General Services Administration Acquisition Regulation (GSAR); Federal Supply Schedule, Order-Level Materials, 62445-62448 [2016-21610]
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Federal Register / Vol. 81, No. 175 / Friday, September 9, 2016 / Proposed Rules
552.236–77 Government’s Right to
Exercise Options.
As prescribed in 536.270–5(d), insert
the following clause:
Government’s Right to Exercise Options
(DATE)
(a) The Government may exercise any
option in writing in accordance with the
terms and conditions of the contract within
_____ [insert the period of time within which
the Contracting Officer may exercise the
option]. Unless otherwise specified, options
may be exercised within 90 calendar days of
contract award.
(b) If the Government exercises the option,
the contract shall be considered to include
this option clause.
(End of clause)
■ 33. Amend section 552.243–71 by—
■ a. Revising the date of the clause,
■ b. Removing from paragraph (a) ‘‘FAR
52.243–4’’ and adding ‘‘FAR 52.243–4,
the ‘‘Changes and Changed Conditions’’
clause prescribed by FAR 52.243–5,’’ in
its place; and
■ c. Revising paragraph (c).
The revisions read as follows:
552.243–71
Equitable Adjustments.
As prescribed in 543.205, insert the
following clause:
Equitable Adjustments (DATE)
*
*
*
*
*
(c) The proposal shall be submitted within
the time specified in the ‘‘Changes’’,
‘‘Changes and Changed Conditions’’, or
‘‘Differing Site Conditions’’ clause, as
applicable, or such other time as may
reasonably be required by the Contracting
Officer.
*
*
*
*
*
[FR Doc. 2016–21629 Filed 9–8–16; 8:45 am]
BILLING CODE 6820–61–P
GENERAL SERVICES
ADMINISTRATION
48 CFR Parts 515, 538, and 552
[GSAR Case 2016–G506; Docket No. 2016–
0016; Sequence No. 1]
RIN 3090–AJ75
General Services Administration
Acquisition Regulation (GSAR);
Federal Supply Schedule, Order-Level
Materials
Office of Acquisition Policy,
General Services Administration.
ACTION: Proposed rule.
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AGENCY:
The General Services
Administration (GSA) is proposing to
amend the General Services
Administration Acquisition Regulation
(GSAR) to clarify the authority to
acquire order-level materials when
SUMMARY:
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placing a task order or establishing a
Blanket Purchase Agreement (BPA)
against a Federal Supply Schedule (FSS)
contract. This proposed rule seeks to
provide clear and comprehensive
implementation of the ability to acquire
order-level materials through the FSS
program to create parity between FSS
contracts and commercial indefinitedelivery/indefinite-quantity (IDIQ)
contracts, reduce the need to conduct
less efficient procurement transactions,
lower barriers of entry to the federal
marketplace and make it easier to do
business the federal government.
DATES: Interested parties should submit
written comments to the Regulatory
Secretariat Division at one of the
addressees shown below on or before
November 8, 2016 to be considered in
the formation of the final rule.
ADDRESSES: Submit comments in
response to GSAR Case 2016–G506 by
any of the following methods:
• Regulations.gov: https://
www.regulations.gov. Submit comments
by searching for ‘‘GSAR Case 2016–
G506.’’ Select the link ‘‘Comment Now’’
that corresponds with GSAR Case 2016–
G506. Follow the instructions provided
on the screen. Please include your
name, company name (if any), and
‘‘GSAR Case 2016–G506’’ on your
attached document.
• Mail: General Services
Administration, Regulatory Secretariat
Division (MVCB), ATTN: Ms. Flowers,
1800 F Street NW., 2nd Floor,
Washington, DC 20405.
Instructions: Please submit comments
only and cite GSAR Case 2016–G506, in
all correspondence related to this case.
All comments received will generally be
posted without change to https://
www.regulations.gov, including any
personal and/or business confidential
information provided. To confirm
receipt of your comment(s), please
check www.regulations.gov,
approximately two to three days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms.
Leah Price, Procurement Analyst, at
703–605–2558, or Mr. Curtis Glover, Sr.,
Procurement Analyst, at 202–501–1448,
for clarification of content. For
information pertaining to status or
publication schedules, contact the
Regulatory Secretariat Division at 202–
501–4755. Please cite GSAR Case 2016–
G506.
SUPPLEMENTARY INFORMATION:
I. Background
GSA is proposing to amend the
General Services Administration
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62445
Acquisition Regulation (GSAR) to
establish special ordering procedures
(per FAR 8.403(b)). These special
ordering procedures clarify the
authority to acquire order-level
materials when placing an order or
establishing a BPA against an FSS
contract. Currently, most commercial
indefinite-delivery/indefinite-quantity
(IDIQ) contracts provide the flexibility
to easily acquire order-level materials;
however the FSS program does not. This
proposed rule aims to create parity
between the FSS program and other
commercial IDIQs while also ensuring
an appropriate set of controls or
safeguards are put in place.
Improving the acquisition of order
level materials through the FSS program
was expressly cited in the Office of
Federal Procurement Policy’s roadmap
for simplifying the federal procurement
process. (See Transforming the
Marketplace: Simplifying Federal
Procurement to Improve Performance,
Drive Innovation, and Increase Savings,
available at https://
www.whitehouse.gov/sites/default/files/
omb/procurement/memo/simplifyingfederal-procurement-to-improveperformance-drive-innovation-increasesavings.pdf.) Providing the same
flexibilities in the FSS program that are
currently authorized for commercial
IDIQ vehicles will help to reduce
contract duplication and the associated
administrative costs and inefficiencies
for agencies. Simultaneously, it will
reduce transaction costs for contractors,
including small businesses, by
eliminating the need for FSS contract
holders to compete for and enter into
additional contracts for this ancillary
work. The Government Accountability
Office (GAO) reports the costs of being
on multiple contract vehicles ranged
from $10,000 to $1,000,000 due to
increased bid and proposal, and
administrative costs.
