[Federal Register Volume 61, Number 145 (Friday, July 26, 1996)]
[Rules and Regulations]
[Pages 39186-39188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18497]



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_______________________________________________________________________

Part II

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Ch. I, et al.



Federal Acquisition Regulations (FAR); Final and Interim Rules

  Federal Register / Vol. 61, No. 145 / Friday, July 26, 1996 / Rules 
and Regulations  

[[Page 39186]]



DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1


Federal Acquisition Circular 90-40; 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 with request 
for comment.

-----------------------------------------------------------------------

SUMMARY: This document summarizes the Federal Acquisition Regulation 
(FAR) rules which follow it in the order listed below. The FAR Council 
is issuing Federal Acquisition Circular (FAC) 90-40 to amend the 
Federal Acquisition Regulation (FAR). A companion document, the Small 
Entities Compliance Guide, follows this FAC and may be located on the 
Internet at http://www.gsa.gov/far/compliance.

DATES: For effective dates and comment dates, see separate documents 
which follow. Please cite FAC 90-40 and the appropriate FAR case 
number(s) in all correspondence related to the following documents.

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears (in the 
table below) 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 90-40 and 
specific FAR case number(s).

SUPPLEMENTARY INFORMATION: Federal Acquisition Circular 90-40 amends 
the Federal Acquisition Regulation (FAR) as specified below:

------------------------------------------------------------------------
     Item-               Subject           FAR case         Analyst     
------------------------------------------------------------------------
I..............  Contingent Fee               93-009  DeStefano.        
                  Representation.                                       
II.............  Simplified Acquisition       94-770  Linfield.         
                  Threshold/Federal           94-771                    
                  Acquisition Computer                                  
                  Network; and Micro-                                   
                  Purchase Procedures.                                  
III............  Gratuities (Interim)..       96-300  DeStefano.        
IV.............  Disaster Relief Act...       93-303  Klein.            
V..............  Responsibility               95-007  DeStefano.        
                  Determinations.                                       
VI.............  Task and Delivery            94-711  McAndrew.         
                  Orders.                                               
VII............  Multiyear Contracting.       94-712  McAndrew.         
VIII...........  Small Business/              94-782  Moss.             
                  Simplified                                            
                  Acquisition Threshold.                                
IX.............  Indian-Owned Economic        91-028  DeStefano.        
                  Enterprises.                                          
X..............  General Agreement on         95-308  O'Neill.          
                  Tariffs and Trade                                     
                  Patent Authorization.                                 
XI.............  Performance and              91-027  O'Such.           
                  Payment Bonds.                                        
XII............  Employee Compensation        93-005  Olson.            
                  Costs.                                                
XIII...........  Agency Procurement           95-309  O'Neill.          
                  Protests (Interim).                                   
XIV............  Value Engineering.....       96-315  O'Such.           
XV.............  Termination Inventory        94-003  Klein.            
                  Schedules.                                            
------------------------------------------------------------------------

Item I--Contingent Fee Representation (FAR Case 93-009)

    This final rule amends FAR Subpart 3.4 to remove the requirement 
for prospective contractors to provide certain information regarding 
contingent fee arrangements. Accordingly, the provision at 52.203-4, 
Contingent Fee Representation and Agreement, and Standard Form 119, 
Statement of Contingent or Other Fees, are also removed. The underlying 
policy pertaining to contingent fee arrangements, as set forth in 
Subpart 3.4, remains the same.

