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U.S. Geological Survey Manual

404.3 - Competition in Contracting


OPR: APS/Acquisition and Grants

InstructionsReplaces SM 404.3 dated 10/07/1996

1. Purpose.

The Competition in Contracting Act (CICA) requires that Justifications and Approvals (J&As) or Determinations and Findings (D&Fs) be prepared when a new procurement is to be made using "other than full and open competition," or when sources are to be excluded before full and open competition.  Although covered by other authorities, similar documentation is required before restricting competition for various other award types.  This chapter establishes policies, procedures and responsibilities for these documents and sets forth approval thresholds for them.

2. Authorities.

A. Federal Acquisition Regulation (FAR) Part 6, Subpart 8.4, and Subpart 13.5.

B. Department of the Interior Acquisition Regulation (DIAR), Subpart 1406, Competition Requirements.

3. Background.

Public Law 98-369, CICA, mandates that competition be sought in the Federal procurement process, with some exceptions. The generally recognized benefits of competition are lower prices, higher quality, and more responsive service in the supply of goods and services. Also, an open market environment enhances design innovations and promotes fairness. The latter is essential to maintaining public trust and cooperation. As a result of CICA, contract solicitations in which competition is to be limited require that a J&A (or a D&F under certain circumstances) be executed establishing the reason for less than full and open competition. J&As are required by statute and cannot be waived. The general regulatory implementation of CICA is addressed in the authorities cited above.

4. Applicability.

The requirements of this chapter apply as described to actions subject to the CICA and to actions awarded without competition under the procedures of FAR Subparts 8.4 (Federal Supply Schedule (FSS) Program) and13.5 (Commercial Item Test Program). A written D&F or J&A is not required for actions which are exempt or considered competitive, as follows.

A. Exemptions. FAR Part 6 does not apply to (1) contracts awarded using simplified acquisition procedures  in FAR Subpart 13.1; (2) modifications within the scope and terms of an existing contract; (3) modifications exercising priced options that were synopsized and evaluated as part of the original award; (4) orders placed under requirements or definite quantity contracts; and (5) orders placed under indefinite quantity contracts using FAR Subpart 16.5 procedures if the requirements contained in the order were adequately covered by the synopsis of the contract and the contract was either competed under FAR Subpart 6.1, 6.2, or 13.5 or is supported by any required J&A.

B. Set-Asides. Competition under any of the various small business set-aside programs described in FAR Part 19 is considered full and open competition after exclusion of sources (FAR Subpart 6.2).   No CICA J&A or D&F is required for acquisitions awarded under the competitive set-aside programs enumerated in FAR Subpart 6.2.

C. Basic and Applied Research. Selection of research proposals is considered a competitive procedure not requiring a J&A when a broad agency announcement is issued inviting participation of all qualified offerors, and proposals are selected through a peer or scientific review. (FAR 6.102(d)(2)).

D. Architect-Engineer (A&E) Services. The competitive selection process described in FAR Subpart 36.6 for acquisition of A&E services pursuant to the Brooks Act, Public Law 92-582, is considered a form of full and open competition.

E. Competitive Process. If the requirement is competitively solicited with a reasonable expectation of competition, and only one proposal is received from a responsive and responsible offeror, a J&A need not be prepared. The intent of the CICA is to require the use of the competitive process, not to mandate there be more than one offeror.

F. Grants. This chapter and the CICA do not apply to Federal assistance awards (grants and cooperative agreements). Requirements for competition in assistance awards are found in SM 406.1.

5. Definitions.

Competition Advocate.  An employee in the Office of Acquisition and Grants (OAG) who has been designated by the Associate Director, Administrative Policy and Services, and appointed by Department of the Interior (DOI) Office of Acquisition and Property Management and who is responsible for challenging barriers to and promoting full and open competition in the procurement of goods and services.

Determination and Findings (D&F). A special form of written approval by an authorized official that is required by statute or regulation as a prerequisite to taking certain contracting actions.

FedBizOpps.  The Government-wide point of entry in which the synopsis of proposed procurement action and other notices regarding Government procurements are published.

Full and Open Competition.  A procurement in which all responsible sources are permitted to submit sealed bids or competitive proposals.

Full and Open Competition after the Exclusion of Sources.  A procurement in which a source or sources are excluded from participation in a contract action in order to establish or maintain alternative sources or under an authorized competitive set-aside program, such as small business set-asides and other competitive set-aside programs described in FAR Part 19.

Other than Full and Open Competition.  Acquisition in which only one or a limited number of sources are solicited.

