Office of Acquisition and Logistics (OAL)
Part M815 - Contracting by Negotiation
|« VAAM Part M814||VAAM Table of Contents||VAAM Part 816 »|
|M815.000||Scope of part.|
|M815.101||Best value continuum.|
|M815.203||Requests for proposals.|
|M815.203-70||Developing the request for proposals.|
|M815.404-1||Proposal analysis techniques.|
|M815.406-3||Documenting the negotiation.|
|M815.604||Agency points of contact.|
- M815A Appendix A, Department of Veterans Affairs Source Selection Guide
- M815A Attachment A, Sample Price Negotiation Memorandum (PNM) Checklist
This part prescribes VA’’s policies and procedures regarding competitive and noncompetitive negotiated acquisitions.
The following terms are associated with, and often used in the course of conducting negotiated acquisitions:
Best value means the expected outcome of an acquisition that, in the Government’s estimation, provides the greatest overall benefit in response to the requirement.
Clarifications means the limited exchanges between the Government and offerors that may occur when award without discussions is contemplated.
Communications means the exchanges, between the Government and offerors, after receipt of proposals.
Competitive range means and consists of the offers rated most highly after proposal evaluations. Discussions will be held only with offerors in the competitive range. (See FAR 15.306(c)).
Discussions means the negotiations conducted in a competitive acquisition. Discussions take place after establishment of the competitive range.
Industry Day means an event held by the Government to present requirements to industry representatives (e.g., pre-solicitation conference, pre-proposal conference, etc.).
Lowest Price Technically Acceptable means a process used in competitive negotiated contracting where the best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price.
Minor or clerical error means a minor informality or irregularity that is merely a matter of form and not of substance or a clerical error apparent on its face in the proposal.
Peer review means the review of processes and strategies by other experts in a particular field.
Proposal modification means a change made to a proposal before the solicitation closing date and time, or made in response to an amendment, or made to correct a mistake at any time before award.
Proposal revision means a change to a proposal made after the solicitation closing date, at the request of or as allowed by a contracting officer, as the result of negotiations. (See FAR 15.001.)
Requirements documents means all aspects of the Request for Proposal (RFP) that convey the needs of the Government to offerors, including the Statement of Objectives (SOO), Statement of Work (SOW), Performance Work Statement (PWS), technical requirement documents, and system requirement documents.
Requiring office means the entity (for example, a program management office or other organizational entity) responsible for translating user requirements into the requirements documents within the RFP that communicate those requirements to offerors.
Risk, as it pertains to source selection, is the potential for unsuccessful contract performance. The consideration of risk assesses the degree to which an offeror’s proposed approach to achieving the contract objectives may involve risk of disruption of schedule, increased cost or degradation of performance, the need for increased Government oversight, and the likelihood of unsuccessful contract performance.
Source selection means the process used in competitive, negotiated contracting to select the proposal that offers the best value to the Government.
Source Selection Authority (SSA) means the Government official responsible for selecting the source(s) in a negotiated acquisition.
Source Selection Advisory Council (SSAC) means a group of senior Government personnel who provide counsel during the source selection process and must prepare the comparative analysis of the SSEB’s evaluation results, when directed by the SSA. Organizations should establish an SSAC for acquisitions with a total estimated value of $100M or more. An SSAC is optional for acquisitions with a total estimated value of less than $100M.
Source Selection Evaluation Board (SSEB) means a group of Government and, if needed, approved non-Government personnel, representing the various functional disciplines relevant to the acquisition. The SSEB is comprised of a Chairperson and Evaluators (also known as SSEB Members). Use of non-Government personnel as voting members of the SSEB is strictly prohibited (see FAR 7.503(c)(12)(ii), FAR 37.203 and FAR 37.204).
Source Selection Plan (SSP) means a plan that describes how the source selection will be organized, how proposals will be evaluated and analyzed, and how source(s) will be selected.
Source Selection Team (SST) means a team that is tailored to the unique acquisition, tasked with carrying out a source selection. Composition of the team generally consists of the SSA, contracting officer (if different from the SSA), SSAC, SSEB, Advisors, Cost or Price Experts, Legal Counsel, Small Business Specialists, and other subject-matter experts.
Source Selection Decision Document (SSDD) refers to the document that reflects the SSA’s independent, integrated and comparative assessment and decision.
