[Federal Register Volume 61, Number 174 (Friday, September 6, 1996)]
[Proposed Rules]
[Pages 47384-47390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22745]



[[Page 47383]]


_______________________________________________________________________

Part VI

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Parts 1, et al.



Federal Acquisition Regulation; Application of Special Simplified 
Procedures to Certain Commercial Items; and Procurement Integrity; 
Proposed Rules

  Federal Register / Vol. 61, No. 174 / Friday, September 6, 1996 / 
Proposed Rules  

[[Page 47384]]



DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 5, 11, 12, 13, and 52

[FAR Case 96-307]
RIN 9000-AH20


Federal Acquisition Regulation; Application of Special Simplified 
Procedures to Certain Commercial Items

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

ACTION: Proposed rule.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement section 4202 of the Federal 
Acquisition Reform Act of 1996 (Pub. L. 104-106). Section 4202 requires 
revisions to the FAR to incorporate special simplified procedures for 
the acquisition of certain commercial items with a value greater than 
the simplified acquisition threshold ($100,000) but not greater than $5 
million. The purpose of this revision is to vest contracting officers 
with additional procedural discretion and flexibility, so that 
commercial item acquisitions in this dollar range may be solicited, 
offered, evaluated, and awarded in a simplified manner that maximizes 
efficiency and economy and minimizes burden and administrative costs 
for both the Government and industry. This regulatory action was not 
subject to Office of Management and Budget review under Executive Order 
12866, dated September 30, 1993. This is not a major rule under 5 
U.S.C. 804.

DATES: Comments should be submitted on or before November 5, 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 and F 
Streets NW., Room 4037, Washington, DC 20405.
    Please cite FAR case 96-307 in all correspondence related to this 
case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4037, GS 
Building, Washington, DC 20405 (202) 501-4755. Please cite FAR case 96-
307.

SUPPLEMENTARY INFORMATION:

A. Background

    This proposed rule amends the Federal Acquisition Regulation to 
implement section 4202 of the Federal Acquisition Reform Act of 1996 
(Pub. L. 104-106). Section 4202 authorizes special simplified 
procedures for acquisitions of commercial items at amounts greater than 
the simplified acquisition threshold ($100,000) but not greater than $5 
million when the contracting officer reasonably expects, based on the 
nature of the commercial items sought and on market research, that 
offers will include only commercial items. The authority to use the 
special simplified procedures under this section expires on January 1, 
2000. Section 4202 also amends 10 U.S.C. 2305, 41 U.S.C. 253a, and 41 
U.S.C. 416 to permit issuance of solicitations for commercial items in 
fewer than 15 days after the synopsis notice is published.
    Pursuant to section 4202 of Pub. L. 104-106, acquisitions of 
commercial items using special simplified procedures are exempt from 
many of the Competition in Contracting Act (CICA) requirements that 
otherwise apply to acquisitions over the simplified acquisition 
threshold. Solicitations are not required to state the relative 
importance assigned to each evaluation factor and subfactor, nor are 
they required to include subfactors at all. Contracting officers have 
the flexibility to, among other things--
    (1) Forego formal evaluation plans, scoring of quotes or offers, or 
a competitive range determination;
    (2) Negotiate with one or more offerors, as appropriate, but not 
necessarily all offerors;
    (3) Conduct comparative evaluations of offers; and
    (4) Evaluate past performance based on such information as the 
contracting officer's knowledge and previous experience with the item 
or service being purchased, customer surveys, or other reasonable 
basis, without the existence of a formal database.
    Synopsis requirements still apply, and all responsible sources must 
be permitted to submit a quote or offer which the contracting officer 
must consider. Sole-source acquisitions must be justified and approved 
consistent with existing CICA requirements. Otherwise, except for those 
procedures specifically limited to the simplified acquisition threshold 
or a lower threshold, this proposed rule authorizes use of procedures 
in FAR Part 13, Simplified Acquisition Procedures, for acquisitions of 
commercial items exceeding the simplified acquisition threshold but not 
exceeding $5,000,000 (including options) if the conditions apply that 
permit use of the special simplified procedures (see new subpart 13.6).
    The special simplified procedures for commercial items also include 
guidance at 13.604 that expressly gives contracting officers the 
flexibility to indicate to an offeror a price the contracting officer 
anticipates offerors will have to meet or better to remain competitive; 
and/or a consideration other than price (e.g., a contract term, a 
commercially-available feature) the offeror will have to meet or 
better, as appropriate, to remain competitive. These techniques are 
used in the commercial marketplace to increase and sustain competitive 
pressures throughout the negotiation process and are expected to help 
improve the efficiency of negotiations and reduce bid and proposal 
preparation costs by reducing the guesswork currently required to 
remain competitive.
    The Federal Acquisition Streamlining Act (FASA) of 1994 (Pub. L. 
103-355) amended the publicizing and response time requirements for 
acquisitions of commercial items to allow less than a 30-day response 
time for receipt of offers after the date of issuance of a 
solicitation, provided the contracting officer establishes a response 
time that will afford potential offerors a reasonable opportunity to 
respond. Section 4202 further increases the contracting officer's 
latitude when acquiring commercial items by permitting a period of less 
than 15 days between publication of a synopsis notice and issuance of a 
solicitation. To bring these changes into compliance with the minimum 
time frames established in the North American Free Trade Agreement 
(NAFTA) and the Trade Agreements Act (TAA), this proposed rule adds new 
coverage at 5.203(h). For acquisitions subject to NAFTA or TAA, the 
period of time between synopsis and receipt of offers must be at least 
40 days. However, the contracting officer can reduce this time period 
to as few as 10 days if the acquisition falls within a general category 
that is identified in an annual forecast, the availability of which is 
published in the Commerce Business Daily.
    This proposed rule also includes additional changes that are 
intended to help further promote the Government's effective use of 
proven commercial buying practices. These changes include:
    (1) Clarifying that an agency may identify its requirements in 
terms of

