[Federal Register Volume 71, Number 174 (Friday, September 8, 2006)]
[Rules and Regulations]
[Pages 53042-53043]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-14896]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 202, 210, 213, 215, and 219

RIN 0750-AF36


Defense Federal Acquisition Regulation Supplement; Limitations on 
Tiered Evaluation of Offers (DFARS Case 2006-D009)

AGENCY: Defense Acquisition Regulations System, 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 816 of 
the National Defense Authorization Act for Fiscal Year 2006. Section 
816 requires DoD to prescribe guidance on the use of tiered evaluation 
of offers for contracts and for task or delivery orders under 
contracts.

DATES: Effective date: September 8, 2006.
    Comment date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before November 7, 2006, to be 
considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2006-D009, 
using any of the following methods:
    [cir] Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    [cir] E-mail: [email protected]. Include DFARS Case 2006-D009 in the 
subject line of the message.
    [cir] Fax: (703) 602-0350.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. 
Deborah Tronic, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, 
Washington, DC 20301-3062.
    [cir] Hand Delivery/Courier: Defense Acquisition Regulations 
System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 
22202-3402.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Ms. Deborah Tronic, (703) 602-0289.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule adds DFARS policy to implement Section 816 of the 
National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-
163). Section 816 requires DoD to prescribe guidance on the use of 
tiered evaluation of offers for contracts and for task or delivery 
orders under contracts. The guidance must include a prohibition on the 
use of tiered evaluation of offers unless the contracting officer (1) 
has conducted market research in accordance with Part 10 of the Federal 
Acquisition Regulation; (2) is unable, after conducting market 
research, to determine whether or not a sufficient number of qualified 
small businesses are available to justify limiting competition for the 
contract or order; and (3) includes in the contract file a written 
explanation of why the contracting officer was unable to make the 
determination.
    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 does not expect this rule 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 
relates to market research and documentation requirements performed by 
the Government. 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 2006-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.

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

[[Page 53043]]

to publish an interim rule prior to affording the public an opportunity 
to comment. This interim rule implements Section 816 of the National 
Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-163). 
Section 816 requires DoD to prescribe guidance prohibiting the use of 
tiered evaluation of offers unless the contracting officer has complied 
with certain market research and documentation requirements. 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 202, 210, 213, 215, and 219

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

0
Therefore, 48 CFR parts 202, 210, 213, 215, and 219 are amended as 
follows:
0
1. The authority citation for 48 CFR parts 202, 210, 213, 215, and 219 
continues to read as follows:

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

PART 202--DEFINITIONS

0
2. Section 202.101 is amended by adding a definition of ``Tiered 
evaluation of offers'' to read as follows:


202.101  Definitions.

* * * * *
    Tiered evaluation of offers, also known as cascading evaluation of 
offers, means a procedure used in negotiated acquisitions, when market 
research is inconclusive for justifying limiting competition to small 
business concerns, whereby the contracting officer--
    (1) Solicits and receives offers from both small and other than 
small business concerns;
    (2) Establishes a tiered or cascading order of precedence for 
evaluating offers that is specified in the solicitation; and
    (3) If no award can be made at the first tier, evaluates offers at 
the next lower tier, until award can be made.

PART 210--MARKET RESEARCH

0
3. Section 210.001 is revised to read as follows:


210.001  Policy.

    (a) In addition to the requirements of FAR 10.001(a), agencies 
shall--
    (i) Conduct market research appropriate to the circumstances 
before--
    (A) Soliciting offers for acquisitions that could lead to a 
consolidation of contract requirements as defined in 207.170-2; or
    (B) Issuing a solicitation with tiered evaluation of offers 
(Section 816 of Public Law 109-163); and
    (ii) Use the results of market research to determine--
    (A) Whether consolidation of contract requirements is necessary and 
justified in accordance with Sec.  207.170-3; or
    (B) Whether the criteria in FAR part 19 are met for setting aside 
the acquisition for small business or, for a task or delivery order, 
whether there are a sufficient number of qualified small business 
concerns available to justify limiting competition under the terms of 
the contract. If the contracting officer cannot determine whether the 
criteria are met, the contracting officer shall include a written 
explanation in the contract file as to why such a determination could 
not be made (Section 816 of Public Law 109-163).

PART 213--SIMPLIFIED ACQUISITION PROCEDURES

0
4. Section 213.106-1-70 is added to read as follows:


213.106-1-70  Soliciting competition--tiered evaluation of offers.

    (a) The tiered or cascading order of precedence used for tiered 
evaluation of offers shall be consistent with FAR part 19.
    (b) Consideration shall be given to the tiers of small businesses 
(e.g., 8(a), HUBZone small business, service-disabled veteran-owned 
small business, small business) before evaluating offers from other 
than small business concerns.
    (c) Before issuing a solicitation with a tiered evaluation of 
offers--(1) The contracting officer shall conduct market research, in 
accordance with FAR part 10 and part 210, to determine--
    (i) Whether the criteria in FAR part 19 are met for setting aside 
the acquisition for small business; or
    (ii) For a task or delivery order, whether there are a sufficient 
number of qualified small business concerns available to justify 
limiting competition under the terms of the contract; and
    (2) If the contracting officer cannot determine whether the 
criteria in paragraph (c)(1) of this section are met, the contracting 
officer shall include a written explanation in the contract file as to 
why such a determination could not be made (Section 816 of Public Law 
109-163).

PART 215--CONTRACTING BY NEGOTIATION

0
5. Subpart 215.2 is added to read as follows:

Subpart 215.2--Solicitation and Receipt of Proposals and 
Information.


215.203-70  Requests for proposals--tiered evaluation of offers.

    (a) The tiered or cascading order of precedence used for tiered 
evaluation of offers shall be consistent with FAR part 19.
    (b) Consideration shall be given to the tiers of small businesses 
(e.g., 8(a), HUBZone small business, service-disabled veteran-owned 
small business, small business) before evaluating offers from other 
than small business concerns.
    (c) Before issuing a solicitation with a tiered evaluation of 
offers--
    (1) The contracting officer shall conduct market research, in 
accordance with FAR part 10 and part 210, to determine--
    (i) Whether the criteria in FAR part 19 are met for setting aside 
the acquisition for small business; or
    (ii) For a task or delivery order, whether there are a sufficient 
number of qualified small business concerns available to justify 
limiting competition under the terms of the contract; and
    (2) If the contracting officer cannot determine whether the 
criteria in paragraph (c)(1) of this section are met, the contracting 
officer shall include a written explanation in the contract file as to 
why such a determination could not be made (Section 816 of Public Law 
109-163).

PART 219--SMALL BUSINESS PROGRAMS

0
6. Section 219.1102 is amended by adding paragraph (c) to read as 
follows:


219.1102  Applicability.

* * * * *
    (c) Also, do not use the price evaluation adjustment in 
acquisitions that use tiered evaluation of offers, until a tier is 
reached that considers offers from other than small business concerns.

0
7. Subpart 219.13 is added to read as follows:

Subpart 219.13--Historically Underutilized Business Zone (HUBZone) 
Program


219.1307  Price evaluation preference for HUBZone small business 
concerns.

    (a) Also, do not use the price evaluation preference in 
acquisitions that use tiered evaluation of offers, until a tier is 
reached that considers offers from other than small business concerns.

[FR Doc. E6-14896 Filed 9-7-06; 8:45 am]
BILLING CODE 5001-08-P