# AFARS PART 5115

- 5115.000 -- Scope of part.
- 5115.001 -- Definitions.

- Subpart 5115.1 -- Source Selection Processes and Techniques

- 5115.101 -- Best value continuum.

- 5115.101-1 -- Tradeoff process.

- Subpart 5115.2 -- Solicitation and Receipt of Proposals and Information

- 5115.201 -- Exchanges with industry before receipt of proposals.
- 5115.204 -- Contract format.

- 5115.204-2 -- Part I -- The Schedule.

- 5115.303 – Responsibilities.
- 5115.304 -- Evaluation factors and significant subfactors.
- 5115.305 -- Proposal evaluation.
- 5115.306 -- Exchanges with offerors after receipt of proposals.
- 5115.308 -- Source selection decision.
- 5115.403 – Obtaining cost or pricing data [AFARS Revision #23, dated May 16, 2008]

- 5115.403-1 – Prohibition on obtaining cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. 254b [AFARS Revision #23, dated May 16, 2008]
- 5115.403-3 – Requiring information other than cost or pricing data [AFARS Revision #23, dated May 16, 2008]

- 5115.406 – Documentation.

- 5115.406-1 -- Prenegotiation objectives.
- 5115.406-3 -- Documenting the negotiation.
- 5115.407-4 -- Should-cost review.

- Subpart 5115.6 -- Unsolicited Proposals

- 5115.606 -- Agency procedures.

AFARS -- Part 5115
Contracting by Negotiation

5115.000 -- Scope of part.

This Part contains only minimum essential policies and procedures. It does not attempt to restate polices contained in the FAR and DFARS or to duplicate the many excellent public documents that provide more detailed procedures and “how-to” information. The Army Source Selection Manual (ASSM) (AFARS Appendix AA) contains detailed guidance on the source selection process. This manual contains information on the source selection processes and techniques that will be used for competitive, negotiated acquisitions, whether conducted as a formal or informal source selection. For exceptions see the ASSM, Chapter 1, under Scope.

The ASSM is a comprehensive source selection resource which recites best practices that promote source selection flexibility and consistency in Army source selections. Army personnel shall use the ASSM resource when conducting competitive Source Selections. The extent to which you will use the processes and techniques described in this manual will depend upon the complexity and dollar value of each acquisition and your available resources. When using the ASSM, however, apply prudent business sense to tailor the processes to fit your circumstances.

[AFARS Revision #21, dated May 22, 2007]

5115.001 -- Definitions.

Formal source selection means the source selection process used where someone other than the procuring contracting officer is the Source Selection Authority (SSA), normally for high dollar value or complex acquisitions. [AFARS Revision #21, dated May 22, 2007]

Subpart 5115.1 -- Source Selection Processes and Techniques

5115.101 -- Best value continuum.

(S-90) In using the best value approach, the Army seeks to award to an offeror who gives the greatest confidence that it will best meet the requirements affordably. This may result in an award being made to a higher rated, higher priced offeror where the decision is consistent with the solicitation’s evaluation factors and the Source Selection Authority (SSA) reasonably determines that the technical superiority and/or overall business approach and/or superior past performance of the higher priced offeror outweighs the cost difference. The SSA, independently exercising prudent business judgment, arrives at a Source Selection Decision based on the offeror(s) who proffers the best value to the Government. The SSA shall not receive a recommendation from any individual or body as to whom shall receive the award and additionally shall not receive a rank order or order of merit list pertaining to the offers being evaluated.

If threshold and objective performance requirements are identified in the Request for Proposals (RFP), the Army must communicate to offerors (a) how evaluation of objective performance requirements will be accomplished and (b) to the extent that performance above the threshold requirement is achieved, how the offeror will be credited for such performance. The Source Selection Evaluation Board, in conjunction with the SSA, and consistent with the solicitation’s hierarchy of Factors, Subfactors, and Elements, will review each offeror’s proposed achievement of objective requirements and make as informed a judgment as possible, based on the data available, as to whether the proposal to meet objective requirements is worth the Government’s approximation of the delta price/cost to achieve the objective requirement. The SSA, in the Source Selection Decision Memorandum, and consistent with the solicitation’s hierarchy of Factors, Subfactors, and Elements, shall recognize and appropriately consider, in the Source Selection Decision Memorandum, the extent of the performance benefits afforded the Department of the Army by the level of objective performance expected to be achieved by the offeror. [AFARS Revision #21, dated May 22, 2007]

5115.101-1 -- Tradeoff process.

(a) On most acquisitions, the tradeoff process will be most effective and will result in the best value to the Government. Use this process when it is in the Government’s best interest to consider award to other than the lowest price offeror. Under this process, you evaluate both cost (or price) and non-cost factors and award the contract to the offeror proposing the combination of factors that represents the best value based on the evaluation criteria. Inherent in this process is the necessity to make tradeoffs considering the non-cost strengths and weaknesses, risks, and the cost (or price) offered in each proposal. The SSA will select the successful offeror by considering these tradeoffs and applying his/her business judgment to determine the proposal that represents the best value.

[AFARS Revision #21, dated May 22, 2007]

(S-90) Conduct source selections for architect-engineering services in accordance with FAR Part 36. [AFARS Revision #21, dated May 22, 2007]

Subpart 5115.2 -- Solicitation and Receipt of Proposals and Information

5115.201 -- Exchanges with industry before receipt of proposals.

(c) Early industry involvement and openness are the cornerstones to enhance a cooperative relationship with industry. Timely release of information to industry is essential to maximize the value of their inputs to the planning, requirements generation, and acquisition processes. This involves engaging industry during the drafting of solicitations through meetings and contracting business opportunity sites on the World Wide Web or other means. In competitive acquisitions, it is critical to balance the Government's obligation to ensure fair treatment and opportunities for all offerors, while protecting contractor proprietary, proposal and source selection information.

(6) (A) Draft Request for Proposals (DRFP) may be used when there are concerns with the statement of work or specifications or when there are significant technical risks and cost drivers. When a written acquisition plan is required (DFARS 207.103(d)) and a DRFP is not used, include rationale for not using a DRFP. [AFARS Revision #21, dated May 22, 2007]

5115.204 -- Contract format.

(e) Head of the Contracting Activity (HCA) may exempt individual contracts from the use of a uniform contract format and may delegate this authority no lower than to the Principal Assistant Responsible for Contracting (PARC). The Deputy Assistant Secretary of the Army (Policy) is authorized to exempt classes of contracts. Exemptions should not be granted without coordinating with affected contract administration and payment offices.

5115.204-2 -- Part I -- The Schedule.

(c) Section C, Description/Specifications/Statement of Work. The statement of work (SOW), statement of objectives, or other description for major system acquisitions must reflect all pertinent Manpower and Personnel Integration (MANPRINT) considerations from the capabilities documents. Also include any enhanced considerations resulting from market research and contributions from Integrated Product Teams. Include in the SOW or other description as specific, stand-alone functional requirements important MANPRINT issues or opportunities identified in the capabilities documents. [AFARS Revision #21, dated May 22, 2007]

5115.303 – Responsibilities.

(a) (i) The Army Acquisition Executive (AAE) or designee is the SSA for Major Defense Acquisition Programs, Major Automated Information System acquisition programs, and designated Army acquisition programs.

(ii) Except as provided in paragraph (iv) of this section, HCAs or the PARCs are responsible for the appointment of the SSAs. The HCAs or the PARCs without further redelegation, are delegated the authority to appoint the source selection authority for the following:

(A) Acquisition Category (ACAT) II, and III programs defined in DoD Instruction (DoDI) 5000.2, E.2. Enclosure 2, paragraph E.2.1.3..

(B) Acquisitions not managed in accordance with DoD Directive (DoDD) 5000.1 for which formal source selection procedures are used.

(iii) HCAs must coordinate SSA appointments for ACAT II, and III programs with the Milestone Decision Authority and any Program Executive Officer. HCAs cannot redelegate the authority to appoint the SSA for an ACAT II program.

(iv) The Deputy Assistant Secretary of the Army (Procurement) shall appoint the SSA for service acquisitions with a total planned dollar value of $500 million or more, and service acquisitions identified by the Assistant Secretary of the Army (Acquisition, Logistics and Technology) as a special interest.

(v) HCAs for Headquarters, Army Materiel Command (HQ AMC) subordinate activities must send SSA nominations which require AAE approval to the addressee in 5101.290(b)(3) through the HQ AMC Office of the Command Counsel in 5101.290(b)(9). Send the list of nominees in a sealed envelope marked “Personal.” Do not furnish copies to anyone other than the addressees in this paragraph.

[AFARS Revision #21, dated May 22, 2007]

(b) (2) Subject to DFARS 215.303 (b)(2) and the DFARS Procedures, Guidance and Information (PGI) 215.303 (b)(2)(A), see AFARS Appendix AA – Army Source Selection Manual for the source selection processes and techniques that will be used for competitive, negotiated acquisitions. This manual shall be used by all Army contracting offices conducting source selection. The manual is designed to provide flexibility within a given framework so that contracting officers can best design and execute their source selection plan/RFP to provide the optimum solution to meet the Government’s needs. A source selection plan is required for all competitive negotiated competitions where the basis of award include factors in addition to cost or price.

(S-90)

(a) The PARCs are responsible for developing and overseeing the source selection training requirements tailored for their organizations.

(b) The SSA will be in the contracting chain unless the HCA or the PARC approves otherwise for their respective delegation authorities.

(c) Program Executive Officer (PEO)/Program Manager (PM) or functional proponent (non-PEO programs) for the acquisitions must --

(1) Develop and implement the acquisition strategy;

(2) Prepare and obtain approval of the SSP before issuing the solicitation;

(3) Coordinate with the HCA to recommend an official as the SSA, when authority to appoint the SSA has been delegated by the Army Acquisition Executive; and

(4) Provide necessary funds for salaries, overtime, temporary duty travel, and other expenses of the source selection and provide office space, office, and administrative equipment, clerical support, and other necessary administrative support to personnel involved in the source selection.

5115.304 -- Evaluation factors and significant subfactors.

(b) (2) It is Army policy to establish the absolute minimum number of factors necessary for evaluation of proposals. Source selection factors may be subdivided into subfactors that, in rare instances, may be further subdivided into elements if needed. Evaluation factors and, if used, subfactors and elements are the basis for assessing each offeror's ability to meet the Army's needs. They are the uniform baseline against which each offeror's proposal is compared to determine the proposal(s) which represent the best value to the Government. Factors and Subfactors must be limited to those which (a) are expected to surface real and measurable discriminators between offerors, and (b) have value enough to warrant the payment of a meaningful cost/price premium to obtain the measured discrimination. Evaluation factors, subfactors, and elements:

(A) Must be written in sufficient depth to communicate the measures of merit used to determine how the proposal will be evaluated and rating determined;

(B) Include only those specific program characteristics that are significant enough to have an impact on the source selection decision, such as those identified through program risk analysis;

(C) Set forth in Section M of the draft and final RFPs, Evaluation Factors for Award. In addition, the relative importance of all factors, subfactors, and elements shall be specified in Section M of the RFP; and

(D) Must be qualitative. Numerical weighting (i.e., assigning points or percentages to evaluation factors and subfactors) is not an authorized method of expressing the relative importance of these factors and subfactors. Evaluation factors and subfactors must be definable in readily understood qualitative terms (i.e., adjectival, colors, or other indicators, but not numbers) and represent the key areas of importance to be considered in the source selection process. The direction of this subparagraph is not waivable, either on an individual or class basis, as an AFARS deviation.

(d) (i) When the Government intends to evaluate the cost of future production or performance beyond the instant contract, and to include these costs as part of the basis of selection and award, clearly specify the evaluation procedures for such costs in the solicitation. Do not use Government estimates of future or life cycle costs in an evaluation unless the Government’s procedures and methodologies for developing the costs are specified in the solicitation.

(ii) To the extent that measurable manpower and personnel integration (MANPRINT) discriminators, of value to the Government, are identified, evaluate MANPRINT in source selections for major systems, designated acquisition programs and, when appropriate, other acquisition programs. Evaluate MANPRINT issues or opportunities that are specific, stand-alone functional requirements as identified in the capabilities documents.

[AFARS Revision #21, dated May 22, 2007]

5115.305 -- Proposal evaluation.

(a) (1) Cost or price evaluation. Do not score cost or price or combine it with other non-Price/Cost related aspects of the proposal evaluation.

(2) Past performance evaluation. Where possible, use past performance information available from Government-wide and agency-wide databases. Use of such information will help to expedite and streamline the evaluation process. The Past Performance Information Retrieval System (PPIRS) provides access to information about contractors and their performance collected throughout the Federal Government. The PPIRS information is available via the internet at http://www.ppirs.gov. If information is not readily available from existing databases, seek it from other Government entities and private sector sources (e.g., by means of questionnaires, published commercial evaluations and interviews). [AFARS Revision #21, dated May 22, 2007]

(3) Technical evaluation. When divergent evaluations exist, and none of the evaluators have misinterpreted or misunderstood any aspects of the proposals, consider providing the SSA with written majority and minority opinions.

(4) Cost information. The SSA shall determine whether cost information will be provided to the technical evaluators, when and what information shall be provided, and under what conditions.

5115.306 -- Exchanges with offerors after receipt of proposals.

All exchanges with offerors after receipt of proposals must clearly identify the types of exchanges, i.e., clarifications, communications or discussions.

(c) Competitive Range. The SSA must approve the competitive range determination.

5115.308 -- Source selection decision.

A source selection decision document must be prepared for all source selections and reflect the SSA's integrated assessment and decision. The document must be the single summary document supporting selection of the best value proposal consistent with the stated evaluation criteria. It must clearly explain the decision and documents the reasoning used by the SSA to reach a decision. The document should be releasable to the Government Accountability Office and others authorized to receive proprietary and source selection information. When releasing a copy to offerors or to anyone not authorized to receive proprietary and source selection information, redacted material should be limited to that which is proprietary and that which must continue to be protected as source selection information.

5115.403 – Obtaining cost or pricing data [AFARS Revision #23, dated May 16, 2008]

5115.403-1 – Prohibition on obtaining cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. 254b [AFARS Revision #23, dated May 16, 2008]

(c)(4) Waivers.

Follow the procedures at PGI 215.403-1(c)(4), Waivers, to determine when an exceptional case TINA waiver is appropriate. Proposed exceptional case TINA waivers that exceed $100 million shall be coordinated with the DASA(P) prior to granting of the waiver.

5115.403-3 – Requiring information other than cost or pricing data [AFARS Revision #23, dated May 16, 2008]

(S-90) In accordance with DPAP/CPF memorandum dated November 7, 2007, subject : Access to Records with Exclusive Distributors/Dealers, in the event of an exigent situation when the HCA approves award without obtaining requested cost data from exclusive distributors/dealers, Army contracting activities are required to notify SAAL-PP (psstaff@conus.army.mil). SAAL-PP will then notify OUSD(AT&L) through the DASA(P). Each notification will include the following information:

(i) Contractor name and DUNS number (Exclusive Distributor/Dealer);

(ii) Subcontractor name and DUNS number (e.g., OEM/actual manufacturer);

(iii) Contract number, modification or order number, if applicable;

(iv) Date and amount of the contract action;

(v) Steps taken to attempt price analysis without requiring cost data;

(vi) Contractor’s rationale for refusing to provide the data;

(vii) Actions take4n by the contracting activity to obtain the data;

(viii) Data used to determine price reasonableness and resulting determination; and

(ix) Actions planned to avoid this situation in the future.

5115.406 – Documentation.

5115.406-1 -- Prenegotiation objectives.

(b) (i) Prenegotiation memorandum. Document prenegotiation objectives in a Prenegotiation Memorandum which sets forth the significant details of the proposed contracting action and the course the contracting officer proposes to pursue. Prepare, review, and approve Prenegotiation Memoranda in accordance with the activity’s business clearance procedures.

(A) Sole source acquisitions. For sole source actions, the Prenegotiation Memorandum documents compliance with law, regulations and policy and also becomes the record documenting the exercise of good business judgment. The Prenegotiation Memorandum shows the contractor’s methodology and how he developed his proposal position (to the extent it can be determined from the contractor’s proposal and fact finding efforts), how the price/technical/audit reviewers developed their recommendations, and what the negotiator did in developing an independent pre-negotiation position considering the pricing, audit, and technical analyses and recommendations. An understanding of the development of each position is important in order to adequately prepare for negotiations. The Director, Defense Procurement, Acquisition Policy and Strategic Sourcing’s web site http://www.acq.osd.mil/dpap/contractpricing/index.htm) has posted on it the DoD Contract Pricing Reference Guides which discuss in depth pricing techniques and factors that should be considered when developing the negotiation position.

(B) Competitive negotiated acquisitions.

(1) For competitive negotiated acquisitions using formal source selection procedures, the Prenegotiation Memorandum should include the source selection plan, as well as section “M” of the solicitation. It should discuss the evaluation criteria and the basis for award contained in the solicitation, set forth a summary schedule of offerors’ prices and the technical and cost evaluations. It should also include a determination and supporting discussion of offerors determined to be within and outside the competitive range and a summary of the technical and cost deficiencies to be discussed with offerors selected to participate in the discussions.

(2) A Prenegotiation Memorandum for a competitive acquisition is largely a review of the basis for source selection to ensure that full documentation and support exist to withstand any subsequent protest or allegation that the price was not fair and reasonable.

[AFARS Revision #21, dated May 22, 2007]

5115.406-3 -- Documenting the negotiation.

(a) Both the prenegotiation objectives and the results of the negotiation must be documented in sufficient detail to clearly set forth all significant aspects of the contract action.

5115.407-4 -- Should-cost review.

(b) Program should-cost review.

(4) In coordination with the PM or other customer, the HCA must establish the requirements and format for the program should-cost team report.

Subpart 5115.6 -- Unsolicited Proposals

5115.606 -- Agency procedures.

Army procedures pertaining to unsolicited proposals are found in Appendix XVIII of Department of the Army Pamphlet (DA PAM) 70-3, Army Acquisition Procedures. DA PAM 70-3 may be found in the Library section of the Homepage of the Assistant Secretary of the Army (Acquisition, Logistics and Technology) and at the Army Publishing Directorate’s website. [AFARS Revision #21, dated May 22, 2007]