Federal Acquisition Regulation; Brand-Name Specifications, 189-194 [2011-33417]

Download as PDF Federal Register / Vol. 77, No. 1 / Tuesday, January 3, 2012 / Rules and Regulations 52.212–3 Offeror Representations and Certifications—Commercial Items. * * * * I. Background * Offeror Representations and Certifications—Commercial Items (FEB 2012) * * * * * 20. Amend section 52.212–4 by revising the date of the clause; and removing from paragraph (t)(4) ‘‘via the Internet at http://www.ccr.gov’’ and adding ‘‘via CCR accessed through https://www.acquisition.gov’’ in its place. The revised text reads as follows: ■ 52.212–4 Contract Terms and Conditions—Commercial Items. * * * * * Contract Terms and Conditions— Commercial Items (FEB 2012) * * * * * [FR Doc. 2011–33414 Filed 12–30–11; 8:45 am] BILLING CODE 6820–EP–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 5, 6, 8, 11, 13, 16, 18, and 36 [FAC 2005–55; FAR Case 2005–037; Item III; Docket 2006–0020, Sequence 26] RIN 9000–AK55 Federal Acquisition Regulation; BrandName Specifications Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. AGENCIES: DoD, GSA, and NASA have adopted as final, with changes, the interim rule amending the Federal Acquisition Regulation (FAR) to implement the Office of Management and Budget memoranda on brand-name specifications. DATES: Effective Date: February 2, 2012. FOR FURTHER INFORMATION CONTACT: Mr. William Clark, Procurement Analyst, at (202) 219–1813, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at (202) 501– 4755. Please cite FAC 2005–55, FAR Case 2005–037. SUPPLEMENTARY INFORMATION: TKELLEY on DSK3SPTVN1PROD with RULES2 SUMMARY: VerDate Mar<15>2010 17:59 Dec 30, 2011 Jkt 226001 DoD, GSA, and NASA published an interim rule in the Federal Register at 71 FR 57357 on September 28, 2006, to implement Office of Management and Budget (OMB) memoranda and policies on the use of brand-name specifications. Eight respondents submitted 32 comments in response to the interim rule. The public comments were considered in development of this final rule. Prior to the interim rule, on April 11, 2005, OMB issued a memorandum on the use of brand-name specifications that was designed to reinforce the need to maintain vendor- and technologyneutral contract specifications and provide for maximum competition by limiting the use of brand-name specifications. OMB encouraged agencies to mitigate brand-name usage and publicize the justification for using brand-names in solicitations. OMB issued a second memorandum on April 17, 2006, providing additional implementation guidance for publication of brand-name justifications. Subsequent to the interim rule, OMB issued two additional memoranda addressing the use of brand-name specifications. One, entitled ‘‘Appropriate Use of Brand Name or Equal Purchase Descriptions,’’ dated November 28, 2007, reminded agencies of the need to comply with the requirements included in the interim rule and establish internal controls to monitor compliance. The last memorandum, published December 19, 2007, entitled ‘‘Reminder-Ensuring Competition When Acquiring Information Technology and Using Common Security Configurations,’’ summarized the FAR requirements on the use of brand-name purchase descriptions and again asked agencies to establish internal controls. All four of the OMB memoranda were considered in developing this final rule. However, the need to stabilize the FAR baseline because of changes to be made by other pending FAR cases has delayed publication of this final rule. Publication in the Federal Register at 76 FR 14548 on March 16, 2011, of the interim rule for FAR Case 2007–012, Requirements for Acquisitions Pursuant to Multiple-Award Contracts, enabled the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) to move ahead with this final rule. Some of the changes made to the interim rule by this final rule are due solely to the revised baseline. PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 189 This final rule amends FAR subparts 6.3, 8.4, 13.1, 13.5, and 16.5 to clarify that when applicable, the documentation or justification and posting requirements for brand-name items only apply to the portion of the acquisition that requires the brand-name item. FAR subparts 8.4 and 16.5 are amended to require screening of the brand-name justifications for contractor proprietary data, and FAR subpart 16.5 is amended to require contracting officers to post the justification for an order peculiar to one manufacturer under indefinite-delivery contracts. II. Discussion and Analysis The Councils reviewed the comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows: A. What To Post Comments: The interim rule specifically requested comments on whether agencies should be required to post brand-name justifications (a) For orders against indefinite-delivery contracts, including Governmentwide Acquisition Contracts (GWACs), (b) for orders against SmartBUY agreements and other strategic sourcing vehicles, and (c) to renew software-license agreements that are required to receive software updates. Several respondents addressed these questions as follows. Most respondents expressed a strong belief that all Government procurements should be subject to the same brandname-or-equal rules, at the basiccontract level and at the order level. One respondent stated that a single posting requirement will go a long way toward leveling the playing field. Other respondents believed that it would be unfair to allow agencies to avoid the brand-name justification rule by ordering against indefinite-delivery contracts. One respondent distinguished between an agency-only indefinitedelivery contract and GWACs, which can be used by multiple agencies. The respondent did not think that an agency should be required to post brand-name justifications for orders under an internal indefinite-delivery contract, because all requirements should have been met at the time of posting the initial requirement for the basic indefinite-delivery contract, even if a competitive solicitation leads to a de facto brand-name indefinite-delivery contract. Further, this respondent read the FAR to contain a loophole that allows an ordering agency to avoid the posting requirements, as well as any E:\FR\FM\03JAR2.SGM 03JAR2 TKELLEY on DSK3SPTVN1PROD with RULES2 190 Federal Register / Vol. 77, No. 1 / Tuesday, January 3, 2012 / Rules and Regulations requirement to prepare a justification, when placing orders for brand-name products against a GWAC. Other respondents suggested that the FAR should incorporate a requirement for brand-name justification documentation and posting for GWACs only. Some respondents stated that orders issued against indefinite-delivery contracts should be included in the rule to the extent that the original indefinitedelivery action was not supported by a class justification and approval. The existence of the product on an indefinite-delivery contract does not, according to respondents, justify its acquisition if the facts supporting the product selection were not documented in the original indefinite-delivery procurement process. Respondents were not in agreement as to whether orders under SmartBUY and other strategic-sourcing agreements should be subject to the posting requirement. One respondent believes that, because these are vehicles of choice, the determination to procure a brand-name product is made at the order level and should be supported by a posted justification for the order. Other respondents disagreed, stating that the posting requirement should be satisfied prior to the award of the basic agreement, not for individual orders. Respondents did not consider that posting should be required for the renewal of software-licensing agreements because only the original equipment manufacturer has the software code to support the equipment and, therefore, there is no ability to compete. Respondents pointed out that FAR 13.106–1(b)(1) mentions license agreements separately from brand-name requirements, which respondents considered to strengthen the argument that software-license renewals should not be subject to the posting requirement. Response: The justification for use of a brand-name specification and posting of the justification should take place when the requirement for the brandname item is determined. This will result in different timing for multipleaward contracts from single-award contracts, e.g., requirements contracts. By definition, a requirements contract is with a single source. Therefore, the requirement for the source’s brand-name item is determined prior to award of the basic contract, and the justification for purchasing a brand-name item should be completed prior to award of the requirements contract. On the other hand, a multiple-award contract offers buyers products from a variety of sources, some of which may offer particular brand-name products. The VerDate Mar<15>2010 17:59 Dec 30, 2011 Jkt 226001 existence of a brand-name item on a multiple-award contract does not imply that it is the only such item available for purchase. In this case, the requirement for a single manufacturer’s brand-name item is determined at the time of the order, not at the time that the multipleaward contract is placed. Therefore, the justification for the brand-name item would be required when placing the order. For example, if an agency determined that it needed 50 Dell computers to be compatible with the agency’s existing Dell capabilities, then it might place an order against a Federal Supply Schedule (FSS) contract for Dell brand-name computers. The agency placing the order would be responsible for justifying the brand-name purchase, because it is at the order level that it is determined that the requirement is for Dell computers, versus other brandname computers that are also available on FSS contracts. There is a benefit to posting a purchase description for an order