[Federal Register: August 30, 2002 (Volume 67, Number 169)]
[Rules and Regulations]
[Page 56115-56117]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30au02-24]
[[Page 56115]]
-----------------------------------------------------------------------
Part V
Department of Defense
General Services Administration
National Aeronautics and Space Administration
-----------------------------------------------------------------------
48 CFR Parts Ch. 1, 2, 7, 8, et al.
Federal Acquisition Regulations; Final Rules
[[Page 56116]]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Chapter 1
Federal Acquisition Circular 2001-09; Introduction
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Summary presentation of final and interim rules and technical
amendments.
-----------------------------------------------------------------------
SUMMARY: This document summarizes the Federal Acquisition Regulation
(FAR) rules agreed to by the Civilian Agency Acquisition Council and
the Defense Acquisition Regulations Council in this Federal Acquisition
Circular (FAC) 2001-09. A companion document, the Small Entity
Compliance Guide (SECG), follows this FAC. The FAC, including the SECG,
is available via the Internet at http://www.arnet.gov/far.
DATES: For effective dates and comment dates, see separate documents
which follow.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact the analyst whose name appears in the table below in
relation to each FAR case or subject area. Please cite FAC 2001-09 and
specific FAR case number(s). Interested parties may also visit our
website at http://www.arnet.gov/far.
------------------------------------------------------------------------------
Item Subject FAR case Analyst
------------------------------------------------------------------------------
I......... Task-Order and Delivery-Order 1999-303 Wise.
Contracts.
II........ Temporary Emergency Procurement 2002-003 Moss.
Authority (Interim).
III....... Veterans Entrepreneurship and Small 2000-302 Cundiff.
Business Development Act of 1999.
IV........ Trade Agreements Thresholds........... 2002-009 Davis.
V......... Payments Under Fixed-Price 2001-012 Olson.
Construction Contracts.
VI........ Technical Amendments.
-----------------------------------------------------------------------------
SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the
actual revisions and/or amendments to these FAR cases, refer to the
specific item number and subject set forth in the documents following
these item summaries.
FAC 2001-09 amends the FAR as specified below:
Item I--Task-Order and Delivery-Order Contracts (FAR Case 1999-303)
This final rule amends the Federal Acquisition Regulation (FAR) to
further implement subsections 804(a) and (b) of the National Defense
Authorization Act for Fiscal Year 2000 concerning task-order and
delivery-order contracts.
With respect to acquisition planning, the rule draws greater
attention to the capital planning requirements of the Clinger-Cohen Act
(40 U.S.C. 1422) and ensures more deliberation by agency acquisition
planners before orders are placed under a Federal Supply Schedule
contract, or task-order contract or delivery-order contract awarded by
another agency (i.e., Governmentwide acquisition contract or multi-
agency contract).
With respect to the structuring of orders and the consideration
given to contract holders prior to order placement, the rule (1)
increases attention to modular contracting principles to help agencies
avoid unnecessarily large and inadequately defined orders, (2)
facilitates information exchange during the fair opportunity process so
that contractors may develop and propose solutions that enable the
Government to award performance-based orders, and (3) revises existing
documentation requirements to address tradeoff decisions as well as the
issuance of sole-source orders as logical follow-ons to orders already
issued under the contract. This rule also adds a separate definition
for the terms "Governmentwide acquisition contract (GWAC)" and
"Multi-agency contract (MAC)" to the FAR to clarify the difference
between the terms and the purpose of each contract vehicle.
Item II--Temporary Emergency Procurement Authority (FAR Case 2002-003)
This interim rule implements Section 836 of the Fiscal Year 2002
National Defense Authorization Act which increases the amount of the
micro-purchase threshold and the simplified acquisition threshold for
procurements of supplies or services by or for DoD during fiscal years
2002 and 2003, where those procurements are to facilitate the defense
against terrorism or biological or chemical attack against the United
States. Also, contracting officers acquiring biotechnology supplies or
biotechnology services, for use to facilitate the defense against
terrorism or biological or chemical attack against the United States,
may treat the supplies or services as commercial items.
Item III--Veterans Entrepreneurship and Small Business Development Act
of 1999 (FAR Case 2000-302)
This final rule finalizes two interim rules published previously at
65 FR 60542, October 11, 2000 (FAC 97-20), and 66 FR 53492, October 22,
2001 (FAC 2001-01), respectively. The first interim rule implemented
portions of the Veterans Entrepreneurship and Small Business
Development Act of 1999 (Pub. L. 106-50), which added a subcontracting
plan goal for veteran-owned small businesses and a 3 percent
Governmentwide agency goal for service-disabled veteran-owned small
businesses. The second interim rule implemented Section 803 of the
Small Business Reauthorization Act of 2000 (part of the Consolidated
Appropriations Act, 2001, Pub. L. 106-554), which added an additional
subcontracting plan goal for service-disabled veteran-owned small
business concerns. Both rules, and the correction published at 67 FR
1858, January 14, 2002 (FAC 2001-01 Correction), are adopted as final
without change.
Item IV--Trade Agreements Thresholds (FAR Case 2002-009)
This final rule amends FAR Subparts 22.15, 25.2, 25.4, 25.6, 25.11,
and the clauses at 52.213-4 and 52.222-19 to implement new dollar
thresholds for application of the Trade Agreements Act and North
American Free Trade Agreement as published by the U.S. Trade
Representative in the Federal Register at 67 FR 14763, March 27, 2002.
Contracting officers must review the new thresholds when acquiring
supplies, services, or construction in order to select the appropriate
clauses to implement the Buy American Act, trade agreements, and
sanctions of European
[[Page 56117]]
Union country end products and services.
Item V--Payments Under Fixed-Price Construction Contracts (FAR Case
2001-012)
This final rule amends the FAR to clarify in the certification
language of the clause entitled Payments Under Fixed-Price Construction
Contracts that all payments due to subcontractors and suppliers have
been made by the prime contractor from previous progress payments
received from the Government. The rule is of special interest to
contracting officers that administer construction contracts.
Item VI--Technical Amendments
These amendments update sections and make editorial changes at FAR
22.1503, 36.606, and 52.232-16.
Dated: August 21, 2002.
Al Matera,
Director, Acquisition Policy Division.
Federal Acquisition Circular
Federal Acquisition Circular (FAC) 2001-09 is issued under the
authority of the Secretary of Defense, the Administrator of General
Services, and the Administrator for the National Aeronautics and Space
Administration.
Unless otherwise specified, all Federal Acquisition Regulation
(FAR) and other directive material contained in FAC 2001-09 are
effective September 30, 2002, except for Items II and III which are
effective August 30, 2002.
Dated: August 15, 2002.
Deidre A. Lee,
Director, Defense Procurement.
Dated: August 21, 2002.
Patricia A. Brooks,
Acting Deputy Associate Administrator, Office of Acquisition Policy,
General Services Administration.
Dated: August 14, 2002.
Tom Luedtke,
Assistant Administrator for Procurement, National Aeronautics and
Space Administration.
[FR Doc. 02-21866 Filed 8-29-02; 8:45 am]
BILLING CODE 6820-EP-P
[Federal Register: August 30, 2002 (Volume 67, Number 169)]
[Rules and Regulations]
[Page 56117-56120]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30au02-25]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 7, 8, 16, 17, and 52
[FAC 2001-09; FAR Case 1999-303; Item I]
RIN 9000-AI72
Federal Acquisition Regulation; Task-Order and Delivery-Order
Contracts
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to further implement
subsections 804(a) and (b) of the National Defense Authorization Act
for Fiscal Year 2000. These subsections focus primarily on appropriate
use of task-order and delivery-order contracts and specific steps
agencies should take when placing orders under task-order and delivery-
order contracts established by another agency. The rule also clarifies
that written acquisition plans may be required for orders as determined
by the agency head.
