Federal Register / Vol. 65, No. 109 / Tuesday, June 6, 2000 / Rules and Regulations 36023

Document Retention period

(iii) Related

records or documents, including successful

proposals, except for contractor’s payrolls (see

(b)(4)(iv)).

Same as contract file.

(iv) Contractor’s

payrolls submitted in accordance with

Department of

Labor regulations, with related certifications, antikickback affidavits, and other

related papers.

3 years after contract

completion unless

contract performance is the subject

of an enforcement

action on that date.

(5) Solicited and unsolicited unsuccessful offers,

quotations, bids,

and proposals:

(i) Relating to

contracts

above the simplified acquisition threshold.

If filed separately

from contract file,

until contract is

completed. Otherwise, the same as

related contract file.

(ii) Relating to

contracts at or

below the simplified acquisition threshold.

1 year after date of

award or until final

payment, whichever is later.

(6) Files for canceled

solicitations.

5 years after cancellation.

(7) Other copies of

procurement file

records used by

component elements of a contracting office for

administrative purposes.

Upon termination or

completion.

(8) Documents pertaining generally to

the contractor as

described at

4.801(c)(3).

Until superseded or

obsolete.

(9) Data submitted to

the Federal Procurement Data System (FPDS). Electronic data file

maintained by fiscal

year, containing unclassified records of

all procurements

other than simplified acquisitions,

and information required under 4.601.

5 years after submittal to FPDS.

Document Retention period

(10) Investigations,

cases pending or in

litigation (including

protests), or similar

matters.

Until final clearance

or settlement, or, if

related to a document identified in

(b)(1)–(9), for the

retention period

specified for the related document,

whichever is later.

[FR Doc. 00–13820 Filed 6–1–00; 4:00 pm]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 8 and 38

[FAC 97–18; FAR Case 1998–609 (98–609);

Item V]

RIN 9000–AI48

Federal Acquisition Regulation;

Federal Supply Schedules Small

Business Opportunities

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 enhance the

participation of small business concerns

under the Federal Supply Schedules

(FSS) program.

DATES: Effective Date: August 7, 2000.

Applicability Date: The FAR, as

amended by this rule, is applicable to

solicitations issued on or after August 7,

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 Ms.

Linda Nelson, Procurement Analyst, at

(202) 501–1900. Please cite FAC 97–18,

FAR case 1998–609.

SUPPLEMENTARY INFORMATION:

A. Background

The rule—

• Amends FAR subpart 8.4 to

encourage ordering offices to consider

the availability of small business

concerns under the schedule and

encourages ordering offices to consider

small businesses when conducting

evaluations before placing an order;

• Amends FAR Part 38 to reaffirm

that the General Services

Administration and agencies delegated

the authority to establish a Federal

Supply Schedule must comply with all

statutory and regulatory requirements

before a solicitation is issued; and

• Revises the FSS guidance in

accordance with the plain language

guidelines in a White House

memorandum, Plain Language in

Government Writing, dated June 1,

1998.

DoD, GSA, and NASA published a

proposed rule in the Federal Register on

September 14, 1999 (64 FR 49948).

Thirty-two respondents submitted

public comments. We considered all

comments and converted the proposed

rule to a final rule with minor changes.

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 Councils prepared a Final

Regulatory Flexibility Analysis (FRFA)

consistent with 5 U.S.C. 604. Because

this rule may impact small businesses,

we are providing the FRFA in its

entirety as follows:

This Final Regulatory Flexibility Analysis

has been prepared consistent with the criteria

stated in 5 U.S.C. 604.

1. Statement of need for, and objectives of,

the rule.

The purpose of this rule is to promote the

growth of Federal procurement sales

opportunities for small business concerns

under the Federal Supply Schedules. The

rule amends FAR Subparts 8.4 and 38.1 to

encourage ordering offices to consider small

business concerns, if available, when

conducting evaluations before placing an

order. The rule also recognizes the recent

change made by the Small Business

Administration requiring inclusion of

Federal Supply Schedule orders in agencies’

small business goals. Effective fiscal year

1999, agencies must include the dollar value

of orders expected to be placed against the

General Services Administration’s (GSA)

Federal Supply Service (FSS) Schedules and

report accomplishments against those goals.

