Best and Final Offer

Q.  Is it permissible for an offeror to lower its price for the Best and Final Offer (BAFO) without any basis for the change, other than trying to beat out the competition, or does the price reduction have to be based on changes or other clarifications discussed during the presentation? We are participating as an offeror and have been asked for a BAFO.

A.  Yes, the basis for change may be solely the desire to increase your chances of winning the contract award by lowering your price.  If the contract you are competing for is a cost-reimbursement type contract, the procuring agency may well ask you for your rationale in lowering the original cost estimates to do the work. They would be concerned about a "buy in" at an unrealistic total estimated cost, and since you would not be contractually bound to complete the contract at that estimated cost, they would want to know if the estimated cost was realistic. You will then need to provide them with reassurance that you will in fact honor the price you offered.
(Revised: August 21, 2009)

Q. How do you request a "Best and Final Offer"?

A. Requests for best and final offers must be in writing. If the request is made orally to expedite the process, it must be confirmed in writing. The letter requesting best and final offers has four essential elements:

  1. Specific notice that discussions are concluded.
  2. Notice that this is the opportunity for the offeror to submit a best and final offer.
  3. A definite, common cutoff date and time that allows a reasonable opportunity for the preparation and submission of the best and final offer.
  4. Notice that the final offer must be received at the place designated by the time and date set in the request and is subject to any provisions dealing with late submissions, modifications and withdrawals of proposals set forth in the solicitation.

A discussion of best and final offers may be found in the Best Practices Procurement Manual, Section 4.5.5.2 and in the Federal Acquisition Regulation, Section 15.611. (Reviewed: August 21, 2009)