[Federal Register Volume 73, Number 193 (Friday, October 3, 2008)]
[Proposed Rules]
[Pages 57580-57583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22745]


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GENERAL SERVICES ADMINISTRATION

48 CFR Parts 501, 515, and 552

[GSAR Case 2008-G506; Docket 2008-0007; Sequence 23]
RIN 3090-AI76


General Services Acquisition Regulation; GSAR Case 2008-G506; 
Rewrite of GSAR Part 515, Contracting by Negotiation

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

ACTION: Proposed rule.

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SUMMARY: The General Services Administration (GSA) is proposing to 
amend the General Services Acquisition Regulation (GSAR) to revise 
language that provides requirements for contracting by negotiation.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat on or before December 2, 2008 to be considered 
in the formulation of a final rule.

ADDRESSES: Submit comments identified by GSAR Case 2008-G506 by any of 
the following methods:
    <bullet> Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by inputting ``GSAR Case 
2008-G506'' under the heading ``Comment or Submission''. Select the 
link ``Send a Comment or Submission'' that corresponds with GSAR Case 
2008-G506. Follow the instructions provided to complete the ``Public 
Comment and Submission Form''. Please include your name, company name 
(if any), and ``GSAR Case 2008-G506'' 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 GSAR Case 2008-
G506 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 For clarification of content, contact 
Mr. Michael O. Jackson at (202) 208-4949. For information pertaining to 
the status or publication schedules, contact the Regulatory Secretariat 
(VPR), Room 4041, GS Building, Washington, DC 20405, (202) 501-4755. 
Please cite GSAR Case 2008-G506.

SUPPLEMENTARY INFORMATION:

A. Background

    The General Services Administration (GSA) is amending the General 
Services Administration Acquisition Regulation (GSAR) to revise 
sections of GSAR part 515 that provide requirements for contracting by 
negotiation.
    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 FAR and to implement 
streamlined and innovative acquisition procedures that contractors, 
offerors, and GSA contracting personnel can utilize when entering into 
and administering contractual relationships. The GSAM incorporates the 
GSAR as well as internal agency acquisition policy.
    GSA will rewrite each part of the GSAR and GSAM, and as each GSAR 
part is rewritten, will publish it in the Federal Register.
    This rule covers the rewrite of GSAR Part 515. The specific changes 
are as follows:
    <bullet> GSAR 501.106 - Added Control Number 3090-0163 as a cross 
reference for 515.201-1.
    <bullet> GSAR 515.204--Added a paragraph to specify that the senior 
procurement executive is the designee per FAR 15.204(e).
    <bullet> GSAR 515.204-1--Moved paragraph (a) to 515.204. Renumbered 
remaining paragraphs and references accordingly.
    <bullet> GSAR 515.205--Added ``or unless the incumbent contractor 
is otherwise ineligible for the award'' to advise contracting officers 
that they are not obligated to include an offeror in the competition if 
they are not eligible to compete.
    <bullet> GSAR 515.209-70, Examination of records by GSA clause--
    a. In paragraph (b), changed ``You'' to ``The contracting officer'' 
eliminated the dashes in ``Assistant Inspector General-Auditing'' and 
``Regional Inspector General-Auditing''; and replaced each dash with a 
``for''; and
    b. Paragraphs (c) and (d) were trasferred to Part 538 because they 
only pertain to Federal Supply Schedule (FSS) Multiple Award Schedule 
(MAS).
    <bullet> 515.305, Proposal evaluation--
    a. Transferred paragraph (a), renumbered it 515.208-70 and made it 
non-regulatory;
    b. Transferred paragraph (b), renumbered it 515.305-71 and made it 
non-regulatory;
    c. Made 515.305-70 non-regulatory; and
    d. The text made non-regulatory and renumbered to 515.208-70 and 
515.305-71, as well as the text that was formerly regulatory at 
515.305-70, the team decided that it did not affect the public and was 
only applicable internally to GSA.
    <bullet> 515.408, Solicitation provisions and contract clauses--
Transferred to GSAM Part 538 because it is only applicable to the 
Multiple Award Schedules Program. This proposed revision also includes 
the CSP-1 form.
    <bullet> 515.7002, Procedures--
    a. Replaced ``You'' with ``Contracting Officer'' throughout the 
clause. Also changed ``Base your determination'' to ``This 
determination should be based'';
    b. In paragraph (a) changed FAR reference ``14.202-4(g)'' to 
``14.202-4(f)'' and changed ``However, qualifications'' to ``Samples 
are not requested. Any samples submitted with''. This is to include 
minor editorial changes suggested by the Advanced Notice of Public 
Rulemaking; and
    c. In paragraph (b)(1) deleted ``52.214-20'' and replaced it with 
``552.214-72''. Deleted the remainder of the paragraph.
    <bullet> 552.215-71--Transferred to Part 538 because of the 
proposed move in 515.209-70(c) and (d).
    <bullet> 552.215-72--Transferred to Part 538 because of the 
proposed move in 515.408.
    As a result of the rewrite of GSAM Part 515, certain text and 
clauses such as 552.215-71, Examination of Records by GSA (Multiple 
Award Schedule), and 552.215-72, Price Adjustment--Failure to Provide 
Accurate Information, were transferred to the GSAM rewrite team 
handling the rewrite of GSAM Part 538. The 538 team was assembled with 
GSA personnel who have experience in dealing with GSAM Part 538, 
including personnel from GSA's Federal Acquisition Service, which is 
the GSA component responsible for GSA's Multiple Award Schedules. GSA 
established a process in the rewrite initiative where text and clauses 
that were found more suited to be allocated to other parts of the GSAM 
were sent to the other rewrite teams for their analysis and 
incorporation into their assigned rewrite parts.