DATES: Effective Date: September 30, 2002.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Julia Wise, Procurement Analyst, at (202) 208-
1168. Please cite FAC 2001-09, FAR case 1999-303.
SUPPLEMENTARY INFORMATION:
A. Background
The Councils published a final rule, FAR case 1999-014, Competition
Under Multiple Award Contracts, in the Federal Register at 65 FR 24317,
April 25, 2000, to clarify what contracting officers should consider
when planning for multiple awards of indefinite-delivery contracts, and
clarify how orders should be placed against the resultant contracts.
That rule implemented portions of subsections 804(a) and (b) of the
National Defense Authorization Act for Fiscal Year 2000. This rule
further strengthens that policy and the implementation of subsections
804(a) and (b) of the National Defense Authorization Act for Fiscal
Year 2000 in several ways.
With respect to acquisition planning, the rule draws greater
attention to the capital planning requirements of the Clinger-Cohen Act
(40 U.S.C. 1422) and ensures more deliberation by agency acquisition
planners before orders are placed under a Federal Supply Schedule
contract; or task-order contract or delivery-order contract awarded by
another agency, (i.e., Governmentwide acquisition contract or multi-
agency contract). The Councils are continuing to review the agency
acquisition planning practices of customers of interagency contracts to
determine if additional guidance is needed to ensure strategic use of
these vehicles.
With respect to the structuring of orders and the consideration
given to contract holders prior to order placement, the rule (1)
increases attention to modular contracting principles to help agencies
avoid unnecessarily large and inadequately defined orders, (2)
facilitates information exchange during the fair opportunity process so
that contractors may develop and propose solutions that enable the
Government to award performance-based orders, and (3) revises existing
documentation requirements to address tradeoff decisions as well as the
issuance of sole-source orders as logical follow-ons to orders already
issued under the contract.
This rule also adds to the FAR a separate definition for the terms
"Governmentwide acquisition contract (GWAC)" and "Multi-agency
contract (MAC)" to clarify the difference between the terms and the
purpose of each contract vehicle.
A proposed rule was published in the Federal Register at 66 FR
44518, August 23, 2001. Four sources submitted comments in response to
the proposed rule. This final rule includes a change based on some of
the comments received. Substantive public comments addressed the need
for additional clarification pertaining to the application of the
Economy Act within the proposed definition of multi-agency contract.
The definition states that supplies and services would be obtained
"consistent with" the Economy Act. The Councils agreed that
clarification was needed. Accordingly, the definition of multi-agency
contract was amended by adding a reference to FAR 17.500(b), which
expressly provides that the Economy Act is not applicable if an
interagency acquisition is authorized under a more specific statutory
[[Page 56118]]
authority. In other words, use of more specific authority, if it
exists, would still be "consistent with" the Economy Act.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The Department of Defense, the General Services Administration, and
the National Aeronautics and Space Administration certify that this
final rule will not have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., because the rule makes various
changes to improve the use of task-order contracts and delivery-order
contracts. The primary focus is on usage of these contracts where
multiple awards are made and where the contracts are being used to
support inter-agency transactions. Some aspects of the final rule
(e.g., planning, documentation) largely address the internal operating
procedures of Government agencies. The changes that affect small
entities should have a slight positive effect by, among other things,
strengthening use of the fair opportunity process to ensure small
entities are appropriately being given opportunities to pursue business
opportunities under multiple award task-order and delivery-order
contracts. The rule further acknowledges that access to small business
concerns is an appropriate factor for an agency to consider as part of
its acquisition planning prior to placing an order under a contract
awarded by another agency.
We did not receive any comments regarding this determination as a
result of publication of the proposed rule in the Federal Register at
66 FR 44518, August 23, 2001.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose information collection requirements that require
the approval of the Office of Management and Budget under 44 U.S.C.
3501, et seq.
List of Subjects in 48 CFR Parts 2, 7, 8, 16, 17, and 52
Government procurement.
Dated: August 21, 2002.
Al Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 7, 8, 16, 17,
and 52 as set forth below:
1. The authority citation for 48 CFR parts 2, 7, 8, 16, 17, and 52
continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
2. Amend section 2.101 by adding, in alphabetical order, the
definitions "Governmentwide acquisition contract (GWAC)" and "Multi-
agency contract (MAC)" to read as follows:
2.101 Definitions.
* * * * *
Governmentwide acquisition contract (GWAC) means a task-order or
delivery-order contract for information technology established by one
agency for Governmentwide use that is operated--
(1) By an executive agent designated by the Office of Management
and Budget pursuant to section 5112(e) of the Clinger-Cohen Act, 40
U.S.C. 1412(e); or
(2) Under a delegation of procurement authority issued by the
General Services Administration (GSA) prior to August 7, 1996, under
authority granted GSA by the Brooks Act, 40 U.S.C. 759 (repealed by
Public Law 104-106). The Economy Act does not apply to orders under a
Governmentwide acquisition contract.
* * * * *
Multi-agency contract (MAC) means a task-order or delivery-order
contract established by one agency for use by Government agencies to
obtain supplies and services, consistent with the Economy Act (see
17.500(b)). Multi-agency contracts include contracts for information
technology established pursuant to section 5124(a)(2) of the Clinger-
Cohen Act, 40 U.S.C. 1424(a)(2).
* * * * *
PART 7--ACQUISITION PLANNING
3. Amend section 7.101 by adding, in alphabetical order, the
definition "Order" to read as follows:
7.101 Definitions.
* * * * *
Order means an order placed under a--
(1) Federal Supply Schedule contract; or
(2) Task-order contract or delivery-order contract awarded by
another agency, (i.e., Governmentwide acquisition contract or multi-
agency contract).
* * * * *
4. Amend section 7.103 by revising paragraphs (e) and (q); and
adding paragraph (t) to read as follows:
7.103 Agency-head responsibilities.
* * * * *
(e) Writing plans either on a systems basis, on an individual
contract basis, or on an individual order basis, depending upon the
acquisition.
* * * * *
(q) Ensuring that no purchase request is initiated or contract
entered into that would result in the performance of an inherently
governmental function by a contractor and that all contracts or orders
are adequately managed so as to ensure effective official control over
contract or order performance.
* * * * *
(t) Ensuring that agency planners on information technology
acquisitions comply with the capital planning and investment control
requirements in 40 U.S.C. 1422 and OMB Circular A-130.
5. Amend section 7.104 by revising the first sentence of paragraph
(a); in the second sentence of paragraph (b) by adding "with" after
the word "consult"; and by revising the second sentence of paragraph
(c) to read as follows:
7.104 General procedures.
(a) Acquisition planning should begin as soon as the agency need is
identified, preferably well in advance of the fiscal year in which
contract award or order placement is necessary. * * *
* * * * *
(c) * * * If the plan proposes using other than full and open
competition when awarding a contract, the plan shall also be
coordinated with the cognizant competition advocate.
6. Amend section 7.105 in the first sentence of the introductory
paragraph by removing "subparagraph" and adding "paragraph" in its
place, and in the last sentence by adding "or orders" after the word
"contracts"; and by revising paragraph (b)(4) to read as follows:
7.105 Contents of written acquisition plans.
* * * * *
(b) * * *
(4) Acquisition considerations. (i) For each contract contemplated,
discuss contract type selection (see part 16); use of multiyear
contracting, options, or other special contracting methods (see part
17); any special clauses, special solicitation provisions, or FAR
[[Page 56119]]
deviations required (see subpart 1.4); whether sealed bidding or
negotiation will be used and why; whether equipment will be acquired by
lease or purchase (see subpart 7.4) and why; and any other contracting
considerations.
(ii) For each order contemplated, discuss--
(A) For information technology acquisitions, how the capital
planning and investment control requirements of 40 U.S.C. 1422 and OMB
Circular A-130 will be met (see 7.103(t) and part 39); and
(B) Why this action benefits the Government, such as when--
(1) The agency can accomplish its mission more efficiently and
effectively (e.g., take advantage of the servicing agency's specialized
expertise; or gain access to contractors with needed expertise); or
(2) Ordering through an indefinite delivery contract facilitates
access to small business concerns, including small disadvantaged
business concerns, 8(a) contractors, women-owned small business
concerns, HUBZone small business concerns, veteran-owned small business
concerns, or service-disabled veteran-owned small business concerns.
* * * * *
PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
8.001 through 8.003 [Redesignated as 8.002 through 8.004]
7. Redesignate sections 8.001 through 8.003 as 8.002 through 8.004,
respectively; and add a new section 8.001;
7a. In the newly designated section 8.002 remove from the
introductory text of paragraph (a) "8.002" and add "8.003" in its
place; and in the second sentence of the newly designated section
8.004, remove "must" and add "shall" (twice) in its place.
The added text reads as follows:
8.001 General.
Regardless of the source of supplies or services to be acquired,
information technology acquisitions shall comply with capital planning
and investment control requirements in 40 U.S.C. 1422 and OMB Circular
A-130.
* * * * *
8.401 [Amended]
8. Amend section 8.401 in the first sentence of paragraph (a) by
removing "8.001" and adding "8.002" in its place.
9. Amend section 8.404 by revising paragraph (a) to read as
follows:
8.404 Using schedules.
(a) General. (1) Parts 13 and 19 do not apply to orders placed
against Federal Supply Schedules, except for the provision at 13.303-
2(c)(3). Orders placed against a Multiple Award Schedule (MAS), using
the procedures in this subpart, are considered to be issued using full
and open competition (see 6.102(d)(3)).
(i) Ordering offices need not seek further competition, synopsize
the requirement, make a separate determination of fair and reasonable
pricing, or consider small business programs.
(ii) GSA has already determined the prices of items under schedule
contracts to be fair and reasonable. By placing an order against a
schedule using the procedures in this section, the ordering office has
concluded that the order represents the best value and results in the
lowest overall cost alternative (considering price, special features,
administrative costs, etc.) to meet the Government's needs.
(2) Orders placed under a Federal Supply Schedule contract are not
exempt from the development of acquisition plans (see subpart 7.1), and
an information technology acquisition strategy (see part 39).
* * * * *
8.602 [Amended]
10. Amend section 8.602 in the introductory text of paragraph (b)
by removing "8.001" and adding "8.002" in its place.
PART 16--TYPES OF CONTRACTS
11. Amend section 16.505 as follows:
a. Revise paragraph (a)(2);
b. In paragraph (a)(3) by adding "or order" after the word
"contract";
c. Redesignate paragraphs (a)(4), (a)(5), and (a)(6) as (a)(5),
(a)(6), and (a)(8), respectively, and add new paragraphs (a)(4) and
(a)(7);
d. Add paragraphs (b)(1)(iii)(A)(4) and (b)(1)(iii)(A)(5);
e. Revise the introductory text of paragraph (b)(2);
f. Amend paragraphs (b)(2)(i) and (b)(2)(ii) by removing the
semicolons and adding periods in their places;
g. Revise paragraph (b)(2)(iii);
h. Revise paragraph (b)(4); and
i. Revise the heading and the first sentence of paragraph (b)(5).
The revised and added text reads as follows:
16.505 Ordering.
(a) * * *
(2) Individual orders shall clearly describe all services to be
performed or supplies to be delivered so the full cost or price for the
performance of the work can be established when the order is placed.
Orders shall be within the scope, issued within the period of
performance, and be within the maximum value of the contract.
* * * * *
(4) When acquiring information technology and related services,
consider the use of modular contracting to reduce program risk (see
39.103(a)).
* * * * *
(7) Orders placed under a task-order contract or delivery-order
contract awarded by another agency (i.e., a Governmentwide acquisition
contract, or multi-agency contract)--
(i) Are not exempt from the development of acquisition plans (see
subpart 7.1), and an information technology acquisition strategy (see
part 39); and
(ii) May not be used to circumvent conditions and limitations
imposed on the use of funds (e.g., 31 U.S.C. 1501(a)(1)).
* * * * *
(b) * * *
(1) * * *
(iii) * * *
(A) * * *
(4) The amount of time contractors need to make informed business
decisions on whether to respond to potential orders.
(5) Whether contractors could be encouraged to respond to potential
orders by outreach efforts to promote exchanges of information, such
as--
(i) Seeking comments from two or more contractors on draft
statements of work;
(ii) Using a multiphased approach when effort required to respond
to a potential order may be resource intensive (e.g., requirements are
complex or need continued development), where all contractors are
initially considered on price considerations (e.g., rough estimates),
and other considerations as appropriate (e.g., proposed conceptual
approach, past performance). The contractors most likely to submit the
highest value solutions are then selected for one-on-one sessions with
the Government to increase their understanding of the requirements,
provide suggestions for refining requirements, and discuss risk
reduction measures.
* * * * *
(2) Exceptions to the fair opportunity process. The contracting
officer shall give every awardee a fair opportunity to be considered
for a delivery-order or task-order exceeding $2,500 unless one
[[Page 56120]]
of the following statutory exceptions applies:
* * * * *
(iii) The order must be issued on a sole-source basis in the
interest of economy and efficiency because it is a logical follow-on to
an order already issued under the contract, provided that all awardees
were given a fair opportunity to be considered for the original order.
* * * * *
(4) Decision documentation for orders. The contracting officer
shall document in the contract file the rationale for placement and
price of each order, including the basis for award and the rationale
for any tradeoffs among cost or price and non-cost considerations in
making the award decision. This documentation need not quantify the
tradeoffs that led to the decision. The contract file shall also
identify the basis for using an exception to the fair opportunity
process. If the agency uses the logical follow-on exception, the
rationale shall describe why the relationship between the initial order
and the follow-on is logical (e.g., in terms of scope, period of
performance, or value).
(5) Task-order and delivery-order ombudsman. The head of the agency
shall designate a task-order and delivery-order ombudsman. * * *
* * * * *
PART 17--SPECIAL CONTRACTING METHODS
12. Revise paragraph (b) of section 17.500 to read as follows:
17.500 Scope of subpart.
* * * * *
(b) The Economy Act applies when more specific statutory authority
does not exist. Examples of interagency acquisitions to which the
Economy Act does not apply include--
(1) Acquisitions from required or optional sources of supplies
prescribed in Part 8, which have separate statutory authority (e.g.,
Federal Supply Schedule contracts); and
(2) Acquisitions using Governmentwide acquisition contracts.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.208-9 [Amended]
13. Amend section 52.208-9 by removing from the prescription
"8.003" and adding "8.004" in its place.
[FR Doc. 02-21867 Filed 8-29-02; 8:45 am]
BILLING CODE 6820-EP-P
[Federal Register: August 30, 2002 (Volume 67, Number 169)]
[Rules and Regulations]
[Page 56120-56122]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30au02-26]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 12, 13, 19, and 25
[FAC 2001-09; FAR Case 2002-003; Item II]
RIN 9000-AJ40
Federal Acquisition Regulation; Temporary Emergency Procurement
Authority
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on an interim
rule amending the Federal Acquisition Regulation (FAR) to implement
Section 836 of the Fiscal Year 2002 National Defense Authorization Act.
