[Federal Register Volume 73, Number 181 (Wednesday, September 17, 2008)]
[Rules and Regulations]
[Pages 54008-54010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-21379]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 16

[FAC 2005-27; FAR Case 2008-006; Item IX; Docket 2008-01, Sequence 5]
RIN 9000-AL05


Federal Acquisition Regulation; FAR Case 2008-006, Enhanced 
Competition for Task and Delivery Order Contracts--Section 843 of the 
Fiscal Year 2008 National Defense Authorization Act

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

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) to implement the 
Fiscal Year 2008 National Defense Authorization Act, Section 843 
``Enhanced Competition for Task and Delivery Order Contracts'' (FY08 
NDAA). Section 843 of the FY08 NDAA stipulates several requirements 
regarding enhancing competition within Federal contracting.

DATES: Effective Date: September 17, 2008.
    Applicability date: FAR 16.503 and 16.504, as amended by this rule, 
are applicable to single award task or delivery order contracts awarded 
on or after May 27, 2008. FAR 16.505, as amended by this rule, is 
applicable to orders awarded on or after May 27, 2008 on existing 
contracts as well as new contracts.
    Comment Date: Interested parties should submit written comments to 
the FAR Secretariat on or before November 17, 2008 to be considered in 
the formulation of a final rule.

[[Page 54009]]


ADDRESSES: Submit comments identified by FAC 2005-27, FAR case 2008-
006, by any of the following methods:
    <bullet> Regulations.gov: http://www.regulations.gov.
    Submit comments via the Federal eRulemaking portal by inputting 
``FAR Case 2008-006'' under the heading ``Comment or Submission''. 
Select the link ``Send a Comment or Submission'' that corresponds with 
FAR Case 2008-006. Follow the instructions provided to complete the 
``Public Comment and Submission Form''. Please include your name, 
company name (if any), and ``FAR Case 2008-006'' on your attached 
document.
    <bullet> Fax: 202-501-4067.
    <bullet> Mail: General Services Administration, Regulatory 
Secretariat (VPR), 1800 F Street, NW, Room 4041, ATTN: Laurieann 
Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite FAC 2005-27, FAR 
case 2008-006, in all correspondence related to this case. All comments 
received will be posted without change to http://www.regulations.gov, 
including any personal and/or business confidential information 
provided.

FOR FURTHER INFORMATION CONTACT: Mr. William Clark, Procurement 
Analyst, at (202) 219-1813 for clarification of content. Please cite 
FAC 2005-27, FAR case 2008-006. For information pertaining to status or 
publication schedules, contact the FAR Secretariat at (202) 501-4755.

SUPPLEMENTARY INFORMATION:

A. Background

    The Fiscal Year 2008 National Defense Authorization Act (Pub. L. 
110-181), Section 843 ``Enhanced Competition for Task and Delivery 
Order Contracts'' includes several requirements regarding enhancing 
competition within the Federal contracting framework. The provisions of 
Section 843 include: (1) Limitation on single award task and delivery 
order contracts greater than $100 million; (2) Enhanced competition for 
task and delivery orders in excess of $5 million; and (3) Protest on 
orders on the grounds that the order increases the scope, period, 
maximum value of the contract under which the order is issued; or 
valued in excess of $10 million.
    The FAR changes are applicable to Indefinite-Delivery Requirements, 
and Indefinite-Quantity, type contracts where issuance of a task or 
delivery order is placed pursuant to FAR Subpart 16.5. The purpose of 
this statute is to improve opportunities for competition through fair 
opportunity, transparency and accountability in contracting.
    1. Limitation on single award task or delivery order contracts 
greater than $100 million. Section 843 states that no task or delivery 
order contract in an amount estimated to exceed $100 million (including 
all options) may be awarded to a single source unless the head of the 
agency determines in writing that--
    a. The task or delivery orders expected under the contract are so 
integrally related that only a single source can reasonably perform the 
work;
    b. The contract provides only for firm-fixed price task or delivery 
orders;
    c. Only one source is qualified and capable of performing the work 
at a reasonable price to the Government; or
    d. It is necessary in the public interest to award the contract to 
a single source due to exceptional circumstances.
    The agency head must also notify Congress within 30 days after 
making the determination in the public interest. The objective of this 
provision is to place greater emphasis on awarding multiple award 
contracts and enhancing the fair opportunity provisions within FAR 
Subpart 16.5. Competition of orders leads to improved contractor 
performance, stimulation of technological solutions, and reduction of 
costs over time. The tenets of this provision strike at the core of 
enhancing competition and ensuring competition continues to exist even 
after award of the initial contract vehicles. Notwithstanding the 
limitation on single awards, there are occasions when a single award is 
necessary. For these occasions, Section 843 authorizes exceptions for 
awarding single award task or delivery order contracts that exceed $100 
million.
    2. Enhanced competition for orders in excess of $5 million. This 
Section 843 requirement emphasizes the importance of following certain 
specified procedures in the competitive placement of task or delivery 
orders with an expected value in excess of $5 million (including 
options) placed against multiple award contracts. All awardees are to 
be given a fair opportunity to be considered for each order, at a 
minimum, a notice of the order with a clear statement of requirements, 
a reasonable response period, disclosure of the significant evaluation 
factors and subfactors, and where award is made on a best value basis, 
a statement documenting the basis for award and the relative importance 
of quality and price or cost factors. Section 843 also provides an 
opportunity for a vendor to request a debriefing on orders valued over 
$5 million. The goal is to improve the transparency and accountability 
of agency award decisions. The new requirements apply to orders on 
existing contracts, as well as on new contracts.
    3. Protest of orders greater than $10 million. This Section 843 
requirement provides a mechanism to protest task or delivery orders 
valued in excess of $10 million (including options) under multiple 
award contracts and states that the Comptroller General shall have 
exclusive jurisdiction over such protests. In particular, protests are 
authorized on the grounds that--
    (a) The order increases the scope, period, or maximum value of the 
contract under which the order is issued; or
    (b) As a matter of right for orders valued in excess of $10 
million. This provision provides for greater accountability, oversight 
and discipline within the Federal acquisition framework, when coupled 
with the requirement of post award debriefings. The existing 
requirement to protest orders under section 16.505(a)(9) and the newly 
added requirement for orders greater than $10 million expire May 27, 
2011, unless extended by a new statute. The protest authority applies 
to orders on existing contracts, as well as on new contracts.
    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 interim rule is not expected to 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 this 
rule does not revise or change existing regulations pertaining to small 
business concerns seeking Government contracts. Therefore, an Initial 
Regulatory Flexibility Analysis has not been performed. The Councils 
will consider comments from small entities concerning the affected FAR 
Part 16 in accordance with 5 U.S.C. 610. Interested parties must submit 
such comments separately and should cite 5 U.S.C 601, et seq. (FAC 
2005-27, FAR case 2008-006), in correspondence.

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

[[Page 54010]]

and Budget under 44 U.S.C. 3501, et seq.

D. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary because provisions of the Fiscal Year 2008 National 
Defense Authorization Act Section 843 go into effect on May 27, 2008. 
The Councils believe that the interim rule in the FAR will provide the 
contracting officer the relevant regulatory guidance needed when 
addressing requirements outlined in this notice. The rule will also 
benefit industry in regards to the requirements for strengthening 
competition among orders, and the ability to protest orders. However, 
pursuant to Pub. L. 98-577 and FAR 1.501, the Councils will consider 
public comments received in response to this interim rule in the 
formation of the final rule.

List of Subjects in 48 CFR Part 16

    Government procurement.

    Dated: September 9, 2008.
Al Matera,
Director, Office of Acquisition Policy.

