Department of Homeland Security Acquisition Regulation; One-Step Turnkey Design-Build Contracts for United States Coast Guard (HSAR Case 2007-002), 24881-24883 [E8-9900]
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(3) Discharges occurring on or after
October 1, 2003, and before October 1,
2006. For discharges occurring on or
after October 1, 2003, and before
October 1, 2006, short-stay outlier
payments are subject to the provisions
of § 412.84(i)(2) for adjustments to costto-charge ratios.
(4) Discharges occurring on or after
October 1, 2006. For discharges
occurring on or after October 1, 2006,
short-stay outlier payments are subject
to the following provisions:
(i) CMS may specify an alternative to
the cost-to-charge ratio otherwise
applicable under paragraph (f)(4)(ii) of
this section. A hospital may also request
that its fiscal intermediary use a
different (higher or lower) cost-to-charge
ratio based on substantial evidence
presented by the hospital. This request
must be approved by the appropriate
CMS Regional Office.
(ii) The cost-to-charge ratio applied at
the time a claim is processed is based
on either the most recent settled cost
report or the most recent tentatively
settled cost report, whichever is from
the latest cost reporting period.
(iii) The fiscal intermediary may use
a statewide average cost-to-charge ratio,
which CMS establishes annually, if it is
unable to determine an accurate cost-tocharge ratio for a hospital in one of the
following circumstances:
(A) A new hospital that has not yet
submitted its first Medicare cost report.
(For this purpose, a new hospital is
defined as an entity that has not
accepted assignment of an existing
hospital’s provider agreement in
accordance with § 489.18 of this
chapter.)
(B) A hospital whose cost-to-charge
ratio is in excess of 3 standard
deviations above the corresponding
national geometric mean. CMS
establishes and publishes this mean
annually.
(C) Any other hospital for which data
to calculate a cost-to-charge ratio are not
available.
(iv) Any reconciliation of outlier
payments is based on the cost-to-charge
ratio calculated based on a ratio of costs
to charges computed from the relevant
cost report and charge data determined
at the time the cost report coinciding
with the discharge is settled.
(v) At the time of any reconciliation
under paragraph (f)(4)(iv) of this section,
outlier payments may be adjusted to
account for the time value of any
underpayments or overpayments. Any
adjustment is based upon a widely
available index to be established in
advance by the Secretary, and is applied
from the midpoint of the cost reporting
period to the date of reconciliation.
VerDate Aug<31>2005
16:31 May 05, 2008
Jkt 214001
(Catalog of Federal Domestic Assistance
Program No. 93.773, Medicare—Hospital
Insurance; and Program No. 93.774,
Medicare—Supplementary Medical
Insurance Program)
Dated: April 4, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Approved: April 30, 2008.
Michael O. Leavitt,
Secretary.
[FR Doc. 08–1217 Filed 5–1–08; 4:00 pm]
BILLING CODE 4120–01–P
DEPARTMENT OF HOMELAND
SECURITY
48 CFR Part 3036
[Docket No. DHS–2007–0024]
RIN 1601–AA44
Department of Homeland Security
Acquisition Regulation; One-Step
Turnkey Design-Build Contracts for
United States Coast Guard (HSAR
Case 2007–002)
Department of Homeland
Security.
ACTION: Final rule.
AGENCY:
SUMMARY: The Department of Homeland
Security (DHS or Department) is
amending the Homeland Security
Acquisition Regulation (HSAR) to
incorporate delegation of one-step
turnkey design-build authority from the
Secretary of Homeland Security to the
United States Coast Guard (USCG or
Coast Guard). This rule implements
changes that result from the USCG
Authorization Act for Fiscal Year 2006.
DATES: Effective May 6, 2008.
FOR FURTHER INFORMATION CONTACT:
Kathy Strouss, Department of Homeland
Security, Office of the Chief
Procurement Officer, Acquisition Policy
and Legislation, (202) 447–5300.
