8.  Executive Order Requirements for Cost/Benefit Analysis

Comment: Two respondents commented on the need for cost/benefit analysis as required by Executive Orders 12866 and 13563. One respondent recommended that DoD should consider performing a cost/benefit analysis before finalizing the proposed rule. According to the respondent, the proposed rule will affect a significant number of procurements and may create burdens on procurement professionals and contractors that are not commensuratewith the benefits anticipated. Another respondent noted that there is a lack of empirical support for the proposed rule. According to the respondent, without further cost/benefit data to support the rulemaking, it fails to demonstrate that this rule is needed to cure the underlying problem of single offer competition.

Response: The purpose of this rule is not just to save money but to ensure the integrity of the process. More competition benefits all parties, including small businesses. Although it is possible to demonstrate that increased competition strengthens the industrial base and has a beneficial impact on pricing, the benefits are not readily quantifiable. DoD is tracking improvement in the percentage of effective competition (more than one offer). DoD has always had a fiduciary responsibility to determine that prices are fair and reasonable. The most basic pricing policy at FAR 15.402 is that the contracting officer shall purchase supplies and services from responsible sources at fair and reasonable prices. Unless certified cost or pricing data is required by law (see FAR 15.403-4), the contracting officer is required to obtain data other than certified cost or pricing data as necessary to establish a fair and reasonable price. This rule provides a mechanism to accomplish that goal when a competitive solicitation does not result in more than one offer. As revised, the final rule does not impose unnecessary burdens. See also the last response in section II.B.3.a. and the responses in section II.B.3.b.ii.