[Federal Register: March 19, 2010 (Volume 75, Number 53)]
[Rules and Regulations]
[Page 13416-13421]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19mr10-16]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 16
[FAC 2005-39; FAR Case 2008-006; Item IV; Docket 2008-0001, Sequence
25]
RIN 9000-AL05
Federal Acquisition Regulation; FAR Case 2008-006, Enhanced
Competition for Task- and Delivery-Order Contracts--Section 843 of the
Fiscal Year 2008 National Defense Authorization Act
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 adopted as final with
changes the interim rule amending the Federal Acquisition Regulation
(FAR) to implement Section 843, Enhanced Competition for Task and
Delivery Order Contracts, of the National Defense Authorization Act
(NDAA) for Fiscal Year 2008 (FY08) (Pub. L. 110-181). Section 843 of
the FY08 NDAA stipulates several requirements regarding enhancing
competition within Federal contracting.
DATES: Effective Date: April 19, 2010.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Mr. William Clark, Procurement Analyst, at (202) 219-1813. For
information pertaining to status or publication schedules, contact the
FAR Secretariat at (202) 501-4755. Please cite FAC 2005-39, FAR case
2008-006.
SUPPLEMENTARY INFORMATION:
A. Background
Section 843, Enhanced Competition for Task and Delivery Order
Contracts, of the FY08 NDAA includes several requirements regarding
enhancing competition within the Federal contracting framework. The
provisions of section 843 include:
(1) Limitation on single-award task- and delivery-order contracts
greater than $100 million;
(2) Enhanced competition for task and delivery orders in excess of
$5 million; and
(3) Restriction on protests in connection with issuance or proposed
issuance of a task- or delivery-order except for a protest on the
grounds that the order increases the scope, period, or maximum value of
the contract under which the order is issued, or a protest of an order
valued in excess of $10 million.
The interim rule was published in the Federal Register at 73 FR
54008 on September 17, 2008. The majority of the amendments to the FAR
were made at publication of the interim rule. The Councils believe
that, as a result of the interim rule, contracting offices will need
more time to: carefully consider single versus multiple awards for
task- or delivery-order contracts valued in excess of $100 million;
perform debriefings for orders over $5 million; and respond to and
defend against additional protests for orders over $10 million. The
public comments received resulted in several changes to the interim
rule.
Requirements contracts. The Councils amended the language at FAR
16.503(a) to clarify that a requirements contract is awarded to one
contractor. This change is made to dispel the implication at FAR
16.503(b)(2) that a requirements contract may be awarded to multiple
sources.
IDIQ contracts. The Councils also added language at FAR
16.504(c)(1)(ii)(D)(3)(i) to read that the requirement for a
determination for a single-award IDIQ contract greater than $100
million is in addition to any applicable requirements of FAR subpart
6.3. This change is made to clarify that the determination for a
single-award task- or delivery-order contract greater than $100 million
is required in addition to the justification and approval (J&A)
required by FAR subpart 6.3 when a procurement will be conducted as
other than full and open competition. The language in the interim rule
appears to suggest that a J&A pursuant to FAR subpart 6.3 is required
whenever you have a single award greater than $100 million, which is
not true when the procurement provides for full and open competition.
This change is not considered significant but merely a clarification of
the interim rule.
Architect-engineer contracts. Lastly, the Councils added language
at FAR 16.504(c)(1)(ii)(D)(3)(ii) to clarify that the agency-head
determination does not apply to architect-engineer task- or delivery-
order contracts awarded pursuant to FAR subpart 36.6.
Eight respondents submitted comments on the interim rule. The
comments are summarized below, with the corresponding responses.
Comment 1. ``Architect-Engineer Services Exception.''FAR 16.500(d)
states that the statutory multiple-award preference is not applicable
to the procurement of architect-engineer (A-E) services when such
services are procured in accordance with the procedures of FAR subpart
36.6. The FAR subpart 36.6 procedures will result in a single award to
the most highly qualified firm and it seems moot to obtain the head of
agency determination when procuring A-E services. The commenter
requests revision of FAR 16.504(c)(1)(ii)(D)(1) to add procurement of
an A-E contract pursuant to FAR subpart 36.3 as a fifth reason for an
agency-head determination to award a single-award contract that exceeds
$100 million.
