[Federal Register Volume 64, Number 152 (Monday, August 9, 1999)]
[Rules and Regulations]
[Pages 43098-43101]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20283]


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DEPARTMENT OF DEFENSE

48 CFR Parts 204, 212, 213, 252, and 253

[DFARS Case 98-D027]


Defense Federal Acquisition Regulation Supplement; Taxpayer 
Identification Numbers and Commercial and Government Entity Codes

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: The Director of Defense Procurement has issued a final rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to add procedures for reporting payment information to the Internal 
Revenue Service (IRS); to revise the procedures for obtaining Taxpayer 
Identification Numbers (TINs) and Commercial and Government Entity 
(CAGE) codes when contractors are required to register in the Central 
Contractor Registration (CCR) database; and to make editorial changes.

EFFECTIVE DATE: August 9, 1999.

FOR FURTHER INFORMATION CONTACT:
Ms. Sandra G. Haberlin, Defense Acquisition Regulations Council, PDUSD 
(A&T) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-
3062. Telephone (703) 602-0289; telefax (703) 602-0350. Please cite 
DFARS Case 98-D027.

SUPPLEMENTARY INFORMATION: 

A. Background

    1. Reporting payment information to the IRS. This rule supplements 
the final FAR rule published as Item I of Federal Acquisition Circular 
97-12 on June 17, 1999 (64 FR 32741).

    a. The FAR rule renumbered and retitled FAR 4.903, Payment 
information, as FAR 4.904, Reporting payment information to the IRS; 
and deleted the list, previously located at FAR 4.903(b), of the types 
of payments that are exempt from reporting payment information to the 
IRS on Form 1099. The list was considered unnecessary for including in 
the FAR, because the payment office is responsible for submitting Form 
1099 reports to the IRS.

    b. This rule adds a new section at DFARS 204.904, Reporting payment 
information to the IRS. The new section contains a list that is similar 
to the one previously found in the FAR, but the list has been updated 
to comply with the Taxpayer Relief Act of 1997 (Pub. L. 105-32). 
Section 1022 of the Act amended 26 U.S.C. 6041A to add payments under 
certain classified contracts to the list of exceptions, and to remove 
payments for services provided by corporations from the list. DFARS 
204.904 also adds a requirement for the contracting officer to provide 
a statement to the payment office if the contractor is providing 
services subject to Form 1099 reporting to the IRS. The statement is 
not required if the contracting officer concludes that one of the 
exceptions listed at DFARS 204.904(1) applies. This procedure is added 
to the DFARS to facilitate issuance of Form 1099 reports by the payment 
office.

    2. Procedures for obtaining TINs and CAGE code numbers when CCR 
applies. The FAR rule also modified the process for obtaining TINs, by 
permitting agencies to prescribe their own procedures for obtaining 
TINs from contractors and for providing the TINs to the payment office. 
DoD uses the CCR database for these purposes. This DFARS rule clarifies 
that the contracting officer must not use the solicitation provisions 
at FAR 52.204-3, Taxpayer Identification, and DFARS 252.204-7001, 
Commercial and Government Entity (CAGE) Code Reporting; or paragraph 
(b) of the provision at FAR 52.212-3, Offeror Representations and 
Certifications--Commercial Items, when the contractor is required to 
register in the CCR database, since the information that these 
provisions request is duplicative of the information that the 
contractor must provide during the CCR process.

    3. Editorial changes. This DFARS rule makes a number of editorial 
changes, including updating CAGE code information in Subpart 204.72, 
Contractor Identification, and clarifying certain requirements in 
Subpart 204.73, Central Contractor Registration.

    4. Proposed rule. A proposed DFARS rule was published in the 
Federal Register on January 15, 1999 (64 FR 2617). Three sources 
submitted comments on the proposed rule. All comments were considered 
in the development of the final rule.
    5. This rule was not subject to Office of Management and Budget 
review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD certifies that this final rule 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 the FAR and DFARS already contain requirements for offerors and 
contractors to provide TINs and CAGE codes and to register in the CCR 
database. This rule simply clarifies that, if a prospective contractor 
is required to register in the CCR database, it does not have to 
provide a TIN or a CAGE code to the contracting officer.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. 3501, et seq.) applies 
because the rule contains information collection requirements. The 
final rule decreases the collection requirements currently approved 
under Office of Management and Budget Control Number 0704-0225, since 
the rule limits use of the solicitation provision at 252.204-7001, 
Commercial and Government Entity (CAGE) Code Reporting, to contractors 
that are not required to register in the CCR database. Therefore, the 
final rule reduces the number of respondents by 89,545, and the number 
of burden hours by 22,386.

