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###### Department of Veterans Affairs

          - 48 CFR Parts 852 and 873
          - RIN 2900-AQ78

# AGENCY:

Department of Veterans Affairs.

# ACTION:

Proposed rule.

# SUMMARY:

                        The Department of Veterans Affairs (VA) is proposing to amend and update its VA Acquisition Regulation (VAAR) in phased increments to revise or remove any policy superseded by changes in the Federal Acquisition Regulation (FAR), to remove any procedural guidance internal to VA into the VA Acquisition Manual (VAAM), and to incorporate any new agency specific regulations or policies. These changes seek to streamline and align the VAAR with the FAR and remove outdated and duplicative requirements and reduce burden on contractors. The VAAM incorporates portions of the removed VAAR as well as other internal agency acquisition policy. VA will rewrite certain parts of the VAAR and VAAM, and as VAAR parts are rewritten, will publish them in the                         **Federal Register**                        . VA will combine related topics, as appropriate. This rulemaking revises VAAR coverage concerning Simplified Procedures for Health-Care Resources as well as an affected part concerning Solicitation Provisions and Contract Clauses.                    

# DATES:

Comments must be received on or before March 22, 2021 to be considered in the formulation of the final rule.

# ADDRESSES:

                        Comments may be submitted through                         *www.Regulations.gov or mailed to*                         Mr. Rafael Taylor, (003A2A), Department of Veterans Affairs, Procurement Policy and Warrant Management Services, 425 I Street NW, Room 1064, Washington, DC 20001. Comments should indicate that they are submitted in response to “RIN 2900-AQ78—VA Acquisition Regulation: Simplified Procedures for Health-Care Resources.” Comments received will be available at                         *regulations.gov*                         for public viewing, inspection or copies.                    

# FOR FURTHER INFORMATION CONTACT:

Mr. Rafael Taylor, Senior Procurement Analyst, Procurement Policy and Warrant Management Services, 003A2A, 425 I Street NW, Washington, DC 20001, (202) 382-2787. (This is not a toll-free number.)

# SUPPLEMENTARY INFORMATION:

## Background

This rulemaking is issued under the authority of the Office of Federal Procurement Policy (OFPP) Act which provides the authority for an agency head to issue agency acquisition regulations that implement or supplement the FAR.

VA is proposing to revise the VAAR to add new policy or regulatory requirements and to remove any redundant guidance and guidance that is applicable only to VA's internal operating processes or procedures. Codified acquisition regulations may be amended and revised only through rulemaking. All amendments, revisions and removals have been reviewed and concurred with by VA's Integrated Product Team of agency stakeholders.

The VAAR uses the regulatory structure and arrangement of the FAR and headings and subject areas are consistent with FAR content. The VAAR is divided into subchapters, parts (each of which covers a separate aspect of acquisition), subparts, and sections.

The Office of Federal Procurement Policy Act, as codified in 41 U.S.C. 1707, provides the authority for the Federal Acquisition Regulation and for the issuance of agency acquisition regulations consistent with the FAR.

When Federal agencies acquire supplies and services using appropriated funds, the purchase is governed by the FAR, set forth at Title 48 Code of Federal Regulations (CFR), chapter 1, parts 1 through 53, and the agency regulations that implement and supplement the FAR. The VAAR is set forth at Title 48 CFR, chapter 8, parts 801 to 873.

## Discussion and Analysis

VA proposes to make the following changes to the VAAR in this phase of its revision and streamlining initiative. For procedural guidance cited below that is proposed to be deleted from the VAAR, each section cited for removal has been considered for inclusion in VA's internal agency operating procedures in accordance with FAR 1.301(a)(2). Similarly, delegations of authority that are removed from the VAAR will be included in the VAAM as internal departmental guidance. The VAAM is being created in parallel with these revisions to the VAAR and is not subject to the rulemaking process as they are internal VA procedures and guidance. The VAAM will not be finalized until corresponding VAAR parts are finalized, and therefore the VAAM is not yet available online.

## VAAR Part 852—Solicitation Provisions and Contract Clauses

We are proposing to revise the following provisions to make minor grammatical corrections and to capitalize all principal words in their titles: 852.273-70, Late Offers; 852.273-71, Alternative Negotiation Techniques; 852.273-72, Alternative Evaluation; 852.273-73, Evaluation—Health-Care Resources, and 852.273-74, Award Without Exchanges. The provisions 852.273-71, Alternative Negotiation Techniques, and 852.273-73, Evaluation—Health-Care Resources, are also amended to revise the citation in the first sentence to read “873.110(d).”

## VAAR Part 873—Simplified Procedures for Health-Care Resources

We propose to modify the title of part 873 by deleting the word “Acquisition” to reflect more accurately the meaning of the statute (38 U.S.C. 8153). The title would then be “Simplified Procedures for Health-Care Resources.” This change avoids any misunderstanding that these acquisitions would be subject to FAR Part 13, Simplified Acquisition Procedures, and the corresponding part 813 in the VAAR.

We also propose to revise the part 873 authorities to add 38 U.S.C. 8127-8128, VA's unique authority as implemented under the Veterans First Contracting Program.

                    We propose to replace the 38 U.S.C. 501 citation with 41 U.S.C. 1702 which addresses the acquisition planning and management responsibilities of Chief Acquisition Officers and Senior Procurement Executives, to include implementation of unique procurement                           ( print page 6282)                        policies, regulations, and standards of the executive agency.                

We propose to modify the citation 38 U.S.C. 8153 to 38 U.S.C. 8151-8153 to correctly cite the complete authority of the statute.

We propose to add the citation of 41 U.S.C. 1121(c)(3) which speaks to the authority of an executive agency under another law to prescribe policies, regulations, procedures, and forms for procurement that are subject to the authority conferred in the cited section, as well as other sections of Title 41 as shown therein.

