FAP Part 15 Flashcards
Contracting by Negotiation
Part 15
Contracting by Negotiation
Part 15 - Contracting by Negotiation
15.1 - Source Selection Processes and Techniques
Scope and Best Value Continuum (FAR 15.100 & 15.101)
Acquisition strategies must be competitive and suitable for specific circumstances (FAR 15.100).
Best value obtained through various source selection approaches; the importance of cost or price varies by acquisition type (FAR 15.101).
Tradeoff Process (FAR 15.101-1)
Appropriate when benefits of a higher priced proposal outweigh cost considerations.
Evaluation factors must be clearly stated; tradeoffs between cost/price and non-cost factors allowed; rationale for decisions must be documented (FAR 15.101-1(a)-(c)).
Lowest Price Technically Acceptable (LPTA) Process (FAR 15.101-2)
Suitable for acquisitions where minimum technical requirements are clear and no value from exceeding
these requirements is expected.
No tradeoffs allowed; award based on lowest evaluated price meeting technical standards (FAR 15.101- 2(a)-(c)).
Tiered Evaluation of Small Business Offers (FAR 15.101-3)
Tiered evaluations prohibited unless there is statutory authority to ensure fair opportunities for small businesses (FAR 15.101-3).
Oral Presentations (FAR 15.102)
Can replace or supplement written proposals to streamline source selections.
Solicitations must clearly outline oral presentation requirements; recordings or notes of presentations must
be documented (FAR 15.102(a)-(g)).
General Requirements and Documentation
Oral presentations may discuss offeror’s capabilities, past performance, work plans, etc.
Adequate evaluation by government required, with any information obtained potentially incorporated into the contract (FAR 15.102(c)).
Part 15 - Contracting by Negotiation
15.2 - Solicitation and Receipt of Proposals and Information
Scope of Subpart (FAR 15.200)
Prescribes policies and procedures for exchanging information with industry, preparing and issuing RFPs and RFIs, and receiving proposals and information.
Exchanges with Industry (FAR 15.201)
Encourages exchanges of information from the earliest identification of a requirement through receipt of proposals (FAR 15.201(a)).
Purpose is to improve understanding of government requirements and industry capabilities to enhance quality and efficiency in procurement (FAR 15.201(b)).
Techniques include industry conferences, market research, and presolicitation notices (FAR 15.201(c)).
Advisory Multi-Step Process (FAR 15.202)
Agencies may use a presolicitation notice inviting potential offerors to submit information, helping the government advise on their viability as competitors (FAR 15.202(a)).
All responses are evaluated, and each respondent is advised on their potential to compete in the resultant acquisition (FAR 15.202(b)).
Requests for Proposals (RFPs) (FAR 15.203)
Used to communicate government requirements and solicit proposals; includes government’s requirement, anticipated terms, and evaluation factors (FAR 15.203(a)).
RFPs may be issued electronically or via facsimile, considering factors like proposal size and urgency (FAR 15.203(c-d)).
Uniform Contract Format (FAR 15.204)
Facilitates preparation and use of solicitation and contract documents; not required for certain contracts like construction (FAR 15.204).
Parts I to IV detail solicitation/contract form, contract clauses, documents, and instructions for offerors (FAR 15.204-1).
Evaluation Factors and Significant Subfactors (FAR 15.304)
Evaluation must be based on factors and subfactors tailored to the acquisition, emphasizing
price or cost and quality of the product or service (FAR 15.304(a-c)).
Factors must support meaningful comparison and discrimination among proposals, and all significant factors affecting the award decision must be clearly stated in the solicitation (FAR 15.304(d)).
Proposal Evaluation (FAR 15.305)
Proposals are assessed based on their ability to meet the Government’s requirements,
considering cost or price, technical merit, and past performance (FAR 15.305(a)).
Evaluations may use various methods such as color or adjectival ratings, and numerical weights, and the evaluation process should document relative strengths, deficiencies, and risks (FAR 15.305(a)).
Part 15 - Contracting by Negotiation Introduction to FAR Subpart 15.4
- Contract Pricing
Scope of Subpart (FAR 15.400)
“This subpart prescribes the cost and price negotiation policies and procedures for pricing negotiated prime contracts (including subcontracts) and contract modifications, including modifications to contracts awarded by sealed bidding.”
Part 15 - Contracting by Negotiation Introduction to FAR Subpart 15.4
- Contract Pricing
Definitions (FAR 15.401)
Price: “Cost plus any fee or profit applicable to the contract type.”
Part 15 - Contracting by Negotiation
Overview of FAR Subpart 15.5 -
Preaward, Award, and Postaward Notifications, Protests, and Mistakes
Definitions
Day:
As defined in 33.101, typically refers to a calendar day, unless specified otherwise.
Part 15 - Contracting by Negotiation
Overview of FAR Subpart 15.5 -
Preaward, Award, and Postaward Notifications, Protests, and Mistakes
Applicability
Applicable to competitive proposals and combinations of competitive procedures. The processes in this subpart are also suggested for sole source acquisitions.
Notifications to Unsuccessful Offerors (FAR 15.503)
Preaward Notices: Notifying offerors promptly when excluded from the competitive range or the
competition entirely, specifying the reasons.
Postaward Notices: Notifying unsuccessful offerors within 3 days post-award, providing details such as the number of proposals received, the awardee’s name, and general reasons for non- selection.
Award to Successful Offeror (FAR 15.504)
A contract is awarded by furnishing the executed contract or notice of award to the successful offeror. Any differences from the proposal must be highlighted and mutually signed.
