Test Plan of Nuclear Regulatory Commission Pursuant to the Federal Acquisition Streamlining Act of 1994

OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy

Test Plan of Nuclear Regulatory Commission Pursuant to the

Federal Acquisition Streamlining Act of 1994

AGENCY: Office of Federal Procurement Policy (OFPP), OMB.

ACTION: Notice of test plan submitted by the Nuclear Regulatory

Commission (NRC) under the authority of section 5061 of the Federal

Acquisition Streamlining Act of 1994 (FASA).

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SUMMARY: Section 5061 of FASA allows the Administrator of OFPP to test

alternative and innovative procurement procedures at up to six

agencies. The total estimated life cycle cost for each test may not

exceed $100,000,000. NRC has submitted a plan pursuant to section 5061

to test a focused source selection procedure. The test entails a phased

process beginning with a streamlined procedure for identifying the most

competitive sources, followed by a proposal development and evaluation

effort involving the three most promising sources. NRC's test further

involves an intense negotiation process where efforts to reach

agreement are prioritized based on the strength of the offerors'

proposals.

Widespread public notice will be provided to announce each

acquisition conducted pursuant to this test. All interested parties

will be permitted to participate in the initial phase of any such

acquisition. Each contract awarded pursuant to this test will not

exceed $5 million in total value.

EFFECTIVE DATE: The test will begin on December 17, 1999.

FOR FURTHER INFORMATION CONTACT: Ms. Susan Hopkins, Contract Policy

Analyst, Division of Contracts and Property Management, U.S. Nuclear

Regulatory Commission, Mail Stop T7I2, Washington, DC 20555; E-Mail:

[email protected]; Telephone: 301-415-6514.

SUPPLEMENTARY INFORMATION: OFPP has authority under FASA section 5061

to conduct additional test programs. Agencies interested in

participating in a test program should contact Mr. Nathan Tash, Deputy

Associate Administrator for Procurement Innovation, Office of Federal

Procurement Policy, 725 17th Street, NW, Washington, DC 20503; E-Mail:

[email protected]; Telephone: 202-395-6167.

Dated: March 15, 1999.

Deidre A. Lee,

Administrator.

Attachment

U.S. Nuclear Regulatory Commission Innovation Test Plan for Focused

Source Selection Procedures (Federal Acquisition Streamlining Act

Section 5061)

I. Summary of the Test

The Nuclear Regulatory Commission (NRC) proposes to test a focused

source selection procedure under the FASA test authority. The procedure

has three primary components. The first component entails a streamlined

process for obtaining comments through the Internet on draft statements

of work and identifying the most promising interested sources. The

second involves a proposal development and evaluation effort involving

the three most highly rated sources. The third component involves an

intense negotiation process where the focus is prioritized based on the

ranking of the offerors. The efficiency of many of these processes will

be further enhanced through the use of electronic commerce (EC).

For selected acquisitions, NRC will solicit capability statements

from all interested sources and then request full proposals only from

the three sources rated most highly based on the capability statements.

NRC will employ the Internet to issue notices, draft statements of work

(SOW) and requests for proposals, as well as to receive responses from

offerors that can provide such electronically. NRC will negotiate

solely with the highest ranked offeror and will conduct negotiations

with the second ranked offeror only if agreement cannot be reached with

the highest ranked offeror. Similarly, negotiations with the third

ranked offeror will take place only if agreement cannot be reached with

either of the two higher ranked offerors. To maintain competitive

pressure, NRC would reserve the right to reopen negotiations with any

of the three offerors after having tried to negotiate a contract with

each of them.

By initiating competitions without the submission of formal

proposals, NRC believes it will be able to reduce the burden (both on

the government and interested sources) typically assoicated with

initially determining which sources are the most competitive. Because

the down select would be mandatory, NRC believes this initial screening

process will be more effective than the advisory, multi-step process

currently authorized by FAR Part 15. NRC further believes that the

three sources selected to compete further will have a strong incentive

to perform ``due diligence'' to learn about agency needs, to develop

more innovative high value solutions that can better fit with those

needs, and to offer stronger proposals.

