[Federal Register Volume 61, Number 154 (Thursday, August 8, 1996)]
[Rules and Regulations]
[Pages 41467-41472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20187]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 5, 7, 8, 9, 12, 15, 16, 17, 19, 22, 32, -33, 34, 
37, 38, 39, 45, 46, 51, 52, and 53

[FAC 90-41, FAR Case 96-319, Item I]
RIN 9000-AHXX


Federal Acquisition Regulation; Information Technology Management 
Reform Act of 1996 (ITMRA)

AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed to an interim rule amending 
the Federal Acquisition Regulation (FAR) to provide for a simplified, 
clear, and understandable process for acquiring information technology 
(IT) that addresses the management of risk. This interim rule 
implements the Information Technology Management Reform Act (ITMRA), 
Division E of Public Law 104-106, dated February 10, 1996. The interim 
rule also incorporates the recommendations of the Federal Information 
Resources Management Regulation (FIRMR) Transition Committee, 
relocating those provisions of the FIRMR, which were recommended for 
retention, in the FAR. This regulatory action was not subject to Office 
of Management and Budget (OMB) review under Executive Order 12866, 
dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

DATES: Effective Date: August 8, 1996.
    Applicability: This regulation applies to all IT solicitations 
issued on or after August 8, 1996. The General Services Board of 
Contract Appeals (GSBCA) will not accept any protest received on or 
after August 8, 1996.
    Comment Date: Comments should be submitted to the FAR Secretariat 
at the address shown below on or before October 7, 1996 to be 
considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: -
General Services Administration, FAR Secretariat (MVRS), 18th & F 
Streets, NW, Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405.
    Please cite FAC 90-41, FAR case 96-319 in all correspondence 
related to this case.

FOR FURTHER INFORMATION CONTACT: Mr. Jack O'Neill at (202) 501-3856 in 
reference to this FAR case. For general information, contact the FAR 
Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAC 90-41, FAR case 96-319.

SUPPLEMENTARY INFORMATION:

A. Background

    Federal information systems are critical to every American. The 
efficiency and effectiveness of the Federal Government is dependent 
upon the effective use of information. The Information Technology 
Management Reform Act (ITMRA) of 1996 seeks to improve Federal 
information management and to facilitate Federal Government acquisition 
of state-of-the-art IT that is critical for improving the efficiency 
and effectiveness of Federal Government operations.
    Under ITMRA, each executive agency is authorized to acquire IT, 
including entering into contracts that provide for multi-agency 
acquisitions of IT in accordance with guidance issued by OMB. The Chief 
Information Officer (CIO) of each agency is responsible for the IT 
programs of the agency. The Director of OMB is responsible for 
improving the acquisition, use, and disposal of IT by the Federal 
Government. The development and use of best practices in the 
acquisition of IT will be encouraged. Additionally, the Director will 
monitor the effectiveness of, and compliance with, directives issued 
under ITMRA. The Director will also coordinate the development and 
review of policy by the Administrator, Office of Information and 
Regulatory Affairs, with the Office of Federal Procurement Policy.
    In light of the passage of ITMRA, and the recognition by the CIO 
Council that a new regulatory framework is necessary to effect the 
tenor and tenets of the ITMRA, the FIRMR Transition Committee reviewed 
the FIRMR (41 CFR Chapter 201) and made recommendations as to 
provisions of the FIRMR that should be included in the FAR. The 
language resulting from those recommendations is included in this 
interim rule.
    This interim rule implements ITMRA, the recommendations of the 
FIRMR Transition Committee, and the goals of transforming acquisition 
of IT into a results-oriented procurement system which ensures 
responsibility and accountability of Federal agencies in the use of IT 
in support of agency missions.
    Section 5202 of ITMRA encourages agency heads to use modular 
contracting or incremental acquisition when acquiring a major 
information technology system. A proposed rule giving guidance to 
contracting officers on use of this technique will be developed after 
publication of this interim rule. Regulation drafters will work closely 
with industry and contracting agencies to ensure that the proposed rule 
provides guidance to agencies using this technique.

