Small Dollar Source Selections

1. Small Dollar Source Selections Welcome to the AFMC Small Dollar Source Selection Training Session. This is a just-in-time briefing presented for your information as you prepare for a source selection under $10 million. 16 Jul 04: This briefing is in accordance with AFAC 2004-0721. 25Aug04: Corrected link to feedback site on last slide. 21Oct05: AFAC 2005-0810 and administrative updates. 2Oct09: AFAC 2009-0318 updates. Welcome to the AFMC Small Dollar Source Selection Training Session. This is a just-in-time briefing presented for your information as you prepare for a source selection under $10 million. 16 Jul 04: This briefing is in accordance with AFAC 2004-0721. 25Aug04: Corrected link to feedback site on last slide. 21Oct05: AFAC 2005-0810 and administrative updates. 2Oct09: AFAC 2009-0318 updates.

2. 2 Available Training Pre-Solicitation: Market Research (AFMC) Risk Assessment (AFMC) Requirements Document Development (AFMC) Cost & Price Planning (SAF ACE) Section L & M Development (SAF ACE) Proposal Evaluation: Evaluation of Mission Capability & Proposal Risk (SAF ACE) Performance Confidence Assessment (SAF ACE) Cost & Price Evaluation - two options: Firm Fixed Price (SAF ACE) Cost Reimbursable (SAF ACE) Debriefings (SAF ACE) Also Available: Performance Price Tradeoff (SAF ACE) Small Dollar Source Selections (AFMC) Other AFMC and SAF ACE Training Modules are available. See your local ACE or Acquisition Support personnel.Other AFMC and SAF ACE Training Modules are available. See your local ACE or Acquisition Support personnel.

3. 3 Training Objective Provide introduction to source selection methods for lower dollar acquisitions of varying complexity Also applicable to higher dollar, non-complex acquisitions This training session assumes source selection is not using Simplified Acquisition procedures and is =$10M The procedures we discuss here today are applicable to source selections less than or equal to $10 million; however, many of the procedures can be applied to higher dollar, non-complex source selections as well. The procedures we discuss here today are applicable to source selections less than or equal to $10 million; however, many of the procedures can be applied to higher dollar, non-complex source selections as well.

4. 4 What Is Source Selection? Please feel free to ask questions as we go through the briefing.Please feel free to ask questions as we go through the briefing.

5. 5 What Is Source Selection? Competitive negotiated acquisitions Source Selection Procedures are addressed in FAR Part 15 - Contracting by Negotiation FAR Part 15.002(b) - Competitive procedures are intended to: Minimize complexity of the solicitation, evaluation and the source selection decision Foster an impartial and comprehensive proposal evaluation Lead to selection of the proposal representing the best value to the Government Why do we use competitive acquisition procedures? “The vision of the Federal Acquisition system is to deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives. The Federal Acquisition system will—(1) Satisfy the customer in terms of cost, quality, and timeliness of the delivered product or service by, for example—(i) Maximizing the use of commercial products and services; (ii) Using contractors who have a track record of successful past performance or who demonstrate a current superior ability to perform; and (iii) Promoting competition; (2) Minimize administrative cost; (3) Conduct business with integrity, fairness, and openness; and (4) Fulfill public policy objectives. (FAR 1.102)” FAR Part 15 procedures are required for all competitive negotiations except for: Basic Research where Broad Agency Announcements (BAAs) are used; Small Business Innovative Research (SBIR)/Small Business Technology Transfer (STTR); Architect-engineer services in accordance with FAR 36; Acquisitions using Simplified Acquisition procedures; and Acquisitions less than $1million. FAR Part 8 Federal Supply Schedule addresses competitive procedures, but those are Fair Opportunities and not source selection. Why do we use competitive acquisition procedures? “The vision of the Federal Acquisition system is to deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives. The Federal Acquisition system will—(1) Satisfy the customer in terms of cost, quality, and timeliness of the delivered product or service by, for example—(i) Maximizing the use of commercial products and services; (ii) Using contractors who have a track record of successful past performance or who demonstrate a current superior ability to perform; and (iii) Promoting competition; (2) Minimize administrative cost; (3) Conduct business with integrity, fairness, and openness; and (4) Fulfill public policy objectives. (FAR 1.102)” FAR Part 15 procedures are required for all competitive negotiations except for: Basic Research where Broad Agency Announcements (BAAs) are used; Small Business Innovative Research (SBIR)/Small Business Technology Transfer (STTR); Architect-engineer services in accordance with FAR 36; Acquisitions using Simplified Acquisition procedures; and Acquisitions less than $1million. FAR Part 8 Federal Supply Schedule addresses competitive procedures, but those are Fair Opportunities and not source selection.

6. 6 The Best Value Continuum There is a continuum of tools to simplify and streamline the process for selecting your contractor and getting on contract. FAR Part 15 establishes various acquisition processes and techniques that may be used to obtain best value in negotiated acquisitions by using any one or a combination of source selection approaches. Two of the processes are (1) tradeoff and (2) lowest price technically acceptable source selection. The AFFARS added more definition to the tradeoff process by establishing Performance Price Tradeoff (PPT) as one of the agency’s alternative evaluation processes. There is a continuum of tools to simplify and streamline the process for selecting your contractor and getting on contract. FAR Part 15 establishes various acquisition processes and techniques that may be used to obtain best value in negotiated acquisitions by using any one or a combination of source selection approaches. Two of the processes are (1) tradeoff and (2) lowest price technically acceptable source selection. The AFFARS added more definition to the tradeoff process by establishing Performance Price Tradeoff (PPT) as one of the agency’s alternative evaluation processes.

