IA-88-400, Partially Withheld Project Managers Acquisition Training Handbook
| ML20204J719 | |
| Person / Time | |
|---|---|
| Issue date: | 09/26/1988 |
| From: | NRC |
| To: | |
| Shared Package | |
| ML20204J681 | List: |
| References | |
| FOIA-88-400 PROC-880926-02, NUDOCS 8810250226 | |
| Download: ML20204J719 (693) | |
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I l 1 PROJECT MANAGER'S t l ! ACQUISITION TRAINING
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l I ACQUISITION TRAINING FOR PROJECT MANAGERS NUCLEAR REGULATORY COMMISSION i SCHEDULE i FIRST DAY: Project Planning and Writing the Need Registration: Administration: Introductions Overview of contracting, performing and managir.g work in-house and placing orders for work with the DOE Laboratories Course Overview: Learning Cbjectives: Course Materials Evolution of an NRC Project (Chapter D Long range planning.and the Agency's inission Policy Planning Guide (PPG) Long Range Research Plan (LRRP) Planning and the Agency's budget Program costs estimated Program projects identified and cost estimated ' (, Projects reviewed by NRC Review Groups Project assignment of funds (FIN) Definition of a project Definition of a project manager Definition of Acquisition (overview) (Chapters III(A, B)) What acquisition means vs. doing a project in-house (external vs. Internal resources) Why acq '.sition is controlled and generally what controls it Full and open competition or legal exception (process is controlled by law, work is controlled by a legal contract) l Four elements of a contract i EXERCISE 1 - Evolution of an NRC Project l I i 1 07287 l
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. t FIRST DAY (Continued) ,
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BREAK ' Project Planning and Cost Estimating (Chapter II) l Offer and acceptance-Government must know what it needs and request offeds) Consideration-Government must negotiate a considerat!on based on its own estimate of cost and risk Government must evaluate offers (proposals) - using evaluation criteria ! when offerors are competing ; r The Government's needs SOW (the guts of the request and the contract) { Concepts needed to prepare a contract: Design vs. Performance i Fixed Price vs. Cost Reimbursement (advantages / disadvantages, , e.g. specificity and probability of results vs. nonspecificity and less ' assurance of results). All SOW's should be initiated as though they will be fixed price, e.g. Q M ific in product and effort; determination of the financial typv. is mad.- later.
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t Common elements of a SOW: Background; objective; tasks to be l performed; project management and control requirements; reporting l requirements and deliverables; inspection, test and acceptance criteria; j exhibits and reference documents. <
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EXERCISE 2 (A, B)- Statement of Work l EXERCISE 3 - Work Breakdown Structure 5 - f Work Breakdown Structure (WBS) and Costing (model example: simple ! performance type with enough specificity to be fixed price); estimate l direct labor categories / levels / rates l l LUNCH ! I Cost Concepts: Definitions of the major cost categories I Direct Labor (WBS) ' Direct Material Overhead Subcontract l l Consultant 1
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FIRST DAY (Continued) { Travel General and Administrative Fee or Profit Cost Estimating EXERCISE 4 - Cost Estimates Other considerations of a contract Clauses: standard and other (more later) NRC Policy: ADP etc. (more later) EVENING ASSIGNMENT: Read Chapters III and IV of Handbooks Review Chapters I and II l l l ( 111
SECOND DAY: The Government's liistruments for Acquisition and Assistance (Chapter III) 1 Acquisition vs. Assistance Commercial Contracts DOE Work Orders Interagency Agreements Assistance: (Grants and Cooperative Agreements) Sources of Government Contract Law (Chapter IV) Sources of the Law General pumoses of the laws what the laws encourages fair and open competition; small business and 8a; and what the law allows e.g. Interagency agreements; NRC's DOE relationship Concept of Authority and Agency Commercial DOE EXERCISE 5 - Government Acquisition and the Law i BREAK Types of Contracts: Financial Arrangements (Chapter V) Specifying prod iets and effort - determiners of financial arrangements Two major ( .stegot.. . Fixed Price / Cost-Reimbursable ! DOE work or6ers are cost reimbursable; interagency agreements vary; small purchases are fixed price; commercial contracts offer the greatest flexibility Reminder: Contracting Officer determines the financial type for commercial contracts Contract types from most specific in product and effort to least specific I (and which are more frequently used and which are more legally acceptable & why) Fixed Price and its variations Cost Reimbursement and its variations Time and Materials 1 IV
SECOND DAY (Continued) , f Indefinite Delivery Personal services The difference between completion contracts and level-of-effort contracts. EXERCISE 6 (A, B) - Types of Contracts LUNCH Definition and examples of level-of-effort (task-order) contracts and basic ordering agreements. Review of: Acquisition Instruments, Laws involved, Players involved: (Contracting Officer, Designating Official etc.), The SOW, Cost estimating, The contracting arrangements based on ability to specify products and amount of effort, Funding and budget planning BREAK Methods of Acquisition Sealed Bis vs. Negotiation ( Technical Evaluation Criterial: Purpose, When to Use, and What to Typically Evaluate Use of ProposalInstructions EXERCISE 7 - Technical Evaluation Criteria EVENING ASSIGNMENT: Read Chapters VI and VII i r y
THIRD DAY Negotiating - for DOE and Commercial (purpose, participants, technique) Negotiation Process The SOW, Criterial, RFPA - RFP - Technical Proposal evaluation / business proposal evaluation (cost analysis vs. price analysis) - competitive range -(negotiation) - test and final BREAK EXERCISE 8 - Process of Source Selection LUNCH The means of obtaining a source is heavily regulated to avoid the temptation to award work to favorite companies for technical ideas and prices that likely have not been tested in the market. Justification for Other Than Full and Open Competition (JOFOC) SBSA LSSA 8(a) Program Unsolicited Proposal Smeill Purchases DOE Laboratory Agreement ' Justification Ordering Work From SOW - Signed Form 173 MOU Chapter 1102 BREAK Government Owned Contractor Operated (GOCO) Facilities Federally Funded Research and Development Centers (FFRDC) What and Why' Security Conflict of Interest Ethical Conduct EXERCISE 9- Choosing Acquisition Methods EVENING ASSIGNMENT: Read Chapter VIII i Vi
FOURTH DAY ( Managing Work Performance (Chapter VIID Definition and purpose of managing a contract or work order Overview of administration What the Project Manager needs to know - overview What is generally required and what is generally prohibited of Project Managers ! How this segment is organized Distinction of authority: Designating Officer, Contracting Officer, Project Manager vt , sus contracting / DOE interagency Roles and Spec!fic Responsibilities Planning and Monitoring the Work Progress Reports Progress Reviews / Inspections ! ^ Invoices and Vouchers ( Review of Subcontract / Key Personnel and other Government Rights EXERCISE 10 - Reviewing Progress Reports - Changes? EXERCISE 11,- Key Personnel Clause BREAK l l Problem Solving l Modifying Contracts Changes Clause i Limitation of Costs / Funds Clause Clauses which give remedies EXERCISE 12 - The Cost Overrun 1 Terminations Project Completion ! vil i
FOURTH DAY (Continued) ,
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r Inspections, Rejections, Acceptance of Work under , Cost-Reimbursemert Contracts - LUNCH Funding Cost Growth EXERC5SE 13 - Decision Making under Cost Constraints [ EXERCISE 14 - Contract Modifications - DOE Project: Monitoring Performance Responsibility for Administration Need for Monitoring Terms and Conditions (VIII-39) Reviewing Costs i Cost Overruns EXERCISE 15 - Progress Review of DOE "Contract" l!! BREAK [ Course Review and Wrap-up i l l l i t i i 4 S
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FOREWORD ( More than one-half of the operating funds assigned to the Nuclear Regulatory Commission each year are spent outside the agency for contracting and reimbursable work. NRC Project Managers are assigned responsibility for the management of this work and the proper use of the funds authorized to accomplish it. The majority of these dollars, more than 80 percent, are spent with the Department of Energy Laboratory System. NRC Project Managers, to be effective, must therefore have an adequate knowledge of the system and methodology, which has been established both for contracting with commercial sources and for ordering work from the DOE laboratories and other Gove.rnment agencies. This training text has been specifically designed to assist Project Managers in achieving this adequacy. This volume is used during the course of instruction: Acquisition Training for Project Managers. This volume consists of three parts: text material that explains systems and methods; practical exercises used during the training course for application of the textual material and instructor presentations; and, an appendix which supplements parts of the textual material in detail. ( l 1 l 1 l [
TABLE OF CONT ENTS k CHAPTERI EVOLUTION OF AN NRC PROJECT CH APTER 11 THE STATEMENT OF WORK AND COST ESTIMATE Cil APTER 111 ACQUISITION AND ASSISTANCE INSTRUMENTS CH APTER IV THE LEGAL BASIS FOR CONTRACTING CHAPTER V TYPES OF CONTR ACTS, FIN ANCING ARR ANGEMENTS CHAPTER VI METHODS OF ACQUISITION CHAPTER Vll PROCESSING THE ACQUISITION CHAPTER Vill MANAGING WORK PERFORMANCE (ADMINISTRATION) PRACTICAL EXERCISES APPENDIX (
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CHAPTER I- EVOLUTION OF AN NRC PROJECT Page A. Introduction I-l B. NRC Long Range Research Plan (LRRP) I-3
- 1. Purpose I-3
- 2. Development I-3
- 3. Content I-3 C. Planning and Budgeting I-5 D. Revies' Groups I-6 E. The Project I-10 F. The Project Manager I-10
- 1. Policy I-10
- 2. Project Management Concept I-ll
- 3. Assignment I-11
- 4. Responsibility 1-12
- 5. When Designated I-12
( G. Business Ethics and Conflicts of Interest I-13
- 1. Introduction 1-13
- 2. Business Ethics 1-13
- 3. Personal Conflicts of Interest I-15 ,
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I. EVOLUTION OF AN NRC PROJECT I A. Introduction The mission of the NRC is to assure that non-military uses of nuclear materials in the United States-as in the operation of nuclear power plants or in medical, industrial or research applications-are carried out with proper regard and provision for the protection of public health and safety and of the environment, the safeguarding of nuclear ; materials and facilities from theft and sabotage, and safe transport and disposal of nuclear materials and wastes. The NRC accomplishes its purposes through the licensing of nuclear reactor operations and other possession and use of nuclear materials, the issuance of rules and regulations governing licensed activities, and inspection and enforcement actions. The Commission is required by the statute which created it to prepare and issue an annual report concerning:
. . . the short-range and long-range goals, priorities, and plans of the Commission as they relate to the benefits, costs, and risks of nuclear powe r."
and the Commission's activities and findings in the following areas:
- 1. Insuring the safe design of nuclear power plants and other licensed facilities . . ."
- 2. Investigating abnormal occurrences and defects in nuclear power plants and other licensed facilities . . ."
- 3. Safeguarding special nuclear materials at all stages of the nuclear fuel cycle . . ."
- 4. Investigating suspected, attempted, or actual thefts of special nuclear materials in the licensed sector and developing contingency plans for dealing with such incidents . . ."
- 5. Insuring the safe, permanent disposal of high-level radioactive !
wastes through the licensing of nuclear activities and facilities . . ."
- 6. Protecting the public against the hazards of low-level radioactive emissions from licensed nuclear activities and facilities . . ."
Specific additional requirements of the basic law and others are stated below: Section 205 requires development of "a long term plan for projects for the development of new or improved safety systems for nuclear power plants" and an annual updating of the plan. .i I-l
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Section 209 requires the Commission to include in each Annual Report a chapter describing the status of the NRC's domestic safeguards program.
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Section 210 directs the Commission to submit "a plan providing for the specification and analysis of unresolved safety issues relating to nuclear reactors," and to include progress reports in the Annual Report thereafter concerning corrective actions. NUCLEAR NONPROLIFERATION ACT OF 1978 Section 602 requires annual reports by the Ccmmission and the Department of Energy to "include views and recommendations regarding the policies and actions of the United States to prevent proliferation which are the statutory responsibility of those agencies . . ." ATOMIC ENERGY ACT OF 1954, AS AMENDED Section 170i directs the Commission to report annually on indemnity actions implementing the Price-Anderson Act which provides a system to pay public liability claims in the event of nuclear incident. PUBLIC LAW 96-295 Section 303 directs the Commission to report annually a statement of-
"(1) the direct and indirect costs to the Commission for the issuance of any license or permit and for the inspection of any facility; and (2) the fees paid to the Commission for the issuance of any license or permit and for the t inspection of any facility."
PUBLIC LAW 97-415 Section 10(c) requires that the "Commission include in a separate chapter , a description of the collaborative efforts . . . by the Commission and the Department of Energy with respect to the decontamination, repair or
- rehabilitation of facilities at Three Mile Island Unit 2. . ." l Cursory reading of the above descriptions indicates that the Commission must do many things that have not been done before. It must develop new knowledge, and reduce the results of research to everyday practice. It j must create regulations to ensure that civilian activities involving the uses of nuclear materials and facilities are conducted in a manner consistent with protecting the public health and safety, the quality of the environment and the national security. This dictates the exercise of the regulatory functions of rulemaking, licensing review, and inspection and :
enforcement. In order to accomplish the overall task, a multitude of individual projects are identified and performed, each in support of the regulatory process. How this occurs is discussed in succeeding sections.
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l B. NRC Long-Range Research Plan (LRRP) l
- 1. Purpose l
j The primary purpose of the LRRP is to set forth the basis on which agreement on basic research directions within NRC is established, it identifies the principal areas or questions that require research ! for their resolution and to provide insights concerning the level of future resource requirements. The LRRP provides the technical basis: for rulemaking and regulatory decisions; to support licensing and inspection activities; to assess the feasibility and effectiveness of safety improvements; and, to increase the understanding of phenomens for which I analytical methods are needed in regulatory activities. 1 It is NRC policy to continuously increase the cmphasis on using research results in the regulatory process and on getting research results that are useful. This policy extends beyond research to any l project which is undertaken by all user organizations.
- 2. Development An NRC Policy and Planning Guidance (PPG) document is ceveloped annually and provides the foundation for the development and issuance of the LRRP. The PPG sets forth basic budgetary and other resource guidance as well as priorities for
{ their application. A balance among conceptual, supportive, and reinforcing research is an objective related to current needs and situations. Specific areas of responsibility that require emphasis are highlighted. The goal is to establish a program that is reasonably balanced between near and long term regulatory needs. The research plan derived is set forth in annual increments over a five year time span. The LRRP is fully coordinated with user offices to assist in ensuring thatt e Regulatory needs are comprehensive and accurate e Priorities are appropriate and consistent with needs e The product can reasonably be expected to resolve regulatory needs e The level of dollars assigned appear cost effective
- 3. Content Currently 15 research program areas have been established for inclusion in the LRRP. They ares e Plant Aging
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e Pressurized Thermal Shock e Equipment Qualification
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e Severe Accident e Thermal-Hyd. Transients e Advanced Reactors e Risk Analysis e Human Factors e Instrumentation and Control e External Events e Radiation Protection and Health Effects e Waste Management e Safeguards e Decommissioning e Material Safety These 15 program areas constitute the primary divisions of the i research program. E: ch program area is further subdivided to make it more manageable. For example Plant Aging has currently established five subdivisions: o Reactor Vessels l e Steam Generators e Piping o Electrical and Mechanica; Components e Nondestructive Examination The need for research in the program area of Plant Aging is stated, and what that research is intended to provide. A statement of any related work, on going or completed is included. Reactor Vessels is ' hen singled out as a subdivision of Plant Aging and a statement is made of the application of research in that specific subdivision. The major regulatory needs and their justifications for Reactor Vessel research are set forth along with a description of the research program for that subdivision. Finally the major products anticipated from the research are listed. These products become
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1 candidates for projects either singly or in combination. The same process is followed for the other four subdivisions. This organization of the plan is used for the other 14 program areas. 4 When complete, the total research plan for NRC for a five year I period is the result. l Requirements for research are generated by Regions and Office Directors who transmit them to the Office of Nuclear Regulatory Research for incorporation into thr LRRP along with requirements developed within the Office of Nuclear Regulatory Research. The content of the LRRP is examined during its development prior to publication, and during the budget procass. This insures balance, proper priority, and support to the regulatory process. C. Planning and Budgeting Projects normally are initiated when an identifiable segment of work is recognized during the planning and budgeting process. The source of identification for research projects is normally the LRRP; however, requirements do generate during this process which have not yet been incorporated into the LRRP. They are identified as projects at that time. All research requirements are transmitted to the Office of Nuclear Regulatory Research for coordination, budgeting, funding, and management. Not all projects are research projects. Projects may also be technical assistance projects. Such a project is an identifiable work segment that requires action but identifies with one or more of the direct programs which are listed below, and does not have an immediate requirement for research activity. Technical assistance projects are planned, budgeted and funded by the specific office or region responsible for the requirement. The NRC Policy and Planning Guidance mentioned above incorporates much more than direction for the research program. It encompasses the entire mission of NRC. It states the Commission's guidance on how the mission is planned to be accomplished over a specified time frame. It forms the basis for formulating the annual budget that will be submitted to the Congress. Plans are developed by each program to implement the PPG. A j program in NRC consists of Decision Units, which are entitles for - which budget requests are prepared and for which managers make significant decisions on the amount of spending and scope or quality of work to be performed. 'The Decision Units are made up of all of the individual projects that have been identified. Decision Unit identifications may change over time. Currently, seven direct programs and a reimbursable program exist. They are:
- 1. Nuclear Reactor Regulation I
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- 2. Standards development
- 3. Inspection and enforcement J
- 4. Nuclear material safety and safeguards i
- 5. Nuclear regulatory research
- 6. Program technical support 1
- 7. Program direction and administration r
- 8. Reimbursable program i
The summation of these programs make up the Nuclear Regulatory ,
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Commission Appropriation, which is transmitted to the President and ' thence to the Congress. Congress appropriates funds which are assigned to the NRC on a no-year basis, that is, the funds are available for use until expended. When spending authority is received in NRC the reverse of the process occurs. The actual funding approved is related to that requested by program and necessary adjustments are made. Assignment of new ; funds to projects can now be accomplished. ! The intricacies that occur in the process, and the iterations that are necessary by program and financial personnel have not been discussed. . These are continuous, and they do impact on Project Managers. It is ! adequate that a general understanding of the process be established by Project Managers. ! D. Res.es Groups NRC project review groups are established as needed to coordinate l techrical assistance and research projects. They take the lead in ' i performing in-depth technical evaluation of projects during the ! planning and budgeting cycle. They also enter into reviews during the l; contractual process, both commercial and interagency. The reviews they conduct are to determine whether projects: ! 1
- 1. Unnecessarily duplicete or overlap work already proposed, in l progress, or complete; l l
- 2. Are relevant to the regulatory process !
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- 3. Are responsive to approved program needs: '
- 4. Are worth the projected costs.
In addition they review the adequacy of the documented justification l for the source selected. Review groups normally coordinate the work of several offices in a single subject area, insuring that all offices I l I-6
which have an interest in the area agree on the work package. Some groups exist as standing activities, others may be established on short j term basis as the situation dictates. Examples of existing review groups ares e Senior Contract Review Board (SCRB) The FY 1980 NRC Authorization Act (PL 96-295) required that the Commission appoint a Senior Contract Review Board (SCRB). The Commission approved the establishment and membership of the SCRB on September 5,1980. The Senior Contract Review Boerd is responsible for reviewing all new work and substantial modifications to existing work with estimated annual obligations of $500,000 or more, or $1,000,000 in three years, for DOE lab work and $750,000 for three years for commercial contracts to assure that the projects: (1) do not unnecessarily duplicate or overlap work already proposed, in progress, or completed; (2) contain a detailed description of work to be performed; and (3) that alternative methods, including compet'.tive procurement, have been considered. Both proposed contractual actions and Interagency projects, including DOE work, are included in this review responsibility. All projects for which obligation in any one fiscal year are increased to the $500,000 threshold will also be reviewed by the board. Additionally, all significant changes of scope to prior SCRB approved projects or changes in funding to increase such projects by 25% will require re-review. The primary review of Waste Management projects will
! continue to be performed by the Waste Management Review Group (WMRO) prior to Commission review or initiation of contractual action. The SCRB will also review approved Project Descriptive Summaries furnished by these groups for projects with annual costs of $500,000 or more.
- s. Membership The board is chaired by the Deputy Executive Director for Operations with the Controller and the Director of MPA and the Office of Administration as additional members. The
, Director, Officer of Small and Disadvantaged Business Utilization, the Director, Operations and Administration Division, ELD, and Director, Division of Contracts will serve as I' advisors to the board. Other advisors will be appointed as necessary. The board reports to the Executive Director for Operations. I b. Concurrence l l Normally, the SCRB will review projects and note each ! member's formal concurrence via formal meetings, if within 2 l weeks of initial review by the SCRB unanimity is not obtained ( I-7
or the project is not deferred or withdrawn by the sponsoring office, the Chairman of the Board shall make the determination and advise the EDO and the Commission.
- c. For projects of less than $500,000, it will be the individual responsibility of the issuing office director to determine the degree of coordination necessary.
- d. SCRB members must coordinate on each project presented to the SCRB. Normally, this will be accomplished in formal '
meetings of the board. If a non-concurrence or major objection is noted, it will be resolved in as short a time as possible. If all j members concur, the issuing office will be notified and may issue the project without further delay. SCRB members will not normally delegate their coordination i responsibilities. However, delegations will be honored when the member is absent from NRC. In the absence of an assigned member, the individual acting for the member shall assume board membership.
- e. Interested program offices may com nent to the SCRB and the issuing office as they believe necessary. The SCRB procedure will not change any other project approval requirement, such as Review Group coordination or other steering group practices.
SCRB coordination will fulfill the requirement for coordination - noted in Manual Chapter 1102 for DOE projects greater than
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o Waste Management Review Group (WMRG) j This group is responsible for coordination of all NRC Waste Management technical assistance and research projects.
- a. M,embership ,
The Directors of the the Offices of NMSS, RES, IE, SD, NRR, and CON appoint members to this Group. The NMSS member is the Chairman of the Waste Management Review Group.
- b. Frequency of Meetings The WMR Groups will meet whenever the coordinating activity is required, but at least monthly. During the period of heavy coordinating activity, a meeting may require several sessic,ns to accomplish assigned tasks. These additional sessions may be called at the discretion of the Chairman.
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- c. Number of Coordinating Reviews g
The complete waste management contractual program for a s given fiscal year will be reviewed at least three times prior to actual obligation of funds for each project in the program. These reviews will be scheduled to provide timely coordination for the Budget Year, the Operating Year and the Current Year. For the Budget Year, the review will be held after the BRG mark but prior to submission to the Commission. For the Operating Year, the review will be scheduled subsequent to the review of Budget Year but prior to October 1. This review will be based on OMB mark, congressional appropriation / authorization, or OMB apportionment, as appropriate. Project descriptive summaries will be written by the submitting offices and approved by the Group.
- For the Current Year, reviews will be conducted throughout the year prior to (a) commitment of funds for non-DOE procurement, or (b) the submission of NRC Form 173 to DOE. These reviews will examine the actual statement of work.
- d. Review Criteria i (1) is there unnecessary duplication or overlap? '
(2) Is there a documented user need and endorsement for research projects? (3) Does this project represent correct internal balance of resource costs within the program area? (i.e., Is it part of a good internal program mix?) (4) Do we have a "viable product" to meet the needs: (a) Are the results timely? (b) Is the project well priced? (c) Are the manpower levels correct? (d) Does the project have relevancy to the specific program needs? (5) 1s the appropriate office performing the project? Research vs. Technical Assistance? l-9
(6) In addition to user need requirements, has there been coordination with the technical staffs of other relevant , program offices? (7) Is the project consistent will approved program priorities? (8) is the project consistent with budgetary limitations and ; guidance? ; (9) is the project consistent will prior Commission policy , guidelines and Congressional intent or limitations? (10) Has the source been identitled, adequately justified, j and documented? (i.e., contract vs. Interagency or - In-house task, or competitive vs. sole source?) : i e Contract Review Board (CRB) ! i All proposed projects of $100,000 or mon must be coordinated ! by mall review with all NRC offices prior to initiating procurement action. E. The Project A project is defined as an identifiable segment of work required in support of the regulatory process and/or a specific acquisition of goods or technical and research services which is assigned a unique ; Financial Identification Number (FIN) and which satisfies the : attainment of either a single or homogeneous group of objectives. The work units within a project are titled tasks. The result of the budget process described above is an annual ; financial plan, internal to NRC. Overall management is the t responsibility of the Director, Division of Budget and Resource I Analysis. The financial plan identifies an amount of dollars which is allocated to each office and region. Projects are identified in the plan by dollar amount and by FIN, which is the lowest level of detall to which NRC funds are subdivided. Once this has been accomplished the Project Manager is fully responsible for management of the work. i F. The Project Manager
- 1. Polley l It is the policy of NRC that the acquisition of goods or services from all outside sources, both commercial and other Government organizations, be managed effectively. Therefore, all aspects of a such acquisition, including programmatic, financial, and administrative details are actively and centrally managed within 1
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a specific NRC office. Projects that are accomplished using commercial contracts must be managed somewhat differently [s from projects which are accomplished by other Government agencies. ; (a) Commercial In commercial contracting the Contracting Officer is the executor and administrator of the contract and is advised on ' the technical aspects of work performance of the contract by the Project Manager through the Designating Officer. Project Managers are often referred to Project Officers in the contracting arena. They act as representatives of the : Contracting Officer in technical matters, within the limi-tations of their delegations of authority. The Designating , i Officer is a responsible NRC manager, such as an Office Director, Regional Administrator or his/her delegate. The l Contracting Officer is totally responsible for the contract. ; (b) Other Government Agencies
- When work is performed by other Government agencies, an interagency agreement is used rather than a commercial contract. A Contracting Officer is not normally involved.
In this case the same general responsibilities, not all, that a contracting officer would have are assigned to the l Designating Officer. The Project Manager's respornibilities ! ( remain ementially the same as for a contract.
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- 2. Project Management Concept The NRC project management concept places-primary emphasis and responsibility on project managers, who are assigned for each commercial project or interagency task and are responsible for the activities on their projects: contractual work, financial ;
and cost aspects, administration and coordination, as well as ' technical results. This concept establishes a "central axis" for each project which can be held accountable for resources applied l and results obtained. 2
- 3. Assignment Directors of Offices and Regional Administrators have ultimate responsibility for the management and appropriate expenditure of agency funds allocated to their Office or Region. The Office Director or Regional Administrator and his delegates, if any, are responsible for designating Project Managers ands o Ensuring that individuals designated as Project Managers posses the requisite qualifications for managing and monitoring outside work.
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e Ensuring that Project Managers are properly trained to perform their duties.
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e Reviewing the performance of Project Managers and providing the guidance needed to ensure that the financial, administrative, and technical aspects of the project are being adequately controlled and the objectives met. e Providing final approval authority over project initiation at a management level sufficient to provide proper checks and balances. e Providing final review and approval of cost vouchers (SF 1081) to the Division of Accounting and Finance. e Ensuring that project results are fully disseminated and integrated into the NRC regulatory process.
- 4. Responsibility Project Managers are responsible fort e Keeping apprised of NRC policies and procedures for project management of work both by other government organizations and by commercial contractors.
e Assisting office management in the project planning and budgeting process. e initiating Statements of Work (SOW) in accordance with approved project objectives, reviewing proposals, and ; recommending and justifying project placement. , o Monitoring technical aspects of project work in process. o Maintaining close, day-to-day liaison with the lead technical contact in the performing organization. e Recommending approval or disapproval of cost vouchers. o Obtaining final results and deliverables under the project. e Recommending closecut action after completion of work. o Disseminating the information obtained and ensuring integration into the regulatory process.
- 5. When Designated ...
A Project Manager is designated whenever a project is sufficiently defined to describe its objective and feasibility. Appointment is not delayed until such time as a project is funded and funds are allocated to a region or office. This early ij I-12 , I
i assignment requires that the Project Manager take an active role . In the planning and budgeting process. Projects are usually initiated during the planning and budgeting cycle. Circumstances may arise in which a need is so urgent that initiation of its resolution cannot wait for this cycle. Reprogramming of resources must then occur. Project Managers are also designated when this situation occurs and become responsible to participate in all preliminary actions as well as management of the work when the project is funded. G. Business Ethics and Conflicts of Interest
- 1. Introduction The Code of Federal Regulations (see 40 CFR Chapter 1 Part 3) sets forth personal behavioral requirements for individuals, whether Project Managers, Contracting Officers, contract specialists, or others involved in the acquisition process. These include business ethics and conflict of interest matters that must be observed by all Agency personnel. Personal behavior must be impeccable, and the requirements of NRC, which reflect those of the Government as a whole, must be thoroughly understood l and observed.
- 2. Business Ethics
- a. Government business must be conducted in a manner above reproach, and with complete impartiality. The official conduct of Government personnel must be such that they would have no reluctance in making a full public disclosure '
of their actions. It is important that all NRC personnel observe proper standards of conduct in the discharge of their official duties, especially those duties involved in acquisition programs. , 1
- b. Because of their importance in acquisition programs, you ,
should be familiar with the following summary of selected standards. (1) No employee shall receive any salary or compensation for services as a Federal employee from any source other than the Government of the United States, except as may be contributed out of the treasury of a State, county, or municipality. (2) Employees are not permitted to engage in any outside employment or other outside activity in conflict with the full and proper discharge of the duties and responsibilities of their Government employment. (3) Acceptance of gifts, entertainment, or favors, no matter how innocently tendered and received, from those who 1-13 l
have or seek business with NRC, may be a source of embarrassment to the Agency and to the employee involved. It may affect the objective judgment of the I recipient and impair public confidence in the integrity of the business relations between NRC and industry. Therefore, employees shall not knowingly solicit or accept any gifts. entertainment, or favors (including complimentar.y meals and beverages), either directly or indirectly, from an r interested party. For the purpose of this standard, gifts, entertainment, and favors include any benefits, gratuities, loans, discounts, tickets, passes, transportation, accommodations, or hospitality given or extended to or on behalf of the recipient. (4) All employees are subject to the basic political activity restrictions outlined in the Hatch Act. Employees are individually responsible for refraining from Drohibited political activity. (5) An employee must not use, directly or indirectly, or allow the use of, Government property of any kind for other than officially approved activities. An employee has a positive duty to protect and conserve public property, including equipment, supplies, and other property entrusted or issued to the employee. (6) Employees must not directly or indirectly use official information obtained through the employee's Government employment if the information has not been made available to the general public. (7) Employees should pay their financial obilgations in a proper and a timely manner. (8) Employees are prohibited from endorsing in an official cepacity the proprietary products or processes of manufacturers or the services of commercial firms for advertising, publicity or sales purposes. Use of material products or services by the Agency does not constitute official endorsement. (9) Credentials and other NRC Identification devices are for use only in establishing identity or authority in connection with official business. Such credentials and identification devices, or an employee's official position, status, or designation, are not to be used by employees to exert influence or obtain, either directly or indirectly, privileges or rewards for themselves or others. (10) . An employee shall not engage in criminal, infamous, dishonest, immoral, notorious, or disgraceful conduct, or other conduct prejudicial to the Government. i 1-14 ;
I l
- c. The maintenance of public confidence in NRC employees clearly demands that each employee take no action which would
- constitute the use of official position to advance personal or k private interests.
- 3. Personal Conflicts of Interest l
- a. It is most essential and equally important that technical and contracting personnel observe standards of conduct and avoid conflicts of interest with suppliers or potential suppliers of the Government, to obviate any possible inference that the Agency may be compromise.d to any degree by an employee's actions.
- b. As in the case of standards of conduct, the matter of confilets of interest is thoroughly covered in NRC regulations. A few of the key points covered in these regulations relating to acquisition matters ares (1) Employees are not permitted to have a direct or Indirect financial interest that conflicts substantially, or appears to conflict substantially, with the employee's Government duties and responsibilities.
(2) Employees are not permitted to engage, directly or indirectly, in a financial transaction as a result of, or primarily relying on, information obtained through Government employment which has not been made available to the general public. (3) Unless authorized to do s'o, no employee shall participate as a Government employee in any matter in which the l employee knowingly has a financial interest. (4) After Government employment has ceased, no Government ! employee may knowingly act as an agent or attorney for 4 anyone other than the United States in connection with any judicial proceedings or other matter, involving a speelfic party or parties, in which the United States is a party and ! in which the former employee participated personally and substantially for the Government through deelslon, approval, disapproval, recommendation, rendering of
- advice, or investigation.
(5) No employee may represent anyone before a court or Government agency in a matter in which the United States is a party or has an interest. l c. The published regulations (see 40 CFR Chapter 1 Part 3) on the conduct of employees detail reporting procedures for income , and other special matters with which all personnel should be i familiar. The regulations included here were selected because I l I-15 l l l l I
~
t i 4 of their potential impact on relationships with organizaticns or persons that may be involved in doing business under the' i acquisition programs of NRC. g' 4 i i ? l 4 a f r f I i i i I l
\ \ ,
1 i <
- 1 l
1 t i k ,I I-16 i 1 I
CHAPTER H -THE STATEMENT OF WORK AND COST ESTIMATE Page A. Introduction H-1 B. Statement of Work Defined 11 - 1 C. Importance of The Statement of Work 11- 2 D. Organizing the Statement of Work U-3 : E. Elements of the Statement of Work H-3
- 1. Background II-3
- 2. Objective H-3
- 3. Tasks to be Performed U-4
- 4. Project Management and Control Requirements U-4
- 5. Reporting Requirements and Deliverables 11 - 4
- 6. Inspection, Test and Acceptance Criteria U-4
^
- 7. Exhibits and Reference Documents U-5
- 8. DOE Specific II-5 F, Design versus functional or performance requirements U-5 G. W;iting the Statement of Work II-7
- 1. Language of the Statement of Work 11-7 H. Cost Estimates U-ll
- 1. The Function of a Cost Estimate D-Il
- 2. Types of Estimates II-12 ,
- 3. Engineering Type Estimates U-13
- 4. Use of Breakdown Structure Techniques U-14
- 5. Resource Estimr.tes 11 - 1 6
- 6. Pricing Direct Costs 11 - 1 7
- 7. Indirect Costs (Overhead) and Profit 11 - 1 9 i
- 8. Summary of Engineering Cost Estimating 11-20
- 9. Estimating by Analogy and Hybrid Estimates 11-20 i
- 10. Common Problems in Cost Estimating II-22 i I. Special Contractual Requirements !!-24 !
d
- 1. Automatic Data Processing Equipment (ADPE) H-24 i
- 2. OMB Circular A-76 11 - 2 4 l
- 3. Definitions 11-25 !
- 4. Procedures U-26 l l 5. Consultant Services 11-27 l l 6. Security / Classified Cont.*ects 11 - 2 9
- 7. Questionnaires-Folms-Fedural Reports Act H-32
- 8. Printing !!-32 l
- 9. Contractor Organizational Conflicts of Interest II-32 l l
l l rx - . - -- . - - - - - , - . . - - - . - - . - - _ . . . . . .. - . .- - --- - ,
Chapter II- The Statement of Work and Cost Estimate (Continued) E.*K *. Exhibit 11-1 CHECKLIST FOR SIX-SECTION STATEMENT OF ! WORK II-35 Exhibit 11-2 CHECKLIST FOR DETE't'41NING WORK STATEMENT ADEQUACY 11 - 3 7 Exhibit 11-3 CHECKLIST FOR ASSESSING INDIVIDUAL WORK STATEMENT ELEMENTS 11 - 3 9 Evhibit 11-4 WORDS WITH MULTIPLE MEANINGS, , VAGUE WORDS H41 i Exhibit 11-5 PHRASES WITH MULTIPLE MEANINGS 11-43 j Exhibit 11-6 VERBS OFTEN USED IN SOW WRt"7 tG ("WORK WORDS") 11 - 4 5 l 4 i f o I l i l .I a i I l i 1 l l
! 1 I
1, f I l , l i
i
!!. THE STATEMENT OF WORK (SOW)
A. Introduction [ 1 The Statement of Work (SOW) is considered the single most important element of an acquisition. This importance applies for commercial activities, for DOE Laboratories, and for any other activity, such as a Governmental non-DOE organization. The SOW should answer the question:
"What is to done?"
The answer should be set forth in such language in the SOW that the reader and the writer receive exactly the same interpretation. It is the initial formal communication between the requestor of work and th prospective performer of the work. TI.e SOW is addressed by the prospective performer in the proposal and becomes the specific instructions for work performance in the l resulting contract or work ordering instrument. The Project Manager is the original author. The remainder of this chapter is intended to provide assistance to those who are or will beccme authors of Statements of Work. B. Statement of Work Defined The SOW is that portion oft the Request for Procurement Actlan submitted by the requiring office to the Divbion of Contracts (DC) or, the Request for a Proposal submitted to a DOE activity that describes the overall technical requiremerit of a project. The SOW is one of the most vital elements of the solicitation. It
, provides prospective contractors or DOE Laboratories with the l esential information needed in the preparation of proposals.
The SOW may contain introductory and background material, technical problem discussion, technical guidelines, suggested approaches and methodology to problem solution. The SOW should also include reporting requirements, research references and related information, and sundry other data, which in the judgment of the requiring office will assist offerors in preparing technleal proposals. The SOW is the document in the solleitation and resulting contract or order that explicitly describes the tasks to be performed; the item or l equipment to be developed; the methods by which the NRC determines ' that its requirements have been mett ond, the technical and t management data to be delivered under the contract or order. l i The SOW serves as the foundation of every contract 'or order. All I other elements of a contract or order revolve around it, are affected j Il-1 l ^ 1
,-. - . . . . . - . . - . _ . _ . _ _ . _ . . . - _ - - _ . . - - - - -_-- - . - - . -~ ._
by it or depend upon it. Problems during performance are often traceable to its language, approach, terminology and content. The SOW sets forth the definitive work requirements. The language in the i SOW, which defines the scope or outer limits of the contractor's or Laboratory's endeavor, is of critical importance. C. Importance of the Statement of Work When issued in a solicitation to commercial contractors, the SOW may
- affect the number of quallfled prospective contractors willing and able to respond. If it is not sufficiently definitive, some prospective contractors may not submit a proposal, either because of uncertainty about the risks involved, or because they do not understand the relationship between the requirements and their capabilities.
These principles also apply when issuing a Request for a Proposal to a DOE Laboratory. The Lab will respond: however, when the proposal is reviewed, it may reflect significant variances from those intended if the SOW is not sufficiently definitivo. If tne SOW is too restrictive, qualified contractors may feel that their creativity will be inhibited by the Government and, therefore, may not respond. An overly restrictive SOW to a DOE Lab is apt to foreclose on desirable initiatives that could be extremely helpful in problem solving. If the SOW presents a clear and definite requirement, tha submission i of well-conecived proposals will be facilitated. Failure to specify in an SOW exactly what the requiring office desires and needs may encourage offerors to build in inflated cost contingencies or underestimated costs. The same can occur with DOE Labs. Skill and care in drafting the SOW can be of great significance in reducing the size of proposals, the time and cost of their preparation by offerors, and facilitate evaluation of proposals by the Government. The type of contract to be negotiated with a commercial firm is related to the requirements of the SOW. For example, if the requiring office is able to clearly quantify or otherwise describe the technical requirements of the proposed work, and has an adequate understanding of time and cost factors, a fixed-price type contract may be feasible. On the other hand, if the performance, time and cost factors are uncertain, a cost-reimbursement type contract may be the only alternative. Orders for work issued to DOE Labs are on a cost-felmbursable basis. h Even so, the more exact that work, cost and time can be quantified or described, the more concise and clear will be the propossl, and the more objective the cost estimate. I Il-2
. --.= -. . . - - -. . - _ _ - . _ - _ - _. - .- _. .-_ _- - _ _ _ _ _ _ .
I < ! After a contract or order has been awarded, the requirements set i forth in the SOW constitute the ultimate standard for measuring the , { Laboratory's or the contractor's performance. Notwithstanding [ ! extensive oral and written communleations between NRC and the , Laboratory or the contractor as the work progresses, the parties must l look to the language of the SOW as the final determinant of the i responsibilities and obligations. ! 1 L , The SOW plays a vital role in performance and evaluation. A l i determination as to whether a Laboratory or contractor is satis- ; , factority performing the contractual commitment is dependent upon ! i whether or not the SOW identifies measurable technical performance, j time and cost goals. , D. Orrantzing the Statement of Work ) , Achieving optimum definition in SOW's for services is a goal not easily i j attainable. In certain situations, the program activity may find it l either impractical or impossible to state speelfically the nature and l extent of the effort. However, logie and order have the obvious i advantage of enhancing the readability and accessibility of the ! ! material presented. SOW writers must be continuously sensitive to the . j requirement that information throughout the entire SOW be consistent l 1 and that contradiction and ambiguity be avoided. , i E. Elements of the Statement of Work ! ( De nature and content of the several elements that may be included l ! in SOW's are discussed below: i
1. Background
This seet!on should consist of a brief overview of the requirement 1 and how it fits into the larger NRC program. De relationship of
; this project to others, past, present and future, may be explained in l
- order to orient offerors for commerelal work, or Labs for DOE '
j work. It may also be appropriate to discuss some of the technical 4 p=oblems that are expected to arise if certain techniques are
. known to be inappropriate, this is a good place to introduce that
{ fact. i j Depending on the speelfic project, it may be helpful to separate
, information into an Introduction, with General Background and a Discussion of the Technical Problem being given their own sections of the SOW. The length of the material is one consideration.
Another is emphasis: if the relationship to past work and the methods whleh were used was critical, then a separate section j would tend to focus attention of these points. I q 2. Objective
) h specific objective of this pispcd contract or order (as I ) opposed to overall program objectives) should be stated here.
Il-3 i - 1
4 I This can be important in orienting proposals. Essentially the same tasks should be performed differently if the purpose is different. For example, testing to determine compliance with existing -} } regulations should be managed differently than testing to j determine if revised standards are required. A clear statement of , purpose will assist in deciding what type of effort would best serve [ NRC's needs.
- 3. Tasks to be Performed f 1his is the description of work to be performed. It should state j what needs to be done and, to the extent recessary, how. Any interface with the Project Manager, or Government provided items (property, data, assistance or guidance) should be spelled out. This section must clearly and unambiguously state what has to be done, by whom, by what methods (if speelfication is appropriate), and when.
If the job to be done is complex or lengthy, it may be helpful to describe it in terms of phases or tasks. In some instances, a formal work breakdown structure may be needed.
- 4. Project Management and Control Requirements if the contractor or Laboratory will be required to employ particular management tools to ' track progress, these must be stated as part of the SOW. In many cases, these requirements will be relatively simple and can be listed with contract tasks. But 10 )
techniques such as PERT are to be used, or if speelal quality control systems should be employed, listing these in a separate section provides emphasis on them. Remember, if the SOW does not speelfically require some action, then the Laboratory or the consraetor need not do it.
- 5. Reporting Requirements and Deliverables in many cases, the final product of an NRC contract will be a report. This, of course, must be listed as an integral part of the work requirements, in addition, all requirements for progress or other interim reports should be shown. The topleal coverage, due Jates, number of copies, and individuals who will receive them should be listed. Format requirements, if any, should be shown.
Existing standards contained in NRC Manual Chapter 3202, "Publication of Regulatory and Technical Documents Prepared by NRC Contractors, including Documents Prepared on Interagency Agreements," must be referenced in order to be binditg on the contractor or the Laboratory.
- 6. Inspection, Test and Acceptance Criterla Except for some very basic standards of the industry, only those standards set forth in the order or the contract can be applied to assess compliance with the terms of the agreements. The
}
II-4
standards to be applied can often be listed with task descriptions or reporting requirements. But where the inspection and testing to be ( done cannot be concisely stated in the body of the tasks, it is helpful to put them into a separate section of the SOW.
- 7. Exhibits and Reference Documents Lengthy material, of whatever nature, should generally be separated from the basic content of other sections of the SOW.
Such times should be provided to offerors as exhibits. For example, if it takes ten pages to describe a statistical sample technique to be employed, it would be better to say "sample in accordance with Exhibit 1" than to include all of the details within the task description. Similarly, if there are twenty related projects that are important to the background of' a project, it would be better to speak of "projects as listed in exhibit 2" than to show the entire bibliography in the background statement. in addition, if standard documents have been referenced elsewhere ] in the SOW (e.g., NiiC Manual Appendix 3202 concerning documentation requirements) It is helpful to list them again in this , section. The separate listing helps to ensure that prospective l contractors, or the Lab which is being requested to submit a ; proposal, are aware that they should get these references prior to submitting a proposal. Instructions for obtaining such reference items must also be included. I Items such as drawings or illustrations should definitely be in exhibits. Care must, however, be taken to ensure that every i exhibit or referenced document is properly and consistently j identified in both the body of the SOW and the reference list. If l there is any inconsistency, an ambiguity could be created.
- 8. DOE Specific l
The NRC Manual, Chapter 1102, Appendix, Part I prescribes a i format for a Statement of Work when requesting a proposal from a l l DOE Laboratory, it does not contradlet any of the statements l 3 made above. The statements and the format are complementary to each other. When preparing a DOE Request for Proposal, the prescribed format should be utilized, enhanced by the forgoing ) statements. F. Design versus functional or performance requirements A design requirement is one whleh tells the contractor what the i final product is to be. To state the final report is to be typed,
- single spaced on plain, white bond paper with an image area of 6 x 8-1/2 inches is a design requirement. So is a requirement that the I vessel must be 99.% or more lead with a carbon content of less '
than 0.005%. I ,i ( i l I I1-5
A performance requirement is one which tells the contractor what the final product is to do or the funct!on that it is to perform. To state that the final report will include conclusions concerning the ; hazards of waste disposal in unmined salt domes is a functional requirement. So is a requirement that the vessel must shield 99.9% or more of gamma radiation. As is obvious from the examples, most SOW's will be a combination of design and performance requirements. The distinction, however, is important. The tendency of most technical personnel working on a contract is to wish that they were doing the project themselves. For most people, hands-on work provides greater professional satisfaction. As a result, the tendency in writing the statement of work is to tell the contractor exactly what to do. This is solnetimes perfectly appropriate. But usually, better results are achieved by leaving the contractor with some degree of professional latitude in pursuing prNect goals. Functional or results oriented SOW's are therefore usually preferred in the type of work that NRC requires. In a services environment, design specifications take the form of prescribing the methods to be used. Unless there is a real need to take the speelfic approach, the SOW should be stated in terms of aesults to be achieved, leaving the methods up to the contractor or the Laboratory performing the work. %Is does nolmean that NRC has no control over methodologv. That comes from evaluation of proposals which luclude a des.rlption of the approach. There is also a legal aspect to this distinction. Design requirements have an implied warranty of fitness for use. This means that the obligation is to do what the SOW says whether or not the results have any value whatsoever. If a design requirement is badly written (so that the end product will not work) the contractor or the Laboratory is legally permitted to deliver worthless products. In fact, the contractor is legally required to do exactly what is in the contract even if that means to proceed merrily to waste NCR's limited funds. The same kind of actions can occur with a DOE Laboratory. Performance requirements, on the other hand, obligate the performer to achieve the end results as listed in the SOW. De Project Officer must find a way to make the item work or to meet l the standards set for performance. In other words, both technical achievement and economy are served by writing performance SOW's. Design requirements should be used only where they are necessary for the project. State what must be achieved; do not tell the performer how to do it if that can be avolded. 1 l e 11 - 6
O. Writing the Statement of Work (' The job of writing, correlating, editing, reproducing, and assembling the components of the SOW is a formidable one, depending on the size , and complexity of the proposed effort. The expertise of many professions is required to effectively communicate to prospective contractors or DOE Labs a work requirement in writing. On larger projects, professionals of several disciplines, such as physicists, biologists, chemists, economists, and engineers, may contribute to the work statement. The tasks of editing, coordinating and integrating their separate efforts requires special attention. The overriding objective for all SOW's is to communicate to prospective Ontractors or DOE Laboratories a clear statement of what is soug .( and what is needed to successfully perform the project. To achieve this objective, the SOW must:
- Arrange ideas in an orderly fashion; Avoid redundancy, contradictions, ambiguities, duplication and overlaps Attain definition and clarity:
4
- Use language that will minimize the chances of misinterpreting the true intent of the NRC a reader should not have to search for meaning and interpretation because of a poorly written SOW '
( Avold or eliminate all material which is not necessary to describe the work, or which might add to costs. Assure the document is definite enough to protect the Government's interest, yet broad enough to allow for ingenuity on the part of the prospective performer.
- 1. The language of the Statement of Work
- a. Legal Implications l The SOW is an integral part of the contract or DOE Order, and is, therefore, subject to all the requirements for drafting and interpreting contract instruments. indeed, because the SOW describes the essential nature of the job to be done by the contractor or Laboratory and often in language that is not widely understood, the opportunities for misinterpretadon are l great. Normally, when there are no difficulties over interpreting the language of the agreement, all goes well between the parties. When trouble arises, and the parties become adversaries, the need for clarity and precision of a legally well-draf ted SOW becomes particularly significant.
11 - 7
s . Remember, the basic rule of contract interpretation is that anything which is not clear will be interpreted against the party who wrote it. Thus, if there are any ambiguities or omissions ) from the SOW, it is the NRC that is likely to suffer from the effort. Further, remember that if a problem does arise, it will be a court or an administrative board that has the last word on what the contract means. As part of a contract, the SOW is a lawyer's document as well as a technical one. It is obviously
. not possible to avoid technical terminclogy in a technical
( document. But to the greatest practical extent, the SOW L should be written so that the Contracting Officer and other non-technical personnel can determine exactly what is required despite their lack of technical expertise. The same legal implications for a contract do not apply when work is performed by a DOE Laboratory. The principles set forth in the preceding paragraphs do. Interpretation of whether a DOE Laboratory accomplishes what is required by the SOW is a moot point. When major disagreement occurs the decision will be made by a combination of technical and administrative personnel. The technical personnel involved in the decision making will in most cases not have intimate familiarity with all aspects of the project since they will be technical managers for the most part, in any event, dollars will have been spent which are not recoverable. To accomplish undo te or incomplete tasks will require additional resource generation.
- b. Writing Style ,
The primary considerations are that the SOW should contain precise language, free of vague and ambiguous terms, using the simplest phrases that will convey the intended meaning. Consistency in terminology will contribute to clarity and usefulness. Sentences should be concise. Minimize ! punctuation. When extensive punctuation is necessary for l clarity, sentences should be rewritten. Compound sentences l should be separated into short simple sentences. Whenever an SOW expresses a provision that is binding, the word "shall" is to be used. "Should" and "may" can be construed as declaration of purpose or a mere preference instead of a clear directive. In general, the emphatic form of the verb is appropriate in the SOW when it is intended to require the contractor or the DOE Laboratory to do something. For example, when discussing the technical requirements in an SOW, a phrase such as this should s be used: "The indleator unit shall be designed to display the following data." In testing and quality assurance discussions, this kind of statement should be used: "The indleator shall be turned to zero and 100 volts alternating current applied." For specific test procedures, the imperative form may be used, II-8
l provided the entire method is preceded by wording such as this:
"The following test shall be performed." "Will" is necessary in
( cases where simple futurity is required, e.g., "power for the i motor will be supplied by the ship. I The active voice of the verb should be used in delineating speelfic tasks. Thus, a task statement: "The contractor or Laboratory shau evaluate essential data" is more emphatic that: "Essential data shall be evaluated by the contractor or ) Laboratory."
- c. Consistency ;
! The same words c phrases should be used throughout the SOW 4
to express the same meaning. It is partleularly important that i the use of nomenclature to describe a technical process, hardware or parts be consistent throughout the text. For
- example, a part once defined as a "cover" should not be i
- referred to elsewhere as a "plate." When a reader of an SOW
- observes a variation in a work ' process, definition, nomenclature, or phrase, he will look for a new meaning, and ambiguity or outright contradiction may be the result, i
- d. Avoid Ambiguity J
i Avoidance of words or phrases that obscure meaning and hinder j communication is particularly necessary in preparing a t (' document as binding on the parties as the SOW. Some types of i words and phrases are especially susceptible to misinterpretation and, therefore, should be avoided. For , J instance, the word "include" may mean "include but not limited i to"-or could mean consists of." Other words of this type are ] "guide," "guidance," "or equal," and "average." If it is necessary ' 1 to use such words, their exact meaning should be defined. More j often than not, in using these words, too much is attempted by , the performer and interpretations that were not intended may i result. It may lead to the conclusion by the Project Manager , j that the Lab or contractor did what he wanted, not what the Project Manager intended. his may be true, but the blame is ! not attributable to the performer. l 4
! e. Vague Words l Selecting and using words of the desired preelslon is a g 1
challenge, particularly in technical writing. Among the more ,
- ) commonly used words that may create difficulty are theset j
! "augment," "implement," "parameters," and "funettonal." When .
) it is necessary to use words of this kind, care should be taken to ! j assure that they are clarified in the text or otherwise defined. 1 i i n-e ; l i E_ _ __ - ___ . _ _ _ _ . _ _ __ _._a
- f. Write Carefully A well-written SOW serves several purposes. On the business j side, it facilitates sound pricing. If offerors know precisely what is required, they can propose prices without unnecessary contingency factors. This, in turn, leaves more funds for work which otherwise might have to be deferred for lack of money.
On the technical side, it enables offerors to provide realistic plans for doing the job in their proposals. This improves the chances of making the proper selection of a contractor or Lab. Further, during performance, a sound SOE helps prevent false starts or misdirected effort which leads to claims or excess costs. , Writing a good SOW is not easy. It is extremely important that a drafter think about the varying audiences who must deal with the document. The work requirements must be clear enough for technical personnel in contractor and DOE Laboratory organizations to plan for performing the work. It is never safe to assume that even another technical expert will understand what is required based on a vague description. Although there are administrative means for redirecting work during performance or for fixing up the holes in the SOW, such actions are wasteful and inefficient. The key to smooth performance, and the attainment of technical objectives, is to start with clearly defined tasks and an SOW that will only have to be modif8ed as conditions change. l g. Review and Finalization of the Statement of Work - l Development of SOW's is a joint responsibility of technical and contracts personnel. The SOW should state exactly what is wanted, avoiding all fuzziness of thought and obscurity of expression. If the job to be done cannot be expressed in direct, concise language, one may get only a vague "understanding," insufficient to carry the contractor through to a successful completion of the project. Review of the draft SOW will have marked impact on the quality of the finished document. Sufficient time must be allowed for a critical reading of the original drafts, and for rewriting and correction when necessary. Second and subsequent draf ts should themselves be reviewed and corrected. Once the SOW is received in the DC, it becomes the subject for further review and analysis by procurement personnel (1) The Contracting Officer and the contract negotiator will be concerned with the overall sufficiency of the SOW, and especially the extent to which it can support the recom-mended contract type. Their editorial review often leads to greater clarity even in purely technical areas.
)
11 - 1 0
4 (2) The legal review will be concerned with whether the SOW clearly describes what the contractor and the Government - ( are legally obligated to do under its terms.. (3) The contract negotiator will review the SOW (as well as : the entire procurement package) for overall adequacy and ' will coordinate any questions or problems with the SEP. Those responsible for review of SOW's should keep the [ specific purpose and objective of the effort and the results , required in mind during the review process. The following ; questions may be applied to determine whether speelfic , material should be included in an SOW (material that does ; not pass the tests should generally be revised or left out of the SOW):
- Does it tell the contractor what he is required to do?
- Is it necessary in order for the contractor to determine (
what is required of him? ! l 1
- Is it priceable?
i ! For DOE Requests for Proposals, the role of the Division of j Contracts is a responsibility of the Office Director or
- Regional Administrator sponsoring the speelfic project.
i The same staff support activities who assist the DC are solleited during coordination as appropriate. These are ( non-technleal personnel for the most part and they will review the SOW to some degree. Therefore those t principles illustrated above for a commercial transaction I q , also apply when utilizing DOE as the performer. ! l l H. Cost Estimates i Cost estimating is the process of forecasting future costs for the i i operation of a program or the performance of a task. A cost estimate l ! is required as part of every Request for Procurement Action and 3 j Request for DOE Proposal. But the estimate is not something whleh is i created only because of the contracting and work ordering process. Rather, it should be an integral part of planning and budgeting ! l programs for every office. l ! i j 1. The Funetton of a Cost Estimate l Cost estimating serves several purposes. Prior to the beginning of I I a fiscal year, each offlee must prepare its budget. At that time l } various projects are considered for inclusion within that year's ) j work plan. There are always more projects whleh could oe '
- benefielally performed than there are dollars available. Cost J l estimates for in-house, contracted, and other work (e.g., DOE !
i Labs) are needed to determine which projects should be planned { l n-11 l i l 1 i
2 k ' now and whleh must be foregone for lack of funds. In a well-managed orgunization, funds are allocated to projects based on estimates in which there is a fair degree of confidence, j ; This is the first function of the cost estimate--as a tool for planning and funding a work program. r i
- Later, the cost estimate will become a tool for the evaluation of F proposals. Later yet, the original cost estimate can become a tool l
for contract or Work Order monitoring as one standard by which to ! judge the effielency of performance.
- 2. Types of Estimates
{ l There are many different ways of conducting a cost estimate. 1 Among the most common ares
- a. Estimating by comparison (or analogy) 1 I b. Roundtable estimating (expert opinion or the Delphi method) !
) c. Parametric estimating l
- d. Engineering (or detail) estimates
, t j Estimattnr by comparison is the proces of projecting future costs q by reference to similar work for whleh actual cost data is j available. In its purest form, the costs of one project are ) , estimated on the assumption that they will be the same as for an / - Identical project for whleh cost data was accumulated, adjusted for i factors such as inflation or effielency improvements based on ; j experience. , , Roundtable estimating is the procem of asking experienced people f i what they feel a project should cost based on whatever methods i they may have used (including a simple "gut feeling" about costs) i and then comparing that to similar opinions obtained from other ! ] experts, if several knowledgeable people get together and compare l their estimates, discuss their reasons, and come to a consensus, it i is amazing how accurate these accumulated guesses and "more than/less than" conclusions can be. I i l Parametrie estimating is the process of reducing costs to a ( relationship to some performance variable and plotting the cost per l unit. This method is most applicable to hardware. It has proved effective, however, in projecting' costs on the basis of such ! variables as the weight of an airplane (dollars per pound), maximum ' altitude (dollars per foot), or speed. ] j l
- Engineering estimates are the result of a process of projecting the l i labor and material inputs to any job and applying unit costs for I each such input. In using this approach one must determine how
!!-12 l
i
much labor is needed, by work category, what the appropriate rate (s of pay would be, and then extending the totals. The same must be done for every other cost input to complete the effort. This is the type of estimate which is generally obtained from contractors as a part of their proposals. Engineering estimates can be accurate. Although much effort is required to generate one, the results often justify it. Consequently, this type of estimating will be looked at in more detail.
- 3. Engineering Type Estimates l
This approach to cost estimating builds the total estimate from the bottom up by projecting the resources needed to perform each task ( or sub-task and accumulating the results into a total estimate for the project. When one says "from the bottom up," it means that one starts with the requirements for a job to be completed and determines what it would take to "build" the final result needed from the beginning. This process can be viewed as consisting of three major steps: Step 1: Technical approach (a) Review the Statement of Work (b) Break the project down into manageable components (c) Determine the approach to be taken for each task or sub-task Step 2: Resource estimates (a) Determine the types of resources (labor, materials, etc.) needed to perform each task (b) Estimate the quantitles for each type of resource input needed for each task Step 3: Applying pricing factors (a) Determine unit costs for each resource input and extend totals for each category (b) Apply reasonable indirect cost (overhead) factors (c) Add an allowance for profit (if applicable) To perform Step 1, one must have a sound statement of work which sets forth clear and specific work requirements. It is worth noting at the outset that, if you cannot develop a realistic estimate of costs for performing the work, it is not likely that offerors will be 11 - 1 3
able to do so either. Consequently, an inability to estimate is a good sign that the statement of work should be reviewed and rewritten as needed. This does not mean that the SOW should always detail the precise methods that a contractor must use. In a research type environment, some degree of methodological flexibility is essential to ultimate success. The key point is that project functions must be clearly indicated so that a method can be realistically chosen to perform it. Odds are that contractors will all choose different methods and that is no problem. What is a problem is a situation in which different offerors can perceive widely differing sets of project goals.
- 4. Use of Breakdown Structure Techniques Step 1 generally requires the use of some form of Work Breakdown Structure technique. A Work Breakdown Structure (WBS) is the systematic analysis of the project into its component parts (tasks and sub-tasks) each of which is called a work package. Displaced graphically, a WBS looks much like a standard organization chart.
At the top one finds the total project. Level! PROJECT At the next level one finds the major components of the job, each of which must be completed before the project and be finished. Level H Task 1 Task 11 Task HI
)
One level below, one find the components of each major task. Level III Sub-Task 1.A Sub-Tosk I.B. Sub-Task !.C. etc. The reason for creating this structure is that the total costs are of ten extremely difficult to estimate because there are so many factors to be considered. But if one is working with a relatively simple and small task, estimating is far easier. Even the most complex job consists of a series of such small tasks. By creating the WBS, one ultimately ends up dealing only with small and relatively easily estimated tasks. Let us take a simplistic example for purposes of an analogy: the job is planting a garden. The WBS for this job might look something like this 9 11 - 1 4 i f l - M >. .' igg.t, g _
I Level! plant the garden 1 ( i Level!! planning spring summer crops crops i l Level til prepare plant clean up l j ground seeds and organize l i l . LevelIV take out spade apply rake smooth ! tools fertilizer l
- l j
i Note: This is not a complete structure since at each Level only one of the ; work packages has been further subdivided into its lower level components. To complete the job, one would have to determine the steps necessary to j complete each work package. ; i 4 This partleular work breakdown structure is based on a number ! of assumptions about the statement of work which would have to l have been determined from analysis in an actual case. For [ example, it is presumed that this particular garden will have two ' I plantings (spring and summer). The structure would be somewhat i different if the SOW called for planting only summer crops like : corn and squash, Likewise, if the SOW contained strict quality l (, standards for the fineness of soll, Level IV might have "rent ; j roto-tiller" and "till" instead of "take out tools" and "spade." > This is an example of how the technical approach must be i j considered in the process-the steps needed for the job (and [ consequently later estimates of resources and costs) will differ , not only by the details of the work but also by the methods [ j chosen to perform it. When estimating one should project an , ! approach whleh is somewhat conservative but not extreme (i.e., I i do not estimate for either bare bones minimum or gold-plated j i excess). When offers are finally received there will be variance j from your estimate because the actual methods proposed will ; i differ. Aim for a realistle mid-point around which co npetent : offerors' prices will be arrayed. l In the simple example above, it is important to note that the ! structure in far from complete. "Planning" is listed at Level 11 as i a function whleh is required for completion of the job. As this ; structure is set up, Level !! is actually a display of three phases i of work. Phase A is planning, Phase B is the spring crops, Phase C is the summer crops. In the planning phase, one would have to l-i
- have determined what to plant, where to get the seeds, where i they would be planted, and have bought the tools and seed necesary. '!he WBS is g time dependent. Trying to display 1 the sequence of tasks at this point unduly complicates the I
process. Il-15 I i
1 j There is no set rule concerning how far one should go in the . process of breaking out work packages. One should go as far as l Is necessary to have confidence in the estimating process. This I '! ] will differ not only from project to project but also from task to f 1 task. For example, drafting a report is a work package that i i could be broken out into many small components. If the total job ; ! were the writing of a report from data supplied by NRC,it would ; i be beneficial to break the task out into its component parts. But t If the report is one of fifty tasks needed to complete a larger ! ) project, the benefits to be obtained from further detailed i
- analysis woule* probably not warrant the cost. l 1 i
- 5. Resource Estimates '
i l Once all of the work packages have been identified, one een I proceed to Step 2. Because engineering type estimates are what j } one obtains in a contreetor's cost proposal, consideration of the
- resources displayed in a proposal is helpful. The pricing form l used is a Standard Form 1411. It requires offerors to break out !
l their projected costs into categories including: ' j (1) Direct Material (broken out into further categories by the j source f rom whleh they will be obtained, e.g., subcontracted f items, purchased parts, and raw materials) [ t (2) Direct Labor (broken out by labor category showing i j estimated hours, an hourly rate of each, and extended totals) !' 1 ' ) (3) Labor overhwad [ 1 j (4) Special testing (5) Speelal equipment (items whleh would be obtained for this project only without a signifleant usefulness for other work) ! f (6) Travel (broken out into transportation and per diem) (7) Consultants d l ) (8) Other direct costs (this is the eatch-all but it would l 1 generally include things such as subeontracts or computer ! I servlees) ; i l l (9) General and Administrative expenses ! (10) Fee or profit j 4
' i For the types of projects generallf done by NRC, the critical I resources to be obtained are direct labor, some speelal testing l (or other subcontreeted technical servlees), travel, and consultant. Obviously, the categories of resource inputs depend on the speelfle task in the WBS being estimated. In general, i '
I i 11 - 1 6 i
however, the key inputs will be labor and could be subdivided g into categories such as: (i) Project Manager (11) Senior Researcher l (iii) Research Assistant (iv) Clerical For each task, one needs to determine how much time should be ( allowed for ea1h type of labor input. Because labor tends to be the key input into NRC work, this is the area which deserves the most attention. It does not matter whether the actual contractor would do all of the work with its . own staff or if a major portion would be subcontracted to other l firms. For estimating purposes it is reasonable to project costs as though all of the basic work were to be performed by the I single contractor. One exception to this is the area of commercially available services. For example, if the prcject were to call for a large number of lab tests, one would neither break out the steps of such testing in the WBS nor project labor inputs for each type of test. It is better to identify any such services separately and to i later assign a cost estimate based on the existing commercial charge for running each test. The same may be true for aspects of the work like computer services, in the estimating process, i those types of items can be breken out for separate estimating without being concerned with the speelfic labor inputs needed. l The presumption is that the reasonable and realistle cost for ! each such item will be determined by the commerciel market. With those types of services (as with items such as materials or travel), one still needs to estimate the quantitles required but at leser degree of detail. Conceptually, a full WBS would include all of the labor inputs needed to fly project personnel to a meeting with the Project Manager. But it would be ludicrous to allocate flight attendant and pilot time to the trip-the final cost estimate is one trip times coach air fare. In other words, do not reinvent the wheel. Use standard costs whenever they are available.
- 6. Pricing Direct Costs The next step is pricing each of the resource inputs for the project. Steps 1 and 2 are essentially technical in nature and ought to be performed by project personnel. Step 3 is best done in conjunction with contracting personnel who are more deeply involved with cost factors.
11 - 1 7
Data with respect to unit costs of various resource inputs is reasonably available.
)
The Department of Labor, Bureau of Labor Statistles, for example, publishes an annual survey of professional, administrative and technical pay. Various professional societies publish their own surveys covering positions within their own fields (e.g., engineers). Personnel within the Division of Contracts can help to locate these sources. For labor costs specifically, it is reasonable to project the various labor rates by analogy to federal employee wage scales (i.e., if a task would be performed by a GS-12 If done in house, then a GS-12, step 4 or 5 pay rate would supply a reasonable estimate). Further, very few efforts are unique. At some time in the recent past, a contract has been awarded calling for almost every conceivable type of labor. Labor rate estimates can be obtained by reference to current invoices under cost reimbursement contracts now in effect (but be careful, labor rates are sometimes stated so as to include certain types of fringe benefits; a contract specialist can help determine what the labor rate includes). Other costs can bts estimated by reference to appropriate sources. Travel, for example, is relatively easy-look in a copy . of the Official Airline Guide for coach air fares and use
- Government equivalent per diem as a guide for those costs.
Standard commercial type items are often listed in catalogs which a contract specialist could help to obtain. Standard services (including computer time) are offered commercially and prices can be determined from catalogs or from existing cost type contracts. Technical personnel will need help in this area. But finding reasonable estimates for unit costs is not an unusual task for contracting personnel. Remember, however, that the average cost today published in a wage survey is not likely to be the average cost over the period of performance of the contract. The cost estimator also needs l to factor in the effects of inflation or other price level changes. l There is no firm rule on how to do this. No two economists ever seem to agree on anything-particularly future price levels. The > t key is to be reasonable. Make sure that you know how old the : base cost estimate is, update that to current levels, then project l future costs over the life of the contract with inflation in mind. The final results will be a best guess. If it is done with care, it will be fairly reasonable. The estimate cannot be perfect the i goal is to get into the right ballpark. A variance of plus or minus ( ) 20% from final negotiated costs on a project is actually pretty good estimating in an environment of cost relmbursement contracting. Do not agonize over details in anyone work package ; 11 - 1 8
or over whether 8% or 9% is a better index of likely future
; inflation. Some estimates will be high, others will be low--generally they will tend to offset one another.
- 7. Indirect Costs (Overhead) and Profit The foregoing apply to direct costs. Indirect costs foyerhead) are a different matter. One of the major reasons why one has to expect variance in final negotiated costs from those initially estimated is that, even if direct costs could be precisely projected, every firm has a different burden of overhead to be applied. Even the methods of application will vary among orgLnizations. Some firms have a single rate which is applied to their direct labor costs. Other firms have multiple rates (e.g., a labor overhead applied to labor costs only and a general and administrative expense rate applied to alproject costs).
Because there is no real consistency in how such costs are accumulated or charged among contractors, the actual costs finally charged to NRC will depend on the organization which receives the contract. But at the point of preparing the cost estimate, a single number is needed. De solution is to use a number derived from experience as representing an average for NRC contracts. The best recent estimate developed by the NRC Division of , Contracts was: 90% of total direct costs (excluding travel) for projects requiring laboratory facilities 75% of total direct costs (excluding travel) for projects not requiring laboratory faellities There are several cautions to the use of these factors. First of all, they do not reflect overhead percentages as they are likely to appear in a cost proposal. Almost no firms have a single indirect cost rate applied to total costs. Dat is not a problem because the goal is to arrive at a realistic estimate for total costs and not to project how elements of an offeror's cost proposal will look. Second, it is important to ensure that labor rates are stated without any fringe benefits included. If someone's pay stub says that they earn $10.00 per hour, the cost per productive hour might be $11.50 (the extra $1.50 is the cost of vacation and slek leave earned). If one then adds the costs of Social Security and/or pension plus insurance, the total hourly labor cost for the $10.00 per hour person could reasonably reach
$15,00. In labor intensive work, the difference between a $10.00 base and a $15.00 base after the application of the indirect cost factor is substantial. The direct cost base for labor should be average hourly wage or average yearly salary divided by 2080.
The indirect trading of 90% or 75% will account for the
i I fringe benefit costs. Third, travel is excluded since it is rarely burdened in contractors' accounting systems and because the amount estimated is dependent on a clearly arbitrary assumption ) ; concerning the location of the contractor. Finally, a profit or fee factor must be considered. Two aspects i of the project must be considered: the type of contract and the ! complexity of the effort. Once again a rule of thumb will be ; For a fixed price contract start with 13% profit For a cost relmbursement contract start with 7% fee These percentages are to be used for routine work. If the project is moderately complex, add 1%. If the project is highly complex (e.g., it calls for state of the art research) add 2%. We resulting profit or fee factor should then be applied to total i costs including all direct costs plus the overhead estimate-this c time include the amount estimated for travel. j
- 8. Summary of Engineering Cost Estimating l
In summary, an engineering cost estimate is developed by taking , the following steps: l (1) break the work down into relatively small work packages j (2) estimate the types and amounts of resources necessary to 1 f complete each of those work packages j (3) apply unit cost factors determined from surveys, published f price lists, standard costs, etc.-and make use of the ; expertise of contracting personnel ! (4) get a direct cost total and apply overhead at the rate of f 75% for work without a lab and 90% for work with a lab (but L do not include travel in the base) ! r (5) get a new total of direct cost plus overhead and apply a [ profit factor (Ibl5% for fixed price work and 7-9% for cost j reimbursement work) (6) add up a grand total
- 9. Estimating by Analogy and Hybrid Estimates l As the preceding section indicates, producing an engineering i type estimate can be time consuming and difficult. Estimating by analogy, on the other hand, can be just as accurate and far ;
easier to do when the 1onditions are right, j l i Il-20 f
_ - - - - - -. -_- - --- _.- = -_-__ h i t 1 i Pure estimating by analogy can be done only when the work to be i f done duplicates some prior pr6Jeet the costs of which are
\' known. NitC rarely has the same work done twice-there are i
- very few opportunities just to look up last time's cost and '
I project it for this time. But if you can, do it. Even in the textbook case of identleal work, some adjustments are needed. Inflation is an obvious source of difference. Work .
- done this year is likely to cost more than last year by a factor of l 1 7-10 %. Another adjustment may have to be made based on the [
past performance. If the records show that the contractor ; i experienced a number of unusual diffleulties in performance, ' then the historleal costs are likely to be higher than they should now be estimated. Conversely, if everything went like 4 clockwork, the historleal a.nount probably ought to be ineressed - l to account for some number of likely problems that will occur in
- 1 performance. Further, if there have been several similar i I projects, it is benefleial to adjust all of them to some base in i
. time (adding or subtracting inflation as applicable) and averaging l the results. If such an average can be derived as the base for comparison, it is reasonable to presume that contingeneles will i also be averaged. i l But very few projects fit the textbook case of replication. In l
- that case, it is often possible to use a hybrid form of cost i cstimating. The steps are as follows
- l l
(1) Determine the historleal base of similar projects 1 f i (2) Adjust that base for inflation - 1 (3) Isolate the differences between the pr4ect now being , estimated and the historleal base l I (4) Perform an engineering type estimate only on the i differences between the projects j Note that the logie of the estimating by analogy technique can ! also be applied as part of an engineering type estimate. Where !
- should one go to get a lead on the amount of resources required j to perform a task? If possible, estimate by comparison to a ;
j similar task in another project for whleh resource and cost j 2 information has been reported. ; Rigorous cost estimating has not historleally been a part of past i NRC contracting programs. Consequently, there is a relatively ! ! small base of estimating information to be drawn upon. 'The first j estimates done by any individual or office are likely to be j somewhat rough. But each project should add information to the base that can be useful in later estimates. Labor rate data, for instance, must be periodically updated. But between such l updates, the amount projected for a given labor eategory for one I ( l k 11-21 l i 4 . j __ _ _ - - - , . . _ _ _ _ _ _ _ . _ _ . _ _ , _ _ _ _ , , _ _ _ _ _ __ _ __U
project can be used for others. The same applies to estimates i for other unit costs and even to standard factors for amounts of I resources. ).
- 10. Common Problems in Cost Estimsting j i Novice cost estimators almost always allow too little time for !
! completion of tasks. In projecting labor inputs, it is cruelal to i remember that things do not always go as. planned. ONE MUST
! PROVIDE FOR CONTINOENCIES AND PROBLEMS. The best :
! and most effielent organization will have some false starts: time ! j is spent in staff meetings whleh are not directly productives ! i work schedules are delayed by personal absenees or personnel ; ! change-overs extra people are often carried on a project to ( l cover for others or to provide back-up capaelty critical papers t
- are misfiled and all manners of other little things add to the
; time needed for a job. These things must be considered in cost estimating, j j
The goal is to arrive at a reasonable estimation of what it will f eventually take an average contractor to do an acceptable job in the usual situation. It is not reasonable to project optimum l j effielency in anything. ; t One way to account for this is to prepare three separate l
- estimates. The first is an optimistle estimate (presume that i W almost everything goes right); the second is a high probability l i estimate (factor in a reasonable contingency for foreseeable I types of problems); the third is a pesimistle projecting (presume )
] that whatever can go wrong will). There may be a wide range ;
- among these three estimates and they normally will wt balance !
J' around the high probability figure (efg., high probability estimate i is x hours optimistle, x -104: pesimistle x +50%). Some j sources on cost estimating recommend setting the final estimate j by calculating: !
+
i optimistle + 4 times high probability + possimistle l l 6 As a rule of thumb, this is not bad. In this example, it would work out to 1.067x. Other sources recommend a probability approach e.g., there is a j 104 chance of getting the optimistle results a 10% chanee of j getting optimism plus 104: a 50% chance of optimism plus 204: and a 30% chance of optimism plus 40%. The final estimate
! would be (with y = the optimistle estimate):
I ] .ly + .l(1.ly) + .5(1.2y) + .XI.4y) = 1.23y
'this second method tends to be more accurate--but then it requires far greater confidence in the estimating process and
)
!!-22 4 __
tha +*nn s jbstantlal knowledge and experience With the detalls g
, coro.ing similar projects.
mt: 2. common source of underestimating is a failure to curutder schedules. If it would take one person 400 hours to complete a task over a period of 10 weeks, how many labor hours should it take for two equally skilled persons over a 6 week period? Most people would say 400-200 for each person. But in general, that would be incorrect. As soon as two people begin to work together there is a need for additional planning and coordination of efforts between them. When the schedule is compressed to 6 weeks, it is likely that each person would work full time or 240 hours on the job--and even then they might not meet the deadline without overtime. We additional 80 hours is not wasted time, it is the premium paid for getting it done faster. And if the schedule calls for completion of the effort in 3 weeks, one would probably need a staff of six to get the job done (about 700 labor hours). Finally, if the job has to be completed in one week it may not be possible no matter how large the staff since coordination and planning time tend to grow exponentially. Every worthwhile project has to be tested. This is often forgotten in the estimating stage. And if something has to be tested, it follows that there must be some rejects from that testing. Everyone makes a mistake now and then. The cost estimate should include an allowance for such mistakes. It is not ! reasonable to make projections based upon 100% effective performance. Even an optimistic estimate of resources should include a factor for "scrap." The other side o.' this same question sometimes leads to highly inflated estimates. Some estimators start off with the question:
"how long would it take me to do this job?" If the estimator is expert and highly productive, the final refult will be too low.
But if the estimator is not an expert, then he or she might allow an inordinate amount of time for some task. The proper question is: "how long should it take the average professional practitioner to do this job given time for planning, coordination, the perversity of nature, and a reasonable number of mistakes and/or false starts?" The proper question is a bit more complex--but it will yield far more useful results. Finally, note that the question is stated in terms of the averare practitioner. It is not uncommon for estimators to envison a team of highly quallfled persons working together to accomplish the job. That may be what one wants to get--but almost no organization is so staffed. Every team has a second string and some of them will play for you. 11 - 2 3
4 !. Speelal Contractual Reculrements ! Many requirements must be addressed in speelfle ways or receive I approvals from areas within or outside of NRC before they can be ; procemed. Among these are:
- l. Automatic Data Processing Equipment (ADPE) ,
l
; Depending on the monetary value of the equipment required, j NRC may be required to request a Delegation of Procurement t Authority from GSA in order to procem an ADPE solleitation i itself. GSA, by regulation, has sole authority to buy ADPE and A can, at its option process the buy through its own acquisition .
group. l In addition, ADPE solleitation documents are different in form ; and content from the normal "standard format" Request for j i Proposal (RFP) used in other procurements. Further, ADPE : speelfications must be written in "performance" terms alone, so ; as to obylate any tendency to limit sources whleh may be able to : respond. l i j 2. OMB Circular A-76 ! l, OMB Circular A-76, establishes the polleles and procedures used ! to determine whether needed commercial or industrial work . l should be done by contract with private sources or in-house using l Government facilities and personnel. jl l ; j The Circular states that in a democratic free enterprise l economic system, the Government should not compete with its r citizens. The private enterprise systa'n, characterized by ! Individual freedom and initiative, is the primary source of l national economic strength, in recognition of this principle, it I has been and continues to be the general polley of the l Government to rely on competitive private enterprise to supply ' the products and servlees it needs. The Circular is based on ' three polley precepts: ;
- s. Rely on the Private Sector I J !
i The Government's business is not to be in business. Where f j private sources are available, they should be looked to first ;
- to provide the commerelal or industrial goods and services l needed by the Government to act on the public's behalf. !
l 4
- b. Retain Certain Governmental Funettons In-House i l l j Certain funettons are inherently Governmental in nature, !
being so intimately related to the public interest as to i mandate performance by federal employees. [ l l ! 11 - 2 4
- i I l io !
_ . _ _ _ ._ -. -- _ ._._ __ _ ____ _ _ _.___ _ __ _w
- c. Alm for Economy by Cost Comparisons g
When private performance is feasible and no overriding 4 factors require in-house performance, the American people deserve and expect the most economical performance and, therefore, rigorous comparison of contract costs versus in-house costs should be used, when appropriate, to decide how the work will be done.
- 3. Definitions
- a. Government commerelal or industrial activity is one whleh is operated and managed by a Federal executive agency and which provides a product or service that could be obtained from a private source. An activity can be identified with an organization or a type of work but must be (1) separable from other functions so as to be suitable for performance either in-house or by contracts and (2) a regularly needed activity of an operational natura, not a one-time activity of short duration associated with support of a particular project.
t, . An ernansion is the modernization, replacement, upgrade, or enlargement of a Government commercial or industrial activity involving additional capital' investment of $100,000 or more, or increasing annual operating costs by $200,000 or more; provided, the increase exceeds 20% of the total investment or annual operating cost. A consolidation of two i or more activities is not an "expansion" unless the proposed total capital investment or operating cost exceeds the total l from the individual activities by the amount of the threshold. An expansion which increases either capital investment or annual operating cost by 100% or more is a "new start."
- c. A conversion is the transfer of work from a Government
- commercial or incustrial activity to performance by a private commercial source under contract.
- d. A new start is a newly-established Government commercial or industrial activity, including a transfer of work from j contract to in-house performance. Also included is any expansion whleh would increase capital investment or annual ;
j operating cost by 100% or more. I
- e. A private commeretal source is a private business, 4
university, or another non-federal activity, located in the United States, its territories and possessions, the District of Columbia, or the Commonwealth of Puerto Rico, which provides a commercial or industrial product or service required by Government agencies. U-25 l l 1
- f. A Governmental funetton is a function which must be performed in-house due to a special relationship executing Governmental responsibilities. Suen Governmental }
functions can fall into several categories.
- 4. Procedures When it is determined that a deelsiori must be made between in-house performance and contracting out for an activity subject to the circular, special contracting procedures are needed to accommodate the cost comparison.
, A valid comparison requires that the statement of work and the standards of performance be the same for both in-house and , contractor performance. This means that the SEP must exercise special care to ensure that the contract statement of work includes all funettons that would be performed in-house but does not add any enhancements or require higher quality work than would be done with Government personnel. Once the statement of work has been developed and reviewed, the solicitation will be imuod. 'Under the circular, the con-tractor's cost portion of the comparison must be based on the firm offers for the period of the comparison (which may run to a multi-year period). Prior to receiving bids or proposals, an in-house cost estimate will be developed against the same statement of work. The methods of projecting costs are speelfled by OMB in the A-76 Cost Comparison Handbook. One . key element, however, is the level of effort and resources # required. This portion of the projection must be supplied by technical personnel familiar with in-house operation of the function. Once a deelslon is reached on the most advantageous proposal, its price will be compared to the Government estimate that was previously developed. Factors are aMed whleh favor continu-ation of a funetton as opposed to conversion - this applies whether the activity is now done in-house or by contract. The alternative with the lowest total cost (including factors for conversion) will be used. Procurement actions subject to A-76 procedures must be planned well in advance. The Circular provides for an appeal process if any party (contract or Government employees) wishes to challenge the details of the cent comparison. This appeal is separate from the poulbility of a protest of contreet award to the G AO. In crder to accommodate the possibility (likelihood) of an appeal, it is necesary that solleitations be initiated with suffielent time for the entire process to be completed before the start date of the activity in question. 4 Il-26
- 5. Consultant Services (Refer to NRC Manual Chapter 4139) ;
- a. Why Consultant Servlees Require Statutory Authorisation
( Procurement of consultant services needs special attention and requires statutory authorisation. There are three main i reasons for this first, it is felt that the civil service system ; is weakened by contracting with non-Government people to do what Government personnel ought to be doings second, l Congressional collings for elvil servants and speelal j Government employees must be observed; therefore, these ; collings shall not the executive be exceeded agencies finally,(to beauthority by statute placed in handled by I Government personnel) should not be passed on to elvillan ; contractors, j t The basic authority for procuring the services of experts and [ eonsultants is 5 U.S.C. Section G109 (as implemented by )
. Appropriation Act of Congress). The statute provides in !
substance that: i l The head of any department, when authorised in an ! appropriation or other Act, may procure temporary (not f more than 1 year) or intermittent servlees of experts or i consultants or organisations thereof, including stenographic t reporting services, by contract, and in such cases Services [ shall be without regard to the olvil service and classification laws (but as to agencies subject to the Classification Act of ( - 1949 at rates not in excess of the per diem equivalent of the . highest rate payable under the Classification Act, unless i other rates are speelfically provided in the appropriation or other law) . . . l AltWh 5 U.S.C. 3109 authorises the acquisition of consultant servlees both personal and nonpersonal, NRC has, as matter of polley (see Manual Chapter 4139), determined i that personal servlees shall be obtained via the personal ! appointment process.
- b. Personal and Nonpersonal Services Personal services means that an employee-employer relationship exists when the contreetor serves under the direction, control and supervision of an NRC employee.
Nonpersonal servlees means that the NRC has created an independent relationship with its contreetor. An independent nonpersonal relationship is charseterised by a negligible amount or tboenee of control and supervision being exercised by NRC. Admittedly, it is sometimes hard to distinguish personal fron. nonpersonal servlees in a partleular ease. Certain broad eriteria, however, do appear in the deelslons of the Comptroller General. These eriteria d include: 11 - 2 7
(1) The degree of direct Government supervision The greater the degree of freedom that the contractor ~) has to act independently, the stronger the case that the services are nonpersonal. (2) The Furnishing of Equipment, Material and Office Space The mere the contractor must furnish beyond his direct labor, the more likely it is that his services will be considered nonpersonal. (3) The Use of Specialized Knowledge and Equipment The more specialized or unique the services or equipment being furnished, the less chance there is that they are already available to the Government. Therefore, the services being rendered are more likely to be considered nonpersonal. (4) Compensation or payment Payment of the sole basis of time spent is usually considered indicative that the services are personal. Payment for an end product where the contractor is allowed to govern his own time is usually indicative that the services are nonpersonal.
~I In the final analysis, the cognizant Contracting Officer will determine whether a specific requirement involves personal or nonpersonal services. In making this determination, the Contracting Officer shall consult counsel, as necessary, in applying the criteria to a particular procurement.
To facilitate the determination of personal versus nonpersonal services, the form NRC 400A will be included with the RFPA (NRC 400 Form) for all service-related requirements.
- c. Policies on Consulting Services Consulting services means those services of a purely advisory nature relating to the Governmental functions of 4 agency administration and management and agency program management. Certain types of services do not lend themselves to consultant contracts. For example, contracts )
for commercial products and services covered by OMB i Circular A-76, automatic data processing services and i services which involve the performance of operating functions should not be treated as consulting services. l 11-28
With certain notable exceptions discussed below, the acquisition of nonpersonal consultant services is subject to the same policies and procedures discussed throughout the ( NRC Procurement Handbook. In this connection the acquisition of nonpctsonal consultant services are subject to the following limitations: Individual consultant services should t,e acquired by contract only when the services required cannot be obtained by excepted appointment in accordance with personnel regulations. This is advantageous to NRC in order to minimize the potential for inequities in compensating individuals; No contract shall be entered into for longer than one year at a time by written notification from the Contracting Officer. Since renewal of a contract creates in effect a ney! contract, renewal is improper unless there is compliance with all requirements pertaining to the award of contracts in general; The amount or rate of payment to individual consultants should be determined on a case-by-case basis taking into account the relative importance of the duties to be performed, comparable pay for positions l under the Classification Act (i.e., Federal Pay System), ; rates paid by priva% employers and rates paid other ( consultants for similar work. Compensation to firms or organizations for consultant services should be determined exclusively through the negotiation process; The Contracting Officer shall assure that offerors and contractors who perform nonpersonal services comply with the rules governing NRC Contractor Organizational Conflicts of Interest (41 CFR Part 20; Fe,d. Register 19194; and When required supplemental assessments or change orders substantially change the basis upon which the t Determination and Findings was made (such as a substantial revision to the scooe of work, time frame for the project, the extent to which additional funds are applied, etc.) a new RFPA shall be requested in the same way as the authorization or request to procure the 1 serv.ca by contract was received in the first instance. 8
- 6. Security /Classifitd C.intracts Security Regi.ements It may be necessary for personnel security and for facility security requiraments to be impcsed on prospective contractors I
i T1-29 _ _ _ . . _ . - _ - -- - -..~ - - . _ - . , . _
desiring to compete for award of an NRC contract. When access to, or the development of, classified information is at issue, the following procedures shall be followed. All requests for contract ) i access authorizations and/or security facilities approvals shall emanate from the Division of Contracts to the Division c Security. In addition, the Division of Contracts shall be the ! focal point for all discust,lons of security matters involving the requiring officers, Division of Contracts, and Division of Security, and shall coordinate and follow-up on all actions requests. The requiring office will assume that during the development of a Request for Procurement Action (RFPA), prior to its submis-slon to the Division of Contracts (DC), the Project Manager and the contract specialist will meet with the requiring office's designated Authorized Classifier in order to establish: (1) Whether classified information or facility clearances will be required by the contractor. (2) What level and type of classified information may be required by the contractor. (3) Whether the reports, including interim and final documents, will be classified. Additionalty, what restrictions, if any need to be placed on the proposed dissemination of information developed under contract. (4) Whether the proposed contract should contain special ) classification or security clauses; and (5) Whether a contract awarded initially on a non-classified basis may produce classiflad results or other. vise become classified during the course of the contract. The requiring office's Authorized Classifier will assure that the necessary "Classification / Security Specifications" are cited on NRC Form 187 to adequately safeguard classified information. (1) The Authorized Classifier may request guidance and ) assistance from the Information Security Branch, Division of Security (SEC). A member of SEC will be an advisor to the Source Evaluation Panel (SEP) or a technical evaluation group when classified work is ) contemplated, or when requested by DC. i The requiring office will forward the original NRC Form 187 l "Security /Classific:flon Requirements", following the instruc-tions, and provide a detailed statement of work to DC and SEC as part of its RFPA.
. )
11 - 3 0 l
NRC Form 187 is signed by the Director, SEC or his designee and forwarded to DC for inclusion in the solicitation as appropriate. t, Sign-off by SEC indicates: (1) It has been determined that classified information will become involved in the course of a contract, or (2) That clearance of specific contractors is necessary to assure timely performance is initiated, so that major program objectives of NRC can be met, or (3) A facility and/or personnel access authorizations for specified contractor (s) is needed in order to evaluate bid or other procurement related material. The requiring office v!!11 normally receive executed pe sonnel security forms packets from the contractor's security manager. After indicating approval in item 12 of NRC Form 237, Request for Access Authorization, the forms packet will be forwarded to the Personnel Security Branch, SEC. SEC will notify DC by memorandum that approval of the contractor and contract's facilities, if appropriate, has been obtained. A copy of this memorandum will be provided to the requiring office. The DC will provide SEC with a copy of the final contract and ( all modifications involving classified information of security matters. in addition, when all work and services have been performed, SEC will be advised by DC so that it may terminate fccility and pcesonnel access authorizations as appropriate. Since some NRC contractors may be participating in the competitive process for anticipated awards, when specifically requested by DC (e.g., another classified contract can be anticipated) SEC will take appropriate steps to keep facility and i personnel access authorizations active consistent with the l I provisions of NRC Manual Chapter 2101. However, as a normal procedure, facility and personnel access authorizations will be terminated upon completion of a contract. The requiring office will assure that an Authorized Classifier provides a classification review to provide proper classification and marking of all matter produced under a classified interest. The Information Security Branch, SEC will provide guidance and . assistance, as necessary. SEC will obtain the required "Certificate on Non-Possession" l when facility and personnel access authorizations are terminated. I 11 - 3 1 l
Clearance of subcontractors will require completion of all the above noted procedures including initiation of a new NRC Form 187, a statement of work, and copies of the proposed .j subcontracts. Procedures described above for direct NRC contracts are to be handled in accordance with NRC Manual Chapter 2101. All contractually related Security questions must be coordinated with both SEC and DC.
- 7. Questionnaires-Forms-Federal Reports Act Under Section 5 of the Federal Reports Act, no Federal Agency shall conduct or sponsor the collection of information upon identical items from ten or more public respondents without the prior approval and clearance of the Office of Management and Budget. Procedures for obtaining the clearance are contained in OMB Circular, A-40.
