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of the Government to a monetary amount there described as being available for contract performance. Such amount for the first program year requirements shall be inserted by the contracting officer upon award of the contract and shall be modified for successive program years upon availability of funds for such years.

neering cost estimates which will identify the detailed recurring and nonrecurring costs, and indicate labor learn ing implications. Cancellation dates for each program year's requirements shall be established with due regard for production lead time and the date by which funding therefor can reasonably be accomplished.

(b) Original cancellation ceilings may be revised from information developed after issuance of a solicitation discloses that such ceilings are not realistic. In the case of formal advertising, such changes shall be by amendment of the invitation for bids prior to bid opening. In two-step formal advertising, discussion conducted during the first step may indicate the need for revised ceilings in step two. Negotiations with offerors in a negotiated procurement may provide information requiring a change in cancellation ceilings for all offerors, prior to final negotiation and contract award. In order to assure that all interested sources of supply are thoroughly aware of how multi-year procurement is accomplished, use of presolicitation or prebid conferences may be advisable. During such conferences the contracting officer should ascertain whether escalation provisions are appropriate (see FPR 1-2.104-3) and whether the proposed cancellation ceiling is adequate.

8 12-1.5510 Termination for convenience.

In the event of a total termination for the convenience of the Government, including items subject to cancellation, the Government's obligation shall not exceed the amount set forth in the schedule as available for contract performance, plus the applicable amount established as the cancellation ceiling.

12-1.5511 Limitations. Multi-year procurement shall not be used:

(a) When funds covering the procurement are limited by statute for obligation during the fiscal year in which the contract is executed;

(b) For quantities or total costs in excess of the planned requirements for 5 years set forth in approved programs; or

(c) When any one of the criteria set forth in § 12-1.5503 is not present.

812-1.5507 Funds obligation-contingent

liabilities. For each program year requirement. funds shall be obligated to cover the quantities to be delivered thereunder. In addition, contingent liabilities for cancellation charges shall be carried as outstanding commitments. 8 12–1.5508 Payment for cancellation.

In the event of a cancellation the contractor is entitled to payment as consideration therefor in accordance with the terms of the Cancellation of Items clause in 12-7.151-14 in an amount not to exceed the cancellation ceiling.

$12-1.5512 Evaluation.

(a) Evaluation of offers in a multiyear procurement involves not only the determination of the lowest overall evaluated cost to the Government for both alternatives, the multi-year procurement and the first program year procurement; it also involves the comparison of the cost of buying the total requirement under a multi-year procurement with cost of buying the total requirement in successive independent procurements. All the factors to be considered for the various evaluations involved shall be set forth in the solicitation.

(b) In the event the Government determines prior to award that only the first program year quantities are actually required, the procurement will no longer be evaluated on a multi-year basis:

8 12-1.5509 Schedule provision limiting

payment obligation. The schedule shall contain a provision limiting the payment obligation

(1) When the solicitation permits but will not render the bid or offer bids or offers on either the first pro- nonresponsive as to any alternate gram year requirements or the multi- multi-year submission by the same year requirements or both, only bids bidder or offeror. or offers on the first program year re (h) To determine the lowest evaluatquirements will be evaluated; and

ed unit price, compare the lowest eval(2) When the solicitation does not uated bid or offer on the first program permit the submission of prices on a year alternative against the lowest single-year basis, the single-year re- evaluated bid or offer on the multiquirement will be resolicited.

year alternative as follows: (c) The cancellation ceiling shall not (1) Multiply the evaluated unit price be a factor for evaluation. Unless Gov for each item of the lowest evaluated ernment administrative costs incident bid or offer on the first program year to annual procurement methods and

alternative times the total number of contract administration can be reason units of that item required by the ably established and supported, they

multi-year alternative, and then shall not be used as a factor for evalu

(2) Take the sum of these products ation. When administrative costs are

for all the items, plus the dollar to be used in evaluation, the dollar

amount of any administrative costs of amount to be used shall be stated in

the Government which are to be used the solicitation.

in the evaluation, and finally (d) Delivery destinations may be un

(3) Compare this result against the known for certain quantities due to

total evaluated price of the lowest bid the extended duration of contract per

or offer on the multi-year alternative. formance. In such cases, destinations shall be developed on the basis of best

§ 12-1.5513 Award. estimates; a definite place or places shall be designated in the solicitation

(a) Except as provided in paragraphs as the point to which transportation

(b) and (c) of this section, award shall costs will be computed (but only for

be made on the basis of the lowest the purpose of evaluating bids or pro evaluated unit price determined in acposals); and the solicitation shall con cordance with $ 12-1.5512, whether tain the notice required by FPR 1

that price is on a single-year basis or a 19.202-7.

multi-year basis. (e) When Government production (b) If only one responsive bid or and research property is provided, the offer is received on the multi-year reuse of such property may be on a rent quirements from a responsible bidder free basis. In this event, the solicita or offeror, then award shall be made tion shall set forth a detailed descrip- as follows: tion of the procedure to be followed (1) If the solicitation gave the bidder and the factors to be considered for or offeror the choice of submitting the elimination of competitive advan prices on a single-year basis or multitage. The amount added for evalua- year basis or both, then award shall be tion to each offeror's unit price for the made in accordance with § 12-1.5512(a) first program year requirement shall above; also be added to his unit price for the (2) If the solicitation required the multi-year requirements.

