Federal Acquisition Regulation: Prohibition on the Use of Reverse Auctions for Complex, Specialized, or Substantial Design and Construction Services, 70157-70160 [2024-19024]
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Federal Register / Vol. 89, No. 168 / Thursday, August 29, 2024 / Proposed Rules
Rhode Island for these revisions by a
final action, which can be found in the
‘‘Rules and Regulations’’ section of this
Federal Register. We have explained the
reasons for this authorization in the
preamble to the final action. The action
also corrects errors made in the State
authorization citations published in the
March 12, 1990, March 5, 1992, October
2, 1992, and August 9, 2002 Federal
Register. Unless EPA receives written
comments that oppose this
authorization during the comment
period, the final action will become
effective on the date it establishes and
EPA will not take further action on this
proposal.
David W. Cash,
Regional Administrator, U.S. EPA Region 1.
[FR Doc. 2024–19035 Filed 8–28–24; 8:45 am]
BILLING CODE 6560–50–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 2, 17, 36, and 52
DATES:
Send your written comments by
September 30, 2024.
[FAR Case 2023–003; Docket No. FAR–
2023–0003; Sequence No. 1]
Submit your comments,
identified by Docket ID No. EPA–R01–
RCRA–2023–0612 by mail to Liz
McCarthy or Joe Hayes, RCRA Waste
Management and Lead Branch; Land,
Chemicals, and Redevelopment
Division; EPA Region 1, 5 Post Office
Square, Suite 100 (Mailcode 07–1),
Boston, MA 02109–3912. You may also
submit comments electronically or
through hand delivery/courier by
following the detailed instructions in
the ADDRESSES section of the final action
located in the Rules section of this
Federal Register.
RIN 9000–AO51
ADDRESSES:
Liz
McCarthy or Joe Hayes at (617) 918–
1447; (617) 918–1362, mccarthy.liz@
epa.gov; Hayes.Joseph@epa.gov.
FOR FURTHER INFORMATION CONTACT:
In the
‘‘Rules and Regulations’’ section of this
Federal Register, EPA is authorizing the
revisions by a final action. EPA did not
make a proposal prior to the final action
because we believe this action is not
controversial and do not expect
comments that oppose it. We have
explained the reasons for this
authorization in the preamble of the
final action.
Unless EPA receives written
comments that oppose this
authorization during the comment
period, the final action will become
effective on the date it establishes, and
EPA will not take further action on this
proposal. If EPA receives comments that
oppose the authorization, we will
withdraw the final action and it will not
take immediate effect. EPA will then
respond to public comments in a later
final action based on this proposal. You
may not have another opportunity for
SUPPLEMENTARY INFORMATION:
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comment. If you want to comment on
this action, you must do so at this time.
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Federal Acquisition Regulation:
Prohibition on the Use of Reverse
Auctions for Complex, Specialized, or
Substantial Design and Construction
Services
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Proposed rule.
AGENCY:
DoD, GSA, and NASA are
proposing to amend the Federal
Acquisition Regulation (FAR) to
implement a section of the Construction
Consensus Improvement Act of 2021
that prohibits the use of reverse auctions
for certain construction services.
DATES: Interested parties should submit
written comments to the Regulatory
Secretariat Division at the address
shown below on or before October 28,
2024, to be considered in the formation
of the final rule.
ADDRESSES: Submit comments in
response to FAR Case 2023–003 to the
Federal eRulemaking portal at https://
www.regulations.gov by searching for
‘‘FAR Case 2023–003’’. Select the link
‘‘Comment Now’’ that corresponds with
‘‘FAR Case 2023–003’’. Follow the
instructions provided on the ‘‘Comment
Now’’ screen. Please include your name,
company name (if any), and ‘‘FAR Case
2023–003’’ on your attached document.
If your comment cannot be submitted
using https://www.regulations.gov, call
or email the points of contact in the FOR
FURTHER INFORMATION CONTACT section of
this document for alternate instructions.
Instructions: Please submit comments
only and cite ‘‘FAR Case 2023–003’’ in
all correspondence related to this case.
