Federal Acquisition Regulation; Price Analysis Techniques, 37690-37692 [2013-14615]

Download as PDF 37690 Federal Register / Vol. 78, No. 120 / Friday, June 21, 2013 / Rules and Regulations DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Part 15 [FAC 2005–67; FAR Case 2012–018; Item VI; Docket 2012–0018, Sequence 1] RIN 9000–AM27 Federal Acquisition Regulation; Price Analysis Techniques Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. AGENCY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to clarify and give a precise reference in the use of a price analysis technique in order to establish a fair and reasonable price. DATES: Effective Date: July 22, 2013. FOR FURTHER INFORMATION CONTACT: Mr. Edward N. Chambers, Procurement Analyst, at 202–501–3221, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202–501–4755. Please cite FAC 2005–67, FAR Case 2012–018. SUPPLEMENTARY INFORMATION: SUMMARY: TKELLEY on DSK3SPTVN1PROD with RULES2 I. Background DoD, GSA, and NASA published a proposed rule in the Federal Register at 77 FR 40552 on July 10, 2012, to clarify and pinpoint a reference used in FAR 15.404–1(b)(2)(i). FAR 15.404–1(b)(2) addresses various price analysis techniques and procedures that the Government may use to ensure a fair and reasonable price. One of those techniques at FAR 15.404–1(b)(2)(i) describes the comparison of proposed prices received in response to a solicitation as an example of such techniques and procedures. In its discussion, FAR 15.404–1(b)(2)(i) references 15.403–1(c)(1), which sets forth the various standards of adequate price competition (for exceptions from certified cost or pricing data requirements). However, only FAR 15.403–1(c)(1)(i) (rather than all of 15.403–1(c)(1)) actually addresses the situation when two or more responsible offerors, competing independently, submit priced offers that satisfy the Government’s expressed requirement. Since FAR 15.404–1(b)(2)(i) deals only VerDate Mar<15>2010 18:42 Jun 20, 2013 Jkt 229001 B. Analysis of Public Comments The Regulatory Secretariat received responses from two respondents to the proposed rule, which are discussed below: comparing multiple proposed prices received in response to a solicitation described in 15.404–1(b)(2)(i) with the adequate price competition standard (for exceptions from certified cost or pricing data requirements) of comparing proposed prices submitted by multiple independent offerors. The other two alternative standards for establishing adequate price competition within the generalized reference FAR 15.403– 1(c)(1) (for exceptions from certified cost or pricing data requirements) at 15.403–1(c)(1)(ii) and (iii) do not involve any comparison of proposed prices submitted by multiple offerors. Furthermore, it was illogical to rely on the other two alternative standards of adequate price competition (for exceptions from certified cost or pricing data requirements at FAR 15.403– 1(c)(1)(ii) and (iii)) to determine a fair and reasonable price using price analysis techniques and procedures (per the prescription at 15.404–1(b)(2(i)). This is because the determination that the price is fair and reasonable itself is required for these two alternative standards at FAR 15.403–1(c)(1)(ii) and (iii) in order to determine that adequate price competition exists. These two alternative standards of adequate price competition can be used to meet the exceptions from certified cost or pricing data requirements, but only after some form of cost or price analysis has been applied to determine that the price is fair and reasonable; i.e., these two alternative standards of adequate price competition are insufficient by themselves to be used to establish fair and reasonable prices in accordance with price analysis techniques and procedures (per FAR 15.404–1(b)(2)). 1. Determination That a Price Is Fair and Reasonable Comment: One respondent believed that removing the reference to FAR 15.403–1(c)(1) and replacing it with 15.403–1(c)(1)(i) would mean that only one of the three prongs of the definition of adequate price competition could be used to establish that a price is fair and reasonable. Response: FAR 15.404–1(b)(2) delineates the various price analysis techniques to ensure a fair and reasonable price; 15.404–1(b)(2)(i) describes one of those price analysis techniques, the comparison of proposed prices received in response to a solicitation, and refers to 15.403–1(c)(1) therein. The current reference (to FAR 15.403–1(c)(1)) in this section (15.404– 1(b)(1)(2)(i)) was too broad; therefore, this rule changes this reference to 15.403–1(c)(1)(i), which precisely aligns the price analysis technique of 2. Justification for Changing FAR Price Analysis Techniques Comment: One respondent stated that no justification has been provided to support this proposed change to the FAR price analysis techniques. The respondent stated they did not know what supposed problem the proposed rule is intended to address. Response: The Councils note that