submission of prices on the first pro(f) When the solicitation requires gram year requirements in accordance the submission of prices on the first with § 12-1.5505-3(a) award shall be program year requirements in accord made to the lowest evaluated bidder or ance with $ 12-1.5505-3(a), bids or offeror on the single-year basis, even offers which submit prices on the though the multi-year price submismulti-year requirements only shall be sion may represent the lowest evaluatrejected as nonresponsive.

ed price submission, except that if the (g) When the solicitation provides multi-year price offers distinct advanfor submission of prices only for the tages to the Government a multi-year total multi-year quantity, submission award may be made with the advance of prices for the single-year quantity approval of the head of the procuring will be disregarded for any purpose activity;

$10,000, or when there is sufficient data available to make a positive determination of responsibility.

(3) If the solicitation restricted the submission of prices to the multi-year basis only, the solicitation shall be cancelled and a new solicitation issued by whatever procedures are then appropriate, except that if the multiyear price offers distinct advantage to the Government a multi-year award may be made with the advance approval of the head of the procuring activity.

(c) In no event shall award be made at an unreasonable price.

8 12-1.5601-2 Type of survey.

A complete survey encompases investigation of all standards concerning responsibility and any other requirements of special inquiry as deemed necessary by the contracting officer. A partial survey is limited to certain standards: for example, it might cover only technical qualifications, production backlog, or financial resources.

8 12-1.5514 Contract clauses.

The clauses in § 12–7.151-14 shall be included in all contracts under the multi-year procurement method.

Subpart 12-1.56—Preaward Survey


8 12-1.5601-3 Conducting the survey.

When a preaward survey is necessary, it shall be conducted by the contracting officer or his designated representative, or by a survey team consisting of the contracting officer or his designated representative and such other qualified specialists as are deemed necessary to evaluate all appropriate phases of the prospective contractor's capability. The type of survey neeed (complete or partial) and the areas of consideration shall be identifed by the contracting officer. Personnel of the field contract inspection staffs within the Department may be employed, through cross-servicing, as provided in DOT Order 4200.6c.

§ 12-1.5600 Scope of subpart.

This subpart prescribes the procedures for conducting preaward on-site evaluations (preaward surveys) of prospective contractors. While the procedures are primarily applicable to supply contracts, they shall be applied to the extent appropriate, to other contracts. $ 12–1.5601 General. 8 12–1.5601-1 Need for survey.

(a) Before requesting or performing an on-site survey, the contracting officer shall review the data available in the procurement office files or information available from other sources (e.g., other Government procurement offices, contractor's performance under current or prior contracts, and such commercial sources as banks and credit rating and reporting firms). Prior preaward evaluation reports, if any, should be reviewed.

(b) When available information is not sufficient for the contracting officer to determine the prospective contractor's responsibility, the contracting officer shall perform or have performed a preaward survey to determine if the prospective contractor meets the standards set forth in FPR Subpart 1-1.12 and any additional requirements set forth in the solicita. tion. A survey is not ordinarily performed on contracts of less than

8 12-1.5601-4 Release of survey informa

tion. No indication shall be made to the prospective contractor that an award will or will not be made. This prohibition does not preclude discussion with the prospective contractor of questionable areas which require clarification. Information obtained during the survey shall be treated in strict confidence and divulged only to Government personnel having a need to know. The survey report is confidential business information and shall not be released outside the Government. The completed report, however, or the facts it contains can be discussed with the concern involved.

§ 12-1.5601-5 Preparation for the survey.

The contracting officer or the individual designated by him as responsible for the conduct of the survey shall:

(a) Review all requirements set forth in the solicitation or proposal.

(b) Determine composition of the team if more than one specialist is required.

(c) Make arrangements for plant visits. On-site preaward evaluations must be completed in timely fashion. Therefore it is necessary to make prompt contact and arrangements with the prospective contractor for the survey. At the time contact is made, the prospective contractor should be advised of the documentation that may be needed, such as financial statement, resumes of company personnel, descriptions of existing plant workload, and production load ing charts.

(d) Advise team members what information is required from their respective organizational elements, the date needed, and any particular portion of the survey for which they are responsible.

(e) Brief team members on their responsibilities and conduct relative to interviews and discussions with officials of the concern.

(f) Arrange for discussion among members during and after the on-site survey to assure that evaluations by individual specialists are coordinated and complete.

the contract, shall be reviewed and analyzed for adequacy.

(c) The contracting officer or the individual designated by him as responsible for the conduct of the survey shall:

(1) Review with other team members the findings developed during the survey. Points of disagreement should be reviewed in depth.

(2) Obtain clarification from the contracting officer when questions of interpretation arise during the course of the evaluation.

(3) Write a narrative report of the team's findings.

(4) Otherwise direct the efforts of the team.

