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GENERAL SERVICES ADMINISTRATION ACQUISITION MANUAL (GSAM)


Appendix 519E—Examples: Applying the SDB Price Evaluation Adjustment and HUBZone Price Evaluation Preference

The evaluation of HUBZone small business and small disadvantaged business concerns depends on the type of acquisition. The examples in this Appendix illustrate some different scenarios.

For most acquisitions, the following guidelines apply:

(a) First evaluate all offers without considering the Price Evaluation Preference (PEP), but considering the Price Evaluation Adjustment (PEA) factors to determine the otherwise successful offer.

(b) Continue the evaluation using the PEP.

(c) You must always consider price reasonableness.

The examples involve the following firms:

HD
a HUBZone small disadvantaged business concern
HS
a HUBZone small business concern
SD
a small disadvantaged business concern
SB
a small business concern
LB
a large business concern

Eval Price (1) means the evaluated price before consideration of the PEP (these examples assume that the only other consideration is the PEA)

Eval Price (2) means the evaluated price after consideration of the PEP.

The otherwise or apparent successful offeror at each step is highlighted in BOLD.

Assume that both the PEP and the PEA apply to the acquisition in each example.

Example 11
Business
Price offered
Eval Price (1)
Eval Price (2)
HD
110,000
110,000
110,000
SD
105,000
105,000
115,500
SB
100,000
110,000
120,000
LB
93,000
102,300
111,600
1Explanation: In this example, a small business concern is not the otherwise successful offeror after application of factors other than the PEP. Therefore, you apply the PEP. As a result, the HUBZone SDB is the apparent successful offeror.

Example 21
Business
Price offered
Eval Price (1)
Eval Price (2)
HD
110,000
110,000
110,000
HS
101,000
111,100
115,500
SD
105,000
105,000
120,000
SB
100,000
110,000
111,600
LB
102,000
112,200
 
1Explanation: In this example, the non-HUBZone small disadvantaged business concern is the otherwise successful offeror, so you do not apply the PEP to its offer. It is pointless to apply the PEP to any of the offers at this point, since it will not change the outcome of the competition.

Example 31
Business
Price offered
Eval Price (1)
Eval Price (2)
HD
111,000
111,000
111,000
HS
100,000
110,000
110,000
SD
105,000
105,000
115,000
SB
104,000
114,400
124,800
LB
95,000
104,500
114,000
1Explanation: Both the PEA and the PEP are applied, resulting in the HUBZone being the apparently successful offeror.

Example 41
Business
Price offered
Eval Price (1)
Eval Price (2)
Eval Price (PEP only)
HD
119,900
119,900
119,900
119,900
LB1
100,000
110,000
120,000
110,000
LB2
101,000
111,100
121,200
111,100
LB3
100,500
110,550
120,600
110,550
LB4
100,600
110,660
120,720
110,660
LB5
100,300
110,330
120,360
110,330
1Explanation: In this case (based on knowledge of the item being acquired, market research, and Government records) you determined that $119,900 is not a reasonable price. Therefore, you re-evaluated the offers using only the PEP (which is statutory). FAR 19.1103(c) provides that the contracting officer may not evaluate offers using the PEA if it would cause award to be made at a price that exceeds fair market value by more than 10%.

NOTE: In each of the above cases where offers were received from HUBZone small business, small disadvantaged business, and small business concerns, the contracting officer may not have done adequate market research. These acquisitions should have been set aside for small business because two or more small business concerns could have responded.


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