1. EXAM PREP COURSE – 2016 SESSION UNIT 4 BY DONALD E. SHANNON CPCM,CFCM, FELLOW Certified Federal Contracts Manager © 2015 – Rio Grande Chapter NCMA

2. Copyright Notice This presentation is the property of the Rio Grande Chapter of the National Contract Management Association © 2015. All rights reserved. This presentation is intended for the private, non-commercial use of the Rio Grande Chapter of the National Contract Management Association (NCMA) for the education and training of candidates seeking certification by the NCMA as a Certified Federal Contracts Manager. This presentation may not be duplicated, reproduced or used in any form or by any means including photocopying and recording or by any information storage and retrieval system without permission in writing from the publisher.

3. MARKET RESEARCH FAR Part 10

4. 10.001 Policy Agencies must—  Ensure that legitimate needs are identified and trade-offs evaluated to acquire items that meet those needs. What are some of those trade offs?  Cost of purchasing via FSS vs. a separate procurement  Time and administrative burden of placing the order/contract  Others …

5. Conducting Market Research Is appropriate to the circumstances before soliciting offers for acquisitions with an estimated value?  In excess of the simplified acquisition threshold.  Less than the simplified acquisition threshold when adequate information is not available and the circumstances justify its cost. When appropriate to the circumstances of:  Soliciting offers for acquisitions that could lead to a bundled contract (15 U.S.C. 644(e)(2)(A))15 U.S.C. 644(e)(2)(A)  Awarding a task or delivery order under an indefinite- delivery/indefinite-quantity (ID/IQ) contract (e.g., GWACs, MACs) for a noncommercial item in excess of the amplified acquisition threshold (10 U.S.C. 2377)10 U.S.C. 2377

6. Conducting Market Research Commercially available Market Research methods:  Assists in locating small businesses and identifying new applicants and their capabilities that meet the requirements of the agency, now and for the future. When using RFI’s, agencies should not request potential sources to submit more than the minimum information necessary.

7. Results of Market Research If sources are capable of satisfying the agency’s requirements exist. Preference for Commercial items. Market research will disclose:  If commercial items meeting the agency needs are available or,  If non-developmental items are available that meet the agency’s requirements; or can be modified to do so at a reasonable cost.  The extent to which commercial items or non-developmental items could be incorporated at the component level.

8. Results of Market Research Determine the practices of firms engaged in producing, distributing, and supporting commercial items, such as type of contract, terms of warranties, buyer financing, maintenance, packaging, and marking; Ensure maximum practicable use of recovered materials (see Subpart 23.4) and promote energy conservation and efficiency.Subpart 23.4 Determine whether bundling is necessary and justified (see 7.107) (15 U.S.C. 644(e)(2)(A)).7.10715 U.S.C. 644(e)(2)(A)

9. Results of Market Research Assess the availability of electronic and information technology that meets all or part of the applicable accessibility standards issued by the Architectural and Transportation Barriers Compliance Board at 36 CFR.

10. Marketing Research - Do’s Consult with the local Small Business Administration procurement center representative. At least 30 days before release of the solicitation or 30 days prior to placing an order without a solicitation. Notify any affected incumbent small business concerns of the Government’s intention to bundle. Notify any affected incumbent small business concerns of how the concerns may contact the appropriate Small Business Administration representative.

11. Marketing Research - Do’s Include the requirement for a prime contractor to perform market research in contracts in excess of $5 million for the procurement of items other than commercial items

12. 10.002 Procedures Description of Governments needs stated in sufficient terms to allow for Market Research. Determine if commercial items or non- developmental items, available to meet the Governments needs. Market Research will vary depending on such factors as urgency, estimated dollar value, complexity and past experience. The CO may use Market Research conducted within the last 18 months before award, if information is still current, accurate and relevant.

13. Procedures: Market Research must be specific to the items being acquired, to support weather the Governments needs can be met. Routine practices regarding customizing, or modifying items to meet the customers needs, and associated costs may include:  Warranty  Buyer Financing  Discounts  Contract type

14. How to Conduct Market Research Contacting knowledgeable individuals in Government and industry regarding market capabilities to meet requirements. Review the results of recent Market Research conducted to meet similar or identical requirements. Review Government databases used by multiple agencies. Interactive, on-line communication, with industry and acquisition personnel.

15. How to Conduct Market Research Publish formal requests for recent Market Research in appropriate technical and scientific journals and business publications. Always DOCUMENT the results of Market Research in a manner appropriate to the size and complexity of the acquisition.

