SUBPART 15.4--SOLICITATION AND RECEIPT OF PROPOSALS AND QUOTATIONS
15.405 Solicitations for information or planning purposes.
The determination to issue a solicitation for information or planning purposes shall be approved at a level higher than the contracting officer.
15.405-90 Draft requests for proposals.
DRFPs are useful in obtaining feedback from industry which may promote competition, shorten lead-time and reduce costs. The DRFP will provide the opportunity to adapt requirements to industrial production capabilities and capacities and to identify ambiguous or erroneous language, unnecessary requirements, and overly complex or restrictive elements.
It is the policy of the Army to use DRFPs as a normal part of acquisition strategy for complex and/or high dollar value acquisitions. DRFPs should be used for other acquisitions when there are concerns with the statement of work or specifications or when there are significant technical risks. As a minimum, special instructions, evaluation factors, special contract requirements, general provisions, statements of work, data lists and specifications should be included in each DRFP provided to industry. In those instances where an acquisition plan (AP) is required (DFARS 207.103(c)) and a DRFP is not used, rationale for not using a DRFP shall be included in the AP.
Every effort should be made to encourage prospective contractors to--
(a) Evaluate and challenge all elements of the DRFP;
(b) Propose methods to reduce proposal and contract costs;
(c) Provide feedback on the proposed pricing arrangement;
(d) Identify requirements that account for a high percentage of total cost;
(e) Identify new technology approaches and manufacturing techniques appropriate for the procurement described in the DRFP; and
(f) Identify production and assembly techniques that result in delivery of better products with the best possible reliability and maintainability characteristics.
(a) Synopsize DRFPs in accordance with FAR Subpart 5.2.
(b) Comply with FAR 15.405-2.
(c) Contracting officers may transmit DRFPs to industry by letter or, in accordance with FAR 4.5, by using electronic commerce methods. Also send a copy to the cognizant contract administration office for each prospective offeror provided a copy of the DRFP. The transmittal shall--
(1) Describe the objectives of the DRFP as stated in 15.405-90-3;
(2) Summarize salient features of the DRFP and identify areas which should be given specific attention or which may be most susceptible to change;
(3) Emphasize that responses are voluntary, not mandatory, and that the Government is not negotiating or calling for offers;
(4) Remind respondents that suggested savings should be based on total cost of ownership and should not be obtained by showing reduced "instant contract costs" at the expense of life cycle costs if this is consistent with proposed evaluation factors and basis for award;
(5) Ask respondents to suggest alternatives to the Government approach and to suggest ways to obtain and sustain competition;
(6) Clearly identify the office to which responses are to be sent; and
(7) Allow a reasonable period of time for industry to respond to the DRFP.
(d) The DRFP transmittal letter and responses shall become part of the contract file.
(e) Contracting officers shall document the disposition of suggested changes to the RFP in the solicitation file.
(b) Handle classified solicitations in accordance with DoDD 5200.1 and AR 380-5.
SUBPART 15.6--SOURCE SELECTION
"Best value," as used in this subpart, means the process used in competitive negotiated acquisition to select the most advantageous offer by evaluating and comparing factors in addition to cost or price (FAR 15.602(a)(2)). "The best (or greatest) value" is the offer which is most advantageous to the Government, cost or price and other factors considered. Implicit in a best value source selection is the Government's willingness to accept other than the lowest priced, minimally acceptable offer, if the added benefits of a higher priced offer exceed the additional cost or price. This is determined by a cost-benefit tradeoff analysis.
"Evaluation factor(s)," as used in this subpart, means those aspects of a proposal that will be evaluated quantitatively and qualitatively to arrive at an integrated assessment as to which proposal can best meet the Government's need as described in the solicitation.
(a)(1)(A) The lowest price, technically acceptable procedure is the least complex form of negotiated source selection. It is characterized by evaluation of competing technical proposals against the solicitation requirements and rating them against those solicitation requirements on a go - no go basis (acceptable - unacceptable; but see FAR 15.609(a) and (b)). Discussions are conducted (if necessary), proposals re-evaluated, best and final offers requested, and award made to the lowest priced, technically acceptable responsible offeror. Note: Competing technical proposals are evaluated against the solicitation requirements; they are not compared with each other. The price or cost of technically acceptable proposals is compared and award made to the responsible low offeror.
