80_FR_26512 80 FR 26424 - Federal Acquisition Regulation; Review and Justification of Pass-Through Contracts

80 FR 26424 - Federal Acquisition Regulation; Review and Justification of Pass-Through Contracts

DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Federal Register Volume 80, Issue 88 (May 7, 2015)

Page Range26424-26426
FR Document2015-11029

DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement section 802 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013. This section provides additional requirements relative to the review and justification of pass-through contracts.

Federal Register, Volume 80 Issue 88 (Thursday, May 7, 2015)
[Federal Register Volume 80, Number 88 (Thursday, May 7, 2015)]
[Rules and Regulations]
[Pages 26424-26426]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-11029]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 15

[FAC 2005-82; FAR Case 2013-012; Item II; Docket No. 2013-0012; 
Sequence No. 1]
RIN 9000-AM57


Federal Acquisition Regulation; Review and Justification of Pass-
Through Contracts

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to implement section 802 of the 
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013. 
This section provides additional requirements relative to the review 
and justification of pass-through contracts.

DATES: Effective: June 8, 2015.

FOR FURTHER INFORMATION CONTACT: Ms. Kathy J. Hopkins, Procurement 
Analyst, at 202-969-7226 for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat Division at 202-501-4755. Please cite FAC 2005-82, FAR Case 
2013-012.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 79 FR 39361 on July 10, 2014 to implement section 802 of 
the NDAA for FY 2013 (Pub. L. 112-239) which provided for additional 
requirements relative to the review and justification of pass-through 
contracts. Specifically, in those instances where an offeror for a 
contract, task order, or delivery order informs the agency pursuant to 
FAR 52.215-22 of its intention to award subcontracts for more than 70 
percent of the total cost of work to be performed under the contract, 
task order, or delivery order, section 802 requires the contracting 
officer to (1) consider the availability of alternative contract 
vehicles and the feasibility of contracting directly with a 
subcontractor or subcontractors that will perform the bulk of the work; 
(2) make a written determination that the contracting approach selected 
is in the best interest of the Government; and (3) document the basis 
for such determination. These statutory requirements are being 
implemented in FAR 15.404-1(h). For consistency, this rule is 
applicable to all of the agencies subject to the FAR, even though 
section 802 only applied to the Department of Defense, the Department 
of State, and the United States Agency for International Development. 
Contract actions under section 46 of the Small Business Act (15 U.S.C. 
657s) are exempt from the requirements under section 802 of the NDAA 
for FY 2013.
    Two respondents submitted comments on the proposed rule.

II. Discussion and Analysis

    The Civilian Agency Acquisition Council and the Defense Acquisition 
Regulations Council (the Councils) reviewed the comments in the 
development of the final rule. A discussion of the comments and the 
changes made to the rule as a result of those comments are provided as 
follows:

A. Summary of Significant Changes

    This final rule makes two changes from the proposed rule. The first 
change revises FAR 15.404-1(h)(2) to make clear that competition 
requirements still apply if the contracting officer selects alternative 
approaches. The second change revises FAR 15.404-1(h)(3) to clarify 
that the requirements of this rule do not apply to small business set-
aside contracts.

B. Analysis of Public Comments

    The Regulatory Secretariat Division received responses from two 
respondents to the proposed rule which are discussed below:
1. Application of Rule to FAR Part 36
    Comment: One respondent requested that the final rule ensure that 
this new requirement take into consideration the requirements found in 
FAR 36.501, which addresses performance of work by prime construction 
contractors.
    Response: The statute does not exempt the contracting officer from 
making a written determination that the contracting approach selected 
is in the best interest of the Government under FAR part 36 
acquisitions. The contracting officer shall take into consideration 
industry practices in making this determination.
2. Conflict With FAR 52.219-14
    Comment: One respondent stated that FAR clause 52.219-14, 
Limitations on Subcontracting, could also conflict with the new 
requirements of this rule.