7. 7 Lowest Price Technically Acceptable (LPTA) Process Appropriate when best value is expected from selection of technically acceptable proposal with the lowest evaluated price Past Performance does not have to be an evaluation factor Tradeoffs are not permitted Proposals are evaluated for technical acceptability but not ranked using non-cost/price factors Exchanges may occur While PPT and LPTA are considered part of the best value continuum, they do not afford the flexibility of the full tradeoff process. Past performance does not have to be an evaluation factor in LPTA, as with other types of source selection processes, if the contracting officer documents the file pursuant to FAR 15.304(c)(3)(iv). The evaluation of past performance in a LPTA source selection should be thoroughly discussed with the contracting officer, requirements personnel and legal, if applicable. Since the LPTA process is very rigid as shown above and award must be made to the lowest price technically acceptable offeror, past performance normally becomes a part of the contracting officer’s responsibility determination under FAR 9.1. (from AF Past Performance Guide, Chapter 6, Jul 2005) If the contracting officer determines that a small business’ past performance is not acceptable, the matter shall be referred to the Small Business Administration for a Certificate of Competency determination. FAR 15.101-2(b)(1). While PPT and LPTA are considered part of the best value continuum, they do not afford the flexibility of the full tradeoff process. Past performance does not have to be an evaluation factor in LPTA, as with other types of source selection processes, if the contracting officer documents the file pursuant to FAR 15.304(c)(3)(iv). The evaluation of past performance in a LPTA source selection should be thoroughly discussed with the contracting officer, requirements personnel and legal, if applicable. Since the LPTA process is very rigid as shown above and award must be made to the lowest price technically acceptable offeror, past performance normally becomes a part of the contracting officer’s responsibility determination under FAR 9.1. (from AF Past Performance Guide, Chapter 6, Jul 2005) If the contracting officer determines that a small business’ past performance is not acceptable, the matter shall be referred to the Small Business Administration for a Certificate of Competency determination. FAR 15.101-2(b)(1).

8. 8 Performance Price Trade-Off (PPT) Process Permits tradeoff between price and past performance confidence Technically acceptable proposals are determined then tradeoffs are made between price and past performance evaluation to determine successful offeror Technical factors may be evaluated on pass/fail basis only but cannot be traded off for price Only factor being traded off with price is past performance Need to determine relative importance of past performance and price factors (equal, more significant, less significant) In a PPT the only factor traded off with cost/price is past performance. You may evaluate technical factors, but they are not traded off. Basically, PPT involves: a pass/fail evaluation for technical acceptability (if necessary) and an assessment of performance confidence. For construction efforts and other services that have been typically acquired by IFB, a technical evaluation would not be appropriate. Also, commercial services where market research has shown that technical evaluations are not standard commercial practice should not include a technical evaluation as well as other straight forward requirements. After evaluation of technical acceptability and performance confidence, a trade-off decision is made. The decision will be made to either award to the lowest price technically acceptable offeror or to award to a higher priced, technically acceptable offeror who has a higher performance confidence. In a PPT the only factor traded off with cost/price is past performance. You may evaluate technical factors, but they are not traded off. Basically, PPT involves: a pass/fail evaluation for technical acceptability (if necessary) and an assessment of performance confidence. For construction efforts and other services that have been typically acquired by IFB, a technical evaluation would not be appropriate. Also, commercial services where market research has shown that technical evaluations are not standard commercial practice should not include a technical evaluation as well as other straight forward requirements. After evaluation of technical acceptability and performance confidence, a trade-off decision is made. The decision will be made to either award to the lowest price technically acceptable offeror or to award to a higher priced, technically acceptable offeror who has a higher performance confidence.

9. 9 Full Tradeoff Process The full tradeoff process will be covered here only as it relates to lower dollar value acquisitions of varying complexity and higher dollar value acquisitions of low complexity. The full tradeoff process will be covered here only as it relates to lower dollar value acquisitions of varying complexity and higher dollar value acquisitions of low complexity.

10. 10 Team Composition Lowest Price Technically Acceptable PCO Technical, if required Performance Price Trade-off PCO & Technical Full Trade-off PCO Technical Others based upon relative complexity of acquisition Under LPTA, technical team members may not be required when using QPL, NSN, part #, etc. The team composition depends on the complexity of your acquisition. Smaller teams tend to be more efficient.Under LPTA, technical team members may not be required when using QPL, NSN, part #, etc. The team composition depends on the complexity of your acquisition. Smaller teams tend to be more efficient.

11. 11 Source Selection Activities

12. 12 Source Selection Activities This is a flow chart of a streamlined acquisition process with parallel processes occurring throughout its evolution. It is designed primarily to graphically show the logical flow for RFP development and ensure the connectivity between the different sections of the RFP. By working together as a team, including Industry, each step contributes to and helps build the next step. This is critical to a successful and smooth source selection. The process begins with the identification of requirements and funding for the project. The next steps are to conduct market research and a risk assessment. Market research tells you what’s currently available, who’s in the industry, and how industry responds to similar requirements. Risk assessment determines the probability of occurrence and the impact each event would have to your requirement should it occur. Reviewing the requirements, knowing the market, and identifying and classifying risks then helps develop the key objectives that need to be stated in the requirements document. Notice the arrows between risk assessment, market research and developing the requirements document are interactive. It is important to ensure a relationship between requirements, the market, risks and key objectives is established, and that your focus is on the risks having the most critical impact. This is a flow chart of a streamlined acquisition process with parallel processes occurring throughout its evolution. It is designed primarily to graphically show the logical flow for RFP development and ensure the connectivity between the different sections of the RFP. By working together as a team, including Industry, each step contributes to and helps build the next step. This is critical to a successful and smooth source selection. The process begins with the identification of requirements and funding for the project. The next steps are to conduct market research and a risk assessment. Market research tells you what’s currently available, who’s in the industry, and how industry responds to similar requirements. Risk assessment determines the probability of occurrence and the impact each event would have to your requirement should it occur. Reviewing the requirements, knowing the market, and identifying and classifying risks then helps develop the key objectives that need to be stated in the requirements document. Notice the arrows between risk assessment, market research and developing the requirements document are interactive. It is important to ensure a relationship between requirements, the market, risks and key objectives is established, and that your focus is on the risks having the most critical impact.

