FAR 25.504-4 Group award basis
Subsection Federal Acquisition Regulation
Facts
- Citation
- FAR 25.504-4
- Type
- Subsection
- Last amended
- 87 FR 12780 Effective Oct 25, 2022
- Text as of
- FAC 2026-01
- Official text
- acquisition.gov
Text from acquisition.gov. Federal Register history from the Federal Register's records of the rules that amended this subsection.
Text
(a) Example 1.
| OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS |
|---|---|---|---|---|---|---|---|---|---|
| Item | A | A | A | B | B | B | C | C | C |
| 1 | DO | = | $55,000 | EL | = | $56,000 | NEL | = | $50,000 |
| 2 | NEL | = | $13,000 | EL | = | $10,000 | EL | = | $13,000 |
| 3 | NEL | = | $11,500 | DO | = | $12,000 | DO | = | $10,000 |
| 4 | NEL | = | $24,000 | EL | = | $28,000 | NEL | = | $22,000 |
| 5 | DO | = | $18,000 | NEL | = | $10,000 | DO | = | $14,000 |
| $121,500 | $121,500 | $121,500 | $116,000 | $116,000 | $116,000 | $109,000 | $109,000 | $109,000 |
| Key: | ||
|---|---|---|
| DO | = | Domestic end product |
| EL | = | Eligible product |
| NEL | = | Noneligible product |
Problem: Offeror C specifies all-or-none award. Assume all offerors are large businesses. The acquisition is not covered by the WTO GPA.
Analysis: (see 25.503)
STEP 1: Evaluate Offers A & B before considering Offer C and determine which offer has the lowest evaluated cost for each line item (the tentative award pattern):
Item 1: Low offer A is domestic; select A.
Item 2: Low offer B is eligible; do not apply factor; select B.
Item 3: Low offer A is noneligible and Offer B is a domestic offer. Apply a 20 percent factor to Offer A. The evaluated price of Offer A is higher than Offer B; select B.
Item 4: Low offer A is noneligible. Since neither offer is a domestic offer, no evaluation factor applies; select A.
Item 5: Low offer B is noneligible; apply a 20 percent factor to Offer B. Offer A is still higher than Offer B; select B.
STEP 2: Evaluate Offer C against the tentative award pattern for Offers A and B:
| OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS |
|---|---|---|---|---|---|---|---|
| Item | Low Offer | Tentative Award Pattern from A and B | Tentative Award Pattern from A and B | Tentative Award Pattern from A and B | C | C | C |
| 1 | A | DO | = | $ 55,000 | *NEL | = | $60,000 |
| 2 | B | EL | = | $10,000 | EL | = | $13,000 |
| 3 | B | DO | = | $12,000 | DO | = | $10,000 |
| 4 | A | NEL | = | $24,000 | NEL | = | $22,000 |
| 5 | B | *NEL | = | $12,000 | DO | = | $14,000 |
| TOTAL | $113,000 | $113,000 | $113,000 | $119,000 | $119,000 | $119,000 |
*Offer + 20 percent.
On a line item basis, apply a factor to any noneligible offer if the other offer for that line item is domestic.
For Item 1, apply a factor to Offer C because Offer A is domestic and the acquisition was not covered by the WTO GPA. The evaluated price of Offer C, Item 1, becomes $60,000 ($50,000 plus 20 percent). Apply a factor to Offer B, Item 5, because it is a noneligible product and Offer C is domestic. The evaluated price of Offer B is $12,000 ($10,000 plus 20 percent). Evaluate the remaining items without applying a factor.
STEP 3: The tentative unrestricted award pattern from Offers A and B is lower than the evaluated price of Offer C. Award the combination of Offers A and B. Note that if Offer C had not specified all-or-none award, award would be made on Offer C for line items 3 and 4, totaling an award of $32,000.
(b) Example 2.
| OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS |
|---|---|---|---|---|---|---|---|---|---|
| Item | A | A | A | B | B | B | C | C | C |
| 1 | DO | = | $50,000 | EL | = | $50,500 | NEL | = | $50,000 |
| 2 | NEL | = | $10,300 | NEL | = | $10,000 | EL | = | $10,200 |
| 3 | EL | = | $20,400 | EL | = | $21,000 | NEL | = | $20,200 |
| 4 | DO | = | $10,500 | DO | = | $10,300 | DO | = | $10,400 |
| TOTAL | $91,200 | $91,200 | $91,200 | $91,800 | $91,800 | $91,800 | $90,800 | $90,800 | $90,800 |
Problem: The solicitation specifies award on a group basis. Assume the Buy American statute applies and the acquisition cannot be set aside for small business concerns. All offerors are large businesses.
