The Department of Defense (“DoD”) has been very busy issuing amendments to the Defense Federal Acquisition Regulations (“DFARS”). Since the start of 2012, DoD has issued 34 rules amending the DFARS, with five final rules and one interim rule effective June 29, 2012.1
One of the newly effective final rules is the Single Offer rule. This final rule is part of the DoD Better Buying Power initiative. The intent of the initiative is to promote competition on all competitive solicitations. The revisions to this rule are part of DoD’s retrospective plan under Executive Order 13563, directing agencies to analyze existing regulations, with additional periodic reviews, to determine the effectiveness of the regulations.
The Single Offer rule, DFARS 215.371, addresses competitive acquisitions in which only one offer is received. The rule initially set out to make DoD competition requirements stricter that the general FAR scheme by having the contracting officer ("CO") set out in the solicitation what cost or pricing data would be necessary if only one offer was received (Under the FAR, competition negates the Government’s right to request cost or pricing data. FAR 15.402(a)(2)(i)). If there was only one offer and the period to submit was less than 30 days, the rule would require the CO to consider revising the statement of work in order to promote more competition and then resolicit for at least thirty days more. If the solicitation period was longer than 30 days, the CO could request the cost or pricing data from the offeror, analyze it, and then negotiate with the offeror to establish a fair and reasonable price. However, after receiving comments from the public, DoD conducted a rewrite of its proposed rule.
The rewrite added a policy section to the rule, shifting the emphasis from whether the circumstances described at FAR 15.403-1 (c)(1)(ii) (determining adequate price competition) are present to whether the price is fair and reasonable and the statutory requirements for obtaining certified cost or pricing data are met. From the DoD’s perspective, the emphasis is on increasing competition wherever possible but to always ensure a fair and reasonable price/cost.
The DoD also added a number of sections describing how the CO is to obtain fair and reasonable prices and about rewriting requirements to maximize competition. Specifically, the CO is not required to obtain further cost or pricing data if the CO determines the offered price is fair and reasonable on the basis of cost or price analysis and that adequate price competition exists. Otherwise, the CO must obtain additional cost or pricing data, and that data must be certified, unless an exception to the requirement for certified cost or pricing data applies.
The final rule also contains two exceptions: an exception to the 30-day re-solicitation period to address application to small business set-asides and an exception stating that it does not apply to broad agency announcements. The rule no longer addresses acquisitions under FAR Subpart 13.5 (pilot programs for certain commercial items), because that statutory authority has expired as of January 1, 2012.
To view the rule in full text, click here.