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Office of Acquisition and Logistics (OAL)

38 U.S.C. 8127 Implementation Frequently Asked Questions Category 5

Categories:  1.  Supreme Court of the United States (SCOTUS) Decision affecting the Veterans First Contracting Program  |  2.  VA Rule of Two  |  3.  VA Form 2268  |  4.  Market Research  |  5.  Fair & Reasonable—Reasonable Expectation that Award can be Made at a Fair & Reasonable Price that Offers Best Value to the United States  |  6.  Sole Source  |  7.  General Services Administration (GSA)/Federal Supply Schedules (FSS)  |  8.  Other
 

Fair & Reasonable—Reasonable Expectation that Award can be Made at a Fair & Reasonable Price that Offers Best Value to the United States

Existing VA Policy:  The deviation for VAAR 810.001-70 states in part, “The contracting officer will search the VIP database by applicable North American Industry Classification System (NAICS) codes to determine if two or more verified service-disabled Veteran-owned small businesses (SDVOSBs) and/or Veteran-owned small businesses (VOSBs) in the appropriate NAICS code, are listed as verified in the VIP database.  The contracting officer will determine if identified SDVOSBs or VOSBs are capable of performing the work and likely to submit an offer/quote at a fair and reasonable price that offers best value to the Government.”

 
 
  1. How is a "fair and reasonable price that offers best value to the Government" determined prior to issuing a solicitation and receiving quotes/bids/proposals?

  2. What documentation is required in order to demonstrate a "fair and reasonable price that offers best value to the Government" is not likely to be received?

  3. Will policy be issued that standardizes the acceptable amount of difference in pricing between a SDVOSB/VOSB quote/proposal versus non-SDVOSB/VOSB quote/proposal?

  4. If proposals received from a SDVOSB/VOSB set-aside are higher than historical purchases for the same or similar items/services, is the price(s) received fair and reasonable?

1.  How is a "fair and reasonable price that offers best value to the Government" determined prior to issuing a solicitation and receiving quotes/bids/proposals?

Prior to solicitation, use market research results to determine if there is reasonable expectation two or more SDVOSBs or VOSBs are capable of performing the work and likely to submit an offer/quote at a fair and reasonable price that offers best value to the Government.  The market research should include any or all of the techniques identified in FAR 10.002(b)(2) External link to a government website such as reviewing the results of recent market research, publishing formal requests for information, obtaining source lists of similar items for other contracting activities or agencies, reviewing catalogs or other available product information published by manufacturers, etc.

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2.  What documentation is required in order to demonstrate a "fair and reasonable price that offers best value to the Government" is not likely to be received?

The market research must document due diligence in reviewing any or all of the techniques identified in FAR 10.002(b)(2) External link to a government website.  The VA form 2268 must be include the documentation resulting from the market research and must be routed in accordance with the latest OSDBU policy guidance on small business procurement reviews.

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3.  Will policy be issued that standardizes the acceptable amount of difference in pricing between a SDVOSB/VOSB quote/proposal versus non-SDVOSB/VOSB quote/proposal?

The VA does not plan to issue policy that standardizes the acceptable amount of difference in pricing between a SDVOSB/VOSB quote/proposal versus non-SDVOSB/VOSB quote/proposal.  The fair market price on a set-aside shall be the price achieved in accordance with the reasonable price guidelines in FAR 15.404-1(b) External link to a government website.

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4.  If proposals received from a SDVOSB/VOSB set-aside are higher than historical purchases for the same or similar items/services, is the price(s) received fair and reasonable?

The FAR provides guidance for determining a fair and reasonable price.  For example, FAR 15.404(a)(1) External link to a government website, states, “The contracting officer is responsible for evaluating the reasonableness of the offered prices.  The analytical techniques and procedures described in this section may be used, singly or in combination with others, to ensure that the final price is fair and reasonable.  The complexity and circumstances of each acquisition should determine the level of detail of the analysis required.”  FAR 15.403-1(b) External link to a government website states, “When adequate price competition exists (see 15.403-1(c)(1)) External link to a government website, generally no additional data are necessary to determine the reasonableness of price.”  The competitive proposals received may reflect the going market prices, but see FAR 15.403-1 External link to a government website.

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