97-93

Procurement Notice

March 3, 2004

OPTION EXERCISE CONSIDERATIONS

 

Background:  As a part of the broader President’s Management Agenda Competitive Sourcing element, the NASA Administrator directed Agency Procurement officials to review business practices to determine ways in which NASA can conduct business more efficiently, and maximize opportunities for competition.  A team of NASA procurement officials reviewed Federal and NASA acquisition regulations to determine the need to apply greater scrutiny in certain areas of the procurement process.  The team determined that in general the regulations provide a sufficient level of guidance to protect the Government’s interest as well as the necessary flexibility to make sound business decisions for the Agency.  However, increased emphasis on public notices, acquisition planning, and contractor performance in the option exercise decision-making process will allow NASA programs/projects to achieve and maintain optimum efficiency and effectiveness at each stage of the programmatic life cycle, and continually seek to incorporate advances in business and technology.  This change implements process improvements and best practices in the exercise of contract options.

 

ACQUISITIONS AFFECTED BY CHANGES:  (a) All solicitations and contracts that include options for continued performance; and (b) all sole-source acquisitions that require a synopsis of the proposed action.

 

ACTION REQUIRED BY CONTRACTING OFFICERS:  Comply with the revised guidance for non-competitive synopses, acquisition plan content, and the option exercise analysis contained in new section 1817.207-70.

 

CLAUSE CHANGES:  None

 

PARTS AFFECTED:  Changes are made in Parts 1805, 1807, and 1817.

 

REPLACEMENT PAGES:  You may use the enclosed pages to replace Part 1805, 7:3, 7:4, and Part 1817.

 

TYPE OF RULE AND PUBLICATION DATE:  Not Applicable.  This change does not have a significant effect beyond the internal operating procedures of the Agency or have a significant cost or administrative impact on contractors or offerors and therefore does not require codification in the Code of Federal Regulations (CFR) or publication for public comment.

 

HEADQUARTERS CONTACT:  Eugene Johnson, Code HS, (202) 358-4703, email: ejohnson@nasa.gov.

 

 

Tom Luedtke

Assistant Administrator for Procurement

 

Enclosures

PART 1805

PUBLICIZING CONTRACT ACTIONS

 

TABLE OF CONTENTS

 

SUBPART     1805.1              DISSEMINATION OF INFORMATION

1805.101                                  Methods of disseminating information.

 

SUBPART     1805.2              SYNOPSES OF PROPOSED CONTRACTS

1805.207                                  Preparation and transmittal of synopses.

1805.207-70                            Synopses of Architect-Engineer Services and Federal Information

                                                   Processing Resources.

 

SUBPART     1805.3              SYNOPSES OF CONTRACT AWARDS

1805.303                                  Announcement of contract awards.

1805.303-70                            NASA Headquarters public announcement.

1805.303-71                            Administrator’s notice of significant contract actions (ANOSCAs).                                                                       

SUBPART     1805.4              RELEASE OF INFORMATION

1805.402                                 General public.

1805.403                                 Requests from Members of Congress.

 

SUBPART     1805.5              PAID ADVERTISEMENTS

1805.502                                 Authority.

 

 

PART 1805

PUBLICIZING CONTRACT ACTIONS

 

Subpart 1805.1--Dissemination of Information

 

1805.101  Methods of disseminating information.

   (b)(4)   For NASA policy regarding paid advertisements, see 1805.502.

 

Subpart 1805.2--Synopses of Proposed Contracts

 

1805.207  Preparation and transmittal of synopses.

(a)      Synopses shall be transmitted in accordance with 1804.570.

  (c)(14) Notices for non-competitive solicitations, including non-competitive follow-on actions to contracts initially awarded utilizing full and open competition, shall provide sufficient information regarding the proposed requirement to allow potential sources to determine whether they possess the requisite capabilities and to make an informed business decision regarding whether to respond.

 

1805.207-70  Synopses of Architect-Engineer Services and Federal Information Processing Resources.

   (a) Architect-Engineer Services.     

        (1)  Each notice publicizing the acquisition of architect-engineer services shall be headed "C.  Architect-Engineer Services."