(a)(1)(B) Low-price technically acceptable source selection is generally used when there is little likelihood that there will be significant differences between the products/services offered by different sources. This is normally the case when specifications are detailed, offeror discretion is limited, and the scope of the successful contractor's responsibility will not be extensive. However, even in these instances, best value may be used if limited to the consideration of past performance.
(a)(2)(A) It is Army policy to use best value procedures for all formal source selections. Best value should also be used for all other competitive negotiated acquisitions whenever appropriate.
(B) The best value procedure is a more complex form of source selection, since it requires assessments of price and other factors used in some combination as a basis for comparing competing proposals. It is characterized by evaluating competing proposals against the solicitation requirements, performing an integrated assessment of each proposal, comparing proposals with each other in such a way as to trade off advantages and disadvantages of each proposal and the associated price or cost, and making award to the responsible offeror whose proposal is determined by the source selection authority (SSA) to be overall most advantageous to the Government, price and other factors considered (the best value).
(C) Best value source selection procedures are appropriate when cost or price is not the only comparative evaluation factor and the Government will benefit from comparison of proposals not only on the basis of cost or price, but also on other factors. This is often the case where, for example, requirements are difficult to define, have been historically troublesome or require a technological breakthrough. Best value source selection procedures are often used when the Government's requirements are stated in terms of functional or performance specifications and offerors will differ in their proposed solutions.
(a) In planning a best value source selection, considerable attention must be given to developing the factors which will be used to evaluate competing proposals. Evaluation factors are driven by the requirement and should reflect the true discriminators in the acquisition. They should not be so narrowly defined as to allow no variation in proposals nor so broadly worded as to allow wide-ranging interpretation by either offerors or evaluators.
(b) Evaluation factors shall be structured at a level of detail sufficient to discover those advantages, disadvantages and deficiencies of offers directly associated with significant aspects of the required items or significant tasks of the required services. Mere recitation of top level factors such as "technical" and "management" is insufficient. Evaluation factors must clearly communicate the intended basis of award to potential offerors.
(S-90) Manpower and Personnel Integration (MANPRINT) shall be an evaluation factor in source selection for major systems, designated acquisition programs and, when appropriate, other acquisition programs. MANPRINT may be a separate factor on the same level as "technical," "cost" or "management." However, proper integration of MANPRINT considerations requires that MANPRINT be included at some subfactor level in each and every area of proposal evaluation as appropriate for the acquisition.
(d)(i) The solicitation must clearly convey to potential offerors the Government's requirement, how proposals will be evaluated, and the basis for the source selection decision. The solicitation must clearly distinguish between minimum acceptable thresholds and desirable objectives and explicitly indicate whether the Government will consider capability above the minimal requirements as something of value which will offset higher price.
(ii) When it is intended to evaluate the cost of future production in excess of the instant contract quantity, and to include these costs as part of the basis of selection and award, the evaluation procedures must be clearly specified in the solicitation. Bid additives, options, future program years of multi-year contracts, unit pricing policies on spares, etc., are examples of proper items to include in a solicitation and source selection evaluation. Government estimates of future or life cycle costs may not be used in an evaluation unless the procedure and the methodology are specified in the solicitation.
(iii) When selecting past performance subfactors, focus on those requirements where it is reasonable to expect differences between offerors. Choose subfactors which are measurable and which discriminate between offerors. The subfactors should be those specific portions of a contractors past performance that are most relevant for judging the contractor's ability to meet the current contract requirements. For complex requirements, some of the subfactors that may be considered include contractor ability to solve complex problems, maintain schedules, control costs and manage subcontractors. For less complex requirements, some of the subfactors that may be considered include dependability, ability to reduce lead-time, safety records and understanding customer problems. The key is to tailor past performance subfactors to the key performance criteria in the statement of work.
