[Federal Register Volume 69, Number 180 (Friday, September 17, 2004)]
[Rules and Regulations]
[Pages 55986-55987]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21017]


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DEPARTMENT OF DEFENSE

48 CFR Parts 207 and 219

[DFARS Case 2003-D109]


Defense Federal Acquisition Regulation Supplement; Consolidation 
of Contract Requirements

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: DoD has issued an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement Section 801 of 
the National Defense Authorization Act for Fiscal Year 2004. Section 
801 places restrictions on the consolidation of two or more 
requirements of a DoD department, agency, or activity into a single 
solicitation and contract.

DATES: Effective date: September 17, 2004.
    Comment date: Comments on the interim rule should be submitted to 
the address shown below on or before November 16, 2004, to be 
considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2003-D109, 
using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Defense Acquisition Regulations Web site: http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. Follow the instructions for 
submitting comments.
     E-mail: [email protected]. Include DFARS Case 2003-D109 in the 
subject line of the message.
     Fax: Primary: (703) 602-7887; Alternate: (703) 602-0350.
     Mail: Defense Acquisition Regulations Council, Attn: Ms. 
Donna Hairston-Benford, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062.
     Hand Delivery/Courier: Defense Acquisition Regulations 
Council, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 
22202-3402.
    All comments received will be posted to http://emissary.acq.osd.mil/dar/dfars.nsf.

FOR FURTHER INFORMATION CONTACT: Ms. Donna Hairston-Benford, (703) 602-
0289.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule amends DFARS Parts 207 and 219 to implement 
Section 801 of the National Defense Authorization Act for Fiscal Year 
2004 (Public Law 108-136). Section 801 adds 10 U.S.C. 2382, which 
places restrictions on the use of an acquisition strategy that includes 
a consolidation of contract requirements with a total value exceeding 
$5,000,000.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    This rule is expected to have a beneficial impact on small business 
concerns. An initial regulatory flexibility analysis has been prepared

[[Page 55987]]

consistent with 5 U.S.C. 603. The analysis is summarized as follows:
    This interim rule amends the DFARS to implement Section 801 of the 
National Defense Authorization Act for Fiscal Year 2004. Section 801 
adds 10 U.S.C. 2382, which places restrictions on the consolidation of 
two or more requirements of a DoD department, agency, or activity into 
a single solicitation and contract, when the total value of the 
requirements exceeds $5,000,000. The objective of the rule is to ensure 
that decisions regarding consolidation of contract requirements are 
made with a view toward providing small business concerns with 
appropriate opportunities to participate in DoD procurements as prime 
contractors and subcontractors. The rule does not duplicate, overlap, 
or conflict with any other Federal rules. DoD considers the 
restrictions on consolidation of contract requirements to be separate 
and distinct from the restrictions on contract bundling specified in 
the Federal Acquisition Regulation. There are no significant 
alternatives that would accomplish the objectives of 10 U.S.C. 2382. 
The impact on small entities is expected to be positive.
    A copy of the analysis may be obtained from the point of contact 
specified herein. 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 
2003-D109.

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.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense that urgent and compelling reasons exist to publish an 
interim rule prior to affording the public an opportunity to comment. 
This interim rule implements Section 801 of the National Defense 
Authorization Act for Fiscal Year 2004 (Public Law 108-136). Section 
801 provides that a DoD department, agency, or activity may not execute 
an acquisition strategy that includes a consolidation of contract 
requirements with a total value exceeding $5,000,000, unless the senior 
procurement executive concerned conducts market research, identifies 
any alternative contracting approaches that would involve a lesser 
degree of consolidation, and determines that the consolidation is 
necessary and justified. Comments received in response to this interim 
rule will be considered in the formation of the final rule.

List of Subjects in 48 CFR Parts 207 and 219

    Government procurement.

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


0
Therefore, 48 CFR parts 207 and 219 are amended as follows:

0
1. The authority citation for 48 CFR parts 207 and 219 continues to 
read as follows:

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

PART 207--ACQUISITION PLANNING

0
2. Sections 207.170 through 207.170-3 are added to read as follows:


207.170  Consolidation of contract requirements.


207.170-1  Scope.

    This section implements 10 U.S.C. 2382.


207.170-2  Definitions.

    As used in this section--
    Consolidation of contract requirements means the use of a 
solicitation to obtain offers for a single contract or a multiple award 
contract to satisfy two or more requirements of a department, agency, 
or activity for supplies or services that previously have been provided 
to, or performed for, that department, agency, or activity under two or 
more separate contracts lower in cost than the total cost of the 
contract for which the offers are solicited.
    Multiple award contract means--
    (1) A multiple award schedule issued by the General Services 
Administration as described in FAR Subpart 8.4;
    (2) A multiple award task order or delivery order contract issued 
in accordance with FAR Subpart 16.5; or
    (3) Any other indefinite-delivery, indefinite-quantity contract 
that an agency enters into with two or more sources for the same line 
item under the same solicitation.


207.170-3  Policy and procedures.

    (a) Agencies shall not consolidate contract requirements with a 
total value exceeding $5,000,000 unless the acquisition strategy 
includes--
    (1) The results of market research;
    (2) Identification of any alternative contracting approaches that 
would involve a lesser degree of consolidation; and
    (3) A determination by the senior procurement executive that the 
consolidation is necessary and justified.
    (i) Market research may indicate that consolidation of contract 
requirements is necessary and justified if the benefits of the 
acquisition strategy substantially exceed the benefits of each of the 
possible alternative contracting approaches. Benefits include costs 
and, regardless of whether quantifiable in dollar amounts--
    (A) Quality;
    (B) Acquisition cycle;
    (C) Terms and conditions; and
    (D) Any other benefit.
    (ii) Savings in administrative or personnel costs alone do not 
constitute a sufficient justification for a consolidation of contract 
requirements unless the total amount of the cost savings is expected to 
be substantial in relation to the total cost of the procurement.
    (b) Include the determination made in accordance with paragraph 
(a)(3) of this section in the contract file.

PART 219--SMALL BUSINESS PROGRAMS

0
3. Section 219.201 is amended by adding paragraph (d)(11) to read as 
follows:


219.201  General policy.

* * * * *
    (d) * * *
    (11) Also conduct annual reviews to assess--
    (A) The extent of consolidation of contract requirements that has 
occurred (see 207.170); and
    (B) The impact of those consolidations on the availability of small 
business concerns to participate in procurements as both contractors 
and subcontractors.
* * * * *
[FR Doc. 04-21017 Filed 9-16-04; 8:45 am]
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