[Federal Register Volume 62, Number 1 (Thursday, January 2, 1997)]
[Rules and Regulations]
[Pages 262-266]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33211]
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DEPARTMENT OF DEFENSE
48 CFR Parts 5, 6, 11, 12 and 13
[FAC 90-45; FAR Case 96-307; Item VII]
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: Final rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council have agreed on a final rule to amend
the Federal Acquisition Regulation (FAR) to implement Section 4202 of
the Clinger-Cohen Act of 1996 (Public Law 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, 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.
EFFECTIVE DATE: January 1, 1997.
FOR FURTHER INFORMATION CONTACT: Ms. Victoria Moss at (202) 501-4764 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 90-45, FAR case 96-307.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule amends the Federal Acquisition Regulation to
implement section 4202 of the Clinger-Cohen Act of 1996 (Public Law
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 41 U.S.C. 416 to permit issuance of
solicitations for commercial items in fewer than 15 days after the
synopsis notice is published.
A proposed rule was published in the Federal Register on September
6, 1996 (61 FR 47384). Twenty-four sources
[[Page 263]]
submitted comments in response to the proposed rule. All comments were
considered in the development of the final rule. Among other changes
adopted in this final rule, the proposed language at 13.604-2,
Alternative negotiation techniques, which introduced into the FAR an
auctioning-like concept, has been removed from this final rule for
further study and analysis under new FAR case 96-024.
B. Regulatory Flexibility Act
The changes may have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., because it is expected to
increase the number of Federal contracts awarded using procedures that
are familiar to small entities. A Final Regulatory Flexibility Analysis
(FRFA) has been prepared and will be provided to the Chief Counsel for
Advocacy of the Small Business Administration. A copy of the FRFA may
be obtained from the FAR Secretariat. The analysis is summarized as
follows: One public comment was received in response to the initial
regulatory flexibility analysis. The respondent stated that the
analysis did not indicate that regulatory alternatives were considered
in the process of drafting the proposed rule, and that there was no
estimated measure or quantification of small business impact or number
and dollar value of Federal contracts likely to be affected. The final
regulatory flexibility analysis contains a more complete description of
the alternatives that were considered for the purpose of minimizing any
adverse impact on small businesses and reflects data extrapolated from
the Federal Procurement Data System which show that in fiscal year
1995, 73 percent of all purchases made under the procedures used in
Part 13 were awarded to small businesses. As stated in the initial
regulatory flexibility analysis, the Federal Procurement Data System is
just beginning to track acquisitions of commercial items. Until more
complete data are collected, it will be difficult to precisely estimate
the number of small entities to which the rule will apply. The rule
imposes no new reporting, recordkeeping, or other compliance
requirements. We considered whether flexible compliance with this rule
would be appropriate. Since the rule is expected to have a beneficial
impact on industry, it was determined that flexible compliance would
not be appropriate in this case. Instead, the rule is intended to apply
to both small and large entities equally so that both may benefit.
However, in developing the final rule, alternatives were considered,
and revisions were made, to minimize possible economic impact on small
entities. The language on alternative negotiation techniques has been
removed from the rule pending further study and analysis. At the
present time, this rule does not extend authority to use the special
test procedures for construction. The proposed language included on
construction, in Part 13, was not intended to address the applicability
of the test procedures to construction and the language in the final
rule has been amended to eliminate this ambiguity. The broader issue of
the applicability of the FAR's commercial item policies to construction
contracting is under review.
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.
List of Subjects in 48 CFR Parts 5, 6, 11, 12 and 13
Government procurement.
Dated: December 24, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, 48 CFR Parts 5, 6, 11, 12 and 13 are amended as set
forth below:
1. The authority citation for 48 CFR Parts 5, 6, 11, 12 and 13
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 when 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) In addition to other requirements set forth in this section,
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 6--COMPETITION REQUIREMENTS
4. Section 6.001(a) is revised to read as follows:
6.001 Applicability.
* * * * *
(a) Contracts awarded using the simplified acquisition procedures
of part 13 (but see 13.602 for requirements pertaining to sole source
acquisitions of commercial items under subpart 13.6);
* * * * *
PART 11--SUBSCRIBING AGENCY NEEDS
5. Section 11.002 is amended by revising paragraph (a)(1)(ii) and
adding paragraph (e) to read as follows:
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.
6. Section 11.104 is amended by revising paragraph (a) to read as
follows:
11.104 Items peculiar to one manufacturer.
* * * * *
[[Page 264]]
(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
7. 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.
* * * * *
8. 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.
* * * For acquisitions of commercial items exceeding the simplified
acquisition threshold but not exceeding $5,000,000, including options,
contracting activities shall employ the simplified procedures
authorized by subpart 13.6 to the maximum extent practicable.
9. 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.
10. 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.
11. 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 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.
12. 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.
* * * * *
13. 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 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, when using the simplified
acquisition procedures in part 13, contracting officers are not
required to describe the relative importance of evaluation factors.
* * * * *
14. 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)
(but see 5.203(h)).
