Federal Acquisition Regulation: Lowest Price Technically Acceptable Source Selection Process, 52425-52428 [2019-20798]
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Federal Register / Vol. 84, No. 191 / Wednesday, October 2, 2019 / Proposed Rules
21. Amend section 52.209–5 by
revising the date of the provision and
removing from paragraph (a)(1)(i)(D)
introductory text ‘‘$3,500’’ and adding
‘‘the threshold at 9.104–5(a)(2)’’ in its
place.
The revision reads as follows:
■
52.209–5 Certification Regarding
Responsibility Matters.
*
*
*
*
*
52.219–9
Plan.
Certification Regarding Responsibility
Matters (DATE)
*
*
*
*
*
*
22. Amend section 52.212–1 by
revising the date of the provision and
removing from paragraph (j) ‘‘$3,500,
and offers of $3,500’’ and adding ‘‘the
micro-purchase threshold, and offers at
the micro-purchase threshold’’ in its
place.
The revision reads as follows:
■
52.212–1 Instructions to Offerors—
Commercial Items.
*
*
*
*
*
Instructions to Offerors—Commercial Items
(DATE)
*
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*
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*
■ 23. Amend section 52.212–3 by—
■ (a) Revising the date of the provision;
■ (b) Removing from paragraph (h)(4)
introductory text ‘‘$3,500’’ and adding
‘‘the threshold at 9.104–5(a)(2)’’ in its
place; and
■ (c) Removing from paragraph
(o)(2)(iii) ‘‘$3,500’’ and adding ‘‘the
threshold at 25.703–2(a)(2)’’ in its place.
The revision reads as follows:
52.212–3 Offeror Representations and
Certifications—Commercial Items.
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*
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*
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*
24. Amend section 52.212–5 by—
(a) Revising the date of the clause;
(b) Removing from paragraph (b)(17)(i)
‘‘(Aug 2018)’’ and adding ‘‘(DATE); and
■ (c) Removing from paragraph
(b)(17)(v) ‘‘(Aug 2018)’’ and adding
‘‘(DATE) in its place.
The revision reads as follows:
■
■
■
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52.212–5 Contract Terms and Conditions
Required To Implement Statutes or
Executive Orders—Commercial Items.
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Contract Terms and Conditions Required To
Implement Statutes or Executive Orders—
Commercial Items (DATE)
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■ 25. Amend section 52.219–9 by—
■ a. Revising the date of the clause;
■ b. Removing from paragraph
(d)(11)(iii) ‘‘$150,000’’ and adding ‘‘the
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Small Business Subcontracting
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Small Business Subcontracting Plan (DATE)
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Alternate IV (DATE). * * *
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26. Amend section 52.225–25 by
revising the provision title and date, and
removing from paragraph (c)(3)
‘‘$3,500’’ and adding ‘‘the threshold at
25.703–2(a)(2)’’ in its place.
The revisions read as follows:
■
52.225–25 Prohibition on Contracting with
Entities Engaging in Certain Activities or
Transactions Relating to Iran—
Representation and Certifications.
*
*
*
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Prohibition on Contracting With Entities
Engaging in Certain Activities or
Transactions Relating to Iran—
Representation and Certifications (DATE)
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[FR Doc. 2019–20796 Filed 10–1–19; 8:45 am]
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
*
Offeror Representations and Certifications—
Commercial Items (DATE)
*
simplified acquisition threshold’’ in its
place;
■ c. Revising the date of Alternate IV;
and
■ d. In Alternate IV, removing from
(d)(11)(iii) ‘‘$150,000’’ and adding ‘‘the
simplified acquisition threshold’’ in its
place.
The revisions read as follows:
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 12, 13, 15, 16, and 37
[FAR Case 2018–016; Docket No. FAR–
2018–0016, Sequence No. 1]
RIN 9000–AN75
Federal Acquisition Regulation:
Lowest Price Technically Acceptable
Source Selection Process
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Proposed rule.
AGENCY:
DoD, GSA, and NASA are
proposing to amend the Federal
Acquisition Regulation (FAR) to
implement a section of the John S.
McCain National Defense Authorization
Act for Fiscal Year 2019, which
SUMMARY:
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specifies the criteria that must be met in
order to include lowest price technically
acceptable (LPTA) source selection
criteria in a solicitation; and requires
procurements predominantly for the
acquisition of certain services and
supplies to avoid the use of LPTA
source selection criteria, to the
maximum extent practicable.
DATES: Interested parties should submit
written comments to the Regulatory
Secretariat Division at one of the
addresses shown below on or before
December 2, 2019 to be considered in
the formation of the final rule.