This proposed rule would achieve
parity for the FSS program by providing
further clarification in the GSAR of
regulatory changes made by the Federal
Acquisition Regulatory Council in years
past to overcome the holdings in a Court
of Federal Claims decision, ATA
Defense Industries, Inc. v. United States,
38 Fed. Cl. 489 (1997) and a GAO
opinion, Pyxis Corporation, B–282469;
B–282469.2. These decisions were
issued at a time when there was no
guidance in the FAR about open market
items and served as impetus for opening
Federal Acquisition Regulation (FAR)
Case 1999–614, bringing the guidance
from the FSS Contractor Guide into the
FAR. The FAR Case stated:
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It had been common practice to add
‘‘incidental’’ non-FSS items to FSS orders for
administrative convenience. However, on
July 15, 1999, the General Accounting Office
(GAO) ruled in a protest that agencies ‘‘may
no longer rely on the ‘incidentals’ test to
justify the purchase of non-FSS items in
connection with an FSS buy; where an
agency buys non-FSS items, it must follow
applicable acquisition regulations’’ (Pyxis
Corporation, B–282469; B–282469.2).
Therefore, it is proposed that a paragraph (d)
be added to FAR 8.401, General, which
would permit the addition of ‘‘open market
(noncontract)’’ items to a FSS blanket
purchase agreement or task or delivery order
only if ‘‘(1) all applicable acquisition
regulations have been followed (e.g.,
publicizing ([FAR] Part 5), competition
requirements ([FAR] Part 6), acquisition of
commercial items ([FAR] Part 12), and
contracting methods ([FAR] Parts 13, 14, and
15)); (2) the ordering office contracting officer
has determined the price for the open market
items is reasonable; and (3) the items are
clearly labeled as open market (noncontract)
items on the order.’’
This FAR Case was finalized and
included in Federal Acquisition
Circular 2001–08, effective July 29,
2002. With subsequent changes, this
text moved from FAR 8.401 to its
present location in FAR 8.402.
Separately, FAR case 2003–027,
Additional Commercial Contract Types,
published in the Federal Register at 71
FR 74667 on December 12, 2006,
expressly provided the authority to
acquire order-level materials under
commercial contracts. The case
extended this authority to all
commercial IDIQ contract vehicles,
including contracts awarded pursuant to
FAR part 12 and orders awarded
pursuant to FAR subparts 16.5 and 8.4.
Alternate I of FAR clause 52.212–4
Contract Terms and Conditions—
Commercial Items was explicitly
developed for contract vehicles where
Time and Materials (T&M) or LaborHour (L–H) orders are contemplated. It
defines ‘‘materials’’ to include direct
materials, other direct costs,
subcontracts, and indirect costs, and
provides a means to acquire these
materials within the scope of the FSS
contract. It includes detailed
instructions for the handling of each,
none of which involves the competitive
procedures required by FAR 8.402(f).
Despite this clarification, FAR
8.402(f), which addresses ‘‘open market
items’’ that are not on FSS, has been
widely interpreted to mean that
ordering activity Contracting Officers
must conduct a separate open market
competition for any and all materials
not specifically awarded on the
underlying FSS contract. As a result,
FSS ordering activities have struggled
with how to properly handle orders for
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which the exact items and quantities of
materials is unknown. Years of
confusion have, in turn, led to the
creation of elaborate workarounds and
the application of inconsistent policies
and procedures.
Providing clear and comprehensive
implementation of this authority in the
GSAR will result in parity regarding the
ability to acquire order level materials
from the FSS program and other
commercial IDIQs. As a result, agencies
will be able to further utilize the FSS
program to meet their requirements
rather than conducting separate open
market procurements or further
contributing to contract duplication
through creating new commercial IDIQs
that have a similar scope to existing FSS
offerors, but that allow for order level
materials.
II. Discussion and Analysis
Amendments to GSAR parts 515, 538,
and 552 are proposed by this rule.
Specifically, GSA is proposing the
following amendments:
• Add to GSAR 515.408(c) that
‘‘offerors are not required to complete
the commercial sales practices
disclosure for order-level materials.
• Add a new GSAR subpart 538.71,
Order-Level Materials, which clarifies
the authority to acquire order-level
materials when placing a task order or
establishing a BPA against an FSS
contract. This subpart defines orderlevel materials and lists the applicable
Federal Supply Schedules that
authorized the use of order-level
materials. GSA will issue guidance to its
contracting officers outlining the
procedures for structuring these Federal
Supply Schedules and how to
administer FSS contracts where orderlevel materials are authorized.
• Add instructions in new GSAR
subpart 538.71 for GSA contracting
officers to use FAR clause 52.212–4
Alternate I in Federal Supply Schedules
authorizing the use of order-level
materials, with the following
instructions for the clause fill-ins:
Æ Insert ‘‘Each order must list
separately subcontracts for services
excluded from the FSS Schedule Hourly
Rates’’ in FAR clause 52.212–4(e)(iii)(D).
Æ Insert ‘‘Each order must list
separately elements of other direct
charge(s) for that order.’’ in FAR clause
52.212–4(i)(1)(ii)(D)(1).
Æ Insert ‘‘none’’ in FAR clause
52.212–4(i)(1)(ii)(D)(2).
Æ GSA is especially interested in
comments on the clause fill-in
instructions.
