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e-CFR data is current as of January 15, 2021

Title 48Chapter 1Subchapter DPart 25Subpart 25.5 → §25.504-4

Title 48: Federal Acquisition Regulations System
Subpart 25.5—Evaluating Foreign Offers—Supply Contracts

25.504-4   Group award basis.

(a) Example 1.

1DO = $55,000EL = $56,000NEL = $50,000
2NEL = 13,000EL = 10,000EL = 13,000
3NEL = 11,500DO = 12,000DO = 10,000
4NEL = 24,000EL = 28,000NEL = 22,000
5DO = 18,000NEL = 10,000DO = 14,000

Key: DO = Domestic end product; EL = Eligible product; NEL = Noneligible product.

Problem: Offeror C specifies all-or-none award. Assume all offerors are large businesses. The acquisition is not covered by the WTO GPA .

Analysis: (see 25.503)

STEP 1: Evaluate Offers A & B before considering Offer C and determine which offer has the lowest evaluated cost for each line item (the tentative award pattern):

Item 1: Low offer A is domestic; select A.

Item 2: Low offer B is eligible; do not apply factor; select B.

Item 3: Low offer A is noneligible and Offer B is a domestic offer. Apply a 6 percent factor to Offer A. The evaluated price of Offer A is higher than Offer B; select B.

Item 4: Low offer A is noneligible. Since neither offer is a domestic offer, no evaluation factor applies; select A.

Item 5: Low offer B is noneligible; apply a 6 percent factor to Offer B. Offer A is still higher than Offer B; select B.

STEP 2: Evaluate Offer C against the tentative award pattern for Offers A and B:

Low offerTentative award pattern from A and BC
1ADO = $55,000*NEL = $53,000
2BEL = 10,000EL = 13,000
3BDO = 12,000DO = 10,000
4ANEL = 24,000NEL = 22,000
5B*NEL = 10,600DO = 14,000

*Offer + 6 percent.

On a line item basis, apply a factor to any noneligible offer if the other offer for that line item is domestic.

For Item 1, apply a factor to Offer C because Offer A is domestic and the acquisition was not covered by the WTO GPA . The evaluated price of Offer C, Item 1, becomes $53,000 ($50,000 plus 6 percent). Apply a factor to Offer B, Item 5, because it is a noneligible product and Offer C is domestic. The evaluated price of Offer B is $10,600 ($10,000 plus 6 percent). Evaluate the remaining items without applying a factor.

STEP 3: The tentative unrestricted award pattern from Offers A and B is lower than the evaluated price of Offer C. Award the combination of Offers A and B. Note that if Offer C had not specified all-or-none award, award would be made on Offer C for line items 1, 3, and 4, totaling an award of $82,000.

(b) Example 2.

1DO = $50,000EL = $50,500NEL = $50,000
2NEL = 10,300NEL = 10,000EL = 10,200
3EL = 20,400EL = 21,000NEL = 20,200
4DO = 10,500DO = 10,300DO = 10,400

Problem: The solicitation specifies award on a group basis. Assume the Buy American statute applies and the acquisition cannot be set aside for small business concerns. All offerors are large businesses.

Analysis: (see 25.503(c))

STEP 1: Determine which of the offers are domestic (see 25.503(c)(1)):

A60,500/91,200 = 66.3%Domestic
B10,300/91,800 = 11.2%Foreign
C10,400/90,800 = 11.5%Foreign

STEP 2: Determine whether foreign offers are eligible or noneligible offers (see 25.503(c)(2)):

   Domestic + eligible
B81,800/91,800 = 89.1%Eligible
C20,600/90,800 = 22.7%Noneligible

STEP 3: Determine whether to apply an evaluation factor (see 25.503(c)(3)). The low offer (Offer C) is a foreign offer. There is no eligible offer lower than the domestic offer. Therefore, apply the factor to the low offer. Addition of the 6 percent factor (use 12 percent if Offer A is a small business) to Offer C yields an evaluated price of $96,248 ($90,800 + 6 percent). Award on Offer A (see 25.502(c)(4)(ii)). Note that, if Offer A were greater than Offer B, an evaluation factor would not be applied and award would be on Offer C (see 25.502(c)(3)).

[64 FR 72419, Dec. 27, 1999; 65 FR 4633, Jan. 31, 2000; 69 FR 77875, Dec. 28, 2004; 79 FR 24209, Apr. 29, 2014]

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