ADDRESSES: Submit comments in
response to FAR Case 2018–016 by any
of the following methods:
• Regulations.gov: https://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
searching for ‘‘FAR Case 2018–016’’.
Select the link ‘‘Comment Now’’ that
corresponds with ‘‘FAR Case 2018–
016’’. Follow the instructions provided
on the screen. Please include your
name, company name (if any), and
‘‘FAR Case 2018–016’’ on your attached
document.
• Mail: General Services
Administration, Regulatory Secretariat
Division (MVCB), ATTN: Lois Mandell,
1800 F Street NW, 2nd Floor,
Washington, DC 20405.
Instructions: Please submit comments
only and cite ‘‘FAR Case 2018–016’’, in
all correspondence related to this case.
All comments received will 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: Mr.
Michael O. Jackson, Procurement
Analyst, at 202–208–4949 or
michaelo.jackson@gsa.gov for
clarification of content. For information
pertaining to status or publication
schedules, contact the Regulatory
Secretariat Division at 202–501–4755.
Please cite ‘‘FAR Case 2018–016’’.
SUPPLEMENTARY INFORMATION:
I. Background
Section 880 of the John S. McCain
National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2019 (Pub.
L. 115–232, 41 U.S.C. 3701 Note) makes
it the policy of the Government to avoid
using Lowest Price Technically
Acceptable (LPTA) source selection
criteria in circumstances that would
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Federal Register / Vol. 84, No. 191 / Wednesday, October 2, 2019 / Proposed Rules
deny the Government the benefits of
cost and technical tradeoffs in the
source selection process. The section
requires that LPTA source selection
criteria be used only when: (1) An
executive agency is able to
comprehensively and clearly describe
the minimum requirements expressed in
terms of performance objectives,
measures, and standards that will be
used to determine acceptability of
offers; (2) the executive agency would
realize no, or minimal, value from a
contract proposal exceeding the
minimum technical or performance
requirements set forth in the request for
proposal; (3) the proposed technical
approaches will require no, or minimal,
subjective judgment by the source
selection authority as to the desirability
of one offeror’s proposal versus a
competing proposal; (4) the executive
agency has a high degree of confidence
that a review of technical proposals of
offerors other than the lowest bidder
would not result in the identification of
factors that could provide value or
benefit to the executive agency; (5) the
contracting officer has included a
justification for the use of an LPTA
evaluation methodology in the contract
file; and (6) the executive agency has
determined that the lowest price reflects
total costs, including for operations and
support.
Additionally, section 880 requires
that the use of LPTA source selection
criteria be avoided, to the maximum
extent practicable, in procurements that
are predominantly for the acquisition of:
information technology services;
cybersecurity services; systems
engineering and technical assistance
services; advanced electronic testing;
audit or audit readiness services; health
care services and records;
telecommunications devices and
services; or other knowledge-based
professional services; personal
protective equipment; or, knowledgebased training or logistics services in
contingency operations or other
operations outside the United States,
including in Afghanistan or Iraq.
in section 880. This rule does not
address the applicability of section 880
to the Federal Supply Schedules
Program (Schedules Program). GSA will
separately address the applicability of
section 880 to the Schedules Program.
In addition, section 880 does not
apply to DoD. Instead, section 813 of the
NDAA for FY 2017 (10 U.S.C. 2305
Note) and section 822 of the NDAA for
FY 2018 (10 U.S.C. 2305 Note) establish
a similar, but not the same, set of
criteria for DoD procurements to meet in
order to use LPTA source selection
criteria in solicitations. These sections
are being implemented in a separate
Defense Federal Acquisition Regulation
Supplement case (2018–D010).
II. Discussion and Analysis
This proposed rule would require
contracting officers to: ensure
procurements meet the criteria of
section 880 before including LPTA
source selection criteria in solicitations;
document the contract file with a
justification for the use of the LPTA
source selection process, when
applicable; and, to avoid, to the
maximum extent practicable, the use of
LPTA source selection criteria in
procurements that are predominantly
for the supplies and services identified
V. Executive Order 13771
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III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold (SAT) and for Commercial
Items, Including Commercially
Available Off-the-Shelf (COTS) Items
This proposed rule does not create
any new provisions or clauses, nor does
it change the applicability of any
existing provisions or clauses included
in solicitations and contracts valued at
or below the SAT, or for commercial
items, including COTS items.
IV. 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.
The rule is not subject to E.O. 13771,
because this rule is not a significant
regulatory action under E.O. 12866.
