§ 1834.7003-3 - Down-selection milestones.

The Phase B contracts should be structured to allow for down-selection at a discrete performance milestone such as a significant design review or at contract completion. This will avoid time gaps between phases and eliminate unnecessary duplication of effort and the need to terminate the remaining Phase B efforts of an unsuccessful Phase C/D offeror. However, the appropriate contract structure must reflect program technical objectives as well as schedule considerations. For example, if the acquisition strategy calls for formal completion of Phase B effort at Preliminary Design Review (PDR), but it is not financially practical or technically necessary for Phase C/D award and performance to carry all Phase B contractors through PDR, the Phase B contracts should be structured with a basic period of performance through a significant, discrete milestone before PDR with a priced option for effort from that milestone to PDR. The down-selection would occur at the earlier milestone, the PDR option exercised only for the down-selection winner, and Phase C/D performance begun at the completion of the PDR option. Any down-selection milestone must ensure that sufficient design maturity exists to allow for an informed selection decision leading to a successful completion of Phase C/D.