Justification and Approval (J&A).  A document to authorize procurement using other than full and open competition. This document is required prior to commencing negotiation of a contract resulting from an unsolicited proposal or other contract awards which do not provide for full and open competition. J&A's under various parts of the FAR have different titles:

Simplified Acquisition Threshold is $100,000 unless otherwise defined in FAR 2.101.

6. Policies.

A. Contracting officers are generally required to provide for full and open competition in soliciting offers and awarding Government contracts over the simplified acquisition threshold (SAT). (See SM 403.2.8 for guidance regarding competition for purchase orders below the SAT.) Certain limited exceptions are applicable.

B. When and acquisition is subject to CICA, contracting without providing for full and open competition or full and open competition after exclusion of sources is a violation of statute, unless permitted by one of the exceptions below.

C. Noncompetitive acquisition shall be avoided whenever possible.  Contracting without providing for competition shall not be justified on the basis of a lack of advance planning or by concerns related to the amount of funds available (for example, if the funds are scheduled to expire).

D. An acquisition that uses a brand name or make-model description does not provide for full and open competition and shall be justified in accordance with the procedures of this chapter unless the specification permits offers of "equal" products (FAR 11.105(a)(2)).

E.  Noncompetitive awards justified under urgent and compelling circumstances may cover only the minimum time and quantities necessary to meet the user's urgent need.  The performance and/or delivery periods for such awards may not exceed one year unless any higher level approval required by the FAR has been obtained.  To the extent practical, quantities that will not be needed and used immediately should be acquired competitively, even if the need arises from the same disaster or emergency circumstances.

F. Acquisitions subject to CICA may not be made without full and open competition except when one of the seven circumstances enumerated in the CICA exists. The circumstances allowing less than full and open competition, and details concerning their application are found in FAR 6.302. The exceptions are summarized below:

Statutory Exceptions.

(1) Only one responsible source is available and no other type of supplies or services will satisfy agency requirements [41 U.S.C. 253 (c)(1)]. Examples of this exception include:
(a) One Source. Existence of patent rights, copyrights, secret processes, etc. make the goods/services available from only one source.

(b) Unsolicited Research Proposal. Goods or services shall be considered to be available from only one source if the source has submitted an unsolicited research proposal that demonstrates a unique and innovative concept.

(c) Follow-on Contract. A follow-on contract for the continued development or production of a major system or highly specialized equipment may be justified when it is likely that award to a source other than the original source would result in substantial duplication of cost to the Government which is not expected to be recovered through competition.  As part of our obligation to break down barriers to competition when acquiring custom software or system development, we must acquire source code, data rights, and system documentation sufficient to permit competition for subsequent development or maintenance acquisitions, or document why this is impractical.

(d) Standardization Programs. This exception may be used when the agency has determined in accordance with a formal standardization program that only specific makes and models of technical equipment and parts will satisfy the agency's needs.

(2) Unusual and Compelling Urgency [41 U.S.C. 253 (c)(2)].

(a) When this exception is used to accommodate unforeseen urgent requirements, the contracting officer is required by statute to request offers from as many potential sources as practicable.

(b) This exception may be used only when serious injury would result if the contract were delayed. Urgency J&As should clearly demonstrate the harm to the Government that would be experienced if contract award is delayed in order to allow for full and open competition.  See paragraph 6.E. above for additional restrictions on use of this exception.

(3) Industrial Mobilization; Engineering, Developmental, or Research Capability; or Expert Services [41 U.S.C. 253 (c)(3)]. This exception may be used when it is necessary to award the contract to a particular source or sources in order to:

(a) Maintain a facility, producer, manufacturer, or other supplier available for furnishing property or services in case of national emergency, or to achieve industrial mobilization.

(b) Establish or maintain an essential engineering, research, or other nonprofit institution or a federally funded research and development center; or

(c) Acquire the services of an expert for use in a litigation or dispute or a neutral person to facilitate resolution of issues in an alternative disputes resolution process.

(4) International Agreement [41 U.S.C. 253(c)(4)]. This exception is used when the terms of an international agreement or treaty between the U.S. Government and a foreign government or international organization, or the written direction of a foreign government reimbursing USGS for the cost of the procurement of the goods or services for such government, have the effect of requiring the use of procedures other than competitive procedures.

