Research and Development Contracts Richard Hartmann Chief

Research and Development Contracts Richard Hartmann Chief, DMID Research Contracts Branch A National Institute of Allergy and Infectious Diseases George Kennedy Lead Contracting Officer, DMID Research Contracts Branch A National Institute of Allergy and Infectious Diseases

Contents • • R&D contract spending at the NIH Contracts vs. Grants Types of Contracts R&D contract examples The award process Where to look for contract opportunities References 2

• Contracting offices are organized to service one or more I/Cs. Consolidated Operations Acquisition Centers (COAC) Institutes / Centers Included CC CC NCI, NCCIH NHLBI, CSR, NIAMS, NIDCR, NIBIB, NHGRI NIAID NICHD, NIAAA, FIC NIDA, NINDS, NIMH, NIA, NCATS NIEHS NITAAC NLM, CIT, NIDDK OLAO NEI, NIDCD, NIGMS, ORS, OD, NINR, NIMHD ORF NIH Facilities 3

Breakdown of Solar Chart IC COACs Contracts R&D Non R&D Sim. Acq. Total CC CC $9. 7 M $. 075 M $9. 6 M $74 M $83 M NCI, NCCAM $480 M $413 M $67. 5 M $394. 8 M $875 M NHLBI NIDA, NINDS, NIMH, NIA, NCATS $201 M $106 M $94. 9 M $116 M $317 M NIAID, HHS BIODEFENSE $459 M $374. 9 M $84. 4 M $254 M $713 M *OLAO, NINR, NIMHD, NEI, ORS, NIDCD, NIGMS, OD, NITAAC $51 M $6. 2 M $44. 8 M $248 M $299 M **ORF ORF, ALL NIH FACILITIES RELATED ACQUISITIONS $120 M $0 $119. 6 M $311 M $431 M NIEHS $102 M $81. 8 M $20 M $37 M $139 M NLM, NIDDK, CIT, OD $117 M $2. 4 M $114. 9 M $459 M $576 M NICHD, NIAAA, FIC $67 M $41 M $26. 5 M $104 M $171 M NIDA, NINDS, NIMH, NIA, NCATS $147 M $118. 4 M $28. 5 M $324 M $471 M • • • HCA – Total $4. 77 B: COAC – R&D Contracts $1. 143 B; Non R&D Contracts $611 M; Simplified Acquisitions (Sim. Acq. ) $2. 93 B. DELEGATED – Purchase Cards $250 M; Delegated Community $130 M; BPA Calls $243 M. *OLAO – (NITAAC) $71 M – Rob Coen **ORF – Leases = $95. 50 M – added into the Non R&D Total. 4

NIH FY 2015 R&D Contract Obligations by COAC $1. 14 B Shows R&D Contracts in total dollars and percentage of total dollars for each COAC. Data also includes modifications. ORF and NITAAC = $0. Dollars are in Millions. 5 Chart 2. 1

NIH FY 2015 Top 10 R&D Vendors Vendor Name Total Dollars • Leidos Biomedical Research, Inc. $580. 5 M • Westat, Inc. • Battelle Memorial Institute • Duke University Medical Center $ 38. 0 M • SRI International $ 32. 8 M • Advanced Bioscience Laboratories, LLC $ 31. 1 M • EMMES Corporation $ 29. 7 M • Johns Hopkins University $ 28. 8 M • Social and Scientific Systems, Inc. $ 26. 5 M • Technical Resources, Inc. $ 26. 3 M $102. 4 M $ 40. 7 M Total R&D dollars include awards made by COAC and IC Delegated offices for R&D only: Contracts/IDVs; Purchase Orders; Delivery/Task Orders; and BPA calls. Does not include P-Card transactions. 6

NIH FY 2015 Small Business Goals Percentages are based on the number of eligible dollars, per small business goal, divided against the eligible total small business dollars for NIH in FY 2015. Data derived from the FPDS-ng Small Business Goaling Report. *In FY 2015 NIH did not have a Veteran Owned Small Business goal, therefore 0% has been noted. 7 Chart 10

Contracts vs. Grants CONTRACTS • To acquire goods or services for the direct use or benefit of the government. • Government has a greater degree of control and monitoring. • Governed by large body of statutes, regulations and policies: • Competition in Contracting Act (CICA) • Federal Acquisition Regulations (FAR) • HHS Acquisition Regulations (HHSAR) GRANTS • To provide assistance to accomplish a public purpose. • Less government control than a contract. • Governed by a separate body of law. Overlap: human subjects and animal research; financial conflicts of interest; salary rate limitations; cost principles 8

Types of Contracts (FAR Part 16) • Fixed Price • Used when risk is minimal, or can be predicted with an acceptable degree of certainty. • Examples: Firm-Fixed-Price; Fixed-Price w/ Economic Price Adjustment; Fixed-Price, Incentive • Preferred type; required for Commercial Items, Sealed Bidding • Cost Reimbursement • Used only when requirements cannot be defined sufficiently, or uncertainties do not permit costs to be estimated with sufficient accuracy. • Examples: Cost; Cost-Plus-Fee (Fixed, Incentive, Award); CPFFCompletion; CPFF-Term • Indefinite-Delivery • Used when exact time/exact quantities are not known at time of contract award. • Work is awarded through Delivery/Task Orders • Examples: Definite-Quantity; Indefinite-Quantity; Requirements 9

R&D Contracts • Usually cost type • Payment typically made on a monthly basis • Government may fully fund the contract at award or funding may be divided based upon the government’s requirement. • Deliverables (e. g. monthly & annual reports; small business subcontracting reports; information security). • Contracting Officer & Contracting Officer’s Representative 10