- 8. Printing The inclusion of printing within contracts is prohibited unless it is authorized by the Joint Committee on Printing of the U.S. Congress.
Procedures to be followed are contained in the "Government Printing and Binding Regulations." (Latest revision.)
- 9. Cor. tractor Organizational Conflicts of Interest The mission of the NRC demands that the contractors who do work for the Commission be able to provide unbiased conclusions and not gain any undue future advantages as a result of their work under contracts. Protecting against organizational conflicts of interest is .
therefore an important facet of the contracting process. l The rules and policies governing contractor organizational conflict of Interest are contained in 41 CFR 20-1.54. Under those rules such conflicts are defined as existing when:
"a relationship exists whereby a contractor or prospective contractor has present or planned interest related to the work to be performed under an NRC contract which: (1) May diminish its capacity to give impartial, technically sound, objective assistance and ;
advice or may otherwise result in a biased work product, or (2) may result in its being given an unfair competitive advantage." 11 - 3 2 l
It is not always clear whether an organizational conflict of interest actually exists in a given situation. As a consequence, 20-1.5401 ( states that:
"It is the policy of the U.S. Nuclear Regulatory Commission (NRC) to avoid, eliminate or neutralize contractor organizational conflicts of interest . . .
Determinations cannot be made automatically or routinely; the application of sound judgment on virtually a case-by-case basis is necessary if the policy is to be applied so as to satisfy the overall public interest." As an aid to that judgment, the regulations provide a number of examples to show how the policy should be implemented. Guidance is provided to assist in making the prope- determinations. The policy is implemented by means of solicitation representation. Every NRC solicitation must include a statement, to be completed by the offeror, that award will or will not involve some conflict. If a conflict is indicated, the Contracting Officer may take any of the following actions as indicated in the specific circumstances (a) disqualify the offeror (b) include special provisions which eliminate or neutralize the conflict t (c) use a waiver to allow award despite the existence of the conflict The Office of the Executive Legal Director provides advice and concurrence in decisions under the policy concerning waivers to the organizational conflict of interest regulations. l 1 11 - 3 3 1
EXHIBIT 11-1 ( CHECKLIST FOR SIX-SECTION STATEMENT OF WORK e Review Section 1 (Scope) to ensure that: The statement of scope is accurate. The breakdown of objtetives is accurate and logical. o Review Section 2 (References) to ensure that referenecs are necessary, available, and timely. e Review Section 3 (Requirements) to determine that: Referenced documents are necessary and applicable. Requirements are predominantly design or performance and that the same requirement is not covered both ways. No requirement is unrealistic, indefinite, or restrictive. The requirements cover the needs of the agency. Each requirement is capable of being inspected or otherwise verified. e Review Section 4 (Progress / Compliance) to determine that: ( - The inspections, reports, and tests prescribed will provide a true gauge of quality. The reporting, inspection, and test procedures are clearly defined. The reports, inspections, and tests parallel the requirements. e Review Section 5 (Transmittal, Delivery, Accessibility) to ensure that: I The modes of transmittal, delivery, or accessibility are realistic. l Guidance for selection of requirements is provided. l e Review Section 6 (Notes) to determine that The application data and notes make the specification as clear as possible to the user. All necessary ordaring data are provided. NOTE: The six-section format is merely a st'ggested frame on which to order your expectations logically. If you want to save money, avoid the use of boilerplate references that overspecify expensive formats and other requirements considered routine in Government contracts, but not really - essential. This would reflect conformance to recent OMB polley regarding specification preparation. f 11-35
EXHIBIT H-2 ( CHECKLIST FOR DETERMINING WORK STATEMENT ADEQUACY e Does the work statement contain only essentials (actual minimum requirements)? Have "nice to have"items been eliminated? e Has extraneous material been elimincted? (Ask the following questions to judge whether material should be included: Does it tell what the contractor is responsible for? Is it necessary in order for the Government to obtain required results?) e is background or other introductory information readily distinguishable from the contract objectives and requirements? e Are directions readily distinguishable from generalinformation? e is the work statement sufficiently detailed to permit the prospective contractor to estimate costs, to tabulate the labor and other resources needed to accomplish each task or phase of the work? e Are specific duties and end results set forth in such a way that the contractor will know exactly what is required; that the Government representative who monitors performance and signs acceptance { reports can tell whether the contractor has complied? e Does the statement explain the interrelationship between tasks, and how tasks are related to desired results and deliverables? e Does the statoment identify constraints and limitations? e Does the statement contain standards which will make it possible for all parties to measure performance? e Is there a time-phased requirement for each activity to be completed or item to be delivered? If elapsed time is used, is it clear whether the time will be counted as calendar days or as work days? e Have all requirements for data been speelfled? e Are proper quantitles shown? e Do any standard specifications or paragraphs apply in whole or in part? If so, are they properly cited and referenced? t TI-37
EXHIBIT 11-2 (Continued)
)
e When it is necessary to reference other documents, is the reference document properly described and properly cited? Has the document been carefully screened? Is all of it pertinent or should only portions be referenced? Is the material cross-referenced to the applicable part of the work statement? e Are reporting requirements (technical and progress / compliance) clear? Have timing, content, and level of detail been specified? e If a competitively negotiated procurement is planned, are the task descriptions an adequate frame of reference for the offerors' technical proposals? Is the work statement sufficiently detailed to permit equal understanding by all offerors? 1 4 l i l l Il-38
EXHIBIT 11-3 ( CHECKLIST FOR ASSESSING INDIVIDUAL WORK STATEMENT ELEMENTS BACKGROUND INFORM ATION e Does it explain the rationale for the project? e Does it mistakenly cite data and reports which are not available to the prospective offerors? e Will it help an offeror prepare e, sound technical proposal? e Does it summarize information which is essential for understanding the work? e Are the facts accurate? i e Is all technical information understandable to potential readers from different disciplines? OBJECTIVES ! ( I e Will a reader understand what the agency needs? e Does the statement emphasize the most important aspects of what the agency needs-rather than minor details? e Willit help prospective offerors w^'te technical proposals which get to the heart of what is needed? e Are stated objectives consistent with the tasks or activities specified, and with the end result to be obtained? DELIVERABLES e Does the work statement define all deliverables-l.e., all reports, test results, supporting data, computer tapes, audiovisuals, models and prototypes, drhwings, and other items to be delivered? e Does the statement indicate for each deliverables (1) the quantity (number of copies, etc.) desired? (2) the form in which each deliverable is to be supplied? (3) the delivery date? (4) the speelfic place for delivery? e Is the intended use or context of each deliverable clear? i 11 - 3 9 i
EXHIBIT II-4 WORDS WITH MULTIPLE MEANINGS, VAGUE WORDS ( (SHOULD BE USED ONLY IF THEIR MEANING IS DEFINED IN CONTEXT) e adequate e investigate e analyze e like e augment a parameters e average o pure e characteristic e reasonably e check e review e compatible e research e concept e satisfactory e consider e similar e current e some ( e equal e standard e excessive e strong e functional e substantial e guide e sufficient e guidance e supply e high quality e test e implement e thresholds e , industry practice e type 1 o workmanlike i 11-41
EXHIBIT IT-5 l ,' PHRASES WITH MULTIPLE MEANINGS ! t l l e To the satisfaction of the contracting officer e As determined by the contracting officer e In accordance with instructions of the contracting officer e As directed by the contracting officer o in the opinion of the contracting officer e in the judgment of the contracting officer e Unless otherwise directed by the contracting officer l e To furnish if requested by the contracting officer i 1 e All reasonable requests of the contracting officer shall be complied with e Photographs shall be taken when and where directed by the contracting officer e In strict accordance with [ e The finished product shall be practically free from dirt, etc. e it is assumed that e High rate data e Reasonable period of time l . . . but not limited to e In accordance with best modern standard practice e in accordance with the best engineering practice e Workmanship shall be of the highest quality l e Workmanship shall be of the highest grade e Accurate v orkmanship Securely mounted e Installed in a neat and workmanlike manner
; e Skillfully fitted II-4 3 l
l ._. __ . _ . _ _ . _ . _ _ _ _ , _ . _ _ _ _ _ _ . _ _ _ ,_ . . _ _ . _ _ . . _ _ . _ _ _ . _ . . _ _ . . _
EXHIBIT II-5 (Continued) e Properly connected ) e Properly assembled e Good working order e Good materials e in accordance with applicable published specifications e Products of a recognized reputable manufacturer e Tests will be made unless waived e Materials shall be of the highest grade, free from defects or imperfections e Kinks and bends may be cause for rejection e Carefully performed e Neatly finished e Metal parts shall be cleaned before painting e Sultably housed e Smooth surfaces e Pleasing lines e Of an approved type Of standard type e e Any phrase referring to "The Government inspector" I
- e As necessary e Where feasible e Or equal e Free of impurities
[ 4 t II-44
EXHIBIT II-6 VERBS OFTEN USED IN SOW WRITING ("WORK WORDS") ( The following list contains vert,3 which are often used in work statement writing and other techn! cal writing. As each word has a slightly different meaning from the others, and most words may themselves be used with different shades of meaning, the list illustrates the need to be careful to choose the most accurate term. . Term Definition
. t e analyze solve by analysis e annotate provide with comments e ascertain find out with certainty e attend be present at e audit officially examine e build make by putting together o calculate find out by computation
(- e compare find out likenesses or differences , e consider think about, decide e construct put together, build e contribute give along with others e control direct, regulate e create cause to be, make e define make clear, set limits e design perform an original act e determine resolve, settle, decide e develop bring into being or activity e differentiate make a distinction between e erect put together, set upright i II-4 5 l
l i EXHIBIT II-6 (Continued) i i
~
Term Du .s. e establish set ua, ' wo disp te o estimate approx! 9.., j e evaluate find or fix tiv -' e evolve develop gradually,- e examine look at closely, test qualny of . e explore examine for discovery 1
- e extract take out, dcduce, select l
e fabricate build, manufacture, invent
- e form give shape to, establish e formulate put together and express e generate produce, cause to be e inquire ask, make a search of s
)
e inspect examine carefully or officially e Install place, put into position e Institute set up, establish, begin e integrate combine parts to make a whole ; e interpret explain the meaning of e Investigate search into, examine closely e judge decide, form an estimate of ; I l e make cause to come into being j e manufacture fabricate from raw materials e nottee comment on, review 1 e observe inspect, watch ' e organize Integrate, arrange in a coherent unit l
} l 1
Il-46 i 1 _ - _ _ _ - _ ~ _ . ._- _
EXHIBIT H-6 (Continued) Term Definition e originate initiate, give rise to e perform do, carry out, accomplish e probe investigate thoroughly e produce give birth or rise to SOME STANDARD SOW PHRASES Certain words and phrases which are frequently used in a specification should adhere to the following rules o Cite reference documents and requirements as shown below:
- Conforming to
- As specified in In accordance with e "Unless otherwise specified" should be used to indicate an t alternative course of action. The phrase always comes at the beginning of the sentence and, if possible, at the beginning of the paragraph. This phrase is used only when its meaning can be clarified by providing a reference to another specification.
\
e "As specified herein" is used to reference other documents contained in the same specification. This phrase is used when the reference is rather obvious or not difficult to locate. e The phrase "to determine compliance with" or "to determine conformance to" should be used instead of "to determine compilance to.7 l f ) ! H47 1 1
CHAPTER ill- ACQUISITION AND ASSISTANCE INSTRUMENTS ( Page A. Acquisition vs. Assistance m-1
- 1. Differences m-1
- 2. Relationships and Definitions m-1 B. Elements of a Contract m-2
- 1. Offer and Acceptance m-2
- 2. Consideration and Mutuality of Obligation III-2
- 3. Competent Parties m-2
- 4. Lawful Purpose III-2
- 5. DOE m-2 C. Similarities and Differences Between Commercial m-3 and Government Contracts
- 1. Similarities to Private Contracting 111- 3
- 2. Differences between Private and Government Contracts III-3 D. Interagency Agreements m-4
- 1. General m-4 E. Grants and Cooperative Agreements 111- 6
- 1. Basic Policy Ill-6
- 2. Use of Contracts 111- 6
- 3. Use of Assistance Instruments Ill-6
III. ACQUISITION AND ASSISTANCE INSTRUMENTS i A. Acquisition vs. Assistance
- 1. Differences There are basic differences between acquisition and assistance.
Acquisition is the process of acquiring property or services for the direct benefit of the Government by purchase, lease, or barter. Assistance is the process of transferring money, property, services, or anything of value to a reciplent in order to accomplish a public purpose of support or stimulation authorized by Federal statute.
- 2. Relationships and Definitions (a) Acquisition and assistance instruments create different relationships between the Government and reciple t.ts.
Because of these differences in Government /recip!ent relationships, the decision to use a particular instrument must be made deliberately and in cecordance with the rules for using that instrument. Acquisition / assistance instruments are defined as follows: (1) Cont ract. A mutually binding legal relationship obligating the seller to furnish supplies or services and the buyer to pay for them. (2) Interagency Agreement. A legal agreement between Federal agencies where goods or services are provided. (3) Cooperative Agreement. A legal instrument which j defines the relationship between the Government and a ' reciplent for the transfer of money, property, services, or anything of value to the recipient for the accomplishment of a public purpose of support or stimulation authorized by law. A cooperative agreement presumes a significant amount of involvement by the Agency in the performance by the reciplent. (4) Grant. A legal instrument which defines the relationship between the Government and a recipient for the transfer of money, property, services or anything of value to the recipient for the accomplishment of a public purpose of support or stimulation authorized by law. A grant presumes a limited amount of involvement by the Agency in the performance by the recipient. l Ill-1
B. Elements of a Contract
- 1. Offer and Acceptance The rules governing offer and acceptance in private contract law apply equally to Government contracts. The acceptance must be unequivocal, positive and unambiguous, and must comply exactly with the terms of the offer. Accordingly, a purported acceptance in which material terms are at variance with those contained in the offer is not a valid acceptance. Such an altered acceptance constitutes a rejection, or at best, a counter offer which must then itself be accepted before becoming a contract.
An acceptance by the Government may be valid and binding even in the absence of written signature to the acceptance form by the Contracting Officer; other evidence, such as informal conversations between the contractor's representative and the Contracting Officer and partial performance by the contractor may be relled upon to show such acceptance.
- 2. Consideration and Mutuality of Obligation The requirement of consideration in Government contracting is the same as in private contracting. Both parties must receive a benefit from the other under the terms of the instrument. For example, an egreement to raise the price under a fixed price contract would not be valid unless the contractor were required to provide something in return.
- 3. Competent Parties Contracts are binding only if both parties are legally competent to ,
enter into them. For example, a contract signed by a minor can be volded since a minor does not have the legal capacity to incur such obligations.
- 4. Lawful Purpose l Since a contract is an agreement which is enforceable by law, it is only reasonable that an agreement contrary to the law would not ,
be a valid contract. If, for example, the NRC were to write a ' l contract for something not reasonably related te its mission, such I an agreement would be outside the lawful bounds of its authority j and the contract would be vold. , 5. DOE The elements discussed above apply in all cases to projects which are performed by DOE Labs for the NRC. i Ill-2 4
C. Similarities and Differences Between Commercial and Government Contracts
- 1. Similarities to Private Contracting Subject to numerous exceptions which will be discussed in succeeding paragraphs, legal principles governing contracts to which the Government is a party are substantially the same as those which apply to contracts between private persons. Courts hold that, as a general rule, the Government lays aside its sovereignty when it enters into a contract and becomes bound by the same laws and principles applicable to private citizens. Laws measuring individual rights and responsibilities also measure those cf the state. All presumptions of law and fact, as well as obligations, which apply to citizens are equally applicable to the Government.
The rules of interpreta:lon and construction applicable to contracts between the individuals are generally applied to Government contracts. With certain exceptions, the Government may claim no other or more favorable rules than a private individual. Hence, as a general rule, any doubt as to the interpretation of a Government contract must be resolved against the Government for the reason that its contracts are prepared by its agents, leaving to the contractor no choice as to form or phraseology. This rule is based on the familiar principle that a party who takes an agreement prepared by another, and thereupon incurs obligations or parts with I his property, should have a construction given to the instrument favorable to him, it has also been held that the Government is bound to examine materials and reject the same, if defective, within a reasonable , time after their receipt or be held liable for them. These rules apply in private contracts - they are also used in Government l contracting. l l
- 2. Difference 13etween Private and Government Contracts I (a) Dual Personality Despite the substantial similarltles between Government and private contracts just noted, ordinary concepts of contracts cannot and do not always apply to Government contracts. The courts have in many instances given the Government special treatment as a contracting party because of the dual personality of the Government as a contractor and as a sovereign. The Government, for instance, is not liable for an obstruction to the performance of its contracts resulting from its public and general sovereign acts, whether executive or legislative.
t Ili-3
It should be noted, however, that in order to be absolved from liability, the interference w'ith the performance of a contract by means of a sovereign act must be indirect. Direct I interference will result in liability. (b) Sovereign Immunity From Suit As an incident of its sovereignty the courts have determined that the Government is immune from suit, except to the extent that it has voluntarily consented to be sued. This immunity extends not only to suits in person naming the Government as a defendant but also actions in rem against property owned by the Government. The Government has, however, given blanket consent to be sued for all disputes relating to its contracts in the Contract Disputes Act of 1978. (c) Applicable Law In determining questions arising under Government contracts, courts are not bound by the law of any particular state as in private contract cases. Insofar as Federal common law can be said to have developed in the field of contracts, it will be applied in cases involving Government contracts where the question to be determined is governed by the Federal , Constitution, a Federal statute, or the Federal Acquisition Regulation. (d) DOE NRC and DOE have a relationship in which the courts and most laws relating to contracts do not govern. In order to establish the rules for the relationship a Memorandum of Understanding was promulgated February 28, 1978. This represents a contractual arrangement between the two agencies and is the primary source document controlling the use of DOE Labs by NRC. It applies, in general, the contracting principles used between the Government and commercial concerns. D. Interagency Agreements
- 1. General '
This section deals with those agreements issued for supplies or services placed with another Government agency pursuant to the s authority of the Economy Act of June 30, 1932, as amended (31 U.S.C.15 3 5). ) e III-4
It does not deal with interagency agreements for work performed by DOE, which is covered later in Chapter VII of this text. The { purpose of the Economy Act is to permit the utilization of the materials, supplies, facilities, and personnel belonging to one department by another department or independent establishment which is not equipped to furnish the materials, work or services for itself, to provide a uniform procedure for all departments, and a free interchange of work. It frequently happens that one department may need certain services which it cannot , advantageously perform for itself. Where such services can be furnished by another department at less cost or more conveniently, the department needing such services should have the privilege of csiling upon any department of the Government that is equipped to provide such services. The Economy Act was amended to grant authority to requisition services to be obtained by contract under certain conditions: (1) Where one department aleeady has a contractor working at the desired location and the other department deems it advantageous to have the same contractor perform work for it at this place under the same contracts (2) Where two departments are to perform similar work at the same location, each has funds available and it is desired that the work be performed under a single contracts (3) Where one department desires another, due to its organization or special knowledge to perform certain work for it. The amendment does not provide for work to be performed by a contractors (1) Under a conteact with another agency, where the I funds sufficient to cover the entire contract price are transferred by NRC to the contracting agency; o'r (2) under a contract with NRC where the work is needed by the other agency but not by NRC, and where funds sufficient to cover the entire contract price are transferred to NRC by the other agency. A Federal agency is nor'mally free to establish whatever administrative scheme it believes, from a policy standpoint, is desirable in obtaining services from another Federal agency, subject to availability of funds and the authority to incur obligations. It may centralize the administration of the arrangements through a central office designated for that purpose, such as a procurement divi.11on, or have such arrangements carried out in a decentralized manner through offices responsible for major agency programs. While certain principles of law require a contracting officer, as defined in the Federal Acquisition i i Regulation, to play a critical role in the formation and , administration of contracts with private parties, no such legal l requirement dictates the manner in which transactions must take place between Federal agencies. The Senate / House of Representatives Conference Committee , Report concerning the 1974 Energy Reorganization Act noted that i NRC was to obtain support, as required, from other Government l organizstions on a reimbursable basis. Since that time, NRC ha?
- t 111 - 5
) l l
I l placed the majority of its research and technical assistance l requirements with other Government organizations via interagency j agreements. ) NRC has elected to assign responsibility for the establishment and administration of interagency agreements to Directors of Offices and Regional Administrators. Detailed procedures governing their actions for interagency agreements are set forth in NRC Manual Chapter 1401 (in revision). E. Grants and Cooperative Agreements
- 1. Basic Policy Under the Federal Grant and Cooperative Agreement Act of 1977, guidelines were established in the law to distinguish between situations in which an' agency should contract for goods or servlees and when it should use its money for assistance to outside organizations.
I
- 2. Use of Contracts The Act specifies the use of procurement contracts whenever the principal purpose of the action is the acquisition of property or services for the direct use or benefit of the Federal Government.
This applies whether the recipient of the contract is a commercial
- firm, a non-profit organization, or a state or local government instrumentality. The act also provides that an executive agency may use a contract when it is determined that its use would be appropriate in the given circumstances - this is sometimes the case when a project that would normally have to be supported by a grant is proposed by a commercial firm.
- 3. Use of Assistance Instruments The Act provides for two types of Assistance Instruments: Grants and Cooperative Agreements. The common feature of these two Instruments is that they are used for purposes of support or stimulation of activities authorized by statute which are not for the direct use or benefit of the Government. The major diffeTence between grants and cooperative agreements is based on the degree of Government involvement during performance of the activity to be supported.
Where there will be no substantial involvement, the proper instrument is a grant. Where there will be substantialinvolvement, the proper instrument is the cooperative agreement. NRC is relatively new to the assistance field. Guidance on the use of these instruments is contained in NRC Bulletin 5106-2, "Financial Assistance Programs: Polley and Procedures." i Ill-6
CH APTER IV - THE LEGAL BASIS FOR CONTRACTING Pare A. Introduction IV-1 B. Sources of Government Contract Law IV-1
- 1. The Constitution -Inherent Power to Contract IV-1
- 2. Statutes IV-1
- 3. Executive Orders IV-3
- 4. Administrative Rules and Regulations IV-3
- 5. The Courts IV-4 C. The Concept of Authority IV-5
- 1. Agency IV-5
- 2. Authority of Representatives of the Government IV-6
- 3. Ratification of Contracts IV-8
- 4. Appointment of Representatives IV-8 D. Other Acts and Laws Affecting Procurement IV-9 ,
- 1. The Freedom of Information Act TV-9
- 2. The Privacy Act IV-10 >
- 3. Service Contract Act of 1965 IV-10
- 4. The Budget and Accounting Act of 1921, As Amended IV-10 !
- 5. The Small Business Act of 1953, As Amended IV-10 ,
- 6. Defense Production Act of 1950, As Amended IV-Il t
- 7. Contract Disputes Act of 1978 IV-Il i
- 8. Public Contracts Act (Walsh-Healey Act) IV-Il
- 9. Davis-Bacon Act, as amended IV-12 i
- 10. Work Hours Act of 1962 IV-12 i
- 11. Assignment of Claims Act IV-12
- 12. Tucker Act, As Amended IV-12 1
- 13. Legislation Requiring Appropriations IV-13 i
- 14. Public Law 85-804 IV-13 15.The Wunderlich Act IV-13 16.The Miller Act, As Amended IV-13
- 17. Copeland Act IV-14 I8. Convict Labor IV-14
- 19. Buy American Act, As Amended IV-14
- 20. Conflict-of-Interest Statutes IV-14
- 21. Officials Het to Benefit IV-15
- 22. Blind Made Supplies IV-15
- 23. Prison Made Supplies TV-15 l
- 24. Federal Reports Act of 194 2 IV-15
, 4 l e i 4 i l
1 l IV. THE LEGAL BASIS FOR CONTRACTING I (' A. Introduction The process of contracting with sources outside the Government for goods and services is governed by a number of rules, regulations and policies. Much of this guidance is merely the formal statement of sound business practice which has been reduced to rules to be applied by contracting officers and others in the contracting process. A form of contracting also occurs within the Federal Government between its agencies. Interagency acquisition is a procedure by which an agency needing supplies or services, the requesting agency, obtains them from another agency, the servicing agency. In general, the same principles set forth in the rules, regulations and policles governing commercial contracting apply to acquisitions between agencies. The major difference is in the process which is applied. This chapter provides background on these rules for both types of contracting end a general description of the environment in which contracting takes place. The details of the process as they affect technical personnel in contract are covered in later chapters. B. Sources of Government Contract Law
- 1. The Constitution -Inherent Power to Contract The Constitution established the basic legal relationships which characterize our form of Government. The Constitution does not specifically talk of the rights of the Government to enter into contracts. It's too general for that. But, in 1831 the Supreme Court held "It is, in our opinion, an incident to the general right of sovereignty; and the United States, being a body politic, may within the sphere of the constitutional powers confided to it, and through the instrumentality of the proper department to which those powers are confided, enter into contracts not prohibited by law, and approorlate to the just exercise of those powers"(United States v. Tingev, 30 U.S.
(5 Pet. I15 (1831).) Note, however, that the sovereign power of the United States to contract is limited by any constitutional restrletions on its sovereignty. The abstract power of the United States to contract as a , sovereign must be carefully distinguished from the authority oT contracting agencies of the Government to contract which may be, and in fact is, restricted by statute, i 2. Statutes The second source of Government contract law is statute. There are many laws which directly affect the contracting process. Among the many of importance to NRC are: ! IV-1 1
.,n-- - . , , - - . - - ,-- - --
(a) The Federal Property and Administrative Services Act of 1949 This Act sets forth the basic contracting policies of the ) Government which apply to civilian agencies (DOD has a similar act called the Armed Services Procurement Act). The Act makes Formal Advertising the preferred method of contracting, established the General Services Administration, limits the types of contracts that can be used, and mandates competitive procurement wherever possible. It authorizes the issuance of the rules which govern Federal procurement. The current set of regulations are referred to as the FAR (Federal Acquisition Regulation), which became effective April 1, 1984. The previous regulation was titled the FPR (Federal Procurement Regulation). (b) The Office of Federal Procurement Policy Act This act established an Office of Federal Procurement Polley which is located within the Office of Management and Budget. OPPP has the authority to issue regulations which are binding on all Executive Agencies and is otherwise responsible for improvement of Federal contracting practices. The regulations issued by OFPP are usually implemented through - the FAR. (c) The Small Business Act This act establishes policies of the Government toward small i businesses, including set-esides, use of the Commerce Business Daily, and the 8(a) progra m, which permits preference procurements to be made to Disadvantaged firms. (d) The Atomic Energy Act and the Energy Reorganization Act These statutes directly govern NRC operations and include specific rules to be followed. The existence of the DOE Labs and NRC's authorization to use them are provided by these laws. (e) The Economy Act of 1932
- This act authorizes Federal agencies to use goods and services produced by other Federal agencies, it is the basle authority for interagency agreements, which are the contracting i instruments utilized when one agency contracts with another.
(f) The Federal Grant and Cooperative Agreement Act of 1977 This act governs the selection of funding instruments between i contracts and assistance and creates the two types of 1 assistance relationships, grants and cooperative agreements. 1 l i IV-2 . l I
- 1 i
(g) The Competition in Contracting Act of 1984 (CICA) , ( This act requires the use of full and open competition as the primary method of procurement, except under specific, well-defined circumstances cited in the Act. The Act prescribes certain minimum requirements to insure the integrity of the competitive process, requires all procurements i . be conducted in accordance with the Act and in accordance I with regulations issued therefrom, and places sealed bidding (formal advertising) and negotiated procurements on an equal footing as competitive procurements. (h) Other laws Appropriation acts often contain specific limitations on contracting programs or special administrative provisions. - Further, there are a number of laws dealing with socioeconomic concerns which impact on contracting such as the Service Contract Act and the Walsh-Healey Public Contracts Act.
- 3. Executive Orders l The third source of the Government's authority to enter into Contracts are Executive Orders. These administrative directives i issued by the President frequently implement authority provided by Congress. From his authority as Chief Executive Officer of the
(
! U.S. as well as Commander-in-Chief of the Armed Forces, courts have ruled that Executive Orders issued by the President are a source of authority to enter into contracts. These orders will be referred to by numbers and dates, e.g., Executive Order No. 9859, May 21,1947.
- 4. Administrative Rules and Regulations ,
The fourth source are the Administrative Rules and Regulations issued by bodies such .ns the Board of Contract Appeals, the General Accounting Office, and the Office of the Attorney General, who represents the Department of Justice. The Coutts have ruled that these Administrative Rules and Regulations have i the full force and effect of law. For example, the Federal Acquisition Regulations apply to all Federal agencies to the extent j speelfled in the Federal Property and Admlhistrative Services Act of 1949, as amended, it is important to note that the provisions of ) the FAR, being issued under statutory authority, have the force and effect of law. The effect of the Federal "Procurement Act" was to vest the responsibility for procurement in the heads of the respective departments and agencies of the executive branch. Within the Act itself, the heads of the agencies are given the authority to delegate any power under the Act that the head of the well agency has defined authorityThe exceptions. to exercise, subject to certain Federal Acquisition fairly (FAR) Regulation ( l IV-3 i
- - - - ~ - y,y ___-,,-_m_ , - - . ,. , _ - - , , , -, -,,. ---.-
unifies the implementation of the exercise of the authority by subordinate officers and agents and specifies the duties, responsibilities and express authority of officers contracting for ; the benefit of the Government. Thus, it can be readily seen, that the Constitution, legislative acts and executive department regulations provide a framework within which the entire concept of authority must be defined. Although these regulations are equally bir.dhg on both contracting officers and technical personnel, no one Mtjects Project Managers to be intimately familiar with their po/isions. The Contracting Officer, on the othcr hand, must be hvuoughly familiar with the regulations and be able to ensure that hir. or her actions - and those of technical personnel - comply with the terms of the law and the regulations. This is the primary reason why the Contracting Officer must review, critique, and sometimes reject, the work of technical personne' in contracting.
- 5. The Courts The fif th source of Government contract law is the courts. The various Federal courts, particularly the United States Claims Court and the Supreme Court, make dectslons that impact on the contract process. Often these decisions interpret the provisions of statutes. In other cases, they are based on the "Common Law."
Common Law is defined as the "unwritten law" based upon common practice and custom in a given trade. In old England, it was not practical to express these codes in writing there was no written } general statement of the law of the land such as we have in our Constitution and in the statutes passed by Congress. Legal decisions were handed down by royal judges and other representatives of the king. The growing body of these decisions served precedent in later cases and was known as common law. Common law may be used to decide contract disputes. For example, a few years ago the United States Government contracted with an Italian firm for work to be done in Italy. The contract was silent about which currency would be used for payment. When he gave his bill the contractor demanded dollars, not lira. When the contracting officer refused, the contractor sued. The courts could not find an answer for this case in the Constitution, nor in Statutes of Congress, Executive Orders, Administrative Rules and Regulations, nor decisions of other courts. Therefore the court had to apply common law. The common law rule of payment was plains the law of situs, or
- physical location, will control. Since the work was done in Italy, payment should be in lira.
TV-4
. - . _ - - - . _ _ _ ~ . --.___ _ - . _ .. - - - _ - . . - . . .__ = - _ _ .
C. The Concept of Authority
- 1. Agency Agency may be defined as a relationship based on an agreement j that authorizes one person to ac' 'or another. We law of agency assumes that there are three parties involved: the principal, the ;
- agent and a third party. We prinelpal authorized the agent to act i
- as an intermediary and to deal directly with the third party as if l
! the agent himself were the principal. De acts of the agent may l bind the prineipt of third parties and may also give the principal ;
y rights against the third parties. ! (a) Limited Authority of Govemment Agents ! In the field of agency, private individuals are liable as ! 1 principals to the extent of the power the principals apparently :
- gave to their agents. The Govemment, however, is generally l
- liable only to the extent of the authority it has actually given i i to its representatives. The doctrine of "apparent" authority l does not apply to the Govemment. For example, a ;
j Govemment Contracting Officer cannot enter into a contract : if hc does not have the expressed authority to do so. There : must be a statute or a regulation that authorizes him to make ;
- such a contract. If a Contracting Officer enters into a i contract without expressed authority or if his action is '
prohibited by law or regulation, then the contract becomes !
- , void and does not bind the Govemment. The reason for this l ruling has been stated in the following languages
~
I i j Although a private agent, acting in violation af specifle i j instructions, yet within the scope of his general authority, may ! ! bind his principal, the rule as to the effect of the like act of a f ) public agent is otherwise, for the reason that it is better that , i an ind;vidual should oeessionally suffer from the mistakes of L public officers or agents, than to adopt a rule whleh, through l [ improper combinations or collusions, might be turned to the t ] detriment and injury of the public. ; . t l The courts have consistently held that persons dealing with a l Govemment agent are presumed to have notlee of limitations l on his authority even through the Govemment representative ; 4 himself may have been unawars of them. On this subject the l l United States Supreme Court has stated the following l Whatever the form in which the Govemment funettons, ! anyone entering into an agreement with the Govemment j takes the risk of having accurately ascertained that he who J purports to act for the Govemment stays within the bounds j of his authority. The scope of this authority may be
- explieltly defined by Congress or be limited by delegated i legislation, properly exercised through the miemaking i
l 1 IV-s I l 1 I h,.- - - - - ..,-,- - --,,---,. __,, - ,, - - _-- - --.. -...- - - - -- - - - _ - -
i power. This is so even though the agent himself may have L been unaware of the limitations upon his authority. (b) Delegation of Authority to Agents i ) With respect to the authority of Govemment agents, it is well to remember that the Government itself is a nonentity; that j l Is, it has no eyes, no hands, no ears-its function must of necessity be caerled out by agents. Thus, every officer acting ! on behalf of the Govemment does so through the delegation of < speelfic authority. These delegatins can ultimately be traced i to the Constitution itself and the functions of Government recited therein or to laws enacted by the Congress. 4 A dist!nction should be drawn between private agents and : agents of the Govemment. The agent of a private citizen has the authority which is derived from this principal, and he can - represent the principal in all matters within the scope of his
- authority. Further, he can be imputed with implied authority, ,
i by conduct, which the principal may be legally prohibited from ! denying. The agent can perform all acts except those which
- are speelfically denied him. .
The important distinction between Government and private agents is made by the question the agent for the private , citizen must ask, which is, "What am I prohibited from 3 doing?" The Govemment agent must ask himself the converse
- question -i.e., "What am I permitted to do?" '
l j Where acts of Govemment agents require by law, regulations, or the contract itself, to be approved by higher authority, the i Govemment is not bound until that approval is obtained, l While the Government must of necessity act through agents,
- 1 these agents must not only be authorized to act but must also ,
act within the scope of their authority before the Govemment can be held liable. O I i 2. Authority of Representatives of the Govemment l (a) Heads of Departments and Establishments i f j (i) Authority. The head of every executive department and l 4 independent establishment of the Government has implied ;
, authority to act on behalf of the United States in the I 1 purchase of supplies and servlees reasonably necessary for l
- the performance of the agency's functions. !
t 1 (11) Power to Delegate Author'% The authority of heads of I j agencies to contract on 'e O.' of the Govemment may be i i delegated on the basis a i.nplied authority or express { legislative enactment. % statutory power to delegate is j IV-6 4
I limited only by the amount of available appropriations and l expressed statutory restrictions. The power to issue appropriate delegations of authority includes the power to impose proper limitations upon such delegations. In the Nuclear Regulation Commission, procurement authority has been delegated from the Chairman through the Executive Director for Operations, to the Director of Administration, to the Director of Contracts and ultimately to each of the Ilranch Chiefs in the Division of Contracts, who act as Contracting Officers. Assignment of authority for the use of Department of Energy Laboratories by NRC is different than that for commercial contracting. In this situation a contractual arrangement exists between two Government agencies and is called an Interagency Agreement. The chain of authority extends from the Executive Director of Operations to Office Directors. Office Directors may further delegate their authority for 4 these actions in writing to specific designees within the 1 Office. The Office Director or the designee aFs as "Contracting Officer" in thae instances. The Cor, tracts Division is not involved. 1 (b) Contracting Officers (1) Definition. A "Contracting Officer" is defined in the ( Federal Acquisition Regulation as "an offielal designated l
- to enter into or administer contracts and make related l
, determinations and findings." It is a functional , description and not a job title. Anyone, regardless of his . or her place in the organizational structure, who has been 1 delegated the authority to enter into contracts for the , Government is a Contracting Officer. (ii) Responsibility. Numerous provisions of law and regulation l require the Contracting Officer to faithfully protect the interests of the Government. '!he FAR, for example, requires that "No contract shall be entered hito unless all I applicable requirements of law, Executive Orde s and regulations have been met." (ill) Scope of Authority. 'The authority of contracting officers comes from delegations down from the head of the ; agency. The Contre.cting Officer's appointment usually l Includes speelfle limitations on dollar amounts or types of j contracts. Within the NRC, for exemple, Contracting Officers are limited to $500,000 unless they receive a specific delegation from the Commission. The Director, Division of Contracts authority is $750,000. J
> i IV-7 J
(iv) DOE Projects. These "contracts" also have thresholds of authority. Currently an Office Director maintains his own authority but must have Senior Contract Review . I Board approval to enter into DOE projects which have an estimated cost of $500,000 in one year or $1,000,000 in three years. l
- 3. Ratification of Contracts !
A contract which is not binding solely because the Government representative who made it lacked authority, may become binding upon ratification by an officer authorized to make such a contract, provided the ratifying officer himself could have gran'.ad authority ' to enter into the contract at the time it was made and still has power to do so at the time of ratification.
'Ihe distinction between ratification and approval of contracts l
must be understood. Ratification implies that the person who originally contracted on behalf of the Government lacked authority to do so. Such a contract may become a valid contract binding on the Government from the time it was originally made if it is ' ratified by an agent of the Government possessing the necessary ' authority to enter into the contract on behalf of the Government. On the other hand, Government contracts, entered into by properly ' authorized agents of the Government subject to approval by higher , authority, as a conditlen precedent to their validity, are not ; j binding on the Government unless and until the necessary approval r is obtained. The terms "ratification" and "approval" are often ,' , J mistakenly used interchangeably.because the ultimate effect of the 1 actions is usually the same. Under certain circumstances, approval . i action may be accomplished "after the fact." Althcugh the legal ' ) ramifications are somewhat different this principle also applies for DOE projects, i l 4. Appointment of Representatives Contracting Officers are permitted to appoint a Government ; person as their "Representative" to discharge such functions as the i Contracting Officer shall designate. The appointment must be in l
- writing which defines the scope and limitations of the '
representative's authority. A representative may be empowered to f , take any action the Contracting Officer might take under speel',' ! contractual instruments, subject to any limitations contained in tne ! Instruments themselves. Normally the authority which may be delegated to his representatives by a Contracting Officer is subject . to the following limitations imposed by regulations l l (a) A representative may not, by virtue of his designation as such, ;
- be empowered to execute or agree to any contract or l
modification thereof (except change orders under the "Changes" clause whleh do not involve changes in the unit or
) contract price, quantity, quality or delivery schedule), and l ) f i IV-8 1
!I J
I i i (b) A representative may not be delegated the responsibility of signing contracts and contract modifications. The function of signing must be discharged by the Contracting Officer personally ar.d mr.y not be accomplished by facsimile or by proxy. (c) These same principles apply to DOE projects. In these cases the assigned Project Manager is the representative of the Office Director or his designee. D. Other Acts and Laws Affecting Procurement
- 1. The Freedom of Information Act
- a. Background and Purpose of the Act Another statute bearing upon the conduct of procurement activities, and documentation of the contracting process is the >
Freedom of Information Act. Under Title 5, United States Code, Section 552 requires each agency covered by the Act to facilitate efforts by the public ' to obtain public records and documents which are not exempted specifically by the initial legislation. The ageneles are required to publish the manner in which and from whom the public information may be obtained. The act also permits individuals to seek a District Court order directing the agencies to prMuce the information which is improperly withheld. In a?Jition, it empowers the District Court to punish an employee for contempt in the event the employee does not comply with the court order.
- b. Exemptions (4) and (5)
Essentially, the Freedom of Information Act provides that any person may request of the Federal Government any document
, or documents in its possession, subject to certain stipulated I exceptions. The exceptions which are most relevant here are those having to do with trademark or other commercially '
privileged information obtained from persons, the release of which may injure the competitive position of contractors (Exception 4 of the Act), inter- and intra-agency communi-catiors giving advice (Exception 5), and information, the release of whleh might constitute an invasion of privacy (Exception 6). For a fuller explanati n of these statutory ' exceptions and their interpretations as supplied to specific requests under the Freedom of Information Act, inquiry may be made of either the Contracting Officer or the agency's Freedom of Information officer. I l i IV-9 i l I
- - ~ .-. - - - - - - - - . -
I l The provisions of the Freedom of Information Act should be borne in mind in matters relating to contracted projects, i.e., 4 in respect to any possible request for a copy of the minutes of }'; meetings, site visit reports, successful offeror's proposal, summary of negotiations, etc. No attempt will be made here i
- to resolve questions about the availability of these and related ,
i documents to a requester under the Act, as the rules on this ; l are complex and a discussion on this would be beyond the j scope of this Manual. It should be borne in mind, however, ) ! that extensive access to the . documents generated in the l contracting process, subject to deletions under the exceptions l mentioned, is part of the environment in whleh proposal i ~ reviews and contract negotiations proceed. , i : 1 2. The Privacy Act 1 i l Another act of interest is the Privacy Act, P.L. 9 3-579, 5 U.S.C. l 1 522a, 1974, whleh concerns the rights of parties to request ! I Governmental information respecting them as individuals. ; i Recently the Privacy Act has been interpreted by Legal Counsel, ; ! NRC, in such manner as to greatly narrow the scope of its l 1 applicability to NRC contracts. ! l ! 4 3 Service Contract Act of 1965 l Public Law 89-286, 79 Stat.1034 (1965), provides the payment of i
- minimum wages (including fringe benefits) and the observance of j safety and health requirements on all contracts of the Federal 3 ;
Government, the principle purpose of which is the performance of l maintenance services (such as guards, Janitors, etc.). The l Secretary of Labor under the act has the major role in { implementing and administering the provisions of the act. l f 4. The Budget and Accounting Act of 1921, As Amended ! ! Title 31, United States Code, Sections 1-60, 71, 471, 581-581d ! l created the Bureau of the Budget and established the General ! i Accounting Office (G AO) under the direction of the Comptroller { General of the United States. Under this legislation, the l Comptroller General is required to investigate all matters relating , to the recolpt, disbursement, and utilization of public funds and to j make recommendations to the Congress to achieve better } procurement praettees. Provisions are included therein for the l t settlement and adjustment by the General Accounting Office of all ! l claims and demands by or against the United States and of all
- accounts in whleh the United States is concerned either as a debtor
] or creditor. j 5. De Small Business Act of 1953, As Amended Title 15, United States Code, Sections 631-647 created the Small l Business Administration (SBA), whleh together with the j i i ! IV-10 i
Government procurement agencies has the responsibility of promoting policies and taking actions to assure that small businesses obtain their fair share of Government procurements. These small business functions of the SBA whleh are most closely related to procurement are (1) the determination of whether a company is a small business; (2) the issuance of a certificate of competency; (3) procedures for setting aside procurements for small business; (4) procedures aimed at increasing subcontracting l to small business. The Administrator of the SBA, in coordination and cooperation with the heads of other Federal departments and agencies, is required to take such steps as may be necessary and appropriate so that contracts, subcontracts, and deposits made by the Federal Government in connection with programs aided with Federal funds, are placed in such a way to as to further the purposes of the Economic Opportunity Act (Public Law 90-222, 81 Stat. 713, enacted December 23, 1967).
- 6. Defense Production Act of 1950, As Amended Title 50, United States Code, Appendix 1060-2166, provides for the establishment of priorities in the performance of defense contracts and the allocation of materials and facilities under the Defense Materials System (DMS). The legislation, in addition, authorizes Government guarantees for loans by private financing institutions to contracters and subcontractors through the conduit of the Federal Reserve System.
l , 7. Contract Disputes Act of 1978 Public Law 95-563, 92 Stat. 2382 establishes the ground rules and procedures by which disagreements relating to contracts will be j settled. The legislation provides that any dispute will be subject to I a final deelslon of the Contracting Officer if it cannot be settled . by negotiation between the parties. Appeals to these decisions can I go either to a Board of Contract Appeals or to the U.S. Claims Court. The Act provides for further appeals by either the contractor or the Government. Other aspects of settling disagreements about contracts are also covered in detail.
- 8. Public Contracts Act (Walsh-Healey Act)
Title 41 United States Code, Section 35-45, and Title 5, United States Code, Section 616, provide for inclusion in contracts for the i manufacture or furnishing of materials, supplies, articles, and equiptr, ant in any amount exceeding $10,000 with stated exceptions, of certain representations and stipulations as to the identity of the contractor (whether manufacturer of or regular dealer in the materials, etc., to be manufactured or used in the performance of the contract), agreement not to employ convict labor on the contract, minimum wage rates and ages of employees, maximum labor hours, and safe and annitary working conditions, and it prescribes penalties for violatiors IV-Il
- 9. Davis-Bacon Act, As Amended ,
Title 40, United States Code, Section 276a, et. seq. provides that construction contracts in excess of $2,000 must contain a provision to the effect that no laborer or mechanic employed directly upon the site of the work shall receive less than the prevalling wages as determined by the Secretary of Labor which are to be paid at the site of the work at least once a week. Sanctions include termination of the contract, being debarred from obtaining Government contracts, as well as monetary penalties.
- 10. Work Hours Act of 1962 This act (40 U.S.C. 327-332) applies to contracts not subject to the Walsh-Healey Act and provides for overtime compensation for laborers and mechantes for work over 40 hours in I week.
- 11. Assignment of Claims Act Title 41, United States Code, Section 15, provides that no contract or order or any interest therein, shall be transferred by the party to whom such contract or order is given to any party, and any such shall cause the annulment of the contract or order transferred, so far as the United States is concerned. The legislation has provisions which permit the assignment to a bank or other financial institution of funds payable to the contractor under the contract involving a payment of over $1,000, unless the contract provides )
otherwise. The assignment may be made only to one party and must cover all amounts payable under the contract. There are also r,covisions within the act which permit, during time of war or national emergency, certain agencies to stipulate no setoff of claims of the Government arising out of renegotiation, fines, penalties, taxes, and soelal security contributions, or withholding taxes whether arising from or independently of the contract.
- 12. Tucker Act, As Amended Under 28 U.S.C.1491 the U.S. Claims Court is given jurisdiction k
over any claims against the Government where such claims are based against the Constitution, legislation, a regulation of any executive department, an expressed or implied contract with the United States or for liquidated or unllquidated damages in cases not sounding in tort. The jurisdiction of the District Courts is coincident in these types of cases with that of the Claims Court but limited in amount to $10,000 (28 U.S.C.1346). However, the District Courts have jurisdiction under numerous other statutes and therefore are able to consider some peripheral contractual matters that the Claims Court cannot consider. i IV-12 l 1
- 13. Legislation Requiring Appropriations Title 41, United States Code, Section lla-b, provides that no
{- contract or purchase on behalf of the United States shall be made unless the same is authorized by law or is under an appropriation adequate to its fulfillment, except in the Departments of the Army, Navy, and Air Force for specific enumerated items which, however, shall not exceed the necessities of the current year. The Secretary of Defense is required to immediately advise the Congress of the exercise of his authority granted in this statute and is required to report quarterly on the estimated obligations incurred pursuant to the authority granted in this statute and is remired to report quarterly on the estimated obligations incurred p" suant to the authority granted in the legislation.
- 14. Public Law 85-804 Title 50, United States Code, Sections 1431-14 35, authorizes extraordinary contractual acts to facilitate the national defense.
The President is granted the authority to authorize any department or agency exercising functions in connection with national defense, to enter into contracts or into amendments or modifications of contracts and to make advance payments, without regard to other provisions of law relating to the making, performance, amendment, or modification of contracts, whenever he deems that such action would facilitate the national defense.
- 15. The Wunderlich Act Under 41 United States Code, Section 321-322 the decision of the head of any department or agency or his duly authorized representative or board is final and conclusive, pursuant to a contract provision, in a dispute involving a question of fact arising under a contract, unless said decision is fraudulent, capricious, arbitrary, so grossly erroneous as necessarily to imply bad faith, or is not supported by substantial evidence. Under the legislation no Government contract shall make the decision of any administrative officer, representative, or board final on a question of law.
- 16. The Miller Act, As Amended Under Title 40, United States Code, Section 270a-270b, there is a requirement that before any construct!.n ' contract in excess of
$2,000 is awarded the contractor must furnish a performance bond adequate for the p otection of the Government and a payment bond adequate for the protection of all persons supplying labor and materials in the prosecution of the work in the amounts prescribed by the statutes. Provisions in the act require persons who bring suit un.ier the bory's to file notlee of claims with respect to labor and materials farnished within a prescribed period as well as a time l limitation for the commencement of an action to recover under the bonds.
IV-13 i l i l
- 17. Copeland Act Title 18, United States Code, Section 874, and 40 U.S.C. 276e 1 (Anti-Kickback Act) provide criminal sanctions to be imposed against anyone who intimfdates or threatens or otherwise induces any person working on a construction project to give up part of his compensation to which he is entitled under his contract or employment. The act further provides that the Secretary of Labor shall make reasonable regulations for contractors and subcontractors engaged in construction work, including the
- requirements for weekly sworn affidavits on employees' wages.
- 18. Convict Labor Title 18, United States Code, Section 436 (1964), was originally passed by Congress in 1887 and was implemented by Executive Order 325a, May la,1905. It requires that all contracts to be performed within the United States entered into by an executive agency contain a clause prohibiting employment of convict labor.
- 19. Buy American Act, As Amended Title 41, United States Code, Section 10(a)-(d), permits the utilization of only articles, materials, and supplies which have been made or produced in the United States and only articles, materials, and supplies manufactured in the United States unless the head of l the department or independent establishment concerned determines that the purchase of domestic source materials or i supplies is inconsistent with the public interest or the cost is
~ i unreasonable. In addition to the Buy American Act, there are other statutory provisions which restrict procuring agencies from purchasing foreign products. The Department of Defense Appropriation Acts j have regularly included a section governing the foreign purchase of I food, clothing, cotton, silk or wool. Another example of a provision of this nature is Section 604 of the Foreign Assistance Act of 1961 22 U.S.C. 2354a (1964), which was concerned with procurements not resulting in adverse effects upon the economy of the United States or the industrial immobilization base.
- 20. Conflict-of-Interest Statutes Extensive conflict-of-interest statutes (18 U.S.C. 201-287) impose severe sanctions on any Government official or employee who accepts any form of gratuities from any person or company with a view toward securing favored treatment under any contract or proposed contract; 10 U.S.C. 2207 provides that all contracts using Department of Defense appropriations must contain a clause for stringent penattles if gratuities are given. In addition, Government employees are precluded from acting or assisting in the prosecution of any claim against the Government, within the limitations and tv-14
permissive actions prescribed by legislation, executive orders, and regulations. t in addition to criminal sanctions for violations for conflict of interest, the Government is authorized to cancel the contract if any conflict of interest conviction results in relation to such contract.
- 21. Offielais Not to Benefit Title 18, United States Code, Section 431 prohibits a Member of Congress from benefiting from a Government contract.
- 22. Blind Made Supplies Title 41. United States Code, Section 48, requires that certain products made by the National Industries for the Blind be obtained solely from that source. The General Services Administration purchases and stocks many of these items for all agencies.
- 23. Prison Made Supplies Title 18, United States Code, Section 4124 (1964), requires that certain products made by the Federal Prison Industries, Inc., be obtained only from that source. The General Services Administration also stocks most of these items.
( 24. Federal Reports Act of 1942 This act requires thet any request for identical information from ten or more sources other than Federal employees as such must be approved by OMB. Any data gathering trutrument must receive an 1 OMB approval number before it can be used. The requirement I applies both to direct data gathering and that done through contract. l I l IV-15
CHAPTER V - TYPES OF CONTRACTS, FINANCING ARRANGEMENTS
. Page A. Introduction V-1 11 . Two Categories of Contracts V-2 C. Uncertainties and Risks V-2 D. Fixed-Prlee Contract Type V, 3
- 1. Firm-Fixed Price V-3
- 2. Fixed-Price with Economic Price Adjustment V-3
- 3. Fixed-Price Incentive V-4
- 4. Fixed-Price Redeterminable Prospective V-5
- 5. Fixed-Price Redeterminable Retroactive V-5
. E. Cost-Reimbursement Contract Type V-5
- 1. Cost-No-Fee V-6
- 2. Cost-Sharing V-6
- 3. Cost-Plus-Incentive-Fee V-6
- 4. Cost-Plus-Fixed-Fee V-6
- 5. Cost-Plus-Award-Fee (CPAF) Contract V-7
- 6. Summary: Cost and Performance Risks under Reimbursable Arrangements V-8
[ F. Other Contract Types V-9
- 1. Time-end-Materials and Labor-Hour V-9
- 2. Indefinite Delivery V-9
- 3. Performance Incentives V-9 G. Level-of-Effort versus Completion Contracts
- V-10 Exhibit V Contract Types V-13 i
3
I i . i I V. TYPES OF CONTRACTS - FINANCING ARRANGEMENTS l i !
- i
! A. Introduction I The contract type establishes the relative level of risk in performance i of a contract. (See chart on contract types /rlsks at the end of this i ! chapter.) The objective in selection of contract type should be to i 1 establish the pricing arrangement whleh is most likely to produce a fair and reasonable price. This is achieved by weighing the cost and ; technical risks and consolously assigning them to either the
~
i Government or to the contractor. If too much risk is assigned to the j contractor, then there will be pricing contingencies included to cover ! the high level of risk. If, on the other hand, not enough risk is left for : the contractor, then there will be little or no incentive for exercising . management skills to control costs. In either case there is a potential :
- for detrimental effects to the Government. [
] { FAR 16.103 discusses the importance of careful selection of the !
- contract type:
Selecting the contract type is generally a matter for ! i negotiation and requires the exercise of sound , judgment. Negotiating contract type i the and , negotiating prices are closely related and should be , i considered together. The objective is to negotiate a
! contract type and price (or estimated cost and fee) that
- < will result in reasonable contractor risk and provide the .
l contraetnr with the greatest incentive for effielent and ! I economical performance. : i l More than a dozen types of contracts are listed and described in FAR i , Part 16. Each type of contreet establishes a different relationship ! ) between the Government and the contractor, thus requiring a different l approach to the functions of contract administration, j l With regard to degree of cost responsibility, the various types of I J contreets may be arranged in order of decreasing contractor ' 4 responsitellity for the costs of performance. At one end is the i firm-fixed-price contract under whleh the parties agree that the l j contractor assumes full cost responsibility. At the other end of this i j range is the cost 91us-a-fixed-fee contract where profit, rather than [ j price, is fixed and the contractor's eost responsibility is therefore i j minimal. In between are the various ineentive contracts whleh provide ) for varying degrees of contreetor cost responsibility, depending upon i I the degree of uncertainty involved in contreet performance. The l l speelfie type of contract should be determined by the degree of risk in I contreet performance. When the risk is minimal or een be predicted ! with an acceptable degree of certainty, a firm-fixed-price contreet is l preferred. However, as the uncertainties become more significant,
! other fixed 9elee or cost-type contreets should be employed to
! accommodate these uncertainties and to avoid plaelng too great a cost I risk on the contreetor. V-1 i
. _ _ - . _ _ _ . - - _ _ _ - - . _ _ _ _ , , _ _ _ _ , - . _ - - - _ _ ~ - - _ . _ _ _ _ - _%--_-
l B. Two Categories of Contracts ! This distinction in terms of cost responsibility leads to the ) , differentiation between two broad categories of contracts: o fixed-price and cost-reimbursement. All fixed-price contracts share a common element-the contractor guarantees performance of the contracted work as a condition for being paid by the Governr.nent. , Cost-reimbursement contracts, on the other hand, merely provide for [ the contractor to use its best efforts to perform all work and all ! obligations under the contract as a condition for being paid all allowable costs up to a ceiling (the current estimated cost or an : authorized portion of the total estimated cost) plus a fee, if any. The i variety of types of contracts tends to blur this distinction in certain 4 Instances but, in general, it is an accurate categorization of contract t types. A related method of differentiating the general categories of contracts is the time at which the monetary obligation of the ; Government is established. In fixed-price contracts, the provision for ; payment establishes either an amount at the outset or a formula for ! determining the amount at a later point in time. In all cases, there is !
~
a clear upward boundary on the price the Government will pay for the completed work. In cost-relmbursement contracts, the contract will ; i specify an estimated amount which cannot be exceeded except at the ; contractor's risk of not being paid, but that amount can be increased l 1 at the option of the Government. Such an agreement to increase the l amount to be paid would lack the tLssential element of mutuality of l consideration. Under a cost-relmbursement type of contract the }t element of consideration is built in as a continuation of the work that i would otherwise cease. ; C. Uncertainties and Risks l. I I A properly drafted contractual agreement considers the element of j cost responsibility in terms of production uncertainties and risks in , performance. Where the risks are identifiable and the probable costs i
- of the various contingencies can be estimated along with the l probability of their occurrence, it is reasonable to expect the contractor to assume those risks. But where there are many l uncertainties and risks and those risks cannot be accurately estimated, !
it is reasonable for the Government to assume some portion of them. l The level of cost risk is then rightfully related to the level of administrative oversight and activity. Where the contractor accepts all or the major portion of the risk, it would be inequitable for the l Government to intervene too deeply in its management of the work. But where the Government assumes a large portion of the risk, it would be inequitable for the contractor to deny the Government the (
; right to protect its financial laterests by close surveillance and some i share in the management of the task. This is the basis for much of the difference in administrative activity associated with each of the types l } }
i V-2 i s
- - - - - - - . - - _ . - . - , . - - - . . . , - , --- . . . _ . -.,,---,.,--n.. - - - - , - , ,----.----.n.--- , , - , . , . . , - - -
of contracts to be discussed in the following sections. The contract type selected will reflect the uncertainties and ris l J
l can, if necessary, choose to add more funds to the contract or order [
and the contractor or Laboratory will be obligated to continue without j additional fee.
]
A cost reimbursement level of effort contract or DOE order obligates :'
the contractor or laboratory to supply a certain number of labor hours l
of work or until the money runs out, whlehever comes first. If funds i i
are exhausted before the full level of effort has been applied, the l l
Government may choose to increase the cost estimate and have the l contractor or Laboratory continue without additional fee. Fee is not l
applicable for DOE work. ,
Level of Effort contracts and DOE Orders are appropriate when the l l work to be done is part of a larger project and services of a partleular !
1
! type will be needed to support the overall effort. For example, if an
{
in-house effort will generate data whleh must be entered into a i computer system, a fixed-price level of effort contract might be t i appropriate. It is not possible to speelfy a completion form job since :
! the preelse amount of data is not known; but it is reasonable and l l
appropriate to contract for 6,000 hours of data entry personnel time (
! during the next fiscal year. Data analysis might properly be handled j on a cost reimbursement level of effort basis since costs of computer !
1 time or sub-professional assistance would vary widely with each i specific task assigned during the contract period. [ j Completion form SOW's are generally preferred since they rive { j greater assurance of speelfic results for funds obligated. ! i 1( f 4 t i - I '. 2 i i l 4 4 i i V-11 .! i 1 ! 4
- . - - . - - . _ . - - = _ . - _ _ - . _ - . -. _ - - . - - . .- -
1 CHAPTER VI- METHODS OF ACQUISITION
.P,agg
- A. Introduction VI-l l B. Small Purchases VI-l
C. Blanket Purchase Agreements VI-3 j D. Imprest Fund VI-3 f E. Sealed Bidding VI-3 ! i 1. General VI-4 !' l 2. Conditions for Scaled Bidding VI-4 l : ! F. Two-Step Sealed Bidding VI-6 ; a i l 1. Description and Conditions for its Use VI-5 l' 1 2. Conduct of the Procurement VI-6
- 3. Summary VI-7 l i
i j G. Contracting by Negotiation - General VI-8 l l 1. Alternative to Sealed Bidding VI-8 l
- 2. Negotiated Competitive Procurement in excess of $25,000 VI-8 l l H. DOE Laboratory Acquisition and Other Interagency Agreements VI-l1 f l 1. Special Acquisitions and Policies VI-l 4 l
- 1. Introduction VI-14
- 2. Non-Competitive Contracts VI-14
- 3. Unsolleited Proposals VI-21 l l 4. Procurement Set Asides VI-22 i l1 5. Contracts unde.' Section 8(a) of the Small Eusiness Act VI-23 }
j 6. Socio-Economic and Program Coals VI-24 ,
- 7. Other Programs VI-25 J. Locating Sources of Supply VI-26 ;
] ' j i i i 1i ! 2 i l q
l VI. METHODS OF CONTR ACTING l k A. Introduction When the Division of Contreets receives an RFPA, one of the first deelslons which must be made is which method of contracting is most appropriate to satisfy the requirement. The selection of the method i of contracting is dependent upon a number of factors, such as: e The dollar value of the request; e The degree to which the requirement can be accurately describedt e whether needed supplies or servlees are repetitive in occurrence or l' are for one time only: l e The number of potential sources which exist to fulfill the j requirement and l e The time available to conduct the acquisition proces, i Thare are three main methods of contracting: j i e Small purchases and other simplified purchase procedurest e Sealed biddings and ; e Contracting by negotiation. Each of these methods has a number of variations which can be used l according to the configuration of factors present in the requirement, as discussed above. l B. Small Purchases ' l l Congrem has for many years authorized Contracting Officers to i negotiate purchases of supplies and servlees of small value without I sealed bidding through the use of extremely simplified procedures. l These procedures may be used only when the aggregate amount , involved in any one transaction does not exceed $25,000. Under P.L. l 95-507 (as emended by P.L. 99-500) all purchases up to $25,000 must l normally be restricted to small busineses. Contracting Officers are , allowed to sollelt large businesses only if they can certify that there i are not two or more small busineses capable of providing the goods or I servlees needed at a competitive price. l It should be noted that few small purchases require detailed discussions. Simplified purchase procedures were therefore established to enable the Federal Government to make purchases with a minimum of costs and paperwork. The procedures are simpilfled in the sense that the Contracting Officer need not generate the VI-l
extensive documentation required for scaled bid or negotiated contracts. When making a small purchase, the Contracting Officer is authorized to exercise substantial discretion in picking the method of ! solletting offers and obtaining competition. Small purchase procedures may include Purchase Order-Invoice-Voucher methods (Standard Form 44) for over-the-counter purchases: Orders for Supplies or Services (Optional Form M7) for mall order uses or even the United States Government National Credit Card for gasoline and related services. The basic steps in the small purchase procedure ares e Receiving and reviewing the RFPA fort
- Applicable approvals such as commitment of fund availability, property office approval, telecommunications, printing, and ADP. - Accounting data. - Adequate and complete description of the required item, including stock numbers. - Quantity desired, with price estimate.
Items which could be consolidated. e Selecting the appropriate purchasing method from:
- Required sources of supply such as the Federal Supply Schedules.
- Nonmandatory GSA schedules.
- Open market.
- Equipment lease or purchase, e Soliciting quotations orally whei, the requirement is clear and there is little room for misunderstandings written, using Standard Form 18, "Request for Quotations," when there is a long list of items or detailed speelfications, o Synopsizing all purchases over $25,000 in the Commerce Business '
Daily. e Analyzing quotations and preparing a written determination of price reasonableness for crders exceeding $1,000, e issuing oral or written purchase orders. ) e Administering the modification, completion, and payment of orders. l i e VI-2 l
l 1 ~ C. Blanket Purchase Agreements ( FAR 13.2 authorizes Federal agencies to use Blanket Purchase ; Agreements (BPA) as a simplified method cf filling needs which are )
-1 expected to be repetitive in nature. The BPA can be likened to the i concept of a charge account and it is designed to reduce :
adtr.inistrative costs by eliminating the need to luue multiple purchase orders for the same requirements. The BPA itself does not obligate
! funds. It consists of: ;
e A description of the agreement, including what supplies or services , the supplier will furnish, if and when requested to by the l Contracting Offleer (or his authorized representative), during a } speelfled time period and within an aggregate amount (if this can ; be estimated). l
! e A statement limiting the obligation of the Government only for i authorized purchases actually made under the BPA. (
o A statement that the Government will be accorded the same prices I as the supplier's "most favored customers." : I t s A statement speelfying the dollar limitation for each individual !
- purchase under the BPA, up to a maximum of $25,000. !
e A list of the individuals nuthorized to purchase under the BPA, l I with the dollar limitations, per order, of their purchase authority. l l ( l e Information on delivery tickets to be included with shipments and { invoice instructions, l l j D. Imprest Fund l [ f An imprest fund is a cash fund of a fixed amount, established when an - j agency finance officer advances funds to a cashier without eherging an I
- appropriation, for disbursements as occasionally needed for relatively I 4
small purchases, which do not exceed $500 (the current Treasury i Bulletin ceiling) per transaction, or such other limit as NRC speelfles ; 1 in an emergency. The use of cash from an imprest fund does not require competition normally orders to suppliers are placed orally. l NRC Appendix 5202 provides the speelfies of this Small Purchase } j Method. ! 1 3 E. Sealed Biddinc (FAR 6.401(a)) ; i i ! The Congress has established Sealed Bidding as the preferred method ! j of procuring supplies and services for all ageneles of the Government ' j when time permits, when speelfications are definite, when there is no j need to hold discussions with potential contractors, the deelslon een be made on PRICE alone and there is a reasonable expectation of i receiving more than one sealed bid.. '!he alternate method is titled l Competitive Proposals (referred to in the FAR as Contracting by l I l l l ) i vi-3 ;
- )
i l
I Negotiation). The Contracting Officer makes the determination of , which method to use. The Contracting Officer will only use g competitive proposals when Sealed Bidding is not appro?rlate under i FAR 6.401(a). This generally means that the parties must "talk". 4
- 1. General 1 r 1
Sealed Bidding has two goals: to gain for the Government the 1 benefits of full and free competition, and to give all quellfled sources the same opportunity to bid competitively. I There are four main procedural steps in Sealed Bidding first, [ i invitation of Bids (IFB) are prepared second, they are announced in ! A the Commerce Business Daily (CBD) and distributed third, bids are ! ! received in response to the IFB and are opened, recorded, and i tabulated and fourth, a contract is awarded to the lowest ; i responsive and responsible bidder whose bid is the most j j advantagenus to the Government, price and price-related factors l considered. ) The procedures of Sealed Bldding are often described as rigid or
- mechanical and follow FAR Part 14. This is true in the sense that
; they are established largely by law and regulation, and generally
) cannot be deviated from. This does not mean that NRC's personnel ; can exercise any less judgment and discretion when using Sealed ! Bidding. To the contrary, they must not only be completely ! familiar with the rules and procedures that apply, they must also l understand the reasons for them. Only then can they distinguish ) l j 4 what must be done from what may be done in a given situation. l And only then can they begin to use this method of procurement l effectively, NRC Appendix 5101, Procurement of Goods and i Senices, wil eeflect the requirements of FAR when revised to the ! { 1984 Compe'.ition in Contracting Act. ;
- t Conditions fst Sealed Bidding -
f I 1 I Although Sealed Bidding is generally the preferred way of buying in l 1 the civilian agen ties of Government, the law makes it clear that the
- circumstances of each procurement must decide the purchase method.
! Some of the feel >rs that should be considered in making this deelslon l are discussed bel, w. ] f (a) Adequate Cc npetition l Sealed Blddir t can only be effeettve when all prospective bidders f have reason a believe that one or more competitors will also be j seeking the enntract. When this situation exists, they know that price is the mdor deciding factor in award, j If, for any reason, one cannot expect more than one sealed bid to j to actively and independently contend for the award, then 4 competition is not adequate and Sealed Bidding cannot tm used. ) 4 1 j VI-4 l
Even if thare are many potential sources, factors such as an industry operating near capacity or collusion umong bidders can ( destroy the competitive situation. (b) Adequate Specification J The procedures of Scaled Bidding are based on a price comparison of essentially identical offers. This means that there is no need to conduct discussions with offeror:; about their bids, if there are ambiguities in the specifications, so that the item or service being bought is open to the interpretation of the bidders, such a comparison will not be valid. It w^uld be precisely the situation of comparing apples to oranges. Snled Bidding therefore requires clear and complete specifications so that all offerors know exactly what it is that the Government is buying and can provide prices which do not necessarily contain contingencies against likely variations from their expectations at the time of the IFB. (c) Price as the Basis for Aw srd The process of Sealed Bidding works to yield the lowest prices that bidders are willing to offer for the level of quality designated in the specifications. This means that the selection is made on price or price related factors if there are factors which should be evaluated on a relative basis other than prit ' or other than those which can be reduced to price equivalents, ( such as Government transportation costs, then the process will be ineffective. The requirements bought through Sealed Bidding must be amenable to a firm fixed price or fixed price with escalation contract and there must be a fully defined minimum level of quality which will meet all of the Government's needs. (d) Adequate Time if bidders are not albwed sufficient time to review specifications, assess the competitive situation, and then to prepare and submit a bid; it is likely the prices offered will contain substantial contingency factors to cover the uncertainties which are lefi. Unless there is sufficient time for these activitics of the bidders, the competitive factors that drive Sealed Bidding will not be effective. Summary The four factors discussed 6bove are all esser.tlal if Sealed Bidding is to be a successful procurement method. To be tully effective, all of these conditions must be present. VI-5
I F. Two-Step Sealed Bidding
}
- 1. Description and Conditions for its Use In some cases, neither traditional Sealed Bidding procedures nor Contracting by Negotiation seem to apply. For these situations, two-step Sealed Bidding has been developed. The procuring activity first obtains technical proposals that do not give either price or pricing information. A proposal may be discussed with the offeror to make sure that it will meet the need. In step two, bids are invited from those offerors who submitted acceptable technical proposals, and an award is made using traditional Sealed Bidding procedures.
To use two-step Sealed Bidding, several requirements must be mets the method must be approved at a level above that of the Contracting Officer, and all of the following conditions must hold true (a) The available specifications or purchase descriptions are not definite or complete enough to permit full and free competition without an evaluation and discussion of the technical aspects of the requirement. (b) The evaluation criteria are definite enough for judging technical proposals properly. The criteria may include performance requirements, special requirements and ease of ) l maintenance, necessary experience in the performance areas j involved, and the need for special skills or facilities. (c) The procuring activity believes that more than one quallfled source will be available both before and after technical evaluation. (d) A firm fixed price or fixed price with economic price adjustment type contact will be used.
- 2. Conduct of the Procurement (a) Step One: Obtaining and Evaluating Proposals l The Contracting Officer sends a request for technical l proposals to quallfled sources and synopsizes the request. The l request willinclude: I
- The best practicable description of the requirement.
- The requirements of the technical proposals, the criteria to be used in their evaluation, and a statement that no pricing or pricing information should be included.
VI-6
- A closing date for the submitting of proposals.
- A notification that the two-step procedure will be used.
Only authorized persons should be allowed to see technical proposals. Before proposals go to the requirements personnel for evaluation, any references to price or cost should be removed. The technical evaluation should be based on the standards contained in the request for technical proposals, and it should classify a proposal as acceptable or unacceptable. Often times a proposal can be made acceptable by discussing it with the offeror or obtaining more facts from him. If this will increase competition for the procurement, it should be done. Otherwise the proposal should be marked unaccepteble as it stands. Once a proposal is classified as unacceptable, tne Contracting Officer should notify the offeror. If he is asked to do so, he may tell the offeror why his proposal is unacceptable. He may also indicate whether rejection was < based on the lack of information or on an unacceptable performance approach. i Evaluation of the technical proposals may show that the I two-step method should be discontinued. The Contracting Officer must then refer the matter to the office that first approved the two-step method. If this office agrees to ; discontinue, all bidders who submitted proposals should be ' notif md give reasons for the discontinuance. (b) Step Tw 0: Sealed Bidding Upon successful completion of step one, the Contracting Officer invites bids and makes the award on the basis of ; straight Sealed Bidding procedures, except that: The invitation need not be synopsized or posted publicly. l Bids are solicited only froia sources whose technical ; proposal has been technically evaluated and found , acceptable under step one. i The invitation contains a statement that the award will be made in accordance with the specifications and the bidder's technical proposals, as finally accepted. i l
- 3. Summary ;
Two-step Sealed Bidding provides additional flexibility in awarding ; procurements that include important performance considerations, l It combines features of both Sealed Bidding and Negotiation of ) Competitive Proposals. The ability to start with a relatively vague specification which can then be discussed with offerors in light of their technical proposals are procedures drawn from Negotiation VI-7 , l _ _ _ . _ _ - - _ _ . . - . _ . _ __..__ _ _ _ _ _D
award to the lowest bidder (in step two), without further discus-sions with prospective contractors, preserves the outstanding I characteristic of Sealed Bidding. G. Contracting by Negotiation - General
- 1. Alternative to Sealed Bidding While "Sealed Bidding" is a term applied to procurements which involve firm, detailed specifications so that bids are evaluated anc awarded on the basis of price, detailed specifications are generally not possible for research and technical assistance activities. For that kind of work, the FAR provides for Contracting by Negotiation through solicitation of Competitive Proposals. This process recognizes the need for flexibility while evaluating potential contractors, allowing highly important factors in addition to price to be carefully evaluated by collectiv9 judgment, and proposals to be improved through Negotiation. Factors considered may include technical aspects of the proposal, delivery dates, performance and reporting requirements, contractor expertise, etc. Such flexibility is inherent in the authority to negotiate.
The Congress permits procurement by Negotiation of Competitive Proposals when the conditions for Sealed Bidding are not present. . Although Negotiated procurements are accomplished under procedures that differ in many respects from those for Sealed ) Bidding, the same widespread publicity and competition are present in both. The premise for Competitive Negotiation is found at FAR 6.401(b) and follows the procedures of FAR Part 15. Due to the nature of its technical programs, the need to evaluate factors other than price and the right to question and discuss specific proposals-hence, to Negotiate-is of critical importance to NRC.
- 2. Negotiated Competitive Procurement in Excess of $25,000 i 1
(a) Role of Contracting Officer and Designating Official l l Two key individuals in the procurement process are the Contracting Officer (CO) and the Designating Official (DO). Although both participate in Sealed Bidding procurements, their functions and responsibilities are particularly germane in discussions of negotiated procurement. The DO's role starts with the determination of requirements and establishment of a Source Evaluation Panel (SEP) to evaluate proposals. The DO will receive a copy of the Procurement Plan / Schedule of the SEP and may request periodic written reports of progress against the schedule. l Yl*$
Recommendation for selection of offeror (s) for negotiation
, will be made by the DO in light of the SEP's presentation ar6 k after consultation with senior staff. Further, it is the DO's task to make the selection recommendation by judging which of the proposal's is most advantageous to the Government, all things considered. The DO should, in light of the Government's stated requirements and evaluation criteria in the Request for Proposal (RFP), consider, as appropriate, the relative quality and suitability of what is being offered by each proposer, the likelihood of its being performed and how much each offer would probably cost the Government. In making his recommendation, he must consider all factors pertinent to the choice and make the necessary trade-off judgments as may be required between quality, schedule, and price. The SEP will recommend the selection of a contract, and document its findings and conclusions and answer all questions raised by the DO and assist him with any special ,
analyses or other requirements for clarifying matters related to the final recommendation. < The Contracting Officer is the Government representative in procurement metters. He is the only individual authorized to i bind the Government to the terms of a contract. The Contracting Officer must depend heavily on others for information, judgment and help. Close coordination and i cooperation between the DO and the Contracting Officer is, I therefore, essential for a successful procurement. In the l I NRC, the Contracting Officer is the Branch Chief within the ! Division of Contracts. In practice, the Contract Specialist acts as the extension of the Contracting Officer in processing contracts. The SEP similarly acts on behalf of the DO. Day-to-day interface is between the Contract Specialist and the SEP. The ultimate decision authority, however, remains with the DO and CO. In the NRC the DO is the Office Director or his designee. Once the Contracting Officer receives the D O's l recommendation for contract award or other contract action, l he must either make the award as recommended, return the recommendation to the DO for further justification and documentation, or advise the DO that an alternate selection l should be made, in instnnees where the Contracting Officer determines that the DO's recommendation is deficient, there defic!encies shall be fully and clearly delineated so that they ; may be responded to specifically. In no event, shall the Contracting Officer make a selection without the DO's concurrence. When agreement cannot be reached, the matter shall be referred to the Executive Director for Operations for resolution. i VI-9
I (b) Conduct of the Procurement Step 1 ) l The Source Evaluation Panel (SEP) drafts a Request For Procurement Action (RFPA) which is submitted to the Contracting Officer by the Director of the requiring office or his designee. Copies of the RFPA will be forwarded to the evaluation panel members. Using that form, the Office Director or his designee notifies the Contracting Officer of the need for , issuance of a solicitation and supplies certain documents required for the solicitation package. This will be followed by issuance of a solicitation, sent to sources recommended by the SEP, and to any other Interested party such as those who ' respond to a synopsis in the Commerce Business Daily. The contract file shall be documented with the reason for rejection as well as acceptability of responding firms. Step 2 At the time and date set for receipt of offers, those received by the Contracting Officer will be opened and recorded. The Contracting Officer submits the technical proposals to the SEP for review and evaluation. Concurrently, the cost proposals are reviewed by Division of Contracts personnel. Step 3 Following the separate evaluation of the technical and cost proposals as described in Step 2, above, the SEP then evaluates the cost proposals of those technically acceptable offerors to determine those to be in the Competitive Range. The SEP prepares the Competitive Range Recommendation Report which is then signed by the DO and transmitted to the l Contracting Officer for approval. Upon agreement between the Contracting Officer and DO regarding the recommended Competitive Range and the documentation supporting the recommendation, the CO, or Contract Specialist, and in most cases the SEP, will conduct discussions with the offerors in the Competitive Range preparatory to final selection of a contractor. It should be noted that the Government may in the solicitation reserve the right to award a contract based upon initial proposals received without discussion of such offers, under clearly justifiable circumstances as enumerated in the Federal Acquisition l Regulation, l 1 1 VI-10
Step 4 ' Following the discussions with those in the competitive range, offerors will be afforded an opportunity to submli either revised proposals (if additional discussions are contemplated) or "Best and Final" proposals (if the panel conchides that no more discussions are necessary) to correct deficiencies or change the proposal in any way. Step 5 After receipt of "Best and Final' proposals, the SEP shall review and evaluate those offers, and made a tentative final selection. The SEP then prepares a Final Evaluation Recommendation Report which is signed by the DO and transmitted to the Contracting Officer for approval. Upon agreement between the Contracting Officer and DO regarding the selected contractor and the documentation supporting such selection, the Contracting Officer will have the contract prepared and obtain necessary reviews of the proposed contract document. The Contracting Officer will then make the award. Step 6 The Contracting Officer will notify all unsuccessful offerors j of award information to include the contractor, contract type, award amount, and award date. Upon request, debriefings will be given. The SEP will assist the Contracting Officer in the conduct of such debriefings as necessary. The Contracting Officer will also publish the award announcement in the Commerce Business Daily. Acquisition from a DOE Lab also requires negotiation. The primary difference from commercial procurements is that the Division of Contracts is not involved and negotiation occurs with only one source, the particular Lab selected. Responsibility for the negotiation rests with the Office Director or his designee, assisted by the Project Manager as appropriate. H. DOE Laboratory Acquisition and Other Interagency Agreements Differences exist in the authorities assigned and the methods used when NRC. acquires supplies or services from a DOE Laboratory or other Government agency rather than a commercial source. ne legal authority is the Economy Act of 1932 which permits interagency agreements, rather than the Federal Property and Administrative Services Act. The authority is further implemented in the Energy Reorganization Act which established NRC as a separate agency. The principles established and imued in the Federal Acquisition Regulation VI-l 1
are appropriate to apply in either, case. Methodology, techniques, forms, and associated elements of each system are the real variables ) between the two types of procurement. Specific differences are examined later in the text. Similarities are discussed here. The first step of course in any procurement is the establishment of a requirement and describing what is to be bought. The next logical question is to ask: "From whom can the requirement be purchased'" Answering the question leads to an initial decision to use either a DOE Lab, another Government agency or a commercial source. In some cases another Government activity might be selected. If another Government activity is selected, an interagency agreement is used and the treatment of the action is essentially the same as with DOE. Whatever the decision, it must be justified. If it is, the proceas is pursued; if not, a rethinking exercise is in order. When a justified decision determines that DOE will be the source, a process of communicating with DOE is required. This responsibility is assigned to Office Directors, who may delegate authority within their respective Offices to execute the responsibility. If the decision is to use a commercial source the responsibility to communicate with sources is assigned to the Director of Contracts, who also may delegate the authority within the Division of Contracts to execute the responsibility. In the case of a DOE selection, a sole source has been determined. i The Negotiation Method of Acquisition is applied. If a commercial source has been determined to be appropriate, then either Negotiation or Sealed Bidding, whichever fits, is used. The result of the DOE process is a contractual instrument between DOE and NRC. This instrument is titled a Standard Order for DOE Work, an agreement between two separate and independent Government agencies. The result of the commercial process is a contract between NRC and a commercial firm. In both cases, the objective is the same: to achieve the results needed that are set forth in the Statement d Work, which is a common element of both documents. Briefly it is R seguire: a quality product < on time at a reasonable cost For DOE work, an Office Director is assigned the responsibilities, contractual in nature, for a project. For commercial work, the Director of Contracts is assigned the responsibilities, contractual in nature, for a project. Both may delegate authority and reassign certain of these responsibilities. Both require technical help from an ' assigned Project Manager in order that the objective be reached. VI-l 2
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I. Soecial Acquisitions and Policies
- 1. Introduction The previous parts of this chapter described the general methods of Federal procurement which are applicable to nearly all acquisition or contracting situations facing a Project Manager. This part presents additional important policies which have an impact on the contracting process.
It is desirable that Project Managers have a basic understanding of these requirements. it should provide them with an appreciation of some of the legal constraints that govern those contracting actions which are necessary in order to provide support to the projects for which they, the PMs are assigned responsibility for accomplishing. The content presented should serve to answer why the Division of Contracts imposes some of the conditions which have been experienced.
- 2. Non-Competitive Contracts ,
(a) Basic Policy The Federal Acquisition Regulation (FAR) provides that purchases and contracts, with certain limited exceptions, shall be made on a competitive basis and that competitive bids or proposals be solicited from as many potential sources as is , . considered practicable to ensure such full and open competition. The FAR further requires that before negotiating a contract on a non-competitive basis the agency is responsible not only for assuring that competitive procurement is not feasible, but also acting whenever possible to avoid the need for subsequent noncompetitive procurements. These concepts of competition have been reinforced and reemphasized with the passage of the Competition in Contracting Act of ,1984. This act further constrains authorities of individual contracting officers by requiring higher authority approvals for certain actions previously determined by contracting officers. In initiating some procurement actions, the opportunity for competition either does not exist or may be impracticable to generate. In these instances, it is necessary that NRC assure that the reasons supporting a decision not to have competition be well-defined, defensible, and documented with appropriate approval. Noncompetitive' procurement is defined as a ! procurement action for new work for which only one source is I solicited. This includes a continuation of an ongoing contract, , if that continuation involves the procurement of work not ! specified originally in the basic scope of work of the contract. ) VI-14 { l
The proposed Justification for Other than Full and Open Competition (JOFOC) (formerjy JNCP) is furnished by the ( Project Manager as an attachment to NRC Form 400, "Request for Procuremant Action." (b) Request Procedures (1) The JOFOC represents e request prepared by the program office following these procedures: e When a prospective procurement is considered by the program office as noncompetitive, early discussions should be held with the Division of Contracts before preparing the RFPA in order to: Resolve uncertainties,
- Provide program offices with the names of other possible sources, Allow proper scheduling of the procurement, and Avoid delays that otherwise might occur if it is later determined that a noncompetitive procurement is unjustified. .
(ii) The JOFOC sets forth a full and complete justification, and is
, . signed by the Division of Contracts. The FAR specified content at Section 6.303-2 provides that each justification shall contain sufficient facts and rationale to justify the use of the specific authority cited. As a minimum, each justification must include the following information e Identification of the agency and the contracting activity, and specific identification of the document as a "Just!fication for Other than Full and Open Competition."
e Nature and/or description of the action being approved, o A description of the supplies or services required to meet the agency's needs (including the estimated value), e An identification of the statutory authority permitting other than full and open competition.
- A demonstration that the proposed contractor's unique qualifications or the nature of the acquisition requires use of the authority cited.
VI-l 5 l
e A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, ' including whether a CBD notice was or will be publicized as required and, if not, which exception applies. e A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable. e A description of the market survey conducted and the results or a statement of the reasons a market survey was not conducted, e Any other facts supporting the use of other than full and open competition, such as: Explanations of why technical data packages, specifications, engineering descriptions, statements of work, or purchase descriptions suitable for full and open competition have not been developed or are not available. L For follow-on acquisitions, an estimate of the cost to the Government that would be duplicated and how the estimate was derived. When unusual or compelling urgency is cited as a ' justification for sole-source, data, estimated cost, or other rationale as to the extent and nature of the harm to the Government. e A listing of the sources, if any, that expressed, in writing, an interest in the acquisition. e A statement of the actions, if any, the agency may take to remove or overcome any barriers to competitlan before I any subsequent acquisition for the supplies or services required. e Contracting officer certification that the justification is accurate and complete to the best of the contracting officer's knowledge and belief. (iii) The Division of Contracts (DC) takes timely action to obtain review and approval or disapproval of the JOFOC. (iv) A JOFOC will not be approved by the Competition Advocate and the Contracting Officer if it does not successfully support a noncompetitive procurement. If it is not approved, the project officer is notified immediately and the procurement l package returned, If correctable to substantiate a 1 VI-16 l l l
noncompetitive procurement, or if a competitive procurement f is to be processed, the documentation may nevertheless be \ processed by the Division of Contracts. e A JOFOC will not be returned because of minor points that may be resolved by direct contact between the initiator and the contract specialist. The final version of the JOFOC shall contain the project manager's certification that the rationale for justifying a sole source procurement is "complete and accurate" (FAR
- 6. 30 3-2(b)).
(c) Checkpoints to Consider in Preparing a JOFOC In preparing a Justification for Other than Full and Open Competition there should be a keen awareness on the part of the initiator concerning the difference between a general conclusion that competition is impracticable and the need for adequate documentation of facts and circumstances to support it. It is easy to fall into the trap of viewing the desirability and urgency of a requirement as automatically justifying a sole-source procure-ment. This match-up rarely makes for a justifiable case. Therefore, it is useful to consider the following questions as a checklist in preparirg any justification:
, o What circumstances make competitive procurement
' impracticable? e What is the exclusive or predominant capability of the one source proposed to meet this requirement? e To what degree have other sources and their capabilities been explored, and why do they lack the required capability offered by the proposed source? e What unique capebility places the proposed source in a clearly preeminent position over others for this specific effort? e Docs the existence of patent rights, copyrights, secret processes, control of basic materials, or similar circumstances affect performance? If so, competition may not necessarily be precluded. For example, licenses are issued for others to utilize patents and processes. e Is this a continuation of a previous effort, and if so, how necessary or important is it that the prior performer be the only one considered? Is the proposed effort a minor addition to a completed project? I VI-17
l 1
- Is it a major addition to a completed project? l
\ ,
- Is the added segment part of an essentially continuing )
project requirement? e Does the proposed source have exclusive access to personnel considered to be preeminent experts in the field of work that is required? How do you know that others may not have access to equally capable personnel? i e What facilities, equipment, or data does the proposed source have which are specialized, vital, and can be provided by another firm? Is the use of Government-furnished resources a viable alternative? e Are Government-owned facilities involved in the planned requirement? Are these or similar facilities available for competing offerors, or can they be made available? e Is the requirement to be performed by a regional, state, or local governmental unit? If so, what are the justifying circumstances? e is urgency the basis for the JOFOC? In explaining urgency, one is required to provide the rationale of past actions to demonstrate not only that the circumstance now exists, but to explain that everything possible was done through the i emergence of the requirement to preclude the need for sole source or limited competition. While the existence of legislation, a court order, or Presidential mandate may not itself justify noncompetitive procurement, the situation and circumstances that have prompted the legislation may well establish a need for action to be taken on an expedited basis, ' with no competition. When urgency has been established as the basis for a JOFOC and approved by D C, an additional ! justification for priority is not required. l e Is the proposed basis for the JOFOC a request to award a contract to the submitter of an unsolleited proposal? Remember that the fact that a proposal is unsolicited does not exempt it from additional scrutiny and technical judgment about its uniqueness, the identification of a real Government need, the availability of funds, and other factors which may mean either no procurement action as a responso, or perhaps at times the structuring of a general requirement for which the unsolicited proposal may offer only one of many approaches to meet it. In addition to justifying the current action, the JOFOC must also discuss steps that will oe taken,if possible, to avoid future non-competitive (sole-source) contracts. e The SEP only knows of one source that can meet the need. VI-l 8 l l l I
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This last item is of particular importance. The requirement for competition cannot be waived merely for a lack of knowledge of
' other sources; there must be sound evidence to support a non-competitive action.
If the SEP is aware of only one source and feels that the contract should be awarded to that cont'/ actor, the Division of Contracts will take steps to test the mar,(et in order to identify additional sources that may exist. This is done by means of a "Sources Sought" Synopsis in the Commerce Businem Daily. After receiving the RFPA, the DC will arrange to have the notice printed giving the general outlines of the area of work in which NRC is interested. Firms will then be allowed an opportunity to respond with a summary of their qualifications, if no response is received to the CBD notice, or if the responses indicate that the firms do not have the requisite basic qualifications to compete, this will be taken as evidence to support the JOFOC. (d) Conduct of the Procurement Step 1 The SEP drafts a procurement request in accordance with the guidance in the NRC Procurement Handbook. The RFPA is submitted to the Contracting Officer by the Director of the requesting office or his designee. Copies of the 1(FPA will be forwarded to the evaluation panel I members. Using that form, the Office Director or his designee notifies the Contracting Officer of the need for issuance of a t solicitation and supplies certain documents required for the solicitation package. , Step 2 ; A technical and cost proposal is solleited and received, from the sole source. The proposal is forwarded to the SEP for review regarding its technical merit, cost, etc. l l Step 3 The SEP submits a summary of its evaluation to the CO, together with any special provisions deemed necessary and appropriate for inclusion in the contract, including reporting requirements, etc. Upon approval, the Contracting Officer negotiates with assistance from technical and administrative staff as needed, obtains necessary reviews and approvals and executes the contract. (e) DOE as a Sole Source A DOE Laboratory may be selected as the source to perform the work required. In essence this is a type of non-competitive procurement which is neither awarded nor administered by the I. Division of Contracts. VI-l 9
Federal polley prescribed by OMB Circular A-76 states:
\ .
"The revised Circular (1) reaffirms the ) "
Government's general policy of reliance on the private sector for goods and services, while recognizing that (2) certain functions are inherently , governmental in naturv and must be performed by l Government personnel, and (3) relative cost must be given appropriate consideration in decisions between in-house performance and reliance on private > commercial sources. The balanced approach in this revised Circular is designed to achieve consistent polley implementation in all agencies, equitable treatment of all parties, and improved economy and efficiency in providing goods and performing services needed by the Government." j Within NRC therefore, a DOE Laboratory or another Government research organization may not be arbitrarily selected to perform work just because that particular activity has the capability to do l so. Selection criteria have been established and must be examined in making the determination. A justification must then be pre-pared documenting why the particular IAb was selected. This ; justification serves essentially the same function as a JOFOC for commercial procurements. A listing of the criteria which should be met in order to assign the work to a DOE Lab is listed below.
- s. The work by its inherent nature should be performed by the Federal Government.
- b. Objectivity demands that another Government organization be used to avoid a real or apparent conflict of interest with commercial sources.
I c.' Intentional duplication is necessary to draw on independent, impartial expertise to verify results previously obtained.
- d. A unique facility is needed that already exists and is available at a Government-funded facility,
- e. Large and//or special facilities and special equi;, ment are needed to accomplish the work and it is in the best interest of i NRC to place the work with a Government-funded facility.
i
- f. Success of the work is critically dependent on the use of a particular Government-funded facility and its equipment.
- g. Continuation of work pr.viously performed by a Government-funded organization is required and it would not be in the best interest of NRC to bring a new commercial entity to the point where performance of the new effort would be
; possib'.e.
