80 FR 38308 - Federal Acquisition Regulation; Clarification on Justification for Urgent Noncompetitive Awards Exceeding One Year

DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Federal Register Volume 80, Issue 127 (July 2, 2015)

Page Range		38308-38309
FR Document		2015-16210

DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to clarify that a determination of exceptional circumstances is needed when a noncompetitive contract awarded on the basis of unusual and compelling urgency exceeds 1 year, either at time of award or due to post-award modifications.

Federal Register, Volume 80 Issue 127 (Thursday, July 2, 2015)

[Federal Register Volume 80, Number 127 (Thursday, July 2, 2015)]
[Rules and Regulations]
[Pages 38308-38309]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-16210]


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

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 6

[FAC 2005-83; FAR Case 2014-020; Item IV; Docket No. 2014-0020; 
Sequence No. 1]
RIN 9000-AM86


Federal Acquisition Regulation; Clarification on Justification 
for Urgent Noncompetitive Awards Exceeding One Year

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 clarify that a determination of 
exceptional circumstances is needed when a noncompetitive contract 
awarded on the basis of unusual and compelling urgency exceeds 1 year, 
either at time of award or due to post-award modifications.

DATES: Effective: August 3, 2015.

FOR FURTHER INFORMATION CONTACT: Mr. Michael O. Jackson, Procurement 
Analyst, at 202-208-4949 for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at 202-501-4755. Please cite FAC 2005-83, FAR Case 2014-
020.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 79 FR 78378 on December 30, 2014. The rule was in response 
to a Government Accountability Office (GAO) report, GAO-14-304, Federal 
Contracting: Noncompetitive Contracts Based on Urgency Need Additional 
Oversight, dated March 2014. The proposed rule language at FAR 6.302-
2(d) has been revised to further clarify it. One respondent submitted a 
comment on the proposed rule.

II. Discussion and Analysis

    The Civilian Agency Acquisition Council and the Defense Acquisition 
Regulations Council (the Councils) reviewed the public comment in the 
development of the final rule. The comment resulted in no changes to 
the final rule. A discussion of the comment is provided in the 
following paragraph.
    Comment: The respondent stated that there should be no 
justification for extending any contract that is noncompetitive for 
more than one year.
    Response: The extension of non-competitive contracts is allowable. 
The purpose of this case is to ensure that when the extension has been 
deemed to be warranted, that the proper justification and documentation 
are prepared and included in the contract file.

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

[[Page 38309]]

Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.

IV. Regulatory Flexibility Act

    DoD, GSA, and NASA have prepared a Final Regulatory Flexibility 
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 
U.S.C. 601, et seq. The FRFA is summarized as follows:

    The purpose of this rule is to clarify that a determination of 
exceptional circumstances is needed when the period of performance, 
inclusive of options and modifications, of a noncompetitive contract 
awarded on the basis of unusual and compelling urgency is greater 
than one year. This rule only impacts the internal procedures of the 
Federal Government.
    There are no recordkeeping, reporting, or other compliance 
requirements associated with the rule. The rule does not duplicate, 
overlap, or conflict with any other Federal rules.
    No issues were raised by the public comments in response to the 
initial regulatory flexibility analysis.

    Interested parties may obtain a copy of the FRFA from the 
Regulatory Secretariat. The Regulatory Secretariat has submitted a copy 
of the FRFA to the Chief Counsel for Advocacy of the Small Business 
Administration.

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 CFR Part 6

    Government procurement.

    Dated: June 18, 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 6 as set forth 
below:

PART 6--COMPETITION REQUIREMENTS

0
1. The authority citation for 48 CFR part 6 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 6.302-2 by--
0
a. Removing from paragraph (d)(1) ``contract awarded'' and adding 
``contract awarded or modified'' in its place;
0
b. Revising paragraph (d)(1)(ii);
0
c. Redesignating paragraphs (d)(2) through (d)(4) as paragraphs (d)(3) 
through (d)(5), respectively;
0
d. Adding a new paragraph (d)(2); and
0
e. Revising the newly designated paragraph (d)(3).
    The revisions and addition read as follows:


6.302-2   Unusual and compelling urgency.

