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Project Officers'
Handbook
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U.S. ENVIRONMENTAL PROTECTION AGENCY
PROJECT OFFICER'S COURSE
Course Description & Objectives
A. GENERAL DESCRIPTION
The Project Officer's course is a comprehensive, survey-style, three and
one-half day course which provides the attendee with a thorough understanding of
the Project Officer's responsibilities within the pre-award phase of the acquisition
cycle. The course commences with a description of a contract and a comparison of
its use to grants and cooperative agreements; discusses authority of individuals
involved in the acquisition process; what is required of the Project Officer in
planning and developing the requirement; and delves into contract types and their
relationship to preparation of the Statement of Work. Considerable time is devoted
to: the development of a Statement of Work; exploration of specialized
sources—e.g., 8(a), LSA, and small business contracting; focusing on preparing an
independent Government cost estimate; developing technical evaluation criteria;
evaluating technical proposals; and the process of negotiating and selecting a
source. Althought not included in the course discussions, the text includes coverage
of the Project Officer's responsibilities in the post-award phase.
Course presentation is made through a combination of lecture and student
participation. It includes a pre- and post-course exam, both of which contain 50
objective test questions. The text for the course is the Project Officer's Handbook
(Second Edition - April 1984).
B. COURSE OBJECTIVES
The general objectives of this course are to:
• provide an understanding of the acquisition cycle;
• ensure that the student comprehends the Project Officer's responsibilities,
duties, and authority during the acquisition cycle;
• foster knowledge, understanding, and appreciation of the roles and
authorities of other persons in the acquisition process; and
• equip the student with specific information on how to perform the duties of
a Project Officer.
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PURPOSE, STRUCTURE, AND USE OF THE HANDBOOK
This Handbook has been developed for use by Project Officers as a reference
tool. It meets the needs of both the newly initiated and most experienced Project
Officers for information on the acquisition cycle and their responsibilities therein.
The Handbook incorporates all relevant regulatory and policy guidance at the time
of publication.
Chapter 1; Provides basic information such as definitions,
responsibilities of the key players in the acquisition
process, and an overview of the acquisition cycle. It is
recommended reading for newly-appointed Project Officers.
Chapter 2; Covers the Budget, Planning, and the Acquisition Planning
Process.
Chapter 3; Examines steps involved in individual acquisition planning
and scheduling.
Chapter 4; Provides coverage on the preparation of the procurement
request.
Chapter 5; Delineates step-by-step the evaluation and award processes.
Chapter 6; Provides comprehensive coverage of Project Officer duties
in contract monitoring.
Chapter 7; Outlines the rights and responsibilities of the parties under
all Government contracts.
Appendices; Include: A - Glossary of Terms; B - Acronyms; C - Work
Words; D - Extramural Activity Report; E - Front Page of
Commerce Business Daily; F - PEB Report Dated 12/14/83;
G - Sample Award Fee Plan Dated 12/14/83; H - Contract
Administration Case Study.
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April 1984
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EPA PROJECT OFFICERS' QUALIFICATION COURSE
COURSE SCHEDULE
First Day
8:30-9:30 Opening Remarks; Pre-Course Test; Course Overview; Purpose &
Objectives of the Course; and Class Introductions.
9:30-11:45 Legal and Regulatory Framework for Contracting, Business Ethics
and Conflicts of Interest, Contractor Fraud and the Role of the
IG's Office, Budgeting and Planning and Contracting Out.
11:45-12:00 EPA Organization for Procurement and Functional Responsibility
- Overview of the EPA Procurement and Contracts Management
Division Organization Functions and Responsibilities
- Relationship between EPA Contracting Officers and Project
Officers
12:00-1:00 LUNCH
1:00-2:00 An Overview of the Acquisition Cycle; Roles and Responsibilities
of Project Officers/Contracting Officers; and Methods of
Procurement.
2:00-4:30 Acquisition Planning & Scheduling
- Purpose & Types of Planning
- The Project Officer's Responsibilities
- The Procurement Cycle, and Lead Times
- Developing the Procurement Request
- Content of a Procurement Request (PR)
- Routing of the PR
- Role and Responsibilities of the Initiator of the Requirement
- Pre-Procurement Request Considerations
- Justifications for Other Than Full and Open Competition
- Options
- Incremental Funding/Bona Fide Need
- Determining Potential Sources
- Socially/Economically Disadvantaged Business Considerations
- Other Socioeconomic Programs
- Personal vs. Non-Personal Services
- Conflicts of Interest
- Management Consultants
- OMB Circular A-76
- Federal Reports Act
- Evaluation Criteria
- Project Clearances and Approvals
- Estimating Project Costs
- Specification
- Commercial Products
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Second Day
8:30-9:30 Contract Types
- Firm-Fixed-Price
- Time and Materials
- Indefinite Quantity
- Cost-Plus-Fixed-Fee
—Completion
—Term
- Cost-Plus-Award-Fee
- Additional Contract Types
9:30-12:00 Organizing, Composing and Preparing a Work Statement
- Purpose
- Importance and Implication for Contract Type Selection
- Types of Work Statements
- Pre-Planning
- Phasing and Work Breakdown Structure
- Planning the Work Statement
- Preparing the Work Statement
12:00-1:00 LUNCH
1:00-2:00 Organizing, Composing and Preparing a Work Statement (Con't)
- Writing the Work Statement
- Language of Work Statement
- Critical Evaluation of Work Statements—
Implications/Cost Estimating
Work Statement, Analysis, Critiques
2:00-3:30 Preparation of Statement of Work
3:30-4:30 Team Presentation of Work Statement, Analysis, and Critiques
Thereof
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Third Day
8:30-9:00 Summarization by Instructor of Preparation of Statement of Work
9:00-11:00 How to Develop Technical Evaluation Criteria
- When and Why Prepared
- Prerequisites for Preparing
- Content of Technical Evaluation Criteria
- Considerations in Writing
- Qualifications of the Offeror
- Characteristics of the Requirement
- Need to Tailor Criteria
- Weighting of Criteria
- Go-No-Go Evaluation Criteria
11:00-12:00 Class Exercise
- Development of Evaluation Criteria
- Presentation and Critique
- Instructor Summarization of Exercise
12:00-1:00 LUNCH
1:00-3:00 Proposal Evaluation
- Dollar Value of the Proposal and Role of Technical Evaluation,
Source Evaluation, and Business/Cost Evaluation Officials
- The Project Officer's Responsibilities
- The Purpose of Evaluation
- What's To Be Evaluated and Criteria To Be Used
- When Is a Proposal Acceptable, Unacceptable, or Capable of
Being Made Acceptable
- Predetermined Cut-Offs and Why They Should Not Be Used
- Communications During the Evaluation Process
- Protection of Data
- The Criticality of Narrative Comments
- Content and Use of Technical and Source Evaluation Reports
- Cost Proposals and the Project Officer's Role in Evaluating
Them
- Site Visits
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Third Day (Continued)
3:00-3:30 Technical Analysis
3:30-4:30 Selection of Offerers for Negotiation and Award
- The Competitive Range
- How To Develop and Structure Technical Questions
- Technical Transfusion and Technical Leveling
- Project Officer's Role During Negotiations
- Evaluating Written Confirmations
- Source Evaluation and Selection Procedures
- Technical Aspects of the Contracting Officer's Determination
of Responsibility
- Debrief ings and Project Officer's Role
- Freedom of Information Act
- Protests
Fourth Day
8:30-9:30 Selection of Offerers for Negotiation and Award
(Continued)
9:30-10:00 Course Summary and Evaluation
10:00-12:00 Final Examination
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U.S. ENVIRONMENTAL PROTECTION AGENCY
PROJECT OFFICER'S COURSE
TABLE OF CONTENTS
CHAPTER 1 MEANING AND OVERVIEW OF ACQUISITION
CHAPTER 2 ORIGIN OF REQUIREMENTS AND ADVANCE
ACQUISITION PLANNING
CHAPTER 3 INDIVIDUAL ACQUISITION PLANNING
AND SCHEDULING
Page
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3-1
CHAPTER 4 DEVELOPMENT OF THE PROCUREMENT REQUEST 4-1
AND OTHER RELATED ACTIONS
CHAPTER 5 PROPOSAL EVALUATION, NEGOTIATION, CONTRACT 5-1
AWARD AND PROTESTS
CHAPTER 6 CONTRACT ADMINISTRATION
6-1
CHAPTER 7 RIGHTS AND RESPONSIBILITIES UNDER
GOVERNMENT CONTRACTS
7-1
APPENDIX A GLOSSARY OF TERMS
B ACRONYMS
C WORK WORDS
D EXTRAMURAL ACTIVITY REPORT
E FRONT PAGE OF COMMERCE BUSINESS DAILY
F PEB REPORT DATED 12/14/83
G SAMPLE AWARD FEE PLAN DATED 12/14/83
H CONTRACT ADMINISTRATION CASE STUDY
A-l
B-l
C-l
D-l
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G-l
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TABLE OF CONTENTS
CHAPTER 1
M-1.000 MEANING AND OVERVIEW OF ACQUISITION
M-1.100 Introduction
M-1.101 Acquisition (Contracting) vis-a-vis Assistance
M-l.101-1 Differences
M-l.101-2 Relationships and Definitions
M-l.102 Legal and Regulatory Framework for Contracting
M-l.103 Key Participants in the Process
M-l. 103-1 Contracting Officer
M-l.103-2 The Contract Specialist
M-l.103-3 The Project Officer
M-l. 103-4 Limits on the Authority of the Project Officer
M-l.103-5 Competition Advocate
M-l. 104 Ratification
M-l. 104-1 Introduction
M-l. 104-2 Procedures
M-l. 105 Business Ethics and Conflicts of Interest
M-l. 105-1 Introduction
M-1.105-2 Business Ethics
M-l. 105-3 Personal Conflicts of Interest
M-l.106 The EPA Organization
M-l. 106-1 Introduction
M-l. 106-2 Organizational Structure for Contracting Operations
M-l. 107 The Acquisition Cycle
M-l. 107-1 Introduction
M-l. 107-2 Major Activities and Project Officer Responsibility
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EXHIBITS
1-1
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1-3
1-4
1-5
Flow of Contracting Authority
EPA Organization Chart
Organizational Structure for Procurement
The Acquisition Cycle
Major Acquisition Cycle Activities and
Project Officer Responsibilities
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CHAPTER M-1.000
MEANING AND OVERVIEW OF ACQUISITION
M-1.100 Introduction
To the potential Project Officer, the idea of being involved in an unknown
process that is critical to the success of his or her project or program is
unnerving. For this reason, Chapter 1 has been written to provide some basic
information such as definitions, responsibilities, and an overview or "road map"
of what is involved in the process.
M-1.101 Acquisition (Contracting) vis-a-vis Assistance
M-l.101-1 Differences
There are basic differences between acquisition and assistance.
Acquisition is the process of acquiring property or services for the direct
benefit of the Government by purchase, lease, or barter. Assistance is the
process of transferring money, property, services, or anything of value to a
recipient in order to accomplish a public purpose of support or stimulation
authorized by Federal statute.
M-l.101-2 Relationships and Definitions
(a) Acquisition and assistance instruments create different relationships
between the Government and recipients. Because of these differences in
Government/recipient relationships, the decision to use a particular
instrument must be made deliberately and in accordance with the rules for
using that instrument. Acquisition/assistance instruments are defined as
follows:
(1) Contract. A mutually binding legal relationship obligating the seller
to furnish supplies or services and the buyer to pay for them.
(2) Interagency Agreement. A legal agreement between Federal
agencies where goods or services are provided.
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(3) Cooperative Agreement. A legal instrument which defines the
relationship between the Government and a recipient for the transfer
of money, property, services, or anything of value to the recipient for
the accomplishment of a public purpose of support or stimulation
authorized by law. A cooperative agreement presumes a significant
amount of involvement by the Agency in the performance by the
recipient.
(4) Grant. A legal instrument which defines the relationship between the
Government and a recipient for the transfer of money, property,
services or anything of value to the recipient for the accomplishment
of a public purpose of support or stimulation authorized by law. A
grant presumes a limited amount of involvement by the Agency in the
performance by the recipient.
(b) The legal and regulatory framework for implementation of the
acquisition process is set forth in M-1.102.
M-1.102 Legal and Regulatory Framework for Contracting
(a) The Federal Acquisition Regulation (FAR) established (1) a single
regulation for use by all executive agencies in their acquisition of supplies and
services with appropriated funds, and (2) the Federal Acquisition Regulations
System consisting of the FAR and agency acquisition regulations that
implement or supplement the FAR. The FAR System was developed in
accordance with the requirements of the Office of Federal Procurement
Policy Act of 1974, as amended by Public Law 96-83. The FAR was issued
within applicable laws under the joint authorities of the Administrator of
General Services, the Secretary of Defense, and the Administrator for the
National Aeronautics and Space Administration and under the broad policy
guidance of the Administrator for Federal Procurement Policy. The FAR is
codified as Chapter 1 of Title 48 of the Code of Federal Regulations with an
effective date of April 1, 1984.
(b) The Environmental Protection Agency Acquisition Regulation
(EPAAR) implements the FAR where further implementation is needed and
supplements the FAR when coverage is needed for subject matter not covered
in the FAR. The EPAAR is codified as Chapter 15 within Title 48 of the
Federal Acquisition Regulations System. In addition, EPA establishes
acquisition policies and procedures that are disseminated through the EPA
Contracts Management Manual and the Acquisition Handbook. The EPAAR
generally is reserved for those items implementing and supplementing the FAR
and for items of significant general interest which are pertinent to
Government contractual relationships. The Acquisition Handbook generally is
used for subjects of primary interest to acquisition personnel in addition to
those items already contained in the FAR and EPAAR. The Contracts
Management Manual generally is reserved for subjects of particular interest to
Project Officers and management personnel involved in the acquisition process
as well as acquisition personnel. It generally does not address contractual
relationships. Contracting authority is part of the authorities granted in the
legislation which established the Agency.
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(c) The effectiveness of the EPA acquisition system depends on project
and contract personnel working together in a fully coordinated environment.
Each personnel group has an interdependent role in the selection, award, and
administration of contracts, and each must know and understand its respective
roles.
M-1.103 Key Participants in the Process
There are several key players in the contracting process: the Contracting
Officer, the Contract Specialist, the Project Officer and the Competition
Advocate. There are, of course, other members of the team whose
participation may be required, such as the Quality Assurance Officer in
projects involving environmentally related measurements. An understanding
of the roles of these key individuals is crucial.
M-l. 103-1 Contracting Officer
(a) The Contracting Officer (CO) is a person with the authority to enter
into, administer, and/or terminate contracts and make related determinations
and findings. Contracting authority must flow down through the Agency
organization until it reaches the Contracting Officer. Exhibit 1-1 depicts this
flow within EPA. Contracting Officers are appointed in writing on a
"Certificate of Appointment," SF 1402, which states any limitation on the
scope of authority that may be exercised.
(b) Only Contracting Officers can enter into contracts or otherwise
commit the Government to pay for products or services, and then only to the
extent of their actual authority. Therefore, any unauthorized commitment by
a Government employee, or commitment made by a Contracting Officer
beyond the extent of legitimate actual authority, may be declared invalid
despite any apparent authority or position of responsibility. This holds true
despite the "apparent authority" of the Government employee—i.e., an
employee whose position is such that one would believe he or she has the
authority to bind the Government. Actions of individuals in the commercial
sector who have apparent authority usually result in binding their firm, a
concept of agency which does not hold true within the Federal Government.
M-l. 103-2 The Contract Specialist
Some Contracting Officers have several people working for them. Most
of these people will have the title of "contract specialist." They have the
responsibility of assembling the solicitation package, publicizing the
requirements, soliciting and evaluating bids, and negotiating with offerers.
Often, the only difference between a Contracting Officer and a contract
specialist is the authority to enter into a contract. While contract specialists
have authority to process contracts, the CO will have to sign the contract
agreement, having the final determination and responsibility for the
contracting process and performance.
M-l. 103-3 The Project Officer
(a) The Project Officer (PO) is the official in the agency who oversees
on-going programs and organizes resources and personnel for the achievement
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of a program goal. The Assistant, Associate, and Regional Administrators,
General Counsel and the Inspector General are responsible for designating
individuals who have completed the certification program to serve as Project
Officers. The Director, PCMD, appoints these individuals to administer
contracts. The Contracting Officer acts as the representative of the Director,
PCMD, by naming the designated individual as the Project Officer in the terms
and conditions of the contracts.
(b) The Project Officer and staff are expected to do the planning and
program control. The duties involved include:
(1) Establishing program objectives
(2) Developing requirements
(3) Scheduling
(4) Estimating
(5) Budgeting
(6) Developing controls
(7) Developing purchase requests, including specifications and work statements
(8) Developing specific project plans, including financial status
(9) Coordinating project planning with the procurement and contracting office
(10) Evaluation of proposals (technical evaluation and realism of cost proposals)
(11) Participation in the source selection process
(12) Monitoring work progress; identifying delays, determining needed changes,
and suspensions; and providing assistance wherever it is necessary for the
completion and acceptance of the product or service.
M-l. 103-4 Limits on the Authority of the Project Officer (PO)
(a) A certified Project Officer (PO) with less than eighteen (18) months
of experience as a Government PO on Federal contracts is permitted to
perform as a PO only on contracts (including options) with a potential value of
less than $1 million.
(b) A certified PO must have three (3) years of experience to be the PO
on contracts exceeding $5 million.
(c) Project Officers designated to administer contracts do not have the
authority to:
(1) Award, agree to, or execute any contract or contract modification;
(2) Obligate, in any way, the payment of money by the Government;
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(3) Make the final decision on any matter that would be subject to appeal
under the Disputes clause; and
(4) Terminate, for any cause, the contractor's right to proceed.
(d) Limitations on the PO's authority are in accordance with the concept
that contract administration is limited to the monitoring of the contract terms
and to ensuring that the contract is carried out. Contract administration does
not deal with changing agreed terms or halting performance of the contract.
M-l. 103-5 Competition Advocate
(a) The Competition in Contracting Act (Title VH of Public Law 98-369)
requires that heads of executive agencies shall designate a competition
advocate. The responsibilities of the agency competition advocate are, among
others, to:
(1) Be responsible for challenging barriers to and promoting full and open
competition in the acquisition of supplies and services by the agency;
(2) Review the contracting operations of the agency and identify and
report to the agency senior procurement executive -
(i) Opportunities and actions taken to achieve full and open competition
in the contracting operations of the agency; and
(ii) Any condition or action that has the effect of unnecessarily
restricting competition in the contract actions of the agency.
(3) Prepare and submit an annual report to the agency senior
procurement executive, in accordance with agency procedures,
describing -
(i) Such advocate's activities under this subpart;
(ii) New initiatives required to increase competition;
(iii) Any barriers to full and open competition that remain; and
(iv) Other ways in which the agency has emphasized competition in areas
such as acquisition training and research.
(4) Recommend to the senior procurement executive of the agency goals
and plans for increasing competition on a fiscal year basis; and
(5) Recommend to the senior procurement executive of the agency a
system of personal and organizational accountability for competition,
which may include the use of recognition and awards to motivate
program managers, contracting officers and others in authority to
promote competition in acquisition.
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(b) The Competition Advocate is the approving authority for
Justifications for Other Than Full and Open Competition on proposed
contracts with a potential contract value over $100,000 but not exceeding
$1,000,000. The Competitive Advocate is an official in the Policy and Quality
Assurance Branch of the Procurement and Contracts Management Division at
Headquarters.
M-1.104 Ratification
M-l.104-1 Introduction
(a) As previously discussed, only Contracting Officers who are formally
designated as such may obligate the Government for acquisition of personal
property and nonpersonal services (including construction). Periodically,
actions are taken by personnel without formally delegated contracting
authority. When such an action occurs, it does not obligate the Government
for the expenditure of funds. However, under certain circumstances,
unauthorized actions may be ratified. Ratification of an unauthorized action
can only occur when the acquisition would have been valid had the action been
authorized by a formally designated Contracting Officer. If an unauthorized
action is otherwise improper, a Contracting Officer cannot ratify it and the
Agency must deny legal liability, in which case, the person committing the
unauthorized action may be personally liable.
(b) Proposed ratification of unauthorized actions must be approved at
designated management levels. The Chief of the Contracting Office (CCO) is
the ratifying official provided he/she has redelegable contracting authority. In
regional offices or laboratory sites, the Chief of the Contracting Office to
whom the activity reports is the ratifying official, provided that he/she has
redelegable contracting authority. The Head of the Contracting Agency
(HCA) is the ratifying official for actions which arise in regional or laboratory
sites which do not functionally report to a contracting office. The HCA
reviews all ratification actions of $250,000 or more. It should be noted that
unauthorized paid advertisements cannot be ratified.
M-l. 104-2 Procedures
When an unauthorized action has been revealed, the following procedures
apply:
(a) The program office will notify the cognizant contracting office by
memorandum of the circumstances surrounding the action. The memorandum
will include:
(1) All relevant documents and records;
(2) Documentation why the work was necessary to and for the benefit of
the Government;
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(3) A statement of steps taken or proposed to prevent reoccurrence of
the unauthorized action;
(4) Approval of the division director (or equivalent) of the responsible
office;
(5) If expenditure of funds are involved, the notification will also include
a Procurement Request/Order (EPA Form 1900-8) with sufficient
funds to cover the supply or service involved;
(6) If the service or supply was beyond the scope of the existing
contract, the notification will include a justification for
noncompetitive procurement (JNCP).
(b) After receipt of the notification, the Contracting Officer shall:
(1) Make a determination and finding regarding ratification of the
unauthorized act. Additional information may be required from the
contractor and an opinion from the General Counsel.
(2) Inform (at the Contracting Officer's discretion) the Inspector General
through the HCA.
(3) Prepare memorandum from the Assistant Administrator for
Administration and Resources Management to the Assistant,
Associate or Regional Administrator advising of the person
committing the unauthorized action.
(4) Accomplishment of (3) above for actions that would entail small
purchase procedures is at the discretion of the Chief of the
Contracting Office or a Management Division Director or equivalent
at a regional or field activity.
M-1.105 Business Ethics and Conflicts of Interest
M-l.105-1 Introduction
The Code of Federal Regulations (see 40 CFR Chapter 1 Part 3) sets forth
personal behavioral requirements for individuals, whether program managers,
Project Officers, Contracting Officers, contract specialists, or others involved
in the acquisition process. These include business ethics and conflict of
interest matters that must be observed by all Agency personnel. Personal
behavior must be impeccable, and the requirements of EPA, which reflect
those of the Government as a whole, must be thoroughly understood and
observed.
M-l.105-2 Business Ethics
(a) Government business must be conducted in a manner above reproach,
and with complete impartiality. The official conduct of Government personnel
must be such that they would have no reluctance in making a full public
disclosure of their actions. It is important that all EPA personnel observe
proper standards of conduct in the discharge of their official duties, especially
those duties involved in acquisition programs.
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(b) Because of their importance in acquisition programs, you should be
familiar with the following summary of selected standards.
(1) No employee shall receive any salary or compensation for services as
a Federal employee from any source other than the Government of
the United States, except as may be contributed out of the treasury
of a State, county, or municipality.
(2) Employees are not permitted to engage in any outside employment or
other outside activity in conflict with the full and proper discharge of
the duties and responsibilities of their Government employment.
(3) Acceptance of gifts, entertainment, or favors, no matter how
innocently tendered and received, from those who have or seek
business with EPA, may be a source of embarassment to the Agency
and to the employee involved. It may affect the objective judgment
of the recipient and impair public confidence in the integrity of the
business relations between EPA and industry. Therefore, employees
shall not knowingly solicit or accept any gifts, entertainment, or
favors (including complimentary meals and beverages), either directly
or indirectly, from any interested party. For the purpose of this
standard, gifts, entertainment, and favors include any benefits,
gratuities, loans, discounts, tickets, passes, transportation,
accommodations, or hospitality given or extended to or on behalf of
the recipient.
(4) All employees are subject to the basic political activity restrictions
outlined in the Hatch Act. Employees are individually responsible for
refraining from prohibited political activity.
(5) An employee must not use, directly or indirectly, or allow the use of,
Government property of any kind for other than officially approved
activities. An employee has a positive duty to protect and conserve
public property, including equipment, supplies, and other property
entrusted or issued to the employee.
(6) Employees must not directly or indirectly use official information
obtained through the employee's Government employment if the
information has not been made available to the general public.
(7) Employees should pay their financial obligations in a proper and a
timely manner.
(8) Employees are prohibited from endorsing in an official capacity the
proprietary products or processes of manufacturers or the services of
commercial firms for advertising, publicity or sales purposes. Use of
material products or services by the Agency does not constitute
official endorsement.
(9) Credentials and other EPA identification devices are for use only in
establishing identity or authority in connection with official
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business. Such credentials and identification devices, or an
employee's official position, status, or designation, are not to be used
by employees to exert influence or obtain, either directly or
indirectly, privileges or rewards for themselves or others.
(10) An employee shall not engage in criminal, infamous, dishonest,
immoral, notorious, or disgraceful conduct, or other conduct
prejudicial to the Government.
(c) The maintenance of public confidence in EPA employees clearly
demands that each employee take no action which would constitute the use of
official position to advance personal or private interests.
M-l.105-3 Personal Conflicts of Interest
(a) It is most essential and equally important that technical and
contracting personnel observe standards of conduct and avoid conflicts of
interest with suppliers or potential suppliers of the Government, to obviate
any possible inference that the Agency may be compromised to any degree by
an employee's actions.
(b) As in the case of standards of conduct, the matter of conflicts of
interest is thoroughly covered in EPA regulations. A few of the key points
covered in these regulations relating to acquisition matters are:
(1) Employees are not permitted to have a direct or indirect financial
interest that conflicts substantially, or appears to conflict
substantially, with the employee's Government duties and
responsibilities.
(2) Employees are not permitted to engage, directly or indirectly, in a
financial transaction as a result of, or primarily relying on,
information obtained through Government employment which has not
been made available to the general public.
(3) Unless authorized to do so, no employee shall participate as a
Government employee in any matter in which the employee
knowingly has a financial interest.
(4) After Government employment has ceased, no Government employee
may knowingly act as an agent or attorney for anyone other than the
United States in connection with any judicial proceedings or other
matter, involving a specific party or parties, in which the United
States is a party and in which the former employee participated
personally and substantially for the Government through decision,
approval, disapproval, recommendation, rendering of advice, or
investigation.
(5) No employee may represent anyone before a court or Government
agency in a matter in which the United States is a party or has an
interest.
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(c) The published regulations (see 40 CFR Chapter 1 Part 3) on the
conduct of employees detail reporting procedures for income and other special
matters with which all personnel should be familiar. The regulations included
here were selected because of their potential impact on relationships with
organizations or persons that may be involved in doing business under the
acquisition programs of EPA.
M-1.106 The EPA Organization
M-l.106-1 Introduction
Exhibit 1-2 depicts the overall organization of the Agency and sets forth
the various environmental program areas in which EPA is involved.
M-l. 106-2 Organizational Structure for Contracting Operations
The Assistant Administrator for Administration and Resources
Management is responsible for procurement. Within the Office of
Administration and Resources Management is located the Procurement and
Contracts Management Division. That Division (see Exhibit 1-3) is comprised
of five elements: (i) Policy and Quality Assurance Branch; (ii) Contract and
Management Support Branch; (iii) Planning and Cost Advisory Branch;
(iv) Procurement Branch A; and (v) Procurement Branch B.
(a) The Policy and Quality Assurance Branch is responsible for the
establishment of EPA-wide acquisition policy and the review of Agency
contracting practices.
(b) The Contract and Management Support Branch provides management
and control support services to Procurement Branches A and B; handles small
purchases; handles terminations, claims, and appeals under contracts, and
handles contract closeouts.
(c) Procurement Branch A is responsible for procurements for the Office
of Solid Waste and Emergency Response.
(d) Procurement Branch B is responsible for ADP Procurements,
procurements for Office of the Administrator and the Office of
Administration.
(e) The Planning and Cost Advisory Branch performs several functions.
It reviews the reasonableness of offerers' cost proposals; establishes contract
policy regarding the handling of contract costs; negotiates indirect cost rates
with organizations conducting business with EPA; and is responsible for the
Agency's advance planning and Contract Information System.
(f) In addition to the structure of the Procurement and Contracts
Management Division, Exhibit 1-3 sets forth other organizational elements
which provide procurement support. These elements are shown by dotted line
to be reporting to the Director of the Procurement and Contracts Management
Division for policy guidance and review purposes only.
1-9
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Rev. No. 2- 9/30/85
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(g) The Durham Contract Operations is responsible for procurements for
the Office of Research and Development, the Office of Pesticides and Toxic
Substances, the Office of Air Quality Planning and Standards, and the ten
regional offices.
(h) The Cincinnati Contract Operations is responsible for procurements
for the ORD Laboratories in Cincinnati, the Office of Water, and various ORD
field laboratories.
M-1.107 The Acquisition Cycle
M-l. 107-1 Introduction
The acquisition cycle is recognized as having three phases: the
pre-solicitation phase; the solicitation/award phase; and the post-award
administration phase. The first of these phases primarily involves the
development of the Procurement Request; the second involves you in working
with the contracting office in soliciting and awarding the contract; and finally,
in post-award administration you, a representative of the Contracting Officer,
monitor the contract.
M-l. 107-2 Major Activities and Project Officer Responsibility
Exhibits 1-4 and 1-5 sequentially set forth the key activities in the
acquisition cycle by phase. Exhibit 1-4 lays out the major steps in the Cycle
and references chapter coverage within the manual. Exhibit 1-5 delineates
responsibility of the Project and Contracting Officer by activity. In the
columns to the right side of the Exhibit, each activity has been annotated as
either a total responsibility (TR) or participatory activity (PA) of the Project
Officer. Responsibilities of the Contracting Officer have been so indicated in
the "CO Resp." column. The "Text Ref." column contains a paragraph
reference in this manual where additional coverage may be found.
1-10
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Rev. No. 2- 9/30/85
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EXHIBIT 1-1
FLOW OF CONTRACTING AUTHORITY
Legislation
I
Administrator, EPA
I
Assistant Administrator, Office of Administration
and. Resources Management
(Agency Procurement Executive)
I
Director, Office of Administration
I
Director, Procurement and Contracts Management Division
(Head of the Contracting Activity)
I I
I I
Chiefs of the Contracting Officers
Contracting Offices
(Redelegable Procurement Authority)
I
Contracting Officers
1-11
Second Edition
April 1984
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US. ENVIRONMENTAL PROTECTION AGENCY
>JiP
•
H- Q.
oo W
^ Q.
O
STAFF OFFICES
ADMINISTRATIVE LAW MIX
CIVIL RIGHTS
SMALL & DISAOVANTAGEO
BUSINESS UTILIZATION
SCIENCE ADVISORY BOARD
|
ASSISTANT 1
ADMINISTRATOR FOR 1
ADMINISTRATION AND 1
RESOURCES MANAGEMENT |
H OFFICE OF THE 1
COMPTROLLER |
H OFFICE OF 1
ADMINISTRATION J
H OFFICE OF j
INFO RESOURCES I
MANAGEMENT ]
^ OFFICE OF \
ADMINISTRATION 1
CINCINNATI OH J
H OFF ICE OF \
ADMINISTRATION 1
RTP NC 1
1
ASSISTANT
ADMINISTRATOR
ENFORCEMENT /
COMPLIANCE
MONITORING
ASSISTANT
ADMINISTRATOR FOR
WATER
••
••
OFFICE OF WATER
ENFORCEMENT
AND PERMITS
OFFICE OF WATER
REGULATIONS
AND STANDARDS
OFFICE OF WATER
PROGRAM
OPERATIONS
OFFICE OF
DRINKING WATER
1 1
(REGION 1 1 1 REGION II 1
BOSTON | | NEW YORK |
1
REGION III 1
PHILADELPHIA |
4ISTRATOR
DEPUTY
ADMINISTRATOR
1
___ GENERAL
™* COUNSEL
1
ASSISTANT
ADMINISTRATOR FOR
SOLID WASTE AND
EMERGENCY RESPONSE
OFFICE OF
SOLID WASTE
OFFICE OF
- EMERGENCY AND
REMEDIAL RESPONSE
4 OFF ICE OF
WASTE PROGRAMS
ENFORCEMENT
1
1
1 ASSOCIATE ADMINISTRATOR 1
JFOR INTERNATIONAL ACTIVITIES I
1 ASSOCIATE ADMINISTRATOR ]
1 FOR REGIONAL OPERATIONS |
ASSISTANT
ADMINISTRATOR FOR
POLICY. PLANNING
AND EVALUATION
_ OFFICE OF
POLICY ANALYSIS
OFFICE OF
_ STANDARDS
AND REGULATIONS
OFFICE OF
SYSTEMS AND
EVALUATION
1
1 1
ASSISTANT
ADMINISTRATOR FOR
EXTERNAL AFFAIRS
-
i
-
L
ASSISTANT
ADMINISTRATOR FOR
AIR AND RADIATION
^ OFFICE OF AIR
QUALITY PLANNING
AND STANDARDS
^ OFFICE OF
MOBILE SOURCES
^ OFFICE OF
RADIATION
PROGRAMS
1 OFFICE OF INTER-
GOVERNMENTAL
LIAISON
1 OFFICE OF
CONGRESSIONAL
LIAISON
1 OFFICE OF
PUBLIC AFFAIRS
1 OFFICE OF
FEDERAL
ACTIVITIES
INSPECTOR
GENERAL
_ OFFICE OF
AUDIT
OFFICE OF
INVESTIGATIONS
OFFICE OF
MANAGEMENT AND
TECHNICAL
ASSESSMENT
1 1
ASSISTANT
ADMINISTRATOR FOR
PESTICIDES AND
TOXIC SUBSTANCES
•
•
1
REGION IV 1 I REGION V 1 REGION VI
ATLANTA | | CHICAGO | DALLAS
OFFICE OF
PESTICIDE
PROGRAMS
OFFICE OF
TOXIC SUBSTANCES
ASSISTANT
ADMINISTRATOR FOR
RESEARCH AND
DEVELOPMENT
^ OFFICE OF MONITOR-
ING SYSTEMS AND
QUALITY ASSURANCF
1 OFFICE OF
-J ENV. ENGINEERING
1 AND TECHNOLOGY
^ OFFICE OF
ENV PROCESSES ft
EFFECTS RESEARCH
4 OFF ICE OF
HEALTH RESEARCH
EXHIBIT 1-2
1 1 1 1
1 REGION VII 1 1 REGION VIII
KANSAS CITY | | DENVER
1 REGION IX 1
SAN FRANCISCO]
REGION X 1
SEATTLE |
OC1 4 1983
Date
William D Kuckelthaut
-------
EXHIBIT 1-3
ORGANIZATIONAL STRUCTURE FOR PROCUREMENT
Assistant Administrator
For
Administration and
Resources Management
Office of Administration
Director
Procurement fi Contracts
Management Division
Deputy
Director
Policy and
Quality Assurance
Branch
Contract and
Management
Support Branch
Procurement
Branch A
Procurement
Branch B
Planning and
Cost Advisory
Branch
oo
Regional
Offices
Laboratories
Note; Dotted line shows these elements reporting for Policy & Review purposes only.
-------
EXHIBIT 1-4
The Acquisition Cycle
See Chapter
Pre-Solicitation Phase
• Development of the Requirement
• Advance Acquisition Planning
• Individual Acquisition Planning
and Scheduling
• Development of the Procurement
Request/Order
2
2
Solicitation and
Award Phase
Development and Issuance of
the Solicitation IFB/RFP
Evaluation of Bids/Proposals
Negotiations
Source Selection
Award
5
5
5
5
5
Post-Award
Administration Phase
Contract Administration
Termination for Convenience
or Default
Contract Closeout
6/7
7
7
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EXHIBIT 1-5
Major Acquisition Cycle Activities
and
Project Officer Responsibilities
No. Activity
1 Budgeting and Planning:
Pre-Solicitation Phase;
2 Decision to Solicit Proposals
3 Acquisition Planning
4 Establishing the Source
Selection Team
5 Preparing the Procurement
Request/Order
- Support Documentation
- Proposed Budget/In-House
Cost Estimate
- Recommended Project Officer
- Funding
- Justification for Other Than
Full and Open Competition
- Technical Evaluation
Criteria and Weights
- Clearance and Approvals
- Statement of Work
- Delivery Schedule/Period
of Performance
- Reporting Schedules
- Government-Furnished Property
- Determination of QA/QC
Requirements
P.O.
TR* PA*
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
C.O. Text
Resp. Ref.
M-2.102
X M-2.202
X M-2.300
X M-4.101
M-3.102
M-4.103
M-3. 106-12
M-3.106-1
M-3. 106-13
M-3. 106-8
M-3. 106-5
M-3. 106-20
M-3. 106-3
M-4. 104-2
M-3. 106-18
M-3. 106-16
X**
* TR = Total Responsibility of Project Officer
PA = Participatory Activity of the Project Officer
** Subject to the approval of the Quality Assurance Officer
M-3.106-17
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EXHIBIT 1-5 (Continued)
P.O.
TR
Solicitation/Award Phase:
6 Review of the Procurement
Request/Order
7 Determination of Method of
Contracting and Contract Type
8 Synopsis in the Commerce
Business Daily
9 Preparation and Issuance of
the Solicitation
10 Pre-Proposal Conference
11 Receipt of Offers
12 Distribution of Proposals
to Evaluation Panels
13 Evaluation Reports to
Contracting Office
14 Determination of the
Competitive Range
15 Conduct of Written or Oral
Discussions
16 Request, Receipt, and Evaluation
of Revised Proposals
17 Selection of Source
18 Award of Contract
19 Debrief ing of Unsuccessful
Offerers
?A
X
X
X
X
X
C.O.
Resp.
X
X
X
X
X
X
X
X
X
X
X
X
Text
Ref.
M-3. 106-20
M-3.106-19
M-3.106-8
M-3. 106-8
M-3.106-9
M-5.001
M-5.201-2
M-5.501
M-5.501
M-5.502
M -5.6 01
M-5.602
M-5.701
X
X
M-5.702
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EXHIBIT 1-5 (Continued)
P.O. C.O. Text
TR PA Resp. Ref.
Post-Award Administration Phase:
20 Managing Contracts After Award X X M-6.100
21 Monitoring Activities of the Contractor X X M-6.200
22 Contract Termination X X M-7.400
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TABLE OF CONTENTS
CHAPTER 2
Page
M-2.000 ORIGIN OF REQUIREMENTS AND ADVANCE
ACQUISITION PLANNING
M-2.101 Introduction 2-1
M-2.102 Budgeting and Planning 2-1
M-2.102-1 The Budget Year (Outyear Budget) 2-1
M-2.102-2 The Operating Year 2-3
M-2.10 2-3 The Current Year 2-3
M-2.200 THE DECISION TO CONTRACT OUT 2-5
M-2.201 Introduction 2-5
M-2.202 Impact of OMB Circular A-76 2-5
M-2.202-1 Policy 2-5
M-2.202-2 Governmental Functions 2-5
M-2.202-3 Commercial Activity 2-6
M-2.202-4 Government Performance of a Commercial Activity 2-6
M-2.202-5 Inventory of Activities 2-6
M-2.2 02-6 A-76 Acquisition Process 2-7
M-2.202-7 Project Officer Responsibilities 2-8
M-2.300 ADVANCE ACQUISITION PLANNING 2-9
M-2.3 01 Definition and Purpose 2-9
M-2.3 02 Requirements 2-9
M-2.303 Procedures 2-10
M-2.303-1 Preliminary Meetings 2-10
M-2.303-2 Preparation, Submission and Review of 2-11
Contract Plans
M-2.303-3 Quarterly/Monthly Meetings 2-12
M-2.304 Planning Purpose PRs 2-13
M-2.305 Submission Goals and Tracking 2-13
M-2.305-1 Submission Goals 2-13
M-2.305-2 Tracking of Actual Submissions 2-13
M-2.306 Cut-Off Dates 2-13
M-2.306-1 Submission of Procurement Requests 2-13
M-2.306-2 Unobligated Procurements 2-14
M-2.307 Review of Commitments and/or Obligations 2-14
M-2.307-1 Comptroller Review 2-14
M-2.3 07-2 Status of Transactions 2-14
M-2.307-3 End of Fiscal Year Commitment/Obligation Reconciliation 2-15
EXHIBIT
2-1
2-2
Contract Planning Submission (FY ) Annual Plan
Contract Planning Submission (FY ) Quarterly Plan
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CHAPTER M-2.000
ORIGIN OF REQUIREMENTS AND
ADVANCE ACQUISITION PLANNING
M-2.101 Introduction
It may appear that EPA's programmatic needs are determined within the
year that they are met. This is far from an accurate perception. Whether it
be funds for salaries or an appropriation to contract for programmatic needs,
the budget evolves through a long process of scrutiny and analysis.
M-2.102 Budgeting and Planning
Within the course of one year, EPA, along with all other Federal agencies,
is working on its budget for three fiscal years: the current year, one year into
the future (operating year), and two years into the future (budget year).
The Agency starts developing each year's budget almost two years prior
to the fiscal year for which it will be in effect. The following outline
describes one complete budget cycle from initial conceptualization to final
execution. The FY 1986 budget will be used as an example so that chronology
can be followed easily.
M-2.102-1 The Budget Year (Outyear Budget)
(a) During the spring of FY 1984, the Administrator issues the "FY 1986
Budget Guidance" which outlines in broad terms for National Program
Managers (primarily Assistant and Associate Administrators), the priorities,
strategies, and direction in which the Administrator intends EPA's programs to
progress, two fiscal years hence.
(b) Simultaneously or shortly thereafter, the Office of the Comptroller
issues resource targets and technical guidance to the National Program
Managers for the creation of their "FY 1986 Budget Requests." Within the
parameters of the guidance and resource target limitations, these Budget
Requests are a more detailed assessment on the part of the National Program
Managers of what programs will be achieving in two years and what funding
levels they require. Deputy Regional Administrators are consulted in their
area of expertise.
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(c) In addition to the narrative justifications, the Budget Requests
include funding levels for "intramural" costs (the costs of supporting staff such
as salaries, travel, supplies, equipment, and A DP support costs) and
"extramural" costs (acquisition and assistance).
(d) During the summer of FY 1984, the Administrator holds budget
hearings with each of the National Program Managers, querying them on issues
raised in their budget requests. In attendance are the lead Deputy Regional
Administrators, representing the coordinated regional view. As a result of the
hearings and reviews of manager's requests, the Administrator makes final
decisions on the shape and funding levels of the FY 1986 budget.
(e) The Office of the Comptroller coordinates the preparation of the
final FY 1986 Budget Request with the National Program Managers and
transmits it to OMB by September 15. This budget request includes a
justification of resources for various levels of programs, and an "object class"
distribution of the intramural and extramural costs in each program element
(Le., specific amounts for contracts and grants for each program element are
now identifiable).
(f) During October/November of FY 1985, OMB marks the budget request
with comments and gives EPA their "passback." The Agency is usually
permitted 3-5 days to appeal OMB's decisions. The passback and appeal
process may occur once or several times, until both agencies are satisfied with
the results.
(g) During December/January of FY 1985, the Office of the Comptroller,
in conjunction with the National Program Managers, prepares EPA's "FY 1986
President's Budget." It is the same OMB-approved budget, rewritten for
presentation to Congress with additional schedules and special analyses
required by Congressional Appropriation Committees.
(h) The Administrator reveals the EPA portion of the President's Budget
in a press conference in January, at the same time the President sends the
entire FY 1986 budget request to Congress.
(i) During February/March of FY 1985, the Congressional Appropriation
and Authorization Subcommittees hold their budget hearings. The
Administrator testifies before these committees to justify the programs in the
budget request.
(j) During the spring of FY 1985, the regional portion of the President's
Budget, which has been created in aggregate, is distributed throughout the ten
Regions through a process known as "Workload Analysis." The Office of the
Comptroller coordinates this process with the National Program Managers who
define and price out the activities which should occur in each program in each
region. After distribution of workyear and contract resources are negotiated
and finally approved by all regions, the Office of the Comptroller distributes
the "intramural" resources available to the regions in the President's Budget.
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M-2.102-2 The Operating Year
(a) While Congress continues to deliberate on the President's Budget, the
Office of the Comptroller coordinates the preparation of the Agency's FY 1986
Operating Plan. Using the President's Budget for Headquarters Offices and
the Workload Analysis distribution of the President's Budget for the Regions,
the Office of the Comptroller issues resource targets and directions for
preparation of the Operating Plans by regional and headquarters budget offices
in three stages:
(1) Phase I provides for the distribution of the headquarters budgets to
an "allowance holder" level of detail. "Allowance holders" are usually
Office Directors within an Assistant Administrator's Office, who
have the authority to obligate funds. In the Regions, each Regional
Administrator is an Allowance Holder.
(2) Phase II provides all offices the opportunity to propose
"reprogrammings" of resources between programs and object classes
as defined in the President's Budget. Since the Operating Plan is
created almost one full year after initial conceptualization of the
President's Budget, some priorities and resource needs may have
changed. This is the stage during which those adjustments can first
be proposed.
(3) Phase III provides for the distribution of operating plan resources
through the four quarters of the fiscal year; offices develop contract
plans by informing the Contracts Management Division with whom
and when they plan to obligate their contract resources; and, offices
develop plans indicating how they plan to use their ADP resources.
(b) The Office of the Comptroller analyzes the Operation Plans for
pricing accuracy and reprogrammings which may violate the intent of the
Administrator's priorities or Congressional intent.
(c) During the late summer of FY 1985, the President's Budget is
"marked up" by the Appropriations Committees of both Houses of Congress;
after further negotiation, the Committees issue a "Conference Report"—the
result of their compromise on EPA's budget.
(d) By October 1 of each fiscal year, either an Appropriations Bill is
approved by both Houses of Congress and signed by the President, or a
"continuing resolution" is passed which allows EPA to operate and obligate
funds after the first of the fiscal year at a level determined by Congress and
OMB.
M-2.102-3 The Current Year
(a) On October 1 of the new fiscal year, the Office of the Comptroller
issues "Advices of Allowance" to EPA Allowance Holders based on the
Operating Plan (or some other level of funding if under a continuing
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resolution). The Advice of Allowance allows each office to incur obligations
against the amount set in the allowance, usually derived from the operating
plans.
(b) Funds may now be committed and then obligated against the amounts
included in the operating plan and the contract plans.
(c) EPA currently has several appropriations against which contracts
may be charged:
(1) Funds appropriated under the Salaries and Expenses Appropriation
currently last for only one year; funds not obligated during the fiscal
year revert back to the Treasury Department. Contracts typically
charged to this appropriation are administrative in nature, i.e.,
janitorial services, landscaping services, economic consultants.
(2) Funds appropriated under the Abatement, Control and Compliance
Appropriation are available for two years; funds not obligated the
first year are "carried over" into the second year. The Office of the
Comptroller issues "carryover" allowances the second year.
Carryover funds may also be reprogrammed, subject to the same
restrictions as new authority. Contracts funded under this
appropriation are generally program-related, i.e., contracts to
perform laboratory analyses of water or hazardous waste materials,
or contracts to perform environmental impact studies.
(3) Research and Development Appropriation funds are also available for
two years. The Office of Research and Development manages most
of this appropriation and issues a variety of research grants and
contracts under its aegis.
(4) The Superfund Appropriation is a "no-year" appropriation; the funds
are available until obligated and do not lapse back to Treasury. The
majority of the Superfund appropriation is managed by the Office of
Solid Waste and Emergency Response. Contracts are issued for a
variety of purposes, including laboratory analyses, cleanup of
hazardous waste, and construction of containment facilities.
(5) There are a number of other appropriations which are smaller than
those mentioned above, are specified for much narrower purposes,
and are usually managed by a single office.
(d) Allowance Holders may change their Operating Plans only by
submitting change requests to the Office of the Comptroller. When reviewed
and if approved, the Office of the Comptroller issues a revised Advice of
Allowance reflecting the revised Operating Plan.
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M-2.200
THE DECISION TO CONTRACT OUT
M-2.201 Introduction
It is clear that EPA's programmatic needs are set forth considerably in
advance. Whether a need is met through in-house resources or through
contracting is in part dependent upon legislative mandate, availability of
in-house resources, time, and other considerations. One major determining
factor is the Office of Management and Budget Circular A-76.
M-2.202 Impact of OMB Circular A-76
M-2.202-1 Policy
OMB Circular A-76, "Performance of Commercial Activities," states that
it is not the Government's business or intent to be in competition with private
business. Further, it states that if a commercial or industrial activity can be
obtained from the private sector for less than it would cost the Government to
perform the same activity, it should be obtained from the private source. If
the Government can perform the service for less money than industry can,
then the service will be performed "in-house." The policy statements
contained in Circular A-76 do not impact what are considered to be inherently
Governmental functions.
M-2.202-2 Governmental Functions
An inherently Governmental function is one which must be performed
in-house due to a special relationship in executing Governmental
responsibilities. Such Governmental functions can fall into several
categories. The first is the discretionary function of Governmental authority,
including: investigations, prosecutions, and other judicial functions;
management of Governmental programs requiring value judgments; directing
the national defense; management of armed services; conduct of foreign
relations; selection of program priorities; direction of Federal employees;
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regulation of the use of space, oceans, navigational rivers and other natural
resources; direction of intelligence and counter-intelligence operations; and,
regulation of industry and commerce. The second Governmental function is
monetary transactions and enticements, including: Government benefits
programs; tax collection and revenue disbursements as part of the
Government; and, control of the public treasury, accounts, and the
administration of public trust. The August 16, 1983 version of OMB Circular
A-76 exempts research and development (R&D) entirely from the requirements
of the Circular. However, severable commercial activities in support of R&D
are subject to the provisions of the Circular.
M-2.20 2-3 Commercial Activity
A commercial activity is one which can be obtained from a private
commercial source. OMB Circular A-76 also defines a commercial activity as
one which is operated by a Federal executive agency and which provides a
product or service which could be obtained from a commercial source. Some
examples of commercial and industrial type activities are: transportation,
health services, manufacturing, data processing, agriculture and food,
janitorial and security services. A commercial activity is not considered a
Government function. Commercial activities must be separable from other
functions so as to be suitable for performance by contract and be a type of
employment that is regularly needed, not a one-time activity of short duration
associated with support of a particular project.
M-2.202-4 Government Performance of a Commercial Activity
Government performance of a commercial activity is authorized under
any of the following conditions:
(a) No satisfactory commercial source is capable of providing the needed
service or product or use of such a source would cause unacceptable delay or
disruption of an essential program.
(b) Government performance of a commercial activity is required for
national defense reasons in accordance with criteria established by the
Secretary of Defense.
(c) Commercial activities performed at hospitals operated by the
Government if the agency head determines that in-house performance would
be in the best interest of direct patient care.
(d) Government performance of a commercial activity is authorized if a
cost comparison demonstrates that the Government is operating or can
operate an activity on an on-going basis at an estimated lower cost than a
qualified commercial source.
M-2.202-5 Inventory of Activities
(a) EPA is required to ensure that initial reviews of all existing in-house
commercial activities are completed in accordance with the supplement to
OMB Circular A-76.
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(b) No later than March 15 of each year, EPA, along with other Federal
agencies, is required to submit to the Office of Federal Procurement Policy a
report on the implementation of OMB Circular A-76.
M-2.202-6 A-76 Acquisition Process
(a) Part II of OMB Circular A-76 provides information on the preparation
of Statements of Work. It sets forth the steps needed to develop, write, and
administer a performance work statement and a quality assurance plan for
both in-house or contractor operation of a commercial activity. Part II is
particularly helpful in developing Statements of Work for facility maintenance
or operation type activities. Once a Statement of Work has been completed, it
becomes the basis for conducting an in-house cost study by Government
personnel to determine the estimated cost of providing the service required.
The cost study is performed in accordance with the OMB Cost Comparison
Handbook. Part IV of OMB Circular A-76. The Handbook was developed to
ensure that all agencies use a consistent methodology for conducting in-house
cost comparisons. It sets forth definitive guidelines for determining which is
the most economical mode of performance; that is, in-house or contract.
(b) The August 16, 1983 revision of OMB Circular A-76 eliminated the
dollar thresholds and established a full-time equivalent (FTE) threshold for
determining whether cost comparisons are required. Activities of 10 FTEs or
less may be contracted out without a cost comparison study. Activities over
10 FTEs must undergo a cost study unless a waiver is granted.
(c) The contracting process in many cases takes place simultaneously
with the cost study phase. It requires the Statement of Work to become the
foundation for the issuing of solicitations for bids by the Contracting officer
and synopsizing the solicitations.
(d) Solicitations and synopses of solicitations issued to obtain offers for
comparison purposes are required to state that they will not result in a
contract if Government performance is determined to be more advantageous.
(e) In making cost comparisons, in-house personnel prepare an estimate
of the cost of Government performance based on the same work statement and
level of performance as applies to offerers and the total cost of Government
performance is compared to the total cost of contracting with the potentially
successful offerer. Within the OMB A-76 guidelines, the lowest estimate wins,
except that an in-house activity is not to be converted to contract
performance unless the projected cost advantage to the Government is at least
10 percent of the in-house personnel-related cost for the performance period.
(f) If the contractor appears to win, the Government normally conducts
a preaward survey to evaluate the Contractor's ability to perform. A time
period is set aside for review and appeal by the affected parties. Upon
satisfactory completion of the preaward survey, the contract is awarded. If
the Government's cost study proves to be lower, then a series of similar steps
takes place—i.e., a period of time is set aside for review and appeal, followed
by a possible cancellation of the solicitation.
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(g) Each cost comparison should be reviewed by an activity independent
of the activity which prepared the cost analysis to ensure conformance with
the instruction to the supplement to OMB Circular A-76.
M-2.202-7 Project Office Responsibilities
Where the provisions of A-76 are being applied, your responsibilities may
be varied. In addition to the possible participation in the review process (see
M-2.202-5 above), you may participate in: (i) the inventory; (ii) Statement of
Work development; (iii) the quality assurance plan which will be utilized to
ensure acceptable performance by the organization that wins the
contract—i.e., Government or industry, and (iv) the evaluation of the bids or
proposals received in response to the solicitation. If you have prepared or
participated in the development of the Government's cost estimate to perform
the work—i.e., the Government's bid—you cannot be involved in the evaluation
of bids or proposals of commercial organizations.
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M-2.300
ADVANCE ACQUISITION PLANNING
M-2.301 Definition and Purpose
(a) Advance Acquisition Planning is accomplished by using the EPA
Acquisition Planning System.
(b) The Acquisition Planning System has three primary purposes. (1) As
an integral part of the Operating Plan, it is used by program offices to
prioritize contracting needs for the upcoming fiscal year and allocate contract
funds. (2) It is also one of the means by which the contracting offices
(Procurement and Contracts Management Division (PCMD) and the Cincinnati
and RTP Contracts Management Divisions) estimate annual workload and
staffing requirements. The contracting offices also use the plans to identify
potential socioeconomic set-asides and high priority awards. (See Exhibits 2-1
and 2-2 at the end of this chapter.) (3) Finally, it is used to promote and
provide for full and open competition and to ensure that the Government
meets its needs in the most effective, economical and timely manner.
(c) The system places major emphasis on increased interaction/
communication between program offices and contracting offices. The level of
interaction necessary will be dependent upon the volume of contracting
activity anticipated for each program office. While this system applies
primarily to assistant administrator organizations, similar procedures will be
followed for regions, associate administrator organizations, and headquarters
staff offices, as necessary, based on anticipated activity.
M-2.302 Requirements
(a) With the exception of small purchases, or orders under GSA or other
agencies' contracts, acquisition planning must be performed for each contract
procurement transaction (new contract, renewal, or modification) to be
obligated during a fiscal year.
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(b) In addition to (a) above, FAR Subpart 7.1 requires agencies to
establish criteria and thresholds at which increasingly greater detail and more
formal planning is required as acquisitions become more complex and costly.
Within EPA, written individual acquisition plans shall be developed to meet the
requirements of FAR Subpart 7.1 and the EPA Acquisition Planning System for
acquisitions of $5,000,000 or more. Chapter 1 of the Contracts Management
Manual covers the EPA Acquisition Planning System.
M-2.303 Procedures
M-2.303-1 Preliminary Meetings
(a) Preliminary meetings will take place between program office and
PCMD personnel prior to preparing initial acquisition plans in preparation for
the forthcoming fiscal year. Meetings should take place in the July/August
time frame (or as mutually agreed upon by PCMD and the program office),
with the initial plans due in September. PCMD will schedule these meetings
with the planning contact (a senior level planning official) for each Assistant
Administrator and with such other organizations as appropriate. The purpose
of these preliminary meetings will be to discuss the program office's
contracting activity for the upcoming year. The agenda for the first meeting
should include at least the following:
(1) Program office's contracting priorities;
(2) Program office's volume of contracting activity for the upcoming
year;
(3) Unresolved problems between the contract offices and program
office, along with proposed solutions;
(4) Contract resources level assigned to the program office—whether it
is sufficient to process expected workload;
(5) Ways to maximize competitive contract awards and socioeconomic
set-asides;
(6) How to prepare annual and first quarter plans;
(7) How to coordinate the submission and processing of actions to assure
maximum responsiveness and minimum leadtimes; and,
(8) Arrangements for discussions between PCMD and program offices to
discuss on-going contracting activity and problems.
(b) The initial meetings should include the following attendees (if
available): Senior official(s) in charge of planning for the organization and
similar officials from individual offices within the organization as deemed
necessary; the PCMD Director and the PCMD Branch Chief/Section
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Head/contracting officers who will be handling the specific program area
(including representatives from the ADP Procurement Section if the program
office has significant ADP contract dollars); and other PCMD staff as
appropriate. The Contract Management Division offices at RTP and
Cincinnati will participate in the meetings with programs which they service.
Both program office and contract office personnel should come out of these
preliminary meetings with a good understanding of what to expect on the
contract plans and for submissions during the first quarter of the upcoming
fiscal year.
M-2.303-2 Preparation, Submission and Review of Contract Plans
(a) After the preliminary meetings are held, allowance holder
representatives will prepare the initial plans and submit them to their
Assistant Administrator, Regional Administrator, Associate Administrator,
Inspector General, or General Counsel, or executive officer for review and
approval. The plans will then be sent to PCMD (with a courtesy copy to the
Comptroller). PCMD representatives (Planning and Analysis staff plus the
appropriate contracting officers) will acknowledge receipt of the plans, review
them and notify the program office if there are questions. Such questions will
be discussed with the program representative, who will then contact individual
allowance holders for any necessary changes/revisions.
(b) As indicated above, initial plans should be submitted in September for
the upcoming fiscal year (starting October 1). There will be two planning
forms to complete: an annual summary plan and a detailed quarterly plan.
These forms including instructions are attached as Exhibits 2-1 and 2-2. Below
are brief descriptions of each planning form.
(1) Annual Plan - This plan provides a quarter-by-quarter summary of all
planned contract actions and dollars (excluding small purchases) for
the entire year, broken down by transaction category and by
contracting office. In addition, new contract awards must be shown
by dollar ranges. Separate annual plan forms should be prepared for
funded actions, nonfunded actions (planning purpose PRs), and ADP
actions (funded and nonfunded). The sum of these three plans will
represent the entire contracting workload for the program office for
the year. See Exhibit 2-1 attached for more details.
The plan should be prepared and submitted concurrently with the 1st
quarter detailed plan (see (2) below). It should be updated only when
significant changes occur to the program's contract funds leveL For
example, if an allowance holder who originally planned $10 million in
contract actions receives another $2 million in contract funds from
Agency reserves during the 3rd quarter, the annual plan should be
updated to reflect the additional funds. Likewise, if an allowance
holder reprograms funds to significantly impact the planned contract
total, the annual plan should be updated. Any anticipated update to
the annual plan should be discussed by the program office and PCMD
at the quarterly/monthly meetings to assure PCMD's ability to
provide satisfactory service in response to changing requirements.
(See M-2.303-3 Quarterly/Monthly Meetings below.)
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(2) Quarterly Plan - This form provides for detailed data on every
contract action (excluding small purchases) to be submitted to the
contracting offices during the subject fiscal quarter. A separate plan
must be prepared and submitted to PCMD during the month preceding
the next fiscal quarter (the 1st quarter plans should be submitted
with the annual plan in September, the 2nd quarter plan in December,
and so on). See Exhibit 2-2 for specific instructions and data
elements.
Although PCMD prefers that all plans be prepared on the standard
EPA planning forms, alternate forms using a different format are
acceptable, provided that all of the required data elements are shown.
M-2.303-3 Quarterly/Monthly Meetings
(a) Once the initial plans are submitted and agreed upon, PCMD and the
program offices should decide where, when and how often they will meet to
discuss contracting activity and who will attend. At the very least, quarterly
meetings should be held to discuss the upcoming quarterly plan and any
problems either party is experiencing. The agenda for these meetings should
include discussions on:
(1) Upcoming actions to be submitted and submission goals;
(2) Problems with actions in-process;
(3) Identifying delays/slippages in submissions of planned actions;
(4) New workload which would cause an adjustment to the annual plan;
(5) The present actual level of submissions;
(6) Preparation of the next quarterly plan; and,
(7) Other items of concern to the program or contracting personnel.
(b) PCMD and the designated planning contact for each Assistant
Administrator will be jointly responsible for scheduling these
quarterly/monthly meetings. PCMD will hold joint meetings with other
organizations as needed based on their expected contracting volume. In cases
where the program office and the contracting staff are in different locations
(for example, the Assitant Administrator office for the Office of Research and
Development is in Washington, but the contracting activity is handled by the
RTP and Cincinnati contracting offices), the meetings will probably only take
place once a quarter. The RTP and Cincinnati contracting officers will be
able to meet the local individual lab representative/project officers on a
monthly basis (if not more frequently).
(c) In other cases, the meetings should be held at least quarterly, while
the staff members who use the plans on a day-to-day basis should meet
monthly or as often as necessary. The frequency of these meetings will
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depend upon the contracting activity level and availability of the involved
parties, and will be a mutually reached decision. Regular and frequent
communication and interaction is necessary to the success of the planning
process.
M-2.304 Planning Purpose PRs
Non-funded actions (Planning Purpose Procurement Requests - PPPRs)
should be shown on both the annual and quarterly planning forms. A separate
annual planning form summary should be completed for PPPRs, based on the
quarters in which the actions will be submitted. Details on the actions should
be shown on the quarterly planning form. Program offices should include only
those non-funded requirements for which they are highly certain that funding
will be provided. Actions where funding is less certain should not be planned
or submitted.
M-2.305 Submission Goals and Tracking
M-2.305-1 Submission Goals
PCMD will analyze the mix of planned actions reflected on the annual
plan (see Exhibit 2-1) for each program office and agree on submission goals
for each fiscal quarter. The objective will be to provide an even contracting
workload throughout the fiscal year. This may result in different percentage
goals for each program office (or even each allowance holder), which will be
based on the program office/allowance holder's individual plan and the PCMD
staff's workload. The individual goal levels will be negotiated between the
planning contact and the PCMD at one of the meetings held after the initial
plans have been submitted and reviewed.
M-2.305-2 Tracking of Actual Submissions
Actual submissions will be tracked on the Contracts Information System
(CIS). The actual submission level data, will be discussed at the
monthly/quarterly meetings following the end of each fiscal quarter. Program
offices will be able to obtain this information from PCMD on request.
M-2.306 Cut-Off Dates
PCMD establishes deadline dates for submission of specific classes of
actions that must be awarded before year end. These dates take into account
the leadtime PCMD will need to award actions by September 30. Cut-off
dates apply to all actions and all program offices, and should not be confused
with submission goals (see M-2.305-1 above), which may vary by program
office.
M-2.306-1 Submission of Procurement Requests
(a) The cut-off date for receipt of procurement requests (EPA Form
1900-8) (see Chapter 4) by the contracting offices for obligation before the
end of the fiscal year are as follows:
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Type of Procurement Cut-Off Date
(1) All contracts except extensions April 30
as noted below
(2) Extension of existing service June 30
contracts which expire on September 30
Note; Cut-off dates for small purchases transactions (procurements
under $25,000) or delivery orders under GSA Federal Supply Schedule is
September 1, except for renewal of leases or maintenance agreements on
equipment for which the cut-off date is June 30.
(b) Contracting offices make every effort to complete obligation of all
procurements received by the cut-off date before the end of the fiscal year.
However, PCMD cannot guarantee that those actions received by the cut-off
dates will be obligated by year-end. Processing times depend on the
contractor, program office, audit office, as well as on contracting office
action.
M-2.306-2 Unobligated Procurements
Unobligated procurements that were received by the cut-off date are
given first priority for obligation in the ensuing fiscal year under the following
conditions:
(a) Transactions have been properly recorded as commitments in the
Financial Management System year-end report;
(b) Documents are properly executed procurement requests received by a
contracting office; and,
(c) The Office of the Comptroller has recertified funds availability and
issued allowances.
M-2.307 Review of Commitments and/or Obligations
M-2.307-1 Comptroller Review
Using information supplied from the Financial Management System (FMS)
and the Contract Information System, the Office of the Comptroller reviews
the current commitments/obligations for contracts as of April 30 of each
fiscal year. The comptroller's office determines, for the Responsible Planning
and Implementation Officer (RPIO), the uncommitted/unobligated balances
which are available. The Office of the Comptroller completes its review
during May, or as soon as possible thereafter.
M-2.307-2 Status of Transactions
RPIOs determine that commitments reflected in the Financial
Management System are accurate and that the contracting offices have the
necessary documents to process. Monthly Contract Information System
reports are provided to show the status of all transactions.
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M-2.307-3 End of Fiscal Year Commitment/Obligation Reconciliation
(a) As a final step in the contract planning process, the Financial
Management Division provides Allowance Holders with special reports listing
all committed items received by September 30 in finance offices for entry into
the FMS. PCMD provides allowance holders with a status report on
unobligated procurements received for processing during the fiscal year.
(b) The allowance holder must compare these reports to his/her own
records identifying all contracts which were committed as of September 30.
Any missing items or corrections must be transmitted to the appropriate
Accounting Operations Office within five (5) work days of receipt of the
special report. In addition, the RPIO sends an updated commitment listing to
the Financial Management Division, Financial Reports and Analysis Branch.
(c) The Financial Management Division compares the RPIO listing with
its own commitment listing, and in conjunction with the Responsible Planning
and Implementation Officers, prepares a consolidated listing of all outstanding
commitments which it certifies for carryover to the Office of Comptroller.
The Office of the Comptroller reviews the commitment listing with the RPIO,
prepares a consolidated listing of the status of all outstanding actions of each
RPIO, negotiates reductions in commitments if insufficient funds are available
to the RPIOs, and issues carryover Advices of Allowance.
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um.» iimum cuiiipiaimu luim.