VI. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect
this 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. However, an initial regulatory
flexibility analysis has been performed
and is summarized as follows:
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The Department of Defense (DoD), General
Services Administration (GSA), and National
Aeronautics and Space Administration
(NASA) are proposing to revise the Federal
Acquisition Regulation (FAR) to:
• Specify the criteria that must be met in
order to include lowest price technically
acceptable (LPTA) source selection criteria in
a solicitation; and,
• Require procurements predominantly for
the acquisition of certain services or supplies
to avoid the use of LPTA source selection
criteria, to the maximum extent practicable.
The objective of the rule is to avoid using
LPTA source selection criteria in
circumstances that would deny the
Government the benefits of cost and
technical tradeoffs in the source selection
process. The legal basis for the rule is section
880 of the John S. McCain National Defense
Authorization Act (NDAA) for Fiscal Year
(FY) 2019 (Pub. L. 115–232). The rule does
not cover DoD, which has already been
covered by section 813 of the NDAA for FY
2017 and section 822 of the NDAA for FY
2018.
DoD, GSA, and NASA do not expect this
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. The rule primarily
affects internal Government requirements
determination decisions, acquisition strategy
decisions, and contract file documentation
requirements. The Government does not
collect data on the total number of
solicitations issued on an annual basis that
do or do not specify the use of the LPTA
source selection process. However, the
Federal Procurement Data System (FPDS)
provides the following information for fiscal
year 2018:
• Federal competitive contracts and orders
awarded using FAR parts 13, 15, or 16.5
procedures. In FY 2018, the Federal
Government, excluding DoD, awarded
approximately 82,337 new contracts and
orders using the competitive procedures of
FAR 13, 15, or 16.5. This data excludes
acquisitions for the supply/service categories
identified in section 880(c) of the NDAA for
FY 2019. Of the 82,337 contracts and orders,
approximately 69 percent (or 56,622
contracts and orders) were awarded to
approximately 27,029 unique small
businesses. It is important to note that FPDS
does not collect data on solicitations, but
does collect information on competitively
awarded contracts using various FAR
procedures. Therefore, this data represents
contracts that were awarded using LPTA and
tradeoff source selection procedures.
• Federal competitive contracts and orders
awarded for certain services and supplies. In
FY 2018, the Federal Government, excluding
DoD, awarded approximately 22,581 new
contracts and orders potentially for the
supplies and services identified in section
880(c) of the NDAA for FY 2019 using the
competitive procedures of FAR parts 13, 15,
and 16.5, of which approximately 63 percent
(or 14,285 contracts and orders) were
awarded to approximately 10,129 unique
small businesses.
The proposed rule does not impose any
Paperwork Reduction Act reporting or
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recordkeeping requirements on any small
entities. The rule may impact some small
businesses. Some offerors may need to
change the structure of their quotes or offers
to conform to instructions and corresponding
evaluation criteria in solicitations that use
tradeoff source selection criteria, as LPTA
source selection criteria is now unavailable
for use in some circumstances. This impact,
which represents the incremental difference
between preparing a noncomplex proposal to
be evaluated using LPTA criteria and
preparing the additional information
necessary to evaluate a proposal using
tradeoff criteria, is expected to be minimal.
The proposed rule does not duplicate,
overlap, or conflict with any other Federal
rules.
There are no known significant alternative
approaches to the proposed rule that would
meet the proposed objectives.
The Regulatory Secretariat has
submitted a copy of the IRFA to the
Chief Counsel for Advocacy of the Small
Business Administration. A copy of the
IRFA may be obtained from the
Regulatory Secretariat. DoD, GSA, and
NASA invite comments from small
business concerns and other interested
parties on the expected impact of this
rule on small entities.
DoD, GSA, and NASA will also
consider comments from small entities
concerning the existing regulations in
subparts affected by this rule consistent
with 5 U.S.C. 610. Interested parties
must submit such comments separately
and should cite 5 U.S.C. 610 (FAR Case
2018–016) in correspondence.
VII. 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 12, 13,
15, 16, and 37
Government procurement.
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William F. Clark,
Director,
Office of Government-wide Acquisition
Policy, Office of Acquisition Policy, Office of
Government-wide Policy.
Therefore, DoD, GSA, and NASA are
proposing to amend 48 CFR parts 12, 13,
15, 16 and 37 as set forth below:
■ 1. The authority citation for 48 CFR
parts 12, 13, 15, 16 and 37 continues to
read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 51 U.S.C. 20113.
PART 12—ACQUISITION OF
COMMERCIAL ITEMS
2. Revise section 12.203 by
redesignating the text as paragraph (a)
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and adding paragraph (b) to read as
follows:
12.203 Procedures for solicitation,
evaluation, and award.
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(b) Contracting officers shall ensure
the criteria at 15.101–2(c) are met when
using the lowest price technically
acceptable source selection process.
