[Federal Register: April 25, 2000 (Volume 65, Number 80)]
[Rules and Regulations]
[Page 24317-24320]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25ap00-11]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 16, and 37
[FAC 97-17; FAR Case 1999-014; Item I]
RIN 9000-AI53
Federal Acquisition Regulation; Competition Under Multiple Award
Contracts
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 agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to clarify what
contracting officers should consider when planning for multiple awards
of indefinite-delivery contracts and clarify how orders should be
placed against the resultant contracts.
DATES: Effective Date: April 25, 2000.
Applicability Date: The FAR, as amended by this rule, is applicable
to solicitations issued on or after April 25, 2000.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Mr. Ralph De Stefano, Procurement Analyst, at (202)
501-1758. Please cite FAC 97-17, FAR case 1999-014.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule, FAR case 1999-014, amends FAR Part 16 to provide
guidance on multiple award task and delivery order contracts and amends
FAR Part 37 to delete a definition and amends FAR Part 2 to insert the
definition that was deleted from Part 37. FAR case 1999-014 is one of
two cases that implement subsections 804(a) and (b) of the National
Defense Authorization Act for Fiscal Year 2000 (Pub. L. 106-65). The
other case, FAR Case 1999-303, Task Order and Delivery Order Contracts,
has been developed and promulgation is awaiting final review and
analysis of the Report Number GAO/NSIAD-00-56, B-281493, March 20,
2000, recently issued by the GAO regarding multiple award contracts.
The Councils will evaluate the GAO report, in conjunction with the
Office of Federal Procurement Policy, to determine what additional
changes are needed.
FAR case 1999-014--
Clarifies what contracting officers should consider when
planning for multiple awards of indefinite-delivery contracts and
clarifies how orders should be placed against the resultant contracts;
Requires that all awardees be given a fair opportunity to
compete on every task or delivery order placed under multiple-award
contracts, unless a specific exception applies;
Emphasizes key things the contracting officer should
consider when placing orders, including streamlined procedures; and
Reorganizes and revises the FAR text for ease of use.
The rule is written using plain language in accordance with the
White House memorandum, Plain Language in Government Writing, dated
June 1, 1998.
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 64 FR 70158, December 15, 1999. Fourteen respondents
provided public comments. We considered twelve public comments in
finalizing the rule. We received the other two public comments more
than two weeks after the closing date for comments and after the ad hoc
committee had analyzed public comments. We did not consider these
comments in the finalization of the rule.
This rule was not subject to Office of Management and Budget 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
[[Page 24318]]
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 only clarifies
what the contracting officer should consider when planning for and
placing orders under multiple award contracts.
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.
3501, et seq.
List of Subjects in 48 CFR Parts 2, 16, and 37
Government procurement.
Dated: April 13, 2000.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 16, and 37 as
set forth below:
1. The authority citation for 48 CFR parts 2, 16, and 37 continues
to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
2. Amend section 2.101 by adding, in alphabetical order, the
definition ``Advisory and assistance services'' to read as follows:
2.101 Definitions.
* * * * *
Advisory and assistance services means those services provided
under contract by nongovernmental sources to support or improve:
Organizational policy development; decision-making; management and
administration; program and/or project management and administration;
or R&D activities. It can also mean the furnishing of professional
advice or assistance rendered to improve the effectiveness of Federal
management processes or procedures (including those of an engineering
and technical nature). In rendering the foregoing services, outputs may
take the form of information, advice, opinions, alternatives, analyses,
evaluations, recommendations, training and the day-to-day aid of
support personnel needed for the successful performance of ongoing
Federal operations. All advisory and assistance services are classified
in one of the following definitional subdivisions:
(1) Management and professional support services, i.e., contractual
services that provide assistance, advice or training for the efficient
and effective management and operation of organizations, activities
(including management and support services for R&D activities), or
systems. These services are normally closely related to the basic
responsibilities and mission of the agency originating the requirement
for the acquisition of services by contract. Included are efforts that
support or contribute to improved organization of program management,
logistics management, project monitoring and reporting, data
collection, budgeting, accounting, performance auditing, and
administrative technical support for conferences and training programs.
(2) Studies, analyses and evaluations, i.e., contracted services
that provide organized, analytical assessments/evaluations in support
of policy development, decision-making, management, or administration.
Included are studies in support of R&D activities. Also included are
acquisitions of models, methodologies, and related software supporting
studies, analyses or evaluations.
