[Federal Register Volume 70, Number 142 (Tuesday, July 26, 2005)]
[Proposed Rules]
[Pages 43107-43109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-14569]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 5, 7, 14, 37, and 52
[FAR Case 2004-021]
RIN 9000-AK25
Federal Acquisition Regulation; OMB Circular A-76
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are proposing to amend the
Federal Acquisition Regulation (FAR) to provide language that is
consistent with OMB Circular A-76 (Revised), Performance of Commercial
Activities, dated May 29, 2003.
DATES: Interested parties should submit comments in writing on or
before September 26, 2005 to be considered in the formulation of a
final rule.
ADDRESSES: Submit comments identified by FAR case 2004-021 by any of
the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Agency Web Site: http://www.acqnet.gov/far/ProposedRules/proposed.htm. Click on the FAR case number to submit comments.
E-mail: [email protected]. Include FAR case 2004-
021 in the subject line of the message.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann
Duarte, Washington, DC 20405.
Instructions: Please submit comments only and cite FAR case 2004-
021 in all correspondence related to this case. All comments received
will be posted without change to http://www.acqnet.gov/far/ProposedRules/proposed.htm, including any personal information
provided.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (202) 501-4755
for information pertaining to status or publication schedules. For
clarification of content, contact Mr. Gerald Zaffos, Procurement
Analyst, at (202) 208-6091. Please cite FAR case 2004-021.
SUPPLEMENTARY INFORMATION:
A. Background
OMB Circular A-76 (Revised), Performance of Commercial Activities,
was issued in May 2003. The language at FAR Subpart 7.3, and elsewhere,
reflects the policies contained in the previous version of the Circular
and in Office of Federal Procurement Policy (OFPP) Policy Letter 92-1,
Inherently Governmental Functions, which was superseded by the revised
Circular.
To implement the policies of the revised Circular, the Councils
propose to delete the language at FAR Subpart 7.3 and replace it with
clear and concise information that does not duplicate the Circular.
Accordingly, the following changes are proposed:
Delete the reference to a list of commercial activities
contained in an attachment to the previous Circular A-76 in the
definition of inherently governmental functions at FAR 2.101.
Revise FAR 5.205(e) to reflect the procedure contracting
officers must follow when issuing public announcements of public-
private competitions through the Government Point of Entry.
Replace the reference to OFPP Policy Letter 91-2 in FAR
7.105(b)(9) with a reference to Subpart 7.5.
Delete the title and contents of FAR 7.300 and reserve the
section for future use.
Rename FAR 7.301 as Definitions, and state that the terms
used in the subpart are defined by the Circular.
Rename FAR 7.302 and concisely set forth the general
policy purposes of the Circular. Consistent with section 326 of the
Ronald W. Reagan National
[[Page 43108]]
Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375),
specifically naming the Agency Tender Official as an interested party
for purposes of filing a protest with the Government Accountability
Office (GAO) under FAR 33.103. GAO published a final rule to amend its
Bid Protest Regulations on April 14, 2005 (70 FR 19680).
Add a statement at FAR 7.302(c) precluding the use of
discussions to permit correction of deficiencies in sealed bids in
public-private competitions. During the development of the rule, some
members of the Councils questioned whether the ``special
considerations'' language addressing the source selection process in
Attachment B of Circular A-76 was intended to permit discussions to
correct deficiencies under sealed bidding. Officials from the Office of
Federal Procurement Policy (OFPP) advised the Councils that the
Circular should not be read to permit discussions in sealed bidding.
Rather, sealed bidding under A-76 is to be conducted consistent with
FAR Part 14, as stated in paragraph D.5.a of Attachment B of Circular
A-76. OFPP further clarified that the Circular's special considerations
coverage on deficiencies was directed at negotiated source selection
procedures, where the FAR provides for exchanges under FAR 15.306. To
avoid confusion on this point, the Councils, with OFPP concurrence,
propose to add a statement at FAR 7.302(c) to make clear that
contracting officers shall not hold discussions to correct deficiencies
when using sealed bidding in public-private competitions under OMB
Circular A-76. This will ensure that the Circular and the FAR are
applied in a consistent manner.
Delete the contents of FAR 7.303, 7.304, 7.306, and 7.307
and reserve FAR 7.303 and 7.304 for future use.
