Defense Federal Acquisition Regulation Supplement: Use of Supplier Performance Risk System (SPRS) Assessments (DFARS Case 2019-D009), 53748-53751 [2020-18645]
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53748
Federal Register / Vol. 85, No. 169 / Monday, August 31, 2020 / Proposed Rules
receiving the appeal, an applicant may
electronically submit a withdrawal of
the pending appeal simultaneously to
the recipient, the FEMA Regional
Administrator, and the CBCA. The
applicant may then submit a request for
arbitration within 30 calendar days from
the date of the withdrawal of the
pending appeal.
(C) Content of request. The request for
arbitration must contain a written
statement that specifies the amount in
dispute, all documentation supporting
the position of the applicant, the
disaster number, and the name and
address of the applicant’s authorized
representative or counsel.
(iv) Expenses. Expenses for each party
will be paid by the party who incurred
the expense.
(v) Guidance. FEMA may issue
separate guidance as necessary to
supplement paragraph (b)(3) of this
section.
(c) Finality of decision. A FEMA final
agency determination or a decision of
the Assistant Administrator for the
Recovery Directorate on a second appeal
constitute a final decision of FEMA. In
the alternative, a decision of the
majority of the CBCA panel constitutes
a final decision, binding on all parties.
See 48 CFR 6106.613. Final decisions
are not subject to further administrative
review.
Pete Gaynor,
Administrator, Federal Emergency
Management Agency.
[FR Doc. 2020–16040 Filed 8–28–20; 8:45 am]
BILLING CODE 9111–19–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 204, 209, 212, 213, and
252
[Docket 2020–0027]
RIN 0750–AK44
khammond on DSKJM1Z7X2PROD with PROPOSALS
Defense Federal Acquisition
Regulation Supplement: Use of
Supplier Performance Risk System
(SPRS) Assessments (DFARS Case
2019–D009)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Proposed rule.
AGENCY:
DoD is proposing to amend
the Defense Federal Acquisition
Regulation Supplement (DFARS) to
update the policy and procedures for
SUMMARY:
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use of the Supplier Performance Risk
System.
DATES: Comments on the proposed rule
should be submitted in writing to the
address shown below on or before
October 30, 2020, to be considered in
the formation of a final rule.
ADDRESSES: Submit comments
identified by DFARS Case 2019–D009,
using any of the following methods:
Æ Regulations.gov: https://
www.regulations.gov. Search for
‘‘DFARS Case 2019–D009.’’ Select
‘‘Comment Now’’ and follow the
instructions provided to submit a
comment. Please include ‘‘DFARS Case
2019–D009’’ on any attached document.
Æ Email: osd.dfars@mail.mil. Include
DFARS Case 2019–D009 in the subject
line of the message.
Æ Fax: 571–372–6094.
Æ Mail: Defense Acquisition
Regulations System, Attn: Heather
Kitchens, OUSD(A&S)DPC/DARS, Room
3B941, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Comments received generally will be
posted without change to https://
www.regulations.gov, including any
personal 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.
Heather Kitchens, telephone 571–372–
6095.
SUPPLEMENTARY INFORMATION:
I. Background
The Supplier Performance Risk
System (SPRS) is a DoD enterprise
application that retrieves quality and
delivery data from Government systems
to calculate ‘‘on time’’ delivery scores
and quality classifications. Contracting
officers will use the overall risk
assessment generated by the SPRS
module to evaluate quotes and offers
received under all solicitations for
supplies and services, including
solicitations using part 12 procedures
for the acquisition of commercial items.
The system generates three risk
assessments using the SPRS Evaluation
Criteria and calculations at https://
www.sprs.csd.disa.mil/pdf/SPRS_
DataEvaluationCriteria.pdf. These risk
assessments are described as follows:
• Item Risk. SPRS collects data to
generate the probability that a product
or service, based on intended use, will
introduce counterfeit or nonconforming
material entering the DoD supply chain,
which can result in significant
personnel safety issues, mission
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degradation, or monetary loss. SPRS
‘‘flags’’ items identified by Government
sources as ‘‘high risk’’ and provides
suggested mitigations, or as ‘‘not high
risk’’.
• Price Risk. SPRS collects historical
pricing data from Government sources
and applies a common statistical
method to calculate the average price
paid for a product or services,
generating a price range that contracting
officers can use in the evaluation of fair
and reasonable pricing. Price Risk
determines whether ‘‘a proposed price
is consistent with historical prices paid
for that item and is depicted by high,
low, or within range’’.
• Supplier Risk. SPRS calculates a
supplier risk score, for contracting
officers to compare competing
suppliers. This score includes three
years of relevant supplier performance
information from existing Government
data sources.
II. Discussion and Analysis
The proposed rule amends the DFARS
to: (1) Move coverage of the Supplier
Performance Risk System (SPRS) from
part 213, Simplified Acquisition
Procedures, to a new subpart 204.7X,
Supplier Performance Risk System; and
(2) replace DFARS clause 252.213–7000,
Notice to Prospective Suppliers on Use
of Supplier Performance Risk System in
Past Performance Evaluations, with
DFARS provision 252.204–70XX, Notice
to Prospective Suppliers on Use of
Supplier Performance Risk System in
Performance Evaluations, to enhance
the use of SPRS in the evaluation of a
supplier’s performance through the
introduction of SPRS system-generated
item, price, and supplier risk
assessments.