Response: The Councils do not agree that a fifth reason should be
added to FAR 16.504(c)(1)(ii)(D)(1), as the list of conditions is
statutory. However, the Councils added language at FAR
16.504(c)(1)(ii)(D)(3)(ii) to clarify that
[[Page 13417]]
the requirement for an agency-head determination to award a single-
award task- or delivery-order contract over $100 million does not apply
to A-E task- or delivery-order contracts awarded in accordance with FAR
subpart 36.6.
Comment 2. ``Delegation of Determination.'' FAR
16.504(c)(1)(ii)(D)(1) requires the head of the agency to execute a
written determination for an award to a single source for a task- or
delivery-order contract in an amount estimated to exceed $100 million.
The commenter suggests that requiring the head of the agency to make
the determination, without allowing for any designee to perform the
function, is too high a level of approval than is necessary.
Response: The statute does not prohibit the delegation of this
authority. In accordance with FAR 1.108(b), delegation of authority,
each authority is delegable unless specifically stated otherwise. Each
agency can determine whether to establish an internal policy to
delegate the head of agency authority.
Comment 3. ``Competitive but only One Offer Received.'' One
commenter expresses concern that solicitations, which were issued using
competitive procedures where only one offer or one acceptable offer is
received, will also have to obtain a determination by the head of the
agency before award can be made. According to the commenter, if there
is no allowance for a designee to the agency-head approval, the
respondent recommends that the agency-head approval be required before
issuing solicitations for which the Government intends to make a single
award over $100 million.
Another commenter recommends another possible exception under FAR
16.504(c)(1)(ii)(D) would be when the competitive process, even though
conducted allowing for multiple awards, results in only one offer or
when a FAR part 15 style best value acquisition process results in only
one offeror remaining in the competitive range after discussions or
negotiations are concluded and/or when there is an indisputable best-
value winner as the result of an effective competitive process.
Response: The law requires that no task- or delivery-order contract
in an amount estimated to exceed $100 million (including all options)
may be awarded to a single source unless there is a written
determination by the head of the agency. The agency-head determination
is required when the single-source contract estimated to exceed $100
million will be awarded under competitive or non-competitive
procedures. As such, the Councils do not agree with the recommendation
to add another possible exception under FAR 16.504(c)(1)(ii)(D) for
when the competitive process results in only one offer or offeror.
Further, the rule neither prohibits the delegation of the agency
determination nor does it preclude the agency from making the
determination before issuing the solicitation.
Comment 4. ``Congressional Notification.'' According to one
commenter, getting the agency-head approval early in the process (and
dealing with associated congressional concerns early in the process) is
highly preferable to going through the time and expense of soliciting
offers, evaluating proposal(s), and then possibly having approval
withheld. The commenter states that refusing to make award to a vendor
who submits an acceptable proposal after it has put significant expense
into preparing a proposal may open up the Government to litigation and
additional bid and proposal costs, as well. Additionally, the commenter
states that requiring congressional notification (see FAR
16.504(c)(l)(ii)(D)(2)) under such conditions seems to be excessive for
a circumstance in which multiple awards were contemplated, but only one
award can be made.
Response: It is the agency's responsibility to determine when to
obtain the determination. Congressional notification is only required
within 30 days after the determination when citing public interest due
to exceptional circumstances as the reason for awarding a single-source
task- or delivery-order contract estimated to exceed $100 million.
Timely congressional notification should be included in agency approval
procedures under these circumstances.
Comment 5. ``Unusual and Compelling Urgency.'' In the event of a
FAR subpart 6.3 exception for a single contract award over $100 million
including an unusual and compelling urgency exception, the commenter
expresses concern about the time required and the burden to get the
head of agency determination.
Response: The agency-head determination for a single-award task- or
delivery-order contract over $100 million is required by law. In
instances where such a contract will be made using one of the
exceptions to full and open competition at FAR subpart 6.3, both the
applicable J&A and the agency-head determination are required. In
certain situations, an agency may consider establishing procedures to
process the J&A and the determination together.
Comment 6. ``Agency-Head Approval before Solicitation Issuance.''
Furthermore, if the determination is not delegable, the commenter
recommends that agency-head approval be required before issuing a
solicitation for which the Government intends to make a single award
over $100 million. The commenter states that early approval is
preferable prior to issuing the solicitation, thus saving significant
expense for bid and proposal costs and possible litigation if an award
is not made from the solicitation because the head of agency does not
approve a single-source award.
