Guide to the NSF Contracting Process
Every year the NSF spends a large proportion of its budget acquiring goods and services from the private sector. The acquisition system established to manage expenditures of taxpayer monies is very different in some respects from commercial transactions between private parties.
This guide provides information to understand NSF's acquisition system, to use the system effectively, and to avoid legal, ethical, and conflict of interest problems.
The guide covers the following subjects:
- The purpose of the NSF Acquisition System
- How the system is organized
- The legal foundation of the system
- The role of the Contracting Officer
- Roles of other Federal Acquisition Officials
- Selection techniques and award types
- Steps in the acquisition process
- Standards of conduct related to acquisition
- Practical suggestions to facilitate timely acquisition of high quality, economical products and services
- Where to obtain further assistance and information
The principal purposes of NSF's acquisition system are to:
- Deliver on a timely basis the best value product or service to the customer by:
- Promoting competition.
- Maximizing the use of commercial products and services.
- Using contractors who have a track record of successful past performance or who demonstrate a superior ability to perform.
- Maintain the public's trust by conducting business with integrity, fairness, openness, and compliance with statutory and regulatory requirements.
- Minimize administrative operating costs.
- Fulfill public policy objectives, such as:
- Providing opportunities for small, small disadvantaged women-owned business and other named groups.
- Paying fair wages to contractor employees.
- Protecting the environment through the purchase of energy efficient and recycled products.
- Promoting equal employment opportunity in contractor hiring practices.
The following are among the organizations that play critical roles in defining NSF's acquisition system and accomplishing its objectives.
The Congress votes authority to obligate funds through enactment of an appropriation or other statutory authority and writes laws that govern the Federal acquisition system. Obligations are legally binding commitments to spend appropriated funds, in such instruments as contracts and grants.
The General Accounting Office is a part of the legislative branch that, among other duties, investigates agency contract management and hears protests of agency contract award decisions.
The President establishes Government-wide acquisition policies and procedures through such vehicles as executive orders.
The Office of Federal Procurement Policy, in the Office of Management and Budget, provides Government-wide direction for the Federal acquisition system, directs the Federal Acquisition Institute in training opportunities, and advises the president and Congress on acquisition matters. The Administrator, along with the heads of the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration, comprise the Federal Acquisition Regulation (FAR) Council, which issues and maintains the Federal Acquisition Regulation. The council is supported by the Civilian Agency Acquisition Council, of which the Department of Commerce is a member, and the Defense Acquisition Regulation Council.
Regulatory agencies, such as the Department of Labor, Small Business Administration, and the Environmental Protection Agency interpret and implement statutory socioeconomic requirements related to small and small disadvantaged business, labor relations, and other matters assigned to them.
The Director of the National Science Foundation has delegated acquisition authority to the Procurement Executive (Director, Contracts, Policy, and Oversight), the Department's senior acquisition official, who further delegates acquisition authority to the Contracting Officers.
The National Science Foundation Office of Inspector General reviews various Foundation programs and acquisition management, investigates potential fraud and other criminal activities, and audits the Foundation's contracts.
In 1831 (U.S. vs. Tingey), the Supreme Court declared that the Federal Government, based on sovereignty, has inherent power to contract. However, the Government's broad constitutional authority to contract is limited by statutes, common law, and administrative law.
Numerous statutes govern Federal acquisition. Among the basic statutes:
- The Federal Property and Administrative Services Act (41 U.S.C. 201 et seq.).
- The Armed Services Procurement Act (10 U.S.C. 2301 et seq.).
- The Small Business Act (15 U.S.C. 631 et seq.).
- The Office of Federal Procurement Policy Act (41 U.S.C. 401 et seq.).
- Competition in Contracting Act of 1984.
- Federal Acquisition Streamlining Act of 1994 (P.L. 103-355).
- Federal Acquisition Reform Act of 1996 (P.L. 104-106).
- Information Technology Management Reform Act of 1996 (P.L. 104-106).
Common law comes from decisions of courts of law.
Administrative law includes:
- Executive orders.
- Decisions of Boards of Contract Appeals, the Comptroller General, and other administrative bodies.
The Federal Acquisition Regulation (FAR) (48 CFR Ch. 1) is a single, uniform regulation that applies to most executive agencies, including the Foundation.
A contract is a legally enforceable agreement between two or more competent parties, is mutually binding, and obligates one party to furnish something of value and the other party to provide consideration.
In contracts with the private sector:
- The Government is one party,
- The contracting officer is the Government's agent, and
- The contractor is the other party.
As the Government's agent, only contracting officers may execute, modify, or terminate a contract. Moreover, contracting officers may bind the Government only to the extent of the authority delegated in writing to them.
Responsibilities. Contracting officers are responsible for ensuring that:
- The Government obtains value from contracts.