In the new subpart, at 204.7X01,
definitions are added for item, price,
and supplier risk. Section 204.7X02,
Applicability, provides that the use of
SPRS is required to be used to evaluate
quotes and offers in response to all
solicitations for supplies and services,
including solicitations using FAR part
12 procedures for the acquisition of
commercial items. Language is added at
204.7X03, Procedures, to provide
guidance to the contracting officer on
how SPRS risk assessments shall be
considered during award decisions, how
to respond to risk assessment ratings,
and what mitigating strategies shall be
considered for risk assessments prior to
award. A prescription for use of the new
solicitation provision at 252.204–70XX
is added at 204.7X04.
The proposed rule amends the DFARS
by requiring contracting officers to use
the supplier risk assessments available
in SPRS as a factor in determining
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responsibility at DFARS 209.105–1, as
required by 204.7X03(c)(1). The
supplier risk assessment reduces supply
chain risk as it highlights for the
contracting officer the probability that
an award made to a supplier may
subject the procurement to the risk of
unsuccessful performance or to supply
chain risk.
At DFARS 212.301(f), the newly
proposed provision, 252.204–70XX,
Notice to Prospective Suppliers on Use
of the Supplier Performance Risk
System in Performance Evaluations, is
added to the list of clauses and
provisions applicable to FAR part 12
acquisitions. DFARS provision 252.213–
7000, which is superseded by 252.204–
70XX, is removed from the list.
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DFARS 213.106–2, Evaluation of
quotations or offers, is amended to
provide a cross-reference to subpart
204.7X, and expanded to require that
SPRS data is used for evaluation of a
supplier quote or offer for all
solicitations for supplies and services,
including solicitations using FAR part
12 procedures for the acquisition of
commercial items. Previously, use of
SPRS was limited to competitive
acquisitions using simplified
acquisition procedures that were valued
at less than or equal to $1 million under
the authority at FAR subpart 13.5. The
language is amended to require the
contracting officer to evaluate suppliers
using all SPRS data, not just past
performance data. The text is also
amended to require that the basis for
award will be based on an overall risk
assessment, if applicable. A crossreference is added to see 204.7X04 for
use of the 252.204–70XX provision,
while DFARS 213.106–2–70 is removed,
since DFARS provision 252.213–7000 is
being removed.
The new solicitation provision at
DFARS 252.204–70XX, Notice to
Prospective Suppliers on Use of
Supplier Performance Risk System in
Performance Evaluations, provides the
definitions of the SPRS risk assessments
for item, price, and supplier risk;
provides a notice that SPRS will be used
in the evaluation of suppliers’
performance and adds a link to the
SPRS web page; addresses how the
SPRS risk assessments will be used by
the contracting officer to evaluate quotes
or offers received in response to the
solicitation; and provides links to the
SPRS User’s Guide and SPRS evaluation
criteria.
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III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold and for Commercial Items,
Including Commercially Available Offthe-Shelf Items
This rule is applicable to all
solicitations for supplies and services,
including solicitations using FAR part
12 procedures for the acquisition of
commercial items. The rule proposes to
add DFARS provision 252.204–70XX,
Notice to Prospective Suppliers on Use
of Supplier Performance Risk System in
Performance Evaluations, to replace
DFARS provision 252.213–7000, Notice
to Prospective Suppliers on Use of
Supplier Performance Risk System in
Past Performance Evaluations. The new
provision provides notice to potential
offerors that the overall risk assessment
generated by the SPRS module will be
used to evaluate quotes or offers
received in response to the solicitation.
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
This 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
The DoD does not expect this rule to
have an significant economic impact on
a substantial number of small entities
within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq.,
because the proposed changes made to
existing DFARS text and provision
merely reflect existing DoD practice,
procedures, and systems used by DoD,
i.e., the Supplier Performance Risk
System in Performance Evaluations
(SPRS). However, an initial regulatory
flexibility analysis has been performed
and is summarized as follows:
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53749
DoD is proposing to revise the
Defense Federal Acquisition Regulation
Supplement to incorporate the
expanded capabilities of SPRS, made
possible by recent technical
enhancements. SPRS is a DoD enterprise
application that retrieves quality and
delivery information performance data
obtained from Government reporting
systems. The system provides three risk
assessments for contracting officer use
in evaluations: Item, price, and supplier
risk assessments.
The objective of the proposed rule is
to notify offerors that SPRS collects
performance data from a variety of
Government sources on awarded
contracts, to develop item, price, and
supplier risk assessments for contracting
officer use during evaluation of
quotations or offers. The proposed rule
also requires contracting officers to use
the supplier risk assessment as a factor
in the evaluation of contractor
responsibility. The legal basis for the
rule is covered under 41 U.S.C 1707,
Office of Federal Procurement Policy
statute.