this rule does not change the availability of the various price analysis techniques available to the contracting officer. The current FAR reference (to 15.403– 1(c)(1)) is a FAR section that discusses various standards for adequate price competition (for exceptions from certified cost or pricing data requirements), including the price analysis technique of comparing two or more proposed prices. The rule simply pinpoints the reference associated with the price analysis technique of comparing proposed prices (described at with the price analysis technique of comparing proposed prices received in response to a solicitation, the reference in this section is more appropriately identified as 15.403–1(c)(1)(i), which is more precise (and addresses adequate price competition when proposed prices are received from multiple offerors), in lieu of the existing reference, 15.403– 1(c)(1), which is more generalized (and addresses various standards for adequate price competition, including the receipt of proposed prices from multiple offerors). II. Discussion and Analysis The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (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. Summary of Significant Changes FAR 15.404–1(b)(2)(i) is amended to change the reference in this FAR section from 15.403–1(c)(1) to 15.403–1(c)(1)(i). This change ensures that the revised reference is more precise and directly related to the topic covered in 15.404– 1(b)(2)(i). Based on a review of the public comments, discussed below, the Councils have concluded that no change to the proposed rule is necessary. PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 E:\FR\FM\21JNR2.SGM 21JNR2 Federal Register / Vol. 78, No. 120 / Friday, June 21, 2013 / Rules and Regulations 15.404–1(b)(2)(i) for determining a fair and reasonable price) with the FAR section (15.403–1(c)(1)(i)) that discusses the comparison of proposed prices submitted by two or more responsible offerors (for determining adequate price competition, one of the standards for exception from certified cost or pricing data requirements). Additionally, it eliminates a possible inconsistency. The current reference (to FAR 15.403– 1(c)(1)) in the discussion on price analysis techniques to ensure a fair and reasonable price (at 15.404–1(b)(2)(i)) could be interpreted to mean that the other two alternative standards for adequate price competition (for exceptions from certified cost or pricing data requirements described at 15.403– 1(c)(1)(ii) and (iii)) could be used to determine a fair and reasonable price, when, in fact, they cannot. See response to Comment 1, Determination that a price is fair and reasonable. TKELLEY on DSK3SPTVN1PROD with RULES2 3. The Promotion of Competition Comment: One respondent believed that the proposed rule would discourage contracting officers from promoting competition. Response: This rule does not discourage contracting officers from promoting competition. 10 U.S.C. 2304 and 41 U.S.C. 3301 require, with certain limited exceptions, that contracting officers shall promote and provide for full and open competition in soliciting offers and awarding Government contracts (see FAR 6.101). This rule has no effect on those statutory requirements. Furthermore, there is great emphasis within the Government on obtaining competition, because competition generally results in cost savings to the Government. 4. Expansion of Cost or Pricing Data Requests Comment: Although one respondent acknowledged that this rule does not alter the current FAR requirements regarding the requesting of certified cost or pricing data, the respondent believed that this FAR change will inevitably lead to contracting officers requesting data other than certified cost or pricing data for a greater number of procurements. According to the respondent, this will impose substantial costs on prospective offerors who will be forced to compile comprehensive cost or pricing data to meet the Government’s expansive definition of that term. Compiling these data will also be time consuming which will delay procurements. The respondent also stated that there is no reasonable basis to revert to the broad requirements for submission of cost or pricing data that VerDate Mar<15>2010 18:42 Jun 20, 2013 Jkt 229001 existed prior to the statutory reforms of the 1990s, including the Federal Acquisition Streamlining Act of 1994. Response: This rule should not impact the requesting of data other than certified cost or pricing data. FAR 15.403–1(c)(1)(ii) and (iii) already requires determination that the price is reasonable in order for adequate price competition to exist. According to the pricing policy at 15.402, which remains unchanged, contracting officers are directed to obtain only the minimum amount of data necessary to establish a fair and reasonable price, and are directed at FAR 15.403–3(b) to obtain any necessary additional data from sources other than the offeror to the maximum extent practicable. 