Analysis: (see 25.503(c))
STEP 1: Determine which of the offers are domestic (see 25.503(c)(1)):
| Domestic [percent] | Determination | |
|---|---|---|
| A | $50,000 (Offer A1) + $10,500 (Offer A4) = $60,500$60,500/$91,200 (Offer A Total) = 66.3% | Domestic |
| B | $10,300 (Offer B4) /$91,800 (Offer B Total) $ = 11.2% | Foreign |
| C | $10,400 (Offer C4) /$90,800 (Offer C Total) = 11.5% | Foreign |
STEP 2: Determine whether foreign offers are eligible or noneligible offers (see 25.503(c)(2)):
| Domestic + Eligible [percent] | Determination | |
|---|---|---|
| A | N/A (Both Domestic) | Domestic |
| B | $50,500 (Offer B1) + $21,000 (Offer B3) + $10,300 (Offer B4)= $81,800.$81,800 /$91,800 (Offer B Total) = 89.1% | Eligible |
| C | $10,200 (Offer C2) + $10,400 (Offer C4) = $20,600.$20,600/$90,800 (Offer C Total) = 22.7% | Noneligible |
STEP 3: Determine whether to apply an evaluation factor (see 25.503(c)(3)). The low offer (Offer C) is a foreign offer. There is no eligible offer lower than the domestic offer. Therefore, apply the factor to the low offer. Addition of the 20 percent factor (use 30 percent if Offer A is a small business) to Offer C yields an evaluated price of $108,960 ($90,800 + 20 percent). Award on Offer A (see 25.502(c)(4)(ii)). Note that, if Offer A were greater than Offer B, an evaluation factor would not be applied, and award would be on Offer C (see 25.502(c)(3)).
(c) Example 3.
| OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS | OFFERS |
|---|---|---|---|---|---|---|---|---|---|
| Item | A | A | A | B | B | B | C | C | C |
| 1 | DO | = | $17,800 | FO (>55%) | = | $16,000 | FO (>55%) | = | $11,200 |
| 2 | FO (>55%) | = | $9,000 | FO (>55%) | = | $8,500 | DO | = | $10,200 |
| 3 | FO (>55%) | = | $11,200 | FO (>55%) | = | $12,000 | FO (>55%) | = | $11,000 |
| 4 | DO | = | $10,000 | DO | = | $9,000 | FO (>55%) | = | $6,400 |
| Total | $48,000 | $48,000 | $48,000 | $45,500 | $45,500 | $45,500 | $38,800. | $38,800. | $38,800. |
Key:
DO = Domestic end product (complies with the required domestic content).
FO > 55% = Foreign end product with domestic content exceeding 55%.
FO < 55% = Foreign end product with domestic content of 55% or less.
Problem: The solicitation specifies award on a group basis. Assume only the Buy American statute applies ( i.e., no trade agreements apply) and the acquisition cannot be set aside for small business concerns. All offerors are large businesses.
Analysis: (see 25.503(d))
STEP 1: Determine which of the offers are domestic (see 25.503(d)(1)).
| Domestic [percent] | Determination | |
|---|---|---|
| A | $17,800 (Offer A1) + $10,000 (Offer A4) = $27,800$27,800/$48,000 (Offer A Total) = 58% | Domestic |
| B | $9,000 (Offer B4)/$45,500 (Offer B Total) = 19.8% | Foreign |
| C | $10,200 (Offer C2)/$38,800 (Offer C Total) = 26.3% | Foreign |
STEP 2: Determine which offer, domestic or foreign, is the low offer. If the low offer is a foreign offer, apply the evaluation factor (see 25.503(d)(2)). The low offer (Offer C) is a foreign offer. Therefore, apply the factor to the low offer. Addition of the 20 percent factor (use 30 percent if Offer A is a small business) to Offer C yields an evaluated price of $46,560 ($38,800 + 20 percent). Offer C remains the low offer.
STEP 3: Determine if there is a foreign offer that could be treated as a domestic offer (see 25.106(b)(2) and 25.503(d)(2)).
| Amount of domestic content (percent) | Determination | |
|---|---|---|
| A | N/A | N/A |
| B | $9,000 (Offer B4)/$45,500 (Offer B Total) $ = 19.8% is domesticAND$16,000 (Offer B1) + $8,500 (Offer B2) + $12,000 (Offer B3) = $36,500$36,500/$45,500 (Offer B Total) = 80.2% can be treated as domestic19.8% + 80.2% = 100% is domestic or can be treated as domestic | Can be treated as domestic. |
| C | $10,200 (Offer C2)/$38,800 (Offer C Total) = 26.3% is domestic | Noneligible |
STEP 4: If there is a foreign offer that could be treated as a domestic offer, compare the evaluated price of the low offer to the price of the offer treated as domestic ( see 25.503(d)(3)). Offer B can be treated as a domestic offer ($45,500). The evaluated price of the low offer (Offer C) is $46,560. Award on Offer B.
Federal Register history
Sections cited
- FAR 25.503 Group offers
- FAR 25.502(c)(4)(ii) Application
- FAR 25.106(b)(2) Determining reasonableness of cost
Quick answers
What is FAR 25.504-4?
FAR 25.504-4 is a subsection of the Federal Acquisition Regulation, titled "Group award basis".
When was FAR 25.504-4 last changed?
The most recent final rule on record is "Federal Acquisition Regulation: Amendments to the FAR Buy American Act Requirements" (87 FR 12780), published Mar 7, 2022 and effective Oct 25, 2022.
Are changes to FAR 25.504-4 proposed?
No proposed rule from the last 3 years is waiting on a final rule.
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