16. DESCRIBING AGENCY NEEDS FAR Part 11

17. Why? To promote full and open competition Provide a standard to which supplies or services should state requirements Use of metric system as preferred system of weights & measurements for US Trade and commerce Allow for comment from contractors –  To the extent practicable and consistent with Subpart 9.5, potential offerors should be given an opportunity to comment on agency requirements or to recommend application and tailoring of requirements documents and alternative approaches.Subpart 9.5

18. Requirements Package FAR 11.101 states that: Agencies may select from existing requirements documents, modify or combine existing requirements documents, or create new requirements documents to meet agency needs, consistent with the following order of precedence: (1) Documents mandated for use by law. (2) Performance-oriented documents (e.g., a PWS or SOO). (See 2.101.) 2.101 (3) Detailed design-oriented documents. (4) Standards, specifications and related publications issued by the Government outside the Defense or Federal series for the non-repetitive acquisition of items.

19. Brand Name or Equal Brand name or equal purchase descriptions must include, in addition to the brand name, a general description of those salient physical, functional, or performance characteristics of the brand name item that an “equal” item must meet to be acceptable for award. Use brand name or equal descriptions when the salient characteristics are firm requirements.

20. Example of Brand Name or Equal Brand Name or Equal to Bellevue hot weather boot. Hot weather, sage green, lace up, steel toed, combat boot

21. One Manufacturer Agencies shall not write requirements as to require a particular brand-name product or feature that limits to one manufacturer unless:  It is essential to the Government’s requirements and market research indicates other companies’ similar products are lacking. Requires Justifications and Approvals (J&A) for other than full and open competition

22. Service Contracts Inherently Governmental Functions may not be contracted (FAR 7.5)  Directing/Commanding  Approval  Decision points/making decisions Contractor Identification  Requires proper identification of contractor personnel to Government officials  Requires marking of all documents or reports produced by contractor

23. Identification & Availability of Specifications GSA Index of Federal Specifications, Standards and Commercial Item Descriptions DoD Acquisition Streamlining and Standardization Information System (ASSIST) Other Agency index shall identify information. These resources provide a list of items/specifications that have already been ‘vetted’ for government use

24. Acceptable Material Agencies are to avoid virgin material or supplies unless compelled by law or regulation or is vital for safety or meeting performance requirements  Paper – Executive Order 13423 and Executive Order 13514 requires 30% post consumer fiber content in paper for writing or printing

25. Delivery Performance Schedules Supplies/Services establishing schedule is dependent:  Urgency  Industry Practices  Market conditions  Transportation time  Production Time  Capabilities of small business  Administration time  Time for contractor to comply with conditions  Time for Govt. to perform its obligations (ex. GFP)

26. Delivery Performance Schedules Construction schedule is dependent:  Nature/Complexity  Seasons  Completion Date  Material and Equipment Availability  Capacity of contractor to perform  Use of multiple completion dates

27. Priorities and Allocations Implements the Defense Priorities and Allocations System (DPAS) which is required per 15 CFR part 700  President delegated to Secretary of Commerce the a ability to require preferential acceptance and performance of contracts and orders supporting certain national defense and energy programs  DO orders take precedence over unrated orders  DX orders take precedence over DO orders

28. Variations in Quantity Supply Contact – must be fixed price  No standard or usual variation percentage; variation percentage shall not exceed +/- 10% unless different limitation is established in agency regulations  Qtys up to $250 in value may be retained without compensating contractor  Qtys over $250 in value may, @ Govt’s option, be retuned @ contractors expense or retained & paid for

29. ACQUISITION OF COMMERCIAL ITEMS FAR Part 12

30. Scope of Part 12 Implements Title VIII of the Federal Acquisition Streamlining Act of 1994 (Public Law 103-355) Reflects the Federal Government’s preference for the acquisition of commercial items Establishes acquisition policies more closely resembling those of the commercial marketplace Encourages the acquisition of commercial items and components.

31. Definition of Commercial Items Supplies and services that meet the definition of commercial items are listed as: A type customarily used by the general public or Is used by non-governmental entities for purposes other than governmental purposes, and Has been sold, leased, or licensed to the general public or Has been offered for sale, lease, or license to the general public or Any item evolved from the above described and is not yet commercially available, but will be available in time to meet solicitation requirements, or

32. Definition of Commercial Items (cont.) Any item that would satisfy above criteria but for: Modifications of a type customarily available in the commercial marketplace, or Minor modifications of a type not customarily available in the commercial marketplace but that are made to meet Federal Government requirements. (Minor means does not materially alter basic original intended function or characteristics.) Any combination of any of the above customarily combined and sold in combination to the general public

33. Definition of Commercial Services Installation services, maintenance services, repair services, training services, and other services if: Such services are procured for support of an item referred to above (regardless if provided by the same source at the same time), or The source provides such or similar services to the general public contemporaneously under the same or similar terms, or Services are of a type offered and sold competitively in substantial quantities in the commercial marketplace Such services are based on established catalog or market prices for specific purposes under standard T & C’s.

