[Federal Register Volume 60, Number 186 (Tuesday, September 26, 1995)]
[Rules and Regulations]
[Pages 49706-49707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23867]




[[Page 49705]]

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Part III

Department of Defense

General Services Administration

National Aeronautics and Space Administration
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48 CFR Ch. I and Part 1, et al.



Federal Acquisition Regulation Amendments; Interim and Final Rules

  Federal Register / Vol. 60, No. 186 / Tuesday, September 26, 1995 / 
Rules and Regulations   

[[Page 49706]]


DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter I

[Federal Acquisition Circular 90-33]


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) 90-33. The 
Federal Acquisition Regulatory Council has agreed to issue FAC 90-33 to 
amend the Federal Acquisition Regulation (FAR).

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

FOR FURTHER INFORMATION CONTACT: The individual 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 90-33 and FAR case number(s).

SUPPLEMENTARY INFORMATION: Federal Acquisition Circular 90-33 amends 
the Federal Acquisition Regulation (FAR) as specified below:

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      Item-                       Subject                   FAR case                 Contact point              
----------------------------------------------------------------------------------------------------------------
I...............  Contract Financing.....................      94-764  John Galbraith, (703) 697-6710.          
II..............  Special Contracting Methods............      94-710  Ed McAndrew, (202) 501-1474.             
III-............  Task and Delivery Order Contracts......      94-711  Ed McAndrew, (202) 501-1474.             
IV..............  Fraud Remedies-........................      94-765  John Galbraith, (703) 697-6710.          
V...............  Assignment of Claims...................      94-761  John Galbraith, (703) 697-6710.          
N/A-............  Information Item--Cost or Pricing Data         N/A-  C. Allen Olson, (202) 501-0692.          
                   Threshold.                                                                                   
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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--Contract Financing (FAR Case 94-764)

    This final rule implements sections 2001 and 2051 of the Federal 
Acquisition Streamlining Act of 1994 (Pub. L. 103-355) (the Act). 
Sections 2001 and 2051 substantially changed the statutory authorities 
for Government financing of contracts. The Government is now authorized 
to provide contract financing that is appropriate or customary in the 
commercial marketplace for purchases of commercial items. The 
Government is also authorized to provide contract financing for non-
commercial items, on the basis of measurements of the contractor's 
actual performance on the contract.
    To implement these changes, the FAR has been amended by revising 
sections 32.000 and 32.001 and Subparts 32.1, 32.4, 32.5, and 42.3; by 
adding new sections 32.002 through 32.005 and Subparts 32.2 and 32.10; 
and by adding new clauses to 52.232.
    The statutory changes create a fundamental distinction between 
financing of purchases of commercial and non-commercial items. As a 
result, the subparts of Part 32, Contract Financing, fall into three 
logical categories:

--Subparts applicable to both commercial and non-commercial financing;
--Subparts applicable to only commercial financing; and
--Subparts applicable to only non-commercial financing.

The specific subparts in each category are identified at 32.002, 
Applicability of Subparts.
    Sections 32.000 and 32.005 now contain the general policy and 
guidance which is applicable to Government contract financing of both 
commercial and non-commercial items.
    Subpart 32.1, Non-commercial Item Purchase Financing, now contains 
the general policy and guidance applicable to non-commercial purchases. 
The content of this subpart reflects existing policy and guidance that 
previously appeared in other locations in Part 32. These policies have 
been moved to Subpart 32.1 to give them general applicability to all 
forms of financing of non-commercial items.
    Subpart 32.2, Commercial Item Purchase Financing, contains the 
policy and guidance applicable to contract financing of commercial 
purchases. This subpart is wholly new. The Act places Government 
financing of commercial purchases on a different statutory basis than 
for non-commercial purchases. As a result, the new subpart provides 
several alternative procedures for establishing contract financing 
terms for commercial items. The new subpart also provides standard 
terms for use by contracting officers in establishing financing for 
contracts.
    The installment payment clause at 52.232-30 permits contracting 
officers to incorporate financing into contracts for commercial items 
without any administrative effort beyond incorporation of the clause.
    Subpart 32.4 has been renamed ``Advanced Payments for Non-
Commercial Items'' in order to reduce the confusion between this 
financing mechanism and commercial advance payments under Subpart 32.2. 
Subpart 32.4 does not apply to commercial advance payments.
    Subpart 32.5, Progress Payments Based on Costs, has been slightly 
modified to reflect the separation of commercial from non-commercial 
items and to reflect the general policy in Subpart 32.1 for 
availability of financing for non-commercial purchases.
    Subpart 32.10, Performance-Based Payments, contains the policy and 
guidance applicable to contract financing through performance-based 
payments. This is a wholly new subpart which provides the policy and 
procedures for establishing and administering performance-based 
payments. Performance-based payments under this subpart are applicable 
only to non-commercial purchases.
    Subpart 42.3, Contract Administration, is amended to reflect 
delegations of functions for commercial financing and for performance-
based payments.
    FAR 52.232 is amended to add the clauses and solicitation 
provisions required to implement the new statutory authorities. For 
performance-based 

[[Page 49707]]
financing and commercial financing (except for installment payments), 
contracting officers will have to determine the form of contract 
financing and write individualized contract terms establishing the 
computation of amounts and certain other contract financing terms.