5. Significant Regulatory Action Comment: One respondent stated that this proposed rule is a significant regulatory action and should have been subject to review by the Office of Information and Regulatory Affairs (OIRA). The respondent stated that the proposed rule will have an annual effect on the economy of $100 million or will adversely affect a sector of the economy in a material way. The respondent believed that by indicating that the proposed rule merely ‘‘clarifies’’ FAR 15.404–1(b)(2)(i), the Councils are subverting the OFPP Act requirements to solicit and provide an opportunity for public comment. The Councils should issue another Federal Register notice that explains the nature and effect of the proposed changes that reasonably solicits public comments on those changes. Response: The Councils met the requirements of the OFPP Act by publishing the proposed rule and its supporting rationale in the Federal Register for public comment. Furthermore, DoD, GSA, and NASA submit all FAR rules to OIRA for clearance to publish. OIRA determined that the rule was not a significant rule and cleared it for publication without subjecting it to the formal coordination and review under section 6(b) of E.O. 12866. OIRA also concurred that this is not a major rule under 5 U.S.C. 804. 6. Distinction Between Adequate Competition and Adequate Price Competition Comment: One respondent commented that a reasonableness determination and comparison of prices based upon two or more offers are two different things that require a distinction. The respondent further stated that a price found reasonable is not suitable in all cases to be used for comparison and that this was an PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 37691 opportunity for the FAR to make explicit such a distinction. The respondent recommended that adequate competition be distinguished from adequate price competition. Response: The Councils take no position on this comment because it is outside the scope of this case, which was limited to clarifying a FAR reference relative to a particular price analysis technique. 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 not a significant regulatory action and, therefore, was not 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 DoD, GSA, and NASA do not expect this final rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. because this rule merely clarifies and pinpoints the reference at FAR 15.404–1(b)(2)(i), a discussion on the price analysis technique of comparing two or more proposed prices received in response to the solicitation in order to establish a fair and reasonable price. The original, more generalized reference (to FAR 15.403–1(c)(1)), which describes various standards for adequate price competition (for exceptions from certified cost or pricing data requirements, including comparing proposals from multiple offerors), is changed to the more precise reference, 15.403–1(c)(1)(i), which describes the receipt of multiple offers in response to the solicitation as a standard for adequate price competition. Nevertheless DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5.U.S.C. 601, et seq. The FRFA is summarized as follows: FAR 15.404–1(b)(2) addresses various price analysis techniques and procedures the Government may use to ensure a fair and E:\FR\FM\21JNR2.SGM 21JNR2 TKELLEY on DSK3SPTVN1PROD with RULES2 37692 Federal Register / Vol. 78, No. 120 / Friday, June 21, 2013 / Rules and Regulations reasonable price. FAR 15.404–1(b)(2)(i) discusses the comparison of proposed prices received in response to a solicitation as an example of such techniques and procedures. In this discussion of price analysis techniques, FAR 15.404–1(b)(2)(i) references 15.403–1(c)(1), which sets forth the various standards of adequate price competition (for exceptions from certified cost or pricing data requirements). However, only FAR 15.403– 1(c)(1)(i) addresses the situation when two or more responsible offerors, competing independently, submit priced offers that satisfy the Government’s expressed requirement, a situation which is consistent with the price analysis technique of comparing proposed prices from multiple offerors. Therefore, the reference in FAR 15.404–1(b)(2)(i) is more appropriately identified as 15.403–1(c)(1)(i), which describes the standard comparing proposed prices received from multiple offerors, rather than the generalized 15.403–1(c)(1), which is broader in scope with various additional standards of adequate price competition. One comment from an interested party was submitted in response to the Regulatory Flexibility Act request under the proposed rule. The respondent believed that this rule was a significant regulatory action under E.O. 12866 based upon the respondent’s interpretation that the rule would constitute a significant change to the pricing regulations in FAR subpart 15.4. However, FAR 15.404– 1(b)(2) delineates the various price analysis techniques; 15.404–1(b)(2)(i) describes the comparison of proposed