PART 13—SIMPLIFIED ACQUISITION
PROCEDURES
3. Amend section 13.106–1 by adding
paragraphs (a)(2)(i) and (a)(2)(ii) to read
as follows:
■
13.106–1
Soliciting competition.
(a) * * *
(2) * * *
(i) Except for DoD, contracting officers
shall ensure the criteria at 15.101–
2(c)(1)–(5) are met when using the
lowest price technically acceptable
source selection process.
(ii) Except for DoD, avoid using the
lowest price technically acceptable
source selection process to acquire
certain supplies and services in
accordance with 15.101–2(d).
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■ 4. Amend section 13.106–3 by—
■ a. In paragraph (b)(3), removing
‘‘statements—’’ and adding ‘‘statements,
when applicable—’’ in its place;
■ b. In paragraph (b)(3)(i), removing ‘‘;
or’’ and adding ‘‘;’’ in its place;
■ c. In paragraph (b)(3)(ii), removing ‘‘.’’
and adding ‘‘; and’’
■ d. Adding paragraph (b)(3)(iii).
The addition reads as follows:
13.106–3
Award and documentation.
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(b) * * *
(3) * * *
(iii) Except for DoD, when using
lowest price technically acceptable
source selection process, justifying the
use of such process.
*
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*
PART 15—CONTRACTING BY
NEGOTIATION
5. Amend section 15.101–2 by adding
paragraphs (c) and (d) to read as follows:
■
15.101–2 Lowest price technically
acceptable source selection process.
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(c) Except for DoD, in accordance
with section 880 of the National Defense
Authorization Act for Fiscal Year 2019
(Pub. L. 115–232, 41 U.S.C. 3701 Note),
the lowest price technically acceptable
source selection process shall only be
used when—
(1) The agency can comprehensively
and clearly describe the minimum
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52427
requirements in terms of performance
objectives, measures, and standards that
will be used to determine the
acceptability of offers;
(2) The agency would realize no, or
minimal, value from a proposal that
exceeds the minimum technical or
performance requirements;
(3) The agency believes the technical
proposals will require no, or minimal,
subjective judgment by the source
selection authority as to the desirability
of one offeror’s proposal versus a
competing proposal;
(4) The agency has a high degree of
confidence that reviewing the technical
proposals of all offerors would not
result in the identification of
characteristics that could provide value
or benefit to the agency;
(5) The agency determined that the
lowest price reflects the total cost,
including operation and support, of the
product(s) or service(s) being acquired;
and
(6) The contracting officer documents
the contract file describing the
circumstances that justify the use of the
lowest price technically acceptable
source selection process.
(d) Except for DoD, in accordance
with section 880 of the National Defense
Authorization Act for Fiscal Year 2019
(Pub. L. 115–232, 41 U.S.C. 3701 Note),
contracting officers shall avoid, to the
maximum extent practicable, using the
lowest price technically acceptable
source selection process in the case of
a procurement that is predominantly for
the acquisition of—
(1) Information technology services,
cybersecurity services, systems
engineering and technical assistance
services, advanced electronic testing,
audit or audit readiness services, health
care services and records,
telecommunications devices and
services, or other knowledge-based
professional services;
(2) Personal protective equipment; or
(3) Knowledge-based training or
logistics services in contingency
operations or other operations outside
the United States, including in
Afghanistan or Iraq.
PART 16—TYPES OF CONTRACTS
6. Amend section 16.505 by—
a. Removing from the end of
paragraph (b)(1)(ii) ‘‘must—’’ and
adding ‘‘shall—’’ in its place;
■ b. Removing from paragraph
(b)(1)(ii)(D) ‘‘contract; and’’ and adding
‘‘contract;’’ in its place;
■ c. Removing from paragraph
(b)(1)(ii)(E) ‘‘decision.’’ and adding
‘‘decision;’’ in its place;
■ d. Adding paragraphs (b)(1)(ii)(F) and
(b)(1)(ii)(G); and
■
■
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e. Adding paragraph (b)(7)(iii).
The additions read as follows:
16.505
Ordering.
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(b) * * *
(1) * * *
(ii) * * *
(F) Except for DoD, ensure the criteria
at 15.101–2(c)(1)–(5) are met when
using the lowest price technically
acceptable source selection process; and
(G) Except for DoD, avoid using the
lowest price technically acceptable
source selection process to acquire
certain supplies and services in
accordance with 15.101–2(d).
*
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(7) * * *
(iii) Except for DoD, the contracting
officer shall document in the contract
file a justification for use of the lowest
price technically acceptable source
selection process, when applicable.
*
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PART 37—SERVICE CONTRACTING
7. Amend section 37.102 by adding
paragraph (j) to read as follows:
■
37.102
Policy.
