 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER I--GENERAL PROVISIONS
 
  Part D--Administrative Provisions for Delivery of Student Financial 
                               Assistance
 
Sec. 1018a. Procurement flexibility


(a) Procurement authority

    Subject to the authority of the Secretary, the Chief Operating 
Officer of a PBO may exercise the authority of the Secretary to procure 
property and services in the performance of functions managed by the 
PBO. For the purposes of this section, the term ``PBO'' includes the 
Chief Operating Officer of the PBO and any employee of the PBO 
exercising procurement authority under the preceding sentence.

(b) In general

    Except as provided in this section, the PBO shall abide by all 
applicable Federal procurement laws and regulations when procuring 
property and services. The PBO shall--
        (1) enter into contracts for information systems supporting the 
    programs authorized under subchapter IV of this chapter and part C 
    of subchapter I of chapter 34 of title 42 to carry out the functions 
    set forth in section 1018(b)(2) of this title; and
        (2) obtain the services of experts and consultants without 
    regard to section 3109 of title 5 and set pay in accordance with 
    such section.

(c) Service contracts

              (1) Performance-based servicing contracts

        The Chief Operating Officer shall, to the extent practicable, 
    maximize the use of performance-based servicing contracts, 
    consistent with guidelines for such contracts published by the 
    Office of Federal Procurement Policy, to achieve cost savings and 
    improve service.

                  (2) Fee for service arrangements

        The Chief Operating Officer shall, when appropriate and 
    consistent with the purposes of the PBO, acquire services related to 
    the subchapter IV of this chapter and part C of subchapter I of 
    chapter 34 of title 42 delivery system from any entity that has the 
    capability and capacity to meet the requirements for the system. The 
    Chief Operating Officer is authorized to pay fees that are 
    equivalent to those paid by other entities to an organization that 
    provides an information system or service that meets the 
    requirements of the PBO, as determined by the Chief Operating 
    Officer.

(d) Two-phase source-selection procedures

                           (1) In general

        The PBO may use a two-phase process for selecting a source for a 
    procurement of property or services.

                           (2) First phase

        The procedures for the first phase of the process for a 
    procurement are as follows:

        (A) Publication of notice

            The contracting officer for the procurement shall publish a 
        notice of the procurement in accordance with section 416 of 
        title 41 and subsections (e), (f), and (g) of section 637 of 
        title 15, except that the notice shall include only the 
        following:
                (i) A general description of the scope or purpose of the 
            procurement that provides sufficient information on the 
            scope or purpose for sources to make informed business 
            decisions regarding whether to participate in the 
            procurement.
                (ii) A description of the basis on which potential 
            sources are to be selected to submit offers in the second 
            phase.
                (iii) A description of the information that is to be 
            required under subparagraph (B).
                (iv) Any additional information that the contracting 
            officer determines appropriate.

        (B) Information submitted by offerors

            Each offeror for the procurement shall submit basic 
        information, such as information on the offeror's 
        qualifications, the proposed conceptual approach, costs likely 
        to be associated with the proposed conceptual approach, and past 
        performance of the offeror on Federal Government contracts, 
        together with any additional information that is requested by 
        the contracting officer.

        (C) Selection for second phase

            The contracting officer shall select the offerors that are 
        to be eligible to participate in the second phase of the 
        process. The contracting officer shall limit the number of the 
        selected offerors to the number of sources that the contracting 
        officer determines is appropriate and in the best interests of 
        the Federal Government.

                          (3) Second phase

        (A) In general

            The contracting officer shall conduct the second phase of 
        the source selection process in accordance with sections 253a 
        and 253b of title 41.

        (B) Eligible participants

            Only the sources selected in the first phase of the process 
        shall be eligible to participate in the second phase.

        (C) Single or multiple procurements

            The second phase may include a single procurement or 
        multiple procurements within the scope, or for the purpose, 
        described in the notice pursuant to paragraph (2)(A).

                (4) Procedures considered competitive

        The procedures used for selecting a source for a procurement 
    under this subsection shall be considered competitive procedures for 
    all purposes.