(d) Each team member shall analyze and evaluate the prospective contractor's capability to perform with respect to that part of the survey for which he is responsible. His report shall be promptly furnished to the team leader, and be in sufficient detail to substantiate his findings.

§ 12-1.5602 Survey report.

812-1.5602-1 Format.

The report shall be in narrative form. The format set forth in DOTPR 12-1.5604 shall be used to the maximum extent practicable. All pertinent documentation should be forwarded with the report.

§ 12-1.5601-6 On-site survey procedures.

(a) Discussions should be held with the prospective contractor's management officials. These discussions should be in sufficient detail to obtain as much information as can be supplied by the officials concerning the prospective contractor's ability to perform satisfactorily, and to assure that the solicitation requirements and its technical aspects (such as specifications, prototype, data, inspection and testing, packaging, delivery, instruction books and reports), are understood. If a cost-reimbursable contract is contemplated, the prospective contractor's accounting system will be reviewed to determine that it is adequate for the determination of costs applicable to the contract.

(b) The facilities and procedures the prospective contractor proposes to use, and his overall plans for performing

8 12–1.5602–2 Standards.

The report shall discuss the standards set forth in FPR 1-1.12 and the requirements of the solicitation sufficiently to substantiate the conclusion. It shall include a discussion of all pertinent topics of the “Guide for On-Site Evaluation of Prospective Contractor" (see DOTPR 12-1.5603). In any case where there is conflict of opinion between team members as to whether the prospective contractor meets a standard, this fact shall be discussed in detail, and the team leader shall determine the survey team's position on that standard. Copies of team members' reports, including those which dissent from the position recommended by the team, shall be included as enclosures to the survey report. The survey report shall unequivocally state that the prospective contractor does or does not meet each standard.

8 12-1.5603 Guide for on-site evaluation of

prospective contractor. This guide is intended to assist in de veloping the facts to be used for preparing the survey report. It should be used only as a guide, not as a question/answer sheet.

GENERAL INFORMATION (a) Solicitation or proposal number or other identification.

(b) Date(s) of evaluation.

(c) Firm name, address, telephone number.

(d) Name(s) and title(s) of the person(s) contacted in making evaluation.

(e) Name(s) and routing symbol(s) of evaluation team members.

the prospective contractor's banking facilities.

(d) Is the prospective contractor receiving any Government financing? If so, indicate:

1. Amount of unliquidated progress payments outstanding ----

2. Amount of Government guaranteed loans with dollar amount being used at present -----

3. Identify Government agencies and contract numbers involved in (a) and (b) above.

(NOTE: If requested by the contracting officer, send the financial information to him immediately upon receipt. Include complete address and name of person(s) who may be contacted regarding financial matters.)


ORGANIZATION (a) List of names, titles, and citizenship of the principal company officials. Also list experience and background if resumes not available.

(b) Form of company: Corporation (parent/subsidiary affiliations), partnership, sole proprietorship? Date company was founded. If incorporated, in which State?

(c) Name and relationship of parent company, if any.

(d) Location of parent company. (Complete only if applicable to the solicitation.)

(e) Evaluate organization against the requirements of the solicitation; i.e., are there any conflicts of duties within or between or. ganizational segments which may endanger contract performance; is the organization such that all facets of the contract will be controlled?

(f) Does the prospective contractor have the necessary organization to satisfactorily perform the proposed work?

(a) Is the item to be procured a standard item for the prospective contractor? If so, for how many years has the item been produced, and what is the quantity produced?

(b) Has the prospective contractor ever produced identical or similar items to those required on the solicitation for either Government or commercial purposes? If so, describe in detail giving dates produced, Government contract numbers, and quantities delivered.

(c) Has the prospective contractor performed previous contracts such that he is familiar with Government specifications in general or applicable specifications in particular?

(d) Do the prospective contractor's responsible officials question any of the contract requirements or allege any misunderstanding of the contract requirements?

(e) List the firm's present product, or obtain brochures listing same, and years of production experience with such products.

(f) Are the prospective contractor's purchasing personnel experienced in procuring materials, components, services, and subcontracting to Government specifications?

(g) Does the prospective contractor have the necessary experience to satisfactorily perform the proposed contract?

FINANCIAL RESOURCES (a) Obtain a copy of the prospective contractor's financial statements for the prior two fiscal years and a copy of his most recent financial statement.

) Does the prospective contractor intend to obtain bank, or other lines of credit financing to perform on the proposed contract? 1. If so, in what amount? -with whom? ---

(c) Obtain data on credit available from local financial institutions. Differentiate between credit available on an open basis and that available as a result of an award of the proposed contract. Identify the financial in stitution, its address and telephone number, and personnel who may be contacted for verification of information. Also identify

TECHNICAL QUALIFICATIONS List the names and positions of the prospective contractor's key engineering, quality control, and all other technical pe who will be involved with an award. Also list experience and educational background if resumes are not available.

(a) Engineering competence. (1) Do the prospective contractor's engineers fully understand all equipment specification requirements of the solicitation?

(2) What experience do the prospective contractor's engineers have with design, development and manufacturing of the products required by the solicitation?

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