NRC appreciates the benefits of competition generated by

simultaneous negotiations among the most highly rated offerors. At the

same time, NRC believes it may also be possible to obtain good deals

more efficiently and effectively by prioritizing the focus of its

negotiation efforts based on the ranking of these offerors. In most

cases, NRC anticipates that it will be able to reach agreement with the

top ranked offeror without having to undertake further effort. The test

will offer NRC an opportunity to examine if and when negotiating in a

successive (versus simultaneous) manner may result in an effective use

of those resources dedicated to contract negotiations.

II. Scope of the Test

The Division of Contracts and Property Management, Headquarters,

NRC will use focused source selection techniques to procure goods and

services, in the NRC's administrative program area. NRC decided to

focus on the administrative program area because NRC has not had the

same level of success applying existing streamlining measures to

administrative service requirements as it has to other program areas.

NRC will review procurement plans for Fiscal Year 2000 to determine

which procurements may be candidates for use of the innovation. Among

the considerations NRC will use in selecting procurements for the test,

NRC will consider the complexity of procurements and whether they

involve high proposal preparation cost that discourage capable sources

from participating. A project team of procurement policy and operations

staff from the Division of Contracts and Property Management (DCPM),

including those who participated in the development of the innovation,

will

[[Page 13824]]

make the initial review. Those procurements which are recommended for

the test program will be discussed in early planning meetings with

representatives from contracting, the requiring technical offices,

budget, and the NRC's Office of Small Business and Civil Rights. The

contracting officer will make the final selection of the procurements

for the test program.

III. Acquisition Strategy for the Test (Including a Description of (a)

How Procedures Under the Test Will Differ From Those Currently Used and

(b) the Activities Anticipated in the Various Phases of the Acquisition

Cycle Affected by the Test--e.g., Acquisition Planning,

Presolicitation, Solicitation, Evaluation, Award, Administration)

Soliciting and Making an Initial Assessment of Interested

Sources

Current process. Today, NRC publicizes notices of contracting

opportunities in the Commerce Business Daily (CBD) and invites

interested sources to obtain solicitations and submit proposals.

Offeror submissions, which include full cost and technical proposals,

are then evaluated by NRC to determine initially which sources are the

most competitive. For acquisitions of non-commercial administrative

services (e.g., research and development services), solicitations are

issued after a waiting period of 15 days. If the acquisition is in

excess of the simplified acquisition threshold, the solicitation will

provide a response time of not less than 30 days.

NRC has come to realize that there is great time and cost involved

in making an initial assessment of leading contenders based on full

cost and technical proposals. The multi-step selection process set

forth in the revised FAR Part 15 provides a helpful means for agencies

to reduce the burden associated with conducting initial screenings

(i.e., by requiring interested sources to limit their initial

submission to information on capabilities, experience, past

performance, and any additional area specified by the contracting

officer). However, Part 15 still permits a less competitive source to

require the agency to review a full proposal. This can be burdensome

and inefficient (for both parties).

Test process. Under the test, the NRC will still provide widespread

notice of its contracting opportunities. NRC will issue an abbreviated

notice with basic information about the planned procurement, make

available a draft SOW, request interested parties to provide capability

statements (e.g., past performance information and resumes) and invite

comments on the draft SOW. The posting will include simplified criteria

to be used by NRC to evaluate responses.

Specifically, interested parties will be required to provide the

following information:

(1) Name and address of company.

(2) Name, title, Internet address, telephone and fax numbers of person

providing information, and person authorizing submission of information

for the firm.

(3) EIN/TIN number.

(4) Qualifications of proposed personnel.

(5) List of (usually up to five) contracts performed by the

organizational unit of the firm/individual which is proposed to perform

the subject work for the NRC that are relevant to the proposed NRC

work. Interested parties will be asked to include:

a. contract number

b. brief description of the project

c. two contacts at the organization which awarded each contract

(6) Conceptual approach to performing the work.

(7) Additional information as necessary (e.g., conflict of interest,

type of software license).

