What is Competitive Range Determination?

Your First Hurdle to Winning Government Work, Explained

Hello Future Contractors 👋

Today, we’re digging deep into a concept every new contractor needs to understand: competitive range determination. If you’re starting out—maybe a small business owner, a vet fresh off active duty, or just testing the waters—this is one of the first hurdles you’ve got to climb in government contracting.

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So, what’s competitive range determination? Picture this: the government posts a solicitation on sam.gov—their central hub for “we need this done” notices.

We will use this scenario to explain the process: Let’s say it’s a $5 million job to set up new computers for a VA hospital in Texas.

Companies of all sizes will send in proposals. The agency then receives many bids of different types and varying quality. Competitive range determination is how the contracting teams narrow it down to a shortlist—the “competitive range”—of contractors who’ve got a real shot at winning.

The rules for the process come from FAR 15.306(c). Simply put, the contracting officer looks at every bid and decides who stays and who goes. They’re checking four main things:

• Price: Is your number reasonable, or are you way out of line?

• Technical Skills: Can you do the job, or is it just fluff?

• Past Performance: Have you done this before, and did it go well?

• Solicitation Match: Did you give them what they asked for and match the exact requirements listed?

If your bid’s too high—like asking $10 million for that $5 million VA job—or you can’t prove you’ve got the skills, you’re out.

Important — the competitive range isn’t a fixed list. It might be one standout bid or ten, depending on the work and who submitted a bid. For that VA computer job, maybe five make it—three primes with subs and two small businesses going solo, for example. The idea is to focus on the ones who can do the job by the requirements.

Why It Matters to You

If you’re new, this is your first big hurdle — making a bid that will take you to the shortlist. For the government, it’s about ensuring taxpayer money is adequately used. If you want an example of how bad things can get, check out this GAO.

The process starts right after you send your proposal, during the agency’s review phase. For that VA job, we used as an example, say bids were due January 15, 2025 (it’s February 21 now, so they’re wrapping up). The agency’s under a timeline—usually 30 to 60 days. If you’re teamed with a prime, your part—like setting up the software—better hold up because it’s their whole bid on the line. You’ll hear back fast, usually within a few weeks, about whether you made it or not.

How the Contracting Team Picks the Competitive Range

What’s the contracting team doing behind closed doors to pick that range? They’ve got a process, and it’s designed to stay fair and select winners. Here’s how it goes, step by step:

1. Gather the Crew: The contracting officer doesn’t do this alone. They pull together a team—usually a technical expert (like an IT pro for that VA job), a price analyst, and sometimes a tiny business rep if it’s a set-aside deal. This group’s job is to dig into every bid.

2. Score the Basics: They start with a checklist from the solicitation. The VA computer job might be: “Can they install 200 machines in 60 days? Do they meet HIPAA rules? Is the price under $6 million?” Every bid gets a quick yes-or-no pass on must-haves.

3. Rate the Details: For the bids that pass, they dive deeper. They’ll score each one—sometimes with points (say, 1-100), sometimes just high/medium/low—on those big four: price, skills, past performance, and fit. For example, your $5.2 million bid with a clear plan and a hospital reference might get a “high,” while a $7 million bid without details receives a “low.”

4. Set the Bar: The contracting officer looks at the scores and picks a cutoff—called the “natural breakpoint.” Say they’ve got 12 bids for the VA job. Five scores are “high” (all under $6 million, solid plans), four are “medium” (pricey or thin on details), and three are “low” (way off-base). The “high” group might be the range—unless the mediums are close enough to give reason for further analysis. It’s not a fixed number; it’s about the quality of the bids.

5. Double-check: Everything is documented. For every cut bid, they write why—like “price exceeds market by 40%” or “no proof of IT experience.” This covers liability if someone protests (more on that in a later article). For our VA example, if your bid’s $5.5 million with a good plan, you’re in; if it’s $9 million with no history, they’ll note “unrealistic cost” and move on.

6. Notify the Players: They send letters once the range is set—say, five bids. You might get a chance to clarify or negotiate if you're in. If you’re out, you’ll get a polite “thanks, but no thanks” with a debrief if you ask for it.

This isn’t random—they follow FAR rules to keep it fair and pick contractors who can deliver.

How Do You Get In? Step-by-Step with Examples

Here’s how you make the cut, with some real examples:

1. Price It Right: The government’s not into the business of paying crazy amounts for historical work. For that VA job, if past contracts (see usaspending.gov) show $4-6 million for similar work, your $8 million bid better have a justifiable reason for why the cost went up so much. Use FDPS to check old contracts by NAICS code—like 541519 for IT services.

2. Show Your Skills: They want proof you can handle it. Say you’re a small business bidding to install those VA computers. Your proposal needs details—how many machines, what software, how long it’ll take—and exactly how every part of the process will match the requirements.

3. Use Your History: Past performance is your baseline. Put it in your capability statement. For example, if you’ve set up computers for a private hospital—say, a $150k job- get a reference from that client. If you have no history, you need to make the case for why you are the best choice for the job. Without work history, you will be fighting an uphill battle. This is again where teaming comes in.

4. Stick to the Ask: Read the solicitation—every word. For the VA job, you will no longer be considered if they need systems that meet HIPAA rules, and you will skip that. This can also be your advantage. If you can submit a bid that meets all the requirements, even a contractor with a work performance history will get cut over you simply because you followed the requirements and they didn’t.

If new, then team with a prime who knows what they are doing. They’ve won bids, lost bids, and learned what sticks. If going alone, research is your lifeline. Pull the solicitation from sam.gov, check NAICS codes, and study winners on usaspending.gov.

Research, research, and research some more.

Recap—Keep this in mind

Competitive range determination is the first gate in the government contracting world. For small businesses or set-aside, it’s your chance to step up. Nail it with a good prime, and you’re on the shortlist. Mess up—or pick a weak partner—and you’re watching from the sidelines. Relationships matter here—20-30% of your opportunity cost.

I’ve said it before: Pick what you sell, stick to one or two NAICS codes (541519, maybe 541512), research it hard (sam.gov, FDPS, agency sites), and team up with the right businesses. The first real win is always the hardest.

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Got questions? Drop them below. If you have suggestions on future contract articles, message me.

Happy hunting!