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of Public Comments
III. Regulatory Analyses
A. Executive Order 12866 Assessment
B. Regulatory Flexibility Act
I. Background
Under the United States Coast Guard
(USCG) Authorization Act for Fiscal
Year 2006, the Secretary of Homeland
Security was authorized to use one-step
turnkey design-build procedures when
entering into construction contracts. See
Public Law 109–241, sec. 205. On July
13, 2007, DHS published a proposed
rule, which would amend the
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24881
Department of Homeland Security
Acquisition Regulation (HSAR) to
incorporate the delegation of turnkey
design-build authority from the
Secretary of Homeland Security to the
United States Coast Guard. See 72 FR
38548. DHS adopts the proposed rule as
a final rule without change.
II. Discussion of Public Comments
DHS received public comments from
6 sources on the proposed rule. The
public comments received and the
responses are summarized below:
Comment: Several comments were
opposed to this HSAR revision, which
would incorporate the delegation of
one-step turnkey design-build
procedures authority from the Secretary
of Homeland Security to the United
States Coast Guard. Most commenters
fully understood that DHS issued the
proposed rule to implement changes
enacted by Congress in section 205 of
Public Law 109–241; however, the
commenters still urged DHS not to
adopt the proposed regulation, believing
instead that the Department should
continue to follow the two-phase
design-build procedures laid out in the
Federal Acquisition Reform Act (FARA)
of 1996.
Response: DHS disagrees. The Coast
Guard has studied the one-step turnkey
design-build process and is fully
convinced that it is in the best interest
of both the Coast Guard and the
government to adopt this streamlined
acquisition method. The Coast Guard
delegation of one-step turnkey designbuild authority is consistent with
section 205 of Public Law 109–241.
Each construction acquisition is unique,
and one-step turnkey design-build
methods will be used where it is
reasonable, prudent, and offers the best
contracting strategy for the Coast Guard.
Comment: Other comments fully
supported the adoption of a universal
design-build methodology for all federal
design-build projects. The commenters
wrote, however, that the adoption of a
turnkey design-build (one-step) method
would unnecessarily confuse the private
sector with conflicting procurement
methodologies.
Response: DHS disagrees. The private
sector is very familiar with one-step
turnkey design-build and has been using
the process for years. The private sector
has gained experience with one-step
design-build use at other federal
agencies, such as the Department of
Defense (DoD) and the Department of
Transportation.
Comment: One commenter reminded
DHS that the Federal Acquisition
Regulation (FAR) Part 36 governs the
use of two-phase design-build
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24882
Federal Register / Vol. 73, No. 88 / Tuesday, May 6, 2008 / Rules and Regulations
procedures for construction contracting
and is the only design-build method
that is currently allowed under the FAR.
This commenter believes that any
deviation from the current guidance in
FAR part 36 is not authorized by
Congress. The commenter requests that
the USCG comply with the current laws
and intent of Congress in this regard.
Another commenter had concerns about
the implications of the proposed rule.
The commenter highlighted the fact that
‘‘Unless the less complex facilities are
truly less complex and do not require
extensive designs, the costs to the small
business of a one stage procedure could
and would be more expensive and may
limit competition from small business.’’
The commenter also indicated that this
proposed rule did not provide enough
specificity as to provide adequate notice
to the public regarding changes
proposed. The commenter urged the
Department to reissue a proposed rule
with greater specificity (rather than
issue a final rule) and to extend the
comment period.
Response: DHS does not believe onestep turnkey design-build will place an
undue burden on small business. Since
one purpose of the rule is to provide the
Coast Guard with cost and time
efficiencies for small construction
projects, the rule should also afford
small construction companies with an
opportunity to successfully compete for
such projects. DHS did not extend the
comment period for this proposed rule,
because DHS does not believe that any
additional time is necessary. DHS
believes that the comment period
provided was sufficient.
Comment: DHS received several
comments regarding the type of projects
to be completed under turnkey.
Specifically, commenters wanted to
know what constituted a ‘‘complex
facility’’ versus a ‘‘simple design’’ and
wanted DHS to elaborate further on the
types and size of facilities to be
included under the proposed turnkey
acquisition methodology.
