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Timestamp: 2017-11-20 15:56:55
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Matched Legal Cases: ['ART 15', 'art 15', 'art 15', 'art 19', 'art 19', 'art 15', 'art 10', 'art 10', 'art 24', 'art 24', 'art 24', 'art 24', 'art 7', 'art 7', 'art 4', 'art 7', 'art 4', 'art 36', 'art 36', 'art 11', 'art 46', 'art 11', 'art 6', 'art 6', 'art 4', 'art 4', 'art 4', 'art 15', 'art 36', 'art 36', 'art 36', 'art 9', 'art 19', 'art 9', 'art 9', 'art 9', 'art 19', 'art 19', 'art 15', 'art 31']

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Certified Federal Contracts Manager NCMA
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1 Certified Federal Contracts Manager NCMA
Federal Acquisition Regulation FAR PART 15 https://www.acquisition.gov/far/ Instructor: W. Ryan, Manager Procurement and Grants Office (PGO) Office of Policy Oversight and Evaluation SLIDE 1 CDC PGO Feb-Mar, 2010
2 Contracting by Negotiation
3 15.000 Scope of part. This part prescribes policies and procedures governing competitive and noncompetitive negotiated acquisitions. A contract awarded using other than sealed bidding procedures is a negotiated contract (see ). 15.000 Scope of part. This part prescribes policies and procedures governing competitive and noncompetitive negotiated acquisitions. A contract awarded using other than sealed bidding procedures is a negotiated contract (see ). 15.001 Definitions. As used in this part— “Deficiency” is a material failure of a proposal to meet a Government requirement or a combination of significant weaknesses in a proposal that increases the risk of unsuccessful contract performance to an unacceptable level. “Proposal modification” is a change made to a proposal before the solicitation closing date and time, or made in response to an amendment, or made to correct a mistake at any time before award. “Proposal revision” is a change to a proposal made after the solicitation closing date, at the request of or as allowed by a contracting officer, as the result of negotiations. “Weakness” means a flaw in the proposal that increases the risk of unsuccessful contract performance. A “significant weakness” in the proposal is a flaw that appreciably increases the risk of unsuccessful contract performance. 15.002 Types of negotiated acquisition. (a) Sole source acquisitions. When contracting in a sole source environment, the request for proposals (RFP) should be tailored to remove unnecessary information and requirements; e.g., evaluation criteria and voluminous proposal preparation instructions. (b) Competitive acquisitions. When contracting in a competitive environment, the procedures of this part are intended to minimize the complexity of the solicitation, the evaluation, and the source selection decision, while maintaining a process designed to foster an impartial and comprehensive evaluation of offerors’ proposals, leading to selection of the proposal representing the best value to the Government (see 2.101).
4 15.001 Definitions. As used in this part—
“Deficiency” is a material failure of a proposal to meet a Government requirement or a combination of significant weaknesses in a proposal that increases the risk of unsuccessful contract performance to an unacceptable level. “Proposal modification” is a change made to a proposal before the solicitation closing date and time, or made in response to an amendment, or made to correct a mistake at any time before award. “Proposal revision” is a change to a proposal made after the solicitation closing date, at the request of or as allowed by a contracting officer, as the result of negotiations. “Weakness” means a flaw in the proposal that increases the risk of unsuccessful contract performance. A “significant weakness” in the proposal is a flaw that appreciably increases the risk of unsuccessful contract performance. 15.001 Definitions. As used in this part— “Deficiency” is a material failure of a proposal to meet a Government requirement or a combination of significant weaknesses in a proposal that increases the risk of unsuccessful contract performance to an unacceptable level. “Proposal modification” is a change made to a proposal before the solicitation closing date and time, or made in response to an amendment, or made to correct a mistake at any time before award. “Proposal revision” is a change to a proposal made after the solicitation closing date, at the request of or as allowed by a contracting officer, as the result of negotiations. “Weakness” means a flaw in the proposal that increases the risk of unsuccessful contract performance. A “significant weakness” in the proposal is a flaw that appreciably increases the risk of unsuccessful contract performance.
5 15.002 Types of negotiated acquisition.
Sole source acquisitions. When contracting in a sole source environment, the request for proposals (RFP) should be tailored to remove unnecessary information and requirements; e.g., evaluation criteria and voluminous proposal preparation instructions. (b) Competitive acquisitions. When contracting in a competitive environment, the procedures of this part are intended to minimize the complexity of the solicitation, the evaluation, and the source selection decision, while maintaining a process designed to foster an impartial and comprehensive evaluation of offerors’ proposals, leading to selection of the proposal representing the best value to the Government (see 2.101). 15.002 Types of negotiated acquisition. (a) Sole source acquisitions. When contracting in a sole source environment, the request for proposals (RFP) should be tailored to remove unnecessary information and requirements; e.g., evaluation criteria and voluminous proposal preparation instructions. (b) Competitive acquisitions. When contracting in a competitive environment, the procedures of this part are intended to minimize the complexity of the solicitation, the evaluation, and the source selection decision, while maintaining a process designed to foster an impartial and comprehensive evaluation of offerors’ proposals, leading to selection of the proposal representing the best value to the Government (see 2.101).
6 Subpart 15.1—Source Selection Processes and Techniques
15.101 Best value continuum. An agency can obtain best value in negotiated acquisitions by using any one or a combination of source selection approaches. In different types of acquisitions, the relative importance of cost or price may vary. For example, in acquisitions where the requirement is clearly definable and the risk of unsuccessful contract performance is minimal, cost or price may play a dominant role in source selection. The less definitive the requirement, the more development work required, or the greater the performance risk, the more technical or past performance considerations may play a dominant role in source selection. Subpart 15.1—Source Selection Processes and Techniques 15.100 Scope of subpart. This subpart describes some of the acquisition processes and techniques that may be used to design competitive acquisition strategies suitable for the specific circumstances of the acquisition. 15.101 Best value continuum. An agency can obtain best value in negotiated acquisitions by using any one or a combination of source selection approaches. In different types of acquisitions, the relative importance of cost or price may vary. For example, in acquisitions where the requirement is clearly definable and the risk of unsuccessful contract performance is minimal, cost or price may play a dominant role in source selection. The less definitive the requirement, the more development work required, or the greater the performance risk, the more technical or past performance considerations may play a dominant role in source selection. Tradeoff process. (a) A tradeoff process is appropriate when it may be in the best interest of the Government to consider award to other than the lowest priced offeror or other than the highest technically rated offeror. (b) When using a tradeoff process, the following apply: (1) All evaluation factors and significant subfactors that will affect contract award and their relative importance shall be clearly stated in the solicitation; and (2) The solicitation shall state whether all evaluation factors other than cost or price, when combined, are significantly more important than, approximately equal to, or significantly less important than cost or price. (c) This process permits tradeoffs among cost or price and non-cost factors and allows the Government to accept other than the lowest priced proposal. The perceived benefits of the higher priced proposal shall merit the additional cost, and the rationale for tradeoffs must be documented in the file in accordance with Lowest price technically acceptable source selection process. (a) The lowest price technically acceptable source selection process is appropriate when best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price. (b) When using the lowest price technically acceptable process, the following apply: (1) The evaluation factors and significant subfactors that establish the requirements of acceptability shall be set forth in the solicitation. Solicitations shall specify that award will be made on the basis of the lowest evaluated price of proposals meeting or exceeding the acceptability standards for non-cost factors. If the contracting officer documents the file pursuant to (c)(3)(iii), past performance need not be an evaluation factor in lowest price technically acceptable source selections. If the contracting officer elects to consider past performance as an evaluation factor, it shall be evaluated in accordance with However, the comparative assessment in (a)(2)(i) does not apply. If the contracting officer determines that a small business’ past performance is not acceptable, the matter shall be referred to the Small Business Administration for a Certificate of Competency determination, in accordance with the procedures contained in Subpart 19.6 and 15 U.S.C. 637(b)(7)). (2) Tradeoffs are not permitted. (3) Proposals are evaluated for acceptability but not ranked using the non-cost/price factors. (4) Exchanges may occur (see ).
7 Tradeoff process. A tradeoff process is appropriate when it may be in the best interest of the Government to consider award to other than the lowest priced offeror or other than the highest technically rated offeror. “Definition and Summary: Within a funding constrained environment, engaging in the explicit trade-off between required functionality, schedule, time, project/product stability, and risk without compromising overall system objectives. – Gold Practices” Tradeoff process. (a) A tradeoff process is appropriate when it may be in the best interest of the Government to consider award to other than the lowest priced offeror or other than the highest technically rated offeror. (b) When using a tradeoff process, the following apply: (1) All evaluation factors and significant subfactors that will affect contract award and their relative importance shall be clearly stated in the solicitation; and (2) The solicitation shall state whether all evaluation factors other than cost or price, when combined, are significantly more important than, approximately equal to, or significantly less important than cost or price. (c) This process permits tradeoffs among cost or price and non-cost factors and allows the Government to accept other than the lowest priced proposal. The perceived benefits of the higher priced proposal shall merit the additional cost, and the rationale for tradeoffs must be documented in the file in accordance with
8 Bill, This information was really for software. Click the link to decide if you want to keep any of it. Slides 8,9, and 10 are adapted from their discussion of trade-offs. Some key benefits of this practice are: § More complete requirements in the early stages of a project § Fewer requirements changes during development § Enabling a shared vision throughout the life cycle § Negotiation methods preserve the rationale of decision making § Control of “Scope Creep”
9 Effective practices for requirements negotiation are: http://www
1. Get the right stakeholders 2. Establish a teamwork mentality 3. Plan team interaction 4. Use a Group Support System (GSS) 5. Establish a shared vocabulary 6. Maintain a list of requirements 7. Record requirements attributes 8. Manage by probabilities of completion rather than absolutes 9. Base decisions on more than mechanics 10. Select an operational approach coupled with risk assessment 11. Plan more than one release at a time 12. Find a workable solution 13. Provide training in the negotiation process 14. Use a trained facilitator 15. Consider requirements, architecture and marketplace simultaneously\ 16. Leverage the triple constraint (cost vs. time vs. scope)
10 15.101-1 Tradeoff process, cont.