Response: The law requires that the head of the agency must make a
determination before award. It is the agency's responsibility to
determine at which stage prior to award this determination should be
accomplished.
Comment 7. ``Court of Federal Claims Override.'' One commenter
states that ``The rule should provide clear notice that the Government
Accountability Office (GAO) has sole jurisdiction over any bid protest
of task and delivery orders valued at more than $10 million under
multiple award indefinite-delivery indefinite-quantity (IDIQ) contracts
and that the bid protest limitations applicable to these orders extend
to agency decisions to invoke exceptions under the Competition in
Contract Act's (CICA) mandatory stay provisions (sometimes referred to
as a `CICA override') in connection with the award of a task- or
delivery-order.'' The commenter expresses concern that, regardless of
the section 843 provision giving the Comptroller General of the United
States exclusive jurisdiction over orders in excess of $10 million, the
Court of Federal Claims (COFC) may conclude that it has jurisdiction.
Response: The Councils do not have authority to circumscribe the
jurisdiction of the COFC. The rule does provide a notice that protest
of an order in excess of $10 million may only be filed with GAO in
accordance with the procedures at FAR 33.104.
Comment 8. ``Rule of Two for Small Business.'' Two commenters
request a clarification of this rule against the recent GAO decision in
Delex Systems, Inc. The commenters believe that the GAO decision is
based on a misinterpretation of the FAR and fails to adequately
consider that neither Congress nor the FAR Council provided any
indication in the detailed task- and delivery-order rules and
procedures that the rule of two for small business set-asides applies
to task and delivery orders. The commenters request a revision to FAR
16.505 to state explicitly that awards of task and
[[Page 13418]]
delivery orders under multiple-award IDIQ contracts are not subject to
the rule of two set out at FAR 19.502-2(b).
Response: The issue regarding the ``Rule of Two'' is considered to
be outside the scope of this case.
Comment 9. ``Part 16 Should Not Be Subject to Part 15 Standards.''
One commenter states that ``The rule should state explicitly that task-
and delivery-orders issued under IDIQ contracts are subject only to FAR
16.505 standards and procedures and not to FAR Part 15 standards.'' The
commenter requests a revision to clarify that the ordering processes
under FAR 16.505, as amended by the interim rule, are intended to be
streamlined and subject only to the procedures in that section. Also,
the commenter wants the FAR revised to explicitly state that
evaluations must satisfy those standards set out in FAR 16.505 and that
FAR part 15 standards do not apply. The commenter suggests that these
clarifications will prevent the use of the bid protest process to
conduct end runs around the clear regulatory intent of FAR subpart
16.5.
Response: The Councils do not agree. Where it is appropriate and
avoids repetition, references to the applicable FAR part 15 are stated
in FAR 16.505. Also, the Councils do not believe it is necessary to
revise FAR 16.505 to explicitly state that FAR part 15 standards do not
apply, as the statement at FAR 16.505(b)(1)(ii) that the competition
requirements in FAR subpart 15.3 do not apply to the ordering process
is sufficient.
Comment 10. ``Greater Flexibility and Exceptions Needed for Single-
Award IDIQ.'' Two commenters recommend that the rule's one-size-fits-
all approach should be revised to provide greater flexibility for
agencies to use single-award IDIQ contracts when appropriate. IDIQ
contracts are used for system-of-system efforts, performance-based
acquisitions, and other similar acquisitions because they provide
flexibility to fund the contracts incrementally or on a per-order
basis, as the performance term proceeds and/or to account for inclusion
of progressively more detailed technical requirements in the
prospective order's statement of work as the technology matures or the
term progresses.
Response: The law provides the conditions for awarding a single-
source task- or delivery-order contract in an amount estimated to
exceed $100 million. FAR 16.504(c)(1)(ii)(D) implements these statutory
conditions.
Comment 11. ``Eliminate 6.3 Procedures - Sole Source
Justification.'' Two commenters recommend that the interim rule should
be amended to delete FAR 16.504(c)(1)(ii)(D)(3) because the reference
to FAR subpart 6.3 does not explain why it is necessary in the rule.
Response: The Councils do not agree to delete FAR
16.504(c)(1)(ii)(D)(3). If a single-source task- or delivery-order
contract estimated to exceed $100 million will be awarded using other
than full and open competition, the contracting officer must comply
with FAR subpart 6.3 and FAR 16.504(c)(1)(ii)(D). FAR
16.504(c)(1)(ii)(D)(3) is amended to read that the requirement for a
determination for a single-award contract greater than $100 million is
in addition to any applicable requirements of FAR subpart 6.3. This
change is made to clarify that the determination for a single-award
task- or-delivery order contract greater than $100 million is required
in addition to the J&A required by FAR subpart 6.3 when a procurement
will be conducted as other than full and open competition. The language
in the interim rule could have been read to require that a J&A pursuant
to FAR subpart 6.3 is needed whenever there is a single-award greater
than $100 million, which is not true when the procurement provides for
full and open competition.
Comment 12. ``Eliminate Limitation on Single-Award Requirements
Contract.'' One commenter states that the rule should be revised to
eliminate the limitation on single-award requirements contracts because
this restriction is not mandated by section 843 and is inconsistent
with requirements contracts.
Response: The Councils do not agree that requirements contracts
should be excluded from the rule. Section 843 of FY08 NDAA applies to
task- or delivery-order contracts in an amount estimated to exceed $100
million (including all options). FAR 16.501-2(a) states: ``Pursuant to
10 U.S.C. 2304d and section 303K of the Federal Property and
Administrative Services Act of 1949, requirements contracts and
indefinite-quantity contracts are also known as delivery order
contracts or task order contracts.'' Per FAR 16.501-2(a), the Councils
applied the section 843 provisions to requirements contracts.
Comment 13. ``Use of Single-Award Approach when in Government's
Best Interest.'' The commenter recommends the use of a single-award
IDIQ whenever it would be in the Government's best interests. According
to the commenter, there are situations in which, although a second
contractor may be nominally capable of performing the task- and
delivery-orders under the IDIQ contract, the Government determines that
one contractor is superior both in technical merit and cost/price in
all areas under the anticipated scope of work. In those situations, it
does not make sense in terms of costs and efficiency to require the
contracting officer to issue two contracts when there will be no actual
competition for the task- and delivery-orders. The commenter states
that the contracting officer may be forced to make multiple awards
because the situation does not fit within any of the exceptions in FAR
16.504(c)(1)(ii)(D)(1).
Response: The condition at FAR 16.504(c)(1)(ii)(D)(1)(iv) allowing
the head of the agency to award a single-source contract estimated to
exceed $100 million because it is ``in the public interest'' due to
exceptional circumstances equates to the ``Government's best
interests''. Similar to the authority at FAR 6.302-7, public interest
may be cited when none of the other conditions at FAR
16.504(c)(1)(ii)(D)(1) applies. Congress wants to be informed when this
exception is used. The conditions in FAR 16.504(c)(1)(ii)(D)(1) do not
prevent an agency from making a single award. If the agency cannot cite
FAR 16.504(c)(1)(ii)(D)(1)(iii) where only one source is qualified and
capable of performing the work at a reasonable price to the Government,
then nothing prevents the Government from making the determination to
award the contract pursuant to FAR 16.504 (c)(1)(ii)(D)(1)(iv),
provided Congress is subsequently notified. However, the commenter is
not describing a situation where the second contractor has an
unreasonable price, but a situation where the second contractor has a
price higher than the first contractor. Because the situation is not a
firm-fixed-price situation (or FAR 16.504 (c)(1)(ii)(D)(1)(ii) would be
used) the second contractor's prices on a particular order could be
lower than the first contractor's prices; also the presence of the
second contractor will encourage the first contractor to keep its
prices lower.
Comment 14. ``Clarify Requirements Clause.'' The commenter states
that, without additional implementation language, it is assumed that
without a determination under FAR 16.504(c)(1)(ii)(D), it will be a
violation of FAR to issue requirements contracts over $100 million. The
commenter further states that it is assumed that all contracts over
$100 million will be multiple-award IDIQ contracts under FAR
16.504(c)(1)(ii)(D). If the assumptions are correct, the commenter
requests additional clarifying language
[[Page 13419]]
in FAR 16.503 to state that requirements contracts are not authorized
over $100 million unless a determination is granted. In addition, if
the intent is to allow multiple-award ``requirements'' contracts, the
commenter requests that an alternate to FAR 52.216-21 be added to the
ruling that defines how a multiple-award requirements contract will be
implemented.
Response: The Councils do not believe a change to FAR 52.216-21 is
required as a result of this rule. The FAR does not preclude single-
award task- or delivery-order requirements contracts over $100 million,
it just requires a written determination by the head of the agency. FAR
16.503(b)(2) already states that requirements contracts are not
authorized over $100 million unless a determination is granted. The
Councils amended the language at FAR 16.503(a) to clarify that
requirements contracts are awarded to one contractor. This change is
made to dispel the implication at FAR 16.503(b)(2) that a multiple-
award requirements contract may be awarded. See also response to
Comment 12.
Comment 15. ``Expand Coverage to all Indefinite-Delivery
Contracts.'' The commenter states that task- or delivery-order
contracts include all types of indefinite-delivery contracts (See FAR
16.501-1 and FAR 16.501-2(a)). Therefore, the commenter recommends the
rule apply to all three types of indefinite-delivery contracts.
Response: FAR 16.501-1 defines a ``delivery order contract'' and
``task order contract'' as one that does not procure or specify a firm
quantity of supplies or services, respectively. FAR 16.501-2(a)
specifies that requirements and indefinite-quantity contracts are also
known as task or delivery order contracts. IDIQ contracts are not
included. Accordingly, the rule is applied only to requirements and
indefinite-quantity contracts.
Comment 16. ``Change Terminology.'' The commenter states that it
appears the intent of the law is to require the determination to use a
single source on an indefinite-delivery contract as part of the initial
acquisition planning. To avoid confusion concerning when the
determination is required, the reference to ``task or delivery order
contract'' could be changed to either ``indefinite delivery contract'',
or ``basic indefinite delivery contract''.
Response: The Councils do not concur. The rule implements section
843 of Pub. L. 110-181, which applies to task- or delivery-order
contracts in an amount estimated to exceed $100 million (including all
options). The changes to FAR 16.503 and 16.504 do not apply to the
task- or delivery-orders issued under such contracts.
Comment 17. ``Clarify Grammar as a Result of Use of Semicolons.''
The commenter requests that FAR 16.504(a)(1)(ii)(D)(1) be clarified by
inserting either ``and'' or ``or'' after each semicolon. Several
interpretations exist because of the semicolons. One contracting
activity believes one of four exceptions must be met, while other
contracting activities require some combination of the exceptions to be
met.
Response: The listing of the subparagraphs at FAR
16.504(a)(1)(ii)(D)(1) uses a semicolon with an ``or'' before the last
subparagraph, which is consistent with FAR drafting conventions. Either
one or a combination of the items can be cited in the agency-head
determination.
Comment 18. ``Fair Opportunity Clarification.'' The commenter
recommends inserting ``the requirements in 16.505(b)(1)(ii), and'' in
16.505(b)(1)(iii) between ``shall include,'' and ``at a minimum ....''
to ensure that the user does not ignore the mandatory policy for orders
exceeding $3,000.
Response: The requirements at FAR 16.505(b)(1)(iii) cover actions
above $5 million. The procedures at 16.505(b)(1)(iii) build on the
requirements at 16.505(b)(1)(ii) and are not mutually exclusive.
Comment 19. ``Clarify Applicability to Cost-Type Contracts.'' The
commenter asks whether FAR 16.504(c)(1)(ii)(D)(1)(ii) means that
single-award cost-type task- or delivery-order contracts over $100
million are abolished.
Response: Cost-type single-award task- or delivery-order contracts
over $100 million are not abolished by this rule, but must be supported
by an agency-head determination in accordance with FAR
16.504(c)(1)(ii)(D)(1)(i), 16.504(c)(1)(ii)(D)(1)(iii), or
16.504(c)(1)(ii)(D)(1)(iv).
Comment 20. ``Agency-Head Exception Process.'' One commenter states
that this agency-head exception process is not needed because there is
already an existing regulatory process for deciding on the efficacy of
multiple awards and because this added process bears no relationship to
any problem identified with task-order competitions. According to the
commenter, the interim rule only adds to the confusion in agencies over
the task-order competition process, including blurring the authority of
the contracting officer as a gatekeeper to decide what acquisitions
should not be multiple awards at the outset.
Response: Section 843 of the FY08 NDAA establishes the requirement
for the head of the agency to make a written determination when
awarding a single-source contract greater than $100 million. This rule
implements the law. Individual agency regulations or procedures may
delegate this authority. The law did not change the contracting
officer's determination during acquisition planning as to whether
multiple awards are appropriate. Therefore, the Councils did not make
such a change in the rule.
Comment 21. ``Use of Exception Terms.'' One commenter states that
the interim rule is unclear because the existing exception terms of art
are inconsistent with the new exceptions. According to the commenter,
it is instructive that the exception factors listed in
16.504(c)(1)(ii)(B) for contracting officer planning purposes and those
listed under 16.504(c)(1)(ii)(D) for head of the contracting activity
(HCA) purposes at the award stage are not identical. In the interests
of clarity, the Government should consolidate the terms of art used for
exceptions at different stages of the acquisition and create a
definitional section for consistency and to explain those terms of art.
Response: The Councils do not concur with the commenter's
recommendation to ``consolidate the terms of art'' in FAR
16.504(c)(1)(ii)(B) and FAR 16.504(c)(1)(ii)(D). Each of the terms used
in FAR 16.504(c)(1)(ii)(B) represents the unique character of the
actions required by the contracting officer in determining whether
multiple awards are appropriate based on criteria established in the
regulatory implementation of the Federal Acquisition Streamlining Act
(see 41 U.S.C. 253h(d)(3)(B) and 10 U.S.C. 2304a(d)(3)(B)). The terms
used in FAR 16.504(c)(1)(ii)(D) list the criteria for the head of the
agency to make a determination in accordance with section 843 of the
FY08 NDAA. Congress could have used the terms in FAR
16.504(c)(1)(ii)(B) to mirror the terms in section 843, but it chose
not to do so. Instead, the Congress tailored selected criteria in FAR
16.504(c)(1)(ii)(B) to include in section 843.
Comment 22. ``Regulatory Flexibility Analysis.'' The interim rule
states that a Regulatory Flexibility Analysis (RFA) ``is unnecessary
because the rule does not change any existing regulations affecting
small businesses.'' One respondent disagrees with this assessment.
According to the commenter, since it is reasonable to conclude that
many small businesses
[[Page 13420]]
will be impacted by this rule, especially insofar as the bid protest
and debriefing rights are concerned, it appears careless to ignore the
requirements of the RFA. Among other things, an RFA requires an
analysis of alternatives and a discussion of overlapping and
duplicative rules. Given that there are already a number of rules
governing the fair opportunity to compete for task- and delivery-orders
on multiple-award contracts in the FAR and other agency FAR
supplements, the commenter believes that ``it would make sense to
conduct due diligence on those existing regulations if only to
eliminate those that may no longer be required and to shed light on the
need for the prohibition of a single award of a task order contract
over $100 million in the first place.''
Response: The interim rule did not ignore the requirements of the
Regulatory Flexibility Act (RFA). The Councils obtained review of the
statements under the RFA by the Small Business Administration Office of
Advocacy. The rule is not expected to have a significant economic
impact on a substantial number of small entities. The rule encourages
and enhances competition equally for both small and other than small
businesses. Insofar as the bid protests are concerned, the GAO did not
change its Bid Protest Regulations (See Federal Register at 73 FR 32427
published on June 9, 2008) as a result of section 843; the Councils
have not modified the protest procedures in FAR part 33 to impact small
businesses either way. The debriefing procedures cited to follow at FAR
15.506 for orders exceeding $5 million provide information to offerors
so they may improve its future offers, which is a benefit for both
small and large businesses. Further, the Councils sought comments from
small businesses on the affected FAR part 16. Only this comment was
received.
Comment 23. ``Sunset Provision.'' One commenter believes that,
because the single-award prohibition may not add continuing value to
the acquisition process over time, a sunset provision that parallels
the protest sunset (three years) should be inserted to account for the
possibility that, in the future, either no single-award exceptions are
being processed or, conversely, too many single-award exceptions are
being processed. Factually and legally, that would indicate that the
single-award prohibition is either unnecessary because none are being
processed, or conversely, that it is too restrictive and/or being
applied too broadly by agency personnel leading to a proliferation of
agency-head determinations to make a single task-order contract award.
