VA Acquisition Regulation: Plain Language Rewrite, 2342-2424 [06-215]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 71, Number 9 (Friday, January 13, 2006)]
[Proposed Rules]
[Pages 2342-2424]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-215]



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Part III





Department of Veterans Affairs





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48 CFR Chapter 8



VA Acquisition Regulation: Plain Language Rewrite; Proposed Rule

Federal Register / Vol. 71 , No. 9 / Friday, January 13, 2006 / 
Proposed Rules

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DEPARTMENT OF VETERANS AFFAIRS

48 CFR Chapter 8

RIN 2900-AK78


VA Acquisition Regulation: Plain Language Rewrite

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: We propose to revise the Department of Veterans Affairs (VA) 
Acquisition Regulation (VAAR). We have rewritten much of the VAAR to 
conform to plain language principles. We are changing many delegations 
of authority for the purpose of becoming more efficient. We are 
removing non-regulatory material. We are making changes in format, 
arrangement, and numbering to make the VAAR parallel to the Federal 
Acquisition Regulation (FAR) as required by the FAR. We are removing 
provisions that simply restate FAR provisions that are already 
applicable. This document also proposes to set forth or revise 
procedures for providing notice and hearing to resolve issues regarding 
possible violations of the Gratuities clause, establishing qualified 
products lists, suspending or debarring a contractor, for expediting 
payments to small businesses, and for reducing or suspending payments 
upon a finding of contract fraud. We propose to expand the coverage of 
the VAAR clause on Organizational Conflicts of Interest to cover a 
broader range of services that may be subject to organizational 
conflicts of interest. We propose to clarify the scope of certain 
regulations and to allow use of additional VAAR clauses in commercial 
item solicitations and contracts, to remove requirements for setting 
aside construction and architect-engineer solicitations for small 
businesses that are in conflict with current statute, to remove a 
requirement to conduct an audit of section 8(a) price proposals that is 
contrary to current FAR requirements, and to remove a VAAR provision 
that requested data from offerors on veteran-owned small businesses 
that has been replaced by a FAR provision. The rule would provide 
guidance to contracting officers on the types of data that should be 
requested from a contractor when evaluating the contractor's financial 
condition. The rule would require the use of the clause on Assignment 
of Claims in purchase orders, would provide guidance to contracting 
officers on the criteria for revising the payment due dates for 
invoices, and would require the use of Alternate I to the clause on 
Disputes.

DATES: Comments on the proposed rule should be submitted on or before 
March 14, 2006 to be considered in the formulation of the final rule.

ADDRESSES: Written comments may be submitted by: mail or hand-delivery 
to the Director, Regulations Management (00REG1), Department of 
Veterans Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 
20420; fax to (202) 273-9026; e-mail to VARegulations@va.gov; or, 
through https://www.regulations.gov. Comments should indicate that they 
are submitted in response to ``RIN 2900-AK78.'' All comments received 
will be available for public inspection in the Office of Regulation 
Policy and Management, Room 1063B, between the hours of 8 a.m. and 4:30 
p.m. Monday through Friday (except holidays). Please call (202) 273-
9515 for an appointment.

FOR FURTHER INFORMATION CONTACT: 

------------------------------------------------------------------------
                                                    Telephone No. and e-
           VAAR part                   Name             mail address
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808, 813, 852.................  Cathy Dailey.....  (202) 273-8774;
                                                    cathy.dailey@mail.va
                                                    .gov.
803 through 806, 809, 811,      Don Kaliher......  (202) 273-8819;
 817, 819, 822, 825, 828, 829,                      donald.kaliher@mail.
 831 through 833, 836, 837,                         va.gov.
 842, 846, 852, and 873.
801, 802, 807, 812, 814         Barbara Latvanas.  (202) 273-7808;
 through 816, 824, 841, 847,                        barbara.latvanas@mai
 849, 852, 853, 870, and 871.                       l.va.gov.
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    The mailing address for the contact persons is as follows: 
Acquisition Policy Division (049A5A), Office of Acquisition and 
Material Management, Department of Veterans Affairs, 810 Vermont Ave., 
NW, Washington, 20420.

SUPPLEMENTARY INFORMATION: When Federal agencies acquire supplies and 
services using appropriated funds, the purchase is governed by the 
Federal Acquisition Regulation (FAR), set forth at 48 Code of Federal 
Regulations (CFR) chapter 1, parts 1 through 53, and the agency 
regulations that implement and supplement the FAR. These authorities 
are designed to ensure that Government procurements are handled fairly 
and consistently, that the Government receives the best value for its 
money, and that all Government contractors operate under a known set of 
rules.
    The Department of Veterans Affairs (VA) regulations that implement 
and supplement the FAR are named the VA Acquisition Regulation (VAAR) 
and are set forth at 48 CFR chapter 8, parts 801 through 873. The wide 
variety of activities that VA carries out makes it necessary for VA to 
implement and supplement the FAR. The VAAR covers VA special 
acquisition needs. We are proposing a number of changes to the VAAR. We 
have rewritten much of the VAAR to conform to plain language principles 
and plain language changes have been made to most parts of the VAAR. We 
propose to change many delegations of authority for the purpose of 
becoming more efficient. We are removing non-regulatory material. We 
propose to make changes in format, arrangement, and numbering to make 
the VAAR parallel to the Federal Acquisition Regulation (FAR) as 
required by subpart 1.3 of the FAR. We propose to remove provisions 
that simply restate FAR provisions that are already applicable. We are 
also proposing to make other changes discussed below.

Part 801, Department of Veterans Affairs Acquisition Regulations System

    We propose to amend the ``Authority'' cites at the beginning of 
each Department of Veterans Affairs Acquisition Regulation (VAAR) part 
to correspond to current authority.
    We propose to amend the VAAR to use acronyms, such as ``VAAR,'' in 
part 801 and throughout the document for many of the common terms used. 
The new acronyms are referenced in part 802 or, if used only in one 
part or subpart of the VAAR, in that part or subpart.
    We proposed to add new VAAR sections 801.105, Issuance, and 
801.105-2, Arrangement of regulations, to explain how the VAAR is 
structured. The information follows the structure established for the 
Federal Acquisition Regulation (FAR) at 1.105 and 1.105-2.