peculiar to one manufacturer because it provides for greater transparency and accountability regarding the use of brand-name specifications. Agencies can no longer avoid the posting requirement for orders simply by placing an order against an indefinitedelivery contract, unless it is a requirements contract with a single source. Orders with a purchase description for an order peculiar to one manufacturer issued against a GWAC or multiple-agency contract now are also included in the posting requirement. Posting is required if a justification covering the requirements in the order had not previously been approved for the original contract in accordance with FAR 6.302–1(c). The posting requirement for orders under indefinitedelivery contracts, GWACs, and multiple-agency contracts is reflected in changes at FAR subpart 16.5. The exception to the synopsis requirement for orders at FAR 16.505(a)(1) is revised by directing the contracting officer to follow the requirements of FAR 16.505(a)(4) for a proposed order peculiar to one manufacturer. FAR 16.505(a)(4) is added to require the contracting officer to document or prepare a justification when limiting competition for an item peculiar to one manufacturer, unless the justification covering the requirements in the order had been previously approved under the contract or unless the base contract is a single-award contract awarded under full and open competition. Under the final rule, agencies must post the solicitation, and any justification and supporting documentation on the agency Web site PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 used (if any) to solicit offers if the order is $25,000 or more; or provide the justification and supporting documentation along with the solicitation to all awardees under the indefinite-delivery contract. The agency is required to keep a copy of the brandname justification in the official contract file. With regard to orders placed pursuant to the SmartBUY program, the Councils concluded that agencies utilizing SmartBUY will be required to comply with the procedures of the SmartBUY blanket purchase agreements (BPAs). If an acquisition specifies a brandname item, the justification or documentation shall be posted, as required, with the solicitation or request for quotation (RFQ) (see FAR 5.102(a)(6), 8.405–6 or 16.505). As such, if an acquisition for renewal of a software-license agreement requires a brand-name justification or documentation and a solicitation or RFQ, then the justification or documentation shall be posted, as required, with the solicitation or RFQ. Any exception to this requirement should cite the applicable FAR reference. For example, an order placed under an FSS contract for a softwarelicense renewal that cites logical followon as the circumstance (see FAR 8.405– 6(a)(1)(i)(C)) for placing the order would not require a brand-name justification. However, if the order exceeds the simplified acquisition threshold, the limited-source justification is required to be posted (see FAR 8.405–6(a)(2)). The parenthetical reference to exclusive licensing agreements at FAR 13.106– 1(b)(1), as cited by the respondents, does not provide the applicable FAR reference for an exception to posting the brand-name justification or documentation required for an acquisition for renewal of softwarelicense agreements. B. Where To Post Justifications Comment: One respondent stated that ‘‘agencies shall use GSA e-Buy to post RFQs, eliminating FedBid, thus assuring adequate notice and competition.’’ Another respondent stated that e-Buy should be used consistently for FSS purchases because ‘‘(u)se of FedBizOpps invites additional interest outside of the FSS community and creates confusion as to whether the acquisition is conducted under FAR parts 8, 13, 15, etc. procedures.’’ Response: Agencies are required to post brand-name justifications or documentation to (1) the Governmentwide Point of Entry (GPE) system at www.fedbizopps.gov with the solicitation or (2) the e-Buy system at E:\FR\FM\03JAR2.SGM 03JAR2 Federal Register / Vol. 77, No. 1 / Tuesday, January 3, 2012 / Rules and Regulations TKELLEY on DSK3SPTVN1PROD with RULES2 http://www.ebuy.gsa.gov with the RFQ when using the GSA’s FSS. The interim rule applied the posting requirement to acquisitions exceeding $25,000 that use brand-name specifications, including simplified acquisitions, sole-source procurements, and multiple-award FSS orders. If an agency uses a third-party system such as FedBid for posting notices or soliciting offers for orders under the multiple-award FSS, the official posting location is still e-Buy. If publication of the justification or documentation with the solicitation is inappropriate because one of the exceptions in FAR 8.405–6(b)(3)(ii) or 16.505(a)(4)(iii)(C) applies, then agencies should retain a copy of the justification or documentation in the contract file. C. Posting Increases Acquisition Lead Time Comment: One respondent noted that requiring posting of a brand-name justification, as well as creating an eBuy solicitation for orders over $25,000, will add to lead time. The respondent stated that, in many cases, the posting of requirements could necessitate some type of legal or other review of the brand-name justification to ensure against unintentional disclosure of sensitive information. According to the respondent, ‘‘While classified information clearly falls within an exception to the posting rule, the primary concern is with the identification of sensitive information that does not carry a classification. It should not be the Contracting Officer’s responsibility to determine the appropriateness of this information for release to the public.’’ The respondent recommended that the posting requirement should only be imposed on orders over the simplified acquisition threshold, and then only if the requirements and technical personnel are required to certify that the information regarding the need for the brand-name is appropriate for public release. Response: The Councils agree that posting of a brand-name justification, as well as creating an e-Buy solicitation for orders over $25,000, may increase the procurement lead time and will have to be factored during acquisition planning. However, these actions foster competition, broaden industry participation and increase transparency of the acquisition process. The Councils note that the $25,000 threshold for posting a brand-name justification was established in the memoranda issued by OMB. FAR 5.102(a)(6) assigns overall responsibility to the contracting officer, as a core member of the acquisition VerDate Mar<15>2010 17:59 Dec 30, 2011 Jkt 226001 team, for ensuring the brand-name justification, to be included with the solicitation, is properly screened and redacted, as necessary, prior to posting. Moreover, the contracting officer, when deemed necessary, may consult with the appropriate subject matter expert(s) when determining the appropriateness of information for public release. D. What posting requirements are applicable to BPAs issued under FSS contracts and orders placed under the BPAs? Comment: Some respondents believed the interim rule resulted in confusion as to the applicability of the requirements to the placement of orders under BPAs versus the placement of BPAs. Respondents stated that some contracting officers may apply the posting language to solicitations for BPAs, while other contracting officers may only apply the brand-name specification posting requirement to RFQs for orders and not to BPAs. Respondents believed that the intent should be clear. Response: In this final rule, the Councils have clarified FAR subpart 8.4 to require that the documentation or justification for use of a brand-name specification must be completed and approved at the time the requirement for a brand-name item is determined. FAR 8.405–6 is revised to make it clear that the justification for a brand-name item is required at the order level when a justification for the brand item was not completed for the BPA or does not adequately cover the requirements in the order. E. Interim Rule Prohibits Agency Use of Brand-Name Specifications When Placing Orders Comment: A respondent stated that the requirement to post a brand-name justification should be applied only at the order level and never to the establishment of a BPA under an FSS contract. Response: The Councils determined that it is appropriate to post the justification and documentation for brand-names at the time the requirement is established, i.e., when a single-source contract is created or when an order is being placed against a multiple-award contract. Thus, the requirement to post a brand-name justification would not apply to the creation of a BPA unless it was a singlesource BPA issued against an FSS contract. See also responses to comments in section II.A. and D. PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 191 F. Limiting Consideration to BrandNames Comment: A respondent was concerned that the interim rule goes beyond limiting consideration to brandnames and actually prohibits agencies from utilizing brand-name specifications when placing orders. To fix that, the respondent suggested that the FAR must be clearer in separating the initial-needs description from the actual ordering process because, without the ability to name products by brands, contracting officers will be unable to fill specific orders correctly. Also, respondents claimed that the requirement to post brand-name justifications for FSS orders in excess of $25,000 reduces the ability to use streamlined acquisition procedures to place FSS orders. Response: To implement the OMB memorandum, the interim rule restricted use of oral orders over $25,000 against FSS when purchase descriptions contained brand-name specifications. The Councils recognize that the interim rule required that an RFQ be issued for a proposed