CONTRACT PLANNING SUBMISSION (FY ) ANNUAL PLAN
PREPARED BY
APPROVED BY (AA ordtltgnet)
TRANSACTION CATEGORY
NEW AWARDS
S10K - $SOOK
C50O.OO1 - $1 M
(1.000.001 >
inciamanial Funding/
Exarclu ol Option Action!
Other Contract Modification!
TOTAL
ALLOCATION BY CONTRACTING
LOCATION
Hoadquartart
HTP
Cincinnati
Rogloni
TELEPHONE NUMBER
REVIEWED BY (PACMD)
3ATE
ACTIONS ARE: fCliccft ont )
CH Funded ONonlundod QAOP Funded CD A DP Nonlundod
ACTIONS BY FISCAL QUARTER OF SUBMISSION
1
NO OF
AC-
TIONS
DOLLAR
AMOUNT
10001
2
NO. OF
AC-
TIONS
DOLLAR
AMOUNT
lOOOt
3
NO. OF
AC-
TIONS
DOLLAR
AMOUNT
(000)
A
NO. OF
AC-
TIONS
DOLLAR
AMOUNT
tooot
TOTAL
NO. OF
AC-
TIONS
DOLLAR
AMOUNT
(000;
n
x
x
53
to
-------
INSTRUCTIONS - ANNUAL PLAN
GENERAL: Please fill in the fiscal year at the top of the form. A separate Annual
Plan form should be completed for —
1) All Funded Actions — contract actions to be submitted to the Procurement
and Contracts Management Division (P&CMD) with funds. DCNs. and
ACCOUNT numbers that can be obligated (excluding ADP actions).
2) Non-Funded Actions - (Planning Purpose PRs) to be submitted to P&CMD
before accounting data/funds are available (excluding ADP actions),
3) ADP Funded Actions, and
4) ADP Non-Funded Actions.
Small purchases should be excluded from the plans.
Please include only those Non-Funded (Planning Purpose PR) Actions for which
there is a high certainty of eventually providing funds to be obligated. If a planning
purpose PR is to be submitted in the 1st quarter, to receive funding in the 3d quar-
ter, the action should be included in both the annual Funded plan (as a 3d quarter
to
i—•
09
action) and the annual Non-Funded plan (in the 1st quarter). Planning purpose PRs
submitted in the prior year, which are being funded in the current year, should be
included under the quarter in which funding will be provided.
Each procurement action should be counted separately on the summary. One PH
could result in multiple actions throughout the year. If so. please estimate the
number of anticipated actions and count each one separately in the appropriate
fiscal quarter. The dollars to ba shown should represent the estimate to be obligated
under the specific action.
TYPES OF ACTIONS: Summarize the quarterly totals of actions and dollars by
New Awards (by S ranges, based on the estimated obligation for the solicitation).
Incremental Funding/Opt an Actions (on which the contract has already been
awarded), and other contract modifications If a new contract action will be sub-
mitted for award early in the year, and funding/mods on the same contract will be
submitted later in the year, only include the initial RFP under New Awards. The
additional funding/mods should be shown in the Incremental Funding/Option
Actions or Other Contract Modifications, as appropriate.
BY CONTRACT LOCATION: Summarize quarterly totals by the contracting
office/location which will be processing and awarding the action.
EPA Form 2410 9A (6-831 HSVMM
-------
instruc110n> on pack Polote coinpiaung inn l
CONTRACT PLANNING SUdlvllSSION (FY ) QUARTERLY PLAN
PREPARED BY JTELEPHONE NUMBER
APPROVED BY tAA ordttiincel
ID Numpar
Tltio/Deicripilon
ALLOWANCE HOLDER NO
Project Officer/
Telephone Number
Quarter
Di Dz Da Da
Date I
ORGANIZATION 1
i
REVIEWED BY (P&CMDt \
UQOUJ
r-C
-------
INSTRUCTIONS - QUARTERLY PLAN
to
GENERAL: Please fill in the Fiscal Year and check the Quarter of the plan at the
lop of the form. To the extent possible, please group all actions by the contracting
office that will process them. For example, list all Washington (HOQ) actions first,
followed by RTF actions. Cincinnati actions, and Regional actions, with approp-
nate identification for the contracting office.
This plan should include all contract actions to be submitted to P&CMO during the
subject quarter, whether funding is provided or not (see Funding Status code
instructions below).
ID NUMBER: Provide a unique sequential number format using up to eight charac-
ters ID numbers must be shown on PRs submitted, and should be traceable back to
the plan
TITLE/DESCRIPTION: Provide a concise descriptive title unique to this procure-
ment action Pleose specify if this is an AOP action.
PROJECT OFFICER/TELEPHONE NUMBER: 'Give the EPA project officer for
ihis action, along with Kis or her telephone number.
TRANSACTION CODE: Describe the type of transaction, using one of the follow-
ing codes
C New Competitive Contract
S New Sole Source Contract
B Basic Ordering* Agreement
MA Modification — added work scope
MO Modification — exercise of an option
Ml Modification - incremental funding action
O Some other class of action — identify in Project Description column
FUNDING STATUS CODE: Used to identify a Funded (F) or a Planning Purpose
(P) PR and year of expected obligalion.
Examples —
P/84 = Planning Purpose PR for obligation in FY84
F/83 = Funded action for obligation in FY83
CONTRACT NUMBER: Only fill out if known - for mod*, options, funding
actions.
SET-ASIDE STATUS: Used to identify -
S = Small business award
SS = Small business set-aside
8 » 8(A) award
POTENTIAL CONTRACT VALUE: Show estimated potential contract value of
this procurement. If transaction is a modification, show the estimated increase in
contract value (only for transactions where additional work is being added). This
amount may include money to be obligated over several years if the action will
result in award of a new contract.
MULTIFUNDED: Show if other allowance holder(s) are providing funding on this
action; if so. list other allowance holder numbers in the Title/Description column.
ESTIMATED DOLLAR AMOUNT: Expected amount of the obligation to be made
for this transaction (RFP). If this transaction represents the initial award of anew
contract, this column should only show the initial RFP's anticipated obligation.
The potential value of the entire contract should be shown under Potential Con-
tract Value (see above).
EPA Foim 2410-SB (6-B3I Havana
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TABLE OF CONTENTS
CHAPTER 3
Page
M-3.000
M-3.101
M-3.102
M-3.103
M-3.104
M-3.105
M-3.106
M-3.106-1
M-3.106-2
M-3.106-2(a)
M-3.106-2(b)
M-3.106-2(c)
M-3.106-3
M-3.106-3(a)
M-3.106-3(b)
M-3.106-3(c)
M-3.106-3 (d)
M-3.106-3(e)
M-3.106-3(f)
M-3.106-4
M-3.106-4(a)
M-3.106-4(b)
M-3.106-4(c)
M-3.106-4(d)
M-3.106-4(e)
M-3.106-4(f)
M-3.106-4(g)
M-3.106-4(h)
M-3.106-4(1)
M-3.106-5
M-3.106-5(a)
M-3.106-5(b)
M-3.106-5(c)
M-3.106-5(d)
M-3.106-5(e)
M-3.106-5(f)
M-3.106-6
M-3.106-7
M-3.106-8
M-3.106-8(a)
M-3.106-8(b)
M-3.106-8(c)
INDIVIDUAL ACQUISITION PLANNING AND SCHEDULING
Introduction 3-1
Definition 3-1
Sequences of Advance and Individual Acquisition
Planning and Scheduling 3-2
Policy for Individual Acquisition Planning and Scheduling 3-2
Procedure for Individual Acquisition Planning 3-2
Acquisition Planning Considerations 3-3
Project Officer Qualifications 3-3
Conflicts of Interest: Personal/Organizational 3-3
Requirements 3-3
Organizational Conflicts of Interest (OCI) Defined 3-3
Personal Conflicts of Interest 3-5
Statement of Work (Specification) 3-6
Definition of Specification 3-6
Classification of Specifications 3-6
How the Requirement May Be Expressed 3-7
Considerations in Determining How to 3-7
Delineate the Requirement
Guidance on Preparation of the Statement of Work 3-8
Writing Specifications for Commercial Products 3-10
Contract Types 3-11
Firm-Fixed-Price Contract 3-11
Cost-Reimbursement Type Contract 3-12
Cost-Plus-Fixed-Fee Contract 3-12
Cost-Plus-Award-Fee Contract 3-14
Time and Materials Contract 3-15
Labor-Hour Contract 3-16
Indefinite Delivery Type Contract 3-16
Indefinite Quantity Contract 3-17
Matrix of Contract Types 3-18
Technical Evaluation Criteria 3-18
Purpose and Basic Requirements 3-18
Types of Evaluation Criteria 3-18
What Is To Be Evaluated 3-19
Developing and Weighting Evaluation Criteria 3-19
Relationship of Price/Cost to Technical 3-20
Evaluation Criteria
Sample Evaluation Criteria 3-20
Technical Proposal Instructions (TPIs) 3-21
Classified Information 3-21
Source Considerations 3-22
Availability of Work Resulting from Other Sources 3-22
Small Business Set-Asides 3-22
Socially and Economically Disadvantaged Business 3-23
Enterprise Program—8(a) Contracts
Second Edition-4/84
Rev. No. 2- 9/30/85
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TABLE OF CONTENTS (Continued)
CHAPTER 3 (Continued)
M-3.106-8(d)
M-3.106-8(e)
M-3.106-8(f)
M-3.106-8(g)
M-3.106-9
M-3.106-10
M-3.106-11
M-3.106-12
M-3.106-13
M-3.106-13(a)
M-3.106-13(b)
M-3.106-13(c)
M-3.106-13(d)
M-3.106-13(e)
M-3.106-14
M-3.106-15
M-3.106-16
M-3.106-16(a)
M-3.106-16(b)
M-3.106-16(c)
M-3.106-16(d)
M-3.106-16(e)
M-3.106-16(f)
M-3.106-16(g)
M-3.106-16(h)
M-3.106-160)
M-3.106-16(j)
M-3.106-16(k)
M-3.106-16(1)
M-3.106-16(m)
M-3.106-17
M-3.106-17(a)
M-3.106-17(b)
M-3.106-17(c)
M-3.106-18
M-3.106-18(a)
M-3.106-18(b)
M-3.106-18(c)
M-3.106-18(d)
M-3.106-19
M-3.106-19(a)
M-3.106-19(b)
M-3.106-19(c)
Labor Surplus Area Set-Asides 3-25
Sources-Sought Synopsis 3-25
Justifications for Other Than Full 3-27
and Open Competition (JOFOC)
Unsolicited Proposals 3-31.1
Pre-Proposal Conferences 3-31.2
Site Visits 3-32
Reference Materials 3-32
Cost Estimate 3-32
Funding 3-33
Basic Concept 3-33
Cost-Reimbursement Term Form Contract (Level 3-33
of Effort)
Availability of Funds 3-37
Commitments 3-38
Funding Cost-Type Contracts 3-38
Planning Purpose PRs (Unfunded Procurement Requests) 3-39
Options 3-39
Government Property 3-40
Introduction 3-40
Definitions 3-40
Property To Be Furnished and/or Acquired 3-42
Before Contract Award
Considerations for Purchase Versus 3-43
Rent/Lease Determinations
Required Sources of Supplies and Services 3-43
Acquisition of Excess Property 3-44
Procedure 3-45
Content of Needs Justification 3-45
Vesting Title to Educational Institutions 3-46
Joint Use of Property by Contractor and EPA 3-46
Use of Property Purchased with Funds of 3-47
Another Agency
Contractor Use of Government Vehicles 3-47
Contractor Use of GSA Self-Service Stores and Depots 3-47
Quality Assurance 3-47
Quality Assurance Program Plans 3-47.1
Quality Assurance Project Plans 3-47.1
Pre-Award Audits 3-47.2
Reports 3-48
Introduction 3-48
Types of Reports 3-48
Considerations in Use of Reports 3-48.1
Specifying Reports 3-49
Acquisition of Non-Severable Facilities 3-49
Definition 3-49
Background 3-49
Types of Improvements 3-49
Second Edition-4/84
Rev. No. 2- 9/30/85
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TABLE OF CONTENTS (Continued)
CHAPTER 3 (Continued)
M-3.106-19(d)
M-3.106-19(e)
M-3.106-19(f)
M-3.106-20
M-3.106-20(a)
M-3.106-20(b)
M-3.106-20(c)
M-3.106-20(d)
M-3.106-20(e)
M-3.106-20(f)
M-3.106-20(g)
M-3.106-20(h)
M-3.106-20(0
M-3.106-20(j)
M-3.106-20(k)
M-3.106-20(1)
M-3.106-21
M-3.106-2 l(a)
M-3.106-2 Kb)
M-3.106-2 l(c)
M-3.106-21(d)
M-3.106—21(e)
M-3.106-21(0
M-3.106-22
M-3.107
M-3.108
M-3.108-1
M-3.108-2
M-3.108-3
Policy 3-49
Determinations and Findings (D&F)/Approval 3-50
Requirements
Project Officer Informational Input to D
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CHAPTER M-3.000
INDIVIDUAL ACQUISITION PLANNING
AND SCHEDULING
M-3.101 Introduction
Chapter 2 of this manual sets out the process by which an Agency need is
identified, budgeted, method of acquisition determined, and how the advance
procurement planning process takes place at the beginning of each fiscal year.
This Chapter delves into the process of individual acquisition planning and
scheduling.
M-3.102 Definition
(a) Advance acquisition planning, also called contract planning, is the
formal function of establishing a plan that schedules certain types of
anticipated contractual expenditures during a fiscal year. It is an activity that
takes place before the beginning of a fiscal year and involves allowance
holders, the Office of the Comptroller, and the Procurement and Contracts
Management Division. The primary purpose of advance acquisition planning is
to enable PCMD to establish a plan for meeting the demands for its services.
(b) Individual acquisition planning and scheduling is a two-step function.
The first step, individual acquisition planning, takes place prior to the
development of the Procurement Request (PR) (see Chapter 4) and is an
activity that involves the initiator of the requirement (usually later appointed
as the Project Officer) and the Contracting Officer. During this activity, the
Project and Contracting Officers discuss all of the Project Officer's duties and
responsibilities related to the new requirement. After this meeting, the
Project Officer will, with the assistance of the Contracting Officer as needed,
develop the PR package, taking into account these discussions.
The second step of this function is individual procurement scheduling.
Again, both the initiator and Contracting Officer are involved. In this step the
parties agree to specific milestone dates for activities that take place after
receipt of the procurement request package in the procurement office.
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M-3.103 Sequence of Advance and Individual Acquisition Planning and
Scheduling
Exhibit 3-1 sets forth the sequencing of these activities, participants, and
reference to manual coverage.
M-3.104 Policy for Individual Acquisition Planning and Scheduling
(a) Individual acquisition planning should take place for all procurements
in excess of $25,000 (including money bearing change orders and modifications)
with the exception of orders to be placed under GSA requirements or schedule
contracts and contracts with other agencies. Exhibit 3-2 contains a suggested
individual acquisition planning form. In addition, the form contains references
to paragraphs within the Handbook where information may be obtained on the
subjects set forth on the form.
(b) In planning an individual acquisition, the Project Officer should take
into account Government policy that acquisition planners specify needs,
develop specifications and solicit offers in such a manner to promote and
provide for full and open competition with due regard to the nature of the
supplies and services to be acquired and to ensure that no contract is entered
into without full and open competition on the basis of lack of acquisition
planning.
M-3.105 Procedure for Individual Acquisition Planning
(a) The Project Officer's knowledge of his/her responsibilities in the
pre-solicitation phase of the acquisition cycle and the level of expertise with
which duties are performed impact heavily on the acquisition. It is at this
stage that the quality and timeliness of the acquisition is determined. A poor
Statement of Work, inadequate reporting requirements, or missing approvals
will individually cause the Contracting Officer to reject the Purchase Request,
thus extending the acquisition lead time. Consequently, it is imperative that
the Project and Contracting Officers meet at the time the Project Officer
commences the development of the requirement.
(b) Prior to development of any aspect of the Procurement
Request/Order (EPA Form 1900-8), the Project Officer must consider all the
items contained in Exhibit 3-2. As an aid, this Exhibit contains responses to
those parts of this Chapter that must, as applicable, be considered prior to the
actual development of a Procurement Request (see Chapter 4). Subsequent to
a review of these considerations, a meeting should be established with the
Contracting Officer or designee to cover the Project Officer's plan for
development of the requirement and to ensure all required steps are
understood and will be taken.
NOTE: The contents of Exhibit 3-2 and this chapter expand upon the EPA
"Procurement Request Rationale Checklist." Exhibit 3-2 contains more than
the checklist requires and will result in the complete assembly of all
information needed to prepare the PR and supporting rationale. See Chapter 4
for guidance on the execution of the PR—EPA Form 1900-8.
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M-3.106 Acquisition Planning Considerations
Each of the following topics must be considered and discussed with the
Contracting Officer in planning the development of the requirement. Topics
sequentially follow the considerations listed under "Planning Considerations" in
Exhibit 3-2.
M-3.106-1 Project Officer Qualifications
A Project Officer must be identified who is qualified to serve as a Project
Officer on the contract. Preferably it should be an individual who has previous
experience as a Federal Government Project Officer and has been certified
under the Project Officer certification program.
M-3.106-2 Conflicts of Interest; Personal/Organizational
M-3.106-2(a) Requirements
In planning the acquisition, consideration should be given to the following
potential conflicts of interest:
(1) The Project Officer should explore the possibility that an
organizational conflict of interest problem could exist.
(2) For individual conflicts of interest, the Project Officer should
identify any regular and special EPA employees (i.e., those
appointed to serve not more than 130 days in a 365-day period) who
are or are planned to be involved in: establishing the need for the
proposed contract; preparing the Statement of Work; preparing the
evaluation criteria; participating in the proposal evaluation
process; or otherwise participating in the Agency's management of
the contract. This list of personnel should be brought to the
attention of the Contracting Officer.
M-3.106-2(b) Organizational Conflicts of Interest (OCI) Defined
(1) Organizational conflict of interest exists when the nature of the work
to be performed under a proposed Government contract and a
prospective contractor's organizational, financial, contractual, or
other interests (including the interests of its chief executives,
directors, consultants, or subcontractors) are such that:
(i) award of the contract may result in an unfair competitive
advantage; or
(ii) the contractor's objectivity in performing the contract work
may be impaired.
(2) The determination as to whether an organizational conflict of
interest exists should be made through the exercise of common sense
and good business judgment. The Contracting Officer is responsible
for identifying OCI early in the acquisition process and taking
appropriate steps to avoid, neutralize, or mitigate it.
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In doing so, the CO is expected to seek the advice of legal counsel, as
well as technical assistance, from appropriate program specialists in
the application of the general rules set forth below. If the CO
initially decides that a particular acquisition involves a significant
OCI, the CO must, prior to issuing the solicitation, submit a written
analysis, a draft solicitation provision, and, where appropriate, a
proposed contract clause to the HCA for review and approval.
General rules to be applied in determining actual or potential
existence of OCI are as follows:
(0 A contractor that provides systems engineering and technical
direction for a system, but does not have overall contractual
responsibility for its development, integration, assembly, or
production, shall not be awarded a contract to supply the
system or any of its major components or be a subcontractor
or consultant to a supplier of the system or any of its major
components.
(id If a contractor prepares and furnishes complete specifications
covering nondevelopmental items for use in a competitive
procurement, that contractor shall not be allowed to furnish
these items either as a prime contractor or a subcontractor
for a reasonable period of time, including, at least, the
duration of the contract containing the furnished
specification. This rule does not apply to:
— Contractors that furnish at Government request
specifications or data regarding a product they regularly
provide, even though the specifications or data may have
been paid for separately or in the price of the product; or
— Situations in which contractors, acting as industry
representatives, help the Government prepare, refine, or
coordinate specifications, regardless of source, provided
this assistance is supervised and controlled by Government
representatives.
(iii) If a contractor prepares or assists in preparing a work
statement to be used in competitively acquiring services or a
system, or if the contractor provides material leading directly,
predictably, and without delay to such a work statement, then
that contractor shall not supply the services, system, or major
components of the system unless:
— The contractor is the sole source; or
— More than one contractor has been significantly involved in
preparing the work statement.
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(iv) Contracts involving technical evaluations of other contractors'
products or consulting services shall not be awarded to a
contractor that would evaluate or advise the Government
concerning its own products or activities, those of a
competitor, or those of other organizations in which it has a
substantial interest.
(v) A contractor that gains access to confidential business
information of other companies in performing advisory
services for the Agency must protect the information from
unauthorized use or disclosure, must refrain from using the
information for any purpose other than that for which it was
furnished, and must otherwise comply with the special
requirements of 40 CFR Part 2 and the provisions of its
contract relating to the treatment of confidential business
information. This rule does not apply to information available
to the Government or the contractor from other sources
without restriction.
M-3.106-2(c) Personal Conflicts of Interest
(1) All employees are subject to two types of requirements in connection
with apparent or actual conflicts of financial interests. One is a
criminal statute, 18 U.S.C. 208, which prohibits participation by any
employee in official activities where he or she has a conflicting
personal financial interest. The other requirement is of an
administrative nature that has been established by the Administrator.
(2) The statutes generally referred to as "conflict of interest" statutes
apply to all regular Government employees (defined as those who are
appointed or employed to serve more than 130 days in 365). They
provide that such an employee may not:
(i) Except in the discharge of official duties represent anyone
else before a Court or Government agency in a matter in
which the United States is a party or has an interest. This
prohibition applies both to paid and unpaid representation of
another.
(ii) Participate in his or her governmental capacity in any matter
in which a spouse, minor child, outside business associate, or
person with whom he or she is negotiating for employment, has
a financial interest.
(iii) Receive any salary or supplementation of his Government
salary from a private source as compensation of services to
the Government.
(3) Failure to comply with these laws is punishable by fine or
imprisonment or both.
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M-3.106-3 Statement of Work (Specification)
M-3.106-3(a) Definition of Specification
(1) The Federal Acquisition Regulation (FAR) defines a specification as
"the technical requirements for a material, product, or service that
includes the criteria for determining whether these requirements
have been met."
(2) FAR Part 10 sets forth policy with respect to specifications on
Federal purchases. It stipulates that with certain exceptions, use of
specifications and standards listed in the Index of Federal
Specifications and Standards is mandatory.
(3) The regulations recognize that a standing specification can not be
established, nor would it be appropriate to establish such a
specification for all conceivable requirements. Consequently, the
regulations provide an Agency the right to develop its own
specifications given the lack of an existing Federal specification.
The requirement being expressed may be called various names—i.e.
specification, Statement of Work (SOW), work statement, etc. The
terms are used virtually interchangeably. If any differentiation is to
be made, one could say that a specification generally refers to a
tangible item whereas a Statement of Work describes (is the
specification for) a service. The information in this Chapter
referring to a Statement of Work is equally applicable to a
"specification."
M-3.106-3(b) Classification of Specifications
(1) Specifications may be divided into two distinct classifications:
performance/functional and design. It is possible that a given
specification may contain elements of both of these classifications.
(i) A performance (sometimes referred to as a functional)
specification is one that tells the contractor "what" the
Government wants but not "how" to do the work. When a
performance specification is used, the contractor will be
required to either perform a service or construct an item that
meets a specified level of performance. An example of a
performance specification would be to provide services to study
and report on the mineral content of rain water that fell during
the month of May in Washington, D.C. A hardware example
would be a requirement to build a heavier than air flying
machine. Successful completion of the work in the first
example would be judged on whether the report substantiated
the quality of work required to be performed. In the case of
the aircraft, success or failure would hinge on whether it flew
and was heavier than air. In both cases, the "how" of
performance is left to the contractor's discretion. In a
performance/functional specification, the Government allows
the contractor to use its creative and innovative skills to their
maximum.
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(ii) A design specification tells the contractor both "what" the
Government wants and "how" to do it. Thus in the rain water
study in (b) above the Government would, if it chose to express
the requirement from a design standpoint, have told the
contractor where to take the samples, how many, the protocol
used to evaluate them, etc.
(2) Most Statements of Work contain elements of both classifications.
However, in drafting a specification one must be careful to ensure
that the design elements do not conflict with the performance
requirements.
M-3.106-3(c) How the Requirement May Be Expressed
(1) One may express a Statement of Work in one of two forms—i.e. term
or completion. They are two separate methods of expression and
both may include the incorporation of design or performance
specifications.
(2) A term form expresses the requirement from the standpoint of a
level-of-effort during a period of time. For example, a requirement
to provide two senior analysts, one hydrologist, etc. during the month
of May for purposes of studying rain water would reflect a term form
requirement. This form focuses in on the expenditure of effort by
given types of labor for a period of time with no requirement that a
"job" be completed.
(3) A completion form is one that describes the requirement from the
standpoint of the contractor taking on the job and providing the
completed product/service that has been described. Using the rain
water study as an example, the contractor would be given a SOW
(either performance or design in nature) that would require the
performance of all work needed to provide the Government with the
needed study.
M-3.106-3(d) Considerations in Determining How to Delineate the
Requirement
(1) Whether you develop the Statement of Work on a design or
performance basis and express the requirement from a term or
completion viewpoint is dependent upon such factors as: knowledge
of the field of expertise; understanding the Government's need; the
nature of the requirement; contemplated contract type; and interest
in providing the contractor an opportunity to be creative. These
factors are all interrelated and should be pondered prior to SOW
development.
(2) When the initiator of the requirement has limited knowledge or is not
up-to-date in the field of expertise in which the requirement exists,
it would be advisable to either: (i) obtain in-house assistance and/or
(ii) express the requirement in terms of performance. Tell the
potential offerers what you want and what will comprise successful
performance.
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(3) Sometimes it is not clear to the SOW initiator what the problem is
that management has perceived to exist (and thus budgeted funds for)
or the area to be investigated is not clear. In this case it may be
advisable to issue a performance-based term form SOW. Use of this
type of SOW would enable the relatively easy termination of the
requirement if needed. However, expressing your requirement in this
format is discouraged in that resultant Level-of-Effort contracts are
costly to administer and provide no cost incentive to the contractor.
(4) The nature of the requirement is a critical factor in determining how
to express the requirement. For example, a research and
development SOW would not be written as a design Statement of
Work; it should be written on a completion basis. A requirement for
a waste water treatment plant, however, would be expressed on a
design basis. In an instance where there is a need for a high-level
subject matter expert to review a critical scientific protocol, the
requirement would be written on a performance basis; and due to a
genuine inability of the Government to know what is involved in doing
the work and the fact that it is a short-term service, the requirement
would most likely be expessed on a term basis.
(5) If the intent of the drafter of the Statement of Work is to maximize
the contractor's opportunity to creatively solve the problem or
otherwise perform the work, then a performance-based Statement of
Work should be utilized. It should be remembered at this point that a
definitive, well written SOW may well be suited for use with a
fixed-price contract (see 3.106-4 Contract Types).
M-3.106-3(e) Guidance on Preparation of the Statement of Work
(1) An adequately stated requirement or description of the scope of work
is the most important attachment to the Procurement Request. The
Statement of Work tells the prospective contractor what work will be
required, the conditions under which the work must be conducted,
how achievements will be assessed, what the obligations will be, and
enables the contractor to assess its capabilities in light of the
contract requirements. The wording in the Statement of Work as it
appears in the Request for Proposals should be precise and suitable
for use in the resulting contract. An inadequate or poorly written
Statement of Work may result in: (i) unreasonable prices; (id failure
to obtain competition that might otherwise be achieved; (iii) failure
to obtain the desired effort from the contractor; (iv) a lengthening of
the procurement process; and (v) poor technical proposals and
divergent cost proposals. In addition, the work statement affects the
number of sources willing to submit proposals, the evaluation of
proposals, the type of contract that will be written, and the
administration of the contract.
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(2) General guidance for developing the Statement of Work is as follows:
(i) -Describe the scope of work to be done as a clearly-defined
task, or tasks, with a definite goal, objective, or target
expressed. You may also establish a minimum goal, objective,
or target and a desired goal or objective for which the
prospective contractor should strive.
(ii) Establish meaningful parameters of measure. The parameters
will serve three purposes: to prevent the contractor from
'expending effort not pertinent to the goal, objective, or
target; to measure the results of the completed work; and to
assist in defining whether subsequent changes or redirection of
effort fall within the original scope of work.
(iii) For commercial activities subject to OMB Circular A-76 (refer
to 2.202 in Chapter 2) the guidance contained in Part n of the
Circular Supplement should be followed.
(iv) For basic or applied research projects, allow sufficient
flexibility to permit proposers some degree of latitude in
structuring a technical approach to solve the problem.
(v) For advanced development, hardware requirements, testing, or
survey services, the Statement of Work should describe the
work as a clearly defined task or job with a definite goal or
target expressed and with an end-product specified.
(vi) For basic or applied research and exploratory development,
there will be some instances in which it will not be possible to
define the scope of work with any degree of precision, and the
Statement of Work can only be written in general terms. In
such cases, the resultant contract may be a type that obligates
the contractor to devote a specified level-of-effort for a
stated period of time, and is the term form of a
cost-reimbursement type contract (see 3.106-4 Contract
Types).
In accordance with the Federal Acquisition Regulation, this
form of contract should not be used unless the contractor is
obligated by the contract to provide a specific level of effort
within a definite period of time. Renewals for further periods
of performance are new acquisitions and involve new fee (if
with a profit-making organization) and cost arrangements.
This form of contract is one of the least desirable types for
the reason that there is no assurance that a definite target or
goal can be reached by the level of effort specified in the
contract. Therefore, this form of contract should be avoided
when possible, but when used should be confined to only
research and exploratory development work. When a
level-of-effort contract is contemplated by the initiator, the
hours to be specified will be cited in conjunction with period
of performance, and not in the Statement*of Work.
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(vii) Originators of Statements of Work are encouraged to solicit
assistance in the preparation of the Statement of Work from
their appropriate procurement activity.
(3) Appendix C includes a listing of key words that may be utilized in
preparing Statements of Work.
M-3.106-3(f) Writing Specifications for Commercial Products
(1) A commercial product is an item of supply that is sold to the general
public in the course of normal business operations at prices based on
catalog or market prices. Since most commercial products are
produced in significant quantities and generally under highly
competitive environments, the price of such products are lower than
items produced to meet a specific specification and in small
quantities. Commercial products are distributed through the
commercial marketing/distribution systems and are generally
available from local wholesale and retail outlets. For these reasons,
Government agencies are required to use commercial products and
the commercial distribution system whenever such products
adequately satisfy the Governments needs.
(2) Acquisition of commercial products begins with a description of the
Government's needs stated in functional terms (see 3.106-3(b)(l)(i)) so
that a market research can be conducted to determine whether
commercial products are available to meet Government needs. The
function description of the required product must be in sufficient
detail so that commercial firms can determine whether their product
meets the Government requirement.
(3) A market research involves obtaining and analyzing the following
type information:
(i) The availability of products and an analysis of their
specifications;
(ii) Catalog identification;
(iii) The volume of sales and the number of years the products have
been sold to determine their stability in the market place and
product reliability;
(iv) The distribution and support (maintenance and parts)
capabilities of potential suppliers;
(v) Product warranty;
(vi) Any laws or regulations relating to the control and use of the
product.
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(4) Generally market surveys are made by publishing a request for
product information in the Commerce Business Daily. However,
other methods of other product information include:
(0 Catalogs published by manufacturer, distributors, and dealers;
(ii) Source list for items of a similar nature maintained at
contracting activities;
(iii) GSA Federal Supply Schedules;
(iv) Informational requests for quotations;
(v) Other Federal agencies.
M-3.106-4 Contract Types
Although the determination of contract type is the responsibility of the
Contracting Officer, it is important that the drafter of the requirement
understand the basic differences between the two contract families
(fixed-price and cost-reimbursement) and their relationships to the Statement
of Work. The primary difference between these two families of contracts is
that in the fixed-price arrangement the contractor is assuming the cost risk of
performance, whereas in the cost-reimbursement contract the Government
assumes the risk. Another important observation is that the fixed-price
contract is utilized only when a definitive design or performance specification
exists. However, cost-reimbursement contracts are to be utilized when
definitive requirements do not exist, as in R&D, and the cost uncertainties of
performance are high. Thus, if the drafter of the SOW desires to ensure
performance within available dollars through the use of a fixed-price contract,
a definitive Statement of Work would have to be developed. Remaining
paragraphs deeribe contract types frequently utilized within EPA.
M-3.106-4(a) Firm Fixed-Price Contract
(1) The firm fixed-price contract provides for a price which is not
subject to any adjustment by reason of the cost experience of the
contractor in the performance of the contract. This type of
contract, when appropriately utilized, places the maximum risk upon
the contractor. Because the contractor assumes full responsibility, in
the form of profits or losses, for all the costs under or over the firm
fixed price, it has a maximum profit incentive for effective cost
control in contract performance. Use of the firm fixed-price
contract imposes a minimum administrative burden on the
contracting parties.
(2) The firm fixed-price contract is suitable for use in procurements
when reasonably definite design or performance specifications are
available and whenever fair and reasonable prices can be established
at the outset.
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M-3.106-4(b) Cost-Reimbursement Type Contract
(1) The cost-reimbursement type of contract provides for payment to the
contractor of allowable costs incurred in the performance of the
contract, to the extent prescribed in the contract. This type of
contract establishes an estimate of total cost for the purpose of
obligation of funds which represents a ceiling which the contractor
may not exceed (except at its own risk) without prior approval of the
Contracting Officer.
(2) The cost-reimbursement type contract is suitable for use only when
the uncertainties involved in contract performance are of such
magnitude that the cost of performance cannot be estimated with
sufficient reasonableness to permit use of any type of fixed-price
contract. In addition, it is essential that (i) the contractor's cost
accounting system is adequate for determination of costs applicable
to the contract, and (ii) appropriate surveillance by Government
personnel during performance will give reasonable assurance that
inefficient or wasteful methods are not being used.
M-3.106-4(c) Cost-Plus-Fixed-Fee Contract
(1) The cost-pliis-fixed-fee contract is a cost-reimbursement type of
contract which provides for the payment of a fixed fee to the
contractor. The fixed fee once negotiated does not vary with actual
cost, but may be adjusted as a result of any subsequent changes in the
work or services to be performed under the contract. Because the
fixed fee does not vary in relation to the contractor's ability to
control costs, the cost-plus-fixed-fee contract provides the
contractor with only a minimum incentive for effective management
control of costs.
(2) Application. The cost-plus-fixed-fee contract is suitable for use
when:
(i) the parties agree that the contract should be fee-bearing;
(ii) the contract is for the performance of research, or
preliminary exploration or study, where the level of effort
required is unknown; and where measuring achievements in
contract performance does not lend itself to the subjective
evaluation required in cost-plus-award-fee contracts (see
M-3.106-4(d)); or
(iii) the contract is for development and test where the use of a
cost-plus-incentive-fee contract is not practical (see Exhibit
3-3).
(3) This type of contract normally should not be used once prerequisite
preliminary exploration, studies, and risk reduction have indicated a
high degree of probability that the development is achievable and the
Agency generally has determined its desired performance objectives
and schedule of completion.
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(4) 10 U.S.C. 2306(d) provides that in the case of a cost-plus-fixed-fee
contract the fee shall not exceed ten percent (10%) of the estimated
cost of the contract. A fee not in excess of fifteen percent (15%) of
such estimated cost is authorized in a CPFF contract for
experimental, developmental, or research work. A fee inclusive of
the contractor's cost and not in excess of six percent (6%) of the
estimated cost of construction, exclusive of fees, as determined by
the Administrator at the time of entering into the contract, is
authorized in contracts for architectural or engineering services
relating to any public works or utility projects.
(5) The cost-plus-fixed-fee contract can be drawn in one of two basic
forms: completion or term.
(i) The completion form is one which describes the scope of work
to be done as a clearly defined task or job with a definite goal
or target expressed and with a specific end-product required.
This form of contract normally requires the contractor to
complete and deliver the specified end-product (in certain
instances, a final report of research accomplishing the goal or
target) as a condition for payment of the entire fixed fee
established for the work and within the estimated cost if
possible; however, in the event the work cannot be completed
within the estimated cost, the Government can elect to
continue the work without increase in fee provided it increases
the estimated cost.
(ii) The term form is one which describes the scope of work to be
done in general terms and which obligates the contractor to
devote a specified level of effort for a stated period of time.
Under this form, the fixed fee is payable at the termination of
the agreed period of time upon certification by the contractor
that it has exerted the level of effort specified in the contract
in performing the work called for, and such performance is
considered satisfactory by the Government. Renewals for
further periods of performance are new procurement and
involve new fee and cost arrangements.
(iii) The completion form of contract, because of differences in
obligation assumed by the contractor, is preferred over the
term form whenever the work itself or specific milestones can
be defined with sufficient precision to permit the development
of estimates within which prospective contractors can
reasonably be expected to complete the work, as is usually the
case in advanced development and engineering development.
A milestone is a definable point in a program when certain
objectives can be said to have been accomplished.
(6) In no event should the term form of contract be used unless the
contractor is obligated by the contract to provide a specific level of
effort within a definite period of time.
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M-3.106-4(d) Cost-Plus-Award-Fee Contract
(1) The CPAF contract is a cost-reimbursement type of contract with
special fee provisions. It provides a means of applying incentives in
contracts which are not susceptible to finite measurements of
performance necessary for structuring incentive contracts. The fee
established in a CPAF contract consists of two parts: (1) a fixed
amount which does not vary with performance, and (2) an award
amount, in addition to the fixed amount, sufficient to provide
motivation for excellence in contract performance in areas such as
quality, timeliness, ingenuity, and cost effectiveness. Award fee may
be earned by the contractor in whole or in part. The amount of
award fee to be paid is based upon a subjective evaluation by EPA of
the quality of the contractor's performance, judged in the light of the
established criteria. The number of criteria used and the
requirements which are represented will differ widely from one
contract to another. Therefore, when establishing criteria and rating
plans, you should be flexible and select a plan which will motivate the
contractor in a positive way to improve performance. A copy of the
proposed award fee plan is required to be included in each solicitation.
(2) The contract provides for evaluation at stated intervals during
contract performance, so that the contractor will periodically be
made aware of the quality of its performance and will know in which
areas improvement is expected. EPA currently encourages the use of
four-month evaluation periods in lieu of the three-month period
commonly used in the past. Partial payment of fee will generally
correspond to the evaluation periods. This makes the incentive which
the award fee creates effective by inducing the contractor to
improve poor performance or to continue good performance.
(3) Evaluations are furnished to the contractor to afford it an
opportunity to comment on the evaluation findings. The decision that
award fee has been earned is based on the reports of performance
made by an EPA evaluation team whose members are knowledgeable
with respect to the contract requirements. This decision is a
unilateral determination made by the Government not subject to the
Disputes clause of the contract.
(4) The award fee decision referred to in (3) above is made by the Award
Fee Determination Official, i.e., the Chief of the Contracting Office
at the contracting activity. The EPA evaluation team is known as
the Performance Evaluation Board and is chaired by the Laboratory
or Division Director of the program initiating the requirement. All
appointments of participants in the award fee process are to be
approved by the Head of the Contracting Activity (HCA) (Director,
Procurement and Contracts Management Division).
(5) The CPAF contract is suitable for:
(i) level-of-effort contracts for performance of services where
mission feasibility is established but measurement of
achievement must be by subjective evaluation rather than
objective measurement;
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(ii) work which would have been placed under another type of
contract if the performance objectives could be expressed in
advance by definite milestones, targets or goals susceptible of
measuring actual performance; and
(6) The CPAF contract will not be used:
(0 as an administrative technique to avoid CPFF contracts when
the criteria for CPFF contracts apply, nor will a CPAF
contract be used to avoid the effort of establishing objective
targets so as to make feasible the use of a Cost-Pius-Incentive-
Fee (CPIF) type contract.
(ii) where the contract amount, period of performance, or the
benefits expected are insufficient to warrant the additional
administrative effort or cost.
M-3.106-4(e) Time and Materials Contract
(1) The time and materials type of contract provides for the
procurement of supplies or services on the basis of (i) direct labor
hours at specified fixed hourly rates (rates include wages, overhead,
general and administrative expense, and profit), and (ii) material at
cost, and, in addition, where appropriate, material handling costs as a
part of material cost. Material handling costs may include all
indirect costs, including general and administrative expense,
allocated to direct materials in accordance with the contractor's
usual accounting practices. Material handling cost includes only
costs clearly excluded from the labor hour rate. This type of
contract does not afford the contractor any positive profit incentive
to control the cost of materials or to manage its labor force
effectively.
(2) The time and materials contract is used only where it is not possible
at the time of placing the contract to estimate the extent or duration
of the work or to anticipate costs with any reasonable degree of
accuracy. Particular care should be exercised in the use of this type
of contract since its nature does not encourage effective
management control. Thus it is essential that a T&M contract be
used only where provision is made for adequate controls, including
appropriate surveillance by EPA personnel during performance to
give reasonable assurance that inefficient or wasteful methods are
not being used. This type of contract may be used in the
procurement of (i) engineering and design services, (ii) repair,
maintenance, or overhaul work; and (iii) work to be performed in
emergency situations.
(3) A time and materials contract does not encourage effective cost
control and requires almost constant Government surveillance; it
should be used only after the Contracting Officer determines that no
other type of contract will suitably serve.
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M-3.106-4(f) Labor-Hour Contract
The labor-hour type of contract is a variant of the time and materials
type contract, differing only in that materials are not supplied by the
contractor.
M-3.106-4(g) Indefinite Delivery Type Contract
One of the following indefinite delivery type contracts may be used for
procurement where the exact time of delivery is not known at time of
contracting.
(1) Definite Quantity Contracts. This type of contract provides for a
definite quantity of specified supplies or for the performance of
specified services for a fixed period with deliveries or performance
at designated locations upon order.
This type of contract is particularly suitable for use where it is
known in advance that a definite quantity of supplies or services will
be required during a specified period and are regularly available or
will be available after a short lead time.
(2) Requirements Contracts. This type of contract provides for filling
all actual purchases requirements of specific supplies or services
during a contract period with deliveries to be scheduled by the
placement of orders to the contractor. A realistic estimate of total
quantity is stated for the information of prospective contractors.
The estimate may be obtained from the records of previous
requirements and consumption, or by other means. The contract
states the maximum limit of the contractor's obligation to deliver
and appropriate provisions limiting the Government's obligation to
order. It may also specify the maximum quantities which may be
ordered under each individual order during a specified period of
time. Similarly, when small orders are anticipated, the contract may
specify the minimum quantities to be ordered. Funds are obligated
by each order and not by the contract itself.
A requirements contract may be used for procurement when it is
impossible to determine in advance the precise quantities of the
supplies or services that will be needed by EPA during a definite
period of time. Advantages of this type of contract are:
(i) flexibility with respect to both quantities and delivery
scheduling; and
(ii) supplies or services need be ordered only after actual need has
materialized.
Generally, the requirements contract is appropriate for use when the
item or service is commercial or modified commercial in type and
when a recurring need is anticipated.
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M-3.106-4(h) Indefinite Quantity Contract
(1) This type of contract provides for the furnishing of an indefinite
quantity of specified supplies or services, with deliveries to be
scheduled by the placement of orders to the contractor. The
contract provides that the Government will order a stated minimum
quantity of the supplies or services and that the contractor will
furnish the minimum and any additional quantities not exceeding a
stated maximum. The maximum quantity (or amount expressed in
dollars) should represent the Government's best estimate of potential
usage. The evaluation of proposals to select the source is
accomplished at this leveL During contract performance, the
contractor is not required to accept orders above the maximum.
Pertinent contract clauses provide for a number of days for the
contractor to accept orders above the maximum. In appropriate
cases the maximum may be raised during the contract period using
noncompetitive procedures. The minimum must be more than a
nominal quantity; yet it should not exceed the amount which is fairly
certain to be ordered. The contract may also stipulate minimum and
maximum quantities applicable to each order. The recommended
practice is for the first order for the minimum quantity to be placed
simultaneously with contract award. EPA Form 1900-8 or OF 347
may be used in placing orders.
(2) An indefinite quantity contract may be used where it is impossible to
determine in advance the precise quantities of the supplies or
services that will be needed by EPA during a definite period of time
and it is not advisable for the Agency to commit itself for more than
a minimum quantity. Advantages of this type of contract are:
(i) discrete funding with each order;
(ii) flexibility with respect to both quantities and delivery
scheduling;
(iii) placing orders only as the need arises;
(iv) flexibility in the types of pricing arrangements selected for
use;
(v) Government's legal obligation is limited to contract minimums
and delivery orders as issued.
(3) Traditionally, fixed-price arrangements have been used in indefinite
quantity contracts. In such cases the solicitation provides for fixed
prices per item specified, and evaluation of proposals for award is
based on respective offerers' bid prices per item times the maximum
quantity. Other forms of pricing arrangements may be used;
however, they must be clearly spelled out in the solicitation and
contract to form the basis for contract award and subsequent
placement of orders. These methods include: (i) fixed loaded labor
rates in the time and material (T&M) or labor-hour (LH) mode
and (ii) cost-reimbursement. The contract arrangements and
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funding principles used may be either job (completion) or term
(continuing type service), depending on the nature of the requirement.
M-3.106-4(0 Matrix of Contract Types
In addition to the most frequently used contract types described above,
Exhibit 3-3 contains a description of additional contract types available for
use by the Contracting Officer.
M-3.106-5 Technical Evaluation Criteria
M-3.106-5(a) Purpose and Basic Requirements
(1) The basic function of technical evaluation criteria is to help
determine in a most objective and fair method which one of the
technical proposals is most advantageous to the Government.
(2) Although the initiator of EPA Form 1900-8, Procurement
Request/Order, is responsible for the development of the technical
evaluation criteria, the Technical Evaluation Panel (TEP) and
Business Evaluation Panel (BEP) are additionally responsible for
ensuring that the evaluation criteria are adequately stated and
applicable to the procurement action (see M-5.103-3 and -4).
(3) Evaluation criteria must be developed on a case-by-case basis after
taking into consideration each of the salient features of the specific
procurement action. The number of evaluation criteria developed
should be that needed to properly discriminate between the relative
technical merit of proposals. It should be kept in mind, however, that
a large number of criteria will make the evaluation process
extremely difficult, especially where numerous proposals have been
received.
(4) All offerers must be able to readily determine from an examination
of the criteria included in the solicitation the basis upon which their
offers will be evaluated. In order to accomplish this, the evaluation
criteria must be published in the solicitation package in elements and
sub-elements. The importance of each element and sub-element
must also be published in the solicitation package. You must assign a
numeric weight to each major element and sub-element which shows
the relative importance of the criterion.
(5) In addition to the technical evaluation criteria, the solicitation should
describe the importance of price or cost in the selection decision as
well as any other factors which may influence the selection decision
which are foreseen at the time the solicitation is issued. Both price
or cost and other factors are elements for the Source Selection
Official (SSO) to consider (see M-5.103-2).
M-3.106-5(b) Types of Evaluation Criteria
There are basically two types of evaluation criteria: go-no-go and
variable criteria.
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(1) A go-no-go criterion is a mandatory criterion which when compared
to what the offerer is proposing will clearly show whether the
requirement has or has not been met. This type of criterion will,
when applied, always result in a "yes" or "no"; there are no "maybes."
An example of the use of this type of criterion would be where
contractors are required to either have at their facility or have
immediate access to a given type of equipment.
(2) Variable (sometimes referred to as scorable) criteria are used to
determine the degree of acceptability of a proposal. When using
variable criteria, the evaluator is asking such questions as "To what
degree?" "How much?** "How well" has the offerer proposed and
assigns a score.
M-3.106-5(c) What Is To Be Evaluated
What is to be evaluated breaks down into two areas: What is offered and
the offerer. The drafter of the criteria for what is offered should be able to
isolate and describe those items which will best determine how well the
product/service will meet EPA's needs. In establishing criteria to evaluate the
offerer, the types of questions to ask are: What attributes must offerers have
to perform well? What does an offerer need to perform successfully?
In some cases, the proposed scope of work will involve environmentally
related measurements and, consequently, Agency Quality Assurance
requirements will be applicable. For such projects, the offerer's capabilities
to implement and perform a QA program successfully should be assessed. The
EPAAR has solicitation provisions requiring offerers to submit a QA Program
Plan or a QA Project Plan as part of the offerer1? proposal. The Project
Officer may request the appropriate provision for inclusion in the solicitation.
M-3.106-5(d) Developing and Weighting Evaluation Criteria
(a) Developing evaluation criteria is primarily a matter of determining
what aspects of the requirement are important and establishing criteria
weights which reflect relative importance. The following points should be
kept in mind in developing the evaluation criteria.
(1) Offerers must be given clear notice of what factors are actually
going to make a difference in selection.
(2) Does the criterion articulate what you have in mind?
(3) Has the criterion been narratively expressed in action words that are
clear?
(b) The numeric weights assigned must coincide with the relative
importance of each technical evaluation criterion element and sub-element.
Weighting evaluation criteria and the sub-elements of the criteria, if they
have been established, involves nothing more than the following:
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(1) Determining the total weight that all criteria combined are to
represent (e.g., 100,150, 200 points, etc.);
(2) Identifying what is considered as the most important criterion;
(3) Allocating points in light of the total remaining criteria; and
(4) Allocating points establishing importance of sub-elements if such are
used.
(c) For work involving environmentally related measurements, the
QA/QC capabilities of the offerer should be included in the evaluation
criteria. The numeric weights assigned to each QA element should reflect
consideration of the importance of the measurements activities to the overall
project goals. At least 5 percent of the total numeric weight for all criteria
should be assigned to Quality Assurance. There is no specific maximum, but
30 percent would appear to be the upper limit.
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M-3.106-5(e) Relationship of Price/Cost to Technical Evaluation Criteria
In addition to being provided an indication of the importance of technical
criteria, offerers should be told the relative importance of price/cost to
technical considerations. Stated another way, is EPA more interested in the
technical excellence of the offerer's proposal than cost (within reason)? The
relationships between these elements depends upon the type of contract to be
utilized. Actual weighting of importance is arrived at by the Project Officer
and concurred in by the Contracting Officer.
M-3.106-5(f) Sample Evaluation Criteria
(1) Exhibit 3-4 sets forth a sample of well-constructed technical
evaluation criteria. You will note in examining Exhibit 3-4 that this
set of criteria clearly explains to the potential offerer the types of
factors that will be addressed in making the evaluation and what is
meant by each criterion. These criteria will clearly enable
evaluation to delve into relative value of proposals. In addition, each
criterion does not overlap other criteria.
(2) Characteristics of the good evaluation criteria to be considered
include:
(i) Categories to be evaluated should be identified with an
overall statement such as "Technical Review Categories" to
make it abundantly clear that these are the precise
categories to be technically reviewed in evaluating proposals
received. Headings such as "Demonstrated Level of
Experience" would also be beneficial to assure a better
understanding of the purpose of the criteria.
(ii) The format should be designed to provide independent
weighting for each category to be rated. For example, where
performance of the company and its personnel are to be rated
based on similar previous experience, separate weight and
ratings should be provided.
(iii) Criteria for evaluation should be clear and meaningful, not
imprecise and indefinite. This must be done to assure fair
and impartial proposal evaluation.
(iv) Choice of words should be such that they reflect the
evaluative action that will be taken by the technical proposal
evaluation team—e.g., demonstrated depth of experience in
. . ., etc.
(v) Questions used to formulate evaluation criteria should not be
redundant and overlapping. When they are redundant and
overlapping, the effect is to make the result of the
evaluation uncertain and ineffective. The dictum for
preparing appropriate evaluation criteria should be to state it
in clear, concise, and positive terms.
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(vi) Issues relative to the responsibility of the contractor—i.e.,
past performance, financial capability, etc. are not
weightable criteria; rather, they are go-no-go decisions which
are the Contracting Officer's responsibility to determine.
(vii) Use a numbering system for criteria that is logical and
orderly. Avoid use of the same numeric designator for the
paragraph and subparagraph, followed by an alpha
designator. For example, a system which used A.4.4a is
confusing and should be avoided.
(viii) The number of criteria to be used should not be excessive.
Criteria should be well thought out, properly worded, and
should include only those criteria needed to differentiate
between proposals.
M-3.106-6 Technical Proposal Instructions (TPIs)
(a) Solicitations contain both general and specific instructions
concerning the preparation and submission of business and technical offers.
General solicitation instructions and business proposal instructions are
developed, for the most part, independently by contracting personnel.
However, technical proposal instructions (where submission of technical input
is required from the contracting community) should be developed and included
within the text of the requisition by the program official.
(b) Technical proposal instructions inform offerers of the type, quantity,
and format of the data that should constitute their technical proposal. The
proposal in turn is evaluated against the technical evaluation criteria
contained in the solicitation. The Project Officer must give careful
consideration to the development of technical proposal instructions that tie
into the technical evaluation criteria and provide clear instructions on the
type of data needed for evaluation. TPIs not contained in the standard
solicitation package but considered desirable should be provided to the CO for
inclusion in the RFP.
M-3.106-7 Classified Information
(a) The Project Officer should consider whether the requirement will
involve access to classified national security information by contractor
employees. In such cases, the following information must be set forth in the
PR rationale checklist.
(1) Level of access to classified information required—i.e., Top Secret,
Secret, or Confidential, and statement as to whether or not access to
Atomic Energy Act of 1954 Restricted Data will be required; and
(2) A statement as to whether or not the facility is to receive and store
classified information in connection with the proposed contract.
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(b) Periodically the Agency has requirements that call for a contractor
to review or analyze proprietary data that has been submitted to EPA by
another firm. Where a requirement of this nature exists, complete details
regarding the nature of the data, the extent of review, and other pertinent
information must be included in the PR rationale.
M-3.106-8 Source Considerations
In developing your PR, you may list those sources that you consider
qualified to perform the effort described in the Statement of Work. Sources
may be obtained from lists of qualified sources, personal experience,
recommendations of other Project Officers, the Contracting Officer,
directories, Small and Disadvantaged Business Specialist, etc. If a number of
the sources listed are small businesses, a recommendation for a small business
set-aside is encouraged. It must be recognized that other sources may be
added by the Contracting Officer as a result of publicizing in the Commerce
Business Daily, or from the Procurement Automated Source System (PASS)
maintained by the. Small Business Administration. If a noncompetitive
procurement is recommended, it will be necessary to prepare a Justification
for Noncompetitive Procurement and submit it as a separate attachment to
the procurement request. If the requirement is less than $10,000, the
justification shall be in the form of a brief statement attached to the EPA
Form 1900-8, Procurement Request/Order.
It is important to have a meaningful participatory role by the Program
Offices in supporting EPA's efforts to increase acquisitions through its
socioeconomic utilization programs. Each program has the responsibility for
establishing its own goals for socioeconomic business utilization in
collaboration with appropriate procurement operations and the Office of Small
and Disadvantaged Business Utilization (OSDBU).
M-3.106-8U) Availability of Work Resulting From Other Sources
The Project Officer should consider whether, after adequate research, the
results of the work being procured are or are not available from any current
source. This type of information can be obtained from other Project Officers,
the Contracting Officer, and clearinghouses such as the National Technical
Information Service (Department of Commerce), Springfield, Virginia.
M-3.106-8(b) Small Business Set-Asides
(1) Introduction
It is the policy of the Government to aid, counsel, assist, and protect,
insofar as possible, the interests of small business concerns in order
to preserve free competitive enterprise; and to place with small
business a fair proportion of the total Government contracts for
property and services.
In accordance with the Small Business Act (15 U.S.C. 637), EPA is
required to establish and conduct programs to increase small business
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enterprise participation in Government procurement. A major
program used to accomplish these goals is the small business
set-aside program.
(2) Set-Asides for Small Business
A set-aside for small business is the act of reserving the entire
amount (total set-aside) or a portion (partial set-aside) of a
procurement for the exclusive participation of small business
concerns. The Project Officer may recommend that a requirement
be met through a set-aside. Determinations to set aside EPA
acquisition actions may be initiated unilaterally by the Contracting
Officer, or they may be made jointly by a representative of the Small
Business Administration and the Contracting Officer. Where a
set-aside is contemplated, the Project Officer will be requested to
advise and assist procurement personnel in identifying small business
sources and evaluating the technical capabilities of small business in
connection with acquisition of property and services, including
research and development.
M-3.10fr-8(c) Socially and Economically Disadvantaged Business
Enterprise Program—8(a) Contracts
(1) Policy
It is the policy of the Environmental Protection Agency to enter into
contracts with the SBA so as to assist in the growth of small minority
business concerns as designated by the SBA. The Office of Small and
Disadvantaged Business Utilization is responsible for implementing
this policy and stands ready to assist all Agency personnel in
furtherance of the small and disadvantaged business utilization
program. Due to the Agency's obligation to all small businesses, EPA
activities do not seek 8(a) contracts where one or more of the
following circumstances exist:
(i) The percentage of procurements considered for 8(a)
contracting is excessive in relation to the total purchases of
like or similar products or services procured by the Federal
Government.
(ii) The procurement has been synopsized or publicized or if public
solicitation has already been issued under a small business
set-aside for the specific procurement in question.
(iii) The procurement is of such magnitude or complexity as to be
incapable of performance by 8(a) concerns or is otherwise
inappropriate for performance by 8(a) concerns.
(iv) The contracting office can make a noncompetitive award
directly to a small minority business concern, or there is a
reasonable probability that an award can be won by such a
small minority business concern through normal competitive
procedures.
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(v) It is determined by the SBA that a small business concern may
suffer a major hardship if the procurement is removed from
competition, thereby denying the concern, otherwise
historically dependent on such recurring procurement(s), the
opportunity to compete.
(2) Responsibilities
(i) The Agency's Project Officers have the primary responsibility
for identifying suitable procurements for 8(a) awards. In
fulfilling this responsibility, Project Officers are to identify
procurements for potential 8(a) awards during the planning
stages of the procurement.
(ii) The Small and Disadvantaged Business Utilization Specialist
(SDBUS), at each procurement operation, is responsible for
providing guidance and assistance to EPA contracting and
program offices concerning Section 8(a) contracting. The
SDBUS screens purchase requests for the purpose of identifying
those requirements which may be considered for 8(a)
contracting.
(3) Recommending 8(a) Contractors
(i) Project Officers are to screen procurement plans and existing
requirements for potential awards under the Section 8(a)
negotiated contracting approach. The resultant list of
selected 8(a) procurement requirements are then forwarded to
the Chief of the Contracting Office at the contracting
activity on a quarterly basis. The contracting activity then
matches the procurement actions with the capabilities of
eligible, approved 8(a) firms and will then forward its
recommendation to the SBA for further processing. Project
Officers request the assistance of the Minority Business
Enterprise Representative (MBER) in carrying out their
responsibilities.
(ii) The recommendation of an 8(a) contractor for contract award
may be made either by the Contracting Officer or the Project
Officer after appropriate consultation with the Small and
Disadvantaged Business Utilization Specialist. Upon the
request of the Contracting Officer and the SDBUS, the SBA
determines and advises as to whether the proposed firm is 8(a)
approved.
(iii) Sole-source offerings are acceptable for 8(a) contracts for
personal property and nonpersonal services, including
professional services and Certified Public Accountant (CPA)
audit services. Sole-source offerings for architect-engineering
(A-E) services are unacceptable. When only one 8(a) firm is
approved for consideration by SBA, the Contracting Officer
will issue the solicitation to the 8(a) firm requesting it to
submit a cost proposal for the proposed 8(a) procurement.
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M-3.106-8(d) Labor Surplus Area Set-Asides
It is the policy of the Government to promote equitable opportunities for
labor surplus area concerns to compete for contracts and to encourage
placement of contracts with concerns which will perform such contracts
substantially in labor surplus areas. The Department of Labor determines and
publishes a listing of the geographical areas which are considered to contain a
surplus of labor. The Contracting Officer has knowledge of these areas. In
the acquisition planning process, consideration must be given to determining
whether capable firms reside within labor surplus areas and thus a set-aside
would be appropriate.
M-3.106-8(e) Sources-Sought Synopsis
(1) Used as an Advance Notice
(i) To support the future contracting needs of research and
development programs, the Commerce Business Daily is used
to publish an "advance notice" of the Government's interest in
specific fields. These notices are not a synopsis of a Request
for Proposals—rather, are notices of future requirements.
Through this mechanism, potential sources learn of the
Government's requirements and are given an opportunity to
submit information demonstrating their capabilities in a
specific field.
(ii) In using the sources-sought synopsis as an advance notice, it is
necessary to develop general criteria for potential
sources—criteria that will set forth the capabilities needed.
Such qualification criteria consist of special experience,
capability, facilities, or other factors that are critical to the
program performance aspects of the procurement. However,
care must be exercised to restrict qualification criteria to
those that are absolutely essential to the successful
completion of the contract work.
(iii) The Project Officer should develop an outline of the major
tasks to be accomplished under the contemplated acquisition
and the qualification criteria to be utilized in evaluating
prospective source capabilities. The Contracting Officer will
forward the synopsis to the Commerce Business Daily.
Information received in response to the advance notice will be
transmitted to the Project Officer for evaluation and rating of
each respondent's technical capabilities. The Project Officer
will be requested to prepare an evaluation memorandum which
recommends technically qualified sources for subsequent
solicitation by the Contracting Officer. When additional
sources are known to program personnel, they should also be
furnished to the Contracting Officer along with those
responding to the synopsis. All sources deemed fully qualified
will be invited to submit proposals when Requests for
Proposals are issued.
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(2) Used to Perform Market Surveys
(i) The Federal Acquisition Regulation (FAR) and the EPAAR
require that market surveys be conducted in justifying sole
source acquisitions and acquisitions using other than full and
open competition that exceed $25,000. The publication of
either a synopsis of a proposed noncompetitive procurement,
or a sources-sought synopsis as described above, that is
detailed enough to permit submission of meaningful responses
and subsequent evaluation by the EPA, constitutes an
acceptable market survey. Further discussion is contained in
M-3.106-(f) below.
(ii) The synopsis must contain the following (see (l)(ii) and (iii)
above):
(A) A clear description of the supplies or services being
procured;
(B) Required Contractor capabilities, experience, and any
other factors salient to the requirement; and
(C) Criteria and weighting of the criteria to indicate relative
order of importance to be used in the evaluation of
responses.
(iii) It should be noted for planning purposes that:
(A) The market survey should be conducted as soon as
practicable after the requirement is known.
(B) Synopsis for making market surveys are not required for
acquisitions resulting from unsolicited research proposals
if to do so would disclose the originality of thought or
innovativeness of the proposal.
(3) Synopsis of Proposed Contracts
(i) Agencies are required to furnish for publication in the
Commerce Business Daily (CBD) notices of proposed contract
actions of $10,000 and above. Exceptions are set forth in
paragraph (iii) below.
(ii) The synopsis of a proposed contract must be published in the
CBD at least 15 days in advance of issuance of the
solicitation. Thirty (30) days response time is to be allowed
for receipt of bids or proposals from the date of issuance of
the solicitation.
(iii) A proposed contract need not be synopsized if the Contracting
Officer determines that (1) the contract action is of a
classified nature, (2) the requirement is urgent, (3) the
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requirement is for utility services available from only one
source, (4) the contract action is an order under a
requirements contract, (5) the action results from an
unsolicited proposal and publication of any notice would
improperly disclose the originality of thought or
innovativeness of the proposal, (6) purchases of perishable
subsistence, (7) purchase of brand name commercial items for
resale, (8) the contract is for a foreign government and that
government directs the source and funds the requirement, or
(9) the contract is authorized or required by statute to be
made through another Government agency such as 8(a)
acquisitions from SBA under the Small Business Act.
M-3.106-8(f) Justifications for Other Than Full and Open Competition
(JOFOC)
(1) Introduction
This section covers the procedure for justifying a noncompetitive or a
limited competition acquisition.
(2) Policy
(i) In the fulfillment of national policy, acquisitions by EPA shall
be conducted utilizing full and open competition with all
responsible sources. However, it is recognized that one or
more of the circumstances which permit other than full and
open competition may apply where it is in the interest of the
Government and EPA to solicit limited sources or only one
source. (See Exhibit 3-5.) In such instances, the initiating
program office may recommend that the supplies or services
be obtained from a limited number of sources or only from one
source. This recommendation is subject to review and
approval as provided in (5) below.
(ii) A written justification for other than full and open
competition that documents the facts and circumstances
substantiating the infeasibility of full and open competition
must be prepared by the initiating office for each limited
source or sole source acquisition except for those few types of
acquisitions specifically excepted by regulation. (See the
Contracting Officer to ascertain the applicability of these
exceptions to your particular requirement.)
(iii) The justification for sole source acquisition of any small
1 purchase ($1,000 to $25,000) must be submitted by the
Program Office submitting the procurement request in the
form of a brief written statement attached to the EPA Form
1900-8, Procurement Request/Order. The statement must cite
one or more of the circumstances which permit sole source
acquisition and the necessary facts to support each
circumstance. Although Program Offices may not cite the
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authority in FAR 6.302-7, the public interest may be used as a
basis to support a sole source acquisition. If the acquisition
has been synopsized, the statement must include the results of
the evaluation of responses to the synopsis. Justifications are
not required for: (1) acquisitions under mandatory Federal
Supply Schedules or mandatory ADP or TSP schedules; or (2)
acquisitions required by statute to be obtained from a specific
source, such as the National Industries for the Blind or Other
Severely Handicapped or Federal Prison Industries. The
Contracting Officer is the approving official for all sole
source acquisitions using small purchase procedures.
(iv) For acquisitions over $25,000, the recommendation for limited
or sole source acquisition must be entitled "Justification for
Other Than Full and Open Competition" and must be signed by
the programmatic Division Director or comparable office level
prior to submission with the Procurement Request/Order (EPA
Form 1900-8). The JOFOC must contain a full and complete
justification in accordance with the instructions prescribed in
(3) and (4) below.
(3) Conduct of Market Surveys To Determine Availability of Capable
Sources
(i) The Project Officer should notify the Contracting Officer as
soon as requirements become known to maximize the time
available to conduct the market survey. The Contracting
Officer determines the extent of the market survey. In
making this decision, the Contracting Officer may consider
such factors as the type and size of the acquisition, the results
of recent competitive acquisitions for similar supplies or
services, or other recent market surveys.
(ii) The Contracting Officer, with input from the Project Officer,
will determine the market survey strategy and decide who is
responsible for accomplishing various aspects of the survey.
For example, the Contracting Officer may choose to have
discussions with offerers who had proposed on previous similar
requirements. For market surveys involving discussions with,
or inquiries from, commercial firms, the Contracting Officer
must conduct or participate in such discussions or inquiries.
(iii) As stated in 3.106-8(e)(2) above, Commerce Business Daily
(CBD) synopses of proposed sole source acquisitions or
acquisitions using other than full and open competition or
sources-sought synopses .that are detailed enough to permit
submission of meaningful responses and subsequent evaluation
of the responses by EPA constitute an acceptable market
survey. If the FAR requires a synopsis, other methods of
conducting market surveys may not be substituted.
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(iv) Under those circumstances when market surveys are
conducted to assist in determining the existence of
competition for purchases over $10,000, the Contracting
Officer, with the assistance of the Project Officer, must
evaluate responses to such surveys in accordance with the
general criteria included in the synopses. If the evaluation
indicates that full and open competition can be provided for,
the Contracting Officer must issue a new synopsis and a
competitive solicitation. If the Contracting Officer
determines, after evaluation of responses, that a sole source
acquisition or limited competition should be conducted, the
evaluation document must be incorporated into the JOFOC.
This documentation must include:
(A) A copy of the CBD synopsis;
(B) A listing of respondees to the synopsis;
(C) A written evaluation of the responses; and
(D) The basis for the Contracting Officer's conclusion that
competitive procurement is impractical.
(4) Preparation of the Justification for Other Than Full and Open
Competition (JOFOC)
(i) The Project Officer will prepare a draft of the JOFOC for the
Contracting Officer's review and comment prior to
finalization using the format in Exhibit 3-6. The JOFOC shall
fully explain the circumstances which make full and open
competition infeasible. The JOFOC shall:
(A) Identify the project and describe the supplies or services
required to meet EPA's needs;
(B) Identify the statutory authority permitting other than full
and open competition. (See Exhibit 3-5 for applicable
statutory authorities.)
(C) Provide the facts supporting the citation of the statutory
authority that permits other than full and open
competition. Demonstrate that the proposed contractor's
unique qualifications or the nature of the acquisition
require use of the authority cited. Provide specific
support for each statutory authority used. Provide other
facts which support the justification (see ii below);
(D) Describe the efforts made to ensure that offers were
solicited from as many potential sources as practicable.
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(E) Describe the market survey that was conducted, including
whether a sources-sought synopsis was published in the
Commerce Business Daily, and the results of the survey.
(F) If applicable, describe the reasons why a market survey
was not conducted.
(G) Any other facts supporting the use of other than full and
open competition, e.g.,
(I) Explanation of why technical data packages,
specifications, engineering descriptions,
statements of work, or purchase descriptions
suitable for full and open competition have not
been developed or are not available.
(II) If follow-on acquisitions are cited as the basis of
the JOFOC, give an estimate of the costs that
would be duplicated if the award were to be made
to other than the original source, and give the
basis for your estimate.
(Ill) If unusual and compelling urgency is cited as the
basis for the JOFOC, explain the circumstances
that led to the need for an urgent contractual
action and explain why the requirement could not
have been processed in sufficient time to permit
full and open competition. The existence of
legislation, court-order, or Presidential mandate
is not, of itself, a sufficient basis for a JOFOC.
However, the circumstances necessitating
legislation, court order, or Presidential mandate
may justify contractual action on an other than
full and open competition basis.
(H) A listing of the sources, if any, that expressed, in writing,
an interest in the acquisition.
(I) A statement of the actions, if any, EPA may take to
remove or overcome any barriers to competition before
any subsequent acquisition.
(ii) Each JOFOC must reflect the degree of consideration that has
been given to other sources in the particular field and the
reasons they lack the capability evidenced by the proposed
contractor. The following questions represent factors that
should be considered, and when appropriate, discussed in the
JOFOC:
(A) What unique capability applicable to the specific effort
does the proposed contractor have which is essential to
satisfaction of the Government's minimum requirements?
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(B) Is the effort a continuation of a previous effort performed
by the proposed contractor; and to what degree is such
previous effort critical to the.current acquisition? Such
questions as the following should be considered and
addressed if pertinent:
(I) Is the added effort a minor supplement to a
completed project requirement? Of what
significance is this fact?
(ID Is the added effort a major supplement to a
completed project requirement? Of what
significance is this fact?
(HI) Is the added effort essential to the continuing
project requirement? Of what significance is this
fact?
(C) Does the proposed contractor have exclusive access to
personnel who are considered preeminent experts in the
particular fields necessary to perform the work? If so,
identify the expert(s) and the basis for the person's or
persons' expertise.
(D) What facilities, equipment, or data does the proposed
contractor have which are specialized, vital to the effort,
and which no other company can provide? Can the
Government furnish such resources as
Government-furnished equipment or data?
(E) Is urgency the basis for the JOFOC? Urgency means that
the need is so compelling that the Government would be
injured financially or otherwise if the property or services
to be acquired were not furnished by a certain time.
There may be valid reasons for obtaining required goods
or services on an urgent basis, and although there may be
other firms capable of delivering the required goods or
services, no other firm could deliver within the required
performance period, even if expedited competitive
procedures were employed. Explain the circumstances
that led to the need for an urgent contractual action.
(F) If the basis for the JOFOC is an unsolicited proposal,
M-3.106-8(g) provides guidance for justification of
noncompetitive procurement.
(iii) The following factors, according to decisions of the
Comptroller General, cannot be used to justify noncompetitive
procurements:
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(A) The proposed organization is either a nonprofit
organization, a tax exempt entity, or a volunteer citizens
group; or
(B) The proposed organization has a large price advantage and
it is believed that there is little or no willingness in the
market to supply competitive offers (Comptroller General
Decision B-l87369, 2/28/77).
(5) JOFOC Certification Requirements
(i) The Contracting Officer is required to certify that the
justification is accurate and complete to the best of the
Contracting Officer's knowledge and belief.
(ii) The justification must include evidence that any supporting data
that is the responsibility of technical or requirements personnel
such as verifying EPA's minimum needs, schedule requirements,
or other rationale for other than full and open competition have
been certified as complete and accurate by the technical or
requirements personnel.
(6) Review and Approval of the JOFOC
The review and approval of JOFOCs is conducted by contracting
officials at the levels specified in Exhibit 3-7. The review must
assess the quality of consideration given those factors discussed in
(4)(ii) above and the approval must be based upon the validity-of the
justification offered in support of the proposal to contract on an
other than full and open competition basis.
M-3.106-8(g) Unsolicited Proposals
(1) An unsolicited proposal is a voluntary offer submitted by an
individual or an organization that has a scientific or technological
idea which the offerer believes has a value to the agency. EPA
encourages the submission of unsolicited proposals as part of its
efforts to utilize all sources of scientific and technical expertise.
(2) Control and Processing
(i) A centralized control point has been established in the Grants
Administration Division, Office of Administration, to process
unsolicited proposals regardless of where they are received in
the Agency. After acknowledging receipt, the Grants
Administration Division assigns to each proposal a control
number and transmits the proposal to a program office for
purposes of evaluating its relative technical merit.
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(ii) If the program office decides to fund the proposal as a grant
or cooperative agreement, the proposal will be returned to the
Grants Administration Division for further processing. Where
a contract is the appropriate instrument, a procurement
request must be prepared and forwarded to the Procurement
and Contracts Management Division, Office of Administration.
(iii) Some important points to remember are:
(A) An unsolicited proposal is exactly that: "unsolicited."
Project Officers should not involve themselves in
suggesting or requesting that a firm submit an
"unsolicited proposal."
(B) Ethical/legal considerations impose restrictions on the
disclosure and use of data submitted with a proposal.
(C) Unless precluded by (B), a market search will be
conducted to assist in determining whether the substance
of the proposal is available to the Government without
restriction from another source.
(D) Only the Grants Administration Division is authorized to
copy, photograph, or reproduce any parts of unsolicited
proposals.
(E) Approval of an unsolicited proposal does not in and of
itself justify noncompetitive procurement. A
Justification for Other Than Full and Open Competition
(JOFOC) must be prepared and submitted with the PR for
the unsolicited proposal.
(F) EPAAR provides for mandatory cost sharing for most
unsolicited proposals, except in cases where there is no
measurable gain to the performing organization.
M-3.106-9 Pre-Proposal Conferences
(a) A pre-proposal conference is a collective meeting of all prospective
offerers that is held by the Government for purposes of clarifying any
questions offerers may have regarding the work required in the solicitation.
Pre-proposal conferences may form an important part of the solicitation
process. Although the final determination to conduct a pre-proposal
conference is normally made by the Contracting Officer, you may suggest in
your PR Rationale Checklist that one be held. Considerations to address in
making your recommendations are as follows.
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(b) A pre-proposal conference would be advantageous to the Government
and prospective offerers in order to:
(1) Clarify or explain complex specifications, Statement of Work, or
proposed contractual provisions—e.g., patent rights and data
requirements;
(2) Discuss or emphasize the importance of any qualification
requirements that ha-. •; been set forth in the synopsis and
solicitation—e.g., offerers' capabilities, experience, facilities, and
resources that are required to perform the Statement of Work;
(3) Disclose any ambiguities, inconsistencies, and gaps within or between
the solicitation schedule, Statement ~f Work, specifications, and
evaluation criteria; and
(4) Provide additional background material to prospective offerers—e.g.,
reports or other documents that are too voluminous to include with
the solicitation, a site tour, or visits to the place of performance.
M-3.106-10 Site Visits
Most large support services contracts, such as Government-owned
contractor-operated (GOCO) facilities contracts and other complex projects,
include a Government-conducted tour of the work site. Prospective bidders
have full opportunity to inspect the work site and observe the unique
conditions which may hinder or facilitate their performance if awarded the
contract. The tour is most often conducted by the Project Officer or a
desigr.ee. During the tour, the PO identifies sections or language in the
specifications peculiar to the work site and responds to specific questions.
However, no additional information of a suostantive nature is provided by any
EPA representative during the inspection tour. If substantive issues arise
during a site visit, answers are deferred until a formal addendum to the
solicitation can be issued. The Project Officer should promptly bring such
matters to the CO's attention.
M-3.106-11 Reference Materials
Many requirements procured by EPA tie into previous contracts or pertain
to a body of research or data. Consideration should be given to identifying
reference materials that directly relate to the work to be performed that will
provide prospective offerers both a better understanding of the requirement
and will define EPA's needs. Typical reference materials are: General
Accounting Office reports, previous contract findings, standards, etc.
M-3.106-12 Cost Estimate
(a) The estimated amount of the proposed contract must be established
along with (i) an estimate of the labor hours required by category (senior
engineer, technician, etc.); (ii) an estimate of travel costs (number of trips,
destinations, and duration}; and (iii) listing of other anticipated direct charges,
such as equipment, consultants, and computer time. When a solicitation will
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be developed on a term basis (level of effort), it is important that the estimate
be made utilizing the same labor categories that will be set forth in the
solicitation.
(b) The estimate must be an independent in-house estimate and not
obtained from private firms or other outside sources. Independent
Government estimates are to be handled as privileged information and may not
be released or otherwise disclosed to persons outside the Government or to any
person without a compelling need to know. However, in solicitations for
construction contracts an estimated price range is furnished.
M-3.106-13 Funding
M-3.106-13(a) Basic Concept
(1) The basic rule on availability of appropriations made for a specific
fiscal year is that they lapse at the end of the year unless otherwise
provided by law. The obligation of funds against such appropriations
is valid only if it relates to an actual need existing within such fiscal
year. This criterion is commonly referred to as the bona fide need
principle.
(2) With respect to the proper obligation and expenditure (payments to
contractors) of fiscal year funds, each requirement must be viewed
from the standpoint of when the need arose or when the requirement
is needed. In some situations, such as requirements for supplies or
"job type" (completion form) services, a need may arise and be
contracted for in one fiscal year, but deliveries made the following
fiscal year because of lead time. The bona fide need principle may
be violated here, however, if, for example, too long a period exists
between contract award and delivery, especially for items which are
available on the market at the time needed for use.
(3) The question of meeting the bona fide need principle becomes more
acute in the purchase of services. Services of a continuing nature
which are severable can only be contractually obligated and funds
expended against the appropriation in effect at the time the service
was performed.
M-3.106-13(b) Cost-Reimbursement Term Form Contracts (Level of
Effort)
(1) Where cost-reimbursement term form contracts are used in EPA, the
following policies apply with respect to funding. This policy applies
to new contracts awarded after February 10, 1984, and options of
previously awarded contracts.
(i) All hours within a given contract period of performance must
be completed within that period. Work assignments which task
specific directions and/or order hours of effort must be
ordered and completed within the same contract period to be
valid charges to the appropriation of that period.
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(ii) Work assignments which contemplate or actually extend
beyond the contract period in which the order is placed must
be ended concurrently with the expiration of the contract
period in which the order is placed. A new work assignment to
conclude such efforts must be issued so that funds and hours
available in the new period are charged for the work
accomplished during that subsequent period.
(iii) Performance beyond the contract base period may be
accomplished by the use of options or extended by appropriate
noncompetitive procedures. The exercise of options originally
priced in solicitations is not new procurement. As such,
follow-on work assignments for work begun in the previous
contract period may begin with the issuance of a new work
assignment concurrent with the effective date of the option
period. Cost-reimbursement term contracts may include a
provision stating that, when an option to extend the contract
term is exercised, work assignments initiated in a previous
period are extended into the option period. The provision must
clearly state that hours performed and associated costs
incurred during the option period are charged to that option
period. Work assignments must have a specific completion
date and if this date extends into the option period, the work
assignment must refer to the provision discussed above. An
administrative modification may be issued to existing
contracts to incorporate the provision.
(iv) Any extensions to the term of the contract, i.e., to the base or
any of the option periods of performance, is by regulation
defined as new procurement. As such, extensions can only be
accomplished competitively or justified through current,
appropriate noncompetitive procedures. Each period of
performance (base and each option) is separate and distinct
and these procedures apply separately for extensions to each
period. Work assignments for follow-on or new work may only
be issued upon approval and execution of the term extension.
These work assignments may be issued concurrent with the
effective date of any such contract modification.
(v) To ensure that obligations in each contract period of
performance (base and each option) are proper, such periods of
performance shall be established consistent with the known
period of the appropriation(s) to be encumbered. For example,
the base period of the contract could extend from the date of
award to the expiration date of a two-year appropriation. For
a contract awarded October 1, 1983, or thereafter against a
two-year appropriation, the base period could be until
September 30, 1985. Option periods beyond this base period
may also be established consistent with anticipated periods of
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future appropriations. However, considering pricing
uncertainties beyond three years in the future, good contract
management would strongly suggest that option periods beyond
the base period be written for one year at a time.
(vi) The contract base and each option period of performance are
separate and distinct. Hours not ordered and unexpended
funds from expiring appropriations remaining at the end of
each period are not available for use in the subsequent
contract period. Funds from expiring appropriations should be
deobligated to the extent they exceed the Government's
liability. To definitively ascertain all actual allowable,
allocable, and reasonable costs requires a final audit.
Contracting Officers could order audits and close each year
separately. It is generally more efficient to only order final
audits after the conclusion of the last option period.
Normally, funds should be deobligated only after settlement of
the final contract audit.
(vii) Funds properly obligated by a Contracting Officer generally
can only be deobligated by a Contracting Officer.
Deobligation occurs when all actual costs, determined to be
allowable, allocable, and reasonable, are known and then only
to the extent beyond these valid Government liabilities. In
appropriate situations, excesses in any contract period may be
deobligated by a Contracting Officer in other ways prior to
final contract audit:
(A) Mutual agreement between the Government and the
contractor to reduce the obvious funding in excess of
anticipated approved final costs executed by bilateral
contract modifications.
(B) Settlement of an interim final audit on a particular
contract period. Settlements of these and any final audit
are executed by a bilateral (mutual agreement) contract
modification. However, should a mutual agreement not
be obtainable, settlement may be effected by a final
decision of the Contracting Officer.
(C) Termination for convenience (total or partial) where the
remaining hours are no longer needed. However,
settlement procedures require a final audit to determine
the Government's actual liability. Settlements are
executed by a bilateral contract modification or
Contracting Officer's final decision.
(viii) Contract performance periods involving appropriations with
indefinite obligation terms, commonly referred to as no-year
funds or x-year appropriations, should be consistent with sound
program and contract management needs. Contract periods
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(base and options) may be established for terms as long as
these needs dictate. Generally contract periods of up to two
years approach the limit of sound contract management.
Periods for more than two years must be approved by the
Chief of the Contracting Officer prior to issuance of the
solicitation.
(2) Suggested alternate contract methods, in lieu of cost-reimbursement
term form contracts, are as follows:
(i) Smaller contracts with definitive SOWs that can be priced as
either cost-reimbursement completion type or fixed-price
completion contracts. These types of contracts constitute
nonseverable services and may cross fiscal years, charged to
the year in which the contract was executed.
(ii) Indefinite delivery-indefinite quantity type contracts under
which severable or nonseverable delivery orders can be
written. These contracts can provide for various pricing
arrangements including fixed rates, cost-reimbursement with
completion or term forms. If the delivery orders are written
as either fixed-rate completion or cost-reimbursement
completion, they are considered nonseverable, and may cross
fiscal years. Term or LOE orders can also be written as
necessary, but these would be subject to the same restrictions
as the current LOE work assignment contracts. Creative use
of indefinite quantity contracts could be the most flexible
contractual vehicle for quick response actions against a
general SOW—similar to current work assignment LOEs.
However, the only way funds with expiring appropriations can
be obligated in one fiscal year and cross validly to a
succeeding year is by completion (nonseverable) type delivery
orders. The obligation occurs, and the Government's legal
commitment arises (beyond the contract minimum guarantee),
at the time the delivery order is issued. This is in contrast to
the LOE (term form) contract in which the obligation occurs,
and the entire estimated cost and fixed fee of the contract is
recorded as an obligation, at the time of contract award. The
issuance of work assignments then "draw down on" this initial
contract obligation. No obligation of contract funds occurs by
issuing a work assignment. The servicing Contracting Officer
can provide further details as applied to individual
requirements.
(Hi) In those circumstances in which a cost-reimbursement term
(LOE) contract with work assignments is necessary, the best
way to mitigate the effect of severable services is to write
the base contract period for the longest period possible. In
those instances where two-year funds are available, the base
period should be established from the time of award through
the available period of the appropriations). Option periods
beyond this base period may also be established consistent
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with anticipated periods of future appropriations. However,
considering pricing uncertainties beyond three years in the
future, good contract management would strongly suggest that
option periods beyond the base period be written for one year
at a time. Contracts with no-year appropriations should be set
up consistent with sound program and contract management
principles and needs.
(iv) By far the best way to minimize the effect of compliance with
the bona fide needs principle is planning requirements with as
definitive SOWs as possible. With a little more planning and
effort, SOWs may be written as cost-reimbursement
completion contracts. The test of which appropriation(s)
period or contract period that may be validly charged is
whether the contract requirement is a nonseverable need of
that period. Usually, completion efforts have SOWs that
require delivery of an end item, e.g., delivery of a report, by a
specific date. This date could validly be in a future
appropriation period if the need is clearly established and
apparent during the contract period in which the work is
ordered. The differences between a completion and term form
contract are basically that the term form contract only
provides for the contractor's best efforts at a specific number
of hours for a definite period of time. Extensions to the term
for further work is always considered new procurement and
involves cost and fee. A completion form requires a specific
end product at a required delivery date. If more time is
necessary to provide the end product, extensions are only at
cost with no fee paid. In many instances where planning and
circumstances can establish such definitve requirements,
completion form cost-reimbursement contracts may, in fact,
be better contract instruments than the LOEs.
M-3.106-13(c) Availability of Funds
(1) Fiscal Year Contracts. To effect procurements promptly upon the
beginning of a new fiscal year, it may at times be necessary to
initiate a procurement properly chargeable to funds of the new fiscal
year prior to the availability of such funds. In such cases an
Availability of Funds clause is included in the solicitation and/or
contract. This procedure generally is used only for operation and
maintenance and continuing services (such as rentals, utilities, etc.)
which are necessary for normal operation and for which the Congress
consistently appropriates funds.
(2) Contracts Crossing Fiscal Years. A one-year requirement or
indefinite-quantity contract for services funded by annual
appropriations may extend beyond the end of the fiscal year in which
it was awarded provided a minimum amount is established for the
indefinite quantity portion of the contract. The minimum must be
ordered during the period in which the appropriation is available.
However, if severable delivery orders are issued against the
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minimum, the minimum must be consumed during the period of the
appropriation's availability. Also, a contract for expert or consultant
services calling for an end product which cannot feasibly be
subdivided for separate performance in each fiscal year may cross
fiscal years.
M-3.106-13(d) Commitments
Commitment of funds will be made by the Commitment Clerk.
Commitments will be made on the Procurement Request/Order, EPA Form
1900-8, unless a moratorium has been placed on the allowance holder. If such a
moratorium has been established, the PR will be returned to the initiator
without a commitment.
M-3.106-13(e) Funding Cost-Type Contracts
When a cost-reimbursement term contract is funded by more than one
appropriation, the following procedures apply:
(1) The Project Officer must document the rationale for use of multiple
appropriations and include in the rationale an estimate of the costs to
be charged each appropriation. All program offices contributing
funds to the procurement must indicate on the rationale their
concurrence with this estimate. The Director, Headquarters
Financial Management Division, or designee, must approve the
rationale. The Project Officer must include a copy of the approved
rationale with the procurement request submitted to the Contracting
Officer.
(2) In general, a work assignment should benefit a single appropriation.
(3) The Project Officer shall indicate on the cover of each work
assignment the account number against which payments are to be
made and the basis for the finance office to charge vouchered costs
to each account number if more than one account number appears on
the work assignment.
(4) The Project Officer must assure that:
(i) The account numbeKs) on the work assignment is the same as
that cited on the contract, and
(ii) The aggregate of funds on work assignments does not exceed
amounts obligated on the contract for a particular account
number.
(5) It may be possible that a contract includes sufficient funding for the
total contract value, yet inadequate funds to cover costs billed
against work assignments associated with a particular account
number. In these cases, the Project Officer should inform the
finance office in writing which account number to charge the
excessive billed costs. The Project Officer should assure that the
program office funding the excess agrees that its account number
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will be used. The finance office will make the adjustment internally
so there is no need for the Contracting Officer to issue an
administrative contract modification. The Project Officer should
notify the Contracting Officer in writing of the adjusted amounts per
account number.
(6) The Project Officer should notify the Contracting Officer when
increases in the total contract value are expected.
(7) Prior to the end of each fiscal year covered by the contract, the
Project Officer should review the contract's funding to determine
whether the ratio of obligated funds, including any previous
adjustments, coincides with the value of the work benefiting each
appropriation. The Project Officer should inform the finance office
in writing of any adjustments that should be made to the established
ratios. The procedures in subparagraph (5) above apply when making
these adjustments, as well as when, at any time during performance,
the Project Officer anticipates the need for an adjustment. These
adjustments must be made no later than the end of the fiscal year in
accordance with the actual or best estimate of the benefit to each
appropriation.
M-3.106-14 Planning Purpose PRs (Unfunded Procurement Requests)
(a) When the Agency enters into a contract subject to the availability of
funds, the supplies or services will not be ordered or accepted by the Agency
until funds are available to the Contracting Officer for the procurement and
until the Contracting Officer has given notice to the contractor of such
availability.
M-3.106-15 Options
(a) Introduction
The acquisition regulations allow the Contracting Officer to use two types
of options: extension of period and increase in quantity. EPA's general policy
is to make use of contract options only when their use is advantageous to the
acquisition.
(b) Use of options
(1) The use of options for increased quantities of supplies or services
which exceed 50 percent of the base quantity specified in the
contract for a particular period require advance approval by the
Head of the Contracting Activity (HCA). For supply contracts,
the 50 percent limit applies only to contracts with a base quantity
of more than one.
(2) The use of option periods which, when combined with the base
contract period, results in a total contract period of performance
exceeding thirty-six (36) months require advance approval by the
Chief of the Contracting Office. In no event, can the total of the
base and option periods exceed sixty (60) months in duration.
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(c) Exercise of options
(1) Unless otherwise approved by the Chief of the Contracting
Office, all service contracts employing option periods require that
a preliminary written notice of the Government's intention to
exercise the option be furnished to the Contractor a minimum of
sixty (60) calendar days prior to the date for the exercise of the
option. Failure to provide such preliminary notice within the
timeframe established in the contract waives the Government's
right to unilaterally exercise the option and requires the
negotiation of a bilateral contract modification in order to extend
the period of performance, where such an extension is authorized.
(2) When the term of the service contract coincides with the fiscal
year and delays in receipt of authority to obligate funds for the
new fiscal year are anticipated, the Contracting Officer, if the
contract so provides, may, within 60 days after the end of the
fiscal year, unilaterally exercise an option to extend the term of
the contract. The option may be exercised only if funds become
available within the 60-day period. In the event that sufficient
funding is not available within the 60-day period, the Government
waives the right to unilaterally exercise the option, thereby
rendering any additional requirements subject to normal
competitive procurement procedures.
(3) The Contracting Officer, if the contract so provides, may, subject
to the conditions in FAR 17.204(d), 32.703-2, and 32.705-l(a),
exercise an option contingent upon the availability of funds. To
exercise such an option, the contract must contain the clause in
FAR 52.232-18, Availability of Funds. Under no circumstances
shall any action be taken which could be construed as creating a
legal liability on the part of the Government until a formal notice
of availability of funds in the form of a contract modification has
been issued by the Contracting Officer.
M-3.106-16 Government Property
M-3.106-16(a) Introduction
This section provides specific guidance on: (1) determining whether to
include in the procurement request rationale a request that the contractor be
allowed to either: (i) be provided with Government property under the
contract; (ii) obtain Government property under the contract; or (iii) use
Government property in its possession and (2) other considerations to be
addressed when the contractor will have use of Government property. Further
discussions on administration of Government property are discussed in M-6.300.
M-3.106-16(b) Definitions
Government property is classified into two main categories: real property
and personal property. Real property pertains to buildings and land. Personal
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property relates to all other types of property including such items as
equipment, desks, etc. Personal property is further subdivided into two
categories: expendable and nonexpendable. Expendable is the type of
property that is consumed in use—e.g., paper, pencils, etc. Nonexpendable
property has a continuing value and is usually considered a capital asset.
Whether the Agency has acquired property and furnished it to a contractor or
the contractor acquired property through purchase made under a
cost-reimbursement contract, EPA is concerned that funds are properly
expended, unnecessary duplication of acquisitions is avoided, and that
Government assets are controlled and accounted for. Consequently,
procedures have been established to control both the acquisition of
nonexpendable personal property by cost-reimbursement contractors and the
furnishing of such property by EPA.
(1) Accessory Items: Items which facilitate the operation of capitalized
nonexpendable equipment, but which are not essential for its
operation. (Example: remote control devices)
(2) Accountable Property: All Government-furnished or
contractor-acquired property which must be accounted for by the
contractor. Contractor records of Government property established
and maintained under the contract are the Government's official
property records.
(3) Auxiliary Items: Items without which the basic unit of capitalized
nonexpendable equipment cannot operate. (Example: motors)
(4) Condition Codes: An appraisal of current condition of accountable
property.
(5) Contaminated Property: Equipment/supplies that become
contaminated with toxics or other chemicals which render them
unsafe.
(6) Expendable Property (Supplies): Property that may be consumed or
expended in the performance of a contract. It includes such items
as: raw and processed materials, supplies, parts, small tools and
components that generally cost less than $100. Expendable property
remaining at the end of the contract must be accounted for and listed
on the final inventory.
(7) Government Property: All real and/or personal property owned by
the Government or acquired for the Government under the terms of a
contract. It includes both Government-furnished property and
contractor-acquired property as defined below:
(i) Government-furnished property: property in the possession of,
or acquired directly by the Government and subsequently
delivered or otherwise made available to the contractor; and
(ii) Contractor-acquired property: property purchased or otherwise
provided by the contractor using contract funds.
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(8) Nonexpendable Property: CAPITALIZED: Property which has a unit
cost of $500 or more including accessories; is complete in itself; does
not lose its identity or become a component part of another item
when placed in use; is of a durable nature with an expected life of 1
year or more; and must be accounted for by the contractor and
reflected in EPA property records. NONCAPITALIZED: Property
which has a unit cost of less than $500, is of a durable nature with an
expected life of 1 year or more and must be accounted for by the
contractor at the conclusion of the contract.
(9) Property Administrator: An EPA employee designated by the
Contracting Officer to administer property for contracts under which
Government property is involved. The Property Administrator is
responsible for evaluating the adequacy of the Contractors' property
policy and procedures concerning receiving and inspecting accounting
and control, obligation, maintenance, scrap and salvage, and disposal.
(10) Real Property: Includes land and rights therein, ground
improvements, utility distribution systems, buildings and structures.
(11) Sensitive Items: Supplies and equipment which cost less than $500,
and because of their nature and portability are particularly
susceptible to misappropriation. These items are accounted for by
the contractor and reflected in EPA records. (Examples: cameras,
binoculars, portable typewriters, tape recorders and calculators.)
M-3.106-16(c) Property To Be Furnished and/or Acquired Before
Contract Award
(1) Before preparation of the contract package, the Project Officer
should review equipment requirements. If equipment will be needed,
whether furnished by the Government and/or acquired by the
contractor with contract funds, the Contract Negotiator should be
advised so that property can be discussed during negotiations and
subsequently incorporated into the official contract.
(2) If title to the property is to be vested with an organization other than
EPA, the Contracting Officer should be advised so that it can be
stated in the contract property article.
(3) If the property being furnished and/or acquired is to be physically
installed at the contractor's facility which may result in subsequent
restoration and/or problems in removal after performance of the
contract, a determination regarding disposal should be made and
incorporated into the official contract at the same time the property
is authorized in the contract. Various factors concerning restoration
should be considered. For example, will the contractor's premises be
restored at Government expense? Or will the property be abandoned?
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M-3.106-16(d) Considerations for Purchase Versus Rent/Lease
Determinations
(1) Consideration should be given whether to lease or purchase
equipment based on a caseyby-case evaluation of comparative costs
and other factors. Evaluation will indicate which of the acquisition
methods will provide greater savings to the Government while
satisfying user requirements.
(2) The following factors, as a minimum, should be considered.
Estimated length of the period the equipment is to be used and the
extent of use within that period; financial and operating advantages
of alternate types and makes of equipment; cumulative rental
payments for the estimated period of use, net purchase price,
transportation and installation costs; and potential obsolescense of
the equipment because of imminent technological improvements.
(3) The following additional factors should be considered, as appropriate,
depending on the type, cost, complexity and estimated period of use
of the equipment: availability of purchase options, potential for use
by other agencies after its use by the acquiring agency is ended,
trade-in or salvage value, imputed interest, and availability of a
servicing capability especially for highly complex equipment.
(4) Acquisition methods
(i) Generally the purchase method is appropriate if the equipment
will be used beyond the point in time when cumulative leasing
costs exceed the purchase price.
(ii) The lease method is appropriate if it is to the Government's
advantage under such circumstances. The lease method may
also serve as an interim measure when the circumstances
require immediate use of equipment to meet program or system
goals, but do not currently support acquisition by purchase. If a
lease is justified, at least with option to purchase may be
prefereable. Generally, a long-term lease should be avoided.
M-3.106-16(e) Required Sources of Supplies and Services
(1) Federal agencies shall satisfy requirements for supplies and services
from or through the sources and publications listed below in
descending order of priority unless specified otherwise. Contractors
holding cost-reimbursement contracts may use the Federal sources of
supply and services when authorized to do so by the terms of the
contract.
(i) Supplies
(A) Agency inventories
(B) Excess from other agencies
(C) Federal Prison Industries, Inc.
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(D) Procurement lists available from the Committee for
Purchase from the Blind and Other Severely Handicapped
(E) Wholesale supply sources, such as stock programs of the
General Services Administration, the Defense Logistics
Agency, the Veterans Administration and military
inventory control points
(F) Mandatory Federal Supply Schedules
(G) Optional Use Federal Supply Schedules
(H) Commercial sources, including educational and nonprofit
institutions
(ii) Services
(A) Procurement lists of services available from the
Committee for Purchase from the Blind and Other
Severely Handicapped
(B) Mandatory Federal Supply Schedules and mandatory GSA
term contracts for personal property rehabilitation
(C) Optional Use Federal Supply Schedules and optional GSA
term contracts for personal property rehabilitation
(D) Federal Prison Industries or other commercial sources,
including educational and nonprofit institutions
M-3.106-16(f) Acquisition of Excess Property
(1) If GFP is needed for contract performance, in-house property sources
within the Project Officer's sponsoring program should be checked
first for availability. If the item is available, both the Contracting
Officer and Property Administrator should be notified so that the
contract and property records can be modified. The Accountable
Officer should also be notified to arrange with the Property
Administrator a detailed description of the item. Those Project
Officers at locations other than the Property Administrator's station
should first contact their Accountable Officer for a review and then
forward it to the Property Administrator. The Property
Administrator will first review the EPA excess catalog for
availability within EPA. If the items are not available within EPA,
the Property Administrator will coordinate with GSA regional offices
in an attempt to locate and transfer the items to EPA. GSA Form
1539, "Request for Excess Personal Property," is prepared by the
Property Administrator in locating excess from GSA. This method is
more satisfactory than reviewing GSA excess property catalogs as it
enables property transfer before it appears in the excess catalogs. If
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the item is available through GSA, a Procurement Request/Order will
then be required with accounting information and approvals. This
requisition will then be used as an authorization to prepare SF-122,
"Transfer Order Excess Personal Property." The accounting
information is required in the event any packing, crating, and
shipping charges arise from the physical transfer of this property.
(2) Occasionally, EPA may be responsible for an overseas return charge
if the materiel was located in a foreign country. If so, a
Miscellaneous Obligation Document is also required. This document
should be forwarded to the appropriate Financial Management
Office. Notification of any such charge will be given to EPA before
transfer by GSA.
M-3.106-16(g) Procedure
If in developing the requirement it becomes evident that it is
advantageous to either provide the contractor with property or allow the
contractor to acquire it under the contract, then the Project Officer must
include a Needs Justification in the procurement rationale which justifies the
proposed action. The same procedure is applicable when a contract is to be
modified to either allow for the provision of Government-furnished property or
acquisition of property under a prime or subcontract.
M-3.106-16(h) Content of Needs Justification
(1) The Contracting Officer will not authorize a contractor to (i) acquire
property at Government expense, (ii) obtain Government-furnished
property, or (Hi) use Government-owned property in its possession
until the Chief Officer, at Division level or above, responsible for
management of the program/project involved, submits to the
Contracting Officer a written justification of need to provide the
property.
(2) As a minimum, the justification of need must:
(i) Identify the specific program and project for which the
property is required.
(ii) Identify the type, quantity and estimated cost (including any
transportation or installation costs) of each item of property
required.
(iii) Explain why the property is essential for contract performance.
(iv) Explain why it is in the interest of the Government to provide
the property rather than to require the Contractor to provide
the property at no direct cost to the contract.
(v) Identify the location, if known, of the Contractor's facility at
which the property will be used, and the Contractor's
personnel responsible for acquisition and management of the
property.
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(vi) For property to be acquired by the Contractor at Government
expense, include a certification that no in-house excess
property is available and include the concurrence of the local
property office.
(vii) For equipment to be acquired by the Contractor at
Government expensey include a lease vs. purchase analysis (see
Federal Acquisition Regulation Subpart 7.4).
(3) A justification of need is required regardless of whether the need for
the property is determined:
(i) at development of the requirement;
(ii) at proposal evaluation or contract negotiations; or
(iii) after contract award.
M-3.106-16(i) Vesting Title to Educational Institutions
EPA is authorized pursuant to Public Law 95-224 to transfer title of
equipment purchased with research contract funds to educational institutions
or nonprofit organizations whose primary purpose is the conduct of scientific
research. (This situation does not apply to Government-furnished property.)
EPA may vest title of property in an educational institution for items with an
acquisition cost of less than $1,000 if the appropriate Government property
clause is incorporated into the contract. During the contract, EPA will retain
title to items with an acquisition cost greater than $1,000. Shortly after
contract expiration, the Project Officer will be requested to advise the
Property Administrator whether equipment should be transferred to the
contractor or retained by the Government. The appropriate Government
property clause permits the Contracting Officer to transfer title of
contractor-acquired equipment to the contractor at any time during the term
of the contract or upon its completion/termination. The Property
Administrator will request the Contracting Officer's recommendation/
concurrence for the transfer of title of the item(s). Written notification will
be provided to the contractor by the Contracting Officer. If the appropriate
Government property clause is not incorporated into the original contract to
allow for this type of transaction, normal disposal regulations will govern
disposal procedures.
M-3.106-16(j) Joint Use of Property by Contractor and EPA
Property furnished to on-site contractors should be itemized in the
"Government-Furnished Property" clause of the contract. As a result of this
clause, the contractor becomes responsible for the items listed and for any
other items that are acquired. Government property is only to be used for the
contract that authorizes its use, and then only as required for satisfactory
completion of the contract scope of work. Property itemized in a contract as
Government-furnished should be used by contractor personnel only. If
property is to be used by both contractor and EPA personnel, the
"Government-Furnished Property" clause within the contract should stipulate
the percentage of time the property is to be used by the contractor.
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M-3.106-16(k) Use of Property Purchased with Funds of Another Agency
The Project Officer must assure that the Government property clause
within the contract stipulates ownership of property purchased with funds
from another Agency that are being used on an EPA contract. The Project
Officer must also advise the Property Administrator just before contract
award of any special conditions that may exist concerning the use of the
property (i.e., who will hold title to the property, who will be accountable for
the property, whether EPA will be responsible for custodialship, disposal of the
property, etc.).
M-3.106-16Q) Contractor Use of Government Vehicles
Contractors can be authorized to use Government vehicles from the GSA
Interagency Motor Pool when a special clause is included in the contract. The
Project Officer must submit to the Contracting Officer, with a copy to the
Property Administrator, a determination and findings and a justification of
need for the use of such vehicle. The Property Administrator or the
appropriate Accountable Officer will arrange with the GSA Interagency Motor
Pool for assignment of the vehicle. The Project Officer must assure that all
contract employees using the vehicle obtain Government driver's licenses. A
list of those employees should be forwarded to the Contracting Officer and the
Property Administrator.
M-3.106-16(m) Contractor Use of GSA Self-Service Stores and Depots
Contractors who have cost-reimbursement type contracts can be
authorized to acquire materiel from GSA, Federal Supply Service, (see
M-3.106-16(e)) when a special clause is included in the contract. The Federal
Supply Service is responsible for the procurement and supply of a wide range
of common-use items that are available to customer agencies from a network
of supply depots and self-service stores. Upon notification from the
Contracting Officer, the Property Administrator will obtain the necessary
codes, and GSA will supply the contractor with catalogs and instructions for
use.
M-3.106-17 Quality Assurance
A review of all extramural project procurements must be conducted in
order to determine the applicability of Agency Quality Assurance
requirements for all contracts in excess of $25,000 which have the following
object classification codes in the accounting and appropriation data:
25.32 Research and Development Contracts
25.35 Program Contracts
25.47 Occupational Health Monitoring
25.49 Occupational Health and Safety Sciences
25.70 Other Interagency Agreements
26.01 Laboratory Supplies
31.01 Scientific and Technical Equipment
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The determination of QA applicability shall be certified on a Quality
Assurance Review (QAR) Form as shown in Exhibit 3-8 or equivalent. The
QAR Form shall contain the signatures of the Quality Assurance Officer (or
designee) and the Project Officer, and the completed Form must accompany
the Procurement Request. The Contracting Office will not process a
Procurement Request unless the signed QAR Form is included.
The QAR Form will tell the Contracting Officer if a QA Program or QA
Project Plan is required as part of the offerer's proposal and if a pre-award
audit is to be part of the evaluation process. Based upon the information
provided, the Contracting Officer will include the appropriate EPAAR
provisions on Quality Assurance in the solicitation.
M-3.106-17(a) Quality Assurance Program Plans
The Quality Assurance Program Plan is a qualitative statement of the
offerer's capability to conduct a viable QA program and should be submitted
as a separate and identifiable part of the technical proposal. It should address
the following:
(a) A statement of policy concerning the organization's commitment to
implement a Quality Control/Quality Assurance program to assure
generation of measurement data of adequate quality to meet the
requirements of the Statement of Work.
(b) An organizational chart showing the position of a QA function or
person within the organization. It is highly desirable that the QA
function or person be independent of the functional groups which
generate measurement data.
(c) A delineation of the authority and responsibilities of the QA function
or person and the related data quality responsibilities of other
functional groups of the organization.
(d) The type and degree of experience in developing and applying Quality
Control/Quality Assurance procedures to the proposed sampling and
measurement methods needed for performance of the Statement of
Work.
(e) The background and experience of the proposed personnel relevant to
accomplish the QA specifications in the Statement of Work.
(f) The offerer's general approach for accomplishing the QA
specifications in the Statement of Work.
M-3.106-17(b) Quality Assurance Project Plans
The Quality Assurance Project Plan (QAPP) defines the data quality
objectives for a project, identifies the critical measurements to be performed,
and discusses the various QA/QC activities to be conducted during the
measurement portion of the work. The QAPP is quantitative in content and
should be a specific delineation of the offerer's approach for accomplishing
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the QA specifications in a Statement of Work. As in the case of the QA
Program Plan, the QA Project Plan may be required as part of the technical
proposal. Alternatively, the QAPP may be required as a deliverable under the
contract. The form and content of the QAPP (unless specified otherwise) is as
follows:
(a) Title page with provision for approval signatures.
(b) Table of contents.
(c) Project description.
(d) Project organizations) and responsibilities.
(e) Quality Assurance objectives for measurement data in terms of
precision, accuracy, completeness, representatives and comparability.
(f) Sampling procedures.
(g) Sample custody.
(h) Calibration procedures, references, and frequency.
(i) Analytical procedures.
(j) Data reduction, validation, and reporting.
(k) Internal quality control checks and frequency.
(1) Quality Assurance performance audits, system audits, and frequency.
(m) Quality Assurance reports to management.
(n) Preventive maintenance procedures and schedules.
(o) Specific procedures to be used in routinely assessing data precision
and accuracy, representativeness, comparability, and completeness of
the specific measurement parameters involved.
(p) Corrective action.
If the QA Project Plan is required as a contract deliverable, the contract
must specify how many copies and when the QAPP must be submitted. The
contract must also specify how many days the Government has to review the
QAPP. When the QAPP has been approved, the Contracting Officer will
incorporate the QAPP by issuance of a change order to the contract. The
contractor will submit a request for an equitable adjustment to the contract in
response to the change order. Depending on the nature of the change, the
equitable adjustment may increase, decrease, or not change at all, the cost of
the contract, or impact the delivery schedule.
M-3.106-17(c) Pre-A ward Audits
Offerers determined to be in the competitive range based on the initial
evaluation may be required to submit to a qualitative Technical Systems
Audit, if required in the solicitation. The purpose of the systems audit will be
to assess the adequacy of the offerer's quality control program as related to
the scope of work for the contract. The systems audit will be performed by
the EPA QA Officer or his designee.
Some or all of the following areas of concern will be addressed, as
appropriate, to the contract scope and goals: (1) facilities, (2) equipment,
(3) methods, (4) Quality Control Systems, (5) recordkeeping, (6) data
validation, (7) maintenance and calibration procedures, (8) reporting,
(9) adherence to documented procedures, (10) procurement and inventory
procedures, (11) personnel training, and (12) feedback and corrective action.
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M-3.106-18 Reports
M-3.106-18U) Introduction
Reports are critical to the monitoring of a contract. They provide the
raw data for decision making. Failure to include a reporting requirement can
later prove to be a costly mistake.
M-3.106-18(b) Types of Reports
(1) The two most commonly utilized reports are progress and financial
management reports. Collectively, these reports inform the Project
Officer of the expenditure rate under a cost-reimbursement contract
and the progress being made towards contract performance. They
are what may be referred to as the "universal tools" in the Project
Officer's contract monitoring tool box.
(2) The Project Officer must be aware that virtually any reporting
requirement may be requested of the contractor. Where there is a
need for unique content or frequency of reporting, it should be
indicated in the procurement request. Reports by task/work
assignments as well as charts, graphs, and other written displays may
be obtained. The requirement for a work plan may also be specified.
The overriding concern that should be addressed in deciding what
reports and report content should be obtained is: what are the
minimum informational needs I must have to maximize the chances
of successful contract completion?
M-3.106-18(c) Considerations in Use of Reports
(1) There are many considerations to address in determining the type and
content of reports. However, there are a couple of simple principles
that should be kept in mind. The first is: the greater the percentage
of cost risk assumed by the Government [e.g., cost-reimbursement
contracts (see M-3.106-4)], the greater the need for reports. The
second is: financial management reports are not utilized in
fixed-price contracts; however, progress reports may be used.
(2) Considerations in determining the use, type, and frequency of reports
are as follows:
(i) contract type;
(ii) dollar value;
(iii) criticality of the project;
(iv) complexity of the work;
(v) performance records of firms within the industry; and
(vi) internal reporting requirements.
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Plan may then be utilized to track the contractor's quality progress
in the tasks assigned. The QA Project Plan contains an element that
may be used to require quality control reports to the Project
Officer. Periodic review of quality control will be helpful to the
Project Officer in assessing the work progress.
M-3.106-18(c) Considerations in Use of Reports
(1) There are many considerations to address in determining the type and
content of reports. However, there are a couple of simple principles
that should be kept in mind. The first is: the greater the percentage
of cost risk assumed by the Government [e.g., cost-reimbursement
contracts (see M-3.106-4)], the greater the need for reports. The
second is: financial management reports are not utilized in
fixed-price contracts; however, progress reports may be used.
(2) Considerations in determining the use, type, and frequency of reports
are as follows:
(i) contract type;
(ii) dollar value;
(iii) criticality of the project;
(iv) complexity of the work;
(v)performance records of firms within the industry; and
(vi) internal reporting requirements.
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One should keep in mind that reports are a part of the cost or price the
contractor proposes. Indiscriminate requirements are a waste of both time
and money.
M-3.106-18(d) Specifying Reports
Specify what types of reports—monthly or quarterly progress, or financial
or other certification of satisfactory progress—will be required and the
number of copies of each that are necessary. Be sure to specify the number of
days needed for review of reports submitted and period for re-submittal.
Specify the quantity of draft and final reports to be delivered by the
contractor. However, remember the printing requirements of the Government
Printing and Binding Regulations, published by the Joint Committee on
Printing, Congress of the United States, limit printing (see FAR Subpart 8.8).
M-3.106-19 Acquisition of Nonseverable Facilities
M-3.106-19(a) Definition
For the purpose of this section, nonseverable or permanent improvements
are considered to be improvements made to non-Government-owned real
property.
M-3.106-19(b) Background
Comptroller General Decisions (42 Com p. Gen. 480 and 46 Com p. Gen. 24)
have established the rule that appropriated funds ordinarily may not be used
for permanent improvements to land not owned by the Government unless
specifically authorized by law or unless certain conditions are present. Apart
from the principles established by 42 Comp. Gen. 480, above, EPA possesses
specific statutory authority, with respect to certain research activities, to use
appropriated funds for permanent improvements to non-Government realty
within the limitations set forth in 10 U.S.C. 2353. (See 42 U.S.C. 241—Public
Health Service Act; 42 U.S.C. 3253(b)—Solid Waste Disposal Act; and 42
U.S.C. 1857b-l—Clean Air Act.)
M-3.106-19(c) Types of Improvements
Improvements to non-Government realty may be required for a number of
reasons, including, but not limited to:
(1) Construction of a facility required to accomplish the objective of the
contract;
(2) Construction of a concrete pad for use as a temporary storage
facility.
M-3.106-19(d) Policy
Environmental Protection Agency cost-reimbursement contracts under
which permanent improvements will be affixed to non-Government realty, and
all contracts under which Government property will be furnished to or
acquired by the contractor and affixed to non-Government realty must be
consistent with the standards of either 10 U.S.C. 2353 (if applicable) or 42
Comp. Gen. 480.
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M-3.106-19(e) Determination and Findings (D&F)/Approval Requirements
(1) Prior to award of a contract of the nature described in M-3.106-19(d)
above, a determination and findings document must be prepared by
the Contracting Officer and forwarded to the Director, Procurement
and Contracts Management Division.
(2) D&F and approval requirements do not apply to improvements which
are incidental to or essential for the effective accomplishment of
removal or remedial "superfund" actions (P.L. 96-510). For all other
P.L. 96-510 actions, D&F and approval requirements apply.
M-3.106-19(f) Project Officer Informational Input to D&F
xThe following information must be provided by the Project Officer for
inclusion into the CO's Determination and Findings:
(1) A description of the procurement, including identification of the
funds to be used, contract type, property or services being procured,
name of Contractor, and any urgency considerations or special
circumstances.
(2) A description of the research, development, or test facilities or
equipment, or other improvement to be provided to or acquired by
the Contractor at Government expense. This description shall
include the estimated cost of the improvement; information
regarding ownership of the realty to which the improvement will be
affixed; whether the improvement is severable from the realty
without unreasonable expense or loss of value; whether the proposed
improvement has general utility apart from performance of the
instant contract; and an explanation of why the proposed
improvement is necessary for performance of the contract.
M-3.106-20 Procurement Request Approvals
(a) EPA management has established internal controls whereby certain
goods and services require clearances and approvals prior to their acquisition.
(b) It must be kept in mind that from time to time the Chief Executive
and other responsible Executive Agencies place temporary moratoriums on
specific supplies or equipment. Consequently there may at times be other
constraints placed on the acquisition of supplies or equipment. It is advisable
to check with your Contracting Officer at the time of PR development to
determine if any moratoriums are in existence.
(c) Exhibit 3-9 contains a listing of all current approvals and clearances.
M-3.106-20(a) Printing and Binding
(1) The Government Printing and Binding Regulations, published by the
Congressional Joint Committe on Printing, place certain restrictions
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on sources that may be considered for obtaining printing and binding
services outside the Government Printing Office (GPO). The
regulations establish precise definitions for "printing, composition,
microfilm, duplicating, and copying" and provide certain numerical
thresholds beyond which the approval of the Joint Committee on
Printing is required, should the Government or Agency desire to use
other than the GPO. An example of provisions for duplicating and
copying that require these services to be provided by GPO, unless
there are exceptional circumstances, is as follows:
(i) Work exceeding 5,000 production units of any one page, and
work exceeding 25,000 production units in the aggregate of
multiple pages, shall not be done without prior authority of: (a)
the central printing and publications management organization
as provided in the regulation; or (b) the Joint Committee on
Printing.
(ii) Duplication of documents reproduced in color.
(2) Provisions also are made for quarterly reporting to the Joint
Committee on Printing, describing all work that exceeds the
applicable thresholds. In EPA, the central printing and publications
management organization is the General Services Branch, PM-215, in
the Facilities and Support Services Division.
M-3.106-2(Xb) Questionnaires - Forms
As a result of P.L. 90-620, no Federal agency may conduct or sponsor the
collection of information on identical items from 10 or more public
respondents without the prior approval and clearance of the Office of
Management and Budget (OMB). If it is known that a survey will be required
under a proposed contract, the initiating project office must undertake
clearance action either before or at the same time the Procurement
Request/Requisition is forwarded to the Procurement and Contracts
Management Division. If an unanticipated survey develops during the period of
contract performance, the contractor is prohibited from beginning the survey
without OMB approval All such clearance records must be routed from the
initiating office to the EPA Regulation and Information Management Division.
A copy of the clearance must be forwarded to the Contracting Officer.
M-3.106-20(c) Automatic Data Processing (ADP)
(1) ADP Equipment Definition
ADP Equipment (ADPE) means general purpose, commercially
available automatic data processing. These devices are the
components and the equipment systems configured from them
together with software, regardless of use, size, capacity, or price,
that are designed to be applied to the solution or processing of a
variety of problems or applications.
Included are:
(i) Digital, analog, or hybrid computers
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(ii) Auxiliary equipment, such as plotters, data conversion
equipment, source data automation equipment, magnetic tape,
card or cartridge typewriters, computer input/output
microfilm, or memory, either cable connected, wire
connected, or stand alone, and whether selected or acquired
with a computer or separately
(iii) Punched card machines
(iv) Data transmission or communications, including front-end
processors, computer terminals, sensors, and other similar
devices, designed primarily for use with a configuration of
ADPE.
(2) Software Definition
Software means: (i) pre-packaged, commercially available,
proprietary computer programs; and (ii) data products specifically
designed to make use of and extend the capabilities of ADPE. This
encompasses commercially available operating systems or
applications programs, computer readable data collections, and
directly related technical assistance for installation, training,
conversion, documentation, and maintenance of the programs or data
products. This definition also includes commercially available
programs and data products for word processing equipment as well as
office automation or general purpose ADPE.
(3) ADP Services and ADP-Support Services Definition
(0 ADP services means the computation or manipulation of data in
support of administrative, financial, communications,
scientific, or other similar Federal Agency data processing
applications. It includes teleprocessing (including remote
batch) and local batch processing.
(ii) ADP-support services means source data entry, conversion,
training, studies, facility management (other than for central
facilities managed by MIDSD, RTP), systems analysis and
design, programming, and equipment operations that are
ancillary and essential to agency ADP activities.
(4) ADP Equipment Maintenance Service Definition
ADPE maintenance service means those examination, testing, repair,
or part replacement functions performed to:
(i) Reduce the probability of ADPE malfunction (commonly
referred to as "preventive maintenance")
(ii) Restore to its proper operating status a component of ADPE
that is not functioning properly (commonly referred to as
"remedial maintenance")
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(iii) Modify the ADPE in a minor way (commonly referred to as
"field engineering change" or "field modification").
M-3.106-20(d) Foreign Research Contracts
All proposed contracts involving research projects to be conducted in a
foreign country by a foreign contractor must have clearance from the
Department of State in order to determine the consistency of such projects
with U.S. foreign policy objectives. This clearance should be requested by the
initiating project office prior to negotiations. All such requests to the
Department of State will be processed by the EPA Office of International
Activities.
M-3.106-20(e) Management Consulting Services
(1) As defined by FAR 37.202, "consulting services" means services of a
purely advisory nature relating to the Governmental functions of
agency administration and management and agency program
management. These services are normally provided by persons and/or
organizations considered to have knowledge and special abilities that
are not generally available within the agency. The services of
consultants may be used to obtain outside points of view in order to
avoid too limited judgment on critical issues or to obtain advice
regarding developments in industry, university, or foundation
research. Consultants provide only analysis or advice regarding
agency or program policy, strategy, performance, or organization.
Consultants do not perform operating functions or supervise the
performance of operating functions. Operating functions involve
work that contributes directly to the achievement of the fundamental
goals of the organization, whereas staff or advisory functions
contribute indirectly to the achievement of these goals. For those
procurements in which several different types of services are
required and the primary purpose of the procurement is to obtain
services of a consulting nature, as opposed to operationally oriented
technical support services, the procurement shall be considered as a
management consulting service procurement.
(2) Examples of management consulting services, as distinguished from
other types of services, are set forth in Exhibit 3-10. These examples
are provided in order to assist in the identification of a management
consulting service procurement.
M-3.106-20(f) Protective Services
(1) Protective services include those services or kinds of equipment
required for the physical security of a facility or installation: for
example, guard protection, security alarms, security filing cabinets
(safes), security fences or barriers, monitoring and detection devices,
etc.
(2) Physical security includes those measures employed to provide
protection against security hazards for personnel, property,
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Government funds and negotiable instruments, classified national
security information and material, proprietary information, and
facilities.
(3) Security hazards are conditions which may result in personal injury or
loss of life; loss, damage, or destruction of property; loss of
Government funds or negotiable instruments; loss or compromise of
classified national security information and material, or of
proprietary or Governmental information, or disruption of the
activities of the Agency or facility.
M-3.106-20(g) Capital Equipment and Fixtures
Capital equipment and fixtures are considered to be nonexpendable
equipment which: is complete in itself; does not lose its identity or become a
component of another item when placed in use; and is of a durable nature with
an expected life of one year or more. Such property is reflected in official
Government property records.
M-3.106-2(Xh) Protection of Human Subjects
Human subjects are to be protected when a study, grant, contract, Public
Law 480 Project, or other agreements or extensions thereto or modifications
thereof, wholly or partially sponsored or funded by EPA, or in which EPA has
an active interest, involves exposing human subjects to the possibility of
injury, including physical or psychological injury, as a consequence of
participation of a subject in a testing activity in which the subject is
purposefully exposed to chemicals, physical conditions, or other environmental
conditions being tested. These provisions do not apply to (0 opinions,
questionnaires or the solicitation of information about past events, or (ii) the
taking of blood, urine, mother's milk, nonviable fetus tissues or human tissue
samples for the conduct of any medical observations where such testing is not
preceded by and/or is not to be followed by purposeful exposure of the subject.
M-3.106-20(i) Word Processing Equipment
Although GSA Bulletin FPMR A-79 reclassified word processing
equipment from FSC Group 70 (General Purpose Automatic Data Processing
Equipment) to FSC Group 74, Class 7435 (Office Information System
Equipment), the procurement approvals and clearances requirements
established for ADP equipment and services remain in effect for word
processing equipment.
M-3.106-20(j) Personal Vis-A-Vis Non-Personal Services
(1) Definition of Service Contract
(i) A service contract is one which calls directly for a contractor's
time and effort rather than for a concrete end product. An
incidental report is not considered a concrete end product if the
primary purpose of the contract is to obtain the contractor's
time and effort and the report is merely incidental to this
purpose.
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(ii) Service contracts are generally found in areas involving the
following:
• maintenance, overhaul, repair, servicing, rehabilitation,
salvage, and modernization or modification of supplies,
systems and equipment;
• maintenance, repair, rehabilitation, and modification of real
property;
architect-engineering;
expert and consultant services;
installation of equipment obtained under separate contracts;
operation of Government-owned equipment, facilities, and
systems;
engineering and technical services;
housekeeping services;
transportation and related services;
training and education;
medical services;
photographic, printing, and publication services;
communications services;
test services;
data processing;
warehousing;
auctioneering;
arbitration;
stevedoring; and
research and development.
(2) Personal Services and Nonpersonal Services
(i) The Civil Service laws and regulations and the Classification
Act lay down requirements which must be met by the
Government in hiring its employees, and establish the incidents
of employment. In addition, personnel ceilings have been
established for the Agency. These laws and regulations shall
not be circumvented through the medium of "personal services"
contracting, which is the procuring of services by contract in
such a manner that the contractor or employees are in effect
employees of the Government. The Contracting Officer is
responsible for assuring implementation of this policy by
considering the criteria set forth below, before entering into
any service contract.
(ii) On the other hand, contracts for nonpersonal services, properly
issued and administered, represent an approved resource for the
Agency in the accomplishment of its programs.
(3) Criteria for Recognizing Personal Services
There are no definite rules for characterizing particular services as
"personal" or "nonpersonal." There are many factors involved, all of
which are not of equal importance. The characterization of services
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in a particular case cannot be made by simply counting factors, but
can only be the result of a balancing of all the factors in accordance
with their relative importance. The Contracting Officer will
consider the following factors as well as any others which are
relevant (some of the following factors include parenthetical
explanations or qualifications which indicate the type of judgment
that the Contracting Officer will exercise):
(i) the nature of the work:
— to what extent the Government can obtain civil servants to
do the job, or whether the contractor has specialized
knowledge or equipment which is unavailable to the
Government (this is a factor which might be useful in a
doubtful case, but should not in itself create doubt about
services which are otherwise clearly nonpersonal);
—to what extent the services represent the discharge of a
Governmental function which calls for the exercise of
personal judgment and discretion on behalf of the
Government (this factor, if present in a sufficient degree,
may alone render the services personal in nature); and
— to what extent the requirement for services to be performed
under the contract is continuing rather than short-term or
intermittent (this is a factor which might be useful in a
doubtful case, but should not in itself create doubt about
services which are otherwise clearly nonpersonal);
(ii) contractual provisions concerning the contractor's employees
(in considering the following, it should be noted that
supervision and control of the contractor or employees, if
present in a sufficient degree, may alone render the services
personal in nature)
— to what extent the Government specifies the qualifications
of, or reserves the right to approve, individual contractor
employees (but granting or denying security clearance and
providing for necessary health qualifications are always
permissible controls over contractor employees; also, it is
permissible to some extent to specify in the contract the
technical and experience qualifications of contractor
employees, if this is necessary to assure satisfactory
performance);
—to what extent the Government reserves the right to assign
tasks to and prepare work schedules for contractor
employees during performance of the contract (this does not
preclude inclusion in the contract, at its inception, of work
schedules for the contractor, or the establishment of a time
of performance for orders issued under a requirements or
other indefinite delivery-type contract):
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— to what extent the Government retains the right (whether
actually exercised or not) to supervise the work of the
contractor employees, either directly or indirectly;
—to what extent the Government reserves the right to
supervise or control the method in which the contractor
performs the service, the number of people employed, the
specific duties of individual employees, and similar details
(however, it is always permissible to provide in the contract
that the contractor's employees must comply with
regulations for the protection of life and property; also, it is
permissible to specify a recommended, or occasionally even
a minimum, number of people the contractor must employ,
if this is necessary to assure performance—but in that event
it should be made clear in the contract that this does not in
any way minimize the contractor's obligation to use as many
employees as are necessary for property contract
performance);
— to what extent the Government will review performance by
each individual contractor employee, as opposed to
reviewing a final product on an overall basis after
completion of the work;
—to what extent the Government retains the right to have
contractor employees removed from the job for reasons
other than misconduct or security;
(iii) other provisions of the contract:
— whether the services can properly be defined as an end
product;
— whether the contractor undertakes a specific task or project
that is definable either at the inception of the contract or
at some point during performance, or whether the work is
defined on a day-to-day basis (however, this does not
preclude use of a requirements or other indefinite
delivery-type contract, provided the nature of the work is
specifically described in the contract, and orders are
formally issued to the contractor rather than to individual
employees);
— whether payment will be for results accomplished or solely
according to time worked (this is a factor which might be
useful in a doubtful case, but should not in itself create
doubt about services which are otherwise clearly
nonpersonal); and
—to what extent the Government is to furnish the office or
working space, facilities, equipment, and supplies necessary
for contract performance (this is a factor which might be
useful in a doubtful case, but should not in itself create
doubt about services which are otherwise clearly
nonpersonal); and
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(iv) Administration of the contract:
— to what extent the contractor's employees are used
interchangeably with Government personnel to perform the
same functions;
— to what extent the contractor employees are integrated into
the Government's organization structure; and
— to what extent any of the elements in (i) and (ii) above are
present in the administration of the contract, regardless of
whether they are provided for by the terms of the contract.
M-3.106-20(k) Other Specific Approvals
Approvals and clearances are dynamic areas which change regularly.
Consequently, it is advisable to query the Contracting Officer as to recent and
yet-to-be-documented requirements.
M-3.106-20(1) Management Approvals
Exhibit 3-9, at the end of this chapter, contains the routing of PRs for
specific goods or services and those of particular dollar value that require EPA
management consent.
M-3.106-21 Rights in Data and Copyrights
M-3.106-2l(a) Introduction
It is necessary for EPA, in order to carry out its missions and programs, to
acquire or obtain access to many kinds of data produced during or used in the
performance of its contracts to meet programmatic and statutory
requirements, including regulatory activities. At the same time, EPA
recognizes that its contractors may have a proprietary right or other valid
economic interest in certain data resulting from private investment, and that
protection from unauthorized use and disclosure of this data is necessary in
order to prevent the compromise of such property right or economic interest,
avoid jeopardizing the contractor's commercial position, and maintain EPA's
ability to obtain access to or use of such data. The protection of this data by
EPA is necessary to encourage qualified contractors to participate in EPA
programs and apply innovative concepts to such programs.
3.106-2 Kb) Policies and Procedures
Subpart 1527.70 of the Environmental Protection Agency Acquisition
Regulations (EPAAR) set forth specific policies, procedures, solicitation
provisions, and contract clauses relating to the acquisition of data and the
rights in data or copyrights relative thereto.
3.106-2 l(c) Acquisition of Data
It is important for Project Officers to recognize that acquisition of data
involves not only the identification and definition of the data to be acquired
and the circumstances of its use, but also the rights of the Government to the
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use of such data. In fact, in many cases, the Government is acquiring the right
to use of the data rather than title to the data itself. It is EPA's practice to
identify and define its data requirements to the extent possible and
appropriate in time to be included in the statement of work (SOW) which
becomes the heart of both the solicitation and the contract. Recognizing that
this may not always be feasible, EPA has made provisions for the acquisition
of data subsequent to award of the contract. In either event, since
preparation, maintenance, and storage of data generally represents a
substantial expense to both the Government and the Contractor, data
requirements shall be kept to a minimum consistent with program needs.
3.106-21(d) Definitions
Following are definitions of various terms as they are used in the EPAAR:
(1) "Computer software" means computer programs, computer data
bases, and their documentation.
(2) "Data" means recorded information, regardless of form or media and
includes computer software. It does not include information
incidental to contract administration such as financial, business, or
management information.
(3) "Form, fit, and function data" means data relating to, and sufficient
to enable, physical and functional interchangeability; as well as data
identifying source, size, configuration, mating and attachment
characteristics, functional characteristics, and performance
requirements.
(4) "Limited rights" means the rights of the Government in limited-rights
data, as set forth in a Limited Rights Notice if included in the data
rights clause of the contract.
(5) "Limited-rights data" means data that embodies trade secrets or is
commercial or financial and confidential or privileged to the extent
that such data pertains to items, components, or processes developed
at private expense, including minor modifications thereof.
[Contracting Officers may, with the concurrence of the Project
Officer, use the following alternate definition: "Limited-rights data"
means data developed at private expense that embodies trade secrets
or is commercial or financial and confidential or privileged.]
(6) "Restricted computer software" means computer software developed
at private expense and that is a trade secret, or is commercial or
financial and confidential or privileged, or is published copyrighted
software.
(7) "Restricted rights" means the right of the Government in restricted
computer software as set forth in a Restricted Rights Notice if
included in a data rights clause of the contract or as otherwise may
be included or incorporated in the contract.
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(8) "Unlimited rights" means the right of the Government, without
additional cost to the Government, to use, disclose, reproduce,
prepare derivative works, distribute copies to the public and peform
publicly and display publicly, in any manner and for any purpose, and
to have or permit others to do so.
3.106-2 l(e) Delineating the Government's and the Contractor's Rights
All contracts which involve the acquisition of data discussed and defined
above must contain clauses which define the respective rights of both the
Government and the Contractor regarding such matters as the use, duplication
and disclosure. The type of contract, the particular subject matter of the
contract, or the intended use of the data, must be considered in selecting the
appropriate contract clause. It is therefore essential that all Project Officers
whose acquisition includes data be familiar with the various clauses so that
they may assist the Contracting Officer in selecting the clause which best
serves both the Government and the program being supported. Following is a
brief general discussion of the various clauses. Their full text is contained in
EPAAR Temporary Regulation 1 (effective date: July 15, 1984) and may be
obtained by contacting your supporting Contracting Officer. Specific
questions regarding the selection of clauses, appropriate to program needs,
should be addressed to the Contracting Office early in the pre-solicitation
phase of the acquisition process.
(1) Rights in Data - General (EPAAR 1552.227-71)
(0 This clause balances EPA's program and mission needs with
the Contractor's right to protect property and valid economic
interests stemming from private investment. The Contractor
is protected from unauthorized use or disclosure of limited
rights data or restricted computer software either by
withholding delivery or by placing a "Restricted Rights
Notice" authorized by the clause on the data to be restricted.
Further, the categories or types of data which the Government
is to acquire with limited rights are specifically identified
along with an enumeration and definition of the use or
disclosure rights of EPA. Although the Contracting Officer
may revise these purposes consistent with EPA's needs,
appropriate purposes include: use by support service
contractors, evaluation by non-Governmental evaluators, and
use where required by other contractors participating in the
same program.
(ii) Pursuant to this clause, contractors may establish or maintain
copyright protection for data first produced and/or delivered
under the contract. However, the Government will normally
be granted a nonexclusive, irrevocable license, which includes
the rights to reproduce, prepare derivative works, and
distribute to the public. The Contractor is permitted to
establish claim of copyright to scientific and technical articles
based on, or derived from, the contract work and published in
academic, professional, or technical journals. Such permission
may also be granted in other cases.
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(iii) As regards restricted computer software, the means of
protection afforded the contractor are the same as those for
limited rights data. However, the Contractor may also
substitute form, fit and function data or deliver the software
with restricted rights relative to its use, disclosure, and
reproduction. It is important in circumstances when such
software is needed for use in more than one computer that the
number be specified in the contract schedule. When EPA
acquires software with restricted rights, it may use (or copy
for use) in or with the computer or computers for which it was
acquired (or with a backup computer in case of inoperability)
reproduce for archival or backup purposes, modify, adapt, or
combine with other software (the resultant software is subject
to the same restriction in rights), and may be disclosed or
reproduced by support contractors or their subcontractors,
subject to the same restrictions in rights.
(iv) In the event EPA questions the Contractor's authority to limit
the use of data or restrict the use of software, procedures are
provided by the clause.
(v) Generally, then, under this clause, EPA acquires unlimited
rights to data first produced under the contract (however, see
above discussion on copyright data, form, fit, and function
data, data constituting manuals or instructional or training
materials (such data accompanying restricted computer
software may be excluded), and all other data delivered under
the contract unless it is limited rights data or restricted
computer software.
(2) Rights in Data - Special Works (EPAAR 1552.227-72)
(i) Generally, this clause is used in contracts which are primarily
for the production or compilation of data (other than limited
rights data or restricted computer software) for EPA's
internal use, or when there is a need to limit the distribution
or use of the data or to obtain indemnity for liability that may
arise from the content, performance, or use of the data. It
would also be used where "existing works" are being modified.
(ii) The following are circumstances under which use of the clause
is required:
(A) Production of audio-visual works;
(B) Agency histories;
(C) Recruiting, morale, training, or career guidance works;
(D) Works involving instruction or guidance of Government
officers and employees;
(E) Works intended for use -in connection wtih EPA
regulatory or enforcement activities not involving
research, developmental or experimental work;
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(F) Collection of data containing personally identifiable
information, the disclosure of which would violate rights
of privacy or publicity;
(G) Investigatory reports; and
(H) Works, the early release of which could jeopardize
follow-on acquisitions or EPA regulatory or enforcement
activities.
(iii) Under this clause, EPA has unlimited rights in all data
delivered and in all data first produced, the right to limit the
Contractor's claim to copyright, and the right to limit the use
and release of data except for purposes specifically provided
for in the contract.
(iv) The contractor indemnifies the Government and its officers,
agents, and employees against liability resulting from violation
of trade secrets, copyrights, a right of privacy or publicity,
provided the Government gives timely notice of its intent to
make such a claim.
(3) Rights in Data - Existing Works (EPAAR 1552.227-73)
(i) The clause is used in contracts for the acquisition (without
modification) of such works as motion pictures, videotapes,
sound recordings, literary, pictorial or other similar works.
The contract may limit the use of such work in terms of means
of exhibition or transmission, time, audience, or geographical
locations.
(ii) In the case of existing computer software, no special clause is
required although the contract must contain terms sufficient
to permit EPA to fulfill the need for which the software is
being acquired. Care should be exercised to ensure that any
vendor's standard commercial lease, license, or purchase
agreement be consistent with EPA's purpose for acquisition.
As with the acquisition of other computer software, Project
Officers should consult early on with the Contracting Officer
regarding EPA's intended use and the establishment of the
contract language necessary to protect the rights of EPA in
that use.
(iii) Contracts for other existing works, being acquired
off-the-shelf with no intent of reproduction or use which may
be prohibited by the author's or publisher's rights, need not
contain any of the clauses discussed above.
(iv) Modification of existing works is considered to be "special
works" for rights in data purposes.
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(4) Additional Data Requirements (EPAAR 1552.227-74)
In recognition of the fact that in some contracting situations, it may not
be possible or appropriate to ascertain all data requirements at the time
of contracting, this clause permits the Government to order data any time
during contract performance or within three years of acceptance of all
contract deliverables any data which was first produced or specifically
used in the contract. It provides for compensation to the Contractor for
formatting, reproduction, and delivery.
3.106-2 l(f) Special Contracting Circumstances
For contracts to be performed outside the United States, its possessions,
or Puerto Rico, contracts for construction work or architect-engineer
services, or contracts involving Government-owned contractor-operated
facilities performing research, development or production work, the
Contracting Officer, in conjunction with the patent attorney and the Project
Officer, must develop a suitable clause. Project Officers for such
requirements should, therefore, initiate action to begin the development of
such clauses as soon as possible after the requirement becomes known.
M-3.106-22 Pertinent Special Instructions
On any given requirement there may be special instructions that are not
contained in the Handbook, yet should be discussed in the procurement
planning process.
M-3.107 Preparing for the Development of the Procurement Request
After completion of the individual procurement planning session, during
which all Project Officer responsibilities with respect to the development of
the requirement were identified, the Project Officer, with the assistance of
the Contracting Officer, must prepare the procurement request package. The
considerations and guidance outlined in this Chapter, plus the planning
discussions, will more than adequately prepare the Project Officer for the
preparation of the procurement request package. Guidance on the use and
preparation of the Procurement Request/Order, EPA Form 1900-8, is
contained in Chapter 4 of this manual.
M-3.108 Procedure for Procurement Scheduling
M-3.108-1 Introduction
After completion of individual procurement planning, the Project Officer
develops the procurement request package and again meets with the
Contracting Officer (or contract specialist) to schedule the procurement
action.
3-60.3
Second Edition-4/84
Rev. No. 1-10/17/84
-------
M-3.108-2 Procedure
The contract specialist responsible for procurement action prepares a
procurement schedule as soon as possible after receiving the Procurement
Request. The FAR requires this only for procurements of $5 million or more.
He or she will coordinate with the Project Officer to obtain program office
and Procurement and Contracts Management Division approval of the
projected contract award date. The specialist maintains the plans so that
occurrences are recorded and subsequently reviewed by management.
M-3.108-3 Standard Procurement Leadtimes
Standard leadtimes expressed in days estimated to complete scheduled
events in a procurement cycle are listed in Exhibit 3-10 for the purpose of
assisting acquisition personnel and Project Officers in planning.
3-60.4
Second Edition-4/84
Rev. No. 1-10/17/84
-------
EXHIBIT 3-1
SEQUENCE OF ACQUISITION PLANNING ACTIVITIES,
PARTICIPANTS, AND REFERENCES
ADVANCE ACQUISITION PLANNING
Participants Coverage
Allowance Holders
Office of the Comptroller Chapter 2
Procurement & Contracts Management Division
plus others as necessary
INDIVIDUAL ACQUISITION PLANNING
Participants Coverage
Initiator of the Procurement Request (PO) Chapter 3
Contracting Officer
plus others as necessary
INDIVIDUAL ACQUISITION SCHEDULE
Participants Coverage
Initiator of the Procurement Request (PO) Chapter 3
Contracting Officer
plus others as necessary
3-61
Second Edition
April 1984
-------
EXHIBIT 3-2
SUGGESTED INDIVIDUAL ACQUISITION PLANNING CHECKLIST
I. REQUIREMENT
A. Title & Brief Description:
B. Period of Performance^
C. Estimated Value:
D. Type of Action:
New Contract
Modification
Unsolicited Proposal
Other
fl. PLANNING CONSIDERATIONS
Each of the following items should be discussed.
Manual Ref.
M-3.106-1
M-3.106-2
M-3.106-3
Project Officer Qualifications
Conflicts of Interest—Personal/Organizational
Statement of Work (Specification)
Design
Performance
Construction
____ Completion
Term
Multi-Year
Phased
M-3.106-4 Contract Types
M-3.106-5
M-3.106-6
M-3.106-7
M-3.106-8
M-3.106-8(a)
M-3.106-8(b)
M-3.106-8(c)
M-3.106-8(d)
M-3.106-8(e)
M-3.106-8(f)
M-3.108-8(g)
M-3.106-9
Technical Evaluation Criteria
Technical Proposal Instructions (TPIs)
Classified Information
Source Considerations
Availability of Work Resulting from Other Sources
Small Business Set-Asides
Socially and Economically Disadvantaged Business
Enterprise Programs— 8(a) Contracts
Labor Surplus Area Set Asides
Sources-Sought Synopsis
Justifications for Other Than Full and Open
Competition (JOFOC)
Unsolicited Proposals
Pre-Proposal Conferences
3-63
Second Edition-4/84
Rev. No. 2- 9/30/85
-------
EXHIBIT 3-2 (Continued)
SUGGESTED INDIVIDUAL ACQUISITION PLANNING CHECKLIST
M-3.106-10
M-3.106-11
M-3.106-12
M-3.106-13
M-3.106-14
M-3.106-15
M-3.106-16
M-3.106-17
M-3.106-18
M-3.106-18(a)
M-3.106-18(b)
M-3.106-18(c)
M-3.106-18(d)
M-3.106-19
M-3.106-20
M-3.106-20(a)
M-3.106-20(b)
M-3.106-20(c)
M-3.106-20(d)
M-3.106-20(e)
M-3.106-20(f)
M-3.106-210(g)
M-3.106-20(h)
M-3.106-20(1)
M-3.106-20(j)
M-3.106-20(k)
M-3.10 6-2 0(1)
M-3.106-21
M-3.106-21(a)
M-3.106-2 Kb)
M-3.106-2 l(c)
M-3.106-2 l(d)
M-3.106-2 l(e)
M-3.106-2 l(f)
M-3.106-22
Site Visits
Reference Materials
Cost Estimate
Funding
Planning Purpose PRs
Options
Government Property
Quality Assurance
Reports
Introduction
Types of Reports
Considerations in Use of Reports
Specifying Reports
Acquisition of Non-severable Facilities
Procurement Request Approvals
Printing and Binding
Questionnaires - Forms
ADP
Foreign Research Contracts
Management Consulting Services
Protective Services
Capital Equipment and Fixtures
. Protection of Human Subjects
Word Processing Equipment
Personal Vis-A-Vis Non-Personal Services
Other Specific Approvals
Management Approvals (Specify)
Rights in Data and Copyrights
Introduction
Policies and Procedures
Acquisition of Data
Definitions
Delineating the Government's and the Contractor's
Rights
Special Contracting Circumstances
Pertinent Special Instructions
3-64
Second Edition-4/84
Rev. No. 1-10/17/84
-------
oo
a\
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en
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P. S
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1
1 ELEMENTS 1 DESCRIPTION 1
1 APPLICATION
1 LIMITATIONS
FIXED-PRICE FAMILY
PIRM PIXBO-
PRICB
(PPPI
prico uriucli It ool
MMocI n on* ooiml
OMOJyogordtoioOl
Conor ottoricdU 01
porlonco
on contractor
Conorocrar Itoo
control CMII
on partial
Prolorrod canlrocl
Lom ol girarl Pay
moni n onad on al
ton oiaonood rather
DMA roMrin ocluovod
Canlroclar prondM
ipoculod ollon ooor a
llolod porud tar Iliad
prlci
Prico
wnon lair and
roaaanoOM prical con
bo ouoMlmod ai
aulMI
Particularly wiloMo
tor uandaraar
mookllod cammorcioi
•Mot or mllllorit
llpjnl tor woicn lauod
BTKnconbo
daiilaoao
tom M f Itorl RIO
loyal at «itari inaa
amv whoa war* can
nal bo claarly aalinad
bul alrorl doiirad con
bo ogroodupan
FIXED-PRICE
WITH ECONOMIC
PRICB
ADJUSTMENT
(FP-EPAI
Ibopr unpaid Of no
govornmonl mar bo
rovlMd upward or
downward mar lain
coMlngonclM occur
ProwidM tar prMO oo
ruuminl to proton
ponm MMMI
MuctuatMn or cuongai
«i coMraclori
alloMlinadprlcol
• PA Pf OWIMOnl COH
bo bowd on oiiob
pricot. OCIMOI COM*.
or CMI laoao
rMlrttJod to mautlrf
ondo conllnBonclal
labor or malarial
CMII llmilad lo con
nnotncitl boyond
comrMMr t control
EPA CIOOM
WMn connnaanciot
roMilling Irom
unttaoia mor Ml or
uoor condition* con
bo idanMiod ond
covtrta by o loporoio
prico aaiutlrnom
pixEo-pRica
INCENTIVB
IPPII
Pk-ot Toraaf i Co»om
la mm of Ibul
noooilolod CMI and
Itaolprafn final
profit oalormlino H
nogotlolod cool to
largal cou and ad
lulling urgotpraM
lAUt larnwla linoro-
railol Final prica
CUMOI IKOO. Calling
prica
•acciiuvt Toriotit
Al pradorormlnM pro
ducM*. own. firm
•argil aralil u dolor
atonl tarmula. Inan
oilnor anf'Par
PPIIFICinbO
FlrM Torgoli
largal Prolil
Caning Prico
luring Formula
loccnuva targili
Imhal f argal Piotil
Caihng Prico
I argal prolil Adtull
o oogrM of CMI
troctorl win orovido
mcoMIra tor ollachM
coil control
Con cambino wiln In
conJlvM on parlorm
anco ond KDoauM
Aaoauoto CMI or pric
Ing data mull M
largali. MtopurpoM
carmal bo n unit cou
rawanilbHlly M
gavariuiionl. roauiroi
lunullanooui agtM
moni on Ml minimi
ol pricing lirucluro
Adagualo Confroctor C
| COS
NTRACTOR COST RCSPONSIBIL
PRICE
RCDCTER-
MINATION
PreipocUvOi Covtro
oieM peyt llMd price
tor goods or Mrvtcet
tar a gi-en perkaa. but
price u iiiblKi to
tevltton at tlaied
limat during partarm
ance ol coniraci
fliadl payt prica. tub
|acltocaUlng.niaili
neootiaied alter con
tract partormence
Retroactive
Ctilmg Prica
Freipecliva. Ouaniilv
production or ter-ictt
wntn a lair and
reetonaoio price can
M negolialed tor 01
ihOJ ptriod but not en
lire coniraci period
•otreaciivoi VHMM
lair ond rtatonaoie
FFPcamotoe
Mgotiaie.* and tow
*aluaor tnonpartod
el pofftorfnanca
rejodof « otlwr typat
•mpreciicabie
POftpeciive FFPnot
Mnodt coniorm u
contractor t account
«U%»* *n» ihol price
redtiorminailan writ
bo leaaa promptly
•otrooMlivai
Reaaonaola atiuranca
lhalpfica r«doter
mmailOA will bo ia»an
promptly oMtdfB
quI/M MCA Approval
vremonit Ort MA Mformwad
1 argil CMI
Snaring Formula
Mimmum Fee
DflveiopmMi ana latt
wioora a prolil lAcon
live n hoioiy to pro
wide moitvoiiMn tor
more ailecnve
maAagameni
Fee iim.it Mme at
Mfjyollaitd Pr«
Adoouaia Contrarter C
T-Rw ^URSEMENT FAMILY
COST-PLUS-
AWARD-FEG
ICPAFI
Covit nment payt
auowaola coal. oaM
IM. ana award lie
Contractor aarnt o
not vary win per
lormance ano au if
evaluaikM by gwrniA
moni ol comrictar't
partormanca
AitoOunf al Iha award
IM it uMiaterally
daiermiiwd br IM
government «A*J it not
twaiKl M Oiipuiet
ClauM
C (roiuaiion el pet
tponding partial pay
mm ol IM made at
Haled Inttrwalt
E.t.maltd C«t
Bate FM
A«v.wd Frt
Level of eiiori con
tree II lor Mrvictt
wnere acnievtnwMi
mvt.1 oa awaivaivd (
twoltciiveiy
vMMjre llmie pirlorm
ance oo|ecliv«t can
net M atllMiUted m
advance lo rntau.1*
Award lee may be
uied »n CMiunction
wilA other lytMt ot
con tr aclft
•ato Fae won not 9*
caod IH el fltilmaud
ceti
Maaimum FM nmut
tameMCPFti
llor dolliminlAg prol
•I oojoctivtl Iftou not
M.ppl.M
Snail nal bo HMO In
tun 01 CPFF or CPIP
MMO OblMIIM
Ml
:iHonionti Only
oil Accounling Sillim
COST-PLUS-
PIXBD-PEB
(CPFPI
GownmiM Mr!
hiod IM
Fiaod IN don no)
viry mm ocluol
CMN
Flood IM mar M ad
lutioa Mr changn m
•010 la oo porlarmod
tor comrKlon M con
Irolcoin
Cantplonon Pormi ro
dall>or ond product
lorolarrod lorml
Tarm Porm foqinroa
ipociliod lovrt of ol
lorl ovir Itoltd
pirwd M Ml*
Clllmaltd CMI
Find Foi
Raiaorcn
Picnminorv oiploro
lion or tluov
DlvoMtfjrnonf ond Mil
Minari CPIP not prac
tical
Pao wail not lacood
I1H •* nilmMad CMI
lor RlOor tiro, ol
atlimilad CMI lor
production contract!
Priro ol A/I coniraci
•Hall nal oicaod |H ol
akllmalM cou ol IM
puMIc worn or utility
proiacl
NogoNaiad Proc
Adagualo Conlrotlor C«
COST ANO COST
SHAMING
Coin Govarnmtnl
payi ollowoblo CMI.
no loo
Coil loorugi Oonrn
moni porl only o por
tun al alnMoMo cou
ai muwoUy ogroog to
by tnoporllM Coo
troctor oboorba par
Ban ol Iho CMI win
aipKUlun al gaming
otrior banollri Iron
mo ollon
Cillmaiodcoil
Coil. Nan pralil m
llilutionvarganiii
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coniracu
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•fioriiwiinoiirior
Of olil w nonprolit
conlrocrari
can wanogi HOI aa-
Pbcaola tar oltarl
wocillaa by ODvarn
moni or vjoicn mi
only minor rilavonco
to commarciol ac
tinillai of Iho cantrac
lor
uramonlB Cmly
ill Accounting Svllam
OTHER TYPE.
SPECIAL USES
TIMB ANO
MATERIALS
LABOR HOURS
Govornmanl payl
Iliad imriy riia tor
tupplM or lorvlcM
oilrt contractor lor
luihod OMnrlM pro
•Mod ol CMI
Laoor-Hauni dHlarl
onry In tool no
nulorlol II HlopUoa
by contractor
Hourly libar rota
Coiling Prica
Enginaoring and
oalign Mrvkoi.
or ovomaul.
fmorgoncv muolloni
OolirmMilloil lliol no
elftar typo ol coniraci
Ii luilabU
Hoaenalod Pra
LETTER
CONTRACT
Prilinilnorv control
Mai bnlrumonl unxb
aulborlfai immoalala
canuntncomool of al
tort
Atalhod ol parmanl
carrowondi ta lypo ol
canlrocl can
lofnpluog unoo
whan wuorim ol na
lianal dolomo do
aiand mil work com
0 dofuullvo canlrocl
wrmon MMrminoilan
mal no olnor lypo
Hnlaolo
prico coiling rtqvirod
il award bawo on
prlcocompalitton
Mini bo dMMilllrd
moni llablulv camol
•Mood »nt ai
MIUTUIOd CMI
Euromonti Only
INDEFINITE
DELIVERY
Provide* lor dollmto
Quantity of tpecitied
tupputt or tervKet
lor a t»aa parted will.
dat*gn«i«d tocoiioftt
upon or dor
daojvueoMoni Pro
vxMf. lor furnitAlng
all actual re
Ojuirffmtnit of
•paciiitd ivppnet or
MTWKM during a
UMCiltoTd Mriod at
oroareo by dttignaled
aciiwitiit
Providrt tor lur
•suoMtiity ol fpeciiiod
oMiBpiiuTtor wrvtcet
ourmg j loecilitd
IMII owl govirnmeni
mull order a Haled
Firm i«iMOd Price
•PA er Prka
O.ad*iermMiaiion
T*H
•WaotM Coat mt ffoo
vWiero Mllniia OJUMIII
IF at tupptiet or terw
ctt rMhiirad during a
tpKilied par tod are
i aadiiy avariawe
mpotuoio to deier
mute .A advance IAO
precite oju.wtl.tm
dtf milt period Ot
time
lame a* re
OjuirffmuHi but
tommilled to
1
•^
3
M
-------
EXHIBIT 3-4
WELL-CONSTRUCTED TECHNICAL EVALUATION CRITERIA
Technical Review Categories
Demonstrated level of experience
in the following areas:
1. A. Industrial plant design,
manufacturing processes
operation;
B. Developing sampling plans
including sample collection
methods for industrial chemical
processes and safety plans;
C. Performing the tests for
ignitability, corrosivity,
reactivity and EP toxicity;
D. Implementing quality control
and quality assurance programs
E. Conducting non-routine organic
and inorganic characterizations
of complicated chemical mixtures
by Atomic Absorption (AA) and
Spectrometry (GC/MS).
(1) Experience of company
with AA
(2) Experience of company
with GC/MS
F. Performing tests for detecting
mutagens and carcinogens (Ames
Test, bioassays); biodegradation
and bioaccumulation tests;
phytotoxicity and aquatic toxicity
bioassays;
G. Reviewing scientific data
relative to potential health
and environmental effects;
Weights
Company Personnel
25
25
5
50
100
150
50
70
25
75
20
25
75
70
3-67
Second Edition
April 1984
-------
EXHIBIT 3-4 (Continued)
WELL-CONSTRUCTED TECHNICAL EVALUATION CRITERIA
Company Personnel Total
H. Preparing descriptions and
technical material on bioassay
and chemical testing protocols
appropriate to waste testing
including monitoring, instrumental
procedures and statistical tests)
L Gathering and evaluating
technical data for use in
preparing hazardous waste
background documents and health
and environmental effects
profiles.
J. Experience of staff in the use
of the equipment listed in the
special instructions.
SUBTOTAL Section 1
2. Availability and quality of necessary
equipment (including optional equipment)
for conducting characterizations and
method evaluations
SUBTOTAL Section 2
3. Offerer's Demonstrated Technical
Approach to the Statement of Work
areas as follows:
A. Development of Sampling Plan
and Sample Collection System
B. Methodology evaluation
C. Rulemaking petition review
D. Manual preparation
E. Hazardous waste background
document preparation
SUBTOTAL Section 3
50
25
550
200
200
50
50
15
10
10
135
75
50
100
515
1065
200
135
TOTAL
515
3-68
Second Edition
April 1984
-------
EXHIBIT 3-5
CIRCUMSTANCES WHICH MAY PERMIT
OTHER THAN FULL AND OPEN COMPETITION
The product or services required are available from only one source
and no other type of property or services will satisfy EPA's minimum
requirements [41 U.S.C. 25 3 [c ][!]]. This includes such circumstances
as-
- When only one responsible source can supply EPA's requirements.
- Follow-on contracts for continued development or production of
major systems or highly specialized equipment.
- Follow-on contracts for services that represent a continuation of a
previous effort performed by the proposed source as a result of a
competitive acquisition when it is likely that an award to another
source would result in substantial duplication of cost to EPA that is
not expected to be recovered through competition or unacceptable
delays in fulfilling EPA's requirements.
- Acceptance of an unsolicited research proposal.
- Data needed are not available to the Government and no
alternative exists.
- Utility services supplied by only one source.
- When the Administrator has determined that only specified makes
and models of technical equipment and parts will meet EPA's
requirements for standardization and interchangeability.
EPA's need for a product or services is of such unusual and compelling
urgency that delay in the award of a contract would result in serious
financial or other injury to the Government [41 U.S.C. 253[c][2]].
It is necessary for EPA to establish or maintain an essential
engineering, research, or development capability to be provided by an
educational or other non-profit institution or a Federally Funded
Research and Development Center [41 U.S.C. 253[c][3]].
When the terms of an international agreement or treaty specify or
limit the sources to be solicited [41 U.S.C. 253 [c][4]].
EPA is authorized or required by statute to award a contract to a
specified source [41 U.S.C. 253[c][5]].
When, in order not to compromise national security, disclosure of
EPA's needs must be limited to one or a limited number of sources
[41 U.S.C. 253[c][6]].
3-69
Second Edition-4/84
Rev. No. 2- 9/30/85
-------
EXHIBIT 3-5 (Continued)
The Administrator has determined it is not in the public interest to use
competition and has notified the Congress 30 days prior to award
[41 U.S.C. 253[c][7lJ.
Note: With the exception of purchases from Industries for the Blind and
Severly Handicapped, under 41 U.S.C. 253[c][5], all acquisitions require
justifications and approvals.
3-70
Second Edition-4/84
Rev. No. 2- 9/30/85
-------
EXHIBIT 3-6
SAMPLE FORMAT
U.S. ENVIRONMENTAL PROTECTION AGENCY
JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION
PART I- BACKGROUND
1. Date:
2. Program Office:
3. Project Officer (Name, Mail Code, Telephone Number):
4. Project Identification (Title, Contract Number, etc.):
5. Description of the project (describe the supplies and services required to
meet the Agency's needs):
6. Period of performance or delivery date: (List separately the base period
and each proposed option periods):
7. Estimated contract value (List separately the base contract value and
value of each proposed option period):
8. Proposed Contractor (Name and Address):
PART n - JUSTIFICATION
I recommend that this procurement be negotiated. without full and open
competition with (name of proposed contractor). The basis for this
recommendation is discussed below:
(Address the elements in FAR 6.303-2 and each of the applicable
statutory authorities listed in FAR 6.302 permitting other than full and open
competition and provide specific support for each authority used. Provide
other facts which support the justification, e.g.,
If FAR 6.302-1 is cited, give estimate of costs that would be duplicated
and the basis for your estimate.
If FAR 6.302-2 is cited, describe the nature and extent of harm to the
Government.
List actions that can be taken by the Government to remove or overcome
barriers to competition for subsequent acquisitions of the supplies or
services.) See also EPAAR 1506.3.
3-71
Second Edition-4/84
Rev. No. 2- 5/30/85
-------
EXHIBIT 3-6 (Continued)
PART ffl - PROGRAM OFFICE DIVISION DIRECTOR'S CERTIFICATION
I certify that the above information is accurate and complete.
Signature of Division Director Date
PART IV - CONTRACTING OFFICER'S DETERMINATION
1. Description of efforts to obtain competition: (Describe the efforts made to
ensure offers were solicited from as many sources as practicable, e.g., how
was the procurement publicized? What were results of CBD synopsis?
Identify firms responding to the synopsis and results of the evaluation of the
responses. If a market survey was not conducted, provide a statement of
the reasons survey was not concluded.
2. Cost Determination: (Provide a statement that the anticipated cost to the
Government will be fair and reasonable).
PART V - CONTRACTING OFFICER'S CERTIFICATION
I certify that the above justification is accurate and complete to the best of
my knowledge and belief.
Signature of Contracting Officer Date
PART VI - APPROVAL
Signature of Approving Official Date
3-72
Second Edition-4/84
Rev. No. 2- 9/30/85
-------
EXHIBIT 3-7
LEVELS OF AUTHORITY FOR APPROVALS OF JOFOCs
Potential Contract Value Approving Official
• $1,001 - $25,000 Contracting Officer
• Over $25,000-$100,000 One level above the Contracting
Officer
• Over $100,000 - $1,000,000 (FY 84) Competition Advocate*
• Over $1,000,000 - $10,000,000 HCA or deputy on a nondelegable
basis*
• Over $10,000,000 Senior Procurement Executive on a
nondelegable basis*
* The Contracting Officer shall submit JOFOCs directly to the approving
official.
3-73
Second Edition-4/84
Rev. No. 2- 9/30/85
-------
EXHIBIT 3-8
(Example*)
QUALITY ASSURANCE REVIEW FOR EXTERNAL PROJECTS
(CONTRACTS)
Z. GENERAL INFORMATION
Descriptive Title:
Sponsoring Program Office:
Approximate Dollar Amount:
Duration:
IX. THIS CONTRACT REQUIRES ENVIRONMENTAL MEASUREMENTS
(If yes, complete form; if no, sign form and Yes No
submit with procurement request.)
III. QUALITY ASSURANCE REQUIREMENTS Yes No
(Projects involving environmental measurements) ______ _____
a. Submission of a written quality assurance
(QA) program plan (commitment of the
offerer's management to meet the QA
requirements of the scope of work) is to
be included in the contract proposal. ______ _____
b. Submission of a written QA project plan is
to be included in the contract proposal. _____ _____
c. A written QA project plan is required as
a part of the contract. ______ _____
d. Performance on available audit samples or
devices shall be required as part of the
evaluation criteria (see list on reverse
side).
e. An on-site evaluation of proposer's facili-
ties will be made to ensure that a QA system
is operational and exhibits the capability
for successful completion of this project
(see schedule on reverse side). ' _______ _____
f. QA reports will be required (see schedule
on reverse side). _____
*This form may vary in context depending upon tne application ana tne originating oiuce.
3-75
Second Edition-4/84
Rev. No. 2- 9/30/85
-------
EXHIBIT 3-8 (Continued)
ZV. DETERMINATION (Projects involving environmental measurements)
Percentage of technical evaluation points assigned
to QA
Project Officer estimate of percentage of cost-
allocated to environmental measurements
QC Safe re nee Split Samples
Parameter Sampling or Device for
Measured Available Cro ss -Campari son
(Yes or No) (Yes or No)
Required
for
Pre award
(Yes or No)
FREQUENCY
During Contract
QA System Audits are required: Pre award
QA Reports are required: with Progress Reports
; daring contract:
; with Final Report
The signatures below verify that* the QA requirements have been established.
QA Officer: Project Officer:
Signature
Date
Signature
Date
After signatures, a copy of this form must be included with the procurement
request and sent to the Contracts Office and a copy placed on file with the
QA Officer.
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EXHIBIT 3-9
PROCUREMENT REQUEST APPROVALS
A. Designated Office Approvals - Note that this matrix in Part A does not
restate any approvals from Part B. Offices designated in Part A should be
consulted prior to submission of requests for approval since authority may
have been redelegated. The Agency objective is to limit Procurement
Request approvals strictly to those that are clearly required by proper
delegations and official policies.
Item Item Required Required
No. Description Local Approvals Headquarters Approvals
1 All purchases, regardless - Program Office
of value, for equipment, Approvals (POA)
supplies or services. - Facilities
(Includes all items Support Services None
listed in the rest of Division (FSSD)
Part A.) or Equivalent
Field Office (EFO)
to confirm compli-
ance with property
regulations and to
screen for excess
property. (Dele-
gations Manual f 1-4)
2 Printing; duplication; Offices designated in None
composition Delegation f 1-5 in
Delegations Manual.
3 - Real property or any None FSSD
interest therein (Delegations Manual
- Advertisements for * 1-4)
acquisition of real
property
4 Commercial U-drive None FSSD
credit cards (Delegations Manual
* 1-4)
Facsimile equipment None FSSD
(Delegations Manual
* 1-4)
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EXHIBIT 3-9 (Continued)
Item
NO.
Item
Description
PROCUREMENT REQUEST APPROVALS
Required
Local Approvals
Required
Headquarters Approvals
Communications equipment
utilizing the radio
frequency spectrum
None
PSSD
(Delegations Manual
* 1-4)
Watercraft over 25 feet
or $15,000 or aircraft
of any value
None
PSSD
(Delegations Manual
f 1-4)
Purchase or lease/hire
for 60 or more consecu-
tive days of passenger
vehicles and light duty
trucks
None
PSSD
(Delegations Manual
f 1-4)
Purchase or rental
of copying machines
and printing equipment
None
PSSD
(Delegations Manual
# 1-5)
10 Repair and improve-
ment construction
PSSD or EFO
(See Delegations
Manual f 1-4)
PSSD
(For use of Building
and Facilities funds)
11 Equipment, services for
creation, organization,
maintenance and disposition
of Agency records and files
including micrographic
services and systems
Limited offices as
designated in the
Delegations Manual
(see Delegation * 1-1)
See also Records
Management Manual.
None
12 ADP equipment, software
maintenance and services,
including those related
to computer-related
micrographic systems,
word processing, time-
sharing, feasibility
studies and require-
ments analyses
None
Office of Information
Resources Management
(Delegations Manual
* 1-10)
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EXHIBIT 3-9 (Continued)
Item
No.
Item
Description
PROCUREMENT REQUEST APPROVALS
Required
Local Approvals
Required
Headquarters Approvals
13 Paid advertising for
recruitment of personnel
in newspapers and trade
journals of national or
inter-regional circulation
Local personnel
office (Delega-
tions Manual
* 1-2}
None
14 Collecting identical
information or statis-
tical data from ten
or more persons
None
Assistant Administrator
for Policy, Planning
and Evaluation. (See
Delegations Manual
f 1-22)
15 Protective services and
equipment including guard
protection security alarms,
safes, and monitoring and
detection devices
None
PSSD
(See Delegations Manual
f 1-6)
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EXHIBIT 3-9 (Continued)
PROCUREMENT REQUEST APPROVALS
Management Approvals
The following approvals apply to all procurement requests (PRs).
(Incremental fundings are excluded.) These approvals are in addition to
those listed in A above.
Item
1. Procurement Requests for
management consulting services:
(a) Small purchases
(b) Other than small purchases
Approval
Program official at least one
organizational level above
initiating office and, when
award is to be made during
the fourth fiscal quarter, to
program official at least two
organizational levels above
initiating office.
Program official not below
level of Associate, Assistant
or Regional Administrator,
Inspector General, or General
Counsel.
2. Requirements not' listed above
which exceed the small purchase
threshold.
Program Official designated by
the Associate, Assistant or
Regional Administrator,
Inspector General, or General
Counsel.
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EXHIBIT 3-10
EXAMPLES OF CONSULTING SERVICES
AND OTHER TYPES OF SERVICES
A. Examples of services that are considered consulting services are provided
below:
L Advice on the feasibility of instituting a transfer pricing system in
the Procurement and Contracts Management Division and advice on
how such a system could improve management of contracts by
procurement personnel.
2. Analysis of EPA's management and agency services support functions
and advice on how to improve the performance of these functions,
such as through reorganization of the Office of Administration.
3. Analysis of alternative strategies for implementing the requirements
of Hazardous Substance Response Program regulations and advice on
resource needs associated with each alternative strategy.
4. Analysis of EPA procedures for drafting and issuing permits to
municipal and nonmunicipal dischargers and advice on how to simplify
these procedures.
5. Advice on how to coordinate and integrate toxic substance policies
and activities with those of other EPA programs.
6. Advice on the different strategies for implementing merit pay at
EPA, and conduct of training courses on one of these strategies.
7. External peer review of programs, projects, and publications for the
Office of Research and Development (ORD) Laboratories to assure
conceptual soundness of scientific methods, and validity of results.
The objective of the procurement is to obtain highly competent
technical examinations and analyses of the research planned or
performed by ORD laboratories in order to obtain the benefit of
additional viewpoints and perspectives and to advise the ORD staff
on the state of the art in areas that impact laboratory research
programs. Three separate types of reviews are required:
a. Program reviews and analyses which include critiques of
laboratory research programs and advice on upgrading the
program direction or management.
b. Project reviews and analyses which focus on the
scientific/technical details of a single project, with an in-depth
examination of the project plan and the progress being made in
pursuing the plan, a review of the data analyses and an
interpretation of the data analyses.
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EXHIBIT 3-10 (Continued)
c. Review and analysis of research results for publication clearance in
accordance with the "ORD Technical Information Policy and Guide."
B. Examples of services which are not considered consulting services are
provided below:
L Regulatory impact analyses, including economic impact analyses of
effluent guidelines on specific industries, such as the organic
chemicals industry.
2. Analyses required by the Clean Water Act to determine
economically achievable standards.
3. Design and implementation of a computerized management
information system for the Office of Administration.
4. Development of sampling and analytical techniques to identify and
measure pollutants in the ambient air.
5. Conduct of a training course for Project Officers with particular
emphasis on the Project Officer's role in the source evaluation and
selection process.
6. Development of a manual on security procedures for handling
confidential business information.
7. Conduct of a study to assess the consequences of pollutant loadings
in the Chesapeake Bay.
8. Evaluation of the strategy proposed by the Personnel Management
Division for implementing merit pay at EPA with the primary
purpose being the conduct of fifteen separate 8-hour training
sessions on how to draft critical job elements and performance
standards.
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EXHIBIT 3-11
STANDARD PROCUREMENT LEADTIMES
Category Leadtime in
Calendar Days
1. Contracts:
A. New Competitive
• Competitive - Research and Development Under $500K 185
• Competitive - non R&D under $500K 170
• Competitive - Research and Development $500 K or more 240
• Competitive - non R&D $500K or more 225
B. New Sole Source
• New Sole Source - under $500K 120
• New Sole Source - $500K or more 171
2. Small Purchases:
A. Competitive Order
• Oral $1,000 to $10,000 5
• Written $1,000 to $10,000 19
• Written $10,001 to $25,000 60
B. Sole Source Order
• Oral $10,000 or less 4
• Written $10,000 or less 17
• Written $10,001 to $25,000 60
C. Blanket Purchase Agreements 17
Federal Supply Schedule orders are included in these categories based on the same
criteria as other orders.
NOTE: In EPA Notice 84-3, dated 7/30/84:
The Procurement and Contracts Management Division has developed standard procure-
ment leadtimes for processing small purchase and contract awards. Leadtime is defined
as the elapsed time between receipt of an acceptable Purchase Request/Order (EPA Form
1900-8) in the appropriate Procurement Branch and the date of the award. These lead-
times reflect changes in award procedures as directed by the Federal Acquisition Regula-
tion. Some actions may require extraordinary processing steps; others may require delay-
ed award dates to meet special needs of the program offices. In such cases, special lead-
times will be negotiated with the initiators of the actions. Program offices are encourag-
ed to submit advance contract actions, as unfunded "planning purpose procurements," as
early as possible to ensure that the award will be made by the desired contract date.
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TABLE OF CONTENTS
CHAPTER 4
M-4.000 DEVELOPMENT OF THE PROCUREMENT REQUEST
AND OTHER RELATED ACTIONS
M-4.100 Introduction
M-4.101 Functional Assignments for Evaluation and Selection
M-4.101-1 Introduction
M-4.101-2 Assignments
M-4.102 Use and Exceptions to the Use of EPA Form 1900-8
M-4.102-1 Use of EPA -Form 1900-8
M-4.10 2-2 Exceptions to the Use of Form
M-4.103 Supporting Documentation
M-4.103-1 Justification
M-4.103-2 Exceptions to the Need for a Procurement
Request Rationale Checklist
M-4.104 Basic Items To Be Included in the Procurement Request
Rationale Checklist
M-4.104-1 Project Title
M-4.104-2 Performance Period
M-4.104-3 Procurement Abstract
M-4.105 Coordination of the Procurement Request/Order
4-1
4-1
4-1
4-2
4-3
4-3
4-3
4-4
4-4
4-4
4-4
4-4
4-4
4-5
4-5
M-4.200 OTHER CONSIDERATIONS RELATIVE TO 4-7
PROCUREMENT REQUESTS
M-4.201 Procurement Requests for Amending a Solicitation or
Contract 4-7
M-4.202 Priority Procurement Requests 4-7
M-4.202-1 Definition 4-7
M-4.202-2 Procedure 4-7
M-4.20 3 Socially and Economically Disadvantaged 4-8
Businesses/8(a) Contracts
M-4.204 Return and Cancellation of the Procurement Request/Order 4-8
EXHIBITS
4-1
4-2
EPA Form 1900-8
Procurement Request Rationale Checklist
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CHAPTER M-4.000
DEVELOPMENT OF THE PROCUREMENT REQUEST
AND OTHER RELATED ACTIONS
M-4.100 Introduction
Once the decision to contract has been made and procurement planning
accomplished, the next step in the acquisition process is the initiation of a
procurement request (PR). Procurement requests must be utilized for the
acquisition of personal property and nonpersonal services from commercial
(i.e., non-Federal) sources of supply. The authorized forms to be used are EPA
Forms 1900-8, Procurement Request/Order, and 1900-8A, Continuation Sheet.
This Chapter will provide detailed discussion on the content of and format to
be used both in the Procurement Request Forms and other required
documentation, such as the Procurement Request Rationale Checklist. As the
Project Officer, it is your responsibility to determine whether initiation of a
procurement request is appropriate; if so, to properly complete the necessary
documentation; obtain the required approvals; and forward all documentation
to the Contracting Officer for review and appropriate action.
M-4.101 Functional Assignments For Evaluation and Selection
M-4.101-1 Introduction
Concurrent with preparation of the Procurement Request or, even more
beneficially, prior to its preparation, the Project Officer and Contracting
Officer should collaborate for the purpose of establishing the functional
assignments for evaluation of proposals and source selection. It is important
that this be done in that the effectiveness of the source selection process
depends to a large extent on the content and quality of all elements of the
solicitation. Through early appointment of the Source Selection Official
(SSO), Source Evaluation Board (SEB), Technical Evaluation Panel (TEP), and
Business Evaluation Panel (BEP) members, they can become actively involved
in the development of the requirements.
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M-4.101-2 Assignments
The following conditions are applicable to the appointment or designation
of the SSO, SEB, TEP, and BEP and their functional duties with respect to
procurement actions of the dollar values indicated. For the purpose of
establishing a SEB, the term "dollar value" means the full estimated cost/price
of the total planned requirements (including options) of any resulting contract
(or contracts when more than one award is planned from a single solicitation).
(a) In Excess of $5.000.000;
(1) SSO - Head of the Contracting Activity (HCA)
(2) SEB Chairperson - Head of the Contracting Activity (HCA) or
designee (must be a contracting official)
(3) SEB Membership - Chief of the Contracting Office, TEP Chairperson,
BEP Chairperson, and other specialists as assigned by the SSO
(4) TEP Chairperson - Project Officer
(5) TEP Membership - At least two members in addition to the PO*
(6) BEP Chairperson - Contracting Officer
(7) BEP Membership - Contract specialist and cost/price analyst
(b) In Excess of $500,000 But Not Exceeding $5.000.000;
(1) SSO - Determined by the Chief of the Contracting Office
(2) SEB - Established only when requested by the program office or
determined necessary by the SSO. If established, the SSO shall
determine the membership.
(3) TEP Chairperson - Project Officer
(4) TEP Membership - At least two members in addition to the PO*
(5) BEP Chairperson - Contracting Officer
(6) BEP Membership - Contract specialist and cost/price analyst
(c) Less than $500,000
For procurements under $500,000, the PO may be the only member of the
TEP, and the CO or contract specialist may be the only member of the BEP.
* If desired by the Program Office, a QA Officer may be a member of the
TEP.
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M-4.102 Use and Exceptions to the Use of EPA Form 1900-8
M-4.102-1 Use of EPA Form 1900-8
EPA Form 1900-8 (see Exhibit 4-1) should be used for initiating
procurements of personal property and nonpersonal services requiring the
commitment and obligation of appropriated funds, including the following
types of actions. It should also be kept in mind that any change in the dollar
amount of a contract requires the use of a Procurement Request/Order.
(a) Imprest Funds
The imprest fund transactions may be used for procurement of $250
or less ($500 for emergencies); however, a lower limit may be
established by local procedures.
(b) Small Purchases
Small purchases are those purchases where the aggregate amount
involved in any one transaction does not exceed $25,000.
Procurement procedures are simplified for these size procurements.
Requirements aggregating more than $25,000 may not be broken
down into several purchases which are less than $25,000 merely for
the purpose of utilizing small purchase procedures (Federal
Acquisition Regulation Subpart 13.203). For sole source acquisitions
in excess of $1,000, the Project Officer must submit, as a separate
attachment to the Purchase Request/Order, a brief statement
supporting a sole source acquisition (see M-3.106-8(f)(2)(iii) and
Exhibit 3-5).
(c) Purchases Over $25,000
Purchases over $25,000 require more detailed documentation and
certain specific information to be contained in a document entitled
"Procurement Request Rationale Checklist," (see Exhibit 4-2). You
should submit this document as an attachment to the purchase
request unless directed otherwise by the CO. The PO should obtain
all required approvals of the final procurement request package
before submitting it to the CO, (see M-3.106-20(j) and (k) and Exhibit
3-9).
M-4.102-2 Exceptions to Use of Form
The EPA Form 1900-8 is not utilized in the following instances:
(a) Requests for Printing
EPA Form 2340-1 should be used for duplicating and printing services
and EPA Form 2340-6, Requisition for Local Duplicating, should be
used for local duplicating and printing;
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(b) Employee Training
Optional Form 170, Request, Authorization, Agreement and
Certification of Training, should be used for employee training.
(c) Local travel
(d) Authorized mail other than U.S. Postal Service
M-4.103 Supporting Documentation
M-4.103-1 Justification
Each procurement request should contain a justification or supporting
documentation as required. The extent of documentation will vary depending
on dollar amount and kinds of services or property to be procured. For
instance, procurement action cannot be initiated on requirements over $10,000
until the "Procurement Request Rationale Checklist" (PRRC) is approved from
a technical standpoint by authorized program officials.
M-4.103-2 Exceptions to the Need for a Procurement Request Rationale
Checklist
The PO shall complete a Procurement Request Rationale Checklist for all
procurements over $10,000 unless directed otherwise by the Contracting
Officer.
M-4.104 Basic Items to be Included in the Procurement Request Rationale
Checklist
Chapter 3 listed all possible items to be considered in a PR. For your
convenience, the checklist is set forth as in Exhibit 4-2 at the end of this
section. The following are some of the basic items that are to be included in
every procurement request rationale checklist.
M-4.104-1 Project Title
This title should correspond to the title used in EPA Form 1900-8, but
need not be limited to the 60 positions as required according to the instruction
on the reverse side of EPA Form 1900-8. Titles should always accurately
reflect the work which will be performed under the contract.
M-4.104-2 Performance Period
The period of performance to be stated is the contemplated period of
contract performance expressed in months, excluding any options. Whenever
contractual options are desired, the estimated period of performance for each
option should be specified.
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M-4.104-3 Procurement Abstract
Describe briefly for public dissemination both program background and
scope of work. This abstract will be used to synopsize the procurement in the
Commerce Business Daily and may be transmitted internally for information
purposes. Each abstract for competitive procurement should, when
appropriate, contain remarks about desired qualifications of prospective
contractors so that unqualified firms will not become involved. An abstract is
not required when an 8(a) contract is to be entered into [see M-3.106-8(c)].
M-4.105 Coordination of Purchase Request/Order
Purchase requests for management consulting services are routed through
the local personnel office to assure the propriety of contracting-out in lieu of
using in-house capabilities and. contracting-out rather than appointment of a
person to perform the service and also assuring that the services are
nonpersonal in nature.
4-5
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M-4.200
OTHER CONSIDERATIONS RELATIVE TO PROCUREMENT REQUESTS
M-4.201 Procurement Requests for Amending a Solicitation or Contract
When a purchase request is prepared for the purpose of amending a
solicitation or contract (no PR is required for administrative change orders
which do not effect dollar value), the purchase request should reference the
solicitation number or contract number as appropriate. In addition, all
considerations normally addressed in preparing a PR—i.e., approvals,
clearances, etc. must be considered.
M-4.202 Priority Procurement Requests
M-4.202-1 Definition
A Priority Procurement Request is one which contains a requirement
which is of such priority that award of the Procurement Request must be made
in less than normal procurement leadtime.
M-4.202-2 Procedure
(a) For procurements over $10,000, the Procurement Request should
include a written justification specifying the necessity for priority processing
as it relates to a program. The justification is attached to the EPA Form
1900-8.
(b) The request shall be forwarded to the appropriate Chief of the
Contracting Office at the Washington, Research Triangle Park, or Cincinnati
contracting activity, who will approve the priority justification and determine
priority assignment.
(c) The appropriate contract operations office will keep the program
officer advised of the status of the request for priority procurement
4-7
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(d) Should an action not previously designated as priority become a
priority at a later date, a justification shall be submitted through the same
channels and approvals as if it had initially been designated priority.
M-4.203 Socially and Economically Disadvantaged Businesses/8(a) Contracts
When it is known, prior to the preparation of the purchase request/order,
that the purchase is planned to be made from the Small Business
Administration (SBA) under Section 8(a) of the Small Business Act, the
procurement package need not include a Procurement Abstract or
Recommended Source List.
M-4.204 Return and Cancellation of the Procurement Request/Order
(a) It is the responsibility of the contract specialist to review the
procurement request and attachments, if any, to determine if the purchase
descriptions, or specifications, are adequate for procurement action;
accurately reflect the needs of the Government; that all necessary approvals
have been obtained; and such other documents that may be attached and
required are complete and accurate. The term "procurement package" is used
to describe the procurement request, attachments, and required approvals.
(b) If the contract specialist determines that the procurement package is
marginal or unacceptable to initiate procurement action, he or she may return
the procurement package to the initiating activity. The procurement package
will normally be returned by a memorandum explaining the reason, together
with a statement that it is cancelled from the procurement activity's list of
active procurements. The package will be returned through the procurement
activity's record-keeping function.
(c) A procurement package will not be returned if the deficiencies in the
package are such that they can be corrected by an informal discussion with the
initiator.
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EXHIBIT 4-1
US ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON OC 20460
PROCUREMENT
REQUEST/ORDER
1 NAME OP ORIGINATOR
3 MAIL CODE
4 TELEPHONE NUMBER
2. DATE OF REQUISITION
8 DATE ITEM REQUIRED
8 SIGNATURE OF ORIGINATOR
7 RECOMMENDED PROCUREMENT METHOD
8 DELIVER TO r*enKrMaf
10 MAIL CODE
11 TELEPHONE NUMBER
12 FINANCIAL DATA
111 APPROPRIATION
NOTE: ITEM 12 (O DOCUMENT TYPE-CONTRACT" 'C.' PURCHASE
ORDER • "P." IGA = 'A." OTHER (Mac.1 m "X"
FMObSE
DOCUMENT
CONTROL NUMBER
ACCOUNT NUMBER
OBJECT
~-
AMOUNT (0)
13. SUGGESTED SOURCE fMm». AUdnu. Of Coda. Phem/Camta,
14 AMOUNT OF MONEY
COMMITTED IS
Q ORIGINAL
Q INCREASE
O DECREASE
18 CONTRACTING OFFICE Q IS Q IS NOT AUTHOR-
IZED TO EXCEED AMOUNT SHOWN BY 10%
18 SERVICING Ff4ANCE OFFICE NUMBER
17 APPROVALS
a BRANCH/OFFICE
DATE
d PROPERTY MANAGEMENT OFFICER/DESIGNEE
DATE
b DIVISION/OFFICE
DATE
a OTHER (Sffofyl
DATE
e FUNDS LISTED ABOVE ARE AVAILABLE AND
RESERVED
DATE
DATE •
18 DATE OF ORDER
19 ORDER NUMBER
20 CONTRACT NUMBER III fan
21 DISCOUNT TERMS
22 FOB POINT
23 DELIVERY TO FOB POINT BY OnvMtmOMW 24 PERSON TAKING ORDER/QUOTE AND PHONE NO
28 CONTRACTOR (Nun*, mddrm. OP CodW
28 TYPE OF ORDER
Da PURCHASE
REFERENCE YOUR QUOTE ISm Bloc* 341
PLEASE FURNISH THE ABOVE ON THE TERMS SPECIFIED ON BOTH SIDES
OF THIS ORDER AND ON THE ATTACHED SHEETS IF ANY INCLUDING
DELIVERY AS INDICATED THE PUHCHASE IS NEGOTIATED UNDER
AUTHORITY OP 41 USC Mild I I
Db
D ORAL D WRITTEN G CONFIRMING
27 SCHEDULE
ITEM
IUMBER
111
SUPPLIES OR SERVICES
IN
(QUANTITY
ORDERED
UNIT
Idl
ESTIMATED
UWT°»CE
HI
UNIT
PRICE
It)
AMOUNT
Ig)
QUANTTV
MXETCO
TOTAL*
28 UNITED STATES OF AMERICA
BY tSignnml
29 TYPED NAME AND TITLE OF CONTRACTING OFFICER
EPA Form 19OO-8 (ftav 4-84) Replace* previous adinona.
and EPA Form 19CO-8T. which ara obaolata
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EXHIBIT 4-2
PROCUREMENT REQUEST RATIONALE CHECKLIST
(to be submitted with EPA Forms 1900-8 and 1900-8A)
Item 1; The title of this procurement is
Item 2; This procurement request package contains the following documents:
(Check all applicable boxes and attach documents as appropriate.)
See Attachment I Check Description
N/A /~7 EPA Forms 1900-8
____ / / Procurement Abstract
____ / / Statement or Scope of Work
/ / Concise Technical Proposal Instructions
/ / Competitive Technical Evaluation Criteria
/ / Justification for Other Than Full and Open
Competition (JOFOC)
____ / / Justification for Management Consulting Services
/ / Justification of Need (Government-Furnished
Property (GFP)/Eguipment)
____ / / Quality Assurance (QA) Review Form
_____ ____/ Recommended Sources List
/ / Reports Description
____ / / Government-Furnished Property Description
Item 3; This procurement / / requires / / does not require management
consulting services. (If management consulting services are required, attach
a justification as prescribed in EPA Acquisition Regulation 1537.205.)
Item 4; This procurement / / involves / / does not involve legal analysis. I
/ / have / / have not discussed this procuremejnt, with the Office of Legal and
Enforcement Counsel (OLEC) which / / concurs / / does not concur with
proceeding with this procurement.
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EXHIBIT 4-2 (Continued)
PROCUREMENT REQUEST RATIONALE CHECKLIST
Item 5; I / / anticipate or have knowledge of / / do not anticipate or have
any knowledge of organizational conflict of interests issues related to this
procurement. (If affirmative, describe conflict in an attachment.)
Item 6; Listed below are special EPA employee(s) who are or will be
participating in EPA's processing or managing of this procurement/ together
with a list of their non-Government employers. Check here if none / /.
EPA Special Employees Non-Government Employer
Item 7; This procurement / / is / / is not based on an Onsolicitated Proposal.
Item 8: To the_best of_my knowledge the work results of this proposed
procurement / / are / / are not available from any other source. (If the
results are available frojn_another source, describe in an attachment.) The
Project Officer / / has / / has not reviewed the Off ice_ of Pesticides and
Toxic Substance extramural activity report. The PO / / has / / has not
consulted the EPA Headquarters Library for relevant reports by previous
Contractors.
Item 9; The proposed Project Officer is .
He/she / / has / / has not been certified as an EPA Project Officer.
Item 10; I / / recommend / / do not recommend prospective sources for this
procurement. (If sources are recommended, list in an attachment.)
Item 11; This procurement anticipates / / a new contract award / / an
additional work modification to existing contract_np. . It
also anticipates that it will be processed as a / / competitive procurement
/ / noncompetitive procurement. (If noncompetitive procurement is recom-
mended, attach appropriate justification as described in Part 1506 of the EPA
Acquisition Regulation.)
Item 12; This proposed procurement is appropriate for / / total small
business/labor_ surplus area (SB/LSA) seb-aside; or / / partial SB/LSA
set-ajside; / / partial SB set-aside; / / 8(a) set-aside; / / LSA set-aside;
or / / none of the above (check only one). (Consult the Office of Small and
Oisadvantaged Business Utilization for advice.)
Item 13a; The estimated period of performance's months after the
effective date of the contract / / inclusive / / exclusive of submission of
any final report which may be required.
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EXHIBIT 4-2 (Continued)
PROCUREMENT REQUEST RATIONALE CHECKLIST
Item 13b; The schedule of deliverable items (excluding reports) is as
follows. Check here if no deliverable items are required /_/.
Delivery
Item No. Description Quantity Date
Item 14; This procurement anticipates that the following options will be
needed. Check here if no options are anticipated / /.
Description of Option Term of Option
(Description may be indicated in a separate attachment)
Item 15; The following reports are required (describe in an attachment).
Check here if no reports are required / /. For each separate report
required, describe the following:
(a) Type of report (e.g., draft, final, interim, special, etc.)
(b) Descriptive title (e.g., monthly progress report)
(c) Minimum content requirements
(d) Number of copies required
(e) Distribution (with complete addresses of all recipients)
(f) Delivery schedule
(g) Number of days the Government will have to review, comment, approve
(disapprove) and return (as appropriate)
Where specific report formats, containing the information above, are used
repetitively, "standard" formats are established or may be established with
the servicing CO. Maximum use of such standard formats is encouraged.
Examples include monthly or other periodic progress reports, financial and
final reports.
Item 16; Peer review of Contractor-generated documents /~7 will be /~7 will
not be required.
Item 17; Government property, data, or services / / will be furnished / /
will not be furnished under this procurementI (If furnished, describe in an
attachment including quantity and date available.)
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EXHIBIT 4-2 (Continued)
PROCUREMENT REQUEST RATIONALE CHECKLIST
Item 18; Budget. (An attachment may be used.)
(a) The total estimated budget for the basic effort and all options is
$ .
(b) The estimated funding for the current fiscal year is $
(c) The estimated total cost of Other Direct Costs is $ .
(If possible, indicate estimate of significant subiterns such as
travel, computer time, consultants, equipment and material.)
(d) For level of effort actions and other actions where hours, rather
than an end product, are to be purchased, indicate for the basic and
all option periods the number of hours required, by category, with
definitions for each category.
Item 19; This procurement / / is / / is not subject to the requirements of
OMB Circular A-76. (If A-76 applies, required documentation must be provided
with the PR.)
Item 20; This procurement / / requires / / does not require priority
processing (a brief priority justification may be attached).
(To be completed by procurement office:)
/ / Approved / / Disapproved
Date Chief, Contracting Office
Item 21; This procurement / / will / / will not involve the testing of human
subjects in accordance with EPA Order 1000.17.
Item 22; This procurement / / does / / does not include acquisition of
membership in an association. (If membership in an association is included,
attach a certification indicating that the primary purpose of membership is
to obtain direct benefits for EPA necessary to the accomplishment of its
functions or activities.)
Item 23; This procurement / / is / / is not for leasing of motor vehicles.
(If affirmative, attach certification per FAR 8.1102.)
Item 24; This procurement / / is / / is not to be funded from more than one
appropriation.
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TABLE OF CONTENTS
CHAPTER 5
M-5.000 PROPOSAL EVALUATION, NEGOTIATION, AND AWARD
M-5.001 Introduction
M-5.002 ApplicabUity
M-5.003 Policy
5-1
5-1
5-1
M-5.100 SOURCE EVALUATION BOARD STRUCTURE AND 5-3
RESPONSIBILITIES AND DUTIES OF PARTIES INVOLVED
M-5.101 Introduction 5-3
M-5.102 Source Evaluation Board Structure 5-3
M-5.103 Duties and Responsibilities of Parties Involved 5-3
M-5.103-1 Head of the Contracting Activity 5-3
M-5.103-2 Source Selection Official 5-4
M-5.103-3 Source Evaluation Board 5-4
M-5.103-4 Technical Evaluation Panel 5-4
M-5.103-5 Business Evaluation Panel 5-4
M-5.103-6 Project Officer 5-4
M-5.103-7 Contracting Officer 5-4
M-5.103-8 Contract Specialist 5-5
M-5.103-9 Cost/Price Analyst 5-5
M-5.103-10 Director or Chief of the Contracting Office 5-5
M-5.103-11 Quality Assurance Officer 5-5
M-5.103-12 Other Personnel 5-5
M-5.200 PREPARING FOR THE EVALUATION 5-7
M-5.201 Introduction 5-7
M-5.201-1 Conflicts of Interest 5-7
M-5.201-2 Distribution and Proposal Control 5-8
M-5.201-3 Disclosure of Information 5-9
M-5.201-4 Review of the Solicitation 5-9
M-5.300 PROPOSAL EVALUATION PROCEDURES 5-11
M-5.301 Introduction 5-11
M-5.301-1 Scoring Plan 5-11
M-5.301-2 Scoring Formats 5-12
M-5.301-3 Scoring Illustration 5-13
M-5.301-4 Evaluation Guidelines 5-14
M-5.301-5 Ranking 5-14
M-5.302 Optional Scoring Procedure 5-15
M-5.303 Evaluation Considerations 5-15
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TABLE OF CONTENTS (Continued)
Page
CHAPTER 5 (Continued)
M-5.400 EVALUATION REPORTS
M-5.401 Introduction
M-5.401-1 Source Evaluation Board Report
M-5.401-2 Evaluation Panel Reports
M-5.500 DETERMINATION OF THE COMPETITIVE RANGE
AND DISCUSSIONS
M-5.501 Determination of the Competitive Range
M-5.501-1 Technical Evaluation
M-5.501-2 Business Evaluation
M-5.S01-3 Determination and Documentation
M-5.501-4 Competitive Range Example
M-5.502 Written or Oral Discussions
M-5.502-1 Background
M-5.502-2 Purpose
M-5.S02-3 Limitations
M-5.502-4 Limited Discussions vs. Full Negotiations
M-S.600 PROPOSAL REVISION AND SOURCE SELECTION
M-5.601 Proposal Revisions
M-5.601-1 Notifications
M-5.601-2 Receipt
M-5.S01-3 Evaluation
M-5.602 Source Selection
M-5.602-1 General
M-5.602-2 Source Selection Decision
M-5.602-3 SSO Approval
M-5.603 Negotiations with the Source Selected
M-5.7QO AWARD NOTIFICATIONS AND DEBRIEFINGS
M-5.701 Award Notifications
M-5.701-1 Preaward Notifications
M-5.701-2 Postaward Notices
M-5.702 Debriefings
M-5.800 PROTESTS
M-5.801 Introduction
M-5.802 Protests to EPA Only
M-5.802-1 Pre-Award Protests
M-5.802-2 Post-Award Protests
M-5.803 Protests to the GAO
M-5.803-1 Time for Filing
5-17
5-17
5-17
5-17
5-21
5-21
5-21
5-22
5-22
5-22
5-23
5-23
5-23
5-23
5-24
5-25
5-25
5-25
5-25
5-25
5-26
5-26
5-26
5-26
5-26
5-27
5-27
5-27
5-27
5-27
5-28.1
5-28.1
5-28.1
5-28.1
5-28.2
5-28.2
5-28.3
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TABLE OF CONTENTS (Continued)
CHAPTER 5 (Continued)
M-5.803-2 EPA Actions Required
M-5.803-3 GAO Decision Time
M-5.803-4 GAO Authority
M-5.804 Protests to the GSBCA
M-5.804-1 Time for Filing
M-5.804-2 EPA Actions Required
M-5.804-3 GSBCA Authority to Suspend Award
M-5.804-4 GSBCA Hearings and Decision Authority
5-28.3
5-28.4
5-28.4
5-28.5
5-28.5
5-28.5
5-28.6
5-28.6
EXHIBITS
5-1
5-2
5-3
5-4
5-5
Source Evaluation Structure 5-29
Technical Evaluation Scoring Format 5-31
Alternate Scoring Format - Proposal Technical Evaluation 5-33
Optional Scoring Procedure - Proposal Technical Evaluation 5-39
EPA Form 1900-26 5-41
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CHAPTER M-5.000
PROPOSAL EVALUATION, NEGOTIATION, AWARD, AND PROTESTS
M-5.001 Introduction
The area of source evaluation is extremely critical to the successful
accomplishment of the acquisition process. Here, you, as the Project Officer,
and other key members are involved in the review of proposals that have cost
thousands of dollars to prepare and will result in the obligation of substantial
amounts of Government funds. This Chapter sets forth both the rules and
responsibilities of the participants and sequentially sets forth the steps of the
evaluation process.
M-5.002 Applicability
The provisions of this Chapter apply to all competitive negotiated
procurements in excess of $25,000 except architect-engineering services.
M-5.003
EPA personnel shall conduct source evaluation and selection in
accordance with consistent standards and procedures that ensure fair and
impartial treatment of all offerers.
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M-5.100
SOURCE EVALUATION BOARD STRUCTURE AND
RESPONSIBILITIES AND DUTIES OF PARTIES INVOLVED
M-5.101 Introduction
The Contracting Officer is responsible for performing all administrative
actions leading to the award of a contract and occupies a key role in the
source selection process. The need for management oversight of the
administrative actions leading to contract award increases for larger dollar
procurements since such procurements usually have a significant impact on the
Agency's ability to accomplish its mission. This management oversight is
accomplished by the monitoring of the evaluation and selection process by
senior procurement officials and their review and approval of major pre-award
decisions.
M-5.102 Source Evaluation Board Structure
Exhibit 5-1 at the end of this section sets forth the structure of EPA's
source evaluation process. Respective duties of the personnel are set forth in
M-5.103.
M-5.103 Duties and Responsibilities of Parties Involved
Your responsibilities as the Project Officer and other participants in the
Source Evaluation Board are set forth below.
M-5.103-1 Head of the Contracting Activity
The Director, Procurement and Contracts Management Division (PM-214),
is the Head of the Contracting Activity (HCA). The functions of the Head of
the Contracting Activity include monitoring the source evaluation and
selection process, providing guidance and direction when appropriate,
participating in the selection process in specified instances, and ruling on
requests for deviations and exceptions to the Agency's policy and/or
procedures regarding source evaluation and selection. The HCA will serve as
the Source Selection Official for acquisitions in excess of $5 million.
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M-5.103-2 Source Selection Official
The Source Selection Official (SSO) is the official responsible for overall
management of the source selection process. Duties of the SSO include
appointing the members and chairpersons of the Source Evaluation Board, the
Technical Evaluation Panel, the Business Evaluation Panel, and approving the
solicitation document including any amendments. The SSO approves the
competitive range and and makes the source selection decision.
M-5.103-3 Source Evaluation Board
The Source Evaluation Board (SEB) consists of a chairperson, who is
responsible for all of the procedural and administrative aspects of the SEB,
and other specialists—e.g., technical, procurement, and financial—as may be
deemed appropriate by the SSO. An attorney from the Office of General
Counsel should serve in an advisory role to the SEB. The SEB makes
recommendations to the SSO on selection of a contractor for award.
M-5.103-4 Technical Evaluation Panel
The Technical Evaluation Panel (TEP) develops the evaluation criteria and
the Statement of Work for the solicitation and performs the technical
evaluation of offers. All members of the TEP must review all proposals
initially submitted in response to a solicitation. Unless approved in advance by
the SSO, only individuals who evaluated initial proposals may evaluate revised
proposals submitted after determination of the competitive range.
M-5.103-5 Business Evaluation Panel
The Business Evaluation Panel (BEP) reviews the solicitation evaluation
criteria and Statement of Work from a business perspective; evaluates the
business and contractual aspects of the offerers' business proposals; and
considers other factors such as responsibility of the offerers.
M-5.103-6 Project Officer
The Project Officer is the Chairperson of the TEP and as such is
responsible for recommending the TEP membership for the approval of the
SSO. The Project Officer is designated by the EPA program official at
division, office or laboratory director level, with the concurrence of the SSO,
as the technical representative for the procurement action.
M-5.103-7 Contracting Officer
The Contracting Officer serves as Chairperson of the BEP and as such
coordinates the activities of the BEP membership. He/she makes competitive
range decisions and prepares the source selection decision for the SSO's
subsequent approval.
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M-5.103-8 Contract Specialist
This Government employee is assigned the responsibility for the
procurement action and for the accomplishment of the administrative duties
necessary for and leading to a contract. Responsibilities of the contract
specialist include, but are not limited to, preparing the solicitation document,
arranging and conducting pre-proposal conferences, conducting negotiations,
ensuring complete and accurate documentation of the official contract file,
preparing the competitive range determination and source selection
memorandum at the direction of the Contracting Officer, and preparing the
contractual instrument. The contract specialist is also responsible for
receiving, safeguarding, and distributing offers to the TEP and BEP. The
contract specialist is always a member of the BEP.
M-5.103-9 Cost/Price Analyst
The cost/price analyst is responsible for evaluating the financial aspects
of the proposals, which includes performing preliminary evaluations of the cost
proposals and detailed cost and price analyses. The cost/price analyst is
always a member of the BEP when the value of the procurement exceeds
$500,000.
M-5.103-10 Director or Chief of the Contracting Office
The Director or Chief of the Contracting Office is the senior EPA
individual classified in the GS-1102 series having assigned responsibilities for
the management and operations of the contracting activities at a specific
location, i.e., Washington, D.C.; Research Triangle Park, North Carolina; or
Cincinnati, Ohio. These individuals are also "Chiefs of the Contracting
Offices." The Director or Chief of the Contracting Office monitors the
solicitation preparation, the source evaluation and selection process, serves as
SSO in specified instances, and provides advice or guidance when required.
M-5.103-11 Quality Assurance Officer
For Procurement Requests involving environmentally related
measurements and requiring QA/QC documentation in the offerers1 proposals,
the Quality Assurance Officer may be a member of the Technical Evaluation
Panel (TEP) for the purpose of evaluating the adequacy of the offerers1
QA/QC documentation.
M-5.103-12 Other Personnel
Only regular or special employees of EPA or employees of other Federal
Government agencies may participate in the evaluation and selection process.
Employees of contractors do not participate either formally or informally in
the evaluation/selection process.
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M-5.200
PREPARING FOR THE EVALUATION
M-5.201 Introduction
As a participant in the selection process, you must know the concerns and
responsibilities that must be addressed prior to initiation of the evaluation.
They are as follows:
M-5.201-1 Conflicts of Interest
(a) The Code of Federal Regulations (40 CFR Chapter 1 Part 3)
prescribes the high ethical standards of conduct required of each EPA
employee in carrying out his or her duties and responsibilities. You must be
familiar with the provisions of Part 3 regarding conflicts of interest and
inform the source selection official in writing if your participation in the
source evaluation and selection process could be interpreted as a possible or
apparent conflict of interest. If the source selection official determines that
you have a conflict of interest, you will be relieved of further duties in
connection with the evaluation and selection process and a successor will be
designated.
(b) Members of the Source Evaluation Board, including the Business
Evaluation Panel and the Technical Evaluation Panel, will be told to determine
that:
(1) All members are regular or special employees;
(2) No member's spouse or minor child holds a financial interest in any
contract or firm from whom a proposal is received;
(3) No member is an officer, director, employee, partner, nor consultant
to an offerer from whom a proposal was received;
(4) No member is negotiating for nor has any arrangement concerning
future employment with any offeror.
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(5) No member's family has a relationship with an offerer which could
present the appearance of a conflict of interest or impropriety.
(c) In addition to being concerned with any personal conflict of interest
problem, you, as a member of the evaluation panel, must be aware of the
conflict of interest regulations stated in 48 CFR Part 1503 regarding current
or former EPA employees. These regulations deal with conflicts of interest
and improper influence or favoritism in connection with contracts involving
current or former employees. They state:
(1) No contract may be awarded without competition to a current
regular or special EPA employee or to a former regular or special
EPA employee whose employment terminated within 365 days before
submission of a proposal to EPA. Likewise, no contract is to be
awarded without competition to a firm which employs, or proposes to
employ, a current regular or special EPA employee or a former EPA
regular or special employee whose employment terminated within 365
calendar days before submission of a proposal to EPA. These
restrictions apply if either of the following conditions exists:
(0 The current or former EPA regular or special employee is or
was involved in developing or negotiating the proposal for the
prospective contractor.
(ii) The current or former EPA regular or special employee will be
involved directly or indirectly in the management,
administration, or performance of the contract.
The foregoing restriction may be waived in writing by the Assistant
Administrator for Administration and Resources Management if the
award would not involve a violation of the U.S.C. code, EPA
regulations at 40 CFR Part 3, or the Federal Acquisition Regulation
at 48 CFR 3.602 and if the award would be in the best interests of
the Government.
(2) The above prohibition does not apply to competitively awarded
contracts. However, such awards must not involve violation of 18
U.S.C. 205, 18 U.S.C. 207, 18 U.S.C. 208, or 48 CFR 3.601 and must
not be based on improper influence or favoritism arising out of an
EPA employee's current or former EPA employment.
If a conflict is perceived of this nature, inform the Contracting Officer in
writing.
M-5.201-2 Distribution and Proposal Control
(a) Offerers' identities, offer contents, and prices shall be treated with
the utmost discretion to avoid compromising the evaluation results or giving
any offerer an unfair competitive advantage. Any questions regarding the
receipt and distribution of offers, status of the proceedings, or other matters
shall be referred to the CO or designated contract specialist.
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(b) After receipt of proposals, the contract specialist will serially
number all proposal copies received, distribute the required number of
proposal copies to the TEP and BEP, and be responsible for the collection and
final disposal of proposal copies. The panel chairpersons must maintain a log
of proposal distribution within the TEP and BEP. The contract specialist will
destroy all excess copies of proposals in a timely manner. The original copy of
each unsuccessful proposal should be retained by the contract specialist as a
reference in conducting debrief ings. A minimum of two copies of the
successful proposal should be retained (contract file copy/Project Officer file
copy) for reference in administering the contract. Final disposition of the file
shall be accomplished in accordance with the EPA Records Management
Manual.
M-5.201-3 Disclosure of Information
During the course of evaluation and selection, you must not reveal any
information concerning the evaluation (except as may be required for internal
clearance or technical assistance) to anyone who is not participating in the
same evaluation proceeding. The right to information during the evaluation
process does not extend to your supervisor. However, this does not preclude
reasonable status reports of activities on a "need to know" basis to persons
having procurement responsibility, provided that no information relating to the
status or content of a specific proposal is disclosed. Of particular concern
here is that you realize that no discussion should be held with either offerers
or other organizations which have requested information regarding the
evaluation. Such inquiries should be referred to the Contracting Officer.
M-5.201-4 Review of the Solicitation
Each member of the TEP, in preparing for proposal evaluation, must be
familiar with the technical proposal instructions, the technical evaluation
criteria and weights, and the scoring plan. Familiarity and understanding
between panel members will ensure consistent, timely, and accurate
evaluation.
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M-5.300
PROPOSAL EVALUATION PROCEDURES
M-5.301 Introduction
Evaluation of technical proposals involves the evaluation and scoring of
each offerer's proposal, and reporting the Technical Evaluation Panel findings
to the Contracting Officer. The considerations and steps involved in the
evaluation and scoring of proposals are addressed in this section with reporting
requirements set forth in M-5.400.
M-5.301-1 Scoring Plan
(a) The scoring of offers is accomplished through the use of the Scoring
Plan as shown on the next page. The Scoring Plan consists of narrative
descriptive statements and numerical values for each statement. These
predetermined numeric values are on a scale of zero through 5. The scoring
plan must be used in conjunction with the numeric weights set forth in the
technical evaluation criteria to arrive at offerer's scores for each element and
subelement of their proposals.
(b) Values assigned to technical evaluation elements in proposal reviews
must be limited to values shown in the Scoring Plan. The use of fractional
values other than 3.5 and 4.5 (e.g., 2.5) is prohibited.
(c) Further discussion of the Scoring Plan values is as follows:
(1) Value of "0" or "1" - The element or subelement of this technical
evaluation criterion is clearly deficient. The "0" or "1" score is used
solely for scoring, ranking, and determination of competitive range.
If, however, the offer attains an overall score, due to high scores in
other technical evaluation criteria, which places it in a sufficiently
high position to be selected for negotiations, the offerer shall be
afforded the opportunity to correct those deficiencies during written
or oral discussions or during final negotiations.
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(2) Value of "2" - The element or subelement of the technical evaluation
criterion contains deficiencies which must be clarified or
substantiated before the offer is fully understood. These deficiencies
should be resolved during written or oral discussions, often called
interrogatories, if conducted, and the offer is to be given a final
score in any supplemental TEP Reports (see M-5.400, Evaluation
Reports) based on the offerer's revised proposal.
(3) Values of "3", "3.5", "4", "4.5", or "5" - The element or subelement of
the technical evaluation criterion is fully understood and there is no
need for clarification by the offerer. However, discussions involving
any such elements or subelements are not precluded. An assigned
value of 3 or higher does not, however, preclude comments on
perceived weakness or areas that could be improved.
SCORING PLAN
Descriptive Statement
The element is not addressed or is totally deficient and without
merit.
1 The element is addressed but contains deficiencies that can be
corrected only by major or significant changes to relevant
portions of the proposal.
2 Clarification is required. Final scoring of the element will be
made following limited discussions or full negotiations, if
discussions or negotiations are held with the offerer.
3 The proposal element is adequate. Overall, it meets
specifications. However, comments should be made on any
perceived weaknesses or on areas in which an offerer could
improve.
3.5 None. (Indicates intermediate merit. If used, you must provide a
narrative to explain the distinction between values 3 and 4.)
4 The proposal element is good with some superior features.
4.5 None. (Indicates intermediate merit. If used, you must provide a
narrative to explain the distinction between values 4 and 5.)
5 The proposal is superior in most features.
M-5.301-2 Scoring Formats
(a) The technical evaluation criteria and numerical weights used in
evaluating offerers1 proposals are developed prior to the issuance of an RFP,
and once adopted, must be applied without change throughout the entire
evaluation.
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(b) Using the criteria and weights mentioned in (a) above, the
Chairperson of the TEP is responsible for the development of the scoring
format (see Exhibits 5-2 and 5-3 for examples). The format must be designed
and reviewed by the Contracting Officer prior to the issuance of the RFP.
The Scoring Plan shown under M-5.301-1 will be used with Exhibit 5-2. Failure
to promptly develop the format may adversely impact the procurement
leadtime. For purchases valued at $500,000 or less, the PO shall use EPA
Form 1900-61, Proposal Technical Evalution, shown in Exhibit 5-4.
M-5.301-3 Scoring Illustration
(a) When reviewing a subelement of an offerer's proposal, it is evaluated
in light of the descriptive statements in the Scoring Plan and assigned a
numeric value corresponding to the appropriate statement. The numeric value
is converted to a percentage factor which is then applied to the numerical
weight assigned to the subelement in the Evaluation Criteria to determine an
offerer's score. Since the numeric values are 0 to 5, the "5" represents 100
percent. Therefore, each whole number represents 20 percent; "0" is 0
percent, "1" is 20 percent, "2" is 40 percent, "3" is 60 percent, etc.
(b) Exhibit 5-2 reflects a typical scoring example showing the assignment
of numerical weights, the application of the scoring plan, the derivation of
individual scores for each technical evaluation criterion, and the overall score
to be used in ranking the offers.
(c) The final decision for assigning a numeric score to individual offers,
when two or more evaluators materially differ, must be resolved through
discussion among the panel membership and arrival at a consensus opinion.
Arriving at a consensus opinion is mandatory. Averaging of individual
member's scores to arrive at an overall panel score is prohibited.
(d) Applying the scoring plan principles discussed in M-5.301-l(c)(l)
through (3) to Exhibit 5-2 will result in the following:
(1) Items H.a, II.d, and Ill.b, "Previous experience the project manager
has had in this type of effort", "Project management organization,"
and "Educational qualifications related to the project performance"
must be discussed with the offerer and the element appropriately
rescored. The clarification offered will be rescored with an
appropriate value.
(2) Items I.b and ILc, "Proposed sources of information", and "Proposed
plan for use of personnel resources in connection with work
performance" should be discussed with any offeror determined to be
in the competitive range and normally would be corrected to an
acceptable condition prior to award to an offeror who has an
evaluated element rated as "0" or "1."
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M-5.301-4 Evaluation Guidelines
The evaluation of offers requires the exercise of careful judgment on the
part of each evaluator. Offers must be carefully read and analyzed before the
scoring plan is applied to any technical evaluation criterion element or
subelement. There are many factors you should consider when analyzing
offers, a sampling of which follows.
(a) Avoid "reading into" or "reading out of any portion of the offer a
meaning other than the exact language appearing in the offer.
(b) Avoid the tendency to interpret the meaning of the offerer's proposal
when the writing is ambiguous.
(c) Avoid any infusion of personal knowledge of an offerer's capabilities
not described in the offer.
(d) Recognize that the assignment of a score to an element or
subelement is subjective and based upon your best reasoned judgment.
(e) Recognize that no two evaluators may assign the same numerical
score to an element or subelement of the evaluation criteria.
(f) Recognize ambiguities, inconsistencies, errors, omissions,
irregularities, and deficiencies that can affect scoring.
(g) Recognize that offerers often use "catch phrases," "buzz words," and
semi-legalistic phraseology which may indicate a lack of thorough
understanding of the solicitation.
(h) Recognize the substantive quality of the proposal and do not be
influenced by form, format, or method of presentation.
(i) Recognize flattery on the part of the offerer.
(j) Avoid forming "first impressions" of an offer that might tend to
influence the score to be assigned.
M-5.301-5 Ranking
The total of assigned numerical scores to an offer when compared to
other offers determines the relative rank of that offer. While the use of
predetermined scores as a cut-off (e.g., no offerer receiving a score of less
than 60 will be considered) for competitive range consideration is prohibited,
the scoring and relative rank of offerers does influence this determination
materially. This is particularly true when an offer, or group of offers, falls
significantly below the lowest score attained by the higher ranking offers.
Each member of the TEP shall independently evaluate and score each offer for
procurements in excess of $500,000. The average of individual TEP members'
scores to arrive at an overall panel score is prohibited. However, discussions
between evaluators to understand conflicting views is acceptable. The final
overall ranking is the responsibility of the TEP Chairperson.
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M-5.302 Optional Scoring Procedure
A combined checklist-scoring system is to be utilized where procurement
actions not in excess of $500,000 are involved. The combined
checklist-scoring system appears in Exhibit 5-4 at the end of this section. The
evaluatoKs) use a separate page 2 for each evaluation criterion.
M-5.303 Evaluation Considerations
In addition to the relative technical ranking of technical offers and the
evaluation of price or cost, consideration must be given to other factors
contained in the solicitation which may influence the selection decision.
These other factors may be used as the discriminating element for determining
the selection of a source between two otherwise substantially equal offerers.
The factors include, but are not necessarily limited to, the following:
(a) Prior Performance. Often evaluators confuse prior performance with
past experience of an organization. An organization's prior performance
concerns such items as: timeliness of work performed, whether the contractor
has been terminated for default, the acceptability of work performed, etc.
Evaluating prior performance is the responsibility of the Contracting Officer
and is not given a relative rating as is the case in evaluating technical
proposals An offerer's record of prior performance may significantly
influence the selection decision. Examples of recent or current seriously
deficient performance may even cause the Contracting Officer to determine
the offerer to be nonresponsible. Therefore, as an evaluator you should
provide (see paragraph (1) below) all information that you may have regarding
any offerers' prior performance record.
(1) In the TEP Supplemental Report, (see M-5.400, Evaluation Reports),
you must include a summary evaluation of the technical aspects of
the offerer's prior performance under contracts requiring similar
work. The summary shall provide an analysis of the offerer's
previous record in providing work of a high quality in a timely and
cost efficient manner.
(2) You may obtain information relating to prior performance from
several sources. For example copies of applicable EPA Form 1900-26
(see Exhibit 5-5) may be obtained from the Quality Assurance Branch
of the Procurement and Contracts Management Division. To gain
information on contracts which may not be included in the 1900-26,
file a request to the Contracting Officer to provide you with a list of
current contracts. The listing will contain Project Officer's names
whom you may contact. Information provided on prior performance
may be evaluated. Current and prior contracts listed in the offerer's
proposal may be reviewed and considered in addition to personal
knowledge of the TEP.
(b) Past Experience. Past experience, on the other hand, relates to the
"content" of work the contractor has performed—e.g., the offerer has
conducted water quality studies, emission analyses, etc. Past experience, if it
has been established as an evaluation criterion, will be evaluated by the TEP.
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(c) Conflicts of Interest. Part 9.500 of the FAR and Part 1509.5 of the
EPAAR impose restrictions on contracting with a firm or individual when
organizational and individual conflicts of interest would occur. The TEP and
BEP Chairpersons must poll the membership of their panels for any personal
knowledge concerning conflict of interest that a member may have about the
firms that have submitted proposals. The results of the poll, including any
information obtained, will be included in the panel report.
Solicitation provisions require offerers to certify that it is not aware of
any information bearing on the existence of any potential organizational
conflict of interest. If the offerer cannot so certify, it is required to provide a
disclosure statement in its proposal describing relevant information concerning
any past, present, or planned interests that may be a potential conflict of
interest. The Contracting Officer is required to evaluate such information and
take appropriate action. It is EPA's policy to avoid,, neutralize, or mitigate
organizational conflicts of interest. If this cannot be done, then the
prospective contractor will be disqualified. When potential or actual conflicts
are identified after award, the contract may be terminated.
An organizational conflict of interest exists when the nature of the work
to be performed under a prospective contract and a prospective contractor's
organizational, financial, contractual, or other interests (including the
interests of its chief executives, directors, consultants, or subcontractors) are
such that (a) award of the contract may result in an unfair competitive
advantage, or (b) the contractor's objectivity in performing the contract work
may be impaired.
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M-5.400
EVALUATION REPORTS
M-5.401 Introduction
The TEP and BEP evaluation of proposals is a continuing activity
throughout the negotiation process. The findings of the panels provide the SEB
with information required to make proper competitive range and source
selection decisions. When a formal SEB is formed, three separate written
reports are prepared. These reports are described in the following
subparagraphs.
M-5.401-1 Source Evaluation Board Report
In procurements where an SEB is convened, the SEB provides the SSO with
a report on its findings. The report is submitted after completion of
discussions or full negotiations, depending on the source selection method
employed, and should include: a description of the acquisition; a summary of
the significant strengths, weaknesses, and risks associated with each offer still
in the competitive range. This summary shall generally be an independent
assessment of the facts and findings appearing in the TEP and BEP reports.
The SEB report contains recommendations for selection; and a statement that
the SEB members are free from actual or potential personal conflicts of
interest.
M-5.401-2 Evaluation Panel Reports
(a) These are formal narrative reports prepared by the TEP and BEP for
submission to the CO. The reports form the basis of negotiation and are the
basis for a major portion of the SEB report, competitive range determination,
and source selection determination. The reports must be in sufficient detail to
be used to debrief offerers as to why they did not receive an award. Each
report shall identify the individuals participating in the evaluation of
proposals. M-5.302 should be consulted regarding the use of simplified
procedures when actions are not in excess of $500,000.
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(b) The CO will advise the TEP Chairperson when the results of the
technical evaluation are to be submitted. Normally, evaluators are given a
period of 14 to 30 calendar days (depending upon the complexity of the
requirement, the number of proposals received, etc.) to evaluate proposals.
(c) Preparation and Submission of the Technical Evaluation Panel Report.
(1) The TEP Report is delivered to the Contracting Officer upon the
completion of the initial technical evaluation of offers received.
This includes a detailed scoring of each offer received and a summary
of facts and findings of significant strengths and weaknesses and risks
associated with each offer. The report must be in sufficient detail to
support a determination of offers meeting the minimum requirements
of the Government, to justify the relative ranking of offers, and to
support the establishment of the competitive range.
(2) The report must include any interrogatories the CO should submit to
offerers to clarify their technical proposals. The CO may add to the
TEP's list any additional interrogations deemed appropriate.
(3) The PO must deliver a supplemental TEP report to the CO upon the
completion of evaluation of revised proposals and prior to final
selection. The supplemental report must include, for each offerer in
the competitive range:
(0 A discussion of whether or not the offerers' cost proposals
adequately reflect their technical proposals and the
requirements of the solicitation;
(ii) A summary evaluation of the technical aspects of each
offerer's record of recent or current performance. The
evaluation of past performance includes an analysis of the
offerers' previous efforts to provide work of a high quality in a
timely, cost-efficient manner. However, past performance is
not a criterion to be scored. Where the offerer is known to
have performed contracts for EPA and for other Government
agencies for comparable work, those agencies should be
contacted for a record of past performance and the CO
contacted for a record of past performance on EPA contracts;
and
(iii) Any changes to the initial technical evaluation scores and a
narrative evaluation based on discussions or negotiations and
the revised proposal. All revised score sheets by each panel
member must be included.
(d) Preparation and Submission of the Business Evaluation Panel Report.
Concurrent with your preparation of the TEP Report, the Chairperson of the
Business Evaluation Panel must prepare a Business Evaluation Panel Report.
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(1) The BEP Report delivered to the Contracting Officer upon the
completion of initial evaluation of the business portion of offers
received includes: a discussion of any factors which might prevent
award to a proposer (i.e., appearance on a suspended/debarred list)
and a preliminary analytical cost evaluation report. The report may
include worksheets or a formal narrative to identify cost elements
which appear unreasonable or questionable. For level of effort
contracts, the report will compare proposed costs with the cost
standards specified in the solicitation, e.g. man-hours per labor
category.
(2) A supplemental BEP Report is delivered to the Contracting Officer
after completing the evaluation of revised proposals and prior to final
selection. The BEP Report narrative is in sufficient detail to permit
the selection of source for final contract award. It includes the
appropriate consideration, analysis, and findings concerning the
following elements of the business proposal of each offerer in the
competitive range:
(0 A detailed cost analysis on the business proposals;
(ii) Evaluation of proposed management structure to be utilized
for performance;
(iiO Evaluation of offerer's subcontracting program as it relates to
small business, labor surplus area concerns, and socially and
economically disadvantaged business enterprises;
(iv) Evaluation of those business elements submitted with each
proposal which could lead to a determination of
nonresponsibility by the Contracting Officer.
(v) Evaluation of the offerer's record of performance under prior
EPA contracts as it relates to timely performance, history of
cost control, requests for changes, and quality of the end
product. The BEP should obtain this information from the
Contractor Performance Evaluation System. Where the
offerer is known to have performed contracts with other
Government agencies for comparable work, the BEP should
contact those agencies for a record of past performance; and
Both the TEP and BEP reports must also include:
(1) A statement that the respective panel members are free from actual
or potential personal conflicts of interest; and
(2) Any information which might reveal that an offerer has an actual or
potential organizational conflict of interest.
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M-5.500
DETERMINATION OF THE COMPETITIVE RANGE AND DISCUSSIONS
M-5.501 Determination of the Competitive Range
(a) Determination of the competitive range is a responsibility of the
Contracting Officer, subject to the approval of the SSO, and involves his or
her consideration of the ranking of the technical proposal, price, cost, and
other factors. The competitive range is comprised of those proposals (taking
into consideration the factors mentioned above) that through a reasonable
amount of written or oral discussions may be considered acceptable to receive
the contract award.
(b) Almost all EPA procurement actions to which this Chapter applies
involve technical factors which are of greater importance than the price or
estimated cost proposed. Accordingly, determination of the competitive range
is made only after evaluation of all offers received and careful consideration
of any possible trade-offs.
(c) When the procurement action is expected to exceed $5,000,000,
complete documentation supporting the competitive range decision is
presented to the HCA for review and approval. The HCA may call for an oral
briefing by the SEB prior to granting approval of the competitive range
decision.
(d) When only one offer is determined to be in the competitive range, the
CO must review the solicitation document to assure that it did not unduly
restrict competition. The competitive range determination must include the
CO's determination that the solicitation is not restrictive. The determination
will also include a discussion of the relevant aspects of the solicitation.
M-5.501-1 Technical Evaluation
The attainment of a particularly high technical score would seem to
indicate that an offer should be considered within the competitive range.
However, upon consideration of the price offered, it may not be practical to
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trade the superior technical aspects of the offer for a significantly higher
price. Generally, the attainment of a high technical evaluation score in itself
is not a sufficient basis for a Contracting Officer's determination that the
offer is within the competitive range. Conversely, an offer with a lower
technical evaluation may meet the minimum requirements of the solicitation
and offer a price that should be given further consideration.
M-5.501-2 Business Evaluation
The business evaluation of offers is an essential element in determining
the competitive range, and is of particular significance where several offers
have received technical scores that are close in numerical value. In such
cases, the business evaluation may be the determining factor in arriving at the
competitive range. Similarly, the factors set forth in M-5.303 may be of such
importance that the offer cannot be reasonably determined to be within the
competitive range.
M-5.501-3 Determination and Documentation
The Contracting Officer makes the determination of the competitive
range for the subsequent approval by the SSO. As with the preceding
discussions regarding evaluations, no stringent rules can, or should, be applied
in determining the competitive range, nor can a mathematical formula be
devised. Where there is reasonable doubt regarding the inclusion of a
particular offer within the competitive range, that doubt is resolved in favor
of inclusion. Because the determination of the competitive range is based on
informed judgment and is complex in nature, all such determinations must be
completely documented to set forth rationale supporting the determination.
M-5.501-4 Competitive Range Example
The following example highlights the principle of determining the
competitive range based on the technical and business evaluations of a group
of offers.
COMPETITIVE RANGE EXAMPLE
Offerer
A Co.
B Inc.
K Co.
D Co.
C Co.
G Co.
Technical Evaluation Score
330
325
275
245
150
125
Cost/Price
$250,000
175,000
145,000
150,000
115,000
92,000
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(a) G Co., while offering the lowest price/cost, has submitted an offer
that is seriously lacking in essential technical qualities. A review of the
scoring would show several technical elements to have been scored as "0" or
"1". Therefore, G will not be included in the competitive range.
(b) A Co., while attaining the highest technical ranking, has offered a
price/cost that is unreasonable for the effort required. If an analysis of the
business proposal shows that several elements of price/cost are unusually high,
but may be susceptible to downward revision, the offer should be included in
the competitive range; however, if those circumstances do not exist, the offer
may be considered to be outside the competitive range because of price/cost.
(c) C Co. has attained a score showing that portions of the proposal do
not meet the minimum requirements. This is also reflected in the business
proposal. The offer should not be considered within the competitive range.
(d) The offers of B Inc., D Co., and K Co. are close with respect to both
the technical evaluation and price/cost offered. Therefore, these three offers
should be included within the competitive range. Depending upon the
circumstances, A Co.'s offer may also be included.
M-5.502 Written or Oral Discussions
M-5.502-1 Background
The Federal Acquisition Regulation (FAR) requires that, except under
specified circumstances, the Contracting Officer conduct oral or written
discussion with all responsible offerers who submit proposals within the
competitive range.
M-5.502-2 Purpose
The purpose of oral and written discussions is to:
(a) Advise the offerer of deficiencies in its proposals so the offerer is
given an opportunity to satisfy the Government's requirement;
(b) Attempt to resolve any uncertainties concerning the technical, or
other terms and conditions of the proposal;
(c) Resolve any suspected mistakes; and
(d) Provide the offeror an opportunity to submit any cost/price,
technical, or other revisions to its proposal.
M-5.502-3 Limitations
The Contracting Officer will chair the Government negotiation team and
all members must use careful judgment in determining the extent of
discussions. They must not engage in technical leveling, technical transfusion,
or auction techniques. Any discussions should scrupulously avoid disclosure of
technical information, ideas, or cost data from any other offeror. No
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indications should be given to any offerer of a price which must be met or
bettered to obtain further consideration since such practice constitutes an
auction technique. On the other hand, this does not prohibit pointing out price
or cost elements that do not appear to be justified, or encouraging offerers to
put forward their most favorable price proposals. In so doing, the price
elements of any other offerer must not be discussed, disclosed, or compared.
M-5.502-4 Limited Discussions vs. Full Negotiations
(a) To satisfy the varying nature of different acquisitions, the
Contracting Officer may suit the negotiation strategy to the circumstances of
the procurement. Factors which influence this decision include the number of
proposals and relative closeness of technical scores and costs.
(b) After determination of the competitive range, the Contracting
Officer may proceed with limited cost/full technical discussions with the firms
in the competitive range, generally through interrogatories, and final in-depth
negotiations with one or more firm(s) still within the competitive range after
evaluation of revised proposals; complete/full cost and technical negotiations
with all firms comprising the competitive range; or a variation of these two
approaches as the circumstances of the procurement dictate. Regardless of
which approach is used, the Contracting Officer should raise cost questions as
early as possible and not defer them to final negotiations. Discussions/
negotiations with contractors in the competitive range shall include questions
on past performance (Government and non-Government) that was less than
satisfactory. Information on past performance may be obtained from program
personnel who have served as Project Officers on relevant contracts, and/or
from the contractor performance evaluations maintained by the Procurement
and Contracts Management Division.
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M-5.600
PROPOSAL REVISION AND SOURCE SELECTION
M-5.601 Proposal Revisions
M-5.601-1 Notifications
All offerers included in the competitive range are notified by the
Contracting Officer at the conclusion of limited discussions or full
negotiations of the opportunity to submit a revised proposal. A final common
cut-off date for receipt of revised proposal and/or confirmation of
negotiations (best and final offer) is established. The notification includes
information to the effect that discussions are concluded; offerers are being
provided the opportunity to submit a revised proposal (which can be a
confirmation of a prior offer); and the confirmation or revised final offer must
be received by the cut-off date specified. Offerers are cautioned to submit
information in support of changes to their initial offeKs). Where limited
negotiations were held, the notice may indicate that further negotiations may
be conducted with the source selected.
M-5.601-2 Receipt
Any revised proposal received after the established final common cut-off
is handled as a "late proposal." In these instances, the prior proposal is
considered as being the offerer's complete submission.
M-5.601-3 Evaluation
Revised proposals are subject to a final evaluation (price or cost,
technical, and other salient factors considered) to the extent deemed
necessary by the Contracting Officer. Evaluations are performed in
accordance with the procedures previously prescribed for use in the evaluation
of initial offers in order to determine the relative ranking of the revised
offers. Any changes to scores resulting from revised proposals must be
substantiated with a complete rationale—Le., written explanation of what
elements of the proposal were changed and how it affected the rating (see
M-5.401-2(c)).
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M-5.602 Source Selection
M-5.602-1 General
The selection of a source is made following receipt and evaluation of all
proposal revisions. The selection of a source or sources is based upon
consideration of the TEP and BEP findings of significant strengths,
weaknesses, and risks associated with each offer, business and management
ratings, price or cost, and other factors which may influence the award
decision. With regard to technical scores, EPA normally uses technical point
ratings of offers in.establishing the relative ranking of offers. Technical point
ratings are useful guides in the evaluation of offers, but they are not
conclusive as to the actual merit of offers. The final merit of the offers is
determined by review of technical evaluation narratives, descriptive ratings,
and other relevant information in addition to point scores. After technical
merit is determined, consideration is given to the price or cost proposed and
other business aspects. Also other factors (record of prior performance,
subcontracting plans, etc.) may properly influence the decision to select one
offer in preference to other offers received as unscored discriminating
elements to determine the winner between two otherwise substantially equal
offers.
M-5.602-2 Source Selection Decision
The Contracting Officer prepares the source selection decision, including:
(a) The source selected;
(b) Comprehensive rationale for the decision including the consideration
given to price or cost, technical merit, and other factors contained in the
solicitation;
(c) A statement of approval of the decision prepared for the signature of
the SSO.
M-5.602-3 SSO Approval
A copy of the source selection decision and supporting materials prepared
by the CO is presented to the SSO for approval of the decision. When the
value of the procurement action is greater than $5 million, complete
documentation supporting the selection is submitted to the HCA.
M-5.603 Negotiations with the Source Selected
Where the Contracting Officer followed some form of limited discussion
with the selected source, further negotiations may be necessary on areas that
had not yet been covered. Such negotiations do not involve material changes
which would alter the basis of the source selection decision.
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M-5.700
AWARD NOTIFICATIONS AND DEBRIEFINGS
M-5.701 Award Notifications
M-5.701-1 Preaward Notifications
When the proposal evaluation period is expected to exceed 30 days, or
when a limited number of offerers have been selected as being within the
competitive range, the Contracting Officer notifies those offerers outside the
competitive range that their proposals are unacceptable. This requirement
applies to purchases over $10,000.
M-5.701-2 Postaward Notices
Promptly after contract award, the Contracting Officer notifies the
unsuccessful offerers, in writing, of the source selected for award, unless the
offerer had been given a preaward notification. This requirement applies to
purchases over $10,000.
M-5.7 02 Debrief ings
(a) When a contract is awarded on a basis other than price, unsuccessful
offers may request a debriefing concerning the basis for the selection decision
and contract award.
(b) Debrief ings are individually conducted only after contract award for
those unsuccessful offerers who submit a written request that has been signed
by a corporate official, senior partner, or other comparable executive of the
organization. Debriefings are conducted by the SSO or his/her designee with
participation by the PO and other specialists the SSO or designee deems
necessary. Debriefings must be absolutely factual and in conformance with
the documentation supporting the approved source selection decision. The
release of information relating to proposals other than the organization being
debriefed is limited in accordance with FAR 15.1001(b).
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(c) Debriefing information will include the Government's evaluation of
the significant weak or deficient factors in the proposal; however,
point-by-point comparisons with other offerers' proposals may not be made.
Debriefing must not reveal the relative merits or technical standing of
competitors or the evaluation scoring. Moreover, debriefing must not reveal
any information that is not releasable under the Freedom of Information Act;
for example:
(1) Trade secrets;
(2) Privileged or confidential manufacturing processes and techniques;
and
(3) Commercial and financial information that is privileged or
confidential, including cost breakdowns, profit, indirect cost rates,
and similar information.
(d) The Contracting Officer will include a summary of the debriefing in
the contract file.
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M-5.800
PROTESTS
M-5.801 Introduction
Interested parties may object to a solicitation, a proposed contract award,
or the award of a contract by filing a protest, in writing, to the Contracting
Officer, the General Accounting Office (GAO), or in the case of acquisition of
ADP equipment or services to the Contracting Officer, to the GAO, or to the
General Services Board of Contract Appeals (GSBCA). Interested parties are
defined as "an actual or prospective offerer whose direct economic interest
would be affected by the award of or failure to award a particular contract."
Protests are categorized either pre- or post-award and are concerned with the
propriety of the solicitation and award process, not with contractual disputes.
M-5.802 Protests to EPA Only
Pre- and post-award protest made to EPA only are handled in accordance
with the rules established in the FAR, Subpart 33.1 and EPA Acquisition
Handbook, Unit 7.
M-5.802-1 Pre-A ward Protests
(a) When a written protest against making award is filed only with the
EPA, the Contracting Officer must not proceed with award until the matter is
resolved unless it can be determined that:
(1) The items being solicited are urgently required;
(2) Performance or delivery will be severely delayed if award is not
made promptly; or
(3) It is advantageous to the Government to make prompt award.
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(b) If the Contracting Officer determines that award should be made
because of one of these factors, he or she must prepare a written justification
and obtain concurrence for award from the Office of General Counsel and the
Head of the Contracting Activity.
(c) If the Contracting Officer or a higher official in EPA sustains a
pre-award protest the following are actions which may be taken:
(1) If the sustained protest is in regard to a defective solicitation, the
solicitation will either be modified or withdrawn;
(2) If the sustained protest is in regard to award to another offerer, the
apparently successful offerer's proposal will be rejected; or
(3) If the sustained protest does not affect the validity of the
solicitation, and if the protester's proposal is low, he or she may
receive award, provided the Government still requires the supplies or
services being acquired.
M-5.802-2 Post-Award Protests
(a) When a written protest against an awarded contract is filed with EPA
only, the Contracting Officer need not suspend contract performance or
terminate the awarded contract unless it appears likely that the award will be
invalidated and delayed delivery of supplies or services is not "prejudicial to
the Government's interest." In this event, the Contracting Officer will
consider making a mutual agreement with the contractor to "suspend
performance on a no-cost basis."
(b) If the Contracting Officer or a higher official in EPA sustains a
post-award protest, the following are actions which may be taken, according
to the circumstances of the contract:
(1) Cancel the award as being void;
(2) Terminate for convenience; or
(3) Allow the improper award to stand.
(c) Note that the decision to let an improper award stand should be based
on several factors including (1) the degree of performance, (2) the need to
prevent performance delays, and (3) the incumbent contractor's good faith in
entering into the contract.
M-5.803 Protests to the GAP
The Competition in Contracting Act of 1984 (CICA) amended the Budget
and Accounting Act, Chapter 35, of Title 31, U.S. Code, to provide that
protests concerning alleged violation of a procurement statute or regulation
shall be decided by the Comptroller General if filed with the GAO in
accordance with the statute and implementing GAO procedures published in
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Title 4, Part 21 of the Code of Federal Regulations (CFR) entitled "Bid
Protest Procedures."
M-5.803-1 Time for Filing
Protests based on alleged improprieties in a solicitation which are
apparent prior to bid opening or the closing date for receipt of initial proposals
must be filed prior to bid opening or the closing date for receipt of initial
proposals, or, in the case of amendments to the solicitation, not later than the
next closing date for receipt of proposals. In other cases, protests must be
filed not later than 10 days after the basis of the protest is known or should
have been known. Under the prescribed procedures, if an offerer initially
submits a protest to the Contracting Officer, any subsequent protest to the
Comptroller General must be filed within 10 days after receipt of formal
notification of, or actual or constructive knowledge of initial adverse action
taken by the Agency.
M-5.803-2 EPA Actions Required
(a) The GAO will notify the Contracting Officer within one day by
telephone of the receipt of a protest. If the award has already been made, the
contractor must be notified of the protest; protests filed before award will
require that the Contracting Officer notify all offerers "who appear to have a
substantial and reasonable prospect of receiving an award if the protest is
denied."
(b) Upon notification of receipt of the protest by the GAO, the
Contracting Officer has 25 work days to prepare a report for submission to the
GAO or 10 work days after receipt of a GAO determination to use the express
option. Copies of the submitted report must also be furnished to all interested
parties. The following should be included in the Agency report:
(1) Copy of the protest;
(2) Copy of the protesting offerer's proposal;
(3) Copy of the proposal being considered for award or proposal which is
being protested;
(4) Copy of the solicitation, including specifications or portions relevant
to the protest;
(5) The abstract of bids or offers or relevant portions;
(6) Any other documents relevant to the protest;
(7) A statement which explains the Contracting Officer's actions and the
reasons behind them; and
(8) Findings, actions, recommendations, and other information necessary
for determining the validity of the protest.
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(c) When EPA has received notice from the GAO of a pre-award protest
filed directly with the GAO, the Contracting Officer cannot award a contract
unless the Head of the Contracting Activity determines in writing that:
(1) Urgent and compelling circumstances which significantly affect the
interest of the United States will not permit waiting the decision of
the GAO; and
(2) Award is likely to occur within 30 calendar days of the written
finding.
(d) If the agency receives a notice from the GAO, within 10 calendar
days after award of a contract, that a protest has been filed against the
award, the Contracting Officer must immediately suspend performance or
terminate the contract. An exception to this requirement is that the Head of
the Contracting Activity may authorize performance upon a written finding
that, (i) contract performance will be in the best interest of the United States;
or (ii) urgent and compelling circumstances that significantly affect the
interest of the U.S. will not permit waiting for the GAO's decision. Contract
performance may not be authorized until the agency has notified GAO of the
above finding.
When it is decided to suspend performance or terminate the awarded
contract, the Contracting Officer should attempt to negotiate a mutual
agreement on a no-cost basis.
M-5.803-3 GAO Decision Time
The GAO is required to issue its recommendation on a protest within 90
work days, or within 45 calendar days under the express option, unless the
GAO establishes a longer period of time.
M-5.803-4 GAO Authority
(a) When a protest is filed with the GAO, the Comptroller General will
determine whether the solicitation, proposed award, or award complies with
statute or regulation. If the Comptroller General determines that the
solicitation, proposed award, or award does not comply with a statute or
regulation, the Comptroller General may recommend that the Federal agency:
(1) Refrain from exercising any of its options under the contract;
(2) Recompete the contract immediately;
(3) Issue a new solicitation;
(4) Terminate the contract;
(5) Award a contract consistent with the requirements of such statute
and regulation;
5-28.4
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(6) Implement any combination of the above recommendations; or
(7) Implement such other recommendations as the Comptroller General
determines to be necessary in order to promote compliance with
procurement statutes and regulations.
(b) The Comptroller General will make recommendations on protests
without regard to any cost or disruption from terminating, recompeting, or
reawarding the contract.
If a protest is sustained, the GAO may declare that the protestor is
entitled to the cost of filing and pursuing the protest, including attorney fees
and bid and proposal costs. Cost awarded by the GAO must be paid promptly
by the agency from agency funds.
M-5.804 Protests of the GSBCA
An interested party may file a written protest concerning a solicitation
for bids or proposals to a proposed contract for the procurement of ADP or
ADP services, or a proposed award or the award of such contract conducted
under the authority of Section 111 of the Federal Property and Administrative
Services Act to the GSBCA. The GSBCA Bid Protest Rules of Procedure are
contained in 48 CFR Chapter 61.
M-5.804-1 Time for Filing
(a) The GSBCA rules provide that protests based on alleged improprieties
of the solicitation which are apparent before bid opening or the closing date
for receipt of proposals shall be filed before bid opening or the closing date for
receipt of initial proposals. Otherwise, the protest shall be filed no later than
10 days after the basis for the protest is known.
(b) GSBCA procedures require that a protester furnish a copy of its
complete protest to the agency official, or the location designated in the
solicitation, or to the Contracting Officer, the same day as the protest is filed
with the Board.
M-5.804-2 EPA Actions Required
(a) The GSBCA procedures state that within one working day after
receipt of a copy of the protest, the agency shall give either oral or written
notice of the protest to all parties who were solicited or, if the solicitation has
closed, only to those who submitted a sealed bid or offer; and written
confirmation of notice and a listing of all persons and agencies receiving
notice should be given to the Board within five working days after receipt of
the protest.
(b) Within 10 work days after the filing of the protest, the agency is
required to file with the GSBCA a protest file. Except where the agency
determines under appropriate authority to withhold classified or privileged
information or information that would give a competitive advantage, the
protest file must include the following:
(1) A Contracting Officer's decision, if any.
5-28.5
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Rev. No. 2-9/30/85
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(2) The contract, if any.
(3) All relevant correspondence.
(4) Affidavits or statements of witnesses on the matter under protest.
(5) All documents relied upon by the Contracting Officer in taking the
action protested.
(6) A copy of the solicitation, the protester's bid or proposal and, if bid
opening has occurred and no contract has been awarded, a copy of
any relevant bids and the bid abstract.
(c) No later than IS work days after the filing of the protest, the
Contracting Officer must file its answer to the Board setting forth its defense
of the protest.
M-5.804-3 GSBCA Authority to Suspend Award
If a protest contains a timely request for a suspension of procurement
authority, the Board will hold a hearing no later than 10 calendar days after
the filing of the protest. The Board will suspend the procurement authority
(DPA) unless the agency establishes that:
(1) Absent suspension, the contract award is likely within 30 calendar
days; and
(2) Urgent and compelling circumstances which significantly affect
interests of the United States will not permit waiting for the decision.
M-5.804-4 GSBCA Hearings and Decision Authority
(a) The Board will hold a hearing on the merits of a protest no later than
25 work days after the protest filing and a decision on the merits of a protest
will be issued within 45 work days after the filing of a protest, unless the
Board's Chairman determines that the unique circumstances of the protest
require a longer period.
(b) The Board is required to conduct such proceedings and allow such
discovery as may be required for the expeditious, fair, and reasonable
resolution of the protest. In making a decision on the merits of protests
brought under this authority, the Board is required to give due weight to the
policies of the protest authority section of the CICA, and the goals of
economic and efficient procurement. The Board may take one or more of the
following actions:
(1) The Board may dismiss a protest the Board determines is frivolous or
which, on its face, does not state a valid basis for protest.
5-28.6
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Rev. No. 2-9/30/85
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(2) If the Board determines that a challenged agency action violates a
statute or regulation or the conditions of any delegation of
procurement authority, the Board may suspend, revoke, or revise the
procurement authority of the Administrator or the Administrator's
delegation of procurement authority applicable to the challenged
procurement.
(3) In addition when the Board determines that the agency action
violates a statute or regulation or the conditions of a DPA, the Board
may also declare an interested party to be entitled to the costs of
filing and pursuing the protest, including reasonable attorney's fees,
and bid and proposal preparation costs.
(4) The Board may also order any additional relief which it is authorized
to provide under any statute or regulation in addition to actions
authorized under the CICA, Section 2713.
5-28.7
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EXHIBIT 5-1
SOURCE EVALUATION STRUCTURE
sso
SEB
TEP
BEP
Over $5M
Head of the
Contracting Activity
Chairperson1
Chief of the Contracting
Office
TEP Chairperson
BEP Chairperson
Other Specialists
as assigned by SSO
Chairperson (PO)
At least two
other members
Chairperson (CO)
Contract Specialist
and Cost/Price
Analyst
Not Exceeding $5M
As determined by the Chief
of the Contracting Office
Established only when
requested by the Program
Office or SSO. The SSO
will determine the
organizational levels
of individuals to
serve if convened.
Chairperson (PO)*
At least two
other members
Chairperson (CO)*
Contract Specialist
and Cost/Price
Analyst
1 Head of the Contracting Activity or Designee
NOTES:
SSO~Source Selection Official * For procurements valued at $500,000
SEB— Source Evaluation Board or less, the PO may be the only member
TEP— -Technical Evaluation Panel of TEP, and the CO or contract specialist
BEP — Business Evaluation Panel the only member of the BEP.
5-29
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April 1984
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EXHIBIT 5-2
TECHNICAL EVALUATION SCORING FORMAT
(Example)
Evaluation Criteria
I. Adequacy of Technical Proposal
a. Literature search and
investigation methodology
b. Proposed sources of
information
c. Plan for assessing the
value of each publication
d. Correlation of literature to
economic aspects
e. Presentation of findings
II. Project Management
a. Previous experience the
project manager has had
in this type of effort
b. Company resources
available to the project
manager
c. Proposed plan for use of
personnel resources in
connection with work
performance
d. Project management
organization
III. Personnel Qualifications
a. Technical experience of
principal project staff
related to the project
performance
b. Educational qualifications
related to the project
performance
c. Relevant publications
of proposed personnel
Total Score
5-31
Numerical Scoring
Weight Plan
200
40 3
40 1
40
40
40
100
25
25
25
25
100
35
30
35
3.5
3
2
4.5
Individual
Scores
24
28
24
16
10
22.5
10
21
12
21
196.50
Second Edition
April 1984
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EXHIBIT 5-3
ALTERNATE SCORING FORMAT
PROPOSAL TECHNICAL EVALUATION
RFP NUMBER AND TITLE:
OFFEROR:
EVALUATED BY:
DATE:
MAXIMUM SCORE ATTAINABLE: EVALUATION SCORE:
EVALUATION CRITERIA - SCORING PLAN - SCORE
Value Descriptive Statement
0 The element is not addressed or is totally deficient
and without merit.
1 The element is addressed but contains deficiencies
that can be corrected only by major or significant
changes to relevant portions of the proposal.
2 Clarification is required. Final scoring of the
element will be made following limited discussions
or full negotiations if discussions or negotiations are
held with the offeror.
3 The proposal element is adequate. Overall, it meets
specifications. However, comments should be made
on any perceived weaknesses or on areas in which an
offeror could improve.
3.5 Indicates intermediate merit. If used, you must
provide a narrative to explain the distinction
between values 3 and 4.
4 The proposal element is good with some superior
features.
4.5 Indicates intermediate merit. If used, you must
provide a narrative to explain the distinction
between values 4 and 5.
5 The proposal is superior in most features.
5-33
Second Edition
April 1984
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EXHIBIT 5-3 (continued)
INSTRUCTIONS: This form is furnished for your use in evaluating proposals
received in response to the above-cited RFP. Fill in all pages and return to
the Chairperson of the TEP. Be as thorough and explicit as possible in your
responses. Your professional evaluation of the proposal's responses as required
by the Statement of Work, technical proposal instructions, and technical
evaluation criteria. Specify strengths and weaknesses for each evaluation
criterion. If you have questions concerning any proposal, please contact the
Chairperson. For each of the criterion listed below, indicate in what ways the
proposal does or does not meet acceptable standards, and assign a value from
the scoring plan.
I. ADEQUACY OF TECHNICAL PROPOSAL - Maximum of 200 Points
a. Literature search and investigation methodology - 40 points.
Comment on strengths and weaknesses:
Scoring Plan Value: Score:
Page NumbeKs)
b. Proposed sources of information - 40 points.
Comments on strengths and weaknesses:
Scoring Plan Value: Score:
Page NumbeKs)
c. Plan for assessing the value of each publication - 40 points.
Comments on strengths and weaknesses:
Scoring Plan Value: Score:
Page NumbeKs)
5-34
Second Edition
April 1984
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EXHIBIT 5-3 (continued)
d. Correlation of literature to economic aspects - 40 points.
Comments on strengths and weaknesses:
Scoring Plan Value: Score:
Page NumbeKs)
e. Presentation of findings - 40 points.
Comments on strengths and weaknesses:
Scoring Plan Value: Score: __
Page NumbeKs)
II. PROJECT MANAGEMENT - Maximum of 100 points.
a. Previous relevant experience of the project manager - 25 points.
Comments on strengths and weaknesses:
Scoring Plan Value: Score:
Page NumbeKs)
5-35
Second Edition
April 1984
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EXHIBIT 5-3 (continued)
b. Company resources available to project manager - 25 points.
Comments on strengths and weaknesses:
Scoring Plan Value: Score:
Page NumbeKs)
c. Proposed plan for use of personnel resources - 25 points.
Comments on strengths and weaknesses:
Scoring Plan Value: Score:
Page NumbeKs)
d. Project management organization - 25 points.
Comments on strengths and weaknesses:
Scoring Plan Value: Score:
Page NumbeKs)
5-36
Second Edition
April 1984
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EXHIBIT 5-3 (continued)
lU. PERSONNEL QUALIFICATIONS - Maximum of 100 Points
a. Staff technical experience in relation to project - 35 points.
Comment on strengths and weaknesses:
Scoring Plan Value: Score:
Page NumbeKs)
b. Educational qualifications of personnel - 30 points.
Comments on strengths and weaknesses:
Scoring Plan Value: Score:
Page NumbeKs)
c. Relevant publications of proposed personnel - 35 points.
Comments on strengths and weaknesses:
Scoring Plan Value: Score:
Page NumbeKs)
5-37
Second Edition
April 1984
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EXHIBIT 5-3 (continued)
SUMMARY RATINGS
I. Adequacy of Technical Proposal
a. Literature Search
b. Information Sources
c. Assessment Plan
d. Literature Correlation
e. Presentation of Findings
II. Project Management
a. Experience of Project Manager
b. Available Resources
c. Personnel Resources
d. Management and Organization
III. Personnel Qualifications
a. Staff Technical Experience
b. Educational Qualifications
c. Publications
Points Possible
200
40
40
40
40
40
100
25
25
25
25
100
35
30
35
TOTAL SCORE
Value Score
RECOMMENDATION
Technically Acceptable Technically Unacceptable
Conditionally Acceptable
Signature
Date
5-38
Second Edition
April 1984
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EXHIBIT 5-4
OPTIONAL SCORING PROCEDURE
PROPOSAL TECHNICAL EVALUATION
RFP NUMBER AND TITLE:
OFFEROR:
EVALUATED BY:
DATE:
MAXIMUM SCORE ATTAINABLE: EVALUATION
SCORE:
GENERAL COMMENTS:
5-39
Second Edition
April 1984
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EXHIBIT 5-4 (continued)
TITLE OF CRITERION:
(ASSIGNED WEIGHT (in points)
% Value
0 0
20
40
60
1
70
80
90
100
3.5
4
4.5
5
Descriptive Statement
The element is not addressed, or is totally
deficient and without merit.
The element is addressed but contains
deficiencies that can be corrected only by
major or significant changes to relevant
portions of the proposal.
Clarification is required. Final scoring of the
element will be made following limited
discussions or full negotiations if discussions
or negotiations are held with the offerer.
The proposal element is adequate. Overall it
meets specifications.
None.
The proposal element is good with some
superior features.
None.
The proposal is superior in most features.
(Score: % of Assigned Weight
Comments:
5-40
Second Edition
April 1984
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EXHIBIT 5-5
EPA FORM 1900-26
CONTRACTING OFFICER'S EVALUATION Of CONTRACTOR PSRMUMANCI
4. C3NTBACT HO.
V ACTIVITY
*NO «oon«u
I 10. VIMAI. CON-»«CT CC»T
III n«OOTt»TION iCh**H Mi
ie>.s
4. CVAIUAT
1CHC9UI.C
V6
V6
CT3W1 IUSIMCU UMAOIMCNT l»»'CI«NCT ,-ClnM. o.» •/ f
AMD AOVICC TO •(•sonnet. csNiiacwa TM.
«o» *uni«c SOUCITATIOXI
C3MT»ACTi»o ormciin SIOHATUKC
110. OAT«
it. ovCMbb
I vo *
. IO-7M
Second Edition
April 1984
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EXHIBIT 5-5 (Continued)
INSTRUCTIONS
Prepare .n .i-.pucite and distribute as follows:
Orgvul to be forwarded to Headquarters. Contractor Relations Section (PM-214). Washington. D.C. 3)-*<30.
Second »opy :o be retained by Contracting Officer for Contract File.
The 'oilowing jibdetines are :o b« used by the cannacwij Orftc«n responsible in the preparation of 'tie fora at the
r. ot the 'ethnical eruM and.'or acceptance of the final end product of the contract. The uuormicion is to be
aH. a :i ui!l .TjMili 10 program >tat'f personnel or anyone else in the igency an orderly jnd uniform •nettled of
and recording the effectiveness of contractors ji meeting their Contractual commitmenu for future cunsiJ«ra(ion
a MMtiKi jwjijj fiie .ntornuilon will be riletl in chr contract (lie. and with the contra:tor'j bidden ^pplicaiion :i!e The
Contracting Otfuer's b«sine»s rating of the tomnctor and (he Project Officer's tecnnical -attng •*!!! be entered on :he
ajionuted biJJers list b> :he Contractor Relations Section. .All lurm have been numbered to identnv >pe\.Ul<. trutniLtioni
at :hey pertain to iiiJiviJiul items.
Rate Contractor in area* luted below by circling one of the 'ollowmg:
£ lEtcallumi. VC I Very Goodi. A (Avftafai P 'Psori. ar U (Cnaauaiactnryj
PronJe a detailed narrative or background material the rating u based on. Attach additional times. •!' i«».issary. *.o pronae
detailed narrative.
irmtsi
PCLkOWIKIG ITEMS TO 81 PILLBO IN 3V TH6 CCNTNACT AOMINISTRATOR RBSPOKSlSLs PCM 'XE CONTRACT
I thru 4 Setf-ciptaiutoiy.
5 Activity responsible for the project wen as. Washington. D.C.. RTF. Cincinnati; Region No. or Laboratory.
o Self-explanatory
•4t^O
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TABLE OF CONTENTS
CHAPTER 6
M-6.000
M-6.100
M-6.101
M-6.102
M-6.102-1
M-6.102-2
M-6.102-3
M-6.102-4
M-6.102-5
M-6.102-6
M-6.102-7
M-6.103
M-6.103-1
M-6.103-2
M-6.103-3
M-6.103-4
M-6.103-5
M-6.103-6
M-6.103-7
M-6.103-8
M-6.103-9
M-6.200
M-6.201
M-6.202
M-6.202-1
M-6.202-2
M-6.20 3
M-6.203-1
M-6.203-2
M-6.203-3
M-6.203-4
M-6.204
M-6.204-1
M-6.204-2
M-6.204-2(a)
M-6.204-2(b)
CONTRACT ADMINISTRATION
INITIAL STEPS IN MANAGING CONTRACTS 6-1
AFTER AWARD
Reviewing the Contract 6-1
Preparing a Contract Administration Checklist 6-2
Required Work 6-2
Deadlines or Timeframes 6-2
Deli ve rabies 6-3
Administrative Duties and Persons Responsible 6-3
Testing, Inspection, and Quality Assurance 6-3
Requirements
Government Obligations 6-4
Payment Provisions 6-4
Post-Award Orientation Conference 6-4.1
Determining the Need for a Conference 6-5
Preparatory Steps 6-5
Agenda 6-6
Conducting the Conference 6-6
Establishing Administrative Authority 6-7
Assuring Project Quality 6-7
Contractor Responsibilities 6-8
Conference Report 6-8
Orientation of Subcontractors 6-8
MONITORING THE CONTRACT WORK 6-9
Introduction 6-9
Relationship between Contract Type and Contract 6-9
Administration and Monitoring
Cost Responsibility: Fixed-Price vs. Cost-Reimbursement 6-10
Cost Responsibility: Risk and Administrative Oversight 6-10
Socioeconomic Programs Affecting Contracting 6-10
Considerations in Monitoring Contracts Awarded 6-11
Under Section 8(a) of the Small Business Act
Payment 6-11
Termination 6-12
Role of the Project Officer 6-12
Role of the PO in Assuring Performance of 6-12
Required Work
Step One: Determining Contractor Obligations 6-13
Step Two: Learning and Monitoring What the
Contractor Is Doing 8-13
Post-Award Orientation Conference 6-13
Reviewing the Contractor's Work Plan 6-13
Second Edition-4/84
Rev. No. 2- 9/30/85
-------
TABLE OF CONTENTS (Continued)
CHAPTER 6 (Continued)
M-6.204-2(c)
M-6.204-2(d)
M-6.204-3
M-6.205
.M-6.205-1
M-6.205-2
M-6.205-2(a)
M-6.205-2(b)
M-6.206
M-6.206-1
M-6.206-2
M-6.206-2(a)
M-6.206-2(b)
M-6.206-3
M-6.207
M-6.207-1
M-6.207-l(a)
M-6.207-l(b)
M-6.207-2
M-6.207-3
M-6.207-4
M-6.207-5
M-6.207-6
M-6.207-7
M-6.207-8
M-6.208
M-6.208-1
M-6.208-2
M-6.208-3
M-6.208-3(a)
M-6.208-3(b)
M-6.208-3(c)
M-6.208-4
M-6.209
M-6.209-1
M-6.209-2
M-6.209-3
M-6.209-4
M-6.209-5
M-6.209-6
M-6.209-7
M-6.209-7(a)
M-6.209-7(b)
M-6.209-7(c)
M-6.209-7(d)
M-6.209-7(e)
M-6.209-7(f)
M-6.209-8
M-6.209-9
Monitoring by Inspection 6-13
Monitoring through Progress Reports 6-14
Step Three: Taking Appropriate Action to Enforce 6-15
Any Contract Requirement Not Being Met
Role of the PO in Assuring Most Beneficial Performance 6-15
Monitoring Performance 6-15
Provisions of the Technical Direction Clause 6-16
Contracts Having a Technical Direction Clause 6-16
Contracts Without a Technical Direction Clause 6-16
Role of the PO in Assuring Quality 6-16
Monitoring Contractor's Work 6-17
Monitoring Contractor's Personnel Assignments 6-17
Key Personnel Clause 6-17
Monitoring Assignment of Non-Key Personnel 6-18
Monitoring Assignment of Work to Outside Subcontractors 6-18
Role of the PO in Assuring Timeliness of Performance 6-18
Completion or Delivery Dates 6-19
Completion Contracts 6-19
Term Form (Level-of-Effort) Contracts 6-19
Relation of Work-Plan to Timeliness 6-19
Obtaining Progress Reports 6-20
Reading Progress Reports 6-20
Analyzing Billings 6-20
Dealing with Delinquencies 6-20
Taking Remedial Action if Necessary 6-20
Summary 6-21
Role of the PO in Monitoring Expenditures 6-21
Monitoring and Controlling to Avoid Waste 6-21
Exercising the Right to Suspend or Disallow Costs 6-22
Monitoring Cost-Reimbursement Contracts 6-23
Limitation of Cost Clause 6-23
Monitoring Status of Contract Funds 6-23
Overruns 6-24
Monitoring Labor-Hour Contracts 6-25
Documentation of Contract Administration Actions 6-25
Records, Logs, and Reports 6-26
Evaluation of Construction Contracts 6-27
Evaluation of Architect-Engineer Contracts 6-27
Verifying Invoices/Vouchers 6-27
Payments 6-30.1
Payments Clause 6-30.1
Determining Allowable Costs 6-31
Reasonable Costs 6-31
AUocable Costs 6-31
Accounting Principles for Determining Allocability 6-32
Costs Specifically Limited or Excluded 6-32
Processing Payments 6-32
Paying a Fixed Fee 6-34
Limitation of Cost Clause 6-34
Conclusion 6~34
Second Edition-4/84
Rev. No. 2- 9/30/85
-------
TABLE OF CONTENTS (Continued)
CHAPTER 6 (Continued)
M-6.300 ADMINISTRATION OF GOVERNMENT PROPERTY
IN CONTRACTOR'S POSSESSION
M-6.301 Introduction
M-6.302 Project Officer Duties and Responsibilities
M-6.303 Procedure
M-6.304 Actions Involving Other Property Accountable
Area Offices
M-6.305 Written Property Control Procedures by Contractors
M-6.306 Property To Be Furnished and/or Acquired After
Inception of the Contract
M-6.306-1 Needed Information
M-6.306-2 Disclosure of Unauthorized Property
M-6.306-3 Subcontractors
M-6.306-4 Accessory Item
M-6.307 Monitoring Activities
M-6.307-1 Review of Reimbursement Vouchers
M-6.307-2 Inventories
M-6.307-3 Inspections
M-6.307-4 Preventive Maintenance
M-6.307-5 Changes, Modifications, or Alterations to Property
by Contractors
M-6.307-6 Return/Transfer of Property
M-6.308 Transportation Considerations
M-6.309 Packing and Crating
M-6.310 Declaration Concerning Contamination of Equipment
M-6.311 Trade-In of Property
M-6.312 Lost, Stolen, or Damaged Property
M-6.313 Disposal of Installed Personal Property
M-6.314 Sale of Property
M-6.315 Suspension of Payment
M-6.316 Short-Term Loan of Property
M-6.317 Revocable License Agreements
M-6.318 On-Site Transfer of Equipment to a New Contractor
6-35
6-35
6-35
6-36
6-36
6-36
6-37
6-37
6-37
6-37
6-37
6-38
6-38
6-38
6-39
6-39
6-39
6-40
6-40
6-40
6-41
6-42
6-42
6-42
6-43
6-43
6-43
6-43
6-44
EXHIBITS
6-1 Sample Contract Administration File Plan
6-2 EPA Form 1900-27 - Project Officer's Evaluation of
Contractor's Performance
6-45
6-47
Second Edition
April 1984
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CHAPTER M-6.000
CONTRACT ADMINISTRATION
M-6.100 Initial Steps in Managing Contracts After Award
M-6.101 Reviewing the Contract
(a) The first step of contract administration is to review the
requirements and specific obligations set forth in the contract. The Statement
of Work (SOW) or the contract specifications contain the details of these
requirements and obligations. It is important to note that although the Project
Officer may have written the SOW or specifications it is imperative that the
Project Officer review the entire contract package in order to properly
discharge his/her responsibilities as a Project Officer.
(b) It is a fundamental rule of contract law that the obligations of the
parties (in this case, the contractor and the Government) are established and
governed by_ the language of the contract. During negotiations, the parties
may have made various proposals and counterproposals, but what actually
governs is precisely what was agreed to by both parties in the contract. The
final written contract is assumed to be exactly what the parties agreed to.
The words of the contract are taken to mean exactly what they say. If one of
the parties has intentions contrary to what is contained in the words of the
contract, that intention has no legal effect. What governs is what the
contract actually says, not what was meant to be said.
(c) The PO is concerned with determining what are to be the final results
and should review the contract along these lines. The Contracting Officer or
the PO must require the contractor to do that which is provided for in the
contract, within the level of quality provided for in the contract.
(d) Contracts for equipment or supplies are usually straightforward with
regard*to quality levels. The contractor delivers the items called for, they are
inspected, and either accepted or rejected. In cases where the contract is for
services or research, the determination of results is much more complex. The
6-1
Second Edition
April 1984
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Government is acquiring the effort of the contractor; there is a need to know
what kind of effort has been purchased, what the required result should be, and
what quality standards have been incorporated into the contract.
M-6.102 Preparing a Contract Administration Checklist
(a) A checklist should be made by the PO for each of the major tasks
included in the contract. The tasks should be outlined in the SOW or in a
schedule of major tasks. If the SOW is of general nature, it will be necessary
to do some analysis to determine what specific tasks will be required for
contract completion.
(b) This checklist serves three purposes:
(1) As a baseline for project management;
(2) As a simple reminder sheet for monitoring contract completion; and
(3) As an aid in post-award orientation.
(c) The PO should list the important administrative requirements for
each task required by the contract. They include administrative duties,
Government obligations, deliverables, inspection requirements, deadlines, and
payment provisions. The list should be simple and easy to use, yet it must be
complete and provide a basis for efficient contract administration. The
step-by-step preparation of the checklist is discussed in detail below.
M-6.102-1 Required Work
(a) In identifying the work the contractor is legally obligated to perform
under the contract, certain documents describing the contractor's job may
have been made a part of the contract by the device of "incorporation by
reference." This is necessarily done where selection of the contractor was
based (in part, at least) on the merit of the technical approach the contractor
proposed. In many cases, these documents are not actually attached to the
contract but may be obtained from the Contracting Officer. Such materials
might be:
(1) Detailed specifications that describe characteristics of what the
contractor is to provide.
(2) Contractor's proposal that describes features of what was proposed.
It would include what was to be provided by the contractor and its
approach or method.
M-6.102-2 Deadlines or Timeframes
The deadline or timeframe in which each task is to be accomplished
should be established. Where continuing services are required, the frequency
of delivery and beginning and ending dates should be noted. Tasks that must
be accomplished before others can go forward must be highlighted. Any
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"slack" in the timeframes and absolute deadlines should be specially noted.
When the contract specifies a number of days, weeks, months, etc., from date
of award the Project Officer should convert to specific calendar dates.
M-6.102-3 Deliverables
Identify and examine the deliverables called for in the contract. These
may not be the same as the tasks. For example, the contractor may be
required to investigate the effect of extreme heat on a metaL That would be
the task. However, the deliverable might be samples of the metal or a report
on the testing, or both.
M-6.102-4 Administrative Duties and Persons Responsible
(a) Identify and list the Government's major administrative duties and
determine the person or persons responsible for each. This step is important
when the contract has any of the following features:
(1) The contract requires Government action for quality assurance.
(2) The contract requires extensive inspection or testing before
acceptance or approval by the Government.
(3) The contract requires the Government to furnish certain property or
information to the contractor.
(4) The contractor is required to perform work or deliver at more than
one location or at more than one time.
(5) The contractor is providing services or products that benefit several
offices, divisions, or agencies.
(6) The Contractor must coordinate activities with several offices,
divisions, or agencies.
(b) Where administrative responsibility is not clearly spelled out in the
contract, program personnel should coordinate with the Contracting Officer to
assure that their roles are clearly defined and understood, that Government
obligations will be carried out properly, and that the contractor's efforts will
be fully monitored.
M-6.102-5 Testing, Inspection, and Quality Assurance Requirements
Special requirements for testing, inspection, and quality assurance in a
contract almost always impact costs because the Government is in effect
buying the extra effort from the contractor that is needed to perform these
functions. Since it is the responsibility of the PO to ensure that the
Government gets what has been purchased, enforcement of these requirements
is important. The PO should examine the contract and note any special
testing, inspection, or quality assurance requirements to the appropriate task.
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In particular, the Project Officer should pay careful attention to the
quality assurance requirements as documented in the Quality Assurance
Project Plan. The QA Project Plan will be incorporated in the contract at the
time of award if the plan has been submitted as part of the technical
proposal. If the QA Project Plan is a contract deliverable, the Contracting
Officer may incorporate the plan in the contract by issuance of a change
order. Any substantive revisions or additions to the QA Project after
incorporation in the contract must be accomplished by a change order. It is
the PO's responsibility to ensure that the contractor maintains a current QA
Project Plan. All substantive changes require the approval of the PO and the
QA Officer in the same manner as the review and approval of the QA Project
Plan when submitted originally.
M-6.102-6 Government Obligations
(a) It is important to determine the obligations of the Government
because just as the Government pays more for special requirements, it pays
less when it undertakes certain responsibilities. For example, the contract
may state that the Government will furnish certain property
(Government-furnished property, or GFP) or information to the contractor. If
such GFP or information is not provided within the timeframe stated in the
contract, the contractor may have an excuse for a delay in performance or
may have a basis for a monetary claim against the Government.
(b) Each obligation of the Government should be listed next to the
associated task of the contractor. The Government person or persons
responsible for respective obligations should be listed as well.
M-6.102-7 Payment Provisions
The last step is to examine any contract provisions relating to payments.
If progress payments are authorized, determine when and under what
conditions the progress payments may be made. Where partial payments are
authorized, they should be noted and the conditions for such progress payments
indicated. Partial payments are usually associated with accomplishment of
major tasks. For example, in the case of a contract for a study, payments may
be authorized after various required interim reports are delivered. It must be
kept in mind that there is a danger in the use of this technique. (The
Contracting Officer will give the procurement extensive consideration before
it is used.) The danger is that each report delivered is a priced item in the
contract. When inspected, accepted, and paid for, there is no recovery. Often
Project Officers view the payment as interim or of a progress payment nature
and if the contractor does not perform, the funds will be recovered. This is
not true! The technique discussed above is no different from a contractor who
has partial payment provisions in a contract to purchase 100 desks. If 5 are
shipped, inspected, accepted, and paid for, there is no recovery, barring fraud
or latent defects.
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M-6.103 Post-Award Orientation Conference
(a) Once the contract administration checklist has been prepared and the
contract has been reviewed, it is often of value to hold a post-award
orientation conference. A conference will help ensure that all portions of the
contract are clearly understood and that all parties are certain as to their
obligations.
(b) The fundamental task of the Government contract administators is to
ensure that the contractor performs the contractual obligations. Post-award
orientation can be a useful device for enhancing good contractor performance
by:
(1) Increasing assurance that the contractor understands what the
contract requires;
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(2) Clarifying the roles of Government personnel who will be
administering the contract;
(3) Clarifying the contract administration procedures to be used.
M-6.103-1 Determining the Need for a Conference
(a) When it is determined that the contractor may not have a clear
understanding of the scope of the contract, its technical details, or the rights
and obligations of the parties, an orientation conference may be held. If the
potential problem areas do not warrant a full conference (for example, if the
procurement is relatively simple), the same effect may be achieved by simpler
means such as a letter to the contractor.
(b) Factors used in determining the need for a conference include:
(1) The relation of the contract to other programs or needs;
(2) Technical complexity;
(3) Urgency of the delivery schedule;
(4) The contractor's record of past performance;
(5) The nature and extent of any pre-award survey that may have been
conducted; and
(6) The contract type and its dollar value.
M-6.10 3-2 Preparatory Steps
(a) After the need for a conference has been established, the
Contracting Officer or designated representative (usually the PO) must take
certain preparatory steps. These are (i) conducting a preliminary meeting of
Government personnel, (ii) setting a time and place for the conference, (iii)
notifying the participants, (iv) preparing an agenda, and (v) appointing a person
to chair the conference.
(b) At the preliminary meeting of Government personnel, a detailed
page-by-page review of the contract and the SOW should be held to determine
all of the Government required actions, assure that all Government personnel
fully understand their respective responsibilities in administration of the
contract, and establish a full understanding and common position with respect
to both the contractual delivery requirements and contractor responsibilities.
At this time, all delivery dates that have been specified in the contract as a
period of time "after date of contract award" should be converted to calendar
dates for purposes of discussions with the contractor.
(c) The contract administration checklist should be utilized as a basic
guide to this review.
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(d) Everyone participating in the preliminary meeting should know that
all aspects of contract administration depend upon a complete understanding
of the SOW and/or specifications. While the contractor is primarily
responsible for understanding the work requirements, it is encumbent upon the
Government to make correct interpretations of the technical documents in
that they are required for evaluating performance and determining the
responsibility for any variation from what is intended. The assumption that
the Government understands its own requirements is not always valid.
Specifications sometimes are ambiguous and that is not always uncovered until
after work has started. Requirements for placing a square peg in a round hole
are not unheard of in Government contracting. Many times, neither the
Government nor the contractor is aware of the practical impact of the
requirements until after the work has begun.
M-6.103-3 Agenda
An agenda for the conference should be created that covers all items that
need clarification or discussion with the contractor to avoid misunderstanding
and to facilitate contract administration. These items might include:
(1) Special contract provisions;
(2) Reporting requirements;
(3) Specifications or other work requirements;
(4) Quality control and testing/inspection requirements;
(5) Monitoring and measuring contract progress;
(6) Billing and payment procedures; and
(7) Oeliverables and delivery dates.
M-6.103-4 Conducting the Conference
(a) The Contracting Officer, or assigned representative, and technical
personnel should attend the conference for the Government. Similar
contractor personnel should also attend. It must be pointed out at the start
that the conference purpose is to explain and clarify contract requirements
and not to make any changes to the contract. If a change is necessary, the
nature of the proposed change and its extent should be clearly identified and
made by the Contracting Officer. The other Government personnel are there
to generally provide information, and not to direct the contractor. The limits
of their authority should be made clear to the contractor.
(b) It is recommended that a checklist be used to ensure that all
essential items are covered during the conference. Each item should be
discussed to the extent necessary to be sure that everyone has a full
understanding of the rights and responsibilities of the parties.
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M-6.103-5 Establishing Administrative Authority
(a) The contractor should be informed of the authority of the Project
Officer and the Project Officer's contract monitors, if any, who are assigned
to the administration of the contract. This can best be done by jiving the
contractor a copy of the letter from the Contracting Officer to the PO which
defines the authority of the Project Officer. The Government should be
advised of the authority of the contractor's personnel.
(b) The contractor must be made aware that the Government is not
bound to make contract adjustments as a result of actions taken by either the
PO or his monitors, unless such action has been'specifically authorized in the
letter of designation or by the contract. Such a statement may be viewed by
some as undercutting the authority of the PO. However, it is not the case.
The statement is made to protect the PO from potential personal liability in
the event the contractor takes actions or incurs costs outside the scope of the
contract based upon what seemed to be the authority of the PO.
(c) As part of the discussion of authority, contractors should be
instructed on the proper routing of correspondence. They must be informed
that technical matters should be addressed directly to the PO, whereas
matters pertaining to questions of fact on the terms and conditions of the
contract must be sent directly to the Contracting Officer. Unless the
contract states otherwise, the contractor should be requested to identify all
correspondence with the applicable contract number and to identify the
appropriate paragraph numbeKs) of the contract to which reference is made.
M-6.103-6 Assuring Project Quality
(a) A very important aspect of work to be performed is the quality
assurance/quality control (QA/QC) program the contractor intends to utilize.
The contractor's reports, submittal requirements, and the Quality Assurance
Project Plan (QAPP) form the baseline upon which the contractor's results
may be compared for acceptability with respect to technical and data quality
objectives. The QAPP should provide for efficient and systematic inspection
of all work to be performed, and for effective corrective actions when needed.
(b) The Government's inspection plan is somewhat more limited than that
of the contractor. Accordingly, the Government must be satisfied that the
contractor's QAPP and other appropriate reports to the PO will result in the
required level of data quality. The Project Officer should routinely receive
copies of all contractor inspections, internal audits, guidelines, checklists, and
instructions to contractor personnel. The contractor's QAPP must be
acceptable to the Government; after suitable review and analysis, the
Government should advise the contractor in writing of its acceptability. The
QAPP review shall be done by the Project Officer and the Quality Assurance
Officer (or his or her designee). The approved QA Project Plan must be made
a part of the official contract in order to be binding on the contractor. Any
revisions to the QA Project Plan will require the approval of the PO and the
QA Officer.
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(c) The Statement of Work should also provide that one or more on-site
EPA quality assurance technical systems (qualitative) audits may be performed
during the project duration. These external quality assurance procedures will
be performed by the EPA Quality Assurance Officer or by his or her
independent third party deisgnee. Selection of the specific areas of focus for
systems audits will be commensurate with the scope and needs of the program.
(d) In addition to the above, the Statement of Work should provide that
contractor participation in one or more EPA (quantitative) performance audits
may be required during the project duration. The purpose of these
performance audits will be to assure and document that data quality meets
project objectives. Performance audit techniques could involve the use of
reference materials of known composition or value and/or split samples for
independent analyses, independent calibration checks on individual system
components, and/or the use of colocated samplers. A complete record of
testing information (including printouts graphs, calibration charts, and all
other pertinent information used to arrive at the reported results) shall be
submitted with test results.
M-6.103-7 Contractor Responsibilities
It is important that contractor personnel leave the conference with a full
understanding as to their responsibilities with respect to the contract. These
include responsibilities in managing the work effort, safeguarding GFP,
meeting the provisions of the contract, and any other specific items contained
in the contract.
M-6.103-8 Conference Report
A report of the conference should be written and sent to all persons who
attended. It should cover factually all items discussed at the conference and
identify any actions to be accomplished and timeframes, if any.
M-6.103-9 Orientation of Subcontractors
Any subcontractors must be oriented by the prime contractor. It is the
responsibility of the prime contractor to see that all subcontractors have all
required instructions, interpretations, and understanding of the prime contract
to properly perform their work. If necessary, the Government may have
representation at any subcontractor orientation conference, but should
coordinate this with the prime contractor.
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M-6.200
MONITORING THE CONTRACT WORK
M-6.201 Introduction
Whenever the Government contracts for goods and services it is most
interested in obtaining the following performance elements from the
contractor:
(a) Delivery of the specific items called for in the contract;
(b) Avoidance of waste of time and/or money;
(c) Performance that increases the benefit of the contract;
(d) Good quality;
(e) Performance in a timely fashion; and
(f) Performance within the budget
The following sections of this Chapter discuss what measures a Project
Officer can take to ensure that the Government obtains these performance
elements.
M-6.202 Relationship Between Contract Type and Contract Administration
and Monitoring
There are over a dozen types of contracts noted in the FAR. Each type of
contract establishes a different relationship between the parties and requires a
different approach to contract administration.
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M-6.202-1 Cost Responsibility; Fixed-Price vs. Cost-Reimbursement
(a) Contracts vary as to the degree and timing of contractor
responsibility for the cost of performance and the amount and type of profit
incentive contained in the contract. Contract types may be listed in
decreasing order of contractor responsibility for cost performance. The
contract type with the least contractor responsibility for the cost of
performance is the cost-reimbursement type contract where the fee is fixed.
At the other end of the spectrum is the firm fixed-price type of contract,
where the price to the Government is fixed, and the contractor has maximum
responsibility for cost of performance.
(b) All fixed-price completion contracts require the contractor to
guarantee performance of the work for a fixed price, while the
cost-reimbursement completion contract only requires the contractor to use
its best efforts to perform the work, while being paid all allowable, allocable,
and reasonable costs up to a ceiling, plus a fee, if provided for. There are
various types of contracts that combine features of these types of contracts.
(c) Some interesting comparisons can be made between the payment
provisions used in these two contract types. In a fixed-price contract, a fixed
amount will be paid for all the work to be performed, whereas a
cost-reimbursement contract provides for an open amount of funds up to a
ceiling which may not be exceeded except at the contractor's risk. If work is
performed for less than what the cost estimate is the contractor will be paid
the lesser amount. Where the work cannot be performed at the estimated
cost, the Government has several options [see M-6.208-3(c)].
M-6.202-2 Cost Responsibility: Risk and Administrative Oversight
(a) Cost responsibility is considered in terms of risk and uncertainty.
Where there are many uncertainties and a high degree of risk, it is reasonable
that the Government assume some portion of these risks and uncertainties. If
predictable risks and few uncertainties exist, then it is reasonable to expect
the contractor to bear the major brunt of the risks.
(b) The degree of contract oversight by the Government is directly
related to the assumption of risk by the Government. The greater the risk, the
greater should be the Government's oversight of the contractor's
performance. This is the basis for the different administrative levels of
activity with respect to different types of contracts.
M-6.203 Socioeconomic Programs Affecting Contracting
(a) The volume of Government contracting in economic terms provides
an opportunity to achieve certain national social policies. This is
accomplished by including clauses in contracts for advancing certain social
objectives, including:
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(1) Establishing fair wages and working conditions;
(2) Establishing fair employment practices;
(3) Promoting small and small disadvantaged business firms;
(4) Protecting the environment;
(5) Encouraging humane treatment of animals;
(6) Promoting domestic business and the economy;
(7) Reducing unemployment and providing training and job opportunities;
(8) Promoting effective use of resources;
(9) Rehabilitating the handicapped and/or prisoners.
(b) Many complicating factors are introduced to the procurement process
by these socioeconomic objectives [see M-3.106-8(e)]. Agencies must
determine which regulations apply to a proposed contract, compliance status
of the successful bidder, and wage determinations in bid solicitations.
Consideration of these factors requires the allocation of personnel and
resources to conduct investigations, make reports, and keep records. From a
contract administration perspective, the socioeconomic program which has
significant contract monitoring implications is the Socially and Economically
Disadvantaged Business Program operated by the Small Business
Administration, commonly referred to as the "8(a) Program."
M-6.203-1 Considerations in Monitoring Contracts Awarded Under
Section 8(a) of the Small Business Act
(a) Under Section 8(a) of the Small Business Act, the SBA is authorized
to contract with Federal agencies and then to subcontract the work to socially
and economically disadvantaged small businesses. Any type of service may be
contracted for under the 8(a) program.
(b) SBA delegates the administration of 8(a) subcontracts to the
procuring agency, which gives rise to certain differences in contract
administration of these 8(a) subcontracts. For example, supplemental
agreements or other changes must be accomplished by two changes: one with
the SBA prime contract, and the other between the SBA and the
subcontractor. POs must take care in "suggesting" changes to 8(a)
subcontractors; 8(a) firms are often inexperienced and may incorrectly
interpret suggestions, which in turn could lead to claims against the
Government for constructive changes.
M-6.203-2 Payment
8(a) contracts may call for advance payments since these small businesses
often do not have the cash flow to finance their contracts to completion or
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until receipt of progress payment. Most other types of contracts do not
provide for advance payments. POs should always remember to expedite
payment requests for small business contractors to avoid disruptions in
contractor performance caused by cash flow problems.
M-6.203-3 Termination
The 8(a) subcontractor is subject to the termination clauses contained in
the prime contract with SBA. However, independent exercise of the
termination right by the agency is restricted. Normally, the SBA will try to
reach an agreement to modify the requirements of the contract to avoid
termination. If this fails, the agency may actually terminate the contract
with SBA, who cannot be held liable for any excess costs or repurchase. If this
occurs, SBA in turn will terminate the subcontract.
M-6.203-4 Role of the Project Officer
(a) Assisting the subcontractor to become a viable business firm is a
special responsibility in the administration of an 8(a) contract. This
responsibility may, at times, be in conflict with the responsibility to assure
performance on the contract.
(b) While assuring successful performance under the contract may
require a special effort by the PO, this special effort may result in a better
product or service than might otherwise have been obtained. In addition, the
legality of "sole sourcing" to an 8(a) firm allows the PO to gain the benefits of
their special efforts on follow-on or succeeding contracts.
M-6.204 Role of the PO in Assuring Performance of Required Work
(a) Performance assurance is key to the contract administration function
and agencies rely on the PO to carry this out. POs can make a contribution of
the highest value by reviewing and carefully considering the information on
the contractor's work in process and by taking intelligent steps as
appropriate. Project Officers cannot assume that all contractor personnel are
familiar with the terms of the contract. While some personnel may become
familiar with the SOW through involvement in the proposal preparation, they
may not always be the people who are assigned to work under the contract.
When they are actually working on the contract, they may have subordinates
who are not as familiar with the contract terms. On long jobs, personnel
turnover may make this problem worse.
(b) In cases where all contractor personnel are familiar with the SOW,
there is sometimes a temptation to cut a corner or provide what appears to be
just as good as what was called for in the contract. Under the stress of time,
items may "fall between the cracks." Specific characteristics or elements
may be overlooked in both the work effort and progress reports.
(c) Accordingly, it cannot be assumed that the contract effort will be
performed exactly as required. Government personnel must actively oversee
the work effort and monitor the contractor's performance with the objective
of assuring that such performance meets the requirements of the contract.
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(d) History has shown that when the PO does not or cannot devote
adequate time to determine what is actually being done under the contract,
the results can be disastrous. The Project Officer is the eyes and ears of the
Contracting Officer and as such must be aware of the responsibility of
assuring that the work performed is exactly in accordance with the minimum
terms of the contract.
M-6.204-1 Step One; Determining Contractor Obligations
(a) The contract should be reviewed to determine the exact obligations
of the contractor. The SOW states these obligations. In some contracts, task
orders are used to initiate contract performance. The PO must examine the
description of work in each task order so that the contractor's obligations can
be listed and monitored.
(b) The Project Officer must keep track of any change orders issued by
the Contracting Officer under the Changes clause of the contract. These are
legally effective in changing the description of work to be done and,
accordingly, the obligations of the contractor.
M-6.204-2 Step Two; Learning and Monitoring What the Contractor Is
Doing
The Project Officer must take action to know what tne contractor is
actually doing and plans to do. Contractor's plans must be reviewed with
respect to the SOW to assure that misdirected efforts are avoided.
M-6.204-2(a) Post-Award Orientation Conference
This conference is very useful for review of the terms of the contract,
determining what the contractor plans to do, avoiding any misunderstanding of
contractor obligations, and establishing a full understanding of what is
expected of the Government.
M-6.204-2(b) Reviewing the Contractor's Work Plan
The contractor's plan of work may be part of the proposal or may become
available after the contract has been awarded. The PO should review the
contract to see if such a plan is required, and if so, see that it is submitted as
required. If such a provision is not in the contract, and the PO believes it is
important, then the Contracting Officer should be consulted with regard to a
change to the contract requiring submission of such a plan. Work plans are key
tools in monitoring a contractor's performance.
M-6.204-2(c) Monitoring by Inspection
(1) Inspection clauses in the contract give the Government the right to
inspect and test the work performed under the contract. This right is
standard under Government contracts; it is derived from the concept
that the Government has the right to determine if the goods or
services offered are what was ordered. This right can be exercised at
any stage and place of work performance.
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(2) Inspection of the contractor's work involves the use of spot checks,
scheduled inspections, random sampling, user reports, and periodic
review of the contractor's quality assurance and control programs.
(3) The need for inspection will vary from case to case and is dependent
upon the nature of the work being performed, the contractor's past
performance history, and the criticality of the work performance. If,
for example, a contractor has an outstanding quality assurance
program and performance levels, the amount of monitoring may be
reduced.
(4) The decision of whether or not to use inspections as the main tool for
monitoring performance is dependent upon many factors, including:
type of work, type of contract, place of performance, and feasibility
of performing inspections. Production of standard, "off-the-shelf"
items under fixed-price contracts may require lower levels of
monitoring, whereas cost-reimbursement type contracts frequently
require a high level of monitoring. Careful attention to the
monitoring and inspection levels required is a key responsibility of
the PO.
M-6.204-2(d) Monitoring through Progress Reports
(1) The use of contractor's written progress reports can be of significant
help in providing a picture of work progress under the contract. The
PO is responsible for ensuring that the contractor complies with
reporting provisions. When reports are part of a contract, they have
been included in the contract price or cost. Accordingly, the Project
Officer should ensure that the Government gets exactly those reports
required, in the time frames provided for, and in the detail required.
Care should be taken not to require extra reports above contract
requirements, as they could lead to a claim against the Government
for increased costs.
(2) Information required by the Project Officer is important in
evaluating progress and for making management decisions relating to
the contract. However, although the information flow provided must
be adequate to the requirements of the Government, it should not be
so detailed and involved as to create unnecessary administrative and
financial burdens on the contractor. Additionally, the Government
personnel assigned to review the contractor's reports must be capable
of assessing the included information.
(3) Often the contractor is reluctant to make certain information
available. This is caused by a tendency to withhold "bad news" or
information that may indicate that the contractor is having
problems. Contractors generally believe that things can be worked
out given a little time. Both the contractor and the PO must
remember that the reason for progress reports is to enable the
Government to determine whether the contract is being performed
properly. Accordingly, it is vital that the PO ensure the timely
submission of progress reports from the contractor and review the
reports with great care.
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(4) The Project Officer must be aware of his or her responsibility to
verify what is said in the reports, especially if they appear to be
written in general terms. The PO can accomplish this by requesting
copies of designs, results, drafts, or other data that should be
available, if the reports are accurate. There is always the possibility
that lower level employees of the contractor may have misled,
intentionally or not, their supervisors who then approve a report
indicating greater progress than that which has actually been made.
M-6.204-3 Step Three; Taking Appropriate Action to Enforce Any
Contract Requirement Not Being Met
(a) When a Project Officer discovers that a specific contract
requirement is not being met by the contractor, he or she should call attention
to the discrepancy and seek a voluntary commitment by the contractor to take
remedial action. In such a case, the PO must take appropriate follow-up
action to ensure that remedial action is taken.
(b) In cases where the contractor disputes the existence of the
discrepancy, claiming the requirements of the contract are, in fact, being met,
the PO should determine the grounds for the contractor's claim. At the same
time, the Contracting Officer must be kept informed of the situation. If the
contractor's position is clearly not reasonable, the Project Officer should
inform the Contracting Officer in writing.
(c) The PO's primary job is to ensure that the contractor performs what
the contract calls for. The Project Officer must not direct the contractor to
do anything beyond or at variance with what is in the contract. If so, such
direction would violate the limit placed on the PO's authority which is:
The Project Officer is not authorized to make any
changes under the contract which alter, in any way, the
requirements of this contract, the contract price,
contract terms, or conditions.
(d) If the contractor refuses to comply with the direction of the PO, or
asserts that the direction is without authority, the matter must be referred to
the Contracting Officer.
M-6.205 Role of the PO in Assuring Most Beneficial Performance
In many types of contracts, the description of work is of a broad and
general nature. The contractor can satisfy the requirements of the contract in
a number of ways. It is important for the PO to recognize that he or she will
be concerned with directing the effort so that maximum results are achieved.
M-6.205-1 Monitoring Performance
The most important thing the PO can do is know what the contractor is
doing and where the contractor is heading. This is the best way to assure that
performance can be directed to proceed along lines that are beneficial.
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M-6.205-2 Provisions of the Technical Direction Clause
Contracts that deal with new lines of inquiry or cover areas where new
directions may present themselves as work unfolds (usually
cost-reimbursement type contracts) often contain a provision for Government
guidance of the contractor's effort: the Technical Direction clause. When
several approaches are available, but some appear more useful than others,
and all fall within the requirements of the contract, the PO may provide
technical direction as to which area or line of approach is to be undertaken.
Such direction may be provided only if it is within the agreed description of
work and changes neither the description of work nor the contract.
M-6.205-2(a) Contracts Having a Technical Direction Clause
Technical direction should be coordinated in advance with the contractor
and reduced to writing, with a copy to the Contracting Officer. If the
contractor thinks the technical direction requires work that is above or beyond
that which is required by the contract, the matter must be referred to the
Contracting Officer.
M-6.205-2(b) Contracts Without a Technical Direction Clause
Even though a fixed-price contract is without a technical direction clause,
such direction may, under unusual circumstances and with the consent of the
Contracting Officer be given. Usually, contracts for research are of a
cost-reimbursement type (contractor is compensated for all allowable,
allocable, and reasonable costs for work within the contract task or work
description), and consequently, the contractor is willing to undertake a line of
effort at the direction of the Government. However, because of the nature of
a fixed-price contract (the contractor assumes all cost risk of performance) it
is not advisable to provide technical direction without a contact provision.
Technical direction in fixed-price contracts often lead to constructive
changes. In addition, the fixed-price contractor may not be willing to follow
such direction, if the contractor believes it will increase costs and reduce
profits.
M-6.206 Role of the PO in Assuring Quality
(a) It is the responsibility of the Project Officer to define the data
quality objectives (DQOs) for the work to be performed consistent with the
Statement of Work in the contract. The quality of the contractor's work
should reflect the DQOs established. This is critical if the defensibility of the
results is to be documented and known.
(b) Contracts for supplies can usually specify the physical attributes that
will result in an acceptable product. Contracts for services, particularly those
involving creative work or investigations, typically cannot describe specific
attributes of the final result. Quality control in services contracts can best be
monitored by monitoring both the personnel assigned to the work and the
methods used by the contractor as the work progresses.
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M-6.206-1 Monitoring Contractor's Work
(a) The quality of a study or analysis depends to a great extent on the
methods used. The validity of the conclusions may be suspect if the
contractor failed to take into account all data or relevant factors. Interim
conclusions that are suspect may seriously undermine all follow-on efforts
resulting in a total waste and possible requirement for a new start.
(b) Generally, in R&D type contracts, the PO is responsible for
continuous monitoring of the contractor's efforts, as they progress, in order to
assure satisfactory quality of work performed. This does not mean taking
charge of the contractor's work effort. It does mean:
(1) Clearly defining the technical and data quality expectations or
objectives to be achieved;
(2) Using technical expertise to identify contractor actions or lack of
action that affect the quality of the work;
(3) Identifying and calling the contractor's attention to deficiencies;
(4) Keeping well-informed of what the contractor is doing;
(5) Working out appropriate action to remedy deficiencies.
M-6.206-2 Monitoring Contractor's Personnel Assignments
Quality of the contractor's output is dependent upon the competence of
its personnel. In many cases, the best way to assure quality of work performed
is to assure that personnel with the necessary capabilities, qualifications, and
experience are assigned to the work effort. This is true in contracts for
services calling for creative or conceptual development or analysis. However,
POs should never appear to act as the contractor's personnel department.
These functions are the contractor's, not the Government's. The Project
Officer's role is one of review and working with the contractor to remedy any
inadequacies. The PO should review the contract to see what has been agreed
by the contractor along these lines.
M-6.206-2(a) Key Personnel Clause
(1) A Key Personnel clause may be included in a contract to assure that
the work is performed or managed by personnel with the proper
qualifications. In this clause, the contractor:
(i) Promises to assign to the contract work certain named indivi-
duals (sometimes indicating the capacity in which each will act);
(ii) Promises not to remove or divert any of the named "key person-
nel" from the contract unless the Contracting Officer consents.
(2) Through monitoring, the PO can assure that key personnel have not
been removed or diverted from the contract work and that their level
of effort is as required for satisfactory contract performance. Key
personnel should be working in those capacities that were indicated
by the contractor.
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M-6.206-2(b) Monitoring Assignment of Non-Key Personnel
(1) The competence of non-key personnel is also important in assuring
the quality of the work performed. If contractor personnel do not
appear satisfactory with regard to training, experience, or other
factors, the PO should direct this to the attention of the contractor.
(2) Under cost-reimbursement contracts, the Project Officer may learn a
great deal about the number and types of contractor personnel by
reviewing invoices. Also, the Project Officer is normally permitted
to ask for and receive information (e.g. resumes, position
descriptions, etc.) that is reasonably required to determine if the
personnel are qualified to receive their rates of pay. Such
information would shed light on personnel qualifications and
functions. Additionally, the Project Officer may ask for and receive
this information even if pay is not an issue.
M-6.206-3 Monitoring Assignment of Work to Outside Subcontractors
(a) Under the provisions of the subcontracts clause contained in
cost-reimbursement contracts, the contractor must notify the Contracting
Officer before entering into any fixed-price subcontract that exceeds $25,000,
any cost-reimbursement contract, or any contract that involves fabrication or
acquisition of property with a value that exceeds $10,000.
(b) The Project Officer is involved in evaluating the need for the
subcontract, the reasonableness of the subcontractor's estimate, and, in the
case of a request to acquire or fabricate an item, the Project Officer should
determine its availability from the EPA property excess listing. The PO may
seek from the contractor information about the qualifications of parties
proposed as subcontractors and is entitled to inspect the subcontractor's plant
and work in process.
M-6.207 Role of the PO in Assuring Timeliness of Performance
(a) The PO must understand from the onset that contract type has an
impact both on the amount of monitoring needed and the probability of timely
performance by the contractor.
(b) In fixed-price contracts, the threat of default under the Default
clause can be used to motivate the contractor to complete on time. In the
case of cost-reimbursement contracts, which are best efforts contracts and
the default provisions are virtually meaningless, possible motivators include
withholding of payment and the fact that the firm will gain a bad reputation.
Accordingly, in this type of contract the assurance of timely completion of the
work effort is highly dependent on the efforts of the PO.
(c) Failure to deliver on time almost always is the result of a build-up of
factors during performance. If the PO keeps in close touch with the progress
of the work effort, such interim delays can be identified and corrective action
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initiated. The agency depends on the Project Officer to obtain and analyze
progress information and to develop a recommended course of action. The
following techniques are of use in assuring timely performance of the work
effort.
M-6.207-1 Completion or Delivery Dates
All contracts contain a period of performance or delivery schedule—the
importance of which varies—as shown below.
M-6.207-l(a) Completion Contracts
Completion contracts call for a finite job, such as writing a handbook or
collecting specific data and delivering it in a certain format. These contracts
specify a time for completion of the work and delivery of the results. The
date must be met for the contractor to fulfill its obligation. But often, other
matters are at stake. For example, the completed work may be required
before other work can begin. Untimely delivery can result in program delays
with a cumulative effect beyond the initial work effort, impacting program
effort, personnel, and costs.
M-6.207-l(b) Term Form (Level-of-Effort) Contracts
In these types of contracts, what is being purchased is an obligation by the
contractor to apply a specified level of effort towards a specific objective or
kind of work over a certain period of time. In these cases, the completion or
end date in the contract relates more to the contractor's obligation to work
than the completion of the effort. Once the end date comes, the contractor
has no further obligation to continue work, regardless of the status of job
completion or hours remaining in the contract. Depending upon the terms of
the contract the contractor may or may not stop work on tasks let under a
task order contract. However, work will not stop if a task or work order
ordered during the fiscal year in which the contract was let extends into the
next fiscal year. In many cases, there is no assurance that the work will be
completed and, therefore, there is potential waste.
M-6.207-2 Relation of Work-Plan to Timeliness
(a) In administration of contracts with completion dates, it is not enough
to know how the work is progressing. It is vital to have an overall scheme or
work plan against which actual progress can be compared. Work, plans help the
PO identify delays in completion, note where the contractor has fallen behind,
and whether corrective action is required.
(b) The work plan should contain a schedule that identifies each step
required for contract completion and the period of time needed to accomplish
that step. The schedule is usually expressed in calendar days or weeks. A plan
may be required by the contract terms; but whether the contractor is
obligated to deliver such a plan you may expect the contractor to have
developed a plan for internal management purposes. The plan should be
updated as required to reflect changes in estimates for completion of work
elements and the total work effort.
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M-6.207-3 Obtaining Progress Reports
The Project Officer should assure that contract requirements for progress
reports are met by the contractor in a timely fashion. If contract
requirements omit data you believe to be important, seek a contract
modification from the Contracting Officer. If the contractor fails to report
on time, or the report is deficient, inform the Contracting Officer and request
that the contractor promptly remedy the situation.
M-6.207-4 Reading Progress Reports
(a) The PO must promptly read progress reports and have sufficient
understanding of them to be able to deal with any problems that have arisen.
Failure to read and understand progress reports renders them virtually useless.
(b) Progress reports that are vague or too general are of no value and
may be an effort on the part of the contractor to obscure problem areas. The
PO should get whatever clarification is required to render progress reports
meaningful and seek whatever assistance is required to fully understand them.
Verification of the information contained in progress reports should be
accomplished at the minimum on a spot-check basis.
M-6.207-5 Analyzing Billings
The Project Officer can spot evidence of problems in the contractor's
vouchers. Variances in spending rates may be indicative of contractor
performance problems. Where problems are suspected, the Project Officer
should request an explanation of the deviation and, if necessary, request
monthly back-up documentation—e.g., copies of vendor invoices, written
explanation of the deviation, etc. Where it is evident the contractor has a
serious problem, inform the Contracting Officer.
M-6.207-6 Dealing with Delinquencies
If the Project Officer becomes aware of potential delinquencies from
progress reports, or from any source, prompt notification should be made to
the Contracting Officer. The longer problems drift along, the worse they tend
to get and the greater the potential of the Government losing its contractual
rights. The PO and the Contracting Officer should discuss the matter with the
contractor, seeking a plan for remedial action.
M-6.207-7 Taking Remedial Action if Necessary
(a) After the existence and cause of a delay are known, the PO should
inform program management and the Contracting Officer of the facts of the
case so that alternative plans can be formulated and decisions made.
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(b) There may be several alternatives available. Work may be
accelerated by applying greater resources, e.g. personnel, overtime, or
equipment. (The availability of resources and money must be determined by
the program office.) At times, a new technical approach or system must be
used to solve the problem. It is possible that the program office may find the
delay to be acceptable. However, the PO is not authorized to waive the
requirements of the delivery schedule. It must also be understood that if the
contract to be accelerated is of a cost-reimbursement type, the accelerated
effort will most probably increase the cost to the Government. If it is a
fixed-price completion contract and acceleration is needed to avoid default,
the cost of acceleration will be borne by the contractor.
M-6.207-8 Summary
The Project Officer has the goal of assuring timely performance and to
avoid any surprises to the program office concerning delays. Proper action by
the PO gives the program management time and the chance to make decisions
and adjustments over the widest number of options and to revise plans at an
early stage.
M-6.208 Role of the PO in Monitoring Expenditures
(a) A firm fixed-price contract gives the contractor a great deal of
incentive to perform the contract in the most economical way, since every
penny saved is a penny of profit to the contractor. Therefore monitoring of
expenditures under firm fixed-price contracts is not needed. However, such is
not the case under cost-reimbursement type contracts. The contractor is
generally entitled to compensation for costs incurred in doing the work,
provided costs are allowable, allocable, and reasonable. Additionally, the work
description may, out of necessity, be a performance type Statement of Work
because of the difficulty in describing just what needs to be done.
Accordingly, the contractor has broad contract authorization to perform work
and charge for it, yet the work may not be exactly what the Project Officer
envisioned. Under such circumstances it is obvious that close monitoring is
essential.
(b) Administration of a cost-reimbursement contract requires the PO to
monitor and guide the contractor's efforts to avoid waste of public funds and
obtain the contracted services within budget. Inefficient or misguided
performance may result in other contracts being robbed to provide additional
funding, or in failure of the program to obtain needed services.
(c) Monitoring cost-reimbursement contracts is perhaps the most
challenging task faced by Project Officers. The following sections break the
overall monitoring function into manageable sub-functions for the purpose of
providing- clearer guidance.
M-6.208-1 Monitoring and Controlling to Avoid Waste
(a) The PO is the primary resource of the agency in tracking and guiding
contractor performance to avoid waste.
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(b) Under cost-reimbursement and labor-hour type contracts, a very
effective means of identifying waste is Project Officer review of contractor
invoices. These two types of contracts provide that the agency may ask the
contractor for information to determine if the charges are reasonable,
allowable and allocable (the basic tests the contractor's costs must meet to be
reimbursed by the Government)'
(c) If the PO believes the contractor is spending more than is reasonably
required to accomplish certain portions of the work, the PO should ask for
additional explanation or back-up of those costs. If information furnished
substantiates the expenditure yet it is believed there is a better, more
efficient method to accomplish the work, the PO should consult with the
contractor.
(d) Managing the contract work is basically the contractor's job. The PO
should keep this in mind and not attempt to take over management of the work
effort. However, the PO should inquire as to what the contractor is doing and
attempt to persuade the contractor to adopt a more effective and efficient
method of working.
M-6.208-2 Exercising the Right to Suspend or Disallow Costs
(a) Under the provisions of a cost-reimbursement contract, the
contractor is paid all allowable, allocable, and reasonable costs up to a
pre-determined contractual maximum in return for its best efforts to perform
the work. The costs incurred by the contractor in performing the work must
be allowable, allocable, and reasonable as defined in the Federal Acquisition
Regulation (48 CFR 31.2). In addition, cost expenditure must be in accord
with any special provisions of the contract.
(b) The Project Officer, in reviewing numbers submitted under a
cost-reimbursement contract, must examine them from the perspective of
whether the expenditure is attributable to the contract; what a prudent
businessperson would pay under like or similar circumstances. When a cost(s)
does not meet the above criteria, the Project Officer may recommend
suspension of the cost(s) and recommend payment of the vouchers less the
suspended cost. Prior to recommending suspension of costs, every effort
should be made by the Project Officer to obtain from the contractor the
rationale and back-up supporting the expenditure. Lacking either the back-up
or an acceptable rationale, the suspension should be recommended.
(c) The contractor knows that while it has the right to manage the work
effort, the agency has the right to "disallow" costs that are unreasonable in
nature or amount. This can be a powerful means of persuading a contractor to
manage efficiently. This right, which is different from a suspension, can be
exercised by the Contracting Officer. A disallowed cost is one where the
Contracting Officer has made a final determination that the Government will
not pay the cost. When a contractor is aware that a PO is keeping an eye on
costs and may raise questions, there is a greater incentive to manage the work
effort economically.
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(d) Labor-hour contracts contain already agreed-to costs per labor hour.
However, even though the Government is generally obligated to pay for all
hours incurred in good faith for contract performance, the PO still may
question the contractor where it appears that excessive labor hours are being
used, or higher than required levels of personnel are on the job.
M-6.208-3 Monitoring Cost-Reimbursement Contracts
M-6.208-3(a) Limitation of Cost Clause
(1) The Limitation of Cost clause is in all cost-reimbursement contracts,
unless incrementally funded (which contains a similar clause entitled
Limitation of Funds). The clause specifically limits the
Government's obligation to the amount stated in the contract as the
total estimated cost of the contract.
(2) Occasionally the cost to complete contract work will exceed the
estimated cost of the contract. The Limitation of Cost clause
provides that the contractor has no obligation to continue work
whether or not the work is completed when the performance cost
reaches the total estimated cost. The contractor is entitled to stop
work unless the contract is revised by the Contracting Officer to
increase the total estimated cost.
(3) The Limitation of Cost clause requires the contractor to notify the
Contracting Officer in writing and to provide revised estimates of
total cost whenever the contractor has reason to believe:
(i) That expected costs incurred in the next sixty (60) days plus
costs already incurred will exceed 75 percent (75%) of the total
estimated cost of the contract; and/or
(ii) The total cost of performance (less any fee) will exceed or be
substantially less than the total estimated cost of the contract.
(4) These requirements do not provide a continuing update of the status
of contract funds but are designed to avoid crises. However, since
the PO always sees the vouchers submitted by the contractor for
reimbursement a running total of incurred cost can be maintained.
Contractors are often required to submit interim financial status
reports. For maximum utility, these reports should address various
line items and portions of the budget for the entire effort. Thus,
actually incurred costs can be compared with budget item costs,
problems can be noted, and management decisions made concerning
the need for additional funding.
M-6.208-3(b) Monitoring Status of Contract Funds
(1) The points noted below stress the importance of monitoring the
contractor's performance cost and informing the program office well
in advance about a need for funds in addition to current total
estimated costs:
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(i) The Government cannot extend the contractor's obligation to
work once the total estimated cost is reached, unless and until
the program office can provide additional funds. This may
prove impossible or take a long period of time.
(ii) The contractor cannot be expected to maintain a readiness to
work for an indefinite period of time.
(iii) The risk of the contractor's staff dispersing and the costs of
resuming work increasing becomes greater the longer the time
period between the contractor's reaching total estimated cost
and receipt of additional funding.
(iv) Gaps in performance create problems and pressures in the
program office that lead to crisis conditions and emergency
decision making, rather than orderly exploration of options.
The program office will have to deal with the crisis of whether
to terminate the contract or where to get additional funds.
(2) If the PO can keep the program office well informed on the status of
the contractor's incurred costs, the office will be better able to make
sound decisions concerning available options (see M-6.208-3(c)).
M-6.208-3(c) Overruns
(1) If the contractor's performance costs reach the total estimated costs
before work is completed an overrun has occurred and the
contractor's obligation to proceed is suspended. It is vital that the
Project Officer and program personnel refrain from, in any way,
requesting or encouraging the contractor to continue work. It has
been held by Boards of Contract Appeals that such actions may have
legally obligated the Government to reimburse the contractor for
continuing the work effort. This would constitute improper
obligation of appropriated funds. It is possible that the PO could be
held to be personally responsible for the over-obligation.
(2) It is not fair for the Government to keep the contractor dangling with
respect to the decision to fund an overrun. The PO should assist in a
prompt determination of which action the agency will take and so
inform the contractor.
(3) When a contractor has reached or has made notification that it will
be reaching the total estimated cost under the contract prior to
completion of the work, the Government, upon the recommendation
of the Project Officer, has the following potential options it may
take:
(0 the contract may be modified by the Contracting Officer to
add additional cost, however no additional fee may be added;
(ii) the Contracting Officer may modify the contract to reduce
the statement of work so as to enable completion with
remaining funds;
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(iii) a decision may be made to let the contractor perform up to
the extent of cost in the contract. After contract expiration
the Government may either complete the work effort itself or
recentract; or
(iv) the existing contract may be terminated for convenience.
(4) What option the Project and Contracting Officers settle on is
dependent upon such factors as available funds, importance of the
project, performance of the contractor, availability of in-house
resources to complete the work, and urgency of the project.
M-6.208-4 Monitoring Labor-Hour Contracts
(a) Project Officer responsibilities and considerations in the monitoring
of labor-hour contracts are similar to those required for cost-reimbursement
type contracts. Labor-hour contracts generally have a provision which sets
forth the agreed hourly compensation rate for the various categories of labor.
(b) Normally, the stated ceiling represents a limit on the contractor's
obligation. Thus, raising the ceiling increases the contractor's obligation
which affects the scope of the contract and requires the contractor's consent.
To raise the ceiling, the Project Officer would have to furnish the Contracting
Officer with a complete procurement request, including an acceptable
justification for noncompetitive procurement. This is in contrast to the
Contracting Officer's authority to unilaterally revive the contractor's
obligation, under the Limitation of Cost clause in cost-reimbursement type
contracts, by providing the contractor with an increase in estimated cost.
(c) The PO should keep a running record of both estimated -and expended
labor hours, by labor category, to avoid issuing orders that would require labor
hours exceeding the ceiling. This is vital because the project may still be
incomplete when the ceiling is used up, and the agency may not realize any
value from the incomplete work.
M-6.209 Documentation of Contract Administration Actions
(a) POs are directly responsible to Contracting Officers for all matters
pertaining to administration of the contract. As the primary interface
between the Government and the contractor, POs have the following primary
responsibilities:
(1) Establishment of a contract surveillance program that will verify
contractor performance;
(2) Maintenance of records, logs, and reports that document the actions
taken by the Government and the contractor during contract
performance; and
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(3) Verification of the billings by the contractor to ensure payment is
made for services rendered.
(b) The Project Officer may find it necessary to appoint contract
monitors (in a large contract with many activities at different sites), and to
call on Government specialists in order to caw out the. contract surveillance
function. Where the Project Officer has utilized monitors or specialists to
assist in monitoring the contractor's work, he or she must be careful to avoid
the poor communications pitfall. All activities of monitors and specialists
must be within the purview of authority delegated and must be documented.
The Project Officer is held responsible by the Contracting Officer for the
actions of these personnel. Consequently, it behooves the Project Officer to
keep in close communications with such agents.
M-6.209-1 Records, Logs, and Reports
(a) The need to maintain proper records, logs, and reports cannot be
emphasized enough. The PC's records are considered part of the official
contract documentation. In event of a contract dispute, these records may be
subjected to examination by the Board of Contract Appeals or by the Federal
Courts. The Project Officer should immediately, upon his or her designation,
set up a contract administration and suspense file for the contract. All
documents, including internal memos, concerning the contract must be
contained in the PO's official files. Exhibit 6-1 is a sample file plan which
may be used for this purpose.
(b) The sample plan may be changed to meet the specific requirements
of the contract. For example, it may be wise to set up a special file section if
Government-furnished property or special equipment is involved in the
contract. If the contract provides for award fee payments, a section that
specifically relates to this area may be set up in the files.
(c) EPA Form 1900-27, Project Officer's Evaluation of Contractor's
Performance (see Exhibit 6-2), must be executed at contract completion for
all of the following types of contracts:
(1) All contracts for research and development and for services other
than management and consulting services when the contract amount
is $25,000 and above;
(2) All contracts for management consulting services, regardless of
dollar value.
Use of the form provides an orderly and uniform method of determining and
recording the effectiveness of contractors in meeting their contractual
commitments.
(d) Project Officers should prepare their technical evaluation on EPA
Form 1900-27 and forward the original of the form to the QA Section,
Procurement and Contracts Management Division, Washington, O.C., 20460. A
copy should be sent to the Contracting Officer for the contract file.
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M-6.209-2Evaluation of Construction Contracts
(a) With regard to construction contracts, the FAR requires the
contracting activity to evaluate contractor performance and prepare a
performance report for each construction contract of $500,000 or more;
$100,000 or more, if any element of performance was either unsatisfactory or
outstanding; more than $10,000, if the contract was terminated for default; or
$100,000 or more, if the contract was terminated for convenience of the
Government.
(b) The Contracting Officer will obtain input from the Project Officer on
the contractor's performance. The Contracting Officer is to prepare the
contractor performance report as prescribed in FAR 36.201 and EPAAR
1536.201 within two weeks after final acceptance of the work or contract
termination.
M-6.209-3Evaluation of Architect-Engineer Contracts
(a) The FAR requires that an agency provide for one or more permanent
or ad hoc architect-engineer evaluation boards to review current data files on
eligible firms and responses to public notice on a particular project; evaluate
firms; hold discussions with at least three of the most highly qualified firms;
and prepare a selection report recommending at least three of the most
qualified firms in descending order of preference. The selection report should
include a description of the discussions and evaluation conducted to allow the
selection authority to review the considerations upon which the
recommendations are made.
(b) An Environmental Protection Agency Architect-Engineer Evaluation
Board has been established as provided in EPAAR 1536.602-2. Among the
membership is the program official originating a requirement for
architect-engineer services or his designated representative.
(c) Evaluations of architect-engineer contracts are conducted in
accordance with the procedures applicable to construction contracts as
prescribed in FAR 36.604 and EPAAR 1536.201. The Contracting Officer will
obtain input from the Project Officer on the contractor's performance.
M-6.209-4 Verifying In voices/Vouchers
(a) It is the PO's responsibility to verify contractor invoices/vouchers. It
should be noted that all Government personnel have a responsibility to process
invoices/vouchers for payment in a timely fashion. Timely processing is
considered to be no more than five calendar days from receipt. Undue delay
can cause financial hardship for the contractor and can turn a good
contractual relationship into an impossible situation. Project Officers must
keep in mind that under the provisions of the Prompt Payment Act (PL 97-177)
late payment of an invoice will cause the Government to pay interest to the
contractor. The interest cost will be assessed against the program.
(b) There are several methods of payment that are frequently utilized by
the Agency. In fixed-price contracts, partial progress and lump sum payments
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are made. Partial payments refer to those made when a part of a fixed-price
contract is delivered, accepted, and paid. Progress payments are payments
made under fixed-price contracts that are based on the progression of work.
This type of payment should not be confused with* provisional payments, which
are made only under cost-reimbursement type contracts. Lump sum payments
refer to the type of contract where one payment is made at contract
completion.
(c) The Project Officer's involvement in the processing of vouchers and
invoices is dependent upon the type of contract and what is being purchased.
The following is an explanation of this involvement.
(1) Provisional Payments Under Cost-Reimbursement Contracts
Provisional payments are made subject to final audit to determine
the allowability, allocability, and reasonableness of the costs paid.
The following are Project Officer responsibilities for the processing
of provisional invoices/vouchers under cost-reimbursement contracts.
(i) Immediately upon receipt of the Contract Status Notification
Form (EPA Form 2550-19) from the servicing finance office,
the Project Officer determines whether the payment request
is commensurate with the items delivered and/or services
performed by the contractor. Project Officer response is
required within one (1) week.
(ii) When no exception is taken, the Project Officer shall approve
and sign the Form 2550-19 and return it to the servicing
finance office for further processing. A copy of the
invoice/voucher should be retained by the Project Officer for
the file.
(Hi) If, during the review, the Project Officer takes exception to
any of the services or items being invoiced, he/she must
prepare a memorandum setting forth (a) the reasons for the
recommended disallowance or suspension, and (b) the amount
recommended for payment, and submit it, together with the
invoice/voucher, to the servicing finance office for
appropriate action.
(2) Completion Invoice/Voucher, Cumulative Claim and Reconciliation
Under Cost-Reimbursement Contracts
The Project Officer shall process completion invoice/voucher
materials in accordance with the following:
(0 Immediately upon receipt of the Contract Status Notification
Form (EPA Form 2550-19) from servicing finance office, the
Project Officer determines whether the payment request is
commensurate with the items delivered and/or services
performed by the contractor. Project Officer response is
required within one (1) week.
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(ii) When no exception is taken, the Project Officer shall approve
and sign the Form 2250-19 and return it to the servicing
finance office for further processing. A copy of the
invoice/voucher should be retained by the Project Officer for
the file.
(iii) If, during the review, the Project Officer takes exception to
any of the services or items being invoiced, he/she must
prepare a memorandum setting forth (a) the reasons for the
recommended disallowance or suspension, and (b) the amount
recommended for payment, and submit it, together with the
invoice/voucher, to the servicing finance office for
appropriate action.
(3) Progress and Partial Payments for Service, Supply, and Equipment
Contracts Under Fixed-Price Contracts
(0 The Project Officer reviews the invoice/voucher to ascertain
that all services and/or items billed have been satisfactorily
performed and/or received, inspected, and accepted by the
Agency.
(ii) When no exceptions are taken, the Project Officer approves
and signs the Contract Status Notification (EPA Form
2550-19) and returns it to the servicing finance office,
retaining a copy of the invoice for the file.
(iii) If, during the review, the Project Officer takes exception to
any of the services or items being invoiced, he/she must
prepare a memorandum setting forth (a) the reasons for the
recommended disallowance or suspension, and (b) the amount
recommended for payment, and submit it, together with the
invoice, to the servicing finance office for appropriate action.
(4) Lump Sum Payments for Service, Supply, and Equipment Contracts
Under Fixed-Price Contracts
(i) The Project Officer reviews the invoice and ascertains that
the contractor has performed and/or delivered all services
and/or materials contracted for; and that the Government has
conducted final inspection of, and has accepted, all contract
services and/or materials.
(ii) When no exceptions are taken, the Project Officer signs the
Contract Status Notification, EPA Form 2550-19, and returns
it to the servicing finance office, retaining the copy of the
invoice for the file.
(iii) If, during the review, the Project Officer takes exception to
any of the services or items being invoiced, he/she must
prepare a memorandum setting forth (a) the reasons for the
recommended disallowance or suspension, and (b) the amount
recommended for payment, and submit it, together with the
invoice, to the Accounting Office for appropriate action.
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(5) Progress Payments Under Fixed-Price Contracts for Construction
(i) The Project Officer reviews the invoice and ascertains that all
services and/or items invoiced have been satisfactorily
performed and/or delivered by the contractor and accepted by
the Agency.
(ii) If no exceptions are taken to the amount invoiced, the Project
Officer shall (a) sign the Contract Status Notification (EPA
Form 2550-19) form signifying agreement with the amount
invoiced, and (b) forward the approved Notification form and
the original and three copies of the contractor's invoice to the
Contracting Officer for further processing, retaining the
fourth copy of the invoice for the file.
(iii) If, during the review, the Project Officer takes exception to
any of the work being billed, he or she should prepare a
memorandum setting forth (a) the reasons for the
recommended disallowance or suspension, and (b) the amount
recommended for payment, and submit it, together with the
invoice, to the Contracting Officer for appropriate action.
(6) Final Payments Under Fixed-Price Contracts for Construction
The Project Officer approves the final invoice when the following
conditions have been satisfied:
(i) Final inspection has been made.
(ii) All work, including the correction of punch list items, has been
accepted by the Government. The Project Officer then
certifies and dispatches invoice copies in accordance with
M-6.209-4(c)(5) above.
(7) Charging Costs Under Contracts Funded From Multiple Accounts
EPA may fund contracts from more than one appropriation,
depending on the nature of the goods or services acquired. FMOs are
legally responsible for assuring that payments on each contract are
made from the proper appropriation and charged to the proper
account.
(i) Voucher Payment. Project Officers, in certifying contractor
invoices, must provide sufficient information to FMOs to
charge contract costs correctly. Whenever a contract has
multiple account funding, the Project Officer shall provide on
every certification of an invoice for payment the accounts and
amounts against which invoiced costs are to be charged. (See
M-3.106-13(e).)
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(ii) Approval of Allocation for Multiple Appropriation Funded
Contracts. The Director, Financial Managment Division, must
approve Project Officers' rationale for allocating costs among
appropriations when:
a. any specific work assignment or delivery order will be
funded from more than one appropriation, or,
b. any proposed contract will be funded from more than one
appropriation and will have neither delivery orders nor work
assignments.
This rationale must be submitted to the Director, FMD, and
approved before these work assignments/delivery orders are
issued or before such proposed contracts are awarded.
M-6.209-5 Payments
The Government's principal obligation is to pay the contractor for
supplies delivered or work performed. A fixed-price contract states the exact
amount to be paid in the contract, while a cost-reimbursement contract
requires the Government to pay the contractor the costs incurred in
performing the contract work, plus a fee, if any. The FAR contains contract
clauses that spell out the precise obligations of the Government regarding
payment.
M-6.209-6 Payments Clause
(a) The standard Payments clause spells out the Government's obligation
to pay under fixed-price contracts. The clause provides for payment of the
prices stated in the contract for items delivered and accepted, or for services
rendered and accepted, upon submission of proper invoices. Partial payments
for partial deliveries in excess of $1,000 or 50 percent of the contract price
are also provided for in a typical fixed-price contract.
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(b) Under cost-reimbursement type contracts, the Allowable Cost and
Payment clause and the Fixed-Fee clause are the primary clauses. These
clauses provide for Government payment of:
(1) The cost of performance determined by the Contracting Officer to be
allowable
(2) A fee, as provided in the contract.
(c) Payment under fixed-price contracts is much simpler than under
cost-reimbursement type contracts. To make payment under a fixed-price
contract, the Government representative need only know that the contractor
has timely provided acceptable goods or services. Under the
cost-reimbursement type contract, the process is more involved. In addition
to knowing whether the service or product has been provided, the Government
must determine whether the cost being charged is allowable, reasonable, and
allocable.
M-6.209-7 Determining Allowable Costs
FAR 31.201 provides principles for use in determining whether the costs a
contractor claims for reimbursement are allowable. The Government will pay
costs incurred by the contractor only if they are reasonable and allocable.
Costs excluded or limited by FAR provisions or by provisions of the contract
are not allowable.
M-6.209-7(a) Reasonable Costs
Reasonable costs are those costs in amount and type that would ordinarily
be incurred by a prudent person in a competitive business. Cost must be
recognized as necessary for the operation of the organization. They must be
incurred utilizing sound business practices and must be consistent with the
normal practices of the firm.
M-6.209-7(b) Allocable Costs
Allocable costs include:
(1) Direct costs or expenses incurred specifically for performance.
Examples are (0 salaries of personnel performing a specific portion of
the contract work, (id costs of materials or supplies used for the
contract, and (iii) costs of subcontracts entered into solely for
performance of the contract.
(2) Indirect costs that benefit both the contract and other work of the
contractor and that can be distributed between the contract and the
other work based on relative benefit or another equitable basis
Examples are (i) depreciation on buildings and equipment used
partially for the contract and partially for other work, (ii) fringe
benefits for employees charged directly to the contract, and (iii)
supervisory salaries, if time is not charged directly to the contract.
(3) Indirect costs that are necessary to the overall operation of the
contractor but that cannot be distributed to projects in accordance
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with relative benefit. Examples are (0 office supplies, (ii) bid and
proposal costs, and (iii) salary of an accountant.
M-6.209-7(c) Accounting Principles for Determining Allocability
(1) The Contractor must compile costs which are claimed for
reimbursement in accordance with generally accepted accounting
principles and practices or, if applicable, with the Cost Accounting
Standards.
(2) Even though a contractor uses an accounting system that is not the
same as systems used by other contractors, costs may be found to be
in accordance with generally accepted accounting principles. If the
contract is over $100,000, the Cost Accounting Standards may require
uniformity of accounting treatment of certain aspects of cost
compilation. Whenever there is any question about the contractor's
accounting system, personnel with expertise in that area will usually
have to make the determination.
M-6.209-7(d) Costs Specifically Limited or Excluded
(1) Certain costs are specifically limited or excluded by FAR Part 31:
(i) Entertainment costs are not allowable
(ii) Interest expenses are not allowable
(iii) Advertising expenses are limited to certain purposes
(iii) Depreciation on Government-owned property is not allowable.
(2) Costs may also be limited or excluded by provisions in the contract.
The Contracting Officer cannot agree in the contract to allow a cost
that is specifically disallowed by the FAR. The CO may, however,
agree with the contractor to limit or exclude costs allowable under
the FAR. For example, a contract could exclude all travel costs in
that the Government is to provide transportation.
M-6.209-7(e) Processing Payments
(1) Submission of invoices or vouchers with documentation supporting the
contractor's cost claims starts the payment process. See M-6.209-2
for verification and processing of provisional and other invoices and
vouchers.
(2) The Contracting Officer reviews all invoices/vouchers to determine
whether the costs should be allowed or the invoice should be paid.
Where the contract provides for reimbursement of indirect costs at
negotiated rates, costs must be examined to assure that there is no
duplication of costs between direct and indirect cost items. Degree
of the Contracting Officer's examination depends on the
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circumstances. Payment for questionable items can be suspended by
the CO pending resolution, and over- and under-pay men t can be
subsequently adjusted. Especially under the Prompt Payment Act
Provisions, it is important to promptly advise the CO of any concerns
you may have with an invoice given to you for review prior to
payment. The CO has the authority to toll the Prompt Payment Act
while problems are being resolved. (It should be noted that the
interest penalty provisions do not apply to progress, advance or
provisional payments made to the contractor, but do apply to the
final payment.) The potential adverse impact of the Contracting
Officer's failure to exercise this important right on behalf of the
Government was illustrated in a recent case where a contractor was
allowed to recover over $34,000 (plus interest) in holiday pay
expenses as a fringe labor cost on the basis of its proof that holiday
pay was contractually excluded from overhead rates as an indirect
cost. In part, the contractor's proof was based on the fact that the
Project Officer responsible for approval and certification of invoices
routinely approved such requests during more than half the contract's
duration. This case illustrates the need for clear expression of
contract provisions regarding costs, complete understanding of such
provisions by person's authorized to approve and certify invoices, and
immediate communication between the Contracting Officer and his
or her authorized representative in the event of any question.
(3) A detailed audit is conducted, in most cases, prior to final payment
of cost-reimbursable contracts. The Contracting Officer should seek
clarification and justification of any items of cost questioned by the
audit. The Contracting Officer should make the final decision, under
the Disputes clause, to resolve the matter if agreement cannot
otherwise be reached. Acceptance of final payment releases the
Government from any claims against it by the contractor.
(4) EPA has now begun using the Treasury Financial Communications
System (TFCS) for disbursing contractor payments of $25,000 or more.
The TFCS is a computer-to-computer link that provides the Federal
Government with on-line access to the Federal Reserve
Communications System (FRCS), a nationwide telecommunications
network. Through this system of electronic funds transfer, payment
can be made directly or indirectly through correspondent financial
institutions to virtually any financial institution in the country.
The TFCS is a highly reliable, responsive payment mechanism that
eliminates both the mail time and processing associated with check
payments. Under the TFCS, payments of $25,000 will be made to the
account designated at the contractor's financial institution on, or as
close as possible to, the actual payment due date. Information
identifying the particular invoice(s) for which payment is made is
included on the TFCS payment message to the financial institution.
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M-6.209-7(f) Paying a Fixed Fee
Payment of the fixed fee under a cost-plus-fixed-fee contract is governed
by the provisions of the contract. After paying 85 percent of the fee, the
Contracting Officer is authorized to withhold the final 15 percent of the fee,
or $100,000, whichever is less, until contract completion or final payment.
M-6.209-8 Limitation of Cost Clause
(a) While the Government is obligated to pay a contractor's allowable,
allocable, and reasonable costs under the appropriate payment clause, the
Limitation of Cost (or if incrementally funded, Limitation of Funds) clause
provides that the Government is not obligated to pay any more than the
estimated cost of performance set forth in the contract.
(b) The clause provides for the Contracting Officer to formally modify
the contract whenever the estimated cost is to be increased. The cost stated
in the modification becomes the new estimated cost of performing the
contract, and the contractor's obligation to continue work is reinstated or
expanded. Costs incurred up to the new estimated cost are reimbursable even
though they are in excess of the original estimated cost.
(c) If the Contracting Officer issues a change order under the provisions
of the Changes clause and the cost of performing the work as changed will
exceed the cost contained in the contract, the contractor may not (except at
its own risk) incur costs in excess of the cost set forth in the contract.
(Changes are discussed at M-7.305).
(d) Gaps in contract performance caused by the operation of the
Limitation of Cost (or Funds) clause should be avoided or minimized. The
longer the gap period, the greater the risk that the contractor will be legally
excused from its obligation to proceed, after receipt of notice of increase.
Periodically an on-going contract will sustain an overrun and the press of
business is such that a complete analysis and negotiation of the overrun
proposal cannot be accomplished prior to the contractor's work stoppage.
When this occurs, the Contracting Officer may interim fund the contract so as
to avoid work stoppage. It is not fair to put the contract at risk, and the costs
of standing by are wasteful.
(e) Contract administration personnel must keep constantly advised of
total costs incurred relative to progress of the work so that needed actions to
obtain additional funds for the project can be taken in a timely fashion.
Government personnel must not cause or encourage the contractor to incur
costs beyond the estimated costs of the contract. The Government may be
liable for costs exceeding the contract limit if this rule is not observed.
M-6.209-9 Conclusion
The core of the PO's responsibility is to monitor the performance of the
contract. The various functions involved are based upon good business
practices, legal doctrines, common sense, and contractual authority.
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M-6.300
ADMINISTRATION OF GOVERNMENT PROPERTY
IN CONTRACTOR'S POSSESSION
M-6.301 Introduction
(a) Property administration functions begin with the letting of the
contract and involves the Property Administrator, the Project Officer, the
Contracting Officer, and other personnel as needed. This section sets forth
requirements to be followed by Project Officers in establishing and
maintaining control of Government property acquired by or furnished to the
contractor pursuant to the terms and conditions of contracts. Project Officer
responsibilities are outlined for all aspects of Government property
management.
Normally, the Property Administrator performs his duties by virtue of a
"Designation of Property Administrator" article in the contract. A Property
Administrator is an EPA employee designated by the Contracting Officer to
act as his representative in matters concerning the management and control of
Government property under a contract.
M-6.302 Project Officer Duties and Responsibilities
(a) A Project Officer must communicate the need to authorize the use of
existing Government-owned property or the furnishing or acquisition of
property immediately to the Contracting Officer or Contract Specialist.
Items of property to be furnished by the Government or acquired by the
contractor must be identified as specifically as possible in the original
contract schedule or in a change order or supplemental agreement. The
Project Officer must ensure that: (1) providing property is justified, (2) the
Government receives adequate consideration, and (3) one contractor or
prospective contractor does not receive a competitive advantage over others.
(b) Project Officers should assure that both the Contracting Officer and
Property Administrator are always fully informed on all matters affecting
contract property administration, regardless of the classification of property
(Le., nonexpendable, noncapitalized, or supplies. See M-3.106-16(b) for
definitions). Providing such information is vital due to the great variety of
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rules and regulations that affect the administration of Government property in
the possession of contractors.
M-6.303 Procedure
Copies of all cost-type contracts are provided to a Property
Administrator, who immediately forwards a "Guide for Control of Government
Property by Contractors" to each contractor. When a review of a contract
reveals authorization for the acquisition of property, decals and a reporting
form (EPA 1730-1, "Report of Nonexpendable Property Acquired by
Contractor"), are provided to the contractor to identify EPA property. A copy
of this form must also be forwarded by the contractor to support its claim for
reimbursement. Government-furnished property is transferred from a
program's accountability to the contractor's accountability using a form
forwarded by the Property Administrator for verification of receipt by the
Contractor. Annual inventories are requested of all nonexpendable property.
A final inventory must contain all residual property, expendable and
nonexpendable.
