(2) If the cost comparison results in a decision to contract out, the contracting officer shall proceed to award a contract. In addition, the contractor shall be put on notice (i) that such award is conditioned upon its offer still being more economical than inhouse performance after completion of the public review period plus any additional time required pursuant to the review procedures set forth in paragraph (c) of this section, and (ii) that preparation for commencement of performance shall not begin until notification to commence is received from the contracting officer. Concurrent with the award, the contracting officer shall publicly announce the results of the cost comparison to all interested parties. This public announcement shall include revealing and making available for public review the in-house cost estimate with detailed supporting data, the completed cost comparison form, and the name of the contractor. Interested parties shall also be informed that contractor preparations for performance are conditioned upon completion of a public review period plus any additional time required pursuant to the review procedures set forth in paragraph (c) of this section. The period for public review shall commence with the announcement of the results of the cost comparison by the contracting officer and shall run for a period of at least 5 working days (a maximum of 15 working days, if the action is deemed by the contracting officer to be complex). Upon completion of the public review period and resolution of questions raised, if any, the Decision Summary Form shall be completed and approved. After receiving clearance from appropriate channels, the contracting officer shall issue an authorization to commence to the contractors, or cancel the contract, as appropriate.

(3)(i) If the result of the cost comparison is in favor of in-house performance, the contracting officer shall announce the results of the cost comparison and make available for public review the in-house cost estimate, the detailed supporting data relative to the in-house cost estimate, the completed cost comparison form, and the price of the offeror whose offer was

the most advantageous to the Government. The period for public review shall commence with the announcement by the contracting officer of the results of the cost comparison and shall run for a period of at least 5 working days (a maximum of 15 working days if the action is deemed by the contracting officer to be complex).

(ii) The contracting officer shall specify in the contract the number of days which are applicable in

§ 1-4.1405(c) and in § 1-4.1406(c) (1) and (2).

(c) Review procedures. This procedure shall be used only to resolve questions concerning the calculation of the cost comparison and shall not apply to questions concerning potential award to one firm in preference to another. Requests for review of any discrepancy in the cost comparison shall be filed with the contracting officer, in writing, by directly affected parties. These requests shall be considered only if based on specific objections and filed within the public review period. The contracting officer shall forward these requests for review to the preparer of the in-house cost estimate for consideration in accordance with agency procedures. Decisions with regard to these requests for review are final and shall be communicated to the requesting party within 30 days of receipt.

81-4.1405 Formally advertised contracts clause.

All solicitations for formally advertised contracts for commercial and industrial-type work, and resultant contracts shall include the following clause in accordance with 4.1403(a).

§ 1

NOTICE OF COST COMPARISON (ADVERTISED)

(a) Bidders are notified that this solicitation is a part of a cost comparison to determine whether accomplishing the specified work in-house or by contract is more economical. The determination shall be based on the procedures contained in OMB Circular A-76, as amended, and the related Cost Comparison Handbook.

(b) The Government's in-house cost estimate shall be based on the statement of work set forth in this solicitation and shall be submitted to the Contracting Officer in a sealed envelope not later than the time set

for bid opening. At the time of bid opening, the bids and the sealed Government inhouse estimate will be opened and the results announced. This announcement is based upon an initial comparison of the cost of in-house performance with the cost of contracting out as indicated on the cost comparison form. The abstract of bids, the completed cost comparison form, and detailed supporting data relative to the inhouse cost estimate shall be made available to interested parties for review.

(c) A period of 1 working days will be provided for public review by interested parties of the cost comparison data. No final determination regarding the question of inhouse or contractor performance will be made during the review period. Interested parties may file written requests, based on specific objections, for review of the cost comparison results with the Contracting Officer during this period. This review shall only be used to resolve questions concerning the calculation of the cost comparison, and shall not apply to decisions regarding selection of one bidder in preference to another. Decisions with regard to such requests are final.

(d) After evaluation of bids, and resolution of requests for review, if any, the Contracting Officer shall announce the results of the cost comparison and either award a contract or cancel the solicitation. The completed cost comparison analysis shall be made available to interested parties.

