VA Acquisition Regulation: Competition Requirements, 54111-54117 [2021-20926]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 86, Number 187 (Thursday, September 30, 2021)]
[Rules and Regulations]
[Pages 54111-54117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20926]


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DEPARTMENT OF VETERANS AFFAIRS

48 CFR Part 806

RIN 2900-AQ21


VA Acquisition Regulation: Competition Requirements

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is amending and 
updating its VA Acquisition Regulation (VAAR) in phased increments to 
revise or remove any policy superseded by changes in Federal 
Acquisition Regulation (FAR), to move procedural guidance internal to 
VA into the VA Acquisition Manual (VAAM), and to incorporate any new 
agency specific regulations or policies. This rulemaking revises VAAR 
coverage concerning Competition Requirements.

DATES: This rule is effective on November 1, 2021.

FOR FURTHER INFORMATION CONTACT: Mr. Rafael N. Taylor, Senior 
Procurement Analyst, Procurement Policy and Warrant Management 
Services, 003A2A, 425 I Street NW, Washington, DC 20001, (202) 382-
2787. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: These changes seek to align the VAAR with 
the FAR, remove outdated and duplicative requirements, and reduce 
burden on contractors. The VAAM incorporates portions of the removed 
VAAR as well as other internal agency procedural guidance. VA will 
rewrite certain parts of the VAAR and VAAM, and as VAAR parts are 
rewritten, VA will publish them in the Federal Register.
    On February 1, 2019, VA published a proposed rule in the Federal 
Register (84 FR 1041) which announced VA's intent to amend regulations 
for VAAR Case RIN 2900-AQ21--VA Acquisition Regulation: Competition 
Requirements. VA provided a 60-day comment period for the public to 
respond to the proposed rule and submit comments. The comment period 
for the proposed rule ended on April 2, 2019, and VA received comments 
from six respondents. This rule adopts as a final rule the proposed 
rule published in the Federal Register on February 1, 2019, with the 
exception of minor formatting/grammatical edits and a few non-
substantive edits, which are described below.
    In particular, this final rule adds section 806.004-70, Definition, 
to establish that as used in part 806,

[[Page 54112]]

``health-care resource(s)'' has the same definition as that provided in 
VAAR 873.102.
    This final rule adds subpart 806.1--Full and Open Competition, and 
section 806.102, Use of competitive procedures, to address the 
application of 38 U.S.C. 8127 to competitive General Services 
Administration (GSA) and VA Federal Supply Schedules.
    This rule also adds subpart 806.2--Full and Open Competition After 
Exclusion of Sources, which contains two sections: 806.203, Set-asides 
for small business concerns, which directs attention to subparts 819.5 
and 819.70 for VA's policies on set-asides for small business concerns, 
and 806.270, Set-asides for verified Veteran-owned small businesses. 
This rulemaking, in section 806.270, sets forth VA's authority under 
VA's supplement to FAR part 6--VAAR part 806, and the requirement 
mandated by 38 U.S.C. 8127(d)--referred to as the VA Rule of Two, to 
conduct set-asides for Veteran-owned small businesses whenever market 
research provides the contracting officer with a reasonable expectation 
of receiving two or more offers/quotes from eligible and verified 
service-disabled veteran-owned small businesses (SDVOSBs) or veteran-
owned small businesses (VOSBs), and award can be made at a fair and 
reasonable price that offers best value to the Government. This section 
also states that the requirement to set aside procurements for Veteran-
owned small businesses applies to all contracts under this regulation, 
including orders under interagency acquisition vehicles such as the 
Federal Supply Schedules (FSS).
    As a part of this rulemaking, subpart 806.3--Other Than Full and 
Open Competition, is revised to add specific reference to VA's 
authority for noncompetitive procedures for verified Veteran-owned 
small businesses and to clarify existing authorities regarding such 
noncompetitive procedures. The revised subpart also clarifies existing 
statutory authority for other VA unique authorities and updates new 
Title 41 citations and other specific citation requirements.
    This final rule amends section 806.302, Circumstances permitting 
other than full and open competition, to add several sections. This 
rule also revises section 806.302-5, Authorized or required by statute, 
to remove its text and retain the title. The removed text has been 
revised and moved to section 806.302-571.
    Under section 806.302-5, this final rule adds two sections: 
806.302-570 and 806.302-571. Section 806.302-570, Noncompetitive 
procedures for verified Veteran-owned small businesses, provides 
coverage of the authority to enter into contracts non-competitively, 
when specifically authorized under the VA Veterans First Contracting 
Program in accordance with VAAR 819.7007 or 819.7008.
    Section 806.302-571, Authorized or required by statute--VA unique 
authorities, contains the statutes previously listed in 806.302-5 and 
provides policy under the statutes to make awards by other than full 
and open competition. Paragraph (a) provides the updated Title 41 
authority--41 U.S.C. 3304(a)(5), updated from the moved coverage under 
806.302-5. Paragraph (b)(1) provides that full and open competition is 
not required for the acquisition of prosthetic appliances and services 
based on the authority under 38 U.S.C. 8123. Paragraph (b)(2) provides 
the existing policy for the acquisition of commercial health-care 
resources, use of medical equipment or space, or research acquired from 
an institution affiliated with VA under the authority set forth in 38 
U.S.C. 8153(a)(3)(A). Paragraph (b)(3) includes policy for the 
acquisition of commercial health-care resources, the use of medical 
equipment or space from other than an affiliated institution, but only 
when conducted in accordance with simplified procedures in VAAR part 
873, Simplified Acquisition Procedures for Health-Care Resources, under 
the authority set forth in 38 U.S.C. 8153(a)(3)(B). Paragraph (b)(4) 
provides the authority under 38 U.S.C. 8153(a)(3)(C)-(D) for the sole 
source acquisition of commercial health-care resources, the use of 
medical equipment or space, when not acquired from an affiliated 
institution in accordance with paragraph (b)(2).
    Section 806.302-571, paragraph (c), requires that contracts awarded 
using the authority set forth under paragraph (a), with the exception 
of acquisitions authorized under paragraph (b)(2) of this section, 
shall be supported by the written justifications and approvals 
described in FAR 6.303 and 6.304.
    Section 806.302-571, paragraph (d), incorporates an updated Title 
41 citation reference: 41 U.S.C. 3304(a)(5); defines specific 
authorities that permit VA to procure certain supplies and services as 
sole source awards; and requires contracting officers, pursuant to FAR 
6.302-5(c)(2)(ii), to comply with written justification and approval 
requirements set forth in FAR 6.303 and 6.304, citing 41 U.S.C. 
3304(a)(5) and the applicable statute. Specifically, section 806.302-
571(d) contains authorities previously under section 806.302-5 and 
continues existing policy to allow VA to enter into contracts for the 
cited types of supplies and services under this section.
    This rulemaking removes section 806.302-7, Public interest, as it 
provides internal procedural guidance not having a significant effect 
beyond the internal operating procedures of the VA (see FAR 1.301(b)) 
and moves the coverage to the VAAM.
    This final rule also removes section 806.304, Approval of the 
justification, as it provides internal procedural guidance not having a 
significant effect beyond the internal operating procedures of the VA 
(see FAR 1.301(b)) and which will be moved to the VAAM.
    The proposed rule revised subpart 806.5--Competition Advocates to 
amend the title to ``Advocates for Competition'' to conform to the 
revised title in FAR part 6. The proposed rule also revised section 
806.501, Requirement, to identify the Deputy Senior Procurement 
Executive as the VA Advocate for Competition. However, subsequent to 
publication of the proposed rule, VA organizational changes resulted in 
the need to update the title of who in VA is assigned the role of the 
VA Advocate for Competition. This is now updated in this final rule as 
described in item six in the Technical Non-Substantive Changes section 
of the preamble.
    This final rule removes section 806.570, Planning requirements, as 
it provides internal procedural guidance not having a significant 
effect beyond the internal operating procedures of the VA (see FAR 
1.301(b)) and the coverage has been moved to the VAAM.
    VA provided a 60-day comment period for the public to respond to 
the proposed rule. As stated previously, VA received comments from six 
respondents.
    A summary of the comments and the issues raised are provided as 
follows:
    One commenter posted a general comment regarding advances in health 
care in what appears to be part of an academic exercise. VA appreciates 
the comment. As the comment does not specifically address issues with 
the proposed rule, VA is making no revisions as a result of the 
comment.
    Another respondent suggests that moving items into the VAAM and 
eliminating Information Letters (ILs) and various procedural guidance 
is a positive move. They also note that the VAAM is a better 
alternative than continued reliance on sub-agency procurement manuals. 
VA appreciates the comment on the proposed rule. The VAAR/VAAM project 
objective is to remove procedural guidance that is internal to VA and 
move it into the VA

