NASA Federal Acquisition Regulation Supplement: Award Term (NFS Case 2016-N027), 34416-34419 [2017-15520]
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Federal Register / Vol. 82, No. 141 / Tuesday, July 25, 2017 / Rules and Regulations
(ii) An individual assessment must be
performed to determine suitability for
employment for any conviction defined
in paragraph (j)(8)(iv), regardless of the
age of the conviction.
(6)(i) The community residential care
provider must ensure that all alleged
violations involving mistreatment,
neglect, or abuse, including injuries of
unknown source, and misappropriation
of resident property are reported to the
approving official immediately, which
means no more than 24 hours after the
provider becomes aware of the alleged
violation; and to other officials in
accordance with State law. The report,
at a minimum, must include—
(A) The facility name, address,
telephone number, and owner;
(B) The date and time of the alleged
violation;
(C) A summary of the alleged
violation;
(D) The name of any public or private
officials or VHA program offices that
have been notified of the alleged
violations, if any;
(E) Whether additional investigation
is necessary to provide VHA with more
information about the alleged violation;
(F) The name of the alleged victim;
(G) Contact information for the
resident’s next of kin or other
designated family member, agent,
personal representative, or fiduciary;
and
(H) Contact information for a person
who can provide additional details at
the community residential care
provider, including a name, position,
location, and phone number.
(ii) The community residential care
provider must notify the resident’s next
of kin, caregiver, other designated
family member, agent, personal
representative, or fiduciary of the
alleged incident concurrently with
submission of the incident report to the
approving official.
(iii) The community residential care
provider must have evidence that all
alleged violations involving
mistreatment, neglect, or abuse,
including injuries of unknown source,
and misappropriation of resident
property are documented and
thoroughly investigated, and must
prevent further abuse while the
investigation is in progress. The results
of all investigations must be reported to
the approving official within 5 working
days of the incident and to other
officials in accordance with all other
applicable law, and appropriate
corrective action must be taken if the
alleged violation is verified. Any
corrective action taken by the
community residential care provider as
a result of such investigation must be
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reported to the approving official, and to
other officials as required under all
other applicable law.
(iv) The community residential care
provider must remove all duties
requiring direct resident contact with
veteran residents from any employee
alleged to have violated this paragraph
(j) during the investigation of such
employee.
(7) For purposes of this paragraph (j),
the term ‘‘employee’’ includes a:
(i) Non-VA health care provider at the
community residential care facility;
(ii) Staff member of the community
residential care facility who is not a
health care provider, including a
contractor; and
(iii) Person with direct resident
access. The term ‘‘person with direct
resident access’’ means an individual
living in the facility who is not
receiving services from the facility, who
may have access to a resident or a
resident’s property, or may have one-onone contact with a resident.
(8) For purposes of this paragraph (j),
an employee is considered ‘‘convicted’’
of a criminal offense—
(i) When a judgment of conviction has
been entered against the individual by
a Federal, State, or local court,
regardless of whether there is an appeal
pending;
(ii) When there has been a finding of
guilt against the individual by a Federal,
State, or local court;
(iii) When a plea of guilty or nolo
contendere by the individual has been
accepted by a Federal, State, or local
court; or
(iv) When the individual has entered
into participation in a first offender,
deferred adjudication, or other
arrangement or program where
judgment of conviction has been
withheld.
(9) For purposes of this paragraph (j),
the terms ‘‘abuse’’ and ‘‘neglect’’ have
the same meaning set forth in 38 CFR
51.90(b).
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(The information collection requirements in
this section have been approved by the Office
of Management and Budget under control
number 2900–0844.)
[FR Doc. 2017–15519 Filed 7–24–17; 8:45 am]
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NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 1816 and 1852
RIN 2700–AE32
NASA Federal Acquisition Regulation
Supplement: Award Term (NFS Case
2016–N027)
National Aeronautics and
Space Administration.
ACTION: Final rule.
AGENCY:
NASA is issuing a final rule
amending the NASA Federal
Acquisition Regulation (FAR)
Supplement (NFS) to add policy on the
use of additional contract periods of
performance or ‘‘award terms’’ as a
contract incentive.
DATES: Effective: August 24, 2017.
FOR FURTHER INFORMATION CONTACT:
Marilyn E. Chambers, telephone 202–
358–5154.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
NASA published a proposed rule in
the Federal Register at 81 FR 89038 on
December 9, 2016, to implement policy
addressing the use of ‘‘award terms’’ or
additional contract periods of
performance for which a contractor may
earn if the contractor’s performance is
superior, the Government has an ongoing need for the requirement, and
funds are available for the additional
period of performance. The policy
provides a non-monetary incentive for
contractors whose performance is
excellent. An award term incentive
would be used where a longer term
relationship (generally more than five
years) between the Government and a
contractor would provide benefits to
both parties. Benefits of award term
incentives include a more stable
business relationship both for the
contractor and its employees (thus
retaining a skilled, experienced
workforce), motivating excellent
performance (including cost savings),
fostering contractor capital investment,
increasing the desirability of the award
(potentially increasing competition),
and reduced administrative costs and
disruptions in preparing for and
negotiating replacement contracts.
