[Federal Register: February 10, 2011 (Volume 76, Number 28)]
[Proposed Rules]
[Page 7522-7526]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10fe11-11]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 24
[FAR Case 2009-004; Docket 2010-0089, Sequence 2]
RIN 9000-AL59
Federal Acquisition Regulation; Enhancing Contract Transparency
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Advance notice of proposed rulemaking; withdrawal.
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SUMMARY: DoD, GSA, and NASA are issuing this document to summarize and
respond to the comments received in response to the advance notice of
proposed rulemaking published in the Federal Register at 75 FR 26916,
May 13, 2010. This information was used to determine if the FAR should
be amended to provide for further transparency in Government contracts.
DoD, GSA, and NASA acknowledge the comments and solutions provided
and will take this information into account, at a later date, in
determining if the FAR should be amended to further enhance
transparency in Government contracting.
At this time, DoD, GSA, and NASA do not plan to amend the FAR
because some of the existing acquisition systems at http://
www.acquisition.gov provide certain information on Government contracts
that is readily available to the public, and most of the content of a
contract solicitation or contract action not already available on one
of the acquisition systems at http://www.acquisition.gov is either
standard FAR terms and conditions available at https://
www.acquisition.gov/far/index.html, agency specific terms and
conditions available from the contracting agency Web site, or sensitive
information that may be releasable under FOIA.
DATES: The advance notice of proposed rulemaking published in the
Federal Register at 75 FR 26916, May 13, 2010, is withdrawn as of
February 10, 2011.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Mr. Michael Jackson, Procurement Analyst, at (202) 208-4949. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat at (202) 501-4755. Please cite FAR Case 2009-
004.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published an advance notice of proposed
rulemaking in the Federal Register (75 FR 26916, May 13, 2010)
requesting information that would assist in determining how best to
amend the FAR to enable public posting of contract actions, should such
posting become a requirement in the future, without compromising (1)
contractors' proprietary and confidential commercial or financial
information or (2) Government-sensitive information. The transparency
effort is intended to promote efficiency in Government contracting
consistent with the Administration's memorandum entitled Transparency
and Open Government (January 21, 2009, available at: http://
www.whitehouse.gov/the_press_office/TransparencyandOpenGovernment/).
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.
Discussion of Public Comments
In response to the May notice, 15 respondents, including Government
agencies, industry associations, advocacy groups, and private
individuals, submitted a total of 44 comments. The comments fall into
nine categories, each of which is discussed in the following sections.
1. Public Meeting
Comments: Two respondents commented on the usefulness of a public
meeting. The first respondent favored a public meeting so that the
costs associated with publicly posting contracts could be addressed.
Another respondent stated that holding a public meeting on the methods
by which contracts will be made public and the types of information
that should be
[[Page 7523]]
publicly accessible would allow various stakeholders to share different
viewpoints on the topic. The respondent stated that, if such a meeting
is held, it would like to be a presenter.
Response: Only two respondents addressed the issue of a public
meeting, and both were only moderately supportive on the topic. Because
there were only two respondents that recommended a public meeting, and
in view of the overall comments about this transparency effort, a
public meeting will not be held at this time.
2. Automatic Preference For/Against Disclosure
Comments: Respondents expressed a wide variety of preferences. One
respondent stated that several agencies post an electronic copy of
contract award documents in the agency Freedom of Information Act
(FOIA) Reading Room (if the contract has been requested a minimum of
three times and a redacted copy is available electronically). The same
respondent also noted that some agencies post their contracts
immediately because they are commercial purchases using published
catalogs, which means that the prices are public information.
A second respondent noted that certain proposal information and
source selection information must be protected. The respondent further
stated that protections apply to information obtained to determine
reasonableness of price; trade secrets; privileged or confidential
manufacturing processes and techniques; commercial and financial
information that is privileged or confidential, including unit pricing;
names of individuals providing past performance information; and
classified information relevant to national security.
A third respondent recommended that the Government provide open
public access to information on the contracting process, including
actual copies of contracts rather than coded summary data, as well as
contracting officers' decisions and justifications. The respondent
recommended making USAspending.gov the one-stop shop for public Federal
contract spending information, by posting actual copies of contracts,
task and delivery orders, modifications, amendments, other transaction
agreements, grants, and leases, including price and cost information,
proposals, solicitations, award decisions and justifications (including
all documents related to contracts awarded with less than full and open
competition and single-bid contract awards), audits, performance and
responsibility data, and other related Government reports. The
respondent conceded that the Government should protect classified
information and other information that would potentially cause
substantial harm to a contractor, but only when those exceptions are
not outweighed by the public benefit that would be realized by this
disclosure. The respondent believed that the burden should be placed on
prospective contractors to justify withholding information from public
view.