[[Page 57581]]

Discussion of Comments

    Nine comments covering Part 515 were received in response to the 
Advanced Notice of Proposed Rulemaking published in the Federal 
Register at 71 FR 7910, February 15, 2006. A discussion of these 
comments is provided below:
    1. Comment: One commenter focused on the GSAR 552.238-75, Price 
Reductions (currently May 2004) clause, the Commercial Sales Practices 
Format (CSPF) in GSAR 515.408, and the Figure 515.4 Instructions that 
accompany them.
    Response: This comment was transferred to the GSAM part 538 rewrite 
team.
    2. Comment: Another commenter believes there is value in 
consistency--a greater likelihood of driving fair prices among all 
contracts for a type of product or service. One area for consistency is 
in the data collected in CSPF charts. GSA's sample format does a 
commendable job toward that goal but can be improved.
    Response: This comment was transferred to the GSAM part 538 rewrite 
team.
    3. Comment: GSAR should resolve how the requirement to annually 
update the Central Contractor Registration (CCR) impacts the position 
that small business size status is as of the time the offer is 
submitted. The commenter recommends that GSAR prescribe language to 
insert in GSA Schedule price lists on this topic. The language would 
inform agencies that notwithstanding data in CCR, for purposes of 
ordering against the schedule a contractor is small for the 5 year 
period of the schedule contract. Schedule contractors are required to 
recertify size status at the time of a renewal.
    Response: This comment was transferred to the GSAM part 538 rewrite 
team.
    4. Comment: Section 515.305(d)(1) of the GSAM discusses the 
requirement of using (``must use'') PPIRS (Past Performance Information 
Retrieval System). It goes on to say that a contracting officer ``may 
use'' questionnaires tailored to the circumstances, interviews, and 
other sources. On the other hand, FAR Part 15.203(3) specifically 
indicates what past performance evaluations ``shall address.'' This 
includes contractor's record of conforming to contract requirements and 
to standards of good workmanship; contractor's record of forecasting 
and controlling costs; contractor's adherence to contract schedules, 
including administrative aspects of performance; contractor's history 
of reasonable and cooperative behavior and commitment to customer 
satisfaction; and generally, contractor's business-like concern for 
interest of the customer. Additionally, FAR 9.105-1 and 42.15 provide 
steps to conducting past performance survey, including checking List of 
Parties Excluded from Federal Procurement and Non-Procurement Programs, 
reviewing previous pre-award survey reports, and requesting information 
from other government offices. The FAR seems to be substantially more 
specific in nature than the GSAM.
    Response: PPIRS is a government wide system intended to supplement 
past performance evaluations. The use of PPIRS as directed by GSAM does 
not replace the requirement to follow the guidance in the applicable 
parts of the FAR regarding past performance evaluations. We also note 
that the FAR does not contain 15.203(3), as referenced in the 
commenter's comment.
    5. Comment: 515.403-4, Requiring cost or pricing data (10 U.S.C. 
2306a and 41 U.S.C. 254b) - To determine if a contract action meets the 
threshold at FAR 15.403-4 for requesting cost and pricing data, 
consider the value of the action plus any priced options. Exercise of a 
priced option is not a price adjustment and does not require submission 
of cost and pricing data. GSAR should be revised to state what the 
threshold is.
    Response: Do not concur. The FAR specifies the threshold.
    6. Comment: 515.306, Exchanges with offerors after receipt of 
proposals. Limit access to Government cost estimates to Government 
personnel whose official duties require knowledge of the estimate. 
During negotiations, you may disclose part or all of the Government 
estimate under FAR 15.306(e) when necessary to arrive at a fair and 
reasonable price. After award, you may reveal the total amount of the 
independent Government estimate. More information should be included to 
explain the various types of exchanges that can be conducted with 
offerors.
    Response: Do not concur. FAR 15.306(e) only places limits on 
exchanges. It is up to the contracting officer to use their discretion 
based on the exceptions cited in the FAR to determine the content of 
any exchanges with offerors.
    7. Comment: Appendix 515A--Source Selection Procedures (This 
Appendix will replace GSA Order, Source Selection Procedures (APD P 
2800.2)). The source selection procedures are being updated based on 
the FAR Part 15 rewrite. Would be greatly beneficial to see this 
section completed.
    Response: Concur. Comment is taken under advisement.
    8. Comment: Clarify and revise the Commercial Sales Practices 
Format, including simplifying the provision and removing those 
requirements associated with the mechanism that represents the pricing 
relationship between the Government and the basis of award customer (or 
category of customers) that pose undue administrative burden.
    Response: The Commercial Sales Practices format will be addressed 
in GSAM 538.
    9. Comment: Revise the GSAR to address the procurement practice 
known as ``reverse auctions''. While GSA supports innovative 
competitive techniques, GSA is concerned about the implication that 
auction techniques should be required even to the extent practicable, 
for the purchase of commercial items, and in particular not all 
commercial services, lend themselves to the ``price only'' bidding used 
in auction and reverse auction techniques.
    Response: Office of Federal Procurement Policy (see memo, 
``Government-wide Survey on the Use of Reverse Auctions'', dated 
November 27, 2007) has initiated a review of the government's use of 
commercially available online procurement services, including reverse 
auctions. Based on their findings GSA may consider including guidance 
in the GSAR.
    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 does not expect this proposed 
rule 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 the revisions are not considered 
substantive. The revisions only update and reorganize existing 
coverage. An Initial Regulatory Flexibility Analysis has, therefore, 
not been performed. We invite comments from small businesses and other 
interested parties. GSA will consider comments from small entities 
concerning the affected GSAR Parts 501, 515, and 552 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. (GSAR case 2008-G506), in all 
correspondence.

