[Federal Register Volume 74, Number 197 (Wednesday, October 14, 2009)]
[Rules and Regulations]
[Pages 52849-52851]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-24565]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 6

[FAC 2005-37; FAR Case 2007-008; Item II; Docket 2007-0001, Sequence 
14]
RIN 9000-AK90


Federal Acquisition Regulation; FAR Case 2007-008, Limiting 
Length of Noncompetitive Contracts in ``Unusual and Compelling 
Urgency'' Circumstances

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

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are issuing a final rule 
amending the Federal Acquisition Regulation (FAR) to implement section 
862 of the Duncan Hunter National Defense Authorization Act for Fiscal 
Year 2009 (Pub. L. 110-417) and Office of Federal Procurement Policy 
(OFPP)

[[Page 52850]]

Administrator's memorandum of May 31, 2007. The rule limits the length 
of contracts awarded noncompetitively under unusual and compelling 
urgency circumstances to the minimum contract period necessary to meet 
the requirements, and no longer than one year, unless the head of the 
agency determines that exceptional circumstances apply.

DATES: Effective Date: October 14, 2009.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Mr. Ernest Woodson, Procurement Analyst, at (202) 501-3775. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-37, FAR 
case 2007-008.

SUPPLEMENTARY INFORMATION:

A. Background

    The Office of Federal Procurement Policy (OFPP) Administrator's 
memorandum of May 31, 2007, issued to Chief Acquisition Officers and 
Senior Procurement Executives, proposed several initiatives, including 
promoting competition in Federal acquisition, challenging any barriers 
to such competition, and reinvigorating the role of the competition 
advocate. Subsequent to issuance of the memorandum, OFPP submitted 
multiple business cases proposing FAR changes to strengthen Federal 
acquisition competition policies. These were established as individual 
FAR cases. This FAR case specifically addresses the OFPP initiative to 
limit the length of contracts awarded noncompetitively under the 
authorities for unusual and compelling urgency. DoD, GSA, and NASA 
published a proposed rule in the Federal Register at 73 FR 5784, 
January 31, 2008. The 60-day comment period for the proposed rule ended 
March 31, 2008. Two respondents provided comments for a total of eight 
comments.
    In October 2008 the Duncan Hunter National Defense Authorization 
Act for Fiscal Year 2009, Pub. L. 110-417, was enacted. Section 862 of 
this Act amended section 303(d) of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 253(d) and 10 U.S.C 
2304(d)) to require that contracts awarded under the authority of 41 
U.S.C 252(c)(2) and 10 U.S.C. 2304(c) (FAR 6.302-2, Unusual and 
compelling urgency), (1) may not exceed the time necessary to meet the 
unusual and compelling requirements, may not exceed the time for the 
agency to enter into another contract for the required goods and 
services through the use of competitive procedures, and may not exceed 
one year unless the head of the agency entering into the contract 
determines that exceptional circumstances apply; and (2) that the 
requirements in (1) of this paragraph apply to any contract in amount 
greater than the simplified acquisition threshold.
    The public comments and requirements of the Act were considered by 
the Councils in the formation of this final rule.
    Comment 1: One respondent recommended that the Councils should 
shorten the contract term to not exceed six months in lieu of the 
stated ``no longer than one year.''
    Response: Non-concur. The time period is required by statute.
    Comment 2 and 3: One respondent stated that the term ``head of the 
contracting activity'' requires clarification. The respondent urges the 
rule refer to the definition for the ``head of the contracting 
activity'' by including FAR subpart 2.101 in FAR 6.302-2(d). Another 
respondent suggested that the rule specifically state whether or not 
the head of the contracting activity's authority to approve a period of 
performance longer that one year is delegable.
    Response: Non-concur. The National Defense Authorization Act 
requires that the head of the agency make the determination required by 
FAR 6.302-2(d). ``Head of the agency'' is defined in FAR subpart 2.101 
and does not require defining in FAR 6.302-2(d).
    The rule is silent on whether the authority may be delegated. 
However, FAR 1.108(b) provides that each authority is delegable unless 
specifically stated otherwise.
    Comment 4: Both respondents asked whether the approval process will 
be governed by FAR 6.304, which requires approval by other government 
officials depending on the monetary value of the proposed contract? The 
respondents urged that the process be simplified and duplication of 
paperwork reduced to prevent the filing of multiple justifications and 
approvals.
    Response: The approval process in 6.302-2(d)(2) for the exceptional 
circumstances determination is not governed by FAR 6.304. The approval 
levels are different. The requirement for determining exceptional 
circumstances apply is separate from the approval process at FAR 6.304. 
The rule requires the determination be obtained prior to the award of 
the contract; or may be obtained after award when making the 
determination prior to award would unnecessarily delay the acquisition.
    Comment 5: The authority of FAR 6.302-2(c)(1) currently allows 
urgent and compelling justifications to be ``made and approved'' after 
contract award. A respondent suggested that the new FAR citation 6.302-
2(d) be added to the 6.303 and 6.304 currently referenced in FAR 6.302-
2(c)(1) to make it clear that this can still be done.
    Response: Non-Concur. As stated in the prior response, the approval 
process is not governed by FAR 6.303 or FAR 6.304. The requirement for 
making the determination for a performance period greater than one 
year, by the head of the agency, for noncompetitive contracts in 
unusual urgency and compelling circumstances, is separate from the 
approval process at FAR 6.304. The rule provides for the determination 
for a performance period greater than one year to be obtained after 
contract award when making the determination prior to award would 
unreasonably delay the acquisition.
     Comment 6: One respondent urged that there be discussion added on 
the public availability of approval records filed by the head of the 
contracting activity.
    Response: Non-concur. FAR Case 2008-003, Public Disclosure of 
Justification and Approval Documents for Noncompetitive Contracts-
Section 844 of the National Defense Authorization Act for Fiscal Year 
2008 (74 CFR 2731, January 15, 2009), requires the public disclosure of 
justification and approval documents for noncompetitive contracts which 
is a statutory requirement by 10 U.S.C. 2304 and 41 U.S.C. 253.
    Comment 7: One respondent requested consideration of the impacts of 
subsequent changes to the contract awarded under the new rule (e.g., an 
amendment, a modification, or a follow-on contract) to the one-year 
contract award restriction.
    Response: Non-concur. This rule does not make changes to the 
existing regulations regarding use of non-competitive awards. The 
contracting activity must still comply with the justification 
requirements at FAR subpart 6.3 when awarding an out-of-scope 
modification to a contract, or a follow-on contract.
    Comment 8: Consider a standing exception for certain multiple year 
non-severable services (e.g., a major acquisition that requires a 
period of performance greater than one year in order to develop or 
manufacture an end product).
    Response: Non-concur. The rule provides for any exception to the 
one-year limit by having the head of the agency make the determination 
for the longer performance contract period.
    This is not a significant regulatory action and, therefore, was not 
subject to

