Federal Acquisition Regulation; Uniform Procurement Identification

AGENCIES:

Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION:

Final rule.

SUMMARY:

DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement a uniform Procurement Instrument Identification (PIID) numbering system, which will require the use of Activity Address Codes (AACs) as the unique identifier for contracting offices and other offices, in order to standardize procurement transactions across the Federal Government.

DATES:

Effective: November 13, 2014.

FOR FURTHER INFORMATION CONTACT:

Mr. Edward Loeb, Procurement Analyst, at 202-501-0650, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-77, FAR Case 2012-023.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 78 FR 34020 on June 6, 2013, to implement recommendation number 3 of the Government Accountability and Transparency Board (GAT Board). Recommendation number 3 was to implement a uniform award identification system among various financial transactions conducted across the Federal Government by a number of communities, e.g., procurement, grants, and finance. This final FAR rule is consistent with the goals of GAT Board recommendation 3 for the procurement community. Application of the GAT Board recommendation for the other communities is not the subject of this rule. Four respondents submitted comments on the proposed rule. Three of these respondents were representatives of Federal agencies.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows:

A. Summary of Significant Changes From the Proposed Rule

1. At FAR 4.1601 the implementation deadline for new unique procurement instrument identifiers has been rescheduled and will now be no later than October 1, 2017. In the proposed rule there was a FAR multistep transition process being proposed, but the Councils have delayed the implementation date and deleted what was identified at FAR 4.1601 as the “transition” requirement, so that all agencies will be responsible for completing the transition to the PIID procedures of this rule by October 1, 2017.

2. At FAR 4.1601 the “End state” requirement is modified to read “No later than October 1, 2017, agencies shall comply with paragraph (a) of this section and use the requirements in 4.1602 and 4.1603 for all new solicitations and awards.” This clarifies that the rule does not intend to modify the identifiers for existing solicitations or contracts.

B. Analysis of Public Comments

1. System Compatibility

Comment: One respondent expressed concern that this rule will require expensive modifications to agency contracting writing software and financial systems. The respondent also indicated that the changes required by the rule could cause problems interacting with other Government systems. The respondent also expressed concern about the requirement to convert all contract actions already in effect to the new structure by October 1, 2016, and the effects this will have across other enterprise systems as well as effects on maintaining historical and legacy information.

Response: The final rule has been changed so it only applies to new solicitations and contracts, and with a modified implementation deadline of October 1, 2017 (see FAR 4.1601(b)(2)). This does not preclude agencies from implementing the changes in advance (see FAR 4.1601(b)(2)). Agencies are being provided additional time to comply with the new requirements to be sure that all systems compatibility issues can be resolved.

2. Applicability

Comment: One respondent recommended not applying the new requirements to historical documents due to the major system changes and cross referencing issues that would result. Another respondent considered the prospect of modifying existing awards to be infeasible due to the changes that would be necessary across other systems such as SAM, FPDS-NG, FAADS Plus/USASpending.gov, FedBizOpps, and Grants.gov.

Response: The final rule only applies the new requirements to new solicitations and contracts, with an implementation deadline of October 1, 2017 (see FAR 4.1601(b)(2)).

3. Contract Modifications

Comment: One respondent raised concerns regarding how systems would be able to handle modifying current actions to the new paradigm and how this would affect historical data on these actions. The respondent was also concerned with the number of contract modifications being limited to 1,000. Another respondent noted that moving from a two character modification number to a four character modification number would not be possible due to system constraints.

Response: The prescribed numbering format for supplementary PIIDs, at FAR 4.1603(b), allows for up to 9,999 solicitation amendments and 99,999 contract modifications. In addition, the final rule has been modified to allow agencies until October 1, 2017, to comply with the new requirements, giving agencies additional time to modify existing systems.

4. Implementation

Comment: One respondent detailed a number of specific, significant, and costly changes to current systems to comply with the proposed changes. The respondent also noted that there would be costs associated with necessary training of staff to use the new system. The respondent projected the cost of this rule to their agency as $4,155,000 for labor and systems and an additional $80,000 for training. Another respondent asked what mitigation strategies are in place in the event that one or several of the integration partner's systems are not ready to support the proposed changes.