B. Regulatory Flexibility Act

    This rule is expected to have a significant beneficial impact on a 
substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because the rule 
simplifies and streamlines procedures for the acquisition of 
information technology. An Initial Regulatory Flexibility Analysis 
(IRFA) has been prepared and will be provided to the Chief Counsel for 
Advocacy of the Small Business

[[Page 41468]]

Administration. A copy of the IRFA may be obtained from the FAR 
Secretariat. Comments are invited. Comments from small entities 
concerning the affected FAR subparts will be considered in accordance 
with 5 U.S.C. 610. Such comments must be submitted separately and cite 
5 U.S.C 601, et seq. (FAR Case 96-319), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose recordkeeping or information collection 
requirements, or collections of information from offerors, contractors, 
or members of the public which require the approval of OMB under 44 
U.S.C. 3501, et seq.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DOD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
because the ITMRA, passed February 10, 1996, should be effective by 
August 8, 1996. Regulations should be in effect by that date. However, 
pursuant to Public Law 98-577 and FAR 1.501, public comments received 
in response to this interim rule will be considered in the formation of 
the final rule.

List of Subjects in 48 CFR Parts 2, 5, 7, 8, 9, 12, 15, 16, 17, 19, 22, 
32, 33, 34, 37, 38, 39, 45, 46, 51, 52 and 53

    Government procurement.

    Dated: August 2, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
    Therefore, 48 CFR Parts 2, 5, 7, 8, 9, 12, 15, 16, 17, 19, 22, 32, 
33, 34, 37, 38, 39, 45, 46, 51, 52, and 53 are amended as set forth 
below:
    1. The authority citation for 48 CFR Parts 2, 5, 7, 8, 9, 12, 15, 
16, 17, 19, 22, 32, 33, 34, 37, 38, 39, 45, 46, 51, 52 and 53 continues 
to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 2--DEFINITIONS OF WORDS AND TERMS

    2. Section 2.101 is amended by adding, in alphabetical order, the 
definitions for ``Information technology'' and ``Major system'' to read 
as follows:


2.101  Definitions.

* * * * *
    Information technology means any equipment, or interconnected 
system(s) or subsystem(s) of equipment, that is used in the automatic 
acquisition, storage, manipulation, management, movement, control, 
display, switching, interchange, transmission, or reception of data or 
information by the agency.
    (a) For purposes of this definition, equipment is used by an agency 
if the equipment is used by the agency directly or is used by a 
contractor under a contract with the agency which--
    (1) Requires the use of such equipment; or
    (2) Requires the use, to a significant extent, of such equipment in 
the performance of a service or the furnishing of a product.
    (b) The term information technology includes computers, ancillary 
equipment, software, firmware and similar procedures, services 
(including support services), and related resources.
    (c) The term information technology does not include any equipment 
that is acquired by a contractor incidental to a contract.
    Major system means that combination of elements that will function 
together to produce the capabilities required to fulfill a mission 
need. The elements may include hardware, equipment, software, or any 
combination thereof, but exclude construction or other improvements to 
real property. A system shall be considered a major system if--
    (a) The Department of Defense is responsible for the system and the 
total expenditures for research, development, test, and evaluation for 
the system are estimated to be more than $75,000,000 (based on fiscal 
year 1980 constant dollars) or the eventual total expenditure for the 
acquisition exceeds $300,000,000 (based on fiscal year 1980 constant 
dollars);
    (b) A civilian agency is responsible for the system and total 
expenditures for the system are estimated to exceed $750,000 (based on 
fiscal year 1980 constant dollars) or the dollar threshold for a 
``major system'' established by the agency pursuant to Office of 
Management and Budget Circular A-109, entitled ``Major System 
Acquisitions,'' whichever is greater; or
    (c) The system is designated a ``major system'' by the head of the 
agency responsible for the system.
* * * * *

PART 5--PUBLICIZING CONTRACT ACTIONS


5.207  [Amended]

    3. Section 5.207 is amended in paragraph (g)(1) by revising in the 
table the entry for ``Code D'' to read ``Information technology 
services, including telecommunications services.''; and in (g)(2) by 
revising in the table the entry for ``Code 70'' to read ``General-
purpose information technology equipment.''