Response: DoD, GSA, and NASA note that the comments cover various
perspectives on transparency in Government contracting--from publishing
everything to publishing nothing without first undertaking a complete
FOIA analysis. Specific issues associated with the recommendations
summarized above have been addressed in the context of other public
comments that follow.
3. Protect Unclassified Information
Comment: Three respondents expressed concern that any publication
of contract documents would have a high likelihood of compromising
proprietary information. Even if posting of contracts did not expose
proprietary information, one respondent was concerned that it could
expose military or other similar operations that could have national
security implications, even though the published information, per se,
was not classified. A third respondent noted that there is a
significant body of unclassified Government information that also
should be considered for protection; this respondent made reference to
the advance notice of public rulemaking for Defense Federal Acquisition
Regulation Supplement (DFARS) Case 2008-D028, Safeguarding Unclassified
Information.
Response: DoD, GSA, and NASA understand the importance of
protecting unclassified information. The processes for doing so and the
identification of what must be protected are under consideration in FAR
Case 2009-022, and DFARS Case 2008-D028.
4. Transparency or FOIA Analysis
Comments: The majority of respondents expressed concern about
addressing transparency initiatives outside the context of the Freedom
of Information Act. Concerns focused around whether there is a need to
conduct a FOIA analysis prior to making a determination on the
disclosure of protected information in an effort to meet transparency
initiatives.
Response: DoD, GSA, and NASA understand that the FOIA regulations
and procedures and the Executive Order 12600, Predisclosure
Notification Procedures for Confidential Commercial Information, must
be closely examined by the FOIA experts and adequately addressed as
consideration is being given to what contract documents to make
available to the public.
5. A Transparency Requirement Would Reduce Competition
Comments: Two respondents stated that creating a mandate for
companies to post their contracts to public sites would place these
companies in the position of sometimes choosing not to bid on
Government procurements to avoid the disclosure of their sensitive
competitive and/or proprietary data. This would have the effect of
limiting or reducing competition.
Response: DoD, GSA, and NASA take note of this concern but do not
agree with this conclusion. Transparency could have the opposite effect
and enhance competition.
6. A Posting Requirement Is an Administrative Burden and Will Increase
Costs for Both Contractors and Government Agencies
Comments: Some respondents maintained that requiring public posting
of all contract actions would result in significant cost and
administrative burdens, both for contractors and for the Government,
and in addition, would involve unnecessary duplication of effort.
Two respondents contended that the effort and expense in the
redaction and posting process would be significant and challenging. One
of these respondents noted that, ``with more than 30 million
transactions issued by the Government annually, the redaction process
alone would be overwhelming.'' The other respondent stated that the
review and defense of confidential information contained within each
contract would be a major undertaking, assuming a process similar to
that now required by FOIA. A third respondent commented on the
administrative costs and burden of posting, but also added that the
training and oversight necessary to implement such a process, and the
likely surge in public inquiries as a result of public posting of
actions, would further compound these challenges. The same respondent
also predicted a great deal of ``legal wrangling'' over the posting of
proprietary information, which could delay the award of, or initiation
of work under, contracts.
A respondent predicted that the posting requirement would add work
to an already overburdened acquisition workforce, and another
respondent
[[Page 7524]]
contended that it would detract from the contracting officer's primary
responsibility to award and manage contracts.
A respondent maintained that public posting of contract actions
would be a duplicative administrative process because contract
information is currently available through several venues, including
FedBizOpps (FBO), USASpending.gov, and the Federal Procurement Data
System (FPDS), and that these systems provide sufficient transparency
while retaining the protection of information that should be considered
in the contracting process. Another respondent commented that it finds
it difficult to identify what would be made public with a mandatory
public posting requirement that is not already publicly available. The
respondent stated that the majority of information in a contract action
is either located in the solicitation posted to FedBizOpps or is
standard Federal Acquisition Regulation (FAR) contract language
available for viewing at https://www.acquisition.gov/far. The
respondent deemed the majority of information beyond what is in the
solicitation and the FAR to be information that should be protected
from disclosure. Two respondents took exception to the idea--as stated
in the ANPR--that the transparency effort is intended ``to promote
efficiency in Government contracting.'' The respondents do not
acknowledge any direct correlation between posting contracts online and
improving efficiency and spending.
