organization, past performance, reputation for reliability, and availability, of the required facilities, and cost controls. § 3-3.5106 Conduct of evaluation. Personnel participating in any way in evaluating proposals shall not reveal any information concerning the evaluations underway except to an individual participating in the same evaluation proceedings, and then only to the extent that such information is required in connection with such proceedings. Divulging information during the evaluation, selection, and negotiation phases of the procurement to personnel not having a need to know could jeopardize any resultant award. The Contracting Officer will therefore instruct personnel participating in the evaluations to observe these restrictions and assure that personnel understand that unauthorized disclosure of information, no matter how innocent, could subject such personnel to disciplinary action. [40 FR 29722, July 15, 1975] § 3-3.5107 Competitive range. Unless an award is made without any discussions in accordance with § 33.5101, discussions shall be conducted with each offeror in the "competitive range." The competitive range is composed of those offerors with which there is a possibility of conducting meaningful discussions which could result in the improvement of their offers, price and other factors considered. Determining which proposals fall within a competitive range will depend upon the particular circumstances of each negotiation. Cost or price alone is sometimes controlling, but technical capability and other relevant criteria may be paramount. The decision as to which firms are and which firms are not within a competitive range is a matter of administrative discretion. There could conceivably be a business proposal in which the cost or price is so high that it seems to be completely out of the competitive range. However, before making such a determination the contracting officer should consult with the technical personnel to determine possible reasons for the apparently excessive price. In determining the competitive range, the contracting officer should consider the following: (a) A proposal must be considered to be within the competitive range unless it is either so inferior technically or so high in cost as to preclude any possibility of meaningful negotiation with the offeror, or unless the offeror does not have a reasonable chance of being selected for the final award. (b) The competitive range should be decided on the basis of the array of scores or relative ranking of the offerors, not on a predetermined absolute score or cut-off level of acceptability. Borderline proposals must not be excluded from consideration automatically if they are reasonably susceptible of being made acceptable by clarification or discussions. (c) No offeror who is in the competitive range shall be eliminated from the competitive range solely because of an offer to deliver services or supplies of a higher quality than required. If there is no substantial basis for distinguishing between the technical excellence of proposal(s) meeting the Government's requirements, price or best buy analysis should then become the controlling factor. [38 FR 2212, Jan. 23, 1973. Redesignated at 40 FR 29722, July 15, 1975] § 3-3.5108 Conduct of discussions. (a) The contracting officer, in cooperation with technical personnel, must conduct written or oral discussions (negotiations) of the work to be performed, the cost of the work, and other relevant topics with all those offerors within the competitive range. The contracting officer shall point out to each offeror the ambiguities, uncertainties, and deficiencies, if any, in its proposal. He shall then give each offeror a reasonable opportunity to support, clarify, correct, improve or revise its proposal. Discussions with one offeror shall neither identify areas in which another has apparently achieved a higher evaluation or provided more detail (nor transmit information) which could give one offeror a competitive advantage over another. Cost estimates made by the Government will not be disclosed. (b) Careful judgment will be exercised in determining the extent of discussions. In some cases more than one round of discussions with all the offerors within the competitive range may be required. The time available, the expense and administrative limitations, and the size and significance of the procurement should all be considered in deciding on the type, duration, and depth of the discussions. [38 FR 2212, Jan. 23, 1973. Redesignated at 40 FR 29722, July 15, 1975] § 3-3.5109 Closing of negotiations. In order to properly terminate negotiations, the contracting officer shall advise each offeror within the competitive range that (a) negotiations are being conducted, (b) offerors are being asked for "best and final offer," not merely to confirm or reconfirm prior offers, and (c) any revision or modification of proposals must be submitted by the cutoff date. [38 FR 2212, Jan. 23, 1973. Redesignated at 40 FR 29722, July 15, 1975] § 3-3.5110 Selection of contractor. (a) After the close of discussions and the receipt of any addenda to proposals, the contracting officer shall select for award the offeror(s) whose proposal(s) offers the greatest advantage to the Government, price and other factors considered. (b) Research and development contracts should be awarded to those organizations, including educational institutions, which have the highest competence in the specific field of science or technology involved. However, awards should not be made for research and development capabilities that exceed those needed for the successful performance of the particular project. (c) Whenever the contract is to have a fixed price, price may not be disregarded in selecting a contractor. This is particularly true where more than one acceptable offer from technically qualified sources remains for consideration after conduct of negotiations. If a lower-priced, lower-scored offer meets the Government's needs, acceptance