[Federal Register Volume 75, Number 238 (Monday, December 13, 2010)]
[Rules and Regulations]
[Pages 77733-77737]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-30561]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 4, 8, 9, 17, 18, 35, and 41

[FAC 2005-47; FAR Case 2008-032; Item III; Docket 2010-0107, Sequence 
1]
RIN 9000-AL69


Federal Acquisition Regulation; Preventing Abuse of Interagency 
Contracts

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

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are issuing an interim rule 
amending the Federal Acquisition Regulation (FAR) to implement 
provisions regarding, the Duncan Hunter National Defense Authorization 
Act (NDAA) for Fiscal Year 2009 requirements for preventing abuse of 
interagency contracts.

DATES: Effective Date: December 13, 2010.
    Comment Date: Interested parties should submit written comments to 
the Regulatory Secretariat on or before February 11, 2011 to be 
considered in the formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-47, FAR Case 2008-
032, by any of the following methods:
    <bullet> Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by inputting ``FAR Case 
2008-032'' under the heading ``Enter Keyword or ID'' and selecting 
``Search.'' Select the link ``Submit a Comment'' that corresponds with 
``FAR Case 2008-032.'' Follow the instructions provided at the ``Submit 
a Comment'' screen. Please include your name, company name (if any), 
and ``FAR Case 2008-032'' on your attached document.
    <bullet> Mail: General Services Administration, Regulatory 
Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE., 
Washington, DC 20417.
    Instructions: Please submit comments only and cite FAC 2005-47, FAR 
Case 2008-032, in all correspondence related to this case. All comments 
received will

[[Page 77734]]

be posted without change to http://www.regulations.gov, including any 
personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Ms. Lori Sakalos, Procurement Analyst, at (202) 208-0498. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-47, FAR 
Case 2008-032.

SUPPLEMENTARY INFORMATION:

A. Background

    Interagency acquisitions offer important benefits to Federal 
agencies, including economies and efficiencies and the ability to 
leverage resources. This interim rule, which implements section 865 of 
the Duncan Hunter National Defense Authorization Act (NDAA) for Fiscal 
Year 2009, is designed to ensure these benefits are consistently 
achieved. The rule strengthens FAR subpart 17.5, Interagency 
Acquisitions, by--
    <bullet> Broadening the scope of coverage to address all 
interagency acquisitions (with limited exceptions), rather than just 
those conducted under the Economy Act (31 U.S.C. 1535), in recognition 
that an increasing number of interagency acquisitions are conducted 
under other authorities;
    <bullet> Requiring agencies to support the decision to use an 
interagency acquisition with a determination that such action is the 
``best procurement approach'';
    <bullet> Directing that assisted acquisitions be accompanied by 
written agreements between the requesting agency and the servicing 
agency documenting the roles and responsibilities of the respective 
parties, including the planning, execution, and administration of the 
contract;
    <bullet> Requiring the development of business cases to support the 
creation of multi-agency contracts. The Office of Management and Budget 
(OMB) is developing additional guidance on the use of business cases; 
once the guidance is issued, it will be referenced in the FAR; and
    <bullet> Requiring the senior procurement executive for each 
executive agency to submit an annual report on interagency acquisitions 
to the Director of OMB, in accordance with section 865(c) of Public Law 
110-417.
    The interim rule clarifies the meaning of ``interagency 
acquisition,'' ``direct acquisition,'' and ``assisted acquisitions'' 
and moves the terms from FAR subparts 4.6 and 17.5 to FAR part 2. It 
also amends FAR subpart 8.4, Federal Supply Schedules, to add a cross 
reference to the requirements in subpart 17.5 for orders over $500,000 
(a threshold established by statute).
    In developing the rule, the Councils reviewed interagency guidance 
issued by the Office of Federal Procurement Policy at http://www.whitehouse.gov/omb/assets/procurement/iac_revised.pdf.
    The OMB guidance addresses procedures for the use of interagency 
acquisitions to maximize competition, deliver best value to executive 
agencies, and minimize waste, fraud, and abuse. In addition, as 
required by section 865(a), training on interagency acquisitions has 
been made available through the Federal Acquisition Institute (see 
http://www.fai.gov/IAA/launchpage.htm).
    This is a significant regulatory action and, therefore, was subject 
to review under Section 6(b) 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 interim 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. The rule is strengthening interagency acquisition 
procedures to achieve efficiencies and economies of scale across the 
Federal Government. The rule also requires agencies, in the multi-
agency contract business-case analysis, to consider strategies to 
ensure small business participation during acquisition planning. 
Therefore, an Initial Regulatory Flexibility Analysis has not been 
performed. The Councils invite comments from small business concerns 
and other interested parties on the expected impact of this rule on 
small entities.
    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 (FAC 2005-47, FAR Case 
2008-032) in all correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the 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.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense, the Administrator of General Services, and the 
Administrator of the National Aeronautics and Space Administration that 
urgent and compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
because section 865(b) of the Duncan Hunter National Defense 
Authorization Act for Fiscal Year 2009 (Pub. L. 110-417) required the 
publication of the regulations within one year after enactment, October 
14, 2008. However, pursuant to 41 U.S.C. 418b and FAR 1.501-3(b), the 
Councils will consider public comments received in response to this 
interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 2, 4, 8, 9, 17, 18, 35, and 41

