[Federal Register Volume 62, Number 59 (Thursday, March 27, 1997)]
[Proposed Rules]
[Pages 14756-14757]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7606]
[[Page 14755]]
_______________________________________________________________________
Part III
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Part 39
Federal Acquisition Regulation; Modular Contracting; Proposed Rule
Federal Register / Vol. 62, No. 59 / Thursday, March 27, 1997 /
Proposed Rules
[[Page 14756]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 39
[FAR Case 96-605]
RIN 9000-AH55
Federal Acquisition Regulation; Modular Contracting
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule with request for comment and notice of public
meeting.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council are issuing a proposed amendment to the
Federal Acquisition Regulation (FAR) to address the requirements of
Public Law 104-106, the Information Technology Management Reform Act
(ITMRA) of 1996, regarding acquisition of information technology (IT)
using modular contracting techniques. 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: Public Meeting: April 28, 1997, 9:00 a.m. until 12:00 p.m.
Written Statements Due: April 22, 1997.
Comments Due: Comments should be submitted on or before May 27,
1997 to be considered in the formulation of a final rule.
ADDRESSES: Comments: Interested parties should submit written comments
and copies of their oral presentations to: General Services
Administration, FAR Secretariat (MVR), 1800 F Street, NW, Room 4035,
Washington, DC 20405.
Internet: E-mail comments should be addressed to: www.arnet.gov">96-
605@www.arnet.gov.
Public Meeting: GSA Auditorium, 1800 F Street, NW (First Floor),
Washington, DC 20405.
Please cite FAR case 96-605 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: Mr. Jack O'Neill at (202) 501-3856 in
reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAR case 96-605.
SUPPLEMENTARY INFORMATION:
A. Background
Division E of Public Law 104-106, ITMRA, at Section 5202, enacted
new policies and procedures for the acquisition of IT and directed that
they be implemented in the FAR. Specifically, ITMRA requires that
coverage for modular contracting be included in the FAR.
The following coverage addresses that ITMRA requirement by
proposing to provide guidance to Federal agencies about using modular
contracting, to the maximum extent practicable, when acquiring major
systems of information technology. When using a modular contracting
approach, agencies acquire major IT acquisitions by dividing them into
smaller, more manageable increments. ITMRA indicates that agencies
should complete the award of each successive module in a shorter time
frame, preferably within 180 days from the date when a solicitation is
issued. In addition to more rapid acquisition of modules, other
potential benefits that may be realized as a result of modular
contracting include delivery and testing of systems in discrete
increments that are not dependent on other increments, and the
opportunity in subsequent increments to take advantage of any evolution
in technology.
The FAR Council, the Chief Information Officers (CIO) Council, and
the Interagency FAR Information Technology Committee are interested in
an exchange of ideas and opinions with respect to this rule and,
accordingly, have scheduled a public meeting at the GSA Auditorium,
Washington, DC, on April 28, 1997, at 9:00 a.m. The public is
encouraged to furnish its views. Written statements for presentation
should be submitted to the FAR Secretariat by April 22, 1997. Persons
or organizations with similar positions are encouraged to select a
common spokesperson for presentation of their views.
B. Regulatory Flexibility Act
The proposed rule is not expected to 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. The rule would
not impose any specific cost burden on small entities, over and above
what burden the marketplace demands for modular contracting compliance.
The modular contracting approach should slightly benefit small entities
because use of modular contracting techniques should increase the
number of business opportunities available to them. When a modular
contracting approach is used, large complex IT systems will be divided
into smaller, discrete increments that may subsequently be made
available to small business entities to bid and manage. The proposed
rule would provide needed coverage to ensure that ITMRA is implemented
regarding use of modular contracting for the acquisition of IT systems.
An Initial Regulatory Flexibility Analysis has, therefore, not been
performed. Comments from small entities concerning the affected FAR
part will be considered in accordance with 5 U.S.C. 610 of the Act.
Such comments must be submitted separately and should cite 5 U.S.C.
601, et seq. (FAR case 96-605), 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 Part 39
Government procurement.
Dated: March 20, 1997.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, it is proposed that 48 CFR Part 39 be amended as set
forth below:
PART 39--ACQUISITION OF INFORMATION TECHNOLOGY
1. The authority citation for 48 CFR Part 39 continues to read as
follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
2. Section 39.002 is amended by adding in alphabetical order the
definition of ``Modular contracting'' to read as follows:
39.002 Definitions.
Modular contracting, as used in this part, means use of one or more
contracts to acquire information technology systems in successive,
interoperable increments.
* * * * *
3. Section 39.103 is added to read as follows:
39.103 Modular contracting.
(a) This section implements Section 5202, Incremental Acquisition
of Information Technology, of the Clinger-Cohen Act of 1996 (Public Law
104-106). Modular contracting is intended to reduce program risk and to
incentivize
[[Page 14757]]
contractor performance while meeting the Government's need for timely
access to rapidly changing technology. Consistent with the agency's
information technology architecture, agencies should, to the maximum
extent practicable, use modular contracting to acquire major systems
(see FAR 2.101) of information technology. Agencies may also use
modular contracting to acquire non-major systems of information
technology.
(b) When using modular contracting, an acquisition of a system of
information technology may be divided into several smaller acquisition
increments that--
(1) Are easier to manage individually than would be possible in one
comprehensive acquisition;
(2) Address complex information technology objectives incrementally
in order to enhance the likelihood of achieving workable systems or
solutions for attainment of those objectives;
(3) Provide for delivery, implementation, and testing of workable
systems or solutions in discrete increments, each of which comprises a
system or solution that is not dependent on any subsequent increment in
order to perform its principal functions; and
(4) Provide an opportunity for subsequent increments to take
advantage of any evolution in technology or needs that occur during
implementation and use of the earlier increments.
(5) Reduce risk of potential adverse consequences on the overall
project by isolating and avoiding custom-designed components of the
system.
(c) The characteristics of an increment may vary depending upon the
type of information technology being acquired and the nature of the
system being developed. The following factors may be considered:
(1) To promote compatibility, the information technology acquired
through modular contracting for each increment should comply with
common or commercially acceptable information technology standards when
available and appropriate, and shall conform to the agency's master
information technology architecture.
(2) The performance requirements of each increment should be
consistent with the performance requirements of the completed, overall
system within which the information technology will function and should
address interface requirements with succeeding increments.
(d) For each increment, contracting officers shall choose an
appropriate contracting technique that facilitates the acquisition of
subsequent increments. Pursuant to parts 16 and 17, contracting
officers shall select the contract type and method appropriate to the
circumstances (e.g., indefinite delivery, indefinite quantity
contracts, single contract with options, successive contracts, multiple
awards). Contract(s) shall be structured to ensure that the Government
is not required to procure additional increments.
(e) To avoid obsolescence, a modular contract for information
technology should, to the maximum extent practicable, be awarded within
180 days after the date on which the solicitation is issued. If award
cannot be made within 180 days, agencies should consider cancellation
of the solicitation in accordance with FAR 14.209 or 15.606(b)(4). To
the maximum extent practicable, deliveries under the contract should be
scheduled to occur within 18 months after issuance of the solicitation.
[FR Doc. 97-7606 Filed 3-26-97; 8:45 am]
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