- All requirements of law and regulation are met prior to executing an action.
- Sufficient funds are available for obligation.
- Contractors receive impartial, fair, and equitable treatment.
- Both parties comply with terms of the contract.
- The interests of the United States are safeguarded.
Independence. Contracting officers often request advice from specialists in audit, law, engineering, and other fields. However, the contracting officer is solely responsible for the final pricing and other decisions related to a contract. The recommendations and counsel of contributing subject matter experts are advisory.
Contracting officers receive advice and assistance from the following officials:
Contract specialists may serve as contracting officers or support them. Contract specialists are trained in acquisition and in related business skills such as market research, source selection, cost and price analysis, negotiation, and contract administration.
Program and project managers are tasked with planning and controlling assigned programs/projects to achieve mandated goals. They identify the deliverables required for their missions and perform functions related to acquiring those deliverables such as:
- Preparing acquisition plans, purchase requests, and statements of work.
- Recommending evaluation criteria and evaluating proposals from offerors (private sector firms competing for the award).
- Overseeing technical progress.
- Inspecting and accepting contract deliverables.
- Identifying the need to modify or terminate a contract.
Contracting Officer Technical Representatives are designated by contracting officers to perform contract administration activities regarding technical issues. They are delegated limited authority for such responsibilities as monitoring contractor progress and alerting contracting officers to problems, recommending contract changes, and inspecting and accepting deliverables.
Attorneys review proposed solicitations and awards for legal sufficiency, advise contracting officers on protests and disputes, and interpret acquisition law.
Competition Advocates are responsible for identifying and removing barriers to competition. For this purpose, they review draft acquisition plans, statements of work, and justifications for other than full and open competition.
The Foundation's Office of Small and Disadvantaged Business Utilization ensures that a fair portion of awards are to small, small disadvantaged, and women-owned business. The office also provides assistance and counseling to business firms.
Auditors and accountants perform such functions as:
- Auditing cost and pricing data provided by an offeror and recommending positions on proposed elements of cost.
- Investigating the financial responsibility of offerors.
- Auditing contractor invoices.
- Reviewing contractor accounting and cost estimating systems.
Selection Techniques and Award Types
These are some of NSF's more commonly used selection techniques and award types:
Micro-purchases. Purchases below the current threshold of $2,500 ($2,000 for construction) may be awarded without soliciting competitive quotations if it is determined that the price is reasonable.
Purchase Cards. Contracting officers may delegate the authority to buy products and services through purchase cards to program managers and others. The authority may be for purchases up to $25,000. Awards to required sources (for example, workshops for the handicapped and blind) at all dollar levels and consideration of small businesses for purchases over $2,500 must be made.
Simplified Acquisitions. Purchases greater than $2,500 but less than $100,000 may be made under simplified procedures with reduced contract clause requirements.
Large Acquisitions. For acquisitions above the simplified acquisition threshold, contracting officers use one of three methods:
- Invitations for Bid require the submission of sealed bids, publicly opened, with award to the low, responsive, responsible bidder.
- Competitive Negotiation provides for publicizing and issuing a request for proposals, discussing proposals with offerors in the competitive range (those with a reasonable chance of award), and awarding based on the evaluation criteria in the solicitation.
- Noncompetitive Negotiation is permitted only when it meets statutory exceptions to competition, such as urgency or lack of any other responsible source.
Most of NSF's contracts are negotiated.
The acquisition process for contracts is typically divided into four phases:
Presolicitation; solicitation and evaluation; award and contract administration.
The presolicitation phase lays the groundwork for soliciting offers and awarding a contract. In this phase, the Foundation performs such tasks as:
- Identifying the requirement for products or.
- Preparing a statement of work.
- Committing sufficient funds to acquire the deliverable.
- Preparing purchase requests or Requests for Contract.
- Researching the market for the supplies/services.
- Determining the extent of competition for award.
- Establishing technical, price-related, past performance, and other evaluation criteria for competitive acquisitions.
In the solicitation and evaluation phase, the NSF performs such tasks as:
- Determining the method of acquisition (invitation for bid or negotiation) and type of contract (fixed price or cost reimbursement, and appropriateness of various incentives for the contractor).
- Drafting the solicitation.
- Publicizing the proposed acquisition.
- Answering inquiries from potential offerors and conducting prebid or preproposal conferences.
- Evaluating bids or proposals based on the evaluation plan for the acquisition and the criteria in the solicitation.
- Setting the competitive range and discussing proposals with offerors.
- Determining the responsibility of the potential awardee.
In the award phase, the NSF performs such tasks as:
- Awarding the contract.
- Responding to protests of the award by unsuccessful offerors.
In the contract administration phase, the Foundation performs such tasks as:
- Conducting contractor orientation.
- Monitoring compliance by both contractor and Government personnel with terms of the contract.
- Inspecting and accepting contract deliverables.
