Subpart 15.3 - Source Selection

Parent topic: Part 15 - Contracting by Negotiation

15.300 Scope of subpart.

This subpart prescribes policies and procedures for selection of a source or sources in competitive

negotiated acquisitions.

15.301 [Reserved]

15.302 Source selection objective.

The objective of source selection is to select the proposal that represents the best value.

15.303 Responsibilities.

(a) Agency heads are responsible for source selection. The contracting officer is designated as the

source selection authority, unless the agency head appoints another individual for a particular

acquisition or group of acquisitions.

(b) The source selection authority shall-

(1) Establish an evaluation team, tailored for the particular acquisition, that includes appropriate

contracting, legal, logistics, technical, and other expertise to ensure a comprehensive evaluation of

offers;

(2) Approve the source selection strategy or acquisition plan, if applicable, before solicitation

release;

(3) Ensure consistency among the solicitation requirements, notices to offerors, proposal

preparation instructions, evaluation factors and subfactors, solicitation provisions or contract

clauses, and data requirements;

(4) Ensure that proposals are evaluated based solely on the factors and subfactors contained in the

solicitation (10 U.S.C. 3303(c) and 41 U.S.C.3703(c));

(5) Consider the recommendations of advisory boards or panels (if any); and

(6) Select the source or sources whose proposal is the best value to the Government (10 U.S.C.

3303(c) and 41 U.S.C.3703(c)).

(c) The contracting officer shall-

(1) After release of a solicitation, serve as the focal point for inquiries from actual or prospective
offerors;

(2) After receipt of proposals, control exchanges with offerors in accordance with 15.306; and

(3) Award the contract(s).

15.304 Evaluation factors and significant subfactors.

(a) The award decision is based on evaluation factors and significant subfactors that are tailored to

the acquisition.

(b) Evaluation factors and significant subfactors must-

(1) Represent the key areas of importance and emphasis to be considered in the source selection

decision; and

(2) Support meaningful comparison and discrimination between and among competing proposals.

(c) The evaluation factors and significant subfactors that apply to an acquisition and their relative

importance, are within the broad discretion of agency acquisition officials, subject to the following

requirements:

(1)

(i) Price or cost to the Government shall be evaluated in every source selection (10 U.S.C.

3206(c)(1)(B) and 41 U.S.C.3306(c)(1)(B)(also see part 36 for architect-engineer contracts), subject

to the exception listed in paragraph (c)(1)(ii)(A) of this section for use by DoD, NASA, and the Coast

Guard.

(ii) In accordance with 10 U.S.C. 3206(c), for DoD, NASA, and the Coast Guard—

(A) The contracting officer may choose not to include price or cost as an evaluation factor for award

when a solicitation—

(1) Has an estimated value above the simplified acquisition threshold;

(2) Will result in multiple-award contracts (see subpart 16.5) that are for the same or similar

services; and

(3) States that the Government intends to make an award to each and all qualifying offerors (see

2.101).

(B) If the contracting officer chooses not to include price or cost as an evaluation factor for the

contract award, in accordance with paragraph (c)(1)(ii)(A) of this section, the contracting officer

shall consider price or cost as one of the factors in the selection decision for each order placed

under the contract.

(C) The exception in paragraph (c)(1)(ii)(A) of this section shall not apply to solicitations for multipleaward contracts that provide for sole source orders pursuant to section 8(a) of the Small Business

Act (15 U.S.C. 637(a)).
(2) The quality of the product or service shall be addressed in every source selection through

consideration of one or more non-cost evaluation factors such as past performance, compliance with

solicitation requirements, technical excellence, management capability, personnel qualifications, and

prior experience (10 U.S.C. 3206(c)(1)(A) and 41 U.S.C. 3306(c)(1)(A)); and

(3)

(i) Past performance, except as set forth in paragraph (c)(3)(iii) of this section, shall be evaluated in

all source selections for negotiated competitive acquisitions expected to exceed the simplified

acquisition threshold.

(ii) For solicitations that are not set aside for small business concerns, involving consolidation or

bundling, that offer a significant opportunity for subcontracting, the contracting officer shall include

a factor to evaluate past performance indicating the extent to which the offeror attained applicable

goals for small business participation under contracts that required subcontracting plans (15

U.S.C.637(d)(4)(G)(ii)).

