52.214-22
Evaluation of Bids for Multiple Awards
When multiple awards are possible, the Government adds a $500 administrative cost per contract to each bid for evaluation, awarding to the combination that results in the lowest total cost.
Overview
FAR 52.214-22 outlines how the Government evaluates bids when multiple awards may be made under a single solicitation. The provision requires that, in addition to price and other evaluation factors, the Government will consider the administrative costs associated with making more than one award. For evaluation purposes, a fixed administrative cost of $500 per contract is assumed. The Government will select the combination of awards (single or multiple) that results in the lowest total cost, including these administrative costs. This approach ensures that the Government does not incur unnecessary expenses by making multiple awards unless it is cost-effective to do so.
Key Rules
- Evaluation of Multiple Awards
- Bids are evaluated not just on price, but also on the potential administrative costs of issuing multiple contracts.
- Assumed Administrative Cost
- A fixed cost of $500 per contract is added for evaluation purposes when considering multiple awards.
- Lowest Aggregate Cost
- Awards are made for items or combinations of items that yield the lowest total cost to the Government, including administrative costs.
Responsibilities
- Contracting Officers: Must include this provision in applicable solicitations and evaluate bids using the $500 administrative cost per contract when considering multiple awards.
- Contractors: Should be aware that their bids may be evaluated in combination with others, and that the Government may favor fewer awards if it reduces total cost.
- Agencies: Must ensure evaluation procedures are followed and administrative costs are properly considered.
Practical Implications
- This provision discourages unnecessary multiple awards by factoring in administrative costs, potentially favoring bidders who can supply more items or combinations.
- Contractors should consider the impact of administrative costs on their competitiveness, especially when bidding on partial requirements.
- Misunderstanding this evaluation method can lead to unexpected award outcomes or lost opportunities.