    Government procurement.

    Dated: November 24, 2010.
Millisa Gary,
Acting Director, Acquisition Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 8, 9, 17, 18, 
35, and 41 as set forth below:
0
1. The authority citation for 48 CFR parts 2, 4, 8, 9, 17, 18, 35, and 
41 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).

PART 2--DEFINITIONS OF WORDS AND TERMS

0
2. Amend section 2.101 in paragraph (b)(2) by--
0
a. Adding, in alphabetical order, the definitions ``Assisted 
acquisition'', ``Direct acquisition'', and ``Interagency acquisition'';
0
b. Amending the definition ``Multi-agency contract (MAC)'' by removing 
``17.500(b)'' and adding ``17.502-2'' in its place; and
0
c. Adding, in alphabetical order, the definitions ``Requesting 
agency'', and ``Servicing agency''.
    The added text reads as follows:


2.101  Definitions.

* * * * *
    (b) * * *
    (2) * * *
    Assisted acquisition means a type of interagency acquisition where 
a servicing agency performs acquisition activities on a requesting 
agency's behalf, such as awarding and

[[Page 77735]]

administering a contract, task order, or delivery order.
* * * * *
    Direct acquisition means a type of interagency acquisition where a 
requesting agency places an order directly against a servicing agency's 
indefinite-delivery contract. The servicing agency manages the 
indefinite-delivery contract but does not participate in the placement 
or administration of an order.
* * * * *
    Interagency acquisition means a procedure by which an agency 
needing supplies or services (the requesting agency) obtains them from 
another agency (the servicing agency), by an assisted acquisition or a 
direct acquisition. The term includes--
    (1) Acquisitions under the Economy Act (31 U.S.C. 1535); and
    (2) Non-Economy Act acquisitions completed under other statutory 
authorities (e.g., General Services Administration Federal Supply 
Schedules in subpart 8.4 and Governmentwide acquisition contracts 
(GWACs)).
* * * * *
    Requesting agency means the agency that has the requirement for an 
interagency acquisition.
* * * * *
    Servicing agency means the agency that will conduct an assisted 
acquisition on behalf of the requesting agency.
* * * * *

PART 4--ADMINISTRATIVE MATTERS


4.601  [Amended]

0
3. Amend section 4.601 by removing the definitions ``Assisted 
acquisition'', ``Direct acquisition'', ``Requesting agency'', and 
``Servicing agency''.

PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES

0
4. Amend section 8.404 by revising paragraph (b) to read as follows:


8.404  Use of Federal Supply Schedules.

* * * * *
    (b)(1) The contracting officer, when placing an order or 
establishing a BPA, is responsible for applying the regulatory and 
statutory requirements applicable to the agency for which the order is 
placed or the BPA is established. The requiring agency shall provide 
the information on the applicable regulatory and statutory requirements 
to the contracting officer responsible for placing the order.
    (2) For orders over $500,000, see subpart 17.5 for additional 
requirements for interagency acquisitions. For example, the requiring 
agency shall make a determination that use of the Federal Supply 
Schedule is the best procurement approach, in accordance with 17.502-
1(a).
* * * * *

PART 9--CONTRACTOR QUALIFICATIONS


9.106-3  [Amended]

0
5. Amend section 9.106-3 by removing the word ``accommodated'' and 
adding the words ``accommodated (also see subpart 17.5)'' in its place.

PART 17--SPECIAL CONTRACTING METHODS

0
6. Revise subpart 17.5 to read as follows:

Subpart 17.5--Interagency Acquisitions

Sec.
17.500 Scope of subpart.
17.501 General.
17.502 Procedures.
17.502-1 General.
17.502-2 The Economy Act.
17.503 Ordering procedures.
17.504 Reporting requirements.


17.500  Scope of subpart.

    (a) This subpart prescribes policies and procedures applicable to 
all interagency acquisitions under any authority, except as provided 
for in paragraph (b) of this section.
    (b) This subpart does not apply to orders of $500,000 or less 
issued against Federal Supply Schedules.


17.501  General.

    (a) Interagency acquisitions are commonly conducted through 
indefinite-delivery contracts, such as task- and delivery-order 
contracts. The indefinite-delivery contracts used most frequently to 
support interagency acquisitions are Federal Supply Schedules (FSS), 
Governmentwide acquisition contracts (GWACs), and multi-agency 
contracts (MACs).
    (b) An agency shall not use an interagency acquisition to 
circumvent conditions and limitations imposed on the use of funds.
    (c) An interagency acquisition is not exempt from the requirements 
of subpart 7.3, Contractor Versus Government Performance.
    (d) An agency shall not use an interagency acquisition to make 
acquisitions conflicting with any other agency's authority or 
responsibility (for example, that of the Administrator of General 
Services under title 40, United States Code, ``Public Buildings, 
Property and Works'' and title III of the Federal Property and 
Administrative Services Act of 1949.)


17.502  Procedures.


17.502-1  General.

    (a) Determination of best procurement approach--(1) Assisted 
acquisitions. Prior to requesting that another agency conduct an 
acquisition on its behalf, the requesting agency shall make a 
determination that the use of an interagency acquisition represents the 
best procurement approach. As part of the best procurement approach 
determination, the requesting agency shall obtain the concurrence of 
the requesting agency's responsible contracting office in accordance 
with internal agency procedures. At a minimum, the determination shall 
include an analysis of procurement approaches, including an evaluation 
by the requesting agency that using the acquisition services of another 
agency--
    (i) Satisfies the requesting agency's schedule, performance, and 
delivery requirements (taking into account factors such as the 
servicing agency's authority, experience, and expertise as well as 
customer satisfaction with the servicing agency's past performance);
    (ii) Is cost effective (taking into account the reasonableness of 
the servicing agency's fees); and
    (iii) Will result in the use of funds in accordance with 
appropriation limitations and compliance with the requesting agency's 
laws and policies.
    (2) Direct acquisitions. Prior to placing an order against another 
agency's indefinite-delivery vehicle, the requesting agency shall make 
a determination that use of another agency's contract vehicle is the 
best procurement approach. At a minimum, the determination shall 
include an analysis, including factors such as:
    (i) The suitability of the contract vehicle;
    (ii) The value of using the contract vehicle, including--
    (A) The administrative cost savings from using an already existing 
contract;
    (B) Lower prices, greater number of vendors, and reasonable vehicle 
access fees; and
    (iii) The expertise of the requesting agency to place orders and 
administer them against the selected contract vehicle throughout the 
acquisition lifecycle.
    (b) Written agreement on responsibility for management and 
administration--(1) Assisted acquisitions. (i) Prior to the issuance of 
a solicitation, the servicing agency and the requesting agency shall 
both sign a