• Add a new GSAR clause 552.238–
XX, Special Ordering Procedures for the
Acquisition of Order-Level Materials,
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which clarifies the authority to acquire
order-level materials when placing a
task order or establishing a BPA against
an FSS contract. This new clause should
be read as a special ordering procedure,
as authorized in FAR 8.403(b).
Operationally, it should be understood
as an addition to the ordering
procedures outlined in FAR 8.404(h).
This new clause includes the special
ordering procedures to be used when
order-level materials are authorized
controls that GSA is establishing when
authorizing the use of ‘‘order-level
materials’’. These controls include—
• Prohibiting order-level materials
from being the primary basis of the
order;
• Limiting the total value of orderlevel materials to 33 percent of the
overall order value;
• Requiring order-level materials to
be purchased under a separate Special
Item Number (SIN) to enable GSA to
monitor the sales for order-level
materials and evaluate the appropriate
usage;
• Requiring the ordering activity to
follow FAR 8.404(h) prior to placing an
order including order-level materials;
• Requiring contractors proposing
order-level materials as part of a
solution to submit a minimum of three
quotes for each order-level material
above the micro-purchase threshold.
One of these three quotes may include
materials furnished by the contractor
under FAR 52.212–4 Alternate I
(i)(1)(ii)(A). The contractor shall submit
the information to the ordering activity
contracting officer or provide rationale
for why three quotes cannot be
obtained;
• Requiring the ordering activity
contracting officer to determine all
prices for order-level materials are fair
and reasonable prior to placing an order;
and
• Including controls to ensure any
ceiling increase has been appropriately
justified and approved in accordance
with FAR 8.405–6.
III. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to 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
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Review, dated September 30, 1993. This
proposed rule is not a major rule under
5 U.S.C. 804.
IV. Regulatory Flexibility Act
GSA does not expect this proposed
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. 601, et
seq., because the rule merely clarifies
the authority to acquire order-level
materials when placing a task order or
establishing a BPA against an FSS
contract; however, an Initial Regulatory
Flexibility Analysis (IRFA) has been
prepared consistent with 5 U.S.C. 603,
and is summarized as follows:
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This proposed rule amends the GSAR to
clarify the authority to acquire order-level
materials when placing a task order or
establishing a BPA against an FSS contract.
Currently, most commercial indefinitedelivery/indefinite-quantity (IDIQ) contracts
provide the flexibility to easily acquire orderlevel materials; however the FSS program
does not.
Currently there are 13,850 small businesses
that have GSA Schedule contracts. While the
rule is expected to have a beneficial impact
on these contractors by reducing bid and
proposal preparation costs and simplifying
the process for selling order-level materials to
FSS customers, GSA does not expect this
proposed 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
the rule merely clarifies the authority to
acquire order-level materials when placing a
task order or establishing a BPA against an
authorized FSS contract.
The proposed rule imposes no reporting,
recordkeeping, or other information
collection requirements.
The rule does not duplicate, overlap, or
conflict with any other Federal rules.
There are no known significant alternatives
to the rule. The impact of this rule on small
business is not expected to be significant.
The Regulatory Secretariat Division
will be submitting a copy of the Initial
Regulatory Flexibility Analysis (IRFA)
to the Chief Counsel for Advocacy of the
Small Business Administration. A copy
of the IRFA may be obtained from the
Regulatory Secretariat Division. GSA
invites comments from small business
concerns and other interested parties on
the expected impact of this rule on
small entities.
GSA will also consider comments
from small entities concerning the
existing regulations in subparts affected
by this rule in accordance with 5 U.S.C.
610. Interested parties must submit such
comments separately and should cite 5
U.S.C. 610 (GSAR Case 2016–G506) in
correspondence.
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V. Paperwork Reduction Act
The proposed 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 515,
538, and 552
Government procurement.
Dated: September 2, 2016.
Jeffrey A. Koses,
Senior Procurement Executive, Office of
Acquisition Policy, Office of Governmentwide Policy, General Services Administration.
Therefore, GSA proposes to amend 48
CFR parts 515, 538, and 552 as set forth
below:
■ 1. The authority citation for 48 CFR
parts 515, 538, and 552 continues to
read as follows:
Authority: 40 U.S.C. 121(c).
PART 515—CONTRACTING BY
NEGOTIATION
2. Amend section 515.408 by adding
a sentence to the end of paragraph (c)
introductory text to read as follows:
■
515.408 Solicitation provisions and
contract clauses.
*
*
*
*
*
(c) * * * Offerors are not required to
complete the commercial sales practices
disclosure for order-level materials (See
subpart 538.71).
*
*
*
*
*
PART 538—FEDERAL SUPPLY
SCHEDULE CONTRACTING
3. Add subpart 538.71 to read as
follows:
■
Subpart 538.71—Order-Level Materials
538.7100 Definitions.
538.7101 Applicability.
538.7103 Contract clauses.
Subpart 538.71—Order-Level Materials
538.7100
Definitions.
Order-level materials means supplies
and/or services acquired in direct
support of an individual task or delivery
order placed against a Federal Supply
Schedule (FSS) contract, when the
supplies and/or services are not known
at the time of Schedule contract award.
The prices of order-level materials are
not established in the FSS contract.
Order-level materials are not open
market items discussed in FAR 8.402(f).
538.7101
Applicability.
Order-level materials are authorized
under all of the following:
(a) Federal Supply Schedule 03 FAC.
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62447
(b) Federal Supply Schedule 56.
(c) Federal Supply Schedule 70.
(d) Federal Supply Schedule 71.
(e) Federal Supply Schedule 84.
(f) Professional Services Schedule 99.
(g) Federal Supply Schedule 738X.
