# MP5315.4 - Contract Pricing

#### Mandatory Procedure

MP5315.4
Contract Pricing

### February 14, 2011

###

1. Objective. In an effort to ensure timely awards of sole source contract actions and the definitization of Undefinitized Contract Actions (UCAs) within 180-days after issuance of the UCA, it is imperative that we work effectively with our industry counterparts to receive quality documentation and data in a timely manner. Throughout the award/definitization process, it is vital that the lines of communication remain open and that established due dates are well-known and met. Documentation supporting a contractor’s proposal should be readily available and provided upon request. However, there may be circumstances where the requested data is not immediately available and reasonable timeframes should be established to provide such documentation.

2. Proposal Kick-Off and Proposal Walk-Through Meeting. For all sole source contract actions greater than $50M and any UCA greater than $1M, contracting officers shall:

a. Schedule a proposal kick-off meeting as soon as practicable after the Request for Proposal (RFP) (or Draft RFP if appropriate) has been issued by the contracting officer. The meeting shall be convened between the Air Force and the Contractor and should include, when appropriate, DCAA, DCMA, and, with the prime contractor’s agreement, major subcontractors having a significant role in the award/definitization. This allows all parties to discuss procurement schedule requirements and expectations on timely contractor support. Expected major subcontracts (>$700,000 where cost analysis is required and specifically those that will require Government assist audits) and major subcontracts to be proposed as commercial items should be identified at this time.

b. After proposal submittal and preliminary review by the Government team (contracting officer, price analyst, program manager, DCMA, DCAA, etc, where appropriate), the contracting officer shall schedule a proposal walk-through meeting to be conducted by the contractor. The proposal walk-through meeting should ensure an understanding of the proposal composition, validate or revisit the award/definitization schedule, and establish action items for any obvious data omissions. If data omissions are so significant as to render the proposal inadequate for analysis, the contracting officer may reject the proposal. Prior to issuance of the UCA, these meetings may be used by the contracting officer to obtain and review the contractor's spend-plan for obligation limitations in accordance with DFARS 217.7404-4(b).

c. In the event that the contracting officer determines the meetings described above are not appropriate for a specific negotiation situation, the contracting officer must document the contract file and obtain the approval of the business clearance authority before proceeding. The contracting officer must obtain approval at one level above the business clearance approval authority in cases where the contracting officer is the business clearance authority. Meetings such as these should also be considered for smaller dollar programs, as determined necessary by the contracting officer.

3. Proposal Instructions.

a. Contracting officers must provide the contractor with clear and concise proposal instructions to include a suspense date for proposal submission.

b. Contracting officers must require that contractor proposals (both prime and subcontractors) are valid for the anticipated time required to conduct the evaluation, audit, negotiations and award.

c. Contracting officers shall include the Air Force Proposal Adequacy Checklist (AFPAC) in sole-source draft and final RFPs and RFPs for UCAs when the contract value is anticipated to exceed the threshold for obtaining certified cost or pricing data. The AFPAC may be tailored, where necessary for acquisition-specific reasons, as long as it remains consistent with FAR 15.408, Table 15-2. To comply with this requirement, contracting officers must provide the AFPAC (with preparation guidelines) to contractors and substantially utilize the following language in either Alternate I to the basic provision at FAR 52.215-20 or FAR 52.215-21, or as a paragraph within letter RFPs:

> “The offeror shall prepare and submit certified cost or pricing data and supporting attachments in accordance with Table 15-2 of FAR 15.408. Further, the offeror shall (1) include the attached Air Force Proposal Adequacy Checklist (AFPAC) in pre-submission proposal quality reviews, and (2) furnish the completed checklist as part of their proposal submission.”

Consistent with the notice given to contractors in the AFPAC Preparation Guidelines, in situations when the contractor’s original proposal is inadequate and requires revision or rework, contracting officers should consider whether to recognize as reasonable any contractor costs associated with the revision/rework effort and must consider the nature and extent of any proposal inadequacies when negotiating profit.

AFPAC Word Version: Click Here
AFPAC Excel Version: Click Here

4. Requesting data/documentation after the receipt of the proposal.

a. When the contracting officer requests supporting data/documentation from a contractor (whether verbally or in writing), the request must clearly state what data/documentation is needed and when it should be provided. Generally, data/documentation in support of the proposal should be readily available and provided upon request. If requested data/documentation is not readily available because of extenuating circumstances (such as a request for data that did not form the basis of the contractor's proposal), the contracting officer should allow the contractor reasonable time to provide the requested data/documentation. In such circumstance, generally an agreement between the contracting officer and the contractor should be made in writing as to a reasonable time for submittal of data. Where system generated data is to be provided, the contracting officer should review the data fields to be reported before the data is generated to ensure a common understanding of what is needed. The contracting officer shall inform contractors that all data requests will be tracked and will be considered open action items until the government concurs that the data has been received and is complete.

b. If the data is not provided by the requested date or, if applicable, the agreed-to-date, and an acceptable resolution cannot be achieved, the issue shall be immediately elevated to appropriate senior contracting management for both the government and the contractor until an appropriate resolution is reached. The outcome of the elevation process should be documented in writing to include any revised dates for receipt of requested data/documentation.
c. If, after elevation, an acceptable resolution has not occurred or the contractor fails to provide the data/documentation within the revised agreed-to date, the contracting officer may take remedial actions. For example, for UCAs, contracting officers should consider reducing or suspending progress payments (FAR 32.503-6) when the contractor does not submit a timely qualifying proposal or has otherwise not supported the established definitization schedule. In addition, contracting officers should be aware that assigned Contractor Performance Assessment Reporting System (CPARS) ratings must track to the definitions provided in Attachment 2, “Evaluation Rating Definitions” to the DoD CPARS Policy Guide. For example, a singular performance problem, such as the failure to submit a timely, complete and quality proposal (or subsequent data submissions), in connection with a UCA is of such serious magnitude that it alone justifies an unsatisfactory (red) rating in the assessment of Management Responsiveness or Business Relations.