Winning a multiple-award contract earns you a seat; each order is its own competition. The contracting officer must provide each awardee a fair opportunity to be considered for each order exceeding the micro-purchase threshold 1, and may exercise broad discretion in developing appropriate order placement procedures 2.
If the contract did not establish the price for the supply or service, the contracting officer must establish prices for each order using the policies and methods in FAR subpart 15.4 3. For DoD, NASA and the Coast Guard, a contracting officer who leaves price out of the award evaluation for such a contract must consider price or cost as one of the factors in the selection decision for each order 4.
GSA schedules: rates found reasonable, total price still judged
GSA has already determined the prices of supplies and fixed-price services, and rates for services offered at hourly rates, under schedule contracts to be fair and reasonable 5. Even so, for an order for services requiring a statement of work, FAR 8.405-2(d) makes the ordering activity responsible for considering the level of effort and the mix of labor proposed for the specific task being ordered, and for determining that the total price is reasonable 6. Ordering activities may also request a price reduction at any time before placing an order 7, and the ordering activity shall seek a price reduction when the order or BPA exceeds the simplified acquisition threshold 8.
Time-and-materials work carries its own limit: such a contract or order includes a ceiling price that the contractor exceeds at its own risk 9.
Worked example. Contractor P's schedule rate for a senior analyst is $120 an hour and for a junior analyst $85. An order needs analysis work that juniors can do under senior review. Contractor P proposes 300 senior hours and 900 junior hours instead of 1,200 senior hours, and offers the senior rate at $112 because the order is large. Its total is $110,100 against $144,000 for an all-senior team at the full rate, and every hour still sits above its loaded cost.
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