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415.506 Agency procedures.

HCA's are responsible for establishing the procedures for control of unsolicited proposals required by FAR 15.506(a) and for designating the contact point required by FAR 15.506(b).

Subpart 415.6-Source Selection

a blased opinion or an unfair advantage. In making this certification, I have considered all of my stocks, bonds, other outstanding flnancial interests or commitments, employment arrangements (past, present, or under consideration), and, to the extent known by me, all financial interests and employment arrangements of my spouse, minor children, and other members of my immediate household, that might place me in a position of conflict, real or apparent, with the evaluation proceedings.

2. I agree to use proposal information only for evaluation purposes. I understand that any authorized restriction on disclosure placed upon the proposal by the prospective contractor or subcontractor or by the Government shall be applied to any reproduction or abstracted information of the proposal. I agree to use my best effort to safeguard such information physically, and not to disclose the contents of, nor release any information relating to, the proposal(s) to anyone outside of the Source Evaluation Board or other panel assembled for this acquisition, or other individuals designated by the Contracting Officer.

3. I agree to return to the Government all copies of proposals, as well as any abstracts, upon completion of the evaluation.

416.607 Disclosure of mistakes before

award. The HCA with the concurrence of the Office of General Counsel is authorized to make the determination permitting proposal correction as required by FAR 15.607(c)(3).

415.608 Proposal evaluation.

HCA's or their designees are authorized to make the determinations to reject all proposals under the circumstances listed in FAR 15.608(b). (53 FR 6063, Feb. 29, 1988)

(Name and Organization)

(Date of Execution)

416.612 Formal source selection.

(a) The HCA shall determine when a formal source selection process will be used and establish procedures for implementing the requirements of FAR 15.612.

(b) The HCA shall be the formal selection official for all negotiated contracts over $500,000.

(C) A copy of the established procedures shall be forwarded to the Director, Office of Operations.

(End of Certificate)

Subpart 415.8-Price Negotiation

(g) The release of a proposal outside the Government for evaluation does not constitute the release of information for purposes of the Freedom of Information Act (5 U.S.C. 552).

(h) The contracting officer shall attach a cover page bearing the GOVERNMENT NOTICE FOR HANDLING PROPOSALS, as stated in FAR 15.4132(e), to each proposal upon receipt. The last sentence of the notice shall cite 48 CFR 415.413 as the implementing regulation.

415.804 Cost or pricing data. 415.804-3 Exemptions from or waiver

of submission of certified cost or pricing data. The HCA is authorized to waive the requirement for submission of certified cost or pricing data as allowed by FAR 15.804 3(i).

(55 FR 7334, Mar. 1, 1990)

Subpart 415.9-Profit

Subpart 415.5-Unsolicited

Proposals 415.504 Advance guidelines.

HCA's are responsible for establishing advance guidelines as required by FAR 15.504 in accordance with contracting activities' missions and programs.

416.902 Policy.

(a) USDA will use a structured approach to determine the profit or fee prenegotiation objective in acquisition actions that require cost analysis based on the profit analysis factors in FAR 15.905.


Subpart 416.4-Incentive Contracts

416.403 Fixed-price incentive contracts. 416.404 Cost-reimbursement-incentive con

tracts. 416.404–1 Cost-plus-incentive-fee contracts. 416.404–2 Cost-plus-award-fee contracts. 416.405 Contract clauses. 416.470 Solicitation provision.

Subpart 416.5-Indefinite Delivery


416.505 Contract clauses. 416.570 Solicitation provision.

(b) The following types of acquisitions are exempt from the requirements of the structured approach, but the contracting officer shall comply with FAR 15.905–1 when analyzing profit for these contracts or actions:

(1) All actions which do not require cost analysis;

(2) Architect-engineer contracts; (3) Construction contracts;

(4) Contracts primarily requiring delivery of material supplied by subcontractors;

(5) Termination settlements; (6) Cost-plus-award-fee contracts; and (7) Other professional services.

(c) In developing a profit or fee objective, the contracting officer shall comply with the requirements in FAR 15.903.

(d) When profit analysis is required, any amount proposed by the prospective contractor for the cost of money for facilities capital allowable under FAR 31.205–10 shall be deducted from the prenegotiation cost base objective before calculating the profit objective.

(e) The HCA is responsible for establishing procedures to ensure compliance with this subpart.

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Subpart 415.10-Preaward, Award

and Postaward Notifications,

Protests, and Mistakes 415.1070 Post-award conference.

If a postaward conference is necessary and in the Government's interest, the contracting officer shall insert a clause substantially the same as the clause at 452.215–76, Post-Award Conference, in cost-reimbursement and fixed-price service contracts. (53 FR 6063, Feb. 29, 1988)

416.203–4 Contract clauses.