Comments received generally will be
posted without change to https://
SUMMARY:
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70157
www.regulations.gov, including any
personal and/or business confidential
information provided. Public comments
may be submitted as an individual, as
an organization, or anonymously (see
frequently asked questions at https://
www.regulations.gov/faq). To confirm
receipt of your comment(s), please
check https://www.regulations.gov,
approximately two to three days after
submission to verify posting.
FOR FURTHER INFORMATION CONTACT: For
clarification of content, contact Mr.
Michael O. Jackson, Procurement
Analyst, at 202–821–9776 or by email at
michaelo.jackson@gsa.gov. For
information pertaining to status,
publication schedules, or alternate
instructions for submitting comments if
https://www.regulations.gov cannot be
used, contact the Regulatory Secretariat
Division at 202–501–4755 or
GSARegSec@gsa.gov. Please cite FAR
Case 2023–003.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing
to revise the FAR to implement section
2 of the Construction Consensus
Procurement Improvement Act of 2021
(Pub. L. 117–28). Section 2 of the
Construction Consensus Procurement
Improvement Act of 2021 amended
section 402 of Title IV of Division U of
the Consolidated Appropriations Act,
2021 (Pub. L. 116–260) entitled the
Construction Consensus Procurement
Improvement Act of 2020 to require
rulemaking to promulgate a definition of
‘‘complex, specialized, or substantial
design and construction services’’,
which includes site planning and
design; architectural and engineering
services (as defined in 40 U.S.C. 1102);
interior design; performance of
substantial construction work for
facility, infrastructure, and
environmental restoration projects; and
construction or substantial alteration of
public buildings or public works. The
statute prohibits the use of reverse
auctions for such services having a
value that exceeds the simplified
acquisition threshold (SAT).
II. Discussion and Analysis
The proposed rule establishes a new
definition at FAR 2.101 for ‘‘complex,
specialized, or substantial design and
construction services’’ that reflects the
statutory definition to support its use at
FAR 17.803 and 36.103. In addition, the
definition of ‘‘reverse auction’’ in FAR
2.101 is revised to better reflect the
statutory definition provided in the
Construction Consensus Procurement
Improvement Act of 2021.
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Federal Register / Vol. 89, No. 168 / Thursday, August 29, 2024 / Proposed Rules
The proposed rule implements the
prohibition against using reverse
auctions for the procurement of
complex, specialized, or substantial
design and construction services
exceeding the SAT at FAR 36.103,
Methods of contracting. This placement
will reinforce to contracting officers the
need to comply with the statutory
prohibition. While the statute does not
prohibit the use of reverse auctions for
the subject services at or below the SAT,
a reverse auction may only be used if
market research indicates it is
appropriate (see FAR 17.802(a)) and not
prohibited by regulation or statute (see
FAR 17.803, 36.104, and 36.601).
The FAR identifies two types of
procurements for which reverse
auctions may not be used, regardless of
dollar value:
—Procurements for the design and
construction of a public building,
facility or work using the two-phase
design-build selection procedures
authorized by 10 U.S.C. 3241 and 41
U.S.C. 3309, as implemented at FAR
36.104, may not be conducted using a
reverse auction.
—Procurements for architectural and
engineering services subject to 40
U.S.C. chapter 11, commonly known
as the Brooks Architect Engineer Act,
may not be awarded using reverse
auctions because reverse auctions do
not comply with the qualificationsbased selection processes required by
statute and implemented at FAR
subpart 36.6.
III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold (SAT) and for Commercial
Products (Including Commercially
Available Off-the-Shelf (COTS) Items)
or for Commercial Services
This proposed rule does not impose
any new requirements on contracts at or
below the simplified acquisition
threshold, for commercial products
including commercially available offthe-shelf items, or for commercial
services.
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IV. Expected Impact of the Proposed
Rule
The proposed rule is not expected to
have a significant impact on the public
or the Government because the
rulemaking does not supersede current
statutory direction on the use of FAR
part 36 procedures for construction.
Contracting officers are still required to
conduct market research to determine
the most appropriate contracting
method for the particular procurement.
