DATE: October 1, 2003

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

SOURCE: Federal Register, October 1, 2003, Vol. 68, No. 190, page 56613

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

ACTION: Advance Notice of Proposed Rulemaking (ANPR)

SYNOPSIS: 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.

DATES: Comments should be submitted on or before October 31, 2003.

ADDRESSES: Submit written comments in response to the ANPR to General Services Administration, FAR Secretariat (MVA), 1800 F Street, NW, Room 4035, Attn: Laurie Duarte, Washington, DC 20405. Submit e-mail comments to: ANPR.2003-008@gsa.gov. Cite "ANPR FAR case 2003-008" when referring to this ANPR.

FOR FURTHER INFORMATION CONTACT: Craig R. Goral, 202-501-3856.

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 Section 210, agencies are permitted to enter into SIS contracts not to exceed five years (10 years with the agency head's approval). 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.

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

The following are the proposed contents of FAR Subpart 39.3, which would implement Section 210:

The introduction to the ANPR states that the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council, "seek the public's comment on the challenges associated with SIS contracts, such as the establishment of quantifiable baselines and a reasonable return on investment (ROI) over the life-cycle of the investment, so that this tool can be applied effectively to improve mission performance...The Councils, along with the OMB, wish to ensure the necessary guidance is in place for agencies to effectively motivate contractors and successfully capture the benefits of an SIS contract. Given the Government's limited experience with this tool...the Councils are soliciting public comment for consideration in drafting implementing FAR regulations...Respondents are welcome to share any insights that may assist in managing the use of SIS contracts, but are especially encouraged to comment on the following issues:

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

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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