United States: Legal Insights: What Offerors Ought To Know About FAR Part 15

Offerors proposing to perform negotiated federal contracts need to understand FAR Part 15. Part 15, entitled "Contracting by Negotiation," prescribes policies and procedures governing negotiated acquisitions by the federal government. Non-negotiated contracts are awarded by federal agencies using the sealed bidding procedures described in FAR Part 14.

Purpose of Part 15

Negotiated acquisitions fall into two categories: sole source and competitive. Part 15 directs that when conducting a sole source procurement, the agency's request for proposals should be tailored to remove unnecessary information and requirements such as evaluation criteria and voluminous proposal preparation instructions. When contracting in a competitive environment, Part 15 is to be used to minimize the complexity of the solicitation, the evaluation of proposals, and the source selection decision. At the same time, this process is designed to foster an impartial and comprehensive evaluation of offerors' proposals, leading to selection of the proposal representing the best value to the government. FAR 15.002.

Trade-Off Process

In competitive acquisitions, Part 15 authorizes the agency to conduct a trade-off process. This procedure is appropriate when it may 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. When using a trade-off process, all evaluation factors and significant subfactors that will affect contract award and their relative importance must be clearly stated in the solicitation. The solicitation must also state whether all evaluation factors other than cost or price, when combined, are significantly more important than, approximately equal to, or significantly less important than, cost or price. When considering an award to other than the lowest priced proposal, the perceived benefits of the higher priced proposal must merit the additional cost and the rationale for trade-offs must be documented in the contract file. FAR 15.101-1.

Source Selection

The objective of source selection under Part 15 is for the agency to select the proposal that represents the best value to the government. FAR 15.302.

Award decisions are based on evaluation factors and significant factors that are tailored to the acquisition. Those particular factors and subfactors that apply to a specific acquisition and their relative importance are within the broad discretion of agency officials. This discretion is, however, limited by the following requirements:

  • Price or cost to the government must be evaluated in every source selection.
  • The quality of the product or service shall be addressed in every source selection through consideration of one or more non-cost evaluation factors such as past performance, compliance with solicitation requirements, technical excellence, management capability, personnel qualifications, and prior experience.
  • Past performance must be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold. For solicitations that are not set aside for small business concerns that involve consolidation or bundling, and offer a significant opportunity for subcontracting, the agency must include a factor to evaluate past performance indicating the extent to which the offeror attained applicable goals for small business participation. Past performance need not be evaluated if the contracting officer documents the reason past performance is not an appropriate evaluation factor for the acquisition.
  • Proposed small business subcontracting participation shall be included as an evaluation factor in all solicitations that are not set aside for small business concerns involving consolidation or bundling, that offer a significant opportunity for subcontracting.
  • All factors and significant subfactors that will affect contract award and their relative importance shall be stated clearly in the solicitation. The general approach for evaluating past performance information shall be described.
  • The solicitation shall state at a minimum whether all evaluation factors other than cost or price, when combined, are significantly more important than cost or price, approximately equal to cost or price, or significantly less important than cost or price. FAR 15.304.

Proposal Evaluation

Proposal evaluation is defined as an assessment of a proposal and the offeror's ability to perform the prospective contract successfully. Evaluations may be conducted using any rating method or combination of methods but the relative strengths, deficiencies, significant weaknesses, and risks supporting proposal evaluation must be documented in the contract file.

In evaluating cost or price, the government maintains that normally competition establishes price reasonableness. When contracting on a cost-reimbursement basis, however, evaluations shall include a cost realism analysis to determine what the agency should realistically expect to pay for the proposed effort, the offeror's understanding of the work, and the offeror's ability to perform the contract.

Past performance is another key evaluation factor because it is one indicator of an offeror's ability to perform the contract successfully. The currency and relevance of past performance information, the source of the information, the context of the data, and general trends in the contractor's performance will be considered by the agency.

Past performance evaluations should also consider information regarding predecessor companies, key personnel who have relevant experience, or subcontractors that will perform major or critical aspects of the requirement when such information is relevant to the acquisition at hand. In the case of an offeror without a record of relevant past performance or for whom information on past performance is not available, the offeror may not be evaluated favorably or unfavorably on past performance. The evaluation should include the past performance of offerors complying with subcontracting plan goals for small disadvantaged business concerns.

When trade-offs are performed, the source selection record shall document the technical evaluation including an assessment of each offeror's ability to accomplish the technical requirements and a summary, matrix or quantitative ranking, along with an appropriate supporting narrative of each technical proposal using the evaluation factors. FAR 15.305.

Post-Award Debriefing

An unsuccessful offeror, upon its written request within three days after the date on which that offeror received proper notification of contract award, is entitled to be debriefed and furnished with the basis for the source selection decision and contract award. At a minimum, the debriefing information must include:

  • The government's evaluation of the significant weaknesses or deficiencies in the offeror's proposal, if applicable;
  • The overall evaluated cost or price and technical rating, if applicable, of the successful offeror and the debriefed offeror, and past performance information on the debriefed offeror;
  • The overall ranking of all offerors when any ranking was developed by the agency during the source selection;
  • A summary of the rationale for award;
  • For acquisitions of commercial items, the make and model of the item to be delivered by the successful offeror; and
  • Reasonable responses to relevant questions about whether source selection procedures contained in the solicitation, applicable regulations, and other applicable authorities were followed. FAR 15.506.

Using Part 15 to Win Contracts

To secure awards of negotiated contracts from the federal government, offerors need a working knowledge of FAR Part 15. Part 15 provides prospective contractors with a checklist of the information the government's solicitation should contain. If any of these items are missing, they should prompt questions to the agency or even a pre-award bid protest. Part 15 also describes the basic set of evaluation factors the agency must consider in making a source selection decision. At a minimum, offerors must be prepared to completely and persuasively address each of these factors. Further, if a proposal is rejected and the contract awarded to another contractor, Part 15 describes the information that a disappointed offeror is entitled to receive from the agency at a post-award debriefing. Offerors should ensure that they obtain all of this information so they can adequately evaluate whether to pursue a post-award bid protest.

Originally published in PACA Pulse – Spring 2018

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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