[[Page 47385]]

desired features or targets that do not have to be expressed as ranges;
    (2) Changing the application of the Standard Form (SF) 1449, 
Solicitation/Contract/Order for Commercial Items (a form intended to 
emphasize the ``cultural shift'' to the use of commercial items and 
practices and which is currently mandatory for all paper solicitations 
or contracts for commercial items), so that, for acquisitions under the 
simplified acquisition threshold, use of the form is encouraged but is 
not mandatory; and
    (3) Replacing references to ``minimum needs'' with ``needs.'' (The 
term ``minimum'' has historically been misinterpreted, and its removal 
is consistent with 10 U.S.C. 2305(a)(1)(B), which states, ``Each 
solicitation * * * shall include specifications which include 
restrictive provisions or conditions only to the extent necessary to 
satisfy the needs of the agency or as authorized by law.'' ``Minimum 
needs'' has inaccurately been considered to require that the Government 
describe its needs in terms of the lowest level of technical 
capabilities or features that will address the requirement. However, 
the Government actually has substantial latitude to describe its needs 
in the manner that reflects an optimum acquisition strategy, e.g., 
considering which item(s) represent the best value in terms of quality, 
expected life of item, vendor past performance; making use of 
capabilities in the marketplace, such as those for ensuring reliability 
and distributing products; requiring offerors to have a ``track 
record'' of previous production for a length of time appropriate to the 
item being acquired, when such a requirement can be shown to reasonably 
relate to helping ensure that the agency will acquire an item that 
meets its need.)
    It is clear that the drafters of this legislation intended for 
commercial items to be purchased in as simplified a manner as possible. 
A report by the House Committee on Government Reform and Oversight (No. 
104-222) on H.R. 1670 noted that, ``The purchase of a commercial item 
logically lends itself to simplified procedures because there exists a 
yardstick in the commercial marketplace against which to measure price 
and product quality and to serve as a surrogate for Government-unique 
procedures.'' The intent of this proposed rule is to ensure the 
benefits of this new authority can be fully realized by giving 
contracting officers a clear understanding of the procedural discretion 
and flexibility they have, so that acquisitions of commercial items 
conducted under these regulations may be solicited, offered, evaluated, 
and awarded in a simplified manner that maximizes efficiency and 
economy and minimizes burden and administrative costs for both the 
Government and its suppliers.

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 the rule 
implements the requirements of section 4202 of the Federal Acquisition 
Reform Act of 1996 and applies to all businesses, large or small, 
offering to sell commercial items to the Federal Government for amounts 
greater than the simplified acquisition threshold but not greater than 
$5,000,000. Statistics indicate that a majority of commercial sales to 
the Government come from small businesses. The rule imposes no new 
reporting or recordkeeping requirements, and it does not duplicate, 
overlap, or conflict with any other Federal rules. These new simplified 
procedures would enable small and large entities to conduct business 
with the Government in a simpler manner, similar to the business they 
conduct with their commercial counterparts. The rule is expected to 
have a beneficial impact on industry and, therefore, applies equally to 
both large and small entities. However, existing preferences for small 
businesses, in accordance with FAR Part 19, remain unchanged by this 
rule.
    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 96-307), 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 5, 11, 12, 13, and 52

    Government procurement.