        (2)  In addition to meeting the requirements of FAR 5.207(c), the project description shall--

               (i)  State the relative importance the Government attaches to the significant evaluation criteria and the date by which responses to the notice must be received, including submission of Standard Form 255, Architect-Engineer and Related Services Questionnaire for Specific Project, if required;

               (ii) Describe any specialized qualifications, security classifications, and limitations on eligibility for consideration;

               (iii) Describe qualifications or performance data required from architect-engineer firms; and

               (iv)  If the acquisition is to be set aside for small business, state this fact, indicating the specific size standard to be used and requiring that eligible responding firms submit a small business representation.

        (3)  Contracting officers shall add at the end of the synopsis:

               See Note 24.  Provisions of Note 24 apply to this notice except that (a) in the sentence beginning "Selection of firms for negotiations," the fourth additional consideration listed is changed to read: "(4) past experience, if any, of the firm with respect to performance on contracts with NASA, other Government agencies, and private industry;" and (b) in the last sentence, "National Aeronautics and Space Administration" is substituted for "Department of Defense."

   (b) Federal Information Processing (FIP) Resources.

        (1)  When total requirement quantities are expected to satisfy the needs of only a single field installation, each notice publicizing the acquisition of FIP resources under an indefinite delivery/indefinite quantity contract or under a contract that includes options for additional quantities of such resources shall include the following:

The __­­­­­­­­__­­­­_ (identify contracting activity) is the primary delivery point for the items described in this synopsis.  However, NASA may order delivery to the following alternate locations:  ____________________________________ (List other NASA installations and their locations).

        (2)  When the contemplated contract will authorize orders from locations other than the awarding installation, the notice shall fully describe the ordering scope.

 

Subpart 1805.3--Synopses of Contract Awards

 

1805.303  Announcement of contract awards.

   (a)(i)  In lieu of the $3 million threshold cited in FAR 5.303(a), NASA Headquarters public announcement is required for award of contract actions that have a total anticipated value,

excluding unexercised options, of $25 million or greater.  This threshold applies to new awards, contract modifications, and option exercises, but not to incremental funding or cost overrun modifications.

               (A)  For undefinitized contract actions, the not-to-exceed (NTE) or ceiling price value is the face value.

               (B)    For indefinite delivery, time and material, labor hour, and similar contracts, the estimated amount of the basic contract is the face value.  Individual orders up to the face value shall not be announced regardless of value.  However, after the face value is reached, any subsequent modifications or orders of $25 million or greater must be announced.

        (ii)  NASA Headquarters public announcement is also required for award of a contract action with a value of less than $25 million if the contracting officer believes it to have Agency public information implications.

        (iii) Contractual instruments requiring Headquarters public announcement shall not be distributed nor shall any source outside NASA be notified of their status until the public announcement procedures in 1805.303-70 have been completed.

 

1805.303-70  NASA Headquarters public announcement.

   (a) For those contract actions requiring Headquarters public announcement in accordance with 1805.303, the contracting officer shall furnish a draft news release including the following information, through the installation Public Affairs Office, via facsimile transmission to the Headquarters Office of Public Affairs, News and Imaging Branch (Code PM): 

        (1)  A brief description of the work, including identification of the program and project;

        (2) Identification of the contract action as either a new contract or additional work or services under an existing contract;

        (3)  Contract type.  For undefinitized contract actions, identify the planned contract type of the definitized instrument;

        (4)  The dollar amount authorized for the instant action and the estimated total cost of the contract if this is different.  For undefinitized contract actions, indicate the NTE or ceiling price amount;

        (5)  Name and address (including zip code) of the contractor;

        (6)  Principal work performance locations;

        (7)  Names and addresses of any unsuccessful offerors.

   (b)  The information in paragraph (a) of this section shall be provided to Code PM before transmitting a letter contract to a contractor for signature.  For actions other than letter contracts, the information should be transmitted to Code PM after contractor signature, if applicable, no later than 48 hours before the planned award.

   (c) For contract actions requiring Headquarters approval in accordance with 1804.72, the draft news release required by paragraph (a) of this section shall be provided to the Headquarters Office of Procurement (Code HS) with the request for approval.  Code HS will forward the information to Code PM after approval.

   (d) Code PM will advise the installation Public Affairs Office of the date public announcement of the contract action will be made.  Installations may proceed with award and local release of the information no earlier than 4:00 P.M. ET of the date Code PM makes public announcement.  If earlier award is considered appropriate, installations must request authorization from the Assistant Administrator for Procurement (Code HS).

 

1805.303-71  Administrator’s notice of significant contract actions (ANOSCAs).