Award terms are an incentive and not
the same as exercising an option as set
forth in FAR 17.207. While there are
similarities between an award term and
an option, such as funds must be
available and the requirement must
fulfill an existing Government need, the
key difference is that an option may be
exercised when the contractor’s
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performance is acceptable, while
earning an award term requires
sustained excellent performance. Two
respondents submitted comments on the
proposed rule.
II. Discussion and Analysis
NASA reviewed the public comments
in the development of the final rule. An
editorial change was made to the rule
for clarification. No other changes to the
proposed rule were made. A discussion
of the comments and the change made
to the rule as a result of those comments
are provided as follows:
A. Changes. No changes are being
made to the final rule as a result of the
public comments received with the
exception of a minor editorial change.
B. Analysis of Public Comments.
Comment: One respondent stated
exceeding the five-year limit on
contracts using award terms, could limit
competition, limit the range of solutions
available to NASA, and raise prices for
the government and would lead to sole
source contracting, reduced
competition, and higher costs to the
government.
Response: FAR 17.204(e) states,
unless otherwise approved in
accordance with agency procedures, the
total of the basic and option periods
shall not exceed 5 years in the case of
services. NFS 1817.204(e) provides for
exceptions to the 5-year period of
performance limitation under Agency
contracts. Concerning the impact of the
use of award terms on competition,
range of solutions available to NASA,
and prices, the rule at 1816.405–
277(c)states the factors to consider when
determining whether to use award terms
include, market stability, the potential
changes and advancements in
technology, and flexibility to change
direction with mission changes.
Comment: One respondent stated that
contractors would be more interested in
proposing on a contract if the contract
has the potential for additional years of
business. The respondent opined a
better course of action is for NASA to
issue a request for proposals allowing
for the incumbent contractor on an
award term contract to compete for a
follow-on contract alongside any other
interested parties and that this
competition would provide NASA with
a range of potential solutions and lower
costs.
Response: As stated in the policy, the
benefits of a longer-term relationship
versus more frequent competitions must
be considered when determining if an
award term incentive is appropriate.
The factors considered in this decision
would be documented in the
Determination and Findings, required in
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under current NFS policy for incentive
contracts, and provided to the Associate
Administrator for Procurement for
review and approval.
Comment: One respondent inquired
about NASA’s current award term
policy, Procurement Information
Circular (PIC) 06–02, Use of Award
Term Incentive, dated January 25, 2006,
and NASA’s current use of award term
incentives. Additionally, the respondent
referenced an award term contracting
pilot program in the late 1990’s with the
intent of assessing the use of award term
contracts at NASA. The respondent
questioned how the pilot and (PIC)
informed this rule.
Response: The PIC and pilot program
the respondent references are more than
a decade old. The pilot was conducted
to provide information from the NASA
procurement organizations on their use
of award term incentives. At the time of
that pilot, NASA had 12 award term
contracts. As discussed in the Initial
Regulatory Flexibility Analysis
contained in the proposed rule, NASA
has ten award term contracts. The PIC
was used as a starting point for drafting
this rule. Additional research on the use
of award term contracts and comments
from the NASA procurement
organizations also contributed to the
formulation of this rule.
Comment: Another respondent stated
the proposed clause is ambiguous,
specifically, paragraph (a) states that the
CO ‘‘may’’ award a term, but paragraph
(f) gives reasons for not awarding a term.
The respondent questioned, if none of
those reasons apply, must the CO award
a term and, if so what does the ‘‘may’’
mean and, if not, why have paragraph
(f).
Response: Paragraph (a) of the clause
is a general statement that the
contracting officer will rely on the
Award Term Plan to determine if the
contractor is eligible for an award term.
‘‘May’’ is used in paragraph (a) because
the decision to extend the contract for
the number and duration of award terms
is discretionary, i.e., a contractor may
earn an award term based on meeting
the requirements of the Award Term
Plan, but the contracting officer, for a
variety of reasons, may decide not to
grant the award term. NASA agrees
there is some overlap of paragraphs (a)
and (f). To remove this overlap,
paragraph (a) is revised to remove the
phrase ‘‘subject to the Government’s
continuing need for the contract and the
availability of funds.’’ Paragraph (f) of
the clause, which addresses the
Government’s right not to grant or
cancel the award term, states the award
term may not be granted if the there is
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no continuing need or if funds are not
available.
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
NASA 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:
The objective of this rule is to
implement policy in the NASA Federal
Acquisition Regulation Supplement
(NFS) to address the use of ‘‘award
terms’’ or additional contract periods of
performance for which a contractor may
earn if the contractor’s performance is
superior, the Government has an ongoing need for the requirement, and
funds are available for the additional
period of performance. This policy
provides a non-monetary incentive for
contractors whose performance is
sustained at an excellent level.
