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Negotiation
Negotiation is the term used to
describe a procurement method other than sealed bidding.
The solicitation form in negotiation is known as a “Request
for Proposal” (RFP) and contains:
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Proposal instructions and conditions;
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Source selection criteria, including all components of a best
value selection, such as technical evaluation criteria, cost or
price evaluation factors, past performance, and any other
factors;
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Statement of work describing product or service
specifications;
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Contract clauses; and
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Certifications and representations.
Generally, the RFP requires: (1) a
technical proposal describing the offeror’s approach to providing
required goods and services, (2) a cost/price proposal describing
estimated costs or price, and (3) a discussion of the offeror’s
past performance on contracts of a similar or related nature.
Instructions for preparing these sections are explicit and
deserve close attention. Moreover,
you should show carefully how you will fulfill all RFP requirements
and provide all requested certifications and representations.
All proposals must be received by the specified time and due
date. Questions should be directed to the contracting officer
designated in the RFP.
An alternative methodology that may
be used for negotiated procurement uses oral presentation in place
of all or part of a written proposal.
If oral presentations are anticipated, the solicitation will
provide clear instructions for how to prepare them.
While the final decision concerning negotiated contract
awards must consider cost, the decisive factor is usually which
proposal offers the greatest value in terms of quality of
management, technical capability, cost, past performance, and other
relevant factors. These
factors and their relative importance are contained in the RFP. All proposals will be judged on the basis of how well they
meet these “Evaluation Factors for Award.”
For this reason, it is extremely important that you submit a
complete, relevant, and well-documented technical proposal that
clearly illustrates how you intend to satisfy each of the evaluation
factors. Unlike proposals submitted in sealed bidding, proposals
submitted for negotiation are not publicly opened.
The contracting officer keeps the cost proposal for his/her
evaluation and forwards the technical proposals to a review panel
that will evaluate them against the factors for award stated in the
RFP.
The panel then determines which
proposals are technically acceptable.
Following the initial evaluation of proposals, a competitive
range is established. A
proposal may fall within the competitive range if it has a
reasonable chance of being selected for award.
Written and oral discussions are held with all the firms
whose proposals are in the competitive range. After these
negotiations, the agency requests final proposal revisions. After
this offer has been made, the agency selects for award the qualified
offeror that has provided the most advantageous proposal from both a
quality and cost standpoint. The
entire competitive negotiation process, from announcement of the RFP
to contract award, may take from three to nine months.
Keep this time frame in mind when allocating resources and
estimating costs. Those
offerors determined not to be in the competitive range are notified.
Announcement of the successful offeror cannot be made until
the entire process has been completed.
The negotiation method is time consuming with a good deal of
oversight to ensure full and open competition.
The contracting officer directs the process and is the
appropriate person to contact for the status of proposals.
Contracts resulting from the negotiation process
may range from firm-fixed price, under which the contractor delivers
products conforming to specifications at a specified price, to a
cost-plus-fixed-fee (CPFF) basis, under which the agency reimburses
the contractor for all allowable and reasonable costs incurred
within contract limits, plus a fixed fee.
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