Glossary
Best and final offer (BAFO)
A best and final offer (BAFO) is a formal request from the agency to the vendors remaining in competition to submit a final revision of their proposals. It follows discussions or clarifications and precedes the award decision. Once BAFOs are received, the agency evaluates and awards; there is normally no further negotiation.
BAFOs appear in RFPs and ITNs, never in sealed bidding, where the whole point is that the first price is the only price.
The short version
- A BAFO request means you are still in it. Firms outside the competitive range are not asked.
- It is a chance to revise more than price. Scope, staffing, transition plan and terms are usually all in play.
- The request states what may be revised. Changing something outside that scope can make your offer nonconforming.
- There is normally one BAFO round. Treat it as final, because it is.
Why it matters to a bidder
The BAFO is the highest-leverage document in a negotiated procurement and the one most often handled carelessly:
- Read what the agency asked you to fix. A BAFO request frequently identifies weaknesses. Answering them directly is worth more than a price cut.
- Know how cost is scored before you discount. If cost is 20 percent of the score and awarded by lowest-price-divided-by-your-price, you can calculate exactly what a 5 percent reduction buys. Often it buys almost nothing.
- Do not cut price by removing scope silently. Reducing hours or staff to hit a number, without saying so, reads as either a technical downgrade or a compliance problem.
- Keep your prior proposal intact. State clearly what changed and what did not, so evaluators do not have to guess.
A real example
A county shortlists three firms for a records digitization RFP and requests BAFOs, noting that all three had weak quality-control narratives. Two respond with price reductions of 4 and 6 percent and no narrative change. The third holds price and rewrites the quality-control section with a sampling plan and an error-rate guarantee. Cost is weighted 20 percent; technical approach 40 percent. The third firm wins at the highest price of the three.
How state and local differs from federal
Federal negotiated procurement under FAR Part 15 has an elaborate structure around this: a competitive range determination, meaningful discussions with all offerors in the range covering deficiencies and significant weaknesses, and then a final proposal revision. Offerors have well-defined rights, and failure to conduct meaningful discussions is a recognized protest ground.
State and local practice is far less prescribed. Whether the agency may hold discussions, whether it must do so with all shortlisted firms equally, whether it must disclose weaknesses, and whether it may run more than one revision round are all governed by state code and local policy, and many codes say little. Florida's ITN is the most structured version, expressly contemplating negotiation and revised replies. Elsewhere the practical rule is: read the solicitation's negotiation clause, and assume any procedural right not stated does not exist.
Common questions
Does a BAFO request mean I am winning?
It means you are in the competitive range. It says nothing about your rank within it.
Can I raise my price in a BAFO?
Usually yes, though it is rare. If discussions expanded the scope, a price increase can be the correct response.
Will there be a second BAFO?
Normally no. Some agencies run multiple rounds in an ITN, but assume one unless told otherwise.
Do I have to submit a BAFO?
No, and if you cannot improve your offer you may simply confirm your existing proposal as final. Say so explicitly rather than staying silent.