General Services Acquisition Regulation; GSAR Case 2006-G507; Rewrite of GSAR Part 538, Federal Supply Schedule Contracting, 4596-4632 [E9-1096]

Agencies

• General Services Administration

[Federal Register Volume 74, Number 15 (Monday, January 26, 2009)]
[Proposed Rules]
[Pages 4596-4632]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-1096]



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Part IV





General Services Administration





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48 CFR Part 538



General Services Acquisition Regulation; GSAR Case 2006-G507; Rewrite 
of GSAR Part 538, Federal Supply Schedule Contracting; Proposed Rule

Federal Register / Vol. 74, No. 15 / Monday, January 26, 2009 / 
Proposed Rules

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GENERAL SERVICES ADMINISTRATION

48 CFR Part 538

[GSAR Case 2006-G507; Docket 2009-0013; Sequence 1]
RIN 3090-AI77


General Services Acquisition Regulation; GSAR Case 2006-G507; 
Rewrite of GSAR Part 538, Federal Supply Schedule Contracting

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

ACTION: Proposed rule.

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SUMMARY: The GSA is proposing to amend the General Services 
Administration Acquisition Regulation (GSAR) to revise sections of the 
GSAR that provide requirements for Federal Supply Schedule Contracting 
actions.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat on or before March 27, 2009 to be considered in 
the formulation of a final rule.

ADDRESSES: Submit comments identified by GSAR Case 2006-G507 by any of 
the following methods:
     Regulations.gov: https://www.regulations.gov.
    Submit comments via the Federal eRulemaking portal by inputting 
``GSAR Case 2006-G507'' under the heading ``Comment or Submission''. 
Select the link ``Send a Comment or Submission'' that corresponds with 
GSAR Case 2006-G507. Follow the instructions provided to complete the 
``Public Comment and Submission Form''. Please include your name, 
company name (if any), and ``GSAR Case 2006-G507'' on your attached 
document.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VPR), 1800 F Street, NW., Room 4041, ATTN: Hada Flowers, 
Washington, DC 20405.
    Instructions: Please submit comments only and cite GSAR Case 2006-
G507 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 
Mr. Warren Blankenship at (202) 501-1900, or by e-mail at 
warren.blankenship@gsa.gov. For information pertaining to the status or 
publication schedules, contact the Regulatory Secretariat (VPR), Room 
4041, GS Building, Washington, DC 20405, (202) 501-4755. Please cite 
GSAR Case 2006-G507.

SUPPLEMENTARY INFORMATION: 

A. Background

    The General Services Administration is amending the General 
Services Administration Acquisition Regulation (GSAR) to update the 
text addressing GSAR Part 538, Federal Supply Schedule Contracting: 
Subpart 538.1, Definitions; Subpart 538.4, Administrative Matters; 
Subpart 538.7, Acquisition Planning; Subpart 538.9, Contractor 
Qualifications; Subpart 538.12, Acquisition of Commercial Items--FSS; 
Subpart 538.15, Negotiation and Award of Contracts; Subpart 538.17, 
Administration of Evergreen Contracts; Subpart 538.19, FSS and Small 
Business Programs; Subpart 538.25, Requirements for Foreign Entities; 
Subpart 538.42, Contract Administration and Subpart 538.43, Contract 
Modifications. This rule is a result of the GSA Acquisition Manual 
(GSAM) rewrite initiative undertaken by GSA to revise the GSAM to 
maintain consistency with the Federal Acquisition Regulation (FAR) and 
to implement streamlined and innovative acquisition procedures that 
contractors, offerors, and GSA contracting personnel can use when 
entering into and administering contractual relationships. The GSAM 
incorporates the GSAR as well as internal agency acquisition policy.
    The GSA is in the process of rewriting each part of the GSAR and 
GSAM, and as each GSAR part is rewritten, will publish it in the 
Federal Register.
    This proposed rule covers the GSAR portion of Part 538. The 
information in Subpart 538.2 is being retained; however, the various 
sections have been redistributed to more appropriate subparts within 
the text. Subpart 538.9, Contractor Qualifications, is being added to 
define the roles and responsibilities of ``Contractor Partnering 
Arrangements (CPAs)'' for contractors. Subpart 538.12, Acquisition of 
Commercial Items, has been added to outline solicitation provisions and 
clauses. This subpart was formerly 538.273--Contract clauses, but was 
moved to 538.1203 so as to align with the FAR. Aside from individual 
prescriptions, GSA has also included an overarching prescription that 
directs the contracting officer to insert appropriate provisions and 
clauses, when applicable. Additionally, 96 provisions/clauses are now 
proposed for inclusion. Some of the provisions/clauses are new, some 
are being retained, and others are being relocated from other GSAM 
parts.
    Subpart 538.15, Negotiation and Award of Contracts, has been added 
to provide clarity to FSS contracting officers regarding contract 
evaluation and award. The current section 538.270, Evaluation of 
multiple award schedule (MAS) offers, has been relocated to Subpart 
538.15. It contains minor revisions within the text to clarify the 
contracting officer's role as well as a revised title and section, 
538.1504, Evaluation of commercial pricing practices. Also, 538.272, 
MAS price reductions, has been revised for clarity. More specifically, 
the term ``eligible ordering activity'' has been changed to 
``Government'' to bring clarity to the relationship between the 
Government and the contractor, and to ensure that the contractor 
understands the importance of maintaining this correlation of price 
relationship for the duration of the contract. The revision can be 
found at section 538.1508.
    Subpart 538.25, Requirements for Foreign Entities, is added to 
advise contractors to submit commercial price lists in English and to 
allow for payments in local currency. Subpart 538.42, Contract 
Administration, is being added to advise the contractor to abide by the 
terms and conditions of the Industrial Funding Fee (IFF) and Sales 
Reporting Requirements when entering into ``Contractor Partnering 
Arrangements (CPAs),'' and to explain the process and procedures that 
should be followed when cancelling a contract at the contractor's 
request. Subpart 538.43, Contract Modifications, is added to provide 
guidance to the contractor when initiating a modification request to 
the Government.
    There were 36 public comments received in response to the Advanced 
Notice of Proposed Rulemaking.
    The first commenter recommended suggestions in regard to GSAR 
552.238-75, Price Reductions (May 2004) clause, the Commercial Sales 
Practices Format (CSPF) in GSAR 515.408, and figure 515.4, Instructions 
that accompany the CSPF. First, the commenter indicated that the 
failure to identify the customer (or category of customers) that formed 
the basis of award in the Price Reductions clause needs to be 
corrected.
    Response: Though the rewrite team reviewed this comment as 
substantive, it was unable to be addressed at this time. The team will 
confer with the Multiple Award Schedule Advisory Panel for possible 
recommendations. Second, the commenter indicated that more consistent 
parameters were needed for the ``Commercial Sales Practices'' 
disclosure section. GSAM Part 505 includes a GSAM Form 3617, Record of 
Authorization of Access to

