[Federal Register Volume 84, Number 191 (Wednesday, October 2, 2019)]
[Proposed Rules]
[Pages 52425-52428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20798]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 12, 13, 15, 16, and 37
[FAR Case 2018-016; Docket No. FAR-2018-0016, Sequence No. 1]
RIN 9000-AN75
Federal Acquisition Regulation: Lowest Price Technically
Acceptable Source Selection Process
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 a section of the John S.
McCain National Defense Authorization Act for Fiscal Year 2019, which
specifies the criteria that must be met in order to include lowest
price technically acceptable (LPTA) source selection criteria in a
solicitation; and requires procurements predominantly for the
acquisition of certain services and supplies to avoid the use of LPTA
source selection criteria, to the maximum extent practicable.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat Division at one of the addresses shown below on
or before December 2, 2019 to be considered in the formation of the
final rule.
ADDRESSES: Submit comments in response to FAR Case 2018-016 by any of
the following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by searching for ``FAR Case
2018-016''. Select the link ``Comment Now'' that corresponds with ``FAR
Case 2018-016''. Follow the instructions provided on the screen. Please
include your name, company name (if any), and ``FAR Case 2018-016'' on
your attached document.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), ATTN: Lois Mandell, 1800 F Street NW, 2nd
Floor, Washington, DC 20405.
Instructions: Please submit comments only and cite ``FAR Case 2018-
016'', 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. To confirm receipt of your comment(s), please check
www.regulations.gov, approximately two to three days after submission
to verify posting (except allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Mr. Michael O. Jackson, Procurement
Analyst, at 202-208-4949 or [email protected] for clarification
of content. For information pertaining to status or publication
schedules, contact the Regulatory Secretariat Division at 202-501-4755.
Please cite ``FAR Case 2018-016''.
SUPPLEMENTARY INFORMATION:
I. Background
Section 880 of the John S. McCain National Defense Authorization
Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232, 41 U.S.C. 3701
Note) makes it the policy of the Government to avoid using Lowest Price
Technically Acceptable (LPTA) source selection criteria in
circumstances that would
[[Page 52426]]
deny the Government the benefits of cost and technical tradeoffs in the
source selection process. The section requires that LPTA source
selection criteria be used only when: (1) An executive agency is able
to comprehensively and clearly describe the minimum requirements
expressed in terms of performance objectives, measures, and standards
that will be used to determine acceptability of offers; (2) the
executive agency would realize no, or minimal, value from a contract
proposal exceeding the minimum technical or performance requirements
set forth in the request for proposal; (3) the proposed technical
approaches will require no, or minimal, subjective judgment by the
source selection authority as to the desirability of one offeror's
proposal versus a competing proposal; (4) the executive agency has a
high degree of confidence that a review of technical proposals of
offerors other than the lowest bidder would not result in the
identification of factors that could provide value or benefit to the
executive agency; (5) the contracting officer has included a
justification for the use of an LPTA evaluation methodology in the
contract file; and (6) the executive agency has determined that the
lowest price reflects total costs, including for operations and
support.
Additionally, section 880 requires that the use of LPTA source
selection criteria be avoided, to the maximum extent practicable, in
procurements that are predominantly for the acquisition of: information
technology services; cybersecurity services; systems engineering and
technical assistance services; advanced electronic testing; audit or
audit readiness services; health care services and records;
telecommunications devices and services; or other knowledge-based
professional services; personal protective equipment; or, knowledge-
based training or logistics services in contingency operations or other
operations outside the United States, including in Afghanistan or Iraq.
II. Discussion and Analysis
This proposed rule would require contracting officers to: ensure
procurements meet the criteria of section 880 before including LPTA
source selection criteria in solicitations; document the contract file
with a justification for the use of the LPTA source selection process,
when applicable; and, to avoid, to the maximum extent practicable, the
use of LPTA source selection criteria in procurements that are
predominantly for the supplies and services identified in section 880.
This rule does not address the applicability of section 880 to the
Federal Supply Schedules Program (Schedules Program). GSA will
separately address the applicability of section 880 to the Schedules
Program.
In addition, section 880 does not apply to DoD. Instead, section
813 of the NDAA for FY 2017 (10 U.S.C. 2305 Note) and section 822 of
the NDAA for FY 2018 (10 U.S.C. 2305 Note) establish a similar, but not
the same, set of criteria for DoD procurements to meet in order to use
LPTA source selection criteria in solicitations. These sections are
being implemented in a separate Defense Federal Acquisition Regulation
Supplement case (2018-D010).
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Items, Including Commercially
Available Off-the-Shelf (COTS) Items
This proposed rule does not create any new provisions or clauses,
nor does it change the applicability of any existing provisions or
clauses included in solicitations and contracts valued at or below the
SAT, or for commercial items, including COTS items.
IV. 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 not a significant regulatory action and, therefore, was not
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.
V. Executive Order 13771
The rule is not subject to E.O. 13771, because this rule is not a
significant regulatory action under E.O. 12866.
VI. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this 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.
However, an initial regulatory flexibility analysis has been performed
and is summarized as follows:
The Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA) are
proposing to revise the Federal Acquisition Regulation (FAR) to:
Specify the criteria that must be met in order to
include lowest price technically acceptable (LPTA) source selection
criteria in a solicitation; and,
Require procurements predominantly for the acquisition
of certain services or supplies to avoid the use of LPTA source
selection criteria, to the maximum extent practicable.
The objective of the rule is to avoid using LPTA source
selection criteria in circumstances that would deny the Government
the benefits of cost and technical tradeoffs in the source selection
process. The legal basis for the rule is section 880 of the John S.
McCain National Defense Authorization Act (NDAA) for Fiscal Year
(FY) 2019 (Pub. L. 115-232). The rule does not cover DoD, which has
already been covered by section 813 of the NDAA for FY 2017 and
section 822 of the NDAA for FY 2018.
DoD, GSA, and NASA do not expect this 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. The
rule primarily affects internal Government requirements
determination decisions, acquisition strategy decisions, and
contract file documentation requirements. The Government does not
collect data on the total number of solicitations issued on an
annual basis that do or do not specify the use of the LPTA source
selection process. However, the Federal Procurement Data System
(FPDS) provides the following information for fiscal year 2018:
Federal competitive contracts and orders awarded using
FAR parts 13, 15, or 16.5 procedures. In FY 2018, the Federal
Government, excluding DoD, awarded approximately 82,337 new
contracts and orders using the competitive procedures of FAR 13, 15,
or 16.5. This data excludes acquisitions for the supply/service
categories identified in section 880(c) of the NDAA for FY 2019. Of
the 82,337 contracts and orders, approximately 69 percent (or 56,622
contracts and orders) were awarded to approximately 27,029 unique
small businesses. It is important to note that FPDS does not collect
data on solicitations, but does collect information on competitively
awarded contracts using various FAR procedures. Therefore, this data
represents contracts that were awarded using LPTA and tradeoff
source selection procedures.
Federal competitive contracts and orders awarded for
certain services and supplies. In FY 2018, the Federal Government,
excluding DoD, awarded approximately 22,581 new contracts and orders
potentially for the supplies and services identified in section
880(c) of the NDAA for FY 2019 using the competitive procedures of
FAR parts 13, 15, and 16.5, of which approximately 63 percent (or
14,285 contracts and orders) were awarded to approximately 10,129
unique small businesses.
The proposed rule does not impose any Paperwork Reduction Act
reporting or
[[Page 52427]]
recordkeeping requirements on any small entities. The rule may
impact some small businesses. Some offerors may need to change the
structure of their quotes or offers to conform to instructions and
corresponding evaluation criteria in solicitations that use tradeoff
source selection criteria, as LPTA source selection criteria is now
unavailable for use in some circumstances. This impact, which
represents the incremental difference between preparing a noncomplex
proposal to be evaluated using LPTA criteria and preparing the
additional information necessary to evaluate a proposal using
tradeoff criteria, is expected to be minimal.
The proposed rule does not duplicate, overlap, or conflict with
any other Federal rules.
There are no known significant alternative approaches to the
proposed rule that would meet the proposed objectives.
The Regulatory Secretariat has submitted a copy of the IRFA to the
Chief Counsel for Advocacy of the Small Business Administration. A copy
of the IRFA may be obtained from the Regulatory Secretariat. DoD, GSA,
and NASA invite comments from small business 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 this rule
consistent with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAR Case 2018-016) in
correspondence.
VII. Paperwork Reduction Act
The 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 Parts 12, 13, 15, 16, and 37
Government procurement.
William F. Clark,
Director,
Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR parts
12, 13, 15, 16 and 37 as set forth below:
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1. The authority citation for 48 CFR parts 12, 13, 15, 16 and 37
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 12--ACQUISITION OF COMMERCIAL ITEMS
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2. Revise section 12.203 by redesignating the text as paragraph (a) and
adding paragraph (b) to read as follows:
12.203 Procedures for solicitation, evaluation, and award.
* * * * *
(b) Contracting officers shall ensure the criteria at 15.101-2(c)
are met when using the lowest price technically acceptable source
selection process.
