[Federal Register Volume 60, Number 20 (Tuesday, January 31, 1995)]
[Proposed Rules]
[Pages 5888-5889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2334]



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ENVIRONMENTAL PROTECTION AGENCY

48 CFR Parts 1516 and 1552

[FRL-5147-4]


Acquisition Regulation

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: This document proposes to amend the EPA Acquisition Regulation 
(EPAAR) coverage on cost-plus-award fee (CPAF) contracts. The proposed 
rule is necessary to update and clarify EPA policy regarding CPAF 
contracts, and to give Contracting Officers greater flexibility in 
tailoring award fee plans to individual contracts.

DATES: Written comments on this proposed rule must be received on or 
before March 2, 1995.

FOR FURTHER INFORMATION CONTACT: Environmental Protection Agency, 
Office of Acquisition Management (3802F), 401 M Street SW, Washington, 
DC 20460, Attn: Louise Senzel (202) 260-6204.

SUPPLEMENTARY INFORMATION:

A. Background

    This proposed rule replaces sections 1516.404-270 through 1516.404-
274 and deletes 1516.404-275 through 1516.404-2710 of the EPAAR. EPA 
has determined that codification of the Agency's procedures for the 
award fee process is unnecessary since these procedures are internal to 
EPA. Consequently, EPA will include these internal procedures in an 
Agency Directive. Internal procedures are those which encompass any 
aspect of preparing, establishing, modifying, and administering the 
award fee plan. The revised EPAAR will only state the Agency's general 
policy and objectives in using award fee contracts.
    Award fee may be earned only when the contractor's performance is 
rated above satisfactory or excellent. No award fee may be earned if 
performance is rated satisfactory or unsatisfactory. This approach to 
cost-plus-award-fee contracts is designed to motivate contractors to 
achieve excellent performance and to improve cost-plus-award-fee 
contracting at EPA.
    Section 1516.405 is revised and Sec. 1552.216-75 is added to 
address base and award fee limitations in accordance with the FAR. 
Section 1552.216-70 is revised to clarify EPA's policy on the payment 
of fee under CPAF contracts.

B. Executive Order 12866

    This is not a major rule as defined in Executive Order 12866; 
therefore, no review is required by the Office of Management and Budget 
(OMB).

C. Paperwork Reduction Act

    The proposed rule does not contain any recordkeeping or information 
collection requirements that require the approval of OMB under 44 
U.S.C. 3501 et seq. 

D. Regulatory Flexibility Act

    The proposed rule will not have an impact on small entities within 
the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. 
since it does not impose any new requirements on contractors, large or 
small. The EPA certifies that this rule will not impact small entities. 
Therefore, no regulatory flexibility analysis has been prepared.

List of Subjects in 48 CFR Parts 1516 and 1552

    Government procurement.

    For the reasons set out in the preamble, parts 1516 and 1552 of 
title 48 of the Code of Federal Regulations are proposed to be amended 
as set forth below:
    1. The authority citation for parts 1516 and 1552 continues to read 
as follows:

    Authority: Sec 205(c), 63 Stat. 390, as amended, 40 U.S.C. 
486(c).

PART 1516--TYPES OF CONTRACTS

    2. Subpart 1516.4 is amended by revising sections 1516.404-270 
through 1516.404-274 to read as follows and by removing sections 
1516.404-275 through 1516.404-2710.


1516.404-270  Scope.

    This subsection establishes the EPA policy for cost-plus-award-fee 
(CPAF) type contracts.


1516.404-271  Applicability.

    Contracting Officers shall consider all contract actions conforming 
to the limitations of FAR 16.404-2(c) as candidates for award as a CPAF 
contract.


1516.404-272  Definitions.

    (a) Performance Evaluation Board (PEB). Group of Government 
officials responsible for assessing the quality of 
[[Page 5889]] contract performance and recommending the appropriate 
fee.
    (b) Fee Determination Official. Individual responsible for 
reviewing the recommendations of the PEB and making the final 
determination of the amount of award fee to be awarded to the 
contractor.


1516.404-273  Limitations.

    (a) No award fee may be earned if the Fee Determination Official 
determines that contractor performance has been satisfactory or less 
than satisfactory. A contractor may earn award fee only for performance 
rated above satisfactory or excellent. All award fee plans shall 
disclose to offerors the numerical rating necessary to be deemed 
``above satisfactory'' or ``excellent'' for award fee purposes.
    (b) The base fee shall not exceed three percent of the estimated 
cost of the contract, exclusive of the fee.
    (c) Unearned award fee may not be carried forward from one 
performance period into a subsequent performance period unless approved 
by the FDO.
    (d) The payment of award fee on a provisional basis is not 
authorized.


1516.404-274  Waiver.

    The Chief of the Contracting Office may waive the limitations in 
paragraphs (a), (b), and (c) of 1516.404-273 on a case-by-case basis 
when unusual or compelling circumstances exist. The waiver shall be 
supported by a justification and coordinated with the Procurement 
Policy Branch in the Office of Acquisition Management.
    3. Section 1516.405 is revised to read as follows:


1516.405  Contract clauses.

    (a) The Contracting Officer shall insert the clause at 1552.216-70, 
Award Fee, in solicitations and contracts when a cost-plus-award-fee 
contract is contemplated.
    (b) The Contracting Officer shall insert the clause at 1552.216-75, 
Base Fee and Award Fee Proposal (XXX 1994), in all solicitations which 
contemplate the award of cost-plus-award-fee contracts. The Contracting 
Officer shall insert the appropriate percentages in accordance with FAR 
15.903(d).

PART 1552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    4. Section 1552.216-70 is revised to read as follows:


1552.216-70  Award fee.

    As prescribed in 1516.405(a), insert the following clause:
AWARD FEE (XXX 1994)
    (a) The Government shall pay the contractor a base fee, if any, and 
such additional fee as may be earned, as provided in the award fee plan 
incorporated into the Schedule.
    (b) Award fee determinations made by the Government under this 
contract are unilaterally determined by the Fee Determination Official 
(FDO) and are not subject to appeal under the Disputes clause.
    (c) The Government may unilaterally change the award fee plan at 
any time, via contract modification, at least thirty (30) calendar days 
prior to the beginning of the applicable evaluation period. Changes 
issued in a unilateral modification are not subject to equitable 
adjustments, consideration, or any other renegotiation of the contract.

(End of Clause)

    5. Section 1552.216-75 is added to read as follows:


1552.216-75  Base fee and award fee proposal

    As prescribed in 1516.405(b), insert the following clause:
BASE FEE AND AWARD FEE PROPOSAL (XXX 1994)
    For the purpose of this solicitation, offerors shall propose a 
combination of base fee and award fee within the maximum fee limitation 
of ________% as stated in FAR 15.903(d). Base fee shall not exceed 3% 
of the estimated cost, excluding fee, and the award fee shall not be 
less than ________% of the total estimated cost, excluding fee. The 
combined percentage of base and award fee does not exceed ________% of 
the total estimated cost, excluding fee.

(End of Clause)

    Dated: January 6, 1995.
Betty L. Bailey,
Director, Office of Acquisition Management.
[FR Doc. 95-2334 Filed 1-30-95; 8:45 am]
BILLING CODE 6560-50-P