We also propose to add 41 U.S.C 1303, an updated positive law codification to reflect additional authority of the VA as an executive agency to issue regulations that are essential to implement Governmentwide policies and procedures in the agency, as well as to issue additional policies and procedures required to satisfy the specific needs of the VA.

In 873.101, Policy, we propose to revise the single paragraph to explain more clearly the types of health-care resources that may be procured from VA-affiliated institutions under the authority of 38 U.S.C. 7302, and to explain when and how such resources that are commercial services may be procured from sources that are not affiliated with the Department under 38 U.S.C. 7302.

In 873.102, Definitions, we propose to revise the definition of “Commercial service” to remove the phrase “except construction exceeding $2,000 and architect-engineer services” since it is not a limitation contained in 38 U.S.C. 8153.

We propose to revise 873.103, Priority sources, by removing the unnecessary phrase “Without regard to FAR 8.002(a)(2)” in the first sentence. We also propose to add a statement regarding the applicability of 38 U.S.C. 8127(d) to this part by inserting a reference to revised policy regarding the priority of AbilityOne covered services as a mandatory source set forth at 808.002 (a)(2) (which implements Pub. L. 116-155, the Department of Veterans Affairs Contracting Preference Consistency Act of 2020). AbilityOne covered services remain a priority source under VAAR part 873 as set forth in 808.002(a)(2). We also propose to insert a reference to 873.107, Socioeconomic programs.

In VAAR section 873.104, Competition requirements, we propose to clarify that health-care resources may be acquired on a sole source basis from an institution affiliated with the Department under 38 U.S.C. 7302 if the resource is a commercial service, the use of medical equipment or space, or research. Such sole source contracts are not required to be publicized as required by FAR 5.101, nor do they require written justification under 41 U.S.C. 3304(e) or under FAR part 6. It would also clarify that when acquiring health-care resources from institutions or organizations not affiliated with the VA, then the Department shall permit all responsible sources, as appropriate, to submit a bid, proposal, or quotation for the resources to be procured and to provide for the consideration by the Department of bids, proposals, or quotations so submitted. Such actions shall also be publicized as otherwise required by VAAR section 873.108.

We propose to revise VAAR section 873.105, Acquisition planning, to delete the first paragraph as unnecessary; to redesignate the remaining paragraphs as (a), (b), and (c); to limit the need to assemble an acquisition team to those actions with non-affiliated sources described in VAAR section 873.104(b); and to comply with the requirements of the Veterans First preferences in VAAR subpart 819.70 and section 873.103 when performing market research.

We propose to revise the title of VAAR section 873.106 to read “Exchanges with industry before receipt of proposals.” We also propose to remove the reference to FAR part 10 as unnecessary, to add a sentence requiring that any exchange of information must be consistent with procurement integrity requirements in FAR 3.104, to replace the name “Central Contractor Registration” with that of the current system, “System for Award Management,” and to require research of the VA's Vendor Information Pages (VIP) database to help identify potential VIP-listed and verified Veteran-owned small business concerns.

                    In section 873.107, Socioeconomic programs, we propose to revise and clarify the policy set forth in this section to require implementation of the VA Rule of Two in accordance with VAAR subpart 819.70, and make necessary clarifications regarding priority sources and application of other small business programs. These clarifications and revisions are necessary to fully implement the requirements under various U.S. Federal court cases and new legislation, including the U.S. Supreme Court decision of June 16, 2016, in                     *Kingdomware Technologies, Inc.*                     v.                     *United States,*                     and the recently enacted Public Law 116-155, the Department of Veterans Affairs Contracting Preference Consistency Act of 2020, signed on August 8, 2020.                

We propose to modify section 873.108, Publicizing contract actions, to require publication of only competitive acquisitions, to delete a reference to part 813 to avoid confusion, to remove repetitive language from section 873.104(a), and to make other minor edits.

In VAAR section 873.109, General requirements for acquisition of health-care resources, we propose to revise the section to conform to the requirement of the deviation “Class deviation from VA Acquisition Regulation (VAAR) 815.303—Responsibilities,” of December 15, 2016, designating the contracting officer to be the Source Selection Authority (SSA) unless the HCA has appointed another person to perform that role; to refer to both Performance Work Statements and Statements of Work when discussing “specifications;” and to correct a cross reference to read “873.111(d)(1)(ii).”

We propose to revise section 873.110, Solicitation provisions, to capitalize all clauses and provisions referenced in the section; to revise paragraph (a) to clarify the basis for using provision 852.271-70, Late Offers, in solicitations; to correct the reference in (b) to “Alternative Negotiation Techniques” to cite “873.111(d)(1),” and the reference in (c) to “873.111(d)(1)(ii);” to revise paragraphs (d) and (e) to incorporate the appropriate capitalization of the provisions; and to remove from (f) the prescription of clause 852.207-70, Report of Employment Under Commercial Activities, as that clause is obsolete since the A-76 program is not currently effective.

In section 873.111, Acquisition strategies for health-care resources, we propose to make several minor edits to the text; to remove the opening phrase “Without regard to FAR 13.003 or 13.500(a),” as unnecessary; to insert the acronym “RFQ” and the word “subparts” paragraph (a)(1); to change the spelling of the word “Part” in (a)(2) to lower case; to delete existing paragraph (c) as unnecessary; and to redesignate the remaining paragraphs as (c) and (d).

We propose to revise section 873.113, Exchanges with offerors, to delete in paragraph (c) the repetitive use of the word “perceived;” and to correct the citation in paragraph (e) to 873.111(d)(1) regarding alternative negotiation techniques.