(b) When using a tradeoff process, the following apply: (1) All evaluation factors and significant subfactors that will affect contract award and their relative importance shall be clearly stated in the solicitation; and (2) The solicitation shall state whether all evaluation factors other than cost or price, when combined, are significantly more important than, approximately equal to, or significantly less important than cost or price. (c) This process permits tradeoffs among cost or price and non-cost factors and allows the Government to accept other than the lowest priced proposal. The perceived benefits of the higher priced proposal shall merit the additional cost, and the rationale for tradeoffs must be documented in the file in accordance with Tradeoff process. (a) A tradeoff process is appropriate when it may be in the best interest of the Government to consider award to other than the lowest priced offeror or other than the highest technically rated offeror. (b) When using a tradeoff process, the following apply: (1) All evaluation factors and significant subfactors that will affect contract award and their relative importance shall be clearly stated in the solicitation; and (2) The solicitation shall state whether all evaluation factors other than cost or price, when combined, are significantly more important than, approximately equal to, or significantly less important than cost or price. (c) This process permits tradeoffs among cost or price and non-cost factors and allows the Government to accept other than the lowest priced proposal. The perceived benefits of the higher priced proposal shall merit the additional cost, and the rationale for tradeoffs must be documented in the file in accordance with
11 15.101-2 Lowest price technically acceptable source selection process.
The lowest price technically acceptable source selection process is appropriate when best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price. When using the lowest price technically acceptable process, the following apply: (1) The evaluation factors and significant subfactors that establish the requirements of acceptability shall be set forth in the solicitation. Solicitations shall specify that award will be made on the basis of the lowest evaluated price of proposals meeting or exceeding the acceptability standards for non-cost factors 2) Tradeoffs are not permitted. (3) Proposals are evaluated for acceptability but not ranked using the non-cost/price factors. (4) Exchanges may occur (see ). Lowest price technically acceptable source selection process. (a) The lowest price technically acceptable source selection process is appropriate when best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price. (b) When using the lowest price technically acceptable process, the following apply: (1) The evaluation factors and significant subfactors that establish the requirements of acceptability shall be set forth in the solicitation. Solicitations shall specify that award will be made on the basis of the lowest evaluated price of proposals meeting or exceeding the acceptability standards for non-cost factors. If the contracting officer documents the file pursuant to (c)(3)(iii), past performance need not be an evaluation factor in lowest price technically acceptable source selections. If the contracting officer elects to consider past performance as an evaluation factor, it shall be evaluated in accordance with However, the comparative assessment in (a)(2)(i) does not apply. If the contracting officer determines that a small business’ past performance is not acceptable, the matter shall be referred to the Small Business Administration for a Certificate of Competency determination, in accordance with the procedures contained in Subpart 19.6 and 15 U.S.C. 637(b)(7)). (2) Tradeoffs are not permitted. (3) Proposals are evaluated for acceptability but not ranked using the non-cost/price factors. (4) Exchanges may occur (see ).
12 15.102 Oral presentations. Oral presentations by offerors as requested by the Government may substitute for, or augment, written information. Use of oral presentations as a substitute for portions of a proposal can be effective in streamlining the source selection process. Oral presentations may occur at any time in the acquisition process, and are subject to the same restrictions as written information, regarding timing (see ) and content (see ). Oral presentations provide an opportunity for dialogue among the parties. Pre-recorded videotaped presentations that lack real-time interactive dialogue are not considered oral presentations 15.102 Oral presentations. (a) Oral presentations by offerors as requested by the Government may substitute for, or augment, written information. Use of oral presentations as a substitute for portions of a proposal can be effective in streamlining the source selection process. Oral presentations may occur at any time in the acquisition process, and are subject to the same restrictions as written information, regarding timing (see ) and content (see ). Oral presentations provide an opportunity for dialogue among the parties. Pre-recorded videotaped presentations that lack real-time interactive dialogue are not considered oral presentations for the purposes of this section, although they may be included in offeror submissions, when appropriate. (b) The solicitation may require each offeror to submit part of its proposal through oral presentations. However, representations and certifications shall be submitted as required in the FAR provisions at (d) or (b), and a signed offer sheet (including any exceptions to the Government’s terms and conditions) shall be submitted in writing. (c) Information pertaining to areas such as an offeror’s capability, past performance, work plans or approaches, staffing resources, transition plans, or sample tasks (or other types of tests) may be suitable for oral presentations. In deciding what information to obtain through an oral presentation, consider the following: (1) The Government’s ability to adequately evaluate the information; (2) The need to incorporate any information into the resultant contract; (3) The impact on the efficiency of the acquisition; and (4) The impact (including cost) on small businesses. In considering the costs of oral presentations, contracting officers should also consider alternatives to on-site oral presentations (e.g., teleconferencing, video teleconferencing).
13 15.102 Oral presentations, cont.
(b) The solicitation may require each offeror to submit part of its proposal through oral presentations. However, representations and certifications shall be submitted as required in the FAR provisions at (d) or (b), and a signed offer sheet (including any exceptions to the Government’s terms and conditions) shall be submitted in writing. (c) Information pertaining to areas such as an offeror’s capability, past performance, work plans or approaches, staffing resources, transition plans, or sample tasks (or other types of tests) may be suitable for oral presentations. (b) The solicitation may require each offeror to submit part of its proposal through oral presentations. However, representations and certifications shall be submitted as required in the FAR provisions at (d) or (b), and a signed offer sheet (including any exceptions to the Government’s terms and conditions) shall be submitted in writing. (c) Information pertaining to areas such as an offeror’s capability, past performance, work plans or approaches, staffing resources, transition plans, or sample tasks (or other types of tests) may be suitable for oral presentations. In deciding what information to obtain through an oral presentation, consider the following: (1) The Government’s ability to adequately evaluate the information; (2) The need to incorporate any information into the resultant contract; (3) The impact on the efficiency of the acquisition; and (4) The impact (including cost) on small businesses. In considering the costs of oral presentations, contracting officers should also consider alternatives to on-site oral presentations (e.g., teleconferencing, video teleconferencing).
14 15.102 Oral presentations, cont.
(d) When oral presentations are required, the solicitation shall provide offerors with sufficient information to prepare them. (e) The contracting officer shall maintain a record of oral presentations to document what the Government relied upon in making the source selection decision. (f) When an oral presentation includes information that the parties intend to include in the contract as material terms or conditions, the information shall be put in writing. Incorporation by reference of oral statements is not permitted. (g) If, during an oral presentation, the Government conducts discussions (see (d)), the Government must comply with and (d) When oral presentations are required, the solicitation shall provide offerors with sufficient information to prepare them. Accordingly, the solicitation may describe— (1) The types of information to be presented orally and the associated evaluation factors that will be used; (2) The qualifications for personnel that will be required to provide the oral presentation(s); (3) The requirements for, and any limitations and/or prohibitions on, the use of written material or other media to supplement the oral presentations; (4) The location, date, and time for the oral presentations; (5) The restrictions governing the time permitted for each oral presentation; and (6) The scope and content of exchanges that may occur between the Government’s participants and the offeror’s representatives as part of the oral presentations, including whether or not discussions (see (d)) will be permitted during oral presentations. (e) The contracting officer shall maintain a record of oral presentations to document what the Government relied upon in making the source selection decision. The method and level of detail of the record (e.g., videotaping, audio tape recording, written record, Government notes, copies of offeror briefing slides or presentation notes) shall be at the discretion of the source selection authority. A copy of the record placed in the file may be provided to the offeror. (f) When an oral presentation includes information that the parties intend to include in the contract as material terms or conditions, the information shall be put in writing. Incorporation by reference of oral statements is not permitted. (g) If, during an oral presentation, the Government conducts discussions (see (d)), the Government must comply with and
15 Subpart 15.2—Solicitation and Receipt of Proposals and Information
15.200 Scope of subpart. This subpart prescribes policies and procedures for— Exchanging information with industry prior to receipt of proposals; (b) Preparing and issuing requests for proposals (RFPs) and requests for information (RFIs); and (c) Receiving proposals and information.
16 15.201 Exchanges with industry before receipt of proposals.
Exchanges of information among all interested parties, from the earliest identification of a requirement through receipt of proposals, are encouraged. Any exchange of information must be consistent with procurement integrity requirements (see 3.104). The purpose of exchanging information is to improve the understanding of Government requirements and industry capabilities, thereby allowing potential offerors to judge whether or how they can satisfy the Government’s requirements, and enhancing the Government’s ability to obtain quality supplies and services, including construction, at reasonable prices, and increase efficiency in proposal preparation, proposal evaluation, negotiation, and contract award. 15.201 Exchanges with industry before receipt of proposals. (a) Exchanges of information among all interested parties, from the earliest identification of a requirement through receipt of proposals, are encouraged. Any exchange of information must be consistent with procurement integrity requirements (see 3.104). Interested parties include potential offerors, end users, Government acquisition and supporting personnel, and others involved in the conduct or outcome of the acquisition. (b) The purpose of exchanging information is to improve the understanding of Government requirements and industry capabilities, thereby allowing potential offerors to judge whether or how they can satisfy the Government’s requirements, and enhancing the Government’s ability to obtain quality supplies and services, including construction, at reasonable prices, and increase efficiency in proposal preparation, proposal evaluation, negotiation, and contract award. (c) Agencies are encouraged to promote early exchanges of information about future acquisitions. An early exchange of information among industry and the program manager, contracting officer, and other participants in the acquisition process can identify and resolve concerns regarding the acquisition strategy, including proposed contract type, terms and conditions, and acquisition planning schedules; the feasibility of the requirement, including performance requirements, statements of work, and data requirements; the suitability of the proposal instructions and evaluation criteria, including the approach for assessing past performance information; the availability of reference documents; and any other industry concerns or questions. Some techniques to promote early exchanges of information are— (1) Industry or small business conferences; (2) Public hearings; (3) Market research, as described in Part 10; (4) One-on-one meetings with potential offerors (any that are substantially involved with potential contract terms and conditions should include the contracting officer; also see paragraph (f) of this section regarding restrictions on disclosure of information); (5) Presolicitation notices; (6) Draft RFPs; (7) RFIs; (8) Presolicitation or preproposal conferences; and (9) Site visits.
