[Federal Register Volume 74, Number 56 (Wednesday, March 25, 2009)]
[Rules and Regulations]
[Pages 12731-12733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-6574]


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GENERAL SERVICES ADMINISTRATION

48 CFR Parts 509 and 552

[GSAR Amendment 2009-01; GSAR Case 2006-G512 (Change 27); Docket 2008-
0007; Sequence 9]
RIN 3090-AI57


General Services Acquisition Regulation; GSAR Case 2006-G512; 
Rewrite of GSAR Part 509, Contractor Qualifications

AGENCY: Office of the Chief Acquisition Officer, General Services 
Administration (GSA).

ACTION: Final rule.

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SUMMARY: The General Services Administration (GSA) is amending the 
General Services Administration Acquisition Manual (GSAM) to update the 
text addressing contractor qualifications. This rule is a result of the 
General Services Administration Acquisition Manual (GSAM) rewrite 
initiative undertaken by GSA to revise the GSAM to maintain consistency 
with the Federal Acquisition Regulation (FAR), and to implement 
streamlined and innovative acquisition procedures that contractors, 
offerors, and GSA contracting personnel can use when entering into and 
administering contractual relationships. The GSAM incorporates the 
General Services Administration Acquisition Regulation (GSAR) as well 
as internal agency acquisition policy.

DATES: Effective Date: April 24, 2009.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Meredith Murphy, Procurement Analyst, at (202) 208-6925. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat (VPR), Room 4041, GS Building, Washington, DC, 
20405, (202) 501-4755. Please cite Amendment 2009-01, GSAR case 2006-
G512 (Change 27).

SUPPLEMENTARY INFORMATION:

A. Background

    The GSAR Rewrite Project and Process
    On February 15, 2006, GSA published an Advance Notice of Proposed 
Rulemaking (ANPR) with request for comments on all parts of the GSAM. 
As a result, two comments were received on Part 509. These are 
addressed below. In addition, internal review comments have been 
incorporated as appropriate. A proposed rule for the regulatory portion 
of the GSAM was published in the Federal Register at 73 FR 36013, June 
25, 2008. In addition, GSA Acquisition Letter V-08-06, entitled 
``Changes to Procedures for Conducting Fact-Finding in a Debarment/
Suspension Case Under GSAM Subpart 509.4,'' dated June 20, 2008, was 
incorporated into Subpart 509.4 (see below). The public comment period 
for GSAR Part 509 closed on August 25, 2008, and six comments were 
received from five commenters.
    The Rewrite of Part 509
    This final rule contains the revisions made to Part 509, Contractor 
Qualifications. GSA Form 353, Performance Evaluation and Facilities 
Report, is deleted so that similar FAR forms will be used instead. 
Subpart 509.2, subsection 509.405-1(b), and clauses 552.209-70 through 
552.209-73 are deleted because they are deemed unnecessary. The 
explanation of ``auditor'' in 509.105-1 is removed because it is partly 
duplicative (credit and finance) and too restrictive (does not allow 
use of DCAA). Subsection 509.406-3(b)(7) is deleted as duplicative of 
509.406-3(b)(5). The debarment legal authorities in 509.401 are 
updated. The term ``Suspension and Debarment Official'' is used 
consistently throughout the Part. Subparagraph 509.406-3(d) was 
rewritten to incorporate the procedures for conducting fact finding in 
a debarment or suspension case from GSA Acquisition Letter V-08-06, 
dated June 20, 2008.
    Discussion of Comments
    A proposed rule was published in the Federal Register at 73 FR 
36013, June 25, 2008. The comment period closed August 25, 2008, and 
six comments were received from five commenters. Also, GSA Acquisition 
Letter V-08-06, published on June 20, 2008, was incorporated in the 
final rule.
    1. No new guidelines on teaming.
    Comment: Four commenters wrote in support of the revisions to GSAR 
Part 509 and to advocate not creating new guidelines that would make it 
more difficult for small businesses to work as teams.
    Response: Concur. There are no plans to create new guidelines for 
teaming.
    2. Revise rules for GSA Form 527 so as not to make it a last resort 
for contracting officers.
    Comment: The GSA Form 527, Contractor Qualifications and Financial 
Information, was retained, but associated text was modified to 
authorize its use ``only after exhausting other available sources of 
information.'' While acknowledging that the GSA Form 527 is lengthy, 
the commenter does not think that making the preaward process longer by 
having contracting officers research all other sources of information 
prior to seeking needed information from the contractor is helpful to 
either party. The commenter said he would not be entirely comfortable 
making a responsibility determination based only on information 
external to the offeror, without providing the offeror an opportunity 
to tell its own story about qualifications and abilities.
    Response: Nonconcur. FAR 9.105 includes the standards and 
procedures for requesting and obtaining information sufficient to 
determine the responsibility of a prospective contractor, i.e., that an 
offeror meets the standards at FAR 9.104. A careful reading of FAR 
9.105-1 nets a long list of potential sources for objective 
information, none of which are the offeror itself. While there is 
nothing wrong with obtaining information directly from an offeror, the 
offeror itself should not be the first, or the only, source of 
information for making a responsibility determination. GSA acquisition 
personnel should make greater use of the information sources listed in 
the FAR, and appropriate use of such sources would not extend the 
length of time needed to make a responsibility determination.
    3. Consider eliminating GSA Form 527.
    Comment: A commenter proposed to eliminate GSA Form 527, as long as 
GSA Finance will continue to perform financial reviews without it. 
Rather than using a lengthy form, the commenter said, perhaps a brief 
GSAR solicitation provision could be written detailing the type of 
information an offeror may be requested to provide to support a 
responsibility determination.
    Response: Nonconcur. While this is a good concept, made in the 
spirit of eliminating unnecessary agency-level supplementation of the 
FAR, the GSA Office of Finance, at this time, will not agree to perform 
financial reviews without it.
    4. GSA Acquisition letter V-08-06, entitled ``Changes to Procedures 
for

