[Federal Register Volume 73, Number 132 (Wednesday, July 9, 2008)]
[Proposed Rules]
[Pages 39275-39277]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-15587]



48 CFR Parts 516 and 552

[GSAR Case 2006-G504; Docket 2008-0007; Sequence 7]
RIN 3090-AI58

General Services Acquisition Regulation; GSAR Case 2006-G504; 
Rewrite of GSAR Part 516; Types of Contracts

AGENCY: Office of the Chief Acquisition Officer, General Services 
Administration (GSA).

ACTION: Proposed rule.


SUMMARY: The General Services Administration (GSA) is proposing to 
amend the General Services Acquisition Regulation (GSAR) to revise 
language pertaining to requirements for types of contracts.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat on or before September 8, 2008 to be considered 
in the formulation of a final rule.

ADDRESSES: Submit comments identified by GSAR Case 2006-G504 by any of 
the following methods:
     Regulations.gov: http://www.regulations.gov.Submit 
comments via the Federal eRulemaking portal by inputting ``GSAR Case 
2006-G504'' under the heading ``Comment or Submission.'' Select the 
link ``Send a Comment or Submission '' that corresponds with GSAR Case 
2006-G504. Follow the instructions provided to complete the ``Public 
Comment and Submission Form.'' Please include your name, company name 
(if any), and ``GSAR Case 2006-G504'' on your attached document.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat Division (VPR), 1800 F Street, NW, Room 4041, ATTN: 
Laurieann Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite GSAR Case 2006-
G504 in all correspondence related to this case. All comments received 
will be posted without change to http://www.regulations.gov, including 
any personal and/or business confidential information provided.

[[Page 39276]]

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Ms. Cecelia Davis at (202) 219-0202, or by e-mail at 
[email protected]. For information pertaining to the status or 
publication schedules, contact the Regulatory Secretariat (VPR), Room 
4035, GS Building, Washington, DC 20405, (202) 501-4755. Please cite 
GSAR Case 2006-G504.


A. Background

    The General Services Administration (GSA) is amending the General 
Services Administration Acquisition Regulation (GSAR) to revise the 
prescriptions for clauses included in GSAR 516.203-4, Contract clauses, 
and GSAR 516.506, Solicitation provisions and contract clauses, and to 
make minor changes to GSAR 516.603-3, Limitations. The associated 
clauses located in GSAR 552.216 are amended to relocate the clause at 
552.216-70, Economic Price Adjustment--FSS Multiple Award Schedule 
Contracts, to GSAR 552.238, to retain the clause at 552.216-71, 
Economic Price Adjustment-Stock and Special Order Program Contracts, to 
revise GSAR clause 552.216-72, Placement of Orders, to make minor edits 
to GSAR clause 552.216-73, Ordering Information, and to include new 
GSAR clause 552.216-XX, Task-Order and Delivery-Order Ombudsman.
    This proposed rule is a result of the General Services 
Administration Acquisition Manual (GSAM) Rewrite initiative. The 
initiative was undertaken by GSA to revise the GSAM to maintain 
consistency with the FAR and implement streamlined and innovative 
acquisition procedures that contractors, offerors, and GSA contracting 
personnel can utilize when entering into and administering contractual 
relationships. The GSAM incorporates the General Services 
Administration Acquisition Regulation (GSAR) as well as internal agency 
acquisition policy.
    GSA will rewrite each part of the GSAR and GSAM, and as each GSAR 
part is rewritten, will publish it in the Federal Register.
    This proposed rule revises GSAR 516.203-4, Contract clauses, 
516.506, Solicitation provisions and contract clauses, and associated 
clauses in GSAR 552.516. The information in GSAR 516.203-4(a) is 
relocated to GSAR Part 538 and paragraph (b) is renumbered accordingly 
and contains minor edits. GSAR 516.506 is revised to delete paragraphs 
(b), (c), (d), and (e) from this part and relocate them to GSAR Part 
538. New GSAR clause, 552.216-XX, Task-Order and Delivery-Order 
Ombudsman, is added to describe the GSA Ombudsman's responsibilities. 
GSAR 516.603-3, Limitations, is renumbered as 516.603-70 as a 
supplement to the FAR and the title is changed to ``Limitations'' on 
the use of letter contracts for architect-engineer (A-E) services. GSAR 
clause 552.216-70, Economic Price Adjustment--FSS Multiple Award 
Schedule Contracts, is relocated to GSAR Part 538. The GSAR clause at 
552.216-72, Placement of Orders, is revised to delete Alternates II, 
III, and IV and relocate them to GSAR Part 538, and it contains minor 
edits. The GSAR clause at 552.216-73, Ordering Information, contains 
minor edits.

Discussion of Comments

    There were six public comments received in response to the 
``Advanced Notice of Proposed Rulemaking.'' The first commenter 
suggested that the GSAR should include coverage on Governmentwide 
acquisition contracts (GWAC) and the use of GSA assisted services. The 
GWAC and assisted services are very closely related: GSA's assisted 
services are offered through GWAC contracts. GWACs are negotiated 
acquisitions covered by FAR Part 15 (GSAM 515), while FAR Part 16 (GSAM 
Part 516) covers the authority for GWACs (i.e., IDIQ contracts). Both 
GSAM parts are in the rewrite effort so, to a degree, the comment is 
being addressed. During our rewrite process, our proposed coverage of 
GWACs and assisted services was determined to be satisfactory by the 
cognizant office within FAS. We construe the comment, however, to mean 
that the GSAM should devote a special section to GWACs and assisted 
services, such as is done in GSAM 538 which addresses the Federal 
Supply Schedule Program. The suggestion is not without merit: however, 
it is outside the scope of the current GSAM effort, which did not 
envision the creation of new GSAM parts. The current effort has 
revealed a number of issues that need to be addressed in future updates 
to the GSAM and we propose to revisit that comment when future 
revisions are considered. The second commenter suggested establishing a 
central location for all contract clauses GSA includes in FSS and GWAC 
contracts: in particular, the clauses denoted as ``x-FSS clauses.'' One 
of the purposes of the GSAM rewrite is to put all clauses used by GSA 
in the GSAM. While this goal may not be 100 percent achieved in the 
initial rewrite effort, at some point in time all clauses will be in 
one place--the GSAM.
    The third and fourth commenter submitted a response that said GSA 
schedule holders are penalized because they are subject to the Economic 
Price Adjustment clause limiting price increase to 10 percent after a 
one-year waiting period. GSAR clauses 552.216-70 and 552.216-71 
establish contract coverage for economic price adjustments under 
Multiple Award Schedules (MAS) and Global Supply Item contracts, 
respectively. With respect to the MAS, GSAR clause 552.216-70, this 
comment will be addressed in the coverage for GSAR Part 538. GSAR 
clause 552.216-71 indicates that there is a 10 percent cap on such 
adjustments unless the Contracting Director approves a higher 
percentage. In addition, the percentage actually used should be based 
on historical trends drawn from an index such as the Producer Price 
Index (PPI). In these cases, the GSAR mirrors the FAR's guidance on 
economic price adjustments for standard supplies (non-Schedule) as 
outlined in FAR clause 52.216-2, which also includes the 10 percent 
cap. Accordingly, the GSAR coverage (meant to be used for a subset of 
all supply contracts, specifically FAS Schedules) follows the FAR, and 
the change requested would require a change to the FAR and cannot be 
made independently in the GSAR. Also, the GSAR makes clear that the 
percentage used in Schedule contracts (whether above or below 10 
percent) is to be based on established historical trends (PPI) and not 
on a negotiation between one agency and one contractor on each 
individual contract. This allows the percentage established for each 
contract to be based on objective data. This percentage should normally 
be 10 percent, unless based on a trend established by an appropriate 
index such as the Producer Prices and Price Index during the most 
recent 6-month period indicates that a different percentage is more 
appropriate. The fifth commenter recommended that the GSAR be revised 
to clarify that subcontractor labor hours under a Time and Material 
(T&M) contract are paid at the rates established in the prime contract 
or task order. Although the recommendation references ``Time and 
Material'' contracts, the issue deals with contract financing and 
should be addressed in GSAM Part 532, Contract Financing. The sixth 
commenter recommended that the GSAR be revised to provide that 
contractors may apply G&A to travel costs and other direct changes in 
accordance with each vendor's approved cost accounting standards 
disclosure statement. This issue will be addressed in the rewrite of 
GSAR Part 531.

[[Page 39277]]

    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 under5 U.S.C. 804.

B. Regulatory Flexibility Act

    The General Services Administration does not expect this proposed 
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 revisions are not considered substantive. 
An Initial Regulatory Flexibility Analysis has, therefore, not been 
performed. We invite comments from small businesses and other 
interested parties. GSA will consider comments from small entities 
concerning the affected GSAR Parts 516 and 552 in accordance with 5 
U.S.C. 610. Interested parties must submit such comments separately and 
should cite 5 U.S.C. 601, et seq. (GSAR case 2006-G504), in 

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
changes to the GSAM 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 516 and 552

    Government procurement.