13. 13 External Inputs Consist of two principal components User Requirements – documented pursuant to local procedures Funding commensurate with requirement These inputs must be firm in order to proceed with the next steps in the process Baseline established herein used for market research, risk assessment, requirements document development This is the starting block for any acquisition, competitive or noncompetitive.This is the starting block for any acquisition, competitive or noncompetitive.

14. 14 Market Research Defined: An analysis of the market to determine The extent to which non-developmental or commercial products or services may be used to fulfill government requirements The potential offerors Benefits Increases your knowledge so you can design the most appropriate acquisition strategy Process Many options e.g. industry days, web searches, industry associations, Subject Matter Experts…. See local ACE for specific training Market Research policy is dictated by Federal Acquisition Regulation (FAR) Title: FAR -- Part 10; Market Research is required before developing new requirements documents for an acquisition; before soliciting offers for acquisitions with an estimated value in excess of the simplified acquisition threshold….and on an ongoing basis by an agency. (FAR Part 10) A separate training module on Market Research is available from your ACE or Acquisition Support experts. Market Research policy is dictated by Federal Acquisition Regulation (FAR) Title: FAR -- Part 10; Market Research is required before developing new requirements documents for an acquisition; before soliciting offers for acquisitions with an estimated value in excess of the simplified acquisition threshold….and on an ongoing basis by an agency. (FAR Part 10) A separate training module on Market Research is available from your ACE or Acquisition Support experts.

15. 15 Risk Assessment Defined: An analysis of the pre-mitigated risks associated with the successful completion of required tasks. These should include cost, schedule, and performance requirements, and their interrelationships. Benefits Those risks considered “high” should be considered as viable discriminators when developing evaluation factors, and in determining the appropriate acquisition strategy. Helps focus the RFP and the resultant contract on what’s important Reduces resources necessary to conduct the source selection and in contract administration Process: Several tools are available to facilitate process See local ACE for specific training It is prudent to perform some form of Risk Assessment for all competitive acquisitions in order to identify high-risk areas, to determine discriminators for source selections, and to identify incentive focus areas. A separate training module on Risk Assessment is also available from your ACE or Acquisition Support experts.It is prudent to perform some form of Risk Assessment for all competitive acquisitions in order to identify high-risk areas, to determine discriminators for source selections, and to identify incentive focus areas. A separate training module on Risk Assessment is also available from your ACE or Acquisition Support experts.

16. 16 Risk Assessment – Discriminators Those areas, topics, or requirements that will enable the source selection evaluation team to distinguish among offerors These may include something as broad as past performance or price – or Something as narrowly focused as a particular desired capability expressed in the requirements document The identification of discriminators is arguably the most important determinant in establishing contract objectives, incentives, and evaluation factors. At this stage, draft the evaluation factors Use those factors to determine best source selection process Discriminators are the significant aspects of an acquisition that are expected to distinguish one proposal from another, thus having an impact on the ultimate selection decision. By using these discriminators, the source selection team can provide the Source Selection Authority with an evaluation that distinguishes among competing proposals in those areas the government believes are most important. This facilitates selecting the offeror(s) most likely to deliver the best value to the government and to perform the resulting contract(s) successfully. Discriminators are the significant aspects of an acquisition that are expected to distinguish one proposal from another, thus having an impact on the ultimate selection decision. By using these discriminators, the source selection team can provide the Source Selection Authority with an evaluation that distinguishes among competing proposals in those areas the government believes are most important. This facilitates selecting the offeror(s) most likely to deliver the best value to the government and to perform the resulting contract(s) successfully.

17. 17 Requirements Document Defined: A performance based document that defines the government need without dictating the specific design solution. Exceptions include NSN, QPL, construction, . . . Benefits A well written requirements document can reduce government costs by allowing commercial practices and contractor innovation to drive the solution Process It is almost always better to start with a clean sheet, as opposed to working backwards from an existing document Focus on what is absolutely essential to the user/customer Less is generally more See local ACE for assistance

18. 18 Industry/User Involvement Industry is the customer of the RFP The user is the customer of the eventual product or service produced by industry in order to meet government requirements Leaving either out of the early phases of the competitive process is short sighted, and will likely lead to surprises during source selection or contract execution Involve all stakeholders in Market research Risk Assessment Development of requirements document A “stakeholder” is any person or organization that is affected by or has an impact on a system or decision. They need to be involved in the source selection process.A “stakeholder” is any person or organization that is affected by or has an impact on a system or decision. They need to be involved in the source selection process.

19. 19 Source Selection Activities Next, we’ll discuss some of the considerations for developing an acquisition strategy.Next, we’ll discuss some of the considerations for developing an acquisition strategy.

20. 20 Acquisition Strategy For the purposes of this training, the acquisition strategy consists of four parts: Determination of contract type/length Milestones of the pre-award process Selection of the source selection process Budget considerations The results of market research, the risk assessment, and user requirements are important considerations in making all of the required decisions

21. 21 Acquisition Strategy -Contract Type/Length Contract type should be determined based on the schedule, cost and performance risks identified during the risk assessment Should high performance risk be identified, precluding accurate cost estimation within a reasonable degree, a Cost-Reimbursement contract vehicle may be appropriate Should there be little performance risk, a Fixed Price contract may be the better choice Contract length for product acquisitions should be influenced by the contractors’ feedback regarding how long it will actually take to complete contract requirements Contract length for all acquisitions is influenced by stability of requirements, statutes, funding, and ability to price The objective is to select a contract type that will result in reasonable contractor risk and provide the contractor with the greatest incentive for efficient and economical performance. FAR 16.104 lists several factors to consider when selecting contract type. The objective is to select a contract type that will result in reasonable contractor risk and provide the contractor with the greatest incentive for efficient and economical performance. FAR 16.104 lists several factors to consider when selecting contract type.

