[Federal Register: December 13, 2010 (Volume 75, Number 238)]
[Rules and Regulations]
[Page 77733-77737]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13de10-10]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 4, 8, 9, 17, 18, 35, and 41
[FAC 2005-47; FAR Case 2008-032; Item III; Docket 2010-0107, Sequence
1]
RIN 9000-AL69
Federal Acquisition Regulation; Preventing Abuse of Interagency
Contracts
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are issuing an interim rule
amending the Federal Acquisition Regulation (FAR) to implement
provisions regarding, the Duncan Hunter National Defense Authorization
Act (NDAA) for Fiscal Year 2009 requirements for preventing abuse of
interagency contracts.
DATES: Effective Date: December 13, 2010.
Comment Date: Interested parties should submit written comments to
the Regulatory Secretariat on or before February 11, 2011 to be
considered in the formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-47, FAR Case 2008-
032, by any of the following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by inputting ``FAR Case
2008-032'' under the heading ``Enter Keyword or ID'' and selecting
``Search.'' Select the link ``Submit a Comment'' that corresponds with
``FAR Case 2008-032.'' Follow the instructions provided at the ``Submit
a Comment'' screen. Please include your name, company name (if any),
and ``FAR Case 2008-032'' on your attached document.
Mail: General Services Administration, Regulatory
Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE.,
Washington, DC 20417.
Instructions: Please submit comments only and cite FAC 2005-47, FAR
Case 2008-032, in all correspondence related to this case. All comments
received will
[[Page 77734]]
be posted without change to http://www.regulations.gov, including any
personal and/or business confidential information provided.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Ms. Lori Sakalos, Procurement Analyst, at (202) 208-0498. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-47, FAR
Case 2008-032.
SUPPLEMENTARY INFORMATION:
A. Background
Interagency acquisitions offer important benefits to Federal
agencies, including economies and efficiencies and the ability to
leverage resources. This interim rule, which implements section 865 of
the Duncan Hunter National Defense Authorization Act (NDAA) for Fiscal
Year 2009, is designed to ensure these benefits are consistently
achieved. The rule strengthens FAR subpart 17.5, Interagency
Acquisitions, by--
Broadening the scope of coverage to address all
interagency acquisitions (with limited exceptions), rather than just
those conducted under the Economy Act (31 U.S.C. 1535), in recognition
that an increasing number of interagency acquisitions are conducted
under other authorities;
Requiring agencies to support the decision to use an
interagency acquisition with a determination that such action is the
``best procurement approach'';
Directing that assisted acquisitions be accompanied by
written agreements between the requesting agency and the servicing
agency documenting the roles and responsibilities of the respective
parties, including the planning, execution, and administration of the
contract;
Requiring the development of business cases to support the
creation of multi-agency contracts. The Office of Management and Budget
(OMB) is developing additional guidance on the use of business cases;
once the guidance is issued, it will be referenced in the FAR; and
Requiring the senior procurement executive for each
executive agency to submit an annual report on interagency acquisitions
to the Director of OMB, in accordance with section 865(c) of Public Law
110-417.
The interim rule clarifies the meaning of ``interagency
acquisition,'' ``direct acquisition,'' and ``assisted acquisitions''
and moves the terms from FAR subparts 4.6 and 17.5 to FAR part 2. It
also amends FAR subpart 8.4, Federal Supply Schedules, to add a cross
reference to the requirements in subpart 17.5 for orders over $500,000
(a threshold established by statute).
In developing the rule, the Councils reviewed interagency guidance
issued by the Office of Federal Procurement Policy at http://
www.whitehouse.gov/omb/assets/procurement/iac_revised.pdf.
The OMB guidance addresses procedures for the use of interagency
acquisitions to maximize competition, deliver best value to executive
agencies, and minimize waste, fraud, and abuse. In addition, as
required by section 865(a), training on interagency acquisitions has
been made available through the Federal Acquisition Institute (see
http://www.fai.gov/IAA/launchpage.htm).
