13.106-3 Award and documentation
Source: FAR 13.106-3 on acquisition.gov
Contracting officers must ensure and document price reasonableness, maintain minimal but sufficient records, and comply with notification and TIN requirements for simplified acquisitions.
Overview
FAR 13.106-3 outlines the requirements for awarding contracts and documenting procurement actions under simplified acquisition procedures. The section emphasizes the need for contracting officers to determine price reasonableness before making an award, using competitive quotations when possible. If only one response is received, the contracting officer must document the basis for price reasonableness using various acceptable methods, such as market research or comparison to previous purchases. The regulation also addresses how to handle minimum order quantities that exceed requirements, requiring communication with the requiring activity and proper documentation. Documentation requirements are kept minimal but must be sufficient to support management review and justify the award decision. Special documentation is required in cases of limited competition, use of non-price factors, or lowest price technically acceptable (LPTA) selections (except DoD). Notification to unsuccessful suppliers is only required upon request or as specified, and brief explanations must be provided if the award was based on factors other than price. For oral solicitations, the contractor’s Taxpayer Identification Number (TIN) and organization type must be included in the award documentation sent to the payment office, with disclosure of potential government use of the TIN for debt collection purposes.
Key Rules
- Price Reasonableness Determination
- Contracting officers must determine and document that the price is fair and reasonable before award, using competitive quotes or other justifiable methods if only one response is received.
- Minimal Documentation
- Maintain only essential records to support the award, including supplier names, prices, and terms for oral solicitations, and brief notes for written solicitations below the simplified acquisition threshold.
- Special Situations Documentation
- Additional statements are required for lack of competition, use of non-price factors, or LPTA (except DoD), and for minimum order issues.
- Notification and Explanation
- Notify unsuccessful suppliers only if requested or required, and provide brief explanations if award is based on non-price factors.
- Taxpayer Identification Number (TIN) Requirement
- For oral solicitations, ensure the award document sent to the payment office includes the contractor’s TIN and organization type, and disclose government use of TIN for debt collection.
Responsibilities
- Contracting Officers: Must determine price reasonableness, document the basis for award, maintain minimal but sufficient records, handle special documentation situations, provide notifications and explanations as required, and ensure TIN requirements are met.
- Contractors: Should be prepared to provide information supporting price reasonableness and understand that TIN and organization type will be used for government reporting and debt collection.
- Agencies: Must retain procurement documentation for management review and ensure compliance with notification and documentation requirements.
Practical Implications
- This section ensures transparency and accountability in simplified acquisitions, balancing efficiency with proper documentation. Contracting officers must be diligent in documenting price reasonableness and award decisions, especially when competition is limited. Failure to properly document or notify can lead to audit findings or procurement delays. Contractors should be aware of the documentation and notification processes, especially regarding TIN disclosure and the basis for award decisions.
(a) Basis for award. Before making award, the contracting officer must determine that the proposed price is fair and reasonable.
(1) Whenever possible, base price reasonableness on competitive quotations or offers.
(2) If only one response is received, include a statement of price reasonableness in the contract file. The contracting officer may base the statement on-
(i) Market research;
(ii) Comparison of the proposed price with prices found reasonable on previous purchases;
(iii) Current price lists, catalogs, or advertisements. However, inclusion of a price in a price list, catalog, or advertisement does not, in and of itself, establish fairness and reasonableness of the price;
(iv) A comparison with similar items in a related industry;
(v) The contracting officer’s personal knowledge of the item being purchased;
(vi) Comparison to an independent Government estimate; or
(vii) Any other reasonable basis.
(3) Occasionally an item can be obtained only from a supplier that quotes a minimum order price or quantity that either unreasonably exceeds stated quantity requirements or results in an unreasonable price for the quantity required. In these instances, the contracting officer should inform the requiring activity of all facts regarding the quotation or offer and ask it to confirm or alter its requirement. The file shall be documented to support the final action taken.
(b) File documentation and retention. Keep documentation to a minimum. Purchasing offices shall retain data supporting purchases (paper or electronic) to the minimum extent and duration necessary for management review purposes (see subpart 4.8). The following illustrate the extent to which quotation or offer information should be recorded:
(1) Oral solicitations. The contracting office should establish and maintain records of oral price quotations in order to reflect clearly the propriety of placing the order at the price paid with the supplier concerned. In most cases, this will consist merely of showing the names of the suppliers contacted and the prices and other terms and conditions quoted by each.
(2) Written solicitations (see 2.101). For acquisitions not exceeding the simplified acquisition threshold, limit written records of solicitations or offers to notes or abstracts to show prices, delivery, references to printed price lists used, the supplier or suppliers contacted, and other pertinent data.
(3) Special situations. Include additional statements, when applicable—
(i) Explaining the absence of competition (see 13.106-1 for brand name purchases) if only one source is solicited and the acquisition does not exceed the simplified acquisition threshold (does not apply to an acquisition of utility services available from only one source);
(ii) Supporting the award decision if other than price-related factors were considered in selecting the supplier; and
(iii) Except for DoD, when using lowest price technically acceptable source selection process, justifying the use of such process.
(c) Notification. For acquisitions that do not exceed the simplified acquisition threshold and for which automatic notification is not provided through an electronic commerce method that employs widespread electronic public notice, notification to unsuccessful suppliers shall be given only if requested or required by 5.301.
(d) Request for information. If a supplier requests information on an award that was based on factors other than price alone, a brief explanation of the basis for the contract award decision shall be provided (see 15.503(b)(2)).
(e) Taxpayer Identification Number. If an oral solicitation is used, the contracting officer shall ensure that the copy of the award document sent to the payment office is annotated with the contractor’s Taxpayer Identification Number (TIN) and type of organization (see 4.203), unless this information will be obtained from some other source (e.g., centralized database). The contracting officer shall disclose to the contractor that the TIN may be used by the Government to collect and report on any delinquent amounts arising out of the contractor’s relationship with the Government (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section7701(c)(3)&num=0&edition=prelim" target="_blank">31 U.S.C. 7701(c)(3)).