A. What To Post
Comments: The interim rule specifically requested comments on whether agencies should be required to post brand-name justifications (a) For orders against indefinite-delivery contracts, including Governmentwide Acquisition Contracts (GWACs), (b) for orders against SmartBUY agreements and other strategic sourcing vehicles, and (c) to renew software-license agreements that are required to receive software updates. Several respondents addressed these questions as follows.
Most respondents expressed a strong belief that all Government procurements should be subject to the same brand-name-or-equal rules, at the basic-contract level and at the order level. One respondent stated that a single posting requirement will go a long way toward leveling the playing field. Other respondents believed that it would be unfair to allow agencies to avoid the brand-name justification rule by ordering against indefinite-delivery contracts.
One respondent distinguished between an agency-only indefinite-delivery contract and GWACs, which can be used by multiple agencies. The respondent did not think that an agency should be required to post brand-name justifications for orders under an internal indefinite-delivery contract, because all requirements should have been met at the time of posting the initial requirement for the basic indefinite-delivery contract, even if a competitive solicitation leads to a de facto brand-name indefinite-delivery contract. Further, this respondent read the FAR to contain a loophole that allows an ordering agency to avoid the posting requirements, as well as any requirement to prepare a justification, when placing orders for brand-name products against a GWAC. Other respondents suggested that the FAR should incorporate a requirement for brand-name justification documentation and posting for GWACs only. Some respondents stated that orders issued against indefinite-delivery contracts should be included in the rule to the extent that the original indefinite-delivery action was not supported by a class justification and approval. The existence of the product on an indefinite-delivery contract does not, according to respondents, justify its acquisition if the facts supporting the product selection were not documented in the original indefinite-delivery procurement process.
Respondents were not in agreement as to whether orders under SmartBUY and other strategic-sourcing agreements should be subject to the posting requirement. One respondent believes that, because these are vehicles of choice, the determination to procure a brand-name product is made at the order level and should be supported by a posted justification for the order. Other respondents disagreed, stating that the posting requirement should be satisfied prior to the award of the basic agreement, not for individual orders.
Respondents did not consider that posting should be required for the renewal of software-licensing agreements because only the original equipment manufacturer has the software code to support the equipment and, therefore, there is no ability to compete. Respondents pointed out that FAR 13.106-1(b)(1) mentions license agreements separately from brand-name requirements, which respondents considered to strengthen the argument that software-license renewals should not be subject to the posting requirement.
Response: The justification for use of a brand-name specification and posting of the justification should take place when the requirement for the brand-name item is determined. This will result in different timing for multiple-award contracts from single-award contracts, e.g., requirements contracts. By definition, a requirements contract is with a single source. Therefore, the requirement for the source's brand-name item is determined prior to award of the basic contract, and the justification for purchasing a brand-name item should be completed prior to award of the requirements contract. On the other hand, a multiple-award contract offers buyers products from a variety of sources, some of which may offer particular brand-name products. The existence of a brand-name item on a multiple-award contract does not imply that it is the only such item available for purchase. In this case, the requirement for a single manufacturer's brand-name item is determined at the time of the order, not at the time that the multiple-award contract is placed. Therefore, the justification for the brand-name item would be required when placing the order. For example, if an agency determined that it needed 50 Dell computers to be compatible with the agency's existing Dell capabilities, then it might place an order against a Federal Supply Schedule (FSS) contract for Dell brand-name computers. The agency placing the order would be responsible for justifying the brand-name purchase, because it is at the order level that it is determined that the requirement is for Dell computers, versus other brand-name computers that are also available on FSS contracts.
There is a benefit to posting a purchase description for an order peculiar to one manufacturer because it provides for greater transparency and accountability regarding the use of brand-name specifications. Agencies can no longer avoid the posting requirement for orders simply by placing an order against an indefinite-delivery contract, unless it is a requirements contract with a single source. Orders with a purchase description for an order peculiar to one manufacturer issued against a GWAC or multiple-agency contract now are also included in the posting requirement. Posting is required if a justification covering the requirements in the order had not previously been approved for the original contract in accordance with FAR 6.302-1(c). The posting requirement for orders under indefinite-delivery contracts, GWACs, and multiple-agency contracts is reflected in changes at FAR subpart 16.5.
The exception to the synopsis requirement for orders at FAR 16.505(a)(1) is revised by directing the contracting officer to follow the requirements of FAR 16.505(a)(4) for a proposed order peculiar to one manufacturer. FAR 16.505(a)(4) is added to require the contracting officer to document or prepare a justification when limiting competition for an item peculiar to one manufacturer, unless the justification covering the requirements in the order had been previously approved under the contract or unless the base contract is a single-award contract awarded under full and open competition. Under the final rule, agencies must post the solicitation, and any justification and supporting documentation on the agency Web site used (if any) to solicit offers if the order is $25,000 or more; or provide the justification and supporting documentation along with the solicitation to all awardees under the indefinite-delivery contract. The agency is required to keep a copy of the brand-name justification in the official contract file.
With regard to orders placed pursuant to the SmartBUY program, the Councils concluded that agencies utilizing SmartBUY will be required to comply with the procedures of the SmartBUY blanket purchase agreements (BPAs).
If an acquisition specifies a brand-name item, the justification or documentation shall be posted, as required, with the solicitation or request for quotation (RFQ) (see FAR 5.102(a)(6), 8.405-6 or 16.505). As such, if an acquisition for renewal of a software-license agreement requires a brand-name justification or documentation and a solicitation or RFQ, then the justification or documentation shall be posted, as required, with the solicitation or RFQ. Any exception to this requirement should cite the applicable FAR reference. For example, an order placed under an FSS contract for a software-license renewal that cites logical follow-on as the circumstance (see FAR 8.405-6(a)(1)(i)(C)) for placing the order would not require a brand-name justification. However, if the order exceeds the simplified acquisition threshold, the limited-source justification is required to be posted (see FAR 8.405-6(a)(2)). The parenthetical reference to exclusive licensing agreements at FAR 13.106-1(b)(1), as cited by the respondents, does not provide the applicable FAR reference for an exception to posting the brand-name justification or documentation required for an acquisition for renewal of software-license agreements.