niques and information as to plant capacity, scheduling, engineering and production "know-how," Government property, make-or-buy considerations, and industrial security, particularly as these relate to the practices of the specific prospective contractor.

(3) The contract auditor is responsible for submission of information and advice, based on his analysis of the contractor's books and accounting records or other related data, as to the acceptability of the contractor's incurred and estimated costs. The auditor shall report any denial by the contractor of access to records or cost or pricing data which the auditor considers essential to the preparation of a satisfactory report. If the auditor believes that the contractor's estimating methods or accounting system are inadequate to produce valid support for the proposal or to permit satisfactory administration of the type of contract contemplated, this shall be stated in the audit report and concurrently made known to the contractor so that he may have the opportunity of presenting his views to the contracting officer. Where the contracting officer determines that deficiencies in the contractor's accounting system or estimating methods are such that the proposed contract cannot be adequately priced or administered, he shall, with the advice of the contract auditor, ensure that necessary corrective action is initiated prior to the award of such contract. Generally, the auditor has responsibility for performing that part of reviews and cost or price analyses which requires access to the contractor's books and financial records supporting proposed cost or pricing data, regardless of the dollar amount involved. This does not preclude the contracting officer or his technical representatives from requesting any data from, or reviewing records of, the contractor (such as cost or pricing data, list of labor operations, process sheets, etc.) necessary to the discharge of their responsibilities.

(4) In order to provide the contracting officer with maximum support, it is essential that there be close cooperation and communication between the contract auditors and the production and other technical specialists. Such

coordination will be accomplished in a manner which will minimize duplication of analysis (see § 1-3.809(b)(3)). The analyses by technical and audit personnel are of mutual interest, and information relating thereto shall be exchanged throughout the review process. It is recognized that the duties of auditors and those of other technical specialists in many cases require both to evaluate the same elements of estimated costs. While they shall review the data jointly or concurrently wherever possible, each shall render his services within his own area of responsibility. For example, on quantitative factors (such as labor hours), the auditor will frequently find it necessary to compare proposed hours with hours actually expended on the same or similar products in the past as reflected on the cost records of the contractor. From this information he can often project trend data. The technical specialist may also analyze the proposed hours on the basis of his knowledge of such things as shop practices, industrial engineering, time and motion factors, and the contractor's plant organization and capabilities. The interchange of this information will not only prevent duplication but will ensure adequate and complementary analysis.

(5) Pricing based on cost analysis involves, among other things, an appraisal of estimates of costs expected to be incurred in the future. The accounting projection of trends based on cost or pricing data, together with any known changes therein, is only one method of conducting this appraisal, others being:

(i) An engineering appraisal of the need for the estimated labor and material costs and of tooling and facilities, and the reasonableness of scrap and spoilage factors; and

(ii) The preparation of independent estimates by competent technical personnel.

Occasionally, differences of opinion will exist not only on the reasonableness of cost projections but also on the accounting techniques on which they are based. In addition, it is normally not possible to negotiate a pricing result which is in strict accord with all of the opinions of all the specialists, or

even with the Government's pricing objective. Reasonable compromises are normally necessary and this fact must be understood by all members of the team. For all of these reasons audit reports or pricing recommendations by others must be considered to be advisory only. The contracting officer is responsible for the exercise of the requisite judgments and is solely responsible for the final pricing decision. In these instances where the contracting officer does not adopt audit or other specialist recommendations that have particular significance on the contract price, appropriate comments shall be included in the record of the negotiation (see § 1-3.811).

(6) Whenever it becomes apparent to the contracting officer that the negotiations will require the resolution of complex problems which involve items significant in amount, he shall request attendance by audit and other appropriate representatives at the negotiation meeting.

[34 FR 2659, Feb. 27, 1969]

§ 1-3.802 Preparation for negotiation.

