[Federal Register Volume 62, Number 163 (Friday, August 22, 1997)]
[Rules and Regulations]
[Pages 44802-44804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22074]


      

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Part III

Department of Defense

General Services Administration

National Aeronautics and Space Administration
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48 CFR Chapter I, et al.



Federal Acquisition Regulations (FAR); Final Rules

  Federal Register / Vol. 62, No. 163 / Friday, August 22, 1997 / Rules 
and Regulations  

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1


Federal Acquisition Circular 97-01; 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.

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SUMMARY: This document summarizes the Federal Acquisition Regulation 
(FAR) rules issued by the Civilian Agency Acquisition Council and the 
Defense Acquisition Regulations Council in this Federal Acquisition 
Circular (FAC) 97-01. Each rule follows this document in the order 
listed below. A companion document, the Small Entity Compliance Guide 
follows this FAC and may be located on the Internet.

DATES: For effective dates and comment dates, see separate documents 
which follow.

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 Beverly Fayson, Room 4035, GS Building, 
Washington, DC 20405 (202) 501-4755. Please cite FAC 97-01 and specific 
FAR case number(s).

SUPPLEMENTARY INFORMATION: Federal Acquisition Circular 97-01 amends 
the Federal Acquisition Regulation (FAR) as specified below:

------------------------------------------------------------------------
    Item              Subject            FAR case           Analyst     
------------------------------------------------------------------------
I...........  Business Process        97-006          De Stefano.       
               Innovation.                                              
II..........  FASA and the Walsh-     96-601          O'Neill.          
               Healey Public                                            
               Contracts Act.                                           
III.........  Irrevocable Letters of  95-301          O'Neill.          
               Credit and                                               
               Alternatives to                                          
               Miller Act Bonds.                                        
IV..........  Automatic Data          96-010          Olson.            
               Processing Equipment                                     
               Leasing Costs.                                           
V...........  Environmentally Sound   92-054A         De Stefano.       
               Products.                                                
VI..........  New FAR Certifications  96-329          De Stefano.       
VII.........  Service Contracting...  95-311          O'Neill.          
VIII........  ADP/Telecommunications  96-602          Nelson.           
               Federal Supply                                           
               Schedules.                                               
IX..........  Certificate of          96-002          Moss.             
               Competency (Interim).                                    
X...........  Economically            97-008          Moss.             
               Disadvantaged                                            
               Individuals.                                             
XI..........  Minority Small          95-028          Moss.             
               Business and Capital                                     
               Ownership.                                               
XII.........  Executive Order 12933,  94-610          O'Neill.          
               Nondisplacement of                                       
               Qualified Workers                                        
               Under Certain                                            
               Contracts (Interim).                                     
XIII........  Designation of Hong     97-019          Linfield.         
               Kong.                                                    
XIV.........  Foreign Differential    96-012          Olson.            
               Pay.                                                     
XV..........  Local Government        96-003          Nelson.           
               Lobbying Costs.                                          
XVI.........  Independent Government  97-005          O'Neill.          
               Estimates--Constructi                                    
               on.                                                      
XVII........  Year 2000 Compliance..  96-607          Nelson.           
XVIII.......  Modification of         96-606          De Stefano.       
               Existing Contracts                                       
               under FASA and FARA.                                     
------------------------------------------------------------------------

Item I--Business Process Innovation (FAR Case 97-006)

    This final rule amends FAR 1.102-4(e) to encourage contracting 
officers, in their role as members of the Government acquisition team, 
to take the lead in encouraging business process innovations and 
ensuring that business decisions are sound.

Item II--FASA and the Walsh-Healey Public Contracts Act (FAR Case 
96-601)

    The interim rule published as Item I of Federal Acquisition 
Circular 90-43 is converted to a final rule without change. The rule 
amends the FAR to eliminate the requirement that covered contractors 
under the Walsh-Healey Public Contracts Act must be either the 
manufacturer of or a regular dealer in the materials, supplies, 
articles, or equipment to be manufactured or used in the performance of 
the contract.

