FAR 25.504—Evaluation examples.
Plain-English Summary
FAR 25.504 provides illustrative examples for how contracting officers apply the evaluation procedures in FAR 25.502 and 25.503 when comparing offers that involve domestic preference rules and trade agreements. It does not create new substantive requirements; instead, it shows how to calculate and apply the evaluation factor, how to treat offers after unacceptable proposals have already been removed for reasons unrelated to price or trade agreements, and how agency regulations may adjust the evaluation factor. In practice, this section helps acquisition personnel understand how to evaluate competing offers consistently when domestic preference statutes, trade agreement coverage, and price adjustments interact. The examples are meant to make the mechanics of the evaluation process easier to apply in real procurements, especially where the contracting officer must determine which offer is most advantageous after applying the required evaluation procedures. The section is significant because small differences in evaluation methodology can change award outcomes, so the examples serve as a practical guide for compliant source selection under the Buy American and trade agreements framework.
Key Rules
Examples only, not new rules
This section is illustrative. It explains how to apply the procedures in FAR 25.502 and 25.503, but it does not itself establish separate evaluation standards or award rules.
Assumes unacceptable offers removed
The examples assume the contracting officer has already eliminated offers that are unacceptable for reasons other than price or a trade agreement issue. Only offers still eligible for price evaluation are part of the example calculations.
Applies evaluation procedures
The examples show how to use the evaluation procedures from the preceding sections when comparing offers affected by domestic preference or trade agreement considerations. The focus is on the mechanics of evaluation, not on initial responsiveness or technical acceptability.
Evaluation factor may vary
The evaluation factor used in the examples is not fixed by this section. Agency regulations may change the factor, so contracting officers must follow any agency-specific direction when applying the examples.
Price comparison remains central
The practical purpose of the examples is to show how evaluated prices are compared after the required adjustments are made. The contracting officer uses the adjusted comparison to determine the offer that should be selected under the applicable rules.
Responsibilities
Contracting Officer
Apply the example methodologies in a way that is consistent with FAR 25.502 and 25.503, after removing offers that are otherwise unacceptable. Use the applicable evaluation factor, including any agency-specific factor, and document the evaluation approach used in the procurement.
Agency
Issue any regulations or policy guidance that change the evaluation factor or otherwise affect how the examples are applied. Ensure acquisition personnel understand the agency’s required evaluation method.
Offerors
Submit offers that can survive the initial acceptability review and understand that price evaluation may be adjusted under domestic preference or trade agreement rules. Offerors should account for any evaluation factor or price adjustment that may affect competitiveness.
Practical Implications
This section is mainly a training and application aid: it helps contracting officers translate the rules in FAR 25.502 and 25.503 into actual price comparisons.
A common pitfall is using the examples without first removing offers that are unacceptable for non-price reasons; the section assumes that step is already complete.
Another risk is applying the wrong evaluation factor or ignoring agency-specific changes to that factor.
Contracting officers should treat the examples as guidance for calculation, not as a substitute for the underlying regulatory text or agency policy.
Offerors should recognize that the apparent low price may not win if evaluation adjustments under trade agreement or domestic preference rules change the ranking.
Official Regulatory Text
The following examples illustrate the application of the evaluation procedures in 25.502 and 25.503 . The examples assume that the contracting officer has eliminated all offers that are unacceptable for reasons other than price or a trade agreement (see 25.502 (a)(1)). The evaluation factor may change as provided in agency regulations.