Response: DoD, GSA, and NASA take note of this concern. The cost
increases mentioned will be considered in any determination concerning
contract posting requirements. As mentioned, contract information is
either located in the solicitation posted to FedBizOpps at http://
www.fedbizopps.gov or is standard FAR contract language and terms and
conditions are available at https://www.acquisition.gov/far. However,
awarded contract documents such as the statement of work, detailed
contract line item descriptions, terms and conditions, deliverables,
contractor proposals from the awardee, or other information that
resides with the awarding contract agency may be available under a FOIA
request.
7. Governmentwide Integrated Electronic System
Comments: Three respondents supported a posting requirement. One of
these recommended that only the total value of the contract be posted.
Another respondent suggested posting a non-proprietary version of
contracts ``on the web'' for at least one year after award. The same
respondent believed that ``all we need to do is write a line of code or
a few lines of code into the existing contracting database that removes
all of the proprietary information and allows the user to download or
print a stripped version of it.'' In addition, a respondent suggested
that, in order to store and provide access to this information, the
Government must shift to a Governmentwide integrated electronic system
that would create and store pre- and post-award contracting records.
The expanded system should permit, according to the respondent,
automatic redactions only of the most protected information or data
fields, including classified information and other information that
would potentially cause substantial harm to a contractor, but only when
those exceptions are not outweighed by the public benefit that would be
realized by the disclosure of such information.
Response: The respondents recommended a variety of information and
solutions for posting the information. DoD, GSA, and NASA recognize the
need for transparency in Government contracting information and believe
these recommendations require additional thought by our system experts
to determine the cost benefit analysis, capabilities analysis of
existing systems, etc., to determine if the recommended solution can be
implemented in the Government's current integrated acquisition
environment. The Government is working to improve its collection of
contracting information, see the new System for Award Management (SAM),
at http://www.acquisition.gov.
8. Posting Poses Significant Risks to Federal Employees
Comments: Two respondents maintained that a mandatory requirement
for public posting of contract actions would expose Government
employees to risks of criminal fines or penalties.
One respondent contended that the safeguards suggested by DoD, GSA,
and NASA in the ANPR fall short of applying FOIA procedures to the
proposed posting requirements and, as a result, will cause Government
employees to bear increased risks related to improper disclosure of
protected information. The respondent quoted the Trade Secrets Act, 18
U.S.C. 1905, explaining that it prohibits the release of confidential
information and imposes criminal fines and possible imprisonment, as
well as termination of employment, for Government employees who
disclose confidential information. The respondent suggested that a
``FOIA-like review and redaction process,'' though burdensome to
Government and industry, would be necessary to avoid risk to Government
employees.
The other respondent contended that Government employees may remain
at risk if alternatives to the FOIA exemption 4 analysis are not
adopted for purposes of public posting. This is because exemption 4 of
FOIA is co-extensive with the Trade Secrets Act, which prohibits
Government personnel from releasing contractor trade secrets and making
them personally liable if that information is released. The respondent
noted that the responsible Government agency employee would be at risk
if required to publicly post a contract without express contractor
authorization.
Response: DoD, GSA, and NASA take note of this concern and will
consider this issue if measures are taken to enhance transparency in
Government contracting.
9. Alternatives Proposed
a. Comments: One respondent opposed the requirement to publicly
post contracts. However, the respondent proposed two alternatives to
diminish the level of effort required. The first alternative posed was
to state plainly in the solicitation that every page of a successful
offeror's proposal not marked as proprietary would be posted on the
Web. This approach gives contractors notice prior to proposal
submission. The respondent's second alternative was to ask the
successful offeror, at the time of award, to submit a redacted copy of
the contract for public posting. Central to this alternative is the
recognition that the contractor need not submit a detailed
justification for its redactions but merely a declaration that the
contractor has in good faith provided a redacted copy according to the
current FOIA law.
Response: DoD, GSA, and NASA take note of these alternatives and
may consider each approach in determining how best to enhance
transparency in this area.
b. Comment: Somewhat similar to the previous respondent's first
alternative, a respondent suggested that a contracting officer could
post contracts online if the Government established the solicitation in
such a way that offerors were required, in their proposals, to
segregate anything that the vendor deems proprietary, keeping it in a
separate section or attachment of the proposal. This approach would
enable the majority of the contract to be posted online immediately.