* * * * *
    (d) * * *
    (1) * * *
    (ii) May not exceed one year, including all options, unless the 
head of the agency determines that exceptional circumstances apply. 
This determination must be documented in the contract file.
    (2)(i) Any subsequent modification using this authority, which will 
extend the period of performance beyond one year under this same 
authority, requires a separate determination. This determination is 
only required if the cumulative period of performance using this 
authority exceeds one year. This requirement does not apply to the 
exercise of options previously addressed in the determination required 
at (d)(1)(ii) of this section.
    (ii) The determination shall be approved at the same level as the 
level to which the agency head authority in (d)(1)(ii) of this section 
is delegated.
    (3) The requirements in paragraphs (d)(1) and (d)(2) of this 
section shall apply to any contract in an amount greater than the 
simplified acquisition threshold.
* * * * *
[FR Doc. 2015-16210 Filed 7-1-15; 8:45 am]
 BILLING CODE 6820-EP-P

38308 Federal Register / Vol. 80, No. 127 / Thursday, July 2, 2015 / Rules and Regulations

III. Executive Orders 12866 and 13563 PART 22—APPLICATION OF LABOR FOR FURTHER INFORMATION CONTACT: Mr.
Executive Orders (E.O.s) 12866 and LAWS TO GOVERNMENT Michael O. Jackson, Procurement
13563 direct agencies to assess all costs ACQUISITIONS Analyst, at 202–208–4949 for
and benefits of available regulatory clarification of content. For information
■ 3. Amend section 22.1003–4 by pertaining to status or publication
alternatives and, if regulation is
revising paragraph (c)(1)(ii) to read as schedules, contact the Regulatory
necessary, to select regulatory
follows: Secretariat at 202–501–4755. Please cite
approaches that maximize net benefits
(including potential economic, 22.1003–4 Administrative limitations, FAC 2005–83, FAR Case 2014–020.
environmental, public health and safety variations, tolerances, and exemptions. SUPPLEMENTARY INFORMATION:
effects, distributive impacts, and * * * * *
equity). E.O. 13563 emphasizes the (c) * * * I. Background
importance of quantifying both costs (1) * * *
and benefits, of reducing costs, of (ii) Scientific equipment and medical DoD, GSA, and NASA published a
harmonizing rules, and of promoting apparatus or equipment if the proposed rule in the Federal Register at
flexibility. This is not a significant application of micro-electronic circuitry 79 FR 78378 on December 30, 2014. The
regulatory action and, therefore, was not or other technology of at least similar rule was in response to a Government
subject to review under Section 6(b) of sophistication is an essential element Accountability Office (GAO) report,
E.O. 12866, Regulatory Planning and (for example, Product or Service Code GAO–14–304, Federal Contracting:
Review, dated September 30, 1993. This (PSC) 6515, ‘‘Medical and Surgical Noncompetitive Contracts Based on
rule is not a major rule under 5 U.S.C. Instruments, Equipment, and Supplies;’’ Urgency Need Additional Oversight,
804. PSC 6525, ‘‘Imaging Equipment and dated March 2014. The proposed rule
Supplies: Medical, Dental, Veterinary;’’ language at FAR 6.302–2(d) has been
IV. Regulatory Flexibility Act revised to further clarify it. One
PSC 6630, ‘‘Chemical Analysis
The Regulatory Flexibility Act does Instruments;’’ and PSC 6655, respondent submitted a comment on the
not apply to this rule because this final ‘‘Geophysical Instruments,’’ are largely proposed rule.
rule does not constitute a significant composed of the types of equipment
FAR revision within the meaning of II. Discussion and Analysis
exempted in this paragraph).
FAR 1.501–1 and 41 U.S.C. 1707 does * * * * * The Civilian Agency Acquisition
not require publication for public [FR Doc. 2015–16209 Filed 7–1–15; 8:45 am] Council and the Defense Acquisition
comment. BILLING CODE 6820–EP–P Regulations Council (the Councils)
V. Paperwork Reduction Act reviewed the public comment in the
The rule does not contain any development of the final rule. The
DEPARTMENT OF DEFENSE comment resulted in no changes to the
information collection requirements that
require the approval of the Office of final rule. A discussion of the comment
GENERAL SERVICES
Management and Budget under the is provided in the following paragraph.
ADMINISTRATION
Paperwork Reduction Act (44 U.S.C. Comment: The respondent stated that
chapter 35). NATIONAL AERONAUTICS AND there should be no justification for
List of Subjects in 48 CFR Parts 5 and SPACE ADMINISTRATION extending any contract that is
22 noncompetitive for more than one year.
48 CFR Part 6 Response: The extension of non-
Government procurement.
[FAC 2005–83; FAR Case 2014–020; Item competitive contracts is allowable. The
Dated: June 18, 2015.
IV; Docket No. 2014–0020; Sequence purpose of this case is to ensure that
William Clark, No. 1] when the extension has been deemed to
Director, Office of Government-wide be warranted, that the proper
Acquisition Policy, Office of Acquisition RIN 9000–AM86
justification and documentation are
Policy, Office of Government-wide Policy.
Federal Acquisition Regulation; prepared and included in the contract
Therefore, DoD, GSA, and NASA Clarification on Justification for Urgent file.
amend 48 CFR parts 5 and 22 as set Noncompetitive Awards Exceeding
forth below: III. Executive Orders 12866 and 13563
One Year
■ 1. The authority citation for 48 CFR
AGENCY: Department of Defense (DoD), Executive Orders (E.O.s) 12866 and
parts 5 and 22 continues to read as 13563 direct agencies to assess all costs
follows: General Services Administration (GSA),
and National Aeronautics and Space and benefits of available regulatory
Authority: 40 U.S.C. 121(c); 10 U.S.C. alternatives and, if regulation is
chapter 137; and 51 U.S.C. 20113.
Administration (NASA).
ACTION: Final rule.
necessary, to select regulatory
approaches that maximize net benefits
PART 5—PUBLICIZING CONTRACT
ACTIONS SUMMARY: DoD, GSA, and NASA are (including potential economic,
issuing a final rule amending the environmental, public health and safety
5.207 [Amended] Federal Acquisition Regulation (FAR) to effects, distributive impacts, and
asabaliauskas on DSK5VPTVN1PROD with RULES

