[Federal Register Volume 64, Number 168 (Tuesday, August 31, 1999)]
[Rules and Regulations]
[Pages 47409-47418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22048]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
[FRL-6428-3]
48 CFR Parts 1503, 1515, and 1552
Acquisition Regulation: Contracting by Negotiation
AGENCY: Environmental Protection Agency.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Environmental Protection Agency (EPA) is issuing this rule
to amend the EPA Acquisition Regulation (EPAAR) regarding contracting
by negotiation so that it will conform to the Federal Acquisition
Regulation, as revised by Federal Acquisition Circular (FAC) 97-02.
EFFECTIVE DATE: September 30, 1999.
FOR FURTHER INFORMATION CONTACT: Leigh Pomponio, U.S. Environmental
Protection Agency, Office of Acquisition Management (3802R), 401 M
Street, SW., Washington, DC 20460, (202) 564-4364.
SUPPLEMENTARY INFORMATION:
A. 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 was in substantive compliance with
the revised FAR, but extensive redesignation of EPAAR subparts and
sections was 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. No public comments were received.
B. Executive Order 12866
This 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).
C. Paperwork Reduction Act
The Paperwork Reduction Act does 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 rule impose no reporting, record-
keeping, or any compliance costs.
E. 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 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. Thus, the rule is not subject to
the requirements of sections 202 and 205 of the UMRA.
F. 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 regulation. This rule is not subject to
Executive Order 13045 because it does not establish an environmental
standard intended to mitigate health or safety risks.
G. 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 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
[[Page 47410]]
section 1(a) of Executive Order 12875 do not apply to this rule.
H. 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 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.
I. National Technology Transfer and Advancement Act of 1995
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C.
272 note) directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
This rule does not involve technical standards. Therefore, EPA did
not consider the use of any voluntary consensus standards.
J. Submission to Congress and the General Accounting Office
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of Congress and to the Comptroller General of the United
States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. This action is not
a ``major rule'' as defined by 5 U.S.C. 804(2). This rule will be
effective September 30, 1999.
Authority: The provisions of this regulation are issued under 5
U.S.C. 301; section 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:
1. 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]
2. 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:---------------------------------------------------------------
1. 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.
2. 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.
3. I agree to return to the Government all copies of proposals,
as well as any abstracts, upon completion of the evaluation.
----------------------------------------------------------------------
(Name and Organization)
----------------------------------------------------------------------
(Date of Execution)
(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.
3. Part 1515 is revised to read as follows.
PART 1515--CONTRACTING BY NEGOTIATION
Sec.
1515.000 Scope of part.
[[Page 47411]]
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.
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 as follows:
(a) Acquisitions having a potential value exceeding $25,000,000:
CCO.
(b) 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.
(c) 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
------------------------------------------------------------------------
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 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
[[Page 47412]]
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
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 in this paragraph,
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 0 to 6.
risk.
------------------------------------------------------------------------
(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.
[[Page 47413]]
(5) The weight factors discussed in this section 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. (26 U.S.C.)
(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 contractor, whereas a firm-fixed-price contract
would reflect a complete assumption of cost responsibility by the
[[Page 47414]]
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:
------------------------------------------------------------------------
Type of contract Percentage 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 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
[[Page 47415]]
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.
4. 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 (Aug 1999)
* * * * *
5. 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 (Aug 1999)
(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:
----------------------------------------------------------------------
----------------------------------------------------------------------
[End of provision]
Evaluation Factors for Award (Aug 1999)--Alternate I (Aug 2000)
(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:
----------------------------------------------------------------------
[End of provision]
----------------------------------------------------------------------
Evaluation Factors for Award, Aug 1999--Alternate II, Aug 2000
(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:
----------------------------------------------------------------------
----------------------------------------------------------------------
[End of provision]
Evaluation Factors for Award, Aug 1999--Alternate III, (Aug 2000)
(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:
----------------------------------------------------------------------
----------------------------------------------------------------------
(b) Factors and significant subfactors for technical
acceptability evaluation:
----------------------------------------------------------------------
----------------------------------------------------------------------
(c) Factors for past performance evaluation (optional):
----------------------------------------------------------------------
----------------------------------------------------------------------
[End of provision]
6. 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, (Aug 1999)
(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:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(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'' 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.
(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
[[Page 47416]]
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 to 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).
(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
[[Page 47417]]
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, Aug 1999. 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, Aug 1999. 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, Aug 1999. 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.
7. 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 Informaiton: (Aug 1999)
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:
----------------------------------------------------------------------
(h) Date Company Organized:------------------------------------------
(i) Manpower:
Total Employees:-------------------------------------------------------
Direct:----------------------------------------------------------------
Indirect:--------------------------------------------------------------
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/ Standard
actual cost cost
------------------------------------------------------------------------
Estimating System:
Job Order................................... ______ ______
Process..................................... ______ ______
[[Page 47418]]
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:
----------------------------------------------------------------------
----------------------------------------------------------------------
(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 Basis of
Fiscal year cost rate 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 agency:
----------------------------------------------------------------------
----------------------------------------------------------------------
(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)
8. A new 1552. 215-74 is added to read as follows:
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 (Aug 1999)
(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: August 6, 1999.
Betty L. Bailey,
Director, Office of Acquisition Management.
[FR Doc. 99-22048 Filed 8-30-99; 8:45 am]
BILLING CODE 6560-50-P