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Change Number: 2024-0712
Effective Date: 07/12/2024

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CHAPTER 5: DEFINITIONS

CHAPTER 5: DEFINITIONS

Affordability Caps are the approved cost constraints for major systems acquisitions determined by the resources a DoD component can allocate, which provide a threshold for procurement and sustainment costs that cannot be exceeded. For other procurements, this is the approved funding allocated for a given acquisition.

Adverse past performance is defined as past performance information that supports a less than satisfactory rating on any evaluation. Adverse past performance that must be addressed with Offerors includes unfavorable comments received from sources such as those received from respondents from past performance questionnaires or interviews that have not been finalized within a formal rating system. A best practice can be to discuss adverse past performance which caused a rating to be lowered to Satisfactory Confidence.

Best Value is the expected outcome of an acquisition that, in the Government’s estimation, provides the greatest overall benefit in response to the requirement.

Clarifications are limited exchanges between the Government and Offerors that may occur when award without discussions is contemplated.

Communications are exchanges, between the Government and Offerors, after receipt of proposals, leading to establishment of the competitive range.

Competitive Range is the range of proposals that are most highly rated, unless the range is further reduced for efficiency. Discussions will be held only with Offerors in the competitive range. See FAR 15.306(c).

Deficiency is a material failure of a proposal to meet a Government requirement or a combination of significant weaknesses in a proposal that increases the risk of unsuccessful contract performance to an unacceptable level. See FAR 15.001.

Discussions are exchanges (i.e., negotiations) in a competitive environment that are undertaken with the intent of allowing the offeror to revise its proposal. Discussions take place after establishment of the competitive range. See FAR 15.306(d).

Due Diligence (Industry) – The process followed by prospective contractors to fully understand the government requirement in order to submit a complete, responsive proposal to the government which will result in a successful acquisition. Methods may include such activities as conducting site visits, attending industry days, one-on-one sessions with the acquisition teams, pre-proposal conferences and responding to draft requests for proposals.

Due Diligence (Government) – The process followed by the government acquisition team to ensure all prospective contractors are as informed of the government requirement and method of acquisition as possible in order to receive a reasonable number of competitive proposals from industry. Methods may include such activities as providing for site visits, conducting industry days, one-on-one sessions with interested vendors, pre-proposal conferences and sending draft requests for proposals to industry.

Evaluation Findings are the evaluator’s written observations/judgments regarding the individual merits of the proposal against the RFP requirements.

Evaluation Notice is the PCO’s written notification to the offeror for purposes of clarifications, communications, or discussions.

Excesses are elements of the proposal that have exceeded mandatory minimums (in ways that are not integral to the design) whose removal and corresponding price decrease may make an Offeror’s proposal more competitive. See FAR 15.306(d)(4).

Formal Source S election means the source selection process used where someone other than the PCO is the SSA, normally for high dollar value or complex acquisitions.

Large Business means businesses determined other than Small Business based upon industry size standards and/or North American Industry Classification System [NAICs]. Includes: Large businesses, State and Local Government and non-profit companies. May also include: public utilities, educational institutions, and foreign-owned firms.

Lowest Price Technically Acceptable is a process used in competitive negotiated contracting where the best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price. See FAR 15.101-2.

Minor or Clerical Error is a minor informality or irregularity that is merely a matter of form and not of substance or a clerical error apparent on its face in the proposal. Includes: obvious misplacement of decimal points, incorrect discounts, reversal of prices, and misdesignation of units.

Objective (or objective (maximum) as used in this document) is the value of an attribute that is applicable when a higher level of performance delivers significant increased operational effect, or decreased operational risk, if it can be delivered below the affordability cap. The objective value is the desired operational goal that is achievable but may be at a higher risk in cost, schedule, and technology. (For use in VATEP)

Performance Confidence Assessment is an evaluation of the likelihood (or Government’s confidence) that the offeror will successfully perform the RFP’s requirements; the evaluation is based past performance information.

Probable Cost is the government’s best estimate of the costs that a contractor will incur in performing a cost-reimbursement contract (FAR 15.404-1(d) (2)(i)). The probable cost must be ascertained by making a cost realism analysis during the evaluation of each proposal and must be used in making the source selection decision for best value.

Program Manager or Requiring Activity is the entity responsible for providing contract requirements documents within the RFP that communicate those requirements to the offeror.

Rating is the adjective/color descriptor assigned by the evaluators to the non-Cost/Price Factors and corresponding Subfactors. It represents their conclusions as to the quality of the proposal, supported by narrative write-ups identifying the associated findings (strengths, weaknesses, deficiencies, risks, and uncertainties).

Recency , as it pertains to past performance information, is a measure of the time that has elapsed since the past performance reference occurred. Recency is generally expressed as a time period during which past performance references are considered relevant.

Relevancy , as it pertains to past performance information, is a measure of the extent of similarity between the service/support effort, complexity, dollar value, contract type, and subcontract/teaming or other comparable attributes of past performance examples and the source RFP requirements; and a measure of the likelihood that the past performance is an indicator of future performance.

Requirements Documents are all aspects of the RFP that convey the needs of the Government to offerors, including the Statement of Objectives, SOW, PWS, technical requirement documents, and system requirement documents.

Risk , as it pertains to source selection, is the potential for unsuccessful contract performance. The consideration of risk assesses the degree to which an offeror’s proposed approach to achieving the technical factor or subfactor may involve risk of disruption of schedule, increased cost or degradation of performance, the need for increased Government oversight, and the likelihood of unsuccessful contract performance. (For firm-fixed-price contracts, the reference to increased cost may be removed from the risk definition.)

Sample Task is a hypothetical task that is given to Offerors during source selection to evaluate their understanding of the work and their ability to perform the work. It must be a reasonable representative of the type of work that will be required. Some rates used to price the task order must be binding on the contractor for the sample to be valid. (Incorporation of binding rates also applies to any live/real task order.)

Significant Strength is an aspect of an Offeror’s proposal that has appreciable merit or appreciably exceeds specified performance or capability requirements in a way that will be appreciably advantageous to the Government during contract performance.

Significant Weakness in the proposal is a flaw that appreciably increases the risk of unsuccessful contract performance. See FAR 15.001.

Source Selection is the process used in competitive, negotiated contracting to select the proposal that offers the best value to the Government.

Source Selection Advisory Council is a group of senior Government personnel, appointed by the SSA, that provides counsel during the source selection process, prepares the comparative analysis of the SSEB's final evaluation results, and makes an award recommendation to the SSA.

Source Selection Authority is the official designated to make the source selection decision.

Source Selection Decision Document is the document that reflects the SSA's independent, integrated, comparative assessment and decision.

Source Selection Evaluation Board is a group of individuals representing the various functional disciplines relevant to the acquisition, and is responsible for evaluating proposals against the solicitation criteria.

Source Selection Information is information prepared for use by an agency for the purpose of evaluating a bid or proposal to enter into an agency procurement contract, if that information has not been previously made available to the public or disclosed publicly. See FAR 2.101 for a listing of source selection information.

Source Selection Plan is a plan that describes how the source selection will be organized, how proposals will be evaluated and analyzed, and how source(s) will be selected.

Source S election P rocedures are designed to: (1) maximize competition; (2) minimize the complexity of the solicitation, evaluation and selection process; (3) ensure impartial and comprehensive evaluation of proposals; and (4) ensure selection of the source whose proposal is the most advantageous and realistic and whose performance is expected best meet the government’s stated requirements.

Source Selection Team is a team that is tailored to the unique acquisition, tasked with carrying out a source selection. Composition of the team generally consists of the SSA, PCO (if different from the SSA), SSAC, SSEB, Advisors, Cost/Price Experts, Legal Counsel, Small Business Specialists, and other subject-matter experts.

Standard of Proof is the evidence or standard by which the Government (evaluator) determines whether an Offeror has complied with the Government’s stated requirement.

Strength is an aspect of an Offeror’s proposal that has merit or exceeds specified performance or capability requirements in a way that will be advantageous to the Government during contract performance.

Subjective Tradeoff is a source selection process used when it may be in the best interest of the Government to consider award to other than the lowest priced Offeror or other than the highest technically rated Offeror but it is not possible to place a quantifiable value on proposed performance or capabilities above threshold (minimum) requirements (see DOD Source Selection Procedures paragraph 1.3.1.3.

Terms and Conditions Concerns are issues related to any of the contract provisions in the RFP.

Threshold (or Threshold (minimum)) as used in this document) is the minimum acceptable value of an attribute that is considered achievable within the available cost, schedule, and technology at low-to-moderate risk. Performance below the threshold value is not operationally effective or suitable or may not provide an improvement over current capabilities. (See also “mandatory minimums” in FAR 15.306(d)(4).)

Tradeoff Process is the competitive negotiation process where the government evaluates both cost/price and non-cost/price factors and awards the contract to the offeror proposing the combination of factors which offer the best value to the government. The process is appropriate when it is in the government’s best interest to consider award to other than the lowest priced offeror or the highest technically rated offeror.

Uncertainty is any aspect of a non-cost/price factor proposal for which the intent of the offer is unclear (e.g. more than one way to interpret the offer or inconsistencies in the proposal indicating that there may have been an error, omission, or mistake).

Value Adjusted Total Evaluated Price is a tradeoff source selection process where the Offeror’s total proposed price may be adjusted based on the “value” placed on better performance as identified in the RFP. The SSA must then determine if a higher rated technical offer is “worth” the additional cost to the Government.

Weakness is a flaw in the proposal that increases the risk of unsuccessful contract performance. See FAR 15.001

APPENDIX A Table Of Contents

A-1 Debriefing Guide

A-1 Purpose of Debriefing

Constructive Communication with Industry

Transparency, to the extent allowable by applicable regulations and laws, throughout the process can help to build trust and confidence on the part of offerors regarding the treatment of their proposal and the source selection decision outcome.

Unsuccessful offerors are sometimes able to accept negative findings in a debriefing if they perceive that the Government acted with fairness, consistency, objectivity, and in accordance with the evaluation criteria described in the RFP.

A-2 Requirements

Figure A-1 below provides a comprehensive side-by-side comparison of the requirements for preaward and postaward debriefings.

Figure A-1: Comparison of Preaward and Postaward Debriefings

Notes to Figure A-1:

(1) The offeror may request the debriefing be delayed until after contract award. When delayed, the debriefing shall include all the information provided in a postaward debriefing.

(2)In the event either the Government or offeror delays the debriefing, the PCO must provide the debriefing within the timeframe established for postaward debriefings.

(3) If an offeror submits an untimely request for debriefing, the PCO may nonetheless conduct a debriefing if feasible. In such case, inform the offeror the request is untimely. NOTE: If new information is provided during an untimely debriefing, it may form the basis of a timely protest. Therefore, obtain legal advice prior to providing an untimely debriefing

(4)Do not count the day the offeror received the notice; start with the next day. Consider sending the notice by mail with return receipt requested or by electronic means (facsimile transmission or e-mail) with immediate acknowledgment requested so that you can easily establish the date the offeror received it.

(5)Includes such things as trade secrets; privileged or confidential information, e.g., manufacturing processes and techniques, commercial and financial information, and cost data; and the names of individuals providing past performance information. It does not include information otherwise available without restriction to the Government or public.

(6) If the element was significant enough to eliminate the offeror from the competitive range, it is significant for debriefing purposes. Include both positive and negative aspects of the offeror’s proposal to help improve future proposals.

Other Information to Ensure a Meaningful Debriefing

In a postaward debriefing, disclose the evaluation ratings of the debriefed offeror and awardee to the subfactor level of evaluation; and all significant weaknesses, weaknesses, strengths, and deficiencies (if any) of the debriefed offeror’s proposal.

Disclose the debriefed offeror’s total evaluated prices and the awardee’s total evaluated cost/price (include unit prices only if releasable under FOIA, but DO NOT disclose the IGCE).

Disclose a summary of the rationale for the contract award decision. The rationale is contained in the SSA’s source selection decision document. Consider furnishing the debriefed offerors with a redacted copy of this document. Evaluation information concerning the other unsuccessful offerors and information not releasable under FOIA must be redacted prior to release (ensure no information listed in FAR 15.506(e) is released).

Clearly indicate that the debriefing has been concluded. Formal conclusion of the debriefing begins the protest window.

A-3 Notification of Debriefing

Regardless of the method of debriefing, the PCO should document all aspects of the process for arranging the debriefing date to include written acknowledgement from the offeror.

A-4 Debriefing Location

The PCO should always consider the needs of the offeror as well as the ability of the Government to accommodate when selecting the debriefing location. Just as important is the inclusion of the right personnel in the debriefing process. Therefore, all reasonable efforts should be made to ensure key individuals from distant locations can participate.

For face-to-face debriefings, the PCO shall ensure that all access and security requirements for offerors and Government personnel attendance are met. This may include requirements to access the installation or debriefing facility.

A-5 Debriefing Attendees

Government Personnel. As chair of the debriefing, the PCO should coordinate attendance of the right Government participants and ensure Legal Counsel attends, especially when the offeror’s Legal Counsel is going to attend. (Reference DOD Source Selection Procedures Appendix A.5.1)

Debriefed Offeror Personnel. Subcontractors may attend the prime contractor’s debriefing, with the invitation and consent of the prime contractor. (Reference DOD Source Selection Procedures Appendix A.5.2)

A-6 Preparing for the Debriefing

Because debriefings are time-sensitive, the prioritization of (and preparation for) this event(s) is critical. The extent of preparation may vary considerably with the complexity of each acquisition. This documentation (in addition to the outline, if used) will establish a “framework” to ensure the debriefing remains focused and productive.

Establish and Prepare Debriefing Documentation

Briefing charts alone (with information taken directly from final briefing slides presented to the SSA) may be sufficient.

A written script (which may later be provided to the offeror) may be prudent in addition to briefing charts.

Review and be familiar with the final evaluation report for the debriefed offeror.

Practice the Debriefing

Rehearse the order and execution of the debriefing.

Ensure the Government participants understand their roles and when to speak.

Set rules for taking new questions and caucusing.

A-7 Outline for the Debriefing – No Army Text

A-8 Conducting the Debriefing

Handling Questions

You may request that questions from the offeror’s personnel be funneled through their main spokesperson (this facilitates the orderly conduct of the debriefing).

As a general rule, do not answer questions on the fly.

Hold a Government caucus to formulate a response before providing an answer (maintain source selection materials in caucus room for reference if needed).

Government participants should only speak when requested by the PCO. Discussion should be tightly controlled.

At the end of the debriefing, advise the offeror that the debriefing is concluded.

At the discretion of the PCO, you may answer questions submitted by the offeror after the debriefing. You should advise the offeror that the information is not considered part of the official debriefing (thereby not impacting the protest time period).

The Post Debriefing Memorandum

The PCO must include a summary of each debriefing as a record in the contract file. This post-debriefing memorandum should include, at a minimum:

A list of all debriefing attendees;

A summary of the information disclosed during the debriefing. The most efficient means for doing this is to attach the debriefing slides to the memorandum;

The offeror’s request for a debriefing, if any;

The substance of all questions and answers discussed at, or provided subsequent to, the debriefing. This includes previously submitted questions, any hand-outs, and a list of written questions/answers;

Any other relevant documents.

A-9 Sample Offeror Questions – No Army Text

APPENDIX B Table Of Contents

Tradeoff Source Selection Process:

Subjective Tradeoff and Value Adjusted Total Evaluated Price Tradeoff

B-1 Subjective Tradeoff

Where the tradeoff source selection process is used to obtain best value, the subjective tradeoff process is appropriate for most Army source selections. The subjective tradeoff process provides the following benefits in source selection:

The ability for offerors to propose various technical approaches that may be of benefit to the Government. The competitive environment should encourage the freedom to do so depending upon what the solicitation places the most value/importance upon;

The ability to have meaningful comparisons and establish discriminators among competing proposals;

The ability to place a greater value on past performance by enabling discernment of an offeror’s performance record;

The ability of the SSA to give consideration to the benefit/value of non-cost/price factor differences between offerors and to determine if those differences justify paying the cost/price differential between them.

When using this process, clearly:

State the relative importance of the factors and subfactors;

Describe in Section L approaches or capabilities that the Government places a higher value on for exceeding the threshold (minimum) requirements if applicable, and;

Describe in Section M how the Government will assign findings (strengths or significant strengths) correlated to the expected positive impact of, or benefit received, where the offeror exceeds threshold requirements when evaluating these areas.

