c.  Negotiations

Comment: Several respondents commented on the requirement that the negotiated price should not exceed the offered price. One respondent asked whether a FAR deviation from FAR 15.306(d), Exchanges with offerors after establishment of the competitive range, was being processed for DFARS 215.371(c)(2)(ii), which states in part that "If the contracting officer decides to enter negotiations, the negotiated price should not exceed the offered price."

Response: FAR 1.304 provides that agency regulations may be inconsistent with the FAR as provided in FAR subpart 1.4, Deviations from the FAR. FAR 1.404(b) provides that for DoD, class deviations are controlled, processed, and approved in accordance with the DFARS. DPAP is the approval authority for class deviations or changes to the DFARS that constitute a permanent deviation from the FAR. Incorporation of a policy or procedures in the DFARS is sufficient to establish that a policy or procedure different from the FAR is applicable to DoD. DoD only processes a deviation from the FAR as a separate document when there is insufficient time to incorporate the changes in the DFARS or the incorporation in the DFARS is inappropriate for some other reason.

Comment: One respondent stated that both discussions and negotiations could reveal errors that would lead to revised proposals either lower or higher than the offered price. Additionally, the respondent expressed concern that the definition of "should" is different to each individual. Another respondent recommended striking the limitation that negotiated price should not exceed offered price from paragraph (c) of proposed DFARS 252.215-70XX.

Response: The term "should" is defined at FAR 2.101 (see response to third comment under section II.B.2.b.). If discussions or negotiations reveal errors that would lead to revised proposals, then that could constitute sufficient rationale to diverge from the norm of "should" and negotiate a higher price.

Comment: One respondent cited the 20 percent likelihood that there will be only one offer as cause for offerors to back away from making an initial offer, because if there is only one offer, then the offeror will be forced to negotiate further with their offered price as ceiling. The respondent also sees an impact on contracting officers because of the difference between the FAR and the DFARS, causing "more confusion among DoD contracting officers about the negotiation process."

Response: The rule has been revised so that negotiations only ensue when the contracting officer cannot determine that the offered price is fair and reasonable (also see response to previous section II.B.3.b.ii.).

Comment: One respondent had some technical comment with regard to entering negotiations under DFARS part 214. The respondent recommended inclusion of several references (at DFARS 214.404-1(1) and (2) and 214.408-1(b)) to FAR 14.404-1(f), which allows sealed bidding to convert to negotiated in lieu of cancellation required by FAR 14.404-1(c).

Response: The DFARS supplementation of FAR 14.404-1 has added a reference to FAR 15.404-1(f) to clarify that the DFARS procedures at DFARS 215.371 supersede the procedures at FAR 14.404-1(f).