Item III--Irrevocable Letters of Credit and Alternatives to Miller Act 
Bonds (FAR Case 95-301)

    The interim rule published as Item XVII of FAC 90-39 is revised and 
finalized. The rule amends FAR Parts 28 and 52 to provide for use of 
Irrevocable Letters of Credit as substitutes for corporate or 
individual surety on Miller Act bonds, and to provide alternatives to 
Miller Act payment bonds for construction contracts valued at $25,000 
to $100,000, which are no longer subject to the Miller Act, in 
accordance with Section 4104(b)(1) of the Federal Acquisition 
Streamlining Act of 1994 (Public Law 103-355).

Item IV--Automatic Data Processing Equipment Leasing Costs (FAR Case 
96-010)

    The interim rule published as Item I of FAC 90-44 is converted to a 
final rule without change. The rule amends FAR Part 31 to remove the 
automatic data processing equipment leasing cost principle.

Item V--Environmentally Sound Products (FAR Case 92-054A)

    The interim rule published as Item II of FAC 90-27 is revised and 
finalized. The rule amends FAR Parts 1, 7, 10, 11, 13, 15, 23, 36, 42, 
and 52 to incorporate policies for the acquisition of environmentally 
preferable and energy-efficient products and services. The final rule 
differs from the interim rule in that it clarifies the acceptability of 
used, reconditioned, or remanufactured supplies, or former Government 
surplus property, proposed for use under a contract; revises the clause 
at 52.211-5 regarding acceptability of such material and limits its use 
in solicitations and contracts for commercial items; eliminates the 
provisions at 52.211-6 and 52.223-8 and the clause at 52.211-7; revises 
the clause at 52.223-9 to streamline reporting requirements regarding 
the recovered material content of EPA-designated items; and eliminates 
references to agency designation of items requiring minimum recovered 
material content.

Item VI--New FAR Certifications (FAR Case 96-329)

    This final rule adds a new section at FAR 1.107 to reflect the 
provisions of Section 4301(b)(2) of the Clinger-Cohen Act of 1996 (Pub. 
L. 104-106). Section 4301(b)(2) prohibits the inclusion of a new 
certification requirement in the FAR for contractors or offerors unless 
the certification requirement is specifically imposed by statute, or 
unless a written justification for such

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certification requirement is provided to the Administrator for Federal 
Procurement Policy by the FAR Council and the Administrator approves in 
writing the inclusion of the certification.

Item VII--Service Contracting (FAR Case 95-311)

    This final rule amends FAR Parts 7, 16, 37, 42, 46, and 52 to 
implement Office of Federal Procurement Policy (OFPP) Policy Letter 91-
2, Service Contracting. The OFPP policy letter prescribes policies and 
procedures for use of performance-based contracting methods.

Item VIII--ADP/Telecommunications Federal Supply Schedules (FAR Case 
96-602)

    This final rule amends FAR Subpart 8.4 to clarify procedures for 
placing orders and obtaining price reductions under GSA Federal supply 
schedule contracts, and to add information regarding the ``GSA 
Advantage!'' on-line shopping service. Related amendments are made at 
FAR 13.202(a)(4) and 51.103.

Item IX--Certificate of Competency (FAR Case 96-002)

    This interim rule amends FAR Parts 9 and 19 to implement revisions 
made to the Small Business Administration's (SBA) procurement 
assistance programs contained in 13 CFR Part 125. The rule notably (1) 
increases the threshold over which contracting officers may appeal the 
award of a Certificate of Competency (COC) from $25,000 to $100,000; 
(2) updates the names of SBA offices involved in processing COC's; and 
(3) implements the requirement that compliance with the limitations on 
subcontracting be considered an element of responsibility. In addition, 
this interim rule removes language implementing Section 15(c) of the 
Small Business Act (15 U.S.C. 644(c)) as amended by Section 305 of 
Public Law 103-403, Small Business Administration Reauthorization and 
Amendments Act of 1994. Section 305, which authorized public and 
private organizations for the handicapped to participate in 
acquisitions set aside for small businesses, has expired.

Item X--Economically Disadvantaged Individuals (FAR Case 97-008)

    This final rule amends the definition of ``small disadvantaged 
business concern'' at FAR 19.001 to update the categories of 
individuals considered to be socially and economically disadvantaged. 
In accordance with the Small Business Administration's regulations at 
13 CFR 124.105, the Maldives Islands has been added to the category of 
``Subcontinent Asian Americans''; and Macao, Hong Kong, Fiji, Tonga, 
Kiribati, Tuvalu, and Nauru have been added to the category of ``Asian 
Pacific Americans.''