of a higher-priced, higher-scored offer shall be supported by a specific determination by the contracting officer that the technical superiority of the higher-priced offer warrants the additional cost involved in the award of a contract to that offeror. [38 FR 2212, Jan. 23, 1973. Redesignated at 40 FR 29722, July 15, 1975] § 3-3.5111 Notice and debriefing. Promptly after award of the contract, notice of unsuccessful offerors will be given in accordance with HHSPR 3-3.103. [38 FR 2212, Jan. 23, 1973. Redesignated at 40 FR 29722, July 15, 1975] Subpart 3-3.52-Administrative Actions in Connection With Cost Overruns SOURCE: 42 FR 29872, June 10, 1977, unless otherwise noted. § 3-3.5200 Scope of subpart. This subpart sets forth the procedure to be followed when a cost overrun is anticipated, i.e., the allowable actual cost of performing a cost reimbursement type contract is expected to exceed the total estimated cost specified in the contract. § 3-3.5201 Applicability. (a) This subpart applies to the administration of cost reimbursement type contracts and the cost reimbursement portion of other types of contracts. (b) Nothing in this subpart shall be construed to relieve Contractors from compliance with the Limitation of Cost clause or any other provisions of such contracts. § 3-3.5202 General. Reimbursement for costs incurred under contracts referred to in § 33.5201 shall not exceed the amount of funds obligated by the contract, unless increased by the contracting officer. Cost overruns shall be held to an absolute minimum compatible with accomplishment of the statement of work. (a) Upon notification that a cost overrun is anticipated, the contracting officer shall request the contractor to submit a request for additional funds including: (1) Name and location of contractor. (2) Contract number and expiration date. (3) Contract item(s) and amount(s) of each creating the overrun. (4) The elements of cost which changed from the original estimate, i.e., labor, material, travel, overhead, etc. This data should be furnished in the following format: (i) Original estimate, (ii) Costs incurred to date, (iii) Estimated cost to completion, (5) The factors responsible for the increase, i.e., error in estimate, changed conditions, etc. (6) The latest date by which funds must be available for commitment to avoid contract slippage, work stoppage, or other program impairment. (b) When the contractor submits notice of an impending overrun the contracting officer shall: (1) Immediately advise the appropriate program office and furnish a copy of the notice and any other data received. (2) Request audit or cost advisory services and technical support, as necessary, for evaluation of information and data received. (3) Maintain continuous follow-up with the program office in order to obtain a timely decision as to whether the work under the contract will be continued and additional funds provided, or the contract terminated. The decision of the program office must be supported by an appropriate written statement and funding authority or a formal request for termination, when applicable. After a programming and funding decision is received from the program office the contracting officer shall promptly notify the contractor in writing that: (i) A specified amount of additional funds has been allotted to the contract by a contractual instrument; or (ii) work will be discontinued when the funds allotted to the contract have been exhausted and that any work performed after that date is at the contractor's risk; or (iii) the Government is considering whether additional funds should be allotted to the contract and will notify the contractor as soon as possible, but that any work performed after the funds then allocated to the contract have been exhausted is at the contractor's risk. Timely, formal notification of the Government's intention is essential in order to preclude loss of contractual rights in the event of dispute, termination, or litigation. (c) If program requirements permit, contracting officers should refrain from issuing any contractual documents which will require new work or an extension of time, pending resolution of an overrun or additional fund request. § 3-3.5203-3 Contract modifications. (a) Modifications (to contracts containing the Limitation of Cost clause) shall include either (1) A provision increasing the estimated or ceiling amount referred to in the Limitation of Cost clause of the contract and stating that the clause will thereafter apply in respect to such increased amount; or (2) A provision stating that the estimated or ceiling amount referred to in the contract is not changed by the modification and that the Limitation of Cost clause will continue to apply (a) All negotiated procurements are to be conducted competitively, as required by §§ 1-1.301-1, 1-1.302-1(b), and 1-3.101(d), unless there are compelling and convincing reasons and/or circumstances which justify a noncompetitive procurement. When a proposed procurement appears to be noncompetitive, that is, only one source has been identified, the procuring activity is responsible for ensuring that competition is definitely not feasible, and that positive actions are taken to avoid the need for subsequent or continuing noncompetitive procurements. These actions should include an analysis of the reasons and/or circumstances leading to the determination of why the noncompetitive procurement has resulted, and what steps can be initiated to preclude noncompetitive procurements in the future. (b) A noncompetitive procurement may also result from the submission of an unsolicited proposal. In this circumstance, the responsible program office may recommend that a noncompetitive procurement be made to the submitting organization or individual to perform work or services. This recommendation must be in writing and prepared in the "Justification for Acceptance of Unsolicited Proposal" format, as required by § 3-4.910, setting forth the information required by §§ 1-4.909(d) and 