Federal Acquisition Regulation: Construction Contract Administration
| Published date | 01 April 2020 |
| Citation | 85 FR 18181 |
| Record Number | 2020-05866 |
| Section | Proposed rules |
| Court | National Aeronautics And Space Administration |
Federal Register, Volume 85 Issue 63 (Wednesday, April 1, 2020)
[Federal Register Volume 85, Number 63 (Wednesday, April 1, 2020)]
[Proposed Rules]
[Pages 18181-18184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05866]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 12, 19, 36, 43, and 52
[FAR Case 2018-020; Docket No. FAR-2018-0020, Sequence No. 1]
RIN 9000-AN78
Federal Acquisition Regulation: Construction Contract
Administration
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to implement a section of the John S.
McCain National Defense Authorization Act for Fiscal Year 2019, which
requires agencies to provide a notice along with the solicitation to
prospective bidders and offerors regarding definitization of requests
for an equitable adjustment related to change orders under construction
contracts.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat Division at one of the addresses shown below on
or before June 1, 2020 to be considered in the formation of the final
rule.
ADDRESSES: Submit comments in response to FAR Case 2018-020 by any of
the following methods:
Regulations.gov: http://www.regulations.gov. comments via
the Federal eRulemaking portal by searching for ``FAR Case 2018-020''.
Select the link ``Comment Now'' that corresponds with FAR Case 2018-
020. Follow the instructions provided at the ``Comment Now'' screen.
Please include your name, company name (if any), and ``FAR Case 2018-
020'' on your attached document.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), 1800 F Street NW, 2nd Floor, ATTN: Lois
Mandell, Washington, DC 20405.
Instructions: Please submit comments only and cite FAR Case 2018-
020, in all correspondence related to this case. Comments received
generally will be posted without change to http://www.regulations.gov,
including any personal and/or business confidential information
provided. To confirm receipt of your comment(s), please check
www.regulations.gov, approximately two to three days after submission
to verify posting (except allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms. Camara Francis, Procurement
Analyst, at 202-550-0935, or by email at [email protected], for
clarification of content. For information pertaining to status or
publication schedules, contact the Regulatory Secretariat Division at
202-501-4755. Please cite FAR Case 2018-020.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing to amend the FAR to implement
section 855 of the John S. McCain National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232, 15 U.S.C. 644(w)).
Section 855 requires Federal agencies to provide a notice, along with
solicitations for construction contracts anticipated to be awarded to
small businesses, to prospective offerors including information about
the agency's policies or practices in complying with FAR requirements
related to the timely definitization of requests for equitable
adjustment on construction contracts. The notice must include data
regarding the time it took the agency to definitize requests for
equitable adjustment on construction contracts for the three-year
period preceding the issuance of the notice.
II. Discussion and Analysis
The proposed changes to the FAR are summarized in the following
paragraphs.
A. Solicitation notice regarding administration of change orders
for construction. New text is proposed in FAR part 36, Construction and
Architect-Engineer Contracts, subpart 36.5, Contract Clauses, to add
coverage of the requirement for a new solicitation notice to be
included in solicitations for construction. Specifically, new section
36.524, Notice to offerors regarding administration of change orders
for construction, contains the prescription for the use of new
solicitation provision 52.236-XX, Notice Regarding Administration of
Change Orders for Construction. New section 36.524 also includes
guidance for contracting officers regarding the information to be
inserted in the provision. This new solicitation provision, which is
proposed to be added in FAR part 52, Solicitation Provisions and
Contract Clauses, will provide a standardized way for contracting
officers to provide the notice required by section 855 of the NDAA for
FY 2019.
[[Page 18182]]
Additional coverage related to the requirement for the new
solicitation notice is proposed in FAR part 43, Contract Modifications,
subpart 43.2, Change Orders. A new paragraph is proposed for section
43.204, Administration, to instruct contracting offices and contract
administration offices to use a specific Federal system to collect data
on the time required to definitize unpriced change orders for
construction contracts. The data will be used in new solicitation
provision 52.236-XX.
