[Federal Register Volume 64, Number 177 (Tuesday, September 14, 1999)]
[Proposed Rules]
[Pages 49948-49949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23828]



[[Page 49947]]

_______________________________________________________________________

Part X





Department of Defense General Services





Administration





National Aeronautics and Space Administration





_______________________________________________________________________



48 CFR Parts 8 and 38



Federal Acquisition Regulation; Federal Supply Schedules Small Business 
Opportunities; Proposed Rule

  Federal Register / Vol. 64, No. 177 / Tuesday, September 14, 1999 / 
Proposed Rules  

[[Page 49948]]



DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 8 and 38

[FAR Case 98-609]
RIN 9000-AI48


Federal Acquisition Regulation; Federal Supply Schedules Small 
Business Opportunities

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

action: Proposed rule.

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summary: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are proposing to amend the 
Federal Acquisition Regulation (FAR) to enhance the participation of 
small business concerns under the Federal Supply Schedules Program.

dates: Comments should be submitted on or before November 15, 1999 to 
be considered in the formulation of a final rule.

addresses: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat (MVRS), 1800 F Street, 
NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405.
    Address e-mail comments submitted via the Internet to farcase.98-
[email protected].
    Please cite FAR case 98-609 in all correspondence related to this 
case.

for further information contact: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC 20405, at (202) 501-4755 for information 
pertaining to status or publication schedules. For clarification of 
content, contact Ms. Linda Nelson, Procurement Analyst, at (202) 501-
1900. Please cite FAR case 98-609.

supplementary information:

A. Background

    This proposed rule recommends amending FAR Part 8 to encourage 
ordering offices to consider small businesses when conducting 
evaluations before placing an order. The rule also recognizes the 
recent change made by the Small Business Administration whereby 
agencies are required, beginning in fiscal year 1999, to include in 
their procurement base and goals, the dollar value of orders expected 
to be placed against the General Services Administration's (GSA) 
Federal Supply Service (FSS) Schedules, and to report accomplishments 
against these goals. The rule also proposes to amend FAR Part 38 to 
reaffirm that the General Services Administration and agencies 
delegated the authority to establish a Federal Supply Schedule must 
comply with all statutory and regulatory requirements before a 
solicitation is issued. In addition, the rule proposes several minor 
revisions.
    This rule was not subject to Office of Management and Budget review 
under Section 6(b) of Executive Order 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.

B. Regulatory Flexibility Act

    This proposed rule is 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., because more 
orders placed against Federal Supply Schedules may be awarded to small 
business concerns. Since this may result in a positive impact on small 
entities, an Initial Regulatory Flexibility Analysis (IRFA) has been 
performed and is summarized as follows:

    The objective of the rule is to ensure that small business 
concerns have the maximum practicable opportunity to compete in 
Federal Supply Schedule acquisitions. According to statistical data 
maintained by the General Services Administration's Federal Supply 
Service, there are 4,900 Federal Supply Schedule contracts that are 
in effect with small business concerns out of a population of 7,000 
national scope schedule contracts. Approximately 70 percent of the 
schedule contractors are small business concerns. In fiscal year 
1998, small business schedule contractors received approximately 
$2.5 billion, or 33 percent, of total schedule sales. The proposed 
rule encourages ordering offices to consider the availability of 
small business concerns under the schedule and encourages the 
consideration of such firms when conducting evaluations before 
placing an order.

    The FAR Secretariat has submitted a copy of the IRFA to the Chief 
Counsel for Advocacy of the Small Business Administration. A copy of 
the IRFA may be obtained from the FAR Secretariat. The Councils will 
consider comments from small entities concerning the affected FAR 
Subparts 8 and 38 in accordance with 5 U.S.C. 610. Comments must be 
submitted separately and should cite 5 U.S.C. 601, et seq. (FAR case 
98-609), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that 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 8 and 38:

    Government procurement.

    Dated: September 7, 1999.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA propose that 48 CFR Parts 8 and 38 be 
amended as set forth below:
    1. The authority citation for 48 CFR parts 8 and 38 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).

PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES

    2. Revise section 8.402 to read as follows:


8.402  Applicability.

    Procedures in this subpart apply to orders placed against Federal 
Supply Schedules. Occasionally, GSA may establish special ordering 
procedures. The affected Federal Supply Schedules will outline these 
procedures.

3. In section 8.404--
    a. Revise paragraph (a);
    b. Remove from paragraph (b)(1) ``Ordering Offices can place'' and 
add ``Place'' in its place;
    c. Revise the introductory text of paragraph (b)(2);
    d. Revise paragraph (b)(2)(i);
    e. Remove from the introductory text of paragraph (b)(3) ``, 
ordering offices shall'';
    f. Revise paragraph (b)(3)(i);
    g. Revise the first sentence in paragraph (b)(3)(iii); and
    h. Revise paragraphs (b)(4), (b)(5), and (b)(6) to read as follows:


Sec. 8.404  Using schedules.

