[Federal Register Volume 79, Number 132 (Thursday, July 10, 2014)]
[Proposed Rules]
[Pages 39361-39362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-16149]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 15

[FAR Case 2013-012; Docket No. 2013-0012; Sequence No. 1]
RIN 9000-AM57


Federal Acquisition Regulation; Review and Justification of Pass-
Through Contracts

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

ACTION: Proposed rule.

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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement section 802 of the National 
Defense Authorization Act of Fiscal Year 2013. This section provides 
additional requirements relative to the review and justification of 
Pass-Through contracts.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat at one of the addressees shown below on or 
before September 9, 2014 to be considered in the formation of the final 
rule.

ADDRESSES: Submit comments in response to FAR Case 2013-012 by any of 
the following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by searching for ``FAR Case 
2013-012''. Select the link ``Comment Now'' that corresponds with ``FAR 
Case 2013-012.'' Follow the instructions provided at the ``Comment 
Now'' screen. Please include your name, company name (if any), and 
``FAR Case 2013-012'' on your attached document.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd Floor, 
Washington, DC 20405.
    Instructions: Please submit comments only and cite FAR Case 2013-
012, 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: Mr. Edward N. Chambers, Procurement 
Analyst, at 202-501-3221, for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at 202-501-4755. Please cite FAR Case 2013-012.

SUPPLEMENTARY INFORMATION: 

I. Background

    The National Defense Authorization Act (NDAA) for Fiscal Year 2013 
was signed into law and effective on December 31, 2012. Section 802 of 
the law provides additional requirements relative to the review and 
justification of Pass-Through contracts. Specifically, this law 
requires in those instances where an offeror for a contract, task 
order, or delivery order informs the agency pursuant to FAR 52.215-22 
of their intention to award subcontracts for more than 70 percent of 
the total cost of work to be performed under the contract, task order, 
or delivery order, the contracting officer is required to (1) consider 
the availability of alternative contract vehicles and the feasibility 
of contracting directly with a subcontractor or subcontractors that 
will perform the bulk of the work; (2) make a written determination 
that the contracting approach selected is in the best interest of the 
Government; and (3) document the basis for such determination. 
Therefore, FAR 15.404-1(h) is being created by this rule to implement 
these statutory requirements.
    However, Section 1615 of the NDAA for Fiscal Year 2014, which was 
signed into law and effective on December 26, 2013, provides that for 
contracts under the provisions of Section 46 of the Small Business Act 
(15 U.S.C. 657s) the requirements under Section 802 of the NDAA for 
Fiscal Year 2013 do not apply. Accordingly, the proposed rule exempts 
FAR Part 19 acquisitions.
    While Section 802 only applies to contracts with the Department of 
Defense, the Department of State, and the United States Agency for 
International Development, for the purpose of consistency, it was 
decided to apply the section's requirements to all of the agencies 
subject to the FAR.

II. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is a significant regulatory action and, therefore, was subject to 
review under section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.

III. Regulatory Flexibility Act

    DoD, GSA, and NASA do 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 rule augments the current responsibilities of 
contracting officers relative to the review and justification of pass-
through contracts and does not initiate or impose any new 
administrative or performance requirements on contractors.
    Therefore, an Initial Regulatory Flexibility Analysis has not been 
performed. DoD, GSA, and NASA invite comments from small business 
entities concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by the rule 
consistent with 5 U.S.C. 610. Interested parties

[[Page 39362]]

must submit such comments separately and should cite 5 U.S.C. 610, FAR 
Case 2013-012, in correspondence.

IV. Paperwork Reduction Act

    This rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C chapter 35).

List of Subjects in 48 CFR Part 15

    Government procurement.

    Dated: July 2, 2014.
William Clark,
Acting Director, Office of Government-wide Acquisition Policy, Office 
of Acquisition Policy, Office of Government-wide Policy.

    Therefore, DoD, GSA, and NASA propose to amend 48 CFR part 15 as 
set forth below:

PART 15--CONTRACTING BY NEGOTIATION

0
1. The authority citation for 48 CFR part 15 continues to read as 
follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.

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2. Amend section 15.404-1 by adding paragraph (h) to read as follows.


Sec.  15.404-1  Proposal analysis techniques.

* * * * *
    (h) Review and justification of pass-through contracts. (1) The 
requirements of this paragraph (h) are applicable to all agencies. The 
requirements apply by law to the Department of Defense, the Department 
of State, and the United States Agency for International Development, 
per Section 802 of the National Defense Authorization Act (NDAA) for 
Fiscal Year 2013. The requirements apply as a matter of policy to other 
Federal agencies.
    (2) Except as provided in paragraph (h)(3) of this section, when an 
offeror for a contract or a task or delivery order informs the 
contracting officer pursuant to 52.215-22 that it intends to award 
subcontracts for more than 70 percent of the total cost of work to be 
performed under the contract, task or delivery order, the contracting 
officer shall--
    (i) Consider the availability of alternative contract vehicles and 
the feasibility of contracting directly with a subcontractor or 
subcontractors that will perform the bulk of the work;
    (ii) Make a written determination that the contracting approach 
selected is in the best interest of the Government; and
    (iii) Document the basis for such determination.
    (3) Contract actions under FAR Part 19 are exempt from the 
requirements of this paragraph (h).

[FR Doc. 2014-16149 Filed 7-9-14; 8:45 am]
BILLING CODE 6820-14-P