[Federal Register Volume 83, Number 247 (Thursday, December 27, 2018)]
[Proposed Rules]
[Pages 66662-66665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27591]
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DEPARTMENT OF VETERANS AFFAIRS
48 CFR Parts 817 and 852
RIN 2900-AQ19
VA Acquisition Regulation: Special Contracting Methods
AGENCY: Department of Veterans Affairs.
ACTION: Proposed rule.
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SUMMARY: The Department of Veterans Affairs (VA) is proposing to amend
and update its VA Acquisition Regulation (VAAR) in phased increments to
revise or remove any policy superseded by changes in the Federal
Acquisition Regulation (FAR), to remove any procedural guidance that is
internal to VA into the VA Acquisition Manual (VAAM), and to
incorporate new regulations or policies. These changes seek to
streamline and align the VAAR with the FAR and remove outdated and
duplicative requirements and reduce burden on contractors. The VAAM
incorporates portions of the removed VAAR as well as other internal
agency acquisition policy. VA will rewrite certain parts of the VAAR
and VAAM, and as VAAR parts are rewritten, VA will publish them in the
Federal Register. VA will combine related topics, as appropriate. In
particular, this rulemaking revises VAAR concerning Special Contracting
Methods and Solicitation Provisions and Contract Clauses.
DATES: Comments must be received on or before February 25, 2019 to be
considered in the formulation of the final rule.
ADDRESSES: Written comments may be submitted through
www.Regulations.gov; by mail or hand-delivery to Director, Regulation
Policy and Management (00REG), Department of Veterans Affairs, 810
Vermont Avenue NW, Room 1063B, Washington, DC 20420; or by fax to (202)
273-9026. Comments should indicate that they are submitted in response
to ``RIN 2900-AQ19--VA Acquisition Regulation: Special Contracting
Methods.'' Copies of comments received will be available for public
inspection in the Office of Regulation Policy and Management, Room
1063B, between the hours of 8:00 a.m. and 4:30 p.m., Monday through
Friday (except holidays). Please call (202) 461-4902 for an
appointment. (This is not a toll-free number.) In addition, during the
comment period, comments may be viewed online through the Federal
Docket Management System (FDMS) at www.Regulations.gov.
FOR FURTHER INFORMATION CONTACT: Mr. Rafael N. Taylor, Senior
Procurement Analyst, Procurement Policy and Warrant Management
Services, 003A2A, 425 I Street NW, Washington, DC 20001, (202) 382-
2787. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION:
Background
This rulemaking is issued under the authority of the Office of
Federal Procurement Policy (OFPP) Act, which provides the authority for
an agency head to issue agency acquisition regulations that implement
or supplement the FAR.
VA is proposing to revise the VAAR to add new policy or regulatory
requirements and to remove any redundant guidance and guidance that is
applicable only to VA's internal operating processes or procedures.
Codified acquisition regulations may be amended and revised only
through rulemaking. All amendments, revisions, and removals have been
reviewed and concurred with by VA's Integrated Product Team of agency
stakeholders.
The VAAR uses the regulatory structure and arrangement of the FAR
and headings and subject areas are consistent with FAR content. The
VAAR is divided into subchapters, parts (each of which covers a
separate aspect of acquisition), subparts, and sections.
The Office of Federal Procurement Policy Act, as codified in 41
U.S.C. 1707, provides the authority for the Federal Acquisition
Regulation and for the issuance of agency acquisition regulations
consistent with the FAR.
When Federal agencies acquire supplies and services using
appropriated funds, the purchase is governed by the FAR, set forth at
Title 48 Code of Federal Regulations (CFR), chapter 1, parts 1 through
53, and the agency regulations that implement and supplement the FAR.
The VAAR is set forth at Title 48 CFR, chapter 8, parts 801 to 873.
Discussion and Analysis
The VA proposes to make the following changes to the VAAR in this
phase of its revision and streamlining initiative. For procedural
guidance cited below that is proposed to be deleted from the VAAR, each
section cited for removal is being considered for inclusion in VA's
internal agency operating procedures in accordance with FAR
1.301(a)(2). Similarly, delegations of authorities that are removed
from the VAAR will be included in the VAAM as internal agency guidance.
The VAAM is being created in parallel with these revisions to the VAAR
and is not subject to the rulemaking process as they are internal VA
procedures and guidance. Therefore, the VAAM will not be finalized
until corresponding VAAR parts are finalized, and it is not yet
available on line.
