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PREPARING AND NEGOTIATING AN 8(a) SOLE-SOURCE

Melissa L. MooreGSFC – Code 210.MJuly 11, 2007PIP l

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Purpose

Provide a helpful reference document for working with 8(a) Set Asides—Specifically;

“Information you need to consider for preparing and negotiating an 8(a) Sole-Source Contract.”

--no formal competition involved with contractor selection

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Overview

8(a) Program

Award Process

Regulations

Prenegotiation

Negotiation

Lessons Learned

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8(a) & the Law

FAR 6.204 (a) To fulfill statutory requirements relating to section 8(a) of the Small Business Act, as amended by Pub. L. 100-656, contracting officers may limit competition to eligible 8(a) contractors (see Subpart 19.8). (b) No separate justification or determination and findings is required under this part to limit competition to eligible 8(a) contractors.

NASA FAR SUPPLEMENT(NFS) 1819.7002(a) Contracting officers must seek out as potential sources small disadvantaged business concerns, women-owned small business concerns, historically black colleges or universities, and minority institutions, and give full consideration to these entities to satisfy NASA requirements.

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Ways to Award a Contract to an 8(a) Business Concern

Sole-Source [8(a) pre-selected or informal competition]

Competitive Set-Aside

GWACi.e. GSA—8(a) STARS

According to the SBA—The selection of an 8(a) STARS company earns 8(a) socioeconomic credit, but also credit for all the other socioeconomic attributes a firm has. (http://www.gsa.gov/Portal/gsa/ep/contentView.do?programId=11162&channelId=-15625&ooid=15749&contentId=22858&pageTypeId=8199&contentType=GSA_BASIC&programPage=%2Fep%2Fprogram%2FgsaBasic.jsp&P=6FG11 )

8 (a) SOLE-SOURCE

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General 8(a) Tips

SBA administers the 8(a) program and determines the eligibility of the participants

Memorandum of Understanding between NASA and SBA allows for NASA to Award directly to the 8(a) business

JOFOC and Synopsis are not required for 8(a) Sole-Sources under $3.5M (threshold set by FAR 19.805-1) for Services ($5.5 M for Supplies)

Authorization for Exceptions found in 6.302-5 (b) (4); FAR 5.202 (a) (4);

8(a) is a quick way to award a sole source stand-alone contract

Get to know your 8(a) business concern early on in the processBe mindful that the business does not have the “body shop” mentality

(i.e. a firm that is more concerned about quantity of contracts instead of quality)

Understand their business processes

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Common Misconception

Stereo-type:Larger acquisitions require more time and effort than smaller acquisitions.

Reality:When working with less experienced companies such as 8(a) companies more time and effort may be involved due to guidance required by an 8(a) company.

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Award Process (1 of 2)

All Documents shall be submitted through the review and approval process as stated in GSFC Circular 98-2 “Review and Approval of Procurement Documents and

Related Actions”

Meeting with Customer to discuss “Non-Competitive Purchase Requisition Package” requirements.

Doc found on O:\Drive under O:\210.M\CODE210.3\Regulations and Policies

Receive “Acquisition Package” from Customer

Submit Package to Industry AssistanceFor informal competition, can post “Sources Sought” synopsis, evaluate capability statements, conduct interviews/presentations, and select desired firm.

Prepare Request For Proposal (RFP) then send through review and approval

Submit RFP to 8(a) Concern with detailed instructions

Submission of Proposal by 8(a) Concern

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Award Process (2 of 2)

Evaluate ProposalSubmit Proposal to COTR for Technical EvaluationCost/Price Evaluation

Complete Prenegotiation Position Memorandum and send through for review and approval

Negotiations

Price Negotiation Memorandum Signed and Approved

Submit Contract for Review and Approval

Submit Contract to 8(a) Concern for Signature

Contracting Officer Signs the Contract

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Past Performance Tips

Past Performance Database (PPDB)https://prod.nais.nasa.gov/cgi-bin/nais/login_account.cgi?check=ok

Contact other Contract Specialists that have experience with this company Ask for references and make reference checks

i.e. Other Government AgenciesOccasionally, because this is an 8(a) Concern they may not have any corporate Past Performance available—but individuals within the company always have past performance you can evaluate

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NAICS Code Tips

North American Industry Classification System (NAICS)

NAICS is used for the collection, analysis, and publication of economic statistics.

Determines the Size Standard of a business, in $ amounts or employee quantity

The NAICS Code in the RFP should match the Company’s NAICS Code for 8(a) status.

