Federal Acquisition Regulation; Part 15 Rewrite: Contracting by Negotiation; Competitive Range Determinations

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 2, 3, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17,

19, 24, 25, 27, 28, 31, 32, 33, 34, 35, 36, 42, 43, 44, 45, 49, 50,

52, and 53

[FAR Case 95-029]

RIN 9000-AH21

Federal Acquisition Regulation; Part 15 Rewrite: Contracting by

Negotiation; Competitive Range Determinations

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule with request for comments and withdrawal of

proposed rules.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council are proposing to combine Phases I and

II of the rewrite of Federal Acquisition Regulation (FAR) Part 15,

Contracting by Negotiation, and subsume FAR Case 96-303, Competitive

Range Determinations. Phase I addresses acquisition techniques and

source selection. Phase II addresses issues relating to contract

pricing and unsolicited proposals. Conforming changes have also been

made to other FAR parts. The FAR Part 15 Phase I proposed rule,

published in the Federal Register at 61 FR 48380, September 12, 1996,

is revised, and the Competitive Range Determinations proposed rule,

published in the Federal Register at 61 FR 40116, July 31, 1996, is

withdrawn. The resolution of public comments, received in response to

those proposed rules, has resulted in changes that are of such

significance that publication of a new proposed rule, with opportunity

for public comment, is deemed appropriate. Furthermore, this proposed

rule includes Phase II of the FAR Part 15 rewrite, which was previously

unpublished. This regulatory action was subject to Office of Management

and Budget review under Executive Order 12866, dated September 30,

1993. This is not a major rule under 5 U.S.C. 804.

DATES: Comments should be submitted on or before July 14, 1997 to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (VRS), 1800 F Streets,

NW, Room 4035, Washington, DC 20405.

Please cite FAR case 95-029 in all correspondence related to this

case.

E-Mail comments submitted over the Internet should be addressed to:

[email protected]www.gsa.gov

It is requested that the comments be separated into two distinct

groupings: (1) Group A--those comments that relate to Subparts 15.00,

15.1, 15.2, 15.3, 15.4, and 15.6 and conforming revisions to Part 1, 5,

6, 14, 36, 52, and 53 and (2) Group B--those comments that relate to

Subpart 15.5 and conforming revisions to Part 4, 7, 11, 16, 42, 43, and

52.

FOR FURTHER INFORMATION CONTACT: Jerry Olson at (202) 501-3221 or

Melissa Rider at (703) 602-0131 on substantive issues on Subpart 15.5

and conforming revisions to Part 4, 7, 11, 16, 42, 43, and 52. Ralph

DeStefano at (202) 501-1758 or Melissa Rider at (703) 602-0131 on

substantive issues on Subparts 15.0, 15.1, 15.2, 15.3, 15.4, and 15.6

and conforming revisions to Part 1, 5, 6, 14, 36, 52, and 53. For

general information, contact the FAR Secretariat, Room 4035, (202) 501-

4755. Please cite FAR case 95-029.

SUPPLEMENTARY INFORMATION:

A. Background

On January 29, 1996, the FAR Council tasked an ad hoc interagency

committee to rewrite FAR Part 15, Contracting by Negotiation. The

rewrite was to be accomplished in two phases. Phase I, consisting of

the rewrite of FAR Subparts 15.000, 15.1, 15.2, 15.3, 15.4, 15.6, and

15.10, covering acquisition techniques and source selection, was

published for public comment in the Federal Register at 61 FR 48380 on

September 12, 1996. Two public meetings were held to discuss the

proposed rule: in Washington, DC, on November 8, 1996, and in Kansas

City, MO, on November 18, 1996. The public comment period closed on

November 26, 1996. The Government received 1541 comments from 100

respondents and considered the comments in drafting revisions to the

rule. Due to the significant changes made as a result of resolving

public comments, the FAR Council decided to publish a revised proposed

rule. The revised proposed rule, however, has been expanded to include

previously unpublished, Phase II, proposed changes--covering Subparts

15.5, 15.7, 15.8, and 15.9. It also incorporates changes made as a

result of public comments submitted in response to FAR Case 96-303,

Competitive Range Determinations.

Case Summary

This proposed rule modifies concepts and processes in the current

FAR Part 15, introduces new policies, and incorporates changes in

pricing and unsolicited proposal policy. In addition, a more

appropriate sequencing of information has been adopted to facilitate

use. The proposed rule does not alter the full and open competition

provisions of FAR Part 6. The goals of this rewrite are to infuse

innovative techniques into the source selection process, simplify the

process, and facilitate the acquisition of best value. The rewrite

emphasizes the need for contracting officers to use effective and

efficient acquisition methods, and eliminates regulations that impose

unnecessary burdens on industry and on Government contracting officers.

The comments considered in drafting this proposed rule include:

comments received during public meetings held on January 25, 1996,

November 8, 1996, and November 18, 1996; comments received in response

to three advance notices of proposed rulemaking (60 FR 63023, December

8, 1995; 60 FR 65360, December 19, 1995; and 60 FR 67113, December 28,

1995); comments received in response to publication of the Phase I

proposed rule in the Federal Register (61 FR 48380, September 12,

1996); comments received in response to publication of the Competitive

Range Determinations proposed rule in the Federal Register (61 FR

40116, July 31, 1996); comments received over the Acquisition Reform

Network (an Internet forum); comments received from members of Congress

and Congressional staff, Government agencies, the DAR Council, the

Civilian Agency Acquisition Council, and the Office of Federal

Procurement Policy (OFPP); comments received in response to other

notices of the rewrite in various print media and conferences; and

comments received from Government fora such as the Front-line

Professional's Forum and the Federal Procurement Executive Association.

Several public comments requested that a definition of ``neutral''

past performance rating be included in the final rule. This proposed

rule provides only general guidelines for establishing a neutral

rating, since what constitutes ``neutral'' seems to change with the

circumstances of each individual source selection. However, suggestions

from the general public for a more rigorous definition are solicited

and will be considered by the FAR Council in drafting the final rule.

[[Page 26641]]

Summary of Changes

This proposed rule reengineers the processes used to contract by

negotiation, with the intent of reducing the resources necessary for

source selection and reducing cycle time to contract award. The goals

of the FAR Part 15 Rewrite are to ensure that the Government, when

contracting by negotiation, receives the best value, and that offerors

are treated fairly by--

Enhancing communications between the Government and

industry--allowing industry to better understand the requirement and

Government to better understand industry's proposals;

Emphasizing that no offeror, otherwise eligible to submit

a proposal in response to a Government solicitation, will be excluded

from the competitive range without its proposal being initially

reviewed and evaluated;

Evaluating all proposals received based upon the criteria

in the solicitation;

Reducing the bid and proposal costs for industry by

providing early feedback as to whether a proposal is truly competitive;

Streamlining the post-competitive range process by

enhancing the ability of the parties to communicate and document

understandings reached during discussions; and

Debriefing offerors excluded from the competitive range as

to why their proposals were not competitive.

Although there are changes from the September 12, 1996, proposed

rule throughout the Phase I portion of this revised proposed rule, some

of the more important ones are--

Deletion of the Model Contract Format, that will be added

to the DFARS as a test;

Clarification of the standard for admission into the

competitive range;

Deletion of language on including in the solicitation an

estimated number for limiting the competitive range for efficiency;

More structured guidance on communications, including

increasing the scope of discussions;

More structured guidance on accepting late proposals; and

Establishment of a common cut-off date and time for

receipt of final proposal revisions.

Phase II revisions were not included in the September 12, 1996,

proposed rule. They address unsolicited proposals, make-or-buy

programs, negotiating contract prices, and profit, and are included in

this proposed rule. Subparts 15.5, 15.7, 15.8, and 15.9 were renamed

and resequenced to articulate more clearly policies and procedures

relative to contract pricing; and to recognize requirements associated

with the acquisition of commercial items. Specific changes include--

Cost or Pricing Data

The separate exception for modifications to contracts for

commercial items has been removed and simplified text has been moved to

the standards for the commercial item exception at 15.503-1(c)(3).

The waiver exception at 15.503-1(b)(4) has been modified

to specifically state that cost and pricing data are not to be obtained

when a waiver has been granted by the head of the contracting activity.

Field Pricing

Field pricing coverage was revised to reflect the need for

greater flexibility and teamwork in today's acquisition environment.

The emphasis in the proposed coverage is on only obtaining field

pricing assistance when the contracting officer needs additional

information to determine a fair and reasonable price. When field

pricing assistance is needed, the requests should be limited to

selected areas where assistance is needed, with full technical and

audit reviews as the exception. Emphasis is placed on early and direct

communications between the contracting officer and the field agencies

to define the information needed.

In those instances when a full field pricing review is

necessary, the technical and audit reports generated as a result of the

field pricing reviews will be forwarded to the contracting officer, but

the separate reports need not be consolidated into a single document.

Forms and Tables

In the interest of providing flexibility in preparing

solicitations and offers, the forms currently used as cover sheets for

submitting cost or pricing data (SF 1411) and information other than

cost or pricing data (SF 1448) were eliminated. Neither provides much

information, beyond identification of the offeror and general

information about the accompanying proposal. One item found on both

forms, which is still considered necessary, is the statement allowing

the Government to examine the offeror's records. For cost or pricing

data, this statement was added in Table 15-2 to the list of information

to be provided on the first page of the proposal. For information other

than cost or pricing data, the statement is required by 15.803-

5(a)(ii).

The existing Table 15-2, Instructions for Submitting Cost

or Pricing Data, was reorganized to make it more understandable, and

was moved to the end of Part 15, so it would not disrupt the flow of

the part. The existing Table 15-3 was eliminated because it did not

provide information beyond that already found in the text of Subpart

15.8. Instead, the revised coverage makes it clear that the format in

Table 15-2 may be tailored by contracting officers for submission of

information other than cost or pricing data to reflect the instant

acquisition situation.

Unbalanced Pricing

The unbalanced pricing coverage was simplified and

relocated to reflect its use as a proposal analysis technique designed

to assess risk and protect the Government's economic interest. The

revised coverage intentionally omits the mention of any step-by-step

analysis of ``mathematical'' or ``material'' criteria, because

historically they have not led to clear or consistent interpretations

of unbalancing. Instead, the focus of the revised coverage is shifted

to the relative value and risk to the Government.

Unsolicited Proposals Coverage

The unsolicited proposal coverage has been revised to

focus on submission of new ideas and concepts in response to Broad

Agency Announcements, Small Business Innovation Research Topics, Small

Business Technology Research Topics, or Program Research and

Development Announcements and to highlight the use of communications

between industry and the Government.

Fee Limitations

The requirement for a separate determination and findings

supporting cost-plus-fixed-fee contracts has been eliminated; the fee

limitations at 15.809-3(d) have been strictly aligned with statute; and

the contracting officer's signature on the price negotiation memorandum

or other documentation of the negotiated price will now serve as a

determination that fee limits have not been exceeded.

Guidelines for Cost Realism

New coverage on cost realism has been added at 15.806-4 to

explicitly recognize the requirement for a cost realism analysis to

support award of competitive cost reimbursement contracts.

B. Regulatory Flexibility Act

An Initial Regulatory Flexibility Analysis has been prepared and

submitted to the Chief Counsel for Advocacy for the Small Business

Administration. A copy of the analysis may be obtained from the FAR

[[Page 26642]]

Secretariat at the General Services Administration, 1800 F Street, NW.,

Room 4035, Washington, DC 20405. The analysis is summarized as follows:

This proposed rule modifies fundamental concepts and processes

that are presently in FAR Part 15, and introduces new policies and

incorporates changes in pricing and unsolicited proposal policy not

contained in the initial proposed rule. In addition, a more

appropriate sequencing of information has been adopted to facilitate

use. This proposed rule does not alter the full and open competition

provisions of FAR Part 6. The goals of this rewrite are to infuse

innovative techniques into the source selection process, simplify

the process, and facilitate the acquisition of best value. The

rewrite emphasizes the need for contracting officers to use

effective and efficient acquisition methods, and eliminates

regulations that impose unnecessary burdens on industry and on

Government contracting officers.

The proposed rule will apply to all large and small entities

(including educational and nonprofit entities), that offer supplies

or services to the Government in negotiated acquisitions. Aspects of

the proposed rule which may impact small entities are: making a

shift in competitive range policy to encourage retaining only the

most highly rated proposals rather than all those with a reasonable

chance of award; allowing the contracting officer to limit the

competitive range in the interest of efficiency; prohibiting cost

analysis when contracting on a fixed-price basis without cost

incentives, unless the contracting officer has reason to believe

that the proposed prices are not reasonable; requiring that

evaluation factors established for solicitations provide for

meaningful evaluations of competing proposals; permitting early

disclosure of adverse past performance information; allowing early

and continuing communication between the Government and industry to

ensure industry's understanding of Government requirements and the

Government's understanding of offerors' proposals; allowing the

Government to reveal the cost or price estimates that its analysis,

market research, and other reviews have identified for an

acquisition; and allowing plain paper formats to substitute for

Government forms in support of electronic contracting processes. The

rule proposes to streamline source selection procedures, thereby

creating a more efficient process that benefits both private and

public sectors.

The Office of Federal Procurement Policy (OFPP) believes the

proposed rule reduces Government regulations that establish

requirements for the way the Government deals with those seeking to

do business with it. Such deregulation reflects the spirit and

intent of the Regulatory Flexibility Act. OFPP further believes that

the changes are good for small businesses; that there are many small

businesses that do not do business with the Government because of

the complexity of offering, evaluation, and award, that will benefit

from these changes.

Comments are invited. Comments from small entities concerning the

affected FAR subparts will be considered in accordance with Section 610

of the Act. Such comments should be submitted separately and cite FAR

case 95-029 in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act applies because the rule revises

existing information collection requirements, resulting in a decrease

in the estimated burden. Accordingly, a request for amendment of

information collection requirements under approved Office of Management

and Budget (OMB) Control Numbers 9000-0037, 9000-0044, and 9000-0048

will be submitted to OMB under 44 U.S.C. 3501, et seq. at the final

rule stage. The title of each information collection requirement, the

affected FAR Part 15-related cite, and the hours currently approved by

OMB for each information collection requirement are: 9000-0037,

Standard Form 1417, Presolicitation Notice and Response, FAR 15.404(b),

7,882 hours; 9000-0044, Bid/Offer Acceptance Period, 52.215-19, 2,190

hours; and 9000-0048, Authorized Negotiators, 52.215-11, 8,415 hours.

As a result of this proposed rule, a decrease in the total information

collection requirement is expected, because increased efficiencies in

the source selection process are expected to result in a decrease in

the number of proposal revisions from offerors.

List of Subjects in 48 CFR Parts 1, 2, 3, 4, 5, 6, 7, 9, 11, 12, 13,

14, 15, 16, 17, 19, 24, 25, 27, 28, 31, 32, 33, 34, 35, 36, 42, 43, 44,

45, 49, 50, 52, and 53

Government procurement.

Dated: May 6, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, proposed rule 96-503, Competitive Range Determinations,

published at 61 FR 40116, July 31, 1996, is withdrawn, and proposed

rule 95-029 which appeared at 61 FR 48380, September 12, 1996, is

revised and it is proposed that 48 CFR Parts 1, 2, 3, 4, 5, 6, 7, 9,

11, 12, 13, 14, 15, 16, 17, 19, 24, 25, 27, 28, 31, 32, 33, 34, 35, 36,

42, 43, 44, 45, 49, 50, 52, and 53 be amended as set forth below:

1. The authority citation for 48 CFR Parts 1, 2, 3, 4, 5, 6, 7, 9,

11, 12, 13, 14, 16, 17, 19, 24, 25, 27, 28, 31, 32, 33, 34, 35, 36, 42,

43, 44, 45, 49, 50, 52, and 53 continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 1--FEDERAL ACQUISITIONS REGULATIONS SYSTEM

2. Section 1.102-2 is amended by adding paragraph (c)(3) to read as

follows:

1.102-2 Performance standards.