(a) Evaluation standards establish the minimum level of acceptable compliance with a requirement that must be offered for a proposal to be considered. Standards may be qualitative or quantitative and are used for measuring how well each offeror's approach meets the requirements of the solicitation and to determine when an offeror fails to meet or exceeds the solicitation requirements. Proposal evaluation standards are not releasable either in the solicitation or outside the source selection organization. Evaluators will rate each proposal and indicate its worth in relation to the standards. Evaluation results on each offer will be stated in terms of the solicitation requirement and what is offered; whether it meets or fails to meet the established standards; the proposal advantages and disadvantages, and risks and their significance; what, in the evaluator's opinion, may be done to remedy a deficiency; and the effect of these elements should the offer be accepted, e.g., what impact (including technical, schedule and cost risk) the correction of the deficiency will have on the offeror's overall ability to perform.
(1) Cost or price evaluation. Cost or price shall be evaluated but shall not be scored or otherwise combined with other aspects of the proposal evaluation. For offers leading to a cost-reimbursement, redeterminable, or widely structured fixed price incentive type of contract, most probable cost estimates shall be made based on the offered methods of performance or the offered item. Decisions shall be based on the most probable cost estimates in the context of the contractor's offered price. For offers leading to a firm fixed price type contract (with or without economic price adjustment), decisions shall be based on the final offered price provided that it has been determined to be reasonable and that the proposal is otherwise in the Government's best interests.
(2) Past performance evaluation.
(i) The responsibility determination required by FAR 9.103 is an evaluation of an offeror's past performance to determine whether that offeror is capable of performing. Responsibility is a "go/no go" decision. It answers the question "can the offeror do the work?" In source selection, we make a comparative analysis of past performance records to discriminate between otherwise acceptable offers. We look for relative ratings among offerors and make a determination of performance risk. Performance risk is an assessment of the probability that an offeror will successfully perform the contract. The source and type of past performance information used in making a performance risk assessment is within the broad discretion of the contracting officer, and should be tailored to the circumstances of each acquisition.
(ii) Past performance information may be obtained from numerous sources: the offerors' references, commercial sources, pre-award surveys, on-site Government personnel at a contractor's facility, field data collection systems, and other procuring offices that are or were customers of the offeror. See 42.1503.
(3) Technical evaluation. Offers shall be evaluated on all factors having a significant bearing on the utility of the item, construction or service being required and all factors which may affect the cost to the Government of acquiring the item, construction or service.
(iii) Individual evaluator or unit scores will not be averaged or otherwise manipulated mathematically to produce a single raw score for any factor or subfactor. Scores shall be established as the result of a consensus of the evaluators, and not by vote. When divergent evaluations exist, and once it is clear that none of the evaluators has misinterpreted or misunderstood any aspects of the proposal(s), consider providing the SSA with written majority and minority opinions.
(S-90) When MANPRINT is a consideration, the evaluation report shall include an integrated assessment of how MANPRINT was addressed in all evaluation areas. The SSA is not bound to follow the recommendations resulting from the evaluation.
(b) The SSA shall approve the competitive range determination. Normally, the competitive range should not be reduced to a single offer. If only one offer was received, or a technical evaluation was completed and all but one offer are determined to be technically unacceptable, examine the requirements to determine if they were stated in such a way as to inhibit competition. This examination shall include contact with potential offerors to discern why they did not submit proposals. If it is determined that unduly restrictive requirements inhibited competition, consider appropriate changes to those requirements and cancellation and reissuance of the solicitation.
(c)(i)(A) The Senior Procurement Executive (SPE) is the approval authority for those acquisitions reviewed by the Army Systems Acquisition Review Council, Defense Acquisition Board, DoD or HQDA Major Automated Information Systems Review Council (MAISRC) or programs where approval authority is specifically withheld. Approval authority for other acquisitions is delegated to HCAs without power of redelegation.
(iii)(C) Provide summary reports to the SPE upon request. The report shall include the information required by DFARS 215.611(c)(ii). Also include any information on actions taken as a result of analyzing the trends.
