Acquisition regulations: Contracting by negotiation,
[Federal Register: December 28, 1998 (Volume 63, Number 248)]
[Proposed Rules]
[Page 71415-71424]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28de98-25]
ENVIRONMENTAL PROTECTION AGENCY
48 CFR Parts 1503, 1515, and 1552
[FRL-6205-6]
Acquisition Regulation: Contracting by Negotiation
AGENCY: Environmental Protection Agency.
ACTION: Proposed rule.
SUMMARY: The Environmental Protection Agency (EPA) is issuing this proposed rule to amend the EPA Acquisition Regulation (EPAAR) (48 CFR Chapter 15) so that it will conform to the Federal Acquisition Regulation (FAR 48 CFR Chapter 1), as revised by Federal Acquisition Circular (FAC) 97-02.
DATES: Comments are requested no later than January 27, 1999.
ADDRESSES: Written comments should be submitted to the contact listed below at the following address: U.S. Environmental Protection Agency, Office of Acquisition Management (3802R), 401 M Street, SW, Washington, D.C. 20460. Comments and data may also be submitted electronically by sending electronic mail (e-mail) to: Senzel.Louise@epamail.epa.gov. Electronic comments must be submitted as an ASCII file avoiding the use of special characters and any form of encryption. Comments and data will also be accepted on 3.5'' high density IBM-compatible formatted disks in WordPerfect in 6.1 format or ASCII file format. No Confidential Business Information (CBI) should be submitted through e- mail. Electronic comments on this rule may be filedon-line at many Federal Depository Libraries.
FOR FURTHER INFORMATION CONTACT: Louise Senzel, U.S. EPA, Office of Acquisition Management, (3802R), 401 M Street, SW, Washington, D.C. 20460, Telephone: (202) 564-4367.
SUPPLEMENTARY INFORMATION:
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Background
FAC 97-02, published in the Federal Register (62 FR 51224) on September 30, 1997, completely revised FAR Part 15, Contracting by Negotiation. The final rule allowed agencies to delay implementation until January 1, 1998. EPA began implementation of the revised Part 15 as of December 19, 1997. The EPAAR is in substantive compliance with the revised FAR, but extensive redesignation of EPAAR subparts and sections is required for structural conformance. Accordingly, EPAAR Part 1515, Contracting by Negotiation, is revised in its entirety, and parts 1503, Improper Business Practices and Personal Conflicts of Interest, and 1552, Solicitation Provisions and Contract Clauses, are amended.
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Executive Order 12866
The proposed rule is not a significant regulatory action for the purposes of Executive Order 12866; therefore, no review is required by the Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB).
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Paperwork Reduction Act
The Paperwork Reduction Act does not apply because this proposed rule does not contain information collection requirements that require the approval of OMB under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.)
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Regulatory Flexibility Act
The EPA certifies that this proposed rule does not exert a significant economic impact on a substantial number of small entities. The requirements to contractors under the rule impose no reporting, record-keeping, or any compliance costs.
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Unfunded Mandates
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess their regulatory actions on State, local, and tribal governments, and the private sector. This proposed rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in one year. Any private sector costs for this action relate to paperwork requirements and associated expenditures that are far below the level established for UMRA applicability.
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Thus, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.
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Executive Order 13045
Protection of Children from Environmental Health Risks and Safety Risks (6 FR 19885, April 23, 1997), applies to any rule that: (1) is determined to be economically significant as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.
EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regultion. This rule is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.
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Executive Order 12875
Under Executive Order 12875, EPA may not issue a regulation that is not required by statute and creates a mandate upon a State, local or tribal government, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by those governments. If the mandate is unfunded, EPA must provide OMB a description of the extent of EPA's prior consultation with representatives of affected State, local and tribal governments, the nature of their concerns, copies of any written communications from the governments, and a statement supporting the need to issue the regulation. In addition, Executive Order 12875 requires EPA to develop an effective process permitting elected officials and other representatives of State, local and tribal governments ``to provide meaningful and timely input in the development of regulatory proposals containing significant unfunded mandates.''
This proposed rule does not create a mandate on State, local or tribal governments. The rule does not impose any enforceable duties on these entities. Accordingly, the requirements of section 1(a) of Executive Order 12875 do not apply to this rule.
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Executive Order 13084
Under Executive Order 13084, EPA may not issue a regulation that is not required by statute, that significantly or uniquely affects the communities of Indian tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by the tribal governments. If the mandate is unfunded, EPA must provide to the OMB, in a separately identified section of the preamble to the rule, a description of the extent of EPA's prior consultation with representatives of affected tribal governments, a summary of the nature of their concerns, and a statement supporting the need to issue the regulation. In addition, Executive Order 13084 requires EPA to develop an effective process permitting elected and other representatives of Indian tribal governments ``to provide meaningful and timely input in the development of regulatory policies on matters that significantly or uniquely affect their communities.''
The proposed rule does not significantly or uniquely affect the communities of Indian tribal governments. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.
Authority: The provisions of this regulation are issued under 5 U.S.C. 301; Sec. 205(c),63 Stat. 390, as amended, 40 U.S.C. 486(c).
List of Subjects in 48 CFR Parts 1503, 1515, and 1552
Government procurement.
Therefore, 48 CFR Chapter 15 is amended as set forth below:
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The authority citation for Parts 1503, 1515, and 1552 continues to read as follows:
Authority: Sec. 205(c), 63 Stat. 390, as amended, 40 U.S.C. 486(c).
PART 1503--[AMENDED]
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Part 1503 is amended by revising subpart 1503.1 to read as follows:
Subpart 1503.1--Safeguards
Sec. 1503.101-370 Personal conflicts of interest. 1503.104-5 Disclosure, protection, and marking of contractor bid or proposal information and source selection information.
Subpart 1503.1--Safeguards
1503.101-370 Personal conflicts of interest.
(a) Each EPA employee (including special employees) engaged in source evaluation and selection is required to be familiar with the provisions of 40 CFR Part 3 regarding personal conflicts of interest. The employee shall inform the Source Selection Authority (SSA) in writing if his/her participation in the source evaluation and selection process could be interpreted as a possible or apparent conflict of interest. The SSA will consult with appropriate Agency officials prior to the SSA's determination. The SSA shall relieve any EPA employee who has a conflict of interest of further duties in connection with the evaluation and selection process.
(b) Each EPA employee (including special employees, as defined by 1503.600-71 (b)) involved in source evaluation and selection is required to comply with the Office of Government Ethics ethics provisions at 5 CFR Part 2635.
1503.104-5 Disclosure, protection, and marking of contractor bid or proposal information and source selection information.
(a)(1) The Chief of the Contracting Office (CCO) is the designated official to make the decision whether support contractors are used in proposal evaluation (as authorized at FAR 15.305(c) and as restricted at FAR 37.203(d)).
