[Federal Register Volume 67, Number 54 (Wednesday, March 20, 2002)]
[Rules and Regulations]
[Pages 13054-13057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5822]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 3, 14, 15, 28, 35, and 52

[FAC 2001-06; FAR Case 2000-403; Item III]
RIN 9000-AI84


Federal Acquisition Regulation; Definitions for Sealed Bid and 
Negotiated Procurements

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 to amend the 
Federal Acquisition Regulation (FAR) to provide consistent definitions 
for sealed bids and negotiated procurements.

DATES: Effective Date: April 4, 2002.

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 2001-06, FAR case 2000-403.

SUPPLEMENTARY INFORMATION:

A. Background

    The rule clarifies definitions that are used in the FAR for sealed 
bid and negotiated procurements. The rule--
     Moves the definitions of ``bid sample'' and ``descriptive 
literature'' from FAR part 14 to FAR 2.101 because the definitions 
apply to more than one FAR part;
     Amends those definitions and the definition of ``offer'' 
in accordance with plain language guidelines;
     Revises applicable provisions in FAR part 52 to conform 
with the new definitions;
     Adds a new definition for ``solicitation'' at FAR 2.101; 
and
     Provides definitions for ``bid'' and ``bidder'' in FAR 
part 28 because, as used in that part, the terms address sealed bid and 
negotiated acquisitions.
    We also reviewed every instance where the terms ``offeror,'' 
``prospective offeror,'' and ``potential offeror'' are used in the FAR. 
The rule clarifies

[[Page 13055]]

terminology used in FAR 15.201(f), 15.609(e), and 35.007(g). Where we 
mean an entity that is actively seeking a contract, we use the term 
``prospective offeror.'' However, those cites describe processes that 
are set up to ensure competition. Therefore, any interested party is 
able to participate, including parties that the Government has not yet 
identified. Therefore, the rule uses the more general term ``potential 
offeror.''
    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 65 FR 42852, July 11, 2000. Four respondents submitted 
comments on the proposed rule. The Councils considered all comments in 
the development of the final rule. A summary of the substantive 
comments is provided:
     Comment: Under 52.214-20, paragraph (c), change the second 
sentence to read ``The Government will reject the bid when the sample 
fails'' for clarity.
    Response: Accepted.
     Comment: Under FAR 2.101, the definition of an ``offer'' 
does not include a ``quotation.'' The definition of a ``solicitation'' 
includes a ``quotation.'' Both definitions should be consistent.
    Response: Not accepted. The definition of ``offer'' is not all-
inclusive. It does not include ``quotations.'' A quotation is not an 
offer and, consequently, cannot be accepted by the Government to form a 
binding contract. See FAR 13.004.
     Comment: The proposed language under FAR 14.202-5(e) 
should cite FAR 14.202-4(f) in lieu of (g).
    Response: Accepted.
    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 Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not 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, while we have made 
changes for clarity and consistency, we have not substantively changed 
procedures for award and administration of contracts.

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 
Office of Management and Budget approval under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 2, 3, 14, 15, 28, 35, and 52

    Government procurement.

    Dated: March 6, 2002.
Al Matera,
Director, Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA amend 48 CFR Parts 2, 3, 14, 15, 28, 
35, and 52 as set forth below:
    1. The authority citation for 48 CFR Parts 2, 3, 14, 15, 28, 35, 
and 52 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 
definitions ``Bid sample'' and ``Descriptive literature''; revising the 
definition ``Offer''; and by adding the definition ``Solicitation'' to 
read as follows:


2.101  Definitions.

* * * * *
    Bid sample means a product sample required to be submitted by an 
offeror to show characteristics of the offered products that cannot 
adequately be described by specifications, purchase descriptions, or 
the solicitation (e.g., balance, facility of use, or pattern).
* * * * *
    Descriptive literature means information provided by an offeror, 
such as cuts, illustrations, drawings, and brochures, that shows a 
product's characteristics or construction of a product or explains its 
operation. The term includes only that information needed to evaluate 
the acceptability of the product and excludes other information for 
operating or maintaining the product.
* * * * *
    Offer means a response to a solicitation that, if accepted, would 
bind the offeror to perform the resultant contract. Responses to 
invitations for bids (sealed bidding) are offers called ``bids'' or 
``sealed bids''; responses to requests for proposals (negotiation) are 
offers called ``proposals''; however, responses to requests for 
quotations (simplified acquisition) are ``quotations'', not offers. For 
unsolicited proposals, see subpart 15.6.
* * * * *
    Solicitation means any request to submit offers or quotations to 
the Government. Solicitations under sealed bid procedures are called 
``invitations for bids.'' Solicitations under negotiated procedures are 
called ``requests for proposals.'' Solicitations under simplified 
acquisition procedures may require submission of either a quotation or 
an offer.
* * * * *

PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

    3. Amend section 3.302 by revising the definition ``Line item'' to 
read as follows:


3.302  Definitions.

* * * * *
    Line item means an item of supply or service, specified in a 
solicitation, that the offeror must separately price.

PART 14--SEALED BIDDING

    4. Amend section 14.201-6 by--
    a. Revising paragraph (a);
    b. Removing paragraphs (b)(1) and (b)(2) and redesignating 
paragraphs (b)(3) and (b)(4) as (b)(1) and (b)(2);
    c. Revising the introductory text of paragraph (o)(2) and paragraph 
(o)(3); and
    d. Removing from paragraph (p)(3) ``14.202-5(e)(2)'' and adding 
``14.202-5(d)(2)'' in its place. The revised text reads as follows:


14.201-6  Solicitation provisions.

    (a) The provisions prescribed in this subsection apply to 
preparation and submission of bids in general. See other FAR parts for 
provisions and clauses related to specific acquisition requirements.
* * * * *
    (o)(1) * * *
    (2) If it appears that the conditions in 14.202-4(e)(1) will apply 
and the contracting officer anticipates granting waivers and--
* * * * *

    (3) See 14.202-4(e)(2) regarding waiving the requirement for all 
bidders.
* * * * *


14.202-4  [Amended]

    5. Amend section 14.202-4 by removing paragraph (a); redesignating 
paragraphs (b) through (h) as (a) through (g), respectively; and by 
removing the word ``of'' from the heading of newly designated paragraph 
(g).

    6. Revise section 14.202-5 to read as follows:


14.202-5  Descriptive literature.

    (a) Policy. Contracting officers must not require bidders to 
furnish descriptive literature unless it is needed before award to 
determine whether the

[[Page 13056]]

products offered meet the specification and to establish exactly what 
the bidder proposes to furnish.
    (b) Justification. The contracting officer must document in the 
contract file the reasons why product acceptability cannot be 
determined without the submission of descriptive literature, except 
when the contract specifications require submission.
    (c) Requirements of invitation for bids. (1) The invitation must 
clearly state--
    (i) What descriptive literature the bidders must furnish;
    (ii) The purpose for requiring the literature;
    (iii) The extent of its consideration in the evaluation of bids; 
and
    (iv) The rules that will apply if a bidder fails to furnish the 
literature before bid opening or if the literature provided does not 
comply with the requirements of the invitation.
    (2) If bidders must furnish descriptive literature, see 14.201-
6(p).
    (d) Waiver of requirement for descriptive literature. (1) The 
contracting officer may waive the requirement for descriptive 
literature if--
    (i) The bidder states in the bid that the product being offered is 
the same as a product previously or currently being furnished to the 
contracting activity; and
    (ii) The contracting officer determines that the product offered by 
the bidder complies with the specification requirements of the current 
invitation for bids. When the contracting officer waives the 
requirement, see 14.201-6(p)(2).
    (2) When descriptive literature is not necessary and a waiver of 
literature requirements of a specification has been authorized, the 
contracting officer must include a statement in the invitation that, 
despite the requirements of the specifications, descriptive literature 
will not be required.
    (3) If the solicitation provides for a waiver, a bidder may submit 
a bid on the basis of either the descriptive literature furnished with 
the bid or a previously furnished product. If the bid is submitted on 
one basis, the bidder may not have it considered on the other basis 
after bids are opened.
    (e) Unsolicited descriptive literature. If descriptive literature 
is furnished when it is not required by the invitation for bids, the 
procedures set forth in 14.202-4(f) must be followed.


14.404-4  [Amended]

    7. Amend section 14.404-4 in the first sentence by removing 
``14.202-5(a)'' and adding ``2.101'' in its place; and in the last 
sentence by removing ``14.202-5(f)'' and adding ``14.202-5(e)'' in its 
place.

PART 15--CONTRACTING BY NEGOTIATION

    8. Amend section 15.201 by removing the undesignated paragraph at 
the end of the section and revising paragraph (f) to read as follows:


15.201  Exchanges with industry before receipt of proposals.

* * * * *
    (f) General information about agency mission needs and future 
requirements may be disclosed at any time. After release of the 
solicitation, the contracting officer must be the focal point of any 
exchange with potential offerors. When specific information about a 
proposed acquisition that would be necessary for the preparation of 
proposals is disclosed to one or more potential offerors, that 
information must be made available to the public as soon as 
practicable, but no later than the next general release of information, 
in order to avoid creating an unfair competitive advantage. Information 
provided to a potential offeror in response to its request must not be 
disclosed if doing so would reveal the potential offeror's confidential 
business strategy, and is protected under 3.104 or subpart 24.2. When 
conducting a presolicitation or preproposal conference, materials 
distributed at the conference should be made available to all potential 
offerors, upon request.

    9. Amend section 15.609 by revising paragraph (e) to read as 
follows:


15.609  Limited use of data.

* * * * *
    (e) Use the notice in paragraph (d) of this section solely as a 
manner of handling unsolicited proposals that will be compatible with 
this subpart. However, do not use this notice to justify withholding of 
a record, or to improperly deny the public access to a record, where an 
obligation is imposed by the Freedom of Information Act (5 U.S.C. 552). 
An offeror should identify trade secrets, commercial or financial 
information, and privileged or confidential information to the 
Government (see paragraph (a) of this section).
* * * * *

PART 28--BONDS AND INSURANCE

    10. Revise section 28.000 to read as follows:


28.000  Scope of part.

    This part prescribes requirements for obtaining financial 
protection against losses under contracts that result from the use of 
the sealed bid or negotiated methods. It covers bid guarantees, bonds, 
alternative payment protections, security for bonds, and insurance.

    11. Amend section 28.001 by adding, in alphabetical order, the 
definitions ``Bid'' and ``Bidder'' to read as follows:


28.001  Definitions.

* * * * *
    Bid means any response to a solicitation, including a proposal 
under a negotiated acquisition. See the definition of ``offer'' at 
2.101.
* * * * *
    Bidder means any entity that is responding or has responded to a 
solicitation, including an offeror under a negotiated acquisition.
* * * * *

PART 35--RESEARCH AND DEVELOPMENT CONTRACTING

    12. Amend section 35.007 by revising paragraph (g) to read as 
follows:


35.007  Solicitations.

* * * * *
    (g) The contracting officer should ensure that potential offerors 
fully understand the details of the work, especially the Government 
interpretation of the work statement. If the effort is complex, the 
contracting officer should provide potential offerors an opportunity to 
comment on the details of the requirements as contained in the work 
statement, the contract Schedule, and any related specifications. This 
may be done at a preproposal conference (see 15.201).
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.214-1  [Reserved]

    13. Remove and reserve section 52.214-1.


52.214-3  [Amended]

    14. Amend section 52.214-3 in the prescription by removing 
``14.201-6(b)(3)'' and adding ``14.201-6(b)(1)'' in its place.


52.214-4  [Amended]

    15. Amend section 52.214-4 in the prescription by removing 
``14.201-6(b)(4)'' and adding ``14.201-6(b)(2)'' in its place.