order when the purchase description specifies a brand-name requirement. That requirement is consistent with the OMB memoranda and is retained in the final rule to reinforce the need to maintain vendor- and technology-neutral specifications to provide for maximum competition. However, additional clarification is needed, and the Councils have revised FAR 8.405–1(e) to specify that an RFQ is required when a purchase description specifies a brandname for a proposed order issued under a FSS. The interim rule does not prohibit the use of brand-name specifications when placing orders. However, the FAR could be clearer, and the Councils have made changes at FAR subparts 8.4 and 16.5, to reflect the documentation or justification and posting requirements that apply to the purchase description for proposed orders when placed against FSS contracts and indefinite-delivery contracts. G. When a Brand-Name Product Is Included in the Agency’s Enterprise Architecture, an Additional Justification Should Not Be Required Comment: One respondent noted that a Government agency is now required to have an Enterprise Architecture for its information-technology (IT) systems. Once the Enterprise Architecture has been approved, the respondent believed that contracting officers should be able to purchase brand-name IT equipment described and identified within the E:\FR\FM\03JAR2.SGM 03JAR2 192 Federal Register / Vol. 77, No. 1 / Tuesday, January 3, 2012 / Rules and Regulations Enterprise Architecture without any justification, bypassing the posting requirement. The respondent proposed that, as a minimum, there should be provision for standardized maintenance agreements with a single company. Response: If an agency’s Enterprise Architecture includes brand-name IT equipment, this fact will be a critical element in the brand-name justification. It does not eliminate the requirement for the justification or posting the justification. TKELLEY on DSK3SPTVN1PROD with RULES2 H. Posting an RFQ Is Not Always Required When Using a Brand-Name Specification for Orders Comment: The interim rule, according to respondents, confused limiting consideration to brand-names with selecting a brand-name item. Respondents stated that the OMB memoranda were reasonably focused on the use of brand-name specifications at the requirements and solicitation stages, not at the ordering stage. Respondents believed that it is illogical to require an agency to post an RFQ or brand-name specification justification after a source selection, ‘‘including when the source selection necessarily results in the order of a brand-name good or service.’’ Response: The final rule incorporates appropriate language at FAR 16.505 and 8.405–6 to reflect that the justification and posting requirements apply at the time the requirement for the brandname item is determined. Therefore, posting an RFQ with its associated brand-name justification will not be required at the order level for certain contracts or FSS BPAs (see also response to comments in section II.A.). I. Ties to Synopsis Exceptions for OpenMarket Purchases Comment: Respondents stated that, for open-market purchases, the requirement to post the brand-name justification is tied to solicitations synopsized through GPE and, therefore, any solicitation not synopsized through GPE by virtue of the exceptions to the notice requirements at 5.202 technically will not need to be published. Response: The respondents’ analysis correctly reflects that, if a solicitation is not synopsized through the GPE based on one of the exceptions at FAR 5.202, the associated brand-name justification or documentation is not required to be published through the GPE. J. Clarify Thresholds, Cross-References, and Documentation Requirements Comment: One respondent recommended that FAR 5.102(a)(6) be revised to clarify whether the posting requirement applies when the VerDate Mar<15>2010 17:59 Dec 30, 2011 Jkt 226001 acquisition in total exceeds $25,000 (regardless of the amount attributed to brand-name specifications) or only when the brand-name component of it exceeds $25,000. The respondent also recommended that FAR 5.102(a)(6) should have a reference to FAR 8.405–6(d) which requires documentation and justification for restricting competition when ordering under the FSS. The respondent stated that FAR 5.102(a)(6) requires the contracting officer to post the documentation required by FAR 13.106–1(b) when an acquisition contains brand-name specifications. However, there are no documentation requirements at FAR 13.106–1(b). Response: No change is required at FAR 5.102(a)(6) to clarify the thresholds or to reference to FAR 8.405–6(d). The justification and posting requirements for orders containing brand-name specifications placed under FSS contracts are adequately covered under FAR 8.405–6(b). The Councils have revised FAR 6.302–1(c), 13.106–1(b), 8.405–6(b)(4), and 13.501(a) to address requirements for documentation, justification, and approval for the portion of the acquisition which is brand-name. There are adequate documentation requirements at FAR 13.106–1(b). For purchases not exceeding the simplified acquisition threshold, FAR 13.106–1(b) requires that the contracting officer document the circumstances (e.g., brand-name) when it is determined that only one source is reasonably available. For sole-source (including brand-name) acquisitions of commercial items in excess of the simplified acquisition threshold, FAR 13.106–1(b) provides the cross reference to FAR 13.501(a) for the documentation. Comment: One respondent indicated that FAR 8.405–1(c)(2) seems to contradict the $25,000 posting threshold because the title of FAR 8.405–1(c) is ‘‘Orders exceeding the micro-purchase threshold but not exceeding the maximum order threshold.’’ The respondent believed that the documentation or justification requirements for FSS orders containing brand-name specifications apply to any such order greater than $3,000, when in fact, they apply only to orders exceeding $25,000. Response: FAR 8.405–1(c) was revised by FAR Case 2007–012. As a result of the case, FAR 8.405–1(c)(2) is now a separate paragraph at FAR 8.405–1(e), and the documentation or justification and posting requirements for FSS orders at the applicable thresholds are located at FAR 8.405–6(b). The documentation PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 requirement starts at $3,000; the posting requirement starts at $25,000. III. Executive Orders 12866 and 13563 Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. IV. Regulatory Flexibility Act The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule addresses internal Federal agency procedures. The rule will benefit small business entities by providing the opportunity for review of brand-name justification and approval documents for contracts and orders awarded noncompetitively or with limited competition, thereby increasing the opportunity for competition for future awards. V. Paperwork Reduction Act The final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). List of Subjects in 48 CFR Parts 5, 6, 8, 11, 13, 16, 18, and 36 Government procurement. Dated: December 21, 2011. Laura Auletta, Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy. Interim Rule Adopted as Final With Changes Accordingly, the interim rule amending 48 CFR parts 5, 6, 8, 11, 13, 16, 18, and 36 which was published in the Federal Register at 71 FR 57357, E:\FR\FM\03JAR2.SGM 03JAR2 Federal Register / Vol. 77, No. 1 / Tuesday, January 3, 2012 / Rules and Regulations 193 Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). permit prospective contractors to offer products other than those specifically referenced by brand-name, provide for full and open competition and do not require justifications and approvals to support their use. * * * * * PART 5—PUBLICIZING CONTRACT ACTIONS PART 8—REQUIRED SOURCES OF SUPPLIES AND SERVICES * * * * (c) For orders under indefinitequantity contracts, see 16.505(a)(4). 2. Amend section 5.202 by revising paragraph (a)(6) to read as follows: ■ 4. Amend section 8.405–1 by revising paragraph (e) to read as follows: PART 13—SIMPLIFIED ACQUISITION PROCEDURES 5.202 8.405–1 Ordering procedures for supplies, and services not requiring a statement of work. ■ * 13.106–1 September 28, 2006, is adopted as final with the following changes: ■ 1. The authority citation for 48 CFR parts 5, 6, 8, 11, 13, 16, 18, and 36 continues to read as follows: ■ Exceptions. * * * * * (a) * * * (6) The proposed contract action is an order placed under subpart 16.5. When the order contains brand-name specifications, see especially 16.505(a)(4); * * * * * PART 6—COMPETITION REQUIREMENTS 3. Amend section 6.302–1 by revising paragraph (c) to read as follows: ■ 6.302–1 Only one responsible source and no other supplies or services will satisfy agency requirements. TKELLEY on DSK3SPTVN1PROD with RULES2 * * * * * (c) Application for brand-name descriptions. (1) An acquisition or portion of an acquisition that uses a brand-name description or other purchase description to specify a particular brand-name, product, or feature of a product, peculiar to one manufacturer— (i) Does not provide for full and open competition, regardless of the number of sources solicited; and (ii) Shall be justified and approved in accordance with 6.303 and 6.304. (A) If only a portion of the acquisition is for a brand-name product or item peculiar to one manufacturer, the justification and approval is to cover only the portion of the acquisition which is brand-name or peculiar to one manufacturer. The justification should state it is covering only the portion of the acquisition which is brand-name or peculiar to one manufacturer, and the approval level requirements will then only apply to that portion; (B) The justification should indicate that the use of such descriptions in the acquisition or portion of an acquisition is essential to