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Proprietary or Source Selection Information, which the GSA contracting 
community will use to ensure that proprietary data is not released.
    The second commenter suggested that GSA be proactive in using GSAM 
Part 538 to address unresolved issues regarding GSA Schedule 
contracting. The GSA contractors have requested guidance and consistent 
policy on matters such as time and material task orders, and the extent 
to which G&A can be added to travel. Though some of these issues are 
addressed generally in the FAR, specific questions regarding 
application to Schedules contracting have remained unanswered, leading 
to inconsistent applications across the Schedules program.
    Response: The team's analysis of this comment is that it is outside 
the scope of this part. Currently, the Schedule's acquisition community 
uses FAR 52.232-7, Payments Under Time and Material, and FAR 31.205-46, 
Travel Costs, to address time and material task orders. However, 
specific guidance for contracting officers for time and material task 
orders is under internal review.
    The third commenter suggested that the GSAR should include coverage 
on Governmentwide Acquisition Contracts (GWACs) contracting and the use 
of GSA Assisted Service. Presently, the GSAR covers neither of these 
topics. Such areas of discussion, according to the commenter, should 
include criteria for establishing GWAC and/or assisted acquisition 
services, pricing objectives, and standard clauses. The commenter 
stated that adding GWAC coverage would enable the government to 
implement the best practices of individual offices across the entire 
program, afford GSA contractors an opportunity to streamline their 
internal corporate systems and processes, and result in better service 
and more cost efficient systems that may ultimately reflect in the 
Government's prices.
    Response: The Team's analysis of this comment is that it is outside 
the scope of this part. The team has referred this comment to the GSAM 
Part 516, Types of Contracts, team.
    The fourth commenter suggested that GSA resolve how the requirement 
to annually update the Central Contractor Registration (CCR) affects 
the position that small business size status is as of the time the 
offer is submitted. This problem stems from the number of corporate 
acquisitions and restructurings that continue to take place in the 
commercial marketplace. The commenter recommended that GSA rationalize 
the rules of FAR 42.12, GSAR 542.12 and the commercial item clause at 
FAR 52.212-4(p).
    Response: The team's analysis concludes that this comment is 
outside the scope of this part. This is a comment that would have 
Government-wide application.
    The fifth commenter suggested that the GSAR prescribe language to 
insert into GSA Schedule Price Lists on the topic of Size Status and 
the CCR. The language would inform agencies that, notwithstanding data 
in CCR, for purposes of ordering against the Schedule, a contractor is 
designated as small in size for the entire 5-year period of the 
Schedule contract. Schedule contractors are required to recertify size 
status at the time of renewal. Additionally, the commenter suggests 
that GSAR resolve how the requirement to annually update CCR affects 
the position that small business size status is currently determined at 
the time the offer is submitted.
    Response: The team's analysis concluded that guidance at FAR 
52.219-28, Post-Award Small Business Program Rerepresentation, 
appropriately addresses and provides guidance to the acquisition and 
contractor communities to ensure proper implementation of size 
considerations at various times during the contract. From time of 
submittal to award, offerors are required to maintain information in 
CCR as current and accurate.
    The sixth commenter suggested that GSA consider adding a section 
describing the purpose and objectives of Schedule contracting. Such a 
section would provide context and focus that could help improve 
consistency in the myriad of decisions that contracting officers have 
to make daily. For example, some contracting officers are attempting to 
compare prices offered by one company to prices of another for similar, 
but not identical, services and products. This process was found to be 
highly objectionable.
    Response: The team's analysis concludes that the rewrite of GSAM 
Part 538 will adequately provide contracting officers consistent 
guidance and policy.
    The seventh commenter suggested that GSA clarify the MAS pricing 
policy by deleting the term ``most favored customer (MFC)'' from this 
section of the GSAR.
    Response: The team does not concur with this comment because the 
convention of the term ``most favored customer'' still remains a viable 
practice across the FSS program.
    The eighth commenter suggested that the GSAR more specifically 
state the circumstances that warrant the Government getting a lower 
discount than commercial customers.
    Response: The team does not concur with this comment because 
section 538.1504, Evaluation of commercial pricing practices (formerly 
538.270), clearly outlines the criteria for the Government to seek a 
lower discount than commercial customers.
    The ninth commenter suggested that GSAR be revised to reflect that 
many MAS contracts are no longer awarded as a discount from catalog. 
This shift has occurred because more services have been introduced into 
the program.
    Response: The team concurs with this comment and has created a 
Commercial Sales Practices Format (CSP-2), GSAR 538.1203(c)(42) for 
``Professional Services'' to reflect contracts awarded for services.
    The tenth commenter suggested that the GSAR should limit (or give 
better guidance) as to the number of commercial customers that can be 
the basis of award.
    Response: The team does not concur with this comment. Current 
guidance as outlined in section 538.1504 allows the contracting officer 
the flexibility to analyze numerous factors to establish the customer 
for the basis of award.
    The 11th commenter suggested that GSA eliminate the Price 
Reductions Clause (552.238-75).
    Response: The team does not concur with this comment. In keeping 
with the philosophy of the FSS Program, this clause should remain. The 
team will await the results of the Multiple Award Schedule Advisory 
Panel's analysis and recommendations and will consider this when 
assessing the clause's validity within the program.
    The 12th commenter suggested that the GSAR should provide specific 
guidelines on the Schedule renewal process.
    Response: The team concurs with this comment and has added verbiage 
at GSAR 538.4202, Administration of Evergreen Contracts.
    The 13th commenter suggested that exceptions to the Price Reduction 
Clause be considered for situations where the Government is not 
negotiating discounts from a commercial price list; also, the commenter 
suggested that the Government give consideration to using price 
analysis and price acceptance from a vendor's average selling price.
    Response: The team partially concurs with this comment and has 
created a CSP-2 Format, GSAR 538.1203(c)(42) for ``Professional 
Services'' to reflect contracts awarded for services without a 
commercial price list. Also, the team will confer with the Multiple 
Award