We propose to make two minor edits to the last sentence in paragraph (a) in 873.115, Proposal revisions, to insert the word “all” after the word “safeguard” to stress the need for protecting proposals and revisions, and to delete as unnecessary the word “thereto.”

                    In section 873.116, Source selection decision, we propose to replace the term                           ( print page 6283)                        “contracting officer” in paragraphs (a) and (b) with “Source Selection Authority” or “SSA” to be consistent with the deviation “Class deviation from VA Acquisition Regulation (VAAR) 815.303—Responsibilities,” of December 15, 2016, and to remove from paragraph (c) the reference to section 815.308 since that section does not exist.                

In section 873.118, Debriefings, we propose to revise the first sentence to read “Offerors whose proposals are not accepted under a competitive request for proposals (RFP) may submit a written request for a debriefing to the contracting officer.” The current language uses non-standard acquisition terms.

## Executive Orders 12866, 13563 and 13771

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). E.O. 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. The Office of Information and Regulatory Affairs has determined that this rule is not a significant regulatory action under Executive Order 12866.

                    VA's impact analysis can be found as a supporting document at                     *http://www.regulations.gov,*                     usually within 48 hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its impact analysis are available on VA's website at                     *http://www.va.gov/​orpm/​,*                     by following the link for “VA Regulations Published From FY 2004 Through Fiscal Year to Date.”                

This proposed rule is not expected to be an E.O. 13771 regulatory action because this proposed rule is not significant under E.O. 12866.

## Paperwork Reduction Act

This proposed rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

## Regulatory Flexibility Act

The Secretary hereby certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-612).

This rulemaking does not change VA's policy regarding small businesses, does not have an economic impact to individual businesses, and there are no increased or decreased costs to small business entities. On this basis, the proposed rule would not have an economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. Therefore, pursuant to 5 U.S.C. 605(b), the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do not apply.

## Unfunded Mandates

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal Governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This proposed rule will have no such effect on State, local, and tribal Governments or on the private sector.

# List of Subjects

### 48 CFR Part 852

      - Government procurement
      - Reporting and recordkeeping requirements

### 48 CFR Part 873

      - Government procurement

## Signing Authority

The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Brooks D. Tucker, Assistant Secretary for Congressional and Legislative Affairs, Performing the Delegable Duties of the Chief of Staff, Department of Veterans Affairs, approved this document on July 17, 2020, for publication.

Consuela Benjamin,

Regulations Development Coordinator, Office of Regulation Policy & Management, Office of the Secretary, Department of Veterans Affairs.

For the reasons set out in the preamble, VA proposes to amend 48 CFR parts 852 and 873 as follows:

# PART 852—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

1. The authorities for part 852 continue to read as follows: 

Authority: 38 U.S.C. 8127-8128, and 8151-8153; 40 U.S.C. 121(c); 41 U.S.C. 1121(c)(3); 41 U.S.C. 1303; 41 U.S.C. 1702; and 48 CFR 1.301-1.304.

# Subpart 852.2—Text of Provisions and Clauses

2. Section 852.273-70 is revised to read as follows: 

852.273-70 

As prescribed in 873.110(a), insert the following provision:

## LATE OFFERS (DATE)

This provision replaces paragraph (f) of FAR provision 52.212-1, Instructions to Offerors—Commercial Items. Offers or modifications of offers received after the time set forth in a request for quotations or request for proposals may be considered, at the discretion of the Contracting Officer, if determined to be in the best interest of the Government. Late bids submitted in response to an invitation for bid (IFB) will not be considered.

(End of provision)

3. Section 852.273-71 is revised to read as follows: 

852.273-71 

As prescribed in 873.110(b), insert the following provision:

## ALTERNATIVE NEGOTIATION TECHNIQUES (DATE)

The Contracting Officer may elect to use the alternative negotiation techniques described in 873.111(d) in conducting this procurement. If used, Offerors may respond by maintaining offers as originally submitted, revising offers, or submitting an alternative offer. The Government may consider initial offers unless revised or withdrawn, revised offers, and alternative offers in making the award. Revising an offer does not guarantee an offeror an award.

(End of provision)

4. Section 852.273-72 is revised to read as follows: 

852.273-72 

As prescribed in 873.110(c), insert the following provision:

## ALTERNATIVE EVALUATION (DATE)

                            (a) The Government will award a contract resulting from this solicitation to the responsible Offeror submitting the lowest priced offer that conforms to the solicitation. During the specified period for receipt of offers, the amount of the lowest offer will be posted and may be viewed by [                            *Contracting Officer insert description of how the information may be viewed electronically or                                       ( print page 6284)                                    otherwise*]. Offerors may revise offers anytime during the specified period. At the end of the specified time period for receipt of offers, the responsible Offeror submitting the lowest priced offer will be in line for award.                        

(b) Except when it is determined not to be in the Government's best interest, the Government will evaluate offers for award purposes by adding the total price for all options to the total price for the basic requirement. The Government may determine that an offer is unacceptable if the option prices are materially unbalanced. Evaluation of options shall not obligate the Government to exercise the option(s).

(End of provision)

5. Section 852.273-73 is revised to read as follows: 

852.273-73 

As prescribed in 873.110(d), in lieu of FAR provision 52.212-2, the Contracting Officer may insert a provision substantially as follows:

## EVALUATION—HEALTH-CARE RESOURCES (DATE)

                            (a) The Government will award a contract resulting from this solicitation to the responsible Offeror whose proposal, conforming to the solicitation, will be most advantageous to the Government, price and other factors considered. The following information or factors shall be used to evaluate offers: [                            *Contracting Officer insert evaluation information or factors, such as technical capability to meet the Government's requirements, past performance, or such other evaluation information or factors as the Contracting Officer deems necessary to evaluate offers. Price must be evaluated in every acquisition. The Contracting Officer may include the evaluation information or factors in their relative order of importance, such as in descending order of importance. The relative importance of any evaluation information must be stated in the solicitation.*]                        

(b) Except when it is determined not to be in the Government's best interest, the Government will evaluate offers for award purposes by adding the total price for all options to the total price for the basic requirement. The Government may determine that an offer is unacceptable if the option prices are materially unbalanced. Evaluation of options shall not obligate the Government to exercise the option(s). The Government may reject any or all proposals if such action is in the Government's interest. Additionally, the Government may waive informalities and minor irregularities in proposals received.

