[Federal Register Volume 67, Number 62 (Monday, April 1, 2002)]
[Proposed Rules]
[Pages 15351-15353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-7785]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

48 CFR Parts 208 and 216

[DFARS Case 2001-D017]


Defense Federal Acquisition Regulation Supplement; Competition 
Requirements for Purchase of Services Under Multiple Award Contracts

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comments and notice of public 
meeting.

-----------------------------------------------------------------------

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement section 803 of the National 
Defense Authorization Act for Fiscal Year 2002. Section 803 requires 
DoD to issue DFARS policy requiring competition in the purchase of 
services under multiple award contracts. In addition to the request for 
written comments on this proposed rule, DoD will hold one or more 
public meetings to hear the views of interested parties.

DATES: Submission of comments: Written comments on the proposed rule 
should be submitted to the address shown below on or before May 6, 
2002, to be considered in the formation of the final rule.
    Public meeting: The first public meeting will be held at the 
address shown below on April 29, 2002, from 12 p.m. to 3 p.m., local 
time.

ADDRESSES: Submission of comments: Respondents are encouraged to submit 
comments directly on the World Wide Web at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an alternative, respondents may e-mail 
comments to: [email protected]. Please cite DFARS Case 2001-D017 in the 
subject line of e-mailed comments.
    Respondents that cannot submit comments using either of the above 
methods may submit comments to: Defense Acquisition Regulations 
Council, Attn: Ms. Susan L. Schneider, OUSD(AT&L)DP(DAR), IMD 3C132, 
3062 Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-
0350. Please cite DFARS Case 2001-D017.
    As a test, public comments will be posted on the World Wide Web as 
they are received. Interested parties may view the public comments at 
http://emissary.acq.osd.mil/dar/dfars.nsf.
    Public meeting: The public meeting will be held in Room C-43, 
Crystal Mall 4, 1941 Jefferson Davis Highway, Arlington, VA 22202.

FOR FURTHER INFORMATION CONTACT: Proposed rule information: Ms. Susan 
Schneider, (703) 602-0326.
    Public meeting information: Ms. Melissa Rider, (703) 695-1098.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule proposes amendments to DFARS Parts 208 and 216 to 
implement section 803 of the National Defense Authorization Act for 
Fiscal Year 2002 (Public Law 107-107). Section 803 requires DoD to 
issue DFARS policy requiring competition in the purchase of services 
under multiple award contracts.
    The Director of Defense Procurement is sponsoring a public meeting 
to discuss the proposed rule and hear the views of interested parties 
on what they believe to be the key issues pertaining to use of Federal 
Supply Schedules, Governmentwide acquisition contracts, multiple agency 
contracts, and multi-agency indefinite-delivery-indefinite-quantity 
contracts for the acquisition of services. Possible issues include (but 
are not limited to): procedures for establishing the basic contractual 
instruments; ordering procedures; ability to maintain a competitive 
environment; and suitability of current Government training on multiple 
award contracts. Subsequent meetings may be held, depending on the 
level of interest shown by the general public at the

[[Page 15352]]

initial meeting. Meeting dates and other pertinent information will be 
published on the Defense Procurement Web site at www.acq.osd.mil/dp.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

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., because the rule 
clarifies and strengthens existing FAR requirements for competition in 
the placement of orders under multiple award contracts, and makes no 
change to the preferences afforded small business concerns under FAR 
8.404(b)(6). Therefore, DoD has not performed an initial regulatory 
flexibility analysis. DoD invites comments from small businesses and 
other interested parties. DoD also will consider comments from small 
entities concerning the affected DFARS subparts in accordance with 5 
U.S.C. 610. Such comments should be submitted separately and should 
cite DFARS Case 2001-D017.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the rule does 
not impose any 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 208 and 216

    Government procurement.

Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.

    Therefore, DoD proposes to amend 48 CFR parts 208 and 216 as 
follows:
    1. The authority citation for 48 CFR parts 208 and 216 continues to 
read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 208--REQUIRED SOURCES OF SUPPLIES AND SERVICES

    2. The heading of Subpart 208.4 is revised to read as follows:

Subpart 208.4--Federal Supply Schedules

    3. Section 208.404 is amended by adding paragraph (b) to read as 
follows:


208.404  Using schedules.

* * * * *
    (b) Ordering procedures for optional use schedules--
    (2) Orders exceeding the micro-purchase threshold but not exceeding 
the maximum order threshold. The procedures at FAR 8.404(b)(2), 
regarding review of catalogs or pricelists of at least three schedule 
contactors, do not apply to orders for services exceeding $100,000. 
Instead, use the procedures at 208.404-70.
    (3) Orders exceeding the maximum order threshold.
    (i) For orders for services exceeding $100,000, use the procedures 
at 208.404-70 in addition to the procedures at FAR 8.404(b)(3)(i).
    (7) Documentation. For orders for services exceeding $100,000, use 
the procedures at 208.404-70 in addition to the procedures at FAR 
8.404(b)(7).
    4. Section 208.404-70 is added to read as follows:


208.404-70  Additional ordering procedures for services.

    (a) This subsection implements Section 803 of the National Defense 
Authorization Act for Fiscal Year 2002 (Public Law 107-107).
    (b) Each order for services exceeding $100,000 must be made on a 
competitive basis in accordance with paragraph (c) of this subsection, 
unless the contracting officer waives this requirement on the basis of 
a written determination that--
    (1) One of the circumstances described at FAR 16.505(b)(2)(i) 
through (iii) applies to the order; or
    (2) A statute expressly authorizes or requires that the purchase be 
made from a specified source.
    (c) An order for services exceeding $100,000 is made on a 
competitive basis only if--
    (1) The contracting officer--
    (i) Provides a fair notice of the intent to make the purchase, 
including a description of the work the contractor must perform and the 
basis upon which the contracting officer will make the selection, to 
all contractors offering such services under the multiple award 
schedule; and
    (ii) Affords all contractors responding to the notice a fair 
opportunity to submit an offer and have that offer fairly considered; 
or
    (2) The contracting officer provides the notice described in 
paragraph (c)(1)(i) of this subsection to as many contractors as 
practicable and--
    (i) Receives offers from at least three qualified contractors; or
    (ii) Determines in writing that no additional qualified contractors 
could be identified despite reasonable efforts to do so.
    (d) Single and multiple blanket purchase agreements (BPAs) may be 
established against Federal Supply Schedules if the contracting 
officer--
    (1) Follows the procedures in paragraphs (b) and (c) of this 
subsection; and
    (2)(i) For a single BPA, defines the tasks and establishes a firm-
fixed price for individual tasks or services identified in the 
statement of work; or
    (ii) For multiple BPAs, forwards the statement of work and the 
selection criteria to all BPA awardees before placing orders against 
the BPAs. (See FAR 8.404(a) and (b)(4), and paragraph (b) of GSA's 
ordering procedures for services at http://www.gsa.gov/Portal/content/offerings _content.jsp? contentOID=116992& contentType=1004.)

PART 216--TYPES OF CONTRACTS

    5. Section 216.501-1 is added to read as follows:


216.501-1  Definition.

    Multiple award contract, as used in this subpart, means--
    (1) A multiple award task order contract entered into in accordance 
with FAR 16.504(c); or
    (2) Any other indefinite delivery, indefinite quantity contract 
that an agency enters into with two or more sources under the same 
solicitation.
    6. Section 216.505-70 is added to read as follows:


216.505-70  Orders for services under multiple award contracts.

    (a) This subsection--
    (1) Implements Section 803 of the National Defense Authorization 
Act for Fiscal Year 2002 (Public Law 107-107); and
    (2) Applies to orders for services exceeding $100,000 placed under 
multiple award contracts, instead of the procedures at FAR 16.505(b)(1) 
(see Subpart 208.4 for procedures applicable to orders placed against 
Federal Supply Schedules).
    (b) Each order for services exceeding $100,000 must be made on a 
competitive basis in accordance with paragraph (c) of this subsection, 
unless the contracting officer waives this requirement on the basis of 
a written determination that--
    (1) One of the circumstances described at FAR 16.505(b)(2)(i) 
through (iv) applies to the order; or
    (2) A statute expressly authorizes or requires that the purchase be 
made from a specified source.
    (c) An order for services exceeding $100,000 is made on a 
competitive basis only if the contracting officer--

[[Page 15353]]

    (1) Provides a fair notice of the intent to make the purchase, 
including a description of the work the contractor must perform and the 
basis upon which the contracting officer will make the selection, to 
all contractors offering such services under the multiple award 
contract; and
    (2) Affords all contractors responding to the notice a fair 
opportunity to submit an offer and have that offer fairly considered.
    (d) When using the procedures in this subsection--
    (1) The contracting officer should keep submission requirements to 
a minimum;
    (2) The contracting officer may use streamlined procedures, 
including oral presentations; and
    (3) The competition requirements in FAR part 6 and the policies in 
FAR Subpart 15.3 do not apply to the ordering process, but the 
contracting officer must--
    (i) Develop placement 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;
    (ii) 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;
    (iii) Tailor the procedures to each acquisition;
    (iv) Include the procedures in the solicitation and the contract; 
and
    (v) Consider price or cost under each order as one of the factors 
in the selection decision.
    (e) The contracting officer should consider the following when 
developing the procedures required by paragraph (d)(3) of this 
subsection:
    (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.
[FR Doc. 02-7785 Filed 3-29-02; 8:45 am]
BILLING CODE 5001-08-P