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PART 915--CONTRACTING BY NEGOTIATION







Subpart 915.2--Solicitation and Receipt of Proposals and Information







915.200  Scope of subpart.



915.201  Exchanges with industry before receipt of proposals.



915.207-70  Handling of proposals during evaluation.







Subpart 915.3--Source Selection







915.305  Proposal evaluation.







Subpart 915.4--Contract Pricing







915.404-2  Information to support proposal analysis.



915.404-2-70  Audit as an aid in proposal analysis.



915.404-4  Profit.



915.404-4-70  DOE structured profit and fee system.



915.404-4-70-1  General.



915.404-70-2  Weighted guidelines system.



915.404-4-70-3  Documentation.



915.404-4-70-4  Exceptions.



915.404-4-70-5  Special considerations--contracts with nonprofit 



organizations (other than educational institutions).



915.404-4-70-6  Contracts with educational institutions.



915.404-4-70-7  Alternative techniques.



915.404-4-70-8  Weighted guidelines application considerations.



915.404-4-71  Profit and fee-system for construction and 



construction management contracts.



915.404-4-71-1  General.



915.404-4-71-2  Limitations.



915.404-4-71-3  Factors for determining fees.



915.404-4-71-4  Considerations affecting fee amounts.



915.404-4-71-5  Fee schedules.



915.404-4-71-6  Fee base.



915.404-4-72  Special considerations for cost-plus-award-fee 



contracts.







Subpart 915.6--Unsolicited Proposals





915.602  Policy.



915.603  General.



915.605  Content of unsolicited proposals.



915.606  Agency procedures.



915.607  Criteria for acceptance of an unsolicited proposal.







    Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).







Subpart 915.2--Solicitation and Receipt of Proposals and 



Information











915.200  Scope of subpart.







    FAR 15.2 is not applicable to Program Opportunity Notices (See 



48 CFR 917.72) or Program Research and Development Announcements 



(See 48 CFR 917.73).







915.201  Exchanges with industry before receipt of proposals. (DOE 



coverage-paragraph (e)).







    (e) Approval for the use of solicitations for information or 



planning purposes shall be obtained from the Head of the Contracting 



Activity.











915.207-70  Handling of proposals during evaluation







    (a) Proposals furnished to the Government are to be used for 



evaluation purposes only. Disclosure outside the Government for 



evaluation is permitted only to the extent authorized by, and in 



accordance with, the procedures in this subsection.



    (b) While the Government's limited use of proposals does not 



require that the proposal bear a restrictive notice, proposers should, 



if they desire to maximize protection of their trade secrets or 



confidential or privileged commercial and financial information 



contained in them, apply the restrictive notice prescribed in paragraph 



(e) of the provision at 48 CFR 52.215-1 to such information. In any 



event, information contained in proposals will be protected to the 



extent permitted by law, but the Government assumes no liability for 



the use or disclosure of information (data)



not made subject to such notice in accordance with paragraph (e) of the 



provision at 48 CFR 52.215-1.



    (c) If proposals are received with more restrictive conditions than 



those in paragraph (e) of the provision at 48 CFR 52.215-1, the 



contracting officer or coordinating officer shall inquire whether the 



submitter is willing to accept the conditions of paragraph (e). If the 



submitter does not, the contracting officer or coordinating officer 



shall, after consultation with counsel, either return the proposal or 



accept it as marked. Contracting officers shall not exclude from 



consideration any proposals merely because they contain an authorized 



or agreed to notice, nor shall they be prejudiced by such notice.



    (d) Release of proposal information (data) before decision as to 



the award of a contract, or the transfer of valuable and sensitive 



information between competing offerors during the competitive phase of 



the acquisition process, would seriously disrupt the Government's 



decision-making process and undermine the integrity of the competitive 



acquisition process, thus adversely affecting the Government's ability 



to solicit competitive proposals and award a contract which would best 



meet the Government's needs and serve the public interest. Therefore, 



to the extent permitted by law, none of the information (data) 



contained in proposals, except as authorized in this subsection, is to 



be disclosed outside the Government before the Government's decision as 



to the award of a contract. In the event an outside evaluation is to be 



obtained, it shall be only to the extent authorized by, and in 



accordance with the procedures of, this subsection.



    (e)(1) In order to maintain the integrity of the procurement 



process and to assure that the propriety of proposals will be 



respected, contracting officers shall assure that the following notice 



is affixed to each solicited proposal prior to distribution for 



evaluation:







Government Notice for Handling Proposals







    This proposal shall be used and disclosed for evaluation 



purposes only, and a copy of this Government notice shall be applied 



to any reproduction or abstract thereof. Any authorized restrictive 



notices which the submitter places on this proposal shall also be 



strictly complied with. Disclosure of this proposal outside the 



Government for evaluation purposes shall be made only to the extent 



authorized by, and in accordance with, the procedures in DEAR 



subsection 915.207-70.







(End of Notice)







    (2) The notice at FAR 15.609(d) for unsolicited proposals shall be 



affixed to a cover sheet attached to each such proposal upon receipt by 



DOE. Use of the notice neither alters any obligation of the Government, 



nor diminishes any rights in the Government to use or disclose data or 



information.



    (f)(1) Normally, evaluations of proposals shall be performed only 



by employees of the Department of Energy. As used in this section, 



``proposals'' includes the offers in response to requests for 



proposals, sealed bids, program opportunity announcements, program 



research and development announcements, or any other method of 



solicitation where the review of proposals or bids is to be performed 



by other than peer review. In certain cases, in order to gain necessary 



expertise, employees of other agencies may be used in instances in 



which they will be available and committed during the period of 



evaluation. Evaluators or advisors who are not Federal employees, 



including employees of DOE management and operating contractors, may be 



used where necessary. Where such non-Federal employees are used as 



evaluators, they may only participate as members of technical 



evaluation committees. They may not serve as members of the Source 



Evaluation Board or equivalent board or committee.



    (2)(i) Pursuant to section 6002 of Pub. L. 103-355, a determination 



is required for every competitive procurement as to whether sufficient 



DOE personnel with the necessary training and capabilities are 



available to evaluate the proposals that will be received. This 



determination, discussed at FAR 37.204, shall be made in the memorandum 



appointing the technical evaluation committee by the Source Selection 



Official, in the case of Source Evaluation Board procurements, or by 



the Contracting Officer in all other procurements.