Preaward Debriefing of Offerors (FAR 15.505)
Offerors excluded before award can request a debriefing to understand the reasons behind their exclusion. This debriefing can include agency evaluations and a summary of the decision-making rationale.
Postaward Debriefing of Offerors (FAR 15.506)
Unsuccessful offerors can request a debriefing within 3 days after notification of the award. The debriefing will cover the agency’s evaluation of the offeror’s proposal, the rationale for the award decision, and other pertinent comparative information.
Protests and Mistakes (FAR 15.507 & 15.508)
Protests: Procedures for handling protests against award decisions, including new solicitations or requests for revised
proposals triggered by protests.
Mistakes: Discovery of mistakes in proposals after award are handled similarly to mistakes in bids, allowing for potential administrative corrections.
Part 15 - Contracting by Negotiation Overview of FAR Subpart 15.6
Unsolicited Proposals
* Scope and Policy (FAR 15.600, 15.602)
This subpart addresses policies and procedures for unsolicited proposals—new and innovative ideas
developed outside the Government.
Encourages submissions that don’t fall under typical solicitations, emphasizing support for innovation and unique contributions to government missions.
Part 15 - Contracting by Negotiation Overview of FAR Subpart 15.6
Unsolicited Proposals
* Definitions (FAR 15.601)
Advertising Material: Introduces a prospective contractor’s capabilities.
Commercial Product or Service Offer: Offers intended for the government’s supply system as alternatives or replacements.
Contribution: Ideas or concepts offered without expectation of further involvement.
General Criteria for Unsolicited Proposals (FAR 15.603)
Proposals must be innovative, independently originated and developed, and prepared without government
direction.
Must show potential to significantly benefit the agency’s mission.
Agency Points of Contact and Proposal Content (FAR 15.604, 15.605)
Points of contact and preferred submission methods are provided to assist potential offerors.
Proposals should include basic information (e.g., offeror’s details, proprietary data marking), technical details (e.g., project objectives and methods), and supporting information (e.g., cost, project duration).
Evaluation and Acceptance Criteria (FAR 15.606, 15.607)
Proposals undergo comprehensive evaluation to assess innovation, relevance to the agency’s mission, and
cost realism.
Favorable evaluations alone do not justify a contract; conditions include uniqueness, lack of competitive alternatives, and compliance with acquisition regulations.
Best value
The expected outcome of an acquisition that, in the government’s estimation, provides the greatest overall benefit in response to the requirement
Lowest price
technically acceptable
Best Value Continuum
Tradeoff analysis
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. The agency may consider:
Requirements
Risk
Past performance
Cost
Tradeoff Process
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.
Permits tradeoffs among cost or price and non-cost factors
Permits the government to make an award to other than the lowest priced proposal
Lowest Price Technically Acceptable
Appropriate when best value is expected to result from selection of the technically acceptable proposal with
the lowest
evaluated price.
Tradeoffs are not permitted
Award is made on the basis of lowest evaluated price of proposals meeting or exceeding the acceptability standards for noncost factors.
Oral Presentations
May substitute for or augment written information
Provide opportunity to streamline the acquisition process
May occur at any time in the acquisition process
Subject to the same restrictions as
written information, regarding time and content
Oral Presentations
provide an opportunity for dialogue among the parties.
Pre-recorded presentations are not considered oral presentations, although they may be included by offerors.
When an oral presentation includes material terms and conditions, the information shall be put in writing.
Incorporation by reference of oral statement is not permitted.
Exchanges of information among all interested parties are encouraged in order to:
Improve the understanding of government requirements and
industry capabilities
Allow potential offerors to judge whether or how they can
satisfy the government’s requirements
Enhance the government’s ability to obtain quality supplies
and services, at reasonable prices
Increase efficiency in proposal preparation, proposal evaluation, negotiation, and contract award
Techniques to promote early exchanges of information include:
Industry or small business conferences
Public hearings
Market research
One-on-one meetings with potential offerors
Presolicitation notices or conferences
Draft requests for proposals (RFPs)
Requests for information (RFls)
Request for Proposals (RFP)
Used to communicate government requirements and solicit proposals
Must describe the government’s requirement, anticipated terms and conditions, information required to be in the proposal, and evaluation factors and their importance
Request for Information (RFI)
Used when the government does not intend to award a contract, but wants to
obtain price, delivery, or market information, or capabilities, for planning
Responses are not offers
Uniform Contract Format
Unless specifically excluded elsewhere in the FAR, solicitations and resulting contracts are to be formatted in accordance with the uniform contract format outlined in Table
15-1.
