[Federal Register: June 16, 2010 (Volume 75, Number 115)]
[Rules and Regulations]
[Page 34273-34276]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16jn10-20]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 5, 6, 13, and 24
[FAC 2005-42; FAR Case 2008-003 Item IV; Docket 2008-0001, Sequence 27]
RIN 9000-AL13
Federal Acquisition Regulation; FAR Case 2008-003, Public
Disclosure of Justification and Approval Documents for Noncompetitive
Contracts--Section 844 of the National Defense Authorization Act for
Fiscal Year 2008
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have adopted as final, with
changes, an interim rule amending the Federal Acquisition Regulation
(FAR) to implement the National Defense Authorization Act for Fiscal
Year 2008, Section 844 ``Public Disclosure of Justification and
Approval Documents for Noncompetitive Contracts'' (FY08 NDAA). Section
844 of the FY08 NDAA stipulates the requirements regarding the public
availability of justifications and approval documents after the award
of Federal contracts, except for information exempt from public
disclosure.
DATES: Effective Date: July 16, 2010.
FOR FURTHER INFORMATION CONTACT: Ernest Woodson, Procurement Analyst,
at (202) 501-3775, for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat at (202) 501-4755. Please cite FAC 2005-42, FAR Case 2008-
003.
SUPPLEMENTARY INFORMATION:
A. Background
The National Defense Authorization Act for Fiscal Year 2008, Pub.
L. 110-181, Section 844, entitled ``Public Disclosure of Justification
and Approval Documents for Noncompetitive Contracts,'' amends 10 U.S.C.
2304 and 41 U.S.C. 253 regarding procurements made under subsection (c)
(i.e., other than competitive procedures) to require public
availability of the justification and approval (J&A) documents after
contract award, except for information exempt from public disclosure
under 5 U.S.C. 552. The provisions of section 844 require the head of
an executive agency to make certain J&A documents relating to the use
of noncompetitive procedures in contracting available on the website of
an agency and through a governmentwide website selected by the
Administrator for Federal Procurement Policy (OFPP) within 14 days of
contract award. In the case of noncompetitive contracts awarded on the
basis of unusual and compelling urgency, the documents must be posted
within 30 days of contract award. The Competition in Contracting Act
(Pub. L. 98-369) already requires that such J&A documents be made
available for public inspection, subject to the exemptions from public
disclosure provided in the Freedom of Information Act (FOIA) (5 U.S.C.
552).
The interim rule was published in the Federal Register at 74 FR
2731 on January 15, 2009, with an effective date of February 17, 2009,
and a request for comments by March 16, 2009.
Nine respondents submitted nineteen comments in response to the
interim rule. There were six categories of comments. These categories
were applicability, exceptions, Federal Business Opportunities
(FedBizOpps), protests, FOIA, and veterans.
Below are the comments received on the interim rule along with the
responses developed by the Councils.
[[Page 34274]]
Applicability:
1. Comment: The rule states that the posting requirement applies to
all contracts awarded under FAR 6.303-1 J&A documents. Is the intent to
include sole-source justifications prepared under FAR subpart 13.5?
Response: Section 844 of the FY08 NDAA requires posting of
documents containing the J&A required by subsection (f)(1) of 10 U.S.C.
2304 or 41 U.S.C. 253. Subsection (g) of those statutes provides for
streamlined procedures that promote efficiency and economy in
contracting and avoid unnecessary burdens for agencies and contractors
for purchases not greater than the simplified acquisition threshold and
for purchases made pursuant to the commercial-items test program.
Accordingly, FAR 6.001 states that part 6 does not apply to
acquisitions for contracts awarded using the simplified acquisition
procedures and adds a reference to FAR 13.501 for the requirements
pertaining to sole-source acquisitions of commercial items over the
simplified acquisition threshold under subpart 13.5. FAR 13.501
implemented 10 U.S.C. 4052(g), which stipulates that an executive
agency may not conduct a purchase on a sole-source basis unless the
need to do so is justified in writing and approved in accordance with
10 U.S.C. 2304 or 41 U.S.C. 253. Thus, 10 U.S.C. 4052(g) imposed a
justification process on sole-source actions over the simplified
acquisition threshold done under the commercial-items test program.
