[Federal Register Volume 61, Number 229 (Tuesday, November 26, 1996)]
[Proposed Rules]
[Pages 60068-60070]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30060]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

48 CFR Ch. 13

[Docket No. 960826231-6231-01]
RIN 0690-AA26


Streamlining of Commerce Acquisition Process

AGENCY: Department of Commerce.

ACTION: Advance notice of proposed rulemaking.

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

SUMMARY: The Department of Commerce has reengineered its acquisition 
processes and is planning to implement these new processes department-
wide. The Department is also testing the effectiveness of the new 
processes at two Pilot sites within the agency. The new processes are 
described in the Acquisition Process Case for Change, Concept of 
Operations (CONOPS). The new processes were developed by a team of 
departmental representatives who extensively reviewed private and 
public sector acquisition practices and recommendations. The intended 
effect is to create a more customer-friendly acquisition process that 
is less complex,

[[Page 60069]]

less time consuming and less expensive for the Department as well as 
the vendor community, and is more responsive to meeting the 
Department's program objectives. The new processes are also designed to 
be fair, to increase the public's insight into the Government's mission 
objectives and acquisition processes and to increase the range of 
potential approaches and capabilities which may compete to meet a 
particular Department need.
    In order to implement the new processes on a department-wide basis, 
a class deviation to applicable provisions of the Federal Acquisition 
Regulations (FAR) would be required. The Department is inviting public 
comment on the proposed streamlined acquisition processes and proposed 
FAR deviations

DATES: Comments must be submitted on or before January 10, 1997.

ADDRESSES: Comments may be mailed to Joe Gray, Office of Procurement 
Policy and Programs, U.S. Department of Commerce, 14th and Constitution 
N.W., Room 6422, Washington, D.C. 20230. Comments may also be submitted 
electronically via the following Internet site: http://
www.conops.doc.gov.

FOR FURTHER INFORMATION CONTACT:
 Joe Gray at 301 258-4505, ext. 25; E-mail: JLG[email protected].

SUPPLEMENTARY INFORMATION: The Department of Commerce (DOC) Office of 
Acquisition Management has sponsored a business process reengineering 
effort to create a more customer-friendly, cost-effective acquisition 
process that is less complex and time consuming and is more responsive 
to meeting the agency's program objectives. The effort was facilitated 
by the PTO Office of Business Process Reengineering. The reengineered 
process is described in the Acquisition Process Case for Change, 
Concept of Operations (CONOPS).

    The CONOPS is the product of a cross-functional team of 
departmental representatives who extensively reviewed private and 
public sector acquisition practices and recommendations. The 
reengineered practices will streamline the Department's acquisition 
processes and provide significant benefits to the agency and the vendor 
community by reducing the time and effort required to complete the 
acquisition cycle and by providing an opportunity for substantially 
increasing the value and quality of acquisition products.
    The Department of Commerce is testing the effectiveness of the new 
processes on several projects at two Pilot sites within the agency. The 
results of these pilots will be used to validate and refine the CONOPS 
for future implementation on a department-wide basis.
    In order to implement the reengineered processes on a department-
wide basis a class deviation to the Federal Acquisition Regulations 
(FAR) provisions is required in accordance with FAR 1.404. Since the 
reengineered processes will substantially affect the way in which the 
Department will conduct its acquisitions, public comment on the new 
processes and proposed FAR deviations is invited. Public comment will 
be taken into account in refining the CONOPS and in preparation and 
issuance of the FAR deviations which facilitate implementation of the 
CONOPS.

Part 1. Reengineered Acquisition Process

    The Concept of Operations (CONOPS) may be obtained by submitting a 
written request to Joe Gray, U.S. Department of Commerce, 14th and 
Constitution, N.W., Room 6422, Washington, D.C. 20230, or fax to 202-
482-1711. The CONOPS is also available at the following Internet site: 
http://www.conops.doc.gov.

Part 2. Class Deviation

Class Definition

    The class of procurements to which the proposed FAR deviation will 
apply is ``all acquisitions conducted within the Department of Commerce 
in accordance with the CONOPS''.

Proposed FAR Deviations

    In order to implement the reengineered acquisition processes the 
following deviations from the Federal Acquisition Regulations (FAR) are 
required.
    1. FAR Subparts 10 and 11. Minimum Needs.
    Discussion: One of the premises of the BPR CONOPS is to seek early 
involvement of the private sector in the acquisition process, and to 
maximize competition and promote innovative solutions wherever 
practicable by stating requirements in the form of a statement of need 
in terms of mission/project objectives rather than a detailed statement 
of work. While the recommended practice appears to be consistent with 
the intent of the FAR, the use of the term ``minimum needs'' (FAR 
10.004(a)(1)) as well as the numerous references to requirements, 
specifications, and purchase descriptions, found in Subparts 10 and 11 
create ambiguity and are interpreted by some to preclude adoption of 
the recommended approach.
    Proposed FAR Deviation: Nothing in FAR Subparts 10 or 11 will be 
construed to prohibit the expression of requirements in terms of 
mission or project needs and objectives (rather than detailed 
statements of work) together with appropriate guidance to potential 
sources, as a basis for soliciting and evaluating proposed approaches, 
capabilities and proposals, for the purpose of down-selecting for 
negotiation, as needed, and award.
    2. FAR Subparts 5, 6, 10 and 15. Publicizing, market research, 
competition, solicitation, proposal and competitive range requirements.
    Discussion: The BPR CONOPS is based on a two-phased approach to 
meeting mission/project needs which combines market research and 
solicitation into a single process. The initial phase involves issuance 
of a procurement opportunity notice in the Commerce Business Daily, and 
release of a description of the project objectives and ground rules for 
receipt and down-selection, including evaluation factors such as 
approach, capability, past performance and cost. Upon conclusion of the 
initial phase, only those sources considered likely candidates for 
award will be invited to participate in the second phase during which 
more detailed proposals and discussions will occur. The intent is to 
meet requirements for full and open competition while limiting the 
extent of solicitation and proposal preparation, evaluation and 
negotiation to that which contributes significantly to the achievement 
of project objectives and the opportunity for private sector sources to 
participate in those objectives.
    Negotiations will be concluded when the Project Team is satisfied 
that it has reached agreement on contract terms and conditions with a 
source which has been determined, in accordance with the evaluation 
factors, to be the source most likely to provide the best value 
performance in relation to the Government's needs, with due 
consideration to fairness in providing sources the opportunity to 
present their offers. Additional streamlining is sought through the 
elimination of announcement of the close of negotiations and the use of 
best and final offers. Offerors will be expected to make their best 
proposals available at appropriate times during the process without a 
need for a final call.
    Proposed FAR Deviation: A deviation from the provisions of FAR 
Subparts 5, 6, 10 and 15 is requested which will allow the Department 
of Commerce to combine publicizing, market research and solicitation 
into a single two-phased

[[Page 60070]]

process as outlined above and described more fully in the CONOPS. 
Pursuant to this deviation the agency may meet publicizing requirements 
by publishing the Project Agreement or a notice of its availability in 
the CBD, and meet the requirement for full and open competition by 
inviting all responsible sources to submit information regarding their 
qualifications and approach to meeting the agencies objectives as 
described in the Project Agreement.
    Features specifically permitted include, but are not limited to, 
the ability of the Department of Commerce Project Teams:
    (1) during the initial phase to down-select among sources on the 
basis of capabilities, approach, past performance and other criteria as 
specified in the published Project Agreement and Ground Rules, without 
the necessity of receiving or reviewing detailed technical proposals;
    (2) to continue market research and initiate solicitation by 
issuance of the Project Agreement during the initial phase of the 
acquisition process;
    (3) to invite only those sources to participate during the second 
phase who were found to have a reasonable likelihood of receiving a 
contract award as a result of their participation during phase one;
    (4) to conclude negotiations at any time after receipt of vendor 
information during phase two, in accordance with published ground rules 
and criteria, and to conduct and conclude discussions without the need 
to notify the sources in advance of the date and time for conclusion of 
discussions, or to request best and final offers; and
    (5) to deviate from the Uniform Contract Format and to deviate from 
or omit solicitation and contract terms and conditions prescribed by 
the FAR as necessary and appropriate to reflect the streamlined 
processes upon which this deviation is based, except where and to the 
extent required by statute.
    (6) to down-select among proposals and sources and eliminate 
sources where there is significant doubt as to whether a proposal has a 
reasonable chance of being selected for award.
    3. FAR Subparts 15, 16 and 42. Contract Type and Required Audit 
Sources.
    Discussion: Current regulations have a preference for use of fixed 
price and cost-based contracts over labor-hour and time and materials 
contracts and require use of Government audit agencies to conduct 
contractor cost audits. It is our intent to reduce the need for pre- 
and post-award cost audits by utilizing cost-based contracting only as 
a last resort and utilizing fixed-price and labor hour or time and 
materials types for task order and incremental development process 
(IDP) contracts, as described in the CONOPS, instead. When audits are 
needed these would be obtained utilizing commercial auditing 
capabilities, e.g., reputable private sector Certified Public 
Accountants (CPAs), instead of Government audit agencies. This will be 
less expensive and administratively less burdensome for both the agency 
and the contractor.
    Proposed FAR Deviation: A deviation from FAR provisions is 
requested to permit use of appropriate contract type without necessity 
of preparing a determination and findings that no other type is more 
suitable. Also a deviation is requested which will permit the use of 
private sector CPAs to perform audits instead of Government audit 
agencies.

    Authority: The Federal Property and Administrative Services Act 
of 1949, as amended, and other applicable laws and regulations.

    Dated: August 30, 1996.
Kenneth J. Buck,
Acting Director, Office of Acquisition Management, U.S. Department of 
Commerce.
[FR Doc. 96-30060 Filed 11-25-96; 8:45 am]
BILLING CODE 3510-03-M