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(j) Except for DoD, see 15.101–2(d) for
limitations on the use of the lowest
price technically acceptable source
selection process to acquire certain
services.
[FR Doc. 2019–20798 Filed 10–1–19; 8:45 am]
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 14, 15, 30, and 52
[FAR Case 2018–005; Docket No. FAR–
2018–0006, Sequence No. 1]
RIN 9000–AN69
Federal Acquisition Regulation:
Modifications to Cost or Pricing Data
Reporting Requirements
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Proposed rule.
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AGENCY:
DoD, GSA, and NASA are
proposing to amend the Federal
Acquisition Regulation (FAR) to
implement a section of the National
SUMMARY:
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Defense Authorization Act for Fiscal
Year 2018 to increase the threshold for
requiring certified cost or pricing data.
DATES: Interested parties should submit
written comments to the Regulatory
Secretariat Division at one of the
addresses shown below on or before
December 2, 2019 to be considered in
the formation of the final rule.
ADDRESSES: Submit comments in
response to FAR Case 2018–005 by any
of the following methods:
• Regulations.gov: https://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
searching for ‘‘FAR Case 2018–005’’.
Select the link ‘‘Comment Now’’ that
corresponds with ‘‘FAR Case 2018–
005’’. Follow the instructions provided
on the screen. Please include your
name, company name (if any), and
‘‘FAR Case 2018–005’’ on your attached
document.
• Mail: General Services
Administration, Regulatory Secretariat
Division (MVCB), ATTN: Lois Mandell,
1800 F Street NW, 2nd Floor,
Washington, DC 20405.
Instructions: Please submit comments
only and cite ‘‘FAR Case 2018–005’’, in
all correspondence related to this case.
All comments received will 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.
Zenaida Delgado, Procurement Analyst,
at 202–969–7207 or zenaida.delgado@
gsa.gov for clarification of content. For
information pertaining to status or
publication schedules, contact the
Regulatory Secretariat Division at 202–
501–4755. Please cite ‘‘FAR Case 2018–
005’’.
SUPPLEMENTARY INFORMATION:
I. Background
Cost or Pricing Data: Truth in
Negotiations, 10 U.S.C. 2306a, and
Required cost or pricing data and
certification, 41 U.S.C. 3502, require
that the Government obtain certified
cost or pricing data for certain contract
actions listed at 15.403–4(a)(1), such as
negotiated contracts, certain
subcontracts and certain contract
modifications. Section 811 of the
National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2018
amends 10 U.S.C. 2306a and 41 U.S.C.
3502 to increase the threshold for
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requesting certified cost or pricing data
from $750,000 to $2 million for
contracts entered into after June 30,
2018.
II. Discussion and Analysis
DoD, GSA and NASA are proposing to
amend the FAR to implement section
811 of the NDAA for FY 2018 to
increase the threshold for requesting
certified cost or pricing data from
$750,000 to $2 million for contracts
entered into after June 30, 2018.
In the case of a change or
modification made to a prime contract
that was entered into before July 1,
2018, the threshold for obtaining
certified cost or pricing data remains
$750,000, with the following exception.
Upon the request of a contractor that
was required to submit certified cost or
pricing data in connection with a prime
contract entered into before July 1, 2018,
the contracting officer shall modify the
contract without requiring consideration
to reflect a $2 million threshold for
obtaining certified cost or pricing data
from subcontractors. Similarly for
sealed bidding, upon request by a
contractor, the contracting officer shall
modify the contract without requiring
consideration to replace the relevant
clause.
The proposed changes to the FAR are
summarized in the following
paragraphs.
A. Subpart 14.2, Solicitation of Bids,
is revised to add the prescription for
Alternate I of the clause at FAR 52.214–
28, Subcontractor Certified Cost or
Pricing Data-Modifications-Sealed
Bidding. The Alternate I will be used in
the circumstances described at FAR
14.201–7(c)(1)(ii).
B. Subpart 15.4, Contract Pricing, is
revised to incorporate the revised
threshold for obtaining certified cost or
pricing data at FAR 15.403–4(a)(1). The
example provided of a price adjustment
is also revised to reflect the increased
threshold. A new paragraph (a)(3) is
added to allow a contractor with a
prime contract entered into before July
1, 2018, to request that the contracting
officer modify the contract without
requiring consideration to reflect a $2
million threshold for obtaining certified
cost or pricing data on subcontracts
entered on and after July 1, 2018, by
replacing the following clauses, as
applicable. The prescriptions at FAR
15.408 will instruct the contracting
officer to:
• Replace FAR clause 52.215–12,
Subcontractor Certified Cost or Pricing
Data, with its Alternate I.
