[Federal Register Volume 61, Number 174 (Friday, September 6, 1996)]
[Rules and Regulations]
[Pages 47065-47068]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22642]


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ENVIRONMENTAL PROTECTION AGENCY
48 CFR Parts 1515 and 1552

[FRL-5602-5]


Acquisition Regulation; Coverage of Source Selection Process

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: This document amends the Environmental Protection Agency (EPA) 
acquisition regulation (48 CFR Chapter 15) coverage on the source 
selection process. EPA is aware that Part 15 of the Federal Acquisition 
Regulation is currently undergoing revision. The Agency believes that 
its changes will not conflict with any subsequent revisions to Part 15. 
Additionally, the Agency believes that the changes to its acquisition 
regulation are needed now as an interim measure to streamline the 
process and empower Contracting Officers at EPA. This rule is also 
necessary to implement portions of the Federal Acquisition Streamlining 
Act of 1994.

EFFECTIVE DATE: September 23, 1996.

FOR FURTHER INFORMATION CONTACT: Louise Senzel, Environmental 
Protection Agency, Office of Acquisition Management (3802F), 401 M 
Street, SW, Washington, D.C. 20460. Telephone: (202) 260-6204.

SUPPLEMENTARY INFORMATION:

A. Background

    The proposed rule was published in the Federal Register (61 CFR 
25440) on May 21, 1996, providing for a comment period until July 22, 
1996.
    Interested persons have been afforded an opportunity to participate 
in the making of this rule. No public comments were received.

B. Executive Order 12866

    This is not a significant regulatory action for the purposes of 
Executive Order 12866; therefore, no review was required by the Office 
of Information and Regulatory Affairs.

C. Paperwork Reduction Act

    The Paperwork Reduction Act did not apply because this 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.).

D. Regulatory Flexibility Act

    The EPA certifies that this rule does not exert a significant 
economic impact on a substantial number of small entities. The 
requirements to contractors under the proposed rule impose no 
reporting, record-keeping, or any compliance costs.

E. Unfunded Mandates

    This rule will not impose unfunded mandates on state or local 
entities, or others.

F. Regulated Entities

    EPA contractors are entities potentially affected by this action. 
Specifically, those entities competing under solicitations for 
negotiated procurements will be affected.

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              Category                         Regulated entity         
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Industry............................  EPA contractors.                  
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List of Subjects in 48 CFR Part 1515 and 1552

    Government procurement.

    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).

    Therefore, 48 CFR Chapter 15 is amended as set forth below: 1. The 
authority citations for parts 1515 and 1552 continue to read as 
follows:

    Authority: Sec. 205(c), 63 Stat. 390, as amended, 40 U.S.C. 
486(c).


1515.407  [Amended]

    2. Section 1515.407 is amended by removing paragraph (a)(1), and by 
redesignating paragraphs (a)(2) and (3) as (a)(1) and (2).
    3. Section 1515.604 is amended by revising paragraphs (a), (c), and 
(d) to read as follows:


1515.604   Responsibilities and Duties.

* * * * *
    (a) Source Selection Official. The Source Selection Official (SSO) 
is the official responsible for overall management of the source 
selection process. Duties of the SSO include, but are not limited to, 
appointing members and chairpersons of the Source Evaluation Board, the 
Technical Evaluation Panel (TEP), and the Business Evaluation Panel 
(BEP); and approving solicitation related documents. However, the 
Contracting Officer is responsible for approving amendments to 
solicitation documents. The SSO may waive in writing the requirement in 
1515.612(a)(1)(v) for at least one member of the TEP to be an 
individual not involved in managing the

