SUPPLEMENTARY INFORMATION:

A. Background

On April 11, 2005, the Office of Management and Budget (OMB) issued a memorandum on the use of brand name specifications to reinforce the need to maintain vendor and technology neutral contract specifications. To provide for maximum competition, solicitations should limit the use of brand name specifications. As a general rule, contract specifications should emphasize the necessary physical, functional, and performance characteristics of a product - ;not brand names. OMB encouraged agencies to take steps to mitigate brand name usage and requested agencies to publicize the justification for use of brand name with the contract solicitation. While the justifications are generally available upon request, posting the brand name justifications will improve the overall transparency of the acquisition process. Contracting officers must be sensitive when dealing with proprietary information when posting justifications. FAR 6.305 requires contracting officers to carefully screen all justifications for contractor proprietary information and remove such information before making available to the public. Contracting officers are to adhere to the exemptions on disclosure of information contained in the Freedom of Information Act (5 U.S.C. 552) and the prohibitions against disclosure in FAR 24.202 in determining the information that should be removed.

The OMB memorandum applies to all acquisitions exceeding $25,000 that use brand name specifications, including open market purchases, purchases from the Federal Supply Schedules (FSS) program, and sole source procurements. Contracting officers should not use other contract vehicles instead of the FSS program when it is not in the best interest of the Government to do so, just to circumvent the brand name posting requirement.

To implement the OMB memorandum, the Councils are amending the FAR to add a requirement to publish on the GPE or e-Buy the documentation required by the FAR to support the use of brand name specifications. The proposed changes require—

• For brand name orders against the FSS program, posting to e-Buy the documentation or justification required by FAR 8.405-6. The rule also restricts the use of oral orders over $25,000 against the FSS that contain brand specifications.
• For non-FSS acquisitions, including simplified acquisitions, posting to the Federal Business Opportunities website (www.fedbizopps.gov) the justification or documentation required by FAR 11.105.

OMB issued a second memorandum on April 17, 2006 to provide additional implementation guidance to agencies when publicizing the brand name justification which reflects the approach above. In response to OMB's memoranda, agencies submitted several comments and questions on the posting requirement and the requirement for the brand name justifications. The questions and comments are summarized below and the Councils invite interested parties to comment on these questions.

1. The OMB memorandum requires agencies to post the brand name justification to e-Buy with the request for quotation (RFQ) when using the FSS. However, some agencies use commercial companies such as FedBid to post the RFQs for FSS purchases and FedBid posts the RFQ to FedBizOpps instead of e-Buy. Should agencies be allowed to post the brand name justification to FedBizOpps instead of e-Buy when they use FedBid or another commercial company to post an RFQ for FSS purchases? If an alternative posting solution is used, will OMB be able to obtain a report on the use of these brand name justifications, if necessary?

2. The OMB memorandum requires agencies to post brand name justifications for orders against the FSS but not for orders against indefinite-delivery contracts including GWACS. Agencies can avoid the posting requirement simply by purchasing on an indefinite-delivery contract instead of the FSS. Should agencies be required to post brand name justifications for orders against indefinite-delivery contracts? If yes, where is the best place to post the justification?

3. Should agencies be required to post brand name justifications for orders issued on the SmartBuy program and other strategic sourcing vehicles?

4. Should agencies be required to post brand name justifications to renew software license agreements that are required to receive software updates?

This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

The interim rule is not expected to 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 adds no new requirements for contractors. The rule requires agencies to post documentation required by the FAR to the GPE or e-Buy. An Initial Regulatory Flexibility Analysis (IRFA) has therefore not been prepared. The Councils will consider comments from small entities concerning the affected FAR Parts 5, 6, 8, 11, and 13 in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C 601, et seq. (FAC 2005-13, FAR case 2005-037), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose information ( printed page 57359) collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

D. Determination to Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary to limit the use of brand name specifications and provide for maximum competition. However, pursuant to Public Law 98-577 and FAR 1.501, the Councils will consider public comments received in response to this interim rule in the formation of the final rule.

Government procurement.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 5, 6, 8, 11, and 13 as set forth below:

1. The authority citation for 48 CFR parts 5, 6, 8, 11, and 13 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

2. Amend section 5.102 by adding paragraph (a)(6) to read as follows:

3. Amend section 6.302-1 in paragraph (c) by adding a new sentence before the last sentence to read as follows:

4. Amend section 8.402 by—

a. Adding to paragraph (c)(2) “(except see 8.405-6)” after “contractors”; and

b. Adding to paragraph (d) a new sentence after the second sentence to read as follows:

5. Amend section 8.405-1 by revising paragraphs (c) and (d)(1) to read as follows:

6. Amend section 8.405-6 by—

a. Revising paragraph (a) and the introductory text of paragraph (b);

b. Removing paragraph (b)(3);

c. Redesignating paragraph (b)(4) as (b)(3);

d. Revising paragraph (c);

e. Redesignating paragraphs (d), (e), and (f) as (f), (g) and (h) respectively;

f. Adding new paragraphs (d) and (e);

g. Removing from the newly designated paragraph (f) “of schedule contractors to fewer than required in 8.405-1 or 8.405-2”;

h. Removing from newly designated paragraph (g)(2)(iv) “8.405-6(b)” and adding “8.405-6(a) and (b)” in its place;

i. Revising newly designated paragraph (g)(2)(viii);

j. Removing from newly designated paragraph (h)(2) “(f)(3) or (f)(4)” and adding “(h)(3) or (h)(4)” in its place; and

k. Removing from newly designated paragraph (h)(3)(iii) “(f)(4)” and adding “(h)(4)” in its place.

The revised and added text reads as follows:

7. Amend section 8.406-1 by revising the first sentence of the introductory text to read as follows:

8. Amend section 11.105 by—

a. Redesignating paragraphs (a), (b), and (c) as (a)(1), (a)(2)(i), and (a)(2)(ii) respectively; and adding new paragraphs (a)(3) and (b);

b. Amending newly redesignated paragraph (a)(2)(i) by removing “and” from the end of the paragraph and adding “or” in its place; and

c. Revising newly redesignated paragraph (a)(2)(ii).

The revised and added text reads as follows:

9. Amend section 13.105 by adding paragraph (c) to read as follows:

10. Amend section 13.106-1 by—

a. Amending paragraph (b)(1) by adding “brand name” after “agreements,”;

b. Amending paragraph (b)(2) by adding “(including brand name)” after “For sole source”; and

c. Adding a new paragraph (b)(3) to read as follows—

11. Amend section 13.106-3 in paragraph (b)(3)(i) by adding “(see 13.106-1 for brand name purchases)” after “competition”.

12. Amend section 13.501 by—

a. Amending the paragraph heading in paragraph (a) by adding “(including brand name)” after “Sole source”;

b. Amending paragraph (a)(1)(i) by adding “(including brand name)” after “2.101,”; and

c. Amending paragraphs (a)(1)(ii) and (a)(2) by adding “(including brand name)” after “sole source”.