[Federal Register Volume 70, Number 105 (Thursday, June 2, 2005)]
[Proposed Rules]
[Pages 32280-32282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10911]


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DEPARTMENT OF DEFENSE

48 CFR Parts 208 and 216

[DFARS Case 2004-D009]


Defense Federal Acquisition Regulation Supplement; Competition 
Requirements for Federal Supply Schedules and Multiple Award Contracts

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comments.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to update and clarify requirements for 
competition in the placement of orders under Federal Supply Schedules 
and multiple award contracts.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before August 1, 2005, to be considered 
in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2004-D009, 
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 2004-D009 in the 
subject line of the message.
     Fax: (703) 602-0350.
     Mail: Defense Acquisition Regulations Council, Attn: Ms. 
Robin Schulze, 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. Robin Schulze, (703) 602-0326.

SUPPLEMENTARY INFORMATION: 

A. Background

    This proposed rule revises procedures for use of Federal Supply 
Schedules and multiple award contracts to promote competition in the 
placement of orders for supplies or services. The proposed changes--
     Revise approval requirements for placement of 
noncompetitive orders exceeding $100,000 under Federal Supply Schedules 
for consistency with those at FAR 8.405-6, and extend those 
requirements to orders under multiple award contracts;
     Apply the same ordering procedures to both supplies and 
services; and
     Make additional changes to DFARS Subpart 208.4 for 
consistency with the changes to FAR Subpart 8.4 published in Item V of 
Federal Acquisition Circular 2001-24 On June 18, 2004 (69 FR 34231).
    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 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 
proposed changes strengthen and clarify existing requirements for 
competition in the placement of orders under Federal Supply Schedules 
and multiple award contracts. Therefore, DoD has not performed an 
initial regulatory

[[Page 32281]]

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 2004-D009.

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,
Editor, Defense Acquisition Regulations System.
    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. Section 208.404 is amended by removing paragraphs (b) and (S-
70), and by revising the section heading to read as follows:


208.404  Use of Federal Supply Schedules.

* * * * *


208.404-1 through 208.405-2  [Removed]

    3. Sections 208.404-1 through 208.405-2 are removed.
    4. Sections 208.405-70, 208.406 and 208.406-1 are added to read as 
follows:


208.405-70  Additional ordering procedures.

    (a) This subsection--
    (1) Implements Section 803 of the National Defense Authorization 
Act for Fiscal Year 2002 (Public Law 107-107) for the acquisition of 
services, and establishes similar policy for the acquisition of 
supplies;
    (2) Applies to orders for supplies or services under Federal Supply 
Schedules, including orders under blanket purchase agreements 
established under Federal Supply Schedules; and
    (3) Also applies to orders placed by non-DoD agencies on behalf of 
DoD.
    (b) Each order exceeding $100,000 shall be placed on a competitive 
basis in accordance with paragraph (c) of this subsection, unless this 
requirement is waived on the basis of a justification that is prepared 
and approved in accordance with FAR 8.405-6 and includes a written 
determination that--
    (1) A statute expressly authorizes or requires that the purchase be 
made from a specified source; or
    (2) One of the circumstances described at FAR 16.505(b)(2)(i) 
through (iii) applies to the order. Follow the procedures at PGI 
216.505-70 if FAR 16.505(b)(2)(ii) or (iii) is deemed to apply.
    (c) An order exceeding $100,000 is placed on a competitive basis 
only if the contracting officer provides a fair notice of the intent to 
make the purchase, including a description of the supplies to be 
delivered or the services to be performed and the basis upon which the 
contracting officer will make the selection, to--
    (1) As many schedule contractors as practicable, consistent with 
market research appropriate to the circumstances, to reasonably ensure 
that offers will be received from at least three contractors that can 
fulfill the requirements, and the contracting officer--
    (i)(A) Receives offers from at least three contractors that can 
fulfill the requirements; or
    (B) Determines in writing that no additional contractors that can 
fulfill the requirements could be identified despite reasonable efforts 
to do so (documentation should clearly explain efforts made to obtain 
offers from at least three contractors); and
    (ii) Ensures all offers received are fairly considered; or
    (2) All contractors offering the required supplies or services 
under the applicable multiple award schedule, and affords all 
contractors responding to the notice a fair opportunity to submit an 
offer and have that offer fairly considered. Posting of a request for 
quotations on the General Services Administration's electronic quote 
system, ``e-Buy'' (http://www.gsaAdvantage.gov), is one medium for 
providing fair notice to all contractors as required by this paragraph 
(c).
    (d) See PGI 208.405-70 for requirements relating to the 
establishment of blanket purchase agreements under Federal Supply 
Schedules.


208.406  Ordering activity responsibilities.


208.406-1  Order placement.

    Follow the procedures at PGI 208.406-1 when ordering from 
schedules.

PART 216--TYPES OF CONTRACTS

    5. Section 216.505-70 is revised to read as follows:


216.505-70  Orders 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) for the acquisition of 
services, and establishes similar policy for the acquisition of 
supplies;
    (2) Applies to orders for supplies or services exceeding $100,000 
placed under multiple award contracts;
    (3) Also applies to orders placed by non-DoD agencies on behalf of 
DoD; and
    (4) Does not apply to orders for architect-engineer services, which 
shall be placed in accordance with the procedures in FAR Subpart 36.6.
    (b) Each order exceeding $100,000 shall be placed on a competitive 
basis in accordance with paragraph (c) of this subsection, unless this 
requirement is waived on the basis of a justification that is prepared 
and approved in accordance with FAR 8.405-6 and includes a written 
determination that--
    (1) A statute expressly authorizes or requires that the purchase be 
made from a specified source; or
    (2) One of the circumstances described at FAR 16.505(b)(2)(i) 
through (iv) applies to the order. Follow the procedures at PGI 
216.505-70 if FAR 16.505(b)(2)(ii) or (iii) is deemed to apply.
    (c) An order exceeding $100,000 is placed on a competitive basis 
only if the contracting officer--
    (1) Provides a fair notice of the intent to make the purchase, 
including a description of the supplies to be delivered or the services 
to be performed and the basis upon which the contracting officer will 
make the selection, to all contractors offering the required supplies 
or 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 contractor submission 
requirements to a minimum;
    (2) The contracting officer may use streamlined procedures, 
including oral presentations;
    (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 shall consider price or cost under

[[Page 32282]]

each order as one of the factors in the selection decision; and
    (4) The contracting officer should consider past performance on 
earlier orders under the contract, including quality, timeliness, and 
cost control.

[FR Doc. 05-10911 Filed 6-1-05; 8:45 am]
BILLING CODE 5001-08-P