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Schedule Advisory Panel for possible recommendations in this area.
    The 14th commenter recommended providing guidance on establishing 
relationships with dealers/distributors/ resellers under the FSS 
Program in terms of tracking customer selections.
    Response: The team does not concur with this comment. The Price 
Reductions Clause encompasses a mechanism for tracking customers in 
dealer/distributor/reseller situations. This can be accomplished under 
``category of customers.'' Further, the team will confer with the 
Multiple Award Schedule Advisory Panel for possible recommendations in 
this area.
    The 15th commenter suggested the addition of guidance on sales 
volume for vendor consideration under the FSS Program--Contract Award 
Sales Criteria Clause.
    Response: The team partially concurs with this comment. First, the 
team revised the Commercial Sales Practices Format (CSP-1) to bring 
clarity to the ``Instructions'' section, explaining that the 
contracting officer has the discretion to change offeror estimated 
sales to conform with the level of sales expectancy. The business 
decision will be based upon the contracting officer's analysis of the 
offeror's submission and a realistic evaluation of expected sales.
    The 16th commenter suggested adding guidance on how to handle 
teaming arrangements.
    Response: The team concurs with this comment and has added guidance 
on Teaming Arrangements, which will be entitled ``Contractor Partnering 
Arrangements (CPAs),'' and the team added guidance on the application 
of the CPAs to the Federal Supply Schedule Program.
    The 17th commenter suggested that FAR 52.212-4(s), Order of 
Precedence, be revised to resolve any inconsistencies discovered in the 
solicitation or resulting contract.
    Response: The team reviewed the comment and does not concur. This 
comment is deemed outside the scope of this part and should be resolved 
at the FAR level.
    The 18th commenter suggested adding the following verbiage to 
update GSAR 552.238-75, Price Reductions: ``The identified customer or 
category of customers may, but is not required to be, the Offeror's 
most-favored customer.'' The intent here is to clarify the 
misconception as to whether the tracking customer is required to be the 
MFC for a particular product or group of products or service.
    Response: The team does not concur with this comment, and feels 
that the addition of this verbiage would convolute the intent of the 
current Price Reductions Clause. Moreover, it would diminish the 
contracting officer's authority to establish a viable price/discount 
relationship with the offeror.
    The 19th commenter recommended that GSAR 552.238-75(a) be revised 
to be consistent with GSAR 538.272 to make clear that a change in the 
price/discount relationship between the eligible ordering activity and 
the tracking customer(s) does not trigger a price reduction under the 
clause unless that change also ``results in a less advantageous 
relationship'' for the Government.
    Response: The team does not concur with this comment and feels that 
the intent is clearly defined in the current Price Reduction Clause. 
Additionally, GSAR 538.272 has been proposed for deletion.
    The 20th commenter suggested deleting the verbiage ``with the same 
effective date and * * *'' from the Price Reductions Clause. The 
commenter suggested that this language be deleted because it is not 
feasible or realistic to require the contractor to make a revised price 
available to the Government with the ``same effective date'' as for the 
tracking customer.
    Response: The team reviewed the comment and does not concur. GSAR 
552.238-75 delineates as to the time period during which an FSS price 
reduction is required to be effective. It states that ``the contractor 
shall offer the price reduction to the Government with the same 
effective date, and for the same time period, as extended to the 
commercial customer (or category of customers).'' Thus, no change is 
warranted.
    The 21st commenter suggested that the GSAR be clarified to require 
that the parties express the relationship in the basis of award as a 
specific percentage or ratio, or any other objective measurement.
    Response: The team concurs with this comment and has added new 
verbiage to GSAR 538.1506-2, Price Negotiation Memorandum, which 
clarifies the relationship of the parties in terms of a percentage or 
ratio.
    The 22nd commenter stated that GSA sometimes requests commercial 
sales practices information from manufacturers of GSA resellers 
regardless of whether the reseller has significant sales to the general 
public, in an attempt to ascertain whether the reseller's proposed 
prices are fair and reasonable. Further, the commenter stated that, if 
the reseller has significant sales, the need for its manufacturer's 
sales information is negated. In this case, the commenter suggested 
that such requests for pricing information should be limited to pricing 
or other than cost and pricing information as provided by the reseller, 
who already has an existing competitive commercial sales practice. In 
the event that the reseller does not have significant commercial sales 
or otherwise lacks relevant pricing information, GSA may request other 
information from the reseller, such as the reseller's cost basis from 
the manufacturer, pricing information available under other GSA 
Schedules, or sales by other resellers of the manufacturer's products. 
Requiring pricing information from manufacturers is unnecessary and a 
source of considerable confusion within GSA and industry.
    Response: The team concurs with the commenter's scenarios in regard 
to resellers as offerors under the Federal Supply Schedule Program. If 
a reseller has significant sales to the general public for products 
and/or services being proposed by manufacturers which are represented 
by the resellers they represent, then they should follow the 
instructions provided in the CSP-1 with an established catalog price 
list. For resellers that do not have significant sales to the general 
public, the manufacturer's data shall be submitted in connection with 
the offer as documentation to support the contracting officer's 
determination of price reasonableness.
    The 23rd commenter suggests that GSA consider changing the way it 
administers the updates to the Federal Supply Schedules. Furthermore, 
the commenter suggests that the process is administratively burdensome 
for Schedule contractors and GSA contracting officers alike, and can 
create considerable confusion concerning which set of terms applies to 
a particular task or delivery order.
    Response: The team empathizes with the commenter; however, the FSS 
Program is constantly evolving. As new products and services are 
introduced as well as changes to any terms and conditions, the 
Government reserves the right to provide state-of-the-art technology to 
the end user. Therefore, spontaneous ``refreshment'' of solicitation 
and/or contract terms and conditions are inevitable and part of the 
acquisition process.
    The 24th commenter focused on section C.32 of the contract and GSAR 
552.246-73 (WARRANTY--MULTIPLE AWARD SCHEDULE (Mar 2000) (Alternate I--
May 2003)) as outlined in the Schedule 70 Solicitation. The commenter 
suggested that FAR 52.246-4 and FAR 52.246-6 are redundant with 
paragraph (a) of FAR 52.212-4.