the Government’s requirements, thereby precluding consideration of a product manufactured by another company; and (C) The justification shall be posted with the solicitation (see 5.102(a)(6)). (2) Brand-name or equal descriptions, and other purchase descriptions that VerDate Mar<15>2010 17:59 Dec 30, 2011 Jkt 226001 * * * * (e) When an order contains brandname specifications, the contracting officer shall post the RFQ on e-Buy along with the justification or documentation, as required by 8.405–6. An RFQ is required when a purchase description specifies a brand-name. * * * * * ■ 5. Amend section 8.405–6 by— ■ a. Removing from paragraph (b)(2)(ii) ‘‘threshold see’’ and adding ‘‘threshold, see’’ in its place; and ■ b. Adding paragraphs (b)(2)(iii), (b)(3)(i)(C), and (b)(4). The added and revised text reads as follows: 8.405–6 Limiting sources. * * * * * (b) * * * (2) * * * (iii) The documentation or justification must be completed and approved at the time the requirement for a brand-name item is determined. In addition, the justification for a brandname item is required at the order level when a justification for the brand-name item was not completed for the BPA or does not adequately cover the requirements in the order. (3) * * * (i) * * * (C) The documentation in paragraph (b)(2)(i) and the justification in paragraph (c) of this subsection is subject to the screening requirement in paragraph (a)(2)(iii) of this section. * * * * * (4) When applicable, the documentation and posting requirements in paragraphs (b)(2) and (3) of this subsection apply only to the portion of the order or BPA that requires a brand-name item. If the justification and approval is to cover only the portion of the acquisition which is brand-name, then it should so state; the approval level requirements will then only apply to that portion. * * * * * PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 PART 11—DESCRIBING AGENCY NEEDS 6. Amend section 11.105 by adding paragraph (c) to read as follows: ■ 11.105 Items peculiar to one manufacturer. * 7. Amend section 13.106–1 by revising paragraph (b) to read as follows: Soliciting competition. * * * * * (b) Soliciting from a single source. (1) For purchases not exceeding the simplified acquisition threshold. (i) Contracting officers may solicit from one source if the contracting officer determines that the circumstances of the contract action deem only one source reasonably available (e.g., urgency, exclusive licensing agreements, brandname or industrial mobilization). (ii) Where a single source is identified to provide a portion of a purchase because that portion of the purchase specifies a particular brand-name item, the documentation in paragraph (b)(1)(i) of this section only applies to the portion of the purchase requiring the brand-name item. The documentation should state it is covering only the portion of the acquisition which is brand-name. (2) For purchases exceeding the simplified acquisition threshold. The requirements at 13.501(a) apply to solesource (including brand-name) acquisitions of commercial items conducted pursuant to subpart 13.5. (3) See 5.102(a)(6) for the requirement to post the brand-name justification or documentation. * * * * * ■ 8. Amend section 13.501 by revising the introductory text of paragraph (a)(2) to read as follows: 13.501 Special documentation requirements. (a) * * * (2) Justifications and approvals are required under this subpart for solesource (including brand-name) acquisitions or portions of an acquisition requiring a brand-name. If the justification is to cover only the portion of the acquisition which is brand-name, then it should so state; the approval level requirements will then only apply to that portion. * * * * * E:\FR\FM\03JAR2.SGM 03JAR2 194 Federal Register / Vol. 77, No. 1 / Tuesday, January 3, 2012 / Rules and Regulations PART 16—TYPES OF CONTRACTS 9. Amend section 16.505 by— a. Revising paragraph (a)(1); b. Redesignating paragraphs (a)(4) through (a)(10) as paragraphs (a)(5) through (a)(11), respectively; and ■ c. Adding a new paragraph (a)(4). The revised and added text reads as follows: ■ ■ ■ TKELLEY on DSK3SPTVN1PROD with RULES2 16.505 Ordering. (a) * * * (1) In general, the contracting officer does not synopsize orders under indefinite-delivery contracts; except see 16.505(a)(4) and (11), and 16.505(b)(2)(ii)(D). * * * * * (4) The following requirements apply when procuring items peculiar to one manufacturer: (i) The contracting officer must justify restricting consideration to an item peculiar to one manufacturer (e.g., a particular brand-name, product, or a feature of a product that is peculiar to one manufacturer). A brand-name item, even if available on more than one contract, is an item peculiar to one manufacturer. Brand-name specifications shall not be used unless the particular brand-name, product, or feature is essential to the Government’s requirements and market research indicates other companies’ similar products, or products lacking the particular feature, do not meet, or cannot be modified to meet, the agency’s needs. (ii) Requirements for use of items peculiar to one manufacturer shall be justified and approved using the format(s) and requirements from paragraphs (b)(2)(ii)(A), (B), and (C) of this section, modified to show the brand-name justification. A justification is required unless a justification covering the requirements in the order was previously approved for the contract in accordance with 6.302–1(c) or unless the base contract is a singleaward contract awarded under full and open competition. Justifications for the use of brand-name specifications must be completed and approved at the time the requirement for a brand-name is determined. (iii)(A) For an order in excess of $25,000, the contracting officer shall— (1) Post the justification and supporting documentation on the agency Web site used (if any) to solicit offers for orders under the contract; or (2) Provide the justification and supporting documentation along with the solicitation to all contract awardees. (B) The justifications for brand-name acquisitions may apply to the portion of VerDate Mar<15>2010 17:59 Dec 30, 2011 Jkt 226001 the acquisition requiring the brandname item. If the justification is to cover only the portion of the acquisition which is brand-name, then it should so state; the approval level requirements will then only apply to that portion. (C) The requirements in paragraph (a)(4)(iii)(A) of this section do not apply when disclosure would compromise the national security (e.g., would result in disclosure of classified information) or create other security risks. (D) The justification is subject to the screening requirement in paragraph (b)(2)(ii)(D)(4) of this section. * * * * * PART 18—EMERGENCY ACQUISITIONS 18.105 [Amended] 10. Amend section 18.105 by removing ‘‘(see 16.505(a)(7))’’ and adding ‘‘(see 16.505(a)(8))’’ in its place. ■ PART 36—CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS discipline in the determination of contract type with a view toward managing the risk to the Government. DATES: Effective Date: February 2, 2012. FOR FURTHER INFORMATION CONTACT: Ms. Lori Sakalos, Procurement Analyst, at (202) 208–0498, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at (202) 501– 4755. Please cite FAC 2005–55, FAR Case 2009–043. SUPPLEMENTARY INFORMATION: I. Background DoD, GSA, and NASA published a proposed rule in the Federal Register at 75 FR 59195 on September 27, 2010. The due date for public comments was November 26, 2010. Eleven comments were received from four respondents. The comments are separated into eight categories, addressed in the following sections. II. Discussion and Analysis ■ 11. Amend section 36.600 by removing ‘‘(see 16.505(a)(8))’’ and adding ‘‘(see 16.505(a)(9))’’ in its place. The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the comments in the development of the final rule. [FR Doc. 2011–33417 Filed 12–30–11; 8:45 am] A. Summary of Significant Changes 36.600 [Amended] BILLING CODE 6820–EP–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 8, 12, and 16 [FAC 2005–55; FAR Case 2009–043; Item IV; Docket 2010–0100, Sequence 1] RIN 9000–AL74 Federal Acquisition Regulation; Timeand-Materials and Labor-Hour Contracts for Commercial Items Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. AGENCIES: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement Government Accountability Office (GAO) recommendations to: ensure that time-and-materials and labor-hour contracts are used to acquire commercial services only when no other contract type is suitable; and instill SUMMARY: PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 Changes were made to the proposed rule as a result of the public comments and the publication of FAR Case 2007– 012 in the Federal Register at 76 FR 14548 on March 16, 2011. Specifically, all text in the proposed rule under FAR 8.405–2(e) has been relocated to FAR 8.404(h). FAR Case 2007–012 strengthened competition requirements for orders placed under the Federal Supply Schedules. As a result, FAR 8.405–2(e)(2)(ii) has been deleted and references to FAR part 12 at FAR subpart 8.4 have been removed. Additional changes were made during deliberation of the final rule to require these same safeguards on the use of time-and-materials (T&M) and laborhour (LH) orders for Blanket Purchase Agreements awarded under the Federal Supply Schedule Program. B. Analysis of Public Comments Respondents submitted comments covering the following seven categories: (1) Cross references; (2) Combine guidance from this case with FAR Case 2007–012; (3) Eliminate redundant material; (4) Clarify contract types; (5) Potential for rule to limit the use of T&M contracts; (6) Requirement for determination and findings at the order level; and (7) Address fixed-price levelof-effort (FP LOE) contracts. E:\FR\FM\03JAR2.SGM 03JAR2