Revise the language in FAR 7.305 to reflect the
terminology used in the Circular.
Amend FAR 7.500 to delete the reference to OFPP Policy
Letter 92-1.
Delete FAR 14.203-2(b) so that information dissemination
requirements are consistent with the revised Circular.
Revise FAR 37.503(c) to delete the reference to OFPP
Policy Letter 92-1 and replace it with language stating that agency
heads, before contracting for services, must ensure that specific
policies are in place to ensure that inherently governmental functions
are performed by Government personnel.
Rename and revise the provision at 52.207-1 to reflect the
current procedures that are to be followed in a standard public-private
competition.
Rename and revise the provision at 52.207-2 to reflect the
current procedures that are to be followed in a streamlined public-
private competition.
Amend the clause at 52.207-3, Right of First Refusal of
Employment, to cover the group of people directly affected by public-
private competitions under new definitions in the Circular. The
Circular uses the term ``Government personnel'' instead of the more
narrow ``Government employees.'' The clause will be consistent with the
Circular.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The Councils 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, et seq.,
because the rule does not impose any costs on either small or large
businesses. An Initial Regulatory Flexibility Analysis has, therefore,
not been performed. We invite comments from small businesses and other
interested parties. The Councils will consider comments from small
entities concerning the affected FAR Parts 2, 5, 7, 14, 37, and 52 in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 601, et seq. (FAR case
2004-021), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
changes to the FAR do not impose information collection requirements
that require the approval of the Office of Management and Budget under
44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Parts 2, 5, 7, 14, 37, and 52
Government procurement.
Dated: July 18, 2005.
Julia B. Wise,
Director, Contract Policy Division.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 2, 5,
7, 14, 37, and 52 as set forth below:
1. The authority citation for 48 CFR parts 2, 5, 7, 14, 37, and 52
is revised to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
2.101 [Amended]
2. Amend section 2.101 in paragraph (b), in the definition
``Inherently governmental function'', by removing the last sentence in
paragraph (2).
PART 5--PUBLICIZING CONTRACT ACTIONS
3. Amend section 5.205 by revising paragraph (e) to read as
follows:
5.205 Special situations.
* * * * *
(e) Public-private competitions under OMB Circular A-76. (1) The
contracting officer shall make a formal public announcement for each
streamlined or standard competition. The public announcement shall
include, at a minimum, the agency, agency component, location, type of
competition (streamlined or standard), activity being competed,
incumbent service providers, number of Government personnel performing
the activity, name of the Competitive Sourcing Official, name of the
contracting officer, name of the Agency Tender Official, and projected
end date of the competition.
(2) The contracting officer shall announce the end of the
streamlined or standard competition by making a formal public
announcement of the performance decision. (See OMB Circular A-76.)
* * * * *
PART 7--ACQUISITION PLANNING
4. Amend section 7.105 by revising paragraph (b)(9) to read as
follows:
7.105 Contents of written acquisition plans.
* * * * *
(b) * * *
(9) Inherently governmental functions. Address the consideration
given to Subpart 7.5.
* * * * *
5. Revise Subpart 7.3 to read as follows:
Subpart 7.3--Contractor Versus Government Performance
Sec.
7.300 [Reserved]
7.301 Definitions.
7.302 Policy.
7.303 [Reserved]
7.304 [Reserved]
7.305 Solicitation provisions and contract clause.
[[Page 43109]]
7.300 [Reserved]
7.301 Definitions.
Definitions of ``inherently governmental activity'' and other terms
applicable to this subpart are set forth at Attachment D of the Office
of Management and Budget Circular No. A-76 (Revised), Performance of
Commercial Activities, dated May 29, 2003 (the Circular).
7.302 Policy.
(a) The Circular provides that it is the policy of the Government
to--
(1) Perform inherently governmental activities with Government
personnel; and
(2) Subject commercial activities to the forces of competition.
(b) As provided in the Circular, agencies shall--
(1) Not use contractors to perform inherently governmental
activities;
(2) Conduct public-private competitions in accordance with the
provisions of the Circular and, as applicable, these regulations;
(3) Give appropriate consideration relative to cost when making
performance decisions between agency and contractor performance in
public-private competitions;
(4) Consider the Agency Tender Official an interested party in
accordance with 31 U.S.C. 3551 to 3553 for purposes of filing a protest
at the Government Accountability Office; and
(5) Hear contests in accordance with OMB Circular A-76, Attachment
B, paragraph F.
