[Federal Register Volume 64, Number 240 (Wednesday, December 15, 1999)]
[Proposed Rules]
[Pages 70158-70161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32476]



[[Page 70157]]

_______________________________________________________________________

Part IV

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Parts 2, 16, and 37



Federal Acquisition Regulation; Competition Under Multiple-Award 
Contracts; Proposed Rule

  Federal Register / Vol. 64, No. 240 / Wednesday, December 15, 1999 / 
Proposed Rules  

[[Page 70158]]



DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 16, and 37

[FAR Case 1999-014]
RIN 9000-AI53


Federal Acquisition Regulation; Competition Under Multiple-Award 
Contracts

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 clarify what contracting 
officers should consider when planning for multiple awards of 
indefinite-delivery contracts and clarify how orders should be placed 
against the resultant contracts.

DATES: Interested parties should submit comments in writing on or 
before February 14, 2000 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: 
[email protected].
    Please submit comments only and cite FAR case 1999-014 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 Mr. Ralph De Stefano, Procurement Analyst, at (202) 
501-1758. Please cite FAR case 1999-014.

SUPPLEMENTARY INFORMATION:

A. Background

    The proposed rule amends FAR Part 16 to provide policy on multiple-
award task and delivery-order contracts; amends FAR Part 37 to delete a 
definition; and amends FAR Part 2 to insert the definition that was 
deleted from Part 37. The proposed rule also clarifies the FAR's 
current implementation of sections 1004 and 1054 of the Federal 
Acquisition Streamlining Act of 1994 (Pub. L. 104-355). The rule 
reinforces key principles regarding the structure, administration, and 
use of multiple award task and delivery order contracts, such as the 
expectation of providing awardees a fair opportunity to be considered 
for orders throughout the life of the contract. The rule provides 
policy that clarifies what contracting officers should consider when 
planning for multiple award of indefinite-delivery contracts and 
clarifies how orders should be placed against the resultant contracts.
    The rule continues to provide contracting officers broad 
discretion. It includes streamlined ordering processes that provide 
effective, flexible, and timely solutions for agency requirements 
through orders placed under multiple award task or delivery order 
contracts.
    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 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., because the rule 
only clarifies what the contracting officer should consider when 
planning for and placing orders under multiple-award contracts. 
Therefore, we have not prepared an Initial Regulatory Flexibility 
Analysis. We invite comments from small businesses and other interested 
parties. The Councils will consider comments from small entities 
concerning the affected FAR subparts in accordance with 5 U.S.C. 610. 
Interested parties must submit such comments separately and should cite 
5 U.S.C. 601, et seq. (FAR case 1999-014), 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 2, 16, and 37:

    Government procurement.

    Dated: December 9, 1999.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
    Therefore, DoD, GSA, and NASA propose that 48 CFR Parts 2, 16, and 
37 be amended as set forth below:
    1. The authority citation for 48 CFR Parts 2, 16, and 37 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 2--DEFINITIONS OF WORDS AND TERMS

    2. Amend section 2.101 by adding, in alphabetical order, the 
definition ``Advisory and assistance services'' to read as follows:


2.101  Definitions.

* * * * *
    Advisory and assistance services means those services provided 
under contract by nongovernmental sources to support or improve: 
organizational policy development; decision-making; management and 
administration; program and/or project management and administration; 
or R&D activities. It can also mean the furnishing of professional 
advice or assistance rendered to improve the effectiveness of Federal 
management processes or procedures (including those of an engineering 
and technical nature). In rendering the foregoing services, outputs may 
take the form of information, advice, opinions, alternatives, analyses, 
evaluations, recommendations, training and the day-to-day aid of 
support personnel needed for the successful performance of ongoing 
Federal operations. All advisory and assistance services are classified 
in one of the following definitional subdivisions:
    (a) Management and professional support services, i.e., contractual 
services that provide assistance, advice or training for the efficient 
and effective management and operation of organizations, activities 
(including management and support services for R&D activities), or 
systems. These services are normally closely related to the basic 
responsibilities and mission of the agency originating the requirement 
for the acquisition of services by contract. Included are efforts that 
support or contribute to improved organization of program management, 
logistics management, project monitoring and reporting, data 
collection, budgeting, accounting, performance auditing, and 
administrative technical support for conferences and training programs.