Response: It is understood that this rule may have a significant cost for implementation; however, the GAT Board, Office of Management and Budget (OMB) and the FAR Council have determined that in order to achieve the noted accountability and transparency goals of the rule, the changes must be made. Office of Federal Procurement Policy (OFPP) will monitor agency progress in implementing this rule to ascertain if any changes are required.

5. FAR 4.1602(c), Clarification Concerning “Additional Agency Information”

Comment: One respondent requested clarification of what is meant by the language at FAR 4.1602(c) regarding “Additional agency specific identification information.”

Response: This language is included in the rule to make it clear that agencies will likely establish additional requirements at their FAR supplement level.

6. FAR 4.1603, Clarification Concerning “Until It Has Been Determined”

Comment: One respondent requested clarification of what is meant by the language at FAR 4.1603(b)(2)(iii) regarding “until it has been determined.”

Response: This language is included in the rule to make it clear that modification numbers should not be created in advance of the need for the modification.

7. Impact on Contractor Systems

Comment: One respondent noted that many contractors have structured their award numbering system to mirror the Government's, and will need to make associated revisions to their systems, which could have associated cost implications.

Response: If a contractor chose to structure their contract management system to mirror an agency's contract writing system, then they may find it necessary to modify their system capabilities to match the new contract identification requirements.

8. Impacts on Assistance Awards

Comment: One respondent stated that assistance actions are not covered by the FAR, but should this proposed rule become final, for consistency purposes, it will be critical that parallel efforts be taken to ensure that assistance actions follow a similar numbering format.

Response: Assistance actions are outside of the scope of this rule. However, this comment has been provided to OMB for consideration.

9. Address Activity Codes

Comment: One respondent noted that for Address Activity Codes (AAC), DoD agencies begin with an alpha character and non-DoD agencies begin with a two-digit number. The respondent asked if there is a consistent hierarchy for the remaining positions.

Response: The FAR does not prescribe a hierarchy for the remaining positions in an AAC, as this is left to agency procedures in accordance with the Federal supply program. Information on locating an existing AAC or obtaining a new AAC is located at FAR 4.1603(a)(1).

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

This rule is needed to further the President's commitment to make the Federal Government transparent and accountable to the American people. The rule requires use of a standardized procurement instrument identification (PIID) number configuration across the federal procurement community. The numbering configuration will contain an Activity Address Code unique to each contracting office. This change will lead to increases in data traceability and transparency, thereby broadening the Government's ability to report procurement data accurately and to provide more effective oversight of reporting responsibilities.

The final rule is internal to the Government procedures and does not directly impose any requirements on the vendor community. However, the rule may affect certain entities if those entities have arranged any of their business systems to utilize, accept, or otherwise recognize the PIID of agencies they interact with, if those agencies do not currently use the PIID configuration of this rule.

In FY11 awards were made to 67,280 unique vendors, of which 48,281 were small businesses. These small businesses likely interact with agencies that do not currently use the proposed uniform procurement identification configuration.

One respondent stated that small businesses that do the majority of their business with the Government will be adversely affected by changes to the Government systems as they have structured their systems to mirror the Government. The final rule extends the implementation deadline for agencies to allow for a more efficient transition; however, contractors with system limitations may incur some cost to adapt to the changes.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 2 and 4

• Government procurement

Therefore, DoD, GSA, and NASA amend 48 CFR parts 2 and 4 as set forth below:

1. The authority citation for 48 CFR parts 2 and 4 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 2—DEFINITIONS OF WORDS AND TERMS

2. Amend section 2.101 in paragraph (b)(2) by adding, in alphabetical order, the definition “Activity Address Code (AAC)” to read as follows:

PART 4—ADMINISTRATIVE MATTERS

3. Amend section 4.605 by—

a. Removing from paragraph (a) “4.1601,” and adding “4.601 to 4.1603,” in its place; and

b. Adding paragraph (e).

The addition reads as follows:

4. Revise section 4.1601 to read as follows:

5. Amend section 4.1602 by revising paragraph (c) to read as follows:

6. Add section 4.1603 to read as follows: