Multiple Technical Proposals. In the first step of this two-step procurement, offerors are authorized and encouraged to submi multiple technical proposals presenting dif ferent basic approaches. Each technical proposal submitted will be separately evaluated and the offeror will be notified as to its acceptability.

(b) Receipt and evaluation of technical proposals. The following actions will be taken with respect to receipt and evaluation of technical proposals:

(1) Every precaution shall be taken to safeguard technical proposals against disclosure to unauthorized per

sons.

(2) Any reference to price or cost will be removed.

(3) Technical evaluation of the proposals will be based upon the criteria contained in the request for technical proposals and such evaluation will not include consideration of capacity or credit as defined in § 1-1.708.

(4) Technical proposals will be categorized as acceptable or unacceptable. Proposals will not be categorized as unacceptable when a reasonable effort on the part of the Government could bring the proposals to an acceptable status and increase competition. The contracting officer shall arrange for any necessary discussions with sources submitting technical proposals for the purpose of obtaining additional information or clarification which may be required. When, after discussion and submission of necessary information and clarification, technical proposals are determined to be acceptable, they will 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 no discussions of it need thereafter be initiated.

(5) Upon final determination that a technical proposal is unacceptable, the contracting officer shall notify the source submitting the proposal of that fact. The notice shall indicate, in general terms the basis for such determination including statement of whether rejection was based on failure to furnish sufficient information or an unacceptable engineering approach. (c) [Reserved]

a

(d) Discontinuance. If, as a result of the evaluation of technical proposals,

it appears necessary to discontinue the two-step advertising method of procurement, the full facts and circumstances will be set forth in writing and submitted to the office which originally approved the method of procurement. If that office approves the discontinuance, each source will be notified in writing of the discontinuance and the reasons therefor.

§ 1-2.503-2 Step Two.

Upon completion of Step One, a formally advertised procurement in accordance with Subparts 1-2.2, 1-2.3, and 1-2.4 will be conducted, except that invitations for bids

(a) 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.

(b) Will include the following statement:

This invitation for bids is issued pursuant to two-step formal advertising procedures in subpart 1-2.5 of the Federal Procurement Regulations. 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 re

quest for technical proposals) Any bidder who has submitted 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.

(c) 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:

Radio antenna, in accordance with Exhibit No. dated (use other description of specifications as appropriate) (insert and your Technical Proposal 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).

1-3.1215-1-3.1217 [Reserved]

1-3.1218 Modification or withdrawal of applicability. [Reserved]

1-3.1219 Guidance for implementation. 1-3.1220 Standards prescribed by the Cost Accounting Standards Board. 1-3.1220-1 Consistency in estimating, accumulating, and reporting costs. 1-3.1220-2 Consistency in allocating costs incurred for the same purpose. 1-3.1220-3 Allocation of home office expenses to segments.

1-3.1220-4 Capitalization of tangible assets. 1-3.1220-5 Accounting for unallowable

costs. 1-3.1220-6 Cost accounting period. 1-3.1220-7 Use of standard costs for direct material and direct labor.

1-3.1220-8 Accounting for costs of compensated personal absence.

1-3.1220-9 Depreciation of tangible capital

procurement by negotiation. As directed by statute (see § 1-2.102(c)), agencies shall not negotiate pursuant to section 3709 of the Revised Statutes, but shall comply with the negotiation requirements of Title III of the Federal Property and Administrative Services Act of 1949 (hereafter referred to in this Part 1-3 as "the Act"), unless otherwise authorized by law.

[31 FR 348, Jan. 12, 1966]

Subpart 1-3.1-Use of Negotiation § 1-3.100 Scope of subpart.

This subpart deals with the nature and use of negotiation as distinguished from formal advertising (see Part 1-2), and with limitations upon that use.

§ 1-3.101 General requirements for negotiation.

(a) No procurement in excess of $10,000 shall be made by negotiation if the use of formal advertising is possible and practicable under the existing conditions and circumstances even though such conditions and circumstances would otherwise satisfy the requirements of Subpart 1-3.2.

