[Federal Register: September 29, 2010 (Volume 75, Number 188)]
[Rules and Regulations]
[Page 60258-60260]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29se10-19]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 8, 12, 15, 42, and 49
[FAC 2005-46; FAR Case 2008-016; Item III; Docket 2009-0032, Sequence
1]
RIN 9000-AL45
Federal Acquisition Regulation; Termination for Default Reporting
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 (the Councils) are issuing a final rule
amending the Federal Acquisition Regulation (FAR) to establish
procedures for contracting officers to provide contractor information,
such as terminations for cause or default and defective cost or pricing
data, into the Past Performance Information System (PPIRS) and Federal
Awardee Performance and Integrity Information System (FAPIIS) module
within PPIRS. This information will assist the contracting officer in
making an informed source selection and award decision. Instructions on
access to the FAPIIS module and how to input data into the FAPIIS
module will be available at http://www.ppirs.gov/fapiis.html.
DATES: Effective Date: October 29, 2010.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Jeritta Parnell, Procurement Analyst, at (202) 501-4082. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-46, FAR
case 2008-016.
SUPPLEMENTARY INFORMATION:
A. Background
The Councils have agreed on a final rule amending the FAR to revise
the contractor performance information process. This case sets forth
requirements for contracting officers to report defective cost or
pricing data and terminations for cause or default into the FAPIIS
module of the PPIRS. Evaluation of past performance information,
especially terminations, manages risks associated with timely,
effective, and cost efficient completion of contracts, a key objective
of the President's March 4, 2009, Memorandum on Government Contracting.
The Councils published in the Federal Register at 74 FR 45394 on
September 2, 2009, a proposed rule with request for comments. Four
respondents submitted fifteen comments.
B. Discussion of Public Comments
The comments received were grouped under six general topics. A
summary of these topics and a discussion of the comments and the
changes made to the proposed rule as a result of those comments are
provided below:
1. Certification Regarding Responsibility Matters
Comment: One respondent recommended deletion of the certification
on terminations found in FAR clause 52.209-5, Certification Regarding
Responsibility Matters, since the information concerning terminations
will be available to contracting officers in PPIRS. The respondent
further suggested that conforming deletions should also be made at FAR
52.204-8(c)(1)(v) and in the Online Representations and Certifications
Application (ORCA) Web site.
Response: The Councils disagree. PPIRS is the repository for
[[Page 60259]]
determinations made by contracting officers. PPIRS is not a repository
for certifications made by contractors when certifications are
required. Executive order 12689 requires the inclusion of the
certification at FAR 52.209-5. FAR 9.105-1 also requires contracting
officers to consider contractor certifications in making a contractor
determination of responsibility.
2. Contractor Rebuttal
Comment: Two of the four respondents submitted comments requesting
that the contractor be given an opportunity to post rebutting
statements and additional information into PPIRS and this information
be retained as long as the fundamental information is retained in
PPIRS.
Response: When termination records are posted in the FAPIIS module
of PPIRS, contractors will have an opportunity to provide additional
information as required by section 872 of the Duncan Hunter National
Defense Authorization Act of 2009 (Pub. L. 110-417). This process
should not be confused with the rebuttal process for past performance
information as specified in FAR 42.1503(b).
3. Defective Pricing Information
Comment: One respondent submitted two separate comments suggesting
that defective pricing information not be included in PPIRS.
Response: The Councils disagree. The Councils believe that
defective cost or pricing data is relevant to other contractor
performance information to be considered when evaluating contractor's
performance for award of contracts. However, the Councils did clarify
in FAR 15.407-1(d) and 42.1503(f) that the contracting officer shall
report only the final determination.
4. Relevance and Currency
Comment: One respondent submitted two separate comments on
relevance and currency. One comment stated that the FAR does not
provide any guidance with respect to relevance when determining the
relevance and currency of any termination for cause or default
information in PPIRS. The second comment suggested that the rule
explain how the contracting officer will evaluate defective pricing
information recorded in PPIRS.
