Federal Register / Vol. 62, No. 51 / Monday, March 17, 1997 / Rules and Regulations 12693

14.304–1 General.

* * * * *

(a) * * *

(4) It was transmitted through an

electronic commerce method authorized

by the solicitation and was received at

the initial point of entry to the

Government infrastructure not later than

5:00 p.m. one working day prior to the

date specified for receipt of bids.

* * * * *

PART 15—CONTRACTING BY

NEGOTIATION

5. Section 15.410 is amended by

revising the second and third sentences

of paragraph (b) to read as follows:

15.410 Amendment of solicitations before

closing date.

* * * * *

(b) * * * If the time available before

closing is insufficient, prospective

offerors or quoters shall be notified by

electronic data interchange, facsimile

transmission, telegram, or telephone of

an extension of the closing date.

Telephonic, facsimile, and telegraphic

notices shall be confirmed in the written

amendment to the solicitation. * * *

* * * * *

PART 52—SOLICITATION PROVISIONS

AND CONTRACT CLAUSES

6. Section 52.214–7 is amended by

revising the provision date, and

paragraph (a)(4) to read as follows:

52.214–7 Late Submissions, Modifications,

and Withdrawals of Bids.

* * * * *

Late Submissions, Modifications, and

Withdrawals of Bids (May 1997)

(a) * * *

(4) Was transmitted through an electronic

commerce method authorized by the

solicitation and was received at the initial

point of entry to the Government

infrastructure not later than 5:00 p.m. one

working day prior to the date specified for

receipt of bids.

* * * * *

7. Section 52.214–23 is amended by

revising the provision date, and

paragraph (a)(4) to read as follows:

52.214–23 Late Submissions,

Modifications, and Withdrawals of

Technical Proposals under Two-Step

Sealed Bidding.

* * * * *

Late Submissions, Modfications, and

Withdrawals of Technical Proposals Under

Two-Step Sealed Bidding (MAY 1997)

(a) * * *

(4) Was transmitted through an electronic

commerce method authorized by the

solicitation and was received at the initial

point of entry to the Government

infrastructure not later than 5:00 p.m. one

working day prior to the date specified for

receipt of technical proposals; or

* * * * *

8. Section 52.214–32 is amended by

revising the date of the provision, and

paragraph (a)(2) to read as follows:

52.214–32 Late Submissions,

Modifications, and Withdrawals of Bids

(Overseas).

* * * * *

Late Submissions, Modifications, and

Withdrawals of Bids (Overseas) (May 1997)

(a) * * *

(2) Was transmitted through an electronic

commerce method authorized by the

solicitation and was received at the initial

point of entry to the Government

infrastructure not later than 5:00 p.m. one

working day prior to the date specified for

receipt of bids. The term ‘‘working day’’

excludes weekends and U.S. Federal

holidays.

* * * * *

9. Section 52.214–33 is amended by

revising the clause date, and paragraph

(a)(2) to read as follows:

52.214–33 Late Submissions,

Modifications, and Withdrawals of

Technical Proposals Under Two-Step

Sealed Bidding (Overseas).

* * * * *

Late Submissions, Modifications, and

Withdrawals of Technical Proposals Under

Two-Step Sealed Bidding (May 1997)

(a) * * *

(2) Was transmitted through an electronic

commerce method authorized by the

solicitation and was received at the initial

point of entry to the Government

infrastructure not later than 5:00 p.m. one

working day prior to the date specified for

receipt of technical proposals. The term

‘‘working day’’ excludes weekends and U.S.

Federal holidays; or

* * * * *

10. Section 52.215–10 is amended by

revising the provision date and

paragraph (a)(4) to read as follows:

52.215–10 Late Submissions,

Modifications, and Withdrawals of

Proposals.

* * * * *

Late Submissions, Modifications, and

Withdrawals of Proposals (May 1997)

(a) * * *

(4) It was transmitted through an electronic

commerce method authorized by the

solicitation and was received at the initial

point of entry to the Government

infrastructure not later than 5:00 p.m. one

working day prior to the date specified for

receipt of proposals;

* * * * *

11. Section 52.215–15 is revised to

read as follows:

52.215–15 Failure to Submit Offer.

