Source Selection and Evaluation

1. Source Selection and Evaluation Briefer: Raisa Barnes Office: SORDAC-KX Date: 1 May 2013

2. Agenda • Types of Source Selections • Source Selection Process/Government’s Responsibility • Source Selection Teams • Solicitation/Request for Proposal (RFP) • Proposal Submission and Evaluation Criteria • Evaluation and Decision Process

3. Exchanges with Industry Before receipt of proposals • Industry conferences • Public hearings • Market research • Pre-solicitation notices • Draft RFPs • Site visits

4. Source Selection Approaches • Two common types: • Lowest price technically acceptable (FAR 15.101-2 ) • Best value is expected to result from selection of a technically acceptable proposal with the lowest evaluated price • Trade-off Process (FAR 15.101-1) • In the best interest of the Government to consider award to other than the lowest priced offeror or other than the highest technically rated offeror • All evaluation factors and significant subfactors that will affect contract award and their relative importance shall be clearly stated • Possible Trade-offs: Technical, Past Performance, and Price/Cost

5. Source Selection Process • Receive procurement request package • Develop the acquisition strategy/plan • Prepare and issue the solicitation • Receive proposals • Conduct initial proposal evaluation • Establish competitive range • Conduct “meaningful” discussions • Request final proposal revision • Conduct final proposal evaluation • Source selection decision • Award • Debrief unsuccessful offerors Understanding the whole process before you begin is critical. DoD Source Selection Procedures Guide: http://www.acq.osd.mil/dpap/policy/policyvault/USA007183-10-DPAP.pdf

6. Acquisition Planning • Government’s Responsibility: • Identify the requirement • Determine how a successful offeror will be selected • Determine the criteria used to measure the merit of the proposal • Identify important discriminating factors & sub-factors • Identify the level of importance for each factor & sub-factor • Determine what information the offerors need to submit 6

7. Typical Source Selection Team Source Selection Authority (SSA) GOV’T ADVISORS - CONTRACTING - LEGAL - OTHER SOURCE SELECTION ADVISORY COUNCIL SOURCE SELECTION EVALUATION BOARD CHAIRMAN TECHNICAL TEAM PAST PERFORMANCE TEAM (PRAG) PRICE/ COST TEAM

8. Discussions Final Evaluation • Final SSEB Report • Findings • Ratings Competitive Range Determination (Briefing) Discussions Final Evaluation ENs Final Proposal Revision Evaluation Initial SSEB Report • Best Value Decision (Source Selection Decision Document (SSDD) Award Award w/o Discussion Initial Evaluation Evaluation Factors • Strengths • Deficiencies • Significant Weaknesses • Weaknesses • Uncertainties • Ratings Go/ No-Go E v a l u a t I o N Offeror Proposals Evaluation and Decision Process Debriefs

9. Instructions to Offerors Describes what the Government wants offerors to submit Evaluation Criteria How we’re going to evaluate what offerors submit Proposal Information Section L Section M Section L mirrors the information in Section M. The proposal provides the only information that can be evaluated during the source selection, Government’s knowledge of the offeror cannot be considered or evaluated…so make sure you clearly document the data requested in Section L to be evaluated in accordance with Section M 10

10. Factors & Sub-factors Spec Compliance QA Know the important discriminating Factors & Sub-factors Test Results KPP’s User Test Know the level of importance for each factor & sub-factor Know what the factors and sub-factors are, and clearly demonstrate how your technical approach will meet the requirement. Specify benefits to Government. 11

11. Section L tells you what you must submit. Section M tells the importance of each area, factor and sub-factor is detailed. The Areas/Factors/ Sub-factors relative order of importance must be included in the RFP. Proposal Instructions Section L TECHNICAL (Area) Product Samples (Factor) Test Results (Sub-factor) User Assessment (Sub-factor) Specifications (Sub-factor) Technical Approach (Factor) Specification Thresholds/Objectives (Sub-factor) Management (Factor) Quality Assurance (Sub-factor) Subcontracting (Sub-factor) Facilities (Sub-factor) PAST PERFORMANCE (Area) PRICE (Area) THINK--What information did the Government request? Make it clear in your proposal, answer the Government’s requirement.