    Dated: August 30, 1996.
Jeremy Olson,
Acting Director, Office of Federal Acquisition Policy.

    Therefore, it is proposed that 48 CFR Parts 5, 11, 12, 13, and 52 
be amended as set forth below:
    1. The authority citation for 48 CFR Parts 5, 11, 12, 13, and 52 
continues to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. 2301 to 2331; and 42 
U.S.C. 2473(c).

PART 5-PUBLICIZING CONTRACT ACTIONS

    2. Section 5.203 is amended by revising paragraph (a) and adding 
paragraph (h) to read as follows:


5.203  Publicizing and response time.

    (a) A notice of contract action shall be published in the Commerce 
Business Daily at least 15 days before issuance of a solicitation 
except that for acquisitions of commercial items, the contracting 
officer may--
    (1) Establish a shorter period for issuance of the solicitation; or
    (2) Use the combined CBD synopsis/solicitation procedure (see 
12.603).
* * * * *
    (h) For acquisitions subject to NAFTA or the Trade Agreements Act 
(see Subpart 25.4), the period of time between publication of the 
synopsis notice and receipt of offers shall be no less than 40 days. 
However, if the acquisition falls within a general category identified 
in an annual forecast, the availability of which is published in the 
CBD, the contracting officer may reduce this time period to as few as 
10 days.
    3. Section 5.207 is amended by revising paragraph (e)(3) to read as 
follows:


5.207  Preparation and transmittal of synopses.

* * * * *
    (e) * * *
    (3) Except for contract actions equal to or less than the 
simplified acquisition threshold or acquisitions of commercial items, 
the synopsis shall refer to Numbered Note 22 for noncompetitive 
contract actions. If it is anticipated that award will be made via a 
delivery order to an existing basic ordering agreement, the synopsis 
shall so state.
* * * * *

PART 11-DESCRIBING AGENCY NEEDS

    4. Section 11.002 is amended by revising paragraph (a)(1)(ii) and 
adding paragraph (e) to read as follows:

[[Page 47386]]

11.002  Policy.

    (a) * * *
    (1) * * *
    (ii) Only include restrictive provisions or conditions to the 
extent necessary to satisfy the needs of the agency or as authorized by 
law.
* * * * *
    (e) Some or all of the performance levels or performance 
specifications in a solicitation may be identified as targets rather 
than as fixed or minimum requirements.
    5. Section 11.104 is amended by revising paragraph (a) to read as 
follows:


11.104  Items peculiar to one manufacturer.

* * * * *
    (a) The particular brand-name, product, or feature is essential to 
the Government's requirements and market research indicates other 
companies' similar products, or products lacking the particular 
feature, do not meet, or cannot be modified to meet, the agency's 
minimum needs; and
* * * * *

PART 12-ACQUISITION OF COMMERCIAL ITEMS

    6. Section 12.202 is amended by revising paragraph (b) to read as 
follows:


12.202  Market research and description of agency need.

* * * * *
    (b) The description of agency need must contain sufficient detail 
for potential offerors of commercial items to know which commercial 
products or services may be suitable. Generally, for acquisitions in 
excess of the simplified acquisition threshold, an agency's statement 
of need for a commercial item will describe the type of product or 
service to be acquired and explain how the agency intends to use the 
product or service in terms of function to be performed, performance 
requirement or essential physical characteristics. Describing the 
agency's needs in these terms allows offerors to propose methods that 
will best meet the needs of the Government.
* * * * *
    7. Section 12.203 is amended by adding a sentence to the end of the 
paragraph to read as follows:


12.203  Procedures for solicitation, evaluation, and award.

    * * * The contracting officer may use the simplified acquisition 
procedures in Part 13 for acquisitions of commercial items up to 
$5,000,000, including options, other than those procedures specifically 
limited to the simplified acquisition threshold or a lower threshold 
(see Subpart 13.6).
    8. Section 12.204 is revised to read as follows:


