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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: April 1, 2002

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Competition Requirements for Purchase of Services Under Multiple Award Contracts

SOURCE: Federal Register, April 1, 2002, Vol. 67, No. 62, page 15351

AGENCIES: Department of Defense (DOD)

ACTION: Proposed Rule and Notice of Public Meeting

SYNOPSIS: DOD is proposing to amend DFARS Subpart 208.4, Ordering from Federal Supply Schedules, and DFARS Subpart 216.5, Indefinite-Delivery Contracts, to implement the requirement in Section 803 of the National Defense Authorization Act for Fiscal Year 2002 (Public Law 107-107) which requires DOD to issue policy requiring competition in the purchase of services under multiple award contracts. In addition, DOD is announcing that it will hold one or more public meetings to hear the views of interested parties.

EDITOR'S NOTE: For more on the acquisition-related provisions of the FY 2002 National Defense Authorization Act, see the January 2, 2002, FEDERAL CONTRACTS DISPATCH "Enactment of the National Defense Authorization Act for Fiscal Year 2002."

DATES: Comments on the proposed rule should be submitted no later than May 6, 2002. The first public meeting will be held on April 29, 2002, from 12:00 p.m. to 3:00 p.m.

ADDRESSES: Respondents may submit comments directly on the web site at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an alternative, respondents may e-mail comments to: dfars@acq.osd.mil. Also, respondents who cannot submit comments through the web site or by e-mail may submit comments to Defense Acquisition Regulations Council, Attn: Susan Schneider, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062, or by fax to 703-602-0350. Cite DFARS Case 2001-D017 when making comments on this proposed rule.

The public meeting will be held in Room C-43, Crystal Mall 4, 1941 Jefferson Davis Highway, Arlington, VA 22202.

FOR FURTHER INFORMATION CONTACT: Susan Schneider, 703-602-0326, regarding the proposed rule, and Melissa Rider, 703-695-1098, regarding the public meeting.

SUPPLEMENTAL INFORMATION: Public Law 107-107, Section 803, Competition Requirement for Purchase of Services Pursuant to Multiple Award Contracts, requires that each DOD purchase of services over $100,000 made under a multiple award contract be made on a competitive basis unless a contracting officer waives the requirement under certain specific circumstances. To qualify as being made "on a competitive basis," a "fair notice" must be provided to all contractors offering such services under the multiple award contract. However, a notice may be provided to "fewer than all contractors" if notice is provided to "as many contractors as practicable" and "offers [are] received from at least three qualified contractors..."

The proposed rule would add two similar DFARS sections:

• DFARS 208.404-70, Additional Ordering Procedures for Services, which would state:
  
  
  • DFARS 208.404-70 implements Section 803 of the National Defense Authorization Act for Fiscal Year 2002 (Public Law 107-107) (proposed paragraph (a)).
    
    
  • Each order for services exceeding $100,000 "must be made on a competitive basis...unless the contracting officer waives this requirement on the basis of a written determination that (1) one of the circumstances described at FAR [Federal Acquisition Regulation] 16.505 [Ordering] (b)(2)(i) through (iii) applies to the order [(i) urgent need; (ii) sole source; or (iii) logical follow-on]; or (2) a statute expressly authorizes or requires that the purchase be made from a specified source" (proposed paragraph (b)).
    
    
  • An order for services exceeding $100,000 is considered to be made on a competitive basis only if the contracting officer "provides a fair notice of the intent to make the purchase, including a description of the work the contractor must perform and the basis upon which the contracting officer will make the selection, to all contractors offering such services under the multiple award schedule; and affords all contractors responding to the notice a fair opportunity to submit an offer and have that offer fairly considered..." or "provides the [above] notice...to as many contractors as practicable and receives offers from at least three qualified contractors; or determines in writing that no additional qualified contractors could be identified despite reasonable efforts to do so" (proposed paragraph (c)).
    
    
  • Single and multiple blanket purchase agreements (BPAs) may be established against Federal Supply Schedules if the contracting officer "follows the procedures in paragraphs (b) and (c)...and for a single BPA, defines the tasks and establishes a firm-fixed price for individual tasks or services identified in the statement of work; or for multiple BPAs, forwards the statement of work and the selection criteria to all BPA awardees before placing orders against the BPAs" (proposed paragraph (d)). Also, paragraph (d) references FAR 8.404, Using Schedules, and paragraph (b) of GSA's ordering procedures for services at http://www.gsa.gov/Portal/content/offerings.
  
  
• DFARS 216.505-70, Orders for Services Under Multiple Award Contracts, which would consist of the same paragraphs (a) through (c) of proposed DFARS 208.404-70 (however, contracting officers would have an additional authority to waive the competition requirement: FAR 16.505(b)(2)(iv), which authorizes a waiver if the order is to satisfy a minimum guarantee).
  
  Proposed paragraph (d) would state that the contracting officer should keep submission requirements to a minimum; may use streamlined procedures, including oral presentations; and, though the competition requirements in FAR Part 6, Competition Requirements, and the policies in FAR Subpart 15.3, Source Selection, do not apply to the ordering process, must: "(i) develop placement procedures that will provide each awardee a fair opportunity to be considered for each order and that reflect the requirement and other aspects of the contracting environment; (ii) not use any method (such as allocation or designation of any preferred awardee) that would not result in fair consideration being given to all awardees prior to placing each order; (iii) tailor the procedures to each acquisition; (iv) include the procedures in the solicitation and the contract; and (v) consider price or cost under each order as one of the factors in the selection decision."
  
  Proposed paragraph (e) would state that the contracting officer should consider "(1) past performance on earlier orders under the contract, including quality, timeliness, and cost control; (2) potential impact on other orders placed with the contractor; [and] (3) minimum order requirements" when developing the placement procedures required in paragraph (d).

In addition, Director of Defense Procurement Deidre Lee is sponsoring a public meeting to discuss the proposed rule and hear the views of interested parties on what they believe to be the key issues pertaining to use of Federal Supply Schedules, governmentwide acquisition contracts, multiple agency contracts, and multi-agency indefinite-delivery, indefinite-quantity (IDIQ) contracts for the acquisition of services. Possible issues include, but are not limited to procedures for establishing the basic contractual instruments; ordering procedures; ability to maintain a competitive environment; and suitability of current government training on multiple award contracts. Subsequent meetings may be held, depending on the level of interest shown by the general public at the initial meeting. Meeting dates and other pertinent information will be published on the Defense Procurement Web site at http://www.acq.osd.mil/dp.

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

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