DLAH 4105.3
MMP
26 Jul 90
DLA-P
26 Jul 90
BUYING BEST VALUE THROUGH SOURCE
SELECTION
A HANDBOOK FOR DLA CONTRACTING
OFFICES
(Supplementation
is permitted at all levels.)
This handbook provides technical guidance for the use of a
variety of source selection and buy best value techniques. It provides
information for contracting, supply, technical and quality personnel to use in
developing an understanding of alternate contracting approaches. Buying best
value is an integral part of our Total Quality Management (TQM) efforts as a
means of achieving quality oriented supplier relationships in an effort to
better serve our customers.
This handbook is structured to provide definitions, discussions,
regulatory references, and recommendations to assist in achieving the optimum
use of the source selection and buy best value techniques available. The
handbook will be revised as policy changes and technical improvements are
introduced. Users of this publication are encouraged to submit recommended
changes and comments to improve the publication, through channels, to HQ DLA,
ATTN: DLA-PPR.
BY ORDER OF THE DIRECTOR
GARY
C. TUCKER
Colonel,
USA
Staff
Director, Administration
DISTRIBUTION 3
COORDINATION: DLA-G, DLA-A, DLA-LR,
DLA-LP, DLA-KW, DLA-J, DLA-U,
DLA-S, DLA-Q, DLA-ZR
BAFO
Best and Final Offer
CAO Contract
Administration Office
CLIN
Contract Line Item Number
COMP GEN Comptroller General
CONTRLTR Contract Letter
CPD Comptroller
General Procurement Decision
DASD(P) Deputy
Assistant Secretary of Defense, Procurement
DCMC
Defense Contract Management Command
DFARS DOD
Federal Acquisition Regulation Supplement
DLAR
Defense Logistics Agency Acquisition Regulation
DoD Department
of Defense
DoDD
Department of Defense Directive
ESI Educational
Services Institute
FAR Federal
Acquisition Regulation
FOUO
For Official Use Only
FSC Federal
Supply Class
GAO General
Accounting Office
HCA Head of the
Contracting Activity
IDC Indefinite
Delivery Contract
IQC Indefinite
Quantity Contract
KSAs
Knowledge, Skills, and Abilities
OSD Office of
the Secretary of Defense
PQDR
Product Quality Discrepancy Report
QAP Quality
Assurance Provisions
ROD Report of
Discrepancy
SBA Small
Business Administration
SSA
Source Selection Authority
SSAC
Source Selection Advisory Council
SSDD
Source Selection Decision Document
SSEB
Source Selection Evaluation Board
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APPENDICES |
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A-1 |
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B. Suggestions
for Those Who Write Instructions for the Preparation of Large Government
Proposals |
B-1 |
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C. Memoranda
on Cost or Pricing Data Requirements in Competitive Procurements |
C-1 |
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D-1 |
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E. Sample Certification
Formats for Safeguarding Sensitive Information |
E-1 |
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F-1 |
In its Report to the President on Defense Acquisition in April
1986, the President's Blue Ribbon Commission on Defense Management (the Packard
Commission), recommended that DoD increase the use of commercial style
competition by emphasizing quality and established performance as well as
price. For too many years, DoD had held competition on the basis of price alone
as the most efficient way to purchase its nondevelopmental items. Factors other
than price were considered only when procuring items or services where the
Government's needs could not be adequately described by a specification (i.e.,
major weapons systems and research and development). Under other procurements,
the rule was to purchase the Government's minimum needs and avoid "gold
plating." The concept that the Government may get a better bargain by
purchasing other than its minimum needs or by buying from other than the low
priced offeror was contrary to the existing policies and political environment.
Consideration of a prospective contractor's ability to perform was generally
limited to a positive or negative responsibility determination, and this
decision could be reversed by the Small Business Administration (SBA) if the
offeror was a small business.
What
the Packard Commission report recommended is really no different than what
individuals consider when making their everyday, personal purchases. A look at
the shelves of any department or grocery store reveals that the American
consumer must make value judgments among a multitude of products which will
meet the same basic function or need. These products command different prices
based upon their features and their perceived quality. Whether or not
additional features or quality is worth the extra cost depends upon the needs
and circumstances of the consumer.
The
Packard Commission also recommended that DoD establish long-term commitments
with reliable suppliers. Factors such as reliability, past performance, and a
demonstrated capability to perform also apply to some of these buying
decisions. Under certain circumstances, the decision regarding who we buy from
is as important as the decision of what to buy. The risk involved in buying a
used car from a new dealer with little or no facilities is greater than the
same purchase from an established dealer with ties to the community. Likewise,
consumers tend to repeat business with people who have treated them well in the
past. They are generally willing to pay more to a business which they know is
reliable than to one whose reliability is questionable.
These
value decisions are usually accomplished on an intuitive level by the consumer.
Adapting these decisions to Government procurement, where they are held to a
higher level of responsibility and are subject to public scrutiny, requires
that such decisions and the criteria by which they are made be fair, rational,
and, of course, well documented.
The
multitude of source selection techniques discussed in this handbook is proof
that we have come a long way in applying business judgment to source selection
decisions. Fortunately, the Comptroller General (Comp Gen) has been very
supportive and has repeatedly refused to second guess the value judgments of
the source selection authority. The lack of specific regulatory requirements
and procedures has also encouraged the development of new methods for buying
best value by allowing individual agencies broad latitude in establishing their
source selection procedures. DLA contracting offices have played an important role
in developing and adapting source selection techniques to the purchase of
commercial type items. While you should be proud of your accomplishments, there
remains much to do. Total Quality Management demands that we continue to expand
the emphasis placed on quality in source selection.
This
handbook has been developed to assist DLA contracting offices in developing and
using appropriate source selection techniques to buy best value. The handbook
covers a broad spectrum of techniques already in use and some options for
developing new ones. It also includes some advice on how to choose among these
techniques, their pros and cons, and restrictions and requirements imposed by
the regulations and Comp Gen decisions.
This
handbook is instructional rather than directive in nature. DLA does not intend
to establish detailed procedures through the issuance of a specific source
selection regulation. DLAR guidance on source selection will be limited to
areas where Comp Gen decisions, court cases or experience have demonstrated the
need for broadening or restricting the authority of the field activities, or
for modifying the existing internal control procedures. Each contracting office
is free to establish its own policies and procedures for the use of source
selection techniques. DLA views the spectrum of source selection techniques as
tools available to the contracting officer. While you are urged to consider all
of these tools, the decision as to which one to use must be made on the basis
of your own circumstances. The additional costs in terms of manpower and
lead-time must be considered along with the benefits when deciding whether to
change to a more complex source selection technique.
While
this handbook is comprehensive in its coverage of source selection techniques
currently being used in DLA, it is only possible to capture a fraction of what
is being accomplished in this area. Your comments on other ways to buy best
value and on ways in which we can improve this handbook are solicited.
CHAPTER I CHOOSING A SOURCE SELECTION TECHNIQUE
NOTE: The term
"source selection" as described in FAR Subpart 15.6, means the
determination of which offer to award in a competitive environment. The term
has taken on a more specific connotation in general use and is usually equated
with the more complex, formalized source selection techniques. This handbook
uses the term "source selection" under the broader definition.
a.
This chapter gives you an overview of some of the source selection techniques
currently being used or planned for use, along with a brief discussion of their
characteristics. Each technique will be discussed in greater detail in
subsequent chapters. This chapter also discusses some of the general
considerations for choosing a technique to use.
b. The determination of source selection technique is one of the
key decisions made by the contracting office and can have a significant impact
on the success of a procurement. There are many techniques available from which
to select. These techniques range from awarding to the lowest priced,
responsible offeror to the formalized, complex process used to purchase major
weapons systems. Table 1 gives examples of these techniques, arranged in
general order from the simplest to the most complicated methods. While this
list is by no means all-inclusive, it should give you an idea of the spectrum
of methods available.
c.
The goal of source selection is to award the offer which represents the best
value to the Government through the evaluation of the differences inherent in
the offers or offerors. The specific differences which will be evaluated are
called the evaluation factors, while the way that these differences will be
evaluated is called the scoring system or evaluation method. The source
selection technique relates these two considerations and establishes the
general rules regarding how the successful offer will be selected. Certain
techniques lend themselves to specific evaluation factors or types of factors,
while other techniques will relate more to the evaluation method used. In
addition, some factors have been found to work best with certain types of
evaluation methods and vice versa. The techniques shown in table 1 represent
combinations which have been proven to work successfully, along with some
permutations which are possible under the same basic system.
d. Source selection techniques are tools available to the
contracting officer to accomplish the task of buying best value. As with the
selection of any tool, the best results will be obtained from the tool whose
design most closely conforms with the requirements of the job at hand. These
"jobs" can be grouped into two basic categories. In the first, we are
not sure what we want to buy. The source selection technique helps us determine
the item that represents the best value to the Government and usually includes
an assessment of whether or not the offeror can deliver the products or
services represented in the technical proposal. This is the classic use of
formal source selection. In the past, this tool has been limited to situations
in which the Government was unable to specify what it wanted, e.g.,
developmental items, performance specifications, and Research and Development.
Its use has been expanded to any acquisition where there is a recognized value
to the Government for improvements to the quality or function of the item. The
existence of "acceptable" level of quality or performance need not
lead to a presumptive decision that the desired quality can be defined or that
the minimum level represents the best value. A more pertinent question is:
"Is the Government willing to pay more for increased quality above a
certain level?" Of course, any decisions in this area must be coordinated
with the user of the product or service.
SPECTRUM
OF SOURCE SELECTION TECHNIQUES
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1. Basic responsibility
determination - tradeoff: pay more to deal only with responsible contractors. |
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a.
Preaward Surveys. |
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b.
Debarment of nonresponsible contractors. |
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2. Other cost factors -
Evaluate all costs to the Government. |
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a.
Actual or estimated costs. |
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i.
Transportation, installation, life cycle costs |
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ii.
Source inspection |
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iii.
Preaward survey |
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b.
Anticipated costs - tradeoff: pay more for reduced probability of future
costs. |
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i.
Nonconforming supplies |
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ii.
Delinquent delivery |
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c.
Combination of the above. |
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3. Quality vendor
program - tradeoff: pay more for greater probability of performance. |
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a.
Preset qualification standards. |
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b.
Decision whether or not to apply made on individual procurement prior to
award. |
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c.
Prequalification - offeror submission. |
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i. Single tier (up to 20 percent premium) - DCSC, DESC, DISC |
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ii. Multitier |
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iii. Use formula |
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d.
Combine with cost factors in paragraph 2a above. |
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4. Streamlined source
selection (DPSC) - primary tradeoff: pay more for greater probability of
performance. Limited tradeoff for higher quality product. |
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a.
Without technical proposal - use in-house data. |
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b.
With abbreviated technical/business proposals. |
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c.
Concentrate on price and ability to perform (past performance, quality
program and production capacity). |
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d.
Use standardized factors and rating standards. |
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e.
Minimize number of people involved. |
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5. "Formal" source
selection - primary tradeoff: pay more for better product. Probability of
performance secondary. |
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a.
Can use formalized or streamlined organization structure. |
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b.
Always have technical proposal. |
e. In the second category, the Government knows exactly what it
wants; the source selection technique helps determine who the Government will
buy the specified item from. The Government is, in effect, maximizing its
chances of getting what it pays for. The expansion of source selection
techniques in this category resulted from the realization that a contract
awarded to the lowest priced offeror who will not perform, delivers late, or
has quality problems will result in greater overall costs to the Government
than will paying a higher price to a more reliable contractor. Due to the
nature of DLA's mission, this category offers much greater opportunities for
using alternative source selection techniques. Benefits are most likely to be
realized in this area where there is a history of performance or quality
difficulties, and where the consequences of poor performance are substantial
(e.g., when buying a critical weapons system support item with a long
production lead-time).
f. All source selection decisions result in a tradeoff among the
factors being considered, i.e., you will accept less of this if you can get
more of that. This tradeoff occurs between all of the factors being considered
or evaluated, but is more easily understood by using a common denominator.
Since cost or price must always be an evaluation factor, it is simpler to refer
to the tradeoff as the willingness to pay more for higher merit in the other
factors. Table 1 shows the primary tradeoff inherent in each technique in these
terms.
a. BASIC RESPONSIBILITY DETERMINATIONS. This is the simplest
form of source selection. While this technique is often referred to as
"award to the lowest price," a positive determination of the
offeror's responsibility is required prior to any award. Responsibility equates
to the ability of the firm to perform the contract and is considered in a
go/no-go manner, i.e., all firms that meet the minimum standards of
responsibility will be treated as equally responsible (go), while firms that do
not meet this standard will not be considered for award (no-go). The tradeoff
is that we are willing to pay more to deal only with those companies who meet
minimum standards of responsibility. A determination of responsibility can be
made on the basis of information available to the contracting officer or
provided to the contracting officer by a preaward survey conducted by
Government personnel; the offeror is not required to submit a proposal on its
responsibility. Responsibility determinations are normally accomplished for
each procurement, but a time specific determination of nonresponsibility can be
made through the debarment process. In addition to integrity issues upon which
most debarments are based, a contractor's history of poor performance ora demonstrated
willful failure to perform can also be used as a basis for debarment. One of
the major problems associated with this source selection technique is the
ability of SBA to overturn a contracting officer's determination of
nonresponsibility. SBA's authority to make responsibility determinations for
small businesses does not, however, pertain to debarment or comparative
assessments of responsibility related factors under other source selection
methods.
b. COST FACTORS. This technique considers costs which the
Government will or may incur as a result of the specific characteristics of the
offeror's proposal or an offeror's past performance history. Some costs have
historically been added to offered prices for evaluation. These costs include
installation of equipment, required facilities modifications, transportation
from the delivery point to the requiring activity, and life cycle costs. The
types of cost factors evaluated in DLA procurements have recently been expanded
to include two additional areas. The first area represents costs which the
Government will incur in attempting to prevent poor performance. Since these
costs are actually incurred by the Government, there is no additional tradeoff
inherent in using them. Cost factors have been developed for preaward surveys
and source inspection and can be applied where these costs are to be incurred
as a result of an offeror's lack of a satisfactory performance history. The
second area involves the addition of cost factors which represent the cost to
the Government of anticipated poor performance. These costs are calculated by a
formula using the contractor's performance history. The evaluation of
anticipated performance is commonly accomplished in formal source selection.
The cost factor technique differs from formal source selection in that the
evaluation is quantified. The tradeoff is the payment of a higher price in
return for a reduced probability of poor performance.
c. COMPETITION FOR PERFORMANCE PROGRAM. This technique was developed
by the Air Force Logistics Command and adapted by DLA. The basic concept is to
allow the payment of a higher price to contractors who have demonstrated a
history of superior performance under Government contracts. The most commonly
used variation involves the prequalification of contractors through the
submission of an application resembling a technical proposal for past
performance. Contractors are qualified for a specific period of time, after
which they must reapply. Qualified contractors can receive awards at up to 20
percent over the otherwise successful offer (this figure was determined by a
study of the costs of poor performance in the Hardware Centers). Applicable
provisions are included in solicitations for covered Federal Supply Classes (FSCs)
but the application of the preference for quality vendors is not mandatory.
This decision is made by the contracting officer after best and final offers
and takes into account the supply status and characteristics of the item being
purchased as well as the actual differential to be paid. There are many other
possible variations, including the use of updated in-house performance data on
a case-by-case basis; multiple tiers where, for example, certain contractors
may qualify for a 20 percent price differential while others qualify for 10
percent or 5 percent price differentials; and the use of a formula to calculate
a maximum differential for each prospective contractor.
d. STREAMLINED SOURCE SELECTION. Under this technique, the
factors on which offers will be evaluated are determined for each acquisition
and stated in Section M of the solicitation. This evaluation can be
accomplished using in-house information or a proposal submitted by the
offerors. Where in-house information is used for the evaluation, this method is
quite similar to the case-by-case variation under the Competition for
Performance Program. It differs in the fact that the source selection must be
based upon the evaluation factors (there is no option to award on lowest price
without consideration of the stated evaluation factors), and it allows for the
use of technical factors other than past performance. It is basically a formal
source selection adjusted to take less time and fewer resources. The
streamlining is accomplished by limiting the factors to be considered, the
length of technical proposals, and the number of personnel involved in the
evaluation, and by standardizing the evaluation criteria and standards. Its
most common use within DLA is to evaluate the offeror's ability to perform.
Some of the other factors used in addition to past performance are the
offeror's quality program, personnel qualifications, production capacity,
production or management± plan, and price realism. Since the evaluation of
differences in the products or services to be provided is more complex and
requires the participation of more evaluators, the streamlined technique is
generally used where the product being acquired is set by a
"specification" or where variations in the characteristics of the
offered product are kept to a minimum. The primary tradeoff is paying more for
a higher probability of performance.
e. FORMAL SOURCE SELECTION. The Federal Acquisition Regulation
(FAR) 15.612 defines formal source selection as any source selection where a
specific evaluation group structure is established to evaluate proposals and
select the offer for award. Such group structures are usually employed where
differences in the product or service to be provided are evaluated. The
principal tradeoff is a higher price for a better product or service, but
factors regarding the offeror's ability to perform are almost always included.
Technical proposals are always required.
3.
GENERAL CONSIDERATIONS IN SELECTING A TECHNIQUE
a.
The selection of the proper technique can only be made by relating the benefits
of each technique to the circumstances inherent in the item being purchased and
the industry which produces or sells it, and by weighing these benefits against
the costs associated with the technique. Commercial items which are not complex
in nature, do not require sophisticated manufacturing technology, and are
produced by a healthy industrial sector are less likely to warrant the use of a
more complex source selection technique. Some of the issues to consider are
listed in table 2. The adoption of more complex source selection techniques
offers the possibility of more precise determinations of best value, but at a
cost. As the number of evaluation factors being considered increases and the
organizational structure and controls established to undertake the evaluation
become more complex, procurement lead-time and administrative costs also
increase. The goal of buying best value should not be pursued blindly. The key
is to weigh all the costs and benefits, and administrative costs are a part of
this equation. The consideration of administrative costs in the form of labor
and procurement lead-time is wholly consistent with the concept of best value
and must be a factor in any decision regarding the source selection technique to
be used.
b.
DLA is not establishing agency-wide source selection techniques or rules
regarding their selection. Each contracting office is free to design their own
techniques or to select and modify existing ones. As with anything new, there
is a learning curve involved. The first procurements under a new technique can
be expected to take longer than continuing to do business in the old way.
Improvements in matching the source selection technique to the procurement and
in executing the technique will come with experience. You are encouraged to
experiment, but also to recognize the risks involved with changing the way you
do business.
c.
An obvious first place to change your source selection technique is with items
that have a history of performance problems. It is important to note, however,
that past problems may also be a function of the quality of the effort in the
selection process. For example, past problems with items being purchased on the
basis of price alone may be more efficiently corrected through an improvement
in the quality of the preaward survey and the resulting responsibility
determination.
QUESTIONS
TO ASK IN DETERMINING SOURCE SELECTION TECHNIQUE
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Is there an adequate
specification? |
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Is the specification
design or performance oriented? |
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Do we know exactly what
we want; what is available? |
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Do we want an item which
meets the specification or are we willing to pay more for a better product? |
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What is the probability
of performance problems? |
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How complex is the
manufacturing process? |
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Have there been quality
problems in the past? |
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Have there been
performance/delivery problems in the past? |
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Are we satisfied with
past preaward surveys? |
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Were Certificates of
Competency (COCs) issued to contractors who didn't perform? |
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What would be the impact of performance problems? |
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Does the item support a weapon system? |
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Is the item critical? |
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Does the item have a
long production lead-time? |
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Is the item on backorder? |
CHAPTER II FORMAL SOURCE SELECTION
Formal source selection is
the most complex and time consuming source selection technique. It also
provides the Government the greatest flexibility in determining best value. It
is normally used in large dollar value procurements where the Government allows
the offerors to propose variations in the nature of the item or service being
purchased. This technique is not being discussed first because of any preference
for its use. In fact, it is anticipated that it will be used very sparingly.
Due to its complexity, however, it incorporates most of the elements and
considerations that are inherent in the simpler techniques and is therefore
discussed in detail first.
a. The establishment of a specific evaluation and decision
organization is what makes certain source selections "formal." For
most formal source selections, much of the evaluation of proposals and the
source selection decision are outside the control of contracting personnel.
Formal source selection procedures were developed for purchasing major systems
and complex services. Under such purchases, the Government must decide what it
wants, and the expertise for these decisions is usually outside the contracting
area. Tables 3 and 4 show the typical organizational structure for formal
source selection. Table 5 shows the typical functional structure.
