[Federal Register Volume 61, Number 85 (Wednesday, May 1, 1996)]
[Rules and Regulations]
[Pages 19468-19473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10446]




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_______________________________________________________________________

Part VII





Department of Housing and Urban Development





_______________________________________________________________________



48 CFR Parts 2401, 2402, 2404, et al.



HUD Acquisition Regulation; Field Reorganization, Streamlining, and 
Simplification; Final Rule

  Federal Register / Vol. 61, No. 85 / Wednesday, May 1, 1996 / Rules 
and Regulations  

[[Page 19468]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

48 CFR Parts 2401, 2402, 2404, 2405, 2406, 2409, 2411, 2412, 2413, 
2414, 2415, 2416, 2417, 2419, 2420, 2426, 2428, 2429, 2432, 2434, 
2436, 2437, 2442, 2452 and 2453

[Docket No. FR-3887-F-02]
RIN No. 2535-AA23


Office of the Assistant Secretary for Administration; HUD 
Acquisition Regulation; Field Reorganization, Streamlining, and 
Simplification

AGENCY: Office of the Assistant Secretary for Administration, HUD.

ACTION: Final rule; technical amendments.

-----------------------------------------------------------------------

SUMMARY: The purpose of this final rule is to amend the HUD Acquisition 
Regulation (HUDAR) to: implement the Department's Field reorganization, 
particularly the establishment of the Administrative Service Centers; 
implement the Federal Acquisition Streamlining Act of 1994 (FASA); 
augment Departmental efforts to streamline and simplify the procurement 
process by removing unnecessary restrictions; make technical amendments 
to the interim rule; and, correct obsolete references.

EFFECTIVE DATE: May 31, 1996.

FOR FURTHER INFORMATION CONTACT: Edward L. Girovasi, Jr., Director, 
Policy and Evaluation Division, Office of Procurement and Contracts, 
Room 5262, 451 Seventh Street, SW., Washington, DC 20410-3000 (voice 
(202) 708-0294, TTY (202) 708-1112). (These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION:

Background

    The uniform regulation for the procurement of supplies and services 
by Federal departments and agencies, the Federal Acquisition Regulation 
(FAR), was promulgated on September 19, 1983 (48 FR 42102). The FAR is 
codified in title 48, chapter 1, of the Code of Federal Regulations. 
HUD promulgated its regulation to implement the FAR on March 1, 1984 
(49 FR 7696).
    The HUDAR (title 48, chapter 24 of the Code of Federal Regulations) 
is prescribed by the Assistant Secretary for Administration under 
section 7(d) of the Department of HUD Act (42 U.S.C. 3535(d)); section 
205(c) of the Federal Property and Administrative Services Act of 1949 
(40 U.S.C. 486(c)); the Secretary's delegation effective October 9, 
1985 (50 FR 42097); and the general authorization in FAR 1.301.
    On September 5, 1995 (60 FR 46152), the Department published an 
interim rule to amend the HUDAR to update existing coverage with 
respect to the Department's structure and organizational 
responsibilities, to implement the Federal Acquisition Streamlining Act 
(FASA) (Pub. L. 103-355, approved October 13, 1994), and to streamline 
Departmental procurement practices. This rule responds to public 
comment on the interim rule, and issues it as a final rule. This rule 
also removes unnecessary restrictions and corrects obsolete references.

Public Comments

    During the public comment period, one comment was received on the 
interim rule.
    The commenter expressed concern regarding the language at 
Sec. 2415.608(a)(2), which permits the identification of proposals 
submitted in a best value procurement as being either ``acceptable'', 
``unacceptable but capable of being made acceptable'', or 
``unacceptable.'' The interim rule stated, ``However, under 
solicitations where mandatory requirements are established, those 
proposals that do not meet the mandatory requirements may be found 
unacceptable without further review.''
    The commentor pointed out that this practice seems to set up a 
dichotomy between best value procurements and those with mandatory 
requirements, as though they are mutually exclusive. The commentor 
stated that if a proposal fails to meet a minimum requirement, it could 
be rejected as ``unacceptable'' without further review, which 
contradicted the ability to identify a proposal as ``unacceptable but 
capable of being made acceptable.'' The commentor stated that 
presumably, there will be many proposals that fail to meet one or more 
mandatory requirements in the initial round, but which, through minor 
clarification or even discussions, could easily be corrected to meet 
any such requirement. The commentor recommended that the language in 
the last sentence of Sec. 2415.608(a)(2) either be revised to be 
consistent with the preceding coverage, or deleted altogether.
    HUD agrees with the commentor and has deleted the last sentence of 
Sec. 2415.608(a)(2) in the final rule. The language as written in the 
interim rule could, to some extent, limit the Department's ability to 
select the best contractor. Potentially, the initial proposal 
representing the best value could be rejected as ``unacceptable'' for 
failing to meet a mandatory requirement of the solicitation, when the 
deficiency could possibly be corrected through minor clarification or 
discussions. Such a proposal may represent an outstanding offer in all 
other respects, but under the interim rule, it would have been rejected 
as ``unacceptable''. Requiring the Department to reject as 
``unacceptable'' any proposal that fails to meet a solicitation's 
mandatory requirements appears to defeat the purpose of a best value 
procurement. Removal of the last sentence resolves this problem. In 
addition, Sec. 2415.608(a)(2) and (3) are merged and redesignated as 
Sec. 2415.608(a)(3) to conform to a corresponding FAR change.

