[Federal Register Volume 73, Number 198 (Friday, October 10, 2008)]
[Proposed Rules]
[Pages 60224-60227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22795]



48 CFR Parts 514, 552, and 553

[GSAR Case 2008-G505; Docket 2008-0007; Sequence 20]
RIN 3090-AI73

General Services Acquisition Regulation; GSAR Case 2008-G505; 
Rewrite of GSAR Part 514, Sealed Bidding

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

ACTION: Proposed rule.


SUMMARY: The GSA is proposing to amend the General Services Acquisition 
Regulation (GSAR) to revise the GSAR language regarding requirements 
for sealed bidding.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat on or before December 9, 2008 to be considered 
in the formulation of a final rule.

ADDRESSES: Submit comments identified by GSAR Case 2008-G505 by any of 
the following methods:
     Regulations.gov: http://www.regulations.gov.
    Submit comments via the Federal eRulemaking portal by inputting 
``GSAR Case 2008-G505'' under the heading ``Comment or Submission''. 
Select the link ``Send a Comment or Submission'' that corresponds with 
GSAR Case 2008-G505. Follow the instructions provided to complete the 
``Public Comment and Submission Form''. Please include your name, 
company name (if any), and ``GSAR Case 2008-G505'' on your attached 
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VPR), 1800 F Street, NW, Room 4041, ATTN: Laurieann 
Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite GSAR Case 2008-
G505 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.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Mr. Michael O. Jackson at (202) 208-4949, or by e-mail at 
[email protected]. For information pertaining to the status or 
publication schedules, contact the Regulatory Secretariat (VPR), Room 
4041, GS Building, Washington, DC 20405, (202) 501-4755. Please cite 
GSAR Case 2008-G505.


A. Background

    The GSA is amending the GSAR to revise sections of GSAR Part 514 
that provide requirements for sealed bidding. This amendment is a 
result of the GSA Acquisition Manual (GSAM) rewrite initiative 
undertaken by GSA to revise the GSAM to maintain consistency with the 
Federal Acquisition Regulation (FAR) and to 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 GSAR as well as 
internal agency acquisition policy.
    The 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 rule covers the rewrite of GSAR Part 514. The specific changes 
are as follows:
     501.106 OMB Approval under the Paperwork Reduction Act.
    [endex] Added Control Number 3090-0163 as a cross reference for 
     514.201-2 Part I--The Schedule.
    [endex] Changed (a) from ``When you'' to ``When using. '' Also in 
(a) changed ``which'' to ``that'' and added the FAR clause number for 
Prompt Payment.
    [endex] Changed (b) from ``When you use'' to ``When using'' to 
clarify the reference to ``you'' and added a reference to the Standard 
Form 1449 as an example that this form can also be used.
     514.201-6 Solicitation provisions.
    [endex] Changed ``When you'' to ``When considering'' to delete the 
reference to the word `you'.
    [endex] Deleted the reference for Alternate I because it is not 
consistent with the intention of the basic clause.
     514.201-7 Contract clauses.
    [endex] In the old paragraph (a) changed ``you'' to ``The 
contracting officer''.
    [endex] Deleted paragraph (b), Examination of Records. The clause 
does not provide basic audit rights that are in addition to the FAR 
clauses at 52.215-2, Audit and Records-Negotiation and 52.214-26, Audit 
and Records -- Sealed Bidding. And as opposed to the GSA clause, the 
FAR clause is specific to sealed bids. Further, the GSA clause grants 
to the agency rights to audit subcontractors that are in excess of 
those granted by the FAR and the statute.
     514.202-4 Bid samples.
    [endex] Renamed subparagraphs (a) and (b) to be more consistent 
with the FAR. Also in (a) and (b) restructured the language to remove 
the word ``you'' and replaced with contracting officer.
    [endex] Clarified the language to state who must take physical 
custody of bid samples.
    [endex] Deleted paragraph (c) because it is redundant with FAR 
    [endex] Added a new 514.202-5, Descriptive Literature, in order to 
address the requirements of FAR 14.202-5(c).
     514.203 Methods of soliciting bids.
    [endex] Removed because we are not using paper copies and to be 
consistent with the FAR.
     514.203-1 Transmittal to prospective bidders.
    [endex] Removed because we are not using paper copies and to be 
consistent with the FAR.
     514.270-2 Justification for use.
    [endex] Inserted ``the contracting officer should'' in paragraph b 
and made last sentence of (3) a new number (4) and

[[Page 60225]]

renumbered old paragraphs (4) and (5) to (5) and (6), respectively.
    [endex] Added ``the contracting officer should'' to replace the 
understood ``you'' and deleted ``Do'' in paragraph c.
     514.270-3 Evaluation factors for award.
    [endex] Edited to avoid either using the passive voice or repeating 
``the contracting officer.''
     514.270-4 Grouping line items for aggregate award.
    [endex] In paragraph (a) the title ``Type of contract'' was changed 
to one that is more descriptive of the substance of the paragraph; type 
of contract refers to Part 16 contract types.
    [endex] In paragraph (b) changed the ``when you group'' to ``when 
grouping'' and in (d)(3)(i) changed ``It can cause you to lose'' to 
``It can cause the loss of''.
     514.270-6 Guidelines for using the weight factors method.
    [endex] In paragraph (a) changed ``you have'' to ``there are''; in 
paragraph (d) changed ``You may reduce estimated quantities'' to 
``Estimated quantities may be reduced''. In paragraph (e) deleted the 
``you'' in the first sentence.
     514.270-7 Guidelines for using the price list method.
    [endex] Changed ``you need to make'' in paragraph (a) to 
    [endex] In paragraph (b) changed ``When you use'' to ``using''.
    [endex] In paragraph (c) changed ``You may develop price lists'' to 
``Price lists may be developed''.
    [endex] In paragraph (d) changed ``you use'' to ``the contracting 
officer uses'' and changed ``You may provide'' to ``This information 
may be provided''.
    [endex] In paragraph (e) changed ``You may use prices'' to ``Prices 
may be used''.
    [endex] In paragraph (h) changed ``If you cannot estimate the 
Government's needs'' to ``If the Government's needs cannot be 
    [endex] In paragraph (i)(6) changed ``If you provide'' to ``If 
    [endex] In paragraph (i)(8) deleted the sentence in its entirety 
and replaced with ``When the solicitation further groups united prices 
by trade or business category, multiple percentages may be required''.
     514.407-3 Other mistakes disclosed before award.
    [endex] Deleted paragraph (b) because it is redundant with FAR 
    [endex] Renumbered old paragraphs (1) and (2), (a) and (b), 
     514.407-4 Mistakes after award.
    [endex] Added ``are required to'' and changed ``your'' to ``the 
contracting officer's''.
     552.214-70 ``All or None'' Offers.
    [endex] Deleted the Sep 1999 date and replaced with [DATE].
    [endex] In subparagraph (a) deleted the first part of the sentence 
so it now to begins with ``The government[hellip]''
    [endex] Deleted Alternate I in its entirety to match the proposed 
     552.214-71 Progressive Awards and Monthly Quantity 
Allocations. Unchanged.
     552.214-72 Bid Sample Requirements.
    [endex] Deleted ``NOTE (1)'' because it is redundant.

Discussion of Comments

    There were no public comments received in response to the Advanced 
Notice of Proposed Rulemaking.

B. Regulatory Flexibility Act

    The GSA 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 the revisions are not considered substantive. The revisions 
only update and reorganize existing coverage. An Initial Regulatory 
Flexibility Analysis has, therefore, not been performed. We invite 
comments from small businesses and other interested parties. The GSA 
will consider comments from small entities concerning the affected GSAR 
Part 514 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 2008-G505), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act applies; however, these changes to the 
GSAR do not impose additional information collection requirements to 
the paperwork burden previously approved under OMB Control Number 3090-

List of Subjects in 48 CFR Parts 514, 552, and 553

    Government procurement.

    Dated: September 17, 2008
Al Matera,
Director,Office of Acquisition Policy.
    Therefore, GSA proposes to amend 48 CFR parts 514, 552, and 553 as 
set forth below:
    1. The authority citation for 48 CFR parts 514, 552, and 553 
continues to read as follows:

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


    2. Revise section 514.201-2 to read as follows:

514.201-2  Part I--The Schedule.

    (a) When using Standard Form 33, Solicitation, Offer and Award, 
include the following cautionary notice:
    ``Notice to Bidders--Use Item 13 of the Standard Form 33, 
Solicitation, Offer and Award, to offer prompt payment discounts. 
The Prompt Payment clause of this solicitation sets forth payment 
terms. Do not insert any statement in Item 13 that requires payment 
sooner than the time stipulated in the Prompt Payment clause (See 
FAR 52.232-25). EXAMPLE: If you insert ``NET 20'' in Item 13, GSA 
will reject your offer as nonresponsive because the entry 
contradicts the 30 day payment terms specified in the Prompt Payment 
    (b) When using other authorized forms (e.g., Standard Form 1447, 
Solicitation/Contract; Standard Form 1449, Solicitation/Contract/Order 
for Commercial Items), include the notice in paragraph (a) of this 
subsection. Change the reference to the form number, form title, and 
item number accordingly.
    3. Revise section 514.201-6 to read as follows:

514.201-6  Solicitation provisions.

    When considering all or none bids, insert the provision at 552.214-
70, ``All or None'' Offers, in the solicitation.
    4. Revise section 514.201-7 to read as follows:

514.201-7  Contract clauses.

    Stock replenishment contracts. For some stock replenishment 
contracts, individual contractors may be unable to furnish the 
Government's monthly requirements. The contracting officer may 
determine that progressive awards will be more expedient. In such 
cases, insert a clause substantially the same as the clause at 552.214-
71, Progressive Awards and Monthly Quantity Allocations, in the 
solicitation and contract.
    5. Revise section 514.202-4 to read as follows:

514.202-4  Bid samples.

    (a) Requirements for samples in invitations for bids. (1) When bid 
samples are required, the contracting officer shall require bidders to 
submit samples produced by the manufacturer whose products will be 
supplied under the contract.
    (2) The FAR limits use of bid samples to cases where the 
contracting officer cannot describe some characteristics of a product 
adequately in the specification or purchase description. This usually 
applies to subjective characteristics. The contracting officer may 
determine that there is a need to

[[Page 60226]]

examine objective characteristics of bid samples to determine the 
responsiveness of a bid. The contracting officer should base the 
determination on past experience or other valid considerations. In the 
solicitation, separately list ``Subjective Characteristics'' and 
``Objective Characteristics.''
    (3) A provision appears at 552.214-72, Bid Sample Requirements. 
This provision may be modified to fit the circumstances of a 
    (b) Handling bid samples. (1) Samples from accepted bids must be 
retained for the period of contract performance. If there are no 
outstanding claims regarding the contract, the contracting officer may 
authorize disposal of the samples at the end of the contract term 
following the bidder's instructions.
    (2) If the contracting officer anticipates a claim regarding the 
contract, the contracting officer shall require that the bid samples be 
retained until the claim is resolved.
    (3) The contracting officer shall require that samples from 
unsuccessful bids be retained until award. After award, these samples 
may be disposed of following the bidder's instructions.
    6. Add section 514.202-5 to read as follows:

514.202-5  Descriptive Literature.

    Requirements for Invitations for bids. When using brand name or 
equal purchase descriptions, the provision at FAR 52.211-6 satisfies 
the requirement for descriptive literature.

514.203  [Removed]

    7. Remove section 514.203.
    8. Amend section 514.270-2 by revising the section heading, 
redesignating paragraphs (a)(4) and (a)(5) as (a)(5) and (a)(6), 
respectively, adding new paragraph (a)(4), and revising paragraphs (b) 
introductory text, and (c) to read as follows::

514.270-2  Justification for use.

* * * * *
    (4) Awarding the low-demand articles in conjunction with the high-
demand articles may encourage competition.
* * * * *
    (b) Before deciding to combine items for aggregate award, the 
contracting officer should consider the following factors:
* * * * *
    (c) The contracting officer should not use an aggregate award if it 
will significantly restrict the number of eligible bidders.
    9. Revise section 514.270-3 to read as follows:

514.270-3  Evaluation factors for award.

    The solicitation should clearly state the basis for evaluating bids 
for aggregate award, require bidders to submit a price on each item 
within the group or a percentage to be added or subtracted from a list 
price, and advise bidders that failure to submit prices as required 
within a group makes a bid ineligible for award for that group.
    10. Amend section 514.270-4 by revising paragraphs (a), (b), and 
(d)(3)(i) to read as follows:

514.270-4  Grouping line items for aggregate award.

    (a) Supplies and services. This subsection applies to acquisitions 
of supplies and services.
    (b) Effect on competition. Provide for full and open competition 
when grouping items for award. Grouping items for award may preclude a 
significant number of firms from bidding. This occurs if firms are 
unable to provide all the types or quantities of supplies or services, 
or make deliveries to the various delivery points included in the 
prospective aggregate group.
* * * * *
    (d) * * *
    (3) * * *
    (i) Grouping widespread geographic locations or delivery points may 
reduce competition or result in higher prices. It can cause the loss of 
``area pricing'' advantages provided by a supplier with a single 
production point.
* * * * *
    11. Amend section 514.270-6 by--
    a. Revising the first sentence of paragraph (a) introductory text;
    b. Revising the first sentence of paragraph (d); and
    c. Removing from paragraph (e) the word ``you''.
    The revised text reads as follows:

514.270-6  Guidelines for using the weight factors method.

    (a) Use the weight factors method when there are reliable estimates 
for the quantities needed in an acquisition. * * *
* * * * *
    (d) Estimated quantities may be reduced to smaller numbers by a 
common denominator. * * *
* * * * *
    12. Amend section 514.270-7 by--
    a. Revising the first sentence in paragraph (a);
    b. Revising the introductory text of paragraphs (b) and (c);
    c. Revising paragraph (d);
    d. Revising the second sentence of paragraph (e);
    e. Revising the third sentence in paragraph (h), and paragraphs 
(i)(6) and (i)(8).
    The revised text reads as follows:

514.270-7  Guidelines for using the price list method.

    (a) General. The price list method helps avoid unbalanced bidding 
when making aggregate awards, but lack accurate estimates of 
anticipated quantities. * * *
    (b) Solicitation requirements. When using the price list method, in 
the solicitation:
* * * * *
    (c) Developing list prices. Price lists may be developed using one 
or more of the following sources:
* * * * *
    (d) First time use for an item or service. The first time the 
contracting officer uses list prices for an item or service, give 
prospective bidders an opportunity to review the proposed list. Also 
provide information on how GSA will use the list prices. This 
information may be provided in a draft solicitation.
    (e) * * *. Prices may be used from previous awards made using the 
weight factors method to develop price lists.
* * * * *
    (h) * * *. If the Government's needs cannot be estimated, the 
solicitation may include past orders. * * *
    (i) * * *
    (6) If providing quantity estimates, state that the estimates are 
for information only and do not constitute guarantees or commitments to 
order items under the contract.
* * * * *
    (8) When the solicitation further groups unit prices by trade or 
business category, multiple percentages may be required.
* * * * *
    13. Revise section 514.407-3 to read as follows:

514.407-3  Other mistakes disclosed before award.

    Delegation of authority by head of the agency. Under FAR 14.407-
3(e), contracting directors (see 502.101) are authorized, without power 
of redelegation, to make--
    (a) The determinations regarding corrections and withdrawals under 
FAR 14.407-3(a), (b), and (c); and
    (b) The corollary determinations not to permit withdrawal or 
correction under FAR 14.407-3(d).
    14. Revise section 514.407-4 to read as follows:

514.407-4  Mistakes after award.

    The contracting director and assigned counsel are required to 
review and approve the contracting officer's determinations under FAR 
14.407-4(b) and (c).

[[Page 60227]]


    15. Amend section 552.214-70 by--
    a. Revising the date of the provision;
    b. Revising paragraph (a); and
    c. Removing Alternate I.
    The revised text reads as follows:

552.214-70  ``All or None'' Offers.

* * * * *
    (a) The Government reserves the right to evaluate offers and make 
awards on an ``all or none'' basis as provided below.
* * * * *
    (End of provision)
    16. Amend section 552.214-72 by--
    a. Revising the date of the provision;
    b. Revising the ``Note''; and
    c. Adding text for the Contracting Officer's address.
    The revised and added text reads as follows:

552.214-72  Bid Sample Requirements.

* * * * *
* * * * *
    NOTE: Bidders that propose to furnish an item or group of items 
from more than one manufacturer or production point must submit two 
samples from the production of each manufacturer or production point.
* * * * *
    Contracting Officer insert address.
    (End of provision)


553.370-3577  [Removed]

    17. Remove section 553.370-3577
[FR Doc. E8-22795 Filed 10-9-08; 8:45 am]