How can I justify the pricing is fair and reasonable when it's must lower than the IGE, competitive proposals, and historical data when I'm basing award off Low Price only?
It is mentioned that you are awarding off of low price only means that you did not evaluate technical acceptability. However you also state that you asked the contractor to confirm pricing is accurate and meets all the specifications, implying Low Price Technically Acceptable (LPTA) evaluation. FAR 15.403-1(c)(1)(i)(B),
states, "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;"
If the contractor confirms their pricing as you requested and you are not satisfied, you must state all facts and get approval at a level above the contracting officer if you find that the price is unreasonable. Just because you believe they are too low or even below-cost does not constitute a legal basis for precluding a contract award.
If they are technically acceptable (assuming this is LPTA) and the contractor verifies their pricing, then you can justify the price to be fair and reasonable using adequate price competition. You can ask the question to your low bidder as to why they have priced the way they did so that you have an understanding. You have already begun that by asking them to confirm the accuracy of their pricing, which is the correct thing to do. You may also use other price analysis techniques described in the FAR as well.
If they verify their price, rejection of a low offeror because you believe their price proposed is too low then falls into a question of responsibility, and you must refer to the SBA for a Certificate of Competency (CoC) if that is the case. Responsibility elements include capability, competency, capacity, credit, integrity, perseverance, tenacity and limitations on subcontracting (FAR 19.601
). See GAO cases concerning low bids or prices awarded (B-216747, B-261135.2, B-193774).