    (ii) Where it is determined such qualified personnel are not 



available within DOE but are available from other Federal agencies, a 



determination to that effect shall be made by the same officials in the 



same memorandum. Should such qualified personnel not be available, a 



determination to use non-Federal evaluators or advisors must be made in 



accordance with paragraph (f)(3) of this subsection.



    (3) The decision to employ non-Federal evaluators or advisors, 



including employees of DOE management and operating contractors, in 



Source Evaluation Board procurements must be made by the Source 



Selection Official with the concurrence of the Head of the Contracting 



Activity. In all other procurements, the decision shall be made by the 



senior program official or designee with the concurrence of the Head of 



the Contracting Activity. In a case where multiple solicitations are 



part of a single program and would call for the same resources for 



evaluation, a class determination to use non-Federal evaluators may be 



made by the DOE Procurement Executive.



    (4) Where such non-Federal evaluators or advisors are to be used, 



the solicitation shall contain a provision informing prospective 



offerors that non-Federal personnel may be used in the evaluation of 



proposals.



    (5) The nondisclosure agreement as it appears in paragraph (f)(6) 



of this subsection shall be signed before DOE furnishes a copy of the 



proposal to non-Federal evaluators or advisors, and care should be 



taken that the required handling notice described in paragraph (e) of 



this subsection is affixed to a cover sheet attached to the proposal 



before it is disclosed to the evaluator or advisor. In all instances, 



such persons will be required to comply with nondisclosure of 



information requirements and requirements involving Procurement 



Integrity, see FAR 3.104; with requirements to prevent the potential 



for personal conflicts of interest; or, where a non-Federal evaluator 



or advisor is acquired under a contract with an entity other than the 



individual, with requirements to prevent the potential for 



organizational conflicts of interest.



    (6) Non-Federal evaluators or advisors shall be required to sign 



the following agreement prior to having access to any proposal:







Nondisclosure Agreement







    Whenever DOE furnishes a proposal for evaluation, I, the 



recipient, agree to use the information contained in the proposal 



only for DOE evaluation purposes and to treat the information 



obtained in confidence. This requirement for confidential treatment 



does not apply to information obtained from any source, including 



the proposer, without restriction. Any notice or restriction placed 



on the proposal by either DOE or the originator of the proposal 



shall be conspicuously affixed to any reproduction or abstract 



thereof and its provisions strictly complied with. Upon completion 



of the evaluation, it is agreed all copies of the proposal and 



abstracts, if any, shall be returned to the DOE office which 



initially furnished the proposal for evaluation. Unless authorized 



by the Contracting Officer, I agree that I shall not contact the 



originator of the proposal concerning any aspect of its elements.







Recipient:-------------------------------------------------------------







Date:------------------------------------------------------------------







(End of Agreement)







    (g) The submitter of any proposal shall be provided notice adequate 



to afford an opportunity to take



appropriate action before release of any information (data) contained 



therein pursuant to a request under the Freedom of Information Act (5 



U.S.C. 552); and, time permitting, the submitter should be consulted to 



obtain assistance in determining the eligibility of the information 



(data) in question as an exemption under the Act. (See also 48 CFR 



24.2, Freedom of Information Act.)







Subpart 915.3--Source Selection











915.305  Proposal evaluation. (DOE coverage--paragraph (d))







    (d) Personnel from DOE, other Government agencies, consultants, and 



contractors, including those who manage or operate Government-owned 



facilities, may be used in the evaluation process as evaluators or 



advisors when their services are necessary and available. When 



personnel outside the Government, including those of contractors who 



operate or manage Government-owned facilities, are to be used as 



evaluators or advisors, approval and nondisclosure procedures as 



required by 48 CFR (DEAR) 915.207-70 shall be followed and a notice of 



the use of non-Federal evaluators shall be included in the 



solicitation. In all instances, such personnel will be required to 



comply with DOE conflict of interest and nondisclosure requirements.







Subpart 915.4--Contract Pricing











915.404-2  Information to support proposal analysis. (DOE coverage--



paragraphs (a), (c) and (e))







    (a)(1) Field pricing assistance as discussed in FAR 15.404-2(a) is 



not required for the negotiation of DOE contract prices or 



modifications thereof. The term ``field pricing assistance'' refers to 



the Department of Defense (DOD) system for obtaining a price and/or 



cost analysis report from a cognizant DOD field level contract 



management office wherein requests for the review of a proposal 



submitted by an offeror are initiated and the recommendations made by 



the various specialists of the management office are consolidated into 



a single report that is forwarded to the office making the contract 



award for use in conducting negotiations. In the DOE, such review 



activities, except for reviews performed by professional auditors, are 



expected to be accomplished by pricing support personnel located in DOE 



Contracting Activities. The DOE contracting officer shall formally 



request the assistance of appropriate pricing support personnel, other 



than auditors, for the review of any proposal that exceeds $500,000, 



unless the contracting officer has sufficient data to determine the 



reasonableness of the proposed cost or price. Such pricing support may 



be requested for proposals below $500,000, if considered necessary for 



the establishment of a reasonable pricing arrangement. Contracting 



officers, however, are not precluded by this section from requesting 



pricing assistance from a cognizant DOD contract management office, 



provided an appropriate cross-servicing arrangement for pricing support 



services exists between the DOE and the servicing agency.



    (c)(1) When an audit is required pursuant to 48 CFR 915.404-2-70, 



``Audit as an aid in proposal analysis,'' the request for audit shall 



be sent directly to the Federal audit office assigned cognizance of the 



offeror or prospective contractor. When the cognizant agency is other 



than the Defense Contract Audit Agency or the Department of Health and 



Human Services, and an appropriate interagency agreement has not been 



established, the need for audit assistance shall be coordinated with 



the Office of Policy, within the Headquarters procurement organization.



    (2) The request for audit shall establish the due date for receipt 



of the auditor's report and in so doing shall allow as much time as 



possible for the auditor's review.



    (e)(6) Copies of technical analysis reports prepared by DOE 



technical or other pricing support personnel shall not normally be 



provided to the auditor. The contracting officer or the supporting 



price, cost, or financial analyst at the contracting activity shall 



determine the monetary impact of the technical findings.











