Federal Acquisition Regulation; FAR Case 2005-037, Implement OMB Policy on the Use of Brand Name Specifications, 57357-57360 [06-8200]
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Federal Register / Vol. 71, No. 188 / Thursday, September 28, 2006 / Rules and Regulations
$3,000, because the simplified
acquisition threshold will not be raised
at this time. Other frequently used
thresholds that are adjusted include—
• The FPDS reporting threshold (FAR
4.602(c)) will be raised from $2,500 to
$3,000.
• Commercial Items test program
ceiling (FAR 13.500) will be raised from
$5,000,000 to $5,500,000.
• The cost and pricing data threshold
(FAR 15.403-4) will be raised from
$550,000 to $650,000.
The prime contractor subcontracting
plan (FAR 19.702) floor will be raised
from $500,000 to $550,000, but for
construction ($1,000,000) is unchanged.
Item V—Trade Agreements–Thresholds
(FAR Case 2005-030)
This final rule converts the interim
rule published at 71 FR 864, January 5,
2006, to a final rule without change.
This rule changes the thresholds for
application of the World Trade
Organization Government Procurement
Agreement and the other Free Trade
Agreements with Canada, Mexico,
Chile, Singapore, and Australia. These
threshold increases occur every two
years in order to keep pace with
inflation.
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Item VI—Reporting of Purchases from
Overseas Sources (Interim) (FAR Case
2005-034)
This interim rule amends FAR Part 25
and adds a provision in FAR 52.225 to
implement Section 837 of Division A of
the Transportation, Treasury, Housing
and Urban Development, the Judiciary,
the District of Columbia, and
Independent Agencies Appropriations
Act, 2006 (Pub. L. 109-115). Section 837
requires the head of each Federal agency
to submit a report to Congress relating
to acquisitions of articles, materials, or
supplies that are manufactured outside
the United States. The new provision
requests from offerors necessary data
regarding place of manufacture. The
new provisions will require an offeror to
indicate whether the place of
manufacture of the end products it
expects to provide in response to the
solicitation is predominantly inside or
outside the United States. Whenever the
place of manufacture for a contract is
coded outside the United States, the
contracting officer will be required to
enter into Federal Procurement Data
System (FPDS) the reason for buying
items manufactured outside the United
States.
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Item VII—Exception to the Buy
American Act for Commercial
Information Technology (FAR Case
2005-022)
Dated: September 19, 2006.
Ralph De Stefano,
Director, Contract Policy Division.
This final rule converts the interim
rule published at 71 FR 223, January 3,
2006, to a final rule without change.
This final rule amends FAR 25.103 and
Subpart 25.11 to implement Section
535(a) of Division F of the Consolidated
Appropriations Act, 2004, and similar
sections in subsequent appropriations
acts. Section 535(a) authorizes an
exception to the Buy American Act for
acquisitions of information technology
that are commercial items. The final
rule applies to all offerors responding to
solicitations for commercial information
technology where the Buy American Act
previously applied (generally,
acquisitions between the micropurchase threshold and $193,000). The
effect of this exemption is that the
following clauses are no longer
applicable in acquisition of commercial
information technology:
• FAR 52.225-1, Buy American Act–
Supplies,
• FAR 52.225-2, Buy American Act
Certificate,
• FAR 52.225-3, Buy American Act–
Free Trade Agreements–Israeli Trade
Act,
• FAR 52.225-4, Buy American Act–
Free Trade Agreements–Israeli Trade
Act Certificate.
This is because the Buy American Act
no longer applies. The Free Trade
Agreement non-discriminatory
provisions are no longer necessary since
all products now are treated without the
restrictions of the Buy American Act.
The Trade Agreements provision and
clause at FAR 52.225–5 and FAR
52.225–6 are still necessary when the
Trade Agreements Act applies
(acquisitions above $193,000). The
Trade Agreements provision and clause
already waive applicability of the Buy
American Act for eligible products and
are needed to implement the restrictions
on procurement of noneligible end
products. Section 535 and subsequent
similar sections waived only the Buy
American Act, not all restrictions on the
purchase of foreign information
technology.
Federal Acquisition Circular (FAC)
2005-13 is issued under the authority of
the Secretary of Defense, the
Administrator of General Services, and
the Administrator for the National
Aeronautics and Space Administration.
Unless otherwise specified, all
Federal Acquisition Regulation (FAR)
and other directive material contained
in FAC 2005-13 is effective September
28, 2006.
Item VIII—Technical Amendments
Editorial changes are made at FAR 1,
3, 4, 5, 7, 13, 26, 33, 49, 50, 52, and 53
in order to update references.
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Federal Acquisition Circular
Dated: September 19, 2006.
Roger D. Waldron,
Acting Senior Procurement Executive,
General Services Administration.
Dated: September 8, 2006.
Shay D. Assad,
Director, Defense Procurement and
Acquisition Policy.
Dated: September 12, 2006.
Thomas Luedtke,
Assistant Administrator for Procurement,
National Aeronautics and Space
Administration.
