[Federal Register Volume 64, Number 178 (Wednesday, September 15, 1999)]
[Notices]
[Pages 50108-50111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23998]
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OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
Proposed Rescission of Various Policy Letters
AGENCY: Office of Management and Budget, Office of Federal Procurement
Policy.
ACTION: Proposed rescission of Office of Federal Procurement Policy
(OFPP) Policy Letters 77-2, 78-2, 78-3, 78-4, 79-1, 79-2, 80-3, 80-6,
80-8, 81-1, 81-2, 82-1, 83-1, 83-2, 83-3, 84-1, 85-1, 89-1, 91-2, 91-4,
92-5, and 95-1.
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SUMMARY: OMB is undertaking a thorough review of its government-wide
procurement issuances. Based on this review, OMB requests comments on
the proposed rescission of the following Office of Federal Procurement
Policy (OFPP) Policy Letters: 77-2, Section 502(c) of P.L. 95-89; 78-2,
Preventing ``Wage Busting'' for Professionals: Procedures for
Evaluating Contractor Proposals for Service Contracts; 78-3, Requests
for Disclosure of Contractor-Supplied Information Obtained in the
Course of a Procurement; 78-4, Field Contract Support Cross-Servicing
Program; 79-1, Implementation of Section 15(k) of the Small Business
Act, as amended: Office of Small and Disadvantaged Business
Utilization; 79-2, Boards of Contract Appeals: Position Allocation
Pursuant to Public Law 95-563; 80-3, Regulatory Guidance on P.L. 95-
563, the Contract Disputes Act of 1978; 80-6, Regulatory Guidance on
Section 221 of Public Law 95-507; 80-8, Establishment of Procurement
Data Reporting Requirements to Comply with Public Law 96-39 (as amended
by Transmittal Memoranda Nos. 1, 2, and 3); 81-1, Procurement
Procedures, Advance Procurement Planning, and Review of End-of-Year
Purchases; 81-2, Policy Guidance for the Labor Surplus Area Programs;
82-1, Policy Guidance Concerning Government-wide
[[Page 50109]]
Debarment, Suspension, and Ineligibility; 83-1, Withholding of Funds
from Construction Contract Progress Payments; 83-2, Publicizing the
Development of Procurement Policies and Regulations; 83-3, Procurement
of Architect-Engineer Services; 84-1, Federally Funded Research and
Development Centers; 85-1, Federal Acquisition Regulations System; 89-
1, Conflict of Interest Policies Applicable to Consultants; 91-2,
Service Contracting; 91-4, Use of Irrevocable Letters of Credit; 92-5,
Past Performance Information; and 95-1, Subcontracting Plans for
Companies Supplying Commercial Items.
There have been substantial changes to the body of acquisition law
and regulations since many of these policy documents were issued. As
indicated in the SUPPLEMENTARY INFORMATION below, the requirements and
provisions of the OFPP Policy Letters listed above have been
incorporated in the Federal Acquisition Regulation (FAR), 48 CFR 1, or
for other reasons have either been superseded or are no longer
necessary.
DATES: Persons who wish to comment on the proposed rescission of any of
the OFPP Policy Letters should submit their comments no later than
November 24, 1999.
ADDRESSES: Comments should be addressed to Michael Gerich, Office of
Federal Procurement Policy, Room 9013, New Executive Office Building,
Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT: Michael Gerich, Office of Federal
Procurement Policy, 202-395-3501. Copies of the OFPP Policy Letters can
be obtained at the ARNet world wide website, http://www.arnet.gov/
References/Fwd__Index.html.
SUPPLEMENTARY INFORMATION: OFPP has been a leader in overall
acquisition reform. One theme of acquisition reform is less reliance on
regulation and more reliance on streamlined, customer-oriented,
acquisition practices to improve support for agency missions. In
keeping with this overall theme, OFPP is reviewing all of its policy
letters, memoranda, and other issuances with the intent to: rescind
those that are essentially covered by other regulations or policy
documents; issue new policy letters and similar documents sparingly and
only when necessary; and issue ``best practices'' instead. There have
been substantial changes to the body of acquisition law and regulations
since many of these policy documents were issued.
OFPP has recently completed a review of all of its policy issuances
for possible rescission, by comparing them with relevant statutory
provisions and sections of the Federal Acquisition Regulation (FAR).
The rescissions proposed in this notice reflect OFPP's preliminary
conclusion that the FAR, as written, contains the current policy. Any
policy embodied in the policy letters proposed for rescission by this
notice that is not reflected in the current FAR has been either
superseded by subsequent statutory changes or is otherwise no longer
necessary. No substantive FAR change is required by this action.