Additional Changes

    The following changes are also made by this rule:
    HUDAR 2401.102 through 2401.105 are redesignated as 2401.103 
through 2401.106, respectively, to conform to corresponding FAR 
structure recently published as FAC 90-29, effective July 3, 1995. The 
heading titles and regulation text are unchanged.
    HUDAR 2409.508 through 2409.508-2 are redesignated as 2409.507 
through 2409.507-2, respectively, to conform to the corresponding FAR 
structure. The regulation text is unchanged.
    HUDAR part 2412, Contract delivery performance, is redesignated as 
part 2411 and retitled to conform to the revised corresponding FAR 
structure published as FAC 90-32, effective October 1, 1995.
    HUDAR 2412.1, Delivery or performance schedules, is redesignated as 
Sec. 2411.4 to conform to the revised FAR structure published as FAC 
90-32, effective October 1, 1995. The regulation text is unchanged.
    HUDAR 2412.104, Contract clause, is redesignated as Sec. 2411.404 
to conform to the revised FAR structure published as FAC 90-32, 
effective October 1, 1995. The text is revised to simplify the 
prescriptive language.
    HUDAR 2413.106-2 is revised to reflect the changed procurement 
method name.
    HUDAR 2413.505-1 is revised to authorize the use of Form HUD-2542, 
Purchase Order and Payment Authorization, for any purchase using 
simplified acquisition procedures charged to the FHA Fund, and to 
remove information that is internal in nature.
    HUDAR 2414.406, Mistakes in bids, is redesignated as Sec. 2414.407 
to conform to the FAR structure revision published as FAC 90-29, 
effective July 3, 1995.
    HUDAR 2414.406-3, Other mistakes disclosed before award, is 
redesignated as Sec. 2414.407-3 to conform to the FAR structure 
revision published as FAC 90-