No comments were received in
response to the initial regulatory
flexibility analysis.
The Federal Procurement Data System
(FPDS) does not track award fee
contracts, but a survey of NASA’s
procurement organizations shows there
are currently 10 active award term
contracts. Of these, six are with small
businesses. A range of services are
covered, such as logistics, facilities or
technical management and information
technology.
There are no special reporting,
recordkeeping, and other compliance
requirements associated with this rule.
The rule does not duplicate, overlap,
or conflict with any other Federal rules.
NASA was unable to identify any
alternatives that would reduce the
economic impact on small entities.
However, NASA does not expect this
rule to have any significant economic
impact on small entities, because it does
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not impose any new requirements on
contractors.
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 Subjects in 48 CFR Parts 1816
and 1852
Government procurement.
Manuel Quinones,
NASA FAR Supplement Manager.
Accordingly, 48 CFR parts 1816 and
1852 are amended as follows:
■ 1. The authority citation for parts
1816 and 1852 continues to read as
follows:
Authority: 51 U.S.C. 20113(a) and 48 CFR
chapter 1.
PART 1816—TYPES OF CONTRACTS
2. Amend section 1816.001 by adding
in alphabetical order the definition
‘‘Term-determining official’’ to read as
follows:
■
1816.001
Definitions.
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*
Term-determining official means the
designated Agency official who reviews
the recommendations of the AwardTerm Board in determining whether the
contractor is eligible for an award term.
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■ 3. Add section 1816.405–277 to read
as follows:
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1816.405–277
Award term.
(a) An award term enables a
contractor to become eligible for
additional periods of performance or
ordering periods under a service
contract (as defined in FAR 37.101) by
achieving and sustaining the prescribed
performance levels under the contract. It
incentivizes the contractor for
maintaining superior performance by
providing an opportunity for extensions
of the contract term.
(b) Award terms are best suited for
acquisitions where a longer term
relationship (generally more than five
years) between the Government and a
contractor would provide significant
benefits to both. Motivating excellent
performance, fostering contractor capital
investment, and increasing the
desirability of the award, thus
potentially increasing competition, are
benefits that may justify the use of
award terms.
(c) While the administrative burden
and cost of more frequent procurements
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to both the Government and potential
offerors should be considered when
determining whether to use award
terms, this decision must be weighed
against market stability, the potential
changes and advancements in
technology, and flexibility to change
direction with mission changes and
associated frequent procurements.
(d) Award terms may be used in
conjunction with contract options under
FAR 17.2. Award terms are similar to
contract options in that they are
conditioned on the Government’s
continuing need for the contract and the
availability of funds. However, FAR
17.207(c)(7) states the contracting officer
must determine that the contractor’s
performance has been acceptable, e.g.,
received satisfactory ratings. In contrast,
to become eligible for an award term,
the contractor must maintain a level of
performance above acceptable as
specified in the Award Term Plan (see
1816.405–277(i)). In contracts with both
option periods and award terms, the
award term period of performance or
ordering period shall begin after
completion of any option period of
performance or ordering period.
(e) Contracts with award terms shall
include a base period of performance or
ordering period and may include a
designated number of option periods
during which the Government will
observe and evaluate the contractor’s
performance allowing the contractor to
earn an award term. Additionally, as
specified in the Award Term Plan, the
contractor may also be evaluated for
additional award terms during
performance of an earned award term. If
the contractor meets or exceeds the
performance requirements, there is an
on-going need for and desire to continue
the contract, funds are available, and the
contractor is not listed in the System for
Award Management Exclusions, then
the contractor may be eligible for
contract extension for the period of the
award term.
(f) Contracts with award terms shall
comply with FAR and NFS restrictions
on the overall contract length, such as
the 5-year period of performance
limitation found at NFS 1817.204.
(g) Award terms may only be used in
acquisitions for services exceeding $20
million dollars. Use of award terms for
lower-valued acquisitions may be
authorized in exceptional situations
such as contract requirements having
direct health or safety impacts, where
the judgmental assessment of the quality
of contractor performance is critical.
(h) Consistent with the Competition
in Contracting Act and general
procurement principles, the potential
award term periods in a procurement
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must be priced, evaluated, and
considered in the initial contract
selection process in order to be valid.
