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ernment's interest, the contracting officer should consider a mutual agreement with the contractor to suspend performance on a no-cost basis.

[35 FR 1236, Jan. 30, 1970]

§ 1-2.408 Information to bidders.

(a) (1) Where award is made to other than the low bidder, the contracting activity shall as a minimum notify the unsuccessful lower bidders promptly of the fact that their bids were rejected. Where the contracting officer has reason to believe that an unsuccessful lower bidder may protest the rejection of his bid, the notification to the bidder also should state in general terms the reason for rejection.

(2) Notification of rejection also shall be given to any unsuccessful higher bidder where the circumstances were such that he may have had reason to believe he might receive an award, e.g., the bidder was requested to extend his bid acceptance time or clarify his bid, or the bidder knew that his bid was the lowest received by bid opening time (but the lower successful bid was received late).

(3) In addition to the requirements of paragraphs (a) (1) and (2) of this section, notification of rejection should be given to all other unsuccessful bidders when feasible.

(b) Notification to unsuccessful bidders may be accomplished either orally, or in writing through the use of a form postal card, self-mailer, or other appropriate means. When giving such notification, the contracting activity also should extend to each bidder its appreciation for the interest the bidder has shown in submitting a bid.

(c) If additional information is requested by unsuccessful bidders, the contracting activity shall furnish them with the name and address of the successful bidder, together with the contract price, and should also inform them as to the location where a copy of the abstract of bids is available for inspection. However, when numerous awards have been made and furnishing such information would require so large an amount of work as to interfere with the normal operations of the contracting activity, only information concerning the location of the abstract

of bids need be given. In addition, if the request is made by an unsuccessful bidder whose bid price was lower than that of the successful bidder, suffi cient information shall be furnished in the reply to fully explain the basis for the award.

(d) If a request is received from an inquirer who is neither a bidder nor a representative of a bidder, the purchasing activity may furnish the names of the successful bidders and, if requested, the prices at which awards were made. However, where the furnishing of this information in response to such requests would unduly interfere with the normal operations of the purchasing activity, the inquirer will be advised where a copy of the abstract of bids is available for inspection.

[30 FR 9593, July 31, 1965]

§ 1-2.409 Synopses of contract awards. See § 1-1.1004.

Subpart 1-2.5-Two-Step Formal Advertising

§ 1-2.501 General.

(a) Two-step formal advertising is a method of procurement designed to promote the maximum competition practicable when available specifications are not sufficiently definite to permit a formally advertised procurement in accordance with Subparts 12.2, 1-2.3, and 1-2.4. It is a flexible procedure and is especially useful, in procurement of complex and technical items, to prevent the elimination of potentially qualified producers from the competitive base.

(b) Two-step formal advertising is conducted in two phases. The first step consists of the request for, and the submission, evaluation, and, if necessary, discussion of a technical proposal, without pricing, to determine the acceptability of the supplies or services offered. As used in this context, the word "technical" has a broad connotation and, among other things, includes engineering approach, special manufacturing processes, and special testing techniques. Also, when required to clarify basic technical requirements, other related require

ments such as management approach, manufacturing plan, or facilities to be utilized may be clarified in this step. The second step consists of a formally advertised procurement, confined to those offerors who submitted an acceptable technical proposal in Step One.

(c) This method of procurement requires that the contracting officer work closely with technical personnel and rely on their specialized knowledge in determining the technical requirements of the procurement and the criteria to be used in evaluating technical proposals, and in making such evaluation. An objective of the two-step procedure is to permit the development of a sufficiently descriptive statement of the Government's requirements, including the development of a technical data package, so that subsequent procurements may be made by conventional formal advertising.

§ 1-2.502 Conditions for use.

The two-step formal advertising method of procurement may be used when its use has been approved at a level higher than the contracting office and when all of the following . conditions are present:

(a) Available specifications or purchase descriptions are not sufficiently definite or complete to permit full and free competition without engineering evaluation and necessary discussion of the technical aspects of the requirement to insure mutual understanding between each source and the Government.

(b) Definite criteria exist for evaluating technical proposals, such as applicable design, manufacturing, testing, and performance requirements, and special requirements for operational suitability and ease of maintenance; however, such criteria shall not include consideration of capacity or credit as defined in § 1-1.708 of this chapter.

(c) More than one technically qualified source is expected to be available both initially and after technical evaluation.

(d) A firm fixed-price contract or a fixed-price contract with escalation (see § 1-2.201(a)(21)) will be used.

§ 1-2.503 Procedures.

§ 1-2.503-1 Step One.