[FR Doc. 06–8199 Filed 9–27–06; 8:45 am]
BILLING CODE 6820–EP–S
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 5, 6, 8, 11, and 13
[FAC 2005–13; FAR Case 2005–037; Item
I; Docket 2006–0020, Sequence 10]
RIN 9000–AK55
Federal Acquisition Regulation; FAR
Case 2005–037, Implement OMB Policy
on the Use of Brand Name
Specifications
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Interim rule with request for
comments.
AGENCIES:
SUMMARY: The Civilian Agency
Acquisition Council and the Defense
Acquisition Regulations Council
(Councils) have agreed to amend the
Federal Acquisition Regulation (FAR) to
require agencies to publish on the
Governmentwide point of entry (GPE) or
e-Buy the documentation required by
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Federal Register / Vol. 71, No. 188 / Thursday, September 28, 2006 / Rules and Regulations
the FAR to support the use of brand
name specifications.
DATES: Effective Date: September 28,
2006.
Comment Date: Interested parties
should submit written comments to the
FAR Secretariat on or before November
27, 2006 to be considered in the
formulation of a final rule.
ADDRESSES: Submit comments
identified by FAC 2005–13, FAR case
2005–037, by any of the following
methods:
• Federal eRulemaking Portal:
https://www.regulations.gov. Search
for this document at the ‘‘Federal
Acquisition Regulation’’ agency and
review the ‘‘Document Title’’ column;
click on the Document ID number. Click
on ‘‘Add Comments’’.
You may also search for any
document using the ‘‘Advanced search/
document search’’ tab, selecting from
the agency field ‘‘Federal Acquisition
Regulation’’, and typing the FAR case
number in the keyword field.
• Fax: 202–501–4067.
• Mail: General Services
Administration, Regulatory Secretariat
(VIR), 1800 F Street, NW, Room 4035,
ATTN: Laurieann Duarte, Washington,
DC 20405.
Instructions: Please submit comments
only and cite FAC 2005–13, FAR case
2005–037, in all correspondence related
to this case. All comments received will
be posted without change to https://
www.regulations.gov, including any
personal and/or business confidential
information provided.
FOR FURTHER INFORMATION CONTACT For
clarification of content, contact Ms.
Cecelia L. Davis, Procurement Analyst,
at (202) 219–0202. Please cite FAC
2005–13, FAR case 2005–037. For
information pertaining to status or
publication schedules, contact the FAR
Secretariat at (202) 501–4755.
SUPPLEMENTARY INFORMATION:
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A. Background
On April 11, 2005, the Office of
Management and Budget (OMB) issued
a memorandum on the use of brand
name specifications to reinforce the
need to maintain vendor and technology
neutral contract specifications. To
provide for maximum competition,
solicitations should limit the use of
brand name specifications. As a general
rule, contract specifications should
emphasize the necessary physical,
functional, and performance
characteristics of a product - ;not brand
names. OMB encouraged agencies to
take steps to mitigate brand name usage
and requested agencies to publicize the
justification for use of brand name with
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the contract solicitation. While the
justifications are generally available
upon request, posting the brand name
justifications will improve the overall
transparency of the acquisition process.
Contracting officers must be sensitive
when dealing with proprietary
information when posting justifications.
FAR 6.305 requires contracting officers
to carefully screen all justifications for
contractor proprietary information and
remove such information before making
available to the public. Contracting
officers are to adhere to the exemptions
on disclosure of information contained
in the Freedom of Information Act (5
U.S.C. 552) and the prohibitions against
disclosure in FAR 24.202 in
determining the information that should
be removed.
The OMB memorandum applies to all
acquisitions exceeding $25,000 that use
brand name specifications, including
open market purchases, purchases from
the Federal Supply Schedules (FSS)
program, and sole source procurements.
Contracting officers should not use
other contract vehicles instead of the
FSS program when it is not in the best
interest of the Government to do so, just
to circumvent the brand name posting
requirement.
To implement the OMB
memorandum, the Councils are
amending the FAR to add a requirement
to publish on the GPE or e-Buy the
documentation required by the FAR to
support the use of brand name
specifications. The proposed changes
require—
• For brand name orders against the
FSS program, posting to e-Buy the
documentation or justification required
by FAR 8.405–6. The rule also restricts
the use of oral orders over $25,000
against the FSS that contain brand
specifications.
• For non-FSS acquisitions, including
simplified acquisitions, posting to the
Federal Business Opportunities website
(www.fedbizopps.gov) the justification
or documentation required by FAR
11.105.
OMB issued a second memorandum
on April 17, 2006 to provide additional
implementation guidance to agencies
when publicizing the brand name
justification which reflects the approach
above. In response to OMB’s
memoranda, agencies submitted several
comments and questions on the posting
requirement and the requirement for the
brand name justifications. The questions
and comments are summarized below
and the Councils invite interested
parties to comment on these questions.