The Federal Procurement Data System
indicates that in FY17–FY19, DoD
awarded 198,038 contracts (both
products and services), of which
123,217 were awarded to small
businesses (approximately 62%). DoD
does not expect small entities will be
materially affected by this rule.
The rule does not impose any
additional reporting, recordkeeping, and
other compliance requirements.
This rule does not duplicate, overlap,
or conflict with any other Federal rules.
There are no known significant
alternatives to the rule.
DoD invites comments from small
business concerns and other interested
parties on the expected impact of this
rule on small entities. DoD will also
consider comments from small entities
concerning the existing regulations in
subparts affected by this rule in
accordance with 5 U.S.C. 610. Interested
parties must submit such comments
separately and should cite 5 U.S.C 610
(DFARS Case 2019–D009), in
correspondence.
IV. 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).
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List of Subjects in 48 CFR Parts 204,
209, 212, 213, and 252
Government procurement.
www.sprs.csd.disa.mil, and the SPRS
user’s guides are available at https://
www.sprs.csd.disa.mil/reference.htmf.
(2) See risk mitigation strategies in
paragraphs (a)(2) and (b)(2) of this
section.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense
Acquisition Regulations System.
204.7X03
204.7X04
Therefore, 48 CFR parts 204, 209, 212,
213, and 252 are proposed to be
amended as follows:
■ 1. The authority citation for 48 CFR
parts 204, 209, 212, 213, and 252
continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
PART 204—ADMINISTRATIVE AND
INFORMATION MATTERS
2. Add subpart 204.7X to read as
follows:
■
SUBPART 204.7X—Supplier Performance
Risk System
Sec.
204.7X00 Scope of subpart.
204.7X01 Definitions.
204.7X02 Applicability.
204.7X03 Procedures.
204.7X04 Solicitation provision.
SUBPART 204.7X—Supplier Performance
Risk System
204.7X00
Scope of subpart.
This subpart provides policies and
procedures for use of the Supplier
Performance Risk System (SPRS) risk
assessments in the evaluation of a
supplier’s quotation or offer.
204.7X01
Definitions.
As used in this subpart—
Item risk means the probability that a
product or service, based on intended
use, will introduce performance risk
resulting in safety issues, mission
degradation, or monetary loss.
Price risk means the measure of
whether a proposed price for a product
or service is consistent with historical
prices paid for that item or service.
Supplier risk means the probability
that an award made to a supplier may
subject the procurement to the risk of
unsuccessful performance or to supply
chain risk (see 239.7301).
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204.7X02
Applicability.
Use of SPRS assessments is required
for acquisitions using FAR part 13
simplified acquisition procedures,
including solicitations for supplies and
services using FAR part 12 procedures
for the acquisition of commercial items.
SPRS retrieves item, price, quality,
delivery, and supplier information on
contracts from Government reporting
systems in order to develop overall risk
assessments of suppliers. SPRS is
available at https://
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Procedures.
The contracting officer shall ensure
the basis for award includes an
evaluation of each supplier’s overall risk
assessment in SPRS, if applicable.
Suppliers without an overall risk
assessment in SPRS shall not be
evaluated favorably or unfavorably
under the risk assessment factor.
Contracting officers shall use
information available in SPRS on item
risk, price risk, and supplier risk as
follows:
(a) Item risk. (1) Item risk shall be
considered to determine whether the
procurement of products or services
represents a high performance risk to
the Government. Item risk is displayed
in SPRS with the reason(s) an item is
identified as high risk.
(2) Before issuing a solicitation and
when evaluating quotations or offers,
the contracting officer shall access the
SPRS item risk report and review any
warnings provided. If there are item risk
warnings, the contracting officer shall
consider strategies to mitigate risk, such
as the following:
(i) Consulting with the program office.
(ii) Including mitigating requirements
in the statement of work, as provided by
the requiring activity.
(iii) Applying risk mitigation
strategies, including FAR and DFARS
clauses identified in the SPRS
application, as appropriate.
(b) Price risk. (1) Price ratings shall be
considered as part of determining if a
proposed price is consistent with
historical prices paid for an item or
otherwise creates a risk to the
Government.
(2) The contracting officer shall
consider strategies to mitigate price risk,
such as the following—
(i) Not awarding to suppliers with
high price ratings unless there is a way
to justify the price through price
analysis;
(ii) Utilizing appropriate price
negotiation techniques and procedures;
and
(iii) Using price reasonableness or
price realism techniques at FAR 13.106
or FAR 15.4 when making award
decisions.
(c) Supplier risk. (1) The contracting
officers shall consider supplier risk
during the evaluation of a supplier’s
performance history, to assess the risk of
unsuccessful performance, in award
decisions. Supplier risk assessments in
SPRS include quality, delivery, and
other supplier performance information.
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Solicitation provision.
Use the provision at 252.204–70XX,
Notice to Prospective Suppliers on the
Use of the Supplier Performance Risk
System in Performance Evaluations, in
solicitations for supplies and services,
including solicitations using FAR part
12 procedures for the acquisition of
commercial items.
