[Federal Register Volume 61, Number 145 (Friday, July 26, 1996)]
[Rules and Regulations]
[Pages 39201-39203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18503]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 16
[FAC 90-40; FAR Case 94-711; Item VI]
RIN 9000-AG50
Federal Acquisition Regulation; Task and Delivery Orders
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule adopted as final with changes.
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SUMMARY: This final rule is issued pursuant to the Federal Acquisition
Streamlining Act of 1994, Public Law 103-355 (the Act). The Federal
Acquisition Regulatory Council is amending the Federal Acquisition
Regulation (FAR) regarding the scope of a multiple award preference for
[[Page 39202]]
indefinite-quantity contracts. This final rule provides that the
multiple award preference established by the FAR does not apply to
architect-engineer contracts subject to the procedures of the FAR. This
regulatory action was subject to Office of Management and Budget review
under Executive Order 12866, dated September 30, 1993, but is not a
major rule under 5 U.S.C. 804.
EFFECTIVE DATE: July 26, 1996.
FOR FURTHER INFORMATION CONTACT: Mr. Edward McAndrew at (202) 501-1474
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 90-40, FAR case 94-711.
SUPPLEMENTARY INFORMATION:
A. Background
A proposed rule amending FAR Subpart 16.5 was published in the
Federal Register at 60 FR 14346, March 16, 1995. The proposed rule
reflected changes brought about by sections 1004 and 1054 of the Act.
Sections 1004 and 1054 of the Act created a multiple award preference
for indefinite-quantity contracts. The proposed rule published in the
Federal Register excluded contracts subject to FAR Parts 36, 38, 39,
and 41 from the multiple award preference. With respect to Parts 36 and
39, the exclusions were based upon the ``Provisions Not Affected''
subsection in sections 1004 and 1054 of the Act. The Special
Contracting Team intended to give these provisions meaning by exempting
acquisitions under the Brooks Architect-Engineers Act and the Brooks
Automatic Data Processing Equipment Act from the multiple award
preference. Contracts subject to Part 38 were exempted from the
coverage because the Act specifically exempted GSA's Federal Supply
Schedule program. Contracts subject to Part 41 were exempted because
the Team believed that multiple awards were inconsistent with the
monopolistic nature of some utility services.
A final rule implementing sections 1004 and 1054 of the Act was
published in the Federal Register at 60 FR 49723, September 26, 1995.
However, an interim rule was published along with the final rule which
modified the scope of the multiple award preference. The interim rule
added a new FAR section 16.500 to provide that the multiple award
preference established by Subpart 16.5 could be used to acquire: (1)
Architect-engineer services, provided the selection of contractors and
placement of orders is consistent with Subpart 36.6; and (2) Federal
Information Processing resource requirements that are not satisfied
under the Federal Supply Schedule program, provided the selection of
contractors and placement of orders is consistent with Part 39. The
interim rule also extended the multiple award preference to Part 36
construction contracts and Part 41 utility services. Although the
change was not considered a significant revision within the meaning of
FAR 1.501 and Public Law 98-577, the FAR Council made a determination
to solicit public comments before finalizing this amendment to FAR
Subpart 16.5.
As a result of public comments on the interim rule, the FAR Council
has revised the scope of the rule to clarify that the multiple award
preference established by FAR Subpart 16.5 does not apply to architect-
engineer contracts subject to the procedures of FAR Subpart 36.6.
However, this revision to the rule does not prohibit agencies from
making multiple awards for architect-engineer services, provided the
selection of contractors and placement of orders is consistent with
Subpart 36.6. This final rule also provides that the procedures
contained in Subpart 16.5 may be used to acquire Federal Information
Processing resource requirements that are not satisfied under the
Federal Supply Schedule program, provided the selection of contractors
and placement of orders is consistent with Part 39. The final rule
retains the multiple award preference with respect to construction
contracts subject to Part 36 and utility services subject to Part 41.
However, the final rule recognizes that there may be circumstances when
multiple awards would not be appropriate and, thus, provides
contracting officers the discretion to determine whether multiple
awards should be made.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., applies to
this final rule and a Final Regulatory Flexibility Analysis (FRFA) has
been performed. A copy of the FRFA may be obtained from the FAR
Secretariat.
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.
D. Public Comments-
On September 26, 1995, an interim rule was published in the Federal
Register at 60 FR 49723. In response to the interim rule, 22 comments
were received. The comments of all respondents were considered in
developing the final rule.
A significant number of comments recommended that certain types of
fixed-price construction contracts, commonly known as ``Job Order
Contracts'' and ``Simplified Acquisition of Base Engineer
Requirements'' (SABER) contracts should be excluded from the scope of
the multiple award preference. These types of contracts typically
include Government-established unit prices for specific line items
needed to complete the requirements of the delivery order. Award
determinations are made by selecting the mix of line items to be used
for a project and multiplying the mix of line items by the coefficient
bid by the offeror. Several comments argued that the application of the
multiple award preference to Job Order and SABER contracts could result
in higher overall prices to the Government. These comments argued that
if multiple Job Order or SABER contracts are made, offerors may be
inclined to raise their bidding coefficient to take into consideration
the fact that potential delivery order awards may be spread out among
several firms rather than one firm receiving all the delivery orders.