(c) If this solicitation is a request for proposals (RFP), a written notice of award or acceptance of a proposal, mailed or otherwise furnished to the successful Offeror within the time for acceptance specified in the solicitation, shall result in a binding contract without further action by either party. Before the proposal's specified expiration time, the Government may accept a proposal (or part of a proposal), whether or not there are negotiations after its receipt, unless a written notice of withdrawal is received by the Contracting Officer before award.

(End of provision)

6. Section 852.273-74 is revised to read as follows: 

852.273-74 

As prescribed in 873.110(e), insert the following provision:

## AWARD WITHOUT EXCHANGES (DATE)

The Government intends to evaluate proposals and award a contract without exchanges with Offerors. Therefore, each initial proposal should contain the Offeror's best terms from a cost or price and technical standpoint. However, the Government reserves the right to conduct exchanges if later determined by the Contracting Officer to be necessary.

7. Part 873 is revised to read as follows: 

# PART 873—SIMPLIFIED PROCEDURES FOR HEALTH-CARE RESOURCES

        - 873.101 
        - Policy.
        - 873.102 
        - Definitions.
        - 873.103 
        - Priority sources.
        - 873.104 
        - Competition requirements.
        - 873.105 
        - Acquisition planning.
        - 873.106 
        - Exchanges with industry before receipt of proposals.
        - 873.107 
        - Socioeconomic programs.
        - 873.108 
        - Publicizing contract actions.
        - 873.109 
        - General requirements for acquisition of health-care resources.
        - 873.110 
        - Solicitation provisions.
        - 873.111 
        - Acquisition strategies for health-care resources.
        - 873.112 
        - Evaluation information.
        - 873.113 
        - Exchanges with offerors.
        - 873.114 
        - Best value pool.
        - 873.115 
        - Proposal revisions.
        - 873.116 
        - Source selection decision.
        - 873.117 
        - Award to successful offeror.
        - 873.118 
        - Debriefings.

Authority: 38 U.S.C. 8127-8128; 38 U.S.C. 8151-8153; 40 U.S.C. 121(c); 41 U.S.C. 1121(c)(3); 41 U.S.C. 1303; 41 U.S.C. 1702; and 48 CFR 1.301-1.304.

873.101 

                            (a)                             *General.*                             In accordance with 38 U.S.C. 8153, to secure health-care resources which otherwise might not be feasibly available, or to effectively utilize certain other health-care resources, the Department of Veterans Affairs (VA) may make arrangements by contract for the mutual use, or exchange of use, of health-care resources between VA health-care facilities and any health-care provider, or other entity or individual. This part prescribes simplified procedures for contracts with entities not affiliated with VA under 38 U.S.C. 7302 to secure health-care resources that are a commercial service, or the use of medical equipment or space. VA may enter into such a contract if such resources are not, or would not be, used to their maximum effective capacity. (38 U.S.C. 8153)                        

                            (b)                             *Precedence.*                             These procedures shall be used in conjunction with the Federal Acquisition Regulation (FAR) and other parts of the VAAR. However, when a policy or procedure in the FAR or another part of the VAAR is inconsistent with the procedures contained in this part, this part shall take precedence. (38 U.S.C. 8153)                        

873.102 

*Commercial service*                             means a service that is offered and sold competitively in the commercial marketplace, is performed under standard commercial terms and conditions, and is procured using firm-fixed price contracts. (38 U.S.C. 8153)                        

*Health-care providers*                             include health-care plans and insurers and any organizations, institutions, or other entities or individuals who furnish health-care resources. (38 U.S.C. 8153)                        

*Health-care resource*                             includes hospital care and medical services (as those terms are defined in 38 U.S.C. 1701 and services under sections 1782 and 1783 of this title) any other health-care service, and any health-care support or administrative resource. (38 U.S.C. 8152)                        

873.103 

Except for the acquisition of covered services available from the Committee for Purchase From People Who Are Blind or Severely Disabled and the AbilityOne Program (see FAR subpart 8.7), there are no priority sources for the acquisition of health-care resources consisting of commercial services or the use of medical equipment or space in accordance with 808.002(a)(2) and 873.107. (38 U.S.C. 8153)

873.104 

                            (a)                             *Affiliated institutions.*                             (1) A health-care resource may be acquired on a sole source basis if a commercial service, the use of medical equipment or space, or research, and is to be acquired from an institution affiliated with the VA in accordance with 38 U.S.C. 7302, including medical practice groups and other entities associated with affiliated institutions, blood banks, organ banks, or research centers. (38 U.S.C. 8153(a)(3)(A))                        

(2) Acquisitions of health-care resources identified in paragraph (a)(1) of this section are not required to be publicized as otherwise required by 873.108 or FAR 5.101.