Strength means an aspect of an offeror’s proposal that has merit or exceeds specified performance or capability requirements in a way that will be advantageous to the Government during contract performance.
Uncertainty means any aspect of a non-cost/price factor proposal for which the intent of the offer is unclear (e.g. more than one way to interpret the offer or inconsistencies in the proposal indicating that there may have been an error, omission, or mistake).
(a) This process allows for a tradeoff between non-cost factors and cost/price and allows the Government to accept other than the lowest priced proposal or other than the highest technically rated proposal to achieve a best-value contract award. Further, it describes various rating approaches to evaluating proposals when using a tradeoff process.
A well-written RFP is critical to the success of the source selection. There should be consistency between the requirements documents, SSP (if utilized), and the RFP. Therefore, the acquisition team must ensure a clear linkage between the requirements and evaluation factors to maximize the accuracy and clarity of the RFP.
(e) The cognizant head of the contracting activity (HCA) may exempt individual contracts or classes of contracts that are not identified in FAR 15.204(a) through (d) from the use of a uniform contract format. Written justification for the exempted use shall be prepared by the contracting officer (CO), with the coordination/review of the affected contract administration and payment offices. The justification shall be forwarded to the HCA for review/approval/disapproval.
The extent to which one will use the positions and procedures outlined below will depend upon the complexity and dollar value of each acquisition and the available resources. COs should apply prudent business sense to tailor the processes to fit the circumstances. (See Appendix M815-A, Department of Veterans Affairs Source Selection Guide)
(3) Ensure that personnel appointed to the SST are knowledgeable of policies and procedures for properly and efficiently conducting the source selection. Ensure the SST members have the requisite acquisition experience, skills, and training necessary to execute the source selection, and ensure the highest level of team membership consistency for the duration of the selection process;
(4) Ensure that realistic source selection schedules are established and source selection events are conducted efficiently and effectively in meeting overall program schedules. The schedules should support proper and full compliance with source selection procedures outlined in this document and the established Source Selection Plan (SSP) for the acquisition;
(5) Ensure all involved in the source selection are briefed and knowledgeable of Subsection 27(a) of the Office of Federal Procurement Policy Act, 41 U.S.C., Section 423, and FAR 3.104 regarding unauthorized disclosure of contractor bid and proposal information, as well as source selection information;
(6) Ensure that all persons receiving source selection information are instructed to comply with applicable standards of conduct (including procedures to prevent the improper disclosure of information) and sign a Non-Disclosure Agreement and a conflict of interest statement;
(7) Ensure Conflict of Interest Statements (from both Government members/advisors and non-Government team advisors) are appropriately reviewed and actual or potential conflict of interest issues are resolved prior to granting access to any source selection information (see CFR 2635);
(9) Select the source whose proposal offers the best value to the Government in accordance with the established evaluation criterion in the appropriate section of a non-Uniform Contract Format (UCF) solicitation or in accordance with the established evaluation criterion in Section M of the solicitation; and
(1) Manage all business aspects of the acquisition and advice and assist the SSA in the execution of the responsibilities as outlined above and work with the SSEB Chair to ensure the evaluation is conducted in accordance with the evaluation criteria specified in the solicitation;
(2) Ensure that required approvals are obtained before non-Government personnel are allowed to provide source selection support (See FAR 37.203);
(4) Ensure that all non-Government advisors who are to assist in the source selection process do not have access to proprietary information until the CO receives the consent of the submitting contractor(s) to provide access thereto;
(8) Control exchanges with offerors after receipt of proposals (see FAR 15.306); and
(2) Consolidate the advice and recommendations from the SSAC into a written analysis and recommendation for use by the SSA in making the best-value decision. Ensure that minority opinions within the SSAC are documented and included within the analysis.
(h) Government Advisors: When an SSAC is not used, consideration should be given to the use of Government advisors to assist the SSA. These advisors can provide expertise within specific functional areas, similar to the involvement of the SSAC, but need not provide the formal written comparative analysis required of an SSAC. Government advisors may also be used to provide assistance to the SSEB as subject-matter experts.
