United States Office of January 1995
Environmental Protection Acquisition
Agency Management -3802F
Acquisition Training For
Project Officers:
A Guide To Pre-Award
Contract Management
Recycled/Recyclable
Printed with Soy/Canda Ink
contains at least 50% recycled fiber
Hi C} Printed with Soy/Canda Ink on paper that
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U.S. ENVIRONMENTAL PROTECTION AGENCY
CONTRACT PROJECT OFFICER COURSE
TABLE OF CONTENTS
CHAPTER 1 - MEANING AND OVERVIEW OF ACQUISITION
1. Introduction 1-1
2. The Office of Acquisition Management 1-1
3. Acquisition Compared with Assistance 1-4
4. Legal and Regulatory Framework for Contracting .... 1-5
5. EPA Procurement Guidance 1-6
6. The Law of Agency 1-7
7. Acquisition Roles and Responsibilities
within EPA 1-8
8. Unauthorized Procurements 1-12
9. Consequences of Unauthorized Procurements 1-12
10. Ratification of Unauthorized Procurements 1-13
11. Documentation Supporting Ratification 1-13
12. Standards of Conduct (Ethics) 1-15
13. Ethics Officials 1-15
14. Ethics for All Government Employees 1-16
15. Procurement Integrity 1-17
CHAPTER 2 - BUDGETING AND ACQUISITION PLANNING
1. Introduction 2-1
2. Budgeting and Planning 2-1
3. The Budget Year 2-1
4. The Operating Plan 2-3
5. The Current Year 2-4
6. The Decision to Contract Out 2-5
7. Impact of OMB Circular A-76 2-5
8. Inherently Governmental Functions 2-5
9. Sensitive/Vulnerable Services 2-7
10. Advance Acquisition Planning 2-7
11. Annual/Program Acquisition Plans 2-9
12. Cut-Off Dates 2-9
13. Individual Acquisition Plans 2-9
14. Format for Individual Acquisition Plans 2-11
15. Procedure for Procurement Scheduling 2-14
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CHAPTER 3 - SOURCE CONSIDERATIONS
1. Required Sources of Supplies and Services 3-1
2. Source Considerations 3-2
3. Availability of Work Resulting from
Other Sources 3-2
4. Small Business set-Asides 3-2
5. Small Disadvantaged Business Concerns 3-3
6. Labor Surplus Area Set-Asides 3-4
7. Sources-Sought Synopsis 3-4
8. Synopsis of Proposed Contracts 3-6
9. Justifications for Other Than Full and
Open Competition 3-6
CHAPTER 4 - CONTRACT TYPES, FUNDING, AND OPTIONS
1. Introduction 4-1
2. Firm Fixed-Price Contract 4-1
3. Cost-Reimbursement Type Contract 4-2
4. Cost-Plus-Award-Fee Contract 4-4
5. Time and Materials Contract 4-6
6. Labor-Hour Contract 4-7
7. Indefinite Delivery Type Contract 4-8
8. Funding 4-10
9. Funding Cost-Reimbursement Term
Form Contracts (Level of Effort) 4-10
10. Availability of Funds 4-12
11. Commitments 4-13
12. Funding Cost-Type Contracts 4-13
13. Options 4-14
CHAPTER 5 - STATEMENT OF WORK PREPARATION
1. Statement of Work (SOW) 5-1
2. Performance-Based SOW 5-1
3. Planning and Preparation 5-2
4. Analysis of the Work 5-3
5. Contents of the Statement of Work 5-3
6. Personal Services and Nonpersonal Services 5-4
7. Reporting Requirements 5-5
8. Writing Specifications for Commercial Products .... 5-7
ii
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CHAPTER 6 - PROPERTY AND DATA ISSUES
1. Government Property 6-1
2. Property to be furnished and/or
Acquired Before Contract Award 6-3
3. Lease Versus Purchase Determinations 6-3
4. Acquisition of Excess Property 6-5
5. Vesting Title to Educational Institutions 6-6
6. Joint Use of Property by Contractor and EPA 6-7
7. Use of Property Purchase with Funds
of Another Agency 6-7
8. Contractor Use of Government Vehicles 6-7
9. Contractor Use the Federal Supply Services 6-8
10. Acquisition of Nonserverable Facilities 6-8
11. Rights in Data and Copyrights 6-9
12. Acquisition of Data 6-10
13. Definitions (data) 6-10
14. Delineating the Government's and
Contractor's Rights 6-11
15. Confidential Business Information 6-12
CHAPTER 7 - ACQUISITIONS REQUIRING SPECIAL APPROVALS
1. Procurement Request Approvals 7-1
2. Designated Office Approval 7-1
3. Management Approvals 7-6
4. Advisory and Assistance Services 7-7
5. Sensitive Contracting Areas 7-7
6. Management Approval of Advisory
and Assistance or Sensitive Services 7-8
7. Unsolicited Proposals 7-10
8. Quality Assurance Program Plans 7-11
9. Foreign Research Contracts 7-15
CHAPTER 8 - DEVELOPMENT OF THE PROCUREMENT REQUEST
1. Introduction 8-1
2. The Procurement Rationale Checklist 8-2
3. The Attachments 8-3
4. Item Descriptions 8-5
5. Additional Attachments Not Listed in the
32 Point Checklist 8-20
6. Notify the CO Concerning the Following 8-22
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CHAPTER 9 - PROPOSAL EVALUATION, NEGOTIATION. AND AWARD
1. Introduction 9-1
2. Applicability 9-1
3. Policy 9-1
4. Source Evaluation Board Structure 9-1
5. Preparing for the Evaluation 9-3
6. Distribution and Proposal Control 9-5
7. Disclosure of Information 9-5
8. Technical Evaluation Process 9-5
9. Technical Evaluation Criteria 9-7
10. Price or Estimated Cost Factors 9-9
11. Evaluating Proposals 9-10
12. Technical Evaluation Report 9-14
13. Preparation of Business Evaluation
Panel Report 9-14
14. Determination of Competitive Range 9-15
15. Written or Oral Discussions 9-17
16. Limited Discussions vs. Full Negotiations 9-17
17. Proposal Revisions 9-18
18. Source Selection 9-18
19. Award Notifications 9-19
20. Debrief ings 9-20
CHAPTER 10--PROTESTS
1. Definition 10-1
2. Procedures 10-1
3. Protests Filed with EPA 10-2
4. Protests Filed with the GAO 10-3
5. Protests of the GSBCA 10-5
APPENDICES
Glossary of Terms
Guide for Preparing Government Cost Estimates
iv
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CHAPTER 1 - MEANING AND OVERVIEW OF ACQUISITION
Table of Contents
1. Introduction 1-1
2. The Office of Acquisition Management 1-1
3. Acquisition Compared with Assistance 1-4
4. Legal and Regulatory Framework for Contracting .... 1-5
5. EPA Procurement Guidance 1-6
6. The Law of Agency 1-7
7. Acquisition Roles and Responsibilities
within EPA 1-8
8. Unauthorized Procurements 1-12
9. Consequences of Unauthorized Procurements 1-12
10. Ratification of Unauthorized Procurements 1-13
11. Documentation Supporting Ratification 1-13
12. Standards of Conduct (Ethics) 1-15
13. Ethics Officials 1-15
14. Ethics for All Government Employees 1-16
15. Procurement Integrity 1-17
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CHAPTER 1 - MEANING AND OVERVIEW OF ACQUISITION
1. Introduction. EPA obligates over $1 billion annually for
supplies and services through the acquisition process. These
contracts are diverse, complex and challenging to manage. They
include information management systems, Superfund site clean-ups,
laboratory analyses, technical support for regulatory
development, and analytical studies. It is crucial that contract
funds be managed effectively and contract management receive
visibility and oversight at the highest levels of EPA.
2. The Office of Acquisition Management.
a. The Office of Aquisition Management (0AM) reports to the
Assistant Administrator for Administration and Resources
Management (OARM). OAM consists of five divisions. (See the
chart on page 1-3.)
b. The Headquarters Procurement Operations Division (HPOD)
is responsible for processing headquarters small purchases,
performing contract close out, responding to Freedom of
Information Act requests, placing and managing all Agency
operations and ADP contracts.
c. The Superfund/RCRA Procurement Operations Division
(SPOD) oversees and coordinates all contract services in the
emergency response, remedial action, enforcement and RCRA
contracting programs.
d. The Cost Advisory and Financial Analysis Division
conducts contractor audits, advises contracting officers on
contract cost issues, performs financial monitoring of active
contracts and conducts contractor purchasing system reviews.
e. The Policy, Training and Oversight Division (PTOD)
drafts Agency procurement regulations, conducts procurement
management reviews, manages automated systems and data for
procurement and develops and provides contract management
training.
(1) The Training and Certification Branch-in PTOD
offers the following general courses for contract managers and
their supervisors: the Basic Project Officer Course (3 days),
the Contract Administration Course (3 days), the Contract
Administration Course for Supervisors of Contract Managers (1
day), the Contract Recertification Course (1 day), and various
seminars customized for specific programs.
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f. The Contracts Management Division in RTF plans,
organizes, and directs the procurement support function of the
EPA activities located in the Research Triangle Park area and
various EPA Headquarters and Regional activities. At RTF, these
include: all contracts relating to the Air and Energy Engineering
Research Laboratory, the Health Effects Research Laboratory, the
Atmospheric Research and Environmental Assessment Laboratory; the
Environmental Criteria and Assessment Office, the Office of Air
Quality, Planning and Standards, and the RTF Office of
Administration and Resources Management. At Headquarters, these
include: the Office of Prevention, Pesticides, and Toxic
Substances, the Office of Research and Development, the Office of
Air and Radiation, and the Office of Federal Activities. The
Division is also responsible for the contracting operations in
all ten Regional offices for non-Superfund activities.
g. The Contracts Management Division in Cincinnati is
responsible for contracts relating to the Office of
Administration (A&E - construction), the Cincinnati Office of
Administration & Resources Management, the Office of Air &
Radiation-Motor Vehicle Emission Lab-Ann Arbor, the Office of
Research and Development Field Labs, and the Office of Water.
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OFFICE OF ACQUISITION MANAGEMENT
DIRECTOR, OFFICE OF
ACQUISITION MANAGEMENT
Dr. Betty I ,
260-5020
DEPUTY DIRECTOR, OAM
Jeanette F. Brown
260-5020
DIRECTOR. SUPERFUND/RCRA
PROCUREMENT OPERATIONS
DIVISION
Diane Bakterson 260-9458
SRRCRAHO
CONTRACT OP6R
BRANCH
Paige Peck
260-2548
REGIONAL
CONTRACT PLACE
BRANCH
BIN Topping
260-9184
REGIONAL
CONTRACT MGU1
BRANCH
2604458
DIRECTOR
POLICY, TRAINING, &
OVERSIGHT DIVISION
Rosemarie Nance, Act 260-5024
QUALITY
ASSURANCE
BRANCH
TomO'Com*
26O-8268
PROCUREMENT
POUCY
BRANCH
Edward Murphy
2GO-6034
SYSTEMS ft
MFORMATON
MOMT BRANCH
JohnORver
260-8288
TRAINING &
CERTIRCATION
BRANCH
OkM Nightengale
260-6033
DIRECTOR, HEADQUARTERS
PROCUREMENT
DIRECTOR, COST
ADVISORY & FINANCIAL
ANALYSIS DIVISION
DON HAMBRIC 260-9404
DIRECTOR
CONTRACTS MANAGEMENT
DIVISION - RTP
Michael Bower 919-541-3045
WASHINGTON
COST ADV.
BRANCH
Steve Leahy
260-3220
RNANCIAL
ANALYSIS
BRANCH
DeteBobereon
26O-3194
_L
COSTPOUO
& RATE NEC.
BRANCH
John Zftbretsky
260-3243
DIRECTOR
CONTRACT MANAGEMENT
DIVISION-CINCINNATI
Mark Keflerman 513-366-2026
CONTRACT
SUPPORTS
POUCY BR.
Sandra Davis
919-541-3O24
SMALL
PURCHASE
BRANCH
Robin Traykx
919-541-3416
CONTRACT
PLACEMENT
BRANCH
1 toMis PowcN
919-541-4369
CONTRACT
MANAGEMENT
BRANCH
Thomas Sherpe
919-S41-3572
CLPACQ.
MANAGEMENT
BRANCH
Janet Simmons
91 9-541 -40B1
CONSTRUC.
I, SMALL
PURCHASE BR.
Chns Colon
513-366-2028
ACQursmoN
MGfcfT
BRANCH
Becky OKdtey
513-366-2028
COST
ADVISORY
BRANCH
Wanen Reynolds
513-366-2045
CONTRACTS
MGMT
BRANCH
MikeBcrberich
513-366-2104
CONTRACT
SUPPORT
BRANCH
Marsha Wood
513-366-2026
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3. Acquisition (Contracting) Compared with Assistance. There
are several ways for the Agency to meet its objectives: by hiring
Government employees, or through the acquisition or assistance
process. Acquisition and assistance are different processes
involving various types of legal instruments and relationships
between the Government and recipients.
a. Assistance agreements may not be used to fund extramural
projects except where permitted by the Federal Grant and
Cooperative Agreement Act of 1977 (FGCA). The FGCA was based on
a congressional finding that executive agencies were not
adequately differentiating between acquisition and assistance
relationships. Congress was concerned that agencies were
misusing assistance agreements to circumvent competition and
other acquisition rules and also applying unnecessarily
burdensome contract paperwork requirements to nonacquisition
transactions.
b. FGCA states an agency must use a contract if the
principal purpose of the agreement with an eligible entity is to
acquire, by purchase, lease, or barter, property or services for
the direct benefit or use of the Federal Government, or if the
agency otherwise determines that use of a procurement contract is
appropriate.
Some examples of activities that must be contracted for
include:
o Providing technical, analytical and application review
advise for the direct benefit of EPA offices; or
o Producing specific information that will be
incorporated into EPA technical, policy, or regulatory
decisions.
c. FGCA also states an agency may use an assistance
agreement only if the principal purpose of an agreement is to
transfer a thing of value (e.g., money, equipment, services) to
an eligible entity to accomplish a public purpose of support or
stimulation authorized by statute. Where an agency will not be
substantially involved with the recipient during the performance
of an assistance agreement, a grant is appropriate. If
substantial Federal involvement is contemplated, the agency must
select a cooperative agreement.
Some examples of activities that EPA funds through
assistance agreements include:
o Conducting basic research;
o Constructing local wastewater treatment plants;
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o State and local government cleanup of hazardous waste
sites; and
o Environmental education programs.
d. If it is unclear in a particular instance whether an
assistance agreement would be permissible under the FGCA, you
should contact the Headquarters or Regional Grants Administration
Office. Further guidance on grants and cooperative agreements
can also be found in EPA Order 1000.19 and Chapter 1 of the
Agency's Assistance Administration Manual.
e. Another way of accomplishing our mission is through the
use of an interagency (IAG) Agreement, which is a legal agreement
between. Federal agencies for providing goods or services. lAGs
shall be prepared by the Program Office and will be reviewed by
the Grants Administration Division at Headquarters; Regional
Assistance Administration units (or other appropriate units
designated by the Regional Administrator) will review lAG's which
originate in the Region.
4. Legal and Regulatory Framework for Contracting. One reason
why the acquisition world is so complicated is because of the
multitude of regulations, rules, Executive Orders and Statutes
which govern it. You will learn more about these legal
requirements as the course progresses.
a. The Federal Acquisition Regulation. The Federal
Acquisition Regulation (FAR) was established for the codification
and publication of uniform policies and procedures for
acquisition by all executive agencies. The FAR is currently
composed of 53 Parts with guidance ranging from competition and
acquisition planning/ to socioeconomic programs and contract
management. Revisions to the FAR are called FACs (Federal
Acquisition Circulars).
b. Other guidance which impacts on contracting is issued by
the Office of Management and Budget (OMB). This guidance is
called OMB Circulars. Some OMB Circulars of note include:
o OMB Circular A-76, Performance of Commercial Activities;
o OMB Circular A-120, Guidelines for the Use of Advisory
and Assistance Services; and
o OMB Circular A-109, Major Systems Acquisitions.
The Office of Federal Procurement Policy (OFPP) is a part of
OMB and is responsible for developing and issuing policy guidance
on procurement. Some of OFPP's responsibilities include:
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o Prescribing Government procurement policies for
implementation in the FAR;
o Overseeing the collection, development, and dissemination
of procurement data though the Federal Procurement Data
System;
o Overseeing the Federal Acquisition Institute to support
the development of a competent, professional procurement
workforce; and
o Advising the President and the Congress on matters
relating to procurement.
Some Policy Letters which OFPP has issued include:
o 91-2, Service Contracting;
o 92-1, Inherently Governmental functions; and
o 92-3, Procurement Professionalism Program Policy.
c. Executive Orders (E.O.) establish policies to be
followed by the executive agencies. An E.O. will stay in effect
unless rescinded by the signing President or a successor
President.
5. EPA Procurement Guidance. There are four major avenues for
disseminating procurement related policy and procedures at EPA.
Information is provided in the Environmental Protection Agency
Acquisition Regulation (EPAAR), the Contracts Management Manual
(CMM), the Acquisition Handbook (AH), and Procurement Policy
Notices (PPN). The method of dissemination depends on statutory
and FAR requirements for the EPAAR and the audience for which the
material is intended.
a. The Chief of the Procurement Policy Branch in 0AM is
responsible for initiating changes to each of these four
directives. Any suggestions concerning these directives or their
use may be directed to the Chief of the Procurement Policy
Branch. A brief synopsis of each policy directive follows.
b. EPAAR. According to the Federal Acquisition Regulation
(FAR) Subpart 1.3, each agency may issue acquisition regulations
which implement or supplement the FAR. Generally, any EPA
procurement policy or procedure which has a significant effect
beyond Agency internal operating procedures or has a significant
cost or administrative impact on offerers/contractors must be
published in the Federal Register for comment and included in the
EPAAR. Section 22 of the Office of Federal Procurement Policy
Act, as implemented in the FAR, requires this.
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Any proposed change or addition to the EPAAR is initially
routed through all Agency contracting activities for comments.
If comments are received, the necessary revisions are made, and
the proposed change is forwarded for Red Border Review by Agency
offices affected by the proposed change. After all comments have
been resolved, the change is then published as a proposed rule in
the Federal Register with at least a thirty day period for public
comments. After comments are received, revisions, if any, are
made to the proposed rule. The rule is again subjected to Red
Border Review, then it is published again in the Federal Register
as a final rule.
c. CMM. The CMM is an Agency-wide directive. Guidance in
the CMM is addressed primarily to Program Office personnel.
Policy and procedures in the CMM do not directly impact
contractors.
Proposed changes to the CMM are routed through all
contracting activities and Agency offices for comment (Green
Border Review). They are not published outside of the Agency for
public comment. Once approved by the Assistant Administrator for
Administration and Resources Management, changes to the CMM are
part of the Agency's formal internal operating guidance.
d. AH. The AH contains guidance on OAM internal
acquisition procedures. These procedures impact OAM contracting
activities only; they do not directly affect Program Offices or
Contractors. The AH is formally approved by the Director of OAM.
e. PPN. PPNs are generally issued to procurement personnel
for policy reguiring prompt issuance prior to incorporation into
the AH, CMM or EPAAR. PPNs are numbered consecutively by fiscal
year and are distributed within OAM.
6. The Law of Agency. Who has authority to make financial
obligations on behalf of EPA? Under the law of Agency, one
party, known as the principal, appoints another party, known as
the agent, to enter into a business or contractual relationship
with a third party. In Government contracting,
o The Government is the principal.
o The Contracting Officer (CO) is the agent.
o The third party is the contractor.
For a Government contract (including modifications and changes)
to be valid, it must be entered into by a duly appointed CO
acting within the scope of his/her authority.
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7. Acquisition Roles and Responsibilities within EPA.
a. Contracting Officers (CO). The CO is the key
operational person in the Federal acquisition process. COs have
authority to enter into, administer, or terminate contracts and
make related determinations and findings. At EPA there are two
types of COs: 1) Placement COs who are involved in the planning,
solicitation and award of a contract, and 2) Management COs who
administer a contract after it has been awarded.
All COs are responsible for the following:
o Ensuring that no contract is entered into unless all
requirements of law, executive orders, and all other
applicable procedures, including clearance and approvals,
have been met;
o Ensuring sufficient funds are available for obligation;
o Ensuring contractors receive impartial, fair and equitable
treatment; and
o Requesting the advice of specialists in audit, law,
engineering, transportation, and other fields, as
appropriate.
At EPA some COs are called "independent Contracting
Officers" because they process the acquisition without the
support of a contract specialist. Because the CO has many
functions to perform, he/she is usually supported by a contract
specialist. (In small purchases a CO may be supported by a
procurement assistant.)
b. Contract Specialist. A contract specialist does much of
the "leg work" in processing acquisitions. She/he may perform
placement or management functions. A contract specialist's work
is reviewed and approved by the CO. Contract specialists do not
have CO authority.
c. The Agency Competition Advocate is responsible for
challenging barriers to and promoting full and open competition
in all procurement actions. Any procurement action with a value
over $100,000 which restricts full and open competition must be
reviewed and approved by the competition advocate. EPA's
competition advocate is part of the OAM Director's immediate
office.
d. A cost/price analyst or auditor has special knowledge of
cost and price analysis techniques and analyzes proposals,
contract changes, repricing agreements, indirect cost rates and
so forth.
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e. The Small Business Specialist works with the CO planning
small business set-asides, small disadvantaged business, 8(a),
set-asides, identifying "break-out opportunities," reviewing
subcontracting plans, and otherwise supporting the attainment of
small and disadvantaged business utilization goals.
f. The Office of General Counsel reviews solicitations,
awards and contracts for legal sufficiency, assists COs in
responding to protests and disputes, and advises COs on the
interpretation and applicability of laws, regulations, cases law,
and contract clauses.
g. The Project Officer (PO) as the CD's technical
representative is responsible for the following pre-award
functions:
1) Acquisition planning
2) Budgeting and developing the Government Independent Cost
estimate
3) Preparing the procurement request and required
documentation
4) Writing the contract statement of work
5) Writing source selection criteria
6) Performing technical evaluation of proposals.
In other areas the PO will assist the CO by providing
documentation or attending pre-proposal conferences,
negotiations, debriefings and post-award conferences. The chart
on the following pages lists the major acquisition cycle
activities and PO responsibilities.
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Major Acquisition Cycle Activities
and
Project Officer Responsibilities
P.O. C.O.
TR* PA* Resp.
1. Identify the Need for a Contract X
- commit sufficient funds X
Pre-Solicitation Phase;
2. Decision to Solicit Proposals X X
3. Acquisition Planning X X
4. Establishing the Source
Selection Team X X
5. Preparing the Procurement X
Request/"32-Point Document"
(See Chapter 8)
Solicitation/Award Phase;
6. Review of the Procurement X
Request/Order
7. Determination of Method of
Contracting and Contract Type X
8. Synopsis in the Commerce
Business Daily X
9. Preparation and Issuance of
the Solicitation X
10. Pre-Proposal Conference X X
11. Receipt of Offers X
12. Distribution of Proposals
to Evaluation Panels X
* TR = Total Responsibility of Project Officer
PA = Participatory Activity of the Project Officer
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Major Acquisition Cycle Activities
and
Project Officer Responsibilities
(Continued)
P.O. C.O.
TR* PA* Resp,
Solicitation/Award Phase (continued);
13. Evaluation Reports to
Contracting Office X
14. Determination of the
Competitive Range X X
15. Conduct of Written or Oral
Discussions X X
16. Request, Receipt, and Evaluation
of Revised Proposals X X
17. Selection of Source X X
18. Award of Contract X
19. Debriefing of Unsuccessful
Offerers X X
Post-Award Administration Phase;
20. Managing Contracts After Award X X
21. Monitoring Activities of the Contractor X X
22. Contract Termination X X
THE CONTRACTING OFFICER WILL PROVIDE ASSISTANCE, IF REQUESTED,
WITH ANY PROJECT OFFICER ACTIVITIES.
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8. Unauthorized Procurements.
a. An unauthorized procurement (or unauthorized commitment)
means an agreement that is not binding solely because the
Government representative who made the agreement was not a duly
appointed Contracting Office acting within the scope of his/her
authority. (Remember the law of Agency, paragragh 6.)
Unauthorized procurements include:
® Ordering supplies or services by an individual who does
not have contracting authority;
® Unauthorized direction of work through assignment of
orders or tasks;
® Unauthorized addition of new work to an existing order
or contract;
® Unauthorized direction of contractors to subcontract
with a particular firm; or
® Any other unauthorized actions that change the terms and
conditions of the purchase order or contract.
b. If you must call a vendor/contractor to obtain pricing
information from a vendor/contractor in order to prepare a PR, be
sure the vendor knows the query is not a formal order. You may
want to say to the vendor, "I am calling for informational
purposes only--I am not placing an order." In an emergency,
contact the purchasing/contracting activity to arrange rush
procurements. Do not order supplies or services without advance
approval by a contracting officer.
9. Consequences of Unauthorized Procurements. Personal
liability can result if an unauthorized procurement cannot be
ratified by an authorized official. This means that the person
making the commitment might be held personally liable for any
costs incurred by the unauthorized procurement. Vendors may take
legal action against the individual responsible for the
commitment.
b. The purchaser's existing authority might be revoked, in
accordance with Chapter 7, Contracts Management Manual, if the
authority is exceeded. This included Project Officers, Work
Assignment Managers, Delivery Order Officers, Call Ordering
Officers on blanket purchase agreements, or holders of Government
Bankcards. The Inspector General must be informed of any
revocations.
c. Individuals might be subject to corrective action, as
detailed in the Conduct and Discipline Manual, ranging from oral
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reprimand or removal, based on the severity of the offense.
d. The consequences apply to all unauthorized commitments,
whether oral or written, and regardless of dollar value.
10. Ratification of Unauthorized Procurements. a. Ratification
is the execution by an authorized contracting officer of a
document that retroactively formalizes a contract action of an
individual who acted without contracting authority. It also
includes action by a Contracting Officer who acted beyond his or
her delegated authority.
b. Ratifications may be effected only if the unauthorized
actions would have been valid had it been authorized by a
contracting officer. The following conditions, as stated in the
Federal Acquisition Regulation, Section 1.602-3(c), must be met:
(1) Supplies or services have been provided to and
accepted by the Government, or the Government otherwise has
obtained or will obtain a benefit resulting from performance of
the unauthorized commitment;
(2) The ratifying official could have granted authority
to enter or could have entered into a contractual commitment at
the time it was made and still has the authority to do so;
(3) The resulting contract would have otherwise been
proper if made by an appropriate contracting officer;
(4) The Contracting Officer reviewing the
unauthorized commitment determines the price to be fair
and reasonable;
(5) The Contracting Officer recommends payment and
legal counsel concurs in the recommendation, unless Agency
procedures expressly do not require such concurrence;
(6) Funds are available and were available at the
time the unauthorized commitment was made; and
(7) The ratification is in accordance with any other
limitations prescribed under Agency procedures.
11. Documentation Supporting Ratification.
a. The program office shall notify the cognizant
contracting office by memorandum of the circumstances surrounding
an authorized commitment. The notification shall include:
(1) All relevant documents and records;
(2) Documentation of the necessity for the work and
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benefit derived by the Government;
(3) A statement of the delivery status of the supplies
or services associated with the unauthorized commitment;
(4) A list of procurement sources solicited (if any) and
the rationale for the source selected;
(5) If only one source was solicited, a justification
for other than full and open competition (JOFOC) as required by
FAR 6.302, FAR 6.303 and 1506.303, or for small purchases
exceeding the competition threshold in FAR 13.106, a sole source
justification as required by EPAAR 1513.170;
(6) A statement of steps taken or proposed to prevent
reoccurrence of any unauthorized commitment.
b. The Division Director (or equivalent) of the responsible
office shall approve the memorandum. If expenditure of funds is
involved, the program office shall include a Procurement
Request/Order, EPA Form 1900-8, with funding sufficient to cover
the action. The appropriation data cited on the 1900-8 shall be
valid for the period in which the unauthorized commitment was
made.
c. Upon receiving the notification, the Contracting Officer
shall prepare a Determination and Findings (D&F) regarding
ratification of the unauthorized commitment for the ratifying
official. The D&F shall include sufficient detail to support the
recommended action. If ratification of the unauthorized
commitment is recommended, the D&F shall include a determination
that the price is fair and reasonable. To document the
determination, additional information may be required from the
Contractor. Concurrence by the Office of General Counsel is not
mandatory, but shall be sought in difficult or unusual cases.
d. The ratifying official may inform the Inspector General
(IG) of the action by memorandum through the Head of the
Contracting Activity (HCA). For ratification actions exceeding
the small purchase limitation, the ratifying official shall
submit a memorandum to the Assistant Administrator for
Administration and Resources Management through the HCA for
transmittal to the Associate or Regional Administrator (or
equivalent level) of the person responsible for the unauthorized
commitment. This memorandum should contain a brief description
of the circumstances surrounding the unauthorized commitment,
recommend corrective action, and include a copy of amy memorandum
sent to the IG. Submission of a memorandum to the appropriate
Assistant, Associate, or Regional Administrator for unauthorized
commitments at or below the small purchase limitation is optional
and may be accomplished at the discretion of the ratifying
official.
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12. Standards of Conduct (Ethics).
a. Federal employees are responsible for the day-to-day
management of the Government and its funds. As such, the
taxpayers expect and are entitled to impeccable conduct on the
part of Government personnel. All official decisions must be
free from any consideration of personal self-interest or any type
of favoritism.
b. EPA employees should read and understand the
requirements of 5 CFR Part 2635, Standards of Conduct for
Employees of the Executive Branch, which sets forth the standards
of conduct for personal behavior. Topics covered in this
regulation include gifts, conflicting financial interests,
impartiality in performing official duties, seeking other
employment, misuse of position and outside activities. It is
absolutely vital that the restrictions are understood, since
criminal penalties may be imposed for any serious violations.
c. In 1988, Congress passed the Federal Procurement Policy
Act Amendments of 1988, Public Law 100-679. Section 6, entitled
"Procurement Integrity," prohibits competing contractors and
Government procurement officials from offering or accepting
gratuities, soliciting or discussing post Government employment
during a procurement, or soliciting or disclosing proprietary or
source selection information.
13. Ethics Officials. The Designated Agency Ethics Official
responsible for managing the EPA ethics program is EPA's Deputy
General Counsel. He is assisted by an Alternate Agency Ethics
Official and by Deputy Ethics Officials in each program area or
region. These officials are responsible for advising their
employees on the rules of ethics, coordinating their advice with
the Designated Agency Ethics Official, reviewing requests for
approval of outside employment, and reviewing and maintaining
confidential statements of employment and financial interest.
The Deputy Ethics Officials are:
• Assistant Administrators
• Associate Administrators
• Staff Office Directors
• Regional Administrators
• Office Directors
• Laboratory Directors and the
• Inspector General.
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If questions arise, employees should consult either their Deputy
Ethics Official or the Designated Agency Ethics Official.
14. Ethics for all Government Employees.
a. The following information highlights some ethics
regulations of which Project Officers should be aware. This
section does not cover all of the ethics regulations applicable
to EPA employees. Should an ethics issue arise, refer to the
regulations themselves or seek advise from an ethics official to
resolve ethics issues. Please note: if you are a "procurement
official," you will be subject to the Procurement Integrity Act
and additional, stricter standards will apply.
b. General Ethical Standards. The following principle of
ethical conduct apply to all EPA employees:
• Employees shall not use public office for private gain.
• Employees shall act impartially and not give preferential
treatment to any private organization or individual.
• Employees shall disclose waste, fraud, and corruption to
appropriate authorities.
• Employees shall make no unauthorized commitments or
promises of any kind purporting to bind the Government.
• Employees shall adhere to all laws and regulations that
provide equal opportunity for all Americans regardless of
race, color, religion, sex, national origin, age, or
handicap.
• Employees shall endeavor to avoid any actions creating
the appearance that they are violating the law or the
Stands of Ethical Conduct.
c. Gifts. Employees may not solicit or accept a gift given
because of his/her official position or from a prohibited source.
Employees are permitted to accept unsolicited gifts with a market
value of $20 or less per occasion, aggregating no more than $50
in a calendar year from any one sources. If you are a
"procurement official" you must not accept anything with a market
value over $10.
(1) An employee shall not accept gifts from the same or
different sources on a basis so frequent that a reasonable person
would be led to believe the employee is using his public office
for private gain. Employees must use judgment and discretion.
If the acceptance of a nominal gift or gratuity would create even
the appearance of an impropriety or if the contractor would
expect to be rewarded through an employee's official EPA
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capacity, it must be declined.
e. Financial Interest. Under the criminal conflict of
interest statute, 18 U.S.C.208, and 5 CFR Part 2635.402 an
employee is prohibited from participating in an official capacity
in any particular matter in which, to his/her knowledge, he/she
or any person whose interests are imputed to him/her has a
financial interest, if the particular matter will have a direct
and predictable effect on that interest.
This restriction applies to rulemaking, policy matters,
adjudications, grants and contracts. An employee must recuse
himself/herself from all such matters even if it would create
only the appearance of a conflict of interest. Certain types of
financial interest are exempted from the statute, and others may
be waived by the Designated Agency Ethics Official if it is
deemed that the financial interest is not so substantial as to
affect the integrity of the employee's services.
c. Disclosure Statement. All EPA employees serving as
contract managers must file Standard Form 450, Confidential
Financial Disclosure Report, with their Deputy Ethics Official.
d. Impartiality in Performing Official Duties. An employee
should not participate in an official capacity in certain matters
without obtaining specific authorization if in his/her judgement,
persons with knowledge of the relevant facts would question
his/her impartiality in those matters. For example, an employee
of the Polluted Water Division is assigned to a technical
evaluation panel which reviewing a proposal from the chemical
plant where she was recently employed. A reasonable person may
question the integrity of the evaluation.
15. The Procurement Integrity Act.
a. Background. The Federal Procurement Policy Act
(41 U.S.C. 423) and implementing regulations in FAR 3.104
prohibit certain Government employees (procurement officials)
involved in a particular procurement of property or services from
soliciting or accepting, directly or indirectly, any promise of
future employment or business opportunity from, or engaging,
directly or indirectly, in any discussion of future employment or
business opportunity with, any officer, employee, representative,
agent, or consultant of any competing contractor. The
regulations also prohibit the disclosure of certain procurement
sensitive information to persons who are not authorized to
receive the information.
b. Prohibited conduct by competing contractors. During the
conduct of any Federal procurement, no competing contractor
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shall:
1) Make an offer of future employment or business
opportunity with a procurement official;
2) Offer money, a gratuity or anything of value to a
procurement official;
3) Solicit or obtain, prior to contract award, any
proprietary or source selection information.
c. Prohibited conduct by procurement officials. During the
conduct of a procurement, no procurement official shall:
1) Solicit or accept employment, money, a gratuity or
anything of value from a competing contractor;
2) Solicit, discuss or accept future employment or
a business opportunity from a competing contractor;
3) Disclose proprietary or source selection information to
persons who are not authorized to receive the
information;
Former Government employees are prohibited from assisting in
negotiations on behalf of a competing contractor leading to award
or modification of a procurement which the former employee had
worked on while employed by the Government. Also, former
employees shall not assist in contract performance for a period
of two years from the former employee's last participation in the
procurement.
d. Definitions.
(1) A "competing contractor" is an entity legally
capable of entering into a contract or subcontract. This
includes individuals, partnerships, educational institutions and
any person acting on behalf of such an entity. In the case of a
contract modification, an incumbant is a competing contractor.
(2) "During the conduct of a procurement" means the
period beginning on the earliest date upon which an identifiable,
specific action is taken for the particular procurement, such as
drafting or reviewing a statement of work or development of
procurement request. The conduct of a procurement concludes upon
the award or modification (the addition of new work or extension
only) of a particular contract.
(3) A "procurement official" is a Government employee
who has participated personally and substantially in any of the
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following activities for a particular procurement--
(a) Drafting the statement of work;
(b) Review and approval of the statement of work;
(c) Preparation or development of the procurement
request;
(d) Preparation or issuance of a solicitation;
(e) Evaluation of bids or proposals, including
source selection;
(f) Negotiation of a contract or contract
modification; or
(g) Review and approval of the contract award or
modification.
(4) "Participating personally and substantially" in a
procurement means active and significant involvement of the
individual in activities directly related to the procurement.
(If at any time you question whether you were personally and
substantially in a procurement contact the responsible
contracting officer.
e. Applicability. For procurement requests submitted to
the contracting activity to initiate contracts and modifications,
Project Officer must submit, along with the procurement rationale
checklist, copies of certifications for themselves and any other
procurement officials who will participate in pre-award
activities.
Outside consultants or contract employees who participate in
the proposal evaluation process in accordance with the EPA
Acquisition Regulation at 48 CFR 1515.413 are subject to the same
certification requirements as Agency employees. Consultants
under expert appointment are also subject to the same
certification requirements.
f. General Information on Certifications. There are three
basic certifications which are required when the contract or
modification is over $100,000.
(1) A competing contractor must certify to certain
things which are contained in the provision at 52.203-8 for
sealed bid or negotiated solicitations, at 52.203-9 for
modifications to be considered for award. Contractor employees
and representatives are required to certify only once that they
have complied with the requirements of procurement integrity.
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(2) The Contracting Officer must maintain in the
contract file all the basic certifications, along with any
additional certifications required for that particular
procurement and a record of persons authorized to have access to
proprietary or source selection information regarding the
procurement.
(3) As a condition for serving as a procurement
official, each individual must certify that he/she is familiar
with certain subsections of the Act, and will report any possible
violations of certain subsections of the Act or implementing
regulations.
g. Disclosure of Proprietary Information. All information
before award of any contract or contract modification is
considered to be highly confidential. Any unauthorized
disclosure of such information could lead to one or more
offerers' having a competitive advantage over others, which could
result in a bid protest and a ruling against the Agency, as well
as criminal and/or disciplinary action against the employee
involved. The integrity of the competitive process is entirely
dependent on the premise that all firms are on an equal footing.
In the case of a contract modification, the validity of a cost
proposal is only assured if the contractor prepares it
independently without benefit of Government estimates, knowledge
of the amount of funding available, or any pre-negotiation
positions being considered by EPA.
POs and any other program personnel privy to such
information must ensure that they do not inadvertently let slip
any advance or otherwise confidential procurement information to
current contractors or other firms who contact them, either
before, during or after contract award or a modification to a
contract. Penalties associated with disclosure can be severe.
Individual employees can be fined up to $100,000, whether EPA or
Contractor. In addition, an Agency employee who knowingly and
willfully discloses or promises to disclose any proprietary or
source selection information can be subject to criminal penalties
up to five years of imprisonment.
If any questions arise, or there are areas of which program
personnel are not sure, direct all inquiries to your Contracting
Officer. It is important to have such information come directly
from the Contracting Officer rather than the PO anyway, as this
ensures that there is a control on who receives what information.
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CHAPTER 2 - BUDGETING AND ACQUISITION PLANNING
Table of Contents
1. Introduction 2-1
2. Budgeting and Planning 2-1
3. The Budget Year 2-1
4. The Operating Plan 2-3
5. The Current Year 2-4
6. The Decision to Contract Out 2-5
7. Impact of OMB Circular A-76 2-5
8. Inherently Governmental Functions 2-5
9. Sensitive/Vulnerable Services 2-7
10. Advance Acquisition Planning 2-7
11. Annual/Program Acquisition Plans 2-9
12. Cut-Off Dates 2-9
13. Individual Acquisition Plans 2-9
14. Format for Individual Acquisition Plans 2-11
15. Procedure for Procurement Scheduling 2-14
ATTACHMENTS:
Aquisition Cycle Flowchart
Office of Federal Procurement Policy Letter 92-1
EPA Order 1900.2, Contracting at EPA
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CHAPTER 2 - BUDGETING AND ACQUISITION PLANNING
1. 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 planning and analysis.
2. Budgeting and Planning.
a. 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 (budget year),
and two years into the future (planning year).
b. The Agency starts planning each year's budget almost two
years prior to the beginning of 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.
3. The Budget Year (Outvear 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.
c. In addition to the narrative justifications, the Budget
Requests include funding levels for "intramural" costs (the costs
of supporting staff such as salaries and travel) and
"extramural" costs (contracts and grants).
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
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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 October 1. 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 (i.e.,
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 February, at the same
time the President sends the entire FY 1986 budget request to
Congress.
i. During March/April 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 summer 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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4. 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 T986 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 "reprogranunings" 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.
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5. The Current Year.
a. On October 1 of the new fiscal year, the Office of the
Comptroller downloads the operating plan to the Integrated
Financial Management System (IFMS) and contacts the Senior Budget
Officers and Regional Comptrollers to let them know funds are
available.
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 Abatement, Control and
Compliance (AC&C) 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 both administrative
and program-related, including contracts to perform laboratory
analyses of water or hazardous waste materials, or contracts to
perform environmental impact studies, janitorial services,
landscaping services, and economic consultants.
(2) 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.
(3) The following Appropriations are available until
expended:
Superfund
- LUST
- Building & Facilities
Construction Grants
- Oil Spill
Clean Water Fund
Drinking Water Fund
These are "no-year" appropriations—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.
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
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issues a revised Advice of Allowance reflecting the revised
Operating Plan.
6. The Decision to Contract Out. 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 whether the
function is inherently governmental or a commercial activity.
7. Impact of OMB Circular A-76.
a. 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.
b. 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.
Except as noted in OMB Circular A-76, commercial activities are
generally contracted.
8. Inherently Governmental Functions.
a. Definition. The Office of Federal Procurement Policy
(OFPP) policy letter 92-1, which was effective October 30, 1992,
defines an "inherently governmental function" as a function that
is so intimately related to the public interest as to mandate
performance by Government employees. These functions include
those activities that require either the exercise of discretion
in applying Government authority or the making of value
judgements in making decisions for the Government.
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b. Determining whether a function is inherently
governmental is based on the totality of the circumstances
involving consideration of a number of factors. No one factor is
determinative. Factors to be considered are listed in paragraph
7(b) of the policy letter. Every contract, delivery order, and
work assignment statement of work should be carefully reviewed to
ensure that the functions listed in Appendix A of the Policy
Letter are not contracted.
c. List of prohibited contracting activities. Based on the
EPA Order, "Contracting at EPA," the Agency will not allow any of
the following to be performed under its contracts:
(1) The actual preparation of Congressional testimony.
(2) The interviewing or hiring of individuals for
employment at EPA.
(3) Developing and/or writing of Position Descriptions
and Performance Standards.
(4) The actual determination of Agency policy.
(5) Participating as a voting member on a Performance
Evaluation Board; participating in and/or attending
Award Fee meetings.
(6) Preparing Award Fee Letters, even under typing
services contracts.
(7) The actual preparation of Award Fee Plans.
(8) The preparation of documents on EPA letterhead
other than routine administrative correspondence.
(9) Reviewing vouchers and invoices for the purposes of
determining whether costs, hours, and work
performed are reasonable.
(10) The preparation of Statements of Work, Work
Assignments, Technical Direction Documents,
Delivery Orders, or any other work issuance
document under a contract that the contractor is
performing or may perform.
(11) On behalf of EPA, actually preparing responses to
audit reports from the Inspector General, General
Accounting Office, or other auditing entities
(12) On behalf of EPA, preparing responses to
Congressional correspondence.
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(13) The actual preparation of responses to Freedom of
Information Act requests, other than routine,
non-judgmental correspondence -- in all cases, EPA
must sign it.
(14) Any contract which authorizes a contractor to
represent itself as EPA to outside parties.
(15) Conducting administrative hearings.
(16) Reviewing findings concerning the eligibility of
EPA employees for security clearances.
(17) The actual preparation of an office's official
budget request.
The OFPP Letter is attached to this chapter. Please note
EPA Order 1900.2, Contracting at EPA, also defines inherently
governmental functions. A copy of this directive is also
attached to this chapter.
9. Sensitive/Vulnerable Services. Policy Letter 92-1 defines
(a) functions which are inherently governmental and must be
performed only by Government employees and (b) functions which
may be contracted but so closely support Government employees in
their performance of inherently governmental functions that the
contract terms and performance require close scrutiny from
Federal officials. The services listed in Appendix B of the
letter require additional management controls to ensure functions
which are sensitive or vulnerable to becoming inherently
governmental functions are adequately controlled. Functions
listed in Appendix B are similar to functions which are listed in
the EPA Order 1900.2 and CMM Chapter 2 as "sensitive contracting
areas" and "contracting areas requiring special control
measures."
10. Advance Acquisition Planning.
a. Forecasting Requirements. Each Program Office is
responsible for forecasting its needs for supplies and services.
Forecasting needs helps to ensure that the resulting procurements
will support the mission of the Program Office in a timely
manner/ coincide with the preparation of budgets and availability
of budgeted funds, be accomplished in accordance with applicable
laws and regulations.
b. Advance acquisition 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 involves allowance holders, the Office of the Comptroller,
and the Office of Acquisition Management (0AM). The PO is not
expected to do this alone. In some offices/ the PO may not be
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involved until the requirement is determined. Check with your
supervisor to see how this is handled in your office.
c. 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) and is an activity that involves the initiator of
the requirement (usually later appointed as the Project Officer)
and the Contracting Officer.
d. 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.
11. Annual/Program Acquisition Plans.
a. Some Agency POs may be involved in submitting annual
acquisition plans as required by Chapter One of the CMM. These
plans are submitted to the cognizant contracting activity every
year no later than June 30. 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)
over $25,000 to be obligated during a fiscal year.
(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 are 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
($25,000,000 or more for Superfund or ADP). Chapter 1 of the
Contracts Management Manual covers the EPA Acquisition Planning
System.
12. Cut-Off Dates. OAM establishes deadline dates for
submission of specific classes of actions that must be awarded
before year end. These dates take into account the leadtime OAM
will need to award actions by September 30. Cut-off dates apply
to all actions and all program offices. All Agency Senior Budget
Officers receive a copy of this memorandum several months before
the end of the fiscal year.
13. Individual Acquisition plans.
a. For a PO, acquisition planning starts as soon as the
requirement is known. Based on historical data, talking with
other POs, or your own experiences, you will have a rough idea of
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how long it will take you to put an acceptable procurement
package together. By "acceptable procurement package" we mean a
package that contains all the necessary documentation to proceed
with the acquisition.
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.
c. How long it takes to award a contract after the
procurement package is accepted depends on the complexity and
dollar value of the requirement. For planning purposes, allow a
one year leadtime from the time you submit an acceptable
procurement request (PR) to the CO until the contract is awarded.
