# DLAD PART 15 – CONTRACTING BY NEGOTIATION

- SUBPART 15.1 – SOURCE SELECTION PROCESSES AND TECHNIQUES

- 15.101-90 Phased competition.
- 15.101-91 Source Selection Process Priority

- SUBPART 15.2 – SOLICITATION AND RECEIPT OF PROPOSALS AND INFORMATION

- 15.209 Solicitation provisions and contract clauses.

- SUBPART 15.3 – SOURCE SELECTION

- 15.301 Definitions.
- 15.303 Responsibilities.

- 15.303-90 Acquisitions and the source selection authority.
- 15.303-91 Head of the Contracting Activity role.

- 15.304 Evaluation factors and significant subfactors.

- 15.304-90 Past performance evaluation and past performance information systems.
- 15.304-91 Solicitation for an item producible with facilities.
- 15.305-90 Proposal evaluation.
- 15.308-93 Competitive negotiated solicitations using source selection procedures and use of product demonstration models.
- 15.308-94 Solicitations for medical equipment and instruments.

- SUBPART 15.4 – CONTRACT PRICING

- 15.401 Definitions.
- 15.402 Pricing policy.

- 15.402-90 Pricing policy – exclusive dealers.
- 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 certified cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. 254b).
- 15.403-3 Requiring data 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).

- 15.404 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.
- 15.406-1-90 Pre-Award Objectives
- 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.

- 15.408 Solicitation provisions and contract clauses.

- 15.408-90 Contract clauses and solicitation provisions.

- SUBPART 15.6 - UNSOLICITED PROPOSALS

- 15.604-90 Handling of Unsolicited Proposals (UPs).
- 15.606-90 Agency procedures for review and evaluation of unsolicited proposals.

PART 15 – CONTRACTING BY NEGOTIATION

(Revised November 8, 2013 through PROCLTR 2014-13)

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 (10 U.S.C. 2306a and 41 U.S.C. 254b).

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

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

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.

15.406-1-90 Pre-award 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.

15.407-5 Estimating systems.

15.407-90 Reverse auction.

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

(Revised November 5, 2013 through PROCLTR 2014-06)

15.101-90 Phased competition.

(a) Definition - Phased competition is a risk reduction strategy that provides for the development of business approaches or systems development under contract with subsequent down-select competitions among contractors for further development or full performance within the same contract.

(b) Application - Phased competition procedures may be appropriate when state of the art solutions are sought and significant development work is required by industry.

(1) The Government must first explore existing commercial methods and determine whether commercial solutions are available or can be readily adapted to the Government problem or requirement. Where a best commercial alternative is not apparent, or where limited development and adaptation are required, early industry involvement in exploring solutions can be elicited in the presolicitation stage through several alternative approaches addressed in 15.201 and 35.016.

(2) However, when state of the art solutions are sought and significant development work is required by industry, reliance on either a single Government solution or an untested commercial solution increases risk for both parties.

(3) Risk can be reduced for both parties if development and testing are accomplished under contract through the use of a phased competition. Before using a phased competition, the Government must carefully weigh the costs and benefits inherent in this approach.

(c) The statement of work (SOW).

(1) Either a general statement of need or a SOW as described below may be used for the first phase of a phased competition. A SOW that engages industry participation would have the following features:

(i) It addresses the current state of operations and provides insight into future operating conditions;

(ii) It defines the desired business process future state in terms of the goals of the reengineering effort, and;

(iii) It limits specific requirements to essential Government needs, such as systems interface requirements, that must be met in the reengineered business process.

(2) The solicitation allows offerors the freedom to propose solutions to the Government and to describe how the proposal will meet the goals of the reengineering effort.

(d) SOW for subsequent phases. Solicitations should describe the content and format for deliverables at each phase of the competition. When this procedure is followed, the contractor’s proposed approach, a deliverable which may require revision during negotiations, becomes the SOW for the subsequent phase. Task orders should incorporate the contractor’s proposal by reference to prevent the disclosure of the contractor’s strategy to competitors.

(e) Pricing of phases. The Government cannot reasonably expect industry to price each phase of development, testing, and/or implementation as of the closing date of the solicitation. Price proposals for phases beyond the initial priced phase can be obtained as deliverables under each subsequent phase of the contract when requirements for each subsequent phases are more fully defined. Under these circumstances, the SOW for the first phase should include a requirement for deliverables, such as the statement of work for contractor-proposed tasks for the second phase, and the prices proposed to accomplish this work. This procedure can be repeated in subsequent phases, as necessary.

(f) Competition. A phased competition is full and open competition. The competition includes the evaluation of written proposals for the first phase, and continues as the Government evaluates deliverables and performance during the subsequent phase(s). No justification and approval is required to issue task orders to continue performance in subsequent phases of a phased competition when the phases were included in the synopsis and the solicitation clearly describes the phased approach contemplated.

(g) Source selection through phased competition.

(1) During early industry involvement in this process, the Government may propose phases or work with industry to define the phases that will be used to develop, test, and implement contractual solutions for reengineering processes. Examples of phases that might be used are: concept development, proof of concept, and full implementation or production. During the first phase, the primary goal of the source selection should be to select capable contractors that have a sound understanding of the goals of the acquisition and a reasonable approach. Source selection should also consider the degree of difference in competing proposals to ensure the Government does not pay for duplicate development and testing. In the final phase, evaluation criteria should ensure that the prospective contractor(s) have sufficient background and resources to carry their proposed concept through to fruition.

(2) The SOWs for phases beyond the first phase will develop and evolve through the phased competition process. For this reason, the solicitation should generally request proposals only for the first phase. While the solicitation must include the criteria that will be used to evaluate performance and/or deliverables in each phase, the evaluation criteria for subsequent phases can be described only in general terms initially in the solicitation. However, definitized evaluation criteria must be developed and incorporated into the contract(s) before performance in the next phase is ordered. The same evaluation criteria must apply to all contractors.

(3) Contractors may be asked at any phase to recommend additional evaluation criteria for subsequent phases. However, the same evaluation factors must apply to all contractors involved in a particular phase. When contract proposals differ greatly in their approach, the evaluation factors should allow evaluation of deliverables and performance in terms of the reengineering goals. This method affords the Government the flexibility to make a comparative assessment of different solutions. If evaluation criteria based on contractor suggestions are used, Government personnel must carefully review these factors before including them to ensure their applicability to all potential solutions, and that the use of these factors would not result in favoring one contractor over another.

(4) The solicitation must clearly describe how the Government will conduct the procurement. The following types of statements must be included in a description of the procedures:

(i) The procurement uses a phased competitive approach in which the Government will evaluate deliverables and performance at the completion of each phase to determine which contractor(s) will be selected to continue into the subsequent phase(s);

(ii) Only contractors participating in the immediately preceding phase will be considered for participation in the next phase;

(iii) The Government intends for performance under full implementation or production to be performed by a contractor or contractors who have tested and developed their services/products under all previous phases of competition. Offerors selected must have sound concepts and the resources and background to carry this competition through to fruition;

(iv) The Government reserves the right to make one or more awards as a result of the solicitation, and award to other than the lowest priced offeror after assessment of each offeror’s technical and business proposal. The contract should also include the appropriate clauses and provisions regarding task and delivery order procedures under FAR Subpart 16.5; and,

(v) The Government reserves the right to discontinue performance at any phase of the competition.

(5) Normally, multiple awards are made for the initial phase with competitive down- selections in subsequent phases to determine the most promising contractor(s). However, if it is determined that only one of the proposals received is promising, the resulting contract should continue to allow Government evaluation of development and testing for each phase in the Government environment to manage the risk associated with a single strategy.

(h) Notification and debriefing of unsuccessful offerors/contractors. Care must be taken during debriefings to ensure no data is released that would affect the ongoing competition. The names of contractors selected should be fully disclosed at the time the initial award is made and later when subsequent orders are placed. Contractors shall be afforded the opportunity for a debriefing whenever they are eliminated from further participation in the contract. Adequate safeguards must be in place throughout all phases to protect proprietary information.

(i) Contract award. The scope of each contract awarded includes the potential for orders for all phases of contract performance. Task orders will be placed for work to be performed in each phase and this contract will be used, while the contractor remains in the competition, to move through each phase of contract performance.

(j) Cost or pricing data. Normally, cost or pricing data should not be requested in the initial phase of a phased competition, or when more than one contractor will participate in any subsequent phase. It may be appropriate to request information other than cost or pricing data (see FAR 15.403 for additional guidance), however, especially when contractor concepts differ greatly in their approach.

(k) Options. The contract may include horizontal options for additional periods of performance or vertical options for additional quantities during any single phase. The Government may include an option in the solicitation to test solutions at more than one site or an option for additional years of performance by the selected contractor(s).

(l) Communications/dialog with contractors. During contract performance, the timely and accurate exchange of appropriate information between the Government and participating contractor(s) is essential.

(m) Type of contract. Both offerors and the contractors selected should be allowed the flexibility in their proposals to suggest the type of contract for each phase. Contract type may differ in each phase, resulting in a hybrid contract; therefore, the evaluation of proposals should include a review of the type of contract proposed in consonance with the approach proposed..

15.101-91 Source Selection Process Priority

(a) In assessing the source selection process, developing the acquisition strategy and evaluation criteria at the acquisition planning stage is crucial to maintaining the integrity of the evaluation process.

(b) In order to obtain best value in negotiated acquisitions, the contracting officer should follow the following priority:

(1) The contracting officer should first consider the use of price only procedures. This procedure is best utilized when items are known and there are no performance concerns. Known items are defined as commercial off the shelf type items regularly sold in substantial quantities to the general public and/or non-commercial items that have been purchased by DLA multiple times with no technical issues. When price will be the only evaluated factor, contract requirements must be set forth clearly and unequivocally, and offerors must be aware that if they take exception to any of the terms and conditions in the solicitation, their offer may be excluded from consideration for award. The rationale for waiving evaluation of past performance must be documented in accordance with FAR 15.304(c)(3)(iii).

(2) The next procedure to be considered is the lowest price technically acceptable process. These procedures are best utilized when the requirement is clearly definable and the risk of unsuccessful contract performance is minimal.

(3) The final procedure to be considered is the use of a trade-off process, which should be limited to situations when it clearly will be in the best interest of the government to consider an award to other than the lowest priced offeror or other than the highest technically rated offeror.

SUBPART 15.2 – SOLICITATION AND RECEIPT OF PROPOSALS AND INFORMATION

(Revised November 6, 2013 through PROCLTR 2014-08)

15.209 Solicitation provisions and contract clauses.

(a) 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.

(b) 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).

(c) Insert the provision at 52.215-9007, Preproposal Conference if a preproposal conference is planned. If the contracting officer determines that additional publicity is in the best interests of the Government, a special notice on the Government Point of Entry may also be used as provided by FAR 5.205(c).

(d) When FAR 52.215-5 is included in the solicitation, insert the provision at 52.215-9008 Facsimile Bids and Proposals in DLA Aviation solicitations if facsimile proposals are authorized. For DLA Land and Maritime and DLA Troop Support solicitations use Alternates I and II to replace paragraph (c) as appropriate.

(e) For automated procurements only, when all or none offers for an entire item quantity is desired, use provision 52.215-9009, All or None for Automated Procurements.

(f) For non-automated procurements, when all or none offers for an entire item quantity or for a group(s) of items is desired, use provision 52.215-9010, All or None (Invitation for Bid (IFB)/Request for Proposal (RFP) only).

(g) The provision at 52.215-9011, Requirements for Quantity Increments or Ranges, may be used to solicit prices for quantity increments (e.g., 500, 1000, 1500, 2000 units) or quantity ranges (e.g., 500-999, 1000-1499, 1500-1999 units).

(h) Use 52.215-9016 in large purchase solicitations and awards if DFAS does not receive Part IV (Section K-M) of the solicitation as part of the award.

(i) 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.

(j) Insert the provision 52.215-9018, Authorized Limitation, in solicitations which have more than one item, where award is to be made by item; or which have more than one lot, where award is to be made by lot.

SUBPART 15.3 – SOURCE SELECTION

(Revised November 7, 2013 through PROCLTR 2014-14)

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.

(a) For acquisitions valued at $1 billion or greater, the designated Source Selection Authority (SSA) shall be at the Senior Executive Service/Flag Officer (SES/FO) level, if there is an SES/FO within the activity’s chain of command. For this purpose, the activity’s chain of command includes the Commander or Director of the contracting activity or contracting office not designated as a contracting activity (see definitions in 2.101), as applicable (subject to the restriction in 15.303-91 below ). If an activity does not have an assigned SES/FO in the chain of command, the SSA shall be a GS-15 (or military equivalent) assigned in the activity’s chain of command. For acquisitions less than $1 billion, CCOs shall exercise their judgment to ensure that the position level of the SSA is commensurate with the overall dollar value and complexity of the acquisition and ensure appointment of SSAs are in compliance with the Department of Defense Source Selection Procedures (DoD SSP).