* * * * *

(c) * * *

(3) The Government shall exercise discretion, use sound business

judgment, and comply with applicable laws and regulations in dealing

with contractors and prospective contractors. All contractors and

prospective contractors shall be treated fairly and impartially, but

need not be treated the same.

* * * * *

PART 2--DEFINITIONS OF WORDS AND TERMS

3. Section 2.101 is amended by inserting, in alphabetical order,

the definition ``Best value'' to read as follows:

2.101 Definitions.

* * * * *

Best value means the outcome of an acquisition that, in the

Government's estimation, provides the greatest overall benefit in

response to the requirement.

* * * * *

PART 4--ADMINISTRATIVE MATTERS

4. Subpart 4.10 is added to read as follows:

Subpart 4.10--Contract Line Items

4.1001 Policy.

Contracts may identify the items or services to be acquired as

separately identified line items. Contract line items should provide

unit prices or lump sum prices for separately identifiable contract

deliverables, and associated delivery schedules or performance periods.

Line items may be further subdivided or stratified for administrative

convenience (e.g., to provide for traceable accounting classification

citations).

PART 6--COMPETITION REQUIREMENTS

5. Section 6.101 is amended by revising paragraph (b) to read as

follows:

6.101 Policy.

* * * * *

(b) Contracting officers shall provide for full and open

competition through use of the competitive procedure(s) contained in

this subpart that are best suited to the circumstances of the

[[Page 26643]]

contract action and consistent with the need to fulfill the

Government's requirements efficiently (10 U.S.C. 2304 and 41 U.S.C.

253).

PART 7--ACQUISITION PLANNING

6. Section 7.105 is amended by revising (b)(5) to read as follows:

7.105 Contents of written acquisition plans.

(b) * * *

(5) Budgeting and funding. Include budget estimates, explain how

they were derived, and discuss the schedule for obtaining adequate

funds at the time they are required (see subpart 32.7).

* * * * *

PART 11--DESCRIBING AGENCY NEEDS

7. Subpart 11.8 is added to read as follows:

Subpart 11.8--Testing

11.801 Preaward testing.

Preaward testing or product demonstration, when required by the

solicitation, need not be conducted in accordance with a formal test

plan. The results of such tests or demonstrations may be used to rate

the proposal, to determine technical acceptability, or otherwise to

evaluate the proposal.

PART 14--SEALED BIDDING

14.201-6 [Amended]

8. Section 14.201-6 is amended by removing and reserving paragraph

(n).

9. Section 14.404-1 is amended in paragraph (e)(1) by removing the

reference ``15.103'' and inserting ``paragraph (f) of this subsection''

in its place; and by adding paragraph (f) to read as follows:

14.404-1 Cancellation of invitations after opening.

* * * * *

(f) When the agency head has determined, in accordance with 14.404-

1(e)(1), that an invitation for bids should be canceled and that use of

negotiation is in the Government's interest, the contracting officer

may negotiate and make award without issuing a new solicitation

provided--

(1) Each responsible bidder in the sealed bid acquisition has been

given notice that negotiations will be conducted and has been given an

opportunity to participate in negotiations; and

(2) The negotiated price is the lowest negotiated price offered by

any responsible bidder.

10. Part 15 is revised to read as follows:

PART 15--CONTRACTING BY NEGOTIATION

Subpart 15.0--Scope

Sec.

15.000 Scope of part.

15.001 Definitions.

15.002 Negotiated acquisition.

Subpart 15.1--Source Selection Processes and Techniques

15.100 Scope of subpart.

15.101 Best value continuum.

15.101-1 Tradeoff process.

15.101-2 Lowest price technically acceptable source selection

process.

15.102 Multi-step source selection technique.

15.103 Oral presentations.

Subpart 15.2--Solicitation and Receipt of Proposals and Information

15.200 Scope of subpart.

15.201 Presolicitation exchanges with industry.

15.202 Advisory multi-step source selection.

15.203 Requests for proposals.

15.204 Contract format.

15.204-1 Uniform contract format.

Table 15-1--Uniform Contract Format

15.204-2 Part I--The Schedule.

15.204-3 Part II--Contract Clauses.

15.204-4 Part III--List of Documents, Exhibits, and Other

Attachments.

15.204-5 Part IV--Representations and Instructions.

15.205 Issuing solicitations.

15.206 Amending the solicitation.

15.207 Handling proposals and information.

15.208 Submission, modification, revision, and withdrawal of

proposals.

15.209 Solicitation provisions and contract clauses.

15.210 Forms.

Subpart 15.3--Unsolicited Proposals

15.300 Scope of subpart.

15.301 Definitions.

15.302 Policy.

15.303 General.

15.304 Agency liaison.

15.305 Content of unsolicited proposals.

15.306 Agency procedures.

15.306-1 Receipt and initial review.

15.306-2 Evaluation.

15.307 Criteria for acceptance and negotiation of an unsolicited

proposal.

15.308 Prohibitions.

15.309 Limited use of data.

Subpart 15.4--Source Selection

15.400 Scope of subpart.

15.400 Scope of subpart.

15.401 Definitions.

15.402 Source selection objective.

15.403 Responsibilities.

15.404 Evaluation factors and subfactors.

15.405 Proposal evaluation.

15.406 Communications with offerors.

15.407 Proposal revisions.

15.408 Source selection.

Subpart 15.5--Contract Pricing

15.500 Scope of subpart.

15.501 Definitions.

15.502 Pricing policy.

15.503 Obtaining cost or pricing data.

15.503-1 Prohibition on obtaining cost or pricing data.

15.503-2 Other circumstances where cost or pricing data are not

required.

15.503-3 Requiring information other than cost or pricing data.

15.503-4 Requiring cost or pricing data.

15.503-5 Instructions for submission of cost or pricing data or

information other than cost or pricing data.

15.504 Proposal analysis.

15.504-1 Proposal analysis techniques.

15.504-2 Information to support proposal analysis.

15.504-3 Subcontract pricing considerations.

15.504-4 Profit.

15.505 Price negotiation.

15.506 Documentation.

15.506-1 Prenegotiation objectives.

15.506-2 Certificate of Current Cost or Pricing Data.

15.506-3 Documenting the negotiation.

15.507 Special cost or pricing areas.

15.507-1 Defective cost or pricing data.

15.507-2 Make-or-buy programs.

15.507-3 Forward pricing rate agreements.

15.507-4 Should cost review.

15.507-5 Estimating systems.

15.508 Solicitation provisions and contract clauses.

Table 15-2--Instructions for Submitting Cost or Pricing Data

Subpart 15.6--Preaward, Award, and Postaward Notifications, Protests,

and Mistakes

15.601 Definition.

15.602 Applicability.

15.603 Notifications to unsuccessful offerors.

15.604 Award to successful offeror.

15.605 Preaward debriefing of offerors.

15.606 Postaward debriefing of offerors.

15.607 Protests against award.

15.608 Discovery of mistakes.

15.609 Forms.

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

Subpart 15.0--Scope

15.000 Scope of part.

This part prescribes policies and procedures governing competitive

and noncompetitive negotiated acquisitions. Negotiated procedures may

include bargaining. A contract awarded using other than sealed bidding

procedures is a negotiated contract (see 14.101).

15.001 Definitions.

As used in this part--

Communications are all interchanges after receipt of proposals

between the Government and an offeror, including

[[Page 26644]]

discussions conducted after the competitive range is established.

Discussions are negotiations that occur after establishment of the

competitive range that may, at the contracting officer's discretion,

result in the offeror being allowed to revise its proposal.

Negotiation is a procedure that, after receipt and evaluation of

proposals from offerors, permits bargaining. Bargaining includes

persuasion, alteration of assumptions and positions, give-and-take, and

may apply to price, schedule, technical requirements, type of contract,

or other terms of a proposed contract.

Proposal modification is a change made to a proposal before the

solicitation's closing date and time, made in response to an amendment,

or made to correct a mistake at any time before award.

Proposal revision is a change to a proposal made after the

solicitation closing date, at the request of a contracting officer, as

the result of discussions.

15.002 Negotiated acquisition.

(a) Sole-source acquisitions. When contracting in a sole source

environment, the RFP should be tailored to remove unnecessary

information and requirements e.g., evaluation criteria, and voluminous

proposal preparation instructions.

(b) Competitive acquisitions. When contracting in a competitive

environment, the procedures of this part are intended to minimize the

complexity of the solicitation, the evaluation, and the source

selection decision, while maintaining a process designed to foster an

impartial and comprehensive evaluation of offerors' proposals, leading

to selection of the proposal representing the best value to the

Government (see 2.101).

Subpart 15.1--Source Selection Processes and Techniques

15.100 Scope of subpart.

This subpart describes some acquisition processes and techniques

that may be used to design competitive acquisition strategies suitable

for the specific circumstances of the acquisition, unless otherwise

noted.

15.101 Best value continuum.

An agency can obtain best value in negotiated procurements by using

any one or a combination of source selection approaches. In different

types of procurements, the relative importance of cost or price may

vary. For example, in acquisitions where the requirement is clearly

definable and the risk of unsuccessful contract performance is minimal,

cost or price may play a dominant role in source selection. The less

definitive the requirement, the more development work required, or the

greater the performance risk, the more technical or past performance

considerations may play a dominant role in source selection.

15.101-1 Tradeoff process.

(a) This process is appropriate when it may be in the best interest

of the Government to consider award to other than the lowest priced

offeror.

(b) When using the tradeoff process, the following applies:

(1) All evaluation factors and significant subfactors that will

affect contract award and their relative importance shall be clearly

stated in the solicitation.

(2) The solicitation shall state whether all evaluation factors

other than cost or price when combined are significantly more important

than, approximately equal to, or significantly less important than cost

or price.

(3) This process permits tradeoffs among cost or price and non-cost

factors and allows the Government to accept other than the lowest

priced proposal. The perceived benefits of the higher-priced proposal

shall merit the additional cost, and the rationale for tradeoffs must

be documented in the file in accordance with 15.408.

15.101-2 Lowest price technically acceptable source selection process.

(a) This process is appropriate when best value is expected to

result from selection of the technically acceptable proposal with the

lowest evaluated price.

(b) When using the lowest price technically acceptable process, the

following applies:

(1) The evaluation factors and significant subfactors that

establish the requirements of acceptability shall be set forth in the

solicitation. Solicitations shall specify that award will be made on

the basis of the lowest evaluated price of proposals meeting or

exceeding the acceptability standards for non-cost factors. Past

performance shall be evaluated as a non-cost factor in accordance with

15.405, unless the contracting officer has determined that the

evaluation of past performance is not appropriate (15.404(d)(3)(iii)).

(2) Tradeoffs are not permitted.

(3) Proposals are evaluated for acceptability but not ranked using

the non-cost/price factors.

(4) Communications may occur (see 15.406).

15.102 Multi-step source selection technique.

(a) Multi-step source selection may be appropriate when the

submission of full proposals at the beginning of a source selection

would be burdensome for offerors to prepare and for Government

personnel to evaluate. Using the multi-step techniques described in

this section, agencies may seek limited information initially, make one

or more competitive range determinations, and request full proposals

from those remaining in the competitive range.

(b) The agency shall issue a solicitation that describes the

supplies or services to be acquired, identifies the criteria that will

be used in making the source selection decision, and identifies the

information that must be submitted in response to the first-step

solicitation. While the solicitation will not require the submission of

full proposals in first step, it shall require, at minimum, the

submission of statements of qualifications, proposed technical

concepts, and past performance and pricing information. The

solicitation also shall outline what submissions are expected in future

steps. The solicitation must disclose all significant factors and

subfactors, including cost or price, that the agency will consider in

evaluating proposals, and their relative importance. The solicitation

must contain sufficient information to permit potential offerors to

make informed decisions about whether to participate in the

acquisition, and shall advise them that failure to participate in the

first step will preclude participation in any subsequent step.

(c) The agency shall evaluate all responses in accordance with the

criteria stated in the solicitation, and shall advise each offeror

either that it has been selected to participate in the next step of the

acquisition or that it has been excluded from the competitive range.

Those not determined to be in the competitive range shall be informed

in accordance with 15.603 that they will not be permitted to

participate in any subsequent step, and shall be debriefed as required

by 15.605 and 15.606. The agency shall seek additional information in

any subsequent step sufficient to permit an award without further

discussion or another competitive range determination. The process ends

at contract award or cancellation of the acquisition.

15.103 Oral presentations.

Oral presentations by offerors to the Government may be used to

substitute for, or augment, written information. Use of oral

presentations as a substitute for portions of a proposal can be

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effective in streamlining the source selection process. Oral

presentations may occur at any time in the acquisition process, and are

subject to the same restrictions as written information, regarding

timing (see 15.208) and content (see 15.406). Oral presentations

provide an opportunity for dialogue among the parties in competitive

and sole source acquisitions. Pre-recorded videotaped presentations

that lack real-time interactive dialogue are not considered oral

presentations for the purposes of this section, although they may be

included in offeror submissions, when appropriate.

(a) The solicitation may require each offeror to submit part of its

proposal through oral presentations. However, certifications,

representations, and a signed offer sheet (including any exceptions to

the Government's terms and conditions) shall be submitted in writing.

(b) Information pertaining to areas such as an offeror's

capability, past performance, work plans or approaches, staffing

resources, transition plans, or sample tasks (or other types of tests)

may be suitable for oral presentations. In deciding what information to

obtain through an oral presentation, consider the following:

(1) The Government's ability to adequately evaluate the

information;

(2) The need to incorporate any information into the resultant

contract;

(3) The impact on the efficiency of the acquisition; and

(4) The impact on small businesses.

(c) When oral presentations are required, the solicitation shall

provide offerors with sufficient information to prepare them.

Accordingly, the solicitation may describe--

(1) The types of information to be presented orally and the

associated evaluation factors that will be used;

(2) The qualifications for personnel that will be required to

provide the oral presentation(s);

(3) The requirements for, and any limitations and/or prohibitions

on, the use of written material or other media to supplement the oral

presentations;

(4) The location, date, and time for the oral presentations;

(5) The restrictions governing the time permitted for each oral

presentation; and

(6) The scope and content of communications that may occur between

the Government's participants and the offeror's representatives as part

of the oral presentations, e.g., state whether or not discussions will

be permitted during oral presentations (see 15.406(d)).

(d) The contract file shall contain a record of oral presentations

to document what the Government relied upon in making the source

selection decision. The method and level of detail of the record (e.g.,

videotaping, written minutes, Government notes, copies of offeror

briefing slides or presentation notes) shall be at the discretion of

the source selection authority.

(e) When an oral presentation includes information that the parties

intend to include in the contract as material terms or conditions, the

information shall be put in writing. Incorporation by reference of oral

statements is not permitted.

(f) If, during an oral presentation, the Government conducts

discussions as defined in 15.001, the Government must comply with

15.406 and 15.407.

Subpart 15.2--Solicitation and Receipt of Proposals and Information

15.200 Scope of subpart.

This subpart prescribes policies and procedures for--

(a) Exchanging information with industry prior to releasing a

solicitation;

(b) Preparing and issuing requests for proposals (RFPs) and

requests for information (RFIs); and

(c) Receiving proposals and information.