Requirements for sealed bidding,
design-build construction, and
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architect-engineering services remain
unchanged.
Offerors participating in competitive
procurements that are valued at or
below the SAT will still be provided
advance notices and solicitations in
accordance with FAR 36.211 and for
actions anticipated to be awarded to a
small business, 15 U.S.C. 644(w). Use of
a reverse auction as the method of
obtaining pricing does not impact these
requirements.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 (as
amended by E.O. 14094) 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.
VI. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect
this proposed rule to have a significant
economic impact on a substantial
number of small entities within the
meaning of the Regulatory Flexibility
Act, 5 U.S.C. 601–612, because the
rulemaking is not expected to change
how construction services valued above
the SAT are conducted while providing
some flexibility for certain awards
valued at or below the SAT. However,
an Initial Regulatory Flexibility
Analysis (IRFA) has been performed and
is summarized as follows:
DoD, GSA, and NASA are proposing to
amend the Federal Acquisition Regulation
(FAR) to implement section 2 of the
Construction Consensus Procurement
Improvement Act of 2021 (Pub. L. 117–28),
which prohibits the use of reverse auctions
for complex, specialized, or substantial
design and construction services exceeding
the simplified acquisition threshold (SAT).
DoD, GSA, and NASA published FAR case
2015–038, Reverse Auction Guidance, as a
final rule at 89 FR 61327 on July 30, 2024,
with an effective date of August 29, 2024.
The final rule added policy on the use of
reverse auctions to the FAR.
The objective of the proposed rule is to
establish a definition for complex,
specialized, or substantial design and
construction services and to implement the
statutory prohibition against using reverse
auctions for such services that are valued
above the SAT. The legal basis for the rule
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is the Construction Consensus Procurement
Improvement Act of 2021 (Pub. L. 117–28).
Promulgation of the FAR is authorized by 40
U.S.C. 121(c); 10 U.S.C. chapter 4 and 10
U.S.C. chapter 137 legacy provisions (see 10
U.S.C. 3016); and 51 U.S.C 20113.
The proposed rule will apply to all entities
submitting offers in response to solicitations
for construction services pursuant to FAR
part 36; however, the impact of the rule on
construction services valued above the SAT
is expected to be de minimis because the rule
maintains current direction.
The rule may impact entities submitting
offers in response to solicitations for
construction services valued at or below the
SAT, if a contracting officer determines that
market research supports the use of a reverse
auction and the use of a reverse auction is
not otherwise prohibited by statute (i.e., 40
U.S.C. chapter 11, commonly known as the
Brooks Architect Engineer Act).
Since the Government does not currently
collect data on the number of awards that
utilized a reverse auction to obtain pricing,
the burden estimates are based upon data
obtained from the Federal Procurement Data
System (FPDS) for all construction services.
The Government assumes that reverse
auctions are not widely used for construction
services, so the actual number of
procurements utilizing reverse auctions is
estimated to be only a small fraction of the
total awards described below.
Data obtained from FPDS for fiscal years
2020, 2021, and 2022 indicates that an
average of 1,318 unique small entities were
awarded an estimated 2,644 construction
service awards valued above the SAT
annually. Data obtained from FPDS for the
same period indicates that an average of
1,277 unique small entities were awarded an
estimated 3,064 construction service awards
valued at or below the SAT annually. Of
those actions, approximately 122 small
entities were awarded an estimated 577
construction service awards annually using
procedures other than FAR part 36. For
awards at or below the SAT, the use of
reverse auctions to obtain pricing may be
appropriate.
The proposed rule does not include
additional reporting or recordkeeping
requirements.
The proposed rule does not duplicate,
overlap, or conflict with any other Federal
rules.
There are no available alternatives to the
proposed rule to accomplish the desired
objective.
The Regulatory Secretariat Division
has submitted a copy of the IRFA to the
Chief Counsel for Advocacy of the Small
Business Administration. A copy of the
IRFA may be obtained from the
Regulatory Secretariat Division. DoD,
GSA, and NASA invite comments from
small business concerns and other
interested parties on the expected
impact of this proposed rule on small
entities.