The comments further argue that multiple awards may cause a duplication
of contract overhead costs (site managers, offices, equipment, etc.)
and that any economies resulting from a single award would be lost,
thus resulting in higher costs to the Government.
It is recognized that there may be circumstances when multiple
awards under a Job Order or SABER contract may not be appropriate. In
such cases, the rule recognizes that multiple awards should not be
made. For example, the rule provides that multiple awards should not be
made when the contracting officer determines, based on the contracting
officer's knowledge of the market, that more favorable terms and
conditions, including pricing, may be provided if a single award is
made.
The rule has also been revised to clarify that agencies may make
class determinations in accordance with FAR Subpart 1.7 to make single
awards for any class of contracts (including Job Order or SABER
contracts). However, such a class determination would not preclude the
contracting officer from making a determination to solicit for
[[Page 39203]]
multiple awards if the contracting officer determines that multiple
awards may be advantageous to the Government for a particular
solicitation.-
A significant number of comments were also received regarding the
application of the multiple award preference to architect-engineer
services subject to FAR Subpart 36.6. The Team believes that it is good
public policy to use the multiple award preference to promote price
competition in Government contracting. However, the Brooks Architect-
Engineers Act precludes price competition by establishing
qualification-based source selection procedures. Because price
competition is not applicable to architect-engineer services, the rule
has been revised to clarify that the multiple award preference does not
apply to architect-engineer services subject to FAR Subpart 36.6.
Although the rule does not extend the multiple award preference to
architect-engineer services subject to FAR Subpart 36.6, it is
important to note that the rule does not prohibit an agency from making
multiple awards (if an agency chooses to do so) provided the selection
of contractors and placement of orders is consistent with FAR Subpart
36.6. Some Federal agencies have awarded multiple award contracts for
architect-engineer services that are consistent with the Brooks
Architect-Engineers Act qualification-based source selection
procedures. For example, one agency utilized Brooks Architect-Engineers
Act procedures to award multiple contracts for architect-engineer
services to six firms from a single solicitation. As described in the
solicitation, each task order is technically competed among the
multiple awardees. Each firm's response to the task order is
technically ranked based on the evaluation factors for that task. The
most technically qualified firm is determined as a result of the
responses received and a cost proposal is required from that firm.
Negotiations take place and, in most cases, the task order is awarded.
List of Subjects in 48 CFR Part 16-
Government procurement.
Dated: July 16, 1996.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
Interim Rule Adopted as Final With Changes-
Accordingly, the interim rule amending 48 CFR Part 16 and published
at 60 FR 49723, September 26, 1995, is adopted as a final rule with the
following changes:
1. The authority citation for 48 CFR Part 16 continues to read as
follows:
PART 16--TYPES OF CONTRACTS-
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
2. Section 16.500 is revised to read as follows:
16.500 Scope of subpart.
This subpart prescribes policies and procedures for making awards
of indefinite-delivery contracts and establishes a preference scheme
for making multiple awards of indefinite-quantity contracts. This
subpart does not limit the use of other than competitive procedures
authorized by part 6. Nothing in this subpart shall be construed to
limit, impair, or restrict the authority of the General Services
Administration (GSA) to enter into schedule, multiple award, or task or
delivery order contracts under any other provision of law. Therefore,
GSA regulations and subpart 8.4, part 38, or part 39 for the Federal
Supply Schedule program (including contracts for Federal Information
Processing resources) take precedence over this subpart. This subpart
may be used to acquire Federal Information Processing resource
requirements that are not satisfied under the Federal Supply Schedule
program, provided the selection of contractors and placement of orders
is consistent with part 39. The multiple award preference scheme
established by this subpart does not apply to architect-engineer
contracts subject to the procedures in subpart 36.6. However, agencies
are not precluded from making multiple awards for architect-engineer
services using the procedures in this subpart, provided the selection
of contractors and placement of orders is consistent with subpart 36.6.
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3. Section 16.504 is amended in paragraph (c)(1) by revising the
third and fourth sentences; and by revising paragraphs (c)(1)(iv) and
(vi) to read as follows:
16.504 Indefinite-quantity contracts.
(c) * * *
(1) * * * No separate written determination to make a single award
is necessary when the determination is contained in a written
acquisition plan or when a class determination has been made in
accordance with subpart 1.7. Multiple awards should not be made if the
contracting officer determines that--
* * * * *
(iv) The tasks likely to be ordered are so integrally related that
only a single contractor can reasonably perform the work;
* * * * *
(vi) Multiple awards would not be in the best interests of the
Government.
* * * * *-
4. Section 16.505 is amended by removing the second sentence of
paragraph (b) and inserting the following three sentences in its place
to read as follows:
16.505 Ordering.
* * * * *-
(b) * * * In determining the procedures for providing awardees a
fair opportunity to be considered for each order, contracting officers
shall exercise broad discretion. The contracting officer, in making
decisions in the award of any individual task order, should consider
factors such as past performance on earlier tasks under the multiple
award contract, quality of deliverables, cost control, price, cost, or
other factors that the contracting officer believes are relevant to the
award of a task order to an awardee under the contract. In evaluating
past performance on individual orders, the procedural requirements in
subpart 42.15 are not mandatory. * * *
* * * * *
[FR Doc. 96-18503 Filed 7-25-96; 8:45 am]
BILLING CODE 6820-EP-P