[[Page 26425]]

    Response: FAR clause 52.219-14, Limitations on Subcontracting, 
applies only to contracts that have been set aside for small business 
concerns or 8(a) concerns. Section 1615 of the NDAA for FY 2014 (Pub. 
L. 113-66) exempts contract actions subject to Section 46 of the Small 
Business Act (15 U.S.C. 657s). The text at FAR 15.404-1(h)(3) has been 
revised to clarify that contract actions awarded pursuant to FAR 
subparts 19.5, 19.8, 19.13, 19.14, or 19.15 are exempt from the 
requirements of this rule. Therefore, the requirements of this rule do 
not conflict with FAR clause 52.219-14.
3. Potential Increase in Bid Protests
    Comment: One respondent stated that by requiring contracting 
officers to consider direct award to a subcontractor that will perform 
more than 70 percent of the work, those subcontractors could become 
interested parties for bid protest purposes. This could open the door 
to a substantial number of bid protests and significantly impact the 
ability of agencies to make timely awards.
    Response: The statute requires that the contracting officer 
consider the availability of alternative contract vehicles and the 
feasibility of contracting directly with a subcontractor or 
subcontractors that will perform the bulk of the work, make a 
determination that the contracting approach selected is in the best 
interest of the Government, and document the basis for such 
determination. By following these requirements and adhering to the 
established solicitation procedures in the FAR, contracting officers 
will mitigate the risk of protests. This rule does not change existing 
competition requirements, nor does it change the status of 
subcontractors in the bid protest process.
4. Subcontractors Lacking Prime Contractor Experience
    Comment: One respondent stated that direct award to subcontractors 
that do not have sufficient prime experience can severely impact 
procurements and result in a substantial increase in workload for both 
the contractor and the Government (i.e. additional audits and business 
system reviews).
    Response: The statute requires that contracting officers consider 
direct award to subcontractors and the purpose of this rule is to amend 
the FAR to implement that requirement. However, it should be noted that 
both the statute and the rule only require that the contracting officer 
consider direct award. Contracting officers shall continue to ensure 
that purchases shall be made from, and contracts shall be awarded to, 
responsible prospective contractors only, in accordance with FAR 9.103.
5. Subcontractors Contracting Directly With the Government
    Comment: One respondent opined that prime contractors will try to 
avoid the impact of this rule by using contract provisions that 
prohibit subcontractors from entering into a direct contract with the 
agency. So, if this rule is going to work, a clause preventing primes 
from including a restrictive provision in a teaming arrangement and/or 
subcontract needs to be included in the rule.
    Response: FAR clause 52.203-6 ``Restrictions on Subcontractor Sales 
to the Government'' precludes prime contractors from including such 
restrictions in their agreements with actual or prospective 
subcontractors. For acquisitions of commercial items, the prohibition 
applies only to the extent that any agreement restricting sales by 
subcontractors results in the Federal Government being treated 
differently from any other prospective purchaser for the sale of the 
commercial item(s).
6. Subcontractor Pricing and Participation in Negotiations
    Comment: One respondent stated that in many cases, the prime 
contractors do not allow subcontractors to see the final version of the 
prime's proposal sent in response to the Government's RFP or allow 
subcontractors to participate in negotiations. As such, the 
subcontractor pricing that the Government sees in the prime 
contractor's proposal or during negotiations may not be accurate. This 
issue can be resolved by revising the proposed clause in the rule to 
require the prime contractor to obtain the signed approval of the 
subcontractor's portion of the final offer submitted to the Government 
and allowing subcontractors that will perform 70 percent or more work 
to participate in negotiations.
    Response: FAR 15.404-3 already provides requirements for evaluating 
subcontractor pricing and obtaining certified cost or pricing data as 
required. Prime contractors are responsible for managing their 
subcontractors and appropriately evaluating subcontractor cost or 
pricing data in accordance with FAR subpart 15.4.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 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. This rule is not a major rule 
under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not 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 augments the 
current responsibilities of contracting officers relative to the review 
and justification of pass-through contracts and does not initiate or 
impose any new administrative or performance requirements on 
contractors. In addition, contract actions awarded pursuant to FAR 
subparts 19.5, 19.8, 19.13, 19.14, or 19.15 are exempt from the 
requirements of this rule.

V. Paperwork Reduction Act

    The 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. chapter 35).

List of Subject in 48 CFR Part 15

    Government procurement.

