services or products. The contracting officer will be looking at the pricing very closely.
Each solicitation will have instructions on how to write the pricing information. This could be on a standard form, an excel sheet, the price schedule page, or a standard commercial ordering form. Prices should be given for each line item presented in the solicitation and contain the unit price and total cost.
The contracting officer and their team will be performing extensive pricing research prior to issuing the solicitation notice to learn the acceptable competitive range. This competitive range will help them determine what is considered to be fair and reasonable.
If a vendor prices an offer too high, it can be considered unfair. The government avoids unfair offers because they waste tax-payers’ dollars. If a vendor prices their offer too low, it can be considered unreasonable.
Unreasonable offers can put the government at risk for having late deliveries, lower product/service quality, and it can hurt the vendor long term if they cannot deliver on the prices they set.
Did You Know
Some contracts are won solely based on lowest price technically acceptable (LPTA). FAR 15.101-2 states:
“The lowest price technically acceptable source selection process is appropriate when best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price.”
This means that once a contracting officer has evaluated each proposal and quote for technical capability, they narrow down the remaining submissions based on who has the lowest price.
The lowest price would still have to be inside of the competitive range and not be considered unreasonable. Check the solicitation’s evaluation factors to see if the LPTA applies.
Back to Basics
USFCR created the contract catalog to help businesses with pricing research. The contract catalog is a complete searchable database of all past awarded contracts. This information is linked with the winning vendor’s profile, so that research can be conducted further into the awarding vendor.