Uniform Contract Format
Part I: The Schedule
A
Solicitation/contract form
Title
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
Uniform Contract Format
Part II: Contract Clauses
I
Contract Clauses
Uniform Contract Format
Part III: List of Documents, Exhibits, and Other Attachments
J
List of attachments
Uniform Contract Format
Part IV: Representation 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
Uniform Contract Format
Part I: The Schedule
Section A
Title Solicitation/contract form
Issuing agency’s name and address
Solicitation number
Date of issuance
Closing date and time
Number of pages
Purchase authority
Brief description of item
or service
Requirement for offeror to provide information
Offer expiration date
Uniform Contract Format
Part I: The Schedule
Section B
Title Supplies or services and prices/costs
Includes a brief description of the supplies or services: * Item number
* National stock number/part number fi applicable * Nouns
* Nomenclature
* Quantities
This includes incidental deliverables such as
manuals and reports
Uniform Contract Format
Part I: The Schedule
Section A
Title Solicitation/contract form
Section B
Title Supplies or services and prices/costs
Section C
Title Description/specifications/statement of work
Section D
Title Packaging and marking
Section E
Title Inspection and acceptance
Requirements are described in FAR Part 46, Quality Assurance
Uniform Contract Format
Part I: The Schedule
Section A
Title Solicitation/contract form
Section B
Title Supplies or services and prices/costs
Section C
Title Description/specifications/statement of work
Section D
Title Packaging and marking
Section E
Title Inspection and acceptance
Section F
Title Deliveries or performance
Requirements are described in FAR 11.4, Delivery or Performance Schedules
Uniform Contract Format
Part I: The Schedule
Section A
Title Solicitation/contract form
Section B
Title Supplies or services and prices/costs
Section C
Title Description/specifications/statement of work
Section D
Title Packaging and marking
Section E
Title Inspection and acceptance
Section F
Title Deliveries or performance
Section G
Title Contract administration data
Section H
Title Special contract requirements
Uniform Contract Format
Parts Il and Il
Section I
Title Contract clauses
Part III: List of documents, exhibits, and other attachments
Section J
Title Contract clauses
Uniform Contract Format
Parts IV: Representation and Instructions
Section K
Title Evaluation factors for award
Upon award, contracting officers shall not physically include Part IV in the resulting contract, but shall retain it in the contract file.
Uniform Contract Format
Parts IV: Representation and Instructions
Section K
Title Representations, certifications, and other statements of offerors or respondents
Section L
Title Instructions, conditions, and notices to offerors or respondents
Includes solicitation provisions and other information and instructions not required elsewhere for preparing responses to RFPs or RFIs
May contain specific format instructions for proposals or information
May specify further organization of parts, such as:
* Administrative
* Management * Technical
* Past performance
* Certified cost or pricing data or data other than cost or pricing data
Submission, Modification, and Revision of Proposals
The solicitation is to be amended when (either before or after receipt of
proposals) the government changes its requirements or terms and conditions.
Proposals and modifications received after the exact time specified are
“late” and shall be considered only fi they
are received before award is
made.
If no time is specified in the solicitation, the time for receipt is 4:30 p.m., local time, for the designated government office on the date that proposals are due.
Withdrawal of Proposals
Oral proposals
May be withdrawn by oral notice.
The contract files is updated
to say that the proposal was withdrawn.
Withdrawal of Proposals
Written proposals
Must be withdrawn by written notice.
If electronic, the file is deleted.
Otherwise, the proposal is returned
Source selection
The process wherein the requirements, facts, recommendations, and policies relevant to an award decision in a competitive procurement of a system/project are
examined and the decision made
The objective of source selection is to select the proposal that represents the best value.
The basis for award decision is tailored to each specific acquisition and is based on the evaluation of factors and significant subfactors.
Source Selection Responsibilities
Source selection authority (SSA)
The person who makes the final source selection in a competition
Responsible for ensuring that the entire source selection process is properly and efficiently conducted
While the SSA may use reports and analyses prepared by
others, the source selection decision must represent the SSA’s independent judgment.
The contracting officer is designated as the source selection authority, unless the agency head appoints another individual.
The SSA establishes an evaluation team.
The SSA approves the source selection strategy and, if applicable, the acquisition plan.
The SSA ensures that the requirements are consistent.
The SSA ensures that only the evaluation factors in the solicitation are used for evaluating proposals.
The CO is responsible for answering questions from prospective contractors about the solicitation.
Proposal Evaluation
The award decision is based on evaluation factors and significant subfactors that are tailored to the acquisition.
Evaluation factors and significant subfactors must represent
the key areas of importance and emphasis ot be considered ni the source selection decision, and support meaningful comparison and discrimination between and among competing proposals.
The evaluation factors to apply to an acquisition, and their relative importance, are within the discretion of acquisition officials, subject to the following requirements:
Price or cost to the government shall always be evaluated
The quality of the product or service shall be addressed through one or more noncost evaluation factors
Past performance shall be evaluated (above the SAT)
Solicitations involving bundling and consolidation with opportunity for subcontracting shall include proposed small business subcontracting particpation
Telecommuting shall be permitted fi not specifically prohibited
Evaluation Systems
Competitive proposals are evaluated and assessed using the factors and subfactors specified in the solicitation. Proposal
evaluation may be conducted using any rating method or combination of methods, including:
- Color or adjectival ratings
- Numerical weights
- Ordinal rankings
Price Reasonableness
Normally, competition establishes price reasonableness.
However, in limited situations, a cost analysis may be
necessary to establish reasonableness of an otherwise successful offeror’s price.
Exchanges with Offerors
Clarifications are limited exchanges between the government
and offerors that may occur when award without discussions is contemplated.
* An example would be providing offerors the opportunity to resolve minor or clerical errors or to clarify certain aspects of their proposals.
Communications are exchanges between the government and
offerors after receipt of proposals, leading to establishment of the competitive range.
Exchanges with Offerors
Negotiation
Aprocess between buyers and sellers seeking to reach mutual agreement on a matter of common concern through factfinding, bargaining, and persuasion
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
Exchanges with Offerors
Competitive range
A range of acceptable standards determined by the contracting officer on the basis of price, cost, or technical factors
The competitive range is comprised of all of the most highly rated proposals, unless the range is further reduced for purposes of efficiency
The contracting officer must conduct written or verbal
discussions with al responsible offerors that submit proposals within the competitive range.
