Source: https://www.federalregister.gov/documents/2012/07/26/2012-18276/federal-acquisition-regulation-changes-to-time-and-materials-and-labor-hour-contracts-and-orders
Timestamp: 2018-03-20 06:40:10
Document Index: 555580772

Matched Legal Cases: ['ART 16', 'art 16', 'art 16', 'art 8', 'art 8', 'art 12', 'art 8', 'art 8', 'art 16', 'arts 8']

A Proposed Rule by the Defense Department, the General Services Administration, and the National Aeronautics and Space Administration on 07/26/2012
77 FR 43780
43780-43782 (3 pages)
Docket 2011-0025
FAR-2011-0025
PART 16—TYPE OF CONTRACTS
https://www.federalregister.gov/d/2012-18276 https://www.federalregister.gov/d/2012-18276
DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to provide additional guidance when raising the ceiling price or otherwise changing the scope of work for a time-and-materials (T&M) or labor-hour (LH) contract or order.
Interested parties should submit written comments to the Regulatory Secretariat at one of the addressees shown below on or before September 24, 2012 to be considered in the formation of the final rule.
Submit comments in response to FAR Case 2011-025 by any of the following methods:
Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching for “FAR Case 2011-025”. Select the link “Submit a Comment” that corresponds with “FAR Case 2011-025.” Follow the instructions provided at the “Submit a Comment” screen. Please include your name, company name (if any), and “FAR Case 2011-025” on your attached document.
Instructions: Please submit comments only and cite FAR Case 2011-025, 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.
Mr. Michael O. Jackson, Procurement Analyst, at 202-208-4949, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAR Case 2011-025.
DoD, GSA, and NASA are proposing to revise the FAR to implement a policy that provides additional guidance to address actions required when raising the ceiling price for a T&M or LH contract or order. FAR Case 2009-043, “Time-and-Materials and Labor-Hour Contracts for Commercial Items”, was published as a final rule in the Federal Register at 77 FR 194 on January 3, 2012. As a result of FAR case 2009-043, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) were concerned that contracting officers may erroneously conclude that a Determination and Findings (D&F) is always sufficient to justify a change in the ceiling price.
This FAR case provides additional guidance to address actions required when raising the ceiling price or otherwise changing the general scope of a T&M or LH contract or order. The case provides guidance to address this issue for the respective parts of the FAR addressing T&M and LH contracts or orders, such as FAR 8.404, 12.207, and 16.601.
The Government Accountability Office stated within Matter of Specialty Marine, Inc., B-293871, B-293871.2, 2004 Comp. Gen. Proc. Dec. P130, (June 17, 2004) that: “When a protester alleges that an order is outside the scope of the contract, we analyze the protest in essentially the same manner as those in which the protester argues that a contract modification is outside the scope of the underlying contract. The fundamental issue is whether issuance of the task or delivery order in effect circumvents the general statutory requirement under the Competition in Contracting Act (CICA) that agencies `obtain full and open competition through the use of competitive procedures' when procuring their requirements. See 10 U.S.C. 2304(a)(1)(A) (2000).
In determining whether a task or delivery order (or modification) is outside the scope of the underlying contract, and thus falls within CICA's competition requirement, our Office examines whether the order is materially different from the original contract. Evidence of a material difference is found by reviewing the circumstances attending the original procurement; any changes in the type of work, performance period, and costs between the contract as awarded and the order as issued; and whether the original solicitation effectively advised offerors of the potential for the type of orders issued. Overall, the inquiry is whether the order is one which potential offerors would have reasonably anticipated.”
The Councils propose the following changes:
FAR 8.404(h)(3)(iv). This paragraph is revised to require analysis and documentation for changes in T&M or LH orders and to clarify that changes in the general scope should be justified as non-competitive new work. In addition, a clarification is added that if modifying an order to add open market items, the contracting officer must also comply with the requirements at FAR 8.402(f).
