The Contracting Officer shall prepare a negotiation memorandum, or summary of negotiations, to document all actions leading to award of a contract and support the source selection decision discussed in FAR 15.308. The memorandum also satisfies the requirement for preparation of a “cost/price negotiation memorandum” required by FAR 15.406-3. The memorandum shall be in sufficient detail to explain and support the rationale, judgments, and authorities upon which all actions were predicated. The memorandum shall document the negotiation process and reflect the negotiator's actions and judgments in concluding a satisfactory agreement for the Government. The memorandum shall address each item listed below. If an item is not applicable, the memorandum shall so state. The Contracting Officer may reference information already contained in the contract file rather than reiterate it.
(a) Description of articles and services and period of performance. Provide a description of the articles or services, quantity, unit price, total contract amount, and period of contract performance.
(b) Acquisition planning. Summarize or reference any acquisition planning activities that have taken place.
(c) Synopsis of acquisition. Provide a statement as to whether the acquisition has or has not been publicized in accordance with FAR Subpart 5.2. Include a brief statement referencing the specific basis for exemption under the FAR, if applicable.
(d) Contract type. Provide sufficient detail to support the type of contractual instrument recommended for the acquisition. If the contract is a cost-sharing type, explain the essential cost-sharing features.
(e) Extent of competition. Discuss the extent to which full and open competition was solicited and obtained. Include the date of solicitation, sources solicited, and solicitation results. If a late proposal was received, discuss whether or not the late proposal was evaluated and the rationale for the decision.
(f) Technical evaluation. Summarize or reference the results presented in the technical evaluation report.
(g) Business evaluation. Summarize or reference results presented in the business report.
(h) Past performance. Summarize or reference results of both the past performance evaluation and reference checks.
(i) Competitive range (if applicable). Describe how the competitive range was determined, and indicate the offerors that were included in and excluded from the competitive range.
(j) Cost breakdown and analysis. Include a complete cost breakdown together with the Contracting Officer's analysis of the estimated cost by individual cost elements. The analysis shall discuss the items specified in FAR 15.406-3 and other cost factors, such as-
(1) A comparison of cost factors proposed for the current requirement with actual factors used in earlier contracts, using the same cost centers of the same supplier or cost centers of other sources having recent contracts for the same or similar item;
(2) Any pertinent Government-conducted audit of the proposed contractor's record or any pertinent cost advisory report;
(3) Any pertinent technical evaluation inputs as to necessity, allocability and reasonableness of labor, material and other direct expenses;
(4) Any other pertinent information to fully support the basis for the cost analysis;
(5) If the contract is an incentive type, a discussion of all elements of profit and fee structure; and
(6) A justification of the reasonableness of the contractor's proposed profit or fixed fee considering the requirements of FAR 15.404-4 and 315.404-4.
(k) Cost realism. Describe the cost realism analysis performed on proposals.
(l) Government-furnished property and facilities. With respect to Government-furnished facilities, equipment, tooling, or other property, include the following:
(1) If the Government will not provide property, a statement to that effect.
(2) If the Government will provide property, a full description of it, its estimated dollar value, the basis of price comparison with competitors, and the basis of rental charge, if rental is involved.
(3) If a decision to furnish property has not been made, a detailed explanation.
(m) Negotiations. Include a statement as to the date and place of negotiations, and identify members of both the Government and contractor negotiating teams by area of responsibility. Include negotiation details relative to the SOW/PWS, terms and conditions, and special provisions. The results of cost or price negotiations shall include the information required by FAR 31.109 and 15.406-3. In addition, if the potential contractor provided cost or pricing data, specify the extent to which the Contracting Officer relied upon the factual cost or pricing data submitted and used it in negotiating the cost or price.
(n) Other considerations. Include coverage of areas such as the following:
(1) Financial data with respect to a contractor's capacity and stability.
(2) Determination of contractor responsibility.
(3) Details as to why the method of payment, such as progress payments, advance payments, etc., is necessary and cite any required D & F's.
(4) Information with respect to obtaining a certificate of current cost or pricing data.
(5) Other required special approvals.
(6) If the contract represents an extension of previous work, the status of funds and performance under the prior contract(s). Also, the Project Officer shall provide sufficient information for the Contracting Officer to determine that the Government has obtained enough actual or potential value from the work previously performed to warrant continuation with the same contractor.
(7) A statement that the Contracting Officer has explained the equal opportunity provisions of the proposed contract to the contractor, and the contractor is aware of its responsibilities. Also, state whether or not an Equal Employment Opportunity (EEO) clearance is required.
(8) If the contract is for services, a statement, in accordance with FAR 37.103, that the services are nonpersonal in nature.
(o) Terms and conditions. Identify the general and special clauses and conditions that are contained in the contract, such as option arrangements, multi-year contracting, anticipatory costs, deviations from standard clauses, etc. The Contracting Officer shall state the rationale for inclusion of any special terms and conditions and, where applicable, identify the document which granted approval for their use.
(p) Recommendation. Briefly state the basis (or bases) for recommending award.
(q) Signature. The Contracting Officer and the individual who prepared the negotiation memorandum must sign the document.
