14.408-2
Responsible bidder-reasonableness of price
Contracting officers must ensure both contractor responsibility and price reasonableness—including checking for materially unbalanced bids—before awarding a contract.
Overview
FAR 14.408-2 outlines the requirements for contracting officers to ensure that a prospective contractor is responsible and that the prices offered are reasonable before awarding a contract. This section emphasizes the use of price analysis techniques, referencing FAR 15.404-1(b), and requires that determinations be made based on all relevant circumstances. Special attention is required when only a single bid is received, as this may present unique challenges in assessing price reasonableness. Additionally, the regulation mandates that price analysis must consider whether bids are materially unbalanced, as defined in FAR 15.404-1(g).
Key Rules
- Responsibility Determination
- Contracting officers must confirm the responsibility of the prospective contractor in accordance with FAR subpart 9.1 before contract award.
- Price Reasonableness
- Officers must determine that offered prices are reasonable, using price analysis techniques as guidelines, especially when only one bid is received.
- Materially Unbalanced Bids
- Price analysis must include an assessment of whether any bids are materially unbalanced, which could affect contract performance or payment.
Responsibilities
- Contracting Officers: Must verify contractor responsibility, assess price reasonableness, and check for materially unbalanced bids before awarding a contract.
- Contractors: Should ensure their bids are balanced and pricing is justifiable.
- Agencies: Must provide oversight to ensure compliance with these requirements.
Practical Implications
- This section ensures that contracts are awarded only to responsible contractors at fair and reasonable prices, protecting government interests.
- It highlights the importance of thorough price analysis, especially in single-bid situations or when bid prices appear unbalanced.
- Failure to comply can result in improper awards, increased risk, or protest.