What’s New In Air Force Source Selection Session #711

2. I n t e g r i t y - S e r v i c e - E x c e l l e n c e What’s New In Air Force Source Selection Session #711 Edward C. Martin & Daniel C. Fulmer ASC Acquisition Center of Excellence (937) 255-5423 or (937) 255-8584 Edward.Martin2@wpafb.af.mil or Daniel.Fulmer@wpafb.af.mil

3. Overview • Background and Basis of the Changes • Effectivity • Description of the changes • Factors and Ratings • Definitions • Planning • Use of Non-Government Personnel • Notification Requirement • Other • Source Selection Training Team

4. Defense Acquisition PerformanceAssessment (DAPA) ReportGuiding Principles • Adopt a risk-based source selection process. • For development contracts, proposal cost should be replaced by industry and government agreement on a high confidence cost estimate. • Base SSA competitive range determinations upon high confidence costs which are considered affordable. • Create acquisition strategies that reflect restructuring source selection competitions for ACAT I and II programs to significantly shorten their length and base their results on system risk and management performance instead of cost.

5. DAPA Report – SourceSelection Recommendations • Create an environment of open communication to insure that industry understands government requirements and government understands industry capabilities and limitations. • Include industry in development of program acquisition strategies for each phase of the process, and the acquisition and source selection plans for each competitive source selection. • Ensure traceability of requirements from program to the acquisition strategy to the acquisition plan, to the instruction to offerors, to the evaluation factors for award, to the contract incentive provisions and program control and to the performance evaluation metric selection. • Standardize the content of the Concept Development and Demonstration phase competitive prototype contracts to include conducting initial baseline review and preliminary design review for the contractor’s proposed system design and development program. • Eliminate the requirement to share all questions or information submitted and eliminate answers provided to a single competitor with all competitors prior to issuance of the final request for proposal. • Incorporate existing scheduled contractor technical or program reviews as proposal elements, to the maximum extent possible.

6. DAPA Report – SourceSelection Recommendations • Require oral presentations of proposals during source selection and encourage open exchanges between evaluators and industry, not limited to clarification only, during these presentations. • Use an affordability assessment based upon industry and government-agreed high confidence cost as the principal factor in competitive range determination during source selection. Once a competitor’s government and industry agreed-to development cost is determined to be affordable, and thus the competitor is determined to be within the competitive range, no other consideration will be given to the development cost, other than cost realism, during subsequent competitive source selection evaluations for Concept Development and Demonstration and System Design and development contracts. • Stress the critical nature of risk mitigation and completeness of data supporting offerors’ claims as a heavily weighted evaluation factor for award. • Establish performance and schedule confidence as well as management confidence including subcontractor selection and management as primary evaluation factors for award of Concept Development and Demonstration and System Design and Development contracts. • Set target cost for cost-type concept development and system design and development contracts at the Cost Analysis Improvement Group estimate, identifying the difference between proposed and target cost as management reserve, aggressively incentivizing cost performance, and penalizing cost growth over target.

7. Basis of the Source Selection Changes • Based on an Air Force IPT Source Selection Improvement Team Study • Team incorporated the Defense Acquisition Performance Assessment (DAPA) Jan 2006 Report recommendations, as appropriate • SAF/AQC sent an e-mail to all AF acquisition organizations • Requested to identify improvements beyond those in DAPA • Received 158 suggested changes and recommended 91 for implementation • Categories -Evaluation Factors - Source Selection Advisory Council - Source Selection Evaluation Team - Source Selection Plan - Definitions - Color Ratings - Past Performance - Pre-Source Selection Process -Cost & Cost Price Risk Assessment - Proposal Risk - Documentation - LPTA/PPT - Discussion Process - Training - DAPA Associated - Miscellaneous

8. Effectivity of the Changes • 31 Mar 08 • All source selection plans approved on or after 31 Mar 08 must comply with the revised procedures • Compliance with the revised procedures is optional for source selection plans approved before 31 Mar 08

9. Factors – Mission Capability • Current: Two factors • Mission Capability (MC) - assessed offeror’s capability to meet Government requirements, at the subfactor level if applicable • Proposal Risk -assessed the risk of the offeror’s proposed approach, using any MC subfactors • New: One factor with two assessments, at the subfactor level if applicable [AFFARS MP5315.3, Para 4.4.1.1 and 5.5.1] • Mission Capability Technical -assesses offeror’s capability to meet the government’s requirements • Mission Capability Risk -assesses the risk of the offeror’s proposed approach • Two ratings are presented together and have equal impact • Reflects the current practice of looking at the risk associated with the technical approach of the item or service being proposed • Additionally, incorporated the option to use plus “+” ratings for additional stratification within the risk ratings

10. Mission Capability Technical Ratings CURRENT NEW * Through discussions, the government evaluators should obtain the necessary information from offerors with interim Yellow/Marginal ratings to resolve outstanding issues within the offer. Yellow/Marginal ratings should be rare by the time of the final evaluation.