915.404-2-70   Audit as an aid in proposal analysis.







    (a) When a contract price will be based on cost or pricing data 



submitted by the offerors, the DOE contracting officer or authorized 



representative shall request a review by the cognizant Federal audit 



activity prior to the negotiation of any contract or modification 



including modifications under advertised contracts in excess of:



    (1) $500,000 for a firm fixed-price contract or a fixed-price 



contract with economic price adjustment provisions; or adjustment 



provisions; or



    (2) $1,000,000 for all other contract types, including initial 



prices, estimated costs of cost-reimbursement contracts, interim and 



final price redeterminations, and target and settlement of incentive 



contracts.



    (b) The requirement for auditor reviews of proposals which exceed 



the thresholds specified in paragraph (a) of this section may be waived 



at a level above the contracting officer when the reasonableness of the 



negotiated contract price can be determined from information already 



available. The contract file shall be documented to reflect the reason 



for any such waiver, provided, however, that independent Government 



estimates of cost or price shall not be used as the sole justification 



for any such waiver.











Sec. 915.404-4  Profit. (DOE coverage--paragraphs (c) and (d))







    (c)(4)(i) Contracting officer responsibilities. The statutory 



limitations on profit and fees as set forth in FAR 15.404-4(c)(4)(i) 



shall be followed, except as exempted for DOE architect-engineer 



contracts covering Atomic Energy Commission (AEC) and Bonneville Power 



Administration (BPA) functions. Pursuant to section 602(d) (13) and 



(20) of the Federal Property and Administration Services Act of 1949, 



as amended, those former AEC functions, as well as those of the BPA, 



now being performed by DOE are exempt from the 6 percent of cost 



restriction on contracts for architect-engineer services. The estimated 



costs on which the maximum fee is computed shall include facilities 



capital cost of money when this cost is included in cost estimates.



    (c)(6) In cases where a change or modification calls for 



substantially different work than the basic contract, the contractor's 



effort may be radically changed and a detailed analysis of the profit 



factors would be a necessity. Also, if the dollar amount of the change 



or contract modification is very significant in comparison to the 



contract dollar amount, a detailed analysis should be made.



    (d) Profit-analysis factors. A profit/fee analysis technique 



designed for a systematic application of the profit factors in FAR 



15.404-4(d) provides contracting officers with an approach that will 



ensure consistent consideration of the relative value of the various 



factors in the establishment of a profit objective and the conduct of 



negotiations for a contract award. It also provides a basis for 



documentation of this objective, including an explanation of any 



significant departure from it in reaching a final agreement. The 



contracting officer's analysis of these prescribed factors is based on 



information available prior to negotiations. Such information is 



furnished in proposals, audit data, performance reports, preaward 



surveys and the like.











915.404-4-70  DOE structured profit and fee system.







    This section implements FAR 15.404-4(b) and (d).











915.404-4-70-1  General.







    (a) Objective. It is the intent of DOE to remunerate contractors 



for financial and other risks which they may assume, resources they 



use, and organization, performance and management capabilities they 



employ. Profit or fee shall be negotiated for this purpose; however, 



when profit or fee is determined as a separate element of the contract 



price, the aim of negotiation should be to fit it to the acquisition, 



giving due weight to effort, risk, facilities investment, and special 



factors as set forth in this subpart.



    (b) Commercial (profit) organization. Profit or fee prenegotiation 



objectives for contracts with commercial (profit) organizations shall 



be determined as provided in this subpart.



    (c) Nonprofit organizations. It is DOE's general policy to pay fees 



in contracts with nonprofit organizations other than educational 



institutions and governmental bodies; however, it is a matter of 



negotiation whether a fee will be paid in a given case. In making this 



decision, the DOE negotiating official should consider whether the 



contractor is ordinarily paid fees for the type of work involved. The 



profit objective should be reasonable in relation to the task to be 



performed and the requirements placed on the contractor.



    (d) Educational institutions. It is DOE policy not to pay fees 



under contracts with educational institutions.



    (e) State, local and Indian tribal governments. Profit or fee shall 



not be paid under contracts with State, local, and Indian tribal 



Governments.











915.404-70-2  Weighted guidelines system.







    (a) To properly reflect differences among contracts and the 



circumstances relating thereto and to select an appropriate relative 



profit/fee in consideration of these differences and circumstances, 



weightings have been developed for application by the contracting 



officer to standard measurement bases representative of the prescribed 



profit factors cited in FAR 15.404-4(d) and paragraph (d) of this 



section. This is a structured system, referred to as weighted 



guidelines. Each profit factor or subfactor, or component thereof, has 



been assigned weights relative to their value to the contract's overall 



effort. The range of weights to be applied to each profit factor is 



also set forth in paragraph (d) of this section. Guidance on how to 



apply the weighted guidelines is set forth in 48 CFR 915.404-4-70-8.



    (b) Except as set forth in 48 CFR 915.404-4-70-4, the weighted 



guidelines shall be used in establishing the profit objective for 



negotiation of contracts where cost analysis is performed.



    (c) The negotiation process does not contemplate or require 



agreement on either estimated cost elements or profit elements. 



Accordingly, although the details of analysis and evaluation may be 



discussed in the fact-finding phase of the negotiation process in order 



to develop a mutual understanding of the logic of the respective 



positions, specific agreement on the exact weights of values of the 



individual profit factors is not required and need not be attempted.



    (d) The factors set forth in the following table are to be used in 



determining DOE profit objectives. The factors and weight ranges for 



each factor shall be used in all instances where the weighted 



guidelines are applied.







------------------------------------------------------------------------



               Profit factors                  Weight ranges  (percent)



------------------------------------------------------------------------



I. Contractor Effort (Weights applied to



 cost):



    A. Material acquisitions:



        1. Purchased parts..................  1 to 3.



        2. Subcontracted items..............  1 to 4.



        3. Other materials..................  1 to 3.



    B. Labor skills:



        1. Technical and managerial:........



            a. Scientific...................  10 to 20.



            b. Project management/            8 to 20.



             administration.



            c. Engineering..................  8 to 14.