(2) The following written certification and agreement shall be obtained from the non-Government evaluator prior to the release of any proposal to that evaluator:
``Certification on the Use and Disclosure of Proposals''
RFP #: --------------------------------------------------------------- Offeror: -------------------------------------------------------------
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I hereby certify that to the best of my knowledge and belief, no conflict of interest exists that may diminish my capacity to perform an impartial, technically sound, objective review of this proposal(s) or otherwise result in a biased opinion or unfair competitive advantage.
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I agree to use any proposal information only for evaluation purposes. I agree not to copy any information from the proposal(s), to use my best effort to safeguard such information physically, and not to disclose the contents of nor release any information relating to the proposal(s) to anyone outside of the evaluation team assembled for this acquisition or individuals designated by the Contracting Officer.
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I agree to return to the Government all copies of proposals, as well as any abstracts, upon completion of the evaluation.
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(End of Certificate)
(b) Information contained in proposals will be protected and disclosed to the extent permitted by law, and in accordance with FAR 3.104-5, 15.207, and Agency procedures at 40 CFR Part 2.
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Part 1515 is revised as follows.
PART 1515--CONTRACTING BY NEGOTIATION
Sec. 1515.000 Scope of part.
Subpart 1515.2--Solicitation and Receipt of Proposals and Information
1515.209 Solicitation provisions and contract clauses.
Subpart 1515.3--Source Selection
1515.302 Applicability. 1515.303 Responsibilities. 1515.305 Proposal evaluation. 1515.305-70 Scoring plans. 1515.305-71 Documentation of proposal evaluation. 1515.305-72 Release of cost information. 1515.308-71 Documentation of source selection.
Subpart 1515.4--Contract Pricing
1515.404-4 Profit. 1515.404-470 Policy. 1515.404-471 EPA structured approach for developing profit or fee objectives. 1515.404-472 Other methods. 1515.404-473 Limitations. 1515.404-474 Waivers. 1515.404-475 Cost realism. 1515.408 Solicitation provisions and contract clauses.
Subpart 1515.6--Unsolicited Proposals
1515.604 Agency points of contact. 1515.606-70 Contracting methods.
PART 1515--CONTRACTING BY NEGOTIATION
1515.000 Scope of part.
This part implements and supplements FAR part 15. It prescribes the Environmental Protection Agency policies and procedures for contracting for supplies and services by negotiation.
Subpart 1515.2--Solicitation and Receipt of Proposals and Information
1515.209 Solicitation provisions and contract clauses.
In addition to those provisions prescribed at FAR 15.209 and in accordance with FAR 15.203(a)(4), the contracting officer shall identify and include the evaluation factors that will be considered in making the source selection and their relative importance in each solicitation.
(a) The contracting officer shall insert the provisions at 1552.215-70, ``EPA Source Evaluation and Selection Procedures-- Negotiated Procurement'' and either: the provision at 1552.215-71, ``Evaluation Factors for Award,'' where all evaluation factors other than cost or price when combined are significantly more important than cost or price; or the provision in Alternate I to 1552.215-71, where all evaluation factors other than cost or price when combined are significantly less important than cost or price; or the provision in Alternate II to 1552.215-71, where all evaluation factors other than cost or price when combined are approximately equal to cost or price; or Alternate III to 1552.215-71 where award will be made to the offeror with the lowest-evaluated cost or price whose proposal meets or exceeds the acceptability standards for non-cost factors.
(b) Evaluation factors and significant subfactors should be prepared in accordance with FAR 15.305 and inserted into paragraph (b) of the provision at 1552.215-71, Alternate I, Alternate II, and if used, in Alternate III.
Subpart 1515.3--Source Selection
1515.302 Applicability.
FAR subpart 15.3 and this subpart apply to the selection of source or sources in competitive negotiation acquisitions in excess of the simplified acquisition threshold, except architect-engineering services which are covered in 1536.6.
1515.303 Responsibilities.
The Source Selection Authority (SSA) shall be established at the levels specified below.
(1) Acquisitions having a potential value exceeding $25,000,000: CCO.
(2) Acquisitions having a potential value exceeding $10,000,000 to $25,000,000: To be determined by the CCO, unless otherwise restricted in his/her delegation of procurement authority.
(3) Acquisitions having a potential value of $10,000,000 or less: The contracting officer.
1515.305 Proposal evaluation.
1515.305-70 Scoring plans.
When trade-offs are performed (in accordance with FAR 15.101-1), the evaluation of technical and past performance shall be accomplished using the following scoring plan or one specifically developed for the solicitation, e.g., other numeric, adjectival, color rating systems, etc.
Scoring Plan
Value
Descriptive statement
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The factor is not addressed, or is totally deficient and without merit. 1............................... The factor is addressed, but contains deficiencies and/or weaknesses that can be corrected only by major or significant changes to relevant portions of the proposal, or the factor is addressed so minimally or vaguely that there are widespread information gaps. In addition, because of the deficiencies, weaknesses, and/or information gaps, serious concerns exist on the part of the technical evaluation team about the offeror's ability to perform the required work. 2............................... Information related to the factor is incomplete, unclear, or indicates an inadequate approach to, or understanding of the factor. The technical evaluation team believes there is question as to whether the offeror would be able to perform satisfactorily. 3............................... The response to the factor is adequate. Overall, it meets the specifications and requirements, such that the technical evaluation team believes that the offeror could perform to meet the Government's minimum requirements. 4............................... The response to the factor is good with some superior features. Information provided is generally clear, and the demonstrated ability to accomplish the technical requirements is acceptable with the possibility of more than adequate performance. 5............................... The response to the factor is superior in most features.
1515.305-71 Documentation of proposal evaluation.
In addition to the information required by FAR 15.305(a)(3), the technical evaluation documentation shall include:
(a) Score sheets prepared by each individual team member must be made available upon the contracting officer's request. For contracts valued at $10,000,000 or less, the technical evaluation may be recorded on the short form technical evaluation format (EPA Form 1900-61) or another form specifically developed for the solicitation; and
(b) A statement that the respective team members are free from actual or potential personal conflicts of interest, and are in compliance with the Office of Government Ethics ethics provisions at 5 CFR part 2635.
(c) Any information which might reveal that an offeror has an actual or
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potential organizational conflict of interest.
(d) Any documentation related to exchanges with individual offerors.
1515.305-72 Release of cost information.
(a) In accordance with FAR 15.305(a)(4), the contracting officer may release the cost/price proposals to those members of the evaluation team who are evaluating proposals at his/her discretion.
(b) These individuals would then use this information to perform a cost realism analysis as described in FAR 15.404-1(d). Any inconsistencies between the proposals and the solicitation requirements and/or any inconsistencies between the cost/price and other than cost/ price proposals should be identified.
1515.308-71 Documentation of source selection.
