FAC 97-25.html

[Federal Register: May 2, 2001 (Volume 66, Number 85)]
[Rules and Regulations]
[Page 22081-22082]
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Part III

Department of Defense

General Services Administration

National Aeronautics and Space Administration

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48 CFR Chapter 1, et al.

Federal Acquisition Regulations; Interim Rules

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

Federal Acquisition Circular 97-25; Introduction

AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Summary presentation of interim rules.

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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) 97-25. 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 97-25 and
specific FAR case number(s). Interested parties may also visit our
website at http://www.arnet.gov/far.

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Item Subject FAR case Analyst
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I............. Preference for Performance- 2000-307 Wise.
Based Contracting.
II............ Contractor Personnel in the 2000-609 Nelson.
Procurement of Information
Technology Services.
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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.
Federal Acquisition Circular 97-25 amends the FAR as specified
below:

ITEM I--Preference for Performance-Based Contracting (FAR Case
2000-307)

This interim rule amends FAR 2.101, Definitions, and 37.102,
Policy, to implement Section 821 of the Floyd D. Spence National
Defense Authorization Act for Fiscal Year 2001 (Public Law 106-398).
The rule affects contracting officers that buy services by explicitly
establishing a preference for performance-based contracts or task
orders.

Item II--Contractor Personnel in the Procurement of Information
Technology Services (FAR Case 2000-609)

This interim rule adds FAR 39.104 to implement Section 813 of the
Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001
(Public Law 106-398). Section 813 prohibits the use of minimum
experience or education requirements for contractor personnel in
solicitations for the acquisition of information technology services,
unless--
1. The contracting officer first determines that the needs of the
agency cannot be met without such requirement; or
2. The needs of the agency require the use of a type of contract
other than a performance-based contract.

Dated: April 27, 2001.
Al Matera,
Director, Acquisition Policy Division.

Federal Acquisition Circular

Federal Acquisition Circular (FAC) 97-25 is issued under the
authority of the Secretary of Defense, the Administrator of General
Services, and the Administration for the National Aeronautics and
Space Administration.
All Federal Acquisition Regulation (FAR) changes and other
directive materal contained in FAC 97-25 are effective May 2, 2001.

April 5, 2001.

David A. Drabkin,
Deputy Associate Administrator, Office of Acquisition Policy,
General Services Administration.

Dated: April 25, 2001.

Deidre A. Lee,
Director, Defense Procurement.

April 6, 2001.

Tom Luedtke,
Associate Administrator for Procurement, National Aereonautics and
Space Administration.

[FR Doc. 01-11007 Filed 5-1-01; 8:45 am]
BILLING CODE 6820-EP-U
[Federal Register: May 2, 2001 (Volume 66, Number 85)]
[Rules and Regulations]
[Page 22082-22084]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02my01-19]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2 and 37

[FAC 97-25; FAR Case 2000-307; Item I]
RIN 9000-AJ12

Federal Acquisition Regulation; Preference for Performance-Based
Contracting

AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

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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 821 of the Floyd D. Spence National Defense Authorization Act
for Fiscal Year 2001. The FAR rule explicitly establishes a preference
for performance-based contracting when acquiring services.

DATES: Effective Date: May 2, 2001.
Comment Date: Interested parties should submit comments to the FAR
Secretariat at the address shown below on or before July 2, 2001 to be
considered in the formulation of a final rule.

ADDRESSES: Submit written comments to: General Services Administration,
FAR Secretariat (MVP), 1800 F Street,

[[Page 22083]]

NW, Room 4035, Attn: Ms. Laurie Duarte, Washington, DC 20405.
Submit electronic comments via the Internet to: farcase.2000-
307@gsa.gov.
Please submit comments only and cite FAC 97-25, FAR case 2000-307
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. Julia Wise, Procurement Analyst, at (202) 208-
1168. Please cite FAC 97-25, FAR case 2000-307.

