(b) (i) Prenegotiation memorandum. Document prenegotiation objectives in a Prenegotiation Memorandum which sets forth the significant details of the proposed contracting action and the course the contracting officer proposes to pursue. Prepare, review, and approve Prenegotiation Memoranda in accordance with the activity’s business clearance procedures.
(A) Sole source acquisitions. For sole source actions, the Prenegotiation Memorandum documents compliance with law, regulations and policy and also becomes the record documenting the exercise of good business judgment. The Prenegotiation Memorandum shows the contractor’s methodology and how he developed his proposal position (to the extent it can be determined from the contractor’s proposal and fact finding efforts), how the price/technical/audit reviewers developed their recommendations, and what the negotiator did in developing an independent pre-negotiation position considering the pricing, audit, and technical analyses and recommendations. An understanding of the development of each position is important in order to adequately prepare for negotiations. The Director, Defense Procurement, Acquisition Policy and Strategic Sourcing’s web site http://www.acq.osd.mil/dpap/contractpricing/index.htm) has posted on it the DoD Contract Pricing Reference Guides which discuss in depth pricing techniques and factors that should be considered when developing the negotiation position.
(B) Competitive negotiated acquisitions.
(1) For competitive negotiated acquisitions using formal source selection procedures, the Prenegotiation Memorandum should include the source selection plan, as well as section “M” of the solicitation. It should discuss the evaluation criteria and the basis for award contained in the solicitation, set forth a summary schedule of offerors’ prices and the technical and cost evaluations. It should also include a determination and supporting discussion of offerors determined to be within and outside the competitive range and a summary of the technical and cost deficiencies to be discussed with offerors selected to participate in the discussions.
(2) A Prenegotiation Memorandum for a competitive acquisition is largely a review of the basis for source selection to ensure that full documentation and support exist to withstand any subsequent protest or allegation that the price was not fair and reasonable.
[AFARS Revision #21, dated May 22, 2007]
