iii.  Sufficiency of FAR and GSAR Processes

Comment: According to several respondents, the proposed regulations are unnecessarily duplicative, because the FAR and the GSAR already provide a framework for the effective and efficient procurement of goods and services at fair and reasonable prices. The respondents noted that under the FSS, GSA has already determined that the prices for products and the rates for services are fair and reasonable (FAR 8.404(d)). According to the respondents, ordering agencies are not required to make a separate determination of fair and reasonable prices of supplies and fixed price services, except for a price evaluation as required by FAR 8.405-2(d). In such cases, agencies are only responsible for considering the level of effort and labor mix and making a determination whether the total price is fair and reasonable.

Response: Existing regulations already anticipate that contracting officers can achieve prices below those determined fair and reasonable by GSA by pursuing additional competition and/or price negotiations. Even though GSA has already negotiated fair and reasonable pricing under the FSS program, the FAR permits contracting officers to seek additional discounts before placing an order. Agencies are required to seek price reductions from the fair and reasonable contract prices for orders exceeding the simplified acquisition threshold (see FAR 8.405-4). As a practical matter, contracting officers routinely achieve such impressive discounts that award at published FSS prices is discouraged. Similarly, existing DFARS regulations provide specific guidance to DoD contracting officers that govern competitions under FSS.

The final rule provides specific guidance to DoD contracting officers when only one offer is received. The final rule augments existing DoD guidance on FSS competitions. The final rule also provides additional guidance to DoD contracting officers that govern the establishment of price in one offer competitions. The final rule is consistent with the existing requirements for competitions under the FSS program and with the standard for determining fair and reasonable prices.