List of Subjects in 48 CFR Parts 204, 212, 213, 252, and 253

    Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.


    Therefore, 48 CFR parts 204, 212, 213, 252, and 253 are amended as 
follows:

    1. The authority citation for 48 CFR parts 204, 212, 213, 252, and 
253 continues to read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 204--ADMINISTRATIVE MATTERS

    2. Section 204.203 is added to read as follows:

[[Page 43099]]

204.203  Taxpayer identification information.

    (1) The procedures at FAR 4.203(a) and (b) do not apply to 
contracts that include the clause at 252.204-7004, Required Central 
Contractor Registration.

    (2) For a DoD basic ordering agreement or indefinite-delivery 
contract that requires the contractor to register in the Central 
Contractor Registration (CCR) database (see subpart 207.73)--

    (i) The contracting officer issuing the agreement or contract need 
not provide a copy of the completed solicitation provision at FAR 
52.204-3 or 52.212-3(b) to DoD contracting officers placing orders 
under the agreement or contract; and
    (ii) A DoD contracting officer placing an order under the agreement 
or contract need not provide the TIN or type of organization 
information to the payment office.

    (3) For a non-DoD basic ordering agreement or indefinite-delivery 
contract, a DoD contracting officer placing an order under the 
agreement or contract must use the procedures at 204.7303(a)(2) to 
determine if the contractor is registered in the CCR database.

    (i) If the contractor is registered, the contracting officer need 
not provide the TIN or type of organization information to the payment 
office.

    (ii) If the contractor is not registered, the contracting officer 
must follow the procedures at 204.7303(b).


204.602-70  [Removed]

    3. Section 204.602-70 is removed.

    4. Section 204.603 is added to read as follows:


204.603  Solicitation provisions.

    (1) Use the provision at 252.204-7001, Commercial and Government 
Entity (CAGE) Code Reporting, in solicitations when--

    (i) The solicitation does not include the clause at 252.204-7004, 
Required Central Contractor Registration; and

    (ii) The CAGE codes for the potential offerors are not available to 
the contracting office.

    (2) Use the provision at FAR 52.204-6, Data Universal Numbering 
System (DUNS) Number, in solicitations that--

    (i) Have an estimated value exceeding $25,000; or

    (ii) Have an estimated value of $25,000 or less and include the 
clause at $252.204-7004, Required Central Contractor Registration.

    5. Subpart 204.9 is revised to read as follows:

Subpart 204.9--Taxpayer Identification Number Information

Sec.
204.902  General.
204.904  Reporting payment information to the IRS.
204.905  Solicitation provision.


204.902  General

    (b) DoD uses DD Form 350, Individual Contracting Action Report, 
(see 204.670) to meet these reporting requirements.


204.904  Reporting payment information to the IRS.

    (1) 26 U.S.C. 6041 and 6041A and 26 CFR 1.6041 require Government 
payors to report to the IRS, on IRS Form 1099, payments of an annual 
cumulative value of $600 or more provided to a contractor, except 
payments for--

    (i) Supplies, unless the supplies are incidental to the furnishing 
of services;

    (ii) Telegram, telephone, freight, storage, or similar charges;

    (iii) Income that the payor must report on IRS Form W-2 (e.g., 
payments to employees or payments under contracts for personal 
services);
    (iv) Any contract with a Federal agency;

    (v) Any contract with a State, the District of Columbia, or a 
possession of the United States; or a political subdivision, agency, or 
instrumentality of any of the foregoing;

    (vi) Any contract with an organization exempted from taxation by 26 
U.S.C. 501(a). Such organizations may include charitable, social 
welfare, labor, agricultural, veterans', and political organizations; 
business leagues; social clubs; fraternal societies; and employees' 
associations. Contracting officers may obtain additional information to 
assist in determining an organization's tax-exempt status via the 
Internet at http://www.irs.ustreas.gov/prod/bus__info/eo/eo-types.html;

