BAFO (Best and Final Offer)

What is BAFOBESTAND (Final Offer)?

In government contracting, a Best and Final Offer (BAFO) represents the final revised proposal submitted by an offeror after negotiations with the government. It encapsulates the most advantageous terms the offeror is willing to provide, encompassing both technical and pricing aspects, and serves as the basis for the final contract award decision.

Definition

A BAFO occurs during the source selection process, typically after initial proposal submissions and discussions with the government. The contracting officer (CO) will request a BAFO when they believe they have reached a point where they understand each offeror's position but need a final, refined proposal to make a fair and informed decision. The request for BAFO often includes a list of specific areas where the government seeks clarification or improved terms.

The BAFO should represent the offeror's absolute best terms, as it is often the last opportunity to revise the proposal. Offerors must carefully consider all aspects of their offer, including pricing, technical approach, and any contractual terms, as the government will evaluate these against the original evaluation criteria and make an award decision based on the BAFOs received. The FAR does not explicitly define "BAFO," but its use is an established practice in negotiated procurements.

Key Points

• Final Opportunity: The BAFO is usually the last chance to improve your offer. Make sure it reflects your most competitive and realistic terms.
• Government's Discretion: The government is not obligated to request a BAFO, and may award a contract based on initial proposals if they deem it appropriate.
• Comprehensive Review: Review the government's feedback carefully and ensure your BAFO adequately addresses their concerns and requirements.
• Honest and Realistic: Your BAFO should be realistic and sustainable. Avoid making promises you cannot keep, as this can lead to performance issues and potential penalties.

Practical Examples

1. Pricing Negotiations: After discussions, the government informs all offerors that their proposed prices are too high. The contracting officer requests a BAFO focusing on price reductions. An offeror might then re-evaluate its cost structure and propose a lower, but still profitable, price in their BAFO.
2. Technical Clarifications: During discussions, the government raises concerns about an offeror's proposed technical approach. The contracting officer requests a BAFO addressing these concerns and clarifying the offeror's methodology. The offeror could then provide additional details, diagrams, or supporting data in their BAFO to alleviate the government's concerns.
3. Contractual Terms: During discussions, the government and an offeror disagree on certain contractual terms, such as payment schedules or intellectual property rights. The contracting officer requests a BAFO focusing on these specific terms. The offeror might then propose alternative terms that are more acceptable to both parties in their BAFO.