12.204  Solicitation/contract form.

    (a) The contracting officer shall use the Standard Form 1449, 
Solicitation/Contract/Order for Commercial Items, if: (1) the 
acquisition is expected to exceed the simplified acquisition threshold; 
(2) a paper solicitation or contract is being issued; and (3) 
procedures at 12.603 are not being used. Use of the SF 1449 is 
nonmandatory but encouraged for commercial acquisitions not exceeding 
the simplified acquisition threshold.
    (b) Consistent with the requirements at 5.203 (a) and (h), the 
contracting officer may allow fewer than 15 days before issuance of the 
solicitation.
    9. Section 12.205 is amended by revising paragraph (c) to read as 
follows:


12.205  Offers.

* * * * *
    (c) Consistent with the requirements at 5.203 (b) and (h), the 
contracting officer may allow fewer than 30 days response time for 
receipt of offers for commercial items.
    10. Section 12.213 is revised to read as follows:


12.213  Other commercial practices.

    It is a common practice in the commercial marketplace for both the 
buyer and seller to propose terms and conditions written from their 
particular perspectives. The terms and conditions prescribed in this 
Part 12 seek to balance the interests of both the buyer and seller. 
These terms and conditions are generally appropriate for use in a wide 
range of acquisitions. However, market research may indicate other 
commercial practices that are appropriate for the acquisition of the 
particular item. These practices should be considered for incorporation 
into the solicitation and contract if the contracting officer 
determines them appropriate in concluding a business arrangement 
satisfactory to both parties and not otherwise precluded by law or 
Executive order.
    11. Section 12.302(a) is revised to read as follows:


12.302  Tailoring of provisions and clauses for the acquisition of 
commercial items.

    (a) General. The provisions and clauses established in this subpart 
are intended to address, to the maximum extent practicable, commercial 
market practices for a wide range of potential Government acquisitions 
of commercial items.
    However, because of the broad range of commercial items acquired by 
the Government, variations in commercial practices, and the relative 
volume of the Government's acquisitions in the specific market, 
contracting officers may, within the limitations of this subpart, and 
after conducting appropriate market research, tailor the provision at 
52.212-1, Instructions to Offerors--Commercial Items, and the clause at 
52.212-4, Contract Terms and Conditions--Commercial Items, to adapt to 
the market conditions for each acquisition.
* * * * *
    12. Section 12.602 is amended by revising paragraph (a) to read as 
follows:


12.602  Streamlined evaluation of offers.

    (a) When evaluation factors are used, the contracting officer may 
insert a provision substantially the same as the provision at 52.212-2, 
Evaluation--Commercial Items, in solicitations for commercial items or 
comply with the procedures in 13.106-2 if the acquisition is being made 
using the simplified acquisition procedures. When the provision at 
52.212-2 is used, paragraph (a) of the provision shall be tailored to 
the specific acquisition to describe the evaluation factors and 
relative importance of those factors. However, contracting officers are 
not required to describe the relative importance of evaluation factors 
when using the simplified acquisition procedures in Part 13.
* * * * *
    13. Section 12.603 is amended by revising paragraph (c)(3)(ii) to 
read as follows:


12.603  Streamlined solicitation for commercial items.

    (c) * * *
    (3) * * *
    (ii) When using the combined CBD synopsis/solicitation, contracting 
officers shall establish a response time in accordance with 5.203(b).
* * * * *

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

    14. Section 13.000 is revised to read as follows:


13.000  Scope of part.

    This part prescribes policies and procedures for the acquisition of 
supplies and services, including construction, research and 
development, and commercial items, the aggregate amount of which does 
not exceed the simplified acquisition threshold (see 2.101). (However, 
when the conditions in 13.602 are met, the contracting officer is 
authorized to use the procedures in this part, other than those 
specifically limited to the

[[Page 47387]]

simplified acquisition threshold or a lower threshold, for acquisitions 
of commercial items exceeding the simplified acquisition threshold but 
not greater than $5,000,000, including options.) See Part 12, 
Acquisition of Commercial Items, for policies applicable to the 
acquisition of commercial items exceeding the micro-purchase threshold. 
See 36.602-5 for simplified procedures to be used when acquiring 
architect-engineering services.
    15. Section 13.103 is amended by revising paragraphs (b), (c) and 
(j) to read as follows:


13.103  Policy.

* * * * *
    (b) The contracting office shall not use simplified acquisition 
procedures for contract actions exceeding $50,000 after December 31, 
1999, unless the office's cognizant agency has certified full FACNET 
capability in accordance with 4.505-2. This limitation does not apply 
to acquisitions of commercial items conducted using Subpart 13.6.
    (c) Simplified acquisition procedures shall not be used in the 
acquisition of supplies and services initially estimated to exceed the 
simplified acquisition threshold (or $5,000,000, including options, for 
acquisitions of commercial items using Subpart 13.6), even though 
resulting awards do not exceed that threshold. Requirements aggregating 
more than the simplified acquisition threshold (or $5,000,000, 
including options, if using Subpart 13.6) or the micro-purchase 
threshold shall not be broken down into several purchases that are less 
than the applicable threshold merely to permit use of simplified 
acquisition procedures, or to avoid any requirements that apply to 
purchases exceeding the micro-purchase threshold.
* * * * *
    (j) Contracting officers are encouraged to use innovative 
approaches in awarding contracts using the simplified acquisition 
procedures under the authority of this part. For commercial items, 
contracting officers have the flexibility to use any combination of the 
procedures in Subpart 12.6 or Parts 13, 14, 15, 35, or 36, as 
applicable. For other than commercial items, the procedures in other 
FAR parts may be appropriate. Other FAR parts that may be used include, 
but are not limited to Parts 14, 15, 35, or 36, including the use of 
Standard Form (SF) 1442, Solicitation, Offer, and Award (Construction, 
Alteration, or Repair), for construction contracts (see 36.701(b)).
    16. Section 13.104 is amended by revising paragraph (b) to read as 
follows:


13.104  Procedures.

* * * * *
    (b) Related items (such as small hardware items or spare parts for 
vehicles) may be included in one solicitation and the award made on an 
``all-or none'' or ``multiple award'' basis if suppliers are so advised 
when quotations or offers are requested.
* * * * *
    17. Section 13.106-2 is amended by revising paragraphs (a)(1) 
through (a)(3) and the introductory text of paragraph (a)(4), (a) (5) 
and (6), (b)(1), (b)(3), (c) (1) and (2), (d)(3), and (d)(4)(ii) to 
read as follows:


13.106-2  Purchases exceeding the micro-purchase threshold.

    (a) Soliciting competition. (1) Contracting officers shall promote 
competition to the maximum extent practicable to obtain supplies and 
services from the source whose offer is the most advantageous to the 
Government, based, as appropriate, on either price alone or price and 
other factors (e.g., past performance, quality) including the 
administrative cost of the purchase. Contracting officers are 
encouraged to use best value. Solicitations shall notify suppliers of 
the basis upon which award is to be made.
    (2) For acquisitions not exceeding the simplified acquisition 
threshold where FACNET is not available, or an exemption set forth in 
4.506 applies, quotations may be solicited through other appropriate 
means (e.g., orally, or in writing). The contracting officer shall 
comply with the requirements of 5.101 when not soliciting via FACNET. 
Sufficient information to permit vendors to develop quotations may be 
incorporated into the combined synopsis/solicitation. In such cases, 
the contracting officer is not required to issue a separate 
solicitation. For commercial item acquisitions, see 12.603.
    (3) For acquisitions not exceeding $25,000, requests for quotations 
should be solicited orally to the maximum extent practicable when 
FACNET is not available or a written determination has been made that 
it is not practicable or cost-effective to purchase via FACNET. 
Sufficient information to permit suppliers to develop quotations may be 
incorporated into a combined synopsis/solicitation. In such cases, the 
contracting officer is not required to issue a separate solicitation. 
Paper solicitations for contract actions not expected to exceed $25,000 
should only be issued when obtaining electronic or oral quotations is 
not considered economical or practicable. Written solicitations shall 
be issued for construction contracts over $2,000.
    (4) If synopsizing is not required (e.g., the acquisition does not 
exceed $25,000 or an exemption to the synopsis requirement applies) and 
FACNET is not being used, solicitation of at least three sources 
generally may be considered to promote competition to the maximum 
practicable extent. In such circumstances, maximum practicable 
competition ordinarily can be obtained without soliciting quotations or 
offers from sources outside the local trade area. If practicable, two 
sources not included in the previous solicitation should be requested 
to furnish quotations or offers. The following factors influence the 
number of quotations or offers required in connection with any 
particular purchase:
* * * * *
    (5) For purchases not exceeding the simplified acquisition 
threshold, contracting officers may solicit from one source if the 
contracting officer determines that the circumstances of the contract 
action deem only one source reasonably available. For acquisitions of 
commercial items in excess of the simplified acquisition threshold 
conducted pursuant to Subpart 13.6, the requirements at 13.603(a) 
apply.
    (6) Contracting officers shall not limit competition to suppliers 
of well-known and widely distributed makes or brands (see 11.104), or 
solicit quotations on a personal preference basis.
* * * * *
    (b) Evaluation of quotations or offers. (1) When evaluating 
quotations or offers, the evaluation must be performed based on any 
criteria established in the solicitation. All quotations or offers must 
be considered. However, the contracting officer has broad discretion in 
fashioning suitable evaluation procedures. The procedures prescribed in 
Parts 14 and 15 are not mandatory. At the contracting officer's 
discretion, one or more but not necessarily all of the evaluation 
procedures in Parts 14 or 15 may be used.
* * * * *
    (3) Contracting officers shall evaluate quotations or offers 
inclusive of transportation charges from the shipping point of the 
supplier to the delivery destination.
* * * * *
    (c) Award. (1) Occasionally an item can be obtained only from a 
supplier whothat quotes a minimum order price or quantity that either 
unreasonably exceeds stated quantity requirements or results in an 
unreasonable price for the quantities required. In these instances,