In FAR part 12, Acquisition of Commercial Items, subpart 12.5,
Applicability of Certain Laws to the Acquisition of Commercial Items
and Commercially Available Off-The-Shelf Items, a new paragraph is
added to note that 15 U.S.C. 644(w), Solicitation Notice Regarding
Administration of Change Orders for Construction, is not applicable to
Executive agency contracts for the acquisition of commercial items.
B. Cross reference to coverage of new solicitation notice.
Section 19.502, Setting aside acquisitions, is amended to add a
cross reference to the new section 36.524.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Items, Including Commercially
Available Off-the-Shelf (COTS) Items
This rule proposes to implement a statutory requirement for Federal
agencies to provide a notice, along with solicitations for construction
contracts anticipated to be awarded to small businesses, to prospective
offerors regarding agency policies or practices, and agency past
performance, in complying with FAR requirements related to the timely
definitization of requests for equitable adjustments resulting from
change orders under construction contracts. The Federal Acquisition
Regulatory Council (FAR Council) intends to apply the new provision
52.236-XX, Notice Regarding Administration of Change Orders for
Construction, to contracts at or below the simplified acquisition
threshold (SAT), but does not intend to apply the new provision to
contracts for the acquisition of commercial items including COTS items.
A. Applicability to Contracts at or below the SAT. Pursuant to 41
U.S.C. 1905, a provision of law is not applicable to acquisitions at or
below the SAT unless the law (i) contains criminal or civil penalties;
(ii) specifically refers to 41 U.S.C. 1905 and states that the law
applies to acquisitions at or below the SAT; or (iii) the FAR Council
makes a written determination that it is not in the best interest of
the Federal Government to exempt contracts or subcontracts at or below
the SAT. If none of these conditions are met, the FAR is required to
include the statutory requirement(s) on a list of provisions of law
that are inapplicable to acquisitions at or below the SAT.
The purpose of this rule is to implement section 855 of the NDAA
for FY 2019. Section 855 requires Federal agencies to provide a notice,
along with solicitations for construction contracts anticipated to be
awarded to small businesses, to prospective offerors regarding agency
policies or practices, and agency past performance, in complying with
FAR requirements related to the timely definitization of requests for
equitable adjustments resulting from change orders under construction
contracts. Section 855 is silent on the applicability of these
requirements for acquisitions at or below the SAT and does not
independently provide for criminal or civil penalties; nor does it
include terms making express reference to 41 U.S.C. 1905 and its
application to acquisitions at or below the SAT. Therefore, it does not
apply to acquisitions at or below the SAT unless the FAR Council makes
a written determination as provided at 41 U.S.C. 1905.
Application of section 855 to acquisitions at or below the SAT will
maximize the number of small entities who would benefit from the
information to be provided regarding definitization of requests for
equitable adjustment resulting from change orders under construction
contracts. Approximately one third of construction contracts awarded in
FY 2016 through FY 2018 were valued at or below the SAT. Not applying
this rule to acquisitions at or below the SAT would exclude
acquisitions intended to be covered by section 855.
For these reasons, it is in the best interest of the Federal
Government to apply the requirements of the rule to acquisitions at or
below the SAT.
B. Applicability to Contracts for the Acquisition of Commercial
Items, Including COTS Items.
41 U.S.C. 1906 governs the applicability of laws to contracts for
the acquisition of commercial items, and is intended to limit the
applicability of laws to contracts for the acquisition of commercial
items. 41 U.S.C. 1906 provides that if a provision of law contains
criminal or civil penalties, or if the FAR Council makes a written
determination that it is not in the best interest of the Federal
Government to exempt commercial item contracts, the provision of law
will apply to contracts for the acquisition of commercial items.
Likewise, 41 U.S.C. governs the applicability of laws to COTS items,
with the Administrator for Federal Procurement Policy the decision
authority to determine that it is in the best interest of the
Government to apply a provision of law to acquisitions of COTS items in
the FAR. The FAR Council and the Administrator for Federal Procurement
Policy have not made such determination, therefore this rule does not
apply to commercial items.
IV. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993. This rule is not a major rule
under 5 U.S.C. 804.
V. Executive Order 13771
This proposed rule is not subject to E.O. 13771, Reducing
Regulation and controlling Regulatory Costs, because this rule is not
expected to be a significant regulatory action under E.O. 12866.
