POLICY AND PROCEDURE FOR

ADMINISTRATION OF CONTRACTUAL ARRANGEMENTS

PURPOSE. This statement prescribes the policy and procedures for
the award and administration of contractual arrangements, including
the use of outside consultants.

GENERAL POLICY. It is the Corporation policy to procure services
and goods:

In a manner consistent with overall Corporation goals as
prescribed by the Energy Security Act of 1980, Public Law
96-294.

In accordance with best commercial practice and generally consistent with federal procurement policy.

From the highest quality sources at the lowest reasonable cost.

In a timely manner with due consideration to efficiency
and economy.

By dealing openly and fairly with the professional and
business communities.

III. CONSIDERATIONS FOR USE OF OUTSIDE CONSULTANTS. The following matters are to be considered prior to requesting the use of any outside consultants:

a.

b.

Adequacy of objectives and methodology of the study for which
the individual firm is to be engaged. The Corporation must
have a specific and well-defined need for expertise not presently
available within the Corporation and for which it is either
infeasible or undesirable to add to the staff. Factors to be
considered when determining desirability include: need for
objectivity; non-recurring nature of the task; critical timing;
unique expertise required to resolve the issue; physical
location of a particular assignment.

Degree to which the Corporation retains ultimate responsibility. While consultants as independent contractors will have a fair amount of latitude in determining the details of performance, the consulting agreement (as any other administrative contract) should reserve exclusively to the Corporation major decisionmaking authority with respect to the final product.

9/29/81

Whether the consultation can and should be obtained at zero or
reduced charge. Non-profit or professional organizations
frequently provide services to public organizations on a no
cost or low cost basis. In addition, any organization whose
self-interest and reputation would be enhanced through a
formal association with the Corporation may be willing to
contribute its time.

Each major consultant contract, aside from all other considerations,
should be subjected to an analysis comparing its cost to the
cost of developing an in-house capability.

Sensitivity of the subject and need to limit outsiders who
will be given information.

Use of outside consultants sometimes involves a potential
conflict of interest problem for the Corporation and the
consultant. This area is very sensitive, and safeguards
necessary to avoid even the appearance of a potential conflict
place a burden on both parties-e.g., the Corporation could
become embroiled in burdensome investigations and reviews, or
consultants could be asked to forego work in areas related to
its task for the Corporation.

Qualifications of the individual or firm with regard to the
specific Corporation need. Previous experience with a particular
consultant may be useful for evaluative purposes, but should
not be the only basis for selection or a sole source award.

Consideration of efforts elsewhere in the Corporation that may be related to the matter for which the individual or firm is being engaged. This would serve to prevent duplicative efforts as well as to suggest ways in which the task could be expanded to serve more than one purpose.

Whether expertise is needed for general consultation rather
than a specific task. If a task cannot be specifically defined,
outside consultants should not be used. Rather, consideration
should be given to hiring an individual expert as an employee
of the Corporation. As an employee, the individual would be
subject to appropriate restrictions in the areas of financial
interests, conflict of interest, and safeguarding Corporation
information.

Persons in this category should be employed in accordance with
established Corporation personnel procedures.

RESPONSIBILITIES.

A. Delegation of Authority

The Chairman of the Board is the Contracting Officer for
the Corporation.

9/29/81

B.

C.

The Vice President of Administration will serve as Contracting
Officer for the Corporation, for awards not exceeding
$25,000.

Procurement Office

All contracts for goods and services will be solicited,
negotiated, awarded and administered by the procurement
office, under the authority of the Vice President of
Administration.

Program Office (Corporation user)

The Corporation user will be responsible for the following:

V. PROCEDURES

A.

Determining and coordinating the need for goods or
services to meet overall corporate goals;

Planning the procurement so that adequate time exists for
acquisition of the service or goods (including coordination
with the procurement office);

Completing procurement request form (Exhibit 1) and
necessary attachments, and forwarding to procurement
office;

Participating in preparation of solicitation document;

Assuming primary responsibility for technical evaluation
of proposals received;

Participating with the procurement officer in negotiations;
Participating in the recommendation for award; and

Monitoring the contract performance, including review and
approval of the services or deliverables.

Normally, the professional services and studies procured by
the Corporation will be acquired through negotiated contracts.
In such cases, proposals shall be solicited through the issuance
of a solicitation document (RFP) from enough qualified sources
to assure adequate competition. Those contacted shall be
furnished the following information in writing:

(1) The nature and scope of work;

9/29/81

B.

C.

D.

E.

F.

(2) Time to be allowed for performance;

(3) Any general background and specific experience requirements
that may apply; and

(4) Type of contract and other ground rules for the procurement,
including the basis for evaluation of proposals and award
of contracts.

A proposal shall be requested from enough sources to provide
adequate competition, and shall describe:

(1) The offeror's plan for performing the work;

(2) The resources that will be applied to perform the work;
(3) The offeror's qualifications and experience; and
(4) Relevant details as to price.

From those contacted, the Contracting Officer shall select, in
collaboration with the Corporation user, those whose offers
appear most advantageous to the Corporation, other factors as
well as price considered.

Offerors shall be given a common cutoff date for receipt of
all modifications of their offers, and upon completion of all
meetings and written submissions by the offerors, the Contracting
Officer and the Corporation user shall review and analyze the
offers and select that firm whose offer is determined to be in
the best interest of the Corporation. A record of the reasons
for the selection, covering the strengths and weaknesses of
each of the offers, and the rationale supporting the final
selection shall be included in the contract file.

An appropriate contract award document shall be prepared by the Contracting Officer, acceptable to the General Counsel and the Corporation user. This document shall be offered to and executed by the firm selected by the Corporation, and then, assuming all required approvals have been obtained, executed by the Contracting Officer.

After award, those not selected shall be so notified.

VI. PROCUREMENT REQUESTS. No procurement action shall be instituted without a written Procurement Request (Form SFC 103 F011) signed by an authorized representative of the Vice President of the requiring office and the Budget Officer, who determines that the amount of funds estimated for the procurement are available.

The Contracting Officer may waive the requirement for a written
procurement request where time does not permit its preparation, in
which case a written Procurement Request will be prepared as soon
as possible to confirm the requested action. The Contracting
Officer will initiate procurement action upon receipt of a Procurement
Request and keep the requiring office advised as to progress.

9/29/81

VII. INTERIM CONTRACT ARRANGEMENTS.

Where time does not permit the

execution of a formal contract between the parties, the Contracting
Officer may issue an informal letter contract as an interim arrangement
until a formal contract can be prepared. However, this interim
arrangement must contain all terms of the formal contract that can
be agreed upon at the time of award and shall provide an enforceable
mechanism for formalization. Interim arrangements shall be formalized

as soon as practicable after issuance.

VIII. COMPETITION. Contract awards shall be based on competition whenever practical. Sole source awards shall be limited to situations where time is of the essence or where, for all practical purposes, only one source can perform the contract. Sole source selections shall be supported by a memorandum prepared by the Corporation user and approved by the Contracting Officer, which sets forth the justifying circumstances.

IX. CONTRACT STATUS REPORTING. As part of the Corporation management information system, the Contracting Officer will prepare a monthly contract status report for submission to the Chief Operating Officer and for distribution to all Corporation Officers.

X.

CONTRACT ADMINISTRATION. Requirements for monthly progress and financial reporting will be incorporated into every contract to the extent considered reasonable and necessary. The proper administration of contracts requires the cooperation of the various Corporation departments involved, including the responsible program office, procurement office, and accounting office.

9/29/81