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                            25.504-4 Group award basis.
        
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FAC Number: 2024-03 Effective Date: 02/23/2024
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Subpart25.025.125.225.325.425.525.625.725.825.925.1025.11
Section25.50125.50225.50325.504
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25.504-4 Group award basis.25.504-4 Group award basis.       (a)                   *Example 1*.                OFFERSItem                            A                            B                            C1                            DO                            =                            $55,000                            EL                            =                            $56,000                            NEL                            =                            $50,0002                            NEL                            =                            $13,000                            EL                            =                            $10,000                            EL                            =                            $13,0003                            NEL                            =                            $11,500                            DO                            =                            $12,000                            DO                            =                            $10,0004                            NEL                            =                            $24,000                            EL                            =                            $28,000                            NEL                            =                            $22,0005                            DO                            =                            $18,000                            NEL                            =                            $10,000                            DO                            =                            $14,000$121,500                            $116,000                            $109,000                *Key:*DO                            =                            Domestic end productEL                            =                            Eligible productNEL                            =                            Noneligible product                *Problem*: Offeror C specifies all-or-none award. Assume all offerors are large businesses. The acquisition is not covered by the WTO GPA.                *Analysis*: (see  25.503)                *STEP 1*: Evaluate Offers A & B before considering Offer C and determine which offer has the lowest evaluated cost for each line item (the tentative award pattern):                *Item 1*: Low offer A is domestic; select A.                *Item 2*: Low offer B is eligible; do not apply factor; select B.                *Item 3*: Low offer A is noneligible and Offer B is a domestic offer. Apply a 20 percent factor to Offer A. The evaluated price of Offer A is higher than Offer B; select B.                *Item 4*: Low offer A is noneligible. Since neither offer is a domestic offer, no evaluation factor applies; select A.                *Item 5*: Low offer B is noneligible; apply a 20 percent factor to Offer B. Offer A is still higher than Offer B; select B.                *STEP 2*: Evaluate Offer C against the tentative award pattern for Offers A and B:                OFFERSItem                            Low Offer                            Tentative Award Pattern from A and B                            C1                            A                            DO                            =                            $ 55,000                            *NEL                            =                            $60,0002                            B                            EL                            =                            $10,000                            EL                            =                            $13,0003                            B                            DO                            =                            $12,000                            DO                            =                            $10,0004                            A                            NEL                            =                            $24,000                            NEL                            =                            $22,0005                            B                            *NEL                            =                            $12,000                            DO                            =                            $14,000TOTAL                                                        $113,000                            $119,000                *Offer + 20 percent.                On a line item basis, apply a factor to any noneligible offer if the other offer for that line item is domestic.                For Item 1, apply a factor to Offer C because Offer A is domestic and the acquisition was not covered by the WTO GPA. The evaluated price of Offer C, Item 1, becomes $60,000 ($50,000 plus 20 percent). Apply a factor to Offer B, Item 5, because it is a noneligible product and Offer C is domestic. The evaluated price of Offer B is $12,000 ($10,000 plus 20 percent). Evaluate the remaining items without applying a factor.                STEP 3: The tentative unrestricted award pattern from Offers A and B is lower than the evaluated price of Offer C. Award the combination of Offers A and B. Note that if Offer C had not specified all-or-none award, award would be made on Offer C for line items 3 and 4, totaling an award of $32,000.                                          (b)                   *Example 2*.                OFFERSItem                            A                            B                            C1                            DO                            =                            $50,000                            EL                            =                            $50,500                            NEL                            =                            $50,0002                            NEL                            =                            $10,300                            NEL                            =                            $10,000                            EL                            =                            $10,2003                            EL                            =                            $20,400                            EL                            =                            $21,000                            NEL                            =                            $20,2004                            DO                            =                            $10,500                            DO                            =                            $10,300                            DO                            =                            $10,400TOTAL                            $91,200                            $91,800                            $90,800                *Problem:* The solicitation specifies award on a group basis. Assume the Buy American statute applies and the acquisition cannot be set aside for small business concerns. All offerors are large businesses.                *Analysis:* (see  25.503(c))                STEP 1: Determine which of the offers are domestic (see  25.503(c)(1)):                Domestic [percent]                            DeterminationA                            $50,000 (Offer A1) + $10,500 (Offer A4) = $60,500                               $60,500/$91,200 (Offer A Total) = 66.3%                            DomesticB                            $10,300 (Offer B4) /$91,800 (Offer B Total) $ = 11.2%                            ForeignC                            $10,400 (Offer C4) /$90,800 (Offer C Total) = 11.5%                            Foreign                *STEP 2*: Determine whether foreign offers are eligible or noneligible offers (see  25.503(c)(2)):                Domestic + Eligible [percent]                            DeterminationA                            N/A (Both Domestic)                            DomesticB                            $50,500 (Offer B1) + $21,000 (Offer B3) + $10,300 (Offer B4)= $81,800.                               $81,800 /$91,800 (Offer B Total) = 89.1%                            EligibleC                            $10,200 (Offer C2) + $10,400 (Offer C4) = $20,600.                               $20,600/$90,800 (Offer C Total) = 22.7%                            Noneligible                *STEP 3:* Determine whether to apply an evaluation factor (see  25.503(c)(3)). The low offer (Offer C) is a foreign offer. There is no                   eligible offer lower than the domestic offer. Therefore, apply the factor to the                   low offer. Addition of the 20 percent factor (use 30 percent if Offer A is a small                   business) to Offer C yields an evaluated price of $108,960 ($90,800 + 20 percent).                   Award on Offer A (see  25.502(c)(4)(ii)). Note that, if Offer A                   were greater than Offer B, an evaluation factor would not be applied, and award                   would be on Offer C (see  25.502(c)(3)).                                          (c)                   *Example                      3*.                OFFERSItem                            A                            B                            C1                            DO                            =                            $17,800                            FO (>55%)                            =                            $16,000                            FO (>55%)                            =                            $11,2002                            FO (>55%)                            =                            $9,000                            FO (>55%)                            =                            $8,500                            DO                            =                            $10,2003                            FO (>55%)                            =                            $11,200                            FO (>55%)                            =                            $12,000                            FO (>55%)                            =                            $11,0004                            DO                            =                            $10,000                            DO                            =                            $9,000                            FO (>55%)                            =                            $6,400Total                            $48,000                            $45,500                            $38,800.                *Key:*                DO = Domestic end product (complies with the                   required domestic content).                FO > 55% = Foreign end product with domestic                   content exceeding 55%.                FO < 55% = Foreign end product with domestic                   content of 55% or less.                *Problem:* The solicitation specifies                   award on a group basis. Assume only the Buy American statute applies (                      *i.e.,* no trade agreements apply) and the acquisition cannot be set aside                   for small business concerns. All offerors are large businesses.                *Analysis:* (see  25.503(d))                *STEP 1:* Determine which of the offers                   are domestic (see  25.503(d)(1)).                Domestic [percent]                            DeterminationA                            $17,800 (Offer A1) + $10,000 (Offer A4) =                                  $27,800                               $27,800/$48,000 (Offer A Total) = 58%                            DomesticB                            $9,000 (Offer B4)/$45,500 (Offer B Total) =                                  19.8%                            ForeignC                            $10,200 (Offer C2)/$38,800 (Offer C Total) =                                  26.3%                            Foreign                *STEP 2:* Determine which offer,                      domestic or foreign, is the low offer. If the low offer is a foreign offer,                      apply the evaluation factor (see 25.503(d)(2)). The low offer (Offer C) is a                      foreign offer. Therefore, apply the factor to the low offer. Addition of the 20                      percent factor (use 30 percent if Offer A is a small business) to Offer C                      yields an evaluated price of $46,560 ($38,800 + 20 percent). Offer C remains                      the low offer.                                *STEP 3:* Determine if there is a foreign                   offer that could be treated as a domestic offer (see  25.106(b)(2)                   and  25.503(d)(2)).                Amount of domestic content (percent)                            DeterminationA                            N/A                            N/AB                            $9,000 (Offer B4)/$45,500 (Offer B Total) $ =                                  19.8% is domestic                               AND                               $16,000 (Offer B1) + $8,500 (Offer B2) + $12,000                                  (Offer B3) = $36,500                               $36,500/$45,500 (Offer B Total) = 80.2% can be treated as                                  domestic                               19.8% + 80.2% = 100% is domestic or can be treated as domestic                            Can be treated as domestic.C                            $10,200 (Offer C2)/$38,800 (Offer C Total) = 26.3% is                               domestic                            Noneligible                *STEP 4:* If there is a foreign offer that                   could be treated as a domestic offer, compare the evaluated price of the low offer                   to the price of the offer treated as domestic ( *see*                    25.503(d)(3)). Offer B can be treated as a domestic offer ($45,500). The                   evaluated price of the low offer (Offer C) is $46,560. Award on Offer B.    **Parent topic:**  25.504 Evaluation examples.
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