2025 - The DFARS - Part 206 - Competition Requirements

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1. The DFARS – 2025 The Defense Federal Acquisition Regulation Supplement A Complimentary Webinar Series JSchaus & Associates – Washington DC – [email protected]

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13. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] THE DFARS – PART 206

14. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] DFARS PART #: 206 DFARS PART: Competition Requirements SPEAKER: Stephen Ruscus FIRM: BakerHostetler EMAIL: [email protected] TODAYS SPEAKER + TOPIC

15. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] DFARS PART #: 206 DFARS PART: Competition Requirements SPEAKER: Kaitlyn Toth FIRM: BakerHostetler EMAIL: ketoth @bakerlaw.com TODAYS SPEAKER + TOPIC

16. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] Agenda Competition in Contracting Act Relationship Between FAR and DFARS FAR 6.001 – Applicability DFARS 206.1 – Full and Open Competition DFARS 206.2 – Full and Open Competition After Exclusion of Sources DFARS 206.3 – Other than Full and Open Competition

17. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] Competition in Contracting Act (“CICA”) – 10 U.S.C. § 3201 In conducting a procurement for property or services, the head of an agency shall obtain full and open competition through the use of competitive procedures in accordance with the FAR. The FAR shall ensure that the requirement to obtain full and open competition is implemented in a manner that is consistent with the need to efficiently fulfill the Government’s requirements.

18. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] Competition in Contracting Act (“CICA”) – 10 U.S.C. § 3201 In passing CICA, Congress sought to increase competition and procurement savings by obtaining lower, more competitive pricing. ATA Def. Indus., Inc. v. United States , 38 Fed. Cl. 489, 500 (1997). The premise that underlies the strong preference for “full and open competition” is the economic premise that has long been recognized as the basis for a free market economic system— that full and open competition brings consumers the widest variety and the lowest possible prices . Congress expresses a willingness to yield the benefits of full and open competition only when the alternative is serious injury to the United States.

19. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] Relationship Between FAR and DFARS Defense Federal Acquisition Regulation Supplement (DFARS) to the Federal Acquisition Regulation (FAR) is administered by the Department of Defense. DFARS implements and supplements the FAR. Contains requirements of law, DOD-wide policies, delegations of FAR authorities, deviations from FAR requirements, and policies/procedures that have a significant effect on the public. DFARS should be read in conjunction with the primary set of rules in the FAR.

20. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR 6.001 – Applicability Part 6 applies to all acquisitions except— (a) Contracts awarded using the simplified acquisition procedures of part 13 (but see 13.501 for requirements pertaining to sole-source acquisitions of commercial products or services under subpart 13.5); Micro-purchases – generally, $10,000 Acquisitions below SAT – generally, $250,000 Proposed rule would increase these limits to 15K and 350K, respectively

21. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR 6.001 – Applicability, cont’d Part 6 applies to all acquisitions except— (b) Contracts awarded using contracting procedures (other than those addressed in this part) that are expressly authorized by statute; (c) Contract modifications, that are within the scope of the contract, including the exercise of priced options that were evaluated as part of the original competition (see 17.207(f)); Out of scope modification issues

22. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR 6.001 – Applicability, cont’d Part 6 applies to all acquisitions except— (d) Orders placed under requirements contracts or definite-quantity contracts; (e) Orders placed under indefinite-quantity contracts that were entered into pursuant to this part when— (1) The contract was awarded under subpart 6.1 or 6.2 and all responsible sources were realistically permitted to compete for the requirements contained in the order; or (2)The contract was awarded under subpart 6.3 and the required justification and approval covers the requirements contained in the order; or (f) Orders placed against task order and delivery order contracts entered into pursuant to subpart 16.5.

23. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] DFARS 206.001 – Applicability DFARS Part 206 also exempts: (1) personal services contracts for healthcare; and (2) Follow-on contracts for prototype products developed under 10 U.S.C. § 4022.

24. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR Subpart 6.1 – Full and Open Competition Competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: Sealed bids. Competitive proposals. If seal ed bids are not appropriate, contracting officers shall request competitive proposals or use other specified competitive procedures. Competition of competitive procedures. If sealed bids are not appropriate, contracting officers may use any combination of competitive procedures (e.g., two-step sealed bidding).

25. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR Subpart 6.1 – Full and Open Competition, cont’d Other competitive procedures: Selection of sources for architect -engineer contracts. Competitive se lection of basic and applied research and that part of development not related to the development of a specific system or hardware procurement is a competitive procedure if award results from— (i) A broad agency announcement that is general in nature identifying areas of research interest, including criteria for selecting proposals, and soliciting the participation of all offerors capable of satisfying the Government’s needs; and (ii) A peer or scientific review. Use of multiple award schedules issued under the procedures established by GSA for the MAS schedule program.

26. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] DFARS Subpart 206.1 – Full and Open Competition Other competitive procedures: In lieu of FAR 6.102(d)(2), competitive selection of science and technology proposals resulting from a broad agency announcement with peer or scientific review. Competitive selection of proposals based on a review by scientific, technological, or other subject-matter expert peers resulting from a commercial solutions opening. Solicitation must be widely advertised—including through Government-wide point of entry.

27. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] Full and Open Competition Unduly Restrictive Terms American Safety Council, Inc. v. United States , 122 Fed. Cl. 426 (2015). Agencies are allowed to include restrictive requirements only in a solicitation only to the extent they are necessary to satisfy the agency’s legitimate needs. If a Court finds a solicitation’s terms are unduly restrictive and serve no legitimate agency need, the Court will find the agency’s decision to include those terms in the solicitation to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

28. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] Full and Open Competition Favoring the Incumbent Samsara Inc. v. United States , No. 23-361, 2024 WL 228081 (Fed. Cl. Jan. 4, 2024). A federal procuring agency may not unduly tip the scales in favor of an incumbent contractor. However, an agency is not required to ignore the benefits or advantages derived from an offeror’s incumbency, and it likewise need not attempt to level the playing field for all other offerors.

29. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] Full and Open Competition Acquisition Planning FirstLine Transp. Sec., Inc. v. United States , 107 Fed. Cl. 189 (2012). Agencies must perform acquisition planning and conduct market research for all acquisitions to promote and provide for full and open competition. Agencies must use the results of market research to determine if sources capable of satisfying the agency’s requirements exist.

30. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] DFARS Subpart 6.2 – Full and Open Competition After Exclusion of Sources Establishing or maintaining alternative sources: Agencies may totally or partially exclude a particular source from a contract action. Determination and Findings (D&F) and supporting documentation must identify the source to be excluded from the contract information.

31. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] DFARS Subpart 6.2 – Full and Open Competition After Exclusion of Sources The D&F should include pertinent information, including: Acquisition history of the supplies or services, including sources, prices, quantities, and dates of award. Circumstances that make it necessary to exclude the particular source, including: Reasons for the lack of or potential loss of alternative sources (e.g., technical complexity and criticality of the supplies or services); and Current annual requirement and projected needs for supplies or services. Whether the existing source must be totally excluded from the contract action or whether partial exclusion is sufficient. Potential effect of exclusion on the excluded source in terms of loss to capability to furnish supplies or services in the future.

32. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR Subpart 6.3 – Other than Full and Open Competition Circumstances permitting other than full and open competition: Only One Responsible Source Unusual & Compelling Urgency Industrial Mobilization; Engineering, Developmental, or Research Capability; or Expert Services International Agreement Authorized or Required by Statute National Security Public Interest

33. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR Subpart 6.3 – Other than Full and Open Competition Before an agency can issue a sole-source award, the contracting officer must justify the award in writing. Justifications are closely scrutinized by protestors, the GAO, and the Court. The justification must strictly comply with the specific requirements in the FAR—the requirements are not merely “check the box” in nature. The justification must include: Description of supplies or services required to meet agency needs; Demonstration that proposed contractor’s unique qualifications or nature of acquisition requires use of authority cited; Description of efforts to ensure offers are solicited from as many potential sources as is practicable; Description of market research.

34. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR Subpart 6.3 – Other than Full and Open Competition Contracting without providing for full and open competition shall not be justified on the basis of— A lack of advance planning by the requiring agency; or Concerns related to the amount of funds available (e.g., funds will expire) to the agency or activity for the acquisition of supplies or services.

35. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR Subpart 6.3 – Other than Full and Open Competition Only One Responsible Source When the supplies or services required by the agency are available from only one responsible source, or, for DoD, NASA, and the Coast Guard, from only one or limited number of responsible sources, and no other type of supplies or services will satisfy agency requirements, full and open competition need not be provided for. Unsolicited Proposals. For DoD, NASA, and the Coast Guard, certain follow-on supply contracts. Limitation on brand-name procurements Requirement for J&A and publication

36. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] DFARS Subpart 6.3 – Other than Full and Open Competition - Only One Responsible Source Defens e appropriations acts prohibit departments and agencies from entering into contracts for studies, analyses, or consulting services on the basis of an unsolicited proposal without providing for full and open competition, unless— Head of contracting agency must determine that: Following thorough technical evaluation, only one source is fully qualified to perform the proposed work; Unsolicite d proposal offers significant scientific or technological promise, represents the product of original thinking, and was submitted in confidence; or Contract benefits the national defense by taking advantage of a unique and significant industrial accomplishment or by ensuring financial support to a new product or idea; Civilian official of DOD determines the award to be in the interest of national defense; or Contract is related to improvement of equipment that is in development or production. Use of brand name or equal descriptions and proprietary specifications and standards requires J&A

37. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR Subpart 6.3 – Other than Full and Open Competition Unusual and Compelling Urgency When the agency’s need for the supplies or services is of such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals, full and open competition need not be provided for. Delay in award of a contract would result in serious injury, financial or other, to the Government. Requirement for J&A—may be after contract award as necessary to avoid unreasonable delay.

38. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR Subpart 6.3 – Other than Full and Open Competition Unusual and Compelling Urgency The total period of performance of a contract awarded or modified using this authority— May not exceed the time necessary— To meet the unusual and compelling requirements of the work to be performed under the contract; and For the agency to enter into another contract for the required goods and services through the use of competitive procedures; May not exceed one year, including all options, unless the head of the agency determines that exceptional circumstances apply. This determination must be documented in the contract file.

39. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] DFARS Subpart 6.3 – Other than Full and Open Competition Unusual & Compelling Urgency Provides additional guidance on circumstances under which use of this authority may be appropriate: Supplies, services, or construction needed at once because of fire, flood, explosion, or other disaster Essential equipment or repair needed at once to: Comply with orders for a ship; Perform the operation mission of an aircraft; or Preclude impairment of launch capabilities or mission performance of missiles or missile support equipment Construction needed at once to preserve a structure or its contents from damage Purchase requests citing an issue priority designator under DOD Manual Bridge contracts!

40. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR Subpart 6.3 – Other than Full and Open Competition Industrial Mobilization Full and open competition need not be provided for when it is necessary to award the contract to a particular source or sources in order— (i) To maintain a facility, producer, manufacturer, or other supplier available for furnishing supplies or services in case of a national emergency or to achieve industrial mobilization; Onshoring When restricted to domestic sources, DFARS requires insertion of DFARS 252.206-7000 – Domestic Source Restriction – Foreign sources except Canada ineligible. Maintenance of critical industrial capabilities (ii) To establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center; or (iii) To acquire the services of an expert or neutral person for any current or anticipated litigation or dispute.

41. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR Subpart 6.3 – Other than Full and Open Competition International Agreement E.g., FMS customers may request that a defense article or defense service be obtained from a particular contractor—in such cases, FAR 6.302-4 provides authority to contract without full and open competition. Authorized or Required by Statute E.g., 38 U.S.C. § 8127 – small business concerns owned and controlled by veterans. National Security Disclosure of the agency’s needs would compromise national security unless the agency is permitted to limit the number of sources from which it solicits bids or proposals.

42. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] DFARS Subpart 6.3 – Other than Full and Open Competition Authorized or Required by Statute Agencies may us e this authority to— Acquire supplies and services from military exchange stores outside th e U.S. for use by the armed forces outside the U.S. Acquire police, fire protection, airfield operation, or other communi ty services from local governments at military installations to be closed under certain circumstances Use of this exemption is precluded for awards to colleges or universities for the performance of research and development, or for the construction of any research or other facility, unless– Statute authorizing or requiring award specifically— States that the statute modifies or supersedes the provisions of 10 U.S.C. 4141; Identifies the particular college or uni versity involved; and States that award is being made in contravention of 10 U.S.C. 4141; and The Secretary of Defense provides Congress written notice of intent to award.

43. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] DFARS Subpart 6.3 – Other than Full and Open Competition Authorized or Required by Statute (Cont’d) Use of this exemption is precluded for awards to colleges or universities for the performance of research and development, or for the construction of any research or other facility, unless– Statute authorizing or requiring award specifically— States that the statute modifies or supersedes the provisions of 10 U.S.C. 4141; Identifies the particular college or uni versity involved; and States that award is being made in contravention of 10 U.S.C. 4141; and The Secretary of Defense provides Congress written notice of intent to award. 5206.302-5 (Navy Marine Corps Acq . Reg. Supp.) - Prior to awarding a SBIR/STTR Phase III contract, the Contracting Officer must affirm in the BCM that the SBIR/STTR Phase III award is derived from, extends, or completes efforts made under prior SBIR/STTR Phase I or II awards and is authorized pursuant to 15 U.S.C. 638(r)(4).

44. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] FAR Subpart 6.3 – Other than Full and Open Competition Public Interest Only used when none of the other authorities apply. Limitations: A written determination to use this authority shall be made by… (i) the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force, the Secretary of Homeland Security for the Coast Guard, or the Administrator of the National Aeronautics and Space Administration; or (ii) the head of any other executive agency. This authority may not be delegated. The Congress shall be notified in writing of such determination not less than 30 days before award of the contract. If required by the head of the agency, the contracting officer shall prepare a justification to support the determination above. DFARS Subpart 206.3 – Other than Full and Open Competition Public Interest Written determination must be made by the Secretary of Defense

45. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] THANK YOU For Attending! QUESTIONS? Please Contact Our Speaker: SPEAKER: Stephen Ruscus FIRM: BakerHostetler EMAIL: [email protected]

46. The DFARS – 2025 - The Defense Federal Acquisition Regulation Supplement JSchaus & Associates – Washington DC – [email protected] QUESTIONS? Please Contact Our Speaker: SPEAKER: Kaitlyn Toth FIRM: BakerHostetler EMAIL: ketoth @bakerlaw.com

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48. Thank You For Attending! The DFARS – 2025 The Defense Federal Acquisition Regulation Supplement A Complimentary Webinar Series JSchaus & Associates – Washington DC – [email protected]