   (a) In addition to the public announcement requirements described in 1805.303-70, contracting officers shall notify the Administrator of the following significant actions at least five (5) workdays prior to planned public announcement of the actions:      

        (1)  Planned contract award for competitive acquisitions of $25 million or more, including all priced options.

        (2)  Planned contract award of non-competitive awards and new work modifications of $100 million or more, including all priced options.

        (3)  Planned award of other actions, to include cooperative agreements resulting from a Cooperative Agreement Notice (CAN), at any dollar value thought to be of significant interest to Headquarters.    

   (b) To provide notification to the Administrator, the contracting officer shall send the information listed in paragraphs (b)(1)-(10) of this section to the Headquarters Office of Procurement (Code HS) via facsimile transmission (202-358-4065).  Immediately prior to transmission, the contracting officer shall notify Code HS by telephone of the impending transmission.  In accordance with FAR 3.104-5(c), the contracting officer shall mark all pages that include source selection information with the legend "SOURCE SELECTION INFORMATION - SEE FAR 3.104."  The following information shall be sent:

        (1)  Title and a brief nontechnical description of the work, including identification of the program or project;

        (2)  Identification of the contract action as either a new contract or additional supplies or services under an existing contract;

        (3)  Contract type (including whether a cost contract is completion or level-of-effort).  For undefinitized contract actions, identify the planned contract type of the definitized instrument;

        (4)  The total contract value for the instant action including all priced options.  Also include the Government's most probable cost.  For undefinitized contract actions, indicate the NTE or ceiling price amount;  

        (5)  The name, address, and business size status of the prime contractor and each major (over $1M) subcontractor;

        (6)  Small business and small disadvantaged business subcontracting goals both in dollars and percentage of the value of the action including all options;

        (7)  Principal work performance locations;

        (8)  Brief description of any unusual circumstances;

        (9)  The names and telephone numbers of the contracting officer and project manager; and

        (10) For competitive selections only, provide on a separate attachment the names and addresses of all unsuccessful offerors and a brief explanation of the general basis for the selection.

   (c) The field installation shall not proceed with any awards or announcements until Code HS has advised that the Administrator has been notified of the proposed action and the supporting information.  Once this advice is received from Code HS, the field installation shall proceed with the public announcement procedures described in 1805.303-70.

 

Subpart 1805.4--Release of Information

 

1805.402  General public.

   (1)   Unless the head of the contracting activity determines that disclosure would be prejudicial to the interests of NASA, the following information on NASA acquisitions may be released:

          (i)  The names of firms invited to submit offers, and

          (ii) The names of firms that attended any pre-bid or pre-proposal conferences.

   (2)   Other requests for information under the Freedom of Information Act shall be processed in accordance with FAR 24.2 and 1824.2.

 

1805.403  Requests from Members of Congress.

   (a) All proposed replies to congressional inquiries shall be prepared and forwarded, with full documentation, to the Headquarters Office of Legislative Affairs (Code L) for approval and release.

 

Subpart 1805.5--Paid Advertisements

 

1805.502  Authority.

   Use of paid advertisements for procurement purposes (except CBD announcements) is not authorized in NASA.

   (a)  The acquisition planning team shall obtain input from the center offices responsible for matters of safety and mission assurance, occupational health, environmental protection, information technology, export control, and security.  Their presence on the team shall help to ensure that all NASA acquisitions are structured in accordance with NASA safety, occupational health, environmental, export control, and security policy.  As part of this process, the team shall recommend any appropriate solicitation or contract requirements for implementation of safety, occupational health, environmental, information technology, export control, and security concerns.  (See NPG 8715.3, NASA Safety Manual; NPG 7120.5, NASA Program and Project Management Processes and Requirements; NPG 2810.1, Security of Information Technology, and NPG 1620.1, Security Procedures and Guidelines, all available at www.nodis.hq.nasa.gov).

 

1807.105  Contents of written acquisition plans.

   Acquisition plans shall address each applicable topic listed in FAR 7.105, as supplemented by this section.  Plans shall be structured by subject heading using each italicized topic heading in the same sequence as presented in the FAR.  Subheadings should be used when appropriate (e.g., the separate items under contracting considerations at 7.105(b)(4)).  Topics not applicable to a given acquisition (e.g., design-to-cost and should-cost are not compatible with service acquisitions), should be marked N/A.  The requirements in FAR 7.105 regarding performance-based contracting methods shall not be limited to acquisition plans for service contracts.

