of such authority, the FEHBP contracting officer is subject to the requirements in FPR 1-1.403 and any further requirements, consistent with the Federal Procurement Regulations, imposed by OPM.

§ 16-1.403 Requirements to be met before entering into contracts.

No contract shall be entered into unless all applicable requirements of law, Executive Orders and regulations have been met. The term "regulations" includes those issued by any regulatory agency whether or not incorporated or referenced in the Federal Procurement Regulations.

§ 16-1.405 Ratification of unauthorized contract awards.

FPR 1-1.405 is applicable to the administration of the FEHBP contracts.

the antitrust laws, the procedures in FPR 1-1.9 may be used in referring such proposals to the Attorney General.

Subpart 16-1.10—Publicizing Procurement Actions

§ 16-1.1001 General policy.

FPR 1-1.10 is applicable to the administration of FEHBP contracts. In addition, OPM will implement the following sections in the manner prescribed below.

§ 16-1.1003 Synopses of proposed procurements.

At least 60 days prior to the beginning of the annual negotiation process for new FEHBP contracts, OPM shall publish a notice of its proposed procurement action in the Department of Commerce Synopsis. Interested carriers shall be directed to OPM for information concerning submission of applications for participation.

§ 16-1.1004 Synopses of contract awards.

At the close of the negotiation period, OPM shall publish in the Department of Commerce Synopsis a list of all carriers approved for participation in the FEHBP during the next contract year.

Subpart 16-1.12-Responsible Prospective Contractors

§ 16-1.1200 Scope of subpart.

This subpart prescribes the policies concerning the responsibility of prospective carriers.

§ 16-1.1201 Applicability.

FPR subpart 1-1.12 is applicable to the administration of FEHBP contracts. In addition, carriers must meet the requirements of 5 U.S.C. chapter 89, and 5 CFR Part 890, and this Chapter 16.

(a) Any necessary determinations and findings have been made (see subpart 16-3.3);

(b) Such clearances or approvals as is prescribed in applicable agency procedures have been obtained; and

(c) The prospective contractor has been determined to be responsible in accordance with Subpart 16-1.12.

§ 16-3.102 Factors to be considered in negotiating contracts.

FPR 1-3.102 is applicable to the administration of the FEHBP contracts. Additional factors to be considered are provided in 5 CFR 890.201 and 890.202.

§ 16-3.104 Disclosure of mistakes after award.

FPR 1-3.104 is applicable to the administration of FEHBP contracts.

Subpart 16-3.2-Circumstances Permitting Negotiation

§ 16-3.200 Scope of subpart.

FPR 1-3.200 is applicable to the administration of the FEHBP contracts.

§ 16-3.215 Otherwise authorized by law.

(a) Pursuant to the authority of section 302(c)(15) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 252(c)(15)) purchases and contracts may be negotiated without formal advertising if "otherwise authorized by law." This provision preserves the authority to negotiate contracts conferred by other legislation.

(b) Contracts between OPM and health benefits carriers are contracted for "without regard to section 5 of title 41 or other statute requiring competitive bidding." (5 U.S.C. 8902) This statutory authority is construed to authorize negotiation pursuant to section 302(c)(15) of the Act and without regard to the advertising requirements of sections 302(c) and 303 of the Act (see FPR 1-3.215(c)).

are applicable to the administration of the FEHBP contracts.

FPR 1-3.302(e)

FPR 1-3.305

FPR 1-3.308 (a), (b), and (d)

Subpart 16-3.4-Types of Contracts

§ 16-3.400 Scope of subpart.

This subpart (a) describes and defines the types of contracts used in the Federal Employees Health Benefits Program; (b) defines the areas of applicability in which each type of contract may be used appropriately and sets forth considerations and policies governing the choice of type of contract; and (c) imposes conditions on the use of certain of the available contract types.

§ 16-3.401 Type of health benefits plan contracts.

(a) The Federal Employees Health Benefits Act provides that the Office of Personnel Management may contract with qualified carriers. The Act provides that rates charged under these health benefit plans shall reasonably and equitably reflect the cost of the benefits provided. Two types of contracts are used in the FEHBP, experience rated and community rated. Definitions and explanations of these two contract types are contained in Part 4 of this Chapter 16, "Special Types and Methods of Procurement."

(b) Other contract types or combination of types which will promote the best interest of the Government, subject to the restrictions in FPR 13.401(b) or in 5 U.S.C. 8902(i), may be negotiated if appropriate in the circumstance. To the extent that a contract type other than experience rated or community rated is selected, the relevant subsection of FPR Subpart 13.4 would apply. However, the costplus-a-percentage-of-cost contract shall not be used.

Subpart 16-3.8-Price Negotiation Policies and Techniques

§ 16-3.800 Scope of subpart.

FPR 1-3.800 is applicable to the administration of the FEHBP contracts.

