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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: August 23, 2001

SUBJECT: Federal Acquisition Regulation (FAR); Task-Order and Delivery-Order Contracts

SOURCE: Federal Register, August 23, 2001, Vol. 66, No. 164, page 44517

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Proposed Rule

SYNOPSIS: It is proposed that the FAR be amended to further implement the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106-65), Section 804, Guidance on Use of Task Order and Delivery Order Contracts, particularly subsections (a) and (b), which focus primarily on appropriate use of task-order and delivery-order contracts and specific steps agencies should take when placing orders under task-order and delivery-order contracts established by another agency. The proposed amendment also clarifies that written acquisition plans may be required for orders as determined by the agency head.

EDITOR'S NOTE: For more on earlier efforts to implement Section 804 of Public Law 106-65, see the April 25, 2000, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 97-17, Miscellaneous Amendments."

DATES: Comments on the proposed rule must be submitted no later than October 22, 2001.

ADDRESSES: Submit comments to General Services Administration, FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405; e-mail to: farcase.1999-303@gsa.gov.

FOR FURTHER INFORMATION CONTACT: Julia Wise, 202-208-1168.

SUPPLEMENTAL INFORMATION: Because of concern that contracting officers are using task-order and delivery-order contracts to avoid the requirements of the Competition in Contracting Act, and that the government may not be obtaining the full benefit of these types of contracts, Congress included Section 804 in the FY 2000 National Defense Authorization Act. Section 804 requires that the FAR be revised "to provide guidance to agencies on the appropriate use of task order and delivery order contracts." Section 804 was initially implemented in the FAR through amendments contained in FAC 97-17. This proposed rule would make the following changes to the FAR to strengthen the implementation of Section 804:

• To FAR 2.101, Definitions, would be added the terms:
  
  
  • "Governmentwide acquisition contract" ("a task-order or delivery-order contract for information technology established by one agency for Governmentwide use that is operated (1) by an executive agent designated by the Office of Management and Budget pursuant to Section 5112(e) of the Clinger-Cohen Act, 40 U.S.C. 1412(e); or (2) under a delegation of procurement authority issued by the General Services Administration (GSA) prior to August 7, 1996, under authority granted GSA by the Brooks Act, 40 U.S.C. 759 (repealed by Pub. L. 104-106). The Economy Act does not apply to orders under a Governmentwide acquisition contract."); and
    
    
  • "Multi-agency contract" ("a task or delivery order contract established by one agency for use by government agencies to obtain supplies and services, consistent with the Economy Act. Multi-agency contracts include contracts for information technology established pursuant to section 5124(a)(2) of the Clinger-Cohen Act, 40 U.S.C. 1424(a)(2).").
  
  
• To FAR 7.101, Definitions, would be added the term "Order" ("an order placed under a task-order contract or delivery-order contract awarded by another agency (i.e., a Federal Supply Schedule contract, Governmentwide acquisition contract, or multi-agency contract)"). The word "order" or "orders" would be added in several places throughout FAR Part 7, Acquisition Planning, which currently address only "contracts" (for example, "ensure that all contracts and orders are properly managed" and "the fiscal year in which contract award or order placement is necessary").
  
  
• To draw greater attention to the capital planning requirements of the Clinger-Cohen Act (40 U.S.C. 1422), a paragraph (t) would be added to FAR 7.103, Agency-Head Responsibilities, which would state that the agency-head must prescribe procedures for "ensuring that agency planners on information technology acquisitions comply with the capital planning and investment control requirements in 40 U.S.C. 1422 and OMB [Office of Management and Budget] Circular A-130 [Management of Federal Information Resources]."
  
  
• Paragraph (b)(4) of FAR 7.105, Contents of Written Acquisition Plans, would be divided into a "contract" subparagraph and a new "order" subparagraph. The "order" subparagraph would require the acquisition to discuss "how the capital planning and investment control requirements of 40 U.S.C. 1422 and OMB Circular A-130 will be met..." It would also require the acquisition plan to discuss how "ordering through one of these vehicles facilitates access to small business concerns, including small disadvantaged business concerns, 8(a) contractors, women-owned small business concerns, HUBZone small business concerns, veteran-owned small business concerns, or service-disabled veteran-owned small business concerns."
  
