Overview
FAR Subpart 36.3 outlines the specific procedures for a "Two-Phase" selection process for design-build construction contracts. This method is designed to narrow the field of potential contractors based on qualifications and technical competence in the first phase, before requiring the remaining top-tier offerors to submit expensive, detailed design and price proposals in the second phase.
Key Rules
- Suitability Criteria: The two-phase process is used when at least three offers are expected, and when the design effort required to bid is so substantial that it would be inefficient for all potential offerors to submit full proposals.
- Phase One Constraints:
- Evaluations focus on technical qualifications and approach (e.g., past performance, specialized experience).
- Cost or price-related factors are strictly prohibited during Phase One.
- The "Rule of Five": The Contracting Officer (CO) must specify the maximum number of offerors to be short-listed for Phase Two. This number cannot exceed five without formal documentation and high-level approval (Head of Contracting Activity for acquisitions >$5.5M).
- Phase Two Procedures: This phase follows FAR Part 15 (Negotiated Procurement) and requires both a technical proposal (design concepts, technical solutions) and a price proposal.
- Contract Type: The final award must be a single contract awarded via competitive negotiation.
Responsibilities
- Contracting Officer (CO):
- Determines if the two-phase method is appropriate during acquisition planning.
- Documents the rationale for the selection process in the contract file.
- Selects the "most highly qualified" offerors to move from Phase One to Phase Two.
- Ensures the number of short-listed firms is justified and approved.
- The Agency (Technical/Program Office):
- Responsible for developing a comprehensive Scope of Work (SOW) that defines project requirements, budget parameters, and schedules.
- If using a contractor to develop the SOW, they must ensure compliance with FAR Subpart 36.6 (Architect-Engineer Services).
- Head of Contracting Activity (HCA):
- Provides mandatory approval for any solicitation that intends to invite more than five offerors to Phase Two for projects exceeding $5.5 million.
Practical Implications
- Reduction in Bid Protest Risks: By vetting qualifications in Phase One, agencies reduce the likelihood of protests from unqualified firms later in the process.
- Incentivizing Industry Participation: Because detailed design work is costly, many high-quality firms will only bid if they know they are among a small group of finalists (the short-list). This subpart protects industry from excessive "bid burn" (sunk costs on unsuccessful proposals).
- Administrative Burden: While this method improves the quality of the final design, it is administratively "heavy." The requirement for a two-stage evaluation and the formal approvals needed to exceed five finalists mean that the procurement timeline is usually longer than a standard sealed bid.
- Quality Over Price (Initially): This subpart allows the government to focus entirely on "who is the best for the job" before price even enters the conversation, making it ideal for highly complex or specialized infrastructure projects.