I t j VI-20 1
- h. The desired technical background and knowledge exists only in a Government-funded organization and to go elsewhere would k- impede accomplishment of the task in a reasonable manner or time.
- i. Closely associated work under way provides the necessary unique background for placement of the new work, or work exists from which the new task is a logical extension.
J. Project results must be obtained by e. certain date, as mandated by Congress, the Comrhission or critical circumstances and there would not be time to permit solleitation of bids and the award of aTntract. Planning for research and technical assistance should, however, be accomplished sufficiently in advance to allow for the time legs associated with the competitive bidding process,
- k. There is need for the involvement of both a Government-funded organization and its contractor; however, "pass through contracting" to bypass the Federal procurement process is prohibited.
- 1. The work entails use of copyrights, patents, or proprietary information and the requirement cannot be revised to permit competition and open disclosure in the commercial sector.
This source selection justification, applying the above criteria, and l a descriptive summary of the project should be maintained in the project file by the responsible office and provided to NRC review groups when appropriate. Once the decision has been made and approved to utilize a DOE Laboratory, the acquisition process prescribed later in the text is applied.
- 3. Unsolicited Proposals Unsolicited proposals may become sole source contracts; however, acceptance of an unsolicited proposal does not necessarily dictate sole source contracting. The following steps are to be taken when NRC receives an unsolicited proposal which it believes to be worthy of support.
(a) Conduct of the Procurement l Step 1 An SEP will be used with unsolicited proposals and shall be responsible for VI-21 I i
. . _ _ , _ ~ _ _
_ , _ _ . ~ , __. , _ . _ _ , _ , _ . _ _ _ _ _ _ , _ _ - , _ . , _ . -
Preparing the justification for accepting an unsolicited propos-al, i.e., description of how the work relates to the program, documentation that the proposal reflects an new idea, why the I work should be supported, and otherwise conforms to the criteria and provisions of NRC Manual 5102. Preparing the contract Statement of Work and an abstract for publication in the Commerce Business Daily and/or for any internal purpose. Preparing all other documentation required for the RFPA. Step 2 After acceptance of the unsolicited proposal the SEP transmits the RFPA together with a justification for a sole source procurement to the DOE for review and approval. If approved, the DO transmits the RFPA to the Contracting Officer for approval and execution of a contract. Step 3 If the Contracting Officer approves, a contract is negotiated and executed with the assistance of program and administrative staff, as needed.
- 4. Procurement Set Asides Project Managers are responsible, in cooperation with designated contract specialists, to actively seek out and identify small and minority business sources, and to structure and tailor requirements to permit their participation. Each contract which has an anticipated value of $25,000 or less, and which is subject to competitivt small purchase procedures shall be reserved .
exclusively for small business concerns unless the contracting officer is unable to obtain offers from two or more small business concerns that are competitive with market prices and in terms of quality and delivery of the goods or services being purchased. For contracts in excess of $25,000, the Contracting Officer may set aside and shall make awards thereunder to small firms and labor surplus area concerns in accordance with a priority established by P.L. 95-89, as amended, as follows: e Small business firms in labor surplus areas, total set-aside. o Small business firms on a total set-aside basis, e Small business firms in labor surplus areas on a partial set-aside basis, o Small business firms on a partial set-aside basis, e Labor surplus areas firms on a total set-aside basis. I vi-22
- ,s..__ . . - _ . . ___.,_._____s -_ , _ .
Over 150,000 small businesses have registered themselves in the l' Small Business Administration's PASS System (Procurement Automated Source System). Project Managers should coordinate with the Small and Disadvantaged Business Utilization Office for sources. That office is equipped with an on-line "hook-up" to the PASS System.
- 5. Contracts under Section 8(a) of the Small Businem Act As amended by P.L. 95-507, the Small Business Act contains a program aimed at expanding the busines opportunities of soclahy and economically disadvantaged individuals. To accomplish this, the law authorizes the Small Business Administration (SBA) to enter into prime contracts with NRC and other agencies on a noncompetitive basis and to subcontract identified requirements to eligible socially and economically disadvantaged firms. The objective of this program is to bring eligible firms to a position where they are "viable and competitive." i NRC participates in this program through actions taken by the Director, Office of Small and Disadvantaged Business Utilization i (OSDBU) who coordinates the establishment of NRC goals and assists the contracting and program offices in identifying suitable procurements through the screening of current and prospective awards, and in participating in the review and evaluation of technical proposals submitted by eligible firms to the SBA. Since i SBA nornially delegates administrative responsibility for their subcontracts to the Agency, Project Managers often will i participate in the technical administration of these subcontracts in l the same way they would for an NRC prime contract. In this l function, however, those who interface with the 8(a) subcontractor l should be sensitive to the fact that their involvement is as agents j for the SBA and that resolution of problems in performance or the l exercise of remedies must be through both the NRC and SBA Contracting Officers. Project Managers are encouraged to contact OSDBU or the Small and Disadvantaged Business Specialist in the Division of Contracts for assistance in identifying appropriate requirements for which there may be prospective minority owned business offerors and for the resolution of any questions they may have about participation in this important program.
Only those businesses receiving SBA certification are eligible to receive Federal contracts through the 8(a) program. Under the statute, eligible individuals are those who are both socially and economically disadvantaged. Such individuals include, but are not limited to Black Americans, Hispanic Amerleans, Native 4 Americans, Aslan-Pacific Amerleans, and other designated l minorities. I i l VI-2 3 1 i
The 8(a) progt 'm offers several important advantages to program officials which nakes it an attra'etive means for meeting program requirements. e The disadvantaget status of firms in the 8(a) program has been certified by SBA. Furthermore, SBA will not certify and approve a company h the 8(a) program unless SBA can provide to it sufficient manags vient, technical and financial services to enable it to perform 8(a, 7ontracts. e The non-competitive nat re of 8(a) contracting permits considerable latitude in sele tion of a firm best suited to meet specific program requirement. . e The SBA furnishes guidance tt agency personnel in assisting procurement with 8(a) firms. St A helps locate a quallfled 8(a) firm, assists in negotiating contra ts, and is helpful in resolving administrative matters that arlss during the course of a contract. e The 8(a) procurement process is often shorter than other procurement processes, permitting program officials to quickly fill urgent program needs. There are several reasons for the shorter time requirements
- An 8(a) Procurement Request requires no sole source justification.
There is no requirement for preparation of a' competitive Request for Proposal including evaluation criteria and scoring procedures. NRC program officials and the 8(a) firm may hold ! discussions aimed at agreeing upon a statement of work prior to the preparation of a proposal. Competitive source selection and evaluation prior to negotiation of a contract is not required. e Contracts awarded to 8(a) firms are counted toward NRC's attainment of Small Business contracting goals.
- 6. Socio-Economic and Program Goals i
The programs described above are in competition, one with the j other, but that must be kept in balance and addressed without i jeopardizing the achievement of NRC requirements or exceeding l funding limitations placed on NRC programs. It is a challenging I task, but one about which all employees must be apprised to assist l them in helping to achieve various goals set for the Agency. There , also is a fine balancing act that must be performed by the ' Contracting Officer and the specialists assigned to serve as , advocates for these programs. ' VI-24 l
While greater visibility toward meeting socioeconomic program goals is with the Contracting Officer and the specialists assigned (' to each area of interest, there is a necessary cooperative effort that has to come from program personnel if these goals are to be. achieved. It is no secret to a scientist writing a requirement that it can be shaped to preclude participation by other than a specific performer through clever structuring of the requirement and the qualification criteria. But the converse also is true. The same requirement can be structured to maximize the opportunity for the breakout of a complex requirement into several tasks, some of which could be candidates for award to eligible small or disadvantaged firms. Indeed, success of socioeconomic programs requires a joint cooperative effort, and the Project Manager has an important role to play. Although these programs are mandated by law, they are often difficult to implement. For example, NRC encourages the consolidation of requirements in implementing the concept of mission contracting. While the efforts of both technical and contracting personnel are utilized more efficiently when consolidation is possible, the attainment of the goals for the programs described above requires actions that are frequently at odds with mission contracting. For instances e The structuring of the size of procurement packages to make them more suitable for performance by small, disadvantaged, or
- labor surplus area firms.
e The breakout of certain products or services to permit small and disadvantaged firms to participate, rather than having a single large prime contractor. The Project Manager shares in the responsibility for meeting socioeconomic program goals and must participate actively towcrd their achievements first, by becoming familiar with the specific goals NRC has been assigned; second, by identifying portions of work suited for performance by firms that can assist in meeting the goals; third, by actively searoning out emerging firms eligible for participation that may not be on a current bidders malling list; fourth, by participating in public forums at which qualified small and disadvantaged firms have an opportunity for free exchange in discussing the matching of their capabilities to NRC needs; and lastly, by keeping open the channels of communication with the , specialists who serve the Administrator in coordinating activities - to assure that NRC will meet its goals. !
- 7. Other Programs
- a. Women's Business Enterprise 1 In accordance with Presidential Executive Order 12138, Federal g Executive Departments and Agencies are required to take affirmative action which may incluae, but is not limited to:
VI-25
creating or supporting new programs responsive to the special needs of women's business enterprise; establishing incentives to promote business or business-related opportunities for women's enterprise; collecting and disseminating information in support of women's business enterprise; and, insuring to women's business enterprise knowledge of and ready access to business-related services and resources,
- b. Subcontracting Public Law 95-507, in addition to providing legal grounds for the 8(a) )rogram and mandating the establishment of the OSDBU, also contained provisions concerning subcontracts for small and small disadvantaged businesses. The FAR requires that each prime contract awarded for $500,000 ($1,000,000 for construction) submit a subcontracting plan.
If a subcontracting plan is required, the successful offeror will be required to submit to NRC his program for ensuring that small and small disadvantaged businesses have the best possible chance at being awarded a subcontract for part of the work to be performed. The plan must include percentage goals for small and small disadvantaged businesses and details of the program to be established to assure that they get a reasonable opportunity to obtain those subcontracts. Although the evaluation of these plans is primarily the CO's resoonsibility, the SEP may be called upon to help evaluate the offeror's assessment of subcontracting opportunitics. Technical knowledge of the work and potential small and small disadvantaged sources for various aspects of the job can be important factors in determining whether the offeror is complying with the requirement to provide the maximum practical opportunity for eligible subcontractors. it should be noted that the subcontracting plan requirement is addressed after the apparent successful contract has been selected. Although a firm may be in line for contract award, i the failure to submit Gn acceptable plan could invalidate , contractor selection decisions initially made. J. Locating Sources of Supply The Contracting Officer's responsibility for obtaining competition is set forth in FAR. The requirement is straightforward. All purchases and contracts, whether they be by sealed bid or by negotiation, are to be made on a competitive basis to the maximum practicable extent. The Contracting Officer must seek to obtain full and open competition. This requires that all responsible sources are permitted to compete. I 1 l l VI-26 I
Notification of a Government requirement may be made through the use of free pubileity. When free
- space is made available by t, newspapers or trade journals, a brief announcement may be made I regarding the proposed acquisition. Paid advertisements may be used whers authorized by NRC. ;
The development of a solicitation malling list is a critical activity with respect to obtainli;g sources for supply. Lists are established by ; contracting activities covering each of the major categories of goods ! and services which the activity buys on a regular basis. Whenever an , agency considers a firm to be capable of filling the requirements of a ' partleular acquisition or when an organization submits a Solleitation ( Malling List Application, the applicant should be considered for ! inclusion on the agency's list. When a firm falls to respond to an invitation to bid or pre-invitation notlees, its name may be removed L from the bidders malling list for the partleular item (s) or service (s) i' involved. The name of a firm is also removed from the list whenever ' It is included on the list of firms debarred from entering into contracts with the Federal Government. l Proposed acquisitions normally must be synopsized in the Commerce Business Daily. The purpose of this Department of Commerce publication is to provide industry with timely information concerning Government contracting and subcontracting opportunities and to ,
! foster competition. The notification published in the CBD identifies !
the location of the Government Contracting Office having a potential ' need, or, where applicable, the location of the prime contractor having l a potential need for products or services. Prime contractors and ! subcontractors are encouraged to use the CBD for publicizing t subcontracting opportunities. These organlNions are authorized to i mali subcontracting information directly to the CBD. All proposed [' acquisition actions of over $25,000 are to be published as soon as possible after the need for a contract is established, but never less : than 15 calendar days in advance of the issuance of the solicitation, i Advance notice of Government interest in acquiring certain types of f work must also be published in the CBD. These frequently include , special services such as research and development, personal, i professional, architectural, or engineering. All of these provisions and requirements with regard to the synopsis of - Federal acquisitions are directed toward expanding the competitive i base and ensuring that all poter)tial contractors are given an equal opportunity to compete for awards. The synopsis procedures are singularly important in this regard in that the Commerce Businem Daily is a readily obtainable, single, comprehensive, timely, and well-known source of opportunities for participation in Federal . j acquisitions. Any potential competitor, whether contained on NRC's bidders list or not, is therefore able to learn of any of NRC's requirements. i VI-27 i
CHAPTER VII- PROCESSING THE ACQUISITION A. Introduction VII-l B. Content of the RFPA VII-l
- 1. Type of Action VII-l
- 2. Project Summary VII-2
- 3. Management Considerations VII-2
- 4. Cost Estimating and Funding VII-3
- 5. Statement of Work VII-4
- 6. Technical Evaluation Criteria VII-4 C. Competitive Procurement Milestone Schedule VII-4
- 1. General VII-4
- 2. The Planning Process VII-5
- 3. Schedule Reviews VII-5 D. Source Evaluation Panel VII-6
- 1. Overview VII-6
- 2. Presolicitation Functions VII-6
- 3. Functions After Solicitation But Prior to Receipt of Offers VII-6 ,
- 4. Preproposal Conferences VII-7 i S. Solicitation Amendments VII-7
- 6. Evaluation and Award VII-8 E. Technical Evaluation; Source Selection VII-9
- 1. Introduction VII-9
- 2. Technical Evaluation, Commercial Firms VII-9 STEPS AND RESPONSIBILITIES IN THE ACQUISITION PROCESS VII-33 F. Use of DOE National Laboratories VII-35
- 1. Introduction VII-35
- 2. DOE Labs and the Nature of the Lab Agreements VII-35
- 3. Regulations VII-37
- 4. Seeking a Source - DOE vs. Contract VII-38
- 5. Procedures for Placing Orders VII-40
- 6. Evaluation, DOE Proposals VII-44 Government Evaluation Checklist VII-47
l THE PROCUREMENT PROCESS DETERMINATION TNAT THE REQUIREMENT IS SurTABLE FOR CONTRACT 4 PROCUREMENT PLANNING 4 DESCRIBING REQUIREMENT (WORV, STATEMENT 1 4 DEVELOPING SOURCE LISTS Er/OR EVALUATION CRITERIA 4 DEVELOPING REQUEST FOR CONTRACT
- 11. SOUCTTATION PREPARATION OF REQUEST FOR PROPOSAL
& AWARD IRFP) OR INVITATION FOR BID (IFBI 4
SOLICITATION Commerce Business Daily Pre-Qualifications issuance of RFP/lFB Preproposal Conference 4 RECEIPT OF PROPOSALS / BIDS 4 . EVALUATION OF PROPOSALS / BIDS 4 SELECTING SOURCES FOR NEGOTIATION Determining Sources in Competitive Range Negotiations with sources in Competitive Range Site Vrsit as Necessary 4 AWARD fil. POST AWARD MONITORING PERFORMANCE ADMlWISTRATION ISrTE vlSITS) - 4 TECHNICAL DIRECTION 4 PERFORMANCE ACCEMANCE 4 FINAL CLOSE OUT l
VII. PROCESSING THE ACQUISITION ( A. Introduction Contracting is essentially a management function. The elements of good management are also the elements of good contracting. The techniques of good contracting are very similar to those used in the technique of Management by Objectives. This tends to apply both internaby in the relationships among offices of the NRC and e.v.ternally between the NRC and the contractor. - The first sten in a Management of Objectives approach is to set forth ths goals thr.t are to be achieved. In the pure management context th% is done by a supervisor who has some control over the employee. In the contracting context, it is done between essentially equal units Of a pegtram office and the contracts office. , tr Mrn:s of a single procurement action, the first step in establishing
. nt61ves is the development of the Request for Procurement Action.
.b.s is the responsibility of the Designating Officer.
Du tne objectims established are, as in the Management by M;jec tives approach, subject to negotiation between the partie: r.<cived. 'the SSP and the Division of Contracts (DC) must discuss e t d then agree to the objectives to be set. There aru several tools 394 for thl; ourpose. But among the most critical ones is the use of ( the Milestone Schedule by which objectives for timeliness, which is a et!tical factor in contracting, are agreed to. B. Content of the RFPA W; thin the NRC the Request for Procurement Action is submitted to the Division of Contracts on NRC Form 400. A number of elements mu:t he considered by the SEP in the preparation of the RFPA.
- s. Type of Action Blocks 3, 9, and 10 of the RFPA deal with the type of action to be t'txen by the Division of Contracts. The procedures to be followed by the Division of Contracts depend on the information supplied.
The SEP must indicate whether the proposed notion is to be a coMract modification, a new award, competitive or non-competitive, or other actions that may be needed. In the case of a new competitive awar:1, the SEP must indleate whether or not, in their opinion, the requirement can be set aside for small businesses or labor surplus area concerns. This requires analysis of both the nature of the requirements and the potential competition which would be generated for the action. The key point in this deelslon is whether there is a strong probability that VII-l
restricting competition will produce the necessary quality of research type work and a reasonable price, no matter what is being bought. In some cases, a non-competitive contract may be earmarked for the 8(a) program. This should be done whenever the SEP is aware of a certified 8(a) firm that can perform the work at a reasonable price. An 8(a) firm is defined as a small disadvantaged business which has been certified as such by the Small Business Administration. Management directives concerning Commercial and Industrial Type Activities (OMB Circular A-76), Automatic Data Processing, and Consultant Services also affect the contracting approach. The applicability of these directives and compliance with them must also be indicated in block 10 of the RFPA. In each of these instances, the entries on the RFPA will determine the steps that need to be taken by the Division of Contracts to make an award. The entries made, however, are not final. The Division of Contracts has certain objectives set by statute, regulation and management which must be met. The recommendations of the SEP will be reviewed. If the DC questions the advice of the SEP, this will be discussed later in the planning process.
- 2. Project Summary 4
Block 9 of the RFPA requires a 50 word summary of the work to be performed. The 50 word limit is flexible. More can be used if necessary. This summary serves a useful purpose in the contracts process. Every contemplated award (with some few exceptions) must be publicized in the Commerce Business Daily. This requirement applies to both competitive and non-competitive contracts. The purpose of the synopsis is to enable prospective sources not on the initial mailing list to become aware of NRC contract needs. In a non-competitive contract, it gives firms of which NRC is not aware an opportunity to show that competitive procurement is possible. The project summary is used as the basis for the synopsis in the Commerce Businem Daily. Itaving it done properly at the outset can save time in the contracting process.
- 3. Management Considerations Block 11 of the RFPA requires certification that the initiating office has checked to be sure that this proposed action does not duplicate other work being done by the NRC. For actions over
$100,000 this must be coordinated with the Contract Review Board prior to subminion of the RFPA, unless there is a situation of urgency, in which case the certification of the Contract Review Board can be obtained later if the DC has approved it.
VII-2
Block 12 contains a list of attachments. Several of those are related to management concerns such as the Controller's Approval ( of an A-76 Determinat8.on, justification concerning acquisition of consultant services, and any other special requirements. Among those special items are information about the need for proprietary data, patents, and copyrights, Government-furnished property, graphics, meeting and reporting requirements. Block 16 is for the approval of the Director or his designee. This is the indication of who the Designating Official will be for this action. Although the day-to-day work on any given contract will be done by the SEP and a Contract Negotiator, the DO and the i Contracting Officer are the individuals who have approval ' authority over the technical and business aspects of the proposed contract. , The individuals who will serve as the SEP must also be listed in an attachment to the RFPA. The Project Manager must also be designated in Block 15. All of these appointments for technical responsibility must be carefully considered to ensure that the necessary ter.hnleal expertise has been identified and applied to the action and that the people involved will be able to carry out their functions in a timely manner. If the award is to be competitive, a list of known sources must be attached. This may be supplemented by the Division of Contracts or on the advice of small and disadvantaged business personnel. If the contract is to be non-competitive, information to support a JOFOC must be attached.
- 4. Cost Estimating and Funding No contract may be entered into unless funding statutes are complied with. Before funds can be obligated for any purpose, a certification of funds availability must be obtained. Although the NRC calls for a certification that funds are available in the current budget, this is g strictly necessary at the time of the RFPA.
Where it is highly probable that funds for a given project will be available during the next fiscal year, the Division of Contracts encourages program offices to submit requirements in advance. The legal requirement is that no contract may be awarded unless there is a certification of availability of funds. This in no way precludes soliciting and obtaining offers or even selecting a source before the funds are available. If a project is of sufficiently high priority, the Designating Officer may forward the RPPA in expectation of later appropriations. In order to obtain funds, the SEP should develop a cost estimate for the project. A key point must be noted: funding should be based on the cost estimate - not the other way around. The SEP must arrive at its best estimate for contract costs either by un i VIl-3
engineering type analysis (building up the estimate based on the details of the work to be done),*past experience (what it cost for : some similar project as adjusted for inflation and differences in the SOW) or some other method. If cost estimates are too low, delays k can be experienced in the contracting process while funds are found to cover the difference between the best offer and the amount available. If the difference is too grut, the entire action may have to be cancelled or deferred. {
- 5. Statement of Work Chapter 11 covered details of the development of the Statement of Work. This is the key element of the contracting process since almost everything else directly depends on it. Although the RFPh i has a block for the Period of Performance or Dellury Schedule (Block 5) this is really a part of the SOW. The same is true with repo:' ting requirements which are listed in an atteschment to the RFPA. The SOW will also affect the selection of contract type which should be recommen,Jd in Block 17 for Remarks. The '
Contracting Officer must make the final decision on the type of contract, but the recommendation of the SEP is extremely valuable in making this determination.
- 6. Technical Evaluation Criteria Section E of this chapter covers details of the development of Technical Evaluation Criteria. These criteria set forth the :
objectives of the SEP for proposals. They state the factors that will be used to judge contractor submissions. Closely related to the criteria are the instructions to offerors conceming the structure and content of proposals. C. Competitive Procurement Milestone Schedule j 1. General There are a number of steps that must be completed before a , emitract can be awarded. Time is a critical factor in the management of the contracts process, it is crucial that plans be made *.. ensure that each of the necessary steps can be completed before the date on which an award must be made. Proper planning is therefore at a premium. Lead time for contract actions often seems excessive to program personnel. Often it is excessive - but this is sometimes caused not by any flaw in the process itself '?ut by a failure to plan actions in a reasonable fashion. The Competitive Procurement Milestone Schedule has been developed by NRC to serve as a management tool. Through it goals are set for processing various actions. Delays can be readily identified and the causu assessed. Where necessary, remedial action can be taken to put an action back on schedule. VII-4 i
.__ , _ _ _ _ - _ _ _ , _ , - _ _ _ _ _ _ _ - ____,_m__ _ _ _ _ _ ,___.__,.m-__
d
- 2. The Planning Process
( After the RFPA nas been received in the Division of Contracts, a contract negotiator will be assigned to work on the action. The contract negotiator will schedule a meeting with the SEP Chairman to go over the schedule. Speelfic dates will be l assigned as goals for the major steps in the process as listed on . the Competitive Procurement Milestone Schedule. l Each milestone should be considered in light of the individuals ) who will be responsible for each action. Although the current , schedule does not indleate responsibilities, these ought to be t i listed along with projected dates. The reason for this is simples l people must coordinate their schedules for other work with >
- activities on this contract. There is a temptation to deal with each step in the abstract. For example, one week may seem 4
more than suffielent to evaluate relatively simple proposals. '
, Everyone may agree to that. But 't one of the people on the SEP ;
l is scheduled for leave ce travel for participation in another !
- evaluation at the same time, something would have to slip. By tying activities to people from the beginning, there is less danger ,
that confilets will go unnotleed and lead to delays. Similarly, the contract speelalist must review dates to be sure that the ! same time is not planned for extensive negotiations on two or more contracts. The schedule must be planned in light of the concrete situation and not some abstract set of elapsed times - if it is not, it will prove ineffnettve. l 4 ( t The contract negotiator and the Project Manager will draft the ; proposed milestone schedule. But before it is finalized, it must ; j be reviewed by all memoers of the SEP to ensure that it is
- consistent with their schedules and realistic in light of all commitments. ,
j 3. Schedule Reviews 1 i The Milestone Schedule is a management tool for both the l Contracting Officer and Designating Officer. During the contracting process, the actual dates for the various milestones , ! will be recorded on the form. If there is a variance between ' $ projected and actual dates, management action will be taken to ! determine the cause. I { l These schedule reviews highlight the need for realistic planning j
- at the outset. Dates should be assigned and agreed to which are ;
- realistle and attainable. The schedule should contain some time i i in the form of a contingency anowanee at various stages of the l l process. Wherever possible, actions should be taken to get ahead l of the planned milestones. This will add to the management i
! reserve in the case of difficulties. l VII-5 l J I ! i i
- - ~ , - - . . - - - . . - - -.-
-- N
_-= . _~ - . -_ _ .- - -_-. _ - . - . i 4 D. Source Evaluation Panel j 1. Overview The Source Evaluation Panel (SEP) consists of those Individuala : selected by the Director of an Offlee or his designee (the i l Designating Official) to provide technical input in the i contracting process. The Contract Negotiator works with the SEP as a non-voting member to assist and advise at various stages of the contracting process. ;
- 2. Presolleitation Functions I The SEP participates in the drafting of the RFPA including the Statement of Work, the Technical Evaluation Criteria, the ,
i proposal instructions and the cost estimate. Members of an SEP ' should always look ahead to later steps in the contracting process as they work on a task at hand. The drafting of the ; j SOW, for example should censider both proposal evaluation and . j actual contract performance. When drafting evaluation criteria ! and proposal instructions, the SEP should consider the impact n
- these items have on the potential competition. l 1
l 3. Functions After Solleltation But Prior to Receipt of Offers l t i General After the Contracting Officer has issued the solicitation, i members of the SEP should not discuss the RFP with any person ; who does not have a need to know about the process. There i should be absolutely no communications with potential offerors about the RFP except as required by the Contracting Officer. i i i j Every potential offeror is looking for a way to get ahead of the ! i competition. They all know that they should not attempt to i 1 mine the SEP members for information. But even the most ; 4 ethical of contractors win try. At the very least they will test l the technical personnel of the NRC to find out if other '
- companies might be getting inside information. The best answer to a contractor's inquiry about pending work is to say that you ;
I' are not permitted to discuss any pending contracts. Do not even ! confirm that you are a member of the SEP. If you do, the l contractor will go into his files and find out what things tend to l j please you in proposals rather than attempting to lay out the j best approach. Even if you are g a member of the SEP, do not . talk about RFP's assigned to others. Once again ycu will l i introduce a bias into the proposal on the presumption that you i i must rave some inside information just from being in the same ; offlee. I . j ! I
! VII-6 !
I ( l I ._ ._ . _._-__ _ -_ _ ___ ___ _ _._ _. i
If there are questions which must be answered by technical personnel, they should come through the Contracting Officer. Tell offerors to go to the Contracting Officer and the proper ( person will answer through the Contracting Officer.
- 4. Preproposal Conferences The one time that technleal personnel should discuss RFP's with potential offerors is at a preproposal conference. The purpose of i such a conference is to inform offerors of unusual aspects of '
requirements and to help clarify areas that may be unclear. , j If the SEP has reason to believe that potential sources will need l some clarification about the RFP, they should indicate the need for a conference in the RFPA. Potential offerors will be given notice of the conference in the RFP. They will be encouraged to . review the requirement and to submit questions in advance. This 1 will allow for time to prepare a proper answer. Questions which I 1 arise at the conference will be answered in addition to the I written questions received. ! 1 The conduct of the conference should be controlled by the , Contracting Offleer. This is to ensure compliance with the 4 procurement regulations. After the conference is completed, a report will be prepared which will be distributed to all of the firms who received copies of the solleitation whether or not they i
- attended. The goal is to provide complete information to ?very ,
4 ( potential offeror. 1 The conference itself and the conference report do not secve to t j officially amend the RFP. If the need for changes to the SOW, evaluation criteria, or any other portions of the RFP becomes ; j known, this can only be accomplished by a formal amendment ; i from the Contracting Officer. ! 5. Solleitation Amendments , t , Despite all of the reviews to which an RFP and its elements are ! i subjected, one sometimes goes out with problems in need of ! I correction. Flaws can be discovered by internal analysis ! ! (sometimes the NRC may simply have changed its mind), through j a preproposal conference, or through questions raised by individual offerors to the Contracting Offleer. When the need to i f make any substantive change is noted, a revised RFPA should be l 1 sent to the Contracting Officer stating the need for the >
- amendment. The Contracting Officer will then process the i j required forms to make the amendment offiela1. l 1
! One decision that has to be made in amending an RFP is whether ! it will. be necessary to allow more time for the submission of ' l proposals. l VII-7 1 4
= : == - - - - -
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i i . i i I As a general rule, the due date for proposals should be edended 4 whenever any segment of the potential offerors would be un.sble ) to give the changes sufficient consideration prior to having to s , submit their offers. , If the amendment is minor (i.e., it would not change the likely ; scope of competition, and proposal modifications in response to j l , the amendment would not be likely to alter the competitive ! J range) there would normally not be a need to extend the due i date. Even an amendment issued as late 'as three or four days ; before proposals are due might not merit an extension. This > i would be the case, for example, if the reporting requirements ; were changed to add one extra copy or to alter the format. Such ,I a change would not be likely to affect the substance of the precurement action. On the other hand, a change to delivery schedities (in either direction) is very likely to merit an extension to the proposal preparation period. Earlier delivery presents a different set of management problems which might have to be addressed in the l proposals. Later delivery might be sufficient to induce a : proposal for an additional offeror who could not meet the initial 3 schedule. Whenever an extension is warranted, enough time ! should be provided for offerors to give a realistle response to the requirement as changed. l f Not all information provided to offerors requires an amendment , to the solicitation. If the contracting officer forwards a I { question to the SEP a prompt answer should be returned. Many + 4 times questions from offerors will merely be asking for l 2 confirmation that the RFP means what it says (e.g., "is the first i deliverable item really due two weeks after contract award"). l 'l These questions can be answered without notlee to the other ! ! potential sources. l t But they must be answered through the Contracting Officer, i There should be no direct communleation between panel ] members and contractors about the RFP. And even such ! 1 l - Innocent questions should be analyzed by the SEP to determine if an amendment might be appropriate. Maybe two weeks is too l l short a time for the first deliverable. The fact that some
- offeror raised the question could be an indication that the short I time period creates unnecessary difficulties and could unduly i restrict competition.
I j 6. Evaluation and Award \ j Chapter V discussed technical cN1uation and source selection to l a significant degree. It will not be repeated here. The SEP has a j significant role to play in this step. The objective should be to ! arrive at a recommendation for award to that contractor who will best serve the needs of NRC for the most reasonable cost. ] i i i VII-8 i I l
E. Technical Evaluation, Source Selection i
- 1. Introduction Once Requests for Proposals have been issued, the Project Manager must prepare to review the propostas which will be received, recommend a definite source, and insure that the price is appropriate. Adequate staff assistance is available to insure this is accomplished. Deoendent on which route was pursued initially, some of this work has ten accomplished.
e If the commercial route was selected, a formalized evaluation will occur of all proposals, and preparation for formal , negotiation will begin. e if a DOE route was selected, an evaluatn is required; however the source has already been selected. A cost evaluation must be made. e If a non-DOE Governmental source was selected, the same actions as for DOE must occur. This Chapter examines how technical evaluations are accomplished, how a source is selected when the commercial market is utilized, and l describes some approaches to evaluating costs proposed.
- 2. Technical Evaluation, Commercial Firms (a) Introduction Although the content of this section is devoted to a discussion of evaluating offers from Commercial organizations, much of it is appropriate for application to the evaluation of Government agency proposals.
The Federal Acquisition Regulation provides that: Each Request for Proposals shall state the relative importance of cost or price, technical
- considerations, and other factors for purposes of proposal evaluation and contract award.
Numerical weights which may be employed in the evaluation of proposals may be disclosed in ! solleitations." , The selection of such factors is primarily the responsibility of technical personnel since they are the ones who know the relative importance of various factors to success of the
- program. If these factors are not properly selected and weighted, there is a substantial chance that the contractor selection will not really reflect the best advantage of the NRC.
I e VII-9 - 1
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The Comptroller General has stated that:
"Intelligent competition requires, as a matter of sound procurement policy, that offerors be advised of the evaluation factors to be used and the relative importance of those factors. Each offeror has a right to know whether the procurement is intended to achieve a minimum standard at the lowest cost or whether cost is
! secondary to quality. Competition is hardly I served if offerors are not given any idea of the relative values of technical excellence and ' price." (52 Comp. Gen.161,14C.G.394) i The same principles apply when censidering the relative value of individual criteria to be applied to technical proposals, i Intelligent competition demands that offerors be advised of what the Government considers most important so that they can apply ] j the proper focus in their plans for secomplishing the jobs which are reflected in the proposals received. The choice of these factors is a technical deelston that must be made by the Source Evaluation Panel (SEP) and approved by the Designating Officer (DO). The selection and weighting of factors must be done on a case by case basis L'. light of the , speelfic features of the contract action. The Contracting Officer is then responsible for ensuring that the criteria do not ) unduly restrict competition. The Contracting Officer's review ( can also help to spot vagueness, inconsistency, omissions, or , ! other problems in criteria even though he or she may not be technically skilled. l z l The SEP may know what they are looking for. But unless this is i
- clearly conveyed in the criteria, the proposals received may be i
- misdirected. Remember also that only the criteria as stated in l 1 the RFP may be used to assess the relative merit of proposals.
j If some other factor is used, no matter how important it really is, without notice to the offerors, thera is a real risk that the j award could be overturned on a protest to the General , Accounting Offlee or the General Services Board of Contract l { Appeals, as appropriate. l (b) Choosing Criteria i l j (1) Commonly Used Criteria i There are a number of categories that often show up in l technical evaluation criteria. Among the most common are: l l e Understanding of the work to be performed i
- l j VU-10 t
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,____.________m.,__.,,___,r,_..,_.--. , - - . . . . , , - -
-- - . _ - . . -. - - --_- . .. .=_ . - - - _ . . . - -
r 1 e Technical approach or methx$ ology e Qualifications of Key Personnel e Experience of the Offeror ; e Facilities ) e Management l From among this list (and others that may be needed in a i specific situation), eriteria should be selected whleh reflect i those factors most likely to affect the relative ability of offerors to perform successfully on this job. Depending on the , i situation, a speelfic item in the list may not be necesary or may ]' carry very little weight. The factors whleh will be important in l any instance depend most on the natuen of the work to be l performed. l 6 ! (11) Purpose of Criteria ! g Remember, the key point is relative value. Only those ! J items which can be used to answer a question of which ;
! proposal is better among acceptable proAesals belongs in the !
l technical evaluation criteria. Aspects of the offeror's j organir,ation or plans, no matter how important to success, j which can be assessed on a simple yes or no basis should et ! j ' be listed. Such kreas are more appropriately handled under j 4 the heading of contractor of responsibility as discussed ; below. { l (iii) Relationship to the SOW l j One key to selecting proper criteria is the level of detail of J tha statement of work. If all tasks and methods are spelled i ! out in the RFP, then factors related to the offeror's l likelihood of accomplishing the intended results are most l l relevant. '.nis would tend to be measured by qualifications ' and experience of both personnel and the firm. i Understanding the problem and technical approach would i ! not tend to yield meaningful distinettons since the SOW j would already have foreclosed the decisions whleh might be j affected by the contractor's understanding or methods. i' On the other hand, if the requirement is stated in terms of performance rtandards with the methods being left open, then methodology is likely to be important. In 5 statistleally-oriented work, for example, the pree ss of sample selection is often cruelal to sueeen of the project. If the NRC expects the offerors to show methods of 1 selecting samples in the proposal, then methodology would carry a very high weight. But if such decisions would have VII-11 l
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- - . - . - ~ _ . - -- - = _ - - - - . - - .
4 l L 1 to be made during contract performance, there would be no detailed description in the proposal. And in that instance, , understanding of the problem (as measured by an t appreciation of the factors that should be considered in selecting methods) would be properly included as a highly [ weighted criterion. ; Similarly, background and experience may be important to ! success and may be a source of evaluating relative value of ; , proposals. In deciding on specific criteria and weights to be j l assigned, it is necessary to consider whose work will be i critical to succom. If the project is essentially a "one man ! show," then the qualifications of that key individual will be j critical. This is often the case in research work where the i 1 ability of the principal investigator is the key to success. ! On the other hand, if succes depends on'We efforts of many j ! persons throughout an orTanization, then the experience of r 1 the offeror's organization and/or management plans are j likely to be most important. For example, this would be the case if the requirement were for computer programming against a well defined speelfication. The best assurance of ! succes would be a recore of past succes by the firm since -. that would indleate that they already have, or are able to j j obtain, the many individuals required with the proper skins 7 and that the firm is able to manage such efforts properly. ; l i i Remember, the evaluation criteria win be used by offerors ; i to focus their proposals. If the wrong criteria are selected, ! ! or if they are improperly weighted, the offerors win ten you { ! what you seem to want to hear rather that what they think l (or know) is rerJ1y important. The job may only require that ! l many people within the orgianization have minimum skills l j but if the criteria put weight on the qualifications of key j personnel the offerors will load up the project with "hot l shots" whose skills would be wasted in the effort. J (c) Writing Criteria { I a The technical evaluation criterna should be stated in evaluative ! terms. There should be a clear indication of what is being !
- measured by each criterion. (
r 7 l Remember, offerors will propose. as much to the criteria (or i i more) as they will to the Statement of Work. If they are vague ! l or inconsistent, offerors will try to exploit that to their [ 1 advantage. The quality of proposals is a direct funetton of the j criteria expremed in the RFP. Making sure that one induces ' meaningful responses is not an easy task. Criteria which are
- legally suffielent can still be weak in their presentation. For
! example, consider the following sample taken directly from an ! 1 actual NRC RFP and the improvements suggested below: : r d' I f I VU-12 l 1 i
- _ - _ - - - - .- _ -_ - - -_=-_ _ - . - _ . .. .-
"Technical Approach
( (i) Extent the proposal reflects the offeror's understanding of the re points)quirements as set forth in the Statement of Work (25 (11) Ability to analyze complex financial policy issues, including but not limited to, the use of cost-benefit and sensitivity analysis techniques (25 points) (iii) Understanding of the financial alternatives for nuclear reactor decommisioning (20 points)" This statement could be improved in several ways. First, the categorization of all these items under "Technical Approach" is misleading. Second, the items are vague. Third, the terminology used is descriptive instead of evaluative. These same factors could be more appropriately stated something like the following: Understanding of the Problem (20 points) Proposals will be evaluated on the degree to which the discussion of nuclear decommissioning alternettves 1 reflects the known finanelal advantages and ; j disadvantages of the financial alternatives identified in ; the project background,
' t Qualifications of Key Personnel (25 points) ;
]( Proposal will be evaluated based on the experience of ! ,' key personnel identified in the proposal with the application of cost-benefit, sensitivity analysis and other techniques proposed for use by the offeror. The relevance of past experience to the Nuclear Power Industry will also be asemed. l Technical Approach (25 points)
- Proposals will be evaluated based on the appropriateness of analytteal techniques to be used in a assessing each of the questions posed in paragraph A2, B2 and C3 of the Statement of Work. The feaslHlity of obtaining consistent data needed for each proposed analysis from a representative sample of utilities will
; also be asemed. , Lacking the statement of work it is not strictly possible to prove ! that the revised criteria would actually measure proposals correctly. Nonetheles, an analysis of the changes made does t indicate the potential for improvement over the initial set of criteria.
l( - ) VII-l 3 1 1
For example, it is significant how one intends to measure "the ability to analyze complex financial issues." If this is measured by the written technical approach only, an offeror could score well by presenting information out of a book on each technique, whether or not the firm, or anyone assigned to the project, was quallfled to apply it. If this is to be measured by the experience of the firm, then that should be made clear. The sample improvements presumed that key people would be the proper measure - corporate experience might actually be better. The specific determination would have to be made in light of the individual situation. But as originally stated, offers could be submitted focusing on any of these three possible measures. The evaluation results could therefore be highly inconsistent from proposal to proposal. Further, none of the three suberiteria originally listed actually focuses on technical approach despite the heading. The first and third items are matters specifically of "understanding" and the second seems to deal with experience. In the rewritten versions, the "Technical Approach" criterion is specifically tied to the offeror's plans for doing the wc k. This is far more definite, and ' therefore more likely to generate a meaningful response from offerors, then the vague statement of "understanding the requirements in the Statement of Nork." Besides, the initial criterion promised to award points for the volume of the offeror's understanding whether or not it matched the understanding of the NRC. Obviously, proposals would not be evaluated that way - but that is what the criteria say. Finally, the sample set of criteria omitted two other factors originally stated: Related Past Experience (25 points) and Management Plan (5 points). The rewritten criteria indleate that there may have bcan a duplication in the original set. Ability to analyze issues is almost certainly best measured by past experience in handling similar problems. If this is what was intended (which is not clear from the original vague statement) the actual weight assigned for experience is 50 points - 25 under "Technical Approach" and another 25 under "Experience." The discipline of starting what aspects of the proposal will be evaluated under each criterion helps to eliminate such duplication. (d) Weighting Criteria (i) General in the preceding section, the sample criteria include numerical weights. It is NRC policy that such weights will be shown in the RFP. Normally a 100 point basis will be used but any number will work since the final result in evaluation will be a set of relative scores that could be reduced to 100 points by simple ratios. VII-l 4
-M - + ,_ <a _ &..
(ii) Applying Weights ( Giving a numerleal weight to aspects of a qualitative evaluation is necessarily imprecise. This is a highly judgmental area. No single approach will be best in all circumstances. The goal of establishing criteria is to facilitate meaningful distinctions among proposals received. The numerical index applied to each criterion is intended to balance the importance of factors against one another. The analysis used to select criteria in the first place will provide a good deal of information about weighting. In the discussion of the relationship of criteria to the Statement of Work, the focus was on the nature of the work. Where requirements were set forth in detail, factors such as experience of the firm and management planning were said to be likely determinates of proposal quality. And so on through other examples where understanding or key , personnel can be identified as primary. This is the first step in assigning relative values. The most important consideration in selecting weights is an assessment of the effects of accepting a proposal with l higher or lower quality in a given area. And this must be assessed in terms of project goals as perceived by the NRC. ( If a certain level of quality is essential, but enhancements over that are of relatively small value to the program, i higher weights would be p1 deed on aspects of evaluation that ! would yield safety in the selection process. But if NRC is seeking an advancement in the state of the art (especially if the change for such an advancement is worth a risk of total failure) then emphasis in weighting would be on "genius" factors. Speelfic application is then a matter of judgment in light of the project at hand. (e) Responsibility Factors Not Numerically Weighted i in order to perform any job, no matter how simple or routine, 1 there are certain basle standards which have to te met. There is always some minimum level of skills or background or facilities which is necessary. As projects become more complex (or more cruelal to the mission of the NRC) that minimum level becomes
- higher. If an offeror does not possess, and cannot reasonably obtain, the minimum capabilities required, NRC obviously does j not want to award that organization a contract to do the work.
In order to make sure that these absolutely critical points receive due consideration in evaluating proposals, it is important
- that they not appear in the weighted technical evaluation l ; criteria. Absolute minimum standards that must be met should i
l VII-15
appear in the RFP - but , they should appear either as requirements of the Statement of Work or in a listing of , minimum standards sepcrate from the weighted criteria. The types of items covered here include any factor that is defined by a simple "yes or no" answer. These are called "definitive criteria of responsibility" by the GAO. If the work i requires that the contractor have sterile facilities in whleh to ' conduct tests, then this is a simple yes or no. If they have such a facility then they can be considered for award. If they do not , have one (and cannot make arrangements to get one) then they ; cannot be considered for award. It does not matter whether they i have one or ten such facilities; but it is absolutely required that they have one. If these responsibility factors are included among the factors that measure relative technical merit, there is a danger that . high scores on other items might mask the failure to meet the , minimum standard. This could lead to a totally improper award, if the responsibility factors are included with very high weights, i this would not be possible. But in that case, the effective range of possible scores among acceptable proposals is artificially i i narrowed. Since proposals will be artificially bunched. This will . I tend to obscure the very technical differences that the criteria j , are intended to measure. ; The best solution is to set up the minimum standards as a : c screening device. Evaluation scores are not relevant if an ! I offeror falls one of the go/no go items. There is no absolute t requirement that criteria be designed this way. The General l Accounting Office does frown on pre-set minimum scores for acceptability (which is the effect of including go/no go factors ) 4 along with relative measures). But apart from any l ] considerations of GAO positions that might prevail in a protest ; 1 situation, experience has shown that restricting criteria to i measures of relative value tends to produce better results in i evaluation. { (f) Technleal Proposal Instructions The SOW informs offerors of what must be done. The technical evaluation criteria inform offerors of how their plans, as 1 i indicated by proposals, will be evaluated. Technical proposs! l Instructions are a bridge between the two. They inform the ' j offerors of the data that is needed to perform complete and consistent evaluation of proposals. l 1 The proposal instructions should clearly indicate what offerors { must submit to indicate their understanding of and com;,llence ' a with the SOW and the types of information that the SEP will be I looking for in applyleg the criteria. Although there are some ; , 1 I VII-l 6 1 {
basic instructions employed in NRC solicitations, the SEP should
< consider supplementing them if the particular situation calls for 1 it.
For example, resumes for key project personnel can come in widely varying leveb of detail. Most offerors have stock resumes which are tailored to the specific RFP. If there are no particular instructions concerning resumes, then many offerors will simply pull the general version out of the files. This can , lead to inconsistent results in evaluation. If the SEP will be looking for experience in performing the s>ecific functions assigned to the individual under the pro >osal, Lt is necessary to ask for that. Otherwise, the resume will list projects "worked
- on" or to which the person "made a significant contribution."
Neither of those statements conveys the detail needed for proper . evaluation. Consequently more detailed proposalinstructions are required. The same principle applies to other areas as well. If methodology is to be evaluated, what aspects will be considered? If the key item is statistleal sampling plan, then the RFP should ask for that specifically. If understanding the problem will be measurg.d by how well the contractor can { identify areas of technical uncertainty and provide contingency plans for dealing with likely areas of difficulty, this should be spelled out in the instructions. Effective proposal evaluation depends on the degree of consistency among proposals. Offerors I - should know what aspects of the work are of special concern and the level of detail that the SEP needs to eval". ate those. If the offerors know this, then there is less danger that a lucky guess by the proposal writer will artific! ally appest to improve the proposal or that an inadvertent omission will detract from an otherwise superior proposal. i (g) The Proposal Evaluation Process once proposals are received several steps are required before contract award. These steps ares l e initial evaluation by individual panel members e Review of Ratings by the Panel as a group e Development of the Competitive Range Report e Conduct of Written or Oral Discussions e Review of Best and Final Offers e Selection of a contractor e Debriefing i VII-17
The remainder of this section addresses this process. 1 (h) The Evaluation Plan , I a. General l l At some time prior to the actual evaluation of proposals, i the SEP must agree on the methods to be used to assess the l offers. This evaluation plan must implement the criteria as stated in the RFP. Ideally, the plan will have been , developed along with the evaluation criteria before the { ! Request for Procurement Action was submitted. In that i case it will merely be reviewed by the SEP before beginning ; evaluation. But if no plan was established earlier, it can be 9 l done by the panel immediately prior to evaluation. l i I I (11) Content i i There are a variety of approaches to evaluation plans. No : one way is always right. Remember, the SEP is about to embark on the diffleult process of turning qualitative . judgments into a numerleal score. This will always involve j judgment and discretion. De plan should be designed so , 1 that the judgments of the panel members are made on as I consistent a basis as possible. It is also intended to assure j that every member of the panel performs a complete l
; evaluation and looks for all of the same elements as tha l
! other panel members. , l ] 4 The plan Oould contain a system for scoring and a checklist ! of items other than numerleal scoring which must be !
- considered for the final report of the evaluation. These !
1 items are l I 5 reasons for assigning scores i 1
- a narrative description of strengths and weaknesses j a list of questions for clarification or points for 1
discussion ! I - a determination of acceptability i 1 ) (iii) Adjeatival scoring systems I J One of the most useful techniques for assigning scores is the i use of an adjectival rating system for each criterion being l evaluated. As Panel members read promis they do not ! really think in terms like "this is a 15 out of 25." What j comes to mind is that "this is a good proposal but it could be 1 much better." he purpose of the adjectival system is to allow panel members to think and evaluate qualitatively and l i ) j VII-18 1
,_,- . - _ _ , . _ _ . . , _ _ _ _ _ _ . _ . . _ - ~ . . _ _ , . _ _ _ _ _ _ . . . _ _ . _ - -
then at a later time convert the qualltative opinions to a numerical score. Two samples follow which indicate how such adjectives might be developed in different situations. { Sample Adjectival Rating System (Research Type Work)
\
1.0 Excellent The proposal meets all basic requirements and virtually assures enhancements that will contribute to an advance of technological understanding. 0.8 Very Good The proposal meets all basic requirements and appears capable of enhancements that will contribute to an advance of technological understanding, i 0.6 Good The proposal meets all basic requirements but is unlikely to generate any enhancements. 0.4 Fair it is probable but not assured that the proposal will meet all basic requirements. Deficiencies are minor or almost certainly correctable through discussions. Weaknesses outweigh strengths. 1 0.2 Poor The proposal could meet all basic requirements but only with substantial correction or improvement. There are significant deficiencies which may be correctable. Weaknesses greatly outweigh strengths. O Unacceptable Not addressed; merely repeats the RFP or so
- deficient that correction is not possible short of
! submission of effectively a new proposal. Note that, under this scoring plan, there is ample room for i distinction among proposals, it is possible for there to be large differences in numerical scoring between two offers - which clearly meet the basic need. Enhancements to base acceptability can be well rewarded to yield a meaningful J distinction among the proposals. This type of plan will tend to emphasize technical excellence in the scores assigned and is appropriate when technical factors clearly outweigh cost considerations. J i 1 6 VII-19 i
Sample Adjectival Rating System (Administrative Type Work) 1.0 Excellent The proposal meets all basic requirements and virtually assures enhancements that will contribute to success of the project. 0.9 Very Good The proposal meets all basic requirements and appears capable cf generating enhancements that will contribute to success of the project. 0.8 Good The proposal meets all basic requirements but is unlikely to generate any enhancements, 0.5 Fair The proposal will probably meet all basic requirements. There are defielencies which are minor and almost certainly correctable through discussions. Weaknesses outweigh strengths. 0.2 Poor The proposal may meet all basic requirements but only with substantial correction or improvement. There are significant deficiencies which may be correctable. Weaknesses greatly outweigh strengths. O Unacceptable Not addressed merely repeats the RFP; or so deficient that correction is not possible short of submission of effectively a new proposal. Note that, under this scoring plan, there is little reward for strengths or enhancements but a severe penalty in scoring for weaknesses or deficiencies. This type of plan is appropriate when the project goal is an assurance of minimum levels of successful performanse and i enhancements are of marginal value. Weaknesses of l proposals are clearly highlighted. Where price is to be an i important consideration, this type of system will tend to deemphasize small differences in technical quality among the better proposals and to focus attention on pricing considerations. The major difference between the two scoring systems is in I the point factor to be applied in relationship to the qualitative assessment. By establishing this sort of system, i the SEP members are relieved of the need to balanc the type of requirement against quality. That is taken into account by this system. The SEP need only deal with qualitative essessments. Once the adjectival ratings are assigned, then one goes back and fills in a summary sheet which will include the ratio factor for each adjectival rating (0.6 for a good proposal in the first sample and 0.3 in the I second). This will then be multiplied by the criterion weight to yield a score. For examples, , VU-20
I i Criterion Weight Rating Factor Points l , (' Understanding the Requirement 20 good 0.6 12 One question that the panel must settle before beginning evaluation is whether only the basic adjectives (and therefore the "round" conversion factors) will be used or that interpolations between factors be allowed (e.g., this , proposal is "fair plus and should get a factor of 0.6 in the i second example). The basic system works in either case but ' tends to produce clearer distinctions among groups of ' proposals if only the basic factors are used. ' (iv) Strengths and Weaknesses Versus Deficiencies i There is no problem with the definition of a strength in a proposal. It is some aspect which will provide better j performance than the minimum required. There is a difference ; between a "weakness" and a "deficiency", which is sometimes not recognized. If the two terms are used interchangeably as they sometimes are, the SEP loses the ability to make an important distinction. 2 In the context of this discusion, it is recommended that a "weakness" be defined as an aspect of the proposal which is likely to yield minimum levels of quality, but no better. A l [ "deficiency" is then defined as an aspect of the proposal which, j if left uncorrected, would lead to performance below the
- minimum level of quality needed.
1 The reason for suggesting this distinction is that it may have an impact of the subjects to be discussed with offerors in the , competitive range. A technical weaknem should definitely count i against a proposal; but you would be willing to award a contract , to a proposal with weaknemes if overall M is the best you have. l It is therefore not necessary (thougt. tt may sometimes be f j desirable) to discuss such points with offerors. A deficiency on i the other hand, no matter how minor, should preclude award of a ! contract. By definition it will lead to substandard performance. ! It is absolutely i'ecessary that deficiencies be corree'ed. It is , j therefore necesar;' to conduct discussions about such points. l l A word of warning: this relatively precise use of terms is g widely used. Many excellent articles on proposal evaluation have been written which ignore the distinetton or even use the terms 1 with the meanings exactly reversed. It is the distinction rather that the terms that are important. The key point is that the evaluation plan should alert the members of the SEP to , distinguish between the types of faults found in proposals. In i this section, those faults which make a proposal merely J j 1 i vn-21 1
- - . - - - - . - , - n-----
. , - - ,-,n.. , - - - .-_, - n . __.._,-,,--nn ,-, ,,-, , -
f l n unattractive are called "weaknesses"; those which make it [ unacceptable as it stands, are called "deficiencies." l (v) Acceptable versus Unacceptable Proposals The determination of whether a proposal is acceptable or unacceptable does not depend on the evaluation scores assigned. Rather it is a qualitative assessment that may be based on factors that do not even appear in the evaluation criteria. An acceptable proposal is one which, as submitted, is sufficient to meet the need. A proposal is acceptable if it meets a hypothetical test: Given the choice between taking this proposal as it stands or cancelling the project, a contract would be awarded. The proposal may be very weak. There may be many , proposals whleh are significantly better. Neither of these considerations is valid. The determination should be made by a comparison of this one proposal to the need, if it would meet
! the need, then it is acceptable. ;
j An unacceptable proposal is one which, as submitted, is not suffielent to meet the need. It is one which falls the hypothetical test for acceptability. This determination can arise l 1 from considerations related to the technleal evaluation criteria (e.g., past experience is important but the proposal does not i i indicate that the firm has any). Or it may come from other a factors not rated (e.g., offer deviations from essential ! requirements of the RFP such as being based on later delivery or i < performance than allowed). i A proposal may have an extremely high score and still be l . unacceptable. If, for example, past experience, key personnel ! , and proposed plans are all excellent but they come from being in j a position of irremediable confilet of interest, the proposal will i
- be unacceptable. The very factors which contributed to the high l score may be the ones which preclude a contract award. t 4
The evaluation plan should be constructed to alert the SEP , members that this decision may be independent of scores assigned. This does not Wolate the rule that peoposals may only i be evaluated in terms of the listed criteria. Remember, the ;
- criteria are intended to aid in making distinettons among
{ acceptable proposals. For that purpose it would be improper to j introduce extraneous factors in assigning scores.
> Three categories are used in assessing proposals: acceptable l unacceptable; acceptable with modifleations and (or i unacceptable but capable of being made acceptable). It is the third category that sometimes causes problems. If the proposal is defielent as it stands but is reasonably correctable, it should l receive this designation. Such proposals sre often included in 1
discussions. The distinction is important to ensure that the necesity for corrections is noted, i VII-22 l
-- .- - _ _ - _ - . --.. - _ - - _ - - . - . -- . J
(i) Evaluating Proposals ! (i) Assigning Scores The preceding section dealt with evaluation planning. In giving a proposal a score, the SEP must follow the criteria and the plan. There should be no deviation from the agreed criteria or method for assigning scores. Such plans, however, are relatively general in nature. There is room for many judgments to be made. This section deals with some of the things that Panel members should consider in the process. (11) Unweighted Sub-criteria SEP members may use any factors in a proposal reasonably encompassed within the general criterion statement in order to accomplish their evaluation. The more consistency achieved through planning, the better. But individual judgments about specifies in the proposals are allowed. For example, the criterion may be the qualifications of key personnel, if four persons are listed, one evaluator may accord each function equal weight in reaching conclusions. Another may focus on the Project Director and reward or penalize in a different proportion. Similarly, one evaluator may look at only the nature of past experience and the quantity while another might focus on currency of that experience. And again, one evaluator might consider publications to be highly significant while another might focus on hands-on work whether or not it resulted in an attributable publicatior.. It would not be proper, however, to downgrade a proposal
. because the individual has not been given sufficient authority within the project if there is another criterion for management planning. Scope of authority is important. But !
it is not reasonably encompassed under qualifications of key personnel in light of the other criterion. To bring in that i factor under personnel is a form of double-scoring which l ought to be avoided. j As another example, it would not be proper to give a high score for statistical methodology based on the qualifications of the project statistician if the methods were not shown or if the ones listed were weak. Since the criterion was l "Methodology," using personnel qualifications as the base for ' evaluation is not proper. The presumption that so qualified a person would not employ p>or techniques may be l reasonable but it provides no guarantee. By giving the low l ocore for methodology as such, the evaluator can highlight the need to obtain the proper information and a promise of t performance during discussions. The weakness (or VII-23 i
- . - . .. - - -. = _ - - - - - _ - -_. - - - -- .- - - -
i ! deficiency) should also be noted as the reason for the low I score. The likelihood that the quellfled statistician would j i be able to overcome the problem should be noted since that j l would make it more likely that discussions would be :
- conducted. But no matter how the situation develops, ;
j assigning the high score for a reason outsidt the logical i compass of the stated criterion would not be proper. [- l (111) Incomplete Proposals i 1 i j Offerors definitely believe in putting their best foot ! j forward. Normally, everything in the proposal win be the l 1 best that the firm can come up with at the time it is t written. If the offeror knows that some aspect of the ! proposal will be viewed negatively, there is a temptellon to j suppress that information. Consequently, it is important for ! f evaluators to be certain that they have compared the ! proposal against the need rather than reading it in isolation. ! 4 For example, presume that there are five posit!.ons that , should be considered key personnel for a project. If the . offeror has a weakness in the lineup, he may provide l resumes for only four of the five positions. The offeror will ! 1 be hopeful that the SEP will assign a score based 45 the high i qualifications of the four people and not nottee the lack of a ! i fifth resume. P nel members should be alert for such j
! omissions and note them in their evaluation. j
) Do no', however, presume that the firm is trying to cheat ! l and artificially downgrade the score. It is always po11ble l that they simply did not consider the position to be key to j the project. The goal is to assign a realistle score for the ! proposal as submitted. During discussions the additional j information (in this instance, a resume) will be requested, I f I Conversely, sometimes an offeror wiu be "excessively" l honest and provide such detailed information that the flaws l l in the proposal become known. This is partleularly true of f ratings assigned to methodology. The flaw in the methods i proposed should lead to a lower secre. But the possible need I to get additional detail from other offerors in order to make j a consistent evaluation should also be noted. 'This type of . effect can also oecur in evaluating personnel. An offeror I I may include resumes for personnel who are not really key to ! this project. Often their quallfloations are well below those j l of the truly key people. The evaluator should not, in such ! cases,' penalize the firm with a lower score on the theory j 1 that "average" qualifications are less than optimum. 'the , l extra resumes really should be ignored in evaluation. } l ! I ! ! i ) ! i l vn-24 l 8 i 6 __,.__t
(iv) Ambiguities Read critically. Unless the proposal makes an unqualifiedpromise of some capability, the evaluator should not give full credit under the criterion. "Personnel who will be available during the period of performance include . . ." is nit a promise that the people will be assigned to the projet t. "Normally," "generally," "usually," and "typics11y" are all qualifiers. They provide no guarantees. Offerors do not want a reputation for lying to you. Normally (and here the qualification is definitely intended) they will not put anything into a proposal which they cannot deliver. But ; very few offerors will resist the temptation to let you be misled. Take note of ambiguities and qualifiers as issues to be covered in discussions. If a firm commitment is needed or desired, the qualifier is a weakness that should be noted and is a reason for assigning a lower proposal score. (v) First Impressions Proposals should be read through completely once and then reread for purposes of assigning scores. There are two reasons for this. First, information related to a single criterion may be spread throughout a proposal. If the evaluator scores the proposal the first time through, it may be done based on ( incomplete information. When the additional data is noted later, the score must be adjusted with an associated waste of effort. And if the later data is not noted, the score will l , be based on incomplete information. Secondly, first impressions are often misleading. One is less likely to note a qualifier or ambiguity on first glance. Weaknesses may be obscured behind glib expMssion; strengths behind a stilted exposition. The real character of 1 what is presented is more likely to be noted on the second i reading after the evaluator has had time to be oriented to the manner and construction of the proposal.
"Buzz words" and "catch phrases" often sound good the first time through. Their lack of content becomes more apparent on later readings. Glossy formats have less impact the second time. Most importantly the evaluator will have had time to think about his or her conclusions about the proposal l even if the thought process is almost on an unconsciour level. i 1
(j) Panel Ratings and Competitive Range (i) Reconciliation l J VII 25
i After individual evalu .tlons are complete, the entire Panel
- will meet to develop the report of the evaluation. The i Panel must discuss their individual evaluations in order to '
arrive at a group consensus which will be used as the basis { for the offielal report of the evaluation. , , It is not proper to rely cn a numerical average of scores and ( a compilation of individual comments. Averages can be a grossly misleading. Consider two examples l ! Proposal A Proposal B i ! Member 1 80 95 1 l Member 2 85 95 f
- i l Member 3 90 65 ,
Membsr 4 85 85 i 4 Based on an average, these two proposals appear to be l 4 equivelent. But it is likely that Proposal B is either [ 2 somewhat better or substantially less advantageous. Unless effort is made to reconelle the difference of opinion between Member 3 and his fellows about Proposal B the i . results will not reflect consistent evaluation. From the [
- numbers alone, there is no way to tell whether Member 3 l I had a particular insight into Proposal B so that the score n[
! should be lower or if he missed something critical and the i j score should be higher. 4 s The reasons for any significant differences in scores should l be fully discussed among the panel. If these can be l l reconciled, then a relatively reliable single report will be ! i generated. If there is no. agreement, then a minority report ' should be appended to the SEP report explaining the reasors for the differences of opinion. This gives the DO and l Contreeting Offleer an opportunity to assess the ' implications of the evaluation report more realistically.
'The same type of reconelliation should be sought with
[ respect to acceptability /unacoeptabilitys streryths and 4 wesknesses; proposal defleieneless and questions for i discussion. Minority repotts on these elements of evaluation may also be required. (ii) Competitive Range Within NRC, the SEP also reviews cost proposals but only after technical evaluatien is complete. Costs are not l revealed before since they can tend to bias technical f I l
- VII-26 I
judgments up or down. Based on consideration of both technical merit and cost or price, the SEP must recommend the competitive range. [ Competitive Range is defined as that group of offerors with whom it is possible to conduct meaningful discussions. This same point is made by saying that the Competitive Range
. consists of all offerors whose proposals have a reasonable chance of being selected for award after the conduct of discussions. Only if a proposal is so technically inferior or so high in price that there is no realistle chance of it bein selected, should it be excluded from the competitive range. g This determination, however, must be' made in light of the charceter of the other proposals received. In the initial evaluation, the SEP should be comparing proposals to the criteria without regard to any of the other proposals. At the point of recommending a competitive range, proposals are compared to one another in terms of the initial evaluation results.
The competitive range may include proposals whleh are not acceptable. If it appears likely that defielencies can be corrected through diseunions, and if they are corrected, the proposal has a chance for award, it should be in the competitive range. This is partleularly true when the reason for unacceptability is that some important proposal element has been omitted. The competitive range may exclude I acceptable proposals. If one or more proposals are truly outstanding, it may be that another proposal (though perfectly acceptable) is so far inferior to the ones above it that diseumions are not likely to leed to award. A relatively low scored proposal may be in the range even though a higher scored one is not. Thiis depends on the reasons for the scores assigned. The lower-secred proposal may have omitted information or may have had ambiguities that pushed the score down. If correction of these problems would lead to a vast improvement while the higher scored proposal does not appear capable of improvement, the lower-ocored proposal would rightfully be in the range and the other out. Further, pricing considerations may dictate the range. If the technical advantage is slight but the cost difference is significant, the same result may occur. The deelslon on competitive range must, in any case, be justified by the report. The DO and Contracting Offleer have the final say. The SEP recommendation is intended to supply them with suffielent information to make an intelligent deelslon. Normally they will confirm the cholee of the SEP but only because the competitive. range report makes sense. ( VII-27
(k) Contract Negotiation (1) Responsibility The Contracting Officer, acting through the Contracting negotiator, is responsible for the conduct of written or oral discussions (negotiations). The toples to be covered and the extent of discussion are controlled by contracts personnel. This applies even if the toples are technical in nature. The role of the SEP is first to suggest toples for negotiation in the evaluation report, secondly to recommend firms with whom discussions will be conducted (i.e., the competitive range), and finally to help prepare for and conduct the actual negotiation sessions to the extent determined by the contracting officer. (ii) Toples for Negotiation Any aspect of the contract may be a topic for negotiation. Price, delivery schedules, the statement of work, contract clauses, and every other element of the contract will, at times, become an issue. In competitive procurement, discusions are normally aimed at exposing issues and concerns and to obtain clarification of the contractors' l proposals. They are not, aimed at bargaining to a complete agreement. Tne selection deelsion will be based on the content of the offerors' best and final offers, if "agreement" were reached in discusions on all points, these items would not be binding unless they were confirmed in the best and final offer. Further, the offerors not selected might well wonder if the Government did not really try to obtain the best terms from them in order to cover the fact that the award was "wired" for the successful offeror. The limited goals of the process
- should be remembered by technical personnel if they l participate in negotiation sessions.
(!!!) Do's and Don'ts of Negotiation Successful negotiation is based on adequate preparation. The Contracting Officer will be working with the cost portion of the proposal. But if there are technical issues to be raised, the SEP must be fully prepared. Whoever participates in discussions must be fully familiar with the SOW (to answer the offerors' questions) as well as with the proposal at hand (to ask the offeror questions.) Do prepare. During discussions, the Contracting Officer will take the lead. No one should communicate anything to the offerors unless the Contracting Officer approves. This means that VII-28
J the SEP and the Contracting Officer must work as a team. Do cooperate and coordinate closely with the Contracting i Officer. Negotiations, as part of a competitive process, are intended to ellelt from offerors their best approaches and terms for doing the work as described. In fixed price work in particular, it is sometimes possible to present offerors with the best terms that have been offered to date and then ask them to do better by lowering their price. The FAR covers this - and s'.rictly prohibits the practice. Do not engage in price auction technloues. In the cost reimbursement situation (and sometimes velth fixed price contracts) technical factors are most important. One can have a technleal "suction" as well as a price auction. This is sometimes done Dy taking portions of a proposal which are viewed favorably and revealing them to other offerors to see if they can meet or better them from a technical perspective. This is called technical leveling, it is also prohibited. Do not reveal aspects of one offeror's proposal to others. Sometimes, hcwever, an offeror will propose to do the work in a way that is found to be most advantageous to the Government but they do not agree to comply with all of the terms of the RFP. For example, an offeror may insist on , additional time. it is not a form of technical leveling to inform all offerors that NRC will consider walving some aspect of the SOW (be it delivery schedule or any other element of the work) provided that the details of the offeror's approach and all proprietary information are protected. Do give every offeror the opportunity to offer against the same statement of work. Do reveal downward deviations f rom the requ!*ement so that everyone offers on the same basis. Do not reveal enhancements since every offeror had the opportunity to offer them f*om the beginning. Rarely is a statement of work so well written that there are no faults in it. Offerors may find those problems before proposals are due and inquire. But so.netimes the problem is not found until after the propoul has been submitted. Sometimes the offeror does not want to ask the question since they fear that the answer, if generally known, would benefit the competition more than them. Do respond to contractor questions in negotiations. But do not give answers unless they are known to be correct. Do inform every firm in the competitive range if the answer could affect their offers. ( VII-29
-.. =_ - -. . - . . . _.
l l 1 l The FAR have very little direct guidance on the conduct of
- negotiation. But the FAR does say that no one should be
! given any information about the number or identity of firms
- in the competitive range. A statement such as "if you don't !
i do it, one of the other offerors will" violates the rule. That ; j would tell the firm that there is at least one other offeror - .
; and this is information on the number of firms. Do deal !
l with offerors strictly in terms of what they have proposed in l light of the requirements of the RFP. Do not reveal anything about the status of competition. l l ,
- 1. Best and Final Offers l l: '
i After negotiations are concluded, the Contracting Offleer will ! request a "Best and Final Offer" from each firm with whom : 4 discussions have been conducted. The Best and Final Offers win 1 all be due at the same time (i.e., there will be a common eut-off i date). The due date must be selected so that every firm has a !
- reasonable opportunity to prepare a response to the particular ,
i it:ues that were raised. The fact that some offerors have more i j time and others less is not important. The point that counts is l l that every offeror has enough time in light of the firm's l
! particular situation in the competition. Modifications received 4 after the cut-off time will not be considered except as provided i i in the Late Proposals clause of the solleitation. i i
l In some situations it may be necessary to conduct more than one l round of discussions and to receive more than one "Best and , Final Offer." Such situations are frowned upon. They should be i avoided if possible. But if, for example, all proposals received ( 4 are stiu unacceptable but correctable, a second (or subsequent) ' i round of negotiations would be absolutely necessary.
- m. Contractor Selection and Award j The responses to the request for Best and Final Offers wiu be !
forwarded to the SEP by the Contract negotiator for review of ! the technical portions. The proposals may be rescored against l
- the evaluation eriteria. This is not, however, strictly necessary. !
t At this point in the process, the goalis to select the one proposal l l whleh is most advantageous to the Government in terms of l ) technical excellence, price and other factors as stated in the I i RFP. Numerical scores are often helpful in this determination, l , but they are not determinative. The basle requirement of the j j SEP is to list proposals in rank order of advantage to NRC with i
- reasons. l
- I j The SEP will prepare a report to the DO. The DO will then make 1 l a selection and submit such to the Contracting Officer who must l approve the selection.
l 4 30 ! i i !
. - _ - - -. . . . _ _ - - . . . - _ . =- _ - . ..
I
- I l The .4RC procurement system thus has an important system of !
checks and balances. The DO cannot award the contract - only
! I the Contracting Officer has that authority. But the Contreeting l j Officer cannot make the selection deelslon without the i 3 concurrence of the DO. It la therefore assured that if there is a !
n disagretment between personnel with a technleal perspective l (the DO) and those with s business perspective (the Contracting l l Offleer) It must be resolved before contreet award. Neither i j perspective can improperly take precedence over the other.
- . After the selection deelston is made, the Contract Specialist will prepare the contract documents for signature by the contreeting j parties. !
t I i i i j , i i i ! b i t
} !
l 1 i 1 f V11-31 - l l u
F. USE OF DOE N ATIONAL LABOR ATORIES i 1. Introduction l In 1974 the Energy Reorganization Act split the Atomic 7 4rgy Commission (AEC) into two parts: (1) the Energy Resea; a a l Development Administration, which was to be promotiona; i developmental; and (2) NRC as a regulatory body. The AEC Divlsh. of Regulation became the NRC. The Senate / House Conferene-Committee Report noted that NRC was to obtain support, required, from other Government agencies, including ERDA, on a reimbursable basis. ERDA retained all of the National Laboratories, computers and most equipmert. SincTthat time, NRC has placed the majority of its research and technical assistance projects via interagency task orders to ERDA or the Department of Energy (as successor to ERDA) Laboratories. On February 24, 1978, NRC and DOE entered into e Memorandum of Understanding (Interagency Agreement) providing guidelines for program planning, implementation, control, funding and manmement of work performed at or through the Labs for NRC. SuWequent agreements between NRC and DOE have also been reached concerning subjects such as budget, funding and financial management responsibilities and security procedures. One important aspect of the relationship established was the creation
; of en Interagency Taskforce to establish policies and procedures for i
the smooth interface between DOE and NRC. This taskforce has developed procedures which have been agreed to by both parties and which cannot be altered without mutual consent. Those procedures are set lo'th in NRC Manual Chapter 1102. Historically, DOE Lab agreements have accounted for the majority of work performed by outside sources on behalf of NRC. From FY 1977 through FY 1981, for example, more than 75% of program support funding has been spent through the Labs. In FY 1981 over 700 individual projects were tasked to 23 different DOE locations. - NRC work has, similarly, been a significant source of support of I several of the Labs. NRC work represents between 5% and 50% of the work done at the various Labs. Copies of key guidance documents are included in the Guidelines volume.
- 2. DOE Labs and the Nature of Lab Agreements
, NRC takes the position that the DOE National Laboratories are "national assets" and not the exclusive property of the Department of Energy. From that perspective, DOE is merely a landlord responsible for mairaining facilities and expertise.
5 VII-35
I 1 In fact, DOE does operate primarily as a landlord. Most of the Labs 1 are Government-owned but run under contracts awarded by DOE to , an operating contractor who performs the actual work. Some of the contractors are affiliated with educational institutions; others are profit making firms. When NRC obtains work from one of the Labs, it is usually obtaining work under a contract-but rather than writing an entirely new agreement, NRC is placing a work order through DOE to an organization which has the obligation to perform by virtue of its contract with DOE. The DOE contracts with the Labs are ori a cost-reimbursement basis. Each contractor will be paid its allowable costs of performance as determined under the cost principl?s in the FAR (the same as in a direct contract award). Most of the DOE Lab con'.ractors also receive a fee (profit) in addition to the rosts (i.e., the contracts are written on a cost-plus-fixed-fee basU). NRC must pay the contractor's cost, a portion of the applicable fixed fee, and a factor for DOE administration of the Lab contract in accordance with DOE pricing policies. In effect, NRC pays DOE for its costs of contracting plus an overhead (or G & A) charge. The legal mechanism of an order placed with the Labs involves a three step process. Stop 1 is the contract between DOE and the Lab; Step 2 is the Interagency Agreement (Memorandum of Understanding) between NRC and DOE; Step 3 is the actual work order placed by NRC with DOE for the La5. Steps 1 and 2 are transparent to NRC offices; that is, at the time an order is placed, an NRC office need only be concerned with Step 3 since the others are already taken care -I of. Although it is not always obvious, remember that NRC deals with DOE and does not make any legal agreement with the Labs themselves. In practice, DOE is not directly involved in the work. But DOE is always a legal stop along the way. There is a tendency in some parts of NRC to misconstrue what it ; means to place an order with a Lab. For example, some NRC officials prefer DOE Lab agreements to direct contracts on the grounds that money is saved by avoiding payment of profit. This is incorrect. First of all, depending on the Laboratory involved, there may be a profit allowance already factored into DOE's charges to NRC to reflect fees paid to the Lab. Secondly, profit is only a minor portion of the cost of any project and could be more than offset by performance inefficiencies. Third, having DOE act as a middleman in the transaction also involves costs that might be avoidable by a 1 direct contract. l I Other NRC officials have stated a preference for DOE Lab agreements because they feel that changes in work can be made more l easily and without adding to the cost at would be the case in a l contract. This is also a misconstruction. The clauses of direct contracts allow for NRC directed changes within the general scope of the contract almost without restriction-there is no such unilateral right to make changes with the Labs. And when a change le made VII-36 l
l l with the Lab it costs more money (just as with a direct contrcct) but DOE is responsible for any negotiations which might be r.eeded with ;
! the contractor and then passes the bill on to NRC. The charges are still there-but the administration is transparent to NRC.
If DOE Lab agreements do not have inherent cost savings, and if they are not really any more flexible than a direct contract, why do they occupy such an important place in NRC's programa? What advantages are there? Several factors operate to make DOE Laboratories the best source for much of NRC's work. First, the background and expertise of the Labs is extensively and highly directed into areas of NRC need-sometimes, they really are the only source that can perform the work. Secondly, even when a commercial firm might be able to do the work, the streamlined procedures sometimes (but not always) make it possible for a Lab to meet an emergency need for which the commercial firms could not gear up in time. Third, the Laboratory contractors are already screened for conflicts of interest and can be used with confidence in some situations where potential organizational conflict of interest would greatly complicate the contracting process. Fourth, using a particular Lab for a type of work can help to ensure consistency and continuity in some research endeavors. Fifth, the Labs are Government-owned (whether Government or contractor operated) and overall Government economy is served by having them operate closer to capacity. ( But no benefit comes without an associated cost. The speed with which a DOE Lab agreement can be placed and the expertise of the Labs are available only at a relatively high cost (often more than v' hat the same work would cost from a commercial contractor). Further the transparency of administration (which make a DOE Lab agreement seem simpler to administer) exists because DOE acts as the middisman; that in turn means less control over the work. In short, neither the direct contract nor a DOE Lab agreement is the best solution for every need. Both niust be used with care and discretion. Each should be used when it is most appropriate to the given situation. Finally, the quality of work products is always a direct function of the planning and administration performed by the Project Manager. Direct contracts, interagency agreements, and DOE Lab agreements are mercly vehicles for placing work with an outside source. Success always depends on good management of the effort beginning with the Statement of Work and proceeding through monitoring of performance.
- 3. Regulations DOE Lab agreements are awarded and administered in accordance I with NRC Manual Chapter 1102 and NRC Bulletins in the 1401 l t
VII-37
series. These documents contain the detailed procedures which must be followed to place a Lab order. Manual Chapter 1102, "Administrative Procedure for Placement of Work in the Department of Energy" contains guidance on the steps necessary to make an "award" to one of the Labs. Topics such as the content of Statements of Work and proposals are also covered. Bulletin 1401-1 covers the criteria for selecting DOE as a source. Bulletin 1401-2 covers project management responsibilities once a project is ordered from a Lab. These sources of guidance are covered in greater details in the sections that follow. In addition, several NRC management procedures apply equally to direct contracts and DOE Lab agreements. For example, both types of work must go through the Waste Management Review Group and the Senior Contract Review process. Reports from all sources must be prepared in accordance with NRC Manual Chapter 3202. Adherence to such basic management policies is mandatory no matter what outside source is chosen.
- 4. Selecting a Source-DOE vs. Contract
~
NRC Bulletin 1401-1 contallis the policy concerning the selection of a DOE Lab as the source for performance of work. The criteria stated apply to all org nizational elements of NRC for all types of goods ,! and services of k 5,000 and over (except adjudicatory serv.7es). The basic policy is to use the most appropriate source for work as determined on a case-by-case basis. Every new project should be ; reviewed in light of the criteria established. NRC Bulletin 1401-2 places responsibility in the hands of the Project Manager. The Project Manager is the person with the authority to ' determine the proper source with responsibility for overall management of a specific acquisition under a Financial Identification l Number (FIN). The mechanism for making the selection of a source is NRC Form 367, "DOE Source Selection Justification." The form requires identification of the project and a narrative discussion of factors that lead to using a DOE Lab in lieu of a contract. The Project Manager must sign the form and obtain the approval of the Office Director or his designee. An office may also have internal requirements for intermediate approval by an it'dividual such as a division director or branch chief. The major factors to be considered include
- a. Internal Government Functions l
VII-38 !
If the work, by its inherent nature, should be performed by the i Federal Government and NRC itself lacks the capacity, work should be placed with DOE rather than be contracted out.
- b. Objectivity If use of a Lab would avoid real or apparent conflict of interest problems in the commercial sector or if the project is intentionally duplicating other work to verify results, use of a DOE Lab may be indicated.
- c. Facilities If a DOE Lab possesses unique facilities, then that is the proper sou ce. Even where a commercial firm may be able to do the work, use of DOE may be indicated in order to capitalize on existing and available resources.
- d. Follow-on work or unique backgrounds DOE should be used as e. source whenever, by virtue of past experience or the technical background of Lab personnel, it is impracticable to obtain the work from a commercial source.
Closely associated projects where one task is a logical extension of previous work, may remain with DOE. Further, a Lab may be ) used when it possess a required combination of professional skitls i and highly specialized expertise needed for the project. l
- e. Timing If the Lab could complete an offer to meet a deadline or to avoid some serious financial or other injury to NRC but a commercial source could not, use of DOE is justified.
Under the Bulletin, it is permissible to place work with a DOE Lab where there will be some subcontracting by the Lab. "Pass through contracting," that is, placing work with DOE in the knowledge that the Lab will subcontract the total performar.ce, is prohibited. l The criteria for placement of work with DOE are similar to those that operate to justify non-competitive contracting with commercial sources. Clearly, where only a DOE Lab can do the work, only a DOE Lab should get the order. Several criteria deal with aspects of this general situation. But note the standards for justifying the use of DOE are not nearly so strict as those that would apply to justifying a "sole source." A reasonable conclusion that DOE is the appropriate source because of the existence of special facilities or capabilities is generally suffielent as justification. In the sole source centracting environment, the capabilities would have to be unique and that conclusion would have to be tested through the CBD synopsis process. i VII-39
Further, each of the criteria should are to be used "along with past performance" in deciding on the source. If a DOE Lab has been successfully and efficiently performing work, related projects can properly be justified for placement with the Lab. The element of timing merits further discussion. The deciding factor i in selecting the source is the completion of the effort, not the ! inception. Starting with a complete Statement of Work package the contracting process does take more time than placement of an order with DOE. That is not sufficient justification, in itself, for use of DOE The critical point is meeting a deadline or avoiding financial or other injury to NRC. If a commercial source could finish the work ! prior to any deadline (despite additional administrative time needed ! prior to inception of the work), a commercial contract should be considered. One should also remember that an order with DOE can be placed before the Lab has fully reviewed the requirement and submitted a proposal. Some time must be spent in the preparation and evaluation ; of a proposal from whatever source is selected. With the Labs it may come after the obligating documents are signed. With the commercial < contractor it will come before the documents are signed. Looking only at the inception date (and neglecting proposal preparation and evaluation time for the Lab) can unduly bias the selection of a source. The DOE Labs do have special expertise in, and a wealth of experience with, the type of work needed by NRC. Even the most restrictive , reading of the source selection criteria would lead to a high percentage of placement with the Labs. But such a statistical fact does not warrant coming to any particular conclusion in a single i instance. Each proposed project must be reviewed on its own merits in order to gain the best advantage for NRC considering both technical 1 quality and cost.
- 5. Procedures for Placing Orders Once s DOE Lab has been selected as the source, NRC Manual Chapter 1102 provides the method for placement of an order with the Lab.
During the program planning for each fiscal year, needs for outside services should be identified and the appropriate sources selected. For projects where DOE will be the source, requirements are communicated to DOE during the period of budget forinulation and proposals are received from DOE which are then used in finalizing budgets. Work may be obtained from a DOE Lab, however, at any time during the fiscal year as needs may arise. The general process of obtaining DOE services is described in the , NRC/ DOE Memorandum of Understanding as follows: VII-40 _____..I
- a. Program Formulation (1) The NRC will formulate the program and will prepare a ;
proposal request, including an appre;riate statement of work. (11) The NRC will submit the pre posal request to the DOE Operations Office and the DOE et ntractor, (iii) The DOE Contractor will sub: 'd a prog ,m proposal to the DOE Operations Office and tin NRC. (iv)The NRC will evaluate the prope al, and determine that the document is technically adest. \te and that budgetary authorization exists. , I
- b. Program Placement (i) The NhO will prepare and submit a work authorization proposal and a program letter to the DOE Operations Office.
(ii) The work authorization will be reviewed by the DOE Operations Office, after obtaining DOE Headquarters approval as necessary, in light of existing resource commitments and adequate contractor resources. (iii) The DOE Operations Office will sign the work authorization l and furnish it to the contractor for commencement of the ! ( work, or notify the NRC's originating office of any problem. l NRC Manual Chapter 1102 fills in the details of the process. ; Normally, a project approved for placement with a DOE Lab will l already have a sufficiently detailed statement of work to permit l preparation of a complete technical and cost proposal by the Lab. l This Statement of Work will be sent to the Lab in accordance with paragraph 04 and Exhibit 1 of NRC Manual Chapter 1102. The Statement of Work must cor.tain all of the same elements as would be included in one sent out as part of the commercial contracting process. Remember, the SOW is the means for communicating NRC's needs to an outside source and a good Statement of Work is critical no matter who is performing the work. If anything, a Statement of Work for DOE should be guepared with special care since it will not be subjected to the independ nt review of either the Contracting Officer or of contractors seeking the business. Preliminary discussions with the Lab and technical direction during performance can help to overcome some SOW deficiencies. But it is - not good practice to count on that to solve one's problems. Oral clarifications can be misconstrued at either end--or fully nderstood but then forgotten. Technical directions issued during performance are often used to correct problems after time and money have been VII-41 2
- .. .- -- _ - -- - - - - - .- = - = - - = = =- = = =: = 0
unnecessarily spent on misdirected work. It is fer better to put the effort into planning, to document the need fully, than it is to make > I corrections later. When work is to be placed with a Lab, the SOW is transmitted and a proposal is requested from the Lab. The instructions call for the use of NRC Form 189. That form requires submission of the following if applicable to the projects (1) Objectiv of proposed work (2) Summary of prior efforts (3) Work to be performed and expected results (4) Description of any follow-on efforts (5) Relatloaship to other projects (6) Reporting schedule (7) Subcontractor Informatloa (8) A list of new capital equipment required (9) A description of special facilities required (10) Conflict of Interest Information (11) A project milestone projection relatug cost arid schedule by task (12) A list of Key Personnel - (13) A cost proposal; and (14) A forecast of expenditures by month. This information is functionally equivalent to the technical and cost proposals submitted by commercial contractors. The Lab must present its plans for meeting the NRC need described in the Statement of Work. And like a contractor's proposal, the DOE submission must also be evaluated. The evaluation proces for a DOE proposal is handled differently than a competitive contract--but the logic of the process is similar to that of a "sole source" contract award. The proposal must be reviewed for technical suffielency. Any area which is deficient must be identified and corrected. Areas of weakness should be isolated for discusion. The details should be negotiated as necessary-including the cost proposal in the event that inefficient or uneconomical methods are proposed. VII-42
l If the proposal is sufficient as submitted, or as altered through discussions with the Lab, an order for the work is placed by means of NRC Form 173, Standard Order for DOE Work (SOEW). The proper completion of an SOEW is discussed in paragraph 041 of Manual 1 Chapter 1102. l 1 The dollar amount committed by means of an SOEW may be limited to the specific task by FIN or it may be made flexible (i.e., the Lab may ! be authorized to reprogram funds among FIN's). If the Lao is authorized to reprogram, it may divert up to 10% or $50,000 l (whichever is less) from each FIN to cover the overruns on other work ' placed by the same NRC office. This provides greater flexibility to the Lab. And it can help to avoid costly delays when funding runs out and specific approval for more money must be sought. Of course, at the same time, NRC is sacrificing funding control over those reprogramming actions and money could be diverted to work that is of lower priority to NRC than other projects that are not receiving the extra dollars. The terms and conditions that apply to the order normally consist of the standard ones as shown in Exhwit 4 to Manual Chapter 1102. These will be discussed in more detail in the next section concerning administration. Other provisions may be added as necessary. Remember, however, that DOE is not obligated to accept any specific project from NRC. If they do not have the capacity at the ' moment-or if they cannot accept some unusual condition-they may refuse the order. But if the standard terms are used, an order would be rejected on1y for lack of capacity. The procedures just discussed will apply to any projects identified during the budgetary planning cycle and any others which may arise during the fiscal year for whleh there is sufficient time. In some cases, requirements will come up on very short notice with very near deadlines. In such emergencies, it is permissible to send an NRC Form 173, SOEW, to the Lab in edvance of receiving a proposal (see Exhloit 2 2 to NRC Manual Chapter 1102). , When an urgent order is placed, the SOEW authorizes the Lab to treat the preparation of its proposal as a part of the work being done (i.e., proposal preparation becomes a direct charge against the project). The Lab must still submit a proposal for evaluation and discussion with : NRC-but prior to definitizing the work and the approach, . commencement of effort is author 3.ed and NRC is obb' gated to pay up
- to the amount committed in the SOEW (plus any authorized reprogramming from other FIN's, if any). i Up to this point, it has bean presumed that it is known which Lab would be best to perform th vork. But this is not always the case. If one needs to make a decision among the Labs, there are no formal l
methods of competition. It is, however, possible to get some of the same effects, l , i I VII-43 m, , - , _ - _ _ - . . m_, _ - , . - - , . . . . - - - . - - _ _ - - , _ , . - _ , , , . , , . , . -_ . . , - - . _ _ - < - . . - , , _ , - - - - . ..
I l l 1 When dealing with the COE Labs, there are no restrictior.s on prior discussions concerning the requirements. One can determine relative ; j strengths in terms of personnel or equipment through such informal ' contacts as well as by review of information within NRC about past work done et each Lab. If methodology is the key factor in making a decision, the problem becomes somewhat thornier. Informal discussions are rarely sufficient to determine how any organization will actually pursue a given task. For that, one needs a more formal proposal which has been more carefully considered by a prospective performer of the work. In some instances, Labs may agree to submit a proposal (NRC 189) to be compared to a proposal from another Lab. But in order to do this, one needs to fully inform all of the parties concerning what is being done. And they may decide not to participate in that sort of selection process. For the most part, however, any doubt about the best source will have to be resolved by informal contacts and a review of available information with NRC. Note: There is one thing that can never be done. The Labs will not enter into any form of direct competition with a commercial source. In essence you must tell the Lab that the work will be placed with DOE before you will be abic to get a formal proposal. The NRC procurement system thus has an important system of checks and balances. The DO cannot award the contract - only the Contracting Officer has that authority. But the Contracting Officer cannot make the selection decision without the concurrence of the DO. It is therefore assured that if there is a disagreement between personnel with a technical perspective (the DO) and those with a business perspective (the Contracting Officer) it must be resolved before contract award. Neither perspective can improperly take precedence over the other. After the selection decision is made, the Contract Specialist will prepare the contract documents for signature by the contracting parties. ;
- 6. Evaluation, DOE Proposals Section E presented a somewhat lengthy and comprehensive description of the technical evaluation of commercial proposals. 1 These actions are accomplished by a Source Evaluation Panel. The l Project Manager would normally be a member of the panel. The -
Project Manager might also be a member even though the project I being evaluated is assigned to another Project Manager. Many of the actions taken 1;y the SEP are not necessary for DOE projects. The source has already been pre-selected. Only one proposal will be received. The same is true if a Governmental agency other than DOE has been selected to accomplish the work. This does not mean that DOE and other Government proposals require no evaluation. VII-44
Many of the same questions should be raised for these Governmental i proposals that are raised for commercial proposals. The purpose is not to discriminate between proposals. It is more a "go, no-go" approach. The evaluation must insure that total responsiveness to the Request for Proposal occurs, and, reassure that the Laboratory or agency selected really has the capability to produce the product or service required. These constitute the examination of responsiveness and responsibility that is accomplished for commercial proposals. A review of all Government proposals must be made for completeness, technical substance and an evaluation of the cost proposed. A san.ple checklist to use in the review appears on the next page. The checklat supplements those key questions which can be derived from Section E and applied to an evaluation of Governmental Proposals. ( l V!1-45 l
GOVERNMENT EVALUATION CHECKLIST REVIEW FOR COMPLETENESS YES NO
- 1. Administrative Information is Correct?
- 2. Personnel Information is Correct?
- 3. Staff Effort and Cost Sections Completed?
- 4. Task Schedules and Costs Completed.
- 5. Project Description Follows Instructions?
- 6. If Requested, Are Resumes Attached?
REVIEW TECHNICAL SUBSTANCE YES NO
- 7. Does Proposal Expand and Clarify Work Statement
- 8. Does the Objective Stated Meet NRC Need?
- 9. Are Methods Indicated Appropriate?
