You may have heard the term “best value” used in reference to government contracting, especially in the context of government buyers looking for best value products or services. But what exactly does best value mean, and why is it important for government contractors to understand? In this blog, we’ll explore what best value is, what government contractors should know about it, its relevance to the Multiple Award Schedule Program, and more.
In government contracting, best value refers to the determination that government buyers make regarding which contractor’s offering “provides the greatest overall benefit in response to the requirement” (FAR 2.101). To make a best value determination, government buyers consider not only price but also qualitative factors such as technical capabilities, past performance, or delivery times. Contractors who are determined to have the best value will be awarded the government contract, making this determination an important part of the federal acquisition process.
The best value continuum provides a helpful way to understand how price is weighted in a best value determination versus non-price, technical factors. On one end of the continuum, the government looks for the Lowest Price Technically Acceptable (LPTA). In this method of source selection, the contract is awarded to the offeror with the lowest price who meets or exceeds the acceptability standards established for other factors. LPTA is generally used for acquisitions where the government’s requirement is straightforward, and the risk of unsuccessful performance is low.
For more complex requirements where performance risk is greater, technical factors become more important. As the relative importance of price decreases in comparison to these technical factors, we move toward the other end of the continuum. The process of weighting technical factors more heavily is called the tradeoff process, and tradeoffs made for technical reasons should be worth the additional costs. Whether the government is using LPTA or making tradeoffs, the goal is always to secure the best value, given the nature of the requirement.
Next, we’ll take a look at how the concept of best value is relevant to the GSA’s Multiple Award Schedule (MAS) Program, the government’s premier contracting vehicle and the way that many of our clients sell to the government. MAS contractors’ pricing is evaluated at both the contract level and the order level, and best value determinations come into play more at the order level. We’ll first provide some context on MAS contract-level pricing evaluation, before discussing best value at the MAS order level.
MAS pricing is evaluated at the contract level when a contractor submits an offer for an MAS contract. At the contract level, best value is not the primary determination factor when it comes to awarding pricing.
That said, MAS pricing is evaluated differently depending on whether the offer is subject to Transactional Data Reporting or Commercial Sales Practices. For offers subject to Transactional Data Reporting, or TDR, GSA will evaluate whether a contractor’s proposed pricing is fair and reasonable by comparing it to market pricing. For example, GSA’s reviewers will compare the proposed prices to prices paid for those items on past contracts, or contract-level pricing on other MAS contracts or Government-Wide Acquisition Contracts (GWACs). Ideally, they’ll look for data on the same item, but if the product or service is unique, they’ll look at market research available for similar items.
Transactional Data Reporting is expected to be required for all MAS contractors later in Q1 FY2026, meaning that all MAS pricing evaluations would follow this process in the near future. Until GSA finalizes that change, some contractors will still be evaluated under the legacy Commercial Sales Practices system, in which the government evaluates pricing based on the contractor’s commercial discounting practices.
For MAS contracts, best value determinations become especially important at the order level, as noted in the Federal Acquisition Regulation (FAR) itself. Per FAR 8.404(d), government buyers placing orders through a GSA Schedule contract have “concluded that the order represents the best value (as defined in FAR 2.101) and results in the lowest overall cost alternative (considering price, special features, administrative costs, etc.) to meet the Government’s needs.”
Government agencies placing orders through the MAS may consider a variety of factors when determining which contractor offers the best value. For example, they may look for contractors who offer low pricing, possess technical capabilities relevant to their mission, can deliver in the required timeframe, and have meaningful past performance. Other best value factors may include special features of the supply or service, trade-in considerations, durability of the item, warranty considerations, maintenance availability, and environmental considerations.
The relative importance of price and technical factors in the best value determination depends upon the nature of the acquisition itself, as shown by the best value continuum discussed earlier. These evaluation factors and their relative importance are required to be in the opportunity’s solicitation, and contractors will want to adjust their response strategy accordingly.
For example, it can be a good idea to offer additional discounts on your awarded MAS contract pricing, if the RFP indicates that price is heavily weighted in the best value determination. Or you may want to bring in a proposal writing consultant for an opportunity that emphasizes technical capabilities and requires a lengthy technical volume.
We’ve discussed how best value is emphasized more at the MAS order level, but some anticipated legal changes may make it equally relevant at the contract level. Currently, US Code requires MAS “orders and contracts” to “result in the lowest overall cost alternative to meet the needs of the Federal Government.” However, the recently proposed Fostering Reform and Government Efficiency in Defense (FoRGED) Act would replace the “lowest overall cost alternative” language with “best value.”
This change would align with how best value determinations are already practiced by agencies at the MAS order level. It’s also intended to give GSA’s Contracting Specialists more flexibility at the contract level to make best value determinations that prioritize technical factors and encourage innovation, reflecting the FoRGED Act’s goal of simplifying government contracting and accelerating new technologies. That said, the Act has not been passed, and it remains to be seen exactly how its proposed changes would affect MAS contractors.
With the expansion of Transactional Data Reporting and the potential effects of the FoRGED Act, changes are likely coming to how contractors’ pricing is evaluated in the Multiple Award Schedule Program. Winvale’s blog is an up-to-date source of how new government legislation affects MAS contractors. And if you’re wondering how changes in the government contracting world could affect your MAS contract specifically, our consultants are here to help.