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    Response: The team concurs with the commenter that the 
aforementioned clauses conflict, and that they should not be used in 
Schedule acquisitions. Adequate coverage can be found in FAR 52.212-4 
(Alternate I).
    Second, the commenter suggested that GSAR 552.246-73, which invites 
contractors to offer their commercial warranties to address post-
acceptance remedies, conflicts with the final sentence of paragraph (a) 
of 52.212-4.
    Response: The team concurs with this comment and believes that 
Schedule acquisitions should follow the procedures as outlined in FAR 
Part 12, Commercial Acquisitions, and GSAM Part 512, Acquisition of 
Commercial Items.
    Third, the commenter suggested that FAR 52.232-23 incorporated by 
reference and GSAR 552.232-23 should be removed because they conflict 
with FAR 52.212-4(b).
    Response: The team concurs with this comment because commercial 
acquisitions should use commercial terms and conditions as outlined in 
FAR Part 12, Commercial Acquisitions, and GSAM Part 512--Acquisition of 
Commercial Items.
    Fourth, this commenter focused on the ``Changes Clause'' at FAR 
52.212-4(c). Paragraph (c) of this clause does not make clear whether 
changes to the contract may be agreed to by an ordering activity and 
the contractor for purposes of a particular order.
    Response: The team does not concur with this comment. Subparagraph 
(c) indicates that all changes to the contract must be made only by 
written agreement between the parties. Commercial practices should be 
considered for incorporation into the solicitation/contract in 
accordance with FAR 12.213. If so indicated by market research that the 
aforementioned is appropriate for the acquisition of the particular 
item, an ordering activity may add additional terms and conditions to 
the order as long as the terms and conditions do not conflict with the 
base contract, as long as it is not precluded by law or executive 
order. Therefore, this requirement flows down to the task order level.
    The 25th commenter is concerned about excusable delays, more 
specifically, GSA's change to paragraph (f) of FAR 52.212-4 by 
substituting the words ``ordering activity'' for ``Government'' in the 
standard FAR version. Although this change is appropriate in other 
areas of the clause, it is not appropriate to describe force majeure 
events. Typically, a force majeure clause recognizes that a superseding 
event could arise from any part of the Government rather than solely 
from the ordering activity. Further, the commenter stated that the 
clause might be read to create automatic liability for default of the 
entire contract for a nonperformance event with a single order.
    Response: After careful review of this comment, the team was unable 
to clearly ascertain the rationale. It appears that GSA changed the 
text as mentioned above; however, without supporting documentation, the 
team could not provide a substantive response. ``The standard FAR text 
of paragraph (f) of 52.212-4 contains the word ``Government.'' Based on 
the comment, it appears that GSA deviated from this verbiage and 
substituted ``ordering activity.'' The team's interpretation of this 
comment is that the change was made to accommodate cooperative and 
recovery purchasing. The rationale is that a force majeure event can 
only be determined at the order level and would only apply to that 
order. It does not apply to the entire Schedule contract.
    The 26th commenter was concerned about contract invoicing. The 
commenter suggested that the unlabelled paragraph after (g)(1), but 
before (g)(2), of GSA's deviation to FAR 52.212-4 addresses electronic 
funds transfer. FAR 52.232-33 (PAYMENT BY ELECTRONIC FUNDS TRANSFER--
CENTRAL CONTRACTOR REGISTRATION (Oct 2003)) should be integrated within 
this portion of the clause to simplify the contract. The commenter 
recommended deleting FAR 52.232-33 and changing the relevant section of 
FAR 52.212-4 to more assertively and clearly incorporate FAR 52.232-33, 
unless an ordering activity indicates otherwise. Additionally, 
paragraph (d) of GSAR 552.232-74 (INVOICE PAYMENTS (Sep 1999)) changes 
the requirement in FAR 52.212-4(g)(1) from having to provide three 
copies of the invoice to having to provide only one original invoice.
    Response: The team concurs with the comment and agrees that FAR 
52.232-33 should not be included in MAS solicitations because FAR 
52.212-4 contains the appropriate invoicing information. The issue of 
the number of copies of invoices required is outside the scope of this 
part.
    The 27th commenter was concerned about risk of loss. The commenter 
recommends that GSA consider whether the various delivery and packaging 
requirements can be simplified to clearly require delivery and 
packaging that comports with the contractor's standard commercial 
practices.
    Response: The team concurs that the delivery requirements should be 
simplified. As such, the team determined that GSAR 552.211-75 and GSAR 
552.211-77 are not applicable under the MAS. However, the team believes 
that the MAS should include GSAR 552.211-78, which was deleted from 
GSAM Part 511 and added to this part.
    The 28th commenter stated that FAR clauses 52.229-1 (State and 
Local Taxes (Apr 1984) (Deviation--May 2003)), 52.229-3 (Federal, 
State, and Local Taxes (Apr 2003) (Deviation--May 2003)), 52.229-5 
(Taxes--Contracts Performed in U.S. Possessions or Puerto Rico (Apr 
1984)), and 52.229-71 (Federal Excise Tax--DC Government (Sep 1999)) 
appear to be in conflict.
    Response: The team, believes, however that a careful reading of the 
language makes clear GSA's apparent intent to exclude all applicable 
Federal, State, and local taxes and duties, except after imposed or 
relieved Federal taxes. Additionally, FAR 52.229-71, which is 
incorporated into the contract in section C.2 of the contract, is not 
reflected in current regulations. The team concurs that FAR 52.212-4(k) 
should not be modified. However, FAR 52.212-5 still remains a viable 
clause in the FSS program. Additionally, FAR 52.229-71 was cited 
incorrectly and should be noted as GSAR 552.229-71 (Federal Excise 
Tax--DC Government). This clause will remain as an incorporated by 
reference clause under GSAR 552.212-71.
    The 29th commenter suggested that GSA establish a central location 
for all contract clauses that it includes in FSS and GWAC contracts. 
The commenter's concern is that there is no single publication, Web 
site, or other resource where all of the different types of contract 
clauses can be reviewed. Publishing all of them in a central location, 
according to the commenter, will make the contract formation process 
more transparent and administratively less burdensome.
    Response: The team concurs with this comment. The GSA's rewrite of 
the GSAM will accomplish this feat by relocating all of the FSS's 
clauses and provisions from its current clause manual to GSAM Part 538. 
This is inclusive of other FSS clauses and provisions that are 
currently found in other GSAM parts. Consequently, this will bring 
consistency to the program, providing a one-stop approach to FSS policy 
and guidance.
    The 30th commenter suggested revisions to the GSAR to make it more 
consistent with the FAR and to eliminate inconsistencies and 
redundancies between the FAR and GSAR. Specifically, the commenter

