Perform Source Selection

The purpose of this step is to select the source that will provide the service. An agency must select one of the procedures described below to conduct a standard competition and may not employ any other procedure in conducting the standard competition. Note that this section details the steps for completing the Standard Competition Form. A summary of the information required for this form can be found in this section’s FAQs located below.

1. Sealed Bid Acquisition. An agency shall conduct a sealed bid acquisition in accordance with FAR Subparts 14.1 through 14.4. See FAQs below for more information on conducting a sealed bid acquisition.
2. Negotiated Acquisition.
1. Lowest Price Technically Acceptable Source Selection. An agency shall conduct a lowest price technically acceptable source selection in accordance with FAR 15.101-2. During the source selection process, the CO shall open and evaluate all offers and tenders (including the agency tender) to determine technical acceptability. The performance decision shall be based on the lowest cost of all offers and tenders determined to be technically acceptable. For more on conducting a price analysis, see the FAQ.
2. Phased Evaluation Source Selection Process. An agency shall conduct a phased evaluation source selection in accordance with FAR Part 15. In the phased evaluation process, an agency shall evaluate technical capability in phase one and cost in phase two. The performance decision shall be based on the lowest cost of all technically acceptable offers and tenders from all offerors, public reimbursable sources, and the ATO. The solicitation shall require the submission of complete offers and tenders, including separate technical proposals and cost proposals/estimates, by the solicitation closing date. The solicitation shall permit submission of alternate performance standards that differ from the solicitation’s performance standards. For more on determining the source in a phased evaluation, see the FAQ section.
3. Tradeoff Source Selection Process. A tradeoff source selection may be appropriate in a standard competition when an agency wishes to consider award to other than the lowest priced source. An agency may use the tradeoff processes under FAR Subpart 15.101-1 in a standard competition of (a) information technology activities; (b) commercial activities performed by a private sector source; (c) new requirements; or (d) segregable expansions. An agency also may use a tradeoff source selection process for a specific standard competition if, prior to the public announcement of the competition, the CSO (without delegation) (a) approves, in writing, the use of the tradeoff source selection process; and (b) notifies OMB of the approval by forwarding a copy of the written approval. An agency shall not use a tradeoff source selection process for activities currently performed by government personnel except as provided in this paragraph. When an agency uses a tradeoff source selection process in a standard competition, an agency shall comply with FAR Part 15 unless otherwise noted in this attachment. Under a tradeoff source selection process, an agency may select an offer or tender that is not the lowest priced offer or tender only if the decision is within the agency’s budgetary limitation. An agency shall not use a tradeoff source selection to justify increases in the agency’s budgetary authorization. Prospective providers may propose alternate performance standards that differ from the solicitation’s performance standards. The CO shall conduct price analysis and cost realism as required by this attachment. The CO may conduct exchanges, in accordance with FAR Subpart 15.306 and this attachment. The CO’s rationale for tradeoffs shall be (a) documented, in writing; (b) attached to the SCF; and (c) retained with the competition file for the standard competition. The CO shall enter the contract price and public reimbursable cost estimate, for each offer and tender determined to be technically acceptable, on SCF Line 7. The CO then shall sign the SCF. The SSA may decide to award to the low-cost provider, or other than the low-cost provider, as follows:
1. Low Cost Performance Decision. For a decision to award to the low-cost provider, the SSA shall certify the SCF in accordance with Attachment C. The SSA makes the performance decision by certifying the SCF, which is the performance decision document.
2. Other Than Low Cost Performance Decision. For a decision to award to other than the low-cost provider, the SSA shall certify the SCF, in accordance with Attachment C, and shall document the following on the SCF (1) a summary of the source selection decision document; (2) a narrative explanation of the tradeoffs performed; and (3) a rationale for the decision to award to other than the low-cost provider. The SSA makes the performance decision by certifying the SCF. The SCF, combined with the source selection decision document, is the performance decision document.

Price Analysis and Cost Realism of Private Sector Cost Proposals, Public Reimbursable Cost Estimates and Agency Cost Estimates.

