DEPARTMENT OF VETERANS AFFAIRS ACQUISITION

DEPARTMENT OF VETERANS AFFAIRS ACQUISITION MANUALChair to ensure the evaluation is conducted in accordance with the evaluation criteriaspecified in the solicitation;(2) Ensure that required approvals are obtained before non-Governmentpersonnel are allowed to provide source selection support (See FAR 37.203);(3) Ensure that procedures exist to safeguard source selection information andcontractor bid or proposal information;(4) Ensure that all non-Government advisors who are to assist in the sourceselection process do not have access to proprietary information until the CO receivesthe consent of the submitting contractor(s) to provide access thereto;(5) Maintain the documents and source selection evaluation records;(6) Release the final solicitation only after obtaining all required approvals;(7) Serve as the single point of contact for all solicitation-related inquiries fromactual or prospective offerors;and(8) Control exchanges with offerors after receipt of proposals (see FAR 15.306);(9) Enter discussions, with the approval of the SSA, to establish the competitiverange. Note that only the CO may conduct discussions with the offeror(s).(d) The SSEB (members) shall—(1) Conduct a comprehensive review and evaluation of proposals against thesolicitation requirements and the approved evaluation criteria;(2) Ensure the evaluation is based solely on the evaluation criteria outlined inthe RFP;(3) Not perform comparative analysis of proposals;(4) Assist the SSEB Chairperson in documenting the SSEB evaluation results;(5) Support any post-source-selection activities, such as debriefings and postaward reviews/meetings, as required; and(6) Not make source selection recommendations unless requested by the SSA.(e) The SSEB Chairperson shall—(1) Be responsible for the overall management of the SSEB and act as theSSEB’s interface to the SSA and the SSAC (if used);VAAM Part M815—Contracting by NegotiationM815-8

DEPARTMENT OF VETERANS AFFAIRS ACQUISITION MANUAL(2) Establish evaluation teams, as appropriate, to support an effective sourceselection evaluation. Appoint members to the evaluation teams, subject to approval ofthe SSA;(3) Ensure the skills of the personnel, the available resources, and timesassigned are commensurate with the complexity of the acquisition;(4) Ensure members of the SSEB are trained and knowledgeable on how anevaluation is conducted prior to reviewing any proposals;(5) Ensure the evaluation process follows the evaluation criteria and ratings arebeing consistently applied;(6) Provide consolidated evaluation results to the SSA or the SSAC if the SSACis designated as the interface between the SSEB and SSA; and(7) Support all post source selection activities such as debriefings and postaward reviews/meetings, as required.(f) SSAC Members shall—(1) Review the evaluation results of the SSEB to ensure the evaluationprocess follows the evaluation criteria and the ratings are appropriately and consistentlyapplied; and(2) Consolidate the advice and recommendations from the SSAC into awritten analysis and recommendation for use by the SSA in making the best-valuedecision. Ensure that minority opinions within the SSAC are documented and includedwithin the analysis.(g) The SSAC Chairperson shall appoint SSAC members, subject to SSA approval.(h) Government Advisors: When an SSAC is not used, consideration should begiven to the use of Government advisors to assist the SSA. These advisors can provideexpertise within specific functional areas, similar to the involvement of the SSAC, butneed not provide the formal written comparative analysis required of an SSAC.Government advisors may also be used to provide assistance to the SSEB as subjectmatter experts.(i) Non-Government Advisors: Use of non-Government personnel as advisors maybe authorized, but should be minimized as much as possible. Non-Government advisorsshall be supported by a written determination (see FAR 37.203, Policy, and 37.204,Guidelines for determining availability of personnel). The CO must ensure that the nonGovernment advisor who will assist in the source selection process does not haveaccess to proprietary information until the CO receives the consent of the submittingVAAM Part M815—Contracting by NegotiationM815-9