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focused on FAR clauses 52.246-4 (Inspection of Services--Fixed Price 
(Aug 1996) (Deviation--May 2003)) and 52.246-6 (Inspection-Time and 
Material and Labor-Hour (May 2001) (Deviation--May 2003)) as well as 
GSAR clause 552.246-73 (Warranty--Multiple Award Schedule (Mar 2000) 
(Alternate I--May 2003)). The commenter noted that the aforementioned 
clauses conflict and are redundant with paragraph (a) of FAR 52.212-4. 
Moreover, GSAR 552.246-73, which invites contractors to offer their 
commercial warranties to address post-acceptance remedies, according to 
the commenter, conflicts with the final sentence of paragraph (a) of 
FAR 52.212-4. The commenter suggested that the clauses be reconciled or 
deleted to the extent that they are redundant. As such, paragraph (a) 
could be limited in application to products under particular Special 
Identification Numbers (SINs)--as opposed to services--to easily 
alleviate the patent conflict between the FAR clauses as to the 
inspection and acceptance of services. Also, the final sentence of 
paragraph (a) should be changed to reference the post acceptance rights 
contemplated under the contractor's commercial warranty pursuant to 
GSAR 552.246-73. A suggested change might read as follows: ``The 
ordering activity must exercise any post acceptance rights pursuant to 
contractor's commercial warranty incorporated into this contract under 
C.32. If no such commercial warranty is incorporated, then the ordering 
activity must exercise its post acceptance rights (1) within a 
reasonable time after the defect was discovered or should have been 
discovered; and (2) before any substantial change occurs in the 
condition of the item, unless the change is due to the defect in the 
item.'' Alternatively, the commenter believes that the final sentence 
of paragraph (a) should be deleted altogether as the post acceptance 
rights to which it refers are unclear.
    Response: The team partially concurs with this comment. An attempt 
to revise paragraph (a) of FAR 52.212-4 would require a FAR Case and 
consensus from the Department of Defense (DoD) and Civilian agencies. 
This is outside the scope of this part. However, GSAR 552.246-73 is 
sufficient in supplementing the FAR because it provides policy 
regarding placement of the burden of defective items on the contractor 
for a specific timeframe (90 days) as opposed to FAR 52.212-4(a) which 
states ``within a reasonable time.'' This is inclusive of 
transportation to and from site as well as onsite repair.
    The 31st commenter raised a concern about GSAR 552.232-23 
(Assignment of Claims (Sep 1999)) conflicting with and supplementing 
paragraph (b) of FAR 52.232-23. The GSAR at 552.232-23 incorporates FAR 
52.232-23, but whereas FAR 52.232-23 permits assignment of any amount 
under the contract to a bank, trust company or financial institution, 
GSAR 552.232-23 changes the first paragraph of FAR 52.232-23 to permit 
assignment of amounts due under any order of $1000 or more. Although 
the GSAR clause refers to the indefinite delivery/indefinite quantity 
nature of the GSA Schedule Contract as a rationale, it is unclear if 
the $1000 limitation remains relevant today; the vast majority of 
orders are well above $1000. The change in nomenclature between the 
contract and order is appropriate and provides the parties more 
flexibility than a reference to the entire GSA Schedule Contract might. 
The recommendation here is that section C.21 of the contract should be 
deleted and paragraph (b) of FAR 52.232-23 should be changed to conform 
to the order concept. The GSAR clause 552.232-23, including the $1000 
limitation, should be eliminated. Thus, FAR paragraph 52.232-23(b) 
might read: ``The Contractor or its assignee may assign its rights to 
receive payment due as a result of performance of this contract, or any 
order hereunder, to a bank, trust company, or other financing 
institution, including any Federal lending agency in accordance with 
the Assignment of Claims Act (31 U.S.C. 3727).'' Nevertheless, when a 
third party makes payment (e.g., use of a credit card), the contractor 
may not assign its rights to receive payment under this contract.
    Response: The team does not concur with this comment. The $1000 
limitation would not apply to most orders, but still remains relevant 
when purchasing office supplies under the program. Further, the 
recommendation that section C.21 of the contract should be deleted and 
that paragraph (b) of FAR 52.232-23 be changed to conform to the order 
concept is outside the scope of this part. This would require a 
collaborative decision between DoD and GSA at the FAR level.
    The 32nd commenter noted that, on the topic of Termination for the 
Ordering Activity's Convenience, the clause is ambiguous due to the use 
of the word ``hereof.'' The commenter is concerned that it could be 
read to suggest that the ordering activity has the ability to terminate 
the underlying GSA Schedule contract, rather than merely the order. 
Thus, the commenter's recommendation is that the first sentence should 
be clarified, consistent with GSA's intent, to refer to an ``order'' 
rather than the GSA Schedule Contract, by changing the terms ``hereof'' 
to ``thereof'' and ``hereunder'' to ``thereunder.''
    Response: The team partially concurs with this comment. Though the 
change in verbiage would adequately distinguish ``contract'' from 
``order,'' this change is outside the scope of this part. It would 
require a collaborative decision between DoD and GSA at the FAR level.
    The 33rd commenter focused on FAR 52.212-4(m) addressing the topic 
of Termination for cause, particularly GSAR clause section C.34 
contract Default (I-FSS-249-B) (May 2000). The commenter is concerned 
that the use of the word ``hereof'' in this clause is somewhat 
ambiguous with regard to the ordering activity's ability to terminate 
the underlying GSA Schedule Contract, rather than merely the order. The 
commenter's suggestion is that the first sentence should be clarified 
so as to be consistent with GSA's intent by referring to an ``order'' 
rather than the GSA Schedule Contract and by changing the word 
``hereof'' to ``thereof.''
    Response: The team partially concurs with this comment. Though the 
change in verbiage would adequately distinguish ``contract'' from 
``order,'' this change is outside the scope of this part. It would 
require a collaborative decision between DoD and GSA at the FAR level.
    The 34th commenter focused on FAR 52.212-4(p) addressing Limitation 
of Liability. Of particular note was GSA's deviation to paragraph (p) 
which does not permit an exclusion of consequential damages for implied 
warranty claims. As the commenter notes, the FAR version of this clause 
does not include the language ``or implied warranty'' in the first 
sentence of the clause, thereby excluding consequential damages from 
implied warranty claims.
    Further, the commenter believes that there does not seem to be any 
reason for GSA's different approach, particularly because most 
companies exclude all implied warranties in their commercial warranty 
provisions--exclusions that GSA presumably accepts under GSAR 552.246-
73, which, as explained above, invited the contractor to provide its 
commercial warranty. The commenter's recommendation is that the clause 
should at least revert to the standard paragraph (p) at FAR 52.212-4--
GSA's deviation does not make sense in the context of GSAR 552.246-73. 
Moreover,

[[Page 4601]]

as suggested previously by the section, the limitation of the exclusion 
of consequential damages to only defects or deficiencies in accepted 
items provides a gap in coverage for unaccepted items, which is 
inconsistent with commercial practice and prior versions of the clause.
    Response: The team proposes maintaining clauses at FAR 52.212-4(p) 
and GSAR 552.246-73; they include the standard commercial warranty. A 
deviation is not necessary.
    The 35th commenter seeks clarification of the application of the 
Buy American Act (BAA) and the Trade Agreements Act (TAA). The 
commenter is concerned that contractors receive consistent treatment 
under the law and applicable regulations. Knowing when the BAA and TAA 
apply and how their respective tests will be applied to products or 
services is of great importance to contractors. Contractors selling 
commercial items to the Federal Government generally do not manufacture 
their products based on the origin of supplies or manufacturing 
location. The Government, however, requires such contractors to 
consider these things when they contract to sell commercial products to 
the Federal Government. Making it easier for contractors to know and 
understand how the rules will be applied can only improve the 
procurement system. This is particularly important because an 
inaccurate certification can result in loss of monies, contracts, 
serious civil and criminal penalties, or both. The commenter feels that 
there is uncertainty as to whether the BAA or TAA applies to a 
procurement. The TAA dollar-value applicability threshold, which is set 
out in FAR 25.402, can vary according to whether the country of origin 
is a Free Trade Agreement (FTA) country and whether the contract is for 
supplies, services, or construction. Generally, the BAA applies to 
contracts below the applicable TAA threshold, and the TAA waives 
application of the BAA to contracts at or above the applicable TAA 
threshold. But it is unclear whether the TAA threshold applies to the 
total contract value, the individual Contract Line Item value, or the 
delivery or task order value. FAR 25.402(b) and 25.403(b) identify the 
TAA and FTA thresholds and how they ought to apply to specific types of 
contracts, but it is the commenter's understanding that contracting 
officers routinely (and perhaps not reasonably) interpret these 
provisions differently. Is it GSA's belief that the TAA applies to each 
order regardless of order amount and what is the reason for this 
belief?
    Response: The team agrees that the TAA and BAA apply to the total 
value of the contract, regardless of individual order value. 
Specifically, as identified in FAR 25.403(b)(3), if, in any 12-month 
period, recurring or multiple awards for the same type of product or 
products are anticipated, the contracting officer is to use the total 
estimated value of these projected awards to determine whether the 
World Trade Organization (WTO), Government Procurement Agreement (GPA) 
or an FTA applies. Acquisitions should not be divided with the intent 
of reducing the estimated value of the acquisition below the dollar 
threshold of the WTO, GPA or an FTA.
    The 36th commenter was concerned about Alternate I of GSAR clause 
552.232-77 (Payment by Governmentwide Commercial Purchase Card), and 
GSAR clause 552.232-79 (Payment by Credit Card) and their impact on 
small businesses. The commenter states that, with the exception of FSS 
Schedule 70 (Information Technology) contracts, GSAR 532.7003 requires 
contracting officers to insert Alternate I of the clause at GSAR 
552.232-77 in FSS schedule solicitations and contracts. Moreover, for 
FSS Schedule 70 solicitations and contracts, GSAR 532.7003 requires 
contracting officers to include clause 552.232-79. The GSAR clause at 
552.232-77, without Alternate I, permits government orders using the 
Governmentwide commercial purchase card if agreeable to the contractor. 
Alternate I of that clause, however, provides that the FSS contractor 
must accept the Governmentwide commercial purchase card for payments 
equal to or less than the micro-purchase threshold ($2500). Likewise, 
clause 552.232-79 provides that Schedule 70 contractors must accept 
credit card orders (including the Governmentwide commercial purchase 
card) for payments equal to or less than the micro-purchase threshold. 
Consequently, the commenter felt that this mandate may be problematic 
for some companies. Through reports, it was outlined that credit card 
companies do not permit companies participating in their programs to 
discriminate by accepting their cards from some customers and not 
others. Consequently, the requirement contained in Alternate I of GSAR 
552.232-77 and in GSAR 552.232-79 for contractors to accept Government 
payment by the Governmentwide commercial purchase card may have the 
effect of compelling these contractors to accept credit card payments 
from all commercial customers as well. Therefore, the commenter 
recommends that GSA examine the current requirement in Alternate I of 
the clause to determine its impact and the burden it poses for 
contractors and potential contractors, especially small businesses that 
have chosen not to accept payment by credit card from their commercial 
customers in order to avoid the fees charged by the credit card 
companies.
    Response: The team does not concur with this comment. Under GSAR 
Clause 552.232-77, Alternate I, GSA mandates that the Contractor must 
accept use of the Governmentwide commercial credit card for payments 
equal to or less than the micro-purchase threshold as part of the FSS 
program. This mandate leverages the streamlined and more efficient 
transaction process use of the credit card. Offerors should consider 
this mandate before submitting an offer under the FSS program. The 
clause has been a final rule since March 2, 2000, and does not seem to 
have adversely impacted the number of small businesses under the FSS 
Program, as nearly 80 percent of FSS contractors are small business. 
According to the GSA purchase card Web site, the Government saves on 
administrative processing costs by using the purchase card rather than 
traditional purchase orders. Further, use of the purchase card ensures 
timely payment to merchants who do business with the Federal 
Government. Merchants are paid for credit card transactions within 48 
hours of submitting the transaction to the card network. This is a vast 
improvement to the lengthy invoicing and payment process without cards 
and improves cash flow to merchants most in need, especially small 
businesses. However, the team is currently coordinating with the GSA 
Purchase Card office to track any issues and/or concerns that may have 
arisen based on current requirements.
    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 changes may 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 proposed rule will 
implement a number of provisions and clauses that are the same 
provisions and clauses currently in use in FSS solicitations and 
contracts. However, the provisions and clauses have never been vetted 
to the

[[Page 4602]]

public for comment, and must be approved by the Office of Management 
and Budget under the Paperwork Reduction Act.
    An Initial Regulatory Flexibility Analysis (IRFA) has been 
prepared. The analysis is summarized as follows:

    This Initial Regulatory Flexibility Analysis has been prepared 
consistent with the criteria of 5 U.S.C. 604.
    1. Description of the reasons why action by the agency is being 
considered.
    GSAM coverage in Part 538 does not currently include internal 
policy and guidance issued in other forms such as Acquisition 
Letters, Procurement Information Bulletins (PIBs), Procurement 
Information Notices (PINs), Instructional Letters and the Supply 
Operations Handbook (FAS P 2901.2A). This internal FSS guidance has 
never been fully vetted to the regulatory level for analysis, 
thereby bringing about conflict and overlap within the Program. 
Therefore, under conventions of the General Services 
Administration's (GSA) rewrite of the General Services 
Administration Manual (GSAM), the rule proposes to implement this 
policy and guidance for the Federal Supply Schedule (FSS) Program.
    2. Succinct statement of the objectives of, and legal basis for, 
the proposed rule.
    The objective of the proposed rule is to implement policy and 
guidance currently used in Federal Supply Schedule solicitations and 
contracts. Essentially, the goal of the new rule is to make the 
process more efficient by reducing duplication of effort and to 
ensure currency and consistency within the program for the 
acquisition of supplies and services.
    3. Description of, and where feasible, estimate of the number of 
small entities to which the proposed rule will apply.
    The proposed rule will affect large and small businesses, which 
are awarded GSA FSS contracts. The Program contains over 17,000 
long-term governmentwide contracts with commercial firms that 
provide over 11 million supplies and services. Approximately eighty-
one percent (13,770) of GSA FSS contracts are small businesses. Over 
$13 billion (37 percent) of sales under the Program in FY07 went to 
small businesses, which is well above the 23 percent governmentwide 
goal. There are a total of 39 Schedules, with 17 possessing an array 
of Special Item Numbers (SINs) set-aside for small businesses. 
Overall, small businesses have benefited from GSA providing 
education and access to the Federal marketplace via the Pre-award 
phase (Pathway to Success), the Post-award phase (New Contractor 
Orientation), and Contractor Assistance Visits (CAVs). Additionally, 
this proposed rule contains changes such as the addition of a 
Commercial Sales Practices Format for Supplies/Services without an 
Established Catalog Price, which will assist in facilitating ease-
of-use in the preparation of offers from prospective Contractors, 
inclusive of small business concerns. FSS contracts are negotiated 
as volume purchase agreements, with generally very favorable 
pricing. The ability of small businesses to be awarded under the FSS 
Program has enabled them to grow in the Federal marketplace as well 
as realize significant cost savings.
    4. Description of projected reporting, recordkeeping, and other 
compliance requirements of the proposed rule, including an estimate 
of the classes of small entities that will be subject to the 
requirement and the type of professional skills necessary for 
preparation of the report or record.
    This rule will not pose 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 
proposed rule will implement a number of provisions/clauses that are 
the same provisions/clauses currently in use in FSS solicitations 
and contracts. However, the provisions/clauses have never been 
vetted to the public for comment, and must be approved by the Office 
of Management and Budget under the Paperwork Reduction Act.
    5. Identification, to the extent practicable, of all relevant 
Federal rules that may duplicate, overlap or conflict with the 
proposed rule.
    The proposed rule when finalized does not duplicate, overlap, or 
conflict with any other Federal rules.
    6. Description of any significant alternatives to the proposed 
rule that accomplish the stated objectives of applicable statutes 
and that minimize any significant economic impact of the proposed 
rule on small entities.
    There are no practical alternatives that will accomplish the 
objective of this rule.