(b) Authorized alternates: For acquisitions valued at $1 billion or greater, every effort should be made to ensure that an SES/FO serves as the SSA (as required above). If an SES/FO is unavailable and waiting for availability would cause an unacceptable delay to the acquisition, the CCO may request a waiver to 15.303-90. The CCO shall notify DLA HQ, J71 when a waiver is requested. The waiver request shall provide justification as to why a waiver is necessary and identify the authorized alternate (who must be a GS-15 or military equivalent). Requests for waivers must be approved by the Senior Procurement Executive (SPE).

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.

(b)(S-90) When applicable, the DoD SSP shall be followed, in conjunction with FAR and DFARS requirements, in establishing and evaluating evaluation factors and subfactors (see DFARS 215.300).

(c)(4) Socioeconomic (small business) evaluation factor. Under the conditions described in FAR 15.304(c)(4) and DFARS 215.304(c)(i) and subject to the exceptions in FAR 19.1202-2, the contracting officer shall establish an evaluation factor for negotiated competitive acquisitions to evaluate the extent of an offeror's proposed use of small business concerns, in order to incentivize offerors to subcontract with such concerns. This factor may be combined with another non-past performance factor. The relative importance of this factor is at the discretion of the contracting officer, but this factor may not be combined with the factor to promote use of AbilityOne entities (see (c)(S-90)).

(c)(4)(90) Solicitation provisions. The provision at 52.215-9002, Socioeconomic Proposal, or a substantially similar provision shall be included in all unrestricted solicitations; if, however, a subcontracting plan is not required, modify the clause by deleting all references to HBCUs/MIs. Proposals submitted pursuant to this clause shall be evaluated in accordance with the DoD source selection procedures.

(c)(S-90) Use of AbilityOne entities – evaluation factor. The contracting officer shall establish an evaluation factor for the extent of an offeror's proposed use of AbilityOne entities in order to incentivize offerors to subcontract with such concerns and encourage the maximum practicable use of AbilityOne entities as subcontractors (i.e., beyond statutorily mandated use of these entities by prime contractors in accordance with FAR 8.002(c)), unless an exception is granted in accordance with (i) below. (See 8.702-90.) The relative importance of this factor is at the discretion of the contracting officer, but this factor may not be combined with any other factor. This factor is separate and distinct from the socioeconomic (small business) evaluation factor described in 15.304(c)(4).

(i) 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 solicitations when the resultant contract is expected to exceed the subcontracting plan threshold in FAR 19.702(a), unless omission is approved by the chief of the contracting office. Inclusion of these provisions in solicitations below the threshold, though optional, is encouraged in all appropriate circumstances.

(ii) 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.

(c)(S-91) Transportation evaluation preference. Consistent with DoD transportation acquisition policy and DoD readiness objectives, solicitations for integrated logistics management arrangements, such as prime vendor, virtual prime vendor, on demand manufacturing, quick response, ECAT, and EMall, that may include contractor arranged transportation outside the continental United States, shall include an evaluation factor under tradeoff procedures favoring offerors whose transportation arrangements include the use of carriers with commitments to DoD mobility agreements under civil reserve air fleet (CRAF) and the voluntary intermodal sealift agreement (VISA). Under Lowest price technically acceptable procedures, offers will be evaluated for compliance with the minimum submission requirements set forth in the solicitation on an acceptable/unacceptable basis.

(1) When contracting for commercial transportation providers, the requirement of the contractor to support DoD contingency requirements through participation in the CRAF and VISA programs, and the required use of electronic commerce/electronic data interchange (EC/EDI) and the required providing of their in-transit visibility (ITV) data to DoD shall be used as evaluation criteria. A sample evaluation factor and language describing the factor for inclusion in solicitations are shown in the following sections.

(i) This solicitation, consistent with Department of Defense (DoD) transportation acquisition policy and DoD readiness objectives, includes a transportation preference that favors contractors whose transportation arrangements outside of the continental United States (OCONUS) include the use of carriers with commitments to DoD mobility agreements under civil reserve air fleet (CRAF) and voluntary intermodal sealift agreement (VISA).

(ii) Offerors, as a part of their proposal, shall indicate the carriers that the offeror will use for air and ocean transportation, if awarded the contract. Offers received will be evaluated to determine the degree of commitment to DoD readiness programs.

(iii) Under CRAF, select civil air carriers are contractually committed to support airlift requirements in emergencies when U.S. airlift needs exceed the capability of military aircraft. DoD provides financial incentives via transportation contracts with air carriers in exchange for pledged aircraft for international, long-range, short-range, domestic and Alaskan transportation requirements ready for activation, when needed. During activation, DoD controls the mission of these aircraft. Air carriers continue to operate and maintain their committed aircraft with their own resources. Before receiving a CRAF contract, air carriers must be certified as DoD-approved.

(iv) If air transportation OCONUS is anticipated, offerors should provide the name of the transportation company and a statement as to whether the transportation company or companies has/have a commitment to CRAF. CRAF carriers are preferred.

(v) The VISA was jointly developed by the Department of Transportation Maritime Administration, the DoD, and industry to make intermodal shipping services/systems, including ships, intermodal equipment and related management services available to the Department of Defense to support the emergency deployment and sustainment of U.S. Military forces by augmenting the capacity of DoD’s organic sealift capabilities.

(vi) If ocean transportation is contemplated, offerors should provide the name of the company(ies) and category(ies) shown in the following sections that best describes the transportation arrangements under the proposed contract. VISA preferences are as follows:

(A) U.S. flag vessel capacity operated by a participant and U.S. flag vessel sharing agreement (VSA) capacity of a participant.

(B) U.S. flag vessel capacity operated by a non-participant.

(C) Combined U.S. flag/foreign flag vessel capacity operated by a participant and combination U.S./foreign flag VSA capacity of a participant.

(D) Combined U.S. flag/foreign owned vessel operated by a non-participant.

(E) U.S. owned or operated foreign flag vessel capacity and VSA capacity of a non-participant.

(F) U.S. owned or operated foreign flag vessel capacity and VISA capacity of a non-participant.

(G) Foreign-owned or operated foreign flag vessel capacity of a non-participant.

(vi) For further information on the voluntary intermodal sealift agreement, see Federal Register Notice of February 13, 1997 (Volume 62, Number 30, pages 6838 - 6846).

(vii) Evaluation factor: The extent to which the offeror has, or uses other companies that have, CRAF and VISA commitments in both its DoD and commercial shipping methods.

(c)(S-92) Surge and sustainment will be evaluated in accordance with the terms and conditions of the solicitation. (See 17.9300).

(c)(S-93) Cost of source inspection evaluation factor. (See also 13.106-90(a), 14.201-8(a)(90), and 52.213-9001.) When contractors deliver nonconforming supplies or provide nonconforming services, the contracting officer normally requires inspection and acceptance at source, rather than at destination. The evaluation factor for source inspection is the expression of the Government’s recognition that it incurs costs resulting from poor contractor performance or from contractor demands for additional Government performance not otherwise considered necessary from the Government’s perspective. When the conditions set forth in 13.106-90(a) exist, the provision at 52.213-9001, Evaluation Factor for Source Inspection, shall be inserted in solicitations. The coverage at 13.106-90(a) applies regardless of the dollar value of the acquisition.

(A) The source inspection and preaward survey cost factors in offer evaluation can be applied to any procurement. They can be applied in conjunction with any source selection method.

(c)(S-94) Cost of preaward survey (PAS) evaluation factor. (See also 13.106-90(b), 14.201-8(a)(91), and 52.215-9001)). When a contractor delivers nonconforming supplies or provides nonconforming services or is delinquent in delivery, the contracting officer normally requires a PAS to determine such offeror’s responsibility for subsequent acquisitions. (See 9.106) The contracting officer also generally requests a PAS regarding a prospective contractor in accordance with the criteria listed at (A) through (F), below. The evaluation factor for conduct of a preaward survey is the expression of the Government’s recognition that conducting a PAS is an additional expense to the Government. There are certain situations (based on a contractor’s prior performance) for which it is appropriate to apply a factor for offer evaluation purposes to the apparently low offer of a prospective contractor when the Government must base its responsibility determination on the results of the survey of that firm or individual. When these situations exist, the provision at 52.215-9001, Evaluation Factor for Preaward Survey, shall be inserted in solicitations. Additionally, an amount which is the equivalent of the cost of the survey, currently $369, shall be added to the offeror’s proposed price for each survey, regardless of the level of survey (formal or informal) to be performed. The cost of the PAS shall be added to the offer of a prospective contractor (manufacturer or non-manufacturer) who:

(A) Has been listed on the GSA list of parties excluded from federal procurement programs within the past three years (or other locally-determined time period); or

(B) Is undergoing or has undergone reorganization under bankruptcy laws within the past three years or other locally-determined time period; or

(C) Is known to the contracting officer to have a poor or marginal performance history; or

(D) Has, within the past year (or other locally-determined time period), received a negative PAS for an item within the same federal supply class (FSC), or for the same type of service, as the item or service being purchased; or

(E) Has failed to liquidate indebtedness to DLA (the extent of such indebtedness shall be determined locally); and

(F) The contracting officer has determined must be surveyed for the contracting officer to make a responsibility determination (see 9.104-1(90)(a) and 9.106-1).

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

(a) Scope. This subsection provides policies and procedures for using past performance information systems in evaluating contractor past performance as a non-cost or price factor in best value award decisions. DLA, DoD and Federal systems available that contain past performance information include but are not limited to, DLA’s Automated Best Value System (ABVS), the Federal Past Performance Information Retrieval System, which consists of PPIRS-Report Card (PPIRS- RC) and PPIRS-Statistical Reporting (PPIRS-SR); the Federal Awardee Performance and Integrity Information System (FAPIIS), which is a module of PPIRS, and the Electronic Subcontract Reporting System (eSRS). Regardless of the source of past performance information, past performance will be evaluated in accordance with DoD SSP.

(b) Applicability. Past performance information may be used –

(1) In source selection decisions;

(2) When determining whether to exercise an option; and,

(3) When determining whether to request a preaward survey.;

(4) For additional discussion concerning contractor past performance information, see FAR Subpart 42.15.

(c) Policy.

(1) OUSD/AT&L has mandated initial deployment of the newest PPIRS iteration, the Past Performance Information Retrieval System-Statistical Reporting (PPIRS-SR). DLA is positioning the enterprise to transition from its current past performance assessment tool, the Automated Best Value System (ABVS), to the Past Performance Information Retrieval System – Statistical Reporting (PPIRS-SR). PPIRS-SR is being phased in with deployment of EProcurement.

(2) When ABVS is used, if the offeror having the lowest evaluated price also has an ABVS FSC score below 70 and would potentially be bypassed under best value in favor of a higher priced offeror with a higher ABVS FSC score, then past performance evaluation will be accomplished using PPIRS-SR information, in lieu of ABVS, for all offers received.

(3) For aquisitions meeting the dollar thresholds for the specific Business Sectors stated in the Contract Performance Assessment Reporting System (CPARS) Policy Guide, acquisition specialists shall as a minimum use past performance assessment information contained in the Past Performance Information Retrieval System - Report Card (PPIRS-RC) in addition to the past performance information contained in ABVS or PPIRS-SR. For business sector definitions and thresholds, see the CPARS Policy Guide at http://www.acq.osd.mil/dpap/Docs/PPI_Guide_2003_final.pdf.

(d) Solicitation provisions.

(1) The solicitation provision regarding use of past performance must specify:

(i) The timeframe constituting recent past performance;

(ii) The definition of relevant past performance for that procurement;

(iii) Potential sources of the past performance information;

(iv) Focal point (address and telephone number) for questions/ challenges if ABVS scores will be used; and,

(iv) Discrepant past performance information resolution process.

(2) Contracting officers may use the provision at 52.215-9022, Contractor Past Performance Evaluation – Information From Automated Systems, in all acquisitions in which past performance will be used as an evaluation factor in best value award decisions. However, contracting officers are not precluded from collecting/analyzing relevant information in addition to any past performance information derived from automated systems in excess of the simplified acquisition threshold (SAT).

(3) Contracting officers may use provision 52.215-9003, Use of Past Performance Information Retrieval System – Statistical Reporting (PPIRS-SR) Information in Past Performance Evaluation, in solicitations using competitive FAR Parts 12, 13, 14, and 15 procedures when PPIRS-SR information will be used in evaluating an offeror’s past performance. This provision may be used in conjunction with other past performance provisions.