• Replace FAR clause 52.215–13,
Subcontractor Certified Cost or Pricing
E:\FR\FM\02OCP1.SGM
02OCP1
]]>Agencies
[Federal Register Volume 84, Number 191 (Wednesday, October 2, 2019)]
[Proposed Rules]
[Pages 52425-52428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20798]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 12, 13, 15, 16, and 37
[FAR Case 2018-016; Docket No. FAR-2018-0016, Sequence No. 1]
RIN 9000-AN75
Federal Acquisition Regulation: Lowest Price Technically
Acceptable Source Selection Process
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to implement a section of the John S.
McCain National Defense Authorization Act for Fiscal Year 2019, which
specifies the criteria that must be met in order to include lowest
price technically acceptable (LPTA) source selection criteria in a
solicitation; and requires procurements predominantly for the
acquisition of certain services and supplies to avoid the use of LPTA
source selection criteria, to the maximum extent practicable.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat Division at one of the addresses shown below on
or before December 2, 2019 to be considered in the formation of the
final rule.
ADDRESSES: Submit comments in response to FAR Case 2018-016 by any of
the following methods:
Regulations.gov: https://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by searching for ``FAR Case
2018-016''. Select the link ``Comment Now'' that corresponds with ``FAR
Case 2018-016''. Follow the instructions provided on the screen. Please
include your name, company name (if any), and ``FAR Case 2018-016'' on
your attached document.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), ATTN: Lois Mandell, 1800 F Street NW, 2nd
Floor, Washington, DC 20405.
Instructions: Please submit comments only and cite ``FAR Case 2018-
016'', in all correspondence related to this case. All comments
received will 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: Mr. Michael O. Jackson, Procurement
Analyst, at 202-208-4949 or [email protected] for clarification
of content. For information pertaining to status or publication
schedules, contact the Regulatory Secretariat Division at 202-501-4755.
Please cite ``FAR Case 2018-016''.
SUPPLEMENTARY INFORMATION:
I. Background
Section 880 of the John S. McCain National Defense Authorization
Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232, 41 U.S.C. 3701
Note) makes it the policy of the Government to avoid using Lowest Price
Technically Acceptable (LPTA) source selection criteria in
circumstances that would
[[Page 52426]]
deny the Government the benefits of cost and technical tradeoffs in the
source selection process. The section requires that LPTA source
selection criteria be used only when: (1) An executive agency is able
to comprehensively and clearly describe the minimum requirements
expressed in terms of performance objectives, measures, and standards
that will be used to determine acceptability of offers; (2) the
executive agency would realize no, or minimal, value from a contract
proposal exceeding the minimum technical or performance requirements
set forth in the request for proposal; (3) the proposed technical
approaches will require no, or minimal, subjective judgment by the
source selection authority as to the desirability of one offeror's
proposal versus a competing proposal; (4) the executive agency has a
high degree of confidence that a review of technical proposals of
offerors other than the lowest bidder would not result in the
identification of factors that could provide value or benefit to the
executive agency; (5) the contracting officer has included a
justification for the use of an LPTA evaluation methodology in the
contract file; and (6) the executive agency has determined that the
lowest price reflects total costs, including for operations and
support.
Additionally, section 880 requires that the use of LPTA source
selection criteria be avoided, to the maximum extent practicable, in
procurements that are predominantly for the acquisition of: information
technology services; cybersecurity services; systems engineering and
technical assistance services; advanced electronic testing; audit or
audit readiness services; health care services and records;
telecommunications devices and services; or other knowledge-based
professional services; personal protective equipment; or, knowledge-
based training or logistics services in contingency operations or other
operations outside the United States, including in Afghanistan or Iraq.
II. Discussion and Analysis
This proposed rule would require contracting officers to: ensure
procurements meet the criteria of section 880 before including LPTA
source selection criteria in solicitations; document the contract file
with a justification for the use of the LPTA source selection process,
when applicable; and, to avoid, to the maximum extent practicable, the
use of LPTA source selection criteria in procurements that are
predominantly for the supplies and services identified in section 880.
This rule does not address the applicability of section 880 to the
Federal Supply Schedules Program (Schedules Program). GSA will
separately address the applicability of section 880 to the Schedules
Program.
In addition, section 880 does not apply to DoD. Instead, section
813 of the NDAA for FY 2017 (10 U.S.C. 2305 Note) and section 822 of
the NDAA for FY 2018 (10 U.S.C. 2305 Note) establish a similar, but not
the same, set of criteria for DoD procurements to meet in order to use
LPTA source selection criteria in solicitations. These sections are
being implemented in a separate Defense Federal Acquisition Regulation
Supplement case (2018-D010).
