CHAPTER 11 EVALUATION FACTORS OTHER THAN COST

Public law has long mandated that price or cost be a consideration in all government procurements. But in addition to price or cost, procurement laws and regulations have traditionally permitted consideration of non-cost factors, often referred to as merit factors or technical factors. These non-cost factors may be used in both LPTA and tradeoff procurements.

BASIC FAR REQUIREMENTS

Per FAR 15.304, some specific non-cost factors must be addressed in the source selection processes. These include:

• Quality. The FAR indicates that quality may be addressed through such factors as past performance, technical excellence, personnel, and management capability and experience.

• Past performance. The FAR requires that past performance be used as an evaluation factor for all procurements exceeding the simplified acquisition threshold, but it also provides that this requirement may be waived if the contracting officer documents why an evaluation of past performance would not be appropriate.

• Small business contracting. If the proposed solicitation is to be unrestricted—not set aside for a particular group of contractors such as small businesses or small disadvantaged businesses—then the proposed use of various categories of small businesses as subcontractors and vendors must be evaluated. This requirement applies to proposed contracts exceeding $650,000 for all but construction contracts. It applies to construction contracts of more than $1.5 million. For Department of Defense (DoD) contracting offices, the plan may also address whether black colleges and universities and minority institutions will be considered as sources.

• Small disadvantaged business subcontracting. For selected industry segments, as identified by the Department of Commerce on an annual basis, tradeoff acquisitions exceeding $650,000 (or exceeding $1.5 million for construction contracts) may also include an evaluation factor for the use of small disadvantaged businesses.

• Other subcontracting considerations. If the contract involves bundling and there are opportunities for subcontracting, the contracting officer must include a factor to evaluate past performance. The past performance evaluation should indicate the extent to which the offeror attained small business subcontracting goals under past contracts.

Additionally, FAR 22.1103 specifies that for service contracts of $650,000 or more that are expected to involve meaningful numbers of professional employees, compensation plans should be reviewed to determine if they are unrealistically low.

FACTORS AND SUBFACTORS

Subfactors may be added under any non-cost evaluation factors. When using the tradeoff method, the relative importance of both factors and subfactors must be determined and later described in the solicitation. In an LPTA source selection there is no relative importance. All factors and subfactors are equally important. Accordingly, if there is a mixture of variable factors and pass/fail factors in the solicitation (a combined tradeoff/LPTA approach), it may be more challenging to communicate the relative importance of the factors and subfactors to potential offerors and to make it clear that only some of the factors are pass/fail. Careful wording would be in order.

Factors and subfactors must:

• Be tailored for the particular acquisition

• Represent the key areas of importance and emphasis upon which the source selection decision will be based

• Be definable and measurable and stated in clearly understood terms

• Support meaningful comparison and discrimination between competing contractors.