    Dated: April 30, 2015.
William Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.
    Therefore, DoD, GSA, and NASA amend 48 CFR part 15 as set forth 
below:

PART 15--CONTRACTING BY NEGOTIATION

0
1. The authority citation for 48 CFR part 15 continues to read as 
follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.


0
2. Amend section 15.404-1 by adding paragraph (h) to read as follows:


15.404-1  Proposal analysis techniques.

* * * * *

[[Page 26426]]

    (h) Review and justification of pass-through contracts. (1) The 
requirements of this paragraph (h) are applicable to all agencies. The 
requirements apply by law to the Department of Defense, the Department 
of State, and the United States Agency for International Development, 
per section 802 of the National Defense Authorization Act (NDAA) for 
Fiscal Year 2013. The requirements apply as a matter of policy to other 
Federal agencies.
    (2) Except as provided in paragraph (h)(3) of this section, when an 
offeror for a contract or a task or delivery order informs the 
contracting officer pursuant to 52.215-22 that it intends to award 
subcontracts for more than 70 percent of the total cost of work to be 
performed under the contract, task or delivery order, the contracting 
officer shall--
    (i) Consider the availability of alternative contract vehicles and 
the feasibility of contracting directly with a subcontractor or 
subcontractors that will perform the bulk of the work. If such 
alternative approaches are selected, any resulting solicitations shall 
be issued in accordance with the competition requirements under FAR 
part 6;
    (ii) Make a written determination that the contracting approach 
selected is in the best interest of the Government; and
    (iii) Document the basis for such determination.
    (3) Contract actions awarded pursuant to subparts 19.5, 19.8, 
19.13, 19.14, or 19.15 are exempt from the requirements of this 
paragraph (h) (see section 1615 of the National Defense Authorization 
Act for Fiscal Year 2014 (Pub. L. 113-66)).