- 10. Are Sub-Contractors Appropriate?
- 11. Are Personnel Appropriate? _
COST EVALUATION TES NO
- 12. Is the Level of Effort in Line with Work?
- 13. Are Travel Estimates Reasonable?
- 14. Is Equipment Requested Really Needed?
- 15. Are Monthly Forecasts in Line with Effort by Task?
- 16. ls the Total Comparable with NRC Estimhte?
If the answer to any question is "no," the Project Manager should contact the Lab and take appropriate action. Ycur Program Assistant can often help. ; ! l If the proposal is incomplete, the additional information should be obtained prior to continuing with the next steps. l If any portion of the technical substance is questionable, clarification or correction should be obtained before completing the cost evaluation. I l'f costs appear out of line, the Project Manager should review this carefully. Please note if the Lab estimate differs widely from that done within NRC, the Project Manager should double check BOTH estimates before raising l i questions. Not every item in this list is always needed - and sometimes others l should be considered as well. This list is intended as an example only. The Project Manager should document the discussions and' state the basis for acceptance of the costs. VH-47
I CHAPTER VIII - MANAGING WORK PERFORM ANCE (ADMINISTRATION) i Page A. Introduction Vm-1 B. Roles and Responsibilities VIII-l
- 1. General VEI-l
- 2. Project Manager's Role VIII-1
- 3. Designating Officer's/ Contracting Officer's Role VM-2 C. The Administration Process Vm-3
- 1. The Need for Teamwork V m-3
- 2. Planning VIII-4 D. Monitoring the Work V M-4
- 1. The Need for Monitoring V m-4
- 2. Progress Reporting V M-5
- 3. Progress Reviews / Inspections VIII-5 E. Uses of Progress Information V M-6
- 1. Fact-Finding VIII-6
- 2. Comparison with Contractual Rights V m-6
- 3. Comparison with NRC Needs VIII-7 F. Review of Invoices and Vouchers VM-7
- 1. The Nature of Cost-Reimbursement Contracts and Agreements V M-7
- 2. Allowable Costs VIII-7
- 3. Limitations and Exclusions 'V W-8
- 4. Project Manager's Review of Invoices VIII-8
- 5. Things to Look For Ym-9 G. Administration of Government Property VIII-9
- 1. Government-Furnished Property Clauses V M-9
- 2. Details of Administration Vm-10
- 11. The Project Manager and Administration VM-ll
- 1. Informing 1he Contracting Officer V W-ll
- 2. Post Award Reviews and Authorizations Vm-12
- 3. Reports Vill-16
(
Chapter VHI- Managing Work Performance Administration (Continued) Page I. Admicistrative Problem Solving VHI-17
- 1. Modifying the Contract VIII-17
- 2. Cost Overruns on Cost Reimbursement Type Centracts VIH-24
- 3. Contract Terminations Vill-28
- 4. Disputes and Appeals VIH-33 J. Project Closenut and Performance Evaluation VHI-36
- 1. Physical Completion VIH-37
- 2. Administrative Closeout VIII-37 >
- 3. Final Performance Evaluation VIH-37 K. Administration of DOE Agreements Vill-38
- 1. Responsibilities for Administration VIII-38
- 2. The Need for Monitoring VI11-39
- 3. Terms and Conditions of the SOEW VIH-40 L. Project Completion VIII-43 i
VIII. MAMGING WORK PERFORMANCE (ADMINISTRATION) k A. Introduction The purpose of administering and monitoring work performance is to insure that the NRC receives the goods and services for which it has placed an order or contract. The receipt should be on time and in accordance with the work statement. The objective is A quality product or service On time At a reasonable cost This chapter addresses the methods and techniques that Project Managers should employ to achieve the objective. B. Roles and Responsibilities
- 1. General During execution of a project the Project Manager's role is somewhat different for a commercial contract than for a project being performed t'/ another Government agency.
I a. Commercial Contract The legal interface between the contractor and NRC is the Contracting Officer. All actions of the Project Manager must be within the authorities assigned by the Contracting Officer. These are usually stated in the contract, are related primarily to the statements of work, and are technleal in nature. , i
- b. Government Agency !
The Designating Officer of the Project Manager is the signature authority for any changes or other actions which are not stated in the Standard Work Ordering Form or Agreement. The Pioject Manager has the same responsibilities to the Designating Officer for a project being performed by a Government Agency as to the Contracting Officer through the Designating Officer for a commercial contract.
- 2. Project Manager's Role The Project Manager during contract / agreement performance is !
responsible fort i 1 Participating in postaward orientation conferences, when l required
- Monitoring the Government facility's or the contractor's performance ;
1 VIII-1
l
- Monitoring the finar cial and administrative aspects of the work during the perfctmance period .;
Reviewing technical progress and financial reports and other items Reviewing and certifying payment vouchers Notifying the Designating Officer or the Contracting Officer of reports or other items to be rejected
- Notifying the Designating Officer or the Contracting Officer if technical performance is not proceeding satisfactorily or if problems are ant.alpated Advising the Government facility or the contractor to submit in writing to the Designating Officer or Contracting Officer any requests for changes Assuring that changes in work under an award instrument are not implomented before written authorization, or an instrument modification is 5 sued
- Recommending and justifyltg desired changes in writing to '
the Designating Officer of the Contracting Officer Making site visits to the Government or contractors' facility, as required i At completion of the work, evaluating technical i performance.
- 3. Designating Officer's/ Contracting Officer's Role (
In administering the award instrument (Contract or Standard Work Order Form, as appropriate) the Designating Officer or the Contracting Officer: I Monitors the financial and administrative aspects of the i award during the performance period , l Reviews and approves subcontract awards in accordance with award instrunient terms and conditions
- Reviews contract procurement systems for acquisition :
contracts l e Maintains the official award instrument files
- Reviews and certifies that payment vouchers are in accordance with the award instrument Approves costs billed for payment ,
l VIII-2
- Receives copies of correspondence and reports relating to the terms and conditions of the award instrument
{ Maintains follow-up on reports to be reviewed and payment vouchers to be processed Executes all modifications to the contract
- Terminates the contract if necessary
- Responds to reports from the Projeev Manager concerning contractor per formance
- Reviews copies of correspondence between the Project Manager and the contractor
- Reviews property acquisition and management end arranges for disposition of property after completion or termination of the project.
C. The Admin'stration Process
- 1. The Need for Teamwork The administration of a work order or contract begiru when it has been signed by both parties. Administration is carried out by f' a Project Manager and supporting staff on behalf of the Centracting Officer for a commercial contract or the Designating Officer for a project being performed by another Government Agency. Only the Contracting Officer may amend or modify the contract or take any official action to make contractual commitments or changes on behalf of the NRC for a commercial contract. Only the Designating Officer may do so for a project placed with another Government Agency. In view of this, all such communications or correspondence with the contractor must be through the Contracting Officer for commercial contracts or through the Designating Officer for interagency agreements. Active, effective coordination between technical, financial, legal and administrative staffs with contracting personnel, or the Project Manager acting on behalf of the Contracting Officer or the Designating Officer including the establishment of practical communication channels, is essential if the contract or agreement is to be properly l administered and the desired work accomplished. l While the individual rights and obilgations of both parties-the contractor or the Government agency and NRC-are established by the contract or agreement terms, the actions of one party can effect the other's ability to fulfill responsibilities. This means that planning is necesary during performance to integrate the I actions of both parties. For example, even though reports, l g
information, or property to be suppl. led by NRC are specified in I l VIII-3 I i
the agreement, administrative actions must be taken to integrate plans for delivery with performance schedules and to ' insure that the materials are provided on time. Any required NRC prior approvals may also affect performance. N RC's responstMlities for such actions make it an active participant in performance. Delays or omissions by NRC personnel in performing reviews, giving approvals or disapprovals, or furnishing required information may excuse the contractor or the facility from fulfilling related performance obligations and otherwise impeding the perform- ance of ti.e work.
- 2. Planning Planning the administration of a contract or agreement at the outset of the project is a necessary step in effective administration. This planning is needed to assure that the administrative steps intended are consistent with the specific acquisition. Also, the analy:Is of administration requirements can disclose potential problems in performance of the work that might have been overlooked prior to award, making it possible to take early corrective action before they becomo serious obstacles.
The planning should be based on a review and analysis of the project and contract or agreement requirements and include such things as an analysis of the need for and timing oft performance end cost reviews, inspections, scheduled delivery of Government-supplied items, monitoring of compliance with ) terms and conditions, and other administrative duties. Depending on the nature of the work, it may be helpful to discuss the planning with the contractor or the Government facility to arrive at a common understanding of what will be expected. The active participation of the Project Manager engaged in the technical supervision of the project is, of course, vital to the successful planning of administration. When the Project Manager is confronted with problems of performance, they must promptly be reforred to the Contracting Officer or the Designating Officer with recommendations for appropriate action. D. Monitoring the Work
- 1. The Need for Monitoring The evaluation of work should be conducted at a level of detail and frequency commensurate with the nature of the work. The evaluation should center on determining actual progress toward the project objective, the general quality of the work to date, and the financial status of thu contract or agreement.
i VID-4 1
In seeing that a program is carried out properly, the Project Manager must first assure that progress is monitored and, if ( necessary, controlled. Second, the Project Manager must assure that problems or situations requiring a modification are brought promptly to the attention of the Contracting Officer or the Designating Officer for resolution or action. The Project Manager must monitor progress continually, even though the Government facility or contractor retains primary responsibility for performance. The extent of monitoring will depend on the complexity and relative significance of the contract and the type and extent of direction required for a particular technica' effort. In evaluating performance, the Project Manager should be concerned primarily with progress toward completion of the required work. The Project Manager should be aware of costs incurred as they relate to progress under the contract or agreement.
- 2. Progt ess Reporting A periodic progress report can serve as a tool in performance evaluation. Technical reports furnish most of the information needed to evaluate the physical status of the work. if cost control is a concern, the contractor or Government facility could be required to submit financial reports outlining the various expenditures by cost element versus original or revised estimates of expenditures. An effective progress item is a cost / technical
( completion overview that requires the contractor or Government facility to report its technical progress by tasks in a work breakdown structure for which cost estimates have been developed. This allows for a realistic comparison of expenditures versus progress.
- 3. Progress Reviews / Inspections The Project Manager also may ascertain or verify progress by conducting a personal review, either at the appropriate NRC locab or at the performer's site. Contract or agreement requirements could include a presentation or review to be conducted at various stages of development in the program.
Since these types of review involve travel and presentation costs ! for which the Government will pay, periodic telephone reviews with the performer's project director may be a more reasonable i and feasible substitution for projects of lower dollar value and i complexity. However, some complex research and development projects will require both intensive progress reporting and extensive progress reviews. In either event, the Project Manager should inform the Contracting Officer or the Designating Officer of any significant problems revealed by such reviews. I VIII-5
Informal progress reviews (in the form of a phone call) should also be conducted on a spot basis without prior notice in many situations. If anything in the formal reporting and monitoring ; system seems out of line (e.g., milestones are not being met; costs are higher than projected; the performer appears to have stalled in technical progress), the Project Manager should i investigate the situations. Formal reports are often written to put the best foot forward; an informal phone call can often elicit more accurate information. In order to get effective progress reports (formal or informal) the Project Manager should establish technical credibility with the performer. The Project Manager with a helpful attitude is ; more likely to find out the real status of a project than one who is viewed as simply an overseer or as a meddler in areas of judgment.
. The Project Manager is not "merely" a scientist or technical expert. He or she is also a manager. The managerial arts of interpersonal relations are important to the Project Managers in-
- doing an effective job in monitoring progress.
E. Uses of Progrem Information
- 1. Fact-finding All forms of monitoring action provide information concerning what is actually happening in project performance. Fact-finding ,)
is the primary goal of monitoring activity. These facts need to be compared to two different standards in order to determine how the project is doing in terms of meeting project objectives.
- 2. Comparison with Contractual Rights Progress should be compared to what the NRC has a right to expect under the contract or agreement. If the performer is :
accomplishing all tasks at the specified level of quality, on time, ! and within budget, then progress is contractually sufficient. If any aspect of performance does not meet or exceed i requirements, there may be a need for any number of possible remedial actions. l The remedial actions include modifications, termination, l' suspension of work, or rejection of deliverable items. Strict compliance witd contractual terms is one goal of administration ' and this can only be measured by getting the facts about performance and comparing them to the contractual rights of the NRC. , t VIII-6 i , I
- 3. Comparison with NRC Needs
( The questions that were important at the beginning of a research project may not be sufficient to address the problems that exist later. It is, therefore, important that progress information also j be used to compare the work done with the needs of NRC as - perceived at the time. It may be found that the performer is doing everything in accordance with the contract or agreement but the results will not now meet the need. This comparison is actually a continuing review of the Statement cf Work during performance. The lack of progress toward ' currently pereelved objectives, despite compliance, may
- highlight the need to change the work requirement.
If redirection of the effort is needed, a modification may be in order. If the redirection is substantial, so as to amount to an - essentially new or different effort, then a termination followed : by resolicitation of the revised requirement may be needed. F. Review of invoices and Vouchers
- 1. The nature of cost-reimbursement contracts and agreements.
Every cost reimbursement contract obligates the Government to ' pay the contract'or for its best efforts to complete the work within the cost estimate. The Government agrees to bear the ' I cost risks of technical performance. It would not be right, however, for the Government to bear the . costs of a contractor's grossly inefficient or uneconomical I practices. iss a management control, the payment provision of a cost-type contract provides that the Government will only reimburse certain of the contractor's costs, which are allowable as defined in the contract. The standards of allowability are set forth in the FAR. These may be supplemented by specific agreements on elements of cost as set fcrth in the contract or the agreement. These same principles apply for Interagency Agreements, between two Government agencies, such as that which exists between NRC and DOE, or may be promulgated by NRC with another agency. The FAR requires that payment for such goods or services shall be at actual cost to the performing agency.
- 2. Allowable Costs
- a. General in ordcr for the NRC to reimburse a cort it must meet four tests of allowabil!ty the cost must bei i VIII-7 i
(1) Reasonable; (2) Allocable; 1 (3) Properly accounted for; and (4) Not limited or excluded by the terms of the contract or agreement.
- b. Reasonableness For cost to be reasonable it must be "of a type that is generally recognized as ordinary and necessary for the conduct of business or the performance of the contract or agreement." It must also be in an amount that would reflect the judgment of a reasonably prudent person in the conduct of a c.ompetitive business.
- c. Allocability For a cost to be allocable it must be either a direct cost, which is specifically incurred for performance of the work, or an indirect cost that benefits several aspects of the '
operation or is necessary for the overall conduct of the business even though one cannot show any specific benefit to elements of the business.
- d. Accounting Practices )
The contractor or Government agency must use generally accepted accounting practices to accumulate costs. Among the things which the Government will not pay or which are , restricted in amount are interest expenses, entertainment, first-class air fares, and insurance.
- 3. Limitations and Exclusions Even when all other tests are met, some types of costs will not be paid by the Government.
- 4. Project Manager's Review of Invoices Detailed procedures for Project Manger review of invoices are l provided in NRC Manual Chapter 5103, NRC Review of Contractor Invoices. The Project Manager must review all costs claimed and report the results of that review recommending l approval or disapproval to the Designating Officer or Contracting Officer as appropriate. l 1
i VIII-8 l a
- . - _ _ . . _ _ . _ - . ~ _ - _ _ - - _ _ - - - _ _ . - . , _ _ _ _ . - - - - - , , - . - . .
- 5. Things to Look For Many aspects of allowability of cost under the Cost Principles in the FAR are matters for financial specialists (e.g., overhead and General and Administrative Expenses). Other aspects of allowability, however, are best evaluated from a technical i perspeetive Lnd are the responsibility of the Project Managar.
Reasontbleness of costs as judged by type is definitely related to technical considerations. For example, if a performer ran a test on a sample, the results of which were not needed for the project, the costs of the procedure would not meet the test of a reasonable cost. Those costs should not be paid by NRC. The ' Project Manager can evaluate the necesity of the work-the Contracting Officer or an auditor and possibly the Designating r Officer would not be able to make that judgment. Travel to professional conferences is another example. Sometimes it is desirable for contractor or Government facility , personnel to seek out inicimation at conferences for a project.
! But sometimes, people p for their own edification and bill the , costs to a project. If attendance was not reasonably necessary j for the project, then the Project Manager should recommend
. disallowance. Allocability of costs may also have technical basis. Some performers may attempt to bill time spent on one project to - ( another one. This is done to avoid having to admit a cost overrun; it is done to transfer costs from other work; it is done to artificially alter reported overhead expenses. The Project I Manager should check levels of effort on vouchers and other applications of resources (e.g. computer time). If the amount l billed seems excessive for the results achieved, this should be noted. Without such notification there would not be reason to look into the situation. And without a special review it is often impossible even for an au6 tor to determine that corts have been improperly charged to 6 project where they are not properly allocable. Trainees or graduate assistants are, for example, sometimes charged to a project where they really have done no work. Some training is clearly allocable to every contract, but usually through an overhead rate. Government cost-type contracts should only bear their fair share of this type of expense. 1 G. Administration of Government Property
- 1. Government-Furnished Property Clauses
{ Standard Terms and Provisions for work ordered through DOE Laboratories or other Government facilities do not currently include a clause for NRC furnished property. Contracts do. The ! principles set forth for commercial contracts should be applied VIII-9 l
when the performer is a Government facility and NRC either provides property or permits acquisition of property for the project. j Government-funded property is governed by appropriate clauses in the contract. Under the Government property clause in a 1 fixed-price supply contract, NRC agrees to deliver certain materials to the contractor. The contractor's performance schedule is based on the assumption that he will receive this I property at the time stated in the schedule, or (if the time is not so stated) soon enough for him to meet his delivery dates. An extension of time is allowed if there is a delay caused by NRC and if the property differs from what was supposed to be : j delivered. The contractor is also entitled to a fair adjustment in the price for costs resulting from late delivery.
- The clause further provides that title to the property remains with the Govemment. Unless the parties agree otherwise, the property may be used only for performance of the particular contract. Control of the property (after it has been delivered) rests with the contractor who must set up and administer a program to maintain, repair, protect, and preserve it. The
' contractor must also maintain a suitable inventory control system acceptable to the Division of Facilities and Operations Support and to the Division of Accounting in addition to the t Contracting Officer. Though the contractor has responsibility l for the property, the Government has access at all times to the .;
premises where the property is located. i Cost-reimbursement type contracts contain a Government property clause that applies to all property acquired by the contractor for use on the contract, the costs of which are I reimbursed directly by the Government. This clause provides for (1) the right to change the amount furnished; (11) rotention of title by the Government; (iii) control of the property; (iv) restrictions of the use of the property for other than contractually specified purposes, (v) the maintenance program; (vil) Goverament access; and (vil) disposition of property not consumed in performance.
- 2. Details of Administration A Contracting Officer's prime responsibility in administering !
- Govemment property fumished to a contractor, or acquired as a direct cost item under a cost reimbursement contract, is to '
ensure that the contractor complies with the provisions of the l Govemment-fumished property clause of the contract, and performs the necessary surveillance of various aspects of ; maintenance, use, and disposition. In addition, the Contracting
~
Officer renders decisions regarding liability--Govemment or contractor-for loss, damage or destruction of Government ; property. , i s VIII-10 , s l 't b
The Contracting Officer should approve the type and frequency of physical inventories of Governinent property that a contractor must take during the life of the contract. Such inventories may be required whenever the Contracting Officer thinks it necessary. Upon termination or completion of the contract, a contractor should be required to make an inventory that is adequate for the purpose of disposing of Governinent property furnished for work under the contract. H. The Project Manager and Administration
- 1. Informing the Contracting Officer in performirr; i.is administrative duties, the Contracting Officer relies heavily on information submitted by the assigned technical and support personnel. Timely notification is important because it can provide useful information on potential contract problems that might be resolved in the Government's interest if addressed promptly. When the technical personnel contemplate discussions with contractors that could involve changes to the contract, the Contracting Officer shall be contacted beforehand. In any event, no action will be taken by the DC without a written request from the requiring office except for routine admints-trative modifications, for instance, overhead rtite adjustments.
Business information, evaluations of technical progress and conclusions regarding the technical status of a contract shall be
, promptly reported to the Contracting Officer. Negative, as well as positive, technical results must be included in such reports, in drafting correspondence to the contractor and in oral communication, the Project Manager must exercise care not to accidently generate claims or delays. When communicating with contractor personnel, or when conveying technical or assessment information, it is critical that the Project Manager not instruct, supervise, or attempt to control contractor efforts except as specifically suthorized in the contract Statement of Work.
No one disputes that reasonably open and honest communication between the Project manager and the contractor can enhance performance. Professional discussion of options and alternative approaches cannot really be avoided. But remember that there is a contract, which defines rights and obligations of the parties. All communications with the contractor must be viewed in this light. The contractor has a right to proceed in any manner consistent with the terms of the contract. Excessive involvement of the Project Manager in the day-to-day conduct of the project or comments on performance that are too strongly or improperly worded can interfere with the contractor's rights under the contract. Even the appearance of unauthorized direction to the contractor when none was intended can lead to contract claims or other problems. ( VIII-l1
Consequently, the Project Manager must be discreet. He or she should think twice and if nee'essary seek out the advice of the Contracting Officer or contract specialist if there is any -! question about the effect of any statement on the contractor's obligation to perform. It is not always necessary to check with the Contracting Officer before saying or writing scutning to the contractor. But all communications of any signil.cance should either be in writing initially or be confirmed in writing as soon as possible. The drafter of any correspondence to the contractor shall ensure that a copy of such correspondence !s sent to the Division of Contracts or the Project Office, whichever applies. Effective administration requires that both the technical and business experts of tne Government S e., the Project Manager and Contracting Officer) have full !aformation about the status of the relationship between NRC and the contractor. Information copies sent after the fact will usually suffice. But if in the judgment of the Project Manager the proposed communication may have an impact on the contractual relationship, the corcurrence of the Division of Contracts should be obtained. The Designating Officer will similarly seek the concurrence of the Project Manager if a business-oriented action may have an impoet on the technical performance of the contract.
- 2. Post Award Reviews and Authorization
- a. General )
In order to control the contractor's cost expenditures and to ensure that NRC's objectives are met, contract provisions may be used that require the contractor to obtain the prior authorization or approval of NRC before taking specified actions or incurring certain costs. For example, prior consent is required for subcontracting under cost-reimbursement and certain other type contracts; prior approval is required for reimbursement costs incurred in excess of cost limitations under cost-reimbursement type contracts and for reimbursement for overtime and premium wage payments. In all cases, the Contracting Officer is responsible for providing such approvals. However, since the underlying circumstances that call for approval may directly relate to the technical performance of the work, the Project Manager will be consulted before approval is formally granted or withheld,
- b. Subcontracts Under cost-reimbursement contracts, the contractor must obtain consent for placing: (i) all cost-reimbursement, time and material, and labor hour subcontracts; and (ii) fixed-price subcontracts that exceed $25,000 or five VIII-l 2
percent of the contract price. The subcontract f onsent requirements enable NRC to review proposed subcor tracts
- t. for necessity of subcontracting; the technleal capabilities of the prospective subcontractor; the reasonableness of the cost and subcontract terms; the type of subco1 tract (fixed-price, cost-reimbursement, and so forth); and the ,
work statement, including applicable specifications, to be included in the subcontract. As requested by the Contracting Officer, the Project Manager must comment on the technical need for subcontracting, the technical capabilities of the proposed subcontractor, and the adequar.y of the subcontract work statem'ent. However, if the Project Manager believes that any aspect of the proposed subcontract arrangement is not in the best interest of NRC, the Project Manager should comment on that as well. In the review of the proposed subcontract, O major consideration should be the effect of the subcontract cn the quality of the services or items to be provided. If the proposed subcontract is considered to be satisfactory in all essential respects, written consent is given to its award. However, consent does not mean that all the subcontract's costs are allowable under a v <-reimbursement prime contract, nor is it a determinattu, t'.f th 1 acceptablity of the subcontract price in future prict, negotiatloas. These are ( separate questions. If the proposed subcontract is not acceptable to NRC, it may not be awarded. The prime contractor is notified and told why the proposed subcontract is unacceptable; other arrar.gements must then be made for the proposed work. This may involve altering some of the terms of the subcontract, or it may require selection of another subcontract source. This will depend, of course, on the , particular reasons for denying consent to the subcontract. ; 1
- c. Key Personnel Research and technical assistance contracts will include a "Key Personnel" clause. Although slightly different clauses may be used in other situations, the general principles of administration will be the same. However, as with all contract administration, the specific terms of the contract are what count. Before taking any administrative action to enforce a contractual right, the Government must verify in the contract that it really has reserved that right under the terms as written. 1 l
( Vm-13 i
(1) Terms of the Clause The clause provides that prior to diverting individuals < specified in the contract as key personnel to other programs, the evntractor must obtain the consent of . the Contractir.g Officer. The contractor must notify 4 the Contracting Officer and include justification for the change, including the qualifications of the proposed ; substitute. If the contractor replaces key personnel i without prior consent, this may be ratified by the i Contracting Officer. The list of key personnel may be changed to add or delete personnel as appropriate but l only by mutual consent. t (2) Reasons for the Clause Whenever the qualifications of personnel were a factor ! in the selection of a contractor, the Government has en interest in assuring that the people who actually ; i perform the work can do so at the same level of quality as the people wno were proposed. If there were ; no controls over diversion and substitution of personnel, ' mtractors could propose a high quality team and then u Hss skilled (and less expensive people) to do the - W. (3) Personnel Reviews .l During performance, the Project Manager should determine whether key personnel are actually performing the functions for which they were promised in the proposal. In small projects, this is usually fairly obvious since the few key persons named will tend to be the enes with whom the Project Manager haJ contact. On larger projects, however, there may be a number of key personnel named with whom the Project Manager will not have regular centact. It 15 often good practice
; to make nMfiq checks on the participation of the j named P iv. . j j This can ? y , ;hrough reporting requirements which !
4 may include & listing of time by individual key people. : Or it can be done by asking the contractor's . a management to have the person in some functional area ! of performance discuss the details of the progreat with J the Project Manager. This can be done at formal e project meetings or through informal telephone ! contact. In either case, the actual degree of project i participation can be checked by means of the i familiarity of the individual with progress. If the key l person does not tppear to be suffleiently involved or to ( have performed functions that were assigned in the l Vill-14 i
proposal, this should lead to further investigation of the i situation, it may be that the contractor has made an
\ uncuthorized diversion and remedial action (up to and including termination for default) should be taken.
When the contractor does propose a substitution of key personnel, the Contracting Officer will forward the justification to the Project Manger for review. The Project Manager should review the contractor's original I proposal to ascertain the qualifications of the person being replaced. If the proposed substitution does not have equivalent credentials, the Project Manager should , note that fact. The Contracting Officer may then refuse consent and require the contractor to propose a second substitution in accordance with the contract. >. Not all substitutions are a matter of the contractor's choice. People retire, resign or die. Some latituda is clearly indicated in those circumstances. The substi-tute may not meet the same standards as the persons , being replaced. If that is simply unavoidable, then it is eften reasonable for NRC to accept the less quallfled substituts But if the substitution is within the control t of the contractor, it is often good practice to be very I strict in application of the clause. If application of the clause is too loose, NRC could become the victim of i "bait and switch" tacties by contractors. One word of caution: The Project Manager should never irsist on a specific individual as a replacement for a key person. This is a contractually unwarranted invasion of the contractor'A management prerogatives. NRC has a right to demand an equally qualified person. It is up to the contactor to meet this obligation. How it is dona is up to the contractor.
- d. Other Reviews Various clauses of the contract may require prior approval or consent of the Government for a number of possible contractor actions. Some of these approvals are non-technical in nature (the Organizational Conflict of Interest Clause has such an approval requirement). Some mix business and technical concerns (e.g.. the D!ssemination of Contract Information Clause.) Of partleular importance to technical personnel, however, are those approval requirements that may be included witMn the Statement o.'
Work. Individual contracts may stipulate that before proceeding beyond a particular milestone in performance, the approval 4 of NRC raust be obtained. Some of these approvals will be t VIII-15 i
I. i reserved to the Contracting Officer and others to the ! ) Project Manager. In research work, for example, the first ; 4 task is often some form of needs assessment or feasibility ,
- analysis. Before the contractor will continue to incur tosts i for the Government's account, it is necessary that the NRC agree that the next phase is desirable and/or practleable.
Whenever any approval is of a technical nature, the
- Contracting Officer will obtain the opinion of the Project !
l Manager before issuing the written approval to the contractor. Thoughtful analysis and documented reasons for a recommendaticn are irr.portant to the suceem of projects. No approval should be automatie. Well reasoned judgments l In light of the partleular cireur6 stances are always needed. I
- 3. Reports
- a. Technical Progress Reports j Most contracts require the contractor to furnish periodic 1 technical progress reports to the Project Manager. These reports should include all relevant details. They should not, however, become too burdensome to prepare. Technical :
progress reports may be submitted in letter form and may l 1 include the identification of persons working on the project, ; i the facilities devoted to the work, the number of l }' employee-days expended, the general direction of tM work, ) the kind or number of experiments being conducted, the l latest setentific data, observations, and predictions, and [ j plans for the next reporting priod. Contraitors should be l 3 encouraged to furnish preliminary technical information in ! i these status reports, even though it is tentative and not ! ready for widespread distrioution. In addition to keeping j NRC personnel informed of progress, the technical progress j report gives the contractor an opportunity to evaluate its i 4 efforts periodleally in terms of the intent and requirements j l of the contract. A progress report forces both the l
- contractor and NRC to evaluate, on a regular basis, the l l work performed relative to all contractual requirements, j 1
j b. Financial Status Reports j i - l Financial status reports play an important part in contract l j management. This is partleulntly true for cost- : reimbursement type contracts because of the possibility of l cost overruns. Such reports provide information that is l helpful in avoiding or at least anticipating cost overruns.
; Cost information provides both the Project Manager and the i contract negotiator with a check on the contractor's ! expenditurca and level of effort (in terms of number of i people working on the project, facilities committed to the ; project, and cost factors). Vouchers submitted for costs ,
{ VIII-16 i i u., __ _ _ _ __ .- ._, _ . _ _ . _ _ _ _.._ .-. _ _ _ _ _
t t i expended under cost-reimbursement type contracts are
. sometimes used as a cost-evaluation and cost control ! mechanism, but th!s is the least preferred mechanism and should be us+.d only if it is unreasonable to require finanelal
- status reports.
- 1. Administrative Problem Solving This section covets some of the more important techniques for l
dealing with problems that can arise in the management of contracte. The goals of progress monitoring are to determine , compliance with contract terms and whether those terms are actually :
. meeting the needs of the NRC. The means by which failures in either !
of these areas can be remedied under the contract are the major i
; focus. . Many of these same problems arise with orders being accomplished by 1 DOE Labs or other Government facilities. In those instances the l legal aspects do not apply in the same fashfor, as they do with i
, commercial firms. However, many of the actions of the PreJeet Manager described in this section do. They have not been addressed
- in the Chapter on DOE Projects. It is well to consider the intent of .
the principles set forth below when administering work placed with l DOE Labs or other Government facilities. ] 1. Mo61fying the Contract [ (' Basic contract law and the terms of the contract itself provide 1 for many ways in which a contract can be altered. Much of the i i work that goes into contract administration involves determining ! 1 the need for, and then accomplishment of, such contract l j modifications. l
- a. Types of Modifications l
! There are several ways of classifying, different types of j modifications. But from the perspective of the Project j
; Manager, there is one key distinction by whleh modifications l een be classified. From e.nis perspective, the two type of j modifications are unilateral and bilateral modifloations.
I j (1) Unilateral I A unilateral modifienti.sn is one whleh can take effect
! through the action of only one of the parties without
]' the specific corsent of the other party at the time the modification is made. Some of these modifications (which are known as Administrative Changes) do not 4 affect the substance of the rights or obl.igations of
- either party. For example, the NRC can change the 4
address of the paying office or the name of the Project I Vm-17 il 1
Manager at any time without consent of the contractor. But many substantive modifications may ) also be made unilaterally. As noted earlier there are certain elements of a contract which must exist in order for the contract to be binding. Two of these elements are offer and acceptance, and mutuality of consideration (i.e., both parties must give the other something of value). These elements must also exist in any contract modification. These requirements of contract lavi are met in the case of unilateral modifications by a simple means the terms of the contract as originally written give NRC the right to take such unilateral actions. The offer and the acceptance needed for the modification were covered at the time the original contract was signed. Probably the most important unilateral right of the Government to modify a contract is the Changes clause. Other clauses, which reserve the Government's right to take untiateral actions includer Termination for the Convenience of the Government, Termination for Default, Inspection, and Government Property. (2) Bilateral Modifications A bilateral modification is one that can take effect only when specifically agreed to by both parties. These I modifications can affect the statement of work, the delivery seudule, the price, or any other portion of the contract. Bilateral modifications can be very important. For example, if more work is required than was provided for in the original statement of work, the work is considered to be a new procur ment. Unless there was an option provision specifically calling for the l contractor to do the work if ordered, NRC could not require the contractor to perform the extra work. But in many instances, the extra work can only be performed efficiently by the contreetor already on the r job. In those cases, non-competitive sward of the new i work can be justified if the work comes within the scope of the contract. It may then be added to the contract by mutual consent. The modification would provide the statement of work for the additional effort, a price or cost estimate, and a schedule for delivery. Both parties would agree to the new work and the
- compensation for it and then sign the modification.
These bilateral modifications are also called supplemental agreements. ,
.i VIII-l8 i
Another %mple can serve to show the importance of bMeral modifications. No tarm of a standard Government contract allows the Government to move a { delivery or completion date forward. If the contract says that the work will be done on or before June 1st,it is not possible to move the date up to April 15th unless the contractor agrees. In such cases, a supplemental agreement can be negotiated in which the delivery date is accelerated in exchange for some consideration to the contractor (usually in the form of p11ce increase). The Project Manager has several duties in this regard. First, the Project Manager is usually the one to identify the need for modification. This must be communleated (through a revised RFPA) to the Contracting Officer who will ask the contractor for a proposal. When the proposal is received, the Project Manager must assist in the evaluation of both the technical aspects of the , change a..d the price or cost estimate. Determining i price reasonableness is essentially a function of the Contracting Officers the Project Manager must often assist in this review of pricing and (in conjunction with NRC mana;;ement and other technical personnel) must decide if making the necessary funds available for the modification is wc rthwhile. Only the Contracting Officer can authorize a modification on behalf of the Government, which must be accomplished in writing. ( - As a final note, the settlement of an equitable adjustment as consideration for some unilateral modification is done through a bilateral modification (i.e., supplemental agreement). It generally takes more time and effort by everyone (the contractor, the Contracting Officer and the Project Manager) to i process two modifications than it does to process one which takes care of both the technleal change and the price or schedule adjustment. Consequently, even where NRC has the authority to issue a unilateral , order, it is usually better to ask the contractor for a ' proposal and to take care of everything by one bilateral modification. In an emergency, or if the contractor refuses to provide a realistle proposal, the Project Manager cun still have the Contracting Officer issue the unilateral order. Using bilateral, modifications l whenever possible (as opposed to unilateral orders) also helps maintain good relations with the contractor and generally leads to better or more responsive performance. 1 r' I l l VIII-1o l 1 l
- b. The Changes Clause ;
- 1. Provisions of the Clause There are several versions of the "Changes" clause, which are used in different contracting situations. The common elements in all of them ares (a) By written order from the Contracting Officer, the Government may order the contractor to perform the work differently from what was originally agreed (with several limitations)
(b) If such a change is ordered, the contractor must perform the contract as changed (c) If the change affects the price or time required to complete the work, an equitable adjustment must be made in the price and/or delivery schedule The limitations on the right to order changes are that , such orders must be within the general scope of the : contract and also within certain enumerated aspects of the contract. For Research and Development type work, chages may be made int (a) Drawings, design, or specifications I, (b) Method of shipping or packing and (c) Place of inspection, delivery, or acceptance In supply contracts, specifications may be changed , under the clause only "where supplies to be furnished , are to be specially manufactured for the Government." - r (2) What changes may be ordered The reference to specifications, designs and drawings is interpreted to include the description of services to be performed. Consequently, changes may be ordered in l the Statement of Work under this clause. All changes ordered must be within the general scope of the contract.1his is a legal distinction that is difficult i to define with precision. 'Ihe legal cefinition is that u l change must be "fairly and reasonably within the i contemplation 'he parties when the contract was I entered into." se cannot order a change in the l essential nature st the work as from a research effort { to a production contracts nor could NRC order a change from a simple testing contract to a research effort, i VIII-20 l
Massive changes to price are outside the general scope of the contract: so are increases in quantitles of items to be delivered on a supply contract. These desired l alterations in terms outside the general scope ace called "Cardinal Changes." The Contracting Officer, often with the assistance of the Executive Legal Director, must deal with this area of legal technicality. Any proposed change, even within the general scope of the contract, cannot be processed under the clause unless it is one of the enumerated areas. Acceleration of delivery schedules, for example, is not allowed. Such modifications may, however, be accomplished by bilateral agreements. Cardinal changes are legally new procurement. They cannot be properly made by modification even with the consent of the contractor unless all the provisions of law and regulation concerning competition are complied with,
- c. Procedures If a modification is found to be desirable or necessary, the Project Manager will prepare a Request for Procurement
- Action. Upon receipt, the Contracting Officer will determine if the action is permissable under the contract or if it constitutes new procurement. If the matter can be handled by modification, the Contracting Officer will generally request that the contractor provide a proposal for the change contemplated. The contractor's proposal will then be evaluated by both technical and contracts personnel to make sure that it meets the need et a reasonable price.
If so, a bilateral modification covering both the technical change and the equitable adjustment will be prepared. The unilateral rights of the Government are available for ust: in cases of emergency, when the contractor declines to provide a proposal, and when agreement cannot be reached on the proposal but action has become urgent. These unilateral rights are not often exercised for a variety of reasons. Foremost is that if a unilatersi modification is ordered, the Government will generally be responsible for the actual costs to the contractor for complying with the order. These amounts may be excessive in terms of the - oudget but NRC is responsible for them in any case. In a fixed-price contract, the adjitstment is an added expense ; that must be met. If the amount is higher than expected, the unilateral order becomes a financial burden. In a cost-reimoursement contract, the contractor is still ! i 1 VIII-21 l l j
required to stop work when the cost estimats is exhausted. If funds can be made available to complete the work, then the effect on NRC is monetary. If the funds ctnnot be found, then technical accomplishment is compromised. Unless a unilateral order is strictly necessary, it is better to obtain and evaluate the contractor's proposal before f modifying the contract. This gives the NRC an opportunity l to assess its options (e.g., find the funds, forego the modification, terminate the contract and start over with revised requirements; make further changes which reduce costs to offset the effect of the change.) The Project Manager may be asked to assist in evaluation of cost impacts by assessing the reasonableness of the resource l commitments proposed by the contractor. All Change Orders (unilateral modifications) must be in writing and be signed by the Contracting Officer. If not, then direction to the contractor it not valid under the terms of the clause. The contractor has the right, in fact the obilgation, not to comply with any change / order that is procedurally deficient.
- d. Constructive Changes if the Government takes some action that forces or inducts the contesetor to do extra work for which no proper change order was 'nsued, this results in what is known as a i I constructive change. Constructive changes can come from many sources. If the work statement cannot be l accomplished as written (impossibility of performance), the Government will be responsible for the costs of correction.
If work that meets all contractual requirements is rejected by an inspector, the costs of making the product acceptable to that inspector will be covered as a constructive change. If the contractor, acting in good faith, complies with instructions that are not formalized by a proper modification, he may be entitled to compensation for the , constructive change. All forms of constructive changes are errors and should be avolded. They not only create a great deal of unnecessary paperwork for everyone, they also tend to use up funds that are needed elsewhere. Project Managers should be particularly careful not to make any form of unauthorized commitment or informal modification to contracts, because these actions are very likely to result in claims agstret the Government which will have to be settled. The essential authority of the Contracting Officer to make modifications cannot be stressed too strongly. Personnel without this authority may not asV the contractor to VIII-22
-----_ A
J r J l perform work not required by the contract or to commit l
> NRC to pay for such work. Unnecessary claims and disputes ,
may arise when unauthorized personnel make such requests ' or commitments. Moreover, the Contracting Officer may 3 not be able to honor the commitments because of funding, i planning, or other restrictions. If contract modifications are needed, recommendations for making them should be , given to those who are responsible for initiating them; when ! l questions arise about authority to act, contract personnel ;
- should be consulted. ,
l Contractors sometimes suggest modifications to the , contract work. Frequently, the change will technically i improve %e contract services or deliverables, and the - } Project- nager may heartily like the idea. The Project l Manager must beware, however, of leading the contractor to , l believe the NRC is authorizing the contractor to proceed. l It is difficult if not impossible for NRC to deny the !
- contractor reimbursement for costs incurred in good faith, !
l especially where the extra effort involved is incorporated in i 4 the contreet end product and NRC gains the benefit of the i i change. Therefore, the Project Manager's action in such a case constitutes an improper and unauthorized obligation of , , public funds. Only NRC personnel who have been duly l ! empowered to act as contracting officers have authority to ; j obligate the Governm)nt to pay private parties for services j or products provided to NRC. .
- ( .
j Interpretation of the contract can often be as important as i authority to modify it. If NRC interprets the contreet in a way later held to be contrary to its true meaning, the ' interpretation is, in effect, a change which may entitle the l l contractor to a contractual adjustment. Therefore, when l I there are questions of what the contract means, contracting l l and legal personnal should be consulted. ; Walver is another problem that is related to informal t commitments. NRC la entitled to an equitable adjustment if the contractor's efforts are reJueed by a relaxing of the contract terms. A price reduction may be in order, for example, if twquirements are lessened or if the place of delivery is changed from destination to origin. These rights shoulo not be informally waived without an appropriate adjustment. Atsb, the advice of contracting and legal , personnel shouV x obtained. , it is important to ensure that all actions taken regarding a ' d contreet are in accordanee with its terms. '!he various clauses of the contreet provide the Government with suffielent latitude to accomplish almest anything that is needed. By using the rights in the contreet (like the Changes clause) properly, the effort can be redirected and } i VI!!-23 1 I 1
proper management maintained. But if the Project Manager deliberately or inadvertent.1y causes the contractor to have a constructive change, management of the contract is badly compromised. Contractor claims are a drsin on promised fulfillment of technical objectives, and lead to an adversarial relationship that undermines professional cooperation.
- 2. Cost Overruns on Cost-Reimbursement Type Contracts
- a. Limitation of Cost Every cost-type contract will contain a clause called "Limitation of Cost" or "Limitation of Funds". The clause provides that the contractor must make a best effort to complete the work within the cost estiinate. Once that ,
amount has been spent, the contractor is entitled to censu working. If he/she does continue, it is at his/her own risk. But the Government has the right to increase the estimated amount and thus to obligate the contractor to continue. Going over the estimate is called an overrun. The clause also requires the contractor to give the Contracting Officer advance notice of a possible overrun. > The clause provides thst notice must be given at that point
- in time when the contractor projects that 75 percent of the total estimated costs will be reached in the next 60 days.
Notice is also required if at any time the contractor has ;
! reason to believe that the total cost of performance will be .
i substantially above or below the estimated cost. A revised l cost estimate must accompany the notice. The Project Manager should not depend rolely on these ' 3 notification rewirements to maintain surveillance over cost : expenditures as they relate to the technical progress of the ' work. All too frequently, such nottees are not timely ! ) enough to permit the Project Manager to initiate i 4 appropriate remedial action. Therefore, it is important to ' j scrutinize thoroughly every report the contractor submits ! for any indication of an impending overrun. Moreover, the l
, Project Manager should use visits to the contractor's 1
- faellity as %portunities to detect technical problems, to become awars of the assignment of labor to the contract, or
, to observe any other indication of what may result in a I potentia' cost overrun. Any such situations should be
; brought immediately to the attention of the Contracting l
Officer.
- b. Monitoring the Contractor's Costs One of the best ways of catching a potential overrun early in performance is to begin thinking about it before the
- VIII-24 !
}
contract is ever written. The problem of overruns is easier to manage if the appropriate management systems are built t in from the beginning. Every Statement of Work should be thoroughly reviewed in order to determine areas of greatest uncertainty. One only uses cost-reimbursement contracts because some aspect of the work makes it impossible to acettrately project costs, if the SOW has been written with a work breakdown stmeture orientation, it should be possible to identify those tasks which are subject to the greatest uncertainty and conversely those which are firm enough that they could be done on a
- fixed-price basis if separately priced.
During proposal evaluation, the SEP should be looking at resource estimates and/or cost proposals in order to assist ; l the Contracting Officer in cost analysis. This technical analysis can also focus on portions of the proposal whleh ; give rise to greatest cost uncertainty. If the RFP has l required cost projections by task, this focus is not difficult to obtain, By the time the contract is awarded, the Project Manager should have a firm grasp on the critical points in the proposal which will require the most monitoring effort. Then when progress information is submitted, one can reasonably project trends in costs before one is faced with a ( certain overrun situation. , 11ypothetleally, let us say that of Tasks 1 through 10, Task ] 2, Task 5, Task 7 and Task 9 are all subject to great pricing uncertainty. The others are firm enourth to have been proposed with a minimum of contingencies. If one finds that, at the completion of Task 4, the total cost , to date is within the estimate, everything seems fine. But if l Tasks 1, 3 and 4 were all over budget while Task 2 was ' under, this contract may well be headed for troubles. Task i 2 was the nertain one - maybe the contractor got lucky. l The other t tks should definitely have come in at er near j the budgeted amounts but did not. Since the controllable ; items were not controlled, it is likely that the final result l will be an overrun. Conversely, if the relatively firm tasks were all completed at or near budget but the highly uncertain task was overrun, there is less reason for concern. We have assumed that Task 2 costs would be subject to relatively wide variation. There i is a reasonable chance that or.e of the later inherently , l uncertain tasks will come in below the estimate. One should i 1 ( . VIII-25 l i i l
plan on more careful cost monitoring for the emainder of performance-but there is no reason yet to assume that an overrun is pending. ; The principle here is that not every dollar has the same significance. Overruns on tasks that ought to be controllable are very difficult to make up. Overruns on highly uncertain tasks should be viewed with alarm only if they are part of any overall pattern or if they are outside a reasonable range of variation in the type of contract used. The preparatory effort in reviewing the Statement of Work and the proposals and in planning for administration serve to > establish a standard by which cost performance can be judged. Too often, no such standards are set. With only a total estimated cost project, over-runs are not seen until it is too late to take any effective action. The Project Manager needs intermediate points to evaluate cost performance. Without them, overruns come as surprises-and nasty ones at that. Despite the notice provisions of the Limitations of Cost clause, one cannot really count on getting notice from a contractor when an overrun is likely to occur. Contractors are optimists; they always think that there is a way to make it up later. Even if they know there will be en overrunt some feel that it is best to hide the fact as long as possible. Who likes to admit to what will be perceived as a failure , even if it is cutside one's controit Consequently, it is ' necessary for Project Managers to make independent assessments as to whether there is a reason to believe costs will exceed the estimate. The more the Project Manager prepares for monitoring, the l better the chances that problems can be spotted--and maybe corrected-before they reach crish proportions. It is also worth noting thtt the same logic applies to DOE Lab agreements. Overruns are real and bothersome no matter who is doing the work. The methods of spotting them early do not differ by performing organizstion.
- c. Actions in an Overrun Situation l When faced with a cost overrun, the Project Manager must l take appropriate action in consultation with the Contracting Officer. Depending on the circumstanets, any one of following courses of action may be recommended by the Project Manager and initiated by the Contracting Officer e Terminate the contract for convenience of the Government before the overrun occurs.
VIII-26
e Modify the contract to decrease the technical effort in order to eliminate the need for additional funding. f' e Increase contract funding to permit completion of the work. If it is determined that the work should be completed and if additional funds are available, the Project Manager prepares the required supporting documentation snd forwards it through channels to the Division of Contracts.
- I e Some combination of the above (e.g. terminate part of
- the work and add funds still needed).
Early investigation of overrun situations helps to preserve NRC options. If nothing is done until all the funds have been spent the choices are effectively reduced to putting up the money or giving up the project. NRC personnel should avoid any informal action that would lead a contractor to exceed his contract cost 11mitat!on. Communleations from NRC personnel should avoid any implications that might justify an assumption by the contractor that he/she may incur costs beyond the existing limitation. ,
- d. Conclusion l
' It should be noted that an overrun is not necemarily a l failure by the performing orTanization to manage the I
effort. One uses cost-reimbursement contracts preelsely because of great pricing uncertainties inherent ir the l effort. Ideal pricing will result in a cost estimate that reflects the most likely cost of performunce. With ideal pricing, half of all projects would result ir. overrunn. Pricing i it: rarely idealt contingencies are built in from the outset; l portions of the work are sometimes slighted to keep costs within the estimate. Even so, an overrun should not automatleelly be viewed as a problem with the contreetor's management. NRC is more likely to get the proper nottees from contractors if a healthy attitude toward overruta is communloated. Once the contract is signed and overrun does occur, it is a mutual problem to be resolved cooperatively. Finally, one must miso consider the effect of informal changes on contreets, if the Project Manager has induced or permitted performance outside the terms of the contreet without getting the proper adjustment from the Contreeting Officer, the final result will likely be an apoarent overrun. I VIII-27
Such situatior.s should be studiously avoided. Rightly or wrongly an overrun does tend to be viewed as a contractor failure. ' Thus, informal changen work an injustice to the contractor. Informal changes also compromise the Project Manager's ability to monitor contract performance. Every time there is a chenge without an adjustment, any monitorirq plans are invalidated. Proper control of costs requires a meaningful base for measurement-informal changes tamper with that base.
- 3. Contract Terminations
- a. General Most NRC contracts go to physical completion and closecut with satisfactory results. In some instances, however, there may be reason to terminate a contract short of its completion.
There are two types of terminations: Termination of the Convenience of the Government Termination for Default Termination for Convenience of the Government means l exactly what the title implies: NRC can stop a contract whenever it believes that the action will serve the best interests of the Government. Terminatir>n for Default is an action taken against a contractor who is not performing in i accordance with the terms of the contract. If a deelslon is made to terminate a contract, the program office should immediately inform the Contracting Officer of the need. Delays in processing terminations usually involve extra costs to NRC to compensute contractors for unnecessary work that was performed during the period of delay. The Project Manager usually initiates the termination by submitting a termination request (an internal memorandum or letter) with appropriate approvals to the Contracting Officer. In essence, the request should state whether the termination is to be made for Convenience of the Government or because of default by the contractor, and whether the termination should be partial or umplete. (This latter distinction applies mainly to termination for convenience; most default terminations direct the contractor to stop all work under this contract.) A contract is considered completely terminated when the termination VIII-28
notlee directs thct no further work be performed. A partial 3 termination is a termination of only a portion of the
; remaining work under the contract.
The responsibility for executing the termination rests with the Contracting Officer, who draws up the notice to the contractor, clears it for adequacy with the Office of the Executive Legal Director and sends it to the contractor. The termination becomes effective when the contractor ' receives the notice of termination. i ;
- b. Termination for Convenience (1) Contract clauses All types of contracts contain essentially the same provisions relating to the right of the Governmont to ,
terminate a contract. The Government may terminate l the contract, in whole or in part, whenever the ! Contracting Officer determines it is in the best i interests of the Government. The notice must be in i writing and meet other procedural requirements. When i the contractor receives a proper notice, he/she is
, obligated to stop work to the extent directed, to ,
preserve and protect property generated under the t contract, and to prepare a financial settlement proposal. , ! i The major reascns for terminations for convenience ; include tiie following (a) The item or service is no longer needed I (b) The item has become technologically obsolete l t !
- (c) General cutbacks in operations 1
3 (d) Work under a cost type contract does not appear - l promising l (e) Funds allocated to a contract are needed for higher , { priority work elsewhere in NRC r Thera. is effectively no limit to the Government's right ! l to terminate. l 1 i j (2) Settlement with the Contractor ! J : i When a contract is terminated for convenience, NRC i makes a fair and prompt settlement with the ' contractor. The settlement pays the contractor for the , preparations and work on the terminated part of the ! } , VIII-29
- l
, +
,- - i
contract and includes a reasonable allowanee for profit and settlement expense, it does not, however, include any expected profits on work that was not performed before the effective date of termination. Nor does it cover resultant damage. The involvement of personnel other than the Contracting Officer in the settlement process is minimal. As requested, however, such personnel assist the Contracting Offleer by reviewing the contractor inventory schedule for potential NRC use of any listed items and by providing information on matters affecting the amount of profit or fee to be paid for the completed work such as the complexity of the wotk, the contractor's performance effielency, the quality and quantity of Ms work, the risks assumed by the contractor, and the contractor's cooperation with the Government. Sometirnos estimates of the percentage of the completion of the contract work are also neWed in arriving at the termination settlement.
- c. Termination for Default (1) General Contracts for services and supplies may be terminated for default in whole or in part whenever the contractor falls to perform the contreet in accordance with its terms. However, contracts with educational or nonprofit institutions may be terminated only for convenience since such contracts do not contain default provisions.
(2) Fixed-Price Contracts Fixedyrice contracts may be terminated for default if the contractor falls (1) to perform the contract work within the speelfied time, (11) to perform any other provisions of the contract, or (ill) to make progress, thus endangering performance of the work in accordance with the contratt terms. These potential defaults may be offset by excusable delays, however, as discussed below. Before a contract can be terminated for default under (!!) and (111) , above, the contractor must be given written nottee stating the failuru involved and allowing him at least 10 days to eure it. If the contractor does not show eause why the centract should not be terminated or cure the failure within this grace period, the contreet may then be terminated for default upon issuance of a second nottee. VIII-30
(a) Effect of Default When a contract is terminated for default, the ( contractor is not entitled to compensation for work i performed prior to the termination and not yet acceptcd by NRC, and the Government is entitled to repayment of any advance or progress payments that apply to such work. The Government may, however, at its election and by proper action, order the contractor to delivery any completed or i partially completed work done or acquired for the terminated part of the contract. The contractor is also obliged to protect and preserve any property ; in whleh the Governmerit has an interest, as directed by NRC, and is entitled to compensation l for any expenses involved in so doing. (b) Right to Buy Against the Account of a Defaulted Fixed-Price Contractor , When a fixed-price contract is terminated for default, the Government may repurchase the same or similar services or items called for by the 1 terminated contract from another contrsetor and hold the terminated contractor liable for the j excess costs of the replacement procurement. ! However, reprocurement action must be initiated ; as soon as practicable after the default l termination and at as reasonable a price as i possible, considering the quality and time factors. (c) Wrongful Default if it is later determined that the contractor was l not in default, or if there was any form of procedural error (i.e., less than 10 days notlee was : given) the action is considered a termination for s the convenlence of the Government. I 1 (3) Cost-Reimbursement Type Contracts l l ! ) (a) The right to terminate i 'he provisions for default termination contained in cost-reimbursement type contracts (except those with educational and nonprofit institutions) are I part of the general Termination clause, which 3 covers both convenience and default terminations. < Excusable contractor delays are described in a separate clause entitled Excusable Delays. I !( VII!41 I
There are only two grounds for default of a cost type contracts Failure to make progress so as to endanger performance
- Failure to comply with other terms of the contract.
A failure to deliver products or services in accordance with the specifications or s'.atement of work is not grounds for default. This is proper since, under a cast-reimbursement contract, the contractor only promised "best efforts" and did not - guarantee successful completion. The notice period of at least ten days for the contractor to show cause or cure the defect applies to all potential default actions on cost-reimbursement contracts. (4) Effect of Default The distinction between a default and a convenience termination is not so great under a cost-reimbursement contract as it is in the fixed-price situation. Whether the contract is terminated for convenience or for default, the cost-reimbursement contractor receives all allowable costs incurred up to the time of termination, : aad he is not llaMe for reprocurement costs if the government purchases replacement services or supplies. This main differe.nce between the two types of termination is in the settlement arrangements. If a cost-reimbursement type contract is terminated for convenience, the contractor is generally paid a percentage of the fixed fee in proportion to the percentage of the work completed. On the other hand, if a cost-reimbursement type contract is terminated for default, the fixed fee payable is proportionate to the number of deliverable items accepted by the I Government. If the contract is terminated for default, l the contractor is generally not entitled to the expenses ' of preparing a settlement proposal, but is entitled to these expenses in the case of a convenience termination.
- d. Excusable Delays
, (1) General Under certain circumstances, a contractor is not held fully responsible for the delays in performing contracts. These are listed as part of the fixed-pcice vm-32
i Default clause and in a separate Excusable Delays clause in a ecst-reimbursement contraut. The general rule is that delays arising from causes l beyond the control and without the feult or negligenes of the contractor are excusable. Such situations, as listed in the clause, include fire, flood, strikes, freight embargoes, defaults of subcontractors (but only when f the subcontractor default is itself excusable and the contractor was unable to find a replacement for that subcontractor), and acts of the Government in either its ' contractual or sovereign capacity. (2) Effect of excusable delays ; j If a delay is excusable, the contractor may still be 4 terminated for default for a failure to deliver on a
! fixed-price contract. However, if such action is taken,
- the contractor will not be liable for excess costs of ,
reprocurement. In some instances, where the 1 Government has contributed to the delay, a default 2 action may be found to be improper. In that case, the action will be converted to a Termination for Convenience. Generally, unless there is true urgency, the delivery schedule will be extended by the period of the excusable delay. l ( The amount of delay excused will not extend beyond 1 that time that the excuse prevents performance. For ) example, if work at one location is halted for an excusable reason, this does not authorize diverting effort at a second location which extends the actual delay period. j in the cost-reimbursement environment, excusable i j delays of course affect only the determination of
- whether progress has been made.
- 4. Disputes and Appeals l
! a. The Disputes Clause j Every NRC contract will include a Disputes Clause in j
accordence with the Contract Disputes Act of 1978. Under the clause, a disagreement related to performance of a contract which cannot be settled by negotiation must be i submitted to the Contracting Officer for a final deelslon. ! l The contractor must abide by the deelslon of the ;
; Contracting Officer (except in some rare tre'.ances of Government breach of contract). '!he contractor does, i , however, have a right of appeal either to a Board of l ,
Contract Appeals set up within a Federal agency or the U.S. ;
! i Claims Court.
I ! i VIII-33 i
I
- b. What is Covered i Anv disagreement between the contractor and the Government about the contract is covercd by the Disputes Clause. Common sources of disputes are: the amount of equitable adjustments for Change Orders, whether a termination for default is proper, disallowed costs under mst-reimbursement contracts, and interpretations of the Statement of Work or specifications during contract performe.nce. Any time there is a disagreement between the contracting parties, it may be resolved under the Disputes Clause.
- c. Procedures I
Details of the handling of a dispute are determined by the l nature of the issue. In some cases, the Government will be I trying to enforce what it views as a contractual right upon i the contractori its others, the Government will be defer. ding ! Itself against a claim by the contractor for a price increase or delivery extension; in still others, both parties will be seeking clarification about the details of the work which cannot be resolved otherwise. The common element in every case, however, is the authority of the Contracting l Officer to act as the agent of the Government. Other
! personnel, including the Project Manager provide advice and
- assistance
- but the ultimate responsibility for settling contractual disagreements lies with the Contracting Officer. )
i d. The Project Manager's Role in Disputes The Project Manager should take steps to avoid the initiation of any disputes. This starts with the dr'afting of i the Statement of Work. If all the contractual documents
- are in proper shape, it is less likely there will be ,
disagreement over the terms. Further, during contract administration, the Project Manager should ensure that ! contractual terms are properly enforced on the contractor ] and that no actions of the Government generate claims, i j Secondly, if a disagreement does arise, the Project Manager must provide the Contracting Officer with all necessary 1 information and assistance to negotiate a settlement with 1 the contractor. Every issue that can be settled by agreement should be settled, provided the Government does
- not compromise its essential contractual rights. Since many ,
1 of the issues that arise, including settlement of pricing : questions, have a technical basis or component, the input of !
,- , the Project Manager is often critleal to a sound analysis of !
i the problem. ' \ i l VIII-34
- - , - - - - - , , _ - - - - - - , . . _ . , , _ . -. . + - - - . - . . _ , . . . , - - -
If negotiation with the contractor does not solve the i problem, the Contracting Officer must make a final decision ( as discussed below. If the contractor will not settle for the Contracting Officer's decision, then the appeal process begins. At that time, the Project Manager must assist the Contracting Officer and legal counsel to prepare the Government't; position. This often requires that the projcet office prepare detailed statements of activity under the contract in order to support the Governmer.t position.
- e. Final Decisions of the Contracting Officer When negotiation falls to settle the matter, the Contracting Officer must make a final decision. There are a number of legal requirements for the form and time of that decision.
The Contracting Officer is supposed to assume the position of an impartial arbiter rather than a party to the failed negotiations. This is a difficult task. But in so doing, the Contracting Officer is supposed to weigh the evidence of both sides and come to reasonable comptomises if there is any doubt. Thus, in order to support the decision process, the Contracting Officer needs all of the facts from the Project Manager plus the reasons why certain actions were taken,
- f. The Effect of a Final Decision The Contracting Officer's decision is binding on the contractor. If the Contracting Officer determines that certain we rk is really required by the SOW despite the contractc-'s contrary position, the contractor must perform as directed. If the Contracting Officer decides that a Change Order should be performed for $5,000 but the contractor claims $20,000, only $5,000 will be paid and the contractor will be obligated to perform. Even if the decision is appealed under the Disputes Clause, the contractor must abide by the decision of the Contracting Officer unless and until the contractor wins the appeal.
One of the most important consequences of the Disputes process is the Government's interest in obtaining work needed. A failure of the contractor to abide by a final decision is grounds for Termination for Default in either a fixed-price or a cost-reimbursement contract. These procedures minimize the risk of serious program disruption from disagreements that may come up during performance,
- g. Appeals 1
The Project Manager has a limited role in the process of l appeals to the final deelslon of the Contracting Officer. I l t VIII-35
Unless additional facts are needed, either in the form of a report or possibly as testimony before the Board of Contract Appeals or in the Courts, the Project Manager's role should have been completed before the final decislan was made. That is, from the outset the Project Manager should provide the Contracting Officer with all of the relevant facts upon which to make a determination. However, the Project Manager must cooperate with the Contracting Officer and/or legal counsel to ensure the best defense of the Government position.
- h. Conclusion The Disputes Clause puts the Government in a position of reat power as opposed to the contractor. Although the system is designed to ensure the maximum degree of fairness to the contractor consistent with the needs of Government for timely performance, it is possible to abuse the Disputes process. If the contractor must prosecute a claim or defend against a Government claim, there are many expenses that must be met. The costs of such prosecution or defense are not paid to the contractor if he wins a dispute or an appeal, unless the contractor is covered by the conditions specified in the "Equal Access to Justlee Act." Thus, the Government can use its superior resources and the position of the Contracting Officer to force bad settlements or decisions on contractors.
Such practices are not common. But there is sometimes a ten ptation on the part of Government personnel. That temttation should be resisted. If contractors are not treated fairly in the spirit of the Disputes process, they will tend to leave the Federal marketplace. This limits competition. It may deprive NRC of a needed source for goods and servlees. Some compromises, even concessions, by the Government in the name of fairness are a small price to pay for sound business-like vendor relations which help the competitive basis of later procurement. J. Project Closeout and Performance Evaluation The job of project administration-seeing that all of the obligations of the parties under the contract or agreement are carried out-is brought to completion by the process known as "closecut." This process is triggered by "physical completion" of the project, that is, the delivery of all required items or the performance of all' required services. j The closeout process is a formalized one in NRC and generally considers the toples covered below: l l Vul-36 l
i 1. Physleal Completion !( When a project is "physically completed" and the principal 4 undertaking is completed, there usually are obligations of both i parties that remain unfulfilled. Under cost-reimbursement type projects the NRC will have to make final payment on the ! completion or final voucher. Before making the payment, the i NRC will need to make a final audit, for contracts but not l agreements. Sometimes a change order has been issued, but the i contractual obligation to make an equitable adjustment has not J been fulfilled. Closeout, therefore, includes the identification of l all setions required by the contract or agreenent that remain l uncompleted at the time of "physleal completion" and following up to see that they are taken or accounted for. l a l
- 2. Administrative Closeout
) Closeout also includes attending to outstanding i d ninistrative matters that are not unfulfilled obligations. For example, what j i should be done about leftover Government-furnished itemst it is
! up to the Government to find out what . 'left over and to decide i on disposition instructions. Shall they be transferred to the i
con 6ractor or removed for Government storage or usef Project ! Managers play a major role in formulating these deelsioris. i Another administrative matter needing attention is the funding J status of the project. If the total estimated cost was $60,000, but the actual allowable costs incurred amounted to only ( $56,000, then the excess or $4,000 of the originally obligated
,I amount should not be left "tled up." It should be deobligated and
! made available for other use. i l Finally, closeout includes an inventory of unresolved issues, j These may include disputes as to allowable costs, or to i entitlement for amounts assoelated with equitable adjustments. l While the project cannot be closed out fully while litigation is i pending, the overall process for closeout pinpoints matters that remain open and why. J The prompt initiation and completloo of closeout avoids losing the benefit of getting information frcm individuals who were j personally involved with performing ed administering the 1 project. After personnel have changed or their recollections of
- the project have become hazy, it becomes much more difficult to resolve any open matters.
- 3. Final Performance Evaluation i
As part of closeout procedures, the Project Manager will
-l complete an evaluation of the performer's overall technleal peri 'mance. For example, even though the contractor seemed to n.eet all scheduled requirements, was there concern whether adequately qualified personnel had been assigned, and if not, was
! Vm-37 i j
I the quality of performance harmed? Cost and schedule l performance need to be assessed in context with overall technical performance, and usually the three elements are not separable. A concise, written report of the evaluation should be made and kept on file for future reference. This report will be prepared by the Project Manager. The following areas should be touched upon to provide useful data for future source selection activities.
- The compliance with terms and conditions governing the ,
quality of the end item or service. .
- .The success in meeting schedules.
- The capability of the personnel assigned to perform.
I - The ability to perform without direction or assistance from NRC. 2
- Recommendations to personnel considering the activity for
- further solleitation.
Final settlement is made only upon completion of all requirements-inspection and acceptance, final audit (if appropriate), verification and disposition of residual Government property, and receipt of releases. K. Administration of DOE Agreements !
- 1. Responsibilities for Administration NRC is responsible for the results of every NRC project no matter who performs the work. This is equally true of work i performed by a contractor or a DOE Lab.
NRC Bulletin 1401-2, "Project Management Responsibility for l ) Goods or Technical and Research Services Acquired under l ] DOE /NRC Memorandum of Understanding (MOU)" outlines the l . steps required for effective administration of an order to DOE.
- In accordance with the Bulletin, Office Directors have the ultimate responsibilities for management and appropriate expenditure of funds allotted to DOE Lab work. Each Offlee Director, however, appoints a Project Manager to oversee efforts on each particular project.
Paragraph V.C. of the Bulletin lists the duties of a Project Manager including the following items. (1) Plan, initiate, control and recommend modification of DOE work orders: VIII-38 1
i (2) Review cost vouchers and recommend approval or disapprove.1; (3) Make final acceptance of the DOE work order product; ( (4) Participate in administrative closeout; (5) Act as the primary point of contact between NRC and performing organizations; (6) Provide technleal direction to performing organizations (but such technical instructions may not constitute new work ' assignments or make changes which result in adjustment to costs or periods of performance); (7) Ensure compliance with work order terms and conditions; (8) Review all status reports; (9) Assess progress against milestones established in the SOEW; (10) Recommend and initiate any stop work orders or terminations; I (11) Review financial projections and rates of expenditure to l l aasure that work can be completed within budget; (12) Review subcontracts and purchases by performing organiza-tions in light of NRC polley; and I (13) Maintain adequate records relating to performance. . If this list of functions is compared to the contract administration duties of a Project Manager for a commercial contract, one will I find that the Project Manager for a DOE order actually has more i to do than the contract Project Manager. Several functions, partleularly those related to project costs and terms and conditions , of the agreement, are left to the Project Manager for a DOE order i but are shared between the Project Manager and the Contracting Officer under a contract. J ;
- 2. The Need for Monitoring !
Some people have the tendency to think that DOE is a part of the ; i same family, whereas a contractor is not. Consequently, they feel l that there is less need to monitor the DOE Lab. This is a mistake. l Monitoring is not a matter of punishment-nor should it be a i matter of suspielon. Monitoring is a management function and l J every project must be managed to ensure the best available results. ' s ] Monitoring discovers the facts of performance and then comperes i progress to both the SOW and the needs as it may have developed i since the agreement was signed. If there is a variance between
- performance and expectations, as stated in the SOW, there may be
! l VIII-39 l
l , t l l l a need for corrective action. If there is a variance between l performance (or expectations) and current needs, there may be a need for a change or a termination. This is true no matter who I performs the work. Management of a project conducted in-house is done the same way. The biggest problem in all research type efforts is that the people performing the work tend to pursue the lines of inquiry in which t they are interested-and those may not reflect the needs of the ! sponsoring office. A contractor's own management has some l reason to restrain such redirection of work effort by the researcher: DOE Labs (and educational institutions under contract) l have less. When monitoring a DOE Lab's work, there is no need to watch for profit-seeking diversions of effort as one might with a commercial contractor; but there is a greater need to watch for academic digressions into lines more interesting to the researcher. , 3. Terms and Conditions of the SOEW Exhibit 4 of NRC Manual Chapter 1102 provides the terms that will normally be applicable to an order for DOE work. These terms may be altered or supplemented-but normally they will apply as presented. 2 Items 1, 2, and 3 deal with security. DOE and the Labs agree to adhere to controls over the handling of any classified material which may be generated in or needed for performance. Item 4 requires DOE to protect any confidential or proprietary ) Information received from contractors which may be supplied i under the SOEW.
- Item 5 is a restriction of work for others to avoid any real or ,
apparent conflicts of interest. Item 6 requires DOE to provide NRC with reasonable advance
, nottee before entering into any subcontrast for a major or j significant technical service not already disclosed in the original , proposal. If such notification is received, the Project Manager ; , must review the proposed subcontract to ensure that it is in the ;
] best interests of NRC. j
! Item 7 provides for stop work orders. Under this provision, NRC j has the right, by an order to the DOE Contracting Officer, to ,
require that the contractor (the Lab) suspend performance for a ststed period of time. This right would be exercised if NRC were ! considering either a termination or a major change in the project in ! order to avoid incurring costs while a decision is pending. If a stop ! work order is issued, the Lab must take all reasonable steps to minimize costs during the period of work stoppage. NRC must, however, reimburse DOE for any reasonable costs incurred and i VIII-40
must allow an extension to the performance period or an increase in cost, if needed, when work is resumed. The provision is a slight modification of a clause that appe...s in contract general provisions. { Items 8 & 9 provide for treatment of patent rights giving DOE the first right to protect any inventions made during NRC funded work. Item 10 provides a limitation of funds. DOE is required to notify NRC whenever it has reason to believe that total funding required will exceed the amount obligated on the NRC Form 173. NRC is not obligated to pay for any costs in excess of that amount without prior approval. The operations of this provision are functionally equivalent to the handling of a cost overrun under a cost-reimbursement type contract. The major difference between this provision and a contract is the possibility of reprogramming funds from other FIN's as may have been authorized in the initial order. Notice provisions for reallocations of funds are included. Item 10 also provides for limits on and notices regarding the time needed for performance of the work order. The 173 may state either an estimated or a fixed period of performance. If the ; eriod is estimated, DOE is authorized to continue work (within available funds) until the project is completed. If the period is fixed on the 173, effort beyond the end of the work period (even within available funds) must be authorized by issuance of a new NRC Form 173. If the period is not extended, an NRC Form 173 will be issued deobligating any unexpended balance of the funds for the project. Item 11 covers bl31ng for services rendered. Under Bulletin 1401-2, the Project Manager must review each monthly billing within five workdays of receipt and recommend approval or disapproval of costs to the Division of Accounting. The major focus of review is to ensure that costs are reasonable and that costs and work are within the parameters of the SOEW. This is functionally equivalent to checks for reasonableness and allocability except that the Division of Accounting performs the function of the Contracting Officer in the contract environment. Item 12 covers technical report requirements. his is a particularly important area. The reports required under the order will be listed in the Statement of Work. his provision gives the standards for technical reports, format constraints, printing and distribution instruction. The standard terms do not in any way ! remove the necessity for considering reporting requ'IEments in the I drafting of the SOW. NRC must inform the Lab of what information is needed during performance to allow for proper monitoring of progress. t VIII-41
5 l One of the more common complaints about Lab efforts is that they do not provide prompt and p.% er reports on their progress. Sometimes it seems NRC funds are treated in the manner of a grant to be used for any reasonably related work as determined by the funding recipient. If tne Lab is not held to reporting require-ments, it, like a contractor, will normally nr' volunteer to generate them. Action to remind the Lab of its obilgation to meet the reporting requirements of the SOEW is necessary whenever any of those requirements is not met. The terms and conditions of the SOEW do not include ar.y specific right of termination by NRC. However, a right to termination of work is inherent in the Stop Work and Limitation of Funds provisions and is expressly provided for in the DOE /NRC Interagency Agreement on Budget, Funding and Financial Management Responsibilities dated October 27, 1978 which ' supplements the basic Memorandum of Understanding. In the event of a termination, the effect is the same as with a Termination for the Convenience of the Government in a contract situation. NRC may terminate whenever it is ' determined to be in the best interests of the Commission, but NRC must pay the cost of performance up to the date of the termination plus any other expenses caused by virtue of the termination action.
, Under the interagency agreement on budget and funding, NRC also has the right to make major program reductions equivalent to a partial Termination for the Convenience of the Government under similar terms. j lt shoul' be noted that the standard terms of the SOEW do not contain any provision equivalent to the Changes clause of a contract. NRC does not generally have the right to order the Lab (through DOE) to change the method of performanec. The provisions of Bulletin 1401-2 specifically prohibit any technical directions to DOE that affect costs or period of performance (Stop Work Orders are actually a different subject). Any change during performance would require the issuance of n new NRC Form 173 with the concurrence of DOE-there is no unilateral right to the changes. One exception, under the Limitation of Funds terms of the order, is the right to issue a change to the scope of work in the event of a cost overrun.
The Project Manager has the primary responsibility for ensuring compliance with these terms and for initiating corrective action under them. Much of the monitoring and other administrative effort is the same for a Lab as for a contractor. The nature of the legal relatioriship, however, creates some differences. NR C's agreement is with DOE, another Government agency: the actual work is performed by the Lab-which is either a part of DOE or a DOE contractor. Some of the unilateral rights of NRC under contract do not exist with respect to the Labs since action must be mediated through the DOE Contracting Officer. in practice, the VIII-42 t __ _ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ - - - - -
_ _ _ _ . _.. _ - . - _ _ _ _ _ _ . _ . __. _- . _ _ _ _._ _. . _ _ _ = . _ _ _ _ _ sama flexibility exists to make changes or to take other corrective d actions 4ut only because DOE consents to cooperate closely with t NRC in meeting programmatie goals. i ) A DOE Lab agreement is subject to the same types of management f concerns as a direct contract written by NRC. Effective ! l performance requires the proper drafting of the Statement of ( Work, care in the selection of a source, effective monitoring of the
- performing organization's progress, and sound administration !
- within the terms of the agreement. The DOE Labs are a valuable l
resource which is readily available to NRC. But care and !
- discretion are still needed if the Project Manager is to obtain sound l
- results with the use of NRC funds, L. Project Completion i
i
- Upon the completion of project work, Project Managers should inspect (or have inspected to their satisfaction) all work promptly after !
delivery to the extent necessary to determine its acceptability. 1 When the Project Manager determines that the work is complete and [ i conforms with the technical requirements of the contract, and when , all items required by the contract have been submitted and are I , determined to be acceptable, the Project Manager notifies the ' ] Designating Officer or the Contracting Officer in writing. In i reporting completion under a project, the Project Manager should take into account such requirements as reproducing and publishing a final .j ( report, if one is required by the contract. ' i i l . ! i i : I i 1 ! 3 : J l t i
- i I
! vm-43 I 1 O l a,. - - . , . - . . - - - - _ - - - . , ,.__--,,_,,--,_,c----,,,_-.- ,-
EXERCISES
!!NSTRUCTOR'S COPY!
Page { Exercise 1 Evolution of an NRC Project 1 Exercise 2A Statement of Work 3 Exercise 2B Evaluating Statements of Work 5 Exercise 3 Work Breakdown Structure 13 Exercise 4 Cost Estimates 15 Exercise 5 Government Acquisition and the Law 17 Exercise 6A Types of Contracts: Financial Consideration 19 Exercise 6B Task Order Contracts 21 Exercise 7 Technical Evaluation Criteria 23 Exercise 8 The Process of Source Selection 25 Exercise 9 Choosing Acquisition Methods 33 Exercise 10 Reviewing Progress Reports - Changes? 37 Exercise 11 Key Personnel 41 Exercise 12 The Cost Overrun 43
- Exercise 13 Decision Making Under Cost Constraints 53 Exercise 14 Contract Modifications 55 Exercisc 15 Progress Review of DOE "Contract" 57 i
. ~ _ _ _ . - . - __ . .-_ . -- - . -. .-
Exercise 1-Evolution of an NRC Project
- l. Name the document that states the Commission's guidance for the ,
planned accomplishment of the entire NRC mission, and which forms a basis for the NRC's annual budget to the President and Congress. d
- 2. List the purposes for the NRC's Review Groups: .
I l a. b. c. i d. l 3. Suppose you will need to initiate a three-year project which you have been 3 able to place in the budget plan. When Congress appropriates funds to : NRC, the funds are assigned on a no-year basis. How does this affect your projects i l i
- 4. List at least two reasons it is difficult to fund a programmatic project the j day the project is conceived.
4 I f 5. Define a project: ; 4 i , t i l i i i j i 1 1
)
i j ( i 1 l - l C
1 l 1
- 6. Define a Project Manager: .
- 7. When is a Project Manager a Project Officer?
- 8. List the four elements of a contract.
a. D. c. d.
?
\
] i 2
Exercise 2A-Statement of i
- 1. The Government's request for proposals (offer (s)] specify a needed design or performance requirement; or a combination of the two. Determine which of the following examples indicate a design or, performance requirements
- a. design requirement
- b. performance requirement A contractor is instructed to build a wall according to an attached detailed specification. The wall will be built precisely according to the specifications.
_ A contractor is instructed to research and develop a report that will accomplish the Government's specified objectives and criteria.
- 2. A firm fixed-price contract places the maximum cost risk on:
- 3. A cost-raimbursement contract places the maximum cost risk on:
i
- 4. The common elements of a written Statement of Work (SOW) are
- 5. Where would a contractor look in the SOW of the contract to determine how the Government would evaluate the contractor's performance?
- 6. A good statement of work is characterized by what three words:
I 3
Exercise 2B - Evaluating Statements of Work The attached statement of work was taken from an actual Nuclear Regulatory Commission procurement and has been modified for purposes of an exercise. Presume that you have recently been assigned respons!bility for the preparation of the statement of work for this project. Your predecessor has left you with the following draft which you now have the opportunity to modify if necessary. Review the S.O.W. and be prepared to discuss what changes, if any, you feel would be beneficial based on the following questions: i
- 1. Is this a design or a performance SOW 7 l
[ l P
- 2. Are the elements of a SOW adequate and clearly defined?
I 1 l I 5
i Exercise 2 (Continued) f Article I Statement of Work 1.0 Background ; As part of an overall program to evaluate the radiological conditions existing in areas where radioactive contaminants were disposed of by land burial, the NRC will survey two currently licensed facilities where i material was buried pursuant to 10 CFR Part 20 and two landfills which : are known to contain radioactive residues. The objective of this project is to clearly define the radiological conditions at the disposal sites. ] 2.0 Work Required The contractor shall furnisn the necessary qualified personnel, facilities, material and services to perform radiological surveys as described below for the following sites (listed in order of priority): j 1 - West Footh'ib Landfill, Wayne County, Michigan 2 - Tyler Park Landfill, Navoo, niinois 3 - Atomic Fuel Services Burial Ground, Philadelphia, Pennsylvania [ li 4 - Mariner Engineering, Inc., Burial Ground, Pittsburg, Pennsylvania i For each of the above listed sites the following documents will be ! prepared: 1 1-A brief report documenting the condition of the site as j determined by the contractor during the preliminary site visit. J ) 2 - A radiological survey plan for the site. 1 j 3 - A more lendhy complex report of the contractor's formal radiological survey. An example of such a report is furnished as Exhibit A. Note: Exhibit A has not been included as part of this exercise. l Please presume that it lists all items know or likely to be needed for this project. 1 4 j 7 i i
Exercise 2 (Continued) 2.1 Preliminary Site Visit The contractor shall make a preliminary visit to each site within two weeks after contractual award. The purpose of the visit is two-fold: l first, to review the known history of each site with the license or local ! officials and to inspect the property and make exploratory radiation ! measurements in areas identified as housing licensed or previously ; licensed material and second, to evaluate the results of these discussions ! and measurements. 2.2 Development of Radiological Survey Plans ! A radiological survey plan shall be developed for each site. Because of . the wide variety of past operational activities as well as radioactive ; materials present at each site, it may not be possible to conduct formal surveys in accordance with a uniform survey plan. Just as any assessment , activity is highly site specific, such is the case for radiation i measurements and the collection of environmental samples. Within a l month after the radiological survey plan is completed, an appropriately ! staffed radiological survey team shall be mobilized by the contractor and ! moved to the site. l 2.3 Conducting Formal Radiclogical Surveys' The objective of conducting formal radiological surveys at the sites is to characterize the current radiological status of the property. In order to accomplish this, the contractor shall provide a modern, well-equipped mob!!e laboratory to serve as the established (on site) survey headquarters station. A detailed description of the equipment required is found on Exhibit "A" to the RFP, "Radiological Survey of the Pennsylvania Railroad Landfill Site, Burrell Township, Penr.tylvania". The following list of activities is tvpleal of those normally required in a formal survey: 2.3.1 Gamma-ray exposure rates at I m at ,ve the ground outside building A grid pattern is posted on plan views of the entire site. Measurements of gamma-ray exposure rate are made (1 m above the ground) at the intersection of each grid line. These grid lines are normally spaced 10 to 50 feet apart and include points on surrounding property. 2.3.2 Beta-gamma dose rates at the tround surface Detailed measurements are made of the beta-gamma levels at 1 m above outside ground (natural, paved or otherwise covered) surfaces in accordance with the above grid pattern. Open window and closed window G-M readings are made at each grid point. Results of these measurements are recorded in mrad /hr. 8
Exercise 2 (Continued) {- 2.3.3 Measurements of radionuclide concentrations in water Water samples are taken from surface collections both on and off the site. In addition, samples shall be taken from any flowing . stream which border each site both upstream and downstream as l dictated by radiation measurements. Groundwater which may be found in core holes will be sampled and included with the above samples and analyzed for appropriate radionuclides. 2.3.4 Investigation of surface drainageways Because radioactive wastes and residues may have been stored on the surface or in on-site holding ponds, all known and suspected drainageways on each site and those leading away from each site should receive careful attention. Samples of scale are taken from all accessible drain lines. In surface drainageways leading away from the property, samples are collected in order to determine both downward and lateral movement of radioactivity. Since surface drainageways represent points of public access, sediment samples collected in these areas are analyzed for appropriate radionuclides. 2.3.5 Investigation of surface deposits of rad!esetivity ( Samples of soll are collected on the ground surface both on and off the site in order to determine the location and quantities of surface deposits of radioactivity. The location of these samples normally corresponds to grid points where surface beta-gamma
- measurements were made.
l 2.3.6 Investigation of subsurface deposits of radioactivity , l i Extensive monitoring and wnpling may be required in order to 1 determine the magnitude of subsurface contamination. Areas of j principal concern include sites where solid and liquid radionuelides i were stored or buried. It is sometimes necessary to investigate the site of demolished buildings and also sites where residues and wastes have beeit moved for either temporary or permanent ' storage. Drilling and coring operations in these areas may be i needed to define quantitles and boundaries of underground deposits ! of radionuclides. Core samples sball be collected for analysis and
- each core hole shall be "logged" using collimated gamma-ray detector to verify the spatial distribution of radioactivity below
] the surface. 2.3.7 Radionuclide concentrations in air i Residues may exist which contain 226 Ra, 224 Ra, and 223 Ra f' resulting in the emanation from the residues of 222 Rn, 220 Rn,
- and 219 Rn. Measurements shall be made in order to establish I instantaneous concentrations of these radon isotopes and their
- progeny.
! 9
Exercise 2 (Continued) 2.3.6 Vegetation samples A limited selection of vegetation samples of several species may need to be collected from areas representing the observed range of surface radioactivity. Analyses of the radionuclide concentrations in vegetation samples are determined after a determination has been made of the radionuclide concentrations in host soll. 2.3.9 Determination of background gamma radiation levels, concentration or radionuclides in soil and water, and concentrations of radon in air A series of sr.il and water samples shall be collected ir, the area around each site in order to establish the background concentrations or radionuclides of interest. Gamma radiation levels at 3 feet above the ground are also measured at each sampling point. In areas where radium bearing residues exist, a limited number of measurements are made to determine typical radon concentrations in areas far enough removed from the site so as not to be influenced by redon emanating f rom the site. 2.4 Documentation of Radiological Survey , Throughout the survey the contractor shall maintain accurate records pertaining to such activities ast (1) instrument calibration; (2) location ; and individual survey measurements; (3) analytical procedures; (4) recording data and results of sample analyses; (5) computer calculations; (6) assumptions made with regard to boundary conditions in evaluating radiological data; and (7) preparation of the radiological survey report. These records are needed in order to provide an element of quality as:urance to the survey and to serve as the foundation for any future audit which may be necessary. 3.0 Reporting Requirement 3.1 Monthly Letter Report Each month, the contractor shall submit three copies of a brief letter report which summarizes (1) the work performed during the previous month; (2) personnel time expenditures during the previous month; and (3) ' costs: (i) current period, (ii) cumulative to date and (111) cost projection by month to completion of the work effort. (The first monthly report ! shall either provide the initial cost projection and subsequent reports shall l either provide revised projections or indicate "no change in the cost i projection.") The reports shall be due by the 15th of each month with I distribution as follows: Uranium Fuel Fabrication Section, Project ! Officer, NMSM copy I Office of the Direc. tor, NMSS (ATTN: Program Support)- I copy ! _, Contracting Officer - ! copy 10
- l l
l l I Exercise 2 (Continued) l { 3.2 Deliverables - Technical Reports 1
- 1) Preliminary Site Visit Reports Within two weeks of the completion of a preliminary site visit, the t contractor shall submit a brief repot t describing the condition of site.
] Six copics of each preliminary site visit report will be required with the following distribution l Project Officer NMSS - 4 copies l
- Office of the Director, NMSS (AMN: Program Support)- I copy
, Contracting Officer - I copy \
i 2) Radiological Survey Plans ! j Within three weeks of completion of the preliminary site visit report, the contractor shall submit a radiological survey plan for the site. The survey plan shall be first submitted in draft form with the
- following distribution
- '
Project Officer NMSS - 4 copies ' Office of the Director, NMSS (ATTN: Program Support)- I copy g
, Contracting Officer - I copy The Projec. Officer shall, within two weeks of receipt of the draft i report, submit his comments on the report to the contractor. Such comments are not intended to prejudice the contractor's technical i j judgments, but are made to assure that the report adequately I
] addresses the work needed and is clearly and concisely written. l l 4 Within two weeks after receipt of the Project Officer's comments, ; i the contractor shall submit a revised survey plan with distribution as ( follows: ] l 1 Project Officer - 8 copies Office of the Director, NMSS (ATTN: Program Support)- I copy
, Contracting Officer - I copy i 1
) 3) Radiological Survey Report I i 1 Within two months of the completion of the on site radiological l survey, the contractor shall submit a radiological survey report which l I summarizes the results of all survey activities performed under the j radiological survey plan. The report shall be first submitted in draft
- form with the following distributions i Project Officer - 8 copies
! Office of the Director, NMSS (ATTN: Program Support)- I copy i
, Contracting Officer - I copy j 11 9
i i
- j. L i
1 > 1 i Exercise 3-Work Breakdown Structure . ! > (.. i Prepare a WBS and products / outcomes for acquiring all services
- (materials, etc.) to replace the front door on your house. You have just l
- recognized that the door has lost its life to a lifetime of pets and l j children; and the old door never did equal the aesthetic qualities of the ;
I house. ; i ! i 1 l , I i
'a ?
1
- r
- r t
J ( < 1 i 3 I I l l 1 i l i i l I j i I I { i 1 $ i i f-13 I_ ... .-_ . - - . . _ . - _ . . -_._- _ _ t
i Exercise 4-Cost Estimates j I j ! 1. List at least five major categories of costs that can be included in the Independent Government Cost Estimates j a. b. j ! c.
- d. i 6.
L
- 2. Define the term Work Breakdown Structure
, i
~ l
)
1 3. Where should a Project Officer look for information concerning the price l of labor hour for pricing specific labor categories, i.e., Senior Researcher, ,
- research assistant, clerical? {
h i l 4 i 1 i . I ] 4. Define indirect costs: i j l i l ! J !
- 5. Which of the five major categories of cost are indirect costs? i
! l 2 '
l
! 6. Define Fee or Profit 4
1 1 l
! l i ! 7. List two categories of cost the Government typically does not negotiate l because they are generally determined by a company's accou3ng system j and are applied in the same way to all clients? \ )
I 1 1 15
1 Exercisc 5- Government Acquisition and the Law ( ,
- 1. List the three commonly used instruments for acquisition.
a, j b. c.
- 2. The Federal acejuisition of goods and services is governed by a number of l statutes, regulations and policies. Th3 Federal Property ano ,
Administrative Services Act of 1949 is the primary source of Acquisition rules, which have been implemented by what regulation? I l The Energy Reorganization Act of 1975 permits the NRC to use the 3. j National Labs through DOE. What is the policy chapter that is a Memorandum of Understanding (MOU) defining the terms of NRC/ DOE, Lab acquisitions L ( E l
- 4. Who has the authority to act as agents of the Government to enter into t contracts?
l. I l 5. A Government employee enters into a contract with a private firm to do j ! work for the NRC. But the employee does not have express authority for ] this action. Under the doctrine of "apparent authority" does the private 4 firm still have a binding contract? ) l 6. If the employee's action (5 above) is not binding on the Government, could i an unauthorized "contract" be made binding if certain other legal j requirements in the acquisition process have not been violated? J l 17 i l l
I
. L F
- 7. Commercial contracting authority in the NRC is delegated from the l Chairman through the management chain to. ,
i i I
- 8. Who currently in NRC has the authority to enter into "contracts" (work !
; orders) with DOE / National Labs? l
. I f I L 1 4 9. If Government acquisition laws generally favor competition, why does the . d Government encourage set-aside limitations and 8a sole source? ! l !
- f a
l , d f 4
- l I i :
l l - ! f I l 1 ! i !j ! I >
! 6 4
l I l 1 , i l 18 l ! l l i
i ! I Exercise 6A-Types of Contracts: Financial Considerations k l
- 1. Where the risks in technical performance are identifiable and the probable ,
! costs of the various contingencies can be estiinated along with the l probability of their occurrence, it le reasonable to expect - I the to assume those risks. 1 I 1 t
- 2. Where there are many uncertainties and risks and those risks cannot be accurately estimated, it is reasonable for the 'o l
assume some portion of the riska. l t i i
- 3. List two ways the Government and contractor determine risk for a commercial contract. .
j 1 l
! f i
- 4. When preparing the Government's request for proposals (SOW) where uncertainties regarding the technical effort indicate a probable need for a ;
- cost-reimbursement contract, why must the Government still be able to i estimate the cost to perform the work?
i j ; i r
- 5. When is the determination of the contract type (e.g. fixed-price vs. !
3 cost-reimbursement) made? - l l ! 4 i l 6. Who makes the determination of contract type and negotiates this in ! ] commercial contracting? I i i 7. Why is a fixed price contract that clearly ano specifically defines the i products cnd work more likely to accomplish the desired result than a j cost-reimbursable contract that does not clearly specify the products and l work? 1 j j l l 19 i l i
i
- 8. Why would one use a cost-reimbursable contract?
- 9. What is an indefinite quantity type of contract? ,
- 10. What is the difference between completion contracts and level-of-effort contracts?