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    (b) Studies, analyses and evaluations, i.e., contracted services 
that provide organized, analytical assessments/evaluations in support 
of policy development, decision-making, management, or administration. 
Included are studies in support of R&D activities. Also included are 
acquisitions of models, methodologies, and related software supporting 
studies, analyses or evaluations.
    (c) Engineering and technical services, i.e., contractual services 
used to support the program office during the acquisition cycle by 
providing such services as systems engineering and technical direction 
(see 9.505-1(b)) to ensure the effective operation and maintenance of a 
weapon system or major system as defined in OMB Circular No. A-109 or 
to provide direct support of a weapon system that is essential to 
research, development, production, operation or maintenance of the 
system.
* * * * *

PART 16--TYPES OF CONTRACTS

    3. Revise section 16.500 to read as follows:


16.500  Scope of subpart.

    (a) This subpart prescribes policies and procedures for making 
awards of indefinite-delivery contracts and establishes a preference 
for making multiple awards of indefinite-quantity contracts.
    (b) This subpart does not limit the use of other than competitive 
procedures authorized by part 6.
    (c) Nothing in this subpart restricts the authority of the General 
Services Administration (GSA) to enter into schedule, multiple award, 
or task or delivery order contracts under any other provision of law. 
Therefore, GSA regulations and the coverage for the Federal Supply 
Schedule program in subpart 8.4 and part 38 take precedence over this 
subpart.
    (d) The multiple award preference established by this subpart does 
not apply to architect-engineer contracts subject to the procedures in 
subpart 36.6. However, agencies are not precluded from making multiple 
awards for architect-engineer services using the procedures in this 
subpart, provided the selection of contractors and placement of orders 
are consistent with subpart 36.6.


16.501-1  [Amended]

    4. Amend section 16.501-1 by removing the definition ``Advisory and 
assistance services.''
    5. Revise section 16.504 to read as follows:


16.504  Indefinite-quantity contracts.

    (a) Description. An indefinite-quantity contract provides for an 
indefinite quantity, within stated limits, of supplies or services 
during a fixed period. The Government places orders for individual 
requirements. Quantity limits may be stated as number of units or as 
dollar values.
    (1) The contract must require the Government to order and the 
contractor to furnish at least a stated minimum quantity of supplies or 
services. In addition, if ordered, the contractor must furnish any 
additional quantities, not to exceed the stated maximum. The 
contracting officer should establish a reasonable maximum quantity 
based on market research, trends on recent contracts for similar 
supplies or services, survey of potential users, or any other rational 
basis.
    (2) To ensure that the contract is binding, the minimum quantity 
must be more than a nominal quantity, but it should not exceed the 
amount that the Government is fairly certain to order.
    (3) The contract may also specify maximum or minimum quantities 
that the Government may order under each task or delivery order and the 
maximum that it may order during a specific period of time.
    (4) A solicitation and contract for an indefinite quantity must--
    (i) Specify the period of the contract, including the number of 
options and any period for which the Government may extend the contract 
under each option;
    (ii) Specify the total minimum and maximum quantity of supplies or 
services the Government will acquire under the contract;
    (iii) Include a statement of work, specifications, or other 
description, that reasonably describes the general scope, nature, 
complexity, and purpose of the supplies or services the Government will 
acquire under the contract in a manner that will enable a prospective 
offeror to decide whether to submit an offer;
    (iv) State the procedures that the Government will use in issuing 
orders and, if multiple awards may be made, state the procedures and 
selection criteria that the Government will use to provide awardees a 
fair opportunity to be considered for each order (see 16.505(b)(1));
    (v) Include the name, address, telephone number, facsimile number, 
and e-mail address of the agency task and delivery order ombudsman (see 
16.505(b)(5)) if multiple awards may be made;
    (vi) Include a description of the activities authorized to issue 
orders; and
    (vii) Include authorization for placing oral orders, if 
appropriate, provided that the Government has established procedures 
for obligating funds and that oral orders are confirmed in writing.
    (b) Application. Contracting officers may use an indefinite-
quantity contract when the Government cannot predetermine, above a 
specified minimum, the precise quantities of supplies or services that 
the Government will require during the contract period, and it is 
inadvisable for the Government to commit itself for more than a minimum 
quantity. The contracting officer should use an indefinite-quantity 
contract only when a recurring need is anticipated.
    (c) Multiple award preference--(1) Planning the acquisition. (i) 
Except for indefinite-quantity contracts for advisory and assistance 
services as provided in paragraph (c)(2) of this section, the 
contracting officer must, to the maximum extent practicable, give 
preference to making multiple awards of indefinite-quantity contracts 
under a single solicitation for the same or similar supplies or 
services to two or more sources.
    (ii)(A) The contracting officer must determine whether multiple 
awards are appropriate as part of acquisition planning. The contracting 
officer must avoid situations in which awardees specialize exclusively 
in one or a few areas within the broader statement of work, thus 
creating the likelihood that tasks in those areas will be awarded on a 
sole-source basis; however, each awardee need not be capable of 
performing every requirement as well as any other awardee under the 
contracts. The contracting officer should consider the following when 
determining the number of contracts to be awarded:
    (1) The scope and complexity of the contract requirement.
    (2) The expected duration and frequency of task or delivery orders.
    (3) The mix of resources a contractor must have to perform expected 
task or delivery order requirements.
    (4) The ability to maintain competition among the awardees 
throughout the contracts' period of performance.
    (B) The contracting officer must not use the multiple award 
approach if--
    (1) Only one contractor is capable of providing performance at the 
level of quality required because the supplies or services are unique 
or highly specialized;
    (2) Based on the contracting officer's knowledge of the market, 
more favorable terms and conditions, including pricing, will be 
provided if a single award is made;