Then, if a FOIA
[[Page 7525]]
request was made subsequently for the material not posted, the
Government's review and redaction would be made simpler by looking over
just the section or attachment not posted initially.
Response: DoD, GSA, and NASA take note of this approach, but
believe it relies entirely on the successful offeror's judgment, and it
does not address the Government's requirement to protect classified
information or other, unclassified information that may require
safeguarding.
c. Comment: Eight other respondents proposed specific alternatives
in lieu of publishing contracts. One respondent opposed posting of any
information because it would have the effect of releasing contractors'
pricing information. Another respondent believed that the current
posting requirement for contract/order award information (contract
number, awardee information, total amount of award) was sufficient and
that additional information should not be released. Another respondent
would be more conservative and post only the total value of the
contract.
One respondent suggested exempting entire classes of contracts from
the posting requirement. This respondent suggested that contracts
awarded using the sixth exemption from full and open competition should
not be posted. A fifth respondent proposed that the Government must
find a way to ensure the protection of an entity's information that
supports pending patents in addition to protecting competition-
sensitive pricing or technical information.
A respondent suggested that solicitations include a clear statement
that every page not marked as proprietary will be posted on the Web or,
in the alternative, ask the successful offeror, at the time of award,
to submit a redacted copy of the contract for public posting. The
seventh respondent recommended redacting (presumably by the Government)
all confidential and proprietary information and any item associated
with national security prior to posting contracts.
The eighth respondent stated its preference for avoiding a contract
posting requirement entirely but suggested, if posting is inevitable,
that the Government--
1. Add a module to FedBizOpps where the successful offeror could
post a redacted contract, and enforce the posting requirement by
withholding payment on the contractor's first invoice until the
redacted contract has been posted;
2. Establish a threshold, e.g., $10 million, below which contracts
need not be posted; and
3. Require posting of only the statement of work (SOW)/performance
work statement (PWS) and deliverable schedule, but give contracting
officers authority to exempt a SOW/PWS from the posting requirement if
it contained proprietary information.
Response: DoD, GSA, and NASA are appreciative of the respondents
that provided specific alternatives for our consideration. Any
contract-posting initiative must give consideration to the costs
involved (in technology and software as well as the time of contractor
and Government employees) and the risks associated with posting this
information (e.g., lawsuits against the Government for inadvertently
releasing information that could be damaging to national security and/
or the competitive positions of companies doing business with the
Government). DoD, GSA, and NASA advocate a judicious approach to
establishing contract-posting requirements, one that will appropriately
conserve resources and identify information that should be protected
from general release to the public. Our assessment is that any contract
posting requirement, at a minimum, should involve each of the elements
proposed by the eighth respondent above, i.e., a high dollar threshold,
a requirement for only the successful offeror to redact the contract
and/or proposal that will be posted, and an incentive for the
successful offeror to do so.
No posting requirement can be successful without protections for
both contractor and Government employees. Necessary protections for
information and personnel involve, at a minimum, a FOIA analysis, which
is time consuming and requires senior analysts and attorneys. DoD, GSA,
and NASA are concerned, too, that the on-going efforts to identify
protections essential for safeguarding unclassified information are not
yet sufficiently mature that such efforts can be bypassed to establish
a contract-posting requirement prior to guidance on unclassified
information. To avoid inadvertent disclosures, the Government would be
required to review contractor-redacted documents before such items are
posted to a public Web site. The contract or contractor's proposal may
contain information that requires protection beyond trade secrets or
proprietary information.
II. Review of Existing Databases
DoD, GSA, and NASA extensively researched existing contracting
related databases, confining the search to those that are fully
available to the general public, in order to determine the extent of
information on Government contract actions that is currently available.
While there are approximately nine acquisition systems available at
http://www.acquisition.gov that capture contracting information, and
some of the information in these systems is available to the public,
DoD, GSA, and NASA focused on four such Web sites. These are--(1)
FedBizOpps; (2) USASpending.gov; (3) GSA eLibrary; and (4) Federal
Procurement Data System (FPDS).
1. FedBizOpps. This is a publicly available Web site at http://
www.fbo.gov where many of the Government's solicitations are posted.