prices received in response to a solicitation. The current reference in this section (to FAR 15.403– 1(c)(1)) was too broad; therefore, this rule changes this generalized reference to 15.403– 1(c)(1)(i), which precisely aligns the price analysis technique of comparing proposed prices from multiple offerors in 15.404– 1(b)(2)(i) (for determining a fair and reasonable price) with the adequate price competition standard of comparing two or more offerors’ proposed prices (for exceptions from certified cost or pricing data requirements). The designation of a rule as significant regulatory action under E.O. 12866 is made by the Office of Information and Regulatory Affairs within the Office of Management and Budget, which declined to designate this rule as requiring official review. No comments were filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the rule and no changes were made to the rule. It is not expected that this rule will 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.; this rule merely clarifies that in order to establish a fair and reasonable price, the reference at FAR 15.404–1(b)(2)(i) (which describes the pricing technique of comparing proposed prices from multiple offerors) shall be the more precise FAR 15.403–1(c)(1)(i) (which describes the standard for adequate price competition when proposed prices are submitted by multiple offerors), rather than the more generalized 15.403–1(c)(1) (which describes various standards for adequate price competition, including comparing proposed prices from multiple offerors). VerDate Mar<15>2010 18:42 Jun 20, 2013 Jkt 229001 There are no projected reporting, recordkeeping, or other compliance requirements projected for this rule. The approach described in the final rule is the most practical and beneficial for both Government and industry. Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration. 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 Subject in 48 CFR Part 15 Government procurement. Dated: June 13, 2013. William Clark, Acting Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy. Therefore, DoD, GSA, and NASA amend 48 CFR part 15 as set forth below: PART 15—CONTRACTING BY NEGOTIATION 1. The authority citation for 48 CFR part 15 is revised to read as follows: ■ Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113. 15.404–1 [Amended] 2. Amend section 15.404–1 by removing from paragraph (b)(2)(i) ‘‘15.403–1(c)(1)’’ and adding ‘‘15.403– 1(c)(1)(i)’’ in its place. ■ [FR Doc. 2013–14615 Filed 6–20–13; 8:45 am] BILLING CODE 6820–EP–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Part 19 [FAC 2005–67; FAR Case 2013–010; Item VII; Docket 2013–0010, Sequence 1] RIN 9000–AM59 Federal Acquisition Regulation; Contracting With Women-Owned Small Business Concerns Department of Defense (DoD), General Services Administration (GSA), AGENCY: PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 and National Aeronautics and Space Administration (NASA). ACTION: Interim rule. DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to remove the dollar limitation for setasides to economically disadvantaged women-owned small business concerns and to women-owned small business concerns eligible under the Womenowned Small Business Program. DATES: Effective Date: June 21, 2013. Comment Date: Interested parties should submit written comments to the Regulatory Secretariat on or before August 20, 2013 to be considered in the formulation of a final rule. ADDRESSES: Submit comments identified by FAC 2005–67, FAR Case 2013–010, by any of the following methods: • Regulations.gov: http:// www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching for ‘‘FAR Case 2013–010’’. Select the link ‘‘Submit a Comment’’ that corresponds with ‘‘FAR Case 2013– 010.’’ Follow the instructions provided at the ‘‘Submit a Comment’’ screen. Please include your name, company name (if any), and ‘‘FAR Case 2013– 010’’ on your attached document. • Fax: 202–501–4067. • Mail: U.S. General Services Administration, Regulatory Secretariat Division (MVCB), ATTN: Hada Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20405. Instructions: Please submit comments only and cite FAC 2005–67, FAR Case 2013–010, in all correspondence related to this case. All comments received will be posted without change to http:// www.regulations.gov, including any personal and/or business confidential information provided. FOR FURTHER INFORMATION CONTACT: Mr. Karlos Morgan, Procurement Analyst, at 202–501–2364, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202–501– 4755. Please cite FAC 2005–67, FAR Case 2013–010. SUPPLEMENTARY INFORMATION: SUMMARY: I. Background DoD, GSA, and NASA are issuing an interim rule amending the FAR, to implement section 1697 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013, Public Law 112– 239, which amended section 8(m) of the Small Business Act, (15 U.S.C. 637(m)). Section 8(m) of the Small Business Act sets forth the Procurement Program for E:\FR\FM\21JNR2.SGM 21JNR2