(1)
The Source Selection Authority (SSA) makes the final decision on the
proposal(s) selected for award, reviews and approves the Source Selection Plan,
and appoints the chairperson and members of the Source Selection Advisory
Council. The SSA must have a broad perspective of user needs, contracting
responsibilities, and policy considerations and is generally a high level
manager. The SSA is usually designated by the Head of the Contracting Activity
(HCA) responsible for the acquisition.
(2)
The Source Selection Advisory Council (SSAC) reviews and approves evaluation
factors and standards, determines factor weighting, designates the chairperson
and members of the Source Selection Evaluation Board (SSEB), and advises and
assists both the SSEB and the SSA. Comparative assessments of proposals are
generally reserved for the SSAC.
(3)
The Source Selection Evaluation Board develops evaluation standards and
evaluates proposals against those standards.
(4)
The contracting officer prepares the acquisition plan, prepares and issues the
solicitation, evaluates cost or price proposals and determines price
reasonableness, makes competitive range recommendations, conducts discussions
with offerors, and awards the contract.
b. Specific responsibilities for the key players are specified
in the Defense Logistics Acquisition Regulation (DLAR) at 15.612.
The source selection plan
tells how the acquisition is to be conducted. Every source selection which
requires the submission of a technical proposal, and will evaluate factors
other than price on the basis of those proposals, should have a source
selection plan. (Procedures to be followed for more simplified source selection
techniques are usually detailed in a preapproved plan or regulation and can be
referenced in the acquisition plan.) FAR 15.612 and DLAR 15.612 require the
source selection plan to include the organization structure, presolicitation
activities, the acquisition strategy, the evaluation factors and their relative
importance, the evaluation method, including the rating system, and a schedule
of significant milestones. The plan should also include the evaluation
standards.
a. The evaluation factors determine the areas in which you will
discriminate between offers and/or offerors to determine the offer that
provides the best value to the Government. The contracting office has broad
discretion in determining the evaluation factors to use and the way in which
they will be applied. The Comptroller General (Comp Gen) has consistently
refused to second guess decisions by the source selection authority (SSA) in
this area. There are three basic requirements for evaluation factors:
TABLE
3 SOURCE SELECTION ORGANIZATIONS
(Currently
Unavailable Electronically)
TABLE
4 SOURCE SELECTION ORGANIZATIONS
(Currently
Unavailable Electronically)
TABLE
5 FUNCTIONAL STRUCTURE
(Currently
Unavailable Electronically)
(1)
The factor must be a variable, i.e., there must be a reasonable expectation of
variance between offers.
(2)
The variance must be measurable. This does not mean that it must be
quantifiable. Qualitative measurements are equally valid.
(3)
The factor must be determinant. The Comp Gen has stated in several decisions
that the use of an area as an evaluation factor is valid only if the agency's
needs warrant a comparative evaluation of those areas. The FAR reinforces this
by stating that the evaluation factors will include only those factors which
will have an impact on the source selection decision. The simplest way to
assess determinance is to ask yourself: "Is the Government willing to pay
more for higher merit in this factor?"
b. Both the FAR and Comp Gen require one factor to be evaluated
in all competitive acquisitions: price or cost to the Government. Other
evaluation factors, usually called technical factors, can be included at the
discretion of the contracting officer, in consultation with technical and other
personnel. There is no requirement to evaluate any factor other than price in a
negotiated procurement. In most source selection acquisitions, evaluation
factors are broken down into various levels of subfactors. The terminology used
by different Government entities varies considerably, so you should exercise
caution when reviewing source selection regulations from other agencies or the
Military Departments. For example, the Air Force, in its regulation on formal
source selection for major acquisitions, uses the terms area, item, and factor.
Examples of these are shown in table 6. In this handbook, the term
"factor" represents the major evaluation criteria as specified in the
solicitation. The most commonly used evaluation factors are discussed below:
(1)
Cost or Price. The FAR requires cost or price to be an evaluation factor in all
procurements. For cost reimbursement type contracts, this will be the
Government's estimate of the eventual cost of the contract. Since advance
estimates of cost may not be valid indicators of actual costs, the FAR
discourages the use of cost as a controlling factor in source selections for
these types of contracts. For fixed price contracts, the contract amount
(offered price) must be the basis for the evaluation (the offered price may be
adjusted for evaluation purposes by other cost related evaluation factors such
as transportation, Buy American Act preference, or life cycle costs). Since the
Government knows the cost of the contract under fixed price contracts, price
can (but need not) become a controlling factor in the source selection
decision.
(2)
Technical Evaluation Factors. The general terms "technical factors"
and "technical evaluation" are usually considered to include all
factors other than cost or price. Technical factors are often broken down into
technical and management groups. In this handbook, technical evaluation factors
are discussed in three categories: product or service related; responsibility
related; and risk.
(a)
Product or Service Related Factors. These factors generally concern the
performance or design characteristics of the item being offered, the mission
suitability of developmental items, and how well an offeror's proposal conforms
to the statement of work. This is where the Government assesses the
characteristics of the item or service being offered (what it will buy). The
areas, items, and factors shown in table 6 are examples of product or service
related factors and subfactors. For these factors, the establishment of standards
and evaluation of proposals generally requires technical expertise beyond that
possessed by contracting personnel. For this reason, technical and requirements
personnel are usually involved in the development of the source selection plan
and serve on the evaluation panels.
(b)
Responsibility Related Factors. These factors concern the offeror's ability to
perform the contemplated contract (from whom the Government will buy). They
include the standards listed in FAR 9.104-1, such as production equipment and
facilities, personnel qualifications and experience, organization, accounting
and operational controls, quality controls, ability to meet required delivery
schedules, record of integrity and ethics, and past performance record.
Financial capability is generally not used as a comparative evaluation factor.
Although a specific Comp Gen ruling on this issue was overruled by a court
decision, the Comp Gen adheres to the rule that financial capability should
only be used in making responsibility determinations unless a special
justification exists. (See Consolidated Food Management Co., Comp Gen B-217254,
85-1 CPD 673 and Delta Data Systems, Comp Gen B-213396, 84-1 CPD 430.) As
discussed in paragraph 5f below, special care must be exercised when
establishing rating and scoring methods and standards for responsibility
related factors.
TABLE
6
EXAMPLES
OF STANDARDS
|
(1) EXAMPLE OF
QUANTITATIVE STANDARD |
|
|
AREA: |
OPERATIONAL UTILITY |
|
ITEM: |
MISSION PERFORMANCE
CHARACTERISTICS |
|
FACTOR: |
PAYLOAD/RANGE |
|
DESCRIPTION: |
This factor is defined
as that which can be carried, considering the basic design gross weight, in a
given range, when operation utilization of the aircraft is considered. (Load
Factor 2.5) |
|
STANDARD: |
At a weight not exceeding the basic
design gross weight, the aircraft is capable of transporting payload of: a.
30,000 pounds for a 2800 nm distance. b.
48,000 pounds for a 1400 nm distance. |
|
(2) EXAMPLE OF
QUALITATIVE STANDARD |
|
|
AREA: |
TECHNICAL |
|
ITEM: |
SYSTEM INTEGRATION |
|
FACTOR: |
SYSTEM SAFETY |
|
DESCRIPTION: |
The proposed system
safety program will be evaluated for adequacy in effecting the design of
changes or modifications to the baseline system to achieve special safety
objectives. The evaluation will consider the specific tasks, procedures,
criteria, and techniques the contractor proposes to use in the system safety
program. |
|
STANDARD: |
The standard is met when
proposal: a.
Defines the scope of the system safety effort and supports the safety
objectives. b.
Defines the qualitative analysis techniques proposed for identifying hazards
to the depth required. c.
Describes procedures by which engineering drawings, specifications, test
plans, procedures, test data, and results will be reviewed at appropriate
intervals to ensure safety requirements are specified and followed. |
(c)
Risk Factors. The determination of the risks involved with proposals is
normally an evaluation method applied to other factors. A risk assessment may
also be required as a part of the offeror's proposal and identified as a
separate evaluation factor. In this assessment, the offeror identifies risk
areas and recommended approaches to minimize the impact of those risks on the
overall success of the proposal. Such assessments are usually restricted to the
analysis of technical risks inherent in the offeror's proposal. Responsibility
related factors may also be combined and evaluated in the terms of a risk
assessment, i.e., performance risk. Where responsibility related factors are
treated as a separate evaluation factor, any evaluation of risk elements of the
other factors must not duplicate the evaluation of the separate factor.
a.
The determination of the evaluation method (how the factors will be evaluated
and compared) is subject to even greater flexibility than the determination of
the evaluation factors. There are few legal or regulatory restrictions in this
area. An evaluation method can be as simple as the SSA reading the proposals
and deciding which one is best. Internal control considerations and
documentation requirements, however, make it prudent to establish specific
procedures. This section discusses some of the basic considerations involved in
establishing an evaluation method and some of the procedures commonly used.
b. Rating Descriptions. The rating description is the language
by which relative assessments of merit are made. There are three types of
rating descriptions in common use: numerical, adjectival, and color coding.
Numerical systems generally allow for more rating levels and thus allow for
more precise distinctions of merit. This is due solely to the fact that it is
easier to use numbers than to think up numerous colors or adjectives. Numerical
systems have their drawbacks, however. They lend an air of precision to evaluations
which may not be justified, and their use in conjunction with specific
percentage weightings for factors may limit the flexibility of the SSA in
making the award decision.
c.
Decisional Rules
(1)
There are two basic ways in which decisions regarding merit are made. The first
is a discrete determination of acceptability (go/no-go). The responsibility
determination is a good example of this rule. An offeror is not considered for
award unless the minimum standards are met. On the other hand, no additional
merit is perceived if the minimum standards are exceeded. Low cost, technically
acceptable procurements are another example. In this technique, the go/no-go
decisional rule is applied to the overall rating of technical factors. Those
offers which are rated not acceptable are eliminated from consideration and
award is made to the lowest priced, technically acceptable offer.
(2)
The second decisional rule allows for multiple distinctions of merit. This is
characterized by greatest value procurements. Proposals are not only determined
acceptable or unacceptable, but a relative measurement of technical merit is
made for acceptable offers. Award is made to the offer which represents the
greatest value, considering both price and technical merit. For technical
factors, merit distinctions are usually restricted to a range of acceptable
variation. Below this range, offers are determined to be not acceptable (a
no-go decision). Above this range, additional merit will not be perceived,
i.e., the Government is not willing to pay more for additional merit. The
relationship between price and technical merit need not be linear across this
range of acceptable variation. In some cases, the amount of money which the
Government is willing to pay for each additional "increment" of
technical merit will increase as it approaches the high end of the range due to
the fact that such increases may require the use of exotic materials or complex
manufacturing processes which will greatly increase the associated costs. The
opposite relationship could also exist.
(3)
Any factor other than cost or price can be used in a go/no-go fashion. Price,
however, is not subject to the decisional rules and is not constricted by a
minimum and maximum range of merit. It is a continuously variable, numerical
factor. Different prices are never classified as being of equal merit.
d.
Assessment Criteria. Evaluation factors are often evaluated using multiple
measures of merit or assessment criteria. Whereas the evaluation factors and
subfactor represent the subject matter to be evaluated (what the Government is
looking for), the assessment criteria denote the measures of merit, or what
qualities the Government is looking for in the proposal. Examples of assessment
criteria are soundness of approach, compliance with requirements, excellence of
design and understanding of the requirement. When multiple assessment criteria
are used with multiple factors or subfactors, an evaluation matrix results. An
example of the Air Force matrix evaluation system is shown in table 7. The term
"area" equates to evaluation factor while the term "item"
equates to subfactor. Measures of merit which are normally used as assessment
criteria may also be used as separate evaluation factors (but not as both).
e.
Evaluation Standards
(1)
An offer's merit under the evaluation factor is evaluated against predetermined
standards. Their use accomplishes two goals: it minimizes bias which can result
from the direct comparison of offers, and it ensures that the evaluators (who
usually establish the standard) know what they want in terms of technical
merit. A standard can represent any level of merit in the acceptable range. It
is often set at the minimum acceptable level, since this readily identifies
proposals which do not meet the minimum requirements. Standards should be
developed prior to solicitation as part of the source selection plan.
(2)
As can be seen from table 6, standards can be either quantitative or
qualitative. Obviously, quantitative standards can be more specific. Overly general
standards should be avoided, however, as such standards will make agreement
between evaluators more difficult and require more effort in the evaluation
stage. The relationship between factors and subfactors (area and item),
evaluation criteria (measures of merit), and standards is shown in table 8.
f.
Relating Standards and Rating Descriptions
(1)
There are several different ways to relate standards to rating descriptions in
a greatest value procurement. One way is to develop a standard for each rating.
Another is to omit the standard for every other rating. The omitted ratings can
be defined as: meets the standard for acceptable but does not meet the standard
for exceptional. A third way most often used in the more complex evaluations
(such as matrix evaluations) is to define a single standard at the lowest
factor level and rate these subfactors or sub-subfactors as meets/doesn't
meet/exceeds the standard. These ratings can be rolled up into the more
numerous rating descriptions at the higher, factor level.
(2)
The decision on which system to use will be affected by several considerations.
First, the use of a single standard is more appropriate where factors are
broken down into more specific subfactors. The use of a single standard for an
entire factor does not allow as much discrimination between offers since only
three levels are available (meets, doesn't meet, or exceeds). The rating of the
factor to exceed the standard can represent an enormous range of merit. Second,
there may be operating efficiencies involved. Multiple standards require a
greater number of more specific definitions to be constructed during the
development of the source selection plan. Once these standards are constructed,
however, they allow for less documentation during the evaluation of offers.
Where a single standard is used, the justification for a rating which exceeds
or does not meet the standard must be accomplished on a case-by-case basis for
each offer. Where the same factors and standards are used in multiple
procurements, it may be more efficient to use the more explicit and numerous
standards to avoid the need for this case-by-case documentation. Third,
multiple standards tend to be more specific. The more specific the standards,
the more assurance you have that the people who are developing the standards
have adequately deliberated on exactly what they are looking for from the
offers.
(3)
It is perfectly acceptable to combine the two or more types of rating standards
in the same procurement. In fact, contracting offices which are planning to use
a streamlined source selection technique with past performance and other
responsibility related factors as the major technical factors should consider
developing standardized, multiple standard rating systems for some of these
factors and combining them with procurement unique standards for the other
factors.
g.
Flexibility
(1)
The most successful rating systems are those which allow the SSA the maximum
flexibility in making the tradeoffs between the evaluation factors. Numerical
systems present the most problems in this area. The combination of numerical
scoring for factors and set percentage weights for each factor will result in a
total point score for all technical factors, presenting the SSA with little
flexibility to make tradeoffs. Tradeoffs are much easier to make if the factors
can not be combined, either by using only a relative importance for factors or
by not using a numerical score at the factor level, or both. (Even the relative
statement of factor importance sets limits on their weights which might be
limiting when
TABLE
7 EXAMPLE OF MATRIX EVALUATION
(Currently
Unavailable Electronically)
TABLE
8 EVALUATION CRITERIA MATRIX
(Currently
Unavailable Electronically)
numerical scores are used at the
factor level, e.g., for four factors of descending importance, the maximum
weight for the least important factor is 23 percent). This is the major reason
that numerical rating systems have fallen from favor. Numerical ratings should
never be applied to price. Their combination with numerical ratings of
technical merit leave the SSA with no decision to make unless he overrides the
ratings provided. While numerical systems can and have been used successfully,
they are not recommended and their use in combination with numerical factor
weightings is strongly discouraged.
(2)
It is important to note that the SSA is allowed to make the source selection
decision on any relative differences between proposals. Two proposals rated the
same need not be considered as equal, while two proposals receiving different
ratings may in fact be closer than the two rated the same. As the ultimate
arbiter of the merits of the proposals, the SSA must look beyond the scores or
ratings provided by the evaluators. The SSA may also disregard the ratings
provided by the evaluators. Of course, you will want the rating system to
convey the maximum amount of useful information to the SSA in a form which
allows him to make a decision without an extensive review of the proposals.
(3)
Certain elements of the rating system are specified in the solicitation and
must be followed by the SSA. One of these is the decision rule. Another is the
minimum requirements which must be met by the proposal (although the SSA can
certainly disagree with the evaluators as to whether the minimum requirements
have been met). Where a standard is set at the Government's minimum
requirements and failure to meet this minimum would result in the proposal
being determined as unacceptable, regardless of the merits of the proposal in
the other evaluation factors, that standard is a minimum requirement and must
be specifically stated as such in the solicitation per FAR 15.605(e). (See
paragraph 7 below for special considerations regarding responsibility related
factors.)
h. Risk Assessments. Risk is often used as an assessment
criterion. Risk assessments are usually discussed separately in the evaluation
narratives accompanying the factor ratings. They can be included in determining
the rating for the factor or treated and presented separately. The most common
risk factor used is price realism. This relates the proposed cost or price to
the level of effort required by the technical proposal as a means of evaluating
the offeror's ability to perform the contract at the offered price. If all
costs have not been considered, the risk of poor performance is obviously
greater. Where price realism is the only risk factor being evaluated, it can be
presented as a separate factor to the SSA. Since price realism is a comparative
analysis of price vs. other technical factors, the narrative must relate back
to the areas which have been identified as contributing to the overall risk
assessment.
i. Conditional Subfactors. Each evaluation factor listed in the
solicitation is considered in the tradeoff analysis in accordance with its specified
relative order of importance. Superior merit in one factor can offset inferior
merit in another, but the factors are not considered as substitutes for each
other, i.e., superior merit in one factor can not be a substitute for inferior
merit in another given a second proposal with superior merit in both.
Subfactors, however, are not restricted to tradeoff analysis; their relative
importance can be conditional upon the availability of data or the merit of the
proposal in another subfactor. Conditional subfactors can be used in an
either/or manner to roll up to an overall rating for the factor. A specific
rating for the factor could be obtained through the evaluation of a single
subfactor or several subfactors. For example, a rating of low risk under a
performance risk factor could be earned by either demonstrating acceptable past
performance or by demonstrating productive capability to produce the item. As
another example, where a commercial item is being procured, an existing
manufacturer of that commercial item may be exempted from the requirement to
submit cost data for a price realism analysis. This concept is especially
useful under responsibility related factors. The goal is to obtain and evaluate
detailed performance capability data only from offerors who can not establish a
high probability of successful performance through simpler means. The use of
conditional subfactors can reduce the size of technical proposals and
associated evaluation effort. Where this concept is used, it is especially important
to provide clear instructions on proposal preparation and a clear description
of how the proposals will be evaluated in the solicitation. An example of
solicitation language is provided in appendix A.
j.
Evaluating Price
(1)
In evaluating technical factors, the SSEB describes the merits of the technical
proposal in relation to preset standards and the SSAC and SSA use these
descriptions of merit in making their comparative analyses and determining the
proposal which represents best value. Using the technical proposals in a direct
comparison would be impractical. Since price is a continuously variable
numerical factor, however, it can be (and usually is) used directly in the
tradeoff analysis rather than using descriptions of its merit. Some numerical evaluation
systems do use price indirectly by assigning a numerical rating to price and
combining this rating with the numerical rating for technical factors. These
numerical systems reduce the flexibility of the SSA to make tradeoff
determinations, however, since award to other than the highest point total
offer would require a reevaluation of the scores. In most source selections,
the SSA uses the offered price (for fixed price contracts) or the Government's
estimate of total costs (for cost reimbursement type contracts) in making the
tradeoff of price for technical merit.
(2)
In addition to using the offered price in making tradeoff determinations, price
can also be evaluated for reasonableness and realism. Such evaluations result
in a merit description of price. As discussed above, price realism is a method
of evaluating risk. Merit is usually described in terms of low, medium, or high
risk.
(3)
A determination of price reasonableness is required by regulation. A
determination that the price is not reasonable can affect the award decision,
although award can be made to an unreasonably priced offer after escalation of
negotiations. However, in Graycon Corp. (B-236603, 12/26/89) the Comp Gen ruled
that an agency need not award a proposal which was ranked as most advantageous
under the numerical rating system specified in the solicitation, when the
agency found the proposed price to be unreasonable. Price reasonableness is
used in a go/no-go manner and its use in making a tradeoff determination is
limited by this fact.
(4)
Both price reasonableness and price realism can affect the award decision. By
themselves, however, they do not constitute the evaluation of price. As with
all other evaluation factors, the merits of price must be weighed against the
merits of the other evaluated factors and against the merits of the other
offers. The Government (usually the SSA) must decide if the additional
technical merit of one offer is worth the higher associated price (the tradeoff
of price for technical merit). For fixed price contracts, this is done on the
basis of the offered price, not on the results of the price reasonableness or
price realism analyses. While the price reasonableness evaluation may encompass
an analysis of the value to the Government of the differences in technical
merit between the proposals, it need not do so. In many instances, price
reasonableness can be determined without such a value analysis and without a
comparative analysis of offers (e.g., market or catalog price). Two offers
representing different technical merit can be equally price reasonable and
price realistic and yet have different offered prices (in fact, different
prices would be a logical result).