1. The OMB memorandum requires
agencies to post the brand name
justification to e-Buy with the request
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for quotation (RFQ) when using the FSS.
However, some agencies use
commercial companies such as FedBid
to post the RFQs for FSS purchases and
FedBid posts the RFQ to FedBizOpps
instead of e-Buy. Should agencies be
allowed to post the brand name
justification to FedBizOpps instead of eBuy when they use FedBid or another
commercial company to post an RFQ for
FSS purchases? If an alternative posting
solution is used, will OMB be able to
obtain a report on the use of these brand
name justifications, if necessary?
2. The OMB memorandum requires
agencies to post brand name
justifications for orders against the FSS
but not for orders against indefinitedelivery contracts including GWACS.
Agencies can avoid the posting
requirement simply by purchasing on an
indefinite-delivery contract instead of
the FSS. Should agencies be required to
post brand name justifications for orders
against indefinite-delivery contracts? If
yes, where is the best place to post the
justification?
3. Should agencies be required to post
brand name justifications for orders
issued on the SmartBuy program and
other strategic sourcing vehicles?
4. Should agencies be required to post
brand name justifications to renew
software license agreements that are
required to receive software updates?
This is not a significant regulatory
action and, therefore, was not subject to
review under Section 6(b) of Executive
Order 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
B. Regulatory Flexibility Act
The interim rule is not expected to
have a significant economic impact on
a substantial number of small entities
within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq.,
because the rule adds no new
requirements for contractors. The rule
requires agencies to post documentation
required by the FAR to the GPE or eBuy. An Initial Regulatory Flexibility
Analysis (IRFA) has therefore not been
prepared. The Councils will consider
comments from small entities
concerning the affected FAR Parts 5, 6,
8, 11, and 13 in accordance with 5
U.S.C. 610. Interested parties must
submit such comments separately and
should cite 5 U.S.C 601, et seq. (FAC
2005–13, FAR case 2005–037), in
correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does
not apply because the changes to the
FAR do not impose information
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collection requirements that require the
approval of the Office of Management
and Budget under 44 U.S.C. 3501, et
seq.
D. Determination to Issue an Interim
Rule
A determination has been made under
the authority of the Secretary of Defense
(DoD), the Administrator of General
Services (GSA), and the Administrator
of the National Aeronautics and Space
Administration (NASA) that urgent and
compelling reasons exist to promulgate
this interim rule without prior
opportunity for public comment. This
action is necessary to limit the use of
brand name specifications and provide
for maximum competition. However,
pursuant to Public Law 98–577 and FAR
1.501, the Councils will consider public
comments received in response to this
interim rule in the formation of the final
rule.
List of Subjects in 48 CFR Parts 5, 6, 8,
11, and 13.
Government procurement.
Dated: September 19, 2006.
Ralph De Stefano,
Director, Contract Policy Division.
Therefore, DoD, GSA, and NASA
amend 48 CFR parts 5, 6, 8, 11, and 13
as set forth below:
I 1. The authority citation for 48 CFR
parts 5, 6, 8, 11, and 13 continues to
read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).
PART 5—PUBLICIZING CONTRACT
ACTIONS
2. Amend section 5.102 by adding
paragraph (a)(6) to read as follows:
I
Availability of solicitations.
(a)(1) * * *
*
*
*
*
*
(6) When an acquisition contains
brand name specifications, the
contracting officer shall include with
the solicitation the justification or
documentation required by 6.302–1(c),
13.106–1(b), or 13.501, redacted as
necessary (see 6.305).
*
*
*
*
*
PART 6—COMPETITION
REQUIREMENTS
3. Amend section 6.302–1 in
paragraph (c) by adding a new sentence
before the last sentence to read as
follows:
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I
6.302–1 Only one responsible source and
no other supplies or services will satisfy
agency requirements.
*
*
*
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PART 8—REQUIRED SOURCES OF
SUPPLIES AND SERVICES
4. Amend section 8.402 by—
a. Adding to paragraph (c)(2) ‘‘(except
see 8.405–6)’’ after ‘‘contractors’’; and
I b. Adding to paragraph (d) a new
sentence after the second sentence to
read as follows:
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8.402
General.
*
*
*
*
*
(d)* * * Ordering activities shall post
an RFQ to e-Buy when an order contains
brand name specifications (see 8.405–6).
***
*
*
*
*
*
I 5. Amend section 8.405–1 by revising
paragraphs (c) and (d)(1) to read as
follows:
8.405–1 Ordering procedures for supplies,
and services not requiring a statement of
work.
*
I
5.102
(c) * * * See 5.102(a)(6) for the
requirement to post the brand name
justification. * * *
*
*
*
*
*
*
*
*
*
(c) Orders exceeding the micropurchase threshold but not exceeding
the maximum order threshold. (1)
Ordering activities shall place orders
with the schedule contractor that can
provide the supply or service that
represents the best value. Before placing
an order, an ordering activity shall
consider reasonably available
information about the supply or service
offered under MAS contracts by
surveying at least three schedule
contractors through the GSA Advantage!
on-line shopping service, or by
reviewing the catalogs or pricelists of at
least three schedule contractors (see
8.405–5).