In addition to the information required by FAR 15.308, the source selection decision shall include:
(a) When there is only one proposal received or only one proposal in the competitive range, the contracting officer shall examine the solicitation to determine if it was unduly restrictive or flawed. As part of the source selection decision, the contracting officer shall address at a minimum, the following five factors: whether the requirement could have been broken up into smaller components; whether the solicitation provided adequate response time; whether the requirement could have been satisfied with reduced staffing levels (discussion may be combined with the first factor); if applicable, whether the work required on-site could otherwise be performed at a contractor's facility, avoiding the cost and logistical implications of relocating employees; and whether the geographical area of consideration was either too narrow or too broad, so as to adversely impact competition. If the contracting officer determines that the solicitation requirements unduly restrict competition, the contracting officer shall consider making appropriate changes to the solicitation, canceling the solicitation, and reissuing the solicitation incorporating the appropriate changes. For 8(a) competitive or small business competitive set-asides, if the contracting officer in consultation with the Office of Small and Disadvantaged Business Utilization determines that the solicitation requirements unduly restrict competition, the contracting officer shall consider making appropriate changes to the solicitation, canceling the solicitation, and reissuing the solicitation incorporating the appropriate changes.
(b) The contracting officer shall provide a copy of any source selection decision that includes an analysis of the five factors described in paragraph (a) of this section to the Competition Advocate after approval of the decision by the designated Source Selection Authority.
Subpart 1515.4--Contract Pricing
Sec. 1515.404-4 Profit.
This section implements FAR 15.404-4 and prescribes the EPA structured approach for establishing profit or fee prenegotiation objectives.
1515.404-470 Policy.
(a) The Agency's policy is to utilize profit to attract contractors who possess talents and skills necessary to the accomplishment of the objectives of the Agency, and to stimulate efficient contract performance. In negotiating profit/fee, it is necessary that all relevant factors be considered, and that fair and reasonable amounts be negotiated which give the contractor a profit objective commensurate with the nature of the work to be performed, the contractor's input to the total performance, and the risks assumed by the contractor.
(b) The purpose of EPA's structured approach is:
(1) To provide a standard method of evaluation;
(2) To ensure consideration of all relevant factors;
(3) To provide a basis for documentation and explanation of the profit or fee negotiation objective; and
(4) To allow contractors to earn profits commensurate with the assumption of risk.
(c) The profit-analysis factors prescribed in the EPA structured approach for analyzing profit or fee include those prescribed by FAR 15.404(d)(1), and additional factors authorized by FAR 15.404(d)(2) to foster achievement of program objectives. These profit or fee factors are prescribed in 1515.404-471.
1515.404-471 EPA structured approach for developing profit or fee objectives.
(a) General. To properly reflect differences among contracts, and to select an appropriate relative profit/fee in consideration of these differences, weightings have been developed for application by the contracting officer to standard measurement bases representative of the prescribed profit factors cited in FAR 15.404(d) and EPAAR 1515.404- 471(b)(1). Each profit factor or subfactor, or its components, has been assigned weights relative to their value to the contract's overall effort, and the range of weights to be applied to each profit factor.
(b)(1) Profit/fee factors. The factors set forth below, and the weighted ranges listed after each factor, shall be used in all instances where the profit/fee is negotiated.
Contractor's Input to Total Performance
Weight range (percent)
Direct material............................................. 1 to 4 Professional/technical labor................................ 8 to 15 Professional/technical overhead............................. 6 to 9 General labor............................................... 5 to 9 General overhead............................................ 4 to 7 Subcontractors.............................................. 1 to 4 Other direct costs.......................................... 1 to 3 General and administrative expenses......................... 5 to 8 Contractor's assumption of contract cost risk............... 0 to 6
(2) The contracting officer shall first measure the ``Contractor's Input to Total Performance'' by the assignment of a profit percentage within the designated weight ranges to each element of contract cost. Such costs are multiplied by the specific percentages to arrive at a specific dollar profit or fee.
(3) The amount calculated for facilities capital cost of money (FCCM) shall not be included as part of the cost base for computation of profit or fee. The profit or fee objective shall be reduced by an amount equal to the amount of facilities capital cost of money allowed. A complete discussion of the determination of facilities capital cost of money and its application and administration is set forth in FAR 31.205-10, and the Appendix to the FAR (see 48 CFR 9904.414).
(4) After computing a total dollar profit or fee for the Contractor's Input to Total Performance, the contracting officer shall calculate the specific profit dollars assigned for cost risk and performance. This is accomplished by multiplying the total Government cost objective, exclusive of any FCCM, by the specific weight assigned to cost risk and performance. The contracting officer shall then determine the profit or fee objective by adding the total profit dollars for the Contractor's Input to Total Performance to the specific dollar profits assigned to cost risk and performance. The contracting officer shall use EPA Form 1900-2 in hardcopy or electronic copy equivalent to facilitate the calculation of the profit or fee objective.
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(5) The weight factors discussed above are designed for arriving at profit or fee objectives for other than nonprofit and not-for-profit organizations. Nonprofit and not-for-profit organizations are addressed as follows:
(i) Nonprofit and not-for-profit organizations are defined as those business entities organized and operated:
(A) Exclusively for charitable, scientific, or or educational purposes;
(B) Where no part of the net earnings inure to the benefit of any private shareholder or individual;
(C) Where no substantial part of the activities is for propaganda or otherwise attempting to influence legislation or participating in any political campaign on behalf of any candidate for public office; and
(D) Which are exempt from Federal income taxation under Section 51 of the Internal Revenue Code.
(ii) For contracts with nonprofit and not-for-profit organizations where fees are involved, special factor of -3 percent shall be assigned in all cases.
(c) Assignment of values to specific factors--
(1) General. In making a judgment on the value of each factor, the contracting officer should be governed by the definition, description, and purpose of the factors, together with considerations for evaluation set forth in this paragraph.
(2) Contractor's input to total performance. This factor is a measure of how much the contractor is expected to contribute to the overall effort necessary to meet the contract performance requirements in an efficient manner. This factor, which is separate from the contractor's responsibility for contract performance, takes into account what resources are necessary, and the creativity and ingenuity needed for the contractor to perform the statement of work successfully. This is a recognition that within a given performance output, or within a given sales dollar figure, necessary efforts on the part of individual contractors can vary widely in both value, quantity, and quality, and that the profit or fee objective should reflect the extent and nature of the contractor's contribution to total performance.