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 Councils do not expect this interim rule 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 does not impose any additional requirements on small
businesses. The rule is strengthening interagency acquisition
procedures to achieve efficiencies and economies of scale across the
Federal Government. The rule also requires agencies, in the multi-
agency contract business-case analysis, to consider strategies to
ensure small business participation during acquisition planning.
Therefore, an Initial Regulatory Flexibility Analysis has not been
performed. The Councils invite comments from small business concerns
and other interested parties on the expected impact of this rule on
small entities.
The Councils will also consider comments from small entities
concerning the existing regulations in parts affected by this rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAC 2005-47, FAR Case
2008-032) in all 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.
chapter 35, et seq.
D. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense, the Administrator of General Services, and the
Administrator of the National Aeronautics and Space Administration that
urgent and compelling reasons exist to promulgate this interim rule
without prior opportunity for public comment. This action is necessary
because section 865(b) of the Duncan Hunter National Defense
Authorization Act for Fiscal Year 2009 (Pub. L. 110-417) required the
publication of the regulations within one year after enactment, October
14, 2008. However, pursuant to 41 U.S.C. 418b and FAR 1.501-3(b), the
Councils will consider public comments received in response to this
interim rule in the formation of the final rule.
List of Subjects in 48 CFR Parts 2, 4, 8, 9, 17, 18, 35, and 41
Government procurement.
Dated: November 24, 2010.
Millisa Gary,
Acting Director, Acquisition Policy Division.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 8, 9, 17, 18,
35, and 41 as set forth below:
0
1. The authority citation for 48 CFR parts 2, 4, 8, 9, 17, 18, 35, and
41 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 2--DEFINITIONS OF WORDS AND TERMS
0
2. Amend section 2.101 in paragraph (b)(2) by--
0
a. Adding, in alphabetical order, the definitions ``Assisted
acquisition'', ``Direct acquisition'', and ``Interagency acquisition'';
0
b. Amending the definition ``Multi-agency contract (MAC)'' by removing
``17.500(b)'' and adding ``17.502-2'' in its place; and
0
c. Adding, in alphabetical order, the definitions ``Requesting
agency'', and ``Servicing agency''.
The added text reads as follows:
2.101 Definitions.
* * * * *
(b) * * *
(2) * * *
Assisted acquisition means a type of interagency acquisition where
a servicing agency performs acquisition activities on a requesting
agency's behalf, such as awarding and
[[Page 77735]]
administering a contract, task order, or delivery order.
* * * * *
Direct acquisition means a type of interagency acquisition where a
requesting agency places an order directly against a servicing agency's
indefinite-delivery contract. The servicing agency manages the
indefinite-delivery contract but does not participate in the placement
or administration of an order.
* * * * *
Interagency acquisition means a procedure by which an agency
needing supplies or services (the requesting agency) obtains them from
another agency (the servicing agency), by an assisted acquisition or a
direct acquisition. The term includes--
(1) Acquisitions under the Economy Act (31 U.S.C. 1535); and
(2) Non-Economy Act acquisitions completed under other statutory
authorities (e.g., General Services Administration Federal Supply
Schedules in subpart 8.4 and Governmentwide acquisition contracts
(GWACs)).
* * * * *
Requesting agency means the agency that has the requirement for an
interagency acquisition.
* * * * *
Servicing agency means the agency that will conduct an assisted
acquisition on behalf of the requesting agency.
* * * * *
PART 4--ADMINISTRATIVE MATTERS
4.601 [Amended]
0
3. Amend section 4.601 by removing the definitions ``Assisted
acquisition'', ``Direct acquisition'', ``Requesting agency'', and
``Servicing agency''.
PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
0
4. Amend section 8.404 by revising paragraph (b) to read as follows:
8.404 Use of Federal Supply Schedules.
* * * * *
(b)(1) The contracting officer, when placing an order or
establishing a BPA, is responsible for applying the regulatory and
statutory requirements applicable to the agency for which the order is
placed or the BPA is established. The requiring agency shall provide
the information on the applicable regulatory and statutory requirements
to the contracting officer responsible for placing the order.