538.7103
Contract clauses.
(a) Use FAR clause 52.212–4 Alternate
I in all Federal Supply Schedules
authorized for the acquisition of orderlevel materials (see 538.7101). Use the
following language for the clause fill-in:
(1) Insert ‘‘Each order must list
separately subcontracts for services
excluded from the FSS Hourly.
(2) Insert ‘‘Each order must list
separately the elements of other direct
charge(s) for that order’’ in
(i)(1)(ii)(D)(1).
(3) Insert ‘‘none’’ in (i)(1)(ii)(D)(2).
(b) Use 552.238–XX, Special Ordering
Procedures for the Acquisition of OrderLevel Materials in all Federal Supply
Schedules authorized for the acquisition
of order-level materials (see 538.7101).
PART 552—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
4. Add section 552.238–XX to read as
follows:
■
552.238–XX Special Ordering Procedures
for the Acquisition of Order-Level Materials.
As prescribed in 538.7103(b), insert
the following clause:
Special Ordering Procedures for the
Acquisition of Order-Level Materials
(DATE)
(a) Order-level materials means supplies
and/or services acquired in direct support of
an individual task or delivery order placed
against a Federal Supply Schedule (FSS)
contract or FSS BPA, when the supplies and/
or services are not known at the time of
Schedule contract award. The prices of orderlevel materials are not established in the FSS
contract. Order-level materials that are
acquired following the procedures in
paragraph (d) of this clause are not open
market items discussed in FAR 8.402(f).
(b) FAR 8.403(b) provides that GSA may
establish special ordering procedures for a
particular FSS or for some Special Item
Numbers (SINs) within a Schedule.
(c) The procedures in FAR Subpart 8.4
apply to this contract, with the exceptions
listed in this clause. If a requirement in this
clause is inconsistent with FAR Subpart 8.4,
this clause takes precedence.
(d) Procedures for including order-level
materials when placing an individual task or
delivery order against an FSS contract or FSS
Blanket Purchase Agreement (BPA).
(1) The procedures discussed in FAR
8.402(f) do not apply when placing task and
delivery orders for order-level materials.
(2) Order-level materials are included in
the definition of the term ‘‘materials’’ in
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GSAR clause 552.212–4 Alternate I, and
therefore all provisions of clause 552.212–4
Alternate I that apply to ‘‘materials’’ also
apply to order-level materials. The ordering
activity shall follow procedures under the
Federal Travel Regulation and FAR Part 31
when order-level materials include travel.
(3) Order-level materials shall only be
acquired in direct support of an order and
not as the primary basis.
(4) The cumulative value of order-level
materials awarded under an FSS order shall
not exceed 33 percent of the total value of the
order.
(5) All order-level materials shall be placed
under the Order-Level Materials SIN.
(6) Prior to the placement of an order that
includes order-level materials, the ordering
activity shall follow procedures in FAR
8.404(h).
(7) To support the price reasonableness of
order-level materials, the contractor
proposing order-level materials as part of a
solution shall submit a minimum of three
quotes obtained by the contractor for each
order-level material above the micropurchase threshold. One of these three quotes
may include materials furnished by the
contractor under FAR 52.212–4 Alternate I
(i)(1)(ii)(A) If the contractor cannot obtain
three quotes, the contractor shall provide the
rationale for why they cannot obtain three
quotes to support the contracting officer’s
determination in (d)(7) of this section.
(8) The ordering activity contracting officer
must make a determination that prices for all
order-level materials are determined fair and
reasonable. The ordering activity contracting
officer may base their determination on a
comparison of the quotes received in
response to the task or delivery order
solicitation or other relevant pricing
information available.
(9) Prior to an increase in the ceiling price
of order-level materials above the micropurchase threshold, the ordering activity
contracting officer shall—
(i) Conduct an analysis of pricing and other
relevant factors to determine if the action is
in the best interest of the Government and
obtain the approval at the levels described in
FAR 8.405–6(d); or
(ii) Follow the procedures at FAR 8.405–
6 for a change that modifies the general scope
of the order.
(10) In accordance with GSAR clause
552.215–71 Examination of Records by GSA,
GSA has the authority to examine the
contractor’s records for compliance with the
pricing provisions in FAR clause 52.212–4
Alternate I, to include examination of any
books, documents, papers, and records
involving transactions related to the contract
for overbillings, billing errors, and
compliance with the IFF and the Sales
Reporting clauses of the contract.
(11) Order-level materials are exempt from
the following clauses:
(i) 552.216–70 Economic Price
Adjustment—FSS Multiple Award Schedule
Contracts.
(ii) 552.238–71 Submission and
Distribution of Authorized FSS Schedule
Pricelists.
(iii) 552.238–75 Price Reductions.
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(End of Clause)
[FR Doc. 2016–21610 Filed 9–8–16; 8:45 am]
BILLING CODE 6820–61–P
DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety
Administration
49 CFR Part 391
[Docket No. FMCSA–2005–23151]
RIN 2126–AA95
Medical Review Board Task Report on
Insulin Treated Diabetes Mellitus and
Commercial Motor Vehicle Drivers
Federal Motor Carrier Safety
Administration (FMCSA), DOT.
ACTION: Notice of availability; request
for comments.
AGENCY:
In May 2015, FMCSA
published a notice of proposed
rulemaking (NPRM) in the Federal
Register to allow drivers with stable,
well-controlled insulin-treated diabetes
mellitus (ITDM) to be qualified to
operate commercial motor vehicles
(CMVs) in interstate commerce. The
comment period closed on July 6, 2015
and the Agency received over 1,250
comments. In that same month, FMCSA
requested the Medical Review Board
(MRB) to provide the Agency with
advice by reviewing and analyzing the
comments and providing
recommendations to FMCSA for its
consideration. The Agency announces
the availability of the MRB’s report and
requests comments on the MRB
recommendations. The Final MRB Task
15–01 Report is posted in the docket at
FMCSA–2005–23151.
