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Proposed Rule

General Services Acquisition Regulation; GSAR Case 2006-G504; Rewrite of GSAR Part 516; Types of Contracts

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Office of the Chief Acquisition Officer, General Services Administration (GSA).


Proposed rule.


The General Services Administration (GSA) is proposing to amend the General Services Acquisition Regulation (GSAR) to revise language pertaining to requirements for types of contracts.


Interested parties should submit written comments to the Regulatory Secretariat on or before September 8, 2008 to be considered in the formulation of a final rule.


Submit comments identified by GSAR Case 2006-G504 by any of the following methods:

  • comments via the Federal eRulemaking portal by inputting “GSAR Case 2006-G504” under the heading “Comment or Submission.” Select the link “Send a Comment or Submission ” that corresponds with GSAR Case 2006-G504. Follow the instructions provided to complete the “Public Comment and Submission Form.” Please include your name, company name (if any), and “GSAR Case 2006-G504” on your attached document.
  • Fax: 202-501-4067.
  • Mail: General Services Administration, Regulatory Secretariat Division (VPR), 1800 F Street, NW, Room 4041, ATTN: Laurieann Duarte, Washington, DC 20405.

Instructions: Please submit comments only and cite GSAR Case 2006-G504 in all correspondence related to this case. All comments received will be posted without change to, including any personal and/or business confidential information provided.

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For clarification of content, contact Ms. Cecelia Davis at (202) 219-0202, or by e-mail at For information pertaining to the status or publication schedules, contact the Regulatory Secretariat (VPR), Room 4035, GS Building, Washington, DC 20405, (202) 501-4755. Please cite GSAR Case 2006-G504.

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A. Background

The General Services Administration (GSA) is amending the General Services Administration Acquisition Regulation (GSAR) to revise the prescriptions for clauses included in GSAR 516.203-4, Contract clauses, and GSAR 516.506, Solicitation provisions and contract clauses, and to make minor changes to GSAR 516.603-3, Limitations. The associated clauses located in GSAR 552.216 are amended to relocate the clause at 552.216-70, Economic Price Adjustment—FSS Multiple Award Schedule Contracts, to GSAR 552.238, to retain the clause at 552.216-71, Economic Price Adjustment-Stock and Special Order Program Contracts, to revise GSAR clause 552.216-72, Placement of Orders, to make minor edits to GSAR clause 552.216-73, Ordering Information, and to include new GSAR clause 552.216-XX, Task-Order and Delivery-Order Ombudsman.

This proposed rule is a result of the General Services Administration Acquisition Manual (GSAM) Rewrite initiative. The initiative was 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 revises GSAR 516.203-4, Contract clauses, 516.506, Solicitation provisions and contract clauses, and associated clauses in GSAR 552.516. The information in GSAR 516.203-4(a) is relocated to GSAR Part 538 and paragraph (b) is renumbered accordingly and contains minor edits. GSAR 516.506 is revised to delete paragraphs (b), (c), (d), and (e) from this part and relocate them to GSAR Part 538. New GSAR clause, 552.216-XX, Task-Order and Delivery-Order Ombudsman, is added to describe the GSA Ombudsman’s responsibilities. GSAR 516.603-3, Limitations, is renumbered as 516.603-70 as a supplement to the FAR and the title is changed to “Limitations” on the use of letter contracts for architect-engineer (A-E) services. GSAR clause 552.216-70, Economic Price Adjustment—FSS Multiple Award Schedule Contracts, is relocated to GSAR Part 538. The GSAR clause at 552.216-72, Placement of Orders, is revised to delete Alternates II, III, and IV and relocate them to GSAR Part 538, and it contains minor edits. The GSAR clause at 552.216-73, Ordering Information, contains minor edits.

Discussion of Comments

There were six public comments received in response to the “Advanced Notice of Proposed Rulemaking.” The first commenter suggested that the GSAR should include coverage on Governmentwide acquisition contracts (GWAC) and the use of GSA assisted services. The GWAC and assisted services are very closely related: GSA’s assisted services are offered through GWAC contracts. GWACs are negotiated acquisitions covered by FAR Part 15 (GSAM 515), while FAR Part 16 (GSAM Part 516) covers the authority for GWACs (i.e., IDIQ contracts). Both GSAM parts are in the rewrite effort so, to a degree, the comment is being addressed. During our rewrite process, our proposed coverage of GWACs and assisted services was determined to be satisfactory by the cognizant office within FAS. We construe the comment, however, to mean that the GSAM should devote a special section to GWACs and assisted services, such as is done in GSAM 538 which addresses the Federal Supply Schedule Program. The suggestion is not without merit: however, it is outside the scope of the current GSAM effort, which did not envision the creation of new GSAM parts. The current effort has revealed a number of issues that need to be addressed in future updates to the GSAM and we propose to revisit that comment when future revisions are considered. The second commenter suggested establishing a central location for all contract clauses GSA includes in FSS and GWAC contracts: in particular, the clauses denoted as “x-FSS clauses.” One of the purposes of the GSAM rewrite is to put all clauses used by GSA in the GSAM. While this goal may not be 100 percent achieved in the initial rewrite effort, at some point in time all clauses will be in one place—the GSAM.