Greater profit opportunity should be provided under contracts requiring a high degree of professional and managerial skill and to prospective contractors whose skills, facilities, and technical assets can be expected to lead to efficient and economical contract performance. The evaluation of this factor requires an analysis of the cost content of the proposed contract as follows:
(i) Direct material (purchased parts and other material). (A) Analysis of these cost items shall include an evaluation of the managerial and technical effort necessary to obtain the required material. This evaluation shall include consideration of the number of orders and suppliers, and whether established sources are available or new sources must be developed. The contracting officer shall also determine whether the contractor will, for example, obtain the materials by routine orders or readily available supplies (particularly those of substantial value in relation to the total contract costs), or by detailed subcontracts for which the prime contractor will be required to develop complex specifications involving creative design.
(B) Consideration should be given to the managerial and technical efforts necessary for the prime contractor to administer subcontracts, and to select subcontractors, including efforts to break out subcontracts from sole sources, through the introduction of competition.
(C) Recognized costs proposed as direct material costs such as scrap charges shall be treated as material for profit evaluation.
(D) If intracompany transfers are accepted at price, in accordance with FAR 31.205-26(e), they should be excluded from the profit or fee computation. Other intracompany transfers shall be evaluated by individual components of cost, i.e., material, labor, and overhead.
(ii) Professional/Technical and General Labor. Analysis of labor should include evaluation of the comparative quality and level of the talents and experience to be employed. In evaluating labor for the purpose of assigning profit dollars, consideration should be given to the amount of notable scientific talent or unusual or scarce talent needed, in contrast to journeyman effort or supporting personnel. The diversity, or lack thereof, of scientific and engineering specialties required for contract performance, and the corresponding need for supervision and coordination, should also be evaluated.
(iii) Overhead and general and administrative expenses. (A) Where practicable, analysis of these overhead items of cost should include the evaluation of the individual elements of these expenses, and how much they contribute to contract performance. This analysis should include a determination of the amount of labor within these overhead pools, and how this labor would be treated if it were considered as direct labor under the contract. The allocable labor elements should be given the same profit consideration as if they were direct labor. The other elements of indirect cost pools should be evaluated to determine whether they are routine expenses such as utilities, depreciation, and maintenance, and therefore given less profit consideration.
(B) The contractor's accounting system need not break down its overhead expenses within the classification of professional/technical overhead, general overhead and general and administrative expenses.
(iv) Subcontractors. (A) Subcontract costs should be analyzed from the standpoint of the talents and skills of the subcontractors. The analysis should consider if the prime contractor normally should be expected to have people with comparable expertise employed as full-time staff, or if the contract requires skills not normally available in an employer-employee relationship. Where the prime contractor is using subcontractors to perform labor which would normally be expected to be done in-house, the rating factor should generally be at or near 1 percent. Where exceptional expertise is retained, or the prime contractor is participating in the mentor-protege program, the assigned weight should be nearer to the high end of the range.
(v) Other direct costs. The analysis of these costs should be similar to the analysis of direct material.
(3) Contractor's assumption of contract cost risk. (i) The risk of contract costs should be shifted to the fullest extent practicable to contractors, and the Government should assign a rating that reflects the degree of risk assumption. Evaluation of this risk requires a determination of the degree of cost responsibility the contractor assumes, the reliability of the cost estimates in relation to the task assumed, and the chance of the contractor's success or failure. This factor is specifically limited to the risk of contract costs. Thus, such risks of losing potential profits in other fields are not within the scope of this factor.
(ii) The first determination of the degree of cost responsibility assumed by the contractor is related to the sharing of total risk of contract cost by the Government and the contractor, depending on selection of contract type. The extremes are a cost-plus-fixed-fee contract requiring only that the contractor use its best efforts to perform a task, and a firm-fixed-price contract for a complex item. A cost-plus-fixed-fee contract would reflect a minimum assumption of cost responsibility by the
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contractor, whereas a firm-fixed-price contract would reflect a complete assumption of cost responsibility by the contractor. Therefore, in the first step of determining the value given for the contractor's assumption of contract cost risk, a lower rating would be assigned to a proposed cost-plus-fixed-fee best efforts contract, and a higher rating would be assigned to a firm-fixed-price contract.
(iii) The second determination is that of the reliability of the cost estimates. Sound price negotiation requires well-defined contract objectives and reliable cost estimates. An excessive cost estimate reduces the possibility that the cost of performance will exceed the contract price, thereby reducing the contractor's assumption of contract cost risk.
(iv) The third determination is that of the difficulty of the contractor's task. The contractor's task may be difficult or easy, regardless of the type of contract.
(v) Contractors are likely to assume greater cost risks only if the contracting officer objectively analyzes the risk incident to the proposed contract, and is willing to compensate contractors for it. Generally, a cost-plus-fixed-fee contract would not justify a reward for risk in excess of 1 percent, nor would a firm-fixed-price contract normally justify a reward of less than 4 percent. Where proper contract type selection has been made, the reward for risk by contract type would usually fall into the following percentage ranges:
Percentage Type of contract
ranges
Cost-plus-fixed-fee........................................ 0 to 1 Prospective price determination............................ 4 to 5 Firm-fixed-price........................................... 4 to 6
(A) These ranges may not be appropriate for all acquisitions. The contracting officer might determine that a basis exists for high confidence in the reasonableness of the estimate, and that little opportunity exists for cost reduction without extraordinary efforts. The contractor's willingness to accept ceilings on their burden rates should be considered as a risk factor for cost-plus-fixed-fee contracts.
(B) In making a contract cost risk evaluation in an acquisition that involves definitization of a letter contract, consideration should be given to the effect on total contract cost risk as a result of partial performance under a letter contract. Under some circumstances, the total amount of cost risk may have been effectively reduced by the existence of a letter contract. Under other circumstances, it may be apparent that the contractor's cost risk remained substantially as great as though a letter contract had not been used. Where a contractor has begun work under an anticipatory cost letter, the risk assumed is greater than normal. To be equitable, the determination of a profit weight for application to the total of all recognized costs, both those incurred and those yet to be expended, must be made with consideration to all relevant circumstances, not just to the portion of costs incurred or percentage of work completed prior to definitization.
1515.404-472 Other methods.
(a) Contracting officers may use methods other than those prescribed in 1515.404-470 for establishing profit or fee objectives under the following types of contracts and circumstances:
(1) Architect-engineering contracts;
(2) Personal service contracts;
(3) Management contracts, e.g., for maintenance or operation of Government facilities;
(4) Termination settlements;
(5) Services under labor-hour and time and material contracts which provide for payment on an hourly, daily, or monthly basis, and where the contractor's contribution constitutes the furnishing of personnel.
(6) Construction contracts; and
(7) Cost-plus-award-fee contracts.
(b) Generally, it is expected that such methods will:
(1) Provide the contracting officer with a technique that will ensure consideration of the relative value of the appropriate profit factors described under ``Profit Factors,'' in FAR 15.404-4(d) and
(2) Serve as a basis for documentation of the profit or fee objective.
1515.404-473 Limitations.