M-6.304 Actions Involving Other Property Accountable Area Offices
Property accountable areas are established throughout EPA to control
Government-owned property. Each program is an area within an accountable
area, and all of that program's equipment is charged to that particular area.
Therefore, when a determination is made and authorized by the Contracting
Officer to provide Government property to a contractor, the Project Officer
must notify both the Property Administrator and the person within its program
who is responsible for the control of that property, so that a transfer of
responsibility may be processed. No movement of equipment, either to or
from a contract shall be made without involvement of the Property
Administrator.
M-6.305 Written Property Control Procedures by Contractors
Normal contract property administration practice provides for the control
of property by means of written procedures that communicate the
organization's standards, techniques, and instructions to operational personnel
for uniform application. Immediately after the award of an initial contract,
the Property Administrator will request the name, title, address, and
telephone number of the contractor's representative for contract property
administration. Contractors dealing with large inventories or high dollar value
equipment that is Government-furnished or contractor-acquired will be
requested to provide their property control system policies and procedures to
the Property Administrator for approval regardless of the categories of
property involved (i.e., nonexpendable, noncapitalized and/or supplies). In
cases where a contractor has only a few employees, the need for written
procedures for effective management of Government property will be
evaluated by the Property Administrator based on the contractor's explanation
of his controls and observation of his performance during the early stages of
the contract. If the control system is found to be inadequate by the Property
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Administrator, necessary corrective actions will be referred to the
Contracting Officer. The Project Officer does not normally see or review the
contractor's accounting procedures, as this is the responsibility of the
Property Administrator and, occasionally, the Contracting Officer.
M-6.306 Property To Be Furnished and/or Acquired After Inception of the
Contract
M-6.306-1 Needed Information
If a need for property arises after a contract award, the Contracting
Officer should be notified in writing and requested to issue a contract
modification reflecting the addition. The same information required in the
Purchase Request for the initial contract is required (see M-3.106-16).
M-6.306-2 Disclosure of Unauthorized Property
When Government property has been provided to a contractor but not
provided according to any contract provision, the Project Officer should
promptly send the Contracting Officer (with a courtesy copy to the Property
Administrator) notification of all known circumstances and facts pertaining to
the contractor's receipt of the property and the required statement to support
the issuance of a contract modification (see M-3.106-16).
M-6.3 06-3 Subcontractors
(a) Project Officers who want to authorize the furnishing of Government
property or the acquisition of contractor-acquired property to subcontractors
must follow the same procedures used for dealing with a prime contractor.
The prime contractor is responsible for acquiring any information about
Government property from the subcontractor and for reporting to the Property
Administrator. The same procedures regarding property acquisition,
utilization, disposal, etc. apply to the subcontractor as welL
(b) If property is furnished and/or acquired by a subcontractor, it is the
responsibility of the Project Officer and prime contractor to assure that the
subcontractor operates according to all EPA regulations, that the property is
used only as authorized by the contract, and that it is adequately cared for and
maintained. Procedures necessary to assure the accomplishment of this
responsibility should be included in any contractor's property control system.
M-6.306-4 Accessory Item
During the performance of a contract, it may be necessary to acquire an
item of property that will be used as an accessory to equipment owned by the
contractor. Where such equipment is provided and is attached to contractor
equipment, EPA is responsible for bearing all costs for disassembly,
disconnection, etc. to allow for physical disposal of the property. This process
can be quite costly. Even though the accessory item may not exceed the
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capitalization criteria, it is accountable for the life of the contract, and title
always remains with the Government. The only exception occurs with
educational and nonprofit organizations.
M-6.307 Monitoring Activities
M-6.307-1 Review of Reimbursement Vouchers
Reimbursement vouchers submitted by the contractor under
cost-reimbursement contracts are forwarded to the Project Officer by the
Financial Management Office for review and approval of contractor-acquired
Government property. All charges to the contract for acquisition of
equipment and materiel must have been previously authorized within the
contract. Such acquisitions must be individually itemized on EPA Form
1730-1, "Report of Nonexpendable Government Property Acquired By
Contractor," to show the required personal property management information.
Those items acquired but not authorized under the contract should be brought
to the attention of the Financial Management Office, the Contracting Officer,
and the Property Administrator. If the Project Officer determines that an
acquisition was not required for the performance of a contract, he should
recommend to the Contracting Officer and Financial Management Office that
the contractor not be reimbursed for the purchase (see M-6.315 Suspension of
Payment).
M-6.307-2 Inventories
(a) The Property Administrator acquires annual, final or at times special
inventories from contractors having contracts under which property has been
furnished or acquired. The inventory is performed by the contractor and
includes property associated with particular contracts. The process includes
reconciling the inventory with the property administrator's records. Annual
inventories include all nonexpendable and noncapitalized items acquired,
furnished, and/or rented/leased. Final inventories also include nonexpendable
and noncapitalized items, as well as expendable items not consumed during the
performance of the contract, regardless of their value. The amount of
accrued lease credits for leased property are included on the final inventory.
The final inventory is furnished to the Project Officer for disposition
recommendation. Annual and special inventories are available to the Project
Officer on request. The Project Officer may elect to:
(1) reassign the inventory or a part thereof to another contract;
(2) reassign inventory to a licensee by means of a Revocable License
Agreement for a loan;
(3) have the inventory returned to the sponsoring program; or
(4) report the inventory as unrequired to the needs of the sponsoring
program.
(b) If the property is installed so as to necessitate removal and/or
restoration, the Project Officer should provide the Property Administrator
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with estimated costs of removal and restoration and with a list of actions
required (e.g., disconnection of utilities, use of crane, special handling
equipment, etc.). The Project Officer should also advise the Property
Administrator of any and all unusual circumstances related to the inventory.
For example, is the property contaminated or unsafe for further use? Do any
odors exist that could prohibit further use? How is the property installed
(underground, in a body of water)?
M-6.307-3 Inspections
(a) During site visits, the Project Officer should ascertain or verify the
status of both contractor-acquired and/or Government-furnished property that
is in the possession of the contractor. During his site visits, the Project
Officer should also assure himself that the contractor has affixed Agency
property decals to all equipment in the contractor's possession. In addition, a
positive determination should be made that the property is being used
according to the contract performance requirements listed in the scope of
work and/or any special property article. [Note: Equipment not required for
performance is to be reported by the contractor to the Property Administrator
for coordination with the Project Officer as to future needs. However, this
may not always occur.] If equipment is not required, the Project Officer may
want to: (1) assign the property to another EPA contractor, (2) assign to a
licensee through a Revocable License Agreement; (3) return the property to
the sponsoring program; (4) make the property available to another EPA
program; or (5) consider the property as excess to his needs.
(b) The Property Administrator will coordinate all disposal transactions
with the contractor after receiving written advice from the Project Officer.
M-6.307-4 Preventive Maintenance
Project Officers should assure that preventive maintenance is performed
on a regularly scheduled basis by the contractor to prevent malfunctions and
to correct minor defects before they result in serious consequences. An
effective preventive maintenance program shall be performed by the
contractor, and records shall be maintained to disclose the maintenance
actions performed and deficiencies discovered as a result of inspections.
M-6.307-5 Changes, Modifications, or Alterations to Property by
Contractors
(a) A Project Officer desirous of advising a contractor to modify, alter,
or cannibalize property in their possession should request authorization from
the Property Administrator before the actual transaction. The Property
Administrator will present the determination and findings of the
contractor/Project Officer to a three-member Board of Survey for their
approval.
(b) Contractors shall not modify, alter, or cannibalize any property until
written approval is received from the Property Administrator. Contractors
are liable when Government property is damaged or destroyed, or when there
is evidence of unreasonable use or consumption.
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M-6.307-6 Return/Transfer of Property
(a) If property is to be returned to the Government before completion of
the contract, the Property Administrator must be advised promptly in writing
so that an adjustment in accountability is made to the contract.
(b) If the need arises to transfer an item of property from one contract
to another, the Contracting Officer and the Property Administrator for both
contracts must be advised in writing so that all records (both contract and
property) can be modified. Detailed property information should be included
in the correspondence to assure that the proper item is transferred.
M-6.308 Transportation Considerations
Once approval and/or modification has been given to furnish property,
transportation may be required to ship it to the contractor. EPA Form 1700-4,
"Request for Shipping Services," must be prepared and forwarded to the
appropriate Shipping Officer, who will make such arrangements. If the
required packing, crating or rigging services cannot be accomplished in-house,
EPA Form 1900-8, "Procurement Request/Order," must be prepared and
forwarded to the appropriate Procurement Office. If an item is to be
transported from the contractor's site, the Property Administrator must be
advised as to when and where it is to be shipped. Advice will then be given to
the contractor by the Property Administrator as to how, when, and where to
ship the property.
M-6.309 Packing and Crating
(a) Property can be prepared for transit to or from a contractor's
facility in two ways. One method is to arrange for a household goods carrier
that will pick up the property from within the facility, wrap it in a blanket,
place it in a household goods van, and transport it to the exact location. This
service is not considered as dock-to-dock, and at times it is less expensive
than the normal method of packing, crating, and transporting by common truck
carriers. This type of service is definitely less costly than the use of wooden
crates for packing and crating the materiel. If cardboard containers are to be
used, the cost savings are questionable. Normally it is best to use a common
truck carrier. EPA Form 1700-4, "Request for Shipping Services," should be
executed by the Project Officer and sent to the appropriate Shipping Officer
with a copy of the form to the Property Administrator.
(b) The common truck carrier method requires the Project Officer to
complete EPA Form 1900-8, "Procurement Request/Order," for packing and
crating if the contractor does not have facilities to perform such a service or
does not have funds within the contract for packing and crating. If the
contractor has the capability and can be authorized to perform the services,
this method is preferred. The Project Officer should execute EPA Form
1700-4, "Request for Shipping Services," to have the common truck carrier
transport the property to its destination. After a carrier is selected by
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the Property Administrator, contractor, or local Shipping Officer, the item is
either shipped by Government bill of lading or the carrier is requested to ship
the item by the least expensive means available. Common truck carriers are
the most economical means of transportation. However, in special situations
that require expediting the shipment, air transportation can be used even
though it is more expensive. The Project Officer must justify the need for
expediting the shipment. For those facilities with a Shipping Officer, the
Project Officer should arrange for outbound shipments going to the contractor
and furnish the Property Administrator with a copy of the Government bill of
lading or memorandum of advice.
M-6.310 Declaration Concerning Contamination of Equipment
(a) When Government property is no longer required at the contractor's
facility and removal is desired, the contractor must issue a certification that
the property is free of biological, radioactive, chemical or any other
contamination hazardous to health and that the property is safe for shipment
or acquisition by others. The following certification shall be signed by an
authorized official of the contractor for each excess declaration transaction
or for the final inventory and forwarded to the Property Administrator with a
courtesy copy to the Project Officer:
I certify that the listed property is free of biological,
radioactive, chemical, or any other contamination
hazardous to health and that the property is safe for
disposal.
Signature
Title
Date
(b) When the contractor is unable to decontaminate the property for
shipment, the items shall be identified on the final inventory or special letter
of request to the Property Administrator. A copy of such information will be
sent to the Project Officer so as to enable the Property Officer recommending
further procedure to process the property.
(c) Once the Property Administrator receives disposal instructions, the
contractor is advised as to how to dispose of the property. The Property
Administrator will determine whether the property is needed within the
Agency or whether it is excess to EPA's needs.
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M-6.311 Trade-in of Property
The contractor should first discuss the need or reason for a trade-in of
property with the Project Officer. If the Project Officer has no alternatives,
such as reassignment of a similar item from in-house inventories to the
contractor, he should advise the contractor to acquire quotes for puchase
prices with and without trade-in. Once the quotes are acquired, they should be
submitted to the Contracting Officer for review and approval. The
Contracting Officer will review the transactions with the Property
Administrator to determine whether outright purchase or purchase with
trade-in option is the most beneficial to the Government. Once the
Contracting Officer determines the appropriate method, a contract
modification will be issued to authorize the contractor to acquire the property.
M-6.312 Lost, Stolen, or Damaged Property
When equipment is lost, stolen, or damaged, a comprehensive
determination and findings must be filed with the Property Administrator by
the contractor within three days after determining the actual status of the
property. All the circumstances surrounding the transaction should be
outlined, including names of individuals involved in the investigation, their
title, and organization. The local police and the FBI must be advised of any
EPA materiel suspected of having been stolen. Damaged property should be
retained by the contractor until written notification is received from the
Property Administrator relieving him of accountability. Attached to the
determination and findings for stolen property should be copies of police and
FBI reports. A determination and findings for lost property should include a
statement indicating what search was made and which responsible individuals
were contacted in attempts to locate the materiel. The determination and
findings will be used to process a Report or Survey. Board members will
review all circumstances surrounding the event and render a decision as to
contractor liability, if any. Any given case involving lost, stolen, or damaged
property will be considered open until the contractor receives a written
response from the Property Administrator. The Project Officer must either
endorse the determination and findings or require additional information.
M-6.313 Disposal of Installed Personal Property
Installed personal property falls into three categories. The first is
materiel that can be readily removed from the contractor's facility with
simple labor services (i.e., it is not installed into any utilities, and it requires
no restoration). The second category is materiel that is installed in the
contractor's facility and that requires restoration to the satisfaction of the
contractor. The third category is materiel installed into (i) contractor's
equipment and/or equipment in the possession of the contractor but owned by
another Federal agency; or (ii) EPA equipment authorized for use under
another contract for which the period of performance has not expired. A
determination regarding restoration of the contractor's facility or equipment
should be made and incorporated into the official contract at the same time
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the property is authorized in the contract. Various factors should be
considered in this determination including, for example, whether it is in the
best interest of the Government to abandon the property, what would be
involved in restoring the contractor's site, etc.
M-6.314 Sale of Property
Specialized equipment needed for a contract which cannot be used by EPA
because of its specialization may sometimes be authorized by the Contracting
Officer and involve a "buy-back" article. A contractor may be authorized to
secure at his expense the services of an independent appraiser, acceptable to
the Government, to evaluate and determine the current on-site, fair market
value of the equipment. The contractor will then credit the contract for the
appraiser's estimate, thereby transferring title to the contractor. These
transactions take place at the end of the contract.
M-6.315 Suspension of Payment
Whenever the Property Administrator has problems with the contractor in
acquiring final inventories, information to confirm shipment, or transactions
relating to lost items of Government property, a memorandum will be provided
to the Financial Management Office recommending that: (i) the current or
next voucher be suspended in total, (ii) a given amount be suspended in total
from the next voucher; or (iii) the amount of the item in question be denied
until the problem can be resolved. The Property Administrator will furnish the
Contracting Officer and Project Officer copies of all correspondence. He will
also notify the Financial Management Office when the problem is resolved and
advise them of the final action taken.
M-6.316 Short-Term Loan of Property
Loans on a short-term basis should not be made to a contractor without a
contract modification. If the need exists for providing material to a
contractor, the Project Officer should immediately advise the Contracting
Officer in writing with a copy to the Property Administrator. Included in this
memorandum should be a comprehensive determination and findings to be
considered in issuing a modification to the contract (see M-3.106-16).
M-6.317 Revocable License Agreements
A Revocable License Agreement is used to "loan" Government property to
a non-Federal institution. The EPA must derive a benefit from the loan. The
use of a revocable license is not applicable for equipment furnished to a
contractor but may be used with a cooperative agreement or a grant.
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M-6.318 On-Site Transfer of Equipment to a New Contractor
The on-site use of existing Government-owned facilities/materiel by
contractors located at installations owned and operated by the Government
requires extremely close coordination by both the Project Officer and
Property Administrator whenever contractors change. Both the present
contractor and the new contractor must conduct their own physical inventories
independently of each other and submit their findings to the Property
Administrator for reconciliation and resolution. The inventory from the
present contractor is used as the final inventory and if completed to the
satisfaction of the Property Administrator, authorization of contract property
administration closeout is granted. The inventory provided by the new
contractor is used to ensure that the Government-furnished property is
accurately stated in the contract and any problems are resolved with the
previous contractor before contract property administration release.
Normally, on-site type contracts involve significant inventories, and it is to
EPA's advantage to ensure that the new GFP listing in the contract's
Government-furnished property article is totally correct. Discrepancies
between the old and new contracts require the issuance of a contract
modification to the new contract to reflect the differences. Project Officers
are requested to physically assist in resolving any overages and/or shortages
reported by either contractor and, if necessary, in the preparation of
supporting documents to a Report of Survey action.
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EXHIBIT 6-1
Sample Contract Administration
File Plan
Basic Contract File
Copy of contract and all modifications thereto
Copy of specifications, drawings, or manuals incorporated into the
contract by reference
Listing of contractor submittal requirements
Listing of Government-furnished property or services
Listing of all information or documents furnished to the contractor
Copy of the pre-award survey, if conducted
Schedule of compliance reviews
File on PO and Contract Monitor Designation
Copy of PO designation
Letters of contract monitor assignments with copy of transmittal letter
furnished to the contractor
Listing of specialized contract administration functions delegated to the
PO or contract monitor
Internal Correspondence File
Record of communications between PO and other support activities
In-house p re-performance checklist
Copies of all correspondence between the PO and the Contracting Officer
Copies of correspondence between the PO and contract monitors and
sponsoring activities
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EXHIBIT 6-1 (Continued)
Contractor Correspondence File
Copy of all general correspondence related to the contract
Original of all contractor submittals of data and reports
Copy of notice to proceed, stop work, or correct deficiencies
Copy of all letters of approval pertaining to, for example: materials; the
contractor's quality control program; prospective employees; work
schedules, etc.
Payment File
Information relative to discount provisions for prompt payment
Copy of contractor invoices
Copies of inspection reports
Letters pertaining to contract deductions or fee adjustments
Back-up documentation for recommendation of contractor payment or
progress payment.
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EXHIBIT 6-2
PROJECT OFFICER'S EVALUATION OF CONTRACTOR PERFORMANCE
R-ii ••-- nn.iit>n: i»' •. fie : «?'••>'" c oc." i -;g -i—•.
1 FROM
3. ='CR«ARO COriima/ only) TO
CONTRACTOR RELATIONS SECTION PM-2141
.tASH-NCTON OC SJ4AO
4. CONTRACT NO.
s. ACTIVITY
S. CONTRACTOR'S NAME AND ADDRESS
7. PROJ. OFFICER'S NAME
8. TECHNICAL PROGRAM
9. BASIC CONTRACT COST
10. FINAL CONTRACT COST
I1 CONTRACTOR PROJECT OFFICER'S NAME
12. PROJECT TITLE
13. EVALUATED CONTRACTOR'S TECHNICAL ADHERENCE TO SCO°S OF WORK AND COMMITMENT OF PERSONNEL (Circle ona ol fhe
.'o/fotvfria and g/va narrative ol raimt) B VC A P U
14. EVALUATE CONTRACTOR'S TECHNICAL PERFORMANCE AND TECHNICAL APPROACH TO THE PROJECT (Clreia ona of rfia
and «fva nairailn ol ratlnO E V6 A P U
IS. EVALUATE CONTRACTOR'S SUBMISSION/DELIVERY OF PROGRESS REPORT, FINANCIAL REPORT. =1NAL REPORT. EQUIPMENT
fCirela ona ol Iho lotto jrlnf and diva narraffva ol rating) E VC A P U
14. EVALUATE CONTRACTOR'S DELIVERED END PRODUCT (Report. Equipment, otc.J (Clrelm ona ol the lollowlni and Jlv» narrallv* ol
mint) E VC A P U
17. HAS CONTRACTOR I I OVERRUN, OR ~* UNOERRUN THE CONTRACT (Explain reason lor eirher)
18. RECOMMENDATIONS AND ADVICE TO PERSONNEL CONSIDERING THIS CONTRACTOR FOR FUTURE SOLICITATIONS.
'9. PROJECT OFFICER'S SIGNATURE
20. DATE
21. OVERALL BATING ,'Oiecf-
E VC A P U
EPA Form 1900-27 !Ro» 10-73)
= PEV'OU3 COITION IS O3SO1.STE
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EXHIBIT 6-2
(Cont'd)
INSTRUCTIONS
Prepare in duplicate and distribute as follows:
Original to be forwarded to Headquarters, Contractor Relations Section (PM-214), Washington, D.C. 20460
Second copy to be forwarded to Contract Administrator for contract file
The following guide lines are to be used by the Project Officer responsible for the project in the preparation of the form
at the completion of the technical phase and/or acceptance of the final end product of the contract. The information is to be
accurate, as it will provide other program staff personnel or anyone else in the agency an orderly and uniform method of deter-
mining and recording the effectiveness of contractors in meeting their contractual commitments for future consideration in
contract awards. The information will be filed in the contract file, and with the contractor's bidders application file. The Project
Officer's technical rating of the contractor and the contracting officer's business rating will be entered on the automatecbidders*
list by the Contractor Relations Section. All items have been numbered to identify specific instructions as they pertain to indi-
vidual items.
Rate Contractor in areas listed below by circling one of the following:
E (Excellent); VG (Very Good); A (Average); P (Poor); or U (Unsatisfactory)
Provide a detailed narrative of background material the rating is based on. Attach additional sheets, if necessary, to provide
detailed narrative.
ITEM(S)
FOLLOWING ITEMS TO BE FILLED IN 8Y THE CONTRACT ADMINISTRATOR RESPONSIBLE FOR THE CONTRACT.
1 thru 4 Self-explanatory
5 Activity responsible for the project such as Washington, D.C., RTF, Cincinnati. Region No. or Laboratory.
6 and 7 Self-explanatory. To be filled in by the Contractor Relations Section, or the Small Business Specialist at the NERCS.
8 Name of Section or Division within the Program responsible for the project.
9 and 10 Self-explanatory.
11 Self-explanatory.
12 Self-explanatory.
FOLLOWING ITEMS TO BE FILLED IN BY THE COGNIZANT PROJECT OFFICER
13 Has contractor fulfilled the requirements of the scope of work is specified in the contract? Did the Contractor
adhere to his proposal, including his proposed commitment of personnel?
14 Indicate degree ot creative contribution (level of technology) made by the contractor in response to their understand-
ing of EPA's mission. If engaged in study contract or consulting contract, contractor's understanding of Fedenl Laws
affecting the work (e.g., for a consultant on impact statements, understanding of NEPA and all related guidelines and
significant court decisions).
IS Information desired is: did the contractor submit the report or equipment as per contract schedule? If not, give reason.
16 Information desired is: is the report or equipment delivered of high value and/or good quality? Did the report require
many corrections, and did the contractor balk at making the corrections without additional cost9
17 Information desired is: give number of overruns and reasons for this (do not consider scope changes where ccntrjc.o:
had to submit a proposal for the additional work); ratio of addit'onal funding under limitation or cost provision to
original estimated costs. Was underrun achieved by reducing the scope of work or through the development of new
methods?
6-48 Second Edition
18 thru 21 Self-explanatory. April 1984
EPA Form 1900-27 [R.v. 10-73)(R.v«rt«)
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TABLE OF CONTENTS
CHAPTER 7
M-7.000 RIGHTS AND RESPONSIBILITIES UNDER
GOVERNMENT CONTRACTS
M-7.100 Fundamental Duties of the Parties
M-7.101 The Government
M-7.101-1 Contractor Redress
M-7.101-2 Actions to Protect the Government's Rights and Interests
M-7.102 The Contractor
M-7.102-1 End of Basic Duty to Proceed
M-7.102-2 Situations in Which the Basic Duty Is Not Ended
M-7.102-3 Circumstances in Which Performance May be
Suspended or Stopped
M-7.200 CONTRACT QUALITY REQUIREMENTS
M-7.201 Types of Contract Quality Requirements
M-7.202 Inspection
M-7.203 Notification of Rejection
M-7.204 Revocation of Acceptance
M-7.204-1 Latent vs. Patent Defects
M-7.204-2 Fraud
M-7.204-3 Gross Mistakes
M-7.204-4 Guarantees or Warranties
M-7.204-5 Remedies When Acceptance Is Revoked
M-7.205 Peer and Administrative Review
M-7.300 CONTRACT MODIFICATIONS
M-7.301 Introduction
M-7.302 Administrative vs. Substantive Changes
M-7.303 Unilateral Modifications
M-7.304 Bilateral Modifications
M-7.305 The Changes Clause
M-7.305-1 Constructive Changes
M-7.305-2 General Scope of the Contract
M-7.305-3 Coordinating Change Orders
M-7.305-4 Concluding Comments
M-7.306 Equitable Adjustments
M-7.306-1 Computation and Negotiation of Adjustments
M-7.306-2 Analysis of Cost of Changes
M-7.307 Role of the Project Officer Regarding Modifications
M-7.400 CONTRACT TERMINATION
M-7.401 Remedies for Deficient Performance Short of Termination
M-7.401-1 Payment Stoppage
7-1
7-1
7-1
7-2
7-2
7-3
7-3
7-3
7-5
7-5
7-5
7-6.1
7-7
7-7
7-7
7-7
7-7
7-8
7-8
7-9
7-9
7-10
7-10
7-10
7-11
7-12
7-12
7-13
7-13
7-13
7-14
7-14
7-15
7-17
7-17
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TABLE OF CONTENTS (Continued)
CHAPTER 7 (Continued)
M-7.401-2
M-7.401-3
M-7.401-3(a)
M-7.401-3(b)
M-7.401-3(c)
M-7.402
M-7.402-1
M-7.402-2
M-7.402-3
M-7.403
M-7.403-1
M-7.403-2
M-7.403-3
M-7.403-4
M-7.403-4(a)
M-7.403-4(b)
M-7.403-4(c)
M-7.403-4(d)
M-7.403-4(e)
M-7.403-5
M-7.404
M-7.404-1
Reductions in Price
Liquidated Damages
Rate of Damages
Liquidated Damages Clause
Administration of Liquidated Damages
Termination for Convenience (T for C)
Steps Employed
Settlement
Involvement of the Project Officer
Termination for Default
Government's Right to Terminate for Default
Consequences of Termination for Default
Alternatives to Termination for Default
Procedures for Termination for Default
Preliminary Notice
Cure Notice
Notice of Termination for Default
Excusable Default
Termination Despite an Excusable Delay
Waiver of Default
Closeout Procedures
Project Officer Responsibilities for Closeout
7-18
7-18
7-18
7-18
7-19
7-19
7-19
7-20
7-21
7-21
7-21
7-21
7-22
7-23
7-23
7-23
7-23
7-24
7-25
7-25
7-26
7-26
EXHIBITS
7-1 EPA Form 1320-6, Project Officer Certification
7-2 Draft Letter Requesting Project Officer's Evaluation
of Contractor Performance
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CHAPTER M-7.000
RIGHTS AND RESPONSIBILITIES UNDER GOVERNMENT CONTRACTS
M-7.100 Fundamental Duties of the Parties
The parties to any Government contract are the United States of America
(the Government) and the contractor. Each party has different rights and
obligations which should be clearly expressed in the contract document itself.
M-7.101 The Government
The Government has the obligation to refrain from unreasonable
interference or delaying the contractor in its contract performance. Examples
of violations of this obligation are:
(a) Issuing defective specifications that result in delaying the contractor
(a square peg to go in a round hole)
(b) Failing to provide in a timely fashion and in usable condition
Government-furnished property or materials or failing to provide access to
Government premises or data
(c) Delaying unreasonably Government required approvals or consents.
These might include approval of drawings or consent to subcontracts. How
much delay is unreasonable depends on the facts of each case.
M-7.101-1 Contractor Redress
(a) Violations such as those listed above are conditions for which the
contractor is legally entitled to recover the amount of any damage caused by
the breach. Some contracts have clauses that provide for contract
adjustments to avoid forcing the contractor to go to court. For example, the
Government-Furnished Property clause provides for equitable adjustment of
delivery time and for compensation if Government-furnished property is
delivered late or in unusable condition.
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(b) The contractor is entitled to an extension of time for performance if
there is an unreasonable Government delay or interference which hinders the
contractor's performance.
(c) If the Contracting Officer determines that any failure to perform
was due to causes beyond the contractor's control and without its fault, the
delivery schedule may be revised as provided by the Excusable Delay clause in
cost-reimbursement contracts. Such causes include acts of God or the public
enemy, fires, floods, strikes, and severe weather.
(d) The Default clause in fixed-price contracts does not provide for a
specific adjustment for delivery dates. It does, however, provide for an
extension of time to perform where failure to perform on time is beyond the
contractor's control and not due to negligence or the contractor's fault. Such
causes for failure are the same as mentioned above for cost-reimbursement
contracts. Government-caused delays would also entitle the contractor to
such relief.
M-7.101-2 Actions to Protect the Government's Rights and Interests
(a) All Government employees are servants of the citizens and taxpayers
of the United States and have a duty to act in ways that best serve their
interests. All contract administration personnel (including the PO) have a duty
to take actions required to meet the Government's obligations to the
contractor and to protect the Government's rights and interests. When the
Government buys something, it should get what it pays for—nothing more or
nothing less.
(b) This concept forms the basis for written instructions for contract
administration and is the basic guideline where such instructions are absent.
The requirement in Part 46 of the FAR involving inspection prior to
acceptance of contract supplies derives from the concept that the taxpayers'
funds should not be paid out prior to determining that what is delivered.is what
was ordered.
(c) Government personnel do not have the authority to accept less than
what was contracted for or to waive the right of the Government without
obtaining a suitable reduction in the Government's obligations to the
contractor. In some cases, it might be in the best interest of the Government
to give up a legal right, but this would require extraordinary authority.
(d) The Government's basic interest is to obtain timely performance or
delivery as provided for in the contract. To safeguard that interest,
Government personnel must keep informed of the contractor's progress and
deal with delays and problems as they develop and, if required, exercise the
Government's rights under the contract through the Contracting Officer.
M-7.102 The Contractor
The basic duty of a contractor is to proceed diligently with the
performance of the contract. Specific details of the contractor's obligations
can be found in a reading of all of the contract provisions.
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M-7.102-1 End of Basic Duty to Proceed
This basic duty to proceed comes to an end:
(a) When the contract is completed.
(b) Upon complete termination of the contract under provisions that
permit the Government to terminate performance. (If the termination is only
partial, the contractor must diligently proceed with performance of the part
of the work that is not terminated.)
(c) If the obligation to continue performance is excused by (1) a
sufficiently gross and material breach by the Government of its duties and
obligations under the contract, or (2) impossibility of performance. However,
where performance is temporarily impossible, as in the case of temporary
unavailability of materials essential for making the contract supplies, the
contractor's duty to proceed will remain effective and the contractor must
continue once the obstacle to performance has been removed.
M-7.102-2 Situations in Which the Basic Duty Is Not Ended
(a) Acts of God or the Government, or others which result in the
impossibility of further performance, do not end the contractor's duty to
perform. An extension of time may be applied for, but the contractor still has
the duty to proceed. For example, a contractor gathering data on air currents
might be granted an extension of time due to severe storms but would still
have to complete the work within the rescheduled date.
(b) Disputes or disagreements do not suspend the duty to proceed. The
Disputes clause allows the contractor to appeal a question of fact from a final
decision of a Contracting Officer. However, the clause requires the
contractor to proceed during the appeal process in accordance with the
decision of the Contracting Officer.
M-7.102-3 Circumstances in Which Performance May Be Suspended or
Stopped
The parties may agree to permit or require the contractor to stop or
suspend performance in certain circumstances:
(a) When unexpected technical problems arise, it may be to the
Government's advantage to have the work suspended pending investigation and
testing to discover the cause of the problems and determination of the best
way to proceed.
(b) The Limitation of Cost and Limitation of Funds clauses in
cost-reimbursement contracts permit the contractor to stop work once the
contract funds are exhausted.
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M-7.200
CONTRACT QUALITY REQUIREMENTS
M-7.201 Types of Contract Quality Requirements
(a) Contract quality requirements fall into three general categories,
depending on the extent of quality assurance needed by the Government for
the acquisition involved. These categories are (1) Government reliance on
inspection by the contractor, (2) standard inspection requirements, and (3)
high-level contract quality requirements. Category (1) usually involves
common commercial items. Category (3) involves complex items with critical
application and generally entail the use of military-Federal specifications.
Most Government purchases are such that standard inspection requirements
are used.
(b) It is the responsibility of the contractor to "control" the quality of
supplies or services and tender to the Government only those that conform to
contract requirements. It is the responsibility of the Government to "assure"
that the contractor complies with the contract terms and specifications.
(c) Any one responsible for inspection and acceptance must know:
(1) The description, specifications, and standards of the items or services
required by the contract.
(2) The details of the Inspection clause.
(3) The contractual Quality Assurance/Quality Control Program
elements (Quality Assurance Project Plan, Inspection (Audit)
Procedures, and related facilities and equipment).
(4) The contractor's production on work process if such is pertinent to
accomplishing Government inspection.
M-7.202 Inspection Requirements
(a) Every contract has some form of inspection clause which sets forth
the rights and responsibilities of the contracting parties concerning the
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delivery or performance of acceptable supplies or services. The working of
the clauses vary somewhat depending on whether its for use in supply versus
services contracts and also the type contract involved, i.e., fixed-price or
cost-reimbursement type. Some of these rights and responsibilities are as
follows:
(1) The contractor is required to provide and maintain an inspection
system acceptable to the Government and maintain complete records
of such inspections.
(2) The Government has the right to inspect supplies or services before
acceptance. With this right goes the responsibility to make
inspection in a timely manner that will not unduly delay the work.
(3) The Government has the right to reject supplies that do not conform
to contract specifications. In cost-reimbursement type supply
contracts, the Government, may up to six months after acceptance,
require the contractor replace or correct supplies that are
nonconforming at time of delivery.
(4) In fixed-price supply contracts, acceptance by the Government is not
conclusive with regard to latent defects, fraud, or such gross
mistakes as to amount to fraud.
(5) In service contracts, if services performed do not conform to
contract requirement, the Government has the right to require the
contractor to perform the services again at no increase in contract
price or fee. When defective services cannot be corrected by
reperformance, the Government may reduce the price to reflect the
reduced value of the services performed.
(6) For work involving environmentally related measurements for which
the Agency Quality Assurance requirements apply, the Government
may conduct one or more on-site technical systems audits
(qualitative audits) during the course of the project. The Statement
of Work must provide for the right of the Government to perform
qualitative audits. These external quality assurance procedures will
be performed by the EPA Quality Assurance Officer or by his or her
independent third party designee. Selection of the specific areas of
focus for systems audits will be commensurate with the scope and
needs of the program.
Areas of effort which can be considered in systems audits include:
(1) Facilities
(2) Equipment
(3) Methods
(4) Quality Control Systems
(5) Recordkeeping
(6) Data Validation
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(7) Maintenance and Calibration Procedures
(8) Reporting
(d) Adherence to Documented Procedures
(10) Procurement and Inventory Procedures
(11) Personnel Training
(12) Feedback and Corrective Action
In addition to the above, the Government may require the
contractor's participation in one or more EPA (quantitative)
performance audits during the project duration if stipulated in the
statement of work. The purpose of these performance audits will be
to assure and document that data quality meets project objectives.
Performance audit techniques could involve the use of reference
materials of known composition or value and/or split samples for
independent analyses, independent calibration checks on individual
system components, and/or the use of colocated samples. A
complete record of testing information (including printouts, graphs,
cai brat ion charts, and all other pertinent information used to arrive
to the reported results) shall be submitted with test results.
M-7.203 Notification of Rejection
(a) To exercise its rights of rejection, the Government must notify the
contractor of the rejection. The notice should be prepared by the Project
Officer and signed by the Contracting Officer. It should:
(1) Be in writing
(2) Specifically identify what is rejected
(3) Identify the basis for rejection; that is, the specific failure to
conform to contract requirements
(4) State what corrective action is required
(5) State whether correction should be made at the Government facility.
(b) Unless the contract says otherwise, acceptance or rejection must be
made as promptly as is practical after delivery, since a delay in such notice
may, in some circumstances, imply acceptance. Inspection of partial products
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or work in process does not relieve the contractor of the responsibility for
correcting defects discovered prior to acceptance of the final product or the
completed work. Furthermore, Government failure to inspect, and to accept
or reject, does not relieve the contractor from responsibility for a defect.
M-7.204 Revocation of Acceptance
The Government has the right to require correction after an item has
been accepted where latent defects, fraud, or gross mistakes amounting to
fraud are involved.
M-7.204-1 Latent Vs. Patent Defects
(a) A patent defect is one that could reasonably be discovered by normal
methods. A latent defect is one that could not be reasonably discovered using
normal inspection techniques. It does not have to be impossible to discover. A
defect discoverable by special tests (X-ray) is a latent defect if such special
tests are not normally used to inspect that kind of item.
(b) The fact that the contractor could have very easily discovered the
defect does not make it patent. Government contracts personnel or full-time
quality assurance/quality control specialists are qualified to determine if a
defect discovered after inspection is patent or latent.
M-7.204-2 Fraud
The Government has the right to revoke acceptance if it was deceived
into an acceptance by fraud. Fraud involves an intentional deceit or
falsehood. Acceptance due to fraud may be revoked even if the defect was
patent.
M-7.204-3 Gross Mistakes
If the contractor's conduct with respect to a defect involves a mistake so
gross as to amount to fraud, the Government has the same rights to revoke
acceptance as if there was fraud.
M-7.204-4 Guarantees or Warranties
A warranty or guarantee is a promise or affirmation given by a seller to
EPA regarding the nature, usefulness, or condition of the supplies or
performance of services to be furnished. The principal purposes of a
warranty/guarantee are to delineate the rights and obligations of the
contractor and EPA for defective items and services and to foster quality
performance. Generally, warranties survive acceptance of the contract items
for a stated period of time or use, or until the occurrence of a specified event,
notwithstanding other contractual provisions pertaining to acceptance by the
Government. Thus, they allow EPA additional time after acceptance in which
to assert a right consistent with the warranty or guarantee.
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M-7.204-5 Remedies When Aceeptanee Is Revoked
When acceptance is properly revoked, the Government has the same
remedies available as when defects are discovered prior to acceptance (see
Inspection requirements above).
M-7.205 Peer and Administrative Review
(a) The Administrator has implemented an internal review process for
EPA scientific, informational, and educational materials designed for public
distribution. Any such materials attributable to EPA, whether produced by an
EPA employee, consultant, contractor, or grantee, must be reviewed through
the control system established in the EPA Order prior to public distribution.
The intent of the Order is to ensure the high quality, completeness, and
accuracy of materials attributable to EPA.
(b) A new contract clause restricts the contractor from independently
publishing or printing material generated under contract until after completion
of the EPA review process. The Project Officer is to notify the contractor of
review completion with the number of calendar days specified in the contract
clause after the contractor's transmittal to the Project Officer of material
developed under the contract. If the contractor does not receive Project
Officer notification within this period, the contractor is to notify the
Contracting Officer in writing.
(c) The contract clause will establish statements the contractor must
include in any public distribution of the contract-generated material, and
requires the contractor to send the PO and CO a copy of such material 30 days
prior to publication.
(d) The procedures for existing contracts lacking the new clause are:
(1) Products of existing contracts should be accepted before initiating
any review as described in EPA Order 2200.4.
(2) Each Associate, Assistant, or Regional Administrator and Staff
Office Director in the Office of the Administrator, or his/her
designee, will peer and administratively review his/her own
documents prior to release to the public. The Project Officer will be
held accountable for compliance with the objectives of Order 2200.4.
(3) The Project Officer is responsible for incorporating the results of this
review and for final disposition of the material in accordance with
applicable requirements.
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M-7.300
CONTRACT MODIFICATIONS
M-7.301 Introduction
(a) Contract modifications fall into two major classes: unilateral and
trilateral. Unilateral modifications are those which the provisions of the
contract allow the Contracting Officer to make and which do not require the
consent of the contractor. A bilateral modification requires the contractor to
consent to the contract change. Listed below are some typical areas in which
modifications are made to contracts. Each has been classified as being a
unilateral or bilateral modification.
Purpose of Modification Unilateral Bilateral
Changes in:
specifications, designs, drawings, X
place of delivery, inspection, acceptance
method of shipping or packing.
Exercise of option X
Termination X
Administrative changes X
Novation agreements X
New procurement: increase in X
scope or quantity of work
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Purpose of Modification Unilateral Bilateral
Equitable adjustments:
Differing site conditions X
Suspension of work X
Government property (fixed-price and R&D) X
Inspection (fixed-price supply and R&D) X
Infection and correction of defects X
(cost-reimbursement supply and R&D)
(b) This section discusses contract.modifications per se with the intent
of providing insight both into their use and the Project Officer's involvement
in the modification process.
M-7.302 Administrative Vs. Substantive Changes
An awarded contract should contain all the necessary provisions for
completion of the work and discharge of the obligations of the parties. Other
than exceptions such as fixed-price redeterminable contracts, modifications
are not contemplated at the time a contract is signed. As a practical matter,
however, few contracts are completed without some sort of modification.
Many modifications are simply administrative changes that do not affect the
substance of the contract Examples would be changes in Government
appropriation data, paying office, or name of Project Officer. Other
modifications do involve substantial changes to details of price, quantity,
quality, or delivery.
M-7.303 Unilateral Modifications
Unilateral modifications may be either administrative or substantive in
nature (see the section on the Changes clause, below). Change orders involve
the Contracting Officer in unilaterally directing the contractor to perform
work other than that which was originally called for in the contract. In
addition, the Contracting Officer may make decisions involving disputes that
are reflected in unilateral modifications. Terminations and exercise of options
are issued unilaterally. These rights to unilaterally direct the contractor are
provided for in the general provisions of the contract.
M-7.304 Bilateral Modifications
(a) Substantive changes to the contract that the contract does not
provide the Contracting Officer the unilateral right to make require the
agreement of the contractor on a bilateral modification or supplemental
agreement. Both parties may enter into supplemental agreements affecting
many parts of the contract (see section on Equitable Adjustments clause).
These are reached by mutual consent and must include all the elements of a
legal contract.
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(b) Mutual agreement is not always enough to allow a modification to a
contract. For example, the parties may want to add work which is outside the
scope of the contract. However, this is new procurement and requires either a
Justification for Noncompetitive Procurement or a competitive procurement.
In addition, no clause in a contract required by law can be eliminated or
changed, nor can the Contracting Officer consent to waive any substantative
right of the Government without consideration. However, many changes can
be made. Delivery schedules can be moved up or delayed, advance agreements
can be reached concerning allowability of costs, or any other number of
actions may be taken.
(c) Many bilateral actions will require negotiation concerning what
constitutes proper consideration under the supplemental agreement. Such
consideration is subject to the same principles as apply to a new procurement
or equitable adjustments under the Changes clause (see below).
M-7.305 The Changes Clause
(a) Generally, Government contracts contain a "Changes" clause. The
clause may differ slightly depending on the type of contract, but the provisions
are essentially the same. They generally provide that the Government may
unilaterally make changes, within the general scope of the contract, in any one
or more of the following:
(1) Drawings, designs, or specifications (in the case of supplies, only
where the supplies are to be specifically manufactured for the
Government)
(2) Method of shipment or packing
(3) Place of inspection, delivery, or acceptance.
(b) Special Changes clauses for construction and transportation contracts
permit the Government to make unilateral changes in the work to be
performed in ways tailored to the specific industry for which these special
clauses are designed (e.g., a change in amount of Government-furnished
property).
(c) The contractor is obligated to proceed with the work as changed
when a change order is issued. If there is an impact on schedule, cost, or any
other contractual aspects, the contractor may submit a claim for an equitable
adjustment within thirty (30) days of receipt of the change order. If the cost
of work is decreased, the Government has a right to a downward equitable
adjustment in the contract price.
(d) Changes are limited to those that fall within the general scope of the
contract and must be made by the Contracting Officer in written form.
(e) A change requires the execution of a procurement request (EPA Form
1900-8) plus associated procurement request rationale. For guidance in this
area, refer to Chapter 4.
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(f) Revisions of approved Quality Assurance Project Plans which have
been incorporated in the statement of work require the issuance of a change
order by the Contracting Officer.
M-7.305-1 Constructive Changes
(a) A constructive change results from action or inaction by the Con-
tracting Officer or any other authorized individual—e.g., the Project Officer—
which are of a nature that they can be construed or inferred to have the same
effect as if the Contracting Officer had issued a written change order pur-
suant to the Changes clause of the contract. In that the contract has "effec-
tively" been changed, the contractor is entitled to an equitable adjustment.
An example of a constructive change would be a failure on the part of a
Project Officer to review a report within the time frame provided within the
contract. Another example would be where a Project Officer during contract
monitoring directs a contractor to perform differently than provided in the
contract. The contractor may later claim that a constructive change was
made and seek an equitable adjustment. A PO's authority should be set forth
in writing and should specifically preclude any actions that may affect the
cost or price of the work.
(b) There is a fine line between a change and technical direction. What
might not have seemed important at the time may end up having a substantial
effect on final costs or performance. In such cases, it can be expected that
the contractor will file a claim.
M-7.305-2 General Scope of the Contract
(a) It is not always clear exactly what comprises the "general scope of
the contract.11 For example, the Changes clause allows for unilateral orders
changing the place of delivery, but the U.S. Court of Claims has found that a
substantial difference in the point of delivery in a transportation contract was
actually beyond the scope of the contract since, in that case, the place of
delivery was the subject of the contract. In supply contracts, the right of the
Government to make changes in specifications is limited to goods specifically
made for the Government and not off-the-shelf items.
(b) Changes affecting the quantity of the work are outside the scope of
the contract and not subject to the Changes clause. Additional work (not an
exercised option provision) is a new procurement. Substantial reductions in
quantity may actually be terminations rather than changes. Even if the reduc-
tion or deletion is stated in terms of alteration of drawings or specifications,
it may not be covered by the Changes clause. Minor modifications in design
are covered by the clause, even if they change the quantity of work to be
performed.
(c) Determining whether a proposed change is a new procurement, a
termination, or a change must be done by the Contracting Officer in the light
of the facts of the case. Often disputes arise in this area and may result in
litigation.
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(d) If defective specifications or drawings are later clarified by the
Government, it may be considered a change even though no formal change
order was issued. A change order is the proper method for changing any
specifications or drawings.
M-7.305-3 Coordinating Change Orders
The Contracting Officer issues change orders even though the Project
Officer has technical control over the contract; however, he or she discusses
the effects of a change with the Project Officer prior to issuing change
orders. Project Officers are most often performance-oriented people who
nevertheless must always consider the impact of changes on costs and delivery
schedules. Consequently, the PO should consult with the Contracting Officer
to understand the impact a change may have to the overall integrity of the
work effort while pursuing technical excellence. It should also be kept in mind
that excessive changes are a major cause of "cost growth."
M-7.305-4 Concluding Comments
Adjustments related to change orders are usually agreed to by both
parties, but the Contracting Officer has the authority to issue a unilateral
decision if agreement cannot be reached. A CO's unilateral decision is subject
to the Disputes procedures. The possibility of not being able to agree to the
equitable adjustment should act to discourage the issuance of unilateral
change orders. It is better to first work things out regarding money and time
rather than invoke the unilateral right to issue a change order. Paperwork is
reduced, as is the possibility of excessive charges by the contractor.
M-7.306 Equitable Adjustments
(a) Under the Changes clause, equitable adjustments to price, estimated
cost, delivery schedules, or other areas impacted by the change must be
reflected in a supplemental agreement. In addition to Changes, several other
clauses call for equitable adjustments under certain circumstances. Among
these clauses are:
(1) Differing Site Conditions (construction);
(2) Suspension of Work (construction);
(3) Government Property;
(4) Inspection (fixed-price supply and fixed-price R&D); and
(5) Inspection and Correction of Defects (cost-reimbursement supply and
cost-reimbursement R&D).
(b) The most common adjustments arise under the Changes clause. Basic
principles apply to all equitable adjustments. Both parties should be made
whole as a result of the adjustment. Neither party should gain an advantage or
suffer a loss. Profitable contracts should remain equally profitable and
existing losses should not be borne by the Government. That is the essence of
the term "equitable." The following discussion is based on the most common
problems of adjustments under the Changes clause.
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M-7.306-1 Computation and Negotiation of Adjustments
(a) Most adjustments are based on costs, although they may be priced by
reference to catalogs or market value of supplies or services. If based on
costs, adjustments must consider the effects of the change on the entire
contract, not just the portion of the work affected by the change.
(b) Changes in costs may also require a change in profit or fee to reflect
the circumstances of the new situation. In some cases an adjustment may be
negotiated only with respect to the fee—for example, in the event of delivery
of nonconforming supplies in a cost-reimbursement contract.
(c) Computations and negotiation of adjustments is complicated when
the change both adds and deletes items of work. In effect, one change order
has made two changes. The net result of these additions and deletions may be
very small or exactly equal; however, the concept of equity requires that both
aspects of the change be properly considered.
(d) If the contractor's claim is for a few dollars, it is not safe to assume
that little examination is required. For example, the deleted work may be
labor intensive, with costs comprised primarily of direct labor and, therefore,
subject to overhead charges. The added work may be capital intensive, and
the costs not subject to the same extent of overhead. Unless care is taken,
the contractor could honestly compare only the direct costs of the deleted and
added work and end up collecting overhead expenses not incurred in work
performance.
M-7.306-2 Analysis of Cost of Changes
(a) Often, estimating the cost of a change is difficult and out of
necessity requires a particularly thorough and careful price analysis by the
Contracting Officer before a supplemental agreement can be negotiated.
(b) Difficulty may still be encountered even though cost data are
available. The estimates of costs of work deleted can be based on either
(1) the cost estimated at the time the contract was negotiated, or (2) the
costs at the time the change was made. If the original estimate is used and
costs have risen, then the contractor will suffer a smaller loss or more profit.
If the reverse is true, then the contractor will have a greater loss or less
profit. Contractor-suggested changes should be thoroughly reviewed to assure
that the contractor is not suggesting changes to enhance its profit position.
(c) Pricing adjustments after the work is done is much easier than
estimating costs in advance. The contractor's data may clearly show the
actual costs of the change to which a customary profit may be added. This is
an appealing rationale, but it has its dangers. If a change order has been
Issued and the work is completed prior to pricing the adjustment, the
contractor has had absolutely no incentive toward controlling costs. If a
customary profit is to be added, then the more that is spent on the added
work, the larger the contractor's profit will be. Even if the contractor can be
trusted to control costs in such a situation, the Government will not have had
an opportunity to review the contractor's proposed costs and possibly point out
more efficient production methods or management controls. Forward pricing,
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that is, issuance of a single supplemental agreement instead of a unilateral
order followed by an adjustment, allows for a complete negotiation on
technical as well as price aspects of a change. It may not be practical to do
this for all changes, especially if there are many small ones to be made. In
that case, a single negotiation session resulting in a single supplemental
agreement may be preferred.
M-7.307 Role of the Project Officer Regarding Modifications
(a) The Project Officer should avoid taking any action that results in
directing the contractor in such a way that it has the effect of changing the
contract's description of the tasks to be performed, the products provided, or
the time or place for performance or delivery. The Project Officer is
authorized only to direct the contractor to carry out the terms of the contract
as written. Changing the contract's provisions is outside the authority of the
Project Officer.
(b) At times a contractor may suggest modifications to the contract.
Often the change will technically improve the contract services or supplies
and the Project Officer should realize this. However, it should be kept in mind
that contractors, especially those who are experiencing a loss under a
contract, will suggest changes so as to provide a chance to better their profit
position. The Project Officer must beware of leading the contractor to
believe that the Project Officer's opinion authorizes the contractor to
proceed. Such improper authorization would be in effect a constructive
change. If the contractor makes the change and later claims extra costs, the
Government will find it very difficult to deny these claims for costs since they
were incurred in good faith (especially if the end result is a better product and
the agency benefits). The Project Officer's action would be improper and
unauthorized since only Government personnel designated as Contracting
Officers have the authority to obligate the Government.
(c) The Project Officer has considerable responsibility for change orders,
even though only the Contracting Officer has the power to issue such orders.
Since the Project Officer monitors the contract performance, he or she will
often be in an excellent position to know when a change will serve the best
interests of the Government and help to formulate that change. The Project
Officer can also be of significant assistance in determining both what a
reasonable price/cost of the change should be and the effects of the change on
the contract. It is important that all potential effects of a change are
examined, so if additional funding is required it can be obtained prior to
issuing the change order.
(d) After a change order has been issued, the Project Officer is
responsible for assuring that the contractor is implementing it.
(e) In the case of a revision to an approved Quality Assurance Project
Plan previously incorporated in the contract, the Project Officer and the
Quality Assurance Officer must approve the revision. Once approved, the
Contracting Officer will issue a change order to the contract to include any
revisions, assuming the revisions are within the scope of the contract.
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M-7.400
CONTRACT TERMINATION
M-7.401 Remedies for Deficient Performance Short of Termination
(a) There are a range of actions short of termination available to the
Government when performance is deficient. These actions may only be taken
by procurement personnel, and are listed below in order of priority:
(1) Verbally bringing the deficiency to the attention of the contractor
and asking for written notice of corrective action
(2) Initiating a letter (from the Contracting Officer) directing the
attention of the contractor to a deficiency and asking for a response
that includes plans for corrective action
(3) Requesting, orally or by letter from the Contracting Officer, a
meeting with the contractor's management to focus attention on the
problem and to obtain a commitment to corrective action
(4) Accepting deficient performance in exchange for a reduction in price
or other considerations.
(b) Before resorting to termination of the contract, the Contracting
Officer may take one or several of the actions listed above, or may resort to
payment stoppage, price reduction, or assessment of liquidated damages.
These options are discussed below.
M-7.401-1 Payment Stoppage
The Government may withhold authorized progress or partial payments
until satisfactory progress is shown. This is a powerful right. Payment should
not be authorized unless the Project Officer is satisfied with the contractor's
progress.
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M-7.401-2 Reductions in Price
The Government has the option, under a fixed-price contract, to reduce
the price in return for acceptance of less than contractually required goods or
services. Only the Contracting Officer has the authority to reduce the price.
The Project Officer, however, should not hesitate to suggest a price reduction
if he or she believes it is the proper course of action. It must be remembered
that any reduction in price should be based upon an actual loss to the
Government.
M-7.401-3 Liquidated Damages
(a) Liquidated damages are adjustments for deficiencies in contract
performance. The solicitation resulting in the contract provided that damages
would be assessed contingent upon late delivery or some other failure of the
contractor. Damages are usually a defined dollar amount. The FAR states
that liquidated damages should only be used in contracts for supplies and
services only if both of the following circumstances are present:
(1) Time of delivery or performance is such an important factor in award
that the Government may reasonably expect to suffer damage if
delivery or performance is late.
(2) The extent or amount of such damage would be difficult or impossible
to determine or prove.
(b) In deciding whether to include a liquidated damage clause in a
contract, consideration should be given to their impact on pricing, amount of
competition, and the costs and difficulties of contract administration.
M-7.401-3(a) Rate of Damages
The rate of liquidated damages must be reasonable and based on probable
actual costs. Unreasonable amounts are considered to be punitive and are
unenforceable. The minimum amount of liquidated damages should be based
upon the Government's inspection and administrative costs for each day of
delay. If the Government will suffer other specific losses due to the
contractor's failure to complete the work on time, these losses should also be
included.
M-7.401-3(b) Liquidated Damages Clause
(1) The Liquidated Damages clause—Supply, Service and R&D
contracts—covers three points: (i) If the contractor fails to deliver
the supplies or services within the time specified, the contractor will
pay the Government a fixed amount for each day of delay; (ii) if
delivery is so delayed, the Government may terminate the contract;
and (iiu the contractor will not be charged liquidated damages when
the delay is beyond the contractor's control.
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(2) When there are different items or stages of the work, with different
completion periods provided for in the contract, the liquidated
damages for each item or stage of work should be provided for in
separate clauses.
M-7.401-3(c) Administration of Liquidated Damages
Personnel involved in contract administration should know the following
points concerning liquidated damages:
(1) If the Government does not terminate the contractor's right to
proceed, liquidated damages will continue to be assessed until the
work is completed and accepted. The amount the Government
recovers will be limited to the amount of liquidated damages assessed.
(2) Liquidated damages provisions are strictly construed against the
Government. This means that the contractor will not be held liable
unless all formal procedures relating to damages are followed and
unless the Government is "obviously" in the right.
(3) Liquidated damages are disallowed unless the work is eventually
completed by someone, based on the theory that liquidated damages
are for delay in delivery or completion and thus cannot be assessed
when there is no delivery or completion.
(4) Liquidated damages are not assessed upon substantial
completion—i.e., completion with only minor deficiencies.
M-7.402 Termination for Convenience (T for C)
(a) Under the Termination for Convenience clause, the Government has a
right to cancel work under a contract whenever it determines that it is in its
best interest. Such a decision is a unilateral right of the Government. It is
not, however, a decision that can be made lightly. Cancellation of the work
under contract is an expensive and undesirable course of action. Generally,
such terminations occur because of changes in Government requirements or
because contract funding is not available.
(b) The Termination for Convenience clause outlines the actions of the
contracting parties taken in consumating the termination of work and
settlement. In terminating a contract, there may be extensive administrative
effort involved on the part of the Government with respect to the various
actions necessary to complete the settlement.
M-7.402-1 Steps Employed
(a) The first step in a termination for convenience is written notification
to the contractor by the Contracting Officer. The notice clearly indicates
that the contract is being terminated for the convenience of the Government.
It also gives: (1) an effective date for the termination (usually the date of the
notice); (2) the extent of the termination identifying what portion, if any,
should be continued; and (3) any special instructions.
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(b) Upon receipt of the notice, the contractor is obligated to comply
with the Termination clause and the terms of the notice, which generally
include:
(1) Stopping work on the terminated portion of the contract.
(2) Terminating related subcontracts.
(3) Continuing with the unterminated portion and promptly requesting
any equitable adjustment in price on the continued portion.
(4) Taking action to protect and preserve any Government property or to
return it as directed by the Contracting Officer.
(5) Settling claims and liabilities arising from terminated subcontracts.
(6) Promptly submitting its own claim for settlement.
M-7.402-2 Settlement
(a) The Contracting Officer directs the actions of the contractor,
reviews the settlement proposal, and promptly negotiates a settlement. A
number of people, including the Project Officer, may be involved in fulfilling
these multi-faceted duties. One of the duties of the Contracting Officer in
which the Project Officer participates is in the settlement conference. At the
conference, the Contracting Officer will:
(1) Explain the general principles governing settlements under the
relevant clause, including the contractor's obligations with respect to
subcontracts.
(2) Determine the status of the work, and, if necessary, clarify the
extent of the termination.
(3) Determine the subcontracts being terminated and who is handling
them for the contractor.
(4) Make all arrangements for proper handling and disposition of
Government property.
(5) Discuss the form of the settlement proposal and the accounting data
required.
(6) Establish a tentative schedule for negotiation of the settlement.
(b) Settlement proposals submitted by contractors are subject to the cost
principles of FAR Part 31 and will involve the Project Officer in evaluating
their merit.
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M-7.402-3 Involvement of the Project Officer
Aside from possibly making the recommendation to terminate for
convenience, the Project Officer will be involved in settlement conferences,
advising the Contracting Officer on the disposition of property and evaluating
the reasonableness (quantitatively and qualitatively) of the contractor's
settlement proposal.
M-7.403 Termination for Default
(a) Termination for default is based upon the contractual right of the
Government to terminate, in whole or in part, the contractor's right to
proceed with the work when the contractor has failed to perform its
contractual obligations.
(b) If, after termination for default, it is determined that the contractor
was not in default, or that the default was "excusable," the termination will be
considered to be for the convenience of the Government. The rights of the
parties are then to be governed by the Termination for Convenience clause.
(c) The contract may be reinstated by mutual agreement if it is
determined by the Contracting Officer to be in the best interests of the
Government.
M-7.403-1 Government's Right to Terminate for Default
This right is based on the contractor's failure to:
(a) Perform on time, as provided in the contract
(b) Perform any other provision of the contract
(c) Make progress, to the extent that the delay endangers contract
performance. Although not expressly provided for in the Default clause, the
Government may immediately terminate for default if the contractor
definitely exhibits an intention not to perform within the time fixed in the
contract. This manifest intention is termed as anticipatory breach or
repudiation.
M-7.403-2 Consequences of Termination for Default
Depending upon contract type, the following consequences result from a
termination for default.
(a) On fixed-price type contracts, the Government does not have to pay
the costs of uncompleted work, but only the costs of products delivered to and
accepted by the Government. In the case of a cost-reimbursement contract,
the Government is liable for costs incurred up to the date of termination, plus
a proportional part of any fee. The Government is not liable for settlement
expenses, nor for any profit on costs of preparation for work in progress.
(b) The contractor must return any progress or advance payments.
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(c) The Government has the right to take over the contractor's
inventory, subject to a negotiated compensation.
(d) The contractor is liable for any excess costs the Government may
have to pay in repurchasing the supplies or services. (However, a
cost-reimbursement contract does not contain any provision for recovery of
excess repurchase costs.)
(e) The contractor may also be liable for breach of contract damages.
M-7.403-3 Alternatives to Termination for Default
(a) Prior to taking any default action, the Contracting Officer will
normally take action on one of the following remedies short of termination.
At this time, the Contracting Officer should also determine:
(1) Whether it would be effective to withhold payment until satisfactory
performance is demonstrated;
(2) Whether, if default action is taken, there is an alternative source of
supply;
(3) Whether the contractor's financial condition is such that it would be
able to reimburse the Government for the excess costs of repurchase;
(4) What would be the impact of default upon the contractor's ability to
liquidate progress payments or continue to perform under other
Government contracts;
(5) Whether continued performance under a revised delivery schedule
would be more in the Government's interest;
(6) Whether the Government's interest would be better served by
offering advance payments or some other special financing
agreement;
(7) Whether, if the contractor cannot continue to perform, an
arrangement to have the contract performed by a capable
subcontractor might be an appropriate solution;
(8) Whether, where a capable organization declines to perform as a
subcontractor, a novation agreement can be arranged whereby the
desired performance can be obtained from that organization while
the original contractor still remains legally liable for the contract;
(9) Whether there is a surety or trustee in bankruptcy who would be
willing to take over the responsibility for performing the contract;
(10) Whether, where the requirement for the supplies or services no longer
exists and the contractor is not liable to the Government for
damages, a no-cost termination agreement should be executed.
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(b) The Contracting Officer, with the assistance of the Project Officer,
has a reasonable time to determine if it is in the Agency's best interest to
exercise its right to terminate a contract in default. The definition of a
reasonable period of time depends upon the facts of each case and varies from
case to case. The contract file is fully documented to explain the reason(s) for
default and the Agency's rationale for evoking the Default provision.
M-7.403-4 Procedures for Termination for Default
In order to effect a proper termination, the Government must follow the
procedural requirements of the Default clause.
M-7.403-4(a) Preliminary Notice
The Government is not required to either give notice of failure or notice
of the possibility of default prior to issuing a termination for default if the
basis for default is failure to deliver or to perform on time. If, however, the
Government fails to enforce the provisions related to timely delivery, or takes
any action that might be construed as a waiver of the delivery or performance
date, then the Contracting Officer must send a preliminary notice to the
contractor proposing or setting a new date. It is important that Project
Officers do not take actions that could possibly be construed as a waiver of
the Government's contractual rights.
M-7.403-4(b) Cure Notice
(1) In cases where the failure to perform involves provisions other than
those concerned with timely delivery, or failure to make such
progress as to endanger performance altogether, the Contracting
Officer must give the contractor notice of such failure and allow at
least ten (10) days for cure (remedy) of the failure before issuing a
termination notice.
(2) This "ten-day cure notice":
(i) States that a termination for default may arise unless the
failure to perform and make adequate progress is cured within
ten (10) days (or longer);
(ii) Calls the contractor's attention to its contractual liabilities in
the event of default;
(iii) Requests an explanation of the failure to perform and plan for
corrective action;
(iv) States that failure to present an explanation may be taken as
an admission that there is no valid explanation;
(v) Where appropriate, invites the contractor to discuss the
matter at a conference.
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M-7.403-4(c) Notice of Termination for Default
(1) Once the Contracting Officer determines that termination for
default is in order, then the Contracting Officer issues an official
written notice of termination that:
(i) Sets forth the contract number and date and describes the acts
or omissions that constitute the default;
(ii) States that the contractor's right to proceed with performance
of the contract (or a portion of the contract) is terminated;
(iii) States, if the Contracting Officer has not determined whether
the failure to perform is excusable, that it is possible that the
contractor will be held liable for any excess costs the
Government must pay in repurchasing terminated supplies or
services;
(iv) States, if the Contracting Officer has determined that the
failure to perform is inexcusable, that (1) the notice of
termination constitutes such a determination and is a final
decision under the Disputes clause, (2) the contractor will be
held liable for any excess costs of repurchase, and (3) the
contractor has the right to appeal under the Disputes clause;
(v) States that the Government reserves all rights and remedies
provided by law or under the contract;
(vi) States that the notice represents a decision that the
contractor is in default as specified and that the contractor
has the right to appeal under the Disputes clause.
M-7.403-4
-------
(ii) A contractor's default is inexcusable if caused by the
contractor's own fault or negligence, by that of something or
someone within its control, or by that of one of the
subcontractors.
(4) There are several excusable causes listed in the excusable delay
section of the Default clause, some of which are:
(i) Acts of God or the public enemy
(ii) Acts of the Government in either its sovereign or contractual
capacity
(iii) Fires, floods, epidemics, and quarantine restrictions
(iv) Strikes, freight embargoes, and unusually severe weather.
(5) In every such case, the failure to perform must be beyond the control
and without fault or negligence of the contractor. Also, the
excusable cause must be the direct cause of the failure to perform.
(6) If actions by both the Government and the contractor contribute to
the default, and the specific causes and effects of the responsibilities
of each are so intertwined as to defy disentanglement, then the
contractor's default will not be excused.
M-7.403-4(e) Termination Despite an Excusable Delay
(1) If, prior to issuance of a notice of termination, the Contracting
Officer determines that the contractor's failure is excusable but the
termination is in the best interests of the Government, the
Contracting Officer can take either of these actions:
(0 Terminate for convenience where the contract contains a
Termination for Convenience clause
(ii) Terminate at no cost to either party, where the contract does
not contain a Termination for Convenience clause.
(2) If the Contracting Officer was not able to determine whether the
contractor's failure is excusable prior to the issuance of the
termination, the Contracting Officer will make a written decision as
soon as possible. The written decision will be delivered to the
contractor promptly, with advice on the contractor's right to appeal
under the Disputes clause.
M-7.403-5 Waiver of Default
(a) After the contractor is found to be in default, the Government's
rights will be waived if (1) the Government acts or fails to act and thus
encourages the contractor to continue performance, and (2) the contractor,
relying on that encouragement, continues to work and incurs costs in
performance of the contract.
7-25
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(b) If, after default, a contractor continues to perform and incurs costs,
the Board of Contracts Appeals will carefully examine the contract
administration personnel to see if they said or did anything, or failed to say or
do anything, that may have encouraged the contractor to continue. If the
Board finds such evidence, it will hold that a waiver is the result.