As prescribed in 15.407(d)(3), insert

the following provision:

Failure to Submit Offer (May 1997)

Recipients of this solicitation not

responding with an offer should not return

this solicitation, unless it specifies otherwise.

Instead, for paper transactions, they should

advise the issuing office by letter, postcard,

or established electronic commerce methods,

whether they want to receive future

solicitations for similar requirements.

Electronic solicitations do not require

notification of desire to receive future

solicitations, since these solicitations will be

openly available to any interested party. If a

recipient does not submit an offer and does

not notify the issuing office that future

solicitations are desired, the recipient’s name

may be removed from the applicable mailing

list.

(End of provision)

12. Section 52.215–36 is amended by

revising the provision date and

paragraph (a)(2) to read as follows:

52.215–36 Late Submissions,

Modifications, and Withdrawals of

Proposals (Overseas).

* * * * *

Late Submissions, Modifications, and

Withdrawals of Proposals (OVERSEAS)

(MAY 1997)

(a) * * *

(2) It was transmitted through an electronic

commerce method authorized by the

solicitation and was received at the initial

point of entry to the Government

infrastructure not later than 5:00 p.m. one

working day prior to the date specified for

receipt of proposals. The term ‘‘working day’’

excludes weekends and U.S. Federal

holidays;

* * * * *

[FR Doc. 97–6311 Filed 3–14–97; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 9, 35, and 37

[FAC 90–46; FAR Case 94–008; Item III]

RIN 9000–AG86

Federal Acquisition Regulation; Office

of Federal Procurement Policy Letter

93–1, Management Oversight of

Service Contracting

AGENCIES: Department of Defense (DOD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Final rule.
12694 Federal Register / Vol. 62, No. 51 / Monday, March 17, 1997 / Rules and Regulations

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council have

agreed on a final rule amending the

Federal Acquisition Regulation (FAR) to

provide agency guidance on the

management of service contracts. This

regulatory action was not subject to

Office of Management and Budget

review under Executive Order 12866,

dated September 30, 1993. This is not a

major rule under 5 U.S.C. 804.

DATES: Effective May 16, 1997.

FOR FURTHER INFORMATION CONTACT: Mr.

Jack O’Neill at (202) 501–3856 in

reference to this FAR case. For general

information, contact the FAR

Secretariat, Room 4037, GS Building,

Washington, DC 20405 (202) 501–4755.

Please cite FAC 90–46, FAR case 94–

008.

SUPPLEMENTARY INFORMATION:

A. Background

On May 24, 1994, the Office of

Federal Procurement Policy (OFPP)

reissued, as a final policy letter, and

published in the Federal Register at 59

FR 26818, Policy Letter 93–1,

Management Oversight of Service

Contracting. The policy letter provides

Governmentwide guiding principles

which are intended to improve the

acquisition, management, and

administration of service contracts.

A proposed rule was published in the

Federal Register at 61 FR 14946, April

3, 1996, to address FAR implementation

of OFPP Policy Letter 93–1. Two

sources submitted comments in

response to the proposed rule. All

comments were considered in the

development of the final rule.

B. Regulatory Flexibility Act

A Final Regulatory Flexibility

Analysis (FRFA) has been performed

and will be provided to the Chief

Counsel for Advocacy of the Small

Business Administration. A copy of the

FRFA may be obtained from the FAR

Secretariat. The analysis is summarized

as follows:

There were no public comments in

response to the Initial Regulatory Flexibility

Analysis. There were approximately 16,662

small businesses with service contracts

valued at $25,000 or more in fiscal year 1996.

The rule does not impose any reporting,

recordkeeping, or other compliance

requirements upon small entities. This rule is

expected to have a beneficial impact on small

and large entities because the rule

emphasizes the need for good Government

management practices. Although this rule

does not specifically propose different

procedures for small versus large entities, it

should reduce the economic and

administrative burden on small entities.