This means if you have a contract in place that runs for three
years, you should submit your PR for the follow-on contract
before the second year of the current contract is completed.
d. 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.
e. Involve your cognizant contracting office in acquisition
planning. By being aware of the current and future needs of
various organizations, the contracting office staff can (1) help
your office develop realistic program plans, schedules, and
budgets, and (2) recommend long-range strategies for reducing the
resources and time required for mission accomplishment.
Specifically, the contracting office can advise your office on
such matters as:
o Consolidating needs to attain economic ordering
quantities;
o The availability of sources and strategies for enhancing
competition;
o Market prices, conditions, and trends; and
o Procurement leadtimes, problems, lessons learned from
previous acquisitions for comparable requirements.
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14. Format for Individual Acquisition Plans.
a. FAR defines acquisition planning as the process by which
the efforts of all personnel responsible for an acquisition are
coordinated and integrated through a comprehensive plan for
fulfilling the agency need in a timely manner and at a reasonable
cost. It includes developing the overall strategy for managing
the acquisition.
b. In accordance with Chapter One of the Contracts
Management Manual, a formal acquisition plan is required for all
acquisitions whose estimated value is over $5,000,000. For
Superfund and ADP acquisitions, the threshold is $25,000,000. At
EPA the CO drafts the written acquisition plan; however, much of
the information contained in the plan is provided by the PO. It
is essential that the PO provide the appropriate information to
the CO in order to complete the acquisition plan. In addition to
the CO, EPA acquisition plans must be reviewed and approved by
the Chief of the Contracting Office and the Agency Competition
Advocate.
c. FAR 7.105, which defines the content of written
acquisition plans, is reproduced below for your information.
Parenthetical references to Parts and Subpart refer to the FAR.
(a) Acquisition background and objectives. (1) Statement of
need. Introduce the plan by a brief statement od need.
Summarize the technical and contractual history of the
acquisition. Discuss feasible acquisition alternatives and any
related in-house effort.
(2) Applicable conditions. State all significant conditions
affecting the acquisition, such as (i) requirements for
compatibility with existing or future systems or programs and
(ii) any known cost, schedule, and capability or performance
constraints.
(3) Cost. Set forth the established cost goals for the
acquisition and the rationale supporting them, and discuss
related cost concepts to be employed, including, as appropriate,
the following items:
(i) Life-cycle cost. Discuss how life-cycle cost will be
considered. If it is not used, explain why. If appropriate,
discuss the cost model used to develop life-cycle-cost estimates.
(ii) Design-to-cost. Describe the design-to-cost
objective(s) and underlying assumptions, including the rationale
for quantity, learning curve, and economic adjustment factors.
Describe how objectives are to be applied, tracked, and enforced.
Indicate specific related solicitation and contractual
2-10
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requirements to be imposed.
(iii) Application of should-cost. Describe the application
of should-cost analysis to the acquisition (see 15.810).
(4) Capability or performance. Specify the required
capabilities or performance characteristics of the supplies or
services being acquired and state how they are related to the
need.
(5) Delivery or performance-period requirements. Describe the
basis for establishing delivery or performance-period
requirements (see Subpart 12.1). Explain and provide reason for
any urgency if it results in concurrence of development and
production or constitutes justification for not providing for
full and open competition.
(6) Trade-offs. Discuss the expected consequences of trade-
offs among various cost, capability or performance, and schedule
goals.
(7) Risks. Discuss technical, cost, and schedule risks and
describe what efforts are planned or underway to reduce risk and
the consequences of failure to achieve goals. If concurrence of
development and production is planned, discuss its effects on
cost and schedule risks.
(8) Acquisition streamlining. If specifically designated by
the requiring agency as a program subject to acquisition
streamling, discuss plans and procedures to (i) encourage
industry participation by using draft solicitations,
presolicitation conferences, and other means of stimulating
industry involvement during design and development in
recommending the most appropriate application and tailoring of
contract requirements; (ii) select and tailor only the necessary
and cost-effective requirements; and (iii) state the timeframe
for identifying which of those specifications and standards,
originally provided for guidance only, shall become mandatory
(see 10.002(c)).
(b) Plan of action. (1) Sources. Indicate the prospective
sources of supplies and/or services that can meet the need.
Consider required sources of supplies and services (see Part 8).
Include consideration of small business, small disadvantaged
business, and labor surplus area concerns (see Parts 19 and 20).
If the acquisition or a part of it is for commercial or
commercial-type products (see Part 11), address the results of
market research and analysis and indicate their impact on the
various elements of the plan. If the acquisition or part of it
is for other than commercial or commercial-type products, address
the extent and results of the market survey conducted or the
reasons one was not or will not be conducted.
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(2) Competition. (i) Describe how competition will be sought,
promoted, and sustained throughout the course of the acquisition.
If full and open competition is not contemplated, cite the
authority in 6.302, discuss the basis for the application of that
authority, identify the source(s), and discuss why full and open
competition cannot be obtained.
(ii) Identify the major components or subsystems. Discuss
component breakout plans relative to these major components or
subsystems. Describe how competition will be sought, promoted,
and sustained for these components or subsystems.
(iii) Describe how competition will be sought, promoted,
and sustained for spares and repair parts. Identify the key
logistic milestones, such as technical data delivery schedules
and acquisition method coding conferences, that affect
competition.
(iv) When effective subcontract competition is both
feasible and desirable, describe how such subcontract competition
will be sought, promoted, and sustained throughout the course of
the acquisition. Identify any known barriers to increasing
subcontract competition and address how to overcome them.
(3) Source-selection procedures. Discuss the source-selection
procedures for the acquisition, including the timing for
submission and evaluation of proposals, and the relationship of
evaluation factors to the attainment of the acquisition
objectives (see Subpart 15.6).
(4) Contracting Considerations. For each contract
contemplated, discuss contract type selection (see Part 16); use
of multiyear contracting, options, or other special contracting
methods (see Part 17); any special clauses, special solicitation
provisions, or FAR deviations required (see Subpart 1.4); whether
equipment will be acquired by lease or purchase (see Subpart 7.4)
and why; and any other contracting considerations.
(5) Budgeting and funding. Describe how budget estimates were
derived and discuss the schedule for obtaining adequate funds at
the time when they are required (see Subpart 32.7).
(6) Product descriptions. In accordance with Part 10, explain
the choice of product description types to be used in the
acquisition.
(7) Priorities, allocations, and allotments. When urgency of
the requirement dictates a particularly short delivery or
performance schedule, certain priorities may apply. If so,
specify the method for obtaining and using priorities, allocation
and allotments, and the reasons for them (see Subpart 12.3).
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(8) Contractor versus Government performance. Address the
consideration given to OMB Circular No. A-76 (see Subpart 7.3).
(9) Management information requirements. Discuss, as
appropriate/ what management system will be used by the
Government to monitor the contractor's effort.
(10) Make or buy. Discuss any consideration given to
make-or-buy programs (See Subpart 15.7).
(11) Test and evaluation. To the extent applicable, describe
the test program of the contractor and the Government. Describe
the test program for each major phase of a major system
acquisition. In concurrence is planned, discuss the extent of
testing to be accomplished before production release.
(12) Logistics considerations. Describe--
(i) The assumptions determining contractor or agency
support, both initially and over the life of the acquisition,
including consideration of contractor or agency maintenance and
servicing (see Subpart 7.3) and distribution of commercial
products (see Part 11);
(ii) The reliability, maintainablitiy, and quality
assurance requirements, including any planned use of warranties
(see Part 46); and
(iii) The requirements for contractor data (including
repurchase data) and data rights, their estimated cost, and the
use to be made of the data (see Part 27).
(iv) Standardization concepts, including the necessity to
designate, in accordance with agency procedures, technical
equipment as "standard" so that future purchases of the equipment
can be made from the same manufacturing source.
(13) Government-furnished property. Indicate any property to
be furnished to contractors, including material and facilities,
and discuss any associated considerations, such as its
availability or the schedule for its acquisition (see Part 45).
(14) Government-furnished information. Discuss any Government
information, such as manuals/ drawings, and test data, to be
provided to prospective offerers and contractors.
(15) Environmental considerations. Discuss environmental
issues associated with the acquisition, the applicability of an
environmental assessment or environmental impact statement (see
40 CFR 1502), the proposed resolution of environmental issues,
and any environment-related requirements to be included in
solicitations and contracts.
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(16) Security considerations. For acquisitions dealing with
classified matters, discuss how adequate security will be
established, maintained, and monitored (see Subpart 4.4).
(17) Other considerations. Discuss, as applicable, energy
conservation measures, standardization concepts, the industrial
readiness program, the Defense Production Act, the Occupational
Safety and Health Act, foreign sales implications, and any other
matters germane to the plan not covered elsewhere.
(18) Milestones for the acquisition cycle. Address the
following steps and any others appropriate:
Acquisition plan approved.
Statement of work.
Specifications.
Data Requirements.
Compilation of acquisition-package preparation.
Purchase request.
Justification and approval for other than full and open
competition were applicable and/or any required D&F
approval.
Issuance of synopsis.
Issuance of solicitation.
Evaluating proposals, audits, and field reports.
Beginning and completion of negotiations.
Contract preparation, review and clearance.
Contract award.
(19) Identification of participants in acquisition plan
process. List individuals who participated in preparing the
acquisition plan, giving contact information for each.
15. Procedure for Procurement Scheduling
a. Introduction. Once the Procurement package is complete,
the Project Officer meets with the Contracting Officer (or
contract specialist) to prepare a procurement schedule. The
flowchart on page 2-15 shows some of the major events leading the
award of a contract. (The FAR requires this only for
procurements of $5 million or more.) She/he will coordinate with
the Project Officer to obtain program office and Office of
Acquisition Management approval of the projected contract award
date. The specialist maintains the plans so that occurrences are
recorded and subsequently reviewed by management.
2-14
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Planning Phase
Solicitation Phase
Award Phase
Identify Requirements
Consider Past Program Audits
> 32 Point Document
•Develop SOW
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• Contract Administration Planning
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M
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Issue Solicitations
Evaluate Technical
Proposals
• Interrogatories
• Revised
Evaluation
• Revised
TEP Report
1
Prepare TEP
Reports
Debriefing
• Review Cost
Proposals
• Competitive
Range
• Audits On
Cost Proposals
• COI
1
Selection For Award
{Documentation,
Review. Approval}
Protest
• Within EPA
• Outside EPA
• Delays Process
Negotiations
Award
I Congressional Inquiry
Protest
Debriefing
±
Post-Award Conference
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Contract Management Phase
Contract Management
Work Assignment Management
• Incremental Funding • Consent To
Subcontracts
• Review Monthly • Modifications
Reports & Invoices
• Monitor Use Of • Management
Contractor Personnel Information Systems
• Key Personnel • COI
Changes
• Claims And Appeals • CBI
Monitor
Performance
And Costs
)
Award Fee
Evaluation
1
• Develop SOW For • Technical
Work Assignment Direction
• Review Monthly • Receive
Reports And Invoices Deliverables
• Amendments • Accept
Deliverables
• Issue Work
Assignments
NJ
(
Plan For Follow-on Contract
{ 2 Years Before Expiration }
V
s
Continue With
Contractor Or
i
i )
Plan To
Replace
Contractor
1
Suspension And Debar me nl
Contract Close-out
Future Acquisition Planning
Potential Activities
Congressional
Inquiry
I
GAO. Etc.
Audits
I
FOIA
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EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON. O.C. 20503
OFFICE OF FEDERAL September 23, 1992
PROCUREMENT POLICY
Policy Letter 92-1
TO THE HEADS OF EXECUTIVE DEPARTMENTS AMD ESTABLISHMENTS
SUBJECT: Inherently Governmental Functions.
1. Purpose. This policy letter establishes Executive Branch
policy relating to service contracting and inherently
governmental functions. Its purpose is to assist Executive
Branch officers and employees in avoiding an unacceptable
transfer of official responsibility to Government contractors.
2. Authority. This policy letter is issued pursuant to
subsection 6(a) of the Office of Federal Procurement Policy
(OFPP) Act, as amended, codified at 41 U.S.C. S 405(a).
3. Exclusions. Services obtained by personnel appointments and
advisory committees are not covered by this policy letter.
4. Background. Contractors, when properly used, provide a wide
variety of useful services that play an important part in helping
agencies to accomplish their missions. Agencies use service
contracts to acquire special knowledge and skills not available
in the Government, obtain cost effective services, or obtain
temporary or intermittent services, among other reasons.
Not all functions may be performed by contractors, however.
Just as it is clear that certain functions, such as the command
of combat troops, may not be contracted, it is also clear that
other functions, such as building maintenance and food services,
may be contracted. The difficulty is in determining which of
these services that fall between these extremes may be acquired
by contract. Agencies have occasionally relied on contractors to
perform certain functions in such a way as to raise questions
about whether Government policy is being created by private
persons. Also, from time to time questions have arisen regarding
the extent to which de facto control over contract performance
has been transferred to contractors. This policy letter provides
an illustrative list of functions, that are, as a matter of
policy, inherently governmental (see Appendix A), and articulates
the practical and policy considerations that underlie such
determinations (see § 7}.
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As stated in § 9, however, this policy letter does not
purport to specify which functions are, as a legal matter,
inherently governmental, or to define the factors used in making
such legal determination. Thus, the fact that a function is
listed in Appendix A, or a factor is set forth in S 7(b), does
not necessarily mean that the function is inherently governmental
as a legal matter or that the factor would be relevant in making
the legal determination.
5. pefinition. As a matter of policy, an "inherently
governmental function" is a function that is so intimately
related to the public interest as to mandate performance by
Government employees. These functions include those activities
that require either the exercise of discretion in applying
Government authority or the making of value judgements in making
decisions for the Government. Governmental functions normally
fall into two categories: (1) the act of governing, i.e., the
discretionary exercise of Government authority, and (2) monetary
transactions and entitlements.
An inherently governmental function involves, among other
things, the interpretation and execution of the laws of the
United States so as to:
(a) bind the United States to take or not to take some
action by contract, policy, regulation, authorization, order, or
otherwise;
(b) determine, protect, and advance its economic, political,
territorial, property, or other interests by military or
diplomatic action, civil or criminal judicial proceedings,
contract management, or otherwise;
(c) significantly affect the life, liberty, or property of
private persons;
(d) commission, appoint, direct, or control officers or
employees of the United States; or
(e) exert ultimate control over the acquisition, use, or
disposition of the property, real or personal, tangible or
intangible, of the United States, including the collection,
control, or disbursement of appropriated and other Federal funds.
Inherently governmental functions do not normally include
gathering information for or providing advice, opinions,
recommendations, or ideas to Government officials. They also do
not include functions that are primarily ministerial and internal
in nature, such as building security; mail operations; operation
of cafeterias; housekeeping; facilities operations and
maintenance, warehouse operations, motor vehicle fleet management
and operations, or other routine electrical or mechanical
services.
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The detailed list of examples of commercial activities found
as an attachment to Office of Management and Budget (OMB) Cir.
No. A-76 is an authoritative, nonexclusive list of functions that
are not inherently governmental functions. These functions
therefore may be contracted.
6. Policy.
(a) Accountability. It is the policy of the Executive
Branch to ensure that Government action is taken as a result of
informed, independent judgments made by Government officials who
are ultimately accountable to the President. When the Government
uses service contracts, such informed, independent judgment is
ensured by:
(1) prohibiting the use of service contracts for the
performance of inherently governmental functions (See Appendix
A);
(2) providing greater scrutiny and an appropriate
enhanced degree of management oversight (see subsection 7(f))
when contracting for functions that are not inherently
governmental but closely support the performance of inherently
governmental functions (see Appendix B);
(3) ensuring, in using the products of those contracts,
that any final agency action complies with the laws and policies
of the United States and reflects the independent conclusions of
agency officials and not those of contractors who may have
interests that are not in concert with the public interest, and
who may be beyond the reach of management controls otherwise
applicable to public employees; and
(4) ensuring that reasonable identification of
contractors and contractor work products is made whenever there
is a risk that the public, Congress, or other persons outside of
the Government might confuse them with Government officials or
with Government work products, respectively.
(b) OMB Circular No. A-76. This policy letter does not
purport to supersede or otherwise effect any change in OMB
Circular No. A-76, Performance of Commercial Activities.
(c) Drafting of Congressional testimony, responses to
Congressional correspondence, and aaencv responses to audit
reports from an Inspector General, the General Accounting Office.
or other Federal audit entity. While the approval of a
Government document is an inherently governmental function, its
drafting is not necessarily such a function. Accordingly, in
most situations the drafting of a document, or portions thereof,
may be contracted, and the agency should review and revise the
draft document, to the extent necessary, to ensure that the final
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document expresses the agency's views and advances the public
interest. However, even though the drafting function is not
necessarily an inherently governmental function, it may be
inappropriate, for various reasons, for a private party to draft
a document in particular circumstances. Because of the
appearance of private influence with respect to documents that
are prepared for Congress or for law enforcement or oversight
agencies and that may be particularly sensitive, contractors are
not to be used for the drafting of Congressional testimony;
responses to Congressional correspondence; or agency responses to
audit reports from an Inspector General, the General Accounting
Office, or other Federal audit entity.
7. Guidelines. If a function proposed for contract performance
is not found in Appendix A, the following guidelines will assist
agencies in understanding the application of this policy letter,
determining whether the function is, as a matter of policy,
inherently governmental and forestalling potential problems.
(a) The exercise of discretion. While inherently
governmental functions necessarily involve the exercise of
substantial discretion, not every exercise of discretion is
evidence that such a function is involved. Rather, the use of
discretion must have the effect of committing the Federal
Government to a course of action when two or more alternative
courses of action exist (e.g., purchasing a minicomputer rather
than a mainframe computer, hiring a statistician rather than an
economist, supporting proposed legislation rather than opposing
it, devoting more resources to prosecuting one type of criminal
case than another, awarding a contract to one firm rather than
another, adopting one policy rather than another, and so forth).
A contract nay thus properly be awarded where the contractor
does not have the authority to decide on the course of action to
be pursued but is rather tasked to develop options to inform an
agency decision maker, or to develop or expand decisions already
made by Federal officials. Moreover, the mere fact that
decisions are made by the contractor in performing his or her
duties (e.g., how to allocate the contractor's own or subcontract
resources, what techniques and procedures to employ, whether and
whom to consult, what research alternatives to explore given the
scope of the contract, what conclusions to emphasize, how
frequently to test) is not determinative of whether he or she is
performing an inherently governmental function.
(b) Totality of the circumstances. Determining whether a
function is an inherently governmental function often is
difficult and depends upon an analysis of the facts of the case.
Such analysis involves consideration of a number of factors, and
the presence or absence of any one is not in itself determinative
of the issue. Nor will the same emphasis necessarily be placed
on any one factor at different times, due to the changing nature
of the Government's requirements.
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The following factors should be considered when deciding
whether award of a contract might effect, or the performance of a
contract has effected, a transfer of official responsibility:
(1) Congressional legislative restrictions or
authorizations.
(2) The degree to which official discretion is or would
be limited, i.e., whether the contractor's involvement in agency
functions is or would be so extensive or his or her work product
is so far advanced toward completion that the agency's ability to
develop and consider options other than those provided by the
contractor is restricted.
(3) In claims adjudication and related services,
(i) the finality of any contractor's action
affecting individual claimants or applicants,
and whether or not review of the contractor's
action is de novo (i.e., to be effected
without the appellate body's being bound by
prior legal rulings or factual
determinations) on appeal of his or her
decision to an agency official;
(ii) the degree to which contractor activities may
involve wide-ranging interpretations of
complex, ambiguous case law and other legal
authorities, as opposed to being
circumscribed by detailed laws, regulations,
and procedures;
(iii) the degree to which matters for decision by
the contractor involve recurring fact
patterns or unique fact patterns; and
(iv) The contractor's discretion to determine an
appropriate award or penalty.
(4) The contractor's ability to take action that will
significantly and directly affect the life, liberty, or property
of individual members of the public, including the likelihood of
the contractor's need to resort to force in support of a police
or judicial function; whether force, especially deadly force, is
more likely to be initiated by the contractor or by some other
person; and the degree to which force may have to be exercised in
public or relatively uncontrolled areas. (Note that contracting
for guard, convoy security, and plant protection services, armed
or unarmed, is not proscribed by these policies.)
(5) The availability of special agency authorities and
the appropriateness of their application to the situation at
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hand, such as the power to deputize private persons.
(6) Whether the function in question is already being
performed by private persons, and the circumstances under which
it is being performed by them.
(c) Finality of agency determinations. Whether or not a
function is an inherently governmental function, for purposes of
this policy letter, is a matter for agency determination.
However, agency decisions that a function is or is not an
inherently governmental function may be reviewed, and, if
necessary, modified by appropriate OMB officials.
(d) Preaward responsibilities. Whether a function being
considered for performance by contract is an inherently
governmental function is an issue to be addressed prior to
issuance of the solicitation.
(e) Post-award responsibilities. After award, even when a
contract does not involve performance of an inherently
governmental function, agencies must take steps to protect the
public interest by playing an active, informed role in contract
administration. This ensures that contractors comply with the
terms of the contract and that Government policies, rather than
private ones, are implemented. Such participation should be
appropriate to the nature of the contract, and should leave no
doubt that the contract is under the control of Government
officials. This does not relieve contractors of their
performance responsibilities under the contract. Nor does this
responsibility to administer the contract require Government
officials to exercise such control over contractor activities as
to convert the contract, or portion thereof, to a personal
service contract.
In deciding whether Government officials have lost or might
lose control of the administration of a contract, the following
are relevant considerations: the degree to which agencies have
effective management procedures and policies that enable
meaningful oversight of contractor performance, the resources
available for such oversight, the actual practice of the agency
regarding oversight, the duration of the contract, and the
complexity of the tasks to be performed.
(f) Management controls. When functions described in
Appendix B are involved, additional management attention to the
terms of the contract and the manner of performance is necessary,
How close the scrutiny or how extensive or stringent the
management controls need to be is for agencies to determine.
Examples of additional control measures that might be employed
are:
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(!) developing carefully crafted statements of work and
quality assurance plans, as described in OFPP Policy Letter 91-2,
Service Contracting, that focus on the issue of Government
oversight and measurement of contractor performance;
(2) establishing audit plans for periodic review of
contracts by Government auditors;
(3) conducting preaward conflict of interest reviews to
ensure contract performance in accordance with objective
standards and contract specifications;
(4) physically separating contractor personnel from
Government personnel at the worksite; and
(5) requiring contractors to (a) submit reports that
contain recommendations and that explain and rank policy or
action alternatives, if any, (b) describe what procedures they
used to arrive at their recommendations,
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(i) Exercise of approving or signature authority. Official
responsibility to approve the work of contractors is a power
reserved to Government officials. It should be exercised with a
thorough knowledge and understanding of the contents of documents
submitted by contractors and a recognition of the need to apply
independent judgment in the use of these work products.
8. Responsibilities.
(a) Heads of agencies. Heads of departments and agencies
are responsible for implementing this policy letter. While these
policies must be implemented in the Federal Acquisition
Regulation (FAR), it is expected that agencies will take all
appropriate actions in the interim to develop implementation
strategies and initiate staff training to ensure effective
implementation of these policies.
(b) Federal Acquisition Regulatory Council. Pursuant to
subsections 6(a) and 25 (f) of the OFPP Act, as amended, 41 U.S.C.
SS 405(a) and 421(f), the Federal Acquisition Regulatory Council
shall ensure that the policies established herein are
incorporated in the FAR within 210 days from the date this policy
letter is published in the Federal Register. Issuance of final
regulations within this 210-day period shall be considered
issuance "in a timely manner" as prescribed in 41 U.S.C.
§ 405(b).
(c) Contracting officers. When requirements are developed,
when solicitations are drafted, and when contracts are being
performed, contracting officers are to ensure:
(1) that functions to be contracted are not among those
listed in Appendix A of this letter and do not closely resemble
any functions listed there;
(2) that functions to be contracted that are not listed
in Appendix A, and that do not closely resemble them, are not
inherently governmental functions according to the totality of
the circumstances test in subsection 7(b), above;
(3) that the terms and the manner of performance of any
contract involving functions listed in Appendix B of this letter
are subject to adequate scrutiny and oversight in accordance with
subsection 7(f), above; and
(4) that all other contractible functions are properly
managed in accordance with subsection 7(e), above.
(d) All officials. When they are aware that contractor
advice, opinions, recommendations, ideas, reports, analyses, and
other work products are to be considered in the course of their
official duties, all Federal Government officials are to ensure
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that they exercise independent judgment and critically examine
these products.
9. Judicial review. This policy letter is not intended to
provide a constitutional or statutory interpretation of any kind
and it is not intended, and should not be construed, to create
any right or benefit, substantive or procedural, enforceable at
law by a party against the United States, its agencies, its
officers, or any person. It is intended only to provide policy
guidance to agencies in the exercise of their discretion
concerning Federal contracting. Thus, this policy letter is not
intended, and should not be construed, to create any substantive
or procedural basis on which to challenge any agency action or
inaction on the ground that such action or inaction was not in
accordance with this policy letter.
10. Information contact. For information regarding this policy
letter contact Richard A. Ong, Deputy Associate Administrator,
the Office of Federal Procurement Policy, 725 17th Street, N.W.,
Washington, DC 20503. Telephone (202)395-7209.
11. Effective date. This policy letter is effective 30 days
after the date of publication.
ALLAN V. BURMAN
Administrator
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APPENDIX A
ii
The following is an illustrative list of functions
considered to be inherently governmental functions:1
1. The direct conduct of criminal investigations.
2. The control of prosecutions and performance of adjudicatory
functions (other than those relating to arbitration or other
methods of alternative dispute resolution).
3. The command of military forces, especially the leadership of
military personnel who are members of the combat, combat support
or combat service support role.
4. The conduct of foreign relations and the determination of
foreign policy.
5. The determination of agency policy, such as determining the
content and application of regulations, among other things.
6. The determination of Federal program priorities or budget
requests.
7. The direction and control of Federal employees.
8. The direction and control of intelligence and counter-
inte11igence operations.
9. The selection or nonselection of individuals for Federal
Government employment.
10. The approval of position descriptions and performance
standards for Federal employees.
11. The determination of what Government property is to be
disposed of and on what terms (although an agency may give
contractors authority to dispose of property at prices within
specified ranges and subject to other reasonable conditions
deemed appropriate by the agency).
1 With respect to the actual drafting of Congressional testimony, of
responses to Congressional correspondence, and of agency responses to audit
reports from an Inspector General, the General Accounting Office, or other
Federal audit entity, see special provisions in subsection 6(c) of the text of
the policy letter.
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12. In Federal procurement activities with respect to prime
contracts,
(a) determining what supplies or services are to be
acquired by the Government (although an agency may give
contractors authority to acquire supplies at prices within
specified ranges and subject to other reasonable conditions
deemed appropriate by the agency);
(b) participating as a voting member on any source
selection boards;
(c) approval of any contractual documents, to include
documents defining requirements, incentive plans, and evaluation
criteria;
(d) awarding contracts;
(e) administering contracts (including ordering changes in
contract performance or contract quantities, taking action based
on evaluations of contractor performance, and accepting or
rejecting contractor products or services);
(f) terminating contracts; and
(g) determining whether contract costs are reasonable,
allocable, and allowable.
13. The approval of agency responses to Freedom of Information
Act requests (other than routine responses that, because of
statute, regulation, or agency policy, do not require the
exercise of judgment in determining whether documents are to be
released or withheld), and the approval of agency responses to
the administrative appeals of denials of Freedom of Information
Act requests.
14. The conduct of administrative hearings to determine the
eligibility of any person for a security clearance, or involving
actions that affect matters of personal reputation or eligibility
to participate in Government programs.
15. The approval of Federal licensing actions and inspections.
16. The determination of budget policy, guidance, and strategy.
17. The collection, control, and disbursement of fees,
royalties, duties, fines, taxes and other public funds, unless
authorized by statute, such as title 31 U.S.C. S 952 (relating to
private collection contractors) and title 31 U.S.C. S 3718
(relating to private attorney collection services), but not
including:
(a) collection of fees, fines, penalties, costs or other
charges from visitors to or patrons of mess halls, post or base
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exchange concessions, national parks, and similar entities or
activities, or from other persons, where the amount to be
collected is easily calculated or predetermined and the funds
collected can be easily controlled using standard cash management
techniques, and
(b) routine voucher and invoice examination.
18. The control of the treasury accounts.
19. The administration of public trusts.
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APPENDIX B
The following list is of services and actions that are not
considered to be inherently governmental functions. However,
they may approach being in that category because of the way in
which the contractor performs the contract or the manner in which
the Government administers contractor performance. When
contracting for such services and actions, agencies should be
fully aware of the terms of the contract, contractor performance,
and contract administration to ensure that appropriate agency
control is preserved.
This is an illustrative listing, and is not intended to
promote or discourage the use of the following types of
contractor services:
1. Services that involve or relate to budget preparation,
including workload modeling, fact finding, efficiency studies,
and should-cost analyses, etc.
2. Services that involve or relate to reorganization and
planning activities.
3. Services that involve or relate to analyses, feasibility
studies, and strategy options to be used by agency personnel in
developing policy.
4. Services that involve or relate to the development of
regulations.
5. Services that involve or relate to the evaluation of another
contractor's performance.
6. Services in support of acquisition planning.
7. Contractors' providing assistance in contract management
(such as where the contractor might influence official
evaluations of other contractors).
8. Contractors' providing technical evaluation of contract
proposals.
9. Contractors' providing assistance in the development of
statements of work.
10. Contractors' providing support in preparing responses to
Freedom of Information Act requests.
11. Contractors' working in any situation that permits or might
permit them to gain access to confidential business information
and/or any other sensitive information (other than situations
covered by the Defense Industrial Security Program described in
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FAR 4.402(b)).
12. Contractors' providing information regarding agency policies
or regulations, such as attending conferences on behalf of an
agency, conducting community relations campaigns, or conducting
agency training courses.
13. Contractors' participating in any situation where it might
be assumed that they are agency employees or representatives.
14. Contractors' participating as technical advisors to a source
selection board or participating as voting or nonvoting members
of a source evaluation board.
15. Contractors' serving as arbitrators or providing alternative
methods of dispute resolution.
16. Contractors' constructing buildings or structures intended
to be secure from electronic eavesdropping or other penetration
by foreign governments.
17. Contractors' providing inspection services.
18. Contractors' providing legal advice and interpretations of
regulations and statutes to Government officials.
19. Contractors' providing special non-law enforcement, security
activities that do not directly involve criminal investigations,
such as prisoner detention or transport and non-military national
security details.
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OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
AGENCY: Office of Management and Budget, Executive Office of the
President, Office of Federal Procurement Policy.
ACTION: Policy Letter on Inherently Governmental Functions.
SUMMARY: The Office of Federal Procurement Policy (OFPP)
publishes today the final version of a policy letter providing
guidance to Executive Departments and agencies on (1) what
functions are inherently governmental functions that must only be
performed by Government officers and employees and (2) what
contractible functions so closely support Government officers and
employees in their performance of inherently governmental
functions that the terms and performance of those contracts
require closer scrutiny from Federal officials. This policy
letter has been developed because executive agencies, members of
Congress, the General Accounting Office, and the public have from
time to time either requested guidance regarding, or inquired
about, the propriety of awarding contracts for certain types of
functions or administering contracts in certain ways. Previous
guidance on this issue has also not been as detailed as that
which we now provide.
POP FURTHER INFORMATION CONTACT: Richard A. Ong, Deputy
Associate Administrator, Office of Federal Procurement Policy,
725 17th Street, NW — Suite 9001, Washington, DC 20503
(202)395-7209. To obtain a copy of this policy letter, please
call OMB's Publications Office at (202)395-7332.
SUPPLEMENTARY INFORMATION:
Comments received. We received 34 comments in response to
our proposed policy letter published in the Federal Register on
December 16, 1991 (56 Fed. Reg. 65279): eight from industry or
trade groups, four from private individuals, two from employee
organizations, one from a Federally funded research and
development center, and 19 from Government agencies.
1. Purpose of the policy letter. This policy letter on
inherently governmental functions is being published to provide
guidance on what kinds of functions, as a matter of policy, must
be performed by officials of the Executive Branch of the United
States and what kinds of functions may be performed by private
persons under contract with the Federal Government.
Previous guidance on these matters that has been available to
the Executive Branch has not been detailed and sometimes Federal
agencies have permitted contractors to perform functions that
should be performed by Government personnel. We now provide more
detailed guidance.
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2. Relationship of policy letter to other OFPP publications on
service contracting. This policy letter is also one of several
that the Office of Federal Procurement Policy (OFPP) has
published recently that have focused on some aspect of service
contracting in the Federal Government. At this time, OFPP has
determined it is best to deal with individual aspects of service
contracting rather than trying to publish comprehensive guidance
in one document. We will consider collecting all of the guidance
on service contracts in one document in the future.
Thus, we do not cover in detail in this policy letter such
matters as cost effectiveness of contracting for services,
conflicts of interest of service contractors, and management of
service contracts. These issues are dealt with in OMB Circular
No. A-76, Performance of Commercial Activities, August 4, 1983
(under revision); OFPP Policy Letter 89-1, Conflict of interest
Policies Applicable to Consultants, 54 Fed. Reg. 51,805 (December
18, 1989); OFPP Memorandum for Agency Senior Procurement
Executives, Government-Wide Guidance on Contract Administration
(March 15, 1991); OFPP Policy Letter. 91-2, Service Contracting,
56 Fed. Reg. 15110 (April 15, 1991); proposed OFPP Policy Letter
91- , Past Performance Information, 56 Fed. Reg. 63988
(December 6, 1991); and proposed OFPP Policy Letter 92- ,
Management of Service Contracting, 56 Fed. Reg. 66091 (December
20, 1991).
3. Relationship to OMB Circular No. A-76. One commenter asked
that we make clear our apparent intent to clarify rather than
alter the guidance originally found in OMB Circular No. A-76 on
inherently governmental functions. That is our intent. No
fundamental change is intended.
We have altered the form of the original Circular A-76
definition of an inherently governmental function in the interest
of clarity. Specific examples cited in the original A-76
definition have been incorporated into Appendix A and a list of
the general principles underlying the selection of the functions
listed in that appendix has been added in their stead.
The terms "function" and "activity" as used in this policy
letter and Circular A-76, respectively, are interchangeable.
The same commenter above suggested that we add a new Appendix
C, containing a nonexclusive list of functions that are
commercial activities that should be contracted. We have not
adopted this suggestion because the scheme proposed is the same
one we have implicitly adopted. The proposed Appendix C is
nothing more than the list of examples of commercial activities
found as an Attachment to Circular A-76. We do not believe it is
necessary to incorporate that A-76 attachment in this policy
letter. The fact that we have not provided this Appendix C thus
should not be construed as narrowing the scope of functions that
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have been contracted in the past. Nonetheless, we have added
language to § 5 to clarify the relationship between Circular A-76
and this policy letter on this point.
Another commenter stated that the relationship between this
policy letter and Circular A-76 is unclear. This policy letter
is to be the exclusive source of guidance on what constitutes, as
a matter of policy, an inherently governmental function.
4. Libraries. Several persons questioned the inclusion of
library operations as a ministerial function that should be
contracted out in subsection 7(a) of the December version of the
policy letter. The fact that employees render professional
services in performing a function does not mean that the function
in question is necessarily inherently governmental. In fact, the
Government frequently seeks out contract services precisely
because of the level of sophistication required to perform a
particular function. On the other hand, agencies may determine
that aspects of their library operations, such as handling
certain types of information in certain circumstances, involve
performance of an inherently governmental function. Therefore,
we have removed the reference to libraries.
5. Contract audits for inspectors general. One commenter
suggested that Federal inspector general (IG) work should be done
by using Government resources, with exceptions justified on a
case-by-case basis, unless specific technical expertise is needed
temporarily and is not available within the Government. This
suggestion was not adopted because (1) Congress has specifically
authorized the use of contract auditors in J 6(a)(9) of the
Inspector General Act codified at 5 U.S.C. App. 3, and (2)
financial and compliance audit activities are not considered
inherently governmental functions.
Another commenter questioned whether subsection 12(g) of
Appendix A pertaining to the determination of whether contract
costs are reasonable, allocable, and allowable proscribes the use
of contract audit services. It does not. The decision on what
costs are reasonable, allocable, and allowable is ultimately a
Government decision, but that decision may be based on
recommendations made by contract auditors. Certified public
accountants, for example, only render "opinions" and contracts
sometimes provide that audit reports are advisory only.
Moreover, the use of contract auditors has been authorized by
Congress, as noted above.
6. Aaencv determinations. One commenter interpreted the policy
letter as authorizing Federal managers to make a final
determination on whether a function is an inherently governmental
function, under this policy letter, without such determination's
being subject to being overturned by the Office of Management and
Budget (OMB) or being subject to a cost comparison study under
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Circular A-76. In general, agencies are expected to make their
own determinations, subject to oversight by OMB. Language has
been added to subsection 7(c) to clarify this point.
7. Aoencv discretion. One commenter questioned the need for the
language in former subsection 7(e) regarding agency discretion to
award nonpersonal service contracts. We agree it is unnecessary.
It is already clear that awarding a contract is an agency
responsibility.
8. Incorporation in OMB Circular No. A-76. other documents.
Several commenters suggested that the policy letter be
incorporated in Circular A-76, "Commercial Activities," currently
being revised. We did not incorporate this suggestion because A-
76 is already a lengthy document. Also, contracting for
inherently governmental functions is indeed a consideration in
contracting out, but it is not unique to the A-76 program. All
Federal officials who contract for nonpersonal services must
consider the problem of inherently governmental functions, and we
thus believe separate guidance applicable to all such
contracting, not just to nonpersonal service contracting in the
A-76 context, is the better alternative. Other commenters urged
that the policy letter be combined with one or more other OFPP
policy letters, such as those on conflict of interest, service
contracting, and past performance and published in a form other
than a policy letter. This suggestion has merit but we believe
it best to try to deal with discrete portions of service
contracting rather than to try to deal with all facets of a
complex problem at once, as discussed in point 2, above.
9. Agency discretion regarding resource allocation. One
commenter suggested we should address the issues of the future
balance between official and contractor workforce in the
performance of "basic governmental work," the specific expertise
needed to manage the contractor workforce now or in the future,
where this expertise should be located, and the way in which it
can be maintained. We believe this is a matter for agencies
themselves to determine, given their knowledge of their mission,
their resources, the kinds of services they wish to contract, and
the size of their service contracting effort. We merely
highlight the problem of lack of oversight as a loss of
Government control and require agencies to be aware of their
existing oversight responsibilities. They are, however, to use
their own discretion to figure out how to manage their contracts.
10. Evaluation of proposals. One commenter believes there is an
apparent conflict between former subsection 14(b) in Appendix A
and S 8 of Appendix B. There is no conflict as new subsection
12(b) refers to participation as a voting member on source
selection boards only.
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11. Appendix B controls. The same commenter also suggested that
Appendix B should contain a discussion of possible controls that
the Government should employ to prevent the functions listed
there from being perceived as inherently governmental function.
We do not believe this is necessary, as any function that is in
Appendix B is by definition not an inherently governmental
function.
12. Applicability to nonpersonal services. Three conunenters
questioned why the policy letter applies only to nonpersonal
service contracts. Upon consideration, we have accordingly
deleted the definition of "service contract" in § 5. No useful
purpose is served by defining "personal services" differently
from the FAR and no harm arises from having the policy letter
apply to the minimal number of true personal service contracts.
Personal service contracts that are really personnel appointments
are excluded from the coverage of the policy letter. Thus, FAR
37.102(b) need not be amended as a result of this policy letter.
13. Subcontractors. Commenters questioned whether subsection
12(d) of Appendix A should apply to subcontractors. It does not
and clarifying language has been added.
14. Supplies or services purchased by prime contractors. Some
commenters questioned the apparent effect of subsection 12 in
Appendix A of preventing contractors from buying supplies and
services for their own account. It is not the intent of this
policy letter to prevent contractor mess halls from buying food
to be prepared for military personnel. Nor does it affect what
or how contractors buy to be incorporated into supplies or
services to be delivered to the Government. Similarly,
contractors may purchase supplies or services for the Government
while acting within reasonable Government guidelines. Section 12
is only meant to address the Government's direct acquisition of
supplies or services.
15. independent judgement. The emphasis placed on independent
judgement by this policy letter does not preclude the wholesale
adoption of contractor advice, opinions, recommendations, ideas,
or conclusions. They merely may not be adopted, in whole or in
part, without officials' first exercising independent judgement.
16. Duties of contracting officers. We have added language to
$ 8 to spell out the analytical steps to be followed by
contracting officers seeking to comply with this policy letter.
17. Risk of injury to the public. One commenter stated that the
definition of an inherently governmental function does not
clearly address the danger to the public interest when a function
is contracted out and the public is at risk if contractors, such
as fire fighters or military support contractors, fail or refuse
to act in time of crisis. The risk of injury to the public is an
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important consideration. We believe, however, that f 7(b)(5)
appropriately identifies this point as a consideration in
determining whether a function is, as a matter of policy, an
inherently governmental function. The decision to include
several of the functions listed in Appendix A reflects an
underlying concern for this risk.
18. Binding nature of decisions. This same commenter noted that
it is an overstatement to say that the use of discretion
(referred to in what is now subsection 7(a) of the policy letter)
must have the effect of committing the Government to a course of
action. This is because a scientific consulting firm, for
example, could submit a study that would have a tremendous impact
on regulations or other agency actions but would not necessary
lead to a commitment to a course of action.
We have addressed the element of discretion in subsection
7(a) to convey the idea that the mere existence of the element of
discretion is not determinative of whether, as a matter of
policy, an inherently governmental function is involved.
Moreover, it is useful to observe that a study that has a
tremendous impact is not per se a bad thing. A study may have
that effect because of its great merit. We should be concerned,
however, when a study is allowed to proceed to the point where
alternative views, solutions, research, or conclusions, and so
forth, cannot realistically be included or taken into account.
In this case, the contractor has in effect made all important
decisions. Section 7(b)(3) addresses this issue.
19. Federally funded research and development centers (FFRDCsl.
One commenter stated that while profit-making contractors can
perform functions listed in Appendix B, the policy letter should
cross-reference FAR 35.017 pertaining to FFRDCs and "recognize
that FFRDCs are an equally viable source of expertise requiring
less rigorous oversight." We have not adopted this suggestion.
We do not agree that FFRDCs necessarily require less oversight.
We do recognize, however, that they are dealt with in detail in
FAR Part 35 and that its provisions may suffice to enable
satisfactory agency oversight of FFRDCs. Whether fewer or
additional control measures are necessary to ensure agency
control over FFRDCs is a matter for agencies to decide in the
circumstances of each case.
20. Architect-engineer evaluation boards. This same commenter
questioned whether S 3, which states that services obtained by
personnel appointments and advisory committees are not covered by
this policy letter, could be construed to prohibit private
individuals appointed to architect-engineer source evaluation
boards in accordance with FAR 36.602 from voting. To the extent
such boards are advisory committees, the policy letter is not
applicable to them. If they are not, the commenter makes an
excellent point. FAR 36.602-4 makes clear that the agency is to
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make the final selection and FAR 36.602-3(d) provides for the
evaluation board to set out in its report the considerations upon
which its recommendations were based. This is an acceptable
mechanism and we have accordingly revised subsection 12(b) of
Appendix A and § 14 of Appendix B to make clear that it is
selection of sources that is the most sensitive function.
Contractor activities that result in recommendations and that
explain how those recommendations were arrived at adequately
preserve agency options. A related change has been made in
subsection 7(f) stating that requiring contractors to explain how
they arrived at their recommendations is another available
control measure.
21. Factors to consider in totality of the circumstances.
(a) Complexity and oversight. One commenter questioned the
inclusion of f 7(d)(2) of the proposed policy letter relating to
the complexity of the task to be performed. Upon consideration,
we conclude that complexity is better considered in conjunction
with the provision that was at 7(d)(l2) relating to oversight
procedures, resources, and practices. We have amended paragraph
12 accordingly and moved it, as well as the provision in former fl
7(d)(4) relating to the duration of the contract, to new
subsection 7(e), Post-award responsibilities. This was done to
remove questions relating to contract oversight from the
"totality of the circumstances" test. It is important to
understand that, if an agency has inadequate oversight procedures
or poor oversight practices, the underlying function of any
agency contract affected by these deficiencies is not thereby
transformed into an inherently governmental function. As the
totality test focuses on the nature of the function in question
and as there can be a transfer of oversight responsibility even
if the underlying function is contractible, the issue of de facto
transfer of control should therefore be dealt with elsewhere.
(Note that a transfer of contract management responsibility to
the contractor is explicitly not permitted by Appendix A,
subsection 12(e).)
(b) Ultimate user of contractor work product. Several
commenters questioned the inclusion of this factor at J 7(d)(3)
of the proposed policy letter. We agree it should be taken out.
Who will use the contractor's work product is important and this
has bearing on how much management attention to give to the
contract, but it doesn't say anything about the nature of the
underlying function or the adequacy of agency contract
administration.
(c) Review of contractor action. The same commenter
questions the advisability of including a factor (new 5 7(b)(5))
that relates to the finality of any contractor's adjudication of
any claim and the type of agency review of contractor
adjudications. We see no problem with agencies' providing for
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contractor adjudication of claims so long as citizens know that
they have a right of recourse to agency decisionmakers if they
are dissatisfied with the decision of the contractor. (Note,
however, that certain kinds of hearings may still not be
conducted by contractors, e.g., hearings to determine the
eligibility of any person for a security clearance, or hearings
involving actions that affect matters of personal reputation or
eligibility to participate in Government programs. See Appendix
A, S 14.)
Thus, we distinguish between, on the one hand, holding
hearings and making recommendations and, on the other, retaining
the authority to issue the final adjudicatory decision.
Contractors may perform the former functions so long as there is
adequate oversight, agencies retain the authority to issue the
final decision, and the public has a right to insist that the
agency make the final decision, if it so desires. This is easier
to understand if one views the contractor's action as more of an
advisory action than one that binds the claimant with only
limited opportunities to change the result before the agency.
Note that in the absence of an appeal by a claimant, the agency
need not rule on each contractor decision or ruling. It should,
of course, inspect or sample contractor decisions or rulings from
time to time to ensure that contractors comply with agency
guidelines and procedures.
(d) Limiting or extinguishing discretion. The same
commenter noted that our speaking in terms of contractor limiting
or extinguishing discretion in former 5 7(d)(5) could mistakenly
create the impression that some of the Government's authority can
be exercised by a contractor. The policy letter attempts to
clarify this issue at subsection 7(a).
(e) Public perception. Several commenters questioned the
inclusion of this factor at ^ 7(d)(ll) of the proposed policy
letter, believing that public perception is too ambiguous a
concept. We agree. A function can probably be analyzed in the
light of other factors listed without the need to resort to the
concept of perceptions. Appendix A of the policy letter is
itself an up-to-date listing that already takes into account the
factor of public perceptions. The paragraph has been deleted.
(f) Laws applicable to the Civil Service. Several
commenters questioned the inclusion of this factor at f 7(d)(13)
of the proposed policy letter. We agree and have deleted this
factor. The considerations listed may be relevant to what good
contract management should require by way of contract conditions/
but they don't say anything about the nature of the function or
the adequacy of agency contract administration practices.
(g) Record keeping requirement. One commenter found the
meaning of paragraph 7(d)(15) of the proposed policy letter
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unclear. This factor was included to cover situations such as a
contractor's providing aircraft-related training. If the
contractor proves to be incompetent or negligent, the fact that
the contractor did maintain or was required to maintain records
of who was trained permits corrective action to be taken, such as
locating improperly trained students and requiring retraining.
If records are not maintained, the Government cannot exercise
ultimate control because it cannot correct any errors.
Nonetheless, the provision appears to have only limited
application and has been deleted.
22. Collection of fees. Two commenters questioned the
provisions of § 20 of Appendix A of the proposed policy letter
prohibiting collection of fees or other public moneys, pointing
out that contractors in mess halls for military personnel
currently collect charges for meals and Department of Housing and
Urban Development (HUD) contractors collect fees from purchasers
of HUD properties. We have modified the policy letter to enable
routine collection of fees where good cash management practices
and other controls are in effect, where there is little danger of
miscalculating the amount of money ultimately due the Government,
and where there is little difficulty in obtaining payment. For
example, a contractor could have discretion to determine that a
family seeking entrance to a park consists of four people rather
than three, and that one of the four is a child under 12, but the
contractor would not have the discretion to determine the amount
of the fee to be paid by each person in a particular category.
HUD contractors may also collect fees from purchasers of HUD
properties in accordance with subsection 17(a) of Appendix A. We
also make clear that routine voucher and invoice examination by
contractors is an acceptable practice.
23. contract for one function or several. One commenter
questioned whether the policy letter reflects our belief that
only contracts with multiple functions are susceptible to
confusion with respect to inherently governmental functions.
This is not our belief. The policy letter is intended to provide
guidance with respect to discrete functions regardless of whether
there is a mixture of several functions in a contract or there is
only one function that is being contracted.
24. Post-award responsibilities. Section 7(e) has been amended
to make clear that agency contract oversight is to ensure
contractor performance in accordance with the terms of the
contract, but that oversight must not be exercised so as to
create a personal service contract. Language from subsection
7(d) of the proposed policy letter has been moved to subsection
7(e), as explained in § 21, above.
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25. Drafting of Congressional testimony, responses to
Congressional correspondence, and aaencv responses to audit
reports from an Inspector General, the General Accounting Office.
or other Federal audit entity. Two commenters questioned whether
contractors should be able to draft Congressional testimony,
subject to ultimate agency approval. Approval is a key power
reserved to any official and we by no means agree that officials
do or will approve contractor work in a perfunctory manner. We
have nonetheless reexamined this issue and, because of the
importance of Congressional testimony and correspondence and of
agency responses to audit reports , we are now deciding, as a
matter of policy, that these documents should not be drafted by
contractors. We have thus added a new subsection (c) to the body
of the policy letter to this effect. We deleted the relative
portions of Appendix A because we do not believe that drafting
documents per se is an inherently governmental function and
failing to exercise sufficient oversight with respect to drafting
of such documents does not transform the underlying function into
an inherently governmental function, as noted in subsection §
21(a), above. Contractor reports, conclusions, summaries,
analyses, and other work products may, of course, still be quoted
or otherwise referenced in Congressio.nal testimony,
correspondence, and responses to audit reports, or set out in
such things as attachments, appendices, or enclosures thereto.
26. Reliance on contractor support. One commenter called
attention to our statement in § 4 of the policy letter that
agencies "award service contracts for various reasons, such as to
acquire special skills not available in the Government or to meet
the need for intermittent services." The commenter pointed out
that "'support service' contractors have come to serve as the
permanent workforce for many programs" seemingly implying that
our statement does not take this into account. In fact, our
statement is an accurate one, citing only two of the reasons why
agencies award service contracts as examples. Contracting
actions under Circular A-76 are also a reason why agencies award
service contracts.
Whatever the reason for using service contracts to accomplish
agency missions, it is important to understand that agency use of
service contracts is limited by our policy letter in two ways:
the function must not be an inherently governmental function, and
if it is not, the agency must be able to exercise effective
oversight of any contract awarded. We make clear that management
of a contract is just as important as deciding whether the
contract may properly be awarded in the first place.
Our policy letter is limited in scope and does not focus on
why agencies use service contracts. Rather we are concerned that
service contracts, when used, are used only when contractors may
perform the functions in question and when agencies have the
resources to manage the contracts. It is true that agencies have
~ 10 ~
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sometimes contracted functions that we have listed in the policy
letter as inherently governmental functions, and it is true that
they have sometimes failed to recognize that they were not
exercising effective oversight over nongovernmental functions
that had been contracted. Nonetheless, effective corrective
action has been taken by the agencies in the past when oversight
problems were identified.
Additional problems in this area will probably arise in the
future. Even the General Accounting Office recognized the
difficulty in defining inherently governmental functions and
providing guidance to agencies on the subject. Are Service
Contractors Performing Inherently Governmental Functions?.
GAO/GGD-92-11, November 1991, p. 3. We have every reason to
expect, however, that because our guidance is much more detailed
than anything that was available to agencies in the past there
will be fewer instances of problems in this area. We thus
disagree strongly with the commenter that the policy letter is a
mere exhortation to better management.
27. Other issues. One commenter also suggested that we should
address whether "contractors who perform work historically
performed by civil servants should be subjected to comparable
limitations on pay and rules of conduct;" measurement of the
short-term and long-term costs of reliance on contractors versus
officials; whether Superfund and the savings and loan bailout
programs "provide models for public management of the next
bailout or cleanup program;" and the "practical meaning that we
will give to the concept of 'public service' as the Federal
Government heads into the 21st century."
The concept of work "historically performed" by civil
servants is not useful because a function may have been performed
by civil servants in the past for reasons other than the belief
that the function was inherently governmental. In fact, the
premise of Circular No. A-76 is that many functions historically
performed by Government employees can more appropriately be
performed by the private sector.
We believe that competition is the most powerful force
available to keep costs down, even though there may be instances
where this will not be so. In such instances, determinations
shall be made in accordance with Circular No. A-76.
Measurement of the short-term and long-term costs of reliance
on contractors versus officials is an aspect of cost
effectiveness of service contracts and need not be dealt with
here. Similarly, the efficacy of the Superfund and savings and
loan programs is a matter beyond the scope of this policy letter.
So far as the practical meaning of the concept of public
service is concerned, this policy letter attempts to identify
— 11 —
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those functions that, as a matter of policy, should only be
performed by Government officials and those that may be performed
by service contractors. If our taxonomy and analytical methods
are sound, our policy letter should define what public service
entails in terms of the functions that officials must perform for
the foreseeable future.
28. Acknowledgement. Finally, we wish to acknowledge our
reliance on the excellent work of the Environmental Protection
Agency in our drafting of the appendices to this policy letter.
Also, the comments we received were all exceptionally well
thought out. We are most grateful for the tine, effort and
imagination that went into the preparation of those comments.
ALLAN V. BURMAN
Administrator
Date:
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3EPA
Classification No : 1900.2
Approval Date: October 22, 1990
CONTRACTING AT EPA
1. PURPOSE. This Order establishes Agency policy that (1)
prohibits contracting for certain activities at EPA and (2)
implements special "management and control measures when contracting
for certain sensitive services.
2. BACKGROUND. EPA relies heavily on contractor support. Nearly
every EPA employee is involved with the contracting community in
one way or another. Thus, in a very real sense, most EPA
employees, including senior management, can be considered contract
managers.
Agency responsibility and accountability begin when a decision
is made to use contract support. And, having accepted a final
product from a contractor, EPA becomes responsible for its content
and for how it may be used in reaching Agency decisions.
The extent of the Agency's contracting, coupled with its
regulatory nature, create a strong potential for conflict of
interest with members of the contracting community. This problem
is magnified when a limited number of contractors provide support
in a variety of potentially sensitive areas. EPA must consider
these facts when developing its contract requirements. It must be
judicious in deciding the most effective ways to use its
contractors and look for ways of reducing the potential for
conflicts of interest. And, if contract support has been used, EPA
must play a proactive role in ensuring a final Agency product that
is unbiased and represents Agency thinking. The final product
provided under a contract may assist EPA in reaching a decision;
however, a contractor should not make the decision for the Agency.
OMB Circular A-76 defines inherently governmental activities
as those "being so intimately related to the public interest as to
mandate performance only by Federal employees." Agency employees
must ensure that inherently governmental activities are performed
only by EPA employees.
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EPA ORDER 1900.2
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NOTE: For purposes of this Order, "active contract managers"
are defined as Project Officers, Deputy Project Officers, Work
Assignment Managers, Remedial Project Officers, On-Scene
Coordinators, Delivery Order Officers, and Delivery Order
Project Officers. "EPA managers" consist of senior management
not directly involved in contract management.
3. POLICY.
a. EPA will not allow any of the following to be performed
under its contracts:
(1) The actual preparation of Congressional testimony.
Although it is permissible for a contractor to
perform basic research and retrieve factual data for the
Agency in its development of Congressional testimony, it
is the ultimate responsibility of EPA to develop and
issue it. The Agency spokesperson must present testimony
that is free from any contractor bias and any real or
potential conflicts of interest. Therefore, even if
preliminary research is performed by a contractor, it
must be carefully examined by Agency personnel for any
contractor partiality, favoritism, and conflicts of
interest, prior to its incorporation into the testimony.
The final document must be prepared by Agency personnel
to ensure that it fully represents the Agency's position.
The same rationale should be used when providing briefing
materials to congressional staffers. Finally, if work
is issued to a contractor for testimony support, it is
important that the statement of work for the assignment
reflect that these Agency limitations have been
established.
(2) The interviewing or hiring of individuals for
employment at EPA.
Both of these activities are inherently governmental
duties involving judgment and discretion and a legal
commitment on the part of the Government. They must
remain under the sole authority of EPA.
(3) Developing and/or writing of Position Descriptions
and Performance Standards.
These activities are key to the effective staffing
and operation of EPA and are supervisory/management
responsibilities. Outside technical expertise specific
to a certain profession may sometimes be necessary but
contractors should not write our position descriptions.
Similarly, contractors should not be used to determine
how the performance of EPA employees should be evaluated.
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EPA ORDER 1900.2
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(4) The actual determination of Agency policy.
This prohibition does not preclude contractors from
providing support in the policy development process.
However, it does preclude contractors from participating
in the final phases of policy development, i.e., being
involved in the actual decision-making of what Agency
policy will be. Contractors may appropriately be used
in the stages of policy development which involve doing
background research or performing options analyses. If
such support is provided by a contractor, it must be
carefully examined by Agency personnel for partiality,
favoritism, and any contractor conflict of interest. In
all cases, there should be a clear record that the
contractor's work was reviewed and that final decisions
were made by Agency personnel. Such a record could be
demonstrated through notes from reviews of draft and
final documents by EPA personnel, minutes from progress
meetings with contractors, reports from EPA peer and
board reviews, etc.
(5) Participating as a voting member on a Performance
Evaluation Board; participating in and/or attending Award Fee
meetings.
The assignment of an evaluation score and the making
of recommendations of profit/fee payments by one
contractor for another are clearly conflicts of interest.
All functions relating to the decisions of award fees are
inherently governmental and should be performed
exclusively by Agency staff. However, contractors may
provide specialized technical expertise as input to the
Board prior to the actual evaluation meeting discussions.
The key determining factor is the nature of the support;
in all cases, it should be non-judgmental, i.e., free
from opinions regarding the quality of a contractor's
performance. For confidentiality reasons, no contractor
may be present during the Board meeting. Any opinions
expressed as the result of a Performance Evaluation Board
should be those of the Government. Additionally, due to
the subjective and confidential nature of the Board
reports, their typing should remain an in-house function.
(6) Preparing Award Fee Letters, even under typing
services contracts.
Because Award Fee Letters contain significantly
sensitive and confidential information that could
possibly have a detrimental effect on a firm's
reputation, it is inappropriate to allow outside
entities, even those contractors performing typing
services, access to such information.
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EPA ORDER 1900.2
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(7) The actual preparation of Award Fee Plans.
This is an inherently governmental function that
details the discretionary and judgmental decisions behind
the process the Government will be using in its
evaluation of a contractor's performance. It would be
inappropriate for any contractor to advise the Agency on
what should be important to it. Provided that all
confidential business information has been removed, a
contractor may type award fee plans since there is no
judgment associated with the performance of that task.
(8) The preparation of documents on EPA letterhead other
than routine administrative correspondence.
In this instance, "routine" is synonymous with "non-
judgmental" or "non-decisional." This prohibition is
designed to prevent the following situation from
occurring. A contractor is asked by EPA to perform
certain policy analysis tasks. The contractor then
performs the research and develops a position on the
policy which it prepares on EPA letterhead. EPA then
signs it, thereby making it EPA policy. Even though EPA
may have made the final decision, there is no indication
of EPA involvement up until that time. The development
of inherently governmental decision documents mandates
significant Agency involvement and this restriction
ensures the Agency's participation in the decision
process. Records should be kept demonstrating EPA's
involvement. This prohibition does not apply to
contracts which are providing typing services, on
condition that the contractor providing such typing
services was not involved in any other capacity in the
development of the decisional or judgmental document.
(9) Reviewing vouchers and invoices for the purposes of
determining whether costs, hours, and work performed are
reasonable.
This prohibition is directed specifically at the
Project Officer's monthly review and approval of a
contractor's invoice submitted to EPA for payment
purposes. Contractors may perform non-judgmental duties,
such as checking mathematics or reviewing invoices for
administrative accuracy, but should not render opinions
in lieu of EPA on the reasonableness of professional
staffing levels and hours used to perform work. That is
an inherently governmental function generally delegated
by the Contracting Officer to the Project Officer. This
item in no way prohibits the Office of Inspector General
from contracting for financial auditing and services, and
compliance auditing.
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EPA ORDER
1900.2
10/22/90
(10) The preparation of Statements of Work, Work
Assignments, Technical Direction Documents, Delivery Orders, or any
other work issuance document under a contract that the contractor
is performing or may perform.
Authorizing a contractor to do any of these
activities creates a clear conflict of interest situation
since they essentially allow the contractor to assign
itself its own work. Similarly, it is inappropriate for
contractors to complete their work issuance forms. This
prohibition does not restrict contractors from preparing
work plans which are, in fact, their own responsibility.
Additionally, EPA prime contractors should be responsible
for preparing the statements of work for their own
subcontracts.
(11) On behalf of EPA, actually preparing responses to
audit reports from the Inspector General, General Accounting
Office, or other auditing entities
and
(12) On behalf of EPA, preparing responses to
Congressional correspondence.
Both of these items are analogous to the situation
discussed under Item (1) , above. Although it is
permissible for contractors to perform in a research or
fact-finding capacity, the final document should be
produced by EPA personnel to ensure that it is free from
outside bias and that it truly represents Agency
thinking.
(13) The actual preparation of responses to Freedom of
Information Act requests, other than routine, non-judgmental
correspondence — in all cases, EPA must sign it.
The key word here is "non-judgmental," being
synonymous with "non-decisional." We do not want
contractors to decide what is releasable under FOIA since
that is an inherently governmental function involving the
interpretation of statutes and Agency regulations.
Recognizing that some FOIA work is non-judgmental or non-
decisional, it is permissible for contractors to be used
in those areas. For example, provided all conflict of
interest, confidential business information (CBI), and
Privacy Act regulations have been followed, contractors
may be used to collect data for the Agency as long as
they are not deciding what data is releasable.
Similarly, if conflict of interest, CBI, and Privacy Act
regulations have been addressed, contractors may be used
to redact documents provided that decisions on what to
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EPA ORDER 190Q>2
10/22/90
redact are made exclusively by Agency personnel.
Questions concerning interpretation of CBI and Privacy
Act regulations should be referred to the Office of
General Counsel. Questions concerning conflicts of
interest should be referred to the Procurement and
Contracts Management Division.
(14) Any contract which authorizes a contractor to
represent itself as EPA to outside parties.
No contract may contain such an authorization.
There may be times when contractors are assumed to be EPA
personnel, but, in those situations, firms must explain
that they are Agency contractors.
(15) Conducting administrative hearings.
Administrative hearings are primarily conducted by
Administrative Law Judges (ALJs) who, in accordance with
40 CFR, Part 22, hear cases involving disputes between
EPA and other parties regarding regulations, permitting,
etc. The ALJs are EPA employees performing quasi-
judicial and, therefore, inherently governmental
functions such as assessing penalties. This is
distinguishable from contracting for professional
arbiters when the Agency requires outside, independent
judgment.
(16) Reviewing findings concerning the eligibility of
EPA employees for security clearances.
This has been included as a prohibition because it
is inherently governmental and may also involve the
disclosure of very sensitive and personal information
regarding EPA employees.
(17) The actual preparation of an office's official
budget request.
The prohibition here is very similar to Items (1),
(11), and (12). Whereas research and fact-finding of a
purely technical nature are permissible assignments under
a contract as preliminary steps to budget development,
the responsibilities of establishing Agency priorities
or determining how Agency money should be spent may not
be delegated to Agency contractors. These are inherently
governmental dutir involving judgment and discretion
and must be perfon d by Agency staff. Prior to its use,
any support work provided by a contractor must be very
carefully reviewed by EPA staff to remove any contractor
bias and to substantiate the reliability of the data,
analyses, etc.
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EPA ORDER 1900.2
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b. Certain other activities when performed under contracts
nay place EPA in a vulnerable or sensitive position if adequate
controls are not implemented. In those cases, a justification must
be prepared by the requesting program office which describes the
type of work to be performed under the contract, why the work
cannot be performed internally, and what will be done to ensure a
final Agency product that is unbiased and represents Agency
thinking.
If a new contract award valued at $25,000 or greater is
contemplated, the justification must be signed by the cognizant
Assistant Administrator, Associate Administrator, or Regional
Administrator. For new contracts valued at less than $25,000, the
justification must be signed by a program official at least one
organizational level above the initiating office but no lower than
the Branch level, e.g., a document generated at the Section level
or lower must be approved at the Branch level, a document generated
at the Branch level must be approved at the Division level, etc.
The following are contract work areas necessitating this
justification:
(1) Budget preparation support including, but not
limited to, workload modeling, fact-finding, efficiency studies,
and should-cost analyses,
(2) Reorganization and planning support,
(3) Support services such as analyses, feasibility
studies, etc., to be used by EPA personnel in developing policy,
(4) Regulation development support,
(5) Any support in the in-house evaluation of another
contractor's performance,
(6) Involvement in strategic acquisition planning,
(7) Support on improving contract management,
(8) Providing specialized expertise in the contractor
selection process,
(9) Providing specialized expertise in the development
of Statements of Work, Work Assignments, and other contract-
ordered tasks,
(10) Any support involving EPA policy or regulatory
interpretation, such as staffing hotlines, attending conferences
on behalf of EPA, community relations efforts, conducting EPA
•training courses, etc., and
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EPA ORDER 1900.2
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(11) Independently providing technical guidance
concerning EPA policies or regulations on EPA's behalf to outside
parties.
NOTE: In no event shall any contract requiring the performance
of any legal services be entered into without the approval of
the Office of General Counsel.
c. Certain other activities if contracted for, although not
sufficiently sensitive to require justifications, do necessitate
the establishment of special EPA control measures. If a new
procurement is contemplated involving any of the activities or
situations listed below, a special discussion detailing control
procedures to be enforced must be included within the pre-award
procurement request rationale document. This would be required in
the following instances:
(1) Situations where contractors share office space with
EPA employees.
Control measures must be established to prevent the
performance of personal services, to ensure that
contractors do not have inappropriate access to
privileged or sensitive information, etc.
(2) Support in preparing responses to Freedom of
Information Act requests.
Control measures must be established to ensure that
contractors are in compliance with all regulations
involving FOIA, the Privacy Act, and confidential
business information.
(3) Any situation where a contractor has access to
confidential business information and/or any other sensitive
information.
Control measures must be established to ensure that
contractors do not have inappropriate access to
privileged and sensitive information, to ensure that
security systems are in place preventing the release of
sensitive information to non-designated contractor
employees, etc.
(4) Any situation where it can be assumed that the
contractor is EPA, without specifically identifying itself as a
contractor.
Control measures must be established to ensure that
contractor employees are clearly identified through the
use of badges, posted signs, etc.
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EPA ORDER 1900.2
10/22/90
d. In determining how best to contract for these sensitive
services, organizations must consider ways to reduce the potential
for conflict of interest. Procurement strategies should be
considered that break the requirements into smaller components,
thereby broadening contractor resources available to a particular
office. If possible, small and minority business participation
should be considered, provided these firms do not have conflicts
of interest. The procurement request rationale document must
address how the particular procurement request fits into the
requesting office's overall procurement strategy.
e. In order to assure contract accountability at all levels
of the Agency, all EPA managers must have written into their
performance standards language emphasizing strong contract
management and controls.
f. Contract management training classes will be revised to
include discussions of the essential elements of this EPA Order.
Additionally, all active contract managers will be required to take
a one-day refresher course in contract management every three years
in order to maintain certification.
4. RESPONSIBILITIES.
a. The Procurement and Contracts Management Division (PCMD)
is responsible for the following:
(1) Including language within all future contracts to
prohibit contractor performance of the activities listed in
Paragraph 3.a., above.
(2) Notifying all current contract holders of those
prohibitions listed in Paragraph 3.a., above.
(3) Revising the Contracts Management Manual (CMM) to
incorporate the provisions of this Order, specifically
highlighting:
(a) The prohibited activities listed in Paragraph
3.a., above,
(b) The requirement for justifications for the
purchase of any of the services listed in Paragraph 3.b., above,
(c) The requirement for a control element
discussion in the procurement request rationale document if any of
the activities listed in Paragraph 3.c., above, are contemplated,
(d) The requirement for a procurement strategy
discussion element in the procurement request rationale document,
and
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EPA ORDER 1900.2
10/22/90
(e) The requirement to include in all EPA managers'
performance standards language emphasizing strong contract
management and control.
(4) Reviewing the justifications for the purchases of
any of the services listed in Paragraph 3.b., above, and making a
determination that adequate control measures will be employed.
(5) Revising the current contract management training
classes to include discussions of this Order.
(6) Instituting a one-day contract management refresher
course to be taken every three years by active contract managers
in order to maintain their certification.
b. EPA offices employing contract support are responsible for
the following:
(1) Preparing the justification for the purchase of any
of the services listed in Paragraph 3.b., above, and obtaining the
signature of the appropriate approving official on the
justification.
(2) Including a control element discussion within the
procurement rationale document if any of the activities listed in
Paragraph B.C., above, are contemplated.
(3) Considering ways to break up requirements for the
procurement of sensitive services into smaller components, thereby
reducing the potential for conflicts of interest.
(4) Along with the performance standard requirements for
active contract managers discussed within the CMM, including in all
other EPA managers' performance standards language, as included
within the CMM, emphasizing strong contract management and control.
(5) In accordance with guidance established in the CMM,
requiring active contract managers to attend the contract
management refresher course once every three years, in order to
maintain their certified status.
c. All Agency employees are responsible for the following:
(1) Being aware of the content of this Order and
bringing any suspected violations to the attention of the cognizant
Contracting Officer.
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EPA ORDER
1900.2
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(2) Ensuring that the "prohibited" activities listed in
Paragraph 3.a. and the "sensitive" activities listed in Paragraphs
3.b. and 3.c. are handled in accordance with the guidance outlined
in this Order and the CMM.
Charl
U GrJ
11
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CHAPTER 3 - SOURCE CONSIDERATIONS
Table of Contents
1. Required Sources of Supplies and Services 3-1
2. Source Considerations 3-2
3. Availability of Work Resulting from
Other Sources 3-2
4. Small Business set-Asides 3-2
5. Small Disadvantaged Business Concerns 3-3
6. Labor Surplus Area Set-Asides 3-4
7. Sources-Sought Synopsis 3-4
8. Synopsis of Proposed Contracts 3-6
9. Justifications for Other Than Full and
Open Competition 3-6
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CHAPTER 3 - SOURCE CONSIDERATIONS
1. Required Sources of Supplies and Services. Federal agencies
must 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.
a. For Supplies:
(1) Agency inventories
(2) Excess from other agencies
(3) Federal Prison Industries, Inc.
(4) Procurement lists available from the
Committee for Purchase from the Blind and
Other Severely Handicapped
(5) Wholesale supply sources, such as stock
programs of the General Services
Administration, the Defense Logistics
Agency, the Veterans Administration and
military inventory control points
{6) Mandatory Federal Supply Schedules
(7) Optional Use Federal Supply Schedules
(8) Commercial sources, including educational
and nonprofit institutions.
b. For Services:
(1) Procurement lists of services available from
the Committee for Purchase from the Blind
and Other Severely Handicapped
(2) Mandatory Federal Supply Schedules and
mandatory GSA term contracts for personal
property rehabilitation
(3) Optional Use Federal Supply Schedules and
optional GSA term contracts for personal
property rehabilitation
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(4) Federal Prison Industries or other
commercial sources, including educational
and nonprofit institutions.
2. Source Considerations.
a. 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.
b. 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).
3. 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.
4. Small Business Set-Asides.
a. Introduction. To enhance the opportunity for small
business concerns to receive a fair proportion of Government
contracting dollars, Congress established , through the Small
Business Act, the Small Business Set-Aside Program. The
rationale for this preferential treatment is that a healthy small
business community is essential for the preservation of the
nation's free enterprise system.
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b. All procurements up to $25,000, which are subject to
small purchase procedures, are set-aside exclusively for small
business firms. Any procurement, including purchases over
$25,000, shall be small business set-asides whenever the
Contracting Officer has a reasonable expectation of receiving at
least two offers from responsible small businesses and being able
to make award at a fair market price.
c. Set-Asides Procedures. 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.
5. Small Disadvantaoed Business Concerns— The 8(a) Program.
a. Policy. It is EPA's policy to enter into contracts with
the SBA so as to assist in the growth of small disadvantaged
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. Every requirement should be viewed as a
potential for 8(a) award unless one or more of the following
circumstances exist:
(1) The procurement has been publicly synopsized as a
small business set-aside.
(2) The requirement was most recently performed by a
small business and the Small Business Administration has
determined that to remove it from competition will cause major
Hardship on the small business firm.
(3) The potential contract could be reasonably expected
to be won by a small disadvantaged business concern under normal
competitive procedures.
(4) The procurement should not require excessive
subcontracting by the prospective 8(a) contractor.
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b. Identifying procurements. Proposed procurements
suitable for 8(a) firms can be identified in a number of ways:
(1) The program office can identify requirements for
8(a) firms in advance procurement plans or during individual
acquisition planning.
(2) The Contracting Officer can recommend an 8(a) award
during the regular procurement process.
(3) The Office of Small and Disadvantaged Business
Utilization (OSDBU) can recommend a particular contract for award
under 8(a) procedures.
c. Informal Technical Presentation. Contracting Officers
in consultation with OSDBU may invite several 8(a) firms to give
presentations on their capability to perform a specific
requirement. For specific procedures governing these
presentations, contact your Contracting Officer.
d. Competition Requirements. If there is a reasonable
expectation that at least two eligible and responsible 8(a) firms
will submit offers and that award can be made at a fair market
price, acquisitions with an anticipated award price which will
exceed $5,000,000 (manufacturing) and $3,000,000 (services) shall
be awarded on the basis of competition limited to 8(a) firms.
Acquisitions below these thresholds may be awarded to 8(a) firms
on a sole source basis.
6. 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.
7. Sources-Sought Synopsis.
a. Used as an Advance Notice.
(1) 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 i
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
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information demonstrating their capabilities in a specific field.
(2) 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 consists 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.
(3) 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 written evaluation and rating of each
respondent's technical capabilities. The Project Officer will
also 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.
b. Used to Perform Market Surveys.
(1) 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. The synopsis must contain the following:
(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.
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(2) It should be noted for planning purposes that the
market survey should be conducted as soon as practicable after
the requirement is known. 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.
8. Synopsis of Proposed Contracts.
a. 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 c. below.
b. The synopsis of a proposed contract must be published in
the CBD at least 15 days in advance of issuance of the
solicitation. A minimum of thirty (30) days response time is to
be allowed for receipt of bids or proposals from the date of
issuance of the solicitation.
c. 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 and the
Government would be seriously injured if the Agency complied with
the publication and response times set forth in FAR 5.203, (3)
the 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, (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, or (10) the
contract action results from acceptance of a proposal under the
Small Business Innovation Development Act.
9. Justifications for Other Than Full and Open Competition
(JOFOC). This section covers the procedure for justifying a
noncompetitive or a limited competition acquisition.
a. Policy. 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. 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
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recommendation is subject to review and approval as provided in
(5) below.
b. 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.)
c. The justification for sole source acquisition of any
small purchase ($2,500 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 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.
d. 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 the following format:
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JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION
PART I - BACKGROUND
The Justification for Other Than Full and Open Competition
(JOFOC) shall include the following background information:
1. Date;
2. Program Office;
3. Project Officer (Include Name, Title, Phone, E-mail
and Mail Code;
4. Project Identification (Title, Contract Number);
5. Description of supplies or services required;
6. Period of Performance (Base year and Options) or
Date of Delivery;
7. Estimated Contract Amount (List cost for base year and
each option separately);
8. Proposed Contractor (Name, Address and Phone);
PART II - JUSTIFICATION
The Justification shall address the elements in FAR 6.303-
2(a)(2) through (5), (9) and (11) and EPAAR 1506.3. Identify the
authority listed in FAR 6.302 which permits other than full and
open competition. The narration shall provide specific support
for the authority used.
PART III - PROGRAM OFFICE DIVISION DIRECTOR'S CERTIFICATION
The JOFOC shall include a statement, signed and dated by the
Program Office Division Director, that certifies that any
supporting data which forms the basis for the JOFOC is complete
and accurate.
PART IV - CONTRACTING OFFICER'S DETERMINATION
The Contracting Officer's determination shall address the
elements set forth in FAR 6.303-2(a)(6), (7), (8) and (10). Each
JOFOC shall contain a certification, signed and dated by the CO,
which states the justification is accurate and complete to the
best of his/her knowledge and belief.
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PART V - APPROVAL
JOFOCs for procurements estimated at less than $100,000 shall be
approved by a level higher than the CO; JOFOCs over $100,000, but
not exceeding $1,000,000, shall be approved by the Competition
Advocate; JOFOCs exceeding $1,000,000 shall be approved by the
Director, Office of Acquisition Management.
e. Conduct of Market Surveys To Determine Availability of
Capable Sources.
(1) 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.
(2) 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.
(3) 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.
(4) Under those circumstances when market surveys are
conducted to assist in determining the existence of competition
for purchases over $25,000, 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
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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.
f. Preparation of the Justification for Other Than Full and
Open Competition (JOFOC). The Project Officer will prepare a
draft of the JOFOC for the Contracting Officer's review and
comment prior to finalization using the format shown in paragraph
(c) which follows below. The JOFOC shall fully explain the
circumstances which make full and open competition infeasible.
The JOFOC shall:
(1) Identify the project and describe the supplies or
services required to meet EPA's needs;
(2) Identify the statutory authority permitting other
than full and open competition, such as:
FAR Reference Circumstance
6.302-1 Only one responsible source
6.302-2 Unusual and compelling urgency
6.302-3 Industrial mobilization
6.302-4 International agreement
6.302-5 Authorized or required by statute
6.302-6 National security
6.302-7 Public interest
(3) 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;
(4) Describe the efforts made to ensure that offers were
solicited from as many potential sources as practicable.
(5) 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.
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(6) If applicable, describe the reasons why a market
survey was not conducted.
(7) Any other facts supporting the use of other than
full and open competition, e.g.:
(a) 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.
(b) 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.
(c) 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.
(8) A listing of the sources, if any, that expressed,
in writing, an interest in the acquisition.
(9) A statement of the actions, if any, EPA may take to
remove or overcome any barriers to competition before any
subsequent acquisition.
(10) 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?
(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:
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1 Is the added effort a minor supplement to a
completed project requirement? Of what significance is this
fact?
_2 Is the added effort a major supplement to
completed project requirement? Of what significance is this
fact?
3! 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? Explain fully.
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. (Remember
poor planning or other forms of procrastination are
unacceptable.)
(f) If the basis for the JOFOC is an unsolicited
proposal, this Chapter 3 of the CMM provides guidance for
justification of noncompetitive procurement.
f. The following factors, according to decisions of the
Comptroller General, cannot be used to justify noncompetitive
procurements;
(1) The proposed organization is either a nonprofit
organization, a tax exempt entity, or a volunteer citizens group/
or
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(2) 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-187369, 2/28/77).
g. JOFOC Certification Requirements.
(1) 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.
(2) 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.
h. Review and Approval of the JOFOC. The review and
approval of JOFOCs is conducted by various senior contracting
officials depending on the dollar value of the acquisition. The
review must assess the quality of consideration given those
factors discussed 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.
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CHAPTER 4 - CONTRACT TYPES, FUNDING, AND OPTIONS
Table of Contents
1. Introduction 4-1
2. Firm Fixed-Price Contract 4-1
3. Cost-Reimbursement Type Contract 4-2
4. Cost-Plus-Award-Fee Contract 4-4
5. Time and Materials Contract 4-6
6. Labor-Hour Contract 4-7
7. Indefinite Delivery Type Contract 4-8
8. Funding 4-10
9. Funding Cost-Reimbursement Term
Form Contracts (Level of Effort) 4-10
10. Availability of Funds 4-12
11. Commitments 4-13
12. Funding Cost-Type Contracts 4-13
13. Options 4-14
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CHAPTER 4 - CONTRACT TYPES. FUNDING. AND OPTIONS
1. Introduction.
a. EPA uses a variety of different types of contracts. Each
type has its advantages and disadvantages, both for the
government and the contractor. Some types are definitely
preferable over others/ but may need to be used because of some
characteristic of the work to be performed. The contract type
selected should be well-matched to the work to be performed.
EPA uses five basic contract types:
• The fixed price contract
• The cost-reimbursement contract
• Time and materials or Labor hour contract and
• Indefinite delivery/indefinite quantity contract.
b. The Contracting Officer determines the proper type of
contract for an acquisition. However/ it is important that the
Project Officer understand the basic difference between contract
types and their relationship to the Statement of Work. A summary
of the various contract types and their characteristics follows.
2. Firm Fixed Price Contracts.
a. The firm fixed price contract provides for a price which
is not subject to any adjustment/ regardless of the contractor's
cost experience during performance. In a firm fixed price
contract, the specified price is paid to the contractor when the
items called for by the contract have been delivered and accepted
or when the services have been completed and accepted. The
statement of work or contract specifications define the products
to be provided or services to be performed.
b. When Used. Because the contractor assumes full, cost
responsibility in a fixed-price arrangement, and because this
type of contract imposes a minimum administrative burden on both
parties', it is always the preferable type to use if conditions
permit. This type of contract is used only when a definitive
design or performance specification or statement of work exists,
and a fair and reasonable price can be established prior to
award. If major cost uncertainties are present, or definite
specifications are not available, a fixed price contract is
usually not awarded.
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IF.. .
The fixed price is
$20,000
AND.. .
It actually only
costs the
contractor $15,000
to perform
If it costs the
contractor $22,000
to produce the
product or service
THEN
The contractor nets
a 25% profit.
The contractor
loses money.
c. Small purchases are generally fixed price contracts.
3. Cost-Reimbursement Contracts.
a. Cost-reimbursement contracts are exactly what they state:
the Government agrees to reimburse the contractor's cost of
performance. The following three (3) contracts described in the
table are generally used at EPA:
Contract
Fee (Profit) Structure
Cost Contract
The contractor receives no fee at all.
Generally, such contracts are awarded
primarily to educational institutions and
other nonprofit organizations. They may
also be appropriate for research and
development work or for facilities
contracts.
Cost-Plus-Fixed-Fee
(CPFF)
This is the most prevalent type of
cost-reimbursement contract awarded in
this Agency. Under this arrangement, the
contractor is paid a negotiated fee that
is fixed at the inception of the
contract. The amount of fee does not
vary with actual cost, but stays fixed
unless adjusted as a result of changes in
the work to be performed.
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Contract
Fee (Profit) Structure
Cost-Plus-Award-Fee
(CPAF)
A CPAF contract provides for a fee
consisting of:
• A fixed base amount and
• An award pool, the amount of which
awarded is based upon a
subjective, judgmental evaluation by the
Government of the
contractor's performance.
Areas such as quality, timeliness,
ingenuity, and cost effectiveness are
evaluated by EPA in accordance with
established criteria. The amount of
award fee to be paid is decided at stated
intervals (usually every quarter or
trimester) during contract performance.
The overall objective is to motivate the
contractor in a positive way to improve
poor performance or to continue good
performance. This type of contract is
considered for use when the expected
effort is anticipated to exceed $5
million and a cost-reimbursement contract
has been selected. However, it may be
used for contracts of any dollar value.
Most Superfund cleanup contracts are CPAF
contracts.
b. Forms of Cost-Reimbursement Contracts.
Cost-reimbursement contracts of any of the types listed above can
be structured in one of two basic forms:
(1) The completion form. This 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 contract form normally requires the contractor to
complete and deliver the specified end-product (such as, a final
report of an analysis) as a condition for payment of the entire
fixed fee established for completing the work. The contractor is
expected to complete the work within the negotiated estimated
cost. However, in the event the work cannot be completed within
the estimated cost, the Government may elect to continue the work
provided it increases the estimated cost. The contractor then
must complete the work at no additional fee.
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(2) The term form (level of effort) contract. This
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 end of the agreed-upon period of time provided the
contractor 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. Extensions in
periods of performance or requirements for additional levels of
effort are new acquisitions and involve new fee and cost
arrangements as well as adequate justification for other than
full and open competition or sole source awards, it is important
to be aware that fee, in a level of effort contract, is tied to
hours, not tasks. If the contractor needs more hours than
expected to finish an assignment, extra fee is paid on those
hours.
(3) The completion form of contract, because of
differences in obligation assumed by the contractor, is generally
preferred over the term form. Under a completion form contract,
prospective contractors are reasonably expected to complete all
of the work called for by the Statement of Work within the
estimated cost.
c. When Used. The Contracting Officer will award a
cost-reimbursement type contract when the estimate of total costs
negotiated is believed to be reasonable under the circumstances,
but because of the degree of uncertainties involved, a
fixed-price arrangement is not feasible. In this situation, the
Government assumes the cost risk, and pays the contractor the
actual, reasonable, allocable, and allowable costs incurred in
the performance of the contract, up to the estimate of total
costs established at the time of negotiation. Beyond this
amount, the contractor will not be reimbursed and is required to
stop work unless additional funds are provided and continued work
is authorized by the Contracting Officer. The contractor must
have, or establish, an accounting system that is acceptable to
the Agency before being awarded a cost-reimbursement contract.
d. Cost-reimbursement contracts are appropriate for research
and development activities (such as development of computer
systems) where it is difficult if not impossible to know in
advance exactly what will need to be done, or how much it will
cost to do it.
4. Cost-Plus-Award-Fee Contract (CPAF).
a. 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
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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..
b. 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.
c. 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.
d. The award fee decision referred to 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, 0AM).
e. The CPAF contract is suitable for:
(1) 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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(2) 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
f. The CPAF contract will not be used:
(1) 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-Plus-Incentive-
Fee (CPIF) type contract.
(2) where the contract amount, period of performance,
or the benefits expected are insufficient to
warrant the additional administrative effort or
cost.
5. Time-and-Materials Contracts.
a. The time-and-materials (T&M) type of contract provides
for the procurement of supplies or services on the basis of:
• Direct labor hours at specified fixed hourly rates
(rates include wages, overhead, general and
administrative expense, and profit) and
• Material at cost, and, where appropriate, material
handling costs as a part of material costs.
Material handling costs may include indirect costs not included
in the labor rates, including general and administrative expense.
A variation on the time-and-materials contract is one where fixed
rates for equipment are used as well as fixed rates for labor.
b. When Used. This type of contract is usually used in the
procurement of:
• Engineering and design services
• Repair, maintenance, or overhaul work and
• Work to be performed in emergency situations (e.g.,
Superfund cleanups).
Time and materials contracts should be 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
4-6
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exercised in the use of this type of contract since there is no
incentive for the contractor to control costs or to manage the
labor force efficiently. Thus, it is essential that a T&M
contract be used only where provision is made for adequate
controls, including appropriate surveillance by the Agency
contract manager during performance to give reasonable assurance
that inefficient or wasteful methods are not being used.
6. Labor-Hour Contracts.
(1) The labor-hour type of contract is very similar to
the time-and-materials type of contract, except that materials
will not be supplied. The contractor is reimbursed strictly on
the basis of hours worked at the fixed labor rates specified in
the contract.
(2) The example below illustrates the problems
potentially associated with labor-hour (or time and materials)
contracts. Since the contractor is reimbursed at a fixed rate
for labor falling within a particular labor category/ (or "P
Level") the contractor has a high incentive to use lower-paid and
thus less experienced employees on a particular job, since the
contractor's profit margin on the lower-paid employee may be
substantially higher. This can work to the government's
disadvantage.
Example
Basic Hourly Rate:Ranges from $14 - $16
Category Average: $15
Fixed Loaded Rate = $32.40
Labor
Labor
INDIRECT COSTS
(@ 100%)
Profit
Total
Category
Average
$15.00
$15.00
$ 2.40
$32.40
Joe
$14.00
$14.00
$ 4.40
$32.40
Sue
$16.00
$16.00
$ .40
$32.40
o With The Category Average, The Contractor Earns 8%
Profit.
o With Joe, The Contractor Earns 15.7% Profit.
o With Sue, The Contractor Earns Only 1.25%
Profit.
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7. Indefinite Delivery/Indefinite Quantity Contracts. One of the
following indefinite delivery type contracts may be used for
procurement where the exact time or place of delivery, or
quantity to be delivered, is not known at time of contracting.
a. Definite Quantity Contracts. This provides for a
definite quantity of specified supplies or for the performance of
specified services for a fixed period. Deliveries or performance
occur at designated locations upon order by EPA. 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 is regularly available or
will be available after a short lead time.
b. Requirements Contracts.
(1) This provides for filling all actual purchase
requirements of specific supplies or services during a contract
period with deliveries to be scheduled by the placement of orders
to the contractor. All Agency requirements for the supplies or
services covered by this type of contract must be ordered from
that contractor, and cannot be procured through any other
contracts. (This restriction does not apply to the other two
types of indefinite delivery contracts.)
(2) A realistic estimate of total quantity to be ordered
throughout the contract period is stated for the information of
prospective contractors. However, the Government is not bound by
the estimate set forth. 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.
(3) 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 to the government
of this type of contract are:
• Flexibility with respect to both quantities and delivery
scheduling
• Supplies or services need be ordered only after actual
need has materialized.
Generally, the requirements contract is appropriate for use when
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the item or service is commercially available and when a
recurring need is anticipated.
e. Indefinite Quantity Contracts.
(1) The indefinite quantity 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.
(2) The maximum quantity (or amount expressed in
dollars) should represent the Government's best estimate of
potential usage. In appropriate cases the maximum may be raised
during the contract period, if justification for using other than
full and open competition exists. The minimum must be more than
a nominal quantity; yet it should not exceed the amount which is
fairly certain to be ordered. The common practice is for the
first order to be for the minimum quantity, and placed
simultaneously with contract award. EPA Form 1900-8 (found
within chapter 3), Optional Form 347 or another form approved by
EPA may be used in placing orders. Some contracts of this type
also stipulate minimum and maximum quantities applicable to each
order.
f. When Used.
(1) 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.
(2) Traditionally, fixed-price or fixed-rate
arrangements have been used in indefinite quantity contracts. In
such cases the solicitation provides for fixed amounts 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.
These methods include:
• Fixed loaded labor rates in the time-and-material or
labor-hour mode and
• Cost-reimbursement.
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8. Funding.
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.
9. Funding Cost-Reimbursement Term Form Contracts (Level of
Effort).
a. Where cost-reimbursement term form contracts are used in
EPA, the following policies apply with respect to funding:
(1) 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.
(2) 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.
(3) 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
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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.
(4) 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.
(5) 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 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.
(6) 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
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conclusion of the last option period. Normally, funds should be
deobligated only after settlement of the final contract audit.
(7) 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.
(d) 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 (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 Office prior to issuance of the solicitation.
10. Availability of Funds.
a. 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
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funds.
b. 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 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.
c. 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.
11. 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.
12. Funding Cost-Type Contracts. When a cost-reimbursement term
contract is funded by more than one appropriation, the following
procedures apply:
a. 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.
b. In general, a work assignment should benefit a single
appropriation. 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.
c. The Project Officer must assure that:
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(1) The account number(s) on the work assignment is the
same as that cited on the contract, and
(2) The aggregate of funds on work assignments does not
exceed amounts obligated on the contract for a
particular account number.
d. 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 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.
e. The Project Officer should notify the Contracting Officer
when increases in the total contract value are expected. 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 (d) 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.
13. Options.
a. 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. 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.
c. 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
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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.
d. 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 32.705-1(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.
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CHAPTER 5 - STATEMENT OF WORK PREPARATION
Table of Contents
1. Statement of Work (SOW) 5-1
2. Performance-Based SOW 5-1
3. Planning and Preparation 5-2
4. Analysis of the Work 5-3
5. Contents of the Statement of Work 5-3
6. Personal Services and Nonpersonal Services 5-4
7. Reporting Reguirements 5-5
8. Writing Specifications for Commercial Products .... 5-7
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CHAPTER 5 - STATEMENT OF WORK PREPARATION
1. Statement of Work (SOVO.
a. The SOW is the basis of the Government requirement. It
describes the work to be performed or the services to be
delivered. The SOW delineates the tasks/ describes the essential
and technical needs or requirements, and sets forth the standards
that will be used to determine that the requirements have been
met.
b. The SOW is the basis for determining the type of
contract. The degree of specificity used in the SOW will be the
primary criterion used by the Contracting Officer in choosing the
contract type. A very definitive SOW, completely describing the
required performance or item and leaving little judgement or
initiative to the prospective contractor, will lead more toward a
fixed price type of contract. A broadly defined SOW, permitting
a lot of contractor discretion and setting forth only performance
goals, will lead to a cost reimbursement type of contract.
c. The SOW is the basis for the independent, in-house
government estimate (IGE). The IGE is a FAR requirement for any
procurement over $25,000. A good SOW will provide sufficient
information on the work required for preparation of the cost
estimate.
d. The SOW is the basis for judging acceptability or
responsiveness of prospective contractors' proposals and for
selecting the best contractor. A prospective contractor's
approach to a research and development task is measured against
the research goals set forth in the SOW. A prospective
contractor's personnel skills are measured against the skill
requirements reflected either implicitly or explicitly in the
SOW.
e. The SOW is the basis for measuring contractor
performance. How do we know if the contractor accomplished what
we asked her/him to do? Each SOW must have measurable (i.e., in
terms of quality, timeliness, quantity, etc.) performance
standards or acceptance criteria.
