[Federal Register Volume 61, Number 65 (Wednesday, April 3, 1996)]
[Proposed Rules]
[Pages 14946-14947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8015]




[[Page 14945]]

_______________________________________________________________________

Part V

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Parts 9, 35, and 37



Federal Acquisition Regulation; OFPP Policy Letter 93-1, Management 
Oversight of Service Contracting; Proposed Rule

  Federal Register / Vol. 61, No. 65 / Wednesday, April 3, 1996 / 
Proposed Rules  

[[Page 14946]]


DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 9, 35, and 37

[FAR Case 94-008]
 RIN 9000-AG86


Federal Acquisition Regulation; OFPP Policy Letter 93-1, 
Management Oversight of Service Contracting

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

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council are proposing amendments to the Federal 
Acquisition Regulation to provide agency guidance on the management of 
service contracts. This regulatory action was not subject to Office of 
Management and Budget review under Executive Order 12866, dated 
September 30, 1993.

DATES: Comments should be submitted on or before June 3, 1996 to be 
considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat (VRS), 18th & F 
Streets, NW, Room 4037, Washington, DC 20405. Please cite FAR case 94-
008 in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: Mr. Peter O'Such at (202) 501-1759 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 FAR case 94-008.

SUPPLEMENTARY INFORMATION:

A. Background

    On May 24, 1994, the Office of Federal Procurement Policy (OFPP) 
reissued, as a final policy letter, and published in the Federal 
Register (59 FR 26818), Policy Letter 93-1, entitled ``Management 
Oversight of Service Contracting''. The policy letter provides 
Governmentwide guiding principles which are intended to improve the 
acquisition, management, and administration of service contracts.
    The proposed FAR rule removes references to advisory and assistance 
services at 9.505-3; removes the reference to OMB Circular No. A-120, 
``Guidelines for the Use of Advisory and Assistance Services'' from 
35.017-2(i); clarifies 37.000; adds paragraphs (d) through (g) to 
37.102 to address additional agency responsibilities concerning service 
contracts in general; and adds a new Subpart 37.5, Management Oversight 
of Service Contracts, to address FAR implementation of OFPP Policy 
Letter 93-1.

B. Regulatory Flexibility Act

    The proposed changes may have a significant economic impact on a 
substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because it 
implements OFPP Policy Letter 93-1, Management Oversight of Service 
Contracting, which establishes Governmentwide policies concerning 
contracting for services. These changes will affect the manner in which 
Federal agencies will develop requirements for, award, manage, and 
administer contracts for services which, in turn, will affect each 
small entity which is awarded a contract for services. An Initial 
Regulatory Flexibility Analysis (IRFA) has been prepared and will be 
provided to the Chief Counsel for Advocacy for the Small Business 
Administration. A copy of the IRFA may be obtained from the FAR 
Secretariat. Comments are invited. Comments from small entities 
concerning the affected FAR subpart will be considered in accordance 
with 5 U.S.C. 610. Such comments must be submitted separately and 
should cite 5 U.S.C. 601, et seq. (FAR Case 94-008), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
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 Parts 9, 35, and 37

    Government procurement.

    Dated: March 26, 1996.
Edward C. Loeb,
Director, Federal Acquisition, Policy Division.

    Therefore, it is proposed that 48 CFR Parts 9, 35, and 37 be 
amended as set forth below:
    1. The authority citation for 48 CFR Parts 9, 35, and 37 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 9--CONTRACTOR QUALIFICATIONS

    2. Section 9.505-3 is revised to read as follows:


9.505-3  Providing evaluation services.

    Contracts for the evaluation of offers for products or services 
shall not be awarded to a contractor that will evaluate its own offers 
for products or services, or those of a competitor, without proper 
safeguards to ensure objectivity to protect the Government's interests.

PART 35--RESEARCH AND DEVELOPMENT CONTRACTING

    3. Section 35.017-2 is amended by revising paragraph (i) to read as 
follows:


35.017-2  Establishing or changing an FFRDC.