(a) In addition to the limitations established by statute (see FAR 15.404-4(b)(4)(i)), no administrative ceilings on profits or fees shall be established, except those identified in EPAAR (48 CFR) 1516.404- 273(b).
(b) The contracting officer shall not consider any known subcontractor profit/fee as part of the basis for determining the contractor profit/fee.
1515.404-474 Waivers.
Under unusual circumstances, the CCO may specifically waive the requirement for the use of the guidelines. Such exceptions shall be justified in writing, and authorized only in situations where the guidelines method is unsuitable.
1515.404-475 Cost realism.
The EPA structured approach is not required when the contracting officer is evaluating cost realism in a competitive acquisition.
1515.408 Solicitation provisions and contract clauses.
(a) In addition to those provisions and clauses prescribed in FAR 15.408, when an exception to FAR 15.403-1 does not apply and no other means available can be used to ascertain whether a fair and reasonable price can be determined, the contracting officer may insert in negotiated solicitations the provisions at--
(1) 1552.215-72 when requesting information other than cost or pricing data, for cost-reimbursable, level-of-effort-contracts. Use Alternate I for cost-reimbursable, level-of-effort contracts when the Government's requirement is for fully dedicated staff for a twelve month period(s) of performance and performance is on a Government facility; Alternate II for acquisitions for cost-reimbursable, level- of-effort contracts when the Government's requirement is for fully dedicated staff for a twelve month period(s) of performance and performance is not on a Government facility; and Alternate III if the Government's requirement is for the acquisition of supplies or equipment. The contracting officer may make revisions, deletions, or additions to 1552.215-72 and its Alternates I-III as needed to fit an individual acquisition, and
(2) 1552.215-73, General Financial and Organizational Information.
(b) If uncompensated overtime is proposed, the resultant contract shall include the provisions at FAR 52.237-10 and include the provision at 1552.215-74. The contracting officer may use provisions substantially the same as 1552.215-74 without requesting a deviation to the EPAAR.
Subpart 1515.6--Unsolicited Proposals
1515.604 Agency points of contact.
The Director, Grants Administration Division (3903R), EPA, 401 M Street, SW, Washington, D.C. 20460, is the Agency contact point established to coordinate the receipt and handling of unsolicited proposals.
1515.606-70 Contracting methods.
The Department of Housing and Urban Development-Independent Agencies Appropriation Act contains a requirement that none of the funds provided in the Act may be used for payment through grants or contracts to recipients that do not share in the cost
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of conducting research resulting from proposals that are not specifically solicited by the Government. Accordingly, contracts for research which result from unsolicited proposals shall provide for the contractor to bear a portion of the cost of performance for work subject to the Act. The extent of the cost sharing shall reflect the mutuality of interest of the contractor and the Government. Therefore, where there is no measurable gain to the performing organization, cost sharing is not required.
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In 1552.215-70, the section heading, the introductory text, and the provision heading are revised to read as follows:
1552.215-70 EPA Source Evaluation and Selection Procedures--Negotiated Procurements
As prescribed in 1515.209(a), insert the following provision:
1552.215-70 EPA SOURCE EVALUATION AND SELECTION PROCEDURES-- NEGOTIATED PROCUREMENTS (month and year of publication in the Federal Register) * * * * *
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In 1552.215-71 is revised to read as follows:
1552.215-71 Evaluation Factors for Award.
As prescribed in 1515.209(a), insert one of the following provisions.
EVALUATION FACTORS FOR AWARD (Month and Year of Publication in the Federal Register)
(a) The Government will make award to the responsible offeror(s) whose offer conforms to the solicitation and is most advantageous to the Government cost or other factors considered. For this solicitation, all evaluation factors other than cost or price when combined are significantly more important than cost or price.
(b) Evaluation factors and significant subfactors to determine quality of product or service:
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[End of provision]
EVALUATION FACTORS FOR AWARD (Month and Year of Publication in the Federal Register)
ALTERNATE I (Month and Year of Publication in the Federal Register)
(a) The Government will make award to the responsible offeror(s) whose offer conforms to the solicitation and is most advantageous to the Government cost or other factors considered. For this solicitation, all evaluation factors other than cost or price when combined are significantly less important than cost or price.
(b) Evaluation factors and significant subfactors to determine quality of product or service:
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[End of provision]
EVALUATION FACTORS FOR AWARD (Month and Year of Publication in the Federal Register)
ALTERNATE II (Month and Year of Publication in the Federal Register)
(a) The Government will make award to the responsible offeror(s) whose offer conforms to the solicitation and is most advantageous to the Government cost or other factors considered. For this solicitation, all evaluation factors other than cost or price when combined are approximately equal to cost or price.
(b) Evaluation factors and significant subfactors to determine the quality of product or service:
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[End of provision]
EVALUATION FACTORS FOR AWARD (Month and Year of Publication in the Federal Register)
ALTERNATE III (Month and Year of Publication in the Federal Register)
(a) The Government will make award to the offeror with the lowest-evaluated cost or price, whose proposal meets or exceeds the acceptability standards for non-cost factors. In the event that there are two or more technically acceptable, equal price (cost) offers, the Government will consider socioeconomic, environmental and other similar factors, as listed below in descending order of importance:
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(b) Factors and significant subfactors for technical acceptability evaluation:
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(c) Factors for past performance evaluation (optional):
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[End of provision]
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1552.215-73 is redesignated as 1552.215-72 and revised to read as follows:
1552.215-72 Instructions for the preparation of proposals.
As prescribed in 1515.408(a)(1) insert the following provision:
INSTRUCTIONS FOR THE PREPARATION OF PROPOSALS (Month and Year of Publication in the Federal Register)
(a) Other than cost proposal instructions.
(1) Submit proposal for than cost factors as a separate part of the total proposal package. Omit all cost or pricing details from this proposal.
(2) Special proposal instructions:
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(b) Cost or pricing proposal instructions. The offeror shall prepare and submit cost or pricing information data and supporting attachments in accordance with Table 15-2 of FAR 15.408. In addition to a hard copy of the information, to expedite review of the proposal, submit a 3.5‹bullet›‹bullet› high density IBM-compatible formatted computer disk containing the financial data required, if this information is available using a commercial spreadsheet program on a personal computer. Submit this information using LOTUS 1-2-3, if available. Identify which version of LOTUS used. If the offeror used another spreadsheet program, indicate the software program used to create this information. Offerors should include the formulas and factors used in calculating the financial data. Although submission of a computer disk will expedite review, failure to submit a disk will not affect consideration of the proposal.
(1) General--Submit cost or pricing information prepared in accordance with FAR Table 15-2, Instructions for Submitting Cost/ Price Proposals When Cost or Pricing Information Are Required and the following:
(i) Clearly identify separate cost or pricing information associated with any:
(A) Options to extend the term of the contract;
(B) Options for the Government to order incremental quantities; and/or
(C) Major tasks, if required by the special instructions.