(b) No contract shall be entered into as a result of negotiation unless or until the following requirements have been satisfied:

(1) The contemplated procurement comes within one of the circumstances permitting negotiation enumerated in Subpart 1-3.2;

(2) Any necessary determinations and findings have been made (see Subparts 1-3.2 and 1-3.3);

(3) Such clearance or approval as is prescribed by applicable agency procedures has been obtained; and

(4) The prospective contractor has been determined to be responsible in accordance with Subpart 1-1.12.

(c) Whenever property or services are to be procured by negotiation, proposals shall be solicited from the maximum number of qualified sources, including small business concerns (see § 1-1.702(b)(3)), consistent with the nature of and requirements for the supplies or services to be procured, in accordance with the basic policies set forth in this Part 1-3, to the end that the procurement will be

made to the best advantage of the Government, price and other factors considered. Proposals shall be supported by statements and analyses of estimated costs or other evidence of reasonable prices and by such information concerning other vital matters as is deemed necessary by the contracting officer (see § 1-3.807). Unless award without written or oral discussion is permitted under § 1-3.805-1(a), negotiation shall thereupon be conducted in accordance with § 1-3.805, with due attention being given to the factors in § 1-3.102 and any other appropriate factors.

This

(d) Negotiated procurement shall be on a competitive basis to the maximum practical extent. When a proposed procurement appears to be noncompetitive, the procuring activity is responsible not only for ensuring that competitive procurement is not feasible but also for acting whenever possible to avoid the need for subsequent noncompetitive procurements. action shall include both examination of the reasons for the procurement being noncompetitive and steps to foster competitive conditions for subsequent procurements, particularly as to the availability of complete and accurate data, reasonableness of delivery requirements, and possible breakout of components for competitive procurements. Except for procurement of electric power or energy, gas (natural or manufactured), water, or other utility services, and procurement of educational services from nonprofit institutions, contracts of more than $10,000 shall not be negotiated on a noncompetitive basis without prior review at a level higher than the contracting officer to ensure compliance with this § 1-3.101(d).

[29 FR 10155, July 24, 1964, as amended at 36 FR 17421, Aug. 31, 1971; 40 FR 44138, Sept. 25, 1975; 43 FR 46302, Oct. 6, 1978]

§ 1-3.102 Factors to be considered in negotiating contracts.

During the course of negotiations, due attention shall be given to the following and any other appropriate factors:

(a) Comparison of prices quoted and consideration of other prices for the same or similar property or services,

with due regard to production costs, including extra pay shift, multi-shift and overtime costs and any other factor relating to the price, such as profits, cost of transportation, and cash discounts.

(b) Comparison of the business reputation, capacity, and responsibility of the respective persons or firms who submit offers.

(c) Consideration of the quality of the property or services offered, including the same or similar property or services previously furnished, with due regard to conformance with specification requirements.

(d) Consideration of delivery requirements.

(e) Discriminating use of price and cost analyses.

(f) Investigation of price aspects of any important subcontract.

(g) Individual bargaining, by mail or by conference.

(h) Consideration of cost sharing. (i) Effective utilization in general of the most desirable type of contract.

(j) Consideration of the size of the business concern.

(k) Consideration as to whether the prospective supplier requires expansion or conversion of plant facilities.

(1) Consideration as to whether the prospective supplier is located in a surplus or scarce labor area.

(m) Consideration as to whether the prospective supplier will have an adequate supply of qualified labor.

(n) Consideration of subcontracting, with the extensive use of small business subcontractors being considered a favorable factor.

(0) Consideration of the existing and potential workload of the prospective supplier.

(p) Consideration of broadening the industrial base by the development of additional suppliers.

(q) Consideration of whether the contractor requires Government furnished property, machine tools, or facilities.

§ 1-3.103 Dissemination of procurement

information.

(a) Synopses of proposed procurements and contract awards shall be prepared and publicized in the Department of Commerce "Synopsis of U.S.