PRICE ANALYSIS ACCOUNTING FOR DIFFERENCES Your agency is contracting for training services to present a course entitled Total Quality for Managers. Offerors are required to submit firm fixed-prices for 40 offerings of the 5-day course, at various locations. Prices must include instructor compensation, travel, and lodging required to present the offerings. Offerings will be presented as outlined below: Location Offerings Pittsburgh, PA 6 Little Rock, AR 5 Dayton, OH 7 Washington, D.C. 11 Detroit, MI 4 New York, NY 5 Los Angeles, CA 2 40 Each offer must include a management plan that demonstrates the location and availability of at least 10 qualified instructors. Each instructor must have a masters degree in engineering, 10 years of successful quality assurance related experience, and four years successful teaching experience. Award criteria state in part: Award will be made to the technically acceptable offeror with the lowest aggregate total price. Four offers were received. The following table summarizes the results of the initial technical evaluation: Criteria Los Angeles Quality Washington Independents Washington Central Dayton/DC Associates Number of Instructors 11 10 10 10 Engineering Education All have masters degrees 8 with masters degrees 2 with Ph.D. 2 with bachelors* 8 with masters degrees 10 with masters degrees QA Experience All have 10 yrs Average 15 yrs All have 10 yrs Average 14 yrs All have 10 yrs* Average 15 yrs All have 10 yrs Average 16 yrs Teaching Experience All at least 4 yrs Average 6 yrs All at least 4 yrs Average 7 yrs All at least 4 yrs* Average 6 yrs All at least 4 yrs Average 5 yrs Location & Availability All in LA Headquarters All permanent employees At least 1 within 15 miles of each training location Consultants currently under contract All in DC Headquarters All permanent employees 5 in Dayton 5 in DC Consultants currently under contract * The two instructors with bachelors degrees both have over 20 years of excellent quality assurance experience including extensive consulting. One has 7 years teaching experience, the other 6 years. The following table summarizes the proposed prices for all offerings at each location: Offerings Government Estimate Los Angeles Quality Washington Independents Washington Central Dayton/DC Associates Pittsburgh, PA 6 $28,668 $30,468 $20,550 $20,868 $28,782 Little Rock, AR 5 $23,970 $23,970 $17,125 $17,470 $22,565 Dayton, OH 7 $33,404 $35,504 $23,975 $24,304 $24,283 Washington, DC 11 $41,250 $52,382 $41,250 $37,675 $38,159 Detroit, MI 4 $19,744 $20,544 $13,700 $14,544 $19,420 New York, NY 5 $25,660 $25,660 $18,750 $19,160 $24,255 Los Angeles, CA 2 $9,440 $7,500 $7,500 $6,840 $8,878 Total Proposed 40 $182,136 $196,028 $142,850 $140,861 $166,342

QUESTIONS: 1. If you were to award without negotiations, given the award criteria and the information provided, which offeror would you select for award? Why?

2. The Government estimate was developed assuming that the work would be performed by a contractor located in the Washington, D.C. area, with instructors traveling from Washington to the offering sites. Washington Central proposes to operate in that manner yet the firms proposed price is $41,275 less than the Government estimate. What factors do you think affect this difference?

3. The proposal of Washington Independents is $39,286 less than the Government estimate. What factors do you think affect this difference?

4. Los Angeles Quality has the highest proposed price. What factors do you think affect this difference?