(i) Non-Government Advisors: Use of non-Government personnel as advisors may be authorized, but should be minimized as much as possible. Non-Government advisors shall be supported by a written determination (see FAR 37.203, Policy, and 37.204, Guidelines for determining availability of personnel). The CO must ensure that the non-Government advisor who will assist in the source selection process does not have access to proprietary information until the CO receives the consent of the submitting contractor(s) to provide access to the non-Government advisor to execute this requirement; the following is suggested solicitation language:
(1) Offerors are advised that employees of the firms identified below may serve as nongovernment advisors in the source selection process. These individuals will be authorized access only to those portions of the proposal data and discussions that are necessary to enable them to perform their respective duties. Such firms are expressly prohibited from competing on the subject acquisition.
INSERT NAMES, ADDRESSES, AND TELEPHONE NUMBERS OF FIRMS
(2) In accomplishing their duties related to the source selection process, the aforementioned firms may require access to proprietary information contained in the offerors’ proposals. Therefore, pursuant to FAR 9.505, these firms must execute an agreement with each offeror that states that they will (1) protect the offerors’ information from unauthorized use or disclosure for as long as it remains proprietary and (2) refrain from using the information for any purpose other than that for which it was furnished. To expedite the evaluation process, each offeror must contact the above companies to effect execution of such an agreement prior to the submission of proposals. Each offeror shall submit copies of the agreement with their proposal.
(j) Program Management/Requirements Office: The requirements development process is vital to the success of the negotiated acquisition. The leadership of the Program Management/Requirements Office shall:
The authority of the Secretary to appoint an individual other than the CO to serve as the source selection authority for a particular acquisition or a group of acquisitions is delegated to the HCA. If an HCA needs to designate an individual other than the CO as the source selection authority for a particular acquisition or a group of acquisitions, the HCA shall prepare a written request/justification and shall submit the request/justification to the Senior Procurement Executive for approval/disapproval.
(a) An SSP is recommended for all best–value, negotiated, competitive acquisitions under FAR 15. The SSP documents the source selection organization that is established. Likewise, a typical source selection plan sets out evaluation factors, evaluation standards, and evaluation procedures. All factors and significant subfactors that will affect contract award and their relative importance shall be stated clearly in the solicitation (see FAR 15.204-5(c)). The rating method need not be disclosed in the solicitation. The general approach for evaluating past performance information shall be described (see FAR 15.304(d)).
(3) Describe the organizational structure and identify the various roles and responsibilities of each of the source selection teams, such as the SSET, the SSAC, the CO, and the SSA, during the phases of the source selection. List members and advisors by name, position title, company affiliation, if applicable, or by functional area;
(4) Describe the process and controls for communication with industry as well as internal Government team communication, to include the use of email, during the source selection, and outline the security measures that will be utilized to ensure the information is protected as source selection information. (See FAR 2.101 and FAR 3.104);
(5) Identify the evaluation factors, subfactors, their relative order of importance; the importance of all non-cost or price factors to the cost or price factor; and the evaluation process, including specific procedures and techniques to be used in evaluating proposals. Include within the SSP document or attach the relevant and most current portions of Sections L and M in the RFP (or a non-UCF solicitation) to preclude inconsistencies between the SSP and RFP;
(6) Identify the types of documents that will be prepared during the course of the source selection, to include at a minimum an SSEB Report covering the initial evaluation, updated as necessary following responses to discussion questions, and a final SSEB Report after receipt of Final Proposal Revisions, an SSAC Report, if there is an SSAC, which reflects the SSAC’s consideration of the final SSET Report and makes the SSAC’s recommendation to the Source Selection Authority, and in accordance with FAR 15.308, the Source Selection Decision Document (SSDD), which reflects the SSA’s independent determination. A power point presentation is acceptable to brief the SSA and the SSAC on the status of the procurement, but should not, as a general rule, constitute the official Reports required for the source selection;
(7) Identify the major acquisition activities and projected completion dates. Reference the information on the use of independent management reviews, Industry Days, and draft RFPs as significant source selection activities;
If an offeror proposes to use an SDVOSB or VOSB subcontractor in accordance with VAAR 852.215-70, Service-Disabled Veteran-Owned and Veteran-Owned Small Business Evaluation Factors, the CO shall ensure that the offeror, if awarded the contract, actually does use the proposed subcontractor or another SDVOSB or VOSB subcontractor for that subcontract or for work of similar value. The CO should monitor this contract as delineated in FAR 19.704(a)(10)(ii), which requires the offer to submit periodic reports so that the Government can determine the extent of compliance by the offer through the subcontracting plan.