(a) Product or service. Knowledge of the product or service, and its use, is essential to sound pricing. Before soliciting quotations, every contracting officer should develop, where feasible, an estimate of the proper price level or value of the product or service to be purchased. Such estimates may be based on a physical inspection of the product and review of such items as drawings, specifications, job process sheets, and prior procurement data. When necessary, requirements and technical specialists should be consulted. The primary responsibility for the adequacy of specifications and for the delivery requirements must necessarily rest with requirements and technical groups. However, the contracting officer should be aware of the effect which these factors may have on prices and competition, and should, prior to award, inform requirements and technical groups of any unsatisfactory effect which their decisions have on prices or competition.

(b) Selection of prospective sources. Selection of qualified sources for solicitation of proposals is basic to sound prices. Proposals should be invited

from a sufficient number of competent potential sources to insure adequate competition (see §§ 1-1.302, 1-1.702, 11.1203, and 1-3.101). The bidder's mailing lists prescribed by § 1-2.205 should be used where appropriate.

(c) Requests for proposals. (1) Requests for proposals shall contain the information necessary to enable a prospective offeror to properly prepare a quotation or proposal. The request for proposals shall be as complete as possible with respect to (i) item descriptions or statements of work, (ii) specifications, (iii) Government-furnished property, if any, (iv) required delivery schedule, (v) special provisions, (vi) cost or pricing data requirements (see § 1-3.807-3), and (vii) contract clauses.

(2) Each request for proposals shall state the relative importance of cost or price, technical considerations, and other factors for purposes of proposal evaluation and contract award. Numerical weights which may be employed in the evaluation of proposals may be disclosed in solicitations.

(3) Requests for proposals shall specify a date and time for the submission of proposals. Any extension of time granted to one prospective offeror shall be granted uniformly to all.

(4) The initial release of requests for proposals shall be made to all prospective offerors at the same time, and no offeror shall be given the advantage of advance knowledge that proposals are to be requested.

(5) Requests for proposals shall be in writing except in those cases in which the urgency of the procurement is such that there is not sufficient time to prepare a written request. In such cases oral requests are authorized.

[29 FR 10155, July 24, 1964, as amended at 36 FR 17422, Aug. 31, 1971; 38 FR 26914, Sept. 27, 1973; 43 FR 46303, Oct. 6, 1978]

§ 1-3.802-1 Consideration of late proposals.

(a) Except as provided in § 1-3.802-2, the following provision regarding the receipt and consideration of proposals for award that are received after the exact time set for receipt in the request for proposals shall be placed in each solicitation:

40-104 O-79—14

LATE PROPOSALS, MODIFICATIONS OF PROPOSALS, AND WITHDRAWALS OF PROPOSALS

(a) Any proposal received at the office designated in the solicitation after the exact time specified for receipt will not be considered unless it is received before award is made, and:

(1) It was sent by registered or certified mail not later than the fifth calendar day prior to the date specified for receipt of offers (e.g., an offer submitted in response to a solicitation requiring receipt of offers by the 20th of the month must have been mailed by the 15th or earlier);

(2) It was sent by mail (or telegram if authorized) and it is determined by the Government that the late receipt was due solely to mishandling by the Government after receipt at the Government installation; or

(3) It is the only proposal received.

(b) Any modification of a proposal, except a modification resulting from the Contracting Officer's request for "best and final" offer, is subject to the same conditions as in (a)(1) and (a)(2) of this provision.

(c) A modification resulting from the Contracting Officer's request for "best and final" offer received after the time and date specified in the request will not be considered unless received before award and the late receipt is due solely to mishandling by the Government after receipt at the Government installation.

(d) The only acceptable evidence to establish:

(1) The date of mailing of a late proposal or modification sent either by registered or certified mail is the U.S. Postal Service postmark on both the envelope or wrapper and on the original receipt from the U.S. Postal Service. If neither postmark shows a legible date, the proposal or modification of proposal shall be deemed to have been mailed late. (The term "postmark" means a printed, stamped, or otherwise placed impression (exclusive of a postage meter machine impression) that is readily identifiable without further action as having been supplied and affixed on the date of mailing by employees of the U.S. Postal Service. Therefore, offerors should request the postal clerk to place a hand cancellation bull's-eye "postmark" on both the receipt and the envelope or wrapper.)