(i) All contracts including award
terms shall be supported by an Award
Term Plan that establishes criteria for
earning an award term and the
methodology and schedule for
evaluating contractor performance. A
copy of the Award Term Plan shall be
included in the contract. The
contracting officer may unilaterally
revise the Award Term Plan. Award
Term Plans shall—
(1) Identify the officials to include
Term-Determining Official involved in
the award term evaluation and their
function;
(2) Identify and describe each
evaluation factor, any subfactors, related
performance standards, adjectival
ratings, and numerical ranges or weights
to be used. The contracting officer
should follow the guidance at 1816.405–
274 in establishing award term
evaluation factors and 1816.405–275 in
establishing adjectival rating categories,
associated descriptions, numerical
scoring system, and weighted scoring
system;
(3) Specify the annual overall rating
required for the contractor to be eligible
for an award term that reflects a level of
performance above acceptable and the
number of award terms the contractor
may qualify for based on the rating
score;
(4) Identify the evaluation period(s)
and the evaluation schedule to be
conducted at stated intervals during the
contract period of performance or
ordering period so that the contractor
will periodically be informed of the
quality of its performance and the areas
in which improvement is expected (e.g.,
six months, nine months, twelve
months, or at other specific milestones),
and when the decision points are for the
determination that the contractor is
eligible for an award term; and
(5) Identify the contract’s base period
of performance or ordering period, any
option period(s), and total award-term
periods(s). Award term periods shall not
exceed one year.
(j)(1) The Government has the
unilateral right not to grant or to cancel
award term periods and the associated
Award Term Plans if—
(i) The contractor has failed to achieve
the required performance measures for
the corresponding evaluation period;
(ii) After earning an award term, the
contractor fails to earn an award term in
any succeeding year of contract
performance, the contracting officer may
cancel any award terms that the
contractor has earned, but that have not
begun;
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(iii) The contracting officer notifies
the contractor that the Government no
longer has a need for the award term
period before the time an award term
period is to begin;
(iv) The contractor represented that it
was a small business concern prior to
award of the contract, the contract was
set-aside for small businesses, and the
contractor rerepresents in accordance
with FAR clause 52.219–28 Post-Award
Small Business Program
Rerepresentation, that it is no longer a
small business; or
(v) The contracting officer notifies the
contractor that funds are not available
for the award term.
(2) When an award term period is not
granted or cancelled, any—
(i) Prior award term periods for which
the contractor remains otherwise
eligible are unaffected.
(ii) Subsequent award term periods
are also cancelled.
(k) Cancellation of an award term
period that has not yet commenced for
any of the reasons set forth in paragraph
(j) of this section shall not be considered
either a termination for convenience or
termination for default, and shall not
entitle the contractor to any termination
settlement or any other compensation. If
the award term is cancelled, a unilateral
modification will cite the clause as the
authority.
■ 4. Amend section 1816.406–70 by
adding paragraph (g) to read as follows:
1816.406–70
NASA contract clauses.
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(g) Insert the clause at 1852.216–72,
Award Term in solicitations and
contracts for services exceeding $20
million when award terms are
contemplated.
PART 1852—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
5. Add section 1852.216–72 to read as
follows:
■
1852.216–72
Award term.
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As prescribed in 1816.406–70(g),
insert the following clause:
AWARD TERM
(AUG 2017)
(a) Based on overall Contractor
performance as evaluated in accordance with
the Award Term Plan, the Contracting Officer
may extend the contract for the number and
duration of award terms as set forth in the
Award Term Plan.
(b) The Contracting Officer will execute
any earned award term period(s) through a
unilateral contract modification. All contract
provisions continue to apply throughout the
contract period of performance or ordering
period, including any award term period(s).
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(c) The Government will evaluate offerors
for award purposes by adding the total price
for all options and award terms to the price
for the basic requirement. This evaluation
will not obligate the Government to exercise
any options or award term periods.
(d) The Award Term Plan is attached in
Section J. The Award Term Plan provides the
methodology and schedule for evaluating
Contractor performance, determining
eligibility for an award term, and, together
with Agency need for the contract and
availability of funding, serves as the basis for
award term decisions. The Contracting
Officer may unilaterally revise the Award
Term Plan. Any changes to the Award Term
Plan will be in writing and incorporated into
the contract through a unilateral modification
citing this clause prior to the commencement
of any evaluation period. The Contracting
Officer will consult with the Contractor prior
to the issuance of a revised Award Term
Plan; however, the Contractor’s consent is
not required.
(e) The award term evaluation(s) will be
completed in accordance with the schedule
in the Award Term Plan. The Contractor will
be notified of the results and its eligibility to
be considered for the respective award term
no later than 120 days after the evaluation
period set forth in the Award Term Plan. The
Contractor may request a review of an award
term evaluation which has resulted in the
Contractor not earning the award term. The
request shall be submitted in writing to the
Contracting Officer within 15 days after
notification of the results of the evaluation.
(f)(1) The Government has the unilateral
right not to grant or to cancel award term
periods and the associated Award Term Plan
if—
(i) The Contractor has failed to achieve the
required performance measures for the
corresponding evaluation period;
(ii) After earning an award term, the
Contractor fails to earn an award term in any
succeeding year of contract performance, the
Contracting Officer may cancel any award
terms that the Contractor has earned, but that
have not begun;
(iii) The Contracting Officer has notified
the Contractor that the Government no longer
has a need for the award term period before
the time an award term period is to begin;
(iv) The Contractor represented that it was
a small business concern prior to award of
this contract, the contract was set-aside for
small businesses, and the Contractor
rerepresents in accordance with FAR clause
52.219–28, Post-Award Small Business
Program Rerepresentation, that it is no longer
a small business; or
(v) The Contracting Officer has notified the
Contractor that funds are not available for the
award term.