    The Regulatory Secretariat has submitted a copy of the IRFA to the 
Chief Counsel for Advocacy of the Small Business Administration. A copy 
of the IRFA may be obtained from the Regulatory Secretariat. The GSA 
will consider comments from small entities concerning the affected GSAR 
part 538 in accordance with 5 U.S.C. 610. Comments must be submitted 
separately and should cite 5 U.S.C 601, et seq. (GSAR Case 2006-G507), 
in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) 
addresses the collection of information by the Federal government from 
individuals, small businesses and state and local governments and seeks 
to minimize the burdens such information collection requirements might 
impose. A collection of information includes providing answers to 
identical questions posed to, or identical reporting or recordkeeping 
requirements imposed on ten or more persons, other than agencies, 
instrumentalities, or employees of the United States. In accordance 
with the requirements of the Paperwork Reduction Act, agencies may not 
conduct or sponsor, and the respondent is not required to respond to, 
an information collection unless it displays a currently valid Office 
of Management and Budget (OMB) control number.
    The Paperwork Reduction Act does apply; however, these changes to 
the GSAR do not impose additional information collection requirements 
to the paperwork burden previously approved under OMB Control Numbers 
3090-0243 (GSAR 552.216-70), 3090-0250 (GSAR 552.238-70 and 552.238-
74), 3090-0262 (GSAR 552.238-72), 3090-0121 (GSAR 552.238-75), and 
3090-0204 (GSAR 552.211-78).
    However, GSA is requesting comments on a proposed information 
collection. The proposed information collection is representative of 
required process of Federal Supply Schedule (FSS) solicitations in 
order to negotiate and award contracts. Offerors submit solicitations 
either by hard copy or electronically through GSA's eOffer system at 
https://www.gsa.gov/eoffer.
    The Regulatory Secretariat will submit a request for approval of a 
new information collection requirement concerning Federal Supply 
Schedule Contracting to the Office of Management and Budget under 44 
U.S.C. 3501, et seq.

Annual Reporting Burden

    552.238-10--Additional Offer Submission Instructions (Federal 
Supply Schedules) (SCP-FSS-001), 552.238-11--Additional Evaluation 
Factors for Award of Services (CI-FSS-151), and 552.238-90--Dealers and 
Suppliers (I-FSS-644). The burden for the three clauses is combined, 
thereby constituting a total of 8 burden hours collectively. FSS 
Offerors are at liberty to submit offers for both supplies and 
services, which may be inclusive of acting as a Dealer/Reseller.
    Number of Respondents: 4,000.
    Responses per Respondent: 1.
    Annual Responses: 4,000.
    Average Burden per Response: 8.
    Total Burden Hours: 32,000.
    Public reporting burden for this collection of information is 
estimated to average 8 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    552.238-65--Commercial Sales Practices Format--Supplies and/or 
Services with an Established Catalog Price (CSP-1) and 552.238-66--
Commercial Sales Practices Format--Supplies and/or Services with Market 
Pricing Without an Established Catalog Price (CSP-2).
    Number of Respondents: 18,000.
    Responses per Respondent: 3.5.

[[Page 4603]]

    Annual Responses: 63,000.
    Average Burden per Response: 5.
    Total Burden Hours: 315,000.
    Public reporting burden for this collection of information is 
estimated to average 5 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    552.238-71--Submission and Distribution of Authorized FSS Schedule 
Price Lists, 552.238-15--Contract Price Lists (I-FSS-600), 552.238-61--
Price Lists/Brochures for Non-Commercial Items (I-FSS-602), and 
552.238-92--Dissemination of Information by Contractor (I-FSS-680).
    Number of Respondents: 18,000.
    Responses per Respondent: 3.5.
    Annual Responses: 63,000.
    Average Burden per Response: 5.
    Total Burden Hours: 315,000.
    Public reporting burden for this collection of information is 
estimated to average 5 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    552.238-58--GSA Advantage![supreg] (I-FSS-597) and 552.238-59--
Electronic Commerce-FACNET (I-FSS-599).
    Number of Respondents: 16,634.
    Responses per Respondent: 3.5.
    Annual Responses: 58,219.
    Average Burden per Response: 2.
    Total Burden Hours: 116,438.
    Public reporting burden for this collection of information is 
estimated to average 2 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    552.238-69, Economic Price Adjustment--Supplies and/or Services 
with Market Prices without an Established Catalog Price (I-FSS-969).
    Number of Respondents: 11,000.
    Responses per Respondent: 1.
    Annual Responses: 11,000.
    Average Burden per Response: 1.
    Total Burden Hours: 11,000.
    Public reporting burden for this collection of information is 
estimated to average 1 hour per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.

D. Request for Comments Regarding Paperwork Burden

    Submit comments, including suggestions for reducing this burden, 
not later than March 27, 2009 to: GSA Desk Officer, OMB, Room 10102, 
NEOB, Washington, DC 20503, and a copy to the General Services 
Administration, Regulatory Secretariat (VPR), 1800 F Street, NW., Room 
4041, Washington, DC 20405.
    Public comments are particularly invited on: Whether this 
collection of information is necessary for the proper performance of 
functions of the GSAR, and will have practical utility; whether our 
estimate of the public burden of this collection of information is 
accurate, and based on valid assumptions and methodology; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways in which we can minimize the burden of the 
collection of information on those who are to respond, through the use 
of appropriate technological collection techniques or other forms of 
information technology.
    Requester may obtain a copy of the justification from the General 
Services Administration, Regulatory Secretariat (VPR), Room 4041, 
Washington, DC 20405, telephone (202) 208-7312. Please cite OMB Control 
Number 3090-XXXX, GSAR 2006-G507, Federal Supply Schedule Contracting, 
in all correspondence.

List of Subjects in 48 CFR Parts 538 and 552

    Government procurement.

    Dated: January 6, 2009.
Al Matera,
Director, Office of Acquisition Policy.

    Therefore, GSA proposes to amend 48 CFR parts 538 and 552 as set 
forth below:
    1. The authority citation for 48 CFR parts 538 and 552 continues to 
read as follows:

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

PART 538--FEDERAL SUPPLY SCHEDULE CONTRACTING

Subpart 538.2 [Removed]

    2. Remove Subpart 538.2, consisting of sections 538.270 through 
538.273.
    3. Add Subpart 538.9, consisting of section 538.906-3, to read as 
follows:

Subpart 538.9--Contractor Qualifications

Sec.
538.906-3 Roles and Responsibilities of a contractor partnering 
arrangement.