[[Page 77736]]

written interagency agreement that establishes the general terms and 
conditions governing the relationship between the parties, including 
roles and responsibilities for acquisition planning, contract 
execution, and administration and management of the contract(s) or 
order(s). The requesting agency shall provide to the servicing agency 
any unique terms, conditions, and applicable agency-specific statutes, 
regulations, directives, and other applicable requirements for 
incorporation into the order or contract; for patent rights, see 
27.304-2. In preparing interagency agreements to support assisted 
acquisitions, agencies should review the Office of Federal Procurement 
Policy guidance, Interagency Acquisitions, available at http://www.whitehouse.gov/omb/assets/procurement/iac_revised.pdf.
    (ii) Each agency's file shall include the interagency agreement 
between the requesting and servicing agency, and shall include 
sufficient documentation to ensure an adequate audit consistent with 
4.801(b).
    (2) Direct acquisitions. The requesting agency administers the 
order; therefore, no written agreement with the servicing agency is 
required.


17.502-2  The Economy Act.

    (a) The Economy Act (31 U.S.C. 1535) authorizes agencies to enter 
into agreements to obtain supplies or services by interagency 
acquisition. The Economy Act also provides authority for placement of 
orders between major organizational units within an agency; procedures 
for such intra-agency transactions are addressed in agency regulations.
    (b) The Economy Act applies when more specific statutory authority 
does not exist. Examples of more specific authority are 40 U.S.C. 501 
for the Federal Supply Schedules (subpart 8.4), and 40 U.S.C. 11302(e) 
for Governmentwide acquisition contracts (GWACs).
    (c) Requirements for determinations and findings. (1) Each Economy 
Act order to obtain supplies or services by interagency acquisition 
shall be supported by a determination and findings (D&F). The D&F shall 
state that--
    (i) Use of an interagency acquisition is in the best interest of 
the Government; and
    (ii) The supplies or services cannot be obtained as conveniently or 
economically by contracting directly with a private source.
    (2) If the Economy Act order requires contract action by the 
servicing agency, the D&F must also include a statement that at least 
one of the following circumstances applies:
    (i) The acquisition will appropriately be made under an existing 
contract of the servicing agency, entered into before placement of the 
order, to meet the requirements of the servicing agency for the same or 
similar supplies or services.
    (ii) The servicing agency has the capability or expertise to enter 
into a contract for such supplies or services that is not available 
within the requesting agency.
    (iii) The servicing agency is specifically authorized by law or 
regulation to purchase such supplies or services on behalf of other 
agencies.
    (3) The D&F shall be approved by a contracting officer of the 
requesting agency with authority to contract for the supplies or 
services to be ordered, or by another official designated by the agency 
head, except that, if the servicing agency is not covered by the 
Federal Acquisition Regulation, approval of the D&F may not be 
delegated below the senior procurement executive of the requesting 
agency.
    (4) The requesting agency shall furnish a copy of the D&F to the 
servicing agency with the order.
    (d) Business-case analysis requirements for multi-agency contracts. 
In order to establish a multi-agency contract in accordance with 
Economy Act authority, a business-case analysis must be prepared by the 
servicing agency. The business-case analysis shall--
    (1) Consider strategies for the effective participation of small 
businesses during acquisition planning (see 7.103(s));
    (2) Detail the administration of such contract, including an 
analysis of all direct and indirect costs to the Government of awarding 
and administering such contract;
    (3) Describe the impact such contract will have on the ability of 
the Government to leverage its purchasing power, e.g., will it have a 
negative effect because it dilutes other existing contracts;
    (4) Include an analysis concluding that there is a need for 
establishing the multi-agency contract; and
    (5) Document roles and responsibilities in the administration of 
the contract.
    (e) Payment. (1) The servicing agency may ask the requesting 
agency, in writing, for advance payment for all or part of the 
estimated cost of furnishing the supplies or services. Adjustment on 
the basis of actual costs shall be made as agreed to by the agencies.
    (2) If approved by the servicing agency, payment for actual costs 
may be made by the requesting agency after the supplies or services 
have been furnished.
    (3) Bills rendered or requests for advance payment shall not be 
subject to audit or certification in advance of payment.
    (4) If the Economy Act order requires use of a contract by the 
servicing agency, then in no event shall the servicing agency require, 
or the requiring agency pay, any fee or charge in excess of the actual 
cost (or estimated cost if the actual cost is not known) of entering 
into and administering the contract or other agreement under which the 
order is filled.


17.503  Ordering procedures.

    (a) Before placing an order for supplies or services with another 
Government agency, the requesting agency shall follow the procedures in 
17.502-1 and, if under the Economy Act, also 17.502-2.
    (b) The order may be placed on any form or document that is 
acceptable to both agencies. The order should include--
    (1) A description of the supplies or services required;
    (2) Delivery requirements;
    (3) A funds citation;
    (4) A payment provision (see 17.502-2(e) for Economy Act orders); 
and
    (5) Acquisition authority as may be appropriate (see 17.503(d)).
    (c) The requesting and servicing agencies should agree to 
procedures for the resolution of disagreements that may arise under 
interagency acquisitions, including, in appropriate circumstances, the 
use of a third-party forum. If a third party is proposed, consent of 
the third party should be obtained in writing.
    (d) When an interagency acquisition requires the servicing agency 
to award a contract, the following procedures also apply:
    (1) If a justification and approval or a D&F (other than the 
requesting agency's D&F required in 17.502-2(c)) is required by law or 
regulation, the servicing agency shall execute and issue the 
justification and approval or D&F. The requesting agency shall furnish 
the servicing agency any information needed to make the justification 
and approval or D&F.
    (2) The requesting agency shall also be responsible for furnishing 
other assistance that may be necessary, such as providing information 
or special contract terms needed to comply with any condition or 
limitation applicable to the funds of the requesting agency.
    (3) The servicing agency is responsible for compliance with all 
other legal or regulatory requirements applicable to the contract, 
including--

[[Page 77737]]

    (i) Having adequate statutory authority for the contractual action; 
and
    (ii) Complying fully with the competition requirements of part 6 
(see 6.002). However, if the servicing agency is not subject to the 
Federal Acquisition Regulation, the requesting agency shall verify that 
contracts utilized to meet its requirements contain provisions 
protecting the Government from inappropriate charges (for example, 
provisions mandated for FAR agencies by part 31), and that adequate 
contract administration will be provided.
    (e) Nonsponsoring Federal agencies may use a Federally Funded 
Research and Development Center (FFRDC) only if the terms of the 
FFRDC's sponsoring agreement permit work from other than a sponsoring 
agency. Work placed with the FFRDC is subject to the acceptance by the 
sponsor and must fall within the purpose, mission, general scope of 
effort, or special competency of the FFRDC. (See 35.017; see also 6.302 
for procedures to follow where using other than full and open 
competition.) The nonsponsoring agency shall provide to the sponsoring 
agency necessary documentation that the requested work would not place 
the FFRDC in direct competition with domestic private industry.


17.504  Reporting requirements.

    The senior procurement executive for each executive agency shall 
submit to the Director of OMB an annual report on interagency 
acquisitions, as directed by OMB.

PART 18--EMERGENCY ACQUISITIONS

0
7. Amend section 18.113 by revising the section heading to read as 
follows:


18.113  Interagency acquisitions.

* * * * *

PART 35--RESEARCH AND DEVELOPMENT CONTRACTING

0
8. Amend section 35.017-3 by revising the second sentence of paragraph 
(b) to read as follows:


35.017-3  Using an FFRDC.

* * * * *
    (b) * * * The nonsponsoring agency is responsible for making the 
determination required by 17.502-2(c) and providing the documentation 
required by 17.503(e). * * *

PART 41--ACQUISITION OF UTILITY SERVICES

0
9. Revise section 41.206 to read as follows:


41.206  Interagency agreements.

    Agencies shall use interagency agreements (e.g., consolidated 
purchase, joint use, or cross-service agreements) when acquiring 
utility service or facilities from other Government agencies and shall 
comply with the policies and procedures at 17.502-2, The Economy Act.

[FR Doc. 2010-30561 Filed 12-10-10; 8:45 am]
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