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Items, Including Commercially
Available Off-the-Shelf (COTS) Items
This proposed rule does not create any new provisions or clauses,
nor does it change the applicability of any existing provisions or
clauses included in solicitations and contracts valued at or below the
SAT, or for commercial items, including COTS items.
IV. 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.
V. Executive Order 13771
The rule is not subject to E.O. 13771, because this rule is not a
significant regulatory action under E.O. 12866.
VI. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this 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.
However, an initial regulatory flexibility analysis has been performed
and is summarized as follows:
The Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA) are
proposing to revise the Federal Acquisition Regulation (FAR) to:
Specify the criteria that must be met in order to
include lowest price technically acceptable (LPTA) source selection
criteria in a solicitation; and,
Require procurements predominantly for the acquisition
of certain services or supplies to avoid the use of LPTA source
selection criteria, to the maximum extent practicable.
The objective of the rule is to avoid using LPTA source
selection criteria in circumstances that would deny the Government
the benefits of cost and technical tradeoffs in the source selection
process. The legal basis for the rule is section 880 of the John S.
McCain National Defense Authorization Act (NDAA) for Fiscal Year
(FY) 2019 (Pub. L. 115-232). The rule does not cover DoD, which has
already been covered by section 813 of the NDAA for FY 2017 and
section 822 of the NDAA for FY 2018.
DoD, GSA, and NASA do not expect this 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. The
rule primarily affects internal Government requirements
determination decisions, acquisition strategy decisions, and
contract file documentation requirements. The Government does not
collect data on the total number of solicitations issued on an
annual basis that do or do not specify the use of the LPTA source
selection process. However, the Federal Procurement Data System
(FPDS) provides the following information for fiscal year 2018:
Federal competitive contracts and orders awarded using
FAR parts 13, 15, or 16.5 procedures. In FY 2018, the Federal
Government, excluding DoD, awarded approximately 82,337 new
contracts and orders using the competitive procedures of FAR 13, 15,
or 16.5. This data excludes acquisitions for the supply/service
categories identified in section 880(c) of the NDAA for FY 2019. Of
the 82,337 contracts and orders, approximately 69 percent (or 56,622
contracts and orders) were awarded to approximately 27,029 unique
small businesses. It is important to note that FPDS does not collect
data on solicitations, but does collect information on competitively
awarded contracts using various FAR procedures. Therefore, this data
represents contracts that were awarded using LPTA and tradeoff
source selection procedures.
Federal competitive contracts and orders awarded for
certain services and supplies. In FY 2018, the Federal Government,
excluding DoD, awarded approximately 22,581 new contracts and orders
potentially for the supplies and services identified in section
880(c) of the NDAA for FY 2019 using the competitive procedures of
FAR parts 13, 15, and 16.5, of which approximately 63 percent (or
14,285 contracts and orders) were awarded to approximately 10,129
unique small businesses.
The proposed rule does not impose any Paperwork Reduction Act
reporting or
[[Page 52427]]
recordkeeping requirements on any small entities. The rule may
impact some small businesses. Some offerors may need to change the
structure of their quotes or offers to conform to instructions and
corresponding evaluation criteria in solicitations that use tradeoff
source selection criteria, as LPTA source selection criteria is now
unavailable for use in some circumstances. This impact, which
represents the incremental difference between preparing a noncomplex
proposal to be evaluated using LPTA criteria and preparing the
additional information necessary to evaluate a proposal using
tradeoff criteria, is expected to be minimal.
The proposed rule does not duplicate, overlap, or conflict with
any other Federal rules.
There are no known significant alternative approaches to the
proposed rule that would meet the proposed objectives.
The Regulatory Secretariat has submitted a copy of the IRFA to the
Chief Counsel for Advocacy of the Small Business Administration. A copy
of the IRFA may be obtained from the Regulatory Secretariat. DoD, GSA,
and NASA invite comments from small business concerns and other
interested parties on the expected impact of this rule on small
entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by this rule
consistent with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAR Case 2018-016) in
correspondence.
VII. 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 12, 13, 15, 16, and 37
Government procurement.
William F. Clark,
Director,
Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR parts
12, 13, 15, 16 and 37 as set forth below:
0
1. The authority citation for 48 CFR parts 12, 13, 15, 16 and 37
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 12--ACQUISITION OF COMMERCIAL ITEMS
0
2. Revise section 12.203 by redesignating the text as paragraph (a) and
adding paragraph (b) to read as follows:
12.203 Procedures for solicitation, evaluation, and award.
* * * * *
(b) Contracting officers shall ensure the criteria at 15.101-2(c)
are met when using the lowest price technically acceptable source
selection process.