DATES: Comments must be received on
or before November 8, 2016.
ADDRESSES: You may submit comments
bearing the Federal Docket Management
System (FDMS) Docket No. FMCSA–
2005–23151 using any of the following
methods:
• Federal eRulemaking Portal: Go to
www.regulations.gov. Follow the on-line
instructions for submitting comments.
• Mail: Docket Management Facility;
U.S. Department of Transportation,
Room W12–140, 1200 New Jersey
Avenue SE., Washington, DC 20590–
0001.
• Hand Delivery or Courier: West
Building Ground Floor, Room W12–140,
1200 New Jersey Avenue SE.,
Washington, DC, between 9 a.m. and 5
p.m., ET, Monday through Friday,
except Federal Holidays.
• Fax: 1–202–493–2251.
SUMMARY:
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Each submission must include
FMCSA and docket number FMCSA–
2005–23151. Note that DOT posts all
comments received without change to
www.regulations.gov, including any
personal information included in a
comment. Please see the Privacy Act
heading below.
Docket: For access to the docket to
read background documents or
comments, go to www.regulations.gov at
any time or visit Room W12–140 on the
ground level of the West Building, 1200
New Jersey Avenue SE., Washington,
DC, between 9 a.m. and 5 p.m., ET,
Monday through Friday, except Federal
holidays. The on-line FDMS is available
24 hours each day, 365 days each year.
If you want acknowledgment that we
received your comments, please include
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postcard or print the acknowledgement
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comments on-line.
Privacy Act: In accordance with 5
U.S.C. 553(c), DOT solicits comments
from the public to better inform its
rulemaking process. DOT posts these
comments, without edit, including any
personal information the commenter
provides, to www.regulations.gov, as
described in the system of records
notice (DOT/ALL–14 FDMS), which can
be reviewed at www.dot.gov/privacy.
FOR FURTHER INFORMATION CONTACT: Ms.
Christine A. Hydock, 1200 New Jersey
Ave. SE., Washington, DC 20590, or by
phone at (202) 366–4001 or by email at
FMCSAMedical@dot.gov. If you have
questions on viewing or submitting
material to the docket, contact Docket
Services, telephone (202) 366–9826.
SUPPLEMENTARY INFORMATION:
I. Public Participation and Request for
Comments
FMCSA encourages you to participate
by submitting comments and related
materials.
Submitting Comments
If you submit a comment, please
include the docket number for this
notice (FMCSA–2005–23151), indicate
the specific section of this document to
which each comment applies, and
provide a reason for each suggestion or
recommendation. You may submit your
comments and material online or by fax,
mail, or hand delivery, but please use
only one of these means. FMCSA
recommends that you include your
name and a mailing address, an email
address, or a phone number in the body
of your document so that FMCSA can
contact you if there are questions
regarding your submission.
To submit your comment online, go to
https://www.regulations.gov, put the
E:\FR\FM\09SEP1.SGM
09SEP1
Agencies
[Federal Register Volume 81, Number 175 (Friday, September 9, 2016)]
[Proposed Rules]
[Pages 62445-62448]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21610]
-----------------------------------------------------------------------
GENERAL SERVICES ADMINISTRATION
48 CFR Parts 515, 538, and 552
[GSAR Case 2016-G506; Docket No. 2016-0016; Sequence No. 1]
RIN 3090-AJ75
General Services Administration Acquisition Regulation (GSAR);
Federal Supply Schedule, Order-Level Materials
AGENCY: Office of Acquisition Policy, General Services Administration.
ACTION: Proposed rule.
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SUMMARY: The General Services Administration (GSA) is proposing to
amend the General Services Administration Acquisition Regulation (GSAR)
to clarify the authority to acquire order-level materials when placing
a task order or establishing a Blanket Purchase Agreement (BPA) against
a Federal Supply Schedule (FSS) contract. This proposed rule seeks to
provide clear and comprehensive implementation of the ability to
acquire order-level materials through the FSS program to create parity
between FSS contracts and commercial indefinite-delivery/indefinite-
quantity (IDIQ) contracts, reduce the need to conduct less efficient
procurement transactions, lower barriers of entry to the federal
marketplace and make it easier to do business the federal government.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat Division at one of the addressees shown below on
or before November 8, 2016 to be considered in the formation of the
final rule.
ADDRESSES: Submit comments in response to GSAR Case 2016-G506 by any of
the following methods:
Regulations.gov: https://www.regulations.gov. Submit
comments by searching for ``GSAR Case 2016-G506.'' Select the link
``Comment Now'' that corresponds with GSAR Case 2016-G506. Follow the
instructions provided on the screen. Please include your name, company
name (if any), and ``GSAR Case 2016-G506'' on your attached document.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd
Floor, Washington, DC 20405.
Instructions: Please submit comments only and cite GSAR Case 2016-
G506, in all correspondence related to this case. All comments received
will generally be posted without change to https://www.regulations.gov,
including any personal and/or business confidential information
provided. To confirm receipt of your comment(s), please check
www.regulations.gov, approximately two to three days after submission
to verify posting (except allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms. Leah Price, Procurement Analyst,
at 703-605-2558, or Mr. Curtis Glover, Sr., Procurement Analyst, at
202-501-1448, for clarification of content. For information pertaining
to status or publication schedules, contact the Regulatory Secretariat
Division at 202-501-4755. Please cite GSAR Case 2016-G506.