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The VAAR is intended to supplement the FAR and must follow a similar 
structural arrangement.
    Throughout the document, sections of the VAAR have been renumbered 
and/or renamed to correspond to the FAR with no significant changes to 
the material contained therein. For instance, section 801.301-70, 
Paperwork Reduction Act requirements, has been renumbered and renamed 
as 801.106, OMB approval under the Paperwork Reduction Act, to 
correspond to the FAR.
    We proposed to add designations for the Department's Chief 
Acquisition Officer, Senior Procurement Executive (SPE), and 
Procurement Executive (which is being renamed as the Deputy Senior 
Procurement Executive (DSPE)), at 802.100, Definitions, to new section 
801.304, Agency control and compliance procedures, to delineate 
responsibilities for compliance with FAR requirements.
    We propose to amend VAAR section 801.670-5 by removing previously 
delegated authority for all officials except the Inspector General to 
enter into or issue Letters of Agreement. As a result of this proposed 
change, future acquisitions of the types of services previously 
acquired under this section (e.g., advisory and assistance services, 
peer review of research, acquisition of instructor services and 
training) will be acquired using normal acquisition methods (e.g., 
purchase orders, micro-purchases using the purchase card). The Office 
of Inspector General may continue to issue contracts using a letter 
format due to the sensitive nature of the acquisitions of that office. 
We believe this proposed amendment will simplify the acquisition 
process and consolidate acquisition functions within VA.

Subpart 803.2, Contractor Gratuities to Government Personnel

    We propose to add VAAR section 803.204 to specify the notification 
and hearing procedures we would follow before taking an action to 
terminate a contractor's right to proceed and/or initiate debarment or 
suspension measures, based on violation of the Gratuities clause. The 
proposed procedures are modeled after the proposed VAAR provisions at 
809.406-3, which set out procedures for debarment. We would make these 
changes to comply with FAR 3.204.

Subpart 803.7, Voiding and Rescinding Contracts

    We propose to add VAAR section 803.705 to specify the notification 
and hearing procedures we would follow before taking an action to void 
or rescind a contract based on final conviction for bribery or other 
offenses, as specified in FAR 3.700. The proposed procedures are 
modeled after the proposed VAAR provisions at 809.406-3, which set out 
procedures for debarment. We propose to make these changes to comply 
with FAR 3.705.

Sections 806.401 and 814.103-1

    We propose to remove provisions currently in sections 806.401 and 
814.103-1 requiring VA contracting officers to use sealed bidding 
procedures for any solicitation over the small purchase limitation and 
for any acquisition expected to exceed $1,000 for repairs of property 
under 38 United States Code (U.S.C.) Chapter 37. The FAR requires the 
use of sealed bidding if the acquisition is subject to FAR Part 6 and: 
(1) Time permits the solicitation, submission, and evaluation of sealed 
bids; (2) the award will be made on the basis of price and other price-
related factors; (3) it is not necessary to conduct discussions with 
the responding offerors about their bids; and (4) there is a reasonable 
expectation of receiving more than one sealed bid. We see no reason for 
a special VAAR rule on these matters. By proposing to remove these VAAR 
provisions, VA contracting officers would be governed by the FAR. We 
believe the FAR provisions provide sufficient guidance on when to use 
sealed bidding procedures.

Subpart 807.3, Contractor Versus Government Performance, and 852.207-
70, Report of Employment Under Commercial Activities

    We propose to amend Subpart 807.3 to remove the term 
``employee(s)'' to add in its place ``personnel'' to generally 
correspond with how the term is used in FAR Subpart 7.3 and in Office 
of Management and Budget Circular A-76.

Part 809, Contractor Qualifications

    We propose to add new section 809.204, Responsibilities for 
establishment of a qualification requirement, to provide guidance to 
contracting officers on establishing VA qualified product lists (QPL). 
Contracting officers may develop a QPL either for local use, for use in 
VA's Veterans Integrated Service Networks (VISN), or for some other 
geographical or administrative area. This is consistent with the FAR at 
Subpart 9.2.
    Under current VAAR 809.206(b)(2), a contractor must guarantee that 
he or she will deliver a product to VA if we agree to accept and test 
the product for listing on a QPL. We propose to remove this requirement 
because a guarantee in these circumstances is of no consequence since 
the terms of a contract for a product are negotiated after the listing 
of the product on a QPL. A contractor will sell its product to VA if 
the parties can agree on price and other terms and conditions.
    Under current VAAR 809.206(b)(2), when we are establishing a VA 
QPL, VA gives ``known suppliers'' of an item the chance to submit a 
sample item. However, under FAR 8.404, VA may issue a delivery order 
against a Federal Supply Schedule (FSS) contract without seeking 
further competition from firms who do not hold FSS contracts and may 
seek price reductions from FSS contractors. We propose to revise the 
text currently in 809.206(b)(2) to state that VA may limit ``known 
suppliers'' to those contractors whose products are already covered 
under an FSS contract and to redesignate the provision as 
809.204(c)(2). This proposed change would preclude requiring VA to 
duplicate a full and open competition that has already been conducted 
to establish the FSS schedule. Our proposed action is consistent with 
FAR 8.404.

Subpart 809.4, Debarment, Suspension, and Ineligibility

    Subpart 809.4 supplements provisions of the FAR concerning the 
debarment or suspension of contractors. We propose to amend the 
procedures for debarring or suspending contractors. The proposed 
procedures include the following:
    Under the proposed procedures, when the Debarment and Suspension 
(D&S) Committee finds evidence of a cause for debarment or suspension, 
it would conduct an investigation on whether or not to prepare a Notice 
of Proposal to Debar or Notice of Suspension and make a recommendation 
to the Deputy Senior Procurement Executive (DSPE).
    If the DSPE finds a basis for debarment or suspension, the D&S 
Committee would send the contractor the Notice of Proposal to Debar or 
Notice of Suspension. Pursuant to the FAR, a contractor given a Notice 
of Proposal to Debar or Notice of Suspension is excluded from 
participating in Federal procurement and non-procurement programs.
    The contractor proposed for debarment or suspended may submit 
information in person or in writing at an informal proceeding or 
otherwise. If the contractor's objections to the proposed debarment or 
suspension are based on a genuine dispute over facts material to the 
action, the dispute would be resolved in a separate preceding before a 
member of the VA Board of Contract Appeals (an informal trial type 
hearing

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under the procedures in proposed section 809.470).
    If there is no such dispute or if all disputes have been resolved, 
the debarring or suspending official will make a decision based on all 
available information.
    These proposed procedures are designed to ensure that the 
contractor is provided with an efficient and fair process before a 
decision is made on whether or not to take a debarment action or to 
continue with a suspension action.

Subpart 809.5, Organizational and Consultant Conflicts of Interest

    The VAAR currently requires that the clause at 852.209-70, 
Organizational Conflicts of Interest, be inserted in solicitations for 
consulting services. We propose to require that this clause also be 
used in solicitations for management support services, other 
professional services, contractor performance of, or assistance in, 
conducting technical evaluations; or system engineering and technical 
direction work. These are the types of services that may be subject to 
potential organizational and consultant conflicts of interest issues as 
contemplated by FAR 9.502.

Part 811, Describing Agency Needs

    We propose to relocate material from section 811.204 to a new 
proposed clause at 852.211-75, Product Specifications, without change 
for purposes of clarity.