PART 209—CONTRACTOR
QUALIFICATIONS
3. Amend section 209.105–1 by
adding paragraph (3) to read as follows:
■
209.105–1
Obtaining information.
*
*
*
*
*
(3) Contracting officers shall use the
supplier risk assessment available in the
Supplier Performance Risk System
(SPRS) at https://www.sprs.csd.disa.mil
as a factor in determining responsibility.
See 204.7X03(c)(1).
PART 212—ACQUISITION OF
COMMERCIAL ITEMS
4. Amend section 212.301 by—
a. Adding paragraph (f)(ii)(K);
b. Removing paragraph (f)(v); and
c. Redesignating paragraphs (f)(vi)
through (xix) as paragraphs (f)(v)
through (xviii).
The addition reads as follows:
■
■
■
■
212.301 Solicitation provisions and
contract clauses for the acquisition of
commercial items.
*
*
*
*
*
(f) * * *
(ii) * * *
(K) Use the provision at 252.204–
70XX, Notice to Prospective Suppliers
on Use of the Supplier Performance Risk
System in Performance Evaluations, as
prescribed in 204.7X04.
*
*
*
*
*
PART 213—SIMPLIFIED ACQUISITION
PROCEDURES
5. Revise section 213.106–2 to read as
follows:
■
213.106–2
offers.
Evaluation of quotations or
(b)(i) For solicitations for supplies and
services using FAR part 13 simplified
acquisition procedures, including
solicitations using FAR part 12
procedures for the acquisition of
commercial items, the contracting
officer shall ensure—
(A) Supplier Performance Risk System
(SPRS) assessments are used for
evaluation of a supplier’s quotation or
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offer. See subpart 204.7X. SPRS is
available at https://
www.sprs.csd.disa.mil, and the SPRS
user’s guides are available at https://
www.sprs.csd.disa.mil/reference.htm;
(B) The basis for award shall include
an evaluation of each supplier’s overall
risk assessment in SPRS, if applicable;
and
(C) Suppliers without a risk
assessment in SPRS are not evaluated
favorably or unfavorably under the risk
assessment factor.
(D) See 204.7X04 for use of the
provision at 252.204–70XX, Notice to
Prospective Suppliers on the Use of the
Supplier Performance Risk System in
Performance Evaluations.
As prescribed in 204.7X04, use the
following provision: NOTICE TO
PROSPECTIVE SUPPLIERS ON USE OF
THE SUPPLIER PERFORMANCE RISK
SYSTEM IN PERFORMANCE
EVALUATIONS (DATE)
■
(a) Definitions. As used in this provision—
Item risk means the probability that a
product or service, based on intended use,
will introduce performance risk resulting in
safety issues, mission degradation, or
monetary loss.
Price risk means a measure of whether a
proposed price for a product or service is
consistent with historical prices paid for that
item or service.
Supplier risk means the probability that an
award made to a supplier may subject the
procurement to the risk of unsuccessful
performance or to supply chain risk (see
Defense Federal Acquisition Regulation
Supplement 239.7301).
(b) The Supplier Performance Risk System
(SPRS), available at https://
www.sprs.csd.disa.mil, will be used in the
evaluation of suppliers’ performance for
acquisitions using Federal Acquisition
Regulation (FAR) part 13 simplified
acquisition procedures, including
solicitations using FAR part 12 procedures
for the acquisition of commercial items.
SPRS retrieves item, price, quality, delivery,
and supplier information on contracts from
Government reporting systems in order to
develop overall risk assessments.
(c) SPRS risk assessments will be used by
the Contracting Officer during the evaluation
of quotations or offers received in response
to this solicitation as follows:
(1) Item risk shall be considered to
determine whether the procurement
Defense Acquisition Regulations
System
Comments on the proposed rule
should be submitted in writing to the
address shown below on or before
October 30, 2020, to be considered in
the formation of a final rule.
ADDRESSES: Submit comments
identified by DFARS Case 2020–D010,
using any of the following methods:
Æ Regulations.gov: https://
www.regulations.gov. Search for
‘‘DFARS Case 2020–D010’’ under the
heading ‘‘Enter keyword or ID’’ and
selecting ‘‘Search.’’ Select ‘‘Comment
Now’’ and follow the instructions
provided to submit a comment. Please
include ‘‘DFARS Case 2020–D010’’ on
any attached documents.
Æ Email: osd.dfars@mail.mil. Include
DFARS Case 2020–D010 in the subject
line of the message.
Æ Fax: 571–372–6094.
Æ Mail: Defense Acquisition
Regulations System, Attn: Ms. Kimberly
Bass, OUSD(A&S)DPC/DARS, Room
3B941, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Comments received generally will be
posted without change to https://
www.regulations.gov, including any
personal 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.
Kimberly Bass, telephone 571–372–
6174.
48 CFR Parts 212, 225, and 252
SUPPLEMENTARY INFORMATION:
[Docket DARS–2020–0031]
I. Background
213.106–2–70
■
[Removed]
6. Remove section 213.106–2–70.
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
7. Add section 252.204–70XX to read
as follows:
■
252.204–70XX Notice to Prospective
Suppliers on Use of the Supplier
Performance Risk System in Performance
Evaluations.
