[Federal Register Volume 61, Number 145 (Friday, July 26, 1996)]
[Rules and Regulations]
[Pages 39201-39203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18503]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 16

[FAC 90-40; FAR Case 94-711; Item VI]
RIN 9000-AG50


Federal Acquisition Regulation; Task and Delivery Orders

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

ACTION: Interim rule adopted as final with changes.

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SUMMARY: This final rule is issued pursuant to the Federal Acquisition 
Streamlining Act of 1994, Public Law 103-355 (the Act). The Federal 
Acquisition Regulatory Council is amending the Federal Acquisition 
Regulation (FAR) regarding the scope of a multiple award preference for

[[Page 39202]]

indefinite-quantity contracts. This final rule provides that the 
multiple award preference established by the FAR does not apply to 
architect-engineer contracts subject to the procedures of the FAR. This 
regulatory action was subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993, but is not a 
major rule under 5 U.S.C. 804.

EFFECTIVE DATE: July 26, 1996.

FOR FURTHER INFORMATION CONTACT: Mr. Edward McAndrew at (202) 501-1474 
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 90-40, FAR case 94-711.

SUPPLEMENTARY INFORMATION:

A. Background

    A proposed rule amending FAR Subpart 16.5 was published in the 
Federal Register at 60 FR 14346, March 16, 1995. The proposed rule 
reflected changes brought about by sections 1004 and 1054 of the Act. 
Sections 1004 and 1054 of the Act created a multiple award preference 
for indefinite-quantity contracts. The proposed rule published in the 
Federal Register excluded contracts subject to FAR Parts 36, 38, 39, 
and 41 from the multiple award preference. With respect to Parts 36 and 
39, the exclusions were based upon the ``Provisions Not Affected'' 
subsection in sections 1004 and 1054 of the Act. The Special 
Contracting Team intended to give these provisions meaning by exempting 
acquisitions under the Brooks Architect-Engineers Act and the Brooks 
Automatic Data Processing Equipment Act from the multiple award 
preference. Contracts subject to Part 38 were exempted from the 
coverage because the Act specifically exempted GSA's Federal Supply 
Schedule program. Contracts subject to Part 41 were exempted because 
the Team believed that multiple awards were inconsistent with the 
monopolistic nature of some utility services.
    A final rule implementing sections 1004 and 1054 of the Act was 
published in the Federal Register at 60 FR 49723, September 26, 1995. 
However, an interim rule was published along with the final rule which 
modified the scope of the multiple award preference. The interim rule 
added a new FAR section 16.500 to provide that the multiple award 
preference established by Subpart 16.5 could be used to acquire: (1) 
Architect-engineer services, provided the selection of contractors and 
placement of orders is consistent with Subpart 36.6; and (2) Federal 
Information Processing resource requirements that are not satisfied 
under the Federal Supply Schedule program, provided the selection of 
contractors and placement of orders is consistent with Part 39. The 
interim rule also extended the multiple award preference to Part 36 
construction contracts and Part 41 utility services. Although the 
change was not considered a significant revision within the meaning of 
FAR 1.501 and Public Law 98-577, the FAR Council made a determination 
to solicit public comments before finalizing this amendment to FAR 
Subpart 16.5.
    As a result of public comments on the interim rule, the FAR Council 
has revised the scope of the rule to clarify that the multiple award 
preference established by FAR Subpart 16.5 does not apply to architect-
engineer contracts subject to the procedures of FAR Subpart 36.6. 
However, this revision to the rule does not prohibit agencies from 
making multiple awards for architect-engineer services, provided the 
selection of contractors and placement of orders is consistent with 
Subpart 36.6. This final rule also provides that the procedures 
contained in Subpart 16.5 may be used to acquire Federal Information 
Processing resource requirements that are not satisfied under the 
Federal Supply Schedule program, provided the selection of contractors 
and placement of orders is consistent with Part 39. The final rule 
retains the multiple award preference with respect to construction 
contracts subject to Part 36 and utility services subject to Part 41. 
However, the final rule recognizes that there may be circumstances when 
multiple awards would not be appropriate and, thus, provides 
contracting officers the discretion to determine whether multiple 
awards should be made.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., applies to 
this final rule and a Final Regulatory Flexibility Analysis (FRFA) has 
been performed. A copy of the FRFA may be obtained from the FAR 
Secretariat.

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.

D. Public Comments-

    On September 26, 1995, an interim rule was published in the Federal 
Register at 60 FR 49723. In response to the interim rule, 22 comments 
were received. The comments of all respondents were considered in 
developing the final rule.
    A significant number of comments recommended that certain types of 
fixed-price construction contracts, commonly known as ``Job Order 
Contracts'' and ``Simplified Acquisition of Base Engineer 
Requirements'' (SABER) contracts should be excluded from the scope of 
the multiple award preference. These types of contracts typically 
include Government-established unit prices for specific line items 
needed to complete the requirements of the delivery order. Award 
determinations are made by selecting the mix of line items to be used 
for a project and multiplying the mix of line items by the coefficient 
bid by the offeror. Several comments argued that the application of the 
multiple award preference to Job Order and SABER contracts could result 
in higher overall prices to the Government. These comments argued that 
if multiple Job Order or SABER contracts are made, offerors may be 
inclined to raise their bidding coefficient to take into consideration 
the fact that potential delivery order awards may be spread out among 
several firms rather than one firm receiving all the delivery orders. 
The comments further argue that multiple awards may cause a duplication 
of contract overhead costs (site managers, offices, equipment, etc.) 
and that any economies resulting from a single award would be lost, 
thus resulting in higher costs to the Government.
    It is recognized that there may be circumstances when multiple 
awards under a Job Order or SABER contract may not be appropriate. In 
such cases, the rule recognizes that multiple awards should not be 
made. For example, the rule provides that multiple awards should not be 
made when the contracting officer determines, based on the contracting 
officer's knowledge of the market, that more favorable terms and 
conditions, including pricing, may be provided if a single award is 
made.
    The rule has also been revised to clarify that agencies may make 
class determinations in accordance with FAR Subpart 1.7 to make single 
awards for any class of contracts (including Job Order or SABER 
contracts). However, such a class determination would not preclude the 
contracting officer from making a determination to solicit for

