Best and Final Offer (BAFO)

A Best and Final Offer (BAFO) is the final version of a competitive proposal submitted by an offeror after the government has conducted negotiations or discussions and provided an opportunity to revise the initial proposal, representing the offeror's last chance to improve their competitive position before final source selection.

What is a Best and Final Offer?

BAFO is an older term that has been largely replaced in the FAR by "Final Proposal Revision" (FPR), but it remains widely used colloquially in the government contracting community. When a contracting officer establishes a competitive range and conducts discussions with offerors, the FAR requires that offerors be given the opportunity to revise their proposals before the source selection decision. The request for final revisions marks the end of the discussion period and signals to offerors that this is their last opportunity to sharpen their technical approach, adjust their pricing, and address any government-identified weaknesses before the final evaluation. BAFO submissions carry significant risk because they are irrevocable once submitted, offerors cannot reconsider their final prices or technical commitments after submission. The period between discussions and BAFO submission is a critical decision window during which contractors must assess what pricing and technical changes are worth making. Reducing price too aggressively in a BAFO can undermine profitability if the contract is won; not reducing enough can result in a loss on price to a competitor who was willing to sharpen their position.

Why BAFO matters for government contractors

The BAFO submission is the final competitive lever available to an offeror in a negotiated procurement. Contractors must develop a principled BAFO strategy, analyzing discussion feedback, assessing competitor pricing signals, and determining where technical improvements can sharpen the proposal's evaluation score, to maximize the probability of win at an acceptable margin.

Example

A government IT services firm receives discussion feedback indicating that the evaluators found its proposed key personnel to be a relative weakness compared to competitors and that its price was above the government's estimated range. The firm responds with a BAFO that replaces one key personnel candidate with a more credentialed alternative and reduces its price by 6% through a refined labor mix. These BAFO adjustments improve its evaluation standing and result in contract award.

Frequently Asked Questions

Is BAFO the same as Final Proposal Revision?

Yes, functionally. "Final Proposal Revision" (FPR) is the current FAR-preferred term, while "BAFO" is the legacy term still widely used in practice. Both refer to the final proposal submitted after the conclusion of discussions in a negotiated procurement. For practical purposes, treat them as synonymous.

Can the government reopen discussions after requesting BAFOs?

Generally, no. Once the government requests final revisions and the submission period closes, the source selection proceeds based on the submissions received. Courts and GAO have held that reopening discussions post-BAFO without good reason and without extending the opportunity to all offerors can be a procurement irregularity subject to protest.

What happens to the BAFO if the solicitation is amended after submission?

If the government amends the solicitation after BAFO submission (a rare occurrence), the contracting officer typically must permit all offerors to revise their proposals again in light of the amendment. Otherwise, offerors who submitted their BAFO under different terms would be unfairly disadvantaged.

How should pricing strategy change from initial proposal to BAFO?

The initial proposal should be priced to win while remaining profitable, without pre-emptively discounting based on speculation about competitors. The BAFO is the place to make a final price sharpening decision based on discussion feedback, competitive intelligence gathered during the procurement, and the firm's assessment of what price it must meet to win.