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DLAD PART 15 – CONTRACTING BY NEGOTIATION



PART 15 – CONTRACTING BY NEGOTIATION

TABLE OF CONTENTS

SUBPART 15.1 – SOURCE SELECTION PROCESSES AND TECHNIQUES

15.101-90 Phased competition.

SUBPART 15.2 – SOLICITATION AND RECEIPT OF PROPOSALS AND INFORMATION

15.201 Exchanges with industry before receipt of proposals.

15.204 Contract format.

15.204-2 Part I – The Schedule.

15.204-3 Part II – Contract clauses.

15.204-4 Part III – List of documents, exhibits, and other attachments.

15.204-5 Part IV – Representations and instructions.

15.209 Solicitation provisions and contract clauses.

15.270 Peer reviews.

SUBPART 15.3 – SOURCE SELECTION

15.300-90 Scope.

15.301 Definitions.

15.303 Responsibilities.

15.304 Evaluation factors and significant subfactors.

15.304-90 Past performance evaluation and past performance information systems.

15.305-90 Proposal evaluation.

15.308-90 Source selection decision.

SUBPART 15.4 – CONTRACT PRICING

15.401 Definitions.

15.402 Pricing policy.

15.402-90 Pricing policy Emall.

15.402-92 Pricing policy – Sole-source items subject to limited competition.

15.403 Obtaining cost or pricing data.

15.403-1 Prohibition on obtaining cost or pricing data.

15.403-4 Requiring cost or pricing data.

15.404 Proposal analysis.

15.404-1 Proposal analysis techniques.

15.404-2 Information to support proposal analysis.

15.404-4 Profit.

15.405 Price negotiation.

15.406 Documentation.

15.406-1 Prenegotiation objectives.

15.406-3 Documenting the negotiation.

15.406-3-90 Documentation - Acquisition of Services.

15.407 Special cost or pricing areas.

15.407-1 Defective cost or pricing data.

15.408 Solicitation provisions and contract clauses.

15.408-90 Clauses and provisions.

SUBPART 15.6 - UNSOLICITED PROPOSALS

15.604-90 Handling of unsolicited proposals.

SUBPART 15.1 – SOURCE SELECTION PROCESSES AND TECHNIQUES

15.101-90 Phased competition.

SUBPART 15.2 – SOLICITATION AND RECEIPT OF PROPOSALS AND INFORMATION

(Revised September 20, 2012 through PROCLTR 2012-50)

15.201 Exchanges with industry before receipt of proposals.

15.204 Contract format.

15.204-2 Part I – The schedule.

15.204-3 Part II – Contract clauses.

Section I, Contract clauses. The contracting officer shall insert the clause at 52.214-9004, Subcontracting to other industrial preparedness planned producers, in solicitations and contracts whenever contracting without providing for full and open competition under authority of FAR 6.302-3. 10 U.S.C. 2304(c)(3).

15.204-4 Part III – List of documents, exhibits, and other attachments.

15.204-4(91) List of documents, exhibits, and other attachments.

Use 52.215-9017, List of Documents, Exhibits, and Other Attachments, in solicitations/ awards when a list of documents, exhibits, and other attachments that comprise the solicitation/award package is required. The contracting officer will identify the form number, title, date, and number of pages in each document.

15.204-5 Part IV Representations and instructions.

15.204-5-90 Solicitations and awards over the simplified acquisition threshold – provisions and clauses.

(b) Section M or equivalent, Evaluation factors for award. A provision substantially as provided at 52.214-9002, Trade Discounts, may be included in requests for proposals and requests for quotations when appropriate. See 14.201-5 for the effect of this provision.

15.209 Solicitation provisions and contract clauses.

15.270 Peer review.

Refer to 1.170 for Defense Procurement and Acquisition Policy (DPAP) peer review requirements.

SUBPART 15.3 – SOURCE SELECTION

(Revised September 20, 2012 through PROCLTR 2012-50)

15.300-90 Scope.

The DoD Source Selection Procedures (SSP) as supplemented in PGI 15.300-90 and Appendix C, which contains standardized templates with instructions, are mandatory and shall be used for all best-value, negotiated, competitive acquisitions under FAR Part 15, including low-price/technically-acceptable procurements, unless one of the exemptions in DoD SSP is applicable. . The DoD SSP procedures can be found at https://dap.dau.mil/policy/Lists/Policy%20Documents/ Attachments/3268/SourceSelectionProcedures.pdf. In situations that are not addressed in the DoD SSP, contracting officers shall ensure the situation is adequately addressed in the source selection plan and when appropriate in the solicitation. These situations shall also be brought to the attention of the contracting activity’s chief of policy.