The third and fourth commenter submitted a response that said GSA schedule holders are penalized because they are subject to the Economic Price Adjustment clause limiting price increase to 10 percent after a one-year waiting period. GSAR clauses 552.216-70 and 552.216-71 establish contract coverage for economic price adjustments under Multiple Award Schedules (MAS) and Global Supply Item contracts, respectively. With respect to the MAS, GSAR clause 552.216-70, this comment will be addressed in the coverage for GSAR Part 538. GSAR clause 552.216-71 indicates that there is a 10 percent cap on such adjustments unless the Contracting Director approves a higher percentage. In addition, the percentage actually used should be based on historical trends drawn from an index such as the Producer Price Index (PPI). In these cases, the GSAR mirrors the FAR’s guidance on economic price adjustments for standard supplies (non-Schedule) as outlined in FAR clause 52.216-2, which also includes the 10 percent cap. Accordingly, the GSAR coverage (meant to be used for a subset of all supply contracts, specifically FAS Schedules) follows the FAR, and the change requested would require a change to the FAR and cannot be made independently in the GSAR. Also, the GSAR makes clear that the percentage used in Schedule contracts (whether above or below 10 percent) is to be based on established historical trends (PPI) and not on a negotiation between one agency and one contractor on each individual contract. This allows the percentage established for each contract to be based on objective data. This percentage should normally be 10 percent, unless based on a trend established by an appropriate index such as the Producer Prices and Price Index during the most recent 6-month period indicates that a different percentage is more appropriate. The fifth commenter recommended that the GSAR be revised to clarify that subcontractor labor hours under a Time and Material (T&M) contract are paid at the rates established in the prime contract or task order. Although the recommendation references “Time and Material” contracts, the issue deals with contract financing and should be addressed in GSAM Part 532, Contract Financing. The sixth commenter recommended that the GSAR be revised to provide that contractors may apply G&A to travel costs and other direct changes in accordance with each vendor’s approved cost accounting standards disclosure statement. This issue will be addressed in the rewrite of GSAR Part 531.Start Printed Page 39277

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 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 Parts 516 and 552 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 2006-G504), 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.

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List of Subjects in 48 CFR Parts 516 and 552

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Dated: July 2, 2008

Al Matera,

Director, Office of Acquisition Policy.

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Therefore, GSA proposes to amend 48 CFR parts 516 and 552 as set forth below:

1. The authority citation for 48 CFR parts 516 and 552 is revised to read as follows:

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

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2. Amend section 516.203-4 by—

a. Removing paragraph (a), and redesignating paragraphs (b) and (c) as (a) and (b), respectively;

b. Revising the newly redesignated paragraph (a);

c. Removing from the newly redesignated paragraph (b)(1) “you decide” and adding “the contracting officer decides” in its place; and

d. Removing the period from the end of the newly redesignated paragraphs (b)(1)(i) and (b)(1)(ii) and adding a semicolon in its place; and removing the period from the newly redesignated paragraph (b)(1)(iii) and adding “; and ”in its place.

The revised text reads as follows:

Contract clauses.

(a) Special Order Program Contracts. In multiyear solicitations and contracts, after making the determination required by FAR 16.203-3, use 552.216-71, Economic Price Adjustment-Stock and Special Order Program Contracts, or a clause prepared as authorized in paragraph (a)(3) of this subsection.

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3. Amend section 516.506 by—

a. Removing from paragraph (a), “FSS” each time it appears and adding “FAS”, in its place; and

b. Removing paragraphs (b), (c), (d), and (e) and adding new paragraph (b), to read as follows:

Solicitation provisions and contract clauses.
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(b) In solicitations and contracts for GSA awarded IDIQ contracts, insert the clause 552.216-XX, Task-Order and Delivery-Order Ombudsman.

4. Amend section 516.603-3 by—

a. Revising the section heading;

b. Revising paragraph (a);

c. Removing from the introductory text of paragraph (b) “You” and adding “The contracting officer”, in its place, and revising paragraph (b)(1); and

d. Removing from paragraph (c) “you must issue” and adding “the contracting officer issues,” in its place.

The revised text reads as follows:

Limitations on the use of letter contracts for architect-engineer (A-E) services.

(a) Requirement for a price proposal. The proposed A-E must provide a price proposal for the non-design effort before the award of a letter contract.

(b) * * *

(1) The scope. If the scope includes the design effort, the contracting officer should only authorize the A-E to perform those services that are independent of the design effort (for example, feasibility studies, existing facility surveys or site investigation, etc.). Do not authorize the A-E to begin the design effort before the letter contract is definitized.

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5. Remove section 552.216-70.


6. Amend section 552.216-71 by removing from the introductory text of the clause “516.203-4(b)” and adding “516.203-4(a)” in its place.

7. Amend section 552.216-72 by—

a. Removing from paragraph (c) “GSA’s Federal Supply Service (FSS)” and adding “General Services Administration’s Federal Acquisition Service (FAS)”, in its place; and removing from the second sentence “FSS” and adding “FAS” in its place;

b. Removing from paragraph (a) of Alternate I “Federal Supply Service (FSS)” and adding “Federal Acquisition Service (FAS)” in its place;

c. Removing from paragraphs (c) and (d) of Alternate I “FSS” and adding “FAS” in its place, respectively; and

d. Removing Alternates II, III, and IV.


8. Amend section 552.216-73 in paragraph (a) by removing “Federal Supply Service (FSS)” and adding “Federal Acquisition Service (FAS)” in its place.


9. Add section 552.216-XX to read as follows:

Task-Order and Delivery-Order Ombudsman.

As prescribed in 516.506, insert the following clause:


The GSA Ombudsman will exercise jurisdiction on any matters pertaining to ID/IQ contracts awarded by GSA. The ombudsman will review complaints from contractors and ensure that they are afforded a fair opportunity to be considered for award, consistent with the procedures in the contract.

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[FR Doc. E8-15587 Filed 7-8-08; 8:45 am]