Chapter 6

Quality Control and Preaward Surveys

6-1. -- Quality Control Clause.

Each standard SOW contains a contractor quality control clause.  This clause provides specific implementation of the standard Inspection of Services clause normally present in service contracts.

a.     Contracting officers must pay particular attention to this requirement during the preaward survey and must make sure that the contractor provides a written quality control program prior to the contract start date.

b.     To aid contractors in developing a quality control program, the contracting officer must provide the government Quality Assurance (QA) Surveillance plan along with the Invitation for Bids or Request for Proposal.

c.     Make sure to mark the QA surveillance plan with the following statement:  “For Information Purposes Only.  This Quality Assurance surveillance plan is not part of the Request for Proposal or Invitation for Bids not will it be made part of any resulting contract.”  Use this statement since the government must retain the right to change or modify inspections methods.

d.       An example of a clause is as follows:

Quality Control

a.       Quality Control.  The contractor shall establish a complete quality control program to assure the requirements of the contract are provided as specified.  One copy of the contractor’s basic quality control program shall be provided to the Contracting Officer at the preaward survey conference or not later than at the pre-performance conference if a preaward survey is not conducted.  An updated copy must be provided the Contracting Officer on contract start date and as changes occur.  The program will include, but not be limited to the following:

(1)          An inspection system covering all the services stated in the Performance Requirements Summary of the Statement of Work.  It must specify areas to be inspected on either a scheduled or unscheduled basis and the individuals who will do the inspection.

(2)          A method of identifying deficiencies in the quality of services performed before the level of performance is unacceptable.

(3)          A file of all inspections conducted by the Contractor and the corrective action taken.  This documentation shall be made available to the Government during the term of the contract.

b.       Quality Assurance.  The Government shall monitor the Contractor’s performance under this contract using the quality assurance procedures specified in the Performance Requirements Summary of the Statement of Work.

6-2. -- Preaward Survey (PAS).

A SOW and a sound quality assurance surveillance plan go a long way toward making sure that quality results come from a contract.  The other essential ingredient is a good contractor.  The preaward survey helps the government insure that it awards the contract to a qualified bidder.  In other words, the contractor must be responsible as well as having the lowest price (or lowest evaluated price) before the government makes award.  The preaward survey is a method to determine responsibility.

6-3. -- Preaward Survey Clause.

Include a clause like the following, but adapted to the specified SOW:

Financial and Technical Ability.

a.       If a bid submitted in response to this solicitation is favorably considered, a two part preaward survey may be conducted to determine the bidder’s ability to perform.  Part One will be conducted by (Insert name of office) who may contact you to determine your financial capability to perform.  Current financial statements and pertinent data should be available at that time.  Part Two of the survey will be conducted at (Name/Location) shortly after bid opening by government personnel.

b.       If a preaward survey is conducted, you will be requested to have management officials, of the appropriate level, represent your firm.  In addition, your proposed project manager should be available to respond to questions raised during the preaward survey.  You should also be prepared to present a briefing regarding the manner in which you intend to accomplish your contractual obligations.  As a minimum, you should address the following items of information in your presentation (a written copy of the presentation with the backup data below must be submitted to the contracting officer 5 work days before the presentation):

(1)       Startup and phase-in schedule.

(2)       Key personnel letters of intent and resumes.

(3)       Availability of labor force, plan for recruiting, type and extent of training.

(4)       The role of the project manager and the extent of his/her authority.

(5)       Organizational and functional charts reflecting line of management responsibility.

(6)       Manning charts in a format requested by the contracting officer (only to be used to ensure that you understand the workload).

(7)       Plans and management procedures for logistical administrative support of all functions; that is, contractor furnished supplies and equipment and procedures for timely payment of personnel.

(8)       Procedures to be used to ensure contract requirements are met (quality control program).

(9)       Corporate experience, as evidenced by past and present contracts.

(10)       Other purchases for which you have bid and for which you are apparent low bidder.

Some negotiated and two-step forms of contracting use technical proposals to determine how well someone understands the statement of work.  Adapt the clause above and include it as evaluation factors in the solicitation.

6-4. -- Preaward Survey Method.

The contracting officer makes the decision to conduct a preaward survey based on knowledge of the bidder’s past performance.  When the contracting officer decides to conduct a preaward survey the guidelines in paragraphs 6-5 to 6-8 apply.  These guidelines are not hard and fast procedures and the contracting officer must adapt them to the specific survey requirements.

