04-12245. Federal Acquisition Regulation; Supplemental Information to FAR Case 2000-608 for the Certification of the Regulatory Flexibility Act Statement for the New Standard Form 330, Architect-Engineer Qualifications (Consolidated Form)

AGENCIES:

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

ACTION:

Notice of supplemental information.

SUMMARY:

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) have agreed on this supplemental information to the final rule, FAR Case 2000-608, New Consolidated Form for Selection of Architect-Engineer Contractors, published in the Federal Register at 68 FR 69227, December 11, 2003. This notice provides additional factual basis that applies only to the Regulatory Flexibility Act statement in the final rule. All other information remains unchanged.

DATES:

Effective Date: June 1, 2004.

FOR FURTHER INFORMATION CONTACT:

The FAR Secretariat, Room 4035, GS Building, Washington, DC, 20405, at [phone] for information pertaining to status or publication schedules. For clarification of content, contact Ms. Cecelia Davis, Procurement Analyst, at [phone]. Please cite FAR Notice 2004-N2.

SUPPLEMENTARY INFORMATION:

A. Background

This notice provides additional factual basis for the certification to the Regulatory Flexibility Act statement provided in the final rule published in the Federal Register on December 11, 2003. This final rule amends the Federal Acquisition Regulation (FAR) by replacing the Standard Forms (SFs) 254 and 255 with the new streamlined SF 330. The SFs 254 and 255 have changed little since their introduction in 1975, although the variety of Architect-Engineer (A-E) services has greatly expanded and new technologies have dramatically changed the way A-E firms do business. The SF 330 merges the SFs 254 and 255 into a single streamlined form, expands essential information about qualifications and experience, reflects current A-E disciplines, experience types and technology, eliminates information of marginal value, permits limitations on submission length, and facilitates electronic usage. This rule's intent was to improve the A-E evaluation process. We published a notice on January 7, 2004, to change the effective date from January 12, 2004 to June 8, 2004.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to the final rule that was published in the Federal Register at 68 FR 69227, December 11, 2003. This Federal Register notice is prepared to further support the Councils earlier determination that this rule does not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. The following information serves as the additional factual basis to support the certification in the final rule version:

An Initial Regulatory Flexibility Act analysis was not performed because the proposed rule did not have a significant economic impact on a substantial number of small entities. After analyzing public comments, the Councils determined that this regulation would not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. The Councils continue this determination and are now preparing this factual basis to support our earlier determination and to expand our discussion of the effects of the rule on small businesses. No small businesses specifically complained about the Regulatory Flexibility Act certification.

The purpose of the SFs 254 and 255 has been to present A-E firms' qualifications for consideration in the award of Federal contracts. The Brooks A-E Act requires evaluation and selection of A-E firms based on qualifications including past performance prior to negotiating price. This rule amends the Federal Acquisition Regulation (FAR) by replacing the SFs 254 and 255 with the new streamlined SF 330. The SFs 254 and 255 have changed little since their introduction in 1975, although the variety of A-E services has greatly expanded and new technologies have dramatically changed the way A-E firms do business. The SF 330 merges the SFs 254 and 255 into a single streamlined form, expands essential information about qualifications and experience, reflects current A-E disciplines, experience types and technology, eliminates information of marginal value, permits limitations on submission length, and facilitates electronic usage. This rule's intent is to improve the A-E evaluation process.

Overall the SF 330 requires less information than the SFs 254 and 255, benefiting all businesses, especially small businesses. The following information has been deleted:

• Duplication of data on number of personnel by discipline.
• Work currently being performed for Federal agencies.
• List of all offices, their telephone numbers and the number of personnel in each.
• Revenue information for each of the last 5 years (now the last 3 years).
• Number of projects for each profile code.
• Thirty example projects (required on the SF 254).
• Profile of a firm's project experience expressed in specific dollar amounts (replaced with revenue ranges).

Part I of the SF 330 is focused more on small businesses than the SF 255 because of its emphasis on the specific team of key individuals who will execute the contract requirements, rather than overall corporate experience. This important change is less of a barrier for new businesses (i.e., small businesses). New businesses need to demonstrate competency in their areas of expertise as required by the Brooks A-E Act.

Currently, there are approximately 23,000 small A-E firms registered in the Central Contractor Registration (CCR) system that could apply for Federal Government A-E contracts. Of the one hundred and eighteen commenters, there were no specific objections to the Regulatory Flexibility Act statement. There were 7 small businesses and associations representing small businesses out of the 118 commenters that identified some burden issues associated with the SF 330, such as the burden associated with converting automated databases. The rule does not require small businesses to maintain a database and it also does not require them to purchase software to fill out the form. Many firms have done so in the past for their convenience. There are at least seven firms that will continue to offer value added SF 330 software packages. These packages are available at varying prices based on their capabilities and some are being offered at very affordable prices. Once companies invest the initial cost for a software package, it is believed that the benefits will outweigh the initial cost. However, as stated earlier, this rule does not require the purchase of a software package to fill out the SF 330. The Government provides three formats of the SF 330 at no cost. The Government has added a Microsoft Word version of the form at the GSA website of Government forms, as a result of requests from A-E firms since the final rule was published.

Seven software companies were contacted in order to conduct a cost analysis on a sampling of the available software packages. The results of the analysis are provided below.

• For a small firm with one user, the cost ranges from $249 to $3,540 for SF 330 software with database backup, technical support and upgrades (provided by most software suppliers).
• For a small firm with one user, two companies offer SF 330 software “light” versions (no database backup) at a cost of $165 to $199.

