[Federal Register Volume 63, Number 203 (Wednesday, October 21, 1998)]
[Rules and Regulations]
[Pages 56091-56094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28240]


=======================================================================
-----------------------------------------------------------------------

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1817, 1834, and 1852


Phased Acquisitions

AGENCY: National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This is a final rule amending the NASA FAR Supplement (NFS) to 
revise its existing coverage on phased acquisitions and down-selections 
to reflect changes in NASA Procedures and Guidance (NPG) 7120.5A, NASA 
Program and Project Management Processes and Requirements. In addition, 
the revision also includes: relocation of the NFS coverage from Part 
1834, Major System Acquisition, to 1817, Special Contracting Methods, 
to more accurately reflect the subject matter; and editorial revisions 
to the text and associated contract clauses to eliminate redundancies 
and improve readability. All of these changes are considered non 
substantive in that they do not affect the existing phased acquisition/
down-selection procedures.

DATES: This rule is effective October 21, 1998.

ADDRESSES: Kenneth A. Sateriale, NASA Headquarters Office of 
Procurement, Contract Management Division (Code HK), Washington, DC 
20546.

FOR FURTHER INFORMATION CONTACT: Kenneth A. Sateriale, (202) 3580491.

SUPPLEMENTARY INFORMATION:

Background

    NPG 7120.5A, NASA Program and Project Management Processes and 
Requirements, is the primary internal document governing NASA program 
management. Revision A supersedes the previous version. The revision 
includes new terminology that makes obsolete some references, such as 
program phase designations and definitions, in the NFS coverage on 
phased acquisitions. Editorial and administrative changes to the NFS 
are required to ensure complete compatibility with the revised NPG.

Impact

    NASA certifies that this regulation will not have a significant 
economic impact on a substantial number of small business entities 
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) since the 
changes do no more than align NFS terminology to that in Agency 
internal documents and make editorial revisions to delete redundancies 
and improve readability. The rule does not impose any reporting or 
record keeping requirements subject to the Paperwork Reduction Act.

List of Subjects in 48 CFR Parts 1817, 1834, and 1852

    Government procurement.
Tom Luedtke,
Acting Associate Administrator for Procurement.

    Accordingly, 48 CFR Parts 1817, 1834, and 1852 are amended as 
follows:
    1. The authority citation for 48 CFR Parts 1817, 1834, and 1852 
continues to read as follows:

    Authority: 42 U.S.C. 2473(c)(1).

PART 1817--SPECIAL CONTRACTING METHODS

Subpart 1817.73 [Added]

    2. Subpart 1817.73 is added to read as follows:

Subpart 181734.730 Phased Acquisition

181734.7300  Definitions.
1817.7301  Down-selctions in phased acquisitions.
1817.7301-1  Pre-solicitation planning.
1817.7301-2  Evaluation factors.
1817.7301-3  Down-selection milestones.
1817.7301-4  Synopsis.
1817.7301-5  Progressive competition.
1817.7302  Contract clauses.

Subpart 1817.73--Phased Acquisition


1817.7300   Definitions.

    (a) Down-selection. In a phased acquisition, the process of 
selecting contractors for later phases from among the preceding phase 
contractors.
    (b) Phased Acquisition. An incremental acquisition implementation 
comprised of several distinct phases where the realization of program/
project objectives requires a planned, sequential acquisition of each 
phase. The phases may be acquired separately, in combination, or 
through a down-selection strategy.
    (c) Progressive Competition. A type of down-selection strategy for 
a phased acquisition. In this method, a single solicitation is issued 
for all phases of the program. The initial phase contracts are awarded, 
and the contractors for subsequent phases are expected to be chosen 
through a down-selection from among the preceding phase contractors. In 
each phase, progressively fewer contracts are awarded until a single 
contractor is chosen for the final phase. Normally, all down-selections 
are accomplished without issuance of a new, formal solicitation.


1817.7301   Down-selections in phased acquisitions.


1817.7301-1   Pre-solicitation planning.

    (a) The rationale for the use of the down-selection technique shall 
be thoroughly justified in the acquisition planning requirement. 
Because the initial phase solicitation will also lead to subsequent 
phase award(s), the decision to use a downselection strategy must be 
made prior to release of the initial solicitation. Accordingly, all 
phases must be addressed in the initial acquisition strategy planning 
and documented in the acquisition plan or ASM minutes.
    (b) If there is no direct link between successful performance in 
the preceding

[[Page 56092]]

phase and successful performance in a subsequent phase, down-selection 
is inappropriate. In this case, the phases should be contracted for 
separately without a down-selection.
    (c) With one exception, both the initial and subsequent phase(s) of 
an acquisition down-selection process are considered to be full and 
open competition if the procedures in 1817.7301-4 and 1817.7301-5 (if 
using the progressive competition technique) are followed. If only one 
contractor successfully completed a given phase and no other offers are 
solicited for the subsequent phase, award of the subsequent phase may 
be made only if justified by one of the exceptions in FAR 6.302 or one 
of the exclusions in FAR 6.2, and only after compliance with the 
synopsis requirements of FAR 5.202 and 5.205 and 1804.570-2.


