Federal Acquisition Regulation; Review and Justification of Pass-Through Contracts, 26424-26426 [2015-11029]
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26424
Federal Register / Vol. 80, No. 88 / Thursday, May 7, 2015 / Rules and Regulations
With regard to equal opportunity for
individuals with disabilities, DOL estimated
that its rule impacts 20,490 Federal
contractors with between 50 and 500
employees (approximately 44% of Federal
contractors may be impacted).
This FAR rule does not add any new
reporting, recordkeeping, or other
compliance burdens. The FAR rule makes
contracting officers and contractors aware of
the DOL requirements.
DoD, GSA, and NASA are not aware of any
significant alternatives which would
accomplish the stated objectives of
implementing the DOL final rules, while
minimizing impact on small entities. DoD,
GSA, and NASA do not have the flexibility
of changing the DOL rules, which have been
published for public comment and are in
effect as final rules. There is no significant
impact on small entities imposed by the FAR
rule.
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 Paperwork Reduction Act (44
U.S.C. chapter 35) does apply; however,
these changes to the FAR do not impose
additional information collection
requirements to the paperwork burden
previously approved for the DOL
regulations under OMB Control
Numbers 1250–0004, OFCCP
Recordkeeping and Reporting
Requirements—38 U.S.C. 4212, Vietnam
Era Veterans’ Readjustment Assistance
Act of 1974, as amended; 1250–0005,
OFCCP Recordkeeping and Reporting
Requirements—Section 503 of the
Rehabilitation Act of 1973, as amended,
29 U.S.C. 703; and 1293–0005, Federal
Contractor Veterans’ Employment
Report, VETS–100/VETS–100A.
List of Subjects in 48 CFR Parts 1, 22,
and 52
Government procurement.
Dated: April 30, 2015.
William Clark,
Director, Office of Government-wide
Acquisition Policy, Office of Acquisition
Policy, Office of Government-wide Policy.
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Interim Rule Adopted as Final Without
Change
Accordingly, the interim rule
amending 48 CFR parts 1, 22, and 52,
which was published in the Federal
Register at 79 FR 43575 on July 25,
2014, is adopted as a final rule without
change.
[FR Doc. 2015–11028 Filed 5–6–15; 8:45 am]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Part 15
[FAC 2005–82; FAR Case 2013–012; Item
II; Docket No. 2013–0012; Sequence No. 1]
RIN 9000–AM57
Federal Acquisition Regulation;
Review and Justification of PassThrough Contracts
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
implement section 802 of the National
Defense Authorization Act (NDAA) for
Fiscal Year (FY) 2013. This section
provides additional requirements
relative to the review and justification of
pass-through contracts.
DATES: Effective: June 8, 2015.
FOR FURTHER INFORMATION CONTACT: Ms.
Kathy J. Hopkins, Procurement Analyst,
at 202–969–7226 for clarification of
content. For information pertaining to
status or publication schedules, contact
the Regulatory Secretariat Division at
202–501–4755. Please cite FAC 2005–
82, FAR Case 2013–012.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
DoD, GSA, and NASA published a
proposed rule in the Federal Register at
79 FR 39361 on July 10, 2014 to
implement section 802 of the NDAA for
FY 2013 (Pub. L. 112–239) which
provided for additional requirements
relative to the review and justification of
pass-through contracts. Specifically, in
those instances where an offeror for a
contract, task order, or delivery order
informs the agency pursuant to FAR
52.215–22 of its intention to award
subcontracts for more than 70 percent of
the total cost of work to be performed
under the contract, task order, or
delivery order, section 802 requires the
contracting officer to (1) consider the
availability of alternative contract
vehicles and the feasibility of
contracting directly with a
subcontractor or subcontractors that will
perform the bulk of the work; (2) make
a written determination that the
contracting approach selected is in the
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best interest of the Government; and (3)
document the basis for such
determination. These statutory
requirements are being implemented in
FAR 15.404–1(h). For consistency, this
rule is applicable to all of the agencies
subject to the FAR, even though section
802 only applied to the Department of
Defense, the Department of State, and
the United States Agency for
International Development. Contract
actions under section 46 of the Small
Business Act (15 U.S.C. 657s) are
exempt from the requirements under
section 802 of the NDAA for FY 2013.
