ABSTRACT
The criticality of obtaining funding in order for the source selection process to proceed is explained in Appendix B. To fund a RFP, the government formulates an estimated cost for the contract and establishes a budget that matches that cost. Therefore, those presenting solutions to government agencies need to understand the availability of funding so that the solution can be successfully crafted to fit within the framework of what the government can afford. In the official evaluation of proposals, the price presented by the offeror is always a factor in the evaluation methodology. For LPTA RFP solicitations, the lowest price is the primary method of selecting the winner from those proposals that have been evaluated to be technically acceptable. For best-value RFP solicitations, the weight of the proposed price will often be stated in Section M of the RFP. If the price is below the government cost estimated, then the offeror will save the government money. However, if the price is far below the government cost estimate, then the government might conduct a price realism analysis and determine associated risks to performance. In cases such as LPTA procurements, the government could be so confident that minimum acceptable performance will be gained through the selection process that the RFP requirements language on price is that it only has to be reasonable but not realistic. In other words, risks in proposals being underpriced are accepted as long as the prices are not absurd.