15.201 Presolicitation exchanges with industry.

(a) Exchanges of information among all interested parties, from the

earliest identification of a requirement through release of the

solicitation, is encouraged. Interested parties include potential

offerors, end users, Government acquisition and supporting personnel,

and others involved in the conduct or outcome of the acquisition.

(b) The purpose of exchanging information is to improve the

understanding of Government requirements and industry capabilities,

thereby enhancing the Government's ability to obtain quality products

and services at reasonable prices, and increase efficiency in proposal

preparation, proposal evaluation, negotiation, and contract award.

(c) Agencies are encouraged to promote early exchanges of

information about future acquisitions. An early exchange of information

can identify and resolve concerns regarding the acquisition strategy,

including proposed contract type, terms and conditions and acquisition

planning schedules; the feasibility of the requirement, including

performance requirements, statements of work, and data requirements;

the suitability of the proposal instructions and evaluation criteria,

including the approach for assessing past performance information; the

availability of reference documents and information exchange

approaches; and any other industry concerns or questions (see 3.104

regarding procurement integrity requirements). Some techniques to

promote early exchanges of information are--

(1) Industry or small business conferences;

(2) Public hearings;

(3) Market research, as described in part 10;

(4) One-on-one meetings with potential offerors (see paragraph (f)

of this section regarding restrictions on disclosure of information);

(5) Presolicitation notices;

(6) Draft RFPs;

(7) RFIs;

(8) Presolicitation or preproposal conferences; and

(9) Site visits.

(d) The special notices of procurement matters at 5.205(c), or

electronic notices, may be used to publicize the Government's

requirement or solicit information from industry.

(e) RFIs may be used when the Government does not presently intend

to award a contract, but needs to obtain price, delivery, other market

information, or capabilities for planning purposes. Responses to these

notices are not offers and cannot be accepted by the Government to form

a binding contract. There is no required format for RFIs.

(f) General information about agency mission needs and future

requirements may be disclosed at any time. When specific information

about a proposed acquisition that would be necessary for the

preparation of proposals is disclosed to one or more potential

offerors, that information shall be made available to the public as

soon as possible, in order to avoid creating an unfair competitive

advantage. When a presolicitation or preproposal conference is

conducted, materials distributed at the conference should be made

available to all potential offerors, upon request.

15.202 Advisory multi-step source selection.

(a) The agency may publish a presolicitation notice (see 5.204)

that provides a general description of the scope or purpose of the

acquisition and invites potential offerors to submit information that

allows the Government to advise the offerors about their potential to

be viable competitors. The presolicitation notice should identify the

information that must be submitted and the criteria that will be used

in making the initial evaluation, and

[[Page 26646]]

should invite responses. Information sought may be limited to a

statement of qualifications and other appropriate information (e.g.,

proposed technical concept, past performance, and limited pricing

information). At a minimum, the notice shall contain sufficient

information to permit a potential offeror to make an informed decision

about whether to participate in the acquisition.

(b) The agency shall evaluate all responses in accordance with the

criteria stated in the notice, and shall advise each respondent either

that it will be invited to participate in the resultant acquisition or,

based on the information submitted, that it is unlikely to be a viable

competitor. The agency shall advise respondents considered not to be

viable competitors of the general basis for that opinion. The agency

shall inform all respondents that, notwithstanding the advice provided

by the Government in response to their submissions, they may

participate in the resultant acquisition.

15.203 Requests for proposals.

(a) Requests for proposals (RFPs) are used in negotiated

acquisitions to communicate Government requirements to prospective

contractors and to solicit proposals. RFPs for competitive acquisitions

shall, at a minimum, describe the--

(1) Government's requirement;

(2) Anticipated terms and conditions that will apply to the

contract--

(i) The solicitation may authorize offerors to propose alternative

terms and conditions, including the contract line item number (CLIN)

structure; and

(ii) When alternative CLIN structures are permitted, the evaluation

approach should consider the potential impact on other terms and

conditions or the requirement (e.g., place of performance or payment

and funding requirements);

(3) Information required to be in the offeror's proposal; and

(4) Factors and significant subfactors that will be used to

evaluate the proposal.

(b) An RFP may be issued for OMB Circular A-76 studies. See subpart

7.3 for additional information regarding cost comparisons between

Government and contractor performance.

(c) Electronic commerce may be used to issue RFPs, and to receive

proposals, modifications, and revisions. In this case, the RFP shall

specify the electronic commerce method(s) that offerors may use (see

subpart 4.5).

(d) Contracting officers may issue RFPs and/or authorize receipt of

proposals modifications or revisions by facsimile.

(1) In deciding whether or not to use facsimiles, the contracting

officer should consider factors such as--

(i) Anticipated proposal size and volume;

(ii) Urgency of the requirement;

(iii) Availability and suitability of electronic commerce methods;

and

(iv) Adequacy of administrative procedures and controls for

receiving, identifying, recording, and safeguarding facsimile

proposals, and ensuring their timely delivery to the designated

proposal delivery location.

(2) If facsimile proposals are authorized, contracting officers may

request offeror(s) to provide the complete, original signed proposal at

a later date.

(e) Letter RFPs may be used in sole source follow-on acquisitions

and other appropriate circumstances. Letter RFPs should be as complete

as possible and, as a minimum, should contain the following:

(1) RFP number and date;

(2) Name, address, and telephone number of contracting officer;

(3) Type of contract contemplated;

(4) Quantity, description, and required delivery dates for the

item;

(5) Applicable certifications and representations;

(6) Contract terms and conditions;

(7) Instructions to offerors and evaluation criteria for other than

sole-source actions;

(8) Proposal due date and time; and

(9) Other relevant information; e.g., incentives, variations in

delivery schedule, any peculiar or different requirements, cost

proposal support, and data requirements.

(f) Oral RFPs are authorized when processing a written solicitation

would delay the acquisition of supplies or services to the detriment of

the Government and a notice is not required under 5.202 (e.g.,

perishable items and support of contingency operations or other

emergency situations).

(1) The contract files supporting oral solicitations should

include--

(i) A description of the requirement;

(ii) Rationale for use of an oral solicitation;

(iii) Sources solicited, including the date, time, name of

individuals contacted, and prices offered; and

(iv) The solicitation number provided to the prospective offerors.

(2) The information furnished to potential offerors under oral

solicitations should include appropriate items from paragraph (e) of

this section.

15.204 Contract format.

The use of a standard contract format facilitates preparation of

the solicitation and contract as well as reference to, and use of,

those documents by offerors, contractors, and contract administrators.

The standard format need not be used in the following:

(a) Construction and architect-engineer contracts (see part 36).

(b) Subsistence contracts.

(c) Supplies or services requiring special contract formats

prescribed elsewhere in this chapter that are inconsistent with the

standard format.

(d) Letter requests for proposals (see 15.203(e)).

(e) Contracts exempted by the agency head or designee.

15.204-1 Uniform contract format.

(a) Contracting officers shall prepare solicitations and resulting

contracts using the uniform contract format outlined in Table 15-1 of

this section.

(b) Solicitations using the uniform contract format shall include

Parts I, II, III, and IV (see 15.204-2 through 15.204-5). Upon award,

contracting officers shall not physically include Part IV in the

resulting contract, but shall retain in the contract file a completed

Section K, Representations, certifications, and other statements of

offerors. Section K shall be incorporated by reference in the contract.

Table 15--1.--Uniform Contract Format

Section Title

Part I--The Schedule

A........................................ Solicitation/contract form.

B........................................ Supplies or services and prices/costs.

C........................................ Description/specifications/work statement.

D........................................ Packaging and marking.

E........................................ Inspection and acceptance.

F........................................ Deliveries or performance.

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G........................................ Contract administration data.

H........................................ Special contract requirements.

Part II--Contract Clauses

I........................................ Contract clauses.

Part III--List of Documents, Exhibits, and Other Attachments

J........................................ List of attachments

Part IV--Representations and Instructions

K........................................ Representations, certifications, and other statements of offerors or quoters.

L........................................ Instructions, conditions, and notices to offerors or respondents.

M........................................ Evaluation factors for award.

15.204-2 Part I--The Schedule.

The contracting officer shall prepare the contract Schedule as

follows:

(a) Section A, Solicitation/contract form. (1) Prepare RFPs on

Optional Form (OF) 308, Solicitation and Offer--Negotiated Acquisition,

unless otherwise permitted by this chapter (see use of modified

standard forms, part 53).

(2) If the Standard Form (SF) 18, Request for Quotations (53.301-

18) is used for an RFI, the form may be modified to incorporate Section

A of the uniform contract format.

(3) When other than OF 308 or SF 18 is used, include the following

information on the first page of the solicitation.

(i) Name, address, and location of issuing activity, including room

and building where proposals or information must be submitted.

(ii) Solicitation number.

(iii) Date of issuance.

(iv) Closing date and time.

(v) Number of pages.

(vi) Requisition or other purchase authority.

(vii) Brief description of item or service.

(viii) Requirement for the offeror or respondent to an RFI to

provide its name and complete address, including street, city, county,

state, and zip code.

(b) Section B, Supplies or services and prices/costs. Include a

brief description of the supplies or services; e.g., item number,

national stock number/part number if applicable, nouns, nomenclature,

and quantities. (This includes incidental deliverables such as manuals

and reports.)

(c) Section C, Description/specifications/work statement. Include

any description or specifications needed in addition to Section B (see

part 11).

(d) Section D, Packaging and marking. Provide packaging, packing,

preservation, and marking requirements, if any.

(e) Section E, Inspection and acceptance. Include inspection,

acceptance, quality assurance, and reliability requirements (see part

46, Quality Assurance).

(f) Section F, Deliveries or performance. Specify the requirements

for time, place, and method of delivery or performance (see subpart

11.4, Delivery or Performance Schedules, and 47.301-1).

(g) Section G, Contract administration data. Include any required

accounting and appropriation data and any required contract

administration information or instructions other than those on the

solicitation form. Include a statement that the offeror should include

the payment address in the proposal, if it is different from that shown

for the offeror.

(h) Section H, Special contract requirements. Include a clear

statement of any special contract requirements that are not included in

Section I, Contract clauses, or in other sections of the uniform

contract format.

15.204-3 Part II--Contract Clauses.

Section I, Contract clauses. The contracting officer shall include

in this section the clauses required by law or by this chapter and any

additional clauses expected to be included in any resulting contract,

if these clauses are not required in any other section of the uniform

contract format. An index may be inserted if this section's format is

particularly complex.

15.204-4 Part III--List of Documents, Exhibits, and Other Attachments.

Section J, List of attachments. The contracting officer shall list

the title, date, and number of pages for each attached document,

exhibit, and other attachment. Cross-references to material in other

sections may be inserted, as appropriate.

15.204-5 Part IV--Representations and Instructions.

The contracting officer shall prepare the representations and

instructions as follows:

(a) Section K, Representations, certifications, and other

statements of offerors. Include in this section those solicitation

provisions that require representations, certifications, or the

submission of other information by offerors.

(b) Section L, Instructions, conditions, and notices to offerors or

respondents. Insert in this section solicitation provisions and other

information and instructions not required elsewhere to guide offerors

or respondents in preparing proposals or responses to requests for

information. Prospective offerors or respondents may be instructed to

submit proposals or information in a specific format or severable parts

to facilitate evaluation. The instructions may specify further

organization of proposal or response parts, such as--

(1) Administrative;

(2) Management;

(3) Technical;

(4) Past performance; and

(5) Cost or pricing data (see Table 15-2 of 15.508).

(c) Section M, Evaluation factors for award. Identify all

significant factors and any significant subfactors that will be

considered in awarding the contract and their relative importance (see

15.404(e)). The contracting officer shall insert one of the phrases in

15.404(f).

15.205 Issuing solicitations.

(a) The contracting officer shall issue solicitations to potential

sources in accordance with the policies and procedures in parts 5 and

6. When using other than electronic contracting methods, the

contracting officer shall furnish copies of unclassified solicitations

to small businesses upon request and shall prepare a reasonable number

of copies for distribution to other eligible parties. The agency may

charge for solicitation sets, if permitted by agency regulations.

(b) A master solicitation (see 14.203-3) may be used for negotiated

acquisitions.

[[Page 26648]]

15.206 Amending the solicitation.

(a) When, either before or after receipt of proposals, the

Government changes, relaxes, increases, or otherwise modifies its

requirements or terms and conditions, the contracting officer shall

amend the solicitation.

(b) Oral notices may be used when time is of the essence. The

contracting officer shall document the contract file and formalize the

notice with an amendment.

(c) At a minimum, the following information should be included in

each amendment:

(1) Name and address of issuing activity;

(2) Solicitation number and date;

(3) Amendment number and date;

(4) Number of pages;

(5) Description of the change being made;

(6) Government point of contact and phone number; and

(7) Revision to solicitation closing date, if applicable.

(d) Amendments issued before the established time and date for

receipt of proposals shall be issued to all parties receiving the

solicitation.

(e) Amendments issued after the established time and date for

receipt of proposals shall be issued to all offerors that have not been

eliminated from the competition.

(f) If, based on market research or otherwise, in the judgment of

the contracting officer, an amendment issued after offers are received

is so substantial that it is beyond what prospective offerors could

have reasonably anticipated and that additional sources likely would

have submitted offers, the contracting officer shall cancel the

original solicitation and issue a new one, regardless of the stage of

the acquisition.

(g) If the proposal considered to be most advantageous to the

Government (determined according to the established evaluation

criteria) involves a departure from the stated requirements, the

contracting officer shall amend the solicitation, provided, that this

can be done without revealing to the other offerors the alternate

solution proposed or any other information that is entitled to

protection (see 15.208(b) and 15.407(d)).

15.207 Handling proposals and information.

(a) Upon receipt at the location specified in the solicitation,

proposals and information received in response to a request for

information (RFI) shall be marked with the date and time of receipt and

shall be transmitted to the designated officials.

(b) Proposals shall be safeguarded from unauthorized disclosure

throughout the source selection process. See 3.104 regarding the

disclosure of source selection information (41 U.S.C. 423). Information

received in response to an RFI shall be safeguarded adequately from

unauthorized disclosure.

(c) If a proposal received by the contracting officer

electronically or by facsimile is unreadable to the degree that

conformance to the essential requirements of the solicitation cannot be

ascertained from the document, the contracting officer immediately

shall notify the offeror and permit the offeror to resubmit the

proposal. The method and time for resubmission shall be prescribed by

the contracting officer after consultation with the offeror, and

documented in the file. The resubmission shall be considered as if it

were received at the date and time of the original unreadable

submission for the purpose of determining timeliness under 15.208(a),

provided the offeror complies with the time and format requirements for

resubmission prescribed by the contracting officer.

15.208 Submission, modification, revision, and withdrawal of

proposals.

(a) Offerors are responsible for timely submission of proposals,

and any requested revisions or modifications to them, to the Government

office designated in the solicitation. Unless the solicitation states a

specific time, the time for receipt is 4:30 p.m., local time, at the

designated office on the date that proposals, requested revisions, or

modifications are due.

(b) Proposals, modifications, and final revisions received in the

designated Government office after the exact time specified are late.

(c) Late proposals, modifications, and final revisions may be

accepted by the contracting officer provided--

(1) The contracting officer extends the due date for all offerors;

or

(2) The contracting officer determines in writing, on the basis of

a review of the circumstances, that the lateness was caused by actions,

or inactions, of the Government; or

(3) In the judgment of the contracting officer, the offeror

demonstrates by submission of factual information that the

circumstances causing the late submission were beyond the immediate

control of the offeror.