[[Page 47388]]

the contracting officer should inform the requiring activity of all 
facts regarding the quotation or offer and ask it to confirm or alter 
its requirement. The file shall be documented to support the final 
action taken.
    (2) For acquisitions not exceeding the simplified acquisition 
threshold (other than those conducted through FACNET), Except for 
awards conducted through FACNET, notification to unsuccessful suppliers 
shall be given only if requested.
* * * * *
    (d) * * *
    (3) If only one source is solicited and the acquisition does not 
exceed the simplified acquisition threshold, an additional notation 
shall be made to explain the absence of competition, except for 
acquisition of utility services available only from one source.
    (4) * * *
    (ii) Written solicitations (see 2.101). For acquisitions not 
exceeding the simplified acquisition threshold, wWritten records of 
solicitations/offers may be limited to notes or abstracts to show 
prices, delivery, references to printed price lists used, the supplier 
or suppliers contacted, and other pertinent data.
* * * * *
    18. Section 13.107 is amended by revising paragraph (a) to read as 
follows:


13.107  Solicitation forms.

    (a) For use of the SF 1449, Solicitation/Contract/Order for 
Commercial Items, see 12.204
* * * * *
    19. Section 13.202 is amended by revising paragraph (b)(2) to read 
as follows:


13.202  Establishment of blanket purchase agreements (BPAs).

* * * * *
    (b) * * *
    (2) Consider suppliers whose past performance has shown them to be 
dependable, and who offer good quality supplies or services at 
consistently lower prices
* * * * *
    20. Section 13.204 is amended by revising paragraphs (a) and (b) to 
read as follows:


13.204  Purchases under blanket purchase agreements.

    (a) The use of a BPA does not authorize purchases that are not 
otherwise authorized by law or regulation. For example, the BPA, being 
a method of simplifying the making of individual purchases, shall not 
be used to avoid the simplified acquisition threshold (or the 
$5,000,000 threshold, including options, on acquisitions using Subpart 
13.6).
    (b) Unless otherwise specified in agency regulations, individual 
purchases under BPAs, except those under BPAs established in accordance 
with 13.202(c)(3), shall not exceed $100,000 , or $5,000,000, including 
options, for acquisitions using Subpart 13.6).
* * * * *
    21. Subpart 13.6, consisting of sections 13.601 through 13.604-4, 
is added to read as follows:

Subpart 13.6--Use of Simplified Acquisition Procedures for the 
Purchase of Commercial Items in Amounts Greater Than the Simplified 
Acquisition Threshold But Not Exceeding $5 Million


13.601  General.

    This subpart authorizes, as a test program, use of the simplified 
acquisition procedures in Part 13 for the acquisition of commercial 
items in amounts greater than the simplified acquisition threshold but 
not exceeding $5,000,000, including options, if the condition in 13.602 
is met. The purpose of this test program is to vest contracting 
officers with additional procedural discretion and flexibility, so that 
commercial item acquisitions in this dollar range may be solicited, 
offered, evaluated, and awarded in a simplified manner that maximizes 
efficiency and economy and minimizes burden and administrative costs 
for both the Government and industry (see section 4202 of Public Law 
104-106). For the period of this test, contracting activities shall 
employ the simplified procedures authorized by the test to the maximum 
practicable extent. The authority to issue solicitations under this 
subpart shall expire on January 1, 2000. Contracts may be awarded after 
the expiration of this authority for solicitations issued before the 
expiration of the authority.


