[Federal Register: June 8, 2005 (Volume 70, Number 109)]
[Rules and Regulations]
[Page 33653-33655]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08jn05-28]
[[Page 33653]]
-----------------------------------------------------------------------
Part V
Department of Defense
General Services Administration
National Aeronautics and Space Administration
-----------------------------------------------------------------------
48 CFR Chapter 1, Part 2, et al.
Federal Acquisition Circular 2005-04; Federal Acquisition Regulations;
Interim and Final Rules
[[Page 33654]]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Chapter 1
Federal Acquisition Circular 2005-04; Introduction
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Summary presentation of interim and final rules.
-----------------------------------------------------------------------
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) 2005-04. 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.acqnet.gov/far.
DATES: For effective dates and comment dates, see separate documents
which follow.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, at (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 2005-04 and specific FAR case number(s). Interested parties
may also visit our Web site at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.acqnet.gov/far.
----------------------------------------------------------------------------------------------------------------
Item Subject FAR case Analyst
----------------------------------------------------------------------------------------------------------------
I.............. Notification of Employee Rights Concerning 2004-010 Marshall.
Payment of Union Dues or Fees.
II............. Telecommuting for Federal Contractors........ 2003-025 Zaffos.
III............ Incentives for Use of Performance-Based 2004-004 Wise.
Contracting for Services.
IV............. Submission of Cost or Pricing Data on 2004-035 Olson.
Noncommercial Modifications of Commercial
Items (Interim).
V.............. Applicability of SDB and HUBZone Price 2003-015 Marshall.
Evaluation Factor.
VI............. Labor Standards for Contracts Involving 2002-004 Nelson.
Construction.
VII............ Deferred Compensation and Postretirement 2001-031 Olson.
Benefits Other Than Pensions.
VIII........... Gains and Losses............................. 2004-005 Olson.
----------------------------------------------------------------------------------------------------------------
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 2005-04 amends the FAR as specified below:
Item I--Notification of Employee Rights Concerning Payment of Union
Dues or Fees (FAR Case 2004-010)
This final rule adopts, without change, the interim rule published
in the Federal Register at 69 FR 76352, December 20, 2004, and issued
as Item IV of FAC 2001-26. It amends FAR parts 2, 22, and 52 to
implement Executive Order (E.O.) 13201, Notification of Employee Rights
Concerning Payment of Union Dues or Fees, and Department of Labor
regulations at 29 CFR 470. The rule requires Government contractors and
subcontractors to post notices informing their employees that under
Federal law they cannot be required to join a union or maintain
membership in a union to retain their jobs. The required notice also
advises employees who are not union members that they can object to the
use of their union dues for certain purposes. This rule applies to
Federal contractors and subcontractors with contracts or subcontracts
that exceed the simplified acquisition threshold, unless covered by an
exemption granted by the Secretary of Labor.
Item II--Telecommuting for Federal Contractors (FAR Case 2003-025)
This rule finalizes without changes the interim rule published in
the Federal Register at 69 FR 59701, October 5, 2004, and issued as
Item III of FAC 2001-025. This final rule implements Section 1428 of
the Services Acquisition Reform Act of 2003 (Title XIV of Public Law
108-136), which prohibits agencies from including a requirement in a
solicitation that precludes an offeror from permitting its employees to
telecommute or, when telecommuting is not precluded, from unfavorably
evaluating an offeror's proposal that includes telecommuting unless it
would adversely affect agency requirements, such as security.
Contracting officers awarding service contracts should familiarize
themselves with this rule.
Item III--Incentives for Use of Performance-Based Contracting for
Services (FAR Case 2004-004)
This final rule amends the Federal Acquisition Regulation (FAR) to
provide Governmentwide authority to treat performance-based contracts
or task orders for services as commercial items, if certain conditions
are met. Agencies must report on the use of this authority. This change
implements sections 1431 and 1433 of the National Defense Authorization
Act for Fiscal Year 2004 (Pub. L. 108-136) and is intended to promote
the use of performance-based contracting.
Item IV--Submission of Cost or Pricing Data on Noncommercial
Modifications of Commercial Items (FAR Case 2004-035)
This interim rule implements an amendment to 10 U.S.C. 2306a. The
change requires that the exception from the requirement to obtain
certified cost or pricing data for a commercial item does not apply to
noncommercial modifications of a commercial item that are expected to
cost, in the aggregate, more than $500,000 or 5 percent of the total
price of the contract, whichever is greater. Section 818 applies to
offers submitted, and to modifications of contracts or subcontracts
made, on or after June 1, 2005. This new policy applies only to
acquisitions funded by DoD, NASA, or the Coast Guard, since the statute
amends 10 U.S.C. 2306a, which only applies to DoD, NASA, and the Coast
Guard. The new language does not apply to acquisitions funded by other
than DoD, NASA, or the Coast Guard because Section 818 did not amend 41
U.S.C. 254b, which prohibits obtaining cost or pricing data for
commercial items. However, the new policy applies to contracts awarded
or task or delivery orders placed on behalf of DoD, NASA, or the Coast
Guard by an official of the United States outside of those agencies,
because the statutory requirement of Section 818 applies to the funds
provided by DoD, NASA, or the Coast Guard.