(c) When using sealed bidding in public-private competitions under
OMB Circular A-76, contracting officers shall not hold discussions to
correct deficiencies.
7.303 [Reserved]
7.304 [Reserved]
7.305 Solicitation provisions and contract clause.
(a) The contracting officer shall, when soliciting offers and
tenders, insert in solicitations issued for standard competitions the
provision at 52.207-1, Notice of Standard Competition.
(b) The contracting officer shall, when soliciting offers, insert
in solicitations issued for streamlined competitions the provision at
52.207-2, Notice of Streamlined Competition.
(c) The contracting officer shall insert the clause at 52.207-3,
Right of First Refusal of Employment, in all solicitations which may
result in a conversion from in-house performance to contract
performance of work currently being performed by the Government and in
contracts that result from the solicitations, whether or not a public-
private competition is conducted. The 10-day period in the clause may
be varied by the contracting officer up to a period of 90 days.
7.500 [Amended]
6. Amend section 7.500 by removing the last sentence.
PART 14--SEALED BIDDING
14.203-2 [Amended]
7. Amend section 14.203-2 by removing the paragraph designation
``(a)'' and by removing paragraph (b).
PART 37--SERVICE CONTRACTING
8. Amend section 37.503 by revising paragraph (c) to read as
follows:
37.503 Agency-head responsibilities.
* * * * *
(c) Specific procedures are in place before contracting for
services to ensure that inherently governmental functions are performed
by Government personnel; and
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
9. Revise the section heading and text of section 52.207-1 to read
as follows:
52.207-1 Notice of Standard Competition.
As prescribed in 7.305(a), insert the following provision:
NOTICE OF STANDARD COMPETITION (DATE)
(a) This solicitation is part of a standard competition under
Office of Management and Budget Circular No. A-76 (Revised),
Performance of Commercial Activities, dated May 29, 2003 (hereafter
``the Circular''), to determine whether to accomplish the specified
work under contract or by Government performance.
(b) The Government will evaluate private sector offers, the
agency tender, and public reimbursable tenders, as provided in this
solicitation and the Circular.
(c) A performance decision resulting from this standard
competition will be publicly announced in accordance with the
Circular. If the performance decision favors a private sector
offeror, a contract will be awarded. If the performance decision
favors an agency or a public reimbursable tender, the Contracting
Officer shall establish, respectively, either a Most Efficient
Organization letter of obligation or a fee-for-service agreement, as
those terms are defined in the Circular.
(d) As provided in the Circular, directly interested parties may
file contests, which are governed by the procedures in FAR 33.103.
Until resolution of any contest, or the expiration of the time for
filing a contest, only legal agents for directly interested parties
shall have access to the certified standard competition form, the
agency tender, and public reimbursable tenders.
(End of provision)
10. Revise section 52.207-2 to read as follows:
52.207-2 Notice of Streamlined Competition.
As prescribed in 7.305(b), insert the following provision:
NOTICE OF STREAMLINED COMPETITION (DATE)
(a) This solicitation is part of a streamlined competition under
Office of Management and Budget Circular No. A-76 (Revised),
Performance of Commercial Activities, dated May 29, 2003 (hereafter
``the Circular''), to determine whether to accomplish the specified
work under contract or by Government performance.
(b) The Government will evaluate the cost of private sector and
Agency or public reimbursable performance, as provided in this
solicitation and the Circular.
(c) A performance decision resulting from this streamlined
competition will be publicly announced in accordance with the
Circular. If the performance decision favors private sector
performance, the Contracting Officer shall either award a contract
or issue a competitive solicitation for private sector offers. If
the performance decision favors Agency or public reimbursable
performance, the Agency shall establish, respectively, either a
letter of obligation or a fee-for-service agreement, as those terms
are defined in the Circular.
(End of provision)
52.207-3 [Amended]
11. Amend section 52.207-3 by revising the date of the clause to
read ``(DATE)''; and by removing from paragraphs (a) and (b) of the
clause the word ``employees'' and adding ``personnel'' in its place.
[FR Doc. 05-14569 Filed 7-25-05; 8:45 am]
BILLING CODE 6820-EP-S