[FR Doc. 2015-11029 Filed 5-6-15; 8:45 am]
 BILLING CODE 6820-EP-P



                                                 26424               Federal Register / Vol. 80, No. 88 / Thursday, May 7, 2015 / Rules and Regulations

                                                    With regard to equal opportunity for                 DEPARTMENT OF DEFENSE                                 best interest of the Government; and (3)
                                                 individuals with disabilities, DOL estimated                                                                  document the basis for such
                                                 that its rule impacts 20,490 Federal                    GENERAL SERVICES                                      determination. These statutory
                                                 contractors with between 50 and 500                     ADMINISTRATION                                        requirements are being implemented in
                                                 employees (approximately 44% of Federal                                                                       FAR 15.404–1(h). For consistency, this
                                                 contractors may be impacted).                           NATIONAL AERONAUTICS AND                              rule is applicable to all of the agencies
                                                    This FAR rule does not add any new
                                                                                                         SPACE ADMINISTRATION                                  subject to the FAR, even though section
                                                 reporting, recordkeeping, or other
                                                 compliance burdens. The FAR rule makes                                                                        802 only applied to the Department of
                                                 contracting officers and contractors aware of           48 CFR Part 15                                        Defense, the Department of State, and
                                                 the DOL requirements.                                   [FAC 2005–82; FAR Case 2013–012; Item                 the United States Agency for
                                                    DoD, GSA, and NASA are not aware of any              II; Docket No. 2013–0012; Sequence No. 1]             International Development. Contract
                                                 significant alternatives which would                                                                          actions under section 46 of the Small
                                                 accomplish the stated objectives of                     RIN 9000–AM57                                         Business Act (15 U.S.C. 657s) are
                                                 implementing the DOL final rules, while                                                                       exempt from the requirements under
                                                 minimizing impact on small entities. DoD,               Federal Acquisition Regulation;
                                                                                                                                                               section 802 of the NDAA for FY 2013.
                                                 GSA, and NASA do not have the flexibility               Review and Justification of Pass-
                                                                                                                                                                 Two respondents submitted
                                                 of changing the DOL rules, which have been              Through Contracts
                                                                                                                                                               comments on the proposed rule.
                                                 published for public comment and are in
                                                 effect as final rules. There is no significant
                                                                                                         AGENCY:  Department of Defense (DoD),                 II. Discussion and Analysis
                                                 impact on small entities imposed by the FAR             General Services Administration (GSA),
                                                                                                         and National Aeronautics and Space                       The Civilian Agency Acquisition
                                                 rule.
                                                                                                         Administration (NASA).                                Council and the Defense Acquisition
                                                   Interested parties may obtain a copy                  ACTION: Final rule.
                                                                                                                                                               Regulations Council (the Councils)
                                                 of the FRFA from the Regulatory                                                                               reviewed the comments in the
                                                 Secretariat. The Regulatory Secretariat                 SUMMARY:   DoD, GSA, and NASA are                     development of the final rule. A
                                                 has submitted a copy of the FRFA to the                 issuing a final rule amending the                     discussion of the comments and the
                                                 Chief Counsel for Advocacy of the Small                 Federal Acquisition Regulation (FAR) to               changes made to the rule as a result of
                                                 Business Administration.                                implement section 802 of the National                 those comments are provided as
                                                                                                         Defense Authorization Act (NDAA) for                  follows:
                                                 V. Paperwork Reduction Act
                                                                                                         Fiscal Year (FY) 2013. This section                   A. Summary of Significant Changes
                                                   The Paperwork Reduction Act (44                       provides additional requirements
                                                 U.S.C. chapter 35) does apply; however,                 relative to the review and justification of              This final rule makes two changes
                                                 these changes to the FAR do not impose                  pass-through contracts.                               from the proposed rule. The first change
                                                 additional information collection                       DATES: Effective: June 8, 2015.                       revises FAR 15.404–1(h)(2) to make
                                                 requirements to the paperwork burden                                                                          clear that competition requirements still
                                                                                                         FOR FURTHER INFORMATION CONTACT: Ms.
