[Federal Register Volume 84, Number 121 (Monday, June 24, 2019)]
[Rules and Regulations]
[Pages 29389-29391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13217]
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DEPARTMENT OF VETERANS AFFAIRS
48 CFR Part 808
[Docket VA-2019-VACO-0018]
Issuance of Class Deviation From VA Acquisition Regulation (VAAR)
Part 808--Required Sources of Supplies and Services and Conforming
Amendments
AGENCY: Department of Veterans Affairs (VA).
ACTION: Temporary rule; request for comments.
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SUMMARY: VA provides notification that the agency has issued a class
deviation from VA Acquisition Regulation (VAAR) Part 808--Required
Sources of Supplies and Services. VA is amending the VAAR to implement
the Federal Circuit's mandate. VA has determined that publication of
this notification in the Federal Register would be beneficial to both
the agency's acquisition workforce and industry stakeholders. The class
deviation, which is effective May 20, 2019, was issued to immediately
implement the Federal Circuit's mandate, and this publication is to
further notify the public in order to avoid confusion regarding
applicable policy and to make conforming amendments to the CFR. The
public is invited to submit comments on VA's approach to implementing
the Federal Circuit mandate, as set forth in the class deviation and
the conforming amendments to the CFR set forth in this publication.
DATES: The rule is effective June 24, 2019 through July 1, 2021. The
class deviation is effective as of May 20, 2019. Comments: Interested
parties are invited to submit comments in writing by July 24, 2019.
ADDRESSES: Written comments may be submitted through http://www.regulations.gov; by mail or hand delivery to the Director, Office
of Regulation Policy and Management (00REG), Department of Veterans
Affairs, 810 Vermont Avenue NW, Room 1064, Washington DC 20420; or by
fax to 202-273-9026. Comments should indicate that they are submitted
in response to Docket #VA-2019-VACO-0018, titled--``Issuance of Class
Deviation from VA Acquisition Regulation (VAAR) Part 808 -- Required
Sources of Supplies and Services.'' During the comment period, comments
may also be viewed online through the Federal Docket Management System
at www.regulations.gov. The full class deviation text is available at:
https://www.va.gov/oal/docs/business/pps/deviationVaar20190520.PDF.
FOR FURTHER INFORMATION CONTACT: Sheila P. Darrell, Ph.D., CFCM, Office
of Acquisition and Logistics (003A), Procurement Policy and Warrant
Management Service (003A2A) via email at [email protected]
or (202) 632-5288. (This is not a toll-free number).
SUPPLEMENTARY INFORMATION: On October 17, 2018, the Federal Circuit,
which has nationwide appellate jurisdiction over challenges to federal
agency procurement decisions, issued a decision in PDS Consultants,
Inc., v. The United States, Winston-Salem Industries for the Blind (PDS
Consultants), 907 F.3d 1345 (Fed. Cir. 2018). In the decision, the
Federal Circuit noted that in 2016 the United States Supreme Court, in
its decision in Kingdomware Technologies, Inc. v. United States, held
that, ``[e]xcept when the [VA] uses the noncompetitive and sole-source
contracting procedures in subsections (b) and (c), Sec. 8127(d)
requires the [VA] to use the Rule of Two before awarding a contract to
another supplier.'' However, the Federal Circuit acknowledged that
Kingdomware did not directly address the interaction between 38 U.S.C.
8127 and the Javits-Wagner O'Day Act (JWOD), 41. U.S.C. 8504, and,
instead focused on whether VA had the discretion to place orders under
a preexisting Federal Supply
[[Page 29390]]
Schedule before resorting to the Rule of Two.
The Federal Circuit further found that, under 38 U.S.C. 8128(a),
the Secretary of Veterans Affairs, when ``procuring goods and services
pursuant to a contracting preference under [title 38] or any other
provision of law . . . shall give priority to a small business concern
owned and controlled by veterans, if such business concern meets the
requirements of that contracting preference.'' (emphasis added). The
Federal Circuit found that the phrase ``or any other provision of law''
by its terms encompasses the JWOD. Therefore, the Federal Circuit found
that where a product or service is on the Procurement List and
ordinarily would result in the contract being awarded to a nonprofit
qualified under the JWOD, 38 U.S.C. 8127(d) would require VA to apply
the VA Rule of Two before awarding a contract to a qualified nonprofit
organization.
VA provides notice that the agency has issued a class deviation
from VA Acquisition Regulation (VAAR) Part 808--Required Sources of
Supplies and Services on May 20, 2019. The class deviation from the
VAAR supersedes and effectively updates the language previously set
forth in Class Deviation from 808.002, Priorities for Use of Mandatory
Government Sources, dated February 9, 2018. On May 20, 2019, the United
States Court of Appeals for the Federal Circuit (the Federal Circuit)
issued a mandate effectuating the October 17, 2018 decision in PDS
Consultants, Inc., v. The United States, Winston-Salem Industries for
the Blind, (PDS Consultants) and creating a binding circuit precedent
which necessitated immediate policy change. Accordingly, the class
deviation authorizes contracting officers to deviate from VAAR 808.002
and 808.603 to reflect language consistent with the decision of the
Federal Circuit.
Specifically, the class deviation requires VA contracting officers
to apply the VA Rule of Two, as implemented in VAAR subpart 819.70,
before awarding a contract to a qualified nonprofit organization under
the Javits-Wagner O'Day Act (JWOD) or making a contract award to
Federal Prison Industries, Inc. (FPI). The deviation clarifies that if
VA is unable to award to a Vendor Information Pages (VIP)-listed and
verified service-disabled veteran-owned small business (SDVOSB) or a
veteran-owned small business (VOSB) using the procedures set forth in
VAAR subpart 819.70, AbilityOne nonprofit organization and FPI would
retain their mandatory source status.
