Subpart 24-3.8-Price Negotiation

Policy and Techniques

§ 24-3.801-2 Responsibility of contracting officer.

In the event a contractor insists on a price or demands a profit or fee which the Contracting Officer considers unreasonable and, if the Contracting Officer is unable to obtain a satisfactory solution after exhausting the causes of action set forth in 41 CFR 1-3.8012(c), the matter shall be referred for resolution to the head of the procuring activity with a statement of facts and the Contracting Officer's recommendations.

§ 24-3.802 Preparation for negotiation.

(a) Requests for proposals. This section is not applicable to solicitations issued on Standard Form 33.

(1) Careful drafting of the Request for Proposals (RFP) is essential to the success of the competitive process. The program and procurement offices shall coordinate their efforts to develop a solicitation package which is free of ambiguities and which will allow all offerors to propose on an equal basis.

(2) The RFP shall require that a proposal be submitted in two parts: A "Technical Proposal" and a "Business Proposal." Each of the parts shall be separate and complete in itself so that evaluation of one may be accomplished independently of and concurrently with evaluation of the other. The RFP shall provide that the technical proposal shall not contain any reference to cost. Resource information, such as data concerning labor hours and categories, materials, subcontracts, travel, computer time, etc., shall be included in the technical proposal so that the offeror's understanding of the scope of work may be evaluated.

(3) The instructions to the offerors concerning the business proposal shall require cost information in sufficient detail to allow a complete cost analysis. Categories and amounts of labor, materials, travel, computer time, as well as information with regard to contractor past performance, financial capacity, certifications and representations, and other pertinent administra

tive and business information should also be requested.

(4) The RFP shall contain factors for award which are tailored to the requirements of the particular procurement. Each technical factor and subfactor shall be assigned a numerical weight which shall appear in the RFP. These factors will serve as the standard against which all proposals will be evaluated.

(b) Selection of prospective sources. Proposals shall be invited from a sufficient number of competent potential sources to insure adequate competition. Sources solicited should include those individuals and organizations (1) On the source list provided by the program office; (2) On the procurement office's bidders' mailing list; and (3) requesting RFPs as a result of publication of the requirement in the Commerce Business Daily. Each RFP shall be made available to all prospective offerors at the same time and no offeror shall be given the advantage of advance detailed information concerning the proposed procurement.

(c) Proposal preparation time. HUDPR 24-2.202-1 Bidding Time is applicable to negotiated procurement under this subpart.

§ 24-3.805 Selection of offerors for negotiation and award.

§ 24-3.805-1 Policy.

Those competitively negotiated procurements not expected to exceed $250,000 or those procurements over $250,000 which the head of the profor curing activity approves less formal negotiation procedures, shall be processed in accordance with HUDPR 24-3.805-2. All other competitively negotiated procurements expected to exceed $250,000 shall be processed in accordance with HUDPR 243.805-3. This section is not applicable to procurement of Architect-Engineer Services.

§ 24-3.805-2 Procurements not expected to exceed $250,000.

On procurements where the expected dollar amount will not exceed $250,000 the following will be observed:

(a) Forwarding proposals. After the deadline for receipt of offers, the Contracting Officer will forward five (5) copies of the technical portion of each proposal to the Technical Evaluation Panel (TEP) for evaluation. The TEP will be composed of one or more technical personnel designated by the program or initiating office prior to issuance of the solicitation. The business portions of each proposal will be retained by the Contracting Officer for subsequent evaluation. The Contracting Officer shall inform the TEP of proposals which contain major business deficiencies, including out-of-line cost proposals, which discussion with the offeror could not reasonably be expected to cure.

(b) Evaluation. The TEP will evaluate each proposal in strict conformity with the factors for award set forth in the RFP, and will assign each proposal a score on the basis of the factors for award. The TEP shall identify each proposal as being either acceptable or unacceptable. A proposal shall be considered unacceptable if it is so clearly deficient that it cannot be corrected through written or oral discussions. Predetermined cutoff scores designed for determining the threshold level of acceptablility of proposals shall not be employed.