SUPPLEMENTARY INFORMATION:

A. Background

Section 821(a) of the Floyd D. Spence National Defense
Authorization Act for Fiscal Year 2001 (Public Law 106-398)
establishes, Governmentwide, the following order of precedence when
acquiring services--
1. A firm-fixed-price performance-based contract or task order.
2. A performance-based contract or task order that is not firm-
fixed-price.
3. A contract or task order that is not performance-based.
Section 821(e)(1) provides a definition for ``performance-based''
that applies to Section 821(a): ``The term ``performance-based,'' with
respect to a contract, a task order, or contracting means that the
contract, task order, or contracting, respectively, includes the use of
performance work statements that set forth contract requirements in
clear, specific, and objective terms with measurable outcomes.''
This interim FAR rule--
1. Moves the existing definition ``performance-based contracting''
at FAR 37.101 to FAR 2.101, Definitions, and revises it to include the
substance of the Section 821(e) definition; and
2. Revises FAR 37.102, Policy, to explicitly state that
performance-based contracting is the preferred method for acquiring
services and to enumerate the order of precedence established by
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 interim rule is not expected to 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
does not impose a new policy requirement on small entities. The FAR
currently promotes the use of performance-based service contracting and
the use of firm-fixed-price type of contracts and task orders when it
is appropriate to do so. For example, in the current FAR--
1. Paragraph (a) of 37.102, policy, states ``Agencies shall use
performance-based contracting methods * * * to the maximum extent
practicable, for the acquisition of services. * * *''
2. Subpart 37.6, Performance-Based Contracting, exclusively
addresses performance-based contracting; and
3. Subpart 16.1, Selecting Contract Types, addresses a preference,
under certain conditions, for a firm-fixed-price type of contract that
best utilizes the basic profit motive of business enterprise.
Therefore, an Initial Regulatory Flexibility Analysis has not been
performed. The Councils will consider comments from small entities
concerning the affected FAR Parts 2 and 37 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 97-25, FAR case 2000-307), 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. The Councils
have been tasked with publishing an interim rule to implement Section
821 of the Floyd D. Spence National Defense Authorization Act for
Fiscal Year 2001 (Public Law 106-398), which is effective 180 days
after the date of enactment (October 30, 2000) of Public Law 106-398.
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 and 37

Government procurement.

Dated: April 27, 2001.
Al Matera,
Director, Acquisition Policy Division.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 2 and 37 as set
forth below:
1. The authority citation for 48 CFR parts 2 and 37 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
definition ``Performance-based contracting'' to read as follows:

2.101 Definitions.

* * * * *
(b) * * *
Performance-based contracting means structuring all aspects of an
acquisition around the purpose of the work to be performed with the
contract requirements set forth in clear, specific, and objective terms
with measurable outcomes as opposed to either the manner by which the
work is to be performed or broad and imprecise statements of work.
* * * * *

PART 37--SERVICE CONTRACTING

37.101 [Amended]

3. Amend section 37.101 by removing the definition ``Performance-
based contracting.''

4. Amend section 37.102 by revising paragraph (a) to read as
follows:

37.102 Policy.

(a) Performance-based contracting (see Subpart 37.6) is the
preferred method for acquiring services (Public Law 106-398, section
821). When acquiring services, including those acquired under supply
contracts, agencies must--
(1) Use performance-based contracting methods to the maximum extent
practicable, except for--
(i) Architect-engineer services acquired in accordance with 40
U.S.C. 541-544 (see part 36);
(ii) Construction (see part 36);
(iii) Utility services (see part 41); or
(iv) Services that are incidental to supply purchases; and
(2) Use the following order of precedence (Public Law 106-398,
section 821(a));
(i) A firm-fixed price performance-based contract or task order.

[[Page 22084]]

(ii) A performance-based contract or task order that is not firm-
fixed price.
(iii) A contract or task order that is not performance-based.
* * * * *
[FR Doc. 01-11008 Filed 5-1-01; 8:45 am]
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[Federal Register: May 2, 2001 (Volume 66, Number 85)]
[Rules and Regulations]
[Page 22084-22085]
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[DOCID:fr02my01-20]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 39

[FAC 97-25; FAR Case 2000-609; Item II]
RIN 9000-AJ11

Federal Acquisition Regulation; Contractor Personnel in the
Procurement of Information Technology Services

AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

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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 813 of the Floyd D. Spence National Defense Authorization Act
for Fiscal Year 2001. The Act requires that the FAR be amended to
address the use, in the procurement of information technology services,
of requirements regarding the experience and education of contractor
personnel.

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 to: farcase.2000-
609@gsa.gov.
Please submit comments only and cite FAC 97-25, FAR case 2000-609
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. Linda Nelson, Procurement Analyst, at (202) 501-
1900. Please cite FAC 97-25, FAR case 2000-609.

SUPPLEMENTARY INFORMATION:

A. Background

This interim rule amends the FAR to implement Section 813 of the
Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001
(Public Law 106-398). The Act prohibits the use of minimum experience
or education requirements for contractor personnel in solicitations for
the acquisition of information technology services, unless--
1. The contracting officer first determines that the needs of the
agency cannot be met without such requirement; or
2. The needs of the agency require the use of a type of contract
other than a performance-based contract.
This interim rule implements the Act by adding a new section to
Subpart 39.1 to implement Section 813 of the 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 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 it will make it easier
for them to hire employees to work on information technology service
contracts, as well as increase their business opportunities in
obtaining Government contracts. Therefore, we have prepared an Initial
Regulatory Flexibility Analysis that is summarized as follows:

The interim rule amends FAR Part 39 to implement Section 813 of
the Floyd D. Spence National Defense Authorization Act for Fiscal
Year 2001 (Public Law 106-398). The Act requires that the Federal
Acquisition Regulation be revised to address the use, in the
procurement of information technology services, of requirements
regarding the experience and education of contractor personnel. The
rule prohibits the use of minimum experience or education
requirements for contractor personnel in solicitations for the
acquisition of information technology services, unless the
contracting officer first determines the needs of the agency cannot
be met without that requirement; or the needs of the agency require
the use of a type of contract other than a performance-based
contract. The interim rule will apply to all large and small
entities that seek award of Federal information service contracts.
The rule should have a positive economic impact on small businesses
because it will make it easier for them to hire employees to work on
information technology service contracts, as well as increase their
business opportunities in obtaining Federal contracts.

The FAR Secretariat has submitted a copy of the IRFA 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 Part
39 in accordance with 5 U.S.C. 610. Submit such comments separately and
cite 5 U.S.C. 601, et seq. (FAC 97-25, FAR case 2000-609), in
correspondence.

C. Paperwork Reduction Act

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 in order to implement section 813 of the Floyd D. Spence
National Defense Authorization Act for Fiscal Year 2001 (Public Law
106-398). The Act requires that the FAR be amended within 180 days of
enactment; enactment was on October 30, 2000. 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 Part 39

Government procurement.

Dated: April 27, 2001.
Al Matera,
Director, Acquisition Policy Division.

Therefore, DoD, GSA, and NASA amend 48 CFR part 39 as set forth
below:

PART 39--ACQUISITION OF INFORMATION TECHNOLOGY

1. The authority citation for 48 CFR part 39 continues to read as
follows:

[[Page 22085]]

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).

2. Add Sec. 39.104 to read as follows:

39.104 Information technology services.

When acquiring information technology services, solicitations must
not describe any minimum experience or educational requirement for
proposed contractor personnel unless the contracting officer determines
that the needs of the agency--
(a) Cannot be met without that requirement; or
(b) Require the use of other than a performance-based contract (see
subpart 37.6).

[FR Doc. 01-11009 Filed 5-1-01; 8:45 am]
BILLING CODE 6820-EP-M

[Federal Register: May 2, 2001 (Volume 66, Number 85)]
[Rules and Regulations]
[Page 22085]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02my01-21]

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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.

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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. It consists of a summary of rules appearing in Federal
Acquisition Circular (FAC) 97-25 which amends 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
97-25 which precedes this document. 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.

SUPPLEMENTARY INFORMATION:

List of Rules in FAC 97-25
----------------------------------------------------------------------------------------------------------------
Item Subject FAR case Analyst
----------------------------------------------------------------------------------------------------------------
I...................................... Preference for Performance- 2000-307 Wise.
Based Contracting.
II..................................... Contractor Personnel in 2000-609 Nelson.
the Procurement of
Information Technology
Services.
----------------------------------------------------------------------------------------------------------------

Item I--Preference for Performance-Based Contracting (FAR Case
2000-307)

This interim rule amends FAR 2.101, Definitions, and 37.102,
Policy, to implement section 821 of the Floyd D. Spence National
Defense Authorization Act for Fiscal Year 2001 (Public Law 106-398).
The rule affects contracting officers that buy services by explicitly
establishing a preference for performance-based contracts or task
orders.

Item II--Contractor Personnel in the Procurement of Information
Technology Services (FAR Case 2000-609)

Dated: April 27, 2001.
Al Matera,
Director, Acquisition Policy Division.
[FR Doc. 01-11010 Filed 5-1-01; 8:45 am]
BILLING CODE 6820-EP-U