Federal Acquisition Regulation: Consolidation and Substantial Bundling, 61038-61040 [2021-22145]

Agencies

• DEPARTMENT OF DEFENSE
• General Services Administration
• National Aeronautics and Space Administration

[Federal Register Volume 86, Number 211 (Thursday, November 4, 2021)]
[Rules and Regulations]
[Pages 61038-61040]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-22145]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 5 and 7

[FAC 2022-01; FAR Case 2019-003; Item II; Docket No. 2019-0029; 
Sequence No. 1]
RIN 9000-AN86


Federal Acquisition Regulation: Consolidation and Substantial 
Bundling

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to implement a section of the 
National Defense Authorization Act for Fiscal Year 2016 that requires 
providing public notices of determinations for substantial bundling and 
consolidation of contract requirements.

DATES: Effective December 6, 2021.

FOR FURTHER INFORMATION CONTACT: Ms. Dana Bowman, Procurement Analyst, 
at 202-803-3188, or by email at [email protected]. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat Division at 202-501-4755. Please cite FAC 2022-01, FAR Case 
2019-003.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA published a proposed rule at 85 FR 23299 on 
April 27, 2020, to implement section 863 of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 114-92, 
codified at 15 U.S.C. 644(e)(3) and 15 U.S.C. 657q(c)(2)) and the Small 
Business Administration (SBA) implementing regulations. SBA published a 
final rule to implement section 863 on November 29, 2019, at 84 FR 
65647.
    Section 863 requires public notification of an agency's 
determination to substantially bundle or consolidate contract 
requirements. Specifically, publication of a notice is required when 
the head of a contracting agency determines that an acquisition plan 
for a procurement involves substantial bundling of contract 
requirements. The head of the contracting agency must publish a notice 
on a public website that such determination has been made not later 
than 7 days after making the determination. Any solicitation for a 
procurement related to the acquisition plan may not be published 
earlier than 7 days after such notice is published. A justification for 
the determination must be published with the solicitation. The 
justification must address the specific benefits anticipated, any 
alternative approaches, impediments to participation by small business 
concerns as prime contractors, and actions designed to maximize 
participation of small business concerns as subcontractors (see 15 
U.S.C. 644(e)(3)(A) through (C)).
    Section 863 also requires publication of a notice when the senior 
procurement executive (SPE) or chief acquisition officer (CAO) makes a 
determination that an acquisition strategy involving consolidation of 
contract requirements is necessary and justified under 15 U.S.C. 
657q(c)(2)(A). The SPE or CAO must publish a notice on a public website 
that such determination has been made not later than 7 days after 
making the determination. Any solicitation for a procurement related to 
the acquisition strategy may not be published earlier than 7 days after 
such notice is published. A justification for the determination must be 
published with the solicitation. The justification must include the 
information in 15 U.S.C. 657q(c)(1)(A) through (E).
    As a result, this final rule amends FAR 7.107-5, Notifications, to 
require the publication on the Governmentwide Point of Entry of a 
notice of substantial bundling or of a notice of consolidation, as 
required in the SBA final rule. This section also contains references 
to the required content of the consolidation determination (at FAR 
7.107-2) and the substantial bundling determination (at FAR 7.107-4).
    Four respondents submitted public comments in response to the 
proposed rule.

II. Discussion and Analysis

    The Civilian Agency Acquisition Council and the Defense Acquisition 
Regulations Council (the Councils) reviewed the public comments in the 
development of the final rule. A discussion of the comments received 
and any changes made to the rule as a result of the public comments are 
provided as follows:

A. Summary of Significant Changes From the Proposed Rule

    There are no significant changes made to the final rule.

B. Analysis of Public Comments

1. Support for the Rule
    Comment: One respondent expressed support for the rule.
    Response: The Councils acknowledge the respondent's support for the 
rule.
2. More Time Between Publication of Notice and Solicitation Issuance
    Comment: Two respondents expressed concern about the 7-day 
notification period, stating that it is not enough time for small 
businesses to plan and strategize. The respondents requested the 
notification posting period be extended for a longer time, at least 2 
weeks.
    Response: This FAR rule uses the same time period set forth in 
SBA's implementation of section 863 after SBA considered the length of 
the notification period.
3. Location of Notices
    Comment: One respondent suggested that the existing requirement to 
publish the notification on a ``public site'' is too vague and that 
compliance could be satisfied by posting on an agency's social media 
platform. The respondent recommends that all notifications should be 
posted on beta.sam via the Governmentwide point of entry (GPE).
    Response: This rule implements section 863 of the NDAA for FY 2016 
(Pub. L. 114-92) and the SBA implementing regulations (13 CFR 125), 
which requires agencies to provide public notices on the GPE of 
determinations for substantial bundling

[[Page 61039]]

and consolidation of contract requirements. FAR 7.107-5(b)(1) currently 
requires annual publication on the agency website of a list of bundled 
contracts and rationale, because section 1312 of Public Law 111-240 
requires it. Thus, this rule could not mandate that all notifications 
be published on SAM via the GPE.
    Additionally, the FAR text is amended at 7.107-5(c) and 7.107-5(d) 
to require the Senior Procurement Executive or Chief Acquisition 
Officer to publish notifications of consolidation and substantial 
bundling of contract requirements in the GPE not later than 7 days 
after making such a determination and prior to issuance of the 
solicitation. The FAR does not use social media as a publication 
platform. No changes were made to the FAR text as a result of this 
comment.
4. Broader Applicability of Notice Requirement
    Comment: One respondent questioned why the required notification 
did not apply to all bundled procurements. The respondent further 
stated that the definition for substantial bundling should be 
referenced to provide guidance to the procurement office.
    Response: This rule implements section 863 of the NDAA for FY 2016 
(Pub. L. 114-92) and the SBA implementing regulations, which require 
publication of notices when a procurement involves consolidation or 
substantial bundling of contract requirements. The definition for 
substantial bundling can be found at 7.107-4(a)(1). Neither section 863 
nor the SBA regulations altered notification requirements for bundled 
procurements below the substantial bundling threshold; therefore, this 
final rule does not apply these requirements below the substantial 
bundling threshold.
5. Outside the Scope of the Rule
    Comment: One respondent questioned whether information is being 
withheld from the proposed rule. Another respondent stated that SBA 
procurement center representatives often disagree with the bundling 
justification but sign form 2579 despite their opposition. The 
respondent further stated that small business subcontractors are not 
being utilized by large businesses given that there is ``no punishment 
for a large not subcontracting'' and no incentive for large businesses 
to comply with subcontracting goals beyond their initial proposal 
submission. Additionally, the respondent stated that bundling has been 
prohibited in Federal acquisition and recommends the following actions:
     Allow small businesses to be involved in the ``crafting of 
bundling efforts'' given that ``large [businesses] are involved in the 
crafting of the bundling effort;'' and
     Give SBA the ``power to do their jobs'' by allowing for a 
process for the procurement center representative to disagree with the 
bundling effort.
    Response: The respondents' comments are outside the scope of this 
FAR rule. The Councils note that FAR 19.502-8 addresses the process for 
SBA PCRs to appeal the contracting officer's rejection of SBA's 
recommendation.

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 rule does not create new solicitation provisions or contract 
clauses or impact any existing provisions or clauses.

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, this rule 
was not subject to review under section 6(b) of E.O. 12866, Regulatory 
Planning and Review, dated September 30, 1993.

V. Congressional Review Act

    As required by the Congressional Review Act (5 U.S.C. 801-808) 
before an interim or final rule takes effect, DoD, GSA, and NASA will 
send the rule and the ``Submission of Federal Rules Under the 
Congressional Review Act'' form to each House of the Congress and to 
the Comptroller General of the United States. A major rule cannot take 
effect until 60 days after it is published in the Federal Register. The 
Office of Information and Regulatory Affairs (OIRA) in the Office of 
Management and Budget has determined that this is not a major rule 
under 5 U.S.C. 804.

VI. Regulatory Flexibility Act

    DoD, GSA, and NASA have prepared a Final Regulatory Flexibility 
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 
U.S.C. 601-612. The FRFA is summarized as follows:

    This rule is necessary to implement section 863 of the National 
Defense Authorization Act for 2016 (Pub. L. 114-92, codified at 15 
U.S.C. 644(e)(3) and 15 U.S.C. 657q(c)(2)), and the Small Business 
Administration (SBA) implementing regulations. Section 863 requires 
the head of a contracting agency to publish a notice on a public 
website within 7 days of making the determination that an 
acquisition plan involves a substantial bundling of contract 
requirements. Additionally, section 863 requires the senior 
procurement executive or chief acquisition officer to publish a 
notice on a public website that consolidation of contract 
requirements is necessary and justified. For substantial bundling 
and for consolidation, the agency may not issue the solicitation any 
earlier than 7 days after publication of the notices described 
above. The agency must also publish the justification along with the 
solicitation. The objective of this rule is to amend the FAR to 
require that a notice of substantial bundling or of a notice of 
consolidation be published on the Governmentwide Point of Entry, as 
required in the SBA final rule. This section also contains 
references to the required content of the consolidation 
determination (at FAR 7.107-2) and the substantial bundling 
determination (at FAR 7.107-4).
    No public comments were received in response to the initial 
regulatory flexibility analysis.
    This rule may have a positive economic impact on any small 
entity that is interested in participating in Federal procurement. 
By posting justifications and notices of upcoming procurements that 
are planned to be substantially bundled or consolidated, small 
business concerns are made aware of potential subcontracting 
opportunities and possibilities for participating in joint ventures 
or small business teaming arrangements, which will help small 
businesses increase their competitiveness. The System for Award 
Management shows 315,655 entities that are small business concerns 
under at least one North American Industry Classification System 
code.
    This rule does not include any new reporting, recordkeeping, or 
other compliance requirements for any small entities.
    There are no known significant alternative approaches to the 
rule that would meet the stated objectives of the applicable 
statute.

    Interested parties may obtain a copy of the FRFA from the 
Regulatory Secretariat Division. The Regulatory Secretariat Division 
has submitted a copy of the FRFA to the Chief Counsel for Advocacy of 
SBA.

VII. Paperwork Reduction Act

    This 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. 3501-3521).

[[Page 61040]]

List of Subjects in 48 CFR Parts 5 and 7

    Government procurement.

William F. Clark,
Director, Office of Governmentwide Acquisition Policy, Office of 
Acquisition Policy, Office of Governmentwide Policy.

    Therefore, DoD, GSA, and NASA are amending 48 CFR parts 5 and 7 as 
set forth below:

0
1. The authority citation for 48 CFR parts 5 and 7 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 5--PUBLICIZING CONTRACT ACTIONS

0
2. Amend section 5.205 by revising paragraph (g) to read as follows:


5.205   Special Situations.

* * * * *
    (g) Notifications to the public regarding consolidation, bundling, 
or substantial bundling. (1) For the requirement to publish a 
notification of consolidation or substantial bundling of contract 
requirements, see 7.107-5(c) and (d).
    (2) The agency is encouraged to provide notification of the 
rationale for any bundled requirement to the GPE before issuing the 
solicitation of any bundled requirement (see 7.107-5(b)).

PART 7--ACQUISITION PLANNING


7.105   [Amended]

0
3. Amend section 7.105 by removing from paragraph (b)(16) the term 
``GPE'' and adding ``Governmentwide point of entry (GPE)'' in its 
place.


7.107-1   [Amended]

0
4. Amend section 7.107-1 by removing from paragraph (a) the phrase 
``7.107-3 and 7.107-4'' and adding ``7.107-3, 7.107-4, and 7.107-5'' in 
its place.


7.107-2   [Amended]

0
5. Amend section 7.107-2 by--
0
a. Removing from paragraph (a) introductory text the phrases ``senior 
procurement executive'' and ``chief acquisition officer'' and adding 
``senior procurement executive (SPE)'' and ``chief acquisition officer 
(CAO)'' in their places, respectively;
0
b. Removing from paragraph (b) the phrases ``senior procurement 
executive or chief acquisition officer'' and ``subsection'' and adding 
``SPE or CAO'' and ``section'' in their places, respectively;
0
c. Removing from paragraph (d)(3) the phrase ``senior procurement 
executive or chief acquisition officer'' and adding ``SPE or CAO'' in 
its place;
0
d. Removing from paragraph (e)(1) introductory text the word 
``subsection'' wherever it appears and adding ``section'' in its place;
0
e. Removing from paragraph (e)(1)(i) the word ``subsection'' and adding 
``section'' in its place; and
0
f. Removing from paragraph (e)(2)(i) the phrase ``senior procurement 
executive'' and adding ``SPE'' in its place.

0
6. Amend section 7.107-5 by--
0
a. Revising paragraph (b);
0
b. Redesignating paragraphs (c) and (d) as paragraphs (e) and (g) and 
adding new paragraphs (c) and (d) and paragraph (f); and
0
c. Removing from the newly redesignated paragraph (g) ``Public 
notification'' and adding ``Notification to public'' in its place.
    The revision and additions read as follows:


7.107-5   Notifications.

* * * * *
    (b) Notification to the public of rationale for bundled 
requirement. The agency is encouraged to provide notification of the 
rationale for any bundled requirement to the GPE, before issuance of 
the solicitation (see 5.201).
    (c) Notification to the public of consolidation of contract 
requirements. The SPE or CAO shall publish in the GPE--
    (1) A notice that the agency has determined a consolidation of 
contract requirements is necessary and justified (see 7.107-2) no later 
than 7 days after making the determination; the solicitation may not be 
publicized prior to 7 days after publication of the notice of the 
agency determination; and
    (2) The determination that consolidation is necessary and justified 
with the publication of the solicitation. See 7.107-2 for the required 
content of the determination.
    (d) Notification to the public of substantial bundling of contract 
requirements. The head of the agency shall publish in the GPE--
    (1) A notice that the agency has determined that a procurement 
involves substantial bundling (see 7.107-4) no later than 7 days after 
such determination has been made; the solicitation may not be 
publicized prior to 7 days after the publication of the notice of the 
determination; and
    (2) The rationale for substantial bundling with the publication of 
the solicitation. The rationale is the information required for 
inclusion in the acquisition strategy at 7.107-4(b).
* * * * *
    (f) Annual notification to the public of the rationale for bundled 
requirements. The agency shall publish on its website a list and 
rationale for any bundled requirement for which the agency solicited 
offers or issued an award. The notification shall be made annually 
within 30 days of the agency's data certification regarding the 
validity and verification of data entered in the Federal Procurement 
Data System to the Office of Federal Procurement Policy (see 4.604).
* * * * *
[FR Doc. 2021-22145 Filed 11-3-21; 8:45 am]
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