Welcome to the Johnson Space Center Office of Procurement Source Selection Industry Updates Briefing

1. Welcome to the Johnson Space Center Office of ProcurementSource Selection Industry Updates Briefing Tuesday, August 13, 2014 Gilruth Center, The Alamo Ballroom 9:00 a.m. – 11:00 a.m.

2. Introduction Anna Carter, Contracting Officer JSC Source Selection Office

3. This briefing is provided for informational purposes only and does not apply to any specific solicitation. Each solicitation has its own set of Instructions, Conditions, and Notices to Offerors and Evaluation Factors for Award. When submitting proposals in response to a solicitation, carefully read the Instructions, Conditions, and Notices to Offerors and Evaluation Factors for Award for that particular solicitation.

4. Objective To communicate the key features of the JSC Source Selection processes to help Industry better prepare and respond to the JSC Request for Proposals.

5. Agenda

6. Welcome to JSC Source Selection Updates Briefing Melanie Saunders, Associate Director Johnson Space Center

7. JSC Office of Procurement 2.0 Debra Johnson, Director JSC Office of Procurement

8. Procurement • Customer Support • Performance • Solution & results focused (understanding technical content sufficiently) • Innovative solutions (contract features with on ramps, flexibility, etc) • Alternative acquisition options (SAAs, CA, existing contracts, etc) • Timeliness (lead times, milestones, reviews, etc) • Transparency • Awareness (no surprises) • Communication (feedback, open and continuous) • Workforce • Training • Solution & results based (augmentation to required curriculum) • Analysis & negotiations (Price Fighters) • BALaNCEProgram (focus on leadership & innovation) • Integrated member of the requirements organization (understanding the system) • Ability to consult and implement (end to end mentality) • Tools/Processes • Transition to paperless contracting • User friendly database of all contracts to make informed recommendations/decisions

9. Procurement • BA Management Team • Rotation and mobility agility (break down walls) • Motivating workforce (awards, incentives, etc) • Employee development (training, opportunities) • Consistent communication (one voice, advocacy) • Return on Investment (value analysis) • Directorate Suite • Provide the Vision, Environment and Framework for success • Continuous Self Assessment (SEB process/lessons learned, Reviews, etc) • Balance Scorecard • Governance Structure

10. Strategic Acquisition Forecast (SAF) Brad Niese, Team Lead JSC Office of Procurement

11. SAF Framework • Objectives: • Efficient & Effective manner to acquire goods & services to meet goals/mission of the center and the programs • Longer-term, strategic acquisition outlook with an integrated center-wide focus with goals to optimize interdependencies and reduce redundancies • Leverage flexibilities to develop integrated business and acquisition solutions

12. SAF Process Deep Dive Request Requires fwd Work Acquisition Forecast Team Directorate Offices work with Procurement Offices to determine new requirements and initial prospective acquisition strategy Board of Directors ASM Decision(s) Funding and affected Directorates Acquisition TeamPrescreen/Prepare Recommendations BA, AM, AL, Requirements Org Recommendations ApproveEstablishes JSC Acq. Forecast & Kicks off Procurement Process Acquisition Forecast JSC Procurement Portfolio Database Procurement Process: PDT(s) PDT(s) PDT(s) PDT(s) PDT(s) PDT(s) PDT(s) PDT(s) PDT(s) IDIQ Orders Other Contract Mods/Options

13. Streamlined Procurement Team Process Christina Hibbs, Contracting Officer Operations Support Office Shine Lin, Contract Specialist Exploration Systems Procurement Office

14. SLPT versus Source Evaluation Board (SEB) Acquisitions

15. SLPT versus Source Evaluation Board (SEB) Acquisitions, Continued * All cost-reimbursable acquisitions require adequacy of accounting systems regardless of dollar value. Some cost-reimbursable acquisitions will require adequacy of Disclosure Statements (DS) for Cost Accounting Standards (CAS) covered contracts. The solicitation will advise the offerors as to the specific eligibility requirements.Other eligibility requirements unique to each procurement are possible as well.

16. SLPT versus Source Evaluation Board (SEB) Acquisitions, Continued • SLPTs are typically used for less complex procurements. • For SLPTs, trade-off factors (past performance, cost/price, and value characteristics, if applicable) are not evaluated for unacceptable proposals. • Draft RFPs are typically not issued for less complex proposal requirements. • Draft Statements of Work may be posted instead. • This process envisions award without discussions • Submit your best offer first!