One of the software companies claims to have sold between 750 to 1,000 SF 330 software packages to small businesses in the $400 range. From the analysis above, it is clear that there are reasonably priced software packages available for small firms that wish to invest in a value added software package.

The fact that the form is changed, means some changes will be needed in A-E firms' databases if they elect to continue using databases. It was brought to our attention that these indirect effects will happen. We did adjust the final rule version of the form to make it easier for firms, including small businesses, to perform database maintenance, and for the software companies who will be creating and marketing their updated software versions.

A comment addressing databases stated that this process might cost hundreds of hours researching projects dating back 5 years because the SFs 254 and 255 are coded by discipline, function and profile codes, which were all changed on the SF 330. This is not an accurate statement. Projects are not coded by any of these parameters on the SF 255, and only by profile codes on the SF 254. The same profile codes and function codes are available on the final version of the SF 330 that were used with the SF 254, and additional profile codes and function codes (disciplines) were added, based on industry requests, to update the forms for advances in the A-E industry. These new codes are optional; firms need not use them. A firm that decides it is to the firm's advantage to use the new codes may do so. The firm can go back and reclassify all of its old projects, or only use the new codes selectively.

One commenter stated that requiring 10 sample projects (that best illustrate the team's qualifications) could put a smaller firm at a disadvantage. This requirement was not changed from the SF 255. There is no additional burden because firms have to provide/maintain this information using either the old forms or the SF 330.

A small disadvantaged business commenter said, “We agree with the Council's general goals for creating a new form. The existing 254/255 forms are in need of an update. The proposed SF 330 has merit; it is shorter, the format is computer-friendly, and there is greater opportunity to clearly define the roles and experiences of key staff and sub-consultants.” This commenter also raised concerns related to the proposed cost in terms of database conversion. We believe many of these were resolved as a result of such public comments and are reflected in the final version of the SF 330.

Another small business comment was that we limited competition by stressing “team experience.” Agencies have had the ability to evaluate team experience, which can be an important aspect of the A-E selection process. The old forms were not always clear about who worked on what project. The new form makes it clearer. However, agencies are not required to favor team experience, although team experience can be a way to demonstrate competency. One of the commenters addressed the requirement for an organizational chart and feels that this requirement is a positive one for small businesses. The commenter stated, “As a minority business, we are frequently asked to participate in proposal development in order to meet a requirement for minority business participation, but then are never included in the actual project. Requiring the definition of the role of each sub-consultant enhances our chance of obtaining substantive meaningful work. This requirement is tremendously supportive of small businesses.”

In addition to the indirect discretionary burdens of database software conversion, there are also paperwork burdens connected with filling out the forms. We did point out in the Paperwork Reduction Act statement in the proposed rule published at 66 FR 53314, October 19, 2001, that the estimated burden hours to complete the new form were going to dramatically increase in comparison to the old forms. This was a result of the SFs 254 and 255 burden hours being grossly underestimated, and we discussed this in the proposed rule. We received some comments on this but not all small businesses commented on the Paperwork Reduction Act. Based on the public comments, some changes were made to reduce the burden, as outlined in this supplemental information.

There are no additional reporting or recording requirements for firms under this rule. As stated earlier, firms will now provide less information. In addition, firms will now use one streamlined form instead of two outdated forms. The burden hours associated with the Paperwork Reduction Act for SF 330 have increased (see OMB Information Collection 9000-0157.) This is due to the fact that the old forms were drastically underestimated and the SF 330 has been estimated using realistic criteria.

There are no known significant alternatives that will accomplish the objectives of the rule. No alternatives were proposed during the public comment period other than not changing the SFs 254 and 255. This is not an alternative because these forms are out of date, and not adequate for the Federal Government needs. We have extended the effective date from January 12, 2004 to June 8, 2004, to provide industry, especially small businesses more time to prepare for this change.

The interagency committee that developed the SF 330 determined that maintaining the existing SFs 254 and 255 with little or no change was not a feasible alternative. SFs 254 and 255 have changed little since their introduction in 1975, and updating and streamlining were long overdue. The forms do not reflect current A-E services, technologies and professional disciplines. The forms do not reflect current Federal A-E procurement practices, such as the predominant use of indefinite delivery contracts and the emphasis in selections on team experience. Consolidation of the forms was warranted since the SF 254 is rarely used alone in current A-E selections, but instead as a supplement to the SF 255. The forms contain duplicate information (such as the number of personnel by discipline on both the SFs 254 and 255) and information of marginal value (such as current Federal projects). More emphasis was needed on professional qualifications and relevant example projects, the two most important selection criteria. And finally, the current forms were not optimally designed for electronic usage. Minor revisions to the SFs 254 and 255 would not have fulfilled these many objectives.

The interagency committee realized that changing the SFs 254 and 255 to a new form would require transition effort and costs. But the committee was also certain that, after the transition period, the final SF 330 would be more streamlined than the SFs 254 and 255, and would require considerably less effort for firms to complete.

The public comments on the draft form, including those submitted by small businesses, were carefully considered by the committee in developing the final form. As a result, the final form contains many simplifications that reduce the burden on firms, such as the reinstatement of existing profile code and function code descriptions, the elimination of page numbers, the elimination of photos, the elimination of fees earned on past projects, and simplification of the matrix of key personnel involvement in the example projects. Small businesses cannot be exempted from use of the new form or from completion of certain portions of the form. This form is used for competitive acquisition of A-E services and all firms, including small businesses, must be considered on a uniform basis.

List of Subjects in 48 CFR Parts 1, 36, and 53

• Government procurement

Dated: May 25, 2004.

Laura Auletta,

Director, Acquisition Policy Division.