    (a) General. Parts 13 and 19 do not apply to orders placed against 
Federal Supply Schedules, except for the provision at 13.303-2(c)(3). 
Orders placed against a Multiple Award Schedule (MAS), using the 
procedures in this subpart, are considered to be issued using full and 
open competition (see 6.102(d)(3)). Therefore, ordering offices need 
not seek further competition, synopsize the requirement, make a 
separate determination of fair and reasonable pricing, or consider

[[Page 49949]]

small business programs. GSA has already determined the prices of items 
under schedule contracts to be fair and reasonable. By placing an order 
against a schedule using the procedures in this section, the ordering 
office has concluded that the order represents the best value and 
results in the lowest overall cost alternative (considering price, 
special features, administrative costs, etc.) to meet the Government's 
needs.
    (b) * * *
    (2) Orders exceeding the micro-purchase threshold but not exceeding 
the maximum order threshold. Place orders with the schedule contractor 
that can provide the supply or service that represents the best value. 
Consider reasonably available information about the supply or service 
offered under MAS contracts by using the ``GSA Advantage!'' on-line 
shopping service, or by reviewing the catalogs or pricelists of at 
least three schedule contractors (see 8.404(b)(6)). Select the delivery 
and other options available under the schedule that meet the agency's 
needs. When selecting the supply or service representing the best 
value, consider--
    (i) Special features of the supply or service required for 
effective program performance;
* * * * *
    (3) * * *
    (i) Review additional schedule contractors' catalogs or pricelists, 
or use the ``GSA Advantage!'' on-line shopping service;
* * * * *
    (iii) After seeking price reductions, place the order with the 
schedule contractor that provides the best value and results in the 
lowest overall cost alternative (see 8.404(a)). * * *
    (4) Blanket purchase agreements (BPAs). Agencies may establish BPAs 
(see 13.303-2(c)(3)) when following the ordering procedures in this 
subpart. All schedule contracts contain BPA provisions. Ordering 
offices may use BPAs to establish accounts with contractors to fill 
recurring requirements. BPAs should address ordering frequency, 
invoicing, discounts, and delivery locations and times.
    (5) Price reductions. In addition to the circumstances in paragraph 
(b)(3) of this section, there may be other reasons to request a price 
reduction. For example, seek a price reduction when the supply or 
service is available elsewhere at a lower price or when establishing a 
BPA to fill recurring requirements. The potential volume of orders 
under BPAs, regardless of the size of the individual order, offer the 
opportunity to secure greater discounts. Schedule contractors are not 
required to pass on to all schedule users a price reduction extended 
only to an individual agency for a specific order.
    (6) Small business. When conducting evaluations and before placing 
an order, consider including, if available, one or more small, small 
women-owned and or small disadvantaged business schedule contractor(s). 
Orders placed against the schedules may be credited toward the ordering 
agency's small business goals. For orders exceeding the micro-purchase 
threshold, ordering offices should give preference to the items of 
small business concerns when two or more items at the same delivered 
price will satisfy the requirement.
* * * * *

PART 38--FEDERAL SUPPLY SCHEDULE CONTRACTING

    4. Revise section 38.101 to read as follows:


38.101  General.

    (a) The Federal Supply Schedule program, pursuant to 41 U.S.C. 
259(b)(3), provides Federal agencies with a simplified process of of 
acquiring commonly used supplies and services in varying quantities 
while obtaining volume discounts. Indenfinite-delivery contracts 
(including requirements contracts) are awarded using competitive 
procedures to commercial firms. The firms provide supplies and services 
at stated prices for given periods of time, for delivery within a 
stated geographic area such as the 48 continguous states, the District 
of Columbia, Alaska, Hawaii, and overseas. The schedule contracting 
office issues Federal Supply Schedules that contain information needed 
for placing orders.
    (b) Each schedule identifies agencies that are required to use the 
contracts as primary sources of supply.
    (c) Federal agencies not identified in the schedules as mandatory 
users (see 8.404-2) may issue orders under the schedules. Contractors 
are encouraged to accept the orders.
    (d) Although GSA awards most Federal Supply contracts, it may 
authorize other agencies to award schedule contracts and publish 
schedules. For example, the Department of Veterans Affairs awards 
schedule contracts for certain medical and nonperisable subsistence 
items.
    (e) When establishing Federal Supply Schedules, GSA, or an agency 
delegated that authority, is responsible for complying with all 
applicable statutory and regulatory requirements (e.g., parts 5, 6, and 
19). The requirements of parts 5, 6, and 19 apply at the acquisition 
planning stage prior to issuing the schedule soliciation and do not 
apply to orders and BPAs placed under resulting schedule contracts (see 
8.404).

[FR Doc. 99-23828 Filed 9-13-99; 8:45 am]
BILLING CODE 6820-EP-M