12. Steps To Take • Know the Requirement • Know the criteria and standards stated in the RFP • Read through the request for proposal - one time in total • Read through again and know what the government is looking for, what are the key elements

13. Proposal Evaluation vs. Source Selection • PROPOSAL EVALUATION • Examination of the merits of each proposal against the requirements of the solicitation and rating the factors and sub-factors. • Performed by the Source Selection Evaluation Board (SSEB). • SOURCE SELECTION • Comparing the evaluated merits of each proposal against those of the other proposals, using the established weights of the factors and sub-factors, and selecting the proposal judged to represent the “best value” to the Government. • Performed by the Source Selection Authority (SSA). 14

14. General Information for Evaluation • Evaluations are consistent with the RFP criteria • Government cannot use what they know about the Offeror, it must be included in the Offeror’s proposal • Proposals are not evaluated against one another • proposals are evaluated against the criteria outlined in Section M • Evaluating the offeror’s unique approach to the requirement • Government will issue Evaluation Notices (ENs) as the tool to understand discrepancies or obtain clarifications • ENs are not providing or developing a solution for the Offeror, they are to obtain additional information • ENs are specific to individual concern within an Offeror’s proposal • All source selections are governed by the DoD Source Selection Procedures • http://www.acq.osd.mil/dpap/policy/policyvault/USA007183-10-DPAP.pdf

15. Evaluation Methodology • PAST PERFORMANCE • SUBSTANTIAL CONFIDENCE • SATISFACTORY CONFIDENCE • LIMITED CONFIDENCE • NO CONFIDENCE • UNKNOWN CONFIDENCE • PRICE • $ Total Evaluated Price (TEP) (FFP Contracts) • or • $ Most Probable Cost (MPC) (CPFF Contracts/Incentive Contracts) TECHNICAL Blue OUTSTANDING Purple GOOD Green ACCEPTABLE Yellow MARGINAL Red UNACCEPTABLE

16. Combined Technical/Risk Ratings

17. Evaluating a Technical Proposal Offeror’s Technical Proposal Strengths, Weaknesses, Significant Weaknesses & Deficiencies Factor Rating Technical Area Rating Factor 1 Factor 2 Factor 3

18. Technical Team Evaluation Process • Tech Team reviews and evaluates, as a whole • The technical approach described in the proposal • The SOW to ensure that it implements what is described in the proposal • The Basis of Estimates (BOEs) to ensure that the hours estimated to implement the approach described in the proposal are adequate to perform the work • Review estimating methodology to ensure it’s reasonable • The Bill of Materials to ensure that the material types and quantities necessary to execute the approach are included

19. Technical Sub-Factor Rating Offerors Product Samples Test Results User Assessment Specifications Technical Approach Spec (T/O) Management Quality Assurance Subcontracting Facilities SUBFACTORS C A B D

20. Roll-UpProcess TECHNICAL - AREA Product Samples - FACTOR Technical Approach - FACTOR Management - FACTOR C A B D L L H H L L L L M L H M To derive the Technical Area rating, roll-up the factor ratings

21. Initial Evaluation Results Offerors TECHNICAL C A B D L L H H

22. Past Performance Evaluation • The past performance evaluation factor assesses the degree of confidence the Government has in an offeror’s ability to supply products and services that meet users’ needs, based on a demonstrated record of performance • Provide recent contracts with similar scope/ requirements • Ensure current contacts are provided with name and phone numbers • Consider relevant subcontracts

23. Past Performance Relevancy Ratings

24. Past Performance Confidence Assessments

25. Initial Evaluation Results Offerors TECHNICAL PAST PERF C A B D L L H H Sub Sat Sat Limited

26. Cost/Price • Per FAR 15.304(c)(1) price or cost must be evaluated. • The level of detail of analysis required will vary among acquisitions depending on the complexity and circumstances of the acquisition, the type of product/services to be acquired, and the contract type. • Every solicitation should provide a description of the cost or price evaluation. The main purpose of the price evaluation is to determine a Fair, Reasonable, and Realistic price. • Reasonableness: Usually determined through competition; represents the price a prudent person would pay for an item or service under competitive market conditions • Realism: Cost type contracts, probable cost adjustments required. Linked to technical/risk rating, other Government costs, etc. • FAR Subpart 15.4 and the Contract Pricing Reference Guides (http://www.acq.osd.mil/dpap/cpf/contract_pricing_reference_guides.html) provide additional guidance on cost or price evaluation.