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
0
3. Amend section 13.106-1 by adding paragraphs (a)(2)(i) and (a)(2)(ii)
to read as follows:
13.106-1 Soliciting competition.
(a) * * *
(2) * * *
(i) Except for DoD, contracting officers shall ensure the criteria
at 15.101-2(c)(1)-(5) are met when using the lowest price technically
acceptable source selection process.
(ii) Except for DoD, avoid using the lowest price technically
acceptable source selection process to acquire certain supplies and
services in accordance with 15.101-2(d).
* * * * *
0
4. Amend section 13.106-3 by--
0
a. In paragraph (b)(3), removing ``statements--'' and adding
``statements, when applicable--'' in its place;
0
b. In paragraph (b)(3)(i), removing ``; or'' and adding ``;'' in its
place;
0
c. In paragraph (b)(3)(ii), removing ``.'' and adding ``; and''
0
d. Adding paragraph (b)(3)(iii).
The addition reads as follows:
13.106-3 Award and documentation.
* * * * *
(b) * * *
(3) * * *
(iii) Except for DoD, when using lowest price technically
acceptable source selection process, justifying the use of such
process.
* * * * *
PART 15--CONTRACTING BY NEGOTIATION
0
5. Amend section 15.101-2 by adding paragraphs (c) and (d) to read as
follows:
15.101-2 Lowest price technically acceptable source selection
process.
* * * * *
(c) Except for DoD, in accordance with section 880 of the National
Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232, 41
U.S.C. 3701 Note), the lowest price technically acceptable source
selection process shall only be used when--
(1) The agency can comprehensively and clearly describe the minimum
requirements in terms of performance objectives, measures, and
standards that will be used to determine the acceptability of offers;
(2) The agency would realize no, or minimal, value from a proposal
that exceeds the minimum technical or performance requirements;
(3) The agency believes the technical proposals will require no, or
minimal, subjective judgment by the source selection authority as to
the desirability of one offeror's proposal versus a competing proposal;
(4) The agency has a high degree of confidence that reviewing the
technical proposals of all offerors would not result in the
identification of characteristics that could provide value or benefit
to the agency;
(5) The agency determined that the lowest price reflects the total
cost, including operation and support, of the product(s) or service(s)
being acquired; and
(6) The contracting officer documents the contract file describing
the circumstances that justify the use of the lowest price technically
acceptable source selection process.
(d) Except for DoD, in accordance with section 880 of the National
Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232, 41
U.S.C. 3701 Note), contracting officers shall avoid, to the maximum
extent practicable, using the lowest price technically acceptable
source selection process in the case of a procurement that is
predominantly for the acquisition of--
(1) Information technology services, cybersecurity services,
systems engineering and technical assistance services, advanced
electronic testing, audit or audit readiness services, health care
services and records, telecommunications devices and services, or other
knowledge-based professional services;
(2) Personal protective equipment; or
(3) Knowledge-based training or logistics services in contingency
operations or other operations outside the United States, including in
Afghanistan or Iraq.
PART 16--TYPES OF CONTRACTS
0
6. Amend section 16.505 by--
0
a. Removing from the end of paragraph (b)(1)(ii) ``must--'' and adding
``shall--'' in its place;
0
b. Removing from paragraph (b)(1)(ii)(D) ``contract; and'' and adding
``contract;'' in its place;
0
c. Removing from paragraph (b)(1)(ii)(E) ``decision.'' and adding
``decision;'' in its place;
0
d. Adding paragraphs (b)(1)(ii)(F) and (b)(1)(ii)(G); and
[[Page 52428]]
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e. Adding paragraph (b)(7)(iii).
The additions read as follows:
16.505 Ordering.
* * * * *
(b) * * *
(1) * * *
(ii) * * *
(F) Except for DoD, ensure the criteria at 15.101-2(c)(1)-(5) are
met when using the lowest price technically acceptable source selection
process; and
(G) Except for DoD, avoid using the lowest price technically
acceptable source selection process to acquire certain supplies and
services in accordance with 15.101-2(d).
* * * * *
(7) * * *
(iii) Except for DoD, the contracting officer shall document in the
contract file a justification for use of the lowest price technically
acceptable source selection process, when applicable.
* * * * *
PART 37--SERVICE CONTRACTING
0
7. Amend section 37.102 by adding paragraph (j) to read as follows:
37.102 Policy.
* * * * *
(j) Except for DoD, see 15.101-2(d) for limitations on the use of
the lowest price technically acceptable source selection process to
acquire certain services.
[FR Doc. 2019-20798 Filed 10-1-19; 8:45 am]
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