(2) For orders over $500,000, see subpart 17.5 for additional
requirements for interagency acquisitions. For example, the requiring
agency shall make a determination that use of the Federal Supply
Schedule is the best procurement approach, in accordance with 17.502-
1(a).
* * * * *
PART 9--CONTRACTOR QUALIFICATIONS
9.106-3 [Amended]
0
5. Amend section 9.106-3 by removing the word ``accommodated'' and
adding the words ``accommodated (also see subpart 17.5)'' in its place.
PART 17--SPECIAL CONTRACTING METHODS
0
6. Revise subpart 17.5 to read as follows:
Subpart 17.5--Interagency Acquisitions
Sec.
17.500 Scope of subpart.
17.501 General.
17.502 Procedures.
17.502-1 General.
17.502-2 The Economy Act.
17.503 Ordering procedures.
17.504 Reporting requirements.
17.500 Scope of subpart.
(a) This subpart prescribes policies and procedures applicable to
all interagency acquisitions under any authority, except as provided
for in paragraph (b) of this section.
(b) This subpart does not apply to orders of $500,000 or less
issued against Federal Supply Schedules.
17.501 General.
(a) Interagency acquisitions are commonly conducted through
indefinite-delivery contracts, such as task- and delivery-order
contracts. The indefinite-delivery contracts used most frequently to
support interagency acquisitions are Federal Supply Schedules (FSS),
Governmentwide acquisition contracts (GWACs), and multi-agency
contracts (MACs).
(b) An agency shall not use an interagency acquisition to
circumvent conditions and limitations imposed on the use of funds.
(c) An interagency acquisition is not exempt from the requirements
of subpart 7.3, Contractor Versus Government Performance.
(d) An agency shall not use an interagency acquisition to make
acquisitions conflicting with any other agency's authority or
responsibility (for example, that of the Administrator of General
Services under title 40, United States Code, ``Public Buildings,
Property and Works'' and title III of the Federal Property and
Administrative Services Act of 1949.)
17.502 Procedures.
17.502-1 General.
(a) Determination of best procurement approach--(1) Assisted
acquisitions. Prior to requesting that another agency conduct an
acquisition on its behalf, the requesting agency shall make a
determination that the use of an interagency acquisition represents the
best procurement approach. As part of the best procurement approach
determination, the requesting agency shall obtain the concurrence of
the requesting agency's responsible contracting office in accordance
with internal agency procedures. At a minimum, the determination shall
include an analysis of procurement approaches, including an evaluation
by the requesting agency that using the acquisition services of another
agency--
(i) Satisfies the requesting agency's schedule, performance, and
delivery requirements (taking into account factors such as the
servicing agency's authority, experience, and expertise as well as
customer satisfaction with the servicing agency's past performance);
(ii) Is cost effective (taking into account the reasonableness of
the servicing agency's fees); and
(iii) Will result in the use of funds in accordance with
appropriation limitations and compliance with the requesting agency's
laws and policies.
(2) Direct acquisitions. Prior to placing an order against another
agency's indefinite-delivery vehicle, the requesting agency shall make
a determination that use of another agency's contract vehicle is the
best procurement approach. At a minimum, the determination shall
include an analysis, including factors such as:
(i) The suitability of the contract vehicle;
(ii) The value of using the contract vehicle, including--
(A) The administrative cost savings from using an already existing
contract;
(B) Lower prices, greater number of vendors, and reasonable vehicle
access fees; and
(iii) The expertise of the requesting agency to place orders and
administer them against the selected contract vehicle throughout the
acquisition lifecycle.