(d) Best value source selection decisions shall not be made on the basis of a numerical point score, adjectival rating, or color codes alone. Scores, ratings and color codes are only guides to intelligent decision-making. The decision shall be made on the basis of an integrated assessment of the evaluation results as a whole. The SSA must make a tradeoff analysis to decide which proposal offers the best value. The analysis must look behind the scores and consider the strengths, weaknesses and risks associated with each proposal. The SSA has considerable discretion in making the analysis and decision. However, the SSA must ensure that it does not differ from, and is consistent with, the evaluation factors and the basis for award described in the solicitation. The decision must be rational and fully documented.
(i) When the lowest price offer is rated highest on the other evaluation factors, it is the apparent best value. If the evaluation results are verified by the SSA, that offeror shall receive the award.
(ii) Where the lowest price offer is not the highest rated in the other evaluation factors, the SSA must determine whether the difference in price is worth the difference in the other factors. Award may be based on a technically superior, higher priced offer when the SSA has reasonably determined that the technical difference is sufficiently significant to outweigh the price difference. Conversely, award may be based on a lower priced, lower rated offer when the SSA reasonably determines that the cost premium involved in selecting a higher priced, higher rated offer is not justified.
15.612 Formal source selection.
(a) General. See Appendix AA, "Formal Source Selection," and AFARS Manual No.1, "Formal Source Selection Procedures for Army Systems Acquisition."
(b) Responsibilities.
(1)(A) The Army Acquisition Executive (AAE) or designee is the SSA for major systems and designated Army acquisition programs. (See Part 2 for definition of AAE.) These include major information systems selected for review by the DoD or HQDA MAISRC.
(B) The Deputy Assistant Secretary of the Army for Procurement (DASA(P)), notwithstanding the delegation of authority in (C), may appoint the source selection authority for any acquisition described in (C).
(C) HCAs are delegated authority to appoint the source selection authority for--
(1) Acquisition Category III and IV programs defined in DoDI 5000.2, Part 2. Such appointments shall be coordinated with the Milestone Decision Authority and, if applicable, the Program Executive Officer (PEO); and
(2) Acquisitions not managed in accordance with DoDD 5000.1 for which formal source selection procedures are used.
(D) HCAs subordinate to the HQ, AMC, shall send nominations for source selection authorities for acquisitions which require departmental level approval to the addressee in 1.290(b)(1) through the HQ AMC Command Counsel. Forward the list of nominees in a sealed envelope marked "PERSONAL." Copies are not to be furnished to anyone other than the addressees in this paragraph.
(2) The structure and size of the source selection organization should be tailored to the specific acquisition. Most formal source selections will use the three-tiered organizational structure described in Appendix AA. However, for acquisitions of lesser complexity or dollar value, a more streamlined two-tiered organization may be appropriate.
(c) Source selection plan.
(4) When numerical weights will be applied to proposal evaluation factors, and it is proposed to include those weights in the solicitation, the source selection plan shall clearly state how this will further the overall objectives of the acquisition.
(e) Safeguarding information.
(1) The contracting officer shall be present at any briefing or presentation where proprietary or source selection information will be disclosed. If it is not possible for the contracting officer to be present, a senior procurement official from the buying organization shall be present. See 3.104-5.
15.613 Alternative source selection procedures.
15.613-70 Four-step source selection procedures.
(b) Applicability. (2) PARCs may approve use of the four-step source selection procedure for acquisitions excluding those in DFARS 215.613-70(c).
SUBPART 15.8--PRICE NEGOTIATION
(b)(i) Price estimates are not required for contracting actions resulting from Broad Agency Announcements, the Small Business Innovative Research Program, or unsolicited research proposals.
(ii) The Government estimate shall--
(A) Contain a statement by the preparing official giving the basis for developing the estimate and discussing its reliability;
(B) Be marked "FOR OFFICIAL USE ONLY" unless a security classification is required; and
(C) For research and development within the technological base, be tailored to focus on level of effort and related skill levels, material and travel requirements.
(iii) When it is not feasible to develop an estimate of the proper price level or value of the supplies or services to be purchased, the contracting officer shall document the contract file.
15.804-7 Defective cost or pricing data.