                            (b)                             *Non-affiliated entities.*                             (1) If the health-care resource required is a                                   ( print page 6285)                                commercial service or the use of medical equipment or space, and is to be acquired from an entity not described in paragraph (a)(1) of this section, contracting officers shall permit all responsible sources, as appropriate, to submit a bid, proposal, or quotation for the resource to be procured, and provide for the consideration by VA of bids, proposals, or quotations so submitted. (38 U.S.C. 8153(a)(3)(B))                        

(2) Acquisition of health-care resources identified in paragraph (b)(1) of this section shall be publicized as otherwise required by 873.108. Moreover, for any such acquisition described in paragraph (b)(1) of this section to be conducted on a sole source basis, the contracting officer must prepare a justification that includes the information and is approved at the levels prescribed in FAR part 6.303. (38 U.S.C. 8153(a)(3)(D))

873.105 

(a) For the acquisition of health-care resources consisting of commercial services or the use of medical equipment or space from non-affiliated institutions as described in 873.104(b), where the acquisition is expected to exceed the simplified acquisition threshold (SAT), an acquisition team must be assembled. The team shall be tailored by the contracting officer for each particular acquisition expected to exceed the SAT. The team should consist of a mix of staff, appropriate to the complexity of the acquisition, and may include fiscal, legal, administrative, and technical personnel, and such other expertise as necessary to assure a comprehensive acquisition plan. The team should include the small business advocate representing the contracting activity or a higher-level designee. At a minimum, the team must include the contracting officer and a representative of the Office of General Counsel and the requesting service. (38 U.S.C. 8153)

(b) The contracting officer or the acquisition team, as appropriate, must conduct market research, including satisfying the requirements of VAAR 808.002(a)(2) and 873.107, Socioeconomic programs, and a VA Rule of Two determination. It is the responsibility of the contracting officer to ensure the requirement is appropriately publicized and information about the procurement opportunity is adequately disseminated as set forth in 873.107. (38 U.S.C. 8153)

(c) In lieu of the requirements of FAR part 7 addressing documentation of the acquisition plan, the contracting officer may conduct an acquisition strategy meeting with cognizant offices to seek approval for the proposed acquisition approach. If a meeting is conducted, briefing materials shall be presented to address the acquisition plan topics and structure in FAR 7.105. Formal written minutes—summarizing decisions, actions, and conclusions—shall be prepared and included in the contract file, along with a copy of the briefing materials. (38 U.S.C. 8153)

873.106 

(a) Exchange of information among all interested parties involved in an acquisition described in 873.104(b), from the earliest identification of a requirement through release of the solicitation, is encouraged. Any exchange of information must be consistent with procurement integrity requirements in FAR 3.104. The nature and extent of exchanges between the Government and industry shall be a matter of the contracting officer's discretion (for acquisitions not exceeding the simplified acquisition threshold) or the acquisition team's discretion, as coordinated by the contracting officer. (38 U.S.C. 8153)

(b) Techniques to promote early exchange of information include—

(1) Industry or small business conferences;

(2) Public hearings;

(3) Market research in accordance with FAR 10.002(b), which shall be followed to the extent that the provisions therein would provide relevant information;

(4) One-on-one meetings with potential offerors;

(5) Presolicitation notices;

(6) Draft requests for proposals (RFPs);

(7) Requests for information (RFIs);

(8) Presolicitation or preproposal conferences;

(9) Site visits;

                            (10) Electronic notices (                            *e.g.,*                             internet); and                        

                            (11) Use of the System for Award Management (SAM) (                            *see http://www.sam.gov/​.*

                            (12) Researching VA's Vendor Information Pages (VIP) database at                             *https://www.vip.vetbiz.va.gov/​.*

873.107 

(a) The Veterans First Contracting Program in VAAR subpart 819.70 takes precedence over other small business programs. (38 U.S.C. 8127-8128)

(b)(1) Except for contract actions subject to 808.002(a)(2), competitive contract actions not otherwise excluded under this part shall be set-aside for VIP-listed service-disabled veteran-owned small business (SDVOSB) concerns or veteran-owned small business (VOSB) concerns if the contracting officer has a reasonable expectation that two or more eligible small business concerns owned and controlled by Veterans will submit offers and that the award can be made at a fair and reasonable price that offers best value to the United States. (38 U.S.C. 8127-8128)

(2) The contracting officer shall proceed with the acquisition under the simplified procedures of this part considering priority sources (see 808.008(a)(2) and 873.103) and preferences for other small businesses in accordance with 819.203-70 and 819.7004. (38 U.S.C. 8153)

(c) Without regard to FAR 13.003(b)(1), 19.203, 19.502, the head of the contracting activity (HCA) may approve a waiver from the requirement for any set-aside for small business participation when a waiver is determined to be in the best interest of the Government. (38 U.S.C. 8153)

(d) The contracting officer shall ensure priorities for veteran-owned small businesses are implemented within the VA hierarchy of small business program preferences, established by 38 U.S.C. 8127 and 8128, as implemented in VAAR subpart 819.70, the Veterans First Contracting Program. Specifically, the contracting officer shall consider preferences for verified service-disabled veteran-owned small businesses (SDVOSBs) first, then preferences for verified veteran-owned small businesses (VOSBs). These priorities will be followed by preferences for other small business concerns in accordance with FAR 19.203, 819.203-70 and 819.7004. (38 U.S.C. 8153)

873.108 

(a) All competitive acquisitions under this part, except as provided in paragraph (b) of this section, for dollar amounts in excess of the SAT, shall be publicly announced utilizing a medium designed to permit all responsible sources, as appropriate under the provisions of this part, to submit a bid, proposal, or quotation (as appropriate).

(1) The publication medium may include the internet, including the Governmentwide point of entry (GPE), and local, regional or national publications or journals, as appropriate, at the discretion of the contracting officer, depending on the complexity of the acquisition.

                            (2) Notice shall be published for a reasonable time prior to issuance of a solicitation, depending on the complexity or urgency of the acquisition, in order to afford potential offerors a reasonable opportunity to respond. If the notice includes a                                   ( print page 6286)                                complete copy of the RFQ or solicitation, a prior notice is not required, and the RFQ or solicitation shall be considered to be announced and issued at the same time.                        