(e) Confidentiality of Past Performance. Past Performance information used in source selection is confidential source selection information, and as such, is protected from release under the procurement integrity rules (see FAR 3.104-4 and 3.104-5). The information is available only to the business entity to which it applies. The past performance information used in the source selection process must carry a restrictive legend substantially the same as the following: “Source Selection Information – see FAR 2.101 and 3.104”. This legend must appear on all hard-copy printouts. Release of past performance information to non-DLA Governmental entities must have the concurrence of the local counsel. Release to private entities shall be strictly limited, have the concurrence of the local counsel, and be in accordance with Freedom of Information Act (FOIA, 5 U.S.C. 552) guidelines (see FAR Subpart 24.2, Freedom of Information Act, and DFARS 224.2, Freedom of Information Act). Any FOIA decision to release performance data to other contractors will be made on a case-by-case basis.

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.

(a) When soliciting for a long-term contract and an offer for a fixed quantity is received, the contracting officer shall consider whether the quantity offered meets the requirements of the solicitation. If so, the contracting officer shall consider the offer to be responsive to the solicitation. If not, the contracting officer shall reject the offer as not conforming to the solicitation and shall forward a summary of the offer to the supply planner. The supply planner shall take appropriate action in the best interest of the Government, based on the supply planner’s judgment; such as initiating a separate, fixed-quantity purchase request, if warranted by the agency’s supply position.

(a)(4) The chief of the contracting office is delegated authority to determine whether technical evaluators may have access to cost information.

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, for 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 offeror to utilize “alternate” material in the PDM. However, they should not be used together. This provision only applies to DLA Troop Support.

(a) The number of models required will be determined by the number and type of testing criteria. The contracting officer will make the determination based on input from the technical evaluators. The contracting officer is responsible for ensuring that the number of models requested is reasonable and realistic considering the estimated dollar value and size of the end item.

(b) When removing identifying information will not destroy the product, the contracting officer will make all efforts to remove all identifying information from the PDM without destroying the product prior to submitting the PDM for technical evaluation to preclude bias on the part of the technical evaluators.

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 November 8, 2013 through PROCLTR 2014-13)

15.401 Definitions.

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

"Decrement factor information" is the historical data necessary to determine the average difference between offerors’ and their 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.

“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 15.406-3-90(a)(11)).

15.402 Pricing policy.

Contracting officers must adhere to the following policy.

(a)(S-90)(1) Spot buys may be used as a last resort to maintain customer support when establishing a new long term contract. At times, extended negotiations are required to complete price negotiations. The contracting officer should consider in the government objective price the increased cost to the agency, customer and the contractor to continue transactional buys for an extended time.

(2) First Destination Packaging (FDP) Program. The contracting officer will ensure that the Government is paying for the required level of packaging and achieving appropriate savings related to packaging by negotiating the price on manually awarded acquisitions of all dollar values under the FDP program when the packaging standard changes from military standard (MIL-STD) 2073-1 military packaging to the American Society for Testing and Materials (ASTM) standard D-3951 for commercial packaging. (See 11.201(c)(S-90)(1).) Negotiation efforts should be appropriate and consistent with the value of the procurement.

(i) Definitions.

(A) “ASTM D 3951” is a commercial packaging standard that contains acceptable, known, and measurable standards for packaging of material. The standard requires packaging sufficient to preserve the material for one year and, when appropriate, package smaller items together. The packaging requirement states that packaging data “shall be packaged standard commercial in accordance with ASTM D 3951”.

(B) Military standard (MIL-STD) 2073 is a detailed military packaging standard that directs the type of packaging needed to preserve the material based on the type of material and is stated on or in the packaging data with information on preservation, wrapping, and cushioning.

(ii) Negotiation guidelines for the acquisition specialist or buyer:

(A) Review the packaging requirement on the current acquisition and determine whether commercial packaging is now required, versus a previous military standard.

(B) Utilize the following negotiation guidelines on manually awarded acquisitions to obtain possible savings from any change in packaging requirements from military to commercial standards.

(1) Negotiation efforts should always consider packaging and be appropriate and consistent with the value of the procurement.

(2) If the historical buy was automated, attempt to negotiate better pricing regardless of the previous packaging level.

(3) To realize savings from a change in packaging requirements, compare the currently offered price to the historical price, however, do not change the packaging requirements without consulting with the packaging or product specialist. (This includes changes to the quantity unit pack (QUP) which is the number of items that may be in one package.)

(4) Document the levels of the packaging for the current buy and the previous buy, whether there was a change in requirements from military to commercial packaging, and the negotiations to secure price reductions as a result of a change to commercial packaging. (See PGI 13.106-3(b)(S-90)(1)(i) for a sample format to document a simplified acquisition.)

(C) Receive confirmation from the contracting officer that packaging was reviewed and negotiated.

15.402-90 Pricing policy – exclusive dealers.

(a) DLA contracting officers are required to obtain data other than cost or pricing data, without requiring certification (see FAR 15.402(a)(2)(i) and (ii)), when the Truth in Negotiation Act (TINA) does not apply and there is no other basis for determining that the proposed prices are fair and reasonable (e.g. through market research and price analysis techniques). In these situations when TINA does not apply, the distributor/dealer must provide its cost-type data when required by the contracting officer. Additional guidance is contained in DFARS PGI Subpart 215.4. Moreover, if the contracting officer is relying on previous prices paid by the Government, the contracting officer must establish that a thorough price or cost analysis was performed on the previous buys (see DFARS PGI 215.403-3(4)).

(b) It is critical that all levels of management support the contracting officer in acquiring cost-type data other than cost or pricing data, necessary for determining fair and reasonable prices. If the exclusive distributor’s or dealer’s representative does not provide the information requested by the contracting officer, the situation should be elevated to higher levels of management within both the government and contractor organization. When TINA does not apply, any distributor or dealer who does not comply with the requirement to submit data other than cost or pricing data for a contract or subcontract is ineligible for award unless the head of contracting activity (HCA) determines that it is in the best interest of the Government to make the award to that offeror in accordance with FAR 15.403-3(a)(4). The contracting officer must ensure the following is clearly documented in support of the request to the HCA:

(1) The effort taken to obtain the data;

(2) The need for the item or service; and

(3) Increased cost or significant harm to the Government if award is not made.

(c) In the event of an exigent situation when the HCA has approved award without obtaining requested data other than cost or pricing data, the contracting activity must notify the DLA Acquisition J72, and J7 will then notify Defense Procurement, Acquisition Policy.

(1) The form “reporting requirement for purchases from exclusive distributors and/or dealers” which has been loaded into the DLA preaward contracting system (DPACS) and EProcurement for completion by the contracting officer will include the following information:

(i) Contractor name and data universal numbering system (DUNS) number for the exclusive/distributor/dealer;

(ii) Subcontractor name and DUNS number (e.g., original equipment manufacturer (OEM) or 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-type data;

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

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

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

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

(2) DLA contracting activities will report this information on a quarterly basis by January 30 for October 1 – December 31 actions; April 30 for January 1 – March 31 actions; July 30 for April 1 – June 30 actions; and October 30 for July 1 - September 30 actions. J71 will ensure the completeness of the form and submit results through J7 to DPAP by March 15 for October 1 – December 30 actions; June 15 for January 1 – March 31 actions; September 15 for April 1 – June 30 actions and December 15 for July 1 – September 30 actions.

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

(a)(1) A sole-source item can be considered subject to limited competition when an item has a single manufacturing source but can be obtained from a limited number of suppliers (usually distributors for the sole source original equipment manufacturer (OEM)). Such limited competition acquisitions can meet the “adequate price competition” definition under the Truth In Negotiations Act (TINA) (FAR 15.403-1(c)(1)(i)) if (i) there are multiple offerors; and (ii) there is a finding executed by the contracting officer, documenting a reasonable basis for concluding that all offerors are offering prices in a manner truly independent of each other and the sole-source OEM

(b) The contracting officer must decide whether additional information, such as prior prices paid, is necessary to determine the reasonableness of the otherwise successful offeror’s price. This must be adequately documented in the contract file.

(c) Contracting officers shall use the following guidelines in making the determination :

(1) Assessing “Extent of Competition.” In acquisitions for sole-source items that are subject to limited competition, a major factor that must be considered is whether the original equipment manufacturer (OEM) exerts control over the competitors in the procurement, especially with regard to pricing, or whether the nature of the business relationship otherwise results in the OEM’s competitors’ pricing being directly dependent on the OEM’s pricing without significant independent pricing decisions by the competitors. If the OEM exerts control over dealers or distributors by controlling the resale prices that dealers or distributors may charge, adequate price competition does not exist. If, however, the dealers and distributors have access to adequate supplies of the OEM’s product and may set their own prices (even if those prices, by virtue of economic exigencies, vary very little from one dealer or distributor to another), then adequate price competition may be found to exist for Truth in Negotiations Act (TINA) purposes and for buys where TINA would not apply.

(2) OEM strategies. There are a variety of different alternatives employed by OEMs for selling/distributing products, including:

(i) Selling directly to all customers;

(ii) Selling through their own financially-affiliated network of dealers/distributors;

(iii) Selling to multiple independent (not financially affiliated) dealers/distributors; and/or

(iv) Entering into a sole dealer/distributor relationships (often found to lack transparency not conducive to independence and is often characterized by both parties refusing to make available the OEM’s cost data to substantiate atypical rapid growth in prices to the Government over time).

(3) OEM Control. The assessment should examine whether there is a financial (organizational) relationship under common ownership or control, or other business relationship not conducive to dealer/distributor independence and objectivity because the OEM exerts control over dealers or distributors. OEMs in situations involving competition with independent dealers/distributors may disclose cost details of their price.

(i) If the OEM does not provide a detailed breakdown of direct material, direct labor, overhead, along with general and administrative costs (G&A) to dealers/distributors, this could be an indication of OEM control over the dealer(s)/distributor(s). In this type of situation the contracting officer may not have enough information to determine price reasonableness of the item being purchased.

(ii) Dealers/distributors should generally:

(A) Conduct appropriate cost or price analysis on the OEM (that may be acting as a subcontractor to the dealer/distributor) to establish the reasonableness of the proposed price (DFARS PGI 15.404-3); and

(B) Include the results of this analysis in its price proposal.

(iii) In instances when the OEM is unwilling to furnish data required for this analysis to the dealer/distributor, higher tier subcontractor/contractor, or directly to the Government; or if the dealer/distributor is unable or unwilling to perform the analysis, this could be considered an indication of control by the OEM and a sign that adequate price competition does not exist.

(iv) The unwillingness to provide, or unavailability of, a written contract/agreement documenting an OEM’s business relationship with a dealer/distributor may also provide further evidence indicating the absence of an arm’s-length business relationship, which in turn may be indicative of a lack of a competitive market for sole-source parts offered by the dealer(s)/distributor(s).

(4) Determining price reasonableness. In situations where sole-source items are subject to limited competition, consider the low offerer’s price in comparison to historical prices paid, along with the need for information on the offeror’s systems, which may be useful indicators of price realism and/or reasonableness.

(i) Historical price comparison.

(A) An explanation of the basis and frequency of the OEM’s price increases to dealers/distributors should be requested and considered when the contracting officer is basing a price reasonableness determination on a price comparison to previous prices.

(B) A pattern of frequent/substantial price increases since the inception of a dealer/distributor relationship may indicate the absence of an arm’s-length business relationship. For example, if a dealer/distributor increases prices by 20 percent annually, but the applicable producer price index (PPI) or cost indexes for material and labor increased at a significantly lower rate, this should be investigated.

(C) Where available, price increase information for both the dealer/distributor and OEM (that may be acting as a subcontractor) should be evaluated to determine the reasonableness of proposed price increases. If the OEM is proposing price increases significantly higher than the applicable independent measure(s) of cost/price growth by the dealer/distributor, and if the OEM refuses to provide appropriate documentation to support its proposed costs to the dealer/distributor, this could be viewed as an indication of OEM control over the dealer(s)/distributor(s) and indicate that adequate price competition may not exist.

(ii) Contractor purchasing system. For acquisitions involving sole-source items subject to limited competition that exceed the truth in negotiation act (TINA) threshold, the contracting officer should consider:

(A) Obtaining current contractor purchasing system review (CPSR) status information from the cost and price office/analyst (see 15.404-1(c)(S-90)(5)), or direct from the cognizant Defense Contract Management Agency administrative contracting officer (ACO) of the most recent completed, pending, or planned review; and

(B) If the contractor does not have an approved purchasing system, or if the system has not been reviewed, consider requesting that the ACO evaluate whether the OEM’s projected sales to Government during the next 12 months meet the FAR 44.302 criteria, to determine if a contractor purchasing system review should be performed.

(C) If a contractor purchasing system review should be performed, the contracting officer should request that the ACO perform this review so that the information is available to the contracting officer.

(D) Documentation related to the contractor purchasing system review status, any request for a CPSR review or eligibility assessment, and the contractor purchasing system review report shall be included in the contract file supporting the award, and a copy furnished the cognizant local pricing office that is responsible for providing support for the acquisition.

(iii) Contractor estimating system review (CESR). For acquisitions of sole-source items subject to limited competition that exceed the TINA threshold and will result in an award to a large business, the contracting officer should consider obtaining current contractor estimating system review status information of the proposed large business awardee from the cost and price office/analyst or direct from the cognizant Defense Contract Management Agency ACO (DFARS 215.407-5). This information shall be documented in the contract award file supporting the award.

15.403 Obtaining cost or pricing data.

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

(b) An approved TINA waiver, does not alter the requirements for performing some form of price or cost analysis to determine price reasonableness (see FAR 15.404-1(a)(1) through (a)(3)) and for documenting the results (see FAR 15.406-3(a)(11)).

(c) Standards for exceptions from certified cost or pricing data requirements.

(4) Waivers.

(A)(S-90) For an award or modification action which is subject to TINA requirements and to which none of the other statutorily-sanctioned exemptions (adequate price competition, price set by law or regulation, commercial item, or modifying a contract for commercial items per FAR 15.403-1(b)(1) through (b)(3) and (b)(5)) are applicable, the contracting officer should consider seeking an exceptional case TINA waiver. An exceptional case waiver may be granted, however, only when all three of the findings required by Section 817 of the Fiscal Year 2003 National Defense Authorization Act are met (see DFARS 215.403-1(c)(4)). A waiver shall not be granted simply because the price can be determined fair and reasonable without the submission of certified cost or pricing data. The contracting officer shall take the following actions if a TINA waiver will be pursued:

(i) Advise the offeror or contractor as applicable, of any requirement for cost or pricing data as identified in the relevant data requirements clause included in the solicitation or contract, request submission of the relevant data, and determine whether the offeror/contractor, as applicable, has provided TINA data in the past (DPAP memo, March 23, 2007, subject: Waivers Under the Truth in Negotiations Act (TINA) stated “TINA waivers should not be granted to contractor business segments that normally perform Government contracts subject to and in compliance with TINA.”)

(ii) If the offeror refuses, request the refusal be put in writing, with an explanation of why the required data is being withheld or no longer being provided, if applicable.

(iii) Decide whether the offeror’s price can be determined fair and reasonable based on a price comparison to a prior competitive buy or some other authorized means of price analysis.

(iv) Elevate the efforts to obtain TINA data through the offeror’s business segment officials and

(1) through the DLA channels for action to the senior reviewing official; and if unsuccessful, for action by the CCO and HCA

(v) Prepare a Truth In Negotiations Act (TINA) waiver determination and findings, which is to:

(1) include verbatim, the three statutorily-required findings (DFARS 215.403-1(c)(4)(A)(1) through (A)(3)), and

(2) follow the guidance at DFARS 215.403-1(c)(4)(A) and DFARS PGI 215.403-1(c)(4)(1).

(vi) Notwithstanding the existence of a prior blanket waiver, (including those referenced at DFARS 215.403-1(c)(4)(C) and (D)) the contracting officer must accomplish the price analysis required by FAR 15.404-1(a) in an effort to ensure that the overall price is fair and reasonable.

(vii) Prior to forwarding the waiver request through channels to the HCA the contracting officer shall:

(1) Prepare the additional documentation supporting elevation of a supplier’s refusal to provide cost or pricing data and a TINA waiver if applicable, as identified in 15.404-2(d).

(2) Coordinate, and furnish a copy of, the recommended draft TINA waiver D&F (with attached refusal letter from the offeror’s senior manager delineating why the offeror refuses to submit and/or certify the requisite cost or pricing data) and an electronic draft spreadsheet record of the proposed TINA waiver, with the cost and price analysis office.

(viii) The cost and price analysis office is the focal point for reviewing and providing advice on proposed TINA waiver D&Fs, maintaining the TINA waiver tracking log, a copy of the proposed and approved TINA waiver D&Fs and for emailing the monthly report of all exceptional case TINA waivers that were in-process or executed during the month, using the J71 prescribed TINA waiver spreadsheet, to the DLA Acquisition J71 not later than five business days following the end of each month.

(ix) Following an unsuccessful negotiation with the contractor’s cognizant senior official for:

(1) The requisite cost or pricing data and subsequently, the certificate of cost or pricing data; and,

(2) The contractor’s letter of refusal with rationale why the data will not be provided including, as applicable, an explanation of why the data has been provided to the Government by the business segment in the past, but will no longer be provided, and/or data other than cost or pricing data to enable the contracting officer to determine the price(s) fair and reasonable, the contracting officer should follow the guidance at 15.404-2(d) for elevating TINA refusals to the HCA.

(x) Following the unsuccessful accomplishment of the steps at 15.404-2(d) for processing by the Commander or Director, , the Commander/ Director HCA or chief of the contracting office shall promptly notify DLA Acquisition, attention: J7, and forward recommendations to resolve the impasse. A copy of the notice elevating the matter, along with a copy of the proposed D&F and supporting documentation (including that listed at 15.404-2(d)(S-90)(1) to (14)), should be forwarded electronically to DLA Acquisition J72 by the CCO or designee, e.g., normally the chief of the cost and price analysis office.

(xi) Within seven working days following receipt of the complete documentation package, J7 will contact the offeror and request the certified cost or pricing data or the written refusal. If the contracting officer is unable to determine the prices fair and reasonable, J7 will exhort the contractor to provide a basis the Government can use to determine the price(s) to be fair and reasonable.

(xii) Once J7 has made contact and the offeror has provided the refusal and information to enable a fair and reasonable price determination, or the offeror has re-engaged in negotiations with the contracting officer leading to fair and reasonable prices, the HCA can sign the waiver. If the offeror still refuses to provide documentation of its refusal, J7 will provide written documentation of the J7 effort, and outcome, to the cognizant contracting office for its records (Including where applicable, the SPE coordination per DFARS 215.403-1(c)(4)). If the price cannot be determined fair and reasonable, spot buys may be used as a last resort to maintain customer support since the requirements for issuing the waiver cannot be met.

(xiii) When the award action has been completed or cancelled, the contracting officer shall promptly advise the cost and price analysis office, in writing of the action taken on the D&F; if an exceptional TINA waiver was executed by the cognizant HCA, the contracting officer shall promptly prepare and furnish to the cost and price analysis office, a copy of the completed J71 electronic spreadsheet record of the TINA waiver, along with a .PDF format copy of the completed (signed, with signature block, and dated) TINA waiver D&F, with the attached contractor TINA refusal, if available. This information will be used for DLA’s quarterly report of TINA waivers to DPAP (which is the basis of the annual OSD report; see DFARS PGI 215.403-1(c)(4)(B)).

(C)(S-90) The DoD waiver of submission of certified cost or pricing data from the Canadian Commercial Corporation (CCC) (DFARS 215.403-1(c)(4)(A)) states that the integrity of the assurance of fair and reasonable prices by the Government of Canada can be assumed. However, proposal analysis is required (FAR 15.404-1). Where price analysis indicates a fair and reasonable price significantly different than that offered by CCC, the contracting officer should initiate discussions with the CCC to request confirmation of the price reasonableness determination. A brief explanation of why the confirmation is being requested, i.e., the results of the price analysis, should accompany the request.

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

(a) General.

(4)(S-90) The determination and findings at FAR 15.403-3(a)(4) that it is in the best interest of the Government to make the award to that offeror:

(A) is delegable by the contracting activity HCA to the chief of the contracting office (CCO), with power of redelegation without further delegation, to one level below the CCO, and

(B) has been delegated to the CCO for other DLA contracting offices (see 2.101, contracting offices not designated a contracting activity) without power of further delegation.

(b) Data Other Than Certified Cost or Pricing Data

(1) Policy on Requiring Data Other Than Certified Cost or Pricing Data (FAR 15.403-3). The contracting officer is responsible for obtaining data other than certified cost or pricing data to the extent necessary to determine price reasonableness or cost realism.

(i) When certified cost or pricing data are required, contractors are required to use the format in FAR 15.408, Table 15-2.

(ii) When the pricing action is not subject to TINA and the contracting officer has no other means for determining price reasonableness, data other than certified cost or pricing data may be required. The contracting officer must determine the amount and format of additional data that will be needed in order to determine price reasonableness. To the maximum extent practicable, limit the requirement to data in a form regularly maintained by the offeror in commercial operations.

(iii) Read the referenced definition of data other than certified cost or pricing data carefully. Although we want to limit requests for data to only that which is necessary to determine fair and reasonable prices, there is virtually no limit on the type of data the contracting officer can require. The type of data that may be required include: prior sales; catalog pricing and discounts; limited cost data such as: hours by labor category and direct and indirect rates, or possibly full cost data where absolutely necessary. Because the pricing action is exempt from TINA, the contractor would not be required to sign a certificate of current cost or pricing data.

(iv) The key differences between "certified cost or pricing data" and "data other than certified cost or pricing data" is that "certified cost or pricing data" requires the contractor to also submit a Certificate of Current Cost or Pricing Data and requires the use of Table 15.2 (FAR 15.408). On the other hand, "data other than certified cost or pricing data," although it could be made up of the same data, does not require a Certificate of Current Cost or Pricing Data and does not require submission of data in the format at Table 15.2. Also, while under TINA requirements the offeror/contractor is required to disclose all facts that a prudent buyer or seller would expect to have a significant impact on price, under "data other than certified cost or pricing data" the contracting officer may only require limited cost information from the offeror/contractor.

(v) Generally, you should not require firms to submit data other than certified cost or pricing data when there is adequate price competition.

(A) If you need additional information to determine price reasonableness, to the maximum extent practicable, the contracting officer must obtain the necessary information from sources other than the offeror.

(B) However, the contracting officer may require data other than certified cost or pricing data to determine the cost realism of competing offers or to evaluate competing approaches.

(vi) Unless price reasonableness will be determined by adequate price competition or a price set by law or regulation, obtain (as a minimum) appropriate information on prices at which the same item or similar items have previously been sold that is adequate for determining price reasonableness.

(A) For commercial items:

(1) Limit requests for sales information to data for the same or similar items during a relevant time period. When using sales information for similar items, the contracting officer may also request cost information to help determine the impact, on price, of the differences between the item being procured and the similar item being used for comparison.

(2) To the maximum extent practicable, limit the requirement to information in a form regularly maintained by the offeror in commercial operations.

(B) As specified in FAR 15.403-3(a)(4) (Section 808 of Public Law 105-261), an offeror who does not comply with a requirement to submit data that the contracting officer has deemed necessary to determine price reasonableness or cost realism is ineligible for award unless the Head of the Contracting Activity determines that it is in the best interest of the Government to make the award to that offeror, based on consideration of the following:

(1) The effort made to obtain the data.

(2) The need for the item or service.

(3) Increased cost or significant harm to the Government if award is not made.

(C) Contractor refusals to submit requested information, and all actions taken by the contracting officer and at levels above the contracting officer to address those refusals, must be fully documented.

(2) Price Data Other Than Certified Cost or Pricing Data. The contracting officer may require the offeror/contractor to provide price data under the requirements of "data other than certified cost or pricing data." Price data will be particularly important for commercial items purchased noncompetitively.

Price Data Other Than Certified Cost or Pricing Data
Information Element | Consider Requiring Offerors/Contractors To... | Related Analysis Questions
Catalog pricing | Identify any relevant offeror commercial catalog, its date, catalog prices, and related discounts. Also require the offeror/contractor to explain any differences between the offered price, the established catalog price, and price of recent sales in quantities similar to the proposed quantities. | Does the firm have a commercial catalog price? How do the prices for recent commercial sales compare with the catalog price? How does the price offered compare to the catalog price and the circumstances of the commercial sales?
Market pricing | Describe the nature of the relevant market and how that market affects the offered price including the source and date or period of any relevant market quotation or other basis for market price, the base market price, and applicable discounts or other price adjustments. | Is there a commercial market for the item? Is there an independent and verifiable record of the market price? How does the price offered compare to the market price and the circumstances of the commercial sales?
Other evidence of prices charged | Provide evidence of prices charged other customers under similar circumstances. For example, the firm could provide copies of contracts with other customers to document the prices charged. | Can the offeror provide evidence of the prices paid by commercial customers? Do commercial customers verify the prices paid? How does the price offered compare with the prices paid by other customers under similar circumstances?
Services normally provided | Describe the services provided by the offeror/contract to the firm's buying at the prices provided as bases for price analysis. Different firms and industries provide different levels of support services for their products, including product warranties, set-up, and financing. | What services are provided other customers? Based on services provided, should the Government price be different than the price charged commercial customers?
Normal order size | Document the normal order size for firms paying prices provided by the offeror/contractor as bases for price analysis. Prices may relate to the total size of each order, not just the price of the item involved. For example, an order could include 100 units of the item and nothing else, or the order could include 100 units of the item and thousands of units of other items. Presumably, the larger order should merit a lower price. | What was the total dollar value of orders with other customers? Based on the relative order size, should the Government price be different than the price charged other customers?
Annual Volume of Sales to Similar Customers | Document the sales volume to similar customers and the prices paid by those customers. For example, commercial firms often negotiate total volume discounts with major customers, over and above normal order quantity discounts. In comparing total volume of purchases, you should normally consider known acquisitions from all Government activities as a group. | Under similar circumstances, does the firm sell at lower prices to firms with larger total annual purchases? What prices are charged other customers with total annual purchases similar to that of the Government?
Lowest Price Charged Other Customers | Document the lowest prices recently charged other customers for the same or similar products. The Government procurement may not this most favored customer treatment, however this information will provide useful information on the lowest prices paid by any customer under any circumstances. What is recent will vary based on the type of item and the market. Generally, it will vary from three months to a year. | What is the lowest recent price paid for the same or similar product? How do the circumstances of the Government procurement differ from the circumstances of the lowest priced sale?

(3) Cost Data Other Than Certified Cost or Pricing Data . You may require an offeror/contractor to provide cost data under the requirements of "data other than certified cost or pricing data" to support your analysis of price reasonableness or cost realism. The table below examines situations in which additional cost data under "data other than certified cost or pricing data" might be needed. Examples of the type of questions that cost data could help answer are also provided. Government technical, field pricing, and audit assistance may be required to analyze the cost information and answer related questions.

Contracting Situation | Analysis Purpose | Analysis Questions
You expect a single offer at or below the certified cost or pricing data threshold, and you do not expect to be able to determine price reasonableness using price analysis alone. | Support determination of price reasonableness | Does the proposed price appear reasonable based on its relationship with estimated costs?
You expect a single offer greater than the cost or pricing data threshold that will be excepted from cost or pricing data requirements, but you do not expect to be able to determine price reasonableness using price analysis alone.
You expect competitive offers, but because of technical differences, you do not expect to be able to determine price reasonableness using price analysis alone.
You find that there are too few or outdated sales of commercial item to use as a basis for price analysis and cost analysis is the only reasonable method for determining price reasonableness.
You expect competitive offers for a cost-reimbursement contract. | Cost realism analysis to determine probable final cost to the Government. | Are proposed costs realistic for the work to be performed?
You expect competitive offers for a fixed-price contract, but new requirements may not be understood by all offerors. | Cost realism analysis to determine an offeror understands all contract requirements. | Do proposed costs reflect a clear understanding of contract requirements?
You expect competitive offers for a fixed-price contract, but you have concerns about the performance quality that will result from each offeror's proposal. | Cost realism analysis to determine an offeror's ability to deliver proposed quality at the proposed price. | Are proposed costs consistent with the offeror's technical proposal?
You expect competitive offers for a fixed-price contract, but market analysis leads you to believe that some offerors may propose unrealistic prices that would jeopardize contract performance. | Cost realism analysis to determine an offeror's ability to meet all contract requirements at the proposed price. | Do proposed costs reflect a clear understanding of contract requirements?

(4) Information Requirement (FAR 15.403-3(a) , FAR 15.408(l), FAR 15.408(m) , FAR 52.215-20 , and FAR 52.215-21). The solicitation/contract must specify the data and the format required:

(i) Tailor the requirement to the data essential for your analysis (e.g., do not require cost data if price data is adequate).

(ii) Permit the firm to select the format for submitting the data unless the contracting officer determines that use of a specific format is essential.

(iii) Ensure that the data used to support price negotiations is sufficiently current to permit negotiation of a fair and reasonable price.

(iv) Limit requests for updated offeror/contractor data to data that affects the adequacy of the proposal for negotiations (e.g., changes in price lists).

(v) Never require a certificate of current cost or pricing data for any data other than certified cost or pricing data.

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

(a)(1)(i) Pricing a contract award:

(S-90) If the award establishes a maximum quantity of supplies or services to be acquired or establishes a ceiling price or establishes the final price to be based on future events, the final anticipated dollar value must be the highest final priced alternative to the Government for all items priced and evaluated in the award, plus the highest dollar value of all such evaluated options (see also FAR 1.108(c)).

(S-91) The requirement to obtain certified cost or pricing data applies to actions of the following types for one or more items of supply or services not priced at time of award, when their combined total amount using any maximum order quantities for such items calculated exceeds the TINA threshold cited in the FAR clauses in (ii) above) that are included in the contract (see FAR 15.403-4(a)(1)):

(A) Exercise of a priced or undefinitized option for items having prices that were not evaluated at time of contract award in accordance with 17.206(b)(90),

(B) Definitization of an undefinitized option (See FAR 16.603 and DFARS 217.74),

(C) Definitization of another undefinitized contract action (see FAR 16.603 and DFARS 217.74), and

(D) Repricing action, e.g., an actual cost type EPA, action under the Changes, Claims, Price Reopener, and Prospective Repricing clause, etc. (See 17.9503(d) regarding Contract Management Plan (CPM) requirements.)

(S-92) The following postaward actions do not require certified cost or pricing data to be obtained:

(A) Exercise of priced options for items having prices which were evaluated at time of award,

(B) Price adjustments for items under an EPA based on established prices or on cost or price index(es), and

(C) Actions for which an exemption is applied (see FAR 15.403-1(b)(1) through (b)(3) and (b)(5)), e.g., when the price for an option is based on the price of a basic award for the same or similar item(s) for which one of the statutory exceptions apply; or when an EPA or other re-pricing action is based on a change in an established price (includes instances where cost or price indexes reflecting a change in a market is used), or a change in a price set by law or regulation.

(b)(S-90) Contracting officers shall:

(i) Identify in solicitations, any options which are subject to the requirement to obtain cost or pricing data prior to exercise of the option;

(ii) Specify in solicitations where applicable, that the offeror’s certificate must specifically identify, the evaluated option having price(s) covered by the certificate;

(iii) Identify in solicitations and resulting contracts any options expected to exceed the TINA threshold included in the contract which the contracting office does not plan to include in the preaward pricing evaluation and stipulate that as a prerequisite of exercise, they are subject to the submission and certification requirements of P.L. 87-653 as implemented by the applicable clause (FAR 52.215-20 or 52.215-21, whichever will be included in the contract); and

(iv) Coordinate with the cost and price analysis office as soon as pricing assistance is needed in accordance with 15.404-1(a)(S-90)(1)(i) or (ii).

(S-91) Certified cost or pricing data for indefinite quantity and requirements contracts. FAR 16.503 and 16.504 states that estimated total quantities to be ordered under requirements and indefinite quantity contracts respectively should be as realistic as possible. This information, along with the estimated number of orders and variability in order quantities, is required for realistic contract pricing. To avoid delays when contract price data must be obtained under these types of contracts, the solicitation should provide this information and specify that--

(i) It should be used by the offeror in developing the unit price(s) proposed;

(ii) The price proposal must include an explanation of the production quantity and period used in developing the proposed unit price(s) (The planned production quantity may be greater than, equal to, or less than the maximum quantity of an indefinite quantity contract/total estimated quantity of requirements contract, exclusive of any contract options.); and

(iii) The offeror is requested to quantify any reduction in the offered unit price(s) available if the minimum order quantity was raised and/or a guaranteed minimum contract quantity established.

15.404 Proposal analysis.

15.404-1 Proposal analysis techniques.

(a) For contract actions that exceed TINA threshold but less than $10 million, after receipt of offers, but no later than upon receipt of adequate certified cost or pricing data (CCPD) the acquisition specialist (AS) will search the Contract Business Analysis Repository (CBAR) for:

(1) Any recent (within the last 18 months) historical cost or price information that can be used to evaluate the current proposal/CCPD. This information may include:

(i) Indirect and Direct rates,

(ii) Status of Business Systems and withholds,

(iii) CAS Disclosure statements,

(iv) CAS non compliances,

(v) FPRA/FPRR with historical actual costs,

(vi) IR&D and B&P information, and

(vii) Business Clearance Information.

(2) The applicable DCMA and DCAA office points of contact. The AS will contact these offices and request additional historical cost or price information that could be used to evaluate the current CCPD. In general, unless necessary, DCMA and DCAA involvement should be limited to this providing data already captured on previous audits.

(b) In collaboration with the pricing office, the contracting officer will determine the scope of the analysis required (e.g. evaluation of material costs only; evaluation of material and labor costs only; full-blown analysis or audit). The proposal/CCPD and historical data is provided to the pricing office. To the maximum extent possible, the pricing office conducts the analysis of the CCPD in house, obtaining information from internal/external sources (e.g. in-house Product and Engineering Specialists, DCMA, DCAA, suppliers) when necessary. The pricing office works with local product specialists and engineering analysts regarding Technical Support for Negotiation (TSN). The pricing office will request DCMA or DCAA support if local product and engineering specialists cannot adequately and efficiently support the analysis needs.

(c) General.

(S-90) The cost/price analysis office shall provide:

(1) A price or cost/price analysis report, as appropriate, for:

(i) All sealed bid acquisitions at the TINA threshold or more where a sole responsive bid is received, and

(ii) All negotiated acquisitions at the TINA threshold ($200,000 for FPI (see 8.602(a)(91)(iii))) or more, where adequate price competition was not received (see FAR 15.403-1(c)(1)(i)), unless the contracting officer performs a price analysis (including, for rebuys, a comparison to prices paid for the same item in accordance with 15.404-1(d)) which documents that the price is fair and reasonable and is:

(A) Based on adequate price competition (FAR 15.403-1(c)(1)(ii) or (iii)),

(B) Set by law or regulation (FAR 15.403-1(c)(2)), or

(C) For a commercial item (FAR 15.403-1(c)(3)).

(2) A price analysis or cost/price analysis, as appropriate, for any other acquisition where assistance is deemed necessary by and requested by the contracting officer.

(3) Recommendations and coordination on all planned actions involving the "resolution" and "disposition" (see 15.406-3(b)(S-91)(2) and (3) respectively) of defective pricing and other "reportable" audits, and instances of suspected overpricing.

(4) All reports of reviews covering multiple line items shall include comments on the results of an assessment for unbalanced bids or offered prices (FAR 15.404-1(g)).

(5) Assessment assistance on actions involving sole-source items subject to limited competition (see 15.402-93(c)) when deemed necessary and requested by a contracting officer; and

(6) Review/approval status concerning:

(i) Contractor accounting system reviews,

(ii) Cost Accounting Standards disclosure statement adequacy reviews and compliance reviews,

(iii) Contractor estimating system reviews,

(iv) Contractor insurance/pension reviews, and/or

(v) Contractor purchasing system reviews

(S-91) When sufficient information is not available to determine price reasonableness using the price analysis techniques in FAR 15.404-1(b)(2)(i) through (iv), (vi) and (vii), the contracting officer will consult with value engineering or other technical specialists to obtain an independent "Should Cost" estimate pursuant to FAR 15.404-1(b)(2)(v) and, as applicable, FAR 15.404-1(e). This is an engineering-based cost estimate of an item assembly or a system which includes a complete cost estimate breakdown of material, labor, testing, packaging, set-up and manufacturing charges, overhead and profit, and any other relevant cost factors. Note that this approach does not require cost data from the offeror and is not a cost realism approach conducted pursuant to FAR 15.404-1(d).

(S-92) If the contracting officer determines that a procurement is for an item that meets the commercial item definition at FAR 2.101, the contracting officer cannot determine the offered price to be fair and reasonable on that basis alone. Some form of proposal analysis is also required.

(d) Price analysis.

(S-90) Whenever cost or pricing data or data other than certified cost or pricing data is obtained, the analysis shall also address the reasonableness of the offered price in comparison to prior prices paid for the item.

(2)(ii) When a comparison or trend analysis to prior prices is used, the rationale and amount of allowance (negative, zero, or positive adjustment) for each factor cited in the FAR shall be included in documentation of the price reasonableness determination, along with a statement of how these prior prices were determined reasonable. The contracting officer must consider the nature of the Government’s requirement (e.g., quantities being acquired, how the item is managed) compared with the circumstances under which prices were paid by another customer (e.g., quantities being acquired, whether an urgent requirement drove the price up). The contracting officer should take maximum advantage of the Government’s potential purchasing power and should expect terms and prices at least equal to those available to commercial or other customers that have similar size and influence in the market.

(2)(iv) When a price appearing in a contractor catalog or price list is relied upon as the basis to determine price reasonableness, the contracting officer shall include in the reasonableness determination documentation of the steps taken in confirming that the price list is current and includes prices at which sales are currently being made or were last made.

(2)(v) However, the standard price, the material acquisition unit price (MAUC) (unless based on recent purchases and escalated to the intended award date), budgetary estimates, and provisioning estimates are invalid bases for comparative price analysis and price reasonableness determinations.

(S-91) Vendor stock retention model.

(1) Refer to DLA Instruction 2101 Acquisition Business Case Analysis for guidance on when the vendor stock retention model (VSRM) is to be used as a part of stock method decisions. VSRM can be used on lower dollar value contracts at the contracting activity’s discretion. Regardless, the results from the VSRM are not used as the sole basis of acquisition sourcing decisions.

(2) VSRM was not designed for and should not be used to determine the reasonableness of contractor prices.

(i) Contracting officers should use the proposal analysis techniques for price and/or cost analysis as provided in FAR subpart 15.4 in their review and determination of the reasonableness of a contractor’s proposal.

(ii) Contracting officers are advised that VSRM is designed to assess costs only. It does not value different stock support approaches that provide different levels of delivery service. VSRM does not inherently reflect the benefits if one approach provides improved performance over another. VSRM does not consider other non-financial differences, such as customer support between one support strategy versus another.

(iii) Because of these factors, model results should not be used independently; rather, model results should be considered as input to more rigorous and expansive analyses that assess all factors to arrive at the best-value decisions for the Government.

(iv) While the VSRM provides valuable information on various acquisition sourcing alternatives, it should not be used in the determination of individual national stock number (NSN) price reasonableness. The VSRM results should be incorporated into a broader analysis to determine whether the Government or a contractor can supply and stock materiel more efficiently.

(e) Cost analysis.

(2)(iii) The comparison may be to actual costs incurred for the same item or for a similar item (with any necessary adjustments to achieve comparability of market conditions, quantities, time periods, and terms and conditions) by the same or another supplier.

15.404-2 Information to support proposal analysis.

(c) Audit assistance for prime contracts and subcontracts.

(S-90) For price proposals involving significant subcontracted amounts, requests for field pricing reviews should solicit decrement factor information (see 15.401) relevant to the award. Where extreme urgency necessitates award prior to completion of a subcontract review, negotiation of an appropriate decrement would obviate the need for a reopener clause (see DFARS 215.407-5-70(g)(2)(vi) or an undefinitized contractual instrument.

(d) Deficient proposals. When the offeror refuses to submit or certify cost or pricing data, the reasons why the data are needed and why they were not provided should be discussed with the offeror and confirmed in writing prior to elevation to higher Government and offeror management levels.

(S-90) In the event the efforts of the contracting officer and higher management are unsuccessful in obtaining the data, the matter shall be elevated, after review by the local pricing and contract review elements, to the Head of the Contracting Activity (HCA) along with the information in (1) through (14) below:

(1) What steps were taken to:

(i) Secure essential cost or price data.;

(ii) secure the contractor's cooperation,; and

(iii) assure the contractor that the information furnished by the contractor would be adequately safeguarded.

(2) An explanation as to why an exemption cannot be based on current or recent prices for a similar item or any of the other bases for exemption (FAR 15.403-1(b)(1) through (b)(3) and (b)(5)) to the requirement for cost or pricing data.

(3) The offeror's written refusal to provide the cost or pricing data and reason for the refusal (if unavailable, documentation of a telephone contact with a senior executive explaining why the contractor refuses to provide a written refusal).

(4) An explanation from the senior company official if possible, of whether, and under what circumstances, the offeror’s business segment furnished cost or pricing data for prior contracts with this or another Government contracting office.

(5) The identification and results of attempts (including, where applicable, attempts made by the auditor, the ACO, and other contracting offices) to secure cost or pricing data concerning the current and prior contract actions, including date(s), contract award(s), and the names, organizational level, job titles and phone numbers of participants in the negotiations.

(6) A complete buy history for the five item(s) expected to represent the highest Government expenditures under the proposed contract action.

(7) A copy of the cost or price analyses performed, which shall include a comparison with prior prices, and results of the price reasonableness determination.

(8) Substantiation that the item is mission essential.

(9) The current stock position, projected requirements, schedule of due-in’s, schedule of unfilled orders, and projected stock recovery date.

(10) Non-technical description of the item, including dimensions, and the next higher Assembly and the end item/weapon system it’s included in.

(11) Photograph (e.g., from a tech manual) or drawing of the item.

(12) The alternatives to proceeding with the acquisition.

(13) The suggested course of action considering the alternatives in (12) above.

(14) Realistic plan for avoiding, as applicable, another proposal deficiency or TINA refusal in the future.

(S-91) Negotiations with top management of the firm conducted by the CCO, HCA and, as appropriate, by the Commander/Director. When a contractor/subcontractor has refused to provide the required data for the first time, or when the Commander/Director or HCA has not personally negotiated with the contractor/subcontractor recently to obtain such data, the Commander/Director or HCA should attempt to secure the data. The Commander/Director or HCA shall execute a detailed memorandum setting forth the rationale for any decision not to personally negotiate for the data. This memorandum shall be included in the contract file, along with the above information.

(S-92) Following an unsuccessful negotiation where the extended dollar value of the award or other contract action (15.403-4) exceeds the TINA threshold (current value or value in the contract as applicable), the Commander/Director, HCA, or Chief of the Contracting Office for those contracting activities without a HCA, shall promptly notify DLA Acquisition, attention: J7, and forward recommendations to resolve the impasse, with supporting documentation ((1)-(14) above), to DLA Acquisition J72.

(S-93) See 15.403(c)(4)(A)(S-90) for this further elevation to continue efforts to secure TINA data and/or certification covering the offered price including, where required, subcontractor cost or pricing data and/or certification, or other information to determine price reasonableness of a contract action exceeding the TINA threshold, or a clear refusal to provide and/or certify the total price offered with rationale explaining the refusal.

15.404-4 Profit.

(c) Contracting officer responsibilities.

(2)(C)(2) Approval of an alternate structured approach required for other than awards cited in DFARS 215.404-4(c)(2)(C)(1) may be re-delegated not lower than the chief of the contracting office. Promptly upon execution, a copy of each approval shall be furnished to DLA Acquisition, J72.

(2)(e)(70) Include documentation of the rationale and derivation of the profit factors and amounts on the DD Form 1547 approved at the time of the prenegotiation briefing in the prenegotiation memorandum or attach it as a separate attachment or as part of the price/cost analysis report.

15.405 Price negotiation.

(a)(S-90) The offeror's refusal to provide and/or certify cost or pricing data or information other than cost or pricing data does not relieve the contracting officer from the requirement to perform a proposal analysis; nor does such refusal provide a sufficient basis for determining the price either fair and reasonable or unfair/unreasonable. In such instances, the guidance in 15.404-2(d) applies in the case of failure to provide certified cost or pricing data, and the same procedure should be followed in the case of failure to provide information other than cost or pricing data.

(d)(S-90) The referral of a contract action to higher authority for resolution of a price, profit or fee that the contracting officer deems to be unreasonable may be any level above the contracting officer. For estimated awards over the threshold cited in FAR 15.403-4(a), where an offeror refuses to provide required cost or pricing data and/or a price that cannot be determined fair and reasonable, the chief of the contracting office shall negotiate with the offeror or contractor in an attempt to secure cost or pricing data and/or delete those elements of the offer that render the price unreasonable. If unsuccessful, a detailed memorandum setting forth the results shall be forwarded with the referral to the head of the contracting activity for appropriate action (see 15.404-2(d)).

15.406 Documentation.

15.406-1 Prenegotiation objectives.

(b)(1) For acquisitions above the SAT and up to $10M, except for acquisitions involving cost analysis, the prenegotiation objectives will be documented in the Price Negotiation Memorandum (PNM). The contracting officer may include a memo or charts in the file until such time that the objectives are formally documented in the PNM.

(2) For acquisitions over $10M, and for those under $10M involving cost analysis, a Pre-Negotiation Memorandum (PNM) will be utilized.

15.406-1-90 Pre-Award Objectives

(a) Procedures for resolving audit disagreements.

(1) Resolution of contract audit disagreements.

(i) Concurrent with notification to their HCA, DLA Energy, DLA Troop Support, DLA Land and Maritime, and DLA Aviation contracting officers shall also notify DLA Acquisition J72 of the request for higher level review. J71 will track the frequency and disposition of audit resolution issues.

(ii) At the HCA level, a review will attempt to determine if the auditor’s and the contracting officer’s positions can be reconciled. The contracting officer shall document the disposition of the higher level review of the disagreement(s) in a memorandum for the contract file.

(iii) If the HCA is other than J7 and is unable to resolve the differences with DCAA, the approving authority shall notify J72 with copies of the contracting officer’s documentation of the issue. In turn, J72 shall inform the Director of Acquisition Management, J7, of the unresolved audit and the possibility of discussions with the DCAA Director prior to any DCAA referral to the Director, Defense Procurement and Acquisition Policy.

15.406-3 Documenting the negotiation.

(a) A standard price negotiation memorandum format will be used to document competitive and non-competitive negotiations. Use the appropriate Price Negotiation Memorandum (PNM) checklist to ensure PNMs contain required information as listed in FAR and DFARS and the information is presented in a consistent format as follows:

PRICE NEGOTIATION MEMORANDUM CHECKLIST COMPETITIVE
CONTENTS CHECKLIST | YES | NO | N/A
“FOR OFFICIAL USE ONLY” (FOUO) is at the top and bottom of the face or cover page, and on the bottom of each page containing FOUO, including the back page or cover. (DODManual 5200.01, Volume 4) |  |  |
1. SUBJECT |  |  |
a. Contractor name, division or group and location |  |  |
b. Contract or RFP number |  |  |
c. Item or service acquired |  |  |
2. INTRODUCTORY SUMMARY |  |  |
a. Contractor and proposal selected for award and date |  |  |
b. Offerors |  |  |
c. Tabular Summary of: proposed price, government estimate, and final proposal revision |  |  |
Major Price Items and/or CLINS |  |  |
Total |  |  |
Profit/fee % |  |  |
CPAF (base/award fee) ($ and %) |  |  |
Contract type |  |  |
c. Clearance authority |  |  |
(1) Approval authority |  |  |
(2) Approval date, meeting dates, and participants |  |  |
3. PARTICULARS |  |  |
a. Description of item or services being procured |  |  |
b. Explain method used to establish line item or unit prices |  |  |
c. Personnel: List names, title, organization and telephone number of participants in price analysis/cost realism (as applicable) discussions |  |  |
d. Significant dates: |  |  |
(1) Proposal date |  |  |
(2) Discussion(s)/date(s) |  |  |
(3) Final proposal revision date |  |  |
(4) Other significant date(s) (acquisition review board dates, competitive range determination, solicitation amendments, etc.) |  |  |
PNM CONTENTS CHECKLIST (COMPETITIVE) (Continued) | YES | NO | N/A
4. ACQUISITION SITUATION |  |  |
a. Acquisition background |  |  |
b. Discuss period of performance/delivery schedule |  |  |
c. Outside influences/unusual time constraints (i.e., Funding limitations, higher level, Congressional influences) |  |  |
d. Unique features or special pricing provisions (economic price adjustment , incentives, warranties, special progress payments, etc.) |  |  |
5. EVALUATION SUMMARY |  |  |
a. Reasonableness, completeness, cost realism, and balance |  |  |
(1) Description of the price analysis technique(s) used, results, and appropriateness in determining price reasonableness and completeness |  |  |
(2) Description of the cost realism analysis technique(s) and their result(s) (if accomplished) |  |  |
(3) Description of assessment of balanced pricing and any associated risks |  |  |
(4) Document the decision rationale for having discussions and the date(s) or the decision to award without discussions. |  |  |
(5) Description and listing of major differences between the proposal and the final proposal revision prices |  |  |
b. Adequate price competition determination |  |  |
(1) Determination statement of adequate price competition |  |  |
(a) Statement that the offeror selected for award has the best value to the Government and that cost was a substantial factor in the selection for award; or |  |  |
(b) Statement that offeror selected for award had the lowest evaluated price; or |  |  |
(c) Statement that offeror selected for award was based on adequate price competition |  |  |
(2) Definitive statement that the offered price selected is fair and reasonable based on adequate price competition |  |  |
6. ADVISORY REPORTS/KEY DOCUMENTS |  |  |
Listing of Government advisory reports (pricing, technical, should cost, etc. Include title, report number and date.) |  |  |
7. SIGNATURES |  |  |
Signature block for contracting officer, and any other signatures required |  |  |
8. Attachments |  |  |
Attachments as identified in the document |  |  |

PRICE NEGOTIATION MEMORANDUM CHECKLIST NON-COMPETITIVE
PNM CONTENTS CHECKLIST | PRE PNM | FINAL PNM | NA | SEE NOTES
“FOR OFFICIAL USE ONLY” (FOUO) is at the top and bottom of the face or cover page, and on the bottom of each page containing FOUO, including the back page or cover. (DOD Manual 5200.01, Volume 4) |  |  |  |
1. SUBJECT |  |  |  |
a. Contractor name, division or group and location |  |  |  |
b. Contract or RFP Number (as applicable include modification number) |  |  |  |
c. Item or service acquired |  | NA |  |
d. Delivery and/or Period of Performance |  |  |  |
2. INTRODUCTORY SUMMARY |  |  |  |
a. Date(s) of Negotiation and Agreement | NA |  |  |
b. Type of contractual action (new contract, supplemental agreement, etc.) |  | NA |  |
c. Tabular summary of cost, FCCOM, profit/fee and price: |  |  |  |
(1) Proposed and objective positions |  | NA |  |
(2) Proposed, objective and considered negotiated positions | NA |  |  |
(3) Separate summaries for options, etc. |  |  |  |
(4) Fee or profit rate for each position |  |  |  |
(5) Award fee pool for each position (as applicable) Ceiling price and percentage for each position (as applicable for cost contracts) |  |  |  |
(6) Type of contract for each position (FFP, FP/EPA, CPFF, CPAF, etc.) |  |  |  |
d. Approval authority |  |  |  |
(1) Approval authority |  |  |  |
(2) Approval date, meeting date(s), and participants |  |  |  |
(3) Limitations and/or conditions specified by the approving authority |  |  |  |
3. PARTICULARS |  |  |  |
a. Item or service identification: |  |  |  |
(1) Types and quantities |  |  |  |
(2) Previous buys of the same or similar items |  |  |  |
(a) When they were bought |  | NA |  |
(b) Quantity |  | NA |  |
(c) Contract type |  | NA |  |
(d) Prior unit or total prices (target/finals if applicable and available: document separately recurring and non-recurring costs) |  | NA |  |
(e) Current unit or CLIN prices (may be attached) with name of item, NSN, part number, quantities, etc., as applicable (document separately recurring non-recurring costs) |  | NA |  |
(f) Summary explanation of significant differences between the instant buy and most recent historical price(s) |  | NA |  |
(g) Stock Position of Items (include date stock position obtained, On-Hand Unfilled Orders, Inventory Consumption Rate, Due-In quantities, etc. Discuss any over/under position) |  | NA |  |
b. Explain method used to establish line item or unit prices |  |  |  |
c. Fact-finding/negotiation dates, places, names, titles, and office symbols for the government and the Contractor |  |  |  |
d. Principal government/Contractor negotiator identities |  |  |  |
4. ACQUISITION SITUATION |  |  |  |
a. Acquisition background (contract type, pricing, etc.) (address Long Term Contract and why it does/does not apply, surge and sustainment, etc. |  |  |  |
b. Period of performance and/or delivery schedule (address resolution of differences between required, proposed and negotiated) |  |  |  |
c. Outside influences/unusual time constraints |  |  |  |
d. Government furnished facilities, equipment or other support unique to this acquisition |  |  |  |
e. Unique features such as should cost, design-to-cost, life cycle cost, special payment procedures, and special provisions (clauses: savings, EPA, progress payments, performance based payments, validation of critical safety item and date ,incentives, etc.) |  |  |  |
5. NEGOTIATION SUMMARY |  |  |  |
a. Discussion/explanation of price analysis performed by the contractor and/or the government's price analysis in the following areas or a statement why it was not performed |  |  |  |
(1) Price element summary for proposed, objective, and considered negotiated amount. Narrative should discuss the position for proposed, objective and considered negotiated positions by topic. |  |  |  |
(2) Basis or estimating technique used to determine price reasonableness (attach exemption/waiver if in lieu of certified cost or pricing data) |  | NA |  |
(3) Identify submission of data other than cost or pricing data necessary to determine a reasonable price. Include discussion on rationale and required updates (attach sales data, catalogues, competitive price list, independent market prices, other data, etc.) |  |  |  |
(4) Identify subcontractors required to provide cost and pricing data where the prime's requirement has been waived |  |  |  |
(5) Requirement changes and how the price analysis and objective were adjusted |  |  |  |
(6) Significant differences between the objective and negotiated amounts | NA |  |  |
(7) Use of advisory information/report(s) to establish the objective, including significant differences between them, the objective, and the final negotiated agreement. |  |  |  |
b. Discussion/explanation of analysis and support for proposed, objective and (for PNM) negotiated position for contract terms and conditions that are |  |  |  |
c. Identify proposal of record used to establish objective. |  | NA |  |
d. When certified cost and pricing data is obtained, a statement of the extent to which the contracting officer relied on contractor provided data except where specifically identified (including agreed to cut-off dates) | NA |  |  |
e. If cost analysis is performed, major cost element summary with sub-paragraph index for proposed, objective and considered negotiated amounts (including direct and indirect costs for labor, materials, etc.) |  |  |  |
f. Discussions/explanations of cost analysis performed for each major cost element for contractor proposed, government objective and considered negotiated positions in the following areas: |  |  |  |
(1) Summary breakout of the components which make up the major cost element amounts |  |  |  |
(a) Labor hours by rate category |  |  |  |
(b) Identify and discuss indirect rate(s) |  |  |  |
(c) Materials and other costs by category |  |  |  |
(d) Subcontractor cost or pricing data |  |  |  |
1. Requirement, availability, adequacy of and reliance on subcontractor cost or pricing data |  | NA |  |
2. Sole source or competitive |  | NA |  |
3. Extent and adequacy of the prime's review |  | NA |  |
4. Why certified cost or pricing data were not obtained when required (attach waiver/exemption) |  | NA |  |
5. Why certified cost or pricing data were obtained when not required |  | NA |  |
(e) Basis or estimating method used |  |  |  |
(f) Explanation of contractor data not relied upon and reason for using other than contractor's data, identify data used to develop the government's position |  |  |  |
(g) Rationale, sources, and currency of the data used to establish the objective (include modification change determined to be non-commercial where originally determined commercial) |  | NA |  |
(h) Significant differences between the objective and negotiated amounts | NA |  |  |
(i) Use of advisory reports/IPT pricing in establishing the objective, including significant differences between them, the objective, and the final negotiated agreement |  |  |  |
(j) For undefinitized contract actions: actual costs to date, % of completion, trends and, as applicable, the contractor's estimate to complete |  |  |  |
PNM CONTENTS CHECKLIST (Non-Competitive) (Continued) | PRE PNM | FINAL PNM | NA | SEE NOTES
(2) With incentive arrangements, describe how the share ratio(s) and ceiling price(s) were established |  | NA |  |
(3) Profit (Fee). Explain how the objective was developed |  | NA |  |
(a) If WGM was used, state assigned weights and provide rationale when weights are below or above normal. (DD 1547 Attached to the PNM) |  | NA |  |
(b) If WGM not used, explain why not and how profit objective was developed |  | NA |  |
(c) List profit and /or fee rate(s) negotiated. If WGM profit objectives were not obtained in negotiations, explain why not and support profit and/or fee rate negotiated. | NA |  |  |
g. Summarize and include a definitive statement on why the negotiated price is fair and reasonable. (Address the 25% limitation on price increases (DFARS 217.7505) | NA |  |  |
6. ADVISORY REPORTS/KEY DOCUMENTS |  |  |  |
a. List government advisory reports (audit, pricing, technical, should cost, etc. Include title, report number and date .) |  |  |  |
(1) Explain use of informal field assistance in lieu of formal report(s) |  |  |  |
(2) Explain basis for any field reports required but not obtained |  | NA |  |
b. Provide status and explanation/disposition of the deficiencies on the following contractor systems that impact the instant negotiations. |  |  |  |
(1) Accounting system (include adequacy of disclosure statement and compliance with cost accounting standards) |  | NA |  |
(2) Purchasing system |  | NA |  |
(3) Compensation system |  | NA |  |
(4) Estimating system |  | NA |  |
(5) Any other business systems, as appropriate |  |  |  |
c. List/identify contractor provided data other than cost or pricing data and/or cost or pricing data. Identify certificate of current cost/pricing data, if provided | NA |  |  |
7. SIGNATURES |  |  |  |
Include signatures of the author of the PNM, Contracting officer and (as applicable) Approval Authority |  |  |  |
8. ATTACHMENTS |  |  |  |
a. DD Form 1547 - Weighted Guidelines |  |  |  |
b. DD Form 1861 - Facilities Capital Cost of Money (for the objective only) |  |  |  |
c. Other attachments identified in the PNM |  |  |  |

(11) The price reasonableness determination statement shall be documented in the contract file and in appropriate automated price history records, and shall:

(i) include the price reasonableness coding (PRC) (see 15.406-3-90).

(ii) It is essential to accurately record the price reasonableness codes to facilitate reliable price comparison analysis of future proposed prices for the same or similar items. The contracting officer cannot consider a price comparison from a prior contract price to current proposed prices to be valid if the prior price was determined unreasonable or the determination was not properly documented. (See FAR 15.404-1(b)(2)(ii)).

15.406-3-90 Acquisition of services.

(a)(11) The price reasonableness code (PRC), a two position code incorporated into DLA’s enterprise business system (EBS), consists of a first position reviewer code and a second position type analysis code, as follows:

First Position: | Reviewer Code: |
B | Buyer Analysis only.
C | Complete Pricing Support to buyer (field cost/price analysis, audit and/or technical reports included as part of the pricing office’s report).
F | Field Pricing Support to buyer. (One or more to include field cost/price analysis, audit and/or technical review.)
P | Local Contract Pricing Office Support to buyer. (Does not include field audit, pricing or technical assistance reports.)
V | Local Value Engineering Office support to buyer.
X | Price reasonableness determination accomplished using pricing logic of the automated purchase procedure.
Second Position: | Type Analysis Code:
Instant buy price(s) determined reasonable because of:
A | Adequate price competition from at least two independent manufacturers of the item.
B | Adequate price competition from at least one manufacturer plus at least one independent non-manufacturing source for the item or involving two or more independent non-manufacturing sources.
C | Catalog priced item sold in substantial quantities to the general public.
D | Market priced item sold in substantial quantities to the general public.
E | Item price set by law or regulation.
F | Cost analysis of offeror’s/contractor’s cost or pricing data, e.g. for UCA definitizations. (For exclusive distributors/dealers and other non-manufacturers, such cost analysis must include review of manufacturing costs from their source of supply.)
G | Price comparison to prior price(s) determined reasonable via valid price analysis.
H | Independent Government cost estimate.
I | Other cost analysis or price analysis technique(s) (includes reviews of limited cost data).
Y | Contracting officer’s determination that prices are fair and reasonable in accordance with FAR 13.106.3 or when 13.202(a)(3) applies. Used only for manual awards below the simplified acquisition threshold. Not to be used for awards using PACE or other automated procedures. For future acquisitions, actions coded with “Y” shall not be used for comparison in determining price reasonableness.
Instant buy price(s) determined reasonable based on comparison to:
J | Adequate price competition occurring in a recent procurement in comparable quantities, terms and conditions for the same item where quotes/offers were received from at least two independent manufacturers of the item.
K | Adequate price competition occurring in a recent procurement in comparable quantities, terms and conditions for the same item where quotes/offers were received from one manufacturer plus at least one independent non-manufacturing source of the item or from two or more independent nonmanufacturing sources.
L | Adequate price competition occurring in a recent procurement in comparable quantities, terms and conditions for substantially the same item where quotes/offers were received from at least two independent manufacturers.
M | Adequate price competition occurring in a recent procurement in comparable quantities, terms and conditions for substantially the same item where quotes/offers were received from either one manufacturer plus at least one independent non-manufacturing source of the item or from two or more independent non-manufacturing sources.
N | Catalog price for the same item sold in substantial quantities to the general public.
O | Catalog price for substantially the same item sold in substantial quantities to the general public.
P | Market price for the same item sold in substantial quantities to the general public.
Q | Market price for substantially the same item sold in substantial quantities to the general public.
R | Item price set by law or regulation.
S* | Analysis of cost and pricing data submitted by the offeror for a recent buy of the same item (including ACO approved Government parts catalogs and formula arrangements covering parts for which a TINA waiver was not granted).
T* | Analysis of cost or pricing data submitted by the offeror of a recent buy of substantially the same item (including ACO approved Government parts catalogs and formula pricing arrangements covering parts for which a TINA waiver was not granted).
Instant buy price(s) reasonableness not required because:
W | Award is an unpriced purchase order or undefinitized contract action. (Use with Reviewer Code B only. Price reasonableness determination shall be made at time of contract/order definitization.
X | Price not reviewed for price reasonableness by pricing logic of automated purchase procedures. Code is only applied by the automated system if a price reasonableness threshold is used/set in the initial logic. System will use with Reviewer Code X only. Not to be used for manual awards.

* Restricted to noncompetitive negotiated contract actions not exceeding the Truth in Negotiations Act (TINA) threshold (FAR 15.403-1(b)(4)) unless cost or pricing data and certification are obtained for the new buy or the offeror identifies its previous cost or pricing data submission and certifies it is still current, accurate and complete for purposes of pricing the current contractual action.

15.407 Special cost or pricing areas.

15.407-1 Defective cost or pricing data.