                                                 previously approved for the DOL                                                                               apply if the contracting officer selects
                                                                                                         Kathy J. Hopkins, Procurement Analyst,
                                                 regulations under OMB Control                                                                                 alternative approaches. The second
                                                                                                         at 202–969–7226 for clarification of
                                                 Numbers 1250–0004, OFCCP                                                                                      change revises FAR 15.404–1(h)(3) to
                                                                                                         content. For information pertaining to
                                                 Recordkeeping and Reporting                                                                                   clarify that the requirements of this rule
                                                                                                         status or publication schedules, contact
                                                 Requirements—38 U.S.C. 4212, Vietnam                                                                          do not apply to small business set-aside
                                                                                                         the Regulatory Secretariat Division at
                                                 Era Veterans’ Readjustment Assistance                                                                         contracts.
                                                                                                         202–501–4755. Please cite FAC 2005–
                                                 Act of 1974, as amended; 1250–0005,                     82, FAR Case 2013–012.                                B. Analysis of Public Comments
                                                 OFCCP Recordkeeping and Reporting                       SUPPLEMENTARY INFORMATION:                              The Regulatory Secretariat Division
                                                 Requirements—Section 503 of the
                                                                                                         I. Background                                         received responses from two
                                                 Rehabilitation Act of 1973, as amended,
                                                                                                                                                               respondents to the proposed rule which
                                                 29 U.S.C. 703; and 1293–0005, Federal                     DoD, GSA, and NASA published a                      are discussed below:
                                                 Contractor Veterans’ Employment                         proposed rule in the Federal Register at
                                                 Report, VETS–100/VETS–100A.                             79 FR 39361 on July 10, 2014 to                       1. Application of Rule to FAR Part 36
                                                 List of Subjects in 48 CFR Parts 1, 22,                 implement section 802 of the NDAA for                   Comment: One respondent requested
                                                 and 52                                                  FY 2013 (Pub. L. 112–239) which                       that the final rule ensure that this new
                                                                                                         provided for additional requirements                  requirement take into consideration the
                                                    Government procurement.                              relative to the review and justification of           requirements found in FAR 36.501,
                                                   Dated: April 30, 2015.
                                                                                                         pass-through contracts. Specifically, in              which addresses performance of work
                                                                                                         those instances where an offeror for a                by prime construction contractors.
                                                 William Clark,
                                                                                                         contract, task order, or delivery order                 Response: The statute does not
                                                 Director, Office of Government-wide                     informs the agency pursuant to FAR
                                                 Acquisition Policy, Office of Acquisition
                                                                                                                                                               exempt the contracting officer from
                                                 Policy, Office of Government-wide Policy.
                                                                                                         52.215–22 of its intention to award                   making a written determination that the
                                                                                                         subcontracts for more than 70 percent of              contracting approach selected is in the
                                                 Interim Rule Adopted as Final Without                   the total cost of work to be performed                best interest of the Government under
                                                 Change                                                  under the contract, task order, or                    FAR part 36 acquisitions. The
                                                                                                         delivery order, section 802 requires the              contracting officer shall take into
                                                   Accordingly, the interim rule                         contracting officer to (1) consider the               consideration industry practices in
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                                                 amending 48 CFR parts 1, 22, and 52,                    availability of alternative contract                  making this determination.
                                                 which was published in the Federal                      vehicles and the feasibility of
                                                 Register at 79 FR 43575 on July 25,                     contracting directly with a                           2. Conflict With FAR 52.219–14
                                                 2014, is adopted as a final rule without                subcontractor or subcontractors that will               Comment: One respondent stated that
                                                 change.                                                 perform the bulk of the work; (2) make                FAR clause 52.219–14, Limitations on
                                                 [FR Doc. 2015–11028 Filed 5–6–15; 8:45 am]              a written determination that the                      Subcontracting, could also conflict with
                                                 BILLING CODE 6820–EP–P                                  contracting approach selected is in the               the new requirements of this rule.