        2. Manufacturing....................  4 to 8.



        3. Support services.................  4 to 14.



    C. Overhead:



        1. Technical and managerial.........  5 to 8.



        2. Manufacturing....................  3 to 6.



        3. Support services.................  3 to 7.



    D. Other direct costs                     3 to 8.



    E. G&A (General Management) expenses      5 to 7.



II. Contract Risk (type of contract-weights   0 to 8.



 applied to total cost of items IA thru E).



III. Capital Investment (Weights applied to   5 to 20.



 the net book value of allocable facilities).



IV. Independent Research and Development:



    A. Investment in IR&D program (Weights    5 to 7.



     applied to allocable IR&D costs)



    B. Developed items employed (Weights      0 to 20.



     applied to total of profit $ for items



     IA thru E)



V. Special Program Participation (Weights     -5 to +5.



 applied to total of Profit $ for items IA



 thru E).



VI. Other Considerations (Weights applied to  -5 to +5.



 total of Profits $ for items 1A thru E).



VII. Productivity/Performance (special        (N/A).



 computation).



------------------------------------------------------------------------







915.404-4-70-3  Documentation.







    Determination of the profit or fee objective, in accordance with 



this subpart shall be fully documented. Since the profit objective is 



the contracting officer's pre-negotiation evaluation of a total profit 



allowance for the proposed contract, the amounts developed for each 



category of cost will probably change in the course of negotiation. 



Furthermore, the negotiated amounts will probably vary from the 



objective and from the pre-negotiation detailed application of the 



weighted guidelines technique to each element of the contractor's input 



to total performance. Since the profit objective is viewed as a whole 



rather than as its



component parts, insignificant variations from the pre-negotiation 



profit objective, as a result of changes to the contractor's input to 



total performance, need not be documented in detail. Conversely, 



significant deviations from the profit objective necessary to reach a 



final agreement on profit or fee shall be explained in the price 



negotiation memorandum prepared in accordance with FAR 15.406-3.











915.404-4-70-4  Exceptions.







    (a) For contracts not expected to exceed $500,000, the weighted 



guidelines need not be used; however, the contracting officer may use 



the weighted guidelines for contracts below this amount if he or she 



elects to do so.



    (b) For the following classes of contracts, the weighted guidelines 



shall not be used:



    (1) Commercialization and demonstration type contracts;



    (2) Management and operating contracts;



    (3) Construction contracts;



    (4) Construction management contracts;



    (5) Contracts primarily requiring delivery of material supplied by 



subcontractors;



    (6) Termination settlements; and



    (7) Contracts with educational institutions.



    (c) In addition to paragraphs (a) and (b) of this section, the 



contracting officer need not use the weighted guidelines in unusual 



pricing situations where the weighted guidelines method has been 



determined by the DOE negotiating official to be unsuitable. Such 



exceptions shall be justified in writing and shall be authorized by the 



Head of the Contracting Activity. The contract file shall include this 



documentation and any other information that may support the exception.



    (d) If the contracting officer makes a written determination that 



the pricing situation meets any of the circumstances set forth in this 



section, other methods for establishing the profit objective may be 



used. For contracts other than those subject to 48 CFR 917.6, the 



selected method shall be supported in a manner similar to that used in 



the weighted guidelines (profit factor breakdown and documentation of 



profit objectives); however, investment or other factors that would not 



be applicable to the contract shall be excluded from the profit 



objective determination. It is intended that the methods will result in 



profit objectives for noncapital intensive contracts that are below 



those generally developed for capital intensive contracts.











915.404-4-70-5  Special considerations-contracts with nonprofit 



organizations (other than educational institutions).







    (a) For purposes of identification, nonprofit organizations are 



defined as those business entities organized and operated exclusively 



for charitable, scientific, or educational purposes, of which no part 



of the net earnings inure to the benefit of any private shareholder or 



individual, of which no substantial part of the activities is 



attempting to influence legislation or participating in any political 



campaign on behalf of any candidate for public office, and which are 



exempt from Federal income taxation under section 501 of the Internal 



Revenue Code.



    (b) In computing the amount of profit or fee to be paid, the DOE 



negotiating official shall take into account the tax benefits received 



by a nonprofit organization. While it is difficult to establish the 



degree to which a remuneration under any given contract contributes to 



an organization's overall net profit, the DOE negotiating official 



should assume that there is an element of profit in any amount to be 



paid.



    (c) In order to assure consideration of the tax posture of 



nonprofit organizations during a profit or fee negotiation, the DOE 



negotiating official shall calculate the fee as for a contract with a 



commercial concern and then reduce it at least 25 percent. However, 



depending on the circumstances, the contracting officer may pay profit 



or fees somewhere between this amount and the appropriate profit or fee 



as if it were a commercial concern. When this is the case, the contract 



file shall be documented to specifically state the reason or reasons.



    (d) Where a contract with a nonprofit organization is for the 



operation of Government-owned facilities, the fee should be calculated 



using the procedures and schedules applicable to operating contracts as 



set forth in 48 CFR part 970.











915.404-4-70-6  Contracts with educational institutions.







    In certain situations the DOE may contract with a university to 



manage or operate Government-owned laboratories. These efforts are 



generally apart from, and not in conjunction with, their other 



activities, and the complexity and magnitude of the work are not 



normally found in standard university research or study contracts. Such 



operating contracts are subject to the applicable provisions set forth 



in 48 CFR part 970.











915.404-4-70-7  Alternative techniques.







    (a) Profit or fees to be paid on construction contracts and 



construction management contracts shall be determined in accordance 



with the applicable profit/fee technique for such contracts set forth 



in 48 CFR 915.404-4-71.



    (b) Profit and fee to be paid on contracts under $500,000, not 



using the weighted guidelines, shall be judgmentally developed by the 



contracting officer by assigning individual dollar amounts to the 



factors appropriate to DOE profit considerations discussed in 48 CFR 



915.404-4-70-2(d).



    (c) Contracts which require only delivery or furnishing of goods or 



services supplied by subcontractors shall include a fee or profit 



which, in the best judgment of the contracting officer, is appropriate. 



It would be expected that there would be a declining relationship of 



profit/fee dollars in relation to total costs. The higher the cost of 



subcontracts, for example, the lower the profit/fee ratio to these 



costs.



    (d) Profit/Fee considerations in termination settlements are often 



a question of equity. They are a matter of negotiation. They should 



not, however, exceed what would have otherwise been payable under 



weighted guidelines had the termination not occurred.











