Overview
This section provides detailed mathematical scenarios and procedural steps for applying price evaluation factors under the Buy American statute and various trade agreements. it illustrates how Contracting Officers must calculate "evaluated prices" to determine whether domestic offers are reasonable or if awards should be made to foreign or eligible products.
Key Rules
- Price Evaluation Factors: A 30% factor is typically applied to foreign offers when the competing domestic offer is from a small business; a 20% factor is applied when the domestic offer is from a large business.
- Small Business Set-Asides: For acquisitions set aside for small businesses, trade agreements generally do not apply, and the Buy American statute is the primary governing factor regardless of the dollar value.
- Domestic Content Thresholds: Offers of U.S.-made end products that exceed 55% domestic content can be "treated as domestic" if the initial domestic offer is found unreasonable after the first round of evaluation.
- WTO GPA Priority: Under the WTO Government Procurement Agreement, if at least one U.S.-made or "eligible" product is offered, the Contracting Officer must eliminate offers of "noneligible" products.
- Group Award Evaluations: For group awards, the domestic or foreign status of an entire offer is determined by calculating whether the value of the domestic (or domestic + eligible) components exceeds 50% of the total price of the group.
Practical Implications
- Evaluated vs. Actual Price: Contractors must understand that the lowest bid on paper may lose the award if the application of Buy American evaluation factors makes a domestic offer more "competitive" in the eyes of the government.
- Strategic Product Mix: In group award scenarios, offerors can maintain "domestic" status for a whole package by ensuring the majority of the value comes from domestic components, even if some individual items are foreign.
- Threshold Awareness: Small businesses providing U.S.-made products with less than 55% domestic content are evaluated as foreign, highlighting the critical importance of supply chain tracking for compliance.