Acquisition Reform:

Review of Selected Best-Value Contracts

NSIAD-99-93R: Published: Apr 14, 1999. Publicly Released: May 14, 1999.

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Louis J. Rodrigues
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Pursuant to a congressional request, GAO provided information on the government's best-value awards to contractors other than those submitting the lowest-priced offers.

GAO noted that: (1) of the over 250 contracts GAO reviewed, 53 were awarded to other than the lowest offeror because the buying official decided that a higher offeror provided the government the best value; (2) those 53 contracts had evaluated prices totalling about $5.3 billion; (3) the premiums accounted for about 7 percent, or about $367 million, of the total value; (4) the Federal Acquisition Regulation (FAR) does not specify the types of goods or services for which premiums may be paid; (5) however, GAO found that the majority of contracts that involved premiums were for sophisticated government products and services; (6) laws and the FAR require the government to clearly state evaluation factors and their relative importance in the solicitation and require award decisions to be based solely on those factors; (7) for the 53 contracts GAO reviewed, government buyers complied with the requirements and linked their decisions for selecting the higher-priced proposals to the key evaluation factors identified in the solicitations; (8) the FAR was changed in 1997 to require agencies to document, in the contract file, that the perceived benefits of the higher-priced proposal merited the additional cost; (9) although contracts in GAO's review predated this requirement, documentation citing such justifications was included for each of the 53 contracts; (10) government buyers frequently based their decisions to choose higher-priced offers on the offerors' superior technical ability, exceptional management practices, or outstanding relevant experience; and (11) GAO also found documentation that related the premium decision to the awardee's excellent ability to meet technical requirements within statutory timeframes because of superior relevant experience with similar previous contracts.

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