[Federal Register Volume 60, Number 180 (Monday, September 18, 1995)]
[Rules and Regulations]
[Pages 48206-48208]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22775]




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Part II

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Chapter 1 and Parts 1, et al.



Federal Acquisition Regulation (FAR); Final Rules

  Federal Register / Vol. 60, No. 180 / Monday, September 18, 1995 / 
Rules and Regulations  

[[Page 48206]]


DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Chapter 1
[Federal Acquisition Circular 90-32]

Federal Acquisition Regulation; Introduction of Miscellaneous 
Amendments
AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Summary presentation of final rules.

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SUMMARY: This document serves to introduce the final rules which follow 
and which comprise Federal Acquisition Circular (FAC) 90-32. The 
Federal Acquisition Regulatory Council has agreed to issue FAC 90-32 to 
amend the Federal Acquisition Regulation (FAR).

DATES: For effective dates, see individual documents following this 
one.

FOR FURTHER INFORMATION CONTACT: The team leader or FAR Staff Analyst 
whose name appears in relation to each FAR case or subject area. For 
general information, contact the FAR Secretariat, Room 4037, GS 
Building, Washington, DC, 20405 (202) 501-4755. Please cite FAC 90-32 
and FAR case number(s).

SUPPLEMENTARY INFORMATION: Federal Acquisition Circular 90-32 amends 
the Federal Acquisition Regulation (FAR) as specified below:

------------------------------------------------------------------------
  Item          Subject              FAR case            Team leader    
------------------------------------------------------------------------
I.......  Truth in             94-720 & 94-721.....  Al Winston (703)   
           Negotiations Act                           602-2119.         
           and Related                                                  
           Changes.                                                     
II......  Protests, Disputes   94-730..............  Craig Hodge (703)  
           and Appeals.                               274-8940.         
III.....  Acquisition of       94-790..............  Lawrence Trowel    
           Commercial Items.                          (703) 695-3858.   
IV......  Whistleblower        94-803..............  Jules Rothlein     
           Protections for                            (703) 697-4349.   
           Contractor                                                   
           Employees (Ethics).                                          
V.......  Small Business.....  94-780..............  Victoria Moss (202)
                                                      501-4764.         
VI......  Publicizing          95-606..............  Ralph DeStefano    
           Contract Actions.                          (202) 501-1758.   
VII.....  Subcontractor        94-762..............  John Galbraith     
           Payments.                                  (703) 697-6710.   
VIII....  Reimbursement of     94-731..............  Craig Hodge (703)  
           Protest Costs.                             274-8940.         
------------------------------------------------------------------------

Case Summaries

    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.

Item I--Truth in Negotiations Act and Related Changes (FAR Cases 94-720 
and 94-721)

    This final rule is issued pursuant to the Federal Acquisition 
Streamlining Act of 1994 (FASA), Pub. L. 103-355 to implement those 
portions of FASA that make specific changes to the Truth in 
Negotiations Act (TINA) or that impact other areas of the FAR that 
affect contract pricing.
    This rule implements Sections 1201 through 1210 and Sections 1251 
and 1252 of the FASA. A new exception is added to the requirement for 
the submission of ``cost or pricing data'' for commercial items; the 
approval level for waivers is changed, and prohibitions are placed on 
acquiring ``cost or pricing data'' when an exception applies. The 
coverage includes a clear explanation of adequate price competition as 
required by the FASA.
    Coverage has been included that addresses (1) ``information other 
than cost or pricing data,'' (2) exceptions based on established 
catalog or market price, (3) interorganizational transfers of 
commercial items at price, and (4) price competition when only one 
offer has been received.
    The new policy also expands the exception based on adequate price 
competition and provides for a special exception for commercial items. 
A new section addressing ``information other than cost or pricing 
data'' is created and a Standard Form 1448 is provided for use by 
contractors.
    The new policy at FAR 15.804-1(b)(1)(ii) recognizes circumstances 
when it can be determined that adequate price competition exists even 
though only one offeror has responded to the Government``s requirement.
    In addition, this rule finalizes, with changes, the interim rule in 
FAC 90-22 that made TINA requirements for civilian agencies 
substantially the same as those for the Department of Defense 
(increasing the threshold for submission of ``cost or pricing data'' to 
$500,000 and adding penalties for defective pricing). Provisions were 
also included that increase the threshold for cost or pricing data 
submission every 5 years beginning October 1, 1995.
    Although the instruction to amend contracts without consideration 
to update the cost or pricing data threshold has been removed from the 
FAR, the statutory authority and requirement to update the threshold 
remain in effect. Accordingly, contracting officers shall, if requested 
by a prime contractor, modify contracts to change the threshold in the 
contract to the cost or pricing data threshold in paragraph 15.804-
2(a)(1), without requiring consideration. The contract modification 
shall be accomplished by inserting into the contract the current 
version of the clauses 52.215-23, Price Reduction for Defective Cost or 
Pricing Data--Modifications, and 52.215-25, Subcontractor Cost or 
Pricing Data-Modifications, or 52.215-24, Subcontractor Cost or Pricing 
Data, as applicable. These new contract clauses shall apply only to 
contract modifications and subcontracts for which agreement on price 
occurs after the contracting officer has inserted the new clauses.