* * * * *
    (i) Quantity production or manufacturing is not performed unless 
authorized by legislation.
* * * * *

PART 37--SERVICE CONTRACTING

    4. Section 37.000 is revised to read as follows:


37.000  Scope of part.

    This part prescribes policy and procedures which are specific to 
the acquisition and management of services by contract. This part 
applies to all contracts for services regardless of the type of 
contract or kind of service being acquired. Additional guidance for 
research and development services is in part 35; architect-engineering 
services is in part 36; information resources is in part 39; and 
transportation services is in part 47. Parts 35, 36, 39, and 47 take 
precedence over this part in the event of inconsistencies. This part 
includes, but is not limited to, contracts for services to which the 
Service Contract Act of 1965, as amended, applies (see subpart 22.10).
    5. Section 37.102 is amended by adding paragraphs (d) through (g) 
to read as follows:


37.102  Policy.

* * * * *
    (d) Agency program officials are responsible for accurately 
describing the need to be filled, or problem to be resolved, through 
service contracting in a manner that assures full understanding and 
responsive performance by contractors and in so doing, should obtain 
assistance from contracting officials, as needed;

[[Page 14947]]

    (e) Agencies shall establish effective management practices in 
accordance with the OFPP Policy Letter 93-1, Management Oversight of 
Service Contracting, to prevent fraud, waste, and abuse in service 
contracting.
    (f) Services are to be obtained in the most cost-effective manner, 
without barriers to full and open competition, and free of any 
potential conflicts of interest.
    (g) Agencies shall ensure that sufficiently trained and experienced 
officials are available within the agency to manage and oversee the 
contract administration function.
    6. Subpart 37.5 is added to read as follows:

Subpart 37.5--Management Oversight of Service Contracts

Sec.
37.500  Scope of subpart.
37.501  Definition.
37.502  Exclusions.
37.503  Agency-head responsibilities.
37.504  Contracting officials responsibilities.


37.500  Scope of subpart.

    This subpart establishes responsibilities for implementing Office 
of Federal Procurement Policy (OFPP) Policy Letter 93-1, Management 
Oversight of Service Contracting.


37.501  Definition.

    Best practices, as used in this subpart, means techniques that 
agencies may use to help detect problems in the acquisition, management 
and administration of service contracts. Best practices are practical 
techniques gained from experience that agencies may use to improve the 
procurement process.


37.502  Exclusions.

    (a) This subpart does not apply to services that are (1) obtained 
through personnel appointments and advisory committees; (2) obtained 
through personal service contracts authorized by statute; (3) for 
construction as defined in FAR 36.102; or (4) obtained through 
interagency agreements where the work is being performed by in-house 
Federal employees.
    (b) Services obtained under contracts below the simplified 
acquisition threshold and services incidental to supply contracts are 
excluded from coverage of this subpart. Good management practices and 
contract administration techniques should be used regardless of the 
contracting method.


37.503  Agency-head responsibilities.

    The agency head or designee should ensure that--
    (a) Requirements for services are clearly defined and appropriate 
performance standards are developed so that the agency's requirements 
can be understood by potential offerors and that performance in 
accordance with contract terms and conditions will meet the agency's 
requirements.
    (b) Service contracts are awarded and administered in a manner that 
will provide the customer its goods and services within budget and in a 
timely manner.
    (c) Specific procedures are in place before contracting for 
services to assure compliance with OFPP Policy Letters 92-1, Inherently 
Governmental Functions, 91-2, Service Contracting, and 89-1, Conflicts 
of Interest Policies Applicable to Consultants.
    (d) Strategies are developed and necessary staff training is 
initiated to assure effective implementation of the policies in FAR 
37.102.


37.504  Contracting officials responsibilities.

    Contracting officials should ensure that ``best practices'' 
techniques are used when contracting for services and in contract 
management and administration (see OFPP Policy Letter 93-1).

[FR Doc. 96-8015 Filed 4-2-96; 8:45 am]
BILLING CODE 6820-EP-P