VI. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this change 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.
However, an Initial Regulatory Flexibility Analysis (IRFA) has been
performed and is summarized as follows:
DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to implement section 855 of the John S.
McCain National Defense Authorization Act (NDAA) for Fiscal Year
(FY) 2019, which requires Federal agencies to provide a notice,
along with solicitations for construction contracts anticipated to
be awarded to small businesses, to prospective offerors regarding
agency policies or practices in complying with FAR requirements
related to the timely definitization of requests for equitable
adjustment on construction contracts. The notice must include
information on the
[[Page 18183]]
agency's policies or practices on definitizing equitable adjustments
on construction contracts and data on the amount of time it took the
agency to definitize requests for equitable adjustment on
construction contracts during the three-year period preceding the
issuance of the notice.
The objective of this proposed rule is to provide contractors
with information about an agency's past performance in definitizing
equitable adjustments under construction contract change orders as
required by section 855 of the NDAA for FY 2019.
This rule is primarily aimed at Federal agencies, requiring them
to provide a notice of their past performance on definitizing
equitable adjustments for construction contracts. The notice will
provide potential small business offerors with information that may
be useful to them as they prepare, or decide whether to prepare and
submit, a proposal in response to an agency's solicitation for
construction. For example, if an agency has a poor history of
definitizing equitable adjustments, potential small business
offerors may reconsider whether to submit a proposal in response to
that agency's solicitation. Alternately, when preparing their
proposals, small business offerors may consider the additional costs
that could be incurred if it is likely they will experience delays
in the definitization of equitable adjustments.
An analysis of the Federal Procurement Data System (FPDS)
reveals that an average of 2,340 unique entities per year were
awarded construction contracts during FY 2016, 2017, and 2018. Of
those, 1,872 were small entities. The number of construction
contracts awarded in FY 2016, 2017, and 2018 averaged 4,488 per
year, of which 3,355 were awarded to small entities. Additionally,
during these same years, an average of 3,939 construction-related
task orders were awarded each year to approximately 1,069 unique
entities; 3,254 of those task orders were awarded to 851 small
entities. On average, over FY 2016, 2017, and 2018, 6,503
modifications were issued each year to approximately 1,582 entities
for change orders or definitization of change orders under
construction contracts. Of those, approximately 3,803 modifications
were issued to 1,147 small entities.
This proposed rule does not include any new reporting,
recordkeeping or other compliance requirements for small entities.
The proposed rule does not duplicate, overlap, or conflict with
any other Federal rules.
There are no known significant alternative approaches that would
accomplish the stated objectives of the applicable statute.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the SBA. A copy of the IRFA
may be obtained from the Regulatory Secretariat Division. DoD, GSA, and
NASA invite comments from small business concerns and other interested
parties on the expected impact of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by this rule
in accordance with 5 U.S.C. 610. Interested parties must submit
comments separately and should cite 5 U.S.C. 610 (FAR case 2018-020) in
correspondence.
VII. Paperwork Reduction Act
The rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. chapter 35).
List of Subjects in 48 CFR Parts 12, 19, 36, 43, and 52
Government procurement.
William F. Clark,
Director, Office of Governmentwide Acquisition Policy, Office of
Acquisition Policy, Office of Governmentwide Policy.
Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR part(s)
12, 19, 36, 43, and 52 as set forth below:
0
1. The authority citation for 48 CFR part(s) 12, 19, 36, 43, and 52
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 12--ACQUISITION OF COMMERCIAL ITEMS
0
2. Amend section 12.503 by adding paragraph (a)(10) to read as follows:
12.503 Applicability of certain laws to Executive agency contracts
for the acquisition of commercial items.
(a) * * *
(10) 15 U.S.C. 644(w), Solicitation Notice Regarding Administration
of Change Orders for Construction (see 36.524).
* * * * *
PART 19--SMALL BUSINESS PROGRAMS
0
3. Add section 19.502-11 to read as follows:
19.502-11 Solicitation notice regarding administration of change
orders for construction.
See 36.524 for the requirement to provide a notice to offerors
regarding definitization of requests for equitable adjustment for
change orders under construction contracts.
PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
0
4. Revise subpart 36.5 heading to read as follows:
Subpart 36.5--Solicitation Provisions and Contract Clauses
* * * * *
0
5. Revise section 36.500 to read as follows:
36.500 Scope of subpart.
(a) This subpart prescribes provisions and clauses for insertion in
solicitations and contracts for--
(1) Construction; and
(2) Dismantling, demolition, or removal of improvements contracts.
(b) Provisions and clauses prescribed elsewhere in the Federal
Acquisition Regulation (FAR) shall also be used in such solicitations
and contracts when the conditions specified in the prescriptions for
the provisions and clauses are applicable.
0
6. Add section 36.524 to read as follows:
36.524 Notice to offerors regarding administration of change orders
for construction.
(a) The contracting officer shall insert the provision at 52.236-
XX, Notice Regarding Administration of Change Orders for Construction,
in solicitations for construction that are set aside, or will be
awarded on a sole-source basis, pursuant to part 19. This provision
does not apply to the acquisition of commercial items using part 12
procedures.
(b) The contracting officer shall complete the fill-ins to
provide--
(1) Information to offerors about the agency's policies or
procedures in complying with requirements relating to timely
definitization of requests for equitable adjustment for change orders
for construction; and
(2) Data for the prior 3 fiscal years, available at [website to be
determined], regarding the time required to definitize requests for
equitable adjustment for change orders for construction (see 43.204).
Prior to August 13, 2021, if fewer than 3 fiscal years of data are
available, provide data for the number of fiscal years that are
available.
PART 43--CONTRACT MODIFICATIONS
0
7. Amend section 43.204 by redesignating paragraph (b)(3) as paragraph
(b)(3)(i), and adding paragraph (b)(3)(ii) to read as follows:
* * * * *
43.204 Administration.
* * * * *
(b) * * *
(3) * * *
(ii) Contracting offices and contract administration offices, as
appropriate,
[[Page 18184]]
shall use [website to be determined] to record and maintain data
regarding the time required to definitize requests for equitable
adjustment associated with unpriced change orders for construction. The
contracting officer shall ensure the data is entered into [website to
be determined] promptly.
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
8. Add section 52.236-XX to read as follows:
52.236-XX Notice Regarding Administration of Change Orders for
Construction.
As prescribed in 36.524, insert the following provision:
Notice Regarding Administration of Change Orders for Construction
(DATE)
(a) As required by 15 U.S.C. 644(w), this provision provides
information relating to the definitization of requests for equitable
adjustment for change orders under construction contracts.
(b) Federal Acquisition Regulation (FAR) 43.204 provides policy
and guidance relating to definitization of requests for equitable
adjustment resulting from change orders for contracts, including
those for construction. In addition to FAR 43.204, the agency
issuing this solicitation has established the following policies or
procedures that apply to definitization of requests for equitable
adjustment for change orders under construction contracts: _.
[Contracting officer insert description of applicable policies or
procedures, or address of a publicly accessible website containing
this information. If no applicable policies or procedures exist,
insert ``None.'']
(c) Information on the agency's past performance in definitizing
requests for equitable adjustment associated with change orders for
construction for fiscal year(s) _ [Contracting Officer insert the
prior fiscal years, up to 3, for which information is available] is
available at _ [Contracting Officer insert address of publicly
accessible website containing this information] or in the following
table:
------------------------------------------------------------------------
Time to definitize after receipt of Number of requests for
request for equitable adjustment for equitable adjustment
construction definitized for construction
------------------------------------------------------------------------
30 days or less........................ ...............................
31 to 60 days.......................... ...............................
61 to 90 days.......................... ...............................
91 to 180 days......................... ...............................
181 to 365 days........................ ...............................
366 or more days....................... ...............................
After completion of contract ...............................
performance via a contract
modification addressing all
undefinitized requests for equitable
adjustment received during contract
performance.
------------------------------------------------------------------------
[Contracting Officer insert number of requests for equitable
adjustment definitized in each category.]
(End of provision)
[FR Doc. 2020-05866 Filed 3-31-20; 8:45 am]
BILLING CODE 6820-EP-P