Response: The Councils disagree with revising the rule. Relevancy
is specific to the instant contract and based on the circumstances of
contract performance. Contracting officers are responsible for making a
determination of the relevancy of the information. The Councils will
work with the Federal Acquisition Institute and the Defense Acquisition
University to develop guidance and training for contracting officials
on the proper use of the reported information.
5. Removal of Detrimental Information
Comment: Two respondents submitted comments concerning removal of
detrimental information from PPIRS. One comment suggested that the
Government remove unfavorable information from PPIRS should it no
longer be valid. For example, when terminations for cause or default
are converted to termination for convenience or withdrawn the
contracting officer should remove from PPIRS any reference to the
termination for default. The respondent recommended changing the
language at FAR 8.406-8 and 12.403.
Response: The Councils disagree that a change to the rule is
necessary. The language at FAR 8.406-4(e), 12.403(c)(4), 15.407-1, and
49.402-8 states that the contracting officer shall report a subsequent
withdrawal or a conversion to a termination for convenience in
accordance with FAR 42.1503(f).
Comment: Another respondent suggested the Government should be held
to the same high standard of record keeping as no system is infallible.
Determination of malice and intent should be made before contract
termination occurs. Follow-up systems should be in place to make sure
that when an error occurs and is corrected that the Government does
hold up its side of the bargain and remove detrimental information.
Response: Comment noted. Throughout the revised coverage, language
was added that in the event a termination for cause is subsequently
converted to a termination for convenience, or otherwise withdrawn, the
contracting officer shall ensure that a notice of the conversion or
withdrawal is reported in accordance with FAR 42.1503(f).
6. Timing of Posting of Defective Pricing Information
Five comments were received from two respondents regarding the
timing and posting of defective pricing information.
Comment: The respondents believe that it is not clear that the
intent of this language is to post this information before or after a
defective pricing case has been resolved.
Response: The Councils agree. Language was clarified at FAR 15.407-
1 to add the word ``final'' before determination in the coverage. In
addition, a requirement was added to update PPIRS.
Comment: One respondent expressed concern that posting within 10
days is not likely to happen.
Response: The Councils disagree. There were no objections to the
10-day timeframe made by the agencies during the proposed rule comment
period. The 10-day timeframe was changed to 3 working days to be
synonymous with the requirements of FAPIIS.
Summary of Major Changes to the Proposed Rule
New coverage at FAR 8.406-8 was moved to FAR 8.406-4(e).
Language was clarified at FAR 15.407-1 to add
``contracting officer's final'' before ``determination'' in the
coverage. A requirement was added to update PPIRS.
In FAR 42.1503, the 10-day timeframe was changed to 3
working days to be synonymous with the requirements of FAPIIS. Language
was clarified on what a ``conversion'' is. Language was added to
address agency focal points.
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 does not
impose any additional requirements on small entities. The collection
and reporting of past performance information is an internal process to
the Government. The rule merely puts into effect the internal
requirement that contracting officers report defective cost or pricing
data and terminations for cause or default into PPIRS.
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 Parts 8, 12, 15, 42, and 49
Government procurement.
[[Page 60260]]
Dated: September 21, 2010.
Edward Loeb,
Director, Acquisition Policy Division.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 8, 12, 15, 42, and 49
as set forth below:
0
1. The authority citation for 48 CFR parts 8, 12, 15, 42, and 49
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).
Part 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
0
2. Amend section 8.406-4 by adding paragraph (e) to read as follows:
8.406-4 Termination for cause.
* * * * *
(e) Reporting. An ordering activity contracting officer, in
accordance with agency procedures, shall ensure that information
related to termination for cause notices and any amendments are
reported. In the event the termination for cause is subsequently
converted to a termination for convenience, or is otherwise withdrawn,
the contracting officer shall ensure that a notice of the conversion or
withdrawal is reported. All reporting shall be in accordance with
42.1503(f).