Two respondents submitted
comments on the proposed rule.
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
This final rule makes two changes
from the proposed rule. The first change
revises FAR 15.404–1(h)(2) to make
clear that competition requirements still
apply if the contracting officer selects
alternative approaches. The second
change revises FAR 15.404–1(h)(3) to
clarify that the requirements of this rule
do not apply to small business set-aside
contracts.
B. Analysis of Public Comments
The Regulatory Secretariat Division
received responses from two
respondents to the proposed rule which
are discussed below:
1. Application of Rule to FAR Part 36
Comment: One respondent requested
that the final rule ensure that this new
requirement take into consideration the
requirements found in FAR 36.501,
which addresses performance of work
by prime construction contractors.
Response: The statute does not
exempt the contracting officer from
making a written determination that the
contracting approach selected is in the
best interest of the Government under
FAR part 36 acquisitions. The
contracting officer shall take into
consideration industry practices in
making this determination.
2. Conflict With FAR 52.219–14
Comment: One respondent stated that
FAR clause 52.219–14, Limitations on
Subcontracting, could also conflict with
the new requirements of this rule.
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Federal Register / Vol. 80, No. 88 / Thursday, May 7, 2015 / Rules and Regulations
Response: FAR clause 52.219–14,
Limitations on Subcontracting, applies
only to contracts that have been set
aside for small business concerns or 8(a)
concerns. Section 1615 of the NDAA for
FY 2014 (Pub. L. 113–66) exempts
contract actions subject to Section 46 of
the Small Business Act (15 U.S.C. 657s).
The text at FAR 15.404–1(h)(3) has been
revised to clarify that contract actions
awarded pursuant to FAR subparts 19.5,
19.8, 19.13, 19.14, or 19.15 are exempt
from the requirements of this rule.
Therefore, the requirements of this rule
do not conflict with FAR clause 52.219–
14.
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3. Potential Increase in Bid Protests
Comment: One respondent stated that
by requiring contracting officers to
consider direct award to a subcontractor
that will perform more than 70 percent
of the work, those subcontractors could
become interested parties for bid protest
purposes. This could open the door to
a substantial number of bid protests and
significantly impact the ability of
agencies to make timely awards.
Response: The statute requires that
the contracting officer consider the
availability of alternative contract
vehicles and the feasibility of
contracting directly with a
subcontractor or subcontractors that will
perform the bulk of the work, make a
determination that the contracting
approach selected is in the best interest
of the Government, and document the
basis for such determination. By
following these requirements and
adhering to the established solicitation
procedures in the FAR, contracting
officers will mitigate the risk of protests.
This rule does not change existing
competition requirements, nor does it
change the status of subcontractors in
the bid protest process.
4. Subcontractors Lacking Prime
Contractor Experience
Comment: One respondent stated that
direct award to subcontractors that do
not have sufficient prime experience
can severely impact procurements and
result in a substantial increase in
workload for both the contractor and the
Government (i.e. additional audits and
business system reviews).
Response: The statute requires that
contracting officers consider direct
award to subcontractors and the
purpose of this rule is to amend the FAR
to implement that requirement.
However, it should be noted that both
the statute and the rule only require that
the contracting officer consider direct
award. Contracting officers shall
continue to ensure that purchases shall
be made from, and contracts shall be
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awarded to, responsible prospective
contractors only, in accordance with
FAR 9.103.
5. Subcontractors Contracting Directly
With the Government
Comment: One respondent opined
that prime contractors will try to avoid
the impact of this rule by using contract
provisions that prohibit subcontractors
from entering into a direct contract with
the agency. So, if this rule is going to
work, a clause preventing primes from
including a restrictive provision in a
teaming arrangement and/or subcontract
needs to be included in the rule.