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represents a high performance risk to the
Government.
(2) Price risk shall be considered as part of
determining if a proposed price is consistent
with historical prices paid for an item or
otherwise creates a risk to the Government.
(3) Supplier risk, including but not limited
to quality and delivery, shall be considered
during the evaluation of a supplier’s
performance history to assess the risk of
unsuccessful performance and supply chain
risk.
(d) SPRS risk assessments are generated
daily for each supplier. Suppliers are able to
access their risk assessment by following the
access instructions in the SPRS user’s guide
available at https://www.sprs.csd.disa.mil/
reference.htm. Suppliers are granted access
to SPRS for their own risk assessment
classifications only. SPRS reporting
procedures and risk assessment methodology
are detailed in the SPRS user’s guide. The
method to challenge a rating generated by
SPRS is also provided in the user’s guide.
SPRS evaluation criteria are available from
the reference at https://
www.sprs.csd.disa.mil/pdf/SPRS_
DataEvaluationCriteria.pdf.
(e) The Contracting Officer may consider
any other available and relevant information
when evaluating a quotation or an offer.
(End of provision)
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252.213–7000
[Removed]
8. Remove section 252.213–7000.
[FR Doc. 2020–18645 Filed 8–28–20; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF DEFENSE
RIN 0750–AK97
Defense Federal Acquisition
Regulation Supplement: Prohibition on
Contracting With Persons That Have
Business Operations With the Maduro
Regime (DFARS Case 2020–D010)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Proposed rule.
AGENCY:
DoD is proposing to amend
the Defense Federal Acquisition
Regulation Supplement (DFARS) to
implement a statute that prohibits the
Department of Defense from entering
into contracts for the procurement of
goods and services with any person that
has business operations with an
authority of the government of
Venezuela that is not recognized as the
legitimate government of Venezuela by
the United States Government.
SUMMARY:
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DATES:
DoD is proposing to amend the
DFARS, to implement section 890 of the
National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2020 (Pub.
L. 116–92). Section 890 prohibits
contracts for the procurement of goods
and services with any person that has
business operations with an authority of
the government of Venezuela that is not
recognized as the legitimate government
of Venezuela by the United States
Government, subject to exceptions.
II. Discussion and Analysis
This rule proposes to add section
DFARS 225.7019, Prohibition on
Contracting with the Maduro Regime.
This section provides to contracting
officers a new solicitation provision and
contract clause for use in solicitations
and contracts, including solicitations
and contracts using FAR part 12
procedures for the acquisition of
commercial items, unless an exception
applies.
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]]>Agencies
[Federal Register Volume 85, Number 169 (Monday, August 31, 2020)]
[Proposed Rules]
[Pages 53748-53751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18645]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 204, 209, 212, 213, and 252
[Docket 2020-0027]
RIN 0750-AK44
Defense Federal Acquisition Regulation Supplement: Use of
Supplier Performance Risk System (SPRS) Assessments (DFARS Case 2019-
D009)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Proposed rule.
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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to update the policy and procedures for
use of the Supplier Performance Risk System.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before October 30, 2020, to be considered
in the formation of a final rule.
ADDRESSES: Submit comments identified by DFARS Case 2019-D009, using
any of the following methods:
[cir] Regulations.gov: https://www.regulations.gov. Search for
``DFARS Case 2019-D009.'' Select ``Comment Now'' and follow the
instructions provided to submit a comment. Please include ``DFARS Case
2019-D009'' on any attached document.
[cir] Email: [email protected]. Include DFARS Case 2019-D009 in
the subject line of the message.
[cir] Fax: 571-372-6094.
[cir] Mail: Defense Acquisition Regulations System, Attn: Heather
Kitchens, OUSD(A&S)DPC/DARS, Room 3B941, 3060 Defense Pentagon,
Washington, DC 20301-3060.
Comments received generally will be posted without change to https://www.regulations.gov, including any personal 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. Heather Kitchens, telephone 571-
372-6095.
SUPPLEMENTARY INFORMATION:
I. Background
The Supplier Performance Risk System (SPRS) is a DoD enterprise
application that retrieves quality and delivery data from Government
systems to calculate ``on time'' delivery scores and quality
classifications. Contracting officers will use the overall risk
assessment generated by the SPRS module to evaluate quotes and offers
received under all solicitations for supplies and services, including
solicitations using part 12 procedures for the acquisition of
commercial items. The system generates three risk assessments using the
SPRS Evaluation Criteria and calculations at https://www.sprs.csd.disa.mil/pdf/SPRS_DataEvaluationCriteria.pdf. These risk
assessments are described as follows:
Item Risk. SPRS collects data to generate the probability
that a product or service, based on intended use, will introduce
counterfeit or nonconforming material entering the DoD supply chain,
which can result in significant personnel safety issues, mission
degradation, or monetary loss. SPRS ``flags'' items identified by
Government sources as ``high risk'' and provides suggested mitigations,
or as ``not high risk''.