(2) When an order contains brand
name specifications, the contracting
officer shall post the Request for Quote
(RFQ) along with the justification or
documentation as required by 8.405–6.
(3) In addition to price, when
determining best value, the ordering
activity may consider, among other
factors, the following:
(i) Past performance.
(ii) Special features of the supply or
service required for effective program
performance.
(iii) Trade-in considerations.
(iv) Probable life of the item selected
as compared with that of a comparable
item.
(v) Warranty considerations.
(vi) Maintenance availability.
(vii) Environmental and energy
efficiency considerations.
(viii) Delivery terms.
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57359
(d)* * *;
(1) Review (except see (c)(2) of this
subsection) the pricelists of additional
schedule contractors (the GSA
Advantage! on-line shopping service
can be used to facilitate this review);
*
*
*
*
*
I 6. Amend section 8.405–6 by—
I a. Revising paragraph (a) and the
introductory text of paragraph (b);
I b. Removing paragraph (b)(3);
I c. Redesignating paragraph (b)(4) as
(b)(3);
I d. Revising paragraph (c);
I e. Redesignating paragraphs (d), (e),
and (f) as (f), (g) and (h) respectively;
I f. Adding new paragraphs (d) and (e);
I g. Removing from the newly
designated paragraph (f) ‘‘of schedule
contractors to fewer than required in
8.405–1 or 8.405–2’’;
I h. Removing from newly designated
paragraph (g)(2)(iv) ‘‘8.405–6(b)’’ and
adding ‘‘8.405–6(a) and (b)’’ in its place;
I i. Revising newly designated
paragraph (g)(2)(viii);
I j. Removing from newly designated
paragraph (h)(2) ‘‘(f)(3) or (f)(4)’’ and
adding ‘‘(h)(3) or (h)(4)’’ in its place; and
I k. Removing from newly designated
paragraph (h)(3)(iii) ‘‘(f)(4)’’ and adding
‘‘(h)(4)’’ in its place.
The revised and added text reads as
follows:
8.405–6 Limited sources justification and
approval.
(a) Orders placed under Federal
Supply Schedules are exempt from the
requirements in Part 6. However, an
ordering activity must justify its action
when restricting consideration—
(1) Of schedule contractors to fewer
than required in 8.405–1 or 8.405–2; or
(2) To an item peculiar to one
manufacturer (e.g., a particular brand
name, product, or a feature of a product,
peculiar to one manufacturer). A brand
name item, whether available on one or
more schedule contracts, is an item
peculiar to one manufacturer. Brand
name specifications shall not be used
unless the particular brand name,
product, or feature is essential to the
Government’s requirements, and market
research indicates other companies’
similar products, or products lacking
the particular feature, do not meet, or
cannot be modified to meet, the
agency’s needs.
(b) Circumstances that may justify
restriction cited in paragraph (a)(1) of
this subsection include—
*
*
*
*
*
(c) Ordering activities shall procure
such requirements only if the need to do
so is justified in writing and approved
at the levels specified in paragraphs (f)
and (h) of this subsection.
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(d) Except as provided in paragraph
(e) of this subsection, when an order
contains brand name specifications, the
ordering activity shall post the
following information along with the
Request for Quotation (RFQ) to e-Buy
(https://www.ebuy.gsa.gov):
(1) For proposed orders exceeding
$25,000, but not exceeding the
simplified acquisition threshold, the
documentation required by paragraph (f)
of this subsection.
(2) For proposed orders exceeding the
simplified acquisition threshold, the
justification required by paragraph (g) of
this subsection.
(e) The posting requirement of
paragraph (d) of this subsection does not
apply when—
(1) Disclosure would compromise the
national security (e.g., would result in
disclosure of classified information) or
create other security risks. The fact that
access to classified matter may be
necessary to submit a proposal or
perform the contract does not, in itself,
justify use of this exception;
(2) The nature of the file (e.g., size,
format) does not make it cost-effective
or practicable for contracting officers to
provide access through e-Buy; or
(3) The agency’s senior procurement
executive makes a written
determination that access through e-Buy
is not in the Government’s interest.
*
*
*
*
*
(g) * * *
(2) * * *
(viii) A statement of the actions, if
any, the agency may take to remove or
overcome any barriers that led to the
restricted consideration before any
subsequent acquisition for the supplies
or services is made.
*
*
*
*
*
I 7. Amend section 8.406–1 by revising
the first sentence of the introductory
text to read as follows:
8.406–1
Order placement.
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PART 11—DESCRIBING AGENCY
NEEDS
8. Amend section 11.105 by—
a. Redesignating paragraphs (a), (b),
and (c) as (a)(1), (a)(2)(i), and (a)(2)(ii)
respectively; and adding new
paragraphs (a)(3) and (b);
I
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20:58 Sep 27, 2006
c. Amending paragraphs (a)(1)(ii) and
(a)(2) by adding ‘‘(including brand
name)’’ after ‘‘sole source’’.
11.105
GENERAL SERVICES
ADMINISTRATION
Items peculiar to one manufacturer.
*
*
*
*
*
(a)(1) * * *
(2)(i) * * *
(ii) The basis for not providing for
maximum practicable competition is
documented in the file (see 13.106–1(b))
or justified (see 13.501) when the
acquisition is awarded using simplified
acquisition procedures.
(3) The documentation or justification
is posted for acquisitions over $25,000.
(See 5.102(a)(6).)
(b) For multiple award schedule
orders, see 8.405–6.
PART 13—SIMPLIFIED ACQUISITION
PROCEDURES
9. Amend section 13.105 by adding
paragraph (c) to read as follows:
I
13.105 Synopsis and posting
requirements.
*
*
*
*
*
(c) See 5.102(a)(6) for the requirement
to post a brand name justification or
documentation required by 13.106–1(b)
or 13.501.
I 10. Amend section 13.106–1 by—
I a. Amending paragraph (b)(1) by
adding ‘‘brand name’’ after
‘‘agreements,’’;
I b. Amending paragraph (b)(2) by
adding ‘‘(including brand name)’’ after
‘‘For sole source’’; and
I c. Adding a new paragraph (b)(3) to
read as follows—
13.106–1
Soliciting competition.
*
Ordering activities may place orders
orally (except for services requiring a
statement of work (SOW) or orders
containing brand name specifications
that exceed $25,000) or use Optional
Form 347, an agency-prescribed form, or
an established electronic
communications format to order
supplies or services from schedule
contracts. * * *
*
*
*
*
*
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b. Amending newly redesignated
paragraph (a)(2)(i) by removing ‘‘and’’
from the end of the paragraph and
adding ‘‘or’’ in its place; and
I c. Revising newly redesignated
paragraph (a)(2)(ii).
The revised and added text reads as
follows:
I
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*
*
*
*
(b) * * *
(3) See 5.102(a)(6) for the requirement
to post the brand name justification or
documentation.
*
*
*
*
*
13.106–3
[Amended]
11. Amend section 13.106–3 in
paragraph (b)(3)(i) by adding ‘‘(see
13.106–1 for brand name purchases)’’
after ‘‘competition’’.
I
13.501
[Amended]
12. Amend section 13.501 by—
a. Amending the paragraph heading in
paragraph (a) by adding ‘‘(including
brand name)’’ after ‘‘Sole source’’;
I b. Amending paragraph (a)(1)(i) by
adding ‘‘(including brand name)’’ after
‘‘2.101,’’; and
I
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[FR Doc. 06–8200 Filed 9–27–06; 8:45 am]
BILLING CODE 6820–EP–S
DEPARTMENT OF DEFENSE
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 1, 2, 7, 11, 31, and 39
[FAC 2005–13; FAR Case 2004–018; Item
II; Docket 2006–0020, Sequence 16]
RIN 9000–AK29
Federal Acquisition Regulation; FAR
Case 2004–018, Information
Technology Security
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
AGENCIES:
SUMMARY: The Civilian Agency
Acquisition Council and the Defense
Acquisition Regulations Council
(Councils) have agreed to adopt as final
without change, the interim rule
amending the Federal Acquisition
Regulation (FAR) to implement the
Information Technology (IT) Security
provisions of the Federal Information
Security Management Act of 2002
(FISMA) (Title III of Public Law 107–
347, the E-Government Act of 2002 (EGov Act)).
DATES: Effective Date: September 28,
2006.
FOR FURTHER INFORMATION CONTACT: For
clarification of content, contact Ms.
Cecelia Davis, Procurement Analyst, at
(202) 219–0202. Please cite FAC 2005–
13, FAR case 2004–018. For information
pertaining to status or publication
schedules, contact the FAR Secretariat
at (202) 501–4755.
SUPPLEMENTARY INFORMATION:
A. Background
DoD, GSA, and NASA published an
interim rule in the Federal Register at
70 FR 57449, September 30, 2005 to
implement the Information Technology
(IT) Security provisions of the Federal
Information Security Management Act
of 2002 (FISMA) (Title III of Public Law
107–347, the E-Government Act of 2002
(E-Gov Act)). There was a correction
published in the Federal Register at 70
FR 69100, November 14, 2005, deleting
the definition at FAR 2.101 of
E:\FR\FM\28SER2.SGM
28SER2
]]>Agencies
[Federal Register Volume 71, Number 188 (Thursday, September 28, 2006)]
[Rules and Regulations]
[Pages 57357-57360]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-8200]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 5, 6, 8, 11, and 13
[FAC 2005-13; FAR Case 2005-037; Item I; Docket 2006-0020, Sequence 10]
RIN 9000-AK55
Federal Acquisition Regulation; FAR Case 2005-037, Implement OMB
Policy on the Use of Brand Name Specifications
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed to amend the
Federal Acquisition Regulation (FAR) to require agencies to publish on
the Governmentwide point of entry (GPE) or e-Buy the documentation
required by
[[Page 57358]]
the FAR to support the use of brand name specifications.