[[Page 47066]]

current contract. The SSO also approves the competitive range 
determination and makes the source selection decision.
* * * * *
    (c) Technical Evaluation Panel (TEP). The Program Office has the 
responsibility for developing the technical evaluation criteria and 
statement of work for the solicitation. The TEP has the responsibility 
for evaluating the technical aspects of the offerors' technical 
proposals. Based on the recommendation of the Program Office, the SSO 
has the discretion of assigning this evaluation responsibility to the 
Project Officer, if appropriate, or to the TEP. When offerors' past 
performance is evaluated as part of the technical proposal evaluation 
process, the past performance evaluation shall be conducted by the TEP, 
or by the Contracting Officer and the Project Officer. Based on input 
from the Project Officer, the Contracting Officer has the discretion of 
assigning this responsibility to the TEP or to the Contracting Officer 
and Project Officer.
    (d) Business Evaluation Panel (BEP). (1) Outside of the technical 
review, the Contracts Office has the lead for reviewing solicitation 
evaluation criteria and the Statement of Work from a business 
perspective; evaluating the business, pricing, and contractual aspects 
of the offerors' business and technical proposals; and examining other 
factors such as the responsibility of the offerors. Based on the 
recommendation of the Contracting Officer, the SSO has the discretion 
to designate these responsibilities to the Contracting Officer or 
designating a BEP. Sections 1515.612(a)(1) (vi) and (vii) are 
applicable only when the SSO has designated a BEP.
    (2) When no BEP is convened, the Contracting Officer shall perform 
a preliminary cost evaluation of each offeror's cost/price proposal to 
identify any cost elements that appear unreasonable or questionable. 
When cost analysis is employed, the Contracting Officer shall perform a 
detailed cost analysis of the business proposal which includes an 
evaluation of the offeror's subcontracting program, management 
structure, and any other relevant factors which may prevent award to an 
offeror. This analysis may be included in a separate report, in the 
competitive range determination, or in the pre/post-negotiation 
memorandum.
    4. Section 1515.604-70 is amended by adding paragraph (c) to read 
as follows:


1515.604-70   Personal conflicts of interest.

* * * * *
    (c) 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.
    5. Section 1515.605 is amended by revising paragraphs (a), (b), and 
adding (c) to read as follows:


1515.605   Evaluation Factors.

* * * * *
    (a) The Contracting Officer shall insert the provisions at 
1552.215-70, ``EPA Source Evaluation and Selection Procedures--
Negotiated Procurement'' and either: the provision in 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 award will be made to the offeror 
with the lowest-evaluated cost or price whose technical proposal meets 
the minimum needs of the Government; or the provision in Alternate III 
where all evaluation factors other than cost or price when combined are 
approximately equal to cost or price. The Contracting Officer may use 
provisions substantially the same as 1552.215-71, Alternate I to 
1552.215-71, Alternate II to 1552.215-71, or Alternate III to 1552.215-
71 without requesting a deviation to the EPAAR.
    (b) Technical evaluation criteria should be prepared in accordance 
with FAR 15.605 and inserted into paragraph (b) of the provision at 
1552.215-71, Alternate I, and Alternate III. If technical evaluation 
criteria are used in Alternate II, the criteria should be prepared in 
accordance with FAR 15.605 and inserted into paragraph (b). When past 
performance is to be used as an evaluation factor, the Contracting 
Officer must develop criteria for evaluating past performance and 
include such criteria in section M of the solicitation.
    (c) Evaluation Methodologies. Evaluation criteria may be developed 
using methodologies other than numerical scoring, e.g., adjectival 
ratings or color scoring. The relative importance of the evaluation 
criteria must be clearly identified in the solicitation. The 
Contracting Officer should identify and prepare evaluation criteria 
consistent with FAR 15.605.
* * * * *
    6. Section 1515.608 is amended by revising paragraphs (a)(1); 
adding paragraph (a)(3); by revising paragraphs (b)(1)(ii) and 
(b)(2)(i); by adding paragraph (b)(3); by removing paragraph (c) and by 
redesignating paragraphs (d) and (e) as (c) and (d), to read as 
follows:


1515.608   Proposal evaluation.

    (a) * * *
    (1) Technical proposals shall be evaluated solely on the factors 
specified in the solicitation and in accordance with FAR 15.608. 
Additionally, the evaluation of technical proposals (including past 
performance factors) shall be accomplished using the scoring plan shown 
below or one specifically developed for the solicitation. Contracting 
Officers may request that the TEP also indicate whether proposals are 
acceptable or unacceptable, and/or whether the offerors' response to 
individual criteria are acceptable or unacceptable.

