[Federal Register Volume 78, Number 251 (Tuesday, December 31, 2013)]
[Rules and Regulations]
[Pages 80376-80379]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-31149]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 7, 8, 9, and 52
[FAC 2005-72; FAR Case 2009-024; Item II; Docket No. 2011-0086,
Sequence No. 1]
RIN 9000-AM07
Federal Acquisition Regulation; Prioritizing Sources of Supplies
and Services for Use by the Government
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the
Federal Acquisition Regulation (FAR) to update and clarify the priority
of sources of supplies and services for use by the Government.
DATES: Effective: January 30, 2014.
FOR FURTHER INFORMATION CONTACT: Mr. Karlos Morgan, Procurement
Analyst, at 202-501-2364, for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat at 202-501-4755. Please cite FAC 2005-72, FAR Case 2009-
024.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 76 FR 34634 on June 14, 2011, to amend the Federal
Acquisition Regulation (FAR) to limit the section of the FAR addressing
the priorities for use of Government supply sources to a discussion of
the mandatory Government sources of supplies and services. Seventy-nine
respondents submitted comments. Most respondents requested that an
Initial Regulatory Flexibility Analysis (IRFA) be performed. Based on
the comments, the Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (the Councils) performed an IRFA after
the initial publication of the proposed rule. The IRFA was published in
the Federal Register at 77 FR 54872 on September 6, 2012. Six
respondents submitted comments in response to the Notice of Correction.
II. Discussion and Analysis
The Councils reviewed the comments in the development of the final
rule. A discussion of the comments and the changes made to the rule as
a result of those comments are provided as follows:
A. Summary of Significant Changes
Language was added at FAR 7.102(a) to require
consideration of existing contracts before creating new contracts.
FAR 8.002(a)(1)(i) was revised to read ``Inventories of
the requiring agency'' for clarification.
FAR 8.003(d) has been revised to note that the Defense
National Stockpile Center has been renamed ``DLA Strategic Materials''.
FAR 8.004 was revised to note that the sources listed in
8.004(a) are not listed in any order of priority.
A sentence was added to FAR 8.004 reminding users that
when satisfying requirements from non-mandatory sources, they should
refer to FAR 7.105(b) and part 19 regarding consideration of small
business, veteran-owned small business, service-disabled veteran-owned
small business, HUBZone small business, small disadvantaged business
(including 8(a) participants), and women-owned small business concerns.
Use of these sources can be counted towards an agency's small business
contracting goals.
B. Analysis of Public Comments
1. Federal Strategic Sourcing Initiative (FSSI) Blanket Purchase
Agreement (BPA) for Office Supplies
Comment: Most respondents believe the rule is both unnecessary and
damaging to competition from small businesses throughout their
industry. The FSSI program has curtailed their Federal market business
which led to reduction in employees' hours.
Response: The purpose of the rule is to update and clarify the
order of priority at FAR 8.002, and add a new section to encourage
agencies to give consideration to using certain existing non-mandatory
sources to leverage agency buying power and achieve administrative
efficiencies that reduce costs and produce savings for our taxpayers.
The rule does not change how agencies are purchasing supplies and/or
services under Federal Supply Schedules.
No new mandatory sources are proposed for consideration, only
existing sources were included for informational purposes. The existing
non-mandatory sources are being listed prior to commercial sources, but
agencies remain free to compete their requirements among commercial
sources of supply, where it is in their
[[Page 80377]]
best interest to meet their needs through open-market procurement.
2. Competition
Comment: Respondents indicated that the proposed rule would
severely hamper competition in the Federal market place.
Response: This rule does not impede competition. No new mandatory
sources are proposed for consideration under this rule. Existing
sources were included for informational purposes, as a means of
supporting market research, which is required by law (41 U.S.C.
3301(a)(2)) for the procurement of supplies and services. Competition
in the open market will continue if it is in an agency's best interests
to meet its needs through open-market procurement.
3. Federal Supply Schedule (FSS) Contracts
Comment: A respondent stated that the proposed rule is not clear
about whether the contracting officer must check and use contracts
under FSS if there is an FSS holder that can meet the agency's needs.
Response: The use of FSS is not required. However, under FAR
7.102(a)(4) of the final rule, agencies are encouraged to consider
using FSS and other existing vehicles before considering sources in the
open market.
4. The Murray Benjamin Electric Company Protest
Comment: One respondent indicated that use of FSS is mandatory if
the schedule holder is able to meet the agency's needs. The respondent
stated that the Murray Benjamin case is ambiguous and the Government
interpretation is faulty.
Response: The final rule amends FAR part 8 to clarify that use of
FSS is not mandatory. Rather, as part of good market research, agencies
are encouraged to consider using FSS and other existing vehicles before
considering sources in the open market.