DATES: Effective Date: September 28, 2006.
Comment Date: Interested parties should submit written comments to
the FAR Secretariat on or before November 27, 2006 to be considered in
the formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-13, FAR case 2005-
037, by any of the following methods:
Federal eRulemaking Portal:
https://www.regulations.gov. Search for this document at the
``Federal Acquisition Regulation'' agency and review the ``Document
Title'' column; click on the Document ID number. Click on ``Add
Comments''.
You may also search for any document using the ``Advanced search/
document search'' tab, selecting from the agency field ``Federal
Acquisition Regulation'', and typing the FAR case number in the keyword
field.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann
Duarte, Washington, DC 20405.
Instructions: Please submit comments only and cite FAC 2005-13, FAR
case 2005-037, in all correspondence related to this case. All comments
received will be posted without change to https://www.regulations.gov,
including any personal and/or business confidential information
provided.
FOR FURTHER INFORMATION CONTACT For clarification of content, contact
Ms. Cecelia L. Davis, Procurement Analyst, at (202) 219-0202. Please
cite FAC 2005-13, FAR case 2005-037. For information pertaining to
status or publication schedules, contact the FAR Secretariat at (202)
501-4755.
SUPPLEMENTARY INFORMATION:
A. Background
On April 11, 2005, the Office of Management and Budget (OMB) issued
a memorandum on the use of brand name specifications to reinforce the
need to maintain vendor and technology neutral contract specifications.
To provide for maximum competition, solicitations should limit the use
of brand name specifications. As a general rule, contract
specifications should emphasize the necessary physical, functional, and
performance characteristics of a product - ;not brand names. OMB
encouraged agencies to take steps to mitigate brand name usage and
requested agencies to publicize the justification for use of brand name
with the contract solicitation. While the justifications are generally
available upon request, posting the brand name justifications will
improve the overall transparency of the acquisition process.
Contracting officers must be sensitive when dealing with proprietary
information when posting justifications. FAR 6.305 requires contracting
officers to carefully screen all justifications for contractor
proprietary information and remove such information before making
available to the public. Contracting officers are to adhere to the
exemptions on disclosure of information contained in the Freedom of
Information Act (5 U.S.C. 552) and the prohibitions against disclosure
in FAR 24.202 in determining the information that should be removed.
The OMB memorandum applies to all acquisitions exceeding $25,000
that use brand name specifications, including open market purchases,
purchases from the Federal Supply Schedules (FSS) program, and sole
source procurements. Contracting officers should not use other contract
vehicles instead of the FSS program when it is not in the best interest
of the Government to do so, just to circumvent the brand name posting
requirement.
To implement the OMB memorandum, the Councils are amending the FAR
to add a requirement to publish on the GPE or e-Buy the documentation
required by the FAR to support the use of brand name specifications.
The proposed changes require--
For brand name orders against the FSS program, posting to
e-Buy the documentation or justification required by FAR 8.405-6. The
rule also restricts the use of oral orders over $25,000 against the FSS
that contain brand specifications.
For non-FSS acquisitions, including simplified
acquisitions, posting to the Federal Business Opportunities website
(www.fedbizopps.gov) the justification or documentation required by FAR
11.105.
OMB issued a second memorandum on April 17, 2006 to provide
additional implementation guidance to agencies when publicizing the
brand name justification which reflects the approach above. In response
to OMB's memoranda, agencies submitted several comments and questions
on the posting requirement and the requirement for the brand name
justifications. The questions and comments are summarized below and the
Councils invite interested parties to comment on these questions.
1. The OMB memorandum requires agencies to post the brand name
justification to e-Buy with the request for quotation (RFQ) when using
the FSS. However, some agencies use commercial companies such as FedBid
to post the RFQs for FSS purchases and FedBid posts the RFQ to
FedBizOpps instead of e-Buy. Should agencies be allowed to post the
brand name justification to FedBizOpps instead of e-Buy when they use
FedBid or another commercial company to post an RFQ for FSS purchases?
If an alternative posting solution is used, will OMB be able to obtain
a report on the use of these brand name justifications, if necessary?
2. The OMB memorandum requires agencies to post brand name
justifications for orders against the FSS but not for orders against
indefinite-delivery contracts including GWACS. Agencies can avoid the
posting requirement simply by purchasing on an indefinite-delivery
contract instead of the FSS. Should agencies be required to post brand
name justifications for orders against indefinite-delivery contracts?
If yes, where is the best place to post the justification?
3. Should agencies be required to post brand name justifications
for orders issued on the SmartBuy program and other strategic sourcing
vehicles?
4. Should agencies be required to post brand name justifications to
renew software license agreements that are required to receive software
updates?
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The interim rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule
adds no new requirements for contractors. The rule requires agencies to
post documentation required by the FAR to the GPE or e-Buy. An Initial
Regulatory Flexibility Analysis (IRFA) has therefore not been prepared.
