[Federal Register Volume 59, Number 159 (Thursday, August 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20223]
[[Page Unknown]]
[Federal Register: August 18, 1994]
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DEPARTMENT OF DEFENSE
48 CFR Parts 215 and 244 and Appendix C to 48 CFR Chapter 2
Defense Federal Acquisition Regulation Supplement; Greatest Value
Sources
AGENCY: Department of Defense (DoD).
ACTION: Proposed rule with request for comments.
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SUMMARY: The Department of Defense is proposing changes to the Defense
Federal Acquisition Regulation Supplement to clarify its existing
policy concerning the selection of subcontractors based on greatest
value and also to provide more definitive items to consider when
evaluating contractors' vendor performance rating systems.
DATES: Comments on the proposed rule should be submitted in writing at
the address shown below on or before October 17, 1994, to be considered
in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
Defense Acquisition Regulations Council, ATTN: Mr. Eric R. Mens, PDUSD
(A&T)DP/DAR, IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-
3062. Telefax number (703) 604-5971. Please cite DFARS Case 93-D020 in
all correspondence.
FOR FURTHER INFORMATION CONTACT:
Mr. Eric R. Mens, (702) 604-5929.
SUPPLEMENTARY INFORMATION:
A. Background
The Federal Acquisition Regulation (FAR) at 15.605(c) currently
authorizes contracting officers to select the source which offers the
greatest value to the Government. The Government's policy with regard
to contractors applying the ``greatest value'' concept to the selection
of subcontractors is not as clear. The proposed rule revised the
Defense FAR Supplement (DFARS) to add language at 215.806-1(a)(1) to
clarify the Government's existing policy as it pertains to the
selection of subcontractors based on the greatest value; adds language
at DFARS 244.202-2 with regard to the basis for the selection of
subcontractors which contracting officers should consider when consent
to subcontract is required; and revises Appendix C-207.5 to establish
more definitive items for Government personnel to consider when
evaluating contractor vendor rating systems in the course of conducting
a Contractor Purchasing System Review.
B. Regulatory Flexibility Act
The proposed rule is not expected to 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 (1) the
rule merely clarifies the Government's existing policy on contractor
selection of subcontractors based on greatest value, (2) the
requirement to prepare documentation to support the prime contractor's
selection of subcontractors already exists, and (3) most small entities
are not subject to the requirements for a Contractor Purchasing System
Review under FAR subpart 44.3. Moreover, the revised Appendix C
guidance for evaluating prime contractor vendor rating systems is
intended to emphasize the importance of maintaining competitive
opportunities for subcontractors while selecting such sources on the
basis of greatest value. Therefore, an Initial Regulatory Flexibility
Analysis has not been performed. Comments from small entities
concerning the affected DFARS subpart will be considered in accordance
with section 610 of the Act. Such comments must be submitted separately
and cite 5 U.S.C. 610 (DFARS Case 93-D020) in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 96-511) does not apply because
the proposed rule does not impose any additional reporting or
recordkeeping requirements which require the approval of OMB under 44
U.S.C. 3501 et seq. Contractors which may be subject to the proposed
rule are already required by the FAR and DFARS to conduct and document
an appropriate and adequate cost or price analysis before awarding any
subcontract. The proposed rule does not impose any requirement for
contractors to establish a formal system for the selection of
subcontractors and suppliers based on greatest value. Rather, the rule
clarifies the Government's existing policy of recognizing that, where
such vendor rating systems exist, they may be a valuable tool in the
establishment of best value sources. This rule also provides a list of
more definitive items for consideration in the evaluation of a
contractor's purchasing system, if applicable, under FAR subpart 44.3.
List of Subjects in 48 CFR Parts 215 and 244 and Appendix C to 48 CFR
Chapter 2
Government procurement.
Claudia L. Naugle,
Deputy Director, Defense Acquisition Regulations Council.
Therefore, it is proposed that 48 CFR Parts 215 and 244 and
Appendix C to 48 CFR Chapter 2 are amended as follows:
1. The authority citations for 48 CFR Parts 215 and 244 and
Appendix C to 48 CFR Chapter 2 are revised to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 215--CONTRACTING BY NEGOTIATION
2. Section 215.806-1(a)(1) is revised to read as follows:
215.806 Subcontract pricing considerations.
215.806-1 General.
* * * * *
(a)(1) Contractor and subcontractor proposals may reflect the
selection of sources whose proposals offer the greatest value to the
Government in terms of performance and other factors. If the selection
is based on greatest value rather than lowest price, the analysis
supporting subcontractor selection should include a discussion of the
factors considered in the selection. If the contractor's analysis is
not adequate, return it for correction of deficiencies.
* * * * *
PART 244--SUBCONTRACTING POLICIES AND PROCEDURES
3. Subpart 244.2 is added to read as follows:
Subpart 244.2--Consent to Subcontracts
Sec.
244.202 Contracting officer's evaluation.
244.202-2 Considerations.
Subpart 244.2--Consent to Subcontracts
244.202 Contracting officer's evaluation.
244.202-2 Considerations.
(a) Where other than lowest price is the basis for subcontractor
selection, has the contractor adequately substantiated the selection as
offering the greatest value to the Government?
Appendix C to 48 CFR Chapter 2--Contractor Purchasing System
Reviews
4. Section C-207.5 is amended by revising paragraph (b) to read as
follows:
C-207.5 Subcontractor responsibility and vendor performance rating
system (IIG5).
(a) * * *
(b) Vendor performance rating systems. Contractor vendor
performance rating systems may be a valuable element in the
contractor's selection of subcontractors that offer the greatest value
to the Government. State in the report whether the contractor has a
vendor rating system. If the contractor has a system in place, evaluate
its effectiveness in selecting sources. Consider whether the system--
(1) Allows consistency of comparisons among competing
subcontractors;
(2) Protects rating information;
(3) Provides appropriate documentation for each element rated;
(4) Allows adequate opportunities for new subcontractor to compete;
(5) Provides for evaluations by appropriate functional areas; and
(6) Is kept current and accurate.
[FR Doc. 94-20223 Filed 8-17-94; 8:45 am]
BILLING CODE 5000-04-M
