2011-16675. Federal Acquisition Regulation; Extension of Sunset Date for Protests of Task and Delivery Orders

AGENCIES:

Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION:

Interim rule.

SUMMARY:

DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to implement section 825 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011. The statute extends the sunset date for protests against the award of task or delivery orders by DoD, NASA, and the Coast Guard from May 27, 2011, to September 30, 2016.

DATES:

Effective Date: July 5, 2011.

Comment Date: Interested parties should submit written comments to the Regulatory Secretariat on or before September 6, 2011 to be considered in the formulation of a final rule.

ADDRESSES:

Submit comments identified by FAC 2005-53, FAR Case 2011-015, by any of the following methods:

• Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by inputting “FAR Case 2011-015” under the heading “Enter Keyword or ID” and selecting “Search.” Select the link “Submit a Comment” that corresponds with “FAR Case 2011-015.” Follow the instructions provided at the “Submit a Comment” screen. Please include your name, company name (if any), and “FAR Case 2011-015” on your attached document.
• Fax: [phone].
• Mail: General Services Administration, Regulatory Secretariat (MVCB), Attn: Hada Flowers, 1275 First Street, NE., 7th Floor, Washington, DC 20417.

Instructions: Please submit comments only and cite FAC 2005-53, FAR Case 2011-015, in all correspondence related to this case. All comments received will be posted without change to http://www.regulations.gov,, including any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT:

Ms. Deborah Lague, Procurement Analyst, at [phone], for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at [phone]. Please cite FAC 2010-53, FAR Case 2011-015.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA are publishing this interim rule amending the FAR to implement section 825 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383, enacted January 7, 2011). Section 825 amends 10 U.S.C. 2304c(e) to extend the sunset date for protests against the award of task and delivery orders from May 27, 2011, to September 30, 2016, but only for Title 10 agencies, i.e., DoD, NASA, and the Coast Guard. There has been no comparable change to Title 41, so the sunset date for protests against the award of task and delivery orders by other agencies remains May 27, 2011. With this change, contractors will no longer be able to protest task or delivery orders awarded by agencies other than DoD, NASA, and the Coast Guard. There is no effect on Government automated systems.

II. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

III. Regulatory Flexibility Act

The change 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.. The Initial Regulatory Flexibility Analysis (IRFA) is summarized as follows:

This rule was initiated to implement section 825 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383), enacted January 7, 2011. Section 825 amends 10 U.S.C. 2304c(e) to extend the sunset date for protests against the award of task or delivery orders by DoD, NASA, and the Coast Guard from May 27, 2011, to September 30, 2016.

Prior to the National Defense Authorization Act for Fiscal Year 2008, there was no authority for protests against the award of task or delivery orders under indefinite-delivery contracts. That statute, however, amended Titles 10 and 41 to allow protests against the award, or proposed award, of a task or delivery order by any Federal agency if (a) the protest is on the grounds that the order increases the scope, period, or maximum value of the contract, or (b) the order is valued at over $10 million.

This protest authority has been in effect for the past 21/2 years. Section 825 extended the sunset date for Title 10 agencies (DoD, NASA, and the Coast Guard). However, there has not been a similar change to the Title 41 authority, so the sunset date remains May 27, 2011, for all other agencies.

The authority to file protests against the award of task or delivery orders is relatively new, and there is little data available, as such protests may be filed with the agency or General Accountability Office (GAO). Section 843 of Pub. L. 110-181 gave the Comptroller General of the United States the exclusive jurisdiction of a protest of an order valued in excess of $10 million. Data on agency-level protests is not compiled outside the agency concerned, so we had to base our estimate on the total number of protests filed at the GAO in Fiscal Years 2009 and 2010. The data was extracted from GAO's latest report to the Congress. Only Fiscal Years 2009 and 2010 protest numbers were used because the authority to protest against task or delivery orders did not exist prior to that time.

Offerors can protest to the agency or to the GAO. Assuming that one-half of all protests are filed with the GAO and the other half are filed with the agency, then the average number of protests filed per fiscal year would be 4,300 (see below):

Protests may be filed against the award of contracts as well as certain task or delivery orders. There are few prohibitions on the grounds for protests against the award of a contract. However, protests against the award of a task or delivery order are limited to (a) a protest on the grounds that the order increases the scope, period, or maximum value of the contract; or (b) a protest of an order valued in excess of $10 million. Therefore, it is reasonable to assume that less than 50 percent of the total number of protests filed is against the award of a task or delivery order. A generous estimate is approximately one-fourth, or 1,075. Likewise, only a percentage of the protests against the award of a task or delivery order are made by small businesses. Even if we assume that percentage to be one-half, then the number of protests filed by small businesses against the award of a task or delivery order is estimated to be 539.

The number 16 represents the number of small business task or delivery order protests sustained in a fiscal year. However, this number is representative of protests against awards by all Government agencies, not just DoD, NASA, and the Coast Guard. If the assumption is made that half of the protests sustained are on DoD, NASA, or Coast Guard task or delivery orders, then it can be estimated that extending the sunset date for protests against task or delivery order awards by Title 10 agencies will result in an additional 8 awards to small businesses per fiscal year that the protest authority remains in effect.

There is no requirement for small entities to submit any information under this provision. Therefore, no professional skills are necessary on the part of small entities for compliance, and the cost to small entities associated with this provision is $0.

The rule does not duplicate, overlap, or conflict with any other Federal rules.

There are no practical alternatives that will accomplish the objectives of the interim rule, i.e., implementation of a statutory mandate.

The Regulatory Secretariat has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in the subpart 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 2005-53, FAR Case 2011-015) in correspondence.

IV. Paperwork Reduction Act

The interim rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

V. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary because the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383) was enacted on January 7, 2011, and requires the extension of the sunset date for the affected agencies to be published in the FAR prior to the expiration of the previous sunset date, May 27, 2011. However, pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD, GSA, and NASA will consider public comments received in response to this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Part 16

• Government procurement

Dated: June 28, 2011.

Laura Auletta,

Acting Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR part 16 as set forth below:

PART 16—TYPES OF CONTRACTS

1. The authority citation for 48 CFR part 16 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).

2. Amend section 16.505 by revising paragraph (a)(9)(ii) to read as follows:

16.505

Ordering.

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(a) * * *

(9) * * *

(ii) The authority to protest the placement of an order under this subpart expires on September 30, 2016, for DoD, NASA and the Coast Guard (10 U.S.C. 2304a(d) and 2304c(e)), and on May 27, 2011, for other agencies (41 U.S.C. 4103(d) and 4106(f)).

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