(iii) Past performance need not be evaluated if the contracting officer documents the reason past

performance is not an appropriate evaluation factor for the acquisition.

(4) For solicitations, that are not set aside for small business concerns, involving consolidation or

bundling, that offer a significant opportunity for subcontracting, the contracting officer shall include

proposed small business subcontracting participation in the subcontracting plan as an evaluation

factor (15 U.S.C.637(d)(4)(G)(i)).

(5) If telecommuting is not prohibited, agencies shall not unfavorably evaluate an offer that includes

telecommuting unless the contracting officer executes a written determination in accordance with

FAR 7.108(b).

(d) All factors and significant subfactors that will affect contract award and their relative importance

shall be stated clearly in the solicitation (10 U.S.C. 3206(b)(1) and 41 U.S.C. 3306(b)(1)) (see

15.204-5(c)). The rating method need not be disclosed in the solicitation. The general approach for

evaluating past performance information shall be described.

(e) Unless the exception at paragraph (c)(1)(ii)(A) of this section applies, the solicitation shall also

state, at a minimum, whether all evaluation factors other than cost or price, when combined, are—

(1) Significantly more important than cost or price;

(2) Approximately equal to cost or price; or

(3) Significantly less important than cost or price (10 U.S.C. 3206(c)(1)(C) and 41

U.S.C.3306(c)(1)(C)).

15.305 Proposal evaluation.

(a) Proposal evaluation is an assessment of the proposal and the offeror’s ability to perform the

prospective contract successfully. An agency shall evaluate competitive proposals and then assess

their relative qualities solely on the factors and subfactors specified in the solicitation. Evaluations

may be conducted using any rating method or combination of methods, including color or adjectival
ratings, numerical weights, and ordinal rankings. The relative strengths, deficiencies, significant

weaknesses, and risks supporting proposal evaluation shall be documented in the contract file.

(1) Cost or price evaluation. Normally, competition establishes price reasonableness. Therefore,

when contracting on a firm-fixed-price or fixed-price with economic price adjustment basis,

comparison of the proposed prices will usually satisfy the requirement to perform a price analysis,

and a cost analysis need not be performed. In limited situations, a cost analysis may be appropriate

to establish reasonableness of the otherwise successful offeror's price (see 15.403-1(c)(1)(i)(C)).

When contracting on a cost-reimbursement basis, evaluations shall include a cost realism analysis to

determine what the Government should realistically expect to pay for the proposed effort, the

offeror's understanding of the work, and the offeror's ability to perform the contract. Cost realism

analyses may also be used on fixed-price incentive contracts or, in exceptional cases, on other

competitive fixed-price-type contracts (see 15.404-1(d)(3)). (See 37.115 for uncompensated overtime

evaluation.) The contracting officer shall document the cost or price evaluation.

(2) Past performance evaluation.

(i) Past performance information is one indicator of an offeror’s ability to perform the contract

successfully. The currency and relevance of the information, source of the information, context of

the data, and general trends in contractor’s performance shall be considered. This comparative

assessment of past performance information is separate from the responsibility determination

required under subpart 9.1.

(ii) The solicitation shall describe the approach for evaluating past performance, including

evaluating offerors with no relevant performance history, and shall provide offerors an opportunity

to identify past or current contracts (including Federal, State, and local government and private) for

efforts similar to the Government requirement. The solicitation shall also authorize offerors to

provide information on problems encountered on the identified contracts and the offeror’s corrective

actions. The Government shall consider this information, as well as information obtained from any

other sources, when evaluating the offeror’s past performance. The source selection authority shall

determine the relevance of similar past performance information.

(iii) The evaluation should take into account past performance information regarding predecessor

companies, key personnel who have relevant experience, or subcontractors that will perform major

or critical aspects of the requirement when such information is relevant to the instant acquisition.

(iv) In the case of an offeror without a record of relevant past performance or for whom information

on past performance is not available, the offeror may not be evaluated favorably or unfavorably on

past performance.

(v) The evaluation should include the past performance of offerors in complying with subcontracting

plan goals for small disadvantaged business (SDB) concerns (see subpart 19.7).

(vi) For offerors that are joint ventures, the evaluation shall take into account past performance of

the joint venture. If the joint venture does not demonstrate past performance for award, the

contracting officer shall consider the past performance of each party to the joint venture.