■ 2. Amend section 5.207 by— clarify that a determination of equity). E.O. 13563 emphasizes the
■ a. Removing from paragraph (a)(5) exceptional circumstances is needed importance of quantifying both costs
‘‘Classification Code’’ and adding when a noncompetitive contract and benefits, of reducing costs, of
‘‘Product or Service Code’’ in its place; awarded on the basis of unusual and harmonizing rules, and of promoting
and compelling urgency exceeds 1 year, flexibility. This is not a significant
■ b. Removing from paragraph (c)(13) either at time of award or due to post- regulatory action and, therefore, was not
‘‘supply’’ and adding ‘‘product’’ in its award modifications. subject to review under Section 6(b) of
place. DATES: Effective: August 3, 2015. E.O. 12866, Regulatory Planning and

VerDate Sep<11>2014 22:10 Jul 01, 2015 Jkt 235001 PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 E:\FR\FM\02JYR3.SGM 02JYR3

Federal Register / Vol. 80, No. 127 / Thursday, July 2, 2015 / Rules and Regulations 38309

Review, dated September 30, 1993. This ■ e. Revising the newly designated statutory prohibition on the use of
rule is not a major rule under 5 U.S.C. paragraph (d)(3). appropriated (or otherwise made
804. The revisions and addition read as available) funds for contracts with any
follows: foreign incorporated entity that is an
IV. Regulatory Flexibility Act
inverted domestic corporation or any
DoD, GSA, and NASA have prepared 6.302–2 Unusual and compelling urgency.
subsidiary of such entity.
a Final Regulatory Flexibility Analysis * * * * *
DATES: Effective: July 2, 2015.
(FRFA) consistent with the Regulatory (d) * * *
(1) * * * FOR FURTHER INFORMATION CONTACT: Mr.
Flexibility Act, 5 U.S.C. 601, et seq. The
FRFA is summarized as follows: (ii) May not exceed one year, Michael O. Jackson, Procurement
including all options, unless the head of Analyst, at 202–208–4949 for
The purpose of this rule is to clarify that clarification of content. For information
the agency determines that exceptional
a determination of exceptional circumstances pertaining to status or publication
is needed when the period of performance, circumstances apply. This
inclusive of options and modifications, of a determination must be documented in schedules, contact the Regulatory
noncompetitive contract awarded on the the contract file. Secretariat at 202–501–4755. Please cite
basis of unusual and compelling urgency is (2)(i) Any subsequent modification FAC 2005–83, FAR Case 2014–017.
greater than one year. This rule only impacts using this authority, which will extend SUPPLEMENTARY INFORMATION:
the internal procedures of the Federal the period of performance beyond one
Government. year under this same authority, requires I. Background
There are no recordkeeping, reporting, or a separate determination. This DoD, GSA, and NASA published an
other compliance requirements associated determination is only required if the interim rule in the Federal Register at
with the rule. The rule does not duplicate,
overlap, or conflict with any other Federal
cumulative period of performance using 79 FR 74554 on December 15, 2014, to
rules. this authority exceeds one year. This address the continuing
No issues were raised by the public requirement does not apply to the Governmentwide statutory prohibition
comments in response to the initial exercise of options previously addressed (in effect through annual appropriations
regulatory flexibility analysis. in the determination required at acts since Fiscal Year 2008) on the use
Interested parties may obtain a copy (d)(1)(ii) of this section. of appropriated (or otherwise made
of the FRFA from the Regulatory (ii) The determination shall be available) funds for contracts with any
Secretariat. The Regulatory Secretariat approved at the same level as the level foreign incorporated entity that is an
has submitted a copy of the FRFA to the to which the agency head authority in inverted domestic corporation (under
