National Cancer Institute, Research Contracts Branch, PSAS, 6120 Executive Blvd, EPS/Room 638, Bethesda, MD 20892-7227

R -- PROFESSIONAL, ADMINISTRATIVE, AND MANAGEMENT SUPPORT SERVICES SOL RFQ-NCI-00084-NQ DUE 041000 POC Cynthia Brown, Purchasing Agent, 301-402-4509,Todd Cole, Contract Officer This is a combined synopsis/solicitation prepared in accordance with the Federal Acquisition Regulation Part 13, as supplemented with additional information included in this notice. This announcement constitutes the only solicitation, and a separate written solicitation will not be issued. This solicitation, No. RFQ-NCI-00084-NQ will include all applicable provisions and clauses in effect through FAR FAC 97-15. This solicitation is set-aside for small businesses. The Standard Industrial Code is 8748 and the business size standard is $5.0 Million. BACKGROUND: Pursuant to the Federal Technology Transfer Act (FTTA), the National Institutes of Health (NIH) has a significant program in patenting and licensing inventions with commercial potential. The Office of Technology Transfer (OTT) currently handles patent prosecution and licensing for the NIH and the Food and Drug Administration (FDA). OTT enters into approximately 150-200 new licenses each year. Our active license load currently consists of approximately 700 royalty-generating licenses. The OTT has been delegated the authority to grant licenses of PHS owned technology (including the technologies of the NIH and the Food and Drug Administration) and 37 CFR 404.4 establishes that federally owned technologies shall be made available for licensing as deemed appropriate in the public interest. In order to foster technology development and maintain the integrity of licenses and patents derived through technology transfer, OTT must maintain effective license monitoring procedures. This is accomplished by monitoring activities in each license through developmental stages, the review of audits required under OTT licenses, and through special reviews conducted by contractors when certain concerns arise. Developmental stages are agreed to benchmarks within the license agreement. The benchmarks become objective criteria by which the licensing specialist may review progress of the licensee. As part of the PHS license agreement, licensees are required to submit semi-annual or annual progress reports, which document the licensee's progress with respect to the benchmarks. The licensing specialist reviews the reports and determines whether or not the licensee is in compliance with the terms of the executed license agreement(s). When sales are involved, the licensee must submit reports on annual sales along with payment in accordance with the terms of the individual agreements. The licensing specialists ensure that the amounts are in compliance with the terms of he license. In instances where product sales are in excess of $2 Million annually, the terms of most agreements provide for the conducting of audits to ensure the reliability of sales figures and royalties to NIH. In 1999, OTT, via the contract mechanism, conducted an audit of Bristol-Myers Squibb (BMS), and the audit recovered a significant amount of underpaid royalties for the National Cancer Institute, NCI. This recovery was based on the audit findings that BMS was underpaying royalties to the NIH on sales to some countries and not to others. Since this royalty recovery, underpayment of NIH royalties has apparently continued, and actual payments do not reflect the total sales of Videx (ddi/dda), the subject compound that generates these royalties. Consequently, it is necessary for NIH to conduct another audit of BMS for the period of 1999 in order to capture underpaid royalties for countries where Videx sales continue. BMS is already aware that NIH plans to reaudit them very soon. This audit will satisfy the program goals and maintain the integrity of OTT. Under the aforementioned audit the Office of Technology Transfer conducted an independent royalty audit of Bristol-Myers Squibb for licenses L-020-88/0 for Videx and L-277-96/0 for Taxol in order to confirm whether the royalties paid to NIH were a true reflection of the gross sales of the products. The audit concluded that BMS neither overpaid nor underpaid royalties on sales of the above licensed products for the period 1/1/95 through 6/30/97. NIH judged the audit to be unsatisfactory and therefore believes that a re-audit should be conducted by an independent auditing firm that specializes in royalty audits. REQUIREMENT: The Office of Technology Transfer, NIH requires services from a royalty auditing firm to provide reviews of licensee progress and/or sales records in order to determine if NIH has received proper royalty payment for use of NIH technologies. In addition, the Contractor shall ensure that the licensee is in compliance with the terms of the license agreement. Upon request, the Government will make portions of this license available in order to provide an understanding of the required audit. The contractor shall provide these services to the Office of Technology Transfer (OTT), NIH. The Contractor shall conduct an audit on the Videx (L-020-88) product. The base audit shall cover the period from April 1, 1999 to December 31, 1999. In addition, there shall be two, one month options that can be unilaterally exercised at anytime by the Government within twelve months of the issuance of the purchase order. The options shall focus on performing an audit for a stated six month period for 2000 (e.g., January -- June 2000 and July -- December 2000). Specifically, the Contractor shall test the gross sales figures for all areas where this product was sold and shall verify that Bristol-Myers Squibb accounted for all the licensed products. The audit shall emphasize those countries that are not included on the royalty reports from BMS for the designated period to be audited. (NOTE: Since the royalty reports and most recent audits are proprietary to BMS, they can only be released to the successful offeror upon signing a confidentiality disclosure form.) In addition, a detailed calculation of royalties owed, relative to this license and in accordance with the subject license agreement, shall be performed by the Contractor. Specifically, using appropriate accounting and auditing procedures, the Contractor shall conduct a limited audit that includes at least the following elements: 1) The Contractor shall conduct a compliance review as a preliminary preparation to the actual audit. This process shall include a thorough briefing with the Government project officer prior to initiating work; a contract and license review; thorough review of the royalty statements of all previous periods, especially 1999; analysis of the licensee's payment history; an interview of the licensee to determine the type of accounting system and data availability; preparation and mailing of audit confirmation letters to the licensee; and compliance review program formulation. 