Agencies

[Federal Register Volume 77, Number 1 (Tuesday, January 3, 2012)]
[Rules and Regulations]
[Pages 189-194]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-33417]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 5, 6, 8, 11, 13, 16, 18, and 36

[FAC 2005-55; FAR Case 2005-037; Item III; Docket 2006-0020, Sequence 
26]
RIN 9000-AK55


Federal Acquisition Regulation; Brand-Name Specifications

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA have adopted as final, with changes, the 
interim rule amending the Federal Acquisition Regulation (FAR) to 
implement the Office of Management and Budget memoranda on brand-name 
specifications.

DATES: Effective Date: February 2, 2012.

FOR FURTHER INFORMATION CONTACT: Mr. William Clark, Procurement 
Analyst, at (202) 219-1813, for clarification of content. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-55, FAR 
Case 2005-037.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA published an interim rule in the Federal 
Register at 71 FR 57357 on September 28, 2006, to implement Office of 
Management and Budget (OMB) memoranda and policies on the use of brand-
name specifications. Eight respondents submitted 32 comments in 
response to the interim rule. The public comments were considered in 
development of this final rule.
    Prior to the interim rule, on April 11, 2005, OMB issued a 
memorandum on the use of brand-name specifications that was designed to 
reinforce the need to maintain vendor- and technology-neutral contract 
specifications and provide for maximum competition by limiting the use 
of brand-name specifications. OMB encouraged agencies to mitigate 
brand-name usage and publicize the justification for using brand-names 
in solicitations. OMB issued a second memorandum on April 17, 2006, 
providing additional implementation guidance for publication of brand-
name justifications.
    Subsequent to the interim rule, OMB issued two additional memoranda 
addressing the use of brand-name specifications. One, entitled 
``Appropriate Use of Brand Name or Equal Purchase Descriptions,'' dated 
November 28, 2007, reminded agencies of the need to comply with the 
requirements included in the interim rule and establish internal 
controls to monitor compliance. The last memorandum, published December 
19, 2007, entitled ``Reminder-Ensuring Competition When Acquiring 
Information Technology and Using Common Security Configurations,'' 
summarized the FAR requirements on the use of brand-name purchase 
descriptions and again asked agencies to establish internal controls. 
All four of the OMB memoranda were considered in developing this final 
rule.
    However, the need to stabilize the FAR baseline because of changes 
to be made by other pending FAR cases has delayed publication of this 
final rule. Publication in the Federal Register at 76 FR 14548 on March 
16, 2011, of the interim rule for FAR Case 2007-012, Requirements for 
Acquisitions Pursuant to Multiple-Award Contracts, enabled the Civilian 
Agency Acquisition Council and the Defense Acquisition Regulations 
Council (the Councils) to move ahead with this final rule. Some of the 
changes made to the interim rule by this final rule are due solely to 
the revised baseline.
    This final rule amends FAR subparts 6.3, 8.4, 13.1, 13.5, and 16.5 
to clarify that when applicable, the documentation or justification and 
posting requirements for brand-name items only apply to the portion of 
the acquisition that requires the brand-name item. FAR subparts 8.4 and 
16.5 are amended to require screening of the brand-name justifications 
for contractor proprietary data, and FAR subpart 16.5 is amended to 
require contracting officers to post the justification for an order 
peculiar to one manufacturer under indefinite-delivery contracts.

II. Discussion and Analysis

    The Councils reviewed the comments in the development of the final 
rule. A discussion of the comments and the changes made to the rule as 
a result of those comments are provided as follows:

A. What To Post

    Comments: The interim rule specifically requested comments on 
whether agencies should be required to post brand-name justifications 
(a) For orders against indefinite-delivery contracts, including 
Governmentwide Acquisition Contracts (GWACs), (b) for orders against 
SmartBUY agreements and other strategic sourcing vehicles, and (c) to 
renew software-license agreements that are required to receive software 
updates. Several respondents addressed these questions as follows.
    Most respondents expressed a strong belief that all Government 
procurements should be subject to the same brand-name-or-equal rules, 
at the basic-contract level and at the order level. One respondent 
stated that a single posting requirement will go a long way toward 
leveling the playing field. Other respondents believed that it would be 
unfair to allow agencies to avoid the brand-name justification rule by 
ordering against indefinite-delivery contracts.
    One respondent distinguished between an agency-only indefinite-
delivery contract and GWACs, which can be used by multiple agencies. 
The respondent did not think that an agency should be required to post 
brand-name justifications for orders under an internal indefinite-
delivery contract, because all requirements should have been met at the 
time of posting the initial requirement for the basic indefinite-
delivery contract, even if a competitive solicitation leads to a de 
facto brand-name indefinite-delivery contract. Further, this respondent 
read the FAR to contain a loophole that allows an ordering agency to 
avoid the posting requirements, as well as any

[[Page 190]]