17. When is SLPT Not Used? • We generally do not use the SLPT source selection method for: • Sole source acquisitions • Sealed bidding • Technically complex acquisitions • Examples • SLPT • Engineering Fabrication Services (EFS) • Safety & Mission Assurance Engineering Contract (SMAEC) • SEB • JSC Protective Services Contract (JSCPSC) • JSC Engineering, Technology, Science (JETS)

18. Types of SLPT source selection methods • The Performance Price Trade-off (PPT) process is a simplified best value source selection strategy that permits a tradeoff between past performance and cost/price in reaching the award decision. • The Limited Trade-Off (LTO) process is also a simplified best value source selection strategy that permits a tradeoff between past performance, cost/price, and Predefined Value Characteristics (VCs), if applicable. • Predefined Value Characteristics are over and above the baseline requirement that the Government considers advantageous and may be willing to pay more to obtain.

19. Unique Features of Streamlined Procurement Team Process • May or may not request technical proposal • Where market research shows a robust pool of qualified offerors with excellent past performance, past performance alone is sufficient as a discriminator not only for best value, but ability to perform the work. • Technical Acceptability is a pass/fail gate. • Source Selection Authority trade-off decision made on value characteristics (optional), past performance, and cost/price. • Trade-off performed in accordance with the relative importance of factors, “the riddle,” as established in the Request for Proposal (RFP).

20. Overview of SLPT Process Determine Acceptability (A, PA, or U) “A” and “PA”: Evaluation of Past Performance & Cost/Price (VCs if applicable) NFS 1815.305-70 Identification of Unacceptable Proposals Technical Acceptability Determination “U”s are out Award or Competitive Range Award: Present Findings to SSA for Selection “U”s are out Determine Acceptability (A or U) Final Proposals Received & Re-evaluated Hold Discussions w/ Offerors in Competitive Range Competitive Range: Present to SSA for Decision on Who is in Competitive Range Award: Present Findings to SSA for Selection “A”s are Evaluated Against Past Performance & Cost/Price (VCs if applicable)

21. SLPT Ratings • Technical Acceptability Factor (pass or fail basis) • Acceptable (A) • Potentially Acceptable (PA) • Unacceptable (U) • Trade-off Factors • Cost/Price • Past Performance - Level of Confidence • Very High Level of Confidence • High Level of Confidence • Moderate Level of Confidence • Low Level of Confidence • Very Low Level of Confidence • Neutral • Value Characteristics (if Limited Trade-off is used) - Value Added • Significant Value Added • Value Added • No Value Added

22. Definition of SLPT Ratings • A proposal will be rated “Acceptable” under the Technical Acceptability Factor, where ALL subfactors are individually rated acceptable based on the level of completeness, feasibility, and reasonableness such that associated risks do not jeopardize an acceptable level of contract performance. • A proposal will be rated “Unacceptable” under the Technical Acceptability Factor where ANY subfactor is individually rated unacceptable based on the level of completeness, feasibility, and reasonableness such that associated risks do jeopardize an acceptable level of contract performance.

23. Definition of SLPT Ratings, Continued • A proposal will be rated “Potentially Acceptable (PA)” under the Technical Acceptability Factor, when after the initial evaluation, the proposal does not fully meet the definition for an “Acceptable” or “Unacceptable” rating and the Government anticipates that additional information obtained during discussions could result in a proposal rating of “Acceptable”. • A rating of TA or PA does not guarantee inclusion in the Competitive Range. Contracts may be awarded without discussions. • Please note that PA is a rating only under the SLPT process. It is not utilized in the SEB or LPTA process which will be discussed later in this presentation.