22. 22 Acquisition Strategy –Milestones The milestones to contract award are a required component of most acquisition planning documents and Source Selection Plans The results of the acquisition team’s market research and risk assessment should contribute to the scheduling of these events For example, should a significant number of proposals be anticipated, the time allotted for the source selection should be longer

23. 23 Acquisition Strategy –Source Selection Process As mentioned earlier, there are three source selection processes applicable to acquisitions =$10M Lowest Price Technically Acceptable Performance Price Tradeoff Full Tradeoff Based upon the discriminators identified through the risk assessment process, one of the processes should be chosen, and documented in the acquisition strategy and source selection plan Source selections under the simplified acquisition threshold and commercial acquisitions up to $5M use FAR Part 13 procedures and are not covered in this training.Source selections under the simplified acquisition threshold and commercial acquisitions up to $5M use FAR Part 13 procedures and are not covered in this training.

24. 24 Acquisition Strategy –Budget Considerations There are three principal budget considerations that are tied to the acquisition strategy Type(s) of money (i.e. 3600 for R&D, or 3400 for O&M) Amount (do you have enough to cover the requirement?) If not, what requirement can you live without? Are there alternative ways to meet the requirement? Annual distribution Is the funding available at the right time and in the right increments? The risk assessment should be able to help the team make all required acquisition strategy decisions pertaining to funding

25. 25 Source Selection Activities Next we’ll discuss the development of the Request for Proposal (RFP) and what’s required before its release. Next we’ll discuss the development of the Request for Proposal (RFP) and what’s required before its release.

26. 26 Request for Proposals Requirements Evaluation Factors (M) Instructions to Offerors (L) Other contractual information While the Request for Proposal has many components, our focus is on the Evaluation Factors (Section M) and Instructions to Offerors (Section L). You should establish a clear relationship between the acquisition documents. Proposal preparation instructions and evaluation factors must track to requirements set forth in the SOO/SOW and the results of risk assessment. While the Request for Proposal has many components, our focus is on the Evaluation Factors (Section M) and Instructions to Offerors (Section L). You should establish a clear relationship between the acquisition documents. Proposal preparation instructions and evaluation factors must track to requirements set forth in the SOO/SOW and the results of risk assessment.

27. 27 Evaluation Factors Specific characteristics that are tied to significant requirements having an impact on the source selection decision Expected to be discriminators between the proposals Uniform baseline against which an offeror’s solution is evaluated to determine its value to the Government Used to measure how well each offeror meets RFP requirements Established specifically for each source selection Written by evaluation team Derived from market research and risk assessment Approved by Source Selection Authority Used to determine which source selection process is appropriate for the acquisition AFFARS Mandatory Procedures MP5315.3, paragraph 4.4 states: “Evaluation factors and subfactors represent those specific characteristics that are tied to significant requirements having an impact on the source selection decision and that are expected to be discriminators. They are the uniform baseline against which each offeror’s proposal is compared allowing the government to make a best value determination. The evaluation factors and subfactors and their relative weights shall be set forth in the evaluation criteria (Section M or equivalent provision) of the solicitation in enough depth to communicate how the proposal will be evaluated and the rating determined. They may be quantitative, qualitative, or a combination of both. The evaluation factors and subfactors shall be the primary determinant of the detailed information requested in the solicitation’s instructions to offerors (Section L or equivalent provision).”AFFARS Mandatory Procedures MP5315.3, paragraph 4.4 states: “Evaluation factors and subfactors represent those specific characteristics that are tied to significant requirements having an impact on the source selection decision and that are expected to be discriminators. They are the uniform baseline against which each offeror’s proposal is compared allowing the government to make a best value determination. The evaluation factors and subfactors and their relative weights shall be set forth in the evaluation criteria (Section M or equivalent provision) of the solicitation in enough depth to communicate how the proposal will be evaluated and the rating determined. They may be quantitative, qualitative, or a combination of both. The evaluation factors and subfactors shall be the primary determinant of the detailed information requested in the solicitation’s instructions to offerors (Section L or equivalent provision).”

28. 28 Evaluation Factors Possible evaluation factors Mission Capability Proposal Risk Evaluation process The choice of the evaluation factors determines which source selection process is appropriate LPTA, PPT, or FTO Factors are selected based on results of Market Research, Risk Assessment and Requirements Document These are the four evaluation factors available for Air Force source selections. MAJCOMs and DRUs may establish alternative factors or subfactors for specific classes of “other contracting” acquisitions when required to conduct an effective and efficient evaluation of offers. Check with your local ACE or Acquisition Support experts if you want to consider other evaluation factors.These are the four evaluation factors available for Air Force source selections. MAJCOMs and DRUs may establish alternative factors or subfactors for specific classes of “other contracting” acquisitions when required to conduct an effective and efficient evaluation of offers. Check with your local ACE or Acquisition Support experts if you want to consider other evaluation factors.

29. 29 Evaluation Factors – Mission Capability For FTO, mission capability is evaluated For LPTA and PPT, technical acceptability is evaluated on pass/fail basis The evaluation provides for two distinct assessments Technical rating of the offeror’s capability to satisfy the Government’s requirements Risk rating assesses the likelihood or risk that the proposed approach will cause significant disruption of schedule, increased cost or degraded performance All technical requirements are not evaluated here; only those characteristics, or discriminators, that truly differentiate one proposal from another If FAR 19.1202 applies, the requirements for Small Disadvantaged Business (SDB) participation must be evaluated either as a separate subfactor, or as part of one of the subfactors. Systems Engineering shall be a mission capability subfactor in all ACAT program acquisitions, and in all “other contracting” acquisitions where systems engineering effort is required. Ref MP 5315.3, paragraph 4.4.1.1. Mission Capability Risk can be summarized by one simple question—”Can the offeror actually perform the work proposed?” If FAR 19.1202 applies, the requirements for Small Disadvantaged Business (SDB) participation must be evaluated either as a separate subfactor, or as part of one of the subfactors. Systems Engineering shall be a mission capability subfactor in all ACAT program acquisitions, and in all “other contracting” acquisitions where systems engineering effort is required. Ref MP 5315.3, paragraph 4.4.1.1. Mission Capability Risk can be summarized by one simple question—”Can the offeror actually perform the work proposed?”