1817.7301-2   Evaluation factors.

    A separate set of evaluation factors must be developed for each 
phase in a down-selection competition. Since these competitive down-
selection strategies anticipate that a preceding phase contractor will 
be the subsequent phase contractor, the evaluation factors for initial 
phase award must specifically include evaluation of the offerors' 
abilities to perform all phases.


1817.7301-3   Down-selection milestones.

    (a) When sufficient programmatic and technical information is 
available to all potential offerors, proposal evaluation and source 
selection activities need not be delayed until completion of a given 
phase. These activities should commence as early as practicable. The 
initial phase contracts should be structured to allow for down-
selection at a discrete performance milestone (e.g., a significant 
design review or at contract completion) of a design maturity 
sufficient to allow for an informed selection decision. This will avoid 
time gaps between phases and eliminate unnecessary duplication of 
effort.
    (b) The appropriate contract structure must reflect program 
technical objectives as well as schedule considerations. For example, 
if a two-phased acquisition strategy calls for formal completion of 
initial phase effort at Preliminary Design Review (PDR), but it is not 
financially practical or technically necessary for subsequent phase 
award and performance to carry all initial phase contractors through 
PDR, the initial phase contracts should be structured with a basic 
period of performance through a significant, discrete milestone before 
PDR with a priced option for effort from that milestone to PDR. The 
downselection would occur at the earlier milestone, the PDR option 
exercised only for the down-selection winner, and the subsequent phase 
performance begun at the completion of the PDR option.


1817.7301-4   Synopsis.

    (a) Each phase of a phased acquisition not performed in-house must 
be synopsized in accordance with FAR 5.201 and must include all the 
information required by FAR 5.207. Time gaps between phases should be 
minimized by early synopsis of subsequent phase competition. The 
synopsis for the initial competitive phase should also state the 
following:
    (1) The Government plans to conduct a phased acquisition involving 
a competitive down-selection process. (Include a description of the 
process and the phases involved.)
    (2) Competitions for identified subsequent phases will build on the 
results of previous phases.
    (3) The award criteria for subsequent phases will include 
demonstrated completion of specified previous phase requirements.
    (4) The Government expects that only the initial phase contractors 
will be capable of successfully competing for the subsequent phase(s). 
Proposals for the subsequent phase(s) will be requested from these 
contractors.
    (5) The Government intends to issue (or not issue) a new, formal 
solicitation(s) for subsequent phase(s). If new solicitations are not 
planned, the acquisition must be identified as a ``progressive 
competition'' (see 1817.7301-5), and the mechanism for providing 
pertinent subsequent phase proposal information (e.g., statements of 
work, specifications, proposal preparation instructions, and evaluation 
factors for award) must be described.
    (6) Each subsequent phase of the acquisition will be synopsized in 
accordance with FAR 5.201 and 5.203.
    (7) Notwithstanding the expectation that only the initial phase 
contractors will be capable of successfully competing for the 
subsequent phase(s), proposals from all responsible sources submitted 
by the specified due date will be considered. In order to contend for 
subsequent phase awards, however, such prospective offerors must 
demonstrate a design maturity equivalent to that of the prior phase 
contractors. Failure to fully and completely demonstrate the 
appropriate level of design maturity may render the proposal 
unacceptable with no further consideration for contract award.
    (b) In addition to the information in paragraph (a) of this 
section, the synopsis for the subsequent phase(s) must identify the 
current phase contractors.


1817.7301-5  Progressive competition.

    (a) To streamline the acquisition process, the preferred approach 
for NASA phased acquisitions is the ``progressive competition'' down-
selection technique in which new, formal solicitations are not issued 
for phases subsequent to the initial phase. Subsequent phase proposals 
are requested by less formal means, normally by a letter accompanied by 
the appropriate proposal preparation and evaluation information.
    (b) When using the progressive competition technique, if a 
prospective offeror other than one of the preceding phase contractors 
responds to the synopsis for a subsequent phase and indicates an 
intention to submit a proposal, the contracting officer shall provide 
to that offeror all the material furnished to the preceding phase 
contractors necessary to submit a proposal. This information includes 
the preceding phase solicitation, contracts, and system performance and 
design requirements, as well as all proposal preparation instructions 
and evaluation factors. In addition, the prospective offeror must be 
advised of all requirements necessary for demonstration of a design 
maturity equivalent to that of the preceding phase contractors.
    (c) A key feature of the progressive competition technique is that 
a formal solicitation is normally not required. However, when the 
Government requirements or evaluation procedures change so 
significantly after release of the initial phase solicitation that a 
substantial portion of the information provided in the initial phase 
synopsis, solicitation, or contracts is no longer valid, a new 
solicitation shall be issued for the next phase.
    (d) Subsequent phase proposals should be requested by a letter 
including the following:
    (1) A specified due date for the proposals along with a statement 
that the late proposal information in paragraph (c)(3) of FAR 52.215-1, 
Instructions to Offerors--Competitive Acquisition, applies to the due 
date.
    (2) Complete instructions for proposal preparation, including page 
limitations, if any.
    (3) Final evaluation factors.
    (4) Any statement of work, specifications, or other contract 
requirements that have changed since the initial solicitation.