FAR 12.207(b)(1)(ii)(C). This paragraph is revised to require analysis and documentation for changes in T&M or LH contracts or orders and to clarify that changes in the general scope should be justified as non-competitive new work. The new proposed language distinguishes between changes that modify the general scope of a contract and changes that modify the general scope of an order. For the changes that modify the general scope of the contract, contracting officers are advised to follow the procedures at FAR 6.303. For the changes that modify the general scope of an order, contracting officers are advised to follow the procedures at FAR 8.405-6 for orders issued under the Federal Supply Schedules. For the orders issued under multiple award task and delivery order contracts, contracting officers are advised to follow the procedures at FAR 16.505(b)(2).
FAR 16.505(b)(4) and (5). These paragraphs are added to reference additional requirements for cost reimbursement, T&M or LH orders.
FAR 16.601. This section is revised to require analysis and documentation for changes in T&M or LH contracts or orders and to clarify that changes in the general scope should be justified as non-competitive new work. FAR 16.601(d) has also been amended to make it clear that a D&F is required for T&M orders. This FAR change will clarify that a T&M D&F is required for each non-commercial item T&M order under a part 16 indefinite-delivery indefinite-quantity (IDIQ) contract. This change is necessary both to keep part 16 parallel with part 8 (which requires a D&F for each part 8 T&M order) and to clarify an unintended lack of clarity in the 2006 FAR changes that rewrote much of the T&M policies in the FAR (see FAC 2005-15, published in the Federal Register at 71 FR 74656 on December 12, 2006). Currently, only part 12 includes a direct requirement for T&M orders to be authorized by a T&M D&F, but this applies only to commercial items. This FAR case is adding a clarification to part 8 to repeat that policy to ensure that part 8 T&M orders are also each authorized by a T&M D&F. With this case, part 16 is also being changed to explicitly require T&M D&Fs for orders.
FAR 16.601(e). The new proposed language distinguishes between changes that modify the general scope of a contract and changes that modify the general scope of an order. For the changes that modify the general scope of the contract, contracting officers are advised to follow the procedures at FAR 6.303. For the changes that modify the general scope of an order, contracting officers are advised to follow the procedures at FAR 8.405-6 for orders issued under the Federal Supply Schedules. For the orders issued under multiple award task and delivery order contracts, contracting officers are advised to follow the procedures at FAR 16.505(b)(2).
The purpose of this case is to clarify the procedures necessary to raise the ceiling price of a time-and-materials (T&M) or labor-hour (LH) contract or order.
In finalizing FAR rule 2009-043 “Time-and-Materials and Labor-Hour Contracts for Commercial Items” it became apparent that the guidance in the FAR on raising the ceiling price for a T&M or LH contract or order was not clear or consistent throughout the FAR. This case was opened to clarify the process and necessary documentation when raising the ceiling price for these contracts or orders.
This rule deals with the administration of T&M and LH contracts and orders and most likely will not have a direct effect on contractors. In FY 2011, the Federal Government awarded 23,023 T&M and LH contracts and orders of which 6,315 went to small businesses. This rule is not likely to affect how many large and small businesses are awarded this type of contract.
DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2011-025) in correspondence.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 8, 12, 16, and 52 as follows:
b. Redesignating paragraphs (b)(4) through paragraphs (b)(6) as paragraphs (b)(6) through (b)(8), respectively; and
c. Adding new paragraphs (b)(4) and (b)(5).
b. Revising paragraph (d) introductory text and paragraph (d)(2);
d. Adding a new paragraph (e),
7. Amend section 52.216-29 by removing from the introductory paragraph “16.601(e)(1)” and adding “16.601(f)(1)” in its place.
8. Amend section 52.216-30 by removing from the introductory paragraph “16.601(e)(2)” and adding “16.601(f)(2)” in its place.
9. Amend section 52.216-31 by removing from the introductory paragraph “16.601(e)(3)” and adding “16.601(f)(3)” in its place.
[FR Doc. 2012-18276 Filed 7-25-12; 8:45 am]