915.404-4-70-8  Weighted guidelines application considerations.







    The Department has developed internal procedures to aid the 



contracting officer in the application of weighted guidelines and to 



assure a reasonable degree of uniformity across the Department.











915.404-4-71  Profit and fee-system for construction and construction 



management contracts.











915.404-4-71-1  General.







    (a) Business concerns awarded a DOE construction or construction 



management contract shall be paid a profit or fee if requested or 



solicited. The profit or fee objective for a construction or 



construction management contract shall be an amount appropriate for the 



type of effort contained therein. It is the intent of DOE to



    (1) Reward contractors based on the complexity of work,



    (2) Reward contractors who demonstrate and establish excellent 



records of performance and



    (3) Reward contractors who contribute their own resources, 



including facilities and investment of capital.











    (b) Standard fees or across-the-board agreements will not be used 



or made. Profit or fee objectives are to be determined for each 



contract according to the effort or task contracted for thereunder.



    (c) Profit or fee payable on fixed-price and cost-reimbursable 



construction or construction management contracts shall be established 



in accordance with the appropriate procedures and schedules set forth 



in this subpart.











915.404-4-71-2  Limitations.







    Amounts payable under construction and construction management 



contracts shall not exceed amounts derived from the schedules 



established for this purpose. Requests to pay fees in excess of these 



levels shall be forwarded to the Procurement Executive for review and 



approval.











915.404-4-71-3  Factors for determining fees.







    (a) The profit policy stated in 48 CFR 915.404-4-71-1(a) reflects, 



in a broad sense, recognition that profit is compensation to 



contractors for the entrepreneurial function of organizing and managing 



resources (including capital resources), and the assumption of risk 



that all costs of performance (operating and capital) may not be 



reimbursable.



    (b) The best approach calls for a structure that allows judgmental 



evaluation and determination of fee dollars for prescribed factors 



which impact the need for, and the rewards associated with, fee or 



profit, as follows.



    (1) Management risk relating to performance, including the



    (i) Quality and diversity of principal work tasks required to do 



the job,



    (ii) Labor intensity of the job,



    (iii) Special control problems, and



    (iv) Advance planning, forecasting and other such requirements;



    (2) The presence or absence of financial risk, including the type 



and terms of the contract;



    (3) The relative difficulty of work, including consideration of 



technical and administrative knowledge, skill, experience and clarity 



of technical specifications;



    (4) Degree and amount of contract work required to be performed by 



and with the contractor's own resources, including the extent to which 



the contractor contributes plant, equipment, computers, or working 



capital (labor, etc.);



    (5) Duration of project;



    (6) Size of operation;



    (7) Benefits which may accrue to the contractor from gaining 



experience and know-how, from establishing or enhancing a reputation, 



or from being enabled to hold or expand a staff whose loyalties are 



primarily to the contractor; and



    (8) Other special considerations, including support of Government 



programs such as those relating to small, small disadvantaged, and 



women-owned small business in subcontracting, energy conservation, etc.



    (c) The total fee objective and amount for a particular negotiation 



is established by judgmental considerations of the factors in paragraph 



(b) of this section, assigning fee values as deemed appropriate for 



each factor and totaling the resulting amounts.



    (d) In recognition of the complexities of this process, and to 



assist in promoting a reasonable degree of consistency and uniformity 



in its application, fee schedules have been developed which set forth 



maximum fee amounts that contracting activities are allowed to 



negotiate for a particular transaction without obtaining prior approval 



of the Procurement Executive. In addition, the fee negotiation 



objective established in accordance with 48 CFR 915.404-4-71-3(a), (b), 



and (c) shall not exceed the applicable fee schedule amounts without 



prior approval of the Procurement Executive. To facilitate application 



to a contract, the fee amounts are related to the total cost base which 



is defined as total operating and capital costs.











915.404-4-71-4  Considerations affecting fee amounts.







    (a) In selecting final fee amounts for the various factors in 48 



CFR 915.404-4-71-3 of this section, the DOE negotiating official will 



have to make several judgments as discussed in this subsection.



    (b) Complexity of a construction project shall be considered by 



analysis of its major parts. For a project which includes items of work 



of different degrees of complexity, a single average classification 



should be considered, or the work should be divided into separate 



classifications. The following class identifications are appropriate 



for proper fee determinations.



    (1) Class A--Manufacturing plants involving operations requiring a 



high degree of design layout or process control; nuclear reactors; 



atomic particle accelerators; complex laboratories or industrial units 



especially designed for handling radioactive materials.



    (2) Class B--Normal manufacturing processes and assembly operations 



such as ore dressing, metal working plant and simple processing plants; 



power plants and accessory switching and transformer stations; water 



treatment plants; sewage disposal plants; hospitals; and ordinary 



laboratories.



    (3) Class C--Permanent administrative and general service 



buildings, permanent housing, roads, railroads, grading, sewers, storm 



drains, and water and power distribution systems.



    (4) Class D--Construction camps and facilities and other 



construction of a temporary nature.



    (c) Normal management elements of principal tasks relating to a 



construction contract cover several categories of tasks with differing 



rates of application throughout the construction period. The principal 



elements of management effort are outlined in this paragraph. Although 



each project has a total management value equal to 100% for all 



elements, the distribution of effort among the various elements will be 



different for each project due to differences in project character or 



size. The basic management elements and the normal range of efforts 



expected to apply for a normal sized project are as follows. When the 



normally expected effort will not be performed by a contractor, this 



fact should be considered in arriving at appropriate fee amounts.







------------------------------------------------------------------------



                                                        Effort range



                Management elements                ---------------------



                                                     Minimum    Maximum



------------------------------------------------------------------------



I. Broad project planning. Overall project



 planning and scheduling, establishment of key



 project organization and consultation with the A-



 E and DOE. Performed by highest level of



 contractor's officers, technical personnel and



 project manager..................................         15         25



II. Field planning. Mobilization and



 demobilization of top field organization from the



 contractor's existing organization and from other



 sources as necessary. Detailed project planning



 and scheduling for construction of facilities.



 Performed by the project manager and top field



 professional staff...............................         18         28







III. Labor supervision. Direct supervision of



 manual employees. Performed by contractor's



 subprofessional staff, such as superintendents



 and foremen (some salaried and some hourly rate).