I i L F i l l, i i l l l l i l 1 f f i !
> l 20 l
Exercisc 6B-Task Order Contracts ( Rcad the brief de:cription of work and answer the questions below. Section B - Supplies or Service.i r Brief Description of Work "Technical Acistance in Developing and Implementing Programs and Procedures for Reectors Requiring Special Inspection Resources." The objective of this project is to provide technical assistance to the NRC for activities pertaining to problem reactors during construction and operation, including development of an NRC program that standardizes inspection procedures for significant problem areas and emergency outages, and assisting in inspections. This is a task order type contract in which the contractors will provide, occasionally on a rapid response besis, qualified personnel in the mechanical, electrical, instrumentation, civil / structural, geological, chemical, metallurgical, welding, nondestructive examination, health physles/ radiation monitoring and safeguards / security disciplines during design, manufacturing, construction, inspection, testing, operations and maintenance phases. Task orders will be placed related to nuclear facilities having unusual problems and will include activities requiring: 1) development of programs aad procedures for inspections, 2) Information gathering and analysis of problems, 3) data l ( analysis and planning of inspections, 4) augmenting NRC inspections, 5) verification of corrective actions, and 6) performing other related functions.
- 1. Decide what type of 3.0.W. is appropriate (design, performance or a combination),
i l 2. Why is this set up as a task order contract? i l l l
- 3. How would you determine the resources you need and the estimate of cost?
1 ( 21 I
i i ) , Exercise 7-Technical Evaluation Criteria k Using the "front-door" acquisition you did earlier, list several critical evaluation eriteria that should be considered when competing the work , among two or more offerors. Using a total point score of 100, assign ! weighted scores to your criteria. 1 i i I -i L L n 1 ! i I i I l l ' i t 1 i i J I
- i l
I l l 1 1 i 1 + i l 1 23
Exercise 8-The Process of Source Selection . ( In response to a Cost-Plus-Fixed-Fee task order solleitation for Technical Analyses of the Energy and Mining Industry Groups, the following offers were received: StonewellInternational $1,250,000 ; JEM Assoa,'ates, Inc. $1,210,000 i LBO Corporation $942,000 Selence International $1,205,000 The technical proposals were forwarded to Dr. Henry Burton by the Contracting Officer, who distributed them to the Technical Evaluation Panel on which he served as a nonvoting chairpersod. The three voting members reviewed the proposals independently, reconvened to share their assessment, and reached a group consensus as to the technical merit of each submission. Each was scored on a scale of 0-100 points and a technical rating was assigned to each proposal as follows: Rating Scorn Science international Acceptable 70 t JEM AssoelateJ, Inc. Acceptable 65 i LBO Corporation Unacceptable 31 1 Stonewell International Unacceptable 24 The findings of the evaluation were summarized by Dr. Burton and j submitted to the Contracting Of ficer on August 15,198X. A copy of the . Panel's report is included as Addendum A to this case. On reviewing the Panel's report, the Contracting Officer raised the following questions concerning its content:
- l. Where were the Evaluators' worksheets and signatery concurrence with the Panel's reporti
- 2. Why was Stonewell Internaticnal, a source initially considered by Dr. Burton's JOFOC as being the only firm capable of l performing the work, considered now to be "nonresponsive"? ]
]
Furthermore, on personally examining the technical content of all i j proposals, Ms. Tralvers sensed a greater discrepancy in the quality of the two i terranked offerors than was suggated by the scoring and the accompanying l
. commentary. j On August 17, the Contracting Officer contacted Dr. Burton, raised her ]
concerns, and received the following explanation: ) 25 ) i l
Excroise 8 (Continued)
- 1. No individual worksheets had been completed even though there was an NRC requirement addressing this aspect of the evaluation process; in lieu of worksheets, the evaluators had decided to incorporate all of ;
their comments and recommendations directly into the Committee report as a final ranking.
- 2. The Stonewell International proposal had been rated as nonresponsible since evaluators had determined in discussions with technical personnel at the Departments of Energy, Navy, DOD, and NASA that the contractor conslstently performed poorly.
Finally, Dr. Burton commented that he agreed with the Contracting Officer's judgment that there was a much greater discrepancy between the technical presentations of JEM Associates, Inc. ar>d Science International than had been evidenced by the scoring. Dr. Burton added that the Science International proposal had been reviewed in the context of previous work performed by them in 1978, which wa= considered unsatisfactory. The effort which had been the subject of the problem had involved program evaluation and consulting services to DOD and was therefore deemed similar enough to take into consideration. The panel members had been unaware of the prior effort during their individual reviews until Dr. Burton produced letters and memoranda from office files highlighting the severe contract administration i difficulties on the 1978 effort. A sample of the evidence was forwarded to the i Contrseting Officer and is included as Addendum B to this exercise. Taking into account the problems experienced, the panel had voted to reconsider an
; initial score of 95 points for Selence International and drop their overall assessment of the proposal accordingly to 70 points.
l QUESTIONS
- 1. Consider the NRC guidelines at TABS 2 and 4 governing technical evaluations and resulting documentation. Did this panel comply with
- those guidelines?
- 2. Can the SEP in this case consider the evidence introductJ by Dr. Burton as part of its scoring of the Science International proposalf What alternatives does the Panel have in this situation? Does it matter with
! regard to your "selection" of best deal for the NRCf
- 3. Was the panel correct in its handling of the Stonewell proposal? Explain.
- 4. Describe the mi'slon of the Technical Evaluation Panel and discuss what aspects of the source evaluation process are left beyond the panel's
! in4 mediate purview.
l
- 5. What is the relationship between the SEP and the Contracting Officer in the role of discussions with offerors, source selection and ultimately I
contract award? l l 26 l
ADDENDUM A t August 15,198X TO: Ms. Delgato Tralvers Contracting Officer FROM: Chairperson, Technical Evaluation Committee
SUBJECT:
TECilNICAL EVALUATION OF PROPOSALS j - The Technical Evaluation Team of the subject procurement met on August 8, 198X to review and eva ude proposals submitted by Stonewell International, JEM Associates, Inc., LBG, In3., and Science International for the technical analysis of the energy and mining industry group. j The team met to discuss the proposals and prepare a technical evaluation j report. Prior to the team meeting, each panel member evaluated the i proposals independently. It is the recommendation of the review panel that the two technically acceptable proposals from Science International and JEM , Associates, Inc. be considered for negotiation based on the technical evaluation and relatively close scores,
- i ,
[t( Y d l% b *" Henry Burton, Ph.D. > l i 4 a , { ~ l l
)
j l i 27 i
)
.. _ . - _ _ . _ . - - - _ . -. - .- .- . . - _ - - . . _ _ . - ~- - . - .
I
! l l
s OFFEROR: SCIENCE INTERNATIONAL b l FACTORS EVALUATORS I A B C TOTAL j
. I J Problem and Approach (30) l 1 a) Understanding the Problem (15) 13 9 15 37 : ) b) Soundness of Approach (15) 13 14 14 41 :
l l Personnel and Experience (60) d a) Experience (30) 20 15 21 56 j b) Education (20) 11 16 13 40 i c) Staff Utilization (10) 6 6 5 17 l i 1 Facilities (10) 6 7 6 19 l 69 67 74 210 l l Avg 70-Technically i Acceptable ! 1 i J ! COM ME NTS [
- l. i
) Strengths: ! i e Accurate, clear assessment and understanding of the problem (
- ' e Sound, novel, practical approach proposed :
e Full, complete understanding of underlying issues. ! e Consultants proposed are experts and readily accessibie geographically ( e Facilities are adequate ! I Weaknesss ti i e Could improve management concepts, perhaps with a team approach ! e Need to better define specific use of staff and consultants ! e Misleading and inaccurate statements sometimec indicatirg uncertainty. 1 e Protocols are questionable 28
OFFEROR: JEM ASSOCIATES ( FACTORS EVALUATORS A B C TOTAL Problem and Approach (30) a) Understanding the Problem (15) 6 7 5 18
, b) Soundness of Approach (15) 7 7 6 20 Personnel and Experience (60) a) Experience (30) 20 30 24 74 b) Education (20) 15 19 17 51 c) Staff Utilization (10) 5 8 5 18 Facilities (10) 5 5 5 15 58 76 62 196 Avg 65-Technically Acceptable CO M M E NTS - Strengths:
e Generally good understanding
- Proposes routine, time worn methodologies e Generally well qualified staff and consultants e Average facilities weaknesses:
e Nothing new here e N) real firm proposed approach-lacks speelfles e Will require extensive explanation to assure we get what we need e Need to firm up management aspects l I i 1 29 l
l OFFEROR: LBG CORPORATION ' FACTORS EVALUATORS A B C TOTAL Problem and Approach (30) i a) Understanding the Problem (15) 6 4 3 13 1 b) Soundness of Approach (15) 5 4 3 12 Personnel and Experience (60) : a) Experience (30) 15 6 5 20 b) Education (20) 10 4 4 18 c) Staff Utilization (10) 4 6 5 18 - Facilities (10) 7 6 5 18 47 26 21 94 ; Avg 31-Technically ' Unacceptable l COMMENTS t Strengths: e One evaluator found the proposed staff to be fairly good, otherwise no [ particular strengths were listed. Weaknesses: e Fails to address major SOW requirements; unclear responses when issues are ; addressed. ! l l l l l l j 30
OFFEROR: STONEWELL INTERNATIONAL k FACTORS EVALUATORS A B C TOTAL Problem and Approach (30) a) Understanding the Problem (15) 4 3 3 10 b) Soundness of Approach (15) 4 3 3 10 l Personnel and Experience (60) a) Experience (30) 8 4 2 14 b) Education (20) 5 8 4 17 c) Staff Utilization (10) 1 2 1 4 Facilities (10) 7 6 4 17 l 29 26 17 72 Avg 24-Nonresponsive l 1 l COMMENTS { e The proposal was nonresponsive to the RFP. I No particular strengths were listed. f 31
ADDENDUM B October 1,1978 TO: The Record FROM: Project Officer
SUBJECT:
MEETING WITH SCIENCE INTERNATIONAL ON CONTRACTUAL NON-COMPLIANCE, SEPTEMBER 2,1978 In accordance with Article I, Statement of Work, Science International is to implement the consulting services plan developed by Government staff as a result of program evaluation. On August 10,1978, this office received the July 1978 monthly report from Science International in which two events occurred that seemed definitely in violation of this contract. First, the contractor provided assistance to the Secretary of the Army in. the area of recruitment because "the program had been instructed via program audit to expand its recruitment." Second, the contractor developed a procedural manual for the Army with our prior approval from this office and indicated that the need for a procedural manual had been identified during the program evaluation. As of this date, the program staff has not completed its program audits nor developed a technical plan for implementation by the above contractor. The contractor met with the Project Officer and Contracting Officer on August 13, 1978, and an inquiry was made regarding the projected schedule of Center visits for the purposes of financialinventory. A letter dated August 27, 1978, was received by this office from Science ' International containing the financial inventories done during the month of August. The list of centers inventoried contains the Dallas center, which was not in the original list submitted to the contractor by this office. Because of these repeated contract violations, as Project Officer for the above contract, I recommend to the Contracting Officer that he notify tne contractor that it is in violation of the contract. Such notification was given verbally to the contractor during the September 12,1978, meeting and a telegram confirming same was sent on September 13,1979. Charles O. Babbo t, Ph.D. I i h 32
Exercise 9-Choosing Acquisition Methods ('
- l. Problem: You have drafted a statement of work and in doing so have determined that DOE or another Agency does not offer sources (contractors) you need. You also know your work could not be justified for a sole source.
- a. If you decided to use small purchase, list two facts that would determine the effectiveness of the choice.
i
- b. If you use small purchase over $1,000, are you required to compete at least two sources?
Yes No
- c. If two or more small businesses could do this work, should the competition be set aside for small business only?
Yes No
/ d. Which office in NRC screens acquisition requests to determine whether the \ work should be set aside for small business g placed sole source with an 8a firm?
- e. If you have estimated this acquisition to be over $100,000 but less than
$500,000, at a minimum which Review Group will need to approve your request?
- f. If you have estimated this acquisition to be over $500,000 in one year or
$750,000 in three years it must at a minimum be reviewed by? l
- g. Why will you need to develop technical evaluation criteria for this acquisition?
4
- h. If you chose an 8a source or stayed below an estimate of $1,000, would you need evaluation criteria? ;
l
- (
33 l l
~ - - - ,c ,n,..w ., . . - , , - - - - . - , --, -
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Exercise 9 (Continued)
- 2. If an unsolicited proposal is deemed worthy of a project, must the PM prepare a justification for other than full and open competition (JOFOC) before the CO selects that source for an award?
- 3. List two or more good reasons for justifying a sole source? .
- 4. List six actions all acquisition methods have in commons
- a. .
I
- b. i c.
d. e.
- 5. To insure that all acquisitions are competitive to the maximum practicable extent, the FAR prescribes that notice be placed in the Commerce Business Daily (CBD) so that interested firms may re. quest !
copies of the invitation for Bids or the Request for Proposals. The CBD i notice is required when a project is estimated to be $ or more. !
- 6. When the PM and the CO do not know if more than one source is available for a particular acquisition, how can the CO prove there is no one else interested in the particular acquisition?
- 7. When a request for a new Competitive Procurement action is made, why i does the Division of Contracts develop a milestone schedule to implement l the action' i
- 8. What are the primary tasks assigned a Source Evaluation Panel (SEP)
Chairman during proposal evaluation and contract selection? I 34 ; l 1
Exercise 9 (Continued) ( +
- 9. You have drafted a SOW and have decided that DOE can be justified to do the work,
- a. You don't know which Lab offers the best capability and available resources, what do you do:
- b. Your project has a budget of $400,000, which is about what you have estimated the project to need, and you're determined to get the project completed within that amount. Before the work begins, how can you determine what the Lab thinks the project will cost?
I
- c. If the DOE Lab thinks your project will con $475,000, on what basis -
(information) will you negotiate? I 35
Exercise 10-Reviewing Progress Reports - Changes? k Review Appendices F-5, 6, and 9. The attached progress report is a modified version of an actual report received by NRC from a contractor and relates to the Statement of Work at Exercise 2.
- 1. For purposes of this exercise, presume that no corrections or additions were made to the statement of work in the ea l ler exercise. Review the progress report and be prepared to comment on what actions, if any, you should take as the Project Manager for this effort.
- 2. Also be prepared to discuss whether your actions would be any different with respect to the need for an Industrial Hygienist if the contract were to have been awarded on a fixed price basis.
- 3. What is the effect of a change that is within the scope of the contract?
- 4. What is the relationship of this clause to the Limitation of Funds or Limitation of Cost Clause in a Cost-Plus-Fixed-Fee Contract?
l ( 4 l ( 37 4
, . - . , , - , - . - . . _ . _ . _ - - . . . , . - , , , . . _ _ , . . - . -. n-. _ _ , _ , - - - , . _ . . , _ . - _ - . _ , _ - . - _ - - - , _ , - . _ _ _ _ , , - _ - - .
EmTI a RADIATION TESTING,INC. 1234 Fami Street, Monroe, MI 49001 May 7,1981 Uranium Fuel Fabrication Section NMSS USNRC Washington, D.C. 20555
Dear :
This letter summarizes the Burial Site Survey Project activities for April,1981.
- 1) Site survey work has been initiated at the West Foothills Landfill in Wayne County, Michigan. RTI has placed a mobile step-van and laboratory trailer on site, and has begun gridding, external radiation measurement, radon flux measurement, and sampling activities.
- 2) Personnel Time: A total of 680 man-hours were expended during this time.
- 3) Costs: April - $14,000 To Date - $65,000
- 4) Cost Projection to completion $945,000, no change, but see below Since initiation of the West Foothills survey, several occurrences have taken place which tend to extend the scope of the West Foothills site survey. These are delineated below
+
a) The possible presence of toxic materials in the landfill requires us to extend worker safety services in this area. Our proposed program is to subcontract an Industrial Hygienist and to perform limited sampling for priority pollutants / toxic chemicals. The estimated level of effort is $5000 to $10,000. b) The landfill operator has not yet allowed us to enter Area 1 (See Figure 1) due to planned capping and seeding operations. These were to have been completed several weeks agos however, due to bad weather, and other delays, the work has been postponed until mid-May. This delay may extend our stay on site. 38
USNRC - Page 2 c) The arens to be surveyed appear to be considerably larger 07-15 acres) than the approximate size estimates provided by the L. , (4 acres) and upon which RTI based its proposed survey activities. d) A portion of Area 2 is leased by West Foothills to the Lowry Construction Company. Lowry used this area as a repair and maintenance facility for heavy construction equipment. In addition, West Foothills has placed large gravel piles and discarded heavy equipment (such as duinp trucks) on this area. As a result, Area 2 contains many items and activities which inhibit survey procedures and may prolong our work schedule.. At this time, I am not able to determine the overall effect of these items on the final contract pricing. However, it is possible that the actual costs for the West Foothills survey will exceed initial estimates, although these might be made up elsewhere. If there are any questions, please call this office. Sincerely, t d m hV 4 JL t .
/ James Wallace V Manager, Midwest ReFional Officer LFB:kgc Enclosures cc: Office of Director, NMSS, Attn: Program Support USNRC Mr. D. Mann, Contracting Officer i
39
Exercisc 11 - Key Personnel ( The Key Personnel clause of the contract identifies the following two people. Road the clause at Appendix 9 and "insert" the two names indicated. Mr. Theodore Chase Project Director Dr. Martha Dennis Project Coordinator in December, six months into a nine month study contract, the contractor suffers a critical staff change. Mr. Chase, dispirited over several clashes within the company, leaves to assume a post at a major nuclear research labo.atory. Charles Medwick, vice president of the company, instituted a recruiting effort to replace Mr. Chase without causing serious disruption to the effort. After extended negotiation, he hired Dr. Samantha Britten, a professor in the nuclear engineering school at a major university. Dr. Britten assumed Mr. Chase's responsibilities shortly after the start of the new year at a rate of pay somewhat less than Mr. Chase's. This change in personnel was duly reported to the Goverr" *nt of January 11, in the December progress report. Ms. Telford, the Gc:ernment's Project Officer was quite upset by this turn of events. Although the transition of the project had been accomplished quite smoothly and calls to the contractor had elicited assurances that all was going well, Ms. Telford did not consider the replacement satisfactory based on Dr. Britten's prior performance under two grants awarded to her former employer. In fact, Ms. Telford felt that Dr. Britten's participation could only affect the project adversely. Mr. Medwick insisted that the personnel change did not fall within the purview of the Key Personnel Clause as the company was unable to control the circumstances of Mr. Chase's departure. Question
- 1. What is the meaning and purpose of the Key Personnel Clause? What is the Project Officer's role in such matters?
- 2. What can be done to remedy the Project Officer's concerns?
- 3. Who has to "make it happen?" liow?
( 41
Exercise 12-The Cost Overrun , ( You have just been appointed as the Project Officer (Project Manager) for a contract to replace the former Project Officer who has retired. The attached letters dated October 31 and November 4 have just arrived at your desk. Alc..g with them is a note from the Contracting Officer that he wishes to discuss this matter with you. , Although you are newly appointed as the Project Officer, there are , several things you know about this contract from your work in the office:
- 1) The results of the survey are considered critical to the completion of l a larger project. [
- 2) You and other members of the NRC staff must coordinate the results j
of this survey (and three others under the same contract) with other data on hand so that a staff report can be prepared no later than April 1. 1
- 3) Funds are available for this effort. If necessary the Division is prepared to terminate other contracts in order to ensure timely completion of this effort.
- 4) Notations in the file indicate that the past work of the contractor has always been totally in accord with the needs of the project. Over the ;
( first three months of contract performance, the contractor did not respond to the technical direction of the former Project Officer in an expeditious manner.
- 5) The previous three surveys under this contract suffered from a series of problems. Deliveries were late, cost estimates were overrun and ,
the former Project Officer otherwise indicated that he had problems getting what he wanted from the contractor. l
- 6) This is the first contract NRC has had with his firm. The former Project Officer indicated in his notes that this is why he decided to !'
spend time and effort in close "collaboration" and monitoring of the
- work. ,
, f l 7) There are several other contractors who are capable of performing ' ' this work. In fact, the initial award to Radiation Testing came in i 1 light of their relatively low cost estimate-they 'wers third in the j l technical evaluation by a few points.
l Your assignment for this exercise is to prepare to discuss this matter with j the Contracting Officer. Any aspect of this problem may come up but you l must be ready to discuss the following questions as a minimum: : 1
- 1) What are NRC's options in this instance?
( ; i ! 43 i [
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Exercise 12 (Continued)
- 2) Has the contractor complied with the terms of the Limitation of Cost clause in the contract? i
- 3) Does the Contractor deserve any additional fee as proposed in his letter of October 31?
- 4) What do you think of the handling of this project by the previous Project Officer?
4
- 5) Would your approach to this problem be different if a) Funds were very cight?
b) The NRC staff reports were not due until July? c) Both of the above?
- 6) Who within NRC has what responsibilities for specific actions which you feel must be taken?
l O 44
ERTI a 1 t RAD"AT"ON TESTING, INC. i 1234 Form! Strwt, Monroe, MI 49001 l October 31,198X Contracting Officer Uranium Fuel Fabrication Section NMSS/USNRC Washington, D.C. 20555
Dear :
In accordance with the requirements of the Limitation of Cost Clause of this contract, we are hereby submitting notice that Radiation Testing, Inc. expects to incur expenses in excess of funds allotted in the completion of work under Contract NRC-02-81-123. This expectation of a cost growth is related entirely to item 4 of the contract for a radiological survey at the Mariner Engineering, Inc. Burial Ground near Pittsburg, Pennsylvania. The original estimated cost for this item was $247,900. Our current estimate to completion is $277,900. For this additional effort a fee of $2,500 [ is proposed. Cost incurred to date for this item is $217,900 including an estimated
$60,000 to be invoiced for the month of October 198X. More precise figures for the latest billing period will be available on or about November 10,1981.
Our estimate for comple'%n is based on the following calculations of effort and corts and is divides ..ito two segments, completion of survey work and drafting of reports. We estimate that the final report will be completed by December 31,198X as required by the contract provided that overtime schedules are adhered to for the period from November 15 to completion. SURVEY WORK
- 1. Effort is required to retest Grid sections A-1 through A-9 and B-1 through B-9 at the 35 foot intervals directed by the Project Officer in lieu of the ,
30 foot intervals at which initial readings were taken. This change was ) fully discussed in our progress report for August at which time it was i decided to widen intervals from 30 to 35 feet in grid areas C through N. ! The additional effort is now required in order to make all reading consistent throughout the tested area, i l t 45 l i
The effort required and costs associated therewith are-l Project Director 20 hours 0 $19.00 $ 380.00 Testing Supervisor 20 hours 0 16.00 320.00 i Test Technicians 54 hours 0 10.00 540.00 Clerical 20 hours 0 6.00 120.00 1,360.00 l Equipment Rental (2 weeks) 1,600.00 l for Radionuclide Tests l TOTAL DIRECT COST $2,960.00 L
- 2. Effert is required to validate Radionuclide concentrations in air (see 2.3.7) for Grid areas G-1 through G-5 and H-1 through H-5 which were inadvertently taken with equipment which had not been checked for proper calibration. As noted in our earlier report on this aspect of the 1 r
project we have every reason to believe that accurate readings were taken despite the failure to verify equipment calibration prior to sampling , and testing. However, in order to be sure, the sampling team for the A and B grid areas will take readings at two randomly selected points and L compare results with those earlier obtained. If the results are at a variance of more than + 2.5% from the earlier readings for one test i isotope, the entire area will be resampled, The effort required and costs therefore of resampling are: Project Director 10 hours C $19.00 $190.00 i' Testing Supervisor 10 hours 0 16.00 160.00 Test Technicians 24 hours 0 10.00 240.00 ( Clerical 20 hours 0 6.00 120.00 ; _710.00 l Equipment rental (1 week) 800.00 i TOTAL DIRECT COST $1,510.00
- 3. Upon completion of the above testing procedures, the results will be i analyzed by the project staff, merged with the existing data base and l
processed for inclusion in the required reports in accordance with the proposal and the approved work plan. l The effort required and the costs therefore are i Project Director 120 Hours 0 $19.00 $ 2,280 Analyst A 200 Hours 0 14.00 2,800 Analyst B 120 Hours 0- 13.00 1,560 Statistician 40 Hours 0 15.50 620 Clerical 120 Hours 0 6.00 720 7,980 Computcr Connect Time (100 hours 0 $26) 2,600 Consultant expense (Dr. Salmon)(40 Hrs. 0 $35) 1,400 TOTAL DIRECT COST $11,980 i 46
REPORT GENER ATION ( Upon completion of analysis of data obtained at the site, the draft final report will be prepared in accordance with section 3.2 of the Statement of Work and the approved work plan. As requested by the Project Officer, we will also compile a comparison of results from each of the four sites so that a cross-scetional analysis will be facilitated.
- 1. The report on radiological conditions at the Mariner Engineering, Inc.
Burial Ground will require the following effort and costs: Project Director 40 Hours 0 $19.00 $ 760 Analyst A 40 Hours 0 14.00 560 Analyst B 80 Hours 0 13.00 1,040 Statistician 80 Hours 0 15.00 1,240 Data Technician 40 Hours 0 8.00 320 Editor 80 Hours 0 12.00 960 Graphic Artist 20 Hours 0 9.00 180 I Clerical 80 Hours 0 6.00 480 Data Tech (overtime) 20 Hours 0 12.00 240 Editor (overtime) 24 Hours 0 18.00 432 Clerical (overtime) 60 Hours 0 9.00 540 6,752 Computer time (60 Hours 0 $26) 1,560 1 Consultant expensa (Salmon)(40 Hours C $35) 1,400 l Communications expense 100 I Travel and per diem 800 DIRECT TOTAL COST $10,612
- 2. The cross-sectional analysis report on radiological conditions at the four sites tested will require the following effort and cost: I Project Director 40 Hours 0 $19.00 $ 760 l Analyst A 40 Hours 0 14.00 560 l
Statistician 80 Hours 0 13.00 "1,040 . Data Technician 40 Hours C 8.00 320 Editor 40 Hours 0 12.00 480 Clerical 120 Hours 0 6.00 720 Clerical (overtime) 40 Hours 0 9.00 360 4,240 g Computer time (60 Hours 0 $26) 780 TOTAL DIRECT COST $5,020 l l l l i i i 47 1 4 1
A summary of the total cost growth on this project is attached indicating both direct and indirect costs. The graphic summary of costs to date versus planned expenditures (normally submitted with monthly progress reports) is also attached showing costs to the end of the project. We are continuing our efforts on this most important project so that schedules can be maintained. i Yours Truly,
&g bl C %--
James Wallace
' Manager, Midwest Regional Office LFB:kgo Enclosures 4
f l i i I i i ; i j i l ( l l 48 ,
SUMM ARY OF COSTS TO COMPLETION ( R ADIOLOGICAL SURVEY, M ARINER ENGINEERING CONTRACT NUMBER NRC-02-81-123 Direct Labor 21,042 l Overhead 0115% of labor (excluding overtime pay) l 1.15 X 19,470 22,391 l Subtothl, Labor plus overhead 43,433 i Other Direct Costs f Computer time 4,940 2,800 i Consultant expense 4 Communications expense 100 l Travel and per diem 800 Equipment rental 2,400 I Total, Other Direct Costs 9,120 General and Administrative Expense 014.2% of total direct costs plus overhead .142 x 52,533 7,463 l TO~ \L COST TO COMPLETION 60,012
~
(
SUMMARY
OF CHANGES TO COST AND FEE Costs to Date 217,888 1 Projected Cost to Completion 60,012 l Total Estimated Cost to Completion 277,900 l Initial Estimated Cost to Completion 247,900 New Costs 30,000 Fee Proposed on New Costs 2,500 Total fee Proposed for Contract 23,150 Revised total cost plus fixed-fee 301,050 j Note: Indirect expense rates are as projected for our Fiscal Year 1981 which runs from January 1 through December 31,1981 as approved by the Defense Contract Audit Agency. I 49
RKTI W RADIATION TESTING,INC. 1234 Feral strwt, Monros MI 49001 November 4,198X Contracting Officer Uranium Fuel Fabrication Section NMSS, USNRC Washington, D.C. 20555
Dear :
We appreciate your prompt attention to our letter of October 31 concerning contract number NRC-02-81-123. As you requested, here is a brief discussion of the accelerated rate of expenditures during the last month of the contract which has resulted in the need for additional funding. There were two features of the project which were the underlying causes:
- 1) The Statement of Work was broadly written. This was necessary because NRC needed initial information and analysis on an expedited basis and could not provide us with detailed information concerning sites or the precise measurements desired. Interpretation of what had to be done was complex. The final work plan was the result of technical collaboratfor. rather than through a formalized procedure reflected incremental adjustments to the contract cost estimate.
- 2) Line of communication between the Contractor staff, NRC staff, and the Contracting Officer were not formalized in a way which would assure that techrilcal decisions and their implications would be fully understood and acknowledged by all parties.
These underlying causes have led to what you characterized as a "surprise" request for a cost increase. We, on the other hand, are surprised that you as the representative of the Government were not fully aware of the situation since we have been in continuous contact with the Project Officer, Mr. Daniel Foote, throughout this projact. We haue kept him fully informed of all aspects of this project and have enjoyed a close day to day working relationship throughout. There have been numerous meetings between NRC staff and Contractor Staff. The techrical agreements reached at such meetings were accurately defined and recorded. We did not specifically communicate these to the Contracting Officer. Because these decisions were reached jointly with the government in the person of the Project Officer, we did not see that there was any such need. We have consistently worked on the presui..;,sion that these technical meetings and the directions received therein form the perceptions of technical imperatives for project success, we have not seen a need to separately obtain verificatio,n and authorization from the Contracting Officer. 30
Page Two ( The Project Officer has had extensive involvement in the technical aspects of the work. In order to comply with the directions received within the stringent time requirements of this job, our technical and administrative staff persons have devoted significant effort to the management and control of this project. Even if we had felt it necessary to keep the Contracting Officer separately informed of technical developments, there would have been less than sufficient time to do so without impacting on the critical tasks of management. Since you have raised a concern, we suggest that for the remainder of tnis project, and in the future work which we perform for the NRC, that the following practices be implementeo:
- 1) All meetings between the NRC Staff and the Contracting Staff will be promptly followed up by an exchange of minutes of the meeting specifying what was discussed, agreernents reached and related effects on schedule and costs.
- 2) Lines of communication will be formalized. No direction will be implemented until reflected in writing. Nothing affecting a contractual matter will be implemented pending written direction provided by the Contracting Officer.
We believe that such steps are a form of administrative "overkill" which [ will have a negative impact on technical accomplishment within schedules established by the NRC. And though we cannot speak for the Project Officer, we are confident that he will agree in this instance. If you need any further information, please give me a call. In the I meantime, and in light of your express concerns about formal communication, we have suspended all efforts at the Mariner Engineering site pending formal j authorization to continue wl'.h the work on the project. l Yours Truly, ,
/*
Q4pu O (LWy4 L t James Wallace
~ Manager, Midwest Regional Office 1
l
)
l si ! i _ _ _ _ _ _ _ _ _ __ 1
Exercise 13-Decision Making Under Cost Constraints k On July 15,198X, the NRC Contracting Officer forwarded a letter to Pulver Associates Incorporated requesting that the company amend its final report by furnishing actual completed questionnaires and providing a more detailed and comprehensive analysis of the respondent data (see case "#7, inspection"). The letter further defined the types e analyses to be conducted and documented and itemized specific criteria governing Government acceptance or rejection of the final product. Finally, the letter stated that the contractor would be reimbursed for additional reasonable, allocable, and otherwise allowable costs incurred over and above the existing ceiling ($190,000); a contract modification would be issued at a later date to finalize this agreement, extend the period of performance, and adjust the total estimated cost. Pulver Associates complied with the Contracting Officer's request and submitted a revised final report to the Government on August 15,198Y, along with a voucher in the amount of $36,000. Although the final report was now fully acceptable to and usable by the Government, the Project Manager was greatly dismayed by the payment request which represented approximately 19 percent of the original estimated cost of the contract. When questioned, the contractor explained the increased costs as follows:
- 1. Since the time work under the contract had ended with the delivery' of the final report on March 31, the principals involved had either left the company or been reassigned to other programs. The July
( 15the letter of the Contracting Officer had required that staff currently employed on new projects be brought in after normal working hours and on weekends to complete the final report as specified. In addition, several members of the original team who had left the company's employ we'e hired back on a part-time basis as consultants at rates well in excess of those formerly paid to them by Pulver.
- 2. The company'= overhead rate had been increased severely due to a sharp drop in business experienced during the second quarter of calendar year in 198X.
- 3. All copies of the finst raport had to be recalled and destroyed and a now final report printed adding additional costs for reproduction.
- 4. The Government was assessed an additional fee equal to 10 percent of the cost of the extra work. The contractor considered this fee reasonable in light of the urgency of the Government's request.
Although Pulver Associates' voucher for the additional work totaled over
$36,000, the program possessed only $30,000 in unobligated funds to cover the additional work. On the following day, the trate Project Manager met with the Contracting Officer to discuss the entire situation.
I 53 t
Exercise 13 (Continued) I QUESTIONS
- 1. As the Project Manager, and based on the criteria for cost reviews, how would you advise the Contracting Officer on reimbursing the contractor's claim? ;
- 2. Based on funding considerations, would the stated funding limitation (i.e., f
$30,000) restrict the liability of the Government? What is the liability of
. the Government officials concerned, specifically the Project Manager and Contracting Officer? ,
- 3. How does the Limitation of Cost clause relate to the problem? j
- 4. Based on your knowledge of contract changes, was the Contracting i Officer's written order properly executed? If not, is it binding on the Government? ;
1 i I L i i l l I i i 1 t I 54 t i a yr_,- - _ . , , - - , - - . _ . . - ..- , , . . . .- . _ - - _ . . _ - . _ _ - , . , ,. , . . _ , - , - , . _ _ - _ , . _ , , - , , _ _ . _ - _ _ . .
Exercise 14-Oontract Modifications ( On July 15, a contract was awarded to the University of Southern Montana to do studies of the effects of radiological contaminants in Montana on water quality of the Missouri River from Cut Bank, Montana to the North Dakota line. The contract was awarded on a firm-fixed 9tice basis. The contract required the contractor, among other things, to take water samples at nine points in the river, analyze them, and identify the probable sources of levels of specific radiological pollutants at points downstream from the initial sampling site. In order to meet this requirement, the contractor was required to take samples at Cut Bank and at intervals of 50 miles thereafter until the river reached the North Dakota line. One week after contract award, the Project Manager, John Pederson, began to have his doubts concerning the contract as structured. The sampling , sites had been selected by NRC and specified in the RFP; the problem was that the regular interval approach, though indicative of changes in water quality downstream, failed to focus on the potential sources for increasing levels of effluents. Several large streams join the Missouri within Montanet each of these tributaries and the Missouri would provide a better indicator of effects on water quality than samples taken at the specified intervals. Upon discussion of this idea within the initiating technical office, it was determined that the requirement ought to be changed to call for sampling one mile above and one mile below the confluence of the Missouri and the four largest tributaries. Samplos should still be required from the Cut Bank area. ( Once this determination was made, Pederson immediately contacted Dr. Ed Garr, Southern Montana's Project Director, to inform him of the pending change to the requirement. Pederson, as Project Manager, instructed Dr. Garr to stop sampling at any site other than Cut Bank and wait for further instruction from NRC. Dr. Garr expressed some relief at receiving word from the Project Manager since he too had begun to doubt the utility of the initial Statement of Work. Although his list of potential sampling sites differed somewhat, the basic idea was the same. Having this piece of good news brightened Pederson's spirits. He was further encouraged by Dr. Garr's statement that no work had been done on the contract that was not equally useful .f the sampling sites were changed. As a final dividend, Dr. Garr noted that the cost to do the work would be unchanged so long as a total of nine site > aare maintained. Since everything seemed to be going smoothly, the Project Manage instructed SMU to proceed with the work as discussed-tne paper work necessary to confirm the change would be issued as soon as possible.
- One week after this discussion, Pederson dispatched a draft contract modification to the Contracting Officer, Brian Dilly, along with a memorandum explaining what actions had been taken and noting that most of 1
l ! l 55
Exercise 14 (Continued) the work necessary to accomplish the change had already been done. Feeling ! quite pleased with himself, Pederson was surprised to get a call from Dilly f questioning the actions he had taken. Q UESTIONS l
- 1. Did the Project Manager have the authority to order Southern Monts.na to stop work? If not, who, if anyone, does have that authority and from what contract clause is it derived?
- 2. Did the Project Manager have the authority to order a change (or to agree [
to a change) in the sampling sites? If not, who if anyone, does have that authority and from what contract clause is it derived?
- 3. If the actions by the Project Manager were not proper, what procedures should have been followed by NRC once a determination was made that the original contract was not technically satisfactory? ,
- 4. Would the situation by any different if the initiating office had decided to add eight additional testing sites (two at each of the confluences of the '
Missouri and its major tributaries in Montana) to the nine origirally specified? What would be the proper procedure in that case?
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Exercise 15-Progress Review of DOE "Contract" f You are the Project Manager on the Geochemical sensitivity analysis. You have just received the June monthly report which reports status on FIN i A-1756. Provide your comments concerning the report on Task I and its subtasks by assessing whether the Laboratory has "performed" the work described. [ F .l i l l a j l i i 1 i l i l l f. 1 57 i 1 J
- _ _ _ . . . ___ -_ _ . _ _ - - _ . _ _ . _ . ~ _ _ . _ _ _ _ , _ _ -_ _ _ . _ _ _ . _ _ _ _ _ _ , _ . , _ _ ,
i
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i July 12,198X { i U.S. Nuclear Reguletory Commission ! j Mall Stop 623-SS , Washington, D.C. 20555 Dear ! l ! Enclosed is the monthly report for FIN A-1756, Geochemical Sensitivity
! Analysis for June,198X. ,
Please feel free to contact me if you have any questions or comments. f
- Sincerely, i
. t i
I We.ste Management Systems )! Division 6421 ; i 8 RMC:6431 j Enclosure l f i e l 8 1 l I , . I 1 i I ! 1 I , i l 1 3: l i !
- f J
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PROGRAM: Geochemical Sensitivity FIN #: A-1756 Analysis - CONTRACTOR: Sandia National BUDGET PERIOD: 10/01/84 Laboratories 9/30/85 DRA PROGRAM MANAGER: BUDGET AMOUNT: 235K CONTRACT PROGRAM MANAGER: FTS Phone: 844-8368 PRINCIPAL INVESTIG ATOR: FTS Phones 846-5448 PHOJECT OBJECTIVES i The objective of this project is to provide technical assistance to the NRC in , determining the sensitivity of far-field performance assessment calculktions to uncertainties in geochemical and hydrological input data and in the repeesentation of geochemical processes in transpott models. In Task I, the error in the model calculations of integrated radionuclide discharge due to speclation, kinetic and sorption effects will be evaluated. In Task !!, the , r.otential importanea of organic molecules ar.d colloids will be examined. i SNLA will assist the NRC in determining how geochemical processes should be [ represented in transport models under Task 11 1 . Short-term technical l assistance will be carried out under Task IV. ; i I ACTIVITIES DURING JUNE 1985 s , Task I Uncertaintv in Int,egrated Radionuclide Discharge . Subtask 1A. Speciation Effects (M. Siegel, R. Guzowski, S. Phillips) An assessment of the error in speciation and solubility calculations due to the
- use of the Davles equation in place of "Pitzer equations"(specific interaction) jl to calculate activity coefficients in saline brines was initiated. In this study, a !
comparison of activity coefficients calculated with the two methods will be a made for several radionuclides in ionic strengths of up to 3.0 M. The results of this study will provide guidance in the selection of the most appropriate i geochemical codes for sensitivity studies for HLW repository sites in salt formations. Coordination of NRC-sponsored projects whleh involve compliations of ) thermochemical data was discussed at recent meetings between NRC staff and i M. Siegel. It was suggested that efforts at Pacific Northwest Laboratory (S. Peterson) should be coordinated with similar efforts at Lawrence Berkeley g Laboratory (S. Phillips). As of July 1, no definitive action had been taken by
\ the NRC towards achieving this goa.
i 59 l
It was also suggested that the data ir the LBL/NRC/BES data base currently being compiled at Lawrence Berkelly Laboratory should be periodically compared to thermochemical data compiled by DOE for each of the HLW repository sites. The resources for this additional effort will require supplemental funding in FY86 and FY87. This subject is discussed in more detail under the secilen entitled "Travel-Informal Meetings with NRC staff." Subtask IB. Sorption Effects (M. Siegel, J. O. Leckie, D. Kent) Compilation of fundamental thermochemical data and review of experimental studies of sorption of radionuclides by natural and synthetic materials continutd during June. The results of this work will be a review of the state-of-the-art of theoretical modeling of radionuclide sorption, an assessment of the error resulting from the assumption of linear sorption isotherms in calculations of integrated discharge, and an evaluation of the feasibility of using phenomenological models of sorption in performance assessment studies. All of the empirical Kd data published by Los Alamos National Laboratories for tuff has been entered into the dBase 111 system and have been checked for accuracy and redundancy. Supplemental statistical software for the data base was used to calculate descriptive statistics for sorption ratios of different tuff lithologic types and stratigraphic sorption intcrvals. These summary tables (see Attachment 1) will be included in the report Repository Site Data Report for Unsaturated Tuff, Yucca Mountain Nevada (funded by FIN A-ll58.1 The data will also be used in setting up conceptual models of a tuff site for system-scoping studies under Subtask IA. A copy of the dBase 111 data base was delivered to the NRC for use by staff geochemists. Future efforts under this subtask will include development and documentation of eJditional supplemental software to create a user-friendly sorption data base for the use of the NRC. Subtasks IC, and ID, Kinetic and Dynamic Effects (M. Siegel, K. Erickson, J. O. Leckie) Most of the effort under these subtasks during June was directed toward the completion of two papers. The first paper, entitled "Geochemical Sensitivity Analysis for Performance Assessment of HLW Repositoriest Effects of Speclation and Matrix Diffusion" was discussed in the May Progress report. The second paper, entitled "Approximate Methods to Calculate Radionuclide Discharges for Performance Assessment of HLW Repositories in Fractured Rock" is scheduled to be presented at the 1985 MRS Symposium on the Scientific Basis for Nuclear Waste Management. Approval for the travel of K. Erickson to the meeting and to meetings with scientists at the Swedish RoyalInstitute of Technology has been requested from the NRC. Task II Evaluation of Error Due to Organtes and Colloids No activity during June 1985. 60 .
Task IV Short Term Technical Assistanc- . ( M. Siegel attended meetings with NRC staff ir. Ashington during the week of June 10-14,1985. A letter report discussing the role of radionuellde speelation/ solubility calculations in sensitivity analyses is under preparation. Travel eee. G f 61
APPENDIX ( i JOB AID _S A-1 Statement of Work Outline A-2 Work Bt makdown Structure B Sample Cost Estimating Format C-1 Justification for Other Than Full and Open Competition j C-2 Format for Acceptance of Unsolleited Contract Proposal C-3 The Seven Exceptions to Full and Open Competition D-1 Sample Evaluation Criteria D-2 Competitive Milestone Schedule D-3 Guide for Progress Repeft Requirements l E-1 Source Selection Standards of the FAR l( E-2 Debriefing Unsuccessful Offerors a -l F-1 'Jnauthorized Staff Commitments l F-2 froject Officer Designation Clause F-3 Technical Direction ] F-4 Steps to Effective Contract Administration : ! F-5 The Project Manager and the Changes Clause
- F-6 Changes Cost Reimbursement i
F-7 Termination (Cost-Reimbursement) F-8 Handling Cost Overruns l j F-9 Limitation of Cost and Limitation of Yunds Clauses ! G Key Personnel Clause , H Inspection of Services 1-1 DOE Program Reviews 1
JOB AIDS (Continued) 1-2 Choosing DOE as a Source 1-3 Timing for Ordering Work from DOE I-4 DOE Source Justification and Ordering from DOE Laboratories 1-5 Ordering Work from DOE Laboratories I-6 Proposal Evaluation Check List I-7 Cost Review Flow Chart I-8 Confilet of Interest Considerations in Placing Work with DOE l-9 Organizational Confilets of Interest J Security and Acquisition l \ 1
APPENDIX A-1 4 i STATEMENT OF WORK OUTLINE
- 1. BACKGROUND Explain briefly the situation and what has led to the existing condition.
!!. OBJECTIVE State specifically what you hope to achieve by this contract.
111. T A S K S l A. List each task that must be performed in order to achieve the objective. Subdivide each task where appropriate. 1 D. Incorporate an overall time schedule, such as, the entire project will
! be accomplished by February 1. Subdivide the schedule into time l elements related to tasks you have set forth.
l l 1 C. Delineate specifically the materials that will be provided by you and ) by the contractor, and on what date. Include a specific listing for l each. D. Delinate specifically the work by task and subtask that will be ( performed by yout by the contr6ctor. E. State who is responsible for delays identified to the interfacer between your services and the contractor; for work, for materials. IV. CONTROLS i l State the controls you will enforce to maintain schedule and cost within ) the budget for time and dollars you have established. l l V. REPORTING REQUIREMENTS, DELIVERABl.ES ] ] VI. INSPECTION AND ACCEPTANCE A. State how in-process and final acceptance will be performed and what l )l may constitute a stop-work order or re-work requirement by you. B. State the criteria that must be met in order for stou to accept the final product. VII. EXHlBITS ! i 1 A-1-1
APPENDIX A-2 ( WORK BREAKDOWN STRUCTURE TASK OR FUNCTION . I l l l I , SUB SUB SUB i TASKS TASKS TASKS I . t t DISCRETE DISCRETE ' SUBTASKS SUBTASKS ADDITIONAL ADDITIONAL FUNCTIONS FUNCTIONS
?.-2-1 ,
APPENDIX B l' DEVELOPING AN INDEPENDENT GOVERNMENT COST ESTIMATE For our purposes, cost estimating is described as the process of assessing or forecasting the cost of performing the specific task (s) to be procured by contract. To arrive at a realistic cost estimate for the work to be performed by a contractor, we must focus on every cost element that comprises the total estimated cost. Each cost element is discussed in the attached instructions for completi,ng the contract cost estimate form. 1 When developing cost estimates, you will be drawing on past experience in
) estimating the hours required for the contractor to successfully complete the effort. Each category of profess lonallabor must be considered separately.
ATTACH MENTS
, Attached are the worksheets to be used for developing the cost estimate. The l Contract Cost Estimate form (Attachment 1) contains specific block by block i instructions. Because contractor travel is comprised of several elements, we I
have developed & Travel Worksheet (Attachment 2) to aid you in estimating this cost. Since subcontract costs contain many of the same cost elements as 1 does the contract cost, use a separate Contract Cost Estimate form to estimate subcontract cost. Finally, for illustrative purposes, we have - completed sample worksheets for arriving at an independent government cost ( estimate for a seismic study (Attachment 3). One final word - Since cost estimates we de"slop are for government use only, these estimates shall not be revealed to a potential contractor. j You are encouraged to seek the aid of the Division of Contracts in developing your estimates. P i J )
- I
) 4 i i B-1
APPENDIX B (Continued) INSTRUCTIONS FOR COMPLETING CONTR ACT COST ESTIM ATE FORM Block 1: Direct Material List au direct materials to be purchased under the contract and other the applice S cost. Block 2: Material Overhead Overhead rates wiu very considerably however, a good estimate is 8% of the base (direct material). Enter the sum of the overhead rate times the base in the total estimated cost column. Block 3: Direct Labor 1 Enter all applicable labor categories required to complete the ! project, e.g. Project Director, Senior Analyst, scientist, clerical, i etc. and the estimated hours for all related tasks / subtasks. The l I estimated cost for each labor category equals the estimated hours times the hourly rate for t;ie labor category. Include inflation factors as necessary for contract performance periods of a year or longer. Total the estimated cost for all applicable labor categories I (TOTAL DIRECT LABOR) and place the sum in the column marked l Total Estimated Cost. Block 4: Labor Overhead and Fringe Benefits l Overhead percentage and fringe benefit amounts (vacations, insurance, etc.) will very with each organization. When preparing the cost estimate, a separate calculation is needed for each. The best estimate for fringe benefits it 20% of the base (Direct Labor). List the fringe benefit rate and multiply times the base. Place the sum in the estimated cost column. The best recent average estimate for labor overhead is 100% of the l base (Total Direct Labor plus Fringe Benefits). List the Overhead rate and multiply times the base and place the sum in the estimated cost column. Finally, place the sum of fringe benefitt and labor overhead in the total estimated cost column for TOTA's LABOR OVERHEAD. Block 5: Subcontracts List any items that might be subcontracted. Drawing on past experience, you may deduce that a particular task or subtask may B-2
1 APPENDIX B (Continued) l { j be subcontracted because of the highly specialized nature of the
- work or perhaps special equipment or facilities may be required ,
that the prime contractor may not have. For contracts of $500,000 ' or more, the prime contractor is required, when possible, to subcontract work to small businesses and to small and t disadvantaged businesses. The estimated cost for subcontracted items includes direct labor, fringe benefits, overhead, general and ;
, administrative (G&A) rate, and fee. (G&A and fae are explained in Blocks 10 and 12 below.) When ap riate, travel and other direct ! costs (see Blocks 6 and 8) are to neluded in subcontract oosts.
! To estimate subcontracting costs, use a contract cost estimate i form. ; $ Block 6: Travel i 1 For ustimating costs use Federal Travel Regulation rates. For most cities the current per diem shell be reimbursed at a daily rate : i not to exceed $50.00. Per diem rates for travel to high rate I q geographical areas vary in amounts exceeding $50 up to $75. (See ; l NRC Manual Chapter 1501 for listing.) Travel by privately owned ; i automobile shall be reimbursed at the rate of 20.54 (current rate) - per mile. Travel by rented automobile shall be re:mbursed on a . ! reasonable actual expense basis. To facilitate the utimate of l ) . travel costs, the Travel Worksheet should be used. Trarefer the j i i sum for the estimated cost for travel to the total estimated cost ! j column of she Contract Cost Estimate sheet. ! 1 l Block 7: Connaltants f I If consultants are likely to be utill:,ed, itemise estim*' ,a costs for I each consultant by multiplying days (or hours) espenoed times daily ; (or hourly rate) for speelfic consultant services (estimated cost )
- column) and place total amount in total estimated cost column. I
} Other Direct Costs Block 8: j Itemite any Other Direct Costs on a separatc theet. These costs ! may include items such as supplies, data processing support, l J computer services, reproduction costs, telephone charges, etc. , Enter the total in the total estimated cost column. , ( j Block 9: Total Direct Cost and Overhead j
! Sum of the total estimated cost column.
i 1 i l j B-3
- - - _ _ _ _ ---_a
APPENDIX B (Continued) Block 10: General and Administrative (G&A) The rate is based on an estimated cost to support various departments, such as Accounting, Personnel, Contracts, Legal, etc. Generally speaking the rates are in the 20% range. The base for G&A expenses is the total of direct labor, labor overhead, travel and other direct costs. Subcontracting and consultant costs are usually not part of the base. Multiply the rate times the base t and enter the sum in the total estimated cost column. Block 11: Total Estimated Cost (Not including Fee or Profit) Total the amounts in the total estimated cost column. Block 12: Fee or Profit Profit or fee is generally regarded as remuneration for the risk involved in undertaking the contract tasks. Profit or fee is expressed as a dollar amount which equates to a percentage of the , estimated cost. Generally speaking, not more than 7% should be
; used for routine efforts under a cost-relmbursement entract and i not more than 13% for routine efforts under a fixed-price j contract. Add I % for moderately complex work and 24 for highly complex work (e.g. state-of-the-art). < ,
Block 13: This block includes The Total Estimated Cost and the Fee or Profit, which is our independent govemment cost estimate for the l particular effort to be contracted for. l l : i ] i f' I i l i i ! l B-4
APPENDIX B (Continued)
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B-7
APPENDlX B-8 (Continued) u/n hausta t13.A4 111 sette9e ttwe, swi.; e# #. 44 im ea es rw smaas Jeaa See Feommary 1. 1M4 Jeawary 31. 1901 M3 GIP'1Ji Of C38T CLDe(NTS
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- 3 i
I" "4 B-9 , l
i ! 1 i ., i , Exhibit 8 i APPENDIX B (Continued) l I
,i
} Cost Estimate No. 8 l l ! Other Direct Costs: ; i i 2
- 1) Reproduction of reports 200 l 4 :
- 1) Computer Services i
1 j 250 ! e 10 hours 4 $25/ hour 5 I l $450 i i i [ j i l ! l i i ! l ! 1 ! ] i i i l .I
)
I t l ! i i l [ 1 J t i i ! l t 4 I ? ! ATTACHMENT 3 (Page 4 of 4) i i 1 B-10 l t
- . __=, __ - -
l APPENDIX C-1 l f' JUSTIFICATION FOR OTHER THAN FULL & OPEN COMPETITION (JOFOC) l 6.303-2 Content (a) Each justification shall contain sufficient facts and rationale to I justify the use of the specific authority cited. As a minimum, each justification shall include the following informations ! t (1) Identification of the agency and the contracting activity, and specific l Identification of the dccument as a "Justification for other than full and open l competition." l (2) Nature and/or description of the action being approved. l (3) A description of the supplies or services required to meet the agency's t needs (including the estimated value). (4) An identification of the statutory authority pr.rmitting other than full and open competition, i (5) A demonstration that the proposed contractor's unique qualifications [ or the nature of the acquisition requires use of the authority cited. ( (6) A description of efforts made to ensure that offers are solleited from as many potential sources as is practicable, including whether a CBD notice we:s or will be publicized as required by Subpart 5.2, and, if not, which exception under 5.202 applies. (7) A determination by the contracting office that the anticipated cost to the Government will be fair and reasonable. (8) A description of the market survey conducted (see 7.101) and the results or a statement of the reasons a market survey was not conducted. (9) Any other tacts supporting the use of other than full and open competition, such as (!) Explanation of why technical data packages, speelfications, engineering descriptions, statements of work, or purchase descriptions suitable for full and open competition have not been developed or are not available. (ii) When 6.302-1 is cited for follow-on acquisitions as described in 6.302-1(aX2Xil), an estimate of the cost to the Government that would be duplicated and how the estimate was derived. (11) When ti.302-2 is cited, data, estimated cost, or other rationale as to the extent and nature of the harm to the Government. ( (10) A listing of the sources, if any, that expressed, in writing, an interest in the acquisition. C-1-1
. - = _ . ._. _ ~ . - _ _. .- _ . - . . ..
1 (11) A statement of the oc.lons, if any, the agency may take to remove l or overcome any barriers to competition before any subsequent acquisition for , the supplies or services required. t P (12) Contracting officer certification that the justification is accurate i and complete to the best of the Contracting Officer's knowledge and belief. l (b) Each justification shall include evidence that any supporting data that ! is the responsibility of technical or requirements personnel (e.g., verifying the Government's minimum needs or schedule requirements or other rationale for other than full and open competition) and which form a basis for the 4 justification have been certified as complete and accurate by the technical or , requirements personnel. [FAC 84-13, 50 FR 52-433, 12/23/85, effective
*/3/86) }
i I 4 : J 6 ; [ 1 : i r l i l l L I i i . i i J ! l 1 l 4 4 i C-1-2 l I
. _ _ . _ _ _ _ - . - _ _ _ _ _ . _ _ _ . __ , _ _ _ _ _ _ _ _ _ _ _ _ _ _ . . ~ _ _ . . _ . _ , _ _
1 APPENDIX C-2 - FORMAT FOR (. 'USTIFICATION FOR ACCEPTANCE OF , UNSOLICITED CONTRACT PROPOSAL I CONTRACTOR: VALUE: 1 , i SUPPLIES /SERYlCES: i i ! recommend that the unsoltelted proposal entitled (title, number, and date) I submitted by (source) on its own initiative be accepted for support and that
- negotiation be authorized without further competition.
i j
- 1. Project Description Describe the work with an empheels on the unique, innovattve, or '
j meritorious approach offered by the unsolleited proposal. ; i l 2. Merit
- l Describe the overall scientific, technical, or soeloeconomie merit of I
! the unsolleited proposal. ;
j 3. Contribution to Mission Describe the contribution that the work will make to NRC's speelfle mission, j l 4. Integral Capabilities of Offeror l Describe the capabilitiet, related experiences, facilities, techniques,
! or unique combinations thereof which the offeror possesses and offers which are considered to be integral factors for achieving the i scientifle, technleal, or socioeconomic objective (s) of the unsollelted I proposal.
t l i j
- 5. Quallfleations of Key Personnel
{ Describe the quellfications of key personnel who are considered l critical to achieving the objectives of the unsolleited proposal.
] ;
i i 6. Certification j t i i in addition to a favorable comprehensive evaluation, indleate that the l j subject matter of the unsolleited proposal meets the following criteria 1 J (and include certification to that effect): ) i i
- Is not avallable to NRC without restriction from any other source:
[ } i j C-2-1 1
- - _ , _ . _ , . - - - - - _ _ . - . - . . . -__-_..--n,___.. _-,-_- - , -_.,, - n, - - - - - - - _ - _ . . , _ - - - , . - - . - - , - - -
Appendix C-2 (Continued)
- Does not closely resemble the content of any pending or correct competitive solleitations and
- !s not available without restriction from any other source, does not resemble any pending competitive solleitation, and is sufficiently unique to justify acceptance on a noncompetitive basis.
Recommendation: Project Manager Date , l Concurrence: Designating Official Date J Approval: Contracting Officer Date
+
i s l l l i f 1 C-2-2
APPENDIX C-3
\
1 l Tile SEVEN EXCEPTIONS TO FULL & OPEN COMPETITION (FAR 8.302)) 6.302 Circumstances permitting other than full and open competition. < I The following statutory authorities (including applications and limitations) l permit contracting without providing for full and open competition. : lleautrements for justifications to support the use of these authorities are in i
> 6.303. (FAC 84-13,50 FR 52431,12/23/85, effective 2/3/86)
(1 19,722.05) 6.302-1 Only one regnalble source and no other supplies or servlees will satisfy agency requirements. , 3 (a) Authority. (1) Citations: 10 U.S.C. 2304(c)(1) or 41 U.S.C. 253(c)(1). { (2) When the supplies or services req 6ed by the agency are available from only one responsible source and no dner type of supplies or services will satisfy agency requirements, full and open competition need not be provided for.
~
I (1) Supplies or services may be considered to be avallable from only one i source if the source has submliMd an unsolleited research proposal that Jll demonstrates a unique and innovative concept the substance of which (A) is not otherwise available to the Government, and (B) does not resemble the j substance of a pending competitive acquisition. (See 10 U.S.C. 2304(dXIXA) . or 41 U.S.C. 253(dXI)( A)).) (11) Supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued development or
; production of a major system or highly specialized equipment, including major
- components thereof, when it is likely that award to any other source would i i result in (A) substantial duplication of cost to the Government that is not j expected to te recovered through competition, or (B) unacceptable delays in fulfilling the agency's requirements. (See 10 U.S.C. 2304(dXIXB) or 41 U.S.C.
253(dXIXB).) 6.302-2 Unusual and compelling urgency. ; l (a) Authority. (1) Citations: 10 U.S.C. 2304(eX2) or 41 U.S.C. 253(cX2). l (2) When the agency's need for the supplies or services is of such an
! unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals, full and open competition need not be i; provided for.
i i C-3-1
4 . I 6.302-3 Industrial mobilization; or engineering, developmental, or research capability. ; L j (a) Authority. (1) Citations: 10 U.S.C. 2304(c)(3) or 41 U.S.C. 253(c)(3). (2) Full and open competition need not be provided for when it is necessary to award the contract to a particular sourcu or sources in order (i) to maintain a facility, isroducer, manufacturer, or other supplier available for furnishing supplies or services in case of a national emergency or to achieve 4 Industrial mobilization, or (11) to establish or maintain an essential engineering, research, or development capability to be provided by an educational or other I j nonprofit institution or a federally funded research and development center, j l 1 4.302-4 International agreement. (a) Authority. (1) Citations: 10 U.S.C. 2304(cX4) or 41 U.S.C. 253(c)(4).
! (2) Full and open competition need not be provided for when precluded by the terms of an international agreement or a treaty between the United States and a foreign government or international organization, or the written ' directions of a foreign government reimbursing the agency for the cost of the acquisition of the supplies or services of such Government.
6.302-5 Authorised or required by statute. f (a) Authority. (1) Citations: 10 U.S.C. 2304 (c) (5) or 41 U.S.C. 253(c)(5). , t (2) Full and open competition need not be provided for when (1) a statutet expressly authorizes or requires that the acquisition be made through another ; agency or from a specified source, or (11) the agency's need is for a brand name : commercial item for authorized resale. l l l l 4.302-4 National security j (a) Authority. (1) Citations: 10 U.S.C. 2304(c)(6) or 41 U.S.C. 253(c)(6). f l (2) Full and open competition need not be provided for when the t disclosure of the agency's needs would compromise the national security unless l jl the agency is ptrmitted to limit the number of sources from which it solicits l { bids or proposals, k 3l ... I I I l I C-3-2 l
6.302-7 Public Interest (a) Authority. (1) Citations: 10 U.S.C. 2304(e)(7) or 41 U.S.C. 253(c)(7). ( (2) Full and open competition need not be provided for when the agency head determines that it is not in the public interest in the partleular seguisition concerned.
.e e in each case a written justification shall be inade to support use of the appropriate exception.
.i e l I l l l f C-3-3 l
APPENDIX D-1 SAMPLE EVALUATION CRITERIA EVALUATION CRITERIA: The following evaluation criteria will be used in the evaluation of proposals submitted in response to this RFP. The criteria are presented in decreasing order of importance.
- 1. Qualifications of Key Personnel (50 points)
The contractor must have, or through subcontractual arrangements be able to provide, the professional staff to furnish consulting and technical assistance servlees to the NRC in the following disciplines as applied to nuclear power plants: mechenical, electrical, instrumentation, civil / structural, geological, chemical, metallurgical, welding nondestructive examination (NDE), health physics / radiation monitoring, safeguards / security, including reactor design, i manufacturing, construction, inspection, testing, operation, and 1 maintenance. ] The contractor must demonstrate the following: 1 A. Expert knowledge and experience in engineering and qusilty assurance as applied to design, construction, inspection, testing, t k startup, operations, maintenance and modifications of nuclear power plants. (10 points) ] B. Expert knowledge of quality assurance and quality control activities. (9 points) C. Expert knowledge of nuclear power reactor technology for both l BWPs and PWRs. (7 points) l l 1
, D. Expert knowledge in planning and performir.g work required for !
various types of emergency outages. (7 points) i E. Expert knowledge and experience in developing programs and procedures for inspections and other activities related to significant problems during construction or operation. (6 points) l F. Exp;rt knowledge of codes and standards applicable to the nuclear ) power industry. (6 points) < . G. Experience in providing technical arststance services in the nuclear power field. (5 points) j ! D-1-1
1 - Appendix D-1 (Continued)
- 11. Understanding of Work Requirements (20 points) !
A. A domonstrated understanding of the work and technical services t l involved. (10 points) l ) D. A demonstrated ability to respond and perform satisfactorily for Task Orders in a timely manner under routine circumstances, and > on a replo-response basis when required. ($ points) ; rovide quellfled personnel to complete ; l' C. A demonstrated assigned ability Task Orders to factorily on a timely basis, including the satis j demonstrated ability to provide quallfled subcontractor personnel i l 4 when contractor's staff personnel are not available or do not meet j the requirements of the Task Order. (5 points) l i
!!!. itanagement Capabilities (15 points) f A. Capabilities, areas of expertise and related experience of the !
i offemr's or2anization. (3 points) ! i B. Management and control plan for this contract. (3 points) l l C. Compliance of quality assurance program with 10 CFR 50. (3 j i points) i l l j D. Ability to accept and complete speelfic Task Order alsignments on l j a rapid-response (when required) and short turn around basis. (2 ! points) l I 1:. Ability to provide technical reports of work performed in a format j I suited to the needs of the NRC on a short turn basis. (2 points) l 1 ! F. Available facilities and support services. (2 points) l l \ IV. Technleal Approach to Cover the Work Statement (15 points) l l A. Methodology for analysis and description of espabilities and i proposed activities to cover the scope of coritract Task Orders to j be performed. (15 points) j ' l } \ l l i l j D-1-2 1 4
I APPENDIX D-2 l l SCHEDULE A - Competitive Procurement Milestone [ ] Original l ( Schedule for RFPA No. [ ] Revised i TITLE: SPECIALIST: . MILESTONES PROJECTED DATE ACTUAL DATE ,
- 1. lititial Division of Contracts l Contract with Program Office l
- 2. Receipt of RFPA in DC
- 3. Milestone Chart Completion !
- 4. Statement of Work Agreed Upon ;
- 5. RFP Drafted by Specialist !
- 6. Panel Meeting on RFP Draft 7 CBD Synopsis Malled i I !
- 8. Special Approvals (speelfy)
- t
(
- 9. RFP lasued j
- 10. Preproposal' Conference
- 11. RFP Closing Date l
- 12. Technical Evalutilon of Individual Panel Members
- 13. Panel Meeting on Proposal f Technical Acceptability ll
- 14. Cost Evaluation !
l T5. Panel Meeting on Compett-l five Range l l To Competitive Range Recom-mendatlan Report issued D-2-1
t I I t SCllEDULE A - Continued ,
- t l . I f I MILESTONES PROJECTED DATE ACTUAL DATE
- i
- 17. Notification to Offerors i of Competitive Range
(
- 18. Audit Report (s) Requested ,
Av. unseussions initiatec { l 1 20. Discussions Contpleted i
- i I 21. Best and Final Offers l Requested l
i '
- 22. Best and Final Offers l Received 1
- 23. Panel Meeting to Evaluate j Best and Final Offers i
- 24. Final Evaluation Report i Received I
- 25. Freaward Approvtl(speelfy) i i
l . f
- 26. Contract Mailed for f j Contractor Signature
[
- 27. Contract Execution / f Distribution j t
i 28. CBD Award Notification / Award Notification to , Unsuccessful Offerors I
- 29. Postaward Orientation 1 l 1 !
i Panel Chairman j j SEP Members
)
I Contract Specialist l ,, I J l t>-2 -2 1 I
i I APPENDIX D-3 ; f OUIDE FOR PROGRESS REPORT REQUIREMENTS
- 1. Set forth detailed reporting requirements in the contract. ,
- 2. Do not leave those requirements to the discretion of the contractor. l j
- 3. Prescribe the type of Information and the amount of detall required in l' relation to the work involved so that:
( i a. Program personnel will be in a better position to detect problems and l i counsel the contractor on their resolution. l b. The Project Manager can knowledgeably recommend changes in the l ] work scope or redirect work within the general scope of the contract. 4 ) e. Suf!!clent information will be obtained about the details of , 1 performance to enable the Project Officer to monitor performance l l effectively, correlate progress with expenditure and recommer,d c vouchers for payment. ' 4 i
- d. A record of the contractor's past performance can be developed
- through use of progress reports to facilitate the Project Manager's decision about whether it will be to NRC's advantage to award l l , extensions of the contract to the same source, or to sollelt the ,
J ( requirement anew to uncover a more productive source. l ) e. In the extreme, where progress is unsatisfactury, the project manager can recommend termination of the contract in the NRC's best interest. ! j More far-reaching purposes are served when NRC defines the type and f{ extent of information required for progress reports, j l
- a. The end product of most contracts is the final comprehensive report, i
- i.e., the summary of data and findings. However, NRC contracts are l
- often extended several years before a final report la rendered. In the '
interim, progress reports should satisfy the twofold purpose of (1) ! making partial delivery of findings, and (11) providing enough informa-1 tion to enable the Project Manager te monitor performance effee- , l tively. NRC's insistence on prescribed progress reporting data is ! i particularly important in incrementally funded contracts to feellitate 4 the ultimate deelslon about whether to allot additional funds to the l contract. j i b. The Project Manager sometimes has a responsibihty for assessing j contributions of several contractors engaged in related programs. The ! Project Manager's task is to bring these contributions and results into j some meaningful whole. Under these conditions, we would not leave it up to each individual contractor to determine for itself what informa-t tion in progress reports is appropriate for NRC's needs. Only NRC can
' identify the information needed to facilitate a comparison and compl-j lation of data obtained from several sources.
! o-3-1
APPENDIX E-1 FOURCE SELECTION STANDARDS OF THE FAR ( These prinelples come from FAR Part 15 and provide the Standards for Source Selection. These should be compared with the NRC Manual Chapter 5101, 15.603 Purpose Source selection procedures are designed ton (a) Maximize competition; I (b) Minimize the complexity of the solleitation, evaluation, and the Selection deelslons (c) Ensure impartial and comprehensive evaluation of offeror's proposals; and 1 (d) Ensure selection of the source whose proposal has the highest degree of realism and whose performance is expected to best meet stated Government requirements. 15.608 Proposal evaluation {[ (a) Proposal evaluation is an assessment of both the proposal and the offeror's ability (as e' tveyed by the proposal) to successfully accomplish the l prospective contraci. an agency shall evaluate competitive proposals solely on the factors speelfled in the sollettation. 1 (a)(1) Cost or price evaluation. The Contracting Offleer shall use cost or , price analysis (see Subpart 15.8) to evaluate the cost estimate or price, not ' only to determine whether it is reasonable, but also to determine the offeror's ! understanding of the work and ability to perform the contract. The 1 Contracting Officer shall docume.it the cost or price evaluation. l I } (a)(2) Technleal evaluation. If any technleal evaluation is necessary beyond ensuring that the proposal meets the minimum requirements in the i sollettation, the cognizant technleal offielal, in documenting the technleal I i evaluation, shall include i i : (a)(2XI) The basis for evaluationt l (aX2Xil) An analysis of the technleally acceptable and unacceptable . proposals, including an assessment of each offercr's ability to secomplish the ) technical requirements i ) (aX2Xill) A summary, matrix, or gaantitative ranking of each technleal l proposai in relation to the best rating possibles and j l E-1-1 i l l l
Apt.endix E-1 (Continued) (a)(2)(iv) A s ammary of findings. (b) All proposals received in response to a solleitation may be rejected if the agency head determines in writing that-(1) All otherwlae acceptable proposals received are at unreasonable prices 15.609 Competitive range (a) The Contracting Officer shall determine which proposals are in the competitive range for the purpose of conducting written or oral discussion (see 15.610(b)). The competitive range shall be determined on the basis of cost or price and other factors that were stated in the solleitation and shallinclude all proposals that have a reasonable chance of being selected for award. When there is doubt as to whether a proposal is in the competitive range, the prop'asal should be included. (b) If the Contracting Officer initially solleits unpriced technical proposals, they shall be evaluated to determine which are accepteble to the Government or could, after discussion, be made acceptable. After necessary discussion of these technical proposals is completed, the Contracting Offleer shall (1) sollelt price proposals for aU the acceptable technical proposals which offer the greatest value to the Government in terms of performance and other factors and (2) make award to the low responsible offeror, either without or following discu::sfon, as appropriate. Except in acquisition of architect-engineer services (see Subpart 36.6), a competitive range determination must include cost or price proposals. 15.610 Written or oral discussion (a) The requirement in paragraph (b) below for writter or oral discussion need not be applied in acquisitions-(1) in which prices are fixed by law or regulations (2) Of the set-aside portion of a partial set-asides or (3) In which it can be clearly demonstrated from the existence of full and open competition or accurate prior cost opetince with the product or service that acceptance of the most favorak initlM proposal without discussion would result in the lowest overall c ast to the. Government at e fair and reasonable prices provided, that-(1) The solleitation notified all offerors of the possibility that award might be made without discussions and (11) The award is in fact made without any written or oral discussion with any offeror. E-t-2
Appendir E-1 (Continued) . ( (b) Except as provided in paragraph (a) above, the Contracting Officer sha;l conduct written or oral discussion with all responsible offerors who submit proposals within the competitive range. The content and extent of the discussloas is a matter of the Contracting Officer's judgment, based on the particular facts of each acquisition (but see paragr,aphs (c) and (d) telow). (c) The Contracting Officer shall-(1) Control all discussions; (2) Advise the offeror of deficiencies in its proposal so that the offeror is given an opportunity to satisfy the Government's requirements; (3) Attempt to resolve any uncertainties concernlig the technical , propesal and other terms and conditions of the proposal; (4) Resolvo any suspected .aistakes by calling them to the offeror's attention as specifically as possible without disclosing information concerning other offerors' preposals or the etaluation process (see 15.607 and Part 24); and (5) Provide the offeror a reasonable opportunity to submit any cost or price, technical, or other revisions to its proposal that may result from the discusslor,s. (d) The Contracting , Officer and other Government personnel involved shall not engage in-(1) Technical leveling (i.e., helping an offeror to bring its proposal up to the level of other proposals through successive rounds of discussion, such as by pointing out weaknesses resulting from the offeror's lack of diligence, competence, or inventiveness in preparing the proposal); (3) Auction techniques, such as-(1) Indicating to an offeror a cost or price that it must meet to obtain further consideretion; , (11) Advising an offeror of its price standing relative to another offeror (however, it is permissible to inform an offeror that its cost or price is considered by the Government to be too high or unrealistic); and (iii) Otherwise furnishing information about other offeror's prices. [FAC 84-5,50 FR 1741,1/11/85, effective 4/1/85) 15,611 Best and final offers. (a) Upon completion of d:scussions, the Contracting Officer shall issue to all offerors still within the competitive range a request for best and final offers. Oral requests for best and final offers shall be confirmed in writing. { E-1-3
Appendix E-1 (Continued) (b) The request shall include-(1) Notice that discussions are concluded; (2) Notice that this is the opportunity to submit a best and final offer; (3) A common cutoff date and time that allows a reasonable opportunity for submission of written best and final offers; and (4) Notice tnat if any modification is submitted, it must be received by the date and time specified and is subject to the Late Submissions, Modifications, and Withdrawals of Proposals or Quotations provision of the solicitation (see 15.412). (c) After receipt of best and final offers, the Contracting Officer should not reopen discussions unless it is clearly in the Government's interest to do so (e.g., it is clear that information available at that time is inadequate to i reasonable justify contrsctor selection and award based on the best and final of fers received). If discussions are reopened, the Contracting Officer shall issue an additional request for best and final offers to all offerors still within the competitive range. (d) Following evaluation of the best and final offers, the Contracting Officer (or other designated source selection authority) shall select that source whose best and final offer is most advantageous to the Government, considering price and the other factors included it. the solicitation (but see ' r 15.608(b)). (FAC 84-5, 50 FR 1741,1/11//85, effective 4/1/85; FAC 84-16,51 FR 19715,5/30/86, effective 5/30/86) l l l l E-1-4
l APPENDIX E-2 DEBRIEFING UNSUCCESSFUL OFFERORS { When a proposal is eliminated from consideration for award, the Contracting Officer usually gives immediate notification to the offeror. Unsuccessful offerors may be furnished the reasons why their proposals were not accepted if a written request for debriefing is received by the Contracting Officer. When appropriate, the Contracting Officer will request that personnel who evaluated the unsuccessful proposals participate in the debriefing meeting. Written or oral requests for debriefings received by program uel must be referred immediately to the Contracting Officer. A debriefing should:
- 1. Inform an unsuccessful offeror which areas of its proposal were judged to be weak or deficient and whether the weaknesses or deficiencies were factors in the offeror not having been selected.
- 2. Identify the factors which were the basis for selection for the successful proposal. If the potential of the successful proposal to satisfy the mission requirements was the basis for selection, the unsuccessful offeror should be so informed and given a general comparison of significant areas, but not a point-by-point comparison of all the elements considered in the evaluation criteria. If the successful offeror was selected on the basis of cost, the unsuccessful 4
offeror should be so informed. A brief report, summarizing the results of the debriefing, will be placed in the contract file. A debriefing should not reveal:
- 1. Confidential business information, trade secrets, techniques, or processes of other offerors.
- 2. The relative merits or technical standing of the unsuccessful offerors.
If an unsuccessful offeror feels that its exclusion from the award was not justified, it will rely, at least in part, on the information given in the debriefing to determine whether to seek recourse against that exclusion. Therefore, it is essential that a debriefing be conducted in a scrupulously fair, objective and impartial manner, and that the information given the unsuccessful offeror be absolutely factual and consistent with the findings of the Contracting Officer including the basis on which a decision was made. E-2-1 1
APPENDIX F-1 ( UNAUTHORIZED 'I'AFF COMMITMENTS TO CONTRACTORS The only NRC personnel authorized to contract on behalf of the Government are Contracting Officers, duly designated and appointed in accordance with the Federal Acquisition Regulation. All work to be performed by a contractor must be authorized by a Contracting Officer. Any contract, modification to a contract, or direction resulting in new or additional work, including any financial commitment by NRC personnel other than a Contracting Officer, is unauthorized. Responsibility for the decision of what to buy and when to buy rests with the Project Manager. Responsibility for determining how to buy, for conduct of the buying process, and for execution of the contract rests with the Contracting Officer. Unauthorized commitments can cause numerous problems for programs within NRC as well as create unhealthy business relationships. Examples of potential problems created by such actions are: The directed work may not be necessary or in conformance with existing plans; There are no controls imposed upon the contractor for performance; NRC may be required to defend against a lawsuit by the contractor for ( compensation as a result of the work; The contractor may have an organizational conflict of interest and not be legally eligible for the contract; The contractor may be on the debarred bidders list or in violation of equal employment opportunity or environmental requirements, and not be legally eligible for the contract; and
]
There may be a violation of the Anti-Deficiency Act. Any NRC employee who makes an unauthorized commitment to a contractor undertakes the risk of substantial personal liability for costs incurred by the contractor. If the Contracting Officer does not ratify the employee's unauthorized commitment and the contractor has performed in good faith, the contractor may act to recover damages directly from the NRC employee. In the event of an unauthorized commitment by an NRC employee, these procedures apply: The NRC employee making the unauthorized contractual commitment must prepare a request for ratification. 1
- The request with the required information must be forwarded to the
( office director for that official's concurrence. F-1-1
APPENDIX F-2 ( NCR PROJECT OFFICER DESIGNATION CLAUSE PROJECT OFFICER: A. The individual (s) listed in "B" below is (are) hereby designated as the Contracting Officer's authorized representative (hereinafter called Project Officer) for technical aspects of this contract. The Project Officer is not authorized to approve or request any action which results in or could result in an increase in contract costs or terminate, settle any claim or cispute arising under tne contract, or issue any unilateral directive whatever. The Project Officer is responsible for: (1) monitoring the Contractor's technical progress, including surveillance and assessment of perform-anee, and recommending to the Contracting Officer changes in requirements; (2) interpreting the scope of work; (3) performing technical evaluations as required; performing technical inspections and acceptances required by this contracts and (5) assisting the Contractor in the resolution of technical problems encountered during perform-ance. Within the purview of this authority, the Project Officer is , authorized to review all costs requested for reimbursement by . Contractors and submit recommendations for approval, disapproval, or suspension for supplies / services required under the contract. The
, Contracting Officer is responsible for directing or negotiating any changes in terms, conditions, or amounts cited in the contract.
For guidance from the Project Officer to the Contractor to be valid,it musti (1) be consistent with the description of work set forth in the contract; (2) not constitute new assignment of work or change to the expressed terms, conditions or specifications incorporated into this contracts (3) not constitute a basis for an extension to the period of performance or contract delivery schedule; and, as stated above, (4) not constitute a basis for any increase in the contract cost. B. Name and Mall Code
- Office Address -
Telephone Numbers *
- To be incorporhted into any resultant contract F-2-1
APPENDIX F-3 ( TECHNICAL DIRECTION The Technical Direction clause included in all NRC cost-type contracts ellows for clarification, interpretation, and/or direction by a buyer (NRC) to a seller (contractor) regarding the successful fulfillment by the seller of the buyer's requirements. It is included in a cost type contract to give NRC technical personnel a designated status during contract performance and to osure that NRC maintains control of the work during its performance. The clause is recessary because the work staterr for most cost-type contracts is vague, a condition that results in a need for interpretation and adjustment as work progresses. The intent is for NRC to get what it pays for and, for the contractor, to provide only what the contract requires. Generally, the clause allows the Project Manager to gulde tne technical aspects of the project and gives him/her responsibility for the general surveillance of the work performed. The clause does not allow the Project Manager to provide direction to the contractor if the result of that direction is a change to the terms of the contract, an increase in contract price, or an extension of the period of performance. l TECHNICAL DIRECTION CLAUSE IN NRC CONTRACTS The NRC Project Officer (PO) named in this contract is responsible far guiding the technical aspects of the project and for general surveillance of the work performed. The Project Officer is not authorized to make any commitments or any changes which constitute work not within the general scope of this contract, or constitute a basis for an increase in contract price or extension of the contract Period of Performanse. Technical direction must be within the general scope of work stated in the contract. The Project Officer does not have the authority to and may not issue any technical direction whicht Constitutes an assignment of additional work outside the general scope of the contract. i Constitutes a change as defined in the clause entitled "Changes." l In sny way cause an increase or decrease in the total estimated contract cost, the fixed fee, if any, or the time required for contract performance. Changes to any of the expressed terms, conditions or specifications of the contract. F-3-1 l
Appendix F-3 (Continued) ALL TECH NIC AL DIRECTIONS SHALL BE ISSUED IN WRITING BY THE PROJECT OFFICER OR SHALL BE CONFIRMED BY HIM/HER IN W RITING WITHIN TEN (10) WORKING DAYS AFTER VERBAL ISSUANCE. A copy of said written direction shall te provided to the Contracting Officer. , in the event the Project Officer desires a change to the contract within one or more of the categories ac defined in (1) through (4) of paragraph B above, he/she must direct such request to the Contracting Officer. The Contracting Officer will handle the request in accordance with applicable laws and regulations. Any unauthorized commitment or direction issued by the Project Officer may result in an unnecessary delay in the contractor's performance and may even result in the contr.'.ctor expending its own funds for unallowable costs under the contract. If the contractor receives guidance from the Project Officer which the contractor feels is not valid under the criteria cited above, the contractor shall immediately notify the Project Officer. If the Project Officer and the contractor are not able to resolve the question within 5 days, the contractor shall notify the Contracting Officer. l 1 l l l F-3-2
APPENDIX F-4 STEPS '.1 EFFECTIVE CONTRACT ADMINISTRATION Start with a good contract. Proper planning and negotiation of all key points for inclusion in the contract can make contract administration a relatively easy task. Negotiate thoroughly. Make certain that all obligations of all parties are thoroughly covered and understood by all involved, i.e., Contractor, Project Manager, contreet specialist Cover all aspects of special provisions in detail and major clauses in generai provisions as well. Develop a postaward milestone chart for each contract. Ideally, this should be developed at the negotiation, with copies then distributed to all in attendance. Otherwise, a chart should be developed shortly after the award between Project Manager and specialist, again with copies distributed to interested parties, i.e., Contracting Officer, program support, ELD, etc., as deemed necessary. Read progress reports. Be sure to read periodic or monthly progress reports and, if possible, discuss them with the contract specialist. As the voucher review process is now established, this should also be discussed with the contract specialist. Schedule periodic progress review meetings with the contract specialist. Arrange for periodic meetings on a regular basis to discuss performance and problems.
!avite the contract specialist to all meetiners with contractors. Bring any meetings with contractors to the contract specialist's attention in advance.
Request he/she attend as many as possible, including those held at contractor'c facilities. (Contracting Officers likewise should invite the Project Manager to all meetings with the contractor.) Stay on top of your responsibilities in the contract. Make timely responses to contractor or program inquiries regarding certain events during contract performance. Evaluate the final report. Meet with the Contracting Officer shortly after receipt of the final report to determine its acceptability. If it is not fully acceptable, act quickly to notify the contractor. Make sure some form of final evaluation of overall contractor's performance is made and placed in the official contract file (at least a memo from the Project Ma .ager). i Begin close-out process. Have contract specialists notify the contractor by , letter, initiate audit, etc.
< 1 F-4-1 i
l l
APPENDIX F-5 THE PROJECT MANAGER AND THE "CHANGES" CLAUSE 4 General Description of the "Changes" Clause It is a fundamental characteristic of contracts that the contractor can oe required to do only what it agreed to do. Thus, if a contractor agreed to construct a building in accordance with a particular set of specifications that omitted a requirement for waterproofing the foundations, there is no ; obilgation on the contractor to perform waterproofing. Moreover, in the absence of a "Changes" clause, whether the Government can get the contractor to waterproof the foundations at all depends on whether the contractor is willing to agree to perform that extra requirement. The contractor is in a position to exact a heavy price for its agreement. The "Changes" clause constitutes an agreement by the contractor, as part of the deal when the contract is made, that the Government may, without r obtaining the contractor'r consent, make certain changes in what the contractor is obligated to do provided that the Government makes an "equitable" adjustment in contract terms if the change causes an increase or decrease in the cost of or the time required for performing any part of the work under the contract. The "Changes" clause for fixed-price supply contracts and cost-reimbursement type supply contracts both authorize the Contracting Officer, by written order, to make changes in:
- 1. Drawings, design, and specifications for the manufacture of supplies specifically for the Government.
- 2. The method of shipment or packing; and
- 3. Place of delivery. ,
NRC contracts for service usually contain a "Changes" clause that authorizes the Contracting Officer to "make changes, within the general scope of this contract, in the definition of services and tasks to be performed, and the time I (i.e., hours of the day, days of the week, etc.) and place of performance thereof." i i The Project Manager's Role Regarding Changes While the Project Manager may properly direct the contractor to carry out the contract as written, he/she should take care to avoid directing any action that has the effect of changing the description or "definition" of services and tasks to be performed under a service contract, or the time or place for performing them. Such changes lie outside the Project Manager's authority for they alter the terms of the centract concerning the work to be done and may result in altering other contract terms, including completion date. ; l Contractors sometimes suggest modifications to the contract work. Like as ' net, the change will technically improve the contract services or deliverables, and the Project Manager may heartily approve of the idea. The Project F-5-1
i Appendix F-5 (Continued) Mr...ager must beware, however, of leading the contractor to believe that NRC { is authorizing the contractor to proceed. It is difficult, if not impossible, for NRC to deny th3 contractor reimbursement for costs incurred in good faith on the changed work, especially where the extra effort involved is incorporated in the contract end product and NRC gains the benefit of the change. Therefore, the Project Manager's action in such a case constitutes an improper and unauthorized obligation of public funds. Only NRC personnel who have been duly empowered to act as Contracting Officers have authority to obligate the Government to pay private parties for services or products provided to NRC. Even though the power to order changes is reserved for the Contracting Officer, this does not mean that the Project Manager had no concern with them. The Project Manager will oft.en be in the best position, as he follows the contract work, to know when the Government's interest may be served by a change and to formulate what that change should be. The Project Manager can play a valuable role in formulating changes reviewing changes suggested by the contractors recommending change action to program personnel and assisting in estimating the financial impact and any effects on time required for performance. All the effects of a change should be explored and any additional necessary funds must be obtained before the Contracting Officer is asked to order the change. . Once the Contracting Officer has ordered the change, of course, the Project Manager should follow up to assure that the contractor is implementing the i change order. F-5-2
APPENDIX F-6 l CHANGES CLAUSE-COST-REIMBURSEMENT CONTRACTS (APR 1984) (a) The Contracting Officer may at any time, by written order, and without notice to the suretles, if any, make changes within the general scope of this contract in any one or more of the following: (1) Drawings, designs, or speelfications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications. (2) Method of shipment or packing. (3) Place of delivery. (b) If any such change causes an increase or decrease in the estimated cost or, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, or otherwise affects any other terms and conditions of this contract, the Contracting Officer shall make an equitable adjustment in the (1) estimated cost, delivery or completion schedule, or boths (2) amour.t of any fixed feel and (3) other affected terms and shall modify the contract accordingly. (c) The Contractor must submit any "proposal for adjustinent" (hereaf'ter referred to as proposal) under this clause within 30 days from the date of ( receipt of the written order. However, if the Contracting Officer decides that the facts justify it, the Contracting Officer may receive and act upon a proposal submitted before final payment of the contract. (d) Failure to agree to any adjustment shall be a dispute under the Disputes clause. However, nothing in this clause shall excuse the Contractor from proceeding with the contract as changed. (e) Notwithstanding the terms and conditions of paragraphs (a) and (b) above, the estimated cost of this contract and, if this contract is incrementally funded, the funds allotted for the performance of this contract, shall not be increased or considered to be increased except by specific written modification of the contract indicating the new contract estimated cost and, if tnis contract is incrementally funded, the new amount allotted to the contract. Until this modification is made, the Contractor shall not be obligated to continue performance or incur costs beyond the point established in the Limitation of Cost or Limitation of Funds clause of this contract. F-6-1
APPENDIX F-7 TERMIN ATION (COST-REIMBURSEMENT) (FAR 52.249-6)(MAY 1986) (a) The Government may terminate performance of work under this contract in whole or, from time to time, in part, if-(1) The Contracting Officer determines that a termination is in the Government's interest; or (2) The Contractor defaults in performing this contract and falls to cure the default within 10 days (unless extended by the Contracting Officer) after receiving a notice speelfying the default. "Default" includes failure to make progress in the work so as to endanger performance. (b) The Contracting Officer shall terminate by delivering to the Contractor a Notice of Termination specifying whether termination is for default of the Contractor or for convenience of the Government, the extent of termination, and the effective date. If, after termination for default, it is determined that the Contractor was not in default or that the Contractor's failure to perform or to make progress in performance is due to causes beyond l the control and without the fault or negligence of the Contractor as set forth in the Excusable Delays clause, the rights and obligations of the parties will be ! the same as if the termhation was for the convenience of the Government. (c) After receipt of a Notice of Termination, and except as directed by the Contracting Officer, the Contractor shall immediately proceed with the i following obligations, regardless of any delay in determining or adjusting any amounts due under this clause ! (1) Stop work as rpecified in the notice. (2) Place no further subcontracts or orders (referred to as subcontracts in this clause), except as necessary to complete the continued portion of the contract. (3) Terminate all subcontracts to the extent they relate to the work terminated. (4) Assign to the Government, as directed by the Contracting Officer, all right, title, and interest of the Contractor under the subcontracts terminated, in which case the Government shall have the right to settle or pay any termination settlement proposal arising out of those terminations. l (5) With approval or ratification to the extent required by the Contracting : Officer, settle all outstanding liabilities and termination settlement proposals ! arising from the termination of subcontracts, the cost of which would be ! reimbursable in whole or in part, under this contracts approval or ratification l will be final for purposes of this clause. 1 I I 1 l F-7-1 i
Appendix F-7 (Continued) (6) Transfer title (if not already transferred) and, as directed by the Contracting Officer, deliver to the Government (i) the fabricated or unfabricated parts, work in process, completed work, supplies, and other material produced or acquired for the work terminated, (11) the completed or partially completed plans, drawings, information, and other property that if the contract had been completed, would be required to be furnished to the Government, and (iii) the jigs, dies, fixtures, and other special tools and toolir.g acquired or manufactured for this contract, the cost of which the Contractor has been or will be reimbursed under this contract. (7) Complete performance of the work not terminated. (8) Takc any action that may be necessary, or that the Contracting-Offich may direct, fo- the protection and preservation of the property related to this contract that is in the possession of the Contractor and in which the Government has or may acquire an interest. l (9) Use its best efforts to sell, as directed or authorized by the Contracting Officer, any property of the types referred to in subparagraph (6) , above; provided, however, that the Contractor (i) is not required to extend credit to any purchaser and (11) may acquire the property under the conditions prescribed by, and at prices approved by, the Contracting Officer. The proceeds of any transfer or disposition will be applied to reduce any payments to be made by the Government under this contract, credited to the price or cost of the work, or paid in any other manner directed by the Contracting . O fficer. ! (d) After expiration of the plant clearance period as defined in Subpart 45.6 of the Federal Acquisition Regulation, the Contractor may submit to the Contracting Officer a list, certified as to quantity and quality, of termination , inventory not previously disposed of, excluding items authorized for disposition ' by the Contracting Officer. The Contractor may request the Government to remove those items or entee into an agreement for their storage. Within 15 days, the Government will accept the items and remove them or enter into a storage agreement. The Contracting Officer may verify the list upon removal cf the items, or if stored, within 45 days from submission of the list, and shall correct the list, as necessary, before final settlement. (e) After termination, the Contractor shall submit a final termination l settlement proposal to the Contracting Officer in the form and with the l' certification prescribed by the Contracting Officer. The Contractor shall submit the proposal promptly, but no later than 1 year from the effective date ' of termination, unless extended in writing by the Contracting Officer upon written request of the Contractor within this 1-year period. However, if the Contracting Officer determines that the facts justify it, a termination settlement proposal may be received and acted on after 1 year or any extension. If the Contractor falls to submit the proposal within the time allowed, the Contracting Officer may deter'nine, on the basis of information , available, the amount, if any, due the Contractor because of the termination and shall pay the amount determined. 1
- F-7-2
- i
Appendix F-7 (Continued) { l I (f) Subject to paragraph (e) above, the Contractor and the Contracting ' Officer may agree upon the whole or any part of the amount to be paid (including an allowance for fee) because of the termination. The contract shall be amended and the Contractor paid the agreed amount. (g) If the Contractor and the Contracting Officer fall to agree in whole or in part on the amount of costs and/or fee to be paid because of the termination of work, the Contracting Officer shall determine, on the basis of information available, the amount, if any, due the Contractor, and shall pay that amount, which shall include the following (1) All costs reimbursable under this contract, not previously paid, for the performance of this contract before the effective date of the terminatien, and those costs that may continue for a reasonable time with the approval a or as directed by the Contracting Officer; however, the Contractor shall J scentinue these costs as rapidly as practicable. (2) The cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the contract if not included in subparagraph (1) above. (3) The reasonable costs of settlement of the work termination, including-(i) Accounting, legal, clerical, and other expenses reasonably necessary for the preparation of termination settlement proposals and supporting datas (ii) The termination and settlement of subcontracts (excluding the amounts of such settlements); and (111) Storage, transportation, and other costs incurred, reasonably necessary for the preservation, protection, or disposition of the termination inventory. If the termination is for default, no amounts for the preparation of the Contractor's termination settlement proposal may be included. (4) A portion of the fee payable under the contract, determined as follows: (1) If the contract is terminated for the convenience of the Government, the settlement shall include a percentage of the fee equal to the percer.tage of completion of work contemplated under the contract, but excluding subcontract effort included in subcontractors' termination proposals, less previous payments for fee. (ii) If the contract is terminated for default, the total fee payable shall be such proportionate part of the fee as the total number of articles (or amount of services) delivered to and accepted by the Government is to the total number of articles (or amount of services) of a like kind required by the contract. F-7-3 i
Appendix F-7 (Continued) (5) If the settlement includes only fee, it will be determined under subparagraph (g)(4) above. (h) The cost principles and procedures in Part 31 of the Federal Acquisition Regulation, in effect on the date of this contract, shall govern all costs claimed, agreed to, or determined under this clause. (1) The Contractor shall have the right of appeal, under the Disputes clause, paragraph from(e)any ordetermination made by (the (g) above or paragraph k) Contracting below, except Officer that under if the Contractor failed to submit the termination settlement proposal within the time provided in paragraph (e) and failed to request a time extension, there is no right of appeal. If the Contracting Officer has made a determination of the amount due under paragraph (e), (g) or (k), the Government shall pay the Contractor (1) the amount determined by the Contracting Officer if there is no right of appeal or if no timely appeal has been taken, or (2) the smount finally determined on an appeal. (j) In arriving at the amount due the Contractor under this clause, there shall be deducted-(1) All unllquidated advance or other payments to the Contractor, under the terminated portion of this contracts (2) Any claim which the Government has against the Contractor under ' i this contract; and (3) The agreed price for, or the proceeds of sale of materials, supplies, or other things acquired by the Contractor or sold under this clause and not recovered by or credited to the Government. (k) The Contractor and Contracting Officer must agree to any equitable adjustment in fee for the continued portion of the contract when there is a partial termination. The Contracting Officer shall amend the contract to reflect the agreement. (1) (1) The Government may, under the terms and conditions it prescelbes, make partial payments and payments against costs incurred by the Contractor for the terminated portion of the contract, if the Contracting Officer believes the total of these payments will not exceed the amount to which the Contractor will be entitled. , (2) If the total payments exceed the amount finally determined to be due, the Contractor shall repay the excess to the Government upon demand, together with interest computed at the vate established by the Secretary of the Treasury under 50 U.S.C. App.121b(b)(2). Interest shall be computed for ; the period from the date the excess payment is received by the Contractor to i the date the excess is repaid. Interest shall not be charged on any excess 1 l payment due to a reduction in the Contractor's termination settlement proposal because of retention or other disposition of termination inventory l F-7-4 l 1
Appendix F-7 (Continued)
.. until 10 days after the date of the retention or disposition, or a later date determined by the Contracting Officer because of the circumstances.