[[Page 12732]]

Conducting Fact-Finding in a Debarment/Suspension Case Under GSAM 
Subpart 509.4.''
    Comment: In accordance with the GSAM rewrite drafting principles, a 
GSA acquisition letter published after the Part 509 proposed rule was 
sent for publication, was incorporated into the final GSAM Part 509.
    Response: The revisions made by the Acquisition Letter, published 
on June 20, 2008, were included in the draft final rule. Subpart 509.4 
was revised at 509.403 to incorporate the definition of ``fact-finding 
official,'' and the procedures for fact finding replaced the earlier 
version of 509.406-3, Procedures, in accordance with the authority 
granted at FAR 9.406-3(b).
    This is not a significant regulatory action and, therefore, was not 
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 General Services Administration certifies 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 only changes are minor ones, i.e., 
deleting a GSA-unique form and four GSA-unique clauses in favor of 
using the FAR forms and clauses.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does apply; however, these changes to 
the GSAR do not impose additional information collection requirements 
to the paperwork burden previously approved under OMB Control Number 
3090-0007.

List of Subjects in 48 CFR Parts 509 and 552

    Government procurement.

    Dated: December 15, 2008.
David A. Drabkin,
Senior Procurement Executive, Office of the Chief Acquisition Officer, 
General Services Administration.

0
Therefore, GSA amends 48 CFR parts 509 and 552 as set forth below:

0
1. The authority citation for 48 CFR part 509 is revised to read as 
follows:

    Authority:  40 U.S.C. 121(c).

PART 509--CONTRACTOR QUALIFICATIONS

0
2. Revise sections 509.105, 509.105-1, and 509.105-2 to read as 
follows:


509.105  Procedures.


509.105-1  Obtaining information.

    (a)  From a prospective contractor. FAR 9.105-1 lists a number of 
sources of information that a contracting officer may utilize before 
making a determination of responsibility. The contracting officer may 
request information directly from a prospective contractor using GSA 
Form 527, Contractor's Qualifications and Financial Information, but 
only after exhausting other available sources of information.
    (b) From Government personnel. The contracting officer may solicit 
and consider information from any appropriate activities, e.g., legal 
counsel, quality control, contract management, credit and finance, and 
auditors before determining that an offeror is responsible.


509.105-2  Determinations and documentation.

    (a) The contracting officer shall provide written notification to a 
prospective contractor determined not responsible. Include the basis 
for the determination. Notification provides the prospective contractor 
with the opportunity to correct any problem for future solicitations.
    (b) Due to the potential for de facto debarment, the contracting 
officer shall avoid making repeated determinations of nonresponsibility 
based on the same past performance information.
    (c) To provide for timely consideration of the need to institute 
action to debar a contractor, the contracting officer shall submit a 
copy of each nonresponsibility determination, other than those based on 
capacity or financial capability, to the Suspension and Debarment 
Official in the Office of the Chief Acquisition Officer.


509.106  [Removed]

0
3. Section 509.106 is removed.

Subpart 509.2 [Removed]

0
4. Subpart 509.2 is removed.

0
5. Revise section 509.306 to read as follows:


509.306  Solicitation requirements.

    The clauses at FAR 52.209-3 and 52.209-4 do not cover all the 
solicitation requirements described in FAR 9.306. If a solicitation 
contains a testing and approval requirement, the contracting officer 
must address the requirements in FAR 9.306(d) and (f) through (j) in 
the solicitation's Section H, special contract requirements.


509.308  [Removed]

0
6. Section 509.308 is removed.

0
7. Revise section 509.401 to read as follows:


509.401  Applicability.

    This subpart applies to all the following:
    (a) Acquisitions of personal property, nonpersonal services, 
construction, and space in buildings.
    (b) Acquisition of transportation services (Federal Management 
Regulation (FMR) Parts 102-117 and 102-118 (41 CFR parts 102-117 and 
102-118)).
    (c) Contracts for disposal of personal property (FMR Parts 102-36 
through 102-38 (41 CFR parts 102-36 through 102-38)).
    (d) Covered transactions as defined by 41 CFR part 105-68.