2) Based on the information accumulated under the compliance review preparation (See item 1) above), the contractor shall conduct an on and off-site compliance review. 3) Upon completion of the actual audit (within three work days), the Contractor shall conduct an exit interview with the licensee to present the findings and to provide the licensee an opportunity to explain and/or correct any deficiencies found during the review. In addition, a written, post-review report shall be prepared and delivered to the project officer on the final date of the period of performance with a debriefing of the findings. The debriefing and written report shall contain all relevant raw data, auditing procedures, findings, analyses of reported findings, and conclusions; at a minimum, the report shall address the following: a. Comparison of data submitted with the licensee's own internal records; b. Comparison of licensee inventory with reported production of licensed product; c.Comparison of licensee shipping and receiving records; d.Determination of methods used and analysis of licensee calculations of royalties for each licensed product; e. Determination of the methods used and analysis of licensee's input of sales data for each licensed product; f. Comparison of location of licensee's sales force with location of reporting offices; g. Analysis of periodic sales fluctuation over period relative to season or period of licensee's fiscal year; h. Analysis of currency valuation versus licensee's sales reporting for sales in foreign currencies; i. Comparison of sales volume of products which are complimentary to the licensees product for the same reporting period. During the performance period, the contractor shall travel to Princeton, NJ or where the sales records are kept in order to conduct this audit. It is estimated that one trip for the base period and each option is required for three FTEs. The Contractor shall only be reimbursed for reasonable travel costs that are allowable under Government travel regulations. In performing the work herein, the Contractor shall provide eighty (80) direct labor hours during the base period of performance. The labor hours exclude vacation, sick leave, and holidays. In addition, the Contractor shall perform eighty (80) direct labor hours during each optional period of performance, if exercised. Therefore, if the base and all options are exercised, the Contractor shall provide 240 hours of effort. On the final date of the base period of performance and each optional period, the Contractor shall deliver a report as described in the scope of work herein for the stated auditing period. The Contractor shall submit one computerized disk containing the final report and two hard copies to the Project Officer. PERIOD OF PERFORMANCE: The Base Period of Performance for this purchase order is from April 17, 2000 to May 16, 2000. In addition, there shall be two additional, one month options that can be unilaterally exercised at anytime by the Government within twelve months of the issuance of the purchase order. If exercised, the anticipated period of performance for each option will be: Option 1 -- June 30, 2000 through July 29, 2000 and Option 2 -- January 2, 2001 through February 1, 2000 EVALUATION AND CRITERIA: The technical portion of quotations will receive paramount consideration in selecting a vendor. However, price will also be a significant factor in the event that two or more vendors are determined to be essentially equal following the evaluation of technical factors. Although offerors must price out the base and each option separately in their quotations, the price evaluation will encompass the total dollar amount for the base plus all options. The technical portion of quotations shall be evaluated based on the following technical evaluation criteria: 1) Understanding of the auditing requirement and proposed technical approach to conducting the necessary royalty audits (35 points), inclusive of: a) Understanding internal billing procedures, including assignment and management; b) Methodology used during the initial evaluation and in determining if further investigation is necessary; and c) Assurance that no conflict of interests persist and that such conflicts are avoided throughout performance of the requirement. 2) Personnel (35 points), inclusive of: a) Qualification of proposed staff; b) Suitability and adequacy of each auditor (provide names, telephone numbers and contact persons for each auditor as well as other supporting documentation) proposed with regard to education, training, and experience in conducting royalty audits; and c) Availability of proposed personnel for assignment to this project. 3) Corporate and organizational experience in auditing licenses and royalty auditing (30 points), inclusive of: a) Experience in conducting previous royalty reviews to ensure compliance with licenses; b) Administrative support of such auditing; and c) Assurance that no corporate conflict of interests persist. This solicitation incorporates the provisions at FAR Clause 52.213-4, Terms and Conditions Simplified Acquisitions. Offerors must submit a complete copy of Representations and Certifications, including the provision for the DUNS Number (FAR Clause 52.204-6), with their offer. The Representations and Certifications must be signed by an authorized representative of the offeror. Full text copies of the Terms and Conditions and the Representations and Certifications can be obtained from Cynthia Brown, Purchasing Agent on (301)402-4509 or by fax on (301)402-4513. In addition, Offerors must provide a written technical proposal, descriptive literature, information, and other materials in sufficient detail to demonstrate that they can perform the foregoing requirements as determined by the evaluation criteria herein. Offerors shall also submit a completed SF18, signed by an individual authorized to bind the organization, and a cost/price quotation. Offers/Quotations and all other materials must be submitted to Cynthia Brown at the listed address. Offers that fail to furnish the required information or reject the terms and conditions of the solicitation may be excluded from consideration. Offers/Quotations and related materials must be received in this office by 3:00 PM (local Washington, D.C. time) on April 10, 2000. No collect calls will be accepted. Please cite the solicitation number, RFQ-NCI-00084-NQ, on your quotation package. Posted 03/21/00 (W-SN436466). (0081)

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