5. FAR Case 2008-003
Comment: One respondent indicated that the proposed rule undermines
the intent behind the rule change from FAR Case 2008-003. According to
the respondent, 2008-003 final rule requires competition within the FSS
for contracts over the simplified acquisition threshold. The respondent
believed that the proposed rule requires competition to the open
market, not just within FSS.
Response: Final rule 2008-003, ``Public Disclosure of Justification
and Approval Documents for Noncompetitive Contracts,'' which required
posting justification and approval documents for noncompetitive
contracts, did not apply to placement of orders under the FSS. FAR Case
2007-012, ``Requirements for Acquisitions Pursuant to Multiple-Award
Contracts,'' which implemented section 863 of the Duncan Hunter
National Defense Act for Fiscal Year 2009, required posting of sole
source task or delivery orders in excess of the simplified acquisition
threshold that are placed against multiple award contracts. This rule
is consistent with the intent of FAR Case 2007-012 to provide enhanced
competition.
6. Other Requested Changes to FAR Part 8
Comment: A respondent indicated that the rule should not include
Governmentwide Acquisition Contracts (GWACs) in FAR part 8 and give
them the same level of priority as FSS contracts.
Response: The inclusion of GWACs in FAR part 8 is appropriate as
they are existing contract vehicles available for use by multiple
agencies. Agencies are encouraged to consider existing vehicles prior
to awarding new contracts.
Comment: A respondent recommended that FAR 8.004 be revised to
include text that explains that the enumerated contracts are not, as
the preamble to the proposed rule notes, listed in any order of
priority.
Response: The language of the final rule was revised to include
this clarification.
7. Comments Submitted on the IRFA
Comment: Several respondents expressed their disappointment with
the rule and suggested further study of the negative impacts of the
rule.
Response: Because the rule reflects existing policy and practices,
there is no need to conduct additional economic impact analysis and
other research called for by the respondents.
Comment: Various respondents expressed dissatisfaction with FSSI,
due to a perceived impediment to competition.
Response: The reference to FSSI agreements in FAR 8.004(a)(1) of
the final rule is provided as an example of existing non-mandatory
sources that agencies are encouraged to consider as part of their
market research before considering open market sources.
Comment: One respondent recommended requiring documentation in the
contract file to reflect why an existing source does not meet the
Government's needs.
Response: This type of documentation may be appropriate as part of
the market research process detailed in FAR part 10, Market Research,
and, in many cases, is already required by agency supplements to FAR
part 10.
Comment: One respondent recommended that the Government require
agencies to consider the use of existing sources rather than merely
encouraging them to do so.
Response: The final rule amends FAR 7.102(a) to require, as part of
acquisition planning, appropriate consideration of the use of pre-
existing contracting (including interagency and intra-agency contracts)
to fulfill requirements before awarding new contracts.
III. 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 a significant regulatory action and, therefore, was 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.
IV. Regulatory Flexibility Act
DoD, GSA, and NASA have prepared a Final Regulatory Flexibility
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5
U.S.C. 601, et seq. The FRFA is summarized as follows:
Considerable concern was expressed by small business entities
with the concept and practice of strategic sourcing as evidenced
through FSSI agreements. However, the rule itself only references
FSSI agreements as an example of existing contract sources that
agencies, as part of good market research, are encouraged to
consider using before considering sources in the open market. After
due consideration of pre-existing contracts, agencies remain free to
compete their requirements among commercial sources of supply.
No significant changes were made from the proposed rule in
response to comments on the IRFA.
No comments were submitted by the Chief Counsel for Advocacy of
the Small Business Administration.
This rule deals with the order of preference for sources that
must be considered, and to distinguish them from sources that should
be considered where an agency is unable to satisfy requirements for
supplies and services from mandatory sources. This rule will not
[[Page 80378]]
affect how many small businesses are awarded this type of contract.
This rule does not add any new information collection
requirements.
Interested parties may obtain a copy of the FRFA from the
Regulatory Secretariat. The Regulatory Secretariat has submitted a copy
of the FRFA to the Chief Counsel for Advocacy of the Small Business
Administration.
V. Paperwork Reduction Act
The final 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).
List of Subjects in 48 CFR Parts 7, 8, 9, and 52
Government procurement.
Dated: December 19, 2013.
William Clark,
Acting Director, Office of Government-wide Acquisition Policy, Office
of Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 7, 8, 9, and 52 as
set forth below:
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1. The authority citation for 48 CFR parts 7, 8, 9, and 52 continues to
read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 7--ACQUISITION PLANNING
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2. Amend section 7.102 by revising paragraph (a) to read as follows:
7.102 Policy.
(a) Agencies shall perform acquisition planning and conduct market
research (see part 10) for all acquisitions in order to promote and
provide for--
(1) Acquisition of commercial items or, to the extent that
commercial items suitable to meet the agency's needs are not available,
nondevelopmental items, to the maximum extent practicable (10 U.S.C.