2. Summary of significant issues raised by

the public comments in response to the

Initial Regulatory Flexibility Analysis (IRFA),

a summary of the assessment of the agency

of such issues, and a statement of any

changes made in the proposed rule as a

result of such comments.

We received one public comment that

specifically addressed the Initial Regulatory

Flexibility Analysis. The public comment

expressed concerns that the data presented

36024 Federal Register / Vol. 65, No. 109 / Tuesday, June 6, 2000 / Rules and Regulations

did not adequately detail the impact the rule

will have on small business concerns.

Specifically, the respondent stated that

although well represented in the Federal

Supply Schedule program, small Federal

Supply Schedule contractors cannot

adequately compete with large Federal

Supply Schedule contractors. In response, it

is important to note that while sales under

the program have increased to large

businesses, sales to small businesses have

increased as well. The Federal Supply

Schedule program recognizes that in certain

instances small business may not have the

capability to meet some requirements of

Federal agencies. However, the program

permits schedule contractors to team with

other schedule contractors to provide a

solution to meet agency needs. A team can

be any combination of large and small

businesses. Therefore, small businesses can

compete against large businesses by forming

teams that can provide supplies and services

tailored to address agency needs. The Federal

Supply Schedules program is one of the most

successful Government procurement

programs; a program where small businesses

can experience continuous growth.

We did not change the rule as a result of

the comment. The rule encourages ordering

offices to consider the availability of small

business concerns under the schedule when

conducting evaluations before placing an

order. The preference for awarding an order

to a small business ‘‘when two or more items

at the same delivered price’’ will continue to

apply. This final rule is intended to be

beneficial by expanding small business

consideration under Federal Supply

Schedule orders.

3. Description of, and an estimate of the

number of, small entities to which the rule

will apply or an explanation of why no such

estimate is available.

This rule will apply to all small business

concerns under the Federal Supply

Schedules program. Although the rule

pertains to internal Government procedures,

it is intended to increase the number of

orders for supplies and services placed by the

Government with small business concerns.

Based on ‘‘Small Business ’Vital Statistics’’’

found on SBA’s homepage (www.sba.gov/

aboutsba/), SBA estimated that there are

approximately 23 million small businesses in

the United States that provide 47 percent of

all sales in the country. Clearly, not all of the

businesses that are considered small seek to

participate in the Federal Supply Schedules

program. However, according to fiscal year

1999 statistical data maintained by GSA’s

Federal Supply Service, small business

concerns hold 5,705 national scope schedule

contracts out of a total population of 7,431

national scope schedule contracts. Thus,

approximately 77 percent of the schedule

contractors are small business concerns. In

fiscal year 1999, small business schedule

contractors received approximately $3.2

billion or 31 percent of total schedule sales.

This exceeds the current Governmentwide

small business goal. During fiscal year 1998,

4,900 small businesses held contracts out of

a total of 7,000 national scope schedule

contracts. Small business sales in 1998 were

$2.5 billion or 33 percent of total schedule

sales. Between fiscal year 1998 and fiscal

year 1999, the number of small businesses

holding FSS contracts increased 6 percent

and small business sales increased 28

percent. The increased sales to small

businesses total almost 3⁄4 of a billion dollars.

SBA reports that in 1998 the small business

share of all Federal prime contract dollars

dropped to 20.6 percent. Clearly, small

businesses are receiving a greater market

share under the schedules.

The General Services Administration

(GSA) has radically restructured the

schedules program over the past 4 years. GSA

has streamlined both contracting and

ordering processes for industry and for

Government users of the program. The

changes made to the program over the last 4

years provide small business vendors easy

access to the Federal community and provide

users with streamlined procedures. The procedures give small business contractors the

opportunity to fairly compete within the

broader universe of schedule contractors.

These changes ensure that ordering activities

have the broad discretion, and effective and

flexible business solutions, to meet agency

requirements. The rule also supports

continued increases in small business sales.

4. Description of the projected reporting,

recordkeeping, and other compliance

requirements of the rule, including an

estimate of the classes of small entities which

will be subject to the requirement and the

type of professional skills necessary for

preparation of the report or record.

There are no projected reporting,

recordkeeping, or other compliance

requirements.