(m)The provisions of this clause relating to fee are inapplicable if this : contract does not include a fee. 5 i i L ) [ 5 t i J l l l l l 1 l 1 i } i l F-7-5
)
i
APPENDIX F-8 HANDLING COST OVERRUNS ( A cost overrun occurs when a contractor exceeds the negotiated estimated ! cost of a cost-reimbursement type contract. Cost overruns are applicable only on cost-reimbursement type contracts. The contractor is legally responsible for any costs incurred that exceed the total or ceiling prices of fixed-price type contracts. Under cost-reimbursement type cor. tracts, a contractor may not be reimbursed for cost:, incurred in excess of the total negotiated estimated cost set forth in the contract schedule. < Accordingly, if the contractor has incurred costs up to the expressed limittstion of cost, there is no obligation to continue performance unless cost limitation is increased by written notification from the Contracting Officer. To avoid delay of wo-k under contract if, and while, additional funds are t'elng obtained, the standard Limitation of Cost clause contained in all cost-reimbursemcnt type research and development contracts obligates the contractor to notify the Contracting Officer when expected costs over the next 60 days (or whatever number of days is specified in the 1ontract) will increase total incurred costs above 75 percent (or whatever percentage is specified in the contract) of the total negotiated estimated cost of the contract. The contractor also must gF .iotice whenever it appears that the total cost will be higher or significantly lower than the negotiated estimated cost for performing the contract. The Project Manager should not depend solely on these notification ( requiremente to maintain surveillance over cost expenditures as they relate to the technical progress of the work. All too frequently, such notices are not timely enough to permit the Project Managers to initiate appropriate remedial action. Therefore, it is important to scrutinize thoroughly every report the contractor submits for any indication of an impending overrun. Moreover, the Project Manager should use visits to the contractor'11 facility as opportunities to detect technical problems, to become aware of the assignment of labor to the contract, or to observe any other indication of what may result in a potential cost overrun. Any such situations should be brought immediately to the attention of the Contracting Officer. l When faced with a cost overrun, the Project Manager must take appropriate ! action in consultation with the Contracting Officer. Depending on the ! circumstances, any one of the following three courses of actlen may be recommended by the Project Manager and initiated by the Contracting Officers Terminate the contract for convenience of the Government before t.he overrun occurs.
- Modify the contract to decrease the technical effort in order to eliminate the need for additional funding.
- Increase contract funding to permit completion of the work. It is determined that the work should be complet6d and if additional funds are available, the Project Manager preparas the required supporting
( documentation and forwards it through channels to the contracts office. ! F-8-1
APPENDIX F-9 A. LIMITATIO) ~ OF COST (FAR 52.232-20)(APR 1984) (a) The parties estimate that performance of this contract, exclusive of any fee, will not cost the Government more than (1) the estimated cost specified in the Schedule or, (2) if this is a cost-sharing contract, the Government's share of the ertl mated cost specified in the Schedule. The , Contractor agrees to use !!s best efforts to perform the work specified in the Schedule and all ob!!gations under this contract within the estimated cost, i which, if this is a cost sharing contract, includes both the Government's and the Contractor's share of the cost. t (b) The Contractor shall notify the Contracting Officer in writing whenever it has reason to believe that- , 1 (1) The costs the contractor expects to incur under this contract in the 1 next 60 days, when added to all costs previously incurred, will exceed 75 ; percent of the estimated cost specified in the Schedules or ; (2) The total cost for the performanca of this contract, exclusive of any , , fee, will be either greater or substantially less than had been previously estimated. , i (c) As part of the notification, the Contractor shall provide the i Contracting Officer a revised estimate of the total cost of performing this contract. i (d) Except as required by other provisions of this contract, specifically i citing and stated to be an exceptions to this clause-- l (1) The Government is not obligated to reimburse the Contractor for costs i incurred in excess of (1) the estimated cost specified in the Schedule or, (11) if < a this is a cost-sharing contract, the estimated cost to the Government specified i in the Schedule and (2) The Contractor is not obligated to continue performance under this ! contract (including actions under the Termination clause of this contract) or otherwise incur costs in excess of the estimated cost specified in the Schedule, ! until the Contracting Officer (1) notifies the Contractor in writing that the 4 estimated cost has been increased and (11) provides a revised estimated total ! j cost of performing this contract. If this is a cost-sharing contract, the J J increase shall be allocated in accordance with the formula specified in the l Schedule. l l l (e) No notice, communleation, or representation in any form other than that specified in subparagraph (d)(2) above, or from any person other than the Contracting Officer, shall affect this contract's estimated cost to the Government. In the absence of the specified notice, the Government is not
- obligated to reimburse the Contractor for any costs in excess of the estimated I cost or, if this is a cost-sharing contract, for any costs in excess of the
? f estimated cost to the Government specified in the Schedule, whether those j excess costs were incurred during the course of the contract or as a result of . j termination.
- j F-9-1 i
--- ---- - - - -- - - - . - _ - - _ - - - l
Appendix F-9 (Continued) (f) If the estiraated cost specified in the Schedule is increased, any costs the Contractor incurs before the increase that are in excess of the previously estimated cost shall be allowable to the same extent as if incurred afterward, unless the Contracting Officer issues a termination or other notice directing that the increase is solely to cover termination or other specified expenses. (g) Change orders shall not be considered an authorization to exceed the estimated cost to the Government specified in the Schedule, unless they contain a statement increasing the estimated cost. (h) If this contract is terminated or the estimated cost is not increased, the Government and the Contractor shall negotiate an equitable distribution of all property produced or purchased imder the contract, based upon the share of costs incurred by each. l l l i l l [ F-9-2
APPENDIX F-9 (Continued) B. LIMITATION OF FUNDS (FAR 52.232-22) (APR 1984) (a) The parties estimate that performance of this contract will not cost the Government more than (1) the estimated cost specified in the Schedule or, (2) if this is a cost-sharing contract, the Government's share of the estimated cost specified in the Schedule. The Contractor agrees to use its best efforts to perform the work specified in the Schedule and all obligations under this contract within the estimated cost, which, if this is a cost-sharing contract, includes both the Government's and the Contractor's share of the cost.
/.s, 'he Schedule spulfles the amount presently available for payment by the Government and allotted to this contract, the items covered, the Covernment's share of the cost if this is a cost-sharing contract, and the period of performance it is estimated the allotted amount will cover. The parties contemplate that the Government will allot additional funds incrementally to the contract up to the full estimated cost to the Government specified in the Schedule, exclusive of any fee. The Contractor agrees to perform, or have performed, work on the contract up to the point at which the total amount paid and payable by the Government under the contract approximates 5ut does not exceed the total amount actually allotted by the Government to the coritract.
(c) The Contractor shall notify the Contracting Officer in writing whenever it has reason to believe that the costs it expects to incur under this j contract in the next 60 days, when added to all costs previously incurred, will
; exceed 75 percent of (1) the total amount so fer allotted to the contract by ,
the Government or, (2) if this is a cost-sharing contract, the amount then allotted to the contract by the Government plus the Contractor's corresponding share. The notice shall state the estimated amount of additional funds required to continue performance for the period specified in the Schedule. (d) Sixty days before the end of the period specified in the Schedule, the i Contractor shall notify the Contracting Officer in writing of the estimated , amount of additional funds, if any, required to continue timely performance , under the contract or for any furthea period specified in the Schedule or otherwise agreed upon, and when the funds will be required. (e) If, after notification, additional funds are not allotted by the end of the period specified in the Schedule or another agreed-upon-date, upon the Contractor's written request the Contracting Officer will terminate this contract on that date in accordance with the provisions of the Termination clause of this contract. If the Contractor estimates that the funds available will allow it to continue to discharge its obligations beyond that date, it may specify a later date in its request, and the Contracting Officer may terminate this contract on that later date. f l 1 F-9-3 !
Appendix F-9 (Continued) , (f) Except as required by other provisions of this contract, specifically citing and stated to be an exception to this clause-- (1) The Government is not obligated to reimburse the Contractor for costs incurred in excess of the total amount allotted by the Government to this contract; and ' (2) The Contractor is not obligated to continue performance under this contract (including actions under the Termination clause of this contract) or otherwise incur costs in excess of (i) the amount then allotted to the contract by the Government or, (ii) if this is a cost-sharing contract, the amount then allotted by the Government to the contract plus the Contractor's ! corresponding share, until the Contracting Officer notifies the Contracter in l writing that the amount allotted by the Government has been increased and l' speelfles an increased amount, which shall then constitute the total amount allotted by the Government to this contract. (g) The estimated cost shall be increased to the extent that (1) the amount allotted by the Government or, (2) if this is a cost-sharing contract, ! the amount then allotted by the Government to the contract plus the Contractor's corresponding share, exceeds the estimated cost specified in the Schedule. If this is a cost-sharing contract, the increase shall be allocated in accordance with the formula specified in the Schedule. ; (h) No notice, communication, or representation in any form other than , that specified in subparagraph (f)(2) above, or from any person other than the 1 Contracting Officer, shall affect thc amount allotted by the Government to this contract. In the absence of the specified notice, the Government is not obligated to reimburse the Contractor for any costs in excess of the total l amount allotted by the Goverr. ment to this contract, whether incurred during l the course of the contract or as a result of termination. (1) When and to the extent that the amount allotted by the Government to the contract is increased, any costs the Contractor incurs before the increase that are in excess of (1) the amount previously allotted by the Government or, (2) if this is a cost-sharing contract, the amount previously allotted by the Government to the contract plus the Contractor's corresponding share, shall be allowable to the same extent as if incurred afterward, unless the Contracting Officer issues a termination or other notice and directs that the increase is solely to cover termination or other specified expenses. ; (j) Change orders shall not be considered an authorization to exceed the amount allotted by the Government specified in the Schedule, unless they contain a statement increasinC the amount allotted. (k) Nothing in this clause shall affect the right of the Government to , terminate this contract. If this contract is terminated, the Government and ' the Contractor shall negotiate an equitable distribution of all property i produced or purchased under the contract, based upon the share of costs incurred by each. F-9-4
I i Appendix F-9 (Continued) ( (1) If the Government does not allot sufficient funds to allow completion of the work, the Contractor is entitled to a percentage of the fee speelfled in the Schedule equaling the percentage of completion of the work contemplated by this contract. i ? f d l a 1 l i 1 l b % < 1 v-9-5 i i .. .
APPENDIX G NRC KEY PERSONNEL CLAUSE KEY PERSONNEL: (a) The following individuals are considered to be essential to the successful performance of the work hereunder.
*To be incorporated into any resultant contract (b) If one or more of the key personnel for whatever reason becomes, or is expected to become, unavailable for work under this contract for a continuous period exceeding 30 work days, or is expected to devote substantially less effort to the work than indicated in the proposal or initially anticipated, the Contractor shall immediately notify the Contracting Officer and shall, subject to the concurrence of the Contracting Officer or his authorized representative, promptly replace such personnel with personnel of at least substantially equal ability and quellfications.
(c) All requests for approval of substitutions hereunder must be in writing and provide a detailed explanation of the circ'umstances necessitating the proposed substitutions. They must contain a complete resume for the proposed substitute, and other information requested by the Contracting Officer or needed by him to approve or disapprove the proposed substitution. Tne Contracting Officer or his authorized representative will evaluate such request and promptly notify the Contractor of his approval or disapproval
' thereof in writing.
(d) If the Contracting Officer determines that suitable and timely replacement of key personnel who have been reassigned, terminated or have otherwise become unavailable for the contract work is not reasonably forthcoming or that the resultant reduction of productive effort would be so substantial as to impair the successful completion of the contract or the service order, the contract may be terminated by the Contracting Officer for default or for the c.uivenience of the Government, as appropriate, or, at the discrettor. of the Contracting Officer if he finds the Contractor at fault for the condition, the contract price or fixed fee may be equitably adjusted downward to compensate the Government for any resultant delay, loss oa da mage. ( G-1-1
APPENDIX H l' INSPECTION OF SERVICES COST-REIMBURSEMENT CLAUSE (FAR 52.246-5XAPR 1984) (a) Definition. "Services," as used in this clause, includes services performed, workmanship, and material furnished or used in performing services. (b) The Contractor shall provide and maintain an inspection system I acceptable to the Government covering the services under this contract. Complete records of all inspection work performed by the Contractor shall be maintained and made available to the Government during contract performance and for as long afterwards ad the contract requires. (c) The Government has the right to inspect and test all services called for by the contract, to the extent practicable at all places and times during the term of the contract. The Government shall perform inspections and tests in a manner thtt will not unduly delay the work. (d) If any of the services performed do not conform with contract requirements, the Government may require the Contractor to perform the services again in conformity with contract requirements, for no additional fee. When the defects in services cannot be corrected by reperformance, the Government may (1) require the Contractor to take necessary action to ensure that future performance conforms to contract requirements and (2) reduce any fee payable under the contract to reflect the reduced value of the services (- performed. (e) If the Contractor falls to promptly perform the services again or take the action necessary to ensure future performance in conformity with contract requirements, the Government may (1) by contract or otherwise, perform the services and reduce any fee payable by an amount that is equitable under the circumstances or (2) terminate the contract for default. 1 i
!!-1-1
APPENDIX I-l DOE PROGRAM REVIEWS
- 1. 2.
Project in yeS Send to Human Factors - Human Factors Program Area' ReYiew Group f10 / v
- 3. 4.
ADP Hardware, Send tc yeS ' Sof tware for ' Resource Mg t SRC Staff Use? for ADP Review : DO -
- 6. S.
Send to , yeS es Project no s entract Review s Exceed $100X < loard i ( 7. eS 11-Doe s Proj e ct PM Prepares Exceed $500X for Project Descriptive gf : One Year S t.== a ry
/
A S/ 8.
^ 9.
Does Project yeS Send to gf j Exceed $1 M Senior Contract t Lifetine? Review Board l N/ i h/ 10. N Continue l l Under Manual Chapter 110: j l u l-1-1 1
APPENDIX 1-2 ( Chooshg DOE as the Source
- 2. Is one 2. Has Past ab an "Obvious' . **\# Work leen .YeS Choi Satisfactory?
g V /
\/ N
- 3. Check Office "O 4 Potential Check Other \/
Int:::ation ( Lab Sources , Labs as Sour:es e . g . Expe rienet- Knom? i N / voc / /
+
4 l 7 y' N N '
- 6. Has at Least One Lab Been yes h 10.
/ Capability
& Availability at Identified? ab(s) Verified?
^ yes
, no y \/ 11, Are 15. S'l'Ct Alt'T*
. Che ck Institutional Bulletin g nn % native Method Plans for Each Lab 1401-1 Crite ri < f for Doing the b Met? Project
\/ \/ yes /s I
g, Has at least yes 1. Is Experienc One Lab 8een With the L.ab(s) Identified? Satisfactory? no / s/ yes l
- 9. Select Alternative 13. Prepare NRC Method for Doing Fors 36 s the Project - %
s y %, NOTE: For= 3e? j j Hust be Done
/ hfore 173 Signad 14, Continue /
Under Manual # f t Chapter 110: 1 l l-2-1 1
. _ . . _ _ . - ~ _ _ . . _ . _ _ ~ .
- - - . . - . = _ . - - .. _ _ _ _ . -_ __-
TIMIMr. TOR ORDIRING WORK IMM DOC M a I 1 3 4 17, -~ 15 88e'IS I 2 3 4 T2 13 16 17 18 e s s a 14 to DFV N M ltt DIV IIRft iAs 78 Issue Receive Accept Issues -14 days Accept Initiate Rfr/INIC days RTP/ I' MRC-189 * *IlInal 'I*
'Y5'Mkcl13 ,,,gg73 Approve from Hcgotiated 1 work 361 g a nac-36F tab flRC-In9 Initiateil e
I -! mIv. non I"III*I'.14 days- Iranwit,,yg PDS to MRn g,,,,, Receive 50RS (
*o 5 ( 11 6
- 115 Approval E $
[ SCRS kh e
,L I i .
olv m:n
- I Initiate-10 days-Receive y a g e CRs "
I e ! Approval ! FM --14 days--- BIV INtt 47 Initlate peg. Approve Tift Plan l TIII Plan FIN Plan Change Change Change l I/ This provides a realistic estimate for faltiating work with DOC: however, there are areas where timing can he re.seced. 7/ leumber of days reyfred to issue the RIP is dcF; ,+i.t upon tie approvals required. ] l 3/ All approvals must *A received prior to authertring work. l 4/ If flN Plan Change Respeests involves an office change to DIM. add 7 weeks to timing. i 1 t l
APPENDIX I-4 i
' u cso==ser
- u.a.mucLIAR maouLAfoar commission t roi .<.ne a
***"* A-2122 DOS SOURCE SELECTION JUSTIFICATION sa m. u$sevio eovaca Transient & Accident In Support of Argonne National Laboratory (ANL)
Chapter 15 Licensing Issues e smaa asso.m. m.,w Office of Nuclear Reactor Regulation. Division of Systems Integration Reactor Systems Branch 9 64=af wp4-*acd%f asAmaata _ , Da T4 hate mast secwect asA446tS J. Doe (Y-0000 200000) e sis 4 *oa satsc .c <c n w ., .e,. re . a = sei.es ANL is recognized for its expertise in nuclear reactor technology, researc'h and engineering . Iney have been inimately involved in thermal-hydraulic, heat transfer, and safety reviews since the development of the civilian nuclear technology. Not only are they highly analyt-ically competent, but they also exhibit excellent engineeri::g judgment along with highly developed managerial expertise. The cost effectiveness from ANL is beyond approach, when co= pared to most DOE laboratories for similar programs. This background and expertise makes ANL the most appropriate source for reactor transients and accident reviews, as documented in the subject FIN plan. In addition
-ANL has a large computer f acility wh.ich is re3uired for complex safety analyses:
-ANL has no conflict of interest problems; and
-ANL has expertise in areas supportive of the direct contractual activities, e.g..
(1) NSS$ Analysis. (2) Heat transf er. (3) Fluid dynacies. (4) RIS research progre=s. and (5) complex thermal-hydraulic computer programs, r a* .mn u m ., Section Leader. Branch Chief or Asmistart Director se directed by each Division e a= e.co,s - .. c % = . , , Divieion Director. NRR y ,,, f-4 1
L l APPENUlX I-4 (Continued) r I ORDERINO WORK FROM DOE LABORATORIES l i
- 1. Progras Needs
!dentified and Budgeted ,
i
- 2. Is DCE the ne s 3. Use In. House k est Source?f < -
Contract or Cther Agency N/ yes l 4 Are 5.' Citain paviews Needed. YARN' Concurrences /
; Approvals ;
\ ' ' l 3 no v <
y - _ _ .) ..,, NRA Request I for Proposal
/
- v
- 8. CCE 7 DCI Operation I Laboratory office ,
v , t
- 9. Fors 189 i Draft Proposal l (if required),,,
t i 10. Will s 14. ! Proposa! Niet .
< Foma!
l , the Need? I'" h j
\/ ;
no t l 15. 339 L
- 11. Negotiate Aceroved II* NRR I i with Lab by DOE \ use Division i 0; erst ' '
noY - .
- 10. wan Problems le Resolved? Y 16- Appropriate ;
i i Action ! (Hidely varied) i no \/ L
- 13. STOP Process ,
Co *1sewhere l c i c0NT!s"ID es sEsi PA:E l i l I-4-2 2
APPENDIX I-4 (Continued) ORDERING WOP.K FROM DOE LADORATORIES [ i
- 13. 189 Approved by DOE Operati p ,
- 17. NRA Division i
1
- 18. NRC Form 173 Prepar po i
] 19. Aes 173 23. Appropriate
- Pass All NR etiews?
$ ) Action (Widely Varied)
[ I yes A
- 20. NRC I j Form 173 signed by Div. Dir. !
in CQ role l l
/s es l
I 21. es DOE j Sign 173? f ,.
- i l
yes l l
- 22. Copies Distributed .
; sad Work Starts j i
I i k ! l I-4-3 l l ! l
APPENDIX l-5 ( ...... , , f* ,\, UNITED STATES i ; NUCLEAR REGULATORY COMMISSION 5 wAsmeeoroes, o. c, soses
- s.....
Mr. Gregory J. Ogeka Chief. Administrativs Branch Brookhaven Area Offlee U.S. Department of Energy Upton, New York 11973
Dear Mr. Ogeks:
Subject:
BNL Technical Assistance to the Division of Systems Integration, NRR, NRC - "Mark I Plsnt Unique Pool Dynamic Load Speelfleations"(FIN A3354) This letter is a request for a proposal from the Brookhaven National Laboratory to provide technical assistance to the Division of Systems ] Integration, NRC. The enclosed Statement of Work details the required work l { and should be used as the basis for preparing a proposal for submission to this I office. Standard terms and conditions for NRC work, as provided in the DOE /NRC Memorandum of Understanding of February 24, 1978 and described , in NRC Manual Chapter 1102 apply to this effort. If a portion of this work is i to be subcontracted, approval of the subcontractor is required in writing by me prior to initiation of any subeontracted effort. The proposal should contain as a minimum the information set forth in the enclosed Proposal Content and should be submitted within 60 days.l./ in three copies to: Program Assistant (Name) 2/ ! Division of t Offlee of Nuclear Reactor Regulation I , U.S. Nuclear Reactor Regulation Washington, D.C. 20555 A copy of the proposal should be submitted to B.L. Grenier, NRR under j separate cover. l l Work under this program is not anticipated to be classified, but will involve the use of proprietary information tl)at should be handled in accordance with a the Rules of Practice 10 CFR 2.7902/ J j This request for proposal is not an authorization to start work. Authorization j to commenee work becomes effective upon Brookhaven Operations Offlee l i acceptance of an appropriately executed NRC Form 173, Standard Order for ) DOS wow.
\
1-5-1 l
Appendix I-5 (Continued) t Mr. Gregory J. Ogeka If you have any questions about this request, please contact Program Assistant ! (Name)l/ on FTS . Thank you for your assistance. l Sincerely, ! i I
, Director j pivisaon or ;
Office of Nuclear Reactor Regulation l Enclosures
- 1. Statement of Work f
- 2. Proposal Content
{ r cc Robert W. Barber i R.H. Bauer ! A. Romano }' H.C. Grahn : i i I Il 30 days may be used when short turn-around is required. ! 1/ In D L, the proposal should be submitted to the Chief, Technical ) { .i Assistance Program Management Group. ; 1 1/ Insert this paragraph if propdetary information will be used in performing I the work. 1 I 1 t ) *I , i l l i l I ) i ) I-5-2
l APPENDIX I-5 (Continued) k PROPOSAL CONTENT 1 The followlag items are required to prepare DOE proposals (NRC Form 189): Project Title - The title should be a unique identifier of the project reflecting a raneral idea of the encompassed work. In most cases, the title on the NRC l Statement of Work (SOW) should be uaed, Date of Proposal- Self-explanator ;; include revision number when applicable. NRC Offlee -Indleate the NRC Office (s) supporting or requesting the work. FIN Number and B&R Number -Indleate NRC's FIN number and B&R Number, as provided on the Statement of Work. DOE Contractor - Performing organization'; name. l Site -Indicate location (s) of organization that will perform the work.
- Contractor Account and DOE B&R Number - Provide the information for the j highest level feasible.
Cornizant Personnel- NRC project manager and other NRC technical staff,if applicable; DOE project manager; and, the performing organization's key I I personnel project manager and principal investigator (s); and, FTS phone numbers for each; include resumes for contractor personnel. Period of Performance - Provide proposed date of commencement of work and best-estimated completion dtte of the project. j l Staff-Years of Effort ved Costs - Estimate costs to be incurred by DOE l contractors and subcontractors. For consultants, provide the cost of the servlees on a per staff-year of techalcal support basis. '!hls shall include direct salary, Indirect expenses and other reimbursable amounts; the cost shall also be stated on a per-day basis.
. List by flacal year from start to completion of the project (FIN). Cost estimate will be consistent with DOE Manual 2200, the Priciv Manual, and shown in thousands of dollars.
1 - Staff-years of Effort (Laboratory personnel only); Direct Scientific / Technical Other Direct (Graded) ) - Cost: Direct Salaries (FTE's) - Indirect Labor Costs J Material and Servlees (Excl. ADP))) Other (speelfy)
- ADP Support -
General and Admin. Expense (,,5 ) ( - Subcontracts - Total Operating Cost ; 1/ See Item 3.c. under Project Description. 1 1-5-3 l ; J
l APPENDIX I-5 (Continued) Travel Expense - Capital Equip. (FIN charged_( ) e Domestic - Total Project Cost e Foreign Monthly Forecast Expense - Provide the planned monthly rate of costs for first year. If not known at time of proposal submittal, this may be provided in the first monthly business letter report once the project is authorized. At the , beginning of each subsequent year, include the planned monthly rate of costs for the ensuing year in the first monthly business letter report. . Forecast Milestone Chart - Complete as shown on NRC Form 189. Approval Authority - Proposal must be signed by an appropriate laboratory or i field activity representative. Note: This individual may or may not be the same person who signs the transmittal letter. l 1 ! Project Description - Provide narrative deseciptions of the following toples in the order listed on plain paper attached to the NRC Form 189. If an item is ' not applicable, so, note it on the NRC Form 189. Objective of Proposed Work
, s. Background - Provide a brief summary of the technical problem, issue, or ! need so as to orient the reader to the requirements for the work or end l l project. :
i l b. Objective - State concisely the performing organization's understanding of the objective (s), i.e., what will be the end result (s). 4 Summary of Prior Efforts - Not applicable for NRR projects,
- a. Work Requirements - Describe the tasks and subtasks to be performed in such a manner that a disinterested third party can understand what is to l
] be done and how it will be accomplished for the level of effort and period ! 3 of performance proposed. Describe any assumptions being made pertinent [ l to performing the work. Provide criteria or other bases upon which ' l evaluations, judgment or other action will be taken. Describe potential 1 l problems and recommend solutions. Stete and describe separately any ; options being proposed that require NRC approval before proceeding. ,
- b. Meetings and Travel - State the number of trips that the performing '
organization will require to perform the work and identify where and how i many people are expected to travel. If no travel is expected or required, , i state none. Describe any foreign travel requirements; approval must be ; obtained by processing an NRC Form 445. , j c. NRC Furnished Material - Specify any equipment (including ADP), i background exports or data, or other specific materials required to be j prov!ded by NRC, or equipment to be purchased. a ] Description of Any Follow-On Efforts - Net applicable for NRR projects. 1 l l-5-4 j
APPENDIX l-5 (Continued) , i Relationship to Other Projects - Identify related projects that either (1) generate information that will be needed to accomplish the work proposed under this project or (2) will use information generated by this project, and (3) support a common objective. If none, so state on the NRC Form 189. Reporting Requirements - State the number, type, and other content of the ' reports requested or proposed to be provided, to whom and when they are to be , submitted, and, if requested by NRC, whether drafts will be provided prior to finalization. Subcontractor Information - Identify the subcontractor or consultant and describe any effort that will be performed by a subcontractor or consultant, ' and reference the task or subtask described under the work requirements that the subcontractor or consultant effort will support. Any work performed by the subcontractor on behalf of the nuclear industry that might give rise to an apparent or actual conflict of interest must be described. If the subcontractor is not known at the time the proposal is being submitted, so indicate and describe status and expected time frame for selection of the subcontractor's) or consultant (s). New Capital Equipment Required - List all capital equipment which must be l purchased by the parforming organization to perform the work described and , provide the estimated cost. j Speelal Facilities Required - Describe any new special facilities required. l Confilet of Interest Information - Describe any significant contractual and i organizatioaal relationstCps of the DOE and its contractor on this proposci
, with industries regulated by the NRC (e.g., utilities, etc.) and suppliers thereof j (e.g., archittet engineers and reactor manufacturers, etc.) that might give rise to an apparent or actual conflict of interest.
i 1 i l a l 4 n l l l-5-5 l i l i
-~ _ . - - _ . -
_ _ _ _ _ _ _ _ _ - - _ _ _ , , . _ _ - _ - - - _ _._-_--____m_-_______.-
< APPENDIX I-6 k PROPOSAL EVALUATION CHECKLIST REVIEW FOR COMPLETENESS YES NO [
- 1. Administrative Information is Correct?
- 2. Personnel Information is Correct?
- 3. Staff Effort and Cost Sections Completed? -
, 4. Task Schedules and Costs Completed?
1 5. Project Description Follows Instructions?
- 6. If Requested, Are Resumes Attached?
i
; I l REVIEW TECHNICAL SUBSTANCE YES NO
- 7. Does Proposal Expand and Clarify Work Statement?
] 8. Does the Objective Stated Meet NRC Need?
- 9. Are Methods Indicated Appropriate?
j 10. Are Subcontractors Appropriate?
- 11. Are Personnel Appropriate?
4 ( I) COST EVALUATION YES NO l l 12. Is the Level of Effort in Line with Work? ! ) 13. Are Travel Estimates Reasonable? ! 14. Is Equipment Requested Really Needed? I 15. Are Monthly Forecasts in Line With Effort by Task? ~ l ) 16. Is the Total Comparable with NRC Estimate? : I l If the answer to any question is "no", the Project Manager should contact the i Lab and take appropriate action. Your Program Assistant can often help. ) f If the proposal is incomplete, the additional Information should be obtained j prior to continuing with the next steps. If any portion of the technical substance is questionable, clarification or ] correction should be obtained before completing the cost evaluation. If costs appear out of line, the Project Manager should review this carefully. Please note, if the Lab estimate differs widely from that done within NRC, 4 the Project Manager should double check BOTH estimates before raising j questions. Not every item in this list is always needed - and sometimes j others should be considered as well. This list is intended as an example only.
; I The Project Manager should document the discussions and state the basis for j acceptance of the costs.
l I-6-1 i
APPENDIX I-7 COST REVIEW FLOW CHART CCE Operations , Cost Incurnd < Monthly Business Office ' at DCE Lab < Letter Report Prepand l Menthly Business N1 Headquarters Processes Letter Report Vou che r Received by NRA t a* 8. Vcucher Received I Per a flect v 'echnical Progress I* Payment Processed (Adjust *;ents Mry ygg/no le Made Later \/ 9. Query the Lab m MO Does Progress P! about the Match Schedule' g/ Variances .
- 3 yes/no A
- g. Can
, no *
- NRA PM and w Lab P1 Resolve
\/ Diffenaces?
A Do Cost Categories y y05 Match those on the
!!9 and 173?
I3' Can yes Lab Prepans Program Assistant Resolve
) Adjustment to Next Cycle ygg/ng j
VN V II' Note Status e e Hold Until Voucher Received I* ) 3 _ Voucher Received l s t s by PPAS and !
< < sent to PM 6
l l l-7-1 l
_. - - -~ _-__-.--- -_ _ 4 , APPENDIX l-7 (Continued) i Cost ReWW l (ccrtirued) I
- I II' Youcher Received by PPAS and sent to PM i i
17- ! Is. yes .e re Prost e . .Y'S we e Proste=s ! s esotvec Noted israer: : l v i V 20. 15. I j yet n NRA PM and Vouche r y,g s j Lab P! Resolve Matches Monthly \ - t Differences? neport? l 4 l ; 1 i' j y 21. , 28. ., Y#8 Can pg App ,y,, f Program Assistant Resolve
) ) Payment and Notifies PPA 5 1
l l
/ l
, st '
l 22 ) N/ PM Notifies PPAS Processes a ppa 3 of Youcher to RM ; Exception /\ for Pa>sent ; J l
- 23. js
,y can PPAS o i
> AM Resolve?
;7, ,
i Adjustments in I no Later Cycle '
! sr
/4 1 24 Resolution Reached ygg j V at Higher Level 26 Ate l (M Adjustments '
Needed? l 25. PM h h nts j
) Probles and )
t Resolution I-7-2 l
APPENDIX l-8
- t. CONFLICT OF INTEREST CONSIDERATIONS IN PLACING WORK WITH DOE
/..aas%*** UNITED STAf ts i y- ,~- p/;g ,iI NUCLE AR REGULATORY COMMISSION wasmNotoN o c.2csts
,\. '.,,,.-
h, Yj' December 31, 1981 MiCRMDUM FOR: Directors of Offices FRC!i: Thomas F. Engelhardt Deputy Executive Legal Director
$UBJECT: CONFLICT OF INTEREST CONSIDERATIONS IN PLACING KORK WITH THE DEPARTMENT OF ENERGY The Office of the Exective Legal Director has received numerous queries lately regarding conflict of interest considerations when use of DOE labora- .
tories to perfom work for NRC is being censidered. Since our specific conflict of inte wst rules for cerraercial contracts do not apply to the DOE laboratories, this remorandum will attempt to provide you some guidance in the ma tte r. The overall problem which eay present a conflict of interest situatio8 stee.s in the main from the different statutory responsibilities of the two agencies; i.e., the promotional and developmental responsibilities of DOE as contrasted with the independent regulatory responsibilities of MRC. From this, two potential probisms arise when MRC desires DOE support. First, will the support include a bias which could compromise the NRC's respor.stbility and secondly, will the support be sufficiently credible in the perception of others to serve the NRC purpose? For example, would the progracoatic goals of DOE'be so influentia) as to , significantly distort the results of the laboratory support? In the case ' of credibility, would the association of the laboratory be so closely identified with DOE prograssmatic goals that the support would be r,uspect in the view of others to a degree that it would be essentially useless? NRC Manual Chapter 1102 together with.its exhibits contains requirements and procedures to be used in avoiding a conflict of interest situation when NRC places tasks with DOE laboratories. These call for the ' integrated l J/ The term ' conflict of intertst* is used with a broad connotation rather than in the strict legal sense of a violation of a particular ! , statute or regulation, since none apply to arrangements between NRC r ( and DOE and its integrated operating contractor. I
- i. 1-8-1 l
I f.PPENDIX l-8 (Continued) operating contractor * (i.e. the laboratory manager) and the DOE Operations Office to judge potential NRC tasking versus other 00E interests and apply DOE's rules. They then notify NRC of any and all facts which could possibly
, be viewed at producing a conflict of interest from our point of view. Only when both agencies are satisfied, can work comence. (There are also follow-on regurirTments before other, possibly conflicting, work can be accepted by the lab as well.)
The requirements of NRC Manual Chapter 1102 apply only after the initial decision that the support be tasked to 00E. Therefore in order to minimize potential conflict situations at that stage of the process, it appears ap-priate to provide guidelines which could be employed prior to a decision 1 to request support services from 00E. In making' an initial judgment as to whether a 00! laboratory should be
' selected for a particular task, the following matters should be considered: ;
- 1. What is the DOE overall interest in the subject matter?
- 2. If an overall interest is identified, which of DOE's laboratories has the lead, programatic responsibility? ,
- 3. Which DOE laboratory is giving major support to the lead laboratory?
- 4. Which DOE laboratory has the necessary expertise, but only a generic interest in the DOE program?
- 5. Can the scope of NRC requirements be tailored so as to mitigate r DOE program involvement or the use of laboratory personnel !
assigned to the specific 00E program?
, 6. !s the required support essentially non directional or non-con-clusive (e.g. fact finding, research without present application)?
- 7. Can the product be independently evaluated or dupitcated by NRC or others?
- 8. Is a significant amount of subcontracting required to obtain the j product? :
l The following are hypothetical examples of situations where the foregoing matters would be appropriate to consider in making an initial determination < to request support from DOE Laboratories: l'
- 1. Review of the Clinch River Project Environmental Statenent, i I
c n ak Ridge National Laboratory (0RNL) and Argonne National Laboratory
( A' . have been the lead DOE organizations for the project. The los Alamos Mastonal Laboratory (LANL), while knowledgeable in breeder technology, t has only been indirectly involved in the project (e.g. provided input on i instrumentation). LANL has excellent credentials in preparing and reviewing i environmental statements and within the organization structure, has a unit i dedicated to such activity. Thus, while it would not be advisable to requect : j support from ORNL or ANL, LANL probably would be initially acceptable. 4 I d i j i l I-8-2 ,
- , . . . . , , - - _ - - - - - - - - - - - , - . , - . - - - - - , - -. _ - - . - - . .- - - . , . , . n.-.- ,
APPENDIX 1-8 (Continued) ( l
- 2. Rtview of a license amendant to the Fort St. Vrain ' Gas Cooled Reactor.
ORNL has been a major proponent of gas cooled reactor technology. Dupont Chemical Co., which operates the laboratory at Savannah River, has personnel ! n ! knowledgeable in any direct 7'wa.111 types of reactor technology, but has not been involvedy Consequently, we should not request support from DOE via 0RNL, but Savannah River Laboratory (SRL) support probably would be, initially acceptable. ,
- 3. Review of a' license amendment or application for a license for away from reactor storage of spent fuel.
Pacific Northwest Laboratory (PtL) has experience in the packaging and trans-portation of spent fuel but does not have architectural or construction cap- , ability. PNL proposes to subcontract review of the design and construction of 4 the proposed storage facility to the XYZ Corp. XYZ has also been active'in l l the design and construction of such facilities for various utilities, j NRC should not approve XYZ as a subcontractor to PNL. In this case a dual problem arises. There is a reasonable basis for potential bias and lack of credibility by the public, and inasmuch as XYZ is not a DOE / integrated contractor XYZ would be subject to the NRC statutory provision concerning conflicts of interest. ! In each of the above examples. NRC must apply judgment to the facts in the j particular situation. No specific rules can guide one to a cut-and-dried i answer; the important thing will be to critically evaluate each situation, on its own merits, as it becomes known, in order to obtain impartiality , and to the extent possible have it perceived in that light. [ t I If you have any questions regarding the application of the conflict of l interest consideration discussed above, please contact Hudson B. Ragan, ; i Acting Director, Operations and Administration Division, OELO. I would i ) also encourage you to consult with him with regard to any plans you nay
! have to. assign work to a DOE laboratory where there exitts or may exist a potential conflict of interest problem.
Thomas F. Engelhardt i Deputy Executive Legal Director i l 4 i 1-8-3
__ __. _ m . _ .__ .__ _ _-- __ . _ _ _ _ _ _ . _ 3 APPENDIX I-9 ( ORGANIZATIONAL CONFLICTS OF INTEREST i St*3PART 94--ORGANIZATIONAL CONFUCTS l OF INTEREST J 9.500 Seepe of ashpers This subpart prunerth respomm'butook genern! W. 1 and procedargs for idenetying, evshmaang, and resolv. ing or7--- r_' coanises of laterest 18 also prowdes saamples to assist senarneung ofRears in applying these rules and prosoderes to sadredual senareseas mene-noet 9.901 DeSaleks An "orgnaasanomal confhet M interest" ease when ; the nature of the work to be performed undar a pro- ; posed Governament oostreet may, withoet some ressris. noe os future asovrees. (a) rendt in an anfair compee. tve advantage to the costreetor or (b) unpaar the son. tracter's oWeetivity m performung the contract work. 4 13 I ! l i j i
\ l i
l i i i l i I i ; I i l I l t t 4 l I ! i 1 1 l 3 i 1-9-1 i l l
1 1 APPENDIX I-9 (Continued) l
\
9.502 FEDERAL ACQUISITION REGULAT10N (FAR) J 9302 Applicability, of interest that nught otherwise esist in the stated situa. (a) na subpart applies to contracts with citier tions. Some ulustrative examples are provided in 9.509,
)
profit or nonprofit organizations, including nonprofit Confbcu may arine in situauons not exprearla covered organizauons created largely or whouy with Govern- in this section 9.505 or in the examples in 9.309. Each ment funds. individual contracung situation should be mh on (b) De applicabuity of this subpart is not hmited to the basis of its parucular facts and the nature of the any parucular kind of acquisition. HowevEr organiza- proposed contract ne exercue of common sense, conal confhets of interest are more likely to occur in good je3gment, and sound diacretion is required in contracts involving- both the decision on whether a significant potential (1) Management support servtcas; conflict exists and, if it does, the development of an * (2) Consultant or other professional services; appropriate means for resolvtag it. The two underl>%g (3) Contractor performance of or maststance to prtaciples are-technical evaluations or (a) Preventing the existence of confbcung roles that (4) Systems engineenng and technical dirocuen might bias a contractor's judgment; and work performed by a contractor that does not have (b) Preventing unfair compeutive advantage. , overall contractual responsibDiry for development or 9.505 1 Providing syst1ms engineering and technical di-production. rection. 9.503 Waher. (a) A contractor that provides systems engineering The agency head or a designee may walve any gen- and technical direction for a system but does not have eral rule or procedure of this subpart by determining overall contractual responsibibty t'or its development, that its application in a particular situation would not its integration, assembly, and checkout, or its produc. be in the Government's interest. Any request for tion shall not (1) be awarded a contract to supply the waiver must be in wnung, shall set forth the extent of system or any of its major components or (2) be a the conflict, and requires approval by the agency head subcontractor or consultant to a suppher of the system
; or a designee. Agency heads shall not delegate waiver or any of its major components.
authenty below the level of head of a contracung (b) Systems engineering includes a combination of activity. substantially all of the follow %g scunties: determintag 9.504 Contrseting omeer responalbluties, specificauens, identifying and ruohvg interface prob-(a) Using the general rules, procedures, and examples lems, developing test requirements, evaluating test data, in this subpart, contracung omeen shall analyze and supernstag design. Technical direenon includes a planned acqutsinons in eeder to- combination of substantially aH of the following actvi-(1) Idenufy and evaluate potential organizational ties: developing work statements, determining param-conthcu of interest as early in the acquisition process eters, directing other contractors' operations, and re-as possible; and solving technical controversies. In performing thenc ac-(2) Avoid, neutralize, or mitirate significant poten. tinties, a contractor occupies a highly influential and ttal conthets before contrset awara. responsible position in deternmmg a :) stem's basic (b) Contracung omeets should obtain the advice of concepts and supervtatng their esecution by other coe-counsel and the assistance of appropriate technical spe- tractors. Derefore this contractor should not be in a etahsts in eva!uanns potennal confbets and in develop- position to make decasions favoring its own products or ing any necessary solicatauon pronmons and contract capabuities, clauses (see 9.$03), 9.505 2 Prepartas speementices or work sessesses. , (c) Nfore issuing a aohettation for a contreet that (a) (1) If a contractor prepares and furnishes com- I J may tnvolve a significant potenual conth.-t, the con. plete specifications covenng nondevelopmental tteens, tracung omcer shall recommend to the head o7 the to be used in a compeauve acquissuon, that contractor contracttog acuwty a course of acnoe for resolwng the shall not be aDowed to furnah these items, either as a ] confbet (see 9307)- pnene contractor or as a subooetractor, for a wh (d) In fulfilhas their responsibihties for identifying penod of une including at ionst, the durnoon of the and ruolwng potenti.1 confhets, contracung omcert initial produccos contract, his rule shad not apply should avoid crenung unnecessary delays, burdensome to ; information requirements, and eacaemve documentanon. (1) Contractors that furmah at Government re- : De contracung omeer's judgment need be formaDy quest spec Acetions or data regarding a peoduct
; documented only when a su5stanove issue concerntag they provide, even though the specacanoes or potential organstauonal confhet of interest taasts- data may have been paad for separately or in the 9.505 General raien. price of the product; or The geners! rules in 9.5051 through 9.505-4 pre. (ii) Situanoes in which contractors, acung as senbe hautanons on contracung as the means of avoid- industry representauves. belp Government agen-mg. neutrahung, or tmugaung orgamsanonal confbets caos prepare, refine, or coordmate specscauces,
, S.14 I l-9-2
APPENDIX l-9 (C:ntinued) PART 9-CONTRACTOR QUALIFICATIONS 9.501 1 regardL.s of Source, provided this assistance is ment concerning, its own products or activities, or superv; sed and controlled by Government repte. those of a competitor, without proper safeguards to sentatives. ensure objectivity and protect the Oosernment's inter. (2) If a single contractor drafts complete specifica. ests. In this connection, OMB Circular No. A.120, tions for nondevelopmental equipment, it should be Guidehnes for the Use of Consultmg Services, and ehminated for a resonable time from compeution for implementing agency regulations, should be consulted production based on the specifications. This should for additional guidance. be done in order to avoid a situation in which the 9,$og.4 Obtalalas acessa to proprietary lafwmation, contractor could draft specifications favonns its own (a) A contractor that gains access to proprietary in-products or capabihties. In this way the Governmet.t formation of other companies in performing advisory can be usured of getung unbiased advice as to the wrvices for the Government must agree with the other content of the specificauons and can avoid allege
- companies to (1) protect their information from unau.
tions of favontism in the award of production con
- thortred use or disclosure for as long as it remams !
tracts. ' proprietary and (2) refrain from using the information (3) In development work, it is normal to wiect for any purpose other than that for which it was fur-firms that have done the most advanced work in the nished. The contracting omeer shall obtain copies of field. These firms can be espected to design and these agreements and ensure that they are properly l develop around their own prior knowledge. Devel* executed.
) opment contracton can frequer.tly start production (b) Proprietary information is information conndered
, earher and more knowledgeably than firms that did not participate in the development, and this can so valuable by its owners that it is held secret by them l j affect the time and quahty of production, both of and their beensees. When a contractor requires such information from others to perform a Ocvernment con. which are troportant to the Government. In many tract and can use the leverage of the contract to obtain ] mstances the Government may have fmanced the deselopment. Thus, while the development contrac. it, the contractor may gain an unfair compeutive ad. tor has a compeutive advantage, it is an unavoidable vantage unless restnetions are im;osed. These restnc. one that is not conadered unfair; hence no prohibi. tions protect the information and encourage comparues ( uon should be imposed. to provide it when necessary for contract performance. (b) (1) If a contractor preparea, or assists in prepar. are m Waded to protect informadon (1) fur. nished voluntanly without hautetsons oo % .se or (2) tr's, a work statement to be used in compeutively ac. quinns a system or services-or prevides matenal lead- available to the Governmeat or contracte om other mg directly, predictably, and without delay to such a mrces whut restn-h j work statement-that contractor may not supply th: 9,506 laformation seerees. j system, major components of the system, or the wrv. When information concerning prospective contree. ices unleu- ton is necessary to identify and evaluate potennal orga-(i) It is the sole source; nizational conflicts of interest or to develop recom- , (ii) It has parucipated in the development and mended accons, contraeums omcers should first asek it 1 deangn work; or from within the Government or from other readily (iu) More than one contractor has twen involved available sources. Government sources include the files j in prepanns the work matement. and the knowledge of personnel within the contractmg .i (2) Agencies should normally prepare their own omce, other contracting omces, the cogniaant contract i work statements. When contractor assistance is nec, administration and audit acundos, and omces con. I cuary, the contractor might often be in a posidon to cerned with contract fmanetag. Non Oovernment i favor its owin products of capabihues. To overcome sources include pubhcations and cosamerctal wrvices, I i the possibihty of btu, contractors are prohabited such as credit totmg services, trade sad faaacial jour. l l from supplytag a system or eernces acqu. red on the nals, and business directonsa and regnators. { basa of work statements growing out of their serv. 9.907 Precedures- ! iees, unleu escepted in subparagraph (1) above. (a) If the contracting omeer initially decides that a (3) For the remons given in 9.$05 2(aX3), no pro- particular acqumtioa involves a signtAcsat potential or-habinons are impowd . deselopment and design sannadonal confhet of interoat, before seauang the so-J contractors. hettauon the contracung omeer shall subaut to the -l' 9.505 3 Providing techales, sation or coeselting head of the contractag actinty for approval-wrvices. (!) A wntten analysts, including a m= ended l l Contracts mvolung (a) technical esatuanons of other course of acnon for avoedtag, neutralumg, or sun-i contractors' offers or products or (b) consulung serv. gatmg the confhet, based on the general rules in l I ices (see 37 201) shall not generally be awarded to a 9.505 or on another basas not expressly stated in that contractor that would evaluate, or advue the Oosern- section: 9 15 t 1-9-3
APPENDIX l-9 (Conttued) 9.508 FEDERAL ACQUISITION REGULATION (FA_RJ , (2) A draft solicitation provision (see 9.5081): and, final terms with the successful offeror, if it is appropn-(3) If appropnate, a proposed coattract clause (see ate to do so (see 9.508.l(d) above). 9.508 2). (b) The restraint imposed by a clause shall be limited (b) The head of the contracting activity shall- to a Sted term of reasonable duration, sumeient to (1) Review the contractmg omcar's analysis and avoid the circumstance of unfair compeutive advantage recommended course of action, including the draft or Potential bias. This penod vanes. It might end, for provision and any proposed clause., eas:rple, whe the first pr.sducuon contract using the (1) Consider the benefits and detnments te, the contractor's specificauons or work statement is award. Government and prospecuve contractors; and ed, or it might estend through the enure life of a (3) Approve, modify, or reject the recommenda, system for which the contractor has performed spteres tion m wnting. engineenng and technical direction. In every case, the (c) The contracung omeer shall- restnetion shall specify terminsuon by a specific date (1) Include the apprmed provision and any sp, or upon the occurrence of an idenuflab:e event. proved clause in the solicitation; f.509 Examiples. , (2) Consider additional information provided by The examples in paragraphs (a) through (i) following prospectise contractors in response to the solicit & tion illustrate situations in which quesuons concerning orga. or dunas negotiations; and, nizational conflicts of interest may arise. They are not (3) Before awarding the contract, resohe the po- all inclusive, but are intended to help the contrac*ing tential conflict in a manner consistent with the ap. omeer apply the general rules in 9.505 to individual prosal or other direction by the head rsf the con. contract situations. , tracttng acuvity; or, (a) Company A agrees to provide systems engineer- l (4) If the prospective contractor disagrees and re, ing and technical direction for the Navy on the power-qaests higher level review, provide the decision and plant for a group of submannes O e., turbines, dnve the centractor's position to the agency head or , shafts, tropellers, ste.). Company A should not be al-designet for review and final decision, lowed to supply any powerplant components. Compa-(d) If, dunng the effectise period of any restnetion ny A csa, however, supply components of the subma-(see 9.508), a contractmg omce transfers acquisition nne unrelated to the powerplant (e s. fire control, responsibihty for the item or system involved, it shall navigstion, etc.). In this example, the system is the notify the successor contracting omce of the restnc. powerplant, not the submanne, and the ban on supply. ing components is hmited to those for the optem only, tion, sending a copy of the centract under which the restncuen was imposed. (b) Company A is the systems engineenng and tech-l 9.50g Solicitation prottslos and contract clause, nical dtrection contactor fot optem X. After some I'#I#" "' 9.508 l Solicitatlos provision. ##* E "''Y'*"***" As tndicated in the general rules in 9 505, sigruncant ptenual organtasuonal conthets of interest are normal-I * ** ly resolved by tmposieg some restraint, appropnate to the nature of the confhet, upon the contractor's ehgibil. ity for future contracts or subcontracts. Therefore, af. J fected solicitations shall contam a provtsion that- # "* #
- nd, as a result of this development, prepares spectfica.
(a) Invites offerors' attenuon to this SubFart 9 5-* uont. Company A may supply the equipment. (b) States the nature of the potenttal conflict as seen by the contracting omeer; (d) XYZ Tool Company and PQ4 Muhinery Com-y gg gg g (c) States the nature of the proposed restratnt upon under Government supernaion and coatrol to refine future contractor actmties; sad, specifications or to clanfy the requartments of a spectf. (d) Dependtag on the nature of the acquisinon, states ic acqutaation. T}.ese companies may supply the tiens. whether or not the terms of any proposed clause and (e) Before an ADP equipment acqut:4 tion is conduct-the appbcanon of this subpart to the contrut are sub- ed. Ccmpany A is awarded a contract to prepare data pct to usouanon. sptem specificauons and equipment performance cnte. 1 9.504 2 Contract elanas. na to be used as the basis for the equipmet:1 competi-(a) If, as a condiuon of awrfd. the contractor's eligi- uen. Since the specificauons are the basts for seleet.on btlity for futare pnme contrset or subcontract awards of commerctal hardware, a potennal conflict of interest will be restncted or the contractor must agree to some custs. Company A should be excluded from the irutial other restraint. the schettauon shall contata a proposed follow on ADP hardware acquanuon. clause that specifies both the nature and durauon of the (f) Compary A recetves a contract to def'tne the proposed restr:2nt. The contracting omeer shall include detuled performance charactertsnes an agency will re- l the clause tn the contract. fint negottaung the clause's quire for purchastng rocket fuela. Company A has not 9 16
)
i 1-9-4
APPENDIX l-9 (Catinued) L l FAC 84-12 J ANUARY 20,1986 ; FART e-CON TRACTOR QUAT.!FICATIONS 9.70: I developed the parucular fuels. When the def\runon 9,643 Pelley, contract is awarded, it ts clear to both parues that the he Government will recogotse the integnty and i agency will use the performance charactensues arnved validity of contractor team arrangemenu; preWed, the at to choose compeuusely a contractor to develop rir arrangements are idenufied and company relauenships produce the fuels. Company A may not be awarded are fully dtsclosed in an offer or, for arrangements this follow.on contract. entered into after submission of an offer, before the (3) Company A receives a contract to prepare a arrangement becomes effecuve. The Government will detailed plan for sciennlic and techt.ical trurung of an not normally require or encourage the dtasoivuon of j stency's personnel, It suggesu a curnculum that the contractor tesa arrangements, agency endorses and incorporates in its request for 9,604 Madoes. proposals to insutuuons to establah and conduct the Nothmg in uus subpart authonses contractor team trainmg. Computy A may not be awarded a contract arrangements in violauon of asutrust statutes or lirtute to conduct the traintag. the Government's nghts to-- -
. Oi) Company A is selected to study the use of lasers (a) R c m wontracu % SuW
- sa comrnutucauena. De agency intends to ask that
- firms doing research in the field make prorrietary in. .
g gg , , [ formation available to Company A. The contract must ,i team arrangement, the responsibility of the pnme con. require Company A to (1) enter into agreements with tractet ties Subpart 9.!); {' these firms to protut any proprietary information they preside and (2) refrain from using the information in (t! Frevide to the prime cont:4ctu data nghts suppl >ing lasers to the Government or for any purpose ovme4 or controlled by tne Government, ; i ether than that for which it was intended. (6 Puw its policies on compeuuve contracting.
- 0) An agency that regulates an industry wishes to subecmacting. sad component orsakout after ininal l
develop a system for evaluating and processing license production er at any other nme: and applicauons. Contractor X helps develop the system (e) Hold the pnme contractor fully resportsible for j and process the applicauons. Contractor X Ltould be contract performance, regardless of any team arrange. 1 prohibited from acttag as a consultant to any of the ment between the pnme contractor and its subcontrac. applicants dunns its penod of perfettnance and for a tors-l ' j I reasonable pened thereafter. i i I l 1 l i , I I
- {
,i d 1 1-9-5 l
APPENDIX J ( SECURITY AND ACQUBITION Commercial Contracting l
*w
- 1. Semitive Unclassified Information l
a
, When sensitive unclassified information will be made available to or
] generated by a contractorHFor definition of sensitive unclassified see , j "Description of Classified / Sensitive Unclassified Information," attached.) i ] A. Project Managers i e Completes RFPA NRC Form 400 appropriately. 1 l e Verifies that terms and clauses limiting the contractor's use of ! sensitive unclassified information are in the contract. l < e Verifles the contractor meets the terms of the contract during its performance. ) I i B. Contracting Offleer !, e Assures the proper terms and elauses limiting the contractor's use of sensitive unclassified information are in the contract. I e Coordinates with Division of Security (SEC) as needed. C. Security: o Serves as an advisor to Division of Contracts (DC) on security matters, and the Source Evaluation Panel '(SEP) and Project Manager when requested. D. Contractor: e Agrees to and abides by the contract. l l i J-l
Commercial Contracting (Continued) I II. Classified Information When classified information will be made available to or generated by a contractor--(For definition of classified, see "Description of Classified / ' Sensitive Unclassified Information," attached.) A. Project Managers - { l
- o Meets with office's designated Authorized Classifier in or&r to establish what is or will be classified and what classification guidance j is applicable.
l e Assists the authorized Classifier who assures the necessary classification / security speelfications are cited on NRC Form 187. e Completes the RFPA NRC Form 400 appropriately and submits NRC Forms 187 and 400 and a statement of work to the DC, who submits a ! copy to SEC. Generally, the NRC Form 187 is sent to SEC by the Project Manager (the sponsoring offlee) and SEC coordinates and forwards the Form to the DC for incorporation into the contract along , ! with any additional guidance, if necessary. 1 J e Understands the Contractor's security responsibilities. (Verification l of security con)pliance is actually done by SEC.) t e Assures that an Authorized Classifier provides a classification review i j to ensure proper classification and marking of all matter produced ; under the contract. I I B. Contracting Officer
; e Instructs potential offerors through the RFP what security limitations !
! will be required of the winning offeror based on what is stated in the i RFP and NRC Form 187. ! J l ) e Provides SEC with a copy of the final contract and any subsequent y modificatior.s involving security. l e Advises SEC when all work and services have been performed so that appropriate faellity and personnel access authorizations may be l
- terminated. l I;
i i C. Security: l t , ! e Upon receipt of the RFPA NRC Form 400 and NRC Form 187, Form i l 187 is reviewed, verified, and signed by the Director, SEC or his/her i designee and forwarded to the DC for inclusion in the sollettation as ; appropriate. l i J-2 l
l i e Upon receipt of the winning offeror's security plans and personnel i l . security packets, SEC reviews the submittals, visits the offeror's site, l l { and grants personnel clearances before notifying DC by ! l memorandum-of-approval of the selected contractor's facilities. l l (Note: When a sufficient number of security clearances have been ! i granted, SEC can give early approval for contract work to begin while the remaining clearances are being procemed.) ; l e Provides guidance and assistance to DC, SEP, Project Managers, and Authorized Classifiers during the acquisition.. : e Terminates facility and personnel access authorizations upon completion of work and servlees, obtaining a
- Certificate of Non-possession" from the contractor.
D. Contractor e The winning offeror completes and submits to the DC all security requirements (e.g. pe sonnel security forms packets, facility plans). l e By signing the contract, agrees to abide by the terms of the contract. , 1 e Cooperates in the termination and certifloation of non-possession L process. ; 1 l I l J-3
a DOE Lab Work Orders {
!. Sensitive Unclassified Information When sensitive unclassified information will be made available to or generated by a contractor--(For a definition of sensitive unclassified infor-mation, see "Description of Classified /Ansitive Unclassified Information,"
attached). A. Project Managers f e Completes Form 173, as apprcpriate, along with the statement of work. l e Forwards the NRC Form 173 and statement of work to SEC. ] a B. Security: i e l e Reviews NRC Form 173 and statement of work and returns the documents to the Project Manager with approval or recommendations. C. DOE Operations Offices e DOE assures the contractor (e.g. Lab) compliance with security regulations relative to sensitive unclassified information. I r I i ! I i i !' i i 1 ,
)
i i
$ 1 1
1 i J-4 I l
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, , , _ , _ , _, _ , , , , _ , _ _ , _ _ _ ,,I
DOE Lab Work Orders (Continued) ( II. Classified Information When classified information will be made available to or be generated by a contractor--(For definition of classified information, see "Description of Classified / Sensitive Unclassified Information," attached. A. Project Managers e Meets with office's designated Authorized Classifier in order to establish what is or will be classified and what classification guidance is applicable. e Assists the Authorized Classifier who assures the necessary classification / security speelfications are cited on NRC Form 187. e Forwards NRC Form 173, statement of work, and NRC Form 187 to SEC. e When NRC Form 173 is signed by DOE indicating acceptance of work, immediately sends a copy of the signed Form 173 and statement of work to SEC for proceming with DQE. e Notifies SEC when the DOE work order has expired or been extended. B. Security e Reviews NRC Form 173, statement of work, and NRC Form 187. Returns all materials after review and concurrence of Form 187 to the Project Manager. o After the acceptance of work by DOE, indicated by a signed NRC Form 173, SEC officially contacts DOE and establishes the classified interest with the responsible Operations Office. C. DOE Operations Offleet e Assures contractor (Lab) abides by all security regulations (clearances, storage, inspections, etc.). o Provides (through the Lab) a classification review to assure proper classification and marking of all matter produced under the work order. ( J-5
e ,..___ j l ATTACHMENT
^
l DESCRIPTION OF CLASSIFIED / SENSITIVE UNCLASSIFIED INFORMATION Classified information includes: l National Security Information, whleh is information that has been l l determined pursuant to Executive Order 12356, "National Security l 1 information," or any predecessor order, to require protection against ;
- unauthorized dipolosure and that is designated as Confidential, Secret or i j Top Secret. l l Restricted Data, whleh is all data concerning design, manufacture, or ,
, utilization of atomie weapons, the production of speelal nuelear material, l i or the use of speelal nuclear material in the production of energy, but j 5 does not include data declassified or removed from the Restricted Data , category pursuant to Section 142 of the Atomie Energy Act of 1954, as i amended. l < l
- i
} Sensitive unclassified information includes: l [ i Saferuards Information, whleh is unclassified information that specifically l l identifies a licensee's or applicant's detailed security measures for the l physleal protection of speelal nuclear material; or security measures for i the physical protection and location of certain plant equipment vital to l the safety of production or utilization feellities. Protection of this .
- information is required by Section 147 of the Atomic Energy Act of 1954, )I
! as amended. i i Official Use Only Information, whleh is unclassified information l { originated by or furnished to NRC, or originated by or furnished to an I I NRC contractor, lleensee or applicant, whleh is authorized to be withheld ! from pubtle disclosure under the provisions of the Freedom of Information and/or Privacy Acts. Proprietary Information, whleh includes trade secrets, privileged or confidential research, development, commerelal or finanelal information, ! exempt from mandatory disclosure under 10 CFR Part 2 and under 10
- CFR Part 9, and other information submitted in confidence to the NRC by i a foreign source and determined to be unclassified by the NRC.
I Naval Nuclear Propulsion Information, whleh is all information concerning t'Ke design, arrangement, development, manufacture, testing, operation, i administration, training, maintenance and repair of the propulsion plants
! of naval nuclear powered ships, including the assoelated nuclear support
] faellities. Protection of this information is required by Section 148 of the i Atomic Energy Act of 1954, as amended and the FY 1984 Department of l Defense Authorization Act.
\
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i l i I ! GUIDELINES - 1 I ) i FOR I PROJECT MANAGERS i l l
TABLE OF CONTENTS i i l
- 1. Chapter 1102 Procedures for Placement of Work with the ,
I Department of Energy; Bulletins 1102-24; . L
- 1401-1; 1401-2; 1401-3 1 !!. Chapter 5101 NRC Procurement of Goods and Services ;
1 Bulletin 5101-3 ,
- e l 111. Guidelines for Writing Effective Work Statements [
4 IV. Source Evaluation Panel Guide l
! V. Guidelines for Proposal Evaluation j SEP Report - Competitive Range Recommendation SEP Report - Final Selection Recommendation VI. How to Obtain Desirable Contractor Performance j Vll. Contractor Organizational Conflicts of Interest
. t
! l 4 1 t i l ! 1 : l I I i f ) ! I i I i l i 1 i I
- +
I l J i o_
p tac.o n.m Published in advanes of heorporegon h NRC W e! 1102
% and retah in hiewal umil superseded.
UNITED STATES NUCLEAR f4EQULATORY COMMIS$loN NRC h*ANUAL BULLETIN NO. 1102-24 CATE: February 23, 1988
SUBJECT:
Revisions to Requirements for DOE Property Acquired Under the DOE /NRC Memorandum of Understanding, February 24, 1978 I. Purpose This bulletin revises Manual Chapter 1102 to add requirements and clarify administrative procedures for property acquired under the DOE /NRC Memorandum of Understanding. Specifically, the revisions are as follows: A. Paragraph A delineates NRC policy regarding property records. B. Paragraph B requires an ant. val property report free DOE. C. Paragraph C requires that a Property Management clause (Attachment 1) be added to all new Statements of Work attached to Standard Orders for DOE Vork (S0!W). D. Paragrrph 0 expands Department of Energy laboratory project close-out requirements. This section supersedes item 17b. Part !Y, Manual Chapter 1102, and adds Project Management responsibilities. E. Delete reference to the Division of Facilities and Operations Support from Manual Chapter 1102-034.f. F. The responsibilities of ARM / FOS as defined in Paragrachs !!!. B and D herein supersede Manual Chapter 1102-038.
!!. Scoce This Bulletin applies to all Offices including Boards, Panels, and Cocnittees of the NRC. The provisions contained herein apply to the management of NRC work conducted under the 00E/NRC MOU.
!!!. PROCEDURES FOR 00E PROPERTY ACQUIRED UNDER THE FEBRUAAY 24, 1978 8 hRC/LOE MEMORANDUM OF UhDER5TANDING A. PROPERTY RECCR05 In accordance with the Federal Acquisition Regulations NRC accepts DOE's property accounting system, and its accounting threshold levels and classifications for equipment and material purchased with NRC funds under the February 24, 1978, NRC/ DOE Memorabdum of Unde'"tanding (HOU Property). Routine questions or problems regoro'ng DOE's property record maintenance are resolved between the cognizant NRC office and the DOE. Unresolved differences or suspicions of fraud or mismanagement shall be brought to the attention of the Deputy Director for Financial Managemnt and Controller,
- 5. ANNUAL PROPERTY PEPORTS .
The 00E shall submit an annual report by May 31, that identifies all MOU capital Property assigned to NRC f!NS, as of March 31, to the Property and Supply Branch (PASB) Division of Fact 11 ties and : Operations Support, Office of Administration and Resources < Management. Th: report shall be sequenced by FIN, and by NRC office when possible, containing item description or nemenclature, , i manufacturer, model number, serial number, acquisition cost, receipt ; date, and 00E or' contractor property identification number. The j P&SB shall match the current eport with reports arid close out actions to ensure that utilizatiun reviews are being cenducted. Following review, the P&58 shall distribute the reports to the appropriate program support staffs. ; C. STANDARD CRDER FOR DOE k'ORK All new Statements of Work (50W's) shall include a Property Management clause (see Attachment !) that establishes property ' utilization and reporting requirements. Some of this infortation is required by the MC 1102, Standard Terms and Conditions; however, establishing this clause will emphasize the requirennt. D. PROJECT CLOSE CUT l
- 1. Preperty Recertino and Certificatien j
Prior to closecut of a project, a recenciled report will be I developed by DOE to record available ecuipment and r.aterial purchased with NRC funds. The report should centain the MOU Prcperty description or nemenclature, ranufacturer, model number, serial nu:ter, quantity, acquisition cost or boek value, receipt date, cordition code, and CCE or contractor item identification , number. The ryort shall also identify any ongoing or contenlated
- hRC prefects on which the MOV Preperty could be used. If no MOU Property is assigred to the project, the COE shall previde a negative report. Any MOU Property requiring special handling fo-security, health, safety or other reasons shall be noted as part of the report.
This report should be submitted as soon as possible after a project completion or termination decision has been made, but not later than 60 days after the termination date. The report should be submitted to the applicable NRC office, ATTENTION: Program Support Staff. The program support staff shall provide a copy of the report to the cognizant NRC project manager. The project manager will certify the report to confirm that (1) the report is complete and accurate to the best of the NRC project manager's knowledge and records, and (2) the MOU Preparty is no longer needed for project use, and return the report to the program support staff. The program support r,taff will conduct an intra-office utilization screening review and direct and ! monitor the transfer of property required for intra-office NRC project use with the DOE. Intra-office processing, including certification by the project manager and utilization screening, shall not exceed 30 days from receipt of property report from DOE. Transfers of MOU Property acquired for internal NRC use must be coordinated through Property and Supply Branch (P&SB). Division of Facilities end Operations Support. For NOU Property not required for intra-office use, the program support staff will assign a i screening-close date (minimum 21 days) .and forward one copy of the I report to'the P&SB, Facilities and Operations Support. l
- 2. Utilization Review The Property and Supply Branch (P&SB), circulates the report to the program offices and other approp"iate offices to determine if the property is needed for other NRC projects. P&SB may determine not to circulate the close-out property report when the property is in poor condition or of low value. Instructions and forms will be provided with the report explaining how to initiate transfers if i requirements for the property are identified. Each program support 1 staff circulates the close-out property report to his or her project managers and appropriate staff for requirement review.
- 3. Transfer of Property l
Transfers of HOU Pr operty are eccomplished by the requesting office l notifying the property-holding office of the requirement prior to the expiration cf the screening-close date. ' Attachment II' is the ' Property Transfer Request Form' to be used for processing these transfers. Transfers of MOU Property acquired for internal NRC use must be coordinated through P&SB. The property-holding office is responsible for completing and forwarding the property transfer actions to the DOE as part of project close-cut, and providing copies to the requesting office and P&SB. The acquiring- property office monitors completion of the preperty transfer and is responsible for any costs associated with transfer of close-out MOU Property.
i i L F i NRC MANUAL 1102-24(Continued) l l The information contained in this bulletin will be incorp? rated into j the next revision of Manual Chapter 1102. ; l i t Ronald M. Scroggins l Controller : l t i r h f f 1 l I l l f c ) I 4 i l
Attachment I ARTICLE - PROPERTY MANAGEMENT i Reoorts: Prior to closecut of a project, a reconciled report will be developed by DOE to record available equipment and material purchased with NRC funds. The report should contain the MOU Property description or nomenclature, manufacturer, model number, serial number, quantity, acquisition cost, receipt I date, condition code, and DOE or contractor property identification number. The report shall also identify any ongoing or contemplated NRC projects on which the MOU Property could be used. If no MOU Property is assigned to the project, the DOE shall ;,rovide a negative report. Any MOU Property requiring special handling for security, health, safety or other reasons shall be noted l as part of the report. This report should be submitted af ter a project completion or termination decision has b.as eensoon made, as but pessible not later than 60 days after the termination date. The report should be submitted to the applicable NRC office, ATTENTION: Program Support Staff. Utilization: Prior to purchase of property with NRC funds, DOE shall conduct utilization reviews of DOE and other appropriate sources of unrequired, excess and surplus property. Property identified during these reviews that meet NRC project needs shall be transferred to the project in lieu of purchase. DOE shall monitor MOV Property assigned to the project on a regular basis to identify unrequired MOV Property. Unrequired MOV Property shall be reported to NRC for utilization screening using the procedures follcwed for MOU Property disposal at project closecut, i l l l
NRC Form 493 Attachment 11 'I ! l PROPERTY TRMSFER REQUEST A. Office Information i i PROPERTY FROM PROPERTY TO
- 1. Fin 1. Fin f
- 2. Contractor 2. Contractor I
- 3. Location 3. Location !
Contact Contact !
. l Telephone Telejhone (
- 4. NRC Office 4. NRC Office Contact Contact [
Telephone Telephone r
- 5. NRC Office Appreval 5. NRC Office Approval ,
f signature signature l l Title Title Date Date
- 5. Property Infonnation i
PROPERTY TO BE TRANSFERRED (Annotated Report, dated , attached) 00_E or Contractor Item # Description Quantity I i
\-
l
)
Form NRC 489 (1 76) U. S. NUCLEAR REGULATORY COMMISSION NRC MANUAL TRANSMITTAL NOTICE
'CHAPIER NRC-1102 Pff1w1RES FOR FIACEMDTf T WORK ~
WIDi 7HE EPARINENT OF ENEXTl SUPERSEDED: TRANSMITTED-Number Date Number Date TN 1100-28 Chapter hm -1102 9/24/82 Chapter NFC-1102 5/31/84 130 Bulletin Page 1102-18 1/25/83 , Appendix
- Appendix NFC-1102 5/3 1/84 REMARKS:
This issuame has been revised to:
- 1. reflect carrent practice aM clarify some issues.
- 2. recog;nize trore fbily the need ard means to protect sensitive umlassified infomation that may be designated Official Use Only.
Limited Official Use, Safeguards Infomation, or Proprietary Infomation. 3 Provide rnore ccrplete cost reporting as standard procedure and expard discussion of closecut procedure.
- 4. reorganize raterial previously published as "Exhibits" into the stardand apperdix femat.
l 5 add license. fee recovery procedures to opport the new rule, i
- 6. add procedures for handlirs unclassified infomation on NRC l cooperative pres; rams with foreign goverunents and organizations and with U. S. industry.
7 add a romat for financial infomation to be included in nonthly letter status reports to NRO by contractors (Figare 1). l 8. add a fortnat for reporting license fee recoverable costs (Figure 2). 9
.i.T U.S. NUCLEAR REGULATORY COMMISSION NRC MANUAL Volume: 1000 Finance Part : 1100 Accounting RM CHAPTER 1102 PROCEDURES FOR PLACEMENT OF WORK '
WITH THE DEPARTMENT OF ENERGY 1102-01 COVERAGE This chapter covers the interagency responsibilities, authorities, and proce-dures for placing work with the U.S. Department of Energy (DOE) and its contractors, and (a) obligating NRC funds, (b) paying for such work, and (c) preparing and issuing reports on the work. It represents the actions . necessary to implement Section III and portions of Section VII of the DOE-NRC Memorandum of Understanding, dated February 24, 1978. This chapter has been coordinated with and agreed to by both NRC and the U.S. Department of Energy. Therefore, it is a guiding document in all DOE-NRC task placements. It does not cover procedures for placement of work with other government agencies or outside contractors. 1102-02 OBJECTIVES 021 To provide a standardized procedure for requesting and authorizing work to be performed by DOE under interagency agreement. It also provides a framework for program control, administration, monitoring, and closeout of approved work. 022 To provide standard terms and conditions for work to be performed by DOE. 1102-03 RESPONSIBILITIES AND AUTHORITIES 1 031 Directors of Offices and Regional Administrators:
- a. cooperate with DOE in long-range planning so as to ensure that both agencies anticipate the magnitude of funding, allocation of re-sources, and timing of events necessary to conduct interagency activities in accordance with the DOE-NRC Interagency Agreement on Institutional Planning System, dated August 18, 1978.
- b. issue requests for work proposals to be submitted on NRC Form 189 from DOE for program support in research or technical assistance I areas. )
l l l Approved: MAY 311984 1
PROCEDURE FOR PLACEMENT OF WORK NRC-1102-031 WITH THE DEPARTMENT OF ENERGY
- c. prepare, coordinate, authorize, sign and issue NRC Fonns 173 I "Standard Order for DOE Work" (SOEW), and accompanying state ments of work. This sittEority n:ay be redelegated with writtet, notification provided to the . Director, Division of Accounting and Finance (RM/A).
- d. establish, with regard to each research or technical assistance pro-ject, overall and specific plans; monitor and assess progress; and followup to ensure that project results are properly analyzed, evalu-ated, and disseminated, and that projects are properly closed out at completion. Additionally, ensure that adequate feedback exists for the incorporation of results into the Commission's confinnatory assessment program and other regulatory activities. Keep the DOE Operations Offices and the . Nuclear Facility Safety Division (EP/NFSD) informed of appropriate activities, including prior notifi-cation of planned project reviews and visits.
- e. ensure appropriate clauses are included in the Standard Order for DOE WorX regarding the private 'use and protection of proprietary and other sensitive unclassified information.
- f. during the course of work, develop any additional unforseen listings, reports, or other information required for the completion of the directed projects or tasks.
- g. provide timely funding or guidance to permit' continuance of on- i going projects .which encompass more than one fiscal year, j I
- h. formally notify DOE Operations Offices of any on-going projects the sponsoring office intends to phase out or terminate as soon as such intent is known.
- i. review all cost data and billings certified by DOE in accordance with the scope of work and the SOEW, and approve them for pay-ment by signature on transmittal memorandum to the Division of Accounting and Finance. This responsibility may be redelegated.
J. assure that the proposed work she be in accordance with appro-priate conflict of interest policy anc' Mgulations.
- k. coordinate and obtain Division of Automated Information Services approval prior to placement of projects which primarily involve com-puter support, automatic data processing ( ADP) hardware acquisi-tion, or software development (excluding analytic code development) at DOE facilities.
- 1. approve and maintain supporting data justifying placement of work with DOE. Indicate the approved basis of the placement.
)
Approved: MAy 31 g
PROCEDURE FOR PLACEMENT OF WORK WITH THE DEPARTMENT OF ENERGY NRC-1102-032
- m. for staff offices reporting to the Executive Director for Operations (EDO) or to the Commissior., coordinate and obtain Division of Budget and Analysis certification of funding availability prior to placement of work at DOE.
- n. assure appropriate review e all documentation generated under any SOEW that is tentatively c'assified and make a final classification determination .
032 The Director, Office of Resource Management:
- a. carries out implementat!on of the NRC-DOE Memorandum of Under-standing through Management Directives, publication of Bulletins, and guidance memoranda to NRC program offices. -
- b. provides consolidated long-term planning data and annual budgetary information to meet both DOE and NRC planning requirements.
033 The Director, Division of Budget and Analysis:
- a. issues allotments and approved financial plan information to NRC program offices, the Regional offices, the Office of Administration, and the EDO and Commission staff offices,
- b. maintains official allotment records for EDO and Commission offices and certifies funding availability for these offices.
- c. provides Financial Identification Number (FIN) listing to the Division of Accounting and Finance and reviews the applicable office financial summary data.
034 The Director, Division of Accounting and Finance:
- a. records obligations against those SOEW's that have been accepted by DOE and forwarded to the Division of Accounting and Finance assuring use of proper accounting citations, FIN, and Budget and Reporting classifications (B&R). Maintains copies of accepted NRC "Standard Orders for DOE Work," as the official obligations documentation.
- b. records accrued costs as reported by DOE through receipt of a monthly report generated by the DOE Financial Information System (FIS).
- c. receives all billings from DOE for work performed for NRC; trans-mits billings to appropriate NRC program offices for review and approval signature; and upon receipt thereof, certifies them to be correct for payment through the U.S. Treasury.
- d. maintains records of outstanding DOE uncosted obligations and unpaid billings and provides reports to NRC program offices.
Approved: gg n 134
~
PROCEDURES FOR PLACEMENT OF WORK WITH THE DEPARTMENT OF ENERGY NRC-1102-035 t ,
- e. resolves day-to-day problems associated with billings through direct i contact with DOE Operations Offices (such as billings that do not reflect costs as reported through the FIS, incorrect or invalid FIN, etc.),
j
- f. transmits to the Division of Facilities and Operations Support, ADM, :
and the NRC program officee copies of all itemized receiving reportsan furnished by DOE for equipment : NRC. l 035 The Director. Division of Automated Information Services:
- a. provides early program guidance, advice, and assistance to NRC ;
program offices in obtaining computer services at DOE facilities. l Supports all NRC offices during the developmental and operational ! phases of their ADP related projects by providing coordination and l approval to all projects which primarily involve computer support l per Manual Chapter 0904 requirements. f b, obtains DOE facility approval for computer services to NRC staff. l
- c. prepares requests for work proposals and evaluates DOE proposals for computer services to the NRC staff. !
- d. ensures that hardware and software support services provided to '
NRC offices are compatible with NRC ADP systems and requirements ). to the extent possible. 036 The Director, Division of Security: j
- a. obtains facility approval for classified work from the appropriate >
DOE Operations Office security organization and notifies the NRC program office of such approval, t
- b. maintains master facility register for all NRC classified interests at DOE facihties.
- c. advises NRC program offices on the preparation and handling of !
documents containing proprietary and other sensitive unclassified j information. ; 037 The Director, Division of Technical Information and Document l CFnIrol: l r
- a. develops and issues instructions in conjunction with the NRC pro-gram offices and DOE for the preparation of reports. l
- b. prints or duplientes reports as specified by the terms and conditiont ;
of the Standard Order for DOE Work. ~ i
- c. makes physical distribution of all reports required by the SOEW the ?
are to be made publicly available. i
- d. issues NUREG-series numbers, as required, and maintains pertin-records.
Approved: MAY 31154 (
PROCEDURES FOR PLACEMENT OF NRC-1102-038 WORK WITH THE DEPARTMENT OF ENERGY 038 The Director, Division of Facilities and Operations Su? port, maintains a listing of NRC-funded DOE-owned property reporte:1 by tha JOE contractor on each ongoing project. These data will be provided on an information-only basis to the NRC program office for reconciliation with DOE reports prior to project closeout. . 1102-04 BASIC REQUIREMENTS 041 Request for Work Proposals from DOE for New or Continuing Projects. NRC offices rely primarily upon work proposals submitted by DOE in response to requests from the NRC. Such requests may be made at any time during or preceding the fiscal year. These requests may be very general in nature or quite specific, using a Statement of Work as shown in the Appendix, Part I. NRC offices may issue program assumption letters as guidance for continuing programs. These letters usually state, in very general terms, the assump-tions a contractor or facility should use as to level of effort or changes in work or schedule from prior direction used in a preceding year. DOE facil-ities and contractors will respond to such requests by forwarding proposals within the time specified in the transmittal letter through the applicable DOE Operations Office to the NRC office concerned. Infomation copies are to be sent to EP/NFSD at Headquarters, DOE. Proposals may also be provided to NRC on an unsolicited basis. A sample letter for requesting a proposal is shown in the Appendix Part I, Section 9. The approved format for proposals by DOE facilities and contractors and instructions for preparation are given in Part 11 of the Appendix. The NRC Form 189 will be used in all instances. It indicates the minimum information required by NRC. Additional information may also be requested by NRC, when needed. 042 Ordering Work to be Performed by DOE. After evaluation of an appropriate work proposal from DOE, work shall be authorized by issuance of an NRC Form 173, "Standard Order for DOE Work" (see Appendix Part III). When the work is being initiated in response to user office requirements, the user office will be consulted during the preparation of the SOEW in order to facilitate the coordination required below. A sample lettee for transmitting NRC Fom 173 is also shown in the Appendix, Part Ill. The letter should be addressed to the appropriate DOE Operations Office manager (or his designee when notified in advance) and include the three paragraphs shown. When urgently required work does not allow suf-ficient time for proposal preparation and review prior to issuance of a work authorization, the transmittal letter shall include an additional paragraph, as indicated. An information copy should be sent to EP/NFSD at DOE Headquar-ters. The transmittal letter may include additional information, but it should be noted that the transmittal letter is n,_o_t a part of the order. To ensure that projects of $100,000 or greater are properly reviewed and coordinated within NRC, each initiating office will provide copies of SOEWs and any attachments to the other program 3ffices and, as appropriate, to the Regional offices, the Offices of International Programs and State Programs, and the Office for Analysis and Evaluation of Operational Data (AE0D) Approved: MAY 31 M4
i i PROCEDURES FOR PLACEMENT OF WORK N RC-1102-043 WITH THE DEPARTMENT OF ENERGY j Administrative support projects are exempt from this requirement. It w' , remain the individual responsibility of the issuing office director to determi: ' the degree of coordination needed for projects of less than $100K. This pro-cedure will afford all offices the opportunity to comment or concur as they feel necessary on the higher value projects. This concurrence may be obtained concurrently (vice sequentially) and will be indicated within ten working days of receipt. The absence of a response will be considered a positive response. If a problem or reservation is identified, the nonconcur-ring office will provide specific rationale in writing to the issuing office with-in an additional week. The issuing office is responsible for taking whatever action is necessary to resolve the problem before the NRC Form 173 is trans- l mitted to the appropriate DOE Operations Office manager. The nonconcurring or commenting office shall work expeditinusly with the issuing office in resolv-
.ing the problem. Only after the final internal review and coordination noted above may al. NRC Fenn 173 be transmitted to DOE. Review by the Waste Management Review Group or the Human Factors Review Group will satisfy this coordination requirement. These procedures will ensure that only fully coordinated Standard Orders for DOE Work are provided to DOE. Under no circumstances will an issuing office break up a program to circumvent this required coordination. NOTE: Specific internal program coordination and l
review procedures are provided in Bulletin NRC-1401-2. For new work or major revision to the original scope of existing work, an NRC Form 367 documenting the justification for placement of work with DOE i must be prepared. l The NRC Form 173 will be filled out by the issuing office in accordance wit. the instructions in the Appendix, Part III. Part IV of the Appendix provideo Standard Terms and Conditions which normally will apply to all standard ! I orders sent to DOE. They do not have to be attached to each oFder. How-ever, any modification or deletions to the standard terms are to be noted on the NRC Form 173 and provided as an attachment. Part V of the Appendix provides the addresses of the DOE Operations Office managers. l For specific policy and procedures for obtaining DOE consultant services, see NRC Appendix 4139, Part III. Additional requirements of that chapter must also be met by issuing NRC offices. 043 issuing Authority. All NRC Forms 173 will be signed by the appro-priate issuing office director or properly identified designee. 044 Changes . Any change to an existing order (i.e. , funding amount, work period, =tatement of work, *c.) will be accomplished by the issuance of 4 a new NRC Form 173. A new Nhc Form 173 will be issued each fiscal year, as incremental funds are obligated to a project. 045 Authorizing Financial Flexibility. Reallocation of funds between FINS is not authorized unless the issuing authority so indicates on the NRC Form 173. If an issuing office authorizes the DOE performing organization to reallocate funds between FINS, the issuing authority of the office will be no' fied within five days after such an adjustment. To be recognized in the et > rent year, the adjustments must be incorporated in a Standard Order for D< Work that is signed and dated by both parties prior to October 1. This nes l Approved: MAY 3194
.~. . -
PROCEDURES FOR PLACEMENT OF WORK WITH THE DEPARTMENT OF ENERGY NRC-1102-046 NRC Form 173 will change the amounts per FIN in accordance with the per-torming organization's cost experience. Issuing offices shall not authorize funds to be transferred between FINS after the end of the fiscal year without the prior approval of the Director, Office of Resource Management, NRC. . 046 Applicability. The provisions of this chapter apply to and shall be followed by all NRC offices and regions. (DOE has also agreed to these pro-visions, as noted in paragraph 01.) 047 Appendix 1102. The Appendix of this chapter provides the proce-dures, forms , and terms and conditions for placing work with DOE. The parts of the Appendix are: Part I - Statement of Work and Sample Letter Requesting a Proposal. Part II - NRC Form 189 and Preparation Instructions. Part III - Standard Order for DOE Work (NRC Form 173), Preparation Instructions, and Sample Transmittal Letter. Part IV - Terms and Conditions of Standard Order for DOE Work. Part V - Addresses of DOE Operations / Field Office Managers. i l I I Approved: NAY 31 M
. - - . _ _ . _ - - = _ _ _ . - _ , . - . . - _ -
PROCEDURES FOR PLACEMENT OF WORK WITH THE DEPARTMENT OF ENERGY NRC Appendix 1102 APPENDIX f CONTENTS Pag Statement of Work and Sample Letter Requesting a Proposal 1 Part I. Background 1 1. Work Required 1 l 2. Reporting Requirements 1 l 3. Meetings and Travel 2 4. 2 l 5. NRC Furnished Material DOE Acquired Material 2 6. 2
- 7. Period of Performance 2
- 8. Technical Direction Sample Letter Requesting a Proposal 3 1
9. NRC Form 189 and Preparation Instructions. 5 Part II. Part III. Standard Order for DOE Work (NRC Form 173), Preparation Instructions, and Sample Transmittal Letter 13 Part IV. Terms and Conditions of Standard Order for 00E Work 19
- 1. Introduction 19
- 2. Security - Unclassified Work Efforts 19
- 3. Security - Classified Work Efforts 20
- 4. Classification 21
- 5. Unclassified Safeguards Information 22
- 6. Proprietary Information 22
- 7. Other Sensitive Information 22
- 8. Information on NRC Cooperative Programs with Foreign Governments and Organizations and with U.S. Industry 23
- 9. Conf'ict of Interest 23
- 10. Subcontracting 23
- 11. Stop-Work Order 24
- 12. Patent Rights 24
- 13. Patent Clearance 25
- 14. Limitation of Funds 25
- 15. License Fee Recovery Procedures 26
- 16. Billing Requirements 28 l
- 17. Project Closeout 28
- 18. Technical Reporting Requirements 29 j Approved: May 31, 1984
PROCEDURES FOR PLACEMENT OF WORK ! l NRC Atpendix 1102 WITH THE DEPARTMENT OF ENERGY 1 FIGURES
.P 3 lg '
/
- 1. Suggested Format for Financial Information to be Included in Monthly Letter Status Reports to NRC. 43
- 2. License Fee Recovery Cost Report, ,
44
- 3. Sample Letter on Copyright Agreement 45
- 4. Sample Cover for Unclassified Format DOE Contractor Reports. 46
- 5. Disclaimer and Availability Statements. 47
- 6. Sample Title Page for Unclassified Formal Contractor Reports. 48
- 7. NRC Form 335-Bibliographic Data Sheet. 49
- 8. Sample Cover for a Contractor Report Containing Official Use Only Information. 51
- 9. Sample Title Page for a Contractor Report Containing Official :
Use Only Information. 52
- 10. Sample Back Cover for a Contractor Report Containing Official Use Only Information. 53
- 11. Sample Cover for a Contractor Report Containing Limited !