Limits on Exchanges
Government personnel involved in an acquisition shall not engage in conduct that:
Favors one offeror over another,
Reveals an offeror’s technical solution or any information that would compromise an
offeror’s intellectual property,
Reveals the names of individual providing reference information about an offeror’s past performance,
Knowingly furnishes source selection information, or
Reveals an offeror’s price
Elimination from Competition
Debriefing
An explanation given by government personnel to an offeror detailing the reasons its proposal was unsuccessful
Will contain, at a minimum:
* Significant weaknesses or deficiencies in the proposal
* Overall evaluated cost or price, and technical rating, of the successful and this offeror
* Overall rankings of all offerors
* Summary of rationale for award
* Answers to questions about source selection procedure
Elimination from Competition
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.
The contracting officer may request or allow proposal revisions ot clarify and document understandings reached during negotiations.
Elimination from Competition
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-
of 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.
ContractPricing
Price
Cost, plus any fee or profit applicable to the contract type
Contract price will depend on the contract type
selected. Price may equal cost (cost contract) or cost plus a profit or fee (cost-plus).
The government’s pricing policy is to purchase from responsible sources at fair and reasonable prices.
In establishing reasonableness, contracting officers should minimize the information necessary.
Cost and Pricing Data
Cost or pricing data
All information that, as of the date of price agreement or, fi applicable, an earlier date agreed upon between the parties that are as close as practicable to the date
of agreement on price, prudent buyers and sellers would reasonably expect to affect price negotiations significantly
Cost and pricing data is factual, not judgmental, and is verifiable.
Cost and Pricing Data
Certified cost or pricing data
Cost or pricing data that were required to be submitted ni accordance with FAR 15.403-4-5 and have been certified, or are required to be certified, in accordance with FAR 15.406-2
The certification states that, to the best of the person’s knowledge and belief, the cost or pricing data are accurate, complete, and current as of the date certain before contract award
Prohibition on obtaining certified cost or pricing data
Truthful Cost or Pricing Data
41 U.S. Code Chapter 35
Formerly the Truth in Negotiations Act (TINA)
Requires offers to submit certified cost or pricing data if a procurement exceeds a certain threshold and none of the exceptions to certified cost or pricing data requirements applies
Cost and Pricing Data
Other than cost or pricing data
Any type of information that is not required to be certified per FAR 15.406-2 and is necessary to determine price reasonableness or realism
price information
sales information
cost information
Prohibition on obtaining certified cost or pricing data
Truthful Cost or Pricing Data
Thresholds
750k prime contracts awarded before July 1 2018
2 million prime contracts awarded after July 1 2018
Prohibition on obtaining certified cost or pricing data
Certified Cost or Pricing Data is not obtained:
To support any action where
* Prices are set by law or regulation,
* The acquisition is for commercial items (or modifications
to commercial items), or
* Prices are based on adequate price competition,
* A waiver has been granted.
For any acquisition at or below the Simplified Acquisition Threshold
The objective of proposal analysis is
to ensure that the final price agreed upon is fair and reasonable.
Techniques used for proposal analysis include
Price analysis
Cost analysis
Cost realism analysis
Technical analysis
Field pricing assistance
The analysis of contractor pricing proposals by any or all field technical and other specialists
Appropriate when information is inadequate to determine a fair and reasonable price.
The request should reflect the minimum essential supplementary information needed ot conduct a technical or cost or pricing analysis.
Prime contractors or subcontractors shall conduct appropriate cost or price analyses to establish
the reasonableness of proposed subcontract prices and,
If required, submit subcontractor certified cost or pricing data to the government as part of its own certified cost or pricing data.
The contractor shall submit certified cost or pricing data to the
government for subcontracts that are the lower of either:
$15 million or more; or
More than the pertinent certified cost or pricing data threshold and more than 10% of the prime’s proposed price
Profit does not necessarily represent net income to the contractor.
When the price negotiation is not based on cost analysis,
contracting officers are not required to analyze profit.
Profit does not necessarily represent net income to the contractor.
Structured approaches for determining profit
provide a discipline for ensuring that all relevant factors are considered.
Agencies making noncompetitive contract awards over $100,000 totaling $50 million per year shall use a structured approach.
Agencies may use another agency’s
structured approach.
Profit does not necessarily represent net income to the contractor.
The objectives are:
To stimulate efficient and effective contract performance,
To attract the best capabilities of qualified small and large businesses, and
To maintain a viable industrial base.
The following limitations on profit are imposed by 10 U.S.C. 2306(d) and 41 U.S.C. 3905:
For experimental, developmental, or research work performed under a cost- plus-fixed-fee contract,
the fee shall not exceed 15 percent of the contract’s estimated cost, excluding fee.
The following limitations on profit are imposed by 10 U.S.C. 2306(d) and 41 U.S.C. 3905:
For architect-engineer services for public works or utilities, the contract price or the
estimated cost and fee for production and
delivery of designs, plans, drawings, and specifications shall not
exceed 6 percent of the estimated cost of construction of the
public work or utility, excluding fees
The following limitations on profit are imposed by 10 U.S.C. 2306(d) and 41 U.S.C. 3905:
For other cost-plus-fixed-fee contracts, the fee
the fee shall not exceed 10 percent of the contract’s estimated cost, excluding fe.
Documenting the Negotiations
Price Negotiation Memorandum (PNM)
Purpose of the negotiation
Description of the acquisition
Status of contractor’s systems (purchasing, estimating, accounting, compensation)
Prenegotiation objectives and negotiated positions, including profit or fee
Make-or-Buy Programs
The prime is responsible for managing contract performance, including, planning, placing, and ensure
the lowest overall cost and technical risk to the government.