Item II--Protests, Disputes, and Appeals (FAR Case 94-730)

    This final rule implements requirements of the Federal Acquisition 
Streamlining Act of 1994 pertaining to protests, disputes, and appeals.
    The primary changes included in this rule are new definitions of 
``day,'' ``filed,'' and ``protest.'' Most of the adjustments merely 
reflect current practice, except for the definition of ``day,'' which 
changes from a presumed ``working day'' to a presumed ``calendar day.'' 
Agencies are now clearly allowed to take corrective action to include 
payment of costs to the protester and are allowed to stay contract 
performance in the face of a likely protest. Both agency and GAO 
protests must now be filed within fourteen calendar days of discovery 
of protest grounds, instead of the former ten working days. There is 

[[Page 48207]]
also an explicit warning that, in the event of a conflict between the 
FAR and GAO protest procedure regulations, the GAO regulations govern. 
The period of time for submission of the agency administrative report 
has been adjusted from the former 25 working days to 35 calendar days. 
Agencies are required to prepare a protest file for prospective, non 
intervening offerors to review, and to suspend performance of the 
contract if the protest is filed within ten days of award or five days 
of debriefing, where the debriefing is required. GAO decisions are 
normally due out within 125 days, and attorney fees are generally 
capped at $150 an hour, except for small businesses.
    There is also an explicit statement that, in case of conflict with 
the FAR, GSBCA rules govern questions of GSBCA protest procedure. The 
GSBCA now has more GAO-like suspension standards and time periods. 
Agencies are required to reimburse the judgment fund for costs awarded 
the protester. Protest costs are limited at the GSBCA as they are with 
GAO protests, such as with the attorney fee cap. Settlements are now 
generally to be made public information.
    In the disputes area, the claims certification threshold begins at 
$100,000. Claims must be filed within six years of accrual, except for 
Government claims involving fraud. Small claims now reach disputes of 
$50,000, and accelerated claims have a threshold of $100,000.

Item III--Acquisition of Commercial Items (FAR Case 94-790)

    This final rule implements Title VIII of the Federal Acquisition 
Streamlining Act of 1994. The rule encourages the acquisition of 
commercial end items and components by Federal Government agencies as 
well as contractors and subcontractors at all levels. The most 
significant revisions are in the following FAR parts:
    Part 2 has been amended to incorporate the definitions of 
``commercial item,'' ``component,'' ``commercial component'' and ``non 
developmental item.''
    Part 10 has been completely revised by establishing the requirement 
for market research as the first step in the acquisition process. 
Market research is an essential element in the later steps of 
describing the agency's need, developing the overall acquisition 
strategy and identifying terms and conditions unique to the item being 
acquired.
    Part 11 has been completely revised to address the process of 
describing agency needs. It contains some of the language on 
specifications and standards formerly found in FAR Part 10, but takes a 
more streamlined approach. In addition, the revised Part 11 establishes 
the Government's order of precedence for requirements documents and 
addresses the concept of market acceptance. Part 11 also contains 
coverage on Delivery or Performance Schedules, Liquidated Damages, 
Priorities and Allocations, and Variations in Quantity taken from the 
current Part 12 with only minor editorial revisions. The current Part 
12 coverage on Suspension of Work, Stop Work Orders, and Government 
Delay of Work has been moved to Subpart 42.13 with only minor editorial 
revisions.
    Part 12 has been completely revised to address the acquisition of 
commercial items.