Section 836 increases the amount of the micro-purchase threshold and
the simplified acquisition threshold for procurements of supplies or
services by or for DoD during fiscal years 2002 and 2003, where those
procurements are to facilitate the defense against terrorism or
biological or chemical attack against the United States.
DATES: Effective Date: August 30, 2002.
Comment Date: Interested parties should submit comments to the FAR
Secretariat at the address shown below on or before October 29, 2002,
to be considered in the formulation of a final rule.
ADDRESSES: Submit written comments to--General Services Administration,
FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, Attn: Ms. Laurie
Duarte, Washington, DC 20405.
Submit electronic comments via the Internet tofarcase.2002-
003@gsa.gov
Please submit comments only and cite FAC 2001-09, FAR case 2002-
003, in all correspondence related to this case.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Victoria Moss, Procurement Analyst, at (202) 501-
4764. Please cite FAC 2001-09, FAR case 2002-003.
SUPPLEMENTARY INFORMATION:
A. Background
This interim rule implements Section 836 of the Fiscal Year 2002
National Defense Authorization Act (Pub. L. 107-107, 10 U.S.C. 2302
Note). Section 836 increases the amount of the micro-purchase threshold
and the simplified acquisition threshold for procurements of supplies
or services by or for DoD during fiscal years 2002 and 2003, where
those procurements are to facilitate the defense against terrorism or
biological or chemical attack against the United States.
For acquisitions of supplies and services to facilitate the defense
against terrorism or biological or chemical attack against the United
States, by or for the Department of Defense, the micro-purchase
threshold is raised to $15,000 (except for construction subject to the
Davis-Bacon Act). The simplified acquisition threshold for such
acquisitions in support of a contingency operation is raised to
$250,000 inside the United States and $500,000 outside the United
States.
Any acquisition by or for the Department of Defense of
biotechnology supplies or biotechnology services to facilitate the
defense against terrorism or biological or chemical attack against the
United States shall be treated as being a procurement of commercial
items.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The changes may have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq. However, the increased thresholds
are limited to procurements that are to facilitate the defense against
terrorism or biological or chemical attack against the United States.
There are no data available on the number of procurements that will be
eligible. We expect the increased thresholds to this limited class of
procurements will apply to a very small number of small entities.
This interim rule does not impose any data collection requirements
on small business concerns. The rule does not duplicate, overlap, or
conflict with other relevant Federal rules. There are no significant
alternatives to the proposed rule that would accomplish the stated
beneficial objective.
The FAR Secretariat has submitted a copy of the Initial Regulatory
Flexibility
[[Page 56121]]
Analysis to the Chief Counsel for Advocacy of the Small Business
Administration. Interested parties may obtain a copy from the FAR
Secretariat. The Councils will consider comments from small entities
concerning the affected FAR subparts in accordance with 5 U.S.C. 610.
Interested parties must submit such comments separately and should cite
5 U.S.C 601, et seq. (FAC 2001-09, FAR case 2002-003), in
correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose information collection requirements that require
the approval of the Office of Management and Budget under 44 U.S.C.
3501, et seq.
D. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary because the FAR coverage implements Section 836 of the
Fiscal Year 2002 National Defense Authorization Act, signed on December
28, 2001, which provides for urgently needed authorities.
However, pursuant to Public Law 98-577 and FAR 1.501, the Councils
will consider public comments received in response to this interim rule
in the formation of the final rule.
List of Subjects in 48 CFR Parts 2, 12, 13, 19, and 25
Government procurement.
Dated: August 21, 2002.
AL Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 12, 13, 19, and
25 as set forth below:
1. The authority citation for 48 CFR parts 2, 12, 13, 19, and 25
continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
2. Amend section 2.101 by revising the definitions "Micro-
purchase", "Micro-purchase threshold", and "Simplified acquisition
threshold" to read as follows:
2.101 Definitions.
* * * * *
Micro-purchase means an acquisition of supplies or services using
simplified acquisition procedures, the aggregate amount of which does
not exceed the micro-purchase threshold.
Micro-purchase threshold means $2,500, except it means--
(1) $2,000 for construction subject to the Davis-Bacon Act; and
(2) $15,000 for acquisitions by or for the Department of Defense
facilitating the defense against terrorism or biological or chemical
attack as described in 13.201(g), except for construction subject to
the Davis-Bacon Act.
* * * * *
Simplified acquisition threshold means $100,000, except that in the
case of any contract to be awarded and performed, or purchase to be
made--
(1) Outside the United States in support of a contingency operation
(as defined in 10 U.S.C. 101(a)(13)) or a humanitarian or peacekeeping
operation (as defined in 10 U.S.C. 2302(8) and 41 U.S.C. 259(d)), the
term means $200,000; or
(2) To facilitate the defense against terrorism or biological or
chemical attack against the United States, for acquisitions--
(i) Inside the United States, by or for the Department of Defense,
for which award is made and funds are obligated on or before September
30, 2003, in support of a contingency operation (as defined in 10
U.S.C. 101(a)(13)), the term means $250,000; or
(ii) Outside the United States, by or for the Department of
Defense, for which award is made and funds are obligated on or before
September 30, 2003, in support of a contingency operation (as defined
in 10 U.S.C. 101(a)(13)), the term means $500,000.
* * * * *
PART 12--ACQUISITION OF COMMERCIAL ITEMS
3. Amend section 12.102 by adding paragraph (f) to read as follows:
12.102 Applicability.
* * * * *
(f) Contracting officers shall treat any acquisition by or for the
Department of Defense of biotechnology supplies or biotechnology
services, for use to facilitate the defense against terrorism or
biological attack against the United States, as an acquisition of
commercial items. The policies of this part shall apply to such
acquisitions, including the requirement to use firm-fixed price
contracts or fixed-price contracts with economic price adjustments.
Nothing in this paragraph shall preclude a contracting officer from
treating an acquisition described in this paragraph as one for a non-
commercial item if a determination is made by the contracting officer
that the purchase cannot be made at a fair and reasonable price using
the policies of this part. This paragraph applies only when award is
made and funds are obligated on or before September 30, 2003.
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
13.003 [Amended]
4. Amend section 13.003 in paragraph (b)(1) by adding "($15,000
for acquisitions as described in 13.201(g))" after "$2,500"; and in
paragraph (b)(2) by removing "$2,500" and adding "the micro-purchase
threshold" in its place.
5. Amend section 13.201 by adding paragraph (g) to read as follows:
13.201 General.
* * * * *
(g) There is a temporary $15,000 micro-purchase threshold for the
acquisition of supplies or services by or for the Department of Defense
for which award is made and funds are obligated on or before September
30, 2003, facilitating the defense against terrorism or biological or
chemical attack against the United States (see 2.101). Purchases using
this authority must have a clear and direct relationship to the defense
against terrorism or biological or chemical attack.
PART 19--SMALL BUSINESS PROGRAMS
6. Amend section 19.502-1 by revising paragraph (b) to read as
follows:
19.502-1 Requirements for setting aside acquisitions.
* * * * *
(b) This requirement does not apply to purchases of $2,500 or less
($15,000 or less for acquisitions as described in 13.201(g)), or
purchases from required sources of supply under part 8 (e.g., Federal
Prison Industries, Committee for Purchase From People Who are Blind or
Severely Disabled, and Federal Supply Schedule contracts).