(e) Use of simplified procedures for commercial items

    Whenever the PBO anticipates that commercial items will be offered 
for a procurement, the PBO may use (consistent with the special rules 
for commercial items) the special simplified procedures for the 
procurement without regard to--
        (1) any dollar limitation otherwise applicable to the use of 
    those procedures; and
        (2) the expiration of the authority to use special simplified 
    procedures under section 4202(e) of the Clinger-Cohen Act of 1996 
    (110 Stat. 654; 10 U.S.C. 2304 note).

(f) Flexible wait periods and deadlines for submission of offers of 
        noncommercial items

                            (1) Authority

        In carrying out a procurement, the PBO may--
            (A) apply a shorter waiting period for the issuance of a 
        solicitation after the publication of a notice under section 416 
        of title 41 than is required under subsection (a)(3)(A) of such 
        section; and
            (B) notwithstanding subsection (a)(3) of such section, 
        establish any deadline for the submission of bids or proposals 
        that affords potential offerors a reasonable opportunity to 
        respond to the solicitation.

               (2) Inapplicability to commercial items

        Paragraph (1) does not apply to a procurement of a commercial 
    item.

      (3) Consistency with applicable international agreements

        If an international agreement is applicable to the procurement, 
    any exercise of authority under paragraph (1) shall be consistent 
    with the international agreement.

(g) Modular contracting

                           (1) In general

        The PBO may satisfy the requirements of the PBO for a system 
    incrementally by carrying out successive procurements of modules of 
    the system. In doing so, the PBO may use procedures authorized under 
    this subsection to procure any such module after the first module.

                       (2) Utility requirement

        A module may not be procured for a system under this subsection 
    unless the module is useful independently of the other modules or 
    useful in combination with another module previously procured for 
    the system.

                 (3) Conditions for use of authority

        The PBO may use procedures authorized under paragraph (4) for 
    the procurement of an additional module for a system if--
            (A) competitive procedures were used for awarding the 
        contract for the procurement of the first module for the system; 
        and
            (B) the solicitation for the first module included--
                (i) a general description of the entire system that was 
            sufficient to provide potential offerors with reasonable 
            notice of the general scope of future modules;
                (ii) other information sufficient for potential offerors 
            to make informed business judgments regarding whether to 
            submit offers for the contract for the first module; and
                (iii) a statement that procedures authorized under this 
            subsection could be used for awarding subsequent contracts 
            for the procurement of additional modules for the system.

                           (4) Procedures

        If the procurement of the first module for a system meets the 
    requirements set forth in paragraph (3), the PBO may award a 
    contract for the procurement of an additional module for the system 
    using any of the following procedures:

        (A) Sole source

            Award of the contract on a sole-source basis to a contractor 
        who was awarded a contract for a module previously procured for 
        the system under competitive procedures or procedures authorized 
        under subparagraph (B).

        (B) Adequate competition

            Award of the contract on the basis of offers made by--
                (i) a contractor who was awarded a contract for a module 
            previously procured for the system after having been 
            selected for award of the contract under this subparagraph 
            or other competitive procedures; and
                (ii) at least one other offeror that submitted an offer 
            for a module previously procured for the system and is 
            expected, on the basis of the offer for the previously 
            procured module, to submit a competitive offer for the 
            additional module.

        (C) Other

            Award of the contract under any other procedure authorized 
        by law.

                       (5) Notice requirement

        (A) Publication

            Not less than 30 days before issuing a solicitation for 
        offers for a contract for a module for a system under procedures 
        authorized under subparagraph (A) or (B) of paragraph (4), the 
        PBO shall publish in the Commerce Business Daily a notice of the 
        intent to use such procedures to enter into the contract.

        (B) Exception

            Publication of a notice is not required under this paragraph 
        with respect to a use of procedures authorized under paragraph 
        (4) if the contractor referred to in that subparagraph (who is 
        to be solicited to submit an offer) has previously provided a 
        module for the system under a contract that contained cost, 
        schedule, and performance goals and the contractor met those 
        goals.

        (C) Content of notice

            A notice published under subparagraph (A) with respect to a 
        use of procedures described in paragraph (4) shall contain the 
        information required under section 416(b) of title 41, other 
        than paragraph (4) of such section, and shall invite the 
        submission of any assertion that the use of the procedures for 
        the procurement involved is not in the best interest of the 
        Federal Government together with information supporting the 
        assertion.