The Councils will consider comments from small entities concerning the
affected FAR Parts 5, 6, 8, 11, and 13 in accordance with 5 U.S.C. 610.
Interested parties must submit such comments separately and should cite
5 U.S.C 601, et seq. (FAC 2005-13, FAR case 2005-037), in
correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose information
[[Page 57359]]
collection requirements that require the approval of the Office of
Management and Budget under 44 U.S.C. 3501, et seq.
D. Determination to Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary to limit the use of brand name specifications and provide
for maximum competition. However, pursuant to Public Law 98-577 and FAR
1.501, the Councils will consider public comments received in response
to this interim rule in the formation of the final rule.
List of Subjects in 48 CFR Parts 5, 6, 8, 11, and 13.
Government procurement.
Dated: September 19, 2006.
Ralph De Stefano,
Director, Contract Policy Division.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 5, 6, 8, 11, and 13 as
set forth below:
0
1. The authority citation for 48 CFR parts 5, 6, 8, 11, and 13
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 5--PUBLICIZING CONTRACT ACTIONS
0
2. Amend section 5.102 by adding paragraph (a)(6) to read as follows:
5.102 Availability of solicitations.
(a)(1) * * *
* * * * *
(6) When an acquisition contains brand name specifications, the
contracting officer shall include with the solicitation the
justification or documentation required by 6.302-1(c), 13.106-1(b), or
13.501, redacted as necessary (see 6.305).
* * * * *
PART 6--COMPETITION REQUIREMENTS
0
3. Amend section 6.302-1 in paragraph (c) by adding a new sentence
before the last sentence to read as follows:
6.302-1 Only one responsible source and no other supplies or services
will satisfy agency requirements.
* * * * *
(c) * * * See 5.102(a)(6) for the requirement to post the brand
name justification. * * *
* * * * *
PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
0
4. Amend section 8.402 by--
0
a. Adding to paragraph (c)(2) ``(except see 8.405-6)'' after
``contractors''; and
0
b. Adding to paragraph (d) a new sentence after the second sentence to
read as follows:
8.402 General.
* * * * *
(d)* * * Ordering activities shall post an RFQ to e-Buy when an
order contains brand name specifications (see 8.405-6). * * *
* * * * *
0
5. Amend section 8.405-1 by revising paragraphs (c) and (d)(1) to read
as follows:
8.405-1 Ordering procedures for supplies, and services not requiring
a statement of work.
* * * * *
(c) Orders exceeding the micro-purchase threshold but not exceeding
the maximum order threshold. (1) Ordering activities shall place orders
with the schedule contractor that can provide the supply or service
that represents the best value. Before placing an order, an ordering
activity shall consider reasonably available information about the
supply or service offered under MAS contracts by surveying at least
three schedule contractors through the GSA Advantage! on-line shopping
service, or by reviewing the catalogs or pricelists of at least three
schedule contractors (see 8.405-5).
(2) When an order contains brand name specifications, the
contracting officer shall post the Request for Quote (RFQ) along with
the justification or documentation as required by 8.405-6.
(3) In addition to price, when determining best value, the ordering
activity may consider, among other factors, the following:
(i) Past performance.
(ii) Special features of the supply or service required for
effective program performance.
(iii) Trade-in considerations.
(iv) Probable life of the item selected as compared with that of a
comparable item.
(v) Warranty considerations.
(vi) Maintenance availability.
(vii) Environmental and energy efficiency considerations.
(viii) Delivery terms.
(d)* * *;
(1) Review (except see (c)(2) of this subsection) the pricelists of
additional schedule contractors (the GSA Advantage! on-line shopping
service can be used to facilitate this review);
* * * * *
0
6. Amend section 8.405-6 by--
0
a. Revising paragraph (a) and the introductory text of paragraph (b);
0
b. Removing paragraph (b)(3);
0
c. Redesignating paragraph (b)(4) as (b)(3);
0
d. Revising paragraph (c);
0
e. Redesignating paragraphs (d), (e), and (f) as (f), (g) and (h)
respectively;
0
f. Adding new paragraphs (d) and (e);
0
g. Removing from the newly designated paragraph (f) ``of schedule
contractors to fewer than required in 8.405-1 or 8.405-2'';
0
h. Removing from newly designated paragraph (g)(2)(iv) ``8.405-6(b)''
and adding ``8.405-6(a) and (b)'' in its place;
0
i. Revising newly designated paragraph (g)(2)(viii);
0
j. Removing from newly designated paragraph (h)(2) ``(f)(3) or (f)(4)''
and adding ``(h)(3) or (h)(4)'' in its place; and
0
k. Removing from newly designated paragraph (h)(3)(iii) ``(f)(4)'' and
adding ``(h)(4)'' in its place.
The revised and added text reads as follows:
8.405-6 Limited sources justification and approval.