There are several exceptions to the posting requirement; these are
located at FAR 5.202, e.g., disclosure would compromise the national
security. Both active and archived solicitations are available. Each
solicitation is identified with a procurement classification code,
e.g., 42 is fire-fighting, rescue, and safety equipment. In addition,
FedBizOpps includes contract award information. This Web site is where
agencies are required to post justifications for less than full-and-
open competition (Justification and Approval, or J&A) and associated
documentation, as well as sources-sought notices. Vendors are able to
search for and retrieve posted J&As according to specific criteria,
such as J&A authority, posted date range, and contract award date.
2. USASpending.gov: This Web site was established pursuant to the
Federal Funding Accountability and Transparency Act of 2006 (FFATA).
FFATA required a single searchable Web site, accessible to the public--
at no cost to access--to include each Federal award. The specific
information provided at USASpending.gov includes--
The name of the award recipient.
The amount of the award.
The date the award was signed.
The agency making the award.
The location of the entity receiving the award.
A unique identifier of the entity receiving the award.
The product or service code for the supplies or services
being purchased.
A description of the award.
If a modification to an existing award, the reason for the
modification.
3. GSA eLibrary
GSA eLibrary (formerly ``Schedules e-Library'') is the online
source for the latest contract award information for--
GSA Schedules;
[[Page 7526]]
Department of Veterans Affairs (VA) Schedules; and
Technology Contracts, including Governmentwide Acquisition
Contracts (GWACs), Network Services and Telecommunications Contracts,
and Information Technology (IT) Schedule 70.
GSA eLibrary is available 24 hours a day, seven days a week to
provide up-to-date information on which suppliers have contracts and
what items are available, by using various search options, i.e.--
Keywords;
Contract number;
Contractor/manufacturer name;
Schedule name, Schedule number, category/sub-category
name, or category number/special item number (SIN); or
Technology contract name, contract number, or category
name/number.
GSA eLibrary also provides an alphabetical listing of available
contractors, allowing customers to easily locate all Schedule and
technology contracts for a particular company. An updated category
guide is designed to facilitate searches for specific groups of items.
Other features include:
Access to information on millions of supplies (products)
and services;
Information on the latest Schedule program changes,
including a ``News'' area;
Access to the complete list of all GSA and Veterans
Affairs Schedules from the ``View Schedule contracts'' link;
Links to technology contracts--IT Schedule 70, the
complete list of GWACs, and network services and telecommunications
contracts;
Links to GSA Advantage![supreg] Online Shopping for
eBusiness and eBuy, GSA's electronic Request For Quotation (RFQ)
system;
Ability to download current PDF versions of Schedules;
Ability to download contract award information in an Excel
format by category;
Links to contractor Web sites, email addresses, and text
files containing contract terms and conditions; and
Identification of Schedule contractors participating in
cooperative purchasing and/or disaster recovery purchasing.
4. Federal Procurement Data System (FPDS)
FPDS is an online central repository containing a searchable
collection of Federal contracts with a potential value of $3,000 or
more, including all subsequent modifications. It is available at http:/
/www.fpds.gov. FPDS provides public access to many standard and custom
reports about these actions, products/services purchased, vendor
socioeconomic information, dates of award and completion, and dollar
values.
DoD, GSA, and NASA would also like to mention two other contracting
databases--the Recovery Web site and the Federal Awardee Performance
and Integrity Information System (FAPIIS).
FAPIIS was established under section 872 of the National Defense
Authorization Act of 2009, and includes specific information on the
integrity and performance of covered Government agency contractors and
grantees information on defective cost or pricing contractor
convictions, terminations for default, and administrative agreements
reached in lieu of suspension or debarment. Section 3010 of Public Law
111-212, making supplemental appropriations for Fiscal Year 2010,
requires the posting of FAPIIS information ``on a publicly available
Internet Web site.''
Also, the Recovery Web site, at http://www.Recovery.gov, was
established pursuant to the American Recovery and Reinvestment Act of
2009 (the Act), to foster greater accountability and transparency in
the use of funds made available in the Act. The Web site has been
operational since February 17, 2009. This Web site gives taxpayers
user-friendly tools to track Recovery funds, showing how and where the
funds are spent. In addition, the site offers the public an opportunity
to report suspected fraud, waste, or abuse related to Recovery funding.
List of Subjects in 48 CFR Part 24
Government procurement.
Dated: February 3, 2011.
Millisa Gary,
Acting Director, Office of Governmentwide Acquisition Policy.
[FR Doc. 2011-2900 Filed 2-9-11; 8:45 am]
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