An economic price adjustment clause based on cost indexes of labor or material may be used under the conditions listed in FAR 16.203 4(d) after approval by the Director, Office of Operations, and consultation with the Office of the General Counsel.

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(b) Prepare determination and findings substantially in accordance with the following format:

416.404 Cost-reimbursement-incentive




Authority to Use Cost Reimbursement-Type

Contract I hereby find that:

(1) The (contracting activity name) proposes to contract with (name of proposed contractor) for (describe work, service, or product) (identify program or project). The estimated cost is ($_) (if contract is CPFF type, insert, "plus a fixed fee of ($) which is — percent of the estimated cost of fee").

(2) (Set forth facts and circumstances that show why it is impracticable to secure property or services of the kind or quantity required without the use of the proposed type of contract or why the proposed method of contracting is likely to be less costly than other methods.)

I hereby determine that:

On the basis of the above findings it is impracticable to secure the property or services of the kind or quality required without the use of (cost, cost-sharing, or cost-plus-afixed-fee) type of contract, or the (cost, costsharing, or cost-plus-a-fixed-fee) method of contracting is likely to be less costly than other methods.


416.404–1 Cost-plus-incentive-fee con

tracts. In accordance with 416.301-3, determinations and findings authorizing the use of a cost-plus-incentive-fee contract under FAR 16.404-1 shall be signed by the contracting officer after compliance with the limitations in FAR 16.404-1(c). 416.404-2 Cost-plus-award-fee

tracts. This section establishes USDA policy and procedures for awarding and administering

cost-plus-award-fee (CPAF) type contracts.

(a) Applicability. (1) Contracting officers should consider those contract actions which conform to the use criteria at FAR 16.404–2(b) and which have a potential value of $5,000,000 or more as candidates for award as a CPAF contract. However, contracting officers may use CPAF contracts for requirements whose estimated value is less than $5,000,000.

(2) The formal procedures established in paragraphs (e), (f), and (g) of this section apply to contracts estimated to exceed $1,000,000. The simplified procedures prescribed in paragraph (h) of this section are authorized for CPAF contracts with a potential value of $1,000,000 or less.

(b) Objectives. The award fee contract, when properly applied, will satisfy three critical contracting objectives:

(1) It provides for the reimbursement of allowable, allocable, and reasonable costs;

(2) It fixes a dollar amount beyond the initial estimate of costs that represents the compensation for risk (base fee); and

(3) It motivates performance throughout the life of a contract where evaluated success can yield additional income (award fee). The CPAF contract is used when the work to be performed is such that specific quantitative objective measurement is not feasible and the required performance extends over a sufficient period of time for the award fee features to be used effectively.


416.306 Cost-plus-a-fixed-fee contracts.

The determinations and findings establishing the basis for application of the statutory fee limitation (see FAR 16.306(c)(2) and 15.903(a)) shall be signed by the contracting officer and may be combined with the determination and findings prescribed in FAR 16.301-3.

Subpart 416.4-Incentive


416.403 Fixed-price incentive con

tracts. Determinations and findings authorizing the use of a fixed-price incentive contract as described in FAR 16.403-1 through 16.403–2 shall be signed by the contracting officer after compliance with the limitations in FAR 16.403(C), 16.403–1(c) and 16.403–2(c), as appropriate.

(c) Fee limitations. Normally, the base fee should be not more than three percent of the estimated cost of the contract. (See FAR 15.903(d) for maximum fee limitations.) At the time of award, the contracting officer shall obligate the total amount of base and award fee. The contracting officer shall award the total award fee earned for the period being evaluated. The contracting officer shall not carry forward into a subsequent evaluation period any award fee not awarded in a previous evaluation period.

(d) Definitions and responsibilities. “Award fee plan” means a plan, developed by the Performance Evaluation Board (PEB), which identifies various categories of performance and clearly describes the criteria used by the PEB to evaluate contractor performance. The plan also allocates the award fee pool among performance categories.

“Award fee pool” means that portion of the contract fee set forth in the contract as the amount of fee available to be awarded for Contractor performance in accordance with the criteria contained in the award fee plan.

“Evaluation coordinator" means Government official appointed to receive, code, validate, and assess performance event reports; and to present such contractor performance information and data to the PEB.

“Fee determination official (FDO)” means the Chief of the contracting office who reviews the recommendation of the PEB and makes the final determination of the award fee.

“PEB executive secretary” means a Government official who prepares the official PEB report.

“Performance evaluation board (PEB)” means a board of Government officials, which performs the in-depth review of all aspects of contractor performance and recommends an appropriate fee to the FDO.