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29, effective July 3, 1995. The regulation text is unchanged.
    HUDAR 2414.406-4, Mistakes after award, is redesignated as 
Sec. 2414.407-4 to conform to the FAR structure revision published as 
FAC 90-29, effective July 3, 1995. The regulation text is revised to 
clarify that the concurrence of counsel should be obtained at 
headquarters or the field, depending on the location of the contracting 
activity.
    The heading HUDAR 2414.408, Award, is added to conform to the FAR 
structure revision published as FAC 90-29, effective July 3, 1995.
    HUDAR 2414.407-70, Award when only one bid is received, is 
redesignated as Sec. 2414.408-70 to conform to the revised FAR 
structure published in FAC 90-29, effective July 3, 1995. The 
regulation text is unchanged.
    HUDAR 2415.407, Solicitation provisions, contains numerous 
revisions to remove unnecessary restrictions, simplify the prescriptive 
language, tailor proposal content to the specific solicitation, and 
reduce paperwork burdens placed on offerors. The revisions will give 
contracting officers more latitude when requesting other than certified 
cost or pricing data in accordance with FAR 15.804-5(a)(2), and will 
clarify distinctions in procedures when using the ``lowest-priced 
technically acceptable proposal'' or ``best value'' approach to source 
selection.
    HUDAR 2415.413-1, Alternate I, is amended to eliminate 
unnecessarily restrictive requirements regarding the evaluation of 
proposals. This revision will allow the Department the flexibility to 
have proposal evaluations performed by the most competent technical and 
management sources available.
    HUDAR 2415.413-2, Alternate II, is added to establish a procedure 
consistent with the FAR for instances when it is necessary for external 
parties to evaluate proposals to meet the Department's evaluation 
needs.
    In HUDAR 2415.605, Evaluation factors, paragraphs (c) and (e) are 
renumbered to conform to the revised FAR structure published as FAC 90-
31, effective October 1, 1995.
    HUDAR 2415.1004, Protests against award, is renumbered to conform 
to the revised FAR structure published as FAC 90-31, effective October 
1, 1995. The text of the regulation is unchanged.
    HUDAR 2416.504, Indefinite-quantity contracts, is renumbered to 
Sec. 2416.506, and the title is revised to Solicitation provisions and 
contract clauses, to conform to recent FAR changes published in the 
Federal Register September 26, 1995 as FAC 90-33, effective October 1, 
1995. Paragraph (e) is redesignated as a new section, Sec. 2416.506-70, 
Unpriced delivery/task orders, to more accurately reflect the text. The 
text of the regulation is unchanged.
    HUDAR subpart 2417.2, Options, and Sec. 2417.204(e), Contracts, are 
added in accordance with FAR 17.204(e) to give the Department more 
flexibility for the acquisition of supplies or services and to 
establish the Senior Procurement Executive as the approving official 
for solicitations and contracts where the total of the basic and option 
periods exceed 5 years.
    HUDAR part 2419, Small business and small disadvantaged business 
concerns, is retitled to conform to the revised FAR structure published 
as FAC 90-32, effective October 1, 1995.
    HUDAR 2419.201, General policy, contains numerous revisions to 
include reference to women-owned small businesses to conform to 
corresponding revisions in the FAR published as FAC 90-32, effective 
October 1, 1995.
    HUDAR subpart 2419.7, Subcontracting with small businesses and 
small disadvantaged business concerns, is retitled to conform to the 
revised FAR structure published as FAC 90-32, effective October 1, 
1995. The regulation text is unchanged.
    HUDAR subpart 2419.9, Contracting opportunities for women-owned 
small businesses, is removed in its entirety to conform to 
corresponding FAR changes published as FAC 90-32, effective October 1, 
1995.
    HUDAR part 2420, Labor surplus area concerns, is removed in its 
entirety and reserved to conform to the revised FAR structure published 
as FAC 90-32, effective October 1, 1995.
    HUDAR 2434.001, Definition, is removed in its entirety. The 
threshold for major system acquisitions is addressed in internal 
directives.
    In HUDAR 2437.110, Solicitation provisions and contract clauses, 
paragraph (f) is revised by removing the last sentence to simplify the 
prescriptive language. The forms identified in the clause prescription 
are specified in the clause and do not also need to be in the 
prescription.
    To remove unnecessary restrictions and reduce burdens on contractor 
and HUD personnel, the dollar threshold for requiring HUD Form 441.1, 
``Project Management System Baseline Plan'', contained in HUDAR 
2442.1106, Reporting requirements, is increased from $100,000 to 
$500,000. In addition, the text is revised to allow the use of the 
prescribed forms for contracts under $500,000, when determined 
necessary by the Contracting Officer.
    Accordingly, the prescription at HUDAR 2442.1107, Contract clause, 
is revised to reflect the increased dollar threshold of $500,000.
    HUDAR 2452.212-70, Contract period, is renumbered to conform to the 
revised FAR structure published as FAC 90-32, effective October 1, 
1995. The text of the regulation is corrected to cite the renumbered 
HUDAR reference and revised to simplify the prescriptive language.
    HUDAR 2452.215-70, Proposal content and outline, is revised to 
eliminate unnecessary restrictions and simplify the basic provision 
concerning proposal content. A new Alternate I is added for 
procurements using the lowest-priced technically acceptable approach to 
source selection. A new Alternate II is added for situations where the 
proposed contract requires work on, or access to, sensitive automated 
systems.
    HUDAR 2452.219-70, Small business and small disadvantaged business 
subcontracting plan, is retitled and the text is revised to include 
women-owned small businesses to conform to recent FAR changes published 
as FAC 90-32, effective October 1, 1995, to eliminate repetition and 
clarify the content of Alternate I.
    HUDAR 2452.237-75, Clearance of personnel, paragraph (a), is 
amended to revise the forms to be submitted in the event contractor 
personnel will be working on-site in any HUD office. The forms 
originally specified have changed and this amendment merely revises the 
paragraph to reflect the correct forms. Paragraphs (b) and (c) of the 
section remain unchanged.
    The prescriptive language at HUDAR 2452.242-71, Project management 
system, is revised to correspond to the clause prescription at HUDAR 
2442.1107. The text of the clause remains unchanged.

Other Matters

Paperwork Reduction Act

    The information collection requirements contained in this rule have 
been approved by the Office of Management and Budget in accordance with 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), and assigned 
OMB control number 2535-0091. An agency may not conduct or sponsor, and 
a person is not required to respond to, a collection of information 
unless the collection displays a valid control number.

Environmental Impact

    In accordance with 40 CFR 1508.4 of the regulations of the Council 
on

[[Page 19470]]

Environmental Quality and 24 CFR 50.20(k) of the HUD regulations, the 
policies and procedures contained in this rule relate only to the 
performance of accounting, auditing and fiscal functions and, 
therefore, are categorically excluded from the requirements of the 
National Environmental Policy Act.