17 15.201 Exchanges with industry before receipt of proposals, cont.
c) Agencies are encouraged to promote early exchanges of information about future acquisitions. An early exchange of information among industry and the program manager, contracting officer, and other participants in the acquisition process can identify and resolve concerns regarding: the acquisition strategy, including proposed contract type, terms and conditions, and acquisition planning schedules; the feasibility of the requirement, including performance requirements, statements of work, and data requirements; the suitability of the proposal instructions and evaluation criteria, including the approach for assessing past performance information; the availability of reference documents; and any other industry concerns or questions. (c) Agencies are encouraged to promote early exchanges of information about future acquisitions. An early exchange of information among industry and the program manager, contracting officer, and other participants in the acquisition process can identify and resolve concerns regarding the acquisition strategy, including proposed contract type, terms and conditions, and acquisition planning schedules; the feasibility of the requirement, including performance requirements, statements of work, and data requirements; the suitability of the proposal instructions and evaluation criteria, including the approach for assessing past performance information; the availability of reference documents; and any other industry concerns or questions. Some techniques to promote early exchanges of information are— (1) Industry or small business conferences; (2) Public hearings; (3) Market research, as described in Part 10; (4) One-on-one meetings with potential offerors (any that are substantially involved with potential contract terms and conditions should include the contracting officer; also see paragraph (f) of this section regarding restrictions on disclosure of information); (5) Presolicitation notices; (6) Draft RFPs; (7) RFIs; (8) Presolicitation or preproposal conferences; and (9) Site visits. (d) The special notices of procurement matters at 5.205(c), or electronic notices, may be used to publicize the Government’s requirement or solicit information from industry. (e) RFIs may be used when the Government does not presently intend to award a contract, but wants to obtain price, delivery, other market information, or capabilities for planning purposes. Responses to these notices are not offers and cannot be accepted by the Government to form a binding contract. There is no required format for RFIs. (f) General information about agency mission needs and future requirements may be disclosed at any time. After release of the solicitation, the contracting officer must be the focal point of any exchange with potential offerors. When specific information about a proposed acquisition that would be necessary for the preparation of proposals is disclosed to one or more potential offerors, that information must be made available to the public as soon as practicable, but no later than the next general release of information, in order to avoid creating an unfair competitive advantage. Information provided to a potential offeror in response to its request must not be disclosed if doing so would reveal the potential offeror’s confidential business strategy, and is protected under or Subpart 24.2. When conducting a presolicitation or preproposal conference, materials distributed at the conference should be made available to all potential offerors, upon request.
18 15.201 Exchanges with industry before receipt of proposals, cont.
(d) The special notices of procurement matters at 5.205(c), or electronic notices, may be used to publicize the Government’s requirement or solicit information from industry. (e) RFIs may be used when the Government does not presently intend to award a contract, but wants to obtain price, delivery, other market information, or capabilities for planning purposes. Responses to these notices are not offers and cannot be accepted by the Government to form a binding contract. There is no required format for RFIs. (d) The special notices of procurement matters at 5.205(c), or electronic notices, may be used to publicize the Government’s requirement or solicit information from industry. (e) RFIs may be used when the Government does not presently intend to award a contract, but wants to obtain price, delivery, other market information, or capabilities for planning purposes. Responses to these notices are not offers and cannot be accepted by the Government to form a binding contract. There is no required format for RFIs. (f) General information about agency mission needs and future requirements may be disclosed at any time. After release of the solicitation, the contracting officer must be the focal point of any exchange with potential offerors. When specific information about a proposed acquisition that would be necessary for the preparation of proposals is disclosed to one or more potential offerors, that information must be made available to the public as soon as practicable, but no later than the next general release of information, in order to avoid creating an unfair competitive advantage. Information provided to a potential offeror in response to its request must not be disclosed if doing so would reveal the potential offeror’s confidential business strategy, and is protected under or Subpart 24.2. When conducting a presolicitation or preproposal conference, materials distributed at the conference should be made available to all potential offerors, upon request.
19 15.201 Exchanges with industry before receipt of proposals, cont.
(f) General information about agency mission needs and future requirements may be disclosed at any time. After release of the solicitation, the contracting officer must be the focal point of any exchange with potential offerors. When specific information about a proposed acquisition that would be necessary for the preparation of proposals is disclosed to one or more potential offerors, that information must be made available to the public as soon as practicable, but no later than the next general release of information, in order to avoid creating an unfair competitive advantage. Information provided to a potential offeror in response to its request must not be disclosed if doing so would reveal the potential offeror’s confidential business strategy, and is protected under or Subpart 24.2. When conducting a presolicitation or preproposal conference, materials distributed at the conference should be made available to all potential offerors, upon request. (f) General information about agency mission needs and future requirements may be disclosed at any time. After release of the solicitation, the contracting officer must be the focal point of any exchange with potential offerors. When specific information about a proposed acquisition that would be necessary for the preparation of proposals is disclosed to one or more potential offerors, that information must be made available to the public as soon as practicable, but no later than the next general release of information, in order to avoid creating an unfair competitive advantage. Information provided to a potential offeror in response to its request must not be disclosed if doing so would reveal the potential offeror’s confidential business strategy, and is protected under or Subpart 24.2. When conducting a presolicitation or preproposal conference, materials distributed at the conference should be made available to all potential offerors, upon request.
20 15.202 Advisory multi-step process.
The agency may publish a presolicitation notice (see 5.204) that provides a general description of the scope or purpose of the acquisition and invites potential offerors to submit information that allows the Government to advise the offerors about their potential to be viable competitors. The presolicitation notice should identify the information that must be submitted and the criteria that will be used in making the initial evaluation. The agency shall evaluate all responses in accordance with the criteria stated in the notice, and shall advise each respondent in writing either that it will be invited to participate in the resultant acquisition or, based on the information submitted, that it is unlikely to be a viable competitor. The agency shall advise respondents considered not to be viable competitors of the general basis for that opinion. 15.202 Advisory multi-step process. (a) The agency may publish a presolicitation notice (see 5.204) that provides a general description of the scope or purpose of the acquisition and invites potential offerors to submit information that allows the Government to advise the offerors about their potential to be viable competitors. The presolicitation notice should identify the information that must be submitted and the criteria that will be used in making the initial evaluation. Information sought may be limited to a statement of qualifications and other appropriate information (e.g., proposed technical concept, past performance, and limited pricing information). At a minimum, the notice shall contain sufficient information to permit a potential offeror to make an informed decision about whether to participate in the acquisition. This process should not be used for multi-step acquisitions where it would result in offerors being required to submit identical information in response to the notice and in response to the initial step of the acquisition. (b) The agency shall evaluate all responses in accordance with the criteria stated in the notice, and shall advise each respondent in writing either that it will be invited to participate in the resultant acquisition or, based on the information submitted, that it is unlikely to be a viable competitor. The agency shall advise respondents considered not to be viable competitors of the general basis for that opinion. The agency shall inform all respondents that, notwithstanding the advice provided by the Government in response to their submissions, they may participate in the resultant acquisition.
21 15.203 Requests for proposals.
Requests for proposals (RFPs) are used in negotiated acquisitions to communicate Government requirements to prospective contractors and to solicit proposals. RFPs for competitive acquisitions shall, at a minimum, describe the— Government’s requirement; (2) Anticipated terms and conditions that will apply to the contract: (3) Information required to be in the offeror’s proposal; and (4) Factors and significant subfactors that will be used to evaluate the proposal and their relative importance. (a) Requests for proposals (RFPs) are used in negotiated acquisitions to communicate Government requirements to prospective contractors and to solicit proposals. RFPs for competitive acquisitions shall, at a minimum, describe the— (1) Government’s requirement; (2) Anticipated terms and conditions that will apply to the contract: (i) The solicitation may authorize offerors to propose alternative terms and conditions, including the contract line item number (CLIN) structure; and (ii) When alternative CLIN structures are permitted, the evaluation approach should consider the potential impact on other terms and conditions or the requirement (e.g., place of performance or payment and funding requirements) (see ); (3) Information required to be in the offeror’s proposal; and (4) Factors and significant subfactors that will be used to evaluate the proposal and their relative importance. (b) An RFP may be issued for OMB Circular A-76 studies. See Subpart 7.3 for additional information regarding cost comparisons between Government and contractor performance.
22 15.203 Requests for proposals, cont.
(b) An RFP may be issued for OMB Circular A-76 studies. See Subpart 7.3 for additional information regarding cost comparisons between Government and contractor performance. (c) Electronic commerce may be used to issue RFPs and to receive proposals, modifications, and revisions. In this case, the RFP shall specify the electronic commerce method(s) that offerors may use (see Subpart 4.5). (d) Contracting officers may issue RFPs and/or authorize receipt of proposals, modifications, or revisions by facsimile. (b) An RFP may be issued for OMB Circular A-76 studies. See Subpart 7.3 for additional information regarding cost comparisons between Government and contractor performance. (c) Electronic commerce may be used to issue RFPs and to receive proposals, modifications, and revisions. In this case, the RFP shall specify the electronic commerce method(s) that offerors may use (see Subpart 4.5). (d) Contracting officers may issue RFPs and/or authorize receipt of proposals, modifications, or revisions by facsimile. (1) In deciding whether or not to use facsimiles, the contracting officer should consider factors such as— (i) Anticipated proposal size and volume; (ii) Urgency of the requirement; (iii) Availability and suitability of electronic commerce methods; and (iv) Adequacy of administrative procedures and controls for receiving, identifying, recording, and safeguarding facsimile proposals, and ensuring their timely delivery to the designated proposal delivery location. (2) If facsimile proposals are authorized, contracting officers may request offeror(s) to provide the complete, original signed proposal at a later date. (e) Letter RFPs may be used in sole source acquisitions and other appropriate circumstances. Use of a letter RFP does not relieve the contracting officer from complying with other FAR requirements. Letter RFPs should be as complete as possible and, at a minimum, should contain the following: (1) RFP number and date; (2) Name, address (including electronic address and facsimile address, if appropriate), and telephone number of the contracting officer; (3) Type of contract contemplated; (4) Quantity, description, and required delivery dates for the item; (5) Applicable certifications and representations; (6) Anticipated contract terms and conditions; (7) Instructions to offerors and evaluation criteria for other than sole source actions; (8) Proposal due date and time; and (9) Other relevant information; e.g., incentives, variations in delivery schedule, cost proposal support, and data requirements.
23 15.203 Requests for proposals, cont.
(e) Letter RFPs may be used in sole source acquisitions and other appropriate circumstances. Use of a letter RFP does not relieve the contracting officer from complying with other FAR requirements. Letter RFPs should be as complete as possible and, at a minimum, should contain the following: (f) Oral RFPs are authorized when processing a written solicitation would delay the acquisition of supplies or services to the detriment of the Government and a notice is not required under (e.g., perishable items and support of contingency operations or other emergency situations). Use of an oral RFP does not relieve the contracting officer from complying with other FAR requirements. (e) Letter RFPs may be used in sole source acquisitions and other appropriate circumstances. Use of a letter RFP does not relieve the contracting officer from complying with other FAR requirements. Letter RFPs should be as complete as possible and, at a minimum, should contain the following: (1) RFP number and date; (2) Name, address (including electronic address and facsimile address, if appropriate), and telephone number of the contracting officer; (3) Type of contract contemplated; (4) Quantity, description, and required delivery dates for the item; (5) Applicable certifications and representations; (6) Anticipated contract terms and conditions; (7) Instructions to offerors and evaluation criteria for other than sole source actions; (8) Proposal due date and time; and (9) Other relevant information; e.g., incentives, variations in delivery schedule, cost proposal support, and data requirements. (f) Oral RFPs are authorized when processing a written solicitation would delay the acquisition of supplies or services to the detriment of the Government and a notice is not required under (e.g., perishable items and support of contingency operations or other emergency situations). Use of an oral RFP does not relieve the contracting officer from complying with other FAR requirements. (1) The contract files supporting oral solicitations should include— (i) A description of the requirement; (ii) Rationale for use of an oral solicitation; (iii) Sources solicited, including the date, time, name of individuals contacted, and prices offered; and (iv) The solicitation number provided to the prospective offerors. (2) The information furnished to potential offerors under oral solicitations should include appropriate items from paragraph (e) of this section.