(c) Report. A TEP report shall be prepared and signed by the technical evaluator(s), furnished to the Contracting Officer, and maintained as a permanent record in the official procurement file. The report shall reflect the scoring of each proposal and the rankings of the proposals, and shall identify each proposal as acceptable or unacceptable. The report shall also include a narrative evaluation specifying the strengths and weaknesses of each proposal, and any reservations qualifications that may bear upon the selection of sources for negotiation and award. Specific technical reasons supporting a determination of unacceptablity with regard to any proposal shall be included. Score sheets of all panel members shall be appended to the report.

or

(d) Review of report. After submission of the TEP report, the Contracting Officer and the TEP will evaluate the business portion of each proposal.

(e) Competitive range. unless it is determined pursuant to 41 CFR 1-3.8051(a)(5) that award shall be made on the basis of the most favorable initial proposal, the Contracting Officer will determine which offers are within the competitive range. A determination of the limits of the competitive range requires a comparison of the evaluation of each proposal against the evaluations of other proposals and therefore cannot be predetermined on the basis of a given number of or percentage of proposals. The competitive range shall include all proposals which have a reasonable chance of being selected for award.

(f) Conduct of discussions. The Contracting Officer, with the Technical Evaluation Panel, will conduct written or oral discussions of the work to be performed, the cost/price of the work, and other relevant points, with all those offerors within the competitive range. Discussions are not required if the conditions of 41 CFR 1-3.8051(a)(5) are applicable. The Contracting Officer shall point out to each offeror the ambiguities, uncertainties, and deficiencies, if any, in his proposal which can be corrected without major changes to the proposal. He shall give each offeror a reasonable opportunity (with a common cutoff date for all) to support, clarify, correct, improve, or revise his proposal. Discussions with an offeror should disclose deficiencies in the proposal but should not identify approaches or ideas through which another offeror has achieved a higher evaluation. No information will be revealed by the Government which could give one offeror an unfair competitive advantage over another. Cost estimates made by the Government will not be disclosed.

(g) Extent of discussions. Careful judgment will be exercised in determining the extent of discussions. In some cases, good business practice may require more than one round of discussions with proposers within the competitive range depending upon the time constraints, the expense, administrative limitations, and the overall significance of the procurement.

(h) Selection of contractor. (1) After the close of discussions and receipt of any revisions to proposals, the TEP

shall perform a final evaluation and prepare its selection recommendation(s). The TEP shall then forward the recommendation(s) through the appropriate officials having a need to know, as designated by the Funding Assistant Secretary, to the Contracting Officer who shall select for final contract negotiation the offer containing the proposal which promises the greatest value to the Government in terms of cost or price, technical and other factors, including equal opportunity compliance.

(2) Cost and price shall be considered in the selection of 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. Offers exceeding the Government's needs are not a basis for technical superiority.

(i) Final negotiation and award. Under a negotiated procurement, selection of the source or sources marks only the first phase of negotiating a definitive contract. Final contract negotiation entails: (1) Reaching agreement with the selected source on the costing/pricing, technical, equal opportunity and other provisions that will condition his performance under the contract; (2) Setting forth these terms in a mutually acceptable contractual document; and (3) Having sound rationale and basis for results negotiated.

(i) Pre-negotiation conference. Prior to negotiations with the selected offeror, the Contracting Officer shall conduct a meeting with those members of the Government's team who will participate. The purpose of this meeting is to present the objectives to be sought and to establish negotiating positions.