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) has reviewed and approved this rule, and in so doing 
certifies that this rule will not have a significant economic impact on 
a substantial number of small entities. This rule merely makes 
amendments to the Department's acquisition regulations that simplify 
HUD's procurement process, revise internal HUD component references, 
and implement FAR revisions without adding additional requirements.

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under Section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this rule will not have substantial direct effects on 
States or their political subdivisions, or the relationship between the 
Federal government and the States, or on the distribution of power and 
responsibilities among the various levels of government. The rule makes 
technical revisions and corrections to the agency's regulations. As a 
result, the rule is not subject to review under the Order.

Executive Order 12606, The Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this rule will not have 
potential for significant impact on family formation, maintenance, and 
general well-being, and, thus, is not subject to review under the 
Order. The rule involves Departmental procurement procedures only.

List of Subjects in 48 CFR Parts 2401, 2402, 2404, 2405, 2406, 2409, 
2411, 2412, 2413, 2414, 2415, 2416, 2417, 2419, 2420, 2426, 2428, 2429, 
2432, 2434, 2436, 2437, 2442, 2452 and 2453

    Government procurement, HUD acquisition regulations.

    Accordingly, title 48, Chapter 24, of the Code of Federal 
Regulations is amended by adopting as final the interim rule published 
on September 5, 1995 (60 FR 46152), with the following changes:

PART 2401--FEDERAL ACQUISITION REGULATIONS SYSTEM

    1. The authority citation for part 2401 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).


2401.105  [Redesignated]

    2. Section 2401.105 is redesignated as 2401.106.


2401.104-2  [Redesignated]

    3. Section 2401.104-2 is redesignated as 2401.105-2.


2401.104  [Redesignated]

    4. Section 2401.104 is redesignated as 2401.105.


2401.103  [Redesignated]

    5. Section 2401.103 is redesignated as 2401.104.


2401.102  [Redesignated]

    6. Section 2401.102 is redesignated as 2401.103.

PART 2409--CONTRACTOR QUALIFICATIONS

    7. The authority citation for part 2409 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).


2409.508  [Redesignated]

    8. Section 2409.508 is redesignated as 2409.507.


2409.508-1  [Redesignated]

    9. Section 2409.508-1 is redesignated as 2409.507-1.


2409.508-2  [Redesignated]

    10. Section 2409.508-2 is redesignated as 2409.507-2.

PART 2412--CONTRACT DELIVERY OR PERFORMANCE

    11. The authority citation for part 2412 is revised to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

Part 2412  [Redesignated]

    12. Part 2412 is redesignated as Part 2411 and the heading is 
revised to read as follows:

PART 2411--DESCRIBING AGENCY NEEDS


2411.1  [Redesignated]

    13. Newly designated subpart 2411.1 is redesignated as 2411.4.


2411.104  [Redesignated]

    14. Newly designated 2411.104 is redesignated as 2411.404 and 
revised to read as follows:


2411.404  Contract clause.

    (a) The Contracting Officer may insert the clause at 48 CFR 
2452.211-70, Contract Period, in all solicitations and contracts.

PART 2413--SIMPLIFIED ACQUISITION PROCEDURES

    15. The authority citation for part 2413 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 41 U.S.C. 253; 42 U.S.C. 3535(d).

    16. Section 2413.106-2 is revised to read as follows:


2413.106-2  Data to support purchases.

    (d) Contracting officers may use Form HUD-24007, Purchase/Delivery 
Order Data File, to record all relevant data pertaining to a purchase 
using simplified acquisition procedures, including recording written 
and oral quotations received and documenting orders against GSA 
contracts.
    17. Section 2413.505-1 is revised to read as follows:


2413.505-1  Optional Form (OF) 347, order for supplies and services, 
and Optional Form 348, order for supplies and services schedule-
continuation.

    (b) For purchases charged to the FHA Fund using simplified 
acquisition procedures, contracting officers may use Form HUD-2542, 
Purchase Order and Payment Authorization.

PART 2414--SEALED BIDDING

    18. The authority citation for part 2414 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 41 U.S.C. 253; 42 U.S.C. 3535(d).


2414.406  [Redesignated]

    19. Section 2414.406 is redesignated as 2414.407.


2414.406-3  [Redesignated]

    20. Section 2414.406-3 is redesignated as 2414.407-3.


2414.406-4  [Redesignated]

    21. Section 2414.406-4 is redesignated as 2414.407-4, and revised 
to read as follows:


2414.407-4  Mistakes after award.