 This includes the contractor's personnel to



 coordinate and expedite the work of



 Subcontractors...................................         12         16



IV. Acquisition and subcontracting. Acquisition of



 other than special equipment. Selection of



 subcontractors and execution and administration



 of subcontracts. Performed by contractor's staff



 under supervision and direction of elements I and



 II...............................................         12         16



V. Labor relations and recruit-ment (manual).



 Performed by the contractor's staff under



 supervision and direction of elements I, II and



 III. This includes demobilization of work forces.          7         11



VI. Recruitment of supervisory staff. Staffing



 required to supplement the organization under



 elements I and II, and demobilization during



 completion of the project. Performed by



 contractor's permanent staff and recruitment



 personnel under supervision and direction of



 management elements I and II.....................          4          6



VII. Expediting. Expediting contracting performed



 by contractor's staff and by subcontractors.



 Performed by contractor's staff under supervision



 and direction of elements I and II...............          4          6



VIII. Construction equipment operations. This



 includes mobilization and demobilization.



 Performed by contractor's staff under



 supervision, direction and coordination of



 elements I, II, and IV...........................          4          6



IX. Other services. Timekeeping, cost accounting,



 estimating, reporting, security, etc., by the



 contractor's staff under supervision and



 direction of elements I and II...................          4          6



------------------------------------------------------------------------







    (d) Fee considerations dealing with the duration of a project are 



usually provided by the consideration given to the degree of complexity 



and magnitude of the work. In only very unusual circumstances should it 



be necessary to separately weight, positively or negatively, for the 



period of services or length of time involved in the project when 



determining fee levels.



    (e) The size of the operation is to a considerable degree a 



continuation of the complexity factor, and the degree and amount of 



work required to be performed by and with the contractor's own 



resources. Generally, no separate weighting, positively or negatively, 



is required for consideration of those factors.



    (f) The degree and amount of work required to be performed by and 



with the contractor's own resources affect the level of fees. 



Reasonable fees should be based on expectations of complete 



construction services normally associated with a construction or 



construction management contract. In the case of a construction 



contract, reduced services can be in the form of excessive 



subcontracting or supporting acquisition actions and labor relations 



interfaces being made by the government. If an unusual amount of such 



work is performed by other than the contractor, it will be necessary to 



make downward adjustments in the fee levels to provide for the 



reduction in services required.



    (g) The type of contract to be negotiated and the anticipated 



contractor cost risk shall be considered in establishing the 



appropriate fee objective for the contract.



    (h) When a contract calls for the contractor to use its own 



resources, including facilities and equipment, and to make its own cost 



investment (i.e., when there is no letter-of-credit financing), a 



positive impact on the fee amount shall be reflected.











915.404-4-71-5  Fee schedules.







    (a) The schedules included in this paragraph, adjusted in 



accordance with provisions of this section and 48 CFR 915.404-4-71-6, 



provide maximum fee levels for construction and construction management 



contracts. The fees are related to the estimated cost (fee base) for 



the construction work and services to be performed. The schedule in 



paragraph (d) of this section sets forth the basic fee schedule for 



construction contracts. The schedule in paragraph (f) of this section 



sets forth the basic fee schedule for construction management 



contracts. A separate schedule in paragraph (h) of this section has 



been developed for determining the fee applicable to special equipment 



purchases and to reflect a differing level of fee consideration 



associated with the subcontractor effort under construction management 



contracts. (See 48 CFR 915.404-4-71-6(c) and 915.404-4-71-6(d)).



    (b) The schedules cited in paragraph (a) of this section provide 



the maximum fee amount for a CPFF contract arrangement. If a fixed-



price type contract is to be awarded, the fee amount set forth in the 



fee schedules shall be increased by an amount not to exceed 4 percent 



of the fee base.



    (c) The fee schedule shown in paragraphs (d) and (f) of this 



section assumes a letter of credit financing arrangement. If a contract 



provides for or requires the contractor to make their own cost 



investment for contract performance (i.e., when there is no letter-of-



credit financing), the fee amounts set forth in the fee schedules shall 



be increased by an amount equal to 5 percent of the fee amount as 



determined from the schedules.



    (d) The following schedule sets forth the base for construction 

contracts:



                     Construction Contracts Schedule

------------------------------------------------------------------------

                                                          Fee     Incr.

            Fee base (dollars)                 Fee        (per     (per

                                            (dollars)    cent)    cent)

------------------------------------------------------------------------

Up to $1 Million.........................  ...........  .......     5.47

1,000,000................................       54,700     5.47     3.88

3,000,000................................      132,374     4.41     3.28

5,000,000................................      198,014     3.96     2.87

10,000,000...............................      341,328     3.41     2.60

15,000,000...............................      471,514     3.14     2.20

25,000,000...............................      691,408     2.77     1.95

40,000,000...............................      984,600     2.46     1.73

60,000,000...............................    1,330,304     2.22     1.56

80,000,000...............................    1,643,188     2.05     1.41

100,000,000..............................    1,924,346     1.92     1.26

150,000,000..............................    2,552,302     1.70     1.09

200,000,000..............................    3,094,926     1.55     0.80

300,000,000..............................    3,897,922     1.30     0.68

400,000,000..............................    4,581,672     1.15     0.57

500,000,000..............................    5,148,364     1.03

Over $500 Million........................    5,148,364  .......     0.57

------------------------------------------------------------------------





    (e) When using the Construction Contracts Schedule for establishing 



maximum payable basic fees, the following adjustments shall be made to 



the Schedule fee amounts for complexity levels, excessive 



subcontracting, normal contractor services performed by the government 



or another contractor:



    (1) The target fee amounts, set forth in the fee schedule, shall 



not be adjusted for a Class A project, which is maximum complexity. A 



Class B project requires a 10 percent reduction in amounts. Class C and 



D projects require a 20 percent and 30 percent reduction, respectively. 



The various classes are defined in 48 CFR 915.404-4-71-4(b).



    (2) The target fee schedule provides for 45 percent of the contract 



work to be subcontracted for such things as electrical and other 



specialties. Excessive subcontracting results when such efforts exceed 



45 percent of the total contract work. To establish appropriate fee 



reductions for excessive subcontracting, the negotiating official 



should first determine the amount of subcontracting as a percentage of 



the total contract work. Next, the negotiating official should 



determine a percentage by which the prime contractor's normal 



requirement (based on a requirement for doing work with its own forces) 



is reduced due to the excessive subcontracting and, finally, multiply 



the two percentages to determine a fee reduction factor.



    (3) If acquisition or other services normally expected of the 



contractor (see 48 CFR 915.404-4-71-4(c)) are performed by the 



government, or another DOE prime or operating contractor, a fee 



reduction may also be required. The negotiating official should first 



determine what percentage of the total procurement or other required 



services is performed by others. Then the negotiating official should 



apply this percentage reduction to the normally assigned weightings for 



the management services or effort as discussed in 48 CFR 915.404-4-71-



4(c) to arrive at the appropriate reduction factor.





    (f) The following schedule sets forth the base for construction 

management contracts:



               Construction Management Contracts Schedule

------------------------------------------------------------------------

                                                          Fee     Incr.

            Fee base (dollars)                 Fee        (per     (per

                                            (dollars)    cent)    cent)

------------------------------------------------------------------------

Up to $1 Million.........................  ...........  .......     5.47

1,000,000................................       54,700     5.47     3.88

3,000,000................................      132,374     4.41     3.28

5,000,000................................      198,014     3.96     2.87

10,000,000...............................      341,328     3.41     2.60

15,000,000...............................      471,514     3.14     2.20

25,000,000...............................      691,408     2.77     1.95

40,000,000...............................      984,600     2.46     1.73

60,000,000...............................    1,330,304     2.22     1.56

80,000,000...............................    1,643,188     2.05     1.41

100,000,000..............................    1,924,346     1.92     1.26

150,000,000..............................    2,552,302     1.70     1.09

200,000,000..............................    3,094,926     1.55     0.80

300,000,000..............................    3,897,922     1.30     0.68

400,000,000..............................    4,581,672     1.15     0.57

500,000,000..............................    5,148,364     1.03

Over $500 Million........................    5,148,364  .......     0.57

------------------------------------------------------------------------



    (g) When applying the basic Construction Management Contracts 



Schedule for determining maximum payable fees, no adjustments are 



necessary to such payable fees for contractor Force account labor used 



for work which should otherwise be subcontracted until such Force 



account work exceeds, in the aggregate, 20 percent of the base. 



Excessive use of Force account work results when such effort exceeds 20 



percent of the fee base; and, when this occurs, appropriate fee 



reductions for such excessive Force account labor shall be computed as 



follows:



    (1) Determine the percentage amount of Force account work to total 



contractor effort.



    (2) Determine the percentage amount of subcontract work reduced due 



to the use of Force account work.



    (3) Multiply the two percentages to determine the fee reduction 



factor. It is not expected that reductions in the Construction 



Management Contracts Schedule fee amounts will be made for complexity, 



reduced requirements and similar adjustments as made for construction 



contracts.

(h) The schedule of fees for consideration of special equipment purchases and

for consideration of the subcontract program under a construction management

contract is as follows:


          Special Equipment Purchases/Subcontract Work Schedule

------------------------------------------------------------------------

                                                          Fee     Incr.

            Fee base (dollars)                 Fee        (per     (per

                                            (dollars)    cent)    cent)

------------------------------------------------------------------------

Up to $1 Million.........................  ...........  .......     1.64

1,000,000................................       16,410     1.64     1.09

2,000,000................................       27,350     1.37     0.93

4,000,000................................       45,948     1.15     0.77

6,000,000................................       61,264     1.02     0.71

8,000,000................................       75,486     0.94     0.66

10,000,000...............................       88,614     0.89     0.61

15,000,000...............................      119,246     0.79     0.53

25,000,000...............................      171,758     0.69     0.47

40,000,000...............................      242,868     0.61     0.43

60,000,000...............................      329,294     0.55     0.39

80,000,000...............................      406,968     0.51     0.37

100,000,000..............................      480,266     0.48     0.28

150,000,000..............................      619,204     0.41     0.23

200,000,000..............................      732,980     0.37     0.13

300,000,000..............................      867,542     0.29  .......

Over $300 Million........................      867,542  .......      013

------------------------------------------------------------------------

[64 FR 12219, March 11, 1999]




915.404-4-71-6  Fee base.







    (a) The fee base shown in the Construction Contracts Schedule and 



Construction Management Contracts Schedule represents that estimate of 



cost to which a percentage factor is applied to determine maximum fee 



allowances. The fee base is the estimated necessary allowable cost of 



the construction work or other services which are to be performed. It 



shall include the estimated cost for, but is not limited to, the 



following as they may apply in the case of a construction or 



construction management contract:



    (1) Site preparation and utilities.



    (2) Construction (labor-materials-supplies) of buildings and 



auxiliary facilities.



    (3) Construction (labor-materials-supplies) to complete/construct 



temporary buildings.



    (4) Design services to support the foregoing.



    (5) General management and job planning cost.



    (6) Labor supervision.



    (7) Procurement and acquisition administration.



    (8) Construction performed by subcontractors.



    (9) Installation of government furnished or contractor acquired 



special equipment and other equipment.



    (10) Equipment (other than special equipment) which is to become 



Government property (including a component of Government property).



    (b) The fee base for the basic fee determination for a construction 



contract and construction management contract shall include all 



necessary and allowable costs cited in paragraph (a) of this section as 



appropriate to the type of contract; except, any home office G&A 



expense paid as a contract cost per cost principle guidance and 



procedures shall be excluded from the fee base. The fee base shall 



exclude:



    (1) Cost of land.



    (2) Cost of engineering (A&E work).



    (3) Contingency estimate.



    (4) Equipment rentals or use charges. (See 48 CFR 936.70.)



    (5) Cost of government furnished equipment or materials.



    (6) Special equipment as defined in 48 CFR 936.7201.



    (c) A separate fee base shall be established for special equipment 



for use in applying the Special Equipment Purchases or Subcontract Work 



Schedule (see 48 CFR 915.404-4-71-5(h)). The fee base for determination 



of applicable fees on special equipment shall be based on the estimated 



purchase price of the equipment.