Item II--Simplified Acquisition Threshold/Federal Acquisition Computer 
Network; and Micro-Purchase Procedures (FAR Cases 94-770 and 94-771)

    The interim rules published as Item II of FAC 90-24 and Item III of 
FAC 90-29 are amended and adopted as final. The rules implement the 
micro-purchase, simplified acquisition, and Federal Acquisition 
Computer Network (FACNET) provisions of the Federal Acquisition 
Streamlining Act of 1994 (Public Law 103-355), and Section 4302(b) of 
the Federal Acquisition Reform Act of 1996 (Public Law 104-106). The 
final rules differ from the interim rules in that they (1) move 
definitions pertaining to micro-purchases, simplified acquisition 
procedures, and FACNET from Parts 4 and 13 to Part 2; (2) remove the 
requirement for interim FACNET certification before a contracting 
office may use simplified acquisition procedures for contract actions 
exceeding $50,000; (3) remove the clause at 52.222-40, Service Contract 
Act of 1965, as Amended--Contracts of $2,500 or Less, based upon a 
change in Department of Labor regulations; and (4) provide a telephone 
number for information regarding FACNET at 4.503.

Item III--Gratuities (FAR Case 96-300)

    This interim rule amends FAR 3.202 and 52.203-3 to implement 
Section 801 of the National Defense Authorization Act for Fiscal Year 
1996 (Public Law 104-106). Section 801 amends 10 U.S.C. 2207, generally 
referred to as the Gratuities Act, to exempt contracts which do not 
exceed the simplified acquisition threshold from application of the 
Act. Therefore, the clause at 52.203-3, Gratuities, is now prescribed 
for inclusion in only those contracts which exceed the simplified 
acquisition threshold.

Item IV--Disaster Relief Act (FAR Case 93-303)

    This final rule amends FAR 6.302-5, and adds FAR Subpart 26.2, to 
implement the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (42 U.S.C. 5150). Section 5150 establishes a preference 
for local sources in the award of contracts for major disaster or 
emergency assistance activities.

Item V--Responsibility Determinations (FAR Case 95-007)

    This final rule amends FAR Subpart 9.1 to emphasize the use of 
commercial sources of information for determining the responsibility of 
prospective contractors, and to clarify that preaward surveys normally 
should be requested only when information on hand or readily available 
is not sufficient.

Item VI--Task and Delivery Orders (FAR Case 94-711)

    The interim rule published as Item III of FAC 90-33 is amended and 
adopted as final. The interim rule added FAR

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Section 16.500 to define the scope of the multiple award preference 
established by Subpart 16.5 for indefinite-quantity contracts. The 
final rule differs from the interim rule in that it amends Section 
16.500 to clarify that the multiple award preference does not apply to 
architect-engineer contracts subject to the procedures in Subpart 36.6. 
However, agencies are not precluded from making multiple awards for 
architect-engineer services, provided the selection of contractors and 
placement of orders is consistent with Subpart 36.6. The rule also 
amends Section 16.504 to clarify procedures for determining if multiple 
awards are appropriate.

Item VII--Multiyear Contracting (FAR Case 94-712)

    This final rule revises FAR Subpart 17.1, removes the clause at 
52.217-1, and revises the clause at 52.217-2 to implement Sections 1022 
and 1072 of the Federal Acquisition Streamlining Act of 1994 (Public 
Law 103-355). Sections 1022 and 1072 provide for use of multiyear 
contracting in a manner that will encourage competition or promote 
economy in administration, performance, and operation of an agency's 
programs.

Item VIII--Small Business/Simplified Acquisition Threshold (FAR Case 
94-782)

    This final rule amends FAR Part 19 and the clauses at 52.219-6, 
52.219-7, and 52.219-18 to implement Section 4004 of the Federal 
Acquisition Streamlining Act of 1994 (Public Law 103-355). Section 4004 
amends Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) to 
reserve each contract for supplies or services that has an anticipated 
value greater than $2,500, but not greater than $100,000, for exclusive 
participation by small business concerns, unless the contracting 
officer is unable to obtain offers from two or more small business 
concerns that are competitive with regard to price, quality, and 
delivery. This rule also reflects a final rule published by the Small 
Business Administration at 13 CFR 121.406, which provides that, where 
the procurement of a manufactured item is processed under FAR Part 13 
procedures, set aside for small business concerns, and not expected to 
exceed $25,000, an offeror need not supply the end product of a small 
business concern as long as the product is manufactured or produced in 
the United States.