1. Regardless of the contract type stated in the solicitation, the CO shall perform price analysis and cost realism (as defined in FAR Part 2) on all private sector cost proposals, public reimbursable cost estimates (SCF Lines 1a-6a), and the agency cost estimate (SCF Lines 1-6). Cost analysis (in accordance with FAR Part 15) is not required for a standard competition but may be performed at the discretion of the SSA.
2. Agency and Public Reimbursable Cost Estimates. The CO shall ensure that the agency and public reimbursable cost estimates (1) are calculated in accordance with Attachment C; (2) are based on the standard cost factors in effect on the performance decision date; and (3) use the version of the COMPARE costing software that is in effect on the performance decision date.
3. Conversion Differential. All standard competitions shall include the conversion differential. The CO shall ensure that the conversion differential is calculated in accordance with Attachment C and reflected on SCF Line 14. The conversion differential is a cost that is the lesser of 10 percent of the MEO’s personnel-related costs (reflected on SCF Line 1) or $10 million over all the performance periods stated in the solicitation. This conversion differential is added to the cost of performance by a non-incumbent source. If the incumbent provider is a private sector or public reimbursable source, the conversion differential is added to the cost of agency performance. If the agency is the incumbent provider, the conversion differential is added to the cost of private sector or public reimbursable performance. The conversion differential precludes conversions based on marginal estimated savings, and captures non-quantifiable costs related to a conversion, such as disruption and decreased productivity.
4. SCF Overview. As part of the requirement to conduct price analysis and cost realism, the CO shall ensure that the SCF has been prepared in accordance with Attachment C and that the required signatures and certifications are on the SCF. Figure B4. provides an overview of the detailed guidance for developing the agency and public reimbursable cost estimates in Attachment C.

How do I conduct a sealed bid acquisition?

On the solicitation closing date, the CO shall open the agency tender, private sector bids, and public reimbursable tenders. The CO shall enter the price of the apparent lowest priced private sector bid or public reimbursable tender on SCF Line 7, to complete the SCF calculations. The CO shall then evaluate private sector bids for responsiveness and responsibility in accordance with the FAR and determine if SCF Lines 8-18 have been prepared in accordance with Attachment C. The CO shall certify the SCF in accordance with Attachment C. The CO makes the performance decision by certifying the SCF.

How do I conduct the price analysis for determining the lowest price technically acceptable source selection?

The CO shall conduct price analysis and cost realism as required by this attachment. The CO may conduct exchanges, in accordance with FAR Subpart 15.306 and this attachment, to determine the technical acceptability of each offer and tender. The CO shall enter the lowest contract price or public reimbursable cost on SCF Line 7 to complete the SCF calculations. The CO shall sign the SCF, and the SSA shall certify the SCF, in accordance with Attachment C. The SSA makes the performance decision by certifying the SCF.

How do I determine the source in a phased evaluation plan?

As its title suggests, the source is selected in phases. In phase one, the CO opens and evaluate the technical proposals (submitted by private sector offerors, public reimbursable sources, and the ATO). The CO shall not open or evaluate agency or public reimbursable cost estimates or private sector price proposals during phase one. The CO may conduct exchanges, in accordance with FAR Subpart 15.306 and this attachment, to determine the technical acceptability of each offer and tender.

In phase two, the CO shall perform price analysis and cost realism of private sector cost proposals, public reimbursable cost estimates, and the agency cost estimate, in accordance with this attachment, on all offers and tenders determined to be technically acceptable at the conclusion of phase one. The CO then shall enter the lowest contract price or public reimbursable cost on SCF Line 7 to complete the SCF calculations. The SSA shall certify the SCF and the CO shall sign the SCF in accordance with Attachment C. The SSA shall make the performance decision by certifying the SCF, which is the performance decision document.



Can offerors submit alternate performance measures that have not been included in the original solicitation?

Yes. If an agency receives offers and tenders that include alternate performance standards, the CO shall:

1. evaluate each alternate performance;
2. consider the discrete cost or price difference associated with the alternate standard;
3. determine, in consultation with the requiring activity, whether an alternate standard is necessary and, if so, within the agency’s budget limitations; and
4. document, in writing, the evaluation of each alternate performance standard.

If the SSA accepts an alternate performance standard, the CO shall issue an amendment to the solicitation to (1) identify the specific change to the solicitation’s performance standard, without conveying proprietary information about technical approaches or solutions to meet the new performance standard; and (2) request the resubmission of offers and tenders in response to the amended solicitation. Upon receiving revisions to offers and tenders, the CO may conduct exchanges, in accordance with FAR Subpart 15.306 to determine the technical acceptability of each offer and tender.

How do I ensure that the competition is conducted fairly?

The CO shall not evaluate the private sector offers separately from the agency tender. The CO, SSA, and SSEB shall not (a) convey, require, make, direct, or request adjustments to a tender or offer that would identify any proprietary or procurement sensitive information from another offer or tender; or (b) require, direct, or make specific changes to an offer or tender, including the approach and staffing requirements (e.g., adding a specific number of employee positions to the MEO). The CO shall ensure that oral presentations do not provide an unfair advantage for or inherently benefit a prospective provider, public or private.

How do we conduct exchanges with offerors?