    16. Amend section 52.214-20 by revising the introductory paragraph, 
date of the provision, and paragraphs

[[Page 13057]]

(a), (b), and the introductory text of paragraph (c); and by removing 
from Alternates I and II ``14.202-4(f)(1)'' and adding ``14.202-
4(e)(1)'' in its place. The revised text reads as follows:


52.214-20  Bid Samples.

    As prescribed in 14.201-6(o)(1), insert the following provision:

Bid Samples (Apr 2002)

    (a) Bid sample means a product sample required to be submitted 
by a bidder to show those characteristics of the offered products 
that cannot adequately be described by specifications, purchase 
descriptions, or the invitation for bid (e.g., balance, facility of 
use, or pattern).
    (b) Bidders must furnish bid samples as part of the bid. The 
Government must receive the bid samples by the time specified in the 
invitation for bids. If the bidder fails to submit samples on time, 
the Government will reject the bid, except that the Contracting 
Officer will consider a late sample sent by mail under the Late 
Submissions, Modifications, and Withdrawals of Bids provision of 
this solicitation.
    (c) The Government will test or evaluate bid samples to 
determine compliance with all the characteristics listed for 
examination in this solicitation. The Government will reject the bid 
when the sample fails to conform to the required characteristics. 
Products delivered under any resulting contract must conform to--
* * * * *
(End of provision)
* * * * *

    17. Revise section 52.214-21 to read as follows:


52.214-21  Descriptive Literature.

    As prescribed in 14.201-6(p)(1), insert the following provision:

Descriptive Literature (Apr 2002)

    (a) Descriptive literature, as used in this provision, means 
information furnished by a bidder, such as cuts, illustrations, 
drawings, and brochures, that shows a product's characteristics or 
construction or explains its operation. The term includes only that 
information required to evaluate the acceptability of the product 
and excludes other information for operating or maintaining the 
product.
    (b) Descriptive literature is required to establish, for the 
purpose of evaluation and award, details of the product offered that 
are specified elsewhere in the solicitation and pertain to 
significant elements such as--
    (1) Design;
    (2) Materials;
    (3) Components;
    (4) Performance characteristics; and
    (5) Methods of manufacture, assembly, construction, or 
operation.
    (c) Descriptive literature, required elsewhere in this 
solicitation, shall be--
    (1) Identified to show the item(s) of the offer to which it 
applies; and
    (2) Received by the time specified in this solicitation.
    (d) If the bidder fails to submit descriptive literature on 
time, the Government will reject the bid, except that late 
descriptive literature sent by mail may be considered under the Late 
Submissions, Modifications, and Withdrawals of Bids provision of 
this solicitation.
    (e) If the descriptive literature fails to show that the product 
offered conforms to the requirements of the solicitation, the 
Government will reject the bid.

(End of provision)

    Alternate I (Apr 2002). As prescribed in 14.201-6(p)(2), add the 
following paragraphs (f) and (g) to the basic provision:
    (f) The Contracting Officer may waive the requirement for 
furnishing descriptive literature if the offeror has supplied a 
product that is the same as that required by this solicitation under 
a prior contract. A bidder that requests a waiver of this 
requirement shall provide the following information:

Prior contract number--------------------------------------------------
Date of prior contract-------------------------------------------------
Contract line item number of product
 supplied--------------------------------------------------------------
Name and address of Government activity to which delivery was made-----
Date of final delivery product supplied
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    (g) Bidders shall submit bids on the basis of required 
descriptive literature or on the basis of a previously supplied 
product under paragraph (f) of this provision. A bidder submitting a 
bid on one of these two bases may not elect to have its bid 
considered on the alternative basis after the time specified for 
receipt of bids. The Government will disregard a bidder's request 
for a waiver under paragraph (f) if that bidder has submitted the 
descriptive literature requested under this solicitation.

[FR Doc. 02-5822 Filed 3-19-02; 8:45 am]
BILLING CODE 6820-EP-P