Federal Register / Vol. 65, No. 80 / Tuesday, April 25, 2000 / Rules and Regulations 24317

officer does not receive any offers of

U.S.-made end products or eligible

products (designated, Caribbean Basin,

or NAFTA country end products).

Item IV—Utilization of Indian

Organizations and Indian-Owned

Economic Enterprises (FAR Case 1999–

301) (99–301)

This final rule amends FAR Subpart

26.1 and the clause at 52.226–1 to delete

DoD-unique requirements relating to

Indian Organizations and Indian-Owned

Economic Enterprises from the FAR.

Item V—Ocean Transportation by U.S.-

Flag Vessels (FAR Case 1998–604) (98–

604)

This final rule amends FAR 47.504

and the clauses at 52.212–5, 52.213–4,

and 52.247–64 to apply the preference

for U.S.-flag vessels to contracts

awarded using simplified acquisition

procedures. This rule only affects

civilian agency contracts that may

involve ocean transportation of supplies

subject to the Cargo Preference Act of

1954.

The rule also adds Alternate I of

52.247–64, Preference for Privately

Owned U.S.-Flag Commercial Vessels,

to the clause at 52.212–5, Contract

Terms and Conditions Required to

Implement Statutes or Executive

Orders—Commercial Items. Alternate I

applies when the supplies furnished

under the contract must be transported

exclusively in privately owned U.S.-flag

vessels.

Item VI—Technical Amendments

These amendments update references

and make editorial changes at sections

6.304, 31.101, 32.411, 32.502–4, 32.805,

42.1204, and 42–1205.

Dated: April 13, 2000.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Federal Acquisition Circular (FAC)

97–17 is issued under the authority of

the Secretary of Defense, the

Administrator of General Services, and

the Administrator for the National

Aeronautics and Space Administration.

All Federal Acquisition Regulation

(FAR) changes and other directive

material contained in FAC 97–17 are

effective April 25, 2000, except for Items

IV and V, which are effective June 26,

2000. Each rule is applicable to

solicitations issued on or after the rule’s

effective date.

Dated: April 5, 2000.

R.D. Kerrins, Jr.,

Acting Director, Defense Procurement.

Dated: April 11, 2000.

Sue McIver,

Acting Deputy Associate Administrator,

Office of Acquisition Policy, General Services

Administration.

Dated: April 3, 2000.

Tom Luedtke,

Associate Administrator for Procurement,

National Aeronautics and Space

Administration.

[FR Doc. 00–10130 Filed 4–24–00; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 2, 16, and 37

[FAC 97–17; FAR Case 1999–014; Item I]

RIN 9000–AI53

Federal Acquisition Regulation;

Competition Under Multiple Award

Contracts

AGENCIES: Department of Defense (DoD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council

(Councils) have agreed on a final rule

amending the Federal Acquisition

Regulation (FAR) to clarify what

contracting officers should consider

when planning for multiple awards of

indefinite-delivery contracts and clarify

how orders should be placed against the

resultant contracts.

DATES: Effective Date: April 25, 2000. Applicability Date: The FAR, as

amended by this rule, is applicable to

solicitations issued on or after April 25,

2000.

FOR FURTHER INFORMATION CONTACT: The

FAR Secretariat, Room 4035, GS

Building, Washington, DC, 20405, (202)

501–4755, for information pertaining to

status or publication schedules. For

clarification of content, contact Mr.

Ralph De Stefano, Procurement Analyst,

at (202) 501–1758. Please cite FAC 97–

17, FAR case 1999–014.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule, FAR case 1999–014,

amends FAR Part 16 to provide

guidance on multiple award task and

delivery order contracts and amends

FAR Part 37 to delete a definition and

amends FAR Part 2 to insert the

definition that was deleted from Part 37.

FAR case 1999–014 is one of two cases

that implement subsections 804(a) and

(b) of the National Defense

Authorization Act for Fiscal Year 2000

(Pub. L. 106–65). The other case, FAR

Case 1999–303, Task Order and Delivery

Order Contracts, has been developed

and promulgation is awaiting final

review and analysis of the Report

Number GAO/NSIAD–00–56, B–281493,

March 20, 2000, recently issued by the

GAO regarding multiple award

contracts. The Councils will evaluate

the GAO report, in conjunction with the

Office of Federal Procurement Policy, to

determine what additional changes are

needed.