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                                                                     Federal Register / Vol. 80, No. 88 / Thursday, May 7, 2015 / Rules and Regulations                                               26425

                                                    Response: FAR clause 52.219–14,                      awarded to, responsible prospective                   (including potential economic,
                                                 Limitations on Subcontracting, applies                  contractors only, in accordance with                  environmental, public health and safety
                                                 only to contracts that have been set                    FAR 9.103.                                            effects, distributive impacts, and
                                                 aside for small business concerns or 8(a)                                                                     equity). E.O. 13563 emphasizes the
                                                                                                         5. Subcontractors Contracting Directly
                                                 concerns. Section 1615 of the NDAA for                                                                        importance of quantifying both costs
                                                                                                         With the Government
                                                 FY 2014 (Pub. L. 113–66) exempts                                                                              and benefits, of reducing costs, of
                                                 contract actions subject to Section 46 of                  Comment: One respondent opined                     harmonizing rules, and of promoting
                                                 the Small Business Act (15 U.S.C. 657s).                that prime contractors will try to avoid              flexibility. This is not a significant
                                                 The text at FAR 15.404–1(h)(3) has been                 the impact of this rule by using contract             regulatory action and, therefore, was not
                                                 revised to clarify that contract actions                provisions that prohibit subcontractors               subject to review under Section 6(b) of
                                                 awarded pursuant to FAR subparts 19.5,                  from entering into a direct contract with             E.O. 12866, Regulatory Planning and
                                                 19.8, 19.13, 19.14, or 19.15 are exempt                 the agency. So, if this rule is going to              Review, dated September 30, 1993. This
                                                 from the requirements of this rule.                     work, a clause preventing primes from                 rule is not a major rule under 5 U.S.C.
                                                 Therefore, the requirements of this rule                including a restrictive provision in a                804.
                                                 do not conflict with FAR clause 52.219–                 teaming arrangement and/or subcontract
                                                 14.                                                     needs to be included in the rule.                     IV. Regulatory Flexibility Act
                                                                                                            Response: FAR clause 52.203–6                        The Department of Defense, the
                                                 3. Potential Increase in Bid Protests                   ‘‘Restrictions on Subcontractor Sales to              General Services Administration, and
                                                    Comment: One respondent stated that                  the Government’’ precludes prime                      the National Aeronautics and Space
                                                 by requiring contracting officers to                    contractors from including such                       Administration certify that this final
                                                 consider direct award to a subcontractor                restrictions in their agreements with                 rule will not have a significant
                                                 that will perform more than 70 percent                  actual or prospective subcontractors.                 economic impact on a substantial
                                                 of the work, those subcontractors could                 For acquisitions of commercial items,                 number of small entities within the
                                                 become interested parties for bid protest               the prohibition applies only to the                   meaning of the Regulatory Flexibility
                                                 purposes. This could open the door to                   extent that any agreement restricting                 Act, 5 U.S.C. 601, et seq., because the
                                                 a substantial number of bid protests and                sales by subcontractors results in the                rule augments the current
                                                 significantly impact the ability of                     Federal Government being treated                      responsibilities of contracting officers
                                                 agencies to make timely awards.                         differently from any other prospective                relative to the review and justification of
                                                    Response: The statute requires that                  purchaser for the sale of the commercial              pass-through contracts and does not
                                                 the contracting officer consider the                    item(s).                                              initiate or impose any new
                                                 availability of alternative contract                                                                          administrative or performance
                                                 vehicles and the feasibility of                         6. Subcontractor Pricing and
                                                                                                         Participation in Negotiations                         requirements on contractors. In
                                                 contracting directly with a                                                                                   addition, contract actions awarded
                                                 subcontractor or subcontractors that will                  Comment: One respondent stated that                pursuant to FAR subparts 19.5, 19.8,
                                                 perform the bulk of the work, make a                    in many cases, the prime contractors do               19.13, 19.14, or 19.15 are exempt from
                                                 determination that the contracting                      not allow subcontractors to see the final             the requirements of this rule.
                                                 approach selected is in the best interest               version of the prime’s proposal sent in
                                                 of the Government, and document the                     response to the Government’s RFP or                   V. Paperwork Reduction Act
                                                 basis for such determination. By                        allow subcontractors to participate in                  The rule does not contain any
                                                 following these requirements and                        negotiations. As such, the subcontractor              information collection requirements that
                                                 adhering to the established solicitation                pricing that the Government sees in the               require the approval of the Office of
                                                 procedures in the FAR, contracting                      prime contractor’s proposal or during                 Management and Budget under the
                                                 officers will mitigate the risk of protests.            negotiations may not be accurate. This                Paperwork Reduction Act (44 U.S.C.
                                                 This rule does not change existing                      issue can be resolved by revising the                 chapter 35).
                                                 competition requirements, nor does it                   proposed clause in the rule to require
                                                 change the status of subcontractors in                  the prime contractor to obtain the                    List of Subject in 48 CFR Part 15
                                                 the bid protest process.                                signed approval of the subcontractor’s                    Government procurement.
                                                                                                         portion of the final offer submitted to
                                                 4. Subcontractors Lacking Prime                                                                                 Dated: April 30, 2015.
                                                                                                         the Government and allowing
                                                 Contractor Experience                                                                                         William Clark,
                                                                                                         subcontractors that will perform 70
                                                    Comment: One respondent stated that                  percent or more work to participate in                Director, Office of Government-wide
                                                 direct award to subcontractors that do                                                                        Acquisition Policy, Office of Acquisition
                                                                                                         negotiations.
                                                 not have sufficient prime experience                                                                          Policy, Office of Government-wide Policy.
                                                                                                            Response: FAR 15.404–3 already
                                                 can severely impact procurements and                    provides requirements for evaluating                    Therefore, DoD, GSA, and NASA
                                                 result in a substantial increase in                     subcontractor pricing and obtaining                   amend 48 CFR part 15 as set forth
                                                 workload for both the contractor and the                certified cost or pricing data as required.           below:
                                                 Government (i.e. additional audits and                  Prime contractors are responsible for                 PART 15—CONTRACTING BY
                                                 business system reviews).                               managing their subcontractors and
                                                    Response: The statute requires that                                                                        NEGOTIATION
                                                                                                         appropriately evaluating subcontractor
                                                 contracting officers consider direct                    cost or pricing data in accordance with               ■ 1. The authority citation for 48 CFR
                                                 award to subcontractors and the                         FAR subpart 15.4.                                     part 15 continues to read as follows:
                                                 purpose of this rule is to amend the FAR
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                                                 to implement that requirement.                          III. Executive Orders 12866 and 13563                   Authority: 40 U.S.C. 121(c); 10 U.S.C.
                                                 However, it should be noted that both                      Executive Orders (E.O.s) 12866 and                 chapter 137; and 51 U.S.C. 20113.
                                                 the statute and the rule only require that              13563 direct agencies to assess all costs             ■ 2. Amend section 15.404–1 by adding
                                                 the contracting officer consider direct                 and benefits of available regulatory                  paragraph (h) to read as follows:
                                                 award. Contracting officers shall                       alternatives and, if regulation is
                                                 continue to ensure that purchases shall                 necessary, to select regulatory                       15.404–1       Proposal analysis techniques.
                                                 be made from, and contracts shall be                    approaches that maximize net benefits                 *        *      *     *    *