Price Risk. SPRS collects historical pricing data from
Government sources and applies a common statistical method to calculate
the average price paid for a product or services, generating a price
range that contracting officers can use in the evaluation of fair and
reasonable pricing. Price Risk determines whether ``a proposed price is
consistent with historical prices paid for that item and is depicted by
high, low, or within range''.
Supplier Risk. SPRS calculates a supplier risk score, for
contracting officers to compare competing suppliers. This score
includes three years of relevant supplier performance information from
existing Government data sources.
II. Discussion and Analysis
The proposed rule amends the DFARS to: (1) Move coverage of the
Supplier Performance Risk System (SPRS) from part 213, Simplified
Acquisition Procedures, to a new subpart 204.7X, Supplier Performance
Risk System; and (2) replace DFARS clause 252.213-7000, Notice to
Prospective Suppliers on Use of Supplier Performance Risk System in
Past Performance Evaluations, with DFARS provision 252.204-70XX, Notice
to Prospective Suppliers on Use of Supplier Performance Risk System in
Performance Evaluations, to enhance the use of SPRS in the evaluation
of a supplier's performance through the introduction of SPRS system-
generated item, price, and supplier risk assessments.
In the new subpart, at 204.7X01, definitions are added for item,
price, and supplier risk. Section 204.7X02, Applicability, provides
that the use of SPRS is required to be used to evaluate quotes and
offers in response to all solicitations for supplies and services,
including solicitations using FAR part 12 procedures for the
acquisition of commercial items. Language is added at 204.7X03,
Procedures, to provide guidance to the contracting officer on how SPRS
risk assessments shall be considered during award decisions, how to
respond to risk assessment ratings, and what mitigating strategies
shall be considered for risk assessments prior to award. A prescription
for use of the new solicitation provision at 252.204-70XX is added at
204.7X04.
The proposed rule amends the DFARS by requiring contracting
officers to use the supplier risk assessments available in SPRS as a
factor in determining
[[Page 53749]]
responsibility at DFARS 209.105-1, as required by 204.7X03(c)(1). The
supplier risk assessment reduces supply chain risk as it highlights for
the contracting officer the probability that an award made to a
supplier may subject the procurement to the risk of unsuccessful
performance or to supply chain risk.
At DFARS 212.301(f), the newly proposed provision, 252.204-70XX,
Notice to Prospective Suppliers on Use of the Supplier Performance Risk
System in Performance Evaluations, is added to the list of clauses and
provisions applicable to FAR part 12 acquisitions. DFARS provision
252.213-7000, which is superseded by 252.204-70XX, is removed from the
list.
DFARS 213.106-2, Evaluation of quotations or offers, is amended to
provide a cross-reference to subpart 204.7X, and expanded to require
that SPRS data is used for evaluation of a supplier quote or offer for
all solicitations for supplies and services, including solicitations
using FAR part 12 procedures for the acquisition of commercial items.
Previously, use of SPRS was limited to competitive acquisitions using
simplified acquisition procedures that were valued at less than or
equal to $1 million under the authority at FAR subpart 13.5. The
language is amended to require the contracting officer to evaluate
suppliers using all SPRS data, not just past performance data. The text
is also amended to require that the basis for award will be based on an
overall risk assessment, if applicable. A cross-reference is added to
see 204.7X04 for use of the 252.204-70XX provision, while DFARS
213.106-2-70 is removed, since DFARS provision 252.213-7000 is being
removed.
The new solicitation provision at DFARS 252.204-70XX, Notice to
Prospective Suppliers on Use of Supplier Performance Risk System in
Performance Evaluations, provides the definitions of the SPRS risk
assessments for item, price, and supplier risk; provides a notice that
SPRS will be used in the evaluation of suppliers' performance and adds
a link to the SPRS web page; addresses how the SPRS risk assessments
will be used by the contracting officer to evaluate quotes or offers
received in response to the solicitation; and provides links to the
SPRS User's Guide and SPRS evaluation criteria.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
This rule is applicable to all solicitations for supplies and
services, including solicitations using FAR part 12 procedures for the
acquisition of commercial items. The rule proposes to add DFARS
provision 252.204-70XX, Notice to Prospective Suppliers on Use of
Supplier Performance Risk System in Performance Evaluations, to replace
DFARS provision 252.213-7000, Notice to Prospective Suppliers on Use of
Supplier Performance Risk System in Past Performance Evaluations. The
new provision provides notice to potential offerors that the overall
risk assessment generated by the SPRS module will be used to evaluate
quotes or offers received in response to the solicitation.
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
This 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
The DoD does not expect this rule to have an significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the
proposed changes made to existing DFARS text and provision merely
reflect existing DoD practice, procedures, and systems used by DoD,
i.e., the Supplier Performance Risk System in Performance Evaluations
(SPRS). However, an initial regulatory flexibility analysis has been
performed and is summarized as follows:
DoD is proposing to revise the Defense Federal Acquisition
Regulation Supplement to incorporate the expanded capabilities of SPRS,
made possible by recent technical enhancements. SPRS is a DoD
enterprise application that retrieves quality and delivery information
performance data obtained from Government reporting systems. The system
provides three risk assessments for contracting officer use in
evaluations: Item, price, and supplier risk assessments.