The renegotiation of rates or benefits in an FEHBP contract constitutes a modification as that term is used in FPR 1-3.800.

§ 16-3.801 Basic policy.

FPR 1-3.801 is applicable to the administration of the FEHBP contracts and is supplemented as follows: The FEHBP contract pricing team specified in FPR 1-3.801-3(b)(1) may include an actuary.

§ 16-3.802 Preparation for negotiation.

The provisions of FPR 1-3.802(a) should be adapted to the FEHBP procedures and requirements as specified in Part 4 of this chapter 16, "Special Types and Methods of Procurement" and 5 CFR 890.203.

§ 16-3.803 Type of contract.

FPR 1-3.803 is applicable to the administration of the FEHBP contracts.

§ 16-3.804 Conduct of negotiations.

FPR 1-3.804 is applicable to the administration of the FEHBP contracts.

§ 16-3.805 Selection of offerors for negotiation and award.

Application for approval of, and proposal of amendments to, health benefits plans should be made according to the procedures set out in 5 CFR Part 890.

§ 16-3.806 Cost, profit, and price relationship.

FPR 1-3.806 is applicable to the administration of the FEHBP contracts. § 16-3.807 Pricing techniques.

§ 16-3.807-1 General.

FPR 1-3.807-1 (a) and (b)(2) are applicable to the administration of the FEHBP contracts.

§ 16-3.807-2 Requirements for price or cost analysis.

FPR 1-3.807-2 is applicable to the administration of FEHBP contracts.

§ 16-3.807-3 Cost or pricing data.

(a) FPR 1-3.807-3 is applicable to the administration of FEHBP contracts. To clarify implementation of

the cost or pricing data requirement on the FEHBP, the following supplementary information is provided:

(1) A community rated contract (see OPMPR 16-4.152-1(a)) meets the ex

ception cited in FPR 1-3.807

3(b)(1)(ii). Consequently, the contracting officer need not apply FPR 13.807-3(a) to carriers offering community rated plan contracts. The contracting officer may, however, require the carrier of a community rated plan to demonstrate that the community rate is in fact a community rate. In any event, the carrier shall be required to submit a certificate in accordance with OPMPR 16-3.807-50 certifying that the proposed rates are in fact a community rate as defined by OPMPR 16-4.151-2.

Cost and pricing data may be required for any portion of the proposed rate that is not a part of the community rate if that portion is otherwise in accordance with the dollar criteria of FPR 1-3.807-3.

(2) Since cost or pricing data is not required for a community rated contract, subcontract cost and pricing data as referred to in FPR 1-3.8073(d)(1) need not be requested by the contracting officer.

(3) The contracting officer shall require carriers offering experience rated plan contracts to submit written cost or pricing data in accordance with FPR 1-3.807-3. Generally, each experience rated plan shall be required to submit, with its rate proposal, a projection of its operations for completion of the current year and for succeeding contract year(s), and to explain the derivation of each item in the projection. Data supplied by the carrier will be checked against reports filed by the carrier showing monthly paid claims incurred by quarter of each year. The data in these reports will also be verified by comparison to the carrier's annual accounting statement filed with OPM. The Office of Actuary will review the information filed by the carrier and compare the carrier's data with an independent projection developed by the actuary.

(4) A carrier offering an experience rated plan which is required to submit and certify cost or pricing data in ac

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tracts. See OPMPR 16-4.151-13 for definition of subcontractor.

§ 16-3.807-11 Overhead rate consideration.

FPR 1-3.807-11 is applicable to the administration of the FEHBP contracts. In FEHBP, overhead (indirect) costs are components of administrative expenses in the FEHBP.

§ 16-3.807-50 Certificate of community rating.

(a) Each carrier proposing a community rate shall submit the following certification with its proposal:

CERTIFICATE OF COMMUNITY RATING

This is to certify that the proposed subscription rate, subject to recognized adjustments allowed by OPMPR 16-4.152-1(a)(2), is a community rate in accordance with OPMPR 16-4.151-2.

(b) If it is determined that the subscription rate (subect to the adjustments allowed by OPMPR 16-4.1521(a)) is not a community rate as defined by OPMPR 16-4.151-2, the Government shall be entitled to an adjustment of the price so that it is a true community rate. If the price of the adjusted rate is lower than the subscription rate, the Government will be entitled to a price reduction. If the carrier cannot or refuses to determine a true community rate, the Government may require the carrier to experience rate the contract and if the price for an experience rated contract is less than the original contract price, the Government is entitled to a price reduction. The clause set forth in OPMPR 163.814-50 shall be inserted in each community rated contract.

§ 16-3.808 Service charge.

FPR 1-3.808-1 is applicable in the administration of FEHBP contracts. In determining the service charge.

FEHBP carriers shall apply the principles set out in FPR Temporary Regulation 61, 46 FR 27645-27649, dated May 21, 1981 in the administration of FEHBP contracts.