2. Performance-Based SOWs. To the maximum extent practicable,
all SOWs shall describe the work in terms of "what" is to be the
required output rather than "how" the work is to be accomplished.
As stated before, SOWs must specify acceptance criteria.
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3. Planning and Preparation.
a. Background Research. The SOW is the heart of the
procurement. It must clearly define the requirement and provide
to the contractor the background and related information
necessary to understand the requirement. The SOW should
communicate its relationship to the agency mission and the agency
goals, objectives, needs and desires to be fulfilled through the
procurement. In order to accomplish this through the SOW, the
writer must do some preparatory research.
b. Review the documents which authorize the project
involved. This may include the authorizing legislation, the
scope of the contract SOW, organizational mission statements and
even EPA promulgated pollution standards or regulations. Review
available literature related to the field or to the project.
Review available information regarding work done in the field by
other agencies. Review any prior research or preliminary
procurement action such as site reviews or feasibility studies.
Review any similar procurement actions.
c. The SOW will be influenced by any number of restraining
forces and factors. Similarly, the preparation of the SOW will
be influenced by restraining factors. Another area of background
research, therefore, must identify these forces and factors. The
writer should review the available funding; research any
applicable regulatory restraints such as mandated milestones or
accomplishments dates or technical performance considerations.
d. The writer should refresh her or his knowledge of the
various caveats and prohibitions in place regarding such items as
personal services, procurement of inherently governmental
functions, and directed subcontractors. An inquiry to the
contracts office will reveal any latest changes or restrictions
with which the writer must comply.
e. The writer must also do some research to identify those
documents, procedures and rules that will be made a part of the
SOW itself and with which the contractor must comply. As
important as the identification of each of these is the
determination as to the extent of compliance expected. Will the
entire document be made a part of the contract or only specific
paragraphs? Is the procedure an internal agency procedure? If
so, will changes be needed to permit the contractor to adapt it
to the contractor's operation; will such elementary things as
organizational responsibilities be applicable to the contractor?
f. If we specify compliance with a Government procedure, the
procedure is effectively warranted. If the contractor follows
the procedure, the resulting product or service will be
acceptable. The only performance issue is whether or not the
contractor followed the procedure.
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4. Analysis of Work to be Done.
a. 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.
b. An inadequate or poorly written Statement of Work may
result in:
® unreasonable prices;
® failure to obtain competition that might otherwise be
achieved;
® failure to obtain the desired effort from the
contractor;
® a lengthening of the procurement process; and
® 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.
c. One approach used in SOW development is the Work
Breakdown Structure (WBS). WBS involves breaking the overall
requirement into major phases or tasks that represent a logical,
and usually chronological, division of the work effort. Each
major task should be broken down further into as many sub-tasks
as practical, given the situation. This will make it easier to
identify the work required, and to determine staffing,
milestones, and schedule.
5. Contents of the Statement of Work. The following contents
list is recommended for use throughout the Agency.
Title and Date
Background
Scope of Objective Statement
Task Description(s)
Milestones and Deliverables
Acceptance Criteria
Applicable and Controlling Documents
Special Reporting or Special Work Plan Requirements
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6. Personal Services and Nonpersonal Services.
a. 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. EPA may not award a personal service
contract unless specifically authorized by statute. A personal
services contract is a contract that, by its expressed terms or
as administered, makes the contractor personnel, in effect,
Government employees. 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. The Contracting Officer is responsible for assuring
implementation of this policy by considering the criteria set
forth below, before entering into any service contract. Project
Officers should also keep the criteria in mind when drafting the
Statement of Work, and later, when administering the contract.
b. Criteria for Recognizing Personal Services.
(1) 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 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.
(2) The key question to ask yourself is: Will the
Government exercise relatively continuous supervision and control
over the contractor personnel performing the contract?
(3) The Contracting Officer will consider the following
factors as a guide in assessing whether or not a proposed
contract is personal in nature:
(a) Performance on site.
(b) Principal tools and equipment furnished by the
Government.
(c) Services are applied directly to the integral
effort of the Agency or an organizational
subpart in furtherance of its function or
mission.
(d) Comparable services, meeting comparable needs,
are performed at EPA or other agencies using
civil service personnel.
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(e) The need for the type of service provided can
reasonably be expected to last beyond one year.
(f) The inherent nature of the service, or the
manner in which it is provided, reasonably
requires directly or indirectly/ Government
direction or supervision of contractor
employees in order to—
- Adequately protect the Government's interest;
- Retain control of the function involved; or
- Retain full personal responsibility for the
function supported in a duly authorized
Federal officer or employee.
7. Reporting Requirements. 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.
a. 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?
(3) For projects involving environmentally related
measurements, the contractor must submit a QA Project Plan for
review and approval within a specified period following the
effective date of the contract. When approved, the Contracting
Officer will incorporate the Project Plan in the contract by a
change order. The QA Project 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
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assessing the work progress.
b. 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, 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:
(a) contract type;
(b) dollar value;
(c) criticality of the project;
(d) complexity of the work;
(e) performance records of firms within the
industry; and
(f) internal reporting requirements.
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.
c. 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) .
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8. Writing Specifications for Commercial Products.
a. 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.
b. Acquisition of commercial products begins with a
description of the Government's needs stated in functional terms
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.
c. An adequate purchase description should state the
Governments minimum needs and not be written so as to specify a
particular brand name, thereby precluding consideration of a
product manufactured by another company, unless--
(1) It is a valid sole source procurement; or
(2) The identification of a requirement by use of a
brand name is followed by the words "or equal." The brand-name-
or-equal description should be used as a last resort when a more
detailed description cannot be made available in time for the
acquisition. Talk to your CO for more details before submitting
the PR package.
d. A market research involves obtaining and analyzing the
following type information:
(1) The availability of products and an analysis of
their specifications;
(2) Catalog identification;
(3) 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;
(4) The distribution and support (maintenance and parts)
capabilities of potential suppliers;
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(5) Product warranty;
(6) Any laws or regulations relating to the control and
use of the product.
d. 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:
(1) Catalogs published by manufacturer, distributors,
and dealers;
(2) Source list for items of a similar nature
maintained at contracting activities;
(3) GSA Federal Supply Schedules?
(4) Informational requests for quotations;
(5) Other Federal agencies.
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CHAPTER 6 - PROPERTY AND DATA ISSUES
Table of Contents
1. Government Property 6-1
2. Property to be furnished and/or
Acquired Before Contract Award 6-3
3. Lease Versus Purchase Determinations 6-3
4. Acquisition of Excess Property 6-5
5. Vesting Title to Educational Institutions 6-6
6. Joint Use of Property by Contractor and EPA 6-7
7. Use of Property Purchase with Funds
of Another Agency 6-7
8. Contractor Use of Government Vehicles 6-7
9. Contractor Use the Federal Supply Services 6-8
10. Acquisition of Nonserverable Facilities 6-8
11. Rights in Data and Copyrights 6-9
12. Acquisition of Data 6-10
13. Definitions (data) 6-10
14. Delineating the Government's and
Contractor's Rights 6-11
5. Confidential Business Information 6-12
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CHAPTER 6 - PROPERTY AND DATA ISSUES
1. Government Property
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: (a) be provided with Government property under the
contract; (b) obtain Government property under the contract; or
(c) use Government property in its possession and (2) other
considerations to be addressed when the contractor will have use
of Government property. Chapter 5 of the Contracts Management
Manual also provides guidance on providing Government property to
contractors and improvements to non-Government realty.
b. Government property is classified into two main
categories: real property and personal property. 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.
c. Definitions.
(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) 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.
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(5) Condition Codes; An appraisal of current condition
of accountable property.
(6) Contaminated Property; Equipment/supplies that
become contaminated with toxics or other chemicals which render
them unsafe.
(7) 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.
(8) 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:
(a) 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
(b) Contractor-acquired property; property
purchased or otherwise provided by the contractor using contract
funds.
(9) 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 one 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 one year or more and must be accounted for by the
contractor at the conclusion of the contract.
(10) Personal property relates to types of property other
than real property, including such items as equipment, desks,
etc. Personal property is further subdivided into two
categories: expendable and nonexpendable.
(11) 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.
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(12) Real Property; Includes land and rights therein,
ground improvements, utility distribution systems, buildings and
structures. As well as additions and improvements to such
structures.
(13) 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.)
2. Property To Be Furnished and/or Acquired Before Contract
Award.
a. 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 identified in the
solicitation and discussed during negotiations with subsequent
incorporation into the official contract.
b. 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 explicitly stated in the contract
property article.
c. 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 in place?
3. Lease Versus Purchase Determinations.
a. Consideration should be given whether to lease or
purchase equipment based on a case-by-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.
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b. 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;
/ maintenance and other services costs;
/ Potential obsolescence of the equipment because of
imminent technological improvements.
c. 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;
y
/ 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.
d. Acquisition methods. 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.
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, a lease with option to purchase may be preferable.
However, such interim measures shall be fully discussed with the
Contracting Officer. Generally, a long-term lease should be
avoided.
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4. Acquisition of Excess Property.
a. 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 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.
b. Occasionally, EPA may be responsible for an overseas
return charge if the material 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.
c. 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.
d. Content of Needs Justification.
(1) Because of the seven areas to be considered, the
Needs Justification is sometimes called "the Seven-Point
justification." The Contracting Officer will not authorize a
contractor to (a) acquire property at Government expense,
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(b) be reimbursed for unauthorized property acquired (c) obtain
Government-furnished property/ or (d) use Government-owned
property in its possession until the Project Officer submits a
justification. This justification must be approved by the
program office division director or equivalent level and a level
above the Contracting Officer.
(2) As a minimum, the justification of need must:
(a) Identify the specific program and project for which
the property is required.
(b) Identify the type, quantity and estimated cost
(including any transportation or installation costs) of each item
of property required.
(c) Explain why the property is essential for contract
performance.
(d) 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. (This is
a very important element which must be documented with specific
details.)
(e) 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.
(f) 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.
(g) For equipment to be acquired by the Contractor at
Government expense, include a lease vs. purchase analysis (see
paragraph 3 on page 6-3).
(3) A justification of need is required regardless of
whether the need for the property is determined: (a) at
development of the requirement; (b) at proposal evaluation or
contract negotiations; or (c) after contract award.
5. Vesting Title to Educational Institutions.
a. 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
6-6
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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.
b. 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.
5. 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.
7. 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
custodianship, disposal of the property, etc.).
g. 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.
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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.
9. Contractor Use of the Federal Supply Service. Contractors
who have cost-reimbursement type contracts can be authorized to
acquire material from GSA, Federal Supply Service, 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.
10. Acquisition of Nonseverable Facilities
a. Definition. For the purpose of this section, nonseverable
or permanent improvements are considered to be improvements made
to non-Government-owned real property.
b. Background. Comptroller General Decisions (42 Comp. Gen.
480 and 46 Comp. 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.)
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.
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
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consistent with the standards of either 10 U.S.C. 2353 (if
applicable) or 42 Comp. Gen. 480.
e. Determination and Findings (D&F)/Approval Requirements
(1) Prior to award of a contract of the nature described
above, a determination and findings document must be prepared by
the Contracting Officer and forwarded to the Director, Office of
Acquisition Management.
(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.
f. Project Officer Informational Input to D&F. The
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.
11. Rights in Data and Copyrights.
a. 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
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protection of this data by EPA is necessary to encourage
qualified contractors to participate in EPA programs and apply
innovative concepts to such programs.
b. 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.
12. 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 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.
13. 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
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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.
(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 perform publicly and display publicly, in any manner
and for any purpose, and to have or permit others to do so.
14. Delineating the Government's and the Contractor's Rights.
a. 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.
b. FAR Part 27 prescribes policies, procedures and contract
clauses concerning patents, data, and copyrights. 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.
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15. Protection of Confidential Business Information.
a. Project Officers often are privy to information which
contractors consider to be highly confidential. Examples of such
confidential business information (CBI) include, but are not
limited to:
(1) Trade secret formulas, devices and identities of
chemicals;
(2) Industrial process information;
(3) Any financial data regarding a company (e.g.,
assets, profits, taxes), obtained from any source;
(4) Contractor-supplied information, generally,
including:
- Direct labor rates,
- Indirect rates: overhead, general and administrative,
fringe benefits, etc.
- Other contractor charges,
- Identities of their employees and their salaries,
- Monthly progress reports,
- Contractor proposals, and
- Fees.
b. Information contained in a document submitted by a
contractor does not become non-confidential by virtue of being
put into an Agency-generated document. Agency confidentiality
regulations require that the Agency protect from disclosure any
information which the contractor might consider CBI even if a CBI
claim has not been made.
c. The Trade Secrets Act, 18 U.S.C 1905, imposes criminal
liability on any Government employee who "publishes, divulges,
discloses, or makes known in any manner or to any extent not
authorized by law" trade secrets or confidential data. Care must
be taken not to discuss anything known about a particular
contractor to anyone (including other EPA employees) not having a
"need to know."
d. Certain environmental statutes administered by EPA (e.g.,
TSCA, FIFRA) contain provisions authorizing the Agency to
disclose to contractors information collected pursuant to those
statutes. However, information not collected pursuant to an
environmental statute from contractor A may not be disclosed to
contractor B unless contractor A has given written consent to
such disclosure.
e. The Office of General Counsel occasionally provides
training on CBI; they will also answer specific questions on CBI.
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CHAPTER 7 - ACQUISITIONS REQUIRING SPECIAL APPROVALS
Table of Contents
1. Procurement Request Approvals 7-1
2. Designated Office Approval 7-1
3. Management Approvals 7-6
4. Advisory and Assistance Services 7-7
5. Sensitive Contracting Areas 7-7
6. Management Approval of Advisory
and Assistance or Sensitive Services 7-8
7. Unsolicited Proposals 7-10
8. Quality Assurance Program Plans 7-11
g. Foreign Research Contracts 7-15
7-i
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CHAPTER 7 - ACQUISITIONS REQUIRING SPECIAL APPROVALS
1. Procurement Request Approvals
a. EPA management has established internal controls whereby
certain goods and services require clearances and/or 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 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 which moratoriums are in existence.
2. Designated Office Approval - Note that office approvals must
be obtained for the items listed below in addition to the
management approvals listed in the next section. Offices
designated below 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 property
delegation and official policies.
Item Description
Local Approval
Headquarters
Approval
1. All purchases,
regardless of
value (includes
all items listed
in this matrix.)
Program Office
None
2. Equipment,
equipment repair,
supplies or
furniture,
including
for bankcard
purchases not
exceeding $1,000.
FMSD or equivalent
field office *
None
3. Printing;
duplication; and
composition
Office designated
in Delegations
Manual, NO. 1-5
None
4. Advertisements
for acquisition of
real property
None
FMSD
7-1
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Item Description
Local Approval
Headquarters
Approval
5. Commerical
U-Drive Credit Card
None
FMSD, Delegations
Manual, NO. 1-4-A
6. Facsimile
equipment
None
FMSD, Delegations
Manual, NO. 1-4-A
7. Communications
equipment utilizing
the radio frequency
spectrum
None
FMSD/ Delegations
Manual, NO. 1-4-A
8. Watercraft over
25 feet or $15,000
or aircraft of any
value
None
FMSD/ Delegations
Manual/ NO. 1-4-A
9. Purchase or
lease/hire for 60
or more consecutive
days of passenger
vehicles or light
duty trucks
None
FMSD/ Delegations
Manual, NO. 1-4-A
10. Purchase or
rental of copying
machines and
printing equipment
None
FMSD/ Delegations
Manual/ NO. 1-4-A
11. Repair and
improvement
construction
FMSD or EPO
Delegations Manual,
NO. 1-4
FMSD (For use of
Building and
Facilities funds)
12. Equipment,
services for
creation, organi-
ation, maintenance
and disposition of
Agency records and
files including
micrographic
services and
systems.
Limited offices as
designated in the
Delegations Manual
NO. 1-1. Also, see
the Records
Management
Manual.
None
7-2
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Item Description
Local Approval
Headquarters
Approval
13. ADP equipment,
software
maintenance and
services, including
those related to
computer-related
micrographic
systems, word
processing, time
sharing,
feasibility
studies, and
requirements
analyses.
None
Office of
Information
Services
(Delegations Manual
NO. 1-10)
14. Paid
advertising for
recruitment of
personnel in
newspapers, trade
journals of
national or
international
circulation.
Local office of
personnel
(Delegations Manual
NO. 1-2)
None
15. Collecting
identical
information or
statistical data
from ten or more
persons.
None
AA for Office of
Policy, Planning,
and Evaluation
(Delegations Manual
NO. 1-22)
16. Protective
services and
equipment,
including guard
protection,
security alarms,
safes, and
monitoring and
detection services.
None
FSMD (Delegations
Manual NO. 1-6)
17. Government-
provided in-bound
and direct dial
out-bound long
distance service,
e.g./ 800 service
for hotlines.
None
OARM, NDPD,
telecommunications
7-3
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* FMSD approval required to ensure that equipment or furniture
is not available from Agency stock; supplies are not available
from GSA or EPA Supply Stores; or equipment repairs cannot be
made under existing BPA's.
a. Printing and Binding. The Government Printing and
Binding Regulations, published by the Congressional Joint
Committee on Printing, place certain restrictions on sources that
must 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. Examples of provisions
for duplicating and copying that require these services to be
provided by GPO, unless there are exceptional circumstances, are
as follows:
(1) 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.
(2) Duplication of documents reproduced in color.
(3) 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/ 3204, in the Facilities and Support Services
Division.
b. 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 EPA and 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.
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c. Automatic Data Processing (ADP1.
(1) Definition. ADP Equipment (ADPE) means general
purpose, commercially available automatic data processing
equipment or devises. 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:
(a) Digital, analog, or hybrid computers;
(b) 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;
(c) Punched card machines; and
(d) 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:
(a) pre-packaged, commercially available, proprietary computer
programs; and (b) 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
(a) 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.
(b) ADP-support services means source data entry,
conversion, training, studies, facility management (other than
for central facilities managed by NDPD, RTF), systems analysis
and design, programming, and equipment operations that are
ancillary and essential to agency ADP activities.
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(4) ADP Equipment Maintenance Service Definition.
ADPE maintenance service means those examination, testing,
repair, or part replacement functions performed to:
(a) Reduce the probability of ADPE malfunction
(commonly referred to as "preventive maintenance")
(b) Restore to its proper operating status a component
of ADPE that is not functioning properly (commonly referred to as
"remedial maintenance")
(c) Modify the ADPE in a minor way (commonly referred
to as "field engineering change" or "field modification").
(5) 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.
(6) Protective Services.
(a) 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.
(b) Physical security includes those measures
employed to provide protection against security hazards for
personnel, property, Government funds and negotiable instruments,
classified national security information and material,
proprietary information, and facilities.
(c) 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.
3. Management Approvals. The following approvals apply to all
procurement requests except those to add funds to incrementally
funded contracts. These approvals are in addition to the
designated office approvals.
a. Procurement Requests for Advisory and Assistance
or sensitive/vulnerable Services:
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(1) Services under the small purchase threshold must be
approved Program official at least one organizational level above
the initiating office. When award is made during the fourth
quarter, a program official at least two organizational levels
above the initiating office.
(2) Services other than small purchases, but not in
excess of $5,000,000 must be approved by a Program official not
below the level of Associate, Assistant or Regional
Administrator, Inspector General, or General Counsel.
(3) Services exceeding $5,000,000, in addition to
approvals in (2) above, approval is required by the Assistant
Administrator for Administration and Resources Management.
(Assistant Administrator or Equivalent at HQ or the Regional
Administrator in the Regions should make the request for
approval). Requests in this category must be routed through the
Director, Office of Acquisition Management.
b. Small purchases, not in the category listed in paragraph
a, should be approved in accordance with program office
procedures. Requirements, not in the category listed in
paragraph a, which exceed the small purchase threshold should be
approved by a Program official designated by the Associate,
Assistant, or Regional Administrator, Inspector General or
General Counsel.
4. Advisory and assistance services (AASK OMB Circular A-120
dated January 4, 1988, defines advisory and assistance services
as those services acquired from non-governmental sources by
contract or by personnel appointment to support or improve agency
policy development, decision-making, management, and
administration, or to support or improve the operation of
management systems. A special justification for AAS must be
prepared by the requesting office and approved in accordance with
the management approvals discussed in paragraph 3. After
consultation with the Project Officer, the Contracting Officer
will determine if the services requested are advisory and
assistance services and are appropriate for performance by
contractors.
5. Sensitive Contracting Areas. Certain activities when
performed under EPA contracts may place EPA in a vulnerable or
sensitive position if adequate controls are not implemented. A
listing of these sensitive contracting activities is included in
EPA Order 1900.2 (which is attached to Chapter 2 of this
Handbook). These sensitive contracting areas require the same
justification and approval as advisory and assistance services
under paragraph 3 above.
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6. Management Approval of Advisory and Assistance or Sensitive
Services. The following format shall be used for approval of
advisory and assistance or sensitive services valued over
$5,000,000:
MEMORANDUM
SUBJECT: Approval of Advisory and Assistance/Sensitive Services
FROM: (Assistant Administrator for Requesting Office)
THRU: (Deputy Assistant Administrator for Finance and
Acquisition)
TO: (Assistant Administrator
Office of Administration and Resources Management)
I am requesting your approval of a proposed acquisition
involving advisory and assistance services as defined in Office
of Management and Budget (OMB) Circular A-120. In accordance
with Agency policy, your approval is required for all contracts
over $5,000,000 involving services designated by OMB as "advisory
and assistance" or sensitive and vulnerable as defined in EPA
Order 1900.2.
Under solicitation number (insert solicitation number),
(indicate number and type of anticipated contract awards) will be
awarded with a period of performance (insert length of base
period and number and duration of option periods) for a total
maximum contract value of (insert total maximum contract value).
The proposed acquisition, (insert title), is necessary to support
our program in the following areas:
(describe briefly the services to be performed under the
proposed acquisition)
In accordance with OMB Circular A-120, I certify that the
services to be performed will not:
1) unnecessarily duplicate any previously performed work or
services;
2) be'used in performing work of a policy decision-making or
managerial nature;
3) be used to bypass or undermine personnel ceilings, pay
limitations or competitive employment procedures;
4) be contracted for on a preferential basis to former
Government employees;
7-8
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5) be used specifically to aid in influencing or enacting
legislation; or
6) be used to obtain professional or technical advice which
is readily available within the Agency or another Federal
agency.
Accordingly, it is determined that the requested services are
appropriate and meet the requirements of OMB Circular A-120, the
Federal Acquisition Regulation 37.2, and applicable EPA guidance.
In accordance with EPA Order 1900.2 and Office of Procurement
Policy Letter 92-1, the attached management controls are adequate
to ensure that Agency officials remain accountable and retain
control over the contractor's product. In summary, this contract
will utilize the following management controls (describe briefly
the management controls to be implemented under the proposed
acquisition) to assure that the proposed contractor services will
not place EPA in a vulnerable position and will ensure that
Government policy is not being created or unduly influenced by
contractors, and that contractor employees will not be assumed to
be EPA employees.
CONCUR:
Contracting Officer Date
Project Officer Date
0AM Division Director Date
Betty L. Bailey, Director Date
Office of Acquisition Management
APPROVED:
Assistant Administrator Date
for Administration and Resources Management
Attachments
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7. Unsolicited Proposals. 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.
[Refer also to Chapter 3 of the Contracts Management Manual.]
a. Control and Processing. A centralized control point has
been established in the Office of Grants and Debarment (OGD) to
process unsolicited proposals regardless of where they are
received in the Agency. After acknowledging receipt, OGD assigns
to each proposal a control number and transmits the proposal to a
program office for purposes of evaluating its relative technical
merit.
b. If the program office decides to fund the proposal as a
grant or cooperative agreement, the proposal will be returned to
OGD for further processing. Where a contract is the appropriate
instrument, a procurement request must be prepared and forwarded
to 0AM.
•fr Some important points to remember are:
4 An unsolicited proposal is exactly that: "unsolicited."
Project Officers should not involve themselves in
suggesting or requesting that a firm submit an
"unsolicited proposal."
4 Ethical/legal considerations impose
restrictions on the disclosure and use of data submitted
with a proposal.
4 Unless precluded by ethical/legal considerations, 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.
* Only the Grants Administration Division is authorized to
copy, photograph, or reproduce any parts of unsolicited
proposals.
* 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.
+ EPAAR provides for mandatory cost sharing for most
unsolicited proposals, except in cases where there is no
measurable gain to the performing organization.
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8. Quality Assurance Program Plans.
a. 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
b. The determination of QA applicability shall be certified
on a Quality Assurance Review (QAR) Form. 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
shown below is included.
QUALITY ASSURANCE REVIEW FOR EXTRAMURAL PROJECTS (CONTRACTS)
I. GENERAL INFORMATION
Descriptive Title:
Sponsoring Program Office:
Approximate Dollar Amount:
Duration:
II. This contract requires environmental measurements
(YES)
Complete form; (NO) sign form and submit with the
procurement request.
III. Quality Assurance Requirements (Projects involving
environmental measurements):
YES NO
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
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contract proposal.
YES NO
b. Submission of a written QA project plan is to be
included in the contract proposal.
YES NO
c. A written QA project plan is required as a part of
the contract.
YES NO
d. Performance on available audit samples or devices
shall be required as part of the evaluation criteria (see list on
the next page).
YES NO
e. An on-site evaluation of the offerer's facilities
will be made to ensure that a QA system is operation and exhibits
the capability for successful completion of this project (see
schedule on the next page).
YES NO
f. QA reports will be required (see schedule on the
next page).
IV. Determination (Projects involving environmental
measurements)
Percentage of technical evaluation points assigned to
QA .
Project Officer estimate of percentage of cost allocated to
environmental measures
For each parameter measured attach a summary which provides the
following information:
a. Is QC Reference sampling or device available?
b. Are there split samples for cross-comparison?
c. Is it required for pre-award?
d. Specify frequency during the contract.
QA System Audits are required: Pre-award ;
during the contract .
QA Reports are required: with Progress Reports ;
with the Final Report .
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The signatures below verify that the QA requirements have been
established.
QA Officer: Project Officer:
Signature Signature
Date Date
(1) 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.
c. Offeror's Statement. 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:
(1) 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.
(2) 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.
(3) 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.
(4) 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.
(5) The background and experience of the proposed
personnel relevant to accomplish the QA specifications in the
Statement of Work.
(6) The offeror's general approach for accomplishing the
QA specifications in the Statement of Work.
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c. 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 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:
(1) Title page with provision for approval signatures.
(2) Table of contents.
(3) Project description.
(4) Project organization(s) and responsibilities.
(5) Quality Assurance objectives for measurement data in
terms of precision, accuracy, completeness,
representatives and comparability.
(6) Sampling procedures.
(7) Sample custody.
(8) Calibration procedures, references, and frequency.
(9) Analytical procedures.
(10) Data reduction, validation, and reporting.
(11) Internal quality control checks and frequency.
(12) Quality Assurance performance audits, system audits,
and frequency.
(13) Quality Assurance reports to management.
(14) Preventive maintenance procedures and schedules.
(15) Specific procedures to be used in routinely
assessing data precision and accuracy,
representativeness, comparability, and completeness
of the specific measurement parameters involved.
(16) 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.
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e. Pre-Award Audits.
(1) 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.
(2) Some or all of the following areas of concern will be
addressed, as appropriate, to the contract scope and goals: (a)
facilities, (b) equipment, (c) methods, (d) Quality Control
Systems, (e) recordkeeping, (f) data validation, (g) maintenance
and calibration procedures, (h) reporting, (i) adherence to
documented procedures, (j) procurement and inventory procedures,
(k) personnel training, and (1) feedback and corrective action.
(3) Costs of the audit must be borne by individual
offerers. Such costs will be limited to the personnel time
required to coordinate the on-site systems audit.
(4) As an alternative, offerers in the competitive range
may be required to participate in a (Quantitative) Performance
Audit. The objective of this audit is to assess offerers'
potential for producing a quality of data which meets project
objectives. Quantitative audit techniques involve the use of
reference materials of known composition or value and/or
splitting of samples for independent analyses, independent
calibration checks on individual system components, and/or the
use of co-located samplers.
(5) A complete record of information including printouts,
graphs, calibration charts, and all other pertinent information
used to arrive at reported results will be included with the test
results as part of the best and final offer.
(6) The measurement techniques to be audited will be
defined by the Project Officer. Costs of participation in a
performance audit shall be borne by the individual offerers.
9. 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.
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CHAPTER 8 - DEVELOPMENT OF THE PROCUREMENT REQUEST
Table of Contents
I. Introduction 8-1
2. The Procurement Rationale Checklist 8-2
3. The Attachments 8-3
4. Item Descriptions 8-5
5. Additional Attachments Not Listed in the
32 Point Checklist 8-20
6. Notify the CO Concerning the Following 8-22
8-i
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CHAPTER 8 - DEVELOPMENT OF THE PROCUREMENT REQUEST
1• Introduction.
a. 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.
b. 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.
c. The Procurement Request Package is made up of the 32
POINT PROCUREMENT REQUEST RATIONALE CHECK LIST and its
ATTACHMENTS. Some of the attachments are required for all
procurements and others are only required when the specific
nature of the procurement dictates their use (i.e. Gov. Furnished
Property, limitation of sources, Advisory & Assistance Services,
high dollar value).
d. Preparation. To assist you in the preparation of the
Procurement Request Package, the 32 POINT PROCUREMENT REQUEST
RATIONALE CHECK LIST explanatory notes are included which will
assist you in answering the questions and preparing the necessary
documents. A concise version of the 32 POINT PROCUREMENT
REQUEST RATIONALE CHECK LIST is found in the Contract Management
Manual, Chapter 2.
IN ALL CIRCUMSTANCES WHERE IT IS FELT THAT ADDITIONAL
INFORMATION OR DIRECTION IS NEEDED TO PREPARE THE
PROCUREMENT REQUEST PACKAGE, THE PROJECT OFFICE IS
ENCOURAGED TO CONTACT THE RESPONSIBLE CONTRACTING
OFFICER.
8-1
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NOTE; Because the Statement of Work (SOW) and the creation of
the Technical Evaluation Criteria and explanation of the
Technical Evaluation Process comprise a critical and substantial
portion of the Procurement Request Package, these ATTACHMENTS to
the 32 POINT PROCUREMENT REQUEST RATIONALE CHECK LIST are
addressed in Chapters 5 and 9 of this Handbook.
2. The PROCUREMENT REQUEST RATIONALE CHECKLIST (to be submitted
with EPA Forms 1900-8 and 1900-8A)
Item 1: The title of this procurement is
The Title of the procurement is needed to identify the
procurement action.
Item 2: This procurement request package contains the following
documents. (Check all applicable boxes and attached
documents as appropriate.)
See Attachment
Check
Description
EPA Form 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)
D&F to provide full and open
competition after exclusion of
source (see FAR 6.2)
Justification for Advisory and
Assistance Services
Justification of Need (Government
Furnished Property (GFP)/
Equipment)
Quality Assurance (QA) Review
Form
Recommended Sources List
Reports Description
Government-Furnished Property
Description
Discussion of controls for
sensitive contracting
Discussion of how procurement
fits into overall the
contracting strategy (if
required)
8-2
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3. The Attachments. The project office must complete and provide
the attachments which are required for the procurement action.
An explanation of these and additional attachments is provided at
the end of this check list.
a. EPA Form 1900-8 "Procurement Request/Order" This
document provides funding for the procurement. When initiating a
procurement a "planning purpose" 1900-8 is used which does not
commit funds. However, the planning purchase request must
provide the estimated dollar value of the procurement and the
Allowance Holder Code, and the date funds are expected to be
available. The request must be signed by the same officials
required to authorize funding documents. Before a contract award
is made, the PO must provide 0AM with a funded "Procurement
Request/Order." Additionally, per OAM memo entitled "Accuracy of
Procurement Request Funding Data," dated 28 June 1993, program
offices must attach a copy of the IFMS Requisition Accounting
Line Inquiry Screen for each line of accounting data.
b. The procurement abstract is the basis for the
procurement synopsis contained in the Commerce Business Daily.
It should include:
(1) name of the office to be supported,
(2) a brief statement of the type of work required,
(3) the desired qualifications of a contractor so that
the contracting community has enough information
to decide if they are qualified to pursue the RFP,
(4) a statement of whether the procurement is to be
openly competed or set-aside for small businesses,
8(a) firms or contain some other restriction,
(5) information on the magnitude of the requirement,
i.e. for level-of-effort contracts the period of
performance and maximum potential level-of-effort.
c. Concise Technical Proposal Instructions. [Required for
all procurements for services.] The Solicitation has general
instructions to each offerer for preparing the technical
proposal. The Program Office may add additional specific
instructions if it so chooses. These additional instructions may
also include guidelines for proposal preparation (e.g. suggested
length, organization, use of charts, etc.). Additionally, each
solicitation for services includes boiler plate language
designating the labor classifications and setting forth standard
experience and educational qualifications. If the standard
classifications and/or qualifications do not meet the
requirements of the project office, a separate classification
and/or qualification statements should be developed and furnished
with the Procurement Request.
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d. Competitive Technical Evaluation Criteria. [Required
for all procurements.] This document contains an explanation of
the Government's evaluation process. It must state that the
Government will evaluate how well, to what extent, how many, how
often, etc., the offerer demonstrates its capabilities in the
specified areas of performance, skill and ability. It will also
state the relative importance the Government places on each of
these areas. For further information, please refer to Chapter 9
of this Handbook.
e. Justification for Other Than Full and Open Competition
(JOFOC). The Federal Acquisition Regulation requires that
procurements be awarded on a competitive basis in all practicable
instances. However, there are times when full competition is not
possible. The FAR part 6.302 lists the seven (7) circumstances
which permit other than full and open competition according to
the law.
They are:
(1) Only one responsible source and no other supplies
or services will satisfy agency requirements.
(2) Unusual and compelling urgency.
(3) Industrial mobilization; or engineering,
development, or research capability.
(4) International agreement.
(5) Authorized or required by statute.
(6) National security.
(7) Public interest.
A justification must fall within one of these areas before a
procurement will receive restricted or non-competitive
consideration. Requests which result from the lack of planning
for future contracts DO NOT fall within one of these areas. It
is important that the project office be aware of the time it
takes to place a contract and to plan accordingly.
f. The form in the CMM, page 2-F4-1 is to be completed by
the Project Office. Chapter 3 of this Handbook contains a
detailed section on the preparation of the JOFOC. Because non-
competitive procurement procedures are discouraged, the project
office is advised to contact the procurement office as soon as a
non-competitive procurement is contemplated to discuss the
rationale for the action and to receive direction and guidance on
the need and development of the JOFOC. This will speed up the
acquisition process and help eliminate wasted effort.
g. D&F to provide full and open competition after exclusion
of sources [FAR 6.21. If it is determined that one or more
sources of supply or services should be precluded from competing
on a procurement action in order to establish or maintain an
alternative source or sources, and that such action will likely
8-4
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result in reduced overall costs for the acquisition, this
justification shall be provided. This determination is not
related to set-asides for small or disadvantaged businesses or
labor surplus area concerns. The Responsible Associate Director
is delegated authority to make the D&F per EPAAR 1506.2.
h. Quality Assurance (OA) Review Form fEPAAR 1546.2011.
This form documents the need to assure that environmentally
related measurements are scientifically valid. The PO indicates
on the form whether environmental measurements will or will not
be required. The form must be fully completed if the procurement
is in excess of $25/000 and the accounting data object class is:
25.32 R & D contracts
25.35 Program contracts
25.47 Occupational Health Monitoring
25.49 Other work related to Occupation Health & Safety
26.01 Laboratory Supplies
31.01 Scientific & Technical Equip.
The Quality Assurance Officer shall be designated as a member of
the Technical Evaluation Panel if the estimated value of the
procurement is over $500,000. See Chapter 6 of this Handbook.
[See CMM Ch. 2.5(a)(2) and fill out form provided in CMM page 2-
F3-1&2J
i. Discussion of how procurement fits into overall
r-nntractinq strategy (if required\. This information shall be
submitted if the Project Office has developed a long-term
contracting strategy.
4. Item Descriptions.
Item 3: This procurement [ ] involves/ [ ] does not involve
advisory and assistance services (AAS) or sensitive contracting
areas. (If such services are involved, attach a copy of the
justification required by Chapter 2 of the Contracts Management
Manual, the original should be forwarded in accordance with
Chapter 2.) For both AAS and sensitive contracting areas, attach
a discussion of how the procurement fits into your overall
contracting strategy. (See Chapters 2 and 6 of this Handbook for
further information.)
Advisory & Assistance or Sensitive Contracting areas
question and attachments.
[Ref.: CMM Ch. 2, pages 2-4 and 2-A-l through 2-A-9]
A&A services include:
1. individual experts and consultants
2. studies, analyses and evaluations
3. management and professional support services
4. engineering and technical services
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NOTE: The many EPA contracts involve AAS. If you believe your
procurement does not fall into this category, contact your CO for
a determiniation of whether or not this requirement applies.
Per OMB Circular A-120, para. 7, the A&A approval must
address the reasons for use and make the certifications
summarized as follows. The A&A services shall not be:
1. used for policy, decision-making, or managerial
work which is the direct responsibility of Agency
officials,
2. used to bypass personnel ceilings, etc.
3. awarded preferentially to former Gov. employees,
4. used to aid in influencing or enacting
legislation,
5. procured through grants or co-op agreements, and
6. used to obtain professional or technical advice
which is readily available within the Government.
NOTE: The Statement of Work and other documents must support and
be in agreement with this determination.
For Vulnerable/Sensitive Contracting areas, i.e. budget
preparation support, reg. support, policy support, eval. of
another EPA contractor, etc., prepare certification per CMM
Ch. 2. (page 2-C-l). Documentation similar to that for A&A
Services is required. (See Chapters 2 and 7 of this
Handbook for more details.)
Item 4: This procurement [ ] involves/ [ ] does not involve
legal analysis. I have/ [ ] have not [ ] discussed this
procurement with the Office of General Counsel which [ ]
concurs/[ ] does not concur with proceeding with this
procurement.
Legal Analysis Procurement question. This refers to legal
services for analyzing & interpreting the law; not to be
confused with litigation & regulatory support services. If
the procurement is for legal services OGC must concur.
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.)
Over the past several years, organizational conflict of
interest (OCI) has been the object of mounting concern.
This has been the subject of hearings held before the Senate
Committee on Governmental Affairs and it has also been a
major issue of concern in reports issued by The Office of
Technology Assessment (OTA) and General Accounting Office
(GAO). In acknowledgement of this concern the Agency has
put an increased emphasis on conflict of interest issues.
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If the Government were to award a contract to an offerer
whose potential for a conflict of interest is clearly
recognizable when comparing its business activities with its
Government contract obligations, the Agency's credibility
with the public could be severely damaged. Such a loss of
public confidence in the integrity of the Agency's programs
could adversely affect EPA's ability to execute
environmental initiatives.
The Agency cannot risk relying upon contractors for
management support who, by the very nature of their other
work, either directly or through another firm, will place
themselves in actual or potential conflict of interest
situations. Consequently, the Agency has developed policies
and procedures to avoid, mitigate or neutralize actual or
potential conflicts of interest. Included in these policies
are provisions which allow the Contracting Officer to
prohibit any firm from receiving an award for a management
support or advisory and assistance service contract if it is
determined that actual or potential conflicts of interest,
or the appearance of such, could occur if the firm were to
perform the management support or advisory and assistance
services. Such a determination is made on a case-by-case
basis by comparing the statement of work with the
representations made by each offerer regarding their
business activities and affiliations. These policies and
provisions also provide for the establishment of safeguards
for avoiding and for identifying, mitigating and
neutralizing conflicts of interest during contract
performance.
If it is determined that firms performing certain types of
work would be put in a conflict of interest situation by
their very acceptance of this contract, the Project Officer
shall document and give examples of all areas in the
Statement of Work where a potential for COI exists. If the
Contracting Officer agrees with the PO's documentation the
CO will seek approval to exclude firms which perform the
identified type of work from receiving an award under this
procurement action. (Exempting Response Action Contractors
from performing EPA management support type contracts is an
example of this situation.) fRef.t FAR 9.5. QAM Procurement
Police Notice 91-06. dated 23 Jul 911
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
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Special EPA employees listed. [Ref.: EPAAR 1503.600-71]
A special EPA employee is an EPA officer or employee who is
retained, designated, appointed or employed for not more than
130 days during any period of 365 consecutive days. EPA has
developed a policy regarding the placement of contracts with
such employees within 365 days of the termination of their
employment to preclude conflicts of interest. The Project
Office must identify these employees to insure that this
policy is observed. (NOTE: Regular EPA employees are not
mentioned in the checklist but are mentioned in the EPAAR
reference.)
Item 7: This procurement [ ] is/ [ ] is not based on an
Unsolicited Proposal.
Unsolicited proposal question. [CMM Ch. 3] Special
procurement rules apply for awarding a contract based on an
unsolicited proposal. All unsolicited proposals are to be
forwarded to the Office of Grants and Debarment of 0AM for
processing. A copy of the technical proposal will be
returned to the appropriate technical office for technical
evaluation. (See Chapter 6 of this Handbook for further
information.)
Item 8: NOT USED
Item 9: The name of the proposed Project Officer is
. He/she [ ] has/ [ ] has not been
certified as an EPA Project Officer.
The project office, Division Director or higher, shall
designate a Project Officer for each procurement action. The
Project Officer shall not act in that position until proper
certification has been obtained, and thereafter shall perform
the responsibilities of the position within the limits of the
certification, barring any waiver. The certification process
is delineated in chapter 7 of the Contracts Management
Manual. To become certified, the designated individual must
complete two courses, the Basic Project Officer Training
course and Contracts Administration course. Certification is
requested through EPA form 1900-65 (6-85) DESIGNATION AND
APPOINTMENT OF PROJECT OFFICER/WORK ASSIGNMENT
MANAGER/DELIVERY ORDER OFFICER and is approved by the
Contracting Officer.
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Item 10 : I [ ] recommend/ [ ] do not recommend prospective
sources for this procurement. (If sources are recommended, list
in an attachment.)
Sources Recommended question. The RSL is a list containing
the names of contractors that, in the PC's professional
judgement or experience and from sources identified through
the Office of Small Disadvantaged Business Utilization,
possess the relevant capabilities to perform the resultant
contract. There is no standard form to follow. The list
contains the names and addresses of the contractors.
Item 11: This procurement anticipates [ ] a new contract award/
[ ] an additional work modification to existing contract no.
. It also anticipates that it will be processed as
a [ ] competitive procurement/ [ ] other than full and open
competition. (Note: If other than full and open competition is
recommended; (a) attach appropriate justification as described in
Part 1506 of the EPA Acquisition Regulation. Also see sample
format (Figure 2-4 in the CMM). Attach the Project Officer's
Certification that the data provided in the justification is
accurate and complete.)
New contract or Modification question, (self explanatory)
Competitive or Non competitive question and attachment.
[Ref.: FAR 6.3; see EPAAR 1506 for JOFOC execution] [Also
attach PO certification, CMM Figure 2-F4.] Procurements can
be placed non-competitively if one of the following
conditions exists.
1) Only one responsible source,
2) Unusual and compelling urgency,
3) Need for industrial mobilization,
4) International agreement,
5) Authorized or required by statute,
6) National security
7) Public Interest
NOTE: EPAAR specifically mentions the use of #1 & #5 in EPA
considerations.
Item 12: This proposed procurement is appropriate for [ ] total
small business set-aside/ [ ] total small business/labor surplus
area (SB/LSA) set-aside; or [ ] partial SB/LSA set-aside;
[ ] 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 Disadvantaged Business Utilization for
advice.
Set-aside question. All procurement requests are to be
processed through The Office of Small and Disadvantaged
Business Utilization (OSDBU) whose review responsibilities
are set forth in EPAAR 1519.201-2(c)(3). As indicated in
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the checklist, the project office is to consult with the
OSDBU and Prepare EPA Form 1900-37 "Record of Procurement
Request Review."
This form, accompanied by a copy of the Statement of Work
and a Project Officer recommendation regarding the extent of
competition desired (i.e. open, complete or partial set-
aside for small business or other minority, 8(a), etc.),
shall be forwarded to the Small and Disadvantaged Business
Utilization officer for review and recommendation.
(NOTE: For information on set-asides see: for Small Business
Definition - FAR 19.001; Set-asides explained - FAR 19.501 &
19.502; for Labor Surplus Areas Definition - FAR 20.101.)
Item 13: (a) The estimated period of performance is
months after the effective date of the contract [ ] inclusive/
[ ] exclusive of submission of any final report which may be
required.
(b) The schedule of deliverable items (excluding reports) is
as follows. Check here if no deliverable items are required [ ].
Delivery
Item No. Description Quantity Date
If the Project office anticipates a contract period of
performance exceeding 36 months, a written justification must
be forwarded with the acquisition request package. EPAAR
1517.202(b) requires approval, by the Chief of the
Contracting Office, prior to the release of the solicitation.
The justification must include a detailed rationale for the
increase. For example, if the effort is considered long term
and disruption of the contract would, in some way, be
detrimental to the Agency then this would constitute a viable
reason to extend the period of performance.
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)
The Contracting Officer is responsible for justifying, to
the Head of the Contracting Activity, the rationale for
contract option quantities in excess of 50% of the base
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quantity. This applies to each year of performance under
service contracts. The justification must be supplied by
the Project Office. It is a Project Office responsibility
to adequately estimate the amount of effort necessary to
complete a specific contract. When labor in excess of 50%
of the base quantity is requested, OAM will question the
validity of the government estimate. A legitimate reason
for the increase might include the fact that the intended
work is such that no specific measurement can be made to
gauge future work and an increase in the base is the only
way to insure contract coverage.
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 reviews
comments, 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
progress reports, financial progress reports and final reports.
Contractor to furnish Reports question and attachment.
Attach Reports Description(s).
Item 16: Peer review of Contractor-generated documents [ ] will
be/ [ ] will not be required.
Contractor Peer Review question . [Ref.: EPA Order 2200.4A
"EPA Publications Review Procedure"] This question refers
to scientific review of documents/deliverables.
Item 17: Government property, data, or services [ ] will be
furnished/ [ ] will not be furnished under this procurement.
(If furnished, describe in an attachment including quantity and
date available.
Government Furnished Property, Data, Services question.
Will the Government provide anything which the contractor
will need in order to fulfill its contractual obligations?
This includes data or other written material. All
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Government furnished items must be clearly defined. If
Government Furnished Property (GFP) is provided such action
must be justified. If the Government is going to provide
property to the contractor, the project office shall furnish
an attachment giving a complete description of the property,
its estimated value, its condition and an indication whether
it will be consumed by the contractor during performance of
the contract. Consult the EPA Property Manual, and CMM,
Chapter 5 for complete information in this area.
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
sub-items 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.
Note on para (c): Cost reimbursement contracts for
services often need a general category for billing small
miscellaneous expenses other than labor which are
directly related to the performance of this contract.
These are designated as Other Direct Costs (ODCs) and may
include office supplies, testing equipment, travel,
periodicals, etc. which the contractor uses exclusively
in the performance of this contract. The Project Office
should specify the maximum dollar amount which the
contractor will be allowed to use for ODCs out of the
total amount of the contract. Amounts should be
specified for each base and option period in the
contract. The Contracting Officer will enter these
ceiling amounts in the RFP.
Note on para (d): For level-of-effort contracts where
services are being purchased, the solicitation contains
estimated levels-of-effort (labor hours). This is done
for budgeting purposes and for standardization in
evaluating the proposals. The Project Office must
provide this information for inclusion in standard
proposal instructions in the RFP. If the Project Office
designates the use of labor classifications other than
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those set forth in the standard solicitation language
(Section L clause entitled "Definition of Labor
Classifications"[EP52.215-120], as prescribed by Section
L clause entitled "Instructions for the Preparation of
Technical and Cost or Pricing Proposals" [EPAAR 1552.215-
73], para. (t>)(2)), then this information should be
included as part of the Additional Proposal Instructions.
Independent Government Cost Estimate (IGE)
[Required for all procurements]
This is a detailed estimate of how much the Government
thinks the contract will cost. Proposals for cost
reimbursement contracts are evaluated on the
reasonableness of proposed costs rather than on low
price. Therefore the IGE is essential to the Government
in determining if the proposed costs are reasonable.
The IGE must be developed without any contractor
assistance. The IGE is the government's best estimate
for the realistic cost of the project. The IGE should
contain the rationale as to how the estimate was
developed, whether it was based on historical costs to
date or current cost of similar efforts of the same size
and scope, etc. The IGE describes the labor hours
required by category (Professional level/P-level) within
the base and optional periods, the travel costs
anticipated, and Other Direct Costs (ODC) such as
equipment, consultants, or computer time. It is
important to provide estimates of the ODC and Travel
costs as part of the IGE as these figures may be provided
to the offerers in the solicitation.
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.)
OMB Circular A-76 question. It is not the Government's
intent to be in competition with private business.
Therefore, if a commercial or industrial item or activity
can be obtained from the private sector for less than it
would cost the Government to make the item or perform the
same activity, it should be obtained from the private
source. However, if the Government has the capability to
perform the requirement and can do it for less than any
private source the item shall be made or activity shall
be performed "in-house." If the Government has not
developed the capability or capacity to make the item or
perform the activity the procurement is not subject to
the requirements of OMB Circular A-76. Inherently
Government functions are outside the scope of this
Circular.
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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
Priority processing question. The procurement office
establishes a procurement milestone schedule for each
procurement based on work load and does its best to meet the
requirements of each project office. If the project office
requests priority processing, a special effort will be made
on the part of the procurement office to closely coordinate
all aspects of the procurement with the project office and
expedite individual elements of the procurement process in
as far as possible.
The Procurement Request must include a written justification
specifying the necessity for priority processing as it
relates to program objectives and the Agency's mission.
The request shall be forwarded to the appropriate Chief of
the Contracting Office who will review and must approve the
priority justification and determine priority assignment.
The appropriate contract operations office will keep the
program officer advised of the status of the request for
priority procurement.
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.
Item 21: This procurement [ ] will/ [ ] will not involve the
testing of human subjects in accordance with EPA Order 1000.17.
Human subject testing question, (self explanatory)
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.)
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The certification must indicate and demonstrate that the
primary purpose of membership is to obtain direct benefits
for EPA and are 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.)
The certification shall address the requirement of FAR
8.1102, which generally indicate that leased vehicles:
1) must meet prescribed fuel economy standards,
2) must be essential to the agency's mission as certified
by the head of the agency/
3) must meet any agency requirements or approvals, and
4) must not be available from GSA.
Item 24: This procurement [ ] is/ [ ] is not to be funded from
more than one appropriation. (If affirmative, see Chapter 9 of
the CMM and the memorandum from the Comptroller and the Director,
Office of Administration on "Contracts Funded from Multiple
Accounts—Procedures for Identifying Contract Costs," May 14,
1985.) [CMM, Ch. 9, para. 9.6 e.(l).]
This document must be developed for any contract that is
expected to be funded from more than one appropriation, as
required by the Contracts Management Manual and memorandum
entitled "Contracts Funded from Multiple Accounts—
Procedures for Identifying Contract costs," May 14, 1985,
from the Comptroller and the Director, Office of
Administration. The rationale document must state the
estimated allocation of the appropriations to be used as a
percent of the total funding of the contract. This
allocation formula should coincide with the benefits
expected to accrue to program areas funded by the respective
appropriations as a result of the services performed -under
the contract. The document requires approval by the
Director, HQ Financial Management Division (3303).
Item 25: This procurement [ ] will/ [ ] will not involve
statistical surveys, data collection, using questionnaires, or
statistical analysis of survey data. {If affirmative,
procurement office will include instruction in solicitation for
offerers to obtain the EPA Survey Management Handbook).
SOW requires surveys and data collection question. [Ref.:
Paperwork Reduction Act; EPA Survey Management Handbook)
If, in the performance of this contract, the Contractor is
required to solicit the same or similar information from ten
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or more public respondents (anyone other than a Federal
agency or its employees) the Contractor shall not proceed
until prior approval is obtained from the Office of
Management and Budget as required by the Paperwork Reduction
Act. Such approval is identified by an OMB Approval Number
which EPA shall furnish to the Contractor. The approval of
a work assignment by the Contracting Officer does not in and
of itself constitute approval for the Contractor to solicit
information, unless the information request will include
fewer than ten public respondents or the work assignment
approval specifically references the OMB Approval Number.
The EPA Office of Policy, Planning and Evaluation, Phillip
Roth (260-2683), puts out the EPA Survey Management Handbook
which tells what to look for in creating a statistical
survey.]
Item 26: To the best of my knowledge, the work specified in this
procurement action does not unnecessarily duplicate any other
work previously performed, or being performed, under my
authority.
This requirement is not a duplication of work under another
contract question. This question was developed by 0AM in
response to an IG concern over duplication of work because
portions of many Statements of Work are similar, if not
identical to each other. This certification made by the
Project Office supports the Contracting Officer in assuring
that the Government is not paying to have the same work done
twice.
Item 27: To the best of my knowledge, the work specified in this
procurement action does not involve any "prohibited contracting
activities" listed in Chapter 2 of the Contracts Management
Manual.
Prohibited contracting activities question. [Ref.: CMM Ch.
2, pages 2-F-l through 2-F-5, or Chapter 2 of this handbook]
Item 28: This procurement [ ] will/ [ ] will not, involve any
of the areas requiring special contract controls listed in
Chapter 2 of the Contracts Management Manual. (If the
procurement involves such areas, a special discussion must be
attached detailing proposed control procedures to be enforced.)
Special controls question and attachment. Ref.: CMM Ch. 2,
page 2-D-l for list] Situations requiring special controls.
They include:
1. Contractor in EPA office space,
2. Contractor provides Freedom of Information Act
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response support,
3. Contractor works with Confidential Business Info.
4. Contractor personnel could appear to be EPA
employees.
If one of these situations exists, controls are required.
They are to be set forth in an attachment to the procurement
package. Management controls that involve the contractor
are to be clearly spelled out in the Statement of Work in
the contract.
Item 29: This procurement [ ] does/ [ ] does not, involve
requirements governed under the Federal Information Resources
Management Regulation (FIRMR). [Note: If the procurement
involves the FIRMR, a requirements analysis and draft Agency
procurement Request (APR) should be attached.] [Reference OIRM
Memorandum dated 16 Jun 93.]
FIRMR controlled requirements question. If the procurement
contains any ADP or Telecommunications work the
justification must accompany the procurement request. A
procurement can contain up to 2.5 million dollars worth of
ADP or Telecommunications work without being processed as a
FIRMR controlled procurement. If the procurement contains
over 2.5 million dollars worth of ADP or Telecommunications
work, the provisions of the Federal Information Resources
Management Regulations will govern the procurement. In such
cases the procurement for this equipment and these services
will be placed through the ADP Placement Section and the
project office must attach; 1) a Requirements Analysis, and
2) a Draft Agency Procurement Request.
This form is to be filled out by the Senior Information
Management Official of the cognizant Assistant
Administrator's office. This determination will indicate if
the Statement of Work will require the Contractor to
furnish/perform more than 2.5 million dollars worth of ADP
equipment or services. The form is then sent to the
Director, Office of Information Resource Management (MPES-
OIRM, PM211-M) for approval. An approval from GSA is
required for the purchase of ADP in excess of the 2.5
million dollar threshold. For questions regarding planned
ADP procurements call Irv Weiss (202) 260-9388 or Tom
Fioramonti (202) 260-8193.
Item 30: (a) The Statement of Work/Specifications involve the
use of items subject to RCRA Procurement
Guidelines (see CMM Chapter 13). YES NO
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(b) If YES, the items are:
(c) The specifications for the item(s) complies with
the applicable RCRA Procurement Guidelines.
YES NO
(d) If NO, the Project Officer must check the
appropriate box and provide an explanation why
items containing recovered materials were not
used.
the price is unreasonable;
applying minimum-content standards results in
inadequate competition;
Obtaining the designated items results in unusual
and unreasonable delays; or
recovered items do not meet all reasonable
performance specifications.
EXPLANATION (this may be provided in a separate
attachment)
RCRA Procurement Guidelines question. [Ref.: CMM Ch. 13]
EPA has an Affirmative Procurement Program for maximizing
Gov. use of Recovered Materials (see Section 6002 of RCRA).
OSW has issued procurement guidelines. A recovered
materials clause and Contractor certification are included
in the contract. The Project Office must provide a written
justification if it requires the use of an item which is NOT
produced from recovered materials, even though the item
appears in the OSW "Recovered Materials" guidelines.
Item 31: The desired award date for this procurement is
Desired date of contract award question, (self explanatory)
This date is used by the procurement office when
establishing procurement milestones.
Item 32: This procurement [ ] does/ [ ] does not, include a
requirement for use of Government-provided in-bound and direct
dial out-bound long distance services. (If affirmative, the
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Statement of Work shall require mandatory use of the FTS-2000
network.)
Long distance phone call question. If the Contractor is
required to use Gov. provided long distance phone service it
must be so stated in the SOW along with a requirement that
the Contractor use the FTS-2000 network. The project office
must obtain Officer of Administration & Resources Management
(OARM), National Data Processing Div. -RTF (NDPD) and
Telecommunications approval.
Signature Date
Title
phone Number
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5. Additional Attachments Not Listed in the 32 Point Checklist.
a. Technical Evaluation Panel (TEP) Appointments
[Required for all procurements][Reference EPAAR 1515.61]
The OAM Source Selection Official (SSO) appoints the TEP members
based on recommendations from the project office. The
recommendations shall include the name and relevant experience of
each individual. The TEP must be comprised of at least three (3)
members for procurements over $500,000. There is no upper limit
on the number of panel members; however, with a higher number of
members the logistics of finding a meeting location become more
difficult and the consensus discussions become more involved.
Per EPAAR 1515.612, the Project Officer is appointed the
chairperson of the TEP. For procurements with a potential value
of $500,000 or less, the Project Officer may be the only member
of the TEP. All TEP members should have relevant knowledge
and/or expertise of the types of services or assistance required
by the solicitation. This is crucial to the integrity of the
evaluation process, ensuring competent and equal treatment of
each offerers proposal. The RFP cannot be released until the TEP
selection document has been signed by the SSO.
It should be noted that TEP members are involved in the
competitive procurement process from start to finish. TEP
members play an IMPORTANT and NECESSARY role in the procurement
process and need to devote a lot of time to the process in order
for it to be successful. Panel members need to be aware of this
commitment prior to serving on a panel.
b. Award Fee - Performance Evaluation Board (PEB)
Appointments [Reference FAR 16.404, EPAAR 1516.404]
This document is required only when an award fee contract type is
selected by the Contracting Officer. Per EPAAR 1516.404-276, the
members of the Performance Evaluation Board (PEB) are selected
through mutual agreement between the Responsible Associate
Director (RAD) and the responsible program office. The
chairperson of the PEB shall be the division director of the
cognizant program office. The chairperson and Contracting
Officer recommend other members of the PEB, including the
Evaluation Coordinator, Executive Secretary and Performance
Monitors. Members are recommended by memorandum to the Head of
the Contracting Activity (HCA) who makes the formal appointment
of the PEB through memorandum. This formal appointment must be
made before the solicitation can be issued.
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c. Award Fee Plan
[Reference EPAAR 1516.404.277]
This document is required only when an award fee contract type is
selected by the Contracting Officer. The "Award Fee" is money
which is used by the Government to reward a contractor for better
than average performance. The award fee plan describes the
process of monitoring, assessing and evaluating the contractor's
performance to determine the amount of award fee earned. This
plan is developed by the Performance Evaluation Board (PEB). Per
EPAAR 1516.404.277, the Award Fee Plan should include the
following elements:
(1) The base fee amount. (This is a fixed fee which the
contractor will receive.)
(2) The total award fee pool. (Money available for payment of
award fee.)
(3) Performance areas to be evaluated.
(4) Criteria to be used in the evaluations.
(5) Relative weights to be assigned to performance areas and to
the evaluation criteria.
(6) Frequency and timing of award fee determinations.
(7) The proportion of the total award fee pool to be available
for each evaluation period.
(8) The procedure to be followed (the timing involved) in
evaluating performance and determining the award fee.
The Evaluation Criteria are included in the solicitation. During
the evaluation the PEB compares the contractor's performance with
the evaluation criteria to determine a performance rating and
thus the amount of award fee which will be paid.
d. Procurement Integrity Certifications
[Required for all procurements] [Reference FAR 52-203-8,
Chapter 1 of this Handbook]
Procurement Integrity Certifications must be signed by Agency
officials who:
(1) draft SOWs.
(2) review & approve specifications
(3) develop the procurement package
(4) prepare & issue the solicitation
(5) evaluate bids or proposals
(6) select an offeror for award
(7) participate in negotiations
(8) review & approve contract award.
or who otherwise contribute to the fulfillment of an Agency need
or requirement through the procurement process.
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6. Notify the CO concerning the following:
a. Pre-Proposal Conferences. 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.
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 have 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 of 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.
c. 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 designee. 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 substantive 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
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to the CO's attention.
d. 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.
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CHAPTER 9 - PROPOSAL EVALUATION, NEGOTIATION. AND AWARD
Table of Contents
1. Introduction 9-1
2. Applicability 9-1
3. Policy 9-1
4. Source Evaluation Board Structure 9-1
5. Preparing for the Evaluation 9-3
6. Distribution and Proposal Control 9-5
7. Disclosure of Information 9-5
8. Technical Evaluation Process 9-5
9. Technical Evaluation Criteria 9-7
10. Price or Estimated Cost Factors 9-9
11. Evaluating Proposals 9-10
12. Technical Evaluation Report 9-14
13. Preparation of Business Evaluation
Panel Report 9-14
14. Determination of Competitive Range 9-15
15. Written or Oral Discussions 9-17
16. Limited Discussions vs. Full Negotiations 9-17
17. Proposal Revisions 9-18
18. Source Selection 9-18
19. Award Notifications 9-19
20. Debrief ings 9-20
Exhibits
1. Source Evaluation Structure 9-21
2 . Tips on TEPs 9-22
3. Sample Technical Evaluation Criteria 9-26
4. Sample Score Sheets 9-29
5. Good and Bad Individual Score Sheets 9-33
6. Scoring Plan 9-39
7. Format of the TEP Report 9-40
8. Score Sheet Matrices 9-42
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CHAPTER 9 - PROPOSAL EVALUATION, NEGOTIATION, AND AWARD
1. 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.
2. Applicability. The provisions of this Chapter apply to all
competitive negotiated procurements in excess of $25,000 except
architect-engineering services.
3. Policy. EPA personnel shall conduct source evaluation and
selection in accordance with consistent standards and procedures
that ensure fair and impartial treatment of all offerers.
4. Source Evaluation Board Structure
a. 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 management officials
and their review and approval of major pre-award decisions.
b. Source Evaluation Board Structure. Exhibit 5-1 at the
end of this chapter sets forth the structure of EPA's source
evaluation process.
c. Duties and Responsibilities of Parties Involved.
Your responsibilities as the Project Officer and other
participants in the Source Evaluation Board are as follows:
(1) Source Selection Official (SSOK The 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 makes the source
selection decision.
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(2) Source Evaluation Board (SEB). The 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.
(3) Technical Evaluation Panel (TEP). The 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.
(4) Business Evaluation Panel (BEP). The 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.
(5) 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 the
division, office or laboratory director level, with the
concurrence of the SSO, as the technical representative for the
procurement action.
(6) 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.
(7) Contract Specialist. 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.
(8) Cost/Price Analyst. The cost/price analyst is
responsible for evaluating the financial aspects of the
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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.
(9) Chief of the Contracting Office (CCO). The CCO is
the cognizant Division Director in 0AM. The CCO monitors the
solicitation preparation, the source evaluation and selection
process, serves as SSO in specified instances, and provides
advice or guidance when required.
(10) Quality Assurance Officer. For Procurement
Requests involving environmentally related measurements and
requiring QA/QC documentation in the offerers' proposals, the
Quality Assurance Officer may be a member of the Technical
Evaluation Panel (TEP) for the purpose of evaluating the adequacy
of the offerers' QA/QC documentation.
(11) 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.
5. Preparing for the Evaluation. Some tips and suggestions on
technical evaluations are contained in Exhibit 2. 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:
a. Personal Conflicts of Interest. Five CFR Part 2635,
Standards of Conduct for Employees of the Executive Branch,
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
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
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received;
(3) No member is an officer, director, employee,
partner, nor consultant to an offeror from whom a proposal was
received;
(4) No member is negotiating for nor has any
arrangement concerning future employment with any offeror.
(5) No member's family has a relationship with an
offeror 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 EPAAR Subpart 1503.6 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:
(a) The current or former EPA regular or special
employee is or was involved in developing or negotiating the
proposal for the prospective contractor.
(b) The current or former EPA regular or special
employee will be involved directly or indirectly in the
management, administration, or performance of the contract.
(2) 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.
(3) 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
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employment.
(4) If a conflict is perceived of this nature, you must
inform the Contracting Officer in writing.
6. 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.
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
debriefings. 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.
7. 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.
8. Technical Evaluation Process
a. Background. The technical evaluation process is the most
important pre-award function served by the Project Office. The
evaluation process demands objectivity, expertise, rational
judgement, and integrity. If any of these needs are lacking, the
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results could be protests, delay of award, or in extreme
circumstances, court appearances.
b. The TEP should expect to expend about two weeks of effort
to evaluate the proposals. This will vary, however, depending on
the number of proposals received and the complexity of the
requirement. The members recommended for the panel should be
submitted by memorandum at the time the Procurement Request
package is received in CAM. 0AM will contact the TEP chairperson
in advance of the proposals being received and confirm a block of
time that the panels' services will be needed. It is important
that the Project Office set aside the time for this process to
minimize delays. Management should be advised that certain
individuals will be needed on a full-time basis for the period of
time necessary to evaluate the proposals. It is also suggested
that the evaluations be conducted away from normal working
conditions so that everyday distractions do not delay the
evaluation process.
c. Purpose. The basic function of the technical evaluation
process is to determine in the most objective and fair method
possible, which of the technical proposals received in response
to a solicitation best meets the requirements of the solicitation
and is most advantageous to the Government.
d. BASIC REQUIREMENTS. The technical evaluation process is
built around the technical evaluation criteria. Evaluation
criteria should be tailored to the specific procurement rather
than to a standard format. For most competitively negotiated
procurements, however, sound planning requires several issues to
be addressed during solicitation preparation in order to avoid
problems during negotiations. These are:
(1) The evaluation criteria must be established before
issuance of the solicitation and must be adhered to during the
evaluation process. Changes to the evaluation procedures after
receipt of proposals can be construed as favoring one offerer
over another, threaten the integrity of the procurement, and can
lead to protests and delays in contract award.
(2) Evaluation criteria are standards against which each
proposal will be measured. Panel members must understand that
competing proposals are not rated against each other, but against
the Government standard — the evaluation criteria.
(3) All evaluation criteria used must be stated in the
solicitation. Also, the relative importance of each evaluation
factor must be indicated. The best way to do this is by
specifying the numeric weight associated with each factor. The
weighting of the criteria should reflect, as accurately as
possible, the relative importance of the evaluation criterion.
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For example, if the requirement calls for heavy emphasis on
certain technical expertise, then a "Key Personnel" criterion may
be the most critical factor for successful completion of the
effort and should therefore be the most heavily weighted.
(4) Evaluation criteria must not unduly favor the
incumbent contractor.
e. The key to a successful technical evaluation process,
then, is sound technical evaluation criteria and a fair,
objective and rational process that compare offerers against a
known standard.
9. Technical Evaluation Criteria fTEC).
a. TEC (see Exhibit 3 for sample) are a means for providing
uniform guidance to the evaluators on how to rate/score an
offerer's proposal with respect to a given factor. They focus
the evaluation on each individual factor and assist in achieving
consistent and impartial evaluations.
b. The selection of technical evaluation factors must be
directly related to the specific procurement described by the
SOW, which describes the work/tasks the contractor is required to
perform. The factors selected should be those that allow the
©valuator to determine, based upon the proposal submitted, how
well the offerer understands the Government's requirements and
establish a degree of confidence that the offerer can
successfully meet the Government's requirements.
c. The number of TEC developed should be the minimum needed
to enable the TEP to properly discriminate between the relative
merit of proposals. Use of a large number of criteria can
mathematically dilute the evaluations during scoring to the point
where any proposal can achieve a reasonably high score, but
actually be poor in one or more extremely important factors. Do
not use factors that overlap or duplicate each other. If one
factor is dependent upon another, then use one or the other, but
not both. Also, a large number of criteria will make the
evaluation process extremely difficult, especially where numerous
proposals have been received. Keep in mind that, as part of the
evaluation process, a detailed write-up (narrative) for each
criterion must be provided as part of the TEPR that will be
submitted to the CO.
d. Typical TEC may include:
(1) tv^hnirai Approach. This factor refers to the merit
of the offeror's proposed method for accomplishing the technical
objectives/requirements of the contract and the appropriateness
of the plan for successful completion of the work. The
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techniques, processes, and tests that the offerer plans to use
should be examined. This may include how the offerer will use
its resources for the work. The offerer's grasp of the
difficulties and problems involved in performing a particular job
reflect on its understanding and ability to perform that job
well.
(a) To demonstrate the offerer's understanding of the
technical scope of the issues and tasks to be undertaken in the
proposed contract, the Technical Approach criterion may be
divided into two subparts. The first part may ask the offerer to
describe its technical approach for fulfilling the overall
requirements specified in the SOW. In the second part, the
offerer would be required to participate in a simulation exercise
such as a hypothetical work assignment to further demonstrate its
abilities. The offerer would be furnished a sample work
assignment and would be requested to describe its philosophy and
proposed (specific) technical approach for accomplishing it. The
scenario covered by the sample work assignment should be
representative of the type of work the offerer would be asked to
provide during contract performance. The use of a sample work
assignment or delivery order is usually a good idea since it
gives an indication of how the offeror would perform under the
actual contract.
(2) Corporate Experience. This factor refers to the
firm's technical experience and abilities that are relevant to
the requirements of the RFP. It measures the extent of the
offerer's past and current experience in performing similar work.
However, be careful not to attach too great an importance
(weight) to this criterion since this can result in a small group
of offerers with very similar scores and can favor the incumbent
contractor (a practice that must be avoided). Awarding
consistently high ratings to the more experienced offerers can
stifle future competition by consistently eliminating the less
experienced offerers. Generally, no more than 15% of the total
points available should be assigned to the corporate experience
criterion.
(3) Management Plan. This factor refers to the merit of
the offerer's plan for managing and administering the contract.
It is worthwhile to evaluate the degree to which the offerer's
management plan has established well-defined lines of authority,
responsibility and communication. Other areas that may be
evaluated include how swiftly the organization can respond to
technical changes and increased workloads and can mobilize to
resolve problems; how well the offerer's management techniques
can be expected to identify performance problems at an early
stage and cost overruns and to help work around subcontractor
delays and similar problems.
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(4) Personnel . This factor refers to the availability,
competency, pertinent education, and related experience of a
firm's technical personnel. The experience and ability of key
technical and support personnel are important factors in
successful performance of a contract. The proposal should
clearly relate the offerer's personnel qualifications and
availability to the requirements of the Statement of Work. The
offerer should be required to designate and discuss specific
personnel for all, or at a minimum, the most important technical
disciplines. The number of people and their labor category (P4
{highest}, P3, P2, etc.) should be stated. It is also a good
idea to require offerers to discuss how personnel of different
professions will be organized as a team to perform certain tasks.
(5) Past Performance. This factor refers to the offerer's
record of conforming to specifications and to standards of good
workmanship; the offerer's record of containing and forecasting
costs on any previously performed cost reimbursable contracts;
the offerer's adherence to contract schedules, including the
administrative aspects of performance'; the offerer's history for
reasonable and cooperative behavior and commitment to customer
satisfaction; and generally, the offerer's business-like concern
for the interests of the customer. This factor should be used to
assess the relative capabilities of competing offerers and to
help assure greatest value source selections. However, this
factor should be written as to allow newly established firms to
compete for contracts even though they lack a history of past
performance. The TEP may contact offerer-provided references to
ascertain information for evaluating this factor.
10. Price or Estimated Cost Factors.
a. In a technical competition, price or estimated cost is not
as important a consideration as the offerer's technical ability
to perform the work. However, it still is an important factor
that must be taken into consideration in the source selection
process .
b. in awarding cost-reimbursement contracts, proposed costs
are only estimates and not absolute figures; therefore, they may
or may not be the determining factor in source selection.
Generally, as technical proposals become more equal in merit,
cost or price becomes more important.
c. The language to describe price or estimated cost factors
as an evaluation factor is very rarely Drafted by the program
office. Program office input may be required ^^
Price or estimated cost will be a numerica^-wei^
factor but, for all intents and purposes, the program office
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not required to develop documentation to describe the evaluation
scheme with respect to price or estimated cost.
11. Evaluating Proposals.
a. After the specified time for opening proposals, the CS
will open all proposals received "on time" and create an abstract
of proposals. This is a logging-in function to be contained in
the contract file. The cost proposals will be extracted and the
technical proposals will then be distributed to the panel members
for evaluation. The technical evaluation process begins when the
CO/CS formally delivers the proposals to the TEP and briefs the
TEP on the proper procedures for handling and evaluating the
proposals.
b. Score sheets are also required for the evaluation process.
Score sheets are forms used during the evaluation process for
recording the evaluator's scores and narratives applicable for
the proposals received in response to the solicitation. Score
sheets shall contain the same evaluation criteria and sub-
criteria as stated in the RFP (see Exhibit 4). While the
evaluation score sheets can be prepared by the PO prior to the
beginning of the evaluations, in many cases, the CO has a set of
standard forms that can be used. If the PO does prepare her own
score sheets, the best course of action is to include a copy with
the Procurement Request (PR) package so that the CO or CS may
review them before hand.
c. Ground Rules.
(1) All persons associated with a technical evaluation
must treat Offerers' identities and proposal contents with total
confidentiality to avoid compromising evaluation results or
leading to unfair advantage.
(2) TEP members shall not discuss any aspects of the
proceedings with anyone outside the TEP. If there is any question
in your mind regarding who has a "need to know" contact the CO.
This does not preclude discussions with TEP member's management
relative to status and timing. However, discussions relative to
particular offerers or aspects of their proposals are prohibited.
(3) Refer to the CO any attempted communications by
offerers.
(4) If any additional information is needed, the TEP
shall request it through the CO in the form of interrogatories/
discussions. Interrogatories/discussions are any oral or written
communication between the government and an offerer.
Interrogatories/discussions involve information essential for
determining whether a proposal is acceptable. Interrogatories
also provide the offerer an opportunity to revise or modify its
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proposal.
(5) Each member of the TEP shall independently evaluate
and score each proposal. After the individual evaluations, the
group will convene to develop a panel consensus score for each
proposal. The TEP Chairperson moderates this discussion and is
responsible for developing the consensus narrative. Averaging of
scores is NOT permitted (see GOOD and BAD score sheet narrative
examples in Exhibit 5).
(6) For the consensus summary, a detailed, written
narrative must be provided for each individual scoring element
fully supporting the consensus rating assigned. It is imperative
that the narrative correlate precisely with the score given. A
separate discussion must be written for each proposal that
summarizes the relative strengths and weaknesses of the offerer
in each of the major criteria. Upon completion of the consensus
summary, a TEPR will be submitted to the CO. Each individual on
the panel must sign the report to attest to its validity.
(7) Scoring standards establish the rating scale that
will be used to evaluate proposals. Each score on the scale must
be defined. EPA furnishes a standard scoring plan that must be
used to evaluate technical proposals. The scoring plan is based
on a 0 (poorest) to 5 (best) point scale (see Exhibit 6).
12. The Technical Evaluation Report (TEPR^.
a. The following are guidelines on how to prepare the TEPR.
It is very important that you follow the format provided in
Exhibit 7 for the final report and follow the directions listed
below. Your report must include, at least, the following
elements:
(1) Individual Panel Member Reports. This information
should be held in a backup file by the PO and made available upon
the request of the CO. This information is comprised of the
individual score sheets with detailed notes from each TEP member
covering each criterion for each offerer. The notes must discuss
the relative strengths and weaknesses associated with each
proposal. When evaluating the strengths and weaknesses,
evaluators should reference proposal page numbers wherever
possible.
(a) The narrative descriptions must fully support all
scores. For example, for a score of 1, you must clearly describe
all of the problems with the offerer's proposal. On the other
hand, a perfect score of 5 also must have a detailed narrative
supporting that score. You must state WHY and HOW the offerer
deserves the score given. A perfect score of 5 , however, does
not preclude the government from requesting interrogatories or
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discussions.
(b) Each member must read each proposal in its entirety
and must independently evaluate and score each proposal. Please
note that each member must sign his/her individual score sheets.
(b) If the CO has not requested the information
previously, the PO must submit this backup file to the CO for
inclusion in the official contract file prior to contract award.
(2) Consensus Report. After the individual scores are
completed, the panel members should fully discuss their findings
and provide a detailed consensus report. This report will be
prepared by the TEP Chairperson and while the contracting officer
may require additional information, at a minimum, the following
information should be included:
(3) Matrices of Individual Scores and Consensus Scores
for Each Offerer. This part of the report must include the
individual panel member scores for each evaluation criterion.
One table must be prepared for each proposal evaluated. Each
table must show the numerical (1 to 5) scores each evaluator
awarded and the TEP consensus score and points (score x .2 x
point weighting) (see Exhibit 8).
(4) Consensus Members Score Sheets and TEP Consensus
Score Matrix. This part of the report shall include the
consensus score sheets with detailed notes from the consensus
discussion of the TEP covering each criterion for each offeror.
The notes must discuss the relative strengths, weaknesses, and
risks associated with each offer, etc. In evaluating the
strengths and weaknesses, and in developing narratives and
interrogatories, refer to proposal page numbers whenever
possible. Detailed narrative descriptions must fully support the
scores given.
(5) The TEP Chairperson is responsible for compiling the
consensus scores and narrative and for facilitating the consensus
process. It is recommended that the panel members share the
responsibility of recording the consensus notes and narrative
during the process in order to assist the Chairperson. Please
note that each member must sign the consensus signature summary
page attached to the back of the consensus report.
(6) A matrix depicting the TEP consensus scores for each
criterion should be included in the summary. A complete listing
of consensus scores must be shown for each offeror.
(7) Both the individual scores with narrative and the
consensus scores with narrative become part of the official
contract file.
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(8) Interrogatories. The purpose of interrogatories is
to better understand an offerer's proposal and to satisfy the
legal requirement to have meaningful discussions with all firms
in the competitive range. When offerers' proposals contain
deficiencies, ambiguities, and/or suspected mistakes, you must
formulate questions or interrogatories for offerers. The term
deficiencies is a general term of art referring to any part of a
proposal that fails to satisfy the government's requirement.
Interrogatories are also required for ambiguities and suspected
mistakes.
(a) Although, there is a difference between
deficiencies and weaknesses resulting from the offerers lack of
diligence, competence or inventiveness in preparing the proposal,
interrogatories should be used to point out weaknesses and
deficiencies identified by the TEP in offerers' proposals.
Interrogatories should also be used to clarify information
contained in the proposal and/or request information that should
have been provided but was omitted.
(b) The goal is to avoid technical leveling through
interrogatories. Technical leveling is helping an offerer to
bring its proposal up to the level of other proposals through
successive rounds of interrogatories, which may include technical
transfusion. Technical transfusion occurs when the Government
discloses information from one offerer's proposal that results in
improvements a competitor's proposal.
(c) Thus, during the evaluation process, members of the
panel should write down questions for each offerer, if
applicable. Questions should be stated in such a manner to
avoid technical leveling or leading the offerer in a specific
direction. The chairperson will consolidate and record
interrogatories for the consensus report based on the full panels
discussion.
(9) Panel Comments. The panel can include any other
pertinent information or comments in this section. If for
example an offerer's proposal was severely deficient, or if there
is a conflict on interest, it should be noted here.
(10) Certifications. Each member must sign and return
the following certifications:
(a) Certification for Conflict of Interest
(b) Certificate for Unauthorized Disclosure of
Procurement Information
(c) Procurement Integrity Certification
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(11) Conflict of Interest Statement. A signed Statement
of COI (See Exhibit 8) for each member of the panel should
accompany the consensus report. This certifies that no apparent
COI exists in evaluating the proposals. An example of a COI
might be if one of the panel members has a spouse working for one
of the offerers. An apparent conflict must be brought to the
attention of the CO immediately so that the CO can determine
whether or not the person can remain on the panel. The statement
also contains a separate area to identify any potential or actual
COI which may result in contracting with any of the offerers.
(Paragraph 5a. of this Chapter explains personal conflicts of
interest).
13. Preparation of the Business Evaluation Panel Report.
a. Concurrent with your preparation of the TEP Report, the
Chairperson of the Business Evaluation Panel must prepare a
Business Evaluation Panel Report. 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 an offerer
(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.
b. 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:
(1) A detailed cost analysis on the business proposals;
(2) Evaluation of proposed management structure to be
utilized for performance;
(3) Evaluation of offerer's subcontracting program as it
relates to small business, labor surplus area concerns, and
socially and economically disadvantaged business enterprises;
(4) Evaluation of those business elements submitted with
each proposal which could lead to a determination of
nonresponsibility by the Contracting Officer.
(5) 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
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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
c. 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.
14. 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 that have a
reasonable chance of being selected for award.
b. 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 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.
c. 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 such as prior
performance, past experience, or conflicts of interest may be of
such importance that the offer cannot be reasonably determined to
be within the competitive range.
d. 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.
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e. 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.
f. 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.
g. 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:
Offeror Technical Evaluation Score Cost/Price
A Co. 330 $250,000
B Inc. 325 175,000
K Co. 275 145,000
D Co. 245 150,000
C Co. 150 115,000
G Co. 125 92,000
(1) 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.
(2) 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.
(3) 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
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considered within the competitive range.
(4) 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.
15. Written or Oral Discussions
a. 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. The purpose of oral and written discussions is to:
(I) Advise the offerer of deficiencies in its proposals
so the offerer is given an opportunity to satisfy the
Government's requirement;
(2) Attempt to resolve any uncertainties concerning the
technical, or other terms and conditions of the proposal;
(3) Resolve any suspected mistakes; and
(4) Provide the offerer an opportunity to submit any
cost/price, technical, or other revisions to its proposal.
b. 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
offerer. No 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.
16. 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
°f technical scores and costs.
b. After determination of the competitive range, the
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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.
17. Proposal Revisions.
a. 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 offer(s).
Where limited negotiations were held, the notice may indicate
that further negotiations may be conducted with the source
selected.
b. 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.
c. 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—i.e.,
written explanation of what elements of the proposal were changed
and how it affected the rating.
18. Source Selection.
a. General. The selection of a source is made following
receipt and evaluation of all proposal revisions. The selection
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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.
b. Source Selection Decision. The Contracting Officer
prepares the source selection decision, including:
(1) The source selected;
(2) Comprehensive rationale for the decision including
the consideration given to price or cost, technical merit, and
other factors contained in the solicitation;
(3) A statement of approval of the decision prepared for
the signature of the SSO.
c. 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.
d. 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.
19. Award Notifications.
a. 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.
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b. Postaward Notices. Promptly after contract award, the
Contracting Officer notifies the unsuccessful offerers, in
writing, of the source selected for award, unless the offeror had
been given a preaward notification.
20. Debriefings.
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. The Chief of the Contracting Office (CCO), or his/her
designee is responsible for conducting debriefings. Unsuccessful
offerers who submit a written request that has been signed by a
corporate official, senior partner, or other comparable executive
of the organization may request an individual debriefing. The
Project Office may be requested by the CCO to participate in the
debriefing. 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).
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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EXHIBIT 9-1
SOURCE EVALUATION STRUCTURE
Official
Acquisitions whose
estimated value is
greater than $5M
($25M for
Superfund)
Acquisition whose
estimated value is
less than $5M ($25M
for Superfund) *
Source
Selection
Official
Chief of the
Contracting Office
Chief of the
Contracting Office
Source
Evaluation
Board
Chief of the
Contracting Office
Determined by the
Chief of the
Contracting Office,
if necessary
Technical
Evaluation
Panel (TEP)
Chairperson
Project Officer
Project Officer
TEP members
At least two
technically
knowledgeable
individuals
At least two
technically
knowledgeable
individuals
Business
Evaluation
Panel (BEP)
Chairperson
Contracting
Officer
Contracting
Officer
BEP Members
Contract
Specialist,
Cost/Price Analyst
Contract
Specialist,
Cost/Price Analyst
* For acquisition valued at $500,000 or less, the
Project Officer may be the only member of the TEP and
the Contracting Officer or contract specialist may be
the only member of the BEP.
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EXHIBIT 2 : TIPS - SUGGESTIONS - DOS AND DON'Ts
(OR EVERYTHING YOU NEEDED TO KNOW ABOUT TEP REPORTS
BUT WERE AFRAID TO ASK)
o Always keep in mind the end result: Complete, detailed
consensus report. In order to achieve this, your individual
evaluation must be complete.
o Your evaluation must be supported by a strong detailed narrative
which is consistent with scores. Do not use phrases such as "looks
good to me" or "strong write-up in this area."
o Support the statements you make in your narratives by providing
examples right out of the proposals. Ask yourself WHY and/or HOW
an offerer fulfilled or met the evaluation criteria elements.
EXAMPLE:
Statement: The offerer demonstrated excellent experience in
managing large dollar, highly complex, multi-tasked
contracts.
WHY/HOW: The offerer cited over 200 prior contracts that they
have successfully managed. These contracts include
the $60 M EPA Technical Enforcement Support contract,
DOE's $2.5 billion Strategic Petroleum Reserve
Project and $900 M Uranium Mill Tailings Remedial
Action Program. The offerer has over 40 years of
experience with Federal contracts from many different
agencies spanning many program areas including
Superfund and RCRA Enforcement.
o Write up your narratives FIRST then assign that criterion a
numerical score. You will find it easier to score once you have
read over what you have written.
o Do NOT reiterate the TEC elements. EXAMPLE: under CORPORATE
EXPERIENCE you would NOT say "The offerer has demonstrated relevant
enforcement related experience." Once again, HOW did they
demonstrate that experience?
o Do not downgrade a proposal because it did not address something
we never asked for in our request for proposals (RFP).
o In evaluating strengths and weaknesses, and in developing
narratives and interrogatories, reference proposal pages whenever
possible.
o Do not infer prior knowledge of a company into the evaluation,
i.e., "I know they can do it, but they didn't say so". Be like a
judge; look only at the written evidence.
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o Avoid "reading into" or "reading out of" any portion of the
offer a meaning other than the exact language appearing in the
offer. If a clarification is needed, prepare an interrogatory
addressing it.
o Avoid the tendency to interpret the meaning of the offerer's
proposal when the writing is ambiguous. Clarify ambiguities with
an interrogatory.
o Recognize that the assignment of a score to an element is
subjective and based upon your best reasoned judgement.
o Recognize that offerers often use "catch phrases, buzz words,"
and semi-legalistic phraseology which may indicate a less-than-
thorough understanding of the solicitation.
o Recognize the substantive quality of the proposal and do not
be influenced by form, format or method of presentation. Look
for content.
o Recognize flattery on the part of the offerer.
o It is recommended that the Chairperson direct the panel members
to read the proposals in different order, i.e., panel member 1
would start with proposal from XYZ and panel member 2 would start
with proposal from ABC and panel member 3 would start with
proposal from UBSTER, etc.
o Avoid forming "first impressions" of an offer that might tend
to influence the score assigned.
o Do NOT compare proposals to one another. Each proposal stands
on its own merit, and is evaluated strictly against the RFP
technical evaluation criteria.
o Advise the Contracting Officer if any proposals are totally
unacceptable and would require a major rewrite.
INTERROGATORIES
o Your interrogatories should be in the form of questions, not
suggestions. Don't slip into the mode of telling an offerer how
you would like to see the proposal.
o Do NOT ask an offerer to address something that we never asked
for in the RFP.
o Recognize ambiguities, inconsistencies, errors, omissions,
irregularities, and deficiencies that can affect the scoring.
These should be recorded on the individual/consensus evaluation
sheets under weaknesses. These will result in interrogatories.
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o Questions should be stated in such a manner as to avoid
technical leveling (i.e., helping an offerer to bring its
proposal up to the level of other proposals through successive
rounds of discussion, such as by pointing out weaknesses
resulting from the offerer's lack of diligence, competence, or
inventiveness in preparing the proposal).
o Questions should be stated in such a manner as to avoid
technical transfusion (i.e., Government disclosure of technical
information pertaining to a proposal that results in improvement
of a competing proposal).
CONSENSUS
o Individual scores should NOT be totaled and averaged to reach
a consensus score.
o The consensus process is NOT a democracy where the majority
rules. No member can be "out-voted". Consensus means the
"collective opinion" of all members of the panel. Remember, by
signing the consensus report, you agree with the final report.
o During the consensus process, it is recommended that panel
members take turns recording the consensus narratives, scores and
discussion to help assist the chairperson. The chairperson is
responsible for consolidating all comments into the final report
but that person is also needed to facilitate the process itself.
It is also recommended that after consensus is reached on a
particular criterion, that the recorder repeat the narrative
recorded to make sure he/she has captured accurately, the
narrative and interrogatories discussed and agreed to by the
panel members.
The TEPR must support all ratings (scores) given with factual
statement and not simply conclusionary statements. For scores of
"4" and "5", the superior features (strengths) must be cited.
The benchmark (minimum requirement) must be cited in the TEPR. A
rating of "3" would indicate that a proposal met the minimum
requirements. Narratives with factual rather than conclusionary
statements must accompany scores "3.5" or "4.5" and clearly
indicate what the distinction is that merits a half score.
The TEPR must identify any weakness, deficiencies, concerns,
uncertainties, or suspected mistakes. It should indicate whether
the weakness/deficiencies are significant or minor, and whether
risks to contract performance are anticipated if uncorrected or
unchanged.
For scores of 0 or 1, be emphatic. Provide representatives,
if not exhaustive examples of the deficiencies that result in the
score. Give references to pages or sections of the offer where
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possible. Even where there are scored 0 or 1, it is possible
that as a result the offerer may be put in the competitive range.
As a result, keep in mind how or whether it would be possible to
phrase interrogatories to identify the weakness.
A score of 2 SUGGESTS that an interrogatory is to be
prepared/ if the offerer is otherwise in the competitive range.
Do not use a score of 2 to soften the impact if in fact the item
is unacceptable and should be scored 0 or 1. Where a 2 is used,
try to phrase the comments to fit the form of the interrogatory.
For scores of 3 to 5, it is appropriate and even NECESSARY to
frame interrogatories if there ar deficiencies in the offer that
could be corrected. Any deficiencies that are not raised in the
TEPR and interrogatories cannot be used later to justify
selection.
It is suggested that technical panels use a "bottom" up
approach to the report in the areas that are scored 3 to 5.
First, indicate that the element is considered adequate or
good or superior. If the score is at the 3 level, indicate
specific examples of what made the element acceptable. Here, and
throughout the evaluation, remember to use page references
wherever possible.
Second, if the score is over 3, then ADD examples of the
superior features. If there are no deficiencies, but the
superior features are not so great as to merit a 5, simply
indicate what was adequate and superior, and that there were no
deficiencies. Remember that the TEPR will be very carefully
reviews for a score of 4 that 'the offerer's approach was
supervisor in all areas except for discussion of ozone analysis
will be read to suggest that there is a weakness in ozone
analysis that should be disclosed to the offerer.
Third, however, if there are weaknesses that you feel could
be addressed and improved, then go on to indicate those areas as
weaknesses, again phrasing the comment so as to fit the
interrogatory.
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EXHIBIT 3: SAMPLE TECHNICAL EVALUATION CRITERIA
POINTS
1. CORPORATE EXPERIENCE 15
a. Enforcement Experience (10)
The offerer will be evaluated on the extent of their demonstrated
relevant enforcement-related experience. The offerer should
describe experience concentrating on the specific elements
outlined in the SOW. Offerers will be evaluated according to
their capability and experience as indicated by their completed
and current projects related to enforcement guidance development,
program implementation and evaluation; and according to their
capability and experience in conducting enforcement programs of
similar type, scope, and complexity as outlined in the SOW.
b. Management Experience (5)
The offerer will be evaluated on the extent of their
management experience anticipating or resolving potential
problems during contract performance and in managing large
dollar, highly complex, multi-tasked, multi-disciplinary
contracts.