[[Page 54113]]

Acquisition Manual (VAAM), and to incorporate any new agency specific 
regulations or policies. These changes seek to streamline and align the 
VAAR with the FAR and remove outdated and duplicative requirements and 
reduce burden on contractors. The comment does not require the VA to 
make any revisions to the proposed rule.
    The third commenter submits that the Class Deviations and other 
guidance issued by VA in response to the Supreme Court's decision in 
Kingdomware Technologies, Inc. v. United States, 136 S. Ct. 1969 
(2016), recognize that the Javits-Wagner-O'Day Act's (JWOD) mandatory 
requirement to purchase from the Procurement List is capable of 
coexisting with the VA Rule of Two. The commenter states that the 
current guidance provides that the products and services on the 
AbilityOne Procurement List are mandatory sources but the VA Rule of 
Two is to be applied before adding new VA requirements to the 
Procurement List. To avoid any doubt that the February 9, 2018, class 
deviation is still in effect, the commenter urges the VA to clarify 
that VAAR 806.270 does not supersede VAAR 808.002 or the February 9, 
2018, class deviation.
    VA appreciates the comments. The respondent's comments concerning 
mandatory sources are appropriately addressed in the proposed rule 
pertaining to VAAR part 808 and related clauses and provisions. Since 
the rule (RIN 2900-AQ21) was published for public comment, new 
legislation impacting AbilityOne was signed into law on August 8, 2020 
(see further description regarding this below and the class deviation 
to VAAR 808.002 issued on August 14, 2020, that addresses the priority 
of the AbilityOne program in relation to the Veterans First Contracting 
Program, with certain exceptions). As these comments do not pertain to 
the language and text in this rule for VAAR part 806, VA is making no 
changes based on these comments.
    The fourth respondent also commented on this rule and its relation 
to AbilityOne, supporting the primacy of JWOD as a mandatory source and 
states that ``this section of the VAAR should also recognize that non-
mandatory source competition is not required where a mandatory source 
applies, and that the JWOD, and other statutes, direct agencies to 
purchase certain products and services from mandatory sources.'' The 
commenter also recommends revising the part to recognize that specified 
sources include the mandatory sources identified in FAR 8.002, 8.004, 
and subpart 8.7.
    While VA appreciates the feedback from the respondents on this 
proposed rule, the Veterans First Contracting Program was updated as a 
result of amendments to 38 U.S.C. 8127 by Public Law 116-155, the 
Department of Veterans Affairs Contracting Preference Consistency Act 
of 2020, signed August 8, 2020, which requires the use of mandatory 
Government sources under the AbilityOne program for covered products 
and services except for certain previously awarded contracts to 
service-disabled veteran-owned small businesses (SDVOSBs) and veteran-
owned small businesses (VOSBs) after December 22, 2006, and in effect 
August 7, 2020. This is implemented in VAAR 808.002(a)(1)(iv) and 
(a)(2). VA originally issued a Class Deviation on August 14, 2020, to 
make this change pending publication of a rule; this deviation was 
rescinded and replaced with Class Deviation from VA Acquisition 
Regulation part 808, Required Sources of Supplies and Services, dated 
July 20, 2021. The priorities for use of mandatory Government sources 
are covered by FAR part 8 and VAAR part 808, respectively. The language 
as set forth in VAAR part 806 and specifically at VAAR 806.270 fully 
comports with VA's requirements under VAAR part 808. VA will not revise 