(3) The notice may include contractor qualification parameters, such as time for delivery of service, credentialing or medical certification requirements, small business or other socio-economic preferences, the appropriate small business size standard, and such other qualifications as the contracting officer deems necessary to meet the needs of the Government. (38 U.S.C. 8153)

(b) The requirement for public announcement does not apply to sole source acquisitions described in 873.104(a). However, as required by 38 U.S.C. 8153(a)(3)(D), acquisitions from an institution not affiliated with the Department in accordance with 38 U.S.C. 7302, if conducted on a sole source basis, must still be justified and publicized (see 873.104(b)(2)). (38 U.S.C. 8153)

(c) For acquisitions below the SAT, a public announcement is optional. (38 U.S.C. 8153)

(d) Each solicitation issued under these procedures must prominently identify that the requirement is being solicited under the authority of 38 U.S.C. 8153 and part 873. (38 U.S.C. 8153)

873.109 

                            (a)                             *Source selection authority.*                             Unless the head of the contracting activity (HCA) appoints another individual to serve as the Source Selection Authority (SSA), the contracting officer shall be the SSA for acquisitions of health-care resources, consisting of commercial services, or the use of medical equipment or space, utilizing the guidance contained in this part 873. (38 U.S.C. 8153)                        

                            (b)                             *Performance Work Statement/Statement of Work.*                             The performance work statement (PWS) or statement of work (SOW) must define the requirement and should, in most instances, include qualifications or limitations such as time limits for delivery of service, medical certification or credentialing restrictions, and small business or other socio-economic preferences. The contracting officer may include any other such terms as the contracting officer deems appropriate for each specific acquisition. (38 U.S.C. 8153)                        

                            (c)                             *Documentation.*                             Without regard to FAR 13.106-3(b), 13.501(b), or 15.406-3, the contract file must include—                        

(1) A brief written description of the procedures used in awarding the contract;

(2) A written determination that the health-care resources being procured are not otherwise feasibly available or that utilization of such health-care resources is necessary to meet mission requirements;

(3) Documentation of market research and the results of such research;

(4) The number of offers received; and

(5) An explanation, tailored to the size and complexity of the acquisition, of the basis for the contract award decision. (38 U.S.C. 8153)

                            (d)                             *Time for receipt of quotations or offers.*                             (1) Without regard to FAR 5.203, contracting officers shall set a reasonable time for receipt of quotations or proposals in the solicitations.                        

(2) Without regard to FAR 15.208 or 52.212-1(f), quotations or proposals received after the time set forth in an RFQ or request for proposals (RFP) may be considered at the discretion of the contracting officer if determined to be in the best interest of the Government. Contracting officers must document the rationale for accepting quotations or proposals received after the time specified in the RFQ or RFP. This paragraph (d)(2) shall not apply to RFQs or RFPs if alternative evaluation techniques described in 873.111(d)(1)(ii) are used. This paragraph (d)(2) does not apply to invitations for bid (IFBs). (38 U.S.C. 8153)

                            (e)                             *Cancellation of procurements.*                             Any acquisition may be canceled by the contracting officer at any time during the acquisition process if cancellation is determined to be in the best interest of the Government and a memorandum for the record in included in the solicitation file explaining the reasons for the cancellation. (38 U.S.C. 8153)                        

873.110 

(a) As required in 873.109(d), contracting officers shall set a reasonable time for receipt of quotations or proposals and shall insert the provision at 852.273-70, Late Offers, in all RFQs and RFPs exceeding the micro-purchase threshold. However, this provision shall not be used if the provision 852.273-71, Alternative Negotiation Techniques, is to be used. (38 U.S.C. 8153)

(b) The contracting officer shall insert a provision in RFQs and solicitations, substantially the same as the provision at 852.273-71, Alternative Negotiation Techniques, when either of the alternative negotiation techniques described in 873.111(d)(1) will be used. (38 U.S.C. 8153)

(c) The contracting officer shall insert the provision at 852.273-72, Alternative Evaluation, in lieu of the provision at 52.212-2, Evaluation—Commercial Items, when the alternative negotiation technique described in 873.111(d)(1)(ii) will be used. (38 U.S.C. 8153)

(d) When evaluation information, as described in 873.112, is to be used to select a contractor under a RFQ or RFP for health-care resources consisting of commercial services or the use of medical equipment or space, the contracting officer may insert the provision at 852.273-73, Evaluation—Health-Care Resources, in the RFQ or RFP in lieu of FAR provision 52.212-2. (38 U.S.C. 8153)

(e) As provided at 873.113(f), if award may be made without exchange with offerors, the contracting officer shall include the provision at 852.273-74, Award Without Exchanges, in the RFQ or RFP. (38 U.S.C. 8153)

(f) The contracting officer shall insert the FAR clause at 52.207-3, Right of First Refusal of Employment, in all RFQs, solicitations, and contracts issued under the authority of 38 U.S.C. 8151-8153 which may result in a conversion, from in-house performance to contract performance, of work currently being performed by Department of Veterans Affairs employees. (38 U.S.C. 8153)

873.111 

The following acquisition processes and techniques may be used, singly or in combination with others, as appropriate, to design acquisition strategies suitable for the complexity of the requirement and the amount of resources available to conduct the acquisition. These strategies should be considered during acquisition planning. The contracting officer shall select the process most appropriate to the particular acquisition. There is no preference for sealed bid acquisitions. (38 U.S.C. 8153)

                            (a)                             *Request for quotations (RFQ).*                             (1) Without regard to FAR subparts 6.1 or 6.2, contracting officers must solicit a sufficient number of sources to promote competition to the maximum extent practicable and to ensure that the purchase is advantageous to the Government, based, as appropriate, on either price alone or price and other factors (                            *e.g.,*                             past performance and quality). RFQs must notify vendors of the basis upon which the award is to be made. (                            *see*                             FAR 13.004)                        

                            (2) For acquisitions in excess of the SAT, the procedures set forth in FAR part 13 concerning RFQs may be utilized without regard to the dollar                                   ( print page 6287)                                thresholds contained therein. (38 U.S.C. 8153)                        

                            (b)                             *Sealed bidding.*                             FAR part 14 provides procedures for sealed bidding.                        