(b)(7)(iv)(1) Amounts owed the Government as a result of overpayment, penalties or interest shall be repaid only by cash or check made payable to the "Treasurer of the United States" or as a credit against existing unpaid bills (see FAR 32.606).
(A) The repayment amount is the amount of the overpayment.
(2) Also include the amount of defective pricing, including unit price adjustments (if appropriate), and the control numbers and dates of audit reports that are settled as a result of the modification. Demand for payment of monies owed shall only be made by demand letter separately stating overpayment amount, interest amount and penalty amount, if applicable. The demand letter shall also state where to submit monies owed and instructions to the finance office specifying the full accounting classification code to which the overpayment amount shall be credited, as well as direction to credit the miscellaneous receipt account for amounts of interest and applicable penalties.
(f) If the contracting officer believes that the release of information would compromise military security or disclose trade secrets or other confidential business information, the contracting officer shall request advice from the addressee in 1.290(b)(5) concerning the conditions under which the information may be released.
(b) The contracting officer shall document the contract file when a cost analysis has been performed and it is not practicable to perform a price analysis.
15.807 Prenegotiation objectives.
(a) Prenegotiation objectives shall be documented in a Prenegotiation Objective Memorandum (POM) which sets forth the significant details of the proposed contracting action and the course the contracting officer proposes to pursue. The POM should demonstrate that the negotiator is adequately prepared to enter negotiation, that the significant facts have been evaluated, and that the judgments made in arriving at the prenegotiation objectives are sound. The POM shall be prepared, reviewed and approved in accordance with the activity's business clearance procedures.
15.808 Price negotiation memorandum.
(a) Results of negotiations shall be set forth in detail in the Price Negotiation Memorandum (PNM). The PNM shall reconcile the difference between the POM and the negotiated settlement by presenting additional facts obtained during negotiations. The PNM must document that the agreement reached is fair and reasonable. It shall be prepared, reviewed and approved in accordance with the activity's business clearance procedures.
(b) PNMs forwarded to the cognizant audit office and ACO shall clearly reference applicable audit reports as well as ACO pricing and technical reports.
15.890 Follow-up on contract audit reports.
(a) The Chief, Policy and Procedures Division, U.S. Army Contracting Support Agency, is the Army's contract audit follow-up official.
(b) PARCs shall perform the functions of the Army's contract audit follow-up official for their respective commands. PARCs shall--
(1) Chair Overage Audit Review Boards;
(2) Ensure that the effective resolution and disposition of audit findings and recommendations in a timely manner while fully protecting the Government's interests is a factor in performance objectives and individual performance standards of contracting officers and other acquisition officials involved in this process and that their performance appraisals include an assessment of performance in this area; and
(3) Maintain close surveillance of all contract audit reports and apply extraordinary efforts to resolve and dispose of any audit reported in accordance with 15.891-4(a)(3).
(c) Chiefs of contracting or contract administration offices shall take personal interest in all contract audit reports being tracked by their office and assist contracting officers in the resolution and disposition of those audit recommendations which appear unlikely to be resolved within six months of the date of an audit report.
(d) Contracting officers shall--
(1) Make every effort to resolve the recommendations as described in DoDD 7640.2 not later than six months from the date of the audit report and dispose of those recommendations within 12 months;
(2) Invite the auditor to participate in the review when it is considered necessary; and
(3) Appear before the Overage Audit Review Board to discuss the resolution and disposition of any audit reported in accordance with 15.891-4(a)(3).
15.890-2 Tracking of contract audit report recommendations.
(a) All contract audit reports shall be centrally tracked from request for audit through receipt, resolution and disposition. Each contracting or contract administration office, including those of satellite offices such as GOCO tank or ammunition plants, shall establish a single entity for requesting, receiving and tracking all audit reports. The activity name, address, attention symbol, point of contact and telephone number of the single entity shall be provided to the contract administration services office and DCAA region involved.
(b) Audit report data shall be centrally tracked and reported in accordance with DoDD 7640.2. Central files shall be maintained on each audit report and shall include the following information:
(1) Report number.
(2) Activity address number.
(3) Issuing agency.
(4) Date of report.
(5) Contractor.