(2) When an award term period is not
granted or cancelled, any—
(i) Prior award term periods for which the
contractor remains otherwise eligible are
unaffected, except as provided in paragraph
(g) of this clause; or
(ii) Subsequent award term periods are also
cancelled.
(g) Cancellation of an award term period
that has not yet started for any of the reasons
set forth in paragraph (f) of this clause shall
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34419
not be considered either a termination for
convenience or termination for default, and
shall not entitle the Contractor to any
termination settlement or any other
compensation.
(h) Cancellation of an award term period
that has not yet commenced for any of the
reasons set forth in paragraphs (f) and (g) of
this clause shall not be considered either a
termination for convenience or termination
for default, and shall not entitle the
Contractor to any termination settlement or
any other compensation. If the award term is
cancelled, a unilateral modification will cite
this clause as the authority.
(i) Funds are not presently available for
any award term. The Government’s
obligation under any award term is
contingent upon the availability of
appropriated funds from which payment can
be made. No legal liability on the part of the
Government for any award term payment
may arise until funds are made available to
the Contracting Officer for an award term and
until the Contractor receives notice of such
availability, to be confirmed in writing by the
Contracting Officer.
(End of clause)
[FR Doc. 2017–15520 Filed 7–24–17; 8:45 am]
BILLING CODE 7510–13–P
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
50 CFR Part 21
[Docket No. FWS–HQ–MB–2013–0070;
FF09M21200–134–FXMB1231099BPP0]
RIN 1018–AZ69
Migratory Bird Permits; Control Order
for Introduced Migratory Bird Species
in Hawaii
Fish and Wildlife Service,
Interior.
ACTION: Final rule.
AGENCY:
Introduced, nonnative, alien,
and invasive species in Hawaii displace,
compete with, and consume native
species, some of which are endangered,
threatened, or otherwise in need of
additional protection in order to
increase or maintain viable populations.
To protect native species, we establish
a control order for cattle egrets
(Bubulcus ibis) and barn owls (Tyto
alba), two invasive migratory bird
species in Hawaii, under the direction
of Executive Order 13112. We also make
available the supporting final
environmental assessment, the finding
of no significant impact, and public
comments for this control order.
DATES: This rule is effective August 24,
2017.
FOR FURTHER INFORMATION CONTACT: Jerry
Thompson, at 703–358–2016.
SUMMARY:
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]]>Agencies
[Federal Register Volume 82, Number 141 (Tuesday, July 25, 2017)]
[Rules and Regulations]
[Pages 34416-34419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15520]
=======================================================================
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1816 and 1852
RIN 2700-AE32
NASA Federal Acquisition Regulation Supplement: Award Term (NFS
Case 2016-N027)
AGENCY: National Aeronautics and Space Administration.
ACTION: Final rule.
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SUMMARY: NASA is issuing a final rule amending the NASA Federal
Acquisition Regulation (FAR) Supplement (NFS) to add policy on the use
of additional contract periods of performance or ``award terms'' as a
contract incentive.
DATES: Effective: August 24, 2017.
FOR FURTHER INFORMATION CONTACT: Marilyn E. Chambers, telephone 202-
358-5154.
SUPPLEMENTARY INFORMATION:
I. Background
NASA published a proposed rule in the Federal Register at 81 FR
89038 on December 9, 2016, to implement policy addressing the use of
``award terms'' or additional contract periods of performance for which
a contractor may earn if the contractor's performance is superior, the
Government has an on-going need for the requirement, and funds are
available for the additional period of performance. The policy provides
a non-monetary incentive for contractors whose performance is
excellent. An award term incentive would be used where a longer term
relationship (generally more than five years) between the Government
and a contractor would provide benefits to both parties. Benefits of
award term incentives include a more stable business relationship both
for the contractor and its employees (thus retaining a skilled,
experienced workforce), motivating excellent performance (including
cost savings), fostering contractor capital investment, increasing the
desirability of the award (potentially increasing competition), and
reduced administrative costs and disruptions in preparing for and
negotiating replacement contracts.
Award terms are an incentive and not the same as exercising an
option as set forth in FAR 17.207. While there are similarities between
an award term and an option, such as funds must be available and the
requirement must fulfill an existing Government need, the key
difference is that an option may be exercised when the contractor's
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performance is acceptable, while earning an award term requires
sustained excellent performance. Two respondents submitted comments on
the proposed rule.
II. Discussion and Analysis
NASA reviewed the public comments in the development of the final
rule. An editorial change was made to the rule for clarification. No
other changes to the proposed rule were made. A discussion of the
comments and the change made to the rule as a result of those comments
are provided as follows:
A. Changes. No changes are being made to the final rule as a result
of the public comments received with the exception of a minor editorial
change.