Item IX--Indian-Owned Economic Enterprises (FAR Case 91-028)

    The interim rule published as Item VIII of FAC 90-7 is amended and 
adopted as final. The rule implements 25 U.S.C. 1544, which provides 
for payment of incentives to prime contractors who use Indian 
organizations or Indian-owned economic enterprises as subcontractors. 
The principal difference between the interim rule and the final rule is 
the method of incentive payment contained in each. The interim rule 
permitted prime contractors to recover certain costs of subcontracting 
with Indian organizations and Indian-owned economic enterprises based 
on the difference in price between the acceptable low non-Indian 
subcontractor and the acceptable low Indian subcontractor, when the 
Indian subcontractor's price exceeded the price of the non-Indian 
subcontractor. The final rule instead permits an incentive payment to 
the prime contractor in an amount which equals 5 percent of the amount 
of the subcontract awarded to the Indian organization or Indian-owned 
economic enterprise. The applicable amendments are in Subpart 26.1 and 
the clause at 52.226-1.

Item X--General Agreement on Tariffs and Trade Patent Authorization 
(FAR Case 95-308)

    This final rule adds FAR Section 27.209 to provide guidance 
pertaining to the use of patented technology under the General 
Agreement on Tariffs and Trade.

Item XI--Performance and Payment Bonds (FAR Case 91-027)

    This final rule amends FAR Subpart 28.1 and the clause at 52.228-1, 
and adds two clauses at 52.228-15 and 52.228-16, and new SF 1418 to 
update, clarify, and standardize policy pertaining to bid guarantees 
and performance and payment bonds.

Item XII--Employee Compensation Costs (FAR Case 93-005)

    This final rule amends FAR Part 31 to clarify the allowability of 
personal services compensation costs. The rule adds definitions at 
31.001; clarifies the standard for reasonableness of labor-management 
compensation agreements at 31.205-6(b); revises 31.205-6(b)(1)(i) to 
clearly allow offsets of allowable elements of employee compensation 
packages among jobs of the same grade or level; and revises 31.205-6(i) 
to provide a general allowability rule pertaining to corporate 
securities.

Item XIII--Agency Procurement Protests (FAR Case 95-309)

    This interim rule revises FAR 33.103 to implement Executive Order 
12979, Agency Procurement Protests. Executive Order 12979 provides for 
inexpensive, informal, procedurally simple, and expeditious resolution 
of agency protests, including, where appropriate and permitted by law, 
the use of alternative dispute resolution techniques, third party 
neutrals, and another agency's personnel.

Item XIV--Value Engineering (FAR Case 96-315)

    This final rule amends FAR Part 48 to revise the definition of 
value engineering and to require agencies to establish and maintain 
cost-effective value engineering procedures and processes. The rule 
implements Section 4306 of the Federal Acquisition Reform Act of 1996 
(Public Law 104-106).

Item XV--Termination Inventory Schedules (FAR Case 94-003)

    This final rule amends FAR Part 49 and the clauses at 52.249-2, 
52.249-3, 52.249-5, 52.249-6, and 52.249-11 to require contractors 
under terminated contracts to submit termination inventory schedules 
within 120 days from the date of termination, unless this period is 
extended by the contracting officer.

    Dated: July 16, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

FEDERAL ACQUISITION CIRCULAR

Number 90-40
    Federal Acquisition Circular (FAC) 90-40 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 90-40 are effective 
September 24, 1996, except for Items III, VI thru VIII, and XIII, which 
are effective July 26, 1996, and Items II and XIV, which are effective 
August 26, 1996.


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    Dated: July 12, 1996.
Eleanor R. Spector,
Director, Defense Procurement.

    Dated: July 8, 1996.
Ida M. Ustad,
Deputy Associate Administrator for Acquisition Policy, General Services 
Administration.

    Dated: July 15, 1996.
Tom Luedtke,
Deputy Associate Administrator for Procurement, National Aeronautics 
and Space Administration.
[FR Doc. 96-18497 Filed 7-25-96; 8:45 am]
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