(ii) If the contract schedule includes a ``Fixed Rate for Services'' clause, please provide in the cost proposal a schedule duplicating the format in the clause and include proposed fixed hourly rates per labor category for the base and any optional contract periods.
(iii) If the contract includes the clause at EPAAR 1552.232-73 ``Payments--Fixed-Rate Services Contract,'' or the clause at FAR 52.232-7, ``Payments Under Time and Materials and Labor-Hour Contracts,'' include in the cost proposal the estimated costs and burden rate to be applied to materials, other direct costs, or subcontracts. The Government will include these costs as part of its cost proposal evaluation.
(iv) If other divisions, subsidiaries, a parent or affiliated companies will perform work, provide the name and location of such affiliate and offeror's intercompany pricing policy. Separately identify costs and supporting data for each entity proposed.
(v) The realism of costs, including personnel compensation rates (including effective hourly rates due to uncompensated overtime) will be part of the proposal evaluation. Any reductions to proposed costs or differences between proposed and known EPA/DCAA recommended rates must be fully explained. If an offeror makes a reduction which makes its offer or portions of its offer below anticipated costs, the offeror shall identify where (i.e., which elements of costs) the proposed reductions will be made. Unsubstantiated rates may result in an upward or downward adjustment of the cost proposals to reflect more realistic costs. Based on this analysis, a projected cost for the offeror will be calculated to reflect the Government's estimate of the offeror's probable costs. Any inconsistency, whether real or apparent, between the promised performance and cost or price should be explained. The burden of proof for cost credibility rests with the offeror.
[[Page 71422]]
(2) Direct Labor.
(i) The direct technical labor hours (level-of-effort) appearing in the solicitation are for professional and technical labor only. These hours do not include management at a level higher than project management, e.g., corporate and day-to-day management, nor do they include clerical and support staff at a level lower than technician. If it is the offeror's normal practice to charge these types of costs as direct costs, include these costs along with an estimate of the directly chargeable labor-hours for these personnel. These direct charges are to be shown separately from the technical (level- of-effort) effort. If this type of effort is normally included in the offeror's indirect cost allocations, no estimate is required. However, direct charging of these on any resulting contract will not be allowed. Additionally the direct technical labor hours are the workable hours required by the Government and do not include release time (i.e., holidays, vacation, etc.) Submit the proposal utilizing the labor categories and distribution of the level-of-effort specified in the solicitation. These are approximate distribution levels and do not necessarily represent the actual levels which may be experienced during contract performance.
(ii) Explain the basis of the proposed labor rates, including a complete justification for all judgmental factors used to develop weights applied to company's category or individual rates that comprise the rates for labor categories specified in the solicitation. This explanation should describe how technical approach coincides with the proposed costs. If the proposed direct labor rates are based on an average of the individuals proposed to work on the contract, provide a list of the individuals proposed and the hours associated with each individual in deriving the rates. If the proposed direct labor rates are based on an average of company category rates, identify and describe the labor categories and the percentages associated with each category in deriving the rates, explaining in detail the basis for the percentages assigned.
(iii) Describe for each labor category proposed, the company's qualifications and experience requirements. If individual rates are used, provide the employee's name. If specific individuals are identified in the technical proposal, correlate these individuals with the labor categories specified in the solicitation.
(iv) Provide a matrix summarizing the effort proposed, including the subcontracts, by professional and technical level specified in the solicitation.
(v) Indicate whether current rates or escalated rates are used. If escalation is included, state the degree (percent) and methodology. The methodology shall include the effective date of the base rates and the policy on salary reviews (e.g. anniversary date of employee or salary reviews for all employees on a specific date).
(vi) State whether any additional direct labor (new hire or temporary hires) will be required during the performance period of this acquisition. If so, state the number required, the professional or technical level and the methodology used to estimate proposed labor rates.
(vii) With respect to educational institutions, include the following information for those professional staff members whose salary is expected to be covered by a stipulated salary support agreement pursuant to OMB Circular A-21.
(A) Individual's name;
(B) Annual salary and the period for which the salary is applicable;
(C) List of other research Projects or proposals for which salaries are allocated, and the proportionate time charged to each; and
(D) Other duties, such as teaching assignments, administrative assignments, and other institutional activities. Show the proportionate time charged to each. (Show proportionate time charges as a percentage of 100% of time for the entire academic year, exclusive of vacation or sabbatical leave.)
(viii) Uncompensated overtime. The decision to propose uncompensated overtime is the offeror's decision. Should the offeror, however, elect to propose uncompensated overtime, the offeror must propose a methodology that is consistent with their cost accounting practices and company policy. If proposed, provide an estimate of any uncompensated overtime proposed for exempt personnel working at the offeror's facilities. This estimate should identify the number of uncompensated labor hours and the percentage of compensated labor. Uncompensated labor hours are defined as hours for exempt personnel in excess of regular hours for a pay period which are actually worked and recorded in accordance with company policy. Provide a copy of the company policy on uncompensated overtime. Provide historical percentages of uncompensated overtime for the past three years. If proposed for subcontractors, provide separately with subcontractor information.
(ix) For labor rate contracts, for each fixed labor rate, offerors shall identify the basis for for the loaded fixed hourly rate for each contract period for example, the rate might consist of the following cost elements:
raw wage or salary rate, plus fringe benefits (if applicable), plus overhead rate (if applicable), plus G&A expense rate (if applicable), plus profit.
When determining the composite raw wage for a labor category, the offeror shall:
(A) provide in narrative form the basis for the raw wage for each labor category. If actual wages of current employees are used, the basis for the projections should be explained.
(B) If employees are subject to the Service Contract Act or Davis Bacon Act, they must be compensated at least at the minimum wage rate required by the applicable Wage Determination.
(3) Indirect costs (fringe, overhead, general, and administrative expenses).
(i) If the rates have been recently approved, include a copy of the rate agreement. If the agreement does not cover the projected performance period of the proposed effort, provide the rationale and any estimated rate calculations for the proposed performance period.
(ii) Submit supporting documentation for rates which have not been approved or audited. Indicate whether computations are based upon historical or projected data.
(iii) Provide actual pool expenses, base dollars, or hours (as applicable for the past five years). Include the actual indirect rates for the past five years including the indirect rates proposed, the actual indirect rates experienced and, if available, the final negotiated rate. Indicate the amount of unallowable costs included in the historical data.
(iv) Offerors who propose indirect rates for new or substantially reorganized cost centers should consider offering to accept ceilings on the indirect rates at the proposed rates. Similarly, offerors whose subcontractors propose indirect rates for new or substantially reorganized cost centers should likewise consider offering to accept ceilings on the subcontractors' indirect rates at the proposed rates.