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    (3) The expected cost of administration of multiple contracts 
outweighs the expected benefits of making multiple awards;
    (4) The projected task orders are so integrally related that only a 
single contractor can reasonably perform the work;
    (5) The total estimated value of the contract is less than the 
simplified acquisition threshold; or
    (6) Multiple awards would not be in the best interests of the 
Government.
    (C) The contracting officer must document the decision in a written 
acquisition plan or a separate written determination. The contracting 
officer may determine that a class of acquisitions is not appropriate 
for multiple awards (see subpart 1.7).
    (2) Contracts for advisory and assistance services. (i) Except as 
provided in paragraph (c)(2)(ii) of this section, if an indefinite-
quantity contract for advisory and assistance services exceeds 3 years 
and $10 million, including all options, the contracting officer must 
make multiple awards unless--
    (A) The contracting officer or other official designated by the 
head of the agency determines in writing, before the solicitation is 
issued, that multiple awards are not practicable. The contracting 
officer or other official must determine that the scope of work is 
unique or highly specialized or the tasks so integrally related that 
only one contractor can reasonably perform the work;
    (B) The contracting officer or other official designated by the 
head of the agency determines in writing, after the evaluation of 
offers, that only one offeror is capable of providing the services 
required at the level of quality required; or
    (C) Only one offer is received.
    (ii) The requirements of paragraph (c)(2)(i) of this section do not 
apply if the contracting officer or other official designated by the 
head of the agency determines that the advisory and assistance services 
are incidental and not a significant component of the contract.
    6. Revise section 16.505 to read as follows:


16.505  Ordering.

    (a) General. (1) The contracting officer does not synopsize orders 
under indefinite-delivery contracts.
    (2) Individual orders must clearly describe all services to be 
performed or supplies to be delivered. Orders must be within the scope, 
period, and maximum value of the contract.
    (3) Performance-based work statements must be used to the maximum 
extent practicable, if the contract is for services (see 37.102(a)).
    (4) Orders may be placed by using any medium specified in the 
contract.
    (5) Orders placed under indefinite-delivery contracts must contain 
the following information:
    (i) Date of order.
    (ii) Contract number and order number.
    (iii) For supplies and services, contract item number and 
description, quantity, and unit price or estimated cost or fee.
    (iv) Delivery or performance schedule.
    (v) Place of delivery or performance (including consignee).
    (vi) Any packaging, packing, and shipping instructions.
    (vii) Accounting and appropriation data.
    (viii) Method of payment and payment office, if not specified in 
the contract (see 32.1110(e)).
    (6) No protest under subpart 33.1 is authorized in connection with 
the issuance or proposed issuance of an order under a task-order 
contract or delivery-order contract, except for a protest on the 
grounds that the order increases the scope, period, or maximum value of 
the contract (10 U.S.C. 2304c(d) and 41 U.S.C. 303J(d)).
    (b) Orders under multiple award contracts--(1) Fair opportunity. 
(i) The contracting officer must provide each awardee a fair 
opportunity to be considered for each order over $2,500 issued under 
multiple delivery-order contracts or multiple task-order contracts, 
except as provided for in paragraph (b)(2) of this section.
    (ii) The contracting officer may exercise broad discretion in 
developing appropriate procedures. The competition requirements in part 
6 and the policies in subpart 15.3 do not apply to the ordering 
process. However, the contracting officer must--
    (A) Develop procedures that will provide each awardee a fair 
opportunity to be considered for each order and that reflect the 
requirement and other aspects of the contracting environment;
    (B) Not use any method (such as allocation or designation of any 
preferred awardee) that would not result in fair consideration being 
given to all awardees prior to placing each order;
    (C) Tailor the procedures to each acquisition;
    (D) Include the procedures in the solicitation and the contract; 
and
    (E) Consider price or cost under each order as one of the factors 
in the selection decision.
    (iii) The contracting officer should consider the following when 
developing the procedures:
    (A)(1) Past performance on earlier orders under the contract, 
including quality, timeliness and cost control.
    (2) Potential impact on other orders placed with the contractor.
    (3) Minimum order requirements.
    (B) Formal evaluation plans or scoring of quotes or offers are not 
required.
    (C) Keep submission requirements to a minimum. Contracting officers 
may use streamlined procedures, including oral presentations. In 
addition, the contracting officer need not contact each of the multiple 
awardees under the contract before selecting an order awardee if the 
contracting officer has information available to ensure that each 
awardee is provided a fair opportunity to be considered for each order.
    (2) Exceptions to the fair opportunity process. The only exceptions 
to the requirement to provide each awardee a fair opportunity to be 
considered for each order in excess of $2,500 are--
    (i) The agency need for the supplies or services is of such urgency 
that providing such opportunity would result in unacceptable delays;
    (ii) Only one awardee is capable of providing the supplies or 
services required at the level of quality required because the supplies 
or services ordered are unique or highly specialized;
    (iii) The order should be issued on a sole-source basis in the 
interest of economy and efficiency as a logical follow-on to an order 
already issued under the contract, provided that all awardees were 
given a fair opportunity to be considered for the original order; or
    (iv) It is necessary to place an order to satisfy a minimum 
guarantee.
    (3) Pricing orders. If the contract did not establish the price for 
the supply or service, establish prices for each order using the 
policies and methods in subpart 15.4.
    (4) Decision documentation for orders. Document in the contract 
file the rationale for placement and price of each order.
    (5) Task and Delivery Order Ombudsman. The head of the agency must 
designate a task-order contract and delivery-order contract ombudsman. 
The ombudsman must review complaints from contractors and ensure they 
are afforded a fair opportunity to be considered, consistent with the 
procedures in the contract. The ombudsman must be a senior agency 
official who is independent of the contracting officer and may be the 
agency's competition advocate.
    (c) Limitation on ordering period for task-order contracts for 
advisory and assistance services. (1) Except as

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provided for in paragraphs (c)(2) and (3) of this section, the ordering 
period of a task-order contract for advisory and assistance services, 
including all options or modifications, normally may not exceed 5 
years.
    (2) The 5-year limitation does not apply when--
    (i) A longer ordering period is specifically authorized by a 
statute; or
    (ii) The contract is for an acquisition of supplies or services 
that includes the acquisition of advisory and assistance services and 
the contracting officer, or other official designated by the head of 
the agency, determines that the advisory and assistance services are 
incidental and not a significant component of the contract.
    (3) The contracting officer may extend the contract on a sole-
source basis only once for a period not to exceed 6 months if the 
contracting officer, or other official designated by the head of the 
agency, determines that--
    (i) The award of a follow-on contract is delayed by circumstances 
that were not reasonably foreseeable at the time the initial contract 
was entered into; and
    (ii) The extension is necessary to ensure continuity of services, 
pending the award of the follow-on contract.
    7. Amend section 16.506--
    a. In paragraphs (a), (b), (c), (d)(1), and (e) by removing the 
words ``The contracting officer shall insert'' and adding, in their 
place, the word ``Insert'';
    b. In paragraphs (d)(2), (d)(3), and (d)(4) by removing the words 
``the contracting officer shall''; and
    c. By revising paragraphs (d)(5), (f), and (g) to read as follows:


16.506  Solicitation provisions and contract clauses.

* * * * *
    (d) * * *
    (5) If the contract--
    (i) Includes subsistence for Government use and resale in the same 
schedule and similar products may be acquired on a brand-name basis; 
and
    (ii) Involves a partial small business set-aside, use the clause 
with its Alternate IV.
* * * * *
    (f) Insert the provision at 52.216-27, Single or Multiple Awards, 
in solicitations for indefinite-quantity contracts that may result in 
multiple contract awards. Do not use this provision for advisory and 
assistance services contracts that exceed 3 years and $10 million. 
Modify the provision to specify the estimated number of awards.
    (g) Insert the provision at 52.216-28, Multiple Awards for Advisory 
and Assistance Services, in solicitations for task-order contracts for 
advisory and assistance services that exceed 3 years and $10 million 
(including all options), unless a determination has been made under 
16.504(c)(2)(i)(A). Modify the provision to specify the estimated 
number of awards.

PART 37--SERVICE CONTRACTING


37.201  Definitions.

    8. Amend section 37.201 by revising the section heading to read as 
set forth above, and by removing the definition ``Advisory and 
assistance services''.
[FR Doc. 99-32476 Filed 12-14-99; 8:45 am]
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