(b) Written agreement on responsibility for management and
administration--(1) Assisted acquisitions. (i) Prior to the issuance of
a solicitation, the servicing agency and the requesting agency shall
both sign a
[[Page 77736]]
written interagency agreement that establishes the general terms and
conditions governing the relationship between the parties, including
roles and responsibilities for acquisition planning, contract
execution, and administration and management of the contract(s) or
order(s). The requesting agency shall provide to the servicing agency
any unique terms, conditions, and applicable agency-specific statutes,
regulations, directives, and other applicable requirements for
incorporation into the order or contract; for patent rights, see
27.304-2. In preparing interagency agreements to support assisted
acquisitions, agencies should review the Office of Federal Procurement
Policy guidance, Interagency Acquisitions, available at http://
www.whitehouse.gov/omb/assets/procurement/iac_revised.pdf.
(ii) Each agency's file shall include the interagency agreement
between the requesting and servicing agency, and shall include
sufficient documentation to ensure an adequate audit consistent with
4.801(b).
(2) Direct acquisitions. The requesting agency administers the
order; therefore, no written agreement with the servicing agency is
required.
17.502-2 The Economy Act.
(a) The Economy Act (31 U.S.C. 1535) authorizes agencies to enter
into agreements to obtain supplies or services by interagency
acquisition. The Economy Act also provides authority for placement of
orders between major organizational units within an agency; procedures
for such intra-agency transactions are addressed in agency regulations.
(b) The Economy Act applies when more specific statutory authority
does not exist. Examples of more specific authority are 40 U.S.C. 501
for the Federal Supply Schedules (subpart 8.4), and 40 U.S.C. 11302(e)
for Governmentwide acquisition contracts (GWACs).
(c) Requirements for determinations and findings. (1) Each Economy
Act order to obtain supplies or services by interagency acquisition
shall be supported by a determination and findings (D&F). The D&F shall
state that--
(i) Use of an interagency acquisition is in the best interest of
the Government; and
(ii) The supplies or services cannot be obtained as conveniently or
economically by contracting directly with a private source.
(2) If the Economy Act order requires contract action by the
servicing agency, the D&F must also include a statement that at least
one of the following circumstances applies:
(i) The acquisition will appropriately be made under an existing
contract of the servicing agency, entered into before placement of the
order, to meet the requirements of the servicing agency for the same or
similar supplies or services.
(ii) The servicing agency has the capability or expertise to enter
into a contract for such supplies or services that is not available
within the requesting agency.
(iii) The servicing agency is specifically authorized by law or
regulation to purchase such supplies or services on behalf of other
agencies.
(3) The D&F shall be approved by a contracting officer of the
requesting agency with authority to contract for the supplies or
services to be ordered, or by another official designated by the agency
head, except that, if the servicing agency is not covered by the
Federal Acquisition Regulation, approval of the D&F may not be
delegated below the senior procurement executive of the requesting
agency.
(4) The requesting agency shall furnish a copy of the D&F to the
servicing agency with the order.
(d) Business-case analysis requirements for multi-agency contracts.
In order to establish a multi-agency contract in accordance with
Economy Act authority, a business-case analysis must be prepared by the
servicing agency. The business-case analysis shall--
(1) Consider strategies for the effective participation of small
businesses during acquisition planning (see 7.103(s));
(2) Detail the administration of such contract, including an
analysis of all direct and indirect costs to the Government of awarding
and administering such contract;
(3) Describe the impact such contract will have on the ability of
the Government to leverage its purchasing power, e.g., will it have a
negative effect because it dilutes other existing contracts;
(4) Include an analysis concluding that there is a need for
establishing the multi-agency contract; and
(5) Document roles and responsibilities in the administration of
the contract.
(e) Payment. (1) The servicing agency may ask the requesting
agency, in writing, for advance payment for all or part of the
estimated cost of furnishing the supplies or services. Adjustment on
the basis of actual costs shall be made as agreed to by the agencies.
(2) If approved by the servicing agency, payment for actual costs
may be made by the requesting agency after the supplies or services
have been furnished.
(3) Bills rendered or requests for advance payment shall not be
subject to audit or certification in advance of payment.