(3) Engineering and technical services, i.e., contractual services
used to support the program office during the acquisition cycle by
providing such services as systems engineering and technical direction
(see 9.505-1(b)) to ensure the effective operation and maintenance of a
weapon system or major system as defined in OMB Circular No. A-109 or
to provide direct support of a weapon system that is essential to
research, development, production, operation or maintenance of the
system.
* * * * *
PART 16--TYPES OF CONTRACTS
3. Revise section 16.500 to read as follows:
16.500 Scope of subpart.
(a) This subpart prescribes policies and procedures for making
awards of indefinite-delivery contracts and establishes a preference
for making multiple awards of indefinite-quantity contracts.
(b) This subpart does not limit the use of other than competitive
procedures authorized by part 6.
(c) Nothing in this subpart restricts the authority of the General
Services Administration (GSA) to enter into schedule, multiple award,
or task or delivery order contracts under any other provision of law.
Therefore, GSA regulations and the coverage for the Federal Supply
Schedule program in subpart 8.4 and part 38 take precedence over this
subpart.
(d) The statutory multiple award preference implemented by this
subpart does not apply to architect-engineer contracts subject to the
procedures in subpart 36.6. However, agencies are not precluded from
making multiple awards for architect-engineer services using the
procedures in this subpart, provided the selection of contractors and
placement of orders are consistent with subpart 36.6.
16.501-1 [Amended]
4. Amend section 16.501-1 by removing the definition ``Advisory and
assistance services''.
5. Revise section 16.504 to read as follows:
16.504 Indefinite-quantity contracts.
(a) Description. An indefinite-quantity contract provides for an
indefinite quantity, within stated limits, of supplies or services
during a fixed period. The Government places orders for individual
requirements. Quantity limits may be stated as number of units or as
dollar values.
(1) The contract must require the Government to order and the
contractor to furnish at least a stated minimum quantity of supplies or
services. In addition, if ordered, the contractor must furnish any
additional quantities, not to exceed the stated maximum. The
contracting officer should establish a reasonable maximum quantity
based on market research, trends on recent contracts for similar
supplies or services, survey of potential users, or any other rational
basis.
(2) To ensure that the contract is binding, the minimum quantity
must be more than a nominal quantity, but it should not exceed the
amount that the Government is fairly certain to order.
(3) The contract may also specify maximum or minimum quantities
that the Government may order under each task or delivery order and the
maximum that it may order during a specific period of time.
(4) A solicitation and contract for an indefinite quantity must--
(i) Specify the period of the contract, including the number of
options and the period for which the Government may extend the contract
under each option;
(ii) Specify the total minimum and maximum quantity of supplies or
services the Government will acquire under the contract;
(iii) Include a statement of work, specifications, or other
description, that reasonably describes the general scope,
[[Page 24319]]
nature, complexity, and purpose of the supplies or services the
Government will acquire under the contract in a manner that will enable
a prospective offeror to decide whether to submit an offer;
(iv) State the procedures that the Government will use in issuing
orders, including the ordering media, and, if multiple awards may be
made, state the procedures and selection criteria that the Government
will use to provide awardees a fair opportunity to be considered for
each order (see 16.505(b)(1));
(v) Include the name, address, telephone number, facsimile number,
and e-mail address of the agency task and delivery order ombudsman (see
16.505(b)(5)) if multiple awards may be made;
(vi) Include a description of the activities authorized to issue
orders; and
(vii) Include authorization for placing oral orders, if
appropriate, provided that the Government has established procedures
for obligating funds and that oral orders are confirmed in writing.
(b) Application. Contracting officers may use an indefinite-
quantity contract when the Government cannot predetermine, above a
specified minimum, the precise quantities of supplies or services that
the Government will require during the contract period, and it is
inadvisable for the Government to commit itself for more than a minimum
quantity. The contracting officer should use an indefinite-quantity
contract only when a recurring need is anticipated.
(c) Multiple award preference--(1) Planning the acquisition. (i)
Except for indefinite-quantity contracts for advisory and assistance
services as provided in paragraph (c)(2) of this section, the
contracting officer must, to the maximum extent practicable, give
preference to making multiple awards of indefinite-quantity contracts
under a single solicitation for the same or similar supplies or
services to two or more sources.
(ii)(A) The contracting officer must determine whether multiple
awards are appropriate as part of acquisition planning. The contracting
officer must avoid situations in which awardees specialize exclusively
in one or a few areas within the statement of work, thus creating the
likelihood that orders in those areas will be awarded on a sole-source
basis; however, each awardee need not be capable of performing every
requirement as well as any other awardee under the contracts. The
contracting officer should consider the following when determining the
number of contracts to be awarded:
(1) The scope and complexity of the contract requirement.