                              Scoring Plan                              
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              Value                        Descriptive statement        
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0...............................  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 TEP 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 TEP 
                                   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 TEP 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 approach is acceptable
                                   with the possibility of more than    
                                   adequate performance.                
5...............................  The response to the factor is superior
                                   in most features.                    
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* * * * *
    (3) The goal of the technical evaluation is to understand each 
offeror's proposal and to assess each

[[Page 47067]]

proposal relative to the specified evaluation factors. The TEP 
report(s) should address any perceived strengths, as well as any 
perceived weaknesses or deficiencies, and risks associated with the 
offerors' performance. Scores may or may not change from the initial 
evaluation to the supplemental evaluation, depending on the offerors' 
response to interrogatories. The supplemental TEP report must explain 
the rationale for no change in score, as well as any decrease or 
increase in score as a result of the offerors' response to 
interrogatories.
    (b) * * *
    (1) * * *
    (ii) Any interrogatories the Contracting Officer should submit to 
offerors to clarify their technical proposals to address any 
weaknesses, deficiencies, or questions associated with their technical 
proposals. The Contracting Officer may review the technical proposals 
and TEP evaluation, and submit any additional interrogatories deemed 
appropriate.
    (2)(i) A statement that the respective technical evaluation panel 
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.
* * * * *
    (3) The Contracting Officer may release the cost/price proposals to 
the entire TEP or solely to the TEP Chairperson, after the TEP has 
completed its evaluation of initial proposals. The TEP or Chairperson 
should evaluate cost/price proposals to determine whether the offerors' 
cost/price proposals adequately reflect their technical proposals and 
the requirements of the solicitation, and demonstrate that the proposed 
price or cost provides an adequate understanding of the requirements of 
the solicitation. Any inconsistencies between the proposals and the 
solicitation requirements should be identified. Any inconsistencies 
between the cost and technical proposals should also be identified.
    7. Section 1515.609 is amended by revising paragraph (c) to read as 
follows:


1515.609  Competitive Range.

* * * * *
    (c)(1) When a single proposal is the only proposal in the 
competitive range, as part of the required discussion in the 
competitive range determination, Contracting Officers shall address at 
a minimum the following 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); and 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.
    (2) In cases where only a single proposal has been received and a 
competitive range determination has not been prepared, the discussion 
of the reasons for receipt of the single proposal which otherwise would 
be contained in the competitive range determination shall be included 
in the source selection document. The discussion in the source 
selection document at a minimum shall address the factors referenced in 
paragraph (c)(1) of this section.
    (3) The Contracting Officer shall provide a copy of the competitive 
range determination or source selection document to the Competition 
Advocate after approval of the determination or document by the 
designated Source Selection Official.
    8. Section 1515.611 is revised to read as follows:


1515.611  Best and final offers.

    The Contracting Officer shall establish a common cut-off date for 
receipt of revised proposals and/or confirmations of negotiations (best 
and final offers) upon completion of negotiations.
    9. Section 1515.612 is amended by revising paragraphs (a)(1)(iii), 
(iv) and (v); and by adding paragraph (c) to read as follows:


1515.612  Formal source selection.

    (a) * * *
    (1) * * *
    (iii) SEB Membership--The SSO will determine the organizational 
levels of the individuals to serve on the SEB.
    (iv) TEP Chairperson--The SSO will determine, based on the 
recommendation of the requesting program office, the Chairperson of the 
TEP. For recompetes or follow-on contracts, the Chairperson should 
normally not be the incumbent contract's Project Officer.
    (v) TEP Membership--At least two members, in addition to the 
Project Officer, who are knowledgeable of the procurement's technical 
aspects. If the procurement is a follow-on to an existing contract, at 
least one of the TEP members should be someone who is not involved in 
managing the current contract, preferably from outside of the program 
division which originated the requirement. See 1515.604(a) for waiver 
of this requirement.
* * * * *
    (c) Source Selection Plan. No separate source selection plan is 
required. The Contracting Officer may include the information required 
by FAR 15.612(c) in the individual acquisition plan.
    10. Section 1552.215-70 is revised to read as follows:


1552.215-70  EPA Source Selection and Selection Procedures--Negotiated 
Procurements (SEP 1996)

    As prescribed in 1515.605, insert the following provision.

EPA SOURCE SELECTION AND SELECTION PROCEDURES--NEGOTIATED PROCUREMENTS 
(SEP 1996)

    (a) The Government will perform source selection in accordance 
with FAR Part 15 and the EPA Source Evaluation and Selection 
Procedures in EPAAR Part 1515 (48 CFR Part 1515). The significant 
features of this procedure are:
    (1) The Government will perform either cost analysis or price 
analysis of the offeror's cost/business proposal in accordance with 
FAR Parts 15 and 31, as appropriate. In addition, the Government 
will also evaluate proposals to determine contract cost or price 
realism.
    Cost or price realism relates to an offeror's demonstrating that 
the proposed cost or price provides an adequate reflection of the 
offeror's understanding of the requirements of this solicitation, 
i.e., that the cost or price is not unrealistically low or 
unreasonably high.
    (2) The Government will evaluate technical proposals as 
specified in 1552.215-71, Evaluation Factors for Award.
    (b) In addition to evaluation of the previously discussed 
elements, the Government will consider in any award decision the 
responsibility factors set forth in FAR Part 9.

(End of Provision)

    11. Section 1552.215-71 is revised as follows:


1552.215-71  Evaluation Factors for Award.

    As prescribed in 1515.605, insert one of the following provisions.

EVALUATION FACTORS FOR AWARD (SEP 1996)

    (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 price and 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) Technical Evaluation Criteria:

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(End of Provision)

EVALUATION FACTORS FOR AWARD (SEP 1996)

ALTERNATE I (SEP 96)

    (a) The Government will make award to the responsible offeror(s) 
whose offer conforms

[[Page 47068]]

to the solicitation and is most advantageous to the Government, cost 
or price, and 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) Technical Evaluation Criteria:

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(End of Provision)

EVALUATION FACTORS FOR AWARD--PROPOSAL MEETS THE MINIMUM NEEDS OF THE 
GOVERNMENT WITH THE LOWEST EVALUATED COST/PRICE

ALTERNATE II (SEP 1996)

    (a) The Government will make award to the lowest-evaluated cost 
or price, technically acceptable, responsible offeror whose offer 
meets the minimum needs of the Government. In the event that there 
are two or more technically acceptable, equal price (cost) offers, 
the Government will consider other factors, as listed below in 
descending order of importance:

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    (b) Technical Evaluation Criteria:

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(End of Provision)

EVALUATION FACTORS FOR AWARD (SEP 1996)

ALTERNATE III (SEP 96)

    (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 price, and other factors considered. For 
this solicitation, all evaluation factors other than cost or price 
when combined are approximately equal to cost or price.
    (b) Technical Evaluation Criteria:

----------------------------------------------------------------------

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(End of Provision)


Sec. 1552.215-72  [Removed]

    12. Section 1552.215-72 is removed.

    Dated: August 21, 1996.
John C. Gherardini III,
Acting Director, Office of Acquisition Management.
[FR Doc. 96-22642 Filed 9-5-96; 8:45 am]
BILLING CODE 6560-50-P