(c) If, after default, the contractor does nothing to continue work or
incur costs, then there will normally be no waiver, in spite of anything the
contract administration personnel may have or have not said or done. The
Government's right to terminate for default will remain intact.
(d) The following kinds of acts on the part of Government personnel have
been held to waive a default:
(1) Accepting late delivery
(2) Ordering and accepting corrective action after default
(3) Encouraging continued performance
(4) Negotiating a revised delivery schedule
(5) Revising other contract terms
(e) The following kinds of acts on the part of Government personnel have
been held to not waive a default:
(1) Conducting negotiations concerning revisions of delivery times
(2) Attempting, unsuccessfully, to revise other contract terms.
(f) The best way to avoid waiver of default is to have good rapport and
communication between the Contracting Officer and the Program or Project
Officer so that all personnel who are involved with the contractor will know
the contract status, the Government's position, and what each party is
supposed to do and not do.
(g) When it is concluded that the Government's action or failure to act is
grounds for a waiver of the contractor's default, the Contracting Officer
should take immediate steps to establish a new delivery schedule. These steps
will revive the Government's right to terminate for default so that the right is
available in the event of a new default.
M-7.404 Closeout Procedures
A contract is complete when all deliverables have been delivered and
accepted or all required services have been performed and accepted or
formally waived. Contracts that are physically complete must be
administratively closed out. That means that all outstanding contractual
issues must be settled and the contract documented. The Contracting Officer
is responsible for closing out the contract with the assistance of the Project
Officer.
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M-7.404-1 Project Officer Responsibilities for Closeout
(a) At the completion of either a fixed-price or cost-reimbursement
contract, the Contracting Officer will request the Project Officer to certify
as to whether:
(1) all technical requirements have been satisfied;
(2) product(s)/service(s) set forth in the contract schedule have been
satisfactorily completed within contract price/cost; and
(3) the final report and/or other deliverable items have been received
and accepted (see Exhibit 7-1 at the end of this section for sample
Certification Form).
(b) It is the Project Officer's responsibility to review and determine to
the best of his or her ability the accuracy of the contractor's reporting of
inventions. Findings are sent to the Contracting Officer.
(c) The completion voucher of the contractor, accompanied with a memo
entitled Provisional Approval for Payment, will be sent to the Project Officer
on all cost-reimbursement type contracts. The Project Officer has the
responsibility of examining the voucher from the perspective of (1) was the
work performed, and (2) are the costs allowable and reasonable. The
determination is sent to the Contracting Officer.
(d) All contracts after completion are to be evaluated by the cognizant
Project Officer. A "Project Officer's Evaluation of Contractor Performance"
(Exhibit 7-2) is forwarded by the Contracting Officer. The Form 1900-27 is to
be completed and returned.
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Second Edition
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EXHIBIT 7-1
•A Til
Project Officer Certification, Contract Mo.
68-01- , vith __^_____ Contract Type
Title;"""""" ~~~"~""~~~~~~~~~~
ric
jccntract Asrinistrator, Contracts Administration Section (PK-21
Tfti
rroject Officer
Telephone No.
The end of the period of performance and/or final delirery
date of subject contract occurred on
This office is undertaking action to initiate rinai cloae-
out of the contract.
It is requested that you cake a physical review of the
contract and determine if: (1) all technical requireaents
have been satisfied; (2) services set forth in the contract
schedule have been satisfactorily cospleted; and/or (3) the
final report and/or other deliverable itera have been received
and accepted.
In the event that the Contractor has satisfied the perform-
ance and/or delivery requirements of the contract, please
check the appropriate space and cite the date of your acceptance
Should there be a need to withhold close-out of tne contract,
please advise belov and this office will take proper action.
Your reply vithin 15 days from the date of this seaorandua
will be appreciated. I say be reached at 202/^72-93^ if
you have any questions.
{ 3 Contract -requirements have been aet -and close-out-should
proceed.' Date of Acceptance: "
[ ] Delay close-out and final payment (please indicate reaaon
for delay under "Reaarks").
Reaarks:
Date Project Officer
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EXHIBIT 7-2
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Subject: Project Officer's Evaluation of Contractor Performance
Contract No. 68-01 with
From: Contract Administrator, Contracts Section (PM-214-M)
To:
Project Officer
You are requested to review the contractor's performance under the
subject contract and complete two copies of the attached EPA Form
1900-27. This form will serve as a record of contractor's
performance for use in the source selection process for future
contracts with this firm. Instructions for preparation are printed on
the reverse side of the form. One copy should be addressed to my
attention. The second copy may be kept for your records. Your
response is requested by .
Please assure that the narrative portion of the form is completed
for all of the evaluation factors. If you have any questions
concerning completion of the form, please call me
at
Title of Contract:
Enclosure
cc:
7-31
Second Edition
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EXHIBIT 7-2 (Continued)
PROJECT OFFICER'S EVALUATION OF CONTRACTOR PERFORMANCE
i Read inMlfueiioiiM nr. ret rnr bei;n ,-o-i; 'rung ft,**.,
1. FROM 2. TO.
1. FORtARO rOnflnaf enlxl TO: 4. CONTRAC
CONTRACTOR RtkATIOM* SECTION! '*M>ai«l »p n
R AIMING TO* o.c. *M*O 08 — U
•. CONTRACTOR'S NAME AND A O OR CSS '• PROJ. OF
t. BASIC COi
11. CONTRAC
12. PROJECT TITLE
11. EVALUATED CONTRACTOR'S TECHNICAL ADHERENCE TO SCOPE OP WORK
toltomut •** !!"• iMuraMv* a/ raOnf) E V6 A P U
T NO. S. ACTIVITY
1- Wash
NCER'S NAME •. TECHNICAL PROGRAM
4TRACT COST 10. FINAL CONTRACT COST "
TOR PROJECT OFFICER'S NAME
AND COMMITMENT OF PERSONNEL (Clrcl* on. af in*
u. EVALUATE CONTRACTOR'S TECHNICAL PERFORMANCE AND TECHNICAL APPROACH TO TMB PROJECT (Cirei* an* a/ at* toiio-int
mat gl*m n~£tK» * nrtnft • ~ VC A f U-
1S. EVALUATE CONTRACTOR'S SUBMISSION/DELIVERY OF PROGRESS REPORT.
fetid* an* af III* /afl*wa« and «'*• nmtlv* ol nttof) C VG A P
FINANCIAL REPORT. FINAL REPORT. EQUIPMENT
U
14. EVALUATE CONTRACTOR'S-O«LIVERED END PRODUCT W.ponvf au*paM«f..«fc..J fClrel* an* a/ Ih* fatlavaitf and «!*• narrative a<
rating I VC A f U
17. HAS CONTRACTOR Q OVERRUN. OR Q UNOERRUN THE CONTRACT (Emflm* r**»an lor alfn*4
IS. RECOMMENDATIONS AND ADVICE TO PERSONNEL CONSIDERING THIS CONTRACTOR FOR FUTURE SOLICITATIONS.
It. PROJECT OFFICER'S SIGNATURE 20. DATE
II. OVERALL RATING tCn*..* on«
t ve A P u
tPA 'atai 1*00-27 (9*.. 10.71)
KOITIOM i* o«*ohiTi Second Edition
- Aoril 1934
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APPENDIX
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APPENDICES
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
APPENDIX F
APPENDIX G
APPENDIX H
Page
Glossary of terms A-l
Acronyms B-l
Work Words C-l
Extramural Activity Report D-l
Front Page of Commerce Business Daily E-l
PEB Report Dated 12/14/83 F-l
Sample Award Fee Plan Dated 12/14/83 G-l
Contract Administration Case Study H-l
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APPENDIX A
GLOSSARY OF TERMS
A glossary does not define its terms, but rather explains or characterizes
them within the general context of their use. This glossary is a collection of
some of the terms used throughout this Handbook, as well as others commonly
associated with the EPA negotiated procurement process. While it always is
instructive (and sometimes necessary) to search the law or regulations for the
specific meaning and application of terms, there are times when it is helpful
to understand their fundamental sense and everyday usage. This is the
objective here.
There are dozens of terms that reflect the EPA procurement process
environment, but few of them are subject to precise, unerring definition.
Many are terms of art, colored by circumstance and application in different
situations. So, while the following explanations and characterizations are
sound, the reader is cautioned to remember that this is a glossary, not a
dictionary.
Allowance Holders
EPA managers who are responsible for implementing a part of the
Agency's Annual Operating Plan and for reporting on the progress of the
program and the budget. They manage allowances which are a portion of the
Agency's resources used to finance specific parts of the Annual Operating
Plan. Allowance Holders are responsible to their Responsible Planning and
Implementation Officer for program resources and the preparation,
implementation, and submission of the Annual Operating Plan. The Chief of
Staff, Regional Administrators, Associate Administrators, and Assistant
Administrators are both Allowance Holders and RPIOs. All other Allowance
Holders serve under a RPIO.
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Annual Operating Plan
Detailed quarterly distribution of the allocation of program resources to
achieve Agency goals. The Annual Operating Plan is prepared under the
direction of RPIOs by Allowance Holders and submitted to the Office of the
Comptroller annually and updated as needed. It provides the estimated
quarterly obligations for the fiscal year by Allowance Holder, program
element, section of law, and object class.
Appeal
When a contractor disputes an action taken by the Contracting Officer
during performance regarding matters such as an equitable adjustment for a
change order, and the two parties fail to agree on the adjustment, then the
contractor may receive from the Contracting Officer a "Contracting Officer's
Final Determination.11 An appeal is an appeal from the Contracting Officer's
determination and is filed with a designated Board of Contract Appeals
through the Contracting Officer.
Carryover Funds
Funds that are not obligated by the end of a fiscal year and which may be
obligated in the next fiscal year. They include unobligated balances in no-year
and two-year appropriations. Carryover funds may be used in the current
fiscal year on either contract actions brought forward from the previous year,
or on new procurement actions.
Change Order
A written order signed by the Contracting Officer, directing the
contractor to make changes that the Changes clause of the contract
authorizes the Contracting Officer to make without the consent of the
contractor. Most commonly applies to supply-type contracts and is limited in
its application. It provides for an equitable adjustment to be determined,
requires the contractor to proceed with its direction, and is formalized by a
Supplemental Agreement.
Commerce Business Daily (CBD)
A Government publication distributed to subscribers five times weekly,
which contains synopses of upcoming solicitations, subcontracting
opportunities, notices of award, foreign trade opportunities, and other
information useful to those seeking opportunities for contracting with the
Federal Government or subcontracting with its prime contractors.
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Commitments
The reservations of funds for specific projects or services to be procured.
The term refers to funds which have been submitted for obligation processing
and entered in the Financial Management System (FMS) prior to formal
obligation.
Common Cut-Off Date
In negotiated procurements, the closing date for the receipt of initial
proposals, or the closing date for receipt of revised proposals and Best and
Final Offers after written or oral discussions have been concluded.
Competitive Range
A range determined by the Contracting Officer after evaluation of
proposals that will include all offerers except those determined to have no
chance, through clarification and discussions, of improving their relative
positions to the point of being selected for the award of a contract.
Conflicts of Interest
Organizational conflict of interest exists when an offerer or contractor
for any of a number of reasons has interests relating to the work to be
performed under an EPA contract which (1) may diminish the impartiality,
objectivity and soundness of assistance and advice or otherwise bias work
product,'or (2) result in an unfair competitive advantage.
Personal conflict of interest exists when an EPA employee's judgment or
actions in procurement may be improperly influenced or biased in favor of a
particular contractor for reasons such as ownership of stock or relationship to
employees of the contractor.
Consulting Services
Those services of a purely advisory nature relating to the Governmental
functions of Agency administration and management and program management.
Contracting Officer (CO)
That individual who because of business, administrative, leadership, and
technical skills and capabilities is assigned by EPA as responsible for assuring
that contracting is done as authorized by law and regulation. The CO is
appointed by the use of a Contracting Officer's Warrant and is the only one
authorized to commit the U.S. Government through contracting.
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Contracts
Legal documents between two or more parties which are used to acquire
and/or deliver real property or services. In EPA, R&D contracts, program
contracts, ADP service contracts, and other contracts and contract
modifications processed and administered by the Procurement and Contracts
Management Division (PCMD) in Headquarters, and the Contracts Management
Divisions in Research Triangle Park (RTP) and Cincinnati are included under
this definition. Purchase orders, construction contracts under $2,000, delivery
orders under the Federal Supply Schedule and other agencies' contracts,
cooperative agreements, grants, interagency agreements, training and tuition
contracts, printing contracts, and other contracts not administered by the
three contracting offices are not covered in this Handbook.
Deficiencies/Questions
In evaluating proposals, deficiencies may be identified and certain
questions may indicate the need for clarification. The deficiencies/questions
identified form the basis of negotiation with offerers in the competitive range.
Determination and Findings (D&F)
A series of actions taken to document findings of fact supporting a
determination by a Contracting Officer or higher authority that, for example,
it is proper to use negotiation rather than formal advertising as a method of
procurement.
EPA Acquisition Regulation (EPAAR)
That portion of 48 CFR (Code of Federal Regulations) Chapter 15 that
identifies, by addition and exception, specific EPA implementation of the law
and the FAR.
Federal Acquisition Regulation (FAR)
The primary regulation for use by all Federal agencies in the acquisition
of supplies and services.
Fee Determination Official (FDO)
That individual assigned responsibility for arriving at determinations
regarding a contractor's entitlement to portions of the award fee pool under a
cost-plus-award-fee contract, such determinations being made at specified
times during the period of contract performance based on evaluation and
assessment findings of a performance evaluation team.
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Full and Open Competition
The standard for use in Government acquisition, full and open competi-
tion, means all responsible sources are permitted to compete.
FMS and RMIS Object Class Codes
Codes assigned to categories of goods or services for which the Agency
spends funds. Specific definitions for Resources Management Information
System (RMIS) and Financial Management System (FMS) Object Class Codes
are given in Appendix B.3 of the EPA Planning and Budgeting Manual. These
codes are used for tracking commitments, obligations, and disbursements on
these two information systems.
Invitation for Bids (IFB)
A form of solicitation to obtain bid prices in a formally advertised
procurement.
Justification for Other than Full and Open Competition (JOFOC)
The formal document prepared by the requiring activity substantiating
and justifying that a particular procurement should be conducted on a non-
competitive or a limited competitive basis for certain specified reasons.
Level of Effort (LOE)
An expression of the number and type of employee-months or hours that
the Government is purchasing under a contract. In a term type contract, the
level of effort will be based on the period of performance.
Negotiation Memorandum
That document prepared by the contract specialist covering the details of
the conduct of negotiations and the sequence of events leading to their
conclusion. Justifies any actions taken during the conduct of negotiations as
having been made within the authority delegated to the contract specialist,
especially as such actions may have departed in any way from the pre-
negotiation objectives approved prior to the start of negotiations.
Obligations
The result of executed contracts or other legal promises to lease,
purchase and/or deliver real property or services. Obligations occur when
contracts or other legal documents are signed by the parties involved, and
submitted to financial management for recording and official designation of
funds in accordance with the terms of the contract. A contract or other
document is referred to as an obligating document.
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Pricing Report
Information furnished to the Contracting Officer by those who have
conducted an analysis of contractor's pricing proposal that identifies the
findings of that analysis concerning all elements of estimated cost or price,
with special emphasis on any areas which are either questionable or
nonallowable. This report is advisory to the Contracting Officer.
Procurement and Contracts Management Division (PCMD)
The organization responsible for EPA contracting, which has operations
offices in Washington Headquarters, Research Triangle Park, and Cincinnati,
Ohio.
Procurement Request (PR)
The document prepared by a requiring activity containing the information
necessary to permit contracting. EPA Form 1900-8 (Procurement Request/
Order) with accompanying instructions.
Project Officer
That individual who because of superior technical, leadership, and
management skills and capabilities is assigned technical responsibility from
the inception of a requirement through its completion and closeout of the
contract under which the requirement was satisfied.
Protest
An action permitted by law and regulation by which an interested party,
usually an unsuccessful offerer, may challenge circumstances surrounding a
procurement. Protests are filed with the Contracting Officer and also may be
forwarded to the General Accounting Office (GAO) to obtain a decision, either
a denial or an acceptance, by the Comptroller General. Protests may be made
to the General Services Board of Contract Appeals (GSBCA) relative to the
acquisition of AOP equipment and services. Protest actions normally will hold
up a procurement for which a contract has not been awarded. Protests usually
encompass actions taken before and during the preaward phase of the
procurement process.
Request for Proposals (RFP)
A form of solicitation to obtain proposals in a negotiated procurement.
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Responsible Planning and Implementation Officers (RPIOs)
Agency top managers who are responsible for the review, control, and
management over programs and resources assigned to them and for compliance
with requirements related to the overall planning and budgeting process. They
develop, submit, and implement their own Annual Operating Plan. The Chief
of Staff, Associate Administrators, and Assistant Administrators serve as
RPIOs over the Allowance Holders within their respective offices. All of the
above are both RPIOs and Allowance Holders.
Revised Proposal
Once written or oral discussions have been concluded, the Contracting
Officer will issue a written notification to all offerers still in contention
calling for the submission of their revised proposals. This is the final
opportunity for an offerer to revise its proposal.
Small Purchases
Small purchases include the following: (1) purchases where the sum
involved in any one transaction does not exceed $25,000 or (2) imprest fund
transactions which may be used for procurements of $250 or less ($500 for
emergencies); unless a lower limit is established by local procedures. The
funds for these procurements will be planned against the appropriate RMIS
object class codes and committed and obligated against the appropriate FMS
object class codes. Small purchases and contract procurements may be
charged to the same RMIS and/or FMS code.
Source Evaluation Board (SEB)
That body of individuals of varying technical, legal, contractual, and other
expertise that is assigned responsibility for evaluating offers and reporting its
findings to the Source Selection Official.
Source Selection Official (SSO)
That individual with the authority to make the final determination as to
which source offers the arrangement most advantageous to the Government,
all factors considered, and to authorize the award of a contract.
Supplemental Agreement
A written agreement executed by both contracting parties for an
agreed-to modification of a contract. Considers the impact of specifications
for performance, delivery, price, alteration of terms and conditions, and any
other matter appropriate to the modification.
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Technical Direction
The exercise of authority by an individual named and specifically
authorized by the contract to direct the performance of the contractor within
the expressed scope of work found in the contract, so long as such direction
does not assign additional work, constitute changes to the contract, increase
or decrease agreed-to estimated cost or price, or alter the agreed-to delivery
schedule or any other terms and conditions of the contract.
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APPENDIX B
ACRONYMS
The following is an alphabetical list of all acronyms used throughout this
Handbook. Its purpose is to serve as a quick reference for those who may be
unfamiliar with the lettered shortcuts that are used commonly to signify terms
and phrases associated with the EPA acquisition/procurement process.
ADP Automatic Data Processing
ADPE Automatic Data Processing Equipment
A-E Architect-Engineer
BEP Business Evaluation Panel
CBD Commerce Business Daily
CFR Code of Federal Regulations
CO Contracting Officer
COI Conflict of Interest
CPAF Cost-Plus-Award-Fee
CPFF Cost-Plus-Fixed-Fee
D&F Determination and Findings
EPA Environmental Protection Agency
EPAAR Environmental Protection Agency Acquisition Regulation
FAR Federal Acquisition Regulation
FDO Fee Determination Official
FFP Firm Fixed-Price
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FSS Federal Supply Schedule
GAO General Accounting Office
GPO Government Printing Office
GSA General Services Administration
IFB Invitation for Bids
JOFOC Justification for Other Than Full and Open Competition
LOE Level of Effort
MBEO Minority Business Enterprise Office
OFPP Office of Federal Procurement Policy
OMB Office of Management and Budget
PCMD Procurement and Contracts Management Division
PEB Performance Evaluation Board
P.L. Public Law
PO Project Officer
PR Procurement Request/Order
RFP Request for Proposals
SBA Small Business Administration
SEB Source Evaluation Board
SIC Standard Industrial Classification (Code)
SOW Statement of Work
SSO Source Selection Official
TEP Technical Evaluation Panel
TSP Teleprocessing Services Program
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APPENDIX C
WORK WORDS
The following is an alphabetical list of work words that may be utilized to
shape and support declarative identifications of need in preparing Statements
of Work. They are reminders of the various shades of meaning that are
conveyed through their use.
analyze
annotate
ascertain
attend
audit
build
calculate
compare
consider
construct
contribute
control
create
define
design
determine
develop
solve by analysis
provide with comments
find out with certainty
be present at
officially examine
make by putting together
find out by computation
examine to determine likenesses or differences
think about; decide
put together; build
give along with others
direct; regulate
cause to be; make
make clear; settle the limits
perform an original act
resolve; settle; decide
bring into being or activity
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differentiate
erect
establish
estimate
evaluate
evolve
examine
explore
extract
fabricate
form
formulate
generate
inquire
inspect
install
institute
integrate
interpret
investigate
judge
make
manufacture
notice
observe
organize
originate
make a distinction between
put together; set upright
set up; settle; prove beyond dispute
approximate an opinion of
find or fix the value of
develop gradually; work out
look at closely; test quality of
examine for discovery
take out; deduce; select
build; manufacture; invent
give shape to; establish
to put together and express
produce; cause to be
ask; made a search of
examine carefully or officially
place; put into position
set up; establish; begin
add parts to make whole
explain the meaning of
search into; examine closely
decide; form an estimate of
cause to come into being
fabricate from raw materials
comment upon; review
inspect; watch
integrate; arrange in a coherent way
initiate; give rise to
C-2
Second Edition
April 1984
-------
perform do; carry out; accomplish
probe investigate throughly
produce give birth or rise to
pursue seek; obtain or accomplish
reason think; influence another's actions
recommend advise; attract favor of
record set down in writing; act of reproducing forms of
communications
resolve reduce by analysis; clear up
review inspection; examination or evaluation
scan look through hastily
search examine to find something
seek try to discover; make an attempt
shall required
should preferred but not required
solve find an answer
study careful examination or analysis
trace to copy or find by searching
track observe or plot the path of
C-3
Second Edition
April 1984
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Appendix D
i UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
'/ WASHINGTON. D.C. 20460
AUG 20 682
OFFICE Of
PESTICIDES AND TOXIC SUBSTANCE
MEMORANDUM
TO: Office Directors
Division Directors
AA Budget Officers
Regional Administrators
SUBJECT: Agency Extramural Activity Report (EAR) for
Toxics-Related Projects Volume I, Issue 2
The second issue of the Extramural Activity Report
(EAR), prepared by the Office of Toxics Integration (OTI),
is attached for your use in developing future contract
packages. This issue supplements Volume I. Issue 1 (April 1962)
by providing 7Y82 plans for toxics-related projects/contract
descriptions that have been developed since J'arch 1982 and
the projects of several ORD offices that were not included
in Issue 1. In addition, Volume I, Issue 2 contains descriptions
of toxics-related grants, cooperative agreements and Interagency
Agreements awarded to date in FY82. Also, for FYS1 research
grants, the Office of Research Grants and Centers has prepared
a description of each FY81 research grant. For further
information on these as well as FY82 research grants,
contact Bob Woodside in ORD (426-2355).
OTI developed the EAR with program office input to
provide information across programs to help coordinate the
planning and issuance of work assignments for level-of-
effort (term) type contracts, as well as the issuance of new
procurements. While the sponsoring office is indicated, CTI
maintains a log of the project officer's name and phone
number to assure that only legitimate EPA users are put in
touch with project officers. This information can be obtained
by contacting the OTI staff indicated below.
As in the past, we strongly urge you to use this new
tool in the procurement planning process and in your contract
review and certification procedure.
D-l
-------
This fall, OTI will prepare another edition of the EAR
covering headquarters FY83 procurement plans as well as the
toxicsrrelated activities of selected EPA regional offices.
By working more closely with you as you generate FY83
contract plans, we plan to issue the next edition prior to
the end of the first quarter.
In keeping with printing limitations, the EAR cannot be
furnished to every EPA project officer; therefore, ensuring
the availability of this document to appropriate personnel
within your office is critical to its successful utilization.
If you have any questions, suggestions, or want to
contact the project officer for any of the projects listed,
please call Arnie Edelman or Joanne LaBaw of OTI at
382-2249.
n,
Assistant Administrator
for Administration
John A. Todhunter, Ph.D.
Assistant Administrator
for Pesticides
and Toxic Substances
Attachment
D-2
-------
TABLE OF CONTENTS
Page
Literature Survey 1
Pate and Transport/Materials Balances 2
Health/Environmental Effects 1O
Health Effects 13
Environmental Effects 25
Exposure 32
Risk 38
Industrial Studies 42
a
u> Economic Studies 48
Treatment/Technology Development/Evaluation. 55
Haste Management/Resource Recovery 61
Emergency Response 73
Policy Studies/Regulatory and Control Options... 77
Methodology Development/Validation
• Treatment Proceaaes and Monitoring.. 83
• Chemical Analyses H4
« Health and EvnironmeriLal Studies 08
-------
Page
V
*>
Mode Ling 93
Data Base Development[[[ 100
Sampling Analysis and Monitoring
• General.... ». ••• 102
• Monitoring, Human 107
-------
Extramural Activity Report (EAR)
The Extramural Activity Report was developed by the Office of
Toxics Integration (OTI) to provide information to Agency staff on
upcoming extramural (i.e. contract and grant) efforts regarding
toxics-related topics. Prior to the development of the EAR, program
offices had no mechanism to assure that their information gathering
efforts on chemicals and industries were coordinated and did not
overlap those planned by other program offices. To avoid such
duplication, the offices could only rely upon such limited sources
of information as the library (partial listings of completed contracts)
and automated systems such as the now-discontinued Smithsonian Science
Information Exchange (SSIE). These systems provided some information,
but did net provide information concerning planned efforts, or task
orders to be written under level of effort contracts. In order to
better integrate efforts, as well as pool joint office resources, a
mechanism was needed to provide information on emerging extramural
needs that are in the early planning stages as well as projects just
underway.
The EAR was developed for the purpose of fostering intra-Agency
contract and grant integration. This report provides information on
those upcoming extramural projects of cross-Agency interest concerning
toxic chemicals and industries. The first EAR, issued in April,
described about 150 contracts from the following EPA program offices:
Office of the Solid Waste, Office of Emergency and Remedial Response,
Office of Air Quality Planning and Standards, Office of Water, Office
of Pesticide Programs, Office of Toxic Substances, Office of Toxics
Integration and approximately half of the offices in the Office of
Research and Development. The second issue includes new or additio-
nal contracts not included in the April issue as well as ORD con-
tracts that were not previously covered. In addition, interagency
agreements and research grants are included. OTI plans on issuing
the EAR quarterly with the next issues planned for January, May and
August.
To obtain copies of the EAR, contact Arnie Edelman in the
Office of Toxics Integration (TS-777), telephone 382-2249.
D-5
-------
Appendix E
WEDNESOAT. SEPTEMBER 8. 1382
lnua Ho. PSA-S1S3
A daily list of U.S. Government
procurement invitations, contract
awards, subcontracting leads,
sales of surplus property and
foreign business opportunities
U.S. GOVERNMENT
PROCUREMENTS
Services
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tat
-------
APPENDIX F
SAMPLE PEB REPORT
Performance Evaluation Board's Performance Evaluation Report
Contract No. 68-XX-XXXX
Company Name
Report No. (insert number)
Evaluation Period: From - To
Attendees: Performance Evaluation Board (PEB)
NAME TITLE (If applicable)
Other Attendees:
NAME TITLE (If applicable)
Summary; Quality of Contractor performance with respect to each of the
~ performance categories defined in the Performance Evaluation Plan
for the (insert number) evaluation period was evaluated based upon
the performance event reports submitted to the Evaluation
Coordinator.
The attached Table 1 provides a summary of the Award Fee awarded for the
(insert number) evaluation period.
Table 1-a provides a summary of Award Fee determination from the inception of
the contract to the (insert number) Performance Evaluation period.
F-l
Second Edition
April 1984
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SAMPLE PEB REPORT
Table 1
Period 6
Award Fee Determination for Contract No. 68-XX-XXX
(Company Name)
Performance
Categories
- Program Management
- Emergency Response
- Technical Support
TOTALS
Available Award Fee Awarded Fee
% of Available $ % of Available
Fee for Period Available Fee $ Awarded Awarded
30%
40%
30%
100%
23,113
30,817
23,112
77,042
85%
90%
80%
85.5%
19,646
27,735
18,490
65,871
F-2
Second Edition
April 1984
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SAMPLE PEB REPORT
Table 1-a
AWARD FEE DETERMINATION FOR CONTRACT OVER PERIOD OF PERFORMANCE
Performance
Categories
AVAILABLE/AWARDED FEE PER CONTRACT PERIOD
Project Management
Available
Awarded
Emergency Response
Available
Awarded
Technical Support
Available
Awarded
Project Organizatior
Available
Awarded
Spill Prevention
Available
Awarded
Total
Available
Award
End of
Eval. Per
(Date)
1
5,257
100%
5,257
50%
5,257
65%
31,545
85%
5,257
100%
52,573/
100%
42,322/
80.5%
2
9,858
95%
9,857
95%
9,857
75%
NA
NA
9,857
90%
39,429/
100%
34,993/
88.7%
3
9,857
90%
11,829
100%
9,857
90%
NA
NA
7,886
90%
39,429/
100%
36,668/
92.5%
4
9,857
100%
15,772
100%
13,800
80%
NA
NA
NA
NA
39,429/
100%
36,669/
93.3%
5
9,857
70%
15,772
85%
13,800
85%
NA
NA
NA
NA
39,429/
100%
32,036/
80.45%
6
23,113
85%
30,817
90%
23,112
80%
NA
NA
NA
NA
77,042/
100%
65,871/
88.5%
F-3
Second Edition
April 1984
-------
SAMPLE PEB REPORT
PEB EVALUATION
Category I - Program Management
Available Awarded
$23,113 - 30% $19,646 - 85%
(NARRATIVE EVALUATION)
Category II - Emergency Response
Available Awarded
$30,817 - 40% $27,735 - 90%
(NARRATIVE EVALUATION)
Category III - Technical Support
Available Awarded
$23,112 - 30% $18,490 - 80%
(NARRATIVE EVALUATION)
General
To better reflect programmatic emphasis, the PEB has made changes in the
percentage of fee allocation. The Performance Evaluation Categories along
with the appropriate percentage of fee allocation for period ,
through is set forth in the attached Table No. 2.
Date Name
Chairman, Performance Evaluation Board
Contract No. 68-XX-XXX
F-4
Second Edition
April 1984
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SAMPLE PEB REPORT
Table 2
Evaluation Period No. 7
From - To
Award Fee Allocation Matrix
for
Contract No. 68-XX-XXX
Company Name
Performance Evaluation
Categories
I Project Management
II Emergency Response
III Technical Support
% of Award
Fee for Period
35%
40%
25%
100%
$
Available
26,965
30,817
19,260
77,042
F-5
Second Edition
April 1984
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Contract No:
APPENDIX G
SAMPLE FEE ALLOCATION MATRIX
FEE ALLOCATION MATRIX
Contractor:
EVALUATION CATEGORY
I
II
III
IV
V
VI
Total
Available Dollars
PERFORMANCE EVALUATION PERIODS
1/01/84
to
4/30/84
20%
20%
20%
20%
20%
0%
100,000
5/01/84
to
8/31/84
20%
15%
20%
15%
20%
10%
120,000
9/01/84
to
12/31/84
20%
10%
20%
10%
20%
20%
120,000
I/ 01/85
to
4/30/85
20%
5%
20%
5%
20%
30%
120,000
5/01/85
to
8/31/85
20%
0%
20%
0%
20%
40%
120,000
9/01/85
to
12/31/85
20%
0%
20%
0%
20%
40%
100,00o|
Approved:
Chairman, Performance Evaluation Board
Date:
G-l
Second Edition
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Contract No: 68-01-6388
Contractor: JRB Associates, Inc.
EVALUATION CATEGORY
1. Data Generation
Field Validation
2. of Criteria
3. Economic Analysis
Preparation of Cost/
4. Benefit Analysis
5. Program Management
Dollars Available
End of Performance Evaluation Period
9/11/81
20%
40%
10%
10%
20%
*!/
12/4/81
20%
40%
10%
10%
20%
$!/
3/26/82
25%
30%
15%
10%
20%
$!/
6/18/82
30%
20%
20%
10%
20%
*!/
9/10/82
20%
15%
25%
20%
20%
$!/
12/31/82
10%
10%
30%
30%
20%
$/
I/The fee pool is allocated among evaluation periods in direct proportion to
the level of effort expended during the period.
Approved:
Effective Date:
Chairman, Performance Evaluation Board
G-2
Second Edition
April 1984
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Contract No. 68-01-6388 Award Fee Plan
II. Performance Evaluation Categories
Five performance categories have been selected for evaluating
performance under this contract. The available fee is
distributed among these categories as indicated in the fee
allocation matrix which is also part of this plan. The
Contractor's performance will be assessed in the following
categories:
1. Data Generation
This category includes the generation of all toxicity,
ecological effects and chemical data needed for ambient water
criteria development and preparation of hazard assessment
profiles. Toxicity data will be generated for acquatic
organisms and non-human mammals and will be obtained from
standard acute, chronic and bioconcentration/biomagnification
tests on a variety of animal and plant species. Ecological
data will include bioconcentration and biodegradation
measurements. Chemical data will include pH, dissolved
oxygen, total suspended solids, hardness and specific
chemical constituent analyses. Quality assurance, control
activities and quality of reporting format are also included
in this evaluation category.
2. Field Validation of Criteria
This category includes the refining and implementation of the
organism testing protocol for criteria modification. A major
task in this area is coordination of protocol implementation
between the States and EPA. This category also includes
supporting the development of the chemical model protocol by
generating data specified in the first evaluation category
and assisting in the validation of this protocol in the field.
3. Economic Analysis
This category includes the preparation of economic analyses
and economic impact statements on the implementation of
criteria into a water quality based control on point source
dischargers throughout the NPDES permitting system. It is
anticipated that the Contractor will be required to cost-out
various treatment technologies and strategies during the
course of the work.
4. Preparation of Cost/Benefit Analyses
This category includes assessing treatment costs for
dischargers to attain water quality based standards and
analyzing corresponding benefits achieved. Included in the
analysis of benefits will be an enumeration of hierarchy of
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Second Edition
April 1984
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Contract No. 68-01-6388 Award Fee Plan
beneficial uses for the water bodies with statements of
expected impacts on human activities and on the ecosystem for
each beneficial use.
5. Program Management
This category includes all those generalized activities most
closely associated with managing and administering the work
being done and the resources being expended under the
contract. The Board will evaluate, for instance, the
Contractor's performance in maintaining effective staffing,
in controlling cost growth, in submitting work plans, in the
timely submission of required reports which must reflect the
highest degree of quality attainable, in administering its
subcontracting program, and in taking appropriate management
action when necessary.
This is a very broad category, and will include other
management related activities not specifically mentioned in
this plan.
Every effort has been made to describe the categories as clearly
and concisely as possible. The Contractor will be cautioned,
however, that as a result, the definitions given above may not
be complete. If a reported performance event does not exactly
fit one of the above defined categories, it will be evaluated
under the most appropriate category by the Board.
G-4
Second Edition
April 1984
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Contract No. 68-01-6388 Award Fee Plan
III. Performance Evaluation Criteria
In evaluating the performance of the Contractor, the
Performance Evaluation Board will apply criteria that have
traditionally been used by managers to evaluate performance in
almost any context.
Performance criteria of special importance to the Board are as
follows:
1. Timeliness
This criterion includes the ability of the Contractor to
follow an established period of performance for work
assigned, and for delivering required reports.
2. Responsiveness to Technical Direction
This criterion includes the Contractor's demonstrated
response to the Project Officer's guidance of the technical
aspects of the work.
3. Initiative and Assumption of Responsibility
This criterion includes the ability to anticipate and
respond to problems or issues identified by the Project
Officer. It also measures the Contractor's ability to apply
necessary resources.
4. Ingenuity and Resourcefulness
This criterion includes the ability to provide new and
innovative approaches or solutions to problems or issues
which in the past have been addressed in a more traditional
fashion.
Other recognized performance criteria that will be applied when
appropriate are report quality, including accuracy, and
timeliness of communications.
The Contractor should recognize that Government will apply
other generally accepted performance related criteria not
specifically mentioned when they are found to be appropriate.
G-5
Second Edition
April 1984
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SAMPLE PERFORMANCE EVALUATION AND FEE DETERMINATION SCHEDULE
1 End of Evaluation Period
2 PEB Evaluation
3 FDO Determination
4 Funding Modification
1 End of Evaluation Period
2 PEB Evaluation
3 FDO Determination
4 Funding Modification
1 End of Evaluation Period
2 PEB Evaluation
3 FDO Determination
4 Funding Modification
1 End of Evaluation Period
2 PEB Evaluation
3 FDO Determination
4 Funding Modification
Optimum #
of Days
0
15
15
0
0
15
15
0
0
15
15
0
0
15
15
0
Forecast
Date
4/30/84
5/15/84
5/30/84
5/30/84
8/31/84
9/15/84
9/30/84
9/30/84
12/31/84
1/15/85
1/30/85
1/30/85
4/30/85
5/15/85
5/30/85
5/30/85
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
a
H-
-------
APPENDIX H
CONTRACT ADMINISTRATION CASE STUDY
BACKGROUND
This case study involves situations which occurred with respect to an EPA
cost-reimbursement level-of-effort contract with the Franklin Foundation.
SITUATION
On May 30, 198X, the Franklin Foundation received Task Assignment #5 under
its cost-reimbursement level-of-effort contract. It required the Foundation to
collect and analyze data on the electric utility industry. The estimated cost
of the effort under this task was $420,000 for 8400 hours.
Data collection would be effected utilizing forms developed by a previous
contractor and cleared by OMB prior to issuance of the task.
The following were specified to be delivered under this task:
1. Monthly periodic progress reports.
2. Site visit reports pursuant to the Foundation's technical assistance to
organizations concerning proper compliance with the data collection
forms.
3. A final report analyzing data collected.
The final report represented the end product of the data collection effort and
would be utilized by EPA in preparation of a Court-ordered report.
On July 25, 198X, the Chairman of the Franklin Foundation contacted Dr.
Tobin, the EPA Project Officer, and informed him that a serious problem had
developed in completion of the effort. It appeared that although the data
entry forms contained over 24 pages, no instruction or glossary of terms was
included with the package. Several technical assistance visits had uncovered
the fact that many firms were experiencing total confusion in attempting to
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Second Edition
April 1984
-------
complete the forms as required. The Foundation concluded that if the
collection and analysis were to be completed in time for publication in the
upcoming report, it was essential that an instruction manual and glossary be
developed by the Foundation immediately.
Through his own contacts within industry, Dr. Tobin was able to verify the
Foundation's assessment of the problem. The previous contractor had in truth
not delivered the required manual and glossary and it appeared that the
Foundation's solution was the most effective and least costly cure for the
problem. The Chairman of the Foundation had estimated that development of
the required manual and glossary, along with its circulation within industry,
would increase the estimated cost of the task from $420,000 to $455,000.
Upon review of the status of hours available under the basic contract, Dr.
Tobin found that the 30,000 hours originally available had been consumed with
the placement of Task Assignment #5. However, Dr. Tobin reasoned that the
additional 700 hours needed to complete the glossary and instructions
represented a relatively minor increase, and that, coupled with the importance
of the data collection effort to EPA's success in court, prompted him to
submit a request for task modification to the Contracting Officer along with
the required $35,000.
Shortly thereafter, Dr. Tobin was surprised to learn from the Contracting
Officer that the request could not be processed for the following reasons:
1. The increased number of hours and the establishment of an additional
deliverable constituted a new procurement since the proposal
modification was considered to be outside the scope of the basic contract.
2. All new procurement contracts had to be competitively procured in
accordance with the FAR and EPAAR or exempted from the competitive
process by an approved Justification for Other Than Full and Open
Competition.
QUESTIONS
1. Do you concur with the Contracting Officer? Why or why not?
2. Identify at least five possible solutions to the problem. Which situation is
the best both contractually and technically? Why?
3. Would the situation have been any different had there been sufficient
hours, but insufficient funds, available in the basic contract? Why? How
does this affect your selection of possible solutions?
4. Would the situation have been any different had both hours and funds been
available on another Task Assignment? Why? How does this affect your
selection of possible solutions?
H-2
Second Edition-4/84
Rev. No. 2-9/30/85
-------
5. Would the situation have been any different if this had been a
completion-type, cost-reimbursement contract? Why? How would this
affect your selection of possible solutions?
6. What could the Project Officer have done to facilitate the
accomplishment of this task modification?
7. How would an indefinite quantity type contract have helped in this
situation if the IQ contract contained fixed loaded labor rates (labor hour)
for category of skill that may be required?
SITUATION
When Dr. Tobin learned that the Contracting Officer would not process the
purchase, he called the Chairman of Franklin Foundation and told him to
proceed with the work pending receipt of an order. The Chairman agreed.
QUESTIONS
1. Does Dr. Tobin have the authority to direct the contractor to perform
work?
2. Should the Chairman of Franklin Foundation have agreed to start
performance or should he have asked Dr. Tobin to consult with the
Contracting Officer?
3. What kind of action is required to solve this problem?
4. Can the action be ratified?
SITUATION
On the last day of the fiscal year, Dr. Tobin contacted the Contracting Officer
and told him he wanted to get an order placed on the contract that day. He
further explained that the particular requirement was budgeted for in the
subsequent year program and he had planned to get it on contract by February
of the next fiscal year; however, he had some current year funds that were
going to expire that day and he wanted to use the funds for this project. He
explained that he had discussed the technical effort with contractor personnel
and they understood what was desired.
QUESTIONS
1. Would purchase of the requirement with current year funds be legal?
2. What "need" principle is involved?
3. Explain the oona fide need principle.
H-3
Second Edition
April 1984
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CASE
STUDIES
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Writing A Statement Of Work
PRACTICAL EXERCISE
"COURSES TO GO"
You have been assigned the responsibility to prepare a statement of work
for the development and presentation of 25 courses to technical personnel
entitled "Project Officer Course."
Management has decided that they wish to have a firm-fixed price
contract awarded for both the development and instruction of the courses.
The contractor will provide the developed text, all classroom materials, and
instructors) for the course. All courses will be five days in length, be
presented to 30 students per course, and be taught at Government facilities
located in Washington D.C., New York, Boston, Cincinnati, San Francisco and
Research Triangle Park.
The approximate number of classes per location follows:
Washington 8
New York 4
Boston 4
Cincinnati 3
San Francisco 3
Research Triangle Park 3
The course materials should be developed in structure and in substance to
be most beneficial to those technical people involved in SOW and Specification
preparation, evaluation of proposals and contract monitoring. In addition,
examples should be used throughout the text which are agency specific.
1. Establish a writing outline.
2. Identify known and unknown risks to performance.
3. Determine the type of SOW to be used—i.e., performance, design,
etc.—and method of expression—i.e., job or level-of-effort.
4. Legibly write a Statement of Work suitable for photocopying.
5. Prepare the Government cost estimate.
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THE LEAK
A Request for Proposals (RFP), DU-82-AO13, for the Evaluation of
Time/Temperature History of Gases and Particles in the Radiant Furnace Zone
of Pulverized Coal-Fired Generators was issued July 1, 198X. Offerers'
proposals were to be submitted on a cost-plus-a-fixed-fee basis by
July 31, 198X. Dr. Burton was the Project Officer for this particular contract.
On July 20, a meeting was held in Dr. Burton's office to discuss a subject
of possibly grave concern to those involved in this procurement. Ms. Traivers,
in her capacity as Contracting Officer, was asked to attend.
An unnamed member of Research International, Inc. (RID had been
anonymously contacted by a disgruntled employee of EPA. The employee had
informed the RII's employee of the proposed budget for this procurement, as
well as the names of the selected technical evaluation committee members.
In an unconnected circumstance, a former EPA employee had contacted RII
offering his services help in preparing their proposal and in negotiating and
working on the resultant contract. The president of RII had contacted Dr.
Burton to express indignation over the first contact and to request
clarification of applicable regulations concerning the hiring of the former
employee.
Dr. Burton expressed not only embarrassment over this unfortunate event,
but also concern that: (i) the former employee possessed sufficient knowledge
in the field to be a considerable asset in this undertaking; (ii) the
Government's estimate might have to be disclosed to all potential offerers,
thus negating possible cost competition; (iii) the firm may have to be
eliminated from the competition; and (iv) the breach of confidentiality might
seriously disrupt the procurement process, even precipitate cancellation of the
solicitation. Dr. Burton also requested a reading by the Contracting Officer
on the situation concerning the former employee.
QUESTIONS
1. Consider how the disclosure of the estimate to one offerer might affect
that offerer's relative standing in the selection process. Should this data
be fully disclosed to all potential offerers? What action do you
recommend?
2. If Research International, Inc. pursued the hiring of the former EPA
employee for proposal preparation or contract performance, what legal
implications might arise for either Rn or the former employee?
3. What are the implications regarding the conduct of the anonymous
employee?
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"WHAT TYPE OF CONTRACT"
Review the attached "Remedial Investigation Model Statement of Work"
and make the following determinations:
1. List all known economic risks that you can identify in performing the
statement of work. Support your statement of work. Support your
statements.
2. Identify any unknown risks that you feel may impact the cost of
performance.
3. What contract type should this statement of work be written for
fixed-price or cost-reimbursement? Be prepared to express your
rationale.
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REMEDIAL INVESTIGATION MODEL STATEMENT OF WORK
PURPOSE
The purpose of this remedial investigation is to
determine the nature and extent of the problem at the site
and to gather all necessary data to support the
feasibility study. The Engineer will furnish all
personnel, materials, and services necessary for, or
incidental to, performing the remedial investigation at
[specific site], an uncontrolled hazardous waste site.
SCOPE
The remedial investigation consists of seven
Task 1 - Description of Current Situation
Task 2 - Plans and Management
Task 3 - Site Investigation
Task 4 - Site Investigation Analysis
Task 5 - Laboratory and Bench-Scale Studies
Task 6 - Reports
Task 7 - Community Relations Support
TASK 1 - DESCRIPTION OF CURRENT SITUATION
Describe the background information pertinent to the
site and its problems and outline the purpose for remedial
investigation at the site. The data gathered during any
previous investigations or inspections and other relevant
data should be used.
This task may be conducted concurrently with Task 2,
development of the work plan.
a. Site Background
Prepare a summary of the Regional location,
pertinent area boundary features, and general
site physiography, hydrology, and geology.
The Remedial Investigation guidance should be
consulted for additional information on the tasks
listed below.
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12/10/84
Replacement Page E-4
Define the total area of the site and the general
nature of the problem, including pertinent
history relative to the use of the site for
hazardous waste disposal.
b. Nature and Extent of Problem
Prepare a summary of the actual and potential
on-site and off-site health and environmental
effects. This may include, but is not limited
to, the types, physical states, and amounts of
the hazardous substances; the existence and
conditions of drums, landfills, and lagoons
[substitute site-specific features if different];
affected media and pathways of exposure;
contaminated releases such as leachate or runoff;
and any human exposure. Emphasis should be
placed on describing the threat or potential
threat to public health and the environment.
c. History of Response Actions
Prepare a summary of any previous response
actions conducted by either local, State,
Federal, or private parties, including the site
inspection and other technical reports, and their
results. This summary should address any
enforcement activities undertaken to identify
responsible parties, compel private cleanup, and
recover costs. A list of reference documents and
their location shall be included. The scope of
the remedial investigation should be developed to
address the problems and questions that have
resulted from previous work at the site.
d. Site Visit
Conduct an initial site visit to become familiar
with site topography, access routes, and
proximity of receptors to possible contamination
and collect data for preparation of the site
safety plan. The visit should be used to verify
the site information developed in this Task.
e. Define Boundary Conditions
Establish site boundary conditions to limit the
areas of site investigations. The boundary
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12/10/84
Replacement Page E-5
conditions should be set so that subsequent
investigations will cover the contaminated media
in sufficient detail to support following
activities (e.g., the feasibility study). The
boundary conditions may also be used to identify
boundaries for site access control and site
security. [If not in existence, installation of
a fence or other security measures should be
considered.]
f. Site Map
Prepare a site map showing all wetlands,
floodplains, water features, drainage patterns,
tanks, buildings, utilities, paved areas,
easements, rights-of-way, and other features.
The site map and all topographical surveys should
be of sufficient detail and accuracy to locate
and report all existing and future work performed
at the site. [Permanent baseline monuments,
bench marks, and reference grid tied into any
existing reference system (i.e., State or USGS)
should be considered, as an option.]
g. Site Office
If agreed to by EPA and the State, establish a
temporary site office to support site work.
h. Contractor Procurement
[When SOW is used for Federal-lead, change to
"Subcontractor Procurement" and modify as
required.] Prepare contractor procurement
documents and award subagreement to secure the
services necessary to conduct the remedial
investigation and feasibility study.
TASK 2 - PLANS AND MANAGEMENT
Prepare all necessary plans for the remedial
investigation. The work plan should include a detailed
discussion of the technical approach, budget, personnel
requirements, and schedules, as well as the following:
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a. Sampling Plan
Prepare a Sampling Plan to address all field
activities to obtain additional site data. The
plan will contain a statement of sampling
objectives; specification of equipment, analyses
of interest, sample types, and sample locations
and frequency; and schedule. Consider use of
field screening techniques to screen out samples
that do not require off-site laboratory
analysis. The plan will also include a quality
assurance and quality control plan with
documentation requirements and estimates of costs
and labor. The plan must address all levels of
the investigation as well as all types of
investigations conducted (e.g., waste
characterization, hydrogeologic, soils and
sediments, air and surface water). The plan will
identify potential remedial technologies and
associated data that may be needed to evaluate
alternatives for the feasibility study.
b. Health and Safety Plan
Prepare a Health and Safety Plan to address
hazards that the investigation activities may
present to the investigation team and to the
surrounding community. The plan should address
all applicable regulatory requirements and detail
personnel responsibilities, protective equipment,
procedures and protocols, decontamination,
training, and medical surveillance. The plan
should identify problems or hazards that may be
encountered and their solutions. Procedures for
protecting third parties, such as visitors or the
surrounding community, will also be provided.
c. Data Management Plan
Develop and initiate a Data Management Plan to
document and track investigation data and
results. This plan should identify and set up
laboratory and data documentation materials and
procedures, project file requirements, and
project-related progress and financial reporting
procedures and documents.
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d. Community Relations Plan
Prepare a plan, based on on-site discussions, for
the dissemination of information to the public
regarding investigation activities and results.
Opportunities for comment and input by citizen,
community and other groups must also be
identified and incorporated into the plan.
Staffing and budget requirements for
implementation also must be included. [Not
required if Community Relations Plan has been
prepared.]
TASK 3 - SITE INVESTIGATION
Conduct only those investigations necessary to
characterize the site, and its actual or potential hazard
to public health and the environment. The investigations
should result in data of adequate technical content to
support the development and evaluation of remedial
alternatives during the feasibility study. Investigation
activities will focus on problem definition and data to
support the screening of remedial technologies,
alternative development and screening, and detailed
evaluation of alternatives.
The site investigation activities will follow the
plans set forth in Task 2. All sample analyses will be
conducted at laboratories following EPA protocols or their
equivalents. Strict chain-of-custody procedures will be
followed and all samples will be located on the site map
[and grid system] established under Tasks 1 and 2.
a. Waste Characteriziation
Conduct a sampling and analysis program to
characterize all materials of interest at the
site. These materials should include wastes
stored above or below ground in tanks, drums,
lagoons, piles, or other structures.
b. Hydrogeologic Investigation
[Generally limited to investigations for off-site
migration.] Conduct a program to determine the
presence and potential extent of ground water
contamination [and to evaluate the suitability of
the site for on-site waste containment].
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[Identify specific aquifer to be studied.]
Efforts should begin with a survey of previous
hydrogeologic studies and other existing data.
The survey should address the degree of hazard,
the mobility of pollutants considered (from Waste
Characterization), the soils' attenuation
capacity and mechanisms, discharge/recharge
areas, regional flow directions and quality, and
effects of any pumping alternatives that are
developed, if applicable. Such information may
be available from the USGS, the Soil Conservation
Service, and local well drillers. An
accompanying sampling program should determine
the horizontal and vertical distribution of
contaminants and predict the long-term
disposition of contaminants.
c. Soils and Sediments Investigation
Conduct'a program to determine the location and
extent of contamination of surface and subsurface
soils and sediments [identify specific areas to
be studied]. This process.may overlap with
certain aspects of the'hydrogeologic study (e.g.1,
characteristics of soil strata are relevant to
both the transport of contaminants by ground
water and to the location of contaminants in the
soil; cores from ground water monitoring wells
may serve as soj.1 samples) . A survey of existing
data on soils and sediments may be useful. The
horizontal and vertical extent of contaminated
soils and sediments should be determined.
Information on local background levels, degree of
hazard, location of samples, techniques utilized,
and methods of analysis should be included. The
investigation should identify the locations and
probable quantities of subsurface wastes, such as
buried drums, through the use of appropriate
geophysical methods.
d. Surface Water Investigation
Conduct a program to determine the extent of
contamination of [identify specific water
bodies]. This process may overlap with the soils
and sediments investigation; data from stream or
lake sediments sampled may be relevant to surface
water quality. A survey of existing data on
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surface water flow quantity and quality may be a
useful first step, particularly information on
local background levels, location and frequency
of samples, sampling techniques, and method of
analysis.
e. Air Investigation
Conduct a program to determine the extent of
atmospheric contamination. The program should
address the tendency of substances (identified
through Waste Characterization) to enter the
atmosphere, local wind patterns, and the degree
of hazard.
[Note: Other categories of investigations may be
needed for specialized site problems. These could include
biological and radiological investigations.]
TASK 4 - SITE INVESTIGATION ANALYSIS
Prepare a thorough analysis and summary of all site
investigations -and their results. The objective of this
task will be to ensure that the investigation data are
sufficient in quality (e.g., QA/QC procedures have been
followed) and quantity to support the feasibility study.
The results and data from all site investigations must
be organized and presented logically so that the
relationships between site investigations for each medium
are apparent. Analyze all site investigation data and
develop a summary of the type and extent of contamination
at the site. The summary should describe the quantities
and concentrations of specific chemicals at the site and
ambient levels surrounding the site. Describe the
number, locations, and types of nearby populations and
activities and pathways that may result in an actual or
potential threat to public health, welfare, or the
environment. [Specify whether a contamination, public
health, and/or environmental assessment is to be
conducted.]
TASK 5 - LABORATORY AND BENCH-SCALE STUDIES
[Note: The following applies when additional studies
are necessary to fully evaluate remedial alternatives.
The paragraphs may be modified to meet specific project
conditions.]
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Conduct laboratory and/or bench-scale studies to
determine the applicability of remedial technologies to
site conditions and problems. Analyze the technologies/
based on literature review, vendor contacts, and past
experience to determine the testing requirements.
Develop a testing plan identifying the type(s) and
goal(s) of the study(ies), the level of effort needed, and
data management and interpretation guidelines for
submission to [specify EPA and State recipients] for
review and approval.
Upon completion of the testing, evaluate the testing
results to assess the technologies with respect to the
site-specific questions identified in the test plan.
Scale up those technologies selected based on testing
results.
Prepare a report summarizing the testing program and
its results, both positive-and negative.
TASK 6 - REPORTS
a. Progress Reporting Requirements
[Note: The following paragraph applies when the
SOW is being used in a contract between the State
and an Engineer. Typical requirements are
described but may be modified based on the size
and complexity of the specific project. When the
SOW is used in a Cooperative Agreement, this
section should be replaced with reporting
requirements consistent with 40 CFR Part 30 and
the guidance "State Participation in the
Superfund Remedial Program," February 1984.]
Monthly reports shall be prepared by the Engineer
to describe the technical and financial progress
of the project. These reports should discuss the
following items:
1. Identification of site and activity
2. Status of work at the site and progress
to date
3. Percentage of completion and schedule
status
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4. Difficulties encountered during the
reporting period
5. Actions being taken to rectify problems
6. Activities planned for the next month
7. Changes in personnel
8. Actual expenditures (including fee) and
direct labor hours expended for this
period
9. Cumulative expenditures (including fee)
and cumulative direct labor hours
10. Projection of expenditures for
completing the project, including an
explanation of any significant
variation from the forecasted target
11. A graphic representation of proposed
versus, actual expenditures (plus fee)
and comparison of actual versus target
direct labor hours. A projection to
completion will be made for both.
The monthly progress report will list target and
actual completion dates for each element of
activity, including project completion, and will
provide an explanation of any deviation from the
milestones in the work plan.
b. Final Report
Prepare a final report covering the remedial
investigation and submit [specify number and
distribution] copies to [specify EPA and State
recipients, as appropriate]. The report shall
include the results of Tasks 1 through 5, and
should include additional information in
appendices. The report shall be structured to
enable the reader to cross-reference with ease.
10
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TASK 7 - COMMUNITY RELATIONS SUPPORT
[Note: The following paragraph applies when community
relations support is conducted under the work covered in
this SOW (e.g., under a Cooperative Agreement). The
paragraph may be modified to meet specific site or project
conditions.]
The Engineer may be required to furnish the personnel,
services, materials, and equipment to undertake a
community relations program. Although this may be a
limited program, community relations must be integrated
closely with all remedial response activities. The
objectives of this effort are to achieve community
understanding of the actions taken and to obtain community
input and support prior to selection of the remedial
alternative(s).
Community relations support should include, but may
not be limited to, the following:
Revisions or additions to community relations
plans., including definition of community
relations program needs for each remedial activity
Analysis of community attitudes toward the
proposed actions
Preparation and dissemination of news releases,
fact sheets, slide shows, exhibits, and other
audio-visual materials designed to apprise the
community of current or proposed actions
Establishment of a community information center
Arrangements of briefings, press conferences,
workshops, and public and other informal meetings
Assessment of the successes and failures of the
community relations program
Preparation of reports and participation in
public meetings, project review meetings, and
other meetings as necessary to the normal
progress of the work
Solicitation, selection, and approval of
subcontractors, if needed.
11
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All community relations support must be consistent with
Superfund community relations policy, as stated in the
"Guidance for Implementing the Superfund Program" and
Community Relations in Superfund — A Handbook.
12
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WHO GETS IT?
In response to a CPFF task order solicitation for Technical Analyses of
the Energy and Mining Industry Groups, the following offers were received:
Stonewell International $1,250,000
JEM Associates, Inc. 1,210,000
LBG Corporation 942,000
Science International 1,205,000
The technical proposals were forwarded to Dr. Henry Burton by the
Contracting Officer, who distributed them to the Technical Evaluation Panel
on which he served as a nonvoting chairperson. The three voting members
reviewed the proposals independently, reconvened to share their assessment,
and reached a group consensus as to the technical merit of each submission.
Each was scored on a scale of 0-100 points and a technical rating was assigned
to each proposal as follows:
Score
Science International Acceptable 70
JEM Associates, Inc. Acceptable 65
LBG Corporation Unacceptable 31
Stonewell International Unacceptable 24
The findings of the evaluation were summarized by Dr. Burton and
submitted to the Contracting Officer on August 15, 198X. A copy of the
Panel's report is included as Addendum A to this case. On reviewing the
Panel's report, the Contracting Officer raised the following questions
concerning its content:
1. Where were the Evaluators' worksheets and signatory concurrence
with the Panel's report?
2. Why was Stonewell International, a source initially considered as being
the only firm capable of performing the work, considered
"nonresponsible" ?
Furthermore, on personally examining the technical content of all
proposals, Ms. Traivers sensed a greater discrepancy in the quality of the two
top-ranked offerers than was suggested by the scoring and the accompanying
commentary.
On August 17, the Contracting Officer contacted Dr. Burton, raised her
concerns, and received the following explanation:
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1. No worksheets had been completed since there was no apparent EPA
requirement addressing this aspect of the evaluation process; in lieu of
worksheets, the evaluators had decided to incorporate all of their
comments and recommendations directly into the Committee report.
2. The Stonewell International proposal had been rated as nonresponsible
since evaluators had determined in discussions with technical personnel at
the Departments of Energy, Navy, DOD, and NASA that the contractor
consistently performed poorly.
Finally, Dr. Burton commented that he agreed with the Contracting
Officer's judgment that there was a much greater discrepancy between the
technical presentations of JEM Associates, Inc. and Science International than
had been evidenced by the scoring. Dr. Burton added that the Science
International proposal had been reviewed in the context of previous work
performed by them in 1978, which was considered unsatisfactory. The effort
which had been the subject of the problem had involved program evaluation
and consulting services to DOD and was therefore deemed similar enough to
take into consideration. The panel members had been unaware of the prior
effort during their individual reviews until Dr. Burton produced letters and
memoranda from office files highlighting the severe contract administration
difficulties on the 1978 effort. A sample of the evidence was forwarded to the
Contracting Officer and is included as Addendum B to this exercise. Taking
into account the problems experienced, the panel voted to reconsider the
initial score of 95 points and drop their overall assessment of the proposal
accordingly.
QUESTIONS
1. Consider Agency guidelines governing your own technical evaluations and
resulting documentation. Did this panel comply with those guidelines?
2. Can the Panel in this case consider the evidence introduced by Dr. Burton
as part of its scoring of the Science International proposal? What
alternatives does the Panel have in this situation?
3. Is the panel correct in its handling of the Stonewell proposal? Explain.
4. Describe the mission of the Technical Evaluation Panel and discuss what
aspects of the source evaluation process are left beyond the panel's
immediate purview.
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ADDENDUM A
August 15, 198X
TO: Ms. Delgato Traivers
Contracting Officer
FROM: Chairperson, Technical Evaluation Committee
SUBJECT: TECHNICAL EVALUATION OF PROPOSALS
The Technical Evaluation Team of the subject procurement met on
August 8, 198X to review and evaluate proposals submitted by Stone well
International, JEM Associates, Inc., LBG, Inc., and Science International for
the technical analysis of the energy and mining industry group.
The team met to discuss the proposals and prepare a technical evaluation
report. Prior to the team meeting, each panel member evaluated the
proposals independently. It is the recommendation of the review panel that
the two technically acceptable proposals from Science International and JEM
Associates, Inc. be considered for negotiation based on the technical
evaluation and relatively close scores.
Henry Burton, Ph.D.
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OFFEROR: STONEWELL INTERNATIONAL
FACTORS EVALUATORS
ABC TOTAL
Problem and Approach (30)
a) Understanding the Problem (15) 4 3 3 10
b) Soundness of Approach (15) 4 3 3 10
Personnel and Experience (60)
a) Experience (30) 842 14
b) Education (20) 5 8 4 17
c) Staff Utilization (10) 1214
Facilities (10) 7 6 4 17
COMMENTS
The proposal was nonresponsive to the RFP.
29 26 17 72
Avg 24-Technically
Unacceptable
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OFFEROR: LBG CORPORATION
FACTORS
Problem and Approach
a) Understanding the Problem
b) Soundness of Approach
Personnel and Experience
a) Experience
b) Education
c) Staff Utilization
Facilities
EVALUATORS
(30)
(15)
(IS)
(60)
(30)
(20)
(10)
(10)
A
6
5
IS
10
4
7
B
4
4
6
4
6
6
C
3
3
5
4
5
5
Ton
13
12
20
18
18
18
47 26 21 94
Avg 31-Technically
Unacceptable
COMMENTS
Strengths:
• One evaluator found the proposed staff to be fairly good, otherwise no
particular strengths were listed.
Weaknesses:
o Fails to address major SOW requirements; unclear responses when issues are
addressed.
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OFFEROR: SCIENCE INTERNATIONAL
FACTORS
Problem and Approach
a) Understanding the Problem
b) Soundness of Approach
Personnel and Experience
a) Experience
b) Education
c) Staff Utilization
Facilities
(30)
(IS)
(15)
(60)
(30)
(20)
(10)
(10)
EVALUATORS
ABC TOTAL
13 9 15 37
13 14 14 41
20 15 21
11 16 13
865
6
56
40
17
6 19
69 67 74 210
Avg 70-Technically
Acceptable
COMMENTS
Strengths:
• Accurate, clear assessment and understanding of the problem
• Sound, novel, practical approach proposed
r Full, complete understanding of underlying issues.
• Consultants proposed are experts and readily accessible geographically
• Facilities are adequate
Weaknesses!
• Could improve management concepts, perhaps with a team approach
• Need to better define specific use of staff and consultants
-• Misleading and inaccurate statements sometimes indicating uncertainty.
• Protocols are questionable
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ADDENDUM B
October 1, 1978
TO: The Record
FROM: Project Officer
SUBJECT: MEETING WITH SCIENCE INTERNATIONAL ON CONTRACTUAL
NON-COMPLIANCE, SEPTEMBER 12, 1978
In accordance with Article I, Statement of Work, Science International is to
implement the consulting services plan developed by Government staff as a
result of program evaluation. On August 10, 1978, this office received the
July 1978 monthly report from Science International in which two events
occurred that seemed definitely in violation of this contract. First, the
contractor provided assistance to the Secretary of the Army in the area of
recruitment because "the program had been instructed via program audit to
expand its recruitment.1* Second, the contractor developed a procedural
manual for the Array without prior approval from this office and indicated
that the need for a procedural manual had been identified during the program
evaluation. As of this date, the program staff has not completed its program
audits nor developed a technical assistance plan for implementation by the
above contractor. The contractor met with the Project Officer and
Contracting Officer on August 18, 1979, and an inquiry was made regarding
the projected schedule of center visits for the purposes of financial inventory.
A letter dated August 27, 1978, was received by this office from Science
International containing the financial inventories done during the month of
August. The list of centers inventoried contains the Dallas center, which was
not in the original list submitted to the contractor by this office.
Because of these repeated contract violations, as Project Officer for the
above contract, I recommended to the Contracting Officer that be notify the
contractor that it is in violation of the contract. Such notification was given
verbally to the contractor during the September 12, 1978, meeting and a
twix confirming same was sent on September 13,1979.
Charles O. Babbott, PhJD.
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OFFEROR: JEM ASSOCIATES
FACTORS
Problem and Approach
a) .Understanding the Problem
b) Soundness of Approach
Personnel and Experience
a) Experience
b) Education
c) Staff Utilization
Facilities
(30)
(15)
(15)
(60)
(30)
(20)
(10)
(10)
EVALUATORS
ABC TOTAL
6 7
7 7
5
6
20 30 24
15 19 17
585
18
20
74
51
18
15
58 76 62 196
Avg 65-Technically
Acceptable
COMMENTS
Strengths:
• Generally good understanding
• Proposes routine, time worn methodologies .
• Generally well qualified staff and consultants
• Average facilities
Weaknesses:
• Nothing new here
• No real firm proposed approach—lacks specifics
• Will require extensive explanation to assure we get what we need
-• Need'to firm-lip management aspects
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