* * * * *
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
15. 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). Section
13.601 provides special authority 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.
16. 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
[[Page 265]]
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 the applicable 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 acquisitions of other
than commercial items not expected to exceed the simplified acquisition
threshold, contracting officers may use any appropriate combination of
the procedures in part 13, 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)). For
acquisitions of commercial items not expected to exceed $5 million,
contracting officers may use any appropriate combination of the
procedures in parts 12, 13, 14 and 15 (see 13.103(c)).
* * * * *
17. 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.
* * * * *
18. Section 13.106-2 is amended by revising paragraphs (a)(1)
through (a)(3), (a)(4) introductory text, (a)(5), (a)(6), (b)(1),
(b)(3), (c)(1), (c)(2), (d)(3) and (d)(4)(ii); redesignating (a)(6)
through (8) as (a)(7) through (9), respectively; and by adding new
(a)(6), and (a)(10) 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 and 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.
When a synopsis is required, sufficient information to permit suppliers
to develop quotations or offers may be incorporated into a combined
synopsis/ solicitation. In such cases, the contracting officer is not
required to issue a separate solicitation. For commercial item
acquisitions, also 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. Paper
solicitations for contract actions not expected to exceed $25,000
should only be issued only 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 a synopsis 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
extent practicable. 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.
(6) For sole source acquisitions of commercial items in excess of
the simplified acquisition threshold conducted pursuant to subpart
13.6, the requirements at 13.602(a) apply.
(7) Contracting officers shall not limit competition to suppliers
of well-known and widely distributed makes or brands (see 11.104), or
solicit quotations or offers on a personal preference basis.
* * * * *
(10) Solicitations are not required to state the relative
importance assigned to each evaluation factor and subfactor, nor are
they required to include subfactors.
(b) Evaluation of quotations or offers. (1) When evaluating
quotations or offers, the evaluation must be made on the basis
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 part 14 or 15 may be used. Formal evaluation plans,
establishment of a competitive range, conduct of discussions, and
scoring of quotes or offers are not required. Contracting offices may
conduct comparative evaluations of offers. Evaluation of other factors,
such as past performance, does not require the creation or existence of
a formal data base, but may be based on such information as the
contracting officer's knowledge of and previous experience with the
item or service being purchased, customer surveys, or other reasonable
basis.
* * * * *
(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 that quotes a minimum order price or quantity that either
unreasonably exceeds stated quantity requirements or results in an
unreasonable price for the
[[Page 266]]
quantities required. In these instances, 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, 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, written 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.
* * * * *
19. 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.
* * * * *
20. 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 quality supplies or services at consistently
lower prices and who have provided numerous purchases at or below the
simplified acquisition threshold.
* * * * *
21. 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 $5,000,000
for acquisitions of commercial items conducted under 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 the simplified acquisition
threshold, or $5,000,000, for acquisitions of commercial items
conducted under subpart 13.6.
* * * * *
22. Subpart 13.6, consisting of sections 13.601 and 13.602, is
added to read as follows:
Subpart 13.6-Test Program for Certain Commercial Items
Sec.
13.601 General.
13.602 Special documentation requirements.
13.601 General.
(a) This subpart authorizes, as a test program, use of simplified
procedures for the acquisition of supplies and services in amounts
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 supplies or services sought, and on
market research, that offers will include only commercial items. Under
this test program, contracting officers may use any simplified
acquisition procedure in this part, subject to any specific dollar
limitation applicable to the particular procedure. 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
(10 U.S.C. 2304(g) and 2305 and 41 U.S.C. 253(g) and 253a and 253b).
(b) For the period of this test, contracting activities shall
employ the simplified procedures authorized by the test to the maximum
extent practicable.
(c) When acquiring commercial items using the procedures in this
part, the requirements of part 12 apply subject to the order of
precedence provided at 12.102(c). This includes use of the provisions
and clauses at subpart 12.3.
(d) 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 Special documentation requirements.
(a) Sole source acquisitions. Acquisitions conducted under
simplified acquisition procedures are exempt from the requirements in
part 6. However, contracting officers shall not conduct sole source
acquisitions, as defined in 6.003, under this subpart unless the need
to do so is justified in writing and approved at the levels specified
in paragraphs (a)(1) and (a)(2) of this section. Contracting officers
shall prepare sole source justifications using the format at 6.303-2,
modified to reflect an acquisition under the authority of the test
program for commercial items (section 4202 of the Clinger-Cohen Act).
Justifications and approvals are required under this subpart only for
sole source acquisitions.
(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 approval shall
be 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.
(b) Contract file documentation. The contract file shall include--
(1) A brief written description of the procedures used in awarding
the contract, including the fact that the test procedures in FAR 13.6
were used;
(2) The number of offers received;
(3) An explanation, tailored to the size and complexity of the
acquisition, of the basis for the contract award decision; and
(4) Any justification approved under paragraph (a) of this section.
[FR Doc. 96-33211 Filed 12-31-96; 8:45 am]
BILLING CODE 6820-EP-P