(2) The time of receipt at the Government installation is the time-date stamp of such installation on the proposal wrapper or other documentary evidence of receipt maintained by the installation.

(e) Notwithstanding (a), (b), and (c), of this provision, a late modification of an otherwise successful proposal which makes its terms more favorable to the Government will be considered at any time it is received and may be accepted.

(b) Proposals and modifications of proposals received in the office designated in the request for proposals after the exact time specified are late proposals and shall be considered for award only if the circumstances set forth in the provision in § 1-3.802-1(a), above, are applicable. When a late proposal or modification of proposal is received and it is clear from available information that it cannot be considered for award (e.g., when the postmark clearly shows that the proposal was mailed later than the fifth day prior to the date specified), the contracting officer, or his authorized representative, shall promptly notify the offeror that it was received late and will not be considered for award. However, when a late proposal or modification of proposal is transmitted by registered or certified mail and it is received before award but it is not clear from the available information whether it can be considered, the offeror shall be promptly notified substantially in accordance with the notice in § 12.303-6, appropriately modified to relate to proposals. Disposition of late proposals that cannot be considered for award shall be in accordance with agency procedures.

(c) Where only one proposal is involved and it is received after the time specified, it may be evaluated and considered for award in accordance with agency procedures. As used in this section the term "only proposal received" means a proposal which is one submitted by (1) the only offeror responding to the request for proposals, (2) a sole source, or (3) an offeror who is offering proprietary items in response to a request for proposals which specifies that awards will be made on the basis of proprietary items identified by the offeror by brand name, model, type, or other identification. With respect to (3) of this paragraph (c), the term does not mean an offer which is based

on a performance specification or a brand name product which is specifically identified in the request for proposals.

(d) The normal revisions of proposals by offerors selected for discussion during the usual conduct of negotiations with such offerors are not to be considered as late proposals or later modifications to proposals but shall be handled in accordance with § 1-3.805.

[38 FR 26914, Sept. 27, 1973, as amended at 42 FR 33737, July 1, 1977; 43 FR 31331, July 21, 1978]

§ 1-3.802-2 Alternate procedures for consideration of late proposals.

(a) When the head of the agency, or his designee, determines that the procedures set forth in § 1-3.802-1 are not applicable to certain classes of negotiated procurement conducted by his agency, he may authorize the adoption of the following procedures for consideration of late proposals and modifications (except where the procurement of general purpose automated data processing equipment is involved unless use of the procedures set forth in this § 1-3.802-2 is expressly authorized by the Commissioner, Automated Data and Telecommunications Service, GSA).

(b) Requests for proposals that fall within a class of negotiated procurement for which it has been determined, in accordance with § 1-3.8022(a), that the requirements of § 13.802-1 are not applicable shall contain the following provision:

LATE PROPOSALS, MODIFICATIONS OF PROPOSALS, AND WITHDRAWALS OF PROPOSALS (a) Any proposal received at the office designated in the solicitation after the exact time specified for receipt will not be considered unless it is received before award is made, and:

(1) It was sent by registered or certified mail not later than the fifth calendar day prior to the date specified for receipt of offers (e.g., an offer submitted in response to a solicitation requiring receipt of offers by the 20th day of the month must have been mailed by the 15th or earlier);

(2) It was sent by mail (or telegram if authorized) and it is determined by the Government that the late receipt was due solely to mishandling by the Government after receipt at the Government installation;

(3) It is the only proposal received; or

(4) It offers significant cost or technical advantages to the Government, and it is received before a determination of the competitive range has been made.

(b) Any modification of a proposal is subject to the same conditions as in (a) of this provision.

(c) The only acceptable evidence to establish:

(1) The date of mailing of a late proposal or modification sent either by registered or certified mail is the U.S. Postal Service postmark on both the envelope or wrapper and on the original receipt from the U.S. Postal Service. If neither postmark shows a legible date, the proposal or modification of proposal shall be deemed to have been mailed late. (The term "postmark" means a printed, stamped, or otherwise placed impression (exclusive of a postage meter machine impression) that is readily identifiable without further action as having been supplied and affixed on the date of mailing by employees of the U.S. Postal Service. Therefore, offerors should request the postal clerk to place a hand cancellation bull's-eye "postmark" on both the receipt and the envelope or wrapper.)