(5)
A review of the source selection regulations issued by the Military Departments
and other agencies may lead to confusion regarding how price is evaluated in a
fixed price acquisition. These regulations generally state that price shall be
evaluated for price reasonableness and price realism, without mention of any
other price evaluation. Price reasonableness and realism are supplemental
considerations to the use of the offered price as the basis for the tradeoff
analysis and determination which is the primary aspect of all source
selections.
a. All significant evaluation factors, including price, must be
listed in the solicitation. Although the FAR calls for the disclosure of
"significant subfactors," the Comp Gen has not interpreted this to
require the listing of subfactors which are logically and reasonably related to
the stated evaluation factors. In addition, the solicitation must indicate the
relative importance of the factors. This can be accomplished through a listing
in descending order of importance, an adjectival description of importance
(factor A is more important than factor B, factors B and C are equally
important), or through a disclosure of the numerical weights assigned to the
factors in the Source Selection Plan. These methods can be combined or factors
can be grouped, e.g., "The following technical factors are listed in
descending order of importance and in total are equal in importance to factor
A." Where the solicitation is silent as to the relative order of
importance of subfactors, they will be considered to be of equal importance.
(See Tracor, Inc., 56 Comp Gen 62, CPD 386(1976).)
b.
It is also possible to designate factors as being variable in relative
importance rather than fixed. This usually consists of a statement that one
factor is more important than the other, but where the differences between the
ratings of proposals in the more important factor are small, the secondary
factor may be the deciding one. In general, the disclosure of relative
importance is acceptable if it reveals the decisional logic which the agency
intends to use in making the selection decision.
c. The manner in which the relative order of importance is
disclosed in the solicitation can affect the flexibility of the SSA in making
tradeoff decisions (see paragraph 5g above). The listing of numerical weights
affords the least flexibility. Maximum flexibility can generally be obtained
where the solicitation states the relative importance of the technical factors,
and that price and technical are equally important. Where this weighting is
used in combination with a non-numerical rating description, it is virtually
impossible to establish that any reasonable tradeoff by the SSA fails to comply
with the stated order of importance.
7.
SPECIAL REQUIREMENTS FOR RESPONSIBILITY RELATED FACTORS
a.
As previously stated, the standard represents a point of measurement against
which a proposal's merit will be measured. For single standard systems, this
standard is usually established at the Government's minimum requirements.
Offers which do not meet the minimum standards on any significant factor are
generally determined to be unacceptable and are not considered for award
regardless of the merits of the rest of the proposal. Responsibility related
factors, however, must be given special consideration. Generally, traditional
responsibility factors may be used as technical evaluation factors for purposes
of comparative evaluation of proposals. However, the Comp Gen decision in the
Sanford and Son Case (B-231607, Sept 20, 1988) tightened the rules concerning
technical acceptability based on responsibility related factors by cautioning
against their use for determining acceptability on a pass/fail basis. In
Sanford, the Comp Gen determined that the agency did not use the
responsibility-type technical evaluation factors for purposes of a comparative
evaluation of the merits of the proposals. Instead, a proposal was found
acceptable or unacceptable on a pass/fail basis. Sanford's proposal was
rejected solely because of the firm's prior poor performance and would have
been denied a contract no matter how the rest of its proposal was judged. Under
these circumstances, the Comp Gen found that Sanford's rejection constituted a
determination of nonresponsibility that should have been referred to the Small
Business Administration (SBA) for the possible issuance of a Certificate of
Competency (CoC).
b. One of the problems associated with this type of
responsibility determination is the fact that it is made prior to the selection
of the most advantageous offer by the SSA. A CoC referral may thus be required
for an offer (or offers) that is not in line for award. In order to avoid the
problems associated with a responsibility determination, standards for
responsibility related factors should not establish an offer's acceptability.
For other factors, a rating of "does not meet the standard" may
preclude award. For responsibility related factors, the evaluation system must
allow for continued comparative evaluation of the offer. While it is allowable
to set the standard at the level which would normally denote the minimum
acceptable level, an offer which fails to meet the standard should be termed as
"deficient" in order to avoid the connotation of unacceptability and
should not be eliminated from consideration based solely upon the
"deficient" rating.
c.
The Sanford decision does not affect the competitive range determination, since
competitive range determinations are made on the basis of a comparative
assessment of proposals. A small business can be excluded from the competitive
range on the basis of the total merits of the proposal, even though this may be
the direct result of low ratings in responsibility related factors, without
referral to the SBA. If no competitive range is established or if the total
rating of the proposal falls within the competitive range, the proposal must be
forwarded to the SSA as one of the proposals eligible for award. It is, of
course, improbable that the proposal will be selected, given such a low score
in an evaluation factor. In any event, the responsibility determination and any
necessary referrals can be limited to the proposal selected by the SSA.
8.
PROPOSAL REQUIREMENTS AND PREPARATION INSTRUCTIONS
a.
Preparation Instructions
(1)
Proposal preparation instructions are set forth in Section L of the Request for
Proposals (RFP). These instructions tell the offerors what information to
submit to the Government for evaluation and give specific details of how the
information should be submitted. It is critical to the success of the source
selection that these instructions describe precisely the information necessary
to evaluate offers. The information required and the format for its submission
should conform to the evaluation factors and criteria being used. For example,
where each factor will be evaluated using three different evaluation criteria,
the proposal should be required to address each of these criteria separately.
Where different factors will be evaluated by different evaluation teams, the
proposal should be submitted in volumes, chapters or sections which are easily
separable, e.g., separate technical, management, and price or cost volumes.
Careful preparation of these instructions can save time by avoiding the
confusion that comes with proposals that are incomplete and not structured to
facilitate their evaluation and comparison with Government estimates.
(2)
Preparation instructions should be detailed, but as concise as possible. The
Educational Services Institute (ESI), which conducts training of Government and
industry personnel on source selection, recommends that each instruction start
with a concise statement consisting of a verb/noun combination (Do What?), then
go into detail about the information to be submitted. Their recommendations for
active verbs include: describe, explain, demonstrate, provide, discuss, define,
estimate, illustrate, identify, prove, list, and corroborate. A Proposal
Preparation Instruction Development Box is shown in table 9.
(3)
A limitation on the number of pages submitted in the proposal is usually a good
idea. Unless developed on the basis of a sound analysis of the amount of
information needed, however, such limitations can seriously hamper the
Government's ability to determine the most advantageous proposal. The exception
to the use of proposal page limitations is cost or price proposals. Such
limitations may be inconsistent with the offeror's disclosure obligations under
the Truth in Negotiations Act. The Professional Communication Society has
proposed some guidelines for controlling the amount and form of information
submitted. This can be found at appendix B.
b.
Cost/Price Proposals
(1) The Truth in Negotiations Act applies special requirements
for cost and price proposals for acquisitions over $100,000. These are covered
in FAR 15.8. One of the exceptions to the submission of certified cost or
pricing data is adequate price competition. DoD's policy, as set forth in the
Deputy Assistant Secretary of Defense (Procurement) (DASD(P)) memorandum of 1
May 1987, is that the submission of cost or pricing data is not in the best
interests of the Government where adequate price competition exists. The
memorandum references the Comp Gen decision in Serv-Air, Inc. (58 Comp Gen 362
(1979), 79-1 CPD 212) in which the Comp Gen determined that adequate price
competition may result, even where price is a secondary factor, as long as
price is a substantial evaluation factor. Price was found to be a substantial
evaluation factor in one case where it was weighted as 20 percent of the
overall proposal evaluation. While this policy does not prohibit the
requirement to submit certain cost or pricing data to determine cost realism,
the requirement to submit such data and the amount of data to be submitted must
correspond to the complexity and the value of the work to be performed under
the contract. In fact, in a memorandum issued by the Assistant Secretary of the
Navy (Shipbuilding & Logistics) and referenced by the DASD(P) memorandum as
a source of detailed guidance, the use of cost realism analysis and the submission
of cost realism data is described as an "exception to the rule" for
competitively awarded, firm fixed price contracts. Copies of these memoranda
are included in appendix C.
(2)
Where cost or pricing data is required, either for price reasonableness or price
realism, the cost proposal instructions should require cost elements to be
broken down to specific elements of work as related to the Work Breakdown
Schedule.
9. INITIAL EVALUATION AND COMPETITIVE RANGE
a. After the closing date established for the RFP, offers must
be evaluated on all evaluation factors in accordance with the evaluation
methods contained in the source selection plan. This evaluation of initial
proposals accomplishes two goals: it establishes the basis for the competitive
range determination and it identifies those deficiencies in the proposals which
will be discussed with the offerors in the competitive range. It is often
beneficial to accomplish an initial review of proposals using a checklist to
determine basic compliance with the solicitation. A lack of compliance does not
equate to nonresponsiveness, since the concept of responsiveness does not apply
to negotiated procurements. Such offers may be eliminated through the
establishment of a competitive range, however.
PROPOSAL PREPARATION INSTRUCTION DEVELOPMENT BOX
(Currently
Unavailable Electronically)
Use this box to develop proposal preparation instructions that
address the evaluation criteria. Prepare one such box for each cell in your
evaluation criteria matrix. In this way you can develop proposal contents for
each volume, chapter and section, and even for each paragraph, if that level of
detail is really necessary. Estimate the evaluation workload by estimating the
pages that will be necessary to provide the information requested. Use the same
approach to establish page limitations that are realistic in light of the
amount of information requested. Allow +5% or +10% for estimating errors. This
approach to developing proposal preparation instructions will make evaluation
more thorough and efficient. Deficient proposals will be recognized more
quickly and easily.
b. Initial Evaluation. The initial evaluation is accomplished in
accordance with the evaluation methods contained in the Source Selection Plan.
Each proposal will be evaluated against the evaluation standards to identify
deficiencies (does not meet the standard for "acceptable") and strong
points (exceeds the standard for "acceptable" in a beneficial
manner). Deficiencies can occur in many ways (see table 10). In addition to
describing the deficiency, it is desirable to explain how the deficiency will
adversely affect performance. This can be accomplished through a risk
assessment or a narrative description of each deficiency. Likewise, the manner
in which strong points will be beneficial should be explained. A report is then
prepared for each proposal which summarizes the deficiencies and strong points
and rates the proposal in accordance with the scoring plan and terminology
being used. Examples of report formats are in appendix D.
c.
Establishing the Competitive Range
(1)
Competitive range determinations are required prior to discussions by FAR
15.609. The purpose of establishing a competitive range is to avoid costs and
delays to both the Government and the offerors which would result from holding
discussions with offerors whose proposals do not stand a reasonable chance of
receiving an award. This is especially important when using formal source
selection techniques, since the costs and effort associated with discussions
based on complicated technical proposals are much greater. The general rule,
however, is to err in favor of a broader competitive range. The FAR states:
"When there is doubt as to whether a proposal is in the competitive range,
the proposal should be included." The extent to which an offeror's
proposal would need to be modified should also be given consideration in
determining the competitive range. The Comp Gen held in the Optical Data
Systems case (B-227755, 10/26/87) that the elimination of a proposal from the
competitive range was proper when the proposal was reasonably found to be so
technically deficient that major revisions would be required to make it
technically acceptable, even though this resulted in a competitive range of
only one offer. Although proposals which are informationally deficient cannot
be eliminated on the basis of responsiveness, proposals which are so
informationally deficient as to make reasonable evaluation impossible may be
eliminated from the competitive range on the basis that a complete proposal
rewrite would be necessary in order for it to have a reasonable chance of being
selected for award.
(2)
Competitive range determinations should be made on the basis of all of the
evaluation factors stated in the solicitation and these factors must generally
be evaluated in the same way that they will be evaluated for award. Where
prices are adjusted by a required evaluation factor (e.g., Buy American Act;
Small, Disadvantaged Business preference; transportation rates) the adjusted
price must be used. There is one exception to the requirement to evaluate
offers in the same way that they will be evaluated for award. Where a go/no-go
decision rule is applied to technical factors for award determination (such as
in Low Cost/Technically Acceptable procurements), this decision rule need not
be applied to the competitive range decision, since proposals which would
otherwise be considered unacceptable may stand a reasonable chance of receiving
an award after discussions.
(3)
Competitive range determinations usually constitute comparative assessments,
i.e., the elimination of a proposal from the range is affected by the existence
of offers of greater merit. Where the decision is made on the basis of such a
comparative assessment, it is not subject to the responsibility related
restrictions of the Sanford and Son case. As demonstrated by the Optical Data
Systems case, however, competitive range determinations may also be made on the
basis of technical deficiency. Such determinations may fall under the Sanford
and Son ruling (see paragraph 5f above). In order to avoid the need for a CoC
referral, contracting officers must ensure that competitive range
determinations are made on the basis of a comparative assessment whenever small
businesses are involved and responsibility related evaluation factors are used.
Please note that the existence of low merit, even to the extent that the
proposal would be considered as unacceptable, may constitute the only reason
for the elimination of the proposal from the competitive range (e.g., the price
could be lower than other proposals within the range), as long as the total
merit of the proposal is considered against other proposals.
TABLE
10
EXAMPLES
OF DEFICIENCIES
|
GOVERNMENT WANTS X, PROPOSAL OFFERS Y |
|
|
PROPOSAL OFFERS TO DO
WHAT GOVERNMENT WANTS, BUT IS NOT PERSUASIVE |
|
|
PROPOSAL DOES NOT
PROVIDE SUFFICIENT INFORMATION |
|
|
PROPOSAL EXCEEDS THE
GOVERNMENT'S REQUIREMENTS, BUT RESULTS IN UNDESIRABLE CONDITION |
|
(4)
Proposals which do not meet the "acceptable" level are usually
categorized as either unacceptable or susceptible of being made acceptable. A
proposal which is classified as the latter can not, by definition, be
eliminated from the competitive range solely on the technical rating. Low Cost,
Technically Acceptable (LCTA) procurements, however, are geared toward
determinations of acceptability and may cause problems when used with
responsibility related factors. Where such a technique is used, we recommend
that offers being eliminated from the competitive range be classified as
"deficient" rather than "unacceptable," even though the
identical proposal must be rated unacceptable in the award decision.
(5)
Multiple competitive range determinations are allowed and can be made at any
point in the procurement where offerors have been allowed an equal chance to
address deficiencies, e.g., after responses to clarification requests or after
best and final offers.
(6)
There is a lack of clear guidance in case law with respect to the elimination
of a proposal from the competitive range on the sole basis of informational
deficiencies for responsibility related factors. Given the low merit inherent
in informational deficiencies, however, such a proposal can be eliminated on
its total merit when compared to the other proposals without running afoul of the
Sanford and Son ruling.
10.
DISCUSSIONS AND BEST AND FINAL OFFERS (BAFOs)
a.
The conduct of discussions is covered in FAR 15.610. Under certain
circumstances, award may be made without discussions. The term
"discussion" is defined at FAR 15.601 to include any oral or written
communication between the Government and the offeror that involves information
essential for determination of acceptability of a proposal or that provides the
offeror an opportunity to revise or modify its proposal. Apparent clerical
mistakes, however, may be corrected prior to the establishment of the
competitive range and without entering into discussions where they qualify as
"clarifications" (also defined at FAR 15.601). Care should be
exercised when seeking clarifications to technical proposals. As with
discussions, all clarification requests and responses should be controlled by
the contracting officer. There is a fine line between clarifications and
discussions, and the evaluation board members can not be expected to know exactly
where this line is. Clarifications can also become discussions due to the
nature of the offeror's response. For this reason, the contracting officer
should review all responses to clarification requests. If those responses
represent revisions or modifications to the proposal, they should not be
forwarded to the evaluators. If the proposal is within the competitive range
after evaluation without benefit of the response, the response can be
considered during discussions.
b. The rules for awarding on the basis of initial proposals
without discussions differ significantly from the way proposals are evaluated
for award after discussions. The Comp Gen has defined the FAR language of
"lowest overall cost to the Government" to require award of the
lowest priced proposal within the competitive range. Furthermore, that proposal
must meet all the Government's minimum requirements. While the establishment of
the competitive range can eliminate some offers, buying best value is often
achieved only by holding discussions, since this is the only way to award other
than the lowest priced, technically acceptable proposal.
c.
FAR 15.610 requires that the offeror be advised of the deficiencies in its
proposal so that the offeror is given an opportunity to satisfy the Government's
requirements. Where there are no deficiencies, the requirement for discussions
can be met by the request for BAFOs. While discussions can be written or oral,
it is advisable to notify offerors of their deficiencies in writing.
d.
Discussions regarding technical proposals are usually limited to the
identification of deficiencies and the reasons why the Government considers the
deficiency to be such. This is due to the need to avoid technical leveling. FAR
describes technical leveling as "helping an offeror to bring its proposal
up to the level of other proposals through successive rounds of discussions,
such as by pointing out weaknesses resulting from the offeror's lack of
diligence, competence, or inventiveness in preparing the proposal." Technical
leveling can occur without successive rounds of discussions if the Government
suggests solutions to correct a proposal's deficiencies. Since the Government
desires to base its source selection decision at least in part on the
competence and ability of the offeror, it is inappropriate for the Government
to assist offerors by suggesting modifications which improve proposals. All of
the ideas in the proposal should be the offeror's. Another practice prohibited
by the FAR is technical transfusion. Technical information from competitor's
proposals must never be disclosed during discussions.
e. The need to avoid technical leveling and technical
transfusion should not restrict communications to the point that meaningful
negotiations are not conducted. Two-way communication is the key to successful
negotiations. While the Government negotiator should not suggest solutions to
identified deficiencies, it is imperative that he or she make the offeror
understand the Government's findings and the reasons for them.
f.
Contracting officers are also required to conduct discussions concerning the
offeror's cost or price proposal. A cost realism analysis may determine that an
offered price omits significant cost factors, making the risk of performance
high, while a cost or price analysis may determine that the offered price is
unreasonable. These are both deficiencies which the offeror must be given an
opportunity to correct.
g.
Best and final offers (BAFOs) provide all offerors within the competitive range
a common date for revision of their proposals and an end to discussions.
Ideally, the BAFOs will address the deficiencies identified in the initial
proposals and not represent completely new proposals. While you can not limit
the changes which the offeror can make in its BAFO, you can restrict them to a
form of modification that makes the final evaluation much easier. A page
substitution method is recommended for this. Where the substitution requires
more than one page, alphanumeric designations can be used (e.g., 10a, 10b, etc.).
h. The correspondence calling for BAFOs should inform offerors
of any remaining deficiencies in their proposal. Remember that the offerors
must be given a reasonable amount of time to revise their proposals and submit
BAFOs. Use of multiple BAFOs is strictly controlled (see DLAR 15.6).
11.
FINAL EVALUATION AND AWARD DECISION
a. After receipt of BAFOs, all offers in the competitive range
are evaluated once more in accordance with the evaluation factors specified in
the solicitation and the source selection plan. The evaluation of each proposal
against the evaluation standards is the same as that accomplished in the
initial evaluation with the exception that the final evaluation should be
limited to the changes made to initial proposals and their impact on the
overall proposal score or rating. The results of the final evaluation may be
documented on the same forms as the initial evaluation. It is usually
beneficial to show both the initial and final rating for subfactors and/or
factors on the same document. Each deficiency identified in the initial
evaluation should be addressed. This includes a discussion of how deficiencies
were corrected and why modifications did not correct a deficiency. As with the
initial evaluation, any rating other than "meets the standard" which
results from modification of a proposal must be justified (strong points as
well as weaknesses).
b.
As with the competitive range determination, the evaluation of the proposals
against the standards is followed by an evaluation of the proposals against
each other. This is normally accomplished by the SSAC. This relative assessment
will be followed by an integrated assessment in which the relative merits of
each proposal are used to determine the tradeoff among the evaluation factors
and identify the proposal which represents the best value.
c. SSAs will differ in the amount of data they want presented
and the format in which it is presented. Some like to see more detail and make
their own decisions, while some like to be presented with a recommendation for
award. However the data is presented, the SSA has the ultimate responsibility
to determine the relative merits of each proposal and to make the tradeoff
determination as to which offer represents the best value.
d.
The source selection decision is documented by the preparation of a Source
Selection Decision Document (SSDD), which contains the source selection
decision, the supporting rationale, and the direction to the contracting
officer to make the award (see appendix D for example). Since the SSDD becomes
part of the official contract file and is subject to public release, care must
be taken to exclude data and records which should not be subject to public
release.
a.