DoD, GSA, and NASA will also
consider comments from small entities
concerning the existing regulations in
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subparts affected by the proposed rule
in accordance with 5 U.S.C. 610.
Interested parties must submit such
comments separately and should cite 5
U.S.C. 610 (FAR Case 2023–003), in
correspondence.
VII. Paperwork Reduction Act
This proposed 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).
PART 17—SPECIAL CONTRACTING
METHODS
List of Subjects in 48 CFR Parts 2, 17,
36, and 52
3. Amend section 17.803 by—
a. Revising paragraph (a);
b. Removing paragraph (b); and
c. Redesignating paragraphs (c) and
(d) as paragraphs (b) and (c).
The revision reads as follows:
■
■
■
■
Government procurement.
William F. Clark,
Director, Office of Government-Wide
Acquisition Policy, Office of Acquisition
Policy, Office of Government-Wide Policy.
Therefore, DoD, GSA, and NASA
propose amending 48 CFR parts 2, 17,
36, and 52 as set forth below:
■ 1. The authority citation for 48 CFR
parts 2, 17, 36, and 52 continues to read
as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 4 and 10 U.S.C. chapter 137 legacy
provisions (see 10 U.S.C. 3016); and 51
U.S.C. 20113.
Definitions.
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*
*
*
*
Complex, specialized, or substantial
design and construction services
(section 2 of the Construction
Consensus Procurement Improvement
Act of 2021 (Pub. L. 117–28)) means—
(1) Site planning and landscape
design;
(2) Architectural and engineering
services (as defined in 40 U.S.C. 1102);
(3) Interior design;
(4) Performance of substantial
construction work for facility,
infrastructure, and environmental
restoration projects; or
(5) Construction or substantial
alteration of public buildings or public
works.
*
*
*
*
*
Reverse auction means a real-time
auction generally conducted through an
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Applicability.
*
*
*
*
*
(a) Complex, specialized, or
substantial design and construction
services as defined in 2.101, valued
above the simplified acquisition
threshold (see 36.103(c));
*
*
*
*
*
4. Amend section 36.103 by adding
paragraph (c) to read as follows:
■
2. Amend section 2.101 by—
a. Adding in alphabetic order the
definition of ‘‘Complex, specialized, or
substantial design and construction
services’’; and
■ b. Revising the definition of ‘‘Reverse
auction’’.
The addition and revision read as
follows:
■
■
*
17.803
PART 36—CONSTRUCTION AND
ARCHITECT–ENGINEER CONTRACTS
PART 2—DEFINITIONS OF WORDS
AND TERMS
2.101
electronic medium among two or more
offerors who compete by submitting
bids for an award of a supply contract,
service contract, purchase order, or
blanket purchase agreement, or for an
award of an order under a contract or
blanket purchase agreement, with the
ability to submit revised lower bids at
any time before the closing of the
auction (section 2 of the Construction
Consensus Procurement Improvement
Act of 2021 (Pub. L. 117–28)).
*
*
*
*
*
36.103
Methods of contracting.
*
*
*
*
*
(c) Contracting officers shall not use
reverse auctions for an award of a
contract, blanket purchase agreement, or
order if the award is anticipated to
exceed the simplified acquisition
threshold for complex, specialized, or
substantial design and construction
services in accordance with the
Construction Consensus Procurement
Improvement Act of 2021 (Pub. L. 117–
28). Contracting officers may use reverse
auctions for procurements for complex,
specialized, or substantial design and
construction services at or below the
simplified acquisition threshold—
(1) If market research indicates it may
be appropriate (see 17.802(a)); and
(2) Use of a reverse auction is not
otherwise prohibited by regulation or
statute (see 17.803, 36.104, and 36.601).
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
5. Amend section 52.217–10 by—
a. Revising the date of the provision;
and
■ b. In paragraph (a), revising the
definition of ‘‘Reverse auction’’.
■
■
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70159
The revisions read as follows:
52.217–10
Reverse Auction.