Make-or-Buy Programs
When required, the government may reserve the right to review and agree on the make-or-buy program to ensure:
Negotiation of reasonable prices,
Satisfactory performance, or
Implementation of socioeconomic policies.
Defective cost or pricing data
Certified cost or pricing data subsequently found to have been inaccurate, incomplete, or not current as of the effective date of the certificate
If found before agreement on price, the CO shall:
Immediately notify the prospective contractor
Consider either:
* New data submitted to correct the deficiency, or
* The defect, when negotiating the contract price
* Document adjustment in the price negotiation memorandum
Defective cost or pricing data
Certified cost or pricing data subsequently found to have been inaccurate, incomplete, or not current as of the effective date of the certificate
If found after award, the government is entitled to:
A price adjustment of any significant amount by which the price was increased because of the defective data
Recovery of any overpayment, plus interest on the overpayments
A penalty amount, on certain overpayments
Preaward and Postaward Notifications
Must be requested in writing within three days after:
Pre-award: Notification of exclusion from the competition
Post-award: Notice of contact award
Debriefings can be conducted orally, in writing, or by any other method acceptable to the contracting officer.
Preaward Debriefs: “Shalls”
Preaward debriefs must include:
The agency’s evaluation of significant elements in the offeror’s proposal,
A summary of the rationale for eliminating the offeror from the
competition, and
Reasonable responses to relevant questions about whether
source selection procedures contained in the solicitation,
applicable regulations, and other applicable authorities were followed in the process of eliminating the offeror from competition.
Preaward Debriefs: “Shall Nots”
Preaward debriefs shall not disclose
The number of offerors,
The identity of the offerors,
The content of other offeror’s proposals,
The ranking of the offerors,
The evaluation of other offerors,
Point-by-point comparisons of the proposal with those of other offerors,
Trade secrets, or privileged or confidential manufacturing processes,
Commercial or financial information that is privileged or confidential, or
The names of the individuals providing reference information about an offeror’s past performance.
Postaward Debriefs: “Shalls”
Postaward debriefs must include:
The government’s evaluation of the significant weaknesses or deficiencies in
the offeror’s proposal, fi applicable,
The overall evaluated cost or price and technical rating, fi applicable, of * The successful offeror and
* This offeror, and
* Past performance information on this offeror,
For commercial items, the make and model of the item to be delivered,
The overall ranking of all offerors, when any ranking was developed by the agency during the source selection,
A summary of the rationale for award, and
Reasonable responses to relevant questions about whether source selection procedures in the solicitation, applicable regulations, and other applicable authorities were followed
Postaward Debriefs: “Shall Nots”
Postaward debriefs shall not disclose:
Point-by-point comparisons of the proposal with those of other offerors,
Trade secrets, or privileged or confidential manufacturing processes,
Commercial or financial information that is privileged or
confidential (including cost breakdowns, profit, indirect cost rates, or similar information), or
The names of the individuals providing reference information about an offeror’s
past performance.
Unsolicited proposal
A written proposal that is submitted to an agency on the submitter’s initiative for the purpose of obtaining a contract with the government, and which is not in response to a formal or informal request
The agency shall return an unsolicited proposal to the offeror if its substance:
Is available to the government without restriction from another source;
Closely resembles a pending competitive acquisition requirement;
Does not relate to the activity’s mission; or
Does not demonstrate an innovative and unique method, approach, or
concept, or is otherwise not deemed a meritorious proposal.
Government personnel shall not use any part of an unsolicited proposal as the basis, or part of the basis
for a solicitation or in other negotiations unless the
offeror is notified of and agrees to the intended use.
FAR Part 15: Contracting by Negotiation
This part prescribes policies and procedures governing competitive and
noncompetitive
(sole source)
negotiated acquisitions.
A contract awarded using other than sealed bidding procedures is a negotiated
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
LPTA should be avoided in circumstances that would deny the government the benefits of cost and technical tradeoffs in the source selection process and may be used only when specific criteria are met:
The agency requirements.
can describe minimum
There would be no benefit to exceeding the minimum requirements.
There will be minimal judgement needed to choose one proposal over another.
There is confidence that another selection method would not yield a higher benefit.
The use of LPTA has been justified in the contract file.
The lowest price reflects the full lifecycle of costs related to the acquisition.
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 RFI’s
RFPs are used to communicate government requirements to prospective contractors and to solicit proposals. RFPs for competitive acquisitions must describe
the government’s requirement, anticipated terms and conditions that will apply to the contract, information required to be in the offeror’s proposal, and factors and significant subfactors that will be used to evaluate the proposal and their relative importance.
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.
RFPs for noncompetitive acquisitions should be tailored to remove unnecessary information and requirements.
Verbal 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 FAR 5.202 (e.g., perishable items and support of contingency operations or other emergency situations).
Use of an verbal RFP does not relieve the contracting officer from complying with other FAR requirements.
Unless specifically excluded elsewhere in the FAR, solicitations and resulting contracts are to be formatted in accordance with the uniform contract format outlined in Table 15-1. Solicitations using the uniform contract format shall include
Part I (The Schedule, which includes sections A through
H);
Part II (Contract Clauses, section 1);
Part III (List of Documents, Exhibits, and Other Attachments, section J); and
Part IV (Representations and Instructions, sections K through M). Upon award, contracting officers shall not physically include
Part IV in the resulting contract, but shall retain it in the contract file. Section K shall be incorporated by reference in the contract.