Official Use Information. 54
- 12. Sample Title Page for a Contractor Report Containing Limited l Official Use Information. 55
- 13. Sample Back Cover for a Contractor Report Containing Limited i Official Use Information. 56 :
- 14. Sample Cover for a Contractor Report Containing Proprietary i Information Obtained from a U.S. Organization. 57 >
- 15. Sample Cover for 4 Contractor Report Containing Proprietary i Information Obtained from a Foreign Source. 58 l
- 16. Sample Title Page for a Contractor Report Containing Propri- !
etary Information Obtained from a U.S. Organization. 59 l
- 17. Sample Title Page for a Contractor Report Containing Propri-etary Information Obtained from a Foreign Source. 60
- 18. Sample Back Cover for a Contractor Report Containing Propri-etary Information. 61
- 19. Control Cover Sheet for a Contractor Report Containing Proprietary Information. 62 : ,
Apprtved: May 31, 198b ii ! i
- 5.1.
PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1102 WITH THE DEPARTMENT OF ENERGY 5
- 20. Sample Cover for a Contractor Report Containing Unclassified 63 Safeguards Information.
- 21. Sample Title Page for a Contractor Report Containing Unclas- .
64 sified Safeguards Information.
- 22. Sample Back Cover for a Contractor Report Containing Un:las-65 sified Safeguards Information.
- 23. Cover Sheet for a Contractor Report Containing Unclassified 66 Safeguards Information.
67
- 24. Sample Cover for a Draft Preliminary Report (Code) for Comment.
- 25. Transmittal Letter from Contractor to NRC Project Manager for 68 Draft Preliminary Report.
- 26. Transmittal Sheet for Requesting Mailing to Cooperative 69 Program Participants.
Addresses of 00E Operations / Field Office Managers 71 Part V. l . l l Approved: May 31,1964 g4
l EXHIBIT 1
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" DOE SOURCE SELECTION JUSTIFICATION I
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PROCEDURES FOR PLACEMENT OF WORK WITH THE DEPARTMENT OF ENERGY NRC Appendix 1102 PART I STATEMENT OF WORK AND ' SAMPLE LETTER REQUI?5 TING A PROPOS 4
Title:
FIN: B & R No. :
- 1. Backgroun_d Provide a brief statement to orient the reader to the requirements for the work and discuss any pertinent work previously accomplished.
- 2. Work Required Provide an objective and concise description of the tasks to be accom-plished by the performing organization. Highlight changes from prior authorized statements of work (SOW), if any.
- 3. Reporting Requirements State that each program office shall specify its reporting requirements (types of reports, frequency, content, and distributton) in the S0W. This may be accomplished by reference to existing office procedures.
The report listing shall include, as a minimum, a monthly letter status report and a f:..;i report to be furnished upon completion of the project. These two reporting requirements are mandatory and standard for all projects and will not be waived except for consulting service contracts, which should be reported based on activity level. For projects identified as "License Fee Recoverable" per 10 CFR Part 170, additional task and case level cost reporting will be necessary to accumulate DOE costs for later recovery from the licensee or appifcant. (See Part IV, Sec.15, "License Fee Recovery Procedures.") The programmatie distribution of these documents shall be as specified by the responsible program office. (a) Monthly Letter Status _ Report. State that each month the perform-ing organization is required to submit a brief letter status report which summarizes (1) the work performed during the previcus month, (2) personnel time expenditures during the previous month, and (3) costs generated against the work effort. The first monthly letter status report after project authorization shall include the planned monthly rate of expenditures for the fiscal year, if not provided with the proposal, and include any changes to prior schedules or estimated costs. Other estimates in the proposal will be corrected at this time to reflect authorized project levels. The first of out and allstaff (1) subsequent monthly rep2) months utilized, (orts shall costs also contain incurred a break-for direct salaries, material and services, ADP support, subcontracts, travel, indirect labor costs, any other category of cost originally reported 1 Approved: MAY$1 9
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part I WITH THE DEPARTMENT OF ENERGY I on NRC Form 189, and general and administrative expense, and (3) current obliration status information for the project. This 1;st-ing should closely parallel the data shown on the 189 proposal. Such information is to be provided wkh flexibility of categories to corre-spond to the specific contractor accounting system being used. A suggested format is provided as Figure 1 of Part IV, aTerms and Conditions of Standard Order for DOE Work." Any additional, non-standard reporting required for individual projects will be noted in the remarks section of the NRC Form 173. Exception: for consul-tants the frequency should be in consonance with the activity level; i.e. , report only if activity occurs. If this report is designated to be made available routinely in the NRC Public Document Room, it shall be treated as an interim technical letter report (see Part I, Sec. 3(a) and Part IV, Sec.18(a)). Any portion of this information not intended for public review should be so marked by DOE when submitted. (b) Technical Rerorts. Instructions for the preparation of this portion of the statement of work are provided in the Terms and Conditions of the Standard Order for DOE Work, Part IV.
- 4. Meetings and Travel State any meetings and associated travel requirements for meetings which the performing organization will attend or host. Identify planned 3
- foreign travel. Note that specific prior NRC approval must be obtained for all foreign travel-(see NRC Manual Chapter 1501). If desired by the NRC project manager, state that prior notification must be given for domestic travel.
- 5. NRC Furnished Material Specify any special reports, equipment, or other items to be provided to
'the performing organization by NRC and when the material will be pro-vided. If convenient, this information may be provided as an integral part of the task definition in Section 2 above.
- 6. DOE Acquired Material State that the NRC ?roject manager must be notified prior to acquisi-tion of any capital, AJP or word-processing equipment.
- 7. Period of .>erformance
. Specify the start and completion dates for the werk described in this statement of work. Where appropriate, this information should be speci-fied for individual milestones, as well as for total effort. A level of effort may be indicated.
- 8. Technical Direction )
Insert name and FTS telephone number of the individual designated as , the NRC project manager for this effort. Approved: NAy 311994 2
PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1108 WlTH THE DEPARTMENT OF ENF.RGY Part I
- 9. Sample Letter Requesting a Proposal (date) SAMPLE
, Manager (or designee)
Operations Office U.S. Department of Energy I
Dear :
This letter is a request for a proposal from the National Laboratory to provide contractual assistance to the Office of of the Nuclear Regulatory Commission. The enclosed statement of work details the required work and should be used as the basis for preparing a proposal. NRC Form 189 contains the minimum information needed and will be used for the proposal. Standard terms and conditions for NRC work, as approved by Headquarters, DOE, apply to this effort. A copy of these terms and conditions has been furnished your office separately. The proposal should be submitted within days in six (five, etc.) copies to: U.S. Nuclear Regulatory Commission Office of - Attn: Washington, D.C. 20555 Work under this task (is anticipated to be unclassified.) or (will require access to and/or the origination of classified information as indicated on the enclosed NRC Form 187.) or (will require access to and/or the origination of sensitive unclassified information.) This request for proposal is not an authorization to start work. Authorization to commence work becomes effective upon the _ Operations Office acceptance of an appropriately executed NRC Form 173. If you have any questions about this request, please contact on FTS . Thank you for your assistance. Sincerely ,
, (Title)
Office af
Enclosures:
- 1. Statement of Work
- 2. NRC Form 187 (If classified) cc:
(Director of National Laboratory) (DOE PE 221) (Contractor project manager) 3 Annrnvad ' uw 91 #84
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PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1102 Part II b'ITH THE DEPARTMENT OF ENERGY Instructions for Preparation of the NRC Form 189 Project and Budget Proposal for NRC Work The following items will be completed by the proposing DOE Office: Project Title The title should be a unique identifier of the project, reflecting a general idea of the encompassed work. An NRC selected title provided in a (prior) statement of work will be used, when known. Date The date the proposal is sent to NRC, indicating if it is new or revised for that fiscal year. Provide revision number. NRC Office The NRC office receiving the proposal. NRC FIN Number and B&R Number The NRC FIN number and B&R number, if known. DOE Contractor The Laboratory, Office, or prime contractor who will perform the work. Site Location of organization that will perform the work, giving complex, area, or other details of location. Contractor Account and DOE B&R Number Contractor account number, if known. The DOE B&R number should be i shown at the highest level feasible. l Cognizant Personnel l Identify all categories of key personnel by name and title, organization, and FTS phone number. Period of Performance Provide proposed date of' commencement of work and best-estimated completion date of the project. 7 Approved: MAY $11964
NRC Appendix 1202 PROCEDURES FOR PLACEMENT OF WORK Part 11 WITH THE DEPARTMENT OF ENERGY Staff Years of Effort , , I Staff years of effort are to be used. Provide projections of staff years of effort for the immediate prior fiscal year, current fiscal year, and out years, as applicable. Cost Proposal Projections should reflect the performing activity's best-estimate of budget authority needed based on the individual laboratory official accounting system. < Cost estimates should be consistent with DOE Order 2110.1, "Pricing of Departmental Materials and Services," and shown in thousands of dollars. These amounts and the staff years noted above will become a baseline for ( later analysis and comparison to the actual costs and staff year usage to be reported in mandatory monthly letter status reports (see Part I, Sec. 3a). l Capital Equipment Provide total cost estimates of major items of capital equipment, including all ADP equipment, for the project. Monthly Forecast Expense Planned monthly rate of costs for first fiscal year. This may be provided with the first report of an authorized project if not known at time of propo- , sal submittal. At the beginning.of each subsequent year, the first monthly letter status report should include the planned monthly rate of costs for the - ensuing year. Forecast Milestone Chart . Indicate cost and schedule time frames as they apply to the individual tasks within the scope of the project. Use weeks, months, quarters, or years as necessary. Extend the length of the format if more than five tasks are ! identified. Project Description Provide narrative descriptions of the following topics in the order listed on plain paper attached to the NRC Fonn 189. If an item is not applicable, so state on the Form 189. Note: If an NRC office has special requirements or does not want the proposal to address all the topics identified on the NRC , Torm 189, the letter requesting the proposal and/or the remarks l section of NRC 173 will either state which topics are not appli- l cable or describe the special instruction.
- 1. Objective of Proposed Work l
- a. Background i Start with a brief summary of the technical problem, issue, or need to orient the reader to the requirements for the work or end product.
8 Approved: MAY 31184
PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1102 WITH THE DEPARTMENT OF ENERGY Part II
- b. Objective
( State concisely the perfonning organization's understanding of the objectives and results to be accomplished. .
- 2. Summary of Prior Efforts .
Summarize the results of prior years efforts on this project, as well as efforts en other related projects.
- 3. Work to be Performed and Expected Results Provide a description of the tasks to be accomplished and the resulting end products or deliverables. The information identified in the following subsections shall be provided in this section; this section may be subdivided as follows:
- a. Work Required Describe the tasks and subtasks to be performed in such a manner that a disinterested third party can understand what is to be done and how it will be accomplished for the level of effort and period of performance proposed. Describe any assumptions being made pertinent to performing the work.
Provide criteria or other bases upon which evaluations, judg-ment or other action will be taken. Describe potential problems and recommend . solutions. State and . describe separately any options being proposed that require NRC approval before proceeding.
- b. Meetings and Travel .
When known, state the number of trips that the performing organization will require to perform the work and identify where and how many people are expected to travel. If no travel is expected or required, state none. Foreign travel must be addressed separately and approval must be obtained by processing NRC Form 445, in addition to being provided as part of the approved proposal,
- c. NRC Furnished Materials l l
Specify any equipment, background reports or data, or other i specific materials required to be provided by NRC.
- 4. Description of Any Follow-On Efforts Describe work that the performing organization believes should be done at the completion of the work requirements.
9 t.pproved: ggg
NRC App:ndix 1102 PROCEDURES FOR PLACEMENT OF WORK Part 11 WITH THE DEPARTMENT OF ENERGY
- 5. Relationship to Other Projects i Identify related projects that either (1) generate information that will be needed to accomplish the work proposed under this project, or (2) will use information generated by this project, or (3) sup-port a common cbjective. ,
- 6. Reporting Requirements and Schedule State the number, type, and other content of the reports requested ,
or proposed to be provided, to whom and when they are to be sub-mitted, and, if requested by NRC, whether drafts are to be pro-vided prior to finalization (see Part IV, Sec.18). , l
- 7. Subcontractor Information Describe any major or significant technical support effort that will be performed by a subcontractor or consultant, and reference the task or subtask described under the work requirements that the ,
subcontractor or consultant effort will support. Any work per- l fomed by a subcontractor or consultant on behalf of the nuclear industry that might give rise to an apparent or actual conflict of interest must be described.
- 8. List New Capital Equipment Required List all capital equipment, including all ADP equipment, which must be purchased by the performing organizatton to perform the described work along with an estimated cost.
- 9. Describe Special' Facilities Required ;
Describe any new special facilities required to perform this project.
- 10. Conflict of Interest Information Describe any contractual and organizational relationships of DOE, I its contractors, its consultants, or subcontractors on this proposal, ,
with industries regulated by the NRC (e.g., utilities, etc.) and suppliers thereof (e.g. , architect engiacers and reactor manufac- ; turers, etc.) that might give rise to an apparent or actual conflict j of interest.
- 11. Expected Classification or Sensitivity I E
Note the level of classification or sensitivity expected in the work to be performed and reported. If classified, state level and cate-gory of classified infonnation. If unclassified, state whether safe-guards, proprietary, or other sensitive unclassified infomation will , be involved. ' 1 l 1 Approved: gay 3194 10
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part II WITH THE DEPARTMENT OF ENERGY Approval Authority The proposal must be signed by an appropriate contractor or Operations Office representative. Note: This individual may or may not be the person who signs the transmittaTTetter. , 11 Approved: NAY 31 Y
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1 PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1102 WITH THE DEPARTMENT OF ENERGY PART III STANDARD ORDER FOR DOE WORK (NRC FORM 173), PREPARATION INSTRUCTIONS, AND S AMPLE TRANSMITTAL LETTER - M 6 NfW', """ 06 .ea.m. NRC W 1D 1148) STANDARD ORCEM PCR DOE WORX a.um eri penc ceT Accowfmo ataf'oa e.uss to aos on ap.40P h.f1CW. .. Q. 8 A % 84 PEFFC8.b Q 0 4AMGAT10 AMO W3CA110 5 pmm WO4.tAtfhCO.f,.. OmCt. NW eng0 : ( $ 5tu ,43 9.O.t. TO Os 4Af,o .v.4.AadVTY PWCMOED .T: A w l. _ s ,,~ w e e. - b.m4 .P C*. d D P heo. ' 0 ~ u.eg, = =.e,s u - ~ n .xm~g.ar=q c. % am w CITED aeCP4
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NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part III WITH THE DEPARTMENT OF ENERGY INSTRUCTIONS FOR PREPARATION OF ; NRC FORM 173 The following items will be completed by the NRC issuing office: Order No. The order number identifies the issuing office, the fiscal year the order is issued and the sequential number of the order. The number is XX-XX-XXX. The first two digits represent the office code (i.e. , 20 for Nuclear Reactor Regulation, 30 for Inspection and Enforcement, etc.). The third and fourth digits identify the fiscal year in which the order is issued. The last three digits are sequential numbers of the order assigned by the issuing office starting with 001 for the first order placed with DOE for that fiscal year. Date The date signed by the NRC issuing authority. Issued To The name of the DOE office receiving the order. Issued By The name of the NRC affice issuing the Jhr. , Performing Organi2ation The name and location of the DOE laboratory, prime contractor, or field loca-tion which will perform the work. Provide further iden'ification of laboratory complex, site, etc. , if possible. FIN Title The title should be a concise description of the work. The title on this form should be the same as thet provided to the Division of Budget and Analysis, RM, for the Financial Plan Listing. For continuing efforts, titles and num-bers generally will not change from year to year. In the event that the order covers a number of FIN tasks, insert the words "see remarks," then provide the appropriate lists and remarks. Accounting Citation - Appropriation l Use the same appropriation number as that identified on the allotment for cuc- I rent fiscal year funds. For adjustments to prior year FINS, use appropriate l allotment citation. B&R Number i State the NRC Budget and Reporting classification (B&R) number under l which the order was placed. This should be the same B&R number as that Approved: gy n g 14 l _ - - _ _ - _ _ _ - . _ __ _ _ . _
PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1108 WITH THE DEPARTMENT OF ENERGY Part III identified in the financial plan. When an order covers a number of tasks, I insert the statement "see remarks" and add as appropriate. i FIN Number State th s Financial Identification Number (FIN) which identifies the ta'sk and fiscal year of the funds. The oasic number (first five positions) will not change for continuing efforts. (The sixth digit denotes the fiscal year of the I funds.) In the case of an order covering a number of tasks, insert the statement "see remarks" and add as appropriate. Work Period State the period in which the work is to be perforined and funded. Note whether the work period is fixed or estimated and check the applicable box. If the order is for more than one FIN, insert the words "see remarks" and provide as appropriate. Definitions: Fixed means that costs shall not he . c. u. ceyond the cited work period. For the work pcriot. .o be extended a revised NRC Form 173 must be issued. Estimated means that the exact period of performance is not known at the inception of the project. In this instance the period of performance may be extended up to a maximum of two months longer than the stated period without prior approval by NRC. Howev' e r, when the period of performance is determined, a revised NRC Form 173 will be issued to pro-vide a fixed work period or close out the project. Obligation Availability Provided By: A. This Order Include the dollar value cf the order. B. Total of Orders Placed Prior to This Date State the total value of all prior orders this fiscal year placed by the issuing offic.e to this performing organization citing the same appropria-tion source and the first four digits of the NRC B&R number appearing in the accounting citation. State zero for the initial order in any fiscal year. C. Total Order to Date State the total of d. and B. above. D. Amount Included in C. If the order is for a single FIN, this amount would repre.sent the cumu-lative year-to-date amount of funds obligated against the FIN. If the l order is for more than one FIN, insert "see remarks" and add as appropriate. 15 Approved: MAY 31194 L - _ _ _ - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
NRC Appendix 1108 PROCEDURES FOR PLACEMENT OF WORK Part 111 WITH THE DEPARTMENT OF ENERGY Financial Flexibility j Check the appropriate box to denote level of flexibility the issuing office wishes to grant the performing organization without prior notification (see para. 045). Attachments Check the appropriate box identifying the attachments to this order. , Security Check the appropriate box. If classified, complete NRC Fonn 187 and forward to the Division of Security for appropriate concurrence, along with a copy of the statement of work. If sensitive unclassified information is involved pro-vide appropriato instructions for protection (see Part IV para. 5, 6, or 7). License Fe4 Recovery ) Check the appropriate box (see Part IV, Section 15), i Remarks Use this space for any pertinent information you may want to include. If the ' order is for more than one FIN, include the following listing: ; (1) FIN numbers, (2) FIN titles, (3) NRC B&R numbers, (4) amount of this order by FIN, (5) cumulative amount by FIN, and (6) vork periods. Issuing Authority The signature and title of the director or designee of the issuing NRC office must appear in this block. : i Accepting Organization i The signature of the DOE representative authorized to accept the order, title, and the date of the signature must appear here. < l l i j j Approved: MAY 3134 16 l
. 5.1 NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part III WITH THE DEPARTMENT OF ENERGY 6
Sample Transmittal Letter for Standard Order for DOE Work (date) SAMPLE
, Manager (or designee)
Operations Office U.S. Department of Energy
Dear :
The enclosed NRC Form 173, Standard Order for DOE Work, for $ is submitted in accordance with Section !!!.B.2 of the DOE /NRC Memorandum of Understanding of February 24, 1978. (Include as second paragraph when appropriate:) This work is urgently required to support (define activity) and the SOEW is forwarded without prior proposal. The work authorization provides for proposal preparation as part i of the work scope. The enclosed statement of work details the required work and should be used as the basis for preparing a proposal. NRC Form 189 contains the minimum infomation needed and will be used for the proposal. Standard tems and conditions for NRC work, as approved by Headquarters, DOE, ap?ly to this effort. A copy of these terms and conditions has been furnishec your office separately. The proposal should* be submitted within days in six (five, etc.) copies to: U.S. Nuclear Regulatory Commission Office of Attn: Washington , D.C. 20535 Please indicate DOE acceptance by signing and returning the enclosed NRC Fom 173 to the NRC Office of Resource Management, Division of Accounting and Finance, with a copy to this office. . If you have any questiens, please contact (FTS ), Thank you for your assistance. Sincerely,
, (Title)
Office of i Enclosure (s):
- 1. NRC Fom 173
- 2. NRC Fom 187 (if classified) cc: (DOE, PE 221))
(Contractor project manager) 17 Approved: MAY 3194
l PROCEDURES FOR PLACEMENT OF WORK WITH THE DEPARTMENT OF ENERGY NRC Appendix 1102 i PART IV TERMS AND CONDITIONS OF STANDARD ORDER FOR DOE WORK
- 1. Introduction 4
Project initiation includes the preparation of (1) a "Statement of Work," (2) an NRC Fom 189, "Project and Budget Pro sal for NRC Work," and l 3 (3) an NRC Form 173, "Standard Order for E Work." When these d documents have been prepared and accepted by DOE and NRC, an on- , going project will have been initiated. ]
) Project management requires good communications. A key document in 4 this process is the monthly letter status report prepared by the contrac- ,
tor's performing organization for submittal to the NRC project manager. : This monthly report is required on all projects (except consultant's ! projects) on a regular, recurring basis. The report should nomally be submitted to the NRC project manager within 20 days of the end <f each calendar month. If a ,onger reporting time is required, this shoulu b, agreed to in advance by DOE and NRC. The content of the Monthly 1 Letter Status Report is described in Part I, Sec. 3(a). A suggested > 4 j format for the financial infomation to be included is presented in ! j , Figure 1 of this Part. , The rules to be followed in actively pursuing a project to its completion ! ) or termination are contained in the following terms and conditions and j any specific modifications noted on NRC Fom 173. l ! 2. Security - Unclassified Work Efforts ; $ To the extent that performance of work under this order does not ; involve classified information or sensitive unclassified information, the following clauses are applicable . j (a) It is mutually expected that the activities under this work order l will not involve classified or sensitive unclassified information or i j material. If in the opinion of either party this expectation i changes, they shall immediately notify the other party in writing. . In any event, DOE shall handle and otherwise safeguard classified ] and sensitive unclassified information and material in accordance 4 with applicable law and DOE requirements and shall promptly inform j the Commission in writing if and when classified or sensitive 1 unclassified infomation or material becomes involved. j ) NOTE: While these tems and conditions are oriented to government-owned, contractor-operated facilities (GOCO), they a pply equally to govern-ment-owned, government-operated facilities (GOGO). Examples of GOGO are the New Brunswick Laboratory (NBL) and the Idaho Radiological Environmental Sciences Laboratory (RESL). i ! 19 Approved: NAY 3194
NRC Appendix 1108 PROCEDURES FOR PLACEMENT OF WORK Part I\ WITH THE DEPARTMENT OF ENERGY (b) The DOE contractor (performing organization) shall not permit any ) individual to have access to Restricted Data, or other classified os sensitive unclassified information and material except in accordance with the Atomic Energy Act of 1954, as amended, and DOE's and NRC's regulations or requirements. , (c) Except as specifically authorized by this work order or as otherwise approved by the issuing authority, records or other infomation, documents and materials furnished by the NRC in the performance of the order shall be used only in connection with the work performed under the order. Upon completion or termination of this order, DOE shall transmit to the issuing authority all records or other infomation, documents and materia s and any copies thereof, furnished by the NRC in the performance of this work order except those required by the DOE Contracting Officer's official records. (d) All parties conducting activities under this work order shall be responsible for the safeguarding from unauthorized disclosure any infomation or other documents and material exempt from public disclosure by the NRC's regulations and made available in connec-tion with the performance of work or generated in the perfomance of this work under this order. Both parties agree to conform to all regulations, requirements, and directions of NRC with respect to such material.
- 3. Security - Classified Work Efforts )
To the extent that the performance of work under this order involves classified information, the following clauses are applicable: l (a) DOE and the DOE contractor (performing organization) shall be responsible for safeguarding Restricted Data, Fomerly Restricted Data, and other National Security Information and for protecting it against sabotage, espionage, loss and theft in accordance with DOE's security regulations and requirements. Except as otherwise expressly provided, DOE or the DOE contractor shall, upon completion or temination of the work order, transmit to the Commission all classified matter in its possession or in the possession of any person under its control in connection with performance of this work order. If retention of any classified matter is required by DOE or the DOE contractor, it must obtain the approval of the Commission and complete a certificate of possession specifying the classified matter to be retained. (b) Rerulations. . The DOE Contracting Officer shall ascertain that the DOE contractors conform to all security regulations and requirements of DOE. (c) Definition of Restricted Data. The term "Restricted Data," as use in this clause, means all data concerning (1) design, manufacture i or utilization of atomic weapons; (2) the production of special nuclear material; or (3) the use of special nuclear material in the Approved: gy n g , 20
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV, WITH THE DEPARTMENT OF ENERGY production of energy, but shall not include data declassified or removed from the Restricted Data category pursuant to Section 142 of the Atomic Energy Act of 1954, as amended. of Formerly Restricted Data. The term "Formerly (d) Definition Rei,tricted Data," as used in this clause, means classified informa-tion related primarily to the military utilization of atomic weapons that can be adequately safeguarded as National Security Information, subject to the restrictions on transmission to other countries and regional defense organizations that apply to Restricted Data. Information that has (e) Definition of National Security Information. been determined pursuant to Executive Order 12356 or any predecessor order to require protection against unauthorized disclosure and is so designated. (f) Securityany Clearance of Personnel. DOE and DOE contractors shall not individual to have access to Restricted Data, Formerly 15ermit Restricted Data, or National Security Information, except in accord-ance with the Atomic Energy Act of 1954, as amended, Executive Orders 12356 and 10865, and the DOE regulations or requirements applicable to the particular type or category of classified information to which access is required. (g) Liability . It is understood that the unauthorized disclosure or the
, failure to properly safeguard Restricted Data, Formerly Restricted Data, or National Security Information that may come to the DOE.
or to any person under a DOE contract in connection with work i under the work order, may subject the performing organization, its agents, employees, or subcontractors to administrative sanctions and criminal liability under the laws of the United States. (See the Atomic Energy Act of 1954, as amended, 42 U.S.C. 2011 et seq. ; 18 U.S.C. 793 and 974; and Executive Order 12356.) (h) Subcontracts and Purchase Orders. Except as otherwise authorized s in writing by the Commission, DOE shall insert provisions similar to the foregoing in all subcontracts and purchase orders under this work order.
- 4. Classification I
To the extent that the performance of work under this order involves l classified information, the following clause is applicable: "In the perfor- l i mance of the work under this work order DOE shall assure that a DOE authorized classifier shall assign classification levels to all documents, l 4 ' material, and equipment originated or generated by the performing organization in accordance with classification guidance furnished by the Commission. Each subcontract and purchase order issued here-
' under involving the generation of classified documents, material, or
' equipment, shall include a provision to the effect that in the performance of such subcontract or purchase order a DOE authorized classifier shall ' assign classification levels to all such documents, material, and equipment in accordance with classification guidance furnished by the Commission. 21 Acoroved: WAY 31984
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY I The attached NRC Form 187, Security / Classification Requirement, dat. is a part of this order. It is the responsiblity of the NI office originating the work order to review the classification assigne. and to refer any problems to the NRC Division of Security for resolution.
- 5. Unclassified Safeguards Infomation To the extent that the performance of work under this order involves unclassified Safeguards Information, the following clause is applicable:
"In the performance of the work under this work order DOE shall assure that the performing organization shall mark and protect all documents, material and equipment originated, generated or received by the perfoming organization in accordance with the provisions of section 147 of the Atomic Energy Act of 1954, as ameaded, its implementing regula-tions (10 CFR 73.21), and Commission guidance (NUREG-0794, "Protec-tion of Unclassified Safeguards Information: Criteria and Guidance")."
Further guidance on the protection of unclassified Safeguards Infomation is provided in this Part as Sec.18(k). Examples of proper marking of cover, title page, and back cover are presented.
- 6. Proprietary Information In connection with the performance of work under this order, the Com- >
mission may furnish for DOE review, evaluation, or other use, certair. trade secrets or confidential or privileged commercial or financial informa-tion detemined by the Commission to be exempt from public inspection or disclosure. A synopsis of such information shall be submitted in writing to the DOE Contracting Officer for reaching agreement with the Commission on the acceptance and use of the information. Guidance on the protection of proprietary infor;uation used in reports prepared by i the performing organization is provided in (nis Part as Sec.18(k). i Examples of proper marking of cover, title page, sna back cover are
! presented.
4 For DOE contractor employees used as NRC consultants, proprietary or other privileged information may be provided by NRC on an individual basis with the understanding that it will be protected from disclosure , and will be returned to NRC upon completion of the task. The use of proprietary information in reports prepared by consultants requires the protection specified in this Part in Sec.18(k). i l
- 7. Other Sensitive Unclassified Information information other than safeguards and proprietary infomation may at times be determined to be sensit ive. This infomation will be designated Official Use Only or Limited Official Use. Such information will be provided in the same manner and under the same conditions' as given
- i Approved
- MAY 311!B4 22
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY above for proprietary information. The use of such information in reports requires the protection specified in this Part in Sec.18(k).
- 8. Information on NRC Cooperative Programs with Foreign Governments _
and Organizations and with U.S. Industry DOE facilities, contractors and subcontractors working on NRC coopera-tive programs with foreign governments and organizations and with U.S. industry perfom this work with the understanding that draft or formal reports on this work are to be available only to participants in the program until public availability is authorized by the NRC project manager. Reports or codes (including data) on this work will be issued as "Draft Pre 11 mint y Reports (Codes)" until the NRC project manager authorizes issuance of the report as a tomal report with the designation NUREG/CR-XXXX. Details of the handling of reports are provided in this Part in Sec.18(1).
- 9. ConfUet of Interest Notwithstanding any other provision of the work order, the DOE Contracting Officer and DOE contractor agree that placement of this work does not give rise to any actual or apparent conflict of interest from either agency's viewpoint. They further agree that during the period of performance, the contractor will forego entering into any newThe contractual perforn-arrangement which could give rise to a conflict of interest.
ing organization shall ensure that all employees designated as key personnel, if any, under the work order abide by the provisions of this clause . The DOE organizational conflict of interest provisions will be used as a guide in making such determina$ h-l If in the DOE Contracting Officer's view, any proposedhe contractual arrangement shall notify the issuingcreates NRC a possibility for conflict of interest, office and obtain written approval prior to the e contract.
- 10. Subcontracting The DOE organization shall notify the issuing office in writing reasonably in advance of entering into any major or significant technical service subcontract not contained in the original proposal. "Major or significant" must be used with judgment and related to the total value of the project and/or impact on the results. This advance notification will include:
(a) A description of services to be called for by the subcontract, (b) Identification of the proposed subcontractor, (c) The proposed. subcontract costs (in total), and (d) A statement that the proposed subcontract will not result in a real If the NRC program or apparent conflict of interest situation. office requires additional specific subcontractor information or Approved: EAT 31 N4 23
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY i limitations, those requirements shall be stated on the NRC Fonn 173. ; DOE will provide any special requirements such as financial and -) organizational disclosures for consulting services. !
- 11. Stop-Work Order I
(a) The issuing office may, at any time, by written order to the. DOE ! Contracting Officer, require the contractor to stop all, or any part, of the work called for by this work order for e period of 90 days after the order is delivered to the contractor, and for any further period to which the parties may agree. Any such order shall be l s?ecifically identified as a Stop-Work Order issued pursuant to this ! clause. Upon receipt of such an order, the contractor shall forth- ! with comply with its terms and take all reasonable steps to minimize the incurrence of cost allocable to the work covered by the order l during the period of work stoppage. Within a period of 90 days after a Stop-Work Order is delivered to DOE, or within any exten-sion of that period to which the parties shall have agreed, the ( issuing office shan either: , i (i) Cancel the Stop-Work Order, or j I I (ii) Terminate the work covered by this work order. ! 1 ! i (b) If a Stop-Work Order issued under this clauce is cancelled or the period of the Stop-Work Order or any extension thereof expires, DOE shall authorize its contractor to resume work. An adjustment
)
shall be made in the delivery schedule or cost, or both, and the ! work order shau be modified in writing accordingly. f (c) If a Stop-Work Order is not canceUed and the work covered by such is terminated in accordance with the terms of this work order, costs !
- resulting from the Stop-Work Order shan be allowed in arriving at !
the termination settlement. i l 12. Patent Rights The statutory, regulatory and procedural patent poucles of DOE will be ( applicable to the work faning under this work order, provided however: j (a) Disclosures of inventions conceived or first actuaUy reduced to l practice under Commission-funded work shan be promptly furnished l
- l to the Commission together with notice of DOE's intended patent i J
action on such invention; j l (b) If DOE should determine not to protect such inventions, either l domestically or abroad, the Commission shan have the right to pro- ; tect such inventions; i ' 1 j (c) If the technology covered by any invention disclosure upon which 1 DOE intends to file 's deemed by the Commission to fall within the Commission's mission (i.e., relates to nuclear facilities and materials. g i safety, safeguards, and environmental protection, in support of the , ! Approved: MAY 3194 24 1
-~ _ _ - -- , .- _ - _ _ _ . - _ . - _ - - _ _ _ . , _ _ _ _ - _ . - - - _ _ - - - _ . - - - _ _ - . - - . - - _ _ _ . - _ .
PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1102 WITH THE DEPARTMENT OF ENERGY Part IV Commission's licensing and regulatory functions), the Commission may so notify DOE and a determination will be made by the parties as to which party will file such patent application or applications; and (d) In view of the statutay patent policies of DOE and NRC, neither
? arty shall grant any form of exclusive patent rights, by waiver or ay licensing, without expressed approval of the other party.
- 13. Patent Clearance In order that public disclo.iure of infomation regarding scientific or technical developments arising out of this work order will not adversely affect the patent interests of either DOE or NRC, patent approval for release or publication shall be secured from DOE prior to the release or publication of any such infomation.
- 14. Limitation of Funds (a) The Commission shall not be obligated to reimburse DOE 'for costs incurred by its contractors in excess of the total amount authorized by an appropriately executed NRC Form 173. NRC will formally
' notify the appropriate DOE Operations Office of any pro.; rams they intend to. phase out or terminate as soon as such intent is known; preferably, at least 30 days prior to the proposed temination date. For programs with fixed performance periods, the DOE Operations Office should assume that the program will teminate on the last day of the period specified in the Standard Order for DOE Work unless notified otherwise. (b) If at any time DOE has reason to believe that the costs will exceed i the total amount authorized, DOE shall notify the issuing authority. In the absence of formal NRC instructions to continue or to termi- i nate a program, the DOE Operations Office (contracting officer or his designee) will notify NRC, by TWX or other suitable written j means, when the accrued costs of any NRC program approaches 90% l of the authorized funding level. The notification should include estimated date when the accrued costs will equal the authorized funds, and may, if appropriate, recommend or request the NRC action desired . The notification should be addressed to the 1 appropriate NRC office, with a copy to the Director, Office of
, Resource Management, and a copy to DOE-EP . After such ;
notification, the issuing office will (i) Increase funding authorization, and/or 1 (ii) Change the scope of work, and/or (iii) Change the period of performance, or (iv) Teminate this work order. l 25 Approved: MAY 3194 l
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY (c) If this work order ?ermits DOE to reallocate funds authorized by this order between F N's, the issuing office shall be notified of such ! reallocation within five days after such an adjustment. To be > recognized in the current fiscal year, the adjustments must be incorporated in an NRC Form 173 signed and dated prior to October 1. - (d) In cases where the work period states "estimated," prior notifica-tion that work is to extend beyond the necessary to completing the assigned work. period indicated is not , (e) If the work period under this work order is fixed, the performance of work should be completed within that period. However, when it is first anticipated by either the DOE or NRC project managers that i the work cannot be completed within the time ?eriod fixed by this work order, the issuing office shall be notified :n writing. Notifica- l tion shall occur in sufficient time to allow the issuance of another NRC Form 173 authorizing an extension of the work period to such t time as is necessary to complete the authorized work. Work shau not be performed beyond the end of the work period of this order unless authorized by an appropriately executed NRC Form 173. If the period of performance is not extended, the , ' issuing office will issue an NRC Form 173 to the appropriate DOE office deobligating any excess funds.
- 15. License Fee Recoverr Procedures i i License fee recovery procedures are applicable to au license fee recover-able projects of NRC. For each such project NRC will identify specific '
license amendments, license reviews, inspections, topical report reviews, and special reviews for which fees are recoverable. The DOE contractors will report all actual costs on these actions on a monthly basis as part of the monthly letter status report (see cost report format, Figure 2). On a periodic basis, NRC will total the contractor incurred costs, add other costs, and biu the respective licensees for the services performed. (a) Statement of Work. AD technical assistance projects, in contrast to research projects, are classified either as fee-recoverable or non-fee-recoverable. Projects that have tasks in both categories must be rewritten to decouple such work, i l For fee-recoverable projects, the breakout under the FIN wiu be ' unique "tasks . " Each task will cover an area of similar work effort. Such effort within a task ma t i reactors, sites, or fuel cycle facilities. yThese be required forbeseveral cases will identi- ; fied by a specific docket number or other identifier. . 1 DOE contractors will be issued specific projects divided into one or more tasks, each of which may have a large number of similar l actions. The issuing NRC office will identify these tasks and the specific case / license actions involved. This breakdown, as shown { j Approved: gy n g 26
. . . _ . . - . - -- --= - - -_ .. -- _- -._-- =-.
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV
- WITH THE DEPARTMENT OF ENERGY !
l 1 )' in Figure 2, will be provided to the contractor with the Statement j of Work. Reporting. Each month the DOE contractor will identify I (b) Monthly the costs, down to the case level, and report this infortnation to l
- Au fee-recover
- able NRC in the same format as initially) provided. case specific or (2) common costs will be one identified licensee as either (1 under a single task. (See
/ applicant r more than Figure 2 for approved "License Fee Recovery Cost Report.") Both I monthly costs and cumulative costs for this fiscal year are to be ;
- provided. This report is to be part of the regular monthly letter [ status report required for all NRC projects. f (c) Disposition of Common Costs. Common costs include fee-recoverable l costs for services necessary for overau task performance that bene- Such ! fit all similar licensee / applicant cases within a single task.Au costs i costs are not attributable to any single licensee / applicant. l that are not "common" are, by definition, "case specific." Examples i of common costs include efforts associated with the "lead plant" j concept, startup efforts, or meetings held to provideTask background ransge-j i knowledge or guidance needed to perform the task. l ment and support costs are case specific, not commor.. ! l ! Common costs must be identified, as they occur, on an actual cost ! basis.~ They are to be reported in the monthly lotter status report l l- as a single line item for each task and accrued on a monthly basis. l At task completion or the end of each fiscal year, whichever occurs l first, such' cumulative common costs attributable to each task are to l be apportioned by the contractor to the individual affected licensee actions in accordance with the NRC instruction in the Statement of l Work. l I Common costs are to be apportioned among licensees / applicants by/ ( either of the following methods: (1) equally among au licensees 6 l j applicants , or (2) in proportion to case-specific costs incurred f during the apportioning meriod. The most appropriate of these two i l methods will be speciftet in the Statement of Work for each task. ! l The same method will be used for au common costs associated with ! I. any given task. i Contractors must retain sufficient supporting 1 ! (d) Audit Trails. evidence to maintain an audit trail of reported costs for at least j three years after the end of the fiscal year in which the costs were incurred and expensed. Time cards or other man-hour l i j records, certified bills , and normal DOE accounting records j should meet this need, t At each task completion or the end of each fiscal l (e) Reconciliation. 3 year, whichever occurs first, contractors must reconcile any previ-ously reported amounts to the actual expenses (i.e. , to the billed amounts NRC will receive). A reconcillation report is to be pro-vided to NRC within 90 days to ensure that the NRC data base (input by monthly letter status reports) is in agreement with the f, l 27 Approved; ggy 3194 i.--..- _ --,, 7,.e.e_..,_ ,_ _ my-m-,w . ___ . www ww , ww w%, w-. wm , _m,-,
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY official billed amounts for each fiscal year. This final period report must also identify the apportionment of common costs to each of the ; cases, as noted above.
- 16. Billing Requirements (a) DOE will bill NRC monthly for costs reported through the DOE Financial Information System (FIS) system by the six-position FIN number via separate buls for costs applicable for each NRC program office (e.g. , Nuclear Reactor Regulation, etc.).
(b) The bills will etc. identify the NRC FIN (6 positions) such as A 10017, (the last digit identifies the fiscal year of the fund-3 20016, ing), the NRC B&R number shown on the NRC Form 173, and the DOE B&R number. (c) The bills will be certified by the DOE Operations Office prior to submission to NRC. The bills, at a minimum, will indicate the month the costs were incurred and the dollar amount of those costs. In some instances, due to accrual accounting and other adjustments, the amounts may differ slightly from the original FIS information. (d) For bills which include equipment and related material (including sensitive items), an itemized receiving report will be provided to include: DOE Facility Identification (each page) } Fin item Manufacturer Serial or Acquisition Total Nv. Description & Model No. Part Number Cost Quantity Cos t __ (e) All bills (SF 1081) shall be issued (original and 5 copies) to: U.S. Nuclear Regulatory Commission l Office of Resource Management ' Division of Accounting and Finance Washington, D.C. 20555 Any additional buling information to be requested must be so indi-(f) cated under the "Remarks" section of the NRC Fom 173,
- 17. Project Closeout (a) Acceptance of Deliverables. Uaon completion of work on a project, the NRC project manager anc, DOE will jointly detemine that all deliverables have been received and accepted in accordance with the SOW and these terms and conditions.
(b)' Disposal of Property. Prior to closeout of a project, a reconciled ' report will be developed by DOE to record available equipment and material purchased with NRC funds. This report should be submitted , as soon as possible after a project completion or termination decision 1 has been made, but not later than 60 days after the termination Approved: NAY 3194 28
\
I
.51 NRC Appendix 1102 l PROCEDURES FOR PLACEMENT OF WORK Part IV l l !
WITH THE DEPARTMENT OF ENERGY date . The report should be submitted to the NRC Division of Facilities and Operations Support, ADM, and to the applicable NRC project manager. The NRC Division of Facilities and Operations Support, ADM, when : requested, will provide a project equipment and materia NRC program office, , 1 equipment on NRC projects and advise DOE on the displ , made of the equipment.of any excess equipment to other NRC pro l for use in making this determination. L l The responsible NRC office and (c) Deobligation reconcileof Uncosted Funds. all uncosted funds and deobligate them as DOE will An NRC Form j j required. 173 will then be processed to close out the j l project. j f
- 18. Technical Reporting Requirements f The re rts required may be unclassified 5 (a) Reporting Specifications. sensitive (unclassified), or classified.The state-(nonsensitive),
4 ment of work will specify the technical reporting requirements, ; i a concise list of reports to beand provided, the level content, the frequency, of contractor and ! l management review desired, l
- distribution of the reports and to whom they should be submitted. l The minirum reporting requirement is a final report (letter type or [
NUREG/CR-series work. report) to be furnished upon co - i l longer than 16 months. l associated with preparation of camera-ready copy, All costs e printing, and shipping for NRC are to be direct c ; l, General and Administrative Expenses. l t Each technical report required by the statement o j or final material for inclusion in an NRC Safety Evaluation Report l 1 (SER) or Environmental Impact Statement (ES), in accordance wit
- 1 the following definitions' I j l I technical reports - information on the technical aspects of the !
j work. These may be interim or final technical letter reports, publication in the ; draft or final formal technical re > orts forfinal matersal for inc! NUREG/CR series, or draft or l SERs or ESs (see definitions below). ! called Technical Evaluation i technical letter reports (also i Reports) - interim or final letters that provide information onInte l the technical aspects of the work. These , reports may be required t t various stages of a profect.follow interim letters usually art report or a formal technl cal report. Final technical letter reports are usually specifier) in shtuations where the technic 29 Approved: gay 3194 j
\
l
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY work is review and evaluation of work of others or work tc be used by the staff in the licensing and regulation process. Interim letter reports may include, but are not limited to, informal (interim) progress reports, quick-look reports, data reports, status summary reports, project descriptions, pre-test predictions, model verifications, experiment safety analyses, experiment operating procedures, facility certification reports, and test result reports. These reports must be identified with the financial number (FIN) assigned to the project. They are not to be identified by a DOE registered report code. The I number of copies to be preoared and the distribution of those copies will be specified by tae project manager. femal technical reports - the final product of research, an original investigation, or a significant compilation of informa-tion . This product is a formal technical re? ort for publication in the NUREG/CR series. For extensive Long-term projects, formal monthly, quarterly or semiannual and annual periodic technical reports may be required. A draft of the final or periodic report may be requested for comment prior to prepara-tion of the camera-ready copy. draf t or final material for inclusion in SERs or ESs
- written material requested for input to SERs or ESs to be issued as NUREGs. Such material may be abstracted and used as necessary by the NRC staff. NRC requires patent review and full management review of this material by the performing organization.
if a draft is desired prior 'to the completion of a final technical letter report, formal technical report, final material for .nclusion in an SER or ES, or for comment by participants in cooperative pro-grams with foreign governments and organizations and with U.S. industry, state that requirement in the SOW and the time frame for delivering the final document after receiving NRC comments on the draf t. State that all draft and final material should be submitted to the cognizant NRC project manager through the DOE Contracting Officer when required by the DOE Operations Office. When draft reports are to be submitted for comment prior to the preparation of a final report, state that if there are NRC and/or program participant comments, the author will be asked to make changes. If agreement on the changes is reached, the NRC project manager will authorize the author to prepare the final copy and submit it to the NRC project manager, if it is a letter report or input to an SER or ES, or to the Director, Division of TechnicM Infomation and Document Control NRC, if it is camera-reasy copy for printing and distribution. This is to be done to a swrt y.oper publication, handling, and distribution and, aeg oC. Ar thints, to preclude further changes that might nullif, .h , ar . 4emem , If caveats were agreed to and the NRC project manager win.n to check the final document for their presence, hwthe should m'u ' the Division of Technical Information and Docu mt C ntM of that desire . In that case, upon rect ' ' of the r tre re # copy by Approved: MAY 31364 30 .i
.' Qg '
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY i the Division of Technical Information and Document Control, the NRC project manager will be informed and requested to prepa.re and sign the NRC Form 426A. Also state that if agreement on changes to a tormal technical report ! to be issued in the NUREG/CR series is not reached, the NRC pro-ject manager may request that the camerTready copy be prepared with, in addition to the standard disclaimer required on all fonnal reports , any caveats deemed necessary to cover NRC objections. Such caveats may range from "The views expressed in this report are not necessarily those of the U.S. Nuclear Regulatory Commis-sion" to the addition of a preface setting forth the NRC opinion or ! footnotes at appropriate locations within the text. State that if NRC objections cannot be covered in this manner NRC can refuse to publish the report. In this case the DOE Operations Office Manager responsible for the contractor that prepared the report will be informed by the NRC Office Director of the decision
- and the reasons therefor, with a copy to the contractor. The
] contractor is then free to publish without NRC identification of the report. NRC project manager or higher level decisions may be appealed to the NRC Executive Director for Operations.
, r (b) PublishingIfUnclassified Information in Open Literature and Presenting Papers. the principal investigator is to be allowed to publish in .,
the open literature instead of submitting a final report and/or present papers at public or association meetings during the course of the worX, add the following statement to the Statement of Work: The contractor's principal investigator (s) may publish the results of this work in the open literature instead of sub- ; mitting a final report and/or present papers it public or association meetings at interim stages of the work. , If the NRC project manager wants to review the speech, paper or journal articles prior to presentation or submission for publication, state this in the statement of work as follows: The contractor's principal investigator (s) may publish the ; results of this work in the open literature instead of sub-
- mitting a final report and/or present papers at public or association meetings at interim stages of the work, if the article or paper has been reviewed by the NRC project manager in draf t fom and agreement has been reached on the content.
i If agreement is not reached, NRC maystandard also ask statement that the paper include , in addition to the "Work supported by the U.S. Nuclear Regulatory Commis-I sion ," any caveats deemed necessary to cover the NRC objections. If the NRC objections cannot be covered in this manner , NRC can refuse to authorize publication in t the open literature and/or presentation of papers. Approved: MAY 3119N l 31
NRC Appendix 1102 Part IV PROCEDURES FOR PLACEMENT OF WORK WITH THE DEPARTMENT OF ENERGY In this case, NRC will inform DOE and' the contractor of the dec/- sion. The contractor is then free to publish without NRC identifice - I tion of the information. This will not affect payment of the contrac. work costs. appealed to the NRC Executive Director for Operations.NRC project ma If the author proposes to publish in the open literature or present the inforination at meetings in addition to submitting the required technical reports, approval of the pr6 posed article or presentation should be obtained from the NRC project manager. The NRC pro-ject manager shall either approve the material as submitted, approve it subject to NRC-suggested revisions, or disapprove it. La any event, an NRC project manager may disapprove or delay presenta-tion or publication of papers on information that is subject to Com-mission approval that has not been ruled upon or which has been disapproved. If the article or paper supports the NRC program or project, the NRC project manager may authorize payment of the page charges and/or travel costs from the obligated funds. If the NRC project of the article does not support the NRC project, the contractor w not be authorized to charge the costs to the obligated funds. This will not affect payment af the contract work costs. Authorization to publish in the open literature and present papGr ) in lieu of a formal report requires that the final draft (subsequenI to pe:er review) be submitted with completed form 426A to the NRC. , Division of Technical Information and Document Control (NRC/TIDC ) for processing for accession by the NRC Public Document Room a)t the time it is submitted to the journal. When the journal article is published, article by the draft must sending an be replaced with a copy of the journal NRC/TIDC. author's copy, properly identified, to Each journal article submission must be accompanied by the following statement,of contractor "The the submitted U.S. manuscript has been authored by a Government under contract number . license to publish or reproduce the published form of this co tion, or allow others to do so, for U,S. Govemment purposes." In . addition, the U.S. each article must carry the statement "Work supported by Interage Nuclear Regulatory Commission, Office of under Energy."ncy Agreement DOE 40-550-75 with the U.S. Department of All publishe'd claimer: . papers and articles must include the following dis-This soredreport by anwas prepared agency of theas an account of work spa /1-Neither the United States GovernamT. United States Government nor any agen i thereof, or any of their employees, makes any warranty, Approved: MAY 3194 32
)
NRC Appendix 1102 ! Part IV PROCEDURES FOR PLACEMENT OF WORK WITH THE DEPARTMENT OF ENERGY or assumeo any legal liability or k expressed or implied, third party's use or the results of i or pro-responsibility such use, for anyof any information, apparatus, product . cess disclosed in this report, or represents that its use by such The third party would not infringe privately owned rights. views expressed in this paper are not neces-sarily those of the U.S. Nuclear Regulatory Commission. If requested by the journal or other publisher to transfer the c ' right, the author shall respond to the journal or other publisher, in writing, in at:cordance with the sample letter shown in Fig I Presentations or publication in the open lite , l do not require NRC approval, Any l (c) Press release or _Other Media ol nonroutine informationReleases of Unclassified to the news media regarding In I being done for NRC shall be coordinated with the projectf mana who will consult with his/her management and the NRC ThisOffice o , Public Affairs with respect to ap oy telephone, with the NRC project ! arepriateness of the release. coordination Decisions not to may manager respcnsible for expeditious handling. ) may be appealed to the hRC Executive Dirl l l The content of fomal tech-(d) Content of Formal Technical Reports. , l nical reports should follow geGrally accepted technical writin ! practice, with appropriate flexibility "to meet the author's
, specific needs (see NUREG-0650, Guide"). l (i) Abstract - Periodic and final formal reports should incll l
1 l ' abstract the major of 200 words points of or the less. report results, recommendations l l 1 conclusions. For periodic reports, the abstract should o! ] l the status of the work to date. abstract is between the - i and the table of contents peige. j FIN Numbers - The pertine.nt NRC FIN number (s) and th . l (11) official FIN title (s) should be placed at the bottem of the , page. j If an executive summary is required. i (iii) Executive Summary The executive summary, l ! state this requirement in the SOW. l l labeled report as such, should appear as the fi i any. ' 1 (iv) Administrative and Fiscal Informatio They should infomation unsuitable for wide dissemination. j j 33 Approved: WW 3194
. -_ _ . _ _ _ . _ _ _ _ _ _ _ _ _ - _ _ _ __- _]
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY also not include proposals for further support, which are to be I submitted separately to protect their privacy. (v) References and Bibliographies - Do not use as reference or bibliographic material any document, personal communication or interview, letter, memorandum or other material that is. not publicly available in written fom in the'NRC or other govern-ment Public Document Room, in a public library, or available from the author. State such avadability for each entry or coucctively for all entries. See NRC "Technical Writing Style Guide," NUREG-0650, for additional infomation and examples. (vi) Bibliographic Data Sheet - NRC Fom 335 (Figure 7) shall be prepared and included in the report as the final right-hand page. (e) Unclassified Formal Reports Preparation and Handling. Formal re-ports will be printed for NRC distribution by those DOE facilities that have Joint Committee on Printing (JCP), U.S. Congress , authorized printing plants only if the work is being done for the Office of Nuclear Regulatory Research (RES). Reports prepared for NRC offices other than RES will be submitted as camera-ready copy for printing at NRC. The principal DOE facilities that perform work for RES and w) have JCP-authorized printing plants are: Ames Laboratory l ' Argonne National Laboratory Brookhaven National Laboratory I Grand Junction Office Hanford Atomic Products Operation Idaho National Engineering Laboratory Knolls Atomic Power Laboratory Lawrence Berkeley Laboratory Lawrence Livermore National Laboratory Los Alamos National Laboratory Mound Laboratory Oak Ridge National Laboratory (through K-25 plant) Sandia National Laboratories Savannah River Plant The text of reports must be single spaced on 81/2 x ll-in. paper. unless otherwise specificaUy authorized. Foldouts are permitted, when essential. OccasionaDy, reports with many symbols and mathe-matical expressions may require one and one-half spacing to provide for superscripts and subscripts. This spacing is allowed where needed, but should be considered an exception, not the standard. Printed copies or reproducible masters wiu be supplied in accor. dance with the following procedures: j Approved: MAY 31984 31
7_ _ PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1102 , WITH THE DEPARTMENT OF ENERGY Part IV v i i l (f) Unclassified Formal Reports Printed at DOE Facilities - The : l~ distribution quantity indicated in the statement of work or i supplied by NRC plus a reproducible master will be supplied to : l the NRC Division of Technical Information and Document Con-trol. When a report la printed for NRC, DOE procedures pre-j vail; however, the data elements shown in Figures 4, 5, and 6 will be incorporated in the printed version. See 18(g) for ; ! copies to be retained by the performing organization. . (ii) Unclassified Formal Reports Printed at NRC - Reproducible ] - masters (camera-ready copy) for printing and distribution are ; t i to be sent to the NRC Division of Technical Information and Document Control. The performing organis.ation may retain up lI prior to receiv- L to 25 duplicated copies rinted copies from NRC."for internal See use 18(g) only"for copies to be i ing suppged to the performing organization, i
- If publication is to be delayed by NRC to coordinate with NRC
! program office issuance, this is to be noted both on the NRC ! Tom 426A and the DOE Form 426. If the document is not to t j be reviewed by the NRC project manager prior to printing, t ! state this on the NRC Form 426A that accompanies the camera- ( 4 ready copy when it is sent to NRC Division of Technical Infor- < mation and Document Control.
! (iii) NRC Form 426A cnd DOE Form 426 - In all cases a Two completed copies e
i NRC Form 426A must accompany the formal report. ! ] of all paragraph (i) reports and a signed DOE Form 426 are to : 1 be sent to DOE TIC by the performMg organization. l The reproducible masters must be accompanied by NRC Form ! J 426A. If an official of the performing organization is authorized ; to sign the NRC Form 426A the name of that official will be j reported to the NRC Division of Technical Infomation and , 1 Document Control by the NRC project manager. l I il (f) Administrative Review of Reports. Patent and classification review l' l of au reports wiu be accomphshed by the cognizant DOE Operations Office , f l ; i i (g) Printing and Distribution of Unclassified Reports. All unclassified i I formal reports wiU be prepared in accordance with DOE standards l l for style and format, utilizing the performing organization's stan- : I dard cover, if any, with the data elements shown on Figure 4. and l i a title page with the data elements shown on Figure 6. These l reports are to be submitted to the NRC Division of Technical Infor- 1 mation and Document Control with a completed NRC Form 426A. ( ( l Up to 50 copies of unclassified formal reports may be retained by or i will be bulk shipper
- We performing organization by NRC for inter-i nal use of the pert Tanizstion. If fewer than 50 co es are
] needed, indicate t' "antity on NRC Forn 426A. If e per- , J forming organizati n e than 50 copies for internal use, a written justificatt * 'o the NRC project manager, with a j . Approved: gg 31 g 1__ . . - - _ - _ - - - - - - . . - . _ . - - - - _ - - . - . - . - 1
. - . - - _ . . - . - _ = , - - .- - - - - - - - - . .
l ' NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORE WITH THE DEPARTMENT OF ENERGY Part IV i i l copy to the Director, Division of Technical Information and Docu- ) ' ment Control. The Director, NRC/TIDC, wiu formally consider the request and inform the NRC project manager of the results. l ] ; i Single copies for specific individuals in or ranizations other than the i 1 performing organization who are not inclucid in the distribution list l stated in the SOW may be requested on a program basis or on a i basis . The request, with written justification, f l report-by-reportshall be addressed to the NRC pro;ect manager with a copy tolj TIDC. If the additional distribution is approved by the NRC pro- !
- Ject manager, the perfoming organization shall send these copies (
- (if printing is done by the performing organization) and address ;
labe,s for the individuals to NRC/TIDC, where the distribution will j be made along with the standard distribution. If printing is to be i I done by NRC, the labels should accompany the camera-ready copy. I The Division of Technical Infomation and Document Control will l i arrange automatic distribution of these reports to the NRC Docu- ! l ment Control System, the NRC Public Document Room, the National l Technical Infomation Service (NTIS), the Government Printing ! Office and the Depository Library Service. 4 , l AU unclassified technical lette'. reports that do not contain proprie-tary information, safeguards infomation or other sensitive unclassi-fled infomation will be made publicly available by the NRC project , manager by sending a copy to the NRC Public Document Each such Room report must I ; through the NRC Document Control System. be identified with the financial number (FIN) assigned to the projetf. l 7 Distribution of sensitive (unclassified) and classified reports win be : made by the NRC project manager on a case-by-case basis. Formal reports wiu l (h) Announcement of Unclassified Formal Reports. 3 be announced by the Government Printing Office and the National l 1 Technical Information Service (NTIS) and will be placed on sale by i j ! NTIS and by NRC (Superintendent of Documents consigned sales program). Reports containing patent and classified material, safe-guards or proprietary information, or cther sensitive unclassified ! { information will not be announced and win have limited distribution { 4 approved by the NRC project manager. I (i) Document Identification. Au femal reports will carry an NRC l ' identification number and a DOE identification number, with the NRC j identification as the prime number, as shown in Figures 4 and 6. The r j NUREG/CR-XXXX or NUREG/CP-XXXX identification number will be assigned by NRC/TIDC. Advance infomation regarding the number 3 is needed and it may be obtained by the performing (organization's 301) 492 8925 i pubucations group by cauing NRC/I'!DC. Commercial: l or 492-7566. FTS: Access Code + 492-8925 or 492-7566. , I - I Approved: MM 3194 36 l- _ _ _ _ _ _ _ _ _ _ _
NRC App:ndix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY (j) Transmittal of Unclassified Formal Technical Reports to NRC and ( The transmittal of all formal technical reports and repro-DOE. : Eble masters will be accompanied by an NRC Form 426A and DOE Form 426. Actual shipment of reproducible masters and NRC Form 426A to NRC shall be by first-class mail to the Division of Technical Information and Document Control at the following address: - United States Nuclear Regulatory Commission Division of Technical Information and Document Control Attn: Policy and Publications Management Branch Washington, DC 20555 Printed reports for NRC distribution shall be sent to NRC by express carrier to the following address: Division of Technical Infonnation and Document Control ^ NRC Distribution Contractor United States Nuclear Regulatory Commission 7300 Pearl Street Bethesda, MD 20814 Mark the outside of each box and the Bill of Lading with the NUREG/ CR number and number of copies in the box. Also indicate "inside delivery only." This address cannot be used for mailings. I (k) Preparation and Handling of Reports Containing Sensitive Unclassified , and Classified Information . Sensitive unclassified and classified reports must have one of the following markings: l Official Use Only
! Limited Official Use Proprietary Information Safeguards Informatfor Confidential ; Secret Top Secret I
The following paragraphs and the instructions given in the State- l ment of Work provide the information needed for proper preparation and handling of the various types of sensitive information ifsted above. Classified information (Confidential, Secret, and Top Secret) is prepared and handled in accordance with DOE security regula-tions, which are similar to those of NRC.
- (i) Official Use Only and Limited Official Use.Information l
Reports designated Official Use Only will contain only infoms-tion originated by or furnished to the DOE facility or con-tractor which is to be withheld from public disclosure under ! i the Freedorn of Infomati3n Act or the Privacy Act. l Official Use Only DOE facility or contractor reports on NRC 1
- work shall be marked as shown in Figures 8 through 10.
l 37 Approved: MAY S1 Y
\
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK WITH THE DEPARTMENT OF ENERGY Part IV Limited Official Use information is infomation originated by the U.S. Department of State. A report originated by a DOE facil-ity or DOE contractor for NRC that contains Limited Official Use information shall be marked as shown in Figures 11 through 13. : (ii) Proprietary Information Proprietary infomation is a specific type of Official Use Only infomation. Proprietary information includes:
- 1. trade secrets.
- 2. privileged or confidential research, development, commer-cial or financial infomation exempt from mandatory disclo- .
sure under 10 CFR Part 2, "Rules of Practice for Domestic Licensing Proceedings ," Sections 2.740 a,tdSection 2.790 and 9.5, "Public Records ," under 10 CFR Part 9 ;
"Exemption s . "
i
- 3. information submitted in confidence to NRC by a foreign source, which has been detemined by NRC to be unclassified.
Unclassified DOE facility or contractor reports containi:m i proprietary information shall be marked as shown in Figures through 18. In each instance, the optional wording describes the material being presented should be selected If a report contains both Official Use Only information and l proprietary information, the front cover shall be marked as preprietary information and may also be marked as Official Use Only information, if necessary. Pages in the report that con-accordingly, tain proprietary information may be marked l 1 includng marginal or other indication of the specific wording that is proprietary. Similarly, the pages that contain Offlefal Use Only :nformation without proprietary infomation may be - marked Official Use Only. A control cover sheet (Figure 19) must be placed on each hard copy of a report containing pro-j ~ prietary information. (iii) Safeguards Information " Safeguards Information may be of three types: (1) classified information, which is marked and handled in accordance with standard NRC and DOE classification procedures, (2) unclassi- i fied information protected under Section 147 of the Atomic j Energy Act, ;which is marked and handled as described in this , Section, and (3) unclassified information, which is publicly ' available and handled as described in Sec.18(a) through (j). ; The Safeguards Information that is to be protected as des ; l t i cribed here is unclassified information used in a report whicl. specifically identifies certain licensee's or applicant's detailed: Approved: 38
- NAY 311964 i
l
,-m . _ - _ _ - - - - . , - - . , _ - , , . ,. ---e- - - - - - - - - -a- -w+- - - - -
--- _.7
PROCEDURES FOR "I ACFMENT OF WORK NRC Appendix 1102 WITH THE DEF A,RT.9p'l QF ENERGY Part IV
- 1. i.e. city measures for the physical protection of special
- .aclear material, or l
- 2. security measures for the physical protection and location of certain plant equipment vital to the safety of produc-tion or utiltzation facilities.
Unclassified DOE facility or contractor reports containing Safe-guards Inforisation that is to be protected shall be marked as shown in Figures 20 through 22. A control sheet (Figure 13) must be placed on each hard copy of a report containing safeguards inforination when it is received or generated by DOE or DOE contractors. , (iv) Transmitting, Protecting, Handling, and Removing Restrictions l If it is known at the time of origination of the report that the sensitivity marking may be removed at a certain date or the occurrence of a certain event, place the following on the cover of the report: This report is removed from (sensitivity category) on (date) by (sirnature) . l In transmitting sensitive unclassified reports, except Limited Official Use and Safeguards Information, at least one sealed, opaque envelope or wrapper must be used that has no indica-tion of the contents. For Limited Official Use and Safeguards Inforination, two sealed envelopes or wrappers must be used when transmitting by U.S. Postal Service. First class mail, registered mail or an authorized messenger shall be used. These reports are to be sent directly to the project manager. Unattended documents must be stored to prevent unauthorized access. The procedures applicable to classified documents shall be used for tie destruction of sensitive documents. Sensitive documents must be protected from unauthorized dis-closure while being printed or reproduced. (1) Handling of Unclassified Information on NRC Cooperative Programs With Foreign Governments and Organizations and with U.S. Industry. The Nuclear Regulatory Commission has req uested that its offices establish , to the extent feasible, cooperat,ve nuclear safety re-search programs that involve either or both U.S. ir.dustry and for-eign governments and organizations. Such involvement includes monetary contributions, inforination exchange, and comments on pro-gram plans and results. This is authorised in 42 U.S.C. 5801. To
. this end, international and U.S. industry agreements have been signed that provide for transmitting unclassified information from NRC to participants. These procedures apply only to NRC-managed work not programmatically funded by DOE.
The interests of all NRC cooperative nuclear safety research pro-gram participants are served best by early, rapid dissemination for ___39 Approves: MY ll 94 _ _ _ _ _ _
--. _ - - _ = - - - - . _ - . _ - - _ - _ _.. _ . - _
1 4 , NRC Appendix 1102 PROCEDURES FOR PLACEMENT CF WORK Part IV WITH THE DEPARTMENT OF ENEAGY , 1 comment of inforisation on these programs developed for NRC by )l DOE facilities and contractors. ThJs can be accomplished by distri- l bution of "Draft Preliminary Reports (or Codes)" for comment for a- l specified period of time, followed by issue as formal NUREG/CR j - reports, with concurrence of the participants. Specific procedures ! I for accomplishing these goals and for transmitting information pre- i i pared by DOE facilities, contractors and subcontractors working on ! 1 these programs are presented in the following sections. The pro- !
- cedures detaDed here have been provided to the responsible DOE i Operations Offices and NRC project managers as guidance. l l (1) Preparation of Draft Preliminary Reports for Comment ]
r ~ The first issuance of information by a DOE facDity or contractor shall be designated "Draft Preliminary Report i (or Code)," and shall include the cover sheet shown in ! l Figure 24. [ The following notice is to be rinted on the bottom of the l j cover sheet (Figure 24), and it shall ng be modified in any way
; NOTICE THIS DRAFT PRELIMINARY REPORT IS ISSUED ONLY TO 3
- PARTICIPANTS IN THE DESIGNATED COOPERATIVE PROGRAM i This report was prepared in contemplation of l l Commission action. It has not received patent i
. review and may contain information received in '
l confidence. Therefore, the contents of this l report should neither be disclosed to others ! I, nor reproduced, wholly or partially, unless l written periaission to do so has been obtained i from the appropriate USNRC office. The recip- : lent is requested to take the necessary action ; to ensure the protection of this report. ! i l j This notice has been agreed to by the legal staffs of both NRC i i and DOE and is not to be added to or changed. Any problem i in this regard shall be brought to the attention of the NRC project manager, who will consult with the NRC legal staff. The "Draft Preliminary Report (or Code)" shall be submitted by l first class or express mail by the contractor to the NRC project managers with tse letter shown in Figure 25, in the number of copies specified by the project manager (in most instances this I wil be fewer than 20 copies). The DOE facility or contractor ; l may retain copies only for internal use. DOR facilities and ' i contractors and their subcontractors shall not distribute cople' ) i of this draft report to DOE / TIC. Draft reports may be distrit. > l uted to interested DOE program offices. Subsequent issue of ; the information shall also be designated "Draft Preliminary : l i 1 j Approved: GAY $194 40 {
NRC Appendix 1108 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY Report (or Code)" until the NRC project manager authorizes preparation of a NUREG/CR report.
"Draft Preliminary Reports .(or Codes)" shall not be identified as NUREG/CR reports or carry any contractor report number or NRC distribution codes. .
(ii) Distribution by NRC Project Managers The NRC project manager will distribute the copies only to (1) the participants in the program, (2) the NRC staff with a need to-how, and (3) others authorized by the NRC project manager. Transmittal to participants shall be by first cass or express mad, including air mail to foreign participants. If premium cost mad services are to be used, a Jivision Director or comparable or higher authority must certify to the need on NRC Forn 420 "Request for Premium Cost Mail Service." Premium cost mail is
- 1. Express Mail, Priority Mail (First Class weighing more than 12 ounces)
- 2. International Express Mail (Air Mail weighing more than l l
10 ounces) (iii) Comment Period and Issuance of NUREG/CR Report A minimum of six months will be allowed for comments and resolution of comments. At the end of the comment period, the NRC project manager will, with the concurrence of the participants, authorize the contractor to issue the information as a NUREG/CR report in accordance with the provisions of this Manual Chapter. (iv) Report Identifiers The "Draft Preliminary Reports (or Codes)" will be uniquely identified only by the Financial Identification Number (FIN) assigned by NRC and the appropriate periodic notation, if any, included in the title (Figure 24). They shall not be given standard report nomenclature until the NRC project man-ager authorizes publication as a NUREG/CR report. At that time , the contractor may add its own designation below the NUREG/CR number, as shown in Figures 4 and 6. (v) Malling to Program Participants The physical transmission of reports from NRC to program par-ticipants shall be handled by the Document Management Branch (DMB), Division of Technica' Information and Document Control (TIDC), based on address labels of participants supplied by the project manager. The transmittal sheet shown in Figure 26 shall be used to transmit the documents and the labels to DMB. 41 Approved: MAY $194
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY (vi) Security , If information included in the report (or code) has been deter-mined to be sensitive (unclassified) or classified (see Statement of Work) the procedures of Sec.18(k) also apply. The report (or code) may not be classified solely for the purpose of limit-ing distribution to the participants. i Approved: gay 31 W 42
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY Figure 1. SUGGESTED FORMAT FOR FINANCIAL INFORMATION TO BE INCLUDED IN MONTHLY LETTER STATUS REPORTS TO NRC , Current Year to Month Date j
!. Direct Staff Effort (months XLX of charged effort) XXX
!!. Direct Salaries $ XX $ XX '
Materials and Services XX LX XX XX ADP Support XX Subcontracts XX XX XX Travel XX XX Indirect Labor Cost XX Other (as needed) XX General and Administrative Expense XX XX Total Costs $ XX $ XX Percentage of available funds XX% I , I III. Funding Status: 1 Prior FY FY _* Projected FY _ Funds FY _ Funding i Carryover Fur. ding Level Rec'd to Date Bal. Needed 1
$ XX $ XX $ XX $ XX
*Use current fiscal year.
l i
, 1
- 1 43 Approved: NAY S194 I
NRC Appsndix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY . Figure 2 ; LICENSE FEE RECOVERY COST REPORT Pursuant to the provisions of NRC Regulation 10 CFR 170, provide the total amount for eachoftask funds expended (e.g., (costed) by facility during or report )thereport
, and period and on them cumulative to date a separate page as part of this report in the following fonnat: l FIN:
TITLE: PERIOD: Facility Identi- Costs Facility Name/ Docket / Report fication per Cumulative Costs Report Title Number Number
- Period This Fiscal Year ;
Task 1 1 Task NOTE: If there exists a task under this project that is relevant and common to several other tasks and the effort is required in order to pert _orm the reviews, the costs for the common effort must be prorated to each review to which it applies.
- Insert as applicable. The identification number may have different labels, such as TAC or Case Control Number.
1 i Approved: yay 31134 4
PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1102 WITH THE DEPARTMENT OF ENERGY Part IV ( FIGURE 3 l SAMPLE LETTER ON COPYRIGHT AGREEMENT l
Dear :
We recently received a document for signature assigning copyright and repub-lication rights in the submitted article (title) to (name of publication). This letter is offered in lieu of the document as a means of completing the transfer of ownership. Accordingly, we hereby expressly transfer and assign our rights of ownership in the above cited work to (name of publisher). You are advised, however, that the above assignment and any publication or republication of the above cited work is subject to the following Government rights: The submitted manuscript has been authored contractor (grantee) of the U .S . Government under contract by (agrant) No.
. Accordingly, the U.S. Government nas a nonexclusive, royalty-free license to publish or reproduce the published form of this contribution, or allow others to do so, for U.S. Government purposes.
In addition, each article which results from the placement of NRC work with DOE must state "Work supported by the'U.S. Nuclear Regulatory Commission, Office of under ' Interagency Agreement with the U.S. - Department of Energy." Sincerely , 1 i I 45 Approved: MAY 31 M
r NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK i Part IV WITH THE DEPARTMENT OF ENERGY FIGURE 4 I SAMPLE COVER FOR UNCLASSIFIED FORMAL CONTRACTOR REPORTS I i i l Contr R rt No. j j v . .. . . ,,. n .. . t l 9 l LOCA-Simulation Thermal-Shock Test of Sliding-Link Terminal Blocks . Type af Report Independent Verification Testing Program orsubent. Independent Verification Test 1 Authoe{s), E ditor(s) * 'T h,',,h ,4 H
% Egh 1A
- EN U M Corrector m m m,m SponsofthlP u me ,ventory i
Approved: May 31, 1984 46
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NRC Appendix 1103 PROCEDURES FOR PLACEMENT Of WORK Part IV WITH THE DEPARTMENT OF ENERGY FIGURE 6 1 J SAMPLE TITLE PAGE FOR UNCLASSIFIED FORMAL CONTRACTOR REPORTS NRC Report No. Contractor's Re; ort No. NUREGICR 1962 Vol., Part. Rev., etc. SAN 0414151 Distritpution R4 Category me LOCA-Simulation Thermal-Shock Test of Sliding-Link Terminal Blocks l Sutrtitle independent VenNsten Testing Program 1 inoegendent Ven5cauon Test 1 Roport Dstas a.w, usi l Author (s), Editor (s) , , , , 7, Conmetor , n ame ens w rou wg ; " R C * ""'*' *
- QQ t 3pg.-~ sn.em V,t"4t' T"a;3 **""""** 1 NRC FIN No. Nac nm asto1 i
( I l i 1 l Approved: RAY 31184 48 -
PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1102
- WITH THE DEPARTMENT OF ENERGY Part IV FIGURE 7 NRC FORM 335. BIBLIOGRAPHIC DATA SHEET L""O sieuoGRAM44C DATA SHEET
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s w;2nr .euma . tF emog ii ena u ps v .a 49 Approved: MAT Il 94 i _
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Approved: llAY S194 50 i I
PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1108 WITH THE DEPARTMENT OF ENERGY Part IV FIGURE 8 SAMPLE COVER FOR A CONTRACTOR REPORT CONTAINING OFFICIAL USE ONLY INFORMATION l OFFICIAL USE ONLY NUREGICR.XXXX (S) Tit e Subtitle and Type of Report C h " *'"'
.$ w4 lese Regulatory Commiselon w1TnMotD 840M Pveuc Or50tOSuma OFFICIAL USE ONLY 51 Approved: MAY 31 Y
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY l FIGURE 9 SAMPLE TITLE PAGE FOR A CONTRACTOR REPORT CONTAINING OFFICIAL USE ONLY INFORMATION l l ( OmCIAL USE ONLY NUREG/CR XXXX (S) i Title Subtree and Type of Report w w mi oss imwe.veut I g ew , w "g"${,IS.l.*E"****" QPP1CIAL USE ONLY i Approved: ggy 31184 52
.E.' .
PROCEDURES FOR PLACEMENT OF WORK NRC Appendix 1102 WITH THE DEPARTMENT OF ENERGY Part IV t FIGURE 10 SAMPLE BACK COVER FOR A CONTRACTOR REPORT CONTAINING OFFICIAL USE ONLY INFORMATION OFFICIAL USE ONLY l l l l l OMCIAL USE ONLY 53 Approved: MAY 31 W
NRC Appendix 1102 PROCEDURES FOR PLACEMENT OF WORK Part IV WITH THE DEPARTMENT OF ENERGY FIGURE 11
)
SAMPLE COVER FOR A CONTRACTOR REPORT CONTAINING LIMITED OFFICIAL USE INFORMATION i l UMfTED OFFICIAL USE i
)
NUREG/CR XXXX IS) Tite l l Subtitle and Type of Report gw.i l uNA n mm c .m l ute ew eveuc onnose UMITED OFFICIAL USE l 1 1 l Approved: MAY si W g
Form NRC 23 (1 75) I Published in advance of incorporation in Chapter 140_1 NRC Manual File and retain in Manual until superseded. UNITED STATES NUCLEAR REGULATORY COMMISSION NRC MANUAL BU LLETIN l l NO. 1401-1 DATE: October 29. 1930 l
SUBJECT:
CRITERIA FOR SELECTING THE DEPARTMENT OF ENERGY (DOE) AS A SOURCE FOR OBTAINING GOODS AND SERVICES UNDER 00E/NRC l MEMORANDUM OF UNDERSTANDING (M00) f I. Purcose This Bulletin establishes criteria for selecting the Department of Energy (DOE) as a source for obtaining goods and services under the DOE /NRC Memorandum of Understanding (MOU) dated February 24, 1978. NRC Form 367, (Exhibit A), "DOE Source Selection Justification",will be used to document and approve the bases for selecting DOE and will become part of the permanent record file. II. Scope This Bulletin applies to all offices including boards, panels, and committees of the NRC. The provisions contained herein: A. Supersede the instructions contained in the Executive Director for Operations memo of December 28,1979, "Source Selection Criteria for Project Placenent."
- 8. Are applicable to obtaining all goods, consulting and other services excepting Mjudicatory services. / hrought the DOE /NRC WU under any NRC budget object class. (Reference NRC Chapter 4139 "Utilization of Consultants and Members" and NRC Chapter 1102,"Procedure for Placement of Work with the Department of Energy")
1/
~ The Commission has statutory authority to appoint members to the /itomic Safety and Licensing Board Panel and its boards, the Advisory Committee on Reactor Safeguards, or any other hearing boards the Commission may establish.
Under this authority the appointees may come from private life, the Commission staff or any other federal agency according to such technical or other qualifications as the Commission deems appropriate and necessary.
2-C. Do not apply to procurements of goods and services amounting to less : than $10,000. , D. Are not retroactive prior to the date of this Bulletin. III. Policy It is the policy of the NRC to acquire outside assistance from the most accropriate source considering overall perfomance and cost factors. The procecures and documentation required herein will assist in the ! unifom application of this policy throughout the NRC and provide for ' documentation of the justification for placement of work with 00E. According to NRC Bulletin 5105-1 dated June 29,1979, "NRC Instructions ! for Imolementing OMB Circular A-76; Policies for Acquiring Commercial or ! Industrial Products and Services Needed by the Govegment," the provisions of A-76 do not apply to Goverment-Owned, Contractor-Operated (GOCO) , activities. Per NRC/00E MOU, the work authorization will be reviewed by t the DOE Operations Office, after obtaining 00E Headquarters approval as . necessary, in light of existing resource commitments and adequate contractor - resources. Use of excess capacity is an allowable exception to OMB Circular A-76. , IV. Resconsibility and Authority i The project managerl/ or his designee shall complete Items 1 threugl 6 of i NRC Fem 367, "00E Source Selection Justification," for all new projects. When intemediate approval within an office is necessary, the Office Director ; shall determine the level (branch chief, assistant director, division director) ! for approval (Itan 7) of the bases for selection. l The Office Director or his designee shall be the final office approval authority for approving 00E as an acceptable source for goods and services based upon the justification being provided. Approval will be given by signing in block 8 of the NRC Form 367. , j Source justification should be reviewed by the project manager and the program support staff when modifications are made to the original scope of wort or new tasks outside of the original scope are added to the project.1/ A new justification should be prepared when, in the judgme'it of the i project manager and the program support staff, a modifica'. ion to the ! original statement of wort is made that wculd warrant corsideration of a new source. 2/ . ~ A title used herein referencing the individual assigned the responsibility for overall management of a specific acquisition of goods and services under a Financial Identification Numoer (FIN). Offices may use other designations. 3/ ~ A croject is defined for purposes herein as a specific acquisition of goods and I services *nica has been assigned a unique Financial Identification Numcer 8 (FIN) and whien satisfies the attaiment of either a single or homogenecus gr0up of objectives.
V. Basic Requirements The following are the selection factors to be used along with past perfomance to justify the placement of work with the DOE: A. Internal governmental functions: Where the work by its inherent nature should be perfomed by the federal government. B. Objectivity: (1) To avoid conflict of interest. This factor applies when objectivity demands tha'. we use another government agency to avoid a real or apparent conflict of Interest with commercial sources. (2) To engage in intentional duplication. Some projects are intentionally duplicated to draw upon independent, impartial expertise to verify results previously obtained. C. Facilities: (1) To capitalize on available facilities. When a unique facility is needed, already exists and is available, ( , full use of the existing resources should be made. (2) When large and/or special facilities and special equipment are needed to accornplish the work and it is in the best interest of the NRC to place such work ; with DOE. 1 1 (3) When the success of the work objectives is critically i dependent upon the use of a DOE facility ano its equipment. D. Continuation, unique technical background (s), and combinations of I disciplines: (1) When continuation of work previously perfomed by an agency is a prerequisite and it would not be in the best interest of the government to bring a commercial entity to the point where perfonnance of the new effort is possible. (2) When the desired technical background or knowledge currently exists in only one place and to go elsewhere z would impede accomplishment of the task in a reasonable manner or time frame.
(3) When a . ' ator ' -
' or W ssionai skills r- 1i 91 ., c , J :nce t -
' 4ts },
requi red su t'ndeh.d. (4) Where closely-assocL' ,5a
- ject area provide the necessaij y.? fic Acement of the new work or work . .
N rt the tati is a logical extension. E. Timing: This factor may be critical if the project resuit. _re needed within a time frame which would not pemit the solicitation and award of a contract. This supposes that the DOE can caet the needed date through interagency tasking. When practical, planning for research and technical assistance should be accomplished sufficiently in advance to allow for the time lags associated with the ccnpetitive bidding process. (1) When werk must be finished by a certain date &s mandated by the Congress, the Commission or by critical circumstances not able to be met by the com.ercial sector. (2) When the goverment would be seriously, financially or otherw12e injured if service (s) or product (s) were not furnished by a certain time. F. DOE / subcontract involvement: Where there is need for the involvement of both the DOE and a commercial fim, interagency tasking coupled with subcontracting by the DOE may be used. However, "pass thrcugh contracting' to bypass the federal procurement process is prohibited. G. Work entails use of copyrights, patents, or proprietary infomation: When one or a combination cf these factors are essential to the accomplishment of the work and where the requirement cannot be revised to pemit competition and open disclosure in the commercial sector. V!. Documentation l A copy of the NRC Fom 367 recording the placement decision and any required project descriptive summary shall be: l i Filed in the project file maintained by the issuing office. l Provided to NRC project review groups upon request. (a .
- s, v.. N s
William J. Dircks Executive Director for Operations
ow nec.ss - n.n; Published in adesnoe of incorporation in NRC Manuel 1401-2 Fib arti retain in Manual until supeneded. UNITED STATES NUCLEAR REGULATORY COMMIS$10N NRC MANUAL BULLETIN NO. 1401-2 DATE: February 23, 1983
SUBJECT:
Revisions to Project Management Responsibility for Goods or Technical and Research Services Ac Memorandum of Understanding (MOU) quired Under DOE /NRC This bulletin revises the responsibilities and authorities of Project Managers contained in this chapter as a result of new procedures for the management of property acquired under the DOE /NRC Memorandum of Understanding (MOU). Section V, Paragraph C.2.c:
- 1. Delete item (4)
- 2. Add as item (4) - Certify the Property Reporting and Certification Report submitted by DOE and return to the appropriate program support staff (As required in Bulletin 1102-24,!!!,D1).
Renaid M. Controller '
Enclosure 2 ' 2/25/88 ACTIONS TAKEN BY ARM REGARDING RECOMMENDATION 11 0F OIA's REPORT ON IE's 05E OF TECHNICAL AS5ISTANCE 1 (REFER TO WIT 5 870094)
- 1. Action In cocrdination with the program offices, develop procedures to ensure that DOE records of MOU Property are obtained periodically and maintained ,
for review by project managers. Status Coglete. Procedures have been developed in coordination with the Program Support staff of the major prcgram offices to ensure that DOE - records of MOU Property are obtained periodically and maintained for review by project managers. These procedures will be i@lented by the enciesed Manual Chapter Bulletins.
- 2. Action -
Circulate property listings and provide guidance to'the major program offices on acquiring MOV Property assigned to projects being terminated. ; Status Complete. The enclosed Bulletins will implement the procedures for ' circulating property listings and provide guidance to program offices on l acquiring MOU Property.
- 3. Action i
Revise Manual Chapters 1102 and 1401 to estaolish ressensibilities and actions needed to assure NRC exercises its 'first rigit of refusal" over MOV Property. Status Coeplete. Certain of the procedure changes the staff is recomending to l assure that NRC exercises its 'first right of refusal" over MOU Property involve obtaining new information from the 00E. The Division of Budget and Analysis and the Division of Facilities and Operations Support staffs have met with DOE and reached agreerent for this new ir/ormation. The l enclosed Manual Chapter Bulletins 1102 ard 1401 include this change and i establish other respensibilities and actions to assure HRC exercises its "first right of refusal' over MOU property.
- 4. Action Modify project manager training to reflect revised MOU property management responsibilities.
.? I l
l l
2 Status f Complete. Upon issuance of the Bulletins OP will incorporate the changes in all future training sessions of Acquisition for Project Manacers. The changes will be accomplished in time for the next training class scheduled for March 28.
Perm N?.C 23 117sl Publidied in advance.of incorporation in ( Chapter 1401 NRC Manual File and retain in Manual until superseded. UNITED STATES NUCLEAR REGULATORY COMMISSION NRC MANUAL. BU LLETIN . NO. 1401-2 DATE: October 29, 1980
SUBJECT:
PROJECT MANAGEMENT RESPONS!BILITY FOR GOODS OR TECHNICAL AND RESEARCH SERVICES ACQUIRED UNDER 00E/NRC MEMORANDUM OF UfGERSTANDING (MOV)
- 1. Purpose This Bulletin requires that an individual be assigned the responsibility for the overall management of a specific acquisition of goods or technical and research services under the DOE /NRC hemorandum of Understanding (MOU) dated Februa ry 24,1978. This individual will be referre, to herein as the Project Manager, although another suitable designation may be used at the discretion of the Office Director. The responsibilities and duties of the Project Manager, along with suggested qualifications, are described herein.
!!. Scope This Bulletin applies to all Offices including Boards, Panels, and Commi ttees of the NRC. The provisions contained herein apply to the l management of NRC work conducted under the DOE /NRC POV.
!!!. Definition i
A Project Manager is responsible for managing a definable, programmtic l effort referred to in this Bulletin as a project i.e., a specific
. acquisition of goods or technical and research services which is assigned a unique Financial Identification Number (FIN), and which satisfies the attainment of either a single or a hornogeneous group of objectives.
- Project management responsibility may be assigned to line or staff 1 personnel .
1
I i Furthemore, the Droject Manager a.4y be support.c by others in carrying. ! out nis(her) assigned responsluilitiec. sucn as a Technical .ionitor. Office and Division-level support personnel, or the Controller's staff. ' However, the Projuct Manager is responsible for the,overall managenent and adn.inistration of a given project (F!li). f
.. t IV. Polic) t
- It is the policy of the NRC that the acquisition of goods or services l fron cutside sources, including 00E, ce managea effectively. To t achieve tnis objective, all aspects of such an acquisition, incluain9 tiin i
). ::rugrammatic, financial, and adrainistrative details will be actively l managed within the WC office responsicle for issuing tne Standard Ordar , for COE Work (SCEW) (tJC Fona 173). Primary
- responsibility for the management of each acquisition resides with the Project Manager.
j 1 Personnel selectea to manage and monitor outside work should possess 1 the requisite qualificatiens of a nianager, i.e., ability to plan, ; direct, cecaunicato and control, or should be able to obtain the required
- training for development of these skills as soon as practicable. When i projects are assigned, consideration will be given to the time necessary l for managing the project, to the complexity and/or cost of tne project, i to the amount uf NP.C effort necessary to bring about its successful !
completion, anc ne technical knowledge required. l V. Resconsibilities anc Authorities '! A. General ! The Office Director has ultimate responsibility for the management ' and appropriate expenditure of agency funds allocated to the Office i for 00E work. The Office Director and interposed managers, ! if any, are responsible for: l, f 4 1. Ensuring that indiviauals designated as Project Manager i j meet the criteria expressed in the Policy stated in i j Part IV; ! a I Ensuring that the Project Manager is properly trained to j l perform his(her) duties; and ! I
- 3. Ensuring tnat sufficient time is allowed to the Project !
! Manager, and tr.ose designed to support him(her), to l
! perfona their required duties. -
l l 1 i l 2 !
- l'
- l 1 ;
l .-
3-i
- 3. Office Director or Designees: The Office Director may perfont. or may delegate the following in writing to specific designees other than to the Project Manager:
- 1. Review the performance of the Project Manager ano provide necessary guidance to ensure that the financial, administrative and technical aspects of the project are being adequately controlled and the objectives are met,
- 2. Provide final approval authority over project initiation, modification and tennination at a n.anagement level sufficient j to provide for proper checks and balances. Approvals to use consultants uncer NRC Manual Chapter '
4139, Section 033.b..are excepted fran delegation.
- 3. Provide final review and approval of cost vouchers (SF 10el) to the Division of Accounting. .
I C. Project Manager
- 1. The Project Manager has overall responsibility for management of the DOE work order assigned him. As such he:
- a. Has the responsibility to keep apprised of and adhere to l l the provisions of applicable manual chapters, particularly in Part 1400 "Program .%anagement," Manual Chapter 1102, l "Procedures for Placement of Work with DOE,'" and Manual Chapter 2101, "NRC Security Program," as related to classified or potentially classified contracts,
- b. Will plan, initiate, control and recomnend modification of work orders placed with the DOE in accordance with approved project objectives;
- c. Will recommend approval or disapproval of cost vouchers and return theni to the Division of Accounting, via Office review channels, within five workdays after receipt,
- d. Will approve final acceptance of the DOE work order product, including those instances when technical responsibility has been redelegated to another person; and
- e. Will initiate closeout action pranptly af ter completion of the DOE work order.
e 7.
4
- 2. Specific duties of the Project Manager are outlined below. I Although some of these may be redelegated, the Project Manager retains overall responsibility. l
- a. Planning and Implementing:
(1) Review "Criteria for Selecting the Departmen't of Energy ; (00E) as a Source for Obtaining Goods and Services Under DUE/NRC Femorandum of Understanding (MOU)," Bulletin ! 1401-1. (To be Chapter 1401). Complete NRC Fem 367,"00E Source Selection Justification", for all projects over - 510,000. Complete the Project Descriptive Summary for any review authority such as the conunission, E00 Senior Contract Review Coard, STAR or Waste Management Review : Group; " l (2) Prepare the statement of work (see Manual Chapter 1102, Exhibit 1); , (3) Initiate the Request for Proposal package in accordance with Manual Chapter 1102, obtaining necessary concurrences from other NRC offices; ( 4) Reviaw and evaluate the proposal, including technical, ! schedule and cost aspects (etnsidering evaluations of previous work, perfomance and cost history) and assist '
, in any necessary negotiations,
( 5) Obtain or coordinate NRC approval of any facility baseline designs or long-tem baseline schedules and costs; ( 6) Initiate the NRC Fom 173 Standard Order of DOE Work (50EW) and necessary enclosures in accordance with M6ual Chapter 1102. Obtain all necessary technical, cost ; and schedule data including that needed on the monthly status reports, as a requirement of the NRC Fom 173; and ( 7) Approve or coordinate any master program plans or i project management plans prepared to chart the project completion.