6-5. -- Preaward Survey Team.

This team can be composed of either acquiring activity or outside office support such as the Defense Contract Administration Service (DCAS) in the Department of Defense or both.  The PAS has two parts; that is, financial and technical.  The acquiring activity or the outside office can run the technical part, the acquiring activity should supplement the team with appropriate persons, such as the buyer, functional experts, etc.

6-6. -- Outside Office and the Acquiring Activity Perform the PAS.

The buyer takes the following actions as soon after bid opening as possible when an outside office performs the financial PAS and the acquiring activity performs the technical PAS:

a.     Request the outside office to perform that part of the PAS that is to be done by them (financial).

b.     Request information required by Financial and Technical Ability clauses from the bidder.  See paragraph 6-3 above.

c.     Send blank manning charts to the bidder for submission during the PAS.

d.     Emphasize to the bidder the importance of having a detailed quality control program for presentation at the PAS.

e.     Remind the functional person to have estimated manning charts available for the PAS.  These charts must estimate what contractor manning would be required to perform the requirement.  They may not estimate what it would take government personnel to accomplish the tasks.

f.     Coordinate the date of the PAS with the technical PAS team chief and the contractor.  Notify the contractor of the finalized date and location of the PAS.

g.     Perform the PAS.  Do all tasks in paragraph 6-7a thru d6-7g.

6-7. -- Technical Evaluation.

Perform the following tasks.

a.     Evaluate the adequacy of the financial PAS performed by the outside office.  Check the bidder’s financial statements if they are submitted.

b.     Thoroughly analyze manning charts submitted by the bidder.  The following procedures apply:

(1)       First, validate the government prepared contractor manning estimates.  Make sure the government did not overestimate.

(2)       Next, compare the bidder’s charts to the government estimate.  Insure that:

(a)          Bidder’s total manning is comparable to the estimate.  A variance of more than twenty percent should be considered suspect.

(b)          The bidder has the right classes of employees on duty at the appropriate times.

(c)          The bidder has sufficient personnel on duty during peak or key workload periods.

(3)       Next, analyze the contractor’s net bid to see if it will support the level of manning proposed.  Use the following procedures.

(a)          Compute total man-hours for each labor category in the wage determination.

(b)          Use a format similar to the following to compute the estimate of the contract price:

(4)       The bid price frequently may not support the total number of direct labor hours proposed by bidder on the manning charts.  Ask to see the bidder’s bid preparation sheets.  The bidder doesn’t have to show them but usually will if one explains the data is needed to verify that direct costs (labor, material, etc.) are not underestimated.  Once this information has been provided, retain it.  It may be helpful in the event of future negotiations.

c.     Make sure to have the latest supply consumption data if the bidder is going to furnish the supplies.  Compare this with bidder’s information (when provided) to insure that the bidder has not underestimated supplies.

d.       A serious underestimation of total costs, or a serious misapplication of the man-hours proposed, indicates a lack of understanding of contract requirements.  This is where the technical representative goes to work.  Interview the bidder and find out whether or not the bidder understands the job.

e.     Besides the total estimate, financial PAS and general evidence of competence, the next most important factor is the bidder’s proposed quality control plan.  This plan should be detailed enough for the PAS team to evaluate and determine that the bidder actually knows what to do.

f.     The bidder’s performance history is also a very important subject to be thoroughly covered by the PAS team.  Establish complete and thorough documentation if a determination of nonresponsibility is going to be based upon lack of tenacity, perseverance or integrity.

g.     PAS reports must state the facts, draw a conclusion based upon those facts and end with a recommendation to the contracting officer.

6-8. -- Outside Office Performs the PAS.

If an outside office such as DCAS is going to perform the financial and technical PAS, the buyer does the following:

a.     Ask the office to perform the PAS.  Indicate which particular acquiring activity will assist in the PAS.  Name the personnel in the request; for example, buyer, food services officer, etc.

b.     Provide all acquiring activity team members written guidance as to duties and responsibilities.  Provide it in enough time for members to study and fully understand their responsibilities.

c.     Insure that acquiring activity team members realize that the outside office is running the PAS, and that they understand that they have a very important input (the outside office may be lacking in a particular area of expertise that the acquiring activity provides).