    (vii) Any contract with a foreign government or a political 
subdivision of a foreign government;

    (viii) Any contract with an international organization listed in 22 
U.S.C. 288;

    (ix) Any classified contract excepted by 26 U.S.C. 6050M. As used 
in this section only, a contract is classified if--

    (A) DoD designates the existence of the contract or the contract 
subject matter as classified (i.e., the contract requires a specific 
degree of protection against unauthorized disclosure for reasons of 
national security); or

    (B) The head of the agency determines that filing IRS Form 1099 
would interfere with the effective conduct of a confidential law 
enforcement or foreign intelligence activity; or

    (x) Such other services as the IRS may specify in regulations.

    (2) Unless an exception in paragraph (1) of this section applies, 
the contracting officer must provide, as the last page of the copy of 
the contract sent to the payment office--

    (i) A statement that the contractor is providing services subject 
to Form 1099 payment information reporting to the IRS, as required by 
26 U.S.C. 6041 and 6041A; and

    (ii) The contractor's Taxpayer Identification Number and type of 
organization, if the contract does not include the clause at 252.204-
7004, Required Central Contractor Registration.


204.905  Solicitation provision.

    Do not use the provision at FAR 52.204-3, Taxpayer Identification, 
in solicitations that include the clause at 252.204-7004, Required 
Central Contractor Registration.

    6. Sections 204.7200 through 204.7204 are revised to read as 
follows:


204.7200  Scope of subpart

    This subpart prescribes uniform policies and procedures for 
identification of commercial and Government entities when it is 
necessary to--
    (a) Exchange data with another contracting activity, including 
contract administration activities and contract payment activities, or 
comply with the reporting requirements of subpart 204.6; or

    (b) Identify contractors for the purpose of developing computerized 
acquisition systems or solicitation mailing lists.


204.7201   Definitions.

    (a) ``Commercial and Government Entity (CAGE) code'' means--

    (1) A code assigned by the Defense Logistics Information Service 
(DLIS) to identify a commercial or Government entity; or

    (2) A code assigned by a member of the North Atlantic Treaty 
Organization (NATO) that DLIS records and maintains in the CAGE master 
file. This type of code is known as an ``NCAGE code.''

    (b) ``Contractor identification code'' means a code that the 
contracting office uses to identify an offeror. The three types of 
contractor identification codes are CAGE codes, Data Universal 
Numbering System (DUNS) numbers, and Taxpayer Identification Numbers 
(TINs).

[[Page 43100]]

204.7202   General.


204.7202-1   CAGE codes.

    (a) DLIS assigns or records and maintains CAGE codes to identify 
commercial and Government entities. DoD 4000.25-5-M, Military Standard 
Contract Administration Procedures (MILSCAP); Volume 7 of DoD 4100.39-
M, Federal Logistics Information System (FLIS) Procedures Manual; and 
253.204-70(b)(5)(ii)(C) prescribe use of CAGE codes.

    (b)(1) If a prospective contractor must register in the Central 
Contractor Registration (CCR) database (see subpart 204.73) and does 
not have a CAGE code, DLIS will assign a CAGE code when the prospective 
contractor submits its request for registration in the CCR database.

    (2) If registration in the CCR database is not required, the 
prospective contractor's CAGE code is not already available in the 
contracting office, and the prospective contractor does not respond to 
the provision at 252.204-7001, Commercial and Government Entity (CAGE) 
Code Reporting, use the following procedures:

    (i) To identify the prospective contractor's CAGE code, use--

    (A) The monthly H-series CD ROM that contains the H-4/H-8 CAGE 
master file issued by DLIS (Their address is: Customer Service, Federal 
Center, 74 Washington Avenue, North, Battle Creek, MI 49017-3084. Their 
telephone number is: toll-free 1-888-352-9333);

    (B) The on-line access to the CAGE file through the Defense 
Logistics Information System;

    (C) The on-line access to the Defense Logistics Agency (DLA) CAGE 
file through the DLA Network or dial-up capability; or
    (D) The Internet to access the CAGE Lookup Server at http://
www.dlis.dla.mil/cageserve.htm.

