Effective April 25, the rule addresses multiple award contracts and how to determine price reasonableness of proposed commercial items.

Multiple Award Contracts.  The changes are a result of increased use of multiple award contracts and several recent allegationsthat award of task or delivery orders under them are not fair.  Incorporating with little change an earlier proposed rule,  a CO must now consider following issues when deciding to use multiple award contract.

Whether the contractor specializes in one or a few areas within the statement of work
Scope and complexity of the contract
Duration and frequency of task or delivery orders
Resources a contactor must have to perform expected orders
The ability to maintain competion amount awardees

The new rule also provides certain assurances to contractors where the government must now order a stated minimum quantity of supplies or services specified in the contract which is to be greater than a mere “nominal” quantity but not greater than the government is “fairly certain to order.”  The contract may also specify the minimium or maximum quantities the government may order under each task or delivery order and the maximum the government may order over a specified period of time.  Also an ombudsman contact will be specified in the contract to make it easier for contractors to  ? claims that task or delivery order awards were made without a fiar opportunity for competition (protests over task awards are usually not permitted).

Price Reasonableness.  Finalizing an interim rule in effect since September 1999, the FAC explains the circumstances under which COs should require offerors of exempt commercial items to provide information “other than cost or pricing data.”  For example, FAR 15.403.3 is amended to state the CO cannot obtain adequate infor4mation to establish price reasonableness of an offered price from indiependent sourcess the CO must require submission of information other than cost or pricing data from the offeror.  The FAR provision seeks to clairify procedures for obtaining other than cost or pricing data and clearly states that offerors who fail to comply will be ineligible for award.


In efforts to streamline the Defense Logistics Agency, the Defense Contract Management Command (DCMC) has been carved out of the DLA, put under the Under Secretary of Defense for Acquisition, Technology and Logistics and renamed the Defense Contract Management Agency (DCMA).  Since its inception in 1991, DCMC has carried out the Defense Department’s contract administration services functions which replaced separate entities in the military services.  The functions of the new named DCMA will continue.

In reponse to considerable uncertainty over how specific the government must be in pointing out weaknesses during competitive negotiations with potential contractors, a proposed governmentwide rule published in the April 3 issue of the Federal Registrar clarifies that a CO is not required to discuss every area in which a proposal could be improved.  The proposed rule would revise FAR 15.306(d) that currently requires contracting officiers to discuss with each offeror being considered for award     “significant weaknesses, deficiencies and adverse past performance information has not yet had an opportunity to respond.”  The proposed rule would encourage COs to discuss other aspects of a proposal that could be altered to improve offerors’ chances of winning an award such as cost, price, technical approach, past performance and terms and conditions.  However, the rule would add a CO “is not required to discuss every area where the proposal could be improved” leaving the scope of such discussions to the discretion of the CO.

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