                            (c)                             *Multiphase acquisition technique.*                             (1)                             *General.*                             Without regard to FAR 15.202, multiphase acquisitions may be appropriate when the submission of full proposals at the beginning of an acquisition would be burdensome for offerors to prepare and for Government personnel to evaluate. Using multiphase techniques, the Government may seek limited information initially, make one or more down-selects, and request a full proposal from an individual offeror or limited number of offerors. Provided that the notice notifies offerors, the contracting officer may limit the number of proposals during any phase to the number that will permit an efficient competition among proposals offering the greatest likelihood of award. The contracting officer may indicate in the notice an estimate of the greatest number of proposals that will be included in the down-select phase. The contracting officer may down-select to a single offeror. (38 U.S.C. 8153)                        

                            (2)                             *First phase notice.*                             In the first phase, the Government shall publish a notice (see 873.108) that solicits responses and that may provide, as appropriate, a general description of the scope or purpose of the acquisition and the criteria that will be used to make the initial down-select decision. The notice may also inform offerors of the evaluation criteria or process that will be used in subsequent down-select decisions. The notice must contain sufficient information to allow potential offerors to make an informed decision about whether to participate in the acquisition. The notice must advise offerors that failure to participate in the first phase will make them ineligible to participate in subsequent phases. The notice may be in the form of a synopsis in the Governmentwide point of entry (GPE) or a narrative letter or other appropriate method that contains the information required by this paragraph. (38 U.S.C. 8153)                        

                            (3)                             *First phase responses.*                             Offerors shall submit the information requested in the notice described in paragraph (d)(2) of this section. Information sought in the first phase may be limited to a statement of qualifications and other appropriate information (                            *e.g.,*                             proposed technical concept, past performance information, limited pricing information). (38 U.S.C. 8153)                        

                            (4)                             *First phase evaluation and down-select.*                             The Government shall evaluate all offerors' submissions in accordance with the notice and make a down-select decision. (38 U.S.C. 8153)                        

                            (5)                             *Subsequent phases.*                             Additional information shall be sought in the second phase so that a down-select can be performed or an award made without exchanges, if necessary. The contracting officer may conduct exchanges with remaining offeror(s), request proposal revisions, or request best and final offers, as determined necessary by the contracting officer, in order to make an award decision. (38 U.S.C. 8153)                        

                            (6)                             *Debriefing.*                             Without regard to FAR 15.505, contracting officers must debrief offerors whose proposals are not accepted under a competitive request for proposals (RFP) as required by 873.118. (38 U.S.C. 8153)                        

                            (d)                             *Alternative negotiation techniques.*                             (1) Contracting officers may utilize alternative negotiation techniques for the acquisition of health-care resources. Alternative negotiation techniques may be used when award will be based on either price or price and other factors. Alternative negotiation techniques include but are not limited to:                        

(i) Indicating to offerors a price, contract term or condition, commercially available feature, and/or requirement (beyond any requirement or target specified in the solicitation) that offerors will have to improve upon or meet, as appropriate, in order to remain competitive.

(ii) Posting offered prices electronically or otherwise (without disclosing the identity of the offerors) and permitting revisions of offers based on this information.

                            (2) Except as otherwise permitted by law, contracting officers shall not conduct acquisitions under this section in a manner that reveals the identities of offerors, releases proprietary information, or otherwise gives any offeror a competitive advantage (                            *see*                             FAR 3.104). (38 U.S.C. 8153)                        

873.112 

(a) Without regard to FAR 15.304—Evaluation factors and significant subfactors (except for 15.304(c)(1) and (c)(3), which do apply to acquisitions under this authority), the criteria, factors, or other evaluation information that apply to an acquisition, and their relative importance, are within the broad discretion of agency acquisition officials as long as the evaluation information is determined to be in the best interest of the Government. (38 U.S.C. 8153)

(b) Price or cost to the Government must be evaluated in every source selection. Past performance shall be evaluated in source selections for competitive acquisitions exceeding the SAT unless the contracting officer documents that past performance is not an appropriate evaluation factor for the acquisition. (38 U.S.C. 8153)

(c) The quality of the product or service may be addressed in source selection through consideration of information such as past compliance with solicitation requirements, technical excellence, management capability, personnel qualifications, and prior experience. The information required from quoters, bidders, or offerors shall be included in notices or solicitations, as appropriate. (38 U.S.C. 8153)

(d) The relative importance of any evaluation information included in a solicitation must be set forth therein. (38 U.S.C. 8153)

873.113 

(a) Without regard to FAR 15.201 or 15.306, acquisitions generally involve exchanges between the Government and competing offerors. Open exchanges support the goal of efficiency in Government by providing the Government with relevant information (in addition to that submitted in the offeror's initial proposal) needed to understand and evaluate the offeror's proposal. The nature and extent of exchanges between the Government and offerors is a matter of contracting officer judgment. Clarifications, communications, and discussions are not applicable to acquisitions under this part 873. (38 U.S.C. 8153)