B. Analysis of Public Comments.
Comment: One respondent stated exceeding the five-year limit on
contracts using award terms, could limit competition, limit the range
of solutions available to NASA, and raise prices for the government and
would lead to sole source contracting, reduced competition, and higher
costs to the government.
Response: FAR 17.204(e) states, unless otherwise approved in
accordance with agency procedures, the total of the basic and option
periods shall not exceed 5 years in the case of services. NFS
1817.204(e) provides for exceptions to the 5-year period of performance
limitation under Agency contracts. Concerning the impact of the use of
award terms on competition, range of solutions available to NASA, and
prices, the rule at 1816.405-277(c)states the factors to consider when
determining whether to use award terms include, market stability, the
potential changes and advancements in technology, and flexibility to
change direction with mission changes.
Comment: One respondent stated that contractors would be more
interested in proposing on a contract if the contract has the potential
for additional years of business. The respondent opined a better course
of action is for NASA to issue a request for proposals allowing for the
incumbent contractor on an award term contract to compete for a follow-
on contract alongside any other interested parties and that this
competition would provide NASA with a range of potential solutions and
lower costs.
Response: As stated in the policy, the benefits of a longer-term
relationship versus more frequent competitions must be considered when
determining if an award term incentive is appropriate. The factors
considered in this decision would be documented in the Determination
and Findings, required in under current NFS policy for incentive
contracts, and provided to the Associate Administrator for Procurement
for review and approval.
Comment: One respondent inquired about NASA's current award term
policy, Procurement Information Circular (PIC) 06-02, Use of Award Term
Incentive, dated January 25, 2006, and NASA's current use of award term
incentives. Additionally, the respondent referenced an award term
contracting pilot program in the late 1990's with the intent of
assessing the use of award term contracts at NASA. The respondent
questioned how the pilot and (PIC) informed this rule.
Response: The PIC and pilot program the respondent references are
more than a decade old. The pilot was conducted to provide information
from the NASA procurement organizations on their use of award term
incentives. At the time of that pilot, NASA had 12 award term
contracts. As discussed in the Initial Regulatory Flexibility Analysis
contained in the proposed rule, NASA has ten award term contracts. The
PIC was used as a starting point for drafting this rule. Additional
research on the use of award term contracts and comments from the NASA
procurement organizations also contributed to the formulation of this
rule.
Comment: Another respondent stated the proposed clause is
ambiguous, specifically, paragraph (a) states that the CO ``may'' award
a term, but paragraph (f) gives reasons for not awarding a term. The
respondent questioned, if none of those reasons apply, must the CO
award a term and, if so what does the ``may'' mean and, if not, why
have paragraph (f).
Response: Paragraph (a) of the clause is a general statement that
the contracting officer will rely on the Award Term Plan to determine
if the contractor is eligible for an award term. ``May'' is used in
paragraph (a) because the decision to extend the contract for the
number and duration of award terms is discretionary, i.e., a contractor
may earn an award term based on meeting the requirements of the Award
Term Plan, but the contracting officer, for a variety of reasons, may
decide not to grant the award term. NASA agrees there is some overlap
of paragraphs (a) and (f). To remove this overlap, paragraph (a) is
revised to remove the phrase ``subject to the Government's continuing
need for the contract and the availability of funds.'' Paragraph (f) of
the clause, which addresses the Government's right not to grant or
cancel the award term, states the award term may not be granted if the
there is no continuing need or if funds are not available.
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
NASA 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:
The objective of this rule is to implement policy in the NASA
Federal Acquisition Regulation Supplement (NFS) to address the use of
``award terms'' or additional contract periods of performance for which
a contractor may earn if the contractor's performance is superior, the
Government has an on-going need for the requirement, and funds are
available for the additional period of performance. This policy
provides a non-monetary incentive for contractors whose performance is
sustained at an excellent level.
No comments were received in response to the initial regulatory
flexibility analysis.
The Federal Procurement Data System (FPDS) does not track award fee
contracts, but a survey of NASA's procurement organizations shows there
are currently 10 active award term contracts. Of these, six are with
small businesses. A range of services are covered, such as logistics,
facilities or technical management and information technology.
There are no special reporting, recordkeeping, and other compliance
requirements associated with this rule.
The rule does not duplicate, overlap, or conflict with any other
Federal rules.
NASA was unable to identify any alternatives that would reduce the
economic impact on small entities. However, NASA does not expect this
rule to have any significant economic impact on small entities, because
it does
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not impose any new requirements on contractors.
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 Subjects in 48 CFR Parts 1816 and 1852
Government procurement.
Manuel Quinones,
NASA FAR Supplement Manager.
Accordingly, 48 CFR parts 1816 and 1852 are amended as follows:
0
1. The authority citation for parts 1816 and 1852 continues to read as
follows:
Authority: 51 U.S.C. 20113(a) and 48 CFR chapter 1.