VA has determined that this publication in the Federal Register is
necessary to make conforming edits to the CFR in order to clarify
existing requirements to both the agency's acquisition workforce and
industry stakeholders.
This document provides a comment period of 30 days in which
commenters may address VA's approach to implementing the Federal
Circuit mandate, as set forth in the class deviation and the conforming
amendments to the CFR set forth in this publication. VA believes 30
days is sufficient to provide comments given the litigation history and
the information being requested. As discussed above, the Federal
Circuit's mandate required that the agency's acquisition workforce
immediately comply with the binding precedent. This demonstrates that a
delay of the effective date of the rule on the public would be
unnecessary. Accordingly, the Secretary finds good cause to dispense
with the opportunity for advanced notice and opportunity for public
comment and to publish this temporary rule with an effective date of
June 24, 2019.
Executive Orders 12866
VA has examined the economic, interagency, budgetary, legal, and
policy implications of this regulatory action, and it has been
determined not be a significant regulatory action under E.O. 12866.
Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. Section 801 et
seq.), the Office of Information and Regulatory Affairs designated this
rule as not a major rule, as defined by 5 U.S.C. Section 804(2).
Signing Authority
The Secretary of Veterans Affairs, or designee, 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 June 13, 2019, for publication.
Dated: June 18, 2019.
Jeffrey M. Martin,
Assistant Director, Office of Regulation Policy & Management, Office of
the Secretary, Department of Veterans Affairs.
For the reasons set forth in the preamble, we amend 48 CFR part 808
as follows:
PART 808--REQUIRED SOURCES OF SUPPLIES AND SERVICES
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1. The authority citation for part 808 continues to read as follows:
Authority: 38 U.S.C. 8127 and 8128; 40 U.S.C. 121(c) and (d);
and 48 CFR 1.301-1.304.
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2. In Sec. 808.002, revise the section heading and paragraphs (a) and
(b) to read as follows:
Sec. 808.002 Priorities for use of mandatory Government sources.
(a) Sources. Contracting activities shall satisfy requirements for
supplies and services from or through the mandatory sources listed
below in descending order of priority:
(1) Supplies. (i) VA inventories including the VA supply stock
program (41 CFR 101-26.704) and VA excess.
(ii) Excess from other agencies (see FAR subpart 8.1).
(iii) Federal Prison Industries, Inc. (see VAAR 808.603). Prior to
considering award of a contract to Federal Prison Industries, Inc,
contracting officers shall apply the VA Rule of Two to determine
whether a requirement should be awarded to veteran-owned small
businesses under the authority of 38 U.S.C. 8127-28, by using the
preferences and priorities in subpart 819.70. If an award is not made
to a VIP-listed and verified service disabled veteran-owned small
business (SDVOSB)/veteran-owned small business (VOSB) as provided in
subpart 819.70, FPI remains a mandatory source in accordance with FAR
8.002.
(iv) Supplies that are on the Procurement List maintained by the
Committee for Purchase from People Who Are Blind or Severely Disabled,
known as AbilityOne (FAR subpart 8.7). Prior to considering award of a
contract under the AbilityOne program, contracting officers shall apply
the VA Rule of Two to determine whether a requirement should be awarded
to veteran-owned small businesses under the authority of 38 U.S.C.
8127-28, by using the preferences and priorities in subpart 819.70. If
an award is not made to a VIP-listed and verified SDVOSB/VOSB as
provided in subpart 819.70, AbilityOne remains a mandatory source in
accordance with FAR 8.002. All new VA requirements must be approved by
the Chief Acquisition Officer, via the Senior Procurement Executive,
before contacting the Committee to request addition of new items to the
Procurement List.
(v) Wholesale supply sources, such as stock programs of the General
Services Administration (GSA) (see 41 CFR 101-
[[Page 29391]]
26.3), the Defense Logistics Agency (see 41 CFR 101-26.6), the
Department of Veterans Affairs (see 41 CFR 101-26.704), and military
inventory control points.
(2) Services that are on the Procurement List maintained by the
Committee for Purchase from People Who Are Blind or Severely Disabled,
known as AbilityOne (FAR subpart 8.7). Prior to considering award of a
contract under the AbilityOne program, contracting officers shall apply
the VA Rule of Two to determine whether a requirement should be awarded
to veteran-owned small businesses under the authority of 38 U.S.C.
8127-28, by using the preferences and priorities in subpart 819.70. If
an award is not made to a VIP-listed and verified SDVOSB/VOSB as
provided in subpart 819.70, AbilityOne remains a mandatory source in
accordance with FAR 8.002. All new VA requirements must be approved by
the Chief Acquisition Officer, via the Senior Procurement Executive,
before contacting the Committee to request addition of new items to the
Procurement List.
(b) Unusual and compelling urgency. The contracting officer may use
a source other than those listed in paragraph (a) of this section when
the need for supplies or services is of an unusual and compelling
urgency (see FAR 6.302-2, 8.405-6 and 13.106-1 for justification
requirements).
* * * * *
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3. Revise Sec. 808.603 to read as follows:
Sec. 808.603 Purchasing priorities.
A waiver from FPI is not needed when comparable supplies and
services are procured in accordance with subpart 819.70.
[FR Doc. 2019-13217 Filed 6-21-19; 8:45 am]
BILLING CODE 8320-01-P