13.602  Condition for use.

    (a) At the contracting officer's option, any procedure in Part 13, 
other than those whose use is specifically limited to the simplified 
acquisition threshold or a lower threshold, may be used for a 
commercial item acquisition in an amount greater than the simplified 
acquisition threshold but not exceeding $5,000,000, including options, 
if the contracting officer reasonably expects, based on the nature of 
the commercial items sought and on market research, that offers will 
include only commercial items.
    (b) Circumstances under which the contracting officer may 
reasonably expect that offers will include only commercial items 
include, but are not limited to, the following:
    (1) No sources of items other than commercial items are known to 
exist;
    (2) Sources of items other than commercial items are known to exist 
but are not expected to submit offers; or
    (3) The agency has specified that only offers of commercial items 
will be considered. (This is likely to occur when the agency has 
determined that utilizing the capabilities of the commercial market is 
the optimum means of meeting its needs.)
    (c) If the contracting officer reasonably expected that offers 
would only include commercial items but receives one or more offers of 
other than commercial items, the contracting officer may proceed with 
the acquisition under the procedures in Part 13.
    (d) Contracts for commercial items awarded using the procedures of 
Part 13 remain subject to the requirements of Part 12 and other parts 
of the FAR pursuant to the order of precedence provided at 12.102(c). 
This includes use of the provisions and clauses at Subpart 12.3.


13.603  Additional requirements.

    (a) Sole source acquisitions. The acquisition may not be conducted 
on a sole source basis, unless the need to do so is justified in 
writing and approved at the levels as specified in subparagraphs (a)(1) 
and (a)(2) of this section. Full and open competition is not required; 
therefore, Part 6 does not apply; however, contracting officers shall 
prepare sole source justifications. When the types of conditions 
described at 6.302-2 occur (i.e., urgency), the justification may be 
made and approved within a reasonable time after contract award when 
preparation and approval prior to award would unreasonably delay the 
acquisition.
    (1) For a proposed contract exceeding $100,000 but not exceeding 
$500,000, the contracting officer's certification that the 
justification is accurate and complete to the best of the contracting 
officer's knowledge and belief will serve as approval, unless a higher 
approval level is established in agency procedures.
    (2) For a proposed contract exceeding $500,000, the waiver must be 
approved by the competition advocate for the procuring activity 
designated pursuant to 6.501; or an official described in 6.304(a)(3) 
or (a)(4). This authority is not delegable; and
    (b) Documentation. The contract file shall include--

[[Page 47389]]

    (1) A brief written description of the procedures used in awarding 
the contract;
    (2) The number of offers received; and
    (3) An explanation, tailored to the size and complexity of the 
acquisition, of the basis for the contract award decision.


13.604  Alternative negotiation techniques.


13.604-1  General.

    In addition to other procedures authorized by this subpart, 
notwithstanding 15.610, the contracting officer may use the negotiation 
techniques described in this section.


13.604-2  Awards based on price and price-related factors only.

    (a) The contracting officer may provide prospective offerors with a 
description of the Government's requirements and invite the submission 
of offers on a specified date, during a specified time period. During 
the specified time period, the amount of the lowest offer shall be 
posted electronically or otherwise on an auction board for viewing by 
interested parties. The identity of offerors shall not be disclosed 
during the period specified for receipt of offers. During the specified 
time period, offerors may revise offers at anytime. At the end of the 
specified period, the contracting officer awards the contract to the 
responsible offeror submitting the lowest priced acceptable offer.
    (b) As an alternative to the approach outlined in paragraph (a) of 
this subsection, the contracting officer may indicate to offerors 
during negotiations a price that the offeror will have to meet or 
better in order to be considered further. The same price must be 
communicated to all offerors. The price established by the contracting 
officer may be based on offers received or information from other 
sources as they may relate to the total acquisition or to any contract 
line item(s). A reasonable response time shall be established for the 
submission of revised offers. The contracting officer may repeat the 
process as necessary to conduct negotiations that will result in the 
submission of lower priced acceptable offers that will satisfy the 
Government's requirements. Revising an offer to meet or better a price 
established by the contracting officer does not guarantee any offeror 
an award. Offerors eliminated from the competition shall be promptly 
notified that their offer is no longer being considered.
    (c) Use of the technique described in paragraphs (a) and (b) of 
this subsection, may be appropriate when the contracting officer--
    (1) Can provide prospective offerors with a purchase description 
that clearly defines the Government's requirements;
    (2) Reasonably expects to receive more than one offer, and
    (3) Does not expect discussions with offerors regarding non-price 
aspects of the offer will be necessary.