[[Page 52851]]

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 Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not 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 addresses 
internal agency procedures and will benefit small entities by 
encouraging competition after a one year performance period, except 
when a longer performance period is properly approved. Therefore, a 
Final Regulatory Flexibility Analysis has not been performed.

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.

List of Subjects in 48 CFR Part 6

    Government procurement.

    Dated: October 5, 2009.
Al Matera,
Director, Acquisition Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR part 6 as set forth below:

PART 6--COMPETITION REQUIREMENTS

0
1. The authority citation for 48 CFR part 6 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).


0
2. Amend section 6.302-2 by adding paragraph (d) to read as follows:


6.302-2  Unusual and compelling urgency.

* * * * *
    (d) Period of Performance. The total period of performance of a 
contract awarded using this authority--
    (1) May not exceed the time necessary:
    (i) To meet the unusual and compelling requirements of the work to 
be performed under the contract; and
    (ii) For the agency to enter into another contract for the required 
goods and services through the use of competitive procedures.
    (2) May not exceed one year unless the head of the agency entering 
into the contract determines that exceptional circumstances apply.
    (3) The requirements in paragraphs (1) and (2) of this section 
shall apply to any contract in an amount greater than the simplified 
acquisition threshold.
    (4) The determination of exceptional circumstances is in addition 
to the approval of the justification in 6.304.
    (5) The determination may be made after contract award when making 
the determination prior to award would unreasonably delay the 
acquisition.

[FR Doc. E9-24565 Filed 10-13-09; 8:45 am]
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