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UNIVERSITY OF MICHIGAN

3 9015 04736 7506

MARCH 1970

245

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Subpart 5—Two-Step Formal Advertising 2.501 General. Two-step formal advertising is a method of procurement designed to expand the use and obtain the benefits of formal advertising where inadequate specifications preclude the use of conventional formal advertising. It is especially useful in procurements requiring technical proposals, especially those for complex items. It is conducted in two steps:

(i) Step one consists of the request for, and 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 includes engineering approach, special manufacturing processes, and special testing techniques. When it is necessary in order to clarify basic technical requirements, related requirements such as management approach, manufacturing plan, or facilities to be utilized may be clarified in this step. Conformity to the technical requirements is resolved in this step, but capacity and credit, as

defined in 1.705–4, are not. (ü) Step two is a formally advertised procurement confined to those who

submitted acceptable technical proposals in step one. Bids submitted in step two are evaluated and the awards made in accordance

with Subparts 3 and 4 of this Part. Two-step formal advertising requires that the contracting officer work closely with technical personnel and that he utilize their specialized knowledge in determining the technical requirements of the procurement, in determining the criteria to be used in evaluating technical proposals, and in making such evaluation. An objective of this method is to permit the development of a sufficiently descriptive and not unduly restrictive statement of the Government's requirement, including an adequate technical data package, so the subsequent procurements may be made by conventional formal advertising.

2.502 Conditions for Use. Two-step formal advertising shall be used in preference to negotiation when all of the following conditions are present, unless other factors require the use of negotiation;

(i) available specifications or purchase descriptions are not sufficiently

definite or complete or may be too restrictive, and the listing of the salient characteristics in a "brand name or equal” description would likewise be too restrictive, to permit full and free competition without technical evaluation, and any necessary discussion, of the technical aspects of the requirement to insure mutual understanding

between each source and the Government; (ü) definite criteria exist for evaluating technical proposals, such as

design, manufacturing, testing, and performance requirements, and special requirements for operational suitability and ease of

maintenance; (iii) more than one technically qualified source is expected to be

available; (iv) sufficient time will be available for use of the two-step method; and

NASA PROCUREMENT REGULATION

( 2.502 PROCUREMENT BY FORMAL ADVERTISING

(v) a firm fixed-price contract or a fixed-price contract with escalation

will be used. 2.503 Procedures. 2.503-1 Step One.

(a) A request for technical proposals shall be distributed to qualified sources in accordance with 1.302–2. In addition, the request shall be synopsized in accordance with Part 1, Subpart 10 of this Regulation and publicly posted in accordance with 2.203–2. The request may be in the form of a letter and shall contain, as a minimum, the following information:

(i) the best practicable description of the supplies or services required; (ii) notification of the intent to conduct the procurement in two

steps and the actions involved; (iii) the requirements of the technical proposal, i.e., the necessary

details such as drawings, data, presentations, etc., to be submitted; (iv) the criteria for evaluating the technical proposal (2.502 (i)); (v) a statement that the technical proposals shall not include prices

or pricing information; (vi) the date by which the proposal must be received and a statement

substantially as follows:

LATE TECHNICAL PROPOSALS. (JANUARY 1964) The Government reserves the right to consider technical proposals or modifications

thereof received after the date specified for receipt. (vii) a statement that the Government may discuss the technical

aspects of the proposal with the concern submitting the proposal; (viii) 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; (ix) a statement that each source submitting an unacceptable tech

nical proposal will be so notified upon completion of the technical evaluation of his proposal, and final determination of such un

acceptability; and (x) a statement either that only one technical proposal may be sub

mitted by each offeror or that multiple technical proposals may be submitted. When compliance with specifications permits 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. (JANUARY 1964) In the first step of this two-step procurement, offerors are authorized and encouraged to submit multiple technical proposals presenting different basic approaches. Each technical proposal submitted will be separately evaluated and the offeror will be notified as to its acceptability.