(b) Exchanges with potential offerors may take place throughout the source selection process. Exchanges may start in the planning stages and continue through contract award. Exchanges should occur most often with offerors determined to be in the best value pool (see 873.114). The purpose of exchanges is to ensure there is mutual understanding between the Government and the offerors on all aspects of the acquisition, including offerors' submittals/proposals. Information disclosed as a result of oral or written exchanges with an offeror may be considered in the evaluation of an offeror's proposal. (38 U.S.C. 8153)

                            (c) Exchanges may be conducted, in part, to obtain information that explains or resolves ambiguities or other concerns (                            *e.g.,*                             perceived errors, omissions, or deficiencies) in an Offeror's proposal. (38 U.S.C. 8153)                        

(d) Exchanges shall only be initiated if authorized by the contracting officer and need not be conducted with all offerors. (38 U.S.C. 8153)

                            (e) Except for acquisitions based on alternative negotiation techniques contained in 873.111(d)(1), the contracting officer and other Government personnel involved in the acquisition shall not disclose                                   ( print page 6288)                                information regarding one offeror's proposal to other offerors without consent of the offeror in accordance with FAR parts 3 and 24. (38 U.S.C. 8153)                        

(f) Award may be made on initial proposals without exchanges if the solicitation states that the Government intends to evaluate proposals and make award without exchanges, unless the contracting officer determines that exchanges are considered necessary. (38 U.S.C. 8153)

873.114 

(a) Without regard to FAR 15.306(c), the contracting officer may determine the most highly rated proposals having the greatest likelihood of award based on the information or factors and subfactors in the solicitation. These vendors constitute the best value pool. This determination is within the sole discretion of the contracting officer. Competitive range determinations are not applicable to acquisitions under this part 873. (38 U.S.C. 8153)

(b) In planning an acquisition, the contracting officer may determine that the number of proposals that would otherwise be included in the best value pool is expected to exceed the number at which an efficient, timely, and economical competition can be conducted. In reaching such a conclusion, the contracting officer may consider such factors as the results of market research, historical data from previous acquisitions for similar services, and the resources available to conduct the source selection. Provided the solicitation notifies offerors that the best value pool can be limited for purposes of making an efficient, timely, and economical award, the contracting officer may limit the number of proposals in the best value pool to the greatest number that will permit an efficient competition among the proposals offering the greatest likelihood of award. The contracting officer may indicate in the solicitation the estimate of the greatest number of proposals that will be included in the best value pool. The contracting officer may limit the best value pool to a single offeror. (38 U.S.C. 8153)

(c) If the contracting officer determines that an offeror's proposal is no longer in the best value pool, the proposal shall no longer be considered for award. Written notice of this decision must be provided to unsuccessful offerors at the earliest practicable time. (38 U.S.C. 8153)

873.115 

(a) The contracting officer may request proposal revisions as often as needed during the proposal evaluation process at any time prior to award from vendors remaining in the best value pool. Proposal revisions shall be submitted in writing. The contracting officer may establish a common cutoff date for receipt of proposal revisions. Contracting officers may request best and final offers n. In any case, contracting officers and acquisition team members must safeguard all proposals and revisions to avoid unfair dissemination of an offeror's proposal. (38 U.S.C. 8153)

(b) If an offeror initially included in the best value pool is no longer considered to be among those most likely to receive award after submission of proposal revisions and subsequent evaluation thereof, the offeror may be eliminated from the best value pool without being afforded an opportunity to submit further proposal revisions. (38 U.S.C. 8153)

(c) Requesting and/or receiving proposal revisions does not necessarily conclude exchanges. However, requests for proposal revisions should advise offerors that the Government may make award without obtaining further revisions. (38 U.S.C. 8153)

873.116 

(a) An integrated comparative assessment of proposals should be performed before source selection is made. The SSA shall independently determine which proposal(s) represents the best value, consistent with the evaluation information or factors and subfactors in the solicitation, and that the prices are fair and reasonable. The SSA may determine that all proposals should be rejected if it is in the best interest of the Government. (38 U.S.C. 8153)

(b) The source selection team, or advisory boards or panels, may conduct comparative analysis(es) of proposals and make award recommendations, if the SSA requests such assistance. (38 U.S.C. 8153)

(c) The source selection decision must be documented in accordance with FAR 15.308. (38 U.S.C. 8153)

873.117 

(a) The contracting officer shall award a contract to the successful offeror by furnishing the contract or other notice of the award to that offeror. (38 U.S.C. 8153)

(b) If a request for proposal (RFP) process was used for the solicitation and if award is to be made without exchanges, the contracting officer may award a contract without obtaining the offeror's signature a second time. The offeror's signature on the offer constitutes the offeror's agreement to be bound by the offer. If a request for quotation (RFQ) process was used for the solicitation, and if the contracting officer determines there is a need to establish a binding contract prior to commencement of work, the contracting officer should obtain the offeror's acceptance signature on the contract to ensure formation of a binding contract. (38 U.S.C. 8153)

(c) If the award document includes information that is different than the latest signed offer, both the offeror and the contracting officer must sign the contract award. (38 U.S.C. 8153)

(d) When an award is made to an offeror for less than all of the items that may be awarded and additional items are being withheld for subsequent award, each notice shall state that the Government may make subsequent awards on those additional items within the offer acceptance period. (38 U.S.C. 8153)

873.118 

Offerors whose proposals are not accepted under a competitive request for proposals (RFP) may submit a written request for a debriefing to the contracting officer. Without regard to FAR 15.505, preaward debriefings may be conducted by the contracting officer when determined to be in the best interest of the Government. Post-award debriefings shall be conducted in accordance with FAR 15.506. (38 U.S.C. 8153)

[FR Doc. 2020-29196 Filed 1-19-21; 8:45 am]

BILLING CODE 8320-01-P