30. 30 Evaluation Factors – Mission Capability, cont’d MC Technical Evaluation is expressed by color ratings: blue/exceptional, green/acceptable, yellow/marginal, or red/unacceptable Narrative assessment is expressed in terms of strengths, uncertainties, and deficiencies MC Risk Evaluation is expressed by Low, Moderate, High, Unacceptable risk ratings Narrative assessment is expressed in terms of weaknesses Subjective judgment implicit in the evaluation When subfactors are used, establish the minimum number necessary for the evaluation of proposals. Mission Capability Technical shall be rated at the subfactor level, if used, using the color ratings found in MP5315.3, Table 1; these subfactor ratings shall not be rolled up to an overall color rating. Mission Capability Risk evaluation shall use the ratings in MP5315.3, Table 2.When subfactors are used, establish the minimum number necessary for the evaluation of proposals. Mission Capability Technical shall be rated at the subfactor level, if used, using the color ratings found in MP5315.3, Table 1; these subfactor ratings shall not be rolled up to an overall color rating. Mission Capability Risk evaluation shall use the ratings in MP5315.3, Table 2.

31. 31 Evaluation Factors – Performance Confidence Assessment Assesses the degree of confidence the AF has in an offeror’s ability to provide products/services based on his demonstrated record of contract compliance Evaluation is expressed by Confidence Ratings: Substantial, Satisfactory, Limited, or No Applies to FTO and PPT over certain thresholds, and could apply to LPTA In the 1994 Federal Acquisition Streamlining Act (FASA), Congress acknowledged that it is appropriate and relevant for the Government to consider a contractor’s past performance in evaluating whether that contractor should receive future work. The main purpose of the past performance evaluation is to appropriately consider each offeror’s demonstrated record of contract compliance in supplying products and services that meet users’ needs. The past performance evaluation results in an assessment that expresses the Air Force’s confidence in the offeror’s ability to fulfill the solicitation requirements while meeting schedule, budget, and performance quality constraints. The performance confidence assessment is normally assessed at an overall factor level after evaluating aspects of the offeror’s recent past performance, focusing on and targeting performance that is relevant to the mission capability subfactors and cost or price. (MP5315.3, paragraph 5.5.3) Use the ratings as defined in MP5315.3, Table 3. Thresholds for evaluating past performance are: (1) $5 million for systems and operations support, (2) $1 million for services, information technology, and (3) $100,000 for fuels or health care. (Director of Defense Procurement Class Deviation 99-O0002 dated January 29, 1999). Under LPTA, past performance need not be an evaluation factor if the Contracting Officer documents the file with the reason (FAR 15.304(c)(3)(iv). If the Contracting Officer elects to consider past performance as an evaluation factor and subsequently determines that a small business’ past performance is not acceptable, the matter shall be referred to the Small Business Administration for a Certificate of Competency determination (FAR 15.101-2(b)(1)). MP 5315.304, para 4.4.1.3….A past performance evaluation is required in accordance with Director of Defense Procurement Class Deviation 99-00002 dated 29 Jan 99, which states the requirement thresholds are: $5 million for systems and operations support; $1 million for services, information technology; and $100,000 for fuels or health care. A past performance evaluation may be accomplished for acquisitions below these thresholds at the discretion of the Source Selection Authority. Past Performance may be established as the most important evaluation factor and shall be at least as important as the most important non-cost factor. For LPTA, see FAR 15.101-2(b)In the 1994 Federal Acquisition Streamlining Act (FASA), Congress acknowledged that it is appropriate and relevant for the Government to consider a contractor’s past performance in evaluating whether that contractor should receive future work. The main purpose of the past performance evaluation is to appropriately consider each offeror’s demonstrated record of contract compliance in supplying products and services that meet users’ needs. The past performance evaluation results in an assessment that expresses the Air Force’s confidence in the offeror’s ability to fulfill the solicitation requirements while meeting schedule, budget, and performance quality constraints. The performance confidence assessment is normally assessed at an overall factor level after evaluating aspects of the offeror’s recent past performance, focusing on and targeting performance that is relevant to the mission capability subfactors and cost or price. (MP5315.3, paragraph 5.5.3) Use the ratings as defined in MP5315.3, Table 3. Thresholds for evaluating past performance are: (1) $5 million for systems and operations support, (2) $1 million for services, information technology, and (3) $100,000 for fuels or health care. (Director of Defense Procurement Class Deviation 99-O0002 dated January 29, 1999). Under LPTA, past performance need not be an evaluation factor if the Contracting Officer documents the file with the reason (FAR 15.304(c)(3)(iv). If the Contracting Officer elects to consider past performance as an evaluation factor and subsequently determines that a small business’ past performance is not acceptable, the matter shall be referred to the Small Business Administration for a Certificate of Competency determination (FAR 15.101-2(b)(1)). MP 5315.304, para 4.4.1.3….A past performance evaluation is required in accordance with Director of Defense Procurement Class Deviation 99-00002 dated 29 Jan 99, which states the requirement thresholds are: $5 million for systems and operations support; $1 million for services, information technology; and $100,000 for fuels or health care. A past performance evaluation may be accomplished for acquisitions below these thresholds at the discretion of the Source Selection Authority. Past Performance may be established as the most important evaluation factor and shall be at least as important as the most important non-cost factor. For LPTA, see FAR 15.101-2(b)

32. 32 Evaluation Factors – Cost/Price Evaluated for reasonableness and realism in accordance with FAR 15.4, as supplemented Mandatory for all source selection processes FAR 15.305(a)(1) “Cost or price evaluation. Normally, competition establishes price reasonableness. Therefore, when contracting on a firm-fixed-price….basis, comparison of the proposed prices will usually satisfy the requirement to perform a price analysis, and a cost analysis need not be performed….When contracting on a cost-reimbursement basis, evaluations shall include a cost realism analysis to determine what the Government should realistically expect to pay for the proposed effort, the offeror’s understanding of the work, and the offeror’s ability to perform the contract.” MP5315.3, paragraph 5.5.3: Cost or Price is normally not rated with adjective ratings, rather the proposed and, if applicable, evaluated total cost/price are presented with narrative descriptions of reasonableness, realism, affordability, etc. to the Source Selection Authority.FAR 15.305(a)(1) “Cost or price evaluation. Normally, competition establishes price reasonableness. Therefore, when contracting on a firm-fixed-price….basis, comparison of the proposed prices will usually satisfy the requirement to perform a price analysis, and a cost analysis need not be performed….When contracting on a cost-reimbursement basis, evaluations shall include a cost realism analysis to determine what the Government should realistically expect to pay for the proposed effort, the offeror’s understanding of the work, and the offeror’s ability to perform the contract.” MP5315.3, paragraph 5.5.3: Cost or Price is normally not rated with adjective ratings, rather the proposed and, if applicable, evaluated total cost/price are presented with narrative descriptions of reasonableness, realism, affordability, etc. to the Source Selection Authority.

33. 33 Sample Source Selection Factor Evaluation Matrix – Full Tradeoff This matrix depicts the evaluation for a Full Tradeoff source selection. This matrix depicts the evaluation for a Full Tradeoff source selection.

34. 34 Instructions to Offerors What is ITO Proposal preparation instructions for offerors Format and content Section L in non-commercial RFPs Steps to develop ITO Look at your evaluation factors Only ask for what is necessary to evaluate those factors You have to evaluate everything you ask for You have to determine that offeror meets all RFP requirements The Instructions to Offerors and Evaluation Factors must track to requirements and risk assessment. A good tool for government and industry to use for tracking is a Cross Reference Matrix.The Instructions to Offerors and Evaluation Factors must track to requirements and risk assessment. A good tool for government and industry to use for tracking is a Cross Reference Matrix.

35. 35 Source Selection Plan (SSP) Contents: Brief description of the requirement Evaluation factors and relative importance Evaluation process Techniques to be used in evaluating proposals Communications with industry and among government personnel Signed by the SSA prior to RFP release The SSP is Part I of the Simplified Source Selection Report Does not have to be a formal plan Can be documented in briefing charts MP5315.3, paragraph 4.3.3 specifies the Source Selection Plan contents. An abbreviated process for SSP’s is described there for acquisitions under $10 million. Also see AF IG5315.303 Source Selection Plan Guide for a template that should be tailored for your specific acquisition. The Source Selection Plan must be approved prior to release of the RFP. The evaluation “process” above refers to items such as Lowest Price Technically Acceptable or Performance Price Tradeoff. “Techniques” refers to items such as oral presentations, first article demonstrations, and so forth. MP5315.3, paragraph 4.3.3 specifies the Source Selection Plan contents. An abbreviated process for SSP’s is described there for acquisitions under $10 million. Also see AF IG5315.303 Source Selection Plan Guide for a template that should be tailored for your specific acquisition. The Source Selection Plan must be approved prior to release of the RFP. The evaluation “process” above refers to items such as Lowest Price Technically Acceptable or Performance Price Tradeoff. “Techniques” refers to items such as oral presentations, first article demonstrations, and so forth.

36. 36 Source Selection Activities Next we’ll go over the evaluation process itself for LPTA, PPT and Full Tradeoff acquisitions. The Performance Price Tradeoff training module covers evaluation of PPT acquisitions in more detail, and there are additional modules covering evaluation of Full Tradeoff source selections.Next we’ll go over the evaluation process itself for LPTA, PPT and Full Tradeoff acquisitions. The Performance Price Tradeoff training module covers evaluation of PPT acquisitions in more detail, and there are additional modules covering evaluation of Full Tradeoff source selections.

37. 37 LPTA Evaluation Steps Establish evaluation factors and subfactors before solicitation release, i.e., technical acceptability Tech eval shall document evaluations in sufficient detail to explain each pass/fail decision Award made to lowest evaluated cost (price) offer that meets all minimum mandatory criteria PCO makes award decision and ensures award decision is documented The evaluation factors and subfactors that determine technical acceptability shall go in Section M. If the contracting officer established past performance as an evaluation factor, it shall be evaluated in accordance with FAR 15.305, not only on a pass/fail basis which is a responsibility determination under FAR 9.1. However, the comparative assessment in FAR 15.305(a)(2)(i) does not apply. Trade-offs are not permitted with LPTA, so it is not necessary to do a technical evaluation on all offers prior to determination of apparent low offer. PCO makes award decision for awards up to $10M. The evaluation factors and subfactors that determine technical acceptability shall go in Section M. If the contracting officer established past performance as an evaluation factor, it shall be evaluated in accordance with FAR 15.305, not only on a pass/fail basis which is a responsibility determination under FAR 9.1. However, the comparative assessment in FAR 15.305(a)(2)(i) does not apply. Trade-offs are not permitted with LPTA, so it is not necessary to do a technical evaluation on all offers prior to determination of apparent low offer. PCO makes award decision for awards up to $10M.

