[Federal Register Volume 65, Number 144 (Wednesday, July 26, 2000)]
[Rules and Regulations]
[Pages 46053-46055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18668]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 5, 7, 10, 15, and 19

[FAC 97-19; FAR Case 1997-306 (97-306); Item I]
RIN 9000-AI55


Federal Acquisition Regulation; Contract Bundling

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 (Councils) have agreed on a final rule 
amending the Federal Acquisition Regulation (FAR) to implement Sections 
411-417 of the Small Business Reauthorization Act of 1997. Sections 
411-417 amend Title 15 of the United States Code to define ``contract 
bundling,'' and to require agencies to avoid unnecessary bundling that 
precludes small business participation in the performance of Federal 
contracts.

DATES: Effective Date: July 26, 2000.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC, 20405, (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 FAC 97-19, FAR case 1997-306.

[[Page 46054]]


SUPPLEMENTARY INFORMATION:

A. Background

    DoD, GSA, and NASA published an interim rule in the Federal 
Register at 64 FR 72441, December 27, 1999. The interim rule is 
converted to a final rule, with changes, and amends FAR Parts 2, 4, 5, 
7, 10, 15, and 19 to implement Sections 411-417 of the Small Business 
Reauthorization Act of 1997, Pub. L. 105-135, and the Small Business 
Administration (SBA) interim rule published in the Federal Register at 
64 FR 57366, October 25, 1999.
    We received comments from six respondents in response to the 
interim rule and considered them in drafting the final rule.
    This is not a significant regulatory action and, therefore, was not 
subject to 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

    The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to 
this final rule. The Councils prepared a Final Regulatory Flexibility 
Analysis (FRFA). The FAR Secretariat has submitted a copy of the FRFA 
to the Chief Counsel for Advocacy of the Small Business Administration. 
The FRFA is summarized as follows:

    This rule amends FAR Parts 2, 4, 5, 7, 10, 15, and 19 to 
implement Sections 411-417 of the Small Business Reauthorization Act 
of 1997, Pub. L. 105-135. Sections 411-417 amend Title 15 of the 
United States Code to define ``contract bundling,'' and to require 
agencies to avoid unnecessary bundling that precludes small business 
participation in the performance of Federal contracts.
    The objective of the rule is to establish agency procedures for 
processing bundled requirements and to ensure maximum small business 
participation in bundled acquisitions. Agencies must--
     Perform market research when bundled requirements are 
anticipated;
     Justify bundling in acquisition strategies;
     Meet specific estimated benefit thresholds before 
bundling requirements;
     Assess the impact of bundling on small businesses;
     Submit solicitations containing bundled requirements to 
the Small Business Administration (SBA) procurement center 
representatives for review; and
     Include, in negotiated competitions for bundled 
requirements, a source selection factor for the offerors' proposed 
use of small businesses as subcontractors and their past performance 
in meeting subcontracting goals.
    These objectives are stated in Sections 411-417 of Pub. L. 105-
135 and in SBA's implementing regulations, published in the Federal 
Register at 64 FR 57366, October 25, 1999. We published an interim 
rule in the Federal Register at 64 FR 72441, December 27, 1999. Six 
respondents provided public comments. There are no practical 
alternatives that will accomplish the objective of this rule (i.e., 
to ensure maximum participation of small businesses in Federal 
contracting as agencies combine requirements in the face of 
downsizing and other cost-saving measures). No viable alternatives 
were proposed during the public comment period.

    Interested parties may obtain a copy of the FRFA from the FAR 
Secretariat.

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, 5, 7, 10, 15, and 19

    Government procurement.

    Dated: July 19, 2000.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

Interim Rule Adopted as Final With Changes

    Accordingly, DoD, GSA, and NASA adopt the interim rule amending 48 
CFR parts 2, 4, 5, 7, 10, 15, and 19 which was published in the Federal 
Register at 64 FR 72441, December 27, 1999, as a final rule with the 
following changes:
    1. The authority citation for 48 CFR parts 2, 5, 7, 10, 15, and 19 
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 revising the definition ``Bundled 
contract'' to read as follows:


2.101  Definitions.

* * * * *
    Bundled contract means a contract where the requirements have been 
consolidated by bundling. (See the definition of bundling.)
* * * * *

PART 5--PUBLICIZING CONTRACT ACTIONS

    3. In section 5.206, revise the introductory text of paragraph (a) 
to read as follows:


5.206  Notices of subcontracting opportunities.

    (a) The following entities may use a CBD notice to seek competition 
for subcontracts, to increase participation by qualified HUBZone small 
business, small, small disadvantaged, and small women-owned business 
concerns, and to meet established subcontracting plan goals:
* * * * *

PART 7--ACQUISITION PLANNING

    4. Amend section 7.107 by revising the section heading and 
paragraphs (b)(2) and (h) to read as follows:


7.107  Additional requirements for acquisitions involving bundling.

* * * * *
    (b) * * *
    (2) Five percent of the estimated contract value (including 
options) or $7.5 million, whichever is greater, if the value exceeds 
$75 million.
* * * * *
    (h) The requirements of this section, except for paragraph (e), do 
not apply if a cost comparison analysis will be performed in accordance 
with OMB Circular A-76.

PART 10--MARKET RESEARCH

    5. In section 10.001, revise paragraph (c) to read as follows:


10.001  Policy.

* * * * *
    (c) If an agency contemplates awarding a bundled contract, the 
agency--
    (1) When performing market research, should consult with the local 
Small Business Administration procurement center representative (PCR) 
or, if a PCR is not assigned to the procuring activity, the SBA Office 
of Government Contracting Area Office serving the area in which the 
procuring activity is located; and
    (2) At least 30 days before release of the solicitation--
    (i) Must notify any affected incumbent small business concerns of 
the Government's intention to bundle the requirement; and
    (ii) Should notify any affected incumbent small business concerns 
of how the concerns may contact the appropriate Small Business 
Administration representative.

PART 15--CONTRACTING BY NEGOTIATION

    6. Amend section 15.305 by revising paragraph (a)(5) to read as 
follows:


15.305  Proposal evaluation.

    (a) * * *
    (5) Small business subcontracting evaluation. Solicitations must be 
structured to give offers from small

[[Page 46055]]

business concerns the highest rating for the evaluation factors in 
15.304(c)(3)(iii) and (c)(5).
* * * * *

PART 19--SMALL BUSINESS PROGRAMS

    7. Amend section 19.101 by adding paragraph (g)(5) to read as 
follows:


19.101  Explanation of terms.

* * * * *
    (g) * * *
    (5) Size determination for teaming arrangements. For size 
determination purposes, apply the size standard tests in (g)(1)(i) and 
(ii) of this section when a teaming arrangement of two or more business 
concerns submits an offer, as appropriate.
* * * * *

    8. Amend section 19.202-1 by revising paragraph (e)(1)(iii) to read 
as follows:


19.202-1  Encouraging small business participation in acquisitions.

* * * * *
    (e) * * *
    (1) * * *
    (iii) The proposed acquisition is for a bundled requirement. (See 
10.001(c)(2)(i) for mandatory 30-day notice requirement to incumbent 
small business concerns.)
* * * * *
[FR Doc. 00-18668 Filed 7-25-00; 8:45 am]
BILLING CODE 6820-EP-P