Overview
FAR 25.503 establishes the procedures for evaluating "all-or-none" or grouped line item offers to determine how Buy American and Trade Agreement evaluation factors should be applied. It provides specific methodologies for comparing group offers against individual line-item offers and for categorizing a group as domestic or foreign based on the total value of the items within that group.
Key Rules
- Mandatory Rejection: Group offers must be rejected if they contain prohibited end products (per FAR subpart 25.7) or if they violate specific WTO GPA restrictions under FAR 25.403(c).
- Offeror-Restricted Evaluation: If an offeror restricts their bid to an all-or-none group, the contracting officer must first establish a "tentative award pattern" by selecting the lowest evaluated price for each individual line item from all other offers. The restricted group offer is only successful if its total evaluated price is lower than the sum of the tentative award pattern.
- Classification by Value: When an award must be made on a group basis, the entire group is classified as a "domestic offer" if the proposed price of the domestic end products exceeds 50% of the total group price.
- Eligible Product Thresholds: For foreign offers under trade agreements, if the combined price of domestic and eligible products exceeds 50% of the total group price, the entire group is evaluated as an "eligible offer."
- Buy American Application: If no trade agreements apply, the 50% value rule still determines domestic status, with specific evaluation factors applied to the group as a whole rather than item-by-item.
Practical Implications
- Strategic Grouping: Offerors can potentially have foreign end products treated as domestic for evaluation purposes if they bundle them with enough high-value domestic items to exceed the 50% threshold.
- Administrative Complexity: Contracting officers must perform dual calculations—evaluating individual line items to create a baseline and then comparing that baseline against grouped bids—to ensure the government does not pay a premium for an offeror's grouping restriction.