*
*
*
*
*
Reverse Auction (DATE)
(a) * * *
Reverse auction means a real-time
auction generally conducted through an
electronic medium among two or more
offerors who compete by submitting
bids for an award of a supply contract,
service contract, purchase order, or
blanket purchase agreement, or for an
award of an order under a contract or
blanket purchase agreement, with the
ability to submit revised lower bids at
any time before the closing of the
auction (Section 2 of the Construction
Consensus Procurement Improvement
Act of 2021 (Pub. L. 117–28)).
*
*
*
*
*
■ 6. Amend section 52.217–11 by—
■ a. Revising the date of the clause; and
■ b. In paragraph (a), revising the
definition of ‘‘Reverse auction’’.
The revisions read as follows:
52.217–11
Reverse Auction-Orders.
*
*
*
*
*
Reverse Auction—Orders (DATE)
(a) * * *
Reverse auction means a real-time
auction generally conducted through an
electronic medium among two or more
offerors who compete by submitting
bids for an award of a supply contract,
service contract, purchase order, or
blanket purchase agreement, or for an
award of an order under a contract or
blanket purchase agreement, with the
ability to submit revised lower bids at
any time before the closing of the
auction (Section 2 of the Construction
Consensus Procurement Improvement
Act of 2021 (Pub. L. 117–28)).
*
*
*
*
*
■ 7. Amend section 52.217–12 by—
■ a. Revising the date of the clause; and
■ b. In paragraph (a), revising the
introductory text and the definition of
‘‘Reverse auction’’.
The revisions read as follows:
52.217–12
Reverse Auction Services.
*
*
*
*
*
Reverse Auction Services (DATE)
(a) Definitions. As used in this
clause—
*
*
*
*
*
Reverse auction means a real-time
auction generally conducted through an
electronic medium among two or more
offerors who compete by submitting
bids for an award of a supply contract,
service contract, purchase order, or
blanket purchase agreement, or for an
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award of an order under a contract or
blanket purchase agreement, with the
ability to submit revised lower bids at
any time before the closing of the
auction (Section 2 of the Construction
Consensus Procurement Improvement
Act of 2021 (Pub. L. 117–28)).
*
*
*
*
*
[FR Doc. 2024–19024 Filed 8–28–24; 8:45 am]
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]]>Agencies
[Federal Register Volume 89, Number 168 (Thursday, August 29, 2024)]
[Proposed Rules]
[Pages 70157-70160]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-19024]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 17, 36, and 52
[FAR Case 2023-003; Docket No. FAR-2023-0003; Sequence No. 1]
RIN 9000-AO51
Federal Acquisition Regulation: Prohibition on the Use of Reverse
Auctions for Complex, Specialized, or Substantial Design and
Construction Services
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to implement a section of the Construction
Consensus Improvement Act of 2021 that prohibits the use of reverse
auctions for certain construction services.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat Division at the address shown below on or before
October 28, 2024, to be considered in the formation of the final rule.
ADDRESSES: Submit comments in response to FAR Case 2023-003 to the
Federal eRulemaking portal at https://www.regulations.gov by searching
for ``FAR Case 2023-003''. Select the link ``Comment Now'' that
corresponds with ``FAR Case 2023-003''. Follow the instructions
provided on the ``Comment Now'' screen. Please include your name,
company name (if any), and ``FAR Case 2023-003'' on your attached
document. If your comment cannot be submitted using https://www.regulations.gov, call or email the points of contact in the FOR
FURTHER INFORMATION CONTACT section of this document for alternate
instructions.
Instructions: Please submit comments only and cite ``FAR Case 2023-
003'' in all correspondence related to this case. Comments received
generally will be posted without change to https://www.regulations.gov,
including any personal and/or business confidential information
provided. Public comments may be submitted as an individual, as an
organization, or anonymously (see frequently asked questions at https://www.regulations.gov/faq). To confirm receipt of your comment(s),
please check https://www.regulations.gov, approximately two to three
days after submission to verify posting.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Mr. Michael O. Jackson, Procurement Analyst, at 202-821-9776 or by
email at [email protected]. For information pertaining to
status, publication schedules, or alternate instructions for submitting
comments if https://www.regulations.gov cannot be used, contact the
Regulatory Secretariat Division at 202-501-4755 or [email protected].
Please cite FAR Case 2023-003.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing to revise the FAR to implement
section 2 of the Construction Consensus Procurement Improvement Act of
2021 (Pub. L. 117-28). Section 2 of the Construction Consensus
Procurement Improvement Act of 2021 amended section 402 of Title IV of
Division U of the Consolidated Appropriations Act, 2021 (Pub. L. 116-
260) entitled the Construction Consensus Procurement Improvement Act of
2020 to require rulemaking to promulgate a definition of ``complex,
specialized, or substantial design and construction services'', which
includes site planning and design; architectural and engineering
services (as defined in 40 U.S.C. 1102); interior design; performance
of substantial construction work for facility, infrastructure, and
environmental restoration projects; and construction or substantial
alteration of public buildings or public works. The statute prohibits
the use of reverse auctions for such services having a value that
exceeds the simplified acquisition threshold (SAT).
II. Discussion and Analysis
The proposed rule establishes a new definition at FAR 2.101 for
``complex, specialized, or substantial design and construction
services'' that reflects the statutory definition to support its use at
FAR 17.803 and 36.103. In addition, the definition of ``reverse
auction'' in FAR 2.101 is revised to better reflect the statutory
definition provided in the Construction Consensus Procurement
Improvement Act of 2021.
[[Page 70158]]
The proposed rule implements the prohibition against using reverse
auctions for the procurement of complex, specialized, or substantial
design and construction services exceeding the SAT at FAR 36.103,
Methods of contracting. This placement will reinforce to contracting
officers the need to comply with the statutory prohibition. While the
statute does not prohibit the use of reverse auctions for the subject
services at or below the SAT, a reverse auction may only be used if
market research indicates it is appropriate (see FAR 17.802(a)) and not
prohibited by regulation or statute (see FAR 17.803, 36.104, and
36.601).
The FAR identifies two types of procurements for which reverse
auctions may not be used, regardless of dollar value:
--Procurements for the design and construction of a public building,
facility or work using the two-phase design-build selection procedures
authorized by 10 U.S.C. 3241 and 41 U.S.C. 3309, as implemented at FAR
36.104, may not be conducted using a reverse auction.
--Procurements for architectural and engineering services subject to 40
U.S.C. chapter 11, commonly known as the Brooks Architect Engineer Act,
may not be awarded using reverse auctions because reverse auctions do
not comply with the qualifications-based selection processes required
by statute and implemented at FAR subpart 36.6.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Products (Including Commercially
Available Off-the-Shelf (COTS) Items) or for Commercial Services
This proposed rule does not impose any new requirements on
contracts at or below the simplified acquisition threshold, for
commercial products including commercially available off-the-shelf
items, or for commercial services.
IV. Expected Impact of the Proposed Rule
The proposed rule is not expected to have a significant impact on
the public or the Government because the rulemaking does not supersede
current statutory direction on the use of FAR part 36 procedures for
construction. Contracting officers are still required to conduct market
research to determine the most appropriate contracting method for the
particular procurement. Requirements for sealed bidding, design-build
construction, and architect-engineering services remain unchanged.
Offerors participating in competitive procurements that are valued
at or below the SAT will still be provided advance notices and
solicitations in accordance with FAR 36.211 and for actions anticipated
to be awarded to a small business, 15 U.S.C. 644(w). Use of a reverse
auction as the method of obtaining pricing does not impact these
requirements.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 (as amended by E.O. 14094) 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.
VI. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this proposed rule to have a
significant economic impact on a substantial number of small entities
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612,
because the rulemaking is not expected to change how construction
services valued above the SAT are conducted while providing some
flexibility for certain awards valued at or below the SAT. However, an
Initial Regulatory Flexibility Analysis (IRFA) has been performed and
is summarized as follows:
DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to implement section 2 of the
Construction Consensus Procurement Improvement Act of 2021 (Pub. L.