If the two do not match the company must be able to prove that they are qualified to perform the work under the NAICS Code listed in the solicitation (SBA may approve additional NAICS codes for the company)

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PRENEGOTIATION POSITION MEMORANDUM

(GSFC Form 210-90)

REQUIREMENTS

Prenegotiation Position Memorandum (PPM) should fully explain the contractor and Government position in accordance with NFS 1815.406-170

The PPM will become the basis for negotiations

For all actions under $50M (including 8(a) Sole-Source)

To be successful! Take ownership of your PPM, make sure to verify the

information you receive from both the Technical Evaluation and Resource Evaluations

(Procurement Circular 02-01)

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Terminology

OFFICIAL TITLE:

Prenegotiation Position Memorandum (PPM)

(Form 210-90)

OUR TEMINOLOGY:

Pre-Neg

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General Pre-Neg Tips

Get written responses to fact-finding questions from the contractor—produces a written response for your file

Begin with the end in mind—start writing the Price Negotiation Memorandum and Contract changes while preparing for negotiations

In order to avoid inadvertent math errors use Excel spreadsheets with formulas – Check formulas

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Aspects of a Pre-Neg

Stand Alone Document

To include Chronology & Background

Technical Evaluation – “Tech Eval”

Cost/Price Analysis

Additional items are addressed on the PPM

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Stand Alone Pre Neg

Beginning with the first contact with Contracting Officers Technical Representative (COTR) or 8(a) company Document everything

Create a chronological timeline of events

Create a timeline of events from the beginning of the acquisition process

Create the document containing all the background so that a first time reviewer can easily understand and have all the information

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Tech Eval Tips

In most cases the COTR suggests an 8(a) Set-Aside

COTR may need help developing technical evaluation. There are recently developed tools available

Technical Evaluation Guidance is available on the 210 Web Pagehttp://code210.gsfc.nasa.gov/library/ASCP63-1.pdf

Form available on the O:Drive “O:\Tech Eval Support Docs” File Name NASA-C-266 (Cost Proposal Technical Analysis Request and Response)

Make sure to review the Technical Proposal & Subsequent Evaluation. Ask questions and ensure consistency and coherence. You may catch something that the COTR missed.

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Cost/Pricing Tips (1 of 2)

For Cost-Type Contracts make sure as soon as possible the Concern has a DCAA approved accounting system.

DCAA Audits/Rate Verification

Send request early as this is often what sets the pace in the scheduleRequest only the pricing support needed (i.e. rate verification & business system check)

Provide a prepared standard Excel spreadsheet for pricing actions. (Helpful for conducting negotiations as well)—several formats available on the O drive (O:/210.S/210.7/Misc).

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Cost/Pricing Tips (2 of 2)

Place burden of supporting back up documentation of price on the contractor (i.e. pay stubs, travel cost, materials, and other ODC’s)

Price verification can be done by comparing similar items through other GSFC contracts, Internet, and Commercial Price Guides

Be sure your cost analysis includes the price reasonableness determination required by (FAR 15.406-3(a)(11))

A thorough evaluation of ALL Costs is CRITICAL when working on an 8(a) Set-Aside.

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Negotiation Tips

Make sure you do your HOMEWORK

Research Companies negotiation historyIndustry standards (i.e. labor, overhead, etc.)Recent industry environment

Send negotiation questions to the contractor ahead of time—this allows them to prepare—saving time at negotiations

Conduct face-to-face negotiations only when the complexities of the negotiations warrant it—use phone and/or e-mail whenever possible

Establish a written record of agreement

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Negotiation Goal

Look for Win-Win Situations

Fair & Reasonable outcome for both parties is good business

It is not about one persons view/needs being right or wrong

Look at the big picture of creating a viable business base for the Government

Remember one party doesn’t have to lose for the other to win…BE CREATIVE!!!

IT IS A MIND-SET!!!

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Tips That Make an (1 of 2) Exceptional Contract Specialist

Regular Contact with the COTR and Contractor is VERY important.

Helping the COTR to develop the PR Package and Market Research can speed up the process

E-mail is generally good for yes or no answers, to document phone conversations, and any simple request for information

Phone is the best way to communicate anything more complicated than a yes or no answer. This can save time and confusion in the long run.

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Tips That Make an (2 of 2) Exceptional Contract Specialist

8(a) Business Concerns can be new and may require a lot of hand holding. It is best to figure this out up front.

If they are new make sure you provide them with detailed excel spreadsheets to submit their cost data with the RFP.

Also, make sure you document all conversations with the Concern.

Post Award Conferences

Walk through the contract with them making sure that all of the terms are understood by both parties.

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Recommendations

• Use the Procurement Webpage for real-time communication between Procurement employees

Allow work related blogs

Online question and answer

• Use as a training tool

• Make PIP presentation Accessible to 210

Put on the O:\Drive

E-mail to 210

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QUESTIONS