    (d) For determinations under FAR 14.407-4(b) (1) and (2), the Head 
of the Contracting Activity will obtain the concurrence of legal 
counsel before notification to the Contractor. The Contracting Officer 
shall be notified promptly of action to be taken.
    22. A new section, ``2414.408 Award,'' is added immediately 
following redesignated 2414.407-4, to read as follows:

[[Page 19471]]

2414.408  Award.


2414.407-70  [Redesignated]

    23. Section 2414.407-70 is redesignated as 2414.408-70.

PART 2415--CONTRACTING BY NEGOTIATION

    24. The authority citation for part 2415 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 41 U.S.C. 253; 42 U.S.C. 3535(d).

    25. Section 2415.407 is revised to read as follows:


2415.407  Solicitation provisions.

    (a) The Contracting Officer shall insert a provision substantially 
the same as the provision at 48 CFR 2452.215-70, Proposal Content, in 
all solicitations for negotiated procurements using the best value 
approach selection method expected to exceed the simplified acquisition 
limit. The Contracting officer shall adapt paragraph (c) of the 
provision (i.e., include, delete, and provide additional detail to 
subparagraphs) to address the particular requirements of the immediate 
solicitation. The provision may be used in simplified acquisitions when 
it is necessary to obtain technical and management information in 
making the award selection. When award selection will be made through 
the lowest-priced technically acceptable proposal method, the provision 
shall be used with its Alternate I. If the proposed contract requires 
work on, or access to, sensitive automated systems as required by the 
clause at 48 CFR 2452.237-76, the provision shall be used with its 
Alternate II.
    26. Section 2415.413-1 is revised to read as follows:


2415.413-1  Alternate I.

    It is HUD's policy to have proposals evaluated by the most 
competent technical and management sources available. The Department's 
preferred procedure for evaluation of proposals is not to disclose the 
proposals outside the Government for evaluation purposes. If external 
parties will not be used to evaluate proposals, the procedures in FAR 
15.413-1 Alternate I, shall be used.
    27. A new section 2415.413-2 is added to read as follows:


2415.413-2  Alternate II.

    When it is necessary to disclose proposals outside the Government 
to meet the Department's evaluation needs, the procedures in FAR 
15.413-2 Alternate II, shall be used.
    (f)(1) The HCA is authorized to make decisions regarding the 
release of proposals outside the Government.
    (2) The written agreement shall be obtained prior to releasing 
proposals to the evaluator.
    (3) The HCA shall make the written determination, which shall be 
retained permanently in the official contract file.


2415.605  [Amended]

    28. In section 2415.605, paragraph (c) is redesignated (d)(1) and 
paragraph (e) is redesignated as paragraph (d)(2).
    29. In section 2415.608, paragraph (a) is revised to read as 
follows:


2415.608  Proposal evaluation.

    (a) After receipt of proposals, the Contracting Officer will 
forward copies of the technical portion of each proposal to the TEP 
Chairperson or his or her designee. The cost/price portion of each 
proposal shall be retained by the Contracting Officer pending initial 
technical evaluation by the TEP.
    (3) Technical evaluation. The TEP shall rate each proposal based on 
the evaluation factors specified in the solicitation. The TEP shall 
identify each proposal as being either acceptable, unacceptable but 
capable of being made acceptable, or unacceptable. A proposal shall be 
considered unacceptable if it is so clearly deficient that it cannot be 
corrected through written or oral discussions. Under the best value 
approach, predetermined cut-off scores designed to determine a 
threshold level of acceptability of proposals shall not be employed. A 
technical evaluation report, which complies with FAR 15.608(a)(3), 
shall be prepared and signed by the technical evaluator(s), furnished 
to the contracting officer, and maintained as a permanent record in the 
official procurement file.
* * * * *


2415.1004  [Redesignated]

    30. Section 2415.1004 is redesignated as 2415.1005.

PART 2416--TYPES OF CONTRACTS

    31. The authority citation for part 2416 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 41 U.S.C. 253; 42 U.S.C. 3535(d).

2416.504  [Redesignated]

    32. Section 2416.504 is redesignated as 2416.506 and the heading is 
revised to read as follows:


2416.506  Solicitation provisions and contract clauses.

    33. In the newly redesignated section 2416.506, paragraph (e) is 
redesignated as section 2416.506-70 and the heading is added to read as 
follows:


2416.506-70  Unpriced delivery/task orders.

    (e) * * *

PART 2417--SPECIAL CONTRACTING METHODS

    34. The authority citation for part 2417 is revised to read as 
follows:

    Authority: 31 U.S.C. 1535; 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

    35. A new subpart 2417.2 is added to read as follows:

Subpart 2417.2--Options

    36. A new section 2417.204 is added to read as follows:


2417.204  Contracts.

    (e) The Senior Procurement Executive shall approve any solicitation 
or contract which exceeds the five (5) year maximum for acquisitions of 
supplies or services.