Use of Entry-Gate Criteria – As part of the subjective tradeoff source selection process, the DOD Source Selection Procedures allows for the use of entry-gate criteria. This is considered a combination approach utilizing concepts from both LPTA and Subjective Tradeoff. When determining your evaluation criteria, the PM and the PCO should closely examine the key requirements and carefully consider whether some objective elements (i.e. entry-gate criteria) could be evaluated using an acceptable/unacceptable or pass/fail rating methodology. During the evaluation of proposals, offerors must be determined to be acceptable or pass the entry-gate criteria in order to advance in the subjective tradeoff evaluation. When the requirement can be clearly stated with a corresponding standard of proof, using this combination approach with entry-gate criteria can simplify and streamline the evaluation process. See also Appendix C for more information on acceptable/ unacceptable criteria.

B-2 Value Adjusted Total Evaluated Price Tradeoff

VATEP may be appropriate where the PM is able to establish an affordability cap (limits on pursuing any above-threshold requirements), determine a relative order of importance for above-minimum performance or criteria, and assign a monetary value. Use of VATEP may be most suitable for procuring developmental items, where the Government can determine the value (or worth) of “better performance” and quantify it in the RFP.

VATEP Example 1

Scenario: This effort is for the purchase of an aircraft with multiple minimum performance specifications (threshold), some of which also have desired performance specifications (objective). The PM / RA has identified the 3 most desired objectives for which a Value Adjusted Total Evaluated Price will be determined.

SECTION M LANGUAGE : At the end of the paragraph, “Basis of Award”, insert the following language:This RFP employs the use of Value Adjusted Total Evaluated Price (VATEP) techniques which identifies, in advance, the value placed on above-threshold performance or capabilities in the Air Movement Mission-Range and Payload, Self-Deployment, and/or Cruise Airspeed requirements. The specific VATEP procedures and values for this effort are set forth below:If an offeror’s proposal exceeds the mandatory minimum performance specifications for the Air Movement Mission-Range and Payload, Self-Deployment Mission, and/or Cruise Airspeed requirements set forth in the Air Vehicle technical subfactor, the following VATEP procedures will be applied:An offeror can earn VATEP evaluation credit for meeting performance between the threshold and objective for the Air Movement Mission-Range and Payload and/or Cruise Airspeed requirements. An offeror can also earn VATEP evaluation credit for meeting the objective for the Self-Deployment Mission. The VATEP eligible objectives shall be embodied in the FUA Aircraft and also priced and delivered in Contract Line Item Number (CLIN) X001AA.The offeror’s total evaluated price for CLIN X001AA will be adjusted, for evaluation purposes only, in accordance with the chart below where above-threshold performance has been achieved for any of the three objectives identified. The VATEP objectives must be available on the first aircraft in order to be eligible for VATEP evaluation credit. Risk will not be assessed in VATEP since risk was already assessed in the Air Vehicle subfactor.

The SSA will consider the VATEP of the cost/price factor, along with the other evaluation factors, in making the source selection decision.VATEP is a technique used for evaluation purposes only. The value adjusted total evaluated price will not change the proposed unit prices set forth in Section B of the proposal, nor will it change the estimated contract value for award purposes.

SECTION L LANGUAGE : The offeror shall complete RFP Attachment L-5 (VATEP Calculations) to facilitate the Government’s review process.

(NOTE: RFP Attachment L-5 contains the chart identified in Section M above.)

VATEP Example 2

Example: The Army is buying a large equipment trailer (LET) using VATEP, and one of the requirements is maximum payload. The threshold is 80,000 lbs, and the objective is 85,000. As stated in the RFP, During Step 2 of the VATEP process the SST will adjust each offeror’s total proposed price (TPP) to derive the total evaluated price (TEP) by $1,000 for each 50 lbs. of increased payload over the threshold, for a maximum adjustment to the TEP of $100,000. This adjustment is for evaluation purposes only, and will not change the proposed pricing, which will become the awarded price. If an offeror proposes the threshold for payload, then they will receive no adjustment.

In this example, four proposals are received:

Offeror A: TPP=$1,050,000; at least an “acceptable” rating for all minimum requirements, proposes a maximum payload of 83,500 lbs, an increase of 3,500 lbs. over the threshold.

Offeror B: TPP=$1,000,000; at least an “acceptable” rating for all minimum requirements, proposes the threshold maximum payload of 80,000 lbs.

Offeror C: TPP=$1,150,000; at least an “acceptable” rating for all minimum requirements, proposes a maximum payload at the objective level of 85,000 lbs, an increase of 5,000 lbs over the threshold

Offeror D: TPP=$950,000; “unacceptable” for two minimum requirements, proposes a maximum payload at the objective level of 85,000 lbs, an increase of 5,000 lbs. over the threshold. Offeror D is eliminated in Step 1.

At the conclusion of Step 1, offeror B has the lowest TPP, with offeror A as the second-lowest cost/price and Offeror C as the highest price. However, offerors A and C have their TPPs adjusted since they have proposed maximum payloads above the threshold, while offeror B has no adjustment since they have proposed only the threshold maximum payload. The TEP adjustments are as follows:

Offeror A has proposed an increase of 3,500 lbs, which leads to a decrease of their TPP by $70,000, for a TEP of $980,000.

Offeror B has proposed the threshold, and receives no adjustment to their TPP. Therefore, their TEP is $1,000,000.

Offeror C has a proposed increase of 5,000 lbs, which leads to a decrease of their TPP by the maximum amount of $100,000, for a TEP of $1,050,000.

Image 0

Requirement: The US Government (USG) is soliciting for a large equipment trailer (LET). The LET has a rated payload of a minimum of 80,000 lbs (40 tons), with an objective payload of 85,000 lbs (42.5 tons). The LET is to be used to transport a variety of equipment. The LET will be employed for use on primary and secondary roads. The payload objective will be used to determine a Value Adjusted Total Evaluated Price (VATEP).

