[Federal Register: July 26, 2000 (Volume 65, Number 144)]
[Rules and Regulations]
[Page 46051-46053]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26jy00-41]
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Part II
Department of Defense
General Services Administration
National Aeronautics and Space Administration
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48 CFR Ch. 1
Federal Acquisition Regulations (FAR); Final and Interim Rules
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Chapter 1
Federal Acquisition Circular 97-19; 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.
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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 (Councils) in this Federal
Acquisition Circular (FAC) 97-19. The Councils drafted these FAR rules
using plain language in accordance with the White House memorandum,
Plain Language in Government Writing, dated June 1, 1998. The Councils
wrote all new and revised text using plain language. A companion
document, the Small Entity Compliance Guide (SECG), follows this FAC.
The FAC, including the SECG, is available via the Internet at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=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 97-19 and
specific FAR case numbers. Interested parties may also visit our
website at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.arnet.gov/far.
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Item Subject FAR case Analyst
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I.............. Contract Bundling...... 1997-306 De Stefano.
(97-306)
II............. North American Industry 2000-604 Moss.
Classification System
(NAICS) (Interim).
III............ Liquidated Damages..... 1999-003 Moss.
IV............. Service Contract Act, 1998-605 Klein.
Commercial Item
Subcontracts.
V.............. Small Business 1999-012 Moss.
Competitiveness
Demonstration Program.
VI............. Construction Industry 1999-302 De Stefano.
Payment Protection Act
of 1999.
VII............ Deferred Research and 1999-013 Nelson.
Development (R&D)
Costs.
VIII........... Time-and-Materials or 1999-606 Klein.
Labor Hours.
IX............. Repeal of Reporting 2000-006 Klein.
Requirements under
Public Law 85-804.
X.............. Technical Amendments...
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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 97-19 amends the FAR as specified
below:
Item I--Contract Bundling (FAR Case 1997-306 (97-306))
This final rule converts the interim rule published as Item III of
FAC 97-15 to a final rule with minor changes. The rule amends the FAR
to implement Sections 411-417 of the Small Business Reauthorization Act
of 1997. Sections 411-417 amend Title 15 of the United States Code to
define ``contract bundling,'' and to require agencies to avoid
unnecessary bundling that precludes small business participation in the
performance of Federal contracts.
This rule affects all contracting officers that may combine
requirements that were previously awarded to a small business or
requirements for which a small business could have competed. In
accordance with the statute and Small Business Administration
regulations, agencies must establish procedures for processing bundled
requirements to ensure maximum small business participation in bundled
acquisitions. Specifically, agencies and contracting officers must--
Perform market research when bundled requirements are
anticipated;
Justify bundling in acquisition strategies;
Meet specific estimated benefit thresholds before bundling
requirements;
Assess the impact of bundling on small businesses;
Submit solicitations containing bundled requirements to
the Small Business Administration (SBA) procurement center
representatives for review; and
Include, in negotiated competitions for bundled
requirements, a source selection factor for the offerors' proposed use
of small businesses as subcontractors and their past performance in
meeting subcontracting goals.
Item II--North American Industry Classification System (NAICS) (FAR
Case 2000-604)
This interim rule revises the FAR to convert size standards and
other programs in the FAR that are currently based on the Standard
Industrial Classification (SIC) system to the North American Industry
Classification System (NAICS). NAICS is a new system that classifies
establishments according to how they conduct their economic activity.
It is a significant improvement over the SIC because it more accurately
identifies industries. Beginning October 1, 2000, NAICS will be used to
establish the size standards for acquisitions. In addition, the interim
rule converts the designated industry groups in FAR 19.1005 to NAICS
and requires agencies to report contract actions using the NAICS code
rather than the SIC code.
Item III--Liquidated Damages (FAR Case 1999-003)
This final rule clarifies coverage on liquidated damages. This rule
will make it easier for contracting officers to understand the policy
for administering liquidated damages. The only substantive change is at
FAR 11.501(d). The authority to approve reductions in or waivers to
liquidated damages was changed from the Comptroller General to the
Commissioner, Financial Management Service.
Item IV--Service Contract Act, Commercial Item Subcontracts (FAR
Case 1998-605)
This final rule deletes the Service Contract Act of 1965 from the
list of laws inapplicable to subcontracts for commercial items. FAR
12.504(a) contains this list.
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Item V--Small Business Competitiveness Demonstration Program (FAR
Case 1999-012)
This final rule converts the interim rule published as Item I of
FAC 97-16 to a final rule without change.
The rule amends FAR Part 19 to clarify language pertaining to the
Competitiveness Demonstration Program, consistent with revisions to the
Program that were required by the OFPP and SBA joint final policy
directive dated May 25, 1999. The rule revises FAR Subpart 19.10 to--
1. Advise the contracting officer to consider the 8(a) Program and
HUBZone Program when there is not a reasonable expectation that offers
will be received from two or more emerging small businesses; and
2. Add a new section 19.1006, Exclusions, to reflect the exclusions
of orders under the Federal Supply Schedule Program and contract awards
to educational and nonprofit institutions or governmental entities.
Item VI--Construction Industry Payment Protection Act of 1999 (FAR
Case 1999-302)
This final rule amends FAR 28.102-2 and the clauses at 52.228-13,
52.228-15, and 52.228-16 to implement the Construction Industry Payment
Protection (CIPP) Act of 1999. The CIPP Act amends the Miller Act to
provide that the amount of a payment bond must equal the total amount
payable by the terms of the contract, unless the contracting officer
determines that a payment bond in that amount is impractical. The final
rule also provides enhanced payment protection for Government contracts
not subject to the Miller Act. The contracting officer must determine
the appropriate amount of payment protection in each construction
contract that exceeds $25,000, and in any other contract that requires
a performance bond in accordance with FAR 28.103-2.
Item VII--Deferred Research and Development (R&D) Costs (FAR Case
1999-013)
This final rule amends the FAR by clarifying and simplifying the
``deferred research and development costs'' cost principle at FAR
31.205-48. The rule will only affect contracting officers that price
contracts using cost analysis, or that are required by a contract
clause to use cost principles for the determination, negotiation, or
allowance of contractor costs.
Item VIII--Time-and-Materials or Labor Hours (FAR Case 1999-606)
This final rule clarifies the requirements regarding changes to
time-and-materials and labor-hour contracts. The rule changes the
clause at FAR 52.243-3, Changes--Time-and-Materials or Labor-Hours, to
be consistent with Alternate II of the clause at FAR 52.243-1,
Changes--Fixed-Price. Alternate II is used in service contracts and
most of the work performed under time-and-materials or labor-hour
contracts also involves services.
Item IX--Repeal of Reporting Requirements under Public Law 85-804
(FAR Case 2000-006)
This final rule amends the FAR to implement paragraph 901(r)(1) of
the Federal Reports Elimination Act of 1998 (Pub. L. 105-362).
Paragraph 901(r)(1) repealed section 4 of Public Law 85-804 (50 U.S.C.
1434). Section 4 required each department and agency to report annually
to Congress any contract action in excess of $50,000 issued under the
authority of this law. The rule revises FAR 50.000 to update the
reference to Public Law 85-804 and eliminates the reporting
requirements at FAR Part 50.104. Agencies are no longer required to
submit to Congress annually a report of actions taken on requests for
relief under the authority of Public Law 85-804.
Item X--Technical Amendments
These amendments update references and make editorial changes at
sections 3.104-5, 4.803 and 22.400.
Dated: July 19, 2000.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Federal Acquisition Circular
Federal Acquisition Circular (FAC) 97-19 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.
All Federal Acquisition Regulation (FAR) changes and other
directive material contained in FAC 97-19 are effective [insert date 60
days after publication in the Federal Register], except for the
following items:
Items I, V, VI, and X are effective [insert date of publication in
the Federal Register].
Item IV is effective [insert date 30 days after publication in the
Federal Register].
Item II is effective October 1, 2000.
Each rule is applicable to solicitations issued on or after the
rule's effective date.
Dated: July 19, 2000.
Deidre A. Lee,
Director, Defense Procurement.
Federal Acquisition Circular
Dated: July 19, 2000.
David A. Drabkin,
Deputy Associate Administrator, Office of Acquisition Policy,
General Services Administration.
Federal Acquisition Circular
Dated: July 18, 2000.
R. Scott Thompson,
Acting Associate Administrator for Procurement, National Aeronautics
and Space Administration.
[FR Doc. 00-18667 Filed 7-25-00; 8:45 am]
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