PART 2419--SMALL BUSINESS PROGRAMS

    37. The heading of part 2419 is revised to read as set forth above.
    38. The authority citation for part 2419 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

    39. Section 2419.201(c), (d)(1) through (7) and (d)(9) are revised 
to read as follows:


2419.201  General policy.

    (c) The Director, Office of Small and Disadvantaged Business 
Utilization (OSDBU), Headquarters, is responsible for the 
administration of HUD's small business programs. This includes 
Department-wide responsibility for developing, implementing, executing, 
and managing these programs, providing advice on these programs, and 
representing HUD before other government agencies on matters primarily 
affecting small, small disadvantaged and women-owned small businesses.
    (d) Each head of a contracting activity shall designate a small 
business specialist who shall perform the following functions:
    (1) Maintain a program designed to locate capable small business 
sources as referenced in 48 CFR 2419.201(c) for current and future 
procurements;
    (2) Coordinate inquiries and requests for advice from such 
businesses on procurement matters;
    (3) Review proposed requirements for supplies and services, ensure 
that all such business concerns will be afforded an equitable 
opportunity to compete, and, as appropriate, initiate

[[Page 19472]]

recommendation for small business or Section 8a set-asides (under the 
Small Business Act);
    (4) Take action to ensure the availability of adequate 
specifications and drawings, when necessary, to obtain participation by 
such businesses in a procurement;
    (5) Review proposed procurements for possible breakout of items 
suitable for procurement from such businesses;
    (6) Advise such businesses with respect to the financial assistance 
available under existing laws and regulations and assist such 
businesses in applying for financial assistance;
    (7) Ensure that adequate records are maintained and accurate 
reports are prepared concerning such businesses participation in the 
procurement program;
* * * * *
    (9) Act as liaison between the Contracting Officer and the 
appropriate SBA office in connection with set-asides, certificates of 
competency, size classification, and any other matter in which the 
small business program may be involved.
    40. The heading of subpart 2419.7 is revised to read as follows:

Subpart 2419.7--Subcontracting With Small Business, Small 
Disadvantaged Business and Women-Owned Small Business Concerns

Subpart 2419.9  [Removed]

    41. Subpart 2419.9 is removed.

Subpart 2419.901  [Removed]

    42. Section 2419.901 is removed.

PART 2420--LABOR SURPLUS AREA CONCERNS

    43. The authority citation for part 2420 is revised to read as 
follows:

    Authority: 42 U.S.C. 3535(d).

PART 2420  [REMOVED AND RESERVED]

    44. Part 2420, consisting of subpart 2420.1 and Sec. 2420.102, is 
removed and reserved.

PART 2434--MAJOR SYSTEM ACQUISITIONS

    45. The authority citation for part 2434 is revised to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).


2434.001  [Removed]

    46. Section 2434.001 is removed.

PART 2437--SERVICE CONTRACTING

    47. The authority citation for part 2437 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

    48. In Sec. 2437.110, paragraph (f) is revised to read as follows:


2437.110  Solicitation provisions and contract clauses.

* * * * *
    (f) The Contracting Officer shall insert the clause at 48 CFR 
2452.237-75, Clearance of Personnel, in all solicitations and contracts 
where contractor personnel will be working on-site in any HUD office.
* * * * *

PART 2442--PRODUCTION SURVEILLANCE AND REPORTING

    49. The authority citation for part 2442 is revised to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

    50. Section 2442.1106 is revised to read as follows:


2442.1106  Reporting requirements.

    (a) All contracts for professional or technical services exceeding 
$500,000 shall use HUD Form 441.1, ``Project Management System Baseline 
Plan,'' to outline how the Contractor proposes to carry out the 
contract work and HUD Form 661.1, ``Project Management System Progress 
Report,'' to monitor quantitative progress against the baseline plan. 
Each of these forms shall be accompanied by a narrative description. 
The Contracting Officer may waive the requirement to use these forms if 
he or she believes the Statement of Work or contractor's technical 
proposal are sufficiently specific or another acceptable means for 
project management is substituted. Contracts awarded under the Acquired 
Property Program are exempt from use of this reporting requirement. The 
prescribed forms may be used for contracts under $500,000, when 
determined necessary by the Contracting Officer.
    51. Section 2442.1107 is revised to read as follows:


2442.1107  Contract clause.

    The Contracting Officer shall insert the clause at 48 CFR 2452.242-
71, Project Management System, in solicitations and contracts for 
professional or technical services exceeding $500,000, unless the 
Contracting Officer determines that the Statement of Work or technical 
proposal is sufficiently specific, or another acceptable method for 
project management is substituted. Use of this clause in contracts 
below the stated threshold is at the discretion of the Contracting 
Officer.