(d) The contracting officer shall promptly notify any offeror if

its proposal, modification, or revision was received late and whether

or not it will be considered, unless contract award is imminent and the

notice prescribed in 15.603(b) would suffice.

(e) Proposals may be withdrawn at any time before award. Written

proposals are withdrawn upon receipt by the contracting officer of a

written notice of withdrawal. Oral proposals in response to oral

solicitations may be withdrawn orally. The contracting officer shall

document the contract file when such oral withdrawals are made. One

copy of withdrawn proposals should be retained in the contract file

(see 4.803(a)(10)). Extra copies of the withdrawn proposals may be

destroyed or returned to the offeror at the offeror's request.

Extremely bulky proposals shall only be returned at the offeror's

request and expense.

15.209 Solicitation provisions and contract clauses.

When contracting by negotiation--

(a) The contracting officer shall insert the provision at 52.215-1,

Instructions to Offerors--Competitive Acquisition, in all competitive

solicitations where the Government intends to award a contract without

discussions. If the Government intends to make award after discussions

with offerors within the competitive range, the contracting officer

shall use the basic provision with its Alternate I.

(b) The contracting officer shall insert the clause at 52.215-2,

Audit and Records-Negotiation, in solicitations and contracts except--

(1) Acquisitions not exceeding the simplified acquisition

threshold;

(2) Acquisitions for utility services at rates not exceeding those

established to apply uniformly to the general public, plus any

applicable reasonable connection charge (10 U.S.C. 2313, 41 U.S.C.

254d, and OMB Circular No. A-133);

(3) Facilities acquisitions, where the contracting officer shall

use the clause with its Alternate I;

(4) Cost-reimbursement contracts with educational institutions and

other nonprofit organizations, where the contracting officer shall use

the clause with its Alternate II; or

(5) When the examination of records by the Comptroller General is

waived in accordance with 25.901; in this case the contracting officer

shall use the clause with its Alternate III.

(c) When issuing a solicitation for information or planning

purposes, the contracting officer shall insert the provision at 52.215-

3, Request for Information or Solicitation for Planning Purposes, and

clearly mark on the face of the solicitation that it is for information

or planning purposes.

(d) The contracting officer shall insert the provision at 52.215-4,

Type of

[[Page 26649]]

Business Organization, in all solicitations.

(e) The contracting officer shall insert the provision at 52.215-5,

Facsimile Proposals, in solicitations if facsimile proposals are

authorized (see 15.203(d)).

(f) The contracting officer shall insert the provision at 52.215-6,

Place of Performance, in solicitations unless the place of performance

is specified by the Government.

(g) The contracting officer shall insert the provision at 52.215-7,

Annual Representations and Certifications--Negotiation, in

solicitations if annual representations and certifications are used

(see 14.213).

(h) The contracting officer shall insert the clause at 52.215-8,

Order of Precedence--Uniform Contract Format, in solicitations and

contracts using the format at 15.204.

15.210 Forms.

Prescribed forms are not required to prepare solicitations

described in this part. The following forms may be used at the

discretion of the contracting officer:

(a) Optional Form 308, Solicitation and Offer--Negotiated

Acquisition, may be used to issue RFPs and RFIs.

(b) Optional Form 309, Amendment of Solicitation, may be used to

amend solicitations of negotiated contracts.

(c) Standard Form 30, Amendment of Solicitation/Modification of

Contract, may be used to amend solicitations of negotiated contracts.

Standard Form 33, Solicitation, Offer, and Award, may be used to issue

RFPs and RFIs.

(d) To promote identification and proper handling of proposals,

Optional Form 17, Offer Label, may be furnished with each request for

proposals.

Subpart 15.3--Unsolicited Proposals

15.300 Scope of subpart.

This subpart sets forth policies and procedures concerning the

submission, receipt, evaluation, and acceptance or rejection of

unsolicited proposals.

15.301 Definitions.

Advertising material, as used in this subpart, means material

designed to acquaint the Government with a prospective contractor's

present products, services, or potential capabilities, or designed to

stimulate the Government's interest in buying such products or

services.

Commercial item offer, as used in this subpart means an offer of a

commercial item that the vendor wishes to see introduced in the

Government's supply system as an alternate or a replacement for an

existing supply item. This term does not include innovative or unique

configurations or uses of commercial items that are being offered for

further development and may be submitted as an unsolicited proposal.

Contribution, as used in this subpart, means a concept, suggestion,

or idea presented to the Government for its use with no indication that

the source intends to devote any further effort to it on the

Government's behalf.

Unsolicited proposal, as used in this subpart, means a written

proposal for a new or innovative idea that is submitted to an agency on

the initiative of the offeror for the purpose of obtaining a contract

with the Government, and that is not in response to a request for

proposals, Broad Agency Announcement, Small Business Innovation

Research topic, Small Business Technology Transfer Research topic,

Program Research and Development Announcement, or any other Government-

initiated solicitation or program.

15.302 Policy.

It is the policy of the Government to encourage the submission of

new and innovative ideas in response to Broad Agency Announcements,

Small Business Innovation Research topics, Small Business Technology

Transfer Research topics, Program Research and Development

Announcements, or any other Government-initiated solicitation or

program. When the new and innovative ideas do not fall under topic

areas publicized under those programs or techniques, the ideas may be

submitted as unsolicited proposals.

15.303 General.

(a) Unsolicited proposals allow unique and innovative ideas or

approaches that have been developed outside the Government to be made

available to Government agencies for use in accomplishment of their

missions. Unsolicited proposals are offered with the intent that the

Government will enter into a contract with the offeror for research and

development or other efforts supporting the Government mission, and

often represent a substantial investment of time and effort by the

offeror.

(b) Advertising material, commercial item offers, or contributions,

as defined in 15.301, or routine correspondence on technical issues are

not unsolicited proposals.

(c) A valid unsolicited proposal must--

(1) Be innovative and unique;

(2) Be independently originated and developed by the offeror;

(3) Be prepared without Government supervision;

(4) Include sufficient detail to permit a determination that

Government support could be worthwhile and the proposed work could

benefit the agency's research and development or other mission

responsibilities; and

(5) Not be an advance proposal for a known agency requirement that

can be acquired by competitive methods.

(d) Unsolicited proposals in response to a publicized general

statement of agency needs are considered to be independently

originated.

15.304 Agency liaison.

(a) Preliminary contact with agency technical or other appropriate

personnel before preparing a detailed unsolicited proposal or

submitting proprietary information to the Government may save

considerable time and effort for both parties (see 15.201). Agencies

shall make available to potential offerors of unsolicited proposals at

least the following information:

(1) Definition (see 15.301) and content (see 15.305) of an

unsolicited proposal acceptable for formal evaluation.

(2) Requirements concerning responsible prospective contractors

(see subpart 9.1), and organizational conflicts of interest (see

subpart 9.5).

(3) Guidance on preferred methods for submitting ideas/concepts to

the Government, such as any agency: upcoming solicitations; Broad

Agency Announcements; Small Business Innovation Research programs;

Small Business Technology Transfer Research programs; Program Research

and Development Announcements; or grant programs.

(4) Agency contact points for information regarding advertising,

contributions, and other types of transactions frequently mistaken for

unsolicited proposals.

(5) Information sources on agency objectives and areas of potential

interest.

(6) Procedures for submission and evaluation of unsolicited

proposals.

(7) Instructions for identifying and marking proprietary

information so that it is protected and restrictive legends conform to

15.309.

(b) Only the cognizant contracting officer has the authority to

bind the Government regarding unsolicited proposals.

15.305 Content of unsolicited proposals.

Unsolicited proposals should contain the following information to

permit consideration in an objective and timely manner:

(a) Basic information including--

[[Page 26650]]

(1) Offeror's name and address and type of organization; e.g.,

profit, nonprofit, educational, small business;

(2) Names and telephone numbers of technical and business personnel

to be contacted for evaluation or negotiation purposes;

(3) Identification of proprietary data to be used only for

evaluation purposes;

(4) Names of other Federal, State, or local agencies or parties

receiving the proposal or funding the proposed effort;

(5) Date of submission; and

(6) Signature of a person authorized to represent and contractually

obligate the offeror.

(b) Technical information including--

(1) Concise title and abstract (approximately 200 words) of the

proposed effort;

(2) A reasonably complete discussion stating the objectives of the

effort or activity, the method of approach and extent of effort to be

employed, the nature and extent of the anticipated results, and the

manner in which the work will help to support accomplishment of the

agency's mission;

(3) Names and biographical information on the offeror's key

personnel who would be involved, including alternates; and

(4) Type of support needed from the agency; e.g., facilities,

equipment, materials, or personnel resources.

(c) Supporting information including--

(1) Proposed price or total estimated cost for the effort in

sufficient detail for meaningful evaluation;

(2) Period of time for which the proposal is valid (a 6-month

minimum is suggested);

(3) Type of contract preferred;

(4) Proposed duration of effort;

(5) Brief description of the organization, previous experience,

relevant past performance, and facilities to be used;

(6) Other statements, if applicable, about organizational conflicts

of interest, security clearances, and environmental impacts; and

(7) The names of agency technical or other agency personnel already

contacted regarding the proposal.

15.306 Agency procedures.

(a) Agencies shall establish procedures for controlling the

receipt, evaluation, and timely disposition of unsolicited proposals

consistent with the requirements of this subpart. The procedures shall

include controls on the reproduction and disposition of proposal

material, particularly data identified by the offeror as subject to

duplication, use, or disclosure restrictions.

(b) Agencies shall establish contact points (see 15.304) to

coordinate the receipt and handling of unsolicited proposals.

15.306-1 Receipt and initial review.

(a) Before initiating a comprehensive evaluation, the agency

contact point shall determine if the proposal--

(1) Is a valid unsolicited proposal, meeting the requirements of

15.303(c);

(2) Should have been submitted in response to an existing agency

requirement (see 15.302);

(3) Is related to the agency mission;

(4) Contains sufficient technical and cost information;

(5) Has been approved by a responsible official or other

representative authorized to obligate the offeror contractually; and

(6) Complies with the marking requirements of 15.309.

(b) If the proposal meets these requirements, the contact point

shall promptly acknowledge receipt and process the proposal.

(c) If a proposal is rejected because the proposal does not meet

the requirements of paragraph (a) of this subsection, the agency

contact point shall promptly inform the offeror of the reasons for

rejection and of the proposed disposition of the unsolicited proposal.

15.306-2 Evaluation.

(a) Comprehensive evaluations shall be coordinated by the agency

contact point, who shall attach or imprint on each unsolicited

proposal, circulated for evaluation, the legend required by 15.309(d).

When performing a comprehensive evaluation of an unsolicited proposal,

evaluators shall consider the following factors, in addition to any

others appropriate for the particular proposal:

(1) Unique, innovative and meritorious methods, approaches or

concepts demonstrated by the proposal;

(2) Overall scientific, technical, or socioeconomic merits of the

proposal;

(3) Potential contribution of the effort to the agency's specific

mission;

(4) The offeror's capabilities, related experience, facilities,

techniques, or unique combinations of these that are integral factors

for achieving the proposal objectives;

(5) The qualifications, capabilities, and experience of the

proposed principal investigator, team leader, or key personnel who is

critical in achieving the proposal objectives; and

(6) The realism of the proposed cost.

(b) The evaluators shall notify the coordinating office of their

recommendations when the evaluation is completed, and the cognizant

contracting officer shall be included in the evaluation and disposition

process.

15.307 Criteria for acceptance and negotiation of an unsolicited

proposal.

(a) A favorable comprehensive evaluation of an unsolicited proposal

does not, in itself, justify awarding a contract without providing for

full and open competition. Agency contact points shall return an

unsolicited proposal to the offeror, citing reasons, when its

substance--

(1) Is available to the Government without restriction from another

source;

(2) Closely resembles a pending competitive acquisition

requirement;

(3) Does not relate to the activity's mission; or

(4) Does not demonstrate an innovative and unique method, approach,

or concept, or is otherwise not deemed a meritorious proposal.

(b) The contracting officer may commence negotiations on a sole-

source basis only when--

(1) An unsolicited proposal has received a favorable comprehensive

evaluation;

(2) A justification and approval has been obtained (see 6.302-

1(a)(2)(i) for research proposals or other appropriate provisions of

subpart 6.3, and 6.303-2(b));

(3) The agency technical office sponsoring the contract furnishes

the necessary funds; and

(4) The contracting officer has complied with the synopsis

requirements of subpart 5.2.

15.308 Prohibitions.

(a) Government personnel shall not use any data, concept, idea, or

other part of an unsolicited proposal as the basis, or part of the

basis, for a solicitation or in negotiations with any other firm unless

the offeror is notified of and agrees to the intended use. However,

this prohibition does not preclude using any data, concept, or idea in

the proposal that also is available from another source without

restriction.

(b) Government personnel shall not disclose restrictively marked

information (see 3.104 and 15.309) included in an unsolicited proposal.

The disclosure of such information concerning trade secrets, processes,

operations, style of work, apparatus, and other matters, except as

authorized by law, may result in criminal penalties under 18 U.S.C.

1905.

15.309 Limited use of data.

(a) An unsolicited proposal may include data that the offeror does

not want disclosed to the public for any

[[Page 26651]]

purpose or used by the Government except for evaluation purposes. If

the offeror wishes to restrict the data, the title page must be marked

with the following legend:

Use and Disclosure of Data

This proposal includes data that shall not be disclosed outside

the Government and shall not be duplicated, used, or disclosed--in

whole or in part--for any purpose other than to evaluate this

proposal. However, if a contract is awarded to this offeror as a

result of--or in connection with--the submission of these data, the

Government shall have the right to duplicate, use, or disclose the

data to the extent provided in the resulting contract. This

restriction does not limit the Government's right to use information

contained in these data if they are obtained from another source

without restriction. The data subject to this restriction are

contained in Sheets [insert numbers or other identification of

sheets].

(b) The offeror shall also mark each sheet of data it wishes to

restrict with the following legend: Use or disclosure of data contained

on this sheet is subject to the restriction on the title page of this

proposal.

(c) The coordinating office shall return to the offeror any

unsolicited proposal marked with a legend different from that provided

in paragraph (a) of this section. The return letter will state that the

proposal cannot be considered because it is impracticable for the

Government to comply with the legend and that the agency will consider

the proposal if it is resubmitted with the proper legend.

(d) The coordinating office shall place a cover sheet on the

proposal or clearly mark it as follows, unless the offeror clearly

states in writing that no restrictions are imposed on the disclosure or

use of the data contained in the proposal:

Unsolicited Proposal Use of Data Limited

All Government personnel must exercise extreme care to ensure

that the information in this proposal is not disclosed to an

individual who has not been authorized access to such data in

accordance with 3.104, and is not duplicated, used, or disclosed in

whole or in part for any purpose other than evaluation of the

proposal, without the written permission of the offeror. If a

contract is awarded on the basis of this proposal, the terms of the

contract shall control disclosure and use. This notice does not

limit the Government's right to use information contained in the

proposal if it is obtainable from another source without

restriction. This is a Government notice, and shall not by itself be

construed to impose any liability upon the Government or Government

personnel for disclosure or use of data contained in this proposal.

(e) The notice in paragraph (d) of this section is used solely as a

manner of handling unsolicited proposals that will be compatible with

this subpart. However, the use of this notice shall not be used to

justify the withholding of a record nor to improperly deny the public

access to a record where an obligation is imposed on an agency by the

Freedom of Information Act, 5 U.S.C. 552, as amended. A prospective

offeror should identify trade secrets, commercial or financial

information, and privileged or confidential information to the

Government (see paragraph (a) of this section).

