[Federal Register Volume 60, Number 127 (Monday, July 3, 1995)]
[Rules and Regulations]
[Pages 34733-34734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16080]



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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 1

[FAC 90-29; FAR Case 95-10, Item I]
RIN 9000-AG55


Federal Acquisition Regulation; FAR Guiding Principles

AGENCY: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Federal Acquisition Regulatory Council agreed on a final 
rule to amend the Federal Acquisition Regulation (FAR) to incorporate 
the Statement of Guiding Principles. This regulatory action was not 
subject to Office of Management and Budget review under Executive Order 
12866, dated September 30, 1993.

EFFECTIVE DATE: July 3, 1995.

FOR FURTHER INFORMATION CONTACT:
Mr. Jack O'Neill at 202-501-3856 in reference to this FAR case. For 
general information, contact the FAR Secretariat, Room 4037, GS 
Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-29, 
FAR case 95-10.

SUPPLEMENTARY INFORMATION: 

A. Background

    On Friday, January 20, 1995, the Office of Federal Procurement 
Policy (OFPP), Office of Management and Budget, published in the 
Federal Register at 60 FR 4205, a Notice of Core Guiding Principles for 
the Federal Acquisition System. The OFPP, in accordance with a decision 
of the FAR Rewrite Board of Directors, then requested that the Core 
Guiding Principles be incorporated into the regulation. This final rule 
completes the action requested by the Board of Directors.

B. Regulatory Flexibility Act

    The final rule does not constitute a significant FAR revision 
within the meaning of FAR 1.501 and Public Law 98-577, and publication 
for public comments is not required. Therefore, the Regulatory 
Flexibility Act does not apply. However, comments from small entities 
concerning the affected subpart will be considered in accordance with 5 
U.S.C. 610. Such comments must be submitted separately and cite 5 
U.S.C. 601, et seq. (FAC 90-29, FAR case 95-10), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose recordkeeping or information collection 
requirements, or collections of information from offerors, contractors, 
or members of the public which require the approval of the Office of 
Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 1

    Government procurement.

    Dated: June 26, 1995.
C. Allen Olson,
Director, Office of Federal Acquisition Policy.

    Therefore, 48 CFR Part 1 is amended as set forth below:
    1. The authority citation for 48 CFR Part 1 continues to read as 
follows:
    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 
2473(c).

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

1.102-1.105 [Redesignated as 1.103-1.106]

    2. Subpart 1.1 is amended by redesignating sections 1.102 through 
1.105 as 1.103 through 1.106 and adding new sections 1.102 through 
1.02-4 to read as follows:


1.102  Statement of guiding principles for the federal acquisition 
system.

    (a) The vision for the Federal Acquisition System is to deliver on 
a timely basis the best value product or service to the customer, while 
maintaining the public's trust and fulfilling public policy objectives. 
Participants in the acquisition process should work together as a team 
and should be empowered to make decisions within their area of 
responsibility.
    (b) The Federal Acquisition System will--
    (1) Satisfy the customer in terms of cost, quality, and timeliness 
of the delivered product or service by, for example--
    (i) Maximizing the use of commercial products and services;
    (ii) Using contractors who have a track record of successful past 
performance or who demonstrate a current superior ability to perform; 
and
    (iii) Promoting competition;
    (2) Minimize administrative operating costs;
    (3) Conduct business with integrity, fairness, and openness; and
    (4) Fulfill public policy objectives.
    (c) The Acquisition Team consists of all participants in Government 
acquisition including not only representatives of the technical, 
supply, and procurement communities but also the customers they serve, 
and the contractors who provide the products and services.
    (d) The role of each member of the Acquisition Team is to exercise 
personal initiative and sound business judgment in providing the best 
value product or service to meet the customer's needs. In exercising 
initiative, Government members of the Acquisition Team may assume if a 
specific strategy, practice, policy or procedure is in the best 
interests of the Government and is not addressed in the FAR nor 
prohibited by law (statute or case law), Executive order or other 
regulation, that the strategy, practice, policy or procedure is a 
permissible exercise of authority.


1.102-1  Discussion

    (a) Introduction. The statement of Guiding Principles for the 
Federal Acquisition System (System) represents a concise statement 
designed to be user-friendly for all participants in Government 
acquisition. The following discussion of the principles is provided in 
order to illuminate the meaning of the terms and phrases used. The 
framework for the System includes the Guiding Principles for the System 
and 

[[Page 34734]]
the supporting policies and procedures in the FAR.
    (b) Vision. All participants in the System are responsible for 
making acquisition decisions that deliver the best value product or 
service to the customer. Best value must be viewed from a broad 
perspective and is achieved by balancing the many competing interests 
in the System. The result is a system which works better and costs 
less.


1.102-2  Performance standards.