PART 7--ACQUISITION PLANNING

    4. Section 7.403(b)(1) is revised to read as follows:


7.403  General Services Administration assistance.

* * * * *
    (b) * * *
    (1) Center for Strategic IT Analysis (MKS), Washington, DC 20405, 
for information on acquisition of information technology.
* * * * *

PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES


8.002  [Amended]

    5. Section 8.002 is amended by removing paragraph (d) and 
redesignating paragraphs (e) through (g) as (d) through (f), 
respectively.


8.402  [Reserved]

    6. Section 8.402 is removed and reserved.
    7. Subpart 8.9 is added to read as follows:
Subpart 8.9--Financial Management Systems Software (FMSS) Mandatory 
Multiple Award Schedule (MAS) Contracts Program
Sec.
8.901  General.
8.902  Policy.
8.903  Exceptions.
8.904  Procedures.


8.901  General.

    (a) OMB has established a mandatory Governmentwide Financial 
Management Systems Software (FMSS) program.
    (b) Agencies may obtain information and assistance concerning the 
use of the FMSS MAS contracts program from: General Services 
Administration, Procurement Services Center (KRB), FMSS Contracting 
Officer, 18th and F Streets, NW, Washington, DC 20405.
    (c) OMB Circular No. A-127, Revised, ``Financial Management 
Systems,'' provides further policy direction regarding the FMSS 
program.

[[Page 41469]]

8.902  Policy.

    The FMSS MAS contracts program is mandatory for use by executive 
agencies for the acquisition of commercial software for core financial 
systems and for the acquisition of services and support related to the 
implementation of such software.


8.903  Exceptions.

    (a) If an executive agency holds a licensing agreement for a 
software package that is available on the FMSS MAS contracts, and the 
package was obtained under a contract awarded before the award of the 
FMSS MAS contracts, the agency's use of the FMSS MAS contracts program 
is optional for the acquisition of services and support related to the 
implementation of that package until the previous non-MAS contract 
expires.
    (b) Use of the FMSS MAS contracts program by Federal agencies that 
are not executive agencies is optional and is subject to the FMSS 
contractor accepting the order.
    (c) An executive agency shall obtain a waiver from GSA if it 
determines that its requirements for financial management systems 
software cannot be satisfied through use of the FMSS MAS contracts 
program.
    (1) The request for a waiver shall contain the following 
information--
    (i) A description of the agency's requirements;
    (ii) The reasons the FMSS MAS contracts program does not satisfy 
the requirements; and
    (iii) A description of how the agency proposes to satisfy its needs 
for financial management system software.
    (2) Agencies shall send waiver requests to GSA at the address in 
8.901(b).


8.904  Procedures.

    (a) The contracting officer shall announce the agency's 
requirements in a letter of interest (LOI) to all contractors 
participating in the FMSS MAS contracts program.
    (b) At the time of issuance, the contracting officer shall provide 
a copy of the LOI to--
    (1) GSA at the address in 8.901(b);
    (2) OMB at: Office of Federal Financial Management, Federal 
Financial Systems Branch, Office of Management and Budget, 725 17th 
Street, NW, Washington, DC 20503; and
    (3) Department of Treasury at: Division of Financial Management, 
Financial Management Service, Department of the Treasury, PG Center #2, 
Room 800A, Hyattsville, MD 20782.
    (c) The LOI shall--
    (1) Contain sufficient information to enable a competitive 
acquisition under the FMSS MAS contracts program;
    (2) Include instructions to the FMSS MAS contractors for responding 
to the LOI; and
    (3) Include evaluation and award factors.
    (d) The agency shall conduct an analysis of the offerings of the 
FMSS MAS contractors and issue a delivery order to the contractor that 
provides the most advantageous alternative to the Government.
    (e) The contracting officer may issue single or multiple delivery 
orders to satisfy the total requirement.
    (f) The contracting officer shall provide a copy of each delivery 
order, or modification thereto, to OMB and the Department of Treasury 
at the address shown in paragraph (b) of this section and to GSA at the 
address in 8.901(b).