the final rule as a result of this comment. Note: VA is also planning 
an interim rule which would include a pointer at subpart 819.5 back to 
808.002(a)(1)(iv) and (a)(2) regarding the AbilityOne program to ensure 
contracting officers and the public are reminded of the priority use of 
the AbilityOne program as set forth in VAAR 808.002.
    The next respondent had multiple comments and the VA will address 
each in order. After first commending VA for its thoughtful development 
of the proposed rule, the commenter recommends that VAAR 806.501 be 
revised to include the actual list of Advocates for Competition. The 
commenter also states that VAAR 806.501 could be further improved by 
including a requirement to identify the cognizant SBA Procurement 
Center Representative, the VA Ombudsman, and the VA Advocate for 
Competition in each solicitation above the simplified acquisition 
threshold.
    VA has considered this suggestion but requiring each solicitation 
or contract to include a list is beyond the requirements of FAR 6.501 
that VA is implementing at VAAR 806.501. However, VA is making 
available a complete list of VA procuring activity Advocates for 
Competition on its website that will be available when the final rule 
is published. Therefore, VA is making no changes to the proposed rule 
as a result of this comment.
    The next comment recommended revisions to VAAR 806.270; 
specifically, that VAAR 806.270 be modified to exclude references to 
Class Deviation provisions and that VA remove the reference to ``the VA 
Rule of Two (see 802.101)'' from the final version of VAAR 806.270 as 
the definition of ``VA Rule of Two'' was not added to VAAR 802.101 via 
the required notice and public comment rulemaking process.
    VA appreciates the comment and responds that the VA Rule of Two is 
a term that is defined and incorporated into 802.101 under a Class 
Deviation and it will be incorporated into part 802 as a part of a 
future proposed rule. Nevertheless, to avoid any confusion, section 
806.270 has been revised to remove the reference, ``see 802.101.''
    The respondent also comments that the VAAR must fully implement the 
Vets Act Priority for SDVOSBs first, and then VOSBs. The commenter 
states VA should further explain how contracting officers give full 
credit and partial credit for VOSBs and to address its use in Lowest 
Priced Technically Acceptable (LPTA) procurements that do not permit 
tradeoffs. They believe that a new provision should be added to VAAR 
852.215-70.
    VA appreciates the comments. The respondent's comments concerning 
852.215-70 were appropriately addressed in the rule RIN 2900-AQ20 
pertaining to VAAR part 815 and related clauses and provisions. 
Therefore, as these comments do not pertain to the language and text in 
this rule for VAAR part 806, VA is making no changes based on these 
comments. However, VA is clarifying section 806.270 to make clear that 
the statute's required set aside priorities are for SDVOSBs first, then 
VOSBs by adding the words ``first, then . . .'' after ``(SDVOSBs)'', 
and removing the word ``and'' so that it now reads, ``. . . verified 
service-disabled Veteran-owned small businesses (SDVOSBs) first, then 
Veteran-owned small businesses (VOSBs).'' This clarification is 
consistent with 38 U.S.C. 8127.
    The same respondent recommends the proposed rule should be revised 
as a reference in the preamble of the proposed rule to additional 
internal requirements is problematic in their opinion. When VA issues 
the final rule, it should explain in the preamble that the only 
requirements for a VA contracting officer to issue a sole source 
contract under the Vets Act are as specified in the text of VAAR 
806.302-570, and there are no unspecified agency procedures or class 
deviations