FAR case 1999–014—

• Clarifies what contracting officers

should consider when planning for

multiple awards of indefinite-delivery

contracts and clarifies how orders

should be placed against the resultant

contracts;

• Requires that all awardees be given

a fair opportunity to compete on every

task or delivery order placed under

multiple-award contracts, unless a

specific exception applies;

• Emphasizes key things the

contracting officer should consider

when placing orders, including

streamlined procedures; and

• Reorganizes and revises the FAR

text for ease of use.

The rule is written using plain

language in accordance with the White

House memorandum, Plain Language in

Government Writing, dated June 1,

1998.

DoD, GSA, and NASA published a

proposed rule in the Federal Register at

64 FR 70158, December 15, 1999.

Fourteen respondents provided public

comments. We considered twelve public

comments in finalizing the rule. We

received the other two public comments

more than two weeks after the closing

date for comments and after the ad hoc

committee had analyzed public

comments. We did not consider these

comments in the finalization of the rule.

This rule was not subject to Office of

Management and Budget 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

24318 Federal Register / Vol. 65, No. 80 / Tuesday, April 25, 2000 / Rules and Regulations

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 only clarifies what the contracting

officer should consider when planning

for and placing orders under multiple

award contracts.

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. 3501, et

seq.

List of Subjects in 48 CFR Parts 2, 16,

and 37

Government procurement.

Dated: April 13, 2000.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, DoD, GSA, and NASA

amend 48 CFR parts 2, 16, and 37 as set

forth below:

1. The authority citation for 48 CFR

parts 2, 16, and 37 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C.

chapter 137; and 42 U.S.C. 2473(c).

PART 2—DEFINITIONS OF WORDS

AND TERMS

2. Amend section 2.101 by adding, in

alphabetical order, the definition

‘‘Advisory and assistance services’’ to

read as follows:

2.101 Definitions.

* * * * *

Advisory and assistance services

means those services provided under

contract by nongovernmental sources to

support or improve: Organizational

policy development; decision-making;

management and administration;

program and/or project management

and administration; or R&D activities. It

can also mean the furnishing of

professional advice or assistance

rendered to improve the effectiveness of

Federal management processes or

procedures (including those of an

engineering and technical nature). In

rendering the foregoing services,

outputs may take the form of

information, advice, opinions,

alternatives, analyses, evaluations,

recommendations, training and the dayto-day aid of support personnel needed

for the successful performance of

ongoing Federal operations. All

advisory and assistance services are

classified in one of the following

definitional subdivisions:

(1) Management and professional

support services, i.e., contractual

services that provide assistance, advice

or training for the efficient and effective

management and operation of

organizations, activities (including

management and support services for

R&D activities), or systems. These

services are normally closely related to

the basic responsibilities and mission of

the agency originating the requirement

for the acquisition of services by

contract. Included are efforts that

support or contribute to improved

organization of program management,

logistics management, project

monitoring and reporting, data

collection, budgeting, accounting,

performance auditing, and

administrative technical support for

conferences and training programs.

(2) Studies, analyses and evaluations,

i.e., contracted services that provide

organized, analytical assessments/

evaluations in support of policy

development, decision-making,

management, or administration.

Included are studies in support of R&D

activities. Also included are

acquisitions of models, methodologies,

and related software supporting studies,

analyses or evaluations.

(3) Engineering and technical

services, i.e., contractual services used

to support the program office during the

acquisition cycle by providing such

services as systems engineering and

technical direction (see 9.505–1(b)) to

ensure the effective operation and

maintenance of a weapon system or

major system as defined in OMB

Circular No. A–109 or to provide direct

support of a weapon system that is

essential to research, development,

production, operation or maintenance of

the system.

* * * * *

PART 16—TYPES OF CONTRACTS

3. Revise section 16.500 to read as

follows:

16.500 Scope of subpart.

(a) This subpart prescribes policies

and procedures for making awards of

indefinite-delivery contracts and

establishes a preference for making

multiple awards of indefinite-quantity

contracts.

(b) This subpart does not limit the use

of other than competitive procedures

authorized by part 6.

(c) Nothing in this subpart restricts

the authority of the General Services

Administration (GSA) to enter into

schedule, multiple award, or task or

delivery order contracts under any other

provision of law. Therefore, GSA

regulations and the coverage for the

Federal Supply Schedule program in

subpart 8.4 and part 38 take precedence

over this subpart.