Interested parties will be informed that their total response

excluding qualifications of proposed personnel, must not exceed text

which would fill five 8\1/2\ x 11 inch pages in WordPerfect or ASCII,

in no smaller than 10-point print. Oral presentations may be used in

lieu of written responses.

Because less detailed information is being sought, NRC will permit

response times as few as 15 days (rather than the 30 days typically

required for non-commercial goods and services above the SAT). A longer

period may be authorized by the NRC contracting officer, if warranted.

NRC will score each response based upon an evaluation of past

experience of the firm and proposed personnel in performing the same or

similar work. Only the three top ranked responses will be permitted to

proceed further in the competition. Those excluded from further

participation will save the wasted effort of developing proposals that

would not likely be selected. This process also should encourage more

participation by firms that have successfully performed in the private

sector, but because of the high cost, have not previously chosen to

compete for government contracts. NRC will save the time spent

evaluating detailed proposals when a simpler submission could

effectively permit the government to select those sources that are

likely to submit the most competitive offers.

NRC recognizes the growing benefit EC offers to improve the ease,

efficiency, and effectiveness of interactions between NRC and its

vendors.

Like other agencies, NRC has been making its notices of open market

contract opportunities above $25,000, that would otherwise be published

in the paper version of the CBD, available to the public free-of-charge

through ``CBDNet.'' Under the test, NRC will make its abbreviated

notices available through CBDNet. In addition, simultaneous to the

publication of these notices, NRC will post the draft SOW on the

``Contracting with the NRC'' Internet site. This posting will include a

``Summary Sheet for Solicitations'' with basic information about the

planned procurement and criteria for evaluating offeror's capabilities.

(As a general matter, the Internet site will provide ``help and

information'' including an explanation of the test procedures and a

glossary of terms.) Interested firms will be invited to submit

responses via the Internet, facsimile or in hard copy. Because

interested parties will be able to access a draft SOW electronically

through the NRC's Internet homepage at the same time the CBDNet notice

is posted, the 15-day waiting period described above will be

eliminated.

NRC is aware that a pilot effort is under way to test an electronic

posting system (EPS) that would distribute acquisition-related

information to industry more quickly and economically. That system is

designed to permit buyers to post solicitations and other pertinent

information, in addition to notices, directly to the Internet, thus

giving sellers access to this information through a single, government-

wide point of entry. NRC will consider migrating to EPS during the test

if it determines that EPS is capable of providing efficient and

effective access to acquisition-related information.

Issuance of Request for Proposals (RFPs), Proposal Submission,

and Evaluation

Current process. As noted above, all interested sources are offered

an opportunity to submit cost and technical proposals. This is also

true under the advisory, multi-step process currently authorized by FAR

Part 15.

Test process. Only the three top ranked respondents will be

provided an RFP (which will include the final SOW and all applicable

terms and conditions). The RFP will give each of these firms an

opportunity to submit a technical and cost proposal. The NRC

[[Page 13825]]

will score and rank these three responses using the evaluation criteria

that were included in the initial posting on the Internet.

Because only three sources will be offered the opportunity to

submit proposals, NRC believes these scores will have a strong

incentive to perform ``due diligence'' to work with NRC's integrated

product team, end-users, and others to learn about agency needs, to

more effectively and efficiently develop high value solutions that can

better fit with those needs, and to offer stronger proposals.

Negotiation and Award

Current process. Currently, if discussions are to be conducted, a

competitive range is established comprised of all of the most highly

rated proposals. Discussions are conducted by the contracting officer

with each offeror within the competitive range. The discussions are

tailored to each offeror's proposal.

Test process. NRC will negotiate with the offeror ranked highest

based on an integrated cost/technical assessment. If both parties are

unable to reach agreement, NRC may end negotiations with that firm and

begin negotiations with the next highest ranked firm. The NRC may re-

open negotiations with one or more firms if agreement cannot be reached

with one of the next highest ranked firms. If agreement cannot be

reached with any of the three firms, the solicitation will be canceled.