2. Personnel 35
a. Experience, Qualifications and Availability of Key
Personnel (20)
The Key Personnel will be evaluated on the extent to which they
are senior people with appropriate experience and education;
knowledgeable about environmental enforcement programs; capable
of providing expert testimony, project management and review, and
have substantive knowledge within their issue area; and
are available to work on this contract.
b. Experience, Qualifications and Availability of
Project Group (15)
The Project Group's ability to successfully manage and
complete work assignments for enforcement programs will be
evaluated based on their demonstrated experience,
academic qualifications, training, availability/
percentage of time dedicated to this contract,
accomplishments, and knowledge of enforcement issues
under environmental statutes, including consideration of
the group's composition, position within the overall
organization, and experience to resolve expected
problems.
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3. Technical Approach 20
The offerer will be evaluated on the extent to which
they demonstrate a thorough understanding of environmental
enforcement programs and the requirements of these programs;
and an understanding of and the ability to perform the tasks
listed in the SOW for each of the following areas:
(1) State Enforcement Programs (3)
(2) Federal Facility Response Actions (3)
(3) RCRA/CERCLA Relationship and Other Cross
Program Issues (4)
(4) CERCLA and RCRA General Enforcement Support (4)
(5) Cost Recovery (3)
(6) Program Management and Support (3)
4. Sample Work Plan lj)
The offerer will be evaluated on their response to the
Sample Work Assignment attached to the RFP as Attachment B.
The Sample Work Plan will be evaluated according to the
following criteria:
a. Soundness of Technical Approach and Understanding
of Problems Associated with the Task (4)
b. Adequacy of Project Staffing and Management Plan (3)
c. Degree to which proposed schedule is realistic and
comprehensive within a multi-task and short lead-time
tasking environment (3)
5. Management Plan
The offerer will be evaluated on the extent to which
their proposed organizational mechanisms can successfully
fulfill the requirements of the contract.
a. Organization and Resources (4)
The offerer's effectiveness to successfully manage
this effort will be evaluated in terms of the
clarity of lines of authority and communication
between staff and management; the adequacy and
appropriateness of corporate management's plans for
identifying and addressing any problems that might
arise; the degree to which the roles and responsibilities
of staff and management are defined; and
the level of integration of staff, subcontractors
and field offices.
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b. Cost Forecasting and Tracking (4)
Ability to show how costs in the monthly report will
reflect up-to-date information will be evaluated
including consideration of monthly billing cycles,
accuracy of cost projections and ad-hoc reporting
capability.
c. Management Control (4)
The quality and effectiveness of the offerer's
management information system to maintain management
control of the contract including tracking the
progress of work assignments, providing tools for
effective management, such as a deliverables tickler
system, performing overall cost analysis of types of
assignments, etc., will be evaluated. Further, the
ability to ensure security and integrity of enforce-
ment related records, how work assignments will be
reviewed and distributed in a timely manner, and how
conflict of interest checks will be made, shall also
be evaluated.
d. Equipment and Additional Personnel (3)
(1) Equipment (1)
The demonstrated availability, or ability to obtain
relevant equipment, vehicles, and supplies sufficient
for the scope of work will be evaluated. This will
include acquisition, disposition, and maintenance
procedures.
(2) Personnel (2)
The ability to recruit and maintain staffing levels,
including acquisition of non-team subcontractors,
required under the contract will be evaluated.
e. Responsiveness (3)
The ability of the offerer to provide quick turnaround
response to EPA's needs will be evaluated. Consideration
will be given to the location of your project team and
all offices to be used for this contract.
f. Quality Assurance Plan (2)
Demonstration of how quality assurance/quality control
procedures will yield products of high quality will be
evaluated including the frequency and types of audits
and internal control checks.
9-28
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EXHIBIT 4: Sample Score Sheets
INDIVIDUAL SCORE SHEET FORMAT
TEP NAME: OFFEROR:
ATTACHMENT A - TECHNICAL EVALUATION CRITERIA RFP
1. CORPORATE EXPERIENCE TOTAL 20 POINTS
a. Enforcement Experience 10 Points
The offerer will be evaluated on the extent of their
demonstrated relevant enforcement-related experience. The
offeror should describe experience concentrating on the specific
elements outlined in the SOW. Offerers will be evaluated
according to their capability and experience, as indicated by
their completed and current projects related to enforcement
guidance development, program implementation and evaluation; and
according to their capability and experience in conducting
enforcement programs of a similar type, scope, and complexity as
outlined in the SOW.
STRENGTHS: Page No.
WEAKNESSES:
INTERROGATORIES:
Score: Weight: 10 Total:
9-29
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INDIVIDUAL SCORE SHEET FORMAT
TEP NAME: OFFEROR:
ATTACHMENT A - TECHNICAL EVALUATION CRITERIA RFP
1. CORPORATE EXPERIENCE TOTAL 20 POINTS
b. Management Experience 10 Points
The offerer will be evaluated on the extent of their
management experience anticipating or resolving potential
problems during contract performance and in managing large
dollar, highly complex, multi-tasked, multi-disciplinary
contracts.
STRENGTHS: Page No.
WEAKNESSES:
INTERROGATORIES:
Score: Weight: 10 Total
9-30
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CONSENSUS SCORE SHEETS
TEP NAME: OFFEROR:
ATTACHMENT 1 - TECHNICAL EVALUATION CRITERIA RFP
1. CORPORATE EXPERIENCE TOTAL 20 POINTS
a. Enforcement Experience 10 Points
The offerer will be evaluated on the extent of their
demonstrated relevant enforcement-related experience. The
offerer should describe experience concentrating on the specific
elements outlined in the SOW. Offerers will be evaluated
according to their capability and experience, as indicated by
their completed and current projects related to enforcement
guidance development, program implementation and evaluation; and
according to their capability and experience in conducting
enforcement programs of a similar type, scope, and complexity as
outlined in the SOW.
STRENGTHS: Page No.
WEAKNESSES:
INTERROGATORIES:
Score: Weight: 10 Total
9-31
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CONSENSUS SCORE SHEETS
TEP NAME: OFFEROR:
ATTACHMENT 1 - TECHNICAL EVALUATION CRITERIA RFP
1. CORPORATE EXPERIENCE TOTAL 20 POINTS
b. Management Experience 10 Points
The offerer will be evaluated on the extent of their
management experience anticipating or resolving potential
problems during contract performance and in managing large
dollar, highly complex, multi-tasked, multi-disciplinary
contracts.
STRENGTHS: Page No.
WEAKNESSES:
INTERROGATORIES
Score: Weight: 10 Total
9-32
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EXHIBIT 5: Good and Bad Individual Score Sheets
GOOD GOOD GOOD INDIVIDUAL SCORE SHEETS GOOD GOOD GOOD
TEP NAME: Jane Doe OFFEROR: UBSTER, INC.
ATTACHMENT C - TECHNICAL EVALUATION CRITERIA RFP WOOOOOQ-E1
1. CORPORATE EXPERIENCE TOTAL 20 POINTS
a. Enforcement Experience 10 Points
The offerer will be evaluated on the extent of their demon-
strated relevant enforcement-related experience. The offerer
should describe experience concentrating on the specific elements
outlined in the SOW. Offerers will be evaluated according to
their capability and experience, as indicated by their completed
and current projects related to enforcement guidance development,
program implementation and evaluation; and according to their
capability and experience in conducting enforcement programs of a
similar type, scope, and complexity as outlined in the SOW.
STRENGTHS: Page No.
UBSTER, Inc. has extensive experience in supporting almost all
areas of EPA activity. They demonstrated excellent experience in
areas of developing enforcement documents and cost recovery
actions, citing several very good examples (Pgs. 7-10). They
show strong experience in policy and information areas, and
regulatory document development. They provided many examples of
documents they assisted in developing which were clear, concise
and well-written (Pgs. 20-45). They also show strong experience
in the areas of training and database development. UBSTER listed
over 100 different examples of training courses they developed
and presented for EPA and other agencies (Pgs. 51-55). They
demonstrated their experience in RAG Indemnification issues, as
well as experience in most levels of specific environmental
enforcement issues. Their exhibits (Exhibit B/Pages 35-65)
indicate over 200 projects and activities of large dollar value
that demonstrate considerable expertise and experience in all of
the specific elements outlined in the SOW.
WEAKNESSES: UBSTER did not address, or indicate, any experience
in the areas of administrative orders/consent decrees and
administrative, civil and criminal actions. In addition, it was
difficult to evaluate their experience in the areas of work plan,
RI/FS and RODS since they were not mentioned in their proposal.
9-33
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INTERROGATORIES: 1. Please clarify your experience in the areas
of administrative orders/consent decrees and administrative,
civil and criminal actions.
2. Please clarify your experience in the areas of work plan
RI/FS and ROD development.
Score: 1 Weight: 10 Total: _8
9-34
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GOOD GOOD GOOD GOOD GOOD GOOD GOOD GOOD GOOD GOOD GOOD GOOD GOOD
INDIVIDUAL SCORE SHEETS
TEP NAME: Jane Doe OFFEROR: UBSTER. INC.
ATTACHMENT C - TECHNICAL EVALUATION CRITERIA RFP WOOOOOO-E1
1. CORPORATE EXPERIENCE TOTAL 20 POINTS
b. Management Experience 10 Points
The offerer will be evaluated on the extent of their
management experience anticipating or resolving potential
problems during contract performance and in managing large
dollar, highly complex, multi-tasked, multi-disciplinary
contracts.
STRENGTHS: Page No.
UBSTER illustrated in their proposal an excellent contingency
plan to address problems as they arise (Page 26) and they have
several checkpoints built into their plan to prevent problems.
UBSTER demonstrated they could respond to EPA problems, i.e. a
staff member worked around the clock for two months to provide
analytical and reporting support for a Congressional hearing on
the adequacy of the RCRA groundwater monitoring program at land
disposal facilities. UBSTER clearly demonstrated experience in
resolving management problems on short notice and for those
requiring critical actions (Page 44). UBSTER recognized and
emphasized the importance of extensive communications with EPA
personnel at all levels and outlined a complete, effective
communications network in their proposal (Page 56).
UBSTER demonstrated superior experience by indicating prior
contracts where they have successfully managed large, multi-
disciplinary contracts. These contracts include the $60 M EPA
Technical Enforcement Support contract, DOE's $2.5 billion
Strategic Petroleum Reserve Project and $900 M Uranium Mill
Tailings Remedial Action Program (Page 19). In addition, UBSTER,
Inc. has supported OSW, OERR and OWPE since the passage of RCRA
in 1976 and CERCLA in 1980. They have been involved with all of
these programs on activities including regulatory development and
program enforcement (Pgs. 20-25). They are currently managing 35
large dollar EPA contracts in the areas of Superfund and RCRA.
(Exhibit A/Pg. 106). They have over 40 years of experience with
Federal contracts for various other agencies.
9-35
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WEAKNESSES: None were identified.
INTERROGATORIES: None were identified.
Score: 5 Weight: 10 Total: 10
9-36
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BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD
INDIVIDUAL SCORE SHEETS
TEP NAME: Jane Doe OFFEROR: UBSTER. INC.
ATTACHMENT D - TECHNICAL EVALUATION CRITERIA RFP WOOOOOQ-E1
1. CORPORATE EXPERIENCE TOTAL 20 POINTS
a. Enforcement Experience 10 Points
The offerer will be evaluated on the extent of their
demonstrated relevant enforcement-related experience. The
offerer should describe experience concentrating on the specific
elements outlined in the SOW. Offerers will be evaluated
according to their capability and experience, as indicated by
their completed and current projects related to enforcement
guidance development, program implementation and evaluation; and
according to their capability and experience in conducting
enforcement programs of a similar type, scope, and complexity as
outlined in the SOW.
STRENGTHS: Page No.
UBSTER, Inc. has demonstrated good experience. Their proposal
was well written. They appeared to understand most of the
Statement of Work. They were strong in some areas and weak in
others.
WEAKNESSES:
UBSTER, Inc. did not show any experience in seven out of the 11
areas outlined in the SOW.
INTERROGATORIES:
1. Please clarify your experience in the areas outlined in the
Statement of Work.
Score: 4.5 Weight: 10 Total: _9
9-37
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BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD BAD
INDIVIDUAL SCORE SHEETS
TEP NAME: Jane Doe OFFEROR: UBSTER. INC.
ATTACHMENT D - TECHNICAL EVALUATION CRITERIA RFP WOOOOOQ-E1
1. CORPORATE EXPERIENCE TOTAL 20 POINTS
b. Management Experience 10 Points
The offerer will be evaluated on the extent of their
management experience anticipating or resolving potential
problems during contract performance and in managing large
dollar, highly complex, multi-tasked, multi-disciplinary
contracts.
STRENGTHS: Page No.
UBSTER, Inc. has lots of real good experience. Their write-up in
this area was strong. They included many exhibits and graphs
illustrating their experience. UBSTER, Inc. has managed a lot of
contracts for the private sector. They indicated in their
proposal that they can resolve problems. They know how to get
the job done.
WEAKNESSES:
UBSTER, Inc. has no EPA contracts.
INTERROGATORIES:
1. Do you have any EPA contracts?
Score: 3 Weight: 10 Total: 10
9-38
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EXHIBIT 6: SCORING PLAN
The evaluation of technical proposals shall be accomplished
using the Scoring Plan specified below. The values used in
technical evaluation shall be limited to those established in the
Scoring Plan.
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 offerer.
3 The proposal element is adequate. Overall
meets specifications. However, comments
should be made on any perceived weaknesses
or on areas in which an offerer could
improve.
3.5* Intermediate merit.
4 The proposal is good with some superior
features.
4.5* Intermediate merit.
5 The proposal is superior is most features.
* The values 3.5 and 4.5 are to be used to indicate intermediate
merit. If used, the chairperson of the Technical Evaluation
Panel shall provide a narrative to explain the distinction
between 3 and 4 or values 4 and 5.
The numeric values (1-5) should be converted into percentages
of the total available points for that value. For instance, if a
score of 4 (80%) is assigned to a sub-criteria that accounts for
10% of the total technical evaluation criteria weight, the
following calculation produces the total score for that sub-
criteria. Thus, the value score percentage of 80% (4) is
multiplied by the sub-criteria weight of 10 to produce a sub-
criteria total of 8.
9-39
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EXHIBIT 7: FORMAT OF THE TEP REPORT
MEMORANDUM
SUBJECT: Technical Evaluation Panel Report on Proposals
submitted under RFP
FROM: / Chairperson
Technical Evaluation Panel
Office of
TO: / Contracting Officer
Office-Mail Code
A. Introduction
In this section, describe when the panel met; that the
(Contracting Officer's name) from 0AM briefed
the panel on , 199_; how long you met; who the panel
members are; refer to an attachment containing all the disclosure
statements; etc. Also state that no panel members had a conflict
of interest in this section.
B. Background (Make the following Statement)
The proposals received were evaluated in accordance with
the evaluation criteria contained in the subject RFP and pursuant
to EPAAR 1515.6.
C. Individual Technical Evaluations
Indicate that attached to this report as Attachment A
are the individual score sheets of each TEP member for each
proposal.
D. Consensus Technical Evaluations
Refer to Attachment B (Consensus Score Sheets) and what
it represents. The consensus should include a detailed narrative
on all of the technical evaluation criteria elements.
E. Overview
The following is a summary of the results of the TEP
evaluation:
Insert Attachment C - Consensus Matrix
F. Certifications
Attachment D - Certificate for Conflict of Interest
Attachment E - Certification for the Unauthorized
9-40
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Disclosure of Procurement Information
Attachment F - Procurement Integrity Certification.
G. Attachments
List your Attachments
H. CONSENSUS Signature Page
Add the signature sheet, with original signatures, for
each consensus report (see below).
CONSENSUS REPORT SIGNATURE PAGE
Date , Chairperson
Date
Date
Date
9-41
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EXHIBIT 8: Sample Individual and Consensus Score Sheet Matrices
INDIVIDUAL SCORE SHEET MATRIX
TEP NAME: OFFEROR:
ATTACHMENT A -
CRITERIA
NO.
l.a.
l.b.
2. a.
2.b.
3.1.
3.2.
3.3.
3.4.
3.5.
3.6.
4 .a.
4.b.
4.c.
5. a.
5.b.
5.c.
S.d.l
5.d.2
5.e.
5.f .
TECHNICAL
( VALUE )
SCORE
3
5
4
4.5
2
3
3.5
3
1
3
4
5
5
3.5
5
3
3
4
4.5
4
EVALUATION
X
(60%)
(100%)
(80%)
(90%)
(40%)
(60%)
(70%)
(60%)
(20%)
(60%)
(80%)
(100%)
(100%)
(70%)
(100%)
(60%)
(60%)
(80%)
(90%)
(80%)
CRITERIA RFP
WEIGHT
10
10
20
10
03
03
04
04
03
03
04
03
03
04
04
04
01
02
03
02
TOTAL
6.0
10.0
16.0
9.0
1.2
1.8
2.8
2.4
0.6
1.8
3.2
3.0
3.0
2.8
4.0
2.4
0.6
1.6
2.7
1.6
9-42
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Total 100 76.5
Value Key: 5.0 = 100% 3.5 = 70% 1.0 = 20%
4.5 = 90% 3.0 = 60%
4.0 = 80% 2.0 = 40%
9-43
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CONSENSUS SCORE SHEET MATRIX
TEP NAME: OFFEROR:
ATTACHMENT
CRITERIA
NO.
l.a.
l.b.
2 .a.
2.b.
3.1.
3.2.
3.3.
3.4.
3.5.
3.6.
4 .a .
4.b.
4.c.
5. a.
5.b.
5.c.
S.d.l
5.d.2
5 .e.
5.f .
1 - TECHNICAL
( VALUE )
SCORE
3
5
4
4.5
2
3
3.5
3
1
3
4
5
5
3.5
5
3
3
4
4.5
4
EVALUATION
X
(60%)
(100%)
(80%)
(90%)
(40%)
(60%)
(70%)
(60%)
(20%)
(60%)
(80%)
(100%)
(100%)
(70%)
(100%)
(60%)
(60%)
(80%)
(90%)
(80%)
CRITERIA RFP
WEIGHT
10
10
20
10
03
03
04
04
03
03
04
03
03
04
04
04
01
02
03
02
TOTAL
6.0
10.0
16.0
9.0
1.2
1.8
2.8
2.4
0.6
1.8
3.2
3.0
3.0
2.8
4.0
2.4
0.6
1.6
2.7
1.6
9-44
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Total 100 76.5
Value Key: 5.0 = 100% 3.5 - 70% 1.0 = 20%
4.5 = 90% 3.0 = 60%
4.0 = 80% 2.0 = 40%
9-45
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CHAPTER 10—PROTESTS
1. Definition 10-1
2. Procedures 10-1
3. Protests Filed with EPA 10-2
4. Protests Filed with the GAO 10-3
5. Protests of the GSBCA 10-5
10-i
-------
CHAPTER 10—PROTESTS
1. Definition.
a. A Protest is a written objection by an interested party
to a solicitation {this includes both RFPs and IFBs) for a
proposed contract for the acquisition of supplies or services. A
protest could also be a written objection by an interested party
to a proposed award or the award of such a contract.
b. An interested party for the purpose of filing a protest
means an actual or prospective offerer whose direct economic
interest could be affected by the award of a contract or the
failure to award a contract.
2. Procedures.
a. There are specific procedures for filing protests. The
action that the Contracting Officer will take will be affected by
whether the protest is submitted: (1) before award, or (2) after
award, and whether filed directly with (1) EPA, (2) the General
Accounting Office (GAO), or (3) the General Services Board of
Contract Appeals (GSBCA) for automated data processing (ADP), and
whether the protest is sustained or denied.
b. If an offerer voices a complaint about a procurement and
the way the procurement is being handled, document the complaint
and refer the offerer to the Contracting Officer. Do not discuss
the matter with the offerer yourself.
c. Factfinding.
(1) In order to make a decision as to whether to sustain
or deny the protest, the Contracting Officer must assemble,
review, and evaluate all pertinent information related to the
procurement and to the protest. This process involves a great
deal of factfinding and may involve you as the technical
representative. The information gathered may be put into a
statement called a Findings of Fact. Typically, this statement
includes a chronological detailing of events, from receipt of the
purchase request to award of the contract—or to whatever point
in the process was reached when the protest was filed.
(2) If the protest pertains to the substance of the
RFP/IFB (e.g., an allegation that the statement of work or
specifications are unduly restrictive), the factfinding would be
expanded to include, as appropriate:
• The procurement history of the item.
• Reasons for restrictions (if, in fact, there
were restrictions).
• Quality requirements.
10-1
-------
• Time constraints.
• Special factors for responsibility.
• Other pertinent aspects of the procurement.
3. Protests filed with EPA.
a. Pre- and post-award protests made to EPA only are handled
by the Contracting Officer in accordance with the rules
established in the FAR, Subpart 33.1 and EPA Acquisition
Handbook, Unit 7.
b. Pre-Award Protests.
(1) 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:
(a) The items being solicited are urgently required;
(b) Performance or delivery will be severely delayed
if award is not made promptly; or
(c) It is advantageous to the Government to make
prompt award.
(2) 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 Director of the Office
of Acquisition Management.
(3) If the Contracting Officer or a higher official in
EPA sustains a pre-award protest the RFP/IFB must either be
amended or canceled.
c. Post-Award Protests.
(I) 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 a delay in
receiving the 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 or, if appropriate issue a
"stop-work" order.
(2) 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:
10-2
-------
(a) Cancel the award as being improperly awarded;
(b) Terminate for convenience; or
(c) Allow the improper award to stand considering:
Degree of performance already completed,
Need to prevent performance delays, and
Incumbent contractor's good faith in entering
into the contract.
(3) If the Agency denies the protest, the protestor may
file a "subsequent" protest with GAO.
4. Protests to the GAO. The GAO is authorized by statute, to
render decisions on protests filed with it by any interested
party. The decisions are made by or for the head of GAO, the
Comptroller General of the United States, and they are referred
to as Comptroller General decisions.
a. 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.
b. EPA Actions Required.
(1) 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."
(2) 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:
10-3
-------
(a) Copy of the protest;
(b) Copy of the protesting offerer's proposal;
(c) Copy of the proposal being considered for award or
proposal which is being protested;
(d) Copy of the solicitation, including specifications
or portions relevant to the protest;
(e) The abstract of bids or offers or relevant
portions;
(f) Any other documents relevant to the protest;
(g) A statement which explains the Contracting
Officer's actions and the reasons behind them; and
(h) Findings, actions, recommendations, and other
information necessary for determining the validity
of the protest.
(3) 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 Director of the Office
of Acquisition Management determines in writing that:
(a) Urgent and compelling circumstances which
significantly affect the interest of the United States will not
permit waiting the decision of the GAO; and
(b) Award is likely to occur within 30 calendar days of
the written finding.
(4) 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 Director of the Office
of Acquisition Management 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.
10-4
-------
c. GAP 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.
d. GAP Authority.
(1) 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:
(a) Refrain from exercising any of its options under
the contract;
(b) Recompete the contract immediately;
(c) Issue a new solicitation;
(d) Terminate the contract;
(e) Award a contract consistent with the requirements
of such statute and regulation;
(f) Implement any combination of the above
recommendations; or
(g) Implement such other recommendations as the
Comptroller General determines to be necessary in order to
promote compliance with procurement statutes and regulations.
(2) The Comptroller General will make recommendations on
protests without regard to any cost or disruption from
terminating, recompeting, or reawarding the contract.
(3) 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.
5. Protests of the GSBCA. An interested party may file a
written protest concerning an RFP or IFB 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.
10-5
-------
a. Time for Filing.
(1) 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.
(2) 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.
b. EPA Actions Required.
(1) 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.
(2) 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:
(a) A Contracting Officer's decision, if any.
(b) The contract, if any.
(c) All relevant correspondence.
(d) Affidavits or statements of witnesses on the matter
under protest.
(e) All documents relied upon by the Contracting
Officer in taking the action protested.
(f) 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.
(3) No later than 15 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.
10-6
-------
c. 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.
d. GSBCA Hearings and Decision Authority.
(1) 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.
(2) 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:
(a) The Board may dismiss a protest the Board
determines is frivolous or which, on its face, does not state a
valid basis for protest.
(b) 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.
(c) 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.
(d) 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.
10-7
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APPENDIX A
GLOSSARY OF TERMS
Account Number - A set of 10-didgit numbers used for tracking
financial transactions in EPA's financial management systems and
associating it with appropriation accounts.
Advisory and Assistance Services - Services to support or improve
Agency policy development, decision making, management and
administration, or to support and improve operation of management
systems. OMB Circular A-120 mandates Agency control measures.
The AA for OARM approves all services in excess of $1 million.
Allocable Costs - A cost is allocable to a Government contract if
it is assignable or chargeable to one or more cost objectives
incurred specifically for the contract, benefits both the
contract and other work, and is necessary to the overall
operation of the business.
Allowable Costs - Contract costs acceptable for payment under
Government Cost Accounting Standards. Criteria for the
acceptability of these costs include reasonableness,
allocability, terms of the contract, and any limitations set
forth in FAR subpart 31.2 on contract cost principles.
Antideficiencv - A violation of the Antideficiency Act in which a
Federal agency incurs obligations or makes expenditures (1) prior
to appropriations or (2) in excess of amounts available in
appropriation or fund accounts.
Award Fee Contract - A cost reimbursement contract that provides
for a fee consisting of (1) a base fee fixed at inception of the
contract and (2) an award fee amount that the contractor may earn
in whole or in part during contract performance.
Bona Fide Need - A fiscal year appropriation may be obligated
only to meet a legitimate or bona fide need arising in the fiscal
year for which the appropriation is available.
Certificate of Current Cost and Pricing Data - A certificate
supplied by a contractor authenticating that to the best of his
knowledge and belief, the cost or pricing data were accurate,
complete, and current as of the date of final agreement on price.
The certificate may be the basis for a price reduction in the
contract if information known to the contractor affecting the
contractor's price was disregarded.
Commitment - Funds reserved by a Program Office for obligation by
the Contracting Officer on a contract action.
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Competition in Contracting Act - Requires the Government to
compete all procurements above $25,000 unless criteria justifying
the use for other than full and open competition are met. Those
seven criteria are: (1) Only One Responsible Source, (2) Unusual
and Compelling Urgency, (3) Industrial Mobilization or
Experimental, Development or Research work, (4) International
Agreement, (5) Authorized or Required by Statute, (6) National
Security and (7) Public Interest.
Confidential Business Information - Any information considered
confidential and proprietary. Examples include: profit margins,
indirect cost rates, number and kind of employees, individual
salary rates, amount of award fee earned, and resumes of
contractor employees.
Conflict of Interest (COI) - Because of other activities or
relationships with other entities, a person is unable or
potentially unable to render impartial assistance or to advise
the Government, or a person's objectivity in performing contract
work is or might be otherwise impaired, or a person has an unfair
competitive advantage.
Contracting Officer (CO) - Official who has delegated authority
from the Administrator through the Director, Procurement and
Contracts Management Division to enter into contracts on behalf
of the Agency.
Cost Accounting Standards (CAS) - Standards established by law
for certain contracts that provide for consistency in estimating,
accumulating, and reporting costs. CAS is set forth in FAR Part
30.
Cost Plus Fixed Fee Contract - (term or completion)- A contract
where the Government pays all reasonable, allowable, and
allocable costs plus a negotiated fixed fee. There are two types:
term and completion. Completion describes the scope of work to
be done as a clearly defined specific task. Term describes the
scope of work in general and obligates the contractor to devote a
specific level of effort for a stated period of time.
Cure Notice - Notice sent to a Contractor requiring remedies to
noted deficiencies in contract performance.
Debarment and Suspension - (Debarment) Action taken by a
debarring official to exclude a contractor from Government
contracting and Government approved subcontracting for a
reasonable, specified period. (Suspension) Action taken by a
suspending official to disqualify a contractor temporarily from
Government contracting and Government approved subcontracting.
Suspension is an immediate action taken to protect the
Government's interest pending the completion of an investigation
or legal proceedings.
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Delivery Order - An order for supplies or services placed against
an established contract or with Government sources of supply.
Delivery Order Project Officer fDOPO) - Defines work requirements
for the Delivery Order Officer and Contracting Officer to use in
the preparation and issuance of delivery orders under indefinite
delivery/indefinite quantity contracts. Also monitors contractor
performance.
Directed Subcontract - An illegal action where the Government
instructs a prime contractor to utilize a particular
subcontractor to perform certain contract requirements.
Disputes - The disputes procedure is the formal means for
resolving conflicts arising under a contract which cannot be
resolved by means of negotiation and mutual agreement. The
contractor may appeal a Contracting Officer's final decision to
the Department of Interior Board of Contract Appeals.
Document Control Number (DCN) - A unique 6-digit number assigned
by the Funds Certifying Official to each commitment or obligation
transaction to track actions on them. Each commitment notice
must have a unique DCN specifying funding purpose and source.
Fixed Price Contract - Government pays a fixed price established
before award which is not subject to adjustment regardless of the
contractor's costs incurred. The risk of performance is on the
contractor.
Funds Certifying Official - EPA officials, designated by
allowance holders, to ensure that sufficient funds are available
in an allowance for the amount and time period requested and the
purpose is correct according to existing authority before an
obligation is requested. This official assigns DCNs and
maintains a DCN register for all transactions of an allowance
holder.
Incremental Funding - Partial funding of a cost reimbursement
contract. It is used in situations where program offices do not
have the full amount of funding available at the time of contract
execution, but expect to have it later in the contract period.
Indefinite Delivery. Indefinite Quantity Contract - A type of
contract under which orders are placed against the contract after
award. Orders specify time and place of delivery and quantity to
be delivered. The contract contains a minimum amount which the
Government must order, and a maximum amount which may not be
exceeded.
Indirect Cost Rates - The percentage or dollar factor that
expresses the ratio of indirect expense incurred in a given
period to direct labor costs, manufacturing costs, or another
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appropriate base for the same period. Provisional or billing
rates are established temporarily for interim reimbursement of
incurred indirect cost. Final rate is the indirect cost rate
established and agreed upon by the Government and the Contractor
after completion of a Contractor's fiscal year that is not
subject to change.
Inherently Governmental Function - Function so intimately related
to the public interest as to mandate performance only by Federal
employees. These include functions which require either the
exercise of discretion in applying Government authority or the
use of value judgment in making decisions for the Government.
Invoice/Voucher - The contractor's bill for services rendered and
for supplies, usually submitted on a monthly basis.
Head of the Contracting Activity - The official who has overall
responsibility for managing the contracting activity. At EPA,
the Head of the Contracting Activity is the Director, Office of
Acquisition Management.
Level of Effort Contract - A cost reimbursement term form
contract. The Contractor's obligation is to furnish a fixed
number of person hours over a specific time period for
performance of a general statement of work.
Modifications within Scope/Additional Work - Modifications to the
contract that fall clearly within the original intention of the
parties during contract award. Additional work outside scope
must follow the CICA guidelines and be justified on a sole source
basis.
Monthly Progress Report - A monthly report from a Contractor
giving a complete status of all project elements i.e. financial,
technical, management, and administrative.
Obligation - When the Contracting Officer executes a contract
action and previously committed funds are reserved for use under
the contract.
Option - A unilateral right of the Government for a specified
time to purchase additional supplies or services, or to extend
the term of the contract.
Privity of Contract - A direct contractual relationship. The
Government has privity only with the prime contractor. The
Government has no privity with a subcontractor.
Procurement Executive - The individual who is responsible for
management direction of the acquisition system of the executive
agency, including implementation of the unique acquisition
policy, regulations, and standards of the executive agency. At
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EPA, the Procurement Executive is the Director, Office of
Acquisition Management.
Procurement. Integrity Act - A federal law prohibiting employees
from accepting bribes or gratuities, or discussing employment
with a contractor during pre-contract award activities, and
prohibiting former Government employees from working on contracts
for a Contractor for which they had personal and substantial
involvement during the pre-award phase while a Government
employee.
Project Officer (PCM - Primary technical representative of the
Contracting Officer for the contract. She/he may plan
acquisitions, initiate requirements, perform technical
evaluation, and monitor the contractor's performance after award.
This individual does not have contracting authority.
Property Administrator - An employee designated by the
Contracting Officer to administer Government property on
contracts.
Protest (GAP. GSBCA) - A written objection by an interested party
to a solicitation or to a proposed award or the award of a
contract. GSBCA may decide protests on ADP acquisitions. GAO
decides protests on all other types of acquisitions.
Purchasing System Review - A formal review of a contractor's
purchasing system by OAM for compliance with federal regulations.
Recertification of Funds - A carryover allowance granted by the
Agency Comptroller for multiple year appropriations. For
example, if a two year appropriation covering fiscal years 92 and
93 is not obligated by September 30, 1992, the Comptroller must
recertify the funds prior to obligation in FY 93.
Request for Proposals fRFP) - A formal request for receipt of
proposals from offerers which allows for negotiations.
Sealed Bid - A method of contracting that employs competitive
bids, public opening of bids, and award to the lowest
responsible, responsive offerer. Sealed bidding involves no
negotiation between offerers and the Government.
Severable Services - Those services which are continuing in
nature or may otherwise be separated into components, each of
which can be independently performed to meet a separate need of
the Government. Examples include Guard services and Janitorial
services.
Small Business Set-Aside - The reserving of an acquisition
exclusively for participation by small business concerns.
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Synopsis - A published summary in the Commerce Business Daily to
identify proposed contract actions and contract awards.
Technical Direction - Direction provided to a contractor by a
Project Officer to assist the Contractor in accomplishing the
statement of work and other contract requirements. Technical
direction may not alter the terms and conditions of the contract.
Termination for Convenience - The Government's unilateral right
to cancel work in whole or in part under a contract whenever it
determines that is in the Government's best interest. Contractors
are entitled to reasonable costs resulting directly from the
termination action.
Termination for Default - The Government's unilateral right to
terminate a contract in whole or in part when the contractor has
failed to perform its contractual obligations. Contractors are
not entitled to any costs that may result directly from the
termination action.
Work Assignment Manager (WAM) - A technical representative of the
Contracting Officer on a specific work assignment. Develops the
work assignment, monitors performance, provides technical
direction, and recommends any necessary modifications to the
Project Officer on cost reimbursement level-of-effort contracts.
Work Assignment - A specific task for work issued under a cost
reimbursable, level-of-effort contract.
8 fa) Contract - Section 8(a) of the Small Business Act
authorizes the Small Business Administration to contract with
Federal agencies and then to subcontract the work to socially and
economically disadvantaged small businesses. In effect, the
Government has the authority to enter into contracts with such
businesses on a sole source basis under the 8(a) program.
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United States Office of EPA-202-B-94-003
Environmental Protection Administration and June 1994
Agency Resources Management
&EPA Guide For Preparing
Independent Government
Cost Estimates
Recycled/Recyclable
Printed with Soy/Canola Ink on paper that
contains at least 50% recycled fiber
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Office of Acquisition
inagement
dysis Division
Washington, DC 20460
June 1,1994
Environmental Protection
Agency
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GUIDE FOR PREPARING INDEPENDENT GOVERNMENT
COST ESTIMATES
TABLE OF COHTENTS
Page
I. PURPOSE OF GUIDE - 4 -
II. BACKGROUND - 4 -
III. DEFINITION AND USES OF IGCEs - 5 -
1. Definition - 5 -
2. Types of Cost Estimates - 5 -
3. Uses of IGCEs - 6 -
4. Who is responsible for preparing IGCEs? - 7 -
IV. PREPARING THE IGCE - 7 -
1. Statement of Work - 7 -
2. Work Breakdown Structure (WBS^ - 8 -
3. Databases -8-
4. Identifying Costs - 9 -
5. Steps for Estimating Direct Labor - 11 -
6. Fringe Benefits - 14 -
7. Overhead - 14 -
8. Travel - 14 -
9. Other Direct Costs (QDCs't - 14 -
10. General and Administrative (G&A~> - 15 -
11. Profit or Fee - 16 -
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A. Sample Work Breakdown Structure (WBS)
B. Sample IGCE - Cost Reimbursable Contract
C. Sample IGCE - Fixed Rate/Indefinite Quantity Contract
D. IGCE Forms - Cost Reimbursable Contract
E. IGCE Forms - Fixed Rate/Indefinite Quantity Contract
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I.
PURPOSE OF GUIDE
This guide has been prepared to provide
general guidance to the Environmental Protection
Agency (EPA) personnel in their preparation of
independent government cost estimates (IGCEs).
This document does not contain required Agency
procedures. It demonstrates ways of preparing
IGCEs and provides forms and examples which will
be helpful in preparing your IGCEs. IGCEs are
prepared in support of procurement requests leading
to new contracts, to support modifications and change
orders, and to support the issuance of new work
assignments and delivery orders under existing EPA
contracts. This basic guidance can be used for new
and existing contracts. On existing contracts we
should have better defined needs for work assign-
ments (WA) and delivery orders (DO) which should
result in more detailed cost estimates.
This guide does not provide program specific
guidance. It does provide a thorough overview for
preparing an IGCE. It is expected that each EPA
program office will supplement this guide with
information relative to the specific program's require-
ments. The development and maintenance of good
databases are essential to effective cost estimating.
Some programs have developed program specific
databases and computer software that facilitate the
preparation of their IGCEs. All program offices are
encouraged to take similar actions.
n. BACKGROUND
Independent Government Cost Estimates
have always been an integral part of effective acquisi-
tion programs both in Government and private indus-
try. The Administrator's Standing Committee on
Contract Management in its report issued on June 30,
1992, disclosed that this agency provides little guid-
ance on cost estimating and has not allocated ade-
quate program resources to support development of
IGCEs. The General Accounting Office (GAO) has
long been concerned with EPA's failure to develop
independent cost estimates. The EPA Office of the
Inspector General (OIG) has identified improper
contractor assistance with cost estimation on
Automated Data Processing (ADP) contracts. The
Administrator's Task Force on Implementation of the
Superfund Alternative Remedial Contracting Strategy
(ARCS), issued its report (the Dunne Report) in
October 1991, and commented on the lack of
independent cost estimates in the Superfund program.
As a result of the Dunne Report, Superfund began
developing guidance and databases specifically for the
Superfund remedial programs.
For purchases of ADP equipment, related
services and related equipment, the Federal Infor-
mation Resources Management Regulations (FIRMR)
require agencies to establish and document require-
ments for Federal Information Processing (FIP)
resources by conducting a requirements analysis
commensurate with the size and complexity of the
need. This analysis and an alternatives analysis are
required to accompany the Agency Procurement
Request to obtain a Delegation of Procurement
Authority (DPA) (when a DPA is required). "The
analysis of alternatives requires Agencies to compare
the costs of each feasible alternative unless the
anticipated cost of the acquisition is less than $50,000
(41 CFR 201-20.2). Required guidance for cost
calculations can be found in Office of Management &
Budget (OMB) Circular N. A-94, "Benefit-Cost
Analysis of Federal Programs; Guideline and
Discounts" for calculating alternative costs."
"Further information on whether the FIRMR applies
to your solicitation is in the FIRMR (41 CFR 201-
20.305) and associated FIRMR Bulletins (Bulletin A-
1), published by Government Services Administration
(GSA) and available in the Headquarters Library.
Further guidance on when your solicitation may
require a Delegation from GSA may be found in the
FIRMR (41 CFR 201-20.305)."
The Administrator's Standing Committee
report says the development of in-house cost esti-
mation skills is an Agency contracts management
priority. This guide is one step in complying with
the Standing Committee recommendation on IGCEs
and making IGCEs a normal part of the EPA
acquisition process.
The current policy requires IGCEs be
submitted with contract actions greater than
$25,000. Contract actions include new contract
awards, modifications to increase the scope of
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work of the contract, work assignments and
delivery orders.
IH. DEFINITION AND USES OF
IGCEs
1.
Definition
A cost estimate is generally defined as a
projection or forecast of the economic or financial
value of goods and/or services to be delivered in the
future. An Independent Government Cost Estimate
is a detailed estimate of the cost to the Government
for services and/or supplies to be acquired, generally
from contractors. The estimate must be the Govern-
ment's own in-house estimate and must not be based
upon information obtained from contractors/ offerers
from which proposals will be solicited. An IGCE is
the Government's estimate of what a responsible
contractor should propose based on the statement of
work. The IGCE should not be divulged to any
potential contractor.
There are various steps required in the
development of an IGCE. All are necessary for a
good cost estimate. The time expended and the depth
of information needed for each step will depend on
the phase and complexity of the work being
estimated. The various steps are summarized in the
following paragraphs:
A. Know the requirement, project or service
being procured. In Government contracts,
the Statement of Work (SOW) is the source
document which defines the requirement,
project or service. Any work not included
in the SOW should not be included in the
cost estimate.
B. Establish ground rules and assumptions.
Examples of things to look for here include
the following:
• Determine what the schedules and
milestones are for completing the
cost estimate and for completion of
the entire project.
• Determine if this is a brand new
endeavor, continuation or follow-on
procurement.
Determine if management has the
need for any built in reserves and
what impact budgets may have on
your estimating.
Document all ground rules and as-
sumptions.
C. Determine if any historical databases are
available and what other sources of data are
available for the cost estimator to use. This
could include experience on like or similar
efforts, any type of professional materials,
surveys and personal expertise of the cost
estimator and co-workers. Document all
sources of information.
D. Determine what method of estimating will be
used. The two methods to be discussed in
this guide are the "Top-down and the Bot-
toms-up" methods. You may use a
combinations of these methods. Document
the estimating method chosen and why it
was selected.
E. Using the chosen method of estimating, pre-
pare your estimate for quantities for labor,
materials, travel and other elements of cost.
Document the quantities used and how they
were determined.
F. Review and organize your information and
estimate unit costs for each category of cost
and compute your estimate. Document the
source and dates of your costs.
G. Review the resulting cost estimate for credi-
bility, reasonableness, accuracy, and com-
pleteness. Make sure all steps in the IGCE
preparation have been well documented.
H. Use the estimate to prepare the procurement
package.
2. Types of Cost Estimates
Every cost estimate will be based on
forecasts and cannot be predicted with absolute
certainty. EPA's goal for cost estimates is to achieve
predictions that are as accurate as possible using the
information available and the best estimating
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technique for a given situation. Generally speaking,
there are two major types of cost estimates,
parametric (top down) and engineering (bottotns-up).
In many instances a combination of these two
methods may be used.
Parametric or Top Down. This is called the ballpark
approach and is based upon pricing major measurable
units such as manhours, cubic yards, number of
moves, number of laboratory tests or number of
computers, major computer systems requirements,
etc. to determine an approximate estimate of the
costs. This approach requires the use of a database
with like elements of work. It requires collecting and
organizing historical data and relating it to the work
output being estimated. When making any estimates
based on historical data, adjustments have to be made
to the database information for the specific work
required and for cost increases/decreases due to
differing requirements and economic conditions.
The top down method would be used in the
early planning stages of a project when the precise
quantities or needs are not yet known or when
requirements are not fully known or detailed
specifications are not available. This is the method
which would probably be used when preparing an
IGCE for a new contract as opposed to a work
assignment or a delivery order on an existing
contract. The estimate would result in an "order-of-
magnitude" projection of costs, and would have to be
refined as the work product becomes more defined.
The top down approach may not detail all peripheral
costs, such as site preparation access, regulatory per-
mitting costs, specific license requirements, main-
frame time-share costs or software, but some
estimates of the cost of these items should be
included.
Engineering or Bottoms-up. This is called the
detailed estimate and represents the opposite end of
the cost estimating spectrum. It presumes that the
total effort can be separated into a work breakdown
structure (WBS), and pricing can be applied to each
element such as labor, overhead, travel, equipment,
other direct costs and G&A. The database for a
bottom-up estimate has to be very detailed and
represents the accumulated experiences of many
previous and similar projects. Adjustments still have
to be made and you should never depend entirely
upon any historical database. If a program is just
starting to prepare IGCEs, formal supporting databas-
es may not exist. However, there may be sufficient
in-house experience and prior contracts for similar
work which will provide information to assist you in
using this method.
This type of estimate is prepared following
completion of a detailed design specification of a
proposed construction project, detailed requirements
for software development, and whenever the needs
are well defined. Each program should have as a top
priority, preparing well defined needs for your SOW
prior to even considering a Purchase Request (PR)
package. In this scenario, fairly complete knowledge
of the work to be done is assumed, and exact work
steps or tasks and subtasks have been developed.
Typically, SOWs address "what is required", not
"how to do it." Therefore, offerers may propose
different methods of "how to do it" than anticipated
by the cost estimator. The Agency wants the bottom-
up type of detailed IGCE for all work assignments
and delivery orders.
3.
Uses of IGCEs
EPA uses IGCE's for several purposes.
Among them are the following:
A. For evaluation of proposals for new con-
tracts. Once an IGCE has been completed,
all offers received can be compared to the
IGCE. Differences and similarities can be
compared and various conclusions can be
drawn. The Project Officer (PO),
Contracting Officer (CO), cost estimator and
cost analyst participate in this comparison
analysis, depending on the situation. Exam-
ples of what this comparison might disclose
include the following:
(1) The proposals overstate work re-
quired.
(2) The proposals understate the work
required.
(3) The SOW does not sufficiently
explain the requirements.
(4) The SOW is good, the IGCE is
good, the technical proposals are
good, but the proposal prices are
either too high or too low.
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(S) The proposals may include ideas
and/or new technologies not
considered by the Government.
B. For budget purposes prior to awarding con-
tracts, issuing DOs and WAs. A good
IGCE can be used to prepare the budget,
prioritize areas of concern and monitor the
work in process. You must always keep in
mind that the IGCE is an estimate and may
differ from the final cost. In an ideal situa-
tion these differences will be insignificant.
However, there may be significant differ-
ences. You should analyze closely the
differences to understand why they occurred
and learn from them for the future. It is a
good idea to document significant differenc-
es for future references.
C. For evaluating proposals for work assign-
ments and delivery orders. This is similar
to evaluating proposals for new contracts.
One difference is the lack of competition
since the contract has already been awarded.
The lack of competition increases the impor-
tance of a complete and accurate IGCE.
The quantities and levels of expertise and the
associated amounts for other direct costs
used in the IGCE are extremely important in
this situation since rates for labor and
indirect cost and associated amounts for
other direct costs will have been negotiated
for the contract as a whole.