Earlier this year, OFPP rescinded Policy Letter 79-4, Contracting
for Motion Picture Productions and Videotape Productions. 64 FR 8631
(February 22, 1999). On April 2, 1999, OFPP published notice in the
Federal Register requesting comments on two proposed policy letters:
Policy Letter 99-X, Policy on Promoting Subcontracting Opportunities
and Administering Subcontracting Plans (64 FR 16001); and Policy Letter
99-1, Government-Wide Small Business, HUBZone Small Business, Small
Disadvantaged Business, and Women-Owned Small Business Goals for
Procurement Contracts (64 FR 16003). Those two proposed policy letters
would supersede OFPP Policy Letters 80-1, 80-2, 80-4, and 91-1. In this
notice, OFPP is proposing to rescind an additional 22 policy letters,
for the reasons explained below.
OFPP Policy Letter 77-2, Section 502(c) of P.L. 95-89
Section 502(c) of Public Law 95-89 amended the Small Business Act
(15 U.S.C. 631 et seq.) to allow certain nonprofit agencies employing
people who are blind or severely disabled to compete for agency
procurements conducted during fiscal year 1978 that would otherwise
have been reserved exclusively for competition among small businesses.
Policy Letter 77-2 implemented section 502(c). Similar statutory
provisions were enacted in subsequent years. For example, section 133
of Public Law 100-590 (November 3, 1988) (102 Stat. 3005) authorized
such nonprofit agencies to compete in procurements otherwise set aside
for small businesses in fiscal years 1989 through 1993. Section 305 of
Public Law 103-403, the Small Business Administration Reauthorization
and Amendments Act of 1994, revived this authority to compete for
fiscal year 1995. The statutory authority has expired.
OFPP Policy Letter 78-2, Preventing ``Wage Busting'' for
Professionals: Procedures for Evaluating Contractor Proposals for
Service Contracts
OFPP Policy Letter 78-2 addressed ``wage busting'' practices of
government contractors who employ professional employees who
traditionally have not been represented by union collective bargaining
agreements. 78-2 required contracting agencies to evaluate applicable
proposals from offerors by taking into account the cost realism of the
contractor's proposed personnel compensation plan. Unrealistically low
labor rates proposed for professional employees could indicate a lack
of understanding of the resources required to perform high quality
contract work on an uninterrupted basis. 78-2 was superseded, in
purpose, by the provisions of 10 U.S.C. 2331 (Contracts for
professional and technical services) which is implemented in FAR 37.115
(Uncompensated overtime) and FAR 52.237-10 (Identification of
Uncompensated Overtime).
OFPP Policy Letter 78-3, Requests for Disclosure of Contractor-
Supplied Information Obtained in the Course of a Procurement
OFPP Policy Letter 78-3 prescribed a uniform approach to handling
requests filed under the Freedom of Information Act for information
disclosed by government contractors and offerors. 78-3 was superseded,
in purpose, by FAR Subpart 24.2, which implements statutory provisions
at 10 U.S.C. 2305(g) and 41 U.S.C. 253b(m).
OFPP Policy Letter 78-4, Field Contract Support Cross-Servicing
Program
Policy Letter 78-4 encouraged agencies that require contract
support services (e.g., contract administration, audit services) from
field offices to use cross-servicing arrangements with existing
contract administration and contract audit organizations of other
agencies. The Policy Letter was intended to treat contractors more
consistently and, where possible, preclude duplication of effort
attributable to multiple agency reviews, inspections, and examination
of contractor records. The provisions of the Policy Letter were
incorporated in FAR Subpart 42.1.
OFPP Policy Letter 79-1, Implementation of Section 15(k) of the
Small Business Act, as Amended: Office of Small and Disadvantaged
Business Utilization
Section 15(k) of the Small Business Act (15 U.S.C. 644(k))
established an Office of Small and Disadvantaged
[[Page 50110]]
Business Utilization (OSDBU) in each contracting agency to implement
and execute the functions and duties under sections 8 and 15 of the
Small Business Act which relate to such agency. Policy Letter 79-1
provided guidance on the organization and function of the OSDBUs. The
provisions of Policy Letter 79-1 were incorporated in FAR subsections
19.201(c) and (d).
OFPP Policy Letter 79-2, Boards of Contract Appeals: Position
Allocation Pursuant to Public Law 95-563
Policy Letter 79-2 made an initial allocation of positions for
agency boards of contract appeals pursuant to Public Law 95-563, the
Contract Disputes Act of 1978. Section 8(a) of the Contract Disputes
Act of 1978, as amended, (41 U.S.C. 607(a)) states that a board of
contract appeals may be established within an executive agency, when
the agency head, after consultation with the Administrator for Federal
Procurement Policy, determines from a workload study that the volume of
contract claims justifies the establishment of a full-time agency
board. Since issuance of Policy Letter 79-2 over 20 years ago, there
has been little need for guidance in this area. OFPP will issue new
guidance, if necessary.