The objective of the proposed rule is to notify offerors that SPRS
collects performance data from a variety of Government sources on
awarded contracts, to develop item, price, and supplier risk
assessments for contracting officer use during evaluation of quotations
or offers. The proposed rule also requires contracting officers to use
the supplier risk assessment as a factor in the evaluation of
contractor responsibility. The legal basis for the rule is covered
under 41 U.S.C 1707, Office of Federal Procurement Policy statute.
The Federal Procurement Data System indicates that in FY17-FY19,
DoD awarded 198,038 contracts (both products and services), of which
123,217 were awarded to small businesses (approximately 62%). DoD does
not expect small entities will be materially affected by this rule.
The rule does not impose any additional reporting, recordkeeping,
and other compliance requirements.
This rule does not duplicate, overlap, or conflict with any other
Federal rules.
There are no known significant alternatives to the rule.
DoD invites comments from small business concerns and other
interested parties on the expected impact of this rule on small
entities. DoD will also consider comments from small entities
concerning the existing regulations in subparts affected by this rule
in accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C 610 (DFARS Case 2019-D009),
in correspondence.
IV. 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).
[[Page 53750]]
List of Subjects in 48 CFR Parts 204, 209, 212, 213, and 252
Government procurement.
Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 204, 209, 212, 213, and 252 are proposed to
be amended as follows:
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1. The authority citation for 48 CFR parts 204, 209, 212, 213, and 252
continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 204--ADMINISTRATIVE AND INFORMATION MATTERS
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2. Add subpart 204.7X to read as follows:
SUBPART 204.7X--Supplier Performance Risk System
Sec.
204.7X00 Scope of subpart.
204.7X01 Definitions.
204.7X02 Applicability.
204.7X03 Procedures.
204.7X04 Solicitation provision.
SUBPART 204.7X--Supplier Performance Risk System
204.7X00 Scope of subpart.
This subpart provides policies and procedures for use of the
Supplier Performance Risk System (SPRS) risk assessments in the
evaluation of a supplier's quotation or offer.
204.7X01 Definitions.
As used in this subpart--
Item risk means the probability that a product or service, based on
intended use, will introduce performance risk resulting in safety
issues, mission degradation, or monetary loss.
Price risk means the measure of whether a proposed price for a
product or service is consistent with historical prices paid for that
item or service.
Supplier risk means the probability that an award made to a
supplier may subject the procurement to the risk of unsuccessful
performance or to supply chain risk (see 239.7301).
204.7X02 Applicability.
Use of SPRS assessments is required for acquisitions using FAR part
13 simplified acquisition procedures, including solicitations for
supplies and services using FAR part 12 procedures for the acquisition
of commercial items. SPRS retrieves item, price, quality, delivery, and
supplier information on contracts from Government reporting systems in
order to develop overall risk assessments of suppliers. SPRS is
available at https://www.sprs.csd.disa.mil, and the SPRS user's guides
are available at https://www.sprs.csd.disa.mil/reference.htmf.
204.7X03 Procedures.
The contracting officer shall ensure the basis for award includes
an evaluation of each supplier's overall risk assessment in SPRS, if
applicable. Suppliers without an overall risk assessment in SPRS shall
not be evaluated favorably or unfavorably under the risk assessment
factor. Contracting officers shall use information available in SPRS on
item risk, price risk, and supplier risk as follows:
(a) Item risk. (1) Item risk shall be considered to determine
whether the procurement of products or services represents a high
performance risk to the Government. Item risk is displayed in SPRS with
the reason(s) an item is identified as high risk.
(2) Before issuing a solicitation and when evaluating quotations or
offers, the contracting officer shall access the SPRS item risk report
and review any warnings provided. If there are item risk warnings, the
contracting officer shall consider strategies to mitigate risk, such as
the following:
(i) Consulting with the program office.
(ii) Including mitigating requirements in the statement of work, as
provided by the requiring activity.
(iii) Applying risk mitigation strategies, including FAR and DFARS
clauses identified in the SPRS application, as appropriate.
(b) Price risk. (1) Price ratings shall be considered as part of
determining if a proposed price is consistent with historical prices
paid for an item or otherwise creates a risk to the Government.
(2) The contracting officer shall consider strategies to mitigate
price risk, such as the following--
(i) Not awarding to suppliers with high price ratings unless there
is a way to justify the price through price analysis;
(ii) Utilizing appropriate price negotiation techniques and
procedures; and
(iii) Using price reasonableness or price realism techniques at FAR
13.106 or FAR 15.4 when making award decisions.
(c) Supplier risk. (1) The contracting officers shall consider
supplier risk during the evaluation of a supplier's performance
history, to assess the risk of unsuccessful performance, in award
decisions. Supplier risk assessments in SPRS include quality, delivery,
and other supplier performance information.
(2) See risk mitigation strategies in paragraphs (a)(2) and (b)(2)
of this section.
204.7X04 Solicitation provision.