(2) The expected duration and frequency of task or delivery orders.
(3) The mix of resources a contractor must have to perform expected
task or delivery order requirements.
(4) The ability to maintain competition among the awardees
throughout the contracts' period of performance.
(B) The contracting officer must not use the multiple award
approach if--
(1) Only one contractor is capable of providing performance at the
level of quality required because the supplies or services are unique
or highly specialized;
(2) Based on the contracting officer's knowledge of the market,
more favorable terms and conditions, including pricing, will be
provided if a single award is made;
(3) The expected cost of administration of multiple contracts
outweighs the expected benefits of making multiple awards;
(4) The projected orders are so integrally related that only a
single contractor can reasonably perform the work;
(5) The total estimated value of the contract is less than the
simplified acquisition threshold; or
(6) Multiple awards would not be in the best interests of the
Government.
(C) The contracting officer must document the decision whether or
not to use multiple awards in the acquisition plan or contract file.
The contracting officer may determine that a class of acquisitions is
not appropriate for multiple awards (see subpart 1.7).
(2) Contracts for advisory and assistance services. (i) Except as
provided in paragraph (c)(2)(ii) of this section, if an indefinite-
quantity contract for advisory and assistance services exceeds 3 years
and $10 million, including all options, the contracting officer must
make multiple awards unless--
(A) The contracting officer or other official designated by the
head of the agency determines in writing, as part of acquisition
planning, that multiple awards are not practicable. The contracting
officer or other official must determine that only one contractor can
reasonably perform the work because either the scope of work is unique
or highly specialized or the tasks so integrally related;
(B) The contracting officer or other official designated by the
head of the agency determines in writing, after the evaluation of
offers, that only one offeror is capable of providing the services
required at the level of quality required; or
(C) Only one offer is received.
(ii) The requirements of paragraph (c)(2)(i) of this section do not
apply if the contracting officer or other official designated by the
head of the agency determines that the advisory and assistance services
are incidental and not a significant component of the contract.
6. Revise section 16.505 to read as follows:
16.505 Ordering.
(a) General. (1) The contracting officer does not synopsize orders
under indefinite-delivery contracts.
(2) Individual orders must clearly describe all services to be
performed or supplies to be delivered. Orders must be within the scope,
period, and maximum value of the contract.
(3) Performance-based work statements must be used to the maximum
extent practicable, if the contract is for services (see 37.102(a)).
(4) Orders may be placed by using any medium specified in the
contract.
(5) Orders placed under indefinite-delivery contracts must contain
the following information:
(i) Date of order.
(ii) Contract number and order number.
(iii) For supplies and services, contract item number and
description, quantity, and unit price or estimated cost or fee.
(iv) Delivery or performance schedule.
(v) Place of delivery or performance (including consignee).
(vi) Any packaging, packing, and shipping instructions.
(vii) Accounting and appropriation data.
(viii) Method of payment and payment office, if not specified in
the contract (see 32.1110(e)).
(6) No protest under subpart 33.1 is authorized in connection with
the issuance or proposed issuance of an order under a task-order
contract or delivery-order contract, except for a protest on the
grounds that the order increases the scope, period, or maximum value of
the contract (10 U.S.C. 2304c(d) and 41 U.S.C. 253j(d)).
(b) Orders under multiple award contracts--(1) Fair opportunity.
(i) The contracting officer must provide each awardee a fair
opportunity to be considered for each order exceeding $2,500 issued
under multiple delivery-order contracts or multiple task-order
contracts, except as provided for in paragraph (b)(2) of this section.
(ii) The contracting officer may exercise broad discretion in
developing
[[Page 24320]]
appropriate order placement procedures. The contracting officer should
keep submission requirements to a minimum. Contracting officers may use
streamlined procedures, including oral presentations. In addition, the
contracting officer need not contact each of the multiple awardees
under the contract before selecting an order awardee if the contracting
officer has information available to ensure that each awardee is
provided a fair opportunity to be considered for each order. The
competition requirements in part 6 and the policies in subpart 15.3 do
not apply to the ordering process. However, the contracting officer
must--
(A) Develop placement procedures that will provide each awardee a
fair opportunity to be considered for each order and that reflect the
requirement and other aspects of the contracting environment;
(B) Not use any method (such as allocation or designation of any
preferred awardee) that would not result in fair consideration being
given to all awardees prior to placing each order;
(C) Tailor the procedures to each acquisition;
(D) Include the procedures in the solicitation and the contract;
and
(E) Consider price or cost under each order as one of the factors
in the selection decision.