“Performance event (PE)” means a discrete happening or series of related happenings occurring during the course of performance which indicate or represent contractor performance. Performance events shall be reported by the performance monitors to the evaluation coordinator. The contractor may report performance events directly to the evaluation coordinator ei


ther as they occur or as a summary report for the evaluation period.

“Performance monitors" means those Government employees designated to observe, assess, and report the performance of the contractor on a close, continuous day-to-day basis. Performance monitors are to two categories: technical and business. The technical performance monitors report on the contractors performing the technical requirements of the contract. The business performance monitors report on the business aspects of the contractor's performance; these individuals will be the contracting officer and cost analyst most familiar with the specific contractual and financial aspects of the contract.

“Period of evaluation" means a segment of the contract's period of performance specified in the award fee plan which will be evaluated by the PEB for purposes of establishing the award fee for that period.

(e) Appointment of personnel. (1) The HCA will determine, in concert with the responsible program office, the participants in the award fee process. The contracting officer shall prepare the formal appointment memorandum and forward it to the HCA prior to issuance of the solicitation. Individuals shall be designated as follows:

(i) Chairperson, Performance Evaluation Board and Board Members. The Chairperson of the performance evaluation board shall be the director of the program initiating the procurement. A representative of the responsible contracts operation office shall be a voting member of all PEB's. The chairperson of the PEB and the contracting officer shall recommend other board members.

(ii) Evaluation Coordinator. As recommended by the chairperson of the PEB.

(iii) Executive Secretary. As recommended by the chairperson of the PEB.

(iv) Performance Monitors. The PEB chairperson shall assure that adequate performance monitoring capability is available. These individuals need not be designated in the appointment memorandum.

(2) If any changes in the composition of the PEB are necessary, the following approvals shall be obtained:

(i) Chairperson, PEB—by the FDO.

(ii) PEB members—by the Chairperson, PEB.

(f) Preparation of the award fee plan. The purpose of the award fee plan is to describe in one document the plan for monitoring, assessing, and evaluation contractor performance to determine any award fee earned. The PEB shall develop and follow an award fee plan which clearly describes the criteria to be used to determine fee. The PEB shall forward the plan through the contracting officer to the HCA for approval prior to issuance of the solicitation. The contracting officer shall include the award fee plan in the solicitation. A complete award fee plan should include the following elements:

(1) The base fee amount.
(2) The total award fee pool.

(3) Performance areas to be evaluated.

(4) Criteria to be used in evaluations.

(5) Relative weights to be assigned to performance areas and to the evaluation criteria.

(6) Frequency and timing of award fee determination.

(7) Proportion of the total award fee pool to be available for each evaluation period.

(8) Procedure to be followed (the timing involved) in evaluating performance and determining the award fee.

(g) Operation of the evaluation system(1) Performance event reporting. Performance monitors shall file their individual performance event reports directly with the evaluation coordinator for each interval specified in the award fee plan and in the following or similar format.

(i) Contract number.
(ii) Contractor.

(iii) Task order number (if applicable).

(iv) Date or inclusive period of reported event.

(v) Performance evaluation category.

(vi) Description of performance event and statement whether the contractor has been notified of the reported event.

(vii) Performance rating:

(A) Superior: "+" The performance event exceeds the satisfactory level.

(B) Satisfactory: "O" The performance event is acceptable.

(C) Substandard: “_” The performance event is less than satisfactory.

(viii) Signature and date.

(2) Significant performance event coordination. (i) The evaluation coordinator shall receive, validate, and assess the performance events (PE) reports submitted by the monitors and select all those PE's he/she considers to be significant, i.e., above (+) or below (-) satisfactory performance.

(ii) The evaluation coordinator shall also prepare separate PE summaries for each performance evaluation category. The summaries will incorporate the reported PE's which the coordinator considers significant, whether reported by the performance monitor or the contractor. The evaluation coordinator shall be responsible for preparing and presenting all material the PEB requires for its performance assessment. This material will serve as the PEB's agenda, and as the complete documentation package which will support the PEB's fee recommendation. It will be organized into separate sections for each performance evaluation category. Each section will consist of the following material:

(A) Summary of significant performance events, and

(B) The individual PE reports.

(3) Evaluation of performance. The PEB shall perform a review of the performance events against each performance evaluation category to arrive at the recommended award fee for each category as well as the total award fee for the period. The PEB must meet within 30 calendar days after the end of each evaluation period. At the initial PEB meeting the board members shall determine what fee the contractor would normally receive if the work was being undertaken on a Cost-Plus-FixedFee (CPFF) basis. After determining this amount, the PEB shall determine what percentage of the available award fee pool that, when added to the base fee, will equal the amount the contractor would receive under a CPFF contract. This percentage of award fee will set the baseline for satisfactory performance.

(4) The period of evaluation. The period of evaluation will be at least every six months. The desired period of evaluation will be every four months.


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