SECTION M LANGUAGE : At the end of the “Basis of Award” paragraph, insert the following language:

This RFP employs the use of the Value Adjusted Total Evaluated Price (VATEP) technique, which identifies in advance the value placed on above-threshold performance for the payload requirement. The specific VATEP procedures and value for this effort are set forth below.The Offeror’s total proposed price will be adjusted to arrive at a total evaluated price, for evaluation purposes only, in accordance with the chart below where above-threshold performance has been achieved for the payload requirement. The VATEP objective must be available on the first LET in order to be eligible for VATEP evaluation credit. Risk will not be assessed in VATEP. For each 50 lbs of increased payload, the total evaluated price (TEP) will be reduced by $1,000, for a maximum adjustment to TEP of $100,000. No credit will be provided above the maximum for performance over the objective.

The SSA will consider the VATEP of the cost/price factor, along with the other evaluation factors, in making the source selection decision.The VATEP adjustment is for evaluation purposes only, and will not change the proposed pricing, which will become the awarded price. If an Offeror proposes the threshold for payload, then they will receive no adjustment.

SECTION L LANGUAGE : The offeror shall complete RFP Attachment L-X (VATEP Calculations) to facilitate the Government review process.

The offeror’s LET shall meet or exceed the threshold identified in the table below. LETs that fail to meet the threshold will not be considered. If an offeror’s proposed payload exceeds the threshold performance specification set forth in the technical subfactor, the following VATEP procedures will be applied:An offeror can earn VATEP evaluation credit for meeting performance between the threshold and objective, or for meeting the objective requirement. This credit will be assessed as a reduction in the total evaluated price. If performance between threshold and objective is being proposed, the exact performance value shall be listed in Attachment L-X. An LET that meets the proposed above-threshold payload performance shall also be priced and delivered in CLIN X001AA.

APPENDIX C Table Of Contents

Lowest Price d Technically Acceptable

Source Selection Process

C-1 Purpose

The purpose of this Appendix is to assist acquisition professionals in making sound decisions for determining whether to use a Tradeoff or LPTA source selection process to obtain best value. LPTA is an available source selection approach. However, a lack of understanding of when it is an appropriate choice may result in misapplication of this process. This Appendix includes “side-by-side” comparisons of LPTA vs. Tradeoff characteristics, methodologies, common concerns associated with each, tips and best practices.

C-2 References

1. Federal Acquisition Regulation Part 15 https://www.acquisition.gov/browsefar

2. Defense Federal Acquisition Regulation Supplement Part 215 http://www.acq.osd.mil/dpap/dars/dfarspgi/current/index.html

3. Army Federal Acquisition Regulation Supplement Part 5115 https://spcs3.kc.army.mil/asaalt/procurement/AFARS/Home.aspx

4. Department of Defense Source Selection Procedures http://www.acq.osd.mil/dpap/policy/policyvault/USA007183-10-DPAP.pdf

5. Better Buying Power http://bbp.dau.mil/

6. Under Secretary of Defense (Acquisition, Technology, And Logistics) (USD(ATL)) memorandum, subject: Appropriate Use of Lowest Price Technically Acceptable Source Selection Process and Associated Contract Type (March 04, 2015) http://bbp.dau.mil/docs/Appropriate_Use_of_Lowest_Priced_Technically_Acceptable_Source_Selec_Process_Assoc_Con_Type.pdf

7. ASA (ALT) memorandum, subject: Use of Lowest Price Technically Acceptable Source Selection Process (April 20, 2015), issued as Policy Alert #15-73: Use of Lowest Price Technically Acceptable Source Selection Process (April 21, 2015) https://spcs3.kc.army.mil/asaalt/procurement/PARC/PARC.aspx

8. Government Accountability Office Cases - Various

C-3 Purpose

Policy Perspective on Use of LPTA. The DOD Source Selection Procedures includes a separate Appendix C devoted to the LPTA Source Selection Process (reference 4). The use of LPTA has increased but not necessarily successfully in all cases, causing concern by both the Government and Industry Partners. Some specific concerns include:

Government officials are not able to adequately define the requirement, and therefore not able to adequately define technical acceptability.

Awarded prices are unrealistically low.

Incumbent contractors underbid at unreasonable or unrealistic prices.

Winning contractors cannot attract qualified employees.

Contractors are unable to perform at acceptable quality levels.

Endangering the security of government resources, to include information systems and networks, and personnel.

To provide greater fidelity on the appropriate use of LPTA, Better Buying Power (BBP) 2.0 (reference 5) set basic guidance for use of LPTA. Subsequent memorandum issued by the Under Secretary of Defense (Acquisition, Technology and Logistics) (reference 6) and reinforced by the Assistant Secretary of the Army (Acquisition, Logistics and Technology) (reference 7), stress that:

“ LPTA has a clear, but limited place in the source selection “best value” continuum. Used in appropriate circumstances and combined with effective competition and proper contract type, LPTA can drive down costs and provide the best value solution. LPTA offers a streamlined and simplified source selection approach to rapidly procure the commercial and non-complex services we need to support the Warfighter. If not applied appropriately, however, the Department can miss an opportunity to secure an innovative, cost-effective solution to meet Warfighter needs to help maintain our technological advantage. ”

C-4 What is Risk?

No matter whether using Tradeoff or LPTA, the focus should always be on identifying the key discriminators based upon market research and the assessment of risk. Risk, as it pertains to source selection, is the potential for unsuccessful contract performance. Increased risk comes with numerous possible complicating factors including:

While it is impossible to eliminate all risk, the objective is to reduce or mitigate risks by selecting the best value offeror through a sound source selection evaluation process.

The Government’s risk is increased where the criteria (standards) are set too low. The source selection team must work together to ensure the PWS/SOW/Specification is complete and reflects the Government’s needs at the right quality level.

Identifying key discriminators that are linked to the critical requirements where key risks lie is one of the most important steps in the process of determining the right process to achieve best value.

If the evaluation criteria cannot be objectively defined strictly on the basis of acceptable/unacceptable, and a clear “standard of proof” be determined for each, the procurement is not a candidate for the LPTA process.

NOTE: If some, but not all, evaluation criteria fit the LPTA requirements a combination approach may be a consideration.

Caution – If the customer/requiring activity is concerned about improving performance, LPTA is not an appropriate source selection approach.

C-5 Quick Comparison of Best Value Basics

The FAR on Trade off vs LPTA Source Selection Processes

C-6 Comparing Key Characteristics

C-7 Rating Methodologies

Rating Methodologies. Tradeoff and LPTA each have a unique rating methodology as summarized below.

C-8 Common Concerns For Each Methodology

It is important to understand and consider the benefits and possible down-sides of each approach in order to ensure you select the one that will help you achieve best value for the customer/program. Below are some of the common concerns.

C-9 Tips And Best Practices For Using LPTA

Below are some general tips and agreed-upon best practices to guide application of LPTA techniques.

C-10 LPTA Requirement and Standard of Proof Samples

LPTA REQUIREMENT/STANDARD OF PROOF SAMPLES

SUPPLIES

PROFESSIONAL SERVICES

Corporate

SIMPLE SERVICES

Criteria: All illumination must be provided by LED lights drawing a maximum of 5 amps (C.13.1)

Question on Technical Information Questionnaire (TIQ): Are all the lights of the Light Emitting Diode (LED) type and a maximum combined draw of 5 amps?

Standard of Proof: Manufacturer’s spec sheets showing LED characteristics.

Criteria: Five program analysts with a Bachelor’s Degree in a business discipline with a minimum of 10 years of program analyst experience or a post-graduate degree in a business discipline (Master’s or Doctorate) with a minimum of 5 years of program analyst experience.

Question on Technical Information Questionnaire (TIQ ):Do all of the program analyst executives possess either a Bachelor’s Degree in a business discipline with a minimum of 10 years of program analyst experience or a post-graduate degree in a business discipline (Master’s or Doctorate) with a minimum of 5 years of program analyst experience?

Standard of proof: Resume showing degree and years of experience as specified.

Criteria: Contractor shall possess storage facility to store all equipment listed in attachment X within 15 miles of Arsenal (15 radial miles from geographic center of Arsenal).

Question on Technical Information Questionnaire (TIQ): Does the Offeror possess storage facility that meets 15 mile requirement listed in Section C.4.4?

Standard of proof: Provide evidence of ownership or lease of facility that meets requirements listed in Section C.4.4.

Criteria: The vehicle must be transportable by C-17, C-5, and military sea and rail IAW ATPD XXXX Section 3.1.X and 3.1.X

Question on Technical Information Questionnaire (TIQ): Does the width of the vehicle exceed 96”?

Standard of Proof: CAD drawing with all outside dimensions noted.

Criteria: Five Communications Personnel with minimum of 4 years of experience with military tactical or satellite communications system.

Question on Technical Information Questionnaire (TIQ): Do all of the candidates have a minimum of 4 years of experience with military tactical or satellite communications system?

Standard of Proof: Resumes showing years of experience as specified.

Criteria: Offerors must possess the equipment required to refinish a 3,500 sq. ft. wood floor.

Question on Technical Information Questionnaire (TIQ): Does the Offeror own or lease equipment that will be used to refinish a 3,500 sq. ft. wood floor IAW C.4.5?

Standard of Proof: Specify list of equipment and certificates of ownership for equipment or lease agreements.

Requirement: Engine must be able to be operated with JP-8 (C.1.3)

Question on TIQ: Does the vehicle run on JP-8 IAW ATPD- XXXX Section 3.3.5.1?

Standard of Proof: Manufacturer’s spec sheet for engine.

C-11 Flow Chart For Selection of Best Value Methodology

Image 1

C-12 LPTA – Sample Evaluator Write-Up

Describe the Evaluation Process in the Source Selection Plan – Then Fully Document the Evaluation In Accordance With the SSP

Use a checklist or evaluation form such as the one below:

Evaluation narrative write-up below provides an example of both ‘Acceptable” and “Unacceptable” proposal responses:

APPENDIX D Table Of Contents

Oral Presentations and Proposals

D-1 Introduction

Oral presentations provide offerors an opportunity to substitute or augment written information. You can conduct oral presentations in person or via video teleconference. Pre-recorded videotaped presentations do not constitute an oral presentation since it does not represent a real-time exchange of information. However, they may be included in offeror submissions, when appropriate.

Oral presentations may be beneficial in a variety of acquisitions. They are most useful when the requirements are clear and complete and are stated in performance or functional terms. Oral presentations are ideal for gathering information related to how qualified the offeror is to perform the work, how well the offeror understands the work, and how the offeror will approach the work.

D-2 Scope of the Oral Presentation

Before you can decide if oral presentations are appropriate for a given acquisition, you must select the evaluation factors and subfactors. Then decide whether the information you need to evaluate these criteria can be better presented orally or in writing or through a combination of both means.

You cannot incorporate oral statements in the contract by reference, so any information you want to be made part of the contract needs to be submitted in writing. At a minimum, the offeror must submit certifications, representations, and a signed offer sheet (including any exceptions to the Government’s terms and conditions) in writing. Additionally, as a rule of thumb, the offeror must submit other hard data ("facts"), such as pricing or costing data and contractual commitments, as part of the written proposal.

Oral presentations can convey information in such diverse areas as responses to sample tasks, understanding the requirements, experience, and relevancy of past performance.

Require offerors to submit their briefing materials in advance of the presentations. This will allow Government attendees an opportunity to review the materials and prepare any associated questions.

D-3 Request for Proposal Information

If oral presentations are appropriate, you must notify offerors in the RFP that the Government will use oral presentations to evaluate and select the contractor. The proposal preparation instructions must contain explicit instructions and guidance regarding the extent and nature of the process that will be used. Discourage elaborate presentations since they may detract from the information being presented. At a minimum, include the following information in the RFP:

The types of information the offeror must address during the oral presentations and how they relate to the evaluation criteria,

The required format and content of the presentation charts and any supporting documentation,

Any restrictions on the number of charts or the number of bullets per chart and how you will handle material that does not comply with these restrictions,

The required submission date for the presentation charts and/or materials,

The approximate timeframe when the oral presentations will be conducted and how you will determine the order of the offerors’ presentations,

Whether any rescheduling will be permitted if an offeror requests a change after the schedule has been established,

The total amount of time each offeror will have to conduct their oral presentation,

Who must make the presentation and a requirement that the offeror provide a list of names and position titles of the presenters,

Whether the presentation will be video or audio taped,

The location of the presentation site and a description of the site and resources available to the offeror,

Any rules and/or prohibitions regarding equipment and media,

How you will treat documents or information referenced in the presentation material but never presented orally,

Any limitations on Government-Offeror interactions during and after the presentation,

Whether the presentation will constitute discussions (see Figure 3-3),

Whether you will use the information in the oral presentation solely for source selection purposes or whether such information will become part of the contract (which will require a subsequent written submission of that information), and

Whether the offeror should include any cost/price data in the presentation.

D-4 Timing and Sequencing

You can conduct oral presentations either before or after establishing the competitive range. Where oral presentations are the only means of proposal submission, they must be presented by all offerors. If you conduct the oral presentations prior to establishing the competitive range, you must be careful they do not result in discussions.

Since preparing and presenting an oral presentation involves time and expense, you do not want to require offerors who are not likely to be serious candidates for award to have to conduct oral presentations. This can be an important consideration with small businesses. When this is a concern, establish the competitive range prior to oral presentations and clearly articulate in the RFP the methodology for doing so.

The PCO will often draw lots to determine the sequence of the offerors’ presentations. The time between the first and the last presentation should be as short as possible to minimize any advantage to the offerors that present later.

D-5 Time Limits

Establish a total time limit for each offeror’s presentation. It is not advisable to limit the time for individual topics or sections within the presentation; this detail is the presenter’s responsibility. If you are planning a question and answer session, exclude it from the allotted time and set a separate time limit for it.

There is no ideal amount of time to be allotted. Make this decision using prudent business judgment based upon the complexity of the acquisition and your own (or others’) experience and lessons learned.

D-6 Facility

Usually you will want to conduct the presentations at a facility you can control. This helps guard against surprises and ensures a more level playing field. However, nothing precludes you from conducting an oral presentation at an offeror's facility. This may be more efficient if site visits or other demonstrations are part of the source selection process.

If you are using a Government-controlled facility, make it available for inspection and, if warranted, a practice session. Allowing offerors to get acquainted with the facility will help ensure that it does not detract from the presentation content.

D-7 Recording the Presentations

Having an exact record of the presentation could prove useful both during the evaluation process and in the event of a protest or litigation. You can record the oral presentations using a variety of media; e.g., videotapes, audio tapes, written transcripts, or a copy of the offeror’s briefing slides or presentation notes. The SSA is responsible for determining the method and level of detail of the record.

If you use videotaping, allow for the natural behavior of the presenters. If slides or view graphs are used, the camera should view both the podium and screen at the same time. Place the microphones so that all communications can be recorded clearly and at adequate volume. Every effort should be made to avoid letting the recording become the focus of the presentation.

The recording, which is considered source selection information, will become part of the official record. Provide a copy to the offeror and seal and securely store the master copy of the recording to ensure there are no allegations of tampering in the event of a protest or court action.

D-8 Government Attendance

The PCO should chair every presentation. All of the Government personnel involved in evaluating the presentations should attend every presentation.

D-9 Presenters

The offeror’s key personnel who will perform or personally direct the work being described should conduct their relevant portions of the presentations. Key personnel include project managers, task leaders, and other in-house staff of the offeror’s, or their prospective key subcontractors’ organizations. This will avoid the oral presentation becoming the domain of a professional presenter, which would increase costs, detract from the advantages of oral presentations, and adversely affect small businesses.

D-10 Reviewing the Ground Rules

Prior to each presentation, the PCO shall review the ground rules with the attendees. This includes discussing any restrictions on Government-Offeror information exchanges, information disclosure rules, documentation requirements, and housekeeping items. These ground rules should also be included in the RFP.

If you are using a quiz as part of your evaluation, the PCO needs to discuss the related ground rules. For example, can the offeror caucus or contact outside sources by cell phone before answering?

Avoid too much control and regulation since it will inhibit the exchange of information. However, if you intend to avoid discussions, the PCO should control all exchanges during the presentation. If conducting oral presentations after opening discussions, you must comply with FAR 15.306 and 15.307.

D-11 Evaluation of Presentations

Evaluations should be performed immediately after each presentation. Using preprinted evaluation forms will help the evaluators collect their thoughts and impressions. Remember, even if you use preprinted forms, evaluators have to provide the rationale for their conclusions.