(iii) The contracting officer should consider the following when
developing the procedures:
(A)(1) Past performance on earlier orders under the contract,
including quality, timeliness and cost control.
(2) Potential impact on other orders placed with the contractor.
(3) Minimum order requirements.
(B) Formal evaluation plans or scoring of quotes or offers are not
required.
(2) Exceptions to the fair opportunity process. The only exceptions
to the requirement to provide each awardee a fair opportunity to be
considered for each order exceeding $2,500 are--
(i) The agency need for the supplies or services is so urgent that
providing a fair opportunity would result in unacceptable delays;
(ii) Only one awardee is capable of providing the supplies or
services required at the level of quality required because the supplies
or services ordered are unique or highly specialized;
(iii) The order must be issued on a sole-source basis in the
interest of economy and efficiency as a logical follow-on to an order
already issued under the contract, provided that all awardees were
given a fair opportunity to be considered for the original order; or
(iv) It is necessary to place an order to satisfy a minimum
guarantee.
(3) Pricing orders. If the contract did not establish the price for
the supply or service, the contracting officer must establish prices
for each order using the policies and methods in subpart 15.4.
(4) Decision documentation for orders. The contracting officer must
document in the contract file the rationale for placement and price of
each order.
(5) Task and Delivery Order Ombudsman. The head of the agency must
designate a task-order contract and delivery-order contract ombudsman.
The ombudsman must review complaints from contractors and ensure they
are afforded a fair opportunity to be considered, consistent with the
procedures in the contract. The ombudsman must be a senior agency
official who is independent of the contracting officer and may be the
agency's competition advocate.
(c) Limitation on ordering period for task-order contracts for
advisory and assistance services. (1) Except as provided for in
paragraphs (c)(2) and (c)(3), the ordering period of a task-order
contract for advisory and assistance services, including all options or
modifications, normally may not exceed 5 years.
(2) The 5-year limitation does not apply when--
(i) A longer ordering period is specifically authorized by a
statute; or
(ii) The contract is for an acquisition of supplies or services
that includes the acquisition of advisory and assistance services and
the contracting officer, or other official designated by the head of
the agency, determines that the advisory and assistance services are
incidental and not a significant component of the contract.
(3) The contracting officer may extend the contract on a sole-
source basis only once for a period not to exceed 6 months if the
contracting officer, or other official designated by the head of the
agency, determines that--
(i) The award of a follow-on contract is delayed by circumstances
that were not reasonably foreseeable at the time the initial contract
was entered into; and
(ii) The extension is necessary to ensure continuity of services,
pending the award of the follow-on contract.
7. Amend section 16.506--
a. In paragraphs (a), (b), (c), (d)(1), and (e) by removing the
words ``The contracting officer shall insert'' and adding, in their
place, the word ``Insert'';
b. In paragraphs (d)(2), (d)(3), and (d)(4) by removing the words
``the contracting officer shall''; and
c. By revising paragraphs (d)(5), (f), and (g) to read as follows:
16.506 Solicitation provisions and contract clauses.
* * * * *
(d) * * *
(5) If the contract--
(i) Includes subsistence for Government use and resale in the same
schedule and similar products may be acquired on a brand-name basis;
and
(ii) Involves a partial small business set-aside, use the clause
with its Alternate IV.
* * * * *
(f) Insert the provision at 52.216-27, Single or Multiple Awards,
in solicitations for indefinite-quantity contracts that may result in
multiple contract awards. Modify the provision to specify the estimated
number of awards. Do not use this provision for advisory and assistance
services contracts that exceed 3 years and $10 million (including all
options).
(g) Insert the provision at 52.216-28, Multiple Awards for Advisory
and Assistance Services, in solicitations for task-order contracts for
advisory and assistance services that exceed 3 years and $10 million
(including all options), unless a determination has been made under
16.504(c)(2)(i)(A). Modify the provision to specify the estimated
number of awards.
PART 37--SERVICE CONTRACTING
37.201 Definition.
8. Amend section 37.201 by revising the section heading to read as
set forth above, and by removing the definition ``Advisory and
assistance services''.
[FR Doc. 00-10131 Filed 4-24-00; 8:45 am]
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