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]
[Rules and Regulations]
[Pages 37690-37692]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-14615]



[[Page 37690]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 15

[FAC 2005-67; FAR Case 2012-018; Item VI; Docket 2012-0018, Sequence 1]
RIN 9000-AM27


Federal Acquisition Regulation; Price Analysis Techniques

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

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to clarify and give a precise 
reference in the use of a price analysis technique in order to 
establish a fair and reasonable price.

DATES: Effective Date: July 22, 2013.

FOR FURTHER INFORMATION CONTACT: Mr. Edward N. Chambers, Procurement 
Analyst, at 202-501-3221, for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at 202-501-4755. Please cite FAC 2005-67, FAR Case 2012-
018.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 77 FR 40552 on July 10, 2012, to clarify and pinpoint a 
reference used in FAR 15.404-1(b)(2)(i). FAR 15.404-1(b)(2) addresses 
various price analysis techniques and procedures that the Government 
may use to ensure a fair and reasonable price. One of those techniques 
at FAR 15.404-1(b)(2)(i) describes the comparison of proposed prices 
received in response to a solicitation as an example of such techniques 
and procedures. In its discussion, FAR 15.404-1(b)(2)(i) references 
15.403-1(c)(1), which sets forth the various standards of adequate 
price competition (for exceptions from certified cost or pricing data 
requirements). However, only FAR 15.403-1(c)(1)(i) (rather than all of 
15.403-1(c)(1)) actually addresses the situation when two or more 
responsible offerors, competing independently, submit priced offers 
that satisfy the Government's expressed requirement. Since FAR 15.404-
1(b)(2)(i) deals only with the price analysis technique of comparing 
proposed prices received in response to a solicitation, the reference 
in this section is more appropriately identified as 15.403-1(c)(1)(i), 
which is more precise (and addresses adequate price competition when 
proposed prices are received from multiple offerors), in lieu of the 
existing reference, 15.403-1(c)(1), which is more generalized (and 
addresses various standards for adequate price competition, including 
the receipt of proposed prices from multiple offerors).

II. Discussion and Analysis

    The Civilian Agency Acquisition Council and the Defense Acquisition 
Regulations Council (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. Summary of Significant Changes

    FAR 15.404-1(b)(2)(i) is amended to change the reference in this 
FAR section from 15.403-1(c)(1) to 15.403-1(c)(1)(i). This change 
ensures that the revised reference is more precise and directly related 
to the topic covered in 15.404-1(b)(2)(i).
    Based on a review of the public comments, discussed below, the 
Councils have concluded that no change to the proposed rule is 
necessary.