If the CO conducts exchanges with private sector offerors, public reimbursable sources, and the ATO, during the course of the standard competition, those exchanges shall be in accordance with FAR 15.306, with the following exceptions. For an agency tender, the CO shall correspond with the ATO, in writing, and shall maintain records of all such correspondence as part of the competition file. The CO and ATO shall include clear, sufficient, and unambiguous information in the correspondence to adequately convey concerns, responses, or information regarding the agency tender.

What if there are deficiencies in the agency tender?

If the CO perceives that a private sector offer, public reimbursable tender, or agency tender is materially deficient, the CO shall ensure that the ATO, private sector offeror, or the public reimbursable tender official receives a deficiency notice. The CO shall afford the ATO, the private sector offeror, or the public reimbursable tender official a specific number of days to address the material deficiency and, if necessary, to revise and recertify the tender or offer. If the ATO is unable to correct the material deficiency, the CSO shall determine if a commitment of additional resources will enable the ATO to correct the material deficiency within the specified number of days. If the CSO determines that the ATO cannot correct the material deficiency with a reasonable commitment of additional resources, the CSO may advise the SSA to exclude the agency tender from the standard competition. If the CO determines that a private sector offeror or public reimbursable tender official has not corrected a material deficiency, the SSA may exclude the private sector offer or public reimbursable tender from the standard competition. If the agency tender is excluded from the standard competition, an agency shall calculate the SCF as required by Attachment C and the SSA shall make the performance decision based upon the source selection decision document and shall document the reason for elimination of the agency tender on the SCF.

What does the SCF look like? How do I set it up?

Below is a summary of the Standard Competition Form. You may use it as a guide when developing the SCF for your competition.

SUMMARY OF STANDARD COMPETITION FORM (SCF) COST OF AGENCY PERFORMANCE SCF Line 1: Personnel Costs. Agency labor costs for direct and indirect labor necessary to meet the requirements in the solicitation. SCF Line 2: Material and Supply Costs. Agency cost of materials and supplies such as office supplies, including handling and inflation. SCF Line 3: Other Specifically Attributable Costs. Other agency costs such as the cost of capital, depreciation capital assets, rent, utilities, insurance, and MEO subcontracts. SCF Line 4: Overhead Costs. Twelve percent of agency personnel costs reflected on SCF Line 1. SCF Line 5: Additional Costs. Agency costs not otherwise accounted for on SCF Lines 1-4, such as phase-in costs and one-time conversion costs for an expansion, new requirement, or conversion from a private sector or public reimbursable provider to agency performance. SCF Line 6: Total Cost of Agency Performance. The sum of SCF Lines 1-5. COST OF PUBLIC REIMBURSABLE PERFORMANCE The guidance for a public reimbursable source to complete SCF Lines 1a-6a is the same as the guidance to complete SCF Lines 1-6. ADJUSTED COST OF PRIVATE SECTOR OR PUBLIC REIMBURSABLE PERFORMANCE SCF Line 7: Contract Price or Public Reimbursable Cost Estimate. The contract price (based on the type of acquisition, source selection process, and contract type required by the solicitation), or the public reimbursable cost on SCF Line 6a. SCF Line 8: Contact Administration Costs. Costs for administering the contract. SCF Line 9: Additional Costs. Costs incurred by the agency that are added to the private sector or public reimbursable provider’s price/cost. SCF Line 10: One-time Conversion Costs. Costs based on 5% of Line 1, incurred by the agency as a result of awarding a contract. SCF Line 11: Gain on Assets. Revenue generated from the sale/transfer of agency assets when converting from agency performance. SCF Line 12: Federal Income Tax Adjustment. Revenue for the government when a private sector provider pays federal income tax. SCF Line 13: Total Adjusted Cost of Private Sector or Public Reimbursable Performance. The sum of Lines 7-12. COST OF PERFORMANCE DECISION CALCULATIONS SCF Line 14: Conversion Differential. The lesser of 10% of agency labor costs or $10 M is added to the non-incumbent provider. SCF Line 15: Adjusted Total Cost of Agency Performance. If a private sector or public reimbursable source is the incumbent provider, the conversion differential is added to the cost of agency performance (SCF Line 6) and the sum is the “adjusted total cost of agency performance” on SCF Line 15. SCF Line 16: Adjusted Total Cost of Private Sector or Public Reimbursable Performance.If the agency is the incumbent provider, the conversion differential is added to SCF Line 13 and the sum is the “adjusted total cost of private sector or public reimbursable performance” on SCF Line 16. SCF Line 17: Cost Difference. SCF Line 15 is subtracted from SCF Line 16 to reflect the “cost difference” on SCF Line 17. A positive number indicates performance decision for agency performance and a negative number indicates a performance decision for a private sector or public reimbursable provider. SCF Line 18: Low-Cost Provider. The low-cost provider based on the calculations on the SCF.