    (ii) If no CAGE code is identified through use of the procedures in 
paragraph (b)(2)(i) of this subsection, ask DLIS to assign a CAGE code. 
Submit a DD Form 2051, Request for Assignment of a Commercial and 
Government Entity (CAGE) Code, (or electronic equivalent) to the 
address in paragraph (b)(2)(i)(A) of this subsection, ATTN: DLIS-SBB. 
The contracting office completes Section A of the DD Form 2051, and the 
contractor completes Section B. The contracting office must verify 
Section B before submitting the form.

    (c) Direct questions on obtaining computer tapes, electronic 
updates, or code assignments to DLIS (DLIS-SBB) at DSN 932-4381, or 
commercial (616) 961-4381.


204.7202-2   DUNS numbers.

    Requirements for use of DUNS numbers are in FAR 4.602(d) and 4.603.


204.7202-3   TINs.

    Requirements for use of TINs are in FAR subpart 4.9.


204.7203   Responsibilities of contracting officers.

    (a) Assist offerors in obtaining the required CAGE codes.

    (b) Do not deny a potential offeror a solicitation package because 
the offeror does not have a contractor identification code.

    (c) Consider requesting a CAGE code at the time a potential offeror 
is sent a solicitation package or added to the mailing list to ensure 
that a code is assigned in sufficient time to process the DD Form 350, 
Individual Contracting Action Report, without delay.


204.7204   Maintenance of the CAGE file.

    (a) DLIS will accept written requests for changes to CAGE files, 
other than name changes, from the following entities:

    (1) The entity identified by the code. The entity must use company 
letterhead to forward the request.

    (2) The contracting office.

    (3) The contract administration office.

    (b) Submit requests for changes to CAGE files on DD Form 2051, or 
electronic equivalent, to--Defense Logistics Information Service, DLIS-
SBB, Federal Center, 74 Washington Avenue, North Battle Creek, MI 
49017-3084. Telephone Numbers: DSN 932-4381, commercial (616) 961-4381. 
Facsimile: (616) 961-4528, 4388, 4485.

    (c) The contracting officer responsible for execution of a change-
of-name agreement (see FAR subpart 42.12) must submit the agreement to 
DLIS-SBB. If there are no current contracts, each contracting and 
contract administration office receiving notification of changes from 
the commercial entity must forward a copy of the change notice 
annotated with the CAGE code to DLIS-SBB unless the change notice 
indicates that DLIS-SBB already has been notified.

    (d) Additional guidance for maintaining CAGE codes is in Volume 7 
of DoD 4100.39-M, Federal Logistics Information System (FLIS) 
Procedures Manual.

    7. Sections 204.7302 through 204.7304 are revised to read as 
follows:


204.7302   Policy.

    Prospective contractors must be registered in the CCR database 
prior to award of a contract, basic agreement, basic ordering 
agreement, or blanket purchase agreement, except for--

    (a) Purchases paid for with a Governmentwide commercial purchase 
card;

    (b) Awards made to foreign vendors for work performed outside the 
United States;

    (c) Classified contracts or purchases (see FAR 4.401) when 
registration in the CCR database, or use of CCR data, could comprise 
the safeguarding of classified information or national security;

    (d) Contracts awarded by deployed contracting officers in the 
course of military operations, including, but not limited to, 
contingency operations as defined in 10 U.S.C. 101(a)(13) or 
humanitarian or peacekeeping operations as defined in 10 U.S.C. 
2302(7), or contracts awarded by contracting officers in the conduct of 
emergency operations, such as responses to natural disasters or 
national or civil emergencies; and

    (e) Purchases to support unusual or compelling needs of the type 
described in FAR 6.302-2.


204.7303   Procedures.

    (a)(1) Except as provided in 204.7302, the contracting officer must 
require each offeror to provide a DUNS number (see 204.603(2)) or, if 
applicable, a DUNS+4 number, with its verbal or written offer, 
regardless of the dollar amount of the offer.