  
• In FAR Part 8, Required Sources of Supplies and Services, current FAR 8.001 through 8.003 would be redesignated as FAR 8.002 through FAR 8.004, and a new FAR 8.001, General, would be added, which would state, "Regardless of the source of supplies or services to be acquired, information technology acquisitions must comply with capital planning and investment control requirements in 40 U.S.C. 1422 and OMB Circular A-130."
  
  
• The current paragraph (a) of FAR 8.404, Using Schedules, would become subparagraph (a)(1) and further subdivided for clarity. New subparagraph (a)(2) would state that "orders placed under a Federal Supply Schedule contract are not exempt from the development of acquisition plans (see Subpart 7.1 [Acquisition Plans]), and an information technology acquisition strategy (see Part 39 [Acquisition of Information Technology]).
  
  
• In FAR 16.505, Ordering, the following changes would be made:
  
  
  • Subparagraph (a)(2) would be revised to add that individual orders must clearly describe all services to be performed or supplies to be delivered "so the full cost or price for the performance of the work can be established when the order is placed."
    
    
  • Subparagraphs (a)(4) and (a)(5) would be redesignated as (a)(5) and (a)(6), and a new subparagraph (a)(4) would state, "When acquiring information technology and related services, consider the use of modular contracting to reduce program risk (see 39.103(a) [Modular Contracting])."
    
    
  • Subparagraph (a)(6) would be redesignated as subparagraph (a)(8), and a new subparagraph (a)(7) would state, "Orders placed under a task-order contract or delivery-order contract awarded by another agency (i.e., a Governmentwide acquisition contract, or multi-agency contract) -- (i) Are not exempt from the development of acquisition plans (see Subpart 7.1), and development of an information technology acquisition strategy (see Part 39); and (ii) May not be used to circumvent conditions and limitations imposed on the use of funds (e.g., 31 U.S.C. 1501(a)(1))."
    
    
  • Under subparagraph (b)(1)(iii)(A), which currently lists three factors for the contracting officer to consider when developing fair opportunity placement procedures (past performance on earlier orders, potential impact on other orders with the contractor, and minimum order requirements), would add two more as (b)(1)(iii)(A)(4) and (5): "the amount of time contractors need to make informed business decisions on whether to respond to potential orders"; and "whether contractors could be encouraged to respond to potential orders by outreach efforts to promote exchanges of information, such as (i) seeking comments from two or more contractors on draft statements of work; (ii) using a multiphased approach when effort required to respond to a potential order may be resource intensive (e.g., requirements are complex or need continued development), where all contractors are initially considered on price considerations (e.g., rough estimates) and other considerations as appropriate (e.g., proposed conceptual approach, past performance). The contractors most likely to submit the highest value solutions are then selected for one-on-one sessions with the government to increase their understanding of the requirements, provide suggestions for refining requirements, and discuss risk reduction measures."
    
    
  • Paragraph (b)(4), which currently merely requires the contracting officer to "document in the contract file the rationale for placement and price of each order," would be revised to state, "The contracting officer must document in the contract file the rationale for placement and price of each order, including the basis for award and the rationale for any tradeoffs among cost or price and non-cost considerations in making the award decision. This documentation need not quantify the tradeoffs that led to the decision. The contract file must also identify the basis for using an exception to the fair opportunity process. If the agency uses the logical follow-on exception, the rationale must describe why the relationship between the initial order and the follow-on is logical (e.g., in terms of scope, period of performance, or value).
  
  
• Paragraph (b) of FAR 17.500, Scope of Subpart [Interagency Acquisitions Under the Economy Act], which provides acquisitions under FAR Part 8 as an example of interagency acquisitions to which the Economy Act do not apply, would add as another example "acquisitions using governmentwide acquisition contracts."

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

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