(3) Technical evaluation. When tradeoffs are performed (see 15.101-1), the source selection records

shall include-

(i) An assessment of each offeror’s ability to accomplish the technical requirements; and
(ii) A summary, matrix, or quantitative ranking, along with appropriate supporting narrative, of each

technical proposal using the evaluation factors.

(4) Cost information. Cost information may be provided to members of the technical evaluation team

in accordance with agency procedures.

(5) Small business subcontracting evaluation. Solicitations must be structured to give offers from

small business concerns the highest rating for the evaluation factors in 15.304(c)(3)(ii) and (c)(4).

(b) The source selection authority may reject all proposals received in response to a solicitation, if

doing so is in the best interest of the Government.

(c) For restrictions on the use of support contractor personnel in proposal evaluation, see 37.203(d).

15.306 Exchanges with offerors after receipt of proposals.

(a) Clarifications and award without discussions.

(1) Clarifications are limited exchanges, between the Government and offerors, that may occur when

award without discussions is contemplated.

(2) If award will be made without conducting discussions, offerors may be given the opportunity to

clarify certain aspects of proposals (e.g., the relevance of an offeror’s past performance information

and adverse past performance information to which the offeror has not previously had an

opportunity to respond) or to resolve minor or clerical errors.

(3) Award may be made without discussions if the solicitation states that the Government intends to

evaluate proposals and make award without discussions. If the solicitation contains such a notice

and the Government determines it is necessary to conduct discussions, the rationale for doing so

shall be documented in the contract file (see the provision at 52.215-1) (10 U.S.C. 3303(a)(2) and 41

U.S.C. 3703(a)(2)).

(b) Communications with offerors before establishment of the competitive range. Communications

are exchanges, between the Government and offerors, after receipt of proposals, leading to

establishment of the competitive range. If a competitive range is to be established, these

communications-

(1) Shall be limited to the offerors described in paragraphs (b)(1)(i) and (b)(1)(ii) of this section and-

(i) Shall be held with offerors whose past performance information is the determining factor

preventing them from being placed within the competitive range. Such communications shall

address adverse past performance information to which an offeror has not had a prior opportunity to

respond; and

(ii) May only be held with those offerors (other than offerors under paragraph (b)(1)(i) of this

section) whose exclusion from, or inclusion in, the competitive range is uncertain;

(2) May be conducted to enhance Government understanding of proposals; allow reasonable

interpretation of the proposal; or facilitate the Government’s evaluation process. Such

communications shall not be used to cure proposal deficiencies or material omissions, materially
alter the technical or cost elements of the proposal, and/or otherwise revise the proposal. Such

communications may be considered in rating proposals for the purpose of establishing the

competitive range;

(3) Are for the purpose of addressing issues that must be explored to determine whether a proposal

should be placed in the competitive range. Such communications shall not provide an opportunity for

the offeror to revise its proposal, but may address-

(i) Ambiguities in the proposal or other concerns (e.g., perceived deficiencies, weaknesses, errors,

omissions, or mistakes (see 14.407)); and

(ii) Information relating to relevant past performance; and

(4) Shall address adverse past performance information to which the offeror has not previously had

an opportunity to comment.

(c) Competitive range.

(1) Agencies shall evaluate all proposals in accordance with 15.305(a), and, if discussions are to be

conducted, establish the competitive range. Based on the ratings of each proposal against all

evaluation criteria, the contracting officer shall establish a competitive range comprised of all of the

most highly rated proposals, unless the range is further reduced for purposes of efficiency pursuant

to paragraph (c)(2) of this section.

(2) After evaluating all proposals in accordance with 15.305(a) and paragraph (c)(1) of this section,

the contracting officer may determine that the number of most highly rated proposals that might

otherwise be included in the competitive range exceeds the number at which an efficient

competition can be conducted. Provided the solicitation notifies offerors that the competitive range

can be limited for purposes of efficiency (see 52.215-1(f)(4)), the contracting officer may limit the

number of proposals in the competitive range to the greatest number that will permit an efficient

competition among the most highly rated proposals (10 U.S.C. 3303 and 41 U.S.C.3703).

(3) If the contracting officer, after complying with paragraph (d)(3) of this section, decides that an

offeror’s proposal should no longer be included in the competitive range, the proposal shall be

eliminated from consideration for award. Written notice of this decision shall be provided to

unsuccessful offerors in accordance with 15.503.

(4) Offerors excluded or otherwise eliminated from the competitive range may request a debriefing

(see 15.505 and 15.506).

(d) Exchanges with offerors after establishment of the competitive range. Negotiations are

exchanges, in either a competitive or sole source environment, between the Government and

offerors, that are undertaken with the intent of allowing the offeror to revise its proposal. These

negotiations may include bargaining. Bargaining includes persuasion, alteration of assumptions and

positions, give-and-take, and may apply to price, schedule, technical requirements, type of contract,

or other terms of a proposed contract. When negotiations are conducted in a competitive acquisition,

they take place after establishment of the competitive range and are called discussions.

(1) Discussions are tailored to each offeror’s proposal, and must be conducted by the contracting

officer with each offeror within the competitive range.

(2) The primary objective of discussions is to maximize the Government’s ability to obtain best value,
based on the requirement and the evaluation factors set forth in the solicitation.

(3) At a minimum, the contracting officer must, subject to paragraphs (d)(5) and (e) of this section

and 15.307(a), indicate to, or discuss with, each offeror still being considered for award,

deficiencies, significant weaknesses, and adverse past performance information to which the offeror

has not yet had an opportunity to respond. The contracting officer also is encouraged to discuss

other aspects of the offeror’s proposal that could, in the opinion of the contracting officer, be altered

or explained to enhance materially the proposal’s potential for award. However, the contracting

officer is not required to discuss every area where the proposal could be improved. The scope and

extent of discussions are a matter of contracting officer judgment.

(4) In discussing other aspects of the proposal, the Government may, in situations where the

solicitation stated that evaluation credit would be given for technical solutions exceeding any

mandatory minimums, negotiate with offerors for increased performance beyond any mandatory

minimums, and the Government may suggest to offerors that have exceeded any mandatory

minimums (in ways that are not integral to the design), that their proposals would be more

competitive if the excesses were removed and the offered price decreased.

(5) If, after discussions have begun, an offeror originally in the competitive range is no longer

considered to be among the most highly rated offerors being considered for award, that offeror may

be eliminated from the competitive range whether or not all material aspects of the proposal have

been discussed, or whether or not the offeror has been afforded an opportunity to submit a proposal

revision (see 15.307(a) and 15.503(a)(1)).

(e) Limits on exchanges. Government personnel involved in the acquisition shall not engage in

conduct that-

(1) Favors one offeror over another;

(2) Reveals an offeror's technical solution, including—

(i)Unique technology;

(ii)Innovative and unique uses of commercial products or commercial services; or

(iii)Any information that would compromise an offeror's intellectual property to another offeror;

(3) Reveals an offeror’s price without that offeror’s permission. However, the contracting officer may

inform an offeror that its price is considered by the Government to be too high, or too low, and

reveal the results of the analysis supporting that conclusion. It is also permissible, at the

Government’s discretion, to indicate to all offerors the cost or price that the Government’s price

analysis, market research, and other reviews have identified as reasonable (41 U.S.C.2102 and

2107);

(4) Reveals the names of individuals providing reference information about an offeror’s past

performance; or

(5) Knowingly furnishes source selection information in violation of 3.104 and 41 U.S.C.2102 and

2107).
15.307 Proposal revisions.

(a) If an offeror’s proposal is eliminated or otherwise removed from the competitive range, no

further revisions to that offeror’s proposal shall be accepted or considered.

(b) The contracting officer may request or allow proposal revisions to clarify and document

understandings reached during negotiations. At the conclusion of discussions, each offeror still in

the competitive range shall be given an opportunity to submit a final proposal revision. The

contracting officer is required to establish a common cut-off date only for receipt of final proposal

revisions. Requests for final proposal revisions shall advise offerors that the final proposal revisions

shall be in writing and that the Government intends to make award without obtaining further

revisions.

15.308 Source selection decision.

The source selection authority’s (SSA) decision shall be based on a comparative assessment of

proposals against all source selection criteria in the solicitation. While the SSA may use reports and

analyses prepared by others, the source selection decision shall represent the SSA’s independent

judgment. The source selection decision shall be documented, and the documentation shall include

the rationale for any business judgments and tradeoffs made or relied on by the SSA, including

benefits associated with additional costs. Although the rationale for the selection decision must be

documented, that documentation need not quantify the tradeoffs that led to the decision.