(f) When an agency receives an unsolicited proposal without any

restrictive legend from an educational or nonprofit organization or

institution, and an evaluation outside the Government is necessary, the

coordinating office shall--

(1) Attach a cover sheet clearly marked with the legend in

paragraph (d) of this section;

(2) Change the beginning of this legend to read ``All Government

and non-Government personnel * * *.'';

(3) Delete the words ``shall not be disclosed outside the

Government and''; and

(4) Require any non-Government evaluator to agree in writing that

data in the proposal will not be disclosed to others outside the

Government.

(g) If the proposal is received with the restrictive legend

(paragraph (a) of this section), the modified cover sheet shall also be

used and permission shall be obtained from the offeror before release

of the proposal for outside evaluation.

(h) When an agency receives an unsolicited proposal with or without

a restrictive legend from other than an educational or nonprofit

organization or institution, and evaluation by Government personnel

outside the agency or by experts outside of the Government is

necessary, written permission must be obtained from the offeror before

release of the proposal for evaluation. The coordinating office shall--

(1) Clearly mark the cover sheet with the legend in paragraph (d)

or as modified in paragraph (f) of this section;

(2) Obtain a written agreement from any non-Government evaluator

stating that data in the proposal will not be disclosed to persons

outside the Government; and

(3) Obtain the certifications required by 3.104-9 and a listing of

all persons authorized access to proprietary information by the

activity performing the evaluation.

Subpart 15.4--Source Selection

15.400 Scope of subpart.

This subpart prescribes policies and procedures for selection of a

source or sources in competitive negotiated acquisitions.

15.401 Definitions.

Deficiency, as used in this subpart is a material failure of a

proposal to meet a Government requirement or a combination of

significant weaknesses in a proposal that increases the risk of

unsuccessful contract performance to an unacceptable level.

Weakness, as used in this subpart, is a flaw that increases the

risk of unsuccessful contract performance. A ``significant weakness''

is a flaw that appreciably increases the risk of unsuccessful contract

performance.

15.402 Source selection objective.

The objective of source selection is to select the proposal that

represents the best value.

15.403 Responsibilities.

(a) Agency heads are responsible for source selection. The

contracting officer is designated as the source selection authority,

unless the agency head appoints another individual for a particular

acquisition or group of acquisitions.

(b) The source selection authority shall--

(1) Establish an evaluation team, tailored for the particular

acquisition, that includes an appropriate mix of contracting, legal,

logistics, technical, and other expertise to assure a comprehensive

evaluation of offers;

(2) Approve the source selection strategy before solicitation

release;

(3) Ensure consistency among the solicitation requirements, notices

to offerors, proposal preparation instructions, evaluation factors and

subfactors, solicitation provisions or contract clauses, and data

requirements;

(4) Ensure that proposals are evaluated based solely on the factors

and subfactors contained in the solicitation (10 U.S.C. 2305(b)(1) and

41 U.S.C. 253b(d)(2));

(5) Consider the recommendations of advisory boards or panels (if

any); and

(6) Select the source or sources whose proposal is the best value

to the Government (10 U.S.C. 2305(b)(4)(B) and 41 U.S.C. 253b(d)(2));

(c) The contracting officer shall--

(1) After release of a solicitation, serve as the focal point for

inquiries from actual or prospective offerors;

(2) After receipt of proposals, control communications with

offerors in accordance with 15.406; and

[[Page 26652]]

(3) Award the contract(s).

15.404 Evaluation factors and subfactors.

(a) The criteria upon which the award decision is based shall

consist of evaluation factors and subfactors and shall be tailored to

the acquisition.

(b) Evaluation factors and subfactors must--

(1) Represent the key areas of importance and emphasis to be

considered in the source selection decision; and

(2) Support meaningful comparison and discrimination between and

among competing proposals.

(c) If a multi-step solicitation technique will be used, the

factors and subfactors (if any) that apply shall be set forth in the

notice or solicitation.

(d) The evaluation factors and significant subfactors that apply to

an acquisition and their relative importance, are within the broad

discretion of agency acquisition officials, subject to the following

requirements:

(1) Price or cost to the Government shall be evaluated in every

source selection (10 U.S.C. 2305(a)(3)(A)(ii) and 41 U.S.C.

253a(c)(1)(B));

(2) The quality of the product or service shall be addressed in

every source selection through consideration of one or more non-cost

evaluation factors such as past performance, compliance with

solicitation requirements, technical excellence, management capability,

personnel qualifications, and prior experience (10 U.S.C.

2305(a)(3)(A)(i) and 41 U.S.C. 253a(c)(1)(B)); and

(3)(i) Except as set forth in paragraph (d)(3)(iii) of this

section, past performance shall be evaluated in all source selections

for negotiated competitive acquisitions expected to exceed $1,000,000.

(ii) Except as set forth in paragraph (d)(3)(iii) of this section,

past performance shall be evaluated in all source selections for

negotiated competitive acquisitions issued on or after January 1, 1999,

for acquisitions expected to exceed $100,000. Agencies should develop

phase-in schedules for past performance that meet or exceed this

schedule.

(iii) Past performance need not be evaluated if the contracting

officer documents the reason past performance is not an appropriate

evaluation factor for the acquisition (OFPP Policy Letter 92-5).

(e) All factors and significant subfactors that will affect

contract award and their relative importance shall be stated clearly in

the solicitation (10 U.S.C. 2305(a)(2) (A)(i) and 41 U.S.C.

253a(b)(1)(A)) (see 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.

(f) The solicitation shall also state, at a minimum, whether all

evaluation factors other than cost or price, when combined, are--

(1) Significantly more important than cost or price;

(2) Approximately equal to cost or price; or

(3) Significantly less important than cost or price (10 U.S.C.

2305(a)(3)(A)(iii) and 41 U.S.C. 253a(c)(1)(C)).

15.405 Proposal evaluation.

(a) Proposal evaluation is an assessment of the proposal and the

offeror's ability to perform the prospective contract successfully. An

agency shall evaluate competitive proposals and then assess their

relative qualities solely on the factors and subfactors specified in

the solicitation. Evaluations may be conducted using any rating method

or combination of methods, including color or adjectival ratings,

numerical weights, and ordinal rankings. The relative strengths,

weaknesses, and risks shall be documented in the contract file.

(1) Cost or price evaluation. Normally, competition establishes

price reasonableness. Therefore, when contracting on a firm-fixed-price

or fixed-price with economic price adjustment basis, comparison of the

proposed prices will usually satisfy the requirement to perform a price

analysis (but see 15.504-1(d)(3)), and a cost analysis need not be

performed. In limited situations, a cost analysis (see 15.503-

1(c)(1)(i)(B)) may be appropriate to establish reasonableness of the

otherwise successful offeror's price. When contracting on a cost-

reimbursement basis, evaluations shall include a cost realism analysis

to determine what the Government should realistically expect to pay for

the proposed effort, the offeror's understanding of the work, and the

offeror's ability to perform the contract. Cost realism analyses may

also be used on fixed-price incentive contracts or, in exceptional

cases, on other competitive fixed-price-type contracts (see 15.504-

1(d)(3)). The contracting officer shall document the cost or price

evaluation.

(2) Past performance evaluation. (i) Past performance information

is one indicator of an offeror's ability to perform the contract

successfully. The currency and relevance of the information, source of

the information, context of the data, and general trends in

contractor's performance shall be considered (41 U.S.C. 401). This

comparative assessment of past performance information is separate from

the responsibility determination required under subpart 9.1.

(ii) The solicitation shall describe the approach for evaluating

past performance, including evaluating offerors with no relevant

performance history, and provide offerors an opportunity to identify

past contracts (including Federal, State, and local government and

private) for efforts similar to the Government requirement. The

solicitation shall also authorize offerors to provide information on

problems encountered on the identified contracts and the offeror's

corrective actions. The Government shall consider this information, as

well as information obtained from any other sources, when evaluating

the offeror's past performance. The contracting officer shall determine

the relevancy of similar past performance information.

(iii) The evaluation may take into account past performance

information regarding predecessor companies, key personnel who have

relevant experience, or subcontractors that will perform major or

critical aspects of the requirement. Such information may be relevant

to the instant acquisition.

(iv) Firms lacking any relevant past performance history shall

receive a neutral evaluation for past performance. The evaluation

approach shall reflect the circumstances of each acquisition. A neutral

evaluation is one that neither rewards nor penalizes offerors without

relevant performance history (41 U.S.C. 405). While a neutral

evaluation will not affect an offeror's rating, it may affect the

offeror's ranking if a significant number of the other offerors

participating in the acquisition have past performance ratings either

above or below satisfactory.

(3) Technical evaluation. When tradeoffs are performed, the source

selection records shall include--

(i) An assessment of each offeror's ability to accomplish the

technical requirements; and

(ii) A summary, matrix, or quantitative ranking, along with

appropriate supporting narrative, of each technical proposal against

the evaluation criteria.

(4) Cost information may be provided to members of the technical

evaluation team.

(b) The source selection authority may reject all proposals

received in response to a solicitation, if doing so is in the best

interest of the Government.

[[Page 26653]]

15.406 Communications with offerors.

(a) Communications and award without discussions. (1) If award will

be made without conducting discussions, communications with offerors

may be used to resolve minor or clerical errors or to clarify certain

aspects of proposals (e.g., the relevancy of an offeror's past

performance information and adverse past performance information on

which the offeror has not previously had an opportunity to comment).

(2) Award may be made without discussions if the solicitation

states that the Government intends to evaluate proposals and make award

without discussions. If the solicitation contains such a notice and the

Government determines it is necessary to conduct discussions, the

rationale for doing so shall be documented in the contract file (see

the provision at 52.215-1) (10 U.S.C. 2305(b)(4)(A)(ii) and 41 U.S.C.

253b(d)(1)(B)).

(b) Communications with offerors before establishment of the

competitive range. If a competitive range is to be established, these

communications--

(1) May only be held with those offerors whose exclusion from, or

inclusion in, the competitive range is uncertain;

(2) May be conducted to enhance Government understanding of

proposals; allow reasonable interpretation of the proposal; or

facilitate the Government's evaluation process. Such communications

shall not be used to cure proposal deficiencies or material omissions,

materially alter the technical or cost elements of the proposal, and/or

otherwise revise the proposal. Such communications may be considered in

rating proposals;

(3) Are for the purpose of addressing issues that must be explored

to determine whether a proposal should be placed in the competitive

range. Such communications shall not provide an opportunity for the

offeror to revise its proposal, but may address--

(i) Ambiguities in the proposal or other concerns (e.g., perceived

deficiencies, weaknesses, errors, omissions, or mistakes (see 14.407));

and

(ii) Information relating to relevant past performance; and

(4) Shall address adverse past performance information on which the

offeror has not previously had an opportunity to comment.

(c) Competitive range. (1) Agencies shall evaluate all proposals in

accordance with 15.405(a), and, if discussions are to be conducted,

establish the competitive range. Based on the ratings of each proposal

against all evaluation criteria, the contracting officer shall

establish a competitive range comprised of those proposals most highly

rated, unless the range is further reduced for purposes of efficiency

pursuant to paragraph (c)(2) of this section.

(2) After evaluating all proposals in accordance with 15.405(a) and

15.406(c)(1), the contracting officer may determine that the number of

most highly rated proposals that might otherwise be included in the

competitive range exceeds the number at which an efficient competition

can be conducted. Provided the solicitation notifies offerors that the

competitive range can be limited for purposes of efficiency (see the

provision at 52.215-1(f)), the contracting officer may limit the number

of proposals in the competitive range to the greatest number that will

permit an efficient competition among the most highly rated proposals

(10 U.S.C. 2305(b)(4) and 41 U.S.C. 253b(d)).

(3) If the contracting officer, after complying with paragraph

(d)(3) of this section, decides that an offeror's proposal should no

longer be included in the competitive range, the proposal shall be

eliminated from consideration for award. Written notice of this

decision shall be provided to unsuccessful offerors in accordance with

15.603.

(4) Offerors excluded or otherwise eliminated from the competitive

range may request a debriefing (see 15.605 and 15.606).

(d) Communications with offerors after establishment of the

competitive range. (1) Such communications are discussions, tailored to

each offeror's proposal, and shall be conducted by the contracting

officer with each offeror within the competitive range.

(2) The primary objective of discussions is to maximize the

Government's ability to obtain best value, based on the requirement and

the evaluation factors set forth in the solicitation.

(3) The contracting officer shall, subject to paragraph (e) of this

section and 15.407(a), indicate to, or discuss with, each offeror still

being considered for award, significant weaknesses, deficiencies, and

other aspects of its proposal (such as, cost, price, performance, and

terms and conditions) that could, in the opinion of the contracting

officer, be altered to enhance materially the proposal's potential for

award. The scope and extent of discussion are a matter of contracting

officer judgment. In discussing other aspects of the proposal, the

Government may, in situations where the solicitation stated that

evaluation credit would be given for technical solutions exceeding any

mandatory minimums, negotiate with offerors for increased performance

beyond any mandatory minimums, and the Government may suggest to

offerors that have exceeded any mandatory minimums, that their

proposals would be more competitive if the excesses were removed and

the offered price decreased.

(e) Limits on communications. Government personnel involved in the

acquisition shall not engage in conduct that--

(1) Favors one offeror over another;

(2) Reveals an offeror's technical solution, including unique

technology, innovative and unique uses of commercial items, or any

information that would compromise an offeror's intellectual property to

another offeror;

(3) Reveals an offeror's price without that offeror's permission.

However, the contracting officer may inform an offeror that its price

is considered by the Government to be too high, or too low, and reveal

the results of the analysis supporting that conclusion. It is also

permissible, at the Government's discretion, to indicate to all

offerors the cost or price that the Government's price analysis, market

research, and other reviews have identified as reasonable (41 U.S.C.

423(h)(1)(2));

(4) Reveals the names of individuals providing reference

information about an offeror's past performance; or

(5) Knowingly furnishes source selection information in violation

of 3.104 and 41 U.S.C. 423(h)(1)(2).

15.407 Proposal revisions.

(a) If, after discussions have begun, an offeror in the competitive

range is no longer considered to be among the most highly rated

offerors being considered for award, that offeror may be eliminated

from the competitive range whether or not all material aspects of the

proposal have been discussed, or the offeror has been afforded an

opportunity to submit a proposal revision (see 15.406(d)). If an

offeror's proposal is eliminated or otherwise removed from the

competitive range, no further revisions to that offeror's proposal

shall be accepted or considered.

(b) The contracting officer may request proposal revisions that

clarify and document understandings reached during negotiations. At the

conclusion of discussions, each offeror still in the competitive range

shall be given an opportunity to submit a final proposal revision. The

contracting officer is required to establish a common cut-off date only

for receipt of final proposal revisions. Requests for final proposal

[[Page 26654]]

revisions shall advise offerors that the final proposal revisions shall

be in writing and that the Government intends to make award without

obtaining further revisions.

15.408 Source selection.

The source selection authority's (SSA) decision shall be based on a

comparative assessment of proposals against all source selection

criteria in the solicitation. While the SSA may use reports and

analyses prepared by others, the source selection decision shall

represent the SSA's independent judgment. The source selection decision

shall be documented, and the documentation shall include the rationale

for any business judgments and tradeoffs, including benefits associated

with additional costs. Although the rationale for the selection

decision must be documented, that documentation need not provide

quantification of the tradeoffs that led to the decision.