(5) Authorized or Required by Statute [41 U.S.C. 253(c)(5)] . This exception applies when a statute expressly authorizes or requires that the procurement be made through another executive agency or from a specified source such as listed in FAR 6.302-5. No justification is required for noncompetitive awards under this exception for awards made to Qualified Nonprofit Agencies for the Blind or other Severely Disabled under FAR Subpart 8.7 and sole source awards under the 8(a) Program under FAR Subpart 19.8.  Justification is required for other uses of this exception, including awards which are authorized but not required under FAR 19.1306, Historically Underutilized Business Zone (HUBZone) sole source awards, and FAR 19.1406, Sole source awards to service-disabled veteran-owned small business concerns.

(6) National Security [41 U.S.C. 253(c)(6)]. This exception is used when the disclosure of contractual needs would compromise the national security.

(7) Public Interest Determined by Secretary [41 U.S.C. 253(c)(7)]. This exception is only available on a contract-by-contract basis and requires Congressional notification before award. Approval of a D&F, rather than a J&A, by the Assistant Secretary - Policy, Management and Budget is required for this exception.

7. Responsibilities for Actions Requiring Approval Under This Chapter.

A. Technical Office Responsibilities. The technical office should:

(1) Define Requirements. All reasonable efforts must be made to define requirements in a manner which will allow a competitive acquisition.

(2) Market Survey. Request assistance from the contracting officer early in the acquisition cycle to permit preparation of a FedBizOpps synopsis, development of evaluation factors, and conduct of a market survey in order to determine whether other sources can meet the Government's needs.   The technical office should assist the contracting officer in locating potential competitive sources (e.g., contacting other Federal/State agencies that may have similar requirements, reviewing industry publications and catalogs, or purchasing additional patent/copyrights to permit competition for some or all of the requirement).   When no other sources can be identified, we are required to review our requirements and reconsider any required specification features or qualifications that restrict competition, then justify retaining those restrictive requirements in the J&A.  

(3) Acquisition Planning. Coordinate with and secure the concurrence of the contracting officer in all acquisition plans.

(4) Maintain Confidentiality. Actions which are expected to be awarded without competition, including contract modifications, are subject to the Procurement Integrity Act and should not be discussed with the contractor without the permission of the contracting officer.

(5) Review FedBizOpps Responses. Review the capability statements which may be submitted in response to notices placed on FedBizOpps and advise the contracting officer in writing regarding the capabilities of responding organizations.

(6) Prepare J&A. Write, certify, and forward the J&A with the requisition when recommending an acquisition requiring approval under this chapter. The purpose of this document is not to justify the need to procure the required product or service, but to demonstrate why it can't be procured competitively. Much of the justification for using other than full and open competition must be provided by those familiar with the technical intricacies of the supply/service or with the industry/firm able to provide the supply/service.

(7) Format. Justifications should be prepared using the formats in Figures 1-3, as applicable. Items not applicable will be included in the proper sequence and identified as not applicable (when the reason for nonapplicability is not self-evident, include a brief supporting rationale). Each justification must contain sufficient information to permit approval as a stand-alone document. The cognizant technical officer is required to prepare the document through item 10 and to certify that the technical data forming the basis for the justification are complete and accurate.

B. Contracting Officer's Responsibilities. The Contracting Officer should:

(1) Promote Competition. Encourage full and open competition through the use of competitive procedures. Challenge any acquisition proposed on other than a full and open competitive basis. For all acquisitions, structure the action to make sure that any potential follow-on or related contract can be competed.  If necessary, make sure we are acquiring sufficient data or patent rights and documentation to permit another vendor to perform future requirements.

(2) Provide Assistance. Locate potential competitive sources with the assistance of the technical office, and coordinate with the Competition Advocate regarding planned acquisitions on other than a competitive basis.

(3) Place FedBizOpps Notices. Place the necessary market research and or solicitation notices on FedBizOpps when required.  FedBizOpps posting is not required for an FSS order, but sufficient market research must be conducted to identify specification features or other requirements operating to preclude competition and to permit the contracting officer to determine that award of the noncompetitive FSS order will achieve the best value to the Government over other alternatives.

(4) Review FedBizOpps Responses. Assist the technical office in evaluating responses received as a result of the notice and, when qualified responses are received, assure that a competitive solicitation is issued. When responses identify barriers to competition, confer with the COR to determine if barriers can be removed or their effects minimized, such as by making non-essential performance requirements desirable rather than mandatory or by providing Government-furnished property.

(5) Serve in an Advisory Role. The contracting officer and staff will assist the technical office in completing the J&A. Certain aspects of the J&A may require detailed knowledge of the FAR or other related authorities.

(6) Complete the J&A. Determine that the price will be fair and reasonable, and certify that the justification is accurate and complete. Sign and obtain the necessary approvals on the J&A.