Similarly, though section 844 does not require posting of the FAR
13.501 J&As document, the Councils recommend, as a matter of policy,
that J&As required by FAR 13.501 also be posted on FedBizOpps. Such
posting is consistent with the President's focus on creating a ``New
Era of Open Government'' and is reasonable because these actions exceed
the simplified acquisition threshold and posting could enhance
opportunities for competition on future requirements of such commercial
items. It is also consistent with the existing requirement (FAR
5.102(a)(6)) to post a brand name justification in FedBizOpps along
with the solicitation. Therefore, the rule has been revised to include
the requirement to post FAR 13.501 justifications.
2. Comment: The rule states that the posting requirement applies to
all contracts awarded under FAR 6.303-1 J&A document. Is the intent to
include limited-source justifications for orders placed under Federal
Supply Schedules in accordance with FAR 8.405-6?
Response: The posting requirement of Section 844 of the FY08 NDAA
pertains to J&As executed pursuant to FAR subpart 6.3, it does not
apply to the placement of orders under the Federal Supply Schedules.
However, a separate FAR Case will implement section 843 of the NDAA,
which requires posting of sole source task or delivery orders in excess
of the Simplified Acquisition Threshold that are placed against
multiple award contracts.
Exceptions:
3. Comment: Will there be a dollar threshold for when we need to
post the J&A to the FedBizOpps website?
Response: There is no dollar threshold that triggers the
requirement to post the J&A.
4. Comment: If a purchase meets an exception at FAR 5.202 does it
need to be posted? Recommend making exceptions to posting J&A
consistent with the FAR exceptions to posting synopses (FAR 5.202),
solicitation (FAR 5.102(a)(5)), or contract awards (FAR 5.301(b)).
Response: The exceptions provided at FAR 5.102, 5.202, and 5.301
all derive from section 18 of the Office of Federal Procurement Policy
(OFPP) Act. The requirement to make the J&A available for public
inspection is not a new requirement, but previously implemented 10
U.S.C. 2304(f)(4) and 41 U.S.C. 253(f)(4). Only the requirement to post
the J&A is new. Section 844 of the FY08 NDAA requires posting of the
J&A and provides for exclusion of information exempt from public
disclosure under section 552 of Title 5 U.S.C. (FOIA). As such, the FAR
exceptions cannot automatically be applied to the posting of J&A. The
Councils revised FAR 6.305 to add a new paragraph (e) to recognize
that, in addition to redacting information in the J&A consistent with
FOIA exemptions, there may also be cases where the J&A itself would be
exempted from being posted per the FOIA exemptions. One such instance
is when posting the J&A would disclose the executive agency's needs and
disclosure would compromise national security or create other security
risks. The Councils added this specific exception to the FAR because it
is clearly consistent with FOIA and FAR 5.102, 5.202, and 5.301. Any
other FOIA exemption that might authorize not posting the J&A must be
determined in accordance with FAR subpart 24.2.
5. Comment: Under FAR 5.202(a), there are several items that would
prevent the agency from posting information available on the web for a
pre-solicitation announcement. Currently, there is no such exception to
posting the J&A, which can lead to a situation where the J&A gets
posted while the award does not. When this happens, FedBizOpps rejects
posting the J&A because it can't find the related award. FedBizOpps
also rejects the J&A when a previously posted award has been placed in
archive status.
Response: The Councils have confirmed that FedBizOpps allows for
the posting of a J&A even if there was no prior synopsis.
6. Comment: A major concern for members of the intelligence
community regards the potential security threat from publication of
even unclassified material. Publicizing systems designed with the
broader community in mind cannot always protect the sensitive but
unclassified nature of the intelligence business. If this new
requirement cannot be deleted in whole, then they request an exemption
to the public disclosure requirement for the Office of the Director of
National Intelligence until an ancillary classified database is
developed for the intelligence community and others with sensitive
information.