5. Description of the steps the agency has

taken to minimize the significant economic

impact on small entities consistent with the

stated objectives of applicable statutes,

including a statement of the factual, policy,

and legal reasons for selecting the alternative

adopted in the final rule and why each one

of the other significant alternatives to the rule

considered by the agency which affect the

impact on small entities was rejected.

We considered various alternative

approaches, as well as the adverse and

beneficial impacts upon large businesses,

small business, and the Government. One

alternative that we considered was to apply

small business set-asides to the FSS ordering

process, including mandatory application of

the rule of two for orders at certain dollar

thresholds. Another alternative we

considered was to allow agencies, at their

discretion, to limit consideration of schedule

orders to small business concerns. A third

alternative we considered was to set-aside a

significant number of Federal Supply

Schedules for small businesses by applying

the rule of two. However, contracting officers

under the FSS program already issue

solicitations that comply with the requirements of FAR Parts 5, 6, and 19.

Determinations regarding small business setasides are made during acquisition planning

and solicitation preparation. All schedule

solicitations must be reviewed by the Small

Business Administration Procurement Center

Representative (PCR) before issuance. For the

reasons provided, we considered these

alternatives inappropriate for adoption.

We determined that the alternatives offered

by respondents to the proposed rule would

be detrimental to the effectiveness and

flexibility of the schedules program. We are

converting the proposed rule to a final rule

because it enhances the participation of small

business in the Federal Supply Schedules

program and provides a mechanism to

increase the sales to small business under the

FSS program.

The rule encourages ordering offices to

consider the availability of small business

concerns under the schedule and when

conducting evaluations before placing an

order. We expect sales to small businesses

under the Federal Supply Schedules to

increase because agencies are encouraged to

include small business when conducting

evaluations for an order and because agencies

may credit small business schedule orders

towards agency small business goals. The

rule also ensures that all sectors of the

economy may participate in the Federal

Supply Schedules program. After we publish

the final rule, we will track sales to verify if

this rule has a positive impact on small

business.

The FAR Secretariat has submitted a copy

of the FRFA to the Chief Counsel for

Advocacy of the Small Business

Administration.

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.

3501, et seq.

List of Subjects in 48 CFR parts 8 and

38

Government procurement.

Dated: May 26, 2000.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, DoD, GSA, and NASA

amend 48 CFR parts 8 and 38 as set

forth below:

1. The authority citation for 48 CFR

parts 8 and 38 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 8—REQUIRED SOURCES OF

SUPPLIES AND SERVICES

2. Revise section 8.402 to read as

follows:

8.402 Applicability.

Procedures in this subpart apply to

orders placed against Federal Supply

Schedules. Occasionally, GSA may

establish special ordering procedures.

The affected Federal Supply Schedules

will outline these procedures.

3. In section 8.404—

a. Revise paragraph (a);

Federal Register / Vol. 65, No. 109 / Tuesday, June 6, 2000 / Rules and Regulations 36025

b. Remove from paragraph (b)(1)

‘‘Ordering Offices can place’’ and add

‘‘Place’’ in its place; c. Revise the introductory text of

paragraph (b)(2); d. Revise paragraph (b)(2)(i);

e. Remove from the last sentence of

the introductory text of paragraph (b)(3)

‘‘, ordering offices shall’’; f. Revise paragraph (b)(3)(i);

g. Revise the first sentence in

paragraph (b)(3)(iii); and h. Revise paragraphs (b)(4), (b)(5), and

(b)(6) to read as follows:

8.404 Using schedules.

(a) General. Parts 13 and 19 do not

apply to orders placed against Federal

Supply Schedules, except for the

provision at 13.303–2(c)(3). Orders

placed against a Multiple Award

Schedule (MAS), using the procedures

in this subpart, are considered to be

issued using full and open competition

(see 6.102(d)(3)). Therefore, ordering

offices need not seek further

competition, synopsize the requirement,

make a separate determination of fair

and reasonable pricing, or consider

small business programs. GSA has

already determined the prices of items

under schedule contracts to be fair and

reasonable. By placing an order against

a schedule using the procedures in this

section, the ordering office has

concluded that the order represents the

best value and results in the lowest

overall cost alternative (considering

price, special features, administrative

costs, etc.) to meet the Government’s

needs.