requirement to prepare a justification, when placing orders for brand-
name products against a GWAC. Other respondents suggested that the FAR 
should incorporate a requirement for brand-name justification 
documentation and posting for GWACs only. Some respondents stated that 
orders issued against indefinite-delivery contracts should be included 
in the rule to the extent that the original indefinite-delivery action 
was not supported by a class justification and approval. The existence 
of the product on an indefinite-delivery contract does not, according 
to respondents, justify its acquisition if the facts supporting the 
product selection were not documented in the original indefinite-
delivery procurement process.
    Respondents were not in agreement as to whether orders under 
SmartBUY and other strategic-sourcing agreements should be subject to 
the posting requirement. One respondent believes that, because these 
are vehicles of choice, the determination to procure a brand-name 
product is made at the order level and should be supported by a posted 
justification for the order. Other respondents disagreed, stating that 
the posting requirement should be satisfied prior to the award of the 
basic agreement, not for individual orders.
    Respondents did not consider that posting should be required for 
the renewal of software-licensing agreements because only the original 
equipment manufacturer has the software code to support the equipment 
and, therefore, there is no ability to compete. Respondents pointed out 
that FAR 13.106-1(b)(1) mentions license agreements separately from 
brand-name requirements, which respondents considered to strengthen the 
argument that software-license renewals should not be subject to the 
posting requirement.
    Response: The justification for use of a brand-name specification 
and posting of the justification should take place when the requirement 
for the brand-name item is determined. This will result in different 
timing for multiple-award contracts from single-award contracts, e.g., 
requirements contracts. By definition, a requirements contract is with 
a single source. Therefore, the requirement for the source's brand-name 
item is determined prior to award of the basic contract, and the 
justification for purchasing a brand-name item should be completed 
prior to award of the requirements contract. On the other hand, a 
multiple-award contract offers buyers products from a variety of 
sources, some of which may offer particular brand-name products. The 
existence of a brand-name item on a multiple-award contract does not 
imply that it is the only such item available for purchase. In this 
case, the requirement for a single manufacturer's brand-name item is 
determined at the time of the order, not at the time that the multiple-
award contract is placed. Therefore, the justification for the brand-
name item would be required when placing the order. For example, if an 
agency determined that it needed 50 Dell computers to be compatible 
with the agency's existing Dell capabilities, then it might place an 
order against a Federal Supply Schedule (FSS) contract for Dell brand-
name computers. The agency placing the order would be responsible for 
justifying the brand-name purchase, because it is at the order level 
that it is determined that the requirement is for Dell computers, 
versus other brand-name computers that are also available on FSS 
contracts.
    There is a benefit to posting a purchase description for an order 
peculiar to one manufacturer because it provides for greater 
transparency and accountability regarding the use of brand-name 
specifications. Agencies can no longer avoid the posting requirement 
for orders simply by placing an order against an indefinite-delivery 
contract, unless it is a requirements contract with a single source. 
Orders with a purchase description for an order peculiar to one 
manufacturer issued against a GWAC or multiple-agency contract now are 
also included in the posting requirement. Posting is required if a 
justification covering the requirements in the order had not previously 
been approved for the original contract in accordance with FAR 6.302-
1(c). The posting requirement for orders under indefinite-delivery 
contracts, GWACs, and multiple-agency contracts is reflected in changes 
at FAR subpart 16.5.
    The exception to the synopsis requirement for orders at FAR 
16.505(a)(1) is revised by directing the contracting officer to follow 
the requirements of FAR 16.505(a)(4) for a proposed order peculiar to 
one manufacturer. FAR 16.505(a)(4) is added to require the contracting 
officer to document or prepare a justification when limiting 
competition for an item peculiar to one manufacturer, unless the 
justification covering the requirements in the order had been 
previously approved under the contract or unless the base contract is a 
single-award contract awarded under full and open competition. Under 
the final rule, agencies must post the solicitation, and any 
justification and supporting documentation on the agency Web site used 
(if any) to solicit offers if the order is $25,000 or more; or provide 
the justification and supporting documentation along with the 
solicitation to all awardees under the indefinite-delivery contract. 
The agency is required to keep a copy of the brand-name justification 
in the official contract file.
    With regard to orders placed pursuant to the SmartBUY program, the 
Councils concluded that agencies utilizing SmartBUY will be required to 
comply with the procedures of the SmartBUY blanket purchase agreements 
(BPAs).
    If an acquisition specifies a brand-name item, the justification or 
documentation shall be posted, as required, with the solicitation or 
request for quotation (RFQ) (see FAR 5.102(a)(6), 8.405-6 or 16.505). 
As such, if an acquisition for renewal of a software-license agreement 
requires a brand-name justification or documentation and a solicitation 
or RFQ, then the justification or documentation shall be posted, as 
required, with the solicitation or RFQ. Any exception to this 
requirement should cite the applicable FAR reference. For example, an 
order placed under an FSS contract for a software-license renewal that 
cites logical follow-on as the circumstance (see FAR 8.405-
6(a)(1)(i)(C)) for placing the order would not require a brand-name 
justification. However, if the order exceeds the simplified acquisition 
threshold, the limited-source justification is required to be posted 
(see FAR 8.405-6(a)(2)). The parenthetical reference to exclusive 
licensing agreements at FAR 13.106-1(b)(1), as cited by the 
respondents, does not provide the applicable FAR reference for an 
exception to posting the brand-name justification or documentation 
required for an acquisition for renewal of software-license agreements.

B. Where To Post Justifications

    Comment: One respondent stated that ``agencies shall use GSA e-Buy 
to post RFQs, eliminating FedBid, thus assuring adequate notice and 
competition.'' Another respondent stated that e-Buy should be used 
consistently for FSS purchases because ``(u)se of FedBizOpps invites 
additional interest outside of the FSS community and creates confusion 
as to whether the acquisition is conducted under FAR parts 8, 13, 15, 
etc. procedures.''
    Response: Agencies are required to post brand-name justifications 
or documentation to (1) the Governmentwide Point of Entry (GPE) system 
at www.fedbizopps.gov with the solicitation or (2) the e-Buy system at

[[Page 191]]

http://www.ebuy.gsa.gov with the RFQ when using the GSA's FSS. The 
interim rule applied the posting requirement to acquisitions exceeding 
$25,000 that use brand-name specifications, including simplified 
acquisitions, sole-source procurements, and multiple-award FSS orders. 
If an agency uses a third-party system such as FedBid for posting 
notices or soliciting offers for orders under the multiple-award FSS, 
the official posting location is still e-Buy. If publication of the 
justification or documentation with the solicitation is inappropriate 
because one of the exceptions in FAR 8.405-6(b)(3)(ii) or 
16.505(a)(4)(iii)(C) applies, then agencies should retain a copy of the 
justification or documentation in the contract file.

C. Posting Increases Acquisition Lead Time

    Comment: One respondent noted that requiring posting of a brand-
name justification, as well as creating an e-Buy solicitation for 
orders over $25,000, will add to lead time. The respondent stated that, 
in many cases, the posting of requirements could necessitate some type 
of legal or other review of the brand-name justification to ensure 
against unintentional disclosure of sensitive information. According to 
the respondent, ``While classified information clearly falls within an 
exception to the posting rule, the primary concern is with the 
identification of sensitive information that does not carry a 
classification. It should not be the Contracting Officer's 
responsibility to determine the appropriateness of this information for 
release to the public.'' The respondent recommended that the posting 
requirement should only be imposed on orders over the simplified 
acquisition threshold, and then only if the requirements and technical 
personnel are required to certify that the information regarding the 
need for the brand-name is appropriate for public release.
    Response: The Councils agree that posting of a brand-name 
justification, as well as creating an e-Buy solicitation for orders 
over $25,000, may increase the procurement lead time and will have to 
be factored during acquisition planning. However, these actions foster 
competition, broaden industry participation and increase transparency 
of the acquisition process. The Councils note that the $25,000 
threshold for posting a brand-name justification was established in the 
memoranda issued by OMB. FAR 5.102(a)(6) assigns overall responsibility 
to the contracting officer, as a core member of the acquisition team, 
for ensuring the brand-name justification, to be included with the 
solicitation, is properly screened and redacted, as necessary, prior to 
posting. Moreover, the contracting officer, when deemed necessary, may 
consult with the appropriate subject matter expert(s) when determining 
the appropriateness of information for public release.

D. What posting requirements are applicable to BPAs issued under FSS 
contracts and orders placed under the BPAs?

    Comment: Some respondents believed the interim rule resulted in 
confusion as to the applicability of the requirements to the placement 
of orders under BPAs versus the placement of BPAs. Respondents stated 
that some contracting officers may apply the posting language to 
solicitations for BPAs, while other contracting officers may only apply 
the brand-name specification posting requirement to RFQs for orders and 
not to BPAs. Respondents believed that the intent should be clear.
    Response: In this final rule, the Councils have clarified FAR 
subpart 8.4 to require that the documentation or justification for use 
of a brand-name specification must be completed and approved at the 
time the requirement for a brand-name item is determined. FAR 8.405-6 
is revised to make it clear that the justification for a brand-name 
item is required at the order level when a justification for the brand 
item was not completed for the BPA or does not adequately cover the 
requirements in the order.

E. Interim Rule Prohibits Agency Use of Brand-Name Specifications When 
Placing Orders

    Comment: A respondent stated that the requirement to post a brand-
name justification should be applied only at the order level and never 
to the establishment of a BPA under an FSS contract.
    Response: The Councils determined that it is appropriate to post 
the justification and documentation for brand-names at the time the 
requirement is established, i.e., when a single-source contract is 
created or when an order is being placed against a multiple-award 
contract. Thus, the requirement to post a brand-name justification 
would not apply to the creation of a BPA unless it was a single-source 
BPA issued against an FSS contract. See also responses to comments in 
section II.A. and D.