0
8. Amend section 509.403 by adding, in alphabetical order, the 
definitions ``Debarring official'' and ``Suspending official''; and, by 
revising the definition ``Fact-finding official. The added and revised 
text reads as follows:


509.403  Definitions.

    Debarring official means the Suspension and Debarment Official 
within the Office of the Chief Acquisition Officer.
    Fact-finding official, means the Suspension and Debarment Official 
or a designee.
* * * * *
    Suspending official means the Suspension and Debarment Official 
within the Office of the Chief Acquisition Officer.

0
9. Revise sections 509.405, 509.405-1 and 509.405-2 to read as follows:


509.405  Effect of listing.


509.405-1  Continuation of current contracts.

    (a) When a contractor appears on the current EPLS, consider 
terminating a contract under any of the following circumstances:
    (1) Any circumstances giving rise to the debarment or suspension 
also constitute a default in the contractor's performance of the 
contract.
    (2) The contractor presents a significant risk to the Government in 
completing the contract.
    (3) The conduct that provides the cause of the suspension, proposed 
debarment, or debarment involved a GSA contract.
    (b) Before terminating a contract when a contractor appears on the 
current EPLS, consider the following factors:
    (1) Seriousness of the cause for debarment or suspension.

[[Page 12733]]

    (2) Extent of contract performance.
    (3) Potential costs of termination and reprocurement.
    (4) Need for or urgency of the requirement, contract coverage, and 
the impact of delay for reprocurement.
    (5) Availability of other safeguards to protect the Government's 
interest until completion of the contract.
    (6) Availability of alternate competitive sources to meet the 
requirement (e.g., other multiple award contracts, readily available 
commercial items.)
    (c) The responsibilities of the agency head under FAR 9.405-1 are 
delegated to the GSA Suspension and Debarment Official.


509.405-2  Restrictions on subcontracting.

    The responsibilities of the agency head under FAR 9.405-2(a) are 
delegated to the GSA Suspension and Debarment Official.

0
10. Revise section 509.406-1 to read as follows:


509.406-1  General.

    The Suspension and Debarment Official is the designee under FAR 
9.406-1(c).

0
11. Amend section 509.406-3 by--
0
a. Removing from paragraphs (a) and (b), the words ``debarring 
official'' and adding the words ``Suspension and Debarment Official'' 
in its place each time it appears;
0
b. Removing from paragraph (b)(2), the word ``Number'' and adding the 
word ``Numbers'' in its place;
0
c. Removing paragraph (b)(7);
0
d. Revising paragraph (c); and
0
e. Removing from paragraphs (d)(1) and (d)(2) the words ``debarring 
official'' and adding the words ``Suspension and Debarment Official'' 
in its place each time it appears; and
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f. Revising paragraph (d)(3).
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The revised text reads as follows:


509.406-3  Procedures.

* * * * *
    (c) Review. The Suspension and Debarment Official will review the 
report, and after coordinating with assigned legal counsel--
    (1) Initiate debarment action;
    (2) Decline debarment action;
    (3) Request additional information; or
    (4) Refer the matter to the OIG for further investigation and 
development of a case file.
    (d) * * *
    (3) Following a review of the record and, if needed, a presentation 
by the contractor in opposition to the proposed action, the Suspension 
and Debarment Official will determine whether there is a genuine 
dispute of material fact. If so, the Suspension and Debarment Official 
will initiate the fact-finding process. The fact-finding official will:
    (i) Establish a date for a fact-finding proceeding, normally to be 
held within 45 days of the determination of who will function as the 
fact-finding official.
    (ii) Grant extensions for good cause.
    (iii) Provide notice of the scheduled hearing.
    (iv) Provide the parties with a schedule for exchange of documents 
and witness lists.
    (v) Develop an official transcript of the fact-finding proceeding.
    (vi) Provide the Government's representative and the contractor 
with an opportunity to present evidence relevant to the facts at issue. 
The contractor may appear in person or through a representative.
    (vii) Conduct hearings under rules consistent with FAR 9.406-3 
pertaining to fact finding. Neither the Federal Rules of Evidence nor 
the Federal Rules of Civil Procedure govern fact finding. Hearsay 
evidence may be presented and will be given appropriate weight by the 
fact-finding official.
    (viii) Provide for witness testimony. Witnesses may testify in 
person. Witnesses are subject to cross examination.
    (ix) Prepare written findings of fact based on a preponderance of 
the evidence and submit them to both the Suspension and Debarment 
Official and the contractor within 20 calendar days following the 
conclusion of the fact-finding proceeding.


509.407-1  [Amended]

0
12. Amend section 509.407-1 by removing the words ``suspending 
official'' and adding ``Suspension and Debarment Official'' in its 
place.


509.407-3  [Amended]

0
13. Amend section 509.407-3 by removing the words ``suspending 
official'' and adding ``Suspension and Debarment Official'' in its 
place each time it appears.

PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
14. The authority citation for 48 CFR part 552 continues to read as 
follows:

    Authority:  40 U.S.C. 121(c).


552.209-70 through 552.209-73  [Removed]

0
15. Sections 552.209-70 through 552.209-73 are removed.
[FR Doc. E9-6574 Filed 3-24-09; 8:45 am]
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