Response: The contracting officer already has the authority to
determine when not to disclose information that would compromise
national security or create other security risks, for example per FOIA
exemptions 1 and 7. However, as explained in the response to comment 4,
the Councils did revise FAR 6.305 to recognize that, in addition to
redacting information in the J&A consistent with FOIA exemptions, there
may also be cases where the J&A itself would be exempted from being
posted per the FOIA exemptions.
Websites:
7. Comment: Is the award number a fill in-the-blank for FedBizOpps?
Will the award date be a fill in-the-box? It would be helpful so
vendors know that it was already awarded.
Response: When the Government is posting a J&A to FedBizOpps, it
has the option of associating the J&A with an existing award notice in
the system. In this case, the system will automatically populate the
contract award number and award date. Otherwise, the Government will
need to manually enter the contract award number and award date into
the J&A notice form. (Note: An award number is not required for a
brand-name J&A since a brand name J&A must be posted with the
solicitation.)
Protests:
8. Comment: When a vendor sees a J&A posted, will they have protest
rights?
[[Page 34275]]
Response: The statute did not change any protest rights, including
any timeliness requirements. The rationale for posting is just to make
the process more transparent.
9. Comment: One commenter recommends the rule should recognize the
date publicized on FedBizOpps as the date upon which a basis of protest
is known under GAO rules of procedure. Another commenter states that if
the protest timeliness rules are revised, there will likely be more
protests.
Response: Timeliness requirements have not been revised by the
statute. The Councils cannot unilaterally change either the Government
Accounting Office (GAO) timeliness rules or Court of Federal Claims
statutory jurisdiction. This rule is merely to make the process more
transparent and help contractors to be apprised of possible future
requirements that in the past were awarded on a sole source basis.
10. Comment: The commenter wants to know why the Government is
waiting up to 14 days as this will not help protesters compete, and if
a protest is lodged, could result in delays and additional cost to the
Government.
Response: The intent is not to help protesters compete for the
current requirement, but for the future. Section 844 of the FY08 NDAA,
which this rule implements, states that the J&A must be made publicly
available within 14 days after contract award.
Freedom of Information Act (FOIA):
11. Comment: One commenter stated FAR 6.305(c) requires contracting
officers to be guided by FOIA exemptions. FOIA procedures address very
specific mechanisms and timelines for review and release of
information. Referencing FOIA procedures implies that the contracting
officer should consult with the sole source contractor prior to release
of information. The commenter questions whether such a step could be
accomplished within the 14-day to 30-day requirement. Another commenter
recommends that contractors be given the right to review J&A documents
prior to release to ensure no proprietary information is included in
the document, consistent with FOIA.
Response: These commenters are referring to the requirements of
Executive Order 12600, that agencies establish procedures to notify
submitters of records containing confidential commercial information,
the disclosure of which the department or agency has reason to believe
could reasonably be expected to cause substantial competitive harm,
when those records are requested under the FOIA.
This executive order applies to the FOIA process that is used to
determine financial information that might be exempt from public
disclosure. Section 844 of the FY08 NDAA states only that the
requirement to post J&As does not require the public availability of
information that is exempt from public disclosure under FOIA. It does
not mandate the FOIA process.
Additionally, FAR 5.102(a)(6) and 5.705(b) also require posting of
J&As for brand name and the rationale for non-competitive awards in
support of the Recovery Act, respectively. The FAR requires that these
documents be redacted as necessary to preclude disclosure of
proprietary information or information that would otherwise compromise
national security. In these instances, the FOIA exemptions to public
disclosure apply, but not the FOIA process.
Even though the FOIA process and, specifically, the submitter
notification process in Executive Order 12600 do not apply, the
Councils recognize there is an obligation to ensure that contractor
proprietary information is not revealed. To ensure this does not
happen, the Councils added language at FAR 6.305(e) that the
contracting officer should provide the contractor an opportunity to
review, but that this process must not delay posting within the
established timelines.
