2010-22346. Federal Acquisition Regulation; Clarification of Standard Form 26-Award/Contract

AGENCIES:

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

ACTION:

Proposed rule.

SUMMARY:

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) are proposing to amend the Federal Acquisition Regulation (FAR) to revise (a) the header for blocks 17 and 18 and (b) block 18 of the Standard Form (SF) 26 to clarify that block 18 should not be used when awarding a negotiated procurement and should only be checked when awarding a sealed-bid contract.

DATES:

Interested parties should submit written comments to the Regulatory Secretariat on or before November 8, 2010 to be considered in the formulation of a final rule.

ADDRESSES:

Submit comments identified by FAR Case 2009-029 by any of the following methods:

• Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by inputting “FAR Case 2009-029” under the heading “Enter Keyword or ID” and selecting “Search”. Select the link “Submit a Comment” that corresponds with “FAR Case 2009-029”. Follow the instructions provided at the “Submit a Comment” screen. Please include your name, company name (if any), and “FAR Case 2009-029” on your attached document.
• Fax: [phone].
• Mail: General Services Administration, Regulatory Secretariat (MVCB), ATTN: Hada Flowers, 1800 F Street, NW., Room 4041, Washington, DC 20405.

Instructions: Please submit comments only and cite FAR Case 2009-029, 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:

Mr. Michael O. Jackson, Procurement Analyst, at [phone], for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at [phone]. Please cite FAR Case 2009-029.

SUPPLEMENTARY INFORMATION:

A. Background

This case was initiated after an agency identified an inconsistency in the use of the SF 26 by contracting officers. Although block 18 of the form is intended for use only with sealed-bid procurements, contracting officers have used block 18 with negotiated procurements, which has had unintended negative consequences in certain contract disputes.

FAR 53.214(a) prescribes the SF 26 for use in contracting for supplies and services by sealed bidding (except for construction and architect-engineer services). The SF 26 is used to award sealed-bid contracts after obtaining bids using a SF 33, Solicitation, Offer, and Award. FAR 14.408-1(d)(1) specifies that, if an offer made using a SF 33 leads to further changes, the resulting contract must be prepared as a bilateral document using the SF 26.

This case is based on instances where contracting officers have mistakenly checked block 18 when awarding negotiated, not sealed bid, contracts. Such use has created the potential for disputes in situations where the Government's intent was not to accept the terms of the offer in its entirety, as the current wording of block 18 may imply.

The Councils believe that revising the header for blocks 17 and 18 and block 18 of the form will eliminate the issue. In addition to the recent enhancements to the instructions for use of the form, at FAR 53.214 and 53.215-1, the Councils propose to add “sealed bid” to the title of block 18, change “offer” to “bid” each time it occurs in block 18, and add a new sentence at the end of the block stating that block 18 should only be checked when awarding a sealed-bid contract.

These changes will not prohibit the use of the SF 26 for awarding negotiated procurements; it will only prohibit the use of block 18 of the SF 26 when awarding negotiated procurements.

This is not a significant regulatory action and, therefore, was not subject to review under Section 6 of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

The Councils do not expect this proposed rule 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 the rule does not impose any additional requirements on small businesses, but rather clarifies an area open to confusion. Therefore, an Initial Regulatory Flexibility Analysis has not been performed. The Councils will consider comments from small entities concerning the affected FAR part 53 in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 601, et seq. (FAR Case 2009-029), in all correspondence. The Councils will also consider comments from small entities concerning the existing regulations in parts 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 (FAR Case 2009-029), in all correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the proposed changes to the FAR do not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. chapter 35, et seq.

List of Subjects in 48 CFR Part 53

• Government procurement

Dated: August 27, 2010.

Edward Loeb,

Director, Acquisition Policy Division.

Therefore, DoD, GSA, and NASA propose amending 48 CFR part 53 as set forth below:

PART 53—FORMS

1. The authority citation for 48 CFR part 53 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).

§ 53.214

[Amended]

2. Amend section 53.214 in paragraph (a) by removing “SF 26 (APR 2008)” and adding “SF 26 (Date)” in its place.

§ 53.215-1

[Amended]

3. Amend section 53.215-1 in paragraph (a) by removing “SF 26 (APR 2008)” and adding “SF 26 (Date)” in its place.