D. To document negotiation objectives. This is
a continuation of the process of comparing
the IGCE to the proposals. The differences
and similarities should be highlighted and
the CO and PO should work together to
determine what the Government's nego-
tiation objectives should be and what issues
will be discussed during negotiations.
Desired outcomes should be documented as
part of the CO's prenegotiation plan.
E. To document award decisions. Any contract
award should be based on a fair and reason-
able price for the required work. The IGCE
will assist the CO and POs in their deter-
mination that the Government will pay a fair
and reasonable price and will get an accept-
able service or product. Any significant
difference between the IGCE negotiation
objective and the final cost/price negotiated,
should be addreseed and documented for the
contract file.
4. Who is responsible for preparing IGCEs?
It is the responsibility of the Program Office
(RPM/WAM.PO/DOPO or other technical personnel)
to develop the Independent Government Cost
Estimate. These persons are responsible for
determining the resources necessary to perform the
work described in the statement of work. If your
office or region has an in-house cost estimator he/she
will probably be utilized for new procurements and
large, complex WAs/DOs. In these situations the
program technical personnel and the cost estimator
should work very closely to ensure that the cost
estimator is receiving and utilizing current, accurate
and complete technical information and that there is
complete agreement among all concerned parties as to
the content of the IGCE. For most of the WAs/DOs,
the project officer or lower level technical personnel
will be responsible for preparing the IGCE. The
accuracy and completeness of the IGCE are the
responsibility of the Program Office, not the
Contracting Officer. However, the Contracting
Officer should be available to address specific
contractual issues. Teamwork between the
contracting office and the program is vital for a good
IGCE.
IV. PREPARING THE IGCE
l.
Statement of Work.
The basic requirement for a sound and
defensible IGCE is a good SOW. The SOW is the
starting point for the cost estimator in the preparation
of the IGCE. The SOW is the source document that
defines the Government's requirements for a
product, project or service. It should provide
information on the requirements, descriptions of the
efforts required, and the timing and locations of
efforts. An accurate and defensible IGCE cannot be
developed without a clear, complete and concise
SOW and detailed specifications. The SOW is the
basis for both the IGCE and the contractor's
proposals. A good SOW should provide the
necessary foundation for the EPA to obtain the goods
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and services it contracts for at a fair and reasonable
cost and to get the best product, project or service on
time and within the budget.
Planning the SOW. EPA personnel must
allow a reasonable amount of time to develop and
prepare the SOW so that it includes detailed
descriptions of the technical requirements for a
material, product, or service and includes the criteria
for determining whether the requirements are met.
A rushed project will usually result in a poor SOW
with incomplete requirements and may lead to failure
of the entire project. To start the SOW process, an
outline of the major tasks to be performed should be
developed. This will reduce the likelihood of major
omissions and redundant steps.
Developing the SOW. After the SOW out-
line has been completed, the details can be added
with the assurance that all facets of the work are
included and that a clear, concise and complete SOW
will emerge.
Utilizing the SOW. In addition to the obvi-
ous use of the specification in the resulting contrac-
tual instrument, it is also used to develop the
performance schedule, evaluation criteria for
negotiated contracts, provide a basis of measurement
for analyzing contractor performance, identification
of deliverables, and to develop the work breakdown
structure (WBS).
2.
Work Breakdown Structure (WBS)
A well written SOW should permit the user
to develop a work breakdown structure for the
requirement. Sometimes the WBS is actually
prepared before the SOW. The important point is to
prepare a WBS.
A WBS is prepared by dividing a
requirement, project or service into its major tasks
and dividing its major tasks into subtasks and
dividing the subtasks into sub-subtasks, etc. This
division into small subtasks makes it easier to identify
the work required, to determine required staffing
needs, to schedule the work and to estimate the initial
cost for the desired output. It permits the cost
estimator to assign quantities such as manhours,
disciplines, labor category levels, number of trips,
duration of trips, and equipment, etc.
A WBS provides overall visibility to the
work to be performed and provides some assurance
that all required tasks and subtasks are considered.
It is a valuable tool for identifying activities, deliv-
erables and milestones and provides a baseline to
track actual vs. estimated costs to help determine
potential cost overruns and underruns. It can be used
to identify potential duplications and redundant tasks.
This is an important tool not only for
estimating initial costs, but for scheduling the work,
managing the resources and costs, and tracking the
deliverables and expended effort throughout the
period of performance. Good planning should allow
sufficient time and effort to be devoted to preparing
a WBS to produce a useful product. We recommend
the WBS be prepared using some type of automated
spreadsheet so changes can be made easily.
Included as Appendix A, is a sample WBS
for building a Garage and using the WBS for esti-
mating direct labor hours and dollars.
3.
Databases.
A database is a collection of information.
The simplest form of a database is a list. The more
complex databases are computerized and contain
many different types of information which can be
sorted to provide printouts in different formats to fit
the needs of the user. Each program should be
developing databases appropriate to their needs.
In almost every situation, having a database
of like and/or similar projects will facilitate the
preparation of an IGCE. The cost estimator is
strongly cautioned to not rely completely on historical
data. Historical data may, in some instances, reflect
quantities and prices that are unreasonable and
unacceptable under current conditions or include
inefficiencies for past works. They are a good
starting point, but adjustments have to be made based
on current needs. Historical databases usually will
consist of two primary categories: (1) the quantity of
items to be acquired such as hours (level of efforts)
pieces of equipment, number of service calls of a
particular type, number of types and duration of
trips, number and type of lab analyses, number of
PCs ordered, (2) the specific costs or dollar amounts
incurred for these items.
-8-
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The database of quantities should reflect pro-
jects which are similar in scope - in terms both of
type of work and size - to the project for which the
estimate is being prepared. If no formal database
exists, the IGCE preparer should review invoices and
monthly progress reports containing the actual costs
incurred for WAs or DOs which were issued for like
purposes. The information may or may not be broken
down into tasks and subtask level of detail to permit
a meaningful analysis.
The database of costs will consist of the
specific cost or pricing information such as direct
costs (hourly labor rates, travel costs, equipment
costs, etc.), indirect costs, fixed rates or prices and
unit prices. If there is no formal database, review of
prior invoices and progress reports and personal
experience will all be helpful. If the IGCE is being
prepared for a WA or DO on an existing contract,
the contract will contain much of the cost data needed
to prepare the IGCE.
If relevant databases are unavailable, the
IGCE preparer may consult with other programs or
agencies where similar work may be performed to
obtain assistance. Examples of other agencies which
might have useful information are the U.S. Army
Corps of Engineers for Superfund Clean-up or GSA
for ADP requirements. The Work Assignment
Managers (WAMs) and Delivery Order Project
Officers (DOPOs) can consult with senior or more
experienced project officers. Each major program
office should take steps to develop and maintain data-
bases for all work commonly performed by contrac-
tors. It is extremely important to keep a database
updated once it is in place. Some EPA programs
may have to update their reporting requirements in
their contracts to facilitate the establishment of a
useful database for use in preparing IGCEs, staying
within budgets and better overall management of their
contracts and budgets.
4.
Identifying Costs
As stated in Part III of this guide, an IGCE
is essentially a forecast of what the estimator believes
it will cost the Government for services and/or
supplies to be acquired, generally from contractors.
This estimated cost includes any profit or fee that the
contractor will earn.
In this section we address a broad spectrum
of costs. When you prepare your IGCE you have to
exercise your professional judgement as to the detail
you include on each cost element. You should be
careful about letting external forces, such as time
constraints or funding limits influence your IGCE.
Contractors incur costs in two broad catego-
ries, direct costs and indirect costs. A distinction is
made between the two categories because they are
given different accounting treatments. For a Gov-
ernment contract this distinction insures that a
contractor recovers the costs of performing work and
that only those costs for which a benefit is received
by the Government are charged to the Government.
It is important to have a general
understanding of the difference between direct and
indirect costs because it is necessary to make a
distinction between direct and indirect costs when
preparing an IGCE. Federal Acquisition Regulation
(FAR) 31.202 and 31.203 define these terms. These
terms are simplified for this guide. Direct costs are
costs that can be directly associated with a particular
project or contract. If a cost is incurred specifically
for a contract and would not otherwise be incurred,
it is a direct cost. Examples of direct costs include
direct labor, materials, travel, equipment,
subcontracts, consultants, computer usage time,
courier service and long distance phone calls to name
just a few. An estimator preparing an IGCE has
more control over direct costs than indirect costs.
Indirect costs are not directly associated with a
specific project or contract but are necessary for the
work to be done. Examples of possible indirect costs
are as follows:
Utilities
Management salaries
Maintenance cost
Recruitment costs
Office supplies
Legal fees
Depreciation
Accounting fees
Rent
Telephone
Fringe benefits
There is no specific rule or cost principle
which defines whether a particular cost will be direct
or indirect. A particular element of cost may be
treated as direct or indirect depending upon the
circumstances as long as the contractor treats the cost
consistently. Clerical labor is an element of cost that
can be charged direct or indirect depending on the
specific contractor's practices. Generally, contractors
-9-
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will charge clerical labor which can be identified with
specific contracts as direct labor and all other clerical
labor as indirect labor. This is acceptable as long as
the accounting is consistent. It is important that the
estimator understands the way a contractor charges
the different cost elements on current contracts. On
new procurements the estimator must document
whether he/she considered specific elements of cost
as direct or indirect. Whether a cost is direct or indi-
rect depends on the contractor's accounting system
and consistent treatment of like costs. A contractor
cannot be directed or required to charge a cost in
a way that differs from his usual accounting
practice unless his procedure is in violation of
accepted Government cost principles. For exam-
ple, if it is a contractor's accounting practice to direct
charge the president's time when he meets on
problems dealing with a specific contract, EPA
cannot direct or require him to charge his time to an
indirect account when he holds meetings for your
specific contract. At EPA it is not the
responsibility of the estimator to review and
analyze the contents of the indirect pools and
bases. These details are left to the experts in the
Cost Policy and Rate Negotiation Branch (CPRNB)
of EPA's Cost Advisory and Financial Analysis
Division located in the Office of Acquisition
Management.
CPRNB is a central office which is
responsible for approving indirect billing rates and
negotiating final indirect rates for contractors. Any
confirmation of an indirect rate or any question
dealing with indirect rates should be addressed to this
Branch. Remember, the estimator only needs to
know the rates and the bases to which they are ap-
plied. Any detailed assessment of details is the re-
sponsibility of agency experts in the accounting and
cost advisory areas.
Contractors may have one indirect rate or
dozens of indirect rates. It depends on their ac-
counting systems. Generally speaking, most
contractors will have a minimum of two indirect rates
i.e., an overhead rate and a General & Admin-
istrative (G&A) rate. Overhead expenses are
common expenses for everyday management of a
project or contract such as rent, utilities, clerical
labor, etc. The base for the overhead expense pool
may be direct labor hours, machine hours, direct
material costs or direct labor dollars. The most
common base is direct labor dollars. On an existing
contract, it is necessary for the cost estimator to
know and use the contractor's basis for allocating
indirect costs to ensure accurate amounts for indirect
costs. On a new procurement, it is necessary for the
cost estimator to select a basis of allocation for
indirect rates and document his selection.
G&A expenses are generally expenses for
the overall management of a company. Examples of
expenses found in G&A pools are salaries for upper
management, accounting and legal expenses, rent and
utilities for corporate offices, etc. The base for
allocating G&A expenses is generally total cost, but
other allocation bases may be used. For example, a
contractor may use a base that excludes subcontracts.
There is no rule for an acceptable or
unacceptable number for an indirect rate. No one
can make an informed opinion about a company's
proposed costs from just knowing their indirect
rate(s). A complete understanding of the pools, bases
and the accounting system is required. Any question
regarding the indirect rates should be addressed to the
CPRNB.
When preparing the IGCE, the estimator
should generally assume that all work will be
performed by the prime contractor. In other words
do not price team subcontract costs out separately.
Pricing in this way simplifies the process and the cost
impact is small.
However, there may be instances on existing
contracts where the estimator and/or PO are aware
that the required work falls within the expertise of
one or more of the subcontractors. In these instances
the cost estimate should be based on the subcontract-
ors' rates and any oversight costs required by the
prime contractor.
When preparing the IGCE, document why
costs have been included and any assumptions made
that impact the costs. Once a project has been
completed you can go back and determine where the
differences are and where your assumptions differ
from actual occurrences. Also, when using your
IGCE during negotiations, having your assumptions
all laid out will make it much easier for you to
discuss areas of differences with the contractor.
Each and every assumption and/or decision used in
choosing cost factors, quantities, schedules and any
other IGCE item should be documented not only for
- 10-
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use during and after negotiations but for any possible
future reviews by management or other interested
parties.
It is strongly recommended that an automat-
ed cost template or spreadsheet be set up for each
contract, WA or DO. This will prevent simple math
errors and allow for changes with a minimum of
effort. Remember to update your documentation
whenever you change your template.
5.
Steps for Estimating Direct Labor.
Because such a large percentage of EPA's
contracts are labor intensive, a good Government
estimate for direct labor is fundamental to a clear,
concise and complete IGCE. Preparing a good
estimate for direct labor is both the most difficult
and the most important part of the IGCE. Recom-
mended steps for estimating direct labor are as
follows:
A. In order to prepare a good estimate of direct
labor, the estimator must have a good under-
standing of the work required. This should be
clearly delineated in the SOW so that the con-
tractor and the EPA estimator have the same
understanding of the work effort required.
As stated above, preparing a good estimate for
direct labor is both the most important and the
most difficult part of the IGCE. As such, the
estimator should make use of all the Govern-
ment expertise available. Probably the most
effective method of tapping the available
Government expertise is to use the so called
roundtable method. This involves bringing
together Government representatives having the
specific knowledge and experience of the subject
requirement. Each invited expert should be
given a copy of the SOW in advance and given
sufficient time to study the SOW and
independently estimate the number of hours
required for their area of expertise. At the
roundtable discussions, differences will be
highlighted, and strong and weak areas of the
SOW will be disclosed. If the requirement has
a good SOW, the experts will have little
difficulty understanding it. However, an unclear
and disorganized SOW will result in the experts
having difficulty understanding it and the esti-
mates may be meaningless. The roundtable
discussions should be completely open and allow
the invited experts to discuss all aspects of the
requirement. These discussions will probably
result in adjustments to the individual estimates.
The round-table method may also be utilized in
the acquisition planning stage. It is the respon-
sibility of the estimator to determine the final
estimate of hours based on the input from the
experts. The SOW may be revised at this point
to clarify areas of concern disclosed by the
roundtable discussions. Using the information
and knowledge gained from the roundtable dis-
cussion, the estimator is ready to continue with
his estimate of direct labor. At the WA or DO
level, discussions with your supervisor and some
of your peers may give you sufficient input to
determine if you have a strong SOW or if you
have a lot of experience, your personal
experiences and professional judgement may be
adequate.
B. A work breakdown structure (WBS) of the
project will enhance everyone's understanding of
the requirement, facilitate the roundtable
discussions and result in a more meaningful
IGCE. If a WBS has not been prepared, you
should prepare one. This includes breaking the
statement of work into as many tasks and
subtasks as can be identified or as considered
necessary.
C. Identify the hours, Professional (P) & Technical
(T) levels and disciplines and/or labor categories
and associated descriptions required for each
task. A helpful hint to keep in mind is "if the
work was performed 'in-house' what resources
would be needed." The write-up must include
all assumptions and the basis for selections.
Decisions will probably be derived from one or
a combination of the following:
(1) Current database for similar work being
performed on this contract or a similar
contract with adjustments for any differenc-
es.
(2) Roundtable discussions with Government
experts, supervisors and peers.
(3) Personal experiences and professional judge-
ment.
- 11 -
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(4) Available Government models for the type
of work required.
(5) Historical data on prior similar contracts.
(Caution: You should never rely completely
on historical data; there will generally be
some adjustments required.)
D. If this is a delivery order on a contract already
in place, compare the estimated P & T levels
and disciplines with the contract to insure that
the contract contains these levels and disciplines.
If this is a new contract to be placed, work with
the CO to insure that the appropriate P & T
levels and disciplines are included in the solici-
tation.
E. Price the hours, P & T levels and disciplines
identified in C above.
If the estimate is for a new procurement, use
historical databases on previous work with ad-
justments for escalation and differences in the
complexity of work. You may also contact one
of the Cost Advisory offices in the Office of
Acquisition Management (Headquarters, Cincin-
nati, and RTP) to see what information they
may have on rates being currently proposed on
similar procurement. Sometimes, you may have
a situation when you know the maximum dollar
amount available to you and you have to basical-
ly estimate how many hours you can potentially
buy. Whatever situation you find yourself in —
always document your decision in writing.
If you have a delivery order under an existing
fixed rate type contract, use the negotiated rates
from the contract for each applicable category.
These are usually loaded rates (i.e., they include
the direct labor, overhead, G&A and profit).
The only additional items to be priced would be
any travel and/or ODCs and applicable G&A
and profit on these additional direct costs.
If the estimate is for a DO or WA under an
existing cost type contract, generally there have
been average rates negotiated for each P and T
level which may be used for pricing. However,
there may be situations where the level of exper-
tise or personnel required is of a significantly
higher or lower level than the average rate. In
these situations the accuracy of the estimate can
be increased by getting the contractor's average
rates for more specific categories instead of the
P & T categories. If you provide more specific
categories or disciplines to the CO, he/she can
request current information from the contractor
or they can request the Cost Analyst to get this
information from the contractor. The COs are
the best sources for information on existing
contracts.
If the work crosses a contractor's fiscal year, it
will be necessary to either use escalation factors
or review the contract files to determine if
different rates have been negotiated for subse-
quent years. In some cases you may want to
use weighted average rates which cover more
than one year. The contract or contractor's best
& final (BAFO) proposal should provide rates
for each contract year.
After the number of hours are estimated,
completing the direct labor estimates includes
multiplying the number of estimated hours by
the labor rates.
The next page contains an example of how a
final direct labor hour estimate may look.
- 12-
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COST TEMPLATE FOR DIRECT LABOR
YEAR 1 YEAR 2 YEAR 3
TOTAL
LABOR
CATEGORY
PROJECT
MANAGER
HYDROLOGIST
CHEMIST
ENVIRONMEN
TAL ENGINEER
SYSTEMS
ANALYST
BIOLOGIST
CHEMIST
COMPUTER
PROGRAMMER
SYSTEMS
ANALYSTS
COMPUTER
PROGRAMMER
ENVIRONMEN-
TAL ENGINEER
COMPUTER
PROGRAMMER
SYSTEMS
ANALYST
LAB
TECHNICIAN
DRAFTSMAN
LAB
TECHNICIAN
TOTAL P/T
CLERICAL
TOTAL LABOR
P/T
LEVEL
P4
P4
P4
P4
P4
P3
P3
P3
P3
P2
P2
PI
PI
T3
T3
T2
HOURS
1800
500
200
500
500
2400
3600
2OOO
1500
9OO
15OO
2000
500
20OO
600
2000
22500
1800
24300
RATE
$55
*45
(40
«40
(35
(30
133
(29
$28
119
(22
«15
• 15
»14
*15
(12
(13
AMOUNT
$ 99,OOO
$ 22,500
$ 8,000
$ 20,000
$ 17,500
* 72,000
til 8,800
$ 58.OOO
$ 42,000
* 17,100
$ 33,000
$ 30,000
« 7,500
$ 28,000
$ 9,000
( 24,000
1606,400
$ 23,400
»628,8OO
HOURS
1800
600
200
500
500
2400
3300
1500
1000
500
800
1300
300
2000
400
2000
19100
1800
20900
RATE
$57.75
$47.25
$42.00
$42.00
$36.75
$31.50
$34.65
$30.45
$29.4O
$19.95
$23.10
$15.75
$15.75
$14. 7O
$15.75
$12.60
$13.65
AMOUNT
$103,950
$ 28.350
I 8,400
« 21,000
$ 18,375
$ 75,600
$114,345
$ 45,675
$ 29,400
$ 9.975
$ 18,480
$ 20,475
$ 4,725
$ 29,400
$ 6,300
$25.200
(559,650
$ 24,570
$584,220
HOURS
1200
400
200
400
400
2400
3000
10OO
800
300
500
900
200
2OOO
300
2000
16000
1800
17800
RATE
$60.84
$49.61
$44.10
$44.10
$38.59
(33.08
$36.38
$31.97
$31.87
$20.95
$24.26
(16.54
$16.54
$15.44
(16.54
$13.23
(14.33
AMOUNT
$ 72,765
$ 19,845
( 8,820
$ 1 7,640
$ 15,435
$ 79,380
$109,148
$ 31,973
$ 24,696
$ 6,284
$ 12,128
( 14,884
( 3,308
$ 30,870
$ 4,981
( 26,460
(478,595
( 25,799
(504,395
HOURS
4800
1500
1400
1400
1400
720O
9900
4500
3300
1700
2800
4200
1000
aooo
1300
6000
57600
AMOUNT
$275,715
( 70,675
( 25,220
$ 58,640
$ 51.310
$228,980
$342,293
$135,648
( 96,096
$ 33,359
$ 63,608
( 65,359
( 15,533
$ 88,270
( 20,261
$ 75,660
(1,644,645
$ 73,769
(1,718,414
(1) Every Work Assignment Manager
(WAM) or Delivery Order Project Officer
(DOPO) should have access to the basic
contract or information on the various rates
in the contract. They are available from
either the Project Officer or Contracting
Officer. CAUTION! These documents
contain Confidential Business Information
and unauthorized release of the information
may bo a criminal offense.
(2) if the requirement is a work assignment
or delivery order under an existing contract,
the authorized labor categories may be
contained in the contract files.
(31 P (Professional) and T (Technical)
factors are based on the education and
experience level of the people that will be
needed for the project. You may have to
go to the Best and Final proposal to get the
negotiated rates. CAUTIONl These
documents contain Confidential Business
Information and unauthorized release of the
information may be a criminal offense.
-13-
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6. Fringe Benefits.
numbers of persons per trip
Many contractors apply a fringe benefits rate to
direct labor dollars in order to recover the cost of
items such as health insurance, social security, etc.
If the cost estimate's for an order under an existing
contract, check the contract to determine if a fringe
benefit rate is contained in the contract. If there is a
fringe benefit rate, compute the fringe benefit costs
by multiplying the rate times the direct labor total.
7. Overhead.
Once the direct labor pricing has been
computed, the estimator applies the applicable over-
head rate(s). Check Section G in the contract for the
appropriate bases and rates. If the contract has been
in effect for any length of time the rates may have
changed. Therefore, any amendments regarding rates
should be reviewed. You may also contact the EPA
Cost Policy and Rate Negotiation Branch at head-
quarters for the latest information on indirect rates
for specific contractors.
If an IGCE is being prepared for a new
procurement, the project officer may consult program
personnel with experience with similiar contracts, the
CPRNB to obtain information on typical contractors
who might bid on the procurement or the contracting
officer for advice on how to estimate the indirect
cost.
For new procurements, the estimator may want
to use an average loaded rate for projected P&T
levels which would include labor, indirects (overhead
and G&A) and profit. This information could be re-
trieved from the historical database for similar work
with adjustments for escalation and any other differ-
ences. If you are pricing an individual work assign-
ment and/or delivery order, you will want to be more
specific and price categories of cost separately.
8. Travel.
Determine if performance of the SOW will
require any travel by the contractor. If yes, the IGCE
should be specific as to :
• The purpose of the travel and the contractor's
role
• number of trips
• the beginning and ending destinations for each
trip and the length of time for each trip
• expected necessity of car rental vs. public
transportation
• estimated per diems
• estimated airfares and/or train fares
• estimated amounts for taxis and other mis-
cellaneous expenses
The narrative should include the purpose of each
trip and any assumptions you have made regarding
travel required to perform the SOW. This will be
used to compare your estimate with the contractors
estimate. Note: Contractors' travel costs must be in
compliance with FAR 31.205-46 which generally
limits travel costs to those authorized for Federal
employees.
9. Other Direct Costs (ODCs).
Determine what ODCs will be required for
contract performance. Examples of ODCs include
the following:
Telephone Supplies Reports
Postage Reproduction Computer
Equipment Messenger Service
The narrative should include all assumptions you used
in pricing these items. Some points to consider for
each of the above are as follows:
Telephone - Based on historical data or personal
experience, estimate the number of long distance
calls per week and the average amount per call.
i.e. 2 calls per week at $5 per call and 52
weeks per year
2 X $5 X 52 = $520 for telephone calls/year
Postage - Consider what types of items are
mailed. Some contracts have a lot of samples
that are mailed or shipped.
e.g. 25 samples per month at $45/sample
25 X $45 = $l,125/month shipping charges
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Equipment - For any special equipment needs
consider specific items. Does the Government
already own such items that can be used for the
contract or project? Would it be more
economical to rent or lease rather than buy?
Include specific quantities and cost for each
equipment item. It is EPA's policy that general-
ly, contractors should provide all resources
necessary to perform agency contracts. This
includes equipment. However, in some situa-
tions it may be necessary to provide
Government furnished equipment or to permit
the contractor to acquire specialized equipment
at Government expense. This is a CO decision
and must be based on a written justification of
need provided by the PO with concurrence at
the Program Office Division Director or
equivalent level. The requirements and regula-
tions pertaining to Government furnished
property are found in Chapter 5 of the Contracts
Management Manual (CMM) and FAR Part 45.
The requirements and regulations pertaining to
lease vs purchase of equipment are found in
FAR Subpart 7.4 - Equipment Lease or
Purchase.
Reports - Review what reports are being re-
ceived on the current contract or similar con-
tracts. How many are being received? What is
being done with them? Can any be cut out or
the number reduced? Are additional reports
required? Could some reports be combined?
Keep in mind that any changes to reports on a
current contract would require CO approval and
modification of the contract. Once the number
of reports and the estimated number of pages
needed per report, has been determined, the cost
estimator can estimate, based on historical data
how much it costs per page and compute the
total estimate,
i.e. if the historical base shows a cost of $3.501-
page and the average report is 50 pages and 3
different reports are required per month.
$3.50X50X3 = $525/monthfor reports
Reproduction - This is usually estimated on a
per page basis. The rates generally range from
$.05 to $.15 per page. You could use an
average of$. 10 and an estimate of pages needed
based on prior history.
$. 10 X 10,000 pages = $100 month for xerox-
ing.
Note: Environmental Protection Agency
Acquisition Regulation (EPAAR) 1552.208.70
Reproduction or copying is permitted up to
5,000 copies of one page not to exceed 25,000
copies in the aggregate of multiple pages per job
or individual requirement.
Messenger Service - This is an area where cost
savings can be realized if monitored closely.
Many times contractors use a messenger service
at $15 or $20 per trip when an item could be
mailed for $3 or $4. If time is not of the es-
sence, items should be mailed instead of using
a messenger. Calling several messenger
services in the area and asking for quotes for
deliveries in given areas will give a good
estimate for the unit cost. Then project the
number of deliveries per month.
e.g. 4 deliveries per month at $15 per delivery
equates to - $15 X 4 = $60/tnonth
Computer Related Costs - This is one of the
more difficult area to estimate, because the
category covers so many facets. It can include
the purchase of personal computers, different
computer usage rates for main frame and
personal computers and other computer related
costs. Are there special computer software
packages that are required for your contract or
project? If so, this cost could be included in
this category. This is an area where assistance
from an experienced professional is extremely
helpful. You may wish to consult with
representatives from the Office of Information
Resources Management at Headquarters.
Miscellaneous ODCs - If this category is includ-
ed you should have specific things in mind to
include. Contractors include such things as
temporary office help, special licenses and some
surprises in this category. You should always
identify what you are including in miscellaneous
costs. There should never be excessive amounts
in this category.
10. General and Administrative (G&A).
- 15-
-------
Once the pricing has been completed for direct
labor, overhead, travel and ODCs, the applicable
G&A rate should be applied. Check Section G in the
contract for the appropriate bases and rates. If the
contract has been in effect for any length of time the
rates may have changed. Therefore, any amendments
to the rates should be reviewed. The EPA Cost
Policy and Rate Negotiation Branch at headquarters
can provide the latest information on indirect rates
for specific contractors.
11. Profit or Fee.
Since an IGCE is an estimate of the total cost to
the Government, it should include profit or fee.
Profit is associated with fixed price contracts and fee
is associated with cost reimbursable type contracts.
If the IGCE is for a contract already in place, the
estimator should review the contract for any special
fee provisions and apply the negotiated fee percentage
to the total estimated costs.
The estimate of the profit/fee for a new procure-
ment is an area where the CO can be particularly
helpful. He/she can either give you a "normal" fee
percentage to use or work with you in preparing an
estimate based on EPA's Weighted Guidelines for
profit/fee. When estimating fee on an award fee
contract, take the conservative approach and include
the maximum fee available.
The time and effort expended and the details
included in the IGCE will vary with the size and
complexity of the project. Generally, the more
details you include in your IGCE, the more useful it
will be. Each program is different. Some items
discussed in detail in this Guide may not pertain to all
programs. For example, some EPA contracts contain
only small dollar amounts for ODCs and other EPA
contracts contain high dollar amounts of ODCs. This
guidance will have to be adapted for the specific
needs of each program. Remember, each program
should know more about its contract needs than
anyone else and is the most qualified to estimate the
cost of the work required.
We have included examples of IGCEs utilizing
information included in this guide. To the extent
possible IGCEs should be estimated on a task or
subtask level. We did not do this in the examples
because it would make the guide to voluminous. The
examples show all the information typed, but this is
not required. Your IGCE may be handwritten.
We have also included blank forms which may
be copied and used to prepare IGCEs. These are not
standarized forms. Your office may already have
existing IGCE forms, if not, the forms included in
this guide may be used. The forms may be used for
new procurements or WAs and DOs on existing
contracts. For WAs and DOs substitute task or
subtask for year. A limited number of forms on 5"
disks are available. Please contact Cost Advisory and
Financial Analysis Division if your office would like
a copy of the disk.
- 16-
-------
APPENDIX A
SAMPLE WORK
BREAKDOWN STRUCTURE
(WBS)
-------
Level 1
Level 2
Levels
APPENDIX A
PAGE 1 OF 2
Garage
1.0
I
Floor/
Foundation
1.1
- Footers
1.1.1
Block
1.15
Concrete
Floor 1.1.3
I
Framing
12
Studs
12.1
Sheathing
~ 1.2.2
_ Siding
12.3
Roof
1.3
Roofing
1.3.1
Shingles
1.32
_ Gutters
1 33
I
Interior
1.4
Insulation
1.4.1
Electrical
1.42
Drywall
1.4.3
Trim&
Molding
1.4.4
I
Painting
1.5
Interior
1.5.1
Exterior
1.52
Grading &
Finishing
1.6
Raking &
Cleaning
1.6.1
Landscaping
1.62
Seeding
1.6.3
Sample Work Breakdown Structure for a Garage
-------
APPENDIX A
PAGE 2 OF 2
GARAGE
DIRECT LABOR EFFORT
TASKS & SUBTASKS
BRICK
LABORERS ELECTRICAN CARPENTERS LAYERS
CONCRETE DRYUALL
FINISHERS INSTALLERS PAINTERS TOTAL
1.1 FLOOR/FOUNDATION
1.1.1 FOOTERS 12 6
1.1.2 BLOCK 10
1.1.3 CONCRETE FLOOR 12 12
1.2 FRAMING
1.2.1 STUDS 24 SO
1.2.2 SHEATHING 16
1.2.3 SIDING 16
1.3 ROOF
1.3.1 ROOFING 16
1.3.2 SHINGLES 16
1.3.3 GUTTERS 6
1.4 INTERIOR
1.4.1 INSULATION 6
1.4.2 ELECTRICAN 16
1.4.3 DRYUALL
1.4.4 TRIM 8
1.5 PAINTING
1.5.1 INTERIOR
1.5.2 EXTERIOR
1.6 GRADING & FINISHING
1.6.1 RAKE & CLEAN 16
1.6.2 LANDSCAPING 7
1.6.3 SEEDING 1
DIRECT LABOR HOURS 78 16 134 10 12
LABOR RATES $15 $30 $25 $30 $20
TOTAL DIRECT LABOR $1,170 $480 $3,350 $300 $240
18
10
24
74
16
16
16
16
6
6
16
32 32
8
5 5
8 8
16
7
1
32 13 295
$20 $20
$640 $260 $6,44i
-------
APPENDIX B
SAMPLE IGCE
COST REIMBURSABLE
CONTRACT
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
SOLICITATION/CONTRACT RFP#009876 - A1
PREPARER J.DOE
DATE _x/xx/ox
TYPE OF ACTION
NEW CONTRACT __X
WORK ASSIGNMENT
DELIVERY ORDER
OTHER
SUMMARY COST ESTIMATE
r COST REIMBURSABLE CONTRACTS
— CATEGORY
1. Direct Labor (WS- 1)
2. Fringe Benefits (WS-2)
3. Total Direct Labor & Fringe Benefits (lines 1 &
X_JL_Jr ^ W *$ if>' t
^Overhead (WS -2)
&&L-$ "'.W*- "^ "-&'- s&' ' '«'- -'
JLIotaL Travel (WS-3)
sUC^Jl • , X ''' ^ .. ,. j? •- -» • ,C
JLl°Jal Other Direct Costs (WS - 4)
JLJL_> '& - ^"- - -^'- ''- ^
7. Sub -Total (lines 3,4, 5 & 6)
£^LV£ " !|^' v-?pr' ^" ' -^ J- o '-" ;"5
A^M (ws-2)
i~J^J^* •' ?&f* ' jj& ^ -I «' >
-ILlotelCosts (lines 7 & 8)
^_^_, ,-'\" "5'st ~ "'x^ "
4£J?L°f it/Fee (WS-5)
£itL^.; '' -;-"" - ";- '*ei& ^ « " ^
JJ. Total Cost and Profit (lines 9 A 10)
YEAR 1
$631, 150
$220,903
$852,053
•: ^
$596,437
i, "•<
$33,630
;
$234,532
! ;
$1,798,079
> f
$158,231
v
$1,956,310
YEAR 3
$493,318
$172,661
$665,979
-
$466, 186
$36,374
r
$193,558
-
$1,362,097
\ ,..
$204,315
$1,566,412
/
$137,844
-
$1,704,256
TOTAL
$1,700,638
$595.224
$2,295,862
$1,607,104
-
$104,979
-
$653,075
$4,661,020
$699, 153
$5,360,173
$471,695
•.
$5,831,868
SAMPLE WORKSHEET
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION/CONTRACT RFP # 009876-A1
PREPARER J. DOE
DATE XX/XX/9X
NEW CONTRACT__X_
WORK ASSIGNMENTS
DELIVERY ORDER
OTHER
DIRECT LABOR ESTIMATE WORKSHEET
COST REIMBURSABLE CONTRACTS
Labor Category
PROJECT MANAGER
HYDROLOGIST
CHEMIST
ENVIRONMENTAL ENGINEER
SYSTEMS ANALYST
BIOLOGIST
CHEMIST
COMPUTER PROGRAMMER
SYSTEMS ANALYST
COMPUTER PROGRAMMER
ENVIRONMENTAL ENGINEER
COMPUTER PROGRAMMER
SYSTEMS ANALYST
LAB TECHNICAN
DRAFTSMAN
LAB TECHNICAN
TOTAL LOE HOURS
CLERICAL
TOTAL LABOR HOURS
LABOR CATEGORIES:
PAT Level
P4
P4
P4
P4
P4
P3
P3
P3
P3
P2
P2
P1
P1
T3
T3
T2
wm
YEAR 1
Hours
1,800
500
200
500
500
2,400
3,600
2,000
1,500
900
1,500
2,000
500
2,000
600
2,000
22,500
2.250
24.750
NOTES,
Rate
#55
$45
$40
$40
$35
$30
$33
$29
$28
$19
$22
$15
$15
$14
$15
$12
$11
Amount
$99,000
$22,500
$8,000
$20,000
$17,500
$72,000
$118,800
$58,000
$42,000
$17, 100
$33,000
$30,000
$7,500
$28,000
$9,000
$24,000
$606,400
$24. 750
$631,150
YEAR 2
Hours
1,800
600
200
500
500
2,400
3,300
1,500
1,000
500
800
1,300
300
2,000
400
2.000
19, 100
1.910
21.010
Rate
$57.20
$46.80
$41.60
$41.60
$36.40
$31.20
$34.32
$30.16
$29.12
$19.76
$22.88
$15.60
$15.60
$14.56
$15.60
$12.48
$11.44
Amount
$102,960
$28,080
$8,320
$20,800
$18.200
$74,880
$113,256
$45,240
$29, 120
$9,880
$18,304
$20,280
$4,680
$29. 120
$6,240
$24,960
$554,320
$21.850
$576.170
YEARS
Hours
1,200
400
200
400
400
2,400
3,000
1.000
800
300
500
900
200
2.000
300
2,000
16,000
2,000
18.000
Rate
$59.49
$48.67
$43.26
$43.26
$37.86
$32.45
$35.69
$31.37
$30.28
$20.55
$23.80
$16.22
$16.22
$15.14
$16.22
$12.98
$11.90
Amount
$71,386
$19,469
$8,653
$17,306
$15, 142
$77,875
$107,078
$31.366
$24,228
$6,165
$11,898
$14,602
$3,245
$30,285
$4,867
$25,958
$469,523
$23,795
$493,318
TOTAL
Hours
4,800
7,500
600
/,400
1,400
7,200
9,900
4,500
3,300
1,700
2,800
4.200
1.000
6,000
1,300
6,000
57,600
6, 160
63, 760
Amount
$273,346
$70,049
$24.973
$58, 106
$50,842
$224,755
$339, 134
$134.606
$95,348
$33,145
$63,202
$64,882
$15,425
$87,405
$20. 107
$74,918
$1,630,243
$70,396
$1.700,638
ASSUMPTIONS AND COMPUTATIONS
The work to be performed under this contract is sitniliar to work performed under contract 68 -0 1 -0000. We have added more hours for computer programmers
and a systems analyst category to this contract because of the increased need to develop in-house software to analyze the extensive and specialized
data expected to be collected under this contract. We also added a P4 Hydrologist based on specific problems encountered on a task in Region III that
is excpected to continue under this contract. Selection of all the other labor categories are based on prior experience on contract 68 -01 -0000.
This contract will provide support to Regions 1, II. III. IV and V. We had various telephone conferences with each Region (POs. section chiefs, and branch chiefs)
to get their views on the need for other labor categories or if their needs were being met with the current categories. Based on these discussions, we added
hours fora P3 computer programmer and the systems analyst category at the PA. P3 and P1 levels. We also talked with technical personnel in the
Applications Software Branch at OIRM for input on the skill level and educational requirements for the systems analyst hours.
'Notes pertaining to the various telephone conversations are contained in the program 's back-up file for this IGCE.
(Use additional pages if necessary)
SAMPLE WORKSHEET
\VS-l
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP # 009876-A1 NEW CONTRACT X
PREPARER J. DOE WORK ASSIGNMENT J
DATE _ xx/xx/sx DELIVERY ORDER
OTHER
DIRECT LABOR ESTIMATE WORKSHEET
COST REIMBURSABLE CONTRACTS
LABOR HOURS:
For the labor hours, we reviewed the current usage by Region and also had each Region submit their
expected needs for the next 3 years under this contract. The Regions were able to break the effort down
into tasks and in some cases to subtasks. This allowed us to determine (we think more accurately)
the specific labor categories, skill levels and hours required to perform the work. We analyzed this data
and used it as the basis for the hours for this contract. In the current contract, Projet Manager is 1,800 hrs.
This should provide sufficient coverage to manage the effort, so no change was made, except to reduce
# in year three due to total hours being reduced. This reduction for year three was agreed to be all Regions.
The hours for the P4 Hydrologist are based on the expected needs for the Region III problem plus some
extra hours in case this specific problem occurs in any other Region. We expect a heavy workload in
programming and systems analysis during the first year and decreasing workloads in this area in years two
and three. This is reflected in the number of hours we have included for computer programmers and system
analysts for the entire three year period. We have a total of 7,400 hours in this area for year one and this
decreases to 3,600 in year three. All other categories reflect for the most part what is being used on the
current contract and the projected needs for each Region.
*AII corresoondence from the Regions and notes pertaining to anv teleohone conversation are contained
in the programs back-up fife for this IGCE.
LABOR RATES: ______^
The current contract is a cost reimbursable contract and the labor is shown as a lump sum with no breakdown
of cost per category on the invoices. We went back to the Contracting Officer and got a copy of the
Best and Final for the current contract to get an idea of what the rates by category should be
and added 5% escalation to the current rates. For computer programmers and the system analysts,
we asked our C. O. to find out what EPA is paying for these labor categories on the agency's ADP contracts.
We got input from the Corps of Engineers on what they are currently being charged for a highly experienced
hydrologists. We then called the Cost Advisory Branch at headquarters and compared our projected rates
with rates currently being sumitted for review. We also received their input on the escalation for years two
and three. They advised, based on current economic conditions, an escalation factor of between 3%
and 5% be used for pricing the outyears. We used an average of 4 % for years two and three. We included
direct clerical hours in our cost estimate. Clerical hours are generally not part of the LOE hours in EPA
contracts. Contractors are told in the RFP to add their best estimate for clerical hours if it is their accounting
policy to direct charge clerical hours which can be specifically identified to a contract. It is our experience that
most contractors direct charge clerical hours if they can specifically identify them to a contract. Based on
experience on prior similar contracts, we have added a factor for direct clerical hours equivalent to 10% of
the LOE hours for year one and two. For year three, we added a. factor for direct clerical hours equal to 12.5 %
me L.VC nours rur yeai uiic aiiu t wu. rui y&ai »// cc, we auu&u q mcior tor aireci clerical riuurs equal
of the LOE hours. These additional hours in year three are for the increase in reports to be delivered
at (Ho onrt nf tho i-'/in/ra/'?/
at the end of the contract.
*Notes certain/no: to all telephone conversations with OIRM. Cost Advisorv Branch and the Corns of Enaineers
and worksheets computing our estimated rates are contained in theoroaram's back-uo file for the IGCE.
SAMPLE WORKSHEET
(WS - 1) Continuation Page
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION
PREPARER __J. DOE
DATE XX/XX/9X
RFP # 009876 - A1
NEW CONTRACT X
WORK ASSIGNMENT"
DELIVERY ORDER __
OTHER
INDIRECT COST RATES WORKSHEET
Estimating rates for computing indirect costs is different because the rates depend on how a contractor
accounts for his costs and on what basis the indirect costs are allocated. For estimating purposes,
we assumed the following:
/. A Fringe benefit rate of 35% with total labor as the base. The current contract has a fringe
benefit rate of 29%. However several other in-house contracts have fringe benefit rates ranging
from 31% to 38%. We spoke with a representative of the Cost Policy and Rate Negotiation Branch
and found social security expenses are increasing beginning January of next year. We made
a roundtable judgement decision to use 35% for an estimated fringe benefit rate.
2. The Overhead rate tor the current contract has fluctuated over the three year period
of performance from 60% to 80%. Other contracts within our program office have overhead rates
ranging from 50% to 120%. We made a roundtable judgemental decision to use the average rate
from the current contract. The basis of allocation is total direct labor and fringe benefits.
3. G&A on the current contract has been in the 13% to 15% range for 3 years. Other
contracts in our program office have G&A rates ranging from 5% to 45%. We made a
judgemental decision to use for estimating purposes the 15% from the current contract for the
current year with an allocation base of total cost exclusive of G&A expenses.
These are our best estimates and material differences in rates could be proposed by contractors based on their
accounting systems. ~~~~"
For Estimating purposes, use the following:
Application Base for this contract^
Fringe Benefits
35%
Direct Labor
Overhead
70%
Direct labor and fringe
Total estimated costs exclusive of G&A expenses
G&A
15%
(General and Administrative)
SAMPLE WORKSHEET
(WS-2)
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION
PREPARER_J. DOE
DATE XX/XX/9X
RFP # 009876 - A1
NEW CONTRACT_X
WORK ASSIGNMENT"
DELIVERY ORDERS _
OTHER
WORKSHEET FOR TRAVEL COSTS
TRAVEL
YEAR1
YEAR 2
YEARS
TOTAL
Airfare
$13,050
$13,572
$14,115
$40, 737
Per Diem
$16,080
$16,723
$17,392
$50, 195
Car Rental
Mileage
Ground Transportation
$4,500
$4,680
$4,867
$14,047
Other (explain)
TOTALTRAVEL
$33,630
$34,975
$36,374,
$104,979
NOTES, ASSUMPTIONSAND COMPUTATIONS
Based on prior experience on similar requirements.theroundtable discussions of Dec. 2, 1992,
with all branch chiefs and on the specific travel requirementsfor travel on pages of the
Statement of Work, the following assumptions were used for estimating travel amounts:
1. 15 Roundtrips per year from various locations around the country to Washington, DC.
These trips will be for information gathering purposes and for working meetings with
EPA personnel. For estimating purposes, Seattle, Chicago, Dallas, Atlanta and Boston
are the origination cities and we have priced three trips from each city.
2. Some trips will require two or more persons and some will require only one. For estimating
~-* . . vmAnnn IBIS-* \n*^\tr\ i if*r*f4 •f\»f*rTv r^ A r* O/"m o r-»f\f +r-It-^ r^t-ij-l Ann Li .L-!_^. 1_ _ _ -* ^J. ,~n±l~.—. nj X« . . .• rJ«. .m
purposes we have used two persons per trip and each trip has a duration of four days.
3. The destinations for all trips are Washington, DC. Public transportation is available;
•I.L. « _• A£n »> A -iL-tncsi *-»l—ij"n 11 r-l l-vrt t~\f\ ***r\r\/~4 -fr^tr /-*•-*•• ^/-* •-••+« 1 *-»
therefore, there should be no need for car rentals.
Roundtrips to Washington, DC from:
$525 x 3 trips x 2 persons/trip =~
Atlanta
$250 x 3 trips x 2 persons/trip =
$3,150
Boston
1,500
Chicago
$350 x 3 trips x 2 persons/trip =
2,100
Dallas
$525 x 3 trips x 2 persons/trip =
3,150
Seattle
$525 x 3 trips x 2 persons/trip =
3,150
TOTAL
$13,050
4. Estimated per diems are for Washington, DC at the current government rate of $134.
15 trips x 4 days/trip x 2 person/trip x $134 =
$16,080
(Use additional pages if necessary)
SAMPLE WORKSHEET
WS-3
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP #009876-A1 NEW CONTRACT __X__
PREPARER __J. DOE WORK ASSIGNMENT
DATE XX/XX/9X DELIVERY ORDERS
OTHER
IGCE CONTINUATION WORKSHEET- TRAVEL
5. For estimating purposes we are including $150 per traveler per trip lor ground
transportation, mileage of personal vehicle to airport and parking at airport.