24. Technical Acceptability Factor • An assessment of the offeror’s understanding of the requirements of the RFP. Typically this involves an evaluation of the offeror’s technical narrative including processes and methodology, and basis of estimates for skill mix and FTEs. • Examples of Subfactors include: • Management Approach • Management and Staffing Plan • Total Compensation Plan • Phase-In Plan • Technical Approach • Technical Implementation Approach • Safety and Health Plan • Technical Resources Template • Small Business Utilization

25. Predefined Value Characteristics • Predefined Value Characteristics (VCs) are used when qualities that are over and above the baseline requirements exist – particularly as they apply to technical requirements – and the Government is willing to pay extra, if applicable, for this added value beyond the minimum/baseline requirements.   • Any proposed VCs may be incorporated into the awarded contract. • For Example: • Lighter Weight • Smaller Dimensions • Greater Functionality

26. Past Performance Factor • An assessment of NASA’s confidence in the Offeror’s (prime and major subcontractors) ability to perform the solicitation requirements based upon relevant performance under previously awarded contracts. • Each solicitation will include specific guidelines for Past Performance evaluation. • Is it relevant to the requirements in the SOW/PWS? • Is it recent? • The Government reserves the right to use both data provided by the Offeror and data obtained from other sources including: • Past Performance Information Retrieval System • Defense Contract Management Agency • Interviews with government and commercial clients • Other Sources

27. Relative Importance of the Evaluation Factors, “The Riddle” • FAR 15.101-1: all evaluation factors that will affect contract award and their relative importance shall be clearly stated in the solicitation, and the solicitation shall state whether all evaluation factors other than cost or price, when combined, are significantly more important than, approximately equal to, or significantly less important than cost or price. • This process permits tradeoffs among cost or price and non-cost factors for technically acceptable offerors and allows the Government to accept other than the lowest priced proposal. • Examples include: • Past performance is more important than the combined value of the predefined value characteristics. Past performance and predefined value characteristics, when combined, are significantly more important than cost. • Past performance is significantly more important than cost/price.

28. Lowest Price Technically AcceptableProcess J.R. Carpentier, Contracting Officer Projects Procurement Office

29. LPTA • Price is ranked lowest to highest, then technical acceptability is strictlya pass/fail (no potentially acceptable) • Award is made to the lowest priced, technically acceptable, responsible offeror • A firm-fixed price contract is more common and is the process flow that is illustrated in this presentation • Past Performance is generally not considered except in regard to FAR 9.1, Responsible Prospective Contractors • Generally a shorter overall acquisition schedule • Less complex solicitations • Human Health & Institutional Management Support (HHIMS) recently utilized the LPTA process

30. LPTA Process • Government issues RFP • Proposals received on time in accordance with RFP instructions • Proposals then ranked by total price, lowest to highest • Lowest priced proposal is then reviewed by the Procurement Team (PT) for RFP compliance, then reviewed for technical acceptability • If the lowest priced proposal is technically acceptable, no more proposals are evaluated and PT moves to award phase

31. LPTA Process (Cont’d) • If the lowest priced proposal is not technically acceptable, PT begins review of second lowest priced proposal and continues until a RFP compliant, technically acceptable proposal is reviewed • All proposals may be reviewed if it is in the best interest of the Government (low # of proposals received, close grouping in price) • Debriefs will be done if requested, however, data provided may be limited based on whether or not a particular proposal was reviewed • In the event of two equal low prices, a supervised coin toss will be used to determine the low price offer to proceed to technical acceptability evaluation

32. LPTA Process Flow Unacceptable are out Confirm timeliness Determine gross acceptability Is proposal technically acceptable? Proposals received Rank by price/determine lowest price Yes No Reasonable iterations? Yes Award Phase: Present Findings to SSA for Selection No Yes Award Phase: Present Findings to SSA for Selection Competitive Range/Hold Discussions w/ Offerors(if applicable) Review 2nd lowest priced proposal (or 3rd, or 4th, etc.)

33. When to use LPTA? • Re-competes or follow-ons where there is good historical data • Technical Requirements: Well defined, low-risk, objective metrics • Generally not used if Past Performance is a key factor in evaluation

34. LPTA Information • Be aware that RFP evaluation criteria may look different • Carefully review the RFP language as Government is looking to minimize evaluation time.