12. Comment: Recommend FAR 6.305 be revised to clarify that
contracting officers shall remove information from J&As that reveals
sensitive or unclassified information such as Operations Security
(OPSEC) that could harm the Government if released to the public.
Response: See Council's responses to comments 4 and 6.
13. Comment: Recommend removing names, titles, telephone numbers
and email addresses of Government employees who develop, review, or
approve the J&A, except for publicly known points of contact, such as
buyers or contracting officers to protect key Government personnel from
harm and to funnel queries from potential offerors to appropriate
contracting personnel.
Response: Agencies have the flexibility to establish procedures
whereby the actual J&A document includes only the names that the FAR
requires for certification (FAR 6.303-2(a)(12) and (b)) and approval
(FAR 6.304) purposes.
14. Comment: Recommend removing estimated values from the J&As that
could reveal the Government's negotiating position on future buys.
Response: FAR 6.305(e) states that ``(c)ontracting officers shall
also be guided by the exemptions to disclosure of information contained
in the Freedom of Information Act[hellip]''. Therefore, additional
detail on information that is exempt from release, e.g., estimated
values, should not be in the FAR. Attempting to provide guidance in the
FAR would most likely not list all possibilities, thereby creating the
dangerous interpretation that, if it is not listed, it can be released.
However, the contracting officer should consult as necessary with the
local FOIA office and counsel to determine which information should be
exempt from disclosure.
15. Comment: Recommend issuing implementing guidance on what to
redact to promote consistency in understanding and application.
Response: See Council's response to comment number 14. The FAR is
not the governing regulatory document for FOIA. Each agency's
implementation of FOIA is located in its respective title of the Code
of Federal Regulations. The interim rule amended the FOIA part of the
FAR at 24.203(b) to add a reference to the excellent FOIA resources
available from the Department of Justice.
16. Comment: A commenter asked how long a J&A posted on an agency
website must remain available for public inspection.
Response: FedBizOpps requires a 30-day minimum posting requirement,
although agencies are not precluded from posting the J&A for a longer
period of time. The final rule revises FAR 6.305 to state J&As must
remain posted for a minimum of 30 days.
17. Comment: The commenter recommends the Councils consider
integrating the J&A documents into the database located at
www.usaspending.gov.
Response: The law requires posting on the agency website and
through a governmentwide website selected by the Administrator for
Federal Procurement Policy. The Administrator for Federal Procurement
Policy selected FedBizOpps as the governmentwide website.
Veterans:
18. Comment: This interim rule is an obstacle to veteran-owned
small businesses obtaining Federal business opportunities on a sole
source basis, which was the intent of Pub. L. 109-461. Contracting
officers will see section 844 as reinforcing their position that
soliciting on a competitive basis will provide a fair and reasonable
price without having to prepare a J&A.
[[Page 34276]]
Response: This interim rule does not alter the criteria that must
be satisfied before making a decision that an acquisition will be
conducted on a sole-source basis. It also does not alter what
documentation must be prepared to support that decision. This interim
rule does not impact the authority the Department of Veterans Affairs
was given under Pub. L. 109-461 to conduct noncompetitive sourcing
under certain conditions or the procedures that the Department of
Veterans Affairs puts in place to carry out noncompetitive sourcing.
This interim rule merely states that, if a justification for other than
full and open competition is issued pursuant to FAR 6.303-1 or 13.501,
then that justification must be made publically available on the
Government Point of Entry (GPE) website and the agency's website.
19. Comment: This interim rule is just another obstacle to the
Department of Veterans Affairs determining how to implement Pub. L.
109-461.
Response: The interim rule implementing section 844 of the FY08
NDAA has no direct bearing on the implementation of Pub. L. 109-461.