(4) If the Economy Act order requires use of a contract by the
servicing agency, then in no event shall the servicing agency require,
or the requiring agency pay, any fee or charge in excess of the actual
cost (or estimated cost if the actual cost is not known) of entering
into and administering the contract or other agreement under which the
order is filled.
17.503 Ordering procedures.
(a) Before placing an order for supplies or services with another
Government agency, the requesting agency shall follow the procedures in
17.502-1 and, if under the Economy Act, also 17.502-2.
(b) The order may be placed on any form or document that is
acceptable to both agencies. The order should include--
(1) A description of the supplies or services required;
(2) Delivery requirements;
(3) A funds citation;
(4) A payment provision (see 17.502-2(e) for Economy Act orders);
and
(5) Acquisition authority as may be appropriate (see 17.503(d)).
(c) The requesting and servicing agencies should agree to
procedures for the resolution of disagreements that may arise under
interagency acquisitions, including, in appropriate circumstances, the
use of a third-party forum. If a third party is proposed, consent of
the third party should be obtained in writing.
(d) When an interagency acquisition requires the servicing agency
to award a contract, the following procedures also apply:
(1) If a justification and approval or a D&F (other than the
requesting agency's D&F required in 17.502-2(c)) is required by law or
regulation, the servicing agency shall execute and issue the
justification and approval or D&F. The requesting agency shall furnish
the servicing agency any information needed to make the justification
and approval or D&F.
(2) The requesting agency shall also be responsible for furnishing
other assistance that may be necessary, such as providing information
or special contract terms needed to comply with any condition or
limitation applicable to the funds of the requesting agency.
(3) The servicing agency is responsible for compliance with all
other legal or regulatory requirements applicable to the contract,
including--
[[Page 77737]]
(i) Having adequate statutory authority for the contractual action;
and
(ii) Complying fully with the competition requirements of part 6
(see 6.002). However, if the servicing agency is not subject to the
Federal Acquisition Regulation, the requesting agency shall verify that
contracts utilized to meet its requirements contain provisions
protecting the Government from inappropriate charges (for example,
provisions mandated for FAR agencies by part 31), and that adequate
contract administration will be provided.
(e) Nonsponsoring Federal agencies may use a Federally Funded
Research and Development Center (FFRDC) only if the terms of the
FFRDC's sponsoring agreement permit work from other than a sponsoring
agency. Work placed with the FFRDC is subject to the acceptance by the
sponsor and must fall within the purpose, mission, general scope of
effort, or special competency of the FFRDC. (See 35.017; see also 6.302
for procedures to follow where using other than full and open
competition.) The nonsponsoring agency shall provide to the sponsoring
agency necessary documentation that the requested work would not place
the FFRDC in direct competition with domestic private industry.
17.504 Reporting requirements.
The senior procurement executive for each executive agency shall
submit to the Director of OMB an annual report on interagency
acquisitions, as directed by OMB.
PART 18--EMERGENCY ACQUISITIONS
0
7. Amend section 18.113 by revising the section heading to read as
follows:
18.113 Interagency acquisitions.
* * * * *
PART 35--RESEARCH AND DEVELOPMENT CONTRACTING
0
8. Amend section 35.017-3 by revising the second sentence of paragraph
(b) to read as follows:
35.017-3 Using an FFRDC.
* * * * *
(b) * * * The nonsponsoring agency is responsible for making the
determination required by 17.502-2(c) and providing the documentation
required by 17.503(e). * * *
PART 41--ACQUISITION OF UTILITY SERVICES
0
9. Revise section 41.206 to read as follows:
41.206 Interagency agreements.
Agencies shall use interagency agreements (e.g., consolidated
purchase, joint use, or cross-service agreements) when acquiring
utility service or facilities from other Government agencies and shall
comply with the policies and procedures at 17.502-2, The Economy Act.
[FR Doc. 2010-30561 Filed 12-10-10; 8:45 am]
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