DEPARTMENT OF VETERANS AFFAIRS ACQUISITION MANUALcontractor(s) to provide access to the non-Government advisor to execute thisrequirement; the following is suggested solicitation language:(1) Offerors are advised that employees of the firms identified below may serveas nongovernment advisors in the source selection process. These individuals will beauthorized access only to those portions of the proposal data and discussions that arenecessary to enable them to perform their respective duties. Such firms are expresslyprohibited from competing on the subject acquisition.INSERT NAMES, ADDRESSES, AND TELEPHONE NUMBERS OF FIRMS(2) In accomplishing their duties related to the source selection process, theaforementioned firms may require access to proprietary information contained in theofferors' proposals. Therefore, pursuant to FAR 9.505, these firms must execute anagreement with each offeror that states that they will (1) protect the offerors’ informationfrom unauthorized use or disclosure for as long as it remains proprietary and (2) refrainfrom using the information for any purpose other than that for which it was furnished. Toexpedite the evaluation process, each offeror must contact the above companies toeffect execution of such an agreement prior to the submission of proposals. Eachofferor shall submit copies of the agreement with their proposal.(j) Program Management/Requirements Office: The requirements developmentprocess is vital to the success of the negotiated acquisition. The leadership of theProgram Management/Requirements Office shall:(1) Ensure the technical requirements—consistent with the cognizantrequirements document—are approved and stable, establish technical specifications,and develop a SOW, SOO, or PWS.(2) Allocate the necessary resources including personnel, funding and facilities tosupport the source selection process.(3) Assist in the establishment of the SST to include serving as an advisor ormember to the SSAC and/or the SSEB as needed.(4) Assist in the development of the evaluation criteria consistent with thetechnical requirements/risk.M815.303-71 Source Selection Authority.The authority of the Secretary to appoint an individual other than the CO to serve as thesource selection authority for a particular acquisition or a group of acquisitions isdelegated to the HCA. If an HCA needs to designate an individual other than the CO asthe source selection authority for a particular acquisition or a group of acquisitions, theHCA shall prepare a written request/justification and shall submit therequest/justification to the Senior Procurement Executive for approval/disapproval.VAAM Part M815—Contracting by NegotiationM815-10

DEPARTMENT OF VETERANS AFFAIRS ACQUISITION MANUALM815.303-72 Developing the Source Selection Plan.(a) An SSP is recommended for all best–value, negotiated, competitive acquisitionsunder FAR 15. The SSP documents the source selection organization that isestablished. Likewise, a typical source selection plan sets out evaluation factors,evaluation standards, and evaluation procedures. All factors and significant subfactorsthat will affect contract award and their relative importance shall be stated clearly in thesolicitation (see FAR 15.204-5(c)). The rating method need not be disclosed in thesolicitation. The general approach for evaluating past performance information shall bedescribed (see FAR 15.304(d)).(b) The SSA shall approve the SSP before the final solicitation is issued. At aminimum, the SSP (if utilized), shall—(1) Include a brief description of the requirement, a summary of the objectives,and any reference to applicable guidance;(2) Provide a summary of the planned acquisition approach to include adescription of how the specific acquisition being competed fits into the entire program;(3) Describe the organizational structure and identify the various roles andresponsibilities of each of the source selection teams, such as the SSET, the SSAC, theCO, and the SSA, during the phases of the source selection. List members and advisorsby name, position title, company affiliation, if applicable, or by functional area;(4) Describe the process and controls for communication with industry as well asinternal Government team communication, to include the use of email, during thesource selection, and outline the security measures that will be utilized to ensure theinformation is protected as source selection information. (See FAR 2.101 and FAR3.104);(5) Identify the evaluation factors, subfactors, their relative order of importance;the importance of all non-cost or price factors to the cost or price factor; and theevaluation process, including specific procedures and techniques to be used inevaluating proposals. Include within the SSP document or attach the relevant and mostcurrent portions of Sections L and M in the RFP (or a non-UCF solicitation) to precludeinconsistencies between the SSP and RFP;(6) Identify the types of documents that will be prepared during the course of thesource selection, to include at a minimum an SSEB Report covering the initialevaluation, updated as necessary following responses to discussion questions, and afinal SSEB Report after receipt of Final Proposal Revisions, an SSAC Report, if there isan SSAC, which reflects the SSAC’s consideration of the final SSET Report and makesthe SSAC’s recommendation to the Source Selection Authority, and in accordance withFAR 15.308, the Source Selection Decision Document (SSDD), which reflects theVAAM Part M815—Contracting by NegotiationM815-11