B. Analysis of Public Comments

    The Regulatory Secretariat received responses from two respondents 
to the proposed rule, which are discussed below:
1. Determination That a Price Is Fair and Reasonable
    Comment: One respondent believed that removing the reference to FAR 
15.403-1(c)(1) and replacing it with 15.403-1(c)(1)(i) would mean that 
only one of the three prongs of the definition of adequate price 
competition could be used to establish that a price is fair and 
reasonable.
    Response: FAR 15.404-1(b)(2) delineates the various price analysis 
techniques to ensure a fair and reasonable price; 15.404-1(b)(2)(i) 
describes one of those price analysis techniques, the comparison of 
proposed prices received in response to a solicitation, and refers to 
15.403-1(c)(1) therein. The current reference (to FAR 15.403-1(c)(1)) 
in this section (15.404-1(b)(1)(2)(i)) was too broad; therefore, this 
rule changes this reference to 15.403-1(c)(1)(i), which precisely 
aligns the price analysis technique of comparing multiple proposed 
prices received in response to a solicitation described in 15.404-
1(b)(2)(i) with the adequate price competition standard (for exceptions 
from certified cost or pricing data requirements) of comparing proposed 
prices submitted by multiple independent offerors. The other two 
alternative standards for establishing adequate price competition 
within the generalized reference FAR 15.403-1(c)(1) (for exceptions 
from certified cost or pricing data requirements) at 15.403-1(c)(1)(ii) 
and (iii) do not involve any comparison of proposed prices submitted by 
multiple offerors. Furthermore, it was illogical to rely on the other 
two alternative standards of adequate price competition (for exceptions 
from certified cost or pricing data requirements at FAR 15.403-
1(c)(1)(ii) and (iii)) to determine a fair and reasonable price using 
price analysis techniques and procedures (per the prescription at 
15.404-1(b)(2(i)). This is because the determination that the price is 
fair and reasonable itself is required for these two alternative 
standards at FAR 15.403-1(c)(1)(ii) and (iii) in order to determine 
that adequate price competition exists. These two alternative standards 
of adequate price competition can be used to meet the exceptions from 
certified cost or pricing data requirements, but only after some form 
of cost or price analysis has been applied to determine that the price 
is fair and reasonable; i.e., these two alternative standards of 
adequate price competition are insufficient by themselves to be used to 
establish fair and reasonable prices in accordance with price analysis 
techniques and procedures (per FAR 15.404-1(b)(2)).
2. Justification for Changing FAR Price Analysis Techniques
    Comment: One respondent stated that no justification has been 
provided to support this proposed change to the FAR price analysis 
techniques. The respondent stated they did not know what supposed 
problem the proposed rule is intended to address.
    Response: The Councils note that this rule does not change the 
availability of the various price analysis techniques available to the 
contracting officer. The current FAR reference (to 15.403-1(c)(1)) is a 
FAR section that discusses various standards for adequate price 
competition (for exceptions from certified cost or pricing data 
requirements), including the price analysis technique of comparing two 
or more proposed prices. The rule simply pinpoints the reference 
associated with the price analysis technique of comparing proposed 
prices (described at

[[Page 37691]]