VAAR Part 817--Special Contracting Methods
Under part 817, we propose to add 41 U.S.C. 1702 which addresses
the acquisition planning and management responsibilities of Chief
Acquisition Officers and Senior Procurement Executives, to include
implementation of unique procurement policies, regulations and
standards of the executive agency, as an authority to the publishing of
this part. We also propose to add 38 U.S.C. 8128 as the authority for
the Veterans First Contracting Program which applies to this part. We
also propose to add 41 U.S.C. 1303 which provides that executive
agencies may issue regulations essential to implement Government-wide
policies and procedures within the agency and additional policies and
procedures required to satisfy the specific and unique needs of the
agency. We also propose to add 48 CFR 1.301-1.304 as the basic
authority for agencies to issue supplemental regulations and procedures
to the FAR. The authorities cited for this part are 38 U.S.C. 8127-
8128; 41 U.S.C. 1303; 41 U.S.C. 1702 and 48 CFR 1.301-1.304.
We propose to remove subpart 817.1, Multi-year Contracting, in its
entirety since it deals with internal procedures about the uses of
multi-year contracting and internal approvals to be obtained.
We propose to remove subpart 817.2 in its entirety by removing
817.202, Use of options, and 817.204, Contracts. 817.202 consists of
internal procedures to develop solicitations and cost comparisons under
Office of Management and Budget Circular A-76. Since there is currently
a moratorium on A-76 contracts this will not be moved to the VAAM.
817.204, Contracts, contains internal procedures and approvals to be
obtained for contracts with option periods greater than five years, and
this coverage will be moved to the VAAM.
We propose removing subpart 817.4, Leader Company Contracting, and
817.402, Limitations, since they include internal procedures and
approval requirements for leader company
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contracts. The coverage will be moved to the VAAM.
We propose to revise the title of subpart 817.5 to read
``Interagency Acquisitions.'' In the newly added 817.501, General, we
propose to require any governmental entity that acquires goods and
services on behalf of the Department of Veterans Affairs shall comply,
to the maximum extent feasible, with the provisions of 38 U.S.C. 8127
and 8128, and the Veterans First Contracting Program as implemented at
subpart 819.70.
We propose to remove 817.502, General, which is replaced with
updated policy in 817.501. The coverage was moved to comport with the
numbering in the FAR.
We propose to add subpart 817.70, Undefinitized Contract Actions,
to provide policy and procedures for use of this type of action.
Coverage is proposed as undefinitized contract actions (UCAs) are a
high-risk method of procurement; accordingly, we propose to add
guidance to mitigate the risks associated with UCAs.
We proposed to add 817.7000, Scope, which describes the material
being introduced in this subpart.
We propose to add 817.7001, Definitions, to provide definitions of
four terms used in the subpart: contract action, definitization,
definitization proposal, and undefinitized contract action.
We propose to add 817.7002, Exceptions, to exempt simplified
acquisitions and congressionally mandated long-lead procurement
contracts from this policy, but to require the contracting officer to
apply the policy and procedures to the maximum extent practicable.
We propose to add 817.7003, Policy, which limits undefinitized
contract actions to situations where it is not possible to negotiate a
definitive contract action in time to meet the government's
requirements, and where the interests of the government demand that the
contractor be given a commitment so that contract performance can begin
immediately.
We propose to add 817.7004, Limitations, with no text, and the
following sections: 817.7004-1, Authorization, which provides guidance
as to when the contracting officer must obtain approval to use an
undefinitized contract action; and 817.7004-2, Price ceiling, which
requires all undefinitized contract actions to include not-to-exceed
price ceilings.
We propose to add 817.7004-3, Definitization schedule, which sets
parameters for establishing definitization schedules and requires
submission of a definitization proposal in accordance with the
definitization schedule as a material element of the contract, where
non-compliance may result in suspension or reduction of progress
payments under FAR 32.503-6 or other appropriate action.
We propose to add 817.7004-4, Limitations on obligations, which
provides guidance on setting limits on the obligations on undefinitized
contract actions.
We propose to add 817.7004-5, Final price negotiation--profit,
which provides guidance on negotiating profit that reflects the
contractor's reduced cost risk prior to definitization.
We propose to add 817.7005, Contract clause, which prescribes new
clause 852.217-70, Contract Action Definitization, for all UCAs,
solicitations associated with UCAs, BOAs, IDIQ contracts, or any other
type of contract providing for the use of UCAs.
VAAR Part 852--Solicitation Provisions and Contract Clauses
In subpart 852.2, Text of Provisions and Clauses, we propose to add
clause 852.217-70, Contract Action Definitization, to provide specific
procedures required to definitize UCAs.
Effect of Rulemaking
Title 48, Federal Acquisition Regulations System, Chapter 8,
Department of Veterans Affairs, of the Code of Federal Regulations, as
proposed to be revised by this rulemaking, would represent VA's
implementation of its legal authority and publication of the VAAR for
the cited applicable parts. Other than future amendments to this rule
or governing statutes for the cited applicable parts, or as otherwise
authorized by approved deviations or waivers in accordance with FAR
subpart 1.4, Deviations from the FAR, and as implemented by VAAR
subpart 801.4, Deviations from the FAR or VAAR, no contrary guidance or
procedures would be authorized. All existing or subsequent VA guidance
would be read to conform with the rulemaking if possible or, if not
possible, such guidance would be superseded by this rulemaking as
pertains to the cited applicable VAAR parts.
Executive Orders 12866, 13563 and 13771
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.
E.O. 12866, Regulatory Planning and Review, defines ``significant
regulatory action'' to mean any regulatory action that is likely to
result in a rule that may: ``(1) Have an annual effect on the economy
of $100 million or more or adversely affect in a material way the
economy, a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
Governments or communities; (2) Create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
this Executive Order.''
VA has examined the economic, interagency, budgetary, legal, and
policy implications of this regulatory action, and it has been
determined not to be a significant regulatory action under E.O. 12866.
VA's impact analysis can be found as a supporting document at
http://www.regulations.gov, usually within 48 hours after the
rulemaking document is published. Additionally, a copy of the
rulemaking and its impact analysis are available on VA's website at
http://www.va.gov/orpm by following the link for VA Regulations
Published from FY 2004 Through Fiscal Year to Date. This proposed rule
is not expected to be an E.O. 13771 regulatory action because this
proposed rule is not significant under E.O. 12866.
Paperwork Reduction Act
This proposed rule contains no provisions constituting a collection
of information under the Paperwork Reduction Act of 1995 (44 U.S.C.
3501-3521).
Regulatory Flexibility Act
This proposed rule would not have a significant economic impact on
a substantial number of small entities as they are defined in the
Regulatory Flexibility Act, 5 U.S.C. 601-612. The overall impact of the
proposed rule would be of benefit to small businesses as the VAAR is
being updated to remove extraneous procedural information that applies
only to VA's internal operating
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procedures. VA estimates no cost impact to individual business would
result from these rule updates. This rulemaking does not have an
economic impact to individual businesses, and there are no increased or
decreased costs to small business entities. On this basis, the proposed
rule would not have an economic impact on a substantial number of small
entities as they are defined in the Regulatory Flexibility Act, 5
U.S.C. 601-612. Therefore, under 5 U.S.C. 605(b), this regulatory
action is exempt from the initial and final regulatory flexibility
analysis requirements of sections 603 and 604.
Unfunded Mandates
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C.
1532, that agencies prepare an assessment of anticipated costs and
benefits before issuing any rule that may result in the expenditure by
State, local, and tribal Governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any one year. This proposed rule would have no such
effect on State, local, and tribal Governments or on the private
sector.
List of Subjects
48 CFR Part 817
Government procurement.
48 CFR Part 852
Government procurement, Reporting and recordkeeping requirements.
Signing Authority
The Secretary of Veterans Affairs approved this document and
authorized the undersigned to sign and submit the document to the
Office of the Federal Register for publication electronically as an
official document of the Department of Veterans Affairs. Robert L.
Wilkie, Secretary, Department of Veterans Affairs, approved this
document on December 17, 2018, for publication.
Dated: December 17, 2018.
Consuela Benjamin,
Regulations Development Coordinator, Office of Regulation Policy &
Management, Office of the Secretary, Department of Veterans Affairs.
For the reasons set out in the preamble, VA is proposing to amend
48 CFR parts 817 and 852 as follows:
PART 817--SPECIAL CONTRACTING METHODS
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1. The authority citation for part 817 is revised to read as follows:
Authority: 38 U.S.C. 8127-8128; 41 U.S.C. 1303; 41 U.S.C. 1702;
and 48 CFR 1.301-1.304.
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2. The Table of Contents is revised to read as follows:
PART 817--SPECIAL CONTRACTING METHODS
Sec.
Subpart 817.1 [RESERVED]
Subpart 817.2 [RESERVED]
Subpart 817.4 [RESERVED]
Subpart 817.5 Interagency Acquisitions
817.501 General.
Subpart 817.70 Undefinitized Contract Actions
817.7000 Scope.
817.7001 Definitions.
817.7002 Exceptions.
817.7003 Policy.
817.7004 Limitations.
817.7004-1 Authorization.
817.7004-2 Price ceiling.
817.7004-3 Definitization schedule.
817.7004-4 Limitations on obligations.
817.7004-5 Final price negotiation--profit.
817.7005 Contract clause.
Subpart 817.1 [Removed and Reserved]
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3. Subpart 817.1 is removed and reserved.
Subpart 817.2 [Removed and Reserved]
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4. Subpart 817.2 is removed and reserved.
Subpart 817.4 [Removed and Reserved]
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5. Subpart 817.4 is removed and reserved.
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6. Subpart 817.5 is revised to read as follows:
817.5--Interagency Acquisitions
817.501 General.
(d) Any contract, agreement, or other arrangement with any
governmental entity to acquire goods and services, including
construction, that permits the governmental entity to acquire goods and
services on behalf of the Department of Veterans Affairs shall include
a requirement that the entity will comply, to the maximum extent
feasible, with the provisions of 38 U.S.C. 8127 and 8128, and the
Veterans First Contracting Program as implemented at subpart 819.70.
Accordingly, the governmental entity shall award contracts (see FAR
2.101 for the definition of contracts) to eligible service-disabled
veteran-owned small businesses (SDVOSBs) and veteran-owned small
businesses (VOSBs) listed in the VA Vendor Information Pages (VIP)
database to the maximum extent feasible.
817.502 [Removed]
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7. Section 817.502 is removed.
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8. Subpart 817.70 is added to read as follows:
Subpart 817.70--Undefinitized Contract Actions
817.7000 Scope.
This subpart prescribes policies and procedures for use of
undefinitized contract actions.
817.7001 Definitions.
As used in this subpart--
(a) Contract action includes:
(1) Contracts and contract modifications for supplies or services.
(2) Task orders and delivery orders.
(3) It does not include change orders, administrative changes,
funding modifications, or any other contract modifications that are
within the scope and under the terms of the contract, e.g., engineering
change proposals and value engineering change proposals.
(b) Definitization means the agreement on, or determination of,
contract terms, specifications, and price, which converts the
undefinitized contract action to a definitive contract.
(c) Definitization proposal means a proposal containing sufficient
data for the VA to do complete and meaningful analyses and audits of
the--
(1) Data in the proposal; and
(2) Any other data that the contracting officer has determined VA
needs to review in connection with the contract.
(d) Undefinitized contract action means any contract action for
which the contract terms, specifications, or price are not agreed upon
before performance is begun under the action. Examples are letter
contracts and orders under basic ordering agreements for which the
final price has not been agreed upon before performance has begun.
817.7002 Exceptions.
(a) The following undefinitized contract actions (UCAs) are not
subject to this subpart:
(1) Purchases at or below the simplified acquisition threshold.
(2) Congressionally mandated long-lead procurement contracts.
(b) However, the contracting officer shall apply the policy and
procedures to the contract actions in paragraph (a) to the maximum
extent practicable.
817.7003 Policy.
Undefinitized contract actions shall--
(a) Be used only when--
(1) The negotiation of a definitive contract action is not possible
in sufficient time to meet the Government's requirements; and
(2) The Government's interest demands that the contractor be given
a
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binding commitment so that contract performance can begin immediately.
(b) Be as complete and definite as practicable.
817.7004 Limitations.
817.7004-1 Authorization.
The contracting officer shall obtain approval one level above the
contracting officer before--
(a) Entering into a UCA. The request for approval must fully
explain the need to begin performance before definitization, including
the adverse impact on the VA resulting from delays in beginning
performance.
(b) Including requirements for non-urgent items and equipment in a
UCA. The request should show that inclusion of the non-urgent items is
consistent with good business practices and in the best interest of the
Government.
(c) Modifying the scope of a UCA when performance has already
begun. The request should show that the modification is consistent with
good business practices and in the best interests of the Government.
817.7004-2 Price ceiling.
UCAs shall include a not-to-exceed price.
817.7004-3 Definitization schedule.