Response: FAR clause 52.203–6
‘‘Restrictions on Subcontractor Sales to
the Government’’ precludes prime
contractors from including such
restrictions in their agreements with
actual or prospective subcontractors.
For acquisitions of commercial items,
the prohibition applies only to the
extent that any agreement restricting
sales by subcontractors results in the
Federal Government being treated
differently from any other prospective
purchaser for the sale of the commercial
item(s).
6. Subcontractor Pricing and
Participation in Negotiations
Comment: One respondent stated that
in many cases, the prime contractors do
not allow subcontractors to see the final
version of the prime’s proposal sent in
response to the Government’s RFP or
allow subcontractors to participate in
negotiations. As such, the subcontractor
pricing that the Government sees in the
prime contractor’s proposal or during
negotiations may not be accurate. This
issue can be resolved by revising the
proposed clause in the rule to require
the prime contractor to obtain the
signed approval of the subcontractor’s
portion of the final offer submitted to
the Government and allowing
subcontractors that will perform 70
percent or more work to participate in
negotiations.
Response: FAR 15.404–3 already
provides requirements for evaluating
subcontractor pricing and obtaining
certified cost or pricing data as required.
Prime contractors are responsible for
managing their subcontractors and
appropriately evaluating subcontractor
cost or pricing data in accordance with
FAR subpart 15.4.
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
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26425
(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
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 augments the current
responsibilities of contracting officers
relative to the review and justification of
pass-through contracts and does not
initiate or impose any new
administrative or performance
requirements on contractors. In
addition, contract actions awarded
pursuant to FAR subparts 19.5, 19.8,
19.13, 19.14, or 19.15 are exempt from
the requirements of this rule.
V. Paperwork Reduction Act
The 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: April 30, 2015.
William Clark,
Director, Office of Government-wide
Acquisition Policy, Office of Acquisition
Policy, Office of Government-wide 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 continues to read as follows:
■
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 51 U.S.C. 20113.
2. Amend section 15.404–1 by adding
paragraph (h) to read as follows:
■
15.404–1
*
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Proposal analysis techniques.
*
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*
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Federal Register / Vol. 80, No. 88 / Thursday, May 7, 2015 / Rules and Regulations
(h) Review and justification of passthrough contracts. (1) The requirements
of this paragraph (h) are applicable to all
agencies. The requirements apply by
law to the Department of Defense, the
Department of State, and the United
States Agency for International
Development, per section 802 of the
National Defense Authorization Act
(NDAA) for Fiscal Year 2013. The
requirements apply as a matter of policy
to other Federal agencies.
(2) Except as provided in paragraph
(h)(3) of this section, when an offeror for
a contract or a task or delivery order
informs the contracting officer pursuant
to 52.215–22 that it intends to award
subcontracts for more than 70 percent of
the total cost of work to be performed
under the contract, task or delivery
order, the contracting officer shall—
(i) Consider the availability of
alternative contract vehicles and the
feasibility of contracting directly with a
subcontractor or subcontractors that will
perform the bulk of the work. If such
alternative approaches are selected, any
resulting solicitations shall be issued in
accordance with the competition
requirements under FAR part 6;
(ii) Make a written determination that
the contracting approach selected is in
the best interest of the Government; and
(iii) Document the basis for such
determination.
(3) Contract actions awarded pursuant
to subparts 19.5, 19.8, 19.13, 19.14, or
19.15 are exempt from the requirements
of this paragraph (h) (see section 1615
of the National Defense Authorization
Act for Fiscal Year 2014 (Pub. L. 113–
66)).
[FR Doc. 2015–11029 Filed 5–6–15; 8:45 am]
BILLING CODE 6820–EP–P
ACTION:
Final rule.
DoD, GSA, and NASA are
issuing a final rule amending the
Federal Acquisition Regulation (FAR) to
accommodate the recent merger of the
Architect-Engineer Contract
Administration Support System
(ACASS) and the Construction
Contractor Appraisal Support System
(CCASS) modules within the Contractor
Performance Assessment Reporting
System (CPARS) database.