(e) In accordance with provisions of the clause "Late Bids, Modifications of Bids, or Withdrawal of Bids," a late modification which displaces the otherwise low in-house cost estimate shall not be considered. An otherwise low in-house cost estimate is considered a successful bid and cannot be displaced by a late modification within subparagraph (d) of that clause.

(End of Clause)

§ 1-4.1406 Negotiated contracts clause.

All solicitations for negotiated contracts for commercial or industrialtype work and resultant contracts shall include the following clause in accordance with § 1-4.1403(b).

NOTICE OF COST COMPARISON (NEGOTIATED)

(a) Offerors are notified that this solicitation is a part of a cost comparison to determine whether accomplishing the specified work in-house or by contract is more economical. The determination shall be based on the procedures contained in OMB Circular A-76, as amended, and the related Cost Comparison Handbook.

'Number of days as stated here or elsewhere in this contract.

(b) The Government's in-house cost estimate shall be based on the statement of work set forth in this solicitation and shall be submitted to the Contracting Officer in a sealed envelope not later than the time set for receipt of initial proposals.

(c) After completion of evaluation of proposals, negotiation, and selection of the most advantageous proposal, the sealed envelope shall be opened by the Contracting Officer in the presence of the preparer of the in-house cost estimate. They shall then make a cost comparison prior to public announcement. Based on the results of this cost comparison, the following actions shall

occur:

(1) If the result is in favor of contracting out and appropriate administrative approval obtained, an award shall be made. The Contracting Officer shall then publicly reveal the completed cost comparison form, the inhouse cost estimate and its detailed supporting data, and the awarded contract. However, this award is conditioned upon the offer remaining the more economical alternative after (i) completion of a public review period of 1 working days and (ii) administrative resolution within 30 days of their receipt by the Contracting Officer of all questions raised during the public review period. The Contractor is put on notice that the Government assumes no liability for cost incurred during the period specified in (i) and (ii), above. After administrative resolution of the questions, if any, filed with the Contracting Officer during the review period in (i), above, the Contracting Officer shall then either notify the Contractor that it may proceed with performance of the contract, or cancel the contract at no cost to either party.

(2) If the result is in favor of in-house performance, the Contracting Officer shall publicly reveal the completed cost comparison form, the in-house cost estimate and its detailed supporting data, and the price of the most advantageous offer to the Government. After completion of a public review period of 1 working days and administrative resolution of all questions, if any, filed with the Contracting Officer during the review period, the Contracting Officer shall then either, as appropriate, cancel the solicitation or award a contract after obtaining the required administrative approvals.

1

(d) No final determination regarding the question of in-house or Contractor performance will be made during the period provided for public review. Interested parties may file written requests, based on specific objections and review of the in-house cost estimate, with the Contracting Officer during this period. This review shall only be used to resolve questions concerning the calculation of the cost comparison, and shall not apply to questions concerning award to

one offeror in preference to another. Decisions with regard to such requests are final. (e) In accordance with provisions of the clause "Late Proposals, Modifications of Proposals, or Withdrawal of Proposals," a late modification which displaces the otherwise low in-house cost estimate shall not be considered. An otherwise low in-house cost estimate is considered a successful proposal and cannot be displaced by a late modification within subparagraph (d) of that clause. (End of Clause)

§ 1-4.1407 Right of first refusal for employment openings clause.

All solicitations and resultant contracts, subject to this subpart, shall include the following clause in accordance with § 1-4.1403(c).

RIGHT OF FIRST REFUSAL FOR EMPLOYMENT OPENINGS

Consistent with Government employment conflict-of-interest standards, the contractor shall give Government employees, displaced as a result of the conversion to contract performance, the right of first refusal for employment openings on the contract in positions for which they are qualified. (End of Clause)

6. Agency action. (a) Pending the issuance of a permanent amendment to the Federal Procurement Regulations, agencies shall follow the policies and procedures in this temporary regulation.

(b) Two forms are illustrated in the A-76 Cost Comparison Handbook and should be used in the implementation of this subpart. Pending the illustration of these forms in the FPR and the general printing and distribution of these forms, reference should be made to A-76 Cost Comparison Handbook, Chapter II, Exhibits 1 and 2. September 3, 1981.