15.404-1(b)(2)(i) for determining a fair and reasonable price) with the 
FAR section (15.403-1(c)(1)(i)) that discusses the comparison of 
proposed prices submitted by two or more responsible offerors (for 
determining adequate price competition, one of the standards for 
exception from certified cost or pricing data requirements). 
Additionally, it eliminates a possible inconsistency. The current 
reference (to FAR 15.403-1(c)(1)) in the discussion on price analysis 
techniques to ensure a fair and reasonable price (at 15.404-1(b)(2)(i)) 
could be interpreted to mean that the other two alternative standards 
for adequate price competition (for exceptions from certified cost or 
pricing data requirements described at 15.403-1(c)(1)(ii) and (iii)) 
could be used to determine a fair and reasonable price, when, in fact, 
they cannot. See response to Comment 1, Determination that a price is 
fair and reasonable.
3. The Promotion of Competition
    Comment: One respondent believed that the proposed rule would 
discourage contracting officers from promoting competition.
    Response: This rule does not discourage contracting officers from 
promoting competition. 10 U.S.C. 2304 and 41 U.S.C. 3301 require, with 
certain limited exceptions, that contracting officers shall promote and 
provide for full and open competition in soliciting offers and awarding 
Government contracts (see FAR 6.101). This rule has no effect on those 
statutory requirements. Furthermore, there is great emphasis within the 
Government on obtaining competition, because competition generally 
results in cost savings to the Government.
4. Expansion of Cost or Pricing Data Requests
    Comment: Although one respondent acknowledged that this rule does 
not alter the current FAR requirements regarding the requesting of 
certified cost or pricing data, the respondent believed that this FAR 
change will inevitably lead to contracting officers requesting data 
other than certified cost or pricing data for a greater number of 
procurements. According to the respondent, this will impose substantial 
costs on prospective offerors who will be forced to compile 
comprehensive cost or pricing data to meet the Government's expansive 
definition of that term. Compiling these data will also be time 
consuming which will delay procurements. The respondent also stated 
that there is no reasonable basis to revert to the broad requirements 
for submission of cost or pricing data that existed prior to the 
statutory reforms of the 1990s, including the Federal Acquisition 
Streamlining Act of 1994.
    Response: This rule should not impact the requesting of data other 
than certified cost or pricing data. FAR 15.403-1(c)(1)(ii) and (iii) 
already requires determination that the price is reasonable in order 
for adequate price competition to exist. According to the pricing 
policy at 15.402, which remains unchanged, contracting officers are 
directed to obtain only the minimum amount of data necessary to 
establish a fair and reasonable price, and are directed at FAR 15.403-
3(b) to obtain any necessary additional data from sources other than 
the offeror to the maximum extent practicable.
5. Significant Regulatory Action
    Comment: One respondent stated that this proposed rule is a 
significant regulatory action and should have been subject to review by 
the Office of Information and Regulatory Affairs (OIRA). The respondent 
stated that the proposed rule will have an annual effect on the economy 
of $100 million or will adversely affect a sector of the economy in a 
material way. The respondent believed that by indicating that the 
proposed rule merely ``clarifies'' FAR 15.404-1(b)(2)(i), the Councils 
are subverting the OFPP Act requirements to solicit and provide an 
opportunity for public comment. The Councils should issue another 
Federal Register notice that explains the nature and effect of the 
proposed changes that reasonably solicits public comments on those 
changes.
    Response: The Councils met the requirements of the OFPP Act by 
publishing the proposed rule and its supporting rationale in the 
Federal Register for public comment. Furthermore, DoD, GSA, and NASA 
submit all FAR rules to OIRA for clearance to publish. OIRA determined 
that the rule was not a significant rule and cleared it for publication 
without subjecting it to the formal coordination and review under 
section 6(b) of E.O. 12866. OIRA also concurred that this is not a 
major rule under 5 U.S.C. 804.
6. Distinction Between Adequate Competition and Adequate Price 
Competition
    Comment: One respondent commented that a reasonableness 
determination and comparison of prices based upon two or more offers 
are two different things that require a distinction. The respondent 
further stated that a price found reasonable is not suitable in all 
cases to be used for comparison and that this was an opportunity for 
the FAR to make explicit such a distinction. The respondent recommended 
that adequate competition be distinguished from adequate price 
competition.
    Response: The Councils take no position on this comment because it 
is outside the scope of this case, which was limited to clarifying a 
FAR reference relative to a particular price analysis technique.

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 not a significant regulatory action and, therefore, was not 
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

    DoD, GSA, and NASA do not expect this final rule to have a 
significant economic impact on a substantial number of small entities 
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et 
seq. because this rule merely clarifies and pinpoints the reference at 
FAR 15.404-1(b)(2)(i), a discussion on the price analysis technique of 
comparing two or more proposed prices received in response to the 
solicitation in order to establish a fair and reasonable price. The 
original, more generalized reference (to FAR 15.403-1(c)(1)), which 
describes various standards for adequate price competition (for 
exceptions from certified cost or pricing data requirements, including 
comparing proposals from multiple offerors), is changed to the more 
precise reference, 15.403-1(c)(1)(i), which describes the receipt of 
multiple offers in response to the solicitation as a standard for 
adequate price competition. Nevertheless DoD, GSA, and NASA have 
prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with 
the Regulatory Flexibility Act, 5.U.S.C. 601, et seq. The FRFA is 
summarized as follows:

    FAR 15.404-1(b)(2) addresses various price analysis techniques 
and procedures the Government may use to ensure a fair and