[[Page 54114]]

that would restrict or water down this unique and important tool.
    VA appreciates the opportunity to make clear the requirements of 
this section and what is set forth in the preamble. VA's internal 
procedures, including review and approval thresholds, are properly 
contained in the VAAM as authorized by FAR 1.301(a)(2) which authorizes 
an agency head to issue or authorize the issuance of internal agency 
guidance. While 38 U.S.C. 8127(c) provides the authority for when 
awards to such sole source concerns may be made, VA implements required 
internal review and approval oversight procedures as necessary. 
Therefore, VA makes no changes to the rule on the basis of these 
comments.
    The same commenter asserts that VA should provide Contracting 
Officers guidance regarding what constitutes a fair and reasonable 
price.
    VA notes that guidance on how to conduct a price analysis and 
establish a fair and reasonable price determination is already 
addressed in the FAR. Specifically, FAR subpart 15.4, Contract Pricing, 
provides guidance to contracting officers to assist in making a fair 
and reasonable price determination. Additional internal agency guidance 
would be contained in the VA Acquisition Manual. However, VA 
acknowledges this is an area of interest for the public as well as VA's 
acquisition workforce. VA is preparing additional internal training for 
its acquisition workforce to strengthen contracting officers' skillset 
in this area. VA is making no changes to the rule based on these 
comments.
    The same commenter recommends VA revise VAAR 806.302-570(a) to 
state that the sole source contract shall be supported ``by the 
applicable justification and approval requirements of FAR 6.302-
5(c)(2)(ii), 6.303, and 6.304.''
    VA has considered the comment and concurs that the VA legislation 
provides a unique sole source authority that is less restrictive than a 
sole source award otherwise permitted under FAR 6.302-1, ``Only one 
responsible source and no other supplies or services will satisfy 
agency requirements.'' Accordingly, section 806.302-570(a) has been 
revised to add the word ``applicable'' as noted in the amendatory 
language with respect to the content of the justification requirements.
    The next comment takes issue with the language ``without regard to 
any other provision of law'' in VAAR 806.302-571(b)(1) and believes 
that the other proposed sections of this rule may create confusion as 
to whether this sole source authority trumps the Vets Act requirements 
for VA to give priority to SDVOSBs and VOSBs in all VA contracts. They 
go on to state, ``The sole source authorities cited in VAAR 806.302-571 
do not trump the VA's obligations under the Vets Act. For example, 38 
U.S.C. 8123 provides, permissively, that VA may procure prosthetic 
appliances . . . without regard to any other provision of law.'' They 
submit that by contrast, the Vets Act includes broader language that 
mandates VA give priority to SDVOSBs and VOSBs.
    VA does not concur with the respondent's assessment and will make 
no change based on these comments. The legislative language provides VA 
broad discretion in certain types of procurements ``without regard to 
any other provision of law.''
    The last respondent provides the following positive comments 
regarding the proposed rule: ``. . . strongly supports the VA in their 
efforts to create more flexibility in the contracting process as well 
as efforts to reorganize the community care programs through the 
MISSION Act of 2018.''
    VA appreciates the comment. The comment does not require VA to make 
any revisions to the proposed rule as the comments do not apply to this 
rule.

Technical Non-Substantive Changes to the Proposed Rule

    This rule makes six non-substantive changes to the proposed rule to 
provide clarity, eliminate confusion, and to ensure compliance with 
statute and VA's authority.
    1. Under section 806.270, Set-asides for verified Veteran-owned 
small businesses, VA has revised the language to remove the phrase 
``including Governmentwide acquisition contracts (GWACs)'' as 
unnecessary to set forth specifically further types of contract 
vehicles.
    2. Under section 806.302-571, Authorized or required by statute--VA 
unique authorities, VA has revised the language in paragraph (b)(1) to 
remove the phrase at the end of the subparagraph: ``as set forth in VA 
directives governing prosthetic appliances, sensory aids and services 
supporting the same . . .'' as unnecessary. VA contracting officers are 
already required to follow VA directives and are internal operating 
procedures.
    3. Under section 806.302-571, paragraph (b)(2), VA is revising the 
language to provide clarity by: Adding ``Acquisition of resources 
from'' in the first sentence before ``medical practice groups'' and to 
remove ``affiliated'' before ``institution affiliated with VA.''
    4. Under section 806.302-571, at paragraph (b)(3), VA is removing 
the phrase ``only if the procurement is conducted'' as too restrictive 
to VA's procurement authority in various statutes and to ensure 
clarity. In paragraph (b)(4), VA is revising the authority citation at 
the end of the paragraph to add ``(D)'' at the end so that it now 
reads: (38 U.S.C. 8153(a)(3)(C)-(D)).
    5. Under section 806.302-571, paragraph (c), VA is making minor 
grammatical edits to provide clarity by revising the first sentence so 
that ``this authority'' now reads ``an authority'' and by adding the 
words, ``in this section'' so that the intro to the sentence now reads: 
``Contracts awarded using an authority in this section, . . .''.
    6. Under subpart 806.5, Advocates for Competition, and the 
underlying section 806.501, Requirement, the section is updated to 
reflect a new organization role and title, to clarify the authority to 
appoint an alternate agency advocate for competition, and add the 
requirement to designate procuring activity advocates for competition 
in accordance with FAR 6.501. The section has been updated to remove 
the title of Deputy Senior Procurement Executive (DSPE) to reflect the 
official organizational title of the Associate Executive Director, 
Office of Procurement Policy, Systems and Oversight (AED/PPSO) and to 
add ``for the agency'' after the phrase ``VA Advocate for 
Competition.'' The delegated authority is clarified that the AED/PPSO 
may further delegate the authority to appoint an alternate agency 
advocate for competition, and to add ``shall designate procuring 
activity advocates for competition in accordance with FAR 6.501.''

