Sign In
  • Question

    When soliciting a Brand Name requirement and four quotes were submitted is this considered adequate competition in order to determine the price fair and reasonable?


    Answer

    No.  Although comparing prices proposed in response to a solicitation is a FAR 15.404 preferred price analysis technique to determine a fair and reasonable price, don’t rely on it in this situation.  For a determination of fair and reasonable, the quotes to be compared must be developed in a competitive environment (with vendors competing against each other and offering their best price to win the award).  In your case, the solicitation states that only a Sony xyz brand would meet the government’s minimum needs. By dictating a brand only requirement, other manufacturers of televisions were prohibited from competing against Sony. As the sole source, Sony generated the pricing data for each and every television quoted. Therefore, price analyses other than comparing prices proposed in response to a solicitation (perhaps additional market research, comparisons with similar type products, maybe even historical data, if it is available) should be conducted until a fair and reasonable price can be determined.
     
    Additional information you might find useful:
     
    Soliciting for a brand name is problematic. GAO recently sustained a protest against the DLA for unduly restricting a solicitation because it:  1) specified a brand name,  2) did not include salient characteristics for the brand name product, and 3) did not take the steps necessary to procure the requirement using other than full and open completion.  “The agency’s approach of requiring offerors to submit prices for a particular brand name item—without also including salient characteristics to allow firms to propose equivalent products—fails to meet the most basic requirements for full and open competition under the Competition in Contracting Act (CICA).” California Industrial Facilities Resources, Inc ., d/b/a CAMSS Shelter vs. DLA, File B-403397.3 March 2, 2011. This decision reinforces FAR 11.105 which precludes Contracting Officers from specifying a requirement solely in terms of a particular brand name unless the brand name, product or feature is essential to the government’s need and market research shows that other companies’ similar products lack the essential feature or cannot be modified to meet the government need. And for simplified acquisitions, Contracting Officers are further directed to promote competition to the maximum extent practicable, FAR 13.003(h)(1) and not restrict solicitations to suppliers of well-known and widely distributed makes or brands. 13.104(a)(2). 
     
    Lastly, FAR 11.104 permits soliciting for a “brand name or equal” product provided that the solicitation also includes a description of the brand’s salient characteristics (in order for an “equal” to be evaluated and eligible for award). Hypothetically, soliciting for a “Sony xyz or equal” would have invited competition on the price of the television thereby allowing comparison of the quotes to determine a fair and reasonable price. However, depending on the complexity and circumstances of the acquisition as well as the result of the price comparison, the Contracting Officer might need to conduct additional analyses before making a fair and reasonable price determination. FAR 15.404.1(a)(1). 
     

    Open full Question Details