DEPARTMENT OF VETERANS AFFAIRS ACQUISITION MANUALSSA’s independent determination. A power point presentation is acceptable to brief theSSA and the SSAC on the status of the procurement, but should not, as a general rule,constitute the official Reports required for the source selection;(7) Identify the major acquisition activities and projected completion dates.Reference the information on the use of independent management reviews, IndustryDays, and draft RFPs as significant source selection activities;(8) Address the use of non-Government personnel and compliance withrequirements; and(9) Detail the plan for securing all source selection materials throughout theevaluation process.M815.304 Evaluation factors and significant subfactors.M815.304-70 Evaluation factor commitments.If an offeror proposes to use an SDVOSB or VOSB subcontractor in accordance withVAAR 852.215-70, Service-Disabled Veteran-Owned and Veteran-Owned SmallBusiness Evaluation Factors, the CO shall ensure that the offeror, if awarded thecontract, actually does use the proposed subcontractor or another SDVOSB or VOSBsubcontractor for that subcontract or for work of similar value. The CO should monitorthis contract as delineated in FAR 19.704(a)(10)(ii), which requires the offer to submitperiodic reports so that the Government can determine the extent of compliance by theoffer through the subcontracting plan.M815.305 Proposal evaluation.(a)(2)(i) Past performance evaluation. When a past performance evaluation isrequired by FAR 15.304, and the solicitation includes either the clause at FAR 52.219-8,Utilization of Small Business Concerns, or the clause at FAR 52.219-9, Small BusinessSubcontracting Plan, the evaluation factors shall include the past performance ofofferors in complying with requirements of these clauses. Contractors may not be given“downgraded” past performance evaluations for availing themselves of their rights byfiling protests and claims or for deciding not to use Alternate Dispute Resolution (ADR)and contractors may not be given more “positive” past performance evaluations forrefraining from filing protest and claims or for agreeing to use ADR.M815.306 Exchanges with offerors after receipt of proposals.(d) For acquisitions with an estimated value of 25 million or more, COs shouldconduct discussions and follow the procedures at FAR 15.306.VAAM Part M815—Contracting by NegotiationM815-12

DEPARTMENT OF VETERANS AFFAIRS ACQUISITION MANUALSubpart M815.4—Contract PricingM815.404 Proposal analysisM815.404-1 Proposal analysis techniques.(d) Cost realism analysis. (1) A cost realism analysis is the process ofindependently reviewing and evaluating specific elements of each offeror’s costestimate to determine whether the estimated proposed cost elements are realistic forthe work to be performed. The results of the analysis should be able to answer thefollowing key questions:(i) Is the offer based on realistic assumptions?(ii) Does it show sufficient understanding of the requirements?(iii) Are its various parts consistent with one another?(iv) Is the cost/price data current, reasonably accurate, and verifiable? and(v) Does the whole thing make sense in view of the experience?(2) A cost realism analysis shall be performed when a cost-type contract isanticipated. In accordance with FAR 15.404-1(d)(3), cost realism on fixed priceincentive contracts may be performed or in exceptional cases, on other competitivefixed price contracts. Adjustments for the most probable cost estimate should not bebased solely on differences from the Independent Government Cost Estimate (IGCE).Where performance specifications are used, the IGCE is based on the Government’simplicit approach to the work, which may differ from the offerors approach. Also, theIGCE rates may not be comparable. The technical evaluation should reveal areaswhere each offeror’s approach is inadequate or its resourcing unrealistic, given theproposed approach. The technical evaluators and the cost evaluators should crosswalktechnical deficiencies and weaknesses and their impact on cost to assure properadjustments can be made to the proposed costs. However, this crosswalk should not beperformed until after each group has completed their initial evaluation to avoidintentional or unintentional bias.(i) The probable cost may differ from proposed cost and should reflect theGovernment’s best estimate of the cost of any contract that is most likely to result fromthe offeror’s proposal. The probable cost shall be used for purposes of evaluation todetermine the “best value.” Therefore, when developing a most probable cost estimate,consider the following:(A) As the required information is collected to evaluate the realism of theofferor’s cost (or price) estimate, the Government is also collecting the informationrequired to develop its own estimate of the most probable contract cost.VAAM Part M815—Contracting by NegotiationM815-13