Response: The Coast Guard will
consider all types of facilities and
projects under turnkey acquisition
procedures. The final acquisition
method for each project is not finalized
until all acquisition planning is
complete. The DHS advanced
acquisition planning database (located
at https://www.fido.gov) contains a
complete listing of Coast Guard
construction projects scheduled for each
fiscal year. In addition, the Coast Guard
will be developing internal guidelines to
ensure that all of its construction offices
follow standards in executing one-step
turnkey design-build authority.
VerDate Aug<31>2005
16:31 May 05, 2008
Jkt 214001
Comment: DHS received a few
comments regarding specific
implementation policy of two-phase
design-build process. Several
commenters wrote that price should not
enter into the evaluation until after the
qualifications of the applicants have
been fully evaluated and a shortlist of
between three and five fully qualified
firms are identified. They wrote that
under the proposed rule’s one-step
selection procedure, price would be
mingled with the qualifications. The
commenters also believed that a onestep selection process carries numerous
disadvantages for both the agency and
for the contractors when compared with
the existing two-step process. The
commenters wrote that under a onephase process, proposal costs would be
escalated, because all of the applicants
would have to go through the complete
cost proposal process, unlike in twostep design-build process, where only
the short-listed firms have to prepare a
cost proposal. The commenters wrote
that since cost proposals often require a
significant pre-contract design effort,
there would be a need for the Coast
Guard (like some federal agencies) to
provide a stipend to the short-listed
firms which would increase costs for the
agency. In addition, the commenters
thought that a one-phase design-build
process would deny the Coast Guard the
innovation and creativity that is fostered
by the two-step selection process as
competitors compete to provide the
most ‘‘value added’’ to their proposals.
The commenters indicated that with an
unlimited number of competitors,
relatively few firms will want to invest
the effort to be innovative and
creative—especially smaller firms with
emerging talent.
Response: A historical perspective of
past Coast Guard construction projects
shows that the majority of construction
projects have gone to small businesses.
The Coast Guard believes that, under
one-step turnkey design-build authority,
construction projects will continue to go
to small businesses. Contract
opportunities would still be available
for companies that meet their socioeconomic status as specified in federal
statutes. This includes companies
located in Historically Underutilized
Business Zones (HUBZone), companies
eligible to receive federal contracts
under the Small Business
Administration’s 8(a) Business
Development Program, companies
eligible as Service-Disabled Veteran
Owned Small Business (SDVOSB)
concerns, and other certified Small
Business (SB) concerns eligible for
contract opportunities. The Coast Guard
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anticipates that many of its one-step
design build projects will involve
modest design efforts that will not
substantially add to the cost of a
contractor’s bid or proposal. The Coast
Guard does not intend to pay stipends
related to costs for one-step turnkey
design-build proposal development.
Comment: DHS received several
comments regarding contractor selection
and qualifications. Commenters wrote
that if the Coast Guard moves forward
in implementing regulations on a onephase design-build process, then DHS
should modify source selection
procedures.
Response: If DHS were to follow the
recommendation of these commenters,
DHS would render the one-step turnkey
design-build program into a two-step
design-build program, thereby defeating
the intent of Congress in granting DHS
the option of delegating one-step
turnkey design-build authority to the
Coast Guard. The Coast Guard will base
all contract awards under one-step
turnkey design-build authority on Best
Value Continuum Selection methods. In
addition, the Coast Guard is in the
process of developing internal
guidelines to ensure that all its
construction offices follow identical
standards in executing one-step turnkey
design-build contracts. The guidelines
will allow for program standardization
among all Coast Guard civil engineering
units.
Comment: Two commenters
recommended that DHS should add a
provision to the final rule to limit the
use of the one-step design-build process
to projects that are ‘‘less complex
projects requiring little or adaptive
design with a maximum construction
value of no more than $6 million.’’
Response: The Coast Guard intends to
utilize one-step turnkey design-build
authority on a case-by-case basis.
