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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


November 2003
Vol. IV, No. 11

CONTENTS

Contract Bundling Restrictions Increased in FAR and SBA Regulations
CCR Registration, Unique Contract Numbers Required
Share-in-Savings Contract Coverage Proposed for FAR
DFARS Changes on Task Orders, Unique Item IDs
SBA Increases Facilities Support Services Size Standard



Contract Bundling Restrictions Increased
in FAR and SBA Regulations

In response to Congressional concern about the effect of contract bundling on small businesses and the recommendations of Office of Federal Procurement Policy (OFPP), the Federal Acquisition Regulation (FAR) and the Small Business Administration's (SBA) regulations have been revised to increase oversight of potentially bundled acquisitions (especially by the agency's Office of Small Disadvantaged Business Utilization (OSDBU)), and to require additional acquisition planning so contract bundling is avoided whenever possible.

"Bundling" is defined in FAR 2.101, Definitions, as "consolidating two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract that is likely to be unsuitable for award to a small business concern due to (1) the diversity, size, or specialized nature of the elements of the performance specified; (2) the aggregate dollar value of the anticipated award; (3) the geographical dispersion of the contract performance sites; or (4) any combination of the factors..."

On October 29, 2002, OFPP submitted to the president the report "Contract Bundling: A Strategy for Increasing Federal Contracting Opportunities for Small Business." The report recommended that agencies increase reviews of potentially bundled acquisitions to determine whether alternate strategies exist, that the agencies' OSDBUs conduct periodic reviews of their acquisition procedures, and that the documentation needed to justify a bundled acquisition be increased. (EDITOR'S NOTE: For more on the OFPP report, see the December 2002 Federal Contracts Perspective article "OFPP Issues Proposals for 'Unbundling' Contracts.")

To implement these recommendations, proposed rules to amend the FAR and SBA regulations were published on January 31, 2003 (for more on the proposed rules, see the March 2003 Federal Contracts Perspective article ""FAR Changes Proposed for Contract Bundling, Cost Principles, Debriefings, Commercial Items"). Forty-three sets of comments were submitted in response to the FAR proposed bundling rule and 26 comments were submitted in response to the SBA regulations proposed bundling rule. As a result of the comments, both the FAR and SBA proposed rules are adopted as final with minor changes.

The following are the significant changes being made to the FAR by Federal Acquisition Circular (FAC) 2001-17:

The revisions to the SBA regulations (Title 13 of the Code of Federal Regulations (CFR), Part 125, Government Contracting Programs, Subpart 125.2, Prime Contracting Assistance) parallel those made to the FAR for the most part. The primary differences between the changes to the FAR and the SBA regulations involve the assignment of increased responsibilities for SBA's procurement center representatives (PCRs).

Finally, several of those responding to SBA's proposed rule identified the need for more guidance on evaluating large prime contractor performance and efforts to achieve the goals specified in their subcontracting plans, including examples of what types of conduct constitute "good-faith" efforts to comply with subcontracting plans.

Therefore, SBA is proposing to amend its regulations governing small business subcontracting to provide a list of factors to consider in evaluating a prime contractor's performance and good-faith efforts to achieve the requirements in its subcontracting plan. Also, the proposed rule authorizes the use of goals in subcontracting plans (and the contractor's past performance in meeting such goals) as a factor in source selection when placing orders against Federal Supply Schedules (FSS), government-wide acquisition contracts, and multi-agency contracts.

Comments on the proposed rule must be received on or before December 19, 2003, by Dean Koppel, Assistant Administrator, Office of Policy and Research, 409 Third Street, SW, Mail Code: 6500, Washington, DC 20416; by e-mail to dean.koppel@sba.gov; or to http://www.regulations.gov; or by facsimile to 202-205-6390.



CCR Registration, Unique Contract Numbers Required

FAC 2001-16 addresses several "e-Gov" issues in the FAR and tidies-up some loose ends:



Share-in-Savings Contract Coverage Proposed for FAR

Comments are being solicited on a proposed FAR Subpart 39.3, Share-in-Savings Contracting, which would 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. The Section 210 authority to award SIS contracts expires September 30, 2005.

The following are the significant provisions of the proposed FAR Subpart 39.3:

Comments on the proposal should be submitted by October 31, 2003, to GSA, FAR Secretariat (MVA), 1800 F Street, NW, Room 4035, Attn: Laurie Duarte, Washington, DC 20405; or by e-mail to: ANPR.2003-008@gsa.gov.



DFARS Changes on Task Orders, Unique Item IDs

There were three interim rules amending the Defense FAR Supplement (DFARS) that were issued during October:

SBA Increases Facilities Support Services Size Standard

The Small Business Administration (SBA) is increasing the size standard for the facilities support services industry (North American Industry Classification System (NAICS) 561210) from $6 million in average annual receipts to $30 million, and the size standard for the sub-category of base maintenance from $23 million to $30 million.

SBA had received requests from firms in the industry to review its size standards for this industry. The firms argued that a size standard increase is warranted to reflect the size of federal contracts in this industry, which typically include a broad spectrum of services involving administrative support, custodial services, facilities repair and maintenance, and technical services, which often are $10 million per year or more in value.

SBA agrees that an increase is warranted, so it has decided to increase the size standard for facilities support services to $30 million, and eliminate the base maintenance sub-category because "the activities comprising this industry and the characteristics of firms in the industry no longer require separate size standards for base maintenance and for all other facilities support activities."



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