PART 9--CONTRACTOR QUALIFICATIONS

    8. Section 9.508(e) is revised to read as follows:


9.508  Examples.

* * * * *
    (e) Before an acquisition for information technology is conducted, 
Company A is awarded a contract to prepare data system specifications 
and equipment performance criteria to be used as the basis for the 
equipment competition. Since the specifications are the basis for 
selection of commercial hardware, a potential conflict of interest 
exists. Company A should be excluded from the initial follow-on 
information technology hardware acquisition.
* * * * *

PART 12--ACQUISITION OF COMMERCIAL ITEMS

    9. Section 12.603(c)(2)(xiii) is revised to read as follows:


12.603   Streamlined solicitation for commercial items.

* * * * *
    (c) * * *
    (2) * * *
    (xiii) A statement regarding any additional contract requirement(s) 
or terms and conditions (such as contract financing arrangements or 
warranty requirements) determined by the contracting officer to be 
necessary for this acquisition and consistent with customary commercial 
practices.
* * * * *

PART 13--SIMPLIFIED ACQUISITION PROCEDURES


13.103  [Amended]

    10. Section 13.103 is amended by removing ``GSA Nonmandatory 
Schedule Contracts for FIP Resources,'' in paragraph (a).
    11. Section 13.202(c)(3) is revised to read as follows:


13.202  Establishment of blanket purchase agreements (BPA's).

* * * * *
    (c) * * *
    (3) Federal Supply Schedule contractors if not inconsistent with 
the terms of the applicable schedule contract.

PART 15--CONTRACTING BY NEGOTIATION


15.805-1  [Amended]

    12. Section 15.805-1(d) is amended in the sixth sentence by 
removing ``the FIRMR'', and by removing ``regulatory'' and inserting 
``regulations'' in its place.

PART 16--TYPES OF CONTRACTS

    13. Section 16.500 is amended by revising the fourth and fifth 
sentences to read as follows:


16.500  Scope of subpart.

    * * * Therefore, GSA regulations and the coverage for the Federal 
Supply Schedule program in subpart 8.4 and part 38 take precedence over 
this subpart. This subpart may be used to acquire information 
technology requirements that are not satisfied 
under the Federal Supply Schedule 
program. * * *

PART 17--SPECIAL CONTRACTING METHODS

    14. Section 17.200 is revised to read as follows:


17.200  Scope of subpart.

    This subpart prescribes policies and procedures for the use of 
option solicitation provisions and contract clauses. Except as provided 
in agency regulations, this subpart does not apply to contracts for (a) 
services involving the construction, alteration, or repair (including 
dredging, excavating, and painting) of buildings, bridges, roads, or 
other kinds of real property; (b) architect-engineer services; and (c) 
research and development services. However, it does not preclude the 
use of options in those contracts.
    15. Section 17.204(e) is amended by removing the last sentence and 
adding in its place two new sentences to read as follows:

[[Page 41470]]

17.204  Contracts.

* * * * *
    (e) * * * These limitations do not apply to information technology 
contracts. However, statutes applicable to various classes of 
contracts, for example, the Service Contract Act (see 22.1002-1), may 
place additional restrictions on the length of contracts.
* * * * *

PART 19--SMALL BUSINESS PROGRAMS

    16. Subsection 19.502-1 is amended by revising the last sentence to 
read as follows:


19.502-1  Requirements for setting aside acquisitions.

    * * * This requirement does not apply to purchases of $2,500 or 
less, or purchases from required sources of supply under Part 8 (e.g., 
Federal Prison Industries, Committee for Purchase from People Who are 
Blind or Severely Disabled, and Federal Supply Schedule contracts).

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS


22.1006  [Amended]

    17. Section 22.1006(e)(1) is amended by removing the acronym 
``ADP'' and inserting ``information technology'' in its place.