Consistent with the stated objectives of OFPP

Policy Letter 93–1, routine services,

frequently provided by small entities, will

require less oversight than services that tend

to affect Government decision-making,

influence policy development, or affect

program management, which are more

susceptible to abuse and require a greater

level of scrutiny.

C. Paperwork Reduction Act

The Paperwork Reduction Act does

not apply because the changes to the

FAR do not impose recordkeeping or

information collection requirements, or

collections of information from offerors,

contractors, or members of the public

which 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 9, 35,

and 37

Government procurement.

Dated: March 7, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 9, 35, and 37

are amended as set forth below:

1. The authority citation for 48 CFR

Parts 9, 35, 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 9—CONTRACTOR

QUALIFICATIONS

2. Section 9.505–3 is revised to read

as follows:

9.505–3 Providing evaluation services.

Contracts for the evaluation of offers

for products or services shall not be

awarded to a contractor that will

evaluate its own offers for products or

services, or those of a competitor,

without proper safeguards to ensure

objectivity to protect the Government’s

interests.

PART 35—RESEARCH AND

DEVELOPMENT CONTRACTING

3. Section 35.017–2 is amended by

revising paragraph (i) to read as follows:

35.017–2 Establishing or changing an

FFRDC.

* * * * *

(i) Quantity production or

manufacturing is not performed unless

authorized by legislation.

* * * * *

PART 37—SERVICE CONTRACTING

4. Section 37.000 is revised to read as

follows:

37.000 Scope of part.

This part prescribes policy and

procedures that are specific to the

acquisition and management of services

by contract. This part applies to all

contracts for services regardless of the

type of contract or kind of service being

acquired. Additional guidance for

research and development services is in

part 35; architect-engineering services is

in part 36; information technology is in

part 39; and transportation services is in

part 47. Parts 35, 36, 39, and 47 take

precedence over this part in the event of

inconsistencies. This part includes, but

is not limited to, contracts for services

to which the Service Contract Act of

1965, as amended, applies (see subpart

22.10).

5. Section 37.102 is amended by

adding paragraphs (d) through (g) to

read as follows:

37.102 Policy.

* * * * *

(d) Agency program officials are

responsible for accurately describing the

need to be filled, or problem to be

resolved, through service contracting in

a manner that ensures full

understanding and responsive

performance by contractors and, in so

doing, should obtain assistance from

contracting officials, as needed.

(e) Agencies shall establish effective

management practices in accordance

with Office of Federal Procurement

Policy (OFPP) Policy Letter 93–1,

Management Oversight of Service

Contracting, to prevent fraud, waste,

and abuse in service contracting.

(f) Services are to be obtained in the

most cost-effective manner, without

barriers to full and open competition,

and free of any potential conflicts of

interest.

(g) Agencies shall ensure that

sufficiently trained and experienced

officials are available within the agency

to manage and oversee the contract

administration function.

6. Subpart 37.5 is added to read as

follows:

Subpart 37.5—Management Oversight

of Service Contracts

Sec.

37.500 Scope of subpart.

37.501 Definition.

37.502 Exclusions.

37.503 Agency-head responsibilities.

37.504 Contracting officials’

responsibilities.

37.500 Scope of subpart.

This subpart establishes

responsibilities for implementing Office

of Federal Procurement Policy (OFPP)

Policy Letter 93–1, Management

Oversight of Service Contracting.
Federal Register / Vol. 62, No. 51 / Monday, March 17, 1997 / Rules and Regulations 12695

37.501 Definition.

Best practices, as used in this subpart,

means techniques that agencies may use

to help detect problems in the

acquisition, management, and

administration of service contracts. Best

practices are practical techniques gained

from experience that agencies may use

to improve the procurement process.

37.502 Exclusions.

(a) This subpart does not apply to

services that are

(1) Obtained through personnel

appointments and advisory committees;

(2) Obtained through personal service

contracts authorized by statute;

(3) For construction as defined in

36.102; or

(4) Obtained through interagency

agreements where the work is being

performed by in-house Federal

employees.