TWO-STEP FORMAL ADVERTISING

(b) Upon the receipt of technical proposals:
(i) every precaution shall be taken to safeguard technical proposals

against disclosure to unauthorized persons;
(ü) technical proposals submitting data marked in accordance with

3.109 will be accepted and handled in accordance with that para

graph; and
(iii) any references to price or cost will be removed;

(c) Technical evaluation of the proposals shall be based upon the criteria contained in the request for technical proposals and such evaluation shall not include consideration of capacity or credit (see 1.705-4). Upon completion of the technical evaluation, each proposal shall be categorized as acceptable or unacceptable. Proposals shall not be categorized as unacceptable when a reasonable effort on the part of the Government to obtain clarification or additional information could bring the proposals to an acceptable status and thus increase competition. The contracting officer shall arrange for any necessary discussions with sources submitting technical proposals. When, after discussion, clarification, and submission of necessary documentation for incorporation in the proposal, technical proposals are determined to be acceptable, they shall 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 further discussion of it is unnecessary.

(d) Upon final determination that a technical proposal is unacceptable, the contracting officer shall promptly notify the source submitting the proposal of that fact. The notice shall state that revision of his proposal will not be considered, and shall indicate, in general terms, the basis for the determination for example, that rejection was based on failure to furnish sufficient information or on an unacceptable engineering approach.

(e) If, as a result of the evaluation of technical proposals, it appears necessary to discontinue two-step formal advertising, a statement setting forth the full facts and circumstances shall be made a part of the contract file. Each source will be notified in writing of the discontinuance and the reason therefor. When step one results in no acceptable technical proposal or only one acceptable technical proposal, the procurement may be continued by negotiation under the authority of 3.210–2(ii). (But see 3.210–3.)

2.503–2 Step Two. Upon completion of Step One, a formally advertised procurement in accordance with Subparts 2, 3, and 4 of this part will be conducted, except that invitations for bids

(i) 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;
(ü) will include the following statement:

This invitation for bids is issued pursuant to Two-Step formal advertising set forth in Part 2, Subpart 5, of the NASA Procurement Regulation.

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 request for technical proposals). Any bidder who has submitted PROCUREMENT BY FORMAL ADVERTISING 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. (JANUARY 1964) (ii) 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:

Radar 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). (iv) will not be synopsized or publicly posted except that the names of

firms which have submitted acceptable technical proposals in the first step of Two-Step formal advertising will be listed in the Commerce Business Daily for benefit of prospective subcontractors in accordance with 1.1003-6(2).

2.503–2

NASA PROCUREMENT REGULATION

PART 3-PROCUREMENT BY NEGOTIATION

Table of Contents

Paragraph 13.000 Scope of Part.--

Page 301

Subpart 1–Use of Negotiation

3.100 Scope of Subpart...

301 3.101 General Requirements for Negotiation.--

301 3.102 Factors To Be Considered in Negotiated Procurements.-

301 3.103 Records and Reports of Negotiated Contracts.--

304 3.104 Aids to Small Business in Negotiated Procurement..

304 3.105 Aids to Labor Surplus Area Concerns in Negotiated Procurement. 304 3.106 Dissemination of Procurement Information..

304 3.106–1 Synopses of Proposed Procurements.

304 3.106-2 Synopses of Contract Awards..

304 3.106-3 Award Information to Unsuccessful Offerors. 304 3.106-4 Disclosure of Information Prior to Selection of Contractor.

304. 1 3.106-5 Release of Contractor Award Information.

304. 1 3.107 [Reserved)..

304. 1 3.108 [Reserved] ..

304. 1 3.109 Restrictions on Data and Other Information Included Solicited Proposals

304. 1 3.110 Solicitations for Informational or Planning Purposes.

304. 2 3.111 Protests Against Award..-

304. 2 3.112 Disclosure of Mistakes After Award..

304. 2

Subpart 2—Circumstances Permitting Negotiation
3.200 Scope of Subpart..
3.201 National Emergency.

3.201–1 Authority -
3.201–2 Application....

3.201-3 Limitation. 3.202 Public Exigency -

3.202–1 Authority
3.202–2 Application..-

3.202–3 Limitation..
3.203 Purchases Not in Excess of $2,500.-

3.203-1 Authority

3.203—2 Application..
3,204 Personal or Professional Services -

3.204–1 Authority --
3.204–2 Application...

3.204-3 Limitation.. 3.205 Services of Educational Institutions...

3.205–1 Authority.
3.205–2 Application...
3.205-3 Limitation..

305 305 305 305 305 305 305 305 306 306 306 306 306 306 306 307 307 307 307 307

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