APPENDIX E Table Of Contents

Small Business Participation Proposal

Small Business Participation Proposal (Sample Format)

The Small Business Participation proposalformat is designed to streamline and bring uniformity to responses and evaluations for Small Business Participation (FAR 15.304). The format provides clarity in that it is distinctly different than the Small Business Subcontracting Plan required for large businesses only (FAR 52.219-9). A copy of the format can be provided in your instructions to offerors or as an attachment to the RFP.

S mall Business Participation Proposal (Format)

All offerors (both large and small businesses) are required to complete a Small Business Participation Proposal. Offerors should propose the level of participation of small businesses (as a small business prime, joint venture, teaming arrangement, and/or small business subcontractors) in the performance of the acquisition relative to the objectives/goals set forth in the evaluation of this area.

( a) Check the applicable size and categories for the PRIME Offeror only -- Check all applicable boxes:

{ } Large Prime

or

{ } Small Business Prime; also categorized as a

{ } Small Disadvantaged Business (SDB)

{ } Woman-Owned Small Business (WOSB)

{ } Historically Underutilized Zone (HUB Zone) Small Business

{ } Veteran Owned Small Business (VOSB)

{ } Service Disabled Veteran Owned Small Business (SDVOSB)

(b) Submit the total combined dollar value and percentage of work to be performed by both large and small businesses (include the percentage of work to be performed both by Prime, joint venture, teaming arrangement, and subcontractors):

Example: If the Prime proposes a price of $1,000,000 (including all options), and small business(es) will provide $250,000 in services/supplies as a prime, joint venture, teaming arrangement, or subcontractor, the % planned for small businesses is 25%; and 75% for large business, equaling 100%.

Total Percentage planned for Large Business(es) ____75_% = $ 750,000

Total Percentage planned for Small Business(es) ____25_% = $ 250,000

100% = $1,000,000

(c) Please indicate the total percentage and dollar value of participation to be performed by each type of subcategory small business. The percentage of work performed by Small Businesses that qualify in multiple small business categories may be counted in each category:

Example: Victory Prop Mgt (WOSB and SDVOSB) performing 2%; and Williams Group (SDB, HubZ and WOSB) performing 3%. Results equate to: SB 5%; SDB 3%; HubZone 3%; WOSB 5%; SDVOSB 2%; VOSB 2%;). SDVOSBs are also VOSBs automatically; however VOSBs are not automatically SDVOSBs.

(d) Identify the Prime Offeror and type of service/supply that the Prime Offeror will provide. Then list each of the intended subcontractors and principal supplies/services to be provided by that subcontractor. Provide the Commercial and Government Entity (CAGE) code for the Prime and each intended subcontractor. Also, provide the anticipated NAICS codes(s) that the Prime Offeror believes best describes the product or services being acquired by its subcontracts with each intended subcontractor. Small business Primes and small business subcontractors that qualify as small businesses in multiple small business categories should be listed in each applicable small business category.

Example: If a Small Business qualifies as a WOSB and a SDVOSB, you can add them to each category below in which they qualify.

Notes:

(1) Pursuant to Sections 8(d) of the Small Business Act, a business is considered small for Government procurements if it does not exceed the size standard for the NAICS code that the prime contractor believes best describes the product or services being acquired. In other words, the size of the prime’s suppliers is determined by the applicable NAICS code of their joint venture, teaming partner, or subcontract, which may or may not be the same NAICS code as the one for your prime contract with the Government.

(e) Describe the extent of commitment to use small businesses (e.g., what types of commitments, if any, are in place for this specific acquisition either – small business prime, written contract, verbal, enforceable, non-enforceable, joint venturing, mentor-protégé, etc.) Provide documentation regarding commitments to small business for this effort. Copies of such agreements should be provided as part of your small business participation plan and will not count against the page limitation for this volume.

APPENDIX F Table Of Contents

On–Line Reverse Auctions

F-1 Definition

An on-line Reverse Auction (RA) is an internet-based (electronic commerce) acquisition tool that allows the government to procure goods and services from suppliers in a competitive environment in which sellers, anonymously, bid prices down until the auction is complete.

A reverse auction is simply the opposite of a traditional auction. In a traditional auction, the seller offers an item for sale and multiple potential buyers submit sequentially higher bids for the item. Conversely, in a reverse auction, there are multiple sellers of items that compete for the business of a single buyer. During this competition the sellers ultimately drive the price of the item down.

F-2 Applicability to Best Value Acquisitions

On-line RAs are legal as long as the identity of the bidders is not disclosed. On-line RA tools may be used as a pricing tool for LPTAs or tradeoff acquisitions. For example, an RA tool can be used as a pricing tool for a tradeoff acquisition after the completion of technical discussion. You may conduct a reverse auction to establish the offerors’ final prices, provide these prices, along with the rest of the evaluation results, to the SSA for his/her use in selecting the proposal that represents the best value.

Potential benefits are: reduced acquisition cycle time and increased competition that in due course drive prices down as the offerors have visibility of the other prices being proposed. Additionally, the on-line RA process is inclusive, transparent, and immediately advantageous to both government and industry.

FAR Subpart 4.5 supports the use of electronic commerce whenever practical or cost-effective. On-line RAs should be utilized when it is anticipated that this method will deliver more value than the use of other available procurement methods. Additionally, RAs are more advantageous to the Government in reducing acquisition cycle time when the requirements are best suited for an RA environment.

F-3 Process

On-line RAs are conducted using a variety of procedures and automated tools. An agency may contract with an on-line auction service to conduct the reverse auction or it may conduct the reverse auction itself using commercially-available software.

In either case, the reverse auction must be conducted on a secure web-site and you must clearly state in the RFP the ground rules for the auction, particularly when the bidding will start and stop.

APPENDIX G Table Of Contents

Templates / Samples

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