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
0
3. Amend section 13.106-1 by adding paragraphs (a)(2)(i) and (a)(2)(ii)
to read as follows:
13.106-1 Soliciting competition.
(a) * * *
(2) * * *
(i) Except for DoD, contracting officers shall ensure the criteria
at 15.101-2(c)(1)-(5) are met when using the lowest price technically
acceptable source selection process.
(ii) Except for DoD, avoid using the lowest price technically
acceptable source selection process to acquire certain supplies and
services in accordance with 15.101-2(d).
* * * * *
0
4. Amend section 13.106-3 by--
0
a. In paragraph (b)(3), removing ``statements--'' and adding
``statements, when applicable--'' in its place;
0
b. In paragraph (b)(3)(i), removing ``; or'' and adding ``;'' in its
place;
0
c. In paragraph (b)(3)(ii), removing ``.'' and adding ``; and''
0
d. Adding paragraph (b)(3)(iii).
The addition reads as follows:
13.106-3 Award and documentation.
* * * * *
(b) * * *
(3) * * *
(iii) Except for DoD, when using lowest price technically
acceptable source selection process, justifying the use of such
process.
* * * * *
PART 15--CONTRACTING BY NEGOTIATION
0
5. Amend section 15.101-2 by adding paragraphs (c) and (d) to read as
follows:
15.101-2 Lowest price technically acceptable source selection
process.
* * * * *
(c) Except for DoD, in accordance with section 880 of the National
Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232, 41
U.S.C. 3701 Note), the lowest price technically acceptable source
selection process shall only be used when--
(1) The agency can comprehensively and clearly describe the minimum
requirements in terms of performance objectives, measures, and
standards that will be used to determine the acceptability of offers;
(2) The agency would realize no, or minimal, value from a proposal
that exceeds the minimum technical or performance requirements;
(3) The agency believes the technical proposals will require no, or
minimal, subjective judgment by the source selection authority as to
the desirability of one offeror's proposal versus a competing proposal;
(4) The agency has a high degree of confidence that reviewing the
technical proposals of all offerors would not result in the
identification of characteristics that could provide value or benefit
to the agency;
(5) The agency determined that the lowest price reflects the total
cost, including operation and support, of the product(s) or service(s)
being acquired; and
(6) The contracting officer documents the contract file describing
the circumstances that justify the use of the lowest price technically
acceptable source selection process.
(d) Except for DoD, in accordance with section 880 of the National
Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232, 41
U.S.C. 3701 Note), contracting officers shall avoid, to the maximum
extent practicable, using the lowest price technically acceptable
source selection process in the case of a procurement that is
predominantly for the acquisition of--
(1) Information technology services, cybersecurity services,
systems engineering and technical assistance services, advanced
electronic testing, audit or audit readiness services, health care
services and records, telecommunications devices and services, or other
knowledge-based professional services;
(2) Personal protective equipment; or
(3) Knowledge-based training or logistics services in contingency
operations or other operations outside the United States, including in
Afghanistan or Iraq.
PART 16--TYPES OF CONTRACTS
0
6. Amend section 16.505 by--
0
a. Removing from the end of paragraph (b)(1)(ii) ``must--'' and adding
``shall--'' in its place;
0
b. Removing from paragraph (b)(1)(ii)(D) ``contract; and'' and adding
``contract;'' in its place;
0
c. Removing from paragraph (b)(1)(ii)(E) ``decision.'' and adding
``decision;'' in its place;
0
d. Adding paragraphs (b)(1)(ii)(F) and (b)(1)(ii)(G); and
[[Page 52428]]
0
e. Adding paragraph (b)(7)(iii).
The additions read as follows:
16.505 Ordering.
* * * * *
(b) * * *
(1) * * *
(ii) * * *
(F) Except for DoD, ensure the criteria at 15.101-2(c)(1)-(5) are
met when using the lowest price technically acceptable source selection
process; and
(G) Except for DoD, avoid using the lowest price technically
acceptable source selection process to acquire certain supplies and
services in accordance with 15.101-2(d).
* * * * *
(7) * * *
(iii) Except for DoD, the contracting officer shall document in the
contract file a justification for use of the lowest price technically
acceptable source selection process, when applicable.
* * * * *
PART 37--SERVICE CONTRACTING
0
7. Amend section 37.102 by adding paragraph (j) to read as follows:
37.102 Policy.
* * * * *
(j) Except for DoD, see 15.101-2(d) for limitations on the use of
the lowest price technically acceptable source selection process to
acquire certain services.
[FR Doc. 2019-20798 Filed 10-1-19; 8:45 am]
BILLING CODE 6820-EP-P