(a) Requests for technical proposals. A request for technical proposals shall be distributed to qualified sources in accordance with § 1-1.302-1 of this chapter. In addition, the request shall be synopsized in accordance with Subpart 1-1.10 and publicly posted in accordance with § 1-2.203-2. The request may be in the form of a letter and shall contain, as a minimum, the following information:

(1) The best practicable description of the supplies or services required.

(2) Notification of the intent to conduct the procurement in two steps and the actions involved.

(3) The requirements of the technical proposal, i.e., the necessary details such as drawings, data, presentation, etc., to be submitted.

(4) The criteria for evaluating the technical proposal (§ 1-2.502(b)).

(5) A statement that the technical proposals shall not include prices or pricing information.

(6) The date by which the proposal must be received.

(7) A statement that the Government may discuss the technical aspects of the proposal with the concern submitting the proposal.

(8) A statement that in the second step of the procurement only bids based upon technical proposals determined to be acceptable, either initially or as a result of discussions, will be considered for award; and that each bid in the second step must be based on the bidder's own technical proposal.

(9) A statement that sources submitting unacceptable technical proposals will be so notified upon completion of the technical evaluation.

(10) A statement either that only one technical proposal may be submitted by each offeror or that multiple technical proposals may be submitted. When compliance with specifications permit utilization of essentially different technical approaches, it is generally in the interest of the Government to authorize the submission of multiple proposals. If multiple proposals are authorized the request shall include a statement substantially as follows:

Multiple Technical Proposals. In the first step of this two-step procurement, offerors are authorized and encouraged to submi multiple technical proposals presenting dif ferent basic approaches. Each technical proposal submitted will be separately evaluated and the offeror will be notified as to its acceptability.

(b) Receipt and evaluation of technical proposals. The following actions will be taken with respect to receipt and evaluation of technical proposals:

(1) Every precaution shall be taken to safeguard technical proposals against disclosure to unauthorized per


(2) Any reference to price or cost will be removed.

(3) Technical evaluation of the proposals will be based upon the criteria contained in the request for technical proposals and such evaluation will not include consideration of capacity or credit as defined in § 1-1.708.

(4) Technical proposals will be categorized as acceptable or unacceptable. Proposals will not be categorized as unacceptable when a reasonable effort on the part of the Government could bring the proposals to an acceptable status and increase competition. The contracting officer shall arrange for any necessary discussions with sources submitting technical proposals for the purpose of obtaining additional information or clarification which may be required. When, after discussion and submission of necessary information and clarification, technical proposals are determined to be acceptable, they will be so categorized. If, however, it is determined at any time that a technical proposal is not reasonably susceptible to being made acceptable, it should be classified as unacceptable and no discussions of it need thereafter be initiated.

(5) Upon final determination that a technical proposal is unacceptable, the contracting officer shall notify the source submitting the proposal of that fact. The notice shall indicate, in general terms the basis for such determination including a statement of whether rejection was based on failure to furnish sufficient information or an unacceptable engineering approach. (c) [Reserved]

(d) Discontinuance. If, as a result of the evaluation of technical proposals,

it appears necessary to discontinue the two-step advertising method of procurement, the full facts and circumstances will be set forth in writing and submitted to the office which originally approved the method of procurement. If that office approves the discontinuance, each source will be notified in writing of the discontinuance and the reasons therefor.

§ 1-2.503-2 Step Two.

Upon completion of Step One, a formally advertised procurement in accordance with Subparts 1-2.2, 1-2.3, and 1-2.4 will be conducted, except that invitations for bids

(a) Will be issued only to and considered only from those sources whose technical proposals have been evaluated and determined to be acceptable under Step One.

(b) Will include the following statement:

This invitation for bids is issued pursuant to two-step formal advertising procedures in subpart 1-2.5 of the Federal Procurement Regulations. Bids will be considered only from those firms who have submitted acceptable technical proposals pursuant to the first step of such procedures as initiated by (Identify the re

quest for technical proposals) Any bidder who has submitted multiple technical proposals in the first step of this two-step procurement may submit a separate bid covering each technical proposal which has been determined acceptable by the Government.

(c) Will prominently state that the supplies or services to be procured will be in accordance with the specifications and the bidder's technical proposal, as finally accepted, under the request for technical proposals. This may be accomplished in the Schedule item description by a provision substantially in the form of the following example:

Radio antenna, in accordance with Exhibit No. dated (use other description of specifications as appropriate) and your Technical Proposal (insert specific identification of the bidder's proposal including any revision thereof as finally accepted), incorporated herein by reference. Nothing contained in said Technical Proposal shall constitute a waiver of any of the provisions of said Exhibit (or specifications).

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