[Federal Register: December 15, 1999 (Volume 64, Number 240)]
[Proposed Rules]
[Page 70157-70161]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15de99-27]
[[Page 70157]]
_______________________________________________________________________
Part IV
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Parts 2, 16, and 37
Federal Acquisition Regulation; Competition Under Multiple-Award
Contracts; Proposed Rule
[[Page 70158]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 16, and 37
[FAR Case 1999-014]
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: Proposed rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are proposing to amend 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: Interested parties should submit comments in writing on or
before February 14, 2000 to be considered in the formulation of a final
rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (MVRS), 1800 F Street,
NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405.
Address e-mail comments submitted via the Internet to:
farcase.1999-014@gsa.gov.
Please submit comments only and cite FAR case 1999-014 in all
correspondence related to this case.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, at (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 FAR case 1999-014.
SUPPLEMENTARY INFORMATION:
A. Background
The proposed rule amends FAR Part 16 to provide policy on multiple-
award task and delivery-order contracts; amends FAR Part 37 to delete a
definition; and amends FAR Part 2 to insert the definition that was
deleted from Part 37. The proposed rule also clarifies the FAR's
current implementation of sections 1004 and 1054 of the Federal
Acquisition Streamlining Act of 1994 (Pub. L. 104-355). The rule
reinforces key principles regarding the structure, administration, and
use of multiple award task and delivery order contracts, such as the
expectation of providing awardees a fair opportunity to be considered
for orders throughout the life of the contract. The rule provides
policy that clarifies what contracting officers should consider when
planning for multiple award of indefinite-delivery contracts and
clarifies how orders should be placed against the resultant contracts.
The rule continues to provide contracting officers broad
discretion. It includes streamlined ordering processes that provide
effective, flexible, and timely solutions for agency requirements
through orders placed under multiple award task or delivery order
contracts.
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
This proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule
only clarifies what the contracting officer should consider when
planning for and placing orders under multiple-award contracts.
Therefore, we have not prepared an Initial Regulatory Flexibility
Analysis. We invite comments from small businesses and other interested
parties. The Councils will consider comments from small entities
concerning the affected FAR subparts in accordance with 5 U.S.C. 610.
Interested parties must submit such comments separately and should cite
5 U.S.C. 601, et seq. (FAR case 1999-014), in correspondence.
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.
3501, et seq.
List of Subjects in 48 CFR Parts 2, 16, and 37:
Government procurement.
Dated: December 9, 1999.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, DoD, GSA, and NASA propose that 48 CFR Parts 2, 16, and
37 be amended 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:
(a) 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.
[[Page 70159]]
(b) 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.
(c) 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 multiple award preference established 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 any 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, 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 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 broader statement of work, thus
creating the likelihood that tasks 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;
[[Page 70160]]
(3) The expected cost of administration of multiple contracts
outweighs the expected benefits of making multiple awards;
(4) The projected task 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 in a written
acquisition plan or a separate written determination. 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, before the solicitation is
issued, that multiple awards are not practicable. The contracting
officer or other official must determine that the scope of work is
unique or highly specialized or the tasks so integrally related that
only one contractor can reasonably perform the work;
(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. 303J(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 over $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 appropriate procedures. 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 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.
(C) 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.
(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 in excess of $2,500 are--
(i) The agency need for the supplies or services is of such urgency
that providing such 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 should 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, establish prices for each order using the
policies and methods in subpart 15.4.
(4) Decision documentation for orders. 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
[[Page 70161]]
provided for in paragraphs (c)(2) and (3) of this section, 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. Do not use this provision for advisory and
assistance services contracts that exceed 3 years and $10 million.
Modify the provision to specify the estimated number of awards.
(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 Definitions.
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. 99-32476 Filed 12-14-99; 8:45 am]
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