(d) The statutory multiple award

preference implemented by this subpart

does not apply to architect-engineer

contracts subject to the procedures in

subpart 36.6. However, agencies are not

precluded from making multiple awards

for architect-engineer services using the

procedures in this subpart, provided the

selection of contractors and placement

of orders are consistent with subpart

36.6.

16.501–1 [Amended]

4. Amend section 16.501–1 by

removing the definition ‘‘Advisory and

assistance services’’.

5. Revise section 16.504 to read as

follows:

16.504 Indefinite-quantity contracts.

(a) Description. An indefinite-quantity

contract provides for an indefinite

quantity, within stated limits, of

supplies or services during a fixed

period. The Government places orders

for individual requirements. Quantity

limits may be stated as number of units

or as dollar values.

(1) The contract must require the

Government to order and the contractor

to furnish at least a stated minimum

quantity of supplies or services. In

addition, if ordered, the contractor must

furnish any additional quantities, not to

exceed the stated maximum. The

contracting officer should establish a

reasonable maximum quantity based on

market research, trends on recent

contracts for similar supplies or

services, survey of potential users, or

any other rational basis.

(2) To ensure that the contract is

binding, the minimum quantity must be

more than a nominal quantity, but it

should not exceed the amount that the

Government is fairly certain to order.

(3) The contract may also specify

maximum or minimum quantities that

the Government may order under each

task or delivery order and the maximum

that it may order during a specific

period of time.

(4) A solicitation and contract for an

indefinite quantity must—

(i) Specify the period of the contract,

including the number of options and the

period for which the Government may

extend the contract under each option;

(ii) Specify the total minimum and

maximum quantity of supplies or

services the Government will acquire

under the contract;

(iii) Include a statement of work,

specifications, or other description, that

reasonably describes the general scope,

Federal Register / Vol. 65, No. 80 / Tuesday, April 25, 2000 / Rules and Regulations 24319

nature, complexity, and purpose of the

supplies or services the Government

will acquire under the contract in a

manner that will enable a prospective

offeror to decide whether to submit an

offer;

(iv) State the procedures that the

Government will use in issuing orders,

including the ordering media, and, if

multiple awards may be made, state the

procedures and selection criteria that

the Government will use to provide

awardees a fair opportunity to be

considered for each order (see

16.505(b)(1));

(v) Include the name, address,

telephone number, facsimile number,

and e-mail address of the agency task

and delivery order ombudsman (see

16.505(b)(5)) if multiple awards may be

made;

(vi) Include a description of the

activities authorized to issue orders; and

(vii) Include authorization for placing

oral orders, if appropriate, provided that

the Government has established

procedures for obligating funds and that

oral orders are confirmed in writing.

(b) Application. Contracting officers

may use an indefinite-quantity contract

when the Government cannot

predetermine, above a specified

minimum, the precise quantities of

supplies or services that the

Government will require during the

contract period, and it is inadvisable for

the Government to commit itself for

more than a minimum quantity. The

contracting officer should use an

indefinite-quantity contract only when a

recurring need is anticipated.

(c) Multiple award preference—(1)

Planning the acquisition. (i) Except for

indefinite-quantity contracts for

advisory and assistance services as

provided in paragraph (c)(2) of this

section, the contracting officer must, to

the maximum extent practicable, give

preference to making multiple awards of

indefinite-quantity contracts under a

single solicitation for the same or

similar supplies or services to two or

more sources.

(ii)(A) The contracting officer must

determine whether multiple awards are

appropriate as part of acquisition

planning. The contracting officer must

avoid situations in which awardees

specialize exclusively in one or a few

areas within the statement of work, thus

creating the likelihood that orders in

those areas will be awarded on a solesource basis; however, each awardee

need not be capable of performing every

requirement as well as any other

awardee under the contracts. The

contracting officer should consider the

following when determining the number

of contracts to be awarded:

(1) The scope and complexity of the

contract requirement.

(2) The expected duration and

frequency of task or delivery orders.

(3) The mix of resources a contractor

must have to perform expected task or

delivery order requirements.

(4) The ability to maintain

competition among the awardees

throughout the contracts’ period of

performance.

(B) The contracting officer must not

use the multiple award approach if—

(1) Only one contractor is capable of

providing performance at the level of

quality required because the supplies or

services are unique or highly

specialized;

(2) Based on the contracting officer’s

knowledge of the market, more

favorable terms and conditions,

including pricing, will be provided if a

single award is made;

(3) The expected cost of

administration of multiple contracts

outweighs the expected benefits of

making multiple awards;

(4) The projected orders are so

integrally related that only a single

contractor can reasonably perform the

work;

(5) The total estimated value of the

contract is less than the simplified

acquisition threshold; or

(6) Multiple awards would not be in

the best interests of the Government.