    Dated: July 2, 2008
Al Matera,
Director, Office of Acquisition Policy.

    Therefore, GSA proposes to amend 48 CFR parts 516 and 552 as set 
forth below:
    1. The authority citation for 48 CFR parts 516 and 552 is revised 
to read as follows:

    Authority: 40 U.S.C. 121(c).


    2. Amend section 516.203-4 by--
    a. Removing paragraph (a), and redesignating paragraphs (b) and (c) 
as (a) and (b), respectively;
    b. Revising the newly redesignated paragraph (a);
    c. Removing from the newly redesignated paragraph (b)(1) ``you 
decide'' and adding ``the contracting officer decides'' in its place; 
    d. Removing the period from the end of the newly redesignated 
paragraphs (b)(1)(i) and (b)(1)(ii) and adding a semicolon in its 
place; and removing the period from the newly redesignated paragraph 
(b)(1)(iii) and adding ``; and ''in its place.
    The revised text reads as follows:

516.203-4  Contract clauses.

    (a) Special Order Program Contracts. In multiyear solicitations and 
contracts, after making the determination required by FAR 16.203-3, use 
552.216-71, Economic Price Adjustment-Stock and Special Order Program 
Contracts, or a clause prepared as authorized in paragraph (a)(3) of 
this subsection.
* * * * *
    3. Amend section 516.506 by--
    a. Removing from paragraph (a), ``FSS'' each time it appears and 
adding ``FAS'', in its place; and
    b. Removing paragraphs (b), (c), (d), and (e) and adding new 
paragraph (b), to read as follows:

516.506  Solicitation provisions and contract clauses.

* * * * *
    (b) In solicitations and contracts for GSA awarded IDIQ contracts, 
insert the clause 552.216-XX, Task-Order and Delivery-Order Ombudsman.
    4. Amend section 516.603-3 by--
    a. Revising the section heading;
    b. Revising paragraph (a);
    c. Removing from the introductory text of paragraph (b) ``You'' and 
adding ``The contracting officer'', in its place, and revising 
paragraph (b)(1); and
    d. Removing from paragraph (c) ``you must issue'' and adding ``the 
contracting officer issues,'' in its place.
    The revised text reads as follows:

516.603-70  Limitations on the use of letter contracts for architect-
engineer (A-E) services.

    (a) Requirement for a price proposal. The proposed A-E must provide 
a price proposal for the non-design effort before the award of a letter 
    (b) * * *
    (1) The scope. If the scope includes the design effort, the 
contracting officer should only authorize the A-E to perform those 
services that are independent of the design effort (for example, 
feasibility studies, existing facility surveys or site investigation, 
etc.). Do not authorize the A-E to begin the design effort before the 
letter contract is definitized.
* * * * *


552.216-70  [Removed]

    5. Remove section 552.216-70.

552.216-71  [Amended]

    6. Amend section 552.216-71 by removing from theintroductory text 
of the clause ``516.203-4(b)'' and adding ``516.203-4(a)'' in its 
    7. Amend section 552.216-72 by--
    a. Removing from paragraph (c) ``GSA's Federal Supply Service 
(FSS)'' and adding ``General Services Administration's Federal 
Acquisition Service (FAS)'', in its place; and removing from the second 
sentence ``FSS'' and adding ``FAS'' in its place;
    b. Removing from paragraph (a) of Alternate I ``Federal Supply 
Service (FSS)'' and adding ``Federal Acquisition Service (FAS)'' in its 
    c. Removing from paragraphs (c) and (d) of Alternate I ``FSS'' and 
adding ``FAS'' in its place, respectively; and
    d. Removing Alternates II, III, and IV.

552.216-73  [Amended]

    8. Amend section 552.216-73 in paragraph (a) by removing ``Federal 
Supply Service (FSS)'' and adding ``Federal Acquisition Service (FAS)'' 
in its place.

552.216-XX  [Added]

    9. Add section 552.216-XX to read as follows:

552.216-XX  Task-Order and Delivery-Order Ombudsman.

    As prescribed in 516.506, insert the following clause:
    The GSA Ombudsman will exercise jurisdiction on any matters 
pertaining to ID/IQ contracts awarded by GSA. The ombudsman will 
review complaints from contractors and ensure that they are afforded 
a fair opportunity to be considered for award, consistent with the 
procedures in the contract.
    (End of clause)
[FR Doc. E8-15587 Filed 7-8-08; 8:45 am]