RAY KLINE, Acting Administrator of General Services.

[FPR Temp. Reg. 64]

Agency Requests for Delegations of Procurement Authority for the Acquisition of ADP Equipment and Services

To: Heads of Federal agencies. Subject: Agency requests for delegations of procurement authority for

the acquisition of ADP equipment and services.

1. Purpose. This temporary regulation extends and modifies the alternate procedure that agencies may use to request delegations of procurement authority from GSA. The alternate procedure was established on a trial basis by the Administrator of General Services in a memorandum for heads of departments and agencies dated November 14, 1980, and was described in GSA Bulletin FPMR F-126 (45 FR 84151, December 22, 1980). Provisions of the FPR which were changed by FPR Temporary Regulation 62 (46 FR 36143, July 14, 1981) are further modified.

2. Effective date. This regulation is effective December 1, 1981.

3. Expiration date. This regulation expires December 1, 1983, unless earlier revised or superseded.

4. Background,

a. The trial procedure described in GSA Bulletin FPMR F-126 was established to place more responsibility on agencies to reduce paperwork, and to speed up processing of agency procurement requests.

b. The Administrator's memorandum advised agencies that GSA would conduct periodic reviews of procurement actions authorized under this alternate procedure to (i) verify compliance with authorization letter conditions, (ii) assess GSA's procurement policies and directions given to agencies, and (iii) identify agencies to whom greater procurement authority may be granted.

c. GSA has conducted agency on-site reviews of a number of agency requirements being procured under the alternate F-126 procedure. In addition, GSA has evaluated questionnaires sent to agencies concerning the alternate procedures. GSA has also examined its own Agency Procurement Request (APR) review procedure. Based on the on-site reviews and other comments, some findings are set forth below.

(1) Agencies have generally complied with existing policies and regulations in the planning and execution of F126 procurement actions. File documentation was, as a rule, adequate and

well-organized. It reflected compliance or statements of compliance with regulatory provisions. A few instances of noncompliance, questionable procurement practices, and notable areas for improvement were found.

(2) Some agencies were not aware that GSA expected more executive level involvement and oversight responsibility under the alternate APR submission procedure. Little evidence of increased executive level involvement and oversight was found. Most agencies felt they were already equipped to absorb the additional autonomy implied by the alternate APR submission procedure.

(3) Identification of the names of authorized ADP management and procurement officials was considered unduly burdensome by some agencies.

(4) Some agencies believed that withholding a DPA pending submission of additional information under the alternate procedure was contrary to its basic thrust; and further, that GSA's adjustment to granting a DPA with an immediate follow-on review on selected cases amounted only to a provisional clearance to proceed with unstated conditions.

(5) Some agencies have suggested that GSA's periodic on-site reviews are contrary to the intent of the alternate procedure and the Paperwork Reduction Act.

(6) The alternate procedure is perceived by agencies as being a positive program to place appropriate responsibilities on agenices and to shorten program approval time.

d. GSA has concluded that the findings support continuing the alternate APR submission procedure, modified in this regulation, as an agency option. 5. Explanation of changes.

a. The following are specific modifications to the alternate F-126 procedure.

(1) GSA will discontinue the practice of issuing DPA's subject to an immediate follow-on review. However, as warranted, GSA will continue to conduct in-depth reviews of selected requests submitted under the alternate APR submission procedure.

(2) Specific APR submission requirements under the alternate procedure

are clarified in Attachment A to this regulation.

b. Any Federal agency may elect (or continue, if an election has been made) to use the alternate APR submission requirements as outlined in Attachment A of this regulation when submitting ADP equipment or service procurement requests to GSA. This procedure is an alternative to the APR submission provisions of § 1-4.1105Request for procurement action, and the GSA Form 2068, Request for ADP Service, submission provisions of Federal Property Management Regulations (FPMR) § 101-36.203-2-Authorization for commercial procurement, as changed by FPMR Temporary Regulation F-495 (pending publication of § 14.1203-1 in a new Subpart 1-4.12 which establishes procurement and contracting policies and procedures for ADP services).