0
Therefore, DoD, GSA, and NASA amend 48 CFR part 16 as set forth below:

PART 16--TYPES OF CONTRACTS

0
1. The authority citation for 48 CFR part 16 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 16.503 by revising paragraph (b) to read as follows:


16.503  Requirements contracts.

* * * * *
    (b) Application. (1) A requirements contract may be appropriate for 
acquiring any supplies or services when the Government anticipates 
recurring requirements but cannot predetermine the precise quantities 
of supplies or services that designated Government activities will need 
during a definite period.
    (2) No requirements contract in an amount estimated to exceed $100 
million (including all options) may be awarded to a single source 
unless a determination is executed in accordance with 
16.504(c)(1)(ii)(D).
* * * * *

0
3. Amend section 16.504 by removing from paragraph (a)(4)(v) 
``16.505(b)(5)'' and adding ``16.505(b)(6)'' in its place; and adding 
paragraph (c)(1)(ii)(D) to read as follows:


16.504  Indefinite-quantity contracts.

* * * * *
    (c) * * *
    (1) * * *
    (ii) * * *
    (D)(1) No task or delivery order contract in an amount estimated to 
exceed $100 million (including all options) may be awarded to a single 
source unless the head of the agency determines in writing that--
    (i) The task or delivery orders expected under the contract are so 
integrally related that only a single source can reasonably perform the 
work;
    (ii) The contract provides only for firm-fixed price (see 16.202) 
task or delivery orders for--
    (A) Products for which unit prices are established in the contract; 
or
    (B) Services for which prices are established in the contract for 
the specific tasks to be performed;
    (iii) Only one source is qualified and capable of performing the 
work at a reasonable price to the Government; or
    (iv) It is necessary in the public interest to award the contract 
to a single source due to exceptional circumstances.
    (2) The head of the agency must notify Congress within 30 days 
after any determination under paragraph (c)(1)(ii)(D)(1)(iv) of this 
section.
    (3) The requirement for a determination for a single award contract 
greater than $100 million applies in addition to the requirements of 
Subpart 6.3.
* * * * *

0
4. Amend section 16.505 by--
0
a. Revising paragraph (a)(9);
0
b. Adding to the end of the fourth sentence before the period of 
paragraph (b)(1)(ii) ``and the order does not exceed $5 million'';
0
c. Redesignating paragraph (b)(1)(iii) as (b)(1)(iv); and adding a new 
paragraph (b)(1)(iii); and
0
d. Redesignating paragraphs (b)(4) and (b)(5) as paragraphs (b)(5) and 
(b)(6); and adding a new paragraph (b)(4).
0
The revised text reads as follows:


16.505  Ordering.

    (a) * * *
    (9)(i) 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) A protest on the grounds that the order increases the scope, 
period, or maximum value of the contract; or
    (B) A protest of an order valued in excess of $10 million. Protests 
of orders in excess of $10 million may only be filed with the 
Government Accountability Office, in accordance with the procedures at 
33.104.
    (ii) The authority to protest the placement of an order under this 
subpart expires on May 27, 2011. (10 U.S.C. 2304a(d) and 2304c(d), and 
41 U.S.C. 253h(d) and 253j(d)).
    (b) * * *
    (1) * * *
    (iii) Orders exceeding $5 million. For task or delivery orders in 
excess of $5 million, the requirement to provide all awardees a fair 
opportunity to be considered for each order shall include, at a 
minimum--
    (A) A notice of the task or delivery order that includes a clear 
statement of the agency's requirements;
    (B) A reasonable response period;
    (C) Disclosure of the significant factors and subfactors, including 
cost or price, that the agency expects to consider in evaluating 
proposals, and their relative importance;
    (D) Where award is made on a best value basis, a written statement 
documenting the basis for award and the relative importance of quality 
and price or cost factors; and
    (E) An opportunity for a postaward debriefing in accordance with 
paragraph (b)(4) of this section.
* * * * *
    (4) Postaward Notices and Debriefing of Awardees for Orders 
Exceeding $5 million. The contracting officer shall notify unsuccessful 
awardees when the total price of a task or delivery order exceeds $5 
million.
    (i) The procedures at 15.503(b)(1) shall be followed when providing 
postaward notification to unsuccessful awardees.
    (ii) The procedures at 15.506 shall be followed when providing 
postaward debriefing to unsuccessful awardees.
    (iii) A summary of the debriefing shall be included in the task or 
delivery order file.
* * * * *
[FR Doc. E8-21379 Filed 9-16-08; 8:45 am]
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