35. Disclosure Statements (DS)Cost Accounting Standards (CAS)Offerors’ Responsibility For Submitting DS Wally Khan, Cost/Price Analyst JSC Source Selection Office

36. What is a Disclosure Statement? • A DS is a written description of a contractor’s cost accounting practices and procedures; how costs are accounted for and measured • Means of measuring consistency and compliance of day-to-day cost accounting with applicable CAS • Must be adequate – accurately describe the practices and procedures i.e. current, accurate and complete • Must be compliant – with FAR, CAS

37. What is CAS? • CAS is a set of standards and rules for use in determining costs on negotiated procurements. • CAS addresses cost accounting--the measurement, assignment, and allocation of costs to Government contracts • There are currently 19 standards • Ref: 48 CFR 9903.201-1 (CAS Applicability)

38. Why a Disclosure Statement is Important at Contract Award • FAR 30.202-6(b) “The contracting officer shall not award a CAS-covered contract until the cognizant Federal agency official (CFAO) has made a written determination that a required Disclosure Statement is adequate unless, in order to protect the Government's interest, the agency head, on a non-delegable basis, authorizes award without obtaining submission of the required Disclosure Statement. In this event, the contractor shall submit the required Disclosure Statement and the CFAO shall make a determination of adequacy as soon as possible after the award.”

39. Relationship: DS & CAS • DS required of entities subject to CAS Board’s Rules and Regulations • Entities subject to CAS are subject to either: • Full coverage - Subject to all 19 CAS Standards • Modified Coverage – Subject to 4 Standards • CAS 401, 402, 405, 406 • Ref FAR 52.230-3 (a) (1)

40. CAS Coverage Determine when a contract is: • Not subject to CAS • Subject to Modified CAS • Subject to Full CAS

41. Exemptions from CAS • Negotiated contract / subcontract for $700,000 or less • Sealed bid contract • Firm Fixed Price (FFP) contract / subcontract awarded on the basis of adequate price competition without the submission of cost or pricing data • FFP contracts / subcontracts for commercial items • Contracts / subcontracts price set by law • Contracts / subcontracts with small business • Current contract less than $7.5M or business unit NOT currently performing on CAS-covered contract or subcontract of $7.5M or more

42. Determination of Modified CAS Coverage Three questions • Is the current award $50M or more? • Did the business receive $50M or more in net CAS covered awards in the preceding accounting period? • Has the business unit received a single CAS covered award of $50M or more during the current cost accounting period? If answer to all three questions is “No”, then contract is subject to Modified CAS Coverage

43. Modified Coverage Modified CAS covered contracts are subject to the following Cost Accounting Standards: • CAS 401 - Consistency in Estimating, Accumulating, and Reporting Costs; • CAS 402 - Consistency in Allocating Costs Incurred for the Same Purpose; • CAS 405 – Accounting for Unallowable Costs; • CAS 406 – Cost Accounting Period

44. Determination of Full CAS Coverage If the answer to any of the three preceding questions is “Yes”, then the award is fully-covered and therefore subject to all 19 Cost Accounting Standards

45. When is a Disclosure Statement Required? • DS required for fully CAS-covered contracts • For modified CAS-covered contracts, two questions need to be asked: a. Did the company together with its segments receive $50M or more in net CAS-covered awards during the preceding cost accounting period? • If answer is “No” - DS not required • If answer is “Yes” - Go to b. b. Is the company’s CAS-covered awards in the prior year $10M or more AND 30% or more of total segment sales? • If answer is “No” - DS not required • If answer is “Yes” - DS is required

46. CAS Coverage and DS Determination

47. Responsibility of Offeror • It is the Offerors’ responsibility to determine if a prospective contract will require the submission of a Disclosure Statement (DS). • Plan ahead for obtaining an adequate DS. • According to my latest information from DCAA, 1-3 months required to complete an Adequacy audit depending on issues that may arise with the DS.

48. Responsibility of DCAA & DCMA • FAR 30.202-6(c) “The cognizant auditor is responsible for conducting reviews of Disclosure Statements for adequacy and compliance.” • The DCAA is responsible for performing audits of the DS. • FAR 30.202-6(d) “The CFAO is responsible for issuing determinations of adequacy and compliance of the Disclosure Statement.” • When delegated by the Contracting Officer, DCMA is the CFAO for purposes of the Disclosure Statement.

49. Tracking Disclosure Statements DCMA Determines Adequacy Offeror Prepares Disclosure Statement DCAA Audits & Reports to DCMA Contract can be Awarded Determination of Adequacy Determination of Inadequacy Contract cannot be Awarded

50. Summary • Determine CAS Coverage • No CAS coverage • Modified Coverage • Full Coverage • Determine need for Disclosure Statement • No CAS coverage No DS required (Exemptions) • Modified Coverage May require DS • Full Coverage DS required • Plan ahead for obtaining an Adequate determination • Generally it takes 1-3 Months for DCAA to complete DS adequacy audit