    (2) Before awarding a contract, basic agreement, basic ordering 
agreement, or blanket purchase agreement, the contracting officer must 
verify that the prospective contractor is registered in the CCR 
database (but see paragraph (b) of this section). The contracting 
officer may verify registration using the DUNS number or, if 
applicable, the DUNS+4 number, by calling toll-free: 1-800-841-4431, 
commercial: (616) 961-5757, or DSN: 932-5757; via the Internet at 
http://ccr.edi.disa.mil/ccr/cgi-bin/status.pl; or as otherwise provided 
by agency procedures.

    (3) The contracting officer need not verify registration before 
placing an order or call under a DoD contract or agreement.
    (4) The contracting officer must verify registration before placing 
an order or call under a non-DoD contract or agreement. If the 
contracting is not registered, the contracting officer must follow the 
procedures in paragraph (b) of this section.


[[Page 43101]]


    (5) As part of the annual review of basic agreements, basic 
ordering agreements, and blanket purchase agreements, contracting 
officers must modify these agreements to incorporate the clause at 
252.204-7004, Required Central Contractor Registration.

    (b) If the contracting officer determined that a prospective 
contractor is not registered in the CCR database and an exception to 
the registration requirements for the awarded does not apply (see 
204.7302), the contracting officer must--

    (1) If the needs of the requiring activity allow for a delay, 
proceed toward after the contractor is registered; or

    (2) If the needs of the requiring activity do not allow for a 
delay, proceed to award to the next otherwise successful registered 
offeror, provided that written approval is obtained at one level above 
the contracting officer.

    (c) Agencies must protect against improper disclosure of contractor 
CCR information.

    (d) The contracting officer must, on contractual documents 
transmitted to the payment office, provide either the Commercial and 
Government Entity code or the DUNS number in accordance with agency 
procedures.


Sec. 204.7304  Contract clause.

    Except as provided in 204.7302, use the clause at 252.204-7004, 
Required Central Contractor Registration, in solicitations and 
contracts.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

    8. Section 212.301 is amended by adding paragraph (b)(2) to read as 
follows:


Sec. 212.301  Solicitation provisions and contract clauses for the 
acquisition of commercial items.

    (b)(2) Paragraph (b) of the provision at FAR 52.212-3 does not 
apply when the solicitation includes the clause at 252.204-7004, 
Required Central Contractor Registration.
* * * * *

PART 213--SIMPLIFIED ACQUISITION PROCEDURES

    9. Subpart 213.1 is added to read as follows:

Subpart 231.1--Procedures

Sec.
213.106-3  Award and documentation.


Sec. 213.106-3  Award and documentation.

    (e) The procedures at FAR 13.106-3(e) do not apply when the 
contract includes the clause at 252.204-7004, Required Central 
Contractor Registration.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    10. Section 252.204-7001 is revised to read as follows:


Sec. 252.204-7001  Commercial and Government Entity (CAGE) Code 
Reporting.

    As prescribed in 204.603(1), use the following provision:

Commercial and Government Entity (CAGE) Code Reporting (Aug 1999)

    (a) The offeror is requested to enter its CAGE code on its offer 
in the block with its name and address. The CAGE code entered must 
be for that name and address. Enter ``CAGE'' before the number.
    (b) If the offeror does not have a CAGE code, it may ask the 
Contracting Officer to request one from the Defense Logistics 
Information Service (DLIS). The Contracting Officer will--
    (1) Ask the Contractor to complete section B of a DD Form 2051, 
Request for Assignment of a Commercial and Government Entity (CAGE) 
Code;
    (2) Complete section A and forward the form to DLIS; and
    (3) Notify the Contractor of its assigned CAGE code.
    (c) Do not delay submission of the offer pending receipt of a 
CAGE code.

(End of provision)

PART 253--FORMS

    11. Section 253.204-70 is amended by revising paragraph 
(b)(5)(ii)(F) (3) to read as follows:


Sec. 253.204-70  DD Form 350, Individual Contracting Action Report.

* * * * *

    (b) * * *

    (5) * * *

    (ii) * * *

    (F) * * *

    (3) An agency or instrumentality of the Federal Government.
* * * * *
[FR Doc. 99-20283 Filed 8-6-99; 8:45 am]
BILLING CODE 5000-04-M