[Federal Register Volume 64, Number 185 (Friday, September 24, 1999)]
[Rules and Regulations]
[Pages 51828-51829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24409]



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Part II

Department of Defense

General Services Administration

National Aeronautics and Space Administration
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48 CFR Chapter 1 and Parts 1, 5, 6, et al.



Federal Acquisition Regulation; Federal Acquisition Circular 97-14 and 
Small Entity Compliance Guide; Final Rules

  Federal Register / Vol. 64, No. 185 / Friday, September 24, 1999 / 
Rules and Regulations  

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1


Federal Acquisition Circular 97-14; Introduction

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

ACTION: Summary presentation of final and interim rules, and technical 
amendments.

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SUMMARY: This document summarizes the Federal Acquisition Regulation 
(FAR) rules issued by the Civilian Agency Acquisition Council and the 
Defense Acquisition Regulations Council in this Federal Acquisition 
Circular (FAC) 97-14. A companion document, the Small Entity Compliance 
Guide (SECG), follows this FAC. The FAC, including the SECG, is 
available via the Internet at http://www.arnet.gov/far.

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

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact the analyst whose name appears in the table below in 
relation to each FAR case or subject area. Please cite FAC 97-14 and 
specific FAR case number(s). Interested parties may also visit our 
website at http://www.arnet.gov/far.

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           Item                               Subject                      FAR case             Analyst
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I.........................  Very Small Business Concerns...............       98-013  Moss.
II........................  Historically Underutilized Business Zone          97-307  Moss.
                             (HUBZone) Empowerment Contracting Program.
III.......................  Use of Competitive Proposals...............       99-001  DeStefano.
IV........................  Javits-Wagner-O'Day Proposed Revisions.....       98-602  DeStefano.
V.........................  OMB Circular A-119.........................       98-004  Moss.
VI........................  Determination of Price Reasonableness and         98-300  Olson.
                             Commerciality (Interim).
VII.......................  Conforming Late Offer Treatment............       97-030  DeStefano.
VIII......................  Evaluation of Proposals for Professional          97-038  Olson.
                             Services.
IX........................  Option Clause Consistency..................       98-606  DeStefano.
X.........................  Compensation for Senior Executives.........       98-301  Nelson.
XI........................  Interest and Other Financial Costs.........       98-006  Nelson.
XII.......................  Cost-Reimbursement Architect-Engineer             97-043  O'Neill.
                             Contracts.
XIII......................  Conditionally Accepted Items...............       98-002  Klein.
XIV.......................  Value Engineering Change Proposals/PAT.....       97-031  Klein.
XV........................  Cost Accounting Standards Post-Award              98-003  Nelson.
                             Notification.
XVI.......................  Technical Amendments.......................
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SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the 
actual revisions and/or amendments to these FAR cases, refer to the 
specific item number and subject set forth in the documents following 
these item summaries.
    Federal Acquisition Circular 97-14 amends the FAR as specified 
below:

Item I--Very Small Business Concerns (FAR Case 98-013)

    This final rule converts the interim rule published as Item II of 
FAC 97-11 to a final rule with changes. The interim rule amended FAR 
5.207, 8.404, 12.303, 19.000, 19.001, 19.102, 19.502-2, 19.901 through 
19.904, 52.212-5, and 52.219-5, to implement the Small Business 
Administration's Very Small Business Pilot Program (13 CFR Parts 121 
and 125). This program became effective on January 4, 1999.

Item II--Historically Underutilized Business Zone (HUBZone) 
Empowerment Contracting Program (FAR Case 97-307)

    This final rule converts the interim rule published as Item I of 
FAC 97-10 to a final rule with amendments at FAR 6.201, 19.306, 19.307, 
19.800, 19.1303, and the provision at 52.219-1. This final rule amends 
the FAR to implement the Small Business Administration's Historically 
Underutilized Business (HUBZone) Program. The purpose of the program is 
to provide Federal contracting assistance for qualified small business 
concerns located in historically underutilized business zones in an 
effort to increase employment opportunities, investment, and economic 
development in these areas. The program provides for set-asides, sole 
source awards, and price evaluation preferences for HUBZone small 
business concerns and establishes goals for awards to such concerns.

Item III--Use of Competitive Proposals (FAR Case 99-001)

    This final rule amends FAR 6.401 to delete the requirement for 
contracting officers to explain in writing their rationale for choosing 
to use competitive proposals rather than sealed bidding.

Item IV--Javits-Wagner-O'Day Proposed Revisions (FAR Case 98-602)

    This final rule adds a new section, FAR 8.716, and amends paragraph 
(a) of FAR 42.1203 to provide procedures for recognizing a name change 
or a successor in interest for a Javits-Wagner-O'Day Act participating 
nonprofit agency providing supplies or services on the Procurement List 
maintained by the Committee for Purchase From People Who Are Blind or 
Severely Disabled.

Item V--OMB Circular A-119 (FAR Case 98-004)

    This final rule amends FAR 11.101, 11.107, 11.201, and adds a 
provision at 52.211-7 to address the use of voluntary consensus 
standards in accordance with the requirements of Office of Management 
and Budget (OMB) Circular A-119.