34. Definitions (cont): Non-developmental and Commercial Off-the-Shelf (COTS) Non-developmental items are considered commercial if item is determined to have been developed exclusively at private expense and sold competitively in substantial quantities to multiple State and local government entities. COTS means any commercial item defined above that is sold in substantial quantities in the commercial marketplace and Offered to the Government under a contract or subcontract at any tier, without modification and in the same form as sold in the commercial marketplace, and Does not include bulk cargo such as agricultural and petroleum products.

35. Subpart 12.1 Acquisition of Commercial Items -- General 12.101 – Policy : What is required of Agencies  Conduct market research to determine availability of commercial and non-developmental items  Acquire such of the above as are available to meet the needs of the agency  Require prime contractors and subcontractors at all tiers to incorporate such items, to the maximum extent practicable, as components of items supplied to the agency.

36. Applicability 12.102 This part shall be used to acquire supplies or services that meet the definition of commercial items above. CO’s shall use this part for solicitation, evaluation and award of contracts for Commercial Items. Acquisitions of commercial items are subject to other policies in the FAR. When policies from another part conflict with this part, this part 12 shall supersede.

37. Applicability 12.102 (cont.) This part shall not apply to the acquisition of commercial items:  That are at or below the micro-purchase threshold  By using the Standard Form 44 (see 13.306)  By using the imprest fund (see 13.305)  By using the Government-wide commercial purchase card, or  Directly from another federal agency.

38. Applicability 12.102 (cont.) CO’s may treat any acquisition that are used to facilitate defense or recovery from nuclear, biological, chemical or radiological attack as an acquisition of commercial items. A contract with value over $17.5M that is awarded as sole source for an item or service treated as a commercial item shall not be exempt from CAS or certified cost or pricing data requirements. The CO may use Part 12 for any acquisition that does not meet the definition of a commercial item if any of the caveats listed in 12.102(g)(1)(i) through 12.102(g)(1)(vii) are applicable. The CO may tailor paragraph (a) of this clause as may be necessary to ensure remedies adequately protest the Government’s interests.

39. Special Requirements (12.201-12.202) Market research is an essential element Description in solicitation must contain sufficient but not excessive detailed information for potential offerors. Describe only the type of product or service agency is seeking, and how it will be used in terms of its function, performance requirement or essential characteristics. Requirements for Electronics and IT must comply with standards issued by Architectural and Transportation Barriers Compliance Board (see Subpart 39.2). Include appropriate Internet Protocol compliance requirements for IP acquisitions using Internet Protocol.

40. Solicitation, Evaluation, and Award -General (12.203) For the acquisition of commercial items, CO’s shall use the policies prescribed in this Part 12 in conjunction with those in:  Part 13 (Simplified Acquisition Procedures),  Part 14 (Sealed Bidding) or  Part 15 (Contracting by Negotiation), as appropriate. CO may use the streamlined solicitation procedure prescribed in 12.603. For commercial items exceeding the SAT but not exceeding $6.5M ($12M for items in 13.500(e)), including options, simplified procedures authorized by Subpart 13.5 shall be employed to the maximum extent practicable.

41. Solicitation, Evaluation, and Award -Procedures (12.204 – 12.205) CO shall employ Std Form 1449 (Solicitation/Contract/Order for Commercial Items) if :  Acquisition will exceed the SAT,  A paper solicitation or contract is issued and  Streamlined procedures are not being employed.  Use of SF 1449 is not mandatory for acquisitions below the SAT, but is encouraged. CO may allow less than 15 days before issuance of solicitation. After reviewing for adequacy, CO’s shall request product literature from offerors in lieu of unique technical specs. CO’s should allow offerors to propose more than one product; each of which will be evaluated as a separate offer. The CO may allow less than 30 days response time, for offers of commercial items unless the acquisition is covered by the WTO GPA or a Free Trade Agreement.

42. Solicitation Evaluation and Award -Procedures (12.206-12.207) Past performance data should be considered an important element of every evaluation for commercial item contracts. Except for commercial services, agencies shall use FFP contracts or fixed price with economic price adjustment. For acquisitions of commercial services, time-and-materials or labor-hour contracts should generally be employed. (See 12.207 (b)(1) through (b)(4) for caveats.) Indefinite delivery contracts may be used when above contract types are employed. Contract types authorized by this subpart may be used in conjunction with an award fee and performance or delivery incentives when cost is not a factor. Use of other contract types is prohibited.

43. Solicitation, Evaluation, and Award -Procedures (12.208 – 12.211) Contracts for commercial items shall rely on contractors’ quality assurance systems in lieu of Government inspection and testing unless customary market practices preclude it. CO should be aware of customary market T & C’s, potential extenuating circumstances, and other relevant factors (such as delivery schedules) when determining price reasonability. All factors should be consistent with the Government’s needs. The CO may offer Government financing in accordance with Part 32, if consistent with customary market practice. CO shall acquire only technical data and associated rights customarily provided with any commercial item or process. Relevant clauses or provisions shall be delineated in contract.

