OASIS Request for Proposal Series #4: Pricing Proposal

Thank you for continuing to follow our special GSA OASIS blog series. In case you missed it, GSA released the final solicitations for both OASIS (GS00Q-13-DR-0001) and OASIS SB (GS00Q-13-DR-0002) on FedBizOpps Wednesday, July 31, 2013. Questions about the solicitation must be submitted to oasis@gsa.gov NLT August 20th at 4:00pm CDT and proposals are due NLT Tuesday, September 17th at 4:00pm CDT. Please see the solicitations for detailed submission requirements.

In today’s post, I will be discussing the pricing proposal sections of OASIS and OASIS SB. What you might find peculiar about the pricing proposal is that, after all the talk about points in the other evaluation criteria, there are no points to be earned on the pricing proposal. The source selection strategy for OASIS is “highest technically rated with fair and reasonable pricing.” Accordingly, price will not be used to differentiate between offerors. This may seem hard to believe, but pricing will be evaluated on a pass/fail basis only. As long as you propose fair and reasonable pricing, you will pass the pricing section. So, you may be wondering, how will I know if my pricing is fair and reasonable? This is where things start to get interesting.

One aspect of OASIS that consistently raised the most concern in industry is its use of  standardized labor categories. While many argued that this was a dangerous attempt to “commoditize” professional services, GSA disagreed. Using the Office of Management and Budget’s Standard Occupational Classifications (SOC) as a guide, GSA has created a labor category structure for OASIS comprised of 26 groups of major professional categories (such as actuary, statistician, and writer) that are associated with either a single SOC or a group of related SOCs. There are Junior, Journeyman, Senior, and Subject Matter Specialist positions under each grouping, with standardized education and experience requirements, totaling of 104 positions. Detailed position descriptions are included in Section J.1, Attachment 1. Offerors are required to propose a ceiling price for all positions.

A benefit for GSA of using this basis for the OASIS labor categories is that the Bureau of Labor Statistics (BLS) maintains pay data for SOCs on both national and state levels. Using the BLS information, GSA has come up with a high-low range for direct (unburdened) pay rates for all labor categories (see Section J.2, Attachment 2). In regard to this methodology, GSA stated, “We are not dictating what rates shall be proposed. We have simply provided the basis that we will use in determining fair and reasonable pricing. If proposed pricing for direct labor falls within the ranges provided, no justification is necessary. If proposed prices are outside the ranges provided, Offerors must provide clear and convincing justification that the proposed direct labor rates are fair and reasonable.” Please note that if GSA does not accept your rationale, your pricing proposal will fail and you will not be eligible for award regardless of how many technical points you receive.

Once you have determined your direct pay rates for each category, you will enter those unburdened rates into Attachment 9, Cost/Price Template. You must also enter your current DCAA-approved indirect rates or, in the event that you do not have DCAA-approved rates, the indirect rates generated from your acceptable accounting system into the spreadsheet to calculate your fully-loaded ceiling rates. Profit rates for OASIS are capped at 7.0%. To determine out-year rates, the current Economic Cost Index (ECI) three-year average escalation rate of 2.13% has been loaded into Attachment 9, which automatically generates proposed year 2-15 rates. As was the case with the direct pay rates, any contractor who wants to use indirect rates that deviate from the requirements or propose a fee percentage higher than 7.0% must provide convincing justification that these rates are reasonable.

A Note About How OASIS Task Orders Will Use Ceiling Rates: It is important to keep in mind that the proposed ceiling rates will only be used for Time and Materials or Labor Hour (T&M/L-H) task orders without adequate price competition and, even in that scenario, the ceiling rates can be exceeded if the task order is OCONUS or has a classified component. In all other cases, the ordering agency’s Contracting Officer has  discretion to negotiate task order pricing. That does not guarantee that agency Contracting Officers might not treat the ceiling rates as a true ceiling on any OASIS task order, but that is not GSA’s intention in requiring the submission of ceiling rates. This possibility may end being an important consideration as you put your pricing proposal together.

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