PART 32--CONTRACT FINANCING

    18. Section 32.602(h) is revised to read as follows:


32.602  General.

* * * * *
    (h) Reimbursement of costs, as provided in 33.102(b) and 
33.104(h)(1), paid by the Government where a postaward protest is 
sustained as a result of an awardee's misstatement, misrepresentation, 
or miscertification.
    19. Section 32.603 is revised to read as follows:


32.603  Applicability.

    Except as otherwise specified, this subpart applies to all debts to 
the Government arising in connection with contracts and subcontracts 
for the acquisition of supplies or services, and debts arising from the 
Government's payment of costs, as provided in 33.102(b) and 
33.104(h)(1), where a postaward protest is sustained as a result of an 
awardee's misstatement, misrepresentation, or miscertification.

PART 33--PROTESTS, DISPUTES, AND APPEALS

    20. Section 33.102 is amended by revising the first sentence of 
paragraph (a); in (b)(3)(i) by removing ``or GSBCA''; in (c) by 
removing ``or GSBCA'' and by removing ``90 working'' and inserting 
``100'' in its place; and by revising (e). The revised text reads as 
follows:


33.102  General.

    (a) Contracting officers shall consider all protests and seek legal 
advice, whether protests are submitted before or after award and 
whether filed directly with the agency or the General Accounting Office 
(GAO). * * *
* * * * *
    (e) An interested party wishing to protest is encouraged to seek 
resolution within the agency (see 33.103) before filing a protest with 
the GAO, but may protest to the GAO in accordance with GAO regulations 
(4 CFR part 21).


33.104  [Amended]-

    21. Section 33.104 is amended in paragraph (a)(3)(i) introductory 
text by removing ``35'' and inserting ``30'' in its place, and in 
paragraph (f) by removing ``125'' and inserting ``100'' in its place.


33.105  [Reserved]-

    22. Section 33.105 is removed and reserved.

PART 34--MAJOR SYSTEM ACQUISITION


34.001  [Amended]-

    23. Section 34.001 is amended by removing the definition for 
``Major system''.

PART 37--SERVICE CONTRACTING-

    24. Section 37.202(a) is revised to read as follows:


37.202  Exclusions.

* * * * *
    (a) Routine information technology services unless they are an 
integral part of a contract for the acquisition of advisory and 
assistance services.
* * * * *

PART 38--FEDERAL SUPPLY SCHEDULE CONTRACTING


38.000  [Amended]

    25. Section 38.000 is amended by removing the second sentence. -
    26. Part 39 is revised to read as follows:

PART 39--ACQUISITION OF INFORMATION TECHNOLOGY

Sec.
39.000  Scope of part.
39.001  Applicability.
39.002  Definitions.

Subpart 39.1--General

39.101  Policy.
39.102  Management of risk.
39.103  [Reserved]
39.104  [Reserved]
39.105  Privacy.
39.106  Contract clause.


39.000  Scope of part.-

    This part prescribes acquisition policies and procedures for use in 
acquiring information technology consistent with other parts of this 
chapter and OMB Circular No. A-130, Management of Federal Information 
Resources.


39.001  Applicability.-

    This part applies to the acquisition of information technology by 
or for the use of agencies except for acquisitions of information 
technology for national security systems. However, acquisitions of 
information technology for national security systems shall be conducted 
in accordance with 40 U.S.C. 1412 with regard to requirements for 
performance and results-based management; the role of the agency Chief 
Information Officer in acquisitions; and accountability. These 
requirements are addressed in OMB Circular No. A-130.


39.002  Definitions.-

    National security system, as used in this part, means any 
telecommunications or information system operated by the United States 
Government, the function, operation, or use of which---
    (a) Involves intelligence activities;-
    (b) Involves cryptologic activities related to national security;-
    (c) Involves command and control of military forces;-
    (d) Involves equipment that is an integral part of a weapon or 
weapons system; or-
    (e) Is critical to the direct fulfillment of military or 
intelligence missions. This does not include a system that is to be 
used for routine administrative and business applications, such as 
payroll, finance, logistics, and personnel management applications.