Subpart 15.5--Contract Pricing

15.500 Scope of subpart.

This subpart prescribes the cost and price negotiation policies and

procedures for pricing negotiated prime contracts (including

subcontracts) and contract modifications, including modifications to

contracts awarded by sealed bidding.

15.501 Definitions.

Cost or pricing data (10 U.S.C. 2306a(h)(1) and 41 U.S.C. 254(d))

means all facts that, as of the date of price agreement or, if

applicable, an earlier date agreed upon between the parties that is as

close as practicable to the date of agreement on price, prudent buyers

and sellers would reasonably expect to affect price negotiations

significantly. Cost or pricing data are data requiring certification in

accordance with 15.506-2. Cost or pricing data are factual, not

judgmental; and are verifiable. While they do not indicate the accuracy

of the prospective contractor's judgment about estimated future costs

or projections, they do include the data forming the basis for that

judgment. Cost or pricing data are more than historical accounting

data; they are all the facts that can be reasonably expected to

contribute to the soundness of estimates of future costs and to the

validity of determinations of costs already incurred. They also include

such factors as: vendor quotations; nonrecurring costs; information on

changes in production methods and in production or purchasing volume;

data supporting projections of business prospects and objectives and

related operations costs; unit-cost trends such as those associated

with labor efficiency; make-or-buy decisions; estimated resources to

attain business goals; and information on management decisions that

could have a significant bearing on costs. Cost or pricing data may

include parametric estimates of elements of cost or price, from

appropriate validated calibrated parametric models.

Cost realism means an assessment of whether or not the costs in an

offeror's proposal are realistic for the work to be performed; reflect

a clear understanding of the requirements; and are consistent with the

various elements of the offeror's technical proposal.

Forward pricing rate agreement means a written agreement negotiated

between a contractor and the Government to make certain rates available

during a specified period for use in pricing contracts or

modifications. Such rates represent reasonable projections of specific

costs that are not easily estimated for, identified with, or generated

by a specific contract, contract end item, or task. These projections

may include rates for such things as labor, indirect costs, material

obsolescence and usage, spare parts provisioning, and material

handling.

Forward pricing rate recommendation means a rate set unilaterally

by the administrative contracting officer for use by the Government in

negotiations or other contract actions when forward pricing rate

agreement negotiations have not been completed or when the contractor

will not agree to a forward pricing rate agreement.

Information other than cost or pricing data means any type of

information that is not required to be certified in accordance with

15.506-2 and is necessary to determine price reasonableness or cost

realism. For example, such information may include pricing, sales, or

cost information, and includes cost or pricing data for which

certification is determined inapplicable after submission.

Price, as used in this subpart, means cost plus any fee or profit

applicable to the contract type.

Subcontract, as used in this subpart, also includes a transfer of

commercial items between divisions, subsidiaries, or affiliates of a

contractor or a subcontractor.

15.502 Pricing policy.

Contracting officers shall--

(a) Purchase supplies and services from responsible sources at fair

and reasonable prices. In establishing the reasonableness of the

offered prices, the contracting officer shall not obtain more

information than is necessary. To the extent that cost or pricing data

are not required by 15.503-4, the contracting officer shall generally

use the following order of preference in determining the type of

information required:

(1) No additional information from the offeror, if the price is

based on adequate price competition, except as provided by 15.503-3(b).

(2) Information other than cost or pricing data:

(i) Information related to prices (e.g., established catalog or

market prices), relying first on information available within the

Government; second, on information obtained from sources other than the

offeror; and, if necessary, on information obtained from the offeror.

When obtaining information from the offeror is necessary, unless an

exception under 15.503-1(b) (1) or (2) applies, such information

submitted by the offeror shall include, at a minimum, appropriate

information on the prices at which the same or similar items have been

sold previously, adequate for evaluating the reasonableness of the

price.

(ii) Cost information, that does not meet the definition of cost or

pricing data at 15.501.

(3) Cost or pricing data. The contracting officer should use every

means available to ascertain whether a fair and reasonable price can be

determined before requesting cost or pricing data. Contracting officers

shall not require unnecessarily the submission of cost or pricing data,

because it leads to increased proposal preparation costs, generally

extends acquisition lead-time, and consumes additional contractor and

Government resources.

(b) Price each contract separately and independently and not--

(1) Use proposed price reductions under other contracts as an

evaluation factor; or

(2) Consider losses or profits realized or anticipated under other

contracts.

(c) Not include in a contract price any amount for a specified

contingency to the extent that the contract provides for a price

adjustment based upon the occurrence of that contingency.

15.503 Obtaining cost or pricing data.

15.503-1 Prohibition on obtaining cost or pricing data (10 U.S.C.

2306a and 41 U.S.C. 254b).

(a) Cost or pricing data shall not be obtained for acquisitions at

or below the simplified acquisition threshold.

(b) Exceptions to cost or pricing data requirements. The

contracting officer

[[Page 26655]]

shall not require submission of cost or pricing data to support any

action (contracts, subcontracts, or modifications) (but may require

information other than cost or pricing data to support a determination

of price reasonableness or cost realism)--

(1) When the contracting officer determines that prices agreed upon

are based on adequate price competition (see standards at paragraph

(c)(1) of this subsection);

(2) When the contracting officer determines that prices agreed upon

are based on prices set by law or regulation (see standards at

paragraph (c)(2) of this subsection);

(3) When a commercial item is being acquired (see standards at

paragraph (c)(3) of this subsection);

(4) When a waiver has been granted (see standards at paragraph

(c)(4) of this subsection); or

(5) When modifying a contract or subcontract for commercial items

(see standards at paragraph (c)(3) of this subsection).

(c) Standards for exceptions from cost or pricing data

requirements--(1) Adequate price competition. A price is based on

adequate price competition if--

(i) Two or more responsible offerors, competing independently,

submit priced offers in response to the Government's expressed

requirement and if--

(A) Award will be made to the offeror whose proposal represents the

best value where price is a substantial factor in source selection; and

(B) There is no finding that the price of the otherwise successful

offeror is unreasonable. Any finding that the price is unreasonable

must be supported by a statement of the facts and approved at a level

above the contracting officer;

(ii) There was a reasonable expectation, based on market research

or other assessment, that two or more responsible offerors, competing

independently, would submit priced offers in response to the

solicitation's expressed requirement, even though only one offer is

received from a responsible offeror and if--

(A) Based on the offer received, the contracting officer can

reasonably conclude that the offer was submitted with the expectation

of competition, e.g., circumstances indicate that--

(1) The offeror believed that at least one other offeror was

capable of submitting a meaningful offer; and

(2) The offeror had no reason to believe that other potential

offerors did not intend to submit an offer; and

(B) The determination that the proposed price is based on adequate

price competition and is reasonable and is approved at a level above

the contracting officer; or

(iii) Price analysis clearly demonstrates that the proposed price

is reasonable in comparison with current or recent prices for the same

or similar items, adjusted to reflect changes in market conditions,

economic conditions, quantities, or terms and conditions under

contracts that resulted from adequate price competition.

(2) Prices set by law or regulation. Pronouncements in the form of

periodic rulings, reviews, or similar actions of a governmental body,

or embodied in the laws are sufficient to set a price.

(3) Commercial items. Any acquisition for an item that meets the

commercial item definition in 2.101, or any modification, as defined in

paragraph (c) (1) or (2) of that definition, that does not change the

item from a commercial item to a noncommercial item, is exempt from the

requirement for cost or pricing data.

(4) Waivers. The head of the contracting activity (HCA) may,

without power of delegation, waive the requirement for submission of

cost or pricing data in exceptional cases. The authorization for the

waiver and the supporting rationale shall be in writing. The HCA may

consider waiving the requirement if the price can be determined to be

fair and reasonable without submission of cost or pricing data. For

example, if cost or pricing data were furnished on previous production

buys and the contracting officer determines such data are sufficient,

when combined with updated information, a waiver may be granted. If the

HCA has waived the requirement for submission of cost or pricing data,

the contractor or higher-tier subcontractor to whom the waiver relates

shall be considered as having been required to provide cost or pricing

data. Consequently, award of any lower-tier subcontract expected to

exceed the cost or pricing data threshold requires the submission of

cost or pricing data unless an exception otherwise applies to the

subcontract or the waiver specifically includes that subcontract.

15.503-2 Other circumstances where cost or pricing data are not

required.

(a) The exercise of an option at the price established at contract

award or initial negotiation does not require submission of cost or

pricing data.

(b) Cost or pricing data are not required for proposals used solely

for overrun funding or interim billing price adjustments.

15.503-3 Requiring information other than cost or pricing data.

(a) General. (1) The contracting officer is responsible for

obtaining information that is adequate for evaluating the

reasonableness of the price or determining cost realism. However, the

contracting officer should not obtain more information than is

necessary for determining the reasonableness of the price or evaluating

cost realism. To the extent necessary to determine the reasonableness

of the price the contracting officer shall require submission of

information from the offeror. Unless an exception under 15.503-1(b) (1)

or (2) applies, such information submitted by the offeror shall

include, at a minimum, appropriate information on the prices at which

the same item or similar items have previously been sold, adequate for

determining the reasonableness of the price (10 U.S.C. 2306a(d)(1) and

41 U.S.C. 254b(c)(2)).

(2) The contractor's format for submitting such information should

be used (see 15.503-5(b)(2)).

(3) The contracting officer shall ensure that information used to

support price negotiations is sufficiently current to permit

negotiation of a fair and reasonable price. Requests for updated

offeror information should be limited to information that affects the

adequacy of the proposal for negotiations, such as changes in price

lists. Such data shall not be certified in accordance with 15.506-2.

(b) Adequate price competition. When adequate price competition

exists (see 15.503-1(c)(1)), generally no additional information is

necessary to determine the reasonableness of price. However, if there

are unusual circumstances where it is concluded that additional

information is necessary to determine the reasonableness of price, the

contracting officer shall, to the maximum extent practicable, obtain

the additional information from sources other than the offeror. In

addition, the contracting officer may request information to determine

the cost realism of competing offers or to evaluate competing

approaches.

(c) Limitations relating to commercial items (10 U.S.C. 2306a(d)(2)

and 41 U.S.C. 254b(d)). (1) Requests for sales data relating to

commercial items shall be limited to data for the same or similar items

during a relevant time period.

(2) The contracting officer shall, to the maximum extent

practicable, limit the scope of the request for information relating to

commercial items to include only information that is in the form

regularly maintained by the offeror as part of its commercial

operations.

[[Page 26656]]

(3) Information obtained relating to commercial items that is

exempt from disclosure under the Freedom of Information Act (5 U.S.C.

552(b)) shall not be disclosed outside the Government.

15.503-4 Requiring cost or pricing data (10 U.S.C. 2306a and 41 U.S.C.

254b).

(a)(1) Cost or pricing data shall be obtained only if the

contracting officer concludes that none of the exceptions in 15.503-

1(b) applies. However, if the contracting officer has sufficient

information available to determine price reasonableness, then a waiver

under the exception at 15.503-1(b)(4) should be considered. The

threshold for obtaining cost or pricing data is $500,000. Unless an

exception applies, cost or pricing data are required before

accomplishing any of the following actions expected to exceed the

current threshold or, in the case of existing contracts, the threshold

specified in the contract:

(i) The award of any negotiated contract (except for undefinitized

actions such as letter contracts).

(ii) The award of a subcontract at any tier, if the contractor and

each higher-tier subcontractor have been required to furnish cost or

pricing data (but see waivers at 15.503-1(b)(4)).

(iii) The modification of any sealed bid or negotiated contract

(whether or not cost or pricing data were initially required) or any

subcontract covered by paragraph (a)(1)(ii) of this subsection. Price

adjustment amounts shall consider both increases and decreases (e.g., a

$150,000 modification resulting from a reduction of $350,000 and an

increase of $200,000 is a pricing adjustment exceeding $500,000). This

requirement does not apply when unrelated and separately priced changes

for which cost or pricing data would not otherwise be required are

included for administrative convenience in the same modification.

Negotiated final pricing actions (such as termination settlements and

total final price agreements for fixed-price incentive and

redeterminable contracts) are contract modifications requiring cost or

pricing data if the total final price agreement for such settlements or

agreements exceeds the pertinent threshold set forth at paragraph

(a)(1) of this subsection, or the partial termination settlement plus

the estimate to complete the continued portion of the contract exceeds

the pertinent threshold set forth at paragraph (a)(1) of this

subsection (see 49.105(c)(15)).

(2) Unless prohibited because an exception at 15.503-1(b) applies,

the head of the contracting activity, without power of delegation, may

authorize the contracting officer to obtain cost or pricing data for

pricing actions below the pertinent threshold in paragraph (a)(1) of

this subsection, provided the action exceeds the simplified acquisition

threshold. The head of the contracting activity shall justify the

requirement for cost or pricing data. The documentation shall include a

written finding that cost or pricing data are necessary to determine

whether the price is fair and reasonable and the facts supporting that

finding.

(b) When cost or pricing data are required, the contracting officer

shall require the contractor or prospective contractor to submit to the

contracting officer (and to have any subcontractor or prospective

subcontractor submit to the prime contractor or appropriate

subcontractor tier) the following in support of any proposal:

(1) The cost or pricing data.

(2) A certificate of current cost or pricing data, in the format

specified in 15.506-2, certifying that to the best of its knowledge and

belief, the cost or pricing data were accurate, complete, and current

as of the date of agreement on price or, if applicable, an earlier date

agreed upon between the parties that is as close as practicable to the

date of agreement on price.

(c) If cost or pricing data are requested and submitted by an

offeror, but an exception is later found to apply, the data shall not

be considered cost or pricing data as defined in 15.501 and shall not

be certified in accordance with 15.506-2.

(d) The requirements of this section also apply to contracts

entered into by an agency on behalf of a foreign government.

15.503-5 Instructions for submission of cost or pricing data or

information other than cost or pricing data.

(a) Taking into consideration the policy at 15.502, the contracting

officer shall specify in the solicitation (see 15.508 (l) and (m))--

(1) Whether cost or pricing data are required;

(2) That, in lieu of submitting cost or pricing data, the offeror

may submit a request for exception from the requirement to submit cost

or pricing data;

(3) Any information other than cost or pricing data that is

required; and

(4) Necessary preaward or postaward access to offeror's records.

(b)(1) Unless required to be submitted on one of the termination

forms specified in subpart 49.6, the contracting officer may require

submission of cost or pricing data in the format indicated at Table 15-

2 of 15.508, specify an alternative format, or permit submission in the

contractor's format.

(2) Information other than cost or pricing data may be submitted in

the offeror's own format unless the contracting officer decides that

use of a specific format is essential and the format has been described

in the solicitation.

15.504 Proposal analysis.

15.504-1 Proposal analysis techniques.

(a) General. The objective of proposal analysis is to ensure that

the final agreed-to price is fair and reasonable.

(1) The contracting officer is responsible for evaluating the

reasonableness of the offered prices. The analytical techniques and

procedures described in this section may be used, singly or in

combination with others, to ensure that the final price is fair and

reasonable. The complexity and circumstances of each acquisition should

determine the level of detail of the analysis required.

(2) Price analysis shall be used when cost or pricing data are not

required (see paragraph (b) of this subsection and 15.504-3).

(3) Cost analysis shall be used to evaluate the reasonableness of

individual cost elements when cost or pricing data are required. When

appropriate, price analysis shall be used to verify that the overall

price offered is fair and reasonable.

(4) Cost analysis may also be used to evaluate information other

than cost or pricing data to determine cost reasonableness or cost

realism.