--Subpart 12.1 states that the policies in the revised Part 12 are 
applicable to all acquisitions of commercial items above the micro-
purchase threshold. The requirements of other parts of the FAR apply to 
commercial items to the extent they are not inconsistent with Part 12.
--Subpart 12.2 identifies special requirements for the acquisition of 
commercial items.
--Subpart 12.3 establishes standard provisions and clauses for use in 
the acquisition of commercial items. It is essential that contracting 
officers be allowed to tailor solicitations and contracts to meet the 
needs of the particular acquisition and the marketplace for that item. 
Subpart 12.3 gives contracting officers broad authority to tailor 
solicitations and contracts, a practice itself that is consistent with 
commercial practices.
--A new form, the Standard Form (SF) 1449, Solicitation/Contract/Order 
for Commercial Items, is established. The most significant element is 
the addition of acceptance blocks at the bottom of the form that will 
allow suppliers of commercial items to utilize the SF 1449 to document 
receipt of the supplies or services by the Government, avoiding the 
need for preparation of separate receipt/acceptance forms.
--Subpart 12.5 identifies the applicability of certain laws to the 
acquisition of commercial items. It contains the list of laws 
determined to be inapplicable to executive agency prime contracts for 
acquisition of commercial items. This list has been expanded to also 
include those laws that have been revised in some manner to modify 
their applicability to commercial items. Agency unique laws determined 
to be inapplicable to prime contracts are not addressed in this rule 
and may be addressed separately by the respective agencies. This 
subpart also contains the list of laws determined to be inapplicable to 
subcontracts for commercial items. This list has been expanded to also 
include those laws that have been revised in some manner to modify 
their applicability to subcontracts for commercial items.
--Subpart 12.6 identifies two streamlined procedures for the evaluation 
and solicitation of contracts for commercial items. These procedures 
may be used at the discretion of the contracting officer.

    Part 52 has been amended to include several new provisions and 
clauses to be used in all solicitations and contracts for the 
acquisition of commercial items:

--Section 52.212-1, Instructions to Offerors--Commercial Items, 
contains solicitation instructions for the acquisition of commercial 
items.
--Section 52.212-2, Evaluation--Commercial Items, contains evaluation 
information that has been simplified and tailored to meet the 
requirements of commercial items.
--Section 52.212-3, Offeror Representations and Certifications--
Commercial Items, includes, in one provision, the certifications and 
representations required to comply with laws or Executive orders.
--Section 52.212-4, Contract Terms and Conditions--Commercial Items, 
contains the terms and conditions believed to be consistent with 
customary commercial practice.
--Section 52.212-5, Contract Terms and Conditions Required to Implement 
Statutes or Executive Orders--Commercial Items, implements provisions 
of law or Executive Orders applicable to Government acquisitions of 
commercial items or commercial components. The clause at 52.212-5 
represents the minimum number of clauses required to implement statutes 
and Executive orders. Certain clauses may apply depending upon the 
circumstances; the contracting officer will indicate which of these 
clauses apply for the specific acquisition.
--Section 52.244-6, Subcontracts for Commercial Items and Commercial 
Components, implements the preference for the acquisition of commercial 
items or nondevelopmental items as components of items to be supplied 
under Federal contracts. This clause will be used in all solicitations 
and contracts for supplies and services other than commercial items. 

[[Page 48208]]


Item IV--Whistleblower Protections for Contractor Employees (Ethics) 
(FAR Case 94-803)

    The final rule published as Item III of FAC 90-30 added FAR Subpart 
3.9, Whistleblower Protections for Contractor Employees, to implement 
Sections 6005 and 6006 of the Federal Acquisition Streamlining Act of 
1994.
    The rule contained an effective date of September 19, 1995, but did 
not discuss the subject of applicability. The rule applies to all 
contracts in existence as of September 19, 1995, for reprisals to 
Government contractor employees occurring on or after that date.
    Some existing Department of Defense contracts contain a clause 
addressing whistleblower protections based on a prior statute, 10 
U.S.C. 2409a. The remedies provided by FAR Subpart 3.9 do not apply to 
contracts otherwise covered by the provisions of 10 U.S.C. 2409a.