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                                                 26426               Federal Register / Vol. 80, No. 88 / Thursday, May 7, 2015 / Rules and Regulations

                                                    (h) Review and justification of pass-                ACTION:   Final rule.                                 CPARS evaluation for an Architect-
                                                 through contracts. (1) The requirements                                                                       Engineer contract or order. This
                                                 of this paragraph (h) are applicable to all             SUMMARY:    DoD, GSA, and NASA are                    guidance is accessible electronically at
                                                 agencies. The requirements apply by                     issuing a final rule amending the                     https://www.cpars.gov/cparsfiles/pdfs/
                                                 law to the Department of Defense, the                   Federal Acquisition Regulation (FAR) to               CPARS-Guidance.pdf.
                                                 Department of State, and the United                     accommodate the recent merger of the
                                                                                                         Architect-Engineer Contract                           2. ‘‘Overall Rating’’ Added to CPARS
                                                 States Agency for International
                                                 Development, per section 802 of the                     Administration Support System                            Comment: The respondent requests an
                                                 National Defense Authorization Act                      (ACASS) and the Construction                          ‘‘Overall Rating’’ be added to the CPARS
                                                 (NDAA) for Fiscal Year 2013. The                        Contractor Appraisal Support System                   rating system, similar to the ACASS
                                                 requirements apply as a matter of policy                (CCASS) modules within the Contractor                 system.
                                                 to other Federal agencies.                              Performance Assessment Reporting                         Response: An overall rating of
                                                    (2) Except as provided in paragraph                  System (CPARS) database.                              contractor performance in CPARS is not
                                                 (h)(3) of this section, when an offeror for             DATES: Effective: June 8, 2015.                       advantageous, because the weight of the
                                                 a contract or a task or delivery order                  FOR FURTHER INFORMATION CONTACT: Mr.                  specific evaluation areas (quality,
                                                 informs the contracting officer pursuant                Curtis E. Glover, Sr., Procurement                    schedule, cost control, management,
                                                 to 52.215–22 that it intends to award                   Analyst, at 202–501–1448, for                         utilization of small business and
                                                 subcontracts for more than 70 percent of                clarification of content. For information             regulatory compliance) is different for
                                                 the total cost of work to be performed                  pertaining to status or publication                   each contract being evaluated and each
                                                 under the contract, task or delivery                    schedules, contact the Regulatory                     solicitation in which the offeror’s past
                                                 order, the contracting officer shall—                   Secretariat at 202–501–4755. Please cite              performance is being evaluated.
                                                    (i) Consider the availability of                     FAC 2005–82, FAR Case 2014–010.                       3. Interim Evaluations
                                                 alternative contract vehicles and the                   SUPPLEMENTARY INFORMATION:
                                                 feasibility of contracting directly with a                                                                      Comment: The respondent suggests
                                                 subcontractor or subcontractors that will               I. Background                                         that the interim evaluation in CPARS be
                                                 perform the bulk of the work. If such                     DoD, GSA, and NASA published a                      superseded by the final evaluation.
                                                 alternative approaches are selected, any                                                                        Response: The final evaluation is the
                                                                                                         proposed rule in the Federal Register at
                                                 resulting solicitations shall be issued in                                                                    last rating provided to date on a
                                                                                                         79 FR 54949 on September 15, 2014, to
                                                 accordance with the competition                                                                               contract. Interim evaluations, combined
                                                                                                         standardize the past performance
                                                 requirements under FAR part 6;                                                                                with the final evaluation (or last
                                                                                                         reporting requirements under the
                                                    (ii) Make a written determination that                                                                     evaluation to date), remain available in
                                                                                                         CPARS database in FAR subpart 42.15.
                                                 the contracting approach selected is in                                                                       order to provide the entire picture of
                                                                                                         One respondent submitted comments on
                                                 the best interest of the Government; and                                                                      contractor performance under the
                                                                                                         the proposed rule.
                                                    (iii) Document the basis for such                                                                          contract for future source selection
                                                 determination.                                          II. Discussion and Analysis                           purposes.