[[Page 39203]]

multiple awards if the contracting officer determines that multiple 
awards may be advantageous to the Government for a particular 
solicitation.-
    A significant number of comments were also received regarding the 
application of the multiple award preference to architect-engineer 
services subject to FAR Subpart 36.6. The Team believes that it is good 
public policy to use the multiple award preference to promote price 
competition in Government contracting. However, the Brooks Architect-
Engineers Act precludes price competition by establishing 
qualification-based source selection procedures. Because price 
competition is not applicable to architect-engineer services, the rule 
has been revised to clarify that the multiple award preference does not 
apply to architect-engineer services subject to FAR Subpart 36.6.
    Although the rule does not extend the multiple award preference to 
architect-engineer services subject to FAR Subpart 36.6, it is 
important to note that the rule does not prohibit an agency from making 
multiple awards (if an agency chooses to do so) provided the selection 
of contractors and placement of orders is consistent with FAR Subpart 
36.6. Some Federal agencies have awarded multiple award contracts for 
architect-engineer services that are consistent with the Brooks 
Architect-Engineers Act qualification-based source selection 
procedures. For example, one agency utilized Brooks Architect-Engineers 
Act procedures to award multiple contracts for architect-engineer 
services to six firms from a single solicitation. As described in the 
solicitation, each task order is technically competed among the 
multiple awardees. Each firm's response to the task order is 
technically ranked based on the evaluation factors for that task. The 
most technically qualified firm is determined as a result of the 
responses received and a cost proposal is required from that firm. 
Negotiations take place and, in most cases, the task order is awarded.

List of Subjects in 48 CFR Part 16-

    Government procurement.

    Dated: July 16, 1996.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal 
Acquisition Streamlining Act of 1994.

Interim Rule Adopted as Final With Changes-

    Accordingly, the interim rule amending 48 CFR Part 16 and published 
at 60 FR 49723, September 26, 1995, is adopted as a final rule with the 
following changes:
    1. The authority citation for 48 CFR Part 16 continues to read as 
follows:

PART 16--TYPES OF CONTRACTS-

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

    2. Section 16.500 is revised to read as follows:


16.500  Scope of subpart.

    This subpart prescribes policies and procedures for making awards 
of indefinite-delivery contracts and establishes a preference scheme 
for making multiple awards of indefinite-quantity contracts. This 
subpart does not limit the use of other than competitive procedures 
authorized by part 6. Nothing in this subpart shall be construed to 
limit, impair, or restrict the authority of the General Services 
Administration (GSA) to enter into schedule, multiple award, or task or 
delivery order contracts under any other provision of law. Therefore, 
GSA regulations and subpart 8.4, part 38, or part 39 for the Federal 
Supply Schedule program (including contracts for Federal Information 
Processing resources) take precedence over this subpart. This subpart 
may be used to acquire Federal Information Processing resource 
requirements that are not satisfied under the Federal Supply Schedule 
program, provided the selection of contractors and placement of orders 
is consistent with part 39. The multiple award preference scheme 
established by this subpart does not apply to architect-engineer 
contracts subject to the procedures in subpart 36.6. However, agencies 
are not precluded from making multiple awards for architect-engineer 
services using the procedures in this subpart, provided the selection 
of contractors and placement of orders is consistent with subpart 36.6. 
-
    3. Section 16.504 is amended in paragraph (c)(1) by revising the 
third and fourth sentences; and by revising paragraphs (c)(1)(iv) and 
(vi) to read as follows:


16.504  Indefinite-quantity contracts.

    (c)  * * *
    (1) * * * No separate written determination to make a single award 
is necessary when the determination is contained in a written 
acquisition plan or when a class determination has been made in 
accordance with subpart 1.7. Multiple awards should not be made if the 
contracting officer determines that--
* * * * *
    (iv) The tasks likely to be ordered are so integrally related that 
only a single contractor can reasonably perform the work;
* * * * *
    (vi) Multiple awards would not be in the best interests of the 
Government.
* * * * *-
    4. Section 16.505 is amended by removing the second sentence of 
paragraph (b) and inserting the following three sentences in its place 
to read as follows:


16.505  Ordering.

* * * * *-
    (b) * * * In determining the procedures for providing awardees a 
fair opportunity to be considered for each order, contracting officers 
shall exercise broad discretion. The contracting officer, in making 
decisions in the award of any individual task order, should consider 
factors such as past performance on earlier tasks under the multiple 
award contract, quality of deliverables, cost control, price, cost, or 
other factors that the contracting officer believes are relevant to the 
award of a task order to an awardee under the contract. In evaluating 
past performance on individual orders, the procedural requirements in 
subpart 42.15 are not mandatory. * * *
* * * * *
[FR Doc. 96-18503 Filed 7-25-96; 8:45 am]
BILLING CODE 6820-EP-P