[[Page 57582]]

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 
3090-0027.

List of Subjects in 48 CFR Parts 501, 515, and 552

    Government procurement.

    Dated: September 19, 2008.
Edward C. Loeb,
Deputy Director, Office of Acquisition Policy.
    Therefore, GSA proposes to amend 48 CFR parts 501, 515, and 552 as 
set forth below:
    1. The authority citation for 48 CFR parts 501, 515, and 552 is 
revised to read as follows:

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

PART 501--GENERAL SERVICES ADMINISTRATION ACQUISITION REGULATION 
SYSTEM


501.106  [Amended]

    2. Amend section 501.106, in the table, by adding in numerical 
sequence, GSAR Reference ``515.201-1'' and its corresponding OMB 
Control Number ``3090-0163''.
    3. Revise Part 515 to read as follows:

PART 515--CONTRACTING BY NEGOTIATION

Subpart 515.2--Solicitation and Receipt of Proposals and Information
Sec.
515.204 Contract format.
515.204-1 Uniform contract format.
515.205 Issuing solicitations.
515.209 Solicitation provisions and contract clauses.
515.209-70 Examination of records by GSA clause.
Subpart 515.5--Preaward, Award, and Postaward Notifications, Protests, 
and Mistakes
515.506 Postaward debriefing of offerors.
Subpart 515.70--Use of Samples
515.7002 Procedures.

Subpart 515.2--Solicitation and Receipt of Proposals and 
Information


515.204  Contract format.

    (a) The uniform contract format is not required for leases of real 
property.
    (b) The Senior Procurement Executive is the agency head's designee 
for the purposes of granting exemptions to the use of the Uniform 
Contract Format (see FAR 15.204(e)).


515.204-1  Uniform contract format.