Item II--Special Contracting Methods (FAR Case 94-710)

    This final rule implements Sections 1074, 1503, 1504, 1552, 1553, 
2454 and 6002 of the Federal Acquisition Streamlining Act of 1994 (the 
Act). Section 1074 concerns placement of interagency orders under the 
Economy Act; Sections 1503, 1504, 1552, and 1553 address delegation of 
procurement functions and determinations and decisions; Section 2454 
concerns contracted advisory and assistance services; and Section 6002 
concerns contracting functions performed by Federal personnel. FAR 
1.601, 7.103, 17.5, and 37.2 are revised to implement these sections of 
the Act.

Item III--Task and Delivery Order Contracts (FAR Case 94-711)

    This final rule implements Sections 1004 and 1054 of the Federal 
Acquisition Streamlining Act of 1994 (the Act). Sections 1004 and 1054 
created statutory definitions for ``task order contract'' and 
``delivery order contract'' and created a statutory preference for 
making multiple awards of task and delivery order contracts. Sections 
1004 and 1054 also established certain limitations on task order 
contracts for advisory and assistance services. FAR Subpart 16.5 is 
revised and new provisions are added at 52.216-27 and 52.216-28 to 
reflect these statutory requirements.
    The final rule creates a preference for making multiple awards of 
indefinite-quantity contracts, and specifies when multiple awards 
should not be made. The rule contains no specific procedures for making 
awards of indefinite-quantity contracts, in order to empower agencies 
to develop selection criteria that meet the unique needs of each 
acquisition. However, the rule does include guidance with respect to 
the procedures that may be used for issuing orders under multiple award 
contracts.
    FAR section 16.500 is issued as an interim rule pending receipt of 
public comments.

Item IV--Fraud Remedies (FAR Case 94-765)

    This final rule implements Section 2051(e) of the Federal 
Acquisition Streamlining Act of 1994 (the Act). 10 U.S.C. 2307 contains 
a statutory requirement entitled ``Action in Case of Fraud'' applicable 
to only the Department of Defense. Section 2051(e) of the Act added 
this statutory requirement to the Federal Property and Administrative 
Services Act (41 U.S.C. 255) applicable to civilian agencies.
    The statutes at 10 U.S.C. 2307 and 41 U.S.C. 255 provide that, if 
the Government official concerned with coordinating the Government's 
remedies for a particular case of fraud finds that an advance, partial, 
or progress payment is based on fraud, that official must recommend the 
head of the agency reduce or suspend further payments to that 
contractor. The statutes further provide due process requirements, 
standards for the amount of suspension or reduction, and other policy 
and procedural requirements. A new section is added at FAR 32.006 to 
reflect these statutory requirements.

Item V--Assignment of Claims (FAR Case 94-761)

    This final rule implements Section 2451 of the Federal Acquisition 
Streamlining Act of 1994 (the Act). The rule revises FAR 32.803(d) to 
expand the authorization of a no-setoff commitment in contracts for 
which assignment of claims are made. Prior to the Act, the no-setoff 
commitment could only be included in a contract during time of war or 
national emergency. Under the Act, the inclusion of the no-setoff 
commitment is based solely on whether the President makes a 
determination of need. Until an agency has received such a 
determination of need, the ``No-Setoff'' Alternate I of the clause at 
52.232-23, Assignment of Claims, shall not be used.

Information Item--Cost or Pricing Data Threshold

    This information item is to provide notice that an adjustment to 
the cost or pricing data threshold at FAR 15.804-2 will not be made as 
of October 1, 1995. Sections 1201 and 1251 of the Federal Acquisition 
Streamlining Act of 1994 (the Act) require the threshold for obtaining 
cost or pricing data to be adjusted (in certain circumstances) once 
every five years beginning October 1, 1995. The required adjustment 
amount is the amount that reflects a constant dollar adjustment of the 
$500,000 threshold, based on fiscal year 1994 dollars, rounded to the 
nearest $50,000. The constant dollar adjustment amount did not exceed 
$25,000. Accordingly, the Act does not require or authorize an 
adjustment as of October 1, 1995. This analysis and the required 
adjustment, if any, must be performed again in the year 2000.
    Dated: September 21, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal 
Acquisition Streamlining Act of 1994.

Federal Acquisition Circular

Number 90-33
    Federal Acquisition Circular (FAC) 90-33 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 90-33 is effective 
October 1, 1995. The rules contained in this FAC are applicable for 
solicitations issued on or after October 1, 1995.

    Dated: September 19, 1995.
Eleanor R. Spector,
Director, Defense Procurement.

    Dated: September 18, 1995.
Ida M. Ustad,
Associate Administrator for Acquisition Policy, General Services 
Administration.

    Dated: September 19, 1995.
Thomas S. Luedtke,
Deputy Associate Administrator for Procurement, NASA.
[FR Doc. 95-23867 Filed 9-25-95; 8:45 am]
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