538.906-3  Roles and responsibilities of a contractor partnering 
arrangement.

    (a) The Contractor Partnering Arrangement document should outline 
all FSS partners. The lead partner is responsible for identifying FSS 
contract numbers, Contractor's point-of-contact information, and 
information about what each partner is responsible for at each phase of 
the project. Each partner is responsible for the terms and conditions 
of its respective FSS contract, including any proposed unit prices or 
hourly rates.
    (b) The CPA is solely between or among the partners and cannot 
conflict with the underlying terms and conditions of each partner 
member's Schedule contract.
    (c) Schedule Contractors are responsible for crafting the CPA 
document. The Government is not involved in this process.
    (d) The CPA document should acknowledge that any dispute involving 
the distribution of payment between the lead partner and the team 
members will be resolved by all partners, without any involvement by 
the Government.
    4. Add Subpart 538.12, consisting of section 538.1203, to read as 
follows:

Subpart 538.12--Acquisition of Commercial Items--FSS

Sec.
538.1203 Solicitation provisions and contract clauses.


538.1203  Solicitation provisions and contract clauses.

    (a) Multiple and single award schedules. The following provisions 
are required for all Federal Supply Schedules. As prescribed below, 
insert the following Cover Page language prior to the beginning of FSS 
solicitations:
    (1) 552.238-1, Cover Page for Worldwide Multiple Award Schedules 
(CP-FSS-1-C). This provision is for both supply and service 
solicitations. For supplies, complete the information required by this 
paragraph (a) and delete paragraph (b) of this section in its entirety. 
For services, complete the information required by paragraph (b) and 
delete (a) in its entirety. For solicitations containing both supplies 
and services, complete paragraphs (a) and (b).
    (2) 552.238-2, Significant Changes (CP-FSS-2). This provision 
outlines to Offerors the most recent solicitation revisions since its 
previous posting to the Government's point of entry.
    (3) 552.238-3, Pricing (CP-FSS-19). This provision notifies 
Offerors that separate pricing may be submitted for different 
countries, if offered commercially.
    (4) 552.238-4, Notice of Total Small Business Set-Aside (A-FSS-31). 
This provision notifies small business

[[Page 4604]]

Offerors which Special Item Numbers (SINs) are set-aside.
    (5) 552.238-5, Information Collection Requirements and Hours of 
Operation (A-FSS-41). This provision informs Offerors that only 
required regulations are contained in the solicitation and the hours of 
operation.
    (6) 552.238-6, Notice: Requests for Explanation or Information (CP-
FSS-3). This provision contains the contact information to address 
questions regarding the solicitation.
    (b) Multiple and single award Schedules. As prescribed below, 
insert the following provisions as an addendum to 52.212-1, 
Instructions to Offerors--Commercial Items, in solicitations issued 
under FSS, when applicable:
    (1) 552.238-7, Estimated Sales (B-FSS-96). This provision instructs 
Offerors to provide the estimated annual sales anticipated under the 
Schedule.
    (2) 552.238-8, Consideration of Offers Under Standing Solicitation 
(A-FSS-11). This provision outlines to Offerors the Government's 
contemplation of awards under a standing solicitation.
    (3) 552.238-9, Period for Acceptance of Offers (A-FSS-12-C). This 
provision instructs the Offeror to insert the number of days that the 
offered pricing is firm.
    (4) 552.238-10, Additional Offer Submission Instructions (Federal 
Supply Schedules) (SCP-FSS-001). This provision clarifies how to submit 
solicitation responses.
    (5) 552.238-11, Additional Evaluation Factors for Award of Services 
(I-FSS-151). This provision provides clarification to Offerors on how 
solicitation responses for services will be evaluated.
    (6) 552.238-12, Submission of Offers--Additional Instructions (CI-
FSS-002). This provision outlines to Offerors additional instructions 
on how to submit an offer under the Schedules Program.
    (7) 552.238-13, Impact of Mandatory Use on Quantities Ordered (B-
FSS-97). In conjunction with clause 552.238-51, Scope of Contract (I-
FSS-102), this provision requires that this contract is the first 
instance where GSA is the only agency listed as a mandatory user. This 
provision does not apply to the Department of Veterans Affairs.
    (8) 552.238-14, Introduction of New Supplies/Services (INSS) (L-
FSS-400). This provision is for use when establishing new services or 
supplies.
    (9) 552.238-15, Contract Price Lists (I-FSS-600). This provision 
provides instructions to Offerors on how to create the Authorized FSS 
Schedule Price List. For Schedule 70, use Alternate I.
    (10) 552.238-16, Ordering Information (Federal Supply Schedules). 
This provision outlines how Offerors will accept orders placed against 
the contract.
    (11) 552.238-17, Contractor's Remittance (Payment) Address. This 
provision instructs the Offeror on how to insert its remittance/payment 
address.
    (12) 552.238-18, Final Proposal Revision (L-FSS-101). This 
provision provides instructions to Offerors on how to prepare and 
submit a Final Proposal Revision (FPR) letter.
    (13) 552.238-19, Use of Non-Government Employees to Review Offers. 
This provision provides notification to Offerors that non-government 
employees may be utilized to review their solicitation response.
    (14) 552.238-20, Authorized Negotiators (K-FSS-1). This provision 
provides for the Offeror to outline its point-of-contact information 
for negotiations.
    (c) Multiple and single award schedules. As prescribed below, 
insert the following clauses as an addendum to clause 52.212-4, 
Contract Terms and Conditions--Commercial Items, in solicitations and 
contracts issued under FSS, when applicable:
    (1) 552.238-21, Authentication Supplies and Services (CI-FSS-52). 
This clause is to be used with Schedule 70 only and specifically 
corresponds to those Special Item Numbers (SINs) associated with the 
Homeland Security Presidential Directive-12 (HSPD-12).
    (2) 552.238-22, Indemnification and Liability (CI-FSS-053). This 
clause is to be used to protect the interest of the Government for loss 
or damage or anticipated loss for services related to hazardous 
substances or waste.
    (3) 552.238-23, Organizational Conflicts of Interest (CI-FSS-054). 
This clause is to be used when the nature of the work to be performed 
under a proposed ordering activity contract may either
    (i) Result in an unfair competitive advantage to the Contractor or 
its affiliates; or
    (ii) Impair the Contractor or its affiliates' objectively in 
performing contract work.
    (4) 552.238-24, Section 508 Compliance (CI-FSS-056). This clause 
instructs the Contractor to insert its Web site in a location where 
ordering activities can verify the 508 compliance for specific items.
    (5) 552.238-25, Characteristics of Electric Current (C-FSS-412). 
This clause is used for overseas orders when Contractors are supplying 
equipment which uses electrical current.
    (6) 552.238-26, Separate Charge for Performance Oriented Packaging 
(POP) (D-FSS-447). This clause is to be used when the Offeror is 
requested to quote a separate charge for preservation, packaging, 
packing and marking an