The goal of formal source selection is the exercise of business judgment in
selecting the proposal which represents the best value. The procedures used by
the Government are much more complex than those used by consumers in making
everyday purchase decisions, but the concept is the same. The SSA or the
consumer must weigh the benefits and weaknesses of competing offers and vendors
based on numerous factors which affect value. The first step is to identify
those factors which impact value; the second step is to determine how the
impact on value can be measured; the third step is to evaluate the offers on
the basis of those measurements, and the fourth and final step is to compare
the merits of the offers and decide which combination of merit under the
evaluation factors represents the best value.
b. There is another competitive evaluation system currently used
in the Government which has some of the same features and procedures as formal
source selection and it is one that most contracting officers have used and are
quite familiar with. It is the merit promotion system used to select personnel
for competitive positions. Prior to the issuance of a Job Opportunity
Announcement (solicitation), the hiring supervisor establishes the position
description (statement of work), the knowledge, skills and abilities (KSAs) on
which the applicants will be rated (evaluation factors), and the standards with
which the applicants will be rated (evaluation standards). As with source
selection, the KSAs are made known to the applicants, but the standards are
not. The applicant (offeror) submits an application (proposal) which addresses
each of the KSAs. A panel is then convened to rank the candidates and the
highest ranking candidates (those in the competitive range) are forwarded to
the hiring supervisor (SSA) for selection. While the nature of the decisions is
quite different, the procedures used to obtain information from candidates and
provide it to the selecting official have several similarities. The goal is the
same: to select from among several candidates the person or proposal which is
the most qualified or which represents the best value to the Government.
CHAPTER III STREAMLINED SOURCE SELECTION
a. Formal source selection is reserved for large dollar value,
complex items and services because such procurements take considerable time to
accomplish and are resource intensive for both the Government and the offerors.
Streamlined source selection techniques have been developed for those items
which do not justify the expenditure of time and resources involved in formal
source selection, but for which the Government still wishes to maintain
flexibility in determining the best value proposal. Streamlining is usually
accomplished in four ways:
(1)
Streamline the source selection organization to limit the number of people
involved in the source selection process.
(2)
Limit the number of evaluation factors and subfactors.
(3)
Limit the length of technical proposals.
(4)
Standardize the evaluation criteria and standards to reduce development time
and the amount of explanation and justification during evaluation.
b. These streamlining methods are, of course, interdependent. As
the number of evaluation factors and subfactors is reduced, the length and
complexity of proposals should decrease, fewer people will be needed to
evaluate them, and standardization becomes easier. Standardization will reduce
the need for internal controls inherent in separation of responsibility and
will decrease the time and resources needed to develop and obtain approval of
source selection plans. Another method of streamlining is to utilize
conditional subfactors (see paragraph 5i of chapter II).
c.
Under streamlined source selection, the SSA is usually a procurement official
and can be the contracting officer. The SSAC is usually eliminated and the
evaluation teams are either reduced in number and size or combined into a
single SSEB. A typical organization is shown in table 11.
d.
Since the evaluation of differences in the products or services to be provided
is more complex and requires the participation of more evaluators, streamlined
source selection is generally used where the product being acquired is set by a
specification or where variations in the characteristics of the offered
products are kept to a minimum. For this reason, the streamlined method is most
useful in selecting a contractor on the basis of minimizing performance risk,
where the primary tradeoff is paying more for a higher probability of performance.
e. Most streamlined source selections require the submission of
technical proposals. If evaluation factors are limited to price and past
performance, however, the Government could rely on inhouse data and eliminate
the requirement for technical proposals. This assumes, of course, that the
Government has access to a reasonably comprehensive performance data base. In
addition to having access to such a data base, the data on which the evaluation
will be based should be shared with the offeror for possible rebuttal. One way
this can be accomplished is by providing the data to the offerors during
discussions; another is through continuous data base management whereby data is
periodically updated and shared with affected companies. The Navy has
established a contractor performance data base for its Red/Yellow/Green program
which provides for such periodic notifications. While maintenance costs for
such a system are higher, it reduces the possibility of data verification
delays during discussions, and the costs can be easily offset if the system is
used for a large number of procurements. Whenever the Government will evaluate
proposals using data other than that contained in the proposals, this must be
specified in the solicitation (see appendix A for sample solicitation
language).
f. The streamlined source selection technique offers more
flexibility in determining this tradeoff than does the current iteration of the
Competition for Performance Program. Under the current Competition for
Performance, offerors either qualify as quality vendors or not (a go/no-go
decision); there is no distinction between two quality vendors. The streamlined
technique, on the other hand, allows for unlimited distinctions between
offerors. It should be noted, however, that the use of company specific
formulae under Competition for Performance would allow for such distinctions
between offerors.
TABLE 11
(Currently
Unavailable Electronically)
Another area where these techniques differ is in the timing of
the determination to consider factors other than price. Under Competition for
Performance, this determination is reserved for after best and final offers,
while under the streamlined source selection technique, it is normally made
prior to solicitation. If in-house data is being used under the streamlined
technique, however, the solicitation language could be adapted to delay the
determination as to whether to consider Government performance history data
until after best and final offers. Where technical proposals are required,
however, this determination must be made prior to and identified in the
solicitation. While there are distinct differences between the current
Competition for Performance program and the streamlined source selection
technique, these distinctions diminish when considering some of the variations
to the Competition for Performance program (see chapter IV).
CHAPTER IV COMPETITION FOR PERFORMANCE
a.
Competition for Performance is a buying best value technique introduced into
selected DLA contracting office procurements in 1987. This technique, addressed
in Defense Logistics Acquisition Regulation (DLAR) Subpart 15.6, recognizes
that among responsible offerors, varying degrees of quality and delivery
performance history exist. The basic concept is to allow the payment of a
higher price to contractors who have demonstrated a history of superior
performance under Government contracts. As currently used in DLA, vendors in
selected FSCs submit applications (similar to technical proposals on past
performance) in order to qualify as quality vendors. Inclusion on the quality
vendor list means a firm has demonstrated dependable quality and delivery
performance on previously awarded contracts for a class of items, specific
national stock number, or type of service during a period specified by the contracting
office. Based on this demonstrated dependable quality and delivery performance,
the contracting officer may award to a listed offeror at a price up to 20
percent higher than the low acceptable offer. Award to a quality vendor at a
price higher than the low offered price represents the contracting officer's
judgment that award to the listed firm provides the greatest value to the
Government, price and price related past quality and delivery performance
factors considered. While Competition for Performance clauses are included in
all solicitations for the selected FSCs, the decision to pay a higher price is
not made until after receipt of best and final offers. This decision is based
on several considerations (listed at DLAR 15.613-91(d)(3)(ii)) which offer the
contracting officer considerable flexibility in determining whether or not to
pay a higher price. Based on our experience to date, however, the quality
vendor usually offers the lowest price. Of the 14,000 awards made to quality
vendors through January 1990, only 45 were made at a premium, and the average
premium was only 5.9 percent.
b. The Competition for Performance technique has been
successfully applied at the Defense Construction Supply Center (DCSC), the
Defense Electronics Supply Center (DESC), the Defense Industrial Supply Center
(DISC), and the Defense Reutilization and Marketing Service (DRMS). The Defense
General Supply Center (DGSC) is identifying Federal Supply Classes (FSCs) for
its use. It is expected to be applied to an increasing number of procurements
in the future. The technique is most appropriate for procurements of supplies
or services that have historically experienced problems with unsatisfactory
quality and delivery performance, and in those FSCs where the greatest number of
actions can be covered. Because this technique prequalifies vendors for a more
favorable evaluation treatment rather than requiring the submission of a
technical proposal with each solicitation, it is most useful for items which
are purchased repetitively.
2.
CRITERIA FOR QUALITY VENDORS
DLAR Section
15.613-91(d)(1)(i) requires that criteria for inclusion on a list be developed
and provides recommended criteria. However, each participating contracting
office is authorized to develop its own criteria to reflect any unique
considerations for the class, stock number or service addressed. Criteria for
inclusion on the list of quality vendors are shown below for those contracting
offices currently using this technique:
a.
Defense Construction Supply Center
(1)
Applicants must have delivered three DCSC contracts in the FSC of application,
with an aggregate total of $10,000 or more during the previous 12 months.
(2)
Applicants must have demonstrated a 95 percent or higher on-time delivery of
DoD contracts during the previous 12 months.
(3)
Applicants must have delivered at least 95 percent of all identified DoD
contract awards within the previous 12 months without valid Product Quality
Deficiency Reports (PQDRs) charged against them and among the remaining 5
percent of contracts, none have Category 1 PQDRs charged to them.
(4)
In-plant quality deficiencies reported by the cognizant Quality Assurance
Representative must not exceed the levels in subparagraph (3) above, nor
include unresolved quality system deficiencies (MIL-I-45208, MIL-Q-9858, etc.).
b. Defense Electronics Supply Center
Applicants must have:
(1)
Delivered items on at least three DESC contracts in the given Federal Supply
Class worth an aggregate total of $10,000 or more during the past year.
(2)
Demonstrated a 90 percent or higher on-time delivery rate on DESC contract line
items in the given FSC during the past year.
(3)
Demonstrated quality performance on DESC contracts in the given FSC as follows:
(a)
Quality problems (noncompliance with specification or other stated contract
requirements specified for design, construction, material, performance, form,
fit, function or packaging and marking of the item being purchased) did not
exceed:
(1)
Major quality problems of one-half of 1 percent on contract deliveries received
during the past year.
(2)
Minor quality problems of 1 percent on contract deliveries received during the
past year.
(3)
Major quality problems are defined as PQDRs, unauthorized substitution,
improper packaging of Electrostatic (ES)/Electromagnetic (EM) materiel, test
failure of incoming receipts, or overbranded material. Minor quality problems
are defined as improper packaging, preservation, packaging marking and bare
item marking.
(b)
No known in-plant quality system problems such as failure to comply with the
contractor's specifications, military specifications, or contract quality
system standards (i.e., MIL-I-45208, MIL-Q-9858, etc.) that have resulted in
unresolved Defense Contract Management Command (DCMC) corrective actions.
c.
Defense Industrial Supply Center
(1)
During the 12-month period preceding application, the firm has delivered items
on at least 15 DISC awards (including contracts, purchase orders, and calls
under Blanket Purchase Agreements) for supplies covered by the list, such
awards worth an aggregate total of at least $50,000.
(2)
During the 12-month period preceding application, the firm has demonstrated a
95 percent or higher on-time delivery rate on DISC contract line items (CLINs)
for supplies covered by the program. For purposes of this criterion,
"on-time delivery" means delivery within the time prescribed by the
delivery schedule set forth in the contract as it was originally issued, and/or
as adjusted in a formal modification for delays which are considered excusable
as delineated in the clause entitled "Default."
(3)
The firm has demonstrated superior quality performance on DISC contracts for
supplies covered by the program, in terms of the firm's compliance with item
descriptions, drawings, specifications, quality assurance provisions (QAPs),
and any other stated contract requirements pertaining to item design,
construction, material composition, form, fit, function, packaging, marking,
quantity delivered, and destination to which delivered. In assessing this
superior performance, consideration will be given to reports of discrepancy
(RODs) and quality discrepancy reports (PQDRs), and such other noncompliance
documents as may be generated by DISC's customers or by other Government
personnel qualified to evaluate a firm's quality performance. Specifically, the
firm must have demonstrated its conformance to major contract terms in that its
performance record in all classes of material is free of unauthorized
substitutions, and in that the firm has maintained a verified PQDR rate on
recent contracts in the relevant Blue Chip List FSCs of 0.5 percent or less.
The firm must also have demonstrated its conformance to minor contract terms in
that it has maintained a verified ROD rate on recent contracts in the relevant
Blue Chip List FSCs of 1 percent or less, pertaining to such matters as
improper packaging, improper preservation, improper marking, misdirection of
shipment, and quantity discrepancy under or over the permissible variation.
(4)
The firm has otherwise met the standards of superior performance and integrity
on DISC contracts. Consideration shall be given to any questionable business
practices of a Blue Chip applicant; to the applicant's overall on-time delivery
rate in all DISC supply classes; to the conclusions of any recent preaward
survey; to the applicant's overall pattern of completing contracts as
originally agreed upon and awarded; to the applicant's overall rate and pattern
of requesting price increases, order cancellations, or waivers from contract
terms and conditions after award; to the contractor's quality inspection
systems and technical capabilities; to the contractor's rate of test failures
for testing done on incoming receipts and stock on hand; and to any other
matter directly relating to the purpose for which the Blue Chip Vendor List
program is established.
d.
Defense Reutilization and Marketing Service
The offeror must demonstrate that it:
(1)
Either removed and disposed of 100 line items, or performed services worth an
aggregate of $100,000, under one or more DRMS Polychlorinated Biphenol (PCB)
removal and disposal contracts during the past 12 months; or
(2)
Either removed and disposed of 150 line items, or performed services worth an
aggregate of $150,000, under one or more DRMS PCB removal and disposal
contracts during the past 24 months; and
(3)
Achieved a 99 percent or greater on-time removal rate on DRMS one-time
contracts or delivery orders issued during the report period under which it
attempts to qualify;
(4)
Achieved a 95 percent or greater on-time delivery of required audit trail
documents on delivery orders or one-time contracts issued during the report
period under which it attempts to qualify;
(5)
Does not have quality problems on DRMS PCB contracts which exceed the following
percentages for the categories indicated below:
(a)
Category 1 (Major Quality Problems). Category 1 quality problems are defined as
departures from contract requirements which adversely affect public health or
safety; or any other basic objective of the contract. The offeror must
demonstrate that it had 0 percent, i.e., no Category 1 quality problems, on
services performed under delivery orders or one-time contracts issued during the
report period under which it attempts to qualify. Examples of Category 1
quality problems include, but are not limited to:
(1)
Failure to provide assurance that hazardous waste was treated or disposed of in
a manner such that it no longer constitutes "hazardous waste" as
defined under the contract;
(2)
Failure to make waste pickups in a safe manner; or
(3)
Failure to transport the waste in a safe manner.
(b)
Category 2 (Minor Quality Problems). Category 2 quality problems are defined as
any departures from contract requirements which are not considered Category 1
quality problems. The offeror must demonstrate that Category 2 quality problems
did not exceed 1 percent on services performed under delivery orders or
one-time contracts issued during the report period under which it attempts to
qualify; and finally,
(6)
Has no known uncorrected contractor or subcontractor quality control problems
which were brought to the attention of the contractor by the Government.
a. Variations/tailoring of the currently used Competition for
Performance program is authorized in DLAR 15.6. These variations include:
(1)
Multitier evaluations, where certain vendors may qualify for a 5 percent
differential while others qualify for a 10 or 20 percent differential;
(2)
Contractor specific formulae, where a specific differential is computed for
each vendor; and
(3)
Use of in-house data, rather than requiring the vendor to apply for the program
and submit supporting data.
b. Such variations represent the middle ground between the
Competition for Performance Program and streamlined source selection, and, in
fact, these techniques can overlap. A procurement under Competition for
Performance using contractor specific formulae generated by in-house data would
be quite similar to a streamlined source selection using in-house data. The
application of an evaluation preference under Competition for Performance can
also be used in conjunction with some of the cost factors addressed in the next
chapter of this handbook.
c.
The Competition for Performance Program can also be used with Indefinite
Delivery Contracts (IDCs). The payment of a higher price under an IDC, however,
raises the possibility that, if the contractor does not maintain its standing
as a quality vendor throughout the contract period, the Government will not get
the added value it is paying for. For this reason, IDCs under the Competition
for Performance Program should reserve to the Government the right to cease
placing orders or cancel the contract if the contractor's performance no longer
meets quality vendor criteria.
a.
One of the simplest and most effective techniques available to buying personnel
is that of applying an evaluation factor or factors to a prospective
contractor's offer as a consequence of the latter party's poor or marginal
prior performance. These factors acknowledge the costs to the Government of
doing business with a company or individual that does not deliver good quality,
conforming goods or services on time. While it has always been known that there
are costs associated with contracting with such firms, until recently, the
means were not available, short of establishing specific evaluation factors, to
take those costs into account.
b.
The addition of cost factors to the offered price provides a convenient tool
for measuring the relative worth, or quality, of a contractor's performance, as
premised on its past Government contract history. These cost factors can be
categorized into two groups; costs that will be or are expected to be incurred
by the Government in an attempt to avoid poor performance and those costs which
we anticipate the Government to incur as a result of anticipated poor
performance. Thus, if an offeror submits a $10,000 offer for a particular
acquisition, but we know from our past experiences with that contractor that we
will have to perform a preaward survey to determine its responsibility for
award of the instant contract, inspect the contractual output at source (rather
than rely on the more typical and less costly inspection at destination), be
prepared to accept delinquent deliveries, and face the possibility of major and
minor nonconformances, it is certain that the overall award will be
substantially more than the $10,000 offered price. But how can those costs be
quantified? How can the true "bottom line" of a purchase be
determined?
c.
The DLA Operations Research and Economic Analysis Office (DLA-LO) was requested
to capture these costs for use in evaluating offers. These costs were
quantified for each factor separately, with the idea that eventually an
overall, individual, "weighted" cost factor could be provided for
each contractor. The first result of this request was the offer evaluation
factor for source inspection, substantiated by the DLA-LO report,
"In-House Cost of Source Inspection," July 1987. The policy and
provisions for use of the factor ($150 per inspection for small purchases, $175
per inspection for all others) can be found in DLAR 4105.1 at 13.107(90)(a),
14.201-8(a)(90), 15.605(b)(93), and 52.213-9001. The next report was "Cost
of a Preaward Survey," June 1988. In it, DLA-LO determined that the direct
costs of accomplishing a preaward survey (PAS) are $1,075 for a formal survey
and $37 for an informal survey; the weighted average of the two was computed to
be $369. Indirect costs of survey performance, predicated on our holding
additional safety levels of stock due to increased lead-time, were also
provided by DLA-LO. They were expressed in formulae, according to the total
dollar value of the instant acquisition. However, until the use of evaluation
factors becomes more familiar both to buying personnel and to the GAO, only the
average direct-cost component of these factors will be utilized. The DLAR
coverage on the preaward survey factor can be found at 13.107(90)(b),
14.201-8(a)(91), 15.605(90), and 52.215-9001.
d. We have also received the final DLA-LO report on delinquent
deliveries and the draft reports on major nonconformances (when the latter are
documented via PQDRs and storage quality reports/depot complaints) and minor
nonconformances (RODs). Policy guidance on implementation of these analytical
tools is scheduled for FY 1991.
a. The following are examples of how these factors can be used
during offer evaluation. The first utilizes only those factors currently
available to buying personnel; the second also includes an example of our
expected use of the factors for delinquencies and nonconformances. Because
these latter two have not yet been made available to the field, this is
provided for purposes of illustration only.
b.
EXAMPLE 1
Assume
that four contractors, A, B, C, and D, have decided to make offers against a
particular solicitation. The offers they submit, prior to application of the
evaluation factors, are as follows:
contractor A = $9,900
contractor B = $10,000 contractor C = $10,100 contractor D = $10,200
Assume
further that contractor A has a poor performance history: in the past year, it
received two PQDRs, on average, per contract. A policy decision has been made
to source inspect its contractual output on any subsequent contract. One
shipment (out of six scheduled shipments) was 132 days late. A preaward survey
will be required because of both the quality and the delinquency problems.
Contractor
B has a below-average performance history. In the past year, it had one
delinquent delivery (90 days late) out of three scheduled shipments. A PAS will
be required because of the lateness problem; source inspection is not
indicated, since the quality of the items received was satisfactory.
Contractor
C also has a below-average performance history. During the past year, it
averaged one PQDR per contract. Although there were no delinquencies, both source
inspection and a preaward survey will be required for quality reasons.
According to the Center's
records, contractor D has performed satisfactorily on all Government contracts
during the applicable period, and will not have any evaluation factors applied
to its offer.
Prior
to the availability of offer evaluation factors (and assuming that all
contractors had been determined to be responsible), contractor A would have
been awarded the contract on the basis of "lowest acceptable
offeror." If, however, the evaluation factors for preaward survey and
source inspection are applied, a different result emerges:
contractor
A: $ 9,900 offer 369 PAS factor 150 source inspection factor 10,419 total
evaluated offer
contractor
B: $10,000 offer 369 PAS factor $10,369 total evaluated offer
contractor
C: $10,100 offer 369 PAS factor 150 source inspection factor $10,619 total
evaluated offer
contractor
D: $10,200 offer - is the total evaluated amount
Under
this set of circumstances, the "good quality" performer, contractor
D, would also be the successful offeror, since $10,200 is the lowest evaluated
offer.
c.
EXAMPLE 2
Assume
the same contractors, original offers, and the same set of operative facts.
Assume also that the current solicitation is for an item in federal supply
class (FSC) 5320, managed by DISC, and that the proposed award will contain one
contract line item, or "CLIN." The following illustrates how we
envision using factors for delinquencies and PQDRs.
contractor A: $10,419 evaluated
offer (original offer plus PAS and source inspection factors)
132
days total lateness/six shipments = 22 days average lateness
|
.00246328 |
day-cost ratio for this FSC (from DLA-LO report) |
|
x22 |
days average lateness |
|
.05419 |
evaluation factor |
|
x
$9,900 |
contractor's offer |
|
$
536.48 |
total indirect costs of contractor's delinquency |
|
+11.61 |
direct costs associated with delinquency |
|
$
548.09 |
offer evaluation amount for delinquency before
application of the scaling factor |
|
x.5 |
|
|
$
274.045 |
= $274.04 |
Historically,
contracts with this contractor for this particular FSC contain an average of
two lines (CLINs); as stated, the instant solicitation is for one CLIN.
Therefore, the "scaling factor" is 1 divided by 2, or 0.5. (The
assumption is that the larger the number of individual lines, the greater the
chance of experiencing multiple complaints. This makes necessary a scaling
factor consisting of the number of lines under consideration divided by the
average number of lines per contract with this contractor for this FSC.)
For
every PQDR per contract for this FSC: Indirect costs:
.05921
(factor from chart in DLA-LO report) x $9,900 contractor's offer $ 586.18 total
indirect costs +319.00 direct costs associated with PQDRs (for this FSC) 905.18
offer evaluation amount for each PQDR per contract x 2 PQDRs per contract for
contractor A $1,810.36 x.5 "scaling factor" $905.18 Contractor A's
offer evaluation amount for PQDRs
contractor
A's total evaluated offer:
$10,419.00 offer, PAS,
source inspection 274.04 delinquency + 905.18 PQDRs $11,598.22 total for
purposes of consideration for award contractor B: $10,369 evaluated offer
(original offer plus PAS factor)
90
days total lateness/three shipments = 30 days average lateness for purposes of
this example, assume that contractor B's contracts for this FSC historically
contain an average of three CLINs. The scaling factor is 1 divided by 3, or
0.33.
.00246328
day-cost ratio for this FSC (from DLA-LO report) x30 days average lateness
.07390 evaluation factor x $10,000 contractor's offer $739.00 total indirect
costs of contractor's delinquency +11.61 direct costs associated with
delinquency $ 750.61 offer evaluation amount for delinquency x.33 scaling factor
$ 247.70
contractor
B's total evaluated offer:
$10,369.00
offer and PAS + 247.70 delinquency $10,616.70 total for purposes of
consideration for award
contractor
C: $10,619 evaluated offer (original offer plus PAS and source inspection
factors)
Historically,
contracts with this contractor for this particular FSC contain an average of
only one CLIN; the instant solicitation is also for one CLIN. Therefore, the
"scaling factor" would be 1.0, and no additional scaling computation
would be necessary.
For every PQDR per contract for this FSC:
Indirect costs:
|
.05921 |
(factor from chart in DLA-LO report) |
|
x
$10,100 |
contractor's offer |
|
$
598.02 |
total indirect costs |
|
+319.00 |
direct costs associated with PQDRs (for this FSC) |
|
$
917.02 |
offer evaluation amount for each PQDR per contract |
(Contractor
C averages one PQDR per contract; no scaling factor is necessary.)
contractor C's total evaluated offer:
|
$10,619.00 |
offer, PAS, source inspection |
|
+917.02 |
PQDRs |
|
$11,536.02 |
total for purposes of consideration for award |
Contractor D is unchanged; its offer of $10,200 is by far the
lowest evaluated offer. If, however, contractor D had not submitted an offer,
in examples 1 and 2 the apparently successful offeror from among the other
three would have been contractor B. If neither contractor B nor D had been
under consideration, and we were only evaluating offers from contractors A and
C, prior to application of the factors and evaluating strictly on a
"bottom line of offer" basis, contractor A would have received the
award; in example 1, the award would also have been made to contractor A. In
example 2, however, as between contractors A and C then award would have gone
to contractor C. As has been stated several times already, application of the
factors demonstrates our awareness of different kinds of costs associated with
doing business with contractors whose performance is not strictly to the letter
of the contracts they have been awarded.
d.
EXAMPLE 3
This
example demonstrates the use of cost factors in conjunction with the
Competition for Performance program. Please note that the factors utilized are
for source inspection and preaward survey costs only. The use of cost factors
based on anticipated costs (delinquent deliveries and nonconformances) in
conjunction with the Competition for Performance program is inappropriate,
since these anticipated costs are already considered in the 20 percent price
differential.
Assume
that three contractors, A, B, and C, have made offers on a DISC solicitation
for FSC 5310, and that Competition for Performance analysis is being used. The
award contemplates two shipments. Their offers, prior to application of any
buying best value technique, are as follows:
contractor A = $24,000
contractor B = $25,000 contractor C = $26,000
If
contractor A has a poor quality and delivery history, contractor B's
performance is historically adequate but unremarkable, and contractor C is a
listed "Blue Chip" contractor for that particular FSC, contractor C
could be awarded the contract without application of the evaluation factors
because its bid is less than 20 percent higher than the otherwise low offeror,
A. If, however, contractor A's offer was $23,000, contractor B's remained at
$25,000, and contractor C's offer was $28,000, contractor C would not receive
the award, without additional evaluation, on the basis of Competition for
Performance alone. (This is so because its offer is more than 20 percent higher
than contractor A's apparent low offer.)
If
evaluation factors were utilized, though, the following is the likely result.
Assume
that during the past year contractor A has received two PQDRs (on average) per
contract.
There
has been a policy decision made to source-inspect its contractual output on any
subsequent contract. One shipment (out of six scheduled shipments) was
substantially late. A preaward survey will be required because of both the
quality and the delinquency problems. Contractor B has had a few minor
nonconformances and several delinquencies of less than 30 days duration. The
contracting officer has decided that a preaward survey is not warranted, but
that contractor B cannot meet the criteria for inclusion on a "Blue Chip
Vendor" list. Under these circumstances, contractor A's total evaluated
offer is $23,000 + $369 = $23,369. Contractors B and C will still be evaluated
at $25,000 and $28,000, respectively. Contractor A is clearly still the
"lowest," but now Competition for Performance does figure into the
selection decision: contractor C's $28,000 offer is within 20 percent of
contractor A's total evaluated offer of $23,369, and so contractor C will
receive the award.
Note that example 3 excludes the factor for source inspection,
because this contains an indirect cost component. Since the Competition for
Performance differential is based on total costs to the Government that are
avoided by award to a listed vendor, no offer evaluation factor having an
indirect cost component may be considered along with Competition for
Performance, as this would result in double counting of those variable costs.
Only the factor for preaward survey performance, which solely contains a direct
cost component, may be used in conjunction with Competition for Performance
analysis.
CHAPTER VI
RESPONSIBILITY DETERMINATIONS
a.
Responsibility determinations are required by FAR 9.103. This limits the award
of contracts to those prospective contractors that affirmatively demonstrate
their capability to perform the contract. While not normally considered as a
source selection technique, responsibility determinations limit awards based on
low price to those prospective contractors who meet our minimum criteria of
responsibility. The tradeoff is paying a higher price for a greater probability
of performance. The use of this technique in a go/no-go manner, however, limits
the flexibility of this technique in making the tradeoff. In addition, the
final decision on responsibility determinations for small businesses rests with
the Small Business Administration (SBA), rather than the contracting officer.
Still, this technique can be effectively used as a means of buying best value
by eliminating those offerors who do not have the capability to perform the
contract. Its effectiveness depends on the ability and willingness of the
contracting offices to make firm, solid responsibility determinations.
b.
Responsibility determinations are the simplest source selection technique to
use. A proposal is not required, the evaluation is generally limited to the
prospective contractor, and such an evaluation may not be required where the
company's previous performance or status in the commercial market is sufficient
for the contracting officer to make an affirmative determination. The evaluation
of responsibility, however, can be quite extensive. Prospective contractors are
normally evaluated as to financial resources, ability to comply with delivery
or performance schedule, performance record, experience, organization,
operational and quality controls, production equipment and facilities, and
eligibility under applicable laws and regulations. The contracting officer may
also establish special standards of responsibility.
c.
Because of the relative simplicity of this technique, improving the quality of
the responsibility determination should be the first option to look at for
purchases of specification items which have experienced some performance
problems in the past.
The goal is to eliminate from consideration those companies
which cannot or will not perform in accordance with the contract.
d.
The preaward survey is the primary vehicle for obtaining information on the
prospective contractor. The quality of the preaward survey and the
responsibility determination which is based upon it can be improved through
close coordination with the contract administration office (CAO) performing the
survey. This starts with identification of any areas of special concern. When a
certain aspect of the preaward survey will play an increased role in the
responsibility determination, the CAO should be requested to pay special
attention to that area. Do not assume that the CAO has access to the same
information as the contracting officer. If a proposed contractor has
experienced performance problems under past contracts, the contracting officer
should identify those problems and request the CAO to place special emphasis on
the contractor's attempts to resolve past problems and keep them from
recurring. When the contracting officer is concerned over capacity of the contractor
due to the number of contracts being won, this should be communicated to the
CAO. As the preaward survey progresses, the results of the survey may identify
new areas of concern or new areas which need investigation. Identification of
these areas should not wait until a report has been made. The contracting
officer must encourage two-way communications during the survey.
e.
The CAO should not be expected to be technical experts on all commodities.
Where technical expertise resides in the purchasing activity, the purchasing
activity should make these experts available to assist in the preaward survey.
Communications and coordination between the contracting office and the CAO are
the key ingredients to responsive, high quality preaward surveys.
f. While the contracting officer often relies on data obtained
through the preaward survey and the CAO's recommendation, the contracting
officer is the official responsible for making the responsibility
determination. In making this determination, the contracting officer must
consider not only the preaward survey recommendation, but all relevant
information regarding the prospective contractor.
g.
Another way to eliminate poor performers is through debarment. A debarment is a
time specific determination of nonresponsibility. The FAR provides that a
contractor may be debarred for willful failure to perform or for "a
history of failure to perform, or of unsatisfactory performance of, one or more
contracts." Individual contracting offices do not have authority to debar;
this authority rests with the DLA Staff Director for Contracting Integrity
(DLA-J). Once the decision is made, however, it applies Government-wide.
Although debarments represent responsibility determinations, debarment
determinations for small businesses are not subject to review by SBA.
h. Unlike debarments on the basis of criminal or seriously
improper conduct, which are usually initiated by Counsel, recommendations for
performance based debarments rely on contracting officers to evaluate performance
and initiate the action. Procedures for initiating performance based debarments
are specified at DLAR 9.403-3(90). These procedures were promulgated in
September 1987 to encourage DLA contracting offices to utilize existing
authority to propose poor performers for debarment. This effort has been quite
successful, with 43 firms debarred by DLA for poor performance or willful
failure to perform in calendar years 1988 and 1989.
CHAPTER VII SAFEGUARDING SENSITIVE INFORMATION
a. When a person is assigned to a source selection organization,
he or she becomes part of a professional group. All members of that group must
conform to standards of conduct that protect the interests of the Government
and the competing offerors. Persons participating in a source selection
activity should thoroughly familiarize themselves with the requirements set out
in FAR 3.101 and DLAR 5500.1, Standards of Conduct.
b.
The effectiveness of the source selection process requires that all data and
information be handled with the utmost discretion so as to avoid any compromise
that would be detrimental to the best interests of any of the parties or that
would affect the integrity of the proposal evaluation and source selection
process. Protecting source selection data and ensuring that source selection
personnel are aware of the standards expected of them should prevent any
ethical problems.
a. The SSA must ensure that Government personnel participating
in the source selection process are free from conflicts of interest. Each panel
or board member must complete a "Conflict of Interest Certification"
or similar certification (see appendix E for an example). These certifications
should be forwarded to the SSA with the employee's nomination. Since it is
impossible to know with any certainty who will offer under the procurement at
the time that panel and board members are nominated, a proposal from an
unexpected source may create a conflict of interest. The certification should
therefore provide for recertification after receipt of proposals and require
disclosure of any conflict to which the person later becomes aware.
b.
The SSA should also review DD Forms 1555, Confidential Statement of
Affiliations and Financial Interests, Department of Defense Personnel, for
those nominees who are required to file them, to determine whether the
individual, or member of his or her immediate family, has a financial interest
that could in any way influence, or be judged to appear to influence, that person's
decisions. Having a financial interest in any competing company is usually
grounds for disqualifying the person from serving. Responsibility for
disqualifying individuals rests with the SSA. The same conflict of interest
requirements apply to the SSA, and the contracting officer should ensure that
the SSA completes the "Conflict of Interest Certification."
c. Special care must be taken to avoid conflicts of interest in
Commercial Activities (A-76) acquisitions. Members of the Government
organization subject to A-76 review must not participate in the evaluation of
proposals, and evaluation panel members must not be involved in the preparation
of the Government's Most Efficient Organization or in-house cost estimate.
3.
PROTECTING SOURCE SELECTION RECORDS AND DATA
a. Source selections can generate a large volume of data and
records. During the conduct of the procurement, most of these data and records
are sensitive, i.e., disclosure would affect the integrity of the procurement
by providing a competitive advantage to one offeror over another, or would
injure an offeror through the disclosure of proprietary information. All
sensitive data and information received or developed during the source
selection process shall be marked "Source Selection Sensitive" and/or
"For Official Use Only (FOUO)." This will exclude them from automatic
disclosure under a Freedom of Information Act request. Classified source
selection documents must be marked and protected according to DoD 5200.1-R,
Information Security Program Regulation.
b.
Table 12 shows a list of source selection records taken from the Air Force
regulation on formal source selection. Those items marked with an asterisk (*)
are considered to be "Source Selection Sensitive."
c.
Access to source selection sensitive information must be strictly controlled at
all organizational levels.
SOURCE
SELECTION RECORDS
|
o Program Management Directive, when it contains directives
pertinent to source selection |
|
o Business Strategy Panel presentations (viewgraphs and text)
and minutes |
|
o *Source list screening criteria, including justification(s)
for not issuing a solicitation to specific sources |
|
o *Results of screening, including justification(s) for not
issuing a solicitation to specific sources |
|
o *The Source Selection
Plan |
|
o SSA delegation request and SSAC chairperson nomination
request |
|
o The Source Selection Plan approval document (Note: Any
directed changes to the SSP would require the approval document to be marked
"Source Selection Sensitive.") |
|
o Evaluation criteria (also revealed in solicitation) |
|
o *Weights and standards |
|
o *Narrative assessments |
|
o *All orders or other documentation establishing SSAC and
SSEB members, and amendments thereto |
|
o Messages and other notices notifying SSAC and other source
selection personnel of meetings |
|
o Record of attendance and a summary of proceedings of any
preproposal conference |
|
o Request for Proposal |
|
o *All proposals and amendments or alternative proposals
submitted by each offeror, including a summary of any oral presentation made
directly to the SSEB |
|
o *Evaluation reports including Independent Cost Analysis
(ICA) used in the evaluation and any Most Probable Cost (MPC) data |
|
o *Inquiries sent to offerors by the SSEB during the
evaluation, and responses thereto |
|
o *Deficiency reports, clarification requests, and offerors'
responses |
|
o *The SSEB Evaluation Report |
|
o *The SSAC Analysis Report |
|
o *All source selection presentations (viewgraphs and test) |
|
o SSA Decision Document |
|
o Memoranda of instructions directing award received from SSA |
|
o Lessons learned report |
|
o *Records of attendance at source selection decision
briefings |
|
o Schedules of source selection meetings |
|
o Any other data or documents having a direct relationship to
the source selection action (Screen documents for necessity to mark as source
selection sensitive.) |
The right to source selection information does not extend to the
organizational chain of command of individual SSAC, SSEB, advisors, or other
members involved in the source selection process. A need-to-know must be
clearly established before any individual or activity is afforded access to, or
release of, source selection data while the source selection is in process.
Access is defined as disclosure by permitting a source selection document
contained in the source selection record to be viewed, but not physically
retained by the requester. Release is defined as disclosure by permitting a
copy of a source selection document to be physically retained by the requester.
During source selection, personnel responsible for audit of proposals and
negotiation of contracts must comply with all requirements for protection of
source selection data referenced in DoD 5200.1-R.
d. While source selection is in process, disclosure of source
selection data is the exclusive responsibility of the SSA. Subsequent to
contract award, disclosure authority to permit access to, and release, of
source selection records is vested in the HCA for the specific contract
involved. Even though source selection data may fall within the categories of
materials that may be withheld from public disclosure (for example, an SSAC or
SSEB evaluation report), each document, or portion, thereof must have an
independent basis for exemption. Any questions regarding public disclosure of
information should be considered on a case-by-case basis and should be referred
to the appropriate Freedom of Information Act advisors.
e. The general criteria that applies to the protection or
release of source selection data are found in DoDD 5400.7, DoD Freedom of Information
Act Program (DFARS Appendix L). Information which would otherwise be exempt
from disclosure may be subject to disclosure when incorporated by reference
into a document containing releasable information (for example, when cited in
the resulting contract). Such information, unless classified, should be
released upon request following contract award unless there is a compelling
reason for not releasing the information. Falling within one of the exception
categories is, in itself, not sufficient reason for withholding source
selection data.
f.
Controlled access and release of source selection information extends beyond
the immediate period of the source selection action. Authority for access and
release must be obtained in writing until the official contract file is
destroyed in accordance with FAR Subpart 4.1.
g.
Protection of sensitive data and records can be facilitated by following these
procedures:
(1)
Access should be restricted to those who have a strict need-to-know. The data
provided to each evaluation team should be limited to that required to
accomplish their evaluation.
(2)
A "Certificate of Nondisclosure" statement should be completed by all
individuals expected to have access to sensitive information. An example of
such a statement is at appendix E.
(3)
All data and records should be reviewed to determine sensitivity. Those which
are determined to be sensitive must be clearly marked and protected by a cover
sheet.
(4)
Copies of proposals and other sensitive documents should be strictly
controlled. Each copy should be numbered and authority to make additional
copies should be restricted to a single official. All extra copies of proposals
and documents should be destroyed after the selection.
(5)
Discussions with offerors must be strictly controlled by the contracting
officer. The conduct of discussions is usually reserved for contracting
personnel (the contract definitization team) and those specifically authorized
to assist. No evaluation team member should discuss any aspect of a proposal
with an offeror without the express authorization of the contracting officer.
(6)
Discussions between groups within the source selection organization must also
be controlled. Advisors and members of the SSAC, SSEB, or of any ad hoc working
group should limit discussion of the proceedings with members of other groups
to those necessary to carry out their responsibilities under the Source
Selection Plan. Discussions with any individual outside the source selection
organization must be authorized by the SSA.
(7)
Do not disclose the names of individuals involved in the source selection to
the competitors. The offerors will discover the identities of the SSA, the
contracting officer, and the negotiators during the procurement process.
Offerors do not have a need or right to know the identity of other individuals
while the source selection is in progress. This information should also be
limited within the Government based on need-to-know.
(8)
Do not assume that individuals involved in the source selection know their
responsibilities regarding protection of sensitive information. Source
selections involve personnel who are unfamiliar with the arm's length
relationship required in dealing with offerors. Ensure that every individual
understands the procedures being used to protect sensitive information and
provide a single point of contact for questions.
h. Any unauthorized disclosure or release of source selection
information classified in accordance with DoD 5200.1-R or designated FOUO and
not considered public information in accordance with FAR Subpart 24.2 will be
investigated and, as appropriate, treated under disciplinary procedures
authorized by law or administrative procedures.
CHAPTER
VIII OTHER BUY BEST VALUE TECHNIQUES
a.
Description. Multisource contracting involves awarding more than one contract
for the same item to more than one supplier under the same solicitation. This
approach has historically been used in support of industrial mobilization base
requirements through award of partial quantities in order to establish or
maintain alternative sources, or to expand or maintain an adequate industrial
mobilization base. (See FAR 6.202 and 6.302-3.) Multisourcing is also used for
production testing of new or modified items to determine mass-producibility.
Multisource contracting can also be a buy best value technique when used in
business risk situations, utilizing full and open competition, to reduce the
impact of contractor performance problems and promote supply availability. This
chapter will be concerned with the latter uses of the multisourcing concept.
Multisource contracting reduces business risk by recognizing that, in certain
situations, the increased likelihood of timely delivery or performance provided
by awarding to more than one source is sufficiently important to outweigh the
increased cost of making multiple awards.
b.
Application. Multisource contracting should be considered for use as a buy best
value technique in the following situations:
(1)
CONTRACTOR NOT RESPONSIBLE FOR ENTIRE QUANTITY. FAR 9.103 provides that award
only be made to responsible prospective contractors. Therefore, once the
contracting officer determines that the low offeror cannot provide the full
quantity of supplies or services required, the contracting officer is not
required to consider that source for quantities beyond its capacity and may
award the balance of the requirement to the next low responsive, responsible
offeror. When using this authority to make multiple awards, the responsibility
determination must reflect a reasonable and detailed rationale for determining
that award of a single contract to one contractor will overtax that
contractor's production or service capacity.
(2)
Supply Assurance. Multiple awards under full and open competition may also be
appropriate to ensure the availability of supplies in a variety of business
risk situations, including supply shortages resulting from delinquencies or a
terminated contract. Both DCSC and DPSC are employing the multisource concept
to address severe supply shortages of specific items. DCSC is awarding three
contracts for life preservers to ensure adequate supply coverage of an item
which was previously in its top 20 backorder status. DPSC has chosen to use
multisource contracting for procurement of battle dress uniform (BDU) caps and
Army shirts to help correct longstanding problems with delinquent deliveries
and delivery of poor quality products.
c.
Flexibility of the Multisource Concept
(1)
When using multisource contracting for supply assurance, best value can be
enhanced by creating competition between the contractors for future quantities.
One such approach is the multisource/indefinite quantity contract (IQC). Under
full and open competition, two or more IQCs are awarded for the same item. Once
the guaranteed minimum quantities have been ordered under each individual IQC,
the contracting officer evaluates price, quality, and delivery factors to
determine the distribution of follow-on orders. Another approach is to use a
multisource/definite quantity contract with options, and determine the
distribution of option quantities on the basis of price and performance during
the initial contract period. These contracting approaches not only ensure that
delivery and quality are evaluation factors considered in the selection of the
source for future quantities, but provide a direct incentive for performance
under the initial quantity and additional protection against supply failure.
Multisource contracting may also be used in combination with other long-term
contracting approaches to achieve extended coverage.
(2)
Two DLA Supply Centers are already successfully employing such combinations to
enhance the usefulness of the multisource concept. DPSC pioneered the use of
multisource/IQC in its procurements of BDU caps. Three IQCs were awarded with
each company receiving equal quantities under the initial delivery order.
Subsequent delivery orders were issued using a matrix clause which evaluated
contractors on the basis of delivery and quality performance as well as price.
The contractor that received the highest combined score received the largest
quantity on the next order; the other two received lesser amounts in relation
to their relative score. The best performing firm can receive up to 50 percent
of the additional orders.
(3)
DPSC is making multiple awards for Bromine Cartridges using IDCs. Two awards
will be made for equal quantities in the base year. Option quantities for up to
4 additional years, however, will be split 60/40 on the basis of quality and
delivery performance.
d.
Consideration in Using Multisource Contracts
(1)
When contemplating multiple awards based on a supply assurance rationale, the
solicitation must clearly state that the Government may award to more than one
source and that the Government may award to other than the low offered price.
Sample solicitation provisions are provided in section II of DLAH 4105.2, Long-Term
Contracting Handbook, and in appendix A of this handbook. These provisions
replace the one at FAR 52.215-34. The FAR clause is used only when the
contracting officer anticipates that multiple awards would be economically
advantageous based on offered price alone; it is not required where the basis
for multiple awards is supply assurance. While it is acceptable to convey the
Government's specific intention to make multiple awards (as opposed to
maintaining the right to do so), contracting offices should exercise caution in
doing so where a limited number of sources are available, since this could
adversely impact price competition. In any event, the determination to make
multiple awards cannot be conclusively made until after receipt of offers, and
the Government must preserve its right to make a single award. Source selection
can be based on the lowest priced responsible offers, or on price and other
evaluation factors specified in the solicitation. In order to incentivize
contractor performance under the initial order quantity, the solicitation
should convey the Government's intention to place subsequent orders or exercise
option quantities on the basis of that performance.
(2)
As with other best value buying techniques, multisourcing involves additional
administrative expense, time and effort. It requires close coordination with
legal counsel and supply operations, both in the planning stage as well as
prior to award, and adequate file documentation is crucial. The contract file
must contain adequate evidence that multiple awards may be necessary to obtain
the Government's requirement when it is needed. For instance, the purchase
request should indicate, as a separate line item, the minimum essential
quantity required to support the Government's mission. The contract file should
also contain documentation about the history of the item and suppliers which
supports the possibility of making multiple awards. This could include
information on the existence of difficult or complex specifications combined
with a short delivery schedule. A history of poor performance, including
defaults and delinquencies unrelated to Government caused delay, could also
support such a decision. Information on supply availability should also be
obtained from Supply Operations and included in the file. The file should also
contain a description of how multiple awards will reduce or eliminate past
performance or supply availability problems, as well as the specific evaluation
criteria which will be used in making the award decision.
(3)
DLAR 17.90 should be consulted for additional requirements for use of this
technique. A more detailed discussion of multisource contracting is also
contained in section II of DLAH 4105.2.
a.
Application
(1)
As DLA expands its use of long-term contracting, use of the option provision
becomes an increasingly important contracting tool. The use of an option with
an Indefinite Delivery Contract (IDC) allows the Government to enter into a
contract covering more than the basic contract requirements (generally 1 year's
requirements), without the cancellation liability associated with the use of a
multiyear contract. Under an IDC-option combination contract, the Government
has the option to exercise yearly extensions. Options to increase the quantity and
options to extend the term of a contract may be used alone or in combination
with each other with most IDCs and provide the Government increased flexibility
to satisfy unpredictable requirements without the administrative lead-time
required to award a new contract. (For further guidance on the use of Options,
see FAR/DFARS/DLAR 17.2 and section II of DLAH 4105.2.)
(2)
In addition to the usual benefits provided by options, the use of options to
continue contractual relationships with proven quality contractors should be
given greater emphasis as a buy best value technique. The determination of
whether to exercise an option is the same type of business decision used to
select the initial source and the contractor's performance under the initial
contract period can and should be a factor in this determination. As with
multisource contracting, the evaluation of performance in the determination to
exercise the option can also be an incentive for superior performance.
(3)
Prior to exercising an option, FAR 17.207 requires the contracting officer to
determine that exercise of the option is the most advantageous method of
fulfilling the Government's need, price and other factors considered. This is
usually accomplished through an informal analysis of prices or an examination
of the market which may indicate that the option price is "better than
prices in the market or that the option is the more advantageous offer"
(FAR 17.207(d)(2), emphasis added). The FAR notes that factors to be considered
in making a decision should include the Government's need for continuity of
operations and the potential costs of disrupting operations. DLAR 17.207 also
requires that contractor performance be satisfactory and that the contractor be
determined responsible prior to the exercise of an option. It is thus clear
that the decision to exercise an option should reflect good business judgment
which considers a number of factors in addition to whether the option price is
as favorable as that which could be obtained through a new solicitation.
Further, a number of Comp Gen decisions have noted that the FAR grants
contracting officers wide discretion in determining what constitutes a
reasonable check on prices available in the market. The GAO generally will not
question the exercise of an option unless the protestor shows that applicable
regulations were not followed or that the agency's determination to exercise
the option, rather than conduct a new procurement, was unreasonable. (See
Action Manufacturing Co., 66 Comp. Gen. 463 (1987), No. B-221607.3.) Where the
market analysis or survey shows that the item may be available at lower cost,
this need not preclude the exercise of the option given a history of superior
performance by the contractor.
b.
Use With Competition for Performance
(1)
One way of continuing supply arrangements with quality contractors is to
combine option use with the Competition for Performance Program (see chapter
IV). The exercise of business judgment to award to a listed offeror/quality
vendor at a price up to 20 percent higher than the low acceptable offer
reflects our recognition that quality and reliability have value worth paying
for, as well as our commitment to dealing with proven performers. The
contractor's standing as a quality vendor is also a valid consideration for the
exercise of an option, and can justify the exercise of an option at a price
higher than the lowest price available in the market.
(2)
When the circumstances for exercise of an option are present, i.e., funds are
available, the option requirement fulfills an existing Government need, and
options which were not evaluated are properly synopsized, exercise of the
option with a listed quality vendor is an efficient method of continuing a
business relationship which has proven satisfactory. Where the contractor meets
the established performance criteria for quality vendors, the option can be
exercised at a price up to 20 percent higher than otherwise available from
vendors which are not quality vendors. The contracting officer's determination
regarding the payment of this higher price should be based upon the same
factors as apply to award of a contract under Competition for Performance. This
business judgment decision should be made on the basis of the circumstances at
the time of the decision; it should not be affected by the initial award
decision. A determination to pay a higher price for an option to a quality
vendor could be justified whether or not a premium was paid under the initial
award. The payment of a higher price could also be justified to a vendor which
did not meet the quality vendor criteria at the time of award but now does.
Likewise, the payment of a premium under the initial award does not require the
acceptance of an equal premium, or any premium, under the option. In order to
maximize the incentive for superior performance under the contract, the
solicitation should advise offerors that any option may be exercised with
preference to a quality vendor at a preference price.
(3)
There may be other regulatory requirements which must be satisfied, e.g., if
the option was not evaluated at time of award of the basic contract, a written
Justification and Approval would be required to exercise the option. The
written determination required by FAR 17.207(f) should address the conditions
listed above and reflect a reasonable basis for the contracting officer's
determination that the option is the more advantageous offer.
(4)
These techniques will be formalized in DLAR coverage in the near future as an
enhancement to the Competition for Performance program and as an extension of
the Competition for Performance philosophy to option exercises even though the
basic award was not made under Competition for Performance procedures.
APP
A
DLAH
4105.3
APPENDIX A EXAMPLES OF SOLICITATION LANGUAGE
|
SECTIONS L AND M |
ATTACHMENT |
|
1 |
|
|
2 |
|
|
3 |
|
|
4 |
|
|
5 |
PAST PERFORMANCE
The
Government will evaluate the quality of the offeror's past performance. The
assessment of past performance will be used in two ways.
First,
the assessment of the offeror's past performance will be used as one means of
evaluating the credibility of the offeror's technical and management proposal
volumes. A record of marginal or unacceptable past performance may be considered
an indication that the promises made by the offeror are less than reliable.
Such an indication may be reflected in DLA's overall assessment of the
offeror's proposal. However, a record of acceptable-or even excellent--past
performance will not result in a favorable assessment of an otherwise
unacceptable technical or management proposal.
Second,
the assessment of the offeror's past performance will be used as one means of
evaluating the relative capability of the offeror and the other competitors.
Thus, an offeror with an exceptional record of past performance may receive a
more favorable evaluation than another whose record is acceptable, even though
both may have acceptable technical and management proposals.
In
investigating an offeror's past performance, the Government will consider
information in the offeror's proposal and information obtained from other
sources, including past and present customers and their employees; other
government agencies, including state and local agencies; consumer protection
organizations and better business bureaus; former subcontractors; and others
who may have useful information.
Evaluation
of past performance will be a subjective assessment based on a consideration of
all relevant facts and circumstances. It will not be based on absolute
standards of acceptable performance. The Government is seeking to determine
whether the offeror has consistently demonstrated a commitment to customer
satisfaction and timely delivery of quality goods and services at fair and
reasonable prices. This is a matter of judgment. Offerors will be given an
opportunity to address especially unfavorable reports of past performance, and
the offeror's response--or lack thereof--will be taken into consideration.
Past performance will not be scored, but the Government's
conclusions about the overall quality of the offeror's past performance will be
highly influential in determining the relative merits of the offeror's proposal
and in selecting the offeror whose proposal is considered most advantageous to
the Government.
By
past performance, the Government means the offeror's record of conforming to
specifications and to standards of good workmanship; the offeror's adherence to
contract schedules, including the administrative aspects of performance; the
offeror's control of costs, including costs incurred for changed work; the
offeror's reputation for reasonable and cooperative behavior and committment to
customer satisfaction; and generally, the offeror's business-like concern for
the interests of the customer.
SAMPLE SOLICITATION LANGUAGE FOR
SECTIONS L AND M
STREAMLINED SOURCE SELECTION USING
PRICE AND PAST PERFORMANCE
NOTE: This sample
solicitation language anticipates procurement of commercial supplies from
vendors who are either manufacturers or regular dealers. It evaluates price and
past performance only. Since other performance risk related subfactors are not
evaluated, it will give a preference to existing suppliers (Government or
commercial) who can demonstrate superior past performance over those firms
without a performance history. For this reason, it should not be used where the
contracting activity wishes to encourage new firms to enter the marketplace.
Section L, Instructions,
Conditions, and Notices to Offerors
PROPOSAL PREPARATION
INSTRUCTIONS
1.
General Instructions
a.
These instructions are intended to serve as a guideline and are not intended to
be all-inclusive. The proposal should be specific, complete and legible,
stating clearly how you will meet all the requirements of the solicitation.
Sufficient rationale and substantiation should be submitted to permit
Government evaluators to determine that your offer meets all the requirements
contemplated by this solicitation.
b.
A cover letter may accompany the proposal to set forth any information you wish
to bring to the attention of the Government. Any exceptions or deviations as to
the Performance Work Statement (PWS)/Specifications or other provisions of this
solicitation must be clearly set forth in this cover letter.
c.
Proposal Organization
(1)
Your proposal should be prepared in two separate volumes and provided in the
quantities shown below. Proposals which do not provide required information in
the prescribed format may be excluded from further consideration.
|
Suggested
Volume |
Volume
Title |
No.
of Copies |
Page
Limit |
|
1 |
Price |
4 |
No
Limit |
|
2 |
Past
Performance |
4 |
25 |
(2)
The suggested page limit includes attachments and/or appendices. It represents
our assessment of the maximum number of pages required to adequately describe
your proposal and you are encouraged to comply with the limitations.
(3)
Each volume shall be identified by the solicitation number, your name, volume
number and volume title. During proposal evaluation, each volume will be
reviewed separately. Each volume should therefore be a "stand alone"
document requiring no reference to the other volume for full understanding. All
price information must be contained in Volume 1.
(4)
All pages which are not part of the solicitation are to be typewritten on
standard 8-« by 11 inch (21.25 cm x 27.5 cm) paper. Each section shall be
separately bound (stapled is acceptable) to facilitate evaluation. All
information shall be in English.
(5)
By submission of an offer, the offeror agrees to perform any resultant contract
in accordance with the PWS/Specification cited in Section C of this
solicitation, including any changes agreed to by the Government and the offeror
during discussions.
2. Volume 1, the Price Proposal. Volume 1, the price proposal,
shall contain:
a.
Standard Form (SF) 33, Solicitation, Offer, and Award, (page 1 of this
solicitation) completed and signed by the offeror;
b.
Section B of the solicitation (Price Schedule);
c.
Section K of the solicitation (Representations, Certifications and Other
Statements of Offeror);
d. Any
other page of the solicitation requiring information from the offeror.
3.
Volume 2, the Performance Proposal
a.
The submission of a performance proposal is optional. The Government will use
the data submitted in the performance proposal, as well as data available from
other sources, to evaluate performance risk. In evaluating performance risk,
the Government will accomplish a risk assessment to determine the offeror's
probability of successfully accomplishing the proposed effort. The Government
will assess performance risk on the basis of past performance on commercial and
Government contracts for the same or similar items. The offeror may elect not
to submit past performance data where the offeror believes that sufficient past
performance data is already available, e.g., where the offeror has supplied the
same or similar items or services in the recent past, or where the offeror has
been qualified as a quality vendor under the Competition for Performance
Program for the Federal Supply Class of the item for which proposals are being
solicited.
b.
The offeror assumes all risk associated with the failure to provide data under
the performance proposal.
c.
Proposals must be submitted in the following format to facilitate Government
review and evaluation of proposals. OFFERORS ARE CAUTIONED THAT THIS VOLUME
SHALL BE ABSOLUTELY DEVOID OF ANY DISCUSSION OR REFERENCES TO THE PRICE
PROPOSAL.
FACTOR: PAST PERFORMANCE
Provide any information
regarding the level of performance, in terms of delivery and quality, achieved
under either Government or Commercial awards for same or similar items within
the last year. Include all relevant information as requested below.
- NSN/Item Description
- Purchase
Order/Contract/Reference Number and Date
- Quantity
- Dollar Amount
- Division/Plant
- Point of Contact (POC)
and Phone Number
- Customer
- Customer POC and Phone
Number
- Contract Delivery Date
- Actual Delivery Date
- Reason for Delinquency
- Corrective Action Taken
- Product Quality
Deficiencies Experienced
- Corrective Action Taken
The
information provided should reflect on the offeror's record of performance in
the areas of conforming to specifications, adhering to contract schedules,
control of cost and cost of changed work, reputation for reasonable and
cooperative behavior and commitment to customer satisfaction, and your
business-like concern for the interest of your customer. Additionally, if
performance deficiencies have been identified, what were they and what
corrective action has been taken?
Section M, Evaluation
Factors for Award
1. Evaluation Factors: The following factors, listed in order of
importance, are to be considered in the evaluation of proposals received under
this solicitation:
a.
Price
b.
Past Performance
2.
Past Performance. The Government will accomplish a performance risk assessment
to determine the offeror's probability of successfully accomplishing the
proposed effort. In assessing performance risk, the Government will use
information and data submitted by the offeror, as well as information and data
from other sources. If discussions are held, the offeror will be given an
opportunity to review and respond to the data obtained from other sources.
Evaluation of performance risk will be a subjective assessment based on a
consideration of the relevant facts and circumstances. It will not be based on
absolute standards of acceptable performance.
3.
Price. The offered price, as adjusted by price related factors (such as the Buy
American Act, transportation or installation costs to be borne by the
Government or evaluation preference for small, disadvantaged business), will be
used in conjunction with the other evaluation factors listed above to determine
the proposal which represents the best value to the Government. The Government
will also evaluate the reasonableness of the offered price.
4. General Basis for Award. Award will be made to the offeror
whose proposal conforms to the terms and conditions of the solicitation and
which represents the best value to the Government, price and other factors
considered.
SAMPLE SOLICITATION LANGUAGE FOR
SECTIONS L AND M
STREAMLINED SOURCE SELECTION USING
CONDITIONAL SUBFACTORS
NOTE: This sample
solicitation language anticipates procurement of manufactured products where
the offerors are primarily manufacturers and the manufacturing process is quite
complex. It is meant to demonstrate how the concept of conditional subfactors can
be used in acquisitions where price and performance risk are used. The
performance risk evaluation factor encompasses many subfactors and
sub-subfactors (items), some of which can be and are used as separate
evaluation factors in other source selections. By using these subfactors and
items in either/or fashion, it is possible to approach the goal of obtaining
specific performance capability and quality information only from those
offerors who can not demonstrate low performance risk on the basis of past
performance. The conditional language in Section L (paragraphs 3a through d and
Section M (paragraph 2 below, and the Section L instructions regarding past
performance data can be standardized and used in solicitations for various
products and services. The Section L instructions for performance capability
and quality should be tailored to individual procurements or commodities.
Section L, Instructions,
Conditions, and Notices to Offerors
PROPOSAL PREPARATION
INSTRUCTIONS
1. General Instructions
a. These instructions are intended to serve as a guideline and
are not intended to be all-inclusive. The proposal should be specific, complete
and legible, stating clearly how you will meet all the requirements of the
solicitation. Sufficient rationale and substantiation should be submitted to
permit Government evaluators to determine that your offer meets all the
requirements contemplated by this solicitation.
b.
Proposals that are unrealistic in terms of technical or schedule commitments,
or unrealistically low in price, will be considered indicative of a lack of
understanding of the solicitation requirements.
c.
A cover letter may accompany the proposal to set forth any information you wish
to bring to the attention of the Government. Any exceptions or deviations as to
the Performance Work Statement (PWS)/Specifications or other provisions of this
solicitation must be clearly set forth in this cover letter.
d.
Proposal Organization:
(1)
Your proposal should be prepared in two separate volumes and provided in the
quantities shown below. Proposals which do not provide required information in
the prescribed format may be excluded from further consideration.
|
Suggested Volume |
Volume Title |
No. of Copies |
Page Limit |
|
1 |
Price |
4 |
No
Limit |
|
2 |
Performance |
4 |
50 |
(2)
The suggested page limit includes attachments and/or appendices. It represents
our assessment of the maximum number of pages required to adequately describe
your proposal and you are encouraged to comply with the limitations.
(3)
Each volume shall be identified by the solicitation number, your name, volume
number and volume title. During proposal evaluation, each volume will be
reviewed separately. Each volume should therefore be a "stand alone"
document requiring no reference to the other volume for full understanding. All
price information must be contained in Volume 1.