Executive Orders 12866 and 13563

    Executive Orders (EOs) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts, 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
The Office of Information and Regulatory Affairs has determined that 
this rule is not a significant regulatory action under Executive Order 
12866. The Regulatory Impact Analysis associated with this rulemaking 
can be found as a

[[Page 54115]]

supporting document at www.regulations.gov.

Paperwork Reduction Act

    This final rule contains no provisions constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521).

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-
612). The rule primarily affects the use of authorities that VA 
contracting officers are already authorized by statute to utilize when 
required and in accordance with existing agency regulation, policies 
and procedures. This rule appropriately clarifies and revises the use 
of such authorities and when certain justification and approval 
requirements apply. The authorities were previously codified in the 
VAAR either in this part or in other parts, to include those affecting 
small business programs, and they affected both large and small 
entities alike. With this rule, VA ensures content to supplement the 
FAR for VA's unique service-disabled veteran-owned small business and 
veteran-owned small business program is properly implemented in this 
part.
    The overall impact of the rule is of benefit to small businesses 
owned by Veterans or service-disabled Veterans as the VAAR is being 
updated to remove extraneous procedural information that applies only 
to VA's internal operating processes or procedures. This rule will 
ensure clarity for both the public and VA contracting officers to 
ensure that when such authorities are utilized, they are properly cited 
and, when required, appropriately documented and publicized. This 
rulemaking does not change VA's policy regarding small businesses. VA 
estimates that no cost or economic impact to individual businesses will 
result from this rule update. VA estimates this final rule is not 
expected to result in increased or decreased costs to small business 
entities, and no more than de minimis costs. On this basis, the final 
rule does not have a significant economic impact on a substantial 
number of small entities as they are defined in the Regulatory 
Flexibility Act, 5 U.S.C. 601-612. Therefore, pursuant to 5 U.S.C. 
605(b), the initial and final regulatory flexibility analysis 
requirements of 5 U.S.C. 603 and 604 do not apply.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal Governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This final rule will have no such effect on 
State, local, and tribal Governments or on the private sector.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

List of Subjects in 48 CFR Part 806

    Government procurement.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on September 1, 2021, and authorized the undersigned to sign 
and submit the document to the Office of the Federal Register for 
publication electronically as an official document of the Department of 
Veterans Affairs.

Luvenia Potts,
Regulations Development Coordinator, Office of Regulation Policy & 
Management, Office of General Counsel, Department of Veterans Affairs.

    For the reasons set forth in the preamble, VA revises 48 CFR part 
806 to read as follows:

PART 806--COMPETITION REQUIREMENTS

Sec.
806.004-70 Definition.
Subpart 806.1--Full and Open Competition
806.102 Use of competitive procedures.
Subpart 806.2--Full and Open Competition After Exclusion of Sources
806.203 Set-asides for small business concerns.
806.270 Set-asides for verified Veteran-owned small businesses.
Subpart 806.3--Other Than Full and Open Competition
806.302 Circumstances permitting other than full and open 
competition.
806.302-5 Authorized or required by statute.
806.302-570 Noncompetitive procedures for verified Veteran-owned 
small businesses.
806.302-571 Authorized or required by statute--VA unique 
authorities.
Subpart 806.5--Advocates for Competition
806.501 Requirement.

    Authority:  40 U.S.C. 121(c); 41 U.S.C. 1121(c)(3); 41 U.S.C. 
1303; 41 U.S.C. 1702; 41 U.S.C. 3304; and 48 CFR 1.301 through 
1.304.


806.004-70   Definition.

    As used in this part--
    Health-care resources has the same definition as that provided in 
873.102.

Subpart 806.1--Full and Open Competition


806.102   Use of competitive procedures.

    (d)(3) Awards made using General Services Administration (GSA) or 
Department of Veterans Affairs (VA) Federal Supply Schedules (FSS) are 
considered competitive when awarded in accordance with the procedures 
specified in FAR part 8 and this part.

Subpart 806.2--Full and Open Competition After Exclusion of Sources


806.203   Set-asides for small business concerns.

    (c) Subparts 819.5 and 819.70 prescribe the policies and procedures 
that shall be followed with respect to set-asides for small business 
and Veteran-owned small business concerns.


806.270   Set-asides for verified Veteran-owned small businesses.

    (a) To fulfill the statutory requirements relating to Public Law 
109-461, the Veterans Benefits, Health Care and Information Technology 
Act of 2006 (38 U.S.C. 8127-8128), contracting officers shall set aside 
solicitations in accordance with subpart 819.70 and the VA Rule of Two 
for Vendor Information Pages (VIP) verified service-disabled Veteran-
owned small businesses (SDVOSBs) first, then Veteran-owned small 
businesses (VOSBs) (see 819.7005 and 819.7006). (38 U.S.C. 8127-8128)
    (b) The requirement in this section to set aside procurements for 
VIP verified SDVOSBs and VOSBs applies to all types of contracts, 
including orders placed under GSA's Federal Supply Schedules (FSS) and 
indefinite-delivery contracts. (38 U.S.C. 8127-8128)

Subpart 806.3--Other Than Full and Open Competition


806.302   Circumstances permitting other than full and open 
competition.


806.302-5   Authorized or required by statute.


806.302-570   Noncompetitive procedures for verified Veteran-owned 
small businesses.

    (a) Sole source awards made to a verified SDVOSB or VOSB. Full and 
open competition need not be provided for when awarding a sole source

[[Page 54116]]

contract under paragraph (b) or (c) of this section, to a verified 
SDVOSB or VOSB in accordance with 819.7007 or 819.7008, respectively, 
as authorized. Contracts awarded using the authority in this paragraph 
(a) shall be supported by the applicable justification and approval 
requirements of FAR 6.302-5(c)(2)(ii), 6.303, and 6.304.
    (b) Sole source awards below the simplified acquisition threshold. 
(Citation: 41 U.S.C. 3304(a)(5), as authorized by 38 U.S.C. 8127(b)). A 
contracting officer may award a contract under the authority in this 
paragraph (b) to a VIP verified SDVOSB first, then VOSB if no SDVOSBs 
can fulfill the need, for an amount less than the simplified 
acquisition threshold, using procedures other than full and open 
competition. (38 U.S.C. 8127)
    (c) Sole source awards above the simplified acquisition threshold. 
(Citation: 41 U.S.C. 3304(a)(5), as authorized by 38 U.S.C. 8127(c)). A 
contracting officer may award a contract to a VIP verified SDVOSB 
first, then VOSB if no SDVOSB can satisfy the need, using procedures 
other than full and open competition when--
    (1) Such concern is determined to be a responsible source with 
respect to performance of such contract opportunity;
    (2) The anticipated award price of the contract (including options) 
will exceed the simplified acquisition threshold, but will not exceed 
$5 million; and
    (3) Contract award can be made at a fair and reasonable price that 
offers best value to the United States. (38 U.S.C. 8127)


806.302-571   Authorized or required by statute--VA unique authorities.