44. Solicitation, Evaluation, and Award -Procedures (12.212 ) Software and/or associated documentation shall be acquired under licenses customarily provided to public to the extent allowed by Federal law and it satisfies needs of Government. Contractors/offerors shall not be required to furnish additional technical data beyond what is provided to public. Contractors/offerors shall not be required to relinquish to the Government the rights to use, modify, reproduce, etc., unless mutually agreed to by the parties. Government shall have only those rights specified in the license contained in any addendum to the contract.

45. Solicitation, Evaluation, and Award -Procedures (12.213 – 12.215 ) Terms and Conditions consistent with common market practice should be employed unless the particular item or service being acquired indicates otherwise. Cost Accounting Standards do not apply to commercial acquisitions when FFP or fixed price with economic price adjustment contracts are utilized.

46. Provisions & Clauses Subpart 12.301 Implements only those provisions and clauses required to implement applicable law or executive orders or those determined to be consistent with customary commercial practice Agencies may supplement clauses in this part only as necessary to implement statutes that are agency unique to a particular acquisition.

47. Provisions & Clauses Subpart 12.302 - Provisions and clauses employed for acquisitions of commercial items may be tailored to adapt to market conditions when necessary except for the following at 52.212-4:  Assignments;  Disputes;  Payment; (except as provided in Subpart 32.11)Subpart 32.11  Invoice;  Other compliances; and  Compliance with laws unique to Government contracts.

48. Contract Format 12.303 To the maximum extent practicable, contracts and solicitations for commercial items should be assembled using the following:  Std. Form 1449  Contract clauses and addenda from 52.212-4  Any contract documents, exhibits or attachments; and  Solicitation provisions at 52.212-1,-2, and -3

49. 12.402 Acceptance:  The acceptance paragraph at 52.212-4 is based on the assumption that the Government will rely upon the assurances of the contractor as to a commercial item’s conformance to contract requirements.  Government inspection will not prejudice its other rights.  Government retains the right to refuse non-conforming items.  Paragraph is appropriate for non-complex commercial items. Acceptance

50. Acceptance continued-  Other acceptance procedures can be used for acquisition of critical or complex commercial items. In such cases, the CO shall include alternative inspection procedures via addendum.  In such cases, CO must carefully examine T&C’s of any express warranty for post-award remedies, should they be needed.  Acquisition of commercial items on an “as-is” basis may also require special acceptance procedures. The CO should consider the effect the specific circumstances will have on the standard acceptance procedures paragraph as well as on anything else contained in 52.212-4.

51. Terminations 12.403 Termination:  The Government’s Termination for Cause or for Convenience provisions in 52.212-4 differ from those contained in Part 49.  Requirements contained in Part 49 do not apply when terminating contracts for commercial items; therefore the procedures in this section 52.212-403(c) and (d) should be utilized.  Part 49 may be used as guidance to the extent it does not conflict with this section.  Generally parties should agree on the requirements of the termination proposal based upon a balance between the Government’s needs and an expeditious settlement.

52. Warranty 12.404 Warranties-  Implied Warranties- The Government’s rights are the implied warranty of merchantability, fitness for a particular purpose, and remedies contained in the acceptance paragraph.  Express Warranties- CO’s are required to take advantage of express commercial warranties and ensure any such warranty is adequate to protect the Government’s needs and includes information regarding the procedures to activate any warranty. Warranty should be cost- effective. Where an implied warranty is excluded or limited, CO must ensure there is express warranty provides for repair or replacement within a reasonable period. Express Warranties shall be included by addendum.

53. Applicability of Certain Laws to Commercial and COTS Items The FAR prescription for each of the laws in 12.503 has been revised in the respective part to reflect its proper application.  For subcontracts for commercial acquisitions, the clauses in this subpart, “Contract Terms and Conditions required to Implement Statutes or Executive Orders—Commercial Items” and the clause at 52.244-6 reflect the proper applicability of the laws in 12.504 as to what are required for subcontracts.

54. Applicability of Certain Laws to Commercial and COTS Items In addition, the following are also not applicable to COTS items:  41 USC 10a, portion of the first sentence from the Buy American Act-Supplies, component test (see 52.225-1 & 52.225-11), and  41 USC 10b, a portion of the first sentence from the Buy American Act-Construction Materials, component test.  42 USC 6962(c)(3)(A), Certification and Estimate of Percentage of Recovered Material.