1-4.910(b). The "Justification for Acceptance of Unsolicited Proposal" is used in place of the "Justification for Noncompetitive Procurement." Negotiations with a source that has submitted an acceptable unsolicited proposal shall not be initiated until approval is obtained in accordance with this subpart. § 3-3.5302 Exceptions. The provisions of this subpart apply to all negotiated procurements except: (a) Procurements of $500, or less (see § 3-3.603-50(a)); (b) Procurements of professional services; e.g., for physician, veterinarian, dentist, or legal services negotiated under the authority of 41 U.S.C. 252(c)(4), or where the foregoing kinds of services are for $10,000 or less and are negotiated under 41 U.S.C. 252(c)(3) (see § 3-3.603-50(b)(4)); (c) Procurement of architect-engineer services (see §§ 1-4.10 and 3-4.10); (d) Procurements of utility services where the services are available from only one source; and (e) Acquisitions from or through other Federal Government agencies; e.g., interagency agreements, and contracts with the Small Business Administration pursuant to section 8(a) of the Small Business Act. The criteria provided below are to be used in determining whether a proposed noncompetitive procurement is justifiable. The critical question to be answered in each justification is why the opportunity to meet a procurement requirement cannot be made available to more than one source. It is critical to the justification of a noncompetitive procurement that reasonable, informed opinions, which are supported by available facts, be provided. Each of the criteria is illustrative of possible reasons. The more facts that are offered and the more knowledgeable the opinions about the marketplace are, the greater is the support to conclude that a noncompet itive procurement is justified. If the contracting officer or the approving official concludes that the support offered to justify a noncompetitive procurement is not convincing, or where there is some unresolved doubt, a sources sought synopsis should be issued to test the marketplace. (The term "sources sought synopsis," as used in this subpart, means the type of synopsis specified in § 1-1.10037(b)(7). When the requirement is for other than research and development, the notice in § 1-1.1003-7(b)(7) should be appropriately modified to describe the specific type of service or item to be procured. The sources sought synopsis does not permit potential sources to request solicitations and, therefore, is merely an opportunity for the marketplace to indicate its interest in submitting bids, offers, or quotations for a future procurement.) If there is only one source identified as a result of the sources sought synopsis, this data may be used to support a justification for noncompetitive procurement. As each justification for noncompetitive procurement is reviewed against the following criteria, the reviewer should ask: why the procurement cannot be competed, are there sufficient grounds for excluding all other actual or potential offerors, what action can be taken to obtain competition in the instant procurement, and what action is needed to avoid the need for a subsequent or a continued noncompetitive procurement? Each applicable criterion cited below should be addressed in the justification, and specific rationale supporting each criterion must be provided. (a) There is only one source in existence which can perform the contract requirements. The existence of one source for the purposes of this regulation should be a matter of fact, and not a matter dependent upon the relative and limited knowledge of sources known by the project or contracting officers. This criterion may not be used to justify a noncompetitive procurement prior to testing the marketplace by issuing a sources sought synopsis. If no new sources submit responses to the sources sought synopsis, this data may be used to support a justification for noncompetitive procurement. (b) One source controls copyrights, patent rights, trade secrets, technical data, secret processes, or other proprietary data which are essential to the performance of the contract requirements; the source refuses to license or otherwise make the foregoing data available to other sources; and the requirement cannot be revised to allow other sources to compete who do not have access to the foregoing data. Factual information should be provided to support the use of this criterion, such as the citation of copyrights, exactly what is covered by the copyright or other data which is necessary to the contract performance, and why the requirement cannot be revised to permit competition. The mere existence of the rights does not in and of itself justify noncompetitive procurement. It must be shown that the Government cannot meet its requirement(s) without the use of the proprietary data. Any doubts should be resolved by summarizing the procurement requirement and issuing a sources sought synopsis. If no new sources submit responses to the sources sought synopsis, this data may be used to support a justification for noncompetitive procurement. (Note: When this criterion is to be used, the contracting officer is required to obtain legal advice from OGC-BAL.) (c) One source or individual has a truly unique idea, approach, or equipment which has no like or equal, and this represents the only known item which can meet the Government's needs. (Unsolicited proposals are excluded from the provisions of this paragraph and shall be processed in accordance with §§ 1-4.9 and 3-4.9.) Except in very rare cases, the fact that a proposer submits a proposal containing a unique idea or approach does not, in itself, justify noncompetitive procurement. Mere claims of uniqueness must not be cited in justifications to deviate from the competitive process. There may be other potential sources with equally suitable approaches or ideas which could accomplish the same end results. Except in cases which are convincingly supported by a panel opinion or a consensus |