(b) * * *

(2) Orders exceeding the micropurchase threshold but not exceeding

the maximum order threshold. Place

orders with the schedule contractor that

can provide the supply or service that

represents the best value. Before placing

an order, consider reasonably available

information about the supply or service

offered under MAS contracts by using

the ‘‘GSA Advantage!’’ on-line shopping

service, or by reviewing the catalogs or

pricelists of at least three schedule

contractors (see 8.404(b)(6)). Select the

delivery and other options available

under the schedule that meet the

agency’s needs. When selecting the

supply or service representing the best

value, the ordering office may

consider—

(i) Special features of the supply or

service required for effective program

performance;

* * * * *

(3) * * *

(i) Review additional schedule

contractors’ catalogs or pricelists, or use

the ‘‘GSA Advantage!’’ on-line shopping

service;

* * * * *

(iii) After seeking price reductions,

place the order with the schedule

contractor that provides the best value

and results in the lowest overall cost

alternative (see 8.404(a)). * * *

(4) Blanket purchase agreements

(BPAs). Agencies may establish BPAs

(see 13.303–2(c)(3)) when following the

ordering procedures in this subpart. All

schedule contracts contain BPA

provisions. Ordering offices may use

BPAs to establish accounts with

contractors to fill recurring

requirements. BPAs should address

ordering frequency, invoicing,

discounts, and delivery locations and

times.

(5) Price reductions. In addition to the

circumstances in paragraph (b)(3) of this

section, there may be other reasons to

request a price reduction. For example,

seek a price reduction when the supply

or service is available elsewhere at a

lower price or when establishing a BPA

to fill recurring requirements. The

potential volume of orders under BPAs,

regardless of the size of the individual

order, offer the opportunity to secure

greater discounts. Schedule contractors

are not required to pass on to all

schedule users a price reduction

extended only to an individual agency

for a specific order. (6) Small business. When conducting

evaluations and before placing an order,

consider including, if available, one or

more small, women-owned small, and/

or small disadvantaged business

schedule contractor(s). Orders placed

against the schedules may be credited

toward the ordering agency’s small

business goals. For orders exceeding the

micro-purchase threshold, ordering

offices should give preference to the

items of small business concerns when

two or more items at the same delivered

price will satisfy the requirement.

* * * * *

PART 38—FEDERAL SUPPLY

SCHEDULE CONTRACTING

4. Revise section 38.101 to read as

follows:

38.101 General.

(a) The Federal Supply Schedule

program, pursuant to 41 U.S.C.

259(b)(3)(A), provides Federal agencies

with a simplified process of acquiring

commonly used supplies and services in

varying quantities while obtaining

volume discounts. Indefinite-delivery

contracts (including requirements

contracts) are awarded using

competitive procedures to commercial

firms. The firms provide supplies and

services at stated prices for given

periods of time, for delivery within a

stated geographic area such as the 48

contiguous states, the District of

Columbia, Alaska, Hawaii, and overseas.

The schedule contracting office issues

Federal Supply Schedules that contain

information needed for placing orders.

(b) Each schedule identifies agencies

that are required to use the contracts as

primary sources of supply.

(c) Federal agencies not identified in

the schedules as mandatory users may

issue orders under the schedules.

Contractors are encouraged to accept the

orders.

(d) Although GSA awards most

Federal Supply Schedule contracts, it

may authorize other agencies to award

schedule contracts and publish

schedules. For example, the Department

of Veterans Affairs awards schedule

contracts for certain medical and

nonperishable subsistence items.

(e) When establishing Federal Supply

Schedules, GSA, or an agency delegated

that authority, is responsible for

complying with all applicable statutory

and regulatory requirements (e.g., Parts

5, 6, and 19). The requirements of Parts

5, 6, and 19 apply at the acquisition

planning stage prior to issuing the

schedule solicitation and do not apply

to orders and BPAs placed under

resulting schedule contracts (see 8.404).

[FR Doc. 00–13821 Filed 6–1–00; 4:00 pm]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 97–18; FAR Case 2000–004; Item VI]

RIN 9000–AI78

Federal Acquisition Regulation; Trade

Agreements Thresholds

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 implement new

dollar thresholds for application of the

Trade Agreements Act (TAA) and North

American Free Trade Agreement