Changes to the Interim rule. The final rule:
Adds a new paragraph FAR 6.305(c) to require that, if the
justification is a brand-name justification under FAR 6.302-1(c), then
it must be posted with the solicitation;
Requires that the justification remain posted for a minimum
of 30 days;
Adds a new paragraph FAR 6.305(f), to clarify that posting
the justification does not apply if it would disclose the executive
agency's needs and disclosure of such needs would compromise national
security or create other security risks; and
Establishes procedures at FAR 13.501 similar to procedures
at FAR 6.305(b), 6.305(d), 6.305(e), and 6.305(f).
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 addresses
internal Federal agency procedures and will benefit small business
entities by providing the opportunity for the review of J&A documents
for contracts awarded noncompetitively, thereby increasing the
opportunity for competition for future awards.
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 5, 6, 13, and 24
Government procurement.
Dated: June 2, 2010.
Edward Loeb,
Acting Director, Acquisition Policy Division.
0
Accordingly, the interim rule published in the Federal Register at 74
FR 2731 on January 15, 2009, is adopted as a final rule with the
following changes:
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1. The authority citation for 48 CFR parts 6 and 13 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 6--COMPETITION REQUIREMENTS
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2. Revise section 6.305 to read as follows:
6.305 Availability of the justification.
(a) The agency shall make publicly available the justification
required by 6.303-1 as required by 10 U.S.C. 2304(l) and 41 U.S.C.
253(j). Except for the circumstances in paragraphs (b) and (c) of this
section, the justification shall be made publicly available within 14
days after contract award.
(b) In the case of a contract award permitted under 6.302-2, the
justification shall be posted within 30 days after contract award.
(c) In the case of a brand name justification under 6.302-1(c), the
justification shall be posted with the solicitation (see 5.102(a)(6)).
(d) The justifications shall be made publicly available--
(1) At the Government Point of Entry (GPE) www.fedbizopps.gov;
(2) On the website of the agency, which may provide access to the
justifications by linking to the GPE; and
(3) Must remain posted for a minimum of 30 days.
(e) Contracting officers shall carefully screen all justifications
for contractor proprietary data and remove all such data, and such
references and citations as are necessary to protect the proprietary
data, before making the justifications available for public inspection.
Contracting officers shall also be guided by the exemptions to
disclosure of information contained in the Freedom of Information Act
(5 U.S.C. 552) and the prohibitions against disclosure in 24.202 in
determining whether the justification, or portions of it, are exempt
from posting. Although the submitter notice process set out in EO
12600, entitled ``Predisclosure Notification Procedures for
Confidential Commercial Information,'' does not apply, if the
justification appears to contain proprietary data, the contracting
officer should provide the contractor that submitted the information an
opportunity to review the justification for proprietary data, before
making the justification available for public inspection, redacted as
necessary. This process must not prevent or delay the posting of the
justification in accordance with the timeframes required in paragraphs
(a) through (c).
(f) The requirements of paragraphs (a) through (d) do not apply if
posting the justification would disclose the executive agency's needs
and disclosure of such needs would compromise national security or
create other security risks.
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
0
3. Amend section 13.501 by--
0
a. Removing from paragraph (a)(1)(i) ``section; and'' and adding
``section;'' in its place;
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b. Removing from paragraph (a)(1)(ii) ``(41 U.S.C. 428a).'' and adding
``(41 U.S.C. 428a);'' in its place; and
0
c. Adding paragraphs (a)(1)(iii) and (a)(1)(iv) to read as follows:
13.501 Special documentation requirements.
(a) * * *
(1) * * *
(iii) Make publicly available the justifications (excluding brand
name) required by 6.305(a) within 14 days after contract award or in
the case of unusual and compelling urgency within 30 days after
contract award, in accordance with 6.305 procedures at paragraphs (b),
(d), (e), and (f); and
(iv) Make publicly available brand name justifications with the
solicitation, in accordance with 5.102(a)(6).
[FR Doc. 2010-14216 Filed 6-15-10; 8:45 am]
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