    (a) Authority. (1) Citation: 41 U.S.C. 3304(a)(5). Contracting 
officers shall also cite the specific authorities in paragraph (b) of 
this section for the statutes related to the products and services 
procured.
    (2) Full and open competition need not be provided for when a 
statute expressly authorizes or requires that the acquisition be made 
through another agency or from a specified source.
    (b) Application. The following products and services are authorized 
to be acquired from a specified source:
    (1) Prosthetic appliances and services. Contracting activities may 
procure prosthetic appliances and necessary services required in the 
fitting, supplying, and training and use of prosthetic appliances by 
purchase, manufacture, contract, or in such other manner as determined 
to be proper, without regard to any other provision of law. (38 U.S.C. 
8123)
    (2) Commercial health-care resources, the use of medical equipment 
or space, or research, and acquired from an institution affiliated with 
the Department of Veterans Affairs. Contracting activities may procure 
health care resources, including resources from medical practice groups 
and other approved entities associated with affiliated institutions, 
blood banks, organ banks, or research centers from an institution 
affiliated with VA in accordance with 38 U.S.C. 7302. Acquisition of 
resources from medical practice groups and other entities shall be 
approved when determined by the contracting activity to be legally 
associated with affiliated institutions in accordance with 38 U.S.C. 
7302. The justification and approval requirements of FAR 6.303 and 
paragraph (c) of this section do not apply. (38 U.S.C. 8153(a)(3)(A))
    (3) Commercial health-care resources, the use of medical equipment 
or space, and is not to be acquired from an entity described in 
paragraph (b)(2) of this section. Contracting activities may procure 
health care resources from a non-affiliated institution in accordance 
with the simplified procedures prescribed in part 873. The 
justification and approval requirements of FAR 6.303 shall apply. (38 
U.S.C. 8153(a)(3)(B))
    (4) Commercial health-care resources, the use of medical equipment 
or space, when not acquired from an affiliated institution described in 
paragraph (b)(2) of this section and to be conducted on a sole source 
basis. The authority in this paragraph (b)(4) applies if not acquired 
from an affiliated institution in accordance with part 873. The 
justification and approval requirements of FAR 6.303 shall apply. (38 
U.S.C. 8153(a)(3)(C)-(D))
    (c) Written justifications and approvals. Contracts awarded using 
an authority in this section, with the exception of acquisitions 
authorized under paragraph (b)(2) of this section, shall be supported 
by the written justifications and approvals described in FAR 6.303 and 
6.304.
    (d) Citation of specific authorities. When a contracting officer 
enters into a contract without providing full and open competition for 
any of the following items or services, the contracting officer must 
cite 41 U.S.C. 3304(a)(5) and the following authorities that apply, in 
the written justifications and approvals as required by FAR 6.303 and 
6.304:
    (1) Contracts for scarce medical specialist services. (Citation: 41 
U.S.C. 3304(a)(5), as authorized by 38 U.S.C. 7409.) Contracting 
officers may enter into contracts with:
    (i) Schools and colleges of medicine, osteopathy, dentistry, 
podiatry, optometry, and nursing;
    (ii) Clinics; and
    (iii) Any other group or individual capable of furnishing such 
scarce medical specialist services at VA facilities, to include the 
services of physicians, dentists, podiatrists, optometrists, 
chiropractors, nurses, physician assistants, expanded-function dental 
auxiliaries, technicians, and other medical support personnel. (38 
U.S.C. 7409)
    (2) Contracts or agreements to purchase or sell merchandise, 
equipment, fixtures, supplies and services for the operation of the 
Veterans Canteen Service. (Citation: 41 U.S.C. 3304(a)(5), as 
authorized by 38 U.S.C. 7802(f).) Contracts or agreements may be 
entered into without regard to 41 U.S.C. 6101(b) through (d).
    (3) Contracts or leases for the operation of parking facilities 
established under authority of 38 U.S.C. 8109(b). (Citation: 41 U.S.C. 
3304(a)(5), as authorized by 38 U.S.C. 8109(f).) Contracts or leases 
may be entered into provided that the establishment, operation, and 
maintenance of such facilities have been authorized by the Secretary or 
designee.
    (4) Contracts for laundry and other common services, such as the 
purchase of steam, negotiated with non-profit, tax-exempt educational, 
medical, or community institutions. (Citation: 41 U.S.C. 3304(a)(5), as 
authorized by 38 U.S.C. 8122(c).) Contracts may be entered into when 
specifically approved by the Secretary or designee and when such 
services are not reasonably available from private commercial sources.
    (5) Contracts or agreements with private or public agencies or 
persons for translator services. (Citation: 41 U.S.C. 3304(a)(5), as 
authorized by 38 U.S.C. 513.)

Subpart 806.5--Advocates for Competition


806.501   Requirement.

    The Associate Executive Director, Office of Procurement Policy, 
Systems and Oversight (AED, PPSO) is designated as the VA Advocate for 
Competition for the agency. The AED, PPSO may further delegate the 
authority in this section to appoint an alternate agency advocate for 
competition and shall designate procuring activity advocates for 
competition in accordance with FAR 6.501. A complete list of VA 
procuring activity advocates for competition can be found at https://

[[Page 54117]]

www.va.gov/oal/business/pps/competition-advocates.asp.

[FR Doc. 2021-20926 Filed 9-29-21; 8:45 am]
BILLING CODE 8320-01-P