55. Streamlined Procedures for Evaluation and Solicitation for Commercial Items Optional procedures for streamlined solicitations of offers for commercial items may be used where appropriate.  These procedures are intended to simplify the process of preparing and issuing solicitations and evaluating offers for commercial items consistent with customary practices.  For example: Using a Combined Synopsis/Solicitation

56. Streamlined Procedures for Evaluation and Solicitation for Commercial Items 12.602 – Streamlined Evaluation of Offers  When evaluation factors are used, the CO may insert a substantially similar provision in solicitations to that in 52.212-2  “(a) The Government will award a contract resulting from this solicitation to the responsible offeror whose offer conforming to the solicitation will be most advantageous to the Government, price and other factors considered. The following factors shall be used to evaluate offers:”  or comply with the procedures in 13.106, if Simplified Acquisition Procedures are being employed.  When 52.212-2 is used, paragraph (a) of the provision shall be tailored to describe the associated evaluation factors for the specific acquisition.  However, when using the SAP in Part 13, CO’s are not required to describe the relative importance of evaluation factors.

57. Streamlined Procedures for Evaluation and Solicitation for Commercial Items Offers shall be evaluated in accordance with criteria in the solicitation, which for the most part, need not be more detailed than technical capability, price and past performance.  Technical capability may be evaluated by how well the product meets requirements versus predetermined factors.  Solicitation needs only to adequately describe the item’s intended use; sub-factors are not needed. Past performance shall be evaluated in accordance with 13.106 or Subpart 15.3 as applicable. Offer most suitable for Government will be selected and rationale fully documented; including trade-offs considered.

58. Streamlined Procedures for Evaluation and Solicitation for Commercial Items CO’s may use the following procedure for written solicitations, which rolls the synopsis and the solicitation into one document: Include the following statement in the Description:  “This is a combined synopsis/soliciation for commercial items prepared in accordance with the format in Subpart 12.6, as supplemented with additional information included in this notice.  This announcement constitutes the only solicitation; proposals are being requested and a written solicitation will not be issued.”

59. Streamlined Procedures for Evaluation and Solicitation for Commercial Items When using the combined synopsis/solicitation, it is not necessary to publicize a separate synopsis 15 days before issuance of solicitation as would normally be done. CO’s should establish a response time in accordance with 5.203(b) (but see 5.203(h)). Publicize amendments to solicitations in the same manner as the initial synopsis and solicitation. 

60. SIMPLIFIED ACQUISITION PROCEDURES FAR Part 13

61. Scope This part prescribes policies and procedures for the acquisition of supplies and services, including construction, research and development, and commercial items, the aggregate amount of which does not exceed the simplified acquisition threshold, and that includes purchases at or below the micro- purchase threshold.

62. Purpose The purpose of this part is to simplify procedures which will aid in reducing administrative costs; Improving opportunities for small businesses in obtaining a fair proportion of Government contracts; Promoting efficiency and economy in contracting; and Avoiding unnecessary burdens for agencies and contractors.

63. Policy Acquisitions of supplies or services that have an anticipated dollar value exceeding $3,000 and not exceeding $150,000 are reserved exclusively for small business concerns and shall be set aside The contracting officer may make an award to a small business under the 8(a) Program, but the decision to NOT make an award or set-aside decision for these programs is not subject to review under subpart 19.4. The contracting officer shall not use simplified acquisition procedures to acquire supplies and services if the anticipated award will exceed the simplified acquisition threshold; or $6.5 million including options, for acquisitions of commercial items.

64. Policy The CO shall not break down requirements totaling more than the SAT (or for commercial items, the threshold in Subpart 13.5) or the micro-purchase threshold, into several purchases that are less than the applicable threshold merely to permit use of simplified acquisition procedures, or to avoid any requirement that applies to purchases exceeding the micro-purchase threshold. An agency that has specific statutory authority to acquire personal services (see 37.104) may use simplified acquisition procedures to acquire those services

65. Quotations A quotation is not an offer and cannot be accepted by the Government to form a binding contract. The issuance by the Government of an order in response to a supplier’s quotation does not establish a contract. The order is an offer by the Government to the supplier to buy certain supplies or services upon specified terms and conditions. A contract is established when the supplier accepts the offer. Acceptance may be signified by beginning work or by returning a signed copy of the order (rare)

66. General In making purchases, contracting officers should – Include related items in one solicitation and make award on an “all-or-none’’ or “multiple award’’ basis provided suppliers are so advised when quotations or offers are requested; Incorporate provisions and clauses by reference in solicitations and in awards; Make maximum effort to obtain trade and prompt payment, and Use bulk funding to the maximum extent practicable

67. Source List Contracting officers should use the System for Award Management (SAM) database as their primary sources of vendor information. Authorized individuals do not have to obtain individual quotations for each purchase. Standing price quotations may be used if the pricing information is current and the Government obtains the benefit of maximum discounts before award The contracting officer must not solicit quotations based on personal preference or restrict solicitation to suppliers of well-known and widely distributed makes or brands.

