Some Ideas to Help Sway Source Selection Officials - Technical & Cost Sections should be Consistent
The first thing to remember when explaining your contract pricing is to be certain that your technical proposal and your price match, not just in your eyes, but in the eyes of the evaluator as well. Obvious you say? It would seem so, but a remarkable amount of proposals are rejected for just this reason and it is often due to unexplained pricing. When the Contracting Officer does a quick and dirty "price reasonableness" test, where staffing hours are multiplied by wage rates, the price is found to be too low to support the staffing level. The proposer finds they are suddenly outside the competitive range or receiving a letter that says "your price is too low."
You may have developed a plan that overcomes the obvious conclusion that the Contracting Officer has reached. You may have used temporary personnel, assumption of duties by professional employees, avoidance of overtime by shift work, or other cost manipulation, but it won’t save you if the perception is that your cost is too low to support the technical proposal. You may have a chance to explain, but don’t count on it. With your initial submittal you must be sure the Contracting Officer will find sufficient costing to support your technical proposal and will understand how you got there.
If you receive the "too low" letter, before you raise your price, look at how well your technical proposal is supported by your price. Consider an explanation of how you arrived at your price. Rather than raising your price, and finding yourself underbid, a better strategy may be to revise your staffing and leave your price as is, or merely explaining the cost cutting measures that got you there.
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