27. Coordination between Technical Team and Cost/Price Team is critical to ensure that the Technical Volume is in line with the Cost/Price Volume (i.e., Price is representative of the technical approach). ADVICE: Show all detailed calculations. Excel spreadsheets should be submitted with all formulas and links included. How did you arrive at your price? Price/Cost Volumes do not have page limits, explain your basis of estimate. What’s The Price? • Cost contracts • Govt. creates a Total Evaluated Price based on the Most Probable Cost (MPC) of the Offeror by making adjustments where necessary (i.e., direct and indirect rates, labor hours, material, etc.). • This helps to prevent the Gov’t from making a selection based on an unrealistic estimate and insures offeror understands the requirement). • For FFP contracts the TEP is the Offeror’s price • Government will not adjust the TEP • If the price quoted appears unrealistically low, it may influence performance risk rating and reflect a lack of understanding of the requirement

28. Major Elements In Cost Realism Analysis • Inputs • Labor Hours • Material (Type & Quantities) • Travel (# People,# Trips, Duration) • ODC (E.G. Computer Time) • Rates & Costs • Labor Rates • Indirect Rates • Material Costs • Profit/Fee • Terms and Conditions • Incentive Structure • Ceiling Price / Share Ratios RESPONSIBILITY TECH EVALUATOR COST TEAM PCO / BUYER PRICE ANALYST

29. Cost/PriceTeam • Cost Team Responsibilities: • Verifying Rates and Factors • Checking the cost proposal for completeness • Understanding pricing assumptions that may affect cost/ price • Coordination with Technical Team to ensure consistency between Technical Volume and Cost/Price Volume Coordination between Technical Team and Cost/Price Team is critical to ensure that the Technical Volume is in line with the Cost/Price Volume (i.e., Price is representative of the technical approach)

30. Cost/Price Realism Assessment Methodology • Criteria: Cost proposals evaluated for: • Consistency with technical proposals • Clear understanding of solicitation requirements • Sound approach to satisfying these requirements • Methodology: • Labor and ODC evaluated for realism in relation to RFP and offeror ‘s unique approach • Cost impact of Technical/Management risks assessed • Costs adjusted to eliminate competitive advantage from proposed use of Gov’t property or facilities • Most Probable Cost (MPC) developed for each offeror’s proposal • Technique: • Comparison to program cost estimate, analogous programs, parametric models (SEER-SEM), historical databases, and SSEB engineering assessments

31. Initial Evaluation Results Offerors TECHNICAL PAST PERF PRICE C A B D L L H H Sub Sat Sat Limited $10M $9.8M $12M $15M Government will use the initial evaluations to determine if weakness, significant weakness, and/or deficiencies can be corrected. FAR 15.306(c)(1) states “…competitive range comprised of all of the most highly rated proposals”. Proposals with no chance of winning should not be carried forward.

32. Competitive Range & Discussions • SSA approves competitive range decision or to award without discussions • Leave in all offerors that have a reasonable chance to win. Eliminate from the CRD all others If an offeror has no chance of award, the Government is doing them a favor by removing them. They may not like it at first but in the long run it is best for all involved.

33. Competitive Range Decision & Discussions • Evaluation Notices (ENs) are given to each offeror still in the competitive range addressing any identified weaknesses, significant weaknesses, deficiencies or exceptions. • Discussions allow the offeror to understand issues and potentially resolve them. • At the conclusion of discussions, offerors submit a Final Proposal Revision Proposals are evaluated against the evaluation standards in the RFP and not compared to the other vendors until the comparative analysis.

34. Exchanges w/ Offerors FAR 15.306 • Source Selection Vocabulary • Clarifications – limited exchanges with offerors when award w/o discussions is contemplated. It allows for Q and A on past performance issues or to correct minor clerical errors. • Communications – contact with the offerors on matters that may determine if they may or may not be in the competitive range such as adverse past performance or ambiguities. Contractors cannot revise their proposal. • Discussions - negotiations that occur after any competitive range decision that cover weaknesses, significant weaknesses and deficiencies with the idea that the offerors will revise their proposal.

35. Source Selection Process- End Game • Receive requirement • Prepare the acquisition strategy/plan • Prepare the source selection plan • Prepare and issue the solicitation • Receive proposals • Conduct (initial) proposal evaluation • Establish competitive range • Conduct “meaningful” discussions • Request final proposal revision • Conduct final proposal evaluation • Source selection • Award • Debrief unsuccessful offerors

36. Questions ?