DATES: Effective: June 8, 2015.
FOR FURTHER INFORMATION CONTACT: Mr.
Curtis E. Glover, Sr., Procurement
Analyst, at 202–501–1448, for
clarification of content. For information
pertaining to status or publication
schedules, contact the Regulatory
Secretariat at 202–501–4755. Please cite
FAC 2005–82, FAR Case 2014–010.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
DoD, GSA, and NASA published a
proposed rule in the Federal Register at
79 FR 54949 on September 15, 2014, to
standardize the past performance
reporting requirements under the
CPARS database in FAR subpart 42.15.
One respondent submitted comments on
the proposed rule.
II. Discussion and Analysis
The Civilian Agency Acquisition
Council and the Defense Acquisition
Regulations Council (the Councils)
reviewed the public 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 Changes
There are no changes made in the
final rule as a result of the public
comments.
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
B. Public Comments
1. Continue To Use ACASS
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Part 42
[FAC 2005–82; FAR Case 2014–010; Item
III; Docket No. 2014–0010, Sequence No.
1]
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RIN 9000–AM79
Federal Acquisition Regulation;
Enhancements to Past Performance
Evaluation Systems
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
AGENCY:
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Comment: The respondent requests
that ACASS continue to be utilized
because the ratings are more descriptive
and appropriate to the design
professionals than those in CPARS.
Response: ACASS will not continue
to be utilized since the ACASS module
was merged into CPARS on July 1, 2014.
Appendix 3 of the ‘‘Guidance for
Contractor Performance Assessment
Reporting System (CPARS),’’ dated July
2014, provides specific instructions on
describing the different aspects of the
quality of the contractor’s work and the
contractor’s management of a quality
control program in the narrative of a
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CPARS evaluation for an ArchitectEngineer contract or order. This
guidance is accessible electronically at
https://www.cpars.gov/cparsfiles/pdfs/
CPARS-Guidance.pdf.
2. ‘‘Overall Rating’’ Added to CPARS
Comment: The respondent requests an
‘‘Overall Rating’’ be added to the CPARS
rating system, similar to the ACASS
system.
Response: An overall rating of
contractor performance in CPARS is not
advantageous, because the weight of the
specific evaluation areas (quality,
schedule, cost control, management,
utilization of small business and
regulatory compliance) is different for
each contract being evaluated and each
solicitation in which the offeror’s past
performance is being evaluated.
3. Interim Evaluations
Comment: The respondent suggests
that the interim evaluation in CPARS be
superseded by the final evaluation.
Response: The final evaluation is the
last rating provided to date on a
contract. Interim evaluations, combined
with the final evaluation (or last
evaluation to date), remain available in
order to provide the entire picture of
contractor performance under the
contract for future source selection
purposes.
C. Other Changes
For clarity, the final rule adds a
reference to the past performance
thresholds at paragraphs (b) through (f)
of section 42.1502.
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 certify that this
final rule will not have a significant
economic impact on a substantial
number of small entities within the
E:\FR\FM\07MYR2.SGM
07MYR2
]]>Agencies
[Federal Register Volume 80, Number 88 (Thursday, May 7, 2015)]
[Rules and Regulations]
[Pages 26424-26426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-11029]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 15
[FAC 2005-82; FAR Case 2013-012; Item II; Docket No. 2013-0012;
Sequence No. 1]
RIN 9000-AM57
Federal Acquisition Regulation; Review and Justification of Pass-
Through Contracts
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the
Federal Acquisition Regulation (FAR) to implement section 802 of the
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013.
This section provides additional requirements relative to the review
and justification of pass-through contracts.
DATES: Effective: June 8, 2015.