15.301 Definitions.

“Preaward survey (PAS) evaluation factor” is an amount of money which is added solely for evaluation purposes to the offer of an apparently successful offeror whose performance history normally dictates the conduct of a preaward survey.

“Source inspection evaluation factor” is a fixed amount of money added solely for evaluation purposes to the offer of an apparently successful offeror with a history of delivering nonconforming material on destination-assigned contracts/purchase orders.

15.303 Responsibilities.

The Director, DLA Acquisition (J7) has delegated the authority to appoint the source selection authority, if other than the contracting officer, to the chief of the contracting office (CCO). (See 2.101 for the designation of the CCO at each of the contracting activities or offices). This delegation is not further delegable. Notwithstanding this delegation, the Director, DLA Acquisition (J7) reserves the right to designate the source selection authority for acquisitions on an exception basis, including acquisitions subject to IARB review (see 1.690). FAR Part 3 provides guidance regarding improper business practices and personal conflicts of interest that must be considered in the conduct of an acquisition.

15.303-90 Acquisitions and the source selection authority.

15.303-91 Head of the Contracting Activity role.

For all acquisitions (regardless of dollar value), if the Head of the Contracting Activity (HCA) is the approving official for the acquisition (in accordance with the thresholds at 1.690), he/she shall not also serve as the SSA on that same acquisition.

15.304 Evaluation factors and significant subfactors.

(ii) Solicitation provisions. Include the provisions at 52.215-9004, AbilityOne Entity Proposal, and 52.215-9005, AbilityOne Entity Support Evaluation, or similar provisions, in all unrestricted solicitations.

(iii) Contract clause. A clause substantially the same as the one at 52.215-9006, AbilityOne Entity - Contractor Reporting, shall be included in each contract for which the successful offeror submitted an AbilityOne entity subcontracting proposal with its offer.

(iv) Evaluation.

15.304-90 Past Performance Evaluation and Past Performance Information Systems.

15.304-91 Solicitation for an item producible with facilities.

Insert 52.215-9015, Production Capacity - DLA Troop Support – Clothing and Textiles, in clothing and textile (C&T) solicitations when a solicitation calls for an item producible with facilities that also could be used for the production of other items being purchased simultaneously under a separate solicitation.

15.305-90 Proposal evaluation.

15.308-90 Source selection decision.

Information for the source selection decision is provided at PGI 15.300-90 and Appendix C.

15.308-91 [Reserved.]

15.308-92 [Reserved.]

15.308-93 Competitive negotiated solicitations using source selection procedures and use of product demonstration models.

Use 52.215-9020, Instructions for Submitting Product Demonstration Models (PDM), for supply chains at DLA Troop Support in competitive negotiated solicitations using source selection procedures when product demonstration models (PDMs) are used. The buyer or contracting officer needs to check-off paragraph (c) when using the PDM as a “manufacturing standard” or allow the contractor to utilize “alternate” material in the PDM. However, they should not be used together. This provision only applies to the supply chains at DLA Troop Support .

15.308-94 Solicitations for medical equipment and instruments.

Use 52.215-9019, Operational Capability Demonstration, in solicitations for medical equipment and instruments when recommended by cognizant technical personnel/the requiring activity, and best value source selection evaluation procedures will be used. Use this clause when the acceptability of the item(s) offered can be evaluated by the written technical proposal alone, but an operational capability test is needed to functionally test the item(s) prior to award.

SUBPART 15.4 – CONTRACT PRICING

(Revised December 13, 2012 through PROCLTR 2013-15)

15.401 Definitions.

“Attribute acceptance sampling.” Attribute acceptance sampling is typically used for evaluating a contractor’s internal controls. This includes the evaluation of policies, procedures, and practices to determine the adequacy of internal controls for detecting and preventing operational deficiencies. some level of non-compliance that can be tolerated. Attribute acceptance sampling is designed to discern whether non-compliance is within tolerable limits. Attribute acceptance sampling is not designed to identify questionable costs or the reasonableness of prices included in a contractor’s catalog. For purposes of DoD EMALL contracting personnel will use variable sampling as described below to support price reasonableness determinations.

“Catalog price.” A catalog price means a price included in a catalog, price list, schedule, or other form that is regularly maintained by the manufacturer or vendor, is either published or otherwise available for inspection by customers, and states prices at which sales are currently, or were last, made to a significant numbers of buyers constituting the general public (FAR 2.101).

“Commercial catalog.” A commercial catalog is a catalog of items meeting the FAR 2.101 definition of commercial item.

“Confidence level.” Confidence level is the assurance (or probability) that the amount being estimated by the sample will fall within a specified range (or interval) determined from sample results. A confidence interval is commonly defined as the point estimate plus or minus the precision amount. A 95 percent confidence level indicates that with repeated sampling under the same sampling plan, 95 times out of 100 the actual universe is expected to be within the interval computed from the sample results. This means that any single sample has a 95 percent chance of producing an interval that includes the actual universe amount. For a given sample size, the more confident an evaluator wants to be that the confidence interval contains the true amount, the wider the interval must be.

"Cost or pricing data" also encompasses decrement factor information.

"Decrement factor information" is the historical data necessary to determine the average difference between vendors' and subcontractors' proposed prices and the actual prices negotiated by the contractor with a specific supplier, all suppliers, or suppliers for a specific contract, commodity, or commodity group.

“Dollar unit sampling.” Dollar unit sampling is a substitute for stratification by dollar amount. In general, the two approaches are roughly similar in what they can accomplish. Dollar unit sampling does have an advantage in dealing with selected items that prove to be clusters of smaller physical units. Dollar unit sampling’s selection probability proportional to size feature concentrates the sampling evaluation towards larger items much the same as stratification does for physical unit sampling. Collectively, the dollars making up an item give that item a chance of selection proportionate to its size in the universe. Dollar interval selection is used to select dollar unit sampling samples. Dollar unit sampling implies that “dollar units” or “dollar hits” as opposed to physical units are being sampled. Physical units, such as invoices or price lists, are the sampling unit, with the sample items being identified by the dollar hits. In order to evaluate a dollar hit the item or the cost of the physical unit, containing the dollar hit must be analyzed.

“Exclusive dealers.” When original equipment manufacturers (OEMs) use exclusive distributors/dealers to sell their products, the Government usually must buy these products directly from the exclusive distributor/dealer. In these situations, the exclusive dealers are functioning as prime contractors, and the OEMs as subcontractors.

“EZ-Quant.” EZ-Quant is statistical software developed and used by the Defense Contract Audit Agency (DCAA) and other Government agencies in evaluation of large universes of data such as a contractor bill of material. DLA contracting personnel will use EZ-Quant in performance of statistical sampling for DoD EMALL catalogs because of its wide acceptance within both the Government and contractor community.

“Inferential or inductive statistics.” Inferential or inductive statistics are methods of using sample data taken from a statistical population to make actual decisions, predictions, and generalizations related to an area of interest. In contract pricing, stratified sampling of a proposed bill of materials is used to infer the degree it is overpriced or under-priced.

“Precision.” The term “precision” pertains to the amount or degree of probable error associated with an estimate or the extent to which the sample findings may differ from the actual universe values or conditions. It measures the accuracy of a point estimate by showing, for a specified confidence level, how much the point estimate may vary from the true universe amount. In sampling for variables, precision can be expressed as either an interval about the point estimate obtained from the sample; or a maximum or upper limit such as less than $25 or less than 5 percent error. In most cases, the primary consideration influencing the evaluator’s selection of a desired level of precision will be the potential effect of the error on Government contract costs.

“Price reasonableness codes” (PRCs) are two digit codes comprised of a “reviewer” code to identify the functional specialist(s) performing/participating in the price review; followed by a “type analysis” code to distinguish the nature of the price or cost analysis performed in support of the contracting officer’s price reasonableness determination (see PGI 15.406-3(a)(11)).

“Desired precision amount.” Desired precision amount is the amount of sampling error, stated as a dollar or percentage amount that is considered acceptable by the evaluator.

“Population.” A population is the set of all possible observations of a phenomenon with which we are concerned. All the part numbers in an offeror’s commercial catalog would constitute a population. A numerical characteristic of a population is called a parameter.

“Random selection.” Random selection is a key principle in statistical sampling. To select randomly is to eliminate personal bias or subjective considerations, which cannot be expressed numerically, from the choice of a sample. Random sampling is a selection process in which each item in a stratum has a known probability (chance) of being selected.

“Sample.” A sample is a subset of the population of interest that is selected in order to make some inference about the whole population. For example, part numbers randomly selected from an offeror’s commercial catalog would constitute a sample. A numerical characteristic of a sample is called a statistic.

“Sampling frame.” A sampling frame is the physical (or electronic) representation of the sampling units from which the sample is actually selected. In sampling for variables, examples of sampling frames include a computer listing of a consolidated bill of materials, or a file of vouchers. For these sampling frames, possible sampling units are a part number, or physical voucher respectively.

“Significance level.” The significance level is equal to 1.00 minus the confidence level. If the confidence level is 95 percent, the significance level is 5 percent. The significance level is then the area outside the interval which is likely to contain the population mean. Setting the significance level depends on the amount of risk you are willing to accept that the confidence interval does not include the true population mean. As the amount of risk that one is willing to accept decreases, the confidence interval will increase. In other words, to be surer that the true population mean is included in the interval, widen the interval.

“Statistical reliability.” Statistical reliability of sample findings is measured by two interrelated parameters, precision and confidence level. The evaluator must establish desired values of these parameters for either approach as a physical unit or dollar unit for variable sampling.

“Statistics.” Statistics is a science which involves collecting, summarizing, analyzing, and interpreting data in order to facilitate the decision making process. Statistical sampling is the preferred method of evaluation of less than 100 percent review of universe data. Statistical sampling is preferred over non-statistical (judgmental) sampling because of its advantages, which include objectivity, overall defensibility, and measurability of risk of substantial or material sampling error.

“Stratification.” Stratification is the partitioning of the evaluation universe into smaller groups according to a scheme that suits evaluation purposes. The evaluation universe consists of all of the transactions or other basic items within the scope of the evaluation. Stratification does not change the evaluation universe. Stratification is primarily used in variable sampling, and is rarely used in attribute sampling. The usual purpose of stratification is to enhance sampling precision, and thereby decrease the amount of evaluator time required to obtain adequate support for the evaluator’s conclusions.

“Universe.” A “universe” is a group of items or transactions from which information is desired. For purposes of PGI 15.402-91 the term “universe” will refer to the “sampling universe,” the group of items which remains after the large dollar or sensitive transactions have been stratified or segregated for complete as opposed to partial evaluation.

“Variable sampling.” Variable sampling is generally used to verify account balances or cost elements and note any differences. This type of sampling is substantive testing (as opposed to compliance testing) whereby sample items are evaluated for error amounts or variables (as opposed to attributes). The evaluation sampling universe is the entire grouping of items from which a sample will be drawn. Variable sampling can be applied to proposals, incurred costs, and contractor catalog prices.

15.402 Pricing policy.

Contracting officers must adhere to the following policy.

15.402-90 Pricing policy – exclusive dealers.

15.402-91 Pricing policy – EMALL.

15.402-92 Pricing policy – sole-source items subject to limited competition.

15.403 Obtaining cost or pricing data.

15.403-1 Prohibition on obtaining cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. 254b).

215.403-1(c)(4)(1).

15.403-3 Requiring information other than cost or pricing data.

15.403-4 Requiring cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. 254b).

15.403-5 Instructions for submission of cost or pricing data or information other than cost or pricing data.

15.404 Proposal analysis.

15.404-1 Proposal analysis techniques.

15.404-2 Information to support proposal analysis.

15.404-3 Subcontract pricing considerations.

15.404-4 Profit.

15.404-71-4 Facilities capital employed.

15.404-73 Alternate structured approaches.

15.405 Price negotiation.

15.406 Documentation.

15.406-1 Prenegotiation objectives.

15.406-2 [Reserved.]

15.406-3 Documenting the negotiation.

15.406-3-90 Acquisition of services.

15.407 Special cost or pricing areas.

15.407-1 Defective cost or pricing data.

15.407-5 Estimating systems.

Refer to DFARS 215.407-5-70, Disclosure, Maintenance, and Review Requirements, 215.407-5-70(g)(2)(vi) and (3). See also subpart 17.92.

15.408 Solicitation provisions and contract clauses.

15.408-90 Clauses and provisions.

15.408-91 Clause – indefinite delivery type contract.

Use clause 52.215-9024, State Minimum Price Regulations, in solicitations for solicitations for milk indefinite delivery type contracts.

SUBPART 15.6 - UNSOLICITED PROPOSALS

(Revised on August 21, 2012 through PROCTLR 2012-47)

15.604-90 Handling of Unsolicited Proposals.

See PGI 15.604-90 for procedures for handling unsolicited proposals.

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