117-28), which prohibits the use of reverse auctions for complex,
specialized, or substantial design and construction services
exceeding the simplified acquisition threshold (SAT). DoD, GSA, and
NASA published FAR case 2015-038, Reverse Auction Guidance, as a
final rule at 89 FR 61327 on July 30, 2024, with an effective date
of August 29, 2024. The final rule added policy on the use of
reverse auctions to the FAR.
The objective of the proposed rule is to establish a definition
for complex, specialized, or substantial design and construction
services and to implement the statutory prohibition against using
reverse auctions for such services that are valued above the SAT.
The legal basis for the rule is the Construction Consensus
Procurement Improvement Act of 2021 (Pub. L. 117-28). Promulgation
of the FAR is authorized by 40 U.S.C. 121(c); 10 U.S.C. chapter 4
and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016);
and 51 U.S.C 20113.
The proposed rule will apply to all entities submitting offers
in response to solicitations for construction services pursuant to
FAR part 36; however, the impact of the rule on construction
services valued above the SAT is expected to be de minimis because
the rule maintains current direction.
The rule may impact entities submitting offers in response to
solicitations for construction services valued at or below the SAT,
if a contracting officer determines that market research supports
the use of a reverse auction and the use of a reverse auction is not
otherwise prohibited by statute (i.e., 40 U.S.C. chapter 11,
commonly known as the Brooks Architect Engineer Act).
Since the Government does not currently collect data on the
number of awards that utilized a reverse auction to obtain pricing,
the burden estimates are based upon data obtained from the Federal
Procurement Data System (FPDS) for all construction services. The
Government assumes that reverse auctions are not widely used for
construction services, so the actual number of procurements
utilizing reverse auctions is estimated to be only a small fraction
of the total awards described below.
Data obtained from FPDS for fiscal years 2020, 2021, and 2022
indicates that an average of 1,318 unique small entities were
awarded an estimated 2,644 construction service awards valued above
the SAT annually. Data obtained from FPDS for the same period
indicates that an average of 1,277 unique small entities were
awarded an estimated 3,064 construction service awards valued at or
below the SAT annually. Of those actions, approximately 122 small
entities were awarded an estimated 577 construction service awards
annually using procedures other than FAR part 36. For awards at or
below the SAT, the use of reverse auctions to obtain pricing may be
appropriate.
The proposed rule does not include additional reporting or
recordkeeping requirements.
The proposed rule does not duplicate, overlap, or conflict with
any other Federal rules.
There are no available alternatives to the proposed rule to
accomplish the desired objective.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the IRFA may be obtained from the Regulatory
Secretariat Division. DoD, GSA, and NASA invite comments from small
business concerns and other interested parties on the expected impact
of this proposed rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in
[[Page 70159]]
subparts affected by the proposed rule in accordance with 5 U.S.C. 610.
Interested parties must submit such comments separately and should cite
5 U.S.C. 610 (FAR Case 2023-003), in correspondence.
VII. Paperwork Reduction Act
This proposed 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).
List of Subjects in 48 CFR Parts 2, 17, 36, and 52
Government procurement.
William F. Clark,
Director, Office of Government-Wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-Wide Policy.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 2, 17,
36, and 52 as set forth below:
0
1. The authority citation for 48 CFR parts 2, 17, 36, and 52 continues
to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C.
chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C.
20113.
PART 2--DEFINITIONS OF WORDS AND TERMS
0
2. Amend section 2.101 by--
0
a. Adding in alphabetic order the definition of ``Complex, specialized,
or substantial design and construction services''; and
0
b. Revising the definition of ``Reverse auction''.
The addition and revision read as follows:
2.101 Definitions.
* * * * *
Complex, specialized, or substantial design and construction
services (section 2 of the Construction Consensus Procurement
Improvement Act of 2021 (Pub. L. 117-28)) means--
(1) Site planning and landscape design;
(2) Architectural and engineering services (as defined in 40 U.S.C.
1102);
(3) Interior design;
(4) Performance of substantial construction work for facility,
infrastructure, and environmental restoration projects; or
(5) Construction or substantial alteration of public buildings or
public works.
* * * * *
Reverse auction means a real-time auction generally conducted
through an electronic medium among two or more offerors who compete by
submitting bids for an award of a supply contract, service contract,
purchase order, or blanket purchase agreement, or for an award of an
order under a contract or blanket purchase agreement, with the ability
to submit revised lower bids at any time before the closing of the
auction (section 2 of the Construction Consensus Procurement
Improvement Act of 2021 (Pub. L. 117-28)).
* * * * *
PART 17--SPECIAL CONTRACTING METHODS
0
3. Amend section 17.803 by--
0
a. Revising paragraph (a);
0
b. Removing paragraph (b); and
0
c. Redesignating paragraphs (c) and (d) as paragraphs (b) and (c).
The revision reads as follows:
17.803 Applicability.
* * * * *
(a) Complex, specialized, or substantial design and construction
services as defined in 2.101, valued above the simplified acquisition
threshold (see 36.103(c));
* * * * *
PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
0
4. Amend section 36.103 by adding paragraph (c) to read as follows:
36.103 Methods of contracting.
* * * * *
(c) Contracting officers shall not use reverse auctions for an
award of a contract, blanket purchase agreement, or order if the award
is anticipated to exceed the simplified acquisition threshold for
complex, specialized, or substantial design and construction services
in accordance with the Construction Consensus Procurement Improvement
Act of 2021 (Pub. L. 117-28). Contracting officers may use reverse
auctions for procurements for complex, specialized, or substantial
design and construction services at or below the simplified acquisition
threshold--
(1) If market research indicates it may be appropriate (see
17.802(a)); and
(2) Use of a reverse auction is not otherwise prohibited by
regulation or statute (see 17.803, 36.104, and 36.601).
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
5. Amend section 52.217-10 by--
0
a. Revising the date of the provision; and
0
b. In paragraph (a), revising the definition of ``Reverse auction''.
The revisions read as follows:
52.217-10 Reverse Auction.
* * * * *
Reverse Auction (DATE)
(a) * * *
Reverse auction means a real-time auction generally conducted
through an electronic medium among two or more offerors who compete by
submitting bids for an award of a supply contract, service contract,
purchase order, or blanket purchase agreement, or for an award of an
order under a contract or blanket purchase agreement, with the ability
to submit revised lower bids at any time before the closing of the
auction (Section 2 of the Construction Consensus Procurement
Improvement Act of 2021 (Pub. L. 117-28)).
* * * * *
0
6. Amend section 52.217-11 by--
0
a. Revising the date of the clause; and
0
b. In paragraph (a), revising the definition of ``Reverse auction''.
The revisions read as follows:
52.217-11 Reverse Auction-Orders.
* * * * *
Reverse Auction--Orders (DATE)
(a) * * *
Reverse auction means a real-time auction generally conducted
through an electronic medium among two or more offerors who compete by
submitting bids for an award of a supply contract, service contract,
purchase order, or blanket purchase agreement, or for an award of an
order under a contract or blanket purchase agreement, with the ability
to submit revised lower bids at any time before the closing of the
auction (Section 2 of the Construction Consensus Procurement
Improvement Act of 2021 (Pub. L. 117-28)).
* * * * *
0
7. Amend section 52.217-12 by--
0
a. Revising the date of the clause; and
0
b. In paragraph (a), revising the introductory text and the definition
of ``Reverse auction''.
The revisions read as follows:
52.217-12 Reverse Auction Services.
* * * * *
Reverse Auction Services (DATE)
(a) Definitions. As used in this clause--
* * * * *
Reverse auction means a real-time auction generally conducted
through an electronic medium among two or more offerors who compete by
submitting bids for an award of a supply contract, service contract,
purchase order, or blanket purchase agreement, or for an
[[Page 70160]]
award of an order under a contract or blanket purchase agreement, with
the ability to submit revised lower bids at any time before the closing
of the auction (Section 2 of the Construction Consensus Procurement
Improvement Act of 2021 (Pub. L. 117-28)).
* * * * *
[FR Doc. 2024-19024 Filed 8-28-24; 8:45 am]
BILLING CODE 6820-EP-P