PART 2452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    52. The authority citation for part 2452 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).


2452.212-70  [Redesignated]

    53. Section 2452.212-70 is redesignated as Sec. 2452.211-70 and the 
introductory text is revised to read as follows:


2452.211-70  Contract period.

    As prescribed in 2411.404(a), insert the following clause in all 
solicitations and contracts:
* * * * *
    54. Section 2452.215-70 is revised to read as follows:


2452.215-70  Proposal content.

    As prescribed in 2415.407(a), insert a provision substantially the 
same as the following:

Proposal Content (Oct 1995)

    (a) Proposals shall be submitted in two parts as described in 
paragraphs (b) and (c) below. Each of the parts must be complete in 
itself so that evaluation of each part may be conducted 
independently, and so that the technical and management part may be 
evaluated strictly on its own merit. Proposals shall be submitted in 
the format, if any, prescribed elsewhere in this solicitation. 
Proposals shall be enclosed in sealed packaging and addressed to the 
office specified in the solicitation. The offeror's name and 
address, the solicitation number and the date and time specified in 
the solicitation for proposal submission must appear in writing on 
the outside of the package.
    (b) Proposals shall be submitted in original and [insert number] 
copies of Part I and [insert number] copies of Part II.
    (c) Part I--Technical and Management.
    (1) Prior experience. The offeror shall provide evidence of the 
offeror's (i.e., firm's or organization's) prior and current 
experience in performing the work and/or providing the deliverables 
required by the solicitation.
    (2) Past Performance. The offeror shall provide evidence of the 
offeror's past performance in accomplishing work--including meeting 
delivery dates and schedules--the same as, or substantially similar 
to, that required by the solicitation. The offeror shall provide 
references as follows [Contracting Officer insert specific 
instruction for reference check information required].
    (3) Personnel qualifications. The offeror shall provide the 
names, position descriptions and information to support the 
qualifications--including relevant experience, specialized training 
and education--of all proposed key personnel (see the clause 
entitled ``Key Personnel'' in this solicitation for further 
definition). The

[[Page 19473]]

term ``personnel'' shall include any proposed consultants and 
subcontractor employees who will perform duties of key personnel.
    (4) Management Capability. The offeror shall provide evidence of 
his/her organization's ability to manage the work required under the 
proposed contract. The offeror shall describe how the work will be 
organized, the proposed staffing and the responsibilities and 
existing commitments of proposed staff.
    (5) Technical Capability. The offeror shall provide a detailed 
description of how he/she proposes to conduct the work required 
under the proposed contract.
    (6) Mandatory Minimum Requirements. The offeror shall provide 
evidence, including copies of documents, as appropriate of 
[contracting officer insert description of requirement(s), e.g., 
licenses, minimum experience, etc., or delete this paragraph if not 
applicable].
    (d) Part II--Business Proposal.
    (1) The Offeror shall complete the Representations and 
Certifications provided in Section K of this solicitation and 
include them in this Part II.
    (2) The offeror shall provide information to support the 
offeror's proposed costs or prices as prescribed elsewhere in this 
Section L.

(End of Provision)

Alternate I (Oct 1995)

    Substitute paragraph (c) with the following:
    (c) Part I--Technical and Management Information.
    (1) Prior experience. The offeror shall provide evidence that 
the offeror's (i.e., firm's or organization's) prior experience 
meets the following minimum standards: [contracting officer insert 
specific experience requirements].
    (2) Past Performance. The offeror shall provide evidence of the 
offeror's past performance as follows: [contracting officer insert 
specific performance requirements]. The offeror shall provide 
references as follows [contracting Officer insert specific 
instruction for reference check information required].
    (3) Personnel qualifications. The offeror shall provide the 
names, position descriptions and evidence that proposed key 
personnel (see the clause entitled ``Key Personnel'' elsewhere in 
this solicitation for definition) meet the minimum qualifications 
described below. The term ``personnel'' includes any proposed 
consultants and subcontractor employees who will perform duties of 
key personnel. The minimum qualifications are: [contracting officer 
insert descriptions]
    (4) Management Capability. The offeror shall provide evidence of 
his/her organization's ability to manage the work required under the 
proposed contract. The offeror shall describe how the work will be 
organized, the proposed staffing and the responsibilities and 
existing commitments of proposed staff.

(End of provision)

Alternate II (Oct 1995)

    Add the following subparagraph, numbered sequentially, to 
paragraph (c):
    The offeror shall describe in detail how the offeror will 
maintain the security of automated systems as required by clause 
2452.237-76 in Section I of this solicitation.

(End of provision)

    55. Section 2452.219-70 is amended by revising the section heading, 
the intrductory text, the clause heading, paragraphs (b) through (d), 
and Alternate I to read as follows:


2452.219-70   Small, Small Disadvantaged, and Women-Owned Small 
Business Subcontracting Plan.

    As prescribed in 2419.708, insert the following provision:

Small, Small Disadvantaged and Women-Owned Small Business 
Subcontracting Plan (Oct 1995)

* * * * *
    (b) Consistent with the national interest, it is HUD policy that 
small business, women-owned small business and small business 
concerns that are owned and controlled by socially and economically 
disadvantaged individuals shall have the maximum practicable 
opportunity to participate in the performance of HUD work at the 
prime and subcontract level. Therefore, any contract awarded as a 
result of this solicitation shall fully comply with the intent of 
this policy, and the successful offeror shall agree to pursue an 
effective and comprehensive small business, small disadvantaged 
business and women-owned small business subcontracting program in 
compliance with the clause entitled ``Utilization of Small, Small 
Disadvantaged and Women-Owned Small Business Concerns.''
    (c) Prior compliance with subcontracting plans shall be 
considered in determining the responsibility of an offeror (see FAR 
9.104-3). Therefore, offerors having previous contracts with 
subcontracting plans shall provide the following information: agency 
name; agency point of contact; contract number; total contract 
value; a synopsis of the work required under the contract; the 
role(s) of the subcontractor(s) involved; and, the applicable goals 
and actual performance (dollars and percentages) for subcontracting 
with small, small disadvantaged and women-owned small business 
concerns. This information shall be provided for the three most 
recently (within the last three years) completed contracts with such 
subcontracting plans.
    (d) The contract expected to result from this solicitation will 
contain the clause at FAR 52.219-9, ``Small, Small Disadvantaged and 
Women-Owned Small Business Subcontracting Plan.'' In accordance with 
that clause, the offeror shall submit the complete subcontracting 
plan with the response to this solicitation. The content of the 
final plan is subject to negotiation. Failure to submit a complete 
subcontracting plan and negotiate its content in good faith shall 
make the offeror ineligible for the contract award.

(End of provision)

Alternate I (Dec 1992)

    This alternate is required for all sealed bid solicitations 
exceeding $500,000 ($1,000,000 for construction) that are not set 
aside for small business. In such cases, insert the following 
paragraph (d) for that in the basic clause:
    (d) The contract expected to result from this solicitation will 
contain the clause at FAR 52.219-9, ``Small, Small Disadvantaged and 
Women-Owned Small Business Subcontracting Plan (Alternate I).'' The 
offeror submitting the apparent low bid, upon request by the 
Contracting Officer, shall submit a subcontracting plan, where 
applicable, which addresses separately subcontracting with small, 
small disadvantaged business and women-owned small business 
concerns, and which shall be included in and made a part of the 
resultant contract. The Contracting Officer will review the adequacy 
of the subcontracting plan as part of the responsibility 
determination (FAR Subpart 9.1). Failure to submit an adequate 
subcontracting plan where applicable shall make the bidder 
ineligible for the contract award.

(End of provision)

    56. In Sec. 2452.237-75, the clause heading and paragraph (a) are 
revised to read as follows:


2452.237-75   Clearance of personnel.

* * * * *

Clearance of Personnel (June 1995)

    (a) The contractor shall submit to the Contracting Officer 
within five days after contract award, two (2) completed Forms FD-
258, ``Fingerprint Chart'', one original and one copy of the SF 85P, 
``Questionnaire for Public Trust Positions'', and one original and 
one copy of the OF 306, ``Declaration for Federal Employment'', for 
the contractor and all employees who have access to the building in 
performance of the contract work. These forms must be submitted for 
all replacement employees prior to entrance on duty. Necessary forms 
will be furnished by HUD. If the Contracting Officer receives an 
unsuitable report on any employee after processing these forms or if 
the Contracting Officer finds a prospective employee to be 
unsuitable or unfit for his/her duties, the contractor shall be 
advised immediately that such employee cannot continue to work or be 
assigned to work under the contract.
* * * * *
    57. In Sec. 2452.242-71, the introductory text is revised to read 
as follows:


2452.242-71   Project management system.

    As prescribed in 2442.1107, insert the following clause:
* * * * *
    Dated: April 19, 1996.
Marilynn A. Davis,
Assistant Secretary for Administration.
[FR Doc. 96-10446 Filed 4-30-96; 8:45 am]
BILLING CODE 4210-01-P