(a) UCAs shall contain definitization schedules that provide for
definitization by the earlier of--
(1) The date that is 180 days after issuance of the action (this
date may be extended but may not exceed the date that is 180 days after
the contractor submits a definitization proposal); or
(2) The date on which the amount of funds paid to the contractor
under the contract action is equal to more than 50 percent of the not-
to-exceed price.
(b) Submission of a definitization proposal in accordance with the
definitization schedule is a material element of the contract. If the
contractor does not submit a timely definitization proposal, the
contacting officer may suspend or reduce progress payments under FAR
32.503-6, or take other appropriate action.
817.7004-4 Limitations on obligations.
The Government shall not obligate more than 50 percent of the not-
to-exceed price before definitization.
817.7004-5 Final price negotiation--profit.
Before the final price of a UCA is negotiated, contracting officers
shall ensure the profit agreed to and documented in the contract
negotiation memorandum reflects consideration of any risks incurred in
performance of the work under the UCA.
817.7005 Contract clause.
(a) Use the clause at 852.217-70, Contract Action Definitization,
in--
(1) All UCAs;
(2) Solicitations associated with UCAs;
(3) Orders against basic ordering agreements;
(4) Indefinite delivery task orders; and
(5) Any other type of contract providing for the use of UCAs.
(b) Insert the applicable information in paragraphs (a), (b), and
(d) of the clause.
(c) If, at the time of entering into the UCA, the contracting
officer knows that the definitive contract action will meet the
criteria of FAR 15.403-1, 15.403-2, or 15.403-3 for not requiring
submission of certified cost or pricing data, the words ``and certified
cost or pricing data'' may be deleted from paragraph (a) of the clause.
PART 852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
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9. The authority citation for part 852 continues to read as follows:
Authority: 38 U.S.C. 8127-8128, and 8151-8153; 40 U.S.C. 121(c);
41 U.S.C. 1121(c)(3); 41 U.S.C. 1303; 41 U.S.C. 1702; and 48 CFR
1.301-1.304.
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10. Section 852.217-70 is added to read as follows:
852.217-70 Contract Action Definitization.
As prescribed in 817.7005(a), insert the following clause:
Contract Action Definitization (Date)
(a) A__[Insert specific type of contract action] is
contemplated. The Contractor agrees to begin promptly negotiating
with the Contracting Officer the terms of a definitive contract
action that will include (1) all clauses required by the Federal
Acquisition Regulation (FAR) on the date of execution of the
undefinitized contract action, (2) all clauses required by law on
the date of execution of the definitive contract action, and (3) any
other mutually agreeable clauses, terms, and conditions. The
Contractor agrees to submit a__[Insert type of proposal, e.g.,
fixed-price, or cost-and-fee] proposal with cost or pricing data, as
appropriate, supporting it.
(b) The schedule for definitizing this contract action is as
follows [Insert target date for definitization of the contract
action and dates for submission of proposal, beginning of
negotiations, and, if appropriate, submission of the make-or-buy
plans, subcontracting plans, and cost or pricing data].
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(c) If agreement on a definitive contract action to supersede
this undefinitized contract action is not reached by the target date
in paragraph (b) of this clause, or within any extension of it
granted by the Contracting Officer, the Contracting Officer may,
with the approval of a Contracting Officer one level above,
determine a reasonable price or fee in accordance with FAR subpart
15.4 and FAR part 31, subject to Contractor appeal as provided in
the Disputes clause. In any event, the Contractor shall proceed with
completion of the contract, subject only to FAR 52.216-24,
Limitation of Government Liability.
(1) After the Contracting Officer's determination of price or
fee, the contract shall be governed by--
(i) All clauses required by the FAR on the date of execution of
this undefinitized contract action for either fixed-price or cost-
reimbursement contracts, as determined by the Contracting Officer
under this paragraph (c);
(ii) All clauses required by law as of the date of the
Contracting Officer's determination; and
(iii) Any other clauses, terms, and conditions mutually agreed
upon.
(2) To the extent consistent with paragraph (c)(1) of this
clause, all clauses, terms, and conditions included in this
undefinitized contract action shall continue in effect, except those
that by their nature apply only to an undefinitized contract action.
(d) The definitive contract action resulting from this
undefinitized contract action will include a negotiated__[Insert
``cost/price ceiling'' or ``firm-fixed-price''] in no event to
exceed__[Insert the not-to-exceed amount].
(End of clause)
[FR Doc. 2018-27591 Filed 12-26-18; 8:45 am]
BILLING CODE 8320-01-P