(4)
The proposal shall contain a master table of contents of the total proposal
which shall identify sections by title, page and volume location. A copy of
this master table of contents shall be placed at the front of each volume
making up the total proposal. Additionally, each volume shall contain a more
detailed table of contents to delineate each section within that volume. Tab
indexing shall be used to identify all sections and subsections. Each section
of the performance proposal shall be cross-referenced where applicable, to the
appropriate paragraph of the PWS/Specification.
(5)
All pages are to be typewritten on standard 8-« by 11 inch (21.25 cm x 27.5 cm)
plain white paper. Each section shall be separately bound (stapled is
acceptable) to facilitate evaluation. All information shall be in English.
(6)
By submission of an offer, the offeror agrees to perform any resultant contract
in accordance with the PWS/Specification cited in Section C of this
solicitation, including any changes agreed to by the Government and the offeror
during discussions.
2. Volume 1, the Price
Proposal. Volume 1, the price proposal, shall contain:
a.
SF 33 (page 1 of this solicitation) completed and signed by the offeror;
b.
Section B of the solicitation (Price Schedule);
c.
Section K of the solicitation (Representations, Certifications and Other
Statements of Offeror);
d.
Any other page of the solicitation requiring information from the offeror.
3. Volume 2, the
Performance Proposal
a.
The submission of a performance proposal is optional. The Government will use
the data submitted in the performance proposal, as well as data available from
other sources, to evaluate performance risk. In evaluating performance risk,
the Government will accomplish a risk assessment to determine the offeror's
probability of successfully accomplishing the proposed effort.
b.
Past performance will be the primary subfactor used to evaluate performance
risk, and the Government may evaluate performance risk on the basis of past
performance alone. The submission of past performance data in the proposal is
strongly encouraged. The offeror may, however, elect not to submit past
performance data where the offeror believes that sufficient past performance
data is already available, e.g., where the offeror has supplied the same or
similar items or services in the recent past, or where the offeror has been
qualified as a quality vendor under the Competition for Performance Program for
the Federal Supply Class of the item for which proposals are being solicited.
c.
The Government may also evaluate production capability and quality control
subfactors where sufficient past performance data is not available, either from
the proposal or through other sources, for the Government to assess performance
risk. Evaluation of performance risk may thus be based upon past performance
alone or a combination of past performance and other subfactors. The offeror
may elect not to submit data for production capability and quality control
subfactors. Where no data is submitted, the Government will base its evaluation
of performance risk upon data available to the purchasing office through other
sources or on the evaluation of past performance data alone.
d.
The offeror assumes all risk associated with the failure to provide data under
the performance proposal. The Government reserves the right to evaluate all
subfactors when such data is provided in the offeror's proposal, and offerors
are cautioned that evaluation of performance capability and/or quality control
may lead to a lower overall assessment than indicated by an assessment of
performance history alone.
e. The
performance proposal should establish your ability to meet the requirements of
the PWS/specification and delivery schedule. The proposal should be
sufficiently detailed to fully and clearly demonstrate that you have a thorough
understanding of all PWS/Specification requirements, with sufficient rationale
and substantiation to enable Government evaluators to determine whether or not
all the requirements of Section C of the solicitation are met. Statements that
you understand, can or will comply with the PWS/Specifications or parts
thereof, as well as such phrases as "standard procedures will be employed"
or "well known techniques will be used," are not considered
sufficient. Proposals which address production capability and/or quality
control should also set forth enough information to demonstrate to the
Government evaluators how you propose to comply with the requirements of the
PWS/Specification.
f. Proposals must be submitted in the following format to
facilitate Government review and evaluation of proposals. OFFERORS ARE
CAUTIONED THAT THIS VOLUME SHALL BE ABSOLUTELY DEVOID OF ANY DISCUSSION OR
REFERENCES TO THE PRICE PROPOSAL.
SUBFACTOR: PAST
PERFORMANCE
Provide any information
regarding the level of performance, in terms of delivery and quality, achieved
under either Government or Commercial awards for same or similar items within
the last year. Include all relevant information as requested below.
-
NSN/Item Description
-
Purchase Order/Contract/Reference Number and Date
-
Quantity
-
Dollar Amount
-
Division/Plant
-
Point of Contact (POC) and Phone Number
-
Customer
-
Contract Delivery Date
-
Actual Delivery Date
-
Reason for Delinquency
-
Corrective Action Taken
-
Product Quality Deficiencies Experienced
-
Corrective Action Taken
The information provided
should reflect on the offeror's record of performance in the areas of
conforming to specifications, adhering to contract schedules, control of cost
and cost of changed work, reputation for reasonable and cooperative behavior
and commitment to customer satisfaction, and your business-like concern for the
interest of your customer Additionally, if performance deficiencies have been
identified, what were they and what corrective action has been taken?
SUBFACTOR: PRODUCTION
CAPABILITY
ITEM 1: PROPOSED
MANUFACTURING METHOD
Provide an operation
process chart of your proposed method to manufacture the product. As a minimum,
include the following classifications: operation and inspection.
NOTE: Basic data on items
2 through 5 should be provided in the attached format. Offerors should provide
separate responses referencing the specific item where the use of the format is
not appropriate.
ITEM 2: REQUIRED
FACILITIES, EQUIPMENT/TOOLING AND PRODUCTION CAPACITY (UNITS OF PRODUCTION)
To support your proposed
method, provide an existing and/or proposed facilities layout.
-If
applicable, identify any new equipment/tooling that will be required.
-
To what extent would late or non-delivery of new equipment/tooling impact the
delivery schedule?
-
At what level of production (number of units) would additional
equipment/tooling be required?
ITEM 3: PLANNING FOR
SUBCONTRACTING WORK
If applicable, identify
those major components or operations which will be subcontracted and the firms
involved, including information on their previous experience for this or
similar items. Describe your procedures for selecting subcontractors and
assuring they deliver a quality product within the delivery schedule. In the
event the subcontractor cannot perform, do you have in-house capabilities or
alternate sourcing to obtain/perform this work?
ITEM 4: PERSONNEL AND
SKILLS
Identify key personnel to
be involved in the proposed effort and their experience and qualifications for
their assigned responsibilities.
Identify any
new/additional personnel by position and skill that will be required to meet
the proposed delivery schedule. If none, will overtime be utilized?
ITEM 5: PRODUCTION CONTROL
SYSTEMS
Identify how work progress
is tracked through the entire process. Describe your ability to identify
problem areas and take timely corrective actions.
To what extent does the
production control function have the authority to schedule/reschedule shop load
and specify order sequence?
Identify material long
lead-time items which may impact proposed delivery schedule. Is alternate
sourcing available?
SUBFACTOR: QUALITY CONTROL
ITEM 1: OFFEROR'S QUALITY
CONTROL SYSTEM
Provide
a set of your existing written in-house procedures that demonstrate you satisfy
the requirements of the specifications. If you have no such procedures in
existence at this time, please so state.
Explain how your existing quality control system, as described
in your written procedures, will satisfy the requirements of this solicitation.
If your existing system will not satisfy those requirements, describe the
changes you propose to make, if any, to your existing system. Provide
sufficient detail to enable the evaluators to determine whether you understand
the requirements of the solicitation and whether you havea sound approach to
satisfying those requirements.
Describe
your system of records for quality control. Explain how your system satisfies
the requirements of the specifications. Provide samples of all documentation
and relate each sample to the specification requirements. You must demonstrate
that your system of records will provide adequate documentation of inspections,
tests, and their results, and the nature of any corrective action taken.
Explain how you ensure that the latest applicable
specifications, drawings and standards, as well as applicable changes are used
for production, inspection and testing. Be specific as to what part of your
organization is responsible and who actually makes sure this is done.
Explain
how your calibration system will ensure the continuous checking of test and
examination equipment to assure the necessary degree of accuracy is being
maintained. You must demonstrate that your system of records will satisfy each
requirement of this standard.
ITEM 2: CONTINUOUS PROCESS
IMPROVEMENT
Briefly describe your program for Total Quality Management or
continuous process improvements. Relate aspects of this program to results in
the other items and subfactors of the Performance Proposal.
Section M, Evaluation
Factors for Award
1.
Evaluation Factors: The following factors are to be considered in the
evaluation of proposals received under this solicitation:
a.
Price
b.
Performance Risk
The
above factors are equal in importance.
2.
Performance Risk. The Government will accomplish a performance risk assessment
to determine the offeror's probability of successfully accomplishing the
proposed effort. In assessing performance risk, the Government will use
information and data submitted by the offeror, as well as information and data
from other sources, to evaluate the subfactors listed below. If discussions are
held, the offeror will be given an opportunity to review and respond to the data
obtained from other sources. Significant subfactors are:
a.
Past performance
b.
Production capability, including manufacturing method facilities, equipment and
tooling planning for subcontracting work personnel qualifications and
experience production control systems
c.
Quality control program, including adoption of continuous process improvement
Past
performance will be the primary subfactor used to evaluate performance risk.
Where the evaluation of past performance discloses no deficiencies, the
Government may evaluate performance risk on the basis of past performance
alone. Where sufficient past performance data is not available for the
Government to assess performance risk, production capability and quality
control subfactors will also be evaluated, and the importance of these
subfactors will increase. Evaluation of performance risk may thus be based upon
past performance alone or a combination of past performance and other
subfactors. The evaluation of subfactors other than past performance for one
offer does not require the evaluation of those subfactors for another. The
Government reserves the right to evaluate all subfactors when such data is
provided in the offeror's proposal, and offerors are cautioned that evaluation
of performance capability and/or quality control may lead to a lower overall
assessment than indicated by an assessment of performance history alone.
Evaluation
of performance risk will be a subjective assessment based on a consideration of
the relevant facts and circumstances. It will not be based on absolute
standards of acceptable performance.
3. Price. The offered
price, as adjusted by price related factors (such as the Buy American Act,
transportation or installation costs to be borne by the Government or
evaluation preference for small, disadvantaged business), will be used in
conjunction with the other evaluation factors listed above to determine the
proposal which represents the best value to the Government. The Government will
also evaluate the reasonableness of the offered price.
4. General Basis for
Award. Award will be made to the offeror whose proposal conforms to the terms
and conditions of the solicitation and which represents the best value to the
Government, price and other factors considered.
PLANT FACILITIES &
PRODUCTION EQUIPMENT
MATERIALS, PURCHASED
PARTS, & SUBCONTRACTING
M 22 - MULTIPLE AWARDS: (SEP 89) DCSC
a. The Government reserves
the right to make multiple awards under this solicitation, even though the multiple
awards may not result in the lowest aggregate cost to the Government.
b. "All or none"
and "block" offers are therefore prohibited and will not be
considered. Clause MO2(b), Evaluation of Offers for Multiple Awards (May 1986)
FAR 52.215-34, shall not apply to this solicitation.
c. Also, offerors may only
offer one price for each CLIN or sub-CLIN, regardless of the quantity solicited
or awarded.
d. Offers will be
evaluated at the maximum quantity(ies) specified in section B of the
solicitation. If multiple awards are made, the quantity will be divided as
equally as practicable among the successful offerors at time of award.
52.216-H001
PLACEMENT OF DELIVERY ORDERS AGAINST
MULTIPLE INDEFINITE DELIVERY/INDEFINITE QUANTITY CONTRACTS
(OCT 1989) DPSC
WHEN USED: Negotiated
solicitations and contracts when the Government intends to award two or more
Indefinite Delivery/Indefinite Quantity Contracts for the same item(s) of
supply pursuant to DLAR 17.9001(a)(5).
NOTES:
1. A clause substantially
the same as this may be used.
2. Also use 52.215-M009.
3. When there is more than
one item and multiple awards are to be made, each item will be divided equally
among the awardees.
4. When 52.217-I005 is
used, each award will have an option period. Each option stands on its own and,
if exercised, will be exercised in accordance with FAR 17.207. The Government
is therefore not obligated to exercise the option on any contract awarded nor
does it have to exercise the option on all awards if it determines to exercise
the option on one. If 52.217-I005 is not used, i.e., contracts are limited to a
base ordering period, revise clause text to delete reference to option periods.
5. If acceleration is
permitted, criteria should be established in Factor 2 for early delivery and
points deducted from the total accordingly.
6. Objective performance
measures other than waivers, deviations or warranties may be used. For example,
you may use inspection reports, to include the Government's report on the First
Article, if any, or other product, packaging or shipping nonconformance reports
(see DPSC CPM 17.9001(a)(5)(xii)).
7. Contracting officer
should ensure that offerors have a clear understanding of how their offers will
be evaluated and how the matrix will work after award. For this reason, use of
a Preproposal Conference should be considered (see FAR 15.409 and DPSC
Provision 52.215-L009). Paragraph (a) and the percentage allotments in
paragraph (b) must be changed accordingly. Also, the percentages in paragraph
(b) are not mandatory and should be considered examples only. Whatever
percentages are used, they should be rationally based and documented in the
acquisition plan.
8. Points assigned to
price, delivery and quality may be adjusted to reflect their relative
importance. However, the contacting officer must document his/her rationale for
weighting the factors unequally in the individual acquisition plan. If
formal/best value source selection procedures are used, the weights in this
clause do not have to correlate with the evaluation factors in the
solicitation. As written, these three factors are of essentially equal
importance.
9. Points for all three
factors must be stated in the solicitation. The points for price are predicated
on the number of contractors receiving awards. The points cited in the clause
text are based on three awards, but this number may have to be adjusted in the
contract to reflect the actual number of awards.
10. Factor 3B is
predicated on using warranty clause 52.246-I001 or 52.246-I002. If 52.246-I003
or 52.246-I004 apply, change "Option 1" to "Option 2."
11. When delivery orders
are placed using the procedures set forth in paragraph (b)(2) of the clause,
the calculation of points for each contractor must be documented in the
contract/delivery order file (see sample formats in CPM 17.9001).
12. Normally, the first
delivery order will equal the minimum quantity under the contract. When
possible, the minimums on all resultant awards should be met simultaneously by
issuing delivery orders at time of award. If the requirements to support each
minimum quantity do not exist, then follow the procedures in paragraph (b)(1).
Contracting officers are cautioned that the minimum on each contract awarded
must be met before ordering over the minimum on any one contract.
13. Points in paragraph
(c) are predicated on three awards; if other than three awards are intended,
adjust the points accordingly. To facilitate use of matrix, cite the evaluated
price in the award document. State: For the purpose of paragraph (b) of 52.216-H001
the evaluated price(s) is (are) _____________.
14. For the price factor,
discounts will not be considered but transportation costs and any other
evaluation cost factors, such as the SDB evaluation preference and alternate
VECP considerations will.
15. If warranty clause
52.246-I002, 52.246-I003 or 52.246-I004 applies, revise subparagraph (d)(6)
accordingly.
16. Subparagraph (d)(2):
DPSC Clause 52.212-F003 is used by C&T, Medical and Semiperishable
Subsistence. If 52.212-F003 is not used, modify this paragraph accordingly.
52.216-H001
PLACEMENT
OF DELIVERY ORDERS AGAINST MULTIPLE INDEFINITE DELIVERY/INDEFINITE QUANTITY
CONTRACTS
(OCT
1989) DPSC
a. The Government intends to make multiple awards under this
solicitation. Delivery orders will be placed against the resultant contracts as
set forth in subparagraph b below. It is anticipated that three awards will be
made. The Government, however, reserves the right to make only one award. If only
one award is made, this clause is inoperable.
b.
During each period of performance the following procedures will apply:
(1)
Orders Up to and Including the Minimum Quantity. Orders for each line item will
be placed with the contractor offering the lowest price for that line item
adjusted to reflect transportation and other cost factors considered in the
evaluation of offerors for award. When the minimum quantity for the contractor
offering the lowest evaluated price has been met, the next delivery order for
that line item shall be placed with the contractor offering the next lowest
evaluated price. If two or more line items have the same evaluated price, the
contracting/ ordering officer shall give preference to the items of small
business and/or labor surplus area concerns by following the order of priority
in FAR 14.407-6 for equal low bids. The above process shall continue until the
minimum quantity for that line item has been met on each contract.
(2)
Orders Beyond the Minimum Quantity. Any delivery orders for a line item that
will exceed the established minimum quantity will be placed as follows:
(a)
The contracting/ordering officer will use the matrix in subparagraph c below to
arrive at a point total for each contractor. If three awards are made, the
contractor receiving the lowest point total will receive 50 percent of the
requirement to be ordered; the contractor receiving the next lowest point total
will receive 30 percent of the requirement; and the contractor receiving the
highest point total will receive 20 percent of the requirement. If two awards
are made, the contractor receiving the two lower point total will receive 60
percent of the requirement; the contractor with the higher point total will
receive 40 percent of the requirement. In the event of a tie, the order will be
placed with the contractor offering the lowest evaluated price. If contractors
are still tied, the order of priority set forth in FAR 14.407-6 for equal low
bids will be used to determine which contractor will receive the order.
(b)
The quantities indicated in subparagraph a above will be ordered provided that
they meet the contractor's minimum order quantity in DPSC Clause 52.216-I001,
Delivery Order Limitations. In the event the quantities do not meet the minimum
order quantity, an attempt will be made to negotiate. However, the contracting
officer reserves the right to award the quantity to the other contractor(s).
(c)
Once the maximum quantity for a line item under a contract has been reached,
that contractor will not receive any additional orders for that line item.
c. Price, quality of product and timeliness of delivery will be
considered in the placement of delivery orders that exceed the minimum quantity
established for each line item. For Factor 1, the price used to calculate
points will be the unit price cited in the contract adjusted to reflect
transportation and other cost factors considered in evaluating offers for
award. For Factor 2, all delivery orders issued during the ordering period from
the effective date of award will be used to calculate the point totals.
Further, to determine the timeliness of deliveries: (i) each delivery increment
in each previous delivery order will be considered; (ii) if the delivery order
is modified to extend the delivery schedule for excusable delay, the extended
rather than the original delivery date will be used; and (iii) if the delivery
order is modified to extend the delivery schedule for inexcusable delay, the
original rather than the extended delivery date will be used. For Factor 3A,
all waiver/deviation requests received by the contracting officer since the
effective date of award will be considered, regardless of whether they have
been approved or disapproved. Lastly, if a firm does not have any requirements
due for delivery prior to the date points are calculated, no points will be
assigned to that firm for Factor 2, 3A, or 3B. The following matrix will be
used to calculate the point total for each contractor pursuant to subparagraph
b2(a) above:
|
FACTOR 1: Price |
|
|
No.
of Points |
Criterion |
|
0 |
Lowest evaluated price. |
|
* |
Second and third lowest evaluated prices. |
|
One-half point will be assigned for each
percentage point higher than the lowest evaluated price. For example, if the
second lowest evaluated price is 10 percent higher than the lowest evaluated
price, five points will be assigned. |
|
|
FACTOR 2: Delivery |
|
|
No. of Points |
Criterion |
|
0 |
All
delivery increments due under a previous delivery orders have been delivered
on schedule. |
|
2 |
No
delivery increment due under a previous delivery order is more than 30 days
delinquent. |
|
4 |
No
delivery increment due under a previous delivery order is more than 60 days
delinquent. |
|
6 |
No
delivery increment due under a previous delivery order is more than 90 days
delinquent. |
|
8 |
One
or more delivery increments due under previous delivery orders are more than
90 days delinquent. |
|
FACTOR 3A:
Quality (Waivers/Deviations Requests) |
|
|
No. of Points |
Criterion |
|
0 |
No
requests on previous delivery orders. |
|
1 |
One
or two requests (minor nonconformances only) on previous delivery orders. |
|
2 |
Three
or four requests (minor nonconformances only) on previous delivery orders. |
|
3 |
Five
or more requests involving minor nonconformances or one major nonconformance
on previous delivery orders. |
|
4 |
Two
or more waiver requests involving major nonconformances on previous delivery
orders. |
|
FACTOR 3B:
Quality (Warranties) |
|
|
No.
of Points |
Criterion |
|
0 |
No
warranty action on previous delivery orders. |
|
1 |
One
Option 1 Warranty has been invoked on previous delivery orders. |
|
2 |
Two
Option 1 Warranties or one Option 2 or 3 Warranty has been invoked on
previous delivery orders. |
|
3 |
Two
Option 1 Warranties or one Option 2 or 3 Warranties or one Option 4 Warranty
has been invoked on previous delivery orders. |
|
4 |
More
options than as cited directly above or Option 5 Warranty has been invoked on
previous delivery orders. |
|
The contracting officer's assignment of points for
the purpose of issuing delivery orders is hereby excluded from the operation
of the Disputes clause in any contract resulting from this soliciation. |
|
d.
