Project Management: Contract Sections L and M12 May 2016

Project Management

This article is the seventh and last in a series of articles that discusses the most critical steps necessary for a successful program. This article focuses on the sixth critical task, which is the development of Sections L and M for a government contract for a major system or service and provides a high level overview of the information and guidance typically contained in these sections. Critical steps previously discussed in this project management series are:

The government procuring agency must provide specific and detailed information and guidance in Sections L and M for companies (i.e., Offerors) to follow when they prepare and submit their proposals. Some of the government-provided information in Section L is standard, but very important, such as the following:

  • How, when, and where the Offerors should submit their proposal in response to the government’s request for proposal (RFP),
  • The acceptance period or how long the Offeror guarantees their proposal,
  • How many contracts the government is going to award under the government’s RFP,
  • How and when the Offerors can communicate with the procuring agency,
  • Government requirements for the Offerors Subcontracting Plan for small businesses, and
  • Past Performance contract information that the Offeror must provide for other contracts that they have been awarded.

Information and guidance provided by the government in Section L that is “unique” for each acquisition includes the number and type of documents to be provided in each proposal and the information that must be addressed in each document. Examples of documents and plans the government may require as part of each proposal in order to evaluate the Offeror’s experience, skills, processes, methodologies and management requirements include:

  • Program Management Plan
  • Hardware and Software Development Plans
  • Configuration Management Plan
  • Risk Management Plan
  • Test and Evaluation Plan

Extremely critical guidance provided in Section L by the government also includes the Factors that the Offeror must address in their proposal to be considered “responsive” to that RFP. If a proposal does not satisfactorily address every factor and mandatory “requirement” in an RFP, the Offeror’s proposal may be determined by the government to be “non-responsive” and disqualified from the contract selection process. The government typically specifies 5–10 non-price factors that must be addressed in each proposal. Examples of factors that typically may be addressed in a major system procurement include:

  • System performance
  • Product demonstrations
  • Hardware and software design
  • Reliability and maintainability
  • Configuration management
  • Test and evaluation
  • Engineering support
  • Logistics support
  • Training development and conduct
  • System installation and support
  • Management

Information that the government provides in Section M of a contract is even more critical for Offerors when they prepare their contract proposals. The purpose of Section M is to inform prospective Offerors exactly how the government is going to evaluate all proposals and select the winning company or companies. Three types of critical information provided in Section M are:

  • Basis for contract award,
  • Evaluation factors and the order of importance of the factors or the numerical value of each factor, and
  • Usage and definition of “strengths and weaknesses” if they are to be used as evaluation criteria.

Basis for contract award: There are different ways or methods used to determine the winner of each contract, such as “Best Value” or “technically acceptable and lowest price.” The “best value” concept is frequently used and is typically defined as follows:

This contract award will be determined by a best value source selection conducted in accordance with the agency acquisition management process. Best value will be based on an evaluation of all factors considered against the stated evaluation criteria. Award will be made to the Offeror whose proposal is determined to represent the best value to the Government. In making this determination, non-price factors are significantly more important than price. As the non-price differences among the proposals decrease, price will become relatively more important.

This clearly informs all Offerors that while the total proposed cost is important, the award will be primarily determined on the technical, or non-price, information provided in each proposal.

The first part of the “best value determination” is to explain in Section M how the factors will be evaluated or “scored.” There are two ways used typically to “score” the factors in a proposal.  One way of evaluating/scoring the non-price (i.e., technical) factors is to use a relative scale such as the following, which is based on having six non-price factors for simplicity:

Among the six non-price factors: Factor 1 and Factor 2 are equal in value. Factor 3 and Factor 4 are equal in value. Factor 5 and Factor 6 are equal in value. Factor 1 and Factor 2 combined are more important than Factor 3 and Factor 4 combined. Factor 3 and Factor4 combined are more important than Factor 5 and Factor 6 combined.

This information tells the Offerors which of the non-price factors in their proposals are most important to the government. The second type of scoring system used is to specify the exact value/percentage assigned to each non-price factor such as:

  • Factor 1 is assigned a maximum score of 30
  • Factors 2 and 3 are each assigned a maximum score of 20
  • Factors 4, 5, and 6 are each assigned a maximum score of 10

The second critical information that the government provides in Section M is whether the government will consider “strengths and weaknesses” when evaluating the proposals. A strength is defined as an element of an Offeror’s proposal which exceeds requirements and provides an especially good, innovative, or unique feature, or which provides added value and extra benefit to the government, such as improved performance. A weakness is defined as an element in the Offeror’s proposal that increases the likelihood of program failure or does not otherwise meet the requirements of the contract specification or statement of work (SOW).

If strengths and weaknesses are used to evaluate proposals the following methodology is frequently used as part of the overall rating for each proposal:

  • High strength rating – the impact of all strengths greatly outweighs the impact of all weaknesses
  • Moderate strength rating – the impact of strengths outweighs the impact of any weaknesses
  • No advantage or disadvantage – the impact of any strengths is equivalent to or somewhat outweighs the impact of any weaknesses
  • Moderate weakness rating – the impact of weaknesses outweighs the impact of any strengths
  • High weakness rating – the impact of all weaknesses greatly outweighs the impact of all strengths

In conclusion, the government provides a lot of necessary and critical information in Sections L and M of a contract RFP but the most important information provided in these Sections is what documents the government wants to evaluate, what non-price factors will be evaluated and how, and most importantly the score allocated for each non-price factor. This information specifically informs all Offerors how the government will determine the winner of each acquisition.

For more information on the critical tasks to successful project management, read the rest of my blog series. To learn more about our program management services, contact us.

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