Is it correct to state that adequate price competition does not exist in an LPTA situation where discussions are not held because either, (a) the evaluation ends when the lowest priced offeror's proposal is determined to be technically acceptable (no other proposals have been evaluated therefore there is no way to know if the other proposal(s) submitted meet the Government's expressed requirement and have fair and reasonable prices with which to use for price comparison), or, (b) if other than the lowest priced proposal(s) are not technically acceptable and award will be made to the next low technically acceptable offeror (no other technically acceptable proposal has been evaluated and the technically unacceptable proposals cannot be used for price comparison because their offer does not satisfy the Government's expressed requirement).
If in either scenario you agree that adequate price competition does not exist, would it be acceptable, for price analysis purposes only, to look at other proposals (which were not evaluated during source selection) for technical acceptability, strictly for the purpose of determining the LPTA proposed price fair and reasonable, based on adequate price competition? If so, would we need to state that we will be doing this in the solicitation?
To address your specific statement, it is incorrect to state that "adequate price competition does not exist in an LPTA situation where discussions are not held" -- holding discussions are not relevant to the issue of adequate price competition. You can award without discussions and still have adequate price competition -- so let's take discussions out of the analysis.
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I gather from your question that you are concerned, in an LPTA scenario, whether the government can determine adequate price competition citing FAR 15.404-1(b)(2)(i) if they limit the evaluation by not actually evaluating the technical proposals of all offerors, but rather work up from the lowest priced offer and:
1) make a determination if lowest offeror offer is technically acceptable – move to award or
2) if the lowest price is not technically acceptable then move on to the next lowest offeror…
So, is the government required to evaluate all offerors, if they plan on using FAR 15.403-1(c) to establish adequate price competition as the basis to justify fair and reasonable in an LPTA?
The requirement to evaluate every offeror's ability to accomplish the technical requirements only applies when tradeoffs are performed per FAR 15.305(a)(3). I’ll also turn to perhaps the most well respected subject matter experts on legal precedent and case law, Ralph Nash. In his book “Competitive Negotiation” (Cibinic, J., Nash, R. C., & Brien-DeBakey, K. R. (2011). Competitive Negotiation The Source Selection Process (Third ed., pp. 209-212). Riverwood, IL: Wolters Kluwer, CCH Incorporated) in his discussion of LPTA states:
“One major benefit of this strategy is that agency can greatly shorten the evaluation process because, once the low price proposal has been found to be technically acceptable, there is no need to evaluate the acceptability of any of the other proposals. This streamlined process can be used as long as the agency has used the Instructions to Offerors – Competitive Acquisition solicitation provision in FAR 52.215-1 which states in ¶ (f)(4) that the agency intends to award without discussions.”
So according to FAR and Nash, there is no need to evaluate all the proposals as this would defeat the potential benefit of LPTA, but neither the FAR nor Nash explicitly state that this alone is adequate for supporting a fair and reasonable determination using FAR 15.403-1(c)(1).
Your concerns correctly hinge on how do you know if the government actually got more than one proposal that can " satisfy the Government's expressed requirement" if we only look at the lowest priced one – is this an adequate basis for a determination of fair and reasonable under FAR 15.403-1(c)(1) . Here is the language from the FAR that is in question:
FAR 15.404-1(b)(2) The Government may use various price analysis techniques and procedures to ensure a fair and reasonable price. Examples of such techniques include, but are not limited to the following:
(i) Comparison of proposed prices received in response to the solicitation. Normally, adequate price competition establishes a fair and reasonable price (see 15.403-1(c)(1)(i)).
FAR 15.403-1(c)(1) states "A price is based on adequate price competition if --
(i) Two or more responsible offerors, competing independently, submit priced offers that satisfy the Government’s expressed requirement and if --
(A) Award will be made to the offeror whose proposal represents the best value (see 2.101) where price is a substantial factor in source selection; and
(B) There is no finding that the price of the otherwise successful offeror is unreasonable. Any finding that the price is unreasonable must be supported by a statement of the facts and approved at a level above the contracting officer;
The determination of fair and reasonable is a separate question from do we have to evaluate all proposals received. The prudent Contracting Officer must be able to support the determination of fair and reasonable in a manner to which they are willing to put their signature. There is a large degree of discretion for the Contracting Officer in this area, so what in their judgment meets the standard?
I believe you have several options, not least of which are doing any of the 7 options presented in FAR 15.404-1(b)(2). I would start with:
1. Compare the price with the independent Government cost estimate, as allowed in FAR 15.404-1(b)(2)(v) – supposing you have a worthy IGCE.
2. Review one additional proposal and if it satisfies the “ Government’s express requirements” then you have met the standard of “two or more” FAR 15.403-1(c)(1).