13.604-3  Awards based on price and other factors.

    (a) When conducting negotiations, the contracting officer may 
indicate to all offerors a price, contract term or condition, 
commercially-available feature, and/or requirement (beyond any 
requirement or target specified in the solicitation) that an offeror 
will have to improve upon or meet, as appropriate, in order to remain 
competitive.
    (b) The price or other requirement identified to an offeror by the 
contracting officer as an area needing improvement or as a condition 
for further consideration for award--
    (1) May be based on an evaluation of offers received or information 
from other sources;
    (2) May relate to the total acquisition or to any contract line 
item(s);
    (3) Shall be based on an evaluation of individual offers and need 
not be the same for all offerors; and
    (4) Shall not disclose proprietary information.
    (c) The contracting officer may consider alternative offers. A 
reasonable response time shall be established for the submission of 
revised offers. The contracting officer may repeat the process as 
necessary to conduct negotiations that will result in increasing the 
value of acceptable offers that will satisfy the Government's 
requirements.
    (d) Revising an offer to meet or better a price or other 
consideration established by the contracting officer does not guarantee 
any offeror an award.
    (e) Offerors eliminated from the competition shall be promptly 
notified that their offer is no longer being considered.
    (f) When an offeror's price is used as the basis for negotiating 
with other offerors, the identify of that offeror shall not be 
disclosed during negotiations.


13.604-4  Solicitation provisions.

    (a) The contracting officer shall insert the provision at 52.213-4, 
Alternative Evaluation--Commercial Items, in lieu of the provision at 
52.212-2, Evaluation--Commercial Items, when the procedures described 
in 13.604-2(a) will be used.
    (b) The contracting officer shall insert a provision in 
solicitations, substantially the same as the provision at 52.213-5, 
Alternative Negotiation Techniques, when either the technique described 
in 13.604-2(b) or in 13.604-3 may be used.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    22. Sections 52.213-4 and 52.213-5 are added to read as follows:


52.213-4  Alternative Evaluation--Commercial Items.

    As prescribed in 13.604-4(a), insert the following provision:

Alternative Evaluation--Commercial Items (Date)

    (a) The Government will award a contract resulting from this 
solicitation to the responsible offeror submitting the lowest priced 
offer that conforms to the solicitation. Offers shall be submitted 
on [Contracting Officer inserts the date] beginning at [Contracting 
Officer inserts the time] and ending at [Contracting Officer inserts 
the time or date and time]. During the specified time frame, the 
amount of the lowest offer will be posted and may be viewed by 
[Contracting Officer describes how the information may be viewed 
electronically or otherwise]. Offerors may revise offers anytime 
during the specified period. At the end of the specified time 
period, the responsible Offeror submitting the lowest priced offer 
will be in line for award.
    (b) Options. The Government will evaluate offers for award 
purposes by adding the total price for all options to the total 
price for the basic requirement. The Government may determine that 
an offer is unacceptable if the option prices are significantly 
unbalanced. Evaluation of options shall not obligate the Government 
to exercise the options(s).
    (c) A written notice of award or acceptance of an offer, mailed 
or otherwise furnished to the successful offeror within the time for 
acceptance specified in the offer, shall result in a binding 
contract without further action by either party. Before the offer's 
specified expiration time, the Government may accept an offer (or 
part of an offer) unless a written notice of withdrawal is received 
before award.

(End of provision)


52.213-5  Alternative Negotiation Techniques.

    As prescribed in 13.604-4(b), insert the following provision:

Alternative Negotiation Techniques (Date)

    The Contracting Officer may elect to use the alternative 
negotiation techniques described in section 13.604-2(b) or 13.604-3 
of the Federal Acquisition Regulation in conducting this 
procurement. If used, offerors may respond by maintaining offers as 
originally submitted, revising offers, or by submitting an 
alternative offer. The Government may consider initial offers unless 
revised or withdrawn, revised offers, and alternative offers in 
making the award. Revising an offer does not guarantee an offeror an 
award.

[[Page 47390]]

(End of provision)

[FR Doc. 96-22745 Filed 9-5-96; 8:45 am]
BILLING CODE 6820-EP-P