19.502-2 [Amended]
7. Amend section 19.502-2 in the first sentence of paragraph (a) by
removing "$2,500," and adding "$2,500 ($15,000 for acquisitions as
described in 13.202(g))," in its place.
8. Amend section 19.903 by--
a. Removing the word "or" from paragraph (b)(1);
[[Page 56122]]
b. Removing the period at the end of the sentence in paragraph
(b)(2) and adding "; or" in its place; and
c. Adding paragraph (b)(3) to read as follows:
19.903 Applicability.
* * * * *
(b) * * *
(3) Acquisitions of $15,000 or less facilitating the defense
against terrorism or biological or chemical attack against the United
States as described in 13.201(g).
PART 25--FOREIGN ACQUISITION
25.1101 [Amended]
9. Amend section 25.1101 in the introductory text of paragraph
(a)(1) by adding "($15,000 for acquisitions as described in
13.201(g))" after "$2,500".
25.1103 [Amended]
10. Amend section 25.1103 in paragraph (a) by removing "$2,500,"
and adding "$2,500 ($15,000 for acquisitions as described in
13.201(g))," in its place.
[FR Doc. 02-21868 Filed 8-29-02; 8:45 am]
BILLING CODE 6820-EP-U
[Federal Register: August 30, 2002 (Volume 67, Number 169)]
[Rules and Regulations]
[Page 56122-56123]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30au02-27]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 4, 5, 7, 19, 52, and 53
[FAC 2001-09; FAR Case 2000-302; Item III]
RIN 9000-AI93
Federal Acquisition Regulation; Veterans Entrepreneurship and
Small Business Development Act of 1999
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to adopt, as final,
the first interim rule published at 65 FR 60542, October 11, 2000,
which implemented portions of the Veterans Entrepreneurship and Small
Business Development Act of 1999 which added a subcontracting plan goal
for veteran-owned small businesses and a 3 percent Governmentwide
agency goal for service-disabled veteran-owned small businesses, and
the second interim rule published at 66 FR 53492, October 22, 2001,
which implemented Section 803 of the Small Business Reauthorization Act
of 2000 (part of the Consolidated Appropriations Act, 2001), which
added an additional subcontracting plan goal for service-disabled
veteran-owned small business concerns. Both rules, and the correction
published January 14, 2002, are adopted as final without change.
DATES: Effective Date: August 30, 2002.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Rhonda Cundiff, Procurement Analyst, at (202) 501-
0044. Please cite FAC 2001-09, FAR case 2000-302.
SUPPLEMENTARY INFORMATION:
A. Background
The final rule amends the FAR to implement portions of the Veterans
Entrepreneurship and Small Business Development Act of 1999 (Pub. L.
106-50) and section 803 of the Small Business Reauthorization Act of
2000 (part of the Consolidated Appropriations Act, 2001, Pub. L. 106-
554). The Veterans Entrepreneurship and Small Business Development Act
of 1999 established new assistance programs for veterans and service-
disabled veterans who own and operate small businesses. Specifically,
the Act--
Defines the terms "small business concern owned and
controlled by service-disabled veterans"; and "small business concern
owned and controlled by service-disabled veterans";
Establishes that veteran-owned and service-disabled
veteran-owned small businesses be afforded maximum practical
opportunity to participate in the performance of contracts and
subcontracts awarded by any Federal agency;
Establishes a requirement to include a goal for veteran-
owned small businesses in subcontracting plans under the clause at
52.219-9;
Establishes a 3 percent Governmentwide goal (based on the
total value of all prime contract and subcontract awards) for
participation by service-disabled veteran-owned small businesses; and
Adds data collection requirements for prime and
subcontract awards to veteran-owned small businesses and service
disabled veteran-owned small business concerns.
DoD, GSA, and NASA published in the Federal Register two interim
rules (65 FR 60542, October 11, 2000 (FAC 97-20) and 66 FR 53492,
October 22, 2001 (FAC 2001-01), respectively); and a correction to the
second interim rule (67 FR 1858, January 14, 2002 (FAC 2001-01
Correction)), to implement the statutes.
Four respondents submitted comments in response to the interim
rule. The Councils considered all comments and made no changes as a
result. However, three of the comments merit noting. The first comment
was that the interim rule, as published on October 11, 2001, is flawed
as 19.704(a)(1) and the clause at 52.219-9(d)(1) still contain the
phrase "a separate goal for service-disabled veteran-owned small
business concerns is not required." Response: The appearance of that
phrase in the Federal Register was an error and was subsequently
corrected by the January 14, 2002, Federal Register notice.
The second comment consists of several suggestions of policy steps
that should be taken to implement the legislation. Response: The
comment is outside the scope of the case, as it does not address any
existing or proposed FAR coverage.
The third comment suggests that the rule be modified to provide
service-disabled veteran-owned small business concerns "the benefit of
every contracting preference afforded SDBs and women-owned small
businesses * * *". The comment also suggests limiting of competition
for certain commodities or service that may be furnished by service-
disabled veteran-owned small business concerns. Response: Existing
legislation does not permit adopting any of the suggestions contained
in the comment.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The changes may have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., because the rule adds a new
statutory subcontracting plan goal requirement for service-disabled
veteran-owned small business concerns. A Final Regulatory Flexibility
Analysis (FRFA) has been prepared and is summarized as follows:
This final rule revises the Federal Acquisition Regulation to
implement
[[Page 56123]]
portions of the Veterans Entrepreneurship and Small Business
Development Act of 1999 (Pub. L. 106-50) and section 803 of the
Small Business Reauthorization Act of 2000, part of the Consolidated
Appropriations Act, 2001 (Pub. L. 106-554). The statutes added a
separate subcontracting plan goal requirement for veteran-owned
small business and another goal for service-disabled veteran-owned
small business concerns. There are approximately 4 to 5.5 million
small businesses owned and controlled by veterans and 100,000 to
300,000 small businesses owned and controlled by service-disabled
veterans. This rule does not duplicate, overlap, or conflict with
other relevant Federal regulations. There are no alternatives to the
final rule that would accomplish the stated objectives.
The FAR Secretariat has submitted a copy of the FRFA to the Chief
Counsel for Advocacy of the Small Business Administration. Interested
parties may obtain a copy from the FAR Secretariat. The Councils will
consider comments from small entities concerning the affected FAR Parts
2, 4, 5, 7, 19, 52, and 53 in accordance with 5 U.S.C. 610. Interested
parties must submit such comments separately and should cite 5 U.S.C
601, et seq. (FAC 2001-09, FAR case 2000-302), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (Pub. L. 104-13) applies.
However, this final rule requires contractors to report, as a separate
item, information already collected and reported under OMB Control
Numbers 9000-0006 and 9000-0007. The impact of this final rule on the
information collection hours of these OMB clearances is so small as to
be within the estimating parameters of these clearances. Therefore, the
clearances have not been changed.
List of Subjects in 48 CFR Parts 2, 4, 5, 7, 19, 52, and 53
Government procurement.
Dated: August 21, 2002.
Al Matera,
Director, Acquisition Policy Division.
Interim Rule Adopted as Final Without Change
Accordingly, DoD, GSA, and NASA adopt the interim rules and
correction amending 48 CFR parts 2, 4, 5, 7, 19, 52, and 53, which were
published in the Federal Register at 65 FR 60542, October 11, 2000, the
second interim rule at 66 FR 53492, October 22, 2001, and the
correction to the second interim rule at 67 FR 1858, January 14, 2002,
as a final rule without change.