F. Limiting Consideration to Brand-Names

    Comment: A respondent was concerned that the interim rule goes 
beyond limiting consideration to brand-names and actually prohibits 
agencies from utilizing brand-name specifications when placing orders. 
To fix that, the respondent suggested that the FAR must be clearer in 
separating the initial-needs description from the actual ordering 
process because, without the ability to name products by brands, 
contracting officers will be unable to fill specific orders correctly. 
Also, respondents claimed that the requirement to post brand-name 
justifications for FSS orders in excess of $25,000 reduces the ability 
to use streamlined acquisition procedures to place FSS orders.
    Response: To implement the OMB memorandum, the interim rule 
restricted use of oral orders over $25,000 against FSS when purchase 
descriptions contained brand-name specifications. The Councils 
recognize that the interim rule required that an RFQ be issued for a 
proposed order when the purchase description specifies a brand-name 
requirement. That requirement is consistent with the OMB memoranda and 
is retained in the final rule to reinforce the need to maintain vendor- 
and technology-neutral specifications to provide for maximum 
competition. However, additional clarification is needed, and the 
Councils have revised FAR 8.405-1(e) to specify that an RFQ is required 
when a purchase description specifies a brand-name for a proposed order 
issued under a FSS.
    The interim rule does not prohibit the use of brand-name 
specifications when placing orders. However, the FAR could be clearer, 
and the Councils have made changes at FAR subparts 8.4 and 16.5, to 
reflect the documentation or justification and posting requirements 
that apply to the purchase description for proposed orders when placed 
against FSS contracts and indefinite-delivery contracts.

G. When a Brand-Name Product Is Included in the Agency's Enterprise 
Architecture, an Additional Justification Should Not Be Required

    Comment: One respondent noted that a Government agency is now 
required to have an Enterprise Architecture for its information-
technology (IT) systems. Once the Enterprise Architecture has been 
approved, the respondent believed that contracting officers should be 
able to purchase brand-name IT equipment described and identified 
within the

[[Page 192]]

Enterprise Architecture without any justification, bypassing the 
posting requirement. The respondent proposed that, as a minimum, there 
should be provision for standardized maintenance agreements with a 
single company.
    Response: If an agency's Enterprise Architecture includes brand-
name IT equipment, this fact will be a critical element in the brand-
name justification. It does not eliminate the requirement for the 
justification or posting the justification.

H. Posting an RFQ Is Not Always Required When Using a Brand-Name 
Specification for Orders

    Comment: The interim rule, according to respondents, confused 
limiting consideration to brand-names with selecting a brand-name item. 
Respondents stated that the OMB memoranda were reasonably focused on 
the use of brand-name specifications at the requirements and 
solicitation stages, not at the ordering stage. Respondents believed 
that it is illogical to require an agency to post an RFQ or brand-name 
specification justification after a source selection, ``including when 
the source selection necessarily results in the order of a brand-name 
good or service.''
    Response: The final rule incorporates appropriate language at FAR 
16.505 and 8.405-6 to reflect that the justification and posting 
requirements apply at the time the requirement for the brand-name item 
is determined. Therefore, posting an RFQ with its associated brand-name 
justification will not be required at the order level for certain 
contracts or FSS BPAs (see also response to comments in section II.A.).

I. Ties to Synopsis Exceptions for Open-Market Purchases

    Comment: Respondents stated that, for open-market purchases, the 
requirement to post the brand-name justification is tied to 
solicitations synopsized through GPE and, therefore, any solicitation 
not synopsized through GPE by virtue of the exceptions to the notice 
requirements at 5.202 technically will not need to be published.
    Response: The respondents' analysis correctly reflects that, if a 
solicitation is not synopsized through the GPE based on one of the 
exceptions at FAR 5.202, the associated brand-name justification or 
documentation is not required to be published through the GPE.

J. Clarify Thresholds, Cross-References, and Documentation Requirements

    Comment: One respondent recommended that FAR 5.102(a)(6) be revised 
to clarify whether the posting requirement applies when the acquisition 
in total exceeds $25,000 (regardless of the amount attributed to brand-
name specifications) or only when the brand-name component of it 
exceeds $25,000.
    The respondent also recommended that FAR 5.102(a)(6) should have a 
reference to FAR 8.405-6(d) which requires documentation and 
justification for restricting competition when ordering under the FSS. 
The respondent stated that FAR 5.102(a)(6) requires the contracting 
officer to post the documentation required by FAR 13.106-1(b) when an 
acquisition contains brand-name specifications. However, there are no 
documentation requirements at FAR 13.106-1(b).
    Response: No change is required at FAR 5.102(a)(6) to clarify the 
thresholds or to reference to FAR 8.405-6(d). The justification and 
posting requirements for orders containing brand-name specifications 
placed under FSS contracts are adequately covered under FAR 8.405-6(b).
    The Councils have revised FAR 6.302-1(c), 13.106-1(b), 8.405-
6(b)(4), and 13.501(a) to address requirements for documentation, 
justification, and approval for the portion of the acquisition which is 
brand-name.
    There are adequate documentation requirements at FAR 13.106-1(b). 
For purchases not exceeding the simplified acquisition threshold, FAR 
13.106-1(b) requires that the contracting officer document the 
circumstances (e.g., brand-name) when it is determined that only one 
source is reasonably available. For sole-source (including brand-name) 
acquisitions of commercial items in excess of the simplified 
acquisition threshold, FAR 13.106-1(b) provides the cross reference to 
FAR 13.501(a) for the documentation.
    Comment: One respondent indicated that FAR 8.405-1(c)(2) seems to 
contradict the $25,000 posting threshold because the title of FAR 
8.405-1(c) is ``Orders exceeding the micro-purchase threshold but not 
exceeding the maximum order threshold.'' The respondent believed that 
the documentation or justification requirements for FSS orders 
containing brand-name specifications apply to any such order greater 
than $3,000, when in fact, they apply only to orders exceeding $25,000.
    Response: FAR 8.405-1(c) was revised by FAR Case 2007-012. As a 
result of the case, FAR 8.405-1(c)(2) is now a separate paragraph at 
FAR 8.405-1(e), and the documentation or justification and posting 
requirements for FSS orders at the applicable thresholds are located at 
FAR 8.405-6(b). The documentation requirement starts at $3,000; the 
posting requirement starts at $25,000.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is a significant regulatory action and, therefore, was subject to 
review under section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.

IV. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., because the rule addresses 
internal Federal agency procedures. The rule will benefit small 
business entities by providing the opportunity for review of brand-name 
justification and approval documents for contracts and orders awarded 
noncompetitively or with limited competition, thereby increasing the 
opportunity for competition for future awards.

V. Paperwork Reduction Act

    The final rule does not contain any information collection 
requirements that require the approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 5, 6, 8, 11, 13, 16, 18, and 36

    Government procurement.

    Dated: December 21, 2011.
Laura Auletta,
Director, Office of Governmentwide Acquisition Policy, Office of 
Acquisition Policy, Office of Governmentwide Policy.

Interim Rule Adopted as Final With Changes

    Accordingly, the interim rule amending 48 CFR parts 5, 6, 8, 11, 
13, 16, 18, and 36 which was published in the Federal Register at 71 FR 
57357,

[[Page 193]]

September 28, 2006, is adopted as final with the following changes:

0
1. The authority citation for 48 CFR parts 5, 6, 8, 11, 13, 16, 18, and 
36 continues to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 5--PUBLICIZING CONTRACT ACTIONS

0
2. Amend section 5.202 by revising paragraph (a)(6) to read as follows:


5.202  Exceptions.

* * * * *
    (a) * * *
    (6) The proposed contract action is an order placed under subpart 
16.5. When the order contains brand-name specifications, see especially 
16.505(a)(4);
* * * * *

PART 6--COMPETITION REQUIREMENTS

0
3. Amend section 6.302-1 by revising paragraph (c) to read as follows:


6.302-1   Only one responsible source and no other supplies or services 
will satisfy agency requirements.