11. Mission Capability Risk Ratings CURRENT NEW * + Used when risk is in the upper boundaries of a Mission Capabilities Risk Rating but not enough to merit the next inferior rating

12. Factors – Past Performance • Reduce Performance Confidence ratings from six to five [AFFARS MP5315.3, Table 3] • Combined significant and high ratings into “Substantial” rating as the most advantageous • Removes the duplication and confusion with the “High” risk rating (less advantageous) • Adapted a “Limited” rating • Removes the duplication from Low risk (more advantageous) • Separated “Unknown” confidence rating from the other ratings • Broadened the description to include an offeror with a sparse record can receive an unknown/neutral rating • Removed the requirement for Past Performance to be as important as the most important non-cost factor • Teams can now determine the relative importance of each of the evaluation factors based on the specifics of their source selection

13. Past Performance Ratings CURRENT NEW

14. Factors – Cost/Price Risk • Elevated Cost/Price Risk as a separate evaluation factor (moves Cost/Price risk from within the Cost/Price evaluation factor)[AFFARS MP5315.3, Para 4.4.1.4, 5.5.4 and 5.6.5.1] • Only applies to ACAT programs in a System Development and Demonstration (SDD) phase utilizing Most Probable Cost (Cost Reimbursement or Fixed-Price Incentive contract) • Mandatory discussions of cost model prior to RFP release • Requires robust discussions with each offeror on how the government’s best estimate of Probable Costs is calculated • Each offeror will have its own MPC based on their unique approach • When used, Cost/Price Risk shall be a significant factor

15. Cost / Price Risk Ratings CURRENT NEW

16. Source Selection Evaluation Matrix CURRENT NEW Mission Capability Cost/Price Risk * Mission Capability Subfactor 1 Subfactor 2 Subfactor 3 Subfactor 1 Subfactor 2 Subfactor 3 Proposal Risk Risk Rating Risk Rating Risk Rating Technical Rating Technical Rating Technical Rating Past Performance Past Performance Cost/Price * * This factor may require a risk assessment as described in Paragraph 5.5.4. Cost/Price * For use on cost reimbursement or fixed-price incentive contracts where Cost/Price Risk is an Evaluation Factor; Most Probable Cost is utilized

17. More about the Cost/Price Risk Factor • This evaluation factor shall be used for Acquisition Category (ACAT), SDD phase programs that use a Cost Reimbursement or Fixed-Price Incentive type contract structure • The Cost/Price Risk rating assesses the degree to which an offeror’s cost proposal compares with the government’s computed Most Probable Costs (MPC) • Cost/Price Risk shall be a significant evaluation factor • For non-ACAT acquisitions when a government MPC is computed, a risk rating may be assigned with SSA approval • The purpose of this risk rating is to provide information to the SSA that allows selection of an offeror who proposed a rational and realistic cost for the work to be accomplished • The Government should state in the RFP the general what methods and/or tools that will be utilized when evaluating MPC during the source selection • The discussions should have already occurred during market research, industry days, and have been part of the draft RFP

18. Uncertainty Definition • Added definition: “Uncertainty” is a doubt regarding whether an aspect of the proposal meets a material performance or capability requirement[AFFARS MP5315.3, Para 8.16] • Reference “Yellow” Mission Capability description • It requires additional information from the offeror to further explain the proposal before the evaluator can complete his/her review and analysis and should generate the issuance of an EN

19. Withdrawal of AFFARS Deviation for the Definition of Deficiency • Current AFFARS 5315.001 definition of “Deficiency” • A material failure of a proposal to meet a Government requirement • AFAC deletes the above definition • FAR 15.001 definition of “Deficiency” • A material failure of a proposal to meet a Government requirement or a combination of significant weaknesses in a proposal that increases the risk of unsuccessful contract performance to an unacceptable level • AFFARS MP now repeats, for ease of reference, the FAR definitions of “Deficiency” and “Weakness”[AFFARS MP5315.3, Para 8]

20. Planning • Deviations to Part 15.3 (FAR, DFAR, AFFARS, and MPs) can now only be approved by the SCO (Individual) and SAF/AQC (Class) [AFFARS 5301.4 and MP5301.4] • New requirement to address the use of e-mails during the Source Selection process [AFFARS MP5315.3, Para 4.3.3.5] • If used, e-mails shall be encrypted and include in the subject line “Source Selection Information – See FAR 2.101 and 3.104” • Now optional to include Section L with the Source Selection Plan (SSP) [AFFARS MP5315.3, Para 4.3.3.6] • Personnel changes to the Source Selection Evaluation Team, after SSP approval can be made with SSET Chairperson approval in an addendum to the SSP[AFFARS MP5315.3, Para 4.1.3.3]

21. Use of Non-Government Personnel • Added further discussions concerning the use of Non-Government Personnel (NGP) as part of the Source Selection – AFFARS 5315.305(c)(2)[AFFARS MP5315.3, Para 4.3.3.8] • NGP cannot have any financial interests nor be the SSA, Chairperson of the SSET/SSAC or an advisor to or a member of the PCAG • Attachment 1, “Source Selection Information Briefing and Debriefing Certificate” was changed to “Source Selection Non-Disclosure Agreement” [AFFARS MP5315.3, Atch 1] • Area for Non-government personnel was added to acknowledge non-disclosure and non-financial interest

22. Use of Non-Government Personnel in Source Selections • SAF/AQ Policy Memo dated 11 Jul 07 • The Memo… States that the use of non-governmental personnel is permissible, with restrictions; Restrictions include written approval by the HCA (or Center Commanders) and offeror agreement; A contractor that gains access to the proprietary information of other companies during source selection must agree with other companies to protect their information; the contracting officer must obtain a copy of this agreement(s); Non-governmental personnel shall not serve as an SSA, PCAG member, Chairman of a SSE/SSAC; and Shall not have any financial interests with any of the proposed offerors

23. Notification Requirement • Moved the reporting notification for source selections >$100M from AFFARS MP5315.3 to AFFARS and expanded the definition to require notification of all competitive actions >$100M [AFFARS 5315.002 and MP5315.002] • Now required for acquisitions using • Performance Price Tradeoff (PPT) • Lowest Price Technically Acceptable (LPTA) • Fair Opportunity/Multiple Award Contracts

24. Other Changes • Several other clarifications and updates to the MP and IG were made. For example: • SSA designations were updated to include a reference to Direct Reporting Units [AFFARS MP5315.3, Para 4.1 Table] • All Tables now reflect the most advantageous rating as the one on top [AFFARS MP5315.3, Tables 2 and 4] • Additional clarifications to guidance were added • Oral Presentations – consideration can be given to declaring a competitive range up front and entering into discussions with offerors during their presentation [AFFARS MP5315.3, Para 5.6.5.2]

25. Source Selection Training Team • SAF/ACE (acquisitions >$100M) or local ACE offices conducting standardized source selection training • Current training guides are being updated to reflect these changes • ACE Offices available for source selection questions and support • Training modules already developed - https://ace.hq.af.mil/sstt// • Source Selection Training • Source Selection Authority (SSA) • Source Selection Advisory Council (SSAC) Chairperson • Source Selection Evaluation Team (SSET) Chairperson • Development of Sections L & M • Evaluation of Mission Capability and Proposal Risk • Past Performance • Cost/Price Planning • Cost/Price Evaluation: Firm-Fixed-Price • Cost/Price Evaluation: Cost Reimbursable • Debriefing • A-76posting soon • SAF/ACE modules will be updated by the end of February

26. Source Selection Improvement Team (SSIT) Recommended Future Actions • Establish Past Performance Alternative Methods Team • Develop streamlined approaches other than the resource-intensive Performance Confidence Assessment Group & publish in Air Force Past Performance Evaluation Guide. • Status: First team meeting February 2008. • Establish separate team to select a standard AF Electronic Source Selection Tool • Status: Separate team has selected EZ Source Tool for AF-wide use. Air Force developing implementation plan and allocating funding. • Consolidate the many disparate source selection guides • Status: Developing one top-level, electronic source selection process guide based upon SSIT recommended standard Source Selection Process Flow • Creating links to sub-process guides/chapters on specific steps (e.g., SSP, Sec L&M, PAR, SSDD, etc.)