[[Page 37692]]

reasonable price. FAR 15.404-1(b)(2)(i) discusses the comparison of 
proposed prices received in response to a solicitation as an example 
of such techniques and procedures. In this discussion of price 
analysis techniques, FAR 15.404-1(b)(2)(i) references 15.403-
1(c)(1), which sets forth the various standards of adequate price 
competition (for exceptions from certified cost or pricing data 
requirements). However, only FAR 15.403-1(c)(1)(i) addresses the 
situation when two or more responsible offerors, competing 
independently, submit priced offers that satisfy the Government's 
expressed requirement, a situation which is consistent with the 
price analysis technique of comparing proposed prices from multiple 
offerors. Therefore, the reference in FAR 15.404-1(b)(2)(i) is more 
appropriately identified as 15.403-1(c)(1)(i), which describes the 
standard comparing proposed prices received from multiple offerors, 
rather than the generalized 15.403-1(c)(1), which is broader in 
scope with various additional standards of adequate price 
competition.
    One comment from an interested party was submitted in response 
to the Regulatory Flexibility Act request under the proposed rule. 
The respondent believed that this rule was a significant regulatory 
action under E.O. 12866 based upon the respondent's interpretation 
that the rule would constitute a significant change to the pricing 
regulations in FAR subpart 15.4. However, FAR 15.404-1(b)(2) 
delineates the various price analysis techniques; 15.404-1(b)(2)(i) 
describes the comparison of proposed prices received in response to 
a solicitation. The current reference in this section (to FAR 
15.403-1(c)(1)) was too broad; therefore, this rule changes this 
generalized reference to 15.403-1(c)(1)(i), which precisely aligns 
the price analysis technique of comparing proposed prices from 
multiple offerors in 15.404-1(b)(2)(i) (for determining a fair and 
reasonable price) with the adequate price competition standard of 
comparing two or more offerors' proposed prices (for exceptions from 
certified cost or pricing data requirements). The designation of a 
rule as significant regulatory action under E.O. 12866 is made by 
the Office of Information and Regulatory Affairs within the Office 
of Management and Budget, which declined to designate this rule as 
requiring official review. No comments were filed by the Chief 
Counsel for Advocacy of the Small Business Administration in 
response to the rule and no changes were made to the rule.
    It is not expected that this rule will 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.; 
this rule merely clarifies that in order to establish a fair and 
reasonable price, the reference at FAR 15.404-1(b)(2)(i) (which 
describes the pricing technique of comparing proposed prices from 
multiple offerors) shall be the more precise FAR 15.403-1(c)(1)(i) 
(which describes the standard for adequate price competition when 
proposed prices are submitted by multiple offerors), rather than the 
more generalized 15.403-1(c)(1) (which describes various standards 
for adequate price competition, including comparing proposed prices 
from multiple offerors).
    There are no projected reporting, recordkeeping, or other 
compliance requirements projected for this rule.
    The approach described in the final rule is the most practical 
and beneficial for both Government and industry.

    Interested parties may obtain a copy of the FRFA from the 
Regulatory Secretariat. The Regulatory Secretariat has submitted a copy 
of the FRFA to the Chief Counsel for Advocacy of the Small Business 
Administration.

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 Subject in 48 CFR Part 15

    Government procurement.

    Dated: June 13, 2013.
William Clark,
Acting Director, Office of Governmentwide Acquisition Policy, Office of 
Acquisition Policy, Office of Governmentwide Policy.

    Therefore, DoD, GSA, and NASA amend 48 CFR part 15 as set forth 
below:

PART 15--CONTRACTING BY NEGOTIATION

0
1. The authority citation for 48 CFR part 15 is revised to read as 
follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.


15.404-1  [Amended]

0
2. Amend section 15.404-1 by removing from paragraph (b)(2)(i) 
``15.403-1(c)(1)'' and adding ``15.403-1(c)(1)(i)'' in its place.

[FR Doc. 2013-14615 Filed 6-20-13; 8:45 am]
BILLING CODE 6820-EP-P