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
[FR Doc. 02-21869 Filed 8-29-02; 8:45 am]
BILLING CODE 6820-EP-U
[Federal Register: August 30, 2002 (Volume 67, Number 169)]
[Rules and Regulations]
[Page 56123-56124]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30au02-28]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 22, 25, and 52
[FAC 2001-09; FAR Case 2002-009; Item IV]
RIN 9000-AJ41
Federal Acquisition Regulation; Trade Agreements Thresholds
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to implement new
dollar thresholds for application of the Trade Agreements Act (TAA) and
North American Free Trade Agreement (NAFTA) as published by the U.S.
Trade Representative in the Federal Register at 67 FR 14763, March 27,
2002.
DATES: Effective Date: September 30, 2002.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Cecelia Davis, Procurement Analyst, at (202) 219-
0202. Please cite FAC 2001-09, FAR case 2002-009.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule amends FAR Subparts 22.15, 25.2, 25.4, 25.6, and
25.11 to implement new dollar thresholds for application of the Trade
Agreements Act (TAA) and North American Free Trade Agreement (NAFTA),
as published by the U.S. Trade Representative in the Federal Register
at 67 FR 14763, March 27, 2002.
The rule also amends the clauses at 52.213-4, Terms and Conditions-
-Simplified Acquisitions (Other Than Commercial Items), and 52.222-19,
Child Labor--Cooperation with Authorities and Remedies.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act does not apply to this rule. This
final rule does not constitute a significant FAR revision within the
meaning of FAR 1.501 and Public Law 98-577, and publication for public
comments is not required. However, the Councils will consider comments
from small entities concerning the affected FAR Parts 22, 25, and 52 in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 601, et seq. (FAC 2001-09,
FAR case 2002-009), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does apply; however, these changes to
the FAR do not impose additional information collection requirements to
the paperwork burden previously approved under OMB Control Numbers
9000-0023, 9000-0025, 9000-0130, and 9000-0141.
List of Subjects in 48 CFR Parts 22, 25, and 52
Government procurement.
Dated: August 21, 2002.
Al Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 22, 25, and 52 as
set forth below:
1. The authority citation for 48 CFR parts 22, 25, and 52 continues
to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.1503 [Amended]
2. Amend section 22.1503 in paragraph (b)(3) by removing
"$54,372" and adding "$56,190" in its place; and by removing from
paragraph (b)(4) "$177,000" and adding "$169,000" in its place.
PART 25--FOREIGN ACQUISITION
25.202 [Amended]
3. Amend section 25.202 in paragraph (c) by removing "$6,806,000"
and "$7,068,419" and adding "$6,481,000" and "$7,304,733" in
their place, respectively.
25.403 [Amended]
4. Amend section 25.403 in paragraph (b)(1) by removing
"$177,000" and "$6,806,000" and adding "$169,000" and
"$6,481,000" in their place, respectively.
[[Page 56124]]
25.405 [Amended]
5. Amend section 25.405 as follows:
a. In paragraph (a) by removing "$25,000 or less" and "$54,372"
and adding "less than $25,000" and "$56,190" in their place,
respectively;
b. In paragraph (b) by removing "$7,068,419" and adding
"7,304,733" in its place; and
c. In paragraph (c) by removing "$54,372" and $7,068,419" and
adding "$56,190" and "$7,304,733" in their place, respectively.
25.601 [Amended]
6. Amend section 25.601 as follows:
a. In the introductory text of paragraph (a) by removing "must"
and adding "shall" in its place;
b. In paragraphs (a)(1) and (a)(3)(ii) by removing "$177,000" and
adding "$169,000" in their places; and
c. In paragraph (a)(2) by removing "$6,806,000" and adding
"$6,481,000" in its place.
7. Amend section 25.1101 as follows:
a. Revise paragraphs (b)(1)(i)(A), (b)(1)(ii), (b)(1)(iii),
(b)(2)(ii), and (b)(2)(iii); and
b. In paragraphs (c)(1) and (d) by removing "$177,000" and adding
"$169,000" in their place.
The revised text reads as follows:
25.1101 Acquisition of supplies.
* * * * *
(b)(1)(i) * * *
(A) The acquisition is for supplies, or for services involving the
furnishing of supplies, for use within the United States, and the
acquisition value is $25,000 or more, but is less than $169,000; and
* * * * *
(ii) If the acquisition value is $25,000 or more but is less than
$50,000, use the clause with its Alternate I.
(iii) If the acquisition value is $50,000 or more but is less than
$56,190, use the clause with its Alternate II.
(2) * * *
(ii) If the acquisition value is $25,000 or more but is less than
$50,000, use the provision with its Alternate I.
(iii) If the acquisition value is $50,000 or more but is less than
$56,190, use the provision with its Alternate II.
* * * * *
25.1102 [Amended]
8. Amend section 25.1102 as follows:
a. In the introductory text of paragraphs (a) and (c), and
paragraphs (c)(3) and (d)(3) by removing "$6,806,000" and adding
"$6,481,000" in their place; and
b. In paragraphs (c)(3) and (d)(3) by removing "$7,068,419" and
adding "$7,304,733" in their place.
25.1103 [Amended]
9. Amend section 25.1103 in paragraphs (c)(1)(i) and (c)(1)(ii)(B)
by removing "$177,000" and adding "$169,000" in their place.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
10. Amend section 52.213-4 as follows:
a. Revise the date of the clause; and
b. Remove paragraph (b)(1)(vi) and redesignate paragraphs (b)(1)(i)
through (b)(1)(v) as (b)(1)(ii) through (b)(1)(vi), respectively; and
add a newly designated paragraph (b)(1)(i) to read as follows:
52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than
Commercial Items).
* * * * *
Terms and Conditions--Simplified Acquisitions (Other Than Commercial
Items) (Sept 2002)
* * * * *
(b) * * *
(1) * * *
(i) 52.222-19, Child Labor--Cooperation with Authorities and
Remedies (Sept 2002) (E.O. 13126). (Applies to contracts for
supplies exceeding the micro-purchase threshold.)
* * * * *
52.222-19 [Amended]
11. Amend section 52.222-19 by revising the date of the clause to
read (SEPT 2002); in paragraph (a)(3) by removing "$54,372" and
adding "$56,190" in its place; and in paragraph (a)(4) by removing
"$177,000" and adding "$169,000" in its place.
[FR Doc. 02-21870 Filed 8-29-02; 8:45 am]
BILLING CODE 6820-EP-P
[Federal Register: August 30, 2002 (Volume 67, Number 169)]
[Rules and Regulations]
[Page 56124-56126]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30au02-29]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 52
[FAC 2001-09; FAR Case 2001-012; Item V]
RIN 9000-AJ22
Federal Acquisition Regulation; Payments Under Fixed-Price
Construction Contracts
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to clarify in the
certification language of the clause entitled Payments Under Fixed-
Price Construction Contracts that all payments due to subcontractors
and suppliers have been made by the prime contractor from previous
progress payments received from the Government.
DATES: Effective Date: September 30, 2002.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Mr. Jeremy Olson at (202) 501-3221. Please cite FAC
2001-09, FAR case 2001-012.
SUPPLEMENTARY INFORMATION:
A. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 66 FR 53050, October 18, 2001, with request for comments.
Six respondents submitted public comments. The Councils considered all
comments and concluded that the proposed rule should be converted to a
final rule, with no changes made to the proposed rule.
The rule revises FAR 52.232-5, Payments Under Fixed-Price
Construction Contracts, to clarify the certification language. The
ambiguity surfaced as a result of a decision issued on April 2, 1999,
by the United States Court of Appeals for the Sixth Circuit in United
States v. Gatewood, 173 F.3d 983 (6th Cir. 1999). The Court concluded
that certifying that the prime contractor has made payments to
subcontractors and suppliers does not explicitly include all payments
due.