(C) The contracting officer must

document the decision whether or not

to use multiple awards in the

acquisition plan or contract file. The

contracting officer may determine that a

class of acquisitions is not appropriate

for multiple awards (see subpart 1.7).

(2) Contracts for advisory and

assistance services. (i) Except as

provided in paragraph (c)(2)(ii) of this

section, if an indefinite-quantity

contract for advisory and assistance

services exceeds 3 years and $10

million, including all options, the

contracting officer must make multiple

awards unless—

(A) The contracting officer or other

official designated by the head of the

agency determines in writing, as part of

acquisition planning, that multiple

awards are not practicable. The

contracting officer or other official must

determine that only one contractor can

reasonably perform the work because

either the scope of work is unique or

highly specialized or the tasks so

integrally related;

(B) The contracting officer or other

official designated by the head of the

agency determines in writing, after the

evaluation of offers, that only one

offeror is capable of providing the

services required at the level of quality

required; or

(C) Only one offer is received.

(ii) The requirements of paragraph

(c)(2)(i) of this section do not apply if

the contracting officer or other official

designated by the head of the agency

determines that the advisory and

assistance services are incidental and

not a significant component of the

contract.

6. Revise section 16.505 to read as

follows:

16.505 Ordering.

(a) General. (1) The contracting officer

does not synopsize orders under

indefinite-delivery contracts.

(2) Individual orders must clearly

describe all services to be performed or

supplies to be delivered. Orders must be

within the scope, period, and maximum

value of the contract.

(3) Performance-based work

statements must be used to the

maximum extent practicable, if the

contract is for services (see 37.102(a)).

(4) Orders may be placed by using any

medium specified in the contract.

(5) Orders placed under indefinitedelivery contracts must contain the

following information:

(i) Date of order.

(ii) Contract number and order

number.

(iii) For supplies and services,

contract item number and description,

quantity, and unit price or estimated

cost or fee.

(iv) Delivery or performance schedule.

(v) Place of delivery or performance

(including consignee).

(vi) Any packaging, packing, and

shipping instructions.

(vii) Accounting and appropriation

data.

(viii) Method of payment and

payment office, if not specified in the

contract (see 32.1110(e)).

(6) No protest under subpart 33.1 is

authorized in connection with the

issuance or proposed issuance of an

order under a task-order contract or

delivery-order contract, except for a

protest on the grounds that the order

increases the scope, period, or

maximum value of the contract (10

U.S.C. 2304c(d) and 41 U.S.C. 253j(d)).

(b) Orders under multiple award

contracts—(1) Fair opportunity. (i) The

contracting officer must provide each

awardee a fair opportunity to be

considered for each order exceeding

$2,500 issued under multiple deliveryorder contracts or multiple task-order

contracts, except as provided for in

paragraph (b)(2) of this section.

(ii) The contracting officer may

exercise broad discretion in developing

24320 Federal Register / Vol. 65, No. 80 / Tuesday, April 25, 2000 / Rules and Regulations

appropriate order placement

procedures. The contracting officer

should keep submission requirements to

a minimum. Contracting officers may

use streamlined procedures, including

oral presentations. In addition, the

contracting officer need not contact each

of the multiple awardees under the

contract before selecting an order

awardee if the contracting officer has

information available to ensure that

each awardee is provided a fair

opportunity to be considered for each

order. The competition requirements in

part 6 and the policies in subpart 15.3

do not apply to the ordering process.

However, the contracting officer must—

(A) Develop placement procedures

that will provide each awardee a fair

opportunity to be considered for each

order and that reflect the requirement

and other aspects of the contracting

environment;

(B) Not use any method (such as

allocation or designation of any

preferred awardee) that would not result

in fair consideration being given to all

awardees prior to placing each order;

(C) Tailor the procedures to each

acquisition;

(D) Include the procedures in the

solicitation and the contract; and

(E) Consider price or cost under each

order as one of the factors in the

selection decision.

(iii) The contracting officer should

consider the following when developing

the procedures:

(A)(1) Past performance on earlier

orders under the contract, including

quality, timeliness and cost control.

