5543082 Contracting and Procurement, Office of - Notice of Final Rulemaking - To align Title 27 (Contracts and Procurement), Chapter 20 (Special Contracting Methods) with the Procurement Practices Reform Act

OFFICE OF CONTRACTING AND PROCUREMENT

NOTICE OF FINAL RULEMAKING

                       

The Chief Procurement Officer of the District of Columbia, pursuant to the authority set forth in Sections 204 and 1106 of the Procurement Practices Reform Act of 2010, effective April 8, 2011 (D.C. Law 18-371; D.C. Official Code §§ 2-352.04 and 2-361.06 (2012 Repl.)) (the “Act”), hereby gives notice of the adoption of final rulemaking to amend Chapter 20 (Special Contracting Methods) of Title 27 (Contracts and Procurement) of the District of Columbia Municipal Regulations (DCMR).

 

The rulemaking updates Chapter 20 and implements the provisions in the Act that apply to special contracting methods, including multiyear contracts and contract options.  The current Chapter 20 contains regulations that are outdated and inconsistent with the Act.  

 

The CPO gave notice of the intent to adopt these rules on April 8, 2015, and the proposed rules were published in the D.C. Register on May 22, 2015, at 62 DCR 6685.  No comments were received and no changes have been made to the text of the rules as published.  The CPO took final action to adopt these rules on June 26, 2015 and they will become effective upon publication.

 

Chapter 20, SPECIAL CONTRACTING METHODS, of Title 27 DCMR, CONTRACTS AND PROCUREMENT,  is amended as follows:

 

Section 2000, MULTIYEAR CONTRACTS, is amended to read as follows:

 

2000                MULTIYEAR CONTRACTS

 

2000.1             Unless prohibited by an appropriations act, a contracting officer may enter into a multiyear contract to obtain goods and services for any period of time deemed to be in the best interest of the District provided the term of the contract and conditions of renewal or extension, if any, are included in the solicitation and funds are available for the first fiscal period at the time of contracting and the contract is consistent with the requirement of § 2000.2 of this chapter.  Payment and performance obligations for succeeding fiscal periods shall be subject to availability and appropriations of funds. 

 

2000.2             A multiyear contract is authorized where the contracting officer determines that:

 

(a)                Estimated requirements cover the period of the contract and are reasonably firm and continuing; and

 

(b)               The multiyear term would encourage effective competition, promote economies in District procurement, or otherwise be in the best interest of the District. 

 

2000.3             Multiyear contracting may be used in a procurement by competitive sealed bids or competitive sealed proposals or in a sole source procurement.

 

2000.4             Budget authority to fund a multiyear contract shall be obligated on an annual basis. The initial obligation of funds shall be for the period between the date of contract award through the end of the fiscal year in which the contract award occurs.  Thereafter, each subsequent obligation of funds shall be made one (1) fiscal year at a time and must cover the contract amount that will be incurred in the fiscal year in which the contract work will be performed.  First fiscal year requirements of the contract, and funds for requirements in each subsequent contract term, shall be obligated one (1) fiscal year at a time.

 

Section 2001, CANCELLATION OF MULTIYEAR CONTRACTS, is amended to read as follows:

 

2001                CANCELLATION OF MULTIYEAR CONTRACTS

 

2001.1             At the end of each fiscal year, a multiyear contract shall be canceled if sufficient budget authority is not available to fund the contract during a subsequent fiscal year.

 

2001.2             If a multiyear contract is canceled due to unavailability of funds, the contractor shall be reimbursed for the reasonable value of any nonrecurring costs incurred but not amortized in the price of the goods delivered or services performed under the contract. 

 

2001.3             If a multiyear contract is terminated for the convenience of the District, including items subject to cancellation, the District’s obligation shall not exceed the amount specified for contract performance plus the reasonable value of any nonrecurring costs incurred but not amortized in the price of the goods delivered or services performed under the contract.

 

2001.4             The costs of cancellation under §§ 2001.2 or 2001.3 may be paid from appropriations available for such purposes. 

 

Section 2002, MULTIYEAR CONTRACT SOLICITATIONS, is amended to read as follows:

 

2002                MULTIYEAR CONTRACT SOLICITATIONS

 

2002.1             A solicitation for a multiyear contract shall include:

 

(a)                The amount of supplies or services required or the proposed contract period;

 

(b)               A unit price for each supply or service, which unit prices shall be the same throughout the contract (except to the extent price adjustments may be provided in the solicitation or resulting contract). 

 

(c)                A clause stating that the multiyear contract will be cancelled if funds are not appropriated or otherwise made available to support the continuation of performance in any fiscal period succeeding the first and a statement that this clause does not affect either the District’s rights or the contractor’s rights under any termination clause in the contract; and

 

(d)               Whether bidders or offerors may submit prices for:

 

(1)        The first fiscal period only;

 

(2)        The entire time of performance only; or

 

(3)        Both the first fiscal period and the entire time of performance. 

 

Section 2003, LOWEST EVALUATED UNIT PRICE, is repealed and replaced with: 

 

2003                [RESERVED]

 

Section 2004, CANCELLATION CEILING, is repealed and replaced with: 

 

2004                [RESERVED]

 

Section 2005, USE OF OPTIONS, is amended to read as follows:

 

2005                USE OF OPTIONS

 

2005.1             The period within which an option may be exercised may extend beyond the date specified for completion of the services in a contract for services, but in no event shall the option be exercised after the contract term has expired.

 

2005.2             The base period in a contract for services or goods shall not exceed one (1) year, unless the contract is funded from an appropriation that is available for more than one (1) year or is a multiyear contract. The total of the base and option periods in a contract for services or goods shall not exceed five (5) years unless:

 

(a)        Prior to solicitation, the Director determines in writing that it is in the best interest of the District, and the solicitation for the contract specifies the total of the base and option periods of the contract; or

 

(b)        Prior to the expiration of a contract, the Director determines in writing that it is in the best interest of the District to extend the term beyond the total term specified in the contract and the contracting officer provides justification for using a sole source modification in accordance with Chapter 17 of this title.

 

2005.3             The price of each option shall be readily discernible from the contract provisions.

 

Section 2006, SOLICITATION OF CONTRACT WITH OPTIONS, is repealed and replaced with:

 

2006                [RESERVED]

 

Section 2007, EVALUATION OF OPTIONS, is repealed and replaced with:

 

2007                [RESERVED]

 

Section 2008, EXERCISE OF OPTIONS, is amended to read as follows:

 

2008                EXERCISE OF OPTIONS

 

2008.1             When exercising an option, the contracting officer shall provide written notice to the contractor within the time period specified in the contract.

 

Section 2099, DEFINITIONS, is amended to read as follows:

 

2099                DEFINITIONS

 

2099.1             When used in this chapter, the following terms and phrases shall have the meanings ascribed:

 

Director - the Director of the Office of Contracting and Procurement (OCP) or the District of Columbia Chief Procurement Officer (CPO).

 

Multiyear contract - as used in this chapter, a contract for a period longer than twelve (12) months that is funded by annual appropriations.

 

Nonrecurring costs - those production costs which are generally incurred on a one-time basis and include costs such as plant or equipment relocation, plant rearrangement, pre-production engineering, initial spoilage and rework, and specialized work force training.

 

Option - a unilateral right in a contract under which, for a specified time, the District may elect to extend the term of a contract.

 

Recurring costs - the production costs that vary with the quantity being produced, such as labor and materials.