Item V--Small Business (FAR Case 94-780)

    This final rule implements Sections 7101(a) 7106, and 10004 of the 
Federal Acquisition Streamlining Act (FASA) of 1994. Section 7101(a) of 
FASA deletes Sections 15(e) and (f) of the Small Business Act (15 
U.S.C. 631, et seq.). Those sections established the priority for award 
of set-asides and provided the statutory basis for a procurement 
preference for concerns located in Labor Surplus Areas (LSA). Based on 
this deletion, this rule removes the LSA set-aside program and LSA 
subcontracting program from the FAR.
    Section 7106 of FASA revises Sections 8 and 15 of the Small 
Business Act to accommodate a Governmentwide goal of 5 percent for 
women-owned small businesses. This rule deletes existing, separate 
coverage relating to women-owned businesses and revises existing 
coverage to place women-owned small businesses on an equal footing with 
small disadvantaged businesses. In connection with this revision, the 
Standard Forms 294 and 295 are revised and streamlined.
    Section 10004 of FASA, which requires the collection of specified 
data through the Federal Procurement Data System, is being implemented 
by FAR case 94-701. This rule augments that coverage by providing a 
solicitation provision to collect the information on women-owned 
businesses as required by that FAR case.

Item VI--Publicizing Contract Actions (FAR Case 95-606)

    This final rule amends FAR sections 5.207(b)(4) and (b)(6). The 
amendment deletes the requirement for the Federal Information 
Processing Standard (FIPS) Number in Commerce Business Daily synopses 
and, in lieu thereof, requests Government Printing Office (GPO) Billing 
Account Code Information.

Item VII--Subcontractor Payments (FAR Case 94-762)

    This final rule implements Sections 2091 and 8105 of the Federal 
Acquisition Streamlining Act of 1994. The rule amends FAR Parts 28, 32, 
and 52 to reflect: statutory requirements related to providing 
information to subcontractors and prospective subcontractors concerning 
bonds under the Miller Act; that while the Government does not have 
privity with subcontractors, and does not serve as a collection agent 
for them, the Government properly has an interest in the financial 
capability, managerial competence, and business ethics of companies 
doing business with the Government; that the contracting officer should 
be informed about both sides of the argument in a dispute between the 
prime contractor and its subcontractor in order to exercise good 
business judgment; and finally, when an assertion raises a creditable 
question concerning the accuracy of a contractor certification, the 
contracting officer must decide whether the certification is inaccurate 
in any material respect, and, if so, bring the matter to the attention 
of the appropriate authorities, in accordance with agency regulations.

Item VIII--Reimbursement of Protest Costs (FAR Case 94-731)

    This final rule implements Sections 1016, 1403, and 1435 of the 
Federal Acquisition Streamlining Act of 1994. The primary effect of 
this rule is to allow the Government to seek reimbursement for protest 
costs it has paid a protester, such as the protester's attorney fees, 
where that protest has been sustained based upon the awardee's 
misrepresentation. In addition to any other remedies available, the 
Government may collect this debt by offsetting the amount against any 
payment due the awardee under any Government contract the awardee might 
have.

    Dated: September 7, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal 
Acquisition Streamlining Act of 1994.
Federal Acquisition Circular

[Number 90-32]

    Federal Acquisition Circular (FAC) 90-32 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 below, all Federal Acquisition 
Regulation (FAR) and other directive material contained in FAC 90-32 is 
effective October 1, 1995. FAC Items I, and V through VIII, are 
applicable for solicitations issued on or after October 1, 1995.
    Item II--Where this rule repeats a GSBCA rule that went into effect 
earlier, the date of the GSBCA rule and its applicability provision 
prevail; otherwise, this rule is applicable to protests or claims filed 
on or after October 1, 1995.
    Item III--For solicitations issued on or after October 1, 1995: Use 
of the new policies, provisions and clauses is optional for 
solicitations issued before December 1, 1995, and mandatory for 
solicitations issued on or after December 1, 1995.
    Item IV--Effective September 19, 1995.

    Dated: September 7, 1995.
Roland A. Hassebrock,
Col, USAF Director, Defense Procurement (Acting).

    Dated: September 6, 1995.
Ida M. Ustad,
Associate Administrator for Acquisition Policy, General Services 
Administration.

    Dated: September 7, 1995.
Tom Luedtke,
Deputy Associate Administrator for Procurement, National Aeronautics 
and Space Administration.
[FR Doc. 95-22775 Filed 9-15-95; 8:45 am]
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