(5) The contracting officer may request the advice and assistance

of other experts to assure an appropriate analysis is performed.

(6) Recommendations or conclusions regarding the Government's

review or analysis of an offeror's or contractor's proposal shall not

be disclosed to the offeror or contractor without the concurrence of

the contracting officer. Any discrepancy or mistake of fact (such as

duplications, omissions, and errors in computation) contained in the

cost or pricing data or information other than cost or pricing data

submitted in support of a proposal shall be brought to the contracting

officer's attention for appropriate action.

(7) The Air Force Institute of Technology (AFIT) and the Federal

Acquisition Institute (FAI) jointly prepared a series of five desk

references to guide pricing and negotiation personnel. The five desk

references are: Price Analysis, Cost Analysis, Quantitative Techniques

for Contract Pricing, Advanced Issues in Contract

[[Page 26657]]

Pricing, and Federal Contract Negotiation Techniques. The references

provide detailed discussion and examples applying pricing policies to

pricing problems. They are to be used for instruction and professional

guidance. However, they are not directive and should be considered

informational only. Copies of the desk references are available on CD-

ROM which also contains the FAR, the FTR and various other regulations

and training materials. The CD-ROM may be purchased by annual

subscription (updated quarterly), or individually (reference ``List ID

GSAFF,'' Stock No. 722-009-0000-2). The individual CD-ROMs or

subscription to the CD-ROM may be purchased from the Superintendent of

Documents, U.S. Government Printing Office, by telephone (202) 512-1800

or facsimile (202) 512-2550, or by mail order from the Superintendent

of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Free copies

of the desk references are available on the World Wide Web, Internet

address: http://www.gsa.gov/staff/v/guides/instructions.htm.

(b) Price analysis. (1) Price analysis is the process of examining

and evaluating a proposed price without evaluating its separate cost

elements and proposed profit.

(2) The Government may use various price analysis techniques and

procedures to ensure a fair and reasonable price, given the

circumstances surrounding the acquisition. Examples of such techniques

include, but are not limited to the following:

(i) Comparison of proposed prices received in response to the

solicitation.

(ii) Comparison of previously proposed prices and contract prices

with current proposed prices for the same or similar end items, if both

the validity of the comparison and the reasonableness of the previous

price(s) can be established.

(iii) Application of rough yardsticks (such as dollars per pound or

per horsepower, or other units) to highlight significant

inconsistencies that warrant additional pricing inquiry.

(iv) Comparison with competitive published price lists, published

market prices of commodities, similar indexes, and discount or rebate

arrangements.

(v) Comparison of proposed prices with independent Government cost

estimates.

(vi) Comparison of proposed prices with prices obtained through

market research for the same or similar items.

(c) Cost analysis. (1) Cost analysis is the review and evaluation

of the separate cost elements and profit in an offeror's or

contractor's proposal (including cost or pricing data or information

other than cost or pricing data), and the application of judgment to

determine how well the proposed costs represent what the cost of the

contract should be, assuming reasonable economy and efficiency.

(2) The Government may use various cost analysis techniques and

procedures to ensure a fair and reasonable price, given the

circumstances of the acquisition. Such techniques and procedures

include the following:

(i) Verification of cost or pricing data and evaluation of cost

elements, including--

(A) The necessity for, and reasonableness of, proposed costs,

including allowances for contingencies;

(B) Projection of the offeror's cost trends, on the basis of

current and historical cost or pricing data;

(C) Reasonableness of estimates generated by appropriately

validated/calibrated parametric models or cost-estimating

relationships; and

(D) The application of audited or negotiated indirect cost rates,

labor rates, and cost of money or other factors.

(ii) Evaluating the effect of the offeror's current practices on

future costs. In conducting this evaluation, the contracting officer

shall ensure that the effects of inefficient or uneconomical past

practices are not projected into the future. In pricing production of

recently developed complex equipment, the contracting officer should

perform a trend analysis of basic labor and materials, even in periods

of relative price stability.

(iii) Comparison of costs proposed by the offeror for individual

cost elements with--

(A) Actual costs previously incurred by the same offeror;

(B) Previous cost estimates from the offeror or from other offerors

for the same or similar items;

(C) Other cost estimates received in response to the Government's

request;

(D) Independent Government cost estimates by technical personnel;

and

(E) Forecasts of planned expenditures.

(iv) Verification that the offeror's cost submissions are in

accordance with the contract cost principles and procedures in part 31

and, when applicable, the requirements and procedures in 48 CFR Chapter

99 (Appendix of the FAR looseleaf edition), Cost Accounting Standards.

(v) Review to determine whether any cost or pricing data necessary

to make the contractor's proposal accurate, complete, and current have

not been either submitted or identified in writing by the contractor.

If there are such data, the contracting officer shall attempt to obtain

them and negotiate, using them or making satisfactory allowance for the

incomplete data.

(vi) Analysis of the results of any make-or-buy program reviews, in

evaluating subcontract costs (see 15.507-2).

(d) Cost realism analysis. (1) Cost realism analysis is the process

of independently reviewing and evaluating specific elements of each

offeror's proposed cost estimate to determine whether the estimated

proposed cost elements are realistic for the work to be performed;

reflect a clear understanding of the requirements; and are consistent

with the unique methods of performance and materials described in the

offeror's technical proposal.

(2) Cost realism analyses shall be performed on competitive cost-

reimbursement contracts to determine the probable cost of performance

for each offeror.

(i) The probable cost may differ from the 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.

(ii) The probable cost is determined by adjusting each offeror's

proposed cost, and fee when appropriate, to reflect any additions or

reductions in cost elements to realistic levels based on the results of

the cost realism analysis.

(3) Cost realism analyses may also be used on competitive fixed-

price incentive contracts or, in exceptional cases, on other

competitive fixed-price-type contracts when new requirements may not be

fully understood by competing offerors, there are quality concerns, or

past experience indicates that contractors' proposed costs have

resulted in quality or service shortfalls. Results of the analysis may

be used in performance risk assessments and responsibility

determinations. However, proposals shall be evaluated using the

criteria in the solicitation, and the offered prices shall not be

adjusted as a result of the analysis.

(e) Technical analysis. (1) The contracting officer may request

that personnel having specialized knowledge, skills, experience, or

capability in engineering, science, or management perform a technical

analysis of the proposed types and quantities of materials, labor,

processes, special tooling, facilities, the reasonableness of scrap and

spoilage, and other associated factors set forth in the proposal(s) in

order to determine the need for and reasonableness of the

[[Page 26658]]

proposed resources, assuming reasonable economy and efficiency.

(2) At a minimum, the technical analysis should examine the types

and quantities of material proposed and the need for the types and

quantities of labor hours and the labor mix. Any other data that may be

pertinent to an assessment of the offeror's ability to accomplish the

technical requirements or to the cost or price analysis of the service

or product being proposed should also be included in the analysis.

(f) Unit prices. (1) Unit prices shall reflect the intrinsic value

of an item or service and shall be in proportion to an item's base cost

(e.g., manufacturing or acquisition costs). Any method of distributing

costs to line items that distorts the unit prices shall not be used.

For example, distributing costs equally among line items is not

acceptable except when there is little or no variation in base cost.

(2) Except for the acquisition of commercial items, contracting

officers shall require that offerors identify in their proposals those

items of supply that they will not manufacture or to which they will

not contribute significant value, unless adequate price competition is

expected (10 U.S.C. 2304 and 41 U.S.C. 254(d)(5)(A)(i)). Such

information shall be used to determine whether the intrinsic value of

an item has been distorted through application of overhead and whether

such items should be considered for breakout. The contracting officer

may require such information in all other negotiated contracts when

appropriate.

(g) Unbalanced pricing. (1) Unbalanced pricing may increase

performance risk and could result in payment of unreasonably high

prices. Unbalanced pricing exists when, despite an acceptable total

evaluated price, the price of one or more contract line items is

significantly over or understated as indicated by the application of

cost or price analysis techniques. The greatest risks associated with

unbalanced pricing occur when--

(i) Startup work, mobilization, first articles, or first article

testing are separate line items;

(ii) Base quantities and option quantities are separate line items;

or

(iii) The evaluated price is the aggregate of estimated quantities

to be ordered under separate line items of an indefinite-delivery

contract.

(2) All offers with separately priced line items or subline items

shall be analyzed to determine if the prices are unbalanced. If cost or

price analysis techniques indicate that an offer is unbalanced, the

contracting officer shall--

(i) Consider the risks to the Government associated with the

unbalanced pricing in determining the competitive range and in making

the source selection decision; and

(ii) Consider whether award of the contract will result in paying

unreasonably high prices for contract performance.

(3) An offer may be rejected if the contracting officer determines

the lack of balance poses an unacceptable risk to the Government.

15.504-2 Information to support proposal analysis.

(a) Field pricing assistance. (1) The contracting officer should

request field pricing assistance when the information available at the

buying activity is inadequate to determine a fair and reasonable price.

Such requests shall be tailored to reflect the minimum essential

supplementary information needed to conduct a technical or cost or

pricing analysis.

(2) Field pricing assistance generally is directed at obtaining

technical, audit, and special reports associated with the cost elements

of a proposal, including subcontracts. Field pricing assistance may

also include information relative to the business, technical,

production or other capabilities and practices of an offeror. The type

of information and level of detail requested will vary in accordance

with the specialized resources available at the buying activity and the

magnitude and complexity of the required analysis.

(3) When field pricing assistance is requested, contracting

officers are encouraged to team with appropriate field experts

throughout the acquisition process, including negotiations. Early

communication with these experts will assist in determining the extent

of assistance required, the specific areas for which assistance is

needed, a realistic review schedule, and the information necessary to

perform the review.

(4) When requesting field pricing assistance on a contractor's

request for equitable adjustment, the contracting officer shall provide

the information listed in 43.204(b)(5).

(5) Field pricing information and other reports may include

proprietary or source selection information (see 3.104-4 (j) and (k)).

Such information shall be appropriately identified and protected

accordingly.

(b) Reporting field pricing information. (1) Depending upon the

extent and complexity of the field pricing review, results, including

supporting rationale, may be reported directly to the contracting

officer orally, in writing, or by any other method acceptable to the

contracting officer.

(i) Whenever circumstances permit, the contracting officer and

field pricing experts are encouraged to use telephonic and/or

electronic means to request and transmit pricing information.

(ii) When it is necessary to have written technical and audit

reports, the contracting officer shall request that the audit agency

concurrently forward the audit report to the requesting contracting

officer and the administrative contracting officer (ACO). The completed

field pricing assistance results may reference audit information, but

need not reconcile the audit recommendations and technical

recommendations. A copy of the information submitted to the contracting

officer by field pricing personnel shall be provided to the audit

agency.

(2) Audit and field pricing information, whether written or

reported telephonically or electronically, shall be made a part of the

official contract file (see 4.807(f)).

(c) Audit assistance for prime or subcontracts. (1) The contracting

officer may contact the cognizant audit office directly, particularly

when an audit is the only field pricing support required. The audit

office shall send the audit report, or otherwise transmit the audit

recommendations, directly to the contracting officer.

(i) The auditor shall not reveal the audit conclusions or

recommendations to the offeror/contractor without obtaining the

concurrence of the contracting officer. However, the auditor may

discuss statements of facts with the contractor.

(ii) The contracting officer should be notified immediately of any

information disclosed to the auditor after submission of a report that

may significantly affect the audit findings and, if necessary, a

supplemental audit report shall be issued.

(2) The contracting officer shall not request a separate preaward

audit of indirect costs unless the information already available from

an existing audit, completed within the preceding 12 months, is

considered inadequate for determining the reasonableness of the

proposed indirect costs (41 U.S.C. 254d and 10 U.S.C. 2313).

(3) The auditor is responsible for the scope and depth of the

audit. Copies of updated information that will significantly affect the

audit should be provided to the auditor by the contracting officer.

(4) General access to the offeror's books and financial records is

limited to the auditor. This limitation does not

[[Page 26659]]

preclude the contracting officer or the ACO, or their representatives

from requesting that the offeror provide or make available any data or

records necessary to analyze the offeror's proposal.

(d) Deficient proposals. The ACO or the auditor, as appropriate,

shall notify the contracting officer immediately if the data provided

for review is so deficient as to preclude review or audit, or if the

contractor or offeror has denied access to any cost or pricing data

considered essential to conduct a satisfactory review or audit. Oral

notifications shall be confirmed promptly in writing, including a

description of deficient or denied data or records. The contracting

officer immediately shall take appropriate action to obtain the

required data. Should the offeror/contractor again refuse to provide

adequate data, or provide access to necessary data, the contracting

officer shall withhold the award or price adjustment and refer the

contract action to a higher authority, providing details of the

attempts made to resolve the matter and a statement of the

practicability of obtaining the supplies or services from another

source.

15.504-3 Subcontract pricing considerations.

(a) The contracting officer is responsible for the determination of

price reasonableness for the prime contract, including subcontracting

costs. The contracting officer should consider whether a contractor or

subcontractor has an approved purchasing system, has performed cost or

price analysis of proposed subcontractor prices, or has negotiated the

subcontract prices before negotiation of the prime contract, in

determining the reasonableness of the prime contract price. This does

not relieve the contracting officer from the responsibility to analyze

the contractor's submission, including subcontractor's cost or pricing

data.

(b) The prime contractor or subcontractor shall--

(1) Conduct appropriate cost or price analyses to establish the

reasonableness of proposed subcontract prices;

(2) Include the results of these analyses in the price proposal;

and

(3) When required by paragraph (c) of this subsection, submit

subcontractor cost or pricing data to the Government as part of its

price proposal.

(c) Any contractor or subcontractor that is required to submit cost

or pricing data also shall obtain and analyze cost or pricing data

before awarding any subcontract, purchase order, or modification

expected to exceed the cost or pricing data threshold, unless an

exemption in 15.503-1(b) applies to that action.

(1) The contractor shall submit, or cause to be submitted by the

subcontractor(s), cost or pricing data to the Government for

subcontracts that are the lower of either--

(i) $10,000,000 or more; or

(ii) Both more than the pertinent cost or pricing data threshold

and more than 10 percent of the prime contractor's proposed price,

unless the contracting officer believes such submission is unnecessary.

(2) The contracting officer may require the contractor or

subcontractor to submit to the Government (or cause submission of)

subcontractor cost or pricing data below the thresholds in paragraph

(c)(1) of this subsection that the contracting officer considers

necessary for adequately pricing the prime contract.

(3) Subcontractor cost or pricing data shall be submitted in the

format provided in Table 15-2 of 15.508.

(4) Subcontractor cost or pricing data shall be current, accurate,

and complete as of the date of price agreement, or, if applicable, an

earlier date agreed upon by the parties and specified on the

contractor's Certificate of Current Cost or Pricing Data. The

contractor shall update subcontractor's data, as appropriate, during

source selection and negotiations.

(5) If there is more than one prospective subcontractor for any

given work, the contractor need only submit cost or pricing data for

the prospective subcontractor most likely to receive award to the

Government.

15.504-4 Profit.

(a) General. This section prescribes policies for establishing the

profit or fee portion of the Government prenegotiation objective in

price negotiations based on cost analysis.

(1) Profit or fee prenegotiation objectives do not necessarily

represent net income to contractors. Rather, they represent that

element of the potential total remuneration that contractors may

receive for contract performance over and above allowable costs. This

potential remuneration element and the Government's estimate of

allowable costs to be incurred in contract performance together equal

the Government's total prenegotiation objective. Just as actual costs

may vary from estimated costs, the contractor's actual realized profit

or fee may vary from negotiated profit or fee, because of such factors

as efficiency of performance, incurrence of costs the Government does

not recognize as allowable, and the contract type.