38. 38 PPT Evaluation Steps When technical proposals are required, determine technical acceptability of each offeror Based on pass/fail evaluation criteria in the solicitation Offeror must pass all criteria to be considered acceptable If contractor is determined technically unacceptable, do not go further with price, performance evaluations Price for each technically acceptable proposal will be evaluated for price reasonableness, then ranked by total evaluated price to determine the low offeror Assess performance confidence for each offeror, or specified number of lowest priced technically acceptable offerors The technical acceptability of each offeror is determined using the pass/fail evaluation criteria set forth in the RFP. Only evaluation criteria in the RFP will be used to determine technical acceptability. All of the criteria must be passed to be considered technically acceptable. Once all offerors have been evaluated, the technically acceptable offerors are ranked by price. At the same time as the technical evaluation performance confidence is assessed for each offeror. If technical proposals are being requested, we recommend you request past performance information be submitted early so you can be working on your past performance assessment while you wait for the technical proposals to come in. Past performance information can be requested as soon as 15 days after RFP release. If a large number of proposals is anticipated, you may plan to assess performance confidence on only the lowest priced technically acceptable offerors. Make sure you address this in your description of the evaluation process in the solicitation (i.e. Section M or equivalent solicitation provision). The technical acceptability of each offeror is determined using the pass/fail evaluation criteria set forth in the RFP. Only evaluation criteria in the RFP will be used to determine technical acceptability. All of the criteria must be passed to be considered technically acceptable. Once all offerors have been evaluated, the technically acceptable offerors are ranked by price. At the same time as the technical evaluation performance confidence is assessed for each offeror. If technical proposals are being requested, we recommend you request past performance information be submitted early so you can be working on your past performance assessment while you wait for the technical proposals to come in. Past performance information can be requested as soon as 15 days after RFP release. If a large number of proposals is anticipated, you may plan to assess performance confidence on only the lowest priced technically acceptable offerors. Make sure you address this in your description of the evaluation process in the solicitation (i.e. Section M or equivalent solicitation provision).

39. 39 PPT Evaluation Steps (cont’d) Past Performance Evaluation Past Performance Information on relevant contracts submitted with proposal Government obtains performance feedback through questionnaires, telephone surveys and automated systems e.g., Contractor Performance Assessment Reporting System; Past Performance Information Retrieval System (PPIRS); PPIRS-SR applies in some cases Performance Confidence assigned using the performance ratings established in MP5315.3, Table 3 Past performance is evaluated to give the government a confidence level in the contractor’s ability to perform on the new contract based on how well it performed similar contracts. The government evaluates this by requesting contractors provide information on previous contracts with their proposals. The government then obtains performance feedback from these references, as well as others through questionnaires, telephone surveys or both. Based on the feedback obtained, the government assesses the performance confidence. PPIRS-SR: Air Logistics Centers should refer to AFMCFARS 5315.305(a)(2)(90) for collection of past performance information on competitive spares acquisitions. Past performance is evaluated to give the government a confidence level in the contractor’s ability to perform on the new contract based on how well it performed similar contracts. The government evaluates this by requesting contractors provide information on previous contracts with their proposals. The government then obtains performance feedback from these references, as well as others through questionnaires, telephone surveys or both. Based on the feedback obtained, the government assesses the performance confidence. PPIRS-SR: Air Logistics Centers should refer to AFMCFARS 5315.305(a)(2)(90) for collection of past performance information on competitive spares acquisitions.

40. 40 PPT Evaluation Steps (cont’d) May award without discussions Issues dealing with Past Performance don’t qualify as discussions Discussions may be necessary Technical Issues Cost/Price Request Final Proposal Revisions Evaluate Final Proposal Revisions Like any other negotiated acquisition, the government may award without discussions. The government also has the option to conduct discussions before making a selection. Discussions are only held with offerors in the competitive range (those offerors with the most highly rated proposals). Discussions may include technical issues which result in technical acceptability, past performance issues, or cost issues. (Past performance issues may be addressed as clarifications and award without discussions may still be made.) Once all issues have been resolved, Final Proposal Revisions are requested. The Final Proposal Revisions are then evaluated in the same manner as the initial evaluation. Again, the technically acceptable offerors are ranked by price. Like any other negotiated acquisition, the government may award without discussions. The government also has the option to conduct discussions before making a selection. Discussions are only held with offerors in the competitive range (those offerors with the most highly rated proposals). Discussions may include technical issues which result in technical acceptability, past performance issues, or cost issues. (Past performance issues may be addressed as clarifications and award without discussions may still be made.) Once all issues have been resolved, Final Proposal Revisions are requested. The Final Proposal Revisions are then evaluated in the same manner as the initial evaluation. Again, the technically acceptable offerors are ranked by price.

41. 41 PPT Evaluation Steps (cont’d) Award may be made to the technically acceptable, low price offeror with “acceptable” performance confidence The government has the right to make a trade-off decision and award to other than the low offeror based on better performance confidence Good business judgment shall be used in making a trade-off decision Basis for decision must be thoroughly documented If the low price, technically acceptable offeror has an “acceptable” performance confidence, award may be made to them. “Acceptable” would be a confidence rating the base could live with, probably not a Limited or No Confidence rating. However, award may be made to a higher priced offeror with a better performance confidence rating, regardless of the confidence rating of the low offeror. For example if the low priced offeror has a Confidence rating, a decision could still be made to award to a higher priced offeror with a Significant or High Confidence rating. If the decision is made to go to a higher priced offeror, it must be based on sound business judgment and the rationale for the trade-off shall be thoroughly documented. This emphasis on past performance plays in the selection process and also should incentivize contractors to perform well on current contracts as it may affect future awards. If the low price, technically acceptable offeror has an “acceptable” performance confidence, award may be made to them. “Acceptable” would be a confidence rating the base could live with, probably not a Limited or No Confidence rating. However, award may be made to a higher priced offeror with a better performance confidence rating, regardless of the confidence rating of the low offeror. For example if the low priced offeror has a Confidence rating, a decision could still be made to award to a higher priced offeror with a Significant or High Confidence rating. If the decision is made to go to a higher priced offeror, it must be based on sound business judgment and the rationale for the trade-off shall be thoroughly documented. This emphasis on past performance plays in the selection process and also should incentivize contractors to perform well on current contracts as it may affect future awards.