- b. Executing the work order:
(1) Monitor and control technical perfomance and schedule, including: l (4) Function as the primary point of contact with the perfoming organizations on all project j matters; h (b) Provide all direction te the perfoming , organizations tnecugh proper NRC/00E authorities and enannels including tecnnic.al instrvctions.
.L.
These technical instructions shall not constitute [ new work assignments or enanges which will result 5 in adjustments of cost or period of performance; (c) Ensure compliance with work order terms and conditions (See Manual Chapter 1102, Exhibit 4), (d) Review regular, special and monthly letter status reports and any other control cocuments generated by the perfoming organization, (e) Assess progress against milestones established in the 50EW including project tasks, experimental tests or facility construction; (f) Recommend changes in requirements, if any, and initiate any modifications to the original SOEW; (g) Perform any necessary technical evaluation of all phases of work; (h) Provide guidance to the perfoming organization in the resolution of technical problems, (1) Recommend and initiate any stop work orders or teminations if the project is not expected to be completed in a timely ano successful manner, or a stop work order is in the best interest of the NRC; (j) Ensure that all required technical reports are , submitted on schedule and disseminated to other l offices as necessary; and ; 1 (k) Ensure that technical results receive appropriate review. (2) Honitor cost, schedule, perfomance, including: (a) Review financial projections and spending rate to assure the required work can be accomplished within the allotted funds, (b) Review perfoming organization purchases for confomance with NRC policy (e.g., computers or other equipment) and service subcontracts for any cost impacts. (c) Evaluate the monthly letter status reports and l compare reported costs against technical progress; ( (d) Review reported elenents of cost and recomnend l cost saving measures; l
5-(e) Serve on any agency change coritrol board for the the project. (f) Prepare interim cost and technical evaluation reports when requireo, .- (g) Review and sign voucher billing (SF 1081) transaittal memorandum unless: costs and work reporteo for the payment period do not appear to be within the parameters of the 50EW, or a discrepancy is found between the billing and the work performed and costs reported in the corresponding period's monthly letter status repor* (or other status report), or reasonableness of costs cannot be confirmed. Resolve any discrepa'n'cies if possible, or cite the problem (s) with recommendations for solutions on the transmittal memorandum, and (h) Vouchers and the Project Manager's recommendation will be reviewed and approved by the Office Director's designee (other than Project Manager) or the program office support staff. If a discrepancy was not resolved by the Project Manager and cannot be resolved, return the voucher (s) with a written explanation within five work days after receipt to , the Division of Accounting. . l (3) Maintaining records: (a) Ensure that required documents are filed in the office project file and furnish appropriate copies to other interested offices, (b) Ensure the proper classification of any National Security Information (NS!) or Restricted Data (RO) ; generated under the project, t (c) Ensure that all project documents are placed in the Public Document Room in accordance with NRC Appendix 3203, Part !!!, "Guidelines for the Distribution of Unclassified Nonproprietary Documents to the Public Occument Room," and when not prohibited by security requirements; and (d) Ensure that interim and final reports are submitted in accoroance with NRC Manual Chapter 1102. i
(4) Limitations on Project hanager's Authority: (a) Technical direction rendered must be consistent with scope of work set forth in the statenent of work; (b) Direction must not constitute new assiinment of work or changes to the scope or expressed tems, conditions, or specifications incorporated into the current statement of work, (c) Direction must not constitute a basis for an i unauthorized extension of the period of perfomance, or de. livery schedule, or for any increase ' in the cost. Changes exceeding these limitations will be provided through a new SOEW (NRC Fom 173) to the DOE Operations Office, (d) Direction will be provided to the DOE laboratory via the appropriate DOE Operations Office when rquired by 00E; and (e) Limitations do not apply to adjuoication processes of the ASLBP/ASLAP that are covered by dockets, cases, or directed studies.
- c. Assessing perfomance and closecut:
(1 ) Evaluate and document the perfoming organization's perfomance to include the technical, schedule and cost aspects of the 50EW. The evaluation is not made when it conflicts with statutory privileges provided under law to Board and Panel members, (2) Upon acceptance of a final deliverable, including that of all Offices requesting the work, sign the final voucher transmittal meniorandum authorizing oayment and forward it through office channels to the Division of Accounting; l (3) Ensure that results of the project (including TIDC docui.. ant requirements and NRC Foms 4264 and 335) are disseminateu to various users in accordance with NRC Manual Chapter 1102 ano are consistent with any security limitations, 1 (4) Notify the NRC Property and Supply Branch, ADM, thirty days prior to contract completion in order to ensure t proper accounting and di: position of all goverment property acquired with project funds, i i l l i i _ _ _ . . _ _ _ _ _ _ , _ _ _ _ _ - - - - - - - - - ' - - - ~ ~ - - ' - ~ ~ ' ~ - - ' ' - - ~ ~ ' ~ ~ ~ - " ' ~ ' ~ ~" '
l
. s.
'fl (5) Ensure that data and records generated in performance of the project by the laboratory and/or the sub-contractors are properly disposed of, and (6) Provide decommissioning and/or closecut plans for l construction or operation projects. l b
. en
.( Q.~ [ l William J. Dircks !
Executive Director for Operations ! i I [ i f i i l t
~ ,
. i l
O
Form NRC 23 (1 758
- t Published in advance of incorporation in Chapter 1401 NRC Manual File and retain in Manual until supmeded.
UNITED STATES NUCLEAR REGULATORY COMMISSION NRC MANUAL f BU LLETIN NO. 1401-3 DATE: October 29, 1980
SUBJECT:
STANDARD NRC FILE SYSTEM FOR RECORDS OF WORK PERFORMED UNDER DOE /NRC MEMORANDUM OF UNDERSTANDING (MOU) ;
!. Purpose .
This Bulletin establishes an Office Project File for maintaining administrative documents and records pertinent to work perfomed by DOE under the DOE /NRC Memorandum of Understanding (MOU) dated February 24, 1978. The file contents and procedures for its maintenance are described. II. Scope A. This Bulletin applies to all Offices including Boards, Panels, and Committees of the NRC. The provisions contained herein:
- 1. Prescribe the minimum infomation which must be retained in the Office Project File;
- 2. May be supplemented or amplified to meet individual needs and practices; and i 3. Supplement the instructions contained in NRC Manual Chapters 1102 and 0240 which require that certain documents be sent to the Divisions of Accounting Budget. Security and Technical Infomation and Document Control.
B. This Bulletin does not include provisions for technical documentation. Maintenance of techn1 cal documents, e.g. , fomal and interim technical reports, is the responsibility of the NRC Document Control System (see NRC Manual Chapters 1102 and 3202).
2-8Z1. Definiyion I The Office Project File is that group of records maintained by the Office funding work perfomed under the DOE /NRC NOU. The file will contain the documents, memos, and references which are administrative in nature and pertinent to a project. A project is a speciffe acquisition of goods or services which has been assigned a unique Financi'il Mantification Number (FIN) and which satisfies the attainment of an ob# d ive(s). 8V . Policy It is the policy of the NRC that all programmtk endeavors are properly 4 documented in accordance with approved Federal Record Schedules and that a complete record is maintained for each project perfomed under the DOE /NRC Memorandum of Understar11ng. V. Resconsibility The Project Manager is responsible for ensuring that all pertinent ' administrative infomation describing the projects for which he is responsible, from the point of initiation through final closecut action, is provided to the Office Project File. The Office Director shall designate in writing the organizational location and the individual responsible for maintaining the Office Project File. These designations shall be provided to the NRC Records Officer. Files ' will be available for review by appropriate individuals at any time. V8. Basic Recuirements The Office Project Files will include all administrative documentation generated in the planning, execution, administration, and closecut of a i project. The following components and sections are to be used as a guide in establishing and maintaining the files. The listed components will be I included in the file if they are generated in support of the project. Each i project file will contain the Project File Identification Fom, Exhibit 1 ' to identify the responsible Project Manager and the organization of the file cceponents. If all the documentation associated with a particular project , i is not maintained in one location, the Project File Identification Fom will I
- then record the organization responsible for those components maintained I elsewhere. A separate file folder for each FIN will be maintained in each of the locations where the various elements of the file are stored.
Office Project File Sections and Contents l Section 1 - Project Background
- Project Descriptive Summaries
- Project briefs or other identifying documentation
- User request letters g
- Response letters Encorsement letters
- 00E Source Selection Justification, NRC Fom 367 Memorandum recording review group appraisal
I { l Section 2 - General Correspondence - ]
- Memos on meetings, telephone conversations, decisions, etc.
- Correspondence (interagency or interoffice)
- Miscellaneous pertinent documentary Section 3 - Proposal Infomation
- Statement of Work ,
- Requests for Proposal
- Proposals (Schedule 189s) l
- Proposal evaluation memoranda
- Other appropriate proposal documentary
- Other Manual Chapter 4139, "Utilization of Consultants and Members" appropriate documentary Section 4 - Program Execution
- Initial NRC Fom 173s and attachments, including any documentary (Foms 189 or others) that refines or augments the tems and
/ ' conditions of the project Statement of Work
- Concurrence page of transmittal memorandum j
- Security / Classification (NRC Fom 187)
Subcontract infomation 4 i - Program modifications (Fom 173s and attachments) ! i
- Program closeout (Fom 173s and attachments)
) - Property acquisition records
- Disposal of property report (from Property and Supply Branch, ADM) ,
- Disposition of NRC-owned documentation generated at 00E work l center l
- Disposition / protection of proprietary infomation Section 5 - Program Monitoring [
- Monthly / quarterly letter status reports
> - Task and subtask reports ; i - Review reports L
- Perfoming organization perfomance evaluation ;
1 - NRC Fom 426a, "Publications Release for Unclassified NRC Contractor l and Consultant Reports" ; 1 Section 6 - Funding Infomation j i
- Voucher log l
- SF 1081 vouchers
+ l - Project reprogramming documentation !
- 90". funding notification
- Final closecut voucher i
4 VI. , Retention of Files ) lhe Office Project File will be maintained for the active period of the Financial Identincation Number (FIN). Upon closecut, the file will be furwarded to the NRC Records Officer for disposition in accordance with tre provisions of the U. S. General Records Scheduler. and the NRC Comprehensive Schedule. V!!. g lementation This Bulletin is effective imediately for all offices. An implementation schedule for the Office of Nuclear Regulatory Res,earch is as follows:
- 1. All new FY 198100E program starts will be filed in accordance with the Bulletin. A system should be established by January 31, 1981; 2.
Newly generated documents associated with FY 1931 funding of continuing FINS will be phased into the filing system. these documents will be completed by October 1,1981; andFiles containing
- 3. i>reviously generated documentation associated with continuing FINS will Octoberbe incorporated, 1,1982. if available, into the filing system by l l l i
. )
( . g (.i.:n' '
. '. . t v William J. Dircks Executive Director for Operations '
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Fem NRC<89 1176) U. 5. NUCLE AR REGULATORY COMMIS$lON J NRC MANUAL 1 TRAN5MITTAL NOTICE CHAPTER NRC-5101 NRC ACQUISITION OF SUPPLIES AND SERVICES SUPERSEDED: TRAN5MITTED: Number Date Number Date TN 5100-10 Chapter NRC-5101 8/13/80 Chapter NRC-5101 4/20/88 Page NRC Bulletins 5/11/82 Pay M o i-3. Slo h 12/4/87 5101-7 3/11/88_ , Appndia NRC-5101 8/13/80 AMwndia NRC-5101 4/20/88 REMARKS: This chapter and appendix are revised to include the following changes:
- 1. Change of title of chapter.
- 2. Revision of contracting procedurec and terminology to be consistent with the Federal Acquisition Regulation (which replaced the Federal Procurement Regulations effective April 1, 1984) and the Competition in Contracting Act (CICA) of 1984.
- 3. Incorporation of information in three NRC Bulletins into chapter.
- 4. Streamlining of competitive procurement procedures to allow '
for (a) use of the Broad Agency Announcement (BAA) and (b) uce of a single technical member of the Source Evaluatio.1 Panel (SEP) in certain procurements. a I i
1 1 ! f
- U.S. NUCLEAR REGULATORY COMMISSION ,
NRC MANUAL i i Volume: 5000 Procurement and Property Management i Part : 5100 Procurement ARM ; CHAPTER 5101 NRC ACQUISITION OF SUPPLIES AND SERVICES I 5101-01 COVERAGE ' i This chapter and appendix define the objectives, responsibilities and authort- ~ ) ties, basic requirements, and procedures governing the acquisition of supplies and services. ; l 5101 02 OBJECTIVES . 021 To set forth the responsibilities and authorities of the primary , participants in the NRC contracting and acq'Jisition process. j i 022 To se6 forth the basic requirements of the major acquisition meth-ods utilized by the NRC in obtaining supplies and services. 5101 03 RESPONSIBILITIES AND ALTHORITIES i 2 031 Directors of Offices: i
- l I
- a. Submit to the Director, Division of Contracts, the annual Fiscal i i
Year Office Procurement Plan and semlannual updates thereto, 1 Procedures for the development and maintenance of the annual j procurement plan (APP) are discussed in Part ill of NRC Appendix i j 5101. ; l
! b. Relative to specific requirements, shall function as the designat-
' ing official (DO). In this capacity, the director of an office or the director's designee shall: s 1 (1) ensure that all Requests for Procurement Action (RFPA) to i be submitted to the Division of Contracts are complete, i.e., that all applicable attachments have betn included with the j j RFPA and that necessary funds have been certified available, , t 1 (2) sign all RFPAs. J (3) for competitive negotiated requirements, be responsible for l
) the development of the solicitation package (jointly with the contracting officer (CO)), the evaluation of offers received
, in response to the solicitation, and the recommendation for ( 1 Approved: April 20,1988 i i
NRC ACQUISITION OF N R C-5101 -032 SUPPLIES AND SERVICES award. These responsibilities are accomplished through the I appointment of source evaluation panels (SEPs) discussed in more detall in Part 111 of NRC Appendix 5101. 032 The Director, Office of Administration and Resources Management, de-velops and directs policies and programs for contracting and procurement services in coordination with affected program offices and serves as the agency's Procurement Executive. 033 The Office of The General Counsel:
- a. As requested by the CO, provides a review of the solicitation l package and the contract for legal sufficiency.
l
- b. As requested by the CO, provides legal advice to the SEP, the DO i and/or the CO.
034 The Director, Division of Contracts: I
- a. in coordination with affected program offices, develops and imple-ments agency-wide contracting policies and procedures relating to the are.as of coverage of this chapter and appendix.
- b. Provides advice to NRC program officials relative to the applic.a-bility of this chapter and appendix to specific requirements,
- c. Directs and coordinates the acquisition of supplies and services, including negotiation, contractor selection, contract administration, and closeout. These responsibilities are accomplished personally or through the appointment of contracting officers,
- d. Serves as the agency's Competition Advocate, responsible for challenging barriers to and promoting full and open competition in the agency's procurements.
035 The Director, Division of Facilities and Operations Support:
- a. Serves as requisitioning officer for certain small purchases requisitioned on NRC Form 34 to assure that supplies / equipment /
services, or suitable substitutes, are not available for issue from within NRC before acquisition action is initiated. See also Chap-ter N RC-5201,
- b. Directs and administers the NRC personal property management pro-gram and is the recipient of reports prepared by the Division of Contracts on acquisition and disposition of NRC-owned or leased personal property.
5101-04 DEFINITIONS 041 Advance Procurement Plannino. Actions with respect to a specific requirement which are undertaken prior to the submission of a Request for Approved: April 20,1988
1 NRC ACQUISITION OF SUPPLIES AND SERVICES N R C-5101 -042 4 Procurement Action. Guidance for preparation of advance procurement plans is , set forth in Part til to this Appendix. !
- 042 Contractino Officer (CO), Contracting officers, acting within the l Scope of their appo ntments, are the exclusive agents of the NRC to enter ,
into and administer contracts on behalf of the NRC. They shall ensure that all applicable requirements of law, executive orders, regulations, and all other applicable procedures have been met prior to the execution of any , ! contract or any modification of an existing contract. ' i 043 Contract S?ecialist (includes contract Negotiator and Contract Admin- ! I istrator). The indiv dual assigned by "the contracting officer to be responsi- , i ble for the processing of an RFPA. 9 the procurement action requires ,
- the appointment of an SEP, the contract specialist serves as the panel's ;
] secretary, in this capacity, the specialist performs a number of administra-l tive duties and, more significantly, provides guidance to the SEP on facets j of the procurement process. The contract specialist is responsible for the iegotiation and administration of the contract. i I i 044 Project Officer. The contracting officer frequently authorizes a i
, "fied NRC employee to accomplish specified contract administration func-I ,n (such as inspection and acceptance of contract deliverables) which are >
l the i .sponsibility of the contracting officer. The NRC employee so designated ! j is referred to as the project officer. The contracting officer's designation [ of the project officer and the scope of the project officer's appointment , i shall be in writing. Normally, the NRC employee to be designated as the ! project officer shall ba nominated by the program office. ! I 045 Deslonating Official (00), in the context of the contracting l j process, the NRC official responsible for the development of the solicitation t i package (jointly with the CO), the conduct of a technical evaluation of offers or bids received in response to the solicitation, and the development l of a recommendation for award. These responsibilities are met through the ! ) appointment of a source evaluation panel (SEP) and the independent review and i j evaluation of the SEP's two primary products
- i
- a. The Competitive Range Recommendation Report
] b. The Final Evaluation Recommendation Report ! ! The products referenced in a. and b. are forwarded to the Contracting Officer I i witn the DO's approval or are rejected and returned to the SEP. In the latter
]
1 c *, s e , the . Designating Official's rejection letter as well as SEP changes to ) 1 *he report must be part of the evaluation report forwarded to the Contracting Officer with the DO's ultimate approval. Additional detall is provided in ! Part IV of NRC Appendix 5101. I 046 Source Evaluation Panel (SEP). The organizational structure utl-lized by the NRC to focus the various technical and administrative talents required to properly conduct the contracting process. Its membership duties and responsibilities are discussed at length in Part 111 of NRC Appendix 5101, ] a l i Approved: April 20,1988 l
NRC ACQUISITION OF N R C-5101-05 SUPPLIES AND SERVICES 5101-05 STATUTORY / REGULATORY REFERENCES I 051 The Federal Acquisition Regulation (FAR) is the primary regulation for use by all executive agencies in their acquisition of supplies and serv-Ices with appropriated funds. The FAR, which was effective April 1, 1984, replaced the Federal Procurement Regulations (FPR) under which the NRC and most civilian agencies conducted their procurements. 052 The Competition in Contracting Act of 1984 (CICA), PL 98-369, made sweeping changes to the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253), the procurement statute for NRC and most civilian executive agencies. The changes applied to all solicitations issued after March 31, 1985. Among the most significant, CICA required the use of competitive procedures to obtain full and open competition; legislated more stringent restrictions limiting the use of noncompetitive procedures (other than full and open competition); eliminated the preferences for formal adver-tising and put competitive proposals on a par with sealed bids; eliminated the exceptions to justify use of negotiations; and established the position of Advocate for Competition within agencies. Acquisition methods formerly known as "formal advertising" or "competitive negotations" have been superseded by the terms "sealeo bidding" and "competitive proposals," respectively. 053 Contracting for Automatic Data Processing Equipment ( ADPE), which includes support services and peripheral equipment and telecommunication resources, are special category acquisition and are subject to the require-ments of both the Federal Information Resources Management Regulation (FIRMR) and the FAR. 5101-06 B ASIC RF.QUIREMENTS 061 Competitive Proposals Over $25,000
- a. The Presolicitation Phase.
(1) The program office identifies a need precipitating the require-ment for advance procurement planning. The program office must tentatively determine the manner in which the need will be met, i.e., through the utilization of NRC personnel, inter-agency agreement, or through the contract mechanism. (2) Where it is determined that a contract will be awarded for the requirement, the program office undertakes the development of the several documents (see Exhibit 1 to Appendix) that must accompany the Request for Procurement Action (RFPA). In addition to the documents listed, if the acquisition is ex-pected to exceed $100,000, independent government cost esti-mates must be developed and forwarded with the RFPA. The program office is encouraged to contact NRC contracting per-sonnel for advance guidance. (3) Before the formal submission of the RFPA to the Division of Contracts (DC), the DO shall appoint the chairperson and the Approved: April 20,1988
NRC ACQUISITION OF 1 SUPPLIES AND SERVICES N R C-5101-061. b f technical members of the SEP. A copy of the draft statement of i work and evaluation criteria should be enclosed with the letter r of designation (see page 3 of Exhibit 1 to NRC Appendix 5101 i 3
- for the required form). The RFPA submitted to the DC shall include the DO's letter (s) of designation.
(4) Upon receipt of the RFPA in the DC, the action will be logged into the contract information system (CIS) providing an auto-mated tracking capability. After the action is logged in, the RPA is assigned to one of two operational branches within the C" . . These branches are headed by NRC contracting officers. I Te cognizant contracting officer will assign the requirement l to a contract specialist. The responsible contracting special- ; ist is a non-scoring member of the SEP who will serve as the r j SEP's secretary and provide procurement advice to the SEP. 7 i The specialist is also the individual who will negotiate the contract on behalf of the contracting officer. The specialist's role is discussed in greater detall in Part lli of the , Appendix. (5) With the assignment of the contract specialist, the SEP is i ready to begin the development of the solicitation package. The issues that must be dealt with during this phase of the I procurement cycle are enumerated in Part 111 of the Appendix. t The solicitation (supplemented upon occasion with a preproposal ] conference) constitutes the primary means of communicating to 1 3 potential offerors the nature of NRC's requirement and other vital information on the submission of offers and manner in which the NRC will select an offer (or offers) for award. ;
- Therefore, the solicitation's soundness is fundamental to the l
- proper conduct of the procurement. In this regard, the final !
responsibility for the acceptability of the solicitation [ document rests with the contracting officer. l ! i i b. Solicitation issuance, Amendment and Cancellation. ' I l (1) When the SEP has developed a complete solicitation package, ] It shall forward that package to the CO for issuance. The CO will issue the solicitation to all firms on the source list and to firms requesting the solicitation subsequent to its issu-ance. The period of time from the ,ssuance of the solicitation through the date established in the solicitation for receipt of proposals is the "proposal preparation time . " During this period, the NRC must be responsive to the concerns of poten-
- tial offerors regarding various aspects of the solicitation
- document. Questloiis may arise regarding the statement of work,
- the evaluation criteria, or the content of the proposal to be i submitted to the NRC. These questions, whe *.h e r serious or j trivial, are communicated by the potential offeror directly to j the contracting nfficer. If necessary, the CO will contact j j the SEP chairperson to determine what response should be made u
Approved: April 20,1988 _ ~_ _ ________ _ ____.-.._._ _ _ _ _ _ _ _ . _ . _ _ _ _ . _ _ _ _ _ _ __
NRC ACQUISITION OF N R C-5101-061.c SUPPLIES AND SERVICES 1 to the concerned party. If, in the CO's judgment, a formal re-sponse is warranted, the question or concern will be answered through the issuance or an amendment to the solicitation. A general discussion of the amendment process is set forth in Part lli of the Appendlx. (2) If cancellation of the solicitation becomes necessary, the procedures set forth in Part 111 of NRC Appendix 5101 shall be followed , c, Evaluation and Award Recommendation. (1) All responses to the solicitation are received and opened by the Contracting Officer. After recording each proposal re-ceived and retalning all data relating to costs, the CO will forward to the SEP the technical proposal portion of each response. The SEP will evaluate the proposals in accordance with the evaluation criteria set forth in the solicitation. The initial evaluation culminates in the transmittal by the SEP to the CO of the Competitive Range Recommendation Report. Additional detall on this report is provided in Part IV of the Appendix; it is sufficient here to state that the report's objective is the identification of those firms with whom the NRC will negotiate for the award of the requirement. The SEP chairperson will forward the report to the CO through the DO. (2) Unless the exceptions set forth in FAR 15.610(a)(1)-(3) apply, negotiation (discussion) with those firms in the competitive range is required. The extent and nature of negotiatMns is treated at length in Part IV of the Appendix. There are certain prohibitions and requirements regarding the conduct of negotiations which must be observed. The contracting officer shall not permit any communications which result in technical transfusion (the disclosure to other offerors of one offeror's innovative approach to a problem), technical leveling (an attempt to achieve a technical parity among of ferors), or auctioning (advising offerors of their price relationship with other offerors). Neither shall any communication be permitted which reveals the number or identity of other offers received. The contracting officer shall establish a closing date for the conduct of the negotiation phase. This date shall be communi-cated in writing to all offerors in the competitive range and shall state that: (a) discussions have been co',cludeo; (b) offerors are being given an opportunity to submit written revisions to their technical and business proposals; and (c) these revisions are subject to the late proposals clause of the solicitation. Approved: April 20,1988
NRC ACQUISITION OF SUPPLIES AND SERVICES N R C-5101 -062 (3) The SEP shall evaluate offers as revised and make a tentative award recommendation. The SEP then prepares a Final Evalua-tion Recommendation Report which is independently reviewed and signed by the DO and transmitted to the CO for approval. Upon approval by the CO of the award recommendation and the documentation supporting such selection, the CO will prepare the eontract and obtain necessary reviews of the proposed contract document. The CO will make the award. (4) Subsequent to the execution of the contract, the CO will promptly notify all unsuccessful offerors of award information to include the contractor, contract type, award amount, and award date. Debriefings will be given, upon written request. The SEP will assist the CO in the conduct of such debriefings as necessary. The CO shall immediately publish the award i announcement in the Commerce Business Dally. The CO will also designate an authorized representative where this is deemed necessary. 062 Noncompetitive Necotiation
- a. Unsolicited Proposals.
I The procedures for the receipt and handling of unsolicited proposals are set forth in Chapter NRC-5102.
- b. Other Than Full and Open (Noncompetitive) Negotiated Requirements.
i (See Part il of the Appendix for detailed guidance) (1) As with competitive proposals, this process begins with the identification of a program need, in the case of the noncom-petitive process, however, the program office can only identify one source capable of meeting the requirement. When this cir-cumstance occurs, the program office may recommend that nego-tlations for the award of the requirement be conducted only with the "sole" source identified. This recommendation must be j supported by a justification. The requirements for the justi- 1 fication are set forth in detail in Part 11 of the Appendix. (2) For the most par', an RFPA requesting a noncompetitive action requires the suumission of the same attachments as a competi-tive requirement. A technical and cost proposal is solicited from the solo source. The proposal is forwarded to the SEP for a technical and cost review. The SEP submits a summary of its evaluation to the CO, together with any special provisions deemed necessary and appropriate for inclusion in the contract, including reporting requirements, etc. Upon approval, the CO, ! with assistance from technical and administrative staff as needed, conducts negotiations with the sole source and issues i a contract for the requirement. l l I I Approved: April 20,1988 i
l NRC ACQUISITION OF N RC 5101 063 SUPPLIES AND SERVICES (3) As in competitive negotiation, an announcement of the award is made in the Commerce Business Daily. The CO also designates an authorized representative, the project officer, to assist in the administration of the contract.
- c. Noncompetitive Contracts Between NRC and Former NRC Employees (1) Contracts will not normally be placed on a noncompetitive basis with any individual who was employed by NRC within two years of the date of the request for procurement action, or with any firm in which such a former employee is a partner, principal officer, majority shareholder, or which is otherwise controlled or predominantly staffed by such former employees, unless it is determined to be in the best interest of the Government to do so. This restriction also applies to former NRC employees acting as a principal under a task type contract arrangement or as a principal under a contract awarded under the Small Business Administration's 8(a) Program. This policy shall also be applied when reviewing subcontracts for the purpose of granting consent under NRC prime contracts.
(2) Justifications explaining why it is in the best interest of the Government to contract with an individual or firm de-scribed in paragraph (1) above on a noncompetitive basis may be approved by the Procurement Executive after consulting with the Executive Director for Operations or his designee. This ! is in addition to the justification and any approvals required by the Federal Acquisition Regulation for use of other than full and open competition. (3) Nothing in this policy statement shall be construed as reliev-ing former employees from obligations prescribed by law, such as 18 U.S.C. 207, Disqualification of Former Officers and Employees. 063 Small Purchases
- a. General.
The FAR defines a small purchase as an acquisition of supplies, nonpersonal services, and construction in the amount of $25,000 or less, using the procedures prescribed in FAR Part 13. Small purchases are negotiated acquisitions. The objectives of the small purchase method prescribed in the regulation are to reduce the administrative cost in accomplishing low dollar requirements and to improve contracting opportunities for small business concerns and small disadvantaged business concerns. Small purchase methods are discussed in greater detail in Part ll of the Appendix. Approved: April 20,1988
t 1 NRC ACQUISITION OF SUPPLIES AND SERVICES N R C-5101-063. b ; I '
- b. Procedures for Small Purchase Procurements. ;
i i I (1) in the first step of procurement involving small purchases, the , user must determine its requirements both as to quantity and , delivery. ! (2) in establishing the specifications for the requirement, the
- user must develop an accurate statement of need. This is accom- {
- plished in one of two ways
- l I
(a) Technical
Description:
expressed in terms relating to l 1 chemical properties, physical properties including dimen- , slons, tolerances, methods of manufacturing or the utility j
- and performance characteristics required. j (b) Brand Name or Equal
Description:
referring to a recog- I nized commercial product by manufacturer's name, catalogue i description of the main or required characteristics of the ! product. When a brand or trade name description is issued, !
, and when delivery of the particular make specified is not l j absolutely essential, the request for prices issued in ,
oral or written form should make it clear that other ; t brands or types of equipment offering comparable utility I would be acceptable, i (3) Items requiring approval by FOS shall be submitted on NRC Form 34, "Requisition for Supplies, Equipment or Labor Serv- ! Ices," to FOS in accordance with Chapter NRC-5202. FOS will , insert a requisition number and the estimated amount of the ! item to be procured. One copy of the requisition will be re- , turned to the requester while the original requisition is for-warded to the Policy and Program Management Staff (PPMS), ) ARM, for certification of funds, j i ; j (4) All other requisitions (not requiring the approval of FOS) - i shall be submitted to the appropriate fiscal section for ! l certification of funds and forwarded directly to DC for pro-curement action, if necessary, DC will provide the requesting ( l office with the estimate of cost for the item for certifica- ! l tion of funds purposes. The certifying official shall assign ! j a requisition number for internal control purposes. Standard j Form 34 or any other form convenient for the purpose may be
] used for requisitioning the following types of items
- i i Personnel Recruitment Ads ;
I Legal Notices i i Rental of Meeting Rooms Outside of the Metropolitan Area I Special Transportation ! ] Subscriptions j ! j Graphic Artwork ] , Emergency Shipments of Documents < j! Laundry Service or Similar items { ) i i Approved: April 20,1988 l I i
NRC ACQUISITION OF N R C-5101 -063. b( 5) SUPPLIES AND SERVICES Modification of a Pur chase Order Page Charges for Articles Placed in Books Books (Other than Warehouse Stock) Printing of Classified Material Printing of Certificates Motion Picture Editing Services Reproduction of Reports Press Clipping Services Engraving or (Retirement) Placques Transcripts / Depositions of Hearings Gifts for International Affairs College Resume Brochures (5) The PPMS, ARM, will certify the funds against the requisition number assigned by FOS and forward all copies of the NRC Form 34 to DC for procurement action. Other certifying offi-cials shall forward an original and one copy of the request to DC. DC shall be authorized to exceed the certified amount by up to 10% without the need for recertification. The purchase orders issued by DC will reflect the same requisition number (s) for the requested item as recorded by FOS and the PPMS, ARM, or other program office certifying of ficial. Partial fulfill- j ment of a requisition will be reflected by the utilization of ' the letter "P" (for partial) after the requisition number on , each purchase order. Complete requisition (s) will be annotated j by the letter "C" (for completed) after the requisition number. }, '
- (6) The distribution of NRC Form 103 (purchase order) is depend-I ent upon the point of delivery of the item (s) being requisi-tiened. Where the items are to be delivered to the NRC ware- l house, the procedures in (a) below apply. Where the items are j delivered directly to the user, the procedures in (b) apply.
(a) Warehouse delivery (see NRC Appendix 5202, Part I) re-quire the following distribution of the executed NRC Form 103B purchase order: Original Contractor Jacket Copy Division of Contracts Commercial Payments Division of Accounting
, and Finance -
General Accounting Division of Accounting and Finance Funding Officer Appropriate Certifying Official Commercial Payments Division of Facilities , Receiving Report and Operations Support Approved: April 20,1988
4 t i i i NRC ACQUISITION OF SUPPLIES AND SERVICES N R C-5101-063. b(6 ) , Property and Supply Branch Division of Facilities ! Receiving Report 2 and Operations Support i t Small Purchases Section Division of Facilities l Receiving Report 3 and Operations Support t I Requester Copy User (Block 1 of NRC Form l 1
- 34) !
- Upon receipt of the goods, the warehouse will deliver the items !
to the user. The user will sign a copy of the requisition for : receipt of same, and FOS will then forward one copy of the : i receiving report to the Division of Accounting and Finance, !
! D/DFMC, and the other to the Division of Contracts. !
i ! (b) Delivery directly to the user requires the following dis-tribution of the executed NRC Form 103, purchase order: l Original Contractor Jacket Copy Division of Contracts Commercial Payments Division of Accounting ; and Finance l l I I l General Accounting Division of Accounting l j' and Finance l Funding Officer Appropriate Certifying ' Official } Commercial Payments User i Receiving Report Property and Supply User [ Branch Receiving l
- Report 2 i
! Small Purchase Section User
- Receiving Report 3 l Requester Copy User (Block 1 of NRC Form 34)
For all items delivered directly to the user, it is the i responsibility of the user to accept them in accordance ! I with the purchase order. If items are damaged, or there is j I an overage / shortage or services are not in accordance with ; i the purchase order, the Division of Contracts is to be l ! notified immediately to correct the problem. The user will j sign the three receiving reports for acceptance of items
' and forward one copy to the Division of Accounting and j
I ! l Approved: April 20,1988 l
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NRC ACQUISITION OF NRC 5101-064 SUPPLIES AND SERVICES Finance, one copy to the Division of Facilities and Opera- i tions Support, and one copy to the Division of Contracts. Where prior agreement / approval has been coordinated with FOS, the user will notify FOS when equipment has been received and FOS will tag and obtain make, model, and seriel numbers for their property records. The user will record the information on all copies and forward one to the Division of Accourding and Finance, one to the Olvision of Facilities and Operations Support, and one to the Division of Contracts. (7) The requiring office will utilize the Request for Procurement Action form for requests for technical assistance and similar services which will result in bilateral agreement with the contractor. f 064 contract Administration and Closecut. The subject is covered in depth in Part Vil of the Appendix. 065 Appilcability. The provisions of this Chapter and Appendix apply to and shall be followed by all NRC offices. 066 Appendix 5101. This appendix handbook contains detailed proce-dures covering NRC procurement of goods and services,
)
l 1 l Approved: April 20,1923
NRC ACQUISITION OF SUPPLIES AND SERVICES N R C A P P E N D I X 510,1, TABLE OF CONTENTS Page i FOREW0RD............................................................... v PART I PRINCIPLES OF GOVERNMENT CONTRACTING......................... 1-1 A. Basic Principles of Contract Law........................ 1,- 1
- 8. Elements of a Contract.................................. I-2
- 1. An Agreement....................................... 1-2
- 2. Competent Parties.................................. I-3
- 3. Consideration...................................... 1-3 i
- 4. Lawful Purpose..................................... 1-3 1
- 5. Terms Clearly Stated............................... 1-3
; C. Agency.................................................. 1-3
[ i PART II ACQUISITION METH0DS.......................................... Il-1 l A. Sealec Bidding.......................................... Il-1 B. Two-Step Sealed Bidding................................. II-2
- 1. Description and Conditions for its Use............. II 't
- 2. Conduct of the Procurement......................... II-3
- 3. Summary............................................ II-4 C. Competitive Proposals................................... II-5 I
i Small Purchases.................................... II-5 4 t
- 0. OLher Than Full and Open Competition.................... II-7 l 1
{ 1. Sole Source Negotiated Acquisition in i t Excess of $25,000................................ II-7 l
- 2. Unsolicited Proposals.............................. 11-10
'! 3. Contract Modification.............................. Il-11 l t E. Broad Agency Announcement (BAA)......................... Il-11 i i PART III THE SOLICITATION PHASE IN COMPETITIVE NEGOTIATION............ !!!-1 i A. Preparing for the Procurement - Advance Procurement 1 Planning, Procurement Lead-Time, Procurement Milestone i Schedules, and Review of Year-End Procurerment Actions................................................. III-1 I k i Approved: April 20,1988
. - . .__ - - - _ - . _ - . _ _ . - - _ _ _ , . . - , , _ _ _ - - - - - - - _ - _ _ . . ~ , - _ , - - . _ - - . _ . ,
, + - - . _ . . _ _ _ _ _ _ _ _ - _ - -
NRC ACQUISITION OF NRC APPENDIX 5101 SUPPLIES AND SERVICES TABLE OF CONTENTS (Continued) Page
- 1. Advance Procurement Planning....................... III-1
- 2. Procurement Lead-Time.............................. III-2
- 3. Procurement Milestones Schedules................... 111-2
- 4. Review of Year-End Procurement Actions............. III-2
- 8. Organizing for the Procurement - the Source Evaluation Panel (SEP).................................. III-4
- 1. Development of an Independent Cost Estimate........ III-4
- 2. The Source Evaluation Panel........................ III-5
- 3. Access to Information.............................. III-9 C. Development of the RFP Package.......................... III-10
- 1. Determining the Sources to be Solicited. . . . . . . . . . . . III-10
- 2. Determination of Nonpersonal Services.............. !!!-11
- 3. Determination that an RFPA is a Request for Consultant Services................................ III-12
- 4. Selecting the Appropi iate Contract Type. . . . . . . . . . . . III-12
- 5. Security........................................... III-15
- 6. Statement of Work.................................. III-18
- 7. Development of Evaluation Criteria................. 111-24
- 8. Other Information to 0fferors...................... III-26
- 9. Closing 0 ate....................................... III-27
- 0. Solicitation Review................................ .... III-27 E. Solicitation Issuance, Amendment, and Cancellation...... III-27
- 1. Issuance of the Solicitation....................... III-27
- 2. Preproposal Conference............................. 111-28
- 3. Amsnding the Solicitation.......................... III-29
- 4. Receiving and Opening 0ffers....................... III-29
- 5. Cancellation....................................... 111-29 PART IV EVALUATION AND AWARD IN COMPETITIVE NEGOTIATION.............. IV-1 A. Source Evaluation Process............................... IV-1
- 1. Preliminary Evaluation............................. IV-1
- 2. Review of Ratings.................................. IV-1
- 3. Conduct of Written or Oral Discussions............. IV-2
- 4. Best and Final Proposals........................... IV-3
- 5. Final Evaluation (Review of Best and Final Proposals)......................................... IV-3
- 6. Documentation...................................... IV-4 B. Pre-Contract Review..................................... IV-4 C. 0ebriefings............................................. IV-4
- 0. Protests................................................ IV-5 Approved: April 20,1988 il
J j NRC ACQUISITION OF 1 SUPPLIES AND SERVICES NRC APPENDIX 5101 i i L t t 1 TABLE OF CONTENTS (Continued) ; 1
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Page 4 1
! PART V CONTRACT ADMINISTRATION...................................... V-1 l A. Genera 1................................................. V-1 !
B. Delegation of 0uties.................................... V-2 I t C. Monitoring the Contractor's Performance. . . . . . . . . . . . . . . . . V-2 . 3
- 0. Informing the Contracting 0fficer....................... V-2 !
E. Recommending Remedial Action............................ V-2 : F. Voucher Review.......................................... V-3 - G. Modifying the Contract.................................. V-3 i i
- l. Definition of Modification......................... V-3 l
- 2. Agreement of the Parties........................... V-3 ,
- 3. New Procurement Versus Other-Than-New l Procurement........................................ V-4 ! i 4. Cost Overruns on Cost Reimbursement Type r Contracts.......................................... V-4 ; {
; 5. Processing the Contract Modification............... V-5 l 1
H. Post-Award Reviews and Authorization.................... V-5
- 1. Genera 1............................................ V-5
- 2. Subcontracts....................................... V-5 l I. Administration of Government Property................... V-6
, f I
- 1. Government-Furnished Property Clauses.............. V-6 I 2. Other Considerations............................... V-7 l J. Contract C1osecut....................................... V7 !
i K. Evaluating Contractor Performance....................... V-8 ! i !
- PART VI NRC PROCEDURES FOR THE USE OF TASK ORDERING CONTRACTS........ VI-1 l l
- PART VII DEFINITIONS.................................................. VII-l ;
i PART VI!! EXHIBITS..................................................... VI!!-l EXHIBIT 1 - REQUEST FOR PROCUREMENT ACTION FORM. . . . . . . . . . . . . . VI!!-l EXHIBIT 2 - PROCUREMENT PLANNING SCHE 0VLE.................... VIII-8 l EXHIBIT 3 - REQUISITION FOR SUPPLIES, EQUIPMENT OR !
) LABOR SERVICES F0RM.............................. VIII-12 l EXHIBIT 4 - S AMPLE SUP94ARY SCORE SHEET. . . . . . . . . . . . . . . . . . . . . . . VI!!-13 EXHIBIT 5 - PROCUREMENT PLAN. ............................... VI!!-14
- EXHIBIT 6 - GOVERNMENT COST ESTIMATE FORM AND INSTRUCTIONS... VIII-16
} l, 4 l I ill Approved: April 20,1988 l l l d ;
NRC ACQUISITION OF SUPPLIES AND SERVICES NRC APPENDIX 5101 f. FOREWORD An effective procurement program is essential to accomplish the U.S. Nuclear Regulatory Commission (NRC) mission since much of the data required to meet its regulatory responsibilities is obtained through contracts. These contracts may be witu commercial, educational, or not-for-profit organizations and involve a wide range of administrative, technical assistance, and research activities in support of NRC programs. The NRC also conducts some of its activities through agreements with other Government agencies. The NRC procurement process involves the cooperative effort of many NRC offices and the process begins long before an actual contract for a specific project is awarded. Staffs of the various program offices must outline objectives, develop pro-gram plans to meet those objectives, define the resources, and estimate the funds needed. From these requirements, the Deputy Director for Financial Management and Controller, (D/D FMC), ARM, prepares an overall NRC budget which is reviewed by NRC top management and the Commission. It is then submitted to the Office of Management and Budget (OMB) for review , and later to Congress as part of the President's Budget. Within the Congress, , hearings on the NRC budget are held by several Committees, each of which J requires supporting testimony by the Commissioners and senior NRC staff j members representing program and support functions, e l Once the Congress has approved NRC appropriations and D/DFMC, ARM, has , allotted those funds to the individual NRC organizations, the contracting l process can begin. Where the likelihood is that funds will be made available : prior to contract award, the contracting process may begin earlier. This !' should be done only rarely, as an unfunded solicitation may not secure a wide i response from the contractor community, particularly where bid and proposal ] costs are high. , it must be emphasized that the procurement cycle actually begins long before the formal procurement request is transmitted to the Division of Contracts (DC). A procurement plan for each fiscal year to be developed by each pro-gram office is essential to obtaining maximum efficiency in the procurement precess. The plan is to be completed by August 1 of each fiscal year, it will shos the overall procurement program anticipated for the ensuing fiscal year, incluitng intended actions for ongoing contracts as well as preliminary plans and n 'lestones for new projects. Following receipt of each program office's individ, al plan, the cognizant DC representatives will initiate discussion with th Ir respective assigned offices regarding refinement and further de-tail devs 'opment of these plans. This refinement may be referred to as "advance , rocurement planning." When the as tual Request for Pror.urement Action (RFPA) for a specific pro-curement is eceived in DC, the final Procurement Planning, Exhibit 2, for l v Approved: April 20,1988 l
l NRC ACQUISITION OF NRC APPENDIX 5101 SUPPLIES AND SERVICES that particular procurement request will be discussed and mutually agreed l upon by the appropriate project officer and the responsible contract I specialist. Effective teamwork is as essential to the initial contracting function and to the subsequent contract administration phase as it is to the preceding budget phase of the procurement process, in the preparation of the RFPA, for instance, the active involvement of the panel members as a team will insure a
~
complete and useful product. This will increase the efficiency of the procure-ment process. The requiring office may elect, at its option, to submit the RFPA and thereby initiate the procurement action without consulting the contract specialist. Submitting offices must understand that the more com-plete the RFPA is, and the fewer questions It engenders, the less time the procurement process is likely to take. Administrative closing of a contract also requires the cooperative efforts of NRC staff. Before a contract may be formally closed, the contracting officer must ascertain that the contractor has met his obligations under the contract. This necessitates formal comments from the project officer concerning the adequacy of reports, tests, or other products required by the contract. It also may require review by audit personnel (normally this is accomplished by the Defense Contract Audit Agency (DCAA)) and, in some cases, the legal staff and othe.- NRC offices before final payment can be made by the Division of Accounting and Finance. Finally, upon completion of the contract, good management practice requires ; evaluation of the contract effort. This involves not only an assessment of the contractor's performance for future reference, but also an evaluation of N R C's effort to determine whether improvements can be made in other procurements. This step, as in all other phases, requires a cooperative effort on the part of all the invnived NRC staff. The goal of the Division of Contracts is to give the best possible support to the NRC technical and administrative staffs. It is hoped that this handbook will help in achieving program office objectives consistent with sound con-tracting practices. i Approved: April 20,1988 vi
NRC ACQUISITION OF SUPPLIES AND SERVICES NRC APPENDIX 5101 ( PARTI PRINCIPLES OF GOVERNMENT CONTRACTING A contract is a vehicle used to obtain goods and services from public and private sources. Therefore, a familiarity with the basic principles of Government contracting is fundamental to the project officer's understanding of the procurement process. The following brief review provides a background knowledge of basic law and principles pertaining to contracts. A. Basic Principles of Contract Law Textbooks and legal authorities offer a variety of definitions for the term "contract". Most emphasize that a contract is made up of one or more promises, and, if for some reason one of the parties falls to do as he has promised, the injured party may expect that the law will provide some form of remedial action, it is an agreement that the law will en-a force. The social need for legal contracts is obvious. It would be im-possible to conduct business or to perform a service efficiently without 1 binding agreements (contracts). The courts have taken the approach that Individuals who enter into valid contracts are duty bound to live up to their promises and are expected to make every effort to conform to their contractual obligations. The j law of contracts can be summarized by stating that it is the law of en-forceable promises. in entering into a contract, the parties must come to an agreement con-l cerning the terms or conditions under which each will be expected to i perforni. A carefully prepared contract can eliminate many problems that I arise due to misunderstandings after the contract has been signed. For : ) example, loosely written requirements, ambiguous clauses, unreasonable perfc mance schedules, and inaccurate or faulty specifications or re- i lj quirements are areas that can create serious problems for individuals j 1 rosponsible for administering contracts, including the project officer, j A contract is not a physical thing. The document that consists of several i
- pages, usually referred to as a contract, is, in reality, only a written
) record of what the parties agreed to when they entered into a contract. A contract is a relationship between parties, it is a relationship that i comes into being when the parties have reached a mutual agreement con-l cerning the rights and duties of each towards the other. I B. Elements of a Contract For a contract to be enforceable at law it must contain the following ! elements: ! l l-1 Approved: April 20,1988 l 1 1 1
NRC APPENDIX 5101 NRC ACQUISITION OF PARTI SUPPLIES AND SERVICES An agreement (offer and acceptance) f
+
Legally competent parties to the agreement Valid consideration a Lawful purpose l l Clearly stated terms These elements, necessary for a binding contract, apply to Government as well as commercial contracts.
- 1. An Aoreement (Offer and Acceptance)
An agreement may be defined as a manifested mutual assent between the parties consisting of an offer and its acceptance. The intention to contract will be determined by an objective look at what the par-ties said and did rather than by the parties own explanation of their personal mental state. Thus, a literal meeting of the minds is not the test; indeed, it would be highly unlikely that the parties literally agreed in all particulars. This does not invalidate the agreement. No particular formality is required for an offer; it may be oral or written, expressed or implied, and it may be made by works, acts, or by any combination thereof. However, offers (proposals) for Gov- I ernment contracts are generally required to be in writing. Only those offers which meet all of the following requirements are capable of ripening into an agreement upon due acceptance: The offer must evidence a serious contractual intent. The offer must be communicated to the one to whom it is of fered . The offer must be sufficiently definite so that the intention of the parties can be determined. Once an offer has been properly communicated, there can be no legal agreement until such time as the one who received the offer ex-presses his willingness to accept the offer and enter into a con-tract. The following are the general rules governing the acceptance of offers: Acceptance can be made only by the one to whom the offer is made. It can be made only with the knowledge that an offer has been made. I Approved: April 20,1988 l-2
_. - . .- _ ~ .__ __ . NRC ACQUISITION OF NRC APPENDIX 5101 , SUPPLIES AND SERVICES PARTI , ( - it must be communicated to the offeror, except in the case of !
- some offers looking to the creation of unilateral contracts. (
- is mur,t be communicated in compliance with the terms, if any,
' prescribed by the offer. l 1 It must be consistent with the terms of the offer.
- It must be absolute and unconditional.
I 2. Competent Parties l it is essential that the parties to a contract be competent, that i j is, legally capable of consenting to the agreement, e.g., the person
- 1 must be of sound mind and legal age to enter into a contract. ;
i l 3. Consideration
- 1 l The fundamental concept in the formation of a contract is bargaln !
l and exchange. Consideration is the name given to an exchange for a promise. It is the price paid for a promise. Each party to a con- ; ] tract receives something of value and gives something in return. [ t
- 4. Lawful Purpose f
The courts will not recognize as valid any contract in which the ! j parties have agreed to do something that ': lilegal. For example, a i l contract which provides that the contrhtor's final profit will be ! j a percentage of the costs incurred by the contractor is illegal be- ! ' cause it violates the statute which prohMs cost-plus-a-percentage- l of-cost contract types. ' l l S. Terms clearly Stated , i 1 It is essential to the enforceability of a contract that its terms i be sufficiently clear to permit interpretation by the courts. The [ courts apply various rules of construction to interpret meaning i expressed by the contract and will generally rule on such meaning j to clarify for the parties any conflict or ambiguity present. ! , Usually the courts find that the parties intended to contract and !
} proceed to determine from the contractual documents or transaction !
j what rights and duties were assumed. Ambiguities are construed j 1 against the draf ter of the contract. i i j 4 in Government contracts, there is an additional facet to be reckoned i with since, by act of Congress, certain clauses and conditions are ) !' required in Government contracts. Failure to place such clauses or conditions in a contract does not invalidate the contract. Rather, { the required clauses / conditions are deemed to be part, of the con-q tract by operation of law. These required provisions, in effect, become a part of the contract even though they are not clearly
< stated therein.
l-3 Approved: April 20,1988
NRC APPENDIX 5101 PARTI NRC ACQUISITION OF SUPPLIES AND SERVICES C. Agency l l The term may be defined as a relation that is based upon an expressed or implied agreement that authorizes one person to act for another. The law ' of agency assumes that there are three parties involved: the principal, the agent and a third party. The principal authorizes the agent to act as an intermedlary and to deal directly with the third party as if the agent himself were the principal. For example, the project officer or the contracting officer perform as a representative (agent) of the United States Government (the principal) and in so doing they deal with contractors (third parties). The acts of the agent may bind the principal to third parties and may also give the principal rights against third parties. In the field of agency, private individuals are liable as principals to the extent of the power they apparently gave to their agents. The Gov-ernment, however, is generally liable only to the extent of the authority it has actually given to its representatives. The doctrine of "apparent" authority does not apply to the Government. For example, a Government contracting officer cannot enter into a contract if he does not have the express authority to do so. There must be a statute or a regulation that authorizes him to make such a contract, if a contracting officer enters ; into a contract without express authority, or if his action is prohibited by law or regulation, then the contract becomes vold and does not bind the Government. The reason for this ruling has been stated in the following language: Although a private agent, acting in violation of specific instruc-tions, yet within the scope of his general authority, may bind his principal, the rule as to the effect of the like act of a public a0ent is otherwise, for the reason that it is better that an individual should occasionally suffer from the mistakes of public officers or agents, than to adopt a rule which, through improper combinations or collusions, might be turned to the detriment and injury of the public. The courts have consistently held that persons dealing with a Government agent are presumed to have notice of limitations on his authority even though the Government representative, himself, may have been unaware of them. On this subject the United States Supreme Court has stated the following: Whatever the form in which the Government functions, anyone enter-ing into an agreement with the Government takes the risk of having accurately ascertained that he who purports to act for the Govern-ment stays within the bounds of his authority. The scope of this authority may be explicitly defined by Congress or be limited by delegated legislation, properly exercised through the rule-making power. This is so even though the agent himself may have been unaware of the limitations upon his authority. Approved: April 20,1988 l-4
- NRC ACQUISITION OF NRC APPENDIX 5101 SUPPLIES AND SERVICES PART I i While contracts of Government agencies are not legal obligations unless they result from the proper exe cise of validly conferred coritracting powers, NRC project officers dealing with a contractor should remember that their actions, although not so Intended, may result in a construc-tive change for which the contractor may be entitled to compensation.
A constructive change is an informal alteration of the work being per-formed under the contract. I 1 l i i 1 ] l ! i ] J l i I t k l I l l l l i l I J i l-5 Approved: April 20,1988 I
i i l i NRC ACQUISITION OF i j SUPPLIES AND SERVICES NRC APPENDIX 5101 i ( i
- PART 11 j ACQUISITION METHODS l l Title Vll of the Deficit Reduction Act, known as the "Competition in Con-
! tracting Act of 1984," (CIC A), mandates that executive agencies comply
- with the requirements for full and open competition in the acquisition of j j supplies and services for the Government. Sealed bidding and competitive j j proposals are both acceptable procedures for use in promoting and providing
, for full and open competition in soliciting offers and awarding Government j contracts. !
A. Sealed Blddino (F AR Part 14) { Sealed bidding has two goals: to gain for the Government the benefits of full and open competition, and to give all quallfled sources the same l opportunity to bid competitively. 1 There are five main procedural steps in sealed bidding: First, invita-i tions for Bid (lFB) are prepared; second, they are published and , } distributed; third, bids received in response to the invitations are ! j publicly opened, recorded, and tabulated; fourth, bids are evaluated i i without a discussion; and fif th, contract is awarded that bidder whose i l , bid conforming to the invitation .for bids will be most advantageous to j the Government, considering only price and the price-related factors i included in the invitation. , The procedures of sealed bidding are often described ',s rigid or mechan- l leal. This is true in the sense that they are established largely by law i and regulation, and generally cannot be deviated from. This does not l . mean that NRC's personnel exercise any less judgment and discretion i l when using sealed bids. To the contra.*y, they must be completely famil- ( 1 lar with the rules and procedures that apply to serled bidding and also ! understand the reasons for them. Only then can distinctions be made j between what may be done and what must be done in a given situation, j thus permitting the effective use of this acquisition method. j l Although sealed bidding is one way of buyirsg in the Government, the law l makes it clear that the circumstances pertinent to each acquisition j determine the purchase method utilized. The factors that should be considered in making this decision are discussed below. J 1. Sealed bidding can be used only when there is adequate time to : carry out the necessary procedures. It need not take any longer than competitive negotiation. The mere lack of t'me need not auto- ( matically exclude the sealed bidding method in a particular case. ; i in fact, in a given situation the NRC may be able to relieve an i 3 apparent time shortage by taking steps to adjust a delivery sched- l ute so that some part of an "urgent" procurement can be advertised, i i 11-1 Approved : April 20,1988 l l.
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NRC APPENDIX 5101 NRC ACQUISITION OF PART11 SUPPLIES AND SERVICES 1 l 2. Under sealed Lidding, effective purchasing depends on adequate j i competition. This means that at least two responsible sources must I be available, willing, and able to compete effectively for the re-quirement, in addition, there should be no other factors present l that might destroy the effects of competitive bidding, e.g., the l industry providing the goods or from which services solicited by l the Government is at or near full capacity. Collusion is another l obvious factor which would prevent full and free competition. Even more destructive of competition are restrictive pricing practices i on an area-wide or industry wide basis, if there is widespread use of uniform estimating systems, negodation may be the only effective procurement tool. Finally, bidding strategy may make competition ineffective. The practice of bidding on the basis of competitors' costs is an example of this. For instance, suppose that Company B is nearest the designated delivery point but, on the theory that its bid will still be the lowest one, it submits a bid that includes almost as much for shipping costs as the bid of its next competitor.
- 3. Specifications are a factor to be considered in sealed bidding. All bidders must be able to bid on the same basis, if the qualitative i requirements of the desired item or service are not defined well '
enough to permit this, sealed bidding is impracticable. This is true for two reasons: First, if the description is not clear, bidders may include unwarranted contingencies in their bids, or they may bid too low. Second, unless the requirement description is complete, the Government cannot evaluate bids fairly. Thus, research and development efforts, for example, since they cannot be described ) adequately in specifications, cannot be sealed bids.
- 4. The validity of awarding a procurement on the basis of price is a fourth factor. Ncrmally, award of a sealed bid requirement is made to the lowest pric d responsive, responsible bidder. Additionally, l the award shall be made on a firm fixed-price basis. Fixed price
! contracts with ect nomic price adjustment clauses may be used in ( some instances wh69 flexibility is necessary and reasonable. Other factors that may be critically important in some acquisitions usually cannot be aken into consideration. The greatest techn; cal competence or the effect of a long preproduction lead time, fe-example, may not b considered. Two step sealed bidding does per-mit technical factor- te be weighted in the first step. Except for this, wnen factors other than price are important, sealed bidding procedures may not be effective. Negotiation may be necessary if the best overall co itract for the Government is to be achieved. B. Two-Step Sealed Bidding
- 1. Description and Cond < ions for its Use in some cases, neitht" sealed bidding nor negotiation may be the most advantageous muthod. For these situations, two-step sealed I,
Approved: April 20,1988 11-2 l 1
NRC ACQUISITION OF NRC APPENDIX 5101 SUPPLIES AND SERVICES PART 11 I bidding, a combination of these competitive procedures, may be used (FAR 14.5). As outlined in the FAR, the procuring activity first obtains technical proposals through the solicitation of sources compiled according to standard bidder's mailing list policies. These proposals do not give either price or pricing information. A proposal may be discussed with the offeror to make sure that both parties understand the technical aspects of the requirement. In step two, bids are invited from those offerors who submitted acceptable technical proposals, and an award is made using sealed bidding procedures. Unless other factors require the use of sealed bidding, two-step - sealed bidding may be used in preference to negotiation when all of the following conditions are present:
- a. The available specif8 ations or purchase descriptions are not definite or complete anough to permit full and open competition without an evaluation and discussion of the technical aspects of the requirement.
- b. The avaluation criteria are definite enough for Judging tech-nical proposals properly. The criteria may include performance requirements, special requirements and ease of maint nance, necessary experience in the performance areas involve = J, and the need for special skills or facilities.
- c. The procuring activity believes that more than one qualified source will be available both before and after technical evaluation.
- d. Sufficient time will be available for use of the two-step method.
I
- e. A firm fixed price coM/act (with or without escalation) will be used.
- 2. Conduct of the Procurement
- a. Step One: Obtainino and Evaluatino proposals. The contracting officer first completes the necessary planrang with the assist-ance of requirements personnel. Then he sends a request for ;
technical proposals to qualified sources and synopsizes the 1 request. The request may be in letter form, but must contain at least the information required by FAR 14.503-1(a). This i includes: 1 1 (1) A description of the supplies or services required. (2) The requirements of the technical proposals, the criteria I to be used in their evaluation, and a statement that no price or pricing information should be included, ll-3 tipproved : April 20,1988
NRC APPENDIX 5101 NRC ACQUISITION OF PART11 SUPPLIES AND SERVICES (3) A closing date for the submittal of proposals. ; (4) A notification that the two-step procedure will be used. This notice should state that the Government may discuss the proposal with the offeror; that in the second step, i it will consider only bids based on acceptable technical proposals; and that it will notify sources submitting un-acceptable technical proposals upon completion of the technical evaluation. Only authorized persons should be allowed to see technical pro-posals. Before proposals go to the requirements personnel for waluation, any references to price or cost should be removed. The technical evaluation should be based on the standards con-tained in the request for technical proposals, and it should classify a proposal as acceptable or unacceptable. Proposals shall not be categorized as unacceptable when a reasonable effort on the part of the Government could bring the proposals to an acceptable status and increase competition. Once a pro-posal is classified as unacceptable, the contracting officer should notify the offeror, if he is asked to do so, he may tell the offeror why his proposal is. unacceptable. He may also indicate whether rejection was based on the lack of informa-tion or on an unacceptable performance approach. , Evaluation of the tec.hnical proposals may show that the two-step method should be discontinued. The contracting officer must then refer the matter to the office that first approved the two-step method. If this office agrees to discontinue, all bidders who submitted proposals should be notified and given reasons for the discontinuance,
- b. Step Two: Upon successful completion of step one, the con-tracting officer invites bids and makes the award on the basis of sealed bidding procedures except that: t (1) Bids are solicited only from sources whose technical pro-posals have been technically evaluated and found accepta-ble under step one. (The invitation shall contain a provi-slon to this effect as set forth in FAR 14.503-2(a)(2)). !
(2) The invitation contains a statement (see FAR 14.503-2(a) (3)) that the award will be made in accordance with the ; specifications and the bidder's technical proposal, as ; finally accepted. (3) The invitation is r.ot synopsized nor posted publicly as an acquisition opportunity. l (4) If, in the Government's interest and significant subcon-tracting opportunities exist, the names of firms that sub- s mitted acceptable proposals in step-one will be listed in I' Approved: April 20,1988 11-4
NRC ACQUISITION OF NRC APPENDIX 5101 SUPPLIES AND SERVICES PART ll the CBD for the benefit of prospective subcontractors (FAR 14.503-2(b)).
- 3. Summary Two-step sealed bidding provides additional flexibility in awarding acquisitions that include important performance considerations. It combines features of both sealed bidding and negotiation i.e., the freedom to weigh factors other than price (in step one) and the dis-cussion of technical proposals are procedures drawn from negotiation, while award to the lowest bidder (in step two), without further dis-cussions with prospective contractors, preserves the outst:nding characteristic of sealed bidding.
C. Competitive Proposals (FAR Part 15) While sealed bidding is a term applied to acquisition which involve firm, detailed specifications so that bids are evaluated and award made on the basis of price and other price-related factors, such detailed specifications are not possible in such cases as research and technical assistance activities. For that kind of work, the FAR provides for "negotiation." This process recognizes the need for flexibility while evaluating potential contractors, allowing highly important factors in addition to price to be carefully evaluated by ?lective judgment, and proposals to be improved through neg Mon. Factors considered may include technical aspects of the . oposal, delivery dates, performance and reporting requirements, contractor expertise, etc. Such flexibility is inherent in the authority to negotiate. Although negotiated procurements are accomplished under procedures that differ in many respects from those for sealed bidding, the same widespread publicity and competition are present in both. Due to the nature of its technical pn grams, the need to evaluate factors other than price and the right to question and discuss spe-cific proposals - hence, to negotiate - is of critical importance to NRC. Therefore, this Part and the other Parts of this Appendix, will deal primarily with contracting through the use of either competitive or other-than-competitive proposals and discussions. 1 Small Purchases (FAR Part 13) l One type of negotiated acquisition is governed by special policies l that affect the way it is handled. Items valued at less than $25,000 ' are purchased using simplified procedures. This lessens the admin- l lstrative cost and effort of the acquisition and provides a flexible way to meet many small-dollar-value needs.
- a. Definition and Purpose. A small purchase is an acquisition of supplies, nonpersonal services, and construction from commercial sources whose total cost is not more than $25,000.
The purpose is 'to utilize simplified procedures in order to 11-5 Approved: April 20,1988 u- , - - _ _ _ . _ _ _ . . _ _ _ _. . _ . . _ _ _ _ _ - - _ _ . _ _ __
NRC APPENDIX 5101 NRC ACQUISITION OF PART!! SUPPLIES AND SERVICES reduce administrative costs and to improve opportunities for ' small business concerns and small disadvantaged business concerns to obtain a fair proportion of Government contracts. A large procurement may not be broken down into several small purchases to permit use of small purchase procedures. Nor may small purchase procedures be used if the acquisition cost is estimated to exceed $25,000 even though the final award dc1s not exceed that amount. t
- b. Policy to Negotiate Small Purchases. FAR 13.103 requires small purchases to be negotiated unless special circumstances l necessitate more formal procurement methods in the best in-terest of the Government. The use of negotiation is essential i
to achieve the intended procurement flexibility, since the simplified methods set up for small purchat.es would not be possible under the more rigid requirements of sealed bidding. ;
- c. Solicitation of Competitive Quotations. The policy of ob-taining maximum competition for supply acquisition has also been modified for small purchases. As a rule, open market !
quotations are sollcited from three suppliers to ensure adequate competition. If there art not three, the number of quota tions is necessarily limited to the number of suppliers available. Sometimes a purchase must be made from a single source in the area. A sole source justification from the + progrem office is required when purchases in excess of $1,000 ' l are to be made from a single source. ' If quoted prices are reasonable on the basis of past experi-ence, small purchases of not more than $1,000 may be made without receiving competitive quotations. Such purchases should be distributed equitably among qualified suppliers, i To reduce administrative costs further, price and delivery quotations for smt.I purchases may be solicited orally, except that written solicitation shall be used for construction contracts over $2,000. Written solicitations should also be used when a large number of line items is included in a single proposed acquisition.
- d. Small Purchases Procurement Methods. There are several basic methods for handling small purchases - Imprest Funds, Pur-chase Order, and Blanket Purchase Agreements. The appropel-ate use of each method is described in FAR 13.2, .4 and .5.
The use of the impret t Fund method is further detailed in i Chapter NRC-5201. Except for the Imprest Fund, the contracting officer is responsible for choosing the method that best meets the immediate needs of the purchase and involves the least paperwork and expense for the , f , i Approved: April 20,1988 11- 6
NRC ACQUISITION OF NRC APPENDlX 5101 SUPPLIES AND SERVICES PART 11 ( Government. The Director, Division of Facilities and Operations Support, is responsible for approving NRC Form 34 for payment of imprest Fund purchases. Use of these methods does not eliminate the requirement that there be a bona fide NRC need for the supply or service and that the obligations and payments do not exceed avail-able funds. It is essential that controls over the initiation of requirements and the use of funds be kept as simple as possible to hold the administrative cost of the entire transaction to a minimum. In small purchase transactions, a Division of Contracts representa-tive and a technical contact designated by the requiring office will constitute an informal team responsible for accomplishing the requested procurement. Other staff, such as OGC and D/DFMC, will provide support as required. D. Other Than Full and Open Competition
- 1. Sole Source Negotiated Acquisition in Excess of $25,000
- a. General Policy With certain limited exceptions, 41 USC 253 requires that Contracting Officers promote and provide for full and open competition in soliciting offers and awarding Government con-tracts. All negotiated acquisitions will be conducted through the use of competitive procedures as required by FAR 6-101, unless, consistent with the criterion described herein, there are compelling and convincing reasons and/or circurostances which permit other than full and open competition. Acquisi-tions should be conducted competitively to obtain the bene-fits of competitive prices and to stimulate bidders, offerors, and current contractors who desire future contracts to exert their best effort to deliver high quality products and ser- l vices. Noncompetitive acquisitions must be considered as excep- ;
tions to the statutory requirement for full and open competi-tion and, as such, should be minimized. Where a noncompetitive acquisition can be justified, affirmative action must be taken whenever possible to avoid the need for subsequent or con-tinuing noncompetitive acquisition. , I
- b. Circumstances Permittino Other Than Full and Open Competition Contracting without providing for full and open competition is permitted by statute in the following seven circumstances:
(1) Property or services are available from only one respon-sible source and no other type of property or services will satisfy agency needs (includes follow-on contracts for production of major systems or specialized equipment when competition would result in duplication of cost or i Il-7 Approved: April 20,1988
NRC APPENDIX 5101 NRC ACQUISITION OF PART 11 SUPPLIES AND SERVICES unacceptable delays in fulfilling agency needs; and, un- i . solicited research proposals that demonstrate unique and innovative concepts that do not resemble a pending com-petitive procurement); (2) The requirement is of such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources (must still request offers from as many potential sources as practicable under the circumstances); (3) It is necessary to award to a particular source in order to maintain a facility or supplier in case of a national emergency, or to establish or maintain an essential engi-neering, research or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center; (4) It is required by the terms of an international agreement or treaty or by written direction of a foreign government who is reimbursing the agency for the cost of the procurement; . (5) A statute expressly authorizes or requires procurement through another agency or from a specified source or the ; agency's need is for a brand-name commercial item for . authorized resale; ! , (6) Disclosure of the agency's needs would compromise national security unless the number of sources is limited (must request offers from as many potential sources as practir.a-ble under the circumstances); or (7) The Head of the Agency determines it is not in the. public interest to use competitive procedures and gives Congress l 30 days written notice before award (non-delegabte), j With the exception of No. 7 above, noncompetitive procurements I must be justified in writing and certified as to accuracy and l completeness by the Contracting Officer before award. Techni- i cal personnel are responsible for providing r.nd certifying as l accurate and complete necessary data to support the CO's de- i termination. In extreme circumstances, as approved by the Com- l petition Advocate, written justification for procurements under [ Exception No. 2 may be made after award. Written justifications : must be approved by additional levels of authority depending on ' the project value, as follows: Value Agency Approving Authority
$100,000 - $999,999 Ccmpetition Advocate
$1,000,000 - $9,999,999 Head of Procuring Activity
$10,000,000 and above Procurement Executive
)
Approved: April 20,1988 11-8 r
NRC ACQUISITION OF NRC APPENDlX 5101 SUPPLIES AND SERVICES PARTll I c. Procedure When a procurement utilizing other than full and open competi-l tion is contemplated, requiring offices should discuss such procurements with Division of Contracts personnel as early as possible during the acquisition planning stage, preferably before submitting a Request for Procurement Action (RFPA). Such discussions may resolve uncertainties, provide requiring offices with names of other sources, allow proper scheduling of i the procurement, and avoid delays which might otherwise occur should it be determined by the conte ecting officer that non-competitive acquisition is not justified. In those instances where a sole source procurement is justi-fled, a Justification for other than full and open competition should be prepared in draft and submitted with the RFPA. Guidance for the preparation of the justification is contained in Exhibit 1 to this Appendix. Upon receipt of the RFPA suppporting other than full and open
- competition, the CO will proceed as follows
Case (1) If the Contracting Officer firmly believes the procurement is l not sole source after discussing the requirement with the l program office and others concerned, the CO shall issue a l competitive procurement in the normal procedu re, beginning with the placement of a notice in the CBD. Case (2) If the Contracting Officer and/or the program office have some doubt as to whether the procurement is truly noncompetitive and wish to learn if there are other available sources, the CO shall pitee a "sources sought" type notice in the CBD. This notice may include a statement that NRC believes there is only one source and the reasons for such belief. Case (3) If the CO agrees with the program office that the proposed procurement should properly be awarded without full and open competition, a notice of intent to contract on a sole source basis shall immediately be placed in the CBD. Agencies are required to wait 45 days from the date of publication in the CBD prior to commencing negotiations with the sole source contractor. In the interim, NRC may issue a Request for Proposal to the proposed sole source contractor, receive the proposal, and request the cost proposal audit during the 45 day period, but may not besgin discussions until (1) 45 days have elasped from the CBD notice: (2) an evaluation of qualifications from other prospective sources resulting from the CBD notice has been made and is documented by the CO; and (3) all justifications which conclude that the action is still noncompetitive have been executed and approved. 11-9 Approved: April 20,1988
NRC APPENDIX 5101 NRC ACQUISITION OF PART11 SUPPLIES AND SERVICES in sole source CBD notices, agencies must (1) invite j interested sources to identify their capability to respond to ' the requirements, (2) provide information on scope of work or specifications for others to respond, (3) respond to questions concerning the sole source action , and (4) evaluate the re-sponses received. NRC will respond to information requests only during the 45- day response time. The CO may employ members of a Source Evaluation Panel to evaluate responses received to the CBD notices or employ one or more program office personnel or other technical experts to aid the Cu in evaluating responses. If any responses provide insufficient information for evaluation, they will not be considered, nor will the CO be obligated to request additional information from the respondent. The CO will document the evaluation of all responses received in a Memorandum for the File. The memorandum shall conclude with the CO's decision to proceed with either a competitive or noncompetitive action. NOTE: To expedite the evaluation process, each response to the CBD notice should be reviewed upon receipt where possible, rather than evaluating all responses at the end of the 45 day period. The CO is not required to notify respondents of the results of NRC's evaluation of their submittals, but may do so if the CO deems it appropriate. Case (4) If the CO is satisfied that the sole source is bona fide, and the CO determines that the NRC's need for the item or services ) is of unusual and compelling urgency, the CO may forego the requirement to synopsize the procurement, however, the CO must first obtain the approval of the Director, Division of Contracts. Case (5) In the event responses to the CBD notice require that the proposed procurement be processed as a competitive action, the following steps shall be followed: (a) Prepare the Memorandum for the File documenting the evaluation of responses received and the CO's decision to initiate a compa>!tive procurement. (b) Prepare a complete Retst for Proposal (RFP) including a definitive statement vi work, technical evaluation criteria, and, if not previously designated, ensure that I a complete Source Evaluation Panel (SEP) is assigned to the project. Do not issue another CBD synopsis. (c) Issue the RFP to all interested offerors and proceed with { the project on a competitive basis. '
- d. Allow at least thirty days from the RFP issue date for submission of proposals.
}
Approved: April 20,1988 ll-10 1
NRC ACQUISITION OF NRC APPENDIX 5101 SUPPLIES AND SERVICES PART ll /
- 2. Unsolicited Proposals An important segment of the NRC mission is carried out as a result of unsolicited proposals. Unsolicited proposals are offers to do work which are submitted by private organizations or institutions without prior formal or informal solicitation by the NRC. Any contract which may be awarded as a direct result of an unsolicited proposal must, by necessity, be awarded on a noncompetitive basis.
The value of accepting unsolicited proposals is recognized and policies are established for defining and evaluating them, in sub-stance, the bas!c criteria for evaluating the merits of an unsolic-ited proposal are that: the offeror present unique, innovative or meritorious methods, approaches or ideas which have originated with the offeror or are assembled by the offeror in an imaginative or novel manner; the proposed effort addresses legitimate agency needs; and the capabilities, expertise and/or facilities of the offeror be an integral aspect of the proposed effort. Unsolicited proposals may only be used for research work in direct support of the NRC's mission objectives. The fact that a proposer submits an unsolleited proposal which meets the above evaluation criteria is not sufficient justification for negotiating with the offeror on a noncompetitive basis. Subpart FAR 15.5 establishes the legal tests for justify-ing noncompetitive negotiations with the offeror of an unsolicited proposal. The proposal shall not be accepted if the substance of the proposal (a) "is available to the Government without restric-tion from another source," (b) "closely resembles that of a pending competitive solicitation," or (c) is not otherwise "sufficiently unique to justify acceptance." These tests should be thoroughly addressed in the justification submitted by the requiring office seeking a contract on the basis of an unsolicited proposal . The receipt, handling and evaluation of unsolicited proposals are treated in detail in Chapter NRC-5102.
- 3. Contract Modification Under appropriate circumstances, supplies and services may be ob-tained through the modification of a contract. As the modification I of a contract is a matter of contract administration, this method of acquisition is discussed at length in Part V of this Appendix.
E. Broad Agency Announcement (BAA) The Competition in Contracting Act provides the Broad Agency Announce-ment (BAA) as an alternative method to the full competitive process for funding research. This acquisition method refers to the competitive selection of basic or applied research proposals resulting from a B AA l published in the CBD. The publication of the BAA in the CBD satis-fies the FAR requirement for full and open competition. A primary benefit of the BAA is the ability to make multiple awards on the basis of one announcement which reduces the procurement lead-time and the staff effort involved in initiating several competitive projects. It also provides flexibility in source selection, based on the merits of the individual proposal (s). 11-11 Approved: April 20,1988
NRC APPENDIX 5101 NRC ACQUISITION OF PART11 SUPPLIES AND SERVICES The BAA is an efficient means of soliciting competitive basic or applied research "ideas". BAA's may be used to fulfill requirements for scien-tific study and experimentation directed toward advancing the state-of ' [ the-art, or increasing knowledge or understanding rather than focusing ! on a specific system or hardware solution. The BAA technique shall ; only be used when meaningful proposals with varying technical /scientifit ' approaches can be reasonably anticipated. ! 1
- 1. The BAA consists of the following:
(a) Describes the agency's research interest, either for an indi- I vidual program requirement or for broadly defined areas of . Interest covering the full range of the agency's requirements, (b) Describes the criteria for selecting the proposals, their relative importance and the method of evaluation; (c) Specifies the period of time during which proposals submitted in response to the BAA will be accepted; and 1 i (d) Contains instructions for the preparation and submission of 1 proposals.
- 2. Proposals received as a result of the BAA shall be evaluated in accordance with evaluation criteria specified in the announcement l by a peer or scientific review group established by the DO. The 1 l
BAA evaluation criteria should include "scientific merit" and should describe the method that will be used for evaluating proposals. Written evaluation reports on individual proposals are ! necessary, but proposals will not be evaluated against each other ; since they are not submitted in accordance with a common work j statement. Criteria for selecting contractors will include such factors as: f (a) Unique and innovative methods, approaches, or concepts demon- l strated by the proposal. < r (b) Overall scientific, technical, or socio-economic merits of the l proposal. (c) The offeror's capabilities, related experience, facilities, techniques, or unique combinations of these which are integral ' factors for achieving the proposal objectives. . (d) The qualifications, capabilities, and experience of the pro-posed principal investigator, team leader, or key personnel who are critical in achieving the proposal objectives. ! (e) Potential contribution of the effort to NRC's mission, j (f) Overall standing among similar proposals available for evalu-I ation and/or evaluation against the known state-of-the-art. l Approved: April 20,1988 11-12 '
NRC ACQUISITION OF NRC APPENDIX 5101 SUPPLIES AND SERVICES PART 11
- 3. Once a proposal is received, communication between the agency's scientific or engineering personnel and the principal investigator is permitted for clarification purposes only and shall be coordi-nated through the Division of Contracts.
After evaluation of the proposals, the DO will submit a comprehensive evaluation report to the CO which recommends the source (s) for contract award. The report must reflect the basis for the selection or nonselection of each proposal received. 11-1 3 Approved: April 20,1988
NRC ACQUlstTION OF SUPPLIES AND SERVICES NRC APPENDIX 5101 PART lli THE SOLICITATION PHASE IN COMPETITIVE NEGOTI ATION A. Preparing for the Acquisition - Advance Procurement Planning, P rocu re-ment Lead-Time, Procurement Milestone Schedules, and Review of Year-End Procurement Actions
- 1. Advance Procurement Planning Government agencies have learned, through many difficult experi-ences, that procurement is a time consuming process, it is one that must be approached deliberately. The need for deliberation is imposed by three factors. First, it involves complex and extensive statutory, regulatory and managerial controls. Secondly, it involves the government with an independent party with independent inter-ests. Th'adly, that party is selected from many potential sources all of whom demand and deserve equal consideration. As a result, most agencies, including the NRC, have developed procurement plan-ning procedures designed to assure that procurement processes will enhance, not detract from, the agency mission.
Central to sound procurement planning is the completion of an Advance Procurement Plan (APP). ^PP information will permit an improved allocation of procurement personnel to the acquisition process and improvements in work flow. This in turn will help to decrease the time necessary to process contract requirements. Offices are to submit an annual APP to the Director, Division of Contracts, by August 1. The APP is to be updated the following February 1. The APP shall Identify all projects proposed to be accomplished l through the contract mechanism which are estimated to cost in ; excess of $25,000. (See Exhibit 5 for APP format for both new orocurement and on-going contracts.) Project officers are encouraged to solicit the advice and assist- : ance of contract negotiators / administrators so that several key 1 factors pertinent to the proposed acquisition are considered early I in the planning process. These factors are:
- 1. Defining requirements in terms of work statements or speci-fications useful for procurement.
- 2. In-house independent government (see lli B.1) estimates and availability of funds.
111-1 Approved: April 20,1988
NRC APPENDIX 5101 NRC ACQUISITION OF PART 111 SUPPLIES AND SERVICES
}
- 3. Subcontracts, contractor financing, source evaluation criteria, facilitiet and equipment, quality control, testing and accept-ance, patents and copyrights, approvals and clearances, secur-ity requirements.
- 4. Necessary determinations and findings, identification of sources, bid and proposal receipt and evaluation, preaward surveys, negotiations and awards.
- 2. Procurement Leadtime in preparing the APP and submitting the formal request for a pro-curement action (RFPA), the program office schedule shoula allow for procurement administrative lead-time (PALT). Average proc-essing times for different types of procurements are shown below:
- Contracts under $25,000 -
1 month Competitive over $25,000 - 5 months Noncompetitive over $25,000 - 3 months Interagency Agreements - 1 month Of course, the actual time necessary for the award of a contract varies as a function of fectors such as: a the dollar value of the action; the extent of competition;
- t. 1 complexity of the transaction; a
the adequacy of the (RFPA) package; i the existing workload in the Division of Contracts;
- the urgency of the requirement; and the requirement for high level approvals such as the Senior Contract Review Board and/or the Chairman.
Early contact with the Division of Contracts is essential in deter- , mining if the amount of PALT required for a specific action is i likely to exceed the average cited above. Proper management of the procurement action to preserve enough l time to meet PALT requirements is particularly important near the end of the fiscal year. In this regard, project officers are cautioned that in the absence of mitigating circumstances such as compelling urgency, the Division of Contracts may not be able to award contract actions submitted to it with inadequate lead-time.
- 3. Procurement Milestone Schedule Within one week after receipt of an RFPA, the contract negotiator and members of the Source Evaluation Panel (SEP) are to develop a milestone schedule for the project.
The schedule should help preclude any delay in placing a contract. (See Exhibit 2 for milestone schedule format for competitive and I noncompetitive procurements). Approved: April 20,1988 lil-2
NRC ACQUISITION OF NRC APPENDIX 5101 SUPPLIES AND SERVICES PART lli i
- 4. Review of Year-End Procurement Actions The practices set forth in this paragraph should be complied with throughout the year but require special attention at the end of the year to avoid abuses. Program and contracts personnel should pay particular attention to contract actions which have been designated as High Waste Vulnerability Actions and/or as major procurements.
Because of the potential for waste, contract actions for the acqui-sition of consulting services, automatic data processing equipment or services, periodicals, pamphlets, and audiovisual products are designated as High Waste Vulnerability Actions. These actions require additional management scrutiny to avoid any unnecessary ex-penditures. Particular attention should be paid to the factors in Paragraph 4(b)-(d), (g)-(l), and (m)-(o) below. Major Procurements - New procurements estimated to exceed $750,000 over the life of the project are major procurements. A major procurement must receive the Chairman's approval prior to issuance of a solicitation. (a) Procurements shall not be divided just to come within small purchase procedu res , in accordance with good procurement practices, requests should be consolidated if it would be more cost effective to do so. However, this should not be con-strued to prohibit breakout of items for small or minority business. (b) Procurement actions must be reviewed to ensure that they are essential, the minimum necessary, not superfluous or "gold-plated" and that they are consistent with the advance procure-ment plan. l (c) To avoid duplication or underutilization and to foster greater economy and efficiency, users shall assure maximum utilization of available inventories and ensure the prcper use of all available resources, including excess property. ) (d) Intergovernmental agreements for the common use or loan of equipment, services and facilities shall be used when cost effective. (e) Items shall not be repla:ed while they still are usable unless replacement is essential to meet program objectives or substan-tial cost savings will result. Materials and equipment shall , be repaired and reused whenever practic.able. l (f) Renovation or redecorating shall only be done when it is essen- l tial to program objectives, required because of lease arrange-ments, or in an emergency to protect the health and safety of l employees. I 111-3 Approved: April 20,1988
NRC APPENDIX 5101 NRC ACQUISITION OF PART lli SUPPLIES AND SERVICES
\
(g) The request for procurement of additional hours of services or I items of supply or equipment that were not in the original procurement shall be fully justified, particularly where the request is made with funds tha*. would otherwise lapse. (h) A request for the purchase of additional items or services not contained in the original procurement . request or contract shall not be made simply to exhaust available funding.
.(1) Requests for the exercise of options, orders against basic ordering agreements or requirements-type contracts, purchases of Federal Supply Schedules or the funding of the later years of a multi-year contract shall be fully justified.
(J) Funds shall not be obligated for requirements-type or task contracts in excess of anticipated needs. (k) Funds for letter contracts shall not be obligated in excess of that allowed by regulations, nor should letter contracts be used as a vehicle to obilgate funds that would otherwise lapse. (1) Funds obligated to cover unpriced items, such as changes, spare parts and data, shall not be in excess of current best estimates of need for those items. Additional obligations in excess of the criginal procurement must be clearly Justified. 3 (m) When contracts are modified or change orders are issued to increase the level of effort or procure additional tasks, items, or services, the additional requirements must be validated. The subcontracting of substantial parts of such modifications, change orders or tasks may indicate contracts are being used as vehicles to avoid competition. (n) The procurement of consultant services and modifications of current consultant contracts will be reviewed for compilance with NRC 4139. (o) Contracts shall not be awarded if prices are unreasonable to avoid the lapse of funds. B. Organizino for the Acquisition
- 1. Development of an Independent Government Cost Estimate Employees who are part of our contracting process have the respons-ibility to ensure that the agency acquires its goods and services at the best possible price. Development of an independent government cost estimate that forecasts the cost of contractor performance is an effective tool we can use to help us determine the best price for our contracted work. This estimate will enable us to evaluate t
Approved: April 20,1988 lll-4
NRC ACQUISITION OF NRC APPENDIX 5101 SUPPLIES AND SERVICES PART lli the cost realism and underlying cost assumptions of proposals sub-mitted by our contractors, thus establishing a sound basis to negotiate an equitable price. Further, the estimate, in addition to the final negotiated price, will serve as a standard to judge the efficiency of contractor performance, allowing the agency to exercise better cost control over their work. Accordingly, an independent government cost estimate shall be de-veloped when work to be procured by contract is expected to exceed
$100,000.
Exhibit 6 presents a step-by-step narrative and provides a work sheet for developing the estimate. These guidelines are part of the broader treatment of this subject given in our Project Manager's Training Course. All project managers are encouraged to read the more detailed discussion of developing cost estimates found in Chapter 5 and Appendix Q of the P_roject Manager's Acquisition H and book. Tnese guidelines are designed primarily for the acquisition of re-search and technical assistance. Contact the Division of Contracts for assistance in developing cost estimates for the acquisition of supplies and equipment. Completed cost estimates for contractual actions to be awarded by the Division of Contracts shall be transmitted as an attachment to NRC Form 400, Request for Procurement Action (RFPA). Please note that our cost estimates are for Government use only, and therefore may not be revealed to a potential contractor. The Division of Contrccts will provide any assistance you may need in the development of cost estimates.
- 2. The Source Evaluation Panel The proper conduct of a competitive negotiation involves the collec-tive judgments and cooperative efforts of the technical, contract-ing, and other administrative personnel. For all NRC precurements over $25,000, this cooperative effort is formalized tivough the establishment of a Source Evaluation Panel (SEP). The SEP is established by the Director of the program office or the Director's designee initiating the requirement, hereinafter referred to as the Designating Official (DO). The DO is responsible for development of the solicitation package, the evaluation of proposals received in response to the solicitation, and the development of a recom-mendation for the award of the requirement. This recommendation is {
submitted to the Contracting Officer (CO). ' j The S E P's purpose is to assist the DO in meeting those l responsibilities. l ( lll-5 Approved: April 20,1988
NRC APPENDlX 5101 NRC ACQUISITION OF PART lil SUPPLIES AND SERVICES -
- a. Membership of the SEP h' Normally, SEPs shall include: (1) at least three technical i*
members (one of which shall serve as the chairperson) who will participate in the scoring of proposals. using the weighted l evaluation criteria; and (2) a contract specialist who shall ! serve as the SEP secretary and who shall negotiate the con-tract on behalf of the CO. Except in unusual cases, the SEP [ should not exceed five members, including the chairperson. If practicable, the technical membership should include one member who is employed outside of the office for which the acquisition ' is being undertaken and at least one member within the requir- ' ] ing office who will be given a key technical assignment on the project. Employees of other Federal agencies with expertise in i a specific area may serve as official members of the SEP not- - withstanding the fact that they are not employees of the NRC. l ] Advisors to SEP's need not be Federal employees, but the po- i tantial for conflict of interest must be carefully evaluated in i such cases, and the solicitation should advise offerors of L l NRC's intent to use non-Federal evaluators. l The chairperson may obtain the servNes of other advisors, ' e.g., legal, financial, etc., to assist the SEP as necessary. , Advisors are not SEP members. l t All members and advisors will be asked to declare any finan- ! clal or other relationships which may create conflict of ! ' interest problems with their SEP duties. A form for this pur-pose will be included in the letter of designation of SEP [ membership. ; 1 It is imperative that each member be able to devote the time and detalled effort necessary to assure successful conduct of l the SEP's activities and the timely submission of high-quality ; products. SEP membership and its attendant duties take prece- [ 4 dence over all other normal duties to which the member may be ; assigned. if such a total commitment is impossible, an SEP f member should be replaced by one able to devote the requisite time to this responsibility, i i 3 The designation of SEP members will be accomplished by a l 1 memorandum prepared by the DO to the members of the SEP. ; 1 Changes in membership may be made by the Office Olrector only ! i after censultation with the CO and will be accomplished by issuance of a new letter. These changes should be made only I
. when necessary for the effective conduct of the S E P's ;
activities. ! j At the option of the DO, and with the approval of the CO, pro- ! curements with a total estimated cost of less than S500,000 i over a three year contract performance period may be processed ! I j! l 1 l I Approved: April 20,1988 III-6 l t
NRC ACQUISITION OF NRC ADPENDIX 5101 SUPPLIES AND SERVICES PART lil I utilizing a single technical evaluator of proposals. All con-ventional SEP functions and procedures will be performed, including preparation of written competitive range and final evaluation reports, in accordance with this Chapter. These optional procedures are designed to reduce the technical staff effort required to conduct a competitive procurement and to streamline the process so that awards may be made in a timely manner, consistent with mission needs. In such circumstances, vigilance by all parties to the process (including the DO and CO) is required to assure that the greatest degree of objec-tivity and fairness is employed in the evaluation of proposals.
- b. Duties of the SEP SEP Duties (1) Preparation of the complete Request for Proposals (RFP).
Some elements of the RFP, such as an initial draft of the statement of work (SOW), are to be prepared by the re-quiring office staff prior to the establishment of the SEP. These documents are of substantial assistance to other SEP members and should be attached to their letter of designation. The SEP will develop the RFP in final form for .eview by the DO and subsequent aoproval and issuance by the CO. In the interest of effectively using the members' time and effort, the chairperson should make work assignments ac-cording to background and experience of the members. For example, the preparation of certain components of the RFP can be performed by the contract specialist, while the technical members concentrate their efforts on other aspects of the RFP. Notwithstanding their preparation, all components of the RFP will be reviewed by the SEP as a whole. (2) Develop list of firms (source list) to be invited to propose. (3) Participata in any preproposal conferences. (Announcement and conduct of a preproposal conference is the responsi-bility of the CO or his representative.) (4) Evaluate the offerors using the weighted evaluation crl-teria established in the RFP package. (Only technical members of the SEP will score the proposals.) (5) in accordance with this Part, prepare competitive range j recommendation report and final evaluation recommendation [ report. 3ll-7 Approved: April 20,1988
NRC APPENDlX 5101 NRC ACQUISlTION OF PARTlli SUPPLIES AND SERVICES (6) Assist the contract specialist in the negotiation of the I contract as deemed necessary by the contract specialist. (7) Assist the CO in any debriefing of the unsuccessful offerors.
- c. Responsibilities of SEP Chairperson The SEP chairperson is in charge of and responsible for all procedural asp}}