OFPP Policy Letter 80-3, Regulatory Guidance on P.L. 95-563, the
Contract Disputes Act of 1978
Policy Letter 80-3 provided guidance on developing regulations to
implement provisions of the Contract Disputes Act of 1978, including
resolution of contract claims, contractor certification requirements,
payment of interest on contractor claims, and a contract disputes
clause. The provisions of Policy Letter 80-3 were incorporated in FAR
Subpart 33.2 and the contract disputes clause at FAR 52.233-1.
OFPP Policy Letter 80-6, Regulatory Guidance on Section 221 of
Public Law 95-507
Policy Letter 80-6 provided regulatory guidance on section 15(j) of
the Small Business Act (15 U.S.C. 644(j)), which set aside small
purchase procurements for small businesses. Section 15(j) was amended
to apply the set aside provisions to agency purchase of goods or
services that have an anticipated value greater than $2,500 but not
greater than $100,000. The regulatory guidance in Policy Letter 80-6,
as amended by the statutory changes, is implemented by the provisions
of FAR 19.502-2.
OFPP Policy Letter 80-8, Establishment of Procurement Data
Reporting Requirements to Comply with Public Law 96-39 (as amended
by Transmittal Memoranda Nos. 1, 2, and 3)
Policy Letter 80-8 established procurement data reporting
requirements. Transmittal Memoranda Nos. 1, 2, and 3 amended those
reporting requirements. The provisions of Policy Letter 80-8 and the
Transmittal Memoranda are implemented in FAR Subpart 4.6 and the FPDS
Reporting Manual described therein.
OFPP Policy Letter 81-1, Procurement Procedures, Advance
Procurement Planning, and Review of End-of-Year Purchases
Policy Letter 81-1 required agencies to establish advance
procurement planning procedures to allow sufficient lead time to
prepare procurement solicitations, obtain and evaluate bids or
proposals, audit, negotiate, and make contract awards in an orderly
manner. The Policy Letter also required agencies to develop procedures
for review of procurements, particularly major procurements, made in
the last quarter to assure they are consistent with advance procurement
plans. The provisions of Policy Letter 81-1 were essentially
incorporated in FAR Part 7 and partially superseded by procedures found
in Part 3 of OMB Circular A-11, Planning, Budgeting, and Acquisition of
Capital Assets, and the Capital Programming Guide which further
integrate the budget and procurement processes.
OFPP Policy Letter 81-2, Policy Guidance for the Labor Surplus Area
Programs (as amended by Supplement No. 1)
Policy Letter 81-2, as amended by Supplement No. 1, provided
guidance on implementing subsections 15(d), (e), and (f) of the Small
Business Act (as amended and added by section 117 of Public Law 96-302,
July 2, 1980) that gave priority in awarding contracts and subcontracts
to firms performing in areas of unemployment or underemployment known
as labor surplus areas. Subsection 7101(a) of the Federal Acquisition
Streamlining Act of 1994 (Public Law 103-355, October 13, 1994) deleted
subsections 15(e) and (f) from the Small Business Act, thus removing
the labor surplus area set-aside and subcontracting programs. The
statutory changes were implemented in FAR Part 19. For more
information, see the final rule amendment to the FAR published in the
Federal Register on September 18, 1995 (60 FR 48258).
OFPP Policy Letter 82-1, Policy Guidance Concerning Government-wide
Debarment, Suspension, and Ineligibility
Policy Letter 82-1 established policies and procedures for
debarment and suspension of persons from contracting with Federal
Departments and agencies. The provisions of Policy Letter 82-1 are
implemented in FAR Subpart 9.4.
OFPP Policy Letter 83-1, Withholding of Funds from Construction
Contract Progress Payments
Policy Letter 83-1 provided guidance on retention or withholding of
funds from progress payments made under Federal construction contracts.
The provisions of the Policy Letter are implemented in FAR section
32.103.
OFPP Policy Letter 83-2, Publicizing the Development of Procurement
Policies and Regulations
Policy Letter 83-2 established uniform criteria and procedures for
soliciting the views of all interested parties in the development by
executive Departments and agencies of procurement policies,
regulations, procedures and forms. The provisions of Policy Letter 83-2
were codified in section 22 of the OFPP Act, as amended (41 U.S.C.
418b), and implemented in FAR Subpart 1.5.
OFPP Policy Letter 83-3, Procurement of Architect-Engineer Services
Policy Letter 83-3 provided guidance on procurement of architect-
engineer services under the Brooks Architect-Engineers Act (Public Law
92-582, 40 U.S.C. 541 et seq.). The Policy Letter delineated the type
of services to be procured using source selection procedures prescribed
by the Brooks Architect-Engineers Act versus using standard source
selection procedures. The provisions of Policy Letter 83-3 were
implemented by FAR section 36.601.
OFPP Policy Letter 84-1, Federally Funded Research and Development
Centers
Policy Letter 84-1 established policy for the establishment, use,
periodic review, and termination of sponsorship of Federally Funded
Research and Development Centers (FFRDCs). The provisions of Policy
Letter 84-1 were implemented by FAR section 35.017.
OFPP Policy Letter 85-1, Federal Acquisition Regulations System
Policy Letter 85-1 implemented provisions of the OFPP Act (Public
Law 93-400 as amended, 41 U.S.C. 401 et seq.) concerning the single
system of
[[Page 50111]]
simplified Government-wide procurement regulations now known as the
Federal Acquisition Regulation (FAR) (48 CFR 1). The Policy Letter
covered establishment of the FAR System, FAR maintenance, and
resolution of differences among executive agencies in development of
FAR provisions. The provisions of Policy Letter 85-1 were codified in
sections 6 and 25 of the OFPP Act (41 U.S.C. 405 and 41 U.S.C. 421,
respectively) and incorporated in FAR Subparts 1.1, 1.2, and 1.3.
OFPP Policy Letter 89-1, Conflict of Interest Policies Applicable
to Consultants
Policy Letter 89-1 established policy and procedures on applying
conflict of interest standards to persons who provide consulting
services to the government, pursuant to section 8141 of the 1989
Department of Defense Appropriations Act, Public Law 100-463, 102 Stat.
2270-47 (October 1, 1988). The provisions of Policy Letter 89-1 were
incorporated in FAR Subpart 9.5.
OFPP Policy Letter 91-2, Service Contracting
OFPP Policy Letter 91-2 established policy for acquiring services
by contract. It encouraged the use of ``performance-based
contracting,'' which uses standards to measure quality and timeliness
of contractor performance and surveillance plans to assure that the
standards are met. Policy Letter 91-2 is implemented in FAR Subpart
37.6. For more information on this subject, see OFPP's ``A Guide to
Best Practices for Performance-Based Service Contracting'' (October
1998) at the ARNet world wide website, http://www.arnet.gov/BestP/
PPBSC/BestPPBSC.html.
OFPP Policy Letter 91-4, Use of Irrevocable Letters of Credit
OFPP Policy Letter 91-4 established policy for use of irrevocable
letters of credit in lieu of sureties for Federal construction
contracts requiring Miller Act bonds. The Miller Act (40 U.S.C. 270a et
seq.) requires the use of performance and payment bonds for Federal
construction contracts in excess of $25,000. Policy Letter 91-4
determined that: irrevocable letters of credit serve much of the same
function and provide the same redeemable value as bonds, postal orders,
and certified checks; Federal agencies are authorized to accept such
letters; and their usage in lieu of sureties would help to achieve
greater access by small and small disadvantaged businesses to Federal
construction contracts. The Policy Letter permitted agencies to use
irrevocable letters of credit in lieu of sureties for Federal
construction contracts requiring Miller Act bonds. Policy Letter 91-4
is implemented in FAR section 28.204-3.
OFPP Policy Letter 92-5, Past Performance Information
Policy Letter 92-5 established requirements for evaluating
contractor performance and for using past performance information in
the contractor selection process. The provisions of Policy Letter 92-5
have been implemented in FAR Subpart 42.15 and FAR sections 15.304 and
15.305. For more information on this subject, see ``A Guide to Best
Practices for Past Performance'' (May 1995) at the ARNet world wide
website, http://www.arnet.gov/BestP/BestPract.html.
OFPP Policy Letter 95-1, Subcontracting Plans for Companies
Supplying Commercial Items
Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) requires
that each contract that exceeds $500,000 ($1 million in the case of
construction) and that offers subcontracting opportunities include a
requirement that the apparently successful offeror negotiate a
subcontracting plan which shall become a material part of the contract.
Policy Letter 95-1 revised the policy on subcontracting plans to reduce
the burden of government-unique requirements on prime contractors and
subcontractors that supply commercial items. The Policy Letter allows
such contractors and subcontractors to meet the requirements of Section
8(a) of the Small Business Act by submitting an annual ``commercial
plan'' rather than an individual contract-by-contract or subcontract-
by-subcontract plan. A commercial plan is a subcontracting plan that
covers a contractor's or subcontractor's fiscal year and that applies
to the entire production of commercial items sold by either the entire
company or a portion thereof (e.g., division, plant, or product line).
The provisions of Policy Letter 95-1 were implemented in FAR sections
19.701, 19.704(d), and 19.705-7.
OFPP requests comments on these proposed rescissions.
Deidre A. Lee,
Administrator.
[FR Doc. 99-23998 Filed 9-14-99; 8:45 am]
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