36.606 Negotiations
Source: FAR 36.606 on acquisition.gov
FAR 36.606 mandates a structured negotiation process for architect-engineer contracts, emphasizing modern design methods, subcontracting limits, and clear procedures if negotiations fail.
Overview
FAR 36.606 outlines the procedures for negotiating architect-engineer (A-E) contracts after the final selection of firms. It establishes that negotiations begin with the most preferred firm and must follow FAR Part 15 procedures, including fee limitations. The section emphasizes the importance of allowing firms to propose modern design methods, such as computer-assisted design, and requires the contracting officer to discuss these methods if not included in the proposal. It also prohibits awarding construction contracts to the design firm (with limited exceptions) and highlights the need to negotiate and agree on subcontracting arrangements. If negotiations fail with the top firm, the process continues with the next firm on the list until a satisfactory contract is reached or all options are exhausted, at which point the selection authority may be consulted for further action.
Key Rules
- Initiation of Negotiations
- Negotiations start with the most preferred firm and must follow FAR Part 15 procedures, including fee limitations.
- Proposal Requests and Modern Design Methods
- Contracting officers should request proposals that allow for modern design methods and discuss these if not included.
- Construction Contract Restriction
- Firms that design a project generally cannot be awarded the construction contract for that project, except as allowed by FAR 36.209.
- Subcontracting Agreements
- Subcontracting must be negotiated and limited to firms agreed upon during negotiations, per the prescribed clause.
- Negotiation Failure Procedures
- If negotiations fail, the process moves to the next firm, and if all fail, the selection authority may direct further action.
Responsibilities
- Contracting Officers: Conduct negotiations per FAR Part 15, ensure proposals allow for modern methods, discuss computer-assisted design, enforce subcontracting limits, and follow procedures if negotiations fail.
- Contractors: Submit proposals that may include modern design methods, negotiate subcontracting arrangements, and comply with restrictions on construction contract awards.
- Agencies: Oversee the negotiation process and consult with the selection authority if no contract can be negotiated.
Practical Implications
- This section ensures a fair, transparent negotiation process for A-E contracts, prioritizing qualifications and modern design practices. It prevents conflicts of interest in construction awards and requires clear agreements on subcontracting. Common pitfalls include failing to allow for modern design methods, not properly documenting negotiation failures, or exceeding subcontracting limits.
(a) Unless otherwise specified by the selection authority, the final selection authorizes the contracting officer to begin negotiations. Negotiations shall be conducted in accordance with part 15 of this chapter, beginning with the most preferred firm in the final selection (see 15.404-4(c)(4)(i) on fee limitation).
(b) The contracting officer should ordinarily request a proposal from the firm, ensuring that the solicitation does not inadvertently preclude the firm from proposing the use of modern design methods.
(c) The contracting officer shall inform the firm that no construction contract may be awarded to the firm that designed the project, except as provided in 36.209.
(d) During negotiations, the contracting officer should seek advance agreement (see 31.109) on any charges for computer-assisted design. When the firm’s proposal does not cover appropriate modern and cost-effective design methods (e.g., computer-assisted design), the contracting officer should discuss this topic with the firm.
(e) Because selection of firms is based upon qualifications, the extent of any subcontracting is an important negotiation topic. The clause prescribed at 44.204(b), Subcontractors and Outside Associates and Consultants (Architect-Engineer Services) (see 52.244-4), limits a firm’s subcontracting to firms agreed upon during negotiations.
(f) If a mutually satisfactory contract cannot be negotiated, the contracting officer shall obtain a written final proposal revision from the firm, and notify the firm that negotiations have been terminated. The contracting officer shall then initiate negotiations with the next firm on the final selection list. This procedure shall be continued until a mutually satisfactory contract has been negotiated. If negotiations fail with all selected firms, the contracting officer shall refer the matter to the selection authority who, after consulting with the contracting officer as to why a contract cannot be negotiated, may direct the evaluation board to recommend additional firms in accordance with 36.602.