NRC recognizes that the recent rewrite of FAR Part 15 will better

focus the government's resources on obtaining the best value through a

more intensive negotiation process with those that are the most highly

rated. However, NRC believes it may also be possible to obtain good

deals by focusing its negotiation efforts on one offeror at a time,

beginning with the highest technically qualified offeror--trying to

reach agreement with that offeror. To maintain competitive pressure,

NRC would reserve the right to reopen negotiations with any of the

three offerors after having tried to negotiate a contract with each of

them. If agreement can be reached with the top ranked offeror without

having to undertake further negotiation, as NRC anticipate will often

be the case, NRC believes it may save time and administrative expense

in the negotiation process without sacrifices to the value received

under the contract. The test will offer NRC an opportunity to examine

if and when negotiating in this successive (versus simultaneous) manner

may hold benefit. For comparative purposes, NRC may also conduct, where

appropriate, simultaneous discussions with the three highest ranked

offerors for selected procurements.

IV. Test Objectives and Metrics

NRC expects to achieve time savings, cost savings, and increased

customer satisfaction through use of its focused source selection

procedures.

Time savings. Time savings will be measured by comparing overall

procurement acquisition lead times (i.e., the time that elapses from

the point when the procurement request is received in the procurement

office to the time of award) experienced prior to the test versus under

the test for similarly scoped acquisitions. If practicable, NRC will

attempt to identify time savings associated with key phases of the test

(e.g., identification of the three top ranked offerors, conduct of

negotiations).

Cost savings. Value received under contracts awarded under the test

will be compared to the value received under similarly scoped contracts

awarded prior to commencement of the test. Where a close match does not

exist, a comparison of individual categories of work and cost elements

will be made where feasible.

Customer satisfaction. A customer service survey will be used to

measure customers' (i.e., program offices') satisfaction. NRC is

currently developing a survey for general use. This survey will be

reviewed to determine if it is suitable for the test or needs to be

modified. In addition, NRC will survey participating organizations to

obtain their feedback.

Small business participation. Participation by small businesses in

test procurements will be compared with small business participation in

similar procurements conducted prior to the test innovation.

Participation will be measured by evaluating the value of prime

contract awards.

V. A List of Regulations, Including Those Required by Law, for Which a

Waiver is Necessary for the Successful Completion of the Test Program

NRC seeks to waive the following regulatory requirements.

1. For those cases where non-commercial contracts will result, the

time standards set forth in Federal Acquisition Regulation (FAR) 5.203,

which implements the Office of Federal Procurement Policy Act (41

U.S.C. 416(a)(3)) and the Small Business Act (15 U.S.C. 637(e)(3)) in

order to waive the 15-day period and structure a process which allows

for flexible deadlines for preparation and submission of materials by

interested parties.

2. FAR 5.207(c)(2)(xv), which implements the Office of Federal

Procurement Policy Act (41 U.S.C. 416(b)(4)) and the Small Business Act

(15 U.S.C. 637(f)(4)) which requires that Commerce Business Daily

notices include a statement that, ``all responsible sources may submit

a bid, proposal, or quotation (as appropriate) which shall be

considered by the agency.''

3. FAR 6.003, which defines ``full and open competition'' to mean

that all responsible sources are permitted to compete, implementing the

Office of Federal Procurement Policy Act (41 U.S.C. 403(6)), and FAR

6.101, implementing the policy of full and open competition set forth

in the Federal Property and Administrative Procedures Act (41 U.S.C.

253).

4. FAR 15.306(d), which requires negotiations with all offerors in

the competitive range implementing the Federal Property and

Administrative Procedures Act (41 U.S.C. 253b(d)(1)(A)).

5. FAR 15.306(c) which effectively requires consideration of cost

in making down select decisions.

VI. Anticipated Impact on Small Businesses, Particularly Small

Disadvantaged Businesses (Including a Description of Actions To Be

Taken To Mitigate Any Anticipated Negative Impacts)

Small businesses may better be able to compete because they will

have an opportunity to comment on the SOW, and they will not have to

expend large amounts of resources to determine if they are among the

three most highly ranked offerors. The NRC will continue to set aside

procurements exclusively for small businesses when conditions permit

after consultation with the NRC Office of Small and Disadvantaged

Business Utilization.

[FR Doc. 99-6854 Filed 3-19-99; 8:45 am]

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