(2) It is in the Government's interest to offer contractors

opportunities for financial rewards sufficient to stimulate efficient

contract performance, attract the best capabilities of qualified large

and small business concerns to Government contracts, and maintain a

viable industrial base.

(3) Both the Government and contractors should be concerned with

profit as a motivator of efficient and effective contract performance.

Negotiations aimed merely at reducing prices by reducing profit,

without proper recognition of the function of profit, are not in the

Government's interest. Negotiation of extremely low profits, use of

historical averages, or automatic application of predetermined

percentages to total estimated costs do not provide proper motivation

for optimum contract performance.

(b) Policy. (1) Structured approaches (see paragraph (d) of this

subsection) for determining profit or fee prenegotiation objectives

provide a discipline for ensuring that all relevant factors are

considered. Subject to the authorities in 1.301(c), agencies making

noncompetitive contract awards over $100,000 totaling $50 million or

more a year--

(i) Shall use a structured approach for determining the profit or

fee objective in those acquisitions that require cost analysis; and

(ii) May prescribe specific exemptions for situations in which

mandatory use of a structured approach would be clearly inappropriate.

(2) Agencies may use another agency's structured approach.

(c) Contracting officer responsibilities. (1) When the price

negotiation is not based on cost analysis, contracting officers are not

required to analyze profit.

(2) When the price negotiation is based on cost analysis,

contracting officers in agencies that have a structured approach shall

use it to analyze profit. When not using a structured approach,

contracting officers shall comply with paragraph (d)(1) of this

subsection in developing profit or fee prenegotiation objectives.

(3) Contracting officers shall use the Government prenegotiation

cost objective amounts as the basis for calculating the profit or fee

prenegotiation objective. Before the allowability of facilities capital

cost of money, this cost was included in profits or fees. Therefore,

before applying profit or fee factors, the contracting officer shall

exclude any facilities capital cost of money included in the cost

objective

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amounts. If the prospective contractor fails to identify or propose

facilities capital cost of money in a proposal for a contract that will

be subject to the cost principles for contracts with commercial

organizations (see subpart 31.2), facilities capital cost of money will

not be an allowable cost in any resulting contract (see 15.508(i)).

(4)(i) The contracting officer shall not negotiate a price or fee

that exceeds the following statutory limitations, imposed by 10 U.S.C.

2306(e) and 41 U.S.C. 254(b):

(A) For experimental, developmental, or research work performed

under a cost-plus-fixed-fee contract, the fee shall not exceed 15

percent of the contract's estimated cost, excluding fee.

(B) For architect-engineering services for public works or

utilities, the contract price or the estimated cost and fee for

production and delivery of designs, plans, drawings, and specifications

shall not exceed 6 percent of the estimated cost of construction of the

public work or utility, excluding fees.

(C) For other cost-plus-fixed-fee contracts, the fee shall not

exceed 10 percent of the contract's estimated cost, excluding fee.

(ii) The contracting officer's signature on the price negotiation

memorandum or other documentation supporting determination of fair and

reasonable price documents the contracting officer's determination that

the statutory price or fee limitations have not been exceeded.

(5) The contracting officer shall not require any prospective

contractor to submit breakouts or supporting rationale for its profit

or fee objective.

(6) If a change or modification calls for essentially the same type

and mix of work as the basic contract and is of relatively small dollar

value compared to the total contract value, the contracting officer may

use the basic contract's profit or fee rate as the prenegotiation

objective for that change or modification.

(d) Profit-analysis factors--(1) Common factors. Unless it is

clearly inappropriate or not applicable, each factor outlined in

paragraphs (d)(1) (i) through (vi) of this subsection shall be

considered by agencies in developing their structured approaches and by

contracting officers in analyzing profit, whether or not using a

structured approach.

(i) Contractor effort. This factor measures the complexity of the

work and the resources required of the prospective contractor for

contract performance. Greater profit opportunity should be provided

under contracts requiring a high degree of professional and managerial

skill and to prospective contractors whose skills, facilities, and

technical assets can be expected to lead to efficient and economical

contract performance. The subfactors in paragraphs (d)(1)(i) (A)

through (D) of this subsection shall be considered in determining

contractor effort, but they may be modified in specific situations to

accommodate differences in the categories used by prospective

contractors for listing costs--

(A) Material acquisition. This subfactor measures the managerial

and technical effort needed to obtain the required purchased parts and

material, subcontracted items, and special tooling. Considerations

include the complexity of the items required, the number of purchase

orders and subcontracts to be awarded and administered, whether

established sources are available or new or second sources must be

developed, and whether material will be obtained through routine

purchase orders or through complex subcontracts requiring detailed

specifications. Profit consideration should correspond to the

managerial and technical effort involved.

(B) Conversion direct labor. This subfactor measures the

contribution of direct engineering, manufacturing, and other labor to

converting the raw materials, data, and subcontracted items into the

contract items. Considerations include the diversity of engineering,

scientific, and manufacturing labor skills required and the amount and

quality of supervision and coordination needed to perform the contract

task.

(C) Conversion-related indirect costs. This subfactor measures how

much the indirect costs contribute to contract performance. The labor

elements in the allocable indirect costs should be given the profit

consideration they would receive if treated as direct labor. The other

elements of indirect costs should be evaluated to determine whether

they merit only limited profit consideration because of their routine

nature, or are elements that contribute significantly to the proposed

contract.

(D) General management. This subfactor measures the prospective

contractor's other indirect costs and general and administrative (G&A)

expense, their composition, and how much they contribute to contract

performance. Considerations include how labor in the overhead pools

would be treated if it were direct labor, whether elements within the

pools are routine expenses or instead are elements that contribute

significantly to the proposed contract, and whether the elements

require routine as opposed to unusual managerial effort and attention.

(ii) Contract cost risk. (A) This factor measures the degree of

cost responsibility and associated risk that the prospective contractor

will assume as a result of the contract type contemplated and

considering the reliability of the cost estimate in relation to the

complexity and duration of the contract task. Determination of contract

type should be closely related to the risks involved in timely, cost-

effective, and efficient performance. This factor should compensate

contractors proportionately for assuming greater cost risks.

(B) The contractor assumes the greatest cost risk in a closely

priced firm-fixed-price contract under which it agrees to perform a

complex undertaking on time and at a predetermined price. Some firm-

fixed-price contracts may entail substantially less cost risk than

others because, for example, the contract task is less complex or many

of the contractor's costs are known at the time of price agreement, in

which case the risk factor should be reduced accordingly. The

contractor assumes the least cost risk in a cost-plus-fixed-fee level-

of-effort contract, under which it is reimbursed those costs determined

to be allocable and allowable, plus the fixed fee.

(C) In evaluating assumption of cost risk, contracting officers

shall, except in unusual circumstances, treat time-and-materials,

labor-hour, and firm-fixed-price, level-of-effort term contracts as

cost-plus-fixed-fee contracts.

(iii) Federal socioeconomic programs. This factor measures the

degree of support given by the prospective contractor to Federal

socioeconomic programs, such as those involving small business

concerns, small business concerns owned and controlled by socially and

economically disadvantaged individuals, women-owned small businesses,

handicapped sheltered workshops, and energy conservation. Greater

profit opportunity should be provided contractors that have displayed

unusual initiative in these programs.

(iv) Capital investments. This factor takes into account the

contribution of contractor investments to efficient and economical

contract performance.

(v) Cost-control and other past accomplishments. This factor allows

additional profit opportunities to a prospective contractor that has

previously demonstrated its ability to perform similar tasks

effectively and economically. In addition, consideration should be

given to measures taken by the prospective contractor that result in

[[Page 26661]]

productivity improvements, and other cost-reduction accomplishments

that will benefit the Government in follow-on contracts.

(vi) Independent development. Under this factor, the contractor may

be provided additional profit opportunities in recognition of

independent development efforts relevant to the contract end item

without Government assistance. The contracting officer should consider

whether the development cost was recovered directly or indirectly from

Government sources.

(2) Additional factors. In order to foster achievement of program

objectives, each agency may include additional factors in its

structured approach or take them into account in the profit analysis of

individual contract actions.

15.505 Price negotiation.

(a) The purpose of performing cost or price analysis is to develop

a negotiation position that permits the contracting officer and the

offeror an opportunity to reach agreement on a fair and reasonable

price. A fair and reasonable price does not require that agreement be

reached on every element of cost, nor is it mandatory that the agreed

price be within the contracting officer's initial negotiation position.

Taking into consideration the advisory recommendations, reports of

contributing specialists, and the current status of the contractor's

purchasing system, the contracting officer is responsible for

exercising the requisite judgment needed to reach a negotiated

settlement with the offeror and is solely responsible for the final

price agreement. However, when significant audit or other specialist

recommendations are not adopted, the contracting officer should provide

rationale that supports the negotiation result in the price negotiation

documentation.

(b) The contracting officer's primary concern is the overall price

the Government will actually pay. The contracting officer's objective

is to negotiate a contract of a type and with a price providing the

contractor the greatest incentive for efficient and economical

performance. The negotiation of a contract type and a price are related

and should be considered together with the issues of risk and

uncertainty to the contractor and the Government. Therefore, the

contracting officer should not become preoccupied with any single

element and should 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.

(c) The Government's cost objective and proposed pricing

arrangement directly affect the profit or fee objective. Because profit

or fee is only one of several interrelated variables, the contracting

officer shall not agree on profit or fee without concurrent agreement

on cost and type of contract.

(d) If, however, the contractor insists on a price or demands a

profit or fee that the contracting officer considers unreasonable, and

the contracting officer has taken all authorized actions (including

determining the feasibility of developing an alternative source)

without success, the contracting officer shall refer the contract

action to a level above the contracting officer. Disposition of the

action should be documented.

15.506 Documentation.

15.506-1 Prenegotiation objectives.

(a) The prenegotiation objectives establish the Government's

initial negotiation position. They assist in the contracting officer's

determination of fair and reasonable price. They should be based on the

results of the contracting officer's analysis of the offeror's

proposal, taking into consideration all pertinent information including

field pricing assistance, audit reports and technical analysis, fact-

finding results, independent Government cost estimates and price

histories.

(b) The contracting officer shall establish prenegotiation

objectives before the negotiation of any pricing action. The scope and

depth of the analysis supporting the objectives should be directly

related to the dollar value, importance, and complexity of the pricing

action. When cost analysis is required, the contracting officer shall

document the pertinent issues to be negotiated, the cost objectives,

and a profit or fee objective.

15.506-2 Certificate of Current Cost or Pricing Data.

(a) When cost or pricing data are required, the contracting officer

shall require the contractor to execute a Certificate of Current Cost

or Pricing Data, using the format in this paragraph, and shall include

the executed certificate in the contract file.

Certificate of Current Cost or Pricing Data

This is to certify that, to the best of my knowledge and belief,

the cost or pricing data (as defined in section 15.501 of the

Federal Acquisition Regulation (FAR) and required under FAR

subsection 15.503-4) submitted, either actually or by specific

identification in writing, to the Contracting Officer or to the

Contracting Officer's representative in support of __________* are

accurate, complete, and current as of __________**. This

certification includes the cost or pricing data supporting any

advance agreements and forward pricing rate agreements between the

offeror and the Government that are part of the proposal.

Firm-------------------------------------------------------------------

Signature--------------------------------------------------------------

Name-------------------------------------------------------------------

Title------------------------------------------------------------------

Date of execution***---------------------------------------------------

* Identify the proposal, quotation, request for price

adjustment, or other submission involved, giving the appropriate

identifying number (e.g., RFP No.).

** Insert the day, month, and year when price negotiations were

concluded and price agreement was reached or, if applicable, an

earlier date agreed upon between the parties that is as close as

practicable to the date of agreement on price.

*** Insert the day, month, and year of signing, which should be

as close as practicable to the date when the price negotiations were

concluded and the contract price was agreed to.

(End of certificate)

(b) The certificate does not constitute a representation as to the

accuracy of the contractor's judgment on the estimate of future costs

or projections. It applies to the data upon which the judgment or

estimate was based. This distinction between fact and judgment should

be clearly understood. If the contractor had information reasonably

available at the time of agreement showing that the negotiated price

was not based on accurate, complete, and current data, the contractor's

responsibility is not limited by any lack of personal knowledge of the

information on the part of its negotiators.

(c) The contracting officer and contractor are encouraged to reach

a prior agreement on criteria for establishing closing or cutoff dates

when appropriate in order to minimize delays associated with proposal

updates. Closing or cutoff dates should be included as part of the data

submitted with the proposal and, before agreement on price, data should

be updated by the contractor to the latest closing or cutoff dates for

which the data are available. Use of cutoff dates coinciding with

reports is acceptable, as certain data may not be reasonably available

before normal periodic closing dates (e.g., actual indirect costs).

Data within the contractor's or a subcontractor's organization on

matters significant to contractor management and to the Government will

be treated as reasonably available. What is

[[Page 26662]]

significant depends upon the circumstances of each acquisition.

(d) Possession of a Certificate of Current Cost or Pricing Data is

not a substitute for examining and analyzing the contractor's proposal.

(e) If cost or pricing data are requested by the Government and

submitted by an offeror, but an exception is later found to apply, the

data shall not be considered cost or pricing data and shall not be

certified in accordance with this subsection.

15.506-3 Documenting the negotiation.

(a) The contract file shall document the principal elements of the

negotiated agreement. The documentation (e.g., price negotiation

memorandum (PNM)) shall include the following:

(1) The purpose of the negotiation.

(2) A description of the acquisition, including appropriate

identifying numbers (e.g., RFP No.).

(3) The name, position, and organization of each person

representing the contractor and the Government in the negotiation.

(4) The current status of any contractor systems (e.g., purchasing,

estimating, accounting, and compensation) to the extent they affected

and were considered in the negotiation.

(5) If cost or pricing data were not required in the case of any

price negotiation exceeding the cost or pricing data threshold, the

exception used and the basis for it.

(6) If cost or pricing data were required, the extent to which the

contracting officer--

(i) Relied on the cost or pricing data submitted and used them in

negotiating the price; or

(ii) Recognized as inaccurate, incomplete, or noncurrent any cost

or pricing data submitted; the action taken by the contracting officer

and the contractor as a result; and the effect of the defective data on

the price negotiated.

(7) A 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, and the

negotiated position. Where the determination of price reasonableness is

based on cost analysis, the summary shall address each major cost

element. When determination of price reasonableness is based on price

analysis, the summary shall include the source and type of data used to

support the determination.

(8) The most significant facts or considerations controlling the

establishment of the prenegotiation objectives and the negotiated

agreement including an explanation of any significant differences

between the two positions.

(9) To the extent such direction has a significant effect on the

action, a discussion and quantification of the impact of direction

given by Congress, other agencies, and higher-level officials (i.e.,

officials who would not normally exercise authority during the award

and review process for the instant contract action).

(10) The basis for the profit or fee prenegotiation objective and

the profit or fee negotiated.

(b) Whenever field pricing assistance has been obtained, the

contracting officer shall forward a copy of the analysis to the

office(s) providing assistance. When appropriate, information on how

advisory field support can be made more effective should be provided

separately.

15.507 Special cost or pricing areas.

15.507-1 Defective cost or pricing data.

(a) If, before agreement on price, the contracting officer learns

that any cost or pricing data submitted are inaccurate, incomplete, or

noncurrent, the contracting officer shall immediately bring the matter

to

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