[[Page 33655]]
Item V--Applicability of SDB and HUBZone Price Evaluation Factor (FAR
Case 2003-015)
This final rule removes some of the exceptions to the Small
Disadvantaged Business and HUBZone preference programs. The contracting
officer will now apply a price evaluation adjustment to offers of
eligible products in acquisitions subject to the Trade Agreements Act.
This rule will have a beneficial impact on all domestic concerns,
especially small entities that are small disadvantaged business
concerns or HUBZone small business concerns.
Item VI--Labor Standards for Contracts Involving Construction (FAR Case
2002-004)
This final rule implements in the FAR the DoL rule revising the
terms ``construction, prosecution, completion or repair'' (29 CFR
5.2(j)) and ``site of the work'' (29 CFR 5.2(l)). In addition, the
Councils have clarified several definitions relating to labor standards
for contracts involving construction and made requirements for flow
down of labor clauses more precise.
The most significant impact of this rule is that contractors must
pay Davis-Bacon Act wages at a secondary site of the work, if a
significant portion of the work is to be constructed at that site and
the site meets the other criteria specified in the rule. When
transporting portions of the building or work between the secondary
site of the work and the primary site of the work, the wages for the
primary site of the work are applicable. The contracting officer must
coordinate with the Department of Labor when there is any uncertainty
as to whether a work site is a secondary site of the work.
Item VII--Deferred Compensation and Postretirement Benefits Other Than
Pensions (FAR Case 2001-031)
This final rule amends the FAR by revising paragraph (k), Deferred
compensation other than pensions, and paragraph (o), Postretirement
benefits other than pensions, of FAR 31.205-6, Compensation for
personal services, cost principle. Changes to paragraph (k) include:
deletion of language that duplicates definitions provided in FAR
31.001, elimination of obsolete coverage, and use of terminology
consistent with Cost Accounting Standards. Changes to paragraph (o)
include: moving and revising language in (o)(3) through (o)(5) to
(o)(2)(iii) because these requirements only apply to accrual costing
other than terminal funding. In addition, new coverage is added to the
related contract clause at FAR 52.215-18, Reversion or Adjustment of
Plans for Postretirement Benefits (PRB) Other Than Pensions, specifying
the method of recovery of refunds and credits. The rule revises the
cost principle and contract clause by improving clarity and structure,
and removing unnecessary and duplicative language.
The case was initiated as a result of comments and recommendations
received from industry and Government representatives during a series
of public meetings. This rule is of particular interest to contractors
and contracting officers who use cost analysis to price contracts and
modifications, and who determine or negotiate reasonable costs in
accordance with a clause of a contract, e.g., price revision of fixed-
price incentive contracts, terminated contracts, or indirect cost
rates.
Item VIII--Gains and Losses (FAR Case 2004-005)
This final rule amends FAR 31.205-16 to address the timing of the
gain or loss recognition of sale and leaseback arrangements of
contractor depreciable property or other capital assets. The final rule
defines the disposition date for a sale leaseback arrangement as the
date the contractor begins to incur an obligation for lease or rental
costs. Contracting officers, auditors, and contractors with
responsibilities related to allowable cost determinations involving
sale and leaseback arrangements of contractor depreciable property or
other capital assets will be impacted by new policies governing that
area.
Dated: May 27, 2005.
Julia B. Wise,
Director, Contract Policy Division.
Federal Acquisition Circular
Federal Acquisition Circular (FAC) 2005-04 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 2005-04 is
effective July 8, 2005, except for Items I, II, III, and IV, which are
effective June 8, 2005.
Dated: May 26, 2005.
Vincent J. Feck,
Lt Col, Acting Director, Defense Procurement and Acquisition Policy.
Dated: May 27, 2005.
David A. Drabkin,
Senior Procurement Executive, Office of the Chief Acquisition Officer,
General Services Administration.
Dated: May 26, 2005.
Scott Thompson,
Acting Assistant Administrator for Procurement, National Aeronautics
and Space Administration.
[FR Doc. 05-11179 Filed 6-7-05; 8:45 am]