   (a)(1) Describe in nontechnical terms the supplies or services to be acquired.  Include quantities.

   (a)(2) NPG 7120.5 shall be an integral part of acquisition planning for programs and projects subject to its requirements.  If the NPG does not apply, the acquisition plan shall clearly state that fact.  If the NPG does apply, specify whether all required NPG 7120.5 documentation is current and approved (see 1804.7301(b)(2)(i)).  If not, describe the approach for obtaining approval or the authority to proceed without approval before release of draft or final solicitations. For programs and projects under the NPG, all draft or final solicitations subject to, or directly or substantially in support of, those programs or projects shall clearly identify the program or project of which they are part.

   (a)(3) Identify the estimated cost and describe the estimating methodology.

   (a)(5) Specify the delivery or performance period requirements separately by the basic contract, each option, and the total.  Provide supporting rationale, which describes the relationship between the technical requirements and the proposed period of performance, including the basis for the decision regarding duration and the appropriateness of the inclusion of options. 

   (a)(7) Discuss project/program risks (see NPG 7120.5, NASA Program and Project Management Processes and Requirements).  In addition to technical, schedule, and cost risks, the discussion shall include such considerations as: safety and security  (including personnel, information technology, and facilities/property); the need to involve foreign sources (contractor and/or governmental), and risks of unauthorized technology transfer (see NPD 2110.1D and Export Control Program (http://www.hq.nasa.gov/office/codei/nasaecp/ecpolicy.html)); and resource risk, including the necessary level and expertise of NASA personnel resources available to manage the project/program.  For each area of risk identified, the discussion shall include a quantification of the relative magnitude (e.g., high, medium, low) together with the specific actions taken to structure the acquisition approach to manage the risks throughout the acquisition process.   For example, this discussion would identify those areas that have safety risk, discuss how safety is addressed in contract requirements and evaluated in the source selection, and how it will be managed and incentivized during contract performance.  Decisions to accept, mitigate, track, and/or research risk factors shall be identified and documented as part of acquisition planning.

   (a)(8) Streamlining applies to all NASA acquisitions.  Describe all planned streamlining procedures.

   (b)(3) Address how cost realism will be evaluated.

   (b)(4)(A) If an incentive contract is planned, describe the planned incentive(s) and the anticipated effects.

               (B) Describe subcontracting issues, including all applicable subcontracting goals.  (See FAR Part 19 and Part 1819).

   (b)(5)(A) Identify the estimated cost separately by the basic contract, each option and total amount.

               (B) Identify the funding by fiscal year and unique project number (UPN).

               (C) Discuss planned approaches to eliminate funding shortfalls (vs. the estimated cost).

   (b)(6) Identify the type of work statement/specification planned.  Specifically address the applicability of performance-based requirement descriptions and the availability of commercial sources for the supplies/services.

   (b)(10) Address contract management issues, including --

               (A) Planned delegations of administrative functions; and

               (B) When contract changes are anticipated, the plan to manage such changes and the specific measures that will be taken to minimize the issuance of undefinitized contract actions.

(b) (20)  If the period between release of solicitation to contract award is more than 120 calendar days (180 days for formal SEB competitions), explain why that goal cannot be met.

 

1807.107  Additional requirements for acquisitions involving bundling.

   (c)  Requests for approval of proposed bundlings that do not meet the thresholds in FAR 7.107(b) must be sent to the Headquarters Office of Procurement (Code HS).

(e)  The substantial bundling documentation requirements applies to each proposed NASA bundling expected to exceed $5 million or more.  The contracting officer must forward the documentation along with the measurable benefits analysis required by FAR 7.107(b) to the Headquarters Office of Procurement (Code HS) in sufficient time to allow a minimum of 10 days for review.

 

1807.107-70  Orders against Federal Supply Schedule contracts, Governmentwide  acquisition contracts (GWACs), or other existing indefinite-delivery contracts.

 The FAR and NFS requirements for justification, review, and approval of bundling of contract requirements also apply to an order from a Federal Supply Schedule contract, Governmentwide acquisition contract, or other indefinite-delivery contract if the requirements consolidated under the order meet the definition of "bundling" at FAR 2.101.

 

1807.170  Acquisition Strategy Meeting (ASM).

   (a)  The ASM is an acquisition plan conducted through a meeting attended by all interested NASA offices.  At the meeting, the acquisition plan topics and structure specified in 1807.105 are presented in briefing format, and formal written minutes prepared to summarize the decisions, actions, and conclusions of the ASM members.  The approved minutes, along with the briefing

PART 1817

SPECIAL CONTRACTING METHODS

 

TABLE OF CONTENTS

 

SUBPART     1817.1             MULTIYEAR CONTRACTING

1817.105                                 Policy.

1817.105-1                             Uses.

 

SUBPART     1817.2              OPTIONS

1817.200                                  Scope of subpart.

1817.203                                  Solicitations.

1817.204                                  Contracts.

1817.206                                  Evaluation.

1817.207                                  Exercise of options.

1817.207-70                             Analysis to support exercise of options.

1817.208                                  Solicitation provisions and contract clauses.

 

SUBPART     1817.4              LEADER COMPANY CONTRACTING

1817.401                                 General.

 

SUBPART     1817.5              INTERAGENCY ACQUISITIONS UNDER THE ECONOMY ACT

1817.500                                 Scope of subpart.   

 

SUBPART     1817.70            ACQUISITIONS WITH MILITARY DEPARTMENTS

1817.7000                               Scope of subpart.

1817.7001                               Authorization and policy.

1817.7002                               NASA-Defense Purchase Request and acceptance.

1817.7002-1                           Acceptance by Military Department.

1817.7002-2                           Changes in estimated total prices.

1817.7002-3                           Payments.

1817.7002-4                           Contract clause.

 

SUBPART     1817.71           EXCHANGE OR SALE OF PERSONAL PROPERTY

1817.7101                               Policy.

           

SUBPART     1817.72           INTERAGENCY TRANSACTIONS

1817.7201                               Policy.

1817.7202                               Determinations and findings requirements.

1817.7203                               Ordering procedures.

 

SUBPART     1817.73            PHASED ACQUISITION

1817.7300                                Definitions.

1817.7301                                Down-selections in phased acquisitions.

1817.7301-1                            Pre-solicitation planning.

1817.7301-2                            Evaluation factors.

1817.7301-3                            Down-selection milestones.

1817.7301-4                            Synopsis.

1817.7301-5                            Progressive competition.

1817.7302                                Contract clauses.

 

 

PART 1817

SPECIAL CONTRACTING METHODS

                                   

Subpart 1817.1--Multiyear Contracting

 

1817.105 Policy.

 

1817.105-1 Uses. 

   (b)  The Assistant Administrator for Procurement (Code HS) is the approval authority for the use of the multiyear contracting technique.  Requests for approval shall be signed by the procurement officer and shall include a description of the acquisition, identification of anticipated contract costs and funding, and a determination, with supporting rationale, that each of the criteria in FAR 17.105-1(b) is met by the proposed use of multiyear contracting.

 

Subpart 1817.2--Options

 

1817.200 Scope of subpart.

   FAR Subpart 17.2 applies to all NASA contracts.

 

1817.203 Solicitations. 

   (g)(2) The procurement officer is authorized to approve option quantities greater than 50 percent.

 

1817.204 Contracts. 

   (e)(i)  The 5-year limitation (basic plus option periods) applies to all NASA contracts regardless of type, except when the time needed to complete system development or hardware production is greater than five years.

        (ii) Requests for deviations from the 5-year limitation policy shall be sent to the Assistant Administrator for Procurement (Code HS) and shall include justification for exceeding five years and evidence that the extended years can be reasonably priced.

 

1817.206 Evaluation. 

   (b)(i)  The procurement officer is the approval authority for determinations by the contracting officer not to evaluate offers for any option quantities or periods.

         (ii) Unless a determination has been approved under 1817.206(b)(i), the selection statement for each acquisition involving an option shall address the source selection authority's consideration of the option as part of the initial competition.

 

1817.207 Exercise of options.

      (c)(2) In addition to determining the option fulfills an existing need, the contracting officer shall determine that there is no change in the scope of the option requirements.

  (f)   Options under cost type contracts shall contain an estimated cost for the option period(s).

   (f)(2) Use of the provision (or formula) for determining the price of a fixed price option requires advance approval by the Assistant Administrator for Procurement (Code HS).

   (f)(3)(ii)  Use of a formula to determine the fee of an option in a cost-type contract requires advance approval of the Assistant Administrator for Procurement (Code HS).  The formula shall preclude the contractor from increasing costs for the purpose of earning additional fee.