c. The provisions of §§ 1-4.1104Procurement authority and 1-4.1107— Federal agency responsibility when procurement is delegated by GSA, as changed by FPR Temporary Regulation 62 and this regulation, apply to the alternate submission procedure authorized by this regulation as well as to APR submissions under standard procedures.

d. Section 1-4.1104 (as amended by FPR Temp. Reg. 62) is further amended by changing paragraph (a)(3) to remove the requirement for names of officials on the listings submitted to GSA, as follows:

Section 1-4.1104 Procurement
Authority

(a)(1) To allow for the orderly implementation of a program for the economical and efficient procurement of ADPE, commercially available software, maintenance services, and related supplies, agencies are authorized to procure these items (i) in accordance with the provisions of this § 1-4.1104 provided that requirements are not fragmented in order to circumvent the established blanket delegation thresholds or (ii) when a specific delegation of procurement authority has been provided in accordance with the provisions of §§ 1-4.1105 and 1-4.1106. However, the applicable provisions of

FPMR Subchapter F shall be complied with before initiating a procurement action.

(2) The provisions of Public Law 96511 (the Paperwork Reduction Act of 1980) direct each executive agency head to designate a senior official (officials in DOD) reporting to the agency head to be responsible for implementing the Act. This designated senior official is assigned responsibility for the conduct of and accountability for any acquisitions made under a delegation of authority under section 111 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 759) (see 44 U.S.C. 3506(c)(4)).

(3) The designated senior official in each agency shall advise GSA in writing of the position, title and organizational identity of those officials who have been authorized (i) to initiate acquisition actions (including submission of agency procurement requests to GSA) and (ii) to conduct authorized acquisitions (see also §§ 1-4.1105 and 1-4.1107). The designated senior official shall keep the listings current. (A change of incumbent in an unchanged position and organizational assignment does not require notification.) Listings shall be submitted to GSA (CPS), Washington, DC 20405.

e. Section 1-4.1105 (as amended by FPR Temp. Reg. 62) is further amended by making the preamble compatible with the listing submission requirements of § 1-4.1104, as follows:

Section 1-4.1105 Request for
Procurement Action

If an agency determines that the conditions of the contemplated procurement are not covered by the blanket delegation of procurement authority provisions of § 1-4.1104, or if the conditions of the contemplated procurement change during the procurement process so that those provisions become inapplicable, four copies of the agency procurement request (APR) and other applicable documents shall be forwarded to the General Services Administration (CPS), Washington, DC 20405. The APR shall be signed by an official who has been authorized to

initiate the acquisition action and shall identify the position title and organizational identity of the official who has been authorized to conduct the procurement. GSA will process only those submissions signed by authorized officials and identified by position title and organizational identity who appear on the submitted listing (see § 1-4.1104(a)). Other submissions will be returned without action to the submitting office for resubmission by an authorized agency official. In addition, the APR shall contain the name and telephone number of an individual within the agency who shall act as the point of contact for GSA. The APR shall include, as applicable:

f. Section 1-4.1107 (as amended by FPR Temp. Reg. 62) is repeated in this regulation so that all changes in FPR Temp. Reg. 62 and GSA Bulletin FPMR F-126 can be consolidated in this regulation and FPR Temp. Reg. 62 can be canceled, as follows:

Section 1-4.1107 Federal Agency Responsibility When Procurement is Delegated by GSA

When acting under a GSA delegation of procurement authority under either §§ 1-4.1104 or 1-4.1106, the agency designated senior official is responsible for compliance with applicable procurement policies, regulations, and, in particular, § 1-4.1109 and the specific terms of the delegation (see § 1-4.1104(a)).

g. Section 1-4.1107-1 is added to explicitly reserve to GSA the right to review agency acquisition actions and documentation, as follows:

Section 1-4.1107-1 GSA Review of

Agency Acquisition Actions

GSA reserves the right to review agency actions supporting any acquisition authorized under this Subpart 14.11. Documentation relative to agency actions made under the regulations issued under section 111 and other provisions of the Federal Property and Administrative Services Act of 1949, as amended, shall be made available for review upon request of GSA officials.