(2) Potential impact on other orders

placed with the contractor.

(3) Minimum order requirements.

(B) Formal evaluation plans or scoring

of quotes or offers are not required.

(2) Exceptions to the fair opportunity

process. The only exceptions to the

requirement to provide each awardee a

fair opportunity to be considered for

each order exceeding $2,500 are—

(i) The agency need for the supplies

or services is so urgent that providing a

fair opportunity would result in

unacceptable delays;

(ii) Only one awardee is capable of

providing the supplies or services

required at the level of quality required

because the supplies or services ordered

are unique or highly specialized;

(iii) The order must be issued on a

sole-source basis in the interest of

economy and efficiency as a logical

follow-on to an order already issued

under the contract, provided that all

awardees were given a fair opportunity

to be considered for the original order;

or

(iv) It is necessary to place an order

to satisfy a minimum guarantee.

(3) Pricing orders. If the contract did

not establish the price for the supply or

service, the contracting officer must

establish prices for each order using the

policies and methods in subpart 15.4.

(4) Decision documentation for

orders. The contracting officer must

document in the contract file the

rationale for placement and price of

each order.

(5) Task and Delivery Order

Ombudsman. The head of the agency

must designate a task-order contract and

delivery-order contract ombudsman.

The ombudsman must review

complaints from contractors and ensure

they are afforded a fair opportunity to be

considered, consistent with the

procedures in the contract. The

ombudsman must be a senior agency

official who is independent of the

contracting officer and may be the

agency’s competition advocate.

(c) Limitation on ordering period for

task-order contracts for advisory and

assistance services. (1) Except as

provided for in paragraphs (c)(2) and

(c)(3), the ordering period of a task-order

contract for advisory and assistance

services, including all options or

modifications, normally may not exceed

5 years.

(2) The 5-year limitation does not

apply when—

(i) A longer ordering period is

specifically authorized by a statute; or

(ii) The contract is for an acquisition

of supplies or services that includes the

acquisition of advisory and assistance

services and the contracting officer, or

other official designated by the head of

the agency, determines that the advisory

and assistance services are incidental

and not a significant component of the

contract.

(3) The contracting officer may extend

the contract on a sole-source basis only

once for a period not to exceed 6

months if the contracting officer, or

other official designated by the head of

the agency, determines that—

(i) The award of a follow-on contract

is delayed by circumstances that were

not reasonably foreseeable at the time

the initial contract was entered into; and

(ii) The extension is necessary to

ensure continuity of services, pending

the award of the follow-on contract.

7. Amend section 16.506—

a. In paragraphs (a), (b), (c), (d)(1), and

(e) by removing the words ‘‘The

contracting officer shall insert’’ and

adding, in their place, the word

‘‘Insert’’;

b. In paragraphs (d)(2), (d)(3), and

(d)(4) by removing the words ‘‘the

contracting officer shall’’; and

c. By revising paragraphs (d)(5), (f),

and (g) to read as follows:

16.506 Solicitation provisions and

contract clauses.

* * * * *

(d) * * *

(5) If the contract—

(i) Includes subsistence for

Government use and resale in the same

schedule and similar products may be

acquired on a brand-name basis; and

(ii) Involves a partial small business

set-aside, use the clause with its

Alternate IV.

* * * * *

(f) Insert the provision at 52.216–27,

Single or Multiple Awards, in

solicitations for indefinite-quantity

contracts that may result in multiple

contract awards. Modify the provision

to specify the estimated number of

awards. Do not use this provision for

advisory and assistance services

contracts that exceed 3 years and $10

million (including all options).

(g) Insert the provision at 52.216–28,

Multiple Awards for Advisory and

Assistance Services, in solicitations for

task-order contracts for advisory and

assistance services that exceed 3 years

and $10 million (including all options),

unless a determination has been made

under 16.504(c)(2)(i)(A). Modify the

provision to specify the estimated

number of awards.

PART 37—SERVICE CONTRACTING

37.201 Definition.

8. Amend section 37.201 by revising

the section heading to read as set forth

above, and by removing the definition

‘‘Advisory and assistance services’’.

[FR Doc. 00–10131 Filed 4–24–00; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 12, 13, and 15

[FAC 97–17; FAR Case 1998–300 (98–300);

Item II]

RIN 9000–AI45

Federal Acquisition Regulation;

Determination of Price

Reasonableness and Commerciality

AGENCIES: Department of Defense (DoD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Final rule.