2377 and 41 U.S.C. 251, et seq.);
(2) Full and open competition (see part 6) or, when full and open
competition is not required in accordance with Part 6, to obtain
competition to the maximum extent practicable, with due regard to the
nature of the supplies or services to be acquired (10 U.S.C. 2301(a)(5)
and 41 U.S.C. 253a(a)(1));
(3) Selection of appropriate contract type in accordance with part
16; and
(4) Appropriate consideration of the use of pre-existing contracts,
including interagency and intra-agency contracts, to fulfill the
requirement, before awarding new contracts. (See 8.002 through 8.004
and subpart 17.5).
* * * * *
PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
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3. Revise section 8.000 to read as follows:
8.000 Scope of part.
This part deals with prioritizing sources of supplies and services
for use by the Government.
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4. Revise section 8.002 to read as follows:
8.002 Priorities for use of mandatory Government sources.
(a) Except as required by 8.003, or as otherwise provided by law,
agencies shall satisfy requirements for supplies and services from or
through the mandatory Government sources and publications listed below
in descending order of priority:
(1) Supplies. (i) Inventories of the requiring agency.
(ii) Excess from other agencies (see subpart 8.1).
(iii) Federal Prison Industries, Inc. (see subpart 8.6).
(iv) Supplies that are on the Procurement List maintained by the
Committee for Purchase From People Who Are Blind or Severely Disabled
(see Subpart 8.7).
(v) Wholesale supply sources, such as stock programs of the General
Services Administration (GSA) (see 41 CFR 101-26.3), the Defense
Logistics Agency (see 41 CFR 101-26.6), the Department of Veterans
Affairs (see 41 CFR 101-26.704), and military inventory control points.
(2) Services. Services that are on the Procurement List maintained
by the Committee for Purchase From People Who Are Blind or Severely
Disabled (see subpart 8.7).
(b) Sources other than those listed in paragraph (a) of this
section may be used as prescribed in 41 CFR 101-26.301 and in an
unusual and compelling urgency as prescribed in 6.302-2 and in 41 CFR
101-25.101-5.
(c) The statutory obligation for Government agencies to satisfy
their requirements for supplies or services available from the
Committee for Purchase From People Who Are Blind or Severely Disabled
also applies when contractors purchase the supplies or services for
Government use.
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5. Revise section 8.003 to read as follows:
8.003 Use of other mandatory sources.
Agencies shall satisfy requirements for the following supplies or
services from or through specified sources, as applicable:
(a) Public utility services (see part 41).
(b) Printing and related supplies (see subpart 8.8).
(c) Leased motor vehicles (see subpart 8.11).
(d) Strategic and critical materials (e.g., metals and ores) from
inventories exceeding Defense National Stockpile requirements (detailed
information is available from the DLA Strategic Materials, 8725 John J.
Kingman Rd., Suite 3229, Fort Belvoir, VA 22060-6223.
(e) Helium (see subpart 8.5--Acquisition of Helium).
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6. Redesignate section 8.004 as section 8.005; and add a new section
8.004 to read as follows:
8.004 Use of other sources.
If an agency is unable to satisfy requirements for supplies and
services from the mandatory sources listed in 8.002 and 8.003, agencies
are encouraged to consider satisfying requirements from or through the
non-mandatory sources listed in paragraph (a) of this section (not
listed in any order of priority) before considering the non-mandatory
source listed in paragraph (b) of this section. When satisfying
requirements from non-mandatory sources, see 7.105(b) and part 19
regarding consideration of small business, veteran-owned small
business, service-disabled veteran-owned small business, HUBZone small
business, small disadvantaged business (including 8(a) participants),
and women-owned small business concerns.
(a)(1) Supplies. Federal Supply Schedules, Governmentwide
acquisition contracts, multi-agency contracts, and any other
procurement instruments intended for use by multiple agencies,
including blanket purchase agreements (BPAs) under Federal Supply
Schedule contracts (e.g., Federal Strategic Sourcing Initiative (FSSI)
agreements accessible at http://www.gsa.gov/fssi (see also 5.601)).
(2) Services. Agencies are encouraged to consider Federal Prison
Industries, Inc., as well as the sources listed in paragraph (a)(1) of
this section (see subpart 8.6).
(b) Commercial sources (including educational and non-profit
institutions) in the open market.
8.402 [Amended]
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7. Amend section 8.402 by removing from paragraph (a) ``(see 8.002)''
and adding ``(see 8.004)'' in its place.
[[Page 80379]]
PART 9--CONTRACTOR QUALIFICATIONS
9.405-1 [Amended]
0
8. Amend section 9.405-1 by removing from paragraph (b)(2) ``optional
use''.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.208-9 [Amended]
0
9. Amend section 52.208-9 by removing from the introductory paragraph
``8.004'' and adding ``8.005'' in its place.
[FR Doc. 2013-31149 Filed 12-30-13; 8:45 am]
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