DEPARTMENT OF VETERANS AFFAIRS ACQUISITION MANUAL(B) In developing the estimate, adopt the portion of the offeror’s estimatethat appears realistic and modify the portion of the estimate that is believed to beunrealistic. For example, the Government may accept proposed labor hours and adjustthe labor rate based on an audit recommendation. Adjustments may increase ordecrease cost estimates.(C) Use relevant estimating tools and techniques.(D) Conduct meaningful discussions with offerors in the event there areany meaningful adjustments to the offeror’s estimated cost.(E) As the Government completes the estimate, clearly document therationale for any adjustment.M815.404-4 Profit.(b) Policy.(1)(i) The CO shall use a structured approach for developing a prenegotiationprofit or fee objective for those acquisitions that require cost analysis.(2) FAR 15.404-4(b)(2) permits agencies to use another agency’s structuredapproach. Therefore, COs are encouraged to use the Department of Defense WeightedGuidelines method as delineated in the Department of Defense Federal AcquisitionRegulation Supplement.M815.405 Price negotiation.(a) The purpose of performing cost or price analysis is to develop a negotiationposition that permits the CO and the offeror an opportunity to reach agreement on a fairand reasonable price. The CO is responsible for exercising the requisite judgmentneeded to reach a negotiated agreement with the offeror and is solely responsible forthe final price agreement. However, when significant auditor recommendations are notadopted, the CO must provide rationale that supports the negotiation result in the pricenegotiation documentation.(b) The CO’s objective is to select an appropriate contract type and negotiate aprice that provides the contractor the greatest incentive for efficient and economicalperformance. The CO must balance the contract type, cost, and profit or fee negotiatedto achieve a total result -- a price that is fair and reasonable to both the Governmentand the contractor. (See Attachment M815-A, Sample Price Negotiation Memorandum(PNM) Checklist)VAAM Part M815—Contracting by NegotiationM815-14

DEPARTMENT OF VETERANS AFFAIRS ACQUISITION MANUALM815.406-3 Documenting the negotiation.(a) The CO shall document in the form of a price negotiation memorandum (PNM)the principal elements of the negotiated agreement in accordance with FAR 15.406-3.(See the attached Attachment M815-A, Sample PNM Checklist).(c) The PNM serves as a detailed summary of the contractor's proposal, any fieldpricing assistance recommendations, including the reasons for any pertinent variancesfrom them, the Government's negotiation objective, the negotiated position, and themethodology and rationale used in arriving at the final negotiated agreement.(d) The CO shall document in the Electronic Contract Management System theprincipal elements of the negotiated agreement in accordance with FAR 15.406-3.Subpart M815.6—Unsolicited ProposalsM815.604 Agency points of contact.(c) When a VA employee receives an unsolicited proposal from a potential offeror ofan unsolicited proposal, they must refer the proposal to the following:facility.(1) Facility level unsolicited proposa

receipt of proposals. Competitive range means and consists of the offers rated most highly after proposal evaluations. Discussions will be held only with offerors in the competitive range. (See . FAR 15.306(c)). Discussions means the negotiations conducted in a competitive acquisition. Discussions take place after establishment of the .