14.201-8
Price related factors
Price-related factors beyond the initial bid price—such as transportation, taxes, and Buy American requirements—must be considered in bid evaluations and included in solicitations when applicable.
Overview
FAR 14.201-8 outlines the price-related factors that must be considered when evaluating bids for government contracts under sealed bidding procedures. These factors ensure that the government accurately assesses the true cost and value of each bid, beyond just the initial price. The regulation requires that applicable factors be included in the solicitation and considered during evaluation, such as transportation costs, changes to solicitation provisions, the impact of multiple awards, taxes, and the origin of supplies (including Buy American and foreign purchase restrictions).
Key Rules
- Foreseeable Costs or Delays
- Consider costs or delays from inspection, supply locations, and transportation. Transportation costs must be included for f.o.b. origin bids.
- Bidder-Requested Changes
- Evaluate changes made or requested by bidders, unless they are grounds for rejection under FAR 14.404.
- Multiple Awards
- Factor in administrative costs ($500 per contract) when considering multiple awards, ensuring the lowest aggregate cost to the government.
- Taxes
- Include federal, state, and local taxes in bid evaluation as per FAR Part 29.
- Origin of Supplies
- Consider the origin of supplies and apply the Buy American statute or other foreign purchase restrictions as per FAR Part 25.
Responsibilities
- Contracting Officers: Must include applicable price-related factors in solicitations and evaluate bids accordingly.
- Contractors: Should be aware of and address these factors in their bids to ensure compliance and competitiveness.
- Agencies: Oversee that solicitations and evaluations adhere to these requirements.
Practical Implications
- This section ensures the government selects the bid with the lowest overall cost, not just the lowest price.
- Contractors must carefully review solicitation instructions and factor in all applicable costs and statutory requirements.
- Common pitfalls include overlooking transportation costs, administrative costs for multiple awards, or failing to comply with Buy American requirements.