Detailed acquisition planning will
determine the best procurement method
to use for each project undertaken by
various Coast Guard civil engineering
units. The Coast Guard does not intend
to limit one-step turnkey design-build
procedures to procurements falling
within predetermined dollar ranges. The
Coast Guard will consider all projects
regardless of dollar value.
Comment: A few commenters
remarked that the FAR provision
implemented in ‘‘Subpart 36.3—TwoPhase Design-Build Selection
Procedures’’ should be the only
governing provision. They remarked
that Congress has never authorized a
waiver of or deviation from
qualifications based selection (QBS) for
architecture, engineering and related
services and that Congress has
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consistently endorsed and required use
of this process (40 U.S.C. 1101 et seq.
and FAR part 36.6).
Response: DHS disagrees. The USCG
Authorization Act for Fiscal Year 2006
specifically authorizes the Secretary to
use one-step turnkey design-build
procedures when entering into
construction contracts. See Public Law
109–241 section 205. In addition, in the
past, the one-step turn-key design-build
procedures were authorized by Congress
pursuant to 10 U.S.C. 2862. This law
allows DoD service secretaries (the
Secretary of the Army, the Secretary of
the Air Force and the Secretary of the
Navy) to use the one-step turnkey
procedures for military construction
contracts. The purpose of this rule is to
delegate authority of the Secretary of
Homeland Security under section 205 of
Public Law 109–241 (14 U.S.C. 677) to
the Coast Guard.
Comment: A few comments took
exception with the notion that the twophrase design-build selection process
required by the FAR (48 CFR 36.6)
results in a much longer process. They
commented that the two-phase designbuild selection process is the most
effective way to get the best results
using design-build contracting and
works well for large and small, simple
and complex projects when used
correctly. They also felt that the most
effective way for an owner to
communicate desired project outcomes
is through the use of performance-based
requirements, which describe the nature
of the project in terms of desire
performance outcomes and an owner’s
goals, challenges, and problems, rather
than through restrictive design
specifications. They felt that this
approach maximizes an offeror’s
flexibility and allows an owner to
evaluate design-build teams’ innovation
and creativity in providing optimum
solutions. Moreover, they felt this
approach would capture owner
requirements more efficiently while
dramatically reducing statement of work
paperwork by more than 90 percent.
Response: DHS disagrees. The Coast
Guard has studied the one-step turnkey
design-build process and believes it to
be in the best interest of both the Coast
Guard and the government to adopt this
streamlined acquisition method. The
potential spectrum of one-step designbuild projects is broad and could
involve a performance-based design that
complements the efficiencies that a onestep approach can provide in certain
situations.
Comment: One commenter wrote that
DHS should also encourage the U.S.
Coast Guard to include recognition of
designated Design-Build Professionals
VerDate Aug<31>2005
16:31 May 05, 2008
Jkt 214001
in the selection procedures in the
acquisition process.
Response: DHS agrees. The Coast
Guard will include this
recommendation in the guidance that it
prepares on the one-step turnkey design
build guidelines.
24883
contracts in accordance with 14 U.S.C.
677.
Thomas W. Essig,
Chief Procurement Officer, Department of
Homeland Security.
[FR Doc. E8–9900 Filed 5–5–08; 8:45 am]
BILLING CODE 4410–10–P
III. Regulatory Analyses
A. Executive Order 12866 Assessment
DHS has determined that this final
rule is neither a major rule under 5
U.S.C. 804 nor a significant regulatory
action under Executive Order 12866,
Regulatory Planning and Review. It
therefore does not require an assessment
of potential costs and benefits under
section 6(a)(3) of that Order, and the
Office of Management and Budget has
not reviewed it.
B. Regulatory Flexibility Act
Under the Regulatory Flexibility Act
(5 U.S.C. 601–612), the term ’’small
entities’’ comprises small businesses,
not-for-profit organizations that are
independently owned and operated and
are not dominant in their fields, and
governmental jurisdictions with
populations of less than 50,000. This
final 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.