Of the six respondents who submitted public comments, two endorsed
the proposed rule as written. The remaining respondents provided
comments, which are discussed below:
1. One of the respondents asserted that some of its customers
"that do not pay their invoices on time use the rationale of this FAR
regulation to respond to us that it is not necessary to pay us until
they themselves are paid by the Federal Government." The respondent
requested that the Government close "a loophole" for billion dollar
companies to avoid paying their smaller vendors.
[[Page 56125]]
Response: It has always been the Government's intent that
subcontractors be paid all that they are due on a timely basis, in
accordance with the terms of their subcontract agreements with their
prime contractors. Because of the decision in United States v.
Gatewood, it is necessary to make that point with greater clarity by
inserting the word "all," thus ensuring that the prime contractor has
made all payments due its subcontractors that have been included in its
progress payments billings. The FAR change is designed to better ensure
that subcontractors are paid on a timely basis, thus addressing the
respondent's request that a "loophole" be closed. The final rule
would prevent construction prime contractors from making only partial
payments to subcontractors, based on a very narrow reading of the
current language of FAR 52.232-5(c)(2).
2. A second respondent suggested a slight rewording of the proposed
change to FAR 52.232-5(c)(2), to better address not only the
requirement for the prime contractor to have made previous payments in
a timely manner, but that it make current payments in a timely manner
as well. The wording suggested is as follows:
"All payments due to subcontractors and suppliers from previous
payments received under the contract have been made in a timely manner;
and all payments due to subcontractors and suppliers from the proceeds
of the payment covered by this certification will be made timely, in
accordance with subcontract agreements and the requirements of chapter
39 of Title 31, United States Code * * *."
Response: The Councils concluded that the rewording of the proposed
rule recommended by respondent 2 is not necessary. The
proposed rule states that "timely payments will be made from the
proceeds of the payment covered by this certification, in accordance
with subcontract agreements and the requirements of chapter 39 of Title
31, United States Code." Consequently, if the prime contractor elects
to make only a part of the payments due to subcontractors from the
proceeds of the progress payment, the prime contractor would be making
some of its payments on an untimely basis, and as such, the prime
contractor will have made a false certification. Under the language of
the clause, payments due in accordance with the terms of subcontract
agreements and the law must be made on a timely basis if they are to be
included in the prime contractor's payment request.
3. A third respondent suggested alternative language to paragraph
(c)(2) of the FAR clause at FAR 52.232-5. The respondent's rationale
was that the clause should specifically indicate that the prime
contractor's certification covers payments due for both work completed
and supplies or services delivered by the subcontractors. Respondent
3 asserted that prime contractors do not have to pay their
subcontractors for supplies or services delivered unless and until
those supplies or services have been incorporated into the scope of
work. Consequently, the respondent wanted to specifically indicate that
the payments covered by the certified payment request include payments
to subcontractors for materials and services that may not have been
incorporated into the scope of the prime contract at the time the prime
contractor's payment request is made to the Government. The wording
suggested by the respondent is as follows:
"(2) All payments due to subcontractors and suppliers for work
completed or materials/equipment delivered have been made from previous
payments under this contract and timely payments will be made from
payments due for which this certification and the attached invoice is
submitted. This requirement supercedes any other payment terms that may
have been included in any subcontract terms and is required by chapter
39 of Title 31, United States Code."
Response: The Councils concluded that the language suggested by
respondent 3 is not needed and may lead to confusion with
regard to the requirements of the entire payment clause at FAR 52.232-
5. FAR 52.232-5(b)(1) requires that the prime contractor's progress
payment request include a listing of the amount included for work
performed by each subcontractor under the contract; a listing of the
total amount of each subcontract under the contract; and a listing of
amounts previously paid to each subcontractor. The clause also clearly
indicates in 52.232-5(c)(1) that the contractor's certified payment
request is for amounts "only for performance in accordance with the
specifications, terms, and conditions of the contract."
It is not the intent of this clause to enable the billing of
progress payments for materials and services that may not have been
incorporated into the scope of work of the contract. It is conceivable
that a construction prime contractor may have purchased building
materials from a single vendor sufficient to support not only the
construction project under the Government's contract, but also on other
jobs as well. However, the prime contractor can only bill for the
materials used on the subject Government contract, once it has been
determined what portion of those materials will be used to perform the
Government contract. The fact that the prime contractor may not have
paid the subcontractor for materials as yet unidentifiable to the
Government contract may be a matter of general concern to the
contracting officer, but it does not have a bearing on progress payment
billings under a specific Government contract until after the material
has been identified as part of the scope of work of that contract.
4. The fourth respondent asserted that, because the payments made
under construction prime contracts are almost always covered by payment
bonds or alternate payment procedures, the Government should not be
involved in payment disputes between prime contractors and
subcontractors. Consequently, respondent 4 concluded that the
prime contractor's certification that payments have been made to its
subcontractors was redundant and unnecessary, and that the
certification should be eliminated. Respondent 4 also
indicated that contracting officer inquiries as to whether a
subcontractor has been paid on time were usually a reflection of a
situation where the subcontractor has not been paid because of a
dispute over subcontractor performance. Consequently, respondent
4 believed the following language was sufficient:
"(2) All past and future payments due to subcontractors and
suppliers will be or have been made as required by chapter 39 of Title
31, United States Code."
Response: The Councils concluded that adopting respondent
4's proposed alternative language could be seen as a
significant weakening of the payment protections afforded to
construction subcontractors by Government contracts. The certification
requirement questioned by respondent 4 is provided for in
chapter 39 of Title 31 of the U.S.C. The certification is needed in the
event the prime contractor has fraudulently billed the Government for
progress payments that the prime contractor has represented will be
used to pay its subcontractors; as such, this certification supports
the possibility that the Government may need to prosecute the prime
contractor under laws relating to defrauding the Government. Absent a
certification, and employing only the words proposed by respondent
4, the Government could assert that the prime contractor had
breached its contract if it failed to pay its subcontractors with the
proceeds
[[Page 56126]]
from progress payments paid to the prime contractor for that purpose.
But that is well short of the enforcement action potentially available
under the fraud statute.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The Department of Defense, the General Services Administration, and
the National Aeronautics and Space Administration certify that this
final rule will not have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., because most contracts awarded
to small entities have a dollar value less than the simplified
acquisition threshold and, therefore, do not have the progress payment
type of financing. In addition, this change is a clarification of
existing policy, rather than the addition of new policy.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose information collection requirements that require
the approval of the Office of Management and Budget under 44 U.S.C.
3501, et seq.
List of Subjects in 48 CFR Part 52
Government procurement.
Dated: August 21, 2002
Al Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR part 52 as set forth
below:
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
1. The authority citation for 48 CFR part 52 continues to read as
follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
2. Amend section 52.232-5 by revising the date of the clause and
paragraph (c)(2) to read as follows:
52.232-5 Payments Under FixeduPrice Construction Contracts.
* * * * *
Payments Under Fixed--Price Construction Contracts (Sept. 2002)
* * * * *
(c) * * *
(2) All payments due to subcontractors and suppliers from
previous payments received under the contract have been made, and
timely payments will be made from the proceeds of the payment
covered by this certification, in accordance with subcontract
agreements and the requirements of chapter 39 of Title 31, United
States Code;
* * * * *
[FR Doc. 02-21871 Filed 8-29-02; 8:45 am]
BILLING CODE 6820-EP-U
[Federal Register: August 30, 2002 (Volume 67, Number 169)]
[Rules and Regulations]
[Page 56126]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30au02-30]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 22, 36, and 52
[FAC 2001-09; Item VI]
Federal Acquisition Regulation; Technical Amendments
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document makes amendments to the Federal Acquisition
Regulation in order to update references and make editorial changes.