8. Approval of J&As.

Justification and Approvals documents must be approved in writing at various supervisory levels, as follows:

A. $550,000 and under.  Approval by the contracting officer is required, with the following exception. A formal J&A is not required for actions not exceeding $100,000 when simplified acquisition (FAR Part 13) procedures are used. See SM Chapter 403.2, Simplified Acquisition.

B. Over $550,000 through $11,500,000.   Must be approved by the Competition Advocate following signature by the contracting officer and an official a level above the contracting officer.

C. Over $11,500,000 through $57,000,000.   Must be approved by the Head of the Contracting Activity (Associate Director, Administrative Policy and Services), or designee, following the concurrence of the officials at 8.A. and B. above.

D. Over $57,000,000.  Director, Office of Acquisition and Property Management, DOI, following the concurrence of the Head of the Contracting Activity or designee.

All dollar amounts refer to total potential contract value including all potential quantities and options.

9. General Information on J&As.

A. Class J&As. The FAR implementation of the CICA permits class J&As for other than the public interest exception to full and open competition. The USGS policy is to authorize class J&As whenever the class rationale, stated in FAR 1.703, can reasonably be applied. Class justifications shall be approved in the same manner as individual justifications, using the same approval thresholds. The cumulative dollar value of all actions contemplated under the class justification must be used to determine the approval authority for the class justification.  When a class J&A applies, the individual contract file must include a copy of the class J&A and a written determination by the contracting officer that the circumstances of the class J&A apply.

B. Revalidation. If initial contract award is not made within 1 year of approval, a new market survey must be performed to revalidate the facts on which the justification was based. The contracting officer must document the results of the market survey and determine that the market is substantially unchanged before proceeding with a noncompetitive award.

C. Options.

(1) Exercise of an option under a contract awarded without full and open competition may be performed without a J&A, if the option was included in the initial contract J&A, synopsis and solicitation, or if the option meets a statutory exception for award without a written J&A (such as an 8(a) Program contract).

(2) If the cognizant contracting officer becomes aware of another potential source, through more recent solicitations, vendor marketing, industry conferences or other market survey, such information shall be furnished to the requisitioner for evaluation. If qualified sources are identified, then a solicitation for full and open competition will be issued to replace the noncompetitive contract as soon as practical, considering administrative costs, potential contract cost savings, and other factors such as required procurement lead time, need for continuing contract coverage, and potential termination settlement costs.

D. Releasability. J&As are public documents which must be made available by the contracting officer for public inspection (unless classified on National Security grounds).  As such, the document must not contain any contractor proprietary data or other information not suitable for public release.

E.  Content/Format.  Each J&A must address the information required by FAR 6.303-2, 8.405-6(g)(2), or 13.501(a), as applicable.  USGS Standard formats are provided in Figures 1 - 3 of this Chapter.

10. Policy on Determinations and Findings. A determination in the form of a D&F (rather than a J&A) will be required for acquisitions which: (1) exclude a particular source or sources in order to establish or maintain alternative sources (FAR 6.202); and (2) cite the public interest exception to full and open competition (FAR 6.302-7). The contracting officer is responsible for preparation of the D&F for signature, with the aid of the technical office representative.

A. Excluding a Source. For acquisitions which exclude a source, competitive procedures must be used after the source has been excluded. The findings must include a description of the estimated reduction in costs projected to be obtained by creating a second source. The Head of the Contracting Activity is authorized to make a D&F determination for excluding a source.

B. PublicInterest Exception. Only the Assistant Secretary - Policy, Management and Budget, DOI is authorized to make the determination citing the Public interest exception. The determination, with complete justification to support its use, will be prepared by the contracting officer and submitted through the Head of the Contracting Activity to the Director, Office of Acquisition and Property Management, DOI.

C. Content/Format. Each D&F must contain sufficient facts and circumstances to clearly and convincingly justify the determination.

D. General D&F information. FAR Part 1.7 contains general guidance on D&Fs. Class D&Fs are not permitted under the CICA.

Figure 1 - J&A Format - FAR Subpart 6.3 - CICA (pdf)
Figure 1 - J&A Format - FAR Subpart 6.3 - CICA (doc)

Figure 2 - J&A Format - FAR Subpart 8.4 - FSS

Figure 3 - J&A Format - FAR Subpart 13.5 - Commercial Item Test Program

(For employees, these formats are also available as MS-Word documents on the USGS Intranet.)

_/s/ Karen D. Baker__________                                             _______July 11, 2007___________
Karen D. Baker                                                                                                    Date
Associate Director, Administrative Policy and Services

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