Definitions
(1)
Line Item. The term line item means either the contract line item (e.g., 0001)
or contract subline item number, e.g., 0001AA, at which the end item is priced.
(2)
On Schedule. A delivery increment is considered delivered on schedule if the
line item(s) ordered are delivered in accordance with DPSC Clause 52.212-F003,
Delivery Requirements. The term "schedule," for the purpose of this
clause only, will be the original delivery schedule specified in the delivery
order and in the case of excusable delays, any extension thereto.
(3)
Deviation. A written authorization, granted after contract award and prior to
manufacture of an item, to depart from a particular performance or design
requirement of a contract, specification, or referenced document, for a
specific number of units or specific period of time.
(4)
Waiver. A written authorization granted after contract award to accept a
configuration item or other designated item which, during production or after
having been submitted for inspection, are found to depart from specified
requirements, but nevertheless are considered suitable for use "as
is" or after repair by an approved method.
(5)
Nonconformances. A departure from the requirements specified on the contract,
specification, drawing or the approved product description.
(6)
Minor Nonconformance. A nonconformance which does not adversely affect any of
the factors referred to above for a major nonconformance.
(7)
Major Nonconformance. A nonconformance which adversely affects any of the
following: health or safety; performance, interchangeability, reliability, or
maintainability; effective use or operation; weight or appearance (when a
factor); or any other basic objective of the specification.
(8)
Warranty. A written notice by the contracting officer to the contractor of any
breach of warranties pursuant to warranty clause 52.246-I001.
APP
B
DLAH
4105.3
APPENDIX
B SUGGESTIONS FOR THOSE WHO WRITE INSTRUCTIONS
FOR THE PREPARATION OF LARGE GOVERNMENT PROPOSALS
Reprinted, with
permission, from IEEE Transactions on Professional Communication, Volume 32,
Number 1, March 1989, Pages 17-19.
Suggestions for Those Who
Write Instructions for the Preparation of Large Government Proposals
or
Why Do You Make It so
Difficult for Us to Make It Easy for You?
JEROME K. CLAUSER
JAMES W. HILL
MEMBER, IEEE
Jerome K. Clauser holds
degrees from Lehigh and Pennsylvania State Universities and has been a
principal investigator, program manager, and most recently a designer and
editor of proposals at HRB Systems, Inc., a supplier of electronic systems for
the U.S. Department of Defense. He has taught at Kent State University, at Penn
State, and in public schools.
James W. Hill, President
of the IEEE Professional Communication Society, has been a manager of
communication services, publications manager, supervisor of technical writing,
and assistant professor of technical writing; he is now senior proposal
coordinator at HRB Systems, Inc. He holds a B.S. in management engineering from
Carnegie Mellon University, and in 1986 received the Alfred N. Goldsmith Award
for outstanding service to the profession.
Abstract - Compliance with
unrealistic Proposal Preparation Instructions and Instructions to Offerors
often prevents preparation of proposals that respond effectively to the
solicitation and that are easy to read and evaluate. The authors suggest a
Guide Specification for those who write government solicitations, and invite
comment on it.
We've put another proposal
to bed, and what a job that was!
It wasn't so much the
technical issues that we had to address, or the perennial problem of holding
down costs, that made preparing this proposal such an ordeal. We cope with
these difficulties on every proposal. What made this proposal so difficult was
complying with the Proposal Preparation Instructions (PPI), or Instructions to
Offerors (ITO), which are found in the RFP or Section L of government and
military solicitations for large proposals. The government sets standards for
style and format of these proposals because it wants to make the reviewer's job
easier.
It's easy to understand
why PPIs and ITOs are issued with solicitations. Unfortunately, in many cases,
the people who lay down the rules for preparing proposals aren't the people who
will actually read and evaluate the proposals. Thus, the rulemakers may simply
not understand or take into account what the evaluators will need and find
useful in proposal formats and styles. Moreover, the rulemakers often overlook
the fact that their rules might be extremely difficult or impossible to comply
with and could result in a document that is costly to prepare, unattractive,
and difficult to read. This is frustrating and annoying to the writers, who want
to tell a story effectively. And who knows how much grief it causes the
readers?
THE QUESTION OF PROPOSAL PREPARATION INSTRUCTIONS
This article poses a
number of questions from those who write proposals, questions about why certain
preparation instructions are issued. It also proposes a simple solution that
should make it easy for those who write instructions and those who write
proposals to achieve their common objectives.
What Determines Page
Limitations?
Recently we had to respond to some 50 single-spaced pages of
requirements. Addressing the requirements was no problem, but we had to do so
within the limitation of 50 pages of double-spaced text. Had we simply copied
the requirements and said that we would meet them, we would have exceeded the
page limit. Moreover, the PPI stated that it would be unacceptable for bidders
to state simply that they would comply with all of the requirements. The PPI
prevented us from telling a good story on that proposal. Our only consolation
was that the other bidders had the same constraints.
Don't
misunderstand - we are in favor of page limits. They work to everyone's
benefit, if the limits are consistent with the other requirements of the
solicitation.
Why Restrict the Number of
Foldouts?
Certain stories can be told more effectively in pictures than in
words. Foldouts may be needed because some pictures must be large to present
everything in sufficient detail and readable form. Restrictions on the number
of foldouts constrain the writer. Consequently, material that might be
presented more effectively in graphic form is presented in written form
instead, simply to comply with some arbitrary rule. Sometimes the number of
foldouts permitted (or, more commonly, the percentage of pages that may contain
foldouts) is not specified, but the bidder is told that every foldout will
count as two pages. Again, in a page-limited proposal, this has a deterring
effect on an author who might opt for a graphic representation. Admittedly,
some bidder might load up a two-page foldout with text in an attempt to
circumvent a page limitation; however, appropriate warnings can be issued to
prevent this type of chicanery.
Why Require Double-Spaced
Text?
Research has demonstrated that double-spaced text is difficult
to read. As a matter of fact, space-and-a-half text is sometimes hard to read
too, depending on the type style. Although editors who still use pencils might
prefer double-spaced text in draft copies, hardly any serious reader would
prefer double-spaced lines of text in books or newspapers. Using double-spacing
also makes it more difficult to place illustrations close to the text in which
they are referenced.
Why Pay so Much Attention
to Specifying Type Point Size and Pitch When Other Typographic Features Are
More Important?
Ten- or twelve-point type fonts are usually specified,
presumably to prevent some unscrupulous bidder from using microscopic type that
would allow him to put more words on each page. In reality, submitting an
unreadable proposal is just plain stupid; it's a poor way of winning friends
and influencing people. A more appropriate requirement would be to simply
specify the number of lines per page and the number of characters per line.
People who want to play games within these constraints do so at their own risk.
Why Restrict the Use of
Color and Attractive Layouts?
Occasionally
an admonition like this still appears in RFPs:
Unnecessarily
elaborate brochures or other presentations beyond those sufficient to provide a
complete and effective response...are not desired and may be construed as an
indication of the offeror's...lack of cost consciousness.
What
nonsense. Any company producing an elaborate, expensive proposal is using
precious bid and proposal (B&P) dollars to pay for it. When the B&P
bucks are used up, the costs of preparing proposals come out of profit. Indeed,
anyone preparing an elaborate proposal is especially cost conscious. If the
government auditors shudder at the cost of producing "fancy"
documents, they should look at the costs of marketing and preproposal
activities, and the cost of complying with inadequate or confusing instructions
in an RFP.
Because
of their fear of producing an overly elaborate document, some proposal writers
refrain from including any feature that would increase the intelligibility and
attractiveness of the document. Color is a case in point. On large schedules or
on PERT charts, use of color may be the only practical method of highlighting
critical paths. Use of color might be the best way of showing data flows
through complicated functional block diagrams. A plausible case could be made
that any organization that took pains to prepare and submit an attractive
proposal would be likely to do a good job on the program as well.
Why Include Preliminary Pages
of a Proposal in the Overall Page Count?
Front matter - tables of contents, lists of illustrations,
compliance matrices, lists of abbreviations and acronyms - are valuable aids to
a proposal reader or a reviewer. Everyone who writes proposals should be
encouraged to provide these features. Yet very often these pages are considered
in the overall page count of a document, and the writer is penalized for
attempting to make the reviewer's job easier. As a result, to save pages, a
writer might produce only a top-level table of contents and compliance matrix;
these are virtually useless for locating details quickly. Similarly, the writer
might delete entire lists of illustrations, abbreviations, and acronyms.
Clearly, it is counterproductive to prohibit or to penalize a writer for
attempting to make the reader's job easier. Front matter should not be included
in the overall page count.
THE SOLUTION - A GUIDE SPECIFICATION FOR PROPOSALS
In
an attempt to make life easier for those who write government solicitations and
for those who prepare proposals responding to them, we propose the Guide
Specification shown in figure 1. With only slight changes, this specification
can be adapted to almost any solicitation. Its use will assist bidders to
prepare proposals effectively and attractively so that government evaluators
will have minimal difficulty reading and evaluating them.
In
addition, because composition, organization, and format are not contractual
concerns, but matters that contribute to readable and usable proposals, we
suggest that every solicitation provide the address and phone number of a
government representative who can be called at any time for clarification of
questions in these areas.
The
proposed Guide Specification has been approved by the Proposal Standards
Committee of the IEEE Professional Communication Society. The committee asks
anyone who has comments or suggestions regarding the Guide Specification to
send them to the editor of the Transactions on Professional Communication, who
will refer them to the committee.
Companies whose existence depends on government contracts have
much at stake when they prepare and submit proposals. It is unfair to bidders
to force them to submit a document prepared to specifications that don't make
sense. And it is a form of cruel and unusual punishment to require reviewers to
evaluate the drab, ungainly, difficult to read texts that result from complying
with confusing and unrealistic standards. Is it any wonder that we who prepare
proposals for submission to the government can't help asking, "Why do you
make it so hard for us to make it easy for you?"
Note: Items in boxes may
be changed without compromising the integrity or effectiveness of these
specifications. Other changes are not recommended.
The proposal shall consist
of four separately bound volumes with page count limitations and number of
copies to be delivered shown below.
|
Volume No. |
Title |
Page Limit |
No. Copies |
|
Volume
I. |
Executive
Summary |
20 |
5 |
|
Volume
II. |
Management
Volume |
100 |
5 |
|
Volume
III. |
Technical
Volume |
200 |
5 |
|
Volume
IV. |
Cost
Volume |
None |
5 |
|
(Other
volumes may be added.) |
|
plus
unbound original |
|
The following front matter shall be provided for each volume:
Cover
Title Page
Table
of Contents
Lists
of Figures and Tables
Glossary
or List of Terms
Compliance
and/or Cross-Reference Matrix
Front matter will not be included in the page count.
The text shall be typed, typeset, or printed on 8-1/2 X 11-inch
paper with margins of at least 1 inch on all sides, excluding running headers
or footers, classification or proprietary markings, and section or page
numbers. Each page shall contain not more than 54 lines of text or equivalent
space, and the average line of text shall contain not more than 100 characters.
Proper attention should be given to legibility of the main body type; the
vertical size of capital letters shall be not less than 3/32 inch. Type that is
very condensed, light-faced, italic, or script should be used only sparingly
for special purposes. Multiple columns may be used, in which case the left and
right page margins may be 3/4 inch. Special features (e.g., headings,
highlighting, bullets, tabs) that will increase the readability and usability
of the volumes are encouraged.
Pages
may be printed on one or both sides. Only pages containing type or
illustrations will be page numbered and counted. Up to 25 percent of the total
number of pages in any volume may be 11 X 17-inch foldouts. Each printed side
of a foldout will count as one page; however, if half of a foldout is printed
as text, the foldout will be counted as two pages. Bidders shall devise
numbering schemes for sections, pages, figures, etc.
Questions concerning these specifications may be telephoned at
any time to insert name at insert phone number.
Figure 1. Guide
Specification Recommended for Writing Government Proposal Preparation
Instructions and Instructions to Offerors.
APP
C
DLAH
4105.3
APPENDIX C MEMORANDA ON COST OR PRICING DATA
REQUIREMENTS IN COMPETITIVE PROCUREMENTS
THE OFFICE OF THE
ASSISTANT SECRETARY OF DEFENSE WASHINGTON, D.C.
Retyped for purposes of
reproduction
1 May 1987
MEMORANDUM FOR ASSISTANT
SECRETARY OF THE ARMY (RD&A) ASSISTANT SECRETARY OF THE NAVY (S&L)
ASSISTANT SECRETARY OF THE AIR FORCE (A) DIRECTORS OF THE DEFENSE AGENCIES
SUBJECT: Adequate Price
Competition
We have recently become aware that some contracting officers are
requesting the submission of contractor cost or pricing data even though there
is a reasonable expectation that adequate price competition will result on a
particular procurement. Unnecessarily requiring the submission of cost or
pricing data is not in the best interest of the Department of Defense because
it leads to increased proposal preparation costs, extends procurement
leadtimes, and wastes both contractor and government resources.
The
Comptroller General has held that the adequate price competition exemption from
the requirement to obtain certified cost or pricing data may be applied
regardless of contract type. In Serv-Air, Inc., 58 COMP GEN 362 (1979), 79-1
CPD 212, the Comptroller General concluded that it was the intent of Congress
to treat all types of contracts equally, both for the requirement for
submission of certified cost or pricing data and for the exemptions to that
requirement. Current Federal Acquisition Regulation coverage conforms to this
interpretation since it does not specify different treatments for different
types of contracts.
This same Comptroller General decision held that adequate price
competition may result, even though price is a secondary factor in the
evaluation of proposals, as long as price is a substantial evaluation factor.
They found it to be substantial in one case when cost was weighted as 20% of
the overall proposal evaluation. Thus, when following source selection
procedures where a contract will be awarded to the responsible offeror
submitting the lowest evaluated price (considering all evaluation factors),
there should rarely be a need to obtain certified cost or pricing data,
although some cost data may be required to determine cost realism or to ensure
that the offeror adequately understands the scope of work.
When
cost or pricing data are not obtained because adequate price competition has
been achieved, there is no requirement to obtain a field pricing review; or to
separately analyze profit using the weighted guidelines method.
The
Assistant Secretary of the Navy (Shipbuilding & Logistics) has recently
disseminated a similar memorandum which is attached for your information. It
addresses these issues in a very comprehensive manner.
Eleanor
R. Spector
Deputy
Assistant Secretary of
Defense
for Procurement
Attachment
DEPARTMENT OF THE NAVY
THE ASSISTANT SECRETARY OF
THE NAVY (SHIPBUILDING AND LOGISTICS) WASHINGTON, D.C. 20340
Retyped for purposes of
reproduction
April 10, 1987
MEMORANDUM FOR COMMANDERS
OF SYSTEMS COMMANDS DEPUTY CHIEF OF STAFF FOR INSTALLATIONS AND LOGISTICS,
HEADQUARTERS, U.S. MARINE CORPS DIRECTOR, STRATEGIC SYSTEMS PROGRAMS OFFICE
COMMANDER, MILITARY SEALIFT COMMAND CHIEF OF NAVAL RESEARCH COMMANDING OFFICER,
AUTOMATIC DATA PROCESSING SELECTION OFFICE COMMANDING OFFICER, NAVAL
TELECOMMUNICATIONS COMMAND DIRECTOR, NAVAL DATA AUTOMATION COMMAND
Subj: COMPETITION AND
PROFIT POLICY FOR NEGOTIATED CONTRACTS
Competition is the cornerstone of Navy acquisition policy. The
competitive marketplace serves as our best pricing mechanisms, a factor which
has been recognized by Congress with enactment of the Competition In
Contracting Act (CICA). Placing emphasis on the use of market forces, as
opposed to negotiation, creates opportunities for realizing important savings
in time and effort by streamlining our procurement procedures. Also, by
allowing the marketplace to establish prices, including profit, there will be
improved long term incentives for contractors to reduce or limit costs to the
government.
In
spite of the benefits from competition, there is a tendency to place undue
reliance on cost analysis and application of the DoD profit policy (weighted
guidelines) when adequate price competition is present. This is contrary to the
FAR which precludes requiring the submission of cost or pricing data when there
is adequate price competition, thus making use of the DoD profit policy
inappropriate in such instances. A principal cause of this problem stems from a
failure to distinguish between cost analysis performed for the purpose of
determining cost realism, versus cost analysis performed for the purpose of
negotiating a fair and reasonable price. There are many instances which necessitate
performing a cost realism analysis, although there is adequate price
competition present and a cost analysis for negotiation purposes is not
appropriate. For example, in contracts involving competitive major acquisitions
which employ structured source selection procedures, sufficiently detailed data
must be obtained from each offeror to validate that the technical effort can
reasonably be performed within the planned resources. Similarly, for many cost
reimbursement contracts a cost realism analysis is particularly appropriate to
identify any unrealistically low cost proposals. On the other hand, for
competitively awarded firm fixed price contracts, the use of cost realism
analysis would be the exception and not the rule. In all instances where a cost
analysis is performed for cost realism purposes, the information requirements
should be tailored to fit the circumstances. In this respect, there are many
situations where simple rate checks and in-house analyses are fully adequate to
support a cost realism analysis. In contrast to the tailored data approach
taken for cost realism analyses, a cost analysis performed for purposes of
negotiation, requires full cost or pricing data, and application of the DoD
profit policy. Alternatively, it is not appropriate to use the DoD profit
policy simply because a cost analysis has been performed for purposes of
determining cost realism.
When the contracting officer has a reasonable expectation that
adequate price competition will be achieved, the solicitation shall not require
the submission of cost or pricing data. This does not preclude requiring
submission of selected cost data for purposes of performing a cost realism
analysis, as explained above. This policy shall apply to all solicitations, for
cost reimbursement or fixed-price contracts, where price is a substantial
evaluation factor, even if award may be made to other than the low offeror,
e.g., "greatest value" or "best buy" strategies. The
Comptroller General has concluded that price is a substantial evaluation
factor, even in a situation with an evaluation emphasis of thirty percent.
In
the event that adequate price competition does not materialize, cost or pricing
data shall be requested, if not otherwise precluded. To facilitate this,
provision may be made in the solicitation to put offerors on notice that such
data may be required.
It
is not desirable to request more data than we really need to perform the
procurement functions. Navy has placed great emphasis on increasing
competition. Now our process should get the full benefits of procedural
simplification that competition offers:
reduction
in procurement lead time
elimination
of unneeded audits and evaluations
promotion
of submission of most favorable prices, unique cost saving production methods
or technical breakthroughs or reasoned business decisions which the company
does not wish to divulge for fear of losing a competitive advantage
promotion
of competitiveness and aggressive cost control leading to a more profitable and
healthy national industrial base.
While we must continue to be diligent and exercise good
judgement to protect the government's interest, we must trust competition to
provide fair and reasonable prices. I am confident that this will enable us to
realize significant long term benefits in terms of better prices and a more
efficient and productive procurement workforce.
EVERETT
PYATT
SAMPLE EVALUATION AND REPORT FORMATS
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Example of Format for Source
Selection Decision Document (Air Force) |
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FORMAT FOR PREPARING DEFICIENCY
REPORTS (AIR FORCE)
DEFICIENCY REPORT NO.
_____
AREA__________ ____
ITEM__________ FACTOR_____________ OFFEROR______
Nature of Deficiency:
State the nature of the
deficiency. Be concise. Include a reference, by offeror's document, paragraph
and page, that will quickly identify the offeror's submission.
Summary of Effect of
Deficiency:
State how the uncorrected
deficiency would affect the program if it were accepted "as is."
Reference:
Indicate the references
that adequately substantiate that the data evaluated are deficient. These may
be statements in the solicitation, statements of work, specifications, etc.
_______________ _____________ ___________
Area
Captain
Evaluator Area and Item
Designator
ATTACHMENT 2 DEFICIENCY REPORT (ESI)
OFFEROR:
AREA
EVALUATOR:
ITEM:
RFP REFERENCE:
FACTOR:
PROPOSAL REFERENCE:
STANDARD:
DISCUSSION (Describe what
is deficient, why it is deficient.)
REVIEWED/APPROVED BY:
DEFICIENCY NO.
RISK
ASSESSMENT REPORT (ESI)
OFFEROR:
EVALUATOR:
DEFICIENCY NO.
RISK ASSESSMENT
High
- Likely to
cause serious disruption of schedule, increase in cost, or degradation of
quality even with special efforts during contract administration.
Moderate
- Can potentially cause some
disruption of schedule, increase in cost, or degradation of quality. However, special effort during contract
administration may be able to overcome difficulties.
Low
- Has little potential to cause disruption
of schedule, increase in cost, or degradation of quality. Normal contract administration
will probably be able to overcome minor difficulties.
DISCUSSION (Explain how the uncorrected deficiency will affect the offeror's ability to achieve quality, schedule,