SUPPLEMENTARY INFORMATION:
I. Background
GSA is proposing to amend the General Services Administration
Acquisition Regulation (GSAR) to establish special ordering procedures
(per FAR 8.403(b)). These special ordering procedures clarify the
authority to acquire order-level materials when placing an order or
establishing a BPA against an FSS contract. Currently, most commercial
indefinite-delivery/indefinite-quantity (IDIQ) contracts provide the
flexibility to easily acquire order-level materials; however the FSS
program does not. This proposed rule aims to create parity between the
FSS program and other commercial IDIQs while also ensuring an
appropriate set of controls or safeguards are put in place.
Improving the acquisition of order level materials through the FSS
program was expressly cited in the Office of Federal Procurement
Policy's roadmap for simplifying the federal procurement process. (See
Transforming the Marketplace: Simplifying Federal Procurement to
Improve Performance, Drive Innovation, and Increase Savings, available
at https://www.whitehouse.gov/sites/default/files/omb/procurement/memo/simplifying-federal-procurement-to-improve-performance-drive-innovation-increase-savings.pdf.) Providing the same flexibilities in
the FSS program that are currently authorized for commercial IDIQ
vehicles will help to reduce contract duplication and the associated
administrative costs and inefficiencies for agencies. Simultaneously,
it will reduce transaction costs for contractors, including small
businesses, by eliminating the need for FSS contract holders to compete
for and enter into additional contracts for this ancillary work. The
Government Accountability Office (GAO) reports the costs of being on
multiple contract vehicles ranged from $10,000 to $1,000,000 due to
increased bid and proposal, and administrative costs.
This proposed rule would achieve parity for the FSS program by
providing further clarification in the GSAR of regulatory changes made
by the Federal Acquisition Regulatory Council in years past to overcome
the holdings in a Court of Federal Claims decision, ATA Defense
Industries, Inc. v. United States, 38 Fed. Cl. 489 (1997) and a GAO
opinion, Pyxis Corporation, B-282469; B-282469.2. These decisions were
issued at a time when there was no guidance in the FAR about open
market items and served as impetus for opening Federal Acquisition
Regulation (FAR) Case 1999-614, bringing the guidance from the FSS
Contractor Guide into the FAR. The FAR Case stated:
[[Page 62446]]
It had been common practice to add ``incidental'' non-FSS items
to FSS orders for administrative convenience. However, on July 15,
1999, the General Accounting Office (GAO) ruled in a protest that
agencies ``may no longer rely on the `incidentals' test to justify
the purchase of non-FSS items in connection with an FSS buy; where
an agency buys non-FSS items, it must follow applicable acquisition
regulations'' (Pyxis Corporation, B-282469; B-282469.2). Therefore,
it is proposed that a paragraph (d) be added to FAR 8.401, General,
which would permit the addition of ``open market (noncontract)''
items to a FSS blanket purchase agreement or task or delivery order
only if ``(1) all applicable acquisition regulations have been
followed (e.g., publicizing ([FAR] Part 5), competition requirements
([FAR] Part 6), acquisition of commercial items ([FAR] Part 12), and
contracting methods ([FAR] Parts 13, 14, and 15)); (2) the ordering
office contracting officer has determined the price for the open
market items is reasonable; and (3) the items are clearly labeled as
open market (noncontract) items on the order.''
This FAR Case was finalized and included in Federal Acquisition
Circular 2001-08, effective July 29, 2002. With subsequent changes,
this text moved from FAR 8.401 to its present location in FAR 8.402.
Separately, FAR case 2003-027, Additional Commercial Contract
Types, published in the Federal Register at 71 FR 74667 on December 12,
2006, expressly provided the authority to acquire order-level materials
under commercial contracts. The case extended this authority to all
commercial IDIQ contract vehicles, including contracts awarded pursuant
to FAR part 12 and orders awarded pursuant to FAR subparts 16.5 and
8.4.
Alternate I of FAR clause 52.212-4 Contract Terms and Conditions--
Commercial Items was explicitly developed for contract vehicles where
Time and Materials (T&M) or Labor-Hour (L-H) orders are contemplated.
It defines ``materials'' to include direct materials, other direct
costs, subcontracts, and indirect costs, and provides a means to
acquire these materials within the scope of the FSS contract. It
includes detailed instructions for the handling of each, none of which
involves the competitive procedures required by FAR 8.402(f).
Despite this clarification, FAR 8.402(f), which addresses ``open
market items'' that are not on FSS, has been widely interpreted to mean
that ordering activity Contracting Officers must conduct a separate
open market competition for any and all materials not specifically
awarded on the underlying FSS contract. As a result, FSS ordering
activities have struggled with how to properly handle orders for which
the exact items and quantities of materials is unknown. Years of
confusion have, in turn, led to the creation of elaborate workarounds
and the application of inconsistent policies and procedures.
Providing clear and comprehensive implementation of this authority
in the GSAR will result in parity regarding the ability to acquire
order level materials from the FSS program and other commercial IDIQs.
As a result, agencies will be able to further utilize the FSS program
to meet their requirements rather than conducting separate open market
procurements or further contributing to contract duplication through
creating new commercial IDIQs that have a similar scope to existing FSS
offerors, but that allow for order level materials.
II. Discussion and Analysis
Amendments to GSAR parts 515, 538, and 552 are proposed by this
rule. Specifically, GSA is proposing the following amendments:
Add to GSAR 515.408(c) that ``offerors are not required to
complete the commercial sales practices disclosure for order-level
materials.
Add a new GSAR subpart 538.71, Order-Level Materials,
which clarifies the authority to acquire order-level materials when
placing a task order or establishing a BPA against an FSS contract.