DATES: Effective Date: September 30, 2002.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, (202) 501-4755. Please cite FAC 2001-
09, Technical Amendments.
List of Subjects in 48 CFR Parts 22 and 52
Government procurement.
Dated: August 21, 2002.
Al Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 22, 36, and 52 as
set forth below:
1. The authority citation for 48 CFR parts 22, 36, and 52 continues
to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.1503 [Amended]
2. Amend section 22.1503 in the first sentence of paragraph (a) by
removing "(www.dol.gov/dol/ilab)" and adding "(www.dol.gov/ilab/)"
in its place.
PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
36.606 [Amended]
3. Amend section 36.606 in the last sentence of paragraph (a) by
removing from the parenthetical the words "and the determination and
findings requirement at 16.306(c)(2) for a cost-plus-fixed-fee
contract".
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
4. Amend section 52.232-16 by correcting Alternate III of the
clause to read as follows:
52.232-16 Progress Payments.
* * * * *
Alternate III (Feb 2002). As prescribed in 32.502-4(d), add the
following paragraph (m) to the basic clause. If Alternate II is also
being used, redesignate the following paragraph as paragraph (o):
(m) The provisions of this clause will not be applicable to
individual orders at or below the simplified acquisition threshold.
[FR Doc. 02-21872 Filed 8-29-02; 8:45 am]
BILLING CODE 6820-EP-P
[Federal Register: August 30, 2002 (Volume 67, Number 169)]
[Rules and Regulations]
[Page 56126-56127]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30au02-31]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Chapter 1
Federal Acquisition Regulation; Small Entity Compliance Guide
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Small Entity Compliance Guide.
-----------------------------------------------------------------------
SUMMARY: This document is issued under the joint authority of the
Secretary of Defense, the Administrator of General Services and the
Administrator for the National Aeronautics and Space Administration.
This Small Entity Compliance Guide has been prepared in accordance with
Section 212 of the Small Business Regulatory Enforcement Fairness Act
of 1996 (Pub. L. 104-121). It consists of a summary of rules appearing
in Federal Acquisition Circular (FAC) 2001-09 which amend the FAR. An
asterisk (*) next to a rule indicates that a regulatory flexibility
analysis has been prepared in accordance with 5 U.S.C. 604. Interested
parties may obtain further information regarding these rules by
referring to FAC 2001-09 which precedes this document.
[[Page 56127]]
These documents are also available via the Internet at http://
www.arnet.gov/far.
FOR FURTHER INFORMATION CONTACT: Laurie Duarte, FAR Secretariat, (202)
501-4225. For clarification of content, contact the analyst whose name
appears in the table below.
List of Rules in FAC 2001-09
------------------------------------------------------------------------------
Item Subject FAR case Analyst
------------------------------------------------------------------------------
I......... Task-Order and Delivery-Order 1999-303 Wise.
Contracts.
II........ Temporary Emergency Procurement 2002-003 Moss.
Authority (Interim).
III....... Veterans Entrepreneurship and Small 2000-302 Cundiff.
Business Development Act of 1999.
IV........ Trade Agreements Thresholds........... 2002-009 Davis.
V......... Payments Under Fixed-Price 2001-012 Olson.
Construction Contracts.
VI........ Technical Amendments.
-----------------------------------------------------------------------------
Item I--Task-Order and Delivery-Order Contracts (FAR Case 1999-303)
This final rule amends the Federal Acquisition Regulation (FAR) to
further implement subsections 804(a) and (b) of the National Defense
Authorization Act for Fiscal Year 2000 concerning task-order and
delivery-order contracts.
With respect to acquisition planning, the rule draws greater
attention to the capital planning requirements of the Clinger-Cohen Act
(40 U.S.C. 1422) and ensures more deliberation by agency acquisition
planners before orders are placed under a Federal Supply Schedule
contract, or task-order contract or delivery-order contract awarded by
another agency (i.e., Governmentwide acquisition contract or multi-
agency contract).
With respect to the structuring of orders and the consideration
given to contract holders prior to order placement, the rule (1)
increases attention to modular contracting principles to help agencies
avoid unnecessarily large and inadequately defined orders, (2)
facilitates information exchange during the fair opportunity process so
that contractors may develop and propose solutions that enable the
Government to award performance-based orders, and (3) revises existing
documentation requirements to address tradeoff decisions as well as the
issuance of sole-source orders as logical follow-ons to orders already
issued under the contract. This rule also adds a separate definition
for the terms "Governmentwide acquisition contract (GWAC)" and
"Multi-agency contract (MAC)" to the FAR to clarify the difference
between the terms and the purpose of each contract vehicle.
Item II--Temporary Emergency Procurement Authority (FAR Case 2002-003)
This interim rule implements Section 836 of the Fiscal Year 2002
National Defense Authorization Act which increases the amount of the
micro-purchase threshold and the simplified acquisition threshold for
procurements of supplies or services by or for DoD during fiscal years
2002 and 2003, where those procurements are to facilitate the defense
against terrorism or biological or chemical attack against the United
States. Also, contracting officers acquiring biotechnology supplies or
biotechnology services, for use to facilitate the defense against
terrorism or biological or chemical attack against the United States,
may treat the supplies or services as commercial items.
Item III--Veterans Entrepreneurship and Small Business Development Act
of 1999 (FAR Case 2000-302)
This final rule finalizes two interim rules published previously at
65 FR 60542, October 11, 2000 (FAC 97-20), and 66 FR 53492, October 22,
2001 (FAC 2001-01), respectively. The first interim rule implemented
portions of the Veterans Entrepreneurship and Small Business
Development Act of 1999 (Pub. L. 106-50), which added a subcontracting
plan goal for veteran-owned small businesses and a 3 percent
Governmentwide agency goal for service-disabled veteran-owned small
businesses. The second interim rule implemented Section 803 of the
Small Business Reauthorization Act of 2000 (part of the Consolidated
Appropriations Act, 2001, Pub. L. 106-554), which added an additional
subcontracting plan goal for service-disabled veteran-owned small
business concerns. Both rules, and the correction published at 67 FR
1858, January 14, 2002 (FAC 2001-01 Correction), are adopted as final
without change.
Item IV--Trade Agreements Thresholds (FAR Case 2002-009)
This final rule amends FAR Subparts 22.15, 25.2, 25.4, 25.6, 25.11,
and the clauses at 52.213-4 and 52.222-19 to implement new dollar
thresholds for application of the Trade Agreements Act and North
American Free Trade Agreement as published by the U.S. Trade
Representative in the Federal Register at 67 FR 14763, March 27, 2002.
Contracting officers must review the new thresholds when acquiring
supplies, services, or construction in order to select the appropriate
clauses to implement the Buy American Act, trade agreements, and
sanctions of European Union country end products and services.
Item V--Payments Under Fixed-Price Construction Contracts (FAR Case
2001-012)
This final rule amends the FAR to clarify in the certification
language of the clause entitled Payments Under Fixed-Price Construction
Contracts that all payments due to subcontractors and suppliers have
been made by the prime contractor from previous progress payments
received from the Government. The rule is of special interest to
contracting officers that administer construction contracts.
Item VI--Technical Amendments
These amendments update sections and make editorial changes at FAR
22.1503, 36.606, and 52.232-16.
Dated: August 21, 2002.
Al Matera,
Director, Acquisition Policy Division.
[FR Doc. 02-21873 Filed 8-29-02; 8:45 am]
BILLING CODE 6820-EP-P