Chief Counsel for Advocacy of the Small (d)(1)(ii) of this section is delegated. section 835 of the Homeland Security
(3) The requirements in paragraphs Act of 2002, codified at 6 U.S.C. 395) or
Business Administration.
(d)(1) and (d)(2) of this section shall to any subsidiary of such entity. One
V. Paperwork Reduction Act apply to any contract in an amount respondent submitted comments in
The rule does not contain any greater than the simplified acquisition response to the interim rule.
information collection requirements that threshold.
II. Discussion and Analysis
require the approval of the Office of * * * * *
Management and Budget under the [FR Doc. 2015–16210 Filed 7–1–15; 8:45 am] The Civilian Agency Acquisition
Paperwork Reduction Act (44 U.S.C. BILLING CODE 6820–EP–P Council and the Defense Acquisition
chapter 35). Regulations Council (the Councils)
reviewed the public comments in the
List of Subject in CFR Part 6 DEPARTMENT OF DEFENSE development of the final rule.
Government procurement. A. Summary of Significant Changes
GENERAL SERVICES
Dated: June 18, 2015. ADMINISTRATION There were no changes made to the
William Clark, rule as a result of the comments
Director, Office of Government-wide NATIONAL AERONAUTICS AND received. There were no comments on
Acquisition Policy, Office of Acquisition SPACE ADMINISTRATION the Regulatory Flexibility Act.
Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA 48 CFR Parts 9 and 52 B. Analysis of Comments
amend 48 CFR part 6 as set forth below: [FAC 2005–83; FAR Case 2014–017; Item A discussion of the comments
V; Docket No. 2014–0017, Sequence No. 1] follows:
PART 6—COMPETITION
REQUIREMENTS RIN 9000–AM70 1. Deletion of References to the Specific
Fiscal Years
■ 1. The authority citation for 48 CFR Federal Acquisition Regulation; Comment: The respondent does not
part 6 continues to read as follows: Prohibition on Contracting With favor the deletion of references to the
Authority: 40 U.S.C. 121(c); 10 U.S.C. Inverted Domestic Corporations specific fiscal years covered in several
chapter 137; and 51 U.S.C. 20113. AGENCY: Department of Defense (DoD), subsections of FAR 9.108. The
■ 2. Amend section 6.302–2 by— General Services Administration (GSA), respondent states that the interim rule
■ a. Removing from paragraph (d)(1) and National Aeronautics and Space obscures the fact that the restrictions on
asabaliauskas on DSK5VPTVN1PROD with RULES

‘‘contract awarded’’ and adding Administration (NASA). contracting with inverted domestic
‘‘contract awarded or modified’’ in its ACTION: Final rule. corporations are fiscal year specific, and
place; that those restrictions may or may not
■ b. Revising paragraph (d)(1)(ii); SUMMARY: DoD, GSA, and NASA have be enacted in future years. The
■ c. Redesignating paragraphs (d)(2) adopted as final, without change, an respondent states that the interim rule
through (d)(4) as paragraphs (d)(3) interim rule amending the Federal now provides only a general description
through (d)(5), respectively; Acquisition Regulation (FAR) to address of the common exception language. The
■ d. Adding a new paragraph (d)(2); and the continuing Governmentwide respondent recommends—

VerDate Sep<11>2014 21:24 Jul 01, 2015 Jkt 235001 PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 E:\FR\FM\02JYR3.SGM 02JYR3

Document Created: 2015-12-15 13:14:56
Document Modified: 2015-12-15 13:14:56

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		Effective: August 3, 2015.
Contact		Mr. Michael O. Jackson, Procurement Analyst, at 202-208-4949 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-83, FAR Case 2014- 020.
FR Citation		80 FR 38308
RIN Number		9000-AM86

80 FR 38308 - Federal Acquisition Regulation; Clarification on Justification for Urgent Noncompetitive Awards Exceeding One Year

DEPARTMENT OF DEFENSEGENERAL SERVICES ADMINISTRATIONNATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Federal Register Volume 80, Issue 127 (July 2, 2015)

DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION