48 CFR Part 2115 — Contracting by Negotiation

PART 2115—CONTRACTING BY NEGOTIATION Authority: 5 U.S.C. 8716; 40 U.S.C. 486(c); 48 CFR 1.301. Source: 58 FR 40375, July 28, 1993, unless otherwise noted. 2115.070 Negotiation authority. The authority to negotiate FEGLI Program contracts is conferred by 5 U.S.C. 8709. [58 FR 40375, July 28, 1993. Redesignated at 70 FR 41151, July 18, 2005] 2115.071 Specific retention periods: Contract clause. Unless the contracting officer determines that there exists a compelling reason to include only the contract clause specified by FAR 52.215-2, “Audit—Negotiation,” the contracting officer shall also insert the clause at 2152.215-70 in all FEGLI Program contracts. [58 FR 40375, July 28, 1993. Redesignated at 70 FR 41151, July 18, 2005] Subpart 2115.1—Source Selection Processes and Techniques 2115.170 Applicability. FAR subpart 15.1 has no practical application to the FEGLI Program because prospective contractors (insurance companies) are considered for inclusion in the FEGLI Program in accordance with criteria provided in 5 U.S.C. chapter 87, LIFAR 2109.7001, and LIFAR 2115.370. [70 FR 41151, July 18, 2005] Subpart 2115.2—Solicitation and Receipt of Proposals and Quotations 2115.270 Applicability. (a) FAR subpart 15.2 has no practical application to the FEGLI Program because 5 U.S.C. chapter 87 exempts the FEGLI Program from competitive bidding. (b) OPM will announce any opportunities to submit applications to provide life insurance through the FEGLI Program in insurance industry periodicals and other publications as deemed appropriate by OPM. The announcement will contain information on the address to which requests for application packages should be submitted and on deadline dates for submission of completed applications. (c) Eligible contractors (i.e., qualified life insurance companies) are identified in accordance with 5 U.S.C. 8709. Prospective contractors voluntarily come forth in accordance with procedures provided in section 2115.370. (d) OPM may approve one or more life insurance companies that, in its judgment, are best qualified to provide life insurance coverage to Federal enrollees. [58 FR 40375, July 28, 1993. Redesignated and amended at 70 FR 41151, July 18, 2005] Subpart 2115.3—Source Selection 2115.370 Applicability. FAR subpart 15.3 has no practical application to the FEGLI Program because prospective contractors (insurance companies) are considered for inclusion in the FEGLI Program in accordance with criteria provided in 5 U.S.C. chapter 87, LIFAR 2109.7001, and the following: (a) Applications must be signed by an individual with legal authority to enter into a contract on behalf of the company for the dollar level of claims and expenses anticipated. (b) Applications will be reviewed for evidence of substantial compliance in the following areas: (1) Management: (2) Marketing: (3) Legal expertise: (4) Financial condition: (5) Establishment of office: (6) Internal controls: [58 FR 40375, July 28, 1993. Redesignated and amended at 70 FR 41151, July 18, 2005] Subpart 2115.4—Contract Pricing 2115.402 Policy. Pricing of FEGLI Program premium rates is governed by 5 U.S.C. 8707, 8708, 8711, 8714a, 8714b, and 8714c. FAR subpart 15.4 will be implemented by applying cost analysis policies and procedures. To the extent that reasonable or good faith actuarial estimates are used for pricing, such estimates will be deemed acceptable and, if inaccurate, will not constitute defective pricing. [70 FR 41151, July 18, 2005] 2115.404-70 Profit. (a) Risk charge. (2) The risk charge is determined by agreement between the contractor and OPM. The amount of risk charge shall be specified in the contract. (b) Waiver of the risk charge. (2) Once agreement to relinquish the risk charge is made, the agreement may not be cancelled unless OPM and the Contractor mutually agree to reinstitute payment of a risk charge; or unless the Fund balance falls below the level defined in 2115.404-70(a) and 30 days' notice of cancellation is provided; or unless the Contractor or OPM provides notice of cancellation for any reason 1 year prior to the date cancellation is sought. (c) Any profit prenegotiation objective (service charge) will be determined on the basis of a weighted guidelines structured approach. [58 FR 40375, July 28, 1993. Redesignated and amended at 70 FR 41151, July 18, 2005] 2115.404-71 Profit analysis factors. (a) The OPM Contracting Officer will apply a weighted guidelines method when developing the prenegotiation objective (service charge) for the FEGLI Program contract. In accordance with the factors defined in FAR 15.404-4(d), OPM will apply the appropriate weights derived from the ranges specified in paragraph (b) of this section and will determine the prenegotiation objective based on the total dollar amount of the Contractor's Basic and Option C (family optional insurance) claims paid in the previous contract year. (1) Contractor performance. basic (2) Contract cost risk. (3) Federal socioeconomic programs. (4) Capital investments. (5) Cost control. (6) Independent development. (7) Transitional services. (b) The weight ranges for each factor to be used in the weighted guidelines approach are set forth in the following table: Profit factor Weight ranges 1. Contractor performance 0 to +.0005. 2. Contract cost risk +.000001 to +.00001. 3. Federal socioeconomic programs −.00003 to +.00003. 4. Capital investment 0 to +.00001. 5. Cost control −.0002 to +.0002. 6. Independent development 0 to +.00003. 7. Transitional services 0 to +.0007. [70 FR 41151, July 18, 2005]

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