SUPPLEMENTARY INFORMATION:

A. Background

The General Services Administration (GSA) is amending the General Services Administration Acquisition Regulation (GSAR) to update the text addressing Part 517, Special Contracting Methods.

This rule is a result of the General Services Administration Acquisition Manual (GSAM) Rewrite Initiative undertaken by GSA to revise the GSAM to maintain consistency with the FAR and implement streamlined and innovative acquisition procedures that contractors, offerors, and GSA contracting personnel can utilize when entering into and administering contractual relationships. The GSAM incorporates the General Services Administration Acquisition Regulation (GSAR) as well as internal agency acquisition policy.

GSA will rewrite each part of the GSAR and GSAM, and as each GSAR part is rewritten, will publish it in the Federal Register .

This proposed rule amends GSAR 517.200, Scope of subpart, to delete paragraph (b) because provisions inconsistent with the FAR are authorized only when a deviation has been obtained. GSAR 517.202 is revised to make minor edits and to delete paragraph (a)(2)(v) because the evaluation of performance before exercising an option is necessary in all option situations, and does not reflect a standard that only emerging small businesses need to meet. At GSAR 517.202(b), a cross-reference was inserted to FAR 22.404-12 to remind contracting officers of special Davis Bacon Act requirements applicable to certain construction contract options. GSAR 517.202(c) was added to include a cross-reference to FAR 7.105(b)(4), reminding contracting officers to address options in the acquisition plan. Language in GSAR 517.203(c) was added to ensure there are funds available when a solicitation includes an option to extend. GSAR 517.207, Exercise of options, is revised to delete language that repeats the FAR and to include minor edits.

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 General Services Administration does not expect this proposed rule 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 revisions are not considered substantive. An Initial Regulatory Flexibility Analysis has, therefore, not been performed. We invite comments from small businesses and other interested parties. GSA will consider comments from small entities concerning the affected GSAR Part 517 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. (GSAR case 2007-G500), in correspondence.

C. Paperwork Reduction Act

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

Therefore, GSA proposes to amend 48 CFR part 517 as set forth below:

1. The authority citation for 48 CFR part 517 is revised to read as follows:

AUTHORITY: 40 U.S.C. 121(c).

2. Revise section 517.200 to read as follows:

This subpart applies to all GSA contracts for supplies and services, including:

(a) Services involving construction, alteration, or repair (including dredging, excavating, and painting) of buildings, bridges, roads, or other kinds of real property.

(b) Architect-engineer services.

3. Amend section 517.202 by—

a. Revising the introductory text of paragraph (a)(1);

b. Revising paragraphs (a)(2)(i) and (a)(2)(ii);

c. Removing paragraph (a)(2)(v);

d. Revising paragraph (b); and

e. Adding paragraph (c).

The revised and added text reads as follows:

(a) * * * (1) Options should be used when they meet one or more of the following objectives:

(2) * * *

(i) There is an anticipated need for additional supplies or services during the contract term.

(ii) Multiyear contracting authority is not available or its use is inappropriate and the contracting officer must anticipate a need for additional supplies or services beyond the initial contract term.

(b) Construction. (1) Construction contracts which contain options that extend the term of the contract must comply with the requirements of FAR 22.404-12 regarding the Davis-Bacon Act, and must contain one of the three clauses described at FAR 22.407(e), (f) or (g).

(2) For limitations on the use of options, see 536.213 and 536.270.

(c) Acquisition Planning. The benefits of using options in a contract should be discussed in the acquisition plan as addressed in FAR 7.105(b)(4).

4. Amend section 517.203 by removing from the introductory text the word “both” and adding the word “all” in its place, and adding paragraph (c) to read as follows:

(c) Availability of funds. ( printed page 32276)

5. Revise section 517.207 to read as follows:

In addition to the requirements of FAR 17.207, the contracting officer must also—

(a) Determine that the contractor's performance under the contract met or exceeded the Government's expectation for quality performance, unless another circumstance justifies an extended contractual relationship; and

(b) Determine that the option price is fair and reasonable.

5. Amend section 517.208 by removing from the introductory text the word “FSS's” and adding the word “FAS's” in its place.