In either case, the commenter believes that it would only serve to
emphasize that prohibiting single awards does not address any of the
goals of the interim rule and thus should be sunset.
Response: The Councils do not concur with adding such a sunset
provision. The commenter's recommendation goes beyond the provisions as
enacted by section 843 of the FY08 NDAA.
Comment 24. ``Override.'' The commenter requests that the final
rule clarify that a protest of a solicitation for, or award of, a task-
or delivery-order timely filed in accordance with the Competition in
Contracting Act, 31 U.S.C. 3551 et seq.; should trigger an automatic
stay of performance.
Response: This rule implements section 843. Section 843 did not
address ``stay of performance'' under the Competition in Contracting
Act, 31 U.S.C. 3551 et seq.
Comment 25. ``Monetary Threshold for Protests.'' The commenter
states that ``section 843 does not provide any express guidance on how
the parties should value task or delivery orders when determining
whether an order exceeds the threshold value for purposes of protest
jurisdiction. This lack of clarity could lead to challenges to GAO's
authority to hear a protest.'' The commenter requests that the final
rule clarify how the monetary threshold for a task- or delivery-order
protest will be calculated. The commenter offers that the Councils
could consider clarifying the rule to indicate the $10 million
threshold is based upon the offers received by the agency so that
agencies cannot avoid protest jurisdiction by valuing a solicitation
slightly under the statutory threshold and so that protest jurisdiction
is not affected by adjustments made to offers during the course of the
evaluation.
Response: The Councils believe GAO will handle issues concerning
its jurisdiction.
Comment 26. ``Section 843 Restricts Use of Single-Award IDIQ.'' The
commenter states that, in anticipation of the issuance of the interim
rules pursuant to guidance from the Office of the Secretary of Defense
in May 2008, several Department of Defense commands had already stated
informally (and anecdotally had begun to act on their belief) that
section 843 (in the form of FAR 16.504) effectively prohibits them from
concluding either during the planning process or at time of award that
a single-award task- or delivery-order contract estimated over $100
million dollars would ever be justifiable, preemptively cutting off any
thoughtful analysis of the facts and foreclosing any exceptions at the
planning stages, in effect pushing the decisions upstream to the HCA at
time of award where acquisition law and regulation may not be as well
known as at the contracting officer level and where the timing of any
such decision will become less of an acquisition decision and more of a
political one.
Response: The contracting officer determination, at the
acquisition-planning stage, on whether multiple awards are appropriate
is required by statute. This determination is separate from the
determination by the agency head to award a task- or delivery-order
single contract over $100 million, which is required by a different
statute. Each agency is responsible for ensuring it meets the
requirements of both determinations when applicable. As such, questions
or concerns regarding agency implementation of section 843 should be
directed to that agency.
Comment 27. ``Determination to Use Multiple-Award Contracts.'' This
contract-type ``gap'' is recognized in the existing regulation, and the
FAR currently has a regime where the contracting officer is required to
examine the efficacy of multiple awards as part of a stepped planning
process. There are several process points at which conditions or
exceptions to multiple awards can be applied per the contracting
officer's discretion.
Response: It is incumbent upon the contracting officer, as required
by FAR 16.504, to determine the feasibility of establishing single- or
multiple-award contracts. In the instance where a single-award task- or
delivery-order contract over $100 million will be made, the
requirements of FAR 16.504(c)(1)(ii)(D) must be addressed.
Comment 28. ``Use of Mandatory Exceptions for Multiple-Award
Contracts.'' This list of mandatory exceptions appears to cover just
about any contingency affecting the requirements and, at one time, is
both comprehensive and broad enough to allow a contracting officer
great flexibility to judge the merits of making multiple awards. The
commenter states that a contracting officer may determine that a class
of acquisitions is not appropriate for multiple awards, but that
exception appears to be rarely, if ever, used. In fact, according to
the commenter, there is scant data on the use of any of the contracting
officer multiple-award contract exception processes whatsoever, so it
is difficult to determine whether the contracting officers actually
perform such a decisional function. Conversely, though there has been
no report that those authorities have been abused one way or
[[Page 13421]]
the other, the interim rule would render moot any planning-stage
decision the contracting officer would make if the award were over $100
million.
Response: The acquisition planning team (e.g., contracting officer,
program office, customers) is tasked to define the exact strategy to
support the acquisition requirement. The rule does not render moot the
contracting officer's decision in the acquisition-planning process. The
contracting officer is still required by FAR 16.504 to determine the
feasibility of establishing single- or multiple-award contracts.
Comment 29. ``Head of Agency Override of Contracting Officer
Determination.'' According to one commenter, although the interim rule
may be designed to facilitate a proper level of quality assurance over
certain Government actions designed to increase competition for task
orders, and is not reflective of any failure by the private sector in
its transactional conduct, it is wholly possible and very likely that
an agency head could veto a single IDIQ award at time of award,
presumably long after a contracting officer may have determined that
multiple awards are not in the Government's best interest and for
reasons that the head of the agency may not be held accountable to
explain. The commenter suggests that one way to deal with that lack of
transparency would be to allow any contracting officer's written
determination that a multiple-award contract is not appropriate made at
the acquisition planning stages to have great presumptive weight in any
internal agency deliberations for the agency-head exception process or
require that the agency-head determination be published if contrary to
the contracting officer's initial determination.
Response: The Councils do not agree that the written determination
by the head of the agency should be published when it differs from the
contracting officer's initial determination to award a single IDIQ
contract. This is not required by section 843. Further, the purpose of
the rule is to encourage competition and to make the highest levels of
the agency aware of the use of a single-award task- or delivery-order
contract greater than $100 million. If a contracting officer's initial
determination to award a single IDIQ contract is later overturned, this
decision would need to be substantiated and justified and would be
completely in line with the rule's goal of encouraging competition and
the use of multiple awards under IDIQ contracts valued over $100
million. Whether these determinations are releasable to the public/
private sector is determined by the Freedom of Information Act. Lastly,
the approval authority to award a single-award task- or delivery-order
contract greater than $100 million rests with the head of the agency
per FAR 16.504(c)(1)(ii)(D) and, to the extent the head of the agency
considers the acquisition-planning determination on whether multiple
awards are appropriate by the contracting officer is within his or her
discretion; however, the law does not require such consideration.
Contracting officers should be fully engaged or involved in the
decision-making process.
This is a significant regulatory action and, therefore, was subject
to 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 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 enhances
competition for small and large business, and the information that will
be provided in debriefings on procurements over $5 million will benefit
firms by enabling them to improve future offers. In addition, the
Councils sought comments from small businesses on the affected FAR part
16 at the publication of the interim rule in the Federal Register at 73
FR 54008 on September 17, 2008. One comment was received and is
discussed at Comment 22.
C. 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.
chapter 35, et seq.
List of Subjects in 48 CFR Part 16
Government procurement.
Dated: March 15, 2010.
Al Matera,
Director, Acquisition Policy Division.
0
Accordingly, the interim rule published in the Federal Register at 73
FR 54008 on September 17, 2008, is adopted as a final rule with the
following changes:
PART 16--TYPES OF CONTRACTS
0
1. The authority citation for 48 CFR part 16 continues to read as
follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
16.501-1 [Amended]
0
2. Amend section 16.501-1 by adding ``-'' between the words
``Delivery'' and ``order'' in the definition of ``Delivery order
contract'' and between the words ``Task'' and ``order'' in the
definition of ``Task order contract''.
16.501-2 [Amended]
0
3. Amend section 16.501-2 in the last sentence of paragraph (a) by
adding ``-'' between the words ``delivery'' and ``order'' and between
the words ``task'' and ``order''.
16.503 [Amended]
0
4. Amend section 16.503 by removing from paragraph (a) introductory
text ``period'' and adding ``period (from one contractor)'' in its
place.
0
5. Amend section 16.504 by revising paragraph (c)(1)(ii)(D)(3) to read
as follows:
16.504 Indefinite-quantity contracts.
* * * * *
(c) * * *
(1) * * *
(ii) * * *
(D) * * *
(3) The requirement for a determination for a single-award contract
greater than $100 million:
(i) Is in addition to any applicable requirements of Subpart 6.3.
(ii) Is not applicable for architect-engineer services awarded
pursuant to Subpart 36.6.
* * * * *
[FR Doc. 2010-5989 Filed 3-18-10; 8:45 am]
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