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. Multiple-award contracts for the same or similar services, where the government intends to award a contract to each qualifying offeror, are not required to have price or cost as an evaluation factor. If cost and price are not evaluated, for contract award, they must be considered for orders under that contract.
- The quality of the product or service shall be addressed in every source selection throughconsideration of one or more noncost evaluation factors such as past performance, compliance with solicitation requirements, technical excellence, management capability, personnel qualifications, and prior experience.
- Past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold.
- 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)(i1)). - 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
Clarifications
are limited exchanges between the government and offerors that may occur when award without discussions is contemplated.
An example would be providing offerors the opportunity to resolve minor or clerical errors or to clarify certain aspects of their proposal (i.e., the relevance of an offeror’s past performance information).
If discussions are contemplated, the contracting officer must establish a competitive range comprised of the most highly rated proposals. Communications, then, are exchanges between the government and offerors after receipt of proposals, leading to establishment of the competitive
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.
When negotiations are conducted in a competitive acquisition, they take place after establishment of the competitive range and are called discussions.
Discussions
are tailored to each offeror’s proposal and must be conducted by the contracting officer with each offeror within the competitive range.
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.
At a minimum, the contracting officer must 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 is not required to discuss any area the offers proposal could be improved
Exceptions to the cost and pricing data requirement include when
when prices are based on adequate price competition,
when prices are set by law or regulation,
or for items that meet the commercial item definition in 2.101.
In these instances, the contracting officer shall not require submission of cost or pricing data to support any action (contracts, subcontracts, or modifications), but may require information other than cost or pricing data to support a determination of price reasonableness or cost realism.
A price is considered to be based on adequate price competition
if two or more responsible offerors, competing independently, submit priced offers that satisfy the government’s expressed requirements.
The award will be made to the offeror whose proposal represents the best value where price is a substantial factor, and there is no finding that the price of the otherwise successful offeror is unreasonable.
The requirement of adequate price competition can still be met even though only one offer is received from a responsible offeror if:
- The contracting officer can reasonably conclude that the offer was submitted with the expectation of competition and this determination has been approved at a level above the contracting officer. Adequate price competition is based on the premise that there is sufficient amount of competition to ensure that an award price is fair and reasonable. This exception does not apply to DOD, NASA, or the Coast Guard.
- Price analysis clearly demonstrates that the proposed price is reasonable in comparison with current or recent prices for the same or similar items, or adjusted to reflect changes in market conditions, economic conditions, quantities, or terms and conditions under contracts that resulted from adequate price competition.
The head of the contracting activity (HCA) may, without power of delegation, waive the requirement for submission of certified cost or pricing data in exceptional cases. The authorization for the waiver and the supporting rationale shall be in writing.
The HCA may consider waiving the requirement if the price can be determined to be fair and reasonable without submission of certified cost or pricing data.
Consequently, award of any lower-tier subcontract expected to exceed the certified cost or pricing data threshold requires the submission of cost or pricing data unless an exception otherwise applies,
or the wavier specifically includes that subcontract and the rationale supporting the waiver for that subcontract.
Cost analysis (the review and evaluation of the separate cost elements and profit in an offeror’s or contractor’s proposal 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) is
used to evaluate the reasonableness of individual cost elements when cost or pricing data are required
Price analysis (the process of examining and evaluating a proposed price without evaluating its separate cost elements and proposed profit)
is used when certified cost or pricing data are not required.
However, cost analysis may also be used to evaluate information other than certified cost or pricing data to determine cost reasonableness or cost realism.
The preferred techniques for price analysis are comparison of prices received in response to the solicitation and comparison with previously proposed prices with current proposed prices for the same or similar items, use of parametric estimating methods, comparison with competitive published price lists, and comparison of proposed prices with independent government cost estimates.
COMMERCIAL ITEMS
At a minimum, the contracting officer must use price analysis to determine whether the price is fair and reasonable when acquiring commercial items.
The fact that a price is included in a catalog does not, in and of itself, make the price fair and reasonable.
If the contracting officer
cannot determine whether the offered price of a commercial item 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.
SUBCONTRACT PRICING CONSIDERATIONS
(FAR 15.404-3)
The contracting officer is responsible for the
determination of a fair and reasonable price for the prime contract, including subcontracting costs.
The contracting officer should consider whether a contractor or subcontractor has an approved purchasing system, has performed cost or price analysis of proposed subcontractor prices, or has negotiated the subcontract prices before negotiation of the prime contract, in determining the reasonableness of the prime contract price.
This does not relieve the contracting officer from the responsibility to analyze the contractor’s submission, including the subcontractor’s cost or pricing data.
The prime contractor or subcontractor shall conduct appropriate cost or price analyses to establish the reasonableness of proposed subcontract prices and, if required, submit subcontractor certified cost or pricing data to the government as part of its own certified cost or pricing data.
Any contractor or subcontractor that is required to submit certified cost or pricing data also shall obtain and analyze certified cost or pricing data
If, before agreement on price, the contracting officer learns that any certified cost or pricing data submitted are inaccurate, incomplete, or noncurrent, the contracting officer shall
immediately bring the matter to the attention of the prospective contractor, whether the defective data increase or decrease the contract price.
The contracting officer shall consider any new data submitted to correct the deficiency, or consider the inaccuracy, incompleteness, or noncurrency of the data when negotiating the contract price.
The price negotiation memorandum shall reflect the adjustments made to the data or the corrected data used to negotiate the contract
The contracting officer shall not negotiate a price or fee that exceeds the following statutory limitations:
For experimental, developmental, or research work performed under a cost-plus-fixed-fee contract, the fee shall not exceed 15 percent of the contract’s estimated cost, excluding fee.