(ii) Negotiation and award. The Contracting Officer will make arrangements for negotiations with the suc

cessful offeror. Negotiations may be held at the contractor's site, at a HUD facility, or by telephone, depending upon the complexity and magnitude of the proposed contract, economic and time considerations and past experience. The Contracting Officer in coordination with assisted and supported by technical, audit, and other personnel as needed, making up the Government's negotiation team. It is the responsibility of the Contracting Officer in coordination with the Office of General Counsel to ensure the integrity of the negotiation process and to see to it that suitable mutual understandings between the parties have been reached. After negotiation is completed, the Contracting Officer will effect appropriate coordinations and execute the contract with a negotiation memorandum prepared in conformance with 41 CFR 1-3.811 and Office requirements.

§ 24-3.805-3 Procurements exceed $250,000.

expected to

On those procurements where the expected dollar amount will exceed $250,000 the following will apply:

(a) Selection of the source or sources for final contract negotiations shall be made by the Contracting Officer, pursuant to his responsibilities under HUDPR 24-1.453, based upon the findings and recommendations of the Source Selection Official (SSO) who is the head of the funding office or his designee. To assist the SSO in evaluating proposals and making recommendations for selection, the SSO shall designate a Source Evaluation Board (SEB) composed of a chairman, voting members, and advisors.

(b) After the deadline for receipt of offers, the Contracting Officer will forward five (5) copies of the technical portion of each proposal to the SEB chairman or his designee, who shall be responsible for their custody throughout the evaluation process. The business portions of each proposal will be retained by the Contracting Officer pending initial technical evaluation by the SEB. The Contracting Officer shall inform the SEB of proposals which contain major business deficiencies, including out of line cost proposals, which discussion with the offeror

could not reasonably be expected to

cure.

(c) The SEB will evaluate each proposal in strict conformance with the factors for award of the RFP, and will assign each proposal a score on the basis of the factors for award. The SEB shall identify each proposal as being either acceptable or unacceptable. A proposal should be considered unacceptable if its deficiencies cannot be corrected through written and oral discussions to the point of having a reasonable chance of being selected for award. Predetermined cutoff scores designed for determining the threshold level of acceptability of proposals shall not be employed.

(d) After the initial technical evaluation, the Contracting Officer and the SEB will evaluate the business portion of each proposal.

(e) Unless the SEB is prepared to recommend pursuant to 41 CFR 13.805-1(a)(5) that award be made on basis of the most favorable initial proposal, the SEB shall establish a competitive range based upon the evaluation of all the factors for award including cost or price.

(f) The SEB shall conduct written or oral discussions with all proposers within the competitive range as outlined in HUDPR 24-3.805-2(f).

(g) After the close of discussions, receipt of any revisions to proposals and any final adjustments to proposal scores, the SEB shall prepare a written report of its findings and recommendations and submit it to the SSO for action. The report shall summarize all significant SEB actions in the solicitation and evaluation phases and include:

(1) Statement of findings. Each acceptable proposal shall be discussed in descending order of scores/rankings. The statement shall identify the strengths and weaknesses of each proposal and any appropriate information for the consideration of the SSO.

(2) Recommendations. The SEB shall provide recommendations to the SSO as to selection in terms of: (i) A single source; (ii) A number of equal sources; (iii) A number of sources in descending order; or (iv) Options to be considered in arriving at the final decision. In making its recommendation

the SEB shall consider the requirements set forth in HUDPR 24-3.8052(h).

(h) Based upon the SEB report and his review of the matter, the SSO will recommend a source or sources and document ther basis for his recommendation. The SSO will communicate his findings and recommendation in a memorandum to the Contracting Officer. The memorandum will request the Contracting Officer to negotiate with the recommended source(s), and may include specific instructions and an alternate source or sources in the event the conduct of final negotiations so warrant.

(i) After receipt of the SSO's recommendation, the Contracting Officer shall select a source, based upon the findings and recommendations of the SSO for final negotiations in accordance with HUDPR 24-3.805(2)(h). Final negotiations and award will be effected in accordance with HUDPR 24-3.805-2(i).

Subpart 24-3.51—Protests Against Award

§ 24-3.5101 Negotiated procurement protests.