[[Page 56093]]

    (5) All required clause changes applicable to new work effective 
since the preceding phase award.
    (6) Any representations or certifications, if required.
    (7) Any other required contract updates (e.g., small and small 
disadvantaged business goals).
    (e) Certain factors may clearly dictate that the progressive 
competition technique should not be used. For example, if it is likely 
that NASA may introduce a design concept independent of those explored 
by the preceding phase contractors, it is also likely that a new, 
formal solicitation is necessary for the subsequent phase and all 
potential offerors should be solicited. In this circumstance, 
progressive competition is inappropriate.


1817.7302  Contract clauses.

    (a) The contracting officer shall insert the clause at 1852.217-71, 
Phased Acquisition Using Down-Selection Procedures, in solicitations 
and contracts for phased acquisitions using down-selection procedures 
other than the progressive competition technique described in 
1817.7301-5. The clause may be modified as appropriate if the 
acquisition has more than two phases. The clause shall be included in 
the solicitation for each phase and in all contracts except that for 
the final phase.
    (b) The contracting officer shall insert the clause at 1852.217-72, 
Phased Acquisition Using Progressive Competition Down-Selection 
Procedures, in solicitations and contracts for phased acquisitions 
using the progressive competition technique described in 1817.7301-5. 
The clause may be modified as appropriate if the acquisition has more 
than two phases. The clause shall be included in the initial phase 
solicitation and all contracts except that for the final phase.

PART 1834--MAJOR SYSTEM ACQUISITION


1834.003  [Amended]

    3. Section 1834.003(a) is revised to read as follows:


1834.003  Responsibilities.

    (a) NASA's implementation of OMB Circular No. A-109, Major Systems 
Acquisitions, and FAR Part 34 is contained in this part and in NASA 
Policy Directive (NPD) 7120.4, ``Program/Project Management,'' and NASA 
Procedures and Guidance (NPG) 7120.5, `` NASA Program and Project 
Management Processes and Requirements''.


1834.70  [Removed]

    4. Subpart 1834.70 is removed.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


1852.217-71 and 1852.217-72  [Added]

    5. Sections 1852.217-71 and 1852.217-72 are added to read as 
follows:


1852.217-71  Phased acquisition using down-selection procedures.

    As prescribed in 1817.7302(a), insert the following clause:

Phased Acquisition Using Down-Selection Procedures (Insert Month 
and Year of Federal Register Publication)

    (a) This solicitation is for the acquisition of ________ [insert 
Program title]. The acquisition will be conducted as a two-phased 
procurement using a competitive down-selection technique between 
phases. In this technique, two or more contractors will be selected 
for Phase 1. It is expected that the single contractor for Phase 2 
will be chosen from among these contractors after a competitive 
down-selection.
    (b) Phase 1 is for the ________ [insert purpose of phase]. Phase 
2 is for ________ [insert general Phase 2 goals].
    (c) The competition for Phase 2 will be based on the results of 
Phase 1, and the award criteria for Phase 2 will include successful 
completion of Phase 1 requirements.
    (d) NASA will issue a separate, formal solicitation for Phase 2 
that will include all information required for preparation of 
proposals, including the final evaluation factors.
    (e) Phase 2 will be synopsized in the Commerce Business Daily 
(CBD) in accordance with FAR 5.201 and 5.203 unless one of the 
exceptions in FAR 5.202 applies. Notwithstanding NASA's expectation 
that only the Phase 1 contractors will be capable of successfully 
competing for Phase 2, all proposals will be considered. Any other 
responsible source may indicate its desire to submit a proposal by 
responding to the Phase 2 synopsis, and NASA will provide that 
source a solicitation.
    (f) To be considered for Phase 2 award, offerors must 
demonstrate a design maturity equivalent to that of the Phase 1 
contractors. This, demonstration shall include the following Phase 1 
deliverables upon which Phase 2 award will be based: ________ 
[(insert the specific Phase 1 deliverables]. Failure to fully and 
completely demonstrate the appropriate level of design maturity may 
render the proposal unacceptable with no further consideration for 
contract award.
    (g) The following draft Phase 2 evaluation factors are provided 
for your information. Please note that these evaluation factors are 
not final, and NASA reserves the right to change them at any time up 
to and including the date upon which Phase 2 proposals are 
solicited.
    [Insert draft Phase 2 evaluation factors (and subfactors and 
elements, if available), including demonstration of successful 
completion of Phase 1 requirements.]
    (h) Although NASA will request Phase 2 proposals from Phase 
contractors, submission of the Phase 2 proposal is not a requirement 
of the Phase 1 contract. Accordingly, the costs of preparing these 
proposals shall not be a direct charge to the Phase 1 contract or 
any other Government contract.
    (i) The anticipated schedule for conducting this phased 
procurement is provided for your information. These dates are 
projections only and are not intended to commit NASA to complete a 
particular action at a given time. [Insert dates below].