This subpart defines order-level materials and lists the applicable
Federal Supply Schedules that authorized the use of order-level
materials. GSA will issue guidance to its contracting officers
outlining the procedures for structuring these Federal Supply Schedules
and how to administer FSS contracts where order-level materials are
authorized.
Add instructions in new GSAR subpart 538.71 for GSA
contracting officers to use FAR clause 52.212-4 Alternate I in Federal
Supply Schedules authorizing the use of order-level materials, with the
following instructions for the clause fill-ins:
[cir] Insert ``Each order must list separately subcontracts for
services excluded from the FSS Schedule Hourly Rates'' in FAR clause
52.212-4(e)(iii)(D).
[cir] Insert ``Each order must list separately elements of other
direct charge(s) for that order.'' in FAR clause 52.212-
4(i)(1)(ii)(D)(1).
[cir] Insert ``none'' in FAR clause 52.212-4(i)(1)(ii)(D)(2).
[cir] GSA is especially interested in comments on the clause fill-
in instructions.
Add a new GSAR clause 552.238-XX, Special Ordering
Procedures for the Acquisition of Order-Level Materials, which
clarifies the authority to acquire order-level materials when placing a
task order or establishing a BPA against an FSS contract. This new
clause should be read as a special ordering procedure, as authorized in
FAR 8.403(b). Operationally, it should be understood as an addition to
the ordering procedures outlined in FAR 8.404(h). This new clause
includes the special ordering procedures to be used when order-level
materials are authorized controls that GSA is establishing when
authorizing the use of ``order-level materials''. These controls
include--
Prohibiting order-level materials from being the primary
basis of the order;
Limiting the total value of order-level materials to 33
percent of the overall order value;
Requiring order-level materials to be purchased under a
separate Special Item Number (SIN) to enable GSA to monitor the sales
for order-level materials and evaluate the appropriate usage;
Requiring the ordering activity to follow FAR 8.404(h)
prior to placing an order including order-level materials;
Requiring contractors proposing order-level materials as
part of a solution to submit a minimum of three quotes for each order-
level material above the micro-purchase threshold. One of these three
quotes may include materials furnished by the contractor under FAR
52.212-4 Alternate I (i)(1)(ii)(A). The contractor shall submit the
information to the ordering activity contracting officer or provide
rationale for why three quotes cannot be obtained;
Requiring the ordering activity contracting officer to
determine all prices for order-level materials are fair and reasonable
prior to placing an order; and
Including controls to ensure any ceiling increase has been
appropriately justified and approved in accordance with FAR 8.405-6.
III. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to 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
[[Page 62447]]
Review, dated September 30, 1993. This proposed rule is not a major
rule under 5 U.S.C. 804.
IV. Regulatory Flexibility Act
GSA does not expect this proposed 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. 601, et seq., because
the rule merely clarifies the authority to acquire order-level
materials when placing a task order or establishing a BPA against an
FSS contract; however, an Initial Regulatory Flexibility Analysis
(IRFA) has been prepared consistent with 5 U.S.C. 603, and is
summarized as follows:
This proposed rule amends the GSAR to clarify the authority to
acquire order-level materials when placing a task order or
establishing a BPA against an FSS contract. Currently, most
commercial indefinite-delivery/indefinite-quantity (IDIQ) contracts
provide the flexibility to easily acquire order-level materials;
however the FSS program does not.
Currently there are 13,850 small businesses that have GSA
Schedule contracts. While the rule is expected to have a beneficial
impact on these contractors by reducing bid and proposal preparation
costs and simplifying the process for selling order-level materials
to FSS customers, GSA does not expect this proposed 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 the rule merely clarifies the authority
to acquire order-level materials when placing a task order or
establishing a BPA against an authorized FSS contract.
The proposed rule imposes no reporting, recordkeeping, or other
information collection requirements.
The rule does not duplicate, overlap, or conflict with any other
Federal rules.
There are no known significant alternatives to the rule. The
impact of this rule on small business is not expected to be
significant.
The Regulatory Secretariat Division will be submitting a copy of
the Initial Regulatory Flexibility Analysis (IRFA) to the Chief Counsel
for Advocacy of the Small Business Administration. A copy of the IRFA
may be obtained from the Regulatory Secretariat Division. GSA invites
comments from small business concerns and other interested parties on
the expected impact of this rule on small entities.
GSA will also consider comments from small entities concerning the
existing regulations in subparts affected by this rule in accordance
with 5 U.S.C. 610. Interested parties must submit such comments
separately and should cite 5 U.S.C. 610 (GSAR Case 2016-G506) in
correspondence.
V. Paperwork Reduction Act
The proposed 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 515, 538, and 552
Government procurement.
Dated: September 2, 2016.
Jeffrey A. Koses,
Senior Procurement Executive, Office of Acquisition Policy, Office of
Government-wide Policy, General Services Administration.
Therefore, GSA proposes to amend 48 CFR parts 515, 538, and 552 as
set forth below:
0
1. The authority citation for 48 CFR parts 515, 538, and 552 continues
to read as follows:
Authority: 40 U.S.C. 121(c).
PART 515--CONTRACTING BY NEGOTIATION
0
2. Amend section 515.408 by adding a sentence to the end of paragraph
(c) introductory text to read as follows:
515.408 Solicitation provisions and contract clauses.
* * * * *
(c) * * * Offerors are not required to complete the commercial
sales practices disclosure for order-level materials (See subpart
538.71).
* * * * *
PART 538--FEDERAL SUPPLY SCHEDULE CONTRACTING
0
3. Add subpart 538.71 to read as follows:
Subpart 538.71--Order-Level Materials
538.7100 Definitions.
538.7101 Applicability.
538.7103 Contract clauses.
Subpart 538.71--Order-Level Materials
538.7100 Definitions.
Order-level materials means supplies and/or services acquired in
direct support of an individual task or delivery order placed against a
Federal Supply Schedule (FSS) contract, when the supplies and/or
services are not known at the time of Schedule contract award. The
prices of order-level materials are not established in the FSS
contract. Order-level materials are not open market items discussed in
FAR 8.402(f).
538.7101 Applicability.
Order-level materials are authorized under all of the following:
(a) Federal Supply Schedule 03 FAC.
(b) Federal Supply Schedule 56.
(c) Federal Supply Schedule 70.
(d) Federal Supply Schedule 71.
(e) Federal Supply Schedule 84.
(f) Professional Services Schedule 99.
(g) Federal Supply Schedule 738X.
538.7103 Contract clauses.
(a) Use FAR clause 52.212-4 Alternate I in all Federal Supply
Schedules authorized for the acquisition of order-level materials (see
538.7101). Use the following language for the clause fill-in:
(1) Insert ``Each order must list separately subcontracts for
services excluded from the FSS Hourly.
(2) Insert ``Each order must list separately the elements of other
direct charge(s) for that order'' in (i)(1)(ii)(D)(1).
(3) Insert ``none'' in (i)(1)(ii)(D)(2).
(b) Use 552.238-XX, Special Ordering Procedures for the Acquisition
of Order-Level Materials in all Federal Supply Schedules authorized for
the acquisition of order-level materials (see 538.7101).
PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
4. Add section 552.238-XX to read as follows:
552.238-XX Special Ordering Procedures for the Acquisition of Order-
Level Materials.
As prescribed in 538.7103(b), insert the following clause:
Special Ordering Procedures for the Acquisition of Order-Level
Materials (DATE)
(a) Order-level materials means supplies and/or services
acquired in direct support of an individual task or delivery order
placed against a Federal Supply Schedule (FSS) contract or FSS BPA,
when the supplies and/or services are not known at the time of
Schedule contract award. The prices of order-level materials are not
established in the FSS contract. Order-level materials that are
acquired following the procedures in paragraph (d) of this clause
are not open market items discussed in FAR 8.402(f).
(b) FAR 8.403(b) provides that GSA may establish special
ordering procedures for a particular FSS or for some Special Item
Numbers (SINs) within a Schedule.
(c) The procedures in FAR Subpart 8.4 apply to this contract,
with the exceptions listed in this clause. If a requirement in this
clause is inconsistent with FAR Subpart 8.4, this clause takes
precedence.
(d) Procedures for including order-level materials when placing
an individual task or delivery order against an FSS contract or FSS
Blanket Purchase Agreement (BPA).
(1) The procedures discussed in FAR 8.402(f) do not apply when
placing task and delivery orders for order-level materials.
(2) Order-level materials are included in the definition of the
term ``materials'' in
[[Page 62448]]
GSAR clause 552.212-4 Alternate I, and therefore all provisions of
clause 552.212-4 Alternate I that apply to ``materials'' also apply
to order-level materials. The ordering activity shall follow
procedures under the Federal Travel Regulation and FAR Part 31 when
order-level materials include travel.
(3) Order-level materials shall only be acquired in direct
support of an order and not as the primary basis.
(4) The cumulative value of order-level materials awarded under
an FSS order shall not exceed 33 percent of the total value of the
order.
(5) All order-level materials shall be placed under the Order-
Level Materials SIN.
(6) Prior to the placement of an order that includes order-level
materials, the ordering activity shall follow procedures in FAR
8.404(h).
(7) To support the price reasonableness of order-level
materials, the contractor proposing order-level materials as part of
a solution shall submit a minimum of three quotes obtained by the
contractor for each order-level material above the micro-purchase
threshold. One of these three quotes may include materials furnished
by the contractor under FAR 52.212-4 Alternate I (i)(1)(ii)(A) If
the contractor cannot obtain three quotes, the contractor shall
provide the rationale for why they cannot obtain three quotes to
support the contracting officer's determination in (d)(7) of this
section.
(8) The ordering activity contracting officer must make a
determination that prices for all order-level materials are
determined fair and reasonable. The ordering activity contracting
officer may base their determination on a comparison of the quotes
received in response to the task or delivery order solicitation or
other relevant pricing information available.
(9) Prior to an increase in the ceiling price of order-level
materials above the micro-purchase threshold, the ordering activity
contracting officer shall--
(i) Conduct an analysis of pricing and other relevant factors to
determine if the action is in the best interest of the Government
and obtain the approval at the levels described in FAR 8.405-6(d);
or
(ii) Follow the procedures at FAR 8.405-6 for a change that
modifies the general scope of the order.
(10) In accordance with GSAR clause 552.215-71 Examination of
Records by GSA, GSA has the authority to examine the contractor's
records for compliance with the pricing provisions in FAR clause
52.212-4 Alternate I, to include examination of any books,
documents, papers, and records involving transactions related to the
contract for overbillings, billing errors, and compliance with the
IFF and the Sales Reporting clauses of the contract.
(11) Order-level materials are exempt from the following
clauses:
(i) 552.216-70 Economic Price Adjustment--FSS Multiple Award
Schedule Contracts.
(ii) 552.238-71 Submission and Distribution of Authorized FSS
Schedule Pricelists.
(iii) 552.238-75 Price Reductions.
(End of Clause)
[FR Doc. 2016-21610 Filed 9-8-16; 8:45 am]
BILLING CODE 6820-61-P