* * * * *
    (c) Application for brand-name descriptions. (1) An acquisition or 
portion of an acquisition that uses a brand-name description or other 
purchase description to specify a particular brand-name, product, or 
feature of a product, peculiar to one manufacturer--
    (i) Does not provide for full and open competition, regardless of 
the number of sources solicited; and
    (ii) Shall be justified and approved in accordance with 6.303 and 
6.304.
    (A) If only a portion of the acquisition is for a brand-name 
product or item peculiar to one manufacturer, the justification and 
approval is to cover only the portion of the acquisition which is 
brand-name or peculiar to one manufacturer. The justification should 
state it is covering only the portion of the acquisition which is 
brand-name or peculiar to one manufacturer, and the approval level 
requirements will then only apply to that portion;
    (B) The justification should indicate that the use of such 
descriptions in the acquisition or portion of an acquisition is 
essential to the Government's requirements, thereby precluding 
consideration of a product manufactured by another company; and
    (C) The justification shall be posted with the solicitation (see 
5.102(a)(6)).
    (2) Brand-name or equal descriptions, and other purchase 
descriptions that permit prospective contractors to offer products 
other than those specifically referenced by brand-name, provide for 
full and open competition and do not require justifications and 
approvals to support their use.
* * * * *

PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES

0
4. Amend section 8.405-1 by revising paragraph (e) to read as follows:


8.405-1  Ordering procedures for supplies, and services not requiring a 
statement of work.

* * * * *
    (e) When an order contains brand-name specifications, the 
contracting officer shall post the RFQ on e-Buy along with the 
justification or documentation, as required by 8.405-6. An RFQ is 
required when a purchase description specifies a brand-name.
* * * * *

0
5. Amend section 8.405-6 by--
0
a. Removing from paragraph (b)(2)(ii) ``threshold see'' and adding 
``threshold, see'' in its place; and
0
b. Adding paragraphs (b)(2)(iii), (b)(3)(i)(C), and (b)(4).
    The added and revised text reads as follows:


8.405-6   Limiting sources.

* * * * *
    (b) * * *
    (2) * * *
    (iii) The documentation or justification must be completed and 
approved at the time the requirement for a brand-name item is 
determined. In addition, the justification for a brand-name item is 
required at the order level when a justification for the brand-name 
item was not completed for the BPA or does not adequately cover the 
requirements in the order.
    (3) * * *
    (i) * * *
    (C) The documentation in paragraph (b)(2)(i) and the justification 
in paragraph (c) of this subsection is subject to the screening 
requirement in paragraph (a)(2)(iii) of this section.
* * * * *
    (4) When applicable, the documentation and posting requirements in 
paragraphs (b)(2) and (3) of this subsection apply only to the portion 
of the order or BPA that requires a brand-name item. If the 
justification and approval is to cover only the portion of the 
acquisition which is brand-name, then it should so state; the approval 
level requirements will then only apply to that portion.
* * * * *

PART 11--DESCRIBING AGENCY NEEDS

0
6. Amend section 11.105 by adding paragraph (c) to read as follows:


11.105   Items peculiar to one manufacturer.

* * * * *
    (c) For orders under indefinite-quantity contracts, see 
16.505(a)(4).

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

0
7. Amend section 13.106-1 by revising paragraph (b) to read as follows:


13.106-1   Soliciting competition.

* * * * *
    (b) Soliciting from a single source. (1) For purchases not 
exceeding the simplified acquisition threshold. (i) Contracting 
officers may solicit from one source if the contracting officer 
determines that the circumstances of the contract action deem only one 
source reasonably available (e.g., urgency, exclusive licensing 
agreements, brand-name or industrial mobilization).
    (ii) Where a single source is identified to provide a portion of a 
purchase because that portion of the purchase specifies a particular 
brand-name item, the documentation in paragraph (b)(1)(i) of this 
section only applies to the portion of the purchase requiring the 
brand-name item. The documentation should state it is covering only the 
portion of the acquisition which is brand-name.
    (2) For purchases exceeding the simplified acquisition threshold. 
The requirements at 13.501(a) apply to sole-source (including brand-
name) acquisitions of commercial items conducted pursuant to subpart 
13.5.
    (3) See 5.102(a)(6) for the requirement to post the brand-name 
justification or documentation.
* * * * *

0
8. Amend section 13.501 by revising the introductory text of paragraph 
(a)(2) to read as follows:


13.501   Special documentation requirements.

    (a) * * *
    (2) Justifications and approvals are required under this subpart 
for sole-source (including brand-name) acquisitions or portions of an 
acquisition requiring a brand-name. If the justification is to cover 
only the portion of the acquisition which is brand-name, then it should 
so state; the approval level requirements will then only apply to that 
portion.
* * * * *

[[Page 194]]

PART 16--TYPES OF CONTRACTS

0
9. Amend section 16.505 by--
0
a. Revising paragraph (a)(1);
0
b. Redesignating paragraphs (a)(4) through (a)(10) as paragraphs (a)(5) 
through (a)(11), respectively; and
0
c. Adding a new paragraph (a)(4).
    The revised and added text reads as follows:


16.505  Ordering.

    (a) * * *
    (1) In general, the contracting officer does not synopsize orders 
under indefinite-delivery contracts; except see 16.505(a)(4) and (11), 
and 16.505(b)(2)(ii)(D).
* * * * *
    (4) The following requirements apply when procuring items peculiar 
to one manufacturer:
    (i) The contracting officer must justify restricting consideration 
to an item peculiar to one manufacturer (e.g., a particular brand-name, 
product, or a feature of a product that is peculiar to one 
manufacturer). A brand-name item, even if available on more than one 
contract, is an item peculiar to one manufacturer. Brand-name 
specifications shall not be used unless the particular brand-name, 
product, or feature is essential to the Government's requirements and 
market research indicates other companies' similar products, or 
products lacking the particular feature, do not meet, or cannot be 
modified to meet, the agency's needs.
    (ii) Requirements for use of items peculiar to one manufacturer 
shall be justified and approved using the format(s) and requirements 
from paragraphs (b)(2)(ii)(A), (B), and (C) of this section, modified 
to show the brand-name justification. A justification is required 
unless a justification covering the requirements in the order was 
previously approved for the contract in accordance with 6.302-1(c) or 
unless the base contract is a single-award contract awarded under full 
and open competition. Justifications for the use of brand-name 
specifications must be completed and approved at the time the 
requirement for a brand-name is determined.
    (iii)(A) For an order in excess of $25,000, the contracting officer 
shall--
    (1) Post the justification and supporting documentation on the 
agency Web site used (if any) to solicit offers for orders under the 
contract; or
    (2) Provide the justification and supporting documentation along 
with the solicitation to all contract awardees.
    (B) The justifications for brand-name acquisitions may apply to the 
portion of the acquisition requiring the brand-name item. If the 
justification is to cover only the portion of the acquisition which is 
brand-name, then it should so state; the approval level requirements 
will then only apply to that portion.
    (C) The requirements in paragraph (a)(4)(iii)(A) of this section do 
not apply when disclosure would compromise the national security (e.g., 
would result in disclosure of classified information) or create other 
security risks.
    (D) The justification is subject to the screening requirement in 
paragraph (b)(2)(ii)(D)(4) of this section.
* * * * *

PART 18--EMERGENCY ACQUISITIONS


18.105   [Amended]

0
10. Amend section 18.105 by removing ``(see 16.505(a)(7))'' and adding 
``(see 16.505(a)(8))'' in its place.

PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS


36.600   [Amended]

0
11. Amend section 36.600 by removing ``(see 16.505(a)(8))'' and adding 
``(see 16.505(a)(9))'' in its place.

[FR Doc. 2011-33417 Filed 12-30-11; 8:45 am]
BILLING CODE 6820-EP-P