24 15.204 Contract format. The use of a uniform contract format facilitates preparation of the solicitation and contract as well as reference to, and use of, those documents by offerors, contractors, and contract administrators. The uniform contract format need not be used for the following: (a) Construction and architect-engineer contracts (see Part 36). (b) Subsistence contracts. (c) Supplies or services contracts requiring special contract formats prescribed elsewhere in this regulation that are inconsistent with the uniform format. (d) Letter requests for proposals (see (e)). (e) Contracts exempted by the agency head or designee. 15.204 Contract format. The use of a uniform contract format facilitates preparation of the solicitation and contract as well as reference to, and use of, those documents by offerors, contractors, and contract administrators. The uniform contract format need not be used for the following: (a) Construction and architect-engineer contracts (see Part 36). (b) Subsistence contracts. (c) Supplies or services contracts requiring special contract formats prescribed elsewhere in this regulation that are inconsistent with the uniform format. (d) Letter requests for proposals (see (e)). (e) Contracts exempted by the agency head or designee.
25 15.204-1 Uniform contract format.
(a) Contracting officers shall prepare solicitations and resulting contracts using the uniform contract format outlined in Table 15-1 of this subsection. (b) Solicitations using the uniform contract format shall include Parts I, II, III, and IV (see through ). Upon award, contracting officers shall not physically include Part IV in the resulting contract, but shall retain it in the contract file. (See (c).) Section K shall be incorporated by reference in the contract. Uniform contract format. (a) Contracting officers shall prepare solicitations and resulting contracts using the uniform contract format outlined in Table 15-1 of this subsection. (b) Solicitations using the uniform contract format shall include Parts I, II, III, and IV (see through ). Upon award, contracting officers shall not physically include Part IV in the resulting contract, but shall retain it in the contract file. (See (c).) Section K shall be incorporated by reference in the contract.
26 Table 15-1—Uniform Contract Format
Section Title Part I—The Schedule A Solicitation/contract form B Supplies or services and prices/costs C Description/specifications/statement of work D Packaging and marking E Inspection and acceptance F Deliveries or performance G Contract administration data H Special contract requirements Part II—Contract Clauses I Contract clauses Part III—List of Documents, Exhibits, and Other Attachments J List of attachments Part IV—Representations and Instructions K Representations, certifications, and other statements of offerors or respondents L Instructions, conditions, and notices to offerors or respondents M Evaluation factors for award Part I—The Schedule. The contracting officer shall prepare the contract Schedule as follows: (a) Section A, Solicitation/contract form. (1) Optional Form (OF) 308, Solicitation and Offer—Negotiated Acquisition, or Standard Form (SF) 33, Solicitation, Offer and Award, may be used to prepare RFPs. (2) When other than OF 308 or SF 33 is used, include the following information on the first page of the solicitation: (i) Name, address, and location of issuing activity, including room and building where proposals or information must be submitted. (ii) Solicitation number. (iii) Date of issuance. (iv) Closing date and time. (v) Number of pages. (vi) Requisition or other purchase authority. (vii) Brief description of item or service. (viii) Requirement for the offeror to provide its name and complete address, including street, city, county, state, and ZIP code, and electronic address (including facsimile address), if appropriate. (ix) Offer expiration date. (b) Section B, Supplies or services and prices/costs. Include a brief description of the supplies or services; e.g., item number, national stock number/part number if applicable, nouns, nomenclature, and quantities. (This includes incidental deliverables such as manuals and reports.) (c) Section C, Description/specifications/statement of work. Include any description or specifications needed in addition to Section B (see Part 11, Describing Agency Needs). (d) Section D, Packaging and marking. Provide packaging, packing, preservation, and marking requirements, if any. (e) Section E, Inspection and acceptance. Include inspection, acceptance, quality assurance, and reliability requirements (see Part 46, Quality Assurance). (f) Section F, Deliveries or performance. Specify the requirements for time, place, and method of delivery or performance (see Subpart 11.4, Delivery or Performance Schedules, and ). (g) Section G, Contract administration data. Include any required accounting and appropriation data and any required contract administration information or instructions other than those on the solicitation form. Include a statement that the offeror should include the payment address in the proposal, if it is different from that shown for the offeror. (h) Section H, Special contract requirements. Include a clear statement of any special contract requirements that are not included in Section I, Contract clauses, or in other sections of the uniform contract format.
27 15.205 Issuing solicitations.
(a) The contracting officer shall issue solicitations to potential sources in accordance with the policies and procedures in 5.102, , and Part 6. (b) A master solicitation, as described in , may also be used for negotiated acquisitions. 15.205 Issuing solicitations. (a) The contracting officer shall issue solicitations to potential sources in accordance with the policies and procedures in 5.102, , and Part 6. (b) A master solicitation, as described in , may also be used for negotiated acquisitions. 15.206 Amending the solicitation.
28 15.206 Amending the solicitation.
When, either before or after receipt of proposals, the Government changes its requirements or terms and conditions, the contracting officer shall amend the solicitation. (b) Amendments issued before the established time and date for receipt of proposals shall be issued to all parties receiving the solicitation. (c) Amendments issued after the established time and date for receipt of proposals shall be issued to all offerors that have not been eliminated from the competition. (d) If a proposal of interest to the Government involves a departure from the stated requirements, the contracting officer shall amend the solicitation, provided this can be done without revealing to the other offerors the alternate solution proposed or any other information that is entitled to protection (see (b) and (e)). 15.206 Amending the solicitation. (a) When, either before or after receipt of proposals, the Government changes its requirements or terms and conditions, the contracting officer shall amend the solicitation. (b) Amendments issued before the established time and date for receipt of proposals shall be issued to all parties receiving the solicitation. (c) Amendments issued after the established time and date for receipt of proposals shall be issued to all offerors that have not been eliminated from the competition. (d) If a proposal of interest to the Government involves a departure from the stated requirements, the contracting officer shall amend the solicitation, provided this can be done without revealing to the other offerors the alternate solution proposed or any other information that is entitled to protection (see (b) and (e)). (e) If, in the judgment of the contracting officer, based on market research or otherwise, an amendment proposed for issuance after offers have been received is so substantial as to exceed what prospective offerors reasonably could have anticipated, so that additional sources likely would have submitted offers had the substance of the amendment been known to them, the contracting officer shall cancel the original solicitation and issue a new one, regardless of the stage of the acquisition. (f) Oral notices may be used when time is of the essence. The contracting officer shall document the contract file and formalize the notice with an amendment (see Subpart 4.5, Electronic Commerce in Contracting). (g) At a minimum, the following information should be included in each amendment: (1) Name and address of issuing activity. (2) Solicitation number and date. (3) Amendment number and date. (4) Number of pages. (5) Description of the change being made. (6) Government point of contact and phone number (and electronic or facsimile address, if appropriate). (7) Revision to solicitation closing date, if applicable.
29 15.206 Amending the solicitation, cont.
(e) If, in the judgment of the contracting officer, based on market research or otherwise, an amendment proposed for issuance after offers have been received is so substantial as to exceed what prospective offerors reasonably could have anticipated, so that additional sources likely would have submitted offers had the substance of the amendment been known to them, the contracting officer shall cancel the original solicitation and issue a new one, regardless of the stage of the acquisition. (f) Oral notices may be used when time is of the essence. The contracting officer shall document the contract file and formalize the notice with an amendment (see Subpart 4.5, Electronic Commerce in Contracting). (e) If, in the judgment of the contracting officer, based on market research or otherwise, an amendment proposed for issuance after offers have been received is so substantial as to exceed what prospective offerors reasonably could have anticipated, so that additional sources likely would have submitted offers had the substance of the amendment been known to them, the contracting officer shall cancel the original solicitation and issue a new one, regardless of the stage of the acquisition. (f) Oral notices may be used when time is of the essence. The contracting officer shall document the contract file and formalize the notice with an amendment (see Subpart 4.5, Electronic Commerce in Contracting).
30 15.206 Amending the solicitation, cont.
(g) At a minimum, the following information should be included in each amendment: (1) Name and address of issuing activity. (2) Solicitation number and date. (3) Amendment number and date. (4) Number of pages. (5) Description of the change being made. (6) Government point of contact and phone number (and electronic or facsimile address, if appropriate). (7) Revision to solicitation closing date, if applicable. (g) At a minimum, the following information should be included in each amendment: (1) Name and address of issuing activity. (2) Solicitation number and date. (3) Amendment number and date. (4) Number of pages. (5) Description of the change being made. (6) Government point of contact and phone number (and electronic or facsimile address, if appropriate). (7) Revision to solicitation closing date, if applicable.
31 15.207 Handling proposals and information.
Upon receipt at the location specified in the solicitation, proposals and information received in response to a request for information (RFI) shall be marked with the date and time of receipt and shall be transmitted to the designated officials. (b) Proposals shall be safeguarded from unauthorized disclosure throughout the source selection process. (c) If any portion of a proposal received by the contracting officer electronically or by facsimile is unreadable, the contracting officer immediately shall notify the offeror and permit the offeror to resubmit the unreadable portion of the proposal. The method and time for resubmission shall be prescribed by the contracting officer after consultation with the offeror, and documented in the file. 15.207 Handling proposals and information. (a) Upon receipt at the location specified in the solicitation, proposals and information received in response to a request for information (RFI) shall be marked with the date and time of receipt and shall be transmitted to the designated officials. (b) Proposals shall be safeguarded from unauthorized disclosure throughout the source selection process. (See regarding the disclosure of source selection information (41 U.S.C. 423)). Information received in response to an RFI shall be safeguarded adequately from unauthorized disclosure. (c) If any portion of a proposal received by the contracting officer electronically or by facsimile is unreadable, the contracting officer immediately shall notify the offeror and permit the offeror to resubmit the unreadable portion of the proposal. The method and time for resubmission shall be prescribed by the contracting officer after consultation with the offeror, and documented in the file. The resubmission shall be considered as if it were received at the date and time of the original unreadable submission for the purpose of determining timeliness under (a), provided the offeror complies with the time and format requirements for resubmission prescribed by the contracting officer.
32 Subpart 15.3—Source Selection
15.302 Source selection objective. The objective of source selection is to select the proposal that represents the best value. ‘“Best value” means the expected outcome of an acquisition that, in the Government’s estimation, provides the greatest overall benefit in response to the requirement,” FAR 2.101’
33 15.303 Responsibilities. Agency heads are responsible for source selection. The contracting officer is designated as the source selection authority. . . 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; (4) Ensure that proposals are evaluated based solely on the factors and subfactors contained in the solicitation; (2)Approve the source selection strategy or acquisition plan, if applicable, before solicitation release; (5) Consider the recommendations of advisory boards or panels (if any); (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; (6) Select the source or sources whose proposal is the best value to the Government. 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. 2305(b)(1) and 41 U.S.C. 253b(d)(3)); (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. 2305(b)(4)(B) and 41 U.S.C. 253b(d)(3)). (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 ; and (3) Award the contract(s).
34 15.303 Responsibilities, cont.
(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 ; and (3) Award the contract(s).
35 15.304 Evaluation factors and significant subfactors.
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. 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) Price or cost to the Government shall be evaluated in every source selection (10 U.S.C. 2305(a)(3)(A)(ii) and 41 U.S.C. 253a(c)(1)(B)) (also see Part 36 for architect-engineer contracts); (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. 2305(a)(3)(A)(i) and 41 U.S.C. 253a(c)(1)(A)); and (3)(i) Except as set forth in paragraph (c)(3)(iii) of this section, past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold. (ii) For solicitations involving bundling that offer a significant opportunity for subcontracting, the contracting officer must 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) The extent of participation of small disadvantaged business concerns in performance of the contract shall be evaluated in unrestricted acquisitions expected to exceed $550,000 ($1,000,000 for construction) subject to certain limitations (see and ). (5) For solicitations involving bundling that offer a significant opportunity for subcontracting, the contracting officer must include proposed small business subcontracting participation in the subcontracting plan as an evaluation factor (15 U.S.C. 637(d)(4)(G)(i)). (6) 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. 2305(a)(2)(A)(i) and 41 U.S.C. 253a(b)(1)(A)) (see (c)). The rating method need not be disclosed in the solicitation. The general approach for evaluating past performance information shall be described. (e) 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. 2305(a)(3)(A)(iii) and 41 U.S.C. 253a(c)(1)(C)).
36 15.304 Evaluation factors and significant subfactors, cont.
(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: Price or cost to the Government shall be evaluated in every source selection (10 U.S.C. 2305(a)(3)(A)(ii) and 41 U.S.C. 253a(c)(1)(B)) (also see Part 36 for architect-engineer contracts); (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. 2305(a)(3)(A)(i) and 41 U.S.C. 253a(c)(1)(A)); and (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) Price or cost to the Government shall be evaluated in every source selection (10 U.S.C. 2305(a)(3)(A)(ii) and 41 U.S.C. 253a(c)(1)(B)) (also see Part 36 for architect-engineer contracts); (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. 2305(a)(3)(A)(i) and 41 U.S.C. 253a(c)(1)(A)); and (3)(i) Except as set forth in paragraph (c)(3)(iii) of this section, past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold. (ii) For solicitations involving bundling that offer a significant opportunity for subcontracting, the contracting officer must 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.
37 Cont. (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: (3)(i) Except as set forth in paragraph (c)(3)(iii) of this section, past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold. (ii) For solicitations involving bundling that offer a significant opportunity for subcontracting, the contracting officer must 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. (3)(i) Except as set forth in paragraph (c)(3)(iii) of this section, past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold. (ii) For solicitations involving bundling that offer a significant opportunity for subcontracting, the contracting officer must 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.
38 Cont. (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: (4) The extent of participation of small disadvantaged business concerns in performance of the contract shall be evaluated in unrestricted acquisitions expected to exceed $550,000 ($1,000,000 for construction) subject to certain limitations (see and ). (5) For solicitations involving bundling that offer a significant opportunity for subcontracting, the contracting officer must include proposed small business subcontracting participation in the subcontracting plan as an evaluation factor (15 U.S.C. 637(d)(4)(G)(i)). (6) 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).
39 15.304 Evaluation factors and significant subfactors, cont.
(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. 2305(a)(2)(A)(i) and 41 U.S.C. 253a(b)(1)(A)) (see (c)). The rating method need not be disclosed in the solicitation. The general approach for evaluating past performance information shall be described. (e) 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. 2305(a)(3)(A)(iii) and 41 U.S.C. 253a(c)(1)(C)). (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. 2305(a)(2)(A)(i) and 41 U.S.C. 253a(b)(1)(A)) (see (c)). The rating method need not be disclosed in the solicitation. The general approach for evaluating past performance information shall be described. (e) 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. 2305(a)(3)(A)(iii) and 41 U.S.C. 253a(c)(1)(C)).
40 15.305 Proposal evaluation. 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. 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 (see (c)(1)(i)(B)) may be appropriate to establish reasonableness of the otherwise successful offeror’s price. 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. (See 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), monetary targets for SDB participation (see ), and notifications submitted under (b). (3) Technical evaluation. When tradeoffs are performed (see ), 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 (c)(3)(ii) and (c)(5). (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 (d).
41 15.305 Proposal evaluation. Types
Cost or price evaluation. Past performance evaluation. Technical evaluation. 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 (see (c)(1)(i)(B)) may be appropriate to establish reasonableness of the otherwise successful offeror’s price. 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. (See 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
42 15.305 Proposal evaluation, cont. (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 (see (c)(1)(i)(B)) may be appropriate to establish reasonableness of the otherwise successful offeror’s price. 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. (See for uncompensated overtime evaluation.) The contracting officer shall document the cost or price evaluation. (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 (see (c)(1)(i)(B)) may be appropriate to establish reasonableness of the otherwise successful offeror’s price. 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. (See for uncompensated overtime evaluation.) The contracting officer shall document the cost or price evaluation.
43 15.305 Proposal evaluation, cont. (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. (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), monetary targets for SDB participation (see ), and notifications submitted under (b).
44 15.305 Proposal evaluation, cont. (2) Past performance evaluation.
(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), monetary targets for SDB participation (see ), and notifications submitted under (b).
45 15.305 Proposal evaluation, cont. (3) Technical evaluation.
When tradeoffs are performed (see ), 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 (c)(3)(ii) and (c)(5). 3) Technical evaluation. When tradeoffs are performed (see ), 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 (c)(3)(ii) and (c)(5). (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 (d).
46 15.305 Proposal evaluation. (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 (d).
47 EVALUATION PROCEDURES
NCMA EVALUATION PROCEDURES (pp. 34, 36, ) Annotated Guide to the Contract Management Body of Knowledge
48 4.1.4 Evaluation Procedures - General
The solicitation package should clearly indicate the general procedures that will be used to evaluate proposals and the decisions that will be used as the basis for an award. The method of acquisition normally determines the basis for the award. Invitation for Bids (IFB) – indicates selection will be based on price Request for Proposal (RFP) – indicates a negotiated procurements The evaluation procedures can influence, either positively or negatively, the quality of proposals received Too few, results in inadequate proposals that are too hard to evaluate Too many, result in complex proposals or none at all
49 4.1.4 Evaluation Procedures - General
Price is normally included but other factors should be included as appropriate Cost realism Technical excellence Management capability Past performance Include enough so that offerors understand How proposals will be evaluated Factors involved in the evaluation Relative importance of the factors
50 4.3.2 Typical Evaluation Techniques
Evaluation Intent – “to uniformly rate the quality and content of all proposals received against a clear set of pertinent criteria ” Separate Evaluation of Technical Aspects (common practice here) Compliance Matrix (prepared checklist or rubric) Evaluation factors Subfactors Rating scale to be applied (Universal Rating Scale) Weighting of the factors if any
51 4.3.2 Typical Evaluation Techniques
Independent Evaluation – Members of evaluation team evaluate individually without input from other members. Color Scales – color represents a ranking Red = unsatisfactory Yellow = satisfactory Green = outstanding Numeric Scales – range of points from 0-X is assigned to each evaluated factor highest total scores can develop the competitive range or be the determiner of award be aware it may be more complicated as subjectivity does enter into the scoring
52 4.3.2 Typical Evaluation Techniques, cont.
Adjectival Scales – Similar to color scales but actually use the term rather than the colors Note: The rationale or explanation for scoring is required for color, adjectival, and numeric processes Regardless of the methodology, the source selection team must reach consensus and inform those not selected as well as those who are selected
53 Contracting by Negotiation
54 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 (3) Award may be made without discussions if the solicitation states that the Government intends to evaluate proposals and make award without discussions.
55 15.306 Exchanges with offerors after receipt of proposals.
(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; (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;
56 (b) Communications with offerors before establishment of the competitive range, cont.
(2) May be conducted to enhance Government understanding of proposals; Allow reasonable interpretation of the proposal; 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;
57 (ii) Information relating to relevant past performance; and
(b) Communications with offerors before establishment of the competitive range, cont. (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 )); and (ii) Information relating to relevant past performance; and (4) Shall address adverse past performance (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 )); 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.
58 15.306(c) Competitive range. Agencies shall evaluate all proposals in accordance with (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. After evaluating all proposals in accordance with (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 (f)(4)), the contracting officer may limit the number of proposals . . . (c) Competitive range. (1) Agencies shall evaluate all proposals in accordance with (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 (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 (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. 2305(b)(4) and 41 U.S.C. 253b(d)). (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 (4) Offerors excluded or otherwise eliminated from the competitive range may request a debriefing (see and ).
59 15.306(c) Competitive range. (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 (4) Offerors excluded or otherwise eliminated from the competitive range may request a debriefing (see and ). 15.306(c) Competitive range. (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 (4) Offerors excluded or otherwise eliminated from the competitive range may request a debriefing (see and ).
60 15.306(d) Competitive range. (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. (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 (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
61 15.306(d) Competitive range, cont.
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. (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 (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 (a) and (a)(1)).
62 15.306(d) Competitive range, cont.
(3) At a minimum, the contracting officer must, subject to paragraphs . . .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 . . .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. (3) At a minimum, the contracting officer must, subject to paragraphs (d)(5) and (e) of this section and (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.
63 15.306(d) Competitive range, cont.
(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 (a) and (a)(1)). (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 (a) and (a)(1)).
64 15.306(e) Competitive range, cont.
Limits on exchanges. Government personnel involved in the acquisition shall not engage in conduct that— Favors one offeror over another; (2) Reveals an offeror’s technical solution, including unique technology, innovative and unique uses of commercial items, or any information that would compromise an offeror’s intellectual property to another offeror; (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 unique technology, innovative and unique uses of commercial items, or 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. 423(h)(1)(2)); (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 and 41 U.S.C. 423(h)(1)(2).
65 15. 306(e) Competitive range, cont. Limits on exchanges
15.306(e) Competitive range, cont. Limits on exchanges. Government personnel involved in the acquisition shall not engage in conduct that— (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. 423(h)(1)(2)); (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 and 41 U.S.C. 423(h)(1)(2). (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 unique technology, innovative and unique uses of commercial items, or 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. 423(h)(1)(2)); (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 and 41 U.S.C. 423(h)(1)(2).
66 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. 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.
67 Annotated Guide to the Contract Management Body of Knowledge
NCMA Negotiations (pp ) Annotated Guide to the Contract Management Body of Knowledge
68 Negotiation 4.5 “A communications process where two parties attempt to reach agreement, p. 41.” Should not be approached as if there has to be a winner A win-win solution is the desirable outcome.
69 Preparation and Team Most important step in negotiations Advantages
Smooth negotiations Good contract Fewer changes More successful performance Teams include but are not limited to: Contract professional, legal counsel Financial analyst, cost analyst, legal counsel Design engineer, production specialist & others
70 Negotiation Objectives
Most aspects of a solicitation are negotiable SOW Delivery schedule Warranties Payment terms Terms and conditions Reporting requirements Objectives should be Flexible (set minimums and maximums) Preplanned and specific Identify important issues Acquire recommendations
71 Negotiation Guidelines Techniques:
Approach offeror with respect Caucus - Break away from formal negotiations for the team to Consider a point Evaluate a counter offer Discuss anything that you don’t want the other team to hear Concessions – may be necessary to concede a point to gain an objective
72 Negotiation Strategies and Tactics Four Basic Tactics
The cooperative mode – assumption of reasonableness The competitive mode – assumption of adversarial relationship (lack of preparedness can lead to this) Time restrictions – can be resolved by negotiating delivery schedule, inspection requirements, compensated overtime, or letter contracts Deadlock – can be resolved by re-evaluating objectives, “new faces” at the table, applying pressure by negotiating with a different offeror
73 The Negotiation – general tips
Validate Assumptions (ask for clarification) Buyer usually controls the meeting space: large enough, separate caucus room, private telephone, note paper, visual aides, white board Uninterrupted time
74 Negotiation Organization
Meet & greet Provide agenda (in advance if possible) Basic format is question/answer Secure easy agreements first (provides confidence and trust) Document decisions Use documented decisions to form final agreement Document the final agreement
75 Final Agreement: Components
Description of supplies or services Solicitation/proposal number Parties involves with names, addresses, contact information Acquisition history Negotiation objectives & justifications Negotiation summary Concessions made Effect of concessions on objectives Major items discussed Positions and outcomes Use data including price & cost Copy of the agreed-to final position
76 FAR Subpart 15.4 Contract Pricing
77 15.402 Pricing policy. Contracting officers must—
(a) Purchase supplies and services from responsible sources at fair and reasonable prices. In establishing the reasonableness of the offered prices, the contracting officer must not obtain more information than is necessary. To the extent that cost or pricing data are not required by , the contracting officer must generally use the following order of preference in determining the type of information required: 15.402 Pricing policy. Contracting officers must— (a) Purchase supplies and services from responsible sources at fair and reasonable prices. In establishing the reasonableness of the offered prices, the contracting officer must not obtain more information than is necessary. To the extent that cost or pricing data are not required by , the contracting officer must generally use the following order of preference in determining the type of information required: (1) No additional information from the offeror, if the price is based on adequate price competition, except as provided by (b). (2) Information other than cost or pricing data: (i) Information related to prices (e.g., established catalog or market prices or previous contract prices), relying first on information available within the Government; second, on information obtained from sources other than the offeror; and, if necessary, on information obtained from the offeror. When obtaining information from the offeror is necessary, unless an exception under (b)(1) or (2) applies, such information submitted by the offeror shall include, at a minimum, appropriate information on the prices at which the same or similar items have been sold previously, adequate for evaluating the reasonableness of the price. (ii) Cost information, that does not meet the definition of cost or pricing data at (3) Cost or pricing data. The contracting officer should use every means available to ascertain whether a fair and reasonable price can be determined before requesting cost or pricing data. Contracting officers must not require unnecessarily the submission of cost or pricing data, because it leads to increased proposal preparation costs, generally extends acquisition lead time, and consumes additional contractor and Government resources. (b) Price each contract separately and independently and not— (1) Use proposed price reductions under other contracts as an evaluation factor; or (2) Consider losses or profits realized or anticipated under other contracts. (c) Not include in a contract price any amount for a specified contingency to the extent that the contract provides for a price adjustment based upon the occurrence of that contingency.
78 15.402 Pricing policy, cont. (1) No additional information from the offeror, if the price is based on adequate price competition, except as provided by (b). (2) Information other than cost or pricing data: (i) Information related to prices (e.g., established catalog or market prices or previous contract prices), relying first on information available within the Government; second, on information obtained from sources other than the offeror; and, if necessary, on information obtained from the offeror. for evaluating the reasonableness of the price. . . (ii) Cost information, that does not meet the definition of cost or pricing data at (1) No additional information from the offeror, if the price is based on adequate price competition, except as provided by (b). (2) Information other than cost or pricing data: (i) Information related to prices (e.g., established catalog or market prices or previous contract prices), relying first on information available within the Government; second, on information obtained from sources other than the offeror; and, if necessary, on information obtained from the offeror. When obtaining information from the offeror is necessary, unless an exception under (b)(1) or (2) applies, such information submitted by the offeror shall include, at a minimum, appropriate information on the prices at which the same or similar items have been sold previously, adequate for evaluating the reasonableness of the price. (ii) Cost information, that does not meet the definition of cost or pricing data at
79 15.402 Pricing policy, cont. (3) Cost or pricing data. The contracting officer should use every means available to ascertain whether a fair and reasonable price can be determined before requesting cost or pricing data. Contracting officers must not require unnecessarily the submission of cost or pricing data, because it leads to increased proposal preparation costs, generally extends acquisition lead time, and consumes additional contractor and Government resources.
80 15.402 Pricing policy, cont. (b) Price each contract separately and independently and not— (1) Use proposed price reductions under other contracts as an evaluation factor; or (2) Consider losses or profits realized or anticipated under other contracts. (c) Not include in a contract price any amount for a specified contingency to the extent that the contract provides for a price adjustment based upon the occurrence of that contingency. (b) Price each contract separately and independently and not— (1) Use proposed price reductions under other contracts as an evaluation factor; or (2) Consider losses or profits realized or anticipated under other contracts. (c) Not include in a contract price any amount for a specified contingency to the extent that the contract provides for a price adjustment based upon the occurrence of that contingency.
81 15.403-3 Requiring information other than cost or pricing data.
(a) General. The contracting officer is responsible for obtaining information that is adequate for evaluating the reasonableness of the price or determining cost realism, but the contracting officer should not obtain more information than is necessary (see (a)). If the contracting officer cannot obtain adequate information from sources other than the offeror, the contracting officer must require submission of information other than cost or pricing data from the offeror that is adequate to determine a fair and reasonable price Requiring information other than cost or pricing data. (a) General. (1) The contracting officer is responsible for obtaining information that is adequate for evaluating the reasonableness of the price or determining cost realism, but the contracting officer should not obtain more information than is necessary (see (a)). If the contracting officer cannot obtain adequate information from sources other than the offeror, the contracting officer must require submission of information other than cost or pricing data from the offeror that is adequate to determine a fair and reasonable price (10 U.S.C. 2306a(d)(1) and 41 U.S.C. 254b(d)(1)). Unless an exception under (b)(1) or (2) applies, the contracting officer must require that the information submitted by the offeror include, at a minimum, appropriate information on the prices at which the same item or similar items have previously been sold, adequate for determining the reasonableness of the price. To determine the information an offeror should be required to submit, the contracting officer should consider the guidance in Section 3.3, Chapter 3, Volume I, of the Contract Pricing Reference Guide cited at (a)(7). (2) The contractor’s format for submitting the information should be used (see (b)(2)). (3) The contracting officer must ensure that information used to support price negotiations is sufficiently current to permit negotiation of a fair and reasonable price. Requests for updated offeror information should be limited to information that affects the adequacy of the proposal for negotiations, such as changes in price lists. (4) As specified in Section 808 of Public Law , an offeror who does not comply with a requirement to submit information for a contract or subcontract in accordance with paragraph (a)(1) of this subsection is ineligible for award unless the HCA determines that it is in the best interest of the Government to make the award to that offeror, based on consideration of the following: (i) The effort made to obtain the data. (ii) The need for the item or service. (iii) Increased cost or significant harm to the Government if award is not made. (b) Adequate price competition. When adequate price competition exists (see (c)(1)), generally no additional information is necessary to determine the reasonableness of price. However, if there are unusual circumstances where it is concluded that additional information is necessary to determine the reasonableness of price, the contracting officer shall, to the maximum extent practicable, obtain the additional information from sources other than the offeror. In addition, the contracting officer may request information to determine the cost realism of competing offers or to evaluate competing approaches. (c) Commercial items. (1) At a minimum, the contracting officer must use price analysis to determine whether the price is fair and reasonable whenever the contracting officer acquires a commercial item (see (b)). The fact that a price is included in a catalog does not, in and of itself, make it fair and reasonable. If the contracting officer cannot determine whether an offered price is fair and reasonable, even after obtaining additional information from sources other than the offeror, then the contracting officer must require the offeror to submit information other than cost or pricing data to support further analysis (see ). (2) Limitations relating to commercial items (10 U.S.C. 2306a(d)(2) and 41 U.S.C. 254b(d)). (i) The contracting officer must limit requests for sales data relating to commercial items to data for the same or similar items during a relevant time period. (ii) The contracting officer must, to the maximum extent practicable, limit the scope of the request for information relating to commercial items to include only information that is in the form regularly maintained by the offeror as part of its commercial operations. (iii) The Government must not disclose outside the Government information obtained relating to commercial items that is exempt from disclosure under (a) or the Freedom of Information Act (5 U.S.C. 552(b)). (3) For services that are not offered and sold competitively in substantial quantities in the commercial marketplace, but are of a type offered and sold competitively in substantial quantities in the commercial marketplace, see (c)(3)(ii).
82 15.403-4 Requiring cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. 254b).
(a)(1) The contracting officer must obtain cost or pricing data only if the contracting officer concludes that none of the exceptions in (b) applies. . . The threshold for obtaining cost or pricing data is $650,000. Unless an exception applies, cost or pricing data are required before accomplishing any of the following actions expected to exceed the current threshold or, for existing contracts, the threshold specified in the contract: (i) The award of any negotiated contract (except for undefinitized actions such as letter contracts). (ii) The award of a subcontract at any tier, if the contractor and each higher-tier subcontractor were required to submit cost or pricing data (but see waivers at (c)(4)). (a)(1) The contracting officer must obtain cost or pricing data only if the contracting officer concludes that none of the exceptions in (b) applies. However, if the contracting officer has sufficient information available to determine price reasonableness, then the contracting officer should consider requesting a waiver under the exception at (b)(4). The threshold for obtaining cost or pricing data is $650,000. Unless an exception applies, cost or pricing data are required before accomplishing any of the following actions expected to exceed the current threshold or, for existing contracts, the threshold specified in the contract: (i) The award of any negotiated contract (except for undefinitized actions such as letter contracts). (ii) The award of a subcontract at any tier, if the contractor and each higher-tier subcontractor were required to submit cost or pricing data (but see waivers at (c)(4)).
83 (a)(1)(iii) (iii) The modification of any sealed bid or negotiated contract (whether or not cost or pricing data were initially required) or any subcontract covered by paragraph (a)(1)(ii) of this subsection. Price adjustment amounts must consider both increases and decreases (e.g., a $200,000 modification resulting from a reduction of $500,000 and an increase of $300,000 is a pricing adjustment exceeding $650,000). (iii) The modification of any sealed bid or negotiated contract (whether or not cost or pricing data were initially required) or any subcontract covered by paragraph (a)(1)(ii) of this subsection. Price adjustment amounts must consider both increases and decreases (e.g., a $200,000 modification resulting from a reduction of $500,000 and an increase of $300,000 is a pricing adjustment exceeding $650,000). This requirement does not apply when unrelated and separately priced changes for which cost or pricing data would not otherwise be required are included for administrative convenience in the same modification. Negotiated final pricing actions (such as termination settlements and total final price agreements for fixed-price incentive and redeterminable contracts) are contract modifications requiring cost or pricing data if— (A) The total final price agreement for such settlements or agreements exceeds the pertinent threshold set forth at paragraph (a)(1) of this subsection; or (B) The partial termination settlement plus the estimate to complete the continued portion of the contract exceeds the pertinent threshold set forth at paragraph (a)(1) of this subsection (see (c)(15)).
84 (a)(2) (2) Unless prohibited because an exception at (b) applies, the head of the contracting activity, without power of delegation, may authorize the contracting officer to obtain cost or pricing data for pricing actions below the pertinent threshold in paragraph (a)(1) of this subsection, provided the action exceeds the simplified acquisition threshold. The head of the contracting activity shall justify the requirement for cost or pricing data. The documentation shall include a written finding that cost or pricing data are necessary to determine whether the price is fair and reasonable and the facts supporting that finding.
85 (b) (b) When cost or pricing data are required, the contracting officer shall require the contractor or prospective contractor to submit to the contracting officer (and to have any subcontractor or prospective subcontractor submit to the prime contractor or appropriate subcontractor tier) the following in support of any proposal: The cost or pricing data. (2) A certificate of current cost or pricing data, in the format specified in , certifying that to the best of its knowledge and belief, the cost or pricing data were accurate, complete, and current as of the date of agreement on price or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price. (b) When cost or pricing data are required, the contracting officer shall require the contractor or prospective contractor to submit to the contracting officer (and to have any subcontractor or prospective subcontractor submit to the prime contractor or appropriate subcontractor tier) the following in support of any proposal: (1) The cost or pricing data. (2) A certificate of current cost or pricing data, in the format specified in , certifying that to the best of its knowledge and belief, the cost or pricing data were accurate, complete, and current as of the date of agreement on price or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price. (c) If cost or pricing data are requested and submitted by an offeror, but an exception is later found to apply, the data must not be considered cost or pricing data as defined in and must not be certified in accordance with (d) The requirements of this subsection also apply to contracts entered into by an agency on behalf of a foreign government.
86 (b) (c) If cost or pricing data are requested and submitted by an offeror, but an exception is later found to apply, the data must not be considered cost or pricing data as defined in and must not be certified in accordance with (d) The requirements of this subsection also apply to contracts entered into by an agency on behalf of a foreign government.
87 15. 404 Proposal analysis. (a) General
15.404 Proposal analysis. (a) General. The objective of proposal analysis is to ensure that the final agreed-to price is fair and reasonable. The contracting officer is responsible for evaluating the reasonableness of the offered prices. Price analysis shall be used when cost or pricing data are not required (see paragraph (b) of this subsection and ). (3) Cost analysis shall be used to evaluate the reasonableness of individual cost elements when cost or pricing data are required. Price analysis should be used to verify that the overall price offered is fair and reasonable. (4) Cost analysis may also be used to evaluate information other than cost or pricing data to determine cost reasonableness or cost realism. (5) The contracting officer may request the advice and assistance of other experts to ensure that an appropriate analysis is performed. (6) Recommendations or conclusions regarding the Government’s review or analysis of an offeror’s or contractor’s proposal shall not be disclosed to the offeror or contractor without the concurrence of the contracting officer. Proposal analysis techniques. (a) General. The objective of proposal analysis is to ensure that the final agreed-to price is fair and reasonable. (1) The contracting officer is responsible for evaluating the reasonableness of the offered prices. The analytical techniques and procedures described in this subsection may be used, singly or in combination with others, to ensure that the final price is fair and reasonable. The complexity and circumstances of each acquisition should determine the level of detail of the analysis required. (2) Price analysis shall be used when cost or pricing data are not required (see paragraph (b) of this subsection and ). (3) Cost analysis shall be used to evaluate the reasonableness of individual cost elements when cost or pricing data are required. Price analysis should be used to verify that the overall price offered is fair and reasonable. (4) Cost analysis may also be used to evaluate information other than cost or pricing data to determine cost reasonableness or cost realism. (5) The contracting officer may request the advice and assistance of other experts to ensure that an appropriate analysis is performed. (6) Recommendations or conclusions regarding the Government’s review or analysis of an offeror’s or contractor’s proposal shall not be disclosed to the offeror or contractor without the concurrence of the contracting officer. Any discrepancy or mistake of fact (such as duplications, omissions, and errors in computation) contained in the cost or pricing data or information other than cost or pricing data submitted in support of a proposal shall be brought to the contracting officer’s attention for appropriate action. (7) The Air Force Institute of Technology (AFIT) and the Federal Acquisition Institute (FAI) jointly prepared a five-volume set of Contract Pricing Reference Guides to guide pricing and negotiation personnel. The five guides are: I Price Analysis, II Quantitative Techniques for Contract Pricing, III Cost Analysis, IV Advanced Issues in Contract Pricing, and V Federal Contract Negotiation Techniques. These references provide detailed discussion and examples applying pricing policies to pricing problems. They are to be used for instruction and professional guidance. However, they are not directive and should be considered informational only. They are available via the internet at
88 15.404 Proposal analysis, cont.
(7) The Air Force Institute of Technology (AFIT) and the Federal Acquisition Institute (FAI) jointly prepared a five-volume set of Contract Pricing Reference Guides to guide pricing and negotiation personnel.
89 15.404 Proposal analysis, cont.
(b) Price analysis. (1) Price analysis is the process of examining and evaluating a proposed price without evaluating its separate cost elements and proposed profit. (2) The Government may use various price analysis techniques and procedures to ensure a fair and reasonable price. (3) The first two techniques at (b)(2) are the preferred techniques. . .if the contracting officer determines that information on competitive proposed prices or previous contract prices is not available or is insufficient to determine that the price is fair and reasonable, . . use any of the remaining techniques as appropriate to the circumstances applicable to the acquisition. (4) Value analysis can give insight into the relative worth of a product and the Government may use it in conjunction with the price analysis. . . (b) Price analysis. (1) Price analysis is the process of examining and evaluating a proposed price without evaluating its separate cost elements and proposed profit. (2) The Government may use various price analysis techniques and procedures to ensure a fair and reasonable price. Examples of such techniques include, but are not limited to, the following: (i) Comparison of proposed prices received in response to the solicitation. Normally, adequate price competition establishes price reasonableness (see (c)(1)). (ii) Comparison of previously proposed prices and previous Government and commercial contract prices with current proposed prices for the same or similar items, if both the validity of the comparison and the reasonableness of the previous price(s) can be established. (iii) Use of parametric estimating methods/application of rough yardsticks (such as dollars per pound or per horsepower, or other units) to highlight significant inconsistencies that warrant additional pricing inquiry. (iv) Comparison with competitive published price lists, published market prices of commodities, similar indexes, and discount or rebate arrangements. (v) Comparison of proposed prices with independent Government cost estimates. (vi) Comparison of proposed prices with prices obtained through market research for the same or similar items. (vii) Analysis of pricing information provided by the offeror. (3) The first two techniques at (b)(2) are the preferred techniques. However, if the contracting officer determines that information on competitive proposed prices or previous contract prices is not available or is insufficient to determine that the price is fair and reasonable, the contracting officer may use any of the remaining techniques as appropriate to the circumstances applicable to the acquisition. (4) Value analysis can give insight into the relative worth of a product and the Government may use it in conjunction with the price analysis techniques listed in paragraph (b)(2) of this section.
90 15.404 Proposal analysis. (c) Cost analysis.
Cost analysis is the review and evaluation of the separate cost elements and profit in an offeror’s or contractor’s proposal (including cost or pricing data or information other than cost or pricing data), and the application of judgment to determine how well the proposed costs represent what the cost of the contract should be, assuming reasonable economy and efficiency. (2) The Government may use various cost analysis techniques and procedures to ensure a fair and reasonable price, given the circumstances of the acquisition. (c) Cost analysis. (1) Cost analysis is the review and evaluation of the separate cost elements and profit in an offeror’s or contractor’s proposal (including cost or pricing data or information other than cost or pricing data), and the application of judgment to determine how well the proposed costs represent what the cost of the contract should be, assuming reasonable economy and efficiency. (2) The Government may use various cost analysis techniques and procedures to ensure a fair and reasonable price, given the circumstances of the acquisition. Such techniques and procedures include the following: (i) Verification of cost or pricing data and evaluation of cost elements, including— (A) The necessity for, and reasonableness of, proposed costs, including allowances for contingencies; (B) Projection of the offeror’s cost trends, on the basis of current and historical cost or pricing data; (C) Reasonableness of estimates generated by appropriately calibrated and validated parametric models or cost-estimating relationships; and (D) The application of audited or negotiated indirect cost rates, labor rates, and cost of money or other factors. (ii) Evaluating the effect of the offeror’s current practices on future costs. In conducting this evaluation, the contracting officer shall ensure that the effects of inefficient or uneconomical past practices are not projected into the future. In pricing production of recently developed complex equipment, the contracting officer should perform a trend analysis of basic labor and materials, even in periods of relative price stability. (iii) Comparison of costs proposed by the offeror for individual cost elements with— (A) Actual costs previously incurred by the same offeror; (B) Previous cost estimates from the offeror or from other offerors for the same or similar items; (C) Other cost estimates received in response to the Government’s request; (D) Independent Government cost estimates by technical personnel; and (E) Forecasts of planned expenditures. (iv) Verification that the offeror’s cost submissions are in accordance with the contract cost principles and procedures in Part 31 and, when applicable, the requirements and procedures in 48 CFR Chapter 99 (Appendix to the FAR looseleaf edition), Cost Accounting Standards. (v) Review to determine whether any cost or pricing data necessary to make the contractor’s proposal accurate, complete, and current have not been either submitted or identified in writing by the contractor. If there are such data, the contracting officer shall attempt to obtain them and negotiate, using them or making satisfactory allowance for the incomplete data. (vi) Analysis of the results of any make-or-buy program reviews, in evaluating subcontract costs (see ).