Examples of NIH R&D Contracts • Therapeutics against pathogens • Vaccine development (e. g. ebola vaccine) • Animal research support (e. g. animal model development) • Protocol development • Clinical research studies • Reagent development • Clinical data coordination • Biologic specimen repository 11

R&D Contracts – Award Process • Acquisition Planning & Market Research • Solicitation • Proposal Evaluation • Technical/Peer Review • Cost • Past Performance • Negotiation • Source Selection 12

Acquisition Planning & Market Research • Define requirement – Concept clearance for R&D contract projects – Develop statement of work (SOW) & deliverable requirements – Prepare independent government cost estimate (IGCE) • Market research – Mechanisms: Request for Information (RFI); Sources Sought Notice – Who can do the work? • Are there small businesses that can do the work? • Contract structure – Fixed price; cost; hybrid? – One or multiple awards? (IDIQ? ) – Funding: type of appropriation; non-severable or severable; base and options? – Period of performance • Evaluation Criteria: Technical, Cost, Past Performance • Source Selection Method: Tradeoffs? 13

Solicitation • Posted on Fed. Biz. Opps for a minimum of 45 days • Types of solicitations: – Request for Proposals (RFP) for defined requirements – Broad Agency Announcement (BAA) for areas of interest – SBIR Omnibus for research topics • Competition – Full and Open or Limited – Small Business Set Aside • Pre-Proposal Questions & Answers and Conferences • Amendments • Proposal Submission: Technical & Business Proposals 14

Proposal Evaluation: Peer Review • Technical proposals reviewed by NIH staff prior to release to peer review committee. • 75% of peer review group members must not be government employees. • Peer review group does not see business proposal. • Effect of page limitations (check the solicitation) 15

Proposal Evaluation - Technical • Proposal evaluated based on the technical criteria stated in solicitation. – Examples: Understanding of the Project; Technical Approach; Management Plan; Personnel Qualifications; Facilities – Numerical scores – Peer review committee • Scientific Review Officer chairs the committee. CO & COR attend review sessions but are not members of the technical review committee. • Members provide scores/ratings and comments on strengths, weaknesses, deficiencies and technical acceptability. • SRO prepares written minutes of the review. 16

Proposal Evaluation - Cost • For R&D contracts, offerors usually need to provide details on: labor; subcontracts; consultants; travel and other direct costs; fringe benefits; overhead or other indirect costs and profit (where applicable). • COR & CO review the proposed costs and compare it with the IGCE and with other proposals. • Costs must be realistic and reasonable. • Common mistakes: salary rates exceed limitations; profit margins exceed limitations; options not priced; travel costs exceed rate limitations; unallowable costs 17

Past Performance Evaluation • Offerors provide references for similar work. • Government may obtain information from any source (PPIRS; past performance questionnaires). • Variety of rating methods available, though only 1 will be used. • If there is no relevant past performance available, the offeror may not be evaluated favorably or unfavorably. 18

Negotiation • Competitive Range Determination • “Discussions” – Government must tell offerors all deficiencies and significant weaknesses in the proposal and adverse past performance information. – Government can also negotiate price. – Offeror has opportunity to revise its proposal. • Distinct from “clarifications” – Offeror responds to information requests from the government but does not have an opportunity to revise the proposal 19

Source Selection • Tradeoff – Appropriate when it may be in the best interest of the Government to consider award to other than the lowest priced offeror or other than the highest technically rated offeror. – Example language: • Selection of an offeror for contract award will be based on an evaluation of proposals against three factors. The factors in order of importance are: technical, cost, and past performance. Although technical factors are of paramount consideration in the award of the contract, past performance and cost/price are also important to the overall contract award decision. All evaluation factors other than cost or price, when combined, are significantly more important than cost/price. The Government intends to make an award(s) to that offeror whose proposal provides the best overall value to the Government. 20

Tradeoff Example Technical Ranking Evaluation Score Offeror Proposed Cost Ranking 1 95 ACME, Inc. $2, 000 2 2 85 MYOB & Co. $1, 750, 000 1 Assume that both offerors have similar past performance evaluations. If ACME, Inc. is selected for award, the Government will have to justify spending more money for the extra cost of the proposal over MYOB & Co. If the Government selected MYOB & Co. for award, it would have to explain why ACME Inc. ’s higher technical merit is not worth the additional cost. 21

Tradeoffs Not all selections require a trade-off. If a proposal has the highest technical rating and the lowest cost, a tradeoff is not required. You would select that proposal. (Again, assume past performance is similar). Technical Evaluation Offeror Proposed Cost Ranking Score 1 95 ACME, Inc. $1, 500, 000 1 2 75 MYOB & Co. $2, 000 2 Also, you would not need to perform a tradeoff if proposals receive equal technical evaluations. In that case, cost may be the deciding factor. (Assuming past performance is similar). Technical Ranking Evaluation Score Offeror Proposed Cost Ranking 1 85 ACME, Inc. $1, 000 2 1 85 MYOB & Co. $900, 000 1 22

Where to look: Fed. Biz. Opps 23

Where to look: HHS Procurement Forecast 24

References • Fed. Biz. Opps: www. fbo. gov • HHS Procurement Forecast: procurementforecast. hhs. gov • Federal Acquisition Regulations: www. acquisition. gov • HHS Acquisition Regulations: http: //www. hhs. gov/grants/contractpolicies-regulations/hhsar/index. html • Peer Review Regulations: 42 CFR Part 52 h • NIH Manual Chapters: http: //oma 1. od. nih. gov/manualchapters/scripts/mcs/browse. asp • NIH Office of Acquisition and Logistics Management: oalm. od. nih. gov 25