    (d) The fee base under the Construction Management Contracts 



Schedule for a maximum basic fee determination for a construction 



management contract shall be comprised of only the costs of the 



construction manager's own efforts. However, it is recognized that in 



the case of construction management contracts, the actual construction 



work will be performed by subcontractors. In most cases the subcontract 



awards for the construction work will be made by the construction 



management contractor. Occasionally the contract may involve management 



of construction performed under a contract awarded by the Department or 



by one of the Department's operating contractors. In these cases, the 



actual cost of the subcontracted construction work shall be excluded 



from the fee base used to determine the maximum basic fee (under the 



Construction Management Contracts Schedule) applicable to a 



construction management contract. A separate fee base for additional 



allowances (using the Special Equipment Purchases or Subcontract Work 



Schedule) shall be established, which shall be comprised of those 



subcontract construction costs, special equipment purchases, and other 



items' costs that are contracted for or purchased by the construction 



manager.









915.404-4-72  Special considerations for cost-plus-award-fee contracts.





    (a) When a contract is to be awarded on a cost-plus-award-fee basis 



several special considerations are appropriate. Fee objectives for 



management and operating contracts or other contracts as determined by 



the Procurement Executive, including those using the Construction, 



Construction Management, or Special Equipment Purchases/Subcontract 



Work schedules from 48 CFR 915.404-4-71-5, shall be developed pursuant 



to the procedures set forth in 48 CFR 970.15404-4-8. Fee objectives for 



other cost-plus-award-fee contracts shall be in accordance with 48 CFR 



916.404-2 and be developed as follows:





    (1) The base fee portion of the fee objective of an award fee 



contract may range from 0% up to the 50% level of the fee amount for a 



Cost-Plus-Fixed-Fee (CPFF) contract, arrived at by using the weighted 



guidelines or other techniques (such as those provided in 48 CFR 



915.404-4-71 for construction and construction management contracts). 



However, the base amount should not normally exceed 50% of the 



otherwise applicable fixed fee. In the event this 50% limit is 



exceeded, appropriate documentation shall be entered into the contract 



file. In no event shall the base fee exceed 60% of the fixed fee 



amount.



    (2) The base fee plus the amount included in the award fee pool 



should normally not exceed the fixed fee (as subjectively determined or 



as developed from the fee schedule) by more than 50%. However, in the 



event the base fee is to be less than 50% of the fixed fee, the maximum 



potential award fee may be increased proportionately with the decreases 



in base fee amounts.



    (3) The following maximum potential award fees shall apply in award 



fee contracts: (percent is stated as percent of fee schedule amounts).







------------------------------------------------------------------------



                                                               Maximum



               Base fee percent                  Award fee      total



                                                  percent     percentage



------------------------------------------------------------------------



50............................................          100          150



40............................................          120          160



30............................................          140          170



20............................................          160          180



10............................................          180          190



0.............................................          200          200



------------------------------------------------------------------------







    (b) Prior approval of the Procurement Executive, is required for 



total fee (base plus award fee pool) exceeding the guidelines in 48 CFR 



915.404-4-72(a)(3).



[64 FR 12219, March 11, 1999]





Subpart 915.6--Unsolicited Proposals





915.602  Policy.







    (a) Present and future needs demand the involvement of all 



resources in exploring alternative energy sources and technologies. To 



achieve this objective, it is DOE policy to encourage external sources 



of unique and innovative methods, approaches, and ideas by stressing 



submission of unsolicited proposals for government support. In 



furtherance of this policy and to ensure the integrity of the 



acquisition process through application of reasonable controls, the 



DOE:



    (1) Disseminates information on areas of broad technical concern 



whose solutions are considered relevant to the accomplishment of DOE's 



assigned mission areas;



    (2) Encourages potential proposers to consult with program 



personnel before expending resources in the development of written 



unsolicited proposals;



    (3) Endeavors to distribute unsolicited proposals to all interested 



organizations within DOE;



    (4) Processes unsolicited proposals in an expeditious manner and, 



where practicable, keeps proposers advised as discrete decisions are 



made;



    (5) Assures that each proposal is evaluated in a fair and objective 



manner; and, (6) Assures that each proposal will be used only for its 



intended purpose and the information, subject to applicable laws and 



regulations, contained therein will not be divulged without prior 



permission of the proposer.



    (b) Extensions of contract work resulting from unsolicited 



proposals shall be processed in accordance with the procedures at 48 



CFR 943.170.











915.603  General. (DOE coverage-paragraph (e)).







    (e) Unsolicited proposals for the performance of support services 



are, except as discussed in this paragraph, unacceptable as the 



performance of such services is unlikely to necessitate innovative and 



unique concepts. There may be rare instances in which an unsolicited 



proposal offers an innovative and unique approach to the accomplishment 



of a support service. If such a proposal offers a previously unknown or 



an alternative approach to generally recognized techniques for the 



accomplishment of a specific service(s) and such approach will provide 



significantly greater economy or enhanced quality, it may be considered 



for acceptance. Such acceptance shall, however, require approval of the 



acquisition of support services in accordance with applicable DOE 



Directives and be processed as a deviation to the prohibition in this 



paragraph.











915.605  Content of unsolicited proposals. (DOE coverage-paragraph 



(b)).







    (b)(5) Unsolicited proposals for nonnuclear energy demonstration 



activities not covered by existing formal competitive solicitations or 



program opportunity notices may include a request for federal 



assistance or participation, and shall be subject to the cost sharing 



provisions of 48 CFR 917.70.











915.606  Agency procedures. (DOE coverage-paragraph (b)).







    (b) Unless otherwise specified in a notice of program interest, all 



unsolicited proposals should be submitted to the Unsolicited Proposal 



Coordinator, Office of Procurement and Assistance, Washington, DC 



20585. If the proposer has ascertained the cognizant program office 



through preliminary contacts with program staff, the proposal may be 



submitted directly to that office. In such instances, the proposer 



should separately send a copy of the proposal cover letter to the 



unsolicited proposal coordinator to assure that the proposal is logged 



in the Department's automated tracking system for unsolicited 



proposals.











915.607  Criteria for acceptance of an unsolicited proposal. (DOE 



coverage--paragraph (c)).







    (c) DOE's cost participation policy, at 48 CFR 917.70, shall be 



followed in determining the extent to which the DOE will participate in 



the cost for the proposed effort.



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