(d)(S-90) If following review by the pricing office and legal, the contracting officer's planned settlement objective is less than 70 percent of the amount reported by the GAO, DoD IG, or DCAA, a copy of the approved prenegotiation memorandum, including the audit and pricing reports and other relevant documentation shall be furnished for receipt in DLA Acquisition J72 at least 10 working days prior to initiating settlement action with the contractor.

15.407-5 Estimating systems.

(b)(S-91) Follow-up on contract audit reports.

(1) Responsibility of the chief of the contracting office. The contract follow-up official for DLA contracting offices, Director, DLA Acquisition (J7), has designated the chief of the contracting office as the official responsible for full and effective implementation of the requirements of DoDD 7640.2, Policy for Follow-up on Contract Audit Reports. A local contract audit focal point (the cost/price analysis office , where one exists) shall be established to assist in discharging the tracking and reporting requirements of the directive.

(2) Responsibilities of contracting officers.

(i) Promptly upon receipt of a contract audit report involving indirect cost rates, defective pricing, incurred costs, final pricing, terminations, claims, cost accounting standards, and reviews of a contractor's system the contracting officer shall furnish a copy of the report to the local contract audit follow-up focal point, and, if reportable (see DoDD 7640.2, paragraph F.3.), a detailed milestone plan for timely resolution and disposition. Updated milestone plans, reflecting the actual dates the milestones were achieved and revised target dates, shall be forwarded to the local contract audit follow-up focal point at the time any milestone is achieved or missed.

(ii) Contracting officers shall resolve any differences between their planned action and that recommended by the contract audit activity for all reportable audits. The contracting officer shall accomplish the required "resolution" promptly, and in no case later than 6 months following issuance of the audit report (reference is made to Public Law 96-527). Resolution occurs upon approval obtained, in accordance with local review procedures, of the planned negotiation and/or settlement objectives.

(iii) The contracting officer shall endeavor to accomplish disposition of all audit reports as soon as possible after resolution. Disposition should normally occur within 12 months following audit report issuance. As stated in Enclosure 1 to DoDD 7640.2, a reportable audit is closed when disposition occurs, i.e.:

(A) The contractor implements the audit recommendations of the contracting officer's decision; or

(B) The contracting officer negotiates a settlement with the contractor and a contractual document has been executed; or,

(C) The contracting officer issues a final decision pursuant to the disputes clause, and 90 days elapse without contractor appeal to the Armed Services Board of Contract Appeals (ASBCA) (should the contractor appeal to the claims court within the 12 months after final decision, the audit must be reinstated as an open report in litigation); or

(D) A decision has been rendered on an appeal made to the ASBCA or U.S. Claims Court and any corrective actions directed by the board or court have been completed and a contractual document has been executed; or

(E) Audit reports have been superseded by, or incorporated into, a subsequent report; or

(F) Any corrective actions deemed necessary by the contracting officer have been taken, so that no further actions can be reasonably anticipated.

(iv) In addition, the following actions must be performed:

(A) Upon completion of the "disposition" action, the contracting officer shall promptly furnish a memorandum of actions taken to the local contract audit follow-up focal point, the ACO, and to the auditor (refer to DoDD 7640.2, paragraph F.5.a.).

(B) When award does not result to the contractor whose offer was subject to a preaward audit report, for example, due to cancellation or award to a competitor, the contracting officer shall promptly provide written notification to the local contract audit follow-up focal point, the ACO, to the auditor (refer to DoDD 7640.2, paragraph F.5.b.).

(3) Responsibilities of contract audit follow-up focal points. The contract audit follow-up focal point is responsible for tracking and reporting the status of audit reports as specified below:

(i) Tracking every contract audit report, excluding "non-reportable audits," using milestone status information furnished by the contracting officer. The current status of each action is to be maintained in a log or similar document that includes all information required by the semiannual contract audit follow-up status report.

(ii) Preparing the semiannual report spreadsheets of "open" and "closed" audits (formats in DoDD 7640.2) in Microsoft Excel electronic format for submission by the chief of the contracting office and receipt in DLA Acquisition J72, not later than 10 April and 10 October of each year, along with a current milestone chart on each open audit (see 15.406-3(b)(S-91)). Negative reports are required. Electronically transmit a copy of the report spreadsheets.

15.408 Solicitation provisions and contract clauses.

(l) Requirements for cost or pricing data or information other than cost or pricing data. See 12.301(f)(S-93).

(m) Requirements for cost or pricing data or information other than cost or pricing data – Modifications. See 12.301(f)(S-93).

15.408-90 Contract clauses and solicitation provisions.

(a) Insert DFARS 252.215-7009 in all solicitations that are sole source and exceed the TINA threshold.

(b) Insert 52.215-9013 in solicitations and contracts where the contractor is producing goods at one or more facilities.

(c) Insert the clause 52.215-9021 in all DoD EMALL solicitations and contracts.

(d)(1)(i) Insert the provision at 52.215-9023, Reverse Auction, in all fully competitive solicitations with an estimated value above the simplified acquisition threshold (SAT), except for procurements already being supported by long-term contracts; unless the contracting officer determines reverse auctioning is not the most appropriate acquisition strategy to maximize both customer support and cost savings and documents the rationale for not using reverse auctioning in the contract file.

(ii) The following are considerations of instances in which reverse auctions may be used as the most appropriate competition and/or pricing method:

(A) Long Term Contracts;

(B) Fully competitive items;

(C) High volume, commercial items;

(D) Products with common specifications and little complexity;

(E) Items available off the shelf and based on competing by price alone;

(F) An ample, domestic supplier base;

(G) Competition where parts and services are both used to leverage savings;

(H) Transactional auction approach that explicitly defines buyer and supplier roles in pre-established contracts;

(I) Collaborative sourcing arrangements that focus on mutually beneficial activities and processes;

(J) Supplier willingness to make distinctive investments;

(K) Increased incentives for suppliers to participate by posting larger number of items over longer periods of time;

(L) Inclusion of more fair and open competition amongst a wider field; or

(M) Goods sourced primarily on price with limited ancillary considerations.

(iii) The following are considerations/examples of when reverse auctions may not be the most appropriate method for competition and/or pricing:

(A) Small Value Transaction Buys;

(B) OCONUS suppliers;

(C) Complex items, as described by the contracting officer;

(D) Items with significant declining demands impacting the industrial base;

(E) Industries with a decreased size in supplier base;

(F) Items with tight supplier profit margins;

(G) High system factor difficulties for suppliers;

(H) Increased vendor switching;

(I) Goods with high price volatility; or

(J) Goods with high variance among supplier capabilities;

(iv) Fully competitive solicitations are those for which the procurement will be conducted pursuant to FAR Subparts 6.1, and 6.2, FAR 8.405-1(c)(1) or (d)(3)(ii), FAR 8.405-2(c)(2)(ii) or (c)(3)(iii), FAR 8.405-3(b), or DFARS 208.405-70(c). Contracting officers will consider use of this provision in solicitations for all competitive procurements valued between the micro-purchase threshold and the simplified acquisition threshold (SAT). See 15.407-90 for weekly reporting requirements and additional reverse auction candidate selection criteria. All contracting offices conducting reverse auctions shall use the reverse auction pricing tool unless their PLFA commander approves a substitute approach or tool. When the current RA tool is used contracting officers shall ensure the “Lead/Not Lead” feature is turned on.

(2) Use clause 52.215-9033, Competing Individual Delivery Orders Through On-Line Reverse Auctioning, in solicitations and contracts where it has been determined that on-line reverse auctioning will be used as the pricing technique when competing some or all of the delivery orders issued against a multi-award contract with competitive ordering, including FAR Subpart 8.4 requests for quotes and blanket purchase agreements (BPAs) where the BPA ordering process for delivery orders will be governed by FAR 8.405-3(c)(2)(ii) or (iii).

(e) Insert the provision at 52.215-9034, Submission of Cost Data, in requests for proposals when the contracting officer determines in writing, based upon his/her knowledge of the industry, market place, region or market research conducted, that cost data may be required to establish a reasonable price and when adequate competition will not be obtained to support price reasonableness.

(f) 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 November 6, 2013 through PROCTLR 2014-07)

15.604-90 Handling of Unsolicited Proposals (UPs).

(a) DLA organizations that receive submissions from interested parties that appear to be within the scope of the unsolicited proposal (UP) coverage in FAR Subpart 15.6 shall forward them to their unsolicited proposal coordinator, as listed in (b) below. Upon receipt of a submission, the coordinator will immediately notify the Unsolicited Proposal Program Manager in DLA Acquisition J72 that a UP has been received. For those UPs received at DLA Acquisition J7, the J72 Unsolicited Proposal Program Manager will determine the appropriate unsolicited proposal coordinator(s) for evaluation and processing.

(b) Unless otherwise directed by J72, the following are the coordinators responsible for receipt and disposition of UPs, including providing DLA’s response to submitters, in accordance with (c) below.

(1) DLA Land and Maritime – Competition Advocate (primary) and Directorate of Procurement Process (alternate).

(2) DLA Troop Support – Chief, Pricing and Strategy Division.

(3) DLA Aviation – Chief, Pricing Division.

(4) DLA Energy –Associate Director, Acquisition Policy and Oversight.

(5) DLA Disposition Services – Chief, Acquisition Procedures Division.

(6) DLA Distribution – Chief, Acquisition Policy

(7) DLA Strategic Materials – Directorate of Contracting.

(8) DLA Logistics Information Service – Chief of the Contracting Office.

(9) DLA Contracting Services Office – Chief, Contract Clearance, Oversight, and Administration Office.

(10) DLA Document Services – Chief, Contracting Policy, Plans and Programs.

(c) Unsolicited proposal coordinators will:

(1) Be responsible for coordinating and processing unsolicited proposals.

(2) Protect the UP from unauthorized disclosure in accordance with FAR 15.608 and 15.609.

(3) Contact the J72 Unsolicited Proposal Program Manager if it is determined that a UP may require wider consideration within DLA.

(4) Maintain an accurate and complete record of the disposition of all UPs.

(5) Ensure all affected evaluation offices and personnel are following FAR 15.608 and 15.609.

(6) Ensure evaluators provide supporting rationale for their conclusions and recommendations. If the recommendation is to accept the submission as a UP, ensure evaluators indicate whether funds are currently available or programmed.

(7) Provide to any entity expressing interest to any DLA organization about submitting a UP the information covered by FAR 15.604(a)(1) through (6), as appropriate.

15.606-90 Agency procedures for review and evaluation of unsolicited proposals.

(a) The coordinator will review the submission and determine if it meets all UP requirements in FAR 15.606-1 and will notify the submitter in writing in accordance with FAR 15.606-1(b) or (c) no later than 10 business days after the coordinator’s receipt of the submission.

(1) If this initial letter provides an interim response stating that more review is required, it will state that the final response is expected to be completed within 30 business days from receipt of the submission, but that a further interim response will be provided at that time if evaluation cannot be completed within the 30 days, giving the estimated time for completion.

(2) In no event should the process take longer than 90 days from receipt of the submission; if it appears it will take longer, the coordinator will notify J72 and provide a complete explanation for the delay. J72 will then determine the final date for completing the evaluation and notifying the submitter.

(b) If necessary, the coordinator will forward the submission to the appropriate technical or other personnel for evaluation in accordance with FAR 15.606-2. If the evaluators request further information, the coordinator shall inform the submitter of the needed information, and that submission of the information will be at the submitter’s risk and expense, and shall create no obligation on the part of the Government. J72 will be advised that additional information from the submitter has been requested in order to complete the evaluation. After the evaluators have completed their analysis, they will advise the coordinator of their recommendation.

(c) Following the evaluation, the coordinator will inform the submitter by letter of the final determination.

(1) If the submission is not a valid unsolicited proposal or is otherwise unacceptable, the letter will state that determination and give an explanation of the rationale for the determination in accordance with FAR 15.603(c) and 15.607(a), as applicable.

(2) If the submission is determined to be a valid UP, the coordinator will inform the submitter of this but include a caution, in accordance with FAR 15.607(a), that a favorable comprehensive evaluation of an unsolicited proposal does not, in itself, justify awarding a contract without providing for full and open competition and that the unsolicited proposal will be provided to an appropriate contracting officer for a determination of whether further action is appropriate in accordance with FAR 15.607(b).

(3) A copy of the letter to the submitter indicating the disposition of the proposal will be provided to J72 and maintained by the coordinator.

(d) Upon receipt of a valid UP from the coordinator, the responsible contracting officer will determine, in accordance with FAR 15.607(b) and in coordination with the appropriate requiring activity, whether contract action is appropriate. The contracting officer will notify the submitter in writing whether he/she is commencing negotiations in accordance with FAR 15.607(b).

(e) A cover sheet is provided in FAR 15.609 and shall be used in all stages of the Government’s handling of a UP.