Protests against awards of negotiated procurement shall be processed in accordance with HUDPR 24-2.407-8.

PART 24-4-SPECIAL TYPES AND METHODS OF PROCUREMENT

Subpart 24-4.1-Automatic Data Processing Equipment and Services

Sec.

24-4.101 Clearance procedures.

Subpart 24-4.10—Architect-Engineer Services 24-4.1000 Scope of subpart.

24-4.1004-1 Establishment of Architect-Engineer evaluation boards.

24-4.1004-2 Conflict of interest. 24-4.1004-3 Privity of information. 24-4.1004-4 Maintenance and furnishing of source lists.

24-4.1004-5 Selection policy. 24-4.1004-6 Selection procedures.

AUTHORITY: Sec. 7(d), Dept. of HUD Act (42 U.S.C. 3535(d)).

SOURCE: 41 FR 55811, Dec. 22, 1976, unless otherwise noted.

Subpart 24-4.1-Automatic Data Processing Equipment and Services

§ 24-4.101 Clearance procedures.

No IFB, RFP, RFQ or amendment to an existing contract, when related in whole or in part to the procurement of ADP equipment or services, shall be issued until GSA approval is obtained pursuant to the FPMR.

Subpart 24-4.10—Architect-Engineer Services

§ 24-4.1000 Scope of subpart.

This subpart sets forth the policy and procedures to be followed for the establishment of architect-engineer

evaluation boards and sets forth policy and procedures for the deliberations of the Board.

§ 24-4.1004-1 Establishment of ArchitectEngineer evaluation boards.

Each architect-engineer evaluation board, whether permanent or ad hoc, shall consist of at least five (5) voting members who are Federal employees from the appropriate program area or from Federal offices outside the program area as appropriate. One member of each board shall be appointed Chairman. Five (5) alternate members who are Federal employees shall also be appointed, but at any given time the majority of voting members shall be from the program area concerned. The members of a permanent board shall be appointed for a period of two (2) years. Appointment shall be made by the following authorities with copies of appointment memoranda furnished to the appropriate procuring activity:

(a) Primary Organizational Heads for Boards appointed at the Headquarters level;

(b) Head of the Procuring Activity for Boards appointed at the Field Office level.

§ 24-4.1004-2 Conflict of interest.

Each board member, whether voting or nonvoting, shall familiarize himself with those provisions of Title 24, Housing and Housing Credit, Subtitle A, Part O, of the Code of Federal Reg

ulations regarding conflicts of interest. If at any time during the selection process a Board member encounters a situation with one or more of the firms being considered that might be or might appear to be a conflict of interest, he will disqualify himself and call it to the attention of the Chairman for resolution and proper action. The Chairman will refer the matter to the Office of General Counsel.

§ 24-4.1004-3 Privity of information.

The Evaluation Board is to be insulated from outside pressures to the extent practical. No person having knowledge of the activities of the Board shall divulge information concerning the deliberations of the Board to any other persons not having a need to know such information.

§ 24-4.1004-4 Maintenance and furnishing of source lists.

The appropriate office utilizing architect-engineer services shall maintain a source list consisting of the current "U.S. Government Architect-Engineer Questionnaire," Standard Form 254 (SF-254), submitted by firms as defined in 41 CFR 1-4.1002 interested in performing work in the program area. For each procurement or group of related procurements the Board shall prepare from its source list a preselection list of ten (10) firms considered likely to be capable of meeting the requirements of the procurement. Every SF-254 shall be read and evaluated by at least two (2) Board members to determine which of the firms on the source list should be included on the preselection list. When a list of ten (10) firms is not available, fewer firms may be considered. SF-254's may be obtained from the General Services Administration.

§ 24-4.1004-5 Selection policy.

The selection of architect-engineering firms for professional service contracts shall be accomplished in accordance with the procedures set forth in this section. Such selection shall be based upon competitive evaluation procedures to determine which firm(s) is/are the most qualified. Qualification considerations include but are not limited to: