and materials contract, continuing consideration should be given to converting to another type of contract as early in the performance period as practicable. § 18-3.804 Evaluation of proposals. § 18-3.804-1 General. Evaluation of proposals by all personnel concerned with the procurement will be completed expeditiously. The evaluation of proposals received may be accomplished in a number of different ways. The various methods of evaluation used by NASA, together with policies and procedures regarding their use, are set forth in §§ 18-3.804-2 and 183.804-3. § 18-3.804-2 Evaluation procedures not involving source evaluation board. The evaluation procedures set forth in paragraphs (a) through (d) shall be utilized except where the procedures set forth in § 18-3.804-3 apply. (a) Responsibility of officer. (See § 18-3.801-2). contracting (b) Technical evaluation. Generally, procurement personnel are not qualified to evaluate proposals from a technical viewpoint and must rely on scientific and engineering personnel for this function. In research and development contracting, awards should usually be made to those companies that have the highest competence in the specific field of science or technology involved, although awards should not be made on the basis of research and development capabilities that exceed those needed for the successful performance of the work. It is imperative therefore that technical evaluations and recommendations be fully documented and reviewed by responsible personnel. Technical evaluation should include the following: (1) The contractor's understanding of the scope of the work as shown by the (5) The contractor's willingness to devote his resources to the proposed work with appropriate diligence; and (6) The contractor's proposed method of achieving the reliability required. In making this evaluation, technical personnel may be given access to portions of the business proposals upon request. After evaluation and preparation of written recommendations as to selection of source by the technical personnel, proposals shall be returned to the negotiator. The contracting officer is responsible for reviewing the justification in support of the recommendations of technical personnel to determine that the justification is adequate and that the documentation is complete. (c) Business evaluation (1) Price and cost analysis. Each proposal requires some form of price or cost analysis. The contracting officer must exercise judgment in determining the extent of analysis in each case. On high-dollar value procurements, particularly where effective competition has not been obtained, the analysis should be thorough, and the record carefully docu mented to disclose the extent to which the various elements of costs, fixed fee, or profit contained in the contractor's proposals were analyzed. The negotiation memorandum should also reflect the consideration given to the recommendations of the price analyst and the basis for nonacceptance or departure from the recommendations during the course of negotiations. (2) Other factors. The contracting officer must appraise the management capability of the offeror to perform the required work in a timely manner. In making this appraisal, he must consider such factors as the company's management organization, past performance, reputation for reliability, and availability of the required facilities, manpower, and financial resources. scientific and technical approach pro- § 18-3.804-3 Evaluation procedures posed; (2) Availability and competence of experienced engineering, scientific, or other technical personnel; (3) Availability of necessary research, test, and production facilities; (4) Experience or pertinent novel ideas in the specific branch of science or technology involved; use of source evaluation board. (a) Source Evaluation Board procedures are appropriate for competitively negotiated procurements, except Architect-Engineer services and contracts for which the procedures have been specifically waived when: (1) The estimated cost of the contract will exceed $1,000,000; (2) Determination that the prospective contractor is responsible, including completion of pre-award surveys where required; (2) The estimated cost of the contract will not exceed $1,000,000, but it is likely that the source selected will receive other contracts for later phases of the same project which, cumulatively, would total more than $1,000,000. (Examples of this category include feasibility studies and project definition contracts under approved programs or programs for which approval will be requested.); or (3) A Source Selection Official determines the use of the Source Evaluation Board procedures are desirable. (b) The detailed procedures regarding the designation and operation of Source Evaluation Boards are set forth in NPC 402. § 18-3.804-4 Disclosure of information prior to selection of contractor. During the course of evaluation proceedings, whether or not a Source Evaluation Board is utilized, NASA personnel participating in any way in evaluating proposals shall not reveal any information concerning the evaluation under way to anyone who is not also participating in the same evaluation proceedings, and then only to the extent that such information is required in connection with such proceedings. When other Government or Jet Propulsion Laboratory personnel participate in evaluation proceedings, they will be instructed to observe these restrictions. Following selection of a contractor, information will be provided to unsuccessful offerors in accordance with § 18-3.106-3. § 18-3.805 Conduct of negotiations. § 18-3.805-1 General. (a) After evaluation of proposals written or oral discussions shall be conducted with all responsible offerors who submit proposals within a competitive range, price and other factors considered, in accordance with § 18-3.102(a), and due attention will be given to the factors cited in § 18-3.102(b). (b) Procurement personnel, as well as other personnel concerned with the procurement, shall ensure that contract negotiations are completed expeditiously. However, all details of the negotiation must be completed before the contract is actually placed. This includes, to the extent applicable: (1) Arrangements regarding Government-furnished property; (3) Arrangements with other Government agencies for the use of facilities under their control; (4) Where the contract will be administered by another Government agency, any necessary arrangements with the responsible activity of that agency; and (5) Where the contract will involve access to classified information, verification that required security clearance has been obtained. (6) The requirement for the furnishing of data by the contractor in the performance of the contract, both for techpetitive reprocurement where follow-on nical evaluation purposes and for comtions where the appropriate technical procurement is probable, in those situaoffice has requested that the contracting officer obtain such data. technical data marked with a restrictive (7) If the offeror's proposal contains legend, whether the Government desires rights to use such data (§§ 18-3.109 and 18-9.202-6). (c) Whenever negotiations are conducted with more than one offeror, no indication shall be made to any offeror of a price which must be met to obtain further consideration since such practice must be avoided. After receipt of proconstitutes an auction technique which posals, no information regarding the number or identity of the offerors participating in the negotiations shall be made available to the public or to anyone whose official duties do not require such knowledge (see § 18-1.1050 of this chapter). Whenever negotiations are conducted with several offerors, while such negotiations may be conducted successively, all offerors selected to participate in such negotiations (see paragraph (a) of this section) shall be offered an equitable opportunity to submit such price, technical, or other revisions in their proposals as may result from the negotiations. All such offerors shall be informed of the specified date (and time if desired) of the closing of negotiations and that any revisions to their proposals must be submitted by that date. All such offerors shall be informed that any revision received after such date shall be treated as a late proposal in accordance with the "Late Proposals" provisions of the request for proposals. (d) In selecting the contractor for a cost-reimbursement type contract, estimated costs of contract performance and proposed fees should not be considered as controlling, since in this type of contract advance estimates of cost may not provide valid indicators of final actual costs. There is no requirement that cost-reimbursement type contracts be awarded on the basis of either (1) the lowest proposed cost, (2) the lowest proposed fee, or (3) the lowest total estimated cost plus proposed fee. This is not to say that potential contract cost is to be ignored. Potential costs should be based on what knowledge can be derived of the costliness of a particular contractor's operations and should not rely principally on the contractor's submitted cost estimate. The award of costreimbursement type contracts primarily on the basis of estimated costs may encourage the submission of unrealistically low estimates and increase the likelihood of cost overruns. The cost estimate is important to determine the prospective contractor's understanding of the project and ability to organize and perform the contract. The agreed fee must be within the limits prescribed by law and regulation and appropriate to the work to be performed (see § 18-3.808). Beyond this, however, the primary consideration in determining to whom the award shall be made is which contractor can perform the contract in a manner most advantageous to the Government. § 18-3.806 Cost, profit, and price relationships. (a) Where products are sold in the open market, costs are not necessarily the controlling factor in establishing a particular seller's price. Similarly, where competition may be ineffective or lacking, estimated costs plus estimated profit are not the only pricing criteria. In some cases, the price appropriately may represent only a part of the seller's cost and include no estimate for profit or fee, as in research and development projects where the contractor is willing to share part of the costs. In other cases, price may be controlled by competition as set forth in § 18-3.805-1. The objective of the contracting officer shall be to negotiate fair and reasonable prices in which due weight is given to all relevant factors, including those in § 18-3.102. (b) Profit or fee is only one element of price and represents a much smaller proportion of the total price than do such other estimated elements as labor and material. While the public interest requires that excessive profits be avoided, the contracting officer should not become so preoccupied with particular elements of a contractor's estimate of cost and profit that the most important consideration, the total price itself, is distorted or diminished in its significance. Government procurement is concerned primarily with the reasonableness of the price which the Government ultimately pays, and only secondarily with the eventual cost and profit to the contractor. 18-3.807-2 Requirement for price or cost analysis. (a) General. Some form of price or cost analysis should be made in connection with every negotiated procurement action. The presence of adequate price competition, however, limits considerably the degree of analysis required. Cost data need not be requested when the contracting officer anticipates that there will be adequate price competition. However, if he determines, after proposals have been submitted, that there is not, in fact, adequate price competition, cost data may then be requested, unless there are other bases (e.g., pricing data) available for evaluating the reasonableness of the quoted price. When there is not adequate price competition and cost analysis is necessary, the extent of the analysis should be limited to that necessary to establish a sound basis for negotiation, taking into consideration the amount of the proposed contract and the cost and time needed to accumulate the necessary data for analysis. (b) Price analysis. (1) Price analysis is the process of examining and evaluating a prospective price by the use of price data, not including a contractor's or subcontractor's cost data. Price analysis may be accomplished in various ways including the following: (b) The reasonableness of amounts estimated for the necessary costs; (c) Allowances for contingencies; (d) The basis used for allocation of overhead costs and the reasonableness of contractor's sales forecast and the pool of indirect expenses associated with the cost of those sales; and (e) The appropriateness of allocations of particular overhead costs to the pro (i) The comparison of the price quo- posed contract. tations submitted; (ii) The comparison of prior quotations and contract prices with current quotations for the same or similar end items (to provide a suitable basis for comparison, appropriate allowances must be made for differences in such factors as specifications, quantities ordered, time for delivery, Government-furnished materials, and the general level of business and prices); (iii) The use of rough yardsticks (such as dollars per pound, per horsepower, or other units) to point up apparent gross inconsistencies which should be subjected to more intensive pricing inquiry; (iv) The comparison of prices set forth in published price lists issued on a competitive basis, published market prices of commodities and similar indicia, together with discount or rebate arrangements; and (v) The comparison of proposed prices with estimates of costs independently developed by personnel within the purchasing activity. (2) Price analysis, without resort to cost analysis, may be used to support the reasonableness of awards when there is (2) Among the evaluations that should be made where the necessary data is available, are comparisons of a contractor's or offeror's current estimated costs with: (i) Actual costs previously incurred by the contractor or offeror; (ii) His last prior cost estimate for the same or similar item or a series of prior estimates; (iii) Current cost estimates from other possible sources; and (iv) Prior estimates or historical costs of other contractors manufacturing the same or similar items. (3) Forecasting future trends in costs from historical cost experience is of primary importance in pricing. In periods of either rising or declining costs, an adequate cost analysis must include some evaluation of the trends. In costs involving production of recently developed, complex equipment, even in periods of relative price stability, trend analysis of basic labor and materials costs should be undertaken. Similarly, in contracts extending over a period of several years, a budgeted overhead forecast should be obtained for the life of the contract. adequate price competition or when price § 18-3.807-3 Cost and pricing data. analysis in accordance with subparagraph (1) of this paragraph, by itself, provides a reasonable basis for award. (c) Cost analysis. (1) Cost analysis, as distinguished from price analysis, is the process of: (i) Obtaining a breakdown of cost from prospective contractors or subcontractors; (ii) The appropriate verification of cost data; (iii) The evaluation of specific elements of costs; and (iv) The projection of this data to determine the effect on prices of such factors as (a) The necessity for certain costs; (a) When there is adequate price competition, cost data need not be requested. However, in the absence of adequate price competition or other basis for assuring reasonableness of price, the negotiating team must analyze the contractors' proposals and must be in possession of accurate, complete, and current cost or pricing data before decisions are made on contract prices. Accordingly, the contractor should be required to furnish such data promptly as it becomes available throughout the negotiation process. (b) Title 10 U.S.C. Section 2306 (f) (PL 87-653, September 10, 1962) requires that, in certain cases, contractors and subcontractors certify as to the accuracy, completeness, and currency of cost or pricing data submitted to the Government in support of contract negotiations and price adjustments and prescribes that any prime contract, or change or modification thereunder, under which a certificate is required, will contain a provision that the price, including profit or fee, will be adjusted to exclude any significant sums by which such price was increased because the contractor, or any subcontractor required to furnish such a certificate, furnished cost or pricing data which was inaccurate, incomplete, or noncurrent. (c) Contracting officers shall require contractors and subcontractors to submit, in the situations described below, accurate, complete, and current cost or pricing data and to certify, using the certificate form set forth in paragraph (b) of the Contractor and Subcontractor Cost or Pricing Data clause set forth in § 18-3.807-4, as to the accuracy, completeness, and currency of such data, except where the price or price adjustment is based on adequate price competition, as determined by the contracting officer, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation prior to: (1) The award of any negotiated prime contracts where the price is expected to exceed $100,000; (2) The pricing of any change or modification to a prime contract, both formally advertised and negotiated, where the price adjustment is expected to exceed $100,000; (3) The award of any subcontract at any tier where the prime contractor and each higher tier subcontractor have been required to furnished a certificate, if the price of such subcontract is expected to exceed $100,000; and (4) The pricing of any change or modification to a subcontract for which the price adjustment is expected to exceed $100,000 and where the prime contractor and each higher tier subcontractor have been required to furnish a certificate. (d) The requirement for submission and certification of data may be waived in exceptional cases where the Administrator, NASA, authorizes it through a written determination in accordance with § 18-3.302(c). (e) Where it is reasonably expected that a resulting contract will be in excess of $100,000, the request for proposals shall include, in addition to the information required by § 18-3.802-3(a), the Contractor and Subcontractor Cost or Pricing Data clause set forth in § 183.807-4. Offerors will be advised that pursuant to the provisions of 10 U.S.C. 2306(f), the successful contractor will be required to certify (using the form of certificate set forth in paragraph (b) of the Contractor and Subcontractor Cost or Pricing Data clause); except where the price negotiated is based on adequate price competition, as determined by the contracting officer, or established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation; that the cost or pricing data which he is required to furnish is accurate, complete, and current. (f) The certificate required to be submitted by a contractor under the provisions of the Contractor and Subcontractor Cost or Pricing Data clause shall be obtained immediately prior to agreement on the related negotiated price or price adjustment. § 18-3.807-4 Contractor and subcontractor cost or pricing data clause. The following clause shall be inserted in all contracts over $100,000 and in all contract modifications over $100,000 even though the original amount of the contract is $100,000 or less: CONTRACTOR AND SUBCONTRACTOR COST OF PRICING DATA (NOVEMBER 1962) (a) (1) The Contractor shall require, under the situations described in (2) below, unless exempted under the exceptions set forth in (3) below, each subcontractor under this contract to submit cost or pricing data and to certify that, to the best of his knowledge and belief, such cost or pricing data are accurate, complete, and current. (2) The cost or pricing data called for under (1) above shall be submitted prior to (1) the award of each subcontract the price of which is expected to exceed $100,000 and (ii) the pricing of each change or modification to a subcontract under this contract for which the price adjustment is expected to exceed $100,000. |