Phase 1 award--
Phase 2 synopsis--
Phase 2 proposal requested--
Phase 2 proposal receipt--
Phase 2 award--

(End of clause)


1852.217-72   Phased acquisition using progressive competition down-
selection procedures.

    As prescribed in 1817.7302(b), insert the following clause:

Phased Acquisition Using Progressive Competition Down-Selection 
Procedures (Insert Month and Year of Federal Register Publication)

    (a) This solicitation is for the acquisition of ________ [insert 
Program title]. The acquisition will be conducted as a two-phased 
procurement using a progressive competition down-selection technique 
between phases. In this technique, two or more contractors will be 
selected for Phase
    1. It is expected that the single contractor for Phase 2 will be 
chosen from among these contractors after a competitive down-
selection.
    (b) Phase 1 is for the ________ [insert purpose of phase]. Phase 
2 is for ________ [insert general Phase 2 goals].
    (c) The competition for Phase 2 will be based on the results of 
Phase 1, and the award criteria for Phase 2 will include successful 
completion of Phase 1 requirements.
    (d) NASA does not intend to issue a separate, formal 
solicitation for Phase 2. Instead, Phase 2 proposals will be 
requested from the Phase 1 contractors by means of ________ 
[indicate method of requesting proposals, e.g., by a letter]. All 
information required for preparation of Phase 2 proposals, including 
the final evaluation criteria and factors, will be provided at that 
time.
    (e) Phase 2 will be synopsized in the Commerce Business Daily 
(CBD) in accordance with FAR 5.201 and 5.203 unless one of the 
exceptions in FAR 5.202 applies. Notwithstanding NASA's expectation 
that only the Phase 1 contractors will be capable of successfully 
competing for Phase 2, all proposals will be considered. Any other 
responsible source may indicate its desire to submit a proposal by 
responding to the Phase 2 synopsis, and NASA will provide that 
source to all the material furnished to the Phase 1 contractors that 
is necessary to submit a proposal.
    (f) To be considered for Phase 2 award, offerors must 
demonstrate a design maturity equivalent to that of the Phase 1 
contractors.

[[Page 56094]]

This, demonstration shall include the following Phase 1 deliverables 
upon which Phase 2 award will be based: ________ [insert the 
specific Phase 1 deliverables]. Failure to fully and completely 
demonstrate the appropriate level of design maturity may render the 
proposal unacceptable with no further consideration for contract 
award.
    (g) The following draft Phase 2 evaluation factors are provided 
for your information. Please note that these evaluation factors are 
not final, and NASA reserves the right to change them at any time up 
to and including the date upon which Phase 2 proposals are 
requested. Any such changes in evaluation factors will not 
necessitate issuance of a new, formal solicitation for Phase 2.
    [Insert draft Phase 2 evaluation factors (and subfactors and 
elements, if available), including demonstration of successful 
completion of Phase 1 requirements.]
    (h) Although NASA will request Phase 2 proposals from Phase 1 
contractors, submission of the Phase 2 proposal is not a requirement 
of the Phase 1 contract. Accordingly, the costs of preparing these 
proposals shall not be a direct charge to the Phase 1 contract or 
any other Government contract.
    (i) The anticipated schedule for conducting this phased 
procurement is provided for your information. These dates are 
projections only and are not intended to commit NASA to complete a 
particular action at a given time. [Insert dates below].

Phase 1 award--
Phase 2 synopsis--
Phase 2 proposal requested--
Phase 2 proposal receipt--
Phase 2 award--

(End of clause)


1852.234-70 and 1852.234-71  [Removed]

    6. Sections 1852.234-70 and 1852.234-71 are removed.

[FR Doc. 98-28240 Filed 10-20-98; 8:45 am]
BILLING CODE 7510-01-P