68. Publicizing The contracting officer must comply with the public display and synopsis requirements of 5.101 and 5.203 unless an exception in 5.202 applies. When acquiring commercial items or supplies or services, the contracting officer may use a combined synopsis and solicitation, but must include enough information to permit suppliers to develop quotations or offers.

69. Soliciting Competition The CO shall solicit quotations orally to the maximum extent practicable, if the acquisition does not exceed the simplified acquisition threshold. If obtaining electronic or oral quotations is uneconomical or impracticable, the CO should issue paper solicitations for contract actions likely to exceed $30,000, or construction requirements exceeding $2,000. Options may be included in solicitations, but the aggregate value of the acquisition and all options cannot exceed the dollar threshold for use of simplified acquisition procedures.

70. Evaluation of Quotes or Offers The contracting officer has broad discretion in fashioning evaluation procedures. The procedures prescribed in parts 14 and 15 are not mandatory, and at his discretion, one or more, but not necessarily all, of the evaluation procedures in part 14 or 15 may be used. Unless prohibited, agencies shall not unfavorably evaluate an offer because it includes telecommuting unless decided in advance that it poses a risk to the contracting requirements being met.

71. Award and Documentation Any file documentation and retention should be kept to a minimum.  For oral solicitations, the names of the suppliers contacted and the prices and other terms and conditions quoted by each is sufficient.  For written solicitations not exceeding the SAT, limit written records of solicitations or offers to notes or abstracts to show prices, delivery, references to printed price lists used, the supplier or suppliers contacted, and other pertinent data. Notification  For acquisitions that do not exceed the SAT and for which automatic notification is not provided through a widespread electronic public notice, notification to unsuccessful suppliers shall be given only if requested or required by 5.301.

72. Micro Purchases The Government-wide commercial purchase card is the preferred method to purchase and to pay for micro-purchases Those purchases are exempt from verification in the CCR database as to whether the contractor has a delinquent debt. Micro-purchases do not require provisions or clauses, except as provided at 4.1105 and 32.1110.

73. Micro Purchases To the extent practicable, micro-purchases shall be distributed equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive quotations if the contracting officer or individual appointed in accordance with 1.603-3(b) considers the price to be reasonable. The administrative cost of verifying the reasonableness of the price for purchases may more than offset potential savings from detecting instances of overpricing.

74. Purchase Orders Except as provided under the unpriced purchase order method (13.302-2), purchase orders generally are issued on a fixed-price basis. They shall:  specify the quantity of supplies or scope of services ordered, contain a determinable day by which delivery or performance is required,  provide for inspection (as prescribed in part 46), typically at destination (source inspection should only be specified if required by part 46),  and include any trade and prompt payment discounts that are offered.

75. Unpriced Purchase Orders An unpriced PO is an order for supplies or services, the price of which is not established at the time of issuance of the order. It may only be used when:  It is impractical to obtain pricing in advance, and  Is for repairs to equipment requiring disassembly to determine the nature and extent of repairs, material available from only one source and for which cost cannot readily be established; or supplies or services for which prices are known to be competitive, but exact prices are not known (e.g., miscellaneous repair parts, maintenance agreements). A realistic monetary limitation, either for each line item or for the total order, shall be placed on each unpriced purchase order, and it shall be an obligation subject to adjustment when the firm price is established.

76. Acceptance and Modification of Purchase Orders When a binding contract between parties is required before performance commences, the CO shall require written acceptance of the PO by the contractor. A contractor’s written acceptance of PO mods may only be required if it is determined by the CO as necessary to ensure the contractor’s compliance with the order as revised, or if required by agency regulations.

77. Termination of Purchase Orders If a purchase order that has been accepted in writing by the contractor is to be terminated, the CO shall process the termination in accordance with 12.403 and 52.212-4 (l) or (m) for commercial items, or Part 49 or 52.213-4 for other than commercial items. If a purchase order that has not been accepted in writing by the contractor is to be canceled, the CO shall notify the contractor in writing that the purchase order has been canceled, and request the contractor’s written acceptance of the cancellation. If a purchase order that has been accepted in writing by the contractor is to be terminated, the CO shall process the termination in accordance with 12.403 and 52.212-4 (l) or (m) for commercial items, or Part 49 or 52.213-4 for other than commercial items. If a purchase order that has not been accepted in writing by the contractor is to be canceled, the CO shall notify the contractor in writing that the purchase order has been canceled, and request the contractor’s written acceptance of the cancellation.

78. Clauses The CO may use clause 52.213-4 Terms and Conditions – Simplified Acquisitions (other than commercial items) in those exceeding the micro- purchase threshold that are for other than commercial items. This clause is a compilation of the most commonly used clauses that apply to simplified acquisitions, and may be modified to fit the individual acquisition.

