FSH 6309.32 - FEDERAL ACQUISITION REGULATION WO SUPPLEMENT 6309.32-2000-1 EFFECTIVE 02/11/2000 FOREST SERVICE ACQUISITION REGULATION PART 4G15 - CONTRACTING BY NEGOTIATION TABLE OF CONTENTS Sec. 4G15.002-70 Converting from Sealed Bidding to Negotiation Procedures. Subpart 4G15.2--Solicitation and Receipt of Proposals and Information 4G15.204 Contract Format. 4G15.204-1 Uniform Contract Format. Subpart 4G15.3--Source Selection 4G15.303 Responsibilities. 4G15.304 Evaluation Factors and Significant Subfactors. 4G15.305 Proposal Evaluation. 4G15.305-70 Past Performance Evaluation. 4G15.308 Source Selection Decision. 4G15.308-70 Formal Source Selection. Subpart 4G15.4--Contract Pricing 4G15.404-4 Profit. 4G15.406-3 Documenting the Negotiation. Subpart 4G15.6--Unsolicitated Proposals 4G15.606 Agency Procedures. PART 4G15 - CONTRACTING BY NEGOTIATION   4G15.002-70 Converting from Sealed Bidding to Negotiation rocedures. The acquisition official at a level above the contracting officer is authorized to permit the use of negotiation to complete an acquisition following the cancellation of an invitation for bids (4G14.404-70 and AGAR 415.103).   Subpart 4G15.2--Solicitation and Receipt of Proposals and Information 4G15.204 Contract format. 4G15.204-1 Uniform contract format. (c) See 4G14.201-1 for an optional condensed version of the contract size for offerors to complete when submitting a proposal.   Subpart 4G15.3--Source Selection 4G15.303 Responsibilities.     (a) Source selection authority for competitive negotiated acquisitions conducted in accordance with FAR Part 15 is designated as follows:         (1) The contracting officer is the source selection authority for:             (i) Level IIB and below contracting officers for acquisitions not to exceed $500,000, including all options, and;             (ii) Level IIIA and above contracting officers for acquisitions not to exceed $1,000,000, including all options.         (2) The chief of the contracting office is the source selection authority for acquisitions above $500,000 but not to exceed $1,000,000 (including all options), unless the contracting officer holds a Level IIIA or above warrant. Chiefs of the contracting office have some latitude on what information they request in support of the source selection approval request but they should consider requesting the same information, but not as detailed, as the HCA (4G15.308-70).         (3) The HCA is the source selection authority for acquisitions exceeding $1,000,000, including all options. The formal source selection procedures described in 4G15.308-70 shall be followed when the HCA is the source selection authority.         (4) When projects initially estimated to be within the acquisition dollars limits is suspected to exceed these after proposals are received, or at any time during the evaluation process, immediately contact the appropriate source selection official for direction on what actions should be taken to complete the procurement. These levels of authority also apply to those projects estimated to exceed that figure but awarded at below the level.   4G15.304 Evaluation factors and significant subfactors. (c)(1) Do not weigh cost or price factors. Show cost or price factors in terms of their relative importance in the award scheme and not as a weighted factor in a formula which mechanically and arithmetically combines price with technical points. (c)(4) Contracting officers may include a factor or significant subfactor to evaluate potential contractors that are or will subcontract with certified 8(a) firms or other small disadvantaged businesses. This procedure will be allowed until units have met their small business goals (Comp. Gen. B-223059, B-223243).   4G15.305 Proposal evaluation. 4G15.305-70 Past Performance Evaluation.     (a) An electronic database developed by the National Institutes of Health (NIH) for maintaining contractor performance information is required for use by Forest Service contracting officers. Access to the NIH Contractor Performance System (CPS) is provided by the USDA through its procurement internet site. Access the Forest Service Web (FSWeb, Intranet), Service-wide Acquisition Management webpage at http://fsweb.wo.fs.fed.us/aqm for instructions on use of the NIH database.      (b) Contracting officers must request user ID's for access to the CPS by submitting their name, mailing address, and phone number to the Washington Office, Acquisition Management Staff. This contracting officer information is electronically maintained in the NIH system. Changes to contracting officer information must be forwarded to the Washington Office CPS coordinator in the Acquisition Management Staff for updating the information in the NIH system.     (c) Contracting officers shall query the CPS for contractor performance information when evaluating past performance pursuant to FAR part 15.3. Use of the CPS provides a baseline of past performance information. Its use, however, does not relieve the contracting officer from the responsibility for requesting and considering additional performance information (including contacting references) as may be necessary to adequately evaluate past performance. See 4G42.15 on use of CPS for evaluating contractor performance on completed contracts.   4G15.308 Source selection decision.     (a) While adjectival ratings and point scores are useful as guides to decision-making, they generally are not controlling, but rather, must be supported by documentation of the relative differences between proposals, their weaknesses and risks, and the basis and reasons for the selection decision (Comptroller General's Decision B-279378, dated June 5, 1998, Century Environmental Hygiene, Inc.).     (b) Following source selection, the contracting officer shall prepare a memorandum of negotiation documenting the selection decision. It must show the relative differences among proposals and their strengths and weaknesses, and the basis and reason for the source selection. See Exhibit 15-1 for an example of this memorandum.   4G15.308-70 Formal Source Selection.     (a) Formal source selection requires: (1) a source selection plan must be approved by the source selection official prior to release of the request for proposal; and (2) the award decision must be made by a source selection official above the contracting officer.     (b) Use the "formal" source selection process for all competitive negotiated acquisitions exceeding $1,000,000 (FSAR 4G15.303(a)). The contracting officer must contact the Washington Office immediately upon realizing that an acquisition estimated to be less than the designation limit is going to exceed that amount. At this point, the HCA should identify what actions should be taken to complete the procurement. The formal source selection process is optional for contracts of less than $1,000,000.     (c) Source Selection Plan.         (1) The head of the contracting activity (HCA) is responsible for approving the source selection plan prior to release of the request for proposals (RFP) for acquisitions estimated to exceed $1,000,000. If time does not permit the prior approval, the CO must obtain oral approval from the HCA to submit the plan at the same time the RFP is released. If pre- solicitation conferences or preproposal conferences are scheduled, the plan must be approved prior to those conferences.         (2) The source selection plan should be tailored to each acquisition. At a minimum, it should include recommendations from the contracting officer on the source selection organization, that is, board composition and technical team or price team if used. The plan should include a summary of the acquisition planning and market research conducted to date, project description, milestone dates, description of the evaluation factors and basis of award, and description of source selection processes, negotiation strategies or techniques used, such as an oral presentation. A copy of the draft RFP should be submitted with the source selection plan.         (3) The source selection authority shall appoint an evaluation board before the request for proposals is issued. The board, which shall consist of at least three members, may appoint a technical and/or price evaluation team if additional expertise is required. The contracting officer serves as a board member only to monitor the evaluation process and to provide guidance on the evaluation procedure.     (d) Source Selection Decision.         (1) Documentation submitted to the HCA for source selection decisions must include a draft memorandum of negotiation.         (2) The evaluation board and responsible contracting officer shall submit the record of proposal evaluation and recommendation for award to the head of the contracting activity (HCA).         (3) The contracting officer must orally brief the source selection authority prior to any award which exceeds $5,000,000 or on any other award when the contracting officer and the local line officer consider it to be appropriate.     (e) Approval Request. All requests to the HCA for approval of either the Source Selection Plan or Award Recommendation shall be forwarded to the HCA (1) documented as described above, (2) with the recommendation of the contracting officer, (3) with the recommendation of the line officer involved (Regional Forester or Station Director), and (4) with a space for the HCA's approval. The bottom of the requesting letter should appear similar to: "For these reasons I recommend award to ABC Corporation." I.M. Certain February 30, 1999 Contracting Officer  Date I.M.N. Agreement February 30, 1999 Regional Forester    Date _________________________ ________________________ HCA      Date   Subpart 4G15.4--Contract Pricing 4G15.404-4 Profit.     (a) When cost and pricing data is obtained (FAR 15.403) contracting officers shall ensure that profit analysis is conducted in accordance with the FAR 15.404-4. Prior to awarding any contract in the amount of $500,000 or more, including all evaluated options, one copy of the profit analysis and the price/cost negotiation summary shall be sent to the Washington Office, Director of Acquisition Management for reviewing compliance with FAR 15.404-4.   4G15.406-3 Documenting the negotiation.     (a)(7) See Exhibit 15-2 for a brief example of a summary documentation.   Subpart 4G15.6--Unsolicitated Proposal 4G15.606 Agency procedures.     (b) The contracting officer for the unit concerned is responsible for receipt and handling of unsolicited proposals. Contracting officer responsibilities include:     (1) Providing an initial review of the unsolicited proposal in accordance with FAR 15.606-1(a).         (2) Receiving and acknowledging unsolicited proposals in accordance with FAR 15.606-1(b).         (3) Reviewing proposals for restrictions regarding the duplication, use, or disclosure of the proposal. Making additional copies for evaluation, if not restricted by the proposal. Number the extra copies and controlling and/or destroying them after they have served their purpose in the evaluation process.         (4) Designating an evaluation team to conduct a comprehensive evaluation in accordance with FAR 15.606-2.         (5) Returning unaccepted proposals with an explanation why the proposal was rejected (FAR 15.606-1(c) or FAR 15.607(a)).         (6) Documenting any resultant contract action with a Determination and Findings Report required by Title 41, United States Code, section 253(c)(1). If the determination does not support a sole source procurement, the contracting officer shall obtain the needed service or item through the competitive process. _____________________________________________________________________ Exhibit 15-1 Sample Memorandum of Negotiations   Proposals were received from 7 firms . . . (continue with introductory information). After evaluation, 3 firms were included in the competitive range. The initial analysis indicated:   FIRM TECHNICAL EVALUATION PRICE A 97 $570,000 B 92 $525,000 C 85 $500,000 Each proposal was discussed with the respective firm by telephone. We looked in some detail at the development of their prices and the relationship to their technical approaches. The major areas of concern/comment on each firm were:   Firm A:     (description) Firm B:     (description) Firm C:     (description)   Following these discussions, we requested Best and Final Offers. After receiving these, we reevaluated and the situation was:   FIRM TECHNICAL EVALUATION PRICE A 97 $565,000 B 94 $515,000 C 86 $505,000 Analysis of the proposals showed that the difference between firms "a" and "b" was primarily one of "superficial" quality. Firm "a" proposed a bit nicer finishing touches and intended to staff to provide a reaction time that, although nice, was not required. We did not feel these "nice-to-have" extras were worth $50,000. Although firm "c" could save us another $10,000, we did not feel that what we would give up would be worth the savings. Although firm "c"'s researchers were acceptably competent, they lacked experience in the special area of . . . which is key to this study. Both firms "a" and "b" would furnish researchers who had completed several projects of a similar nature. For these reasons, firm "b" was selected for award. _____________________________________________________________________ Exhibit 15-2 Sample Price/Cost Negotiation Summary   The following is a brief example of a summary documentation: Proposed Objective Negotiated Notes Labor $100,000 $80,000 $80,000 a Material $50,000 $45,000 $48,000 b Subtotal $150,000 $125,000 $128,000 Overhead 100% $150,000  80%   $100,000   90% $115,200 c Subtotal $300,000 $225,000 $243,200 Profit 25% $75,000 5% $11,000 10% $243,320 d Total $375,00 $236,250 $267,520 (If audit or revised proposals is involved there should be a column for them, also) Explanation of footnotes a- ........ b- ........ c- ........ d- ........ (Each footnote should explain why each party selected the numbers in the column and then what happened during negotiation to reach the negotiated column.) In the "proposed" column follow the contractor's format and describe how the proposal is justified by the contractor. The "objective" column must parallel the proposed column and should describe why and how the negotiator accepted or took exception to the contractor's position. These first two columns should be prepared prior to any discussions. The "negotiated" column is prepared after the negotiation and explains the Government's view as to the negotiated result. The contractor might only agree as to the bottom line result. Although discussions must involve specific issues, it is frequently better to avoid agreement on anything but the "bottom line." This permits more flexibility in negotiations, and the contractor's and Government's views of the resolution of element by element issues generally should not coincide. The data should be broken down as finely as the negotiation was.