[Federal Register Volume 62, Number 51 (Monday, March 17, 1997)]
[Rules and Regulations]
[Pages 12693-12695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6312]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 9, 35, and 37
[FAC 90-46; FAR Case 94-008; Item III]
RIN 9000-AG86
Federal Acquisition Regulation; Office of Federal Procurement
Policy Letter 93-1, Management Oversight of Service Contracting
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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[[Page 12694]]
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council have agreed on a final rule amending
the Federal Acquisition Regulation (FAR) to provide agency guidance on
the management of service contracts. This regulatory action was not
subject to Office of Management and Budget review under Executive Order
12866, dated September 30, 1993. This is not a major rule under 5
U.S.C. 804.
DATES: Effective May 16, 1997.
FOR FURTHER INFORMATION CONTACT: Mr. Jack O'Neill at (202) 501-3856 in
reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAC 90-46, FAR case 94-008.
SUPPLEMENTARY INFORMATION:
A. Background
On May 24, 1994, the Office of Federal Procurement Policy (OFPP)
reissued, as a final policy letter, and published in the Federal
Register at 59 FR 26818, Policy Letter 93-1, Management Oversight of
Service Contracting. The policy letter provides Governmentwide guiding
principles which are intended to improve the acquisition, management,
and administration of service contracts.
A proposed rule was published in the Federal Register at 61 FR
14946, April 3, 1996, to address FAR implementation of OFPP Policy
Letter 93-1. Two sources submitted comments in response to the proposed
rule. All comments were considered in the development of the final
rule.
B. Regulatory Flexibility Act
A Final Regulatory Flexibility Analysis (FRFA) has been performed
and will be provided to the Chief Counsel for Advocacy of the Small
Business Administration. A copy of the FRFA may be obtained from the
FAR Secretariat. The analysis is summarized as follows:
There were no public comments in response to the Initial
Regulatory Flexibility Analysis. There were approximately 16,662
small businesses with service contracts valued at $25,000 or more in
fiscal year 1996. The rule does not impose any reporting,
recordkeeping, or other compliance requirements upon small entities.
This rule is expected to have a beneficial impact on small and large
entities because the rule emphasizes the need for good Government
management practices. Although this rule does not specifically
propose different procedures for small versus large entities, it
should reduce the economic and administrative burden on small
entities. Consistent with the stated objectives of OFPP Policy
Letter 93-1, routine services, frequently provided by small
entities, will require less oversight than services that tend to
affect Government decision-making, influence policy development, or
affect program management, which are more susceptible to abuse and
require a greater level of scrutiny.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose recordkeeping or information collection
requirements, or collections of information from offerors, contractors,
or members of the public which 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 9, 35, and 37
Government procurement.
Dated: March 7, 1997.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, 48 CFR Parts 9, 35, and 37 are amended as set forth
below:
1. The authority citation for 48 CFR Parts 9, 35, 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 9--CONTRACTOR QUALIFICATIONS
2. Section 9.505-3 is revised to read as follows:
9.505-3 Providing evaluation services.
Contracts for the evaluation of offers for products or services
shall not be awarded to a contractor that will evaluate its own offers
for products or services, or those of a competitor, without proper
safeguards to ensure objectivity to protect the Government's interests.
PART 35--RESEARCH AND DEVELOPMENT CONTRACTING
3. Section 35.017-2 is amended by revising paragraph (i) to read as
follows:
35.017-2 Establishing or changing an FFRDC.
* * * * *
(i) Quantity production or manufacturing is not performed unless
authorized by legislation.
* * * * *
PART 37--SERVICE CONTRACTING
4. Section 37.000 is revised to read as follows:
37.000 Scope of part.
This part prescribes policy and procedures that are specific to the
acquisition and management of services by contract. This part applies
to all contracts for services regardless of the type of contract or
kind of service being acquired. Additional guidance for research and
development services is in part 35; architect-engineering services is
in part 36; information technology is in part 39; and transportation
services is in part 47. Parts 35, 36, 39, and 47 take precedence over
this part in the event of inconsistencies. This part includes, but is
not limited to, contracts for services to which the Service Contract
Act of 1965, as amended, applies (see subpart 22.10).
5. Section 37.102 is amended by adding paragraphs (d) through (g)
to read as follows:
37.102 Policy.
* * * * *
(d) Agency program officials are responsible for accurately
describing the need to be filled, or problem to be resolved, through
service contracting in a manner that ensures full understanding and
responsive performance by contractors and, in so doing, should obtain
assistance from contracting officials, as needed.
(e) Agencies shall establish effective management practices in
accordance with Office of Federal Procurement Policy (OFPP) Policy
Letter 93-1, Management Oversight of Service Contracting, to prevent
fraud, waste, and abuse in service contracting.
(f) Services are to be obtained in the most cost-effective manner,
without barriers to full and open competition, and free of any
potential conflicts of interest.
(g) Agencies shall ensure that sufficiently trained and experienced
officials are available within the agency to manage and oversee the
contract administration function.
6. Subpart 37.5 is added to read as follows:
Subpart 37.5--Management Oversight of Service Contracts
Sec.
37.500 Scope of subpart.
37.501 Definition.
37.502 Exclusions.
37.503 Agency-head responsibilities.
37.504 Contracting officials' responsibilities.
37.500 Scope of subpart.
This subpart establishes responsibilities for implementing Office
of Federal Procurement Policy (OFPP) Policy Letter 93-1, Management
Oversight of Service Contracting.
[[Page 12695]]
37.501 Definition.
Best practices, as used in this subpart, means techniques that
agencies may use to help detect problems in the acquisition,
management, and administration of service contracts. Best practices are
practical techniques gained from experience that agencies may use to
improve the procurement process.
37.502 Exclusions.
(a) This subpart does not apply to services that are
(1) Obtained through personnel appointments and advisory
committees;
(2) Obtained through personal service contracts authorized by
statute;
(3) For construction as defined in 36.102; or
(4) Obtained through interagency agreements where the work is being
performed by in-house Federal employees.
(b) Services obtained under contracts below the simplified
acquisition threshold and services incidental to supply contracts also
are excluded from the requirements of this subpart. However, good
management practices and contract administration techniques should be
used regardless of the contracting method.
37.503 Agency-head responsibilities.
The agency head or designee should ensure that--
(a) Requirements for services are clearly defined and appropriate
performance standards are developed so that the agency's requirements
can be understood by potential offerors and that performance in
accordance with contract terms and conditions will meet the agency's
requirements;
(b) Service contracts are awarded and administered in a manner that
will provide the customer its supplies and services within budget and
in a timely manner;
(c) Specific procedures are in place before contracting for
services to ensure compliance with OFPP Policy Letters 92-1, Inherently
Governmental Functions, 91-2, Service Contracting, and 89-1, Conflicts
of Interest Policies Applicable to Consultants; and
(d) Strategies are developed and necessary staff training is
initiated to ensure effective implementation of the policies in 37.102.
37.504 Contracting officials' responsibilities.
Contracting officials should ensure that ``best practices''
techniques are used when contracting for services and in contract
management and administration (see OFPP Policy Letter 93-1).
[FR Doc. 97-6312 Filed 3-14-97; 8:45 am]
BILLING CODE 6820-EP-P