FOR FURTHER INFORMATION CONTACT: Ms. Kathy J. Hopkins, Procurement
Analyst, at 202-969-7226 for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat Division at 202-501-4755. Please cite FAC 2005-82, FAR Case
2013-012.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 79 FR 39361 on July 10, 2014 to implement section 802 of
the NDAA for FY 2013 (Pub. L. 112-239) which provided for additional
requirements relative to the review and justification of pass-through
contracts. Specifically, in those instances where an offeror for a
contract, task order, or delivery order informs the agency pursuant to
FAR 52.215-22 of its intention to award subcontracts for more than 70
percent of the total cost of work to be performed under the contract,
task order, or delivery order, section 802 requires the contracting
officer to (1) consider the availability of alternative contract
vehicles and the feasibility of contracting directly with a
subcontractor or subcontractors that will perform the bulk of the work;
(2) make a written determination that the contracting approach selected
is in the best interest of the Government; and (3) document the basis
for such determination. These statutory requirements are being
implemented in FAR 15.404-1(h). For consistency, this rule is
applicable to all of the agencies subject to the FAR, even though
section 802 only applied to the Department of Defense, the Department
of State, and the United States Agency for International Development.
Contract actions under section 46 of the Small Business Act (15 U.S.C.
657s) are exempt from the requirements under section 802 of the NDAA
for FY 2013.
Two respondents submitted comments on the proposed rule.
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
This final rule makes two changes from the proposed rule. The first
change revises FAR 15.404-1(h)(2) to make clear that competition
requirements still apply if the contracting officer selects alternative
approaches. The second change revises FAR 15.404-1(h)(3) to clarify
that the requirements of this rule do not apply to small business set-
aside contracts.
B. Analysis of Public Comments
The Regulatory Secretariat Division received responses from two
respondents to the proposed rule which are discussed below:
1. Application of Rule to FAR Part 36
Comment: One respondent requested that the final rule ensure that
this new requirement take into consideration the requirements found in
FAR 36.501, which addresses performance of work by prime construction
contractors.
Response: The statute does not exempt the contracting officer from
making a written determination that the contracting approach selected
is in the best interest of the Government under FAR part 36
acquisitions. The contracting officer shall take into consideration
industry practices in making this determination.
2. Conflict With FAR 52.219-14
Comment: One respondent stated that FAR clause 52.219-14,
Limitations on Subcontracting, could also conflict with the new
requirements of this rule.
[[Page 26425]]
Response: FAR clause 52.219-14, Limitations on Subcontracting,
applies only to contracts that have been set aside for small business
concerns or 8(a) concerns. Section 1615 of the NDAA for FY 2014 (Pub.
L. 113-66) exempts contract actions subject to Section 46 of the Small
Business Act (15 U.S.C. 657s). The text at FAR 15.404-1(h)(3) has been
revised to clarify that contract actions awarded pursuant to FAR
subparts 19.5, 19.8, 19.13, 19.14, or 19.15 are exempt from the
requirements of this rule. Therefore, the requirements of this rule do
not conflict with FAR clause 52.219-14.
3. Potential Increase in Bid Protests
Comment: One respondent stated that by requiring contracting
officers to consider direct award to a subcontractor that will perform
more than 70 percent of the work, those subcontractors could become
interested parties for bid protest purposes. This could open the door
to a substantial number of bid protests and significantly impact the
ability of agencies to make timely awards.
Response: The statute requires that the contracting officer
consider the availability of alternative contract vehicles and the
feasibility of contracting directly with a subcontractor or
subcontractors that will perform the bulk of the work, make a
determination that the contracting approach selected is in the best
interest of the Government, and document the basis for such
determination. By following these requirements and adhering to the
established solicitation procedures in the FAR, contracting officers
will mitigate the risk of protests. This rule does not change existing
competition requirements, nor does it change the status of
subcontractors in the bid protest process.
4. Subcontractors Lacking Prime Contractor Experience
Comment: One respondent stated that direct award to subcontractors
that do not have sufficient prime experience can severely impact
procurements and result in a substantial increase in workload for both
the contractor and the Government (i.e. additional audits and business
system reviews).