    Each solicitation and contract must include the two notices in 
paragraphs (a) and (b) of this subsection, except that acquisitions of 
leasehold interests in real property, must include only the notice in 
paragraph (a).
    (a) The information collection requirements contained in this 
solicitation/contract are either required by regulation or approved 
by the Office of Management and Budget pursuant to the Paperwork 
Reduction Act and assigned OMB Control No. 3090-0163.
    (b) GSA's hours of operation are 8:00 a.m. to 4:30 p.m. Requests 
for preaward debriefings postmarked or otherwise submitted after 
4:30 p.m. will be considered submitted the following business day. 
Requests for postaward debriefings delivered after 4:30 p.m. will be 
considered received and filed the following business day.


515.205  Issuing solicitations.

    Potential sources, as used in FAR 15.205, include both of the 
following:
    (a) The incumbent contractor, except when its written response to 
the notice of contract action under FAR Subpart 5.2 states a negative 
interest or unless the incumbent contractor is otherwise ineligible for 
the award.
    (b) Offerors that responded to recent solicitations for the same or 
similar items.


515.209  Solicitation provisions and contract clauses.


515.209-70  Examination of records by GSA clause.

    Clause for Other than Multiple Award Schedules
    (a) For other than multiple award schedule (MAS) contracts, insert 
the clause at 552.215-70, Examination of Records by GSA, in 
solicitations and contracts over $100,000, including acquisitions of 
leasehold interests in real property, that meet any of the conditions 
listed below:
    (1) Involve the use or disposition of Government-furnished 
property.
    (2) Provide for advance payments, progress payments based on cost, 
or guaranteed loan.
    (3) Contain a price warranty or price reduction clause.
    (4) Involve income to the Government where income is based on 
operations under the control of the contractor.
    (5) Include an economic price adjustment clause where the 
adjustment is not based solely on an established, third party index.
    (6) Are requirements, indefinite-quantity, or letter type contracts 
as defined in FAR Part 16.
    (7) Are subject to adjustment based on a negotiated cost escalation 
base.
    (8) Contain the provision at FAR 52.223-4, Recovered Material 
Certification.
    (b) The contracting officer may modify the clause at 552.215-70 to 
define the specific area of audit (e.g., the use or disposition of 
Government-furnished property, compliance with the price reduction 
clause). Counsel and the Assistant Inspector General for Auditing or 
Regional Inspector General for Auditing, as appropriate, must concur in 
any modifications to the clause.
    (c) Solicitation notice. Include in the solicitation a notice 
substantially as follows:
    Notice About Releasing Proposals
    (1) The Government intends to disclose proposals received in 
response to this solicitation to nongovernment evaluators.
    (2) Each evaluator will sign and provide to GSA a ``Conflict of 
Interest Acknowledgment and Nondisclosure Agreement.''

Subpart 515.5--Preaward, Award, and Postaward Notifications, 
Protests, and Mistakes


515.506  Postaward debriefing of offerors.

    For purposes of determining the date of receipt of a request for a 
postaward debriefing, GSA's hours of operation are 8:00 a.m. to 4:30 
p.m. Requests received after 4:30 p.m. will be considered received the 
following business day.

Subpart 515.70--Use of Samples


515.7002  Procedures.

    (a) Unsolicited samples. The reference to FAR 14.404-2(d) in FAR 
14.202-4(f) does not apply. Use the following when contracting by 
negotiation: ``Samples are not requested. Any samples submitted with 
the proposal that are at variance with the Government's requirements, 
constitute deficiencies. Resolve these as provided in FAR 15.306.''
    (b) Solicitation requirements. (1) Use the clause at GSAR 552.214-
72.
    (2) In addition to listing subjective characteristics that cannot 
adequately be described in the specification, the contracting officer 
may list and evaluate objective characteristics. To include objective 
characteristics, the contracting officer must determine that 
examination of such characteristics is essential to the acquisition of 
an acceptable product. This determination should be based on past 
experience or other valid considerations.
    (c) FAR 52.215-1(c)(3) applies to samples received after the time 
set for receipt of offers.

[[Page 57583]]

PART 552-SOLICITATION PROVISIONS AND CONTRACT CLAUSES


552.215-71  [Redesignated as 552.238-XX]


552.215-72  [Redesignated as 552.238-YY]

    4. Sections 552.215-71 and 552.215-72 are redesignated as 552.238-
XX and 552.238-YY, respectively.
[FR Doc. E8-22745 Filed 10-2-08; 8:45 am]
BILLING CODE 6820-61-S