42. 42 FTO Evaluation - Overview This chart is an overview of the Source Selection Process. While many of the activities occur in LPTA and PPT as well, the chart is most applicable to the Full Tradeoff process. After proposal receipt, the source selection team shall evaluate all proposals, prepare evaluation notices and, if discussions are to be conducted, recommend through the contracting officer the elimination of any offeror from the competitive range. The Source Selection Authority (SSA) shall determine if award without discussions is appropriate. If not, the SSA shall establish the competitive range, approve entering discussions, and approve the release of evaluation notices. Discussions shall be conducted with each offeror in the competitive range. The Government should provide each offeror its own color, risk, and confidence ratings both at the initiation of and near the conclusion of discussions. The SSA shall approve release of the Final Proposal Revision (FPR) request. Upon receipt of the FPRs, the source selection team shall complete the proposal evaluation, incorporating the information provided through discussions and in the FPRs. The team shall assemble the Simplified Source Selection Report (SSSR) from existing documentation wherever possible. When the SSA is other than the Contracting Officer, include the evaluation team’s source selection recommendation, and any minority opinion, to the SSA. The SSA shall select the source(s) whose proposal offers the best value to the Government. The decision shall be based on an integrated assessment of proposals against all source selection criteria in the RFP. The SSA shall document the supporting rationale in the Source Selection Decision Document (SSDD). Debriefings shall be provided to each unsuccessful offeror if requested. The ACE organization (or your local Acquisition Support experts) has separate training modules on Mission Capability/Proposal Risk Evaluation, Performance Confidence Assessment, Cost/Price Evaluation, and Debriefings.This chart is an overview of the Source Selection Process. While many of the activities occur in LPTA and PPT as well, the chart is most applicable to the Full Tradeoff process. After proposal receipt, the source selection team shall evaluate all proposals, prepare evaluation notices and, if discussions are to be conducted, recommend through the contracting officer the elimination of any offeror from the competitive range. The Source Selection Authority (SSA) shall determine if award without discussions is appropriate. If not, the SSA shall establish the competitive range, approve entering discussions, and approve the release of evaluation notices. Discussions shall be conducted with each offeror in the competitive range. The Government should provide each offeror its own color, risk, and confidence ratings both at the initiation of and near the conclusion of discussions. The SSA shall approve release of the Final Proposal Revision (FPR) request. Upon receipt of the FPRs, the source selection team shall complete the proposal evaluation, incorporating the information provided through discussions and in the FPRs. The team shall assemble the Simplified Source Selection Report (SSSR) from existing documentation wherever possible. When the SSA is other than the Contracting Officer, include the evaluation team’s source selection recommendation, and any minority opinion, to the SSA. The SSA shall select the source(s) whose proposal offers the best value to the Government. The decision shall be based on an integrated assessment of proposals against all source selection criteria in the RFP. The SSA shall document the supporting rationale in the Source Selection Decision Document (SSDD). Debriefings shall be provided to each unsuccessful offeror if requested. The ACE organization (or your local Acquisition Support experts) has separate training modules on Mission Capability/Proposal Risk Evaluation, Performance Confidence Assessment, Cost/Price Evaluation, and Debriefings.

43. 43 Simplified Source Selection Report Section I – Source Selection Plan and Acquisition Description Streamlined Source Selection Plan Section II – Evaluation Rating Team Worksheets Price Competition Memorandum Section III – Comparative Analysis Concise comparative analysis of offerors Supports the source selection decision Team recommendation and any minority opinion Section IV – Source Selection Decision Document Signed by SSA Debriefing documentation can be attached to this section Use existing documentation wherever possible for the Simplified Source Selection Report.Use existing documentation wherever possible for the Simplified Source Selection Report.

44. 44 Matrix Activities/Documents Source Selection Plan Non-complex requirement (P/N, NSN, Drawings, Spec) Mission Capability Evaluated Past Performance Evaluated Price Evaluated This matrix is intended to assist you in determining which source selection process to use for your acquisition, and as a reminder of what activities/documents are applicable to each process. Keep in mind that the matrix applies to source selections less than or equal to $10M.This matrix is intended to assist you in determining which source selection process to use for your acquisition, and as a reminder of what activities/documents are applicable to each process. Keep in mind that the matrix applies to source selections less than or equal to $10M.

45. 45 Matrix Tradeoffs Notify offerors that they have been excluded from competitive range Price Competition Memo required Source Selection Authority Source Selection Decision Document *For all awards where low price/technically acceptable is the only specified criteria, the abstract may be used in lieu of the PCM. Include on the abstract who received the award, a statement of adequate price competition, the determination of the price reasonableness, and a statement on the outcome of the technical review if needed. **If only one offer is received and the offeror clearly proposed based upon competition, you may use PCM or abstract as appropriate. If only one offer is received and the offeror did not clearly propose based upon competition, you may negotiate and document using a PNM or streamlined PNM format. Source: AFMC Guide to Writing a Good PNM or PCM, May 2007 The PCO is the Source Selection Authority on acquisitions $10 million and under. Over $10 million, the SSA designation depends on the source selection process and program type (ACAT I, II, or III, AFPEO/CM, or “Other Contracting”). See AFFARS 5315.303 and MAJCOM supplements.*For all awards where low price/technically acceptable is the only specified criteria, the abstract may be used in lieu of the PCM. Include on the abstract who received the award, a statement of adequate price competition, the determination of the price reasonableness, and a statement on the outcome of the technical review if needed. **If only one offer is received and the offeror clearly proposed based upon competition, you may use PCM or abstract as appropriate. If only one offer is received and the offeror did not clearly propose based upon competition, you may negotiate and document using a PNM or streamlined PNM format. Source: AFMC Guide to Writing a Good PNM or PCM, May 2007 The PCO is the Source Selection Authority on acquisitions $10 million and under. Over $10 million, the SSA designation depends on the source selection process and program type (ACAT I, II, or III, AFPEO/CM, or “Other Contracting”). See AFFARS 5315.303 and MAJCOM supplements.

46. 46 Helpful URLs or References AFFARS Library Part 15 – Source Selection Center AF Library Part 42 AFMCFARS Library Part 5315 Local ACE, Contract Policy Office and JAG

47. 47 Questions or Feedback Questions? Feedback? Comments/Recommendations can be posted at: https://afkm.wpafb.af.mil/ASPs/NewBB/topics.asp?Filter=OO-AQ-PK-S1&forumid=1325 The training modules will be reviewed/updated periodically based on your inputs