Part 812, Acquisition of Commercial Items

    We propose to add section 812.102, Applicability, to state that 
contracts for the acquisition of commercial items are subject to the 
policies in other parts of the VAAR. However, proposed section 812.102 
notes that when a policy in another part of the VAAR differs from a 
policy in Part 812, Part 812 shall take precedence for the acquisition 
of commercial items. This proposed section is to make the VAAR 
consistent with the principles of the FAR at 12.102(c).
    We propose to remove the requirement currently at 812.301, 
Solicitation provisions and contract clauses for the acquisition of 
commercial items, which requires a contracting officer to include the 
clause at 852.219-70, Veteran-Owned Small Business, in acquisitions of 
commercial items because this requirement has been superseded by a 
similar FAR requirement at 52.212-3. In addition, we propose to make 
the use of clauses listed in proposed section 812.301, paragraphs (b) 
and (c), optional rather than mandatory in acquisitions of commercial 
items and to add the following clauses to the list of clauses in 
812.301(b) that may be used in solicitations and contracts for the 
acquisition of commercial items:

852.209-70, Organizational Conflicts of Interest.
852.211-73, Brand Name or Equal.
852.211-75, Product Specifications.
852.214-71, Restrictions on Alternate Item(s).
852.214-72, Alternate Item(s).
852.214-73, Alternate Packaging and Packing.
852.214-74, Bid Samples.
852.252-70, Solicitation Provisions or Clauses Incorporated by 
Reference.

    We believe the use of these clauses would not be inconsistent with 
commercial practices. Further, we propose to add the clause at 852.211-
74, Liquidated Damages, to proposed paragraph (c), thereby allowing the 
use of this clause if the contracting officer determines that its use 
is consistent with commercial practices. We believe that there may be 
situations where use of a liquidated damages clause would not be 
inconsistent with commercial practices, such as when failure to deliver 
supplies or perform services on a timely basis would result in 
financial harm to the Government.

Part 819, Small Business Programs

    We propose to add new section 819.202-1 to allow a contracting 
officer to prescribe a period less than the standard 30 days for paying 
a contractor, but not less than 7 days. This proposal is designed to 
assist small businesses in meeting their financial obligations and is 
consistent with the FAR requirement at 32.908(c)(2), which does not 
allow the payment period to be less than 7 days.
    We propose to remove provisions currently in section 819.502-2 that 
require contracting officers to treat certain construction and 
architect-engineering solicitations as though the Small Business 
Administration had initiated a set-aside request. These provisions are 
contrary to the provisions of FAR Subpart 19.10 and underlying 
statutory authority that provide for unrestricted competition for these 
services under the Small Business Competitiveness Demonstration 
Program.
    We propose to remove provisions currently in 819.800(d) that 
require audits to be performed on price proposals under the 8(a) 
program in excess of $500,000. This matter is covered under FAR 15.404-
2, which requires the contracting officer to request an audit only when 
the information available is inadequate to determine fair and 
reasonable price. We think that the FAR provision is adequate to 
protect the Government.
    We propose to remove paragraph (b) at section 819.7003 that 
currently requires the inclusion of the VAAR clause at 852.219-70, 
Veteran-Owned Small Business, in all solicitations because this 
requirement has been superseded by a similar FAR requirement at 52.212-
3.

Part 832, Contract Financing

    We propose to add section 832.006-4 to specify the notification and 
hearing procedures we would follow before taking an action to reduce or 
suspend payment to a contractor under FAR 32.006, Reduction or 
suspension of contract payment upon finding of fraud. We propose to 
make these changes to comply with FAR 32.006-3, which requires agencies 
to establish appropriate procedures to implement the policies and 
procedures of FAR 32.006.
    FAR 32.202-1(d) requires an agency to establish procedures for 
approving the use of unusual contract financing in commercial item 
acquisitions. We propose to establish those agency procedures in 
832.202-1 for approving the use of unusual contract financing because 
we think they are necessary for ensuring that VA's use of unusual 
contract financing or commercial advance payment is in the Government's 
best interest.
    FAR 32.202-4(a)(2) states that, subject to agency regulations, the 
contracting officer may determine that a contractor's financial 
condition constitutes adequate security for Government financing. The 
VAAR does not currently say what information a contracting officer 
should review to assist in making this determination. We propose to add 
section 832.202-4 setting forth the information a contracting officer 
should evaluate and consider in determining whether a contractor's 
financial condition constitutes adequate security. Under this proposal, 
the contracting officer should obtain any of the following: interim 
balance sheets or income statements; a cash flow forecast for the 
contract term; information on contractor financing arrangements 
disclosing available cash, credit arrangements, and financial exposure; 
tax account information; descriptions or explanations of documents 
bearing on the financial vitality of the business; a Dun and Bradstreet 
report on the company; or any other necessary financial information.

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    FAR Subpart 32.9 sets forth policies, procedures, and clauses an 
agency must follow for implementing the ``prompt payment'' provisions 
of 5 CFR 1315. FAR 32.904 sets forth the number of days following 
receipt of goods or services after which Government acceptance is 
deemed to have occurred unless certain exceptions apply. Paragraphs 
(b)(1)(ii), (c)(2), (d)(1), and (d)(2) of FAR 32.904 permit a 
contracting officer to specify a period of more than 7 days for 
accepting goods or services or more than 14 days to process progress 
payments or more than 7 days to process the final payment under a 
construction contract. We propose to add section 832.904 setting forth 
the following factors a contracting officer should consider when making 
a decision whether or not to change the payment period: (1) Recent 
interest payment history; (2) the complexity of the project; (3) 
workload; (4) work site location. We believe these proposed changes 
will assist contracting officers in making determinations that are in 
the best interest of the Government.

Part 833, Protests, Disputes, and Appeals

    The VAAR currently requires the contracting officer to suspend 
contract performance if notified by GAO of a protest within 10 days of 
award. We propose to remove this provision. This provision has been 
superseded by FAR changes at 33.104(c) which state that the contracting 
officer must suspend contract performance or terminate the awarded 
contract within 10 days after award or within 5 days after a debriefing 
date offered to a protester for any debriefing required by FAR 15.505 
or 15.506, whichever is later.
    In general, prior to passage of the Contract Disputes Act of 1978, 
as amended (41 U.S.C. 601-613), the obligation to continue contract 
performance of a contract pending a decision on a claim applied only to 
claims arising under a contract. However, that Act authorizes agencies 
to require a contractor to continue contract performance in accordance 
with the contracting officer's direction pending final decision on a 
claim relating to the contract. The FAR allows use of this authority 
only if authorized by an agency. We propose to add sections 833.213 and 
833.215 to require the use of this authority in all contracts because 
we believe this is in the best interest of the Government.
    In addition, we propose to remove a statement currently at 
833.214(c) that everything discussed at an alternative dispute 
resolution meeting is confidential. This statement is unwarranted since 
the agreement between the parties governs confidentiality and the 
agreement may provide otherwise.

Section 837.270, Special Controls for Letters of Agreement

    We propose to remove this section. This section applies to letters 
of agreement and the section addressing letters of agreement at 
801.670-5 is proposed for deletion. If 801.670-5 is deleted, there 
would be no requirement for this section.

Part 852, Solicitation Provisions and Contract Clauses

    We propose to remove section 852.219-70, Veteran-Owned Small 
Business, because this provision has been superseded by a similar FAR 
provision in FAR 52.212-3.
    We propose to revise clause 852.222-70, Contract Work-Hours and 
Safety Standards Act--Nursing Home Care Contract Supplement, to 
correspond to plain language principles, with no substantive change to 
the intent or meaning of the clause.
    We propose to update Alternates I and II of clause 852.236-89, Buy 
American Act, to correspond to changes made to FAR Part 25. Alternate I 
would apply to construction contracts valued at $7,611,532 or more, 
while Alternate II would apply to construction contracts valued between 
$6,725,000 and $7,611,531.
    We propose to revise section 852.270-1 by deleting the term 
``supervise'' and adding, in its place, ``monitor.'' This is to clarify 
that VA officials do not supervise the work of contractors.
    A number of clauses have been renumbered and/or renamed, as follows 
(if no name appears in the second column, the clause name remains 
unchanged). Only those clauses that have been renumbered or renamed are 
included in this chart. Other clauses may have been changed without 
being renumbered or renamed.

------------------------------------------------------------------------
                                          Proposed  renumbered/ renamed
     Current VAAR clause and title                      as
------------------------------------------------------------------------
852.211-71, Guarantee..................  852.246-70.
852.211-72, Rejected Goods.............  852.246-71, Inspection.
852.211-73, Frozen Processed Foods.....  852.246-72.
852.211-74, Special Notice.............  852.211-71.
852.211-75, Technical Industry           852.211-72.
 Standards.
852.211-76, Noncompliance with           852.246-73.
 Packaging, Packing, and/or Marking.
852.211-77, Brand Name or Equal........  852.211-73.
852.211-78, Liquidated Damages.........  852.211-74.
852.214-71, Alternate Item(s)..........  852.214-71, Restrictions on
                                          Alternate Item(s); 852.214-72,
                                          Alternate Item(s); and 852.214-
                                          73, Alternate Packaging and
                                          Packing.
852.214-73, Bid Samples................  852.214-74.
852.233-70 Protest Content.............  852.233-70, Protest Content/
                                          Alternative Dispute
                                          Resolution.
852.237-71, Indemnification and          852.228-71.
 Insurance.
852.246-1, Special Warranties..........  852.246-74.
852.246-2, Warranty for Construction-    852.246-75.
 Guarantee Period Services.
852.252-1, Provisions or Clauses that    852.252-70, Solicitation
 Require Completion by the Offeror or     Provisions or Clauses
 Prospective Contractor.                  Incorporated by Reference.
852.270-4, Commercial Advertising......  852.203-70.
852.271-71, Inspection.................  852.271-74.
------------------------------------------------------------------------

    The proposed clause content of these clauses remain unchanged with 
the exception of 852.233-70, Protest Content/Alternative Dispute 
Resolution, where paragraph (c) is proposed to be added to encourage 
the use of alternative dispute resolution procedures, as provided in 
FAR 33.103(c), and clauses 852.271-71, Inspection, and 852.271-74, 
Inspection, which are proposed to be combined into one clause for 
simplicity.

[[Page 2346]]

Part 873, Simplified Acquisition Procedures for Health-Care Resources

    No substantive changes have been made to VAAR Part 873.

Executive Order 12866

    The Office of Management and Budget has reviewed this document 
under Executive Order 12866.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in an expenditure by 
State, local, or tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any given year. This proposed rule would have no such 
effect on State, local, or tribal governments, or the private sector.

Paperwork Reduction Act

    Under the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-
3521), proposed collections of information are contained in Part 832 at 
sections 832.006-4 and 832.202-4, as set forth in the SUPPLEMENTARY 
INFORMATION portion of this proposed rule. These are proposed new 
sections that were not previously contained in the VAAR. This notice is 
to obtain an Office of Management and Budget (OMB) control number for 
these sections. As required under section 3507(d) of the Act, VA has 
submitted a copy of this proposed rulemaking action to OMB for its 
review of the collection of information.
    There are two other proposed new sections in this proposed rule 
that could potentially require the collection of information from 
contractors, section 803.204, Treatment of violations, and section 
832.705, Procedures. These sections provide agency procedures for 
taking action against a contractor for violation of the Gratuities 
clause (see proposed 803.204) or action to void or rescind a contract 
for violation of 18 U.S.C. 201-224, all as required by the FAR. VA has 
not taken any action under the two corresponding sections of the FAR in 
the past several years and there is no likelihood that VA will annually 
require the collection of information from 10 or more contractors under 
these provisions in the future. Therefore, these provisions are exempt 
from the PRA and VA is not requesting PRA approval from OMB for these 
provisions.
    OMB assigns control numbers to collections of information it 
approves. VA may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number.
    Comments on the collection of information should be submitted to 
the Office of Management and Budget, Attention: Desk Officer for the 
Department of Veterans Affairs, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, DC 20503, with 
copies to the Director, Regulations Management (00REG1), Department of 
Veterans Affairs, 810 Vermont Ave., NW., Washington, DC 20420. Comments 
should indicate that they are submitted in response to ``RIN 2900-
AK78.''
    Title and section number: 832.006-4, Procedures.
    Summary of collection of information: FAR 32.006 authorizes 
agencies to reduce or suspend contract payments upon finding of fraud. 
FAR 32.006-3(a) requires agencies to establish appropriate procedures 
to implement the policies and procedures of section 32.006. VA is 
proposing to establish such procedures under section 832.006-4. In 
order to provide contractors due process when there has been a finding 
of fraud and when, as a result, VA is proposing to reduce or suspend 
contract payments, VA must give the contractor notice of that intent 
and allow the contractor to submit information or argument in 
opposition to the proposed action.
    Description of need for information and proposed use of 
information: The information will be used by the VA Senior Procurement 
Executive (the Assistant Secretary for Management) in making a final 
determination whether or not to reduce or suspend payment under the 
contract. Submission of this information is voluntary and the 
collection of the information is intended to give contractors the 
opportunity to rebut a proposed decision to suspend contract payments.
    Description of likely respondents: Entities who have contracts with 
VA where there has been a finding of fraud on the part of the 
contractor.
    Estimated number of respondents: 10.
    Estimated frequency of responses: 1 response for each contract 
under which there has been a finding of fraud.
    Estimated average burden per collection: 5 hours.
    Estimated total annual reporting and recordkeeping burden: 50 
hours.
    Title and section number: 832.202-4, Security for Government 
financing.
    Summary of collection of information: FAR Subpart 32.2 authorizes 
the use of certain types of Government financing on commercial item 
purchases. 41 U.S.C. 255(f) requires the Government to obtain adequate 
security for Government financing. However, FAR 32.202-4(a)(2) provides 
that, subject to agency regulations, the contracting officer may 
determine that an offeror's financial condition is adequate security. 
VA is proposing to issue agency regulations specifying the type of 
information that the contracting officer should gather to assist the 
contracting officer in making a determination whether or not an 
offeror's financial condition constitutes adequate security.
    Description of need for information and proposed use of 
information: The information will be used by the contracting officer to 
assist in making a determination whether or not the offeror's financial 
condition is adequate security to permit Government financing of the 
commercial purchase. Submission of this information is voluntary and 
collection of this information is intended to give contractors an 
opportunity to show that their financial condition is adequate security 
for Government financing.
    Description of likely respondents: Offerors that request or require 
commercial item purchase financing (e.g., commercial interim payments, 
commercial advance payment) on commercial item acquisitions where the 
value of the acquisition exceeds $100,000.
    Estimated number of respondents: 10.
    Estimated frequency of responses: 1 per offer.
    Estimated average burden per collection: 1 hour.
    Estimated total annual reporting and recordkeeping burden: 10 
hours.
    The Department considers comments by the public on proposed 
collections of information in--
     Evaluating whether the proposed collections of information 
are necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
     Evaluating the accuracy of the Department's estimate of 
the burden of the proposed collections of information, including the 
validity of the methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collections of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    OMB is required to make a decision concerning the proposed 
collection of

[[Page 2347]]

information contained in this proposed rule between 30 and 60 days 
after publication of this document in the Federal Register. Therefore, 
a comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment on the proposed regulation.

Regulatory Flexibility Act

    When an agency issues a rulemaking proposal, the Regulatory 
Flexibility Act (RFA) requires the agency to ``prepare and make 
available for public comment an initial regulatory flexibility 
analysis'' which will ``describe the impact of the proposed rule on 
small entities.'' (5 U.S.C. 603(a)). Section 605 of the RFA allows an 
agency to certify a rule, in lieu of preparing an analysis, if the 
proposed rulemaking is not expected to have a significant economic 
impact on a substantial number of small entities.
    The Secretary certifies that the adoption of this proposed rule 
would not have a significant economic impact on a substantial number of 
small entities as they are defined in the RFA. The primary purpose of 
this document is to update the existing VAAR to correspond to FAR 
requirements and internal VA policy and to conform to plain language 
principles. Many of the changes are internal to VA and do not impact 
the public, do not impose any requirements on the public, and thus do 
not have an economic impact on small entities. The changes that do 
impact the public are of minimal impact.
    The addition of procedures for contractor hearings relative to: (1) 
Violation of the Gratuities clause (section 803.204); (2) voiding or 
rescinding a contract (section 803.705); and (3) reducing or suspending 
payment due to fraud (section 832.006-4) only supplement authorities 
that are already in the FAR and that are rarely used by VA. They do not 
add any new authorities that VA could not have exercised under the FAR 
before issuance of this proposed rule and VA has not taken any action 
under these authorities against small entities over the past several 
years. Few, if any, actions are expected to be taken in the future. 
Thus, there is no impact on a substantial number of small entities.
    The changes to Subpart 809.4 relative to suspension and debarment 
are changes to form and not to substance. The basic procedures remain 
unchanged and there is no change on the impact to small businesses.
    The change to 819.202-1 relative to granting small businesses 
improved payment terms on contracts is not a new authority, but the 
VAAR lacked guidance on how to exercise this authority. Title 5 CFR 
1315.5 already authorizes agencies to pay small businesses as quickly 
as possible. This change may encourage VA contracting officers to use 
this authority more often, but the impact of this provision on small 
business would be both minimal and entirely beneficial. With the advent 
of purchase cards, small businesses that accept the cards already 
receive payment within a matter of a few days following their 
submission of a request for payment to VISA. This proposed rule 
provision would have no impact on small businesses that accept the 
purchase card.
    The proposed rule would remove a current provision in section 
819.502-2 mandating that certain solicitations be treated as though SBA 
initiated a set-aside request. This provision is inconsistent with the 
requirements in FAR subpart 19.10 implementing the Small Business 
Competitiveness Demonstration Program of 1988, Public Law 100-656 
(codified as amended at 15 U.S.C. 644 note). Those authorities require 
that competition for procurement contracts relating to construction and 
A/E services be unrestricted. Because Public Law 100-656 and FAR 
subpart 19.10 already prohibit VA from inferring a set-aside request in 
the circumstances specified in VAAR 819.502-2, the removal of that 
superseded provision will not have any effect on small entities.
    Adoption of the proposed rule changes in sections 803.204, 803.705, 
and 832.006-4 would not impose more than minimal costs on any small 
entities, as VA has not taken action under the corresponding FAR 
provisions over the past several years and we do not expect to take 
many, if any, actions in future years. The positive financial benefit 
to small entities of the proposed change to 819.202-1 is also 
considered to be minimal. The authority to expedite payments already 
exists under the FAR and we expect few additional cases where this 
authority will be used as a result of the proposed addition of these 
provisions to the VAAR. Even where there are additional uses of this 
authority, the financial benefit to small entities of expedited payment 
is expected to be minimal. Therefore, under 5 U.S.C. 605(b), this 
amendment is exempt from the initial and final regulatory flexibility 
analysis requirements of sections 603 and 604.

List of Subjects

48 CFR Parts 801, 809, 811, 836, and 852

    Government procurement, Recordkeeping and reporting requirements.

48 CFR Parts 802, 804, 805, 806, 807, 808, 812, 813, 814, 815, 816, 
817, 824, 832, 837, 846, 849, 853, and 873

    Government procurement.

48 CFR Part 803

    Antitrust, Conflicts of interest, Government procurement.

48 CFR Part 819

    Administrative practice and procedure, Government procurement, 
Recordkeeping and reporting requirements, Small business, Veterans.

48 CFR Part 822

    Government procurement, Labor.

48 CFR Part 825

    Foreign currencies, Foreign trade, Government procurement.

48 CFR Part 828

    Government procurement, Insurance, Surety bonds.

48 CFR Part 829

    Government procurement, Taxes.

48 CFR Parts 831 and 842

    Accounting, Government procurement.

48 CFR Part 833

    Administrative practice and procedure, Government procurement.

48 CFR Part 841

    Government procurement, Utilities.

48 CFR Part 847

    Government procurement, Transportation.

48 CFR Part 870

    Asbestos, Frozen foods, Government procurement, Telecommunications.

48 CFR Part 871

    Government procurement, Loan programs-social programs, Loan 
programs-veterans, Recordkeeping and reporting requirements, Vocational 
rehabilitation.

    Approved: May 10, 2005.
R. James Nicholson,
Secretary of Veterans Affairs.

    Editorial Note: This document was received at the Office of the 
Federal Register on December 21, 2005.


[[Page 2348]]


    For the reasons set out in the preamble, 48 CFR Chapter 8 is 
proposed to be revised to read as follows:

CHAPTER 8--DEPARTMENT OF VETERANS AFFAIRS

SUBCHAPTER A--GENERAL

Part
801 Department of Veterans Affairs Acquisition Regulations Systems.
802 Definitions of words and terms.
803 Improper business practices and personal conflicts of interest.
804 Administrative matters.

SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING

805 Publicizing contract actions.
806 Competition requirements.
807 Acquisition planning.
808 Required sources of supplies and services.
809 Contractor qualifications.
811 Describing agency needs.
812 Acquisition of commercial items.

SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES

813 Simplified acquisition procedures.
814 Sealed bidding.
815 Contracting by negotiation.
816 Types of contracts.
817 Special contracting methods.

SUBCHAPTER D--SOCIOECONOMIC PROGRAMS

819 Small business programs.
822 Application of labor laws to Government acquisitions.
823 Environment, energy and water efficiency, renewable energy 
technologies, occupational safety, and drug-free workplace.
824 Protection of privacy and freedom of information.
825 Foreign acquisition.
826 Other socioeconomic programs.

SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS

828 Bonds and insurance.
829 Taxes.
830 Cost accounting standards administration.
831 Contract cost principles and procedures.
832 Contract financing.
833 Protests, disputes, and appeals.

SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING

836 Construction and architect-engineer contracts.
837 Service contracting.
839 Acquisition of information technology.
841 Acquisition of utility services.

SUBCHAPTER G--CONTRACT MANAGEMENT

842 Contract administration and audit services.
843 Contract modifications.
844 Subcontracting policies and procedures.
846 Quality assurance.
847 Transportation.
849 Termination of contracts.

SUBCHAPTER H--CLAUSES AND FORMS

852 Solicitation provisions and contract clauses.
853 Forms.

SUBCHAPTER I--DEPARTMENT SUPPLEMENTARY REGULATIONS

870 Special procurement controls.
871 Loan guaranty and vocational rehabilitation and employment 
programs.
872 [Reserved].
873 Simplified acquisition procedures for health-care resources.

Subchapter A--General

PART 801--DEPARTMENT OF VETERANS AFFAIRS ACQUISITION REGULATIONS 
SYSTEM

Sec.
801.000 Scope of part.
Subpart 801.1--Purpose, Authority, Issuance
801.101 Purpose.
801.103 Authority.
801.104 Applicability.
801.104-70 Exclusions.
801.105 Issuance.
801.105-2 Arrangement of regulations.
801.106 OMB approval under the Paperwork Reduction Act.
Subpart 801.2-- Administration
801.201 Maintenance of the FAR.
801.201-1 The two councils.
Subpart 801.3--Department Acquisition Regulations
801.304 Department control and compliance procedures.
Subpart 801.4--Deviations From the FAR or VAAR
801.403 Individual deviations.
801.404 Class deviations.
Subpart 801.6--Career Development, Contracting Authority, and 
Responsibilities
801.601 General.
801.602 Contracting officers.
801.602-3 Ratification of unauthorized commitments.
801.602-70 General review requirements.
801.602-71 Basic review requirements.
801.602-72 Exceptions and additional review requirements.
801.602-73 Review requirements for scarce medical specialist 
contracts and contracts for health-care resources.
801.602-74 Review requirements for an interagency agreement.
801.602-75 Review requirements--OGC.
801.602-76 Business clearance review.
801.602-77 Processing solicitations and contract documents for legal 
or technical review--general.
801.602-78 Processing solicitations and contract documents for legal 
or technical review--Veterans Health Administration field 
facilities, Central Office (except Office of Facilities Management), 
the National Acquisition Center, and the Denver Distribution Center.
801.602-79 Processing solicitations and contract documents for legal 
or technical review--Veterans Benefits Administration.
801.602-80 Processing solicitations and contract documents for legal 
or technical review--Office of Facilities Management.
801.602-81 Documents required for business clearance reviews.
801.602-82 Documents to submit for legal or technical review--
general.
801.602-83 Documents to submit for legal or technical review--
contract modifications.
801.602-84 Documents to submit for business clearance reviews.
801.602-85 Results of OGC's review.
801.603 Selection, appointment, and termination of appointment.
801.603-1 General.
801.603-70 Representatives of contracting officers.
801.603-71 Representatives of contracting officers; receipt of 
equipment, supplies, and nonpersonal services.
801.670 Special and limited delegation.
801.670-1 Issuing bills of lading.
801.670-3 Medical, dental, and ancillary service.
801.670-4 National Cemetery Administration.
801.670-5 Letters of agreement.
801.680 Contracting authority of the Inspector General.
801.690 VA's COCP.
801.690-1 Definitions.
801.690-2 General.
801.690-3 Responsibility under the COCP.
801.690-4 Selection.
801.690-5 Requirements for contracting authority.
801.690-6 Appointment.
801.690-7 Termination.
801.690-8 Interim appointment provisions.
801.690-9 Distribution of Certificates of Appointment.
801.695 VA's Appointment of HCAs program.
801.695-1 Policy.
801.695-2 Procedures for appointment of HCAs.
801.695-3 Authority of the HCA.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.


801.000  Scope of part.

    This part sets out general Department of Veterans Affairs (VA) 
Acquisition Regulation (VAAR) policies, including information regarding 
the maintenance and administration of the VAAR, acquisition policies 
and practices, and procedures for deviation from the VAAR and the 
Federal Acquisition Regulation (FAR).

Subpart 801.1--Purpose, Authority, Issuance


801.101  Purpose.

    (a) VA established the VAAR to codify and publish uniform policies 
and

[[Page 2349]]

procedures for VA's acquisition of supplies and services, including 
construction.
    (b) The VAAR implements and supplements the FAR.


801.103  Authority.

    The Secretary issues the VAAR under the authority of 40 U.S.C. 
121(c), Title 48 of the Code of Federal Regulations (CFR) 1.301 through 
1.304, and other authorities as cited.


801.104  Applicability.

    (a) Unless otherwise specified in this chapter or excepted by 
statute (i.e., expenditures of the VA Canteen Service) or other VA 
regulations, the FAR and VAAR apply to all VA acquisitions (including 
construction) made with appropriated funds. Supply Fund monies (38 
U.S.C. 8121) and General Post Funds (38 U.S.C. 8302) are appropriated 
funds.
    (b) Use the VAAR and the FAR together. The FAR applies to VA 
acquisitions except as provided in the VAAR.


801.104-70  Exclusions.

    The FAR and VAAR do not apply to purchases and contracts that use 
General Post Funds if using the FAR and the VAAR would infringe upon a 
donor's right to specify the exact item to be purchased and/or the 
source of supply (38 U.S.C. 8303).


801.105  Issuance.


801.105-2  Arrangement of regulations.

    (a) General. The VAAR is divided into subchapters, parts (each of 
which covers a separate aspect of acquisition), subparts, sections, and 
subsections.
    (b) Numbering. (1) The numbering system permits the discrete 
identification of every VAAR paragraph. The digits to the left of the 
decimal point represent the part number. The numbers to the right of 
the decimal point and to the left of the dash represent, in order, the 
subpart (one or two digits), and the section (two digits). The number 
to the right of the dash represents the subsection. Subdivisions may be 
used at the section and subsection level to identify individual 
paragraphs.
    (2) Subdivisions below the section or subsection level consist of 
parenthetical alphanumerics using the following sequence: 
(a)(1)(i)(A)(1)(i)
    (c) References and citations. (1) Unless otherwise stated, cross-
references indicate parts, subparts, sections, subsections, paragraphs, 
subparagraphs, or subdivisions of this chapter.
    (2) This chapter may be referred to as the Department of Veterans 
Affairs Acquisition Regulation or the VAAR.
    (3) Using the VAAR coverage at 809.106-4(c) as a typical 
illustration, reference to the--
    (i) Part would be ``VAAR Part 809'' outside the VAAR and ``Part 
809'' within the VAAR.
    (ii) Subpart would be ``VAAR Subpart 809.1'' outside the VAAR and 
``Subpart 809.1'' within the VAAR.
    (iii) Section would be ``VAAR 809.106'' outside the VAAR and 
``809.106'' within the VAAR.
    (iv) Subsection would be ``VAAR 809.106-4'' outside the VAAR and 
``809.106-4'' within the VAAR.
    (v) Paragraph would be ``VAAR 809.106-4(c)'' outside the VAAR and 
``809.106-4(c)'' within the VAAR
    (4) Citations of authority (e.g., statutes or Executive orders) in 
the VAAR shall follow the Federal Register form guides.


801.106  OMB approval under the Paperwork Reduction Act.

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3521), the Office of Management and Budget (OMB) has approved the 
reporting and recordkeeping provisions that are included in the VAAR 
and has given VA the following approval numbers:

------------------------------------------------------------------------
                                                             Current OMB
   48 CFR part or section where identified and described     control No.
------------------------------------------------------------------------
809.106-1..................................................    2900-0418
809.504(d).................................................    2900-0418
813........................................................    2900-0393
832.006-4..................................................    2900-xxxx
832.202-4..................................................    2900-xxxx
836.606-71.................................................    2900-0208
852.207-70.................................................    2900-0590
852.209-70.................................................    2900-0418
852.211-70.................................................    2900-0587
852.211-71.................................................    2900-0588
852.211-72.................................................    2900-0586
852.211-73.................................................    2900-0585
852.214-70.................................................    2900-0593
852.228-71.................................................    2900-0590
852.236-72.................................................    2900-0422
852.236-79.................................................    2900-0208
852.236-80 (Alt. I)........................................    2900-0422
852.236-82 through 852.236-84..............................    2900-0422
852.236-88.................................................    2900-0422
852.236-89.................................................    2900-0622
852.236-91.................................................    2900-0623
852.237-7..................................................    2900-0590
852.270-3..................................................    2900-0589
------------------------------------------------------------------------

Subpart 801.2--Administration


801.201  Maintenance of the FAR.


801.201-1  The two councils.

    Revisions to the FAR are prepared and issued through the 
coordinated action of two councils, the Defense Acquisition Regulations 
Council and the Civilian Agency Acquisition Council. A designee of the 
Office of Management will represent VA on the Civilian Agency 
Acquisition Council.

Subpart 801.3--Department Acquisition Regulations


801.304  Department control and compliance procedures.

    The Assistant Secretary for Management is designated as the 
Department's Chief Acquisition Officer and Senior Procurement Executive 
(SPE). The Deputy Assistant Secretary for Acquisition and Materiel 
Management is designated as the Department's Deputy Senior Procurement 
Executive (DSPE). The DSPE is responsible for review of the VAAR and 
amendments to the VAAR for compliance with FAR 1.304.

Subpart 801.4--Deviations From the FAR or VAAR


801.403  Individual deviations.

    (a) Authority to authorize individual deviations from the FAR and 
VAAR is delegated to the SPE and is further delegated to the DSPE.
    (b) When a contracting officer considers it necessary to deviate 
from the policies in the FAR or VAAR, the contracting officer must 
submit a request to the DSPE for authority to deviate.
    (c) The request to deviate must clearly state the circumstances 
warranting the deviation and the nature of the deviation. The head of 
the contracting activity (HCA) must sign the request.
    (d) The DSPE may authorize individual deviations from the FAR and 
VAAR when an individual deviation is in the best interest of the 
Government. When the DSPE authorizes a deviation, the contracting 
officer must file the authorization in the purchase order or contract 
file.


801.404  Class deviations.

    Authority to authorize class deviations from the FAR and VAAR is 
delegated to the SPE and is further delegated to the DSPE. The DSPE may 
authorize class deviations from the FAR and VAAR when a class deviation 
is in the best interest of the Government. The DSPE must comply with 
the provisions of FAR 1.404 through the SPE.

[[Page 2350]]

Subpart 801.6--Career Development, Contracting Authority, and 
Responsibilities


801.601  General.

    (a) A designating official may appoint a contracting officer under 
FAR 1.603 and VA's Contracting Officer Certification Program (COCP).
    (b) The HCA may delegate micro-purchase authority to VA employees 
under the VA's purchase card program.
    (c) An individual may not commit the Government for purchases of 
supplies, equipment, or services unless the individual has received 
delegated contracting authority. Individuals making such commitments or 
acting beyond the scope of their authority may be held financially 
liable.


801.602  Contracting officers.

    (a) Except as otherwise provided by statute, VA regulations, the 
VAAR, or the FAR, the authority vested in the Secretary to do the 
following is delegated to the SPE and is further delegated from the SPE 
to the DSPE:
    (1) Execute, award, and administer contracts, purchase orders, and 
other agreements (including interagency agreements) for the expenditure 
of funds for construction and the acquisition of personal property and 
services (including architect-engineer services).
    (2) Issue bills of lading.
    (3) Sell personal property.
    (4) Enter into leases, sales agreements, and other transactions.
    (5) Prescribe and publish acquisition policies and procedures.
    (6) Establish clear lines of contracting authority.
    (7) Manage and enhance career development of the procurement work 
force.
    (8) Examine, in coordination with the Office of Federal Procurement 
Policy, the procurement system to determine specific areas where VA 
should establish and apply Government-wide performance standards, and 
to participate in developing Government-wide procurement policies, 
regulations, and standards.
    (9) Oversee the competition advocate program.
    (b) The DSPE may further delegate authority to execute, award, and 
administer contracts, purchase orders, and other agreements to other VA 
officials, such as HCAs and contracting officers, in accordance with 
the COCP.


801.602-3  Ratification of unauthorized commitments.

    (a) This section applies to unauthorized commitments, including any 
commitment made by a contracting officer that exceeds that contracting 
officer's contracting authority and unauthorized commitments made by 
individuals who lack contracting authority.
    (b) A contracting officer must not ratify unauthorized commitments 
made by other VA personnel or by another contracting officer who lacks 
authority without prior approval as specified in paragraphs (b)(1) 
through (b)(3) of this section. The specified approval authorities may 
not be re-delegated.
    (1) At field facilities, for supplies, services (except leases of 
real property), and construction, the approving authority for 
unauthorized commitments made by staff assigned to a field facility is 
the Director of the field facility concerned.
    (2) For VA Central Office (VACO) organizations, for supplies, 
services (except leases of real property), and construction, the 
approving authorities for unauthorized commitments made by staff 
assigned to the Administrations are the respective chief financial 
officers of the Administrations concerned. The approving authority for 
unauthorized commitments made by staff assigned to any other 
organization within VACO is the Deputy Assistant Secretary for 
Acquisition and Materiel Management.
    (3) For unauthorized commitments for leasehold interest in real 
property, the approving authority is:
    (i) The Chief Facilities Management Officer, Office of Facilities 
Management, for unauthorized commitments for 1-5,000 square feet of 
space or for 1-100 parking spaces costing less than $50,000 per annum.
    (ii) The Under Secretary for Health for unauthorized commitments 
for 5,001-20,000 square feet of space or for more than 100 parking 
spaces costing less than $100,000 per annum.
    (iii) The Deputy Secretary for 20,001 square feet of space and 
above or for more than 100 parking spaces costing more than $100,000 
per annum.
    (c) The process for contracting officer requests for ratification 
will be as follows:
    (1) The individual who made the unauthorized commitment will 
furnish the contracting officer with all records and documents 
concerning the commitment and a complete written statement of facts 
that includes the following:
    (i) Why the procurement office was not used.
    (ii) Why the proposed contractor was selected.
    (iii) Other sources that were considered.
    (iv) A description of work to be performed or products to be 
furnished.
    (v) The estimated or agreed contract price.
    (vi) A citation of the appropriation available.
    (vii) A statement of whether the contractor has commenced 
performance.
    (viii) The name of the individual responsible for the unauthorized 
commitment.
    (2) The contracting officer will review the file and forward it to 
the approving authority specified in paragraph (b) of this section with 
any comments or information that the approving authority should 
consider in evaluating the request for ratification. If the approving 
authority determines that a legal review would be desirable, the 
approving authority will coordinate the request for ratification with 
the Office of the General Counsel (OGC) or the Regional Counsel, as 
appropriate.
    (3) If the approving authority authorizes the ratification, the 
approving authority will return the file to the contracting officer for 
issuance of a purchase order or contract, as appropriate.
    (d) If an otherwise proper contract award exceeds the limits of the 
contracting officer's delegated authority, the ratifying contracting 
officer must comply with the above requirements and the approving 
authority must inform the HCA. The HCA will take action to preclude 
future instances of such awards.


801.602-70  General review requirements.

    (a) Contracting officers shall ensure that any document listed 
under 801.602-71 through 801.602-76 that is submitted for technical or 
legal review is submitted through or by an official at least one level 
above the contracting officer.
    (b) Before opening a bid, awarding a contract, or signing a 
contract-related document as specified in 801.602-71 through 801.602-
76, the contracting officer shall ensure that the appropriate VA 
official, including appropriate staff of the Acquisition Resources 
Service regional or central office, has reviewed and concurred with the 
document.
    (c) Before signing a contract for a Veterans Benefits 
Administration field facility for any guidance center or vocational 
rehabilitation service with an anticipated expenditure of $100,000 or 
more, the contracting officer shall ensure that the Director, 
Vocational Rehabilitation and Employment Service, has reviewed and 
approved the solicitation or proposed contract.
    (d) When the following items are for the management, sale, or lease 
of properties acquired by VA after liquidation of a guaranteed, direct,

[[Page 2351]]

acquired, or vendee loan, the review requirements specified in 801.602-
71 through 801.602-76 do not apply:
    (1) Agreements.
    (2) Licenses.
    (3) Easements.
    (4) Deeds.
    (e) If there is insufficient time for the legal review required in 
801.602-75(a)(3), the contracting officer (except contracting officers 
in the Office of Facilities Management) must at least obtain verbal 
concurrence from Acquisition Resources Service staff before issuing a 
change order where:
    (1) The change order (unilateral agreement) has an anticipated 
value of $100,000 or more; or
    (2) The change order is for a time extension of 60 days or more.
    (f) Unless otherwise stated, all dollar values in 801.602-71 
through 801.602-76 are expressed in total dollars involved in the 
acquisition action.
    (1) The contracting officer may not consider the positive and 
negative status of the figures in determining the total dollar values 
involved.
    (2) An acquisition of $550,000 with a trade-in credit of $70,000 
would be valued at $620,000 for legal or technical review purposes 
rather than the net amount of $480,000. An Energy Savings Performance 
Contract requiring payment from savings of $10,000,000 to the 
contractor over the life of the contract would be valued at 
$10,000,000, despite the fact that there is no immediate cost to VA and 
no payment if there are no savings.
    (g) The DSPE may require technical review of any contract-related 
materials, regardless of dollar value.
    (h) Except as set forth in 801.602-73 and 801.602-75, at its 
discretion, the Office of Acquisition and Materiel Management may 
request OGC review.
    (i) The requirements of this section or sections 801.602-71 through 
801.602-76 do not apply to contracts awarded by or on behalf of the VA 
Office of Inspector General.
    (j) Contracting officers and purchase cardholders must ensure 
compliance with separate guidance on information technology (IT) 
tracking and approval prior to processing requests for acquisitions of 
IT and telecommunications software, equipment, and/or services, 
regardless of dollar value.


801.602-71  Basic review requirements.

    Contracting officers must obtain technical review from Acquisition 
Resources Service staff of the documents set forth in column one of 
Table 801.602-71 that have anticipated award values equal to or greater 
than the value in column two.

                            Table 801.602-71
-----------------------------------------------------------