Part 12--ACQUISITION OF COMMERCIAL ITEMS
0
3. Amend section 12.403 by adding paragraph (c)(4) to read as follows:
12.403 Termination.
* * * * *
(c) * * *
(4) The contracting officer, in accordance with agency procedures,
shall ensure that information related to termination for cause notices
and any amendments are reported. In the event the termination for cause
is subsequently converted to a termination for convenience, or is
otherwise withdrawn, the contracting officer shall ensure that a notice
of the conversion or withdrawal is reported. All reporting shall be in
accordance with 42.1503(f).
* * * * *
PART 15--CONTRACTING BY NEGOTIATION
0
4. Amend section 15.407-1 by revising paragraph (d) to read as follows:
15.407-1 Defective cost or pricing data.
* * * * *
(d) For each advisory audit received based on a postaward review
that indicates defective pricing, the contracting officer shall make a
determination as to whether or not the data submitted were defective
and relied upon. Before making such a determination, the contracting
officer should give the contractor an opportunity to support the
accuracy, completeness, and currency of the data in question. The
contracting officer shall prepare a memorandum documenting both the
determination and any corrective action taken as a result. The
contracting officer shall send one copy of this memorandum to the
auditor and, if the contract has been assigned for administration, one
copy to the administrative contracting officer (ACO). A copy of the
memorandum or other notice of the contracting officer's determination
shall be provided to the contractor. When the contracting officer
determines that the contractor submitted defective cost or pricing
data, the contracting officer, in accordance with agency procedures,
shall ensure that information relating to the contracting officer's
final determination is reported in accordance with 42.1503(f). Agencies
shall ensure updated information that changes a contracting officer's
prior final determination is reported into the FAPIIS module of PPIRS
in the event of a--
(1) Contracting officer's decision in accordance with the Contract
Disputes Act;
(2) Board of Contract Appeals decision; or
(3) Court decision.
* * * * *
PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES
0
5. Amend section 42.1502 by adding paragraph (i) to read as follows:
42.1502 Policy.
* * * * *
(i) Agencies shall promptly report other contractor information in
accordance with 42.1503(f).
0
6. Amend section 42.1503 by revising paragraph (a) and adding paragraph
(f) to read as follows:
42.1503 Procedures.
(a) Agency procedures for the past performance evaluation system
shall generally provide for input to the evaluations from the technical
office, contracting office and, where appropriate, end users of the
product or service. Agency procedures shall identify those responsible
for preparing interim and final evaluations. Those individuals
identified may obtain information for the evaluation of performance
from the program office, administrative contracting office, audit
office, end users of the product or service, and any other technical or
business advisor, as appropriate. Interim evaluations shall be prepared
as required, in accordance with agency procedures.
* * * * *
(f) Other contractor information. (1) Agencies shall ensure
information is reported in the FAPIIS module of PPIRS within 3 working
days after a contracting officer--
(i) Issues a final determination that a contractor has submitted
defective cost or pricing data;
(ii) Makes a subsequent change to the final determination
concerning defective cost or pricing data pursuant to 15.407-1(d);
(iii) Issues a final termination for cause or default notice; or
(iv) Makes a subsequent withdrawal or a conversion of a termination
for default to a termination for convenience.
(2) Agencies shall establish focal points and register users to
report data into the FAPIIS module of PPIRS (available at http://
www.cpars.csd.disa.mil, then select FAPIIS). Instructions on reporting
are available at http://www.ppirs.gov and at http://www.ppirs.gov/
fapiis.html.
PART 49--TERMINATION OF CONTRACTS
0
7. Add section 49.402-8 to read as follows:
49.402-8 Reporting information.
The contracting officer, in accordance with agency procedures,
shall ensure that information relating to the termination for default
notice and a subsequent withdrawal or a conversion to a termination for
convenience is reported in accordance with 42.1503(f).
[FR Doc. 2010-24214 Filed 9-28-10; 8:45 am]
BILLING CODE 6820-EP-P