91 15.404 Proposal analysis. (d) Cost Realism Analysis.
(1) Cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror’s proposed cost estimate to determine whether the estimated proposed cost elements are realistic for the work to be performed; reflect a clear understanding of the requirements; and are consistent with the unique methods of performance and materials described in the offeror’s technical proposal. (2) Cost realism analyses shall be performed on cost-reimbursement contracts to determine the probable cost of performance for each offeror. (1) Cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror’s proposed cost estimate to determine whether the estimated proposed cost elements are realistic for the work to be performed; reflect a clear understanding of the requirements; and are consistent with the unique methods of performance and materials described in the offeror’s technical proposal. (2) Cost realism analyses shall be performed on cost-reimbursement contracts to determine the probable cost of performance for each offeror. (i) The probable cost may differ from the proposed cost and should reflect the Government’s best estimate of the cost of any contract that is most likely to result from the offeror’s proposal. The probable cost shall be used for purposes of evaluation to determine the best value. (ii) The probable cost is determined by adjusting each offeror’s proposed cost, and fee when appropriate, to reflect any additions or reductions in cost elements to realistic levels based on the results of the cost realism analysis. (3) Cost realism analyses may also be used on competitive fixed-price incentive contracts or, in exceptional cases, on other competitive fixed-price-type contracts when new requirements may not be fully understood by competing offerors, there are quality concerns, or past experience indicates that contractors’ proposed costs have resulted in quality or service shortfalls. Results of the analysis may be used in performance risk assessments and responsibility determinations. However, proposals shall be evaluated using the criteria in the solicitation, and the offered prices shall not be adjusted as a result of the analysis.
92 15.404 Proposal analysis. (d) Cost Realism Analysis.
(3) Cost realism analyses may also be used on competitive fixed-price incentive contracts or, in exceptional cases, on other competitive fixed-price-type contracts when: new requirements may not be fully understood by competing offerors, there are quality concerns, or past experience indicates that contractors’ proposed costs have resulted in quality or service shortfalls. Results of the analysis may be used in performance risk assessments and responsibility determinations. However, proposals shall be evaluated using the criteria in the solicitation, and the offered prices shall not be adjusted as a result of the analysis. (3) Cost realism analyses may also be used on competitive fixed-price incentive contracts or, in exceptional cases, on other competitive fixed-price-type contracts when new requirements may not be fully understood by competing offerors, there are quality concerns, or past experience indicates that contractors’ proposed costs have resulted in quality or service shortfalls. Results of the analysis may be used in performance risk assessments and responsibility determinations. However, proposals shall be evaluated using the criteria in the solicitation, and the offered prices shall not be adjusted as a result of the analysis. (e) Technical analysis.
93 Distinguishing Differences
Table 1: Cost Analysis vs. Cost Realism* Distinguishing Differences Cost Realism Cost Analysis Must be performed on all cost reimbursement contracts even those valued at less than $650,000. Yes No Post proposal certified cost and pricing data required Never Usually Purpose: Ensure that costs are not significantly understated Sometimes Purpose: Ensure that costs are not too high Can require additional documentation from the offeror when conducting the analysis Usually No Must verify each proposal item in analysis** Criteria selected based on the Contracting Official’s judgment Must perform analysis when adequate price competition is available No (Price analysis preferred) Intensive preliminary work required in formation of the solicitation Probable cost estimate must be developed for cost reimbursement contract *Adapted from NIH Manual : OA/OAMP/DFAS ** Evaluation of Individual Cost Estimates and Cost Realism: DCAA Contract Audit Manual: Defense Contract Audit Agency.
94 15.404 Proposal analysis. (e) Technical analysis.
(1) The contracting officer may request that personnel having specialized knowledge, skills, experience, or capability in engineering, science, or management perform a technical analysis of the proposed types and quantities of materials, labor, processes, special tooling, equipment, real property, the reasonableness of scrap and spoilage, and other associated factors set forth in the proposal(s) . . . (2) At a minimum, the technical analysis should examine the types and quantities of material proposed and the need for the types and quantities of labor hours and the labor mix. Any other data that may be pertinent to an assessment of the offeror’s ability . . . (e) Technical analysis. (1) The contracting officer may request that personnel having specialized knowledge, skills, experience, or capability in engineering, science, or management perform a technical analysis of the proposed types and quantities of materials, labor, processes, special tooling, equipment, real property, the reasonableness of scrap and spoilage, and other associated factors set forth in the proposal(s) in order to determine the need for and reasonableness of the proposed resources, assuming reasonable economy and efficiency. (2) At a minimum, the technical analysis should examine the types and quantities of material proposed and the need for the types and quantities of labor hours and the labor mix. Any other data that may be pertinent to an assessment of the offeror’s ability to accomplish the technical requirements or to the cost or price analysis of the service or product being proposed should also be included in the analysis.
95 15.404 Proposal analysis. (f) Unit prices. (g) Unbalanced pricing.
Unbalanced pricing may increase performance risk and could result in payment of unreasonably high prices. Unbalanced pricing exists when, despite an acceptable total evaluated price, the price of one or more contract line items is significantly over or understated as indicated by the application of cost or price analysis techniques. All offers with separately priced line items or subline items shall be analyzed to determine if the prices are unbalanced. An offer may be rejected if the contracting officer determines that the lack of balance poses an unacceptable risk to the Government. (f) Unit prices. (1) Except when pricing an item on the basis of adequate price competition or catalog or market price, unit prices shall reflect the intrinsic value of an item or service and shall be in proportion to an item’s base cost (e.g., manufacturing or acquisition costs). Any method of distributing costs to line items that distorts the unit prices shall not be used. For example, distributing costs equally among line items is not acceptable except when there is little or no variation in base cost. (2) Except for the acquisition of commercial items, contracting officers shall require that offerors identify in their proposals those items of supply that they will not manufacture or to which they will not contribute significant value, unless adequate price competition is expected (10 U.S.C. 2304 and 41 U.S.C. 254(d)(5)(A)(i)). Such information shall be used to determine whether the intrinsic value of an item has been distorted through application of overhead and whether such items should be considered for breakout. The contracting officer may require such information in all other negotiated contracts when appropriate. (g) Unbalanced pricing. (1) Unbalanced pricing may increase performance risk and could result in payment of unreasonably high prices. Unbalanced pricing exists when, despite an acceptable total evaluated price, the price of one or more contract line items is significantly over or understated as indicated by the application of cost or price analysis techniques. The greatest risks associated with unbalanced pricing occur when— (i) Startup work, mobilization, first articles, or first article testing are separate line items; (ii) Base quantities and option quantities are separate line items; or (iii) The evaluated price is the aggregate of estimated quantities to be ordered under separate line items of an indefinite-delivery contract. (2) All offers with separately priced line items or subline items shall be analyzed to determine if the prices are unbalanced. If cost or price analysis techniques indicate that an offer is unbalanced, the contracting officer shall— (i) Consider the risks to the Government associated with the unbalanced pricing in determining the competitive range and in making the source selection decision; and (ii) Consider whether award of the contract will result in paying unreasonably high prices for contract performance. (3) An offer may be rejected if the contracting officer determines that the lack of balance poses an unacceptable risk to the Government.
96 15.405 Price negotiation. The purpose of performing cost or price analysis is to develop a negotiation position that permits the contracting officer and the offeror an opportunity to reach agreement on a fair and reasonable price. A fair and reasonable price does not require that agreement be reached on every element of cost, nor is it mandatory that the agreed price be within the contracting officer’s initial negotiation position. The contracting officer’s primary concern is the overall price the Government will actually pay. The Government’s cost objective and proposed pricing arrangement directly affect the profit or fee objective. If, however, the contractor insists on a price or demands a profit or fee that the contracting officer considers unreasonable . . The contracting officer shall refer the contract action to a level above the contracting officer. Disposition of the action should be documented. 15.405 Price negotiation. (a) The purpose of performing cost or price analysis is to develop a negotiation position that permits the contracting officer and the offeror an opportunity to reach agreement on a fair and reasonable price. A fair and reasonable price does not require that agreement be reached on every element of cost, nor is it mandatory that the agreed price be within the contracting officer’s initial negotiation position. Taking into consideration the advisory recommendations, reports of contributing specialists, and the current status of the contractor’s purchasing system, the contracting officer is responsible for exercising the requisite judgment needed to reach a negotiated settlement with the offeror and is solely responsible for the final price agreement. However, when significant audit or other specialist recommendations are not adopted, the contracting officer should provide rationale that supports the negotiation result in the price negotiation documentation. (b) The contracting officer’s primary concern is the overall price the Government will actually pay. The contracting officer’s objective is to negotiate a contract of a type and with a price providing the contractor the greatest incentive for efficient and economical performance. The negotiation of a contract type and a price are related and should be considered together with the issues of risk and uncertainty to the contractor and the Government. Therefore, the contracting officer should not become preoccupied with any single element and should balance the contract type, cost, and profit or fee negotiated to achieve a total result—a price that is fair and reasonable to both the Government and the contractor. (c) The Government’s cost objective and proposed pricing arrangement directly affect the profit or fee objective. Because profit or fee is only one of several interrelated variables, the contracting officer shall not agree on profit or fee without concurrent agreement on cost and type of contract. (d) If, however, the contractor insists on a price or demands a profit or fee that the contracting officer considers unreasonable, and the contracting officer has taken all authorized actions (including determining the feasibility of developing an alternative source) without success, the contracting officer shall refer the contract action to a level above the contracting officer. Disposition of the action should be documented.
97 Questions???? Remaining FAR 15
Prenegotiation objectives. Certificate of Current Cost or Pricing Data. Documenting the negotiation. Price Negotiation Memorandum (PNM) 15.407 Special cost or pricing areas. Defective cost or pricing data. Make-or-buy programs. Forward pricing rate agreements. Should-cost review. Estimating systems. 15.408 Solicitation provisions and contract clauses.
98 Ok – Enough! Go home and drive safely! 
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