Note to paragraph (b)(3)(iv): The Government reserves the right to adjust an offeror's or its subcontractor's estimated indirect costs for evaluation purposes based on the Agency's judgment of the most probable costs up the amount of any stated ceiling.
(v) If the employees are subject to the Service Contract Act or Davis Bacon Act, employees must receive the minimum level of benefits stated in the applicable Wage Determination.
(4) Travel expense.
(i) If the solicitation specifies the amount of travel costs, this amount is exclusive of any applicable indirect costs and fee.
(ii) If the solicitation does not specify the amount of travel costs, attach a schedule illustrating how travel was computed. Include a breakdown indicating number of trips, number of travelers, destinations from and to, purpose and cost, e.g., mileage, transportation costs, subsistence rates.
(5) Equipment, facilities and special equipment, including tooling.
(i) If direct charges for use of existing contractor equipment are proposed, provide a description of these items, including estimated usage hours, rates, and total costs.
(ii) If equipment purchases are proposed, provide a description of these items, and a justification as to why the Government should furnish the equipment or allow its purchase with contract funds. (Unless specified elsewhere in this solicitation, FAR 45.302-1 requires contractors to furnish all facilities in performance of contracts with certain limited exceptions.)
(iii) Identify Government-owned property in the possession of the offeror or proposed to be used in the performance of the contract, and the Government agency which has cognizance over the property.
(iv) Submit proposed rates or use charges for equipment, along with documentation to support those rates.
(v) If special purposes facilities or equipment are being proposed, provide a description of these items, details for the proposed costs including competitive prices, and justification as to why the Government should furnish the equipment or allow its purchase with contract funds.
(vi) If fabrication by the prime contractor is contemplated, include details of material, labor, and overhead.
(6) Other Direct Costs (ODC).
[[Page 71423]]
(i) If the solicitation specifies the amount of other direct costs, this amount is exclusive of any applicable indirect cost and fee.
(ii) If the amount is not specified in the solicitation, attach a schedule detailing how other direct costs were computed. Identify the major ODC items that under the accounting system would be a direct charge on any resulting contract.
(iii) If any of the cost elements identified as part of the specified other direct costs are recovered as an indirect cost, in accordance with the offeror's accounting system, those costs should not be included as a direct cost. Complete explanation of this adjustment and the contractor's practice should be provided.
(iv) Provide historical other direct costs dollars per level of effort hour on similar contracts or work assignments.
(7) Team Subcontracts. When the cost of a subcontract is substantial (5 percent of the total estimated contract dollar value or $100,000, whichever is less), the offeror shall include the following subcontractor information:
(i) Provide details of subcontract costs in the same format as the prime contractor's costs. This detailed information may be provided separately to the EPA if the subcontractor does not wish to provide this data to the prime contractor. Cost data provided separately by a contractor must be received by the time, date and at the location specified for the receipt of proposals. The subcontractor's package should be clearly marked with the RFP number, the name of the prime offeror, and a statement that the package is subcontractor data relevant to the proposal from the prime offeror. If submitted with the prime contractor's proposal, identify the subcontractors. State the amount of service estimated to be required and the quoted daily or hourly rate. Offerors are encouraged to provide letters of intent, signed by subcontractors, agreeing to a specified rate for life of the contract. Include a cost or price analysis of the subcontractor cost showing the reasons why the costs are considered reasonable;
(ii) Describe how the prospective team subcontractors were chosen as part of the offeror's proposed team; and rationale for selection;
(iii) Describe the necessity for the subcontractor's effort as either a supplement or complement to the offeror's in-house expertise;
(iv) Identify the areas of the scope of work and the level of effort the subcontractors are anticipated to perform. Provide a reconciliation summary of the proposed hours and ODCs for the prime contractor and proposed subcontractor(s).
(v) Describe the prime contractor's management structure and internal controls to ensure efficient and quality performance of team subcontractors.
(8) Facilities Capital Cost of Money (FCCM). When an offeror elects to claim FCCM as an allowable cost, the offeror must submit Form CASB-CNF and show calculation of the proposed amount. FCCM will be an allowable cost under the contemplated contract, if the criteria for allowability at FAR 31.205-10(a)(2) are met.
[End of Provision]
Alternate I (month and year of publication in the Federal Register). If the Government's requirement is a fully dedicated staff person for a twelve month period(s) for each specified position and performance is on a Government facility, add the following paragraph (b)(2)(x) to the basic provision:
(x) The level of effort for each position is to be proposed in work years. A work year is considered to consist of 2080 hours inclusive of direct and indirect time (40 hours per week x 52 weeks per year = 2080 hours). The proposal must identify proposed work years and clearly identify how many hours in each work year are direct (i.e., productive working hours) and how many are indirect (i.e., paid absences). If the company policy includes a different base work week, the total available hours would be different. For example, if the company's policy calls for a 37.5 hour work week, offeror would deduct paid absences from 1950 hour (37.5 hours/week x 52 weeks/year = 1950 hours). Offeror should clearly identify the paid absences as to how many hours are for holiday and how many hours are for vacation and sick leave. The amount of indirect time (paid absences) identified in the proposal must be consistent with company policy and must allow for the ten Federal Government holidays.
Alternate II (month and year of publication in the Federal Register). If the Government's requirement is a fully dedicated staff person for a twelve month period(s) for each specified position and performance is not on a Government facility; add the following paragraph (b)(2)(x) to the basic provision:
(x) The level of effort for each position is to be proposed in work years. A work year is considered to consist of 2080 hours inclusive of direct and indirect time (40 hours per week x 52 weeks per year = 2080 hours). The proposal must identify proposed work years and clearly identify how many hours in each work year are direct (i.e., productive working hours) and how many are indirect (i.e., paid absences). If the company policy includes a different base work week, the total available hours would be different. For example, if the company's policy calls for a 37.5 hour work week, offeror would deduct paid absences from 1950 hour (37.5 hours/week x 52 weeks/year = 1950 hours). Offeror should clearly identify the paid absences as to how many hours are for holiday and how many hours are for vacation and sick leave.
Alternate III (month and year of publication in the Federal Register). If the requirement is for the acquisition of supplies or equipment, substitute the following paragraphs (a) (iv)-(viii) and add (a)(ix) and (b).
(iv) Provide information as to how the proposed supplies or equipment meet the salient characteristics required by the contract line item;
(v) Provide published brochures, catalogs, or other technical literature by contract line item;
(vi) Meet any interface or compatibility requirements by contract line item;
(vii) Describe warranty services and how delivered by contract line item;
(viii) Assumptions, deviations and exceptions (as necessary); and
(ix) Additional information.
(b) Supplies--Provide unit pricing by contract line items for:
(i) Each line item;
(ii) Delivery;
(iii) Installation;
(iv) Sets of operating manuals;
(v) Training;
(vi) Warranty;
(vii) Maintenance; and
(viii) Volume discounts.