Hotels are available close to EPA Headquarters so that taxi fares, if used, will
minimal and Metro can be used.
15 trips x 2 persons/trip x $150 = $4,500
6. For estimating purposes, we have added escalation of 4% per year for years 2 and 3 based on discussions
with the Washington Cost Advisory Branch.
Contiunation page (WS-3)
SAMPLE WORKSHEET
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION
PREPARER
_ RFP # 009876 - A1
J. DOE
DATE XX/XX/9X
NEW CONTRACT _X
WORK ASSIGNMENT"
DELIVERY ORDER
OTHER
OTHER DIRECT COST ESTIMATE
OTHER DIRECT COSTS
YEAR 1
YEAR 2
YEAR 3
TOTAL
COURIER/MESSENGER
$936
$973
$1,012
$2,922
COMPUTER RELATED COSTS
$174,600
$124,459
$108,484
$407,543
MATERIAL/SUPPLIES
$41,000
$42,640
$44,346
$127,986
POSTAGE/FEDERAL EXPRESS
$5,460
$5,678
$5,906
$17,044
REPORTS
$18,360
$19,094
$19,858
$57,313
REPRODUCTION
$1,200
$1,248
$1,298
$3,746
TELEPHONE
$11,700
$12,168
$12,655
$36,523
TOTAL ODCs
$253,256
$206,261
$193,558
$653,076
NOTES, ASSUMPTIONSAND COMPUTATIONS
COURIER/MESSENGER
Call to three local couriers disclosed the following:
Quoted prices for courier service between EPA office and contractor's local office;
Courier Co. A - $15
Courier Co. B - $18
Courier Co. C - $20
Average
-$17.67 (rounded to $18)
On prior contracts the contractor has used courier service for almost every item whether it
was a priority or not. Most of the time the items could be sent by regular mail or carried by
rr*>4«^ i* f~fi i\-ri IIJT *si I I i*Sl, IVIlS&l \SI I/ It? UIIISs t//C7 f(C7/f/O kxl/L'/U M\s \J\*I *» *^J ' ^^*-*"-«' '** .. '
personnel from the contractor coming in for meetings with the project officer or the
Contracting Officer. Our data base shows on prior contracts courier deliveries averaging
three times a week. We encourage the contractor to use the regular mail to the extent
possible. There should be no need for courier service more than once a week.
Therefore, for each year of the contract, our estimate for courier service is computed
as follows:
52 weeks x 1 delivery/week x $18/delivery =
$936
Year two with escalation of4%
Year three with escalation of 4%
(Use additional pages if necessary)
WS-4
SAMPLE WORKSHEET
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION
PREPARER_J.DOE
DATE XX/XX/9X
RFP # 009876 - A1
N EW CONTRACT X
WORK ASSIGNMENT"
DELIVERY ORDERS _'_
OTHER
IGCE CONTINUATION WORKSHEET- OTHER DIRECT COSTS
COMPUTER RELATED COSTS
The estimated computer related cost is based on historical usage and on current projected
increases for programming and systems analysis for year one plus adjustments for escalation
of 4% per year. An analysis of historical data (three years of data on the current contract)
disclosed an average usage of one hour of computer time for every five hours of direct
labor incurred. This does not mean there is a direct relationship between direct labor
incurred and computer usage. However, for estimating purposes, it provides a standard
measurement for projecting hours of usage. Most of the computer related costs ha ve been
and are expected to continue to be for personal computer (PC) and mainframe usage, usually
charged at an hourly rate. On the current contract, the usage has been evenly & equitably distributed
between personal computer (PCs) and mainframe usage. There will also be specific software
programs required in order to be compatible with the EPA program software. For estimating
purposes, we are dividing the hours equally between personal computer (PC) and mainframe
usage. For estimating purposes we are using one hour of computer usage for every
five hours ofLOEplus an additional 1,000 hours for year one for the increased programming
and systems analysis projected for year one. We have estimated the purchase of ten
software programs for year one and included $500 each year for years two and three
for software updates. The hourly rates are based on the current contract with a 4%
escalation factor each year including year one because by the time this contract is awarded,
the current rates will be over a year old. We estimated an average of $300/software
program based on current market rates for year one. Our computations are as follows;
PC
MAINFRAME
Computer Rates
$10.00/hr.
$50.00/hr.
add escalation of 4%
x1.04
x 1.04
Year One Rates
$10.40
$52.00
add escalation of 4%
x1.04
x 1.04
Year Two Rates
$10.82
$54.08
add escalation of 4%
xl.04
x 1.04
Year Two Rates
$11.25
$56.24
SAMPLE WORKSHEET
Continuation page
(WS-4)
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP # 009876 - A1 NEW CONTRACT _X_
PREPARER_J. DOE WORK ASSIGNMENT
DATE _XX/XX/9X DELIVERY ORDERS _
OTHER
IGCE CONTINUATION WORKSHEET- OTHER DIRECT COSTS
COMPUTER RELATED COSTS - continued
Year One
22,500/LOE/5= 4,500 Based on historical data
1,000 Hours based on additional needs
5,500 Total hours
2,750 personal computer (PC) hours
2,750 mainframe hours
2,750 hrs.x$10.40/hr. for PC usage = $28,600
2.750 hrs. x $52.00/hr. for mainframe usage = $143,000
Software purchases
10 programs @ $300/program = $3, OOP
Total Year One Estimate $174.600
Year Two
19,100/LOE/5= 3,820 Based on historical data
1,910 personal computer (PC) hours
1,910 mainframe hours
1,910 hrs. x $10.82/hr. for PC usage = $20,666
1,910hrs. x $54.08/hr. lor mainframe usage = $103,293
Software updates $500
Total Year Two Estimate $124.459
Year Three
16,000/LOE/5= 3,200 Based on historical data
1,600 personal computer (PC) hours
1,600 mainframe hours
1,910 hrs. x $10.82/hr. for PC usage = $18,000
1,91 Ohrs. x $54.08/hr. for mainframe usage = $89,984
Software updates $500
Total Year Three Estimates $108.484
TOTAL COMPUTER RELATED COSTS
Year One $174.600
Year Two $124.459
Year Three $108.484
TOTAL $407,543
Continuation page (WS-4)
SAMPLE WORKSHEET
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INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP # 009876 - A1 NEW CONTRACT _X
PREPARER _J. DOE WORK ASSIGNMENT"
DATE _XX/XX/9X DELIVERY ORDERS _
OTHER
IGCE CONTINUATION WORKSHEET- OTHER DIRECT COSTS
MA TERIAL/SUPPLIES
Based on prior similar contracts, there are some specific supplies needed to perform the contract
Examples are specific reference books, expendable lab supplies and office supplies.
We are basing our estimate on prior utilization of material and supplies with an additional increment
lor more lab supplies since the scope of work on this procurement includes an increased
requirement for lab work. The amount incurred for the last five years has been fairly consistent
with differences due to increased cost rather than increased quantities. Therefore, we are using
the data for the most current year and adding escalation and an increment for increased lab supplies.
Current year cost $25,000
escalation at 4% $1,000
Lab increment $15.000
TOTAL - Year One $41.000
Escaltion: Year Two- 4% $42.640
Escaltion: Year Three - 4% $44.346
TOTAL $127.986
POSTAGE/FEDERAL EXPRESS
Postage used for mailing letters and small packages has been running approximately $30/month
on current contracts. There is no projected increase to postage. Federal Express or other
overnight delivery makes up the bulk of the costs for this category of ODCs. The current rate
on the open market ranges from $13 to $21 per package. We have been experiencing aroun 20
overnight deliveries per month on the current contract. We reviewed the need for such overnight
r\as*Is**nAt* ^v*f4 msi&l- r\f #Mdrt«i Ai4i/n A/^AM frtr r4s\r*t imanto fh&f r&nt lirGfi /m moyV/ate n-Hfin+i^n
packages and most of them have been for documents that required immediate attention.
Therefore, we don't see any decrease in the numbers. In fact, due to the increase in lab work,
the number will increase. For estimating purposes we are projecting 25 packages/month at an average rate
of$17/pkg.
Year one costs: postage - 12 months x $30 = $360
Overnightpkgs. - 12mo. x $17x25 pkg/mc $5,100
YEAH One estimate $5.460
YEAH Two estimate: escalation at 4%
5,678
YEAR Three estimate: escalation at 4% $5^906
TOTAL $17.044
We did not include any escalation for year one costs because we used an average of current rates
and most of the packages wfH be small and in the $14 - $15 range. We think postage costs can and will
remain stable during year one at approximately $30/month.
Continuation page (WS-4)
SAMPLE WORKSHEET
10
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INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION
PREPARER __J. SMITH
DATE XX/XX/9X
RFP # W001234-D1
NEW CONTRACT __X
WORK ASSIGNMENT
DELIVERY ORDERS _
OTHER
IGCE CONTINUATION WORKSHEET- OTHER DIRECT COSTS
REPORTS
_ Monthly reports and annual reports are requirements for this contract. Our past experience has
indicated an estimate of so much per page provides the best indication of cost. This per page
unit cost includes special bindings and covers, word processing costs and copying the reports.
The total number of reports required by the Statement of Work per month is ten including all copies
At the end of each year an additional ten reports, including copies are required. Reports on similar
contracts averaged 50 pages per report at $4.50 per page. These reports have been sufficient
to meet our needs. On this contract we anticipate an increase in the number of pages due to
additional areas which have to be addressed as required by the SOW. These reports are extremely
important and we want to be sure there are sufficient dollars in the contract to cover the cost.
Therefore, we have increased our estimated cost per page to $5 to account for increases due to
inflation and for any unexcpected reports we may require.
Year 1 Estimated Costs:
10 reports/month x 50 pages x 12 =
10 additional reports x 50 pages =
6, OOP pages
500 pages
Total pages
Year 2 Estimated Costs: with escalation @ 4%
6,500 pages x $5.00
$32,500
Year 3 Estimated Costs: with escalation @ 4%
$33,800
$35,152
REPRODUCTION
For IGCE estimating purposes we have used $. 10 per page and have estimated 1,000 pages
per month, This is based on the current prices we are paying and prices on the open market,
Our computed amount is as follows:
1,OOP pages x$. 10 = $100 month
Year 1: 12 months x $ 100
Year 2: with escalation @ 4%
$1,200
$1,248
Year 3: with escalation @ 4%
TOTAL
$1,298
$3.746
SAMPLE WORKSHEET
Continuation page (WS-4)
11
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INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP # 009876 - A1 NEW CONTRACT X
PREPARER __J. DOE WORK ASSIGNMENT"
DATE _XX/XX/9X DELIVERY ORDERS _
OTHER
IGCE CONTINUATION WORKSHEET- OTHER DIRECT COSTS
TELEPHONE
For IGCE estimating purposes we are basing our estimate on the number of long distance phone calls
required to perform the contract at an acceptable level. Based on experience we have found
the more verbal communications there are between the program and the contractor, the fess mistakes
we have. On the current contract we are averaging two long distance call a day with an average duration
of 20 minutes each. With the increased requirements on this procurement we expect phone calls to
increase to three calls a day of 30 minutes duration. We have experienced an average of $.50
per minute on the current contract. The phone company indicated they did not expect to increase
the rates for at least a year. Therefore, our computed amounts for telephone are as follows:
(52x5 = 260) 260 day/yr. x 3calls x 30 minutes/call = 23,600minutes/year
Year 1: 23,400 minutes x $.50/min. = $11.700
Year 2: escalation @ 4% $12.168
Year 3: escalation @ 4% $12^655
TOTAL $36.523
MISCELLANEOUS
We have not included any amount for miscellaneous. We believe we have covered the necessary costs.
There are no specific items that we can think of that would be included here. If a contractor proposes
an amount for this element oi cost, we will review it and make a determination of its necessity to
this contract.
Continuation page (WS-4)
SAMPLE WORKSHEET
12
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INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP #009876 - A1 NEW CONTRACT _X_
PREPARER J. DOE WORK ASSIGNMENT
DATE _XX/XX/9X DELIVERY ORDER \
OTHER
PROFIT/FEE WORKSHEET
We requested assistance from the Contracting Officer for estimating profit/fee. She recommended using
the EPA weighted guidelines method for determining our estimated fee. We met with the Contracting Officer
and provided input on the importance and necessity of each element of cost and she prepared a weighted
guideline analysis for the fee. The weighted guidelines method disclosed a fee of 8.8%. We think
*
that is a fair and acceptable fee percentage. We have included the computations and assumptions
with the Independent Government Cost Estimate.
Since thisis a LOE contract, direct labor is the most important factor for desired performance.
The weighted guidelines allows from 8% to 15% to be applied to direct labor. We assigned 15% to
P4 labor because the expertise and level of competence required at this level is the highest for all the
labor. 14% was assigned to the P3 labor. The required expertise is not as high as P4 but the effort to be
expended by the P3 labor represents 43% of the total effort. The effort for P2, Pi, technical and clerical
effort is of lesser importance and the expertise required is at a lower level than the P4 and P3.
We assigned a 10% factor to P2 and P1 labor and an 8% factor to the technical and clerical labor.
After applying the percentages to the appropriate labor dollars, we computed the weighted percentages
of 12,96% for direct labor. For fee estimating purposes, we included the fringe benefit dollars with direct
labor dollars.
TRAVEL AND ODC: We combined travel and other direct costs (ODCs) for fee computation purposes.
The weighted guidelines allows a fee range for travel and ODCs of1%to 3%. Since G&A is also
applied to travel and ODCs, we felt 1% was a reasonable fee factor.
INDIRECT COST RATES -OVERHEAD AND G&A: The weighted guidelines allow a range of 6% to 8%
for overhead and 5% to 8% for G&A. There is nothing out of the ordinary for indirects on this
procurement. We used the average percentage of 7.5% for overhead and 6.5% for G&A.
(WS-5)
SAMPLE WORKSHEET
13
-------
PROFIT/FEE OBJECTIVE
WEIGHTED GUIDELINES
1. CONTRACTOR: IGCE
2. RFP/CONTRACT NO. 009876-A1
3.
COST INPUT TO TOTAL PERFORMANCE
COST
CATEGORY
DIRECT
MATERIALS
PURCHASES
SUBCONTRACTS
EQUIPMENT
ENGINEERING
MANUFACTURING
DIRECT LABOR
OVERHEAD
DIRECT LABOR
OVERHEAD
CONSULTANTS
OTHER DIRECT COSTS
GENERAL & ADMINISTRATIVE
TOTAL
GOV'T COST
OBJECTIVE
(a)
22,295,862
$1,607,104
$758,054
$699,153
$5,360,173
WEIGHT
RANGES
(b)
1% TO 4%
1% TO 5%
1% TO 2%
8% TO 15%
6% TO 9%
5% TO 9%
4% TO 7%
2% TO 5%
1% TO 3%
5% TO 8%
XXXXXXXXXX
ASSIGNED
WEIGHT
-------
APPENDIX C
SAMPLE IGCE
FIXED RATE INDEFINITE
QUANTITY CONTRACT
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
SOLICITATION RFP # W001234-D1
PREPARER _J. SMITH
DATE XX/XX/9X
TYPE OF ACTION
NEW CONTRACT _X_
WORK ASSIGNMENT .
DELIVERY ORDER
OTHER
SUMMARY COST ESTIMATE
FIXED RATE/INDEFINITE QUANTITY CONTRACTS
CATEGORY
/. Direct labor (WS - 1,2& 5)
- P'ltM;^ "-' -v*': ?3f V:^»T-?^;Vll^."Si^!
2. Total Travel fWS-3)
n : '<&' ^'W ^^^S^i^^^?:"^r..*f M*..^^!?
3. Total Other Direct Costs (WS-4)
w\w'$&&'*»isa:> "•»..<...*&<'?&. * :i£.r..!s£!
4. G&A on travel and ODCs (if applicable) (WS - 2)
5 Total Coste (lines 1.2.3 & 4)
YEAR 1
$1,771,670
•$* "- ,;fe
$11,342
*3£*.\ *^
$91,930
^xr'"''*'-'"®^
** .«&.
$10,327
•rlf^^;;^
$1,885.269
YEAR 2
$1,842,537
r§.
$11,795
'' 'W^1 "S3S1
^Vlgjv; l^j
$90,327
-"'-\3$' * ^ii
$10,212
$1,954,871
YEAR 3
$1,916,238
s ** ^sv ' "&
* ^« ^Sf 's;;.
$12,268
•. v. '•^S- '
%.»
$93,861
. ' ''9^
$10,613
^ v "^
$2,032,980
TOTAL
$5,530,445
"f
$35,405
^. . .
£276, 1 18
.-..
$31,152
f
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION
PREPARER
DATE XX/XX/9X
_RFP t W001234-D1
J. SMITH
NEW CONTRACT _X_
WORK ASSIGNMENT
DEUVERY ORDER
OTHER
DIRECT LABOR ESTIMATE WORKSHEET
SCHEDULE OF LOADED RXED RATES
Labor Category
P-4
Program Manager
Site Manager/Leve III
Sr. Computer Socialist
Sr. LANS Specialist
Sr. Systems Analyst
TOTAL
P-3
Asst. Program Manager
Site Manager/Level II
Minicomputer specialist
Microcomputer specialist
Programme r/A nalys t
TOTAL
P-2
Site Manager/Level 1
Technical Writer
Sr. Data Control Clerk
TOTAL
T-1
Data Input Technician
Jr. Equipment Techniciat
Jr. Computer Operator
TOTAL
TOTAL LOE
Clerical
TOTAL DIRECT LABOR
Unloaded
Hourly Rate
$55.00
$45.00
$31.00
$33.00
$37.00
$35.00
$29.00
$28.00
$28.00
$25.00
$25.00
$23.00
$18.00
$8.00
$9.50
$7.50
$11.00
Fringe @
30.00%
$16.50
$13.50
$9.30
$9.90
$11.10
$10.50
$8.70
$8.40
$8.40
$7.50
$7.50
$6.90
$5.40
$2.40
$2.85
$225
$3.30
Overhead @
100.00%
$71.50
$58.50
$40.30
$42.90
$48. 10
$45.50
$37.70
$36.40
$36.40
$32.50
$32.50
$29.90
$23.40
$10.40
$12.35
$9.75
$14.30
Subtotal
$143.00
$117.00
$80.60
$85.80
$96.20
$91.00
$75.40
$72.80
$72.80
$65.00
$65.00
$59.80
$46.80
$20.80
$24.70
$19.50
$28.60
G&A @
10.00%
$14.30
$11.70
$8.06
$8.58
$9.62
$9.10
$7.54
$7.28
$728
$6.50
$6.50
$5.98
$4.68
$2.08
$2.47
$1.95
$2.86
Total
Costs
$157.30
$128.70
$88.66
$94.38
$105.82
$100.10
$82.94
$80.08
$80.08
$71.50
$71.50
$65.78
$51.48
$22.88
$27.17
$21.45
$31.46
Profit @
10.00%
$15.73
$12.87
$8.87
$9.44
$10.58
$10.01
$829
$8.01
$8.01
$7.15
$7.15
$6.58
$5.15
$229
$2.72
$2.15
$3.15
Loaded
Hourly Rate
$173.03
$141.57
$97.53
$103.82
$116.40
$110.11
$91.23
$88.O9
$88.09
$78.65
$78.65
$72.36
$56.63
$25.17
$29.89
$23.60
$34.61
Estimated
Hours/year
1,200
1,000
900
900
800
4,800
1,000
1,000
2,500
1,000
1,700
7,200
800
2,500
1,200
4,500
2,200
1,500
1,000
4,700
21200
2,000
23200
CONTRACT COSTS
YeaM
$207,636
$141,570
$87,773
$93,436
$93,122
$623,537
$110,110
$91,234
$220,220
$88,088
$133,705
$643,357
$62,920
$180,895
$67,954
$311,769
$55,370
$44,831
$23,595
$123,795
$1,702,458
$69,212
$1,771,670
Year 2
$215,941
$147,233
$91,284
$97, 174
$96.846
$648,479
$114,514
$94,883
$229,029
$91,612
$139,053
$669,091
$65,437
$188,131
$70,672
$324,239
$57,584
$46,624
$24.539
$128,747
$1,770,556
$71,980
$1,842,537
Year3
$224,579
$153,122
$94.936
$101,061
$100,720
$674,416
$119,095
$98,679
$238,190
$95,276
$144,615
$695,855
$68,054
$195,656
$73,499
$337,209
$59,888
$48,489
$25,520
$133,897
$1,841,378
$74,860
$1,916,238
TOTAL
$648, 157
$441,925
$273,993
$291,670
$290,688
$1,946,434
$343,719
$284,796
$687,439
$274.976
$417.374
$2,008,303
$196,411
$564,682
$212,124
$973,217
$172,842
$139,943
$73,654
$386,439
$5,314,393
$216,052
$5,530,445
NOTES, ASSUMPTIONS AND COMPUTATIONS
LABOR CATEGORIES:
The work to be performed under this contract is almost identical to the work performed under contract 68-01 -2222. We have added the categories and hours for a P4 Sr. LANS
Specialist and a P2 Technical Writer. All other categories are the same as the categories under contract 68-01 -2222. The Sr. LANS Specialist was added to provide support for the
various LANS systems used and needed by the program. The P2 Technical Writer was added to assist the program in writing clearer specifications on specific delivery orders.
(Use additional pages if necessary)
WS-1
SAMPLE WORKSHEET
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP # W001234-D1 NEW CONTRACT _X
PREPARER J. SMITH WORK ASSIGNMENT
DATE XX/XX/9X DELIVERY ORDER __
CATEGORY_FIXED LOADED HOURLY RATES OTHER
DIRECT LABOR ESTIMATE WORKSHEET
LABOR HOURS:
For the labor hours, we reviewed the current usage on contract 68-01-2222 and determined the current hours
were sufficient for the program needs. At this point in time, there is no projected increase in our workload except
for the work to be performed by the Sr. LANS Specialist and the Technical Writer. We provided a questionnaire
to the Branch Chief and project officers which utilize this contract and received their input on the number
of hours needed for the Sr. LANS Specilaist and the Technical Writer and their input on current usage on the
other labor categories. They identified the work these categories will perform into specific subtasks
needed for the next three years under this contract. We reviewed their estimates, including their assumptions
and used their recommended hours for each category.
We added clerical labor to our estimate. The RFP did not include a specific cartegory of hours for clerical.
The contractor's were instructed to add loaded clerical hours to the RFP hours if it is their accounting
policy to direct charge clerical labor when it can be specifically identified to a contract. Based on prior
experience on contract 68-01 -2222, we included 2000 hours for direct clerical labor in our estimate.
*AII correspondence from the Branch Chief and project officers and notes pertainina to any telephone
conversations are contained in the program's back-up file for this IGCE.
LABOR RATES:
The current contract is a fixed rate/indefinite quantity contract and the labor is shown as a fixed rate for
each labor category for each year. This fixed rate includes labor, indirects and profit and is called a loaded rate.
In order to compute our estimate for loaded rates, we utilized published average survey rates for the computer
industry for the Washington area (most work will be performed there) for the labor categories in this
procurement. We added percentages for fringe benefits, overhead, G&A and fee.
We worked with the Contracting Officer and the Cost Policy and Rate Negotiation Branch to get
some ranges for the indirect rates. We realize each company is different and their rates depend on their
specific accounting system. The indirect rates used for estimating purposes are average rates from the
ranges provided. We included a 10% fee factor for each category for estimating purposes. We used this
percentage to ensure we did not under estimate costs. After we completed our computations, we compared our
estimated rates to the rates in the current contract. We found some rates were higher and some lower,
but overall were reasonable. We then added escalation of 3% for year one, 4 % for years two and three. Our
estimated escalation factors were included after discussions with the Washington Cost Advisory Branch.
*AII workpaoers showing the various computations and comparisons we performed and all notes pertainina
to all telephone conversations with the Contracting Officer. Cost Policy and Rate Neaotiation and
Washinaton Cost Advisory Branches are contained in the program's back-up file for this IGCE.
(WS - 1) Continuation Page
SAMPLE WORKSHEET
3
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP #W001234-D1 NEW CONTRACT _X
PREPARER J. SMITH WORK ASSIGNMENT"
DATE _XX/XX/9X DELIVERY ORDER
CATEGORY FIXED LOADED HOURLY RATES OTHER
INDIRECT COST RATES WORKSHEET
We talked with the Contracting Officer and the Rate Negotiation Branch at headquarters and got some current
rates for companies likely to bid on this contract (i.e. capable of performing the work). We performed a
straight average of the rates provided. Once we have computed loaded rates for each labor category, we will
compare them to the current contract rates and make any adjustments we feel are necessary.
Fringe Overhead G&A
Company A 28% 110% 9%
Company B 35% 93% 14%
Company C 29% 101% 8%
Company D 25% 103% 8%
Company E 33% 91%
AVERAGE 30% 100% 10%
SAMPLE WORKSHEET
(WS-2)
4
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION_RFP# W001234-D1
PREPARER J. SMITH
DATE XX/XX/9X
NEW CONTRACT _X
WORK ASSIGNMENT"
DELIVERY ORDERS _'_
OTHER
WORKSHEET FOR TRAVEL COSTS
TRAVEL
Airfare
Per Diem
Car Rental
Mileage
Ground Transportation
Other (explain)
*
*
*
*
*
TOTAL TRAVEL
YEAR1
$3,870
$3,312
$1,800
$1,820
$540
$11,342
YEAR 2 YE>
$4,025
$3,444
$1,872
$1,893
$562
$11,796
\R 3 TOTAL
$4,186 $12,081
$3,582 $10,339
$1,947 $5,619
$1,969 $5.681
$584 $1,686
$12,268 $35,405
NOTES, ASSUMPTIONS AND COMPUTATIONS
Most of the work on this contract will be performed in the Washington area. Therefore, most of the
travel costs will be for local travel. On the current contract, there has been the need to travel
to the Program office in RTP approximately once a month for a two day visit. On this contract
with the addition of the technical writer to assist the program with some of the written technical
descriptions, there will be a need for the technical writer to meet with program officials. Based on
discussions with the Branch and Section Chiefs who will use this contract, we are pro/ectino six,
two day trips per year for the technical writer. For local travel, we assumed a maximum of
25 miles one way distance from the EPA Headquarters offices, two trips per week
deliver emergency reports and used the current mileage rate Government workers
for meetings, or to
are reimbursed
when using privately owned cars. For years two and three, we have escalated year one total travel
by 4% for each year. The escalation factor is based on
Cost Advisory Branch.
discussions with Washington
Computations are as follows;
Local travel
Two trips per week - 50 miles maximum roundtrip
Parking @$5.00/trip
Two trips/week x 52 weeks = 104 trips x $5/trip parking = $520 for parkina
Mileage @$.25/mile
Two trips/week x 52 weeks x 50 miles/trip = 5,200 miles/year = $1,300/year for mileage
Mileage =
Parking =
Total Local travel
$1,300
$520
$1t820
(Use additional pages if necessary)
SAMPLE WORKSHEET
WS-3
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION RFP #W001234-D1
PREPARER _J. SMITH
DATE XX/XX/9X
NEW CONTRACT _X
WORK ASSIGNMENT
DELIVERY ORDERS
OTHER
IGCE CONTINUATION WORKSHEET - TRAVEL
RTF Trips
18 trips total — two days each trip
Airfair $215 - 18 trips x $215 =
$3,870
Perdiem $92/day - 18 trips x two days x $92/day =
$3,312
Car Rental $50/day - 18 trips x two days x $50/day =
Parking & mileage $15/day- 18 trips x two daysx $15/day
$1,800
$540
Total RTP Travel
$9.522
Total Year One Travel - Local
$1,820
Total Year One Travel - RTP
$9, 522
Total Year 1
$11.342
add escalation of 4% for Year 2
1.796
add escalation of 4% for Year 3
$12.268
SAMPLE WORKSHEET
Contiunation page (WS—3!
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION RFP #W001234-D1
PREPARER J. SMITH
DATE XX/XX/9X
NEW CONTRACT _X
WORK ASSIGNMENT
DELIVERY ORDER ^
OTHER
OTHER DIRECT COST ESTIMATE
OTHER DIRECT COSTS
YEAR 1
YEAR 2
YEAR 3
TOTAL
COURIER/MESSENGER
$2,080
$2,163
$2,250
$6,493
COMPUTER RELA TED COSTS
$41,650
$38,036
$39,479
$119,165
MATERIAL/SUPPLIES
$600
$624
$649
$1,873
POSTA GE/FEDERAL EXPRESS
$900
$936
$973
$2,809
REPORTS
$32,500
$33,800
$35,152
$101,452
REPRODUCTION
$1,200
$1,248
$1,298
$3,746
TELEPHONE
$13,000
$13,520
$14,061
$40,581
TOTAL ODCs
$91.930
$90,327
$93,862
$276,119
NOTES, ASSUMPTIONS AND COMPUTATIONS
COURIER/MESSENGER
From our historical data, we determined we were paying an average of $18 per trip for courier
service and there was an average of three trips per week. We reviewed what was being delivered by
courier and determined some items being delivered were routine reports or follow-ups of meetings
that could be delivered by regular mail or delivered by people coming for regularly scheduled
meetings. Two trips per week are more than sufficient to serve the needs of the program.
We checked the Washington Post for courier advertising and found rates of $15/trip to $30/trip.
We called three courier services and got the following quotes:
Company A: $15/trip - 5 mile radius; $30/trip - 5 miles and beyond
Company B: $20/trip in metro area
Company C: $21/trip in metro area
Based on the above information, we are using $20/trip for estimating purposes and
4% escalation for years two and three.
Computations
2 trips/week x 52 weeks x $20/trip =
$2.080 Year One
4% escalation
$2.163 Year Two
4% escalation
$2.250 Year Three
Total for 3 years
$6.493
(Use additional pages if necessary)
WS-4
SAMPLE WORKSHEET
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INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP # W001234-D1 NEW CONTRACT __X_
PREPARER _J. SMITH __ WORK ASSIGNMENT _
DATE __XX/XX/9X DELIVERY ORDERS
OTHER
IGCE CONTINUATION WORKSHEET- OTHER DIRECT COSTS
COMPUTER RELATED COSTS
This contract requires extensive use of computers. EPA provides some PCs as government
furnished property and some of the work is performed using various LANS and the mainframe.
Our projected cost for computer related costs are for costs the contractor will incur for
contractor owned equipment. Our review of the workload on the current contract disclosed
80% of the computer related hours were for personal computer (PC) usage and the remainder for
mainframe usage and additional software to provide compatability with EPAprograms. The
program office branch chief projected a 10% increase in computer usage time on this contract due to the
addition of more LANS at EPA and usage by the technical writer. The program is currently reviewing
the need to provide more government PCs to this contract. However, a decision on this
will not be made for at least a year. For estimating purposes we have utilized the current
usage hours plus 10% for PCs and mainframe.
PCs
Current average usage hours = 1,200 per month
Projected in-house increase of 10% 120
Total projected PC usage 1,320 hours
Mainframe
Current average usage hours = 300 per month
Projected in-house increase of 10% 30
Total current mainframe usage 330 hours
The PC usage rate under the current contract is $11/hr. and the mainframe rate is $55/hr.
We looked at two other contracts in our program that have PC and Mainframe usage and did a straight
average of the rates for each.
PC Mainframe
current contract $11/hour $55/hour
contracts $15/hour $60/hour
contract C $10/hour $55/hour
Average 36/3 = $12/hr. 170/3 = $57/hr.
Because the average rates are higher than the current contract rates, we decided to use
them for estimating purposes and to add escalation of 4% for years two and three.
Continuation page (WS-4)
SAMPLE WORKSHEET
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP # W001234-D1 NEW CONTRACT __X_
PREPARER __J. SMITH WORK ASSIGNMENT _
DATE __XX/XX/9X DELIVERY ORDERS
OTHER
IGCE CONTINUATION WORKSHEET- OTHER DIRECT COSTS
COMPUTER RELATED COSTS - continued
For software, the program needs the flexibility to work with new software programs that come
on the market. They are aware of some new programming in process that could enhance their work.
To cover current needs and possible new software needs we are estimating 20 software programs at an
average cost of $350 for year one. For years two and three, we are estimating $2, OOP per year for
updating software.
Year One Estimate
PCs: $12/hourx 1,320 hours = $15,840
Mainframe: $57/hourx 330 hours = $18,810
subtotal $34,650
Software: 20programsx$350 each - $7,000
Total Year One $41.650
Year Two and Three Estimate
PC year one rate x 1.04 = year two rate x 1.04 = year three rate
$12x 1.04 = $12.48x 1.04 = $12.98
Mainframe year one rate x 1.04 = year two rate x 1.04 = year three rate
$57 X 1.04 = $59.28 x 1.04 = $61.65
Year Two Estimate
PCs: $12.48/hourx 1,320 hours = $16,474
Mainframe: $59.28/hourx 330 hours = $19,562
subtotal $36,036
Software updates $2,000
Total Year Two $38.036
Year Three Estimate
PCs: $12.98/hourx 1,320 hours = $17,134
Mainframe: $61.65/hourx 330 hours = $20,345
subtotal $37,478
Software updates $2,000
Total Year Three $39.478
GRAND TOTAL $119.164
Continuation page (WS-4)
SAMPLE WORKSHEET
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INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP # W001234-D1 NEW CONTRACT __X_
PREPARER _J. SMITH WORK ASSIGNMENT _
DATE __XX/XX/9X DELIVERY ORDERS _
OTHER
IGCE CONTINUATION WORKSHEET - OTHER DIRECT COSTS
MA TERIAUSUPPLIES
This category of cost is for graphic supplies, some office supplies and specific publications
required for this contract. This has been a minimal cost in the past and there is no forseeable reason
for it to increase a great deal in the future. For the past 3 years on the current contract it has averaged
approximately $50/month. We are using this average for year one with escalation of 4% for years 2 and 3.
Year One: $600 ($50 x 12)
escalation 1.04
Year Two $624
escalation 1.04
Year Three $649
TOTAL $1.873
POSTAGE/OVERNIGHT DELIVERY
Postage on the current contract is currently running approximately $20/month and overnight delivery
$50/month. With the decrease in courier service recommended, the mailing cost should increase
by abourt $5/month. Overnight delivery is expected to remain at the same level. We have included
escalation of 4% for years two and three.
Year One:
Postage: $25/month x 12 = $300
Overnight delivery: $50/month x 12 = $600
Total $900
Year Two: with 4% escalation $936
Year Three: with 4% escalation $973
TOTAL $2.809
Continuation page (WS-4)
SAMPLE WORKSHEET
10
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INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP # 009876 - A1 NEW CONTRACT __X
PREPARER __J. DOE WORK ASSIGNMENT"
DATE __XX/XX/9X DELIVERY ORDERS "
OTHER
IGCE CONTINUATION WORKSHEET- OTHER DIRECT COSTS
REPORTS
Monthly reports and annual reports are^eguirements on this contract. Our past experiences has
indicated an estimate of so much per page provides the best indication of cost. This per page unit
cost includes special binding and covers, word processing cost and copying the reports.
The total number of reports required by the Statement of Work per month is eight including all copies.
At the end of each year an additional six reports, including copies are required. Reports on similar
contracts averaged 40 pages per report at $3.50 per page. These reports have been sufficient to meet
our needs. On this contract we anticipate an increase in the number of pages due to additional areas
which have to be addressed as required by the SO W. We estimate an increase of five pages per report.
These reports are extremely important and we want to be sure there are sufficient dollars in the contract^
to cover the cost. Therefore, we have increased our estimated cost per page to $4 to account for
increases due to inflation and lor any unexpected reports we may require.
Year One Estimated Costs:
J C7Cff \*ftl\? £_OCf f ffC*fC7U t~/(~'
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP # W001234-D1 NEW CONTRACT __X_
PREPARER _J. SMITH WORK ASSIGNMENT _
DATE __XX/XX/9X DELIVERY ORDERS
OTHER
IGCE CONTINUATION WORKSHEET- OTHER DIRECT COSTS
TELEPHONE
For IGCE estimating purposes we are basing our estimate on the number of long distance phone calls
required to perform the contract at an acceptable level. Based on experience we have found
the more verbal communications there are between the program and the contractor, the less mistakes
we have. On the current contract we are averaging ten long distance call a day with an average duration
of 10 minutes each. We have experienced an average of $. 50 per minute on the current contract.
The phone company indicated they did not expect to increase the rate for at least a year.
Therefore, our computed amount for telephone are as follows:
(52x5 -260) 260 days/yr. x 10 calls/day x 10 minutes/call = 26,000 minutes/year
Year 1: 26,000 minutes x $.50 = $13,000
Year 2: with escalation @ 4% $13,520
Year 3: with escalation @ 4% $14,061
TOTAL $40.581
MISCELLANEOUS
We have not included any amount for miscellaneous. We believe we have covered the necessary costs.
There are no specific items that we can think of that would be included here. If a contractor proposes
an amount for this element of cost, we will review it and make a determination of its necessity to
this contract.
Continuation page (WS-4)
SAMPLE WORKSHEET
12
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION RFP #W001234-D1 NEW CONTRACT _X
PREPARER J. SMITH WORK ASSIGNMENT
DATE _XX/XX/9X DELIVERY ORDER '_
OTHER
PROFIT WORKSHEET
We talked to the contracting officer regarding profit. She recommended we take the conservative approach and
use a 10% profit factor to provide better assurance that we don't under estimate our costs. We have taken the
contracting officer's recommedation and used a 10% profit factor for all categories.
The RFP is allowing lor G&A on travel and other direct costs, but states there will be no profit paid on travel
and other direct costs for this procurement. Therefore, we did not include any amounts for profit on the travel and
other direct costs.
SAMPLE WORKSHEET
(WS-5)
13
-------
APPENDIX D
IGCE FORMS
COST
CONT
irri
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION/CONTRACT
PREPARER
DATE
NEW CONTRACT
WORK ASSIGNMENT"
DELIVERY ORDER
OTHER
SUMMARY COST ESTIMATE
COST REIMBURSABLE CONTRACTS
CATEGORY
1. Direct Labor (WS-1)
2. Fringe Benefits (WS-2)
3. Total Direct Labor & Fringe Benefits (lines 1 & 2)
!*:' tn* ' : s -V ^ '.°....'
4. Overhead (WS-2)
^y^i^s^^^i»jj*'*^<^^^ '^y.i* &»....' -"-!- >
5. Total Travel (WS-3)
('""•• -^^ r-|" „* ^ » s} •"- "-.-••x - - --,,
6. Total Other Direct Costs (WS-4)
^!,,^ dlfe^^rf v^v .^..IA.-.,.I .:.,r. c :...\ -
7. Sub -Total (lines 3,4, 5 & 6)
; ^ .> •"•*:* *« -^. •. ^ ? v <^ ^ ^ •• s j ^ ^
8. G&A (WS-2)
^ * C^Kf ^ -/ c- ^ * ;'-^ " -ii ? , >^ '
9. Total Costs (lines 7 & 8)
t > j-."-rv \ " >>;: > -; - ••- , -v-
«¥;^''s \''^:W^^'V •,/{•>!)•. •^Ijs-'^J «*''*• < !* J> '^ ; /*,* ' ' ',
10. Profit/Fee (WS-5)
yp ^""^'WWS""?-. s* „* - > ^ "'-^ •^O* ^- % " '
,v\' 'I '< '• ^'W\ *•"' *," '-'"'•.- *'sfYX<'s^ --' v ' .-: x.
1 1 Total Cost and Profit (lines 9 & 1 0)
TASK 1
$
$
$
s
$
$
$
$
$
-
$
.• •• ••
$
$
TASK 2
$
$
$
$
$
$
$
$
$
-
$
$
TASK 3
$
$
$
$
$
$
$
$
$
$
$
TOTAL
$
$
$
$
$
$
$
$
$
$
$
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION/CONTRACT
PREPARER
DATE
NEW CONTRACT
WORK ASSIGNMENTS
DELIVERY ORDER
OTHER
DIRECT LABOR ESTIMATE WORKSHEET
COST REIMBURSABLE CONTRACTS
Labor Category
P/T Level
YEAR1
Hours
Rate
Amount
YEAR2
YEAR3
Hours
Rate
Amount
Hours
Rate
Amount
TOTAL
Hours
Amount
$
$
$
$
TOTAL
NOTES, ASSUMPTIONS AND COMPUTATIONS
(Use additional pages if necessary)
WS-1
-------
INDEPENDENTGOVERNMENTCOST ESTIMATE TYPE OF ACTION
SOLICITATION/CONTRACT NEW CONTRACT
PREPARER WORK ASSIGNMENT
DATE DELIVERY ORDER
OTHER
DIRECT LABOR ESTIMATE WORKSHEET
(WS — 1) Continuation Page
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION/CONTRACT NEW CONTRACT
PREPARER WORK ASSIGNMENT
DATE DELIVERY ORDER
OTHER
INDIRECT COST RATES WORKSHEET
(WS-2)
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION/CONTRACT
PREPARER
DATE
NEW CONTRACT
WORK ASSIGNMENT"
DELIVERY ORDERS _
OTHER
WORKSHEET FOR TRAVEL COSTS
TRAVEL
YEAR1
YEAR 2
YEAR 3
TOTAL
Airfare
$
Per Diem
Car Rental
Mileage
Ground Transportation
Other (explain)
TOTAL TRAVEL
$
$
$
$
NOTES, ASSUMPTIONS AND COMPUTATIONS
(Use additional pages if necessary)
WS-3
-------
INDEPENDENTGOVERNMENTCOST ESTIMATE
TYPE OF ACTION
SO LICITATIO N/CONTRACT
PREPARER
DATE
NEW CONTRACT
WORK ASSIGNMENT
DELIVERYORDER ;
OTHER
OTHER DIRECT COST ESTIMATE
OTHER DIRECT COSTS
YEAR1
YEAR 2
YEAR 3
TOTAL
COURIER/MESSENGER
$
$
$
$
COMPUTER
MATERIAL/SUPPLIES
POSTAGE/FEDERAL EXPRESS
REPORTS
REPRODUCTION
TELEPHONE
MISCELLANEOUS
TOTAL ODCs
$
$
$
$
NOTES, ASSUMPTIONS AND COMPUTATIONS
WS-4
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION/CONTRACT NEW CONTRACT
PREPARER WORK ASSIGNMENT
DATE DELIVERY ORDERS _
OTHER
IGCE CONTINUATION WORKSHEET
Contiunation page
-------
INDEPENDENT GOVERNMENT COST ESTIMTYPE OF ACTION
SOLICITATION/CONTRACT NEW CONTRACT
PREPARER WORK ASSIGNMENT
DATE DELIVERY ORDER _
OTHER
PROFIT/FEE WORKSHEET
(WS-5)
-------
APPENDIX E
IGCE FORMS
FIXED RATE INDEFINITE
QUANTITY CONTRACT
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION/CONTRACT
PREPARER
DATE
NEW CONTRACT
WORK ASSIGNMENT
DELIVERY ORDER
OTHER
SUMMARY COST ESTIMATE
FIXED RATE/INDEFINITE QUANTITY CONTRACTS
YEAR 1
YEAR 2
YEAR 3
TOTAL
1. Direct Labor (WS - 1,2 & 5
2. Total Travel (WS-3
$
$
3. Total Other Direct Costs (WS-4
$
4. G&A on travel and ODCs (if applicable) (WS - 2)
$
5. Total Costs (lines 1.2,3 & 4)
$
$
$
$
$
$
$
$
$
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATION
PREPARER ^
DATE
NEW CONTRACT
WORK ASSIGNMENT
DELIVERY ORDER
OTHER
DIRECT LABOR ESTIMATE WORKSHEET
SCHEDULE OF LOADED FIXED RATES
Labor Category
P-4
TOTAL
P-3
TOTAL
P-2
TOTAL
P-1
TOTAL
T-4
TOTAL
T-3
TOTAL
T-2
TOTAL
TOTAL LOE
Clerical
TOTAL DIRECT LABOR
Unloaded
Hourly Rate
Fringe @
Overhead @
Subtotal
G&A @
Total
Costs
Profit @
Loaded
Hourly Rate
Estimated
Hours/year
CONTRACT COSTS
Taskl
Task 2
Task 3
TOTAL
NOTES, ASSUMPTIONS AND COMPUTATIONS
additional pages it nesessary)
WS-1
-------
INDEPENDENTGOVERNMENTCOST ESTIMATE TYPE OF ACTION
SOLICITATION/CONTRACT NEW CONTRACT
PREPARER WORK ASSIGNMENT
DATE DELIVERY ORDER
OTHER
DIRECT LABOR ESTIMATE WORKSHEET
(WS — 1) Continuation Page
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION/CONTRACT NEW CONTRACT
PREPARER WORK ASSIGNMENT
DATE DELIVERY ORDER
OTHER
INDIRECT COST RATES WORKSHEET
(WS-2)
-------
INDEPENDENT GOVERNMENT COST ESTIMATE
TYPE OF ACTION
SOLICITATIO N/CO NTRACT
PREPARER
DATE
NEW CONTRACT
WORK ASSIGNMENT
DELIVERY ORDERS _
OTHER
WORKSHEET FOR TRAVEL COSTS
TRAVEL
YEAR1
YEAR 2
YEAR 3
TOTAL
Airfare
$
$
Per Diem
Car Rental
Mileage
Ground Transportation
Other (explain)
TOTAL TRAVEL
$
$
$
$
NOTES, ASSUMPTIONS AND COMPUTATIONS
(Use additional pages if necessary)
WS-3
-------
INDEPENDENT GOVERNMENTCOST ESTIMATE
TYPE OF ACTION
SO LICITATIO N/CONTRACT
PREPARER ~
DATE
NEW CONTRACT
WORK ASSIGNMENT
DELIVERYORDER "
OTHER
OTHER DIRECT COST ESTIMATE
OTHER DIRECT COSTS
YEAR1
YEAR 2
YEAR 3
TOTAL
COURIER/MESSENGER
$
$
$
$
COMPUTER
MATERIAL/SUPPLIES
POSTAGE/FEDERAL EXPRESS
REPORTS
REPRODUCTION
TELEPHONE
MISCELLANEOUS
TOTAL ODCs
$
$
$
$
NOTES, ASSUMPTIONS AND COMPUTATIONS
WS-4
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION/CONTRACT NEW CONTRACT
PREPARER WORK ASSIGNMENT
DATE DELIVERY ORDERS _
OTHER
IGCE CONTINUATION WORKSHEET
Contiunation page
-------
INDEPENDENT GOVERNMENT COST ESTIMATE TYPE OF ACTION
SOLICITATION/CONTRACT NEW CONTRACT
PREPARER WORK ASSIGNMENT
DATE DELIVERY ORDER
OTHER
PROFIT WORKSHEET
(WS-5)
------- |