[Federal Register Volume 68, Number 99 (Thursday, May 22, 2003)]
[Rules and Regulations]
[Pages 28095-28096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-12306]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 8 and 42

[FAC 2001-14; FAR Case 2001-035; Item VI]
RIN 9000-AJ45


Federal Acquisition Regulation; Past Performance Evaluation of 
Federal Prison Industries Contracts

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 require evaluation 
of Federal Prison Industries (FPI) contract performance.

DATES: Effective Date: June 23, 2003.

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 Ms. Laura Smith, Procurement Analyst, at (202) 208-
7279. Please cite FAC 2001-14, FAR case 2001-035.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule amends FAR Subparts 8.6 and 42.15 to require 
agencies to evaluate Federal Prison Industries (FPI) contract 
performance. This change will permit Federal customers to rate FPI 
performance, compare FPI to private sector providers, and give FPI 
important feedback on previously awarded contracts. It is expected that 
this change will give FPI the same opportunity that we give private 
sector providers to improve their customer satisfaction, in general, 
and their performance on delivery, price, and quality, specifically. 
While the change does not negate the requirements of FAR 8.602 or 
8.605, it will allow the information to be used to support a clearance 
request per FAR 8.605.
    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 67 FR 55680, August 29, 2002. Ten respondents submitted 
public comments. The Councils considered the

[[Page 28096]]

public comments before agreeing to convert the proposed rule to a final 
rule with minor changes. A summary of the comments is provided below:
    Comment: To avoid potential misinterpretation, the rule should more 
clearly call attention to the mandatory source requirement for purchase 
of FPI products and more clearly point out that a negative past 
performance evaluation may be used as a basis for a waiver request.
    Response: We agree. The intent of the rule is to ensure contracting 
officers understand that the waiver process is still in effect and that 
performance evaluations may be used to support future award decisions. 
Therefore, the final rule amends FAR 8.607 and 42.1503(b) to more 
clearly articulate that the waiver requirement, referred to at FAR 
8.605 as a clearance, still applies and that a negative performance 
evaluation can be used to support clearance requests.
    Comment: There is no basis for an assessment of FPI's past 
performance. FPI's past performance is irrelevant to whether an agency 
is required to obtain goods from FPI because of its mandatory source 
status. Therefore, the collection of data is a patent waste of 
Government resources since it cannot be used for source selection 
purposes.
    Response: We believe that there is benefit to assessing FPI's 
performance. The May 2000 Office of Federal Procurement Policy (OFPP) 
guide ``Best Practices for Collecting and Using Current and Past 
Performance Information'' states that the active dialog that results 
from assessing a contractor's current performance results in better 
performance on the instant contract, and that such assessments are a 
basic best practice for good contract administration. As previously 
stated, this information can also be used to support FPI clearance 
requests.
    Comment: What is the relationship between this rule and Section 811 
of the National Defense Authorization Act of FY 2002? Section 811 does 
not apply to agencies outside of DoD.
    Response: This rule has no relationship to Section 811 of the FY 
2002 National Defense Authorization Act. The genesis of this case was a 
memorandum from FPI requesting past performance evaluations on their 
contracts.
    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 extending the 
collection of past performance data to include FPI contracts can be 
accomplished within our normal means of performing business and further 
serves to promote competition among offerors.

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 42

    Government procurement.

    Dated: May 13, 2003.
Laura G. Smith,
Director, Acquisition Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 8 and 42 as set forth 
below:
0
1. The authority citation for 48 CFR parts 8 and 42 is revised to read 
as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES

0
2. Add section 8.607 to read as follows:


8.607  Evaluating FPI performance.

    Agencies shall evaluate FPI contract performance in accordance with 
subpart 42.15. Performance evaluations do not negate the requirements 
of 8.602 and 8.605, but they may be used to support a clearance request 
in accordance with 8.605.

PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES


42.1502  [Amended]

0
3. Amend section 42.1502 in the first sentence of paragraph (b) by 
removing ``subparts 8.6 and'' and adding ``subpart'' in its place.

0
4. Amend section 42.1503 in paragraph (b) by adding a new seventh 
sentence to read as follows:


42.1503  Procedures.

* * * * *
    (b) * * * Evaluation of Federal Prison Industries (FPI) performance 
may be used to support a clearance request (see 8.605) when FPI is a 
mandatory source in accordance with subpart 8.6. * * *
* * * * *
[FR Doc. 03-12306 Filed 5-21-03; 8:45 am]
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