Use the provision at 252.204-70XX, Notice to Prospective Suppliers
on the Use of the Supplier Performance Risk System in Performance
Evaluations, in solicitations for supplies and services, including
solicitations using FAR part 12 procedures for the acquisition of
commercial items.
PART 209--CONTRACTOR QUALIFICATIONS
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3. Amend section 209.105-1 by adding paragraph (3) to read as follows:
209.105-1 Obtaining information.
* * * * *
(3) Contracting officers shall use the supplier risk assessment
available in the Supplier Performance Risk System (SPRS) at https://www.sprs.csd.disa.mil as a factor in determining responsibility. See
204.7X03(c)(1).
PART 212--ACQUISITION OF COMMERCIAL ITEMS
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4. Amend section 212.301 by--
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a. Adding paragraph (f)(ii)(K);
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b. Removing paragraph (f)(v); and
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c. Redesignating paragraphs (f)(vi) through (xix) as paragraphs (f)(v)
through (xviii).
The addition reads as follows:
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(f) * * *
(ii) * * *
(K) Use the provision at 252.204-70XX, Notice to Prospective
Suppliers on Use of the Supplier Performance Risk System in Performance
Evaluations, as prescribed in 204.7X04.
* * * * *
PART 213--SIMPLIFIED ACQUISITION PROCEDURES
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5. Revise section 213.106-2 to read as follows:
213.106-2 Evaluation of quotations or offers.
(b)(i) For solicitations for supplies and services using FAR part
13 simplified acquisition procedures, including solicitations using FAR
part 12 procedures for the acquisition of commercial items, the
contracting officer shall ensure--
(A) Supplier Performance Risk System (SPRS) assessments are used
for evaluation of a supplier's quotation or
[[Page 53751]]
offer. See subpart 204.7X. SPRS is available at https://www.sprs.csd.disa.mil, and the SPRS user's guides are available at
https://www.sprs.csd.disa.mil/reference.htm;
(B) The basis for award shall include an evaluation of each
supplier's overall risk assessment in SPRS, if applicable; and
(C) Suppliers without a risk assessment in SPRS are not evaluated
favorably or unfavorably under the risk assessment factor.
(D) See 204.7X04 for use of the provision at 252.204-70XX, Notice
to Prospective Suppliers on the Use of the Supplier Performance Risk
System in Performance Evaluations.
213.106-2-70 [Removed]
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6. Remove section 213.106-2-70.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
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7. Add section 252.204-70XX to read as follows:
252.204-70XX Notice to Prospective Suppliers on Use of the Supplier
Performance Risk System in Performance Evaluations.
As prescribed in 204.7X04, use the following provision: NOTICE TO
PROSPECTIVE SUPPLIERS ON USE OF THE SUPPLIER PERFORMANCE RISK SYSTEM IN
PERFORMANCE EVALUATIONS (DATE)
(a) Definitions. As used in this provision--
Item risk means the probability that a product or service, based
on intended use, will introduce performance risk resulting in safety
issues, mission degradation, or monetary loss.
Price risk means a measure of whether a proposed price for a
product or service is consistent with historical prices paid for
that item or service.
Supplier risk means the probability that an award made to a
supplier may subject the procurement to the risk of unsuccessful
performance or to supply chain risk (see Defense Federal Acquisition
Regulation Supplement 239.7301).
(b) The Supplier Performance Risk System (SPRS), available at
https://www.sprs.csd.disa.mil, will be used in the evaluation of
suppliers' performance for acquisitions using Federal Acquisition
Regulation (FAR) part 13 simplified acquisition procedures,
including solicitations using FAR part 12 procedures for the
acquisition of commercial items. SPRS retrieves item, price,
quality, delivery, and supplier information on contracts from
Government reporting systems in order to develop overall risk
assessments.
(c) SPRS risk assessments will be used by the Contracting
Officer during the evaluation of quotations or offers received in
response to this solicitation as follows:
(1) Item risk shall be considered to determine whether the
procurement represents a high performance risk to the Government.
(2) Price risk shall be considered as part of determining if a
proposed price is consistent with historical prices paid for an item
or otherwise creates a risk to the Government.
(3) Supplier risk, including but not limited to quality and
delivery, shall be considered during the evaluation of a supplier's
performance history to assess the risk of unsuccessful performance
and supply chain risk.
(d) SPRS risk assessments are generated daily for each supplier.
Suppliers are able to access their risk assessment by following the
access instructions in the SPRS user's guide available at https://www.sprs.csd.disa.mil/reference.htm. Suppliers are granted access to
SPRS for their own risk assessment classifications only. SPRS
reporting procedures and risk assessment methodology are detailed in
the SPRS user's guide. The method to challenge a rating generated by
SPRS is also provided in the user's guide. SPRS evaluation criteria
are available from the reference at https://www.sprs.csd.disa.mil/pdf/SPRS_DataEvaluationCriteria.pdf.
(e) The Contracting Officer may consider any other available and
relevant information when evaluating a quotation or an offer.
(End of provision)
252.213-7000 [Removed]
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8. Remove section 252.213-7000.
[FR Doc. 2020-18645 Filed 8-28-20; 8:45 am]
BILLING CODE 5001-06-P