                                                    (3) Contract actions awarded pursuant                  The Civilian Agency Acquisition                     C. Other Changes
                                                 to subparts 19.5, 19.8, 19.13, 19.14, or                Council and the Defense Acquisition
                                                                                                                                                                 For clarity, the final rule adds a
                                                 19.15 are exempt from the requirements                  Regulations Council (the Councils)
                                                                                                                                                               reference to the past performance
                                                 of this paragraph (h) (see section 1615                 reviewed the public comments in the
                                                                                                                                                               thresholds at paragraphs (b) through (f)
                                                 of the National Defense Authorization                   development of the final rule. A
                                                                                                                                                               of section 42.1502.
                                                 Act for Fiscal Year 2014 (Pub. L. 113–                  discussion of the comments and the
                                                 66)).                                                   changes made to the rule as a result of               III. Executive Orders 12866 and 13563
                                                 [FR Doc. 2015–11029 Filed 5–6–15; 8:45 am]              those comments are provided as                           Executive Orders (E.O.s) 12866 and
                                                 BILLING CODE 6820–EP–P
                                                                                                         follows:                                              13563 direct agencies to assess all costs
                                                                                                         A. Summary of Changes                                 and benefits of available regulatory
                                                                                                                                                               alternatives and, if regulation is
                                                 DEPARTMENT OF DEFENSE                                      There are no changes made in the
                                                                                                                                                               necessary, to select regulatory
                                                                                                         final rule as a result of the public
                                                                                                                                                               approaches that maximize net benefits
                                                 GENERAL SERVICES                                        comments.
                                                                                                                                                               (including potential economic,
                                                 ADMINISTRATION                                          B. Public Comments                                    environmental, public health and safety
                                                                                                                                                               effects, distributive impacts, and
                                                 NATIONAL AERONAUTICS AND                                1. Continue To Use ACASS
                                                                                                                                                               equity). E.O. 13563 emphasizes the
                                                 SPACE ADMINISTRATION                                      Comment: The respondent requests                    importance of quantifying both costs
                                                                                                         that ACASS continue to be utilized                    and benefits, of reducing costs, of
                                                 48 CFR Part 42                                          because the ratings are more descriptive              harmonizing rules, and of promoting
                                                 [FAC 2005–82; FAR Case 2014–010; Item                   and appropriate to the design                         flexibility. This is not a significant
                                                 III; Docket No. 2014–0010, Sequence No.                 professionals than those in CPARS.                    regulatory action and, therefore, was not
                                                 1]                                                        Response: ACASS will not continue                   subject to review under Section 6(b) of
                                                                                                         to be utilized since the ACASS module                 E.O. 12866, Regulatory Planning and
                                                 RIN 9000–AM79                                           was merged into CPARS on July 1, 2014.                Review, dated September 30, 1993. This
                                                                                                         Appendix 3 of the ‘‘Guidance for                      rule is not a major rule under 5 U.S.C.
mstockstill on DSK4VPTVN1PROD with RULES2




                                                 Federal Acquisition Regulation;
                                                 Enhancements to Past Performance                        Contractor Performance Assessment                     804.
                                                 Evaluation Systems                                      Reporting System (CPARS),’’ dated July
                                                                                                         2014, provides specific instructions on               IV. Regulatory Flexibility Act
                                                 AGENCY: Department of Defense (DoD),                    describing the different aspects of the                  DoD, GSA, and NASA certify that this
                                                 General Services Administration (GSA),                  quality of the contractor’s work and the              final rule will not have a significant
                                                 and National Aeronautics and Space                      contractor’s management of a quality                  economic impact on a substantial
                                                 Administration (NASA).                                  control program in the narrative of a                 number of small entities within the


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Document Created: 2015-12-16 07:50:17
Document Modified: 2015-12-16 07:50:17
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective: June 8, 2015.
ContactMs. Kathy J. Hopkins, Procurement Analyst, at 202-969-7226 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-82, FAR Case 2013-012.
FR Citation80 FR 26424 
RIN Number9000-AM57

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