(a)(2)(i) Past performance evaluation. When a past performance evaluation is required by FAR 15.304, and the solicitation includes either the clause at FAR 52.219-8, Utilization of Small Business Concerns, or the clause at FAR 52.219-9, Small Business Subcontracting Plan, the evaluation factors shall include the past performance of offerors in complying with requirements of these clauses. Contractors may not be given “downgraded” past performance evaluations for availing themselves of their rights by filing protests and claims or for deciding not to use Alternate Dispute Resolution (ADR) and contractors may not be given more “positive” past performance evaluations for refraining from filing protest and claims or for agreeing to use ADR.
(d) For acquisitions with an estimated value of $25 million or more, COs should conduct discussions and follow the procedures at FAR 15.306.
(d) Cost realism analysis. (1) A cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror’s cost estimate to determine whether the estimated proposed cost elements are realistic for the work to be performed. The results of the analysis should be able to answer the following key questions:
(2) A cost realism analysis shall be performed when a cost-type contract is anticipated. In accordance with FAR 15.404-1(d)(3), cost realism on fixed price incentive contracts may be performed or in exceptional cases, on other competitive fixed price contracts. Adjustments for the most probable cost estimate should not be based solely on differences from the Independent Government Cost Estimate (IGCE). Where performance specifications are used, the IGCE is based on the Government’s implicit approach to the work, which may differ from the offerors approach. Also, the IGCE rates may not be comparable. The technical evaluation should reveal areas where each offeror’s approach is inadequate or its resourcing unrealistic, given the proposed approach. The technical evaluators and the cost evaluators should crosswalk technical deficiencies and weaknesses and their impact on cost to assure proper adjustments can be made to the proposed costs. However, this crosswalk should not be performed until after each group has completed their initial evaluation to avoid intentional or unintentional bias.
(i) The probable cost may differ from proposed cost and should reflect the Government’s best estimate of the cost of any contract that is most likely to result from the offeror’s proposal. The probable cost shall be used for purposes of evaluation to determine the “best value.” Therefore, when developing a most probable cost estimate, consider the following:
(A) As the required information is collected to evaluate the realism of the offeror’s cost (or price) estimate, the Government is also collecting the information required to develop its own estimate of the most probable contract cost.
(B) In developing the estimate, adopt the portion of the offeror’s estimate that appears realistic and modify the portion of the estimate that is believed to be unrealistic. For example, the Government may accept proposed labor hours and adjust the labor rate based on an audit recommendation. Adjustments may increase or decrease cost estimates.
(2) FAR 15.404-4(b)(2) permits agencies to use another agency’s structured approach. Therefore, COs are encouraged to use the Department of Defense Weighted Guidelines method as delineated in the Department of Defense Federal Acquisition Regulation Supplement.
(a) The purpose of performing cost or price analysis is to develop a negotiation position that permits the CO and the offeror an opportunity to reach agreement on a fair and reasonable price. The CO is responsible for exercising the requisite judgment needed to reach a negotiated agreement with the offeror and is solely responsible for the final price agreement. However, when significant auditor recommendations are not adopted, the CO must provide rationale that supports the negotiation result in the price negotiation documentation.
(b) The CO’s objective is to select an appropriate contract type and negotiate a price that provides the contractor the greatest incentive for efficient and economical performance. The CO must balance the contract type, cost, and profit or fee negotiated to achieve a total result — a price that is fair and reasonable to both the Government and the contractor. (See Attachment M815-A, Sample Price Negotiation Memorandum (PNM) Checklist)
(a) The CO shall document in the form of a price negotiation memorandum (PNM) the principal elements of the negotiated agreement in accordance with FAR 15.406-3. (See the attached Attachment M815-A, Sample PNM Checklist).
(c) The PNM serves as a detailed summary of the contractor’s proposal, any field pricing assistance recommendations, including the reasons for any pertinent variances from them, the Government’s negotiation objective, the negotiated position, and the methodology and rationale used in arriving at the final negotiated agreement.
(d) The CO shall document in the Electronic Contract Management System the principal elements of the negotiated agreement in accordance with FAR 15.406-3.
HCAs shall establish procedures for controlling the receipt, evaluation, and timely disposition of unsolicited proposals consistent with the requirements of FAR 15.606(a). The procedures shall include controls on the reproduction and disposition of proposal material, particularly data identified by the offeror as subject to duplication, use, or disclosure restrictions.
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