02-10097. Defense Federal Acquisition Regulation Supplement; Competition Requirements for Purchases From a Required Source

AGENCY:

Department of Defense (DoD).

ACTION:

Interim rule with request for comments.

SUMMARY:

DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 811 of the Fiscal Year 2002 National Defense Authorization Act. Section 811 requires DoD to conduct market research before purchasing a product listed in the Federal Prison Industries (FPI) catalog, to determine whether the FPI product is comparable in price, quality, and time of delivery to products available from the private sector.

DATES:

Effective date: April 26, 2002.

Comment date: Comments on the interim rule should be submitted to the address shown below on or before June 25, 2002, to be considered in the formation of the final rule.

ADDRESSES:

Respondents may submit comments directly on the World Wide Web at http://emissary.acq.osd.mil/​dar/​dfars.nsf/​pubcomm. As an alternative, respondents may e-mail comments to: [e-mail]. Please cite DFARS Case 2002-D003 in the subject line of e-mailed comments.

Respondents that cannot submit comments using either of the above methods may submit comments to: Defense Acquisition Regulations Council, Attn: Ms. Susan Schneider, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; facsimile [phone]. Please cite DFARS Case 2002-D003.

As a test, public comments will be posted on the World Wide Web as they are received. Interested parties may view the public comments at http://emissary.acq.osd.mil/​dar/​dfars.nsf.

FOR FURTHER INFORMATION CONTACT:

Ms. Susan Schneider, [phone].

SUPPLEMENTARY INFORMATION:

A. Background

This interim rule amends the DFARS to implement Section 811 of the Fiscal Year 2002 National Defense Authorization Act (Public Law 107-107). Section 811 requires DoD to conduct market research before purchasing a product listed in the FPI catalog, to determine whether the FPI product is comparable in price, quality, and time of delivery to products available from the private sector. If the FPI product is not comparable, DoD must use competitive procedures to acquire the product. In conducting such a competition, DoD must consider a timely offer from FPI for award in accordance with the specifications and evaluation factors in the solicitation.

This rule was subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

This rule may 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 will permit small entities to compete with FPI for DoD contract awards under certain conditions. An initial regulatory flexibility analysis has been prepared and is summarized as follows: This interim rule amends DoD policy pertaining to the acquisition of products from FPI. The rule implements new statutory requirements. The impact of the rule is unknown at this time. However, the rule could benefit small business concerns that offer products comparable to those listed in the FPI catalog, by permitting those concerns to compete for DoD contract awards.

A copy of the analysis may be obtained from the point of contact specified herein. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2002-D003.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

D. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 811 of the Fiscal Year 2002 National Defense Authorization Act (Public Law 107-107). Section 811 requires DoD to conduct market research before purchasing a product listed in the FPI catalog to determine whether the FPI product is comparable to products available from the private sector. If the FPI product is not comparable, DoD must use competitive procedures to acquire the product. Section 811 became effective on October 1, 2001. Comments received in response to this interim rule will be considered in the formation of the final rule.

List of Subjects in 48 CFR Parts 208 and 210

• Government procurement

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Therefore, 48 CFR Parts 208 and 210 are amended as follows:

1. The authority citation for 48 CFR Part 208 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 208—REQUIRED SOURCES OF SUPPLIES AND SERVICES

2. Section 208.602 is added to read as follows:

208.602

Policy.

(a) Before purchasing a product listed in the FPI Schedule, departments and agencies shall conduct market research to determine whether the FPI product is comparable to products available from the private sector that best meet the Government's needs in terms of price, quality, and time of delivery (10 U.S.C. 2410n). This is a unilateral decision made solely at the discretion of the department or agency.

(i) If the FPI product is comparable, follow the policy at FAR 8.602(a).

(ii) If the FPI product is not comparable—

(A) Use competitive procedures to acquire the product; and

(B) Consider a timely offer from FPI for award in accordance with the specifications and evaluation factors in the solicitation.

3. Section 208.606 is revised to read as follows:

208.606

Exceptions.

For DoD, FPI clearances also are not required—

(1) For orders of listed items totaling $250 or less that require delivery within 10 days; or

(2) If market research shows that the FPI product is not comparable to products available from the private sector that best meet the Government's needs in terms of price, quality, and time of delivery.

4. Part 210 is added to read as follows:

PART 210—MARKET RESEARCH

210.001

Policy.

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

210.001

Policy.

(a) Also conduct market research before purchasing a product listed in the Federal Prison Industries (FPI) Schedule. Use the results to determine whether the FPI product is comparable to products available from the private sector that best meet the Government's needs in terms of price, quality, and time of delivery. (See subpart 208.6.)