For architect-engineer services for public works or utilities, the contract price or the estimated cost and fee for production and delivery of designs, plans, drawings, and specifications shall not exceed 6 percent of the estimated cost of construction of the public work or utility, excluding fees.
For other cost-plus-fixed-fee contracts, the fee shall not exceed 10 percent of the contract’s estimated cost, excluding fee.
If, after award, certified cost or pricing data are found to be inaccurate, incomplete, or non-current as of the date of final agreement on price or an earlier date agreed upon by the parties given on the contractor’s or subcontractor’s Certificate of Current Cost or Pricing Data, the government is entitled
to a price adjustment, including profit or fee, of any significant amount by which the price was increased because of the defective data.
This entitlement is ensured by including the appropriate clauses prescribed in 15.408(b) and (c).
In addition to the price adjustment, the government is entitled to recovery of any overpayment plus interest on the overpayments.
The government is also entitled to penalty amounts on certain overpayments
Post-award notice must be provided to unsuccessful offerors within three days of contract award. The notice shall list the following:
- The number of offerors solicited;
- The number of proposals received;
- The name and address of each offeror receiving an award;
- The items, quantities, and any stated unit prices of each award, or if impractical, the total contract price. However, the items, quantities, and any stated unit prices of each award shall be made publicly available upon request; and
- In general terms, the reason(s) the offeror’s proposal was not accepted, unless the price information readily reveals the reason.
In no event shall an offeror’s cost breakdown,profit, overhead rates, trade secrets, manufacturing processes and techniques, or other confidential business information be disclosed to any other offeror.
The contracting officer shall award a contract to the successful offeror by furnishing the executed contract or other notice of the award to that offeror.
Debriefings may be done verbally, in writing, or by any other method acceptable to the contracting officer.
PRE-AWARD DEBRIEFINGS (FAR 15.505)
- An offeror may request a pre-award debriefing by submitting a written request for debriefing to the contracting officer within three days after receipt of a notice of exclusion from the competition.
- Debriefings must include the agency’s evaluation of significant elements in the offeror’s proposal; a summary of the rationale for eliminating the offeror from the competition; and reasonable responses to relevant questions about whethersource selection procedures contained in the solicitation, applicable regulations, and other applicable authorities were followed in the process of eliminating the offeror from the competition.
- Debriefings shall not disclose the number of offerors; the identity of other offerors; the content of other offerors’ proposals; the ranking of other offerors; the evaluation of other offerors; point-by-point comparisons of this offeror’s proposal with those of other offerors; trade secrets; privileged or confidential manufacturing processes and techniques; commercial or financial information that is privileged or confidential, including cost breakdowns, profit, indirect cost rates, and similar information; and the names of individuals providing reference information about an offeror’s past performance.
POST-AWARD DEBRIEFINGS (FAR 15.506)
- An offeror may request a post-award debriefing by submitting a written request for debriefing to the contracting officer within three days after receipt of a notice of contract award. To the maximum extent practicable, the debriefing should occur within five days after receipt of the written request.
- Debriefing
must include the government’s
evaluation of the significant weaknesses or deficiencies in the offeror’s proposal, if applicable; the overall evaluated cost or price and technical rating, if applicable, of the successful offeror and this offeror, and past performance information on this offeror; the overall ranking of all offerors, when any ranking was developed by the agency during the source selection; a summary of the rationale for award; for commercial items, the make and model of the item to be delivered by the successful offeror; and reasonable responses to relevant questions about whether source selection procedures containedin the solicitation, applicable regulations, and other applicable authorities were followed. - Debriefings shall not include point-by-point comparisons of this offeror’s proposal with those of other offerors; trade secrets; privileged or confidential manufacturing processes and techniques; commercial or financial information that is privileged or confidential, including cost breakdowns, profit, indirect cost rates, and similar information; and the names of individuals providing reference information about an offeror’s past performance.
An UNSOLICITED PROPOSAL is a written proposal for a new or innovative idea that is submitted to an agency on the initiative of the offeror for the purpose of obtaining a contract with the government, and that is not in response to a request for proposals, broad agency announcement, small business innovation research topic, small business technology transfer research topic,program research and development announcement, or any other government-initiated solicitation or program.
Submission of new and innovative ideas in response to some type of government-initiated solicitation or program is preferred. Only when new or innovative ideas fall outside topic areas publicized under those programs or techniques can they be submitted as unsolicited proposals.
Agencies shall establish procedures for controlling the receipt, evaluation, and timely disposition of unsolicited proposals consistent with the requirements of this subpart. The procedures shall include controls on the reproduction and disposition of proposal material, particularly data identified by the offeror as subject to duplication, use, or disclosure restrictions.
A favorable comprehensive evaluation of an unsolicited proposal does not justify awarding a contract without providing for full and open competition. The agency point of contact shall return an unsolicited proposal to the offeror, citing reasons, when its substance:
*Is available to the government without restriction from another source;
* Closely resembles a pending competitive acquisition requirement;
* Does not relate to the activity’s mission; or
* Does not demonstrate an innovative and unique method, approach, or concept, or is otherwise not deemed a meritorious proposal.