- If problems arise, determining whether to stop work, extend delivery dates for excusable delays, or apply formal contractual remedies (e.g., rejection of work or issuance of cure or show cause notices).
- Determining the timing and amount of payments to contractors based on the contract terms.
- Modifying or terminating contracts, where necessary.
- Responding to contractor claims, if any, for additional money.
- Closing out the contract.
Standard of conduct are the rules which apply to Government employees and individuals dealing with the Government. Government business must be conducted with complete impartiality and, except as authorized by statute or regulation, preferential treatment provided to none. This includes:
- Avoiding any conflict of interest or appearance of conflict or lack of impartiality.
- Avoiding making Government decisions outside official procedures or without authority.
- Conducting actions as though full public disclosure is expected.
Prohibited conduct for all personnel involved with a procurement:
- Disclosing contractor bid or proposal information or source selection information to unauthorized sources.
- Taking bribes or soliciting or accepting certain gratuities.
- Discussing future employment or business opportunities with a bidder or offeror without promptly reporting the contact in writing and executing a recusal.
- Using an official position or non-public information to advance private or personal interests.
- Participating in specific matters in which the employee; spouse; minor children; general partner; or organization in which the employee serves as an officer, director, trustee, general partner, or employee has a financial interest.
- Conspiring to defraud the Government.
- Making false statements.
- Contracting with Government employees or members of Congress.
- Seeking or engaging in outside employment or activities with a contractor or other person whose financial interests may be affected by or conflict with the performance of one's official duties.
- Engaging in certain post-employment representations to the Government and, under certain circumstances, receiving compensation from a contractor as an employee, officer, director or consultant of the contractor.
Disclosing procurement information. Contractor bid or proposal information or source selection information may not be obtained or disclosed before contract award, except as authorized by law. Source selection information includes:
- Source selection plans.
- Technical evaluation plans.
- Cost or price proposals in response to requests for proposals.
- Proposal evaluations (technical as well as those of proposed costs or prices).
- Competitive range determinations.
- Rankings of offers and offerors.
- Reports and evaluations of source selection panels, boards, and advisory councils.
- Any other data marked "Source Selection Information."
Sanctions. Employees who engage in prohibited conduct may be subject to administrative sanctions, civil penalties, or criminal penalties such as fines, and/or incarceration. In addition, such conduct may result in the cancellation of the procurement or recission of a contract, causing delays and interrupted procurements for goods and services.
- Do not provide advance information (not generally made available to the public) to companies or individuals regarding planned acquisitions that would, in fact or appearance, provide an unfair competitive advantage. This includes not discussing acquisition-related business outside the office --there are criminal and civil penalties for release of unauthorized information.
- Ensure that appropriated funds are available to pay for an acquisition.
- Support the mandatory acquisition of products and services from non-profit agencies employing people who are blind or severely disabled under the Javits-Wagner-O'Day Act.
- Request that the appropriate contracting officer make commitments to contractors, companies, or individuals or orders/requests for them to perform work. Do not sign (execute) contractual instruments or modifications, whether or not dollars are involved, or memorandums or letters that appear to have the effect of contractually binding the Government. An agency employee who makes an unauthorized commitment may be subject to personal liability.
- Consult immediately with the Foundation's ethics official and the contracting officer if you are provided information or asked to be involved in any acquisition activities for which you or you family members have financial interests or other holdings in a contractor, subcontractor, or potential offeror.
- As soon as an acquisition need is identified, contact the contracting officer to obtain advice and initiate early planning strategies. This is particularly important for acquisitions with urgent time requirements. Early planning can also significantly shorten acquisition lead times for complex, large acquisitions.
- Be knowledgeable of the procurement integrity requirements and other ethical considerations before discussing any acquisition with a member of the public.
- Ensure that you share proprietary and source selection information only with appropriate individuals having a need for the information.
- Use care in working with support contractors and clerical staff in the office to avoid the appearance of an employer/employee relationship.
- Support the small and small disadvantaged business programs.
- Make contractor source selections or attempt to influence these selections only for those you have been delegated in writing as the source selection official authority.
- Be an active advocate for complying with statutory or regulatory requirements and in particular the requirements for competition. "Advance source selection" (this company is the best to do the work; they know what we want) or urgency (I need it right away and I know a company who can give me what I want now) are not statutory exceptions to the general requirement to compete Federal acquisition requirements.
- Discuss with the appropriate contracting officer before asking for or encouraging, orally or in writing, the submission of unsolicited proposals.
- On how to purchase supplies or services contact Gregory Steigerwald, Chief, Contracts Branch, at (703) 292-5074.
- On the Foundation's Small and Disadvantaged Programs, contact the NSF 's Office of Small and Disadvantage Business Utilization Director, Ms. Graciela Narcho, at (703) 292-4825.