(6) Contract number(s).
(7) Organization responsible for disposition.
(8) Contracting officer responsible for disposition.
(9) Total amount subjected to audit.
(10) Total questioned costs.
(c) For reportable audit reports (see 15.891-3), the central files shall also include the following information:
(1) Type(s) of recommendations contained in report. Use the codes in DoDD 7640.2.
(2) Target date of resolution.
(3) Actual date of resolution.
(4) Target date for disposition.
(5) Date of final decision (if any) of contracting officer.
(6) Date of filing with Armed Services Board of Contract Appeals (ASBCA) or court (if any) and docket or case number.
(7) Disposition results in terms of questioned costs sustained.
The Status Report on Specified Contract Audit Reports (RCS DD-IG(SA)1580), as required by DoDD 7640.2, shall be submitted by each contracting or contract administration office to reach the addressee at 1.290(b)(7), ATTN: CAF, not later than 15 April and 15 October of each year. The Army Contract Audit Follow-up Automated Program shall be used for the status report. The Program and instructions may be obtained from the addressee at 1.290(b)(7). Negative reports are required.
15.890-4 Overage Audit Review Boards.
(a) Every effort shall be made to resolve audit recommendations within six months of the date of an audit report and dispose of them within 12 months. Each PARC shall establish an Overage Audit Review Board (the Board) to review the status of open audits reported as overage or unresolved on the Status Report on Specified Contract Audit Reports and provide expertise, guidance and assistance to the contracting officer to help resolve and dispose of overage audits.
(1) The Board shall be chaired by the PARC, or, when a local board is used (see (b)), by the PARC's designee.
(2) The Board shall be composed of the contracting activity's senior legal, contracting, and pricing personnel.
(3) The Board shall review all open, unresolved audits over six months old and resolved audits over 12 months old that are reported as open on the most recent Status Report on Specified Contract Audit Reports.
(4) The Board shall meet early in November to consider those audits reported on the report due 15 October and early in May to consider those audits listed on the report due 15 April. The Board may meet at other times, as necessary.
(5) The Board shall hear the contracting officer's presentation of efforts to resolve and dispose of the audit recommendations.
(6) The Board shall assist the contracting officer in developing a plan of action for timely resolution and disposition of the audit recommendations.
(7) The Board shall provide the contracting officer with necessary assistance to resolve and dispose of the audit recommendations. This shall include reordering priorities, assigning additional or alternate resources or committing the personal attention of the HCA or the PARC to the effort.
(b) If the PARC determines that it is not practical to have the contracting officer attend the Board meeting because of distance or other reasons, the PARC may authorize a local board. The local board shall follow the guidance in (a) and shall submit its report to the PARC in time for the PARC to review, approve and incorporate it into the PARC's submittal to HQDA.
(c) Upon completion of its review, but not later than 30 November and 31 May, the Overage Audit Review Board shall submit to the addressee in 1.290(b)(7), under a summary cover letter from the PARC, a detailed plan of action for the resolution and disposition of each audit report in the three major categories listed in (1).
(1) The Board shall separate the audits into the following three major categories for reporting:
(I) 6-12 months old, unresolved.
(ii) Overage (over 12 months old), unresolved.
(iii) Overage (over 12 months old), resolved.
(2) Each plan of action shall contain the following information:
(i) Audit report number.
(ii) Report date.
(iii) Contractor name.
(iv) Type of audit.
(v) Cost questioned or cost avoidance.
(vi) A narrative plan of action for resolution and disposition of the audit findings.
(vii) Target resolution date.
(viii) Target disposition date.
(ix) Contracting officer's name.
(x) Contracting officer's phone number.
(3) The Board's report shall describe the action taken under (a)(6) and (7) and identify attendees and their role in the process, such as contracting officer or chief of pricing.
15.970 DD Form 1547, Record of Weighted Guidelines Method Application.
(b) See 15.975.
15.975 Reporting profit and fee statistics.
The Army Weighted Guidelines Software shall be used for reporting DD Form 1547 data. The software and instructions for use are available from the addressee in 1.290(b)(7), ATTN: WGL.