[Federal Register Volume 63, Number 45 (Monday, March 9, 1998)]
[Rules and Regulations]
[Pages 11522-11552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5272]
[[Page 11521]]
_______________________________________________________________________
Part III
Department of Defense
_______________________________________________________________________
48 CFR Parts 201, et al.
Defense Federal Acquisition Regulation Supplement; Miscellaneous
Amendments; Interim and Final Rules
Federal Register / Vol. 63, No. 45 / Monday, March 9, 1998 / Rules
and Regulations
[[Page 11522]]
DEPARTMENT OF DEFENSE
48 CFR Parts 201, 202, 204, 209, 212, 214, 215, 216, 217, 219, 223,
225, 226, 227, 229, 231, 232, 233, 234, 235, 236, 237, 239, 241,
242, 243, 250, 252, 253, and Appendices G and I to Chapter 2
[Defense Acquisition Circular 91-13]
Defense Federal Acquisition Regulation Supplement; Miscellaneous
Amendments
AGENCY: Department of Defense (DoD).
ACTION: Interim and final rules.
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SUMMARY: Defense Acquisition Circular 91-13 amends the Defense Federal
Acquisition Regulation Supplement (DFARS) to revise, finalize, or add
language on the Defense Acquisition Regulations System, acquisition of
commercial items, multiyear contracting, interagency acquisitions under
the Economy Act, small business programs, the environment, foreign
acquisition, utilization of Indian organizations, foreign patent
interchange agreements, taxes, contract cost principles and procedures,
contract financing, disputes and appeals, major system acquisition,
research and development contracting, construction and architect-
engineer contracts, service contracting, acquisition of information
technology, acquisition of utility services, contract administration,
extraordinary contractual actions, and contract reporting.
DATES: Effective date: March 9, 1998.
Comment date: Comments on the interim rule (Item XXIII: Sections
236.102, 236.274, 236.570, 252.236-7010, and 252.236-7012) should be
submitted in writing to the address shown below on or before May 8,
1998 to be considered in the formulation of the final rule.
ADDRESSES: Interested parties should submit written comments on the
interim rule (Item XXII) to: Defense Acquisition Regulations Council,
Attn: Ms. Amy Williams PDUSD(A&T)DP(DAR), IMD 3D139, 3062 Defense
Pentagon, Washington, DC 20301-3062. Telefax number (703) 602-0350. E-
mail comments submitted over the Internet should be addressed to:
[email protected]. Please cite DFARS Case 97-D307 in all correspondence
related to this rule. E-mail comments should cite DFARS Case 97-D307 in
the subject line.
FOR FURTHER INFORMATION CONTACT: Item XXIII--Ms. Amy Williams, (703)
602-0131.
All other items--Ms. Susan Buckmaster, (703) 602-0131.
SUPPLEMENTARY INFORMATION:
A. Background
Defense Acquisition Circular (DAC 91-13) includes 31 rules and
miscellaneous editorial amendments. Eight of the rules (Items II, III,
IV, V, XIII, XVI, XVII, and XXIX) were published previously in the
Federal Register and thus are not included as part of this notice of
amendments to the Code of Federal Regulations. These eight rules are
included in the DAC to incorporate the previously published amendments
into the loose-leaf edition of the DFARS.
B. Determination to Issue an Interim Rule
DAC 91-13, Item XXIII
A determination has been made under the authority of the Secretary
of Defense that urgent and compelling reasons exist to publish this
interim rule prior to affording the public an opportunity to comment.
This rule amends the DFARS to implement Section 112 of the Military
Construction Appropriations Act for Fiscal Year 1998 (Public Law 105-
45). Section 112 provides that no military construction appropriations
may be used to award, to a foreign contractor, any contract estimated
to exceed $1,000,000 for military construction in the United States
territories and possessions in the Pacific and on Kwajalein Atoll, or
in countries bordering the Arabian Gulf; except for contract awards for
which the lowest responsive and responsible bid of a United States firm
exceeds the lowest responsive and responsible bid of a foreign firm by
greater than 20 percent; and except for contract awards for military
construction on Kwajalein Atoll for which the lowest responsive and
responsible bid is submitted by a Marshallese firm. Section 112 was
effective upon enactment on September 30, 1997. Comments received in
response to the publication of this interim rule will be considered in
formulating the final rule.
C. Regulatory Flexibility Act
DAC 91-13, Items I, VII, VIII, IX, XII, XV, XXI, XXII, XXV, XXVI, and
XXVII
These final rules do not constitute significant revisions within
the meaning of Federal Acquisition Regulation 1.501 and Public Law 98-
577, and publication for public comment is not required. However,
comments from small entities concerning the affected DFARS subparts
will be considered in accordance with Section 610 of the Regulatory
Flexibility Act (5 U.S.C. 610). Please cite the applicable DFARS case
number in correspondence.
DAC 91-13, Items VI, XI, XIV, XVIII, XX, XXIV, and XXXI
DoD certifies that these rules will not have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because:
Item VI, Multiyear Contracting and Other Miscellaneous Provisions--
The rule primarily reorganizes and clarifies existing DFARS guidance
pertaining to multiyear contracting, updates internal Government
operating procedures for processing Economy Act orders, and makes minor
amendments to reflect existing statutory and regulatory requirements.
Item XI, Duty-Free Entry--The rule does not constitute a change in
policy but is a clarification of implementing procedures pertaining to
duty-free entry of supplies and the North American Free Trade
Agreement.
Item XIV, Contingent Fees--Foreign Military Sales--Most firms that
pay or receive contingent fees on foreign military sales are not small
business concerns.
Item XVIII, Cost Reimbursement Rules for Indirect Costs--Most
contracts awarded to small entities use simplified acquisition
procedures or are awarded on a competitive, fixed-price basis and do
not require application of the FAR or DFARS cost principles.
Item XX, Earned Value Management Systems--The rule only applies to
contractors for certain major defense programs, and eliminates the
requirement that such contractors use a unique management control
system for DoD contracts.
Item XXIV, Architect-Engineer Selection Process--The rule
streamlines, but does not significantly alter, the process for
selection of firms for architect-engineer contracts.
Item XXXI, Reporting of Contract Performance Outside the United
States--Most contractors that submit reports of contract performance
outside the United States are not small business concerns.
DAC 91-13, Item XXIII
This interim rule is not expected to have a significant economic
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
DFARS changes contained in this rule apply only to contracts for
military construction on Kwajalein Atoll that are estimated to exceed
$1,000,000; DoD awards approximately two such
[[Page 11523]]
contracts annually. An initial regulatory flexibility analysis has
therefore not been performed. Comments are invited from small
businesses and other interested parties. Comments from small entities
concerning the affected DFARS subparts also will be considered in
accordance with 5 U.S.C. 610. Such comments should be submitted
separately and should cite DFARS Case 97-D307 in correspondence.
DAC 91-13, Items X, XIX, XXVIII, and XXX
A final regulatory flexibility analysis has been performed for each
of these rules. A copy of the analyses may be obtained from the address
specified herein. Please cite the applicable DFARS case number in
correspondence. The analyses are summarized as follows:
Item X, Buy American Act Exception for Information Technology Products
(DFARS Case 97-D022)
This final rule implements the determination by the Under Secretary
of Defense (Acquisition and Technology) (USD(A&T)) that it is not in
the public interest to apply the restrictions of the Buy American Act
to U.S. made information technology products, in acquisitions subject
to the Trade Agreements Act. The legal basis for the rule is 41 U.S.C.
10a, which provides an exception to the requirements of the Buy
American Act if the head of the agency determines that application of
the restrictions is not in the public interest. The objective of the
rule is to reduce burdensome recordkeeping and tracking requirements
imposed on U.S. manufacturers of information technology products and to
remove the competitive disadvantage imposed on some U.S. manufacturers
of information technology products, when competing with foreign
offerors of eligible information technology products against an offeror
of an information technology product that qualifies as a domestic
product under the Buy American Act. In acquisitions subject to the
Trade Agreements Act, the rule provides that offers of U.S. made
information technology products in Federal Supply Group 70 or 74 will
be evaluated without regard to whether the product qualifies as a
domestic product. The different rules of origin under the Buy American
Act and the Trade Agreements Act result in disproportionately
burdensome recordkeeping requirements on firms offering information
technology products, because eligible offers under the Trade Agreements
Act are exempt from the Buy American Act, but offers of U.S. made
products are not exempt. This rule will relieve U.S. manufacturers of
information technology products from the burden of researching and
documenting the origin of components for information technology
products, because the Buy American Act component test no longer
applies. The rule will also simplify the evaluation of offers because,
for acquisitions subject to the determination, there is only one class
of U.S. made products, and no preference for domestic products. There
were no public comments in response to the initial regulatory
flexibility analysis prepared for the proposed rule published in the
Federal Register at 62 FR 47407 on September 9, 1997. The rule will
apply to all offerors/contractors offering information technology
products in Federal Supply Group 70 or 74 to DoD, in acquisitions
valued at $190,000 or more. Based on DD Form 350 data from the
Washington Headquarters Services, in fiscal year 1996, DoD awarded 735
contracts meeting these criteria to 612 contractors, of which 214 were
small businesses. The final rule does not impose any new reporting or
recordkeeping requirements. The rule will result in a reduction of
paperwork burden on offerors. There are no significant alternatives to
the rule that would accomplish the stated objectives yet reduce any
negative impact on small entities. This rule is expected to have a
generally positive impact on small entities, because USD(A&T) has
determined that removal of the competitive disadvantage for some U.S.
made information technology end products, and the removal of burdensome
requirements on U.S. manufacturers to separately track domestic and
foreign components, outweighs the possible increase in use of foreign
components.
Item XIX, Finance (DFARS Case 95-D710)
This final rule supplements the FAR rules published as Item VII of
Federal Acquisition Circular 90-32 on September 18, 1995 (60 FR 48272),
and Items I and IV of Federal Acquisition Circular 90-33 on September
26, 1995 (60 FR 49707 and 60 FR 49728). These DFARS revisions include
the addition of 232.2, Commercial Item Purchase Financing, and 232.10,
Performance-Based Payments; the deletion of 232.173, Reduction or
Suspension of Contract Payments Upon Finding of Fraud, and 232.970,
Payment of Subcontractors, since equivalent coverage is now provided in
the FAR; and a number of editorial changes to reflect revisions made in
the FAR. One of the issues raised by several respondents relates to the
prompt payment periods specified in the rule: 30 days for commercial
advance payments, and 14 days for commercial interim and performance-
based payments. The respondents advocate the 7 days now allowed for
progress payments. The DoD Contract Finance Committee made an
assessment that no changes should be made to the prompt payment times
in the DFARS rule. The payment period (14 days) for performance-based
payments reflects the likely additional time required for verification
of the contractor's claimed performance and analysis of what often will
be a relatively extensive compilation of performance events. Thus, more
time is allowed than for cost-based progress payments (7 days). The
commercial advance payments period reflects the anticipated timing of
most such requests. These requests for payment are expected to occur at
the beginning of the contract, possibly being keyed to the actual
contract signing date. Thus, a 30-day period has been allowed to enable
the payment office to receive the contract, enter it into the payment
office computer system, and process the contractor's request for
payment. The commercial interim payment normally is expected to be
submitted during the life of the contract, and after the payment office
is prepared to process payment of such requests. A 14-day payment
period has been adopted as a payment time reasonably capable of
accommodating the wide diversity anticipated for commercial payment
terms. The prompt payment periods established in the DFARS are shorter
than the equivalent standard prompt payment periods (30 days) in FAR
32.906, and, thus, are more beneficial for small entities than the
existing FAR policy. A second issue raised by several respondents
concerns the provisions relating to the list of financial and other
information that the Government must obtain to determine the financial
responsibility of contractors. One respondent indicated its ``concern
with the substantial burdens that will be placed on the contracting
officer and offeror.'' The requirement, stated in section 232.072 of
the rule, was transferred verbatim from DFARS 232.172. This DFARS rule
makes no policy change, only an editorial change to move the DFARS
language to correspond to certain changes made to the FAR. In addition,
the contracting officer is only required to obtain information
sufficient to make a determination of the contractor's
[[Page 11524]]
financial responsibility. The changes made to the DFARS by this rule
will apply to large and small entities whose DoD contracts include
performance-based or commercial (advance or interim) type of financing.
For the 11 months of available fiscal year 1997 DD Form 350 data
(October 1996 through August 1997), less than 0.5 percent of small
business contracts (98 out of a total of 40,102) used commercial or
performance-based financing. Accordingly, the final rule does not
impact a significant number of small entities. The rule imposes no
reporting, recordkeeping, or other compliance requirements. Various
alternatives involving shorter prompt payment periods were considered,
but, as previously explained, were rejected since their implementation
would be exceptionally costly and burdensome on payment offices.
Item XXVIII, Certification of Requests for Equitable Adjustment (DFARS
Case 97-D302)
This rule finalizes, with changes, the interim rule published in
the Federal Register on July 11, 1997 (62 FR 37146). The interim rule
amended the DFARS to implement 10 U.S.C. 2410(a), which requires
contractors to certify that requests for equitable adjustment that
exceed the simplified acquisition threshold are made in good faith and
that the supporting data are accurate and complete. There were no
comments in response to the initial regulatory flexibility analysis
prepared for the interim rule. The primary impact of the rule relates
to requests in the range of $100,000 to $500,000, because requests in
excess of $500,000 generally require submission of cost or pricing data
and certification thereof. Many of the firms requesting equitable
adjustment in amounts of $100,000 to $500,000 are construction
contractors. It is estimated that the rule will affect approximately
330 small entities annually. Accounting skills will be necessary to
provide the cost data to support the certification. The rule minimizes
the economic impact on small entities, because the certification
requirements of the rule apply only to requests exceeding the
simplified acquisition threshold, and because the certification is
limited to only that which is specifically required by 10 U.S.C.
2410(a). There is no other known alternative that would be consistent
with the stated objective yet further reduce the burden on small
entities.
Item XXX, Specialty Metals--Agreements With Qualifying Countries (DFARS
Case 97-D007)
This final rule amends the clause at DFARS 252.225-7014 to make the
exception in the clause consistent with the Berry Amendment (10 U.S.C.
2241 Note) and with the existing DFARS text at 225.7001-2(i). The
objective of the rule is to clearly and accurately implement the Berry
Amendment, which provides an exception to domestic source restrictions
for the procurement of specialty metals, where such procurement is
necessary in furtherance of agreements with foreign governments in
which both governments agree to remove barriers to purchase of supplies
produced in the other country. There were no public comments in
response to the initial regulatory flexibility analysis or the proposed
rule published in the Federal Register at 62 FR 23741 on May 1, 1997.
The clause at DFARS 252.225-7014, Preference for Domestic Specialty
Metals, is prescribed for use in all solicitations and contracts
exceeding the simplified acquisition threshold that require delivery of
an article containing specialty metals. The clause is prescribed for
use with its Alternate I if the article containing specialty metals is
for one of certain major programs. The basic clause only restricts the
direct acquisition of specialty metals by the prime contractor, whereas
Alternate I flows down the restriction to subcontractors at any tier.
The rule does not affect the already unrestricted sources of specialty
metals when acquiring qualifying country end products or when acquiring
components including specialty metals for use in an end product for
other than a major program. The rule does loosen the restriction on
domestic specialty metals for prime contractors providing domestic or
nonqualifying country end products, permitting them to incorporate
specialty metals melted in a qualifying country (for both major and
nonmajor programs); or qualifying country components containing
specialty metals of unrestricted source for use in end products for
major programs. Because the components subject to increased foreign
competition are at a subcontract level, it is not possible to more
specifically identify the items or whether they are produced by small
business concerns. The rule imposes no new reporting, recordkeeping, or
compliance requirements on offerors or contractors. One alternative
considered was to require that the specialty metals incorporated in
articles manufactured in a qualifying country also be melted in a
qualifying country. This approach could slightly reduce the extent of
foreign competition facing domestic entities. However, this approach
appeared to go beyond the requirements of the statute being
implemented.
D. Paperwork Reduction Act
DAC 91-13, Items I, VI, VII, VIII, IX, XII, XIV, XV, XVIII, XIX, XX,
XXI, XXII, XXIV, XXV, XXVI, XXVII, and XXX
The Paperwork Reduction Act does not apply, because these rules
contain no information collection requirements that require the
approval of the Office of Management and Budget under 44 U.S.C. 3501,
et seq.
DAC 91-13, Items X, XI, XXIII, XXVIII, and XXXI
The Paperwork Reduction Act applies. The Office of Management and
Budget (OMB) has approved the information collection requirements as
follows:
------------------------------------------------------------------------
Item OMB Control No.
------------------------------------------------------------------------
X.................................. 0704-0187; 0704-0259
XI................................. 0704-0229
XXIII.............................. 0704-0255
XXVIII............................. 0704-0397
XXXI............................... 0704-0229
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E. Summary of Amendments
Defense Acquisition Circular (DAC) 91-13 amends the Defense Federal
Acquisition Regulation Supplement (DFARS) 1991 edition. The amendments
are summarized as follows:
Item I--Approval of Nonstatutory Certification Requirements (DFARS Case
97-D301)
This final rule adds a new section at DFARS 201.107 and amends
201.304 to implement Section 29 of the Office of Federal Procurement
Policy Act (41 U.S.C. 425), as amended by Section 4301 of the Clinger-
Cohen Act of 1996 (Public Law 104-106). Section 29 provides that a
requirement for a certification by a contractor or offeror may not be
included in a procurement regulation of an executive agency unless the
certification requirement is specifically imposed by statute or
approved in writing by the head of the executive agency.
Item II--Contract Action Reporting (DFARS Case 97-D013)
This final rule was issued by Departmental Letter 97-016, effective
October 1, 1997 (62 FR 44221, August 20, 1997). The rule amends DFARS
204.670-2, 253.204-70 and 253.204-71 to revise DD Form 350 and DD Form
[[Page 11525]]
1057 contract action reporting requirements for compliance with the
Clinger-Cohen Act of 1996 (Public Law 104-106) and to enhance data
collection procedures.
Item III--Data Universal Numbering System (DUNS) Number (DFARS Case 97-
D019)
This final rule was issued by Departmental Letter 97-020, effective
October 1, 1997 (62 FR 48181, September 15, 1997). The rule amends
DFARS 204.72 and 253.204-70 to replace guidance on use of DUNS numbers
with references to the FAR guidance on that subject, and to remove
guidance on locally developed coding systems that are no longer used.
Item IV--Single Process Initiative (DFARS Case 97-D014)
This interim rule was issued by Departmental Letter 97-017,
effective August 20, 1997 (62 FR 44223, August 20, 1997). The rule adds
guidance at DFARS 211.273 and 242.302(a) (S-70), and a contract clause
at 252.211-7005, to implement the policy set forth in OUSD(A&T)
memorandum dated April 30, 1997, as it relates to the Single Process
Initiative (SPI) and new contracts. The rule encourages offerors to
propose the use of nongovernment specifications and industrywide
practices that meet the intent of military or Federal specifications
and standards, and establishes that, in procurements of previously
developed items, SPI processes shall be considered valid replacements
for military or Federal specifications or standards, absent a specific
determination to the contrary.
Item V--Truth in Negotiations and Related Changes (DFARS Case 95-D708)
This final rule was issued by Departmental Letter 97-015, effective
July 29, 1997 (62 FR 40471, July 29, 1997). The rule amends DFARS parts
204, 215, 216, 232, 239, and 252 to update requirements pertaining to
the submission of cost or pricing data. The rule also removes
requirements pertaining to work measurement systems, as Section 2201(b)
of the Federal Acquisition Streamlining Act of 1994 (Public Law 103-
355) repealed 10 U.S.C. 2406, which was the primary statute governing
work measurement systems.
Item VI--Multiyear Contracting and Other Miscellaneous Provisions
(DFARS Case 95-D703)
This final rule removes obsolete language at DFARS 216.301-3;
revises subpart 217.1 to reorganize and clarify guidance on multiyear
contracting; revises Subpart 217.5 to update guidance on processing
interagency orders under the Economy Act; adds guidance at 233.204-70
and 250.102-70 pertaining to statutory limitations on Congressionally
directed payment of a claim or request for equitable adjustment or
relief; and amends subpart 237.2 to reflect the current numbering of
FAR subpart 37.2.
Item VII--Qualified Nonprofit Agencies for the Blind or Severely
Disabled (DFARS Case 97-D310)
This final rule amends DFARS 219.703 to implement Section 835 of
the National Defense Authorization Act for Fiscal Year 1998 (Public Law
105-85). Section 835 amends 10 U.S.C. 2410d to extend, through
September 30, 1999, the authority for contractors to claim credit
toward their small business subcontracting goals for subcontracts
awarded to qualified nonprofit agencies for the blind or severely
disabled.
Item VIII--Pilot Mentor-Protege Program (DFARS Case 97-D322)
This final rule amends DFARS 219.7104 and Appendix I to implement
Section 821 of the National Defense Authorization Act for Fiscal Year
1998 (Public Law 105-85). Section 821 extends to September 30, 1999,
the date by which an interested company must apply for participation as
a mentor firm under the DoD Pilot Mentor-Protege Program; and extends
to September 30, 2000, the date by which a mentor firm must incur costs
in order to be eligible for reimbursement under the Program.
Item IX--Recovered Material Certification (DFARS Case 97-D031)
This final rule amends DFARS 223.404 to reflect the FAR revisions
that were published as Item V of Federal Acquisition Circular 97-01.
The FAR revisions eliminated the requirement for agencies other than
the Environmental Protection Agency (EPA) to specify minimum recovered
material content standards for designated items, and eliminated the
requirement for contractors to provide annual certifications under the
clause at FAR 52.223-9, Certification and Estimate of Percentage of
Recovered Material Content for EPA Designated Items.
Item X--Buy American Act Exception for Information Technology Products
(DFARS Case 97-D022)
This final rule adds a new provision at DFARS 252.225-7020, Trade
Agreements Certificate, and a new clause at 252.225-7021, Trade
Agreements, and makes other amendments in parts 212, 225, and 252 to
implement the determination made by the Under Secretary of Defense
(Acquisition and Technology), on May 16, 1997, that it is not in the
public interest to apply the restrictions of the Buy American Act to
U.S. made information technology products, in acquisitions subject to
the Trade Agreements Act.
Item XI--Duty-Free Entry (DFARS Case 96-D020)
This final rule amends DFARS Parts 225, 242, and 252 to clarify
guidance regarding duty-free entry of supplies and implementation of
the North American Free Trade Agreement.
Item XII--Trade Agreements Threshold (DFARS Case 97-D040)
This final rule amends DFARS 225.408(a) to increase, from $50,000
to $53,150, the threshold for use of the clause at 252.225-7036, North
American Free Trade Agreement Implementation Act. The increase is based
on the cumulative rate for the Producer Price Index for Finished Goods,
as reported by the U.S. Bureau of Labor Statistics, and as notified to
the NAFTA parties by the U.S. Department of State.
Item XIII--Application of Berry Amendment (DFARS Case 96-D333)
This final rule was issued by Departmental Letter 97-018, effective
September 8, 1997 (62 FR 47153, September 8, 1997). The rule revises
and finalizes the interim rule published as Item XXII of DAC 91-12,
which implemented Section 8109 of the National Defense Appropriations
Act for Fiscal Year 1997 (Public Law 104-208). Section 8109 provides
that, in applying the domestic source restrictions of the Berry
Amendment, the term ``synthetic fabric and coated synthetic fabric''
shall be deemed to include all textile fibers and yarns that are for
use in such fabrics; and that the domestic source restrictions of the
Berry Amendment shall apply to contracts and subcontracts for the
procurement of commercial items. The final rule differs from the
interim rule in that it amends DFARS 225.7002 and 252.225-7012 to
expand the list of products that are exempt from the Berry Amendment
restrictions on synthetic fabrics.
Item XIV--Contingent Fees--Foreign Military Sales (DFARS Case 96-D021)
The interim rule published as Item XXVII of DAC 91-12 is revised
and finalized. The rule amends DFARS guidance pertaining to contingent
fees for foreign military sales. The final rule differs from the
interim rule in that it revises DFARS 225.7303-4 and
[[Page 11526]]
252.225-7027 to permit payment of contingent fees exceeding $50,000
under foreign military sales contracts if the foreign customer agrees
to such fees in writing before contract award.
Item XV--Subcontracting Plans--Indian Incentives (DFARS Case 97-D309)
This final rule amends DFARS Subpart 226.1 to implement Section
8024 of the National Defense Appropriations Act for Fiscal Year 1998
(Public Law 105-56). Section 8024 provides that incentive payments
under the Indian Incentive Program shall be available only to
contractors that have submitted subcontracting plans pursuant to 15
U.S.C. 637, including comprehensive subcontracting plans submitted in
accordance with the DoD test program.
Item XVI--Cost Principles (DFARS Case 95-D714)
This final rule was issued by Departmental Letter 97-019, effective
September 8, 1997 (62 FR 47154, September 8, 1997). The rule amends
DFARS Part 231 to implement Section 7202 of the Federal Acquisition
Streamlining Act of 1994 (Public Law 103-355). Section 7202 prohibits
the expenditure of funds to assist any DoD contractor in preparing any
material, report, list, or analysis with respect to the actual or
projected economic or employment impact in a particular State or
congressional district of an acquisition program for which all
research, development, testing, and evaluation has not been completed.
Item XVII--Allowability of Costs for Restructuring Bonuses (DFARS Case
97-D312)
This interim rule was issued by Departmental Letter 97-021,
effective November 26, 1997 (62 FR 63035, November 26, 1997). The rule
amends DFARS 231.205-6 to implement Section 8083 of the National
Defense Appropriations Act for Fiscal Year 1998 (Public Law 105-56).
Section 8083 prohibits the use of fiscal year 1998 funds to reimburse a
contractor for costs paid by the contractor to an employee for a bonus
or other payment in excess of the normal salary paid by the contractor
to the employee, when such payment is part of restructuring costs
associated with a business combination.
Item XVIII--Cost Reimbursement Rules for Indirect Costs (DFARS Case 96-
D303)
This final rule removes the cost principle at DFARS 231.205-71
pertaining to defense capability preservation agreements. Section 1027
of the National Defense Authorization Act for Fiscal Year 1998 (Public
Law 105-85) repealed the statute upon which this cost principle was
based (Section 808 of Public Law 104-106).
Item XIX--Finance (DFARS Case 95-D710)
This final rule amends DFARS Part 232 to conform to the FAR
revisions published as Item VII of FAC 90-32 and Items I and IV of FAC
90-33, which implemented provisions of the Federal Acquisition
Streamlining Act of 1994 (Public Law 103-355). The rule adds a new
subpart 232.2, Commercial Item Purchase Financing, and a new subpart
232.10, Performance-Based Payments; removes 232.173, Reduction or
Suspension of Contract Payments Upon Finding of Fraud, and 232.970,
Payment of Subcontractors, as equivalent guidance is now provided in
FAR Part 32; and moves guidance pertaining to responsibility of
contractors from 232.172 to 232.072, with no change in policy.
Item XX--Earned Value Management Systems (DFARS Case 96-D024)
The interim rule published in Item XXXIII of DAC 91-12 is revised
and finalized. The rule amends DFARS Parts 234, 242, and 252 to
recognize industry-standard guidelines for earned value management
systems as an alternative to DoD-unique cost/schedule control systems
under DoD contracts. The final rule differs from the interim rule in
that it makes minor clarifying amendments at 234.005-70, 242.1107-70,
and 252.234-7000; amends 252.234-7001 to clarify the timing of the
initial application of the earned value management system and the
integrated baseline reviews; and amends 252.242-7005 for consistency
with the industry standard, Guidelines for Earned Value Management
Systems.
Item XXI--Research and Development Definitions (DFARS Case 97-D021)
This final rule revises DFARS 235.001 to update the definitions
pertaining to research and development, for consistency with the terms
defined in DoD 7000.14-R, Financial Management Regulation.
Item XXII--Report of 10-Year Term Contracts (DFARS Case 97-D303)
This final rule removes DFARS 235.002, which required departments
and agencies to notify Congress of any research and development
contract with a period of performance exceeding 10 years. Section
1062(c) of the National Defense Authorization Act for Fiscal Year 1996
(Public Law 104-106) repealed the statute upon which this requirement
was based (10 U.S.C. 2352).
Item XXIII--Construction in Foreign Countries (DFARS Case 97-D307)
This interim rule amends DFARS Part 236 and adds a new provision at
252.236-7012 to implement Section 112 of the Military Construction
Appropriations Act for Fiscal Year 1998 (Public Law 105-45). Section
112 provides that no military construction appropriations may be used
to award, to a foreign contractor, any contract estimated to exceed
$1,000,000 for military construction in the United States territories
and possessions in the Pacific and on Kwajalein Atoll, or in countries
bordering the Arabian Gulf, except for: (1) Contract awards for which
the lowest responsive and responsible bid of a United States firm
exceeds the lowest responsive and responsible bid of a foreign firm by
more than 20 percent, and (2) contract awards for military construction
on Kwajalein Atoll for which the lowest responsive and responsible bid
is submitted by a Marshallese firm.
Item XXIV--Architect-Engineer Selection Process (DFARS Case 97-D015)
This final rule revises DFARS 236.602 to streamline the process for
selection of firms for architect-engineer contracts. The rule
eliminates requirements for formal constitution and minimum size of
preselection boards; eliminates special approval requirements for
selection of firms for contracts exceeding $500,000; and changes the
criteria for inclusion of firms on a preselection list from ``the
maximum practicable number of qualified firms'' to ``the qualified
firms that have a reasonable chance of being considered as most highly
qualified by the selection board.''
Item XXV--Overseas Architect-Engineer Services (DFARS Case 97-D034)
This final rule amends DFARS 236.609-70 to clarify the prescription
for use of the provision at 252.236.-7011, Overseas Architect-Engineer
Services--Restriction to United States Firms. The provision is used in
solicitations for architect-engineer contracts that are funded with
military construction appropriations; estimated to exceed $500,000; and
to be performed in Japan, in any North Atlantic Treaty Organization
member country, or in countries bordering the Arabian Gulf.
[[Page 11527]]
Item XXVI--Uncompensated Overtime (DFARS Case 97-D037)
This final rule removes DFARS 237.102, 237.170, and 252.237-7019.
This guidance has been superseded by the guidance on performance-based
contracting and uncompensated overtime at FAR 37.102, 37.115, and
52.237-10. A related editorial change is made at DFARS 215.608(a)(1).
Item XXVII--Telecommunications Services (DFARS Case 97-D305)
This final rule revises the guidance on multiyear contracting for
telecommunications resources at DFARS 239.7405 to reflect the
elimination of the Federal Information Resources Management Regulations
(FIRMR), and revisions made to the Federal Property Management
Regulations (FPMR), as a result of the Information Technology
Management Reform Act of 1996 (Public Law 104-106).
Item XXVIII--Certification of Requests for Equitable Adjustment (DFARS
Case 97-D302)
The interim rule issued by Departmental Letter 97-014 on July 11,
1997, is revised and finalized. The rule implements 10 U.S.C. 2410(a),
as amended by Section 2301 of the Federal Acquisition Streamlining Act
of 1994 (Public Law 103-355). 10 U.S.C. 2410(a) requires contractors to
certify that requests for equitable adjustment that exceed the
simplified acquisition threshold are made in good faith and that the
supporting data are accurate and complete. The final rule differs from
the interim rule in that it amends DFARS 243.204-70 to clarify that the
certification required by 10 U.S.C. 2410(a) is different from the
certification of a claim under the Contract Disputes Act; and amends
252.243-7002 to clarify requirements for contractor disclosure of facts
to support a certification of a request for equitable adjustment.
Item XXIX--Designation of Hong Kong (DFARS Case 97-D023)
This final rule was issued by Departmental Letter 97-013, effective
July 11, 1997 (62 FR 37147, July 11, 1997). The rule amends DFARS
252.225-7007 to add Hong Kong as a designated country under the Trade
Agreements Act of 1979, as directed by the U.S. Trade Representative.
Item XXX--Specialty Metals--Agreements with Qualifying Countries (DFARS
Case 97-D007)
This final rule amends the clause at DFARS 252.225-7014, Preference
for Domestic Specialty Metals, to specify that the requirements of the
clause do not apply to specialty metals melted, or incorporated in
articles manufactured, in a qualifying country listed in DFARS 225.872-
1.
Item XXXI--Reporting of Contract Performance Outside the United States
(DFARS Case 97-D029)
This final rule amends the clause at DFARS 252.225-7026, Reporting
of Contract Performance Outside the United States, to increase the
reporting threshold from $25,000 to the simplified acquisition
threshold, under contracts exceeding $500,000. The rule also increases
the threshold for incorporation of the clause in first-tier
subcontracts from $100,000 to $500,000.
Editorial Revisions
(1) DFARS 201.201-1 is amended to reflect the issuance of DoDI
5000.63, Defense Acquisition Regulations (DAR) System.
(2) DFARS 202.101 is amended to update the list of Army contracting
activities and to show the correct title ``Under Secretary of Defense
(Acquisition & Technology)'' in the definition of ``Head of the
agency.''
(3) DFARS 204.7003(a)(1)(i) is amended to change the designation of
the last paragraph from ``(L)'' to ``(M)'' (this revision is made only
in the loose-leaf edition of the DFARS).
(4) DFARS 209.403 is amended to reflect the change in name of the
``Defense Mapping Agency'' to the ``National Imagery and Mapping
Agency.''
(5) DFARS 214.202-5 is amended to show the correct number of the
clause ``Brand Name or Equal.''
(6) DFARS Subparts 216.4 and 216.5 are amended to conform to the
current numbering of the corresponding FAR subparts.
(7) DFARS 227.676 and 229.101 are amended to update the telephone
and telefax numbers of the United States European Command.
(8) DFARS Part 241 is amended to conform to the current numbering
of FAR Part 41 and to update other FAR references. Corresponding
amendments are made at DFARS 252.241-7000 and 252.241-7001.
(9) DFARS 252.212-7001 is amended to remove references to DFARS
252.242-7002 and 252.249-7001, which were deleted in DAC 91-12.
(10) DFARS 252.229-7004 is amended to correct a typographical error
in the clause title.
(11) DFARS Appendix G is amended to update activity and names and
addresses.
Note: This DAC incorporates, into the loose-leaf edition of the
DFARS, revisions previously issued by Departmental Letters 97-13
through 97-21. DFARS revisions contained in Departmental Letter 97-
12 and departmental letters issued after 97-21 will be covered in a
future DAC.
List of Subjects in 48 CFR Parts 201, 202, 204, 209, 212, 214, 215,
216, 217, 219, 223, 225, 226, 227, 229, 231, 232, 233, 234, 235, 236,
237, 239, 241, 242, 243, 250, 252, and 253
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Interim Rules Adopted as Final With Changes
PARTS 225 AND 252--[AMENDED]
The interim rule that was published at 62 FR 30831 on June 5, 1997,
is adopted as final with amendments at sections 225.7303-4 and 252.225-
7027, as set forth below (see amendatory instructions 40 and 86).
PARTS 234, 242, AND 252--[AMENDED]
The interim rule that was published at 62 FR 9990 on March 5, 1997,
is adopted as final with amendments at sections 234.005-70, 242.1107-
70, 252.234-7000, 252.234-7001, and 252.242-7005, as set forth below
(see amendatory instructions 53, 72, 90, 91, and 97).
PARTS 235, 243, AND 252--[AMENDED]
The interim rule that was published at 62 FR 37146 on July 11,
1997, is adopted as final with amendments at sections 243.204-70 and
252.243-7002, as set forth below (see amendatory instructions 73 and
98).
Amendments to 48 CFR Chapter 2 (Defense Federal Acquisition Regulation
Supplement)
48 CFR Chapter 2 (the Defense Federal Acquisition Regulation
Supplement) is amended as follows:
1. The authority citation for 48 CFR parts 201, 202, 204, 209, 212,
214, 215, 216, 217, 219, 223, 225, 226, 227, 229, 231, 232, 233, 234,
235, 236, 237, 239, 241, 242, 243, 250, 252, 253, and Appendices G and
I to subchapter I continues to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
[[Page 11528]]
PART 201--FEDERAL ACQUISITION REGULATIONS SYSTEM
2. Section 201.107 is added to read as follows:
201.107 Certifications.
In accordance with Section 29 of the Office of Federal Procurement
Policy Act (41 U.S.C. 425), a new requirement for a certification by a
contractor or offeror may not be included in the DFARS unless--
(1) The certification requirement is specifically imposed by
statute; or
(2) Written justification for such certification is provided to the
Secretary of Defense by the Under Secretary of Defense (Acquisition and
Technology), and the Secretary of Defense approves in writing the
inclusion of such certification requirement.
3. Section 201.201-1 is amended by revising paragraphs (c) and
(d)(i)I. to read as follows:
201.201-1 The two councils.
(c) The composition and operation of the DAR Council is prescribed
in DoDI 5000.63, Defense Acquisition Regulations (DAR) System.
(d)(i) * * *
I. PROBLEM: Succinctly state the problem created by current FAR
and/or DFARS coverage and describe the factual and/or legal reasons
necessitating the change to the regulation.
* * * * *
4. Section 201.304 is amended by revising the introductory text and
paragraphs (1), (2), (3), and (5) to read as follows:
201.304 Agency control and compliance procedures.
Departments and agencies and their component organizations may
issue acquisition regulations as necessary to implement or supplement
the FAR or DFARS.
(1)(i) Approval of the Under Secretary of Defense (Acquisition and
Technology) (USD(A&T)) is required before including in a department/
agency or component supplement, or any other contracting regulation
document such as a policy letter or clause book, any policy, procedure,
clause, or form that--
(A) Has a significant effect beyond the internal operating
procedures of the agency; or
(B) Has a significant cost or administrative impact on contractors
or offerors.
(ii) Except as provided in paragraph (2) of this section, the
USD(A&T) has delegated authority to the Director of Defense Procurement
(USD(A&T)DP) to approve or disapprove the policies, procedures,
clauses, and forms subject to paragraph (1)(i) of this section.
(2) In accordance with Section 29 of the Office of Federal
Procurement Policy Act (41 U.S.C. 425), a new requirement for a
certification by a contractor or offeror may not be included in a
department/agency or component procurement regulation unless--
(i) The certification requirement is specifically imposed by
statute; or
(ii) Written justification for such certification is provided to
the Secretary of Defense by USD(A&T), and the Secretary of Defense
approves in writing the inclusion of such certification requirement.
(3) Approval of USD(A&T)DP is required for any class deviation (as
defined in FAR Subpart 1.4) from the FAR or DFARS, before its inclusion
in a department/agency or component supplement or any other contracting
regulation document such as a policy letter or clause book.
* * * * *
(5) Departments and agencies shall submit request for the Secretary
of Defense, USD(A&T), and USD(A&T)DP approvals required by this section
through the Director of the DAR Council.
* * * * *
PART 202--DEFINITIONS OF WORDS AND TERMS
5. Section 202.101 is amended in the definition of ``Contracting
activity'' by revising the text under the heading ``ARMY''; and in the
second sentence of the definition of ``Head of the agency'' by adding,
in the parenthetical, after the word ``Acquisition'', the phrase ``&
Technology''. The revised text reads as follows:
202.101 Definitions.
* * * * *
ARMY
Contract Support Agency
Office of the Deputy Chief of Staff for Research, Development and
Acquisition, Headquarters, U.S. Army Materiel Command
Aviation and Missile Command
Industrial Operations Command
Communications-Electronics Command
Troop Support Agency
Tank-Automotive and Armaments Command
Training and Doctrine Command
Forces Command
Health Services Command
Military District of Washington
U.S. Army, Europe
National Guard Bureau
Corps of Engineers
Information Systems Command
Medical Research and Development Command
U.S. Army, Pacific
Military Traffic Management Command
Space and Strategic Defense Command
Eighth U.S. Army
Intelligence and Security Command
U.S. Army, South
Defense Supply Service-Washington
Directorate of Information Systems for Command, Control,
Communications and Computers, Office of the Secretary of the Army
U.S. Army Special Operations Command
* * * * *
PART 204--ADMINISTRATIVE MATTERS
204.805 [Amended]
6. Section 204.805 is amended in the first sentence of paragraph
(5), in the parenthetical, by removing ``15.804-2'' and inserting in
its place ``15.403-4''.
PART 209--CONTRACTOR QUALIFICATIONS
209.403 [Amended]
7. Section 209.403 is amended in the definition of ``Debarring
official'', in paragraph (1), by removing the entry ``Defense Mapping
Agency--The General Counsel'' and inserting in its place the entry
``National Imagery and Mapping Agency--The General Counsel''.
PART 212--ACQUISITION OF COMMERCIAL ITEMS
8. Section 212.301 is amended by redesigning paragraph (f)(i)(C) as
paragraph (f)(i)(D) and by adding a new paragraph (f)(i)(C) to read as
follows:
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
(f)(i) * * *
(C) 252.225-7020, Trade Agreements Certificate.
* * * * *
PART 214--SEALED BIDDING
214.205-5 [Amended]
9. Section 214.202-5 is amended in paragraph (d) by revising the
reference ``252.210-7000'' to read ``252.211-7003''.
PART 215--CONTRACTING BY NEGOTIATION
215.608 [Amended]
10. Section 215.608 is amended in the first sentence of paragraph
(a)(1), in the parenthetical, by removing the reference ``237.170'' and
inserting in its place the reference ``FAR 37.115''.
215.805-5 [Amended]
11. Section 215.805-5 is amended in paragraphs (a)(1)(A)(1) and
(a)(1)(A)(2)
[[Page 11529]]
by removing the reference ``15.804-2(a)(1)'' and inserting in its place
the reference ``15.403-4(a)(1)''.
PART 216--TYPES OF CONTRACTS
216.203-4 [Amended]
12. Section 216.203-4 is amended in paragraph (d)(xvi) by removing
the reference ``15.804-1'' and inserting in its place the reference
``15.403-1''.
216.301 and 216.301-3 [Removed]
13. Sections 216.301 and 216.301-3 are removed.
216.403-70 [Removed]
14. Section 216.403-70 is removed.
15. Section 216.404 is revised to read as follows:
216.404 Fixed-price contracts with award fees.
Award-fee provisions may be used in fixed-price contracts as
provided in 216.470
216.404-1 [Redesignated]
16. Section 216.404-1 is redesignated as section 216.405-1.
216.404-2 [Redesignated]
17. Section 216.404-2 is redesignated as section 216.405-2.
18. Section 216.405 is added to read as follows:
216.405 Cost-reimbursement incentive contracts.
216.501 [Amended]
19. Section 216.501 is amended in the introductory text of
paragraph (a)(i) and in the first sentence of paragraph (a)(ii) by
revising ``indefinite delivery'' to read ``indefinite-delivery''.
20. Sections 216.505 and 216.506 are revised to read as follows:
216.505 Ordering.
Orders placed under indefinite-delivery contracts may be issued on
DD Form 1155, Order for Supplies or Services.
216.506 Solicitation provisions and contract clauses.
(d) If the contract is for the preparation of personal property for
shipment or storage (see 247.271-4), substitute paragraph (f) at
252.247-7015, Requirements, for paragraph (f) of the clause at FAR
52.216-21, Requirements.
PART 217--SPECIAL CONTRACTING METHODS
21. Subpart 217.1 is revised to read as follows:
Subpart 217.1--Multiyear Contracting
Sec.
217.103 Definitions.
217.170 All multiyear contracts.
217.171 Multiyear contracts for services.
217.172 Multiyear contracts for supplies.
217.173 Multiyear contracts for weapon systems.
217.174 Mulityear contracts that employ economic order quantity
procurement.
Subpart 217.1--Mulityear Contracting
217.103 Definitions.
Advance procurement, as used in this subpart, means an exception to
the full funding policy that allows acquisition of long lead time items
(advance long lead acquisition) or economic order quantities (EOQ) of
items (advance EOQ acquisition) in a fiscal year in advance of that in
which the related end item is to be acquired. Advance procurements may
include materials, parts, components, and effort that must be funded in
advance to maintain a planned production schedule.
217.170 All multiyear contracts.
(a) Before a multiyear contract is awarded, the cost of that
contract shall be compared against the cost of an annual procurement
approach, using a present value analysis. The multiyear contract shall
not be awarded unless the analysis shows that it results in the lowest
cost (Section 9021 of Pub. L. 101-165 and similar sections in
subsequent Defense appropriations acts).
(b) The head of the agency shall provide written notice to the
Committees on Appropriations and National Security in the House of
Representatives and in the Senate at least 10 days before termination
of any multiyear contract (Section 9021 of Pub. L. 101-165 and similar
sections in subsequent Defense appropriations acts).
(c) The Secretary of Defense may instruct the head of the agency
proposing a multiyear contract to include in that contract negotiated
priced options for varying the quantities of end items to be procured
over the life of the contract (10 U.S.C. 2306b(j)).
(d) Every multiyear contract must comply with FAR 17.104(c), unless
an exception is approved through the budget process in coordination
with the cognizant comptroller.
217.171 Multiyear contracts for services.
(a) 10 U.S.C. 2306(g). (1) DoD may enter into multiyear
acquisitions for the following services (and items of supply relating
to such services), even though funds are limited by statute to
obligation only during the fiscal year for which they were
appropriated:
(i) Operation, maintenance, and support of facilities and
installations.
(ii) Maintenance or modification of aircraft, ships, vehicles, and
other highly complex military equipment.
(iii) Specialized training requiring high quality instructor skills
(e.g., training for pilots and other aircrew members or foreign
language training).
(iv) Base services (e.g., ground maintenance, in-plane refueling,
bus transportation, and refuse collection and disposal).
(2) This authority may be used as long as the contract does not
extend beyond 5 years.
(b) 10 U.S.C. 2829. (1) The head of the agency may enter into
multiyear contracts for supplies and services required for management,
maintenance, and operation of military family housing and may pay the
costs of such contracts for each year from annual appropriations for
that year.
(2) This authority may be used as long as the contract does not
extend beyond 4 years.
(c) Award of a multiyear contract for services requires a written
determination by the head of the agency (10 U.S.C. 2306(g)(1)) that--
(1) There will be a continuing need for the services and incidental
supplies;
(2) Furnishing the services and incidental supplies will require--
(i) A substantial initial investment in plant or equipment; or
(ii) The incurrence of substantial contingent liabilities for the
assembly, training, or transportation of a specialized work force; and
(3) Using a multiyear contract will be in the best interest of the
United States by encouraging effective competition and promoting
economical business operations (e.g., economic lot purchases and more
efficient production rates).
217.172 Multiyear contracts for supplies.
(a) This section applies to all multiyear contracts for supplies,
including weapon systems. For policies that apply only to multiyear
contracts for weapon systems, see 217.173.
(b) A multiyear contract for supplies may be used if, in addition
to the conditions listed in FAR 17.105-1(b), the use of such a contract
will promote the national security of the United States.
(c) The head of the agency shall provide written notice to the
Committees on Appropriations and National Security in the House of
Representatives and in the Senate at least 30 days before the
contracting officer awards a multiyear contract
[[Page 11530]]
including an unfunded contingent liability in excess of $20 million
(Section 9021 of Pub. L. 101-165 and similar sections in subsequent
Defense appropriations acts).
(d) Agencies shall establish reporting procedures to meet the
requirements of paragraph (c) of this section. Submit copies of the
notifications to the Director of Defense Procurement, Office of the
Under Secretary of Defense (Acquisition and Technology) (OUSD(A&T)DP),
and to the Deputy Under Secretary of Defense (Comptroller) (Program/
Budget) (OUSD(C)(P/B)).
217.173 Multiyear contracts for weapon systems.
(a) As authorized by 10 U.S.C. 2306b(a) and subject to the
conditions in paragraph (b) of this section, the head of the agency may
enter into a multiyear contract for--
(1) A weapon system and associated items, services, and logistics
support for a weapon system; and
(2) Advance procurement of components, parts, and materials
necessary to manufacture a weapon system, including advance procurement
to achieve economic lot purchases or more efficient production rates
(see 217.174 regarding economic order quantity procurement).
(b) The following conditions must be satisfied before a multiyear
contract may be awarded under the authority described in paragraph (a)
of this section:
(1) The multiyear exhibits required by DoD 7000.14-R, Financial
Management Regulation, are included in the agency's budget estimate
submission and the President's budget request.
(2) The Secretary of Defense certifies to Congress that the current
5-year defense program fully funds the support costs associated with
the multiyear program (10 U.S.C. 2306b(i)(1)(A)). Information
supporting this certification shall be submitted to USD(C)(P/B) for
transmission to Congress through the Secretary of Defense.
(3) The proposed multiyear contract provides for production at not
less than minimum economic rates, given the existing tooling and
facilities (10 U.S.C. 2306b(i)(1)(B)). Information supporting the
agency's determination that this requirement has been met shall be
submitted to USD(C)(P/B) with the information supporting the
certification required by paragraph (b)(2) of this section.
(4) If the value of the multiyear contract exceeds $500,000,000,
the applicable Defense appropriations act specifically provides that a
multiyear contract may be used to procure the particular system or
system component (Section 9021 of Pub. L. 101-165 and similar sections
in subsequent Defense appropriations acts).
(5) All other requirements of law are met and there are no other
statutory restrictions on using a multiyear contract for the specific
system or component (Section 9021 of Pub. L. 101-165 and similar
sections in subsequent Defense appropriations acts). One such
restriction may be the achievement of specified cost savings. If the
agency finds, after negotiations with the contractor(s), that the
specified savings cannot be achieved, the head of the agency shall
assess the savings that, nevertheless, could be achieved by using a
multiyear contract. If the savings are substantial, the head of the
agency may request relief from the law's specific savings requirement.
The request shall--
(i) Quantify the savings that can be achieved;
(ii) Explain any other benefits to the Government of using the
multiyear contract;
(iii) Include details regarding the negotiated contract terms and
conditions; and
(iv) Be submitted to OUSD(A&T)DP for transmission to Congress via
the Secretary of Defense and the President (10 U.S.C. 2306b(i)(2)).
217.174 Multiyear contracts that employ economic order quantity
procurement.
(a) The head of the agency shall provide written notice to the
Committees on Appropriations and National Security in the House of
Representatives and in the Senate at least 30 days before awarding--
(1) A multiyear contract providing for economic order quantity
purchases in excess of $20 million in any year; or
(2) A contract for advance procurement leading to a mulityear
contract that employs economic order quantity procurement in excess of
$20 million in any year (Section 9021 of Pub. L. 101-165 and similar
sections in subsequent Defense appropriations acts).
(b) Before initiating an advance procurement, the contracting
officer shall verify that it is consistent with DoD policy (e.g., Part
3 of DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition
Programs (MDAPs) and Major Automated Information System (MAIS)
Acquisition Programs, and the full funding policy in Volume 2A, Chapter
1, of DoD 7000.14-R, Financial Management Regulation).
22. Subpart 217.5 is revised to read as follows:
Subpart 217.5--Interagency Acquisitions Under the Economy Act
Sec.
217.503 Determinations and findings requirements.
217.504 Ordering procedures.
217.503 Determinations and findings requirements.
(c) If requested, the contracting officer who normally would
contract for the requesting activity should advise in the determination
process.
217.504 Ordering procedures.
(a) When the requesting agency is within DoD, a copy of the
executed D&F shall be furnished to the servicing agency as an
attachment to the order. When a DoD contracting office is acting as the
servicing agency, a copy of the executed D&F shall be obtained from the
requesting agency and placed in the contract file for the Economy Act
order.
PART 219--SMALL BUSINESS PROGRAMS
23. Section 219.703 is amended in paragraph (a) by revising the
introductory text to read as follows:
291.703 Eligibility requirements for participating in the program.
(a) Qualified nonprofit agencies for the blind and other severely
disabled, that have been approved by the Committee for Purchase from
People Who Are Blind or Severely Disabled under the Javits-Wagner-O'Day
Act (41 U.S.C. 46-48), are eligible to participate in the program as a
result of 10 U.S.C. 2410d and Section 9077 of Pub. L. 102-396 and
similar sections in subsequent Defense appropriations acts. Under this
authority, subcontracts awarded to such entities may be counted toward
the prime contractor's small business subcontracting goal through
fiscal year 1999.
* * * * *
219.7104 [Amended]
24. Section 719.7104 is amended in the last sentence of paragraph
(b) and in paragraph (d) by revising the date ``October 1, 1999'' to
read ``October 1, 2000''.
PART 223--ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY, AND DRUG-
FREE WORKPLACE
25. Section 223.404 is amended by revising paragraph (b)(3)
introductory text and paragraph (b)(4) to read as follows:
[[Page 11531]]
223.404 Procedures.
(b)(3) A contract for an EPA designated item that does not meet the
EPA minimum recovered material standards shall not be awarded before
approval of the written determination required by FAR 23.404(b)(3). The
approving official shall be--
* * * * *
(4) Departments and agencies shall centrally collect information
submitted in accordance with the clause at FAR 52.223-9 for reporting
to the cognizant activity in the Office of the Secretary of Defense.
PART 225--FOREIGN ACQUISITION
26. Section 225.000-70 is amended by revising paragraphs (c), (j),
and (m) to read as follows:
225.000-70 Definitions.
* * * * *
(c) Domestic end product has the meaning given in the clauses at
252.225-7001, Buy American Act and Balance of Payments Program;
252.225-7007, Buy American Act--Trade Agreements--Balance of Payments
Program; and 252.225-7036, Buy American Act--North American Free Trade
Agreement Implementation Act--Balance of Payments Program, instead of
the meaning in FAR 25.101.
* * * * *
(j) Qualifying country component and qualifying country end product
are defined in the clauses at 252.225-7001, Buy American Act and
Balance of Payments Program; 252.225-7007, Buy American Act--Trade
Agreements--Balance of Payments Program; and 252.225-7036, Buy American
Act--North American Free Trade Agreement Implementation Act--Balance of
Payments Program. ``Qualifying country end product'' is also defined in
the clause at 252.225-7021, Trade Agreements.
* * * * *
(m) U.S. made end product is defined in the clause at 252.225-7007,
Buy American Act--Trade Agreements--Balance of Payments Program and;
252.225-7021, Trade Agreements.
27. Section 225.000-71 is amended by revising paragraphs (a)(1)(i)
and (c)(2) to read as follows:
225.000-71 General guidelines.
* * * * *
(a) * * *
(1) * * *
(i) Defense authorization or appropriations acts (see Subpart
225.70); or
* * * * *
(c) * * *
(2) If the product is an eligible product under Subpart 225.4,
evaluate the offer under FAR 25.402, 225.105, and 225.402.
* * * * *
28. Section 225.102 is amended by revising paragraph (a)(3)(A); by
redesignating paragraphs (a)(3)(B) and (a)(3)(C) as paragraphs
(a)(3)(C) and (a)(3)(D), respectively; and by adding a new paragraph
(a)(3)(B) to read as follows:
225.102 Policy.
(a) * * *
(3)(A) Specific public interest exceptions for DoD for certain
countries are in 225.872.
(B) The Under Secretary of Defense (Acquisition and Technology) has
determined that, for procurements subject to the Trade Agreements Act,
it is inconsistent with the public interest to apply the Buy American
Act to information technology products in Federal Supply Group 70 or 74
that are substantially transformed in the United States.
* * * * *
29. Section 225.105 is amended by revising the introductory text
and paragraphs (1), (2), and (3); and in Table 25-1 by revising
Examples 2 and 3 to read as follows:
225.105 Evaluating offers.
Use the following procedures instead of those in FAR 25.105. These
procedures do not apply to acquisitions of information technology end
products in Federal Supply Group 70 or 74 that are subject to the Trade
Agreements Act.
(1) Treat offers of eligible end products under acquisitions
subject to the Trade Agreements Act or NAFTA as if they were qualifying
country offers. As used in this section, the term ``nonqualifying
country offer'' may also apply to an offer that is not an eligible
offer under a trade agreement (see Example 4 in Table 25-1,
Evaluation).
(2) Except as provided in paragraph (3) of this section, evaluate
offers by adding a 50 percent factor to the price (including duty) of
each nonqualifying country offer (see Example 1 in Table 25-1,
Evaluation).
(i) Nonqualifying country offers include duty in the offered price.
When applying the factor, evaluate based on the inclusion of duty,
whether or not duty is to be exempted. If award is made on the
nonqualifying country offer and duty is to be exempted through
inclusion of the clause at FAR 52.225-10, Duty-Free Entry, award at the
offered price minus the amount of duty identified in the provision at
252.225-7003, Information for Duty-Free Entry Evaluation. See Example
1, Alternate II, in Table 25-1, Evaluation.
(ii) When a nonqualifying country offer includes more than one line
item, apply the 50 percent factor--
(A) On an item-by-item basis; or
(B) On a group of items, if the solicitation specifically provides
for award on a group basis.
(3) When application of the factor would not result in the award of
a domestic end product, i.e., when no domestic offers are received (see
Example 3 of Table 25-1, Evaluation) or when a qualifying country offer
is lower than the domestic offer (see Example 2 of Table 25-1,
Evaluation), evaluate nonqualifying country offers without the 50
percent factor.
(i) If duty is to be exempted through inclusion of the clause at
FAR 52.225-10, Duty-Free Entry, evaluate the nonqualifying country
offer exclusive of duty by reducing the offered price by the amount of
duty identified in the clause at 252.225-7003, Information for Duty-
Free Entry Evaluation (see Examples 2 and 3, Alternate II, of Table 25-
1, Evaluation). If award is made on the nonqualifying country offer,
award at the offered price minus duty.
(ii) If duty is not to be exempted, evaluate the nonqualifying
country offer inclusive of duty. (See Examples 2 and 3, Alternate I, of
Table 25-1, Evaluation.)
* * * * *
Table 25-1.--Evaluation
------------------------------------------------------------------------
------------------------------------------------------------------------
* * * *
* * *
Example 2
------------------------------------------------------------------------
Alternate I: Duty Not Exempted for Nonqualifying Country
Offers:
Nonqualifying Country Offer (including $100 duty)...... $6,000
Domestic Offer......................................... 8,500
Qualifying Country Offer............................... 7,800
[[Page 11532]]
Award on Nonqualifying Country Offer. Since the qualifying country
offer is lower than the domestic offer, the nonqualifying country offer
is evaluated without the factor. Since duty is not being exempted for
nonqualifying country offers, the offer is evaluated and award is made
at the price inclusive of duty ($6,000).
Alternate II: Duty Exempted:
Nonqualifying Country Offer (including $1,000 duty).... $880,500
Domestic Offer......................................... 950,000
Qualifying Country Offer............................... 880,000
Award on Nonqualifying Country Offer. Again, the qualifying country
offer is lower than the domestic offer. The nonqualifying country offer
is, therefore, evaluated without the factor. Since duty is being
exempted for nonqualifying country offers, the duty identified by the
offeror is subtracted from the offered price, which is evaluated and
awarded at $879,500.
------------------------------------------------------------------------
Example 3
------------------------------------------------------------------------
Alternate I: Duty Not Exempted for Nonqualifying Country
Offers:
Nonqualifying Country Offer (including $150 duty)...... $9,600
Qualifying Country Offer............................... 9,500
Award on Qualifying Country Offer. Since no domestic offers are
received, the nonqualifying country offer is evaluated without the
evaluation factor. Since duty is not being exempted and would be paid by
the Government, the nonqualifying country offer is evaluated inclusive
of duty.
Alternate II: Duty Exempted:
Nonqualifying Country Offer (including $1,000 duty).... $880,500
Qualifying Country Offer............................... 880,000
Award on Nonqualifying Country Offer. Since no domestic offers are
received, the nonqualifying country offer is evaluated without the
evaluation factor. Since duty is being exempted, duty is subtracted from
the nonqualifying country offer, which is evaluated and awarded at
$879,500.
* * * *
* * *
------------------------------------------------------------------------
30. Section 225.109 is amended in paragraph (a) by revising the
last sentence; in the introductory text of paragraph (d) by removing
the word ``which'' and inserting in its place the word ``that''; and by
revising paragraph (d)(i) to read as follows:
225.109 Solicitation provisions and contract clauses.
(a) * * * Use the provision in any solicitation that includes the
clause at 252.225-7001, Buy American Act and Balance of Payments
Program.
* * * * *
(d) * * *
(i) Do not use the clause if an exception to the Buy American Act
or Balance of Payments Program is known to apply or if using the clause
at 252.225-7007, Buy American Act--Trade Agreements--Balance of
Payments Program; 252.225-7021, Trade Agreements; or 252.225-7036, Buy
American Act--North American Free Trade Agreement Implementation Act--
Balance of Payments Program.
* * * * *
31. Section 225.109-70 is revised to read as follows:
225.109-70 Additional provisions and clauses.
(a) Use the clause at 252.225-7002, Qualifying Country Sources as
Subcontractors, in solicitations and contracts that include one of the
following clauses:
(1) 252.225-7001, Buy American Act and Balance of Payments Program.
(2) 252.225-7007, Buy American Act--Trade Agreements--Balance of
Payments Program.
(3) 252.225-7021, Trade Agreements.
(4) 252.225-7036, Buy American Act--North American Trade Agreement
Implementation Act--Balance of Payments Program.
(b) When only domestic end products are acceptable, the
solicitation must make a statement to that effect.
32. Section 225.302 is amended by revising paragraphs (a)(iii) and
(a)(iv); by adding a new paragraph (a)(v); in paragraph (b)(i) under
the heading ``ARMY'' by removing the entry ``Deputy Chief of Staff for
Procurement U.S. Army Material Command'' and inserting in its place the
entry ``Deputy Chief of Staff for Research, Development and
Acquisition, Headquarters, U.S. Army Material Command''; and in
paragraph (b)(i) by removing the heading ``DEFENSE MAPPING AGENCY'' and
inserting in its place the heading ``NATIONAL IMAGERY AND MAPPING
AGENCY''. The revised and added text reads as follows:
225.302 Policy.
(a) * * *
(iii) Do not apply to qualifying country end products;
(iv) Do not apply to articles, materials, or supplies produced or
manufactured in Panama when purchased by and for the use of U.S. forces
in Panama; and
(v) For acquisitions subject to the Trade Agreements Act, do not
apply to information technology products in Federal Supply Group 70 or
74 that are substantially transformed in the United States.
* * * * *
33. Section 225.402 is amended by revising paragraph (a)(1) to read
as follows:
225.402 Policy.
(a) * * *
(1) See 225.105 for evaluation of eligible products and U.S. made
end products, except when acquiring information technology end products
in Federal Supply Group 70 or 74 that are subject to the Trade
Agreements Act.
* * * * *
34. Section 225.408 is revised to read as follows:
225.408 Solicitation provisions and contract clauses.
(a)(i) Use the provision at 252.225-7006, Buy American Act--Trade
Agreements--Balance of Payments Program Certificate, instead of the
provision at FAR 52.225-8, Buy American Act--Trade Agreements--Balance
of Payments Program Certificate, in all solicitations that include the
clause at 252.225-7007, Buy American Act--Trade Agreements--Balance of
Payments Program.
(ii) Except as provided in paragraph (a)(iv) of this section, use
the clause at 252.225-7007, Buy American--Trade Agreements--Balance of
Payment Program, instead of the clause at FAR 52.225-9, Buy American
Act-Trade Agreements-Balance of Payment Program. The clause need not be
used where purchase from foreign sources is
[[Page 11533]]
restricted (see 225.403(c)(1)(B)). The clause may be used where the
contracting officer anticipates a waiver of the restriction. For
procurements by the U.S. Army Corps of Engineers, use the clause with
its Alternate I.
(iii) Use the provision at 252.225-7020, Trade Agreements
Certificate, in all solicitations that include the clause at 252.225-
7021, Trade Agreements.
(iv) Use the clause at 252.225-7021, Trade Agreements, instead of
the clause at FAR 52.225-9, Buy American Act--Trade Agreements--Balance
of Payments Program, when acquiring information technology products in
Federal Supply Group 70 or 74. For procurements by the U.S. Army Corps
of Engineers, use the clause with its Alternate I.
(v)(A) Use the provision at 252.225-7035, Buy American Act--North
American Free Trade Agreement Implementation Act--Balance of Payment
Program Certificate, instead of the provision at FAR 52.225-20, Buy
American Act--North American Free Trade Agreement Implementation Act--
Balance of Payments Program Certificate, in all solicitations that
include the clause at 252.225-7036, Buy American Act--North American
Free Trade Agreement Implementation Act--Balance of Payments Program.
(B)(1) Use the basic provision when the basic clause at 252.225-
7036 is used.
(2) Use the provision with its Alternate I when the clause at
252.225-7036 is used with its Alternate I.
(vi)(A) Use the clause at 252.225-7036, Buy American Act--North
American Free Trade Agreement Implementation Act--Balance of Payments
Program, instead of the clause at FAR 52.225-21, Buy American Act--
North American Free Trade Agreement Implementation Act--Balance of
Payments Program. The clause need not be used where purchase from
foreign sources is restricted (see 225.403(c)(1)(B)). The clause may be
used where the contracting officer anticipates a waiver of the
restriction.
(B)(1) Use the clause in all solicitations and contracts for the
items listed at 225.403-70, when the estimated value is $53,150 or more
and the Trade Agreements Act does not apply. Include the clause in
solicitations for multiple line items if any line item is subject to
NAFTA.
(2) Use the clause with its Alternate I when the estimated value is
between $25,000 and $53,150.
(C) Application of the procedures in 225.402(a) and the acquisition
of noneligible and eligible products under the same solicitation may
result in the application of the North American Free Trade Agreement
Implementation Act to only some of the items solicited. In such case,
indicate in the schedule those items covered by the Act.
35. Section 225.602 is amended by revising the introductory text of
paragraph (3) to read as follows:
225.602 Policy.
* * * * *
(3) Unless the supplies are entitled to duty-free treatment under a
special category in the Harmonized Tariff Schedule of the United States
(e.g., the Caribbean Basin Economic Recovery Act or NAFTA), or unless
the supplies already have entered into the customs territory of the
United States and duty already has been paid, DoD will issue duty-free
entry certificates for--
* * * * *
36. Section 225.603 is amended by redesignating the text preceding
paragraph (b) as paragraph (a); by revising newly designated paragraph
(a); and in paragraph (b)(i)(D) introductory text, paragraph (b)(i)(E),
and twice in paragraph (b)(ii) by removing ``DCMAO'' and inserting in
its place ``DCMC''. The revised text reads as follows:
225.603 Procedures.
(a) General.
(i) Preaward.
(A) Unless duty was paid prior to submission of the offer, an offer
of domestic end products with no nonqualifying country components, an
offer of qualifying country end products, or an offer of eligible
products under the Trade Agreements Act or NAFTA, should not include
duty.
(B) Offers of U.S. made end products with nonqualifying country
components, and offers that are neither qualifying country offers nor
offers of eligible products under a trade agreement, should contain
applicable duty.
(C) Exclude from the evaluation of domestic end products, or
information technology end products in Federal Supply Group 70 or 74 in
acquisitions subject to the Trade Agreements Act, any duty for
nonqualifying country components listed in the provision at 252.225-
7003, Information for Duty-Free Entry Evaluation, for which duty-free
entry will be granted.
(D) Except for acquisitions of information technology end products
in Federal Supply Group 70 or 74 subject to the Trade Agreements Act,
apply the evaluation procedures for the Buy American Act in accordance
with 225.105.
(ii) Award. Exclude duty from the contract price for supplies (end
products or components) that are to be accorded duty-free entry. If
duty-free entry is granted to the successful offeror in accordance with
the clause at FAR 52.225-10, Duty-Free Entry, and the clause at
252.225-7003, Information for Duty-Free Entry Evaluation, request that
the offeror provide the list of foreign supplies that are subject to
such duty-free entry, and list such supplies in the contract clause at
252.225-7008, Supplies to be Accorded Duty-Free Entry.
(iii) Postaward.
(A) Issue duty-free entry certificates for all qualifying country
supplies in accordance with the policy at 225.602(3)(i) and the clause
at 252.225-7009, Duty-Free Entry--Qualifying Country Supplies (End
Products and Components); for all eligible products subject to trade
agreements in accordance with the policy at 225.602(3)(ii) and the
clause at 252.225-7037, Duty-Free Entry--Eligible End Products; and for
other foreign supplies in accordance with the policy at 225.602(3)(iii)
on contracts containing the clause at FAR 52.225-10, Duty-Free Entry;
or (following to the extent practicable the procedures required by the
clause at FAR 52.225-10, Duty-Free Entry, and the clause at 252.225-
7010, Duty-Free Entry--Additional Provisions) on other contracts--
(1) That fall within one of the following categories:
(i) Direct purchases of foreign supplies under a DoD prime
contract, whether title passes at point of origin or at destination in
the United States, provided the contract states that the final price is
exclusive of duty.
(ii) Purchases of foreign supplies by a domestic prime contractor
under a cost-reimbursement type contract or by a cost-reimbursement
type subcontractor (where no fixed-price prime or fixed-price
subcontract intervenes between the purchaser and the Government),
whether title passes at point of origin or at destination in the United
States. If a fixed-price prime or fixed-price subcontract intervenes,
follow the criteria stated in paragraph (a)(iii)(A)(1)(iii) of this
section.
(iii) Purchases of foreign supplies by a fixed-price domestic prime
contractor, a fixed-price subcontractor, or a cost-type subcontractor
where a fixed-prime contract or fixed-price subcontract intervenes,
provided the fixed-price prime contract and, where applicable, fixed-
price subcontract prices are, or are amended to be, exclusive of duty.
(2) For which the supplies so purchased will be delivered to the
[[Page 11534]]
Government or incorporated in Government-owned property or in an end
product to be furnished to the Government, and for which duty will be
paid if such supplies or any portion are used for other than the
performance of the Government contract or disposed of other than for
the benefit of the Government in accordance with the contract terms;
and
(3) For which such acquisition abroad is authorized by the terms of
the contract or subcontract or by the contracting officer.
(B) Under a fixed-price contract, negotiate an equitable reduction
in the contract price if duty-free entry is granted for any
nonqualifying country component not listed in the Schedule as duty-
free, even if contract award was based on furnishing a domestic
component or a qualifying country component.
* * * * *
37. Section 225.605-70 is revised to read as follows:
225.605-70 Additional solicitation provisions and contract clauses.
(a) Use the clause at 252.225-7009, Duty-Free Entry--Qualifying
Country Supplies (End Products and Components), in solicitations and
contracts for supplies and in solicitations and contracts for services
involving the furnishing of supplies, except for solicitations and
contracts for supplies for exclusive use outside the United States.
(b) Use the clause at 252.225-7037, Duty-Free Entry--Eligible End
Products, in solicitations and contracts for supplies and services when
the clause at 252.225-7007, Buy American Act--Trade Agreements--Balance
of Payments Program; 252.225-7021, Trade Agreements; or 252.225-7036,
Buy American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program, is used.
(c) Use the clause at 252.225-7010, Duty-Free Entry--Additional
Provisions, in solicitations and contracts that include the clause at
FAR 52.225-10, Duty-Free Entry.
(d) Use the provision at 252.225-7003, Information for Duty-Free
Entry Evaluation, in solicitations that include the clause at FAR
52.225-10, Duty-Free Entry. Use the provision with its Alternate I when
the clause at 252.225-7021, Trade Agreements, is used.
(e) Use the clause at 252.225-7008, Supplies to be Accorded Duty-
Free Entry, in solicitations and contracts that provide for duty-free
entry and that include the clause at FAR 52.225-10, Duty-Free Entry.
38. Section 225.872-4 is amended by revising the last sentence of
the introductory text of paragraph (c), and paragraph (c)(2)4, to read
as follows:
225.872-4 Evaluation of offers.
* * * * *
(c) * * * If the offer, as evaluated, is low or otherwise eligible
for award, the contracting officer shall request an exemption of the
Buy American Act/Balance of Payments Program as inconsistent with the
public interest, unless another exception such as the Trade Agreements
Act applies.
* * * * *
(2) * * *
4. To achieve the above objectives, the solicitation contained
the (title and number of the Buy American Act clause contained in
the contract). Offers were solicited from other sources and the
offer received for (qualifying country end item) is found to be
otherwise eligible for award.
* * * * *
225.7011-4 [Amended]
39. Section 225.7011-4 is amended in paragraph (b)(3) by removing
the reference ``15.5'' and inserting in its place the reference
``15.6''.
40. Section 225.7303-4 is revised to read as follows:
225.7303-4 Contingent fees.
(a) Except as provided in paragraph (b) of this subsection,
contingent fees are generally allowable under DoD contracts, provided
the fees are determined by the contracting officer to be fair and
reasonable and are paid to a bona fide employee or a bona fide
established commercial or selling agency maintained by the prospective
contractor for the purpose of securing business (see FAR Part 31 and
FAR Subpart 3.4).
(b)(1) Under DoD 5105.38-M, Security Assistance Management Manual,
Letters of Offer and Acceptance for requirements for the governments of
Australia, Taiwan, Egypt, Greece, Israel, Japan, Jordan, Republic of
Korea, Kuwait, Pakistan, Philippines, Saudi Arabia, Turkey, Thailand,
or Venezuela (Air Force) must provide that all U.S. Government
contracts resulting from the Letters of Offer and Acceptance prohibit
the reimbursement of contingent fees as an allowable cost under the
contract, unless the payments have been identified and approved in
writing by the foreign customer before contract award (see
225.7308(a)).
(2) For FMS to countries not listed in paragraph (b)(1) of this
subsection, contingent fees exceeding $50,000 per FMS case shall be
unallowable under DoD contracts, unless payment has been identified and
approved in writing by the foreign customer before contract award.
PART 226--OTHER SOCIOECONOMIC PROGRAMS
41. Section 226.103 is revised to read as follows:
226.103 Procedures.
(f) The contracting officer shall submit a request for funding of
the Indian incentive to the Office of Small and Disadvantaged Business
Utilization, Office of the Under Secretary of Defense for Acquisition
and Technology, OUSD(A&T)SADBU, Room 2A340, 3061 Defense Pentagon,
Washington, DC 20301-3061. Upon receipt of funding from OUSD(A&T)SADBU,
the contracting officer shall issue a contract modification to add the
Indian incentive funding for payment of the contractor's request for
equitable adjustment as described at FAR 52.226-1, Utilization of
Indian Organizations and Indian-Owned Economic Enterprises.
42. Section 226.104 is added to read as follows:
226.104 Contract clause.
(a) Also use the clause at FAR 52.226-1, Utilization of Indian
Organizations and Indian-Owned Economic Enterprises, in contracts--
(i) With contractors that have comprehensive subcontracting plans
approved under the test program described at 219.702(a); and
(ii) That contain the clause at 252.219-7004, Small, Small
disadvantaged and Women-Owned Small Business Subcontracting Plan (Test
Program).
PART 227--PATENTS, DATA, AND COPYRIGHTS
43. Section 227.676 is amended by revising paragraph (b) to read as
follows:
227.676 Foreign patent interchange agreements.
* * * * *
(b) Assistance with patent rights and royalty payments in the
United States European Command (USEUCOM) area of responsibility is
available from HQ USEUCOM, ATTN: ECLA, Unit 30400, Box 1000, APO AE
09128; Telephone: DSN 430-8001/7263, Commercial 49-0711-680-8001/7263;
Telefax: 49-0711-680-5732.
PART 229--TAXES
44. Section 229.101 is amended in paragraph (d)(i) by revising the
last sentence to read as follows:
[[Page 11535]]
229.101 Resolving tax problems.
* * * * *
(d)(i) * * * For further information contact HQ USEUCOM, ATTN:
ECLA, Unit 30400, Box 1000, APO AE 09128; Telephone: DSN 430-8001/7263,
Commercial 49-0711-680-8001/7263; Telefax. 49-0711-680-5732.
* * * * *
PART 231--CONTRACT COST PRINCIPLES AND PROCEDURES
231.205-71 [Removed]
45. Section 231.205-71 is removed.
PART 232--CONTRACT FINANCING
46. Sections 232.006, 232,006-5, 232.070, 232.071, 232.072,
232.072-1, 232.072-2 and 232.072-3 are added to read as follows:
232.006 Reduction or suspension of contract payments upon finding of
fraud.
232.006-5 Reporting.
Departments and agencies in accordance with department/agency
procedures, shall prepare and submit to the Under Secretary of Defense
(Acquisition and Technology), through the Director of Defense
Procurement, annual reports (Report Control Symbol DD-ACQ(A) 1891)
containing the information required by FAR 32.006-5.
232.070 Responsibilities.
(a) The Director of Defense Procurement, Office of the Under
Secretary of Defense (Acquisition and Technology) (OUSD(A&T)DP) is
responsible for ensuring uniform administration of DoD contract
financing, including DoD contract financing policies and important
related procedures. Agency discretion under FAR Part 32 is at the DoD
level and is not delegated to the departments and agencies. Proposals
by the departments and agencies, to exercise agency discretion, shall
be submitted to OUSD(A&T)DP through the DoD Contract Finance Committee
(see 232.071).
(b) Departments and agencies are responsible for their day-to-day
contract financing operations. Refer specific cases involving financing
policy or important procedural issues to OUSD(A&T)DP for consideration
through the department/agency Contract Finance Committee members (also
see Subpart 204.1 for deviation request and approval procedures).
(c) The Under or Assistant Secretary, or other designated official,
responsible for the comptroller function within the department or
agency is the focal point for financing matters at the department/
agency headquarters. Departments and agencies may establish contract
financing offices at operational levels.
(1) Department/agency contract financing offices are--
(i) Army: Office of the Assistant Secretary of the Army (Financial
Management);
(ii) Navy: Office of the Assistant Secretary of the Navy (Financial
Management and Comptroller), Office of Financial Operations;
(iii) Air Force: Air Force Contract Financing Office (SAF/FMPB);
(iv) Defense agencies: Office of the agency comptroller.
(2) Contract financing offices should participate in--
(i) Developing regulations for contract financing;
(ii) Developing contract provisions for contract financing; and
(iii) Resolving specific cases that involve unusual contract
financing requirements.
232.071 Contract Finance Committee.
(a) The Contract Finance Committee consists of--
(1) A representative of OUSD(A&T)DP, serving as the Chair;
(2) A representative of the Comptroller of the Department of
Defense;
(3) A representative of the Defense Finance and Accounting Service;
(4) A representative of the Civilian Agency Acquisition Council
(for matters pertaining to the FAR);
(5) A representative of the National Aeronautics and Space
Administration (for matters pertaining to the FAR);
(6) An advisory consultant from the Defense Contract Audit Agency;
and
(7) Two representatives of each military department and the Defense
Logistics Agency (one representing contracting and one representing the
contract finance office).
(b) The Committee--
(1) Advises and assists OUSD(A&T)DP in ensuring proper and uniform
application of policies, procedures, and forms;
(2) Is responsible for formulating, revising, and promulgating
uniform contract financing regulations;
(3) May recommend to the Secretary of Defense through OUSD(A&T)DP
further policy directives on financing; and
(4) Meets at the request of the Chair or a member.
232.072 Financial responsibility of contractors.
Use the policies and procedures in this section in determining the
financial capability of current or prospective contractors.
232.072-1 Required financial reviews.
The contracting officer shall perform a financial review when the
contracting officer does not otherwise have sufficient information to
make a positive determination of financial responsibility. In addition,
the contracting officer shall consider performing a financial review--
(a) Prior to award of a contract, when--
(1) The contractor is on a list requiring preaward clearance or
other special clearance before award;
(2) The contractor is listed on the Consolidated List of
Contractors Indebted to the Government (Hold-Up List), or is otherwise
known to be indebted to the Government;
(3) The contractor may receive Government assets such as contract
financing payments or Government property;
(4) The contractor is experiencing performance difficulties on
other work; or
(5) The contractor is a new company or a new supplier of the item.
(b) At periodic intervals after award of a contract, when--
(1) Any of the conditions in paragraphs (a)(2) through (a)(5) of
this subsection are applicable; or
(2) There is any other reason to question the contractor's ability
to finance performance and completion of the contract.
232.072-2 Appropriate information.
(a) The contracting officer shall obtain the type and depth of
financial and other information that is required to establish a
contractor's financial capability or disclose a contractor's financial
condition. While the contracting officer should not request information
that is not necessary for protection for the Government's interests,
the contracting officer must insist upon obtaining the information that
is necessary. The unwillingness or inability of a contractor to present
reasonably requested information in a timely manner, especially
information that a prudent business person would be expected to have
and to use in the professional management of a business, may be a
material fact in the determination of the contractor's responsibility
and prospects for contract completion.
(b) The contracting officer shall obtain the following information
to the extent required to protect the Government's interest. In
addition, if the contracting officer concludes that information not
listed in paragraphs (b)(1) through (b)(10) of this subsection is
required to comply with 232.072-1, that
[[Page 11536]]
information should be requested. The information must be for the
person(s) who are legally liable for contract performance. If the
contractor is not a corporation, the contracting officer shall obtain
the required information for each individual/joint venturer/partner:
(1) Balance sheet and income statement--
(i) For the current fiscal year (interim);
(ii) For the most recent fiscal year and, preferably, for the 2
preceding fiscal years. These should be certified by an independent
public accountant or by an appropriate officer of the firm; and
(iii) Forecasted for each fiscal year for the remainder of the
period of contract performance.
(2) Summary history of the contractor and its principal managers,
disclosing any previous insolvencies--corporate or personal, and
describing its products or services.
(3) Statement of all affiliations disclosing--
(i) Material financial interests of the contractor;
(ii) Material financial interests in the contractor;
(iii) Material affiliations of owners, officers, directors, major
stockholders; and
(iv) The major stockholders if the contractor is not a widely-
traded, publicly-held corporation.
(4) Statement of all forms of compensation to each officer,
manager, partner, joint venturer, or proprietor, as appropriate--
(i) Planned for the current year;
(ii) Paid during the past 2 years; and
(iii) Deferred to future periods.
(5) Business base and forecast that--
(i) Shows, by significant markets, existing contracts and
outstanding offers, including those under negotiation; and
(ii) Is reconcilable to indirect cost rate projections.
(6) Cash forecast for the duration of the contract (see 232.072-3).
(7) Financing arrangement information that discloses--
(i) Availability of cash to finance contract performance;
(ii) Contractor's exposure to financial crisis from creditor's
demands;
(iii) Degree to which credit security provisions could conflict
with Government title terms under contract financing;
(iv) Clearly stated confirmations of credit with no unacceptable
qualifications;
(v) Unambiguous written agreement by a creditor if credit
arrangements include deferred trade payments or creditor
subordinations/repayment suspensions.
(8) Statement of all state, local, and Federal tax accounts,
including special mandatory contributions, e.g., environmental
superfund.
(9) Description and explanation of the financial effect of issues
such as--
(i) Leases, deferred purchase arrangements, or patent or royalty
arrangements;
(ii) Insurance, when relevant to the contract;
(iii) Contemplated capital expenditures, changes in equity, or
contractor debt load;
(iv) Pending claims either by or against the contractor;
(v) Contingent liabilities such as guarantees, litigation,
environmental, or product liabilities;
(vi) Validity of accounts receivable and actual value of inventory,
as assets; and
(vii) Status and aging of accounts payable.
(10) Significant ratios such as--
(i) Inventory to annual sales;
(ii) Inventory to current assets;
(iii) Liquid assets to current assets;
(iv) Liquid assets to current liabilities;
(v) Current assets to current liabilities; and
(vi) Net worth to net debt.
232.072-3 Cash flow forecasts.
(a) A contractor must be able to sustain a sufficient cash flow to
perform the contract. When there is doubt regarding the sufficiency of
a contractor's cash flow, the contracting officer should require the
contractor to submit a cash flow forecast covering the duration of the
contract.
(b) A contractor's inability of refusal to prepare and provide cash
flow forecasts or to reconcile actual cash flow with previous forecasts
is a strong indicator of serious managerial deficiencies or potential
contract cost or performance problems.
(c) Single or one-time cash flow forecasts are of limited
forecasting power. As such, they should be limited to preaward survey
situations. Reliability of cash flow forecasts can be established only
by comparing a series of previous actual cash flows with the
corresponding forecasts and examining the causes of any differences.
(d) Cash flow forecasts must--
(1) Show the origin and use of all material amounts of cash within
the entire business unit responsible for contract performance, period
by period, for the length of the contract (or until the risk of a cash
crisis ends); and
(2) Provide an audit trail to the data and assumptions used to
prepare it.
(e) Cash flow forecasts can be no more reliable than the
assumptions on which they are based. Most important of these
assumptions are--
(1) Estimated amounts and timing of purchases and payments for
materials, parts, components, subassemblies, and services;
(2) Estimated amounts and timing of payments of purchase or
production of capital assets, test facilities, and tooling;
(3) Amounts and timing of fixed cash charges such as debt
installments, interest, rentals, taxes, and indirect costs;
(4) Estimated amounts and timing of payments for projected labor,
both direct and indirect;
(5) Reasonableness of projected manufacturing and production
schedules;
(6) Estimated amounts and timing of billings to customers
(including progress payments), and customer payments;
(7) Estimated amounts and timing of cash receipts from lenders or
other credit sources, and liquidation of loans; and
(8) Estimated amount and timing of cash receipt from other sources.
(f) The contracting officer should review the assumptions
underlying the cash flow forecasts. In determining whether the
assumptions are reasonable and realistic, the contracting officer
should consult with--
(1) The contractor;
(2) Government personnel in the areas of finance, engineering,
production, cost, and price analysis; or
(3) Prospective supply, subcontract, and loan or credit sources.
47. Subpart 232.1 is revised to read as follows:
Subpart 232.1--Non-Commercial Item Purchase Financing
Sec.
232.102 Description of contract financing methods.
232.102-70 Provisional delivery payments.
232.108 Financial consultation.
232.102 Description of contract financing methods.
(e)(2) Progress payments based on percentage or stage of completion
are authorized only for contracts for construction (as defined in FAR
36.102), shipbuilding, and ship conversion, alteration, or repair.
However, percentage or state of completion methods of measuring
contractor performance may be used for performance-based payments in
accordance with FAR Subpart 32.10.
232.102-70 Provisional delivery payments.
(a) The contracting officer may establish provisional delivery
payments
[[Page 11537]]
to pay contractors for the costs of supplies and services delivered to
and accepted by the Government under the following contract actions if
undefinitized:
(1) Letter contracts contemplating a fixed-price contract.
(2) Orders under basic ordering agreements.
(3) Spares provisioning documents annexed to contracts.
(4) Unpriced equitable adjustments on fixed-price contracts.
(5) Orders under indefinite-delivery contracts.
(b) Provisional delivery payments shall be--
(1) Used sparingly;
(2) Priced conservatively; and
(3) Reduced by liquidating previous progress payments in accordance
with the Progress Payments clause.
(c) Provisional delivery payments shall not--
(1) Include profit;
(2) Exceed funds obligated for the undefinitized contract action;
or
(3) Influence the definitized contract price.
232.108 Financial consultation.
See 232.070 for offices to be consulted regarding financial matters
with DoD.
48. Subpart 232.2 is added to read as follows:
Subpart 232.2--Commercial Item Purchase Financing
Sec.
232.202-4 Security for Government financing.
232.206 Solicitation provisions and contract clauses.
232.207 Administration and payment of commercial financing
payments.
232.202-4 Security for Government financing.
(a)(2) When determining whether an offeror's financial condition is
adequate security, see 232.072-2 and 232.072-3 for guidance. It should
be noted that an offeror's financial condition may be sufficient to
make the contractor responsible for award purposes, but may not be
adequate security for commercial contract financing.
232.206 Solicitation provisions and contract clauses.
(d) Instructions for multiple appropriations. If the contract
contains foreign military sales requirements, the contracting officer
shall provide instructions for distribution of the contract financing
payments to each country's account.
(f) Prompt payment for commercial purchase payments. The
contracting officer shall incorporate the following standard prompt
payment terms for commercial item contract financing:
(i) Commercial advance payments: The contractor entitlement date
specified in the contract, or 30 days after receipt by the designated
billing office of a proper request for payment, whichever is later.
(ii) Commercial interim payments: The contractor entitlement date
specified in the contract, or 14 days after receipt by the designated
billing office of a proper request for payment, whichever is later. The
prompt payment standards for commercial delivery payments shall be the
same as specified in FAR Subpart 32.9 for invoice payments for the item
delivered.
(g) Installment payment financing for commercial items. Installment
payment financing shall not be used for DoD contracts, unless market
research has established that this form of contract financing is both
appropriate and customary in the commercial marketplace. When
installment payment financing is used, the contracting officer shall
use the ceiling percentage of contract price that is customary in the
particular marketplace (not to exceed the maximum rate established in
FAR 52.232-30).
232.207 Administration and payment of commercial financing payments.
(b)(2) If the contract contains foreign military sales
requirements, each approval shall specify the amount of contract
financing to be charged to each country's account.
232.502-1-71 [Amended]
49. Section 232.502-1-71 is amended in paragraph (b)(3) by removing
the reference ``15.801'' and inserting in its place the reference
``15.401''.
232.970 through 232.970-2 [Removed]
50. Sections 232.970 through 232.970-2 are removed.
51. Subpart 232.10 is added to read as follows:
Subpart 232.10--Performance-Based Payments
Sec.
232.1001 Policy.
232.1004 Procedure.
232.1007 Administration and payment of performance-based payments.
232.1001 Policy.
(d) The contracting officer shall use the following standard prompt
payment terms for performance-based payments: The contractor
entitlement date, if any, specified in the contract, or 14 days after
receipt by the designated billing office of a proper request for
payment, whichever is later.
232.100 Procedure.
(c) Instructions for multiple appropriations. If the contract
contains foreign military sales requirements, the contracting officer
shall provide instructions for distribution of the contract financing
payments to each country's account.
232.1007 Administration and payment of performance-based payments.
(b)(2) If the contract contains foreign military sales
requirements, each approval shall specify the amount of contract
financing to be charged to each country's account.
PART 233--PROTESTS, DISPUTES, AND APPEALS
52. Section 233.204-70 is added to read as follows:
233.204-70 Limitations on payment.
See 10 U.S.C. 2410(b) for limitations on Congressionally directed
payment of a claim under the Contract Disputes Act of 1978, a request
for equitable adjustment to contract terms, or a request for relied
under Pub. L. 85-804.
PART 234--MAJOR SYSTEM ACQUISITION
234.005-70 [Amended]
53. Section 234.005-70 is amended in the first sentence by
inserting the phrase ``paragraph (b) of'' after the phrase ``in
accordance with''.
PART 235--RESEARCH AND DEVELOPMENT CONTRACTING
54. Section 235.001 is revised to read as follows:
235.001 Definitions.
As defined in DoD 7000.14-R, Financial Management Regulations, and
as used in this part--
(a) Basic research (Category 6.1) means all effort of scientific
study and experimentation directed toward increasing knowledge and
understanding in those fields of the physical, engineering,
environmental, and life sciences related to long-term national security
needs. It provides farsighted, high-payoff research, including critical
enabling technologies that provide the basis for technological
progress. It forms a part of the base for:
(1) Subsequent applied research (exploratory development); and
advanced technology developments in Defense-related technologies; and
(2) New and improved military functional capabilities in areas such
as communications, detection, tracking, surveillance, propulsion,
mobility, guidance and control, navigation,
[[Page 11538]]
energy conversion, materials and structures, and personnel support.
(b) Applied research (Category 6.2) means effort that translates
promising basic research into solutions for broadly defined military
needs, short or major development projects. This type of effort may
vary from fairly fundamental applied research to sophisticated bread-
broad hardware, study, programming, and planning efforts that establish
the initial feasibly and practicality of proposed solutions to
technologies challenges. It includes studies, investigations, and
nonsystem specific development efforts. The dominant characteristic of
this category of effort is that it be pointed toward specific military
needs with a view toward developing and evaluating the feasibility and
practicability of proposed solutions and determining their parameters.
(c) Advanced technology development (Category 6.3A) means all
efforts that have moved into the development and integration of
hardware for field experiments and tests. The results of this type of
effort are proof of technological feasibility and assessment of
operability and producibility rather than the development of hardware
for Service use. Projects in this category have a direct relevance to
identified military needs. Advanced technology development is system
specific (particularly for major platforms, i.e., aircraft, ships,
missiles, and tanks, etc.) and includes advanced technology development
that is used to demonstrate the general military utility or cost
reduction potential of technology when applied to different types of
military equipment or techniques. Advanced technology developments also
includes evaluation and synthetic environment and proof-of-principle
demonstrations in field exercises to evaluate system upgrades or
provide new operational capabilities.
(d) Demonstration and validation (Category 6.3B) means all efforts
necessary to evaluate integrated technologies in as realistic an
operating environment as possible to assess the performance or cost
reduction potential of advanced technology. The demonstration and
validation phase is system specific and also includes advanced
technology demonstrations that help expedite technology transition from
the laboratory to operational use.
(e) Engineering and manufacturing development (Category 6.4) means
those projects in engineering and manufacturing development for Service
use but that have not received approval for full-rate production. This
area is characterized by major line item projects, and program control
will be exercised by review of individual projects. Engineering
development includes engineering and manufacturing development projects
consistent with the definitions within DoDD 5000.1.
(f) Management support (Category 6.5) means research and
development effort directed toward support of installations or
operations required for general research and development use. Included
would be test ranges, military construction, maintenance support of
laboratories, operation and maintenance of test aircraft and ships, and
studies and analyses in support of the research and development
program. Costs of laboratory personnel, either in-house or contractor-
operated, would be assigned to appropriate projects or as a line item
in the basic research, applied research, or advanced technology
development program areas, as appropriate.
(g) Operational system development (Category 6.6) means those
development projects, in support of development acquisition programs or
upgrades, still in engineering and manufacturing development (DoDD
5000.1) but that have received approval for production through Defense
Acquisition Board or other action, or for which production funds have
been included in the DoD budget submission for the budget or subsequent
fiscal year. All items in this area are major line item projects that
appear as research, development, test, and evaluation costs of weapon
system elements in other programs. Program control will be exercised by
review of individual projects.
(h) Research and development ordinarily covers only the following
categories:
(1) Basic research.
(2) Applied research.
(3) Technology development.
(4) Demonstration/validation.
(5) Engineering and manufacturing development.
(6) Operational system development.
235.002 [Removed]
55. Section 235.002 is removed.
PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
56. Section 236.102 is amended by redesignating paragraphs (3) and
(4) as paragraphs (4) and (5), respectively, and by adding a new
paragraph (3) to read as follows:
236.102 Definitions.
* * * * *
(3) Marshallese firm is defined in the provision at 252.236-7012,
Military Construction on Kwajalein Atoll--Evaluation Preference.
* * * * *
57. Section 236.274 is amended by revising paragraph (a) to read as
follows:
236.274 Construction in foreign countries.
(a) In accordance with Section 112 of Pub. L. 105-45, military
construction contracts funded with military construction
appropriations, that are estimated to exceed $1,000,000 and are to be
performed in the United States territories and possessions in the
Pacific and on Kwajalein Atoll, or in countries bordering the Arabian
Gulf, shall be awarded only to United States firms, unless--
(1) The lowest responsive and responsible offer of a United States
firm exceeds the lowest responsive and responsible offer of a foreign
firm by more than 20 percent; or
(2) The contract is for military construction on Kwajalein Atoll
and the lowest responsive and responsible offer is submitted by a
Marshallese firm.
* * * * *
58. Section 236.570 is amended by revising paragraph (c) to read as
follows:
236.570 Additional provisions and clauses.
* * * * *
(c) Use the following provisions in solicitations for military
construction contracts that are funded with military construction
appropriations and are estimated to exceed $1,000,000:
(1) 252.236-7010, Overseas Military Construction--Preference for
United States Firms, when contract performance will be in a United
States territory or possession in the Pacific or in a country bordering
the Arabian Gulf.
(2) 252.236-7012, Military Construction on Kwajalein Atoll--
Evaluation Preference, when contract performance will be on Kwajalein
Atoll.
* * * * *
59. Sections 236.602-2 and 236.602-4 are revised to read as
follows:
236.602-2 Evaluation boards.
(a) Preselection boards may be used to identify to the section
board the qualified firms that have a reasonable chance of being
considered as most highly qualified by the selection board.
236.602-4 Selection authority.
(a) The selection authority shall be at a level appropriate for the
dollar value and nature of the proposed contract.
(c) A finding that some of the firms on the selection report are
unqualified does not preclude approval of the report, provided that a
minimum of three most highly qualified firms remains. The
[[Page 11539]]
reasons for finding a firm or firms unqualified must be recorded.
60. Section 236.609-70 is amended by revising paragraph (b) to read
as follows:
236.609-70 Additional provision and clause.
* * * * *
(b) Use the provision at 252.236-7011, Overseas Architect-Engineer
Services--Restriction to United States Firms, in solicitations for A-E
contracts that are--
(1) Funded with military construction appropriations;
(2) Estimated to exceed $500,000; and
(3) To be performed in Japan, in any North Atlantic Treaty
Organization member country, or in countries bordering the Arabian
Gulf.
PART 237--SERVICE CONTRACTING
237.102 [Removed]
61. Section 237.102 is removed.
62. Section 237.104 is amended by revising paragraph (f)(i) to read
as follows:
237.104 Personal services contracts.
* * * * *
(f)(i) Payment to each expert or consultant for personal services
under 5 U.S.C. 3109 shall not exceed the highest rate fixed by the
Classification Act Schedules for grade GS-15 (see 5 CFR 304.105(a)).
* * * * *
237.170 through 237.170-3 [Removed]
63. Sections 237.170 through 237.170-3 are removed.
64. Section 237.201 is added to read as follows:
237.201 Definitions.
Advisory and assistance services.
(c) Engineering and technical services.
Engineering and technical services consist of--
(i) Contract field services, which are engineering and technical
services provided on site at Defense locations by the trained and
qualified engineers and technicians of commercial or industrial
companies;
(ii) Contract plant services, which are engineering and technical
services provided by the trained and qualified engineers and
technicians of a manufacturer of military equipment or components in
the manufacturer's own plants and facilities; and
(iii) Field service representatives, who are employees of a
manufacturer of military equipment or components that provide a liaison
or advisory service between their company and the military users of
their company's equipment or components.
65. Section 237.203 is revised to read as follows:
237.203 Policy.
(1) Every contract for engineering and technical services, alone or
as part of an end item, shall--
(i) Show those services as a separately priced line item;
(ii) Contain definitive specifications for the services; and
(iii) Show the work-months involved.
(2) Agency heads may authorize personal service contracts for
contract field services to meet an unusual essential mission need. The
authorization will be for an interim period only.
237.203-70 [Redesignated and Amended]
66. Section 237.203-70 is redesignated as section 237.270 and
amended in paragraph (b) by revising ``one year'' to read ``1-year''
and by revising ``two'' to read ``2''.
237.205 and 237.206 [Redesignated]
67. Sections 237.205 and 237.206 are redesignated as sections
237.271 and 237.272 respectively.
PART 239--ACQUISITION OF INFORMATION TECHNOLOGY
68. Section 239.7405 is revised to read as follows:
239.7405 Multiyear contracting authority for telecommunications
resources.
(a) The General Services Administration (GSA) has exclusive
multiyear contracting authority for telecommunications resources.
However, GSA may delegate this authority in certain instances (see
Federal Property Management Regulations (FPMR) 101-35.6).
(b) In accordance with FPMR 101-35.6, executive agencies may enter
into multiyear contracts for telecommunications resources if--
(1) The agency notifies GSA prior to using GSA's multiyear
contracting authority;
(2) The contract life, including options, does not exceed 10 years;
and
(3) The agency complies with OMB budget and accounting procedures
relating to appropriated funds.
239.7406 [Amended]
69. Section 239.7406 is amended in the introductory text of
paragraph (c) by removing reference ``15.804-2'' and adding in its
place the reference ``15.403-4''; and by removing the reference
``15.804-5'' and adding in its place the reference ``15.403-3''.
70. Part 241 is revised to read as follows:
PART 241--ACQUISITION OF UTILITY SERVICES
Subpart 241.1--General
Sec.
241.101 Definitions.
241.102 Applicability.
Subpart 241.2--Acquiring Utility Services
241.201 Policy.
241.202 Procedures.
241.203 GSA assistance.
241.205 Separate contracts.
241.270 Preaward contract review.
Subpart 241.5--Solicitation Provisions and Contract Clauses
241.501-70 Additional clauses.
Authority: 48 U.S.C. 421 and 48 CFR Chapter 1.
Subpart 241.1--General
241.101 Definitions.
As used in this part--
Definite term contract means a contract for utility services for a
definite period of not less than one nor more than ten years.
Dual service area means a geographical area in which two or more
utility suppliers are authorized under State law to provide services.
Indefinite term contract means a month-to-month contract for
utility services which may be terminated by the Government upon proper
notice.
Independent regulatory body means the Federal Energy Regulatory
Commission, a state-wide agency, or an agency with less than state-wide
jurisdiction when operating pursuant to state authority. The body has
the power to fix, establish, or control the rates and services of
utility suppliers.
Nonindependent regulatory body means a body that regulates a
utility supplier which is owned or operated by the same entity that
created the regulatory body, e.g., a municipal utility.
Regulated utility supplier means a utility supplier regulated by an
independent regulatory body.
Service power procurement officer means for the--
Army, the Chief of Engineers;
Navy, the Commander, Naval Facilities Engineering Command;
Air Force, the head of a contracting activity; and
Defense Logistics Agency, the Executive Director of Contracting.
241.102 Applicability.
(a) This part applies to purchase of utility services from
nonregulated and regulated utility suppliers. It includes the
acquisition of liquefied petroleum gas as a utility service when
purchased from regulated utility suppliers.
[[Page 11540]]
(b)(7) This part does not apply to third party financed projects.
However, it may be used for any purchased utility services directly
resulting from such projects, including those authorized by--
(A) 10 U.S.C. 2394 for energy, fuels, and energy production
facilities for periods not to exceed 30 years;
(B) 10 U.S.C. 2394a for renewable energy for periods not to exceed
25 years;
(C) 10 U.S.C. 2689 for geothermal resources that result in energy
production facilities;
(D) 10 U.S.C. 2809 for potable and waste water treatment plants for
periods not to exceed 32 years; and
(E) 10 U.S.C. 2812 for lease/purchase of energy production
facilities for periods not to exceed 32 years.
Subpart 241.2--Acquiring Utility Services
241.201 Policy.
(1) Except as provided in FAR 41.201, DoD, as a matter of comity,
will comply with the current regulations, practices and decisions of
independent regulatory bodies which are subject to judicial appeal.
This policy does not extend to regulatory bodies whose decisions are
not subject to appeal nor does it extend to nonindependent regulatory
bodies.
(2) Purchases of utility services outside the United States may
use--
(i) Formats and technical provisions consistent with local
practice; and
(ii) Dual language forms and contracts.
(3) Rates established by an independent regulatory body are
considered ``prices set by law or regulation'' and do not require
submission of cost or pricing data (see FAR Subpart 15.4).
241.202 Procedures.
(a)(i) Competitive proposals.
When a new major utility service load develops or a new military
installation is established, the contracting officer shall--
(A) Determine whether more than one supplier can provide the
required utility services.
(1) Competition may be possible where dual franchises exist or
where no franchise exists.
(2) Competition should also be considered when an installation is
served by one supplier and other potential suppliers exist even though
one supplier has entered into a General Services Administration area-
wide contract.
(B) Where competition exists, solicit competitive proposals from
all potential suppliers.
(ii) Periodic reviews for competition.
Conduct periodic review of ongoing contracts to determine the
availability of competition. If available, evaluate the need to rewrite
the contract considering--
(A) The possible loss of rights vested in the Government under the
existing contract;
(B) The age and quality of the contract; and
(C) The number of contract modifications and the ease of
administration with the existing contract documents.
(iii) Connection and service charges.
The Government may pay a connection charge when required to cover
the cost of the necessary connecting facilities. A connection charge
based on the estimated labor cost of installing and removing the
facility shall not include salvage cost. A lump-sum connection charge
shall be no more than the agreed cost of the connecting facilities less
net salvage. The order of precedence for contractual treatment of
connection and service charges is--
(A) No connection charge.
(B) Termination liability. Use when an obligation is necessary to
secure the required services. The obligation must be not more than the
agreed connection charge, less any net salvage material costs. Use of a
termination liability instead of a connection charge requires the
approval of the service power procurement officer or designee.
(C) Connection charge, refundable. Use a refundable connection
charge when the supplier refuses to provide the facilities based on
lack of capital or published rules which prohibit providing up-front
funding. The contract should provide for refund of the connection
charge within five years unless a longer period or omission of the
refund requirement is authorized by the service power procurement
officer or designee.
(D) Connection and service charges, nonrefundable. The Government
may pay certain nonrefundable, nonrecurring charges including service
initiation charges, a contribution in aid of construction, membership
fees, and charges required by the supplier's rules and regulations to
be paid by the customer. If possible, consider sharing with other than
Government users the use of (and costs for) facilities when large
nonrefundable charges are required.
(iv) Construction and labor requirements. (A) Do not use the
connection charge provisions for the installation of Government-owned
distribution lines and facilities. The acquisition of such facilities
must be authorized by legislation and accomplished in accordance with
FAR Part 36. Also, do not use the connection charge provisions for the
installation of new facilities related to the supplier's production and
general ``backbone'' system unless authorized by legislation.
(B) Construction labor standards ordinarily do not apply to
construction accomplished under the connection charge provisions of
this part. However, if installation includes construction of a public
building or public work as defined in FAR 36.102, construction labor
standards may apply.
241.203 GSA assistance.
The General Services Administration (GSA) has delegated to DoD the
authority to enter into utility service contracts (see FAR 41.103);
therefore, contracting officers need not seek assistance or approval
from GSA.
241.205 Separate contracts.
(a)(i) Requests for proposals shall state the anticipated service
period in terms of months or years. Where the period extends beyond the
current fiscal year, evaluate offers of incentives for a definite term
contract.
(ii) The solicitation may permit offerors the choice of proposing
on the basis of--
(A) A definite term not to exceed the anticipated service period;
or
(B) An indefinite term contract.
(iii) Where the expected service period is less than the current
fiscal year, the solicitation shall be on the basis of an indefinite
term contract.
(iv) Contracts for utility services for leased premises shall
identify the lease document on the face of the contract.
(d) Use an indefinite term utility service contract when it is
considered to be in the Government's best interest to--
(i) Have the right to terminate on a 30-day (or longer) notice. A
notice of up to one year may be granted by an installation if needed to
obtain a more favorable rate, more advantageous conditions, or for
other valid reasons; or
(ii) Grant the supplier the right to terminate the contract when of
benefit to the Government in the form of lower rates, larger discounts
or more favorable terms and conditions.
241.270 Preaward contract review.
Departments/agencies shall conduct their owned preaward contract
reviews.
Subpart 241.5--Solicitation Provision and Contract Clauses
241.501-70 Additional clauses.
(a) If the Government must execute a superseding contract and
capital credits, connection charge credits, or
[[Page 11541]]
termination liability exist, use the clause at 252.241-7000,
Superseding Contract.
(b) Use the clause at 252.241-70001, Government Access, when the
clause at FAR 52.241-5, Contractor's Facilities, is used.
PART 242--CONTRACT ADMINISTRATION
71. Section 242.302 is amended by revising paragraphs (a)(4)(A) and
(a)(19) to read as follows:
242.302 Contract administration functions.
(a)(4) * * *
(A) Contractor estimating systems (see FAR 15.407-5); and
* * * * *
(19) Also negotiate and issue contract modifications reducing
contract prices in connection with the provisions of paragraph (b) of
the clause at FAR 52.225-10, Duty-Free Entry.
* * * * *
72. Section 242.1107-70 is revised to read as follows:
242.1107-70 Solicitation provision and contract clause.
(a) Use the clause at 252.242-7005, Cost/Schedule Status Report, in
solicitations and contracts for other than major systems that require
cost/schedule status reports (i.e., when the Contract Data Requirements
List includes DI-MGMT-81467 in accordance with DoD 5000.2-R).
(b) Use the provision at 252.242-7006, Cost/Schedule Status Report
Plans, in solicitation for other than major systems that require cost/
schedule status reports.
PART 243--CONTRACT MODIFICATIONS
73. Section 243.204-70 is amended in paragraph (b) by revising the
reference ``15.804-2(a)(1)(iii)'' to read ``15.403-4(a)(1)(iii)'' and
by adding paragraph (c) to read as follows:
243.204-70 Certification of requests for equitable adjustment.
* * * * *
(c) The certification required by 10 U.S.C. 2410(a), as implemented
in the clause at 252.243-7002, is different from the certification
required by the Contract Disputes Act of 1978 (41 U.S.C. 605(c)). If
the contractor has certified a request for equitable adjustment in
accordance with 10 U.S.C. 2410(a), and desires to convert the request
to a claim under the Contract Disputes Act, the contractor shall
certify the claim in accordance with FAR Subpart 33.2.
PART 250--EXTRAORDINARY CONTRACTUAL ACTIONS
74. Section 250.102-70 is added to read as follows:
250.102-70 Limitations on payment.
See 10 U.S.C. 2410b for limitations on Congressionally directed
payment of a request for equitable adjustment to contract terms or a
request for relief under Pub. L. 85-804.
250.201 [Amended]
75. Section 250.201 is amended in paragraph (b) by revising the
reference ``FAR subpart 50.2'' to read FAR Subpart 50.4''.
PART 252--SOLICITATION PROVISIONS AND CONTRAST CLAUSES
76. Section 252.212-7001 is amended by revising the clause date;
and in paragraph (b) by revising the entries at 252.225-7001, 252.225-
7007, and 252.225-7036; by adding, in numerical order, an entry at
252.225-7021; and by removing the entries at 252.242-7002 and 252.249-
7001. The revised and added text reads as follows:
252.212-7001 Contract terms and conditions required to implement
statutes or Executive Orders applicable to Defense Acquisitions of
commercial items.
* * * * *
Contract Terms and Conditions Required to Implement Statutes of
Executive Orders Applicable to Defense Acquisitions of Commercial Items
(Mar 1998)
* * * * *
(b) * * *
________ 252.225-7001 Buy American Act and Balance of Payments
Program (41 U.S.C. 10a-10d, E.O. 10582).
________ 252.225-7007 Buy American Act--Trade Agreements--
Balance of Payments Program (____Alternate I) (41 U.S.C. 10a-10d, 19
U.S.C. 2501-2518, and 19 U.S.C. 3301 note).
* * * * *
________ 252.225-7021 Trade Agreements (____Alternate I) (19
U.S.C. 2501-2518 and 19 U.S.C. 3301 note).
* * * * *
________ 252.225-7036 Buy American Act--North American Free
Trade Agreement Implementation Act--Balance of Payment Program (____
Alternate I) (41 U.S.C. 10a-10d and 19 U.S.C. 3301 note).
* * * * *
77. Section 252.225-7001 is revised to read as follows:
252.225-7001 Buy American Act and Balance of Payments Program.
As prescribed in 225.109(d), use the following clause:
Buy American Act and Balance of Payments Program (Mar 1998)
(a) Definitions.
As used in this clause--
(1) Components means those articles, materials, and supplies
directly incorporated into end products.
(2) Domestic end product means--
(i) An unmanufactured end product that has been mined or
produced in the United States; or
(ii) An end product manufactured in the United States if the
cost of its qualifying country components and its components that
are mined, produced, or manufactured in the United States exceeds 50
percent of the cost of all its components. The cost of components
shall include transportation costs to the place of incorporation
into the end product and U.S. duty (whether or not a duty-free entry
certificate may be issued). A component shall be considered to have
been mined, produced, or manufactured in the United States
(regardless of its source in fact) if the end product in which it is
incorporated is manufactured in the United States and the component
is of a class or kind--
(A) Determined to be not mined, produced, or manufactured in the
United States in sufficient and reasonably available commercial
quantities and of a satisfactory quality; or
(B) That the Secretary concerned determines would be
inconsistent with the public interest to apply the restrictions of
the Buy American Act.
(3) End product means those articles, materials, and supplies to
be acquired for public use under the contract. For this contract,
the end products are the line items to be delivered to the
Government (including supplies to be acquired by the Government for
public use in connection with service contracts, but excluding
installation and other services to be performed after delivery).
(4) Nonqualifying country end product means an end product that
is neither a domestic end product nor a qualifying country end
product.
(5) Qualifying country means any country set forth in subsection
225.872-1 of the Defense Federal Acquisition Regulation Supplement.
(6) Qualifying country component means an item mined, produced,
or manufactured in a qualifying country.
(7) Qualifying country end product means--
(i) An unmanufactured end product mined or produced in a
qualifying country; or
(ii) An end product manufactured in a qualifying country if the
cost of the components mined, produced, or manufactured in the
qualifying country and its components mined, produced, or
manufactured in the United States exceeds 50 percent of the cost of
all its components.
(b) This clause implements the Buy American Act (41 U.S.C.
Section 10a-d) in a manner that will encourage a favorable
international balance of payments by providing a preference to
domestic end products over other end products, except for end
products which are qualifying country end products.
[[Page 11542]]
(c) The Contractor agrees that it will deliver only domestic end
products unless, in its offer, it specified delivery of other end
products in the Buy American Act--Balance of Payments Program
Certificate provision of the solicitation. An offer certifying that
a qualifying country end product will be supplied requires the
Contractor to deliver a qualifying country end product or a domestic
end product.
(d) The offered price of qualifying country end products should
not include custom fees or duty. The offered price of nonqualifying
country end products, and products manufactured in the United States
that contain nonqualifying country components, must include all
applicable duty. The award price will not include duty for end
products or components that are to be accorded duty-free entry.
Generally, when the Buy American Act is applicable, each
nonqualifying country offer is adjusted for the purpose of
evaluation by adding 50 percent of the offer, inclusive of duty.
(End of clause)
78. Section 252.225-7003 is revised to read as follows:
252.225-7003 Information for duty-free entry evaluation.
As prescribed in 225.605-70(d), use the following provision:
Information for Duty-Free Entry Evaluation (Mar 1998)
(a) Does the offeror propose to furnish--
(1) A domestic end product with nonqualifying country components
for which the offeror requests duty-free entry; or
(2) A foreign end product consisting of end items, components,
or material of foreign origin other than those for which duty-free
entry is to be accorded pursuant to the Duty-Free Entry--Qualifying
Country Supplies (End Products and Components) clause or, if
applicable, the Duty-Free Entry--Eligible End Products clause of
this solicitation?
Yes ( ) No ( )
(b) If the answer in paragraph (a) is yes, answer the following
questions:
(1) Are such foreign supplies now in the United States?
Yes ( ) No ( )
(2) Has the duty on such foreign supplies been paid?
Yes ( ) No ( )
(3) If the answer to paragraph (b)(2) is no, what amount is
included in the offer to cover such duty?$________________
(c) If the duty has not been paid, the Government may elect to
make award on a duty-free basis. If so, the offered price will be
reduced in the contract award by the amount specified in paragraph
(b)(3). The Offeror agrees to identify, at the request of the
Contracting Officer, the foreign supplies which are subject to duty-
free entry.
(End of provision)
Alternate I (Mar 1998). As prescribed in 225.605-70(d),
substitute the following paragraph (a) for paragraph (a) of the
basic clause:
(a) Does the offeror propose to furnish a U.S. made end product
with nonqualifying country components for which the offeror requests
duty-free entry?
Yes ( ) No ( )
79. Section 252.225-7006 is amended by revising the introductory
text, the clause date, paragraphs (a) and (c)(1)(i), the introductory
text of paragraph (c)(2), and paragraph (c)(2)(vi) to read as follows:
252.225-7006 Buy American Act--Trade Agreements--Balance of Payments
Program Certificate.
As prescribed in 225.408(a)(i), use the following provision:
Buy American Act--Trade Agreements--Balance of Payments Program
Certificate (Mar 1998)
(a) Definitions. Caribbean Basin country end product, designated
country end product, domestic end product NAFTA country end product,
nondesignated country end product, qualifying country end product,
and U.S. made end product have the meanings given in the Buy
American Act--Trade Agreements--Balance of Payments Program clause
of this solicitation.
* * * * *
(c) * * *
(1) * * *
(i) Each end product, except the end products listed in
paragraph (c)(2) of this provision, is a domestic end product; and
* * * * *
(2) The Offeror must identify all end products that are not
domestic end products.
* * * * *
(vi) The following supplies are other nondesignated country end
products.
------------------------------------------------------------------------
Insert line item number Insert country of origin
------------------------------------------------------------------------
------------------------------------------------------------------------
(End of provision)
80. Sections 252.225-7007 and 252.225-7008 are revised to read as
follows:
252.225-7007 Buy American Act--trade agreements--Balance of Payments
Program.
As prescribed in 225.408(a)(ii), use the following clause:
Buy American Act--Trade Agreements--Balance of Payments Program (Mar
1998)
(a) Definitions. As used in this clause--
(1) Caribbean Basin country means--
Antigua and Barbuda
Aruba
Bahamas
Barbados
Belize
British Virgin Islands
Costa Rica
Dominica
Dominican Republic
El Salvador
Grenada
Guatemala
Guyana
Haiti
Honduras
Jamaica
Montserrat
Netherlands Antilles
Nicaragua
Panama
St. Kitts-Nevis
St. Lucia
St. Vincent and the Grenadines
Trinidad and Tobago
(2) Caribbean Basin country end product--
(i) Means an article that--
(A) Is wholly the growth, product, or manufacture of a Caribbean
Basin country; or
(B) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in a Caribbean Basin country into a new
and different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed. The term refers to a product offered for purchase under
a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services)
incidental to its supply, provided that the value of those
incidental services does not exceed the value of the product itself.
(ii) Excludes products, other than petroleum and any product
derived from petroleum, that are not granted duty-free treatment
under the Caribbean Basin Economic Recovery Act (19 U.S.C 2703(b)).
These exclusions presently consist of--
(A) Textiles and apparel articles that are subject to textile
agreements;
(B) Footwear, handbags, luggage, flat goods, work gloves, and
leather wearing apparel not designated as eligible articles for the
purpose of the Generalized System of Preferences under Title V of
the Trade Act of 1974;
(C) Tuna, prepared or preserved in any manner in airtight
containers; and
(D) Watches and watch parts (including cases, bracelets, and
straps) of whatever type, including, but not limited to, mechanical,
quartz digital, or quartz analog, if such watches or watch parts
contain any material that is the product of any country to which
Harmonized Tariff Schedule column 2 rates of duty apply.
(3) Components means those articles, materials, and supplies
directly incorporated into end products.
(4) Designated country means--
Aruba
Austria
Bangladesh
Belgium
Benin
Bhutan
Botswana
Burkina Faso
Burundi
Canada
Cape Verde
Central; African Republic
Chad
Comoros
Denmark
Djibouti
[[Page 11543]]
Equatorial Guinea
Finland
France
Gambia
Germany
Greece
Guinea
Guinea-Bissau
Haiti
Hong Kong
Ireland
Israel
Italy
Japan
Kiribati
Lesotho
Liechtenstein
Luxembourg
Malawi
Maldives
Mali
Mozambique
Nepal
Netherlands
Niger
Norway
Portugal
Republic of Korea
Rwanda
Sao Tome and Principe
Sierra Leone
Singapore
Somalia
Spain
Sweden
Switzerland
Tanzania U.R.
Togo
Tuvalu
Uganda
United Kingdom
Vanuatu
Western Samoa
Yemen
(5) Designated country end product means an article that--
(i) Is wholly the growth, product, or manufacture of the
designated country; or
(ii) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in a designated country into a new and
different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed. The term refers to a product offered for purchase under
a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services)
incidental to its supply, provided that the value of those
incidental services does not exceed the value of the product itself.
(6) Domestic end product means--
(i) An unmanufactured end product that has been mined or
produced in the United States; or
(ii) An end product manufactured in the United States if the
cost of its qualifying country components and its components that
are mined, produced, or manufactured in the United States exceeds 50
percent of the cost of all its components. The cost of components
shall include transportation costs to the place of incorporation
into the end product and U.S. duty (whether or not a duty-free entry
certification may be issued). A component shall be considered to
have been mined, produced, or manufactured in the United States
(regardless of its source in fact) if the end product in which it is
incorporated is manufactured in the United States and the component
is of a class or kind--
(A) Determined to be not mined, produced, or manufactured in the
United States in sufficient and reasonably available commercial
quantities and of a satisfactory quality; or
(B) That the Secretary concerned determines would be
inconsistent with the public interest to apply the restrictions of
the Buy American Act.
(7) End product means those articles, materials, and supplies to
be acquired for public use under the contract. For this contract,
the end products are the line items to be delivered to the
Government (including supplies to be acquired by the Government for
public use in connection with service contracts, but excluding
installation and other services to be performed after delivery).
(8) NAFTA country end product means an article that--
(i) Is wholly the growth, product, or manufacture of the NAFTA
country; or
(ii) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in a NAFTA country into a new and
different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed. The term refers to a product offered for purchase under
a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services)
incidental to its supply, provided that the value of those
incidental services does not exceed the value of the product itself.
(9) Nondesignated country end product means any end product that
is not a U.S. made end product or a designated country end product.
(10) North American Free Trade Agreement (NAFTA) country means
Canada or Mexico.
(11) Qualifying country means any country set forth in
subsection 225.872-1 of the Defense Federal Acquisition Regulation
Supplement.
(12) Qualifying country component means an item mined, produced,
or manufactured in a qualifying country.
(13) Qualifying country end product means--
(i) An unmanufactured end product mined or produced in a
qualifying country; or
(ii) An end product manufactured in a qualifying country if the
cost of the components mined, produced, or manufactured in the
qualifying country and its components mined, produced or
manufactured in the United States exceeds 50 percent of the cost of
all its components.
(14) United States means the United States, its possessions,
Puerto Rico, and any other place subject to its jurisdiction, but
does not include leased bases or trust territories.
(15) U.S. made end product means an article that--
(i) Is wholly the growth, product, or manufacture of the United
States; or
(ii) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in the United States into a new and
different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed.
(b) Unless otherwise specified, the Trade Agreements Act of 1979
(19 U.S.C. 2501 et seq.), the North American Free Trade Agreement
Implementation Act of 1993 (19 U.S.C. 3301 note), and the Caribbean
Basin Initiative apply to all items in the Schedule.
(c)(1) The Contractor agrees to deliver under this contract only
domestic end products unless, in its offer, it specified delivery of
U.S. made, qualifying country, designated country, Caribbean Basin
country, NAFTA country, or other nondesignated country end products
in the Buy American Act--Trade Agreements--Balance of Payments
Program Certificate provision of the solicitation.
(2) The Contractor may not supply a nondesignated country end
product unless--
(i) It is a qualifying country end product, a Caribbean Basin
country end product, or a NAFTA country end product;
(ii) The Contracting Officer has determined that offers of U.S.
made end products or qualifying, designated, NAFTA, or Caribbean
Basin country end products from responsive, responsible offerors are
either not received or are insufficient to fill the Government's
requirements; or
(iii) A national interest waiver has been granted under section
302 of the Trade Agreements Act of 1979.
(d) The offered price of qualifying country end products and the
offered price of designated country end products, NAFTA country end
products, and Caribbean Basin country end products, for line items
subject to the Trade Agreements Act or the North American Free Trade
Agreement Implementation Act, should not include custom fees or
duty. The offered price of end products listed in paragraph
(c)(2)(vi) of the Buy American Act--Trade Agreements--Balance of
Payments Program Certificate provision of the solicitation, or the
offered price of U.S. made end products that contain nonqualifying
country components, must include all applicable duty. The award
price will not include duty for end products or components that are
to be accorded duty-free entry. Generally, each offer of a U.S. made
end product that does not meet the definition of ``domestic end
product'' is adjusted for the purpose of evaluation by adding 50
percent of the offered price, inclusive of duty.
(End of clause)
Alternate I (Mar 1998). As prescribed in 225.408(a)(ii), delete
Singapore from the list of designated countries in paragraph (a)(4)
of the basic clause.
252.225-7008 Supplies to be accorded duty-free entry.
As prescribed in 225.605-70(e), use the following clause:
[[Page 11544]]
Supplies To Be Accorded Duty-Free Entry (Mar 1998)
In accordance with paragraph (b) of the Duty-Free Entry clause
of this contract, in addition to duty-free entry for all qualifying
country supplies (end products and components) and all eligible end
products subject to applicable trade agreements (if this contract
contains the Buy American Act--Trade Agreements--Balance of Payments
Program clause or the Buy American Act--North American Free Trade
Agreement Implementation Act--Balance of Payments Program clause),
the following foreign end products that are neither qualifying
country end products nor eligible end products under a trade
agreement, and the following nonqualifying country components, are
accorded duty-free entry.
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(End of clause)
81. Section 252.225-7009 is amended by revising the section
heading, the introductory text, the clause title and date, and
paragraphs (a), (b), (c), (f)(2)(iv), (f)(2)(vii), and (g) to read as
follows:
252.225-7009 Duty-free entry--qualifying country supplies (end
products and components).
As prescribed in 225.605-70(a), use the following clause:
Duty-Free Entry--Qualifying Country Supplies (End Products and
Components) (Mar 1998)
(a) Definitions. Qualifying country and qualifying country end
products have the meaning given in the Buy American Act and Balance
of Payments Program clause, Buy American Act--Trade Agreements--
Balance of Payments Program clause, Buy American Act--North American
Free Trade Agreement Implementation Act--Balance of Payments Program
clause, or Trade Agreements clause of this contract.
(b) The requirements of this clause apply to this contract and
subcontracts, including purchase orders, that involve supplies to be
accorded duty-free entry whether placed--
(1) Directly with a foreign concern as a prime contract; or
(2) As a subcontract or purchase order under a contract with a
domestic concern.
(c) Except as otherwise approved by the Contracting Officer, or
unless supplies were imported into the United States before the date
of this contract or, in the case of supplies imported by a first or
lower tier subcontractor, before the date of the subcontract, no
amount is or will be included in the contract price for duty for--
(1) End items that are qualifying country end products; or
(2) Components (including, without limitation, raw materials and
intermediate assemblies) produced or made in qualifying countries,
that are to be incorporated in the end items to be delivered under
this contract, provided that the end items are manufactured in the
United States or in a qualifying country.
* * * * *
(f) * * *
(2) * * *
(iv)(A) For direct shipments to a U.S. military installation,
the notation:
UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE Duty-Free Entry
to be claimed pursuant to Section XXII, Chapter 98, Subchapter VIII,
Item 9808.00.30 of the Harmonized Tariff Schedule of the United
States. Upon arrival of shipment at the appropriate port of entry,
District Director of Customs, please release shipment under 19 CFR
part 142 and notify Commander, Defense Contract Management Command
(DCMC) New York, ATTN: Customs Team, DCMDN-GNIC, 207 New York
Avenue, Staten Island, New York, 10305-5013, for execution of
Customs Forms 7501, 7501A, or 7506 and any required duty-free entry
certificates.
(B) In cases where the shipment will be consigned to other than
a military installation, e.g., a domestic contractor's plant, the
shipping document notation shall be altered to insert the name and
address of the contractor, agent or broker who will notify
Commander, Defense Contract Management Command (DCMC) New York, for
execution of the duty-free certificate.
* * * * *
(vii) Activity Address Number of the contract administration
office actually administering the prime contract, e.g., for DCMC
Dayton, S3605A.
(g) Preparation of customs forms. (1) Except for shipments
consigned to a military installation, the Contractor shall prepare,
or authorize an agent to prepare, any customs forms required for the
entry of foreign supplies in connection with DoD contracts into the
United States, its possessions, or Puerto Rico. The completed
customs forms shall be submitted to the District Director of Customs
with a copy to DCMC NY for execution of any required duty-free entry
certificates. Shipments consigned directly to a military
installation will be released in accordance with 10.101 and 10.102
of the U.S. Customs regulations.
(2) For shipments containing both supplies that are to be
accorded duty-free entry and supplies that are not, the Contractor
shall identify on the customs forms those items that are eligible
for duty-free entry.
* * * * *
82. Section 252.225-7010 is amended by revising the introductory
text, the clause date, the introductory text of paragraph (c), the
first sentence of the introductory text of paragraph (e), paragraph
(e)(3), and in the second sentence of paragraph (f) by removing
``DCMAO'' and inserting in its place ``DCMC''. The revised text reads
as follows:
252.225-7010 Duty-free entry--additional provisions.
As prescribed in 225.605-70(c), use the following clause:
Duty-Free Entry--Additional Provisions (Mar 1998)
* * * * *
(c) In addition to any data required by paragraph (b)(1) of the
Duty-Free Entry clause, the Contractor shall furnish the following
for all foreign supplies to be imported pursuant to paragraph (a) or
(b) of the Duty-Free Entry clause. The Contractor shall furnish this
information to the Contracting Officer administering the prime
contract immediately upon award of any contract or subcontract
involving supplies to be accorded duty-free entry.
* * * * *
(e) To properly complete the shipping document instructions as
required by paragraph (f) of the Duty-Free Entry clause, the
Contractor shall insert Defense Contract Management Command (DCMC)
New York, ATTN: Customs Team, DCMDN-GNIC, 207 New York Avenue,
Staten Island, New York 10305-5013, as the cognizant contract
administration office (for paragraph (f) only) in those cases when
the shipment is consigned directly to a military installation. * * *
(3) Activity address number of the contract administration
office actually administering the prime contract, e.g., for DCMC
Dayton, S3605A.
* * * * *
83. Section 252.225-7014 is amended by revising the clause date and
paragraphs (a) and (c)(2), the Alternate I date, and paragraph (c)(2)
of Alternate I to read as follows:
252.225-7014 Preference for domestic specialty metals.
* * * * *
Preference for Domestic Specialty Metals (Mar 1998)
(a) Definitions.
As used in this clause--
(1) Qualifying country means any country set forth in subsection
225.872-1 of the Defense Federal Acquisition Regulation Supplement.
(2) Specialty metals means--
(i) Steel--
(A) Where the maximum alloy content exceeds one or more of the
following limits: manganese, 1.65 percent; silicon, 0.60 percent; or
copper, 0.60 percent; or
(B) That contains more than 0.25 percent of any of the following
elements: aluminum, chromium, cobalt, columbium, molybdenum, nickel,
titanium, tungsten, or vanadium;
(ii) Metal alloys consisting of nickel, iron-nickel, and cobalt
base alloys containing a total of other alloying metals (except
iron) in excess of 10 percent;
(iii) Titanium and titanium alloys; or
(iv) Zirconium and zirconium base alloys.
* * * * *
(c) * * *
(2) The specialty metal is melted in a qualifying country or is
incorporated in an article manufactured in a qualifying country;
* * * * *
Alternate I (Mar 1998)
* * * * *
[[Page 11545]]
(c) * * *
(2) The specialty metal is melted in a qualifying country or is
incorporated in an article manufactured in a qualifying country; or
* * * * *
84. Sections 252.225-7020 and 252.225-7021 are added to read as
follows:
252.225-7020 Trade Agreements Certificate.
As prescribed in 225.408(a)(iii), use the following provision:
Trade Agreements Certificate (Mar 1998)
(a) Definitions. Caribbean Basin country end product, designated
country end product, NAFTA country end product, nondesignated
country end product, qualifying country end product, and U.S. made
end product have the meanings given in the Trade Agreements clause
of this solicitation.
(b) Evaluation. Offers will be evaluated in accordance with the
policies and procedures of part 225 of the Defense Federal
Acquisition Regulation Supplement. Offers of foreign end products
that are not U.S. made, qualifying country, designated country,
Caribbean Basin country, or NAFTA country end products will not be
considered for award, unless the Contracting Officer determines that
there are not offers of such end products; or the offers of such end
products are insufficient to fulfill the requirements; or a national
interest exception to the Trade Agreements Act is granted.
(c) Certifications. (1) The offeror certifies that each end
product to be delivered under this contract, except those listed in
paragraph (c)(2) of this provision, is a U.S. made, qualifying
country, designated country, Caribbean Basin country, or NAFTA
country end product.
(2) The following supplies are other nondesignated country end
products:
------------------------------------------------------------------------
insert line item number insert country of origin
------------------------------------------------------------------------
------------------------------------------------------------------------
(End of provision)
252.225-7021 Trade Agreements.
As prescribed in 225.408(a)(iv), use the following clause:
Trade Agreements (Mar 1998)
(a) Definitions. As used in this clause--
(1) Caribbean Basin country means--
Antigua and Barbuda
Aruba
Bahamas
Barbados
Belize
British Virgin Islands
Costa Rica
Dominica
Dominican Republic
El Salvador
Grenada
Guatemala
Guyana
Haiti
Honduras
Jamaica
Montserrat
Netherlands Antilles
Nicaragua
Panama
St. Kitts-Nevis
St. Lucia
St. Vincent and the Grenadines
Trinidad and Tobago
(2) Caribbean Basin country end product--
(i) Means an article that--
(A) Is wholly the growth, product, or manufacture of a Caribbean
Basin country; or
(B) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in a Caribbean Basin country into a new
and different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed. The term refers to a product offered for purchase under
a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services)
incidental to its supply, provided that the value of those
incidental services does not exceed the value of the product itself.
(ii) Excludes products, other than petroleum and any product
derived from petroleum, that are not granted duty-free treatment
under the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(b)).
These exclusions presently consist of--
(A) Textiles and apparel articles that are subject to textile
agreements;
(B) Footwear, handbags, luggage, flat goods, work gloves, and
leather wearing apparel not designated as eligible articles for the
purpose of the Generalized System of Preferences under Title V of
the Trade Act of 1974;
(C) Tuna, prepared or preserved in any manner in airtight
containers; and
(D) Watches and watch parts (including cases, bracelets, and
straps) of whatever type, including, but not limited to, mechanical,
quartz digital, or quartz analog, if such watches or watch parts
contain any material that is the product of any country to which
Harmonized Tariff Schedule column 2 rates of duty apply.
(3) Components means those articles, materials, and supplies
directly incorporated into end products.
(4) Designated country means--
Aruba
Austria
Bangladesh
Belgium
Benin
Bhutan
Botswana
Burkina Faso
Burundi
Canada
Cape Verde
Central African Republic
Chad
Comoros
Denmark
Dijbouti
Equatorial Guinea
Finland
France
Gambia
Germany
Greece
Guinea
Guinea-Bissau
Haiti
Hong Kong
Ireland
Israel
Italy
Japan
Kiribati
Lesotho
Liechtenstein
Luxembourg
Malawi
Maldives
Mali
Mozambique
Nepal
Netherlands
Niger
Norway
Portugal
Republic of Korea
Rwanda
Sao Tome and Principe
Sierra Leone
Singapore
Somalia
Spain
Sweden
Switzerland
Tanzania U.R.
Togo
Tuvalu
Uganda
United Kingdom
Vanuatu
Western Samoa
Yemen
(5) Designated country end product means an article that--
(i) Is wholly the growth, product, or manufacture of the
designated country; into a new and different article of commerce
with a name, character, or use distinct from that of the article or
articles from which it was so transformed. The term refers to a
product offered for purchase under a supply contract, but for
purposes of calculating the value of the end product includes
services (except transportation services) incidental to its supply,
provided that the value of those incidental services does not exceed
the value of the product itself.
(6) End product means those articles, materials, and supplies to
be acquired for public use under the contract. For this contract,
the end products are the line items to be delivered to the
Government (including supplies to be acquired by the Government for
pubic use in connection with service contracts, but excluding
installation and other services to be performed after delivery).
(7) NAFTA country end product means an article that--
(i) Is wholly the growth, product, or manufacture of the NAFTA
country; or
(ii) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
[[Page 11546]]
substantially transformed in a NAFTA country into a new and
different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed. The term refers to a product offered for purchase under
a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services)
incidental to its supply, provided that the value of those
incidental services does not exceed the value of the product itself.
(8) Nondesignated country end product means any end product that
is not a U.S. made end product or a designated country end product.
(9) North American Free Trade Agreement (NAFTA) country means
Canada or Mexico.
(10) Qualifying country means any country set forth in
subsection 225.872-1 of the Defense Federal Acquisition Regulation
Supplement.
(11) Qualifying country end product means--
(i) An unmanufactured end product mined or produced in a
qualifying country; or
(ii) An end product manufactured in a qualifying country if the
cost of the components mined, produced, or manufactured in the
qualifying country and its components mined, produced, or
manufactured in the United States exceeds 50 percent of the cost of
all its components.
(12) United States means the United States, its possessions,
Puerto Rico, and any other place subject to its jurisdiction, but
does not include leased bases or trust territories.
(13) U.S. made end product means an article that--
(i) Is wholly the growth, product, or manufacture of the United
States; or
(ii) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in the United States into a new and
different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed.
(b) Unless otherwise specified, the Trade Agreements Act of 1979
(19 U.S.C. 2501, et seq.), the North American Free Trade Agreement
Implementation Act of 1993 (19 U.S.C. 3301 note), and the Caribbean
Basin Initiative apply to all items in the Schedule.
(c)(1) The Contractor agrees to deliver under this contract only
U.S. made, qualifying country, designated country, Caribbean Basin
country or NAFTA country end product unless, in its offer, it
specified delivery of other nondesignated country end products in
the Trade Agreements Certificate provision of the solicitation.
(2) The Contractor may not supply a nondesignated country end
product other than a qualifying country end product, a Caribbean
Basin country end product, or a NAFTA country end product, unless--
(i) The Contracting Officer has determined that offers of U.S.
made end products or qualifying, designated, Caribbean Basin, or
NAFTA country end products from responsive, responsible offerors are
either not received or are insufficient to fill the Government's
requirements; or
(ii) A national interest waiver has been granted under section
302 of the Trade Agreements Act of 1979.
(d) The offered price of end products listed in paragraph (c)(2)
of the Trade Agreements Certificate provision of the solicitation
must include all applicable duty, whether or not a duty-free entry
certificate will be granted. The offered price of qualifying
country, designated country, Caribbean Basin country, or NAFTA
country end products, for line items subject to the Trade Agreements
Act or the North American Free Trade Agreement Implementation Act,
should not include custom fees or duty. The offered price of U.S.
made end products should not include duty for qualifying country
components.
(End of clause)
Alternate I (Mar 1998). As prescribed in 225.408(a)(iv), delete
Singapore from the list of designated countries in paragraph (a)(4)
of the basic clause.
85. Section 252.225-7026 is amended by revising the clause date,
the introductory text of paragraph (a)(3), and paragraph (c); and by
redesignating paragraphs (d)(i), (d)(ii), and (d)(iii), as paragraphs
(d)(1), (d)(2), and (d)(3), respectively. The revised text reads as
follows:
252.225-7026 Reporting of contract performance outside the United
States.
* * * * *
Reporting of Contract Performance Outside the United States (Mar 1998)
(a) * * *
(3) Contracts exceeding $500,000, when any part that exceeds the
simplified acquisition threshold in Part 2 of the Federal
Acquisition Regulation will be performed outside the United States,
unless a foreign place of performance is--
* * * * *
(c) Flowdown requirements. (1) The Contractor shall include a
clause substantially the same as this one in all first-tier
subcontracts exceeding $500,000, except subcontracts for commercial
items, construction, ores, natural gases, utilities, petroleum
products and crudes, timber (logs), or subsistence.
(2) The Contractor shall provide the prime contract number to
subcontractors for reporting purposes.
* * * * *
86. Section 252.225-7027 is revised to read as follows:
252.225-7027 Restriction on contingent fees for foreign military
sales.
As prescribed in 225.7308(a), use the following clause. Insert in
paragraph (b)(1) of the clause the name(s) of any foreign country
customer(s) listed in 225.7303-4(b).
Restriction on Contingent Fees for Foreign Military Sales (Mar 1998)
(a) Except as provided in paragraph (b) of this clause,
contingent fees, as defined in the Covenant Against Contingent Fees
clause of this contract, are generally an allowable cost, provided
the fees are paid to a bona fide employee of the Contractor or to a
bona fide established commercial or selling agency maintained by the
Contractor for the purpose of securing business.
(b) For foreign military sales, unless the contingent fees have
been identified and payment approved in writing by the foreign
customer before contract award, the following contingent fees are
unallowable under this contract:
(1) For sales to the Government(s) of ____________________,
contingent fees in any amount.
(2) For sales to Governments not listed in paragraph (b)(1) of
this clause, contingent fees exceeding $50,000 per foreign military
sale case.
(End of clause)
87. Sections 252.225-7035, 252.225-7036, and 252.225-7037 are
revised to read as follows:
252.225-7035 Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program Certificate.
As prescribed in 225.408(a)(v), use the following provision:
Buy American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program Certificate (MAR 1998)
(a) Definitions. ``Domestic end product,'' ``foreign end
product,'' ``NAFTA country end product,'' and ``qualifying country
end product'' have the meanings given in the Buy American Act--North
American Free Trade Agreement Implementation Act--Balance of
Payments Program clause of this solicitation.
(b) Evaluation. Offers will be evaluated in accordance with the
policies and procedures of Part 225 of the Defense Federal
Acquisition Regulation Supplement. For line items subject to the
North American Free Trade Agreement Implementation Act, offers of
qualifying country end products or NAFTA country end products will
be evaluated without regard to the restrictions of the Buy American
Act or the Balance of Payments Program.
(c) Certifications. (1) The offeror certifies that--
(i) Each end product, except the end products listed in
paragraph (c)(2) of this provision, is a domestic end product; and
(ii) Components of unknown origin are considered to have been
mined, produced, or manufactured outside the United States or a
qualifying country.
(2) The Offeror must identify all end products that are not
domestic end products.
(i) The Offeror certifies that the following supplies are
qualifying country (except Canada) end products:
------------------------------------------------------------------------
insert line item number insert country of origin
------------------------------------------------------------------------
------------------------------------------------------------------------
[[Page 11547]]
(ii) The Offeror certifies that the following supplies qualify
as NAFTA country end products:
------------------------------------------------------------------------
insert line item number insert country of origin
------------------------------------------------------------------------
------------------------------------------------------------------------
(iii) The following supplies are other foreign end products:
------------------------------------------------------------------------
insert line item number insert country of origin
------------------------------------------------------------------------
------------------------------------------------------------------------
(End of provision)
Alternate I (Mar 1998)
As prescribed in 225.408(a)(v)(B)(2), substitute the phrase
``Canadian end product'' for the phrase ``NAFTA country end
product'' in paragraph (a); and substitute the phrase ``Canadian end
products'' for the phrase ``NAFTA country end products'' in
paragraphs (b) and (c)(2)(ii) of the basic clause.
252.225-7036 Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program
As prescribed in 225.408(a)(vi),use the following clause:
Buy American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program (Mar 1998)
(a) Definitions. As used in this clause--
(1) Components means those articles, materials, and supplies
directly incorporated into end products.
(2) Domestic end product means--
(i) An unmanufactured end product that has been mined or
produced in the United States; or
(ii) An end product manufactured in the United States if the
cost of its qualifying country components and its components that
are mined, produced, or manufactured in the United States exceeds 50
percent of the cost of all its components. The cost of components
shall include transportation costs to the place of incorporation
into the end product and U.S. duty (whether or not a duty-free entry
certificate may be issued). A component shall be considered to have
been mined, produced, or manufactured in the United States
(regardless of its source in fact) if the end product in which it is
incorporated is manufactured in the United States and the component
is of a class or kind--
(A) Determined to be not mined, produced, or manufactured in the
United States in sufficient and reasonably available commercial
quantities and of a satisfactory quality; or
(B) That the Secretary concerned determines would be
inconsistent with the public interest to apply the restrictions of
the Buy American Act.
(3) End product means those articles, materials, and supplies to
be acquired for public use under the contract. For this contract,
the end products are the line items to be delivered to the
Government (including supplies to be acquired by the Government for
public use in connection with service contracts, but excluding
installation and other services to be performed after delivery).
(4) Foreign end product means an end product other than a
domestic end product.
(5) North American Free Trade Agreement (NAFTA) country means
Canada or Mexico.
(6) NAFTA country end product means an article that--
(i) Is wholly the growth, product, or manufacture of a NAFTA
country; or
(ii) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in a NAFTA country into a new and
different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed. The term refers to a product offered for purchase under
a supply contract, but for purposes of calculating the value of the
end product includes services (except transportation services)
incidental to its supply, provided that the value of those
incidental services does not exceed the value of the product itself.
(7) Qualifying country means any country set forth in subsection
225.872-1 of the Defense Federal Acquisition Regulation Supplement.
(8) Qualifying country component means an item mined, produced,
or manufactured in a qualifying country.
(9) Qualifying country end product means--
(i) An unmanufactured end product mined or produced in a
qualifying country; or
(ii) An end product manufactured in a qualifying country if the
cost of the components mined, produced, or manufactured in the
qualifying country and its components mined, produced, or
manufactured in the United States exceeds 50 percent of the cost of
all its components.
(b) Unless otherwise specified, the North American Free Trade
Agreement Implementation Act of 1993 (19 U.S.C. 3301 note) applies
to all items in the Schedule.
(c) The Contractor agrees to deliver under this contract only
domestic end products unless, in its offer, it specified delivery of
qualifying country, NAFTA country, or other foreign end products in
the Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program Certificate
provision of the solicitation. An offer certifying that a qualifying
country end product or a NAFTA country end product will be supplied
requires the Contractor to supply a qualifying country end product
or a NAFTA country end product, whichever is certified, or, at the
Contractor's option, a domestic end product.
(d) The offered price of qualifying country end products, or
NAFTA country end products for line items subject to the North
American Free Trade Agreement Implementation Act, should not include
custom fees or duty. The offered price of foreign end products
listed in paragraph (c)(2)(iii) of the Buy American Act--North
American Free Trade Agreement Implementation Act--Balance of
Payments Program Certificate provision of the solicitation, or the
offered price of domestic end products that contain nonqualifying
country components, must include all applicable duty. The award
price will not include duty for end products or components that are
to be accorded duty-free entry. Generally, each foreign end product
listed in paragraph (c)(2)(iii) of the Buy American Act--North
American Free Trade Agreement Implementation Act--Balance of
Payments Program Certificate provision of the solicitation is
adjusted for the purpose of evaluation by adding 50 percent of the
offered price, inclusive of duty.
(End of clause)
Alternate I (Mar 1998)
As prescribed in 225.408(a)(vi)(B)(2), substitute the following
paragraphs (a)(4), (c), and (d) for paragraphs (a)(4), (c), and (d)
of the basic clause:
(a)(4) Canadian end product, means an article that--
(i) Is wholly the growth, product, or manufacture of Canada; or
(ii) In the case of an article that consists in whole or in part
of materials from another country or instrumentality, has been
substantially transformed in Canada into a new and different article
of commerce with a name, character, or use distinct from that of the
article or articles from which it so was so transformed. The term
refers to a product offered for purchase under a supply contract,
but for purposes of calculating the value of the end product
includes services (except transportation services) incidental to its
supply, provided that the value of those incidental services does
not exceed that of the product itself.
(c) The Contractor agrees to deliver under this contract only
domestic end products unless, in its offer, it specified delivery of
qualifying country, Canadian, or other foreign end products in the
Buy American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program Certificate provision of the
solicitation. An offer certifying that a qualifying country end
product or a Canadian end product will be supplied requires the
Contractor to supply a qualifying country end product or a Canadian
end product, whichever is certified, or, at the Contractor's option,
a domestic end product.
(d) The offered price of qualifying country end products, or
Canadian end products for line items subject to the North American
Free Trade Agreement Implementation Act, should not include custom
fees or duty. The offered price of foreign end products listed in
paragraph (c)(2)(iii) of the Buy American Act--North American Free
Trade Agreement Implementation Act--Balance of Payments Program
Certificate provision of the solicitation, or the offered price of
domestic end products that contain nonqualifying country components,
must include all applicable duty. The award price will not include
duty for end products or components that are to be accorded duty-
free entry. Generally, each foreign end product listed in
[[Page 11548]]
paragraph (c)(2)(iii) of the Buy American Act--North American Free
Trade Agreement Implementation Act--Balance of Payments Program
Certificate provision of the solicitation is adjusted for the
purpose of evaluation by adding 50 percent of the offered price,
inclusive of duty.
252.225-7037 Duty-Free Entry--Eligible End Products.
As prescribed in 225.605-70(b), use the following clause:
Duty-Free Entry--Eligible End Products (Mar 1998)
(a) Definition. Eligible end product, as used in this clause,
means--
(1) Designated country end product, Caribbean Basin country end
product, or NAFTA country end product, as defined in the Trade
Agreements clause of this contract;
(2) NAFTA country end product, as defined in the Buy American
Act--North American Free Trade Agreement Implementation Act--Balance
of Payments Program clause of this contract; or
(3) Canadian end product, as defined in Alternate I of the Buy
American Act--North American Free Trade Agreement Implementation
Act--Balance of Payments Program clause of this contract.
(b) The requirements of this clause apply to this contract and
subcontracts, including purchase orders, that involve delivery of
eligible end products to be accorded duty-free entry whether
placed--
(1) Directly with a foreign concern as a prime contract; or
(2) As a subcontract or purchase order under a contract with a
domestic concern.
(c) Except as otherwise approved by the Contracting Officer, no
amount is or will be included in the contract price for duty for
eligible end products.
(d) The Contractor warrants that--
(1) All eligible end products, for which duty-free entry is to
be claimed under this clause, are intended to be delivered to the
Government; and
(2) The Contractor will pay any applicable duty to the extent
that such eligible end products, or any portion thereof (if not
scrap or salvage) are diverted to nongovernmental use, other than as
a result of a competitive sale made, directed, or authorized by the
Contracting Officer.
(e) The Government agrees to execute duty-free certificates and
to afford such assistance as appropriate to obtain the duty-free
entry of eligible end products for which the shipping documents bear
the notation specified in paragraph (f) of this clause, except as
the Contractor may otherwise agree.
(f) All shipping documents submitted to Customs, covering
eligible end products for which duty-free entry certificates are to
be issued under this clause, shall--
(1) Consign the shipments to the appropriate--
(i) Military department in care of the Contractor, including the
Contractor's delivery address; or
(ii) Military installation; and
(2) Include the following information--
(i) Prime contract number, and delivery order if applicable;
(ii) Number of the subcontract/purchase order for foreign
supplies if applicable;
(iii) Identification of carrier;
(iv)(A) For direct shipments to a U.S. military installation,
the notation:
UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE Duty-Free Entry
to be claimed pursuant to Section XXII, Chapter 98, Subchapter VIII,
Item 9808.00.30 of the Harmonized Tariff Schedule of the United
States. Upon arrival of shipment at the appropriate port of entry,
District Director of Customs, please release shipment under 19 CFR
part 142, and notify Commander, Defense Contract Management Command
(DCMC) New York, ATTN: Customs Team, DCMDN-GNIC, 207 New York
Avenue, Staten Island, New York 10305-5013, for execution of Customs
Forms 7501, 7501A, or 7506 and any required duty-free entry
certificates.
(B) In cases where the shipment will be consigned to other than
a military installation, e.g., a domestic contractor's plant, the
shipping document notation shall be altered to insert the name and
address of the contractor, agent or broker who will notify
Commander, DCMC, NY, for execution of the duty-free certificate.
(Note: In those instances where the shipment will be consigned to a
contractor's plant and no duty-free entry certificate is required,
the contractor or its agent shall claim duty-free entry under NAFTA
or other trade agreement and shall comply with the U.S. Customs
Service requirements. No notification to Commander, CDMC, NY, is
required.
(v) Gross weight in pounds (if freight is based on space
tonnage, state cubic feet in addition to gross shipping weight);
(vi) Estimated value in U.S. dollars; and
(vii) Activity Address Number of the contract administration
office actually administering the prime contract, e.g., for DCMC
Dayton, S3605A.
(g) Preparation of customs forms. (1) Except for shipments
consigned to a military installation, the Contractor shall prepare,
or authorize an agent to prepare, any customs forms required for the
entry of eligible end products in connection with DoD contracts into
the United States, its possessions, or Puerto Rico. The completed
customs forms shall be submitted to the District Director of Customs
with a copy to DCMC NY for execution of any required duty-free entry
certificates. Shipments consigned directly to a military
installation will be released in accordance with 10.101 and 10.102
of the U.S. Customs regulations.
(2) For shipments containing both supplies that are to be
accorded duty-free entry and supplies that are not, the Contractor
shall identify on the customs forms those items that are eligible
for duty-free entry.
(h) The Contractor agrees--
(1) To prepare (if this contract is placed directly with a
foreign supplier), or to instruct the foreign supplier to prepare, a
sufficient number of copies, of the bill of lading (or other
shipping document) so that at least two of the copies accompanying
the shipment will be available for use by the District Director of
Customs at the port of entry;
(2) To consign the shipment as specified in paragraph (f) of
this clause; and
(3) To mark the exterior of all packages as follows:
(i) ``UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE;'' and
(ii) The activity address number of the contract administration
office actually administering the prime contract.
(i) The Contractor agrees to notify the Contracting Officer
administering the prime contract in writing of any purchase under
the contract of eligible end products to be accorded duty-free entry
that are to be imported into the United States for delivery to the
Government or for incorporation in end items to be delivered to the
Government. The notice shall be furnished to the contract
administration office immediately upon award to the supplier of the
eligible end products. The notice shall contain--
(1) Prime contractor's name, address, and CAGE code;
(2) Prime contract number, and delivery order number if
applicable;
(3) Total dollar value of the prime contract or delivery order;
(4) Expiration date of the prime contract or delivery order;
(5) Foreign supplier's name and address;
(6) Number of the subcontract/purchase order for eligible end
products;
(7) Total dollar value of the subcontract for eligible end
products;
(8) Expiration date of the subcontract for eligible end
products;
(9) List of items purchased;
(10) An agreement by the Contractor that any applicable duty
shall be paid by the Contractor to the extent that such eligible end
products are diverted to nongovernmental use other than as a result
of a competitive sale made, directed, or authorized by the
Contracting Officer; and
(11) The scheduled delivery date(s).
(End of clause)
252.229-7004 [Amended]
88. Section 252.229-7004 is amended in the clause title by revising
the word ``CONTRACT'' to read ``CONTRACTOR''.
252.232-7006 [Removed and Reserved]
89. Section 252.232-7006 is removed and reserved.
252.234-7000 [Amended]
90. Section 252.234-7000 is amended in the introductory text by
revising the reference ``234.005-71'' to read ``234.005-71(a)''; by
revising the clause date to read ``(MAR 1998)''; and at the end of
paragraph (a) by removing the word ``Government'' and inserting in its
place the phrase ``Department of Defense''.
91. Section 252.234-7001 is revised to read as follows:
252.234-7001 Earned value management system.
As prescribed in 234.005-71(b), use the following clause:
[[Page 11549]]
Earned Value Management System (Mar 1998)
(a) In the performance of this contract, the Contractor shall
use an earned value management system (EVMS) that has been
recognized by the cognizant Administrative Contracting Officer (ACO)
as complying with the criteria provided in DoD 5000.2-R, Mandatory
Procedures for Major Defense Acquisition Programs (MDAPs) and Major
Automated Information System (MAIS) Acquisition Programs.
(b) If, at the time of award, the Contractor's EVMS has not been
recognized by the cognizant ACO as complying with EVMS criteria (or
the Contractor does not have an existing cost/schedule control
system that has been accepted by the Department of Defense), the
Contractor shall apply the system to the contract and shall be
prepared to demonstrate to the ACO that the EVMS complies with the
EVMS criteria referenced in paragraph (a) of this clause.
(c) The Government may require integrated baseline reviews. Such
reviews shall be scheduled as early as practicable and should be
conducted within 180 calendar days after (1) contract award, (2) the
exercise of significant contract options, or (3) the incorporation
of major modifications. The objective of the integrated baseline
review is for the Government and the Contractor to jointly assess
areas, such as the Contractor's planning, to ensure complete
coverage of the statement of work, logical scheduling of the work
activities, adequate resourcing, and identification of inherent
risks.
(d) Unless a waiver is granted by the ACO, Contractor-proposed
EVMS changes require approval of the ACO prior to implementation.
The ACO shall advise the Contractor of the acceptability of such
changes within 30 calendar days after receipt of the notice of
proposed changes from the Contractor. If the advance approval
requirements are waived by the ACO, the Contractor shall disclose
EVMS changes to the ACO at least 14 calendar days prior to the
effective date of implementation.
(e) The Contractor agrees to provide access to all pertinent
records and data requested by the ACO or duly authorized
representative. Access is to permit Government surveillance to
ensure that the EVMS complies, and continues to comply, with the
criteria referenced in paragraph (a) of this clause.
(f) The Contractor shall require the following subcontractors to
comply with the requirements of this clause:
(Contracting Officer to insert names of subcontractors selected for
application of EVMS criteria in accordance with 252.234-7000(c).)
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(End of clause)
252.236-7010 [Amended]
92. Section 252.236-7010 is amended in the introductory text by
revising the reference ``236.570(c)'' to read ``236.570(c)(1)''.
93. Section 252.236-7012 is added to read as follows:
252.236-7012 Military construction on Kwajalein Atoll--evaluation
preference.
As prescribed in 236.570(c)(2), use the following provision:
Military Construction on Kwajalein Atoll--Evaluation Preference (Mar
1998)
(a) Definitions. As used in this provision--
(1) Marshallese firm means a local firm incorporated in the
Marshall Islands, or otherwise legally organized under the laws of
the Marshall Islands, that--
(i) Is more than 50 percent owned by citizens of the Marshall
Islands; or
(ii) Complies with the following:
(A) The firm has done business in the Marshall Islands on a
continuing basis for not less than 3 years prior to the date of
issuance of this solicitation;
(B) Substantially all of the firm's directors of local
operations, senior staff, and operating personnel are resident in
the Marshall Islands or are U.S. citizens; and
(C) Most of the operating equipment and physical plant are in
the Marshall Islands.
(2) United States firm means a firm incorporated in the United
States that complies with the following:
(i) The corporate headquarters are in the United States;
(ii) The firm has filed corporate and employment tax returns in
the United States for a minimum of 2 years (if required), has filed
State and Federal income tax returns (if required) for 2 years, and
has paid any taxes due as a result of these filings; and
(iii) The firm employs United States citizens in key management
positions.
(b) Evaluation. Offers from firms that do not qualify as United
States firms or Marshallese firms will be evaluated by adding 20
percent to the offer, unless application of the factor would not
result in award to a United States firm.
(c) Status. The offeror is ________ a United States firm;
________ a Marshallese firm; ________ Other.
(End of provision)
252.237-7019 [Removed and Reserved]
94. Section 252.237-7019 is removed and reserved.
252.241-7000 [Amended]
95. Section 252.241-7000 is amended in the introductory text by
revising the reference ``241.007-70(a)'' to read ``241.501-70(a)''.
252.241-7001 [Amended]
96. Section 252.241-7001 is amended in the introductory text by
revising the reference ``241.007-70(b)'' to read ``241.501-70(b)''.
97. Section 252.242-7005 is amended by revising the clause date and
paragraphs (b)(4) and (d) to read as follows:
252.242-7005 Cost/Schedule Status Report.
* * * * *
Cost/Schedule Status Report (Mar 1998)
* * * * *
(b) * * *
(4) Establishing constraints to preclude subjective adjustment
of data to ensure that performance measurement remains realistic.
The total allocated budget may exceed the contract budget base only
after consultation with the Contracting Officer. For cost-
reimbursement contracts, the contract budget base shall exclude
changes for cost growth increase, other than for authorized changes
to the contract scope; and
* * * * *
(d) The Government may require integrated baseline reviews. Such
reviews shall be scheduled as early as practicable and should be
conducted within 180 calendar days after (1) contract award, (2) the
exercise of significant contract options, or (3) the incorporation
of major modifications. The objective of the integrated baseline
review is for the Government and the Contractor to jointly assess
areas, such as the Contractor's planning, to ensure complete
coverage of the statement of work, logical scheduling of the work
activities, adequate resourcing, and identification of inherent
risks.
* * * * *
98. Section 252.243-7002 is revised to read as follows:
252.243-7002 Requests for equitable adjustment.
As prescribed in 243.205-72, use the following clause:
Requests for Equitable Adjustment (Mar 1998)
(a) The amount of any request for equitable adjustment to
contract terms shall accurately reflect the contract adjustment for
which the Contractor believes the Government is liable. The request
shall include only costs for performing the change, and shall not
include any costs that already have been reimbursed or that have
been separately claimed. All indirect costs included in the request
shall be properly allocable to the change in accordance with
applicable acquisition regulations.
(b) In accordance with 10 U.S.C. 2410(a), any request for
equitable adjustment to contract terms that exceeds the simplified
acquisition threshold shall bear, at the time of submission, the
following certificate executed by an individual authorized to
certify the request on behalf of the Contractor:
I certify that the request is made in good faith, and that the
supporting data are accurate and complete to the best of my
knowledge and belief.
----------------------------------------------------------------------
(Official's Name)
----------------------------------------------------------------------
(Title)
(c) The certification in paragraph (b) of this clause requires
full disclosure of all relevant facts, including----
(1) Cost or pricing data if required in accordance with
subsection 15.403-4 of the Federal Acquisition Regulation (FAR); and
(2) Information other than cost or pricing data, in accordance
with subsection 15.403-3 of the FAR, including actual cost data and
data to support any estimated costs, even if cost or pricing data
are not required.
[[Page 11550]]
(d) The certification requirement in paragraph (b) of this
clause does not apply to----
(1) Requests for routine contract payments; for example,
requests for payment for accepted supplies and services, routine
vouchers under a cost-reimbursement type contract, or progress
payment invoices; or
(2) Final adjustment under an incentive provision of the
contract.
(End of clause)
PART 253--FORMS
99. Section 253.204-70 is amended by revising paragraphs
(c)(4)(xi)(A) and (c)(4)(xi)(C) to read as follows:
253.204-70 DD Form 350, Individual Contracting Action Report.
* * * * *
(c) * * *
(4) * * *
(xi) * * *
(A) Code Y--Yes--Obtained. Enter code Y when cost or pricing data
were obtained (see FAR 15.403-4) and certified in accordance with FAR
15.406-2.
* * * * *
(C) Code W--Not Obtained--Waived. Enter code W when cost or pricing
data were not obtained because the requirement was waived (see FAR
15.403-1(c)(4)).
* * * * *
Appendix G to Chapter 2 [Amended]
100. Appendix G to Chapter 2 is amended in Part 1, Section G-101,
paragraph (c), under the heading ``AIR FORCE'', by revising the symbol
``SAF/AQCO'' to read ``SAF/AQCP''.
101. Appendix G to Chapter 2 is amended in Part 2 by removing entry
DAAB24; by revising entry DACA81; and by adding, in alpha-numerical
order, entries DAJN01, DAJN02, and DASW02 to read as follows:
PART 2--ARMY ACTIVITY ADDRESS NUMBERS
* * * * *
DACA81, CA81, CN USA Engineer District, Far East, APO AP 96205-0610
* * * * *
DAJN01, JN01, 1B U.S. Southern Command, Contracting Office, HQCMDT,
7955 NW 12th Street, Suite 450, Miami, FL 33126-1823
DAJN02, JN02, 8V Fort Buchanan Contracting Office, Attn: AFZK-DOC,
Fort Buchanan, PR 00934-5049
* * * * *
DASW02, SW02, 1W Joint Visual Information Activity, Attn: SAM-OPV-
JC, 601 North Fairfax Street, Room 334, Alexandria, VA 22314-2007
* * * * *
102. Appendix G to Chapter 2 is amended in Part 5 by removing entry
F04704 R9; and by revising entry FA2550 to read as follows:
PART 5--AIR FORCE ACTIVITY ADDRESS NUMBERS
* * * * *
FA2550 50 CONS, 66 Falcon Parkway, Ste 49, Falcom AFB, CO 80912-
6649
* * * * *
103. Appendix G to Chapter 2 is amended by revising Part 6 to read
as follows:
PART 6--DEFENSE LOGISTICS AGENCY ACTIVITY ADDRESS NUMBERS
SP0100 Defense Personnel Support Center, TW Directorate of
Clothing & Textiles, 2800 South 20th Street, Philadelphia, PA 19101-
8419
SP0103 W7 Defense Personnel Support Center, Installation Support,
2800 South 20th Street, Philadelphia, PA 19101-8419
SP0200 TX Defense Personnel Support Center, Directorate of Medical
Materiel, 2800 South 20th Street, Philadelphia, PA 19101-8419
SP0300 UE Defense Personnel Support Center, Directorate of
Subsistence, 2800 South 20th Street, Philadelphia, PA 19101-8419
SP0302 W6 Defense Subsistence Region Pacific, Attn: DSR-Pacific,
2155 Mariner Square Loop, Alameda, CA 94501-1022
SP0303 U6 Defense Subsistence Region Europe, DSR Europe, APO AE
09052
SP0400 TY Defense Supply Center Richmond, Business Operations, 800
Jefferson Davis Highway, Richmond, VA 23297-5770
SP0410 XH Defense Supply Center Richmond, Base Spt Div, Dir of Spec
Proc, 8000 Jefferson Davis Highway, Richmond, VA 23297-5312
SP0411 TY Defense Supply Center Richmond, Proc Br (ESOC), Customer
Asst Ctr, 8000 Jefferson Davis Highway, Richmond, VA 23297-5871
SP0413 TY Defense Supply Center Richmond, Spec Purchase Br, Prod
Ctr Spt Div, 8000 Jefferson Davis Highway, Richmond, VA 23297-5864
SP0414 TY Defense Supply Center Richmond, SASPS Phase I Br, Prod
Ctr Spt Div, 8000 Jefferson Davis Highway, Richmond, VA 23297-5863
SP0420 XK Defense Supply Center Richmond, DODDS Div, Dir Of Spec
Proc, 8000 Jefferson Davis Highway, Richmond, VA 23297-5313
SP0430 TY Defense Supply Center Richmond, Proc Br, Product Center
5, 8000 Jefferson Davis Highway, Richmond, VA 23297-5813
SP0440 TY Defense Supply Center Richmond, Proc Br, Product Center
7, 8000 Jefferson Davis Highway, Richmond, VA 23297-5834
SP0441 TY Defense Supply Center Richmond, Proc Br, Product Center
6, 8000 Jefferson Davis Highway, Richmond, VA 23297-5822
SP0450 TY Defense Supply Center Richmond, Proc Br, Product Center
4, 8000 Jefferson Davis Highway, Richmond, VA 23297-5800
SP0451 TY Defense Supply Center Richmond, Proc Br, Product Center
2, 8000 Jefferson Davis Highway, Richmond, VA 23297-5772
SP0454 TY Defense Supply Center Richmond, Proc Br, Product Center
4, Enhanced Vendor Delivery Program, 8000 Jefferson Davis Highway,
Richmond, VA 23297-5800
SP0460 TY3 Defense Supply Center Richmond, Proc Br, Product Center
1, 8000 Jefferson Davis Highway, Richmond, VA 23297-5772
SP0461 TY Defense Supply Center Richmond, Special Purchase Branch
(SPUR), 8000 Jefferson Davis Highway, Richmond, VA 23297-5864
SP0480 TY Defense Supply Center Richmond, Aircraft Engines, 8000
Jefferson Davis Highway, Richmond, VA 23297-5876
SP0490 TY Defense Supply Center Richmond, Proc Br, Product Center
1, 8000 Jefferson Davis Highway, Richmond, VA 23297-5846
SP0499 Defense Supply Center Richmond-FCIM, 8000 Jefferson Davis
Highway, Richmond, VA 23297-5770
SP0500 TZ, WU Defense Industrial Supply Center, 700 Robbins Avenue,
Philadelphia, PA 19111-5096
SP0510 W2 Defense Industrial Supply Center, Base Operating Support
System, 700 Robbins Avenue, Philadelphia, PA 19111-5096
SP0520 Defense Industrial Supply Center, Product Verification
Testing Acquisition, 700 Robbins Avenue, Philadelphia, PA 19111-5096
SP0599 Defense Industrial Supply Center-FCIM, 700 Robbins Avenue,
Philadelphia, PA 19111-5096
SP0600 UA Defense Fuel Supply Center, 8725 John, J. Kingman Road,
Suite 2533, Fort Belvoir, VA 22304-6160
SP0700 UB, UZ Defense Supply Center Columbus, PO Box 32990,
Columbus, OH 43216-3990
SP0701 Defense Supply Center Columbus, Attn: DSCC-OT, Bldg 20,
Fourth Floor, Columbus, OH 43216-5000
SP0710 YL Defense Supply Center Columbus, Base Contracting, PO Box
16704, Columbus, OH 43216-5010
SP0720 YM Defense Supply Center Columbus, Lumber Solicitations/
Awards, PO Box 16704, Columbus, OH 43216-5010
SP0730 WZ Defense Supply Center Columbus, Military
Interdepartmental PR MIPR Division, PO Box 3990, Columbus, OH 43216-
5000
SP0740 XJ Defense Supply Center Columbus, Aerospace Solicitations/
Awards, PO Box 3990, Columbus, OH 43216-5000
SP0750 UB Defense Supply Center Columbus, Land Solicitations/
Awards, PO Box 16704, Columbus, OH 43216-5010
SP0760 UB Defense Supply Center Columbus, Maritime Solicitations/
Awards, PO Box 16704, Columbus, OH 43216-5010
SP0770 UB Defense Supply Center Columbus, Commodities
Solicitations/Awards, PO Box 16704, Columbus, OH 43216-5010
[[Page 11551]]
SP0780 Defense Supply Center Columbus, Government Furnished
Property Account, ATTN: DSCC-PAPB GFP, Building 20 A2N, 3990 E Broad
Street, Columbus, OH 43216-5000
SP0799 Defense Supply Center Columbus-FCIM, PO Box 3990, Columbus,
OH 43216-5000
SP0833VS Defense National Stockpile Center, 8725 John J. Kingman
Road, Suite 3339, Fort Belvoir, VA 22060-6223
SP0900UD Defense Supply Center Columbus, Equipment, PO Box 16704,
Dayton, OH 43216-5010
SP0905 Defense Supply Center Columbus, PO Box 16704, Dayton, OH
43216-5010
SP0910U7 Defense Supply Center Columbus, Base Contracting Section,
PO Box 16704, Dayton, OH 43216-5010
SP0920W4 Defense Supply Center Columbus, Electro Mechanical, PO Box
16704, Dayton, OH 43216-5010
SP0930 Defense Supply Center Columbus, Switches, PO Box 16704,
Dayton, OH 43216-5000
SP0935 Defense Supply Center Columbus, Connectors, PO Box 16704,
Dayton, OH 43216-5000
SP0960 Defense Supply Center Columbus, Active Devices, PO Box
16704, Dayton, OH 43216-5000
SP0970 Defense Supply Center Columbus, PO Box 16704, Dayton, OH
43216-5000
SP0980 Defense Supply Center Columbus, Tailored Logistics
Acquisitions, PO Box 16704, Dayton, OH 43216-5000
SP0999 Defense Supply Center Columbus-FCIM, PO Box 16704, Dayton,
OH 43216-5000
SP3100WX Defense Distribution Region East, Office of Contracting,
New Cumberland, PA 17070-5001
SP3200TV Defense Distribution Region West, Office of Contracting,
Building S-4, Lathrop, CA 95330-5000
SP3500UN Defense Distribution Region East, Office of Contracting,
New Cumberland, PA 17070-5001
SP4400X1 Defense Reutilization Marketing Service, 74 Washington
Avenue North, Battle Creek, MI 49017-3092
SP4410X1 Defense Reutilization Marketing Service, Special Contracts
Division, Attn: DRMS-PO, 74 Washington Avenue North, Battle Creek,
MI 49017-3092
SP4420XI Defense Reutilization Marketing Service, Attn: DRMS-PMG,
APO AE 09096
SP4700YK DLA Administrative Support Center, Office of Contracting,
8725 John J. Kingman Road, Suite 0119, Fort Belvoir, VA 22060-6220
SP4800 Defense Logistics Agency, Office of Small and Disadvantaged,
Business Utilization, 8725 John J. Kingman Road, Suite 1127, Fort
Belvoir, VA 22060-6221
SAS01A UY DCMC Pacific--Australia, Unit 11009, APO AP 96551
SBL00A MJ DCMC Northern Europe--Belgium, PSC 82, Box 002, APO AE
09724
SCN01A WV DCMC Americas, 275 Bank Street, Suite 200, Ottawa, Canada
K2P 2L6
SGR18A DCMC Southern Europe, CMR 410, Box 764, APO AP 09096
SJP10A Y9 DCMC Pacific--Japan, PSC 477, Box 39, FPO AP 96306-2739
SKR08A R1 DCMC Pacific, Unit 2000, APO AE 96214-5000
SML04A XC DCMC Pacific--Kuala Lumpur, American Embassy, APO AP
96535-5000
SPR01A QF DCMC Americas--Puerto Rico, Box DLA NSGA, FPO AA 34053-
0007
SSA20A DCMC Southern Europe--Spain, PSC 61, Box 3000, APO AE 09642-
5000
SSN05A DCMC Pacific--Singapore, PSC 470, Box 2700, FPO AP 96534-
2100
SSR01A YE DCMC Southern Europe--Israel, American Embassy Unit 7228,
APO AE 09830-7228
SSU01A U4 DCMC Saudi Arabia--Air DCMCI Unit 61305, APO AE 09803-
1305
SSU03A US DCMC Saudi Arabia--Land, DCMCI Unit 61301, APO AE 09803-
1301
STA21A DCMC Southern Europe--Italy (Brindisi), PSC 817, Box 61, FPO
AE 09622-0061
STA23A DCMC Southern Europe--Italy, Unit 31401, Box 71, APO AE
09630-0071
STR02A TQ DCMC Southern Europe--Turkey, Unit 9050, APO AE 09822-
9050
SUK12A VN DCMC Northern Europe, PSC 821, Box 55, APO AE 09421-0055
SUK14A DCMC Northern Europe--UK Bristol, Unit 4825, APO AE 09456-
4825
SUK15A DCMC Northern Europe--UK Rochester, PSC 30, Box 100, APO AE
09447-0100
SZA01A DCMC Pacific--New Zealand, PSC 467, Box 298, FPO AP 96531-
2000
S0101A DCMC Birmingham, 1910 Third Avenue North, Room 201,
Birmingham, AL 35203-2376
S0102A WA DCMC Pemco Aeroplex Birmingham, PO Box 12447, Birmingham,
AL 35202-2447
S0302A WY DCMC Phoenix, 215 North 7th Street, Phoenix, AZ 85034-
1012
S0305A SR DCMC Hughes Tucson, PO Box 11337, Bldg 801, M/5 D-4,
Tucson, AZ 85734-1337
S0506A WL DCMD West, 222 North Sepulveda Boulevard, El Segundo, CA
90245-4320
S0507A XR DCMC San Francisco, 1265 Borregas Avenue, Sunnyvale, CA
94089
S0512AYC DCMC Van Nuys, 6230 Van Nuys Boulevard, Van Nuys, CA
91401-2713
S0513AUG DCMC Santa Ana, 34 Civic Center Plaza, PO Box C-12700,
Santa Ana, CA 92712-2700
S0514AVH DCMC San Diego, 7675 Dagget Street, Suite 200, San Diego,
CA 92111-2241
S0520AVR DCMC San Francisco--ULDP San Jose, M/SX65, PO Box 367, San
Jose, CA 95103-0367
S0530AX9 DCMC McDonnell Douglas, 5301 Bolsa Avenue, Huntington
Beach, CA 92647-2099
S0539AQT DCMC Hughes, Los Angeles, PO Box 92463, Los Angeles, CA
90009-2463
S0542ARY DCMC Rockwell, Canoga Park, PO Box 7922, Canoga Park, CA
91303-7922
S0543AQX DCMC Lockheed Martin Missiles & Space, PO Box 3504,
Sunnyvale, CA 94088-3504
S0544ATC DCMC McDonnell Douglas, 1570 Hughes Way, Mail Code 54-79,
Long Beach, CA 90846-0001
S0546AQR DCMC Northrop, Gumman Hawthorne, One Northrop Avenue,
Hawthorne, CA 90250-3277
S0602AVK DCMC Denver, Orchard Place 2, Suite 200, 5975 Greenwood
Plaza Boulevard, Englewood, CO 80111-4715
S0605ARE DCMC Lockheed Martin Astronautics, PO Box 179, Denver, CO
80201-0179
S0701AWB DCMC Hartford, 130 Darlin Street, East Hartford, CT 06108-
3234
S0702AUP DCMC Stratford, 550 Main Street, Stratford, CT 06497-7593
S0703AXT DCMC Hamilton Standard, 1 Hamilton Road, Windsor Locks, CT
06096-0463
S0707ALF DCMC Sikorsky, 6900 Main Street, Stratford, CT 06497-9131
S0708AT5 DCMC Pratt & Whitney, East Hartford, 400 Main Street, Mail
Stop 104-08, East Hartford, CT 06108-0969
S1002AWW DCMC Orlando, 3555 Maguire Boulevard, Orlando, FL 32803-
3726
S1005AXL DCMC Lockheed Martin, Orlando, 5600 Sand Lake Road, MP49,
Orlando, FL 32819-8907
S1009AV1 DCMC Orlando-Harris, 1425 Troutman Boulevard, NE, Palm
Bay, FL 32905-4102
S1011AT2 DCMC Pratt & Whitney, West Palm Beach, PO Box 109600, West
Palm Beach, FL 33410-9600
S1103AY1 DCMC Atlanta, 805 Walker Street, Marietta, GA 30060-2789
S1104A DCMC Atlanta-Rockwell, PO Box 1356, Duluth, GA 30136-1357
S1109AZ4 DCMC Clearwater, Gadsen Building, Suite 200, 9549 Koger
Blvd., St. Petersburg, FL 33702-2455
S1110A Z5 DCMC Grumman, St. Augustine, 5000 US Highway 1, North, PO
Drawer 3447, St. Augustine, FL 32085-3447
S1111A RK DCMC Lockheed Martin Marietta, 86 South Cobb Drive, Bldg
B-2, Marietta, GA 30063-0260
S1211A U8 DCMC Aircraft Program Management Officer, 805 Walker
Street, Marietta, GA 30060-2789
S1221A X5 DCMC Grumman Melbourne, PO Box 9650, Melbourne, FL 32902-
9650
S1403A YP DCMC Chicago, PO Box 66911, Chicago, IL 60666-0911
S1501A WG DCMC Indianapolis, 8899 East 56th Street, Indianapolis,
IN 46249-5701
S1505A X2 DCMC Indianapolis-Hughes, Defense Communications, 1616
Directors Row, Fort Wayne, IN 46808-1286
S1510A Z9 DCMC Pacific-Honolulu, Box 64110, Camp HM Smith,
Honolulu, HI 96861-4110
S1701A YD DCMC Wichita, U.S. Courthouse, Suite B-34, 401 North
Market, Wichita, KS 67202-2095
S1903A DCMC Michoud-Stennis, 138000 Old Gentilly Hwy, Building
350, PO Box 29503, New Orleans, LA 70189-0503
S2103A S2 DCMC Westinghouse Baltimore, PO Box 1693, M/S 1285,
Baltimore, MD 21203-1693
S2202A UT DCMC East, 495 Summer Street, Boston, MA 02210-2184
S2203A XX DCMC Boston-GTE, Government Systems Corp, 200 First
Avenue, Needham, MA 02194-9123
S2205A XF DCMC Raytheon, 2 Wayside Avenue, Burlington, MA 01803-
0901
S2206A Y3 DCMC Boston, 495 Summer Street, Boston, MA 02210-2138
[[Page 11552]]
S2207A7Q DCM GE Lynn, 1000 Western Avenue, Lynn, MA 01910-0445
S2208A NJ DCMC Lockheed Martin Defense Systems, 100 Plastics
Avenue, Pittsfield, MA 01201-3677
S2209A SQ DCMC Boston-Textron Systems Division, 201 Lowell Street,
Wilmington, MA 01887-2941
S2303A VW DCMC Grand Rapids, Riverview Center Building, 678 Front
Street, Grand Rapids, MI 49504-5352
S2305A Y7 DCMC Detroit, U.S. Army Tank-Automotive Command, ATTN:
DCMDE-GJD, Warren, MI 48397-5000
S2401A WQ DCMC Twin Cities, 3001 Metro Drive, Bloomington, MN
55425-1573
S2404A UR DCMC Baltimore, 200 Towsontown Boulevard, West, Towson,
MD 21204-5299
S2605A XS DCMC St Louis, 1222 Spruce Street, St. Louis, MO 63103-
2812
S2606A JZ DCMC McDonnell Douglas, St. Louis, P.O. Box 516, St.
Louis, MO 63166-0516
S3001A YS DCMC Lockheed Martin Sanders, P.O. Box 0868, NHQ-539,
Nashua, NH 03061-0868
S3101A WT DCMC Springfield, Building 1, ARDEC, Picatinny, NJ 07806-
5000
S3102A UU DCMC Allied Signal, Route 46, Mail Stop 1-37, Teterboro,
NJ 07608-1173
S3109A WC DCMC Springfield-GEC/Kearfott, 164 Totowa Road, MS 11A30,
Wayne, NJ 07474-0975
S3110A X7 DCMC Lockheed Martin Delaware Valley, Mail Stop AE 2-W, 1
Federal Street, Camden, NJ 08102-1013
S3306A XU DCMC Syracuse, 615 Erie Boulevard West, Syracuse, NY
13402-2408
S3309A VX DCMC Long Island, 605 Stewart Avenue, Garden City, NY
11530-4761
S3310A DCMC New York, 207 New York City Avenue, Staten Island, NY
10305-5013
S3315A YR DCMC Lockheed Martin, Federal Systems, Owego, 1801 State
Route 17C, Owego, NY 13827-3998
S3316A KK DCMC Grumman Bethpage, Bethpage, NY 11714-3593
S3317A NH DCMC Lockheed Martin Tactical, Defense Systems, East, 365
Lakeville Road, Great Neck, NY 11020-1696
S3619A SB DCMC GE Aircraft Engines, Evendale, Mail Drop N-1,
Cincinnati,OH 45215-6303
S3603A VB DCMC Cleveland, Admiral Kidd Building, 555 East 88th
Street, Bratenahl, OH 44108-1068
S3605A VL DCMC Dayton, Gentile Station, 1001 Hamilton Street,
Dayton, OH 45444-5300
S3613A YB DCMC Cleveland-Westinghouse, 18901 Euclid Avenue, Plant
2, Cleveland, OH 44117-1388
S3616A X6 DCMC Cleveland-Lockheed Martin, Tactical Defense Systems,
Akron, 1210 Massillon Road, Akron, OH 44315-0001
S3618A YF DCMC General Dynamics Lima, 1155 Buckeye Road, Lima, OH
45804-1898
S3620A VA DCMC International, 8725 John J. Kingman Road, Fort
Belvoir VA 22060-6221
S3911A X3 DCMC Pittsburgh, Federal Building, Room 1612, 1000
Liberty Avenue, Pittsburgh, PA 15222-4190
S3912A XM DCMC Reading, 1125 Berkshire Blvd, Suite 160, Wyomissing,
PA 19610-1249
S3915A XD DCMC Philadelphia, South 20th Street, Philadelphia, PA
19101-7699
S3916A TU DCMC Boeing Helicopters, PO Box 16859, Philadelphia, PA
19142-0859
S4201A XY DCMC United Defense Limited Partnership, PO Box 15512,
York, PA 17405-1512
S4402A Z7 DCMC Dallas, 1200 Main Street, Dallas, TX 75202-4399
S4404A XN DCMC San Antonio, 615 East Houston, PO Box 1040, San
Antonio, TX 78294-1040
S4407A WN DCMC E-Systems Greenville, PO Box 6379, Greenville, TX
75403-6379
S4408A XZ DCMC Texas Instruments, PO Box 660246, MS 256, Dallas, TX
75266-0246
S4418A WI DCMC Bell Helicopter Textron, PO Box 1605, Fort Worth, TX
76101-1605
S4419A SL DCMC Lockheed, Fort Worth, PO Box 371, Fort Worth, TX
76101-0371
S4420A WP DCMC Lockheed Martin Vought Systems, PO Box 655907, M/S
4915, Dallas, TX 75265-5907
S4503A R6 DCMC Thiokol, PO Box 524, Mail Stop Z-10, Brigham City,
UT 84302-0524
S4801A XW DCMC Seattle, Corporate Campus East III, 3009 112th Ave,
NE, Suite 200, Bellevue, WA 98004-8019
S4804A SP DCMC Boeing, Seattle, PO Box 3707, Seattle, WA 98124-2207
S4807A WM DCMC Stewart and Stevenson, Inc., PO Box 457, Sealy, TX
77474-0457
Appendix I to Chapter 2 [Amended]
104. Appendix I to Chapter 2 is amended in section I-102,
paragraphs (a) and (b), and in section I-103, paragraph (a), by
revising the date ``September 30, 1998'' to read ``September 30,
1999''.
105. Appendix I to Chapter 2 is amended in section I-103, in the
introductory text of paragraph (b) and in paragraph (c), by revising
the date ``September 30, 1999'' to read ``September 30, 2000''.
106. Appendix I to Chapter 2 is amended in section I-109, in
paragraph (e)(3), by revising the date ``October 1, 1999, to read
``October 1, 2000''.
[FR Doc. 98-5272 Filed 3-6-98; 8:45 am]
BILLING CODE 5000-04-M