The inclusion of an affordability cap in a competitive solicitation does not invalidate any of the price analysis techniques identified in Federal Acquisition Regulation (FAR) 15.404-1(b)(2)).

The “Department of Defense Source Selection Procedures (SSP),” posted at Defense Federal Acquisition Supplement 215.300, defines affordability cap as “the approved funding allocated for a given acquisition” for procurements other than major systems acquisitions.  The SSP states in Appendix B that “an affordability cap may be established by the RO [requirements owner] above which an offeror may not be eligible for award.  This information should be provided to prospective offerors as early as possible in the solicitation process.”

How an affordability cap set for a competitive request for proposal (RFP) is used in proposal analysis depends on the language in the solicitation.  For example, if the RFP stated that any proposal that exceeded the affordability cap would not be eligible for award then prospective offerors were put on notice that a proposal submitted for an amount exceeding the affordability cap would be eliminated from competition.  In this case, that the proposed price does not exceed the stated affordability cap becomes one of the minimum criteria a proposal must meet before advancing in the proposal evaluation process.  The appropriate price analysis techniques outlined in FAR 15.404-1(b)(2) would be used in the price evaluation for those proposals that advanced to that point in the proposal evaluation process. 

Ultimately, each proposal must be evaluated solely on the criteria set forth in the solicitation.