B-223585.2, OCT 1, 1986, OFFICE OF THE GENERAL COUNSEL

B-223585.2, OCT 1, 1986, OFFICE OF THE GENERAL COUNSEL

PROCUREMENT - SOCIO-ECONOMIC POLICIES - FEDERAL PROCUREMENT REGULATIONS/LAWS - REVISION DIGEST: 1. GAO HAS NO COMMENTS ON FEDERAL ACQUISITION CIRCULAR 84-17, AN INTERIM RULE CONCERNING PURCHASES OF CARIBBEAN BASIN COUNTRY END PRODUCTS. PROCUREMENT - CONTRACT MANAGEMENT - FEDERAL PROCUREMENT REGULATIONS/LAWS - REVISION - EQUITABLE ADJUSTMENTS 2. GAO HAS NO COMMENTS ON FEDERAL ACQUISITION REGULATION (FAR) CASE NO. 85-26, A PROPOSAL TO AMEND THE CHANGES CLAUSES OF THE FAR TO PROVIDE THAT WITHIN 30 DAYS OF RECEIPT OF A CHANGE ORDER A CONTRACTOR MUST ASSERT ITS RIGHT TO AN EQUITABLE ADJUSTMENT RATHER THAN SUBMIT A PROPOSAL FOR AN ADJUSTMENT AS CURRENTLY REQUIRED. PROCUREMENT - SPECIAL PROCUREMENT - METHODS/CATEGORIES - FEDERAL PROCUREMENT REGULATIONS/LAWS - REVISION - SERVICE CONTRACTS - UTILITY SERVICES 3. GAO AGREES WITH THE CONCEPT EMBODIED BY FEDERAL ACQUISITION REGULATION (FAR) CASE NO. 85-10, A PROPOSAL TO AMEND FAR PARTS 6, 8, 15, AND 52, AND TO ADD A NEW PART 41, TO PROVIDE, IN EFFECT, THAT IN THE ABSENCE OF A FEDERAL STATUTE SPECIFYING A REQUIRED SOURCE, CONTRACTING OFFICERS MUST ACQUIRE UTILITY SERVICES COMPETITIVELY AND MUST USE THE FAR'S STANDARD CONTRACT CLAUSES IN UTILITY SERVICES CONTRACTS.

MS. MARGARET A. WILLIS:

FAR SECRETARIAT

GENERAL SERVICES ADMINISTRATION

THIS RESPONDS TO YOUR LETTER OF JULY 2, 1986, REQUESTING OUR COMMENTS ON TWO PROPOSED CHANGES TO THE FEDERAL ACQUISITION REGULATION (FAR), FAR CASE NOS. 85-10 AND 85-26, AND ON FEDERAL ACQUISITION CIRCULAR (FAC) 84-17.

FAR CASE NO. 85-10 IS A PROPOSAL TO AMEND FAR PARTS 6, 8, 15, AND 52, AND TO ADD A NEW PART 41, IN EFFECT TO REQUIRE A CONTRACTING OFFICER TO ACQUIRE UTILITY SERVICES COMPETITIVELY, NOTWITHSTANDING THAT THE SERVICES WILL BE PROVIDED WITHIN A FRANCHISED SERVICE TERRITORY. THE NOTICE OF THE PROPOSED CHANGE CITES THE COMPETITION IN CONTRACTING ACT OF 1984 (CICA), PUB.L. NO. 98-369, 92 STAT. 1175, AND CHANGES IN THE UTILITY SERVICE INDUSTRY AS THE BASES FOR THE PROPOSAL. THE PROPOSAL ALSO WOULD REQUIRE THE INCLUSION OF THE FAR'S STANDARD CONTRACT CLAUSES IN UTILITY SERVICES CONTRACTS.

CICA PROVIDES THAT, EXCEPT IN THE CASE OF PROCUREMENT PROCEDURES EXPRESSLY AUTHORIZED BY STATUTE, AN EXECUTIVE AGENCY CONDUCTING A PROCUREMENT FOR PROPERTY OR SERVICES MUST DO SO IN ACCORDANCE WITH THE TERMS OF THAT ACT. SEE 10 U.S.C. SEC. 2304(A)(1), 41 U.S.C. SEC. 253(A) (SUPP. III 1985). ALTHOUGH THE LEGISLATIVE HISTORY OF CICA DOES NOT INDICATE THAT CONGRESS INTENDED TO CHANGE CURRENT PRACTICES CONCERNING PROCUREMENTS FROM FRANCHISED UTILITY PROVIDERS, WE ARE UNAWARE OF ANY STATUTE THAT EXPRESSLY AUTHORIZES SPECIFIC PROCEDURES FOR PROCUREMENTS OF UTILITY SERVICES SUCH THAT THE REQUIREMENTS OF CICA WOULD NOT APPLY. THEREFORE AGREE WITH THE CONCEPT EMBODIED BY THE PROPOSED CHANGE THAT THE REQUIREMENTS OF CICA APPLY TO THESE PROCUREMENTS. WE UNDERSTAND, HOWEVER, THAT THERE IS CONCERN BY SOME, INCLUDING MEMBERS OF CONGRESS, THAT THE PROPOSED CHANGE COULD HAVE AN ADVERSE EFFECT ON FEDERAL ENERGY POLICY AND THAT THEREFORE THE EXISTING REGULATIONS WILL REMAIN UNCHANGED UNTIL THE BROADER POLICY ISSUES ARE RESOLVED. WE HAVE NO OTHER COMMENT ON FAR CASE NO. 85-10.

FAR CASE NO. 85-26 IS A PROPOSAL TO AMEND THE CHANGES CLAUSES OF FAR PART 52 TO PROVIDE THAT WITHIN 30 DAYS OF RECEIPT OF A CHANGE ORDER A CONTRACTOR MUST ASSERT ITS RIGHT TO AN EQUITABLE ADJUSTMENT, AS OPPOSED TO SUBMITTING A PROPOSAL FOR AN ADJUSTMENT AS THE CONTRACT CLAUSES CURRENTLY REQUIRE. FAC 84-17 IS AN INTERIM RULE CONCERNING PURCHASES OF CARIBBEAN BASIN COUNTRY END PRODUCTS. THE RULE IMPLEMENTS A DETERMINATION MADE BY THE U.S. TRADE REPRESENTATIVE THAT DESIGNATED CARIBBEAN BASIN COUNTRIES PROVIDE APPROPRIATE GOVERNMENT PROCUREMENT OPPORTUNITIES FOR U.S. PRODUCTS. WE HAVE NO COMMENTS ON EITHER FAR CASE NO. 85-26 OR FAC 84-17.