List of Subjects in 48 CFR Part 3036
Government procurement.
Therefore, DHS amends 48 CFR part
3036 as set forth below:
I
PART 3036—CONSTRUCTION AND
ARCHITECT–ENGINEER CONTRACTS
1. The authority citation for 48 CFR
part 3036 continues to read as follows:
I
Authority: 41 U.S.C. 418(a) and (b).
2. Add subpart 3036.1 to read as
follows:
I
Subpart 3036.1—General
Sec.
3036.104 Policy.
3036.104–90 Authority for one-step turnkey design-build contracting for the
United States Coast Guard (USCG).
Subpart 3036.1—General
3036.104
Policy.
3036.104–90 Authority for one-step turnkey design-build contracting for the United
States Coast Guard (USCG).
The Head of the Contracting Activity
(HCA) of the U.S. Coast Guard may use
one-step turn-key selection procedures
to enter into fixed-price design-build
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 622
[Docket No. 040205043–4043–01]
RIN 0648–XG27
Fisheries of the Caribbean, Gulf of
Mexico, and South Atlantic; Reef Fish
Fishery of the Gulf of Mexico; Closure
of the 2008 Deepwater Grouper
Commercial Fishery
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Temporary rule; closure.
AGENCY:
SUMMARY: NMFS closes the commercial
fishery for deepwater grouper (misty
grouper, snowy grouper, yellowedge
grouper, warsaw grouper, and speckled
hind) in the exclusive economic zone
(EEZ) of the Gulf of Mexico. NMFS has
determined that the deepwater grouper
quota for the commercial fishery will
have been reached by May 10, 2008.
This closure is necessary to protect the
deepwater grouper resource.
DATES: Closure is effective 12:01 a.m.,
local time, May 10, 2008, until 12:01
a.m., local time, on January 1, 2009.
FOR FURTHER INFORMATION CONTACT:
Britni Tokotch, telephone 727–824–
5305, fax 727–824–5308, e-mail
Britni.Tokotch@noaa.gov.
The reef
fish fishery of the Gulf of Mexico is
managed under the Fishery
Management Plan for the Reef Fish
Resources of the Gulf of Mexico (FMP).
The FMP was prepared by the Gulf of
Mexico Fishery Management Council
and is implemented under the authority
of the Magnuson-Stevens Fishery
Conservation and Management Act
(Magnuson-Stevens Act) by regulations
at 50 CFR part 622. Those regulations
set the commercial quota for deepwater
grouper in the Gulf of Mexico at 1.02
million lb (463,636 kg) for the current
fishing year, January 1 through
December 31, 2008.
Under 50 CFR 622.43(a), NMFS is
required to close the commercial fishery
SUPPLEMENTARY INFORMATION:
E:\FR\FM\06MYR1.SGM
06MYR1
Agencies
[Federal Register Volume 73, Number 88 (Tuesday, May 6, 2008)]
[Rules and Regulations]
[Pages 24881-24883]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-9900]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
48 CFR Part 3036
[Docket No. DHS-2007-0024]
RIN 1601-AA44
Department of Homeland Security Acquisition Regulation; One-Step
Turnkey Design-Build Contracts for United States Coast Guard (HSAR Case
2007-002)
AGENCY: Department of Homeland Security.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Homeland Security (DHS or Department) is
amending the Homeland Security Acquisition Regulation (HSAR) to
incorporate delegation of one-step turnkey design-build authority from
the Secretary of Homeland Security to the United States Coast Guard
(USCG or Coast Guard). This rule implements changes that result from
the USCG Authorization Act for Fiscal Year 2006.
DATES: Effective May 6, 2008.
FOR FURTHER INFORMATION CONTACT: Kathy Strouss, Department of Homeland
Security, Office of the Chief Procurement Officer, Acquisition Policy
and Legislation, (202) 447-5300.
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of Public Comments
III. Regulatory Analyses
A. Executive Order 12866 Assessment
B. Regulatory Flexibility Act
I. Background
Under the United States Coast Guard (USCG) Authorization Act for
Fiscal Year 2006, the Secretary of Homeland Security was authorized to
use one-step turnkey design-build procedures when entering into
construction contracts. See Public Law 109-241, sec. 205. On July 13,
2007, DHS published a proposed rule, which would amend the Department
of Homeland Security Acquisition Regulation (HSAR) to incorporate the
delegation of turnkey design-build authority from the Secretary of
Homeland Security to the United States Coast Guard. See 72 FR 38548.
DHS adopts the proposed rule as a final rule without change.
II. Discussion of Public Comments
DHS received public comments from 6 sources on the proposed rule.
The public comments received and the responses are summarized below:
Comment: Several comments were opposed to this HSAR revision, which
would incorporate the delegation of one-step turnkey design-build
procedures authority from the Secretary of Homeland Security to the
United States Coast Guard. Most commenters fully understood that DHS
issued the proposed rule to implement changes enacted by Congress in
section 205 of Public Law 109-241; however, the commenters still urged
DHS not to adopt the proposed regulation, believing instead that the
Department should continue to follow the two-phase design-build
procedures laid out in the Federal Acquisition Reform Act (FARA) of
1996.
Response: DHS disagrees. The Coast Guard has studied the one-step
turnkey design-build process and is fully convinced that it is in the
best interest of both the Coast Guard and the government to adopt this
streamlined acquisition method. The Coast Guard delegation of one-step
turnkey design-build authority is consistent with section 205 of Public
Law 109-241. Each construction acquisition is unique, and one-step
turnkey design-build methods will be used where it is reasonable,
prudent, and offers the best contracting strategy for the Coast Guard.
Comment: Other comments fully supported the adoption of a universal
design-build methodology for all federal design-build projects. The
commenters wrote, however, that the adoption of a turnkey design-build
(one-step) method would unnecessarily confuse the private sector with
conflicting procurement methodologies.
Response: DHS disagrees. The private sector is very familiar with
one-step turnkey design-build and has been using the process for years.
The private sector has gained experience with one-step design-build use
at other federal agencies, such as the Department of Defense (DoD) and
the Department of Transportation.
Comment: One commenter reminded DHS that the Federal Acquisition
Regulation (FAR) Part 36 governs the use of two-phase design-build
[[Page 24882]]
procedures for construction contracting and is the only design-build
method that is currently allowed under the FAR. This commenter believes
that any deviation from the current guidance in FAR part 36 is not
authorized by Congress. The commenter requests that the USCG comply
with the current laws and intent of Congress in this regard. Another
commenter had concerns about the implications of the proposed rule. The
commenter highlighted the fact that ``Unless the less complex
facilities are truly less complex and do not require extensive designs,
the costs to the small business of a one stage procedure could and
would be more expensive and may limit competition from small
business.'' The commenter also indicated that this proposed rule did
not provide enough specificity as to provide adequate notice to the
public regarding changes proposed. The commenter urged the Department
to reissue a proposed rule with greater specificity (rather than issue
a final rule) and to extend the comment period.
Response: DHS does not believe one-step turnkey design-build will
place an undue burden on small business. Since one purpose of the rule
is to provide the Coast Guard with cost and time efficiencies for small
construction projects, the rule should also afford small construction
companies with an opportunity to successfully compete for such
projects. DHS did not extend the comment period for this proposed rule,
because DHS does not believe that any additional time is necessary. DHS
believes that the comment period provided was sufficient.
Comment: DHS received several comments regarding the type of
projects to be completed under turnkey. Specifically, commenters wanted
to know what constituted a ``complex facility'' versus a ``simple
design'' and wanted DHS to elaborate further on the types and size of
facilities to be included under the proposed turnkey acquisition
methodology.
Response: The Coast Guard will consider all types of facilities and
projects under turnkey acquisition procedures. The final acquisition
method for each project is not finalized until all acquisition planning
is complete. The DHS advanced acquisition planning database (located at
https://www.fido.gov) contains a complete listing of Coast Guard
construction projects scheduled for each fiscal year. In addition, the
Coast Guard will be developing internal guidelines to ensure that all
of its construction offices follow standards in executing one-step
turnkey design-build authority.
Comment: DHS received a few comments regarding specific
implementation policy of two-phase design-build process. Several
commenters wrote that price should not enter into the evaluation until
after the qualifications of the applicants have been fully evaluated
and a shortlist of between three and five fully qualified firms are
identified. They wrote that under the proposed rule's one-step
selection procedure, price would be mingled with the qualifications.
The commenters also believed that a one-step selection process carries
numerous disadvantages for both the agency and for the contractors when
compared with the existing two-step process. The commenters wrote that
under a one-phase process, proposal costs would be escalated, because
all of the applicants would have to go through the complete cost
proposal process, unlike in two-step design-build process, where only
the short-listed firms have to prepare a cost proposal. The commenters
wrote that since cost proposals often require a significant pre-
contract design effort, there would be a need for the Coast Guard (like
some federal agencies) to provide a stipend to the short-listed firms
which would increase costs for the agency. In addition, the commenters
thought that a one-phase design-build process would deny the Coast
Guard the innovation and creativity that is fostered by the two-step
selection process as competitors compete to provide the most ``value
added'' to their proposals. The commenters indicated that with an
unlimited number of competitors, relatively few firms will want to
invest the effort to be innovative and creative--especially smaller
firms with emerging talent.
Response: A historical perspective of past Coast Guard construction
projects shows that the majority of construction projects have gone to
small businesses. The Coast Guard believes that, under one-step turnkey
design-build authority, construction projects will continue to go to
small businesses. Contract opportunities would still be available for
companies that meet their socio-economic status as specified in federal
statutes. This includes companies located in Historically Underutilized
Business Zones (HUBZone), companies eligible to receive federal
contracts under the Small Business Administration's 8(a) Business
Development Program, companies eligible as Service-Disabled Veteran
Owned Small Business (SDVOSB) concerns, and other certified Small
Business (SB) concerns eligible for contract opportunities. The Coast
Guard anticipates that many of its one-step design build projects will
involve modest design efforts that will not substantially add to the
cost of a contractor's bid or proposal. The Coast Guard does not intend
to pay stipends related to costs for one-step turnkey design-build
proposal development.
Comment: DHS received several comments regarding contractor
selection and qualifications. Commenters wrote that if the Coast Guard
moves forward in implementing regulations on a one-phase design-build
process, then DHS should modify source selection procedures.
Response: If DHS were to follow the recommendation of these
commenters, DHS would render the one-step turnkey design-build program
into a two-step design-build program, thereby defeating the intent of
Congress in granting DHS the option of delegating one-step turnkey
design-build authority to the Coast Guard. The Coast Guard will base
all contract awards under one-step turnkey design-build authority on
Best Value Continuum Selection methods. In addition, the Coast Guard is
in the process of developing internal guidelines to ensure that all its
construction offices follow identical standards in executing one-step
turnkey design-build contracts. The guidelines will allow for program
standardization among all Coast Guard civil engineering units.
Comment: Two commenters recommended that DHS should add a provision
to the final rule to limit the use of the one-step design-build process
to projects that are ``less complex projects requiring little or
adaptive design with a maximum construction value of no more than $6
million.''
Response: The Coast Guard intends to utilize one-step turnkey
design-build authority on a case-by-case basis. Detailed acquisition
planning will determine the best procurement method to use for each
project undertaken by various Coast Guard civil engineering units. The
Coast Guard does not intend to limit one-step turnkey design-build
procedures to procurements falling within predetermined dollar ranges.
The Coast Guard will consider all projects regardless of dollar value.