                          (6) Documentation

        The basis for an award of a contract under this subsection shall 
    be documented. However, a justification pursuant to section 253(f) 
    of title 41 or section 637(h) of title 15 is not required.

             (7) Simplified source-selection procedures

        The PBO may award a contract under any other simplified 
    procedures prescribed by the PBO for the selection of sources for 
    the procurement of modules for a system, after the first module, 
    that are not to be procured under a contract awarded on a sole-
    source basis.

(h) Use of simplified procedures for small business set-asides for 
        services other than commercial items

                            (1) Authority

        The PBO may use special simplified procedures for a procurement 
    of services that are not commercial items if--
            (A) the procurement is in an amount not greater than 
        $1,000,000;
            (B) the procurement is conducted as a small business set-
        aside pursuant to section 644(a) of title 15; and
            (C) the price charged for supplies associated with the 
        services procured are items of supply expected to be less than 
        20 percent of the total contract price.

             (2) Inapplicability to certain procurements

        The authority set forth in paragraph (1) may not be used for--
            (A) an award of a contract on a sole-source basis; or
            (B) a contract for construction.

(i) Guidance for use of authority

                         (1) Issuance by PBO

        The Chief Operating Officer of the PBO, in consultation with the 
    Administrator for Federal Procurement Policy, shall issue guidance 
    for the use by PBO personnel of the authority provided in this 
    section.

                       (2) Guidance from OFPP

        As part of the consultation required under paragraph (1), the 
    Administrator for Federal Procurement Policy shall provide the PBO 
    with guidance that is designed to ensure, to the maximum extent 
    practicable, that the authority under this section is exercised by 
    the PBO in a manner that is consistent with the exercise of the 
    authority by the heads of the other performance-based organizations.

                  (3) Compliance with OFPP guidance

        The head of the PBO shall ensure that the procurements of the 
    PBO under this section are carried out in a manner that is 
    consistent with the guidance provided for the PBO under paragraph 
    (2).

(j) Limitation on multiagency contracting

    No department or agency of the Federal Government may purchase 
property or services under contracts entered into or administered by a 
PBO under this section unless the purchase is approved in advance by the 
senior procurement official of that department or agency who is 
responsible for purchasing by the department or agency.

(k) Laws not affected

    Nothing in this section shall be construed to waive laws for the 
enforcement of civil rights or for the establishment and enforcement of 
labor standards that are applicable to contracts of the Federal 
Government.

(l) Definitions

    In this section:

                         (1) Commercial item

        The term ``commercial item'' has the meaning given the term in 
    section 403(12) of title 41.

                     (2) Competitive procedures

        The term ``competitive procedures'' has the meaning given the 
    term in section 259(b) of title 41.

                        (3) Sole-source basis

        The term ``sole-source basis'', with respect to an award of a 
    contract, means that the contract is awarded to a source after 
    soliciting an offer or offers from, and negotiating with, only that 
    source.

               (4) Special rules for commercial items

        The term ``special rules for commercial items'' means the 
    regulations set forth in the Federal Acquisition Regulation pursuant 
    to section 253(g)(1) of title 41 and section 427 of title 41.

                  (5) Special simplified procedures

        The term ``special simplified procedures'' means the procedures 
    applicable to purchases of property and services for amounts not 
    greater than the simplified acquisition threshold that are set forth 
    in the Federal Acquisition Regulation pursuant to section 
    253(g)(1)(B) of title 41 and section 427(a)(1) of title 41.

(Pub. L. 89-329, title I, Sec. 142, as added Pub. L. 105-244, title I, 
Sec. 101(a), Oct. 7, 1998, 112 Stat. 1611.)

                       References in Text

    Section 4202(e) of the Clinger-Cohen Act of 1996, referred to in 
subsec. (e)(2), is section 4202(e) of Pub. L. 104-106, which is set out 
as a note under section 2304 of Title 10, Armed Forces.


                            Prior Provisions

    A prior section 1018a, Pub. L. 89-329, title I, Sec. 142, as added 
Pub. L. 100-418, title VI, Sec. 6201, Aug. 23, 1988, 102 Stat. 1515, 
related to grants for literacy corps programs, prior to the general 
amendment of this subchapter by Pub. L. 102-325.