Item XI--Minority Small Business and Capital Ownership (FAR Case 
95-028)

    The interim rule published as Item VII of FAC 90-43 is revised and 
finalized. The rule amends the FAR to reflect changes to the Small 
Business Administration's (SBA) regulations at 13 CFR Parts 121 and 
124, which address the Minority Small Business and Capital Ownership 
Development Program. The rule clarifies eligibility and procedural 
requirements for procurements under the 8(a) program. The final rule 
differs from the interim rule in that it amends FAR 19.804-2 to reflect 
changes that the SBA is making in its processing of 8(a) requirements.

Item XII--Executive Order 12933, Nondisplacement of Qualified Workers 
Under Certain Contracts (FAR Case 94-610)

    This interim rule adds a new FAR Subpart 22.12 implementing 
Executive Order 12933, Nondisplacement of Qualified Workers Under 
Certain Contracts, of October 20, 1994. The Executive Order and the 
interim rule require that workers on certain building service contracts 
be given the right of first refusal for employment with the successor 
contractor, if they would otherwise lose their jobs as a result of the 
award of the successor contract.

Item XIII--Designation of Hong Kong (FAR Case 97-019)

    This final rule amends FAR 25.401 to add Hong Kong as a designated 
country under the Trade Agreements Act of 1979, as directed by the 
United States Trade Representative.

Item XIV--Foreign Differential Pay (FAR Case 96-012)

    The interim rule published as Item VI of FAC 90-44 is converted to 
a final rule without change. The rule amends FAR 31.205-6 to remove the 
prohibition on the calculation of foreign differential pay based 
directly on an employee's specific increase in income taxes resulting 
from assignment overseas.

Item XV--Local Government Lobbying Costs (FAR Case 96-003)

    The interim rule published as Item XI of FAC 90-43 is converted to 
a final rule without change. The rule amends FAR 31.205-22 to make 
allowable the costs of any lobbying activities to influence local 
legislation in order to directly reduce contract costs, or to avoid 
material impairment of the contractor's authority to perform the 
contract.

Item XVI--Independent Government Estimates--Construction (FAR Case 97-
005)

    This final rule amends FAR 36.203(a) and 36.605(a) to raise the 
threshold for a mandatory independent Government estimate of 
construction costs and architect-engineer costs from $25,000 to 
$100,000.

Item XVII--Year 2000 Compliance (FAR Case 96-607)

    The interim rule published as Item XIV of FAC 90-45 is revised and 
finalized. The rule provides guidance regarding the acquisition of 
information technology that is Year 2000 compliant. The final rule 
differs from the interim rule in that it makes clarifying revisions to 
the definition of ``Year 2000 compliant'' at FAR 39.002.

Item XVIII--Modification of Existing Contracts Under FASA and FARA 
(FAR Case 96-606)

    The interim rule published as Item VIII of FAC 90-44 is converted 
to a final rule without change. The rule amends FAR 43.102 to implement 
subsection 10002(e) of the Federal Acquisition Streamlining Act of 1994 
(Pub. L. 103-355) and subsections 4402 (d) and (e) of the Clinger-Cohen 
Act of 1996 (Pub. L. 104-106). The rule authorizes, but does not 
require, contracting officers, if requested by the contractor, to 
modify existing contracts without requiring consideration, to 
incorporate changes authorized by the Act.

    Dated: August 14, 1997.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

Federal Acquisition Circular

    Federal Acquisition Circular (FAC) 97-01 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 97-01 are effective 
October 21, 1997, except for Items IX, XII, and XIII, which are 
effective August 22, 1997.


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     Dated: August 7, 1997.
Eleanor R. Spector,
Director, Defense Procurement.

    Dated: August 7, 1997.
Tom Luedtke,
Deputy Associate Administrator for Procurement National Aeronautics and 
Space Administration.

    Dated: August 7, 1997.
Edward C. Loeb,
Acting Deputy Associate Administrator, Office of Acquisition Policy, 
General Services Administration.
[FR Doc. 97-22074 Filed 8-15-97; 1:12 pm]
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