    (a) Satisfy the customer in terms of cost, quality, and timeliness 
of the delivered product or service. (1) The principal customers for 
the product or service provided by the System are the users and line 
managers, acting on behalf of the American taxpayer.
    (2) The System must be responsive and adaptive to customer needs, 
concerns, and feedback. Implementation of acquisition policies and 
procedures, as well as consideration of timeliness, quality and cost 
throughout the process, must take into account the perspective of the 
user of the product or service.
    (3) When selecting contractors to provide products or perform 
services the Government will use contractors who have a track record of 
successful past performance or who demonstrate a current superior 
ability to perform.
    (4) The Government must not hesitate to communicate with the 
commercial sector as early as possible in the acquisition cycle to help 
the Government determine the capabilities available in the commercial 
marketplace. The Government will maximize its use of commercial 
products and services in meeting Government requirements.
    (5) It is the policy of the System to promote competition in the 
acquisition process.
    (6) The System must perform in a timely, high quality, and cost-
effective manner.
    (7) All members of the Team are required to employ planning as an 
integral part of the overall process of acquiring products or services. 
Although advance planning is required, each member of the Team must be 
flexible in order to accommodate changing or unforeseen mission needs. 
Planning is a tool for the accomplishment of tasks, and application of 
its discipline should be commensurate with the size and nature of a 
given task.
    (b) Minimize administrative operating costs. (1) In order to ensure 
that maximum efficiency is obtained, rules, regulations, and policies 
should be promulgated only when their benefits clearly exceed the costs 
of their development, implementation, administration, and enforcement. 
This applies to internal administrative processes, including reviews, 
and to rules and procedures applied to the contractor community.
    (2) The System must provide uniformity where it contributes to 
efficiency or where fairness or predictability is essential. The System 
should also, however, encourage innovation, and local adaptation where 
uniformity is not essential.
    (c) Conduct business with integrity, fairness, and openness. (1) An 
essential consideration in every aspect of the System is maintaining 
the public's trust. Not only must the System have integrity, but the 
actions of each member of the Team must reflect integrity, fairness, 
and openness. The foundation of integrity within the System is a 
competent, experienced, and well-trained, professional workforce. 
Accordingly each member of the Team is responsible and accountable for 
the wise use of public resources as well as acting in a manner which 
maintains the public's trust. Fairness and openness require open 
communication among team members, internal and external customers, and 
the public.
    (2) To achieve efficient operations, the System must shift its 
focus from ``risk avoidance'' to one of ``risk management.'' The cost 
to the taxpayer of attempting to eliminate all risk is prohibitive. The 
Executive Branch will accept and manage the risk associated with 
empowering local procurement officials to take independent action based 
on their professional judgment.
    (d) Fulfill public policy objectives. The System must support the 
attainment of public policy goals adopted by the Congress and the 
President. In attaining these goals, and in its overalll operations, 
the process shall ensure the efficient use of public resources.


Sec. 1.102-3  Acquisition team.

    The purpose of defining the Federal Acquisition Team (Team) in the 
Guiding Principles is to ensure that participants in the System are 
identified--beginning with the customer and ending with the contractor 
of the product or service. By identifying the team members in this 
manner, teamwork, unity of purpose, and open communication among the 
members of the Team in sharing the vision and achieving the goal of the 
System are encouraged. Individual team members will participate in the 
acquisition process at the appropriate time.


Sec. 1.102-4  Role of the acquisition team.

    (a) Government members of the Team must be empowered to make 
acquisition decisions within their areas of responsibility, including 
selection, negotiation, and administration of contracts consistent with 
the Guiding Principles. In particular, the contracting officer must 
have the authority to the maximum extent practicable and consistent 
with law, to determine the application of rules, regulations, and 
policies, on a specific contract.
    (b) The authority to make decisions and the accountability for the 
decision made will be delegated to the lowest level within the System, 
consistent with law.
    (c) The Team must be prepared to perform the functions and duties 
assigned. The Government is committed to provide training, professional 
development, and other resources necessary for maintaining and 
improving the knowledge, skills, and abilities for all Government 
participants on the Team, both with regard to their particular area of 
responsibility within the System, and their respective role as a team 
member. The contractor community is encouraged to do likewise.
    (d) The System will foster cooperative relationships between the 
Government and its contractors consistent with its overriding 
responsibility to the taxpayers.
    (e) The FAR outlines procurement policies and procedures that are 
used by members of the Acquisition Team. If a policy or procedure, or a 
particular strategy or practice, is in the best interest of the 
Government and is not specifically addressed in the FAR, nor prohibited 
by law (statute or case law), Executive order or other regulation, 
Government members of the Team should not assume it is prohibited. 
Rather, absence of direction should be interpreted as permitting the 
Team to innovative and use sound business judgment that is otherwise 
consistent with law and within the limits of their authority.
[FR Doc. 95-16080 Filed 6-30-95; 8:45 am]
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