The contracting officer may commence negotiations on a sole source basis only when:
* An unsolicited proposal has received a favorable comprehensive evaluation;
* A justification and approval has been obtained for research proposals;
* The agency technical office sponsoring the contract furnishes the necessary funds; and* The contracting officer has complied with the synopsis requirements. (5.202)
Part 15 - Contracting by Negotiation
FAR 15.0 - Contracting by Negotiation:
Enhancing Transparency in Acquisition
Purpose:
Establishes the framework for negotiated procurement to ensure fair and transparent acquisition processes (FAR 15.000).
Part 15 - Contracting by Negotiation
FAR 15.0 - Contracting by Negotiation:
Enhancing Transparency in Acquisition
Key Elements:
Competitive Range Determination: Ensures transparency in evaluating
proposals (FAR 15.306(c)).
Documentation Requirements: Mandates detailed records of negotiations and decisions to maintain transparency (FAR 15.406-3).
Part 15 - Contracting by Negotiation
FAR 15.0 - Contracting by Negotiation:
Enhancing Transparency in Acquisition
Tranparency Impact
Facilitates accountability and visibility in contract negotiations and award decisions.
Part 15 - Contracting by Negotiation
Subpart 15.1 - Source Selection Processes and Techniques:
Promoting Fairness and Openness
Purpose:
Provides policies and procedures for source selection to ensure the best value while maintaining transparency (FAR 15.100).
Part 15 - Contracting by Negotiation
Subpart 15.1 - Source Selection Processes and Techniques:
Promoting Fairness and Openness
Key Techniques
Evaluation Criteria: Clearly defined and publicized criteria to ensure fair
competition (FAR 15.304).
Source Selection Plan: Detailed plan outlining evaluation process to promote transparency (FAR 15.303).
Part 15 - Contracting by Negotiation
Subpart 15.1 - Source Selection Processes and Techniques:
Promoting Fairness and Openness
Transparency Impact
Ensures all offerors are aware of how proposals will be evaluated and selected.
Part 15 - Contracting by Negotiation
15.2 - Solicitation and Receipt of Proposals and Information
Subpart 15.2 - Solicitation and Receipt of Proposals and Information: Ensuring Transparent Processes
Purpose:
Establishes guidelines for issuing solicitations and receiving proposals to ensure transparency (FAR 15.200).
Part 15 - Contracting by Negotiation
15.2 - Solicitation and Receipt of Proposals and Information
Subpart 15.2 - Solicitation and Receipt of Proposals and Information: Ensuring Transparent Processes
Key Practices
Publicizing Solicitations: Ensures wide dissemination of solicitations to reach
all potential offerors (FAR 15.203).
Receiving Proposals: Standardized processes for receipt and handling of proposals to maintain fairness (FAR 15.207).
Part 15 - Contracting by Negotiation
15.2 - Solicitation and Receipt of Proposals and Information
Subpart 15.2 - Solicitation and Receipt of Proposals and Information: Ensuring Transparent Processes
Transparency Impact:
Ensures all potential contractors have equal access to solicitation information and opportunities.
Part 15 - Contracting by Negotiation
Subpart 15.3 - Source Selection: Maintaining Transparency in Evaluations
Purpose:
Provides the framework for evaluating and selecting the best proposals in a transparent manner (FAR 15.300).
Part 15 - Contracting by Negotiation
Subpart 15.3 - Source Selection: Maintaining Transparency in Evaluations
Evaluation Process
Proposal Evaluation: Detailed and documented evaluation process to ensure
fairness and transparency (FAR 15.305).
Communication with Offerors: Open and clear communication throughout the selection process (FAR 15.306).
Part 15 - Contracting by Negotiation
Subpart 15.3 - Source Selection: Maintaining Transparency in Evaluations
Transparency Impact
Ensures a fair and open evaluation process where offerors understand how decisions are made.
Part 15 - Contracting by Negotiation
Subpart 15.4 - Contract Pricing: Transparency in Cost and Pricing Data
Purpose:
Establishes policies for obtaining and analyzing cost or pricing data to ensure transparency (FAR 15.400).
Part 15 - Contracting by Negotiation
Subpart 15.4 - Contract Pricing: Transparency in Cost and Pricing Data
Kety Elements
Cost and Pricing Data: Requirement for accurate and complete data to support
fair pricing (FAR 15.404-2).
Price Negotiation Memorandum: Detailed documentation of the negotiation process (FAR 15.406-3).
Part 15 - Contracting by Negotiation
Subpart 15.4 - Contract Pricing: Transparency in Cost and Pricing Data
Transparency Impact
Ensures fair pricing through thorough analysis and documentation of cost data.
Part 15 - Contracting by Negotiation
Subpart 15.5 - Pre-award, Award, and Post-award Notifications, Protests, and Mistakes: Ensuring Openness and Fairness
Purpose: Outlines procedures for notifications, protests, and handling mistakes to ensure transparency (FAR 15.500).
KeyPractices:
* Pre-award Notices: Informing offerors of selection status to maintain openness
(FAR 15.503).
* Handling Protests: Clear procedures for addressing protests to ensure fairness (FAR 15.505).
Transparency Impact: Ensures all stakeholders are informed and have recourse in case of disputes or errors.
Part 15 - Contracting by Negotiation
Subpart 15.6 - Unsolicited Proposals: Promoting Transparency in Reviewing and Accepting Proposals
Purpose: Provides procedures for handling unsolicited proposals to ensure transparency and fairness (FAR 15.600).
KeyPractices:
* Evaluation of Proposals: Standardized process for evaluating unsolicited
proposals (FAR 15.606).
* Communication: Clear communication with proposers throughout the evaluation process (FAR 15.607).
Transparency Impact: Ensures a fair and transparent process for considering and evaluating unsolicited proposals.