Subpart 39.1--General


39.101  Policy.-

    In acquiring information technology, agencies shall identify their 
requirements pursuant to OMB Circular A-130, including consideration of

[[Page 41471]]

security of resources, protection of privacy, national security and 
emergency preparedness, accommodations for individuals with 
disabilities, and energy efficiency. When developing an acquisition 
strategy, contracting officers should consider the rapidly changing 
nature of information technology through market research (see part 10) 
and the application of technology refreshment techniques.


39.102  Management of risk.-

    (a) Prior to entering into a contract for information technology, 
an agency should analyze risks, benefits, and costs. (See part 7 for 
additional information regarding requirements definition.) Reasonable 
risk taking is appropriate as long as risks are controlled and 
mitigated. Contracting and program office officials are jointly 
responsible for assessing, monitoring and controlling risk when 
selecting projects for investment and during program implementation. -
    (b) Types of risk may include schedule risk, risk of technical 
obsolescence, cost risk, risk implicit in a particular contract type, 
technical feasibility, dependencies between a new project and other 
projects or systems, the number of simultaneous high risk projects to 
be monitored, funding availability, and program management risk.-
    (c) Appropriate techniques should be applied to manage and mitigate 
risk during the acquisition of information technology. Techniques 
include, but are not limited to: prudent project management; use of 
modular contracting; thorough acquisition planning tied to budget 
planning by the program, finance and contracting offices; continuous 
collection and evaluation of risk-based assessment data; prototyping 
prior to implementation; post implementation reviews to determine 
actual project cost, benefits and returns; and focusing on risks and 
returns using quantifiable measures.


39.103-39.104  [Reserved]


39.105  Privacy.-

    Agencies shall ensure that contracts for information technology 
address protection of privacy in accordance with the Privacy Act (5 
U.S.C. 552a) and part 24. In addition, each agency shall ensure that 
contracts for the design, development, or operation of a system of 
records using commercial information technology services or information 
technology support services include the following:-
    (a) Agency rules of conduct that the contractor and the 
contractor's employees shall be required to follow.-
    (b) A list of the anticipated threats and hazards that the 
contractor must guard against.-
    (c) A description of the safeguards that the contractor must 
specifically provide.-
    (d) Requirements for a program of Government inspection during 
performance of the contract that will ensure the continued efficacy and 
efficiency of safeguards and the discovery and countering of new 
threats and hazards.


39.106  Contract clause.-

    The contracting officer shall insert a clause substantially the 
same as the clause at 52.239-1, Privacy or Security Safeguards, in 
solicitations and contracts for information technology which require 
security of information technology, and/or are for the design, 
development, or operation of a system of records using commercial 
information technology services or support services.

PART 45--GOVERNMENT PROPERTY


45.608-1  [Amended]-

    27. Section 45.608-1 is amended in Table 45-1 under the Screening 
Category ``Special Items'' by removing in the second column ``Automatic 
data processing equipment.'', and in the third column by removing 
``(see 45.608-5(d))'' and revising ``(see 45.608-5(e))'' to read ``(see 
45.608-5(d))''.


45.608-5  [Amended]-

    28. Section 45.608-5 is amended by removing paragraph (d) and by 
redesignating paragraph (e) as (d).

PART 46--QUALITY ASSURANCE-

    29. Section 46.801 is amended by revising the first sentence of 
paragraph (a) to read as follows:


46.801  Applicability.-

    (a) This subpart applies to contracts other than those for (1) 
information technology, including telecommunications, (2) construction, 
(3) architect-engineer services, and (4) maintenance and rehabilitation 
of real property. * * *
* * * * *

PART 51--USE OF GOVERNMENT SOURCES BY CONTRACTORS-

    30. Section 51.103(c) is revised to read as follows:


51.103  Ordering from Government supply sources.

* * * * *
    (c) Contractors placing orders under indefinite delivery contracts 
issued by GSA for automatic data processing equipment, software and 
maintenance, communications equipment and supplies, and teleprocessing 
services shall follow the terms of the applicable contract and the 
procedures in 51.103(a)(1) and (2).
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES-

    31. Section 52.212-5 is amended by revising the clause date; by 
removing from paragraph (a)(2) ``and 40 U.S.C. 759'' and from the 
introductory text of paragraph (b) ``and FIRMR''; and by revising 
(b)(16) and (17) to read as follows:


52.212-5  Contract terms and conditions required to implement statutes 
or executive orders--commercial items.

* * * * *

Contract Terms and Conditions Required To Implement Statutes or 
Executive Orders-Commercial Items (Aug. 1996)

* * * * *--
    (b) * * *--
    ______ (16) 52.239-1, Privacy or Security Safeguards (5 U.S.C. 
552a).-
    ______ (17) 52.247-64, Preference for Privately Owned U.S.-Flag 
Commercial Vessels (46 U.S.C. 1241).
* * * * *
(End of clause)

    32. Section 52.222-48 is amended by revising the section heading, 
the clause heading and date, and by removing from paragraph (a)(2) 
``ADP'' and inserting ``information technology'' in its place. The 
revised text reads as follows:


52.222-48  Exemption from Application of Service Contract Act 
Provisions for Contracts for Maintenance, Calibration, and/or Repair of 
Certain Information Technology, Scientific and Medical and/or Office 
and Business Equipment--Contractor Certification.

* * * * *

Exemption From Application of Service Contract Act Provisions For 
Contracts For Maintenance, Calibration, and/or Repair of Certain 
Information Technology, Scientific and Medical and/or Office and 
Business Equipment--Contractor Certification (Aug. 1996)

* * * * *
(End of clause)-

    33. Section 52.233-2 is revised to read as follows:


52.233-2  Service of Protest.-

    As prescribed in 33.106(a), insert the following provision:

[[Page 41472]]

Service of Protest (Aug. 1996)-

    (a) Protests, as defined in section 33.101 of the Federal 
Acquisition Regulation, that are filed directly with an agency, and 
copies of any protests that are filed with the General Accounting 
Office (GAO), shall be served on the Contracting Officer (addressed 
as follows) by obtaining written and dated acknowledgment of receipt 
from ______. [Contracting Officer designate the official or location 
where a protest may be served on the Contracting Officer.]-
    (b) The copy of any protest shall be received in the office 
designated above within one day of filing a protest with the GAO.

(End of provision)

    -34. Section 52.233-3 is amended by revising the clause date and 
the first sentence of paragraph (f) to read as follows:


52.233-3  Protest after Award.

* * * * *

Protest After Award (Aug. 1996)

* * * * *-
    (f) If, as the result of the Contractor's intentional or 
negligent misstatement, misrepresentation, or miscertification, a 
protest related to this contract is sustained, and the Government 
pays costs, as provided in FAR 33.102(b)(2) or 33.104(h)(1), the 
Government may require the Contractor to reimburse the Government 
the amount of such costs. * * *

(End of clause)
* * * * *-
    35. Section 52.239-1 is added to read as follows:


52.239-1  Privacy or Security Safeguards.-

    As prescribed in 39.106, insert a clause substantially the same as 
the following:

Privacy or Security Safeguards (Aug. 1996)-

    (a) The Contractor shall not publish or disclose in any manner, 
without the Contracting Officer's written consent, the details of 
any safeguards either designed or developed by the Contractor under 
this contract or otherwise provided by the Government.-
    (b) To the extent required to carry out a program of inspection 
to safeguard against threats and hazards to the security, integrity, 
and confidentiality of Government data, the Contractor shall afford 
the Government access to the Contractor's facilities, installations, 
technical capabilities, operations, documentation, records, and 
databases.-
    (c) If new or unanticipated threats or hazards are discovered by 
either the Government or the Contractor, or if existing safeguards 
have ceased to function, the discoverer shall immediately bring the 
situation to the attention of the other party.

(End of clause)

PART 53-FORMS-

    36. Section 53.245(a) is amended by revising the last sentence to 
read as follows:


53.245  Government property.-

* * * * *
    (a) * * * (See 45.608-2(b)(2) and 45.608-8.)
* * * * *
[FR Doc. 96-20187 Filed 8-7-96; 8:45 am]
BILLING CODE 6820-EP-P