79. Blanket Purchase Agreements A BPA is a simplified method of filling anticipated repetitive needs for supplies or services by establishing “charge accounts” with qualified sources of supply. They do not exempt an agency from the responsibility for keeping obligations and expenditures within available funds, nor does it justify purchasing from only one source or avoiding small business set-asides. BPAs may be established with more than one supplier for supplies or services of the same type to provide maximum competition, a single firm from which numerous individual purchases at or below the SAT will likely be made in a given period, or federal supply schedule contractors.

80. Blanket Purchase Agreements A BPA may be established when: There is a wide variety of items or services that are purchased, but the exact items, quantities, and delivery requirements are not known in advance and may vary considerably. There is a need to provide commercial sources of supply for one or more offices or projects in a given area that do not have or need authority to purchase otherwise. The use of a BPA would avoid the writing of numerous purchase orders. There is no existing requirements contract for the same supply or service that the contracting activity is required to use. An individual BPA is considered complete when the purchases under it equal its total dollar limitation, if any, or when its stated time period expires.

81. Imprest Funds Imprest funds and third party drafts may be used to acquire and to pay for supplies or services. Imprest funds or third party drafts may be used for purchases when the imprest fund transaction does not exceed $500 or such other limits as have been approved by the agency head; and the third party draft transaction does not exceed $2,500, unless authorized at a higher level. Typically, purchases should be placed orally and without soliciting competition if prices are considered reasonable. Clauses are not required for purchases using imprest funds or third party drafts.

82. SF 44 Purchases The SF 44, Purchase Order -- Invoice -- Voucher, is a multipurpose pocket-size purchase order form designed primarily for on-the-spot, over-the-counter purchases of supplies and non-personal services while away from the purchasing office or at isolated activities. The amount of the purchase must be at or below the micro- purchase threshold, except for purchases made under unusual and compelling urgency or in support of contingency operations. The supplies or services must be immediately available, and only one delivery and one payment will be made. Its use must be more economical and efficient than use of other simplified acquisition procedures, and clauses are not required.

83. SEALED BIDDING FAR Part 14

84. Subpart 14.1 -- Use of Sealed Bidding Sealed bidding is a method of contracting that employs competitive bids, public opening of bids, and awards. The following steps are involved:  Preparation of invitations for bids  Publicizing the invitation for bids.  Submission of bids.  Evaluation of bids. Bids shall be evaluated without discussions.  Contract award. Contracting officers shall solicit sealed bids if –  Time permits the solicitation, submission, and evaluation of sealed bids;  The award will be made on the basis of price and other price-related factors;  It is not necessary to conduct discussions with the responding offerors about their bids; and  There is a reasonable expectation of receiving more than one sealed bid

85. Subpart 14.2 -- Solicitation of Bids Uniform contract format or Simplified format may be used  Must check (x) block for IFB on Offer and Award Must include description or specifications for product/service solicited. Clauses and Provisions – insert as prescribed  52.214-4, False Statements in Bids  2.214-5, Submission of Bids  52.214-6, Explanation to Prospective Bidders  52.214-7, Late Submissions, Modifications, and Withdrawals of Bids  52.214-10, Contract Award - Sealed Bidding or 52.214-19, Contract Award -- Sealed Bidding -- Construction,

86. Subpart 14.2 -- Solicitation of Bids Rules for soliciting bids  Bid time – Reasonable time consistent with needs of the Government – typically 30 days if synopsizing in FBO (>25K)  Announcement / Publicizing  Using the FBO  Posting in public place  Trade journals/publications  Pre-solicitation notice leading to a bidders list.  Method for Solicitation  Direct mail  Copy available for reproduction or distribution  Electronic commerce  Means of response  Written bid in sealed envelope most common  Electronic commerce  Fax or telegraphic if allowed by CO

87. Subpart 14.2 -- Solicitation of Bids Pre-Bid Meeting may be conducted to clarify solicitation requirements  Not an opportunity to prop-up a flawed solicitation Amendments to solicitation – SF30  May need to extend bid due date to allow time to incorporate information in amendment Solicitation may be cancelled before bid opening  Announce in FBO  Bids received shall be returned unopened  Prospective bidders should be given the right to bid on any re- solicitation Communications with bidders  Any information provided to one bidder must be provided to all – preferably at the same time.  Prohibition

88. Subpart 14.3 -- Submission of Bids Means of delivery  Postal / Commercial delivery  Hand delivered  Electronic submittal only if permitted by CO (e.g., fax, telephone, telegraph. Bids must be timely  Must arrive on or before the time specified at the address or location identified in the solicitation documents.  Time and date stamped by Government

89. Subpart 14.3 -- Submission of Bids Bids must be responsive  Must comply in all material respects with the invitation for bids  Bids should be filled out, executed, and submitted in accordance with the instructions in the invitation  Acknowledgement of amendments  Bid bond (if required)  All attachments or supporting documentation included Must be properly submitted  E-mail, fax and telegraphic bids need not be accepted if not specified in the solicitation Modification or withdrawal of bids  Permitted at any time up to the bid due (“closing”) date/time  If time not specified then bids close at 4:30pm on the prescribed date