(b) Services obtained under contracts

below the simplified acquisition

threshold and services incidental to

supply contracts also are excluded from

the requirements of this subpart.

However, good management practices

and contract administration techniques

should be used regardless of the

contracting method.

37.503 Agency-head responsibilities.

The agency head or designee should

ensure that—

(a) Requirements for services are

clearly defined and appropriate

performance standards are developed so

that the agency’s requirements can be

understood by potential offerors and

that performance in accordance with

contract terms and conditions will meet

the agency’s requirements;

(b) Service contracts are awarded and

administered in a manner that will

provide the customer its supplies and

services within budget and in a timely

manner;

(c) Specific procedures are in place

before contracting for services to ensure

compliance with OFPP Policy Letters

92–1, Inherently Governmental

Functions, 91–2, Service Contracting,

and 89–1, Conflicts of Interest Policies

Applicable to Consultants; and

(d) Strategies are developed and

necessary staff training is initiated to

ensure effective implementation of the

policies in 37.102.

37.504 Contracting officials’

responsibilities.

Contracting officials should ensure

that ‘‘best practices’’ techniques are

used when contracting for services and

in contract management and

administration (see OFPP Policy Letter

93–1).

[FR Doc. 97–6312 Filed 3–14–97; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 16 and 52

[FAC 90–46; FAR Case 93–603; Item IV]

RIN 9000–AH07

Federal Acquisition Regulation;

Performance Incentives for Fixed-Price

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 have

agreed on a final rule amending the

Federal Acquisition Regulation (FAR) to

permit the use of award-fee provisions

as performance incentives in fixed-price

contracts. This regulatory action was not

subject to Office of Management and

Budget review under Executive Order

12866, dated September 30, 1993. This

is not a major rule under 5 U.S.C. 804.

DATES: Effective May 16, 1997.

FOR FURTHER INFORMATION CONTACT: Mr.

Ralph DeStefano at (202) 501–1758 in

reference to this FAR case. For general

information, contact the FAR

Secretariat, Room 4037, GS Building,

Washington, DC 20405 (202) 501–4755.

Please cite FAC 90–46, FAR case 93–

603.

SUPPLEMENTARY INFORMATION:

A. Background

The FAR currently provides for the

use of performance incentives when

used with cost incentives. This FAR

revision allows the use of performance

incentives alone. This revision will

allow agencies to recognize and reward

contractors who exceed minimum

standards in terms of quality,

timeliness, technical ingenuity, and

effective management.

A proposed rule was published in the

Federal Register at 61 FR 31798, June

20, 1996. One comment was received

from one respondent. The comment was

considered in developing the final rule.

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 merely authorizes the use of

performance incentives for contractors

under fixed-price contracts. The rule

authorizes the Government to reward a

contractor for exceeding minimum

performance standards.

C. Paperwork Reduction Act

The Paperwork Reduction Act does

not apply because the changes to the

FAR do not impose recordkeeping or

information collection requirements, or

collections of information from offerors,

contractors, or members of the public

which 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 16 and

52

Government procurement.

Dated: March 7, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 16 and 52 are

amended as set forth below:

1. The authority citation for 48 CFR

Parts 16 and 52 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 16—TYPES OF CONTRACTS

16.204 [Amended]

2. Section 16.204 is amended in the

last sentence by removing the citation

‘‘16.405’’ and inserting ‘‘16.406’’.

16.304 [Amended]

3. Section 16.304 is amended by

removing ‘‘16.404–1’’ and inserting

‘‘16.405–1’’.

16.305 [Amended]

4. Section 16.305 is amended by

removing ‘‘16.404–2’’ and inserting

‘‘16.405–2’’ each time it appears.

5. Section 16.401 is amended in

paragraph (c) by revising the first

sentence; and adding paragraph (d) to

read as follows:

16.401 General.

* * * * *

(c) The two basic categories of

incentive contracts are fixed-price

incentive contracts (see 16.403 and