DATE: July 2, 2004

SUBJECT: Federal Acquisition Regulation (FAR); Share-in-Savings Contracting

SOURCE: Federal Register, July 2, 2004, Vol. 69, No. 127, page 40513

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

ACTION: Proposed Rule

SYNOPSIS: It is proposed that FAR Subpart 39.3, Share-in-Savings Contracting, be added to implement Section 210 of the E-Government Act of 2002 (Public Law 107-347). Section 210 authorizes the use of share-in-savings (SIS) contracts for information technology (IT). In SIS contracts, the contractor finances the work and then shares the savings generated from contract performance with the agency.

EDITOR'S NOTE: For more on the advance notice of proposed rulemaking (ANPR), see the October 1, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Share-in-Savings Contracting."

DATES: Comments should be submitted on or before August 31, 2004.

ADDRESSES: Submit comments, identified by "FAR Case 2003-008," to: (1) http://www.regulations.gov; (2) http://www.acqnet.gov/far/ProposedRules/proposed.htm; (3) e-mail: farcase.2003-008@gsa.gov; (4) fax: 202-501-4067; or (5) mail: General Services Administration, Regulatory Secretariat (MVA), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405.

FOR FURTHER INFORMATION CONTACT: Craig Goral, 202-501-3856, or e-mail: craig.goral@gsa.gov.

SUPPLEMENTAL INFORMATION: Section 210 of Public Law 107-347 authorizes the use of SIS contracts for IT. SIS is a performance-based concept intended to help an agency leverage its limited resources to improve or accelerate mission-related or administrative processes and lower costs for the taxpayer. Under an SIS contract, the contractor finances the work, and agencies are obligated to pay the contractor for services performed only if savings are realized and, in such cases, a portion of the savings. The agency may retain its share of the savings (that is, not return the savings to the Department of the Treasury), with certain exceptions.

Agencies are permitted to enter into SIS contracts not to exceed five years (10 years with the agency head's approval).

The Section 210 authority to award SIS contracts expires September 30, 2005.

On October 1, 2003, an ANPR was published, and it solicited comments on draft revisions to the FAR, particularly in nine areas: proposal preparation; share ratios; baselines; cancellation and termination costs; ownership rights; applicability of requirements; contract structure; use of FAR Subpart 37.6, Performance-Based Contracting; and potential projects.

Based on comments received, the proposed rule differs from the draft revisions to the FAR in the ANPR in that the proposed rule:

Proposed FAR Subpart 39.3 would include the following:

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

Copyright 2004 by Panoptic Enterprises. All Rights Reserved.

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