(a) Orders placed under Federal Supply Schedules are exempt from
the requirements in Part 6. However, an ordering activity must justify
its action when restricting consideration--
(1) Of schedule contractors to fewer than required in 8.405-1 or
8.405-2; or
(2) To an item peculiar to one manufacturer (e.g., a particular
brand name, product, or a feature of a product, peculiar to one
manufacturer). A brand name item, whether available on one or more
schedule contracts, is an item peculiar to one manufacturer. Brand name
specifications shall not be used unless the particular brand name,
product, or feature is essential to the Government's requirements, and
market research indicates other companies' similar products, or
products lacking the particular feature, do not meet, or cannot be
modified to meet, the agency's needs.
(b) Circumstances that may justify restriction cited in paragraph
(a)(1) of this subsection include--
* * * * *
(c) Ordering activities shall procure such requirements only if the
need to do so is justified in writing and approved at the levels
specified in paragraphs (f) and (h) of this subsection.
[[Page 57360]]
(d) Except as provided in paragraph (e) of this subsection, when an
order contains brand name specifications, the ordering activity shall
post the following information along with the Request for Quotation
(RFQ) to e-Buy (https://www.ebuy.gsa.gov):
(1) For proposed orders exceeding $25,000, but not exceeding the
simplified acquisition threshold, the documentation required by
paragraph (f) of this subsection.
(2) For proposed orders exceeding the simplified acquisition
threshold, the justification required by paragraph (g) of this
subsection.
(e) The posting requirement of paragraph (d) of this subsection
does not apply when--
(1) Disclosure would compromise the national security (e.g., would
result in disclosure of classified information) or create other
security risks. The fact that access to classified matter may be
necessary to submit a proposal or perform the contract does not, in
itself, justify use of this exception;
(2) The nature of the file (e.g., size, format) does not make it
cost-effective or practicable for contracting officers to provide
access through e-Buy; or
(3) The agency's senior procurement executive makes a written
determination that access through e-Buy is not in the Government's
interest.
* * * * *
(g) * * *
(2) * * *
(viii) A statement of the actions, if any, the agency may take to
remove or overcome any barriers that led to the restricted
consideration before any subsequent acquisition for the supplies or
services is made.
* * * * *
0
7. Amend section 8.406-1 by revising the first sentence of the
introductory text to read as follows:
8.406-1 Order placement.
Ordering activities may place orders orally (except for services
requiring a statement of work (SOW) or orders containing brand name
specifications that exceed $25,000) or use Optional Form 347, an
agency-prescribed form, or an established electronic communications
format to order supplies or services from schedule contracts. * * *
* * * * *
PART 11--DESCRIBING AGENCY NEEDS
0
8. Amend section 11.105 by--
0
a. Redesignating paragraphs (a), (b), and (c) as (a)(1), (a)(2)(i), and
(a)(2)(ii) respectively; and adding new paragraphs (a)(3) and (b);
0
b. Amending newly redesignated paragraph (a)(2)(i) by removing ``and''
from the end of the paragraph and adding ``or'' in its place; and
0
c. Revising newly redesignated paragraph (a)(2)(ii).
The revised and added text reads as follows:
11.105 Items peculiar to one manufacturer.
* * * * *
(a)(1) * * *
(2)(i) * * *
(ii) The basis for not providing for maximum practicable
competition is documented in the file (see 13.106-1(b)) or justified
(see 13.501) when the acquisition is awarded using simplified
acquisition procedures.
(3) The documentation or justification is posted for acquisitions
over $25,000. (See 5.102(a)(6).)
(b) For multiple award schedule orders, see 8.405-6.
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
0
9. Amend section 13.105 by adding paragraph (c) to read as follows:
13.105 Synopsis and posting requirements.
* * * * *
(c) See 5.102(a)(6) for the requirement to post a brand name
justification or documentation required by 13.106-1(b) or 13.501.
0
10. Amend section 13.106-1 by--
0
a. Amending paragraph (b)(1) by adding ``brand name'' after
``agreements,'';
0
b. Amending paragraph (b)(2) by adding ``(including brand name)'' after
``For sole source''; and
0
c. Adding a new paragraph (b)(3) to read as follows--
13.106-1 Soliciting competition.
* * * * *
(b) * * *
(3) See 5.102(a)(6) for the requirement to post the brand name
justification or documentation.
* * * * *
13.106-3 [Amended]
0
11. Amend section 13.106-3 in paragraph (b)(3)(i) by adding ``(see
13.106-1 for brand name purchases)'' after ``competition''.
13.501 [Amended]
0
12. Amend section 13.501 by--
0
a. Amending the paragraph heading in paragraph (a) by adding
``(including brand name)'' after ``Sole source'';
0
b. Amending paragraph (a)(1)(i) by adding ``(including brand name)''
after ``2.101,''; and
0
c. Amending paragraphs (a)(1)(ii) and (a)(2) by adding ``(including
brand name)'' after ``sole source''.
[FR Doc. 06-8200 Filed 9-27-06; 8:45 am]
BILLING CODE 6820-EP-S