Comment: A few commenters remarked that the FAR provision
implemented in ``Subpart 36.3--Two-Phase Design-Build Selection
Procedures'' should be the only governing provision. They remarked that
Congress has never authorized a waiver of or deviation from
qualifications based selection (QBS) for architecture, engineering and
related services and that Congress has
[[Page 24883]]
consistently endorsed and required use of this process (40 U.S.C. 1101
et seq. and FAR part 36.6).
Response: DHS disagrees. The USCG Authorization Act for Fiscal Year
2006 specifically authorizes the Secretary to use one-step turnkey
design-build procedures when entering into construction contracts. See
Public Law 109-241 section 205. In addition, in the past, the one-step
turn-key design-build procedures were authorized by Congress pursuant
to 10 U.S.C. 2862. This law allows DoD service secretaries (the
Secretary of the Army, the Secretary of the Air Force and the Secretary
of the Navy) to use the one-step turnkey procedures for military
construction contracts. The purpose of this rule is to delegate
authority of the Secretary of Homeland Security under section 205 of
Public Law 109-241 (14 U.S.C. 677) to the Coast Guard.
Comment: A few comments took exception with the notion that the
two-phrase design-build selection process required by the FAR (48 CFR
36.6) results in a much longer process. They commented that the two-
phase design-build selection process is the most effective way to get
the best results using design-build contracting and works well for
large and small, simple and complex projects when used correctly. They
also felt that the most effective way for an owner to communicate
desired project outcomes is through the use of performance-based
requirements, which describe the nature of the project in terms of
desire performance outcomes and an owner's goals, challenges, and
problems, rather than through restrictive design specifications. They
felt that this approach maximizes an offeror's flexibility and allows
an owner to evaluate design-build teams' innovation and creativity in
providing optimum solutions. Moreover, they felt this approach would
capture owner requirements more efficiently while dramatically reducing
statement of work paperwork by more than 90 percent.
Response: DHS disagrees. The Coast Guard has studied the one-step
turnkey design-build process and believes it to be in the best interest
of both the Coast Guard and the government to adopt this streamlined
acquisition method. The potential spectrum of one-step design-build
projects is broad and could involve a performance-based design that
complements the efficiencies that a one-step approach can provide in
certain situations.
Comment: One commenter wrote that DHS should also encourage the
U.S. Coast Guard to include recognition of designated Design-Build
Professionals in the selection procedures in the acquisition process.
Response: DHS agrees. The Coast Guard will include this
recommendation in the guidance that it prepares on the one-step turnkey
design build guidelines.
III. Regulatory Analyses
A. Executive Order 12866 Assessment
DHS has determined that this final rule is neither a major rule
under 5 U.S.C. 804 nor a significant regulatory action under Executive
Order 12866, Regulatory Planning and Review. It therefore does not
require an assessment of potential costs and benefits under section
6(a)(3) of that Order, and the Office of Management and Budget has not
reviewed it.
B. Regulatory Flexibility Act
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), the term
''small entities'' comprises small businesses, not-for-profit
organizations that are independently owned and operated and are not
dominant in their fields, and governmental jurisdictions with
populations of less than 50,000. This final 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.
List of Subjects in 48 CFR Part 3036
Government procurement.
0
Therefore, DHS amends 48 CFR part 3036 as set forth below:
PART 3036--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
0
1. The authority citation for 48 CFR part 3036 continues to read as
follows:
Authority: 41 U.S.C. 418(a) and (b).
0
2. Add subpart 3036.1 to read as follows:
Subpart 3036.1--General
Sec.
3036.104 Policy.
3036.104-90 Authority for one-step turn-key design-build contracting
for the United States Coast Guard (USCG).
Subpart 3036.1--General
3036.104 Policy.
3036.104-90 Authority for one-step turn-key design-build contracting
for the United States Coast Guard (USCG).
The Head of the Contracting Activity (HCA) of the U.S. Coast Guard
may use one-step turn-key selection procedures to enter into fixed-
price design-build contracts in accordance with 14 U.S.C. 677.
Thomas W. Essig,
Chief Procurement Officer, Department of Homeland Security.
[FR Doc. E8-9900 Filed 5-5-08; 8:45 am]
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