Response: The statute requires that contracting officers consider
direct award to subcontractors and the purpose of this rule is to amend
the FAR to implement that requirement. However, it should be noted that
both the statute and the rule only require that the contracting officer
consider direct award. Contracting officers shall continue to ensure
that purchases shall be made from, and contracts shall be awarded to,
responsible prospective contractors only, in accordance with FAR 9.103.
5. Subcontractors Contracting Directly With the Government
Comment: One respondent opined that prime contractors will try to
avoid the impact of this rule by using contract provisions that
prohibit subcontractors from entering into a direct contract with the
agency. So, if this rule is going to work, a clause preventing primes
from including a restrictive provision in a teaming arrangement and/or
subcontract needs to be included in the rule.
Response: FAR clause 52.203-6 ``Restrictions on Subcontractor Sales
to the Government'' precludes prime contractors from including such
restrictions in their agreements with actual or prospective
subcontractors. For acquisitions of commercial items, the prohibition
applies only to the extent that any agreement restricting sales by
subcontractors results in the Federal Government being treated
differently from any other prospective purchaser for the sale of the
commercial item(s).
6. Subcontractor Pricing and Participation in Negotiations
Comment: One respondent stated that in many cases, the prime
contractors do not allow subcontractors to see the final version of the
prime's proposal sent in response to the Government's RFP or allow
subcontractors to participate in negotiations. As such, the
subcontractor pricing that the Government sees in the prime
contractor's proposal or during negotiations may not be accurate. This
issue can be resolved by revising the proposed clause in the rule to
require the prime contractor to obtain the signed approval of the
subcontractor's portion of the final offer submitted to the Government
and allowing subcontractors that will perform 70 percent or more work
to participate in negotiations.
Response: FAR 15.404-3 already provides requirements for evaluating
subcontractor pricing and obtaining certified cost or pricing data as
required. Prime contractors are responsible for managing their
subcontractors and appropriately evaluating subcontractor cost or
pricing data in accordance with FAR subpart 15.4.
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
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 augments the
current responsibilities of contracting officers relative to the review
and justification of pass-through contracts and does not initiate or
impose any new administrative or performance requirements on
contractors. In addition, contract actions awarded pursuant to FAR
subparts 19.5, 19.8, 19.13, 19.14, or 19.15 are exempt from the
requirements of this rule.
V. Paperwork Reduction Act
The 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: April 30, 2015.
William Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide 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 continues to read as
follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
0
2. Amend section 15.404-1 by adding paragraph (h) to read as follows:
15.404-1 Proposal analysis techniques.
* * * * *
[[Page 26426]]
(h) Review and justification of pass-through contracts. (1) The
requirements of this paragraph (h) are applicable to all agencies. The
requirements apply by law to the Department of Defense, the Department
of State, and the United States Agency for International Development,
per section 802 of the National Defense Authorization Act (NDAA) for
Fiscal Year 2013. The requirements apply as a matter of policy to other
Federal agencies.
(2) Except as provided in paragraph (h)(3) of this section, when an
offeror for a contract or a task or delivery order informs the
contracting officer pursuant to 52.215-22 that it intends to award
subcontracts for more than 70 percent of the total cost of work to be
performed under the contract, task or delivery order, the contracting
officer shall--
(i) Consider the availability of alternative contract vehicles and
the feasibility of contracting directly with a subcontractor or
subcontractors that will perform the bulk of the work. If such
alternative approaches are selected, any resulting solicitations shall
be issued in accordance with the competition requirements under FAR
part 6;
(ii) Make a written determination that the contracting approach
selected is in the best interest of the Government; and
(iii) Document the basis for such determination.
(3) Contract actions awarded pursuant to subparts 19.5, 19.8,
19.13, 19.14, or 19.15 are exempt from the requirements of this
paragraph (h) (see section 1615 of the National Defense Authorization
Act for Fiscal Year 2014 (Pub. L. 113-66)).
[FR Doc. 2015-11029 Filed 5-6-15; 8:45 am]
BILLING CODE 6820-EP-P
