Two offers were received under an RFP for 1,000 each of several general-purpose wrenches. As shown in the table below, Tuff Tools was low on all items. During discussions with Tuff Tools, the contracting officer determined that the firm was planning to provide wrenches purchased from Loggins Tools. Loggins was the successful offeror on the last contract but the contract was subsequently terminated for failure to make timely deliveries.

Because of the recent default, the contracting officer advised Tuff Tools that Loggins Tools was an unacceptable source of supply. As a result, Tuff Tools decided to provide tools produced in-house.

Tuff Tools' final proposal revised its price as a result of the negotiations. However, Tuff Tools remained the low offeror on all items. Hardy Tools' final proposal revision confirmed the firm's original offer. The following table summarizes relevant pricing information.

 In performing the price analysis, the contracting officer considered comparisons with both historical prices paid and the prices quoted by the two competitors. For example, Tuff Tools' revised unit price offer for Item #1 is 42% higher than the firm's original offer and 170% higher than the previous contract unit price.

 

The contracting officer found that Tuff Tools' prices were fair and reasonable based on the available competition. The price determination noted that the price increases are due, in part, to the fact that the tools are being produced in- house as a result of the previous termination. The determination further noted that it is in the best interest of the government to pay higher prices to obtain better quality supplies in a timely manner.

Do you concur in the contracting officer's decision? Why or why not?

What other actions might the contracting officer have taken in determining price reasonableness?

Item Loggins Previous No. Unit Price $2.70 $2.75 $3.20 $3.75 $4.20 1 IN 2 3 4 LO 5 Tuff Tools Unit Price Tuff Tools Unit Price Hardy Tools Unit Original Revised Price $5.15 $7.30 $ 8.40 $5.20 $6.35 $ 7.60 $5.45 $8.00 $10.00 $6.55 $7.50 $ 8.65 $7.55 $9.45 $10.40