(2) The time of receipt at the Government installation is the time-date stamp of such installation on the proposal wrapper or other documentary evidence of receipt maintained by the installation.

(d) Notwithstanding (a) and (b) of this provision, a late modification of an otherwise successful proposal which makes its terms more favorable to the Government will be considered at any time it is received and may be accepted.

(e) Proposals may be withdrawn by written or telegraphic notice received at any time prior to award. Proposals may be withdrawn in person by an offeror or his authorized representative, provided his identity is made known and he signs a receipt for the proposal prior to award.

(c) Proposals that are received in the office designated in the request for proposals before the time specified for their receipt shall be evaluated to determine which proposals are within the competitive range established for the procurement action. There may be cases where lateness due solely to a delay in the mails or mishandling after receipt at the Government installation results in a proposal being received by the contracting officer after the competitive range has been determined. In such cases the late proposal shall be evaluated, and, if found to be within the competitive range,

shall be given the same consideration as other proposals within the competitive range.

(d) A late proposal that is delayed due to circumstances other than those set forth in the provision contained in § 1-3.802-2(b) which offers significant cost or technical advantages to the Government shall be evaluated provided it is received before a determination of the competitive range has been made. Where the evaluation results in a determination that the proposal is within the competitive range, the proposal shall be given the same consideration as other proposals within the competitive range. However, where only one proposal is involved and it is received after the time specified, a determination of the competitive range is not to be made and the proposal may be evaluated and considered for award provided that the receipt of the proposal is prior to a decision made by the contracting officer to resolicit. See § 1-3.802-1(c) for the meaning of the term "only proposal received."

(e) Late proposals that are delayed under circumstances other than delays in the mails or mishandling at the Government installation which are received after a determination of the competitive range shall not be evaluated or considered for award. Also, where the request for proposals provides that award may be made without discussions with offerors, a late proposal shall not be evaluated or considered if it is received after the successful offeror has been selected and the contract has been awarded.

(f) Generally, contracting officers, assisted by audit or pricing personnel, will be able to make a determination of the significance of any reduction in cost to the Government offered by a late proposal. Determinations regarding significant technical advantages shall be made in accordance with agency procedures.

(g) Determination of the competitive range shall be made in accordance with agency procedures. All offerors shall be notified at the same time whether or not their proposals are within the competitive range, and the date of such notification shall be considered to be the date of the determination. Debriefings of unsuccessful of

ferors shall be conducted in accord ance with agency procedures; however debriefings should be conducted only after award has been made.

(h) An offeror who has submitted a late proposal that has not been accept ed for consideration shall be notified in writing that the proposal was re ceived late and will not be considered. The notification shall set forth the reason why the late proposal was not considered; e.g., did not offer significant cost or technical advantage, received after a determination of the competitive range, received after award.

(i) Modifications of proposals are categorized on the basis of time of receipt as: (1) Receipt prior to a determination of the competitive range, (2) receipt from offerors within the competitive range during negotiations, and (3) receipt at any time from an otherwise successful offeror. Modifications received prior to a determination of the competitive range shall be considered in the evaluation of the proposals which they modify. Modifications received after a determination of the competitive range shall be considered only if they modify proposals which are within the competitive range and are received prior to the date for completion of negotiations established by the contracting officer. All offerors within the competitive range shall be notified in writing of the date for completion of negotiations. Modifications received after the date set shall not be considered. However, a modification received from an otherwise successful offeror which is advantageous to the Government shall be considered at any time.

[38 FR 26915, Sept. 27, 1973, as amended at 42 FR 33737, July 1, 1977; 43 FR 31331, July 21, 1978]

§ 1-3.803 Type of contract.

(a) The selection of an appropriate contract type and the negotiation of prices are related and should be considered together. Section 1-3.403 lists some of the factors for this joint consideration. The objective is to negotiate a contract type and price that includes reasonable contractor risk and provides the contractor with the greatest incentive for efficient and eco