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1552.215-74 is redesignated as 1552.215-73 and revised to read as follows:
1552.215-73 General financial and organizational information.
As prescribed in 1515.408(a)(2), insert the following provision:
GENERAL FINANCIAL AND ORGANIZATIONAL INFORMATION
(the Month and Year of Publication in the Federal Register)
Offerors or quoters are requested to provide information regarding the following items in sufficient detail to allow a full and complete business evaluation. If the question indicated is not applicable or the answer is none, it should be annotated. If the offeror has previously submitted the information, it should certify the validity of that data currently on file at EPA and to whom and where it was submitted or update all outdated information on file.
(a) Contractor's Name:________
(b) Address (If financial records are maintained at some other location, show the address of the place where the records are kept):________
(c) Telephone Number:________
(d) Individual(s) to contact re. this proposal:________
(e) Cognizant Government: Audit Agency: -------------------------------------------------------- Address: ------------------------------------------------------------- Auditor: -------------------------------------------------------------
(f)(1) Work Distribution for the Last Completed Fiscal Accounting Period:
Sales:
Government cost-reimbursement type prime contracts and subcontracts: $______ Government fixed-price prime contracts and subcontracts: $______ Commercial Sales: $______ Total Sales: $______
(2) Total Sales for first and second fiscal years immediately preceding last completed fiscal year. Total Sales for First Preceding Fiscal Year $______ Total Sales for Second Preceding Fiscal Year $______
(g) Is company a separate rate entity or division? Yes____ No____
If a division or subsidiary corporation, name parent company:
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(h) Date Company Organized:________
(i) Manpower: Total Employees: ----------------------------------------------------- Direct: -------------------------------------------------------------- Indirect: ------------------------------------------------------------
[[Page 71424]]
Standard Work Week (Hours):____________--------------------------------
(j) Commercial Products:____________
(k) Attach a current organizational chart of the company.
(l) Description of Contractor's system of estimating and accumulating costs under Government contracts. (Check appropriate blocks.)
Estimated/actual cost
Standard cost
Estimating System: Job Order..................... Process....................... Accumulating System: Job Order..................... Process.......................
Has your cost estimating system been approved by any Government agency? Yes ________ No ________
If yes, give name, date or approval, and location of agency:
Has your cost accumulation system been approved by any Government agency? Yes ________ No ________
If yes, give name, date of approval, and address of agency:
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(m) What is your fiscal year period? (Give month-to-month dates): ________
What were the indirect cost rates for your last completed fiscal year?
Indirect cost Fiscal year
rate
Basis of Allocation
Fringe Benefits................. Overhead........................ G&A Expense..................... Other...........................
(n) Have the proposed indirect cost rate(s) been evaluated and accepted by any Government agency? Yes ________ No ________ If yes, give name, date of approval, and location of the Government agency: ________ Date of last preaward audit review by a Government agency: ________ If the answer is no, data supporting the proposed rates must accompany the cost or price proposal. A breakdown of the items comprising overhead and G&A must be furnished.
(o) Cost estimating is performed by:
Accounting Department--------------------------------------------------
Contracting Department-------------------------------------------------
Other (describe)-------------------------------------------------------
(p) Has system of control of Government property been approved by a Government agency? Yes ________ No ________ If yes, give name, date of approval, and location of the Government
(q) Purchasing System: FAR 44.302 requires EPA, where it is the cognizant Government agency, to conduct a Contractor Purchasing System Review for each contractor whose sales to the Government, using other than sealed bid procedures, are expected to exceed $25 million (annual billings) during the next twelve months. The $25 million sales threshold is comprised of prime contracts, subcontractors under Government prime contracts, and modifications (except when the negotiated price is based on established catalog or market prices or is set by law or regulation).
Has your purchasing system been approved by a Government agency? Yes ________ No ________ If yes, name and location of the Government agency: ________ Period of Approval:---------------------------------------------------- If no, do you estimate that your negotiated sales to the Government during the next twelve months will meet the $25 million threshold? Yes ________ No ________ If you responded yes to the $25 million threshold question, is EPA the cognizant agency for your organization based on the preponderance of Government contract dollars? Yes ________ No
If EPA is not your cognizant Government agency, provide the name and location of the cognizant agency ________ Are your purchasing policies and procedures written? Yes ________ No
(r) Does your firm have an established written incentive compensation or bonus plan? Yes ________ No ________
(s) Additionally, offerors shall submit current financial statements, including a Balance Sheet, Statement of Income (Loss), and Cash Flow for the last two completed fiscal years. Specify resources available to perform the contract without assistance from any outside source. If sufficient resources are not available, indicate in proposal the amount required and the anticipated source (i.e., bank loans, letter or lines of credit, etc.). (End of Provision)
1552.215-74 Advanced understanding--uncompensated time.
As prescribed in 1515.408(b), insert the following provision or one substantially the same as the following provision:
ADVANCED UNDERSTANDING--UNCOMPENSATED TIME (The Month and Year of Publication in the Federal Register)
(a) The estimated cost of this contract is based upon the Contractor's proposal which specified that exempt personnel identified to work at the Contractor's facilities will provide uncompensated labor hours to the contract totaling ________ percent of compensated labor. (Note: the commitment for uncompensated time, and the formula elements in paragraph (b) below, apply only to exempt personnel working at the Contractor's facilities and does not include non-exempt personnel or exempt personnel working at other facilities.) Uncompensated labor hours are defined as hours of exempt personnel in excess of regular hours for a ________ pay period which are actually worked and recorded in accordance with the company policy, entitled, ________
(b) Recognizing that the probable cost to the Government for the labor provided under this contract is calculated assuming a proposed level of uncompensated labor hours, it is hereby agreed that in the event the proposed level of uncompensated labor hours are not provided, an adjustment, calculated in accordance with the following formula will be made to the contract amount.
Formula
Adjustment equals estimated value of uncompensated time hours not provided
Target uncompensated time percent minus ________ percent.
Shortage of uncompensated time percent minus actual cost percent.
Estimated value of uncompensated time hours not provided equals shortage of uncompensated time percent times total exempt applicable direct labor costs (including applicable indirect costs).
(c) Within three weeks after the end of the contract, the Contractor shall submit a statement concerning the amount of uncompensated time hours delivered during the contract. In the event there is a shortage of uncompensated time hours provided, a calculation, utilizing the above formula will be made and this calculation will be the basis for an adjustment in the contract amount.
(d) In the event adjustments are made to the contract, the adjusted amounts shall not be allowable as a direct or indirect cost to this or any other Government contract.
[End of clause]
Dated: December 1, 1998. Betty L. Bailey, Director, Office of Acquisition Management.
[FR Doc. 98-33627Filed12-24-98; 8:45 am]
BILLING CODE 6560-50-P
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