[Federal Register Volume 75, Number 115 (Wednesday, June 16, 2010)]
[Rules and Regulations]
[Pages 34273-34276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14216]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 5, 6, 13, and 24

[FAC 2005-42; FAR Case 2008-003 Item IV; Docket 2008-0001, Sequence 27]
RIN 9000-AL13


Federal Acquisition Regulation; FAR Case 2008-003, Public 
Disclosure of Justification and Approval Documents for Noncompetitive 
Contracts--Section 844 of the National Defense Authorization Act for 
Fiscal Year 2008

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have adopted as final, with 
changes, an interim rule amending the Federal Acquisition Regulation 
(FAR) to implement the National Defense Authorization Act for Fiscal 
Year 2008, Section 844 ``Public Disclosure of Justification and 
Approval Documents for Noncompetitive Contracts'' (FY08 NDAA). Section 
844 of the FY08 NDAA stipulates the requirements regarding the public 
availability of justifications and approval documents after the award 
of Federal contracts, except for information exempt from public 
disclosure.

DATES: Effective Date: July 16, 2010.

FOR FURTHER INFORMATION CONTACT: Ernest Woodson, Procurement Analyst, 
at (202) 501-3775, for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at (202) 501-4755. Please cite FAC 2005-42, FAR Case 2008-
003.

SUPPLEMENTARY INFORMATION:

A. Background

    The National Defense Authorization Act for Fiscal Year 2008, Pub. 
L. 110-181, Section 844, entitled ``Public Disclosure of Justification 
and Approval Documents for Noncompetitive Contracts,'' amends 10 U.S.C. 
2304 and 41 U.S.C. 253 regarding procurements made under subsection (c) 
(i.e., other than competitive procedures) to require public 
availability of the justification and approval (J&A) documents after 
contract award, except for information exempt from public disclosure 
under 5 U.S.C. 552. The provisions of section 844 require the head of 
an executive agency to make certain J&A documents relating to the use 
of noncompetitive procedures in contracting available on the website of 
an agency and through a governmentwide website selected by the 
Administrator for Federal Procurement Policy (OFPP) within 14 days of 
contract award. In the case of noncompetitive contracts awarded on the 
basis of unusual and compelling urgency, the documents must be posted 
within 30 days of contract award. The Competition in Contracting Act 
(Pub. L. 98-369) already requires that such J&A documents be made 
available for public inspection, subject to the exemptions from public 
disclosure provided in the Freedom of Information Act (FOIA) (5 U.S.C. 
552).
    The interim rule was published in the Federal Register at 74 FR 
2731 on January 15, 2009, with an effective date of February 17, 2009, 
and a request for comments by March 16, 2009.
    Nine respondents submitted nineteen comments in response to the 
interim rule. There were six categories of comments. These categories 
were applicability, exceptions, Federal Business Opportunities 
(FedBizOpps), protests, FOIA, and veterans.
    Below are the comments received on the interim rule along with the 
responses developed by the Councils.

[[Page 34274]]

Applicability:

    1. Comment: The rule states that the posting requirement applies to 
all contracts awarded under FAR 6.303-1 J&A documents. Is the intent to 
include sole-source justifications prepared under FAR subpart 13.5?
    Response: Section 844 of the FY08 NDAA requires posting of 
documents containing the J&A required by subsection (f)(1) of 10 U.S.C. 
2304 or 41 U.S.C. 253. Subsection (g) of those statutes provides for 
streamlined procedures that promote efficiency and economy in 
contracting and avoid unnecessary burdens for agencies and contractors 
for purchases not greater than the simplified acquisition threshold and 
for purchases made pursuant to the commercial-items test program. 
Accordingly, FAR 6.001 states that part 6 does not apply to 
acquisitions for contracts awarded using the simplified acquisition 
procedures and adds a reference to FAR 13.501 for the requirements 
pertaining to sole-source acquisitions of commercial items over the 
simplified acquisition threshold under subpart 13.5. FAR 13.501 
implemented 10 U.S.C. 4052(g), which stipulates that an executive 
agency may not conduct a purchase on a sole-source basis unless the 
need to do so is justified in writing and approved in accordance with 
10 U.S.C. 2304 or 41 U.S.C. 253. Thus, 10 U.S.C. 4052(g) imposed a 
justification process on sole-source actions over the simplified 
acquisition threshold done under the commercial-items test program. 
Similarly, though section 844 does not require posting of the FAR 
13.501 J&As document, the Councils recommend, as a matter of policy, 
that J&As required by FAR 13.501 also be posted on FedBizOpps. Such 
posting is consistent with the President's focus on creating a ``New 
Era of Open Government'' and is reasonable because these actions exceed 
the simplified acquisition threshold and posting could enhance 
opportunities for competition on future requirements of such commercial 
items. It is also consistent with the existing requirement (FAR 
5.102(a)(6)) to post a brand name justification in FedBizOpps along 
with the solicitation. Therefore, the rule has been revised to include 
the requirement to post FAR 13.501 justifications.
    2. Comment: The rule states that the posting requirement applies to 
all contracts awarded under FAR 6.303-1 J&A document. Is the intent to 
include limited-source justifications for orders placed under Federal 
Supply Schedules in accordance with FAR 8.405-6?
    Response: The posting requirement of Section 844 of the FY08 NDAA 
pertains to J&As executed pursuant to FAR subpart 6.3, it does not 
apply to the placement of orders under the Federal Supply Schedules. 
However, a separate FAR Case will implement section 843 of the NDAA, 
which requires posting of sole source task or delivery orders in excess 
of the Simplified Acquisition Threshold that are placed against 
multiple award contracts.

Exceptions:

    3. Comment: Will there be a dollar threshold for when we need to 
post the J&A to the FedBizOpps website?
    Response: There is no dollar threshold that triggers the 
requirement to post the J&A.
    4. Comment: If a purchase meets an exception at FAR 5.202 does it 
need to be posted? Recommend making exceptions to posting J&A 
consistent with the FAR exceptions to posting synopses (FAR 5.202), 
solicitation (FAR 5.102(a)(5)), or contract awards (FAR 5.301(b)).
    Response: The exceptions provided at FAR 5.102, 5.202, and 5.301 
all derive from section 18 of the Office of Federal Procurement Policy 
(OFPP) Act. The requirement to make the J&A available for public 
inspection is not a new requirement, but previously implemented 10 
U.S.C. 2304(f)(4) and 41 U.S.C. 253(f)(4). Only the requirement to post 
the J&A is new. Section 844 of the FY08 NDAA requires posting of the 
J&A and provides for exclusion of information exempt from public 
disclosure under section 552 of Title 5 U.S.C. (FOIA). As such, the FAR 
exceptions cannot automatically be applied to the posting of J&A. The 
Councils revised FAR 6.305 to add a new paragraph (e) to recognize 
that, in addition to redacting information in the J&A consistent with 
FOIA exemptions, there may also be cases where the J&A itself would be 
exempted from being posted per the FOIA exemptions. One such instance 
is when posting the J&A would disclose the executive agency's needs and 
disclosure would compromise national security or create other security 
risks. The Councils added this specific exception to the FAR because it 
is clearly consistent with FOIA and FAR 5.102, 5.202, and 5.301. Any 
other FOIA exemption that might authorize not posting the J&A must be 
determined in accordance with FAR subpart 24.2.
    5. Comment: Under FAR 5.202(a), there are several items that would 
prevent the agency from posting information available on the web for a 
pre-solicitation announcement. Currently, there is no such exception to 
posting the J&A, which can lead to a situation where the J&A gets 
posted while the award does not. When this happens, FedBizOpps rejects 
posting the J&A because it can't find the related award. FedBizOpps 
also rejects the J&A when a previously posted award has been placed in 
archive status.
    Response: The Councils have confirmed that FedBizOpps allows for 
the posting of a J&A even if there was no prior synopsis.
    6. Comment: A major concern for members of the intelligence 
community regards the potential security threat from publication of 
even unclassified material. Publicizing systems designed with the 
broader community in mind cannot always protect the sensitive but 
unclassified nature of the intelligence business. If this new 
requirement cannot be deleted in whole, then they request an exemption 
to the public disclosure requirement for the Office of the Director of 
National Intelligence until an ancillary classified database is 
developed for the intelligence community and others with sensitive 
information.
    Response: The contracting officer already has the authority to 
determine when not to disclose information that would compromise 
national security or create other security risks, for example per FOIA 
exemptions 1 and 7. However, as explained in the response to comment 4, 
the Councils did revise FAR 6.305 to recognize that, in addition to 
redacting information in the J&A consistent with FOIA exemptions, there 
may also be cases where the J&A itself would be exempted from being 
posted per the FOIA exemptions.

 Websites:

    7. Comment: Is the award number a fill in-the-blank for FedBizOpps? 
Will the award date be a fill in-the-box? It would be helpful so 
vendors know that it was already awarded.
    Response: When the Government is posting a J&A to FedBizOpps, it 
has the option of associating the J&A with an existing award notice in 
the system. In this case, the system will automatically populate the 
contract award number and award date. Otherwise, the Government will 
need to manually enter the contract award number and award date into 
the J&A notice form. (Note: An award number is not required for a 
brand-name J&A since a brand name J&A must be posted with the 
solicitation.)

Protests:

    8. Comment: When a vendor sees a J&A posted, will they have protest 
rights?

[[Page 34275]]

    Response: The statute did not change any protest rights, including 
any timeliness requirements. The rationale for posting is just to make 
the process more transparent.
    9. Comment: One commenter recommends the rule should recognize the 
date publicized on FedBizOpps as the date upon which a basis of protest 
is known under GAO rules of procedure. Another commenter states that if 
the protest timeliness rules are revised, there will likely be more 
protests.
    Response: Timeliness requirements have not been revised by the 
statute. The Councils cannot unilaterally change either the Government 
Accounting Office (GAO) timeliness rules or Court of Federal Claims 
statutory jurisdiction. This rule is merely to make the process more 
transparent and help contractors to be apprised of possible future 
requirements that in the past were awarded on a sole source basis.
    10. Comment: The commenter wants to know why the Government is 
waiting up to 14 days as this will not help protesters compete, and if 
a protest is lodged, could result in delays and additional cost to the 
Government.
    Response: The intent is not to help protesters compete for the 
current requirement, but for the future. Section 844 of the FY08 NDAA, 
which this rule implements, states that the J&A must be made publicly 
available within 14 days after contract award.

Freedom of Information Act (FOIA):

    11. Comment: One commenter stated FAR 6.305(c) requires contracting 
officers to be guided by FOIA exemptions. FOIA procedures address very 
specific mechanisms and timelines for review and release of 
information. Referencing FOIA procedures implies that the contracting 
officer should consult with the sole source contractor prior to release 
of information. The commenter questions whether such a step could be 
accomplished within the 14-day to 30-day requirement. Another commenter 
recommends that contractors be given the right to review J&A documents 
prior to release to ensure no proprietary information is included in 
the document, consistent with FOIA.
    Response: These commenters are referring to the requirements of 
Executive Order 12600, that agencies establish procedures to notify 
submitters of records containing confidential commercial information, 
the disclosure of which the department or agency has reason to believe 
could reasonably be expected to cause substantial competitive harm, 
when those records are requested under the FOIA.
    This executive order applies to the FOIA process that is used to 
determine financial information that might be exempt from public 
disclosure. Section 844 of the FY08 NDAA states only that the 
requirement to post J&As does not require the public availability of 
information that is exempt from public disclosure under FOIA. It does 
not mandate the FOIA process.
    Additionally, FAR 5.102(a)(6) and 5.705(b) also require posting of 
J&As for brand name and the rationale for non-competitive awards in 
support of the Recovery Act, respectively. The FAR requires that these 
documents be redacted as necessary to preclude disclosure of 
proprietary information or information that would otherwise compromise 
national security. In these instances, the FOIA exemptions to public 
disclosure apply, but not the FOIA process.
    Even though the FOIA process and, specifically, the submitter 
notification process in Executive Order 12600 do not apply, the 
Councils recognize there is an obligation to ensure that contractor 
proprietary information is not revealed. To ensure this does not 
happen, the Councils added language at FAR 6.305(e) that the 
contracting officer should provide the contractor an opportunity to 
review, but that this process must not delay posting within the 
established timelines.
    12. Comment: Recommend FAR 6.305 be revised to clarify that 
contracting officers shall remove information from J&As that reveals 
sensitive or unclassified information such as Operations Security 
(OPSEC) that could harm the Government if released to the public.
    Response: See Council's responses to comments 4 and 6.
    13. Comment: Recommend removing names, titles, telephone numbers 
and email addresses of Government employees who develop, review, or 
approve the J&A, except for publicly known points of contact, such as 
buyers or contracting officers to protect key Government personnel from 
harm and to funnel queries from potential offerors to appropriate 
contracting personnel.
    Response: Agencies have the flexibility to establish procedures 
whereby the actual J&A document includes only the names that the FAR 
requires for certification (FAR 6.303-2(a)(12) and (b)) and approval 
(FAR 6.304) purposes.
    14. Comment: Recommend removing estimated values from the J&As that 
could reveal the Government's negotiating position on future buys.
    Response: FAR 6.305(e) states that ``(c)ontracting officers shall 
also be guided by the exemptions to disclosure of information contained 
in the Freedom of Information Act[hellip]''. Therefore, additional 
detail on information that is exempt from release, e.g., estimated 
values, should not be in the FAR. Attempting to provide guidance in the 
FAR would most likely not list all possibilities, thereby creating the 
dangerous interpretation that, if it is not listed, it can be released. 
However, the contracting officer should consult as necessary with the 
local FOIA office and counsel to determine which information should be 
exempt from disclosure.
    15. Comment: Recommend issuing implementing guidance on what to 
redact to promote consistency in understanding and application.
    Response: See Council's response to comment number 14. The FAR is 
not the governing regulatory document for FOIA. Each agency's 
implementation of FOIA is located in its respective title of the Code 
of Federal Regulations. The interim rule amended the FOIA part of the 
FAR at 24.203(b) to add a reference to the excellent FOIA resources 
available from the Department of Justice.
    16. Comment: A commenter asked how long a J&A posted on an agency 
website must remain available for public inspection.
    Response: FedBizOpps requires a 30-day minimum posting requirement, 
although agencies are not precluded from posting the J&A for a longer 
period of time. The final rule revises FAR 6.305 to state J&As must 
remain posted for a minimum of 30 days.
    17. Comment: The commenter recommends the Councils consider 
integrating the J&A documents into the database located at 
www.usaspending.gov.
    Response: The law requires posting on the agency website and 
through a governmentwide website selected by the Administrator for 
Federal Procurement Policy. The Administrator for Federal Procurement 
Policy selected FedBizOpps as the governmentwide website.

Veterans:

    18. Comment: This interim rule is an obstacle to veteran-owned 
small businesses obtaining Federal business opportunities on a sole 
source basis, which was the intent of Pub. L. 109-461. Contracting 
officers will see section 844 as reinforcing their position that 
soliciting on a competitive basis will provide a fair and reasonable 
price without having to prepare a J&A.

[[Page 34276]]

    Response: This interim rule does not alter the criteria that must 
be satisfied before making a decision that an acquisition will be 
conducted on a sole-source basis. It also does not alter what 
documentation must be prepared to support that decision. This interim 
rule does not impact the authority the Department of Veterans Affairs 
was given under Pub. L. 109-461 to conduct noncompetitive sourcing 
under certain conditions or the procedures that the Department of 
Veterans Affairs puts in place to carry out noncompetitive sourcing. 
This interim rule merely states that, if a justification for other than 
full and open competition is issued pursuant to FAR 6.303-1 or 13.501, 
then that justification must be made publically available on the 
Government Point of Entry (GPE) website and the agency's website.
    19. Comment: This interim rule is just another obstacle to the 
Department of Veterans Affairs determining how to implement Pub. L. 
109-461.
    Response: The interim rule implementing section 844 of the FY08 
NDAA has no direct bearing on the implementation of Pub. L. 109-461.
    Changes to the Interim rule. The final rule:
    Adds a new paragraph FAR 6.305(c) to require that, if the 
justification is a brand-name justification under FAR 6.302-1(c), then 
it must be posted with the solicitation;
    Requires that the justification remain posted for a minimum 
of 30 days;
    Adds a new paragraph FAR 6.305(f), to clarify that posting 
the justification does not apply if it would disclose the executive 
agency's needs and disclosure of such needs would compromise national 
security or create other security risks; and
    Establishes procedures at FAR 13.501 similar to procedures 
at FAR 6.305(b), 6.305(d), 6.305(e), and 6.305(f).
    This is a significant regulatory action and, therefore, was 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 under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify 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 addresses 
internal Federal agency procedures and will benefit small business 
entities by providing the opportunity for the review of J&A documents 
for contracts awarded noncompetitively, thereby increasing the 
opportunity for competition for future awards.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C. 
chapter 35, et seq.

List of Subjects in 48 CFR Parts 5, 6, 13, and 24

    Government procurement.

    Dated: June 2, 2010.
Edward Loeb,
Acting Director, Acquisition Policy Division.

0
Accordingly, the interim rule published in the Federal Register at 74 
FR 2731 on January 15, 2009, is adopted as a final rule with the 
following changes:
0
1. The authority citation for 48 CFR parts 6 and 13 continues to read 
as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 6--COMPETITION REQUIREMENTS

0
2. Revise section 6.305 to read as follows:


6.305  Availability of the justification.

    (a) The agency shall make publicly available the justification 
required by 6.303-1 as required by 10 U.S.C. 2304(l) and 41 U.S.C. 
253(j). Except for the circumstances in paragraphs (b) and (c) of this 
section, the justification shall be made publicly available within 14 
days after contract award.
    (b) In the case of a contract award permitted under 6.302-2, the 
justification shall be posted within 30 days after contract award.
    (c) In the case of a brand name justification under 6.302-1(c), the 
justification shall be posted with the solicitation (see 5.102(a)(6)).
    (d) The justifications shall be made publicly available--
    (1) At the Government Point of Entry (GPE) www.fedbizopps.gov;
    (2) On the website of the agency, which may provide access to the 
justifications by linking to the GPE; and
    (3) Must remain posted for a minimum of 30 days.
    (e) Contracting officers shall carefully screen all justifications 
for contractor proprietary data and remove all such data, and such 
references and citations as are necessary to protect the proprietary 
data, before making the justifications available for public inspection. 
Contracting officers shall also be guided by the exemptions to 
disclosure of information contained in the Freedom of Information Act 
(5 U.S.C. 552) and the prohibitions against disclosure in 24.202 in 
determining whether the justification, or portions of it, are exempt 
from posting. Although the submitter notice process set out in EO 
12600, entitled ``Predisclosure Notification Procedures for 
Confidential Commercial Information,'' does not apply, if the 
justification appears to contain proprietary data, the contracting 
officer should provide the contractor that submitted the information an 
opportunity to review the justification for proprietary data, before 
making the justification available for public inspection, redacted as 
necessary. This process must not prevent or delay the posting of the 
justification in accordance with the timeframes required in paragraphs 
(a) through (c).
    (f) The requirements of paragraphs (a) through (d) do not apply if 
posting the justification would disclose the executive agency's needs 
and disclosure of such needs would compromise national security or 
create other security risks.

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

0
3. Amend section 13.501 by--
0
a. Removing from paragraph (a)(1)(i) ``section; and'' and adding 
``section;'' in its place;
0
b. Removing from paragraph (a)(1)(ii) ``(41 U.S.C. 428a).'' and adding 
``(41 U.S.C. 428a);'' in its place; and
0
c. Adding paragraphs (a)(1)(iii) and (a)(1)(iv) to read as follows:


13.501  Special documentation requirements.

    (a) * * *
    (1) * * *
    (iii) Make publicly available the justifications (excluding brand 
name) required by 6.305(a) within 14 days after contract award or in 
the case of unusual and compelling urgency within 30 days after 
contract award, in accordance with 6.305 procedures at paragraphs (b), 
(d), (e), and (f); and
    (iv) Make publicly available brand name justifications with the 
solicitation, in accordance with 5.102(a)(6).
[FR Doc. 2010-14216 Filed 6-15-10; 8:45 am]
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