90. Subpart 14.3 -- Submission of Bids Late Bids, Modifications and withdrawals  Held unopened until after award  Government must notify bidders of late bid  Bid bond is returned.  CO may choose to accept a late bid if  Doing so does not delay the award  If it was transmitted through an electronic commerce method authorized by the IFB, it was received at the initial point of entry to the Government infrastructure not later than 5:00 p.m. one working day prior to the date specified for receipt of bids;  There is acceptable evidence to establish that it was received at the Government installation designated for receipt of bids and was under the Government’s control prior to the time set for receipt of bids

91. Subpart 14.4 -- Opening of Bids and Award of Contract Receipt of proposals  Must be secured prior to bid opening – held in secure file cabinet, safe, or Bid Box  Procedure for inadvertently opened proposals  Procedure to open bids if identifying information not on exterior of bid package. Bid opening is a public event  Bids opened by the Bid Opening Officer  Bid opening is publicly announced (usually in the solicitation or pre-solicitation notice on FBO)

92. Subpart 14.4 -- Opening of Bids and Award of Contract Opening Process  Opening official announcement (greeting, the time is ___, Solicitation number/purpose, bidding is now closed, introductions)  Usually assisted by abstractor  Each bid is numbered and opened in turn  Each bid is examined for responsiveness (e.g., were amendments acknowledged, bid bond present, etc.)  Each bid is read aloud and recorded by the abstractor  Government estimate is opened, read aloud, and recorded  Opening official announces that the bid opening is complete. No statement need be made concerning the winner or apparent winner at this time.  Bids speak for themselves  Bids are subject to review prior to award  Opening official signs the abstract and a copy is available for public inspection.

93. Subpart 14.4 -- Opening of Bids and Award of Contract Rejection of bids  Individual  does not conform to the applicable specifications  fails to conform to the delivery schedule  conditioned (all-or-none is OK) that affects price, quality or delivery.  unreasonable as to price (in total or for an individual line item)  materially unbalanced  bidder deemed not responsible or debarred  bid security not provide or improper  All  Government requirement no longer exists  All bids exceed the Government estimate (i.e., are not reasonable)  Specifications revised or inadequate  No responsive bid from a responsible bidder  Collusion among bidders  Less expensive if performed by Government (A-76)  In the interest of the Government

94. Subpart 14.4 -- Opening of Bids and Award of Contract Waiver of minor informalities by CO  Matter of form rather than substance  Does not prejudice other bidder  Examples: failed to acknowledge amendment, did not sign bid, etc. Mistakes in bids – Before award  Obvious clerical errors – correct through verification  Cannot be used to cure non-responsive bids  Correction may be initiated by bidder after opening but subject to significant restrictions – especially if it would displace lower bidder.  Agency may prohibit low bidder from withdrawing (low) bid but may allow bidder to correct.  Bidders notified of mistakes and asked to correct through ‘verification of bid’ process  Price is exceptionally low compared to other bidders and Government estimate  Other information that the CO believes indicates an error in the bid.

95. Subpart 14.4 -- Opening of Bids and Award of Contract Mistakes in Bids – After Award  Governed by FAR 33.2 (Disputes and Appeals)  Decision documented via CO’s Final Decision  Work continues without interruption while issue is resolved  Actions include rescission or reforming to  Eliminate item(s) involved  Adjust the contract price – but may not displace next low bidder  Clear and convincing Evidence that a mistake in bid was made. In addition, it must be clear that the mistake was—  Mutual, or  If unilaterally made by the contractor, so apparent as to have charged the contracting officer with notice of the probability of the mistake.

96. Subpart 14.4 -- Opening of Bids and Award of Contract Evaluation of bids  Responsive to the solicitation  Cost and cost related factors  Single vs. multiple awards  Prompt payment discounts  Schedule  Additive items  Fair and reasonable price  Balanced pricing  Determination of bidder responsibility  Equal low bids resolved by 14.408-6 with preference to small business Award made using the appropriate document (SF 1447, SF 33 SF26, SF 1442, OF 347) Note: the bid constitutes an offer which may be accepted by the Government to form a binding contract. Notice of Award  FBO  To bidder

97. Subpart 14.5 -- Two-Step Sealed Bidding Step One  Request for, submission, evaluation, and (if necessary) discussion of a technical proposal  Resolves conformity to the technical requirements and any questions concerning the specifications Step Two  Sealed bids as per the above

98. FAR PART 15 – CONTRACTING BY NEGOTIATION FAR PART 19 – SMALL BUSINESS PROGRAMS Coming Next Week

99. Class #5 SECTION Four, Pages 55 thru 63 of the Study Guide SECTION Five, Pages 65 - 72