General Services Administration
FAR Secretariat (MVRS)
18th & F Streets, N.W.
Room 4037
Washington, DC 20405
Subject: Federal Acquisition Regulation; Competitive Range Determinations [FAR Case 96-303]
Dear FAR Secretariat:
This concerns a proposed rule published in the Federal Register on July 31, 1996, entitled "Federal Acquisition Regulation; Competitive Range Determinations."
The Office of Advocacy, in accordance with its responsibility to ensure that federal agencies consider the impact of their rules and policies on small business, finds the subject rule to be deficient in satisfying the requirements of the Regulatory Flexibility Act (RFA). Advocacy's concerns are heightened by the recent passage of the Small Business Regulatory Enforcement Fairness Act which is intended to provide additional regulatory relief for small businesses, including judicial review of agency compliance with the law.
In addition, the Office of Advocacy believes this rule should be considered a major rule, subject to Office of Management and Budget (OMB) review under Executive Order 12,866. A major rule is defined as one with an annual economic impact of greater than $100 million or having significant adverse effects on competition. This regulatory change will significantly and adversely impact competition in government contracting.
The initial regulatory flexibility analysis (IRFA) prepared for this rule doesn't even begin to quantify the rule's impact on small businesses. The following preliminary deficiencies are noted:
1. The proposed rule does not include the required initial regulatory flexibility analysis or summary in the Federal Register. The rule is summarized in section B. Regulatory Flexibility Act, but there is no measurement or discussion of small business impact and alternatives considered. The IRFA was sent under separate cover to the Chief Council for Advocacy. As a result, small businesses do not have a sufficient basis upon which to comment meaningfully on the rule.
2. The IRFA indicates only that the proposed rule will apply to all large and small entities who offer goods and services to the government in competitive negotiated acquisitions. There is no estimated measure or quantification of small business impact or number and dollar value of federal contracts likely affected.
3. The IRFA suggests only one alternative, that of maintaining existing FAR language to ..."require offerors with a reasonable chance of award to be retained within the competitive range." This alternative is rejected in the next sentence.
There are many alternatives available in implementing sections 4101 and 4103 (competition requirements) of the Federal Acquisition Reform Act of 1996 that satisfy the efficiency needs of the government and minimize the impact on small businesses. Many of these alternatives were discussed during the legislative debates on this issue.
In more extensive comments that will be prepared on this rule, the Office of Advocacy will provide "alternatives" for consideration. Advocacy reminds the FAR Council of its outreach requirements under section 609 of the RFA. This is a very controversial proposal that could significantly impact small firms. Sufficient outreach should be exercised to generate input from the small business community. The Office of Advocacy urges the FAR Council to re-publish this rule as a proposed regulation, subject to OMB review under Executive Order 12,866, after completing a proper initial regulatory flexibility analysis.
Sincerely,
Jere W. Glover
Chief Counsel
Office of Advocacy
cc: The Honorable Sally Katzen, OMB, OIRA
The Honorable Steve Kelman, OMB, OFPP