[Federal Register Volume 71, Number 54 (Tuesday, March 21, 2006)]
[Rules and Regulations]
[Pages 14106-14108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2640]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

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: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.

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SUMMARY: DoD has issued a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to update and clarify

[[Page 14107]]

requirements for competition in the placement of orders under Federal 
Supply Schedules and multiple award contracts.

DATES: Effective Date: March 21, 2006.

FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, Defense Acquisition 
Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0326; 
facsimile (703) 602-0350. Please cite DFARS Case 2004-D009.

SUPPLEMENTARY INFORMATION:

A. Background

    This final 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 final rule--
     Revises approval requirements for placement of 
noncompetitive orders exceeding $100,000 under Federal Supply Schedules 
for consistency with those at FAR 8.405-6, and extends those 
requirements to orders under multiple award contracts;
     Applies the same ordering procedures to both supplies and 
services; and
     Makes additional changes to DFARS Subpart 208.4 for 
consistency with the policy in FAR Subpart 8.4.
    DoD published a proposed rule at 70 FR 32280 on June 2, 2005. Four 
sources submitted comments on the proposed rule. A discussion of the 
comments is provided below.
    1. Comment: Recommend relocating the last sentence of 208.405-
70(c)(2), which references the General Services Administration's 
electronic quote system ``e-Buy'', to DoD's Procedures, Guidance, and 
Information (PGI) resource, to be consistent with DFARS Transformation.
    DoD Response: DoD agrees and has relocated the referenced text to 
PGI, at http://www.acq.osd.mil/dpap/dars/pgi.
    2. Comment: Recommend removing the requirement to obtain three 
proposals when ordering supplies under GSA's Federal Supply Schedule 
program, because the requirement is unduly burdensome and 
administratively wasteful.
    DoD Response: Do not agree. DoD has adopted this policy to place 
the appropriate emphasis on competition and to ensure that DoD can 
continue to use Federal Supply Schedules to meet future requirements.
    3. Comment: The requirement at FAR 8.405-6 for the senior 
procurement executive to approve proposed orders exceeding $50,000,000 
for DoD, NASA, and the Coast Guard is different from the policy at FAR 
6.304(a)(4) for non-schedule buys, which only requires senior 
procurement executive approval for orders exceeding $75,000,000.
    DoD Response: Federal Acquisition Circular 2005-05 dated July 27, 
2005 (70 FR 43576), amended the FAR to make the thresholds at 8.405-6 
consistent with those at 6.304(a)(4).
    4. Comment: Recommend clarifying the justification approval level 
for waivers of competition when establishing blanket purchase 
agreements (BPAs), because BPAs may have no estimated value, and the 
existing requirements are based on estimated dollar value.
    DoD Response: An estimated value should be established for a BPA as 
part of acquisition planning, and the approval level for the BPA should 
be based on that estimated value.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD certifies 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 the rule strengthens and clarifies existing requirements for 
competition in the placement of orders under Federal Supply Schedules 
and multiple award contracts.

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.

0
Therefore, 48 CFR parts 208 and 216 are amended as follows:
0
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


208.404  [Amended]

0
2. Section 208.404 is amended by removing paragraphs (b) and (S-70).


208.404-1 through 208.405-2  [Removed]

0
3. Sections 208.404-1, 208.404-2, 208.404-70, 208.405, and 208.405-2 
are removed.

0
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 (Pub. L. 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

[[Page 14108]]

    (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.
    (d) See PGI 208.405-70 for additional information regarding fair 
notice to contractors and requirements relating to the establishment of 
blanket purchase agreements under Federal Supply Schedules.


Sec.  208.406  Ordering activity responsibilities.


Sec.  208.406-1  Order placement.

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

PART 216--TYPES OF CONTRACTS

0
5. Section 216.505-70 is revised to read as follows:


Sec.  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 (Pub. L. 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 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. 06-2640 Filed 3-20-06; 8:45 am]
BILLING CODE 5001-08-P