Item VI--Determination of Price Reasonableness and Commerciality 
(FAR Case 98-300)

    This interim rule revises FAR 12.209, 13.106-3(a)(2), and amends 
Subpart 15.4 to implement Section 803 of the Strom Thurmond National 
Defense Authorization Act for Fiscal Year 1999 (Pub. L. 105-261). 
Section 803 requires amending the FAR to provide specific guidance 
concerning--
     The appropriate application and precedence of various 
price analysis tools;
     The circumstances under which contracting officers should 
require

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offerors of exempt commercial items to provide information other than 
cost or pricing data; and
     The role and responsibility of support organizations in 
determining price reasonableness.
    This interim rule also revises FAR 15.403-3(a) to implement Section 
808 of the Strom Thurmond National Defense Authorization Act for Fiscal 
Year 1999 (Pub. L. 105-261). Section 808 requires amending the FAR to--
     Clarify procedures associated with obtaining information 
other than cost or pricing data when acquiring commercial items;
     Establish that offerors who fail to comply with 
requirements to provide the information shall be ineligible for award; 
and
     Establish exceptions, as appropriate.

Item VII--Conforming Late Offer Treatment (FAR Case 97-030)

    This final rule amends FAR 14.201-6, 14.304, and 15.208, the 
provisions at 52.212-1, 52.214-7, 52.214-23, and 52.215-1, and removes 
52.214-32 and 52.214-33 to provide uniform guidance regarding receipt 
of late offers for commercial, sealed bid, and negotiated acquisitions.

Item VIII--Evaluation of Proposals for Professional Services (FAR 
Case 97-038)

    This final rule amends FAR 15.305(a)(1) and 37.115-2(c) to provide 
guidance on the evaluation of proposals that include uncompensated 
overtime hours.

Item IX--Option Clause Consistency (FAR Case 98-606)

    This final rule amends FAR 17.208(g) to clarify that the time 
period for providing a preliminary notice of the Government's intent to 
exercise a contract option in the clause at FAR 52.217-9 may be 
tailored and amends the clause at FAR 52.217-8 to make the format of 
the Option to Extend Services clause consistent with the format of 
other option clauses in the FAR.

Item X--Compensation for Senior Executives (FAR Case 98-301)

    This final rule coverts the interim rule published as Item VIII of 
FAC 97-11 to a final rule without change. The rule amends FAR Part 31 
to implement Section 804 of the Strom Thurmond National Defense 
Authorization Act for Fiscal Year 1999 (Pub. L. 105-261). Section 804 
revises the definition of ``senior executive'' at 10 U.S.C. 2324(1)(5) 
and at 41 U.S.C. 256(m)(2) to be ``the five most highly compensated 
employees in management positions at each home office and each segment 
of the contractor'' even though the home office or segment might not 
report directly to the contractor's headquarters.

Item XI--Interest and Other Financial Costs (FAR Case 98-006)

    This final rule amends FAR 31.205-20 to make minor changes to the 
cost principle concerning ``interest and other financial costs.''

Item XII--Cost-Reimbursement Architect-Engineer Contracts (FAR Case 
97-043)

    This final rule amends the clause prescriptions at FAR 36.609, 
44.204, 49.503, and the clause preface at 52.236-25, Requirements for 
Registration of Designers, to include application of certain clauses to 
cost-reimbursement architect-engineer contracts.

Item XIII--Conditionally Accepted Items (FAR Case 98-002)

    This final rule amends FAR 46.101 to add a definition of 
conditional acceptance; and FAR 46.407 to require that, when 
conditionally accepting nonconforming items, amounts withheld from 
payments should be at least sufficient to cover the cost and related 
profit to correct deficiencies and complete unfinished work. FAR 46.407 
has also been revised to require that the basis for the amounts 
withheld be documented in the contract file.

Item XIV--Value Engineering Change Proposals/PAT (FAR Case 97-031)

    This final rule amends the value engineering change proposal (VECP) 
guidance in FAR 48.001, 48.102, 48.104, 48.201, and the FAR clause at 
52.248-1 to allow the contracting officer to increase the sharing 
period from 36 to a range of 36 to 60 months; increase the contractor's 
share of instant, concurrent and future savings under the incentive/
voluntary sharing arrangement from 50 to a range of 50 to 75 percent; 
and increase the contractor's share of collateral savings from 20 to a 
range of 20 to 100 percent on a case-by-case basis for each VECP.

Item XV--Cost Accounting Standards Post-Award Notification (FAR 
Case 98-003)

    This final rule revises paragraph (e) of the clause at FAR 52.230-
6, Administration of Cost Accounting Standards, to reduce the 
subcontractor information that a contractor is required to provide to 
its cognizant contract administration office (CAO) when requesting the 
CAO to perform administration for Cost Accounting Standards matters.

Item XVI--Technical Amendments

    Amendments are being made at 1.106, 15.305, 19.102, 52.211-6, and 
52.219-18 in order to update references and make editorial changes.

    Dated: September 14, 1999.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

Federal Acquisition Circular

    Federal Acquisition Circular (FAC) 97-14 is issued under the 
authority of the Secretary of Defense, the Administrator of General 
Services, and the Administrator for the National Aeronautics and Space 
Administration.
    Unless otherwise specified, all Federal Acquisition Regulation 
(FAR) and other directive material contained in FAC 97-14 are effective 
November 23, 1999, except for Items VI and XVI, which are effective 
September 24, 1999. Sections 19.102 and 52.219-18, which are included 
in Item XVI, are effective November 23, 1999.

    Dated: September 10, 1999.
Eleanor R. Spector,
Director, Defense Procurement.

    Dated: September 13, 1999.
J. Les Davison,
Acting Deputy Associate Administrator, Office of Acquisition Policy, 
General Services Administration.

    Dated: September 13, 1999.
Tom Luedtke,
Associate Administrator for Procurement, National Aeronautics and Space 
Administration.
[FR Doc. 99-24409 Filed 9-23-99; 8:45 am]
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