PART 1816--TYPES OF CONTRACTS
0
2. Amend section 1816.001 by adding in alphabetical order the
definition ``Term-determining official'' to read as follows:
1816.001 Definitions.
* * * * *
Term-determining official means the designated Agency official who
reviews the recommendations of the Award-Term Board in determining
whether the contractor is eligible for an award term.
* * * * *
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3. Add section 1816.405-277 to read as follows:
1816.405-277 Award term.
(a) An award term enables a contractor to become eligible for
additional periods of performance or ordering periods under a service
contract (as defined in FAR 37.101) by achieving and sustaining the
prescribed performance levels under the contract. It incentivizes the
contractor for maintaining superior performance by providing an
opportunity for extensions of the contract term.
(b) Award terms are best suited for acquisitions where a longer
term relationship (generally more than five years) between the
Government and a contractor would provide significant benefits to both.
Motivating excellent performance, fostering contractor capital
investment, and increasing the desirability of the award, thus
potentially increasing competition, are benefits that may justify the
use of award terms.
(c) While the administrative burden and cost of more frequent
procurements to both the Government and potential offerors should be
considered when determining whether to use award terms, this decision
must be weighed against market stability, the potential changes and
advancements in technology, and flexibility to change direction with
mission changes and associated frequent procurements.
(d) Award terms may be used in conjunction with contract options
under FAR 17.2. Award terms are similar to contract options in that
they are conditioned on the Government's continuing need for the
contract and the availability of funds. However, FAR 17.207(c)(7)
states the contracting officer must determine that the contractor's
performance has been acceptable, e.g., received satisfactory ratings.
In contrast, to become eligible for an award term, the contractor must
maintain a level of performance above acceptable as specified in the
Award Term Plan (see 1816.405-277(i)). In contracts with both option
periods and award terms, the award term period of performance or
ordering period shall begin after completion of any option period of
performance or ordering period.
(e) Contracts with award terms shall include a base period of
performance or ordering period and may include a designated number of
option periods during which the Government will observe and evaluate
the contractor's performance allowing the contractor to earn an award
term. Additionally, as specified in the Award Term Plan, the contractor
may also be evaluated for additional award terms during performance of
an earned award term. If the contractor meets or exceeds the
performance requirements, there is an on-going need for and desire to
continue the contract, funds are available, and the contractor is not
listed in the System for Award Management Exclusions, then the
contractor may be eligible for contract extension for the period of the
award term.
(f) Contracts with award terms shall comply with FAR and NFS
restrictions on the overall contract length, such as the 5-year period
of performance limitation found at NFS 1817.204.
(g) Award terms may only be used in acquisitions for services
exceeding $20 million dollars. Use of award terms for lower-valued
acquisitions may be authorized in exceptional situations such as
contract requirements having direct health or safety impacts, where the
judgmental assessment of the quality of contractor performance is
critical.
(h) Consistent with the Competition in Contracting Act and general
procurement principles, the potential award term periods in a
procurement must be priced, evaluated, and considered in the initial
contract selection process in order to be valid.
(i) All contracts including award terms shall be supported by an
Award Term Plan that establishes criteria for earning an award term and
the methodology and schedule for evaluating contractor performance. A
copy of the Award Term Plan shall be included in the contract. The
contracting officer may unilaterally revise the Award Term Plan. Award
Term Plans shall--
(1) Identify the officials to include Term-Determining Official
involved in the award term evaluation and their function;
(2) Identify and describe each evaluation factor, any subfactors,
related performance standards, adjectival ratings, and numerical ranges
or weights to be used. The contracting officer should follow the
guidance at 1816.405-274 in establishing award term evaluation factors
and 1816.405-275 in establishing adjectival rating categories,
associated descriptions, numerical scoring system, and weighted scoring
system;
(3) Specify the annual overall rating required for the contractor
to be eligible for an award term that reflects a level of performance
above acceptable and the number of award terms the contractor may
qualify for based on the rating score;
(4) Identify the evaluation period(s) and the evaluation schedule
to be conducted at stated intervals during the contract period of
performance or ordering period so that the contractor will periodically
be informed of the quality of its performance and the areas in which
improvement is expected (e.g., six months, nine months, twelve months,
or at other specific milestones), and when the decision points are for
the determination that the contractor is eligible for an award term;
and
(5) Identify the contract's base period of performance or ordering
period, any option period(s), and total award-term periods(s). Award
term periods shall not exceed one year.
(j)(1) The Government has the unilateral right not to grant or to
cancel award term periods and the associated Award Term Plans if--
(i) The contractor has failed to achieve the required performance
measures for the corresponding evaluation period;
(ii) After earning an award term, the contractor fails to earn an
award term in any succeeding year of contract performance, the
contracting officer may cancel any award terms that the contractor has
earned, but that have not begun;
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(iii) The contracting officer notifies the contractor that the
Government no longer has a need for the award term period before the
time an award term period is to begin;
(iv) The contractor represented that it was a small business
concern prior to award of the contract, the contract was set-aside for
small businesses, and the contractor rerepresents in accordance with
FAR clause 52.219-28 Post-Award Small Business Program
Rerepresentation, that it is no longer a small business; or
(v) The contracting officer notifies the contractor that funds are
not available for the award term.
(2) When an award term period is not granted or cancelled, any--
(i) Prior award term periods for which the contractor remains
otherwise eligible are unaffected.
(ii) Subsequent award term periods are also cancelled.
(k) Cancellation of an award term period that has not yet commenced
for any of the reasons set forth in paragraph (j) of this section shall
not be considered either a termination for convenience or termination
for default, and shall not entitle the contractor to any termination
settlement or any other compensation. If the award term is cancelled, a
unilateral modification will cite the clause as the authority.
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4. Amend section 1816.406-70 by adding paragraph (g) to read as
follows:
1816.406-70 NASA contract clauses.
* * * * *
(g) Insert the clause at 1852.216-72, Award Term in solicitations
and contracts for services exceeding $20 million when award terms are
contemplated.
PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
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5. Add section 1852.216-72 to read as follows:
1852.216-72 Award term.
As prescribed in 1816.406-70(g), insert the following clause:
AWARD TERM
(AUG 2017)
(a) Based on overall Contractor performance as evaluated in
accordance with the Award Term Plan, the Contracting Officer may
extend the contract for the number and duration of award terms as
set forth in the Award Term Plan.
(b) The Contracting Officer will execute any earned award term
period(s) through a unilateral contract modification. All contract
provisions continue to apply throughout the contract period of
performance or ordering period, including any award term period(s).
(c) The Government will evaluate offerors for award purposes by
adding the total price for all options and award terms to the price
for the basic requirement. This evaluation will not obligate the
Government to exercise any options or award term periods.
(d) The Award Term Plan is attached in Section J. The Award Term
Plan provides the methodology and schedule for evaluating Contractor
performance, determining eligibility for an award term, and,
together with Agency need for the contract and availability of
funding, serves as the basis for award term decisions. The
Contracting Officer may unilaterally revise the Award Term Plan. Any
changes to the Award Term Plan will be in writing and incorporated
into the contract through a unilateral modification citing this
clause prior to the commencement of any evaluation period. The
Contracting Officer will consult with the Contractor prior to the
issuance of a revised Award Term Plan; however, the Contractor's
consent is not required.
(e) The award term evaluation(s) will be completed in accordance
with the schedule in the Award Term Plan. The Contractor will be
notified of the results and its eligibility to be considered for the
respective award term no later than 120 days after the evaluation
period set forth in the Award Term Plan. The Contractor may request
a review of an award term evaluation which has resulted in the
Contractor not earning the award term. The request shall be
submitted in writing to the Contracting Officer within 15 days after
notification of the results of the evaluation.
(f)(1) The Government has the unilateral right not to grant or
to cancel award term periods and the associated Award Term Plan if--
(i) The Contractor has failed to achieve the required
performance measures for the corresponding evaluation period;
(ii) After earning an award term, the Contractor fails to earn
an award term in any succeeding year of contract performance, the
Contracting Officer may cancel any award terms that the Contractor
has earned, but that have not begun;
(iii) The Contracting Officer has notified the Contractor that
the Government no longer has a need for the award term period before
the time an award term period is to begin;
(iv) The Contractor represented that it was a small business
concern prior to award of this contract, the contract was set-aside
for small businesses, and the Contractor rerepresents in accordance
with FAR clause 52.219-28, Post-Award Small Business Program
Rerepresentation, that it is no longer a small business; or
(v) The Contracting Officer has notified the Contractor that
funds are not available for the award term.
(2) When an award term period is not granted or cancelled, any--
(i) Prior award term periods for which the contractor remains
otherwise eligible are unaffected, except as provided in paragraph
(g) of this clause; or
(ii) Subsequent award term periods are also cancelled.
(g) Cancellation of an award term period that has not yet
started for any of the reasons set forth in paragraph (f) of this
clause shall not be considered either a termination for convenience
or termination for default, and shall not entitle the Contractor to
any termination settlement or any other compensation.
(h) Cancellation of an award term period that has not yet
commenced for any of the reasons set forth in paragraphs (f) and (g)
of this clause shall not be considered either a termination for
convenience or termination for default, and shall not entitle the
Contractor to any termination settlement or any other compensation.
If the award term is cancelled, a unilateral modification will cite
this clause as the authority.
(i) Funds are not presently available for any award term. The
Government's obligation under any award term is contingent upon the
availability of appropriated funds from